United Company RUSAL Plc

Consolidated Financial Statements

for the year ended
31 December 2019
Contents
Statement of Directors’ Responsibilities 3
Independent Auditors’ Report 4
Consolidated Statement of Income 9
Consolidated Statement of Comprehensive Income 10
Consolidated Statement of Financial Position 11
Consolidated Statement of Changes in Equity 13
Consolidated Statement of Cash Flows 14
Notes to the Consolidated Financial Statements 16
Statement of Directors’ Responsibilities

The Directors acknowledge that it is their responsibility to prepare the consolidated financial statements
for the year ended 31 December 2019, in accordance with applicable law and regulations.

Company law requires the Directors to prepare consolidated financial statements for each financial
year. Under that law the Directors have elected to prepare the consolidated financial statements in
accordance with International Financial Reporting Standards and applicable law.
Under company law the Directors must not approve the consolidated financial statements unless they
are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit
or loss of the Company for that period. In preparing these financial statements, the Directors are
required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements; and
• assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern; and
• use the going concern basis of accounting unless they either intend to liquidate the Company or
to cease operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show
and explain the Company’s transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that the financial statements comply
with Companies (Jersey) Law 1991. They are responsible for such internal control as they determine
is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for taking such steps as are reasonably
open to them to safeguard the assets of the company and to prevent and detect fraud and other
irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial
information included on the company’s website. Legislation in Jersey governing the preparation and
dissemination of consolidated financial statements may differ from legislation in other jurisdictions.

3
 Independent Auditors’ Report
To the Members of United Company RUSAL Plc
Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of United Company RUSAL Plc (the
“Company”) and its subsidiaries (the “Group”), which comprise the consolidated statement
of financial position as at 31 December 2019, the consolidated statements of income,
comprehensive income, changes in equity and cash flows for the year then ended, and
notes, comprising significant accounting policies and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Group as at 31 December 2019,
and its consolidated financial performance and its consolidated cash flows for the year then
ended in accordance with International Financial Reporting Standards (IFRS) as issued by
IASB, and have been properly prepared in accordance with the requirements of the
Companies (Jersey) Law 1991 and the disclosure requirements of the Hong Kong
Companies Ordinance.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and
applicable law. Our responsibilities under those standards are further described in the
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of
our report. We are independent of the Group in accordance with the International Code of
Ethics for Professional Accountants (including International Independence Standards),
and we have fulfilled our other ethical responsibilities in accordance with the
International Code of Ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.

Audited entity: United Company RUSAL Plc Independent auditor: JSC “KPMG”, a company incorporated under the Laws of
the Russian Federation, a member firm of the KPMG network of independent
Registration No. 94939 member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity.

Jersey, British Channels Islands. Registration No. in the Unified State Register of Legal Entities 1027700125628.

Member of the Self-regulatory Organization of Auditors Association

“Sodruzhestvo” (SRO AAS). The Principal Registration Number of the Entry in
the Register of Auditors and Audit Organisations: No. 12006020351.
United Company RUSAL Plc
Independent Auditors’ Report
Page 2

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the consolidated financial statements of the current period. These
matters were addressed in the context of our audit of the consolidated financial statements
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.

Valuation of property, plant and equipment

Please refer to the Note 13 in the consolidated financial statements.

The key audit matter How the matter was addressed in our audit

The Group has significant property, For aluminium, alumina and bauxite CGUs we
plant and equipment balance which evaluated the reasonableness of the expected
is material to the financial cash flow forecasts by comparing them with the
statements as at 31 December latest budgets approved by the Board of Directors,
2019. externally derived data as well as our own
assessments in relation to key inputs such as
Current global market conditions,
production levels, forecasted aluminium sales
including fluctuations in LME
prices, forecasted alumina purchase prices, costs
aluminium prices, market premiums
inflation, foreign currency exchange rates,
and alumina purchase prices, may
discount rates and terminal growth rates. We also
indicate that some property, plant
considered the historic accuracy of management’s
and equipment items may be
forecasts by comparing prior year forecasts to
subject to either impairment loss or
actual results.
reversal of previously recognised
impairment loss. This is in particular We used our own valuation specialists to assist us
related to such cash generating in evaluating the assumptions and methodology
units (CGUs) as aluminium and used by the Group.
alumina plants and bauxite mines.
In particular, we challenged:
As at the reporting date
- aluminium and alumina smelters and bauxite
management performs valuation of
mines costs projections by comparing them with
the recoverable amount of the
historical results and industry peers;
Group’s assets and cash generating
units as their value in use. - the key assumptions for long term revenue
growth rates in the forecasts by comparing them
Due to the inherent uncertainty
with historical results, economic and industry
involved in forecasting and
forecasts; and
discounting future cash flows, which
are the basis of the assessment of - the discount rates used. Specifically, we
recoverability, this is one of the key recalculated the Group’s weighted average cost of
judgmental areas that our audit is capital using market comparable information.
concentrated on.
We also performed sensitivity analysis on the
discounted cash flow forecasts and assessed
whether the Group's disclosures about the
sensitivity of the outcome of the impairment
assessment to changes in key assumptions,
including forecasted aluminium and alumina prices
and discount rates, reflected the risks inherent in
the valuation of property, plant and equipment.
United Company RUSAL Plc
Independent Auditors’ Report
Page 3

Other Information

The Directors are responsible for the other information. The other information comprises the
information included in the Group’s Annual Report but does not include the consolidated
financial statements and our auditors’ report thereon. The Annual Report is expected to be
made available to us after the date of this auditors’ report.
Our opinion on the consolidated financial statements does not cover the other information
and we will not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to
read the other information identified above when it becomes available and, in doing so,
consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.

Responsibilities of the Directors and Those Charged with Governance for the
Consolidated Financial Statements

The Directors are responsible for the preparation and fair presentation of the consolidated
financial statements in accordance with IFRS, the Companies (Jersey) Law 1991 and the
disclosure requirements of the Hong Kong Companies Ordinance, and for such internal
control as the Directors determine is necessary to enable the preparation of consolidated
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for
assessing the Group’s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
the Directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial
reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of
these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
— Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
United Company RUSAL Plc
Independent Auditors’ Report
Page 4

collusion, forgery, intentional omissions, misrepresentations, or the override of internal

control.
— Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal control.
— Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Directors.
— Conclude on the appropriateness of the Directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors’ report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditors’ report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
— Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial
statements represent the underlying transactions and events in a manner that achieves
fair presentation.
— Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance
of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and communicate with them all
relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the consolidated financial statements
of the current period and are therefore the key audit matters. We describe these matters in
our auditors’ report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
United Company RUSAL Plc
Independent Auditors’ Report
Page 5

Report on Other Legal and Regulatory Requirements

Matters on which we are required to report by exception.
We have nothing to report in respect of the following matters where the Companies (Jersey)
Law 1991 requires us to report to you if, in our opinion:
— adequate accounting records have not been kept by the Company; or
— returns adequate for our audit have not been received from branches not visited by us;
or
— the financial statements of the Company are not in agreement with the accounting
records; or
— we have not received all the information and explanations we require for our audit.

The engagement partner on the audit resulting in this independent auditors’ report is:

Yerkozha Akylbek
For and on behalf of JSC “KPMG”
Recognized Auditors
Moscow, Russia
12 March 2020
 United Company RUSAL Plc
Consolidated Statement of Income for the year ended 31 December 2019

Year ended 31 December

2019 2018
Note USD million USD million

Revenue 5 9,711 10,280

Cost of sales 6(a) (8,113) (7,446)
Gross profit 1,598 2,834
Distribution expenses 6(b) (539) (462)
Administrative expenses 6(b) (594) (629)
Impairment of non-current assets 6(b) (291) (157)
Net other operating expenses 6(b) (87) (105)
Results from operating activities 87 1,481
Finance income 7 45 203
Finance expenses 7 (747) (686)
Share of profits of associates and joint ventures 15 1,669 955
Profit before taxation 1,054 1,953
Income tax 8 (94) (255)
Profit for the year 960 1,698
Attributable to Shareholders of the Company 960 1,698
Profit for the year 960 1,698

Earnings per share

Basic and diluted earnings per share (USD) 12 0.063 0.112

Adjusted EBITDA 6(d) 966 2,163

The consolidated statement of income is to be read in conjunction with the notes to, and forming part of, the
consolidated financial statements set out on pages 16 to 89.
 United Company RUSAL Plc
Consolidated Statement of Comprehensive Income for the year ended 31 December 2019

Year ended 31 December

2019 2018
Note USD million USD million
Profit for the year 960 1,698

Other comprehensive income

Items that will never be reclassified subsequently to profit or
loss:
Actuarial (loss)/gain on post retirement benefit plans 20 (9) 6
(9) 6
Items that are or may be reclassified subsequently to profit or
loss:
Change in fair value of cash flow hedges 21 34 -
Share of other comprehensive income of associates 15 - 10
Disposal of subsidiary 4 -
Foreign currency translation differences for equity-accounted
investees 15 448 (810)
Foreign currency translation differences on foreign operations 101 (139)
587 (939)
Other comprehensive income/(loss) for the year, net of tax 578 (933)
Total comprehensive income for the year 1,538 765
Attributable to:
Shareholders of the Company 1,538 765
Total comprehensive income for the year 1,538 765

There was no significant tax effect relating to each component of other comprehensive income.

10

The consolidated statement of comprehensive income is to be read in conjunction with the notes to, and forming
part of, the consolidated financial statements set out on pages 16 to 89.
 United Company RUSAL Plc
Consolidated Statement of Financial Position as at 31 December 2019

31 December 31 December
2019 2018
Note USD million USD million
ASSETS
Non-current assets
Property, plant and equipment 13 4,499 4,421
Intangible assets 14 2,557 2,409
Interests in associates and joint ventures 15 4,240 3,698
Deferred tax assets 8 130 93
Derivative financial assets 21 33 33
Other non-current assets 87 57
Total non-current assets 11,546 10,711

Current assets
Inventories 16 2,460 3,006
Short-term investments 171 105
Trade and other receivables 17(a) 1,351 1,102
Dividends receivable 430 -
Derivative financial assets 21 75 9
Cash and cash equivalents 17(c) 1,781 844
Total current assets 6,268 5,066
Total assets 17,814 15,777

11
The consolidated statement of financial position is to be read in conjunction with the notes to, and forming
part of, the consolidated financial statements set out on pages 16 to 89.
 RUSAL
United Company RUSAL Pic
Consolidated Statement ofFinancial Position as at 31 December 2019

31 December 31 December
2019 2018
Note USD million USD million

EQUITY AND LIABILITIES

Equity 18
Share capital 152 152
Share premium 15,786 15,786
Other reserves 2,892 2,863
Currency translation reserve (9,201) (9,750)
Accumulated losses (2,882) (3,842)
Total equity 6,747 5,209
Non-current liabilities
Loans and borrowings 19 7,699 7,372
Provisions 20 403 366
Deferred tax liabilities 8 465 502
Derivative financial liabilities 21 27 24
Other non-current liabilities 83 50
Total non-current liabilities 8,677 8,314
Current liabilities
Loans and borrowings 19 548 914
Trade and other payables 17(b) 1,770 1,274
Derivative financial liabilities 21 27 7
Provisions 20 45 59
Total current liabilities 2,390 2,254
Total liabilities 11,067 10,568
Total equity and liabilities 17,814 15,777
Net current assets 3,878 2,812
Total assets less current liabilities 15,424 13,523

Approved and authorised for issue by the board of directors on 12 March 2020.

Evgenii V. Nikitin Alexander V. Popov

Chief Executive Officer Chief Financial Officer

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The consolidated statement of financial position is to be read in conjunction with the notes to, and forming
part of, the consolidated financial statements set out on pages 16 to 89.
 United Company RUSAL Plc
Consolidated Statement of Changes in Equity for the year ended 31 December 2019

Currency
Share Share Other translation Accumulated Total
capital premium reserves reserve losses equity
USD USD USD USD USD USD
million million million million million million

Balance at 1 January 2019 152 15,786 2,863 (9,750) (3,842) 5,209

Profit for the year - - - - 960 960
Other comprehensive income for the year - - 29 549 - 578
Total comprehensive income for the year - - 29 549 960 1,538
Balance at 31 December 2019 152 15,786 2,892 (9,201) (2,882) 6,747

Balance at 1 January 2018 152 15,786 2,847 (8,801) (5,540) 4,444

Profit for the year - - - - 1,698 1,698
Other comprehensive income/(loss) for the year - - 16 (949) - (933)
Total comprehensive income for the year - - 16 (949) 1,698 765
Balance at 31 December 2018 152 15,786 2,863 (9,750) (3,842) 5,209

13

The consolidated statement of changes in equity is to be read in conjunction with the notes to, and forming part of, the consolidated financial statements set out on pages 16 to 89.
 United Company RUSAL Plc
Consolidated Statement of Cash Flows for the year ended 31 December 2019

Year ended
31 December
Note 2019 2018
USD million USD million
OPERATING ACTIVITIES
Profit for the year 960 1,698
Adjustments for:
Depreciation 6, 13 562 511
Amortisation 6, 14 4 2
Impairment of non-current assets 6(b) 291 157
(Reversal of)/ impairment of trade and other receivables 6(b) (12) 36
Reversal of impairment of inventories 16 (16) (20)
Reversal of pension provision 20 (7) (2)
Provision for legal claims 20 14 -
Change in fair value of derivative financial instruments 7 21 (171)
Net foreign exchange loss 7 124 80
Loss on disposal of property, plant and equipment 6(b) 22 12
Interest expense 7 602 503
Interest income 7 (45) (32)
Income tax expense 8 94 255
Share of profits of associates and joint ventures 15 (1,669) (955)
Cash from operating activities before changes in working
capital and provisions 945 2,074
Decrease/(increase) in inventories 580 (498)
Increase in trade and other receivables (210) (154)
Increase/(decrease) in trade and other payables 586 (608)
Decrease in provisions (6) (10)
Cash generated from operations before income tax paid 1,895 804
Income taxes paid 8 (243) (124)
Net cash generated from operating activities 1,652 680

14

The consolidated statement of cash flows is to be read in conjunction with the notes to, and forming part of,
the consolidated financial statements set out on pages 16 to 89.
 United Company RUSAL Plc
Consolidated Statement of Cash Flows for the year ended 31 December 2019

Year ended
31 December
Note 2019 2018
USD million USD million
INVESTING ACTIVITIES
Proceeds from disposal of property, plant and equipment 43 22
Interest received 31 29
Acquisition of property, plant and equipment (811) (812)
Dividends from associates and joint ventures 1,141 909
Acquisition of intangible assets (37) (22)
Other investments (85) (153)
Contribution to joint venture (75) -
Acquisition of subsidiaries (35) (53)
Return of prepayment for investment in associate 44 -
Changes in restricted cash 17(c) 30 (26)
Net cash generated from/(used in) investing activities 246 (106)

FINANCING ACTIVITIES
Proceeds from borrowings 1,568 1,996
Repayment of borrowings (1,905) (2,142)
Refinancing fees and other expenses (33) (6)
Interest paid (553) (490)
Settlement of derivative financial instruments (26) 125
Net cash used in financing activities (949) (517)

Net increase in cash and cash equivalents 949 57

Cash and cash equivalents at the beginning of the year 17(c) 801 814
Effect of exchange rate fluctuations on cash and cash
equivalents 18 (70)
Cash and cash equivalents at the end of the year 17(c) 1,768 801

Restricted cash amounted to USD13 million and USD43 million at 31 December 2019 and
31 December 2018, respectively.

15

The consolidated statement of cash flows is to be read in conjunction with the notes to, and forming part of,
the consolidated financial statements set out on pages 16 to 89.
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

1 Background
(a) Organisation
United Company RUSAL Plc (the “Company” or “UC RUSAL”) was established by the controlling
shareholder of RUSAL Limited (“RUSAL”) as a limited liability company under the laws of Jersey on
26 October 2006. On 27 January 2010, the Company successfully completed a dual placing on the Main
Board of The Stock Exchange of Hong Kong Limited (“Stock Exchange”) and the Professional Segment
of NYSE Euronext Paris (“Euronext Paris”) (the “Global Offering”) and changed its legal form from a
limited liability company to a public limited company.
On 23 March 2015, the shares of the Company were admitted to listing on PJSC Moscow Exchange
MICEX-RTS (“Moscow Exchange”) in the First Level quotation list. The trading of shares on Moscow
Exchange commenced on 30 March 2015. There was no issue of new shares.
The Company has filed the application for the delisting of its global depositary receipts (“GDSs”) with
the Euronext Paris. The GDSs were delisted on 7 May 2018.
The Company’s registered office is 3rd floor, 44 Esplanade, St Helier, Jersey, JE4 9WG, Channel
Islands.
The extraordinary general meeting of the Company held on 1 August 2019 approved the application by
the Company to the regulatory authorities in the Russian Federation (the “New Jurisdiction”) for
continuance as a company with the status of an International Company established under the laws of
the New Jurisdiction. The Company is currently in process of completing relevant actions for approved
redomiciliation.
The Company directly or through its wholly owned subsidiaries controls a number of production and
trading entities engaged in the aluminium business and other entities, which together with the Company
are referred to as “the Group”.
The shareholding structure of the Company as at 31 December 2019 and 31 December 2018 was as
follows:
31 December 31 December
2019 2018
EN+GROUP IPJSC (“EN+”, former En+ Group Plc) 50.10% 48.13%
SUAL Partners Limited (“SUAL Partners”) 22.50% 22.50%
Zonoville Investments Limited (“Zonoville”) 4.00% 4.00%
Amokenga Holdings Limited (“Amokenga Holdings”) 6.78% 8.75%
Mr. Oleg V. Deripaska 0.01% 0.01%
Publicly held 16.61% 16.61%
Total 100.00% 100.00%

At 31 December 2019 and 2018 the directors consider the immediate parent of the Group to be EN+,
which was incorporated in Jersey with its registered office at 44 Esplanade, St Helier, Jersey, JE4 9WG,
Channel Islands. On 9 July 2019 the Parent Company changed its domicile to Russian Federation with
a registration as EN+ GROUP International public joint-stock company (EN+GROUP IPJSC). As at
the reporting date the Parent Company’s registered office is Oktyabrskaya st. 8, office 34, Kaliningrad,
Kaliningrad Region, 236006, Russian Federation.

16
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Based on the information provided by EN+, at the reporting date there is no individual that has an
indirect prevailing ownership interest in EN+ GROUP IPJSС exceeding 50%, who could exercise
voting rights in respect of more than 35% of EN+ GROUP IPJSС’s issued share capital or has an
opportunity to exercise control over EN+ GROUP IPJSC. As at 31 December 2019 Mr. Oleg Deripaska
beneficially controls and exercises voting rights in respect of 35% of the voting shares of EN+ GROUP
IPJSС and cannot exceed his direct or indirect shareholding over 44.95% of the shares of the Company.
According to the information disclosed at the Stock Exchange of Hong Kong Limited Zonoville
Investments Limited and SUAL Partners Limited are associates. Amokenga Holdings is ultimately
controlled by Glencore International Plc. Major ultimate beneficiaries of SUAL Partners are Mr. Victor
Vekselberg and Mr. Len Blavatnik.
At the date of these financial statements the shareholding structure of the Company was as follows:
EN+GROUP IPJSC (“EN+”, former En+ Group Plc) 56.88%
SUAL Partners Limited (“SUAL Partners”) 22.50%
Zonoville Investments Limited (“Zonoville”) 4.00%
Mr. Oleg V. Deripaska 0.01%
Publicly held 16.61%
Total 100.00%

Based on publicly available information at the Company’s disposal at the date of these financial
statements, Mr. Oleg Deripaska has indirect ownership interest in the Company exceeding 25%. There
is no individual that has an opportunity to exercise control over the Company.
Related party transactions are disclosed in note 25.

