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INТEGRATED
REPORT 2021
Contents
Strategic
Report
34 Chairman’s statement
38 CEO’s statement
42 Business environment
46 Market overview
54 The Company’s role
in the industry
56 Strategy
68 Strategic risks
4 About this Report
7 Material topics
9 Stakeholder engagement
Company Profile
14 Our history
16 Key activities in 2021
18 Key highlights
20 Our mission
and values
24 Business model
26 Geographical footprint
28 Investment case
and credit ratings
Performance
Review
80 Financial performance
88 Operational
performance
93
Customers
and product
management
104 Research
and education
114 Supply chain
122 People development
138 Industrial safety
156 Environmental review
190 Contributing to local
communities
PhosAgro
is a vertically integrated Russian company and one of the
world’s leading producers of phosphate-based fertilizers.
For interactive version
of the report, please visit
www.phosagro.com
Corporate
Governance
202 Chairman’s statement
Corporate
governance
framework
204
212 Board of Directors
240 Executive bodies
246 Corporate controls
252 Ethical practices
262 Remuneration report
Share
Capital
268 Ownership structure
269 Share performance
270 Debt management
271 Analyst coverage
271 Dividend policy
Relationship with
shareholders and
investors
273
Appendices
(stand-alone document)
Additional
Information
278 Financial statements
Changes in the status
of conformity with the
Corporate Governance
Code (CGC) principles
in 2021
329 Independent limited
assurance report
326
334 GRI content index
343 SASB content index
345 TCFD
recommendations
346 Glossary
347 Contacts
About this Report
GRI 2-1, 2-3, 2-2
Letter from the CEO
The report was pre-approved by PhosAgro’s
Board of Directors on 03 March 2022
(Minutes dated 05 March 2022).
It is our pleasure to welcome you to the
2021 integrated Annual Report (the
“Report”) of PJSC PhosAgro (PhosAgro).
PhosAgro is a vertically integrated Russian
company and one of the world’s leading
producers of phosphate-based fertilizers.
Boundaries
This Report provides insight into the
performance of parent company PhosAgro
and its subsidiaries (jointly referred to
as “PhosAgro Group”, the “Group”, or
the “Company”). The key subsidiaries
of the Group and PhosAgro’s stake in
these subsidiaries are presented in the
Group’s 2021 IFRS consolidated financial
statements. There have been no significant
changes to the Group’s size, structure or
ownership during the reporting period.
The boundaries of the Group companies
covered in this Report differ from those
Standards
GRI 2-5
The Company maintains an annual
reporting cycle, with the previous
report released on 28 April 2021.
The Report highlights how we
integrate ESG principles into
everything we do. The Company’s
financial reporting follows the
annual cycle too.
The cover of the Report symbolises
the scientific approach, a man's
knowledge, intelligence and
strength to till the land and grow
crops on fertile land.
The picture of a hand is also
a symbol of the so-called "carbon
handprint", that is, of all the
positive actions a person takes
to reduce their carbon footprint.
in consolidated financial statements when it
comes to specific non-financial disclosures.
To ensure compliance with the materiality
principle, we determined such boundaries in
a way that this Report describes all material
aspects of PhosAgro Group.
Boundary 2: PhosAgro and Apatit, including
its branches and standalone business units.
Boundary 3: Apatit, including its branches
and standalone business units.
For more information on specific disclosures
The data disclosed in this Report includes
information on:
and their boundaries used in this Report, see
the GRI Indicator section on page 334.
Boundary 1: PhosAgro and companies that
are part of the group to which PhosAgro
belongs (the scope of disclosure in IFRS
consolidated financial statements).
The following sources of guidance and
requirements were used when drafting this
Report:
Joint-Stock Companies of Non-Financial
Information Pertaining to Their Activities
No. IN-06-28/49 dated 12 July 2021,
> the Bank of Russia’s Regulation on
> the Listing Rules of the Moscow Exchange,
Disclosure of Information by the Issuers of
Issue-Grade Securities No. 714-P dated
27 March 2020,
> the Bank of Russia's Letter No. 06-52/2463
On Corporate Governance Code dated
10 October 2014,
> the Bank of Russia's Letter On the Disclosure
in the Annual Report of a Public Joint-Stock
Company of a Report on Compliance with
the Principles and Recommendations of the
Code of Corporate Governance No. IN-06-
28/102 dated 27 December 2021,
> the Bank of Russia’s Information Letter
on Recommendations on Disclosure by
> the Guide to Listing of the London Stock
Exchange,
> the AA 1000 and ISO 26000 standards,
> CDP – Carbon Disclosure Project standards,
> the Value Reporting Foundation,
> the Task Force on Climate-Related Financial
Disclosures (TCFD).
information disclosures prepared under
the related GRI Standards (the “sample
information”) has been assured by AO
PricewaterhouseCoopers Audit (AO PwC
Audit) in accordance with the International
Standard on Assurance Engagements (ISAE)
3000 (Revised), Assurance Engagements
Other than Audits or Reviews of Historical
Financial Information. The Independent Limited
Assurance Report and the GRI Content Index are
both available in the Report.
Financial results in the Report have been disclosed
based on the IFRS consolidated financial
statements of the Group for 2021 audited by
AO PwC Audit in accordance with the
International Standards on Auditing.
The Company has reported in accordance with
the GRI Universal Standards which will take
effect from January 2023. Appropriateness
of the selected qualitative and quantitative
The Company takes into account and
implements global best practices
in sustainable development.
stages. In March–April, we began a trial of the new
+10 m level at the Kirovsky mine. It is expected
to compensate for the levels being shuttered and
even increase the mine’s overall output.
Contracts for most materials and equipment
necessary to carry out major repairs were
made in advance. In the near future, we will do
an additional analysis of feasibility and potential
timelines for new investment projects.
PhosAgro does not plan to optimise headcount,
and all our social and charitable projects will carry
on. Coupled with February’s salary indexation,
this will go a long way towards keeping the people
socially protected and ensuring stability in our
regions of operation.
However, Russian businesses may be experiencing
a negative knock-on effect from the US, EU,
and other sanctions. The Russian economy’s
prolonged exposure to such restrictions might
result in a material impact on financial and
logistics processes and domestic customers’
ability to pay. It may also become harder for us
to raise capital.
Overall, PhosAgro is going to continue delivering
on its commitments to the personnel, regions
of operation, creditors, and partners both
in Russia and abroad.
Mikhail Rybnikov
CEO and Chairman
of the Management Board
from 11 March 2022
15 April 2022
PhosAgro’s 2021 Annual Report was pre-
approved by the Board of Directors on 3 March
2022. The end of February brought a set of new,
unprecedented challenges for our Company.
From 10 to 14 March 2022, four directors left
their positions: Irina Bokova, Andrey A. Guryev,
Andrey G. Guryev, and Xavier Rolet. Andrey A.
Guryev also stepped down as PhosAgro’s CEO
and Chairman of the Management Board.
We are revising our market outlook.
Having been plunged into this challenging
macroeconomic environment, we are looking
towards our high degree of vertical integration
and self-sufficiency in raw materials to pull us
through.
This is what enables us to maintain business
continuity and stable supplies amid the growing
global fertilizer shortage.
At the same time, we are keeping our finger on
the pulse, and should any new restrictions be
introduced in our markets, we will be able to
promptly redirect our exports elsewhere, as well
as increase supplies to the priority domestic
market.
A highly diversified debt portfolio and
comfortable net debt to EBITDA ratio of 0.8x
(as at the end of 2021) underlie the Company’s
financial resilience. No big payments on our
corporate debt are scheduled for this year, and
we do not plan any new borrowings.
PhosAgro’s revenue is largely FX-denominated,
which represents a hedge against risks. We also
consider our rouble liquidity to be sufficient for
sustaining the Company’s operations.
Current investment projects, in particular, a new
plant being built in Volkhov, are in their final
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About this Report
Letter from the Chair of the Board of Directors’
Sustainable Development Committee
In this report, we have endeavoured to
paint as comprehensive a picture of
PhosAgro in 2021 as possible. In doing
so, we strive to match the holistic
approach the Board of Directors and
management takes to steering this
one-of-a-kind company. Indeed, in
a business environment defined by the
persisting COVID-19 pandemic and
great uncertainties, highly changeable
domestic and global legislation, and
increasing public attention to food
security, climate change and corporate
social responsibility, it would be nigh
impossible to remain successful without
adopting such a holistic approach.
This year, the Company celebrated its
20th anniversary. It is an important
milestone, where we, on the one hand,
cast our minds back and take stock,
while, on the other, look boldly to the
future and set new ambitious goals.
daily hard work you put in to ensure
the Company’s sustainable development,
which in turn trickles down to all
stakeholder communities and regions.
In the end, only you decide whether we
reach our environmental, climate and
social goals. And if 2021’s impressive
results are anything to go by, it appears
you have made your decision.
In keeping with this past-conscious and
future-forward ideology, we have chosen
to look at all of PhosAgro’s activities
through the lens of the product life cycle,
much in tune with our “from mine to
plate” principle.
When disclosing the Company’s
operational results, we have done our
best to comply with the TCFD non-
financial disclosure principles, such
as strategy, governance, risks and
opportunities, performance and metrics.
This approach has enabled us to take
a 360-degree view of our value chain
make-up and its links, as well as to show
how effective corporate governance
facilitates internal synergies.
On behalf of the Board of Directors,
I would like to thank PhosAgro Group’s
employees and managers for the
Irina Bokova
Chair of the Board of Directors’ Sustainable
Development Committee from May 2019
to 15 March 2022
Material topics
GRI 3-1, 3-2
Defining material topics:
approach and steps
In 2021, we revised our approach
to identifying material topics to be
disclosed in an integrated report.
We used our previous experience of
working with stakeholders and actively
built on it.
We managed to draft a more relevant
list of material topics as we included
more ESG ratings in our score analysis,
obtained a Second Party Opinion
(SPO) based on five ESG indicators
from a leading sustainability agency,
worked to advance the UN Sustainable
Development Goals (SDGs) and the UN
Global Compact, and identify any new
non-financial disclosure requirements.
Evolution of our approach to selecting material topics
Source of data for selecting
material topics
Stakeholder surveys
(within the Company)
2019
2020
2021
Conducting a survey of the
management on significant
operational aspects that has
an impact on the society
and the environment
Conducting a survey of the
management on significant
operational aspects that has
an impact on the society and
the environment
Conducting a survey of the
management on significant
operational aspects that has an impact
on the society and the environment
Stakeholder
surveys (outside
the Company)
Conducting a survey of key
stakeholders to find out
how important and relevant
these topics are for them
Conducting a survey of key
stakeholders to find out how
important and relevant these
topics are for them
Conducting a survey of key
stakeholders to find out how important
and relevant these aspects of the
Company’s operations are for them
Investor material
topic surveys
None
Analysis of global
and local ESG ratings
and rankings
None
Conducting a survey of
investors on a list of ESG-
related questions jointly
with IR
Obtaining a five-component SPO to
map out KPIs as part of the preparation
for issuing green finance instruments
Planning a survey of investors on
a list of ESG-related questions in
cooperation with IR for 2022
Analysing reports and
questionnaires of global
ESG rankings (MSCI ESG
Research, Sustainalytics,
CDP Climate Change)
Expanding the range of global ESG
ranking questionnaires (MSCI ESG
Research, Sustainalytics, CDP Climate
Change, CDP Water Security, Standard
& Poor’s Corporate sustainability
assessment (S&P CSA), RAEX)
Analysis and
prioritising
of the UN SDGs
None
Setting UN SDG priorities
on a PwC-led project in late
2020
Analysing the activities to advance
the UN SDGs, revising their scope,
and conducting social responsibility
research together with the Donors
Forum
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About this Report
Our work to define material topics resulted
in a materiality matrix based on the entire
range of stakeholder interests and opinions
related to the Company’s disclosures.
