Investor Presentaiton slide image

Investor Presentaiton

En+ GROUP FINANCIAL STATEMENTS En+ Group Annual Report 2021 STRATEGIC REPORT CORPORATE GOVERNANCE FINANCIAL STATEMENTS Appendices (c) Legal contingencies (d) EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2021 EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2021 Purchases of raw materials and services from related parties for the period were as follows: Year ended 31 December 2021 USD million The Group's business activities expose it to a variety of lawsuits and claims which are monitored, assessed and contested on an ongoing basis. Where management believes that a lawsuit or another claim would result in the outflow of the economic benefits for the Group, a best estimate of such outflow is included in provisions in the consolidated financial statements (note 18(e)). As at 31 December 2021, the amount of claims, where management assesses outflow as possible approximates USD 21 million (31 December 2020: USD 21 million). Other contingent liabilities Where the Group enters into financial guarantee contracts to guarantee the indebtedness of related parties, the Group considers these to be insurance arrangements and accounts for them as such. In this respect, the Group treats the guarantee contract as a contingent liability until such time as it becomes probable that the Group will be required to make a payment under the guarantee. In September 2013, UC RUSAL and PJSC RusHydro entered into an agreement with BOAZ to provide loans, if the latter is unable to fulfil its obligations under its credit facilities. The aggregate exposure under the agreement is limited to RUB 16.8 billion (31 December 2021 and 31 December 2020 USD 226 million and USD 227 million, respectively) and is split between the Group and PJSC RusHydro in equal proportion. Related party transactions 23. (a) (a) (b) Accounting policy A person, or a close member of that person's family, is related to the Group if that person: (i) Has control or joint control over the Group; (ii) Has significant influence over the Group; or Is a member of the key management personnel of the Group or the Group's parent. An entity is related to the Group if any of the following conditions applies: (b) (i) The entity and the Group are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (11 One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). (iii) Both entities are joint ventures of the same third party. (iv) (v) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. The entity is a post-employment benefit plan for the benefit of employees of either the Group or an entity related to the Group. (vi) The entity is controlled or jointly controlled by a person identified in (a). (vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). (viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the group or to the group's parent. Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity. Transactions with related parties The Group transacts with related parties, the majority of which are under control of SUAL Partners Limited or its shareholders, associates and joint ventures and other related parties. Sales to related parties for the year are disclosed in note 5, trade receivables from related parties are disclosed in note 15(b), accounts payable to related parties are disclosed in note 15(c). Purchase of raw materials Companies capable of exerting significant influence Associates and joint ventures Energy costs 2020 USD million (738) (480) (24) (15) (714) (465) (76) (63) Companies capable of exerting significant influence (33) (27) Other related parties (1) (1) Associates and joint ventures (42) (35) Other services (111) (114) (111) (112) (925) (657) Other related parties Associates and joint ventures (c) Related parties balances (d) 24. At 31 December 2021, included in non-current assets are balances of related parties - associates and joint ventures of USD 2 million (31 December 2020: USD 4 million). At 31 December 2021, included in non-current liabilities are balances of related parties associates and joint ventures of USD 14 million (31 December 2020: USD 12 million). Remuneration to key management For the year ended 31 December 2021 remuneration to key management personnel comprised short-term benefits and amounted to USD 26 million from which Board members received USD 10 million (year ended 31 December 2020: USD 19 million from which Board members received USD 7 million). Events subsequent to the reporting date The growing geopolitical tensions and the recent developments in Ukraine have had a negative impact on the Russian economy, including difficulties in obtaining international funding, significant increase in volatility on the securities and currency markets as well as significant devaluation of national currency and high inflation. In 2022, the United States of America and the European Union have imposed sanctions against a number of Russian banks, which restrict their access to European financial markets, foreign assets were frozen for certain banks, and sanctions were introduced that restrict the access of Russian organisations to Euro and US dollar markets. A number of other countries announced new packages of sanctions against certain Russian legal entities and personal sanctions against a number of individuals. In March 2022, new temporary restrictive economic measures were introduced in Russian Federation, which include, amongst others, a prohibition for residents to issue loans to non-residents in foreign currency or to deposit foreign currency in their own bank accounts, and limitations on dividends and other payments on securities to foreign investors. In March 2022, Australia banned the export of alumina and bauxite to Russia. At the beginning of March 2022, the Group has temporarily suspended the production at Mykolaiv Alumina Refinery Company Ltd in view of developments in Ukraine. These measures and events may influence the availability of alumina and bauxite or increase the purchase prices for Group. Major international shippers have suspended bookings to and from Russia which will require the Group to rebuild the supply and sales chains and may lead to additional logistics costs. If the situation persists or continues to develop significantly, including with the loss of significant parts of foreign markets which cannot be reallocated to new markets, this may affect the Group's business, financial condition, prospects and results of operations. 208 209
View entire presentation