(b) Operations
The Group operates in the aluminium industry primarily in the Russian Federation, Ukraine, Guinea,
Jamaica, Ireland, Italy, Nigeria and Sweden and is principally engaged in the mining and refining of
bauxite and nepheline ore into alumina, the smelting of primary aluminium from alumina and the
fabrication of aluminium and aluminium alloys into semi-fabricated and finished products. The Group
sells its products primarily in Europe, Russia, other countries of the Commonwealth of Independent
States (“CIS”), Asia and North America.

(c) Business environment in emerging economies

The Russian Federation, Ukraine, Jamaica, Nigeria and Guinea have been experiencing political and
economic changes that have affected, and may continue to affect, the activities of enterprises operating
in these environments. Consequently, operations in these countries involve risks that typically do not
exist in other markets, including reconsideration of privatisation terms in certain countries where the
Group operates following changes in governing political powers.
The conflict in Ukraine and related events has increased the perceived risks of doing business in the
Russian Federation. The imposition of economic sanctions on Russian individuals and legal entities by
the European Union, the United States of America, Japan, Canada, Australia and others, as well as
retaliatory sanctions imposed by the Russian government, has resulted in increased economic
uncertainty including more volatile equity markets, a depreciation of the Russian Rouble, a reduction
in both local and foreign direct investment inflows and a significant tightening in the availability of
credit. In particular, some Russian entities may be experiencing difficulties in accessing international
equity and debt markets and may become increasingly dependent on Russian state banks to finance their
operations. The longer term effects of recently implemented sanctions, as well as the threat of additional
future sanctions, are difficult to determine.

17
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The consolidated financial statements reflect management’s assessment of the impact of the Russian,
Ukrainian, Jamaican, Nigerian and Guinean business environments on the operations and the financial
position of the Group. The future business environment may differ from management’s assessment.

(d) OFAC Sanctions

On 6 April 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”)
designated, amongst others, the Company, as a Specially Designated National (“SDN”) (the “OFAC
Sanctions”).
As a result, all property or interests in property of the Company and its subsidiaries located in the United
States or in the possession of U.S. Persons were blocked, must have been frozen, and could not be
transferred, paid, exported, withdrawn, or otherwise dealt in. Several general licenses were issued at the
time of the designation and later on authorizing certain transactions with the Company, its majority
shareholder EN+GROUP IPJSC (“EN+”, former En+ Group Plc), and with their respective debt and
equity.
On 27 January 2019 OFAC announced removal of the Company and En+ from OFAC’s SDN List with
immediate effect. The removal was subject to and conditional upon the satisfaction of a number of
conditions including, but not limited to, corporate governance changes, including, inter alia, overhauling
the composition of the Board to ensure that independent directors constitute the majority of the Board,
stepping down of the Chairman of the Board, and ongoing reporting and certifications by the Company
to OFAC concerning compliance with the conditions for removal.

2 Basis of preparation
(a) Statement of compliance
These consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards (“IFRSs”), which collective term includes all International Accounting Standards
and related interpretations, promulgated by the International Accounting Standards Board (“IASB”),
and the disclosure requirements of the Hong Kong Companies Ordinance.
These consolidated financial statements also comply with the applicable disclosure provisions of the
Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
This is the first set of the Group’s annual financial statements in which IFRS 16 Leases have been
applied. Changes to significant accounting policies are described in Note 3. A number of other new
standards are also effective from 1 January 2019 but they do not have a material effect on the Group’s
financial statements.
Due to the transition method chosen by the Group in applying this standard, comparative information
throughout these financial statements has not been restated to reflect the requirements of the new
standards.
A number of new standards are effective for annual periods beginning after 1 January 2020 and earlier
application is permitted; however, the Group has not early adopted the new or amended standards in
preparing these consolidated financial statements.
The following amended standards and interpretations are not expected to have a significant impact on
the Group’s consolidated financial statements.
– Amendments to References to Conceptual Framework in IFRS Standards.
– Definition of a Business (Amendments to IFRS 3).
– Definition of Material (Amendments to IAS 1 and IAS 8).

18
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

– IFRS 17 Insurance Contracts.

– Interest Rate Benchmarking Reform (Amendments to IFRS 9, IAS 39 and IFRS 7).

3 Significant accounting policies

(a) Changes in accounting policies
The Group has initially adopted IFRS 16 Leases from 1 January 2019.
IFRS 16 introduced a single, on-balance sheet accounting model for lessees. As a result, the Group, as
a lessee, has recognised right-of-use assets representing its rights to use the underlying assets and lease
liabilities representing its obligation to make lease payments. Lessor accounting remains similar to
previous accounting policies.
The Group has applied IFRS 16 using the modified retrospective approach, under which the comparative
information presented for 2018 has not been restated – i. e. it is presented, as previously reported, under
IAS 17 and related interpretations. The details of the changes in accounting policies are disclosed below.

Definition of a lease
Previously, the Group determined at contract inception whether the arrangement was or contained a
lease under IFRIC 4 Determining Whether an Arrangement contains a Lease. The Group now assesses
whether a contract is or contains a lease based on the new definition of a lease. Under IFRS 16 a contract
is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period
of time in exchange for consideration.
On transition to IFRS 16 the Group elected to apply the practical expedient to grandfather the assessment
of which transactions are leases. It applied IFRS 16 only to contracts that were previously identified as
leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 have not been reassessed.
Therefore, the definition of a lease under IFRS 16 has been applied only to contracts entered into or
modified on or after 1 January 2019.
At inception or on reassessment of a contract that contains a lease component, the Group allocates the
consideration in the contract to each lease and non-lease component on the basis of their relative stand-
alone prices. However, for the leases of properties in which Group acts as a lessee, the Group has elected
not to separate non-lease components and will instead account for the lease and non-lease components
as a single lease component.

As a lessee
The Group leases many assets, including land, properties and production equipment.
As a lessee, the Group previously classified leases as operating or finance leases based on its assessment
of whether the lease transferred substantially all of the risks and rewards of ownership. Under IFRS 16
the Group recognises right-of-use assets and lease liabilities for most leases – i. e. these leases are on-
balance sheet.
However, the Group has elected not to recognise right-of-use assets and lease liabilities for some leases
of low-value assets and short-term leases. The Group recognises the lease payments associated with
these leases as an expense on a straight-line basis over the lease term.
The group presents right-of-use assets as part of property plant and equipment, the same line item as it
presents underlying assets of the same nature that it owns. The carrying amounts of right-of-use assets
are presented below.

19
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Property, plant and equipment

Land and Machinery and
USD Million buildings equipment Total
Balance at 1 January 2019 19 19 38
Balance at 31 December 2019 17 13 30
The Group presents lease liabilities as part of other payables and other non-current liabilities in the
statement of financial position depending on the period to which future lease payments relate.

Significant accounting policies

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The
right-of-use asset is initially measured at cost and subsequently measured at cost less any accumulated
depreciation and impairment losses and adjusted for certain remeasurements of the lease liability as
required by IFRS 16.
The cost comprises the initial amount of the lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs incurred and an estimate of costs to
dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term, unless the lease transfers ownership of the underlying
asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group
will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful
life of the underlying asset, which is determined on the same basis as those of property and equipment.
In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for
certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental
borrowing rate as the discount rate.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by
lease payment made. It is remeasured when there is a change in future lease payments arising from a
change in an index or rate, a change in the estimate of the amount expected to be payable under a
residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or
extension option is reasonably certain to be exercised or a termination option is reasonably certain not
to be exercised.
The Group has applied judgement to determine the lease term for some lease contracts in which it is a
lessee that include renewal options, the assessment of whether the Group is reasonably certain to
exercise such options impacts the lease term, which significantly affects the amount of lease liabilities
and right-of-use assets recognised.
In determining the enforceable period (i.e. the maximum lease term), the Group considers whether both
it and the lessor has a right to terminate the lease without permission from the other party and, if so,
whether that termination would result in more than an insignificant penalty. If a more than insignificant
penalty exists, then the enforceable period extends until the point at which a no more than an
insignificant penalty exists.
In accordance with IFRS 16 variable payments which do not depend on index or rate, e. g. which do not
reflect changes in market rental rates, should not be included in the measurement of lease liability. In
respect of municipal or federal land leases where lease payments are based on cadastral value of the

20
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

land plot and do not change until the next revision of that value or the applicable rates (or both) by the
authorities, the Group has determined that, under the current revision mechanism, the land lease
payments cannot be considered as either variable that depend on index or rate or in-substance fixed, and
therefore these payments are not included in the measurement of the lease liability.
Transition
Previously, the Group classified property and equipment leases as operating leases under IAS 17. These
mainly include land plots, office spaces and items of machinery and equipment. The leases run for
different periods of time, with longer periods for land plots. Some leases include an option to renew the
lease for an additional period after the end of the non-cancellable period. Some leases provide for
additional rent payments that are based on changes in various indices.
At transition, for leases classified as operating leases under IAS 17, lease liabilities were measured at
the present value of the remaining lease payments, discounted at the Group’s incremental borrowing
rate as at 1 January 2019. Right-of-use assets are measured at an amount equal to the lease liability,
adjusted by the amount of any prepaid or accrued lease payments.
The Group used the following practical expedients when applying IFRS 16 to lease previously classified
as operating leases under IAS 17:
- Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12
months of lease term.
- Excluded initial direct costs from measuring the right-of-use asset at the date of initial application.
- Used hindsight when determining the lease term if the contract contains options to extend or terminate
the lease.
For the leases that were classified as finance leases under IAS 17, the carrying amount of the right-of-
use asset and the lease liability at 1 January 2019 were determined at the carrying amount of the lease
asset and lease liability under IAS 17 immediately before that date.

As a lessor
The accounting policies applicable to the Group as a lessor are not different from those under IAS 17.
However, when the Group is an intermediate lessor the sub-leases are classified with reference to the
right-of the use asset arising from the head lease, not with reference to the underlying asset.

Impacts on financial statements

Impacts on transition
On transition to IFRS 16, the Group recognised additional right-of-use assets and additional lease
liabilities in equal amounts. The impact on transition is summarised below.
1 January
2019
USD million

Right-of-use assets presented in property, plant and equipment

less impairment losses 38
Lease liabilities 38

21
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

When measuring lease liabilities for leases that were classified as operating leases, the Group discounted
lease payments using its incremental borrowing rate at 1 January 2019. The weighted average rate
applied is 11%.

1 January
2019
USD million

Discounted using incremental borrowing rate at 1 January

2019 59
- Recognition exemption for leases with less than 12
month of lease term at transition (12)
- Termination options reasonably certain to be
exercised (9)
Lease liabilities recognised at 1 January 2019 38

Impacts for the period

As a result of initially applying IFRS 16, in relation to the leases that were previously classified as
operating leases, the Group recognised USD30 million of right-of-use assets and USD39 million of
lease liabilities as at 31 December 2019. USD25 million of lease liabilities (including USD4 million of
related parties – companies related through parent company) are long-term and included in other non-
current liabilities, USD14 million of lease liabilities (including USD4 million of related parties –
companies related through parent company) are short-term and included in other payables.
Also in relation to these leases under IFRS 16, the Group has recognised USD10 million of depreciation
charges and USD5 million of interest costs for the year ended 31 December 2019. USD8 million of
right-of-use assets have been impaired during the year ended 31 December 2019. The Group’s total
cash outflow for leases was in the amount of USD13 million.
The expense relating to short-term leases in the amount of USD23 million is included in cost of sales
or administrative expenses depending on type of underlying asset.
Future cash outflows to which the Group is potentially exposed that are not recognised in right-to-use
assets and are not reflected in the measurement of lease liabilities and which arise from variable lease
payments not linked to index or rate are in the amount of USD45 million.

(b) Basis of measurement

The consolidated financial statements have been prepared in accordance with the historical cost basis
except as set out in the significant accounting policies in the related notes below.

(c) Functional and presentation currency

The Company’s functional currency is the United States Dollar (“USD”) because it reflects the
economic substance of the underlying events and circumstances of the Company. The functional
currencies of the Group’s significant subsidiaries are the currencies of the primary economic
environment and key business processes of these subsidiaries and include USD, Russian Roubles
(“RUB”), Ukrainian Hryvna and Euros (“EUR”). The consolidated financial statements are presented
in USD, rounded to the nearest million, except as otherwise stated herein.

22
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(d) Use of judgements, estimates and assumptions

The preparation of consolidated financial statements in conformity with IFRSs requires management to
make judgements, estimates and assumptions that affect the application of accounting policies and
reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the
consolidated financial statements, and the reported revenue and costs during the relevant period.
Management bases its judgements and estimates on historical experience and various other factors that
are believed to be appropriate and reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different assumptions
and conditions.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period, or in the period of the revision and future periods if the revision affects both current and future
periods.
Judgements made by management in the application of IFRSs that have a significant effect on the
consolidated financial statements and estimates with a significant risk of material adjustment in the next
year relate to:
• measurement of recoverable amount of property, plant and equipment (note 13) and goodwill (note
14);
• measurement of net realizable value of inventories (note 16);
• measurement of recoverable amount of investments in associates and joint ventures (note 15);
• estimates in respect of legal proceedings, restoration and exploration, taxation and pension reserve
(note 20).

(e) Basis of consolidation

(i) Subsidiaries
Subsidiaries are entities controlled by the group. The Group controls an entity when it is exposed, or
has rights, to variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. When assessing whether the Group has power, only
substantive rights (held by the Group and other parties) are considered.
An investment in a subsidiary is consolidated into the consolidated financial statements from the date
that control commences until the date that control ceases. Intra-group balances, transactions and cash
flows and any unrealised profits arising from intra-group transactions are eliminated in full in preparing
the consolidated financial statements. Unrealised losses resulting from intra-group transactions are
eliminated in the same way as unrealised gains but only to the extent that there is no evidence of
impairment.
When the group loses control of a subsidiary, it is accounted for as a disposal of the entire interest in
that subsidiary, with a resulting gain or loss being recognised in profit or loss. Any interest retained in
that former subsidiary at the date when control is lost is recognised at fair value and this amount is
regarded as the fair value on initial recognition of a financial asset or, when appropriate, the cost on
initial recognition of an investment in an associate or joint venture.

(ii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising
from transactions with equity accounted investees are eliminated against the investment to the extent of

23
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised
gains, but only to the extent that there is no evidence of impairment.

(f) Foreign currencies

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group
entities at the exchange rates ruling at the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the reporting date are retranslated to the functional currency at the
exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between
the amortised cost in the functional currency at the beginning of the period, adjusted for effective interest
and payments during the period, and the amortised cost in foreign currency translated at the exchange
rate at the end of the reporting period. Non-monetary items in a foreign currency are measured based
on historical cost and translated using the exchange rate at the date of transaction. Foreign currency
differences arising on retranslation are recognised in the statement of income, except for differences
arising on the retranslation of qualifying cash flow hedges to the extent the hedge is effective, which is
recognised in the other comprehensive income.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated from their functional currencies to USD at the exchange rates ruling at the
reporting date. The income and expenses of foreign operations are translated to USD at exchange rates
approximating exchange rates at the dates of the transactions.
Foreign currency differences arising on translation are recognised in the statement of comprehensive
income and presented in the currency translation reserve in equity. For the purposes of foreign currency
translation, the net investment in a foreign operation includes foreign currency intra-group balances for
which settlement is neither planned nor likely in the foreseeable future and foreign currency differences
arising from such a monetary item are recognised in the statement of comprehensive income.
When a foreign operation is disposed of, such that control, significant influence or joint control is lost,
the cumulative amount of the currency translation reserve is transferred to the statement of income as
part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary
that includes a foreign operation while retaining control, the relevant proportion of the cumulative
amount is reattributed to non-controlling interests. When the Group disposes of only part of its
investment in an associate or joint venture that includes a foreign operation while retaining significant
influence or joint control, the relevant proportion of the cumulative amount is reclassified to the
statement of income.

4 Segment reporting
(a) Reportable segments
An operating segment is a component of the Group that engages in business activities from which it
may earn revenue and incur expenses, including revenue and expenses that relate to transactions with
any of the Group’s other components. All operating segments’ operating results are reviewed regularly
by the Group’s CEO to make decisions about resources to be allocated to the segment and assess its
performance and for which discrete consolidated financial information or statements are available.
Individually material operating segments are not aggregated for financial reporting purposes unless the
segments have similar economic characteristics and are similar in respect of the nature of products and
services, the nature of production processes, the type or class of customers, the methods used to

24
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

distribute the products or provide the services and the nature of the regulatory environment. Operating
segments which are not individually material may be aggregated if they share a majority of these criteria.
The Group has four reportable segments, as described below, which are the Group’s strategic business
units. These business units are managed separately and the results of their operations are reviewed by
the CEO on a regular basis.
Aluminium. The Aluminium segment is involved in the production and sale of primary aluminium and
related products.
Alumina. The Alumina segment is involved in the mining and refining of bauxite into alumina and the
sale of alumina.
Energy. The Energy segment includes the Group companies and projects engaged in the mining and
sale of coal and the generation and transmission of electricity produced from various sources. Where
the generating facility is solely a part of an alumina or aluminium production facility it is included in
the respective reportable segment.
Mining and Metals. The Mining and Metals segment includes the equity investment in PJSC MMC
Norilsk Nickel (“Norilsk Nickel”).
Other operations include manufacturing of semi-finished products from primary aluminium for the
transportation, packaging, building and construction, consumer goods and technology industries; and
the activities of the Group’s administrative centres. None of these segments meet any of the quantitative
thresholds for determining reportable segments in 2019 and 2018.
The Aluminium and Alumina segments are vertically integrated whereby the Alumina segment supplies
alumina to the Aluminium segment for further refining and smelting with limited sales of alumina
outside the Group. Integration between the Aluminium, Alumina and Energy segments also includes
shared servicing and distribution.

(b) Segment results, assets and liabilities

For the purposes of assessing segment performance and allocating resources between segments, the
Group’s senior executive management monitor the results, assets and liabilities attributable to each
reportable segment on the following bases:
Segment assets include all tangible, intangible assets and current assets with the exception of income
tax assets and corporate assets. Segment liabilities include trade and other payables attributable to the
production and sales activities of the individual segments. Loans and borrowings are not allocated to
individual segments as they are centrally managed by the head office.
Revenue and expenses are allocated to the reportable segments with reference to sales generated by
those segments and the expenses incurred by those segments or which otherwise arise from the
depreciation or amortisation of assets attributable to those segments excluding impairment.
The measure used for reporting segment results is the statement of income before income tax adjusted
for items not specifically attributed to individual segments, such as finance income, costs of loans and
borrowings and other head office or corporate administration costs. The segment profit or loss is
included in the internal management reports that are reviewed by the Group’s CEO. Segment profit or
loss is used to measure performance as management believes that such information is the most relevant
in evaluating the results of certain segments relative to other entities that operate within these industries.
In addition to receiving segment information concerning segment results, management is provided with
segment information concerning revenue (including inter-segment revenue), the carrying value of
investments and share of profits/(losses) of associates and joint ventures, depreciation, amortisation,
impairment and additions of non-current segment assets used by the segments in their operations. Inter-
segment pricing is determined on a consistent basis using market benchmarks.

25
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and
equipment and intangible assets other than goodwill.