A disclosure approach focused on
a product’s lifecycle enables us to provide
the most complete and well-structured
information about the Company’s
performance in 2021, while maintaining
a balance between the interests of diverse
stakeholder groups.
For more information, see the GRI Indicator section
on page 334
Key changes in 2021 reporting that
deserve a special mention
s
n
o
i
s
i
c
e
d
d
n
a
s
t
n
e
m
s
s
e
s
s
a
r
e
d
o
h
e
k
a
t
s
n
o
e
c
n
e
u
fl
n
l
I
h
g
H
i
207
304
417
418
304
417
402
415
406
405
414
410
301
408
409
407
416
411
206
w
o
L
Low
413
204
413
204
205
201
403
205
404
401
203
303 306
308 302
202
305
305
403
303
401
404
202
302
High
1Disclosure of our sustainability
metrics in this Report is prepared
in accordance with the revised GRI
Universal Standards early adopted by
the Group. In line with the revised GRI
requirements, we excluded three GRI
standards from the list of material topics:
> Environmental Compliance (GRI 307) and
Socioeconomic Compliance (GRI 419)
were replaced with Compliance with
Laws and Regulations (GRI 2-27) which
became a part of General (Universal)
GRI 2 standard wich is mandatory for
disclosure;
> Human Rights Assessment (GRI 412) is
has been covered by general (universal)
GRI standards.
As these standards are no longer subject
to the materiality assessment process, we
did not include their respective indicators
in our matrix, but disclosed them in the
Report.
2 40 GRI indicators underwent external
independent limited assurance
procedures by AO PwC Audit.
Significance of economic, environmental and social impacts, including human rights impacts
Material topics
Less relevant topics
Economic Category
206
Anti-competitive behaviour
Economic performance
201
202 Market presence
203
204
205
207
Indirect economic impacts
Procurement practices
Anti-corruption
Taxes
Energy
Environmental Category
302
303 Water and waste water
304
305
Biodiversity
Emissions
306 Waste
308
Supplier environmental
assessment
Social Category
401
403 Occupational health and
Employment
safety
Training and education
Local communities
404
413
417 Marketing and labelling
301 Materials
402
Labour/management relations
405 Diversity and equal opportunity
406 Non-discrimination
407
408
409
410
411
414
415
416
418
Freedom of association and
collective bargaining
Child labour
Forced or compulsory labour
Security practices
Rights of indigenous peoples
Supplier social assessment
Public policy
Customer health and safety
Customer privacy
Questions and requests
from interested parties can
be sent to ir@phosagro.ru
Stakeholder engagement
Approach to stakeholder engagement;
identifying and selecting stakeholders
GRI 2-29
Wherever we operate, PhosAgro is
an integral part of a community that
includes businesses, government
agencies, NGOs and individuals –
locally, globally and nationwide.
Our ability to listen and understand,
be quick in our response, and
effectively work with a wide range of
stakeholders is key to the approach
we use in doing business. It provides
a solid foundation for delivering on
strategic SDGs.
For us, engagement with stakeholders
begins when we realise our common
goals and interests. A stakeholder
is a person or organisation that
has an interest in what we do.
Stakeholders also include persons or
organisations that may be affected
by our activities or can influence our
business decisions.
Understanding stakeholder views
facilitates many processes. It helps
us develop new products for our
customers, raise awareness among
farmers about modern agricultural
practices and techniques, work with
researchers to present ambitious
innovative projects connecting
science and business and, most
importantly, make informed practical
choices to improve economic, social
and environmental conditions where
the Company can make a difference.
PhosAgro’s framework for stakeholder
engagement management covers
relevant areas on all tiers of
corporate governance, with the
Board of Directors as the supreme
body responsible for this process.
The Sustainable Development
Committee considers matters
related to stakeholder engagement
at least twice a year. On the day-
to-day level, this matter is handled
by dedicated functions that have
annual plans based on an analysis of
material topics, survey results, known
expectations and other factors.
In our engagement with our
stakeholders, we strive to be
constructive, open and principled.
Thus, we work hard to build
relationships with people at all
government levels in the countries
where we operate and ensure that
we strictly comply with all applicable
regulatory requirements.
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About this Report
For more details, see page 273
Investment and finance community
The core of our business philosophy is our
commitment to creating shareholder value and
ensuring sustainably high returns on investment,
including regular dividend and coupon payments,
strict compliance with our loan obligations, and
a responsible financial policy.
Company's
stakeholders
For more details, see page 190
Regional governments and local communities
We are a major taxpayer whose payments to regional
and local budgets have a direct impact on the
socioeconomic environment across our footprint.
As a responsible long-term partner, we also allocate
significant funds to support local communities,
contribute to charitable causes and develop social
infrastructure.
For more details, see page 114
Suppliers and contractors
A socially responsible and efficient supply chain
is a key value creation tool in today’s economy.
Our priority is to purchase goods and services from
responsible suppliers and contractors who provide
top quality on the most attractive terms and adhere
to responsible business principles. We also place
a special emphasis on expanding our cooperation with
local suppliers to maximise the benefits we can bring
to their regions.
For more details, see page 93
Consumers
We are committed to building mutually beneficial
long-term relationships with our customers by gaining
a deep understanding of their needs, using advanced
information and education technologies and
providing advisory services. Other crucial qualities we
seek to demonstrate are flexibility and sympathy amid
market volatility. In July 2021, for example, PhosAgro
announced a decision not to change its mineral
fertilizer prices.
Investment
and finance
community
Employees
and trade unions
Regional
governments
and local communities
International
organisations
Suppliers
and contractors
Research
community
Consumers
Business
and industry
associations
For more details, see page. 122
Employees and trade unions
PhosAgro has one of the most professional and
successful teams in the industry. Our employees
and their families can expect not only safe working
conditions without injuries or health hazards, but also job
security, competitive pay, professional development and
access to social programmes matching PhosAgro’s level.
For more details, see page 112
International organisations
As a leading global producer of fertilizers, PhosAgro
cannot afford to, and will not, stand on the sidelines
when it comes to addressing today’s key global
challenges, such as climate change, soil depletion and
contamination, and hunger. We work with FAO, UNESCO,
UNEP and United Nations Global Compact and take part
in other international projects and initiatives to help solve
these and other problems for the good of humanity.
For more details, see page 104
Research community
Science is what underpins our industry, and PhosAgro is
fully aware of the key role that scientists and researchers
play in creating breakthrough agricultural solutions.
We seek to support promising studies by leveraging our
R&D capabilities and prolific partnerships with the Russian
Academy of Sciences, Russian State Agrarian University –
Moscow Timiryazev Agricultural Academy, International
Union of Pure and Applied Chemistry and others.
For more details, see page 104
Business and industry associations
In our opinion, making the business community act in
concert is a natural way of solving acute social issues –
and the most effective one. In line with this approach
Andrey Guryev, PhosAgro’s CEO, became head of the RSPP
Coordinating Council for COVID-19. PhosAgro also plays
an active role in the International Fertilizer Association,
Russian Association of Fertilizer Producers and other key
business unions.
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About this Report Nowadays, we are facing unique challenges, such as
climate change, soil degradation, and water scarcity.
At PhosAgro, we are convinced that the solution to these
challenges rests on our ability to combine the hands-on
experience and knowledge we have accumulated over
the past 20 years with groundbreaking research.
Siroj Loikov,
Member of the Management Board,
First Deputy CEO of PhosAgro
Science-based approach
PhosAgro runs the Samoilov Scientific Research Institute for Fertilizers and Insectofungicides (NIUIF)
and PhosAgro Innovation Centre, unique research centres that are unparalleled nationwide. Thanks to
developments by the Company’s scientists, 2021 saw PhosAgro’s sales of ultra-modern fertilizer grades
created over the last five years reach RUB 71 bln, or 17% of total revenue. Technological innovations
and advances implemented throughout our production cycle also has a positive effect worth tens of
billions of roubles.
176%
Growth in the output
of fertilizers with
micronutrients in 2021
K2O
17
S, %
6
N, %
13
Zn, %
0.6
P2O5, %
17
B, %
0.15
Y
N
A
P
M
O
C
E
L
I
F
O
R
P
14
Our history
16
Key activities
in 2021
18
Key highlights
20
Our mission
and values
24
Business model
26
Geographical
footprint
28
Investment case
and credit ratings
12
12
13
13
Об отчете О компании Стратегический отчет Обзор результатов Корпоративное управление Акционерный капитал Финансовая отчетность Дополнительная информацияАкционерный капитал
Our History
2001
Foundation of PhosAgro
2003–2004
Integrated Cherepovets production site created
2005
PhosAgro’s distribution network tops
the market in Russia and the CIS
2009
Cherepovets production site becomes
the largest sulphuric acid producer
in Europe
2011
IPO1 on the London Stock
Exchange
2012
New urea unit launched in
Cherepovets
2013
Green Chemistry for Life programme
launched together with UNESCO
2017
New ammonia and urea unit launched
in Cherepovets
2018
PhosAgro Innovation Centre
created
2019
Strategy to 2025 adopted
2020
Green procurement system introduced
Climate and Water Strategies adopted
2021
New plant launched in Volkhov
PhosAgro celebrates its
20th anniversary
Production of fertilizers and phosphate-based products, mt
Reduction of unit pollutant emissions, kg per tonne of finished and semi-finished products
3.4
Balakovo:
production
of MCP
Cherepovets:
sulfuric acid production;
energy complex
Cherepovets:
Launch of ammonia
and urea area
1.5
>200% 10.5
1,9
Cherepovets:
1st of four new sulfuric
acid production lines
Balakovo:
2nd production
line for MCP
Balakovo:
