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.
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