(i) Reportable segments

Year ended 31 December 2019
Mining and Total segment
Aluminium Alumina Energy Metals result
USD million USD million USD million USD million USD million

Revenue from external

customers 8,082 984 - - 9,066
Inter-segment revenue 232 2,881 - - 3,113
Total segment revenue 8,314 3,865 - - 12,179

Segment profit 275 456 - - 731

Impairment of non-current
assets (153) (42) - - (195)
Share of profits of associates
and joint ventures - - 82 1,587 1,669
Depreciation/amortisation (378) (158) - - (536)
Non-cash income other than
depreciation 9 10 - - 19
Additions to non-current
segment assets during the year 554 267 - - 821
Non-cash disposals to non-
current segment assets related
to site restoration (3) (8) - - (11)

Mining and Total segment

Aluminium Alumina Energy Metals result
USD million USD million USD million USD million USD million

Segment assets 6,912 2,656 - - 9,568

Interests in associates and joint
ventures - - 699 3,462 4,161
Total segment assets 13,729

Segment liabilities (966) (614) (11) - (1,591)

Total segment liabilities (1,591)

26
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Year ended 31 December 2018

Mining and Total segment
Aluminium Alumina Energy Metals result
USD million USD million USD million USD million USD million

Revenue from external

customers 8,334 1,325 - - 9,659
Inter-segment revenue 228 3,381 - - 3,609
Total segment revenue 8,562 4,706 - - 13,268

Segment profit 791 1,221 - - 2,012

Reversal of/(impairment) of
non-current assets 7 (87) - - (80)
Share of profits of associates
and joint ventures - - 72 885 957
Depreciation/amortisation (346) (138) - - (484)
Non-cash income/(expense)
other than depreciation 13 (1) - - 12
Additions to non-current
segment assets during the year 271 332 - - 603
Non-cash disposals to non-
current segment assets related
to site restoration - (5) - - (5)

Segment assets 6,864 2,656 - - 9,520

Interests in associates and joint
ventures - - 594 3,101 3,695
Total segment assets 13,215

Segment liabilities (634) (568) (10) - (1,212)

Total segment liabilities (1,212)

(ii) Reconciliation of reportable segment revenue, profit or loss, assets and liabilities
Year ended 31 December
2019 2018
USD million USD million
Revenue
Reportable segment revenue 12,179 13,268
Elimination of inter-segment revenue (3,113) (3,609)
Unallocated revenue 645 621
Consolidated revenue 9,711 10,280

27
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Year ended 31 December

2019 2018
USD million USD million
Profit
Reportable segment profit 731 2,012
Impairment of non-current assets (291) (157)
Share of profits of associates and joint ventures 1,669 955
Finance income 45 203
Finance expenses (747) (686)
Unallocated expenses (353) (374)
Consolidated profit before taxation 1,054 1,953

31 December 31 December
2019 2018
USD million USD million
Assets
Reportable segment assets 13,729 13,215
Unallocated assets 4,085 2,562
Consolidated total assets 17,814 15,777

31 December 31 December
2019 2018
USD million USD million
Liabilities
Reportable segment liabilities (1,591) (1,212)
Unallocated liabilities (9,476) (9,356)
Consolidated total liabilities (11,067) (10,568)

(iii) Geographic information

The Group’s operating segments are managed on a worldwide basis, but operate in four principal
geographical areas: the CIS, Europe, Africa and the Americas. In the CIS, production facilities operate
in Russia and Ukraine. In Europe, production facilities are located in Italy, Ireland and Sweden. African
production facilities are represented by bauxite mines and an alumina refinery in Guinea and an
aluminium plant in Nigeria. In the Americas the Group operates one production facility in Jamaica, one
in Guyana and a trading subsidiary in the United States of America.

28
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The following table sets out information about the geographical location of (i) the Group’s revenue from
external customers and (ii) the Group’s property, plant and equipment, intangible assets and interests in
associates and joint ventures (“specified non-current assets”). The geographical location of customers
is based on the location at which the services were provided or the goods were delivered. The
geographical location of the specified non-current assets is based on the physical location of the asset.
Unallocated specified non-current assets comprise mainly goodwill and interests in associates and joint
ventures.

Revenue from
external customers
Year ended 31 December
2019 2018
USD million USD million
Russia 2,290 2,485
Turkey 1,051 750
Netherlands 985 1,121
USA 649 887
South Korea 577 282
Italy 570 359
Poland 456 333
Japan 440 800
Germany 220 227
France 209 311
Norway 203 372
Greece 188 262
Sweden 158 333
China 118 53
Other countries 1,597 1,705
9,711 10,280

Specified non-current assets

31 December 31 December
2019 2018
USD million USD million
Russia 7,357 7,031
Ireland 655 376
Guinea 230 152
Ukraine 158 158
Sweden - 126
Unallocated 3,146 2,868
11,546 10,711

29
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

5 Revenue
Accounting policies
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue
is recognised.
The details of significant accounting policies in relation to the Group’s various goods and services are
set out below:
Sales of goods: comprise sale of primary aluminium, alloys, alumina, bauxite and other products.
Customers obtain control of the goods supplied when the goods are delivered to the point when risks
are transferred based on Incoterms delivery terms stated in the contract. Invoices are generated and
revenue is recognised at that point in time. Invoices are usually payable within 60 days or in advance.
Under certain Group sale contracts the final price for the goods shipped is determined a few months
later than the delivery took place. Under current requirements the Group determines the amount of
revenue at the moment of recognition based on estimated selling price at the date of the invoice issued.
At price finalisation the difference between estimated price and actual one is recognised as other
revenue.
Rendering of transportation services: as part of sales of goods the Group also performs transportation
to the customer under contract terms. In certain cases the control for goods delivered is transferred to
customer at earlier point than the transportation is completed. In these cases rendering of transportation
services from when the control of goods has transferred is considered as a separate performance
obligation.
Rendering of electricity supply services: The Group is involved in sales of energy to 3rd and related
parties. Invoices are issued once a month at the end of month and paid within 30 days. Revenue is
recognised over time during the month of energy supply.

30
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Disclosures
Year ended
31 December
2019 2018
USD million USD million

Revenue from contracts with customers 9,711 10,280

Sales of products 9,529 10,066

Sales of primary aluminium and alloys 8,019 8,293

Sales of alumina and bauxite 668 984

Sales of foil and other aluminium products 410 346

Sales of other products 432 443

Provision of services 182 214

Supply of energy 118 143

Provision of transportation services 10 8

Provision of other services 54 63

Total revenue by types of customers 9,711 10,280

Third parties 6,530 6,150

Related parties – companies capable of exerting significant
influence 2,727 3,671

Related parties – companies related through parent company 140 166

Related parties – associates and joint ventures 314 293

Total revenue by primary regions 9,711 10,280

Europe 4,805 4,804

CIS 2,669 2,944

America 799 1,076

Asia 1,381 1,400

Other 57 56

The Group’s customer base is diversified and includes only one major customer - Glencore International
AG (a member of Glencore International Plc which is a shareholder of the Company with a 6.78% share
– refer to note 1(a)) - with whom transactions have exceeded 10% of the Group’s revenue. In 2019
revenues from sales of primary aluminium and alloys to this customer amounted to USD2,325 million
(2018: USD3,115 million).
Revenue from sale of primary aluminium and alloys relates to aluminium segment (Note 4). Revenue
from sales of alumina and bauxite relates to alumina segment which also includes sale of other products.
Revenue from sale of foil and other aluminium products and other products and services relates mostly
to the revenue of non-reportable segments.

31
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

6 Cost of sales and operating expenses

(a) Cost of sales
Year ended 31 December
2019 2018
USD million USD million
Cost of alumina, bauxite and other materials (3,388) (3,720)
Third parties (3,300) (3,588)
Related parties – companies capable of exerting significant influence (54) (78)
Related parties – companies related through parent company (34) (54)
Purchases of primary aluminium (516) (467)
Third parties (49) (145)
Related parties – companies related through parent company (13) (15)
Related parties – associates and joint ventures (454) (307)
Energy costs (2,054) (2,147)
Third parties (1,235) (1,267)
Related parties – companies capable of exerting significant influence (5) (4)
Related parties – companies related through parent company (782) (839)
Related parties – associates and joint ventures (32) (37)
Personnel costs (499) (582)
Depreciation and amortisation (548) (498)
Change in finished goods (453) 347
Other costs (655) (379)
Third parties (502) (196)
Related parties – companies related through parent company (30) (35)
Related parties – associates and joint ventures (123) (148)
(8,113) (7,446)

32
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(b) Distribution, administrative and other operating expenses, and impairment of non-current assets
Year ended 31 December
2019 2018
USD million USD million
Transportation expenses (438) (373)
Personnel costs (325) (330)
Impairment of non-current assets (291) (157)
Consulting and legal expenses (79) (79)
Packaging materials (43) (36)
Security (31) (24)
Charitable donations (31) (22)
Taxes other than on income (30) (31)
Repair and other services (24) (19)
Loss on disposal of property, plant and equipment (22) (12)
Depreciation and amortisation (18) (15)
Short-term lease and variable lease payments (17) (24)
Provision for legal claims (14) -
Auditors’ remuneration (6) (6)
Reversal/(impairment) of trade and other receivables 12 (36)
Other expenses (154) (189)
(1,511) (1,353)

(c) Personnel costs

Accounting policies
Personnel costs comprise salaries, annual bonuses, annual leave and cost of non-monetary benefits.
Salaries, annual bonuses, paid annual leave and cost of non-monetary benefits are accrued in the year
in which the associated services are rendered by employees. Where payment or settlement is deferred
and the effect would be material, these amounts are stated at their present values.
The employees of the Group are also members of retirement schemes operated by local authorities. The
Group is required to contribute a certain percentage of their payroll to these schemes to fund the benefits.
The Group’s total contribution to those schemes charged to the statement of income during the years
presented is shown below.
The Group’s net obligation in respect of defined benefit pension and other post-retirement plans is
calculated separately for each plan by estimating the amount of future benefit that employees have
earned in return for their service in the current and prior periods; that benefit is discounted to determine
its present value and the fair value of any plan assets are deducted. The discount rate is the yield at the
reporting date on government bonds that have maturity dates approximating the terms of the Group’s
obligations. The calculation is performed using the projected unit credit method. When the calculation
results in a benefit to the Group, the recognised asset is limited to the net total of any unrecognised past
service costs and the present value of any future refunds from the plan or reductions in future
contributions to the plan.

33
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Where there is a change in actuarial assumptions, the resulting actuarial gains and losses are recognised
directly in other comprehensive income.
When the benefits of a plan are improved, the portion of the increased benefit relating to past service
by employees is recognised in the statement of income on a straight-line basis over the average period
until the benefits become vested. To the extent that the benefits vest immediately, the expense is
recognised immediately.
The Group recognises gains and losses on the curtailment or settlement of a defined benefit plan when
the curtailment or settlement occurs.
The gain or loss on curtailment comprises any resulting change in the fair value of plan assets, any
change in the present value of the defined benefit obligation, any related actuarial gains and losses.
Disclosures
Year ended 31 December
2019 2018
USD million USD million
Contributions to defined contribution retirement plans 176 173
Contributions to defined benefit retirement plans 3 -
Total retirement costs 179 173
Wages and salaries 645 739
824 912

(d) EBITDA and operating effectiveness measures

Adjusted EBITDA is the key non-IFRS financial measure used by the Group as reference for assessing
operating effectiveness.
Year ended 31 December
2019 2018
USD million USD million
Results from operating activities 87 1,481
Add:
Amortisation and depreciation 566 513
Impairment of non-current assets 291 157
Loss on disposal of property, plant and equipment 22 12
Adjusted EBITDA 966 2,163

34
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

7 Finance income and expenses

Accounting policies
Finance income comprises interest income on funds invested, changes in the fair value of financial
assets at fair value through profit or loss and foreign currency gains. Interest income is recognised as it
accrues, using the effective interest method.
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions,
foreign currency losses and changes in the fair value of financial assets at fair value through profit or
loss. All borrowing costs are recognised in the statement of income using the effective interest method,
except for borrowing costs related to the acquisition, construction and production of qualifying assets
which are recognised as part of the cost of such assets.
Foreign currency gains and losses are reported on a net basis. Foreign exchange loss on loans and
borrowing for the year ended 31 December 2019 equaled to USD 213 million.

Disclosures
Year ended 31 December
2019 2018
USD million USD million
Finance income
Interest income on third party loans and deposits 44 31
Interest income on loans to related parties – companies related
through parent company 1 1
Change in fair value of derivative financial instruments (refer to
note 21) - 171
45 203
Finance expenses
Interest expense on bank loans and bonds wholly repayable within
5 years and other bank charges (576) (239)
Interest expense on bank loans and bonds wholly repayable after
5 years - (259)
Other finance costs (13) (2)
Change in fair value of derivative financial instruments (refer to
note 21) (21) -
Net foreign exchange loss (124) (183)
Interest expense on provisions (8) (3)
Leases interest costs (5) -
(747) (686)

8 Income tax
Accounting policies
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the
statement of income and other comprehensive income except to the extent that it relates to items
recognised directly in equity, in which case it is recognised in equity.

35
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax
is not recognised for the following temporary differences: the initial recognition of goodwill, the initial
recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent
that they probably will not reverse in the foreseeable future. New information may become available
that causes the Company to change its judgement regarding the adequacy of existing tax liability. Such
changes to tax liabilities will impact tax expenses in the period that such a determination is made.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or substantively enacted by the reporting
date. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same
taxation authority and the Group has both the right and the intention to settle its current tax assets and
liabilities on a net or simultaneous basis.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be
available against which temporary differences can be utilised. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as
the liability to pay the related dividends is recognised.
Disclosures

(a) Income tax expense

Year ended
31 December
2019 2018
USD million USD million
Current tax
Current tax for the year 162 305
Deferred tax
Origination and reversal of temporary differences (68) (50)
Actual tax expense 94 255

The Company is a tax resident of Cyprus with an applicable corporate tax rate of 12.5%. Subsidiaries
pay income taxes in accordance with the legislative requirements of their respective tax jurisdictions.
For subsidiaries domiciled in Russia, the applicable tax rate is 20%; in Ukraine of 18%; Guinea of 0%;
China of 25%; Kazakhstan of 20%; Australia of 30%; Jamaica of 25%; Ireland of 12.5%; Sweden of
21.4% and Italy of 27.9%. For the Group’s subsidiaries domiciled in Switzerland the applicable tax rate
for the period is the corporate income tax rate in the Canton of Zug, Switzerland, which may vary
depending on the subsidiary’s tax status. The rate consists of a federal income tax and
cantonal/communal income and capital taxes. The latter includes a base rate and a multiplier, which
may change from year to year. Applicable income tax rates are 9.55% and 14.35% for different
subsidiaries. For the Group’s significant trading companies, the applicable tax rate is 0%. The applicable
tax rates for the period ended 31 December 2018 were the same as for the period ended 31 December
2019 except for tax rates for subsidiaries domiciled in Sweden which amounted to 22% and tax rates
for subsidiaries domiciled in Switzerland which amounted to 9.6% and 14.51% accordingly.

36
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Year ended 31 December

2019 2018
USD USD
million % million %
Profit before taxation 1,054 100 1,953 100
Income tax at tax rate applicable to the tax
residence of the Company 132 13 244 13
Effect of different income tax rates 25 2 (50) (3)
Effect of changes in investment in Norilsk
Nickel (154) (15) (63) (3)
Change in unrecognised deferred tax assets 31 3 11 1
Effect of reversal/accrual of impairment 79 7 (35) (2)
Other non-deductible taxable items (21) (1) 31 2
Income tax related to prior periods, including
provision 2 - 117 6
Actual tax expense 94 9 255 14

(b) Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following temporary differences:
Assets Liabilities Net
31 31 31 31 31 31
December December December December December December
USD million 2019 2018 2019 2018 2019 2018
Property, plant and
equipment 77 55 (580) (574) (503) (519)
Inventories 97 54 (13) (14) 84 40
Trade and other
receivables 26 17 (19) (9) 7 8
Derivative financial
assets/(liabilities) 7 6 (8) (8) (1) (2)
Tax loss carry-
forwards 66 41 - - 66 41
Others 328 224 (316) (201) 12 23
Deferred tax
assets/(liabilities) 601 397 (936) (806) (335) (409)
Set-off of deferred
taxation (471) (304) 471 304 - -
Net deferred tax
assets/(liabilities) 130 93 (465) (502) (335) (409)

37
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(c) Movement in deferred tax assets/(liabilities) during the year

Foreign
Recognised in currency 31 December
USD million 1 January 2018 profit or loss translation 2018
Property, plant and equipment (547) 28 - (519)
Inventories 32 8 - 40
Trade and other receivables 6 2 - 8
Derivative financial assets/(liabilities) 9 (11) - (2)
Tax loss carry-forwards 19 22 - 41
Others 22 1 - 23
Total (459) 50 - (409)

Foreign
Recognised in currency 31 December
USD million 1 January 2019 profit or loss translation 2019
Property, plant and equipment (519) 10 6 (503)
Inventories 40 44 - 84
Trade and other receivables 8 (1) - 7
Derivative financial assets/(liabilities) (2) 1 - (1)
Tax loss carry-forwards 41 25 - 66
Others 23 (11) - 12
Total (409) 68 6 (335)

Recognised tax losses expire in the following years:

31 December 31 December
2019 2018
Year of expiry USD million USD million
Without expiry 66 41
66 41

(d) Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:
31 December 31 December
2019 2018
USD million USD million
Deductible temporary differences 834 789
Tax loss carry-forwards 212 232
1,046 1,021

38
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Deferred tax assets have not been recognised in respect of these items because it is not probable that
future taxable profits will be available against which the Group can utilise the benefits therefrom. Tax
losses expire in the following years:
31 December 31 December
2019 2018
Year of expiry USD million USD million
Without expiry 210 231
From 2 to 5 years 2 1
212 232

(e) Unrecognised deferred tax liabilities

Retained earnings of the Group’s subsidiaries where dividend distributions are subject to taxation
included USD1,361 million and USD 1,778 million as at 31 December 2019 and 31 December 2018,
respectively, for which deferred taxation has not been provided because remittance of the earnings has
been indefinitely postponed through reinvestment and, as a result, such amounts are considered to be
permanently invested. It was not practicable to determine the amount of temporary differences relating
to investments in subsidiaries where the Group is able to control the timing of reversal of the difference.
Reversal is not expected in the foreseeable future. For other subsidiaries in the Group, including the
significant trading companies, the distribution of dividends does not give rise to taxes.

(f) Current taxation in the consolidated statement of financial position represents:

31 December 31 December
2019 2018
USD million USD million
Net income tax (payable)/receivable at the beginning of the year (105) 16
Income tax for the year (162) (305)
Income tax paid 220 124
Dividend withholding tax 57 47
Income tax provision (note 20) - 20
Translation difference (5) (7)
5 (105)

Represented by:
Income tax payable (note 17) (16) (127)
Prepaid income tax (note 17) 21 22
Net income tax receivable/(payable) 5 (105)

39
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

9 Directors’ remuneration
Directors’ remuneration disclosed pursuant to section 383(1) of the Hong Kong Companies Ordinance
and Part 2 of the Companies (Disclosure of information about Benefits of Directors) Regulations are as
follows:
Year ended 31 December 2019
Salaries, allowances, Discretionary
Directors’ fees benefits in kind bonuses Total
USD USD USD USD
thousand thousand thousand thousand
Executive Directors
Evgenii Nikitin (a) - 1,221 1,104 2,325
Evgenii Vavilov (a) - 51 7 58
Evgeny Kuryanov (b) - 353 13 366
Sergei Popov (c) - 7 - 7

Non-executive Directors
Marco Musetti 217 - - 217
Vyacheslav Solomin (d) 196 - - 196
Vladimir Kolmogorov(e) 104 - - 104
Timur Valiev (f) 70 - - 70

Independent Non-executive Directors

Bernard Zonneveld (Chairman) 675 - - 675
Christopher Burnham (g) 243 - - 243
Nicholas Jordan (g) 181 - - 181
Elsie Leung Oi-Sie 202 - - 202
Kevin Parker (g) 185 185
Maksim Poletaev (g) 180 - - 180
Randolph Reynolds (g) 267 - - 267
Dmitry Vasiliev 224 - - 224
Philippe Bernard Henri Mailfait (h) 12 - - 12
Jean-Pierre Thomas (h) 36 - - 36
2,792 1,632 1,124 5,548

40
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Year ended 31 December 2018

Salaries, allowances, Discretionary
Directors’ fees benefits in kind bonuses Total
USD USD USD USD
thousand thousand thousand thousand
Executive Directors
Evgenii Nikitin (a) - 591 616 1,207
Sergei Popov (c) - 54 86 140
Evgenii Vavilov (a) - 20 7 27
Oleg Deripaska (i) - 400 4,280 4,680
Vladislav Soloviev (j) - 1,631 3,939 5,570
Siegfried Wolf (j) - 911 - 911

Non-executive Directors
Marco Musetti 186 - - 186
Vyacheslav Solomin (d) 82 - - 82
Timur Valiev (f) 88 - - 88
Maksim Goldman (k) 58 - - 58
Dmitry Afanasiev (j) 89 - - 89
Ivan Glasenberg (k) 58 - - 58
Gulzhan Moldazhanova (j) 93 - - 93
Ekaterina Nikitina(j) 96 - - 96
Olga Mashkovskaya (j) 89 - - 89
Daniel Lesin Wolfe (k) 58 - - 58
Maksim Sokov (j) 96 - - 96

Independent Non-executive Directors

Matthias Warnig (Chairman) (l) 452 - - 452
Philippe Bernard Henri Mailfait -
82 - 82
(h)
Jean-Pierre Thomas (h) 95 - - 95
Bernard Zonneveld 230 - - 230
Philip Lader (k) 97 - - 97
Elsie Leung Oi-Sie 203 - - 203
Mark Garber (j) 114 - - 114
Dmitry Vasiliev 193 - - 193
2,459 3,607 8,928 14,994

a. Evgenii Nikitin and Evgenii Vavilov were appointed as Executive Directors in June 2018.
b. Evgeny Kuryanov was appointed as Executive Director in February 2019.
c. Sergei Popov was appointed as Executive Director in June 2018 and resigned from his position in February
2019.
d. Vyacheslav Solomin was appointed as Non-executive Director in June 2018.
e. Vladimir Kolmogorov was appointed as Non-executive Directors in May 2019.
f. Timur Valiev was appointed as Non-executive Directors in June 2018 and resigned from his position in
May 2019.
g. Christopher Burnham, Nicholas Jordan, Kevin Parker, Maksim Poletaev and Randolph Reynolds were
appointed as Independent Non-executive Directors in February 2019.