development programme
completed
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
0.8
-58%
Reduction of pollutant
emissions per tonne of finished
and semi-finished products
from 2008 (max level) to 2021
1 Initial Public Offering.
Phosphate-based fertilizers
Nitrogen-based fertilizers
Other products
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
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Company Profile Key Activities
in 2021
Contract signed to provide the mining
and processing plant at the Kirovsk branch
of Apatit with green energy from TGC-1
hydroelectric power plants
MSCI ESG Research
upgraded PhosAgro’s
sustainability rating
from BBB to A
Strategic agreements signed at the
St Petersburg International Economic
Forum to develop new agribusiness
services with Demetra-Holding, expand
the use of green energy with TGC-1, and
develop agribiotechnologies and support
agricultural education with Innopraktika
Moody’s affirms
PhosAgro’s Baa3
rating
PhosAgro and the Food and Agriculture Organisation of
the United Nations (FAO) expand cooperation in global soil
protection
ISO 9001:2015 and ISO 14001:2015 certification of quality
management systems completed at all PhosAgro’s production
facilities
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The United Nations
once again names
PhosAgro a Global
Compact LEAD
company
PhosAgro Group becomes
first in Russia to achieve
certification under the
national standard for
improved production
Sustainalytics gives PhosAgro the highest ESG rating in the
global agrochemical sector
January
April
May
June
July
August
September
October
December
Fitch affirms
PhosAgro’s
investment-grade
BBB- rating with
a stable outlook
PhosAgro and the Russian Academy
of Sciences launch a project to build
a carbon farm in the Vologda region
PhosAgro places
USD 500 mln worth
of seven-year
Eurobonds at 2.6%
per annum, a record-
low rate for a Russian
company
PhosAgro becomes CGI
Russia’s general strategic
partner in the chemical
industry
PhosAgro Group’s facilities set a new historical record for annual
output (10.5 mt)
PhosAgro Group becomes first in Russia to achieve
certification under the Vitality Leaf international
environmental standard
First stage of PhosAgro’s new mineral
fertilizer plant commissioned in Volkhov
Standard & Poor’s affirms PhosAgro’s
investment-grade BBB- rating with
a stable outlook
PhosAgro Group announces a decision
not to change its domestic mineral
fertilizer prices
Aluminium fluoride plant fully upgraded at the Cherepovets
production site
16
17
Company Profile
Key
Highlights
Financial highlights
Sustainable development indicators
Adjusted net profit,
RUB bln
Dividend payments,
RUB bln
Pollutant emissions, kg per tonne
of finished and semi-finished products
GHG emissions (Scope 1), kg per tonne
of finished and semi-finished products
Waste water discharge, m3 per tonne
of finished and semi-finished products
Revenue,
RUB bln
2021
2020
2019
2021
2020
2019
420.4
253.9
248.1
Operational highlights
Output by key product,
kt
Sales by key product,
kt
2021
2020
2019
2021
2020
2019
10,480
10,164
9,682
2021
2020
2019
130.2
43.3
37.1
10,434
10,139
9,638
72.3
38.9
32.3
2021
2020
2019
2021
2020
2019
0.801
0.892
0.888
2021
2020
2019
132.7
140.1
143.3
Share of recycled and
decontaminated hazard class 1–4
waste, %
Employee satisfaction
and loyalty, %
Average annual training hours
per employee, hour
2021
2020
2019
2021
2020
2019
39.1
37.6
34.5
LTIFR,
per 1 mln man-hours
Accidents
(corporate staff)
2021
2020
2019
2021
2020
2019
0.85
0.52
0.59
2021
2020
2019
57
63
60
0
0
3
5.42
5.57
4.68
95.0
79.5
92.4
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19
Company Profile Our Mission
and Values
Our mission
Caring
for Earth fertility
for prosperous lives
The Company acknowledges
its responsibility for the
global food security and
efficiently works towards this
cause
The Company offers eco-
efficient fertilizers, as well as
delivery services and optimal
application solutions.
We work for those who feed
the world
Our vision
Our values
Global presence
Organic growth
and development
Healthy lifestyles
and occupational health
and safety
Eco-efficiency
Social
responsibility
Innovation and digital
transformation
Teamwork
As strong team players,
we look to ensure smooth
cooperation of all our
business units
Expertise
Everyone at PhosAgro is
a qualified professional in
what they do
Leadership
Our goals are ambitious as
we strive for professional
excellence and continuous self-
improvement
Reliability
We always honour our
obligations and are a reliable
partner
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Ethics
We support human integrity,
fostering moral standards
and ethics, spiritual values,
dedication at work, and
respect for family values
Improvement
and innovation
Development is ongoing at
PhosAgro, with every procedure
relentlessly improved and refined
Safety
We promote and share a safety
culture within the Company to
ensure safe working conditions
20
21
Company Profile Navigator
on UN SDGs
17 UN SDGs are the most
important benchmark in our
making both strategic and day-
to-day management decisions.
Committed to the Company’s
mission and values, which are
underpinned by our Strategy
to 2025, we look to contribute
to, and monitor the progress
against, targets of our eleven
priority UN SDGs.
PhosAgro directly contributes to
11goals
out of the 17 UN sustainable
development goals
Target 2.4
Fertilizers help increase food production
and ensure the availability of nutrients
required for human health. Together with
UNESCO and FAO, we implement projects
to promote conservation agriculture and
equal opportunity and ensure that farmers
in developing countries have access to
science-based agricultural practices.
For more details, see page 104
Targets 3.4 and 3.9
Our production facilities comply with
requirements regarding the use of best
available techniques for reducing pollutant
emissions and environmental impact.
For more details, see page 156
Target 11.3
We ensure comfortable living conditions by
investing heavily in housing construction,
transportation and social infrastructure.
We also support local entrepreneurs by
creating a responsible supply chain (taking
into account ESG aspects).
For more details, see page 190
Target 12.4
We make an essential contribution to the
circular economy of food security, human
health and well-being. Our products carry
eco-labels that attest to their safety.
Together with our suppliers and customers,
we implement initiatives to improve ESG
metrics, including supplier ESG assessment
and ranking.
For more details, see page 93
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Target 4.4
Our social priorities include providing full-
time employment opportunities, training
and building a team of professionals, and
supporting schools and colleges in regions
where the Company operates (to promote
modern education). Together with UNESCO,
we run the Green Chemistry for Life
programme to support young scientists.
For more details, see page 136
Targets 6.1 and 6.3
Under the Company’s Water Strategy,
we reduce fresh water withdrawal and
consumption by increasing recycling,
i.e. water reuse in industrial processes.
We implement zero discharge technologies.
For more details, see page 183
Targets 13.1 and 13.2
We take tangible practical measures under
our Climate Strategy, which includes
a climate risk analysis, GHG emission
reduction programme (supported by the
Energy Efficiency Strategy) and low-carbon
transition plan.
For more details, see page 163
Target 15.1
Our Innovation Centre and Scientific
Research Institute work to create smart
next-gen eco-efficient fertilizers.
For more details, see page 108
Making a positive impact
Minimising the negative impact
Targets 8.3, 8.5 and 8.8
We aim to have zero fatalities, demonstrate
top health and safety performance across
the key indicators and comply with the
highest standards in this area.
For more details, see page 138
Target 9.1
We make a significant contribution to the
development of regional infrastructure.
The Company is streamlining product
shipments to reduce their carbon footprint
and embracing the best available techniques
to support a circular economy, cut emissions
and waste, and reduce water use.
For more details, see page 156
We are among the 37 Global
Compact LEAD companies
Target 17.16
We ensure a long-term positive impact of
social investing by building ties with local
communities and working with UNESCO,
FAO and the United Nations Environment
Programme (UNEP) to promote educational
projects across our footprint in Russia and
abroad.
For more details, see page 112
For more information on how
we set UN SDG priorities, see
the Sustainability section of the
Company’s website
For more information on SDG 2,
see the Commitment to UN goals
section of the Company’s website
22
23
Company Profile Business Model
We use
Market and
technology
insights
Management,
production and sales
competencies
Energy
and water
Mineral resources
and materials
Partner, supplier
and customer
relationships
Public
and private
infrastructure
Finances
PhosAgro Group’s business model is based on
the simple idea that we must better than our
competitors understand the ever-changing
customer needs and respond to them quicker using
a wide product range, large distribution network
and robust logistics. This requires flexible high-
tech production facilities, high self-sufficiency in
quality raw materials, deep vertical integration
and, most importantly, continuous feedback
from end customers and analysis of our product
performance. All this helps PhosAgro Group
maintain a low cost position in the industry, while
also ensuring top quality and unique eco-efficiency
of its fertilizers. We leverage our competitive
advantages and seek to meet the highest
operational standards throughout our product
lifecycle.
For more information on the Company’s Strategy to 2025,
see the Strategic Report section on page 56.
PhosAgro’s competitive
advantages
urces P r o duction
Mineral
re
so
L
o
g
i
s
t
i
c
s
P
r
o
d
u
c
t
i
o
n
Applicatio n
Sales
We secure
Sustainable soil
fertility
Large-scale purchases
of local products and services
Sustainably high returns
on investment
Basis for making
safe food products
Consistent tax payments
and local community
development
Contribution to international
programmes addressing
global challenges
Well-paid jobs
and social benefits
Educational initiatives and
upskilling opportunities
New research
and technological
innovations
Product development
Mineral resources
Production
Logistics
Sales
Application
Target 2.4
Target 12.4
We operate the industry’s largest research centre at Samoilov
Scientific Research Institute for Fertilizers and Insectofungicides,
Russia’s oldest of its kind (founded in 1919)
Apatite-nepheline ore of magmatic origin, which is unique
in terms of quality and safety and does not have as much cadmium
or other heavy metal content as would be dangerous for health,
with a reserves-to-production ratio (RPR) of 60 years
High vertical integration (% of total demand):
Wide product range:
Ultra-modern product offering:
Own production
52
fertilizer grades
of all kinds
17%
grades developed in the last
five years account
100%
of phosphate
rock
79% 94% 55%
ammonia
sulphuric
acid
ammonium
sulphate
Target 8.3
Target 3.9
Target 9.1
Target 2.4
Large-scale upgrade and construction programmes in
Cherepovets, Volkhov and Balakovo
24.7 mtpa
Strong commitment to reducing emission intensity and
waste water discharges, and improving energy efficiency
High throughput capacity on key rail
routes
11.8 mt
phosphate rock
and nepheline
concentrate
+ 0.8%
7.9 mt
2.4 mt
phosphate-
based fertilizers
nitrogen-based
fertilizers
+ 4.2%
+ 0.4%
Reliable delivery: a large own fleet
of railcars and port terminals
on key export routes
31 distribution centresin
Russian regions
Largest distribution network in Russia
Global presence
and diversified
exports
Strong position
in the premium
European market
shipping to
sales of
>100 countries
2.8 mt
Target 17.16
Service model for
customers: our product
is a combination
of a fertilizer and our
agronomic expertise,
all available in a digital
environment
PhosAgro’s agronomic
service: training,
agronomic advice and
support for customers
Digitalisation of sales and customer services:
>100
online lectures
for 21
agricultural
universities
independent
online
platforms
3
on fertilizer sales
ths
8.6
mobile app
downloads
+99% к 2020
1.7 ths
online requests
+244% к 2020
7.8 ths
unique Agro
Calculator users
Research and education on page 104.
Operational performance on page 88.
Customers and product management on page 93.
Operational performance on page 88.
Environmental review on page 156.
Geographical footprint on page 26.
Strategy on page 64.
Operational performance on page 88.
Geographical footprint on page 26.
Customers and product management on page 93.
Strategy on page 63.
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25
Company Profile
Geographical
Footprint
Upstream
and downstream
R&D
Logistics
With an up to 6.5 mtpa
port transhipment capacity
across key export routes,
the Company can ensure
a reliable supply to foreign
customers and guarantee
timely delivery against its
contractual obligations.
Distribution
PhosAgro Group’s network of
sales offices is the largest in
Russia and covers most of the
world’s key agricultural regions,
making the Company’s quality
products available to farmers
across the globe.
GRI 2-1, 2-6
PhosAgro Group’s eco-efficient
mineral fertilizers and feed
phosphates are sold all over
the world via an extensive
distribution network relying on
the Groups’s robust logistics
infrastructure. Our key
production facilities (including
mining and processing assets),
port terminals and research
centre are located in Russia.
A flexible business model,
well-thought-out production
and sales strategy and deep
knowledge of customer
preferences help us maintain
a strong position across the
main fertilizer markets, primarily
in Russia and other premium
markets.
supplies countries
100+
>18 ths
10.3mt
employees
sales in 2021
Bayonne
(France)
Hamburg
(Germany)
Zug
(Switzerland)
São Paulo
(Brazil)
Belgrade
(Serbia)
Minsk
(Belarus)
Murmansk
Kirovsk
Kotka
(Finland)
Vistino
Warsaw
(Poland)
Vilnius
(Lithuania)
Volkhov
Moscow
(Head Office)
Cherepovets
Bucharest
(Romania)
Orel
Ryazan
Kursk
Nizhny Novgorod
Belgorod
Lipetsk
Voronezh
Tambov
Penza
Kazan
Saransk
Rostov-on-Don
Samara
Krasnodar
Stavropol
Bykov Otrog
Volgograd
Yekaterinburg
Novosibirsk
Nur-Sultan
(Kazakhstan)
Barnaul
Cape Town
(South Africa)
Limassol
(Cyprus)
Singapore
The Volkhov branch
(Volkhov, Leningrad region) is Russia’s
only producer of sodium tripolyphosphate
and one of Russia’s leading producers of
mineral fertilizers.
