PhosAgro : Consolidated Interim Condensed Financial Statements for the three months ended 31 March 2024

PJSC "PhosAgro"

Consolidated Interim Condensed Financial Statements

for the three months ended 31 March 2024

PJSC "PhosAgro"

Contents
Report on Review of Consolidated Interim Condensed Financial Statements
Consolidated Interim Condensed Statement of Profit or Loss and Other Comprehensive Income	..............1
Consolidated Interim Condensed Statement of Financial Position	2
Consolidated Interim Condensed Statement of Cash Flows	3
Consolidated Interim Condensed Statement of Changes in Equity	4
Notes to the Consolidated Interim Condensed Financial Statements
1	Background	5
2	Basis of preparation	6
3	Fair value determination	6
4	Seasonality	7
5	Revenues	7
6	Cost of Group products sold	8
7	Administrative and selling expenses	8
8	Taxes, other than income tax	9
9	Other expenses, net	9
10	Finance income and finance costs	9
11	Income tax expense	9
12	Property, plant and equipment	10
13	Right-of-use assets	11
14	Other non-current assets	12
15	Other financial assets	12
16	Inventories	12
17	Trade and other receivables	13
18	Cash and cash equivalents	13
19	Earnings per share	14
20	Loans and borrowings	14
21	Lease liabilities	16
22	Trade and other payables	17
23	Commitments	17
24	Related party transactions	17
25	Foreign currency risk	18

Joint-Stock Company	Ferro-Plaza Business Centre,
"Technologies of Trust - Audit"	14/3 Krzhizhanovsky street, bldg. 5/1,
("Technologies of Trust - Audit" JSC)	Akademichesky municipal district,
	Moscow, Russian Federation, 117218
www.tedo.ru	[phone]

Report on Review of Consolidated Interim Condensed Financial Statements

To the Shareholders and Board of Directors of Public Joint-Stock Company "PhosAgro":

Introduction

We have reviewed the accompanying consolidated interim condensed statement of financial position

of Public Joint-Stock Company "PhosAgro" and its subsidiaries (together - the "Group") as at 31 March 2024 and the related consolidated interim condensed statements of profit or loss and other comprehensive income, cash flows and changes in equity for the three-month period then ended, and the related explanatory notes.

Management is responsible for the preparation and presentation of these consolidated interim condensed financial statements in accordance with International Accounting Standard 34, "Interim Financial Reporting" (hereinafter - "IAS 34"). Our responsibility is to express a conclusion on these consolidated interim condensed financial statements based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of consolidated interim condensed financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for qualified conclusion

Management of the Group has not disclosed segment information in the notes to the consolidated interim condensed financial statements as required by paragraph 16А (g) of IAS 34 for the three months ended 31 March 2024 and for the comparative period three months ended 31 March 2023.

Considering the undisclosed segment information required by paragraph 16А (g) of IAS 34 is unduly voluminous, presenting this undisclosed information in our report on review of consolidated interim condensed financial statements is not practicable.

Qualified conclusion

Based on our review, except for the effects of the matter described in the Basis for qualified conclusion section of our report, nothing has come to our attention that causes us to believe that the accompanying consolidated interim condensed financial statements are not prepared, in all material respects, in accordance with IAS 34.

27 May 2024

Moscow, Russian Federation

Fegetsin Alexey Iakovlevich is authorised to sign on behalf of the General Director of Joint-Stock Company "Technologies of Trust - Audit" (Principal Registration Number of the Record in the Register of Auditors and Audit Organizations (PRNR) - 12006020338), certified auditor (PRNR - 21906101957)

PJSC "PhosAgro"

Consolidated Interim Condensed Statement of Financial Position as at 31 March 2024

		31 March	31 December
RUB million	Note	2024	2023
Assets
Property, plant and equipment	12	316,375	308,663
Advances issued for property, plant and equipment		10,286	10,337
Deferred tax assets		10,102	9,751
Other non-current assets	14	8,948	8,262
Non-current spare parts		8,583	8,059
Right-of-use assets	13	7,244	7,240
Catalysts		2,917	2,667
Intangible assets		2,486	2,773
Investments in associates and joint ventures		693	636