41
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

h. Philippe Bernard Henri Mailfait and Jean-Pierre Thomas were appointed as Independent Non-executive
Directors in June 2018 and resigned from their positions in January 2019.
i. Oleg Deripaska resigned from his position as member of the Board of Directors in May 2018
j. Vladislav Soloviev, Siegfried Wolf, Gulzhan Moldazhanova, Ekaterina Nikitina, Olga Mashkovskaya,
Maksim Sokov, Dmitry Afanasiev and Mark Garber resigned from their positions as members of the Board
of Directors in June 2018.
k. Maksim Goldman, Ivan Glasenberg, Philip Lader and Daniel Lesin Wolfe resigned from their positions as
members of the Board of Directors in April 2018.
l. Matthias Warnig resigned from his position as an independent non-executive director of the Company and
the Chairman of the Company with effect from 31 December 2018.
The remuneration of the executive directors disclosed above includes compensation received starting
from the date of the appointment and/or for the period until their termination as a member of the Board
of Directors.
Retirement scheme contributions for the directors, who are members of management, are not disclosed
as the amount is considered not significant for either year presented. There are no retirement scheme
contributions for non-executive directors.

10 Individuals with highest emoluments

Of the five individuals with the highest emoluments, one was director in the year ended 31 December
2019, whose emolument is disclosed in note 9. The aggregate of the emoluments in respect of the other
individuals are as follows:
Year ended 31 December
2019 2018
USD thousand USD thousand
Salaries 19,291 11,449
Discretionary bonuses 14,406 11,238
33,697 22,687

The emoluments of the other individuals with the highest emoluments are within the following bands:
Year ended 31 December
2019 2018
Number of Number of
individuals individuals
HK$29,500,001-HK$30,000,000 (US$3,750,001 – US$3,850,000) 1 -
HK$37,000,001-HK$37,500,000 (US$4,700,001 – US$4,800,000) - 1
HK$39,000,001-HK$39,500,000 (US$4,900,001 – US$5,000,000) - 1
HK$41,000,001-HK$41,500,000 (US$5,200,001 – US$5,300,000) - 1
HK$48,000,001-HK$48,500,000 (US$6,100,001 – US$6,200,000) 1 -
HK$51,000,001-HK$51,500,000 (US$6,500,001 – US$6,600,000) 1 -
HK$51,500,001-HK$52,000,000 (US$6,600,001 – US$6,700,000) 1 -
HK$59,500,001-HK$60,000,000 (US$7,600,001 – US$7,700,000) - 1
HK$83,000,001-HK$83,500,000 (US$10,600,001 – US$10,700,000) 1 -

42
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

No emoluments have been paid to these individuals as an inducement to join or upon joining the Group
or as compensation for loss of office during the years presented.
Retirement scheme contributions to individuals with highest emoluments are not disclosed as the
amount is considered not significant for either year presented.

11 Dividends
No dividends were declared and paid by the Company during the year ended 31 December 2019 and
the year ended 31 December 2018.
The Company is subject to external capital requirements (refer to note 22(f)).

12 Earnings per share

The calculation of earnings per share is based on the profit attributable to ordinary equity shareholders
of the Company and the weighted average number of shares in issue during the years ended
31 December 2019 and 31 December 2018. Weighted average number of shares:
Year ended 31 December
2019 2018
Issued ordinary shares at beginning of the year 15,193,014,862 15,193,014,862
Effect of treasury shares - -
Weighted average number of shares at end of the year 15,193,014,862 15,193,014,862

Profit for the year, USD million 960 1,698

Basic and diluted earnings per share, USD 0.063 0.112

There were no outstanding dilutive instruments during the years ended 31 December 2019 and 2018.

43
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

13 Property, plant and equipment

Accounting policies
(i) Recognition and measurement
Items of property, plant and equipment, are measured at cost less accumulated depreciation and
impairment losses. The cost of property, plant and equipment at 1 January 2004, the date of transition
to IFRSs, was determined by reference to its fair value at that date.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-
constructed assets includes the cost of materials and direct labour, any other costs directly attributable
to bringing the asset to a working condition for its intended use, the costs of dismantling and removing
the items and restoring the site on which they are located and capitalised borrowing costs. Purchased
software that is integral to the functionality of the related equipment is capitalised as part of that
equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items (major components) of property, plant and equipment.
The cost of periodic relining of electrolysers is capitalised and depreciated over the expected production
period.
Gains or losses on disposal of an item of property, plant and equipment are determined by comparing
the proceeds from disposal with the carrying amount of property, plant and equipment, and are
recognised net within gain/(loss) on disposal of property, plant and equipment in the statement of
income.

(ii) Subsequent costs

The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will flow
to the Group and its cost can be measured reliably. The carrying amount of the replaced part is
derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in
the statement of income as incurred.

(iii) Exploration and evaluation assets

Exploration and evaluation activities involve the search for mineral resources, the determination of
technical feasibility and the assessment of commercial viability of an identified resource. Exploration
and evaluation activities include:
• researching and analysing historical exploration data;
• gathering exploration data through topographical, geochemical and geophysical studies;
• exploratory drilling, trenching and sampling;
• determining and examining the volume and grade of the resource;
• surveying transportation and infrastructure requirements; and
• conducting market and finance studies.
Administration costs that are not directly attributable to a specific exploration area are charged to the
statement of income.
License costs paid in connection with a right to explore in an existing exploration area are capitalised
and amortised over the term of the permit.
Exploration and evaluation expenditure is capitalised as exploration and evaluation assets when it is
expected that expenditure related to an area of interest will be recouped by future exploitation, sale, or,

44
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

at the reporting date, the exploration and evaluation activities have not reached a stage that permits a
reasonable assessment of the existence of commercially recoverable ore reserves. Capitalised
exploration and evaluation expenditure is recorded as a component of property, plant and equipment at
cost less impairment losses. As the asset is not available for use, it is not depreciated. All capitalised
exploration and evaluation expenditure is monitored for indications of impairment. Where there are
indicators of potential impairment, an assessment is performed for each area of interest in conjunction
with the group of operating assets (representing a cash-generating unit) to which the exploration is
attributed. Exploration areas at which reserves have been discovered but which require major capital
expenditure before production can begin are continually evaluated to ensure that commercial quantities
of reserves exist or to ensure that additional exploration work is underway or planned. To the extent that
capitalised expenditure is not expected to be recovered it is charged to the statement of income.
Exploration and evaluation assets are transferred to mining property, plant and equipment or intangible
assets when development is sanctioned.

(iv) Stripping costs

Expenditure relating to the stripping of overburden layers of ore, including estimated site restoration
costs, is included in the cost of production in the period in which it is incurred.

(v) Mining assets

Mining assets are recorded as construction in progress and transferred to mining property, plant and
equipment when a new mine reaches commercial production.
Mining assets include expenditure incurred for:
• Acquiring mineral and development rights;
• Developing new mining operations.
Mining assets include interest capitalised during the construction period, when financed by borrowings.

(vi) Depreciation
The carrying amounts of property, plant and equipment (including initial and any subsequent capital
expenditure) are depreciated to their estimated residual value over the estimated useful lives of the
specific assets concerned, or the estimated life of the associated mine or mineral lease, if shorter.
Estimates of residual values and useful lives are reassessed annually and any change in estimate is taken
into account in the determination of remaining depreciation charges. Leased assets are depreciated over
the shorter of the lease term and their useful lives. Freehold land is not depreciated.
The property, plant and equipment is depreciated on a straight-line or units of production basis over the
respective estimated useful lives as follows:
• Buildings 30 to 50 years;
• Plant, machinery and equipment 5 to 40 years;
• Electrolysers 4 to 15 years;
• Mining assets units of production on proven and probable reserves;
• Other (except for exploration
and evaluation assets) 1 to 20 years.

45
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Disclosures
Machinery Construct
Land and and Electro- Mining ion in
USD million buildings equipment lysers Other assets progress Total
Cost/Deemed cost
Balance at 1 January 2018 3,488 6,242 2,340 183 492 1,751 14,496
Additions 1 23 101 - 7 705 837
Acquired through business
combination - - - 16 - - 16
Disposals (6) (63) - (2) (4) (86) (161)
Transfers 106 280 118 5 8 (517) -
Foreign currency translation (80) (108) (15) (1) (60) (67) (331)
Balance at 31 December 2018 3,509 6,374 2,544 201 443 1,786 14,857

IFRS 16 application 19 19 - - - - 38
Balance at 1 January 2019 3,528 6,393 2,544 201 443 1,786 14,895
Additions 10 44 131 1 13 688 887
Acquired through business
combination 4 - - - - 2 6
Disposals (10) (140) (8) (51) (2) (21) (232)
Transfers 110 275 42 8 4 (439) -
Foreign currency translation 40 50 4 - 35 43 172
Balance at 31 December 2019 3,682 6,622 2,713 159 493 2,059 15,728

Accumulated depreciation and

impairment losses
Balance at 1 January 2018 1,942 4,541 2,025 148 427 1,090 10,173
Depreciation charge 85 296 151 5 2 - 539
Impairment loss/ (reversal) of
impairment loss (53) 16 - 2 6 76 47
Disposals (2) (53) - (2) - (7) (64)
Transfers 14 (60) 46 1 - (1) -
Foreign currency translation (68) (87) (12) (1) (58) (33) (259)
Balance at 31 December 2018 1,918 4,653 2,210 153 377 1,125 10,436

Balance at 1 January 2019 1,918 4,653 2,210 153 377 1,125 10,436
Depreciation charge 89 320 144 3 2 - 558
Impairment loss/ (reversal) of
impairment loss 106 76 32 (5) 39 (17) 231
Disposals (3) (99) (5) (4) (1) - (112)
Transfers
Foreign currency translation 27 35 4 - 34 16 116
Balance at 31 December 2019 2,137 4,985 2,385 147 451 1,124 11,229

Net book value

At 31 December 2018 1,591 1,721 334 48 66 661 4,421
At 31 December 2019 1,545 1,637 328 12 42 935 4,499

46
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Depreciation expense of USD544 million (2018: USD496 million) has been charged to cost of goods
sold, USD4 million (2018: USD3 million) to distribution expenses and USD14 million (2018: USD12
million) to administrative expenses.
During the year ended 31 December 2019 interest expense of USD26 million was capitalised following
commencement of active construction at several projects (2018: USD20 million) .
Included into construction in progress at 31 December 2019 and 2018 are advances to suppliers of
property, plant and equipment of USD124 million and USD32 million, respectively.
The carrying value of property, plant and equipment subject to lien under loan agreements was
USD44 million as at 31 December 2019 (31 December 2018: USD3 million), refer to note 19.

(a) Impairment
In accordance with the Group’s accounting policies, each asset or cash generating unit is evaluated
every reporting period to determine whether there are any indications of impairment. If any such
indication exists, a formal estimate of recoverable amount is performed and an impairment loss
recognised to the extent that the carrying amount exceeds the recoverable amount. The recoverable
amount of an asset or cash generating group of assets is measured at the higher of fair value less costs
to sell and value in use.
Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s
length transaction between knowledgeable and willing parties and is generally determined as the present
value of the estimated future cash flows expected to arise from the continued use of the asset, including
any expansion prospects, and its eventual disposal.
Value in use is also generally determined as the present value of the estimated future cash flows, but
only those expected to arise from the continued use of the asset in its present form and its eventual
disposal. Present values are determined using a risk-adjusted pre-tax discount rate appropriate to the
risks inherent in the asset. Future cash flow estimates are based on expected production and sales
volumes, commodity prices (considering current and historical prices, price trends and related factors),
bauxite reserve estimate, operating costs, restoration and rehabilitation costs and future capital
expenditure.
Bauxite reserves are estimates of the amount of product that can be economically and legally extracted
from the Group’s properties. In order to calculate reserves, estimates and assumptions are required about
a range of geological, technical and economic factors, including quantities, grades, production
techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and
exchange rates. The Group determines ore reserves under the Australasian Code for Reporting of
Mineral Resources and Ore Reserves September 1999, known as the JORC Code. The JORC Code
requires the use of reasonable investment assumptions to calculate reserves.
Management identified several factors that indicated that for a number of Group’s cash-generating units
previously recognised impairment loss may require reversal and for a number of cash-generating units
impairment loss shall be recognised. These include significant decrease of aluminium and alumina
prices during the year as result of LME and overall market instability. In aluminium production, the
Group benefited from decrease in cash cost due to decrease in alumina and energy resources costs. For
alumina cash generating units, major influence was on the part of decrease in alumina prices, favourable
dynamics in prices of energy resources being a significant part of cash cost. Bauxite cash generating
units incurred more or less stable sale price and cash cost of bauxite.
For the purposes of impairment testing the recoverable amount of each cash generating unit was
determined by discounting expected future net cash flows of the cash generating unit.
Based on results of impairment testing as at 31 December 2019, management has 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 Aughinish and Cobad cash generating

47
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

units in the amount of USD363 million. Additionally, management has concluded that an impairment
loss in respect of KAZ, VgAZ, BAZ and UAZ, Kubal, Kremny and Windalco cash generating units, in
the amount of USD545 million should be recognised in these consolidated financial statements.
Based on results of impairment testing as at 31 December 2018, management has 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 BAZ and UAZ cash generating unit in
the amount of USD177 million. Additionally, management has concluded that an impairment loss in
respect of Cobad cash generating unit in the amount of USD78 million should be recognised in these
consolidated financial statements.
For the purposes of impairment testing the recoverable amount of each cash generating unit was
determined by discounting expected future net cash flows of the cash generating unit. 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.
Year ended 31 December
2019 2018
Kubikenborg Aluminium (Kubal) 11.1% 11.1%
Windalco 18.6% 21.0%
BAZ and UAZ (Bogoslovsk and Ural aluminium smelters) 12.5% 19.2%
KAZ (Kandalaksha aluminium smelter) 12.5% 14.0%
VgAZ (Volgograd aluminium smelter) 12.0% 13.0%
Compagnie de Bauxites de Dian-Dian (Cobad) 20.0% 22.0%
Kremny 13.0% 13.0%
Aughinish Alumina 12.0% 13.4%

The recoverable amount 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 USD49 million at 31 December
2019 (2018: USD146 million). These assets have been impaired in full. No further impairment of
property, plant and equipment or reversal of previously recorded impairment was identified by
management.

14 Intangible assets
Accounting policies

(i) Goodwill
On the acquisition of a subsidiary, an interest in a joint venture or an associate or an interest in a joint
arrangement that comprises a business, the identifiable assets, liabilities and contingent liabilities of the
acquired business (or interest in a business) are recognised at their fair values unless the fair values
cannot be measured reliably. Where the fair values of assumed contingent liabilities cannot be measured
reliably, no liability is recognised but the contingent liability is disclosed in the same manner as for
other contingent liabilities.

48
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Goodwill arises when the cost of acquisition exceeds the fair value of the Group’s interest in the net fair
value of identifiable net assets acquired. Goodwill is not amortised but is tested for impairment annually.
For this purpose, goodwill arising on a business combination is allocated to the cash-generating units
expected to benefit from the acquisition and any impairment loss recognised is not reversed even where
circumstances indicate a recovery in value.
When the fair value of the Group’s share of identifiable net assets acquired exceeds the cost of
acquisition, the difference is recognised immediately in the statement of income.
In respect of associates or joint ventures, the carrying amount of goodwill is included in the carrying
amount of the interest in the associate and joint venture and the investment as a whole is tested for
impairment whenever there is objective evidence of impairment. Any impairment loss is allocated to
the carrying amount of the interest in the associate and joint venture.

(ii) Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical
knowledge and understanding, is recognised in the statement of income when incurred.
Development activities involve a plan or design for the production of new or substantially improved
products and processes. Development expenditure is capitalised only if development costs can be
measured reliably, the product or process is technically and commercially feasible, future economic
benefits are probable and the Group intends to and has sufficient resources to complete development
and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour and
overhead costs that are directly attributable to preparing the asset for its intended use and capitalised
borrowing costs. Other development expenditure is recognised in the statement of income when
incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and
accumulated impairment losses.

(iii) Other intangible assets

Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at
cost less accumulated amortisation and accumulated impairment losses.

(iv) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in
the specific asset to which it relates. All other expenditure, including expenditure on internally generated
goodwill and brands, is recognised in the statement of income when incurred.

(v) Amortisation
Amortisation is recognised in the statement of income on a straight-line basis over the estimated useful
lives of intangible assets, other than goodwill, from the date that they are available for use. The estimated
useful lives are as follows:
• software 5 years;
• other 2-8 years.
The amortisation method, useful lives and residual values are reviewed at each financial year end and
adjusted if appropriate.

49
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Disclosures
Other
intangible
Goodwill assets Total
USD million USD million USD million
Cost
Balance at 1 January 2018 2,917 547 3,464
Additions 48 39 87
Disposals - (8) (8)
Foreign currency translation (215) (5) (220)
Balance at 31 December 2018 2,750 573 3,323
Balance at 1 January 2019 2,750 573 3,323
Additions - 41 41
Disposals - (23) (23)
Foreign currency translation 127 7 134
Balance at 31 December 2019 2,877 598 3,475

Amortisation and impairment losses

Balance at 1 January 2018 (449) (463) (912)
Amortisation charge - (2) (2)
Balance at 31 December 2018 (449) (465) (914)
Balance at 1 January 2019 (449) (465) (914)
Amortisation charge - (4) (4)
Balance at 31 December 2019 (449) (469) (918)

Net book value

At 31 December 2018 2,301 108 2,409
At 31 December 2019 2,428 129 2,557

The amortisation charge is included in cost of sales in the consolidated statement of income.
Goodwill recognised in these consolidated financial statements initially arose on the formation of the
Group in 2000 and the acquisition of a 25% additional interest in the Group by its controlling
shareholder in 2003. The amount of goodwill was principally increased in 2007 as a result of the
acquisition of certain businesses of SUAL Partners and Glencore.

(a) Impairment testing of goodwill and other intangible assets

For the purposes of impairment testing, the entire amount of goodwill is allocated to the aluminium
segment of the Group’s operations. The aluminium segment represents the lowest level within the Group
at which the goodwill is monitored for internal management purposes. The recoverable amount
represents value in use as determined by discounting the future cash flows generated from the continuing
use of the plants within the Group’s aluminium segment.