The Kirovsk branch
(Kirovsk, Murmansk region) is the world’s
leading producer of high-grade (P2O5
content of at least 37.5%) phosphate
rock and Russia’s only producer of
nepheline concentrate. It develops six
Khibiny deposits: Kukisvumchorr, Yukspor,
Apatitovy Cirque, Rasvumchorr Plateau,
Koashva and Njorkpahk.
Apatit
(Cherepovets Vologda Region) is Europe’s
biggest producer of phosphate-based
fertilizers and of phosphoric and sulphuric
acids, as well as one of the Russian leaders
by NPK1, ammonia and ammonium nitrate
output.
PhosAgro Group runs Samoilov Scientific
Research Institute for Fertilizers and
Insectofungicides (Cherepovets, Vologda
region), Russia’s only research centre
specialising in this area and one of the largest
in Europe. Founded in 1919, this institute
paved the way for the country’s strong mineral
fertilizer industry.
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The Balakovo
(Bykov Otrog, Saratov region) focuses on
phosphate-based fertilizers (a leading
producer in Europe) and feed phosphates
(a leading producer in Russia, and the
country’s only manufacturer of feed
monocalcium phosphate).
Krasnoyarsk
In 2021, we reorganised our distribution
in Siberia and the Russian Far East,
establishing a regional sales office in
Novosibirsk to spur business development
in promising agricultural regions
everywhere between the Urals and the
Pacific.
Ussuriysk
For more information on our
geographical footprint, please
visit the Company’s website
1 Nitrogen-phosphorus-potassium fertilizers.
26
27
Company Profile Investment
Case and
Credit Ratings
45.6%
EBITDA margin
60years
The mine life of mineral
resource base
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1
A global producer of high-quality phosphate-based fertilizers
2
Unique resource base and sector-leading margins
PhosAgro is Europe’s largest producer of
phosphate-based fertilizers1 and a top 5
global producer of DAP/MAP2 by capacity.
ISO 9001:2015, ISO 14001:2015, ISO
45001:2018, ISO 14024:2018, GMP+ (B2),
(B1), (B4) certifications that attest to the
high quality of products and management
efficiency throughout their lifecycle.
The Company successfully passed
a certification audit for compliance with
the International Fertilizer Association’s
Protect and Sustain standard. The audit
was conducted by SGS, the world’s leading
inspection, verification, testing and
certification company.
Customer focus. A leading supplier of all
types of mineral fertilizers in the Russian
market in aggregate terms. An extensive
domestic sales network and trading offices
in all key export markets. Netback-driven
sales model with a global presence.
Products exported to European Union
customers have been registered pursuant
to Regulation (EC) No. 1907/2006
concerning the Registration, Evaluation and
Authorisation of Chemicals (REACH).
The technologies used at PhosAgro’s
production sites meet the highest global
standards.
Unique mineral resource base. The mine
life is estimated at around 60 years.
Important food safety factor. Thanks to
its magmatic origin, phosphate rock
mined on the Kola Peninsula boasts
exceptional purity.
EBITDA margin, %
2019
2020
2021
Wide range of ready-to-use solutions
for farmers. Our in-house R&D
function enables us to develop
and launch new fertilizer grades in
a prompt manner in order to deliver
the crop nutrient solutions our
customers need.
No. 1 globally as a producer of high-
quality phosphate rock (P2O5 content
at 39% and above).
Self-sufficiency in major inputs: 100%
in phosphate rock, 79% in ammonia,
94% in sulphuric acid.
One of the highest gross margins
in the phosphate segment.
30.5 33.7 45.6
14.9 18.1 12.4
26.2 27.5 38.0
22.8 13.7 24.4
18.1 13.6 24.1
31.1 30.3 45.0
(1.3) 15.5 27.2
1 By total production capacity for DAP/MAP/NP/NPK/NPS.
2 Monoammonium phosphate / diammonium
phosphate.
top 5
global producer
of DAP/MAP2 by capacity
No.1
No. 1 globally as a producer
of high-quality phosphate rock
PhosAgro
Peers
28
29
Company Profile
Transparent ownership
structure with
>30%of shares in free float
3 Eco-efficient fertilizers
4 Sound capital allocation in highly
effective investment projects
5 Well-balanced corporate governance
Investment projects may get a go-ahead subject to their high
IRR1 (20%+), compliance with the BAT and sustainability criteria
along with the CAPEX/EBITDA target, and a comfortable net
debt / EBITDA covenant headroom.
Seven (70%) independent non-executive
directors on the Board of Directors
Credit rating
31.12.2019
31.12.2020
31.12.2021
Stable credit ratings
Green One
GRI 417-1
Vitality Leaf
In the reporting year, products
made at the Company’s
sites in Cherepovets and
Volkhov successfully passed
voluntary certification under
the Vitality Leaf framework.
This ISO 14024-compliant
framework was designed
to assess a product’s
environmental safety
throughout its lifecycle,
including mining and
processing of raw materials,
their delivery to the plant,
storage, transportation and
use of finished products, and
packaging recycling.
In 2021, PhosAgro Group
became first in Russia to
achieve certification under the
national standard for improved
production. As a result, we will
be able to use eco-labels that
prove this and were adopted
with support from all members
of the Russian Association of
Fertilizer Producers. Today, all
of the products made at our
mineral fertilizer facilities have
been certified under
R 58658–2019, which has
introduced the world’s most
rigorous limits on heavy metal
and arsenic content. This is
a testament to the unique
eco-efficiency of our products,
which can now be labelled with
the green brand.
GOST
Green labelling guarantees
that Russian-made mineral
fertilizers conform to the
most stringent international
requirements for environmental
safety, including the EU’s recent
restrictions on the content of
heavy metals, such as cadmium,
lead and arsenic, in fertilizers.
Breakdown of CAPEX2, RUB bln
1.3 11.1 23.9
1.1
10.8 30.0
2.0
20.1
30.4
2020
2021
2022 (plan)
Non-industrial construction
Projects to support existing capacity
Investment projects
1 Internal Rate of Return.
2 CAPEX excluding capitalised repairs.
Six Board committees meeting on
a regular basis with five of them chaired
by independent directors
ВВВ−
ВВВ−
Ваа3
Ваа3
ВВВ−
ВВВ−
ВВВ−
Ваа3
ВВВ−
A reasonable Board composition
Place of residence
Increasingly higher ESG ratings
ESG rating
2019
2020
2021
Russian Federation
Gender split
Other countries
Women
Men
3 SUSTAINALYTICS materially amended its methodology in 2019.
The indicators currently reflect the level of unmanaged ESG risks.
The decrease in the absolute value of the score reflects a position
improvement.
4 PhosAgro was first included in the rating in 2021.
5 This publication contains information developed by
Sustainalytics (www.sustainalytics.com). The information and
data are property of Sustainalytics and/or its third party suppliers
(Third Party Data) and provided for informational purposes only.
They do not intend to endorse any product or project, do not
constitute investment advice and are not warranted as to their
completeness, timeliness, accuracy or fitness for a particular
purpose. The terms of their use are available on the website
https://www.sustainalytics.com/legal-disclaimers
Climate
Water
BB
ВВВ
С
F
B-
F
A
B
C4
5
45.2 3
26.9 3
22.8 3
Percentile among all
companies globally
(100 for the worst
performance, 1 for
the best performance)
Percentile among
all agrochemical
producers globally
(100 for the worst
performance, 1 for
the best performance)
69
45
33
31
3
1
n/a
n/a
46 4
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Company Profile
Growing sales in premium markets
The Company’s strategic goal is to increase sales in priority markets to 11.6 mt
by 2025. One of the expected drivers is our position as a producer of fertilizers that
are free of heavy metals harmful to human health and soils. In 2021, PhosAgro’s sales
in premium markets almost hit 10.3 mt.
20%
Minimum IRR
of development projects
C
I
G
E
T
A
R
T
S
T
R
O
P
E
R
Innovation
and digitalisation
Drones and new digital technologies open up
unprecedented opportunities for farmers to
improve crop yields and profit margins. Drones are
able to collect data on soils and plants in real time.
Once analysed, it can promptly suggest responses to
nutrient deficiencies, as well as to the risk of fungus
or diseases. This data can also be fed into our Agro
Calculator, which will help determine what fertilizers
are necessary.
Agro Calculator is powered by algorithms based on
years-long research by D.N. Pryanishnikov All-Russian
Research Institute of Agrochemistry, the International
Plant Nutrition Institute (IPNI), and expertise of our
in-house agronomic service.
NO3
3.6
P2O5
30.6
K2O
280
Humus, %
13
34
Chairman’s
Statement
38
CEO’s
Statement
42
Business Environment
46
Market Overview
54
The Company’s Role
in the Industry
56
Strategy
68
Strategic
Risks
32
33
33
33
Об отчете О компании Стратегический отчет Обзор результатов Корпоративное управление Акционерный капитал Финансовая отчетность Дополнительная информацияАкционерный капитал
Chairman’s
Statement
Dear colleagues,
2021 was of
particular significance for PhosAgro
as it marked the 20th anniversary of the
Company and the 10th year of our public
listing on London Stock Exchange. Over
these 20 years, we have demonstrated
consistent growth and solid results, and
2021 was no exception.
As the pandemic persisted, we continued to
focus on occupational disease prevention
initiatives to ensure the health and safety
of our employees and the residents of
the cities where we operate. All the while,
we maintained an uninterrupted supply
of environmentally friendly fertilizers to
farmers both worldwide and in Russia, our
priority market.
I believe that we successfully navigated
through all of the last year’s challenges and
managed to consolidate PhosAgro Group’s
leadership in the industry.
10.3 mt
all-time high fertilizer
output in 2021
Strategic investments
in capacity expansion
In spite of all the difficulties we faced in
2021, our resilient business model and
unique resource base, as well as coherent and
professional guidance from the management
team led by Andrey Guryev, helped us make
considerable progress on the Strategy to 2025.
We continued to implement our key
investment projects in line with the strategy
which views the 20% increase in fertilizer
and feed phosphate production by 2025 as
the Company’s main growth target. In 2021,
the PhosAgro Group invested RUB 41.9 bln
(excluding capitalised repairs) in strategic
projects, with an additional RUB 250 bln
earmarked for investment over the next five
years.
The launch of a new sulphuric acid plant
with a daily capacity of 3.3 kt (SK-3300) and
reconstruction of the Kriolit railway station
marked the completion of a large-scale
development programme at PhosAgro’s
Cherepovets production site and became
a significant milestone of 2020 for the
Company. Previously, as part of the investment
programme worth more than RUB 120 bln
(PhosAgro’s total investments for the past
seven years are estimated at RUB 240 bln), the
Company commissioned a 760 ktpa ammonia
plant and a 500 ktpa granulated urea unit.
As a result, the production site’s fertilizer
output hit the all-time high of 7.6 mt in 2021.
All this led to an increase in tax contributions
and the creation of over 650 jobs for highly
qualified employees.