Non-current assets		367,634	358,388
Trade and other receivables	17	76,309	66,362
Inventories	16	49,911	48,468
Cash and cash equivalents	18	21,638	29,163
VAT and other taxes receivable		10,236	10,119
Other financial assets	15	7,599	5,083
Income tax receivable		1,728	1,703
Security payment for windfall tax	1 (b)	-	6,355
Current assets		167,421	167,253
Total assets		535,055	525,641
Equity
Share capital		372	372
Share premium		7,494	7,494
Retained earnings		163,477	144,658
Actuarial losses		(1,003)	(1,003)
Equity attributable to shareholders of the Company		170,340	151,521
Equity attributable to non-controlling interests		19	84
Total equity		170,359	151,605
Liabilities
Loans and borrowings	20	125,238	161,710
Deferred tax liabilities		12,776	13,603
Lease liabilities	21	2,906	2,818
Defined benefit obligations		1,134	1,129
Non-current liabilities		142,054	179,260
Loans and borrowings	20	156,053	86,429
Trade and other payables	22	44,864	42,653
Dividends payable		17,141	54,919
VAT and other taxes payable		3,045	2,799
Lease liabilities	21	1,280	1,413
Income tax payable		259	208
Windfall tax payable	1 (b)	-	6,355
Current liabilities		222,642	194,776
Total equity and liabilities		535,055	525,641

The consolidated interim condensed statement of financial position is to be read in conjunction with the notes to, and forming part of, the consolidated interim condensed financial statements set out on pages 5 to 18.

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PJSC "PhosAgro"

Consolidated Interim Condensed Statement of Cash Flows for the three months ended 31 March 2024

		Three months ended 31 March
RUB million	Note	2024	2023
Cash flows from operating activities
Operating profit		29,805	47,569
Adjustments for:
Depreciation and amortisation	6, 7	9,255	7,826
Loss on disposal of property, plant and equipment and intangible assets	9	36	94
Operating profit before changes in working capital		39,096	55,489
Increase/ (decrease) in trade and other payables1		2,252	(9,235)
(Increase)/ decrease in trade and other receivables1		(10,416)	12,060
(Increase)/ decrease in inventories, catalysts and non-current spare
parts		(2,132)	428
Cash flows from operations before income tax and interest paid		28,800	58,742
Income tax paid		(6,321)	(3,234)
Finance costs paid		(2,773)	(1,605)
Cash flows from operating activities		19,706	53,903
Cash flows from investing activities
Finance income		529	252
Acquisition of property, plant and equipment and intangible assets		(15,191)	(10,433)
Loans issued		(2,463)	1
Borrowing cost capitalised paid	12	(774)	(248)
Advances issued for right-of-use assets		-	(63)
Other		(6)	7
Cash flows used in investing activities		(17,905)	(10,484)
Cash flows from financing activities
Proceeds from borrowings, net of transaction costs	20	57,894	14,773
Repayment of borrowings	20	(29,231)	(8,131)
Refund of dividends paid2		2	7,143
Dividends paid to shareholders of the Company		(37,780)
Lease payments	21	(493)	(332)
Cash flows (used in)/ from financing activities		(9,608)	13,453
Net (decrease)/ increase in cash and cash equivalents		(7,807)	56,872
Cash and cash equivalents at 1 January		29,163	13,356
Effect of exchange rates fluctuations		282	2,130
Cash and cash equivalents at 31 March	18	21,638	72,358

1. Changes in trade and other receivables and changes in trade and other payables include effect of foreign exchange differences from operating activities.
2. The Group received cash refund from depositories paid as dividends to parties who were entitled to receive them, but didn't receive dividends due to reasons beyond the depositories' control.

The consolidated interim condensed statement of cash flows is to be read in conjunction with the notes to, and forming part of, the consolidated interim condensed financial statements set out on pages 5 to 18.