50
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Similar considerations to those described above in respect of assessing the recoverable amount of
property, plant and equipment apply to goodwill.
At 31 December 2019, management analysed changes in the economic environment and developments
in the aluminium industry and the Group’s operations since 31 December 2018 and performed an
impairment test for goodwill at 31 December 2019 using the following assumptions to determine the
recoverable amount of the segment:
• Total production was estimated based on average sustainable production levels of 3.8 million metric
tonnes of primary aluminium, of 8.2 million metric tonnes of alumina and of 15.4 million metric
tonnes of bauxite. Bauxite and alumina will be used primarily internally for production of primary
aluminium;
• Aluminium sales prices were based on the long-term aluminium price outlook derived from
available industry and market sources at USD1,802 per tonne for primary aluminium in 2020,
USD1,860 in 2021, USD1,952 in 2022, USD2,028 in 2023, USD2,099 in 2024. Alumina prices
were derived from the same sources as aluminium prices at USD301 per tonne for alumina in 2020,
USD311 in 2021, USD322 in 2022, USD341 in 2023, USD349 in 2024. Operating costs were
projected based on the historical performance adjusted for inflation;
• Nominal foreign currency exchange rates applied to convert operating costs of the Group
denominated in RUB into USD were RUB65.8 for one USD in 2020, RUB65.4 in 2021, RUB63.9
in 2022, RUB63.0 in 2023, RUB63.6 in 2024. Inflation of 4.0% – 4.6% in RUB and 1.7% - 2.1%
in USD was assumed in determining recoverable amounts;
• The pre-tax discount rate was estimated in nominal terms based on the weighted average cost of
capital basis and was 11.3%;
• A terminal value was derived following the forecast period assuming a 1.7% annual growth rate.
Values assigned to key assumptions and estimates used to measure the units’ recoverable amount was
based on external sources of information and historic data. Management believes that the values
assigned to the key assumptions and estimates represented the most realistic assessment of future trends.
The results were particularly sensitive to the following key assumptions:
• A 5% reduction in the projected aluminium and alumina price levels would result in a decrease in
the recoverable amount by 44% and would lead to an impairment in amount USD 1 241 million;
• A 5% increase in the projected level of electricity and alumina costs in the aluminium production
would have resulted in a 21% decrease in the recoverable amount but would not lead to an
impairment;
• A 1% increase in the discount rate would have resulted in a 11% decrease in the recoverable amount
but would not lead to an impairment.
Based on results of impairment testing of goodwill, management concluded that no impairment should
be recorded in the consolidated financial statements as at 31 December 2019.
At 31 December 2018, management analysed changes in the economic environment and developments
in the aluminium industry and the Group’s operations since 31 December 2017 and performed an
impairment test for goodwill at 31 December 2018 using the following assumptions to determine the
recoverable amount of the segment:
• Total production was estimated based on average sustainable production levels of 3.8 million metric
tonnes of primary aluminium, of 8.1 million metric tonnes of alumina and of 16.5 million metric
tonnes of bauxite. Bauxite and alumina will be used primarily internally for production of primary
aluminium;

51
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

• Sales prices were based on the long-term aluminium price outlook derived from available industry
and market sources at USD2,117 per tonne for primary aluminium in 2019, USD2,159 in 2020,
USD2,193 in 2021, USD2,193 in 2022, USD2,216 in 2023. Operating costs were projected based
on the historical performance adjusted for inflation;
• Nominal foreign currency exchange rates applied to convert operating costs of the Group
denominated in RUB into USD were RUB66.8 for one USD in 2019, RUB68.3 in 2020, RUB66.7
in 2021, RUB65.1 in 2022, RUB65.0 in 2023. Inflation of 4.0% – 4.5% in RUB and 1.6% - 2.4%
in USD was assumed in determining recoverable amounts;
• The pre-tax discount rate was estimated in nominal terms based on the weighted average cost of
capital basis and was 15.9%;
• A terminal value was derived following the forecast period assuming a 1.7% annual growth rate.
Values assigned to key assumptions and estimates used to measure the units’ recoverable amount was
based on external sources of information and historic data. Management believes that the values
assigned to the key assumptions and estimates represented the most realistic assessment of future trends.
The results were particularly sensitive to the following key assumptions:
• A 5% reduction in the projected aluminium price level would have resulted in a decrease in the
recoverable amount by 22% but would not lead to an impairment;
• A 5% increase in the projected level of electricity and alumina costs in the aluminium production
would have resulted in a 14% decrease in the recoverable amount but would not lead to an
impairment;
• A 1% increase in the discount rate would have resulted in a 8% decrease in the recoverable amount
but would not lead to an impairment.
Based on results of impairment testing of goodwill, management concluded that no impairment should
be recorded in the consolidated financial statements as at 31 December 2018.

15 Interests in associates and joint ventures

Accounting policies
An associate is an entity in which the Group or Company has significant influence, but not control or
joint control, over its management, including participation in the financial and operating policy
decisions.
A joint venture is an arrangement whereby the Group or Company and other parties contractually agree
to share control of the arrangement, and have rights to the net assets of the arrangement.
An investment in an associate or a joint venture is accounted for in the consolidated financial statements
under the equity method, unless it is classified as held for sale (or included in a disposal group that is
classified as held for sale). Under the equity method, the investment is initially recorded at cost, adjusted
for any excess of the Group’s share of the acquisition-date fair values of the investee’s identifiable net
assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post
acquisition change in the Group’s share of the investee’s net assets and any impairment loss relating to
the investment. Any acquisition-date excess over cost, the Group’s share of the post-acquisition, post-
tax results of the investees and any impairment losses for the year are recognised in the consolidated
statement of income, whereas the Group’s share of the post-acquisition post-tax items of the investees’
other comprehensive income is recognised in the consolidated statement of other comprehensive
income.

52
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

When the Group’s share of losses exceeds its interest in the associate or the joint venture, the Group’s
interest is reduced to nil and recognition of further losses is discontinued except to the extent that the
Group has incurred legal or constructive obligations or made payments on behalf of the investee.
Unrealised profits and losses resulting from transactions between the Group and its associates and joint
venture are eliminated to the extent of the group’s interest in the investee, except where unrealised losses
provide evidence of an impairment of the asset transferred, in which case they are recognised
immediately in profit or loss.
In accordance with the Group’s accounting policies, each investment in an associate or joint venture is
evaluated every reporting period to determine whether there are any indications of impairment after
application of the equity method of accounting. If any such indication exists, a formal estimate of
recoverable amount is performed and an impairment loss recognised to the extent that the carrying
amount exceeds the recoverable amount. The recoverable amount of an investment in an associate or
joint venture is measured at the higher of fair value less costs to sell and value in use.
Similar considerations to those described above in respect of assessing the recoverable amount of
property, plant and equipment apply to investments in associates or joint venture. In addition to the
considerations described above the Group may also assess the estimated future cash flows expected to
arise from dividends to be received from the investment, if such information is available and considered
reliable.
Disclosures
31 December
2019 2018
USD million USD million
Balance at the beginning of the year 3,698 4,448
Group’s share of profits, impairment and reversal of impairment 1,669 955
(Return of prepayment)/prepayment for shares (41) 41
Acquisition of investments 75 -
Dividends (1,609) (946)
Group’s share of other comprehensive income of associates - 10
Foreign currency translation 448 (810)
Balance at the end of the year 4,240 3,698
Goodwill included in interests in associates 2,428 2,163

The following list contains only the particulars of associates and joint ventures, all of which are
corporate entities, which principally affected the results or assets of the Group.
Ownership interest
Place of Group's Group’s
Name of associate/ incorporation Particulars of issued effective nominal
joint venture and operation and paid up capital interest interest Principal activity
PJSC MMC Norilsk Russian 158,245,476 shares, Nickel and other
Nickel Federation RUB1 par value 27.82% 27.82% metals production
Production of
Queensland Alumina 2,212,000 shares, AUD2 alumina under a
Limited Australia par value 20% 20% tolling agreement
BOGES Limited, BALP Energy /
Cyprus, Russian Limited – 10,000 shares Aluminium
BEMO project Federation EUR1.71 each 50% 50% production

53
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The summary of the consolidated financial statements of associates and joint ventures for the year ended
31 December 2019 is presented below:

PJSC MMC Queensland Other joint

Norilsk Nickel Alumina Limited BEMO project ventures
Group Group Group Group
share 100% share 100% share 100% share 100%
Non-current assets 5,868 12,899 163 535 1,528 2,942 252 464
Current assets 1,829 6,575 33 169 151 302 44 87
Non-current liabilities (2,726) (9,765) (64) (202) (1,012) (2,024) (69) (139)
Current liabilities (1,509) (5,422) (132) (373) (83) (166) (33) (67)
Net assets 3,462 4,287 - 129 584 1,054 194 345

PJSC MMC Queensland Other joint

Norilsk Nickel Alumina Limited BEMO project ventures
Group Group Group Group
share 100% share 100% share 100% share 100%
Revenue 3,774 13,563 124 620 365 729 165 330
Profit from continuing
operations 1,587 5,966 - 4 49 (128) 33 62
Other comprehensive
income 383 484 - (1) 61 123 4 2
Total comprehensive
income 1,970 6,450 - 3 110 (5) 37 64

The summary of the consolidated financial statements of associates and joint ventures for the year ended
31 December 2018 is presented below:

PJSC MMC Norilsk Queensland Other joint

Nickel Alumina Limited BEMO project ventures
Group Group Group Group
share 100% share 100% share 100% share 100%
Non-current assets 5,123 10,697 104 503 1,366 2,849 146 293
Current assets 1,267 4,554 38 196 126 252 104 287
Non-current liabilities (2,633) (9,420) (67) (194) (986) (1,972) (37) (74)
Current liabilities (656) (2,358) (75) (379) (37) (75) (85) (230)
Net assets 3,101 3,473 - 126 469 1,054 128 276

PJSC MMC Norilsk Queensland Other joint

Nickel Alumina Limited BEMO project ventures
Group Group Group Group
share 100% share 100% share 100% share 100%
Revenue 3,247 11,670 140 701 288 575 969 2,704
Profit from continuing
operations 885 3,085 - (1) 41 69 29 58
Other comprehensive
income (693) (853) - (13) (92) (184) (15) (30)
Total comprehensive
income 192 2,232 - (14) (51) (115) 14 28

54
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(a) PJSC MMC Norilsk Nickel

The Group’s investment in Norilsk Nickel is accounted for using equity method and the carrying value
as at 31 December 2019 and 31 December 2018 amounted USD3,462 million and USD3,101 million,
respectively. The market value amounted USD13,586 million and USD8,286 million as at 31 December
2019 and 31 December 2018, respectively, and is determined by multiplying the quoted bid price per
share on the Moscow Exchange on the year-end date by the number of shares held by the Group.
(b) Queensland Alumina Limited (“QAL”)
The carrying value of the Group’s investment in Queensland Alumina Limited as at both 31 December
2019 and 31 December 2018 amounted to USD nil million. At 31 December 2019 management has not
identified any impairment reversal indicators relating to the Group’s investment in QAL and as a result
no detailed impairment testing was performed in relation to this investment.
(c) BEMO project
The carrying value of the Group’s investment in BEMO project as at 31 December 2019 and
31 December 2018 amounted USD584 million and USD469 million, respectively.
For the purposes of impairment testing, the BEMO project was separated into two cash generating units
– the Boguchansky Aluminium Smelter (“BoAZ’) and the Boguchansky Hydro Power Plant
(“BoGES”). The recoverable amount was determined by discounting the expected future net cash flows
of each cash generating unit.
At 31 December 2019 management has not identified any impairment indicators relating to the Group’s
investment in BoGES as well as any impairment reversal indicators relating to investments in BoAZ
and as a result no detailed impairment testing was performed in relation to this investment.
At 31 December 2019, accumulated losses of USD651 million (2018: USD639 million) related to
impairment charges at BoAZ have not been recognised because the Group’s investment has already
been fully written down to USD nil million.
Summary of the additional financial information of the Group's effective interest in BEMO project for
the year ended 31 December 2019 and 31 December 2018 is presented below (all in USD million):
31 December 2019 31 December 2018
USD million USD million
Cash and cash equivalents 60 51
Current financial liabilities (41) (12)
Non-current financial liabilities (929) (947)
Depreciation and amortisation (17) (19)
Interest income 3 2
Interest expense (18) (19)
Income tax expense (12) (11)

55
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

16 Inventories
Accounting policies
Inventories are measured at the lower of cost or net realisable value. Net realisable value is the estimated
selling price in the ordinary course of business, less the estimated costs of completion and selling
expenses.
The cost of inventories is determined under the weighted average cost method, and includes expenditure
incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing
them to their existing location and condition. In the case of manufactured inventories and work in
progress, cost includes an appropriate share of production overheads based on normal operating
capacity.
The production costs include mining and concentrating costs, smelting, treatment and refining costs,
other cash costs and depreciation and amortisation of operating assets.
The Group recognises write-downs of inventories based on an assessment of the net realisable value of
the inventories. A write-down is applied to the inventories where events or changes in circumstances
indicate that the net realisable value is less than cost. The determination of net realisable value requires
the use of judgement and estimates. Where the expectation is different from the original estimates, such
difference will impact the carrying value of the inventories and the write-down of inventories charged
to the statement of income in the periods in which such estimate has been changed.
Disclosures
31 December 31 December
2019 2018
USD million USD million

Raw materials and consumables 1,134 1,211

Work in progress 672 711
Finished goods and goods held for resale 792 1,245
2,598 3,167
Provision for inventory obsolescence (138) (161)
2,460 3,006

Inventories at 31 December 2019 and 31 December 2018 are stated at cost.

Inventory with a carrying value of USD383 million was pledged under existing trading contracts at
31 December 2019 (31 December 2018: nil).
The analysis of the amount of inventories recognised as an expense is as follows:
Year ended 31 December
2019 2018
USD million USD million
Carrying amount of inventories sold 7,006 7,414
Write off of inventories 16 20
7,022 7,434

56
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

17 Non-derivative financial instruments

Accounting policies
Non-derivative financial instruments comprise investments in securities, trade and other receivables
(excluding prepayments and tax assets), cash and cash equivalents, loans and borrowings and trade and
other payables (excluding advances received and tax liabilities).
Non-derivative financial instruments except for trade and other receivables are recognised initially at
fair value plus any directly attributable transaction costs. Trade and other receivables are recognised at
transaction price.
A financial instrument is recognised when the Group becomes a party to the contractual provisions of
the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from
the financial assets expire or if the Group transfers the financial asset to another party without retaining
control or substantially all risks and rewards of the asset. Financial liabilities are derecognised if the
Group’s obligations specified in the contract expire or are discharged or cancelled.
IFRS 9 Financial Instruments sets out requirements for recognising and measuring financial assets,
financial liabilities and some contracts to buy or sell non-financial items. The details of significant
accounting policies are set out below.

Classification and measurement of financial assets and financial liabilities

IFRS 9 contains such classification and measurement approach for financial assets that reflects the
business model in which assets are managed and their cash flow characteristics.
IFRS 9 contains three principal classification categories for financial assets: measured at amortised cost,
fair value through other comprehensive income (“FVOCI”) and fair value through profit or loss
(“FVTPL”). The classification of financial assets under IFRS 9 is generally based on the business model
in which a financial asset is managed and its contractual cash flow characteristics. Under IFRS 9,
derivatives embedded in contracts where the host is a financial asset in the scope of the standard are
never bifurcated. Instead, the hybrid financial instrument as a whole is assessed for classification.
The Group’s financial assets most fall within category of financial assets measured at amortised cost.
The only exception is derivative financial assets measured at fair value through profit or loss and cash
flow hedges accounted through other comprehensive income (note 21). The same applies to the Group’s
financial liabilities.

57
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Disclosures
(a) Trade and other receivables
31 December 31 December
2019 2018
USD million USD million
Trade receivables from third parties 502 384
Impairment loss on trade receivables (30) (33)
Net trade receivables from third parties 472 351
Trade receivables from related parties, including: 124 87
Related parties – companies capable of exerting significant influence 82 76
Impairment loss on trade receivables from related parties - companies
capable of exerting significant influence (1) (6)
Net trade receivables to related parties - companies capable of exerting
significant influence 81 70
Related parties – companies related through parent company 16 13
Related parties – associates and joint ventures 27 4
VAT recoverable 402 305
Impairment loss on VAT recoverable (28) (33)
Net VAT recoverable 374 272
Advances paid to third parties 121 185
Impairment loss on advances paid (2) (1)
Net advances paid to third parties 119 184
Advances paid to related parties, including: 47 51
Related parties – companies capable of exerting significant influence - 1
Related parties – companies related through parent company 1 1
Related parties – associates and joint ventures 46 49
Prepaid expenses 5 4
Prepaid income tax 21 22
Prepaid other taxes 26 22
Other receivables from third parties 158 112
Impairment loss on other receivables (10) (10)
Net other receivables from third parties 148 102
Other receivables from related parties, including: 15 7
Related parties – companies related through parent company 15 10
Impairment loss on other receivables from related parties - companies
related through parent company - (3)
Net other receivables to related parties - companies related through parent
company 15 7
1,351 1,102

All of the trade and other receivables are expected to be settled within one year or are repayable on
demand.

58
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(i) Ageing analysis

Included in trade and other receivables are trade receivables (net of allowance for doubtful debts) with
the following ageing analysis as of the reporting dates:
31 December 31 December
2019 2018
USD million USD million
Current (not past due) 463 358
1–30 days past due 99 62
31–60 days past due 30 6
61–90 days past due - 2
More than 90 days past due 4 10
Amounts past due 133 80
596 438

Ageing analysis is performed based on number of days receivable is overdue. Trade receivables are on
average due within 60 days from the date of billing. The receivables that are neither past due nor
impaired (i.e. current) relate to a wide range of customers for whom there was no recent history of
default.
Receivables that were past due but not impaired relate to a number of customers that have a good track
record with the Group. Based on past experience, management believes that no impairment allowance
is necessary in respect of these balances as there has not been a significant change in credit quality and
the balances are still considered fully recoverable. The Group does not hold any collateral over these
balances. Further details of the Group’s credit policy are set out in note 22(e).

(ii) Impairment of trade receivables

Under IFRS 9, loss allowances are measured on either of the following bases:
• 12-month ECLs: these are ECLs that result from possible default events within the 12 months
after the reporting date; and
• lifetime ECLs: these are ECLs that result from all possible default events over the expected life
of a financial instrument.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for bank balances for
which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has
not increased significantly since initial recognition. The Group measures loss allowances for trade
receivables at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable information
that is relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Group’s historical experience and informed credit assessment
and including forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than
30 days past due.
The Group considers a financial asset to be in default when:
• the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by
the Group to actions such as realising security (if any is held); or
• the financial asset is more than 90 days past due, but additional analysis is conducted for each
such receivable and assessment is updated accordingly.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The maximum period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present
value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance
with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the
effective interest rate of the financial asset in case of long-term assets.
At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-
impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact
on the estimated future cash flows of the financial asset have occurred.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying
amount of the assets. Impairment losses related to trade and other receivables are presented as part of
net other operating expenses.
The following analysis provides further detail about the calculation of ECLs related to trade receivables.
The Group uses an allowance matrix to measure the ECLs of trade receivables from the customers. Loss
rates are calculated using a ‘roll rate’ method based on the probability of a receivable progressing
through successive stages of delinquency to write-off. The ECLs were calculated based on actual credit
loss experience over the past two years. The Group performed the calculation of ECL rates separately
for the customers of each key trading company of the Group. Exposures within each trading company
were not further segmented except for individually significant customers which bear specific credit risk
depending on the repayment history of the customer and relationship with the Group.
The following table provides information about determined ECLs rates for trade receivables both as at
1 January 2019 and 31 December 2019.
Weighted-average loss rate
Credit-impaired
1 January 2019 31 December 2019

Current (not past due) 2% 1% No

1–30 days past due 10% 4% No
31–60 days past due 40% 11% No
61–90 days past due 50% 80% No
More than 90 days past due 85% 92% Yes

Fluctuations reflect differences between economic conditions during the period over which the
historical data has been collected, current conditions and the Group’s view of economic conditions over
the expected lives of the receivables.
Impairment losses in respect of trade receivables are recorded using an allowance account unless the
Group is satisfied that recovery of the amount is remote, in which case the impairment loss is written
off against trade receivables directly.
The movement in the allowance for doubtful debts during the period is as follows:
Year ended 31 December
2019 2018
USD million USD million
Balance at the beginning of the year (39) (16)
Reversal of impairment/ (Impairment loss) recognised 8 (23)
Balance at the end of the year (31) (39)

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The Group does not hold any collateral over these balances.