But PhosAgro Group’s ambitious investment
programme does not stop there. Key future
projects include the completion of an advanced
phosphate-based fertilizer facility and support
infrastructure in Volkhov, as well as further
development of the mining segment, first
phase of construction of a new ammonia and
urea facility in Cherepovets, and initiatives to
boost output at the Balakovo branch of Apatit.
These and some other projects will be included
in the updated version of the Strategy to 2025
to be reviewed by the Company’s Board of
Directors in spring 2022.
I am convinced that successful implementation
of the investment programme will enable
PhosAgro Group to increase its growth rates
and ramp up the production of environmentally
friendly fertilizers that are free of toxic
substances (including cadmium) harmful to
human health and soils. Such endeavours
are of critical importance in light of the food
safety challenges posed by the pandemic and
mounting concerns around global food quality
and safety.
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Strategic Report
Fertilizer market and
PhosAgro Group’s
performance
From the beginning of 2021, demand for
mineral fertilizers in international markets
grew steadily, driven by a substantial
increase in global prices and the need for
popular grains and oilseeds, which account
for over 50% of fertilizer use worldwide.
Higher agricultural prices, in their turn,
pushed up the demand for fertilizers.
This market environment satisfied all the
required conditions for PhosAgro Group’s
productivity improvement efforts to pay
off and fully translate into the Company’s
operational results.
~18%of products manufactured
by the Apatit mining and
processing plant using green
power
Results
Contribution to sustainability
GRI 2-22
PhosAgro has always been a champion of
sustainability.
In 2021, we scaled up the use of green
power in agrochemical production
by signing a contract for the supply
of hydroelectric power with TGC-1,
which covered around 18% of products
manufactured by the Apatit mining
and processing plant. During the 24th
St Petersburg International Economic
Forum, PhosAgro and TGC-1 had
entered into an agreement designed to
boost the share of green energy used
in the production of mineral fertilizers.
The 2021 green energy supplies totalled
approximately 300 mln kWh. In 2021,
we also published our first ever report in
accordance with the recommendations of
the Task Force on Climate-related Financial
Disclosures (TCFD), which discloses the
Company’s FY2020 results. The report
provides information on how climate
issues are integrated into PhosAgro’s
strategy, corporate governance and risk
management.
In December 2021, PhosAgro and the
Food and Agriculture Organisation of the
United Nations (FAO) announced plans to
extend their cooperation in the protection
of the planet’s soils. At this new stage, the
FAO and PhosAgro intend to focus on soil
pollution issues, including contamination
with heavy metals. Over the next two years,
PhosAgro will provide another USD 1.2 mln
in funding for the initiative. This will bring
PhosAgro’s total contribution to the project
to USD 2.4 mln by 2023.
We are happy that food safety concerns
are being addressed at the international
level. In 2021, the European Commission
made a significant step forward by
introducing drastic caps on the content
of toxic cadmium in certain food products
within the European Union. As a producer
of environmentally friendly fertilizers with
a perfectly low cadmium content, PhosAgro
fully supports this initiative designed to
protect public health and to boost food
safety.
We are glad to see that Russia is also
becoming increasingly concerned with
food safety issues. In June 2021, Russia’s
President signed Federal Law No. 159-FZ
On Agricultural Products, Raw Materials
and Food with Improved Environmental
Characteristics that will come into effect
on 1 March 2022. This law allows for
environmentally safe products to be sold
under the national green brand, which will
enable consumers to make responsible
food choices while also increasing the
competitiveness of Russia’s agricultural
industry.
All our sustainability efforts do not go
unnoticed by the international expert
community. Sustainalytics, a leading
independent ESG research, rating and
data firm, improved PhosAgro’s rating in
their ESG risk management framework
from 27.3 to 22.8, placing the Company
among the world’s 30 top-performing
chemical companies – ahead of all global
agrochemical producers. Furthermore,
CDP upgraded PhosAgro’s climate change
score from B- to B, and its water security
score from F to C, while MSCI ESG Research
highlighted the Company’s leadership
position and reaffirmed its A rating.
In September, the United Nations confirmed
PhosAgro’s Global Compact LEAD status,
which underscores the Company’s high
sustainability. Today this honour is held by
just 38 organisations worldwide.
22.8
Sustainalytics ESG risk management
framework (ahead of all global
agrochemical producers)
Corporate governance
The year of 2021 required that we
demonstrate strong coordination and
professionalism at all levels of the corporate
governance framework. I am honoured to
have been elected Chairman of the Board of
Directors once again. Of equal importance
is the fact that the remaining directors also
secured re-election to the Board this time
around. Given the scale of our operations
and the risks that we face, the current line-
up of the PhosAgro Board of Directors is
very well placed to tackle the Company’s
tasks and business goals.
In 2021, the Expert Council of the 15th
Director of the Year National Award
Ceremony chose me and four other
directors (Irina Bokova, Andrey Guryev,
Marcus J. Rhodes and Andrey Sharonov) as
recipients of the prize for our contributions
to the development of corporate
governance and promotion of best
corporate practices in Russia.
PhosAgro’s corporate governance framework
is indeed impressive. This is confirmed
by both the results of the Board’s self-
assessment completed in early 2022 and
the findings of experts assessing the entire
corporate governance system. In line
with the best global practices, seven out
of ten current directors are independent.
Independent directors chair five of the
six Board committees. PhosAgro works
continuously to enhance its transparency and
meet the interests of all stakeholders. I am
proud to emphasise the pace and quality of
our development and the improvements that
we bring to our corporate practices.
COVID-19 response
In 2021, COVID-19 remained one of the
key factors to reckon with for PhosAgro
Group, the industry and global community.
We are firmly convinced that collaborative
approach is the only way to deal with the
fallout from the pandemic. That is why
PhosAgro continues to cooperate with
the Russian Union of Industrialists and
Entrepreneurs, the Russian Association of
Fertilizer Producers and the International
Fertilizer Association in a bid to change
the situation for the better through joint
efforts.
From the beginning of the pandemic until
the end of 2021, the Company invested
over RUB 2.6 bln to fend off the coronavirus
infection.
We also continue to pay close attention to
maintaining herd immunity at PhosAgro
Group by informing employees about the
importance of vaccines, encouraging them
to get a jab and providing comfortable
conditions for vaccination.
On behalf of the Board of Directors, I would
like to thank all members of PhosAgro’s
team for their joint work in these harsh
times to ensure uninterrupted operation of
our business and to provide farmers with
environmentally friendly fertilizers, thus
making a significant contribution to global
food safety.
Xavier R. Rolet,
Chairman of the Board of Directors
of PJSC PhosAgro from May 2019
to 10 March 2022
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CEO’s
Statement
2021marked
two major events —
the 20th anniversary of PhosAgro and the
10th anniversary of our public listing on
the London Stock Exchange. This gives
us a suitable opportunity to look at the
progress we have made thus far.
Since the IPO, we have more than doubled our output
of mineral fertilizers and feed phosphates. From 2011
up to now, we have invested close to USD 6 bln in the
Company’s development. Over these ten years, we
have achieved a nearly four-fold increase in labour
productivity at our production sites, while also reducing
workplace injury rates by more than two thirds.
PhosAgro Group’s product portfolio has quadrupled
to count more than 50 grades of mineral fertilizers
for different soils and crops. We have penetrated new
markets and expanded our sales geography: today our
fertilizers are shipped to over 100 countries.
2021 was not only a year of anniversaries, but also
a year of new significant achievements. PhosAgro
Group completed a number of investment initiatives,
entered into important partnership agreements and
demonstrated solid operational and financial results.
All this was achieved by placing an emphasis on the
principles of sustainability and responsible business
conduct, which are deeply integrated into our strategy
and day-to-day operations.
RUB41.9 bln
CAPEX
Progress against the Strategy to 2025
PhosAgro is making considerable strides towards the
goals set out in the Strategy to 2025. This document
focuses on further enhancement of PhosAgro Group’s
presence in its priority market (Russia) and premium
export markets, as well as on the strengthening of
its role as a producer of environmentally friendly
phosphate-based fertilizers boasting some of the
lowest cash costs in the industry.
In 2021, we continued developing efficient and flexible
hi-tech production capacities, while CAPEX (excluding
capitalised repairs) for the reporting period amounted
to RUB 41.9 bln, or 21.8% of EBITDA, which is fully in
line with our Strategy to 2025.
In particular, we are now completing the investment
project of creating a state-of-the-art mineral
fertilizer facility in Volkhov. Two start-up facilities with
an aggregate capacity of over 800 kt of MAP came
on stream in March and June 2021. Furthermore, new
sulphuric acid production sites were built. Once the
plant is complete, the facility’s capacity will increase
more than four-fold.
In Cherepovets, we launched a new sulphuric acid
production unit with a capacity of 3.3 kt per day
leveraging the best available techniques developed by
the nation’s leading R&D institutions. These techniques
helped significantly improve the unit’s energy efficiency
and minimise emissions. The steam generated by the
sulphuric acid unit is used by our heat and power plant
to produce electricity, which allows us to reduce natural
gas consumption and the carbon footprint of PhosAgro
Group’s products. The unit will produce higher-quality
sulphuric acid as a feedstock for larger volumes of
environmentally friendly fertilizers.
A revamped Kryolite station enabled PhosAgro Group
to increase rail freight turnover at the Cherepovets
site, which brought the site’s logistics capacities to
a completely new level, while also improving the
environmental efficiency of cargo handling. This is
fully in line with our strategic goal of modernising the
logistics and port infrastructure and increasing its
throughput capacity by 2025.
In December, PhosAgro Group also completed an
upgrade of the aluminium fluoride plant at the
Cherepovets site, increasing its production capacity
from 57 to 73 ktpa. This helped cover 70% of the
country’s demand for aluminium fluoride with locally
produced feedstock, while also contributing to the
resolution of environmental issues in line with the
principles of circular economy: as the new plant
processes fluosilicate acid, a by-product of phosphoric
acid, into a marketable product, we are able to fully
utilise the fluorine recovered from phosphate rock.
As a result, PhosAgro Group’s output of mineral
fertilizers and other products increased by more than
3% year-on-year to 10.5 mt. Strong operational
performance and a favourable market environment
allowed us to deliver impressive financial results in
2021: EBITDA came in at RUB 191.8 bln (up 124% year-
on-year), while EBITDA margin amounted to 45.6%
(vs 33.7% in 2020).
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Strategic Report
Strong performance
Sustainability as a priority
In 2021, we significantly ramped up our
output thanks to new and upgraded
production capacities. A substantial
increase in global prices for key grain
cereals and oilseeds and demand for
mineral fertilizers drove up our margins and
contributed to solid cash flows.
Results
I am also happy to report yet another
success of PhosAgro in capital markets.
The Company issued USD 500 mln in
seven-year bonds at 2.6% per annum.
This is a record low coupon rate for
a Russian company’s USD-denominated
issue of comparable maturity. The offering
helped the Company reduce the total cost
of its debt portfolio.
RUB191.8 bln
EBITDA
Sustainability and responsible business
conduct lie at the heart of PhosAgro
Group’s strategy and business model.
The key focus areas of our Strategy to
2025 include commitment to UN SDGs
and meeting customer demand for
phosphate-based fertilizers that are free
of toxic concentrations (including those of
cadmium) harmful to human health and
soils.
Today, as a LEAD company under the UN
Global Compact, the world’s most credible
platform for socially responsible businesses,
PhosAgro directly contributes to 11 UN
SDGs.