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PJSC "PhosAgro"

Consolidated Interim Condensed Statement of Changes in Equity for the three months ended 31 March 2024

		Attributable to shareholders of the Company
						Attributable
						to non-
	Share	Share	Retained	Actuarial		controlling
RUB million	capital	premium	earnings	losses	Total	interests	Total equity
Balance at 1 January 2023	372	7,494	190,664	(968)	197,562	158	197,720
Total comprehensive income
Profit for the period	-	-	28,055	-	28,055	4	28,059
Transactions with owners recognised directly in equity
Dividends	-	-	(60,218)	-	(60,218)	-	(60,218)
Balance at 31 March 2023	372	7,494	158,501	(968)	165,399	162	165,561
Balance at 1 January 2024	372	7,494	144,658	(1,003)	151,521	84	151,605
Total comprehensive income/ (loss)
Profit/ (loss) for the period	-	-	18,762	-	18,762	(8)	18,754
Transactions with owners recognised directly in equity
Decrease of non-controlling interests in a subsidiary	-	-	57	-	57	(57)	-
Balance at 31 March 2024	372	7,494	163,477	(1,003)	170,340	19	170,359

The consolidated interim condensed statement of changes in equity is to be read in conjunction with the notes to, and forming part of, the consolidated interim condensed financial statements set out on pages 5 to 18.

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PJSC "PhosAgro"

Notes to the Consolidated Interim Condensed Financial Statements for the three months ended 31 March 2024

1 BACKGROUND

1. Organisation structure and operations

PJSC "PhosAgro" (the "Company" or the "Parent") is a public joint stock company registered in accordance with Russian legislation. PJSC "PhosAgro" and its subsidiaries (together referred to as the "Group") comprise Russian legal entities. The Company was registered in October 2001. The Company's address is Leninsky prospekt 55/1 building 1, Moscow, Russian Federation, 119333.

The Group's principal activity is production of apatite concentrate and mineral fertilisers at plants located in the cities of Kirovsk (Murmansk region), Cherepovets (Vologda region), Balakovo (Saratov region) and Volkhov (Leningrad region), and their distribution across the Russian Federation and abroad.

As at 31 March 2024 and at 31 December 2023, the Company's major shareholder is the entity registered in Russia - ILLC Adorabella holding approximately 23.3% of the ordinary shares. As of 31 March 2024, and 31 December 2023, the Parent does not have the ultimate controlling party in accordance with the definitions of control described in IFRS 10 Consolidated financial statements.

1. Russian business environment

The Group's operations are primarily located in the Russian Federation. Consequently, the Group is exposed to the economic and financial conditions of the Russian Federation, which display certain characteristics of an emerging market. Its economy is particularly sensitive to oil and gas prices. The legal, tax and regulatory frameworks continue development, and are subject to varying interpretations and frequent changes. The Russian economy continues to be negatively impacted by ongoing political tension in the region and international sanctions against certain Russian companies and individuals.

Geopolitical tension caused by the Ukrainian case in February 2022 continued in 2024. Geopolitical situation escalation resulted in significant exchange rates fluctuations and increased volatility in financial and commodity markets. Sanctions and restrictions have been and continue to be imposed towards a number of Russian entities such as access termination to European and USA financial markets, SWIFT international system and others. Price cap on Russian oil and gas and embargo on Russian petrochemicals were introduced. There is no way to determine how long the increased volatility will continue and when the above factors will stabilise. The future effects of current economic situation and the above measures are difficult to predict. Management's current expectations and estimates could differ from actual results.

The Russian Government Resolution that came into effect starting from 2023 introduced export duties on mineral fertilisers followed by the subsequent changes to the customs duty calculation method and rates. From 1 October 2023 to 31 December 2024, the following customs duty rates depending on the official exchange rate of US dollar to Russian Rouble set by the Central Bank of Russia are applied:

• on nitrogen-based fertilisers - 7% of their customs value, but not less than RUB 1,100 per tonne, if the average US dollar exchange rate over the monitoring month is below RUB 80, or 10% of their customs value, but not less than RUB 1,100 per tonne, if the average US dollar exchange rate over the monitoring month is above RUB 80;

• on phosphate-based and compound fertilisers - 7% of their customs value, but not less than RUB 2,100 per tonne, if the average US dollar exchange rate over the monitoring month is below RUB 80, or 10% of their customs value, but not less than RUB 2,100 per tonne, if the average US dollar exchange rate over the monitoring month is above RUB 80.

On 4 August 2023, the President of the Russian Federation signed Federal Law No. 414-FZOn Excess Profits Tax (the so-called "Windfall Tax") effective from 1 January 2024. The law introduces 10% tax rate applied to the excess of the arithmetic average profits for 2021-2022 over the arithmetic average profits for 2018-2019. In November 2023, the Group made a windfall tax security payment. As at 31 December 2023, the Group's windfall tax liability calculated at 5% tax rate considering security payment of RUB 6,355 million. The security payment and liability for windfall tax were reflected in the consolidated statement of financial position as at 31 December 2023. In January 2024, the Group exercised its right to a tax deduction for the above security payment, and offset asset and liability for this tax.

Management of the Group has considered events and conditions that could give rise to material uncertainties and concluded that the range of possible outcomes does not cast significant doubt over the Group's ability to continue as a going concern.

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PJSC "PhosAgro"

Notes to the Consolidated Interim Condensed Financial Statements for the three months ended 31 March 2024

2 BASIS OF PREPARATION

1. Statement of compliance

The consolidated interim condensed financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting.

The Group additionally prepared consolidated interim condensed financial statements in the Russian language in order to comply with the securities market legislation.

These consolidated interim condensed financial statements do not contain all the information required for presentation in a complete set of IFRS financial statements and therefore should be read in conjunction with the consolidated annual financial statements of PJSC "PhosAgro" for the year ended 31 December 2023.

1. Significant accounting policies

The accounting policies used for the preparation of these consolidated interim condensed financial statements are consistent with those applied in the annual consolidated financial statements as of and for the year ended 31 December 2023.

1. New and amended standards adopted by the Group

A number of new and amended standards came into force in the current reporting period. However, the Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.

1. Functional currency

The national currency of the Russian Federation is the Russian Rouble ("RUB"), which is the functional currency of the Parent and its subsidiaries.

1. Presentation currency

These consolidated interim condensed financial statements are presented in RUB. All financial information presented in RUB has been rounded to the nearest million, except per share amounts.

3 FAIR VALUE DETERMINATION
When measuring a fair value of an asset or	a liability, the Group uses market	observable data
as far as possible. Fair values are categorised	into different levels of a fair value	hierarchy based

on the inputs used in the valuation techniques as follows:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: inputs other than quoted prices included in Level 1 that are observable, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
• Level 3: inputs for the asset and liability that are not based on observable market data (unobservable inputs).

If inputs used to measure a fair value of an asset or a liability might be categorised into different levels of fair value hierarchy, then fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

Fair values have been determined for measurement and / or disclosure purposes based on the methods described below. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

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PJSC "PhosAgro"

Notes to the Consolidated Interim Condensed Financial Statements for the three months ended 31 March 2024

3 FAIR VALUE DETERMINATION (CONTINUED)

1. Financial assets and liabilities measured at amortised cost

The fair value of financial assets and liabilities represented by short-term loans issued, trade and other receivables (except for receivables measured at fair value under provisional pricing agreements), cash and cash equivalents, trade and other payables is categorised into level 3 of fair value hierarchy and approximate their carrying amounts at the reporting date.

Bonds' fair value is measured based on quoted market prices for disclosure purposes and categorised into level 1 of the fair value hierarchy. Loans and borrowings and non-current receivables fair value is categorised into level 3 of the fair value hierarchy.

1. Financial instruments measured at fair value

The fair value of investments measured at fair value through profit or loss and receivables under provisionally priced sales agreements measured at fair value through profit or loss is determined using the valuation techniques and categorised into level 3 of the fair value hierarchy.

Investments value measured at fair value through profit or loss is estimated based on the model of discounted cash flows from the investee's operating activities.

Receivables fair value under provisionally priced sales agreements is calculated based on mineral fertiliser market prices expected at the date when the price is finalised. These assumptions are based on consensus prices forecasts prepared by independent analytical agencies, adjusted in accordance with price calculation formulas specified in existing delivery contracts.

4 SEASONALITY

The Group is subject to certain seasonal fluctuations in fertiliser demand due to the timing of fertiliser application and, as a result, fertiliser purchases by farmers. This normally results in increase of advances received from local customers at the year-end. However, the effect of seasonality on the Group's revenue is partially offset by the fact that the Group sells its fertilisers globally and fertiliser application and purchases vary by region.

The Group's costs are generally stable throughout the year, however several maintenance activities undertaken at the Group's production facilities may not be evenly spread.

5 REVENUES

	Three months ended 31 March
RUB million	2024	2023
Phosphate-based and nitrogen-based products	116,454	107,887
Other	2,818	8,291
Revenues	119,272	116,178

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