(b) Trade and other payables

31 December 31 December
2019 2018
USD million USD million
Accounts payable to third parties 474 520
Accounts payable to related parties, including: 92 64
Related parties – companies capable of exerting significant influence 3 5
Related parties – companies related through parent company 43 35
Related parties – associates and joint ventures 46 24
Advances received 518 32
Advances received from related parties, including: 392 259
Related parties – companies capable of exerting significant influence 392 259
Other payables and accrued liabilities to third parties 147 176
Other payables and accrued liabilities to related parties, including: 4 -
Related parties – companies related through parent company 4 -
Current tax liabilities 16 127
Other taxes payable 127 96
1,770 1,274

All of the trade and other payables are expected to be settled or recognised as income within one year
or are repayable on demand.
Included in trade and other payables are trade payables with the following ageing analysis as at the
reporting date. Ageing analysis is performed based on number of days payable is overdue.
31 December 31 December
2019 2018
USD million USD million
Current 497 502
Past due 0-90 days 58 50
Past due 91-120 days 1 8
Past due over 120 days 10 24
Amounts past due 69 82
566 584

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(c) Cash and cash equivalents

31 December 31 December
2019 2018
USD million USD million
Bank balances, USD 1,310 50
Bank balances, RUB 83 238
Bank balances, EUR 116 290
Bank balances, other currencies 20 27
Cash in transit - 16
Short-term bank deposits 228 169
Securities 11 11
Cash and cash equivalents in the consolidated statement of cash flows 1,768 801
Restricted cash 13 43
1,781 844

As at 31 December 2019 and 31 December 2018 included in cash and cash equivalents was restricted
cash of USD13 million and USD43 million, respectively, pledged under a Swiss Law Pledged
Agreement with BNP Paribas (Suisse) SA and Allied Irish Bank.

18 Equity
(a) Share capital
31 December 2019 31 December 2018
Number of Number of
USD shares USD shares
Ordinary shares at the end of the
year, authorised 200 million 20 billion 200 million 20 billion
Ordinary shares at 1 January 151,930,148 15,193,014,862 151,930,148 15,193,014,862
Ordinary shares at the end of
the year of USD0.01 each, issued
and paid 151,930,148 15,193,014,862 151,930,148 15,193,014,862

(b) Other reserves

The acquisition of RUSAL Limited by the Company has been accounted for as a non-substantive
acquisition. The consolidated share capital and share premium represent only the share capital and share
premium of the Company and the share capital and other paid in capital of RUSAL Limited prior to the
acquisition has been included in other reserves.
In addition, other reserves include the cumulative unrealised actuarial gains and losses on the Group's
defined post retirement benefit plans, the effective portion of the accumulative net change in fair value
of cash flow hedges and the Group’s share of other comprehensive income of associates.

62
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(c) Distributions
In accordance with the Companies (Jersey) Law 1991 (the “Law”), the Company may make
distributions at any time in such amounts as are determined by the Company out of the assets of the
Company other than the capital redemption reserves and nominal capital accounts, provided that the
directors of the Company make a solvency statement in accordance with that Law of Jersey at the time
the distributions are proposed. Dividend pay-outs are restricted in accordance with the credit facilities.

(d) Currency translation reserve

The currency translation reserve comprises all foreign exchange differences arising from the translation
of the consolidated financial statements of foreign operations and equity accounted investees. The
reserve is dealt with in accordance with the accounting policies set out in note 3(f).

(e) Movement in components of equity within the Company

USD million Share capital Reserves Total
Balance at 1 January 2018 152 13,017 13,169
Profit for the year - 1,132 1,132
Other comprehensive income - 3 3
Balance at 31 December 2018 152 14,152 14,304

Balance at 1 January 2019 152 14,152 14,304

Profit for the year - 1,594 1,594
Other comprehensive income - (3) (3)
Balance at 31 December 2019 152 15,743 15,895

19 Loans and borrowings

This note provides information about the contractual terms of the Group’s loans and borrowings. For
more information about the Group’s exposure to interest rate and foreign currency risk refer to notes
22(c)(ii) and 22(c)(iii), respectively.
31 December 31 December
2019 2018
USD million USD million
Non-current liabilities
Secured bank loans 4,951 5,566
Unsecured bank loans 202 226
Bonds 2,546 1,580
7,699 7,372
Current liabilities
Secured bank loans 223 476
Unsecured bank loans 202 12
Bonds 55 377
Accrued interest 68 49
548 914

63
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(a) Loans and borrowings

Terms and debt repayment schedule as at 31 December 2019
TOTAL 2020 2021 2022 2023 2024
USD million USD million USD million USD million USD million USD million
Secured bank loans
Variable
USD – 3M Libor + 3.75% 2,089 - 332 396 556 805
USD – 3M Libor + 2.25% 1,070 - - 356 357 357
USD 3M Libor + 1.65% 210 210 - - - -

Fixed
RUB – 9.15% 1,780 - - 289 610 881
RUB 8.75% 25 13 12 - - -
5,174 223 344 1,041 1,523 2,043

Unsecured bank loans

Variable

USD – 1M Libor + 2.4% 200 - 200 - - -

Fixed
USD 3.6% 200 200 - - - -
RUB 5% 4 2 2 - - -
Total 404 202 202 - - -
Accrued interest 68 68 - - - -
Total 5,646 493 546 1,041 1,523 2,043
The secured bank loans are secured by pledges of shares of the following Group companies as at
31 December 2019:
• 100% of International limited liability company “GERSHVIN”
• 100% of International limited liability company “AKTIVIUM”
The secured bank loans are also secured by pledges of shares of associate as at 31 December 2019:
• 25% +1 share of Norilsk Nickel.
The secured bank loans are also secured by the property, plant and equipment with a carrying amount
of USD44 million (31 December 2018: USD3 million).
As at 31 December 2019 and 31 December 2018 rights, including all monies and claims, arising out of
certain sales contracts between the Group’s trading subsidiaries and its ultimate customers, were
assigned to secure the syndicated Pre-Export Finance Term Facility Agreement (PXF) dated 25 October
2019 (31 December 2018: the syndicated Pre-Export Finance Term Facility Agreement (PXF) 24 May
2017).
On 25 October 2019 the Group entered into new five-year sustainability-linked pre-export finance
facility for USD 1,085,000,000. The interest rate is subject to a sustainability discount or premium
depending on the Company’s fulfilment of the sustainability key performance indicators (KPI). The
proceeds were used to partly refinance the principal outstanding under the existing up to USD 2 billion
pre-export finance facility.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

As at 31 December 2019 the Group through its subsidiaries has outstanding REPO loans backed
by Norilsk Nickel shares in number of 1,017,000, in the amount of USD 210 million and maturing in
June 2020.
During the year ended 31 December 2019 the Group made a principal repayment in total amounts of
USD1,700 million and RUB32,769 million (USD512 million) under the syndicated Pre-Export Finance
Term Facility Agreement (PXF) and credit facilities with Sberbank and Gazprombank, respectively.
The nominal value of the Group’s loans and borrowings was USD5,612 million at 31 December 2019
(31 December 2018: USD6,332 million).
Terms and debt repayment schedule as at 31 December 2018
TOTAL 2019 2020 2021 2022 2023 Later years
USD USD USD USD USD USD USD
million million million million million million million
Secured bank loans
Variable
USD – 3M Libor + 3.75% 3,328 - - 537 635 890 1,266
USD – 3M Libor + 2.5% 1,683 278 562 562 281 - -

Fixed
RUB – 9.25% 194 194 - - - - -
RUB – 9.15% 833 - - 134 158 221 320
RUB - 5% 4 4 - - - - -
6,042 476 562 1,233 1,074 1,111 1,586

Unsecured bank loans

Variable

USD – 1M Libor + 2.4% 200 - - 200 - - -

Fixed
RUB 8.75% 33 11 11 11 - - -
RUB 5% 5 1 2 2 - - -
Total 6,280 488 575 1,446 1,074 1,111 1,586
Accrued interest 49 49 - - - - -
Total 6,329 537 575 1,446 1,074 1,111 1,586
The secured bank loans are secured by pledges of shares of the following Group companies as at
31 December 2018:
• 100% of Gershvin Investments Corp. Limited;
• 100% of Aktivium Holding B.V.
The secured bank loans are also secured by pledges of shares of associate as at 31 December 2018:
• 25% +1 share of Norilsk Nickel.
In January 2018 the Company entered into a bilateral facility agreement with Nordea Bank AB with the
following key terms: principal amount of USD200 million, tenor of 3 years, interest rate of 1M Libor +
2.4% per annum with a bullet repayment. The proceeds were applied for partial prepayment of Group’s
existing debt.
On 13 December 2018 the Group executed amendment to the existing credit facility with Sberbank for
conversion of ½ of the principal outstanding amount of the loan into roubles with interest rate 9.15%.
As at the date of this financial statement the amount of USD2,107 million was converted into rubles.

65
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

As at 31 December 2018 the Group through its subsidiaries has outstanding REPO loan backed
by Norilsk Nickel shares in number of 1,413,379, in the amount equal to USD 194 million and maturing
in June 2019.
During 2018 the Group made a principal repayment in total amounts of USD579 million, EUR55
million (USD68 million) and RUB18 million (USD3 million) under credit facilities with Gazprombank,
VTB Capital and Credit Bank of Moscow.

(b) Bonds
As at 31 December 2019 27,751 series 08 bonds, 397,347 series BO-01 bonds, 15,000,000 series BO-
001P-01 bonds, 15,000,000 series BO-001P-02 bonds, 15,000,000 series BO-001P-03 bonds,
15,000,000 series BO-001P-04 bonds were outstanding (traded in the market).
The closing market price at 31 December 2019 was RUB 917, RUB 982, RUB 1,030, RUB 1,047, RUB
1,026 and RUB 1,003 per bond for the six tranches, respectively.
On 20 March 2019 the Group executed the put option under Panda bonds issuance (the first tranche)
and redeemed bonds with notional value CNY680 million (USD101 million).
On 29 March 2019 RUSAL Bratsk announced a new coupon rate in respect to the series 08 bonds at the
level of 0.01% per annum. On 10 April 2019 the Company exercised a put option on the outstanding
RUB-denominated bonds series 08 and redeemed the bonds with notional value of RUB23.8 million.
On 04 April 2019 RUSAL Bratsk announced a new coupon rate in respect to the series BO-01 bonds at
the level of 0.01% per annum. On 18 April 2019 the Company exercised a put option on the outstanding
RUB-denominated bonds series BO-01 and redeemed the bonds with notional value of RUB 3.8 billion.
On 29 April 2019 placement of the exchange-traded rouble bonds of PJSC RUSAL Bratsk series BО-
001P-01 in the amount of RUB15 billion with a coupon rate 9.0% was completed and the exchange-
traded rouble bonds commenced trading on the Moscow Exchange. Maturity of the bonds is ten years
subject to bondholders’ put option exercisable in April 2022. In addition to the placement, the Group
entered into a cross-currency interest rate swap, which resulted in the exchange-traded rouble bonds
exposure being translated in full amount into US-dollar exposure with the maturity of 3 years and the
interest rate of 4.69%.
On 11 July 2019 placement of the exchange-traded rouble bonds of PJSC RUSAL Bratsk series BО-
001P-02 in the amount of RUB15 billion with a coupon rate 8.60% was completed and the exchange-
traded rouble bonds commenced trading on the Moscow Exchange. Maturity of the bonds is ten years
subject to bondholders’ put option exercisable in January 2023. In addition to the placement, the Group
entered into a cross-currency interest rate swap, which resulted in the exchange-traded rouble bonds
exposure being translated in full amount into US-dollar exposure with the maturity of 3.5 years and the
interest rate of 4.45%.
On 04 September 2019 the Group executed the put option under Panda bonds issuance (the second
tranche) and redeemed bonds with notional value CNY480 million (USD67 million).
On 12 September 2019 placement of the exchange-traded rouble bonds of PJSC RUSAL Bratsk series
BО-001P-03 in the amount of RUB15 billion with a coupon rate 8.25% was completed and the
exchange-traded rouble bonds commenced trading on the Moscow Exchange. Maturity of the bonds is
ten years subject to bondholders’ put option exercisable in September 2022. In addition to the
placement, the Group entered into 2 cross-currency interest rate swaps, which resulted in the exchange-
traded rouble bonds exposure being translated in full amount into US-dollar exposure with the maturity
of 3 years for both swaps and the interest rates of 3.82% and 3.85%.
On 14 November 2019 placement of the exchange-traded rouble bonds of PJSC RUSAL Bratsk series
BО-001P-04 in the amount of RUB15 billion with a coupon rate 7.45% was completed and the
exchange-traded rouble bonds commenced trading on the Moscow Exchange. Maturity of the bonds is
ten years subject to bondholders’ put option exercisable in November 2022. In addition to the placement,

66
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

the Group entered into a cross-currency interest rate swap, which resulted in the exchange-traded rouble
bonds exposure being translated in full amount into US-dollar exposure with the maturity of 3 years and
the interest rate of 3.65%.

20 Provisions
Accounting policies
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks
specific to the liability. The unwinding of the discount is recognised as finance costs.
Disclosures
Provisions
Pension Site for legal Tax
USD million liabilities restoration claims provisions Total
Balance at 1 January 2018 69 382 3 - 454
Provisions made during the year 3 20 4 20 47
Provisions reversed during the year - (16) - - (16)
Actuarial gain (6) - - - (6)
Provisions utilised during the year (4) (7) (4) - (15)
Foreign currency translation (8) (31) - - (39)
Balance at 31 December 2018 54 348 3 20 425
Non-current 50 316 - - 366
Current 4 32 3 20 59

Balance at 1 January 2019 54 348 3 20 425

Provisions made during the year 7 43 14 - 64
Provisions reversed during the year (10) (25) - - (35)
Actuarial loss 9 - - - 9
Provisions utilised during the year (4) (2) - (20) (26)
Foreign currency translation 4 7 - - 11
Balance at 31 December 2019 60 371 17 - 448
Non-current 56 347 - - 403
Current 4 24 17 - 45

67
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(a) Pension liabilities

Group subsidiaries in the Russian Federation

The Group voluntarily provides long-term and post-employment benefits to its former and existing
employees including death-in-service, jubilee, lump sum upon retirement, material support for
pensioners and death-in-pension benefits. Furthermore, the Group provides regular social support
payments to some of its veterans of World War II.
The above employee benefit programs are of a defined benefit nature. The Group finances these
programs on a pay-as-you-go basis, so plan assets are equal to zero.

Group subsidiaries in Ukraine

Due to legal requirements, the Ukrainian subsidiaries are responsible for partial financing of the state
hardship pensions for those of its employees who worked, or still work, under severe and hazardous
labour conditions (hardship early retirement pensions). These pensions are paid until the recipient
reaches the age of entitlement to the State old age pension (55-60 years for female (dependent on year
of birth) and 60 years for male employees). In Ukraine, the Group also voluntarily provides long-term
and post-employment benefits to its employees including death-in-service, lump sum benefits upon
retirement and death-in-pension benefits.
The above employee benefit programs are of a defined benefit nature. The Group finances these
programs on a pay-as-you-go basis, so plan assets are equal to zero.
Group subsidiaries outside the Russian Federation and Ukraine
At its Guinean and Nigerian entities the Group provides a death-in-service benefit and lump-sum
benefits upon disability and old-age retirement.
At its Guyana subsidiary, the Group provides a death-in-service benefit.
At its Italian subsidiary (Eurallumina) the Group only provides lump sum benefits upon retirement,
which relate to service up to 1 January 2007.
In Sweden (Kubikenborg Aluminium AB), the Group provides defined benefit lifelong and temporary
pension benefits. The lifelong benefits are dependent on the past service and average salary level of the
employee, with an accrual rate that depends on the salary bracket the employee is in. The liability
relates only to benefits accrued before 1 January 2004.
The number of employees in all jurisdictions eligible for the plans as at 31 December 2019 and 2018
was 46,581 and 58,089, respectively. The number of pensioners in all jurisdictions as at 31 December
2019 and 2018 was 41,699 and 44,966, respectively.
The Group expects to pay under the defined benefit retirement plans an amount of USD4 million during
the 12 month period beginning on 1 January 2020.

Actuarial valuation of pension liabilities

The actuarial valuation of the Group and the portion of the Group funds specifically designated for the
Group’s employees were completed by a qualified actuary, Robert van Leeuwen AAG, as at
31 December 2019, using the projected unit credit method as stipulated by IAS 19.

68
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The key actuarial assumptions (weighted average, weighted by DBO) are as follows:
31 December 31 December
2019 2018
% per annum % per annum
Discount rate 6.4 7.9
Expected return on plan assets N/A N/A
Future salary increases 8.4 7.8
Future pension increases 5.1 4.6
Staff turnover 4.7 4.7
USSR population table USSR population table
for 1985, Ukrainian for 1985, Ukrainian
population table population table
Mortality for 2000 for 2000
70% Munich Re for 70% Munich Re for
Russia; 40% of death Russia; 40% of death
Disability probability for Ukraine probability for Ukraine

As at 31 December 2019 and 31 December 2018 the Group’s obligations were fully uncovered as the
Group has only wholly unfunded plans.

(b) Site restoration

The mining, refining and smelting activities of the Group can give rise to obligations for site restoration
and rehabilitation. Restoration and rehabilitation works can include facility decommissioning and
dismantling, removal or treatment of waste materials, land rehabilitation, and site restoration. The extent
of work required and the associated costs are dependent on the requirements of law and the
interpretations of the relevant authorities.
The Group provides for site restoration obligations when there is a specific legal or constructive
obligation for mine reclamation, landfill closure (primarily comprising red mud basin disposal sites) or
specific lease restoration requirements. The Group does not record any obligations with respect to
decommissioning of its refining or smelting facilities and restoration and rehabilitation of the
surrounding areas unless there is a specific plan to discontinue operations at a facility. This is because
any significant costs in connection with decommissioning of refining or smelting facilities and
restoration and rehabilitation of the surrounding areas would be incurred no earlier than when the facility
is closed and the facilities are currently expected to operate over a term in excess of 50-100 years due
to the perpetual nature of the refineries and smelters and continuous maintenance and upgrade programs
resulting in the fair values of any such liabilities being negligible.
Costs included in the provision encompass obligated and reasonably estimable restoration and
rehabilitation activities expected to occur progressively over the life of the operation and at the time of
closure in connection with disturbances at the reporting date. Routine operating costs that may impact
the ultimate restoration and rehabilitation activities, such as waste material handling conducted as an
integral part of a mining or production process, are not included in the provision. Costs arising from
unforeseen circumstances, such as the contamination caused by unplanned discharges, are recognised
as an expense and liability when the event gives rise to an obligation which is probable and capable of
reliable estimation.
Restoration and rehabilitation provisions are measured at the expected value of future cash flows,
discounted to their present value and determined according to the probability of alternative estimates of
cash flows occurring for each operation. Discount rates used are specific to the country in which the
operation is located. Significant judgements and estimates are involved in forming expectations of
future activities and the amount and timing of the associated cash flows. Those expectations are formed
based on existing environmental and regulatory requirements.