In 2021, PhosAgro Group became Russia’s
first company to pass certification under
the national standard for products with
improved environmental characteristics.
The Cherepovets, Volkhov and Balakovo
sites were certified under GOST R 58658–
2019, which has introduced the world’s
most rigorous limits on heavy metal and
arsenic content. This is a testament to the
unique eco-efficiency of our products,
which can now be labelled with the green
brand.
In February 2021, the European
Commission adopted a Communication
on the visual appearance of the label on
EU fertilizing products with a cadmium
content of less than 20 mg per kg of
P2O5. This voluntary label will enable
manufacturers (including PhosAgro
Group) to raise customer awareness about
the outstanding eco-efficiency of their
products.
Furthermore, starting from 16 July 2022,
the EU will ban the sale of phosphate-based
fertilizers with a cadmium content of more
than 60 mg per kg of P2O5.
PhosAgro Group actively supports
the government’s fight against climate
change. For example, PhosAgro Group
entered into an agreement with the Vologda
region and the Russian Academy of Sciences
to create a greenhouse gas monitoring
system, which represents an important step
on the path towards carbon neutrality in the
region and across PhosAgro’s product range.
A carbon farm with a design sequestration
capacity of 0.7 mtpa of CO2 will form an
integral part of this new system.
PhosAgro Group’s carbon sequestration
project is set to become a veritable
breakthrough and a model for roll-out across
the nation’s other industrial regions. For the
Company, this is an opportunity to produce
carbon neutral fertilizers that will be required
for foodstuffs with a zero carbon footprint.
This is a new trend and a much desired
environmental niche in the global market.
I am particularly proud of the Young Global
Leader title conferred on me in 2021 by the
World Economic Forum and the prize in the
Contribution to the Development of ESG
Culture category that I received at the 15th
Director of the Year National Award Ceremony.
That said, PhosAgro’s championship of social
sustainability would have been impossible
without the joint efforts of all our team
members. I would therefore like to take this
opportunity to thank each and every employee
of the Group for their contribution.
COVID-19 response
In 2021, the coronavirus pandemic
continued to have the upper hand in
determining how the business and global
communities live and operate. All members
of PhosAgro Group’s team and me personally
as a chairman of the RSPP Coordinating
Council for COVID-19 made consistent
efforts to protect our labour force and
strengthen the anti-pandemic shield put up
by the government.
I was also highly honoured to receive the
Order of Pirogov from the President of
the Russian Federation Vladimir Putin, as
this award represents recognition of the
contribution made by the Russian business
community to the fight against COVID-19.
We can safely say that PhosAgro Group
is fully aware of its responsibility towards
a wide range of stakeholders when it
makes decisions on measures to fend off
the pandemic. We seek to protect our
employees and maintain uninterrupted
operation of our production facilities
that ensure food security for Russia and
over 100 countries across the inhabited
continents, while also providing support
to healthcare and social institutions across
the Company’s footprint.
In terms of epidemiological safety, we do not
only implement a wide array of restrictions
and protective measures such as regular
health and temperature checks, social
distancing at the workplace and inside
corporate vehicles, and regular COVID-19
testing, but also strive to raise employee
awareness about the importance of voluntary
vaccination.
World-class virologists, infectious disease
doctors and vaccine developers are invited to
participate in meetings with PhosAgro’s staff.
Employees also get information and answers
to their questions through corporate media,
the intranet, and guidelines, as well as during
online and offline meetings.
In addition, we have partnered with trade
unions and local authorities. All these
initiatives have enabled us to achieve an 88%
herd immunity and maintain this rate with an
enthusiastic attitude towards revaccination.
As part of our support of local
communities, PhosAgro Group participates
in the #WeAreTogether nationwide
campaign. The Company’s facilities collect
funds to support healthcare and social
institutions, volunteering centres, elderly
citizens, people with limited mobility,
and medical staff. I would like to thank
all members of PhosAgro’s team for their
dedication in the face of uncertainty, strict
compliance with preventive requirements,
and timely development and quick
implementation of safety standards across
the Group’s assets.
Andrey A. Guryev,
Chief Executive Officer and Chairman
of the Management Board of PJSC PhosAgro
from August 2013 to 10 March 2022
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Strategic Report Business Environment
December 2019 —
present
COVID-19 pandemic
While it is still too early to speak about
the final victory over coronavirus, there is
substantial evidence indicating that the
whole world and Russia in particular are
learning how to cope with the pandemic and
keep their economies afloat.
The Company’s response task force
continues with its efforts to curb the spread
of coronavirus, and there are stringent
regulations in place to ensure employee
safety at the workplace. We remain in touch
with regional and municipal governments,
local offices of the Federal Service for
Surveillance on Consumer Rights Protection
and Human Wellbeing (Rospotrebnadzor),
and healthcare facilities in order to prevent
and combat the coronavirus infection. Some
of our employees continued to work from
home. All these measures helped ensure
uninterrupted operation of our production
units and contractors working at the Group’s
production sites.
The RSPP Coordinating Council for
COVID-19 led by PhosAgro’s CEO Andrey
Guryev did not cease its efforts to fend off
the infection.
The Company is closely watching new COVID
variants and proactively adjusts measures to
manage the pandemic-related risks.
Looking back at 2021
Spikes in global food prices
We believe that global prices for food
products will keep growing into 2022.
According to many experts, we should
expect a third inflationary wave next year
caused primarily by rising food prices. High
inflation rates are quickly becoming a
global trend aggravated by the energy crisis
and supply chain disruptions that further
drive prices to unexpectedly high levels.
The pandemic brought about the energy
crisis, which has come to be considered as
a major factor behind the increase in food
inflation. With gas prices at all-time highs,
some of the largest producers of nitrogen-
based fertilizers in Europe and the US had
to shut up shop, while China halted exports.
This may lead to a situation where farmers
from different regions will drastically reduce
fertilizer use, with crop yields falling to
inadequate levels.
The Russian agricultural sector is well-
positioned in this respect. Thanks to
producers of mineral fertilizers, the annual
fertilizer demand announced by the Russian
Ministry of Agriculture has been fully
satisfied. There is no shortage of mineral
fertilizers either countrywide or in any
particular region and no sign of it occurring
in the near future, which means that there
is no threat to Russia’s food security.
February ------------------------------
March ---------------------------------
EU resolution on voluntary green labels
for mineral fertilizers
Restrictions
imposed by the US
The European Commission published
guidelines for manufacturers and market
regulators with information on eco-labels
for mineral fertilizers. Suppliers of fertilizers
with low levels of the toxic metal cadmium
(less than 20 mg/kg), including PhosAgro,
can now mark their products with a special
green label. The new labelling is set to help
identify eco-efficient fertilizers. This is the
first step in the EU’s strategy to restrict
fertilizers with higher content of heavy
metals, including cadmium. PhosAgro
Group’s products are fully compliant with
the new requirements, with the Company
expecting this regulatory change to support
its performance in the premium European
market.
The US Department of Commerce
announced its affirmative final
determination to impose the countervailing
duties (CVD) on imports of phosphate
fertilizers from Russia and Morocco. Given
its commitment to fair trade practices,
PhosAgro Group strongly opposed any
restrictive measures that impede healthy
competition. Farmers all over the world
need a reliable source of quality mineral
fertilizers, especially as global fertilizer
prices continue to rise sharply. This is
only possible in a free competitive market
without artificial barriers. PhosAgro Group
appealed against the imposition of duties
by the US, with the decision expected in the
first half of 2022.
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Strategic Report June -------------------------------------
July --------------------------------------
Federal Law No. 159-FZ On Agricultural
Products, Raw Materials and Food with
Improved Environmental Characteristics
dated 11 June 2021
Federal Law No. 296-FZ On Limiting
Greenhouse Gas Emissions dated 2 July
2021 (took effect on 30 December 2021)
Today, agriculture is a promising and
booming sector of the Russian economy.
The creation of a green brand for
products with improved environmental
characteristics will further accelerate
its growth. Federal Law No. 159-FZ On
Agricultural Products, Raw Materials
and Food with Improved Environmental
Characteristics dated 11 June 2021 came
into effect on 1 March 2022 and marked
the emergence of a new market niche for
agricultural products, raw materials, and
foods under the Green One national brand.
Goods with this labelling will face tougher
requirements across the production cycle –
from the unique environmentally safe base
of raw materials in Russia’s mineral fertilizer
industry to the sale of eco-friendly food
products to end consumers.
The Green One promoted by PhosAgro puts
Russia at the forefront of a growing global
movement advocating eco-friendly food
and global agricultural security to achieve
the UN Sustainable Development Goals.
By various estimates, the global market for
environmentally friendly foods exceeds USD
300 bln. As people pay increasing attention
to healthy lifestyles, it is expected to keep
growing in the future. Russian farmers are
well-positioned to stake out a solid share of
this promising market.
The outstanding eco-efficiency of Russian
mineral fertilizers is the cornerstone of
the green brand. Nowadays, our industry
provides an excellent example of innovative
Russian products that are sought after
globally. The international demand for
fertilizers is skyrocketing, and domestic
demand will double by 2025 (vs last year)
as per estimates of the Russian Ministry of
Agriculture.
The law laid the foundation for Russia’s
green transition by introducing, among
other things, mandatory carbon disclosures
and a register of GHG emissions, while also
empowering businesses to implement
climate projects to reduce GHG emissions
and ramp up GHG capture.
In 2022, Russia plans to launch an
implementation mechanism for climate
projects and a carbon trade system,
providing for solutions and technologies
with enhanced sustainability and increased
GHG capture by natural ecosystems, e.g.
forests, as well as transition to capturing and
processing of carbon dioxide.
This law became an important part of Russia’s
regulatory efforts to tackle climate change,
but there are also other significant steps
taken in that direction. Ahead of the COP26
summit in Glasgow, the country adopted the
Low-Carbon Development Strategy to 2030,
with some government support already
in place for green initiatives in the private
sector, including those addressing climate
change. The scope of government support is
subject to expansion.
Publication of the European Commission’s
proposals for a carbon import tax
designed to ensure carbon border
adjustments in the EU
ВOn 14 July 2021, as part of the Fit for
55 package the European Commission
published a proposal for a carbon border
adjustment mechanism (CBAM), which
is considered to be an essential tool for
combating climate change in the EU. CBAM
is expected to operate similarly to a custom
duty calculated based on the amount of
direct GHG emissions embedded in the
product (with a possibility for indirect
emissions to be partially included in the
carbon regulation framework) and on
the market price of mandatory carbon
certificates under the European Union
Emissions Trading System (EU ETS).
PhosAgro Group is actively pursuing the
Climate Strategy and low-carbon transition
plan to reduce CO2 emissions, striving for
close cooperation with the EU on this matter.
In 2022, we will continue to closely monitor
developments surrounding the introduction
of CBAM and participate in the discussions
of Russian producers on this matter. We hope
that a constructive dialogue between the
European partners, on the one hand, and
Russia’s Ministry of Economic Development
and the Russian Association of Fertilizer
Producers, on the other hand, will make
a positive contribution to the development
of CBAM by-laws.
August ----------------------------------
Limits for toxic metal concentrations in
EU-marketed food products
The European Commission’s Regulation
No. 2021/1323 of 10 August 2021
cut the previously approved maximum
concentrations of cadmium in the EU
market’s foodstuffs by at least 200%. The
expanded list of food products subject to
cadmium content limitations includes 66
items now as opposed to 20 items in the
previous version. By adopting this Regulation,
the European Commission tightened limits
on cadmium and lead concentrations in a
wide range of foodstuffs as a way to improve
the safety of EU consumers.
