Investor Presentaiton
En+
GROUP
FINANCIAL REVIEW
En+ Group Annual Report 2021
STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
APPENDICES
CONTINGENCIES
The summary of the Group's principal
contingencies is set out below. For
a detailed discussion of the Group's
contingencies in 2021, including
environmental contingencies, risks
and considerations, see Note 22 of
the Annual Financial Statements.
Taxation
Russian tax, currency and customs
legislation is subject to varying
interpretations, and changes, which
can occur frequently. Management's
interpretation of such legislation, as
applied to the transactions and activities
of the Group, may be challenged by
the relevant local, regional or federal
authorities. Notably recent developments
in the Russian environment suggest
that the authorities in this country are
becoming more active in seeking to
enforce, through the Russian court system,
interpretations of the tax legislation,
in particular in relation to the use of
certain commercial trading structures,
which may be selective for particular tax
payers and different from the authorities'
previous interpretations or practices.
Different and selective interpretations of
tax regulations by various government
authorities and inconsistent enforcement
create further uncertainties in the taxation
environment in the Russian Federation.
Tax risks attributable to the Group,
together with an estimate of the maximum
possible additional amounts which may
reasonably become payable in respect
of such risks, are disclosed in Note 22 (a)
of the Annual Financial Statements.
Legal contingencies
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 an
outflow of economic benefits for the
Group, a best estimate of such outflow is
included in provisions in the consolidated
financial statements (Note 22 (c)). 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).
FINANCIAL RATIOS
Gearing
The Group's gearing ratio - the ratio of
total debt (including both long-term
and short-term borrowings and bonds
outstanding) to total assets - as at
31 December 2021 and 31 December 2020,
was 41.9% and 54.7%, respectively.
Return on equity
The Group's return on equity - the
amount of net profit as a percentage
of total equity - was 34.3% and
16.8% as at 31 December 2021 and
31 December 2020, respectively.
Interest coverage ratio
The Group's interest coverage ratio -
the ratio of earnings before interest and
taxes to net interest - for the years ended
31 December 2021 and 31 December 2020,
was 4.5x and 1.4x, respectively.
GOING CONCERN
The Group closely monitors and manages
its funding position and liquidity
risk throughout the year, including
monitoring forecast results, to ensure
that it has access to sufficient funds
to meet forecast cash requirements.
Cash forecasts are regularly produced
and sensitivities considered for, but
not limited to, changes in power and
aluminium prices, foreign exchange
and interest rates, production rates,
costs and interests. These forecasts and
sensitivity analyses allow management
to mitigate liquidity or covenant
compliance risks in a timely manner.
After making enquiries of management,
the Directors believe that adoption of
the going concern basis in preparing the
financial statements is appropriate.
REPORT ON PAYMENTS TO GOVERNMENTS
The table below shows the amounts paid by the Group's entities
to public authorities (primarily in the form of miscellaneous taxes
and levies) in connection with their extraction activities:
Type of payment
2021 ('000 USD)
Russia
Kazakhstan
Ukraine Guinea Guyana Jamaica
Total
Production fees
Taxes or levies on
corporate sales,
production or profits
54,615
24,843
88 5,887
17 14,061 99,512
Royalties
692
692
Dividends
Signing-on,
discovery and
production bonuses
License fees, rental
charges, entry
fees and other
consideration for
licenses and/or
concessions
Infrastructure
T
4,642
1,101
56
347
55
6,201
improvement
payments
Total
2,844
62,102
248
26,193
3,093
144 5,887
364 14,808 109,497
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