69
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

When provisions for restoration and rehabilitation are initially recognised, the corresponding cost is
capitalised as an asset, representing part of the cost of acquiring the future economic benefits of the
operation. The capitalised cost of restoration and rehabilitation activities is amortised over the estimated
economic life of the operation on a units of production or straight-line basis. The value of the provision
is progressively increased over time as the effect of discounting unwinds, creating an expense
recognised as part of finance expenses.
Restoration and rehabilitation provisions are also adjusted for changes in estimates. Those adjustments
are accounted for as a change in the corresponding capitalised cost, except where a reduction in the
provision is greater than the unamortised capitalised cost, in which case the capitalised cost is reduced
to nil and the remaining adjustment is recognised in the statement of income. Changes to the capitalised
cost result in an adjustment to future amortisation charges. Adjustments to the estimated amount and
timing of future restoration and rehabilitation cash flows are a normal occurrence in light of the
significant judgements and estimates involved. Factors influencing those changes include revisions to
estimated reserves, resources and lives of operations; developments in technology; regulatory
requirements and environmental management strategies; changes in the estimated costs of anticipated
activities, including the effects of inflation and movements in foreign exchange rates; and movements
in general interest rates affecting the discount rate applied.
The site restoration provision recorded in these consolidated financial statements relates primarily to
mine reclamation and red mud basin disposal sites at alumina refineries and is estimated by discounting
the risk-adjusted expected expenditure to its present value based on the following key assumptions:
31 December 31 December
2019 2018
Timing of inflated cash outflows 2020: USD23 million 2019: USD31 million
2021-2025: USD209 million 2020-2024: USD203 million
2026-2035: USD99 million 2025-2034: USD95 million
after 2035: USD161 million after 2034: USD168 million
Risk free discount rate after adjusting for
1.96% 3.10%
inflation (a)

(a) the risk free rate for the year 2018-2019 represents an effective rate, which comprises rates differentiated by years of
obligation settlement and by currencies in which the provisions were calculated

At each reporting date the Directors have assessed the provisions for site restoration and environmental
matters and concluded that the provisions and disclosures are adequate.

(c) Provisions for legal claims

In the normal course of business the Group may be involved in legal proceedings. Where management
considers that it is more likely than not that proceedings will result in the Group compensating third
parties a provision is recognised for the best estimate of the amount expected to be paid. Where
management considers that it is more likely than not that proceedings will not result in the Group
compensating third parties or where, in rare circumstances, it is not considered possible to provide a
sufficiently reliable estimate of the amount expected to be paid, no provision is made for any potential
liability under the litigation but the circumstances and uncertainties involved are disclosed as contingent
liabilities. The assessment of the likely outcome of legal proceedings and the amount of any potential
liability involves significant judgement. As law and regulations in many of the countries in which the
Group operates are continuing to evolve, particularly in the areas of taxation, sub-soil rights and
protection of the environment, uncertainties regarding litigation and regulation are greater than those
typically found in countries with more developed legal and regulatory frameworks.
The Group’s subsidiaries are subject to a variety of lawsuits and claims in the ordinary course of its
business. As at 31 December 2019, there were several claims filed against the Group’s subsidiaries
contesting breaches of contract terms and non-payment of existing obligations. Management has

70
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

reviewed the circumstances and estimated that the amount of probable outflow related to these claims
should not exceed USD17 million (31 December 2018: USD 3 million). The amount of claims, where
management assesses outflow as possible approximates USD21 million (31 December 2018: USD31
million).
At each reporting date the Directors have assessed the provisions for litigation and claims and concluded
that the provisions and disclosures are adequate.

(d) Tax provisions

The Group’s accounting policy for taxation requires management’s judgement in assessing whether
deferred tax assets and certain deferred tax liabilities are recognised in the statement of financial
position. Deferred tax assets, including those arising from carried forward tax losses, capital losses and
temporary differences, are recognised only where it is considered more likely than not that they will be
recovered, which is dependent on the generation of sufficient future taxable profits. Deferred tax
liabilities arising from temporary differences in investments, caused principally by retained earnings
held in foreign tax jurisdictions, are recognised unless repatriation of retained earnings can be controlled
and is not expected to occur in the foreseeable future.
Assumptions about the generation of future taxable profits and repatriation of retained earnings depend
on management’s estimates of future cash flows. These depend on estimates of future production and
sales volumes, commodity prices, reserves, operating costs, restoration and rehabilitation costs, capital
expenditure, dividends and other capital management transactions. Assumptions are also required about
the application of income tax legislation. These estimates and assumptions are subject to risk and
uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may
impact the amount of deferred tax assets and deferred tax liabilities recognised on the statement of
financial position and the amount of other tax losses and temporary differences not yet recognised. In
such circumstances, some or all of the carrying amount of recognised deferred tax assets and liabilities
may require adjustment, resulting in a corresponding credit or charge to the statement of income.
The Group generally provides for current tax based on positions taken (or expected to be taken) in its
tax returns. Where it is more likely than not that upon examination by the tax authorities of the positions
taken by the Group additional tax will be payable, the Group provides for its best estimate of the amount
expected to be paid (including any interest and/or penalties) as part of the tax charge.
At each reporting date the Directors have assessed the provisions for taxation and concluded that the
provisions and disclosures are adequate.

21 Derivative financial assets/liabilities

Accounting policies
The Group enters, from time to time, into various derivative financial instruments to manage its
exposure to commodity price risk, foreign currency risk and interest rate risk.
Embedded derivatives are separated from the host contract and accounted for separately if the economic
characteristics and risks of the host contract and the embedded derivative are not closely related, a
separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative and the combined instrument is not measured at fair value through profit or loss.
On initial designation of the derivative as a hedging instrument, the Group formally documents the
relationship between the hedging instrument and hedged item, including the risk management objectives
and strategy in undertaking the hedge transaction and the hedged risk, together with the methods that
will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment,
both at the inception of the hedge relationship as well as on an ongoing basis, of whether the hedging
instruments are expected to be highly effective in offsetting the changes in the fair value or cash flows
of the respective hedged items attributable to the hedged risk, and whether the actual results of each

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

hedge are within a range of 80% - 125%. For a cash flow hedge of a forecast transaction, the transaction
should be highly probable to occur and should present an exposure to variation in cash flows that
ultimately could affect reported profit or loss.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in the
statement of income when incurred. Subsequent to initial recognition, derivatives are measured at fair
value.
The measurement of fair value of derivative financial instruments, including embedded derivatives, is
based on quoted market prices. Where no price information is available from a quoted market source,
alternative market mechanisms or recent comparable transactions, fair value is estimated based on the
Group’s views on relevant future prices, net of valuation allowances to accommodate liquidity,
modelling and other risks implicit in such estimates. Changes in the fair value therein are accounted for
as described below.
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows
attributable to a particular risk associated with a recognised asset or liability or a highly probable
forecast transaction that could affect profit or loss, the effective portion of changes in the fair value of
the derivative is recognised in the statement of comprehensive income and presented in the hedging
reserve in equity. Any ineffective portion of changes in the fair value of a derivative is recognised in
the statement of income.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the
carrying amount of the asset when the asset is recognised. In other cases, the amount accumulated in
equity is reclassified to the statement of income in the same period that the hedged item affects profit
or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold,
terminated or exercised, or the designation is revoked, then hedge accounting is discontinued
prospectively. If the forecast transaction is no longer expected to occur, then the balance in equity is
reclassified to the statement of income.
Changes in the fair value of separated embedded derivatives and derivative financial instruments not
designated for hedge accounting are recognised immediately in the statement of income.
Disclosures
31 December 2019 31 December 2018
USD million USD million
Derivative Derivative Derivative Derivative
assets liabilities assets liabilities
Petroleum coke supply contracts
and other raw materials 39 36 42 31
Forward contracts for aluminium
and other instruments 21 18 - -
Cross currency swap (note 19(b)) 48 - - -
Total 108 54 42 31

Derivative financial instruments are recorded at their fair value at each reporting date. Fair value is
estimated in accordance with Level 3 of the fair value hierarchy based on management estimates and
consensus economic forecasts of relevant future prices, net of valuation allowances to accommodate
liquidity, modelling and other risks implicit in such estimates. The Group’s policy is to recognise
transfers between levels of fair value hierarchy as at the date of the event or change in circumstances
that caused the transfer. The following significant assumptions were used in estimating derivative
instruments:
2020 2021 2022 2023 2024 2025
LME Al Cash, USD per tonne 1,831 1,908 1,991 2,078 2,166 2,222
Platt's FOB Brent, USD per barrel 64 59 57 57 57 -

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The movement in the balance of Level 3 fair value measurements of derivatives is as follows:
31 December
2019 2018
USD million USD million
Balance at the beginning of the year 11 (50)
Unrealised changes in fair value recognised in statement of income
(finance (expense)/income) during the period (21) 171
Unrealised changes in fair value recognised in other comprehensive
income (cash flow hedge) during the period 34 -
Realised portion of electricity, coke and raw material contracts and cross
currency swap 30 (110)
Balance at the end of the year 54 11

During the year 2019 there have been no changes in valuation techniques used to calculate the derivative
financial instruments compared to prior year.
Management believes that the values assigned to the key assumptions and estimates represented the
most realistic assessment of future trends. The results for the derivative instruments are not particularly
sensitive to any factors other than the assumptions disclosed above.
Petroleum coke supply contracts and other raw materials
In May and September 2011, the Group entered into long-term petroleum coke supply contracts where
the price of coke is determined with reference to the LME aluminium price and the Brent oil price. The
strike price for aluminium is set at USD2,403.45 per tonne and USD1,735.03 per tonne, respectively,
while the strike price for oil is set at USD61.10 per barrel and USD47.7 per barrel, respectively.
In May 2014, the Group entered into long-term petroleum coke supply contract where the price of coke
is determined with reference to the LME aluminium price and average monthly aluminium quotations,
namely of Aluminum MW US Transaction premium, MB Aluminium Premium Rotterdam Low - High»
and Aluminum CIF Japan premium. The strike price for aluminium is set at USD1,809.65 per tonne
while the strike aluminium premium quotations for US, Europe and Japan are set at USD403.96 per
tonne, USD313.30 per tonne and USD366.00 per tonne, respectively.
In November 2015, the Group entered into long-term pitch supply contract where the price of pitch is
determined with reference to the LME aluminium price. The strike price for aluminium is set at
USD1,508 per tonne.

22 Financial risk management and fair values

(a) Fair values
Management believes that the fair values of short-term financial assets and liabilities approximate their
carrying amounts.
The methods used to estimate the fair values of the financial instruments are as follows:
Trade and other receivables, cash and cash equivalents, current loans and borrowings and trade
and other payables: the carrying amounts approximate fair value because of the short maturity period of
the instruments.
Long-term loans and borrowings, other non-current liabilities: the fair values of other non-current
liabilities are based on the present value of the anticipated cash flows and approximate carrying value,
other than Eurobonds and RUSAL Bratsk bonds issued.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Derivatives: the fair value of derivative financial instruments, including embedded derivatives, is based
on quoted market prices. Where no price information is available from a quoted market source,
alternative market mechanisms or recent comparable transactions, fair value is estimated based on the
Group’s views on relevant future prices, net of valuation allowances to accommodate liquidity,
modelling and other risks implicit in such estimates. Option-based derivatives are valued using Black-
Scholes models and Monte-Carlo simulations. The derivative financial instruments are recorded at their
fair value at each reporting date.
The following table presents the fair value of Group’s financial instruments measured at the end of the
reporting period on a recurring basis, categorised into the three-level fair value hierarchy as defined by
IFRS 13, Fair value measurement. The level into which a fair value measurement is classified is
determined with reference to the observability and significance of the inputs used in the valuation
technique as follows:
• Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in
active markets for identical assets or liabilities at the measurement date
• Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to
meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for
which market data are not available
• Level 3 valuations: Fair value measured using significant unobservable inputs.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The Group as at 31 December 2019

Carrying amount Fair value
Loans and Other financial
Note Derivatives receivables liabilities Total Level 1 Level 2 Level 3 Total
USD USD USD USD USD USD USD USD
million million million million million million million million
Financial assets measured at fair value
Petroleum coke supply contracts and other raw
materials 21 39 - - 39 - - 39 39
Forward contracts for aluminium and other
instruments 21 21 - - 21 - - 21 21
Cross currency swaps 21 48 - - 48 - - 48 48
108 - - 108 - - 108 108
Financial assets not measured at fair value*
Trade and other receivables 17 - 1,133 - 1,133 - 1,133 - 1,133
Dividends receivable - 430 - 430 - 430 - 430
Short-term investments - 171 - 171 - 171 - 171
Cash and cash equivalents 17 - 1,781 - 1,781 - 1,781 - 1,781
- 3,515 - 3,515 - 3,515 - 3,515
Financial liabilities measured at fair value
Petroleum coke supply contracts and other raw
materials 21 (36) - - (36) - - (36) (36)
Forward contracts for aluminium and other
instruments 21 (18) - - (18) - - (18) (18)
(54) - - (54) - - (54) (54)
Financial liabilities not measured at fair
value*
Secured bank loans and company loans 19 - - (5,242) (5,242) - (5,396) - (5,396)
Unsecured bank loans 19 - - (404) (404) - (407) - (407)
Unsecured bond issue 19 - - (2,601) (2,601) (1,002) (1,700) - (2,702)
Trade and other payables 17 - - (860) (860) - (860) - (860)
- - (9,107) (9,107) (1,002) (8,363) - (9,365)

* The Group considers that the carrying amounts of short-term trade receivables and payables are a reasonable approximation of fair values.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The Group as at 31 December 2018

Carrying amount Fair value
Loans and Other financial
Note Derivatives receivables liabilities Total Level 1 Level 2 Level 3 Total
USD USD USD USD USD USD USD USD
million million million million million million million million
Financial assets measured at fair value
Petroleum coke supply contracts and other raw
materials 21 42 - - 42 - - 42 42
Forward contracts for aluminium and other
instruments 21 - - - - - - - -
42 - - 42 - - 42 42
Financial assets not measured at fair value*
Trade and other receivables 17 - 819 - 819 - 819 - 819
Short-term investments - 105 105 105 105
Cash and cash equivalents 17 - 844 - 844 - 844 - 844
- 1,768 - 1,768 - 1,768 - 1,768
Financial liabilities measured at fair value
Petroleum coke supply contracts and other raw
materials 21 (31) - - (31) - - (31) (31)
Forward contracts for aluminium and other
instruments 21 - - - - - - - -
(31) - - (31) - - (31) (31)
Financial liabilities not measured at fair
value*
Secured bank loans and company loans 19 - - (6,091) (6,091) - (6,164) - (6,164)
Unsecured bank loans 19 - - (238) (238) - (236) - (236)
Unsecured bond issue 19 - - (1,957) (1,957) (161) (1,813) - (1,974)
Trade and other payables 17 - - (983) (983) - (983) - (983)
- - (9,269) (9,269) (161) (9,196) - (9,357)

* The Group considers that the carrying amounts of short-term trade receivables and payables are a reasonable approximation of fair values.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(b) Financial risk management objectives and policies

The Group’s principal financial instruments comprise bank loans and trade payables. The main
purpose of these financial instruments is to raise finance for the Group’s operations. The Group has
various financial assets such as trade receivables and cash and short-term deposits, which arise
directly from its operations.
The main risks arising from the Group’s financial instruments are cash flow interest rate risk,
liquidity risk, foreign currency risk and credit risk. Management reviews and agrees policies for
managing each of these risks which are summarised below.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s
risk management framework. The Board has established a risk management group within its
Department of Internal Control, which is responsible for developing and monitoring the Group’s risk
management policies. The Department reports regularly to the Board of Directors on its activities.
The Group’s risk management policies are established to identify and analyse the risks faced by the
Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and
the Group’s activities. The Group, through its training and management standards and procedures,
aims to develop a disciplined and constructive control environment in which all employees
understand their roles and obligations.
The Group’s Audit Committee oversees how management monitors compliance with the Group’s
risk management policies and procedures and reviews the adequacy of the risk management
framework in relation to the risks faced by the Group. The Group’s Audit Committee is assisted in
its oversight role by the Group’s Internal Audit function which undertakes both regular and ad hoc
reviews of risk management controls and procedures, the results of which are reported to the Audit
Committee.

(c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates
and equity prices will affect the Group’s income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising returns.

(i) Commodity price risk

During the years ended 31 December 2019 and 2018, the Group has entered into certain long term
electricity contracts and other commodity derivatives contracts in order to manage its exposure of
commodity price risks. Details of the contracts are disclosed in notes 21 and 25(c).

(ii) Interest rate risk

The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s
long-term debt obligations with floating interest rates (refer to note 19). The Group’s policy is to
manage its interest costs by monitoring changes in interest rates with respect to its borrowings.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The following table details the interest rate profile of the Group’s borrowings at the reporting date.
31 December 2019 31 December 2018
Effective USD Effective USD
interest rate % million interest rate % million
Fixed rate loans and borrowings
Loans and borrowings 0.01%-9.15% 4,610 4.85%-12.85% 3,026
4,610 3,026
Variable rate loans and borrowings
Loans and borrowings 3.58%-5.86% 3,569 4.91%-6.72% 5,211
3,569 5,211
8,179 8,237

The following table demonstrates the sensitivity to cash flows from interest rate risk arising from
floating rate non-derivative instruments held by the Group at the reporting date in respect of a
reasonably possible change in interest rates, with all other variables held constant. The impact on the
Group’s profit before taxation and equity and retained profits/accumulated losses is estimated as an
annualised input on interest expense or income of such a change in interest rates. The analysis has
been performed on the same basis for all years presented.
Effect on equity for
Increase/decrease Effect on profit before the year, excluding
in basis points taxation for the year tax effect
USD million USD million
As at 31 December 2019
Basis percentage points +100 (36) (35)
Basis percentage points -100 36 35

As at 31 December 2018
Basis percentage points +100 (52) (52)
Basis percentage points -100 52 52

(iii) Foreign currency risk

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a
currency other than the respective functional currencies of group entities, primarily USD but also the
Russian Rouble, Ukrainian Hryvna and Euros. The currencies in which these transactions primarily
are denominated are RUB, USD and EUR.
Borrowings are primarily denominated in currencies that match the cash flows generated by the
underlying operations of the Group, primarily USD but also RUB and EUR. This provides an
economic hedge.
In respect of other monetary assets and liabilities denominated in foreign currencies, the Group
ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at
spot rates when necessary to address short-term imbalances or entering into currency swap
arrangements.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The Group’s exposure at the reporting date to foreign currency risk arising from recognised assets
and liabilities denominated in a currency other than the functional currency of the entity to which
they relate is set out in the table below. Differences resulting from the translation of the financial
statements of foreign operations into the Group’s presentation currency are ignored.
USD-denominated RUB- EUR- Denominated in
vs. RUB denominated vs. denominated vs. other currencies
functional USD functional USD functional vs. USD functional
currency currency currency currency
As at
31 December 2019 2018 2019 2018 2019 2018 2019 2018
USD USD USD USD USD USD USD USD
million million million million million million million million
Non-current assets - - 3 3 - 1 8 -
Trade and other
receivables 1 1 662 640 55 91 43 28
Cash and cash
equivalents 26 - 84 415 124 305 35 42
Derivative
financial assets - - 40 42 - - - -
Loans and
borrowings - - (1,980) (1,030) - - - -
Provisions - - (66) (102) (26) (26) (14) (10)
Derivative
financial liabilities - - (11) (11) - - - -
Non-current
liabilities - - (1) - (6) (6) - -
Income taxation - - (2) (15) - - (8) (11)
Short-term bonds - - (7) (161) - - (49) (216)
Trade and other
payables - - (351) (393) (42) (61) (74) (54)
Net exposure
arising from
recognised assets
and liabilities 27 1 (1,629) (612) 105 304 (59) (221)

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Foreign currency sensitivity analysis

The following tables indicate the instantaneous change in the Group’s profit before taxation (and
accumulated losses) and other comprehensive income that could arise if foreign exchange rates to
which the Group has significant exposure at the reporting date had changed at that date, assuming all
other risk variables remained constant.
Year ended 31 December 2019
USD million USD million
Change in Effect on profit
exchange before taxation for Effect on equity
rates the year for the year
Depreciation of USD vs. RUB 15% (248) (248)
Depreciation of USD vs. EUR 10% 11 11
Depreciation of USD vs. other currencies 5% (3) (3)

Year ended 31 December 2018

USD million USD million
Change in Effect on profit
exchange before taxation for Effect on equity
rates the year for the year
Depreciation of USD vs. RUB 15% (92) (92)
Depreciation of USD vs. EUR 10% 30 30
Depreciation of USD vs. other currencies 5% (11) (11)

Results of the analysis as presented in the above tables represent an aggregation of the instantaneous
effects on the Group entities’ profit before taxation and other comprehensive income measured in
the respective functional currencies, translated into USD at the exchange rates ruling at the reporting
date for presentation purposes.
The sensitivity analysis assumes that the change in foreign exchange rates had been applied to re-
measure those financial instruments held by the Group which expose the Group to foreign currency
risk at the reporting date. The analysis excludes differences that would result from the translation of
other financial statements of foreign operations into the Group’s presentation currency. The analysis
has been performed on the same basis for all years presented.