Lower caps on cadmium content were
recognised by the European Commission as
an effective tool to fight growing cancer rates
caused by the weekly intake of cadmium in
excess of 2.5 μg per kg of body weight and
its further accumulation in human body
(primarily in kidneys).
November --------------------------
Temporary quotas for exports of nitrogen-
based and complex fertilizers in Russia
The Russian government decided to
introduce six-month quotas on exports
of nitrogen-based and complex fertilizers
by Russian producers. This move basically
formalised the current split of sales between
export shipments and the high-priority
Russian market. The temporary measures
are thus expected to produce no material
effect on PhosAgro Group’s foreign trade
operations, financial and operational results,
or investment plans.
December -----------------------
EU’s Common Agricultural Policy
(CAP) reform
The CAP reform was officially approved
on 2 December 2021 and is expected
to come into effect on 1 January
2023. The new Policy is intended to
meet the following nine objectives:
ensuring a fair income to farmers,
increasing their competitiveness,
rebalancing the power in the food
chain, taking a climate change action,
encouraging environmental care,
preserving landscapes and biodiversity,
supporting generational renewal,
reviving rural areas, and protecting
food and health quality.
The reform is implemented under the
EU’s Green Deal initiative and Farm to
Fork strategy in line with their goals.
Focus on the environmental
friendliness of fertilizers applied in the
EU implies stricter requirements for the
quality of mineral fertilizers, primarily
as regards the content of toxic and
harmful impurities such as cadmium.
July 2022
Limitations on the availability of
fertilizers with a high content of toxic
cadmium to come into effect in the EU
The respective regulation was drafted
in 2016, but the European Parliament
only adopted it in 2019 following
long-running discussions. According
to the document, fertilizer products
containing more than 60 mg cadmium
per kg will be banned from the EU from
mid-2022, and this limit will be further
reduced in 2026 – to 40 mg per kg.
PhosAgro Group’s products are fully
compliant with these new standards
(if not miles ahead of them), as they
contain no concentrations of cadmium
or other toxic substances that are
harmful to human health and soils.
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Market Overview
Macro environment
2021 saw the global economy recover
despite being hit with new waves
of COVID-19 towards the middle and end
of the year (the spread of delta and omicron
variants).
According to the IMF outlook1, the global
economy will grow by 5.9% and 4.9%
in 2021 and 2022 respectively, which
sheds 0.1–0.2% from previous projections.
The downward revision of the 2021
forecast reflects a more pessimistic
outlook for advanced economies (partly
due to supply disruptions) and low-income
developing economies predicated mostly
on the pandemic taking a turn for the
worse. This is partially offset by better
short-term prospects for some emerging
markets and developing economies that
export commodities. The employment
growth is expected to generally lag behind
the recovery of production rates.
According to forecasts, global growth rates
are going to slow down in the medium
term to approximately 3.3% after 2022.
The output of advanced economies
is projected to exceed mid-term pre-
pandemic forecasts, largely thanks to robust
government support and economy-
bolstering measures being (and expected
to continue to be) implemented
in the US.
In contrast, the output of emerging markets
and developing economies is expected to
suffer a long-term decline because of lower
vaccination rates and the overall weaker
government support compared to advanced
economies.
These economic gaps stem from major
differences in the access to vaccination and
government support measures. Nearly 60%
of people in advanced economies have
been fully vaccinated, with some of them
now receiving booster shots, whereas
in low-income countries, roughly 96%
of the population are yet to receive
their first dose. Emerging markets and
developing economies, faced with greater
financing challenges and higher risks of de-
anchored inflation expectations,
are quicker to wind down support
measures despite more drastic output
reductions.
World Economic Outlook, October 2021 %
(2021/2022 — Projections)
Global economy
Advanced economies
Emerging markets and developing economies
Another economic policy issue is supply
disruptions. On the one hand, pandemic
outbreaks and adverse weather conditions
have led to shortages of key inputs and
materials, hindering production rates in
different countries. On the other hand,
these shortages, coupled with unleashed
pent-up demand and recovering
commodity prices, have brought on rapid
growth of consumer price inflation, as seen
in the US and Germany, as well as in many
emerging markets and developing
economies. Food prices have risen most
steeply in low-income countries, where
food security had already been a major
issue, which puts impoverished families
at an even greater disadvantage and
increases the risk of social unrest.
(3.1) 5.9 4.9
(4.5) 5.2 4.5
(2.1) 6.4 5.1
2020 2021 2022
2020 2021 2022
2020 2021 2022
Most recent growth projections by region, % (2021/2022 — Projections)
2020
2021
2022
United States
Euro Area
Middle East and
Central Asia
Emerging and
developing Asia
Latin America
and the
Caribbean
Sub-Saharan
Africa
(3.4) 6.0 5.2
(6.3) 5.0 4.3
(2.8) 4.1 4.1
(0.8) 7.2 6.3
(7.0) 6.3 3.0
(1.7) 3.7 3.8
Russian economy
Russia leans on a solid economic
foundation laid over the previous years.
Modern Russia is a developing country
classified by the World Bank into the
upper middle income bracket, meaning
the country’s catch-up potential is
practically exhausted.
The new COVID-19 pandemic has
exacerbated the existing global
economic problems and created new
challenges, the main ones being risks
to global macro stability, opaque post-
pandemic demand landscape and
business environment, technological
challenges, growing trend towards
economic regionalisation, and climate
agenda. All of this increases the level of
uncertainty for the Russian economy.
Hence, the second objective, on top
of ensuring target growth rates, is
to increase the economy’s resilience
to external shocks and make it more
adaptable to change.
Russian Ministry of Economic
Development reports1 that the nation’s
economy continued to recover in 2021.
According to the report, in Q2 2021 the
country’s GDP climbed back to pre-
pandemic levels. In July 2021, it increased
by 4.7% year-on-year (by 0.4% vs July
2019), in Q2 2021 – by 10.5% year-on-
year (by 1.9% vs Q2 2019), and between
January and July 2021 – by 4.8% year-
on-year (by 1.1% vs the corresponding
period of 2019). GDP growth in 2021 is
estimated at 4.2%.
The output of key non-commodity
sectors (manufacturing, agriculture and
construction industries) significantly
exceeds pre-pandemic levels (by
4.5% on average in July and by 5% in
June according to estimations). At the
same time, the mining output still lags
behind pre-COVID levels by over 2%
under the OPEC+ deal.
4.2%
GDP growth in 2021 in Russia
1 World Economic Outlook, International Monetary Fund, October 2021.
1 Forecast of Social and Economic Development of the Russian Federation for 2022 and the Target Period of 2023 and 2024, Ministry of Economic Development
of Russia, September 2021.
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47
Strategic Report Global fertilizer demand
According to the International Fertilizer
Industry Association (IFA)1, global fertilizer
consumption in 2020/21 stood at 203.8 mt
nutrient, which is almost 12 mt (6.3%) more
than in 2019/20. This is the biggest annual
increase in mineral fertilizer consumption
since 2009/10. The demand for nitrogen-
based fertilizers, which account for more
than half of global fertilizer consumption,
increased by 5.0% (+5.5 mt) to 113.7 mt
of N, while the demand for phosphate-
based fertilizers grew by 6.8% (+3.1 mt),
reaching 49.7 mt of P2O5. The demand for
potash fertilizers went up by 9.1% (+3.4 mt)
to 40.4 mt of K2O.
Significant growth in fertilizer consumption
in 2020/21 is explained by a combination
of several factors: surging prices for major
crops, a good fertilizer/crop price ratio
(fertilizer affordability), favourable weather
conditions in key markets, and stronger
government support for agriculture.
> Global crop prices enjoyed substantial
growth in 2H 2020, underpinned in part
by the growing demand for forage crops,
which itself was partially caused by the
recovery of hog production in China after
the swine flu epidemic in 2018–2019.
The United States Department of
Agriculture reports a 3% and 4% global
acreage expansion for grain and soy
respectively in the 2020/21 crop year.
> The weather conditions were favourable
in key consumer markets, including
India, China, Australia and South
Africa. Western and Central Europe also
enjoyed a spell of fine weather, which
had significantly improved since the
poor vegetation period of winter wheat
planted in late 2019.
+15%
Growth of demand for fertilizers
in Latin America
Global fertilizer consumption estimates, mt nutrient
Changes in demand geography in 2020/21 compared to the previous season, mt nutrient
188
191
204
198
204
250
200
150
100
50
0
Central and Western Europe
Middle East
Oceania
Africa
Eastern Europe and Central Asia
North America
East Asia
Latin America
South Asia
(1%)
(1%)
4%
3%
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10%
13%
8%
15%
11%
2018/19
2019/20
2020/21
2021/22
outlook
2022/23
-1
0
1
2
3
4
Nitrogen-based fertilizers, N
Phosphate-based fertilizers, P2O5
Potash fertilizers, K2O
> COVID-related restrictions and mitigation
measures introduced across the globe
had a limited effect on sales, logistics,
and supplies of fertilizers to farmers.
In fact, stronger government support
for agriculture amid the pandemic has
boosted the demand for fertilizers in
certain countries, even despite numerous
and ever-shifting sanitary measures
taking their toll on the fertilizer industry
in terms of supply, transportation and
delivery to farmers.
Unofficial data suggests that some farmers
purchased fertilizers in advance in 2020,
anticipating possible supply disruptions or
further currency weakening.
Regionally, South Asia and Latin America
accounted for nearly two thirds of the growth
in fertilizer consumption in 2020/21, owing
mostly to India and Brazil. The demand in
Africa, Oceania, Eastern Europe and Central
Asia also increased significantly. Relatively
low growth rates in fertilizer consumption
could only be observed in the Middle East
and some parts of Europe. In relative terms,
the 2020/21 demand grew particularly fast
in four regions: Latin America (+15%), Africa
(+13%), South Asia (+11%) and Oceania
(+10%).
According to preliminary IFA estimates,
global fertilizer demand could decline by 3%
(or by 5.5 mt nutrient) to 198.2 mt nutrient in
2021/22. In 2022/23, fertilizer consumption
is expected to rebound to 204 mt nutrient,
which should balance out the market and
ensure a favourable pricing environment for
both fertilizer and crop markets.
Nitrogen-based fertilizers, N
Phosphate-based fertilizers, P2O5
Potash fertilizers, K2O
Global fertilizer supply
In 2021, the supply of fertilizers was
rather erratic due to affordability issues
caused by disruptions and high raw
material prices. This prompted some
countries, including China, Egypt,
Turkey and Russia, to intensify their
self-sufficiency efforts and impose
trade restrictions on fertilizer exports in
the second half of the year as a means
to safeguard supply for the domestic
market and avoid possible shortages.
Key fertilizer markets experienced some
supply disruptions in 2021. The output
of major types of fertilizers – urea,
ammonium phosphate and potassium
chloride – was lower than in 2020,
according to preliminary IFA estimates.
Various supply disruptions seen in
different regions across all major product
groups have resulted in fertilizer prices
rapidly growing over the past six months.
The disruptions could be classified
into three main categories: physical,
economic and geopolitical.
> Physical disruptions hindered
the production of nitrogen- and
phosphate-based fertilizers in the
US. In the late summer, a series of
intense hurricanes caused temporary
downtime at fertilizer plants in the
Gulf of Mexico, halting the production
of nitrogen- and phosphate-based
products for several weeks.
