En+ Group 2017 Annual Report En+ Group | 2017 Annual Report About the Report In this Annual Report, the terms “En+”, “En+ Group”, “we”, the “Company” and the “Group” in various forms shall mean En+ Group plc and its subsidiaries whose results are included in the consolidated financial statements prepared in accordance with the International Financial Reporting Standards. This is the Annual Report of En+ Group plc. The Annual Report explains the Company’s strategy, business model, internal control and risk management processes currently in place. These documents, however, are being constantly reviewed and internally updated given the uncertainty, created by the imposition of certain limitations by the Office of Foreign Assets Control of the U.S. Treasury (OFAC). The Company, thus, considers that it is not in a position to provide a comprehensive performance outlook due to the magnitude of the OFAC sanctions and their potential effect on the Group’s operations and business performance. The Corporate Governance section covers the role and activities of the Board of Directors (BoD), committees of the BoD and management team in running the business. The detailed Financials, accompanied by a report from the Group’s auditors, complete the Annual Report. Unless stated otherwise, financial results included in the 2017 Annual Report are presented and calculated based on the consolidated financial statements prepared in accordance with the International Financial Reporting Standards. Some numbers in the tables, charts and diagrams hereof may differ from the sums of addends due to rounding. The En+ Group Annual Report was approved by the Board of Directors on 27 April 2018. 2 En+ Group | 2017 Annual Report WARNING The information presented in this Annual Report only reflects the Company’s position during the review period from 1 January 2017 to 31 December 2017 (the “Review Period”) pursuant to the requirements of the Listing Rules (“LR”) published by the UK’s Financial Conduct Authority (the “FCA”) in its capacity as competent authority under the Financial Services and Markets Act 2000 (as amended) and the FCA’s Disclosure Guidance and Transparency Rules (“DTRs”) (the LR and the DTR together being the “Rules”) (unless otherwise specified). Accordingly, all forward-looking statements, analyses, reviews, discussions, commentaries and risks presented in this Annual Report (save for this Warning, “Recent Development of the Company” and “Corporate Governance” sections and unless otherwise specified) are based upon the financial information of the Company covering the Review Period only and not thereafter. Shareholders and potential investors should be aware that on 6 April 2018, the Office of Foreign Assets Control of the Department of the Treasury of the United States of America (the “U.S. Treasury”) designated, amongst others, certain persons and certain companies which are controlled or deemed to be controlled by some of these persons to be added to its Specially Designated Nationals List (the “OFAC Sanctions”). The designated persons/entities include Mr. Oleg Deripaska, a non-executive director of the Company and its ultimate beneficial owner, the Company, United Company RUSAL Plc. (the “UC RUSAL”), JSC Eurosibenergo and two of the Company’s direct major shareholders, B-Finance Ltd., a BVI company, and Basic Element Limited, a Jersey company, each controlled by Mr. Deripaska. A press statement issued by the U.S. Treasury in respect of the OFAC Sanctions on 6 April 2018 states that: “All assets subject to U.S. jurisdiction of the designated individuals and entities, and of any other entities blocked by operation of law as a result of their ownership by a sanctioned party, are frozen, and U.S. persons are generally prohibited from dealings with them. Additionally, non-U.S. persons could face sanctions for knowingly facilitating significant transactions for or on behalf of the individuals or entities blocked today.” As stated in the announcement of the Company dated 9 April 2018, the Company’s initial assessment is that it is highly likely that the impact of the OFAC Sanctions on the Group may be materially adverse to the business and prospects of the Group. The Company is currently in the process of conducting further evaluation to assess the impact of the OFAC Sanctions on the Group and is closely monitoring the development. Further announcements will be published by the Company as and when appropriate in accordance with the requirements of the Rules and applicable laws and regulations. Shareholders and potential investors should be aware that the information presented in this Annual Report (save for this Warning, the “Recent Development of the Company” and “Corporate Governance” sections, and unless otherwise specified) does not take into account the OFAC Sanctions or any potential impact which the OFAC Sanctions may have on the Company or the Group. Accordingly, the information presented in this Annual Report (save for this “Warning”, the “Recent Development of the Company” and “Corporate Governance” sections, and unless otherwise specified), including but not limited to all forward-looking statements, analyses, reviews, discussions, commentaries and risks, does not reflect the latest position (financial or otherwise) of the Group. Given the global nature of the business of the Group, the international politico-economic dimension of the OFAC Sanctions and the potential cross-jurisdictional implications of the OFAC Sanctions, this matter is continually evolving. GDR holders, shareholders and potential investors are, therefore, strongly advised to make reference to the latest announcements (i.e. announcements issued by the Company on and after 9 April 2018) issued by the Company before dealing in the securities of the Company. GDR holders, shareholders and potential investors should exercise extreme caution when dealing in the securities of the Company. If in doubt, they are strongly advised to consult their stockbrokers, bank managers, solicitors and/or other professional advisers before dealing in the securities of the Company. 3 En+ Group | 2017 Annual Report Contents Recent Development of the Company ....................................................................................................... 5 Key figures ................................................................................................................................................... 6 Business Model and Strategy ..................................................................................................................... 7 Chairman’s Statement ................................................................................................................................ 8 Operational Performance ........................................................................................................................... 9 Metals Segment ........................................................................................................................................ 9 Market Overview................................................................................................................................... 9 Business Overview .............................................................................................................................. 11 Assets Overview .................................................................................................................................. 17 Energy Segment ..................................................................................................................................... 18 Market Overview................................................................................................................................. 18 Business Overview .............................................................................................................................. 20 Assets Overview .................................................................................................................................. 22 Management Discussion and Analysis ..................................................................................................... 23 Corporate Social Responsibility ............................................................................................................... 50 Internal Control and Risk Management ................................................................................................. 57 Internal Control .................................................................................................................................... 57 Risk Management .................................................................................................................................. 58 Corporate Governance ............................................................................................................................. 62 Board of Directors ................................................................................................................................. 63 Management Team ................................................................................................................................ 66 Board Responsibilities .......................................................................................................................... 67 Committees ...........................................................................................................................................