(d) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall
due. The group policy is to maintain sufficient cash and cash equivalents or have available funding
through an adequate amount of committed credit facilities to meet its operating and financial
commitments.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

The following tables show the remaining contractual maturities at the reporting date of the Group’s
non-derivative financial liabilities, which are based on contractual undiscounted cash flows
(including interest payment computed using contractual rates, or if floating, based on rates current at
the reporting date) and the earliest the Group can be required to pay.
31 December 2019
Contractual undiscounted cash outflow
More than More than
Within 1 year but 2 years but
1 year or less than 2 less than 5 More than Carrying
on demand years years 5 years TOTAL amount
USD USD USD USD USD USD
million million million million million million
Trade and other payables to
third parties 764 - - - 764 764
Trade and other payables to
related parties 96 - - - 96 96
Bonds, including interest
payable 219 161 2,720 - 3,100 2,601
Loans and borrowings, incl.
interest payable 775 878 5,215 - 6,868 5,646
Guarantees 69 67 - - 136 -
1,923 1,106 7,935 - 10,964 9,107

31 December 2018
Contractual undiscounted cash outflow
More than More than
Within 1 year but 2 years but
1 year or on less than 2 less than 5 More than Carrying
demand years years 5 years TOTAL amount
USD USD USD USD USD
USD million million million million million million
Trade and other payables to
third parties 919 - - - 919 919
Trade and other payables to
related parties 64 - - - 64 64
Bonds, including interest
payable 480 82 1,773 - 2,335 1,957
Loans and borrowings,
including interest payable 897 948 4,364 1,681 7,890 6,329
Guarantees 62 59 - - 121 -
2,422 1,089 6,137 1,681 11,329 9,269

At 31 December 2019 and 31 December 2018 the Group’s guarantee in respect of credit arrangement
between BoAZ and VEB (note 24(d)) is presented as contingent liability and included at maximum
exposure for the Group in the liquidity risk disclosure above.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(e) Credit risk

The Group trades only with recognised, creditworthy third parties. It is the Group’s policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. The
majority of the Group’s third party trade receivables represent balances with the world’s leading
international corporations operating in the metals industry. In addition, receivable balances are
monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not
significant. Goods are normally sold subject to retention of title clauses, so that in the event of non-
payment the Group may have a secured claim. The Group does not require collateral in respect of
trade and other receivables. The details of impairment of trade and other receivables are disclosed in
note 17. The extent of the Group’s credit exposure is represented by the aggregate balance of
financial assets and financial guarantees given.
At 31 December 2019 and 2018, the Group has no concentration of credit risk within any single
larger customer but 19.3% and 6.7% of the total trade receivables were due from the Group’s five
largest customers, respectively (refer to note 5 for the disclosure on revenue from largest customer).
With respect to credit risk arising from guarantees, the Group’s policy is to provide financial
guarantees only to wholly-owned subsidiaries, associates and joint ventures.

(f) Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern in order to provide returns for shareholders and benefits for other stakeholders and to
maintain an optimal capital structure to reduce the cost of capital.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic
conditions. To maintain or adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Board of Directors monitors the
return on capital, which the Group defines as net operating income divided by total shareholders’
equity, excluding non-controlling interests. The Board of Directors also monitors the level of
dividends to ordinary shareholders.
The Board seeks to maintain a balance between higher returns that might be possible with higher
levels of borrowings and the advantages and security afforded by a sound capital position.
There were no changes in the Group’s approach to capital management during the year.
The Company and its subsidiaries were subject to externally imposed capital requirements in the both
years presented in these consolidated financial statements.

(g) Master netting or similar agreements

The Group may enter into sales and purchase agreements with the same counterparty in the normal
course of business. The related amount receivable and payable do not always meet the criteria for
offsetting in the statement of financial position. This is because the Group may not have any currently
legally enforceable right to offset recognised amounts, because the right to offset may be enforceable
only on the occurrence of future events.
There are no financial instruments that meet the offsetting criteria in the statement of financial
position for the year ended 31 December 2019 and 31 December 2018.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

23 Commitments
(a) Capital commitments
The Group has entered into contracts that result in contractual obligations primarily relating to
various construction and capital repair works. The commitments at 31 December 2019 and
31 December 2018 approximated USD337 million and USD255 million, respectively. These
commitments are due over a number of years.

(b) Purchase commitments

Commitments with third parties for purchases of alumina, bauxite, other raw materials and other
purchases in 2020-2034 under supply agreements are estimated from USD3,257 million to
USD4,135 million at 31 December 2019 (31 December 2018: USD2,932 million to USD3,527
million) depending on the actual purchase volumes and applicable prices.
Commitments with a related party - joint venture for purchases of primary aluminium and alloys in
2020-2030 under supply agreements are estimated from USD5,134 million to USD8,636 million at
31 December 2019 (31 December 2018: USD6,375 million to USD10,019 million) depending on the
actual purchase volumes and applicable prices. Electricity purchase commitments are disclosed in
note 25.

(c) Sale commitments

Commitments with third parties for sales of alumina and other raw materials in 2020-2034 are
estimated from USD962 million to USD1,292 million at 31 December 2019 (31 December 2018:
from USD509 million to USD2,344 million) and will be settled at market prices at the date of
delivery. Commitments with related parties for sales of alumina in 2020-2024 approximated from
USD413 million to USD771 million at 31 December 2019 (31 December 2018: from USD227
million to USD363 million).
Commitments with related parties for sales of primary aluminium and alloys in 2020-2021 are
estimated from USD567 million to USD797 million at 31 December 2019 (31 December 2018: from
USD889 million to USD1,223 million). Commitments with third parties for sales of primary
aluminium and alloys in 2020-2022 are estimated to range from USD1,720 million to USD2,559
million at 31 December 2019 (31 December 2018: from USD832 million to USD1,155 million).

(d) Social commitments

The Group contributes to the maintenance and upkeep of the local infrastructure and the welfare of
its employees, including contributions toward the development and maintenance of housing,
hospitals, transport services, recreation and other social needs of the regions of the Russian
Federation where the Group’s production entities are located. The funding of such assistance is
periodically determined by management and is appropriately capitalised or expensed as incurred.

24 Contingencies
(a) 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 and 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

83
 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

structures, which may be selective for particular tax payers and different to 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.
In addition to the amounts of income tax the Group has provided, there are certain tax positions taken
by the Group where it is reasonably possible (though less than 50% likely) that additional tax may
be payable upon examination by the tax authorities or in connection with ongoing disputes with tax
authorities. The Group's best estimate of the aggregate maximum of additional amounts that it is
reasonably possible may become payable if these tax positions were not sustained at 31 December
2019 is USD nil million (31 December 2018: USD nil million).

(b) Environmental contingencies

The Group and its predecessor entities have operated in the Russian Federation, Ukraine, Jamaica,
Guyana, the Republic of Guinea and the European Union for many years and certain environmental
problems have developed. Governmental authorities are continually considering environmental
regulations and their enforcement and the Group periodically evaluates its obligations related thereto.
As obligations are determined, they are recognised immediately. The outcome of environmental
liabilities under proposed or any future legislation, or as a result of stricter enforcement of existing
legislation, cannot reasonably be estimated. Under current levels of enforcement of existing
legislation, management believes there are no possible liabilities, which will have a material adverse
effect on the financial position or the operating results of the Group. However, the Group anticipates
undertaking significant capital projects to improve its future environmental performance and to bring
it into full compliance with current legislation.

(c) Legal contingencies

The Group’s business activities expose it to a variety of lawsuits and claims which are monitored,
assessed and contested on the 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 (refer to note 20). As at
31 December 2019 the amount of claims, where management assesses outflow as possible
approximates USD21 million (31 December 2018: USD31 million).
In January 2013, the Company received a writ of summons and statement of claim filed in the High
Court of Justice of the Federal Capital Territory of Nigeria (Abuja) by plaintiff BFIG Group Divino
Corporation (“BFIG”) against certain subsidiaries of the Company. It is a claim for damages arising
out of the defendants’ alleged tortious interference in the bid process for the sale of the Nigerian
government’s majority stake in the Aluminium Smelter Company of Nigeria Plc (“ALSCON”) and
alleged loss of BFIG’s earnings resulting from its failed bid for the said stake in ALSCON. BFIG
sought compensatory damages in the amount of USD2.8 billion plus interest.
In January 2014 the court granted the Company’s motion to join the Federal Republic of Nigeria and
Attorney General of Nigeria to the case as co-defendants. The last hearing took place on 8 November
2017. The claim was struck out. BFIG may appeal.
Based on a preliminary assessment of the claim, the Company does not expect the case to have any
material adverse effect on the Group’s financial position or its operation as a whole.
In January 2018 one of the Company’s subsidiaries, ALSCON and the Bureau of Public Enterprises
of Nigeria entered into an addendum to the original sale and purchase contract regarding ALSCON
on the key terms and conditions as it was disclosed in the announcement of the Company dated
19 January 2018.

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Notes to the Consolidated Financial Statements for the year ended 31 December 2019

(d) Insurance and provision for guarantees

Where the Group enters into financial guarantee contracts to guarantee the indebtedness of other
companies, controlled by the shareholder which is a beneficial owner of the Group at the reporting
date, 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 the Group entered into an agreement with PJSC RusHydro to provide funds to
BoAZ, if the latter is unable to fulfil its obligations under its credit facility with
GK Vnesheconombank (“VEB”). This agreement represents a surety for the increased credit limit
obtained for the financing of BoAZ. The aggregate exposure under the agreement is limited to
RUB16.8 billion (31 December 2019 and 2018 USD272 million and USD242 million, respectively)
and is split between the Group and PJSC RusHydro in equal proportion.

25 Related party transactions

(a) Transactions with management and close family members
Management remuneration
Key management received the following remuneration, which is included in personnel costs (refer
to note 6(c)):

Year ended 31 December

2019 2018
USD million USD million
Salaries and bonuses 61 67
61 67

(b) Transactions with associates and joint ventures

Sales to associates and joint ventures are disclosed in note 5, purchases from associates and joint
ventures are disclosed in note 6, accounts receivable from associates and joint ventures as well as
accounts payable to associates and joint ventures are disclosed in note 17.

(c) Transactions with other related parties

The Group transacts with other related parties, the majority of which are companies related through
parent company or under the control of SUAL Partners Limited or its controlling shareholders or
Glencore International Plc or entities under its control.
Sales to related parties for the year are disclosed in note 5, purchases from related parties are
disclosed in note 6, accounts receivable from related parties as well as accounts payable to related
parties are disclosed in note 17, commitments with related parties are disclosed in note 23, directors
remuneration in notes 9 and 10 and other transactions with shareholders are disclosed in note 11.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Other purchases of assets and other non-operating expenses from related parties are the following:

Year ended 31 December

2019 2018
USD million USD million
Related parties – companies capable of exerting significant influence 1 4
Related parties – companies related through parent company 11 18
Related parties – associates and joint ventures 3 1
15 23

Electricity contracts
In November 2016, the Group entered into the new long-term electricity contracts to supply several
Group’s smelters from En+ subsidiaries over the years 2016-2026. Purchases will be made under a
price formula close to market prices. The volumes committed under the long-term electricity
contracts are as follows:
Year 2020 2021 2022 2023 2024 2025 2026
Mln kWh 37,700 37,598 37,598 37,598 37,700 37,598 25,194
Mln USD 449 447 447 447 449 447 293

(d) Related parties balances

At 31 December 2019, included in non-current assets are balances of related parties –– companies
related through parent company of nil and balances of related parties – associates and joint ventures
of USD2 million (31 December 2018: USD46 million and USD 2 million, respectively). At
31 December 2019, included in non-current liabilities are balances of related parties – associates and
joint ventures of USD11 million (31 December 2018: USD 10 million).

(e) Pricing policies

Prices for transactions with related parties are determined on a case by case basis but are not
necessarily at arm’s length.
The Group has entered into three categories of related-party transactions: (i) those entered into on an
arm’s length basis, (ii) those entered into on non-arm’s length terms but as part of a wider deal
resulting from arms' length negotiations with unrelated third parties, and (iii) transactions unique to
the Group and the counterparty.

(f) Connected transactions

Not all the related party transactions and balances disclosed above meet the definition of connected
transactions as per Chapter 14 of the Listing Rules of Hong Kong Stock Exchange. For particulars
of the continuing connected transactions please refer to the Director’s Report section of the Annual
Report of the Company for the year ended 31 December 2019.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

26 Particulars of subsidiaries
As at 31 December 2019 and 2018, the Company has direct and indirect interests in the following
subsidiaries, which principally affected the results, assets and liabilities of the Group:
Place of Particulars
incorporation and Date of of issued and Attributable Principal
Name operation incorporation paid up capital equity interest activities
Compagnie Des Bauxites 29 November 2,000 shares of
De Kindia S.A. Guinea 2000 GNF 25,000 each 100.0% Bauxite mining
9 February
Friguia SA Guinea 1957 758,966,200,000 GNF 100.0% Alumina
Russian 4,188,531 shares of
JSC RUSAL Achinsk Federation 20 April 1994 RUB1 each 100.0% Alumina
Mykolaiv Alumina 16 September
Refinery Company Ltd Ukraine 2004 1,524,126,720 UAH 100.0% Alumina
JSC RUSAL Boxitogorsk Russian 27 October 1,012,350 shares of
Alumina Federation 1992 RUB1 each 100.0% Alumina
10,000,000 shares of
Eurallumina SpA Italy 21 March 2002 EUR1.55 each 100.0% Alumina
Russian 26 November 5,505,305 shares of
PJSC RUSAL Bratsk Federation 1992 RUB0.2 each 100.0% Smelting
Russian 16 November 85,478,536 shares of
JSC RUSAL Krasnoyarsk Federation 1992 RUB20 each 100.0% Smelting
JSC RUSAL Russian 53,997,170 shares of
Novokuznetsk Federation 26 June 1996 RUB0.1 each 100.0% Smelting
208,102,580,438
Russian shares of RUB0.068
JSC RUSAL Sayanogorsk Federation 29 July 1999 each 100.0% Smelting
Russian 15 November charter fund of
RUSAL RESAL LLC Federation 1994 RUB67,706,217.29 100.0% Processing
Russian 29 December 59,902,661,099 shares
JSC RUSAL SAYANAL Federation 2001 of RUB0.006 each 100.0% Foil
CJSC RUSAL 36,699,295 shares of
ARMENAL Armenia 17 May 2000 AMD 1,000 each 100.0% Foil
Russian charter fund of Repairs and
RUS-Engineering LLC Federation 18 August 2005 RUB 1,751,832,184 100.0% maintenance
Russian 25 December 23,124,000,000 shares Holding
JSC Russian Aluminium Federation 2000 of RUB1 each 100.0% company
Rusal Global Management charter fund of Management
B.V. Netherlands 8 March 2001 EUR25,000 100.0% company
JSC United Company Russian 163,660 shares of
RUSAL Trading House Federation 15 March 2000 RUB100 each 100.0% Trading
1,000 shares of USD
Rusal America Corp. USA 29 March 1999 0.01 each 100.0% Trading
1 share with nominal
RS International GmbH Switzerland 22 May 2007 value of CHF 20,000 100.0% Trading

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

Place of Particulars
incorporation and Date of of issued and Attributable Principal
Name operation incorporation paid up capital equity interest activities
Capital quota of
Rusal Marketing GmbH Switzerland 22 May 2007 CHF2,000,000 100.0% Trading
27 October 978,492,901 shares of
RTI Limited Jersey 2006 USD1 each 100.0% Trading
Alumina & Bauxite British Virgin 231,179,727 shares of
Company Limited Islands 3 March 2004 USD1 each 100.0% Trading
Russian 13 February 4,303,000,000 shares
JSC Komi Aluminii Federation 2003 of RUB1 each 100.0% Alumina
Russian 29 December 44,500,000 shares of
JSC Bauxite-Timana Federation 1992 RUB10 each 100.0% Bauxite mining
JSC Severo-Uralsky Russian 24 October 10,506,609 shares of
Bauxite Mine Federation 1996 RUB275.85 each 100.0% Bauxite mining
Primary
aluminum and
Russian 26 September 2,542,941,932 shares alumina
JSC RUSAL Ural Federation 1996 of RUB1 each 100.0% production
Aluminum
Russian 20 October charter fund of powders
SUAL-PM LLC Federation 1998 RUB56,300,959 100.0% production
Russian 320,644 shares of Silicon
JSC Kremniy Federation 3 August 1998 RUB1,000 each 100.0% production
RUSAL-Kremniy-Ural Russian charter fund of Silicon
LLC Federation 1 March 1999 RUB8,763,098 100.0% production
UC RUSAL Alumina 1,000,000 shares of
Jamaica Limited Jamaica 26 April 2001 JMD1 each 100.0% Alumina
Kubikenborg Aluminium 26 January 25,000 shares of SEK
AB Sweden 1934 1,000 each 100.0% Smelting
RFCL Sarl Luxembourg 13 March 2013 90,000,000 RUB 100.0% Finance services
Holding and
International LLC Russian 06 December 215,458,134,321 investment
AKTIVIUM Federation 2019 shares of RUB1 each 100.0% company
22 September 1,000 shares of EUR2
Aughinish Alumina Ltd Ireland 1977 each 100.0% Alumina
Russian 26 December
LLC RUSAL Energo Federation 2005 715,000,000 RUB 100.0% Electric power
Limerick Alumina 54,019,819 shares of
Refining Ltd. Ireland 30 March 1995 USD1 each 100.0% Alumina
Russian 26 December 1,000,000 shares of Management
JSC RUSAL Management Federation 2018 RUB1 each 100.0% company
Russian 11 September Charter fund of RUB
RUSAL Taishet LLC Federation 2006 12,158,878,747.58 100.0% Smelting
UC RUSAL Anode Plant Russian Charter fund of
LLC Federation 09 April 2008 RUB1,064,280,000 100.0% Anodes

Trading entities are engaged in the sale of products to and from the production entities.

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 United Company RUSAL Plc
Notes to the Consolidated Financial Statements for the year ended 31 December 2019

27 Statement of Financial Position of the Company

as at 31 December 2019
31 December 31 December
2019 2018
USD million USD million
ASSETS
Non-current assets
Investments in subsidiaries 19,449 20,468
Loans to related parties 1,346 1,845
Total non-current assets 20,795 22,313
Current assets
Loans to related parties 1,050 1,416
Other receivables 343 911
Cash and cash equivalents 23 186
Total current assets 1,416 2,513
Total assets 22,211 24,826
EQUITY AND LIABILITIES
Equity
Share capital 152 152
Reserves 15,743 14,152
Total equity 15,895 14,304
Non-current liabilities
Loans and borrowings 6,188 6,816
Total non-current liabilities 6,188 6,816
Current liabilities
Loans and borrowings 92 2,355
Trade and other payables 36 1,322
Other current liabilities - 29

Total current liabilities 128 3,706

Total liabilities 6,316 10,522
Total equity and liabilities 22,211 24,826
Net current assets / (liabilities) 1,288 (1,193)
Total assets less current liabilities 22,083 21,120

28 Events subsequent to the reporting date

The first months of 2020 have seen significant global market turmoil triggered by the outbreak of the
coronavirus. Together with other factors, this has resulted in a sharp decrease in the oil price and the
stock market indices, as well as a depreciation of the Russian Rouble. At the moment the Group is
assessing the impact of these market developments for its financial position, financial performance
and future cash flows.

89