> Economic headwinds affect the
production of nitrogen-based
fertilizers in Europe. Shortages in
the energy market led to a steep
rise in prices, with Europe facing
a particularly difficult situation as
prices there reached an all-time
high in 2H 2021. Compared to
the average annual European gas
price in 2020, which stood at USD
3.2 / MMBtu, regional costs of
natural gas production have risen
exponentially, often exceeding USD
30–35 / MMBtu throughout Q4
2021. Nitrogen fertilizer production
costs have also risen rapidly in
China, which relies on coal as the
key feedstock. Manufacturers in
both parts of the world were forced
to limit production for economic
reasons. For nitrogen-based
fertilizers, the cost of the energy-
intensive production has had
a direct impact on the market. Other
fertilizer markets have also become
increasingly affected by energy-
related headwinds: the production
of phosphate-based fertilizers, for
example, relies on energy-derived
products – ammonia and sulphur –
as raw materials.
> Geopolitical tensions also took their
toll on the fertilizer market in 2021,
with economic sanctions imposed
against Belarus being the most
significant factor. In June 2021, the
EU implemented sanctions against
certain industries of the Belarusian
economy, namely the oil, tobacco and
potash sectors. The US joined in with
even more crippling sanctions that
pose an additional threat to supplies
of Belarusian potash, especially if
they restrict the ability to accept
USD-denominated payments from
other countries. Any escalation of
sanctions could jeopardise global
supplies of potash fertilizers and food
security as a result.
48
49
1 Short-Term Fertilizer Outlook 2021–2022 Market Intelligence Service, IFA Secretariat, IFA Strategic Forum, November 2021.
Strategic Report Phosphate rock and phosphate-based
fertilizer market
According to IFA’s preliminary estimates,
global production of phosphate rock in
2021 stood at 211 mt, which is 4 mt or 2%
more than in 2020. The growth was mainly
associated with a favourable environment in
the markets for phosphate-based fertilizers
and other phosphate products, as well as
with the recovery of China’s phosphate
industry from COVID-related restrictions
imposed in 2020. North African countries
(Morocco, Algeria and Egypt) have also
ramped up their production.
Exports of phosphate rock totalled
roughly 31.5 mt in 2021, up 1.0 mt from
2020, primarily due to rising demand for
phosphate rock with low P2O5 content from
Asian markets (India and Southeast Asia).
Pricing in the phosphate rock market was
influenced by shifts in global prices for end
products (phosphate-based fertilizers), with
the usual time lag associated with contract
pricing in the majority of consumption
markets.
In 2021, global production of phosphoric acid
increased by roughly 300 kt to 47.0 mt of P2O5,
which is also explained by China recovering
from production disruptions caused by the
pandemic in 2020. The ramp-up in Chinese
production has partially offset declines in
North America and some Asian countries.
211 mt
global production of phosphate
rock in 2021
Global trade in DAP/MAP in 2021 was 31.7
mt, up 0.8 mt vs 2020, driven by rapid
import growth rates in North and Latin
America markets, particularly in 1H 2021,
as well as by favourable conditions in
agricultural markets. In 2021, global DAP
trade shed some 0.4 mt, mostly due to lower
import demand in India partially caused by
insufficient subsidies on phosphate-based
fertilizer imports. Exports of NPK fertilizers
remained roughly flat at around 18.5 mt.
Global prices for compound and complex
phosphate-based fertilizers were driven
by outpacing demand growth in key
consumption markets, particularly in
1H 2021. The restrictions on exports of
fertilizers in China to promote domestic
growth, combined with a sharp increase in
global energy prices, helped keep global
prices for fertilizers high in 2H 2021.
18.5 mt
Global trade in NPK fertilizers
31.7 mt
Global trade in DAP/MAP in 2021
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Phosphate rock prices, FOB Morocco (32% Р2О5), USD/t
Global DAP/MAP prices in 2021, FOB Baltic, USD/t
175
155
135
115
95
75
1000
800
600
400
200
January
February
March
April
May
June
July
August
September
October
November
December
January
February
March
April
May
June
July
August
September
October
November
December
47.0 mt
of P2O5 global production
of phosphoric acid
62.2 mt
global output of compound
fertilizers (DAP/MAP) in 2021
Preliminary data suggests that the global
output of compound fertilizers (DAP/
MAP) in 2021 totalled 62.2 mt, roughly the
same as in 2020. Higher DAP/MAP output
in China and Russia was negated by the
decline in North Africa and North America
due to process-related stoppages. In 2021,
global production of complex NPK fertilizers
increased by roughly 2.0 mt (to 98.1 mt)
primarily on the back of production recovery
in China, which also offset lower numbers in
Europe in the second half of the year.
Global NPK prices (15-15-15), FOB Baltic in 2021, USD/t
700
600
500
400
300
200
January
February
March
April
May
June
July
August
September
October
November
December
50
51
Strategic Report
Ammonia and urea
market
Preliminary estimates suggest that global
ammonia production shrank to 180 mt
in 2021, down 3% year-on-year, due to
disruptions in production and supply caused
by technical reasons in the first half of
the year and higher global energy prices,
particularly in the natural gas market in
Europe and Asia and the coal market in
China.
Merchant ammonia trade, which is largely
influenced by industrial consumption, is
expected to recover to nearly 19 mt in 2021,
nevertheless falling short of the previous
peak in 2018 (20 mt). This is associated with
import demand recovering in the US, India,
Southeast Asia and Europe, especially in the
second half of the year following a decline
in domestic production due to a surge in
natural gas prices. Greater import demand
for merchant ammonia was mostly being
offset by increased supply from Algeria,
Indonesia and Russia, despite lower exports
from the Middle East. Merchant ammonia
prices were largely determined by an
unbalanced supply/demand landscape and
a significant increase in global natural gas
prices.
The global urea market also exhibited
a downward trend. In 2021, global urea
production stood at around 171 mt, almost
4.0 mt down vs 2020, driven by production
cuts in China, Europe and several Asian
countries going through a record-high
growth of energy prices and subsequent
reduction in capacity utilisation.
Global urea trade volumes also declined
by around 2.0 mt mainly because of lower
import demand from India, despite other
major import markets (Europe, North and
South America) increasing their imports due
to cuts in domestic production and other
factors.
Global urea prices were driven both by
seasonal changes in the demand landscape
in the first half of the year and by record-
high price spikes in the second half caused
by high energy prices and restrictions on
urea exports in China to ensure domestic
supply.
Ammonia prices in 2021, FOB Baltic, USD/t
1,050
900
750
600
450
300
150
January
February
March
April
May
June
July
August
September
October
November
December
180 mt
global ammonia production in 2021
171 mt
global urea production in 2021
Potash fertilizer market
The potash market is an exception
to thedownward supply trend of 2021.
According to preliminary estimates, global
potash production stood at around 69 mt,
almost 2.0 mt more than in 2020, mainly
due to a ramp-up in production in Russia
and Belarus. Global trade volumes for
potassium chloride also increased on
the back of outpacing growth of import
demand in North and South America as
well as in Southeast Asia. At the same
time, the sanctions imposed against
Belarus, which accounts for almost 20%
of global potassium chloride exports, pose
a significant threat to the potash fertilizer
market going forward and have already
played a major part in the spike of potash
fertilizer prices in 2021.
69 mt
global potash production in 2021
Urea prices in 2021, FOB Baltic, USD/t
MOP prices, FOB Baltic, USD/t
930
780
630
480
330
180
700
630
560
490
420
350
280
210
140
January
February
March
April
May
June
July
August
September
October
November
December
January
February
March
April
May
June
July
August
September
October
November
December
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Strategic Report
The Company’s Role
in the Industry
Top-5
World’s №1
producer of high-quality
phosphate rock
(P2O5 content at 39% and above)
global producer of DAP/MAP
by capacity
Europe’s largest producer
of phosphate-based fertilizers1
№1
A leading supplier of all types
of mineral fertilizers in the
Russian market in aggregate
terms
№1
in Europe in terms of urea and mineral
fertilizer capacity concentrated at one
production facility (Apatit, Cherepovets)
One of the global leaders in production
of major types of fertilizers in terms
of profitability
The only Russian and one of the leading
European producers of monocalcium
phosphate feed grade and liquid complex
fertilizers
1 By total production capacity
for DAP/MAP/NP/NPK/NPS.
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55
Share of PhosAgro’s supplies in the key sales markets (share
of DAP/MAP/NPS/NPK supplies in total regional imports,
2021 estimates), %
56
18
13
6
7
Russia2
Europe
Latin America
Africa
India
2 Share in the total volume
of deliveries.
Global DAP production cost curve, FOB
production, kt
0
10,000
20,000
30,000
Source: CRU Industry Cost Curves 2021
Global urea production cost curve, FOB
production, kt
0
20,000
40,000
60,000
80,000
100,000
Source: CRU Industry Cost Curves 2021
Strategic Report Strategy
Strategy to 2025
In 2021, PhosAgro continued to make good progress towards
the goals of Strategy to 2025 approved by the Company’s Board
of Directors in 2019. The new strategic cycle envisages construction
of high-tech production sites and further ramp-up of agrochemical
output. In this context, 2021 marked an important milestone, with
production hitting a record high of 10.5 mt. I
Importantly enough, sustainability principles
and are deeply integrated in all of the Strategy
aspects
Expansion
of the foothold
in premium
markets
Increasing
sales in priority
markets
Higher share
of premium
fertilizer brands
in the sales mix
PhosAgro’s
contribution to the
UN Sustainable
Development Goals
ESG
Alignment
of production
and sales
Boosting
logistics
efficiency
Reduction
of transportation
costs
Developing
port
infrastructure
Zero workplace
incidents
and injuries
Reduced emissions
and water use,
waste recycling
Operating
efficiency
and production
growth
Stronger
operating
efficiency
Higher
self-sufficiency
in feedstock
Capacity
expansion
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ESG agenda
Capital investments
Addressing environmental efficiency,
climate issues, energy and resource saving
is integral to the Company’s Development
Strategy. Every addition to our production
capacities is designed to employ the
best available techniques and operated
in strict compliance with the applicable
sustainability standards. PhosAgro’s
framework for assessing promising
investment projects is based, among other
criteria, on their potential environmental
impact. In 2021, we created a methodology
for incorporating the carbon price into the
system for evaluating the climate impact as
a factor in our final investment decisions.
This methodology is currently in the process
of approval. In 2020, the Board of Directors
completed the integration of PhosAgro’s
climate and environmental agendas into
its business strategy by approving Climate
and Water strategies that set measurable,
achievable targets for minimising the
Company’s environmental footprint
through specific initiatives.
We are committed to making our
operations as green and energy-efficient
as possible. Based on this approach, in
2021 we re-equipped the aluminium
fluoride shop in Cherepovets with a view to
maximising the use of waste in production.
The project is in line with the principles
of circular economy and contributes to
UN SDG 12 as regards the sustainable
management of chemicals and all wastes
throughout their life cycle.
A disciplined approach to CAPEX
The minimum project IRR of 20%
Annual CAPEX
budget of up to 50% of EBITDA
More efficient working capital management
Expenditures1, RUB bln
Item
Investment projects
Maintenance
Non-industrial construction
Total
2019
actual
2020
actual
2021
actual
20.8
13.3
1.9
23.8
10.4
2.1
30.0
10.8
1.1
2022
plan
30.4
20.1
2.0
36.0
36.3
41.9
52.5
Financing of key projects in 2021,
RUB bln
Investments
in development, RUB bln
+28%
23.8
30.0
30.4
2.6
2.3
12.5
30.0
11.4
1.2
1 Excluding capitalised repairs.
2 Other investment projects: