Investor Presentaiton

En+ GROUP FINANCIAL STATEMENTS (c) En+ Group Annual Report 2021 STRATEGIC REPORT CORPORATE GOVERNANCE EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2021 Depreciation expense of USD 778 million (2020: USD 738 million) has been charged to cost of goods sold, USD 8 million (2020: USD 6 million) to distribution expenses and USD 25 million (2020: USD 27 million) to administrative expenses. Interest capitalised for the years ended 31 December 2021 and 31 December 2020 was USD 9 million and USD 12 million, respectively. Included in construction in progress at 31 December 2021 and 31 December 2020 are advances to suppliers of property, plant and equipment of USD 174 million and USD 145 million, respectively. Impairment Management reviewed the carrying amount of the Group's non-financial assets at the reporting date to determine whether there were any indicators of impairment or reversal of impairment. Management identified several factors that indicated that for a number of the Group's CGUS previously recognised impairment losses may require reversal and for a number of CGUS impairment losses may need to be recognised. These include significant increase of aluminium prices as a result of LME appreciation, significant increase of oil and gas prices and overall market instability, fluctuations of coal sale prices and additional volumes of electricity transmission set in further periods. For alumina cash generating units, the major influence was unfavourable fluctuations in prices of energy resources which are a significant part of cash cost. For bauxite cash generating units, sales prices and the cash cost of bauxite were relatively stable. For the purposes of impairment testing, value in use of each cash generating unit was determined by discounting expected future net cash flows of the cash generating unit. Values assigned to key assumptions and estimates used to measure the units' recoverable amount was based on external sources of information and historical data. Management believes that the values assigned to the key assumptions and estimates represented the most realistic assessment of future trends. The risk factors related to future COVID-19 uncertainties have been incorporated into the discount rates applied. METALS At 31 December 2021 and 31 December 2020 management identified several indicators that a number of the Group's CGUS may be impaired or that previously recognised impairment losses may need to be reversed. Based on results of impairment testing as at 31 December 2021, management concluded that a reversal of previously recognised impairment loss relating to property, plant and equipment should be recognised in these consolidated financial statements in respect of KAZ, VgAZ, Kubal and Taishet aluminium smelters (the latter aluminium smelter under construction) in the amount of USD 699 million. Additionally management concluded that at the same date an impairment loss relating to property, plant and equipment of Mykolaiv alumina refinery and Aughinish Alumina in the amount of USD 693 million should be recognised in these consolidated financial statements. Based on results of impairment testing as at 31 December 2020, management has concluded that a reversal of previously recognised impairment loss relating to property, plant and equipment should be recognised in those consolidated financial statements in respect of Taishet aluminium smelter (aluminium smelter under construction) and Mykolaiv alumina refinery in the amount of USD 158 million. The pre-tax discount rates applied to the above mentioned cash generating units, estimated in nominal terms based on an industry weighted average cost of capital, are presented in the table below. EN+ GROUP IPJSC Notes to the Consolidated Financial Statements for the year ended 31 December 2021 The recoverable amounts of a number of the cash generating units tested for impairment are particularly sensitive to changes in forecast aluminium and alumina prices, foreign exchange rates and applicable discount rates. Additionally, management identified specific items of property, plant and equipment that are no longer in use and therefore are not considered to be recoverable amounting to USD 190 million at 31 December 2021 (2020: USD 117 million). These assets have been impaired in full. No further impairments of property, plant and equipment or reversal of previously recorded impairment were identified. POWER At 31 December 2021 and 2020 management identified several indicators that property, plant and equipment of the Coal, Irkutsk GridCo and CHPS CGUS may be impaired or that previously recognised impairment losses may need to be reversed. Based on results of impairment testing as at 31 December 2021, management concluded that impairment losses of USD 17 million should be recognized regarding Irkutsk GridCo CGU. As at 31 December 2020 no impairment losses regarding CGUs described above were recognised. The following key assumptions were used to determine the recoverable amount of the Coal CGU: Sales volumes of coal in 2022/2021 Expected growth of sales volumes of coal till 2031/2030 Weighted average price for coal in 2022/2021 Weighted average price growth after 2022/2021 Post-tax discount rate Year ended 31 December 2021 13,889 ths tonnes 12% USD 13 (RUB 930) 2020 12,885 ths tonnes 12% USD 12 (RUB 890) 2%-4% 13.0% 4% 12.5% The recoverable amount of the Coal CGU is particularly sensitive to changes in forecast of sales volumes, coal prices and applicable discount rates. A 1% increase of the discount rate applied would have resulted in the decrease in the recoverable amount of Coal CGU but would not lead to an impairment. The following key assumptions were used to determine the recoverable amount of the Irkutsk GridCo CGU: Sales volumes of electricity transmission in 2022/2021 Expected growth of sales volumes till 2031/2030 Tariffs for electricity transmission in 2022/2021 Tariffs growth till 2031/2030 Post-tax discount rate Year ended 31 December 2021 51 mln MWh 10% USD 6-9 (RUB 445-665) 42% 12.5% 2020 50 mln MWh 10% USD 6-9 (RUB 400-629) 42% 12.0% The anticipated price/tariffs growth included in the cash flow projections for the years from 2022 to 2031 have been based on the publicly available forecasts of Ministry of Economic Development of the Russian Federation. The recoverable amounts estimated at 31 December 2021 and 31 December 2020 include cash flows from sales of electricity transmission to Taishet aluminium smelter. The recoverable amount of the Irkutsk GridCo CGU is also particularly sensitive to changes in forecast electricity transmission volumes and tariffs, as well as applicable discount rates. 170 Taishet aluminium smelter Mykolaiv alumina refinery Kubikenborg Aluminium (Kubal) KAZ (Kandalaksha aluminium smelter) VgAZ (Volgograd aluminium smelter) Aughinish Alumina Year ended 31 December 2021 2020 11.2% 11.8% 16.5% 18.7% 14.3% 19.8% 15.8% 15.5% 15.2% 14.8% 10.8% 11.9% FINANCIAL STATEMENTS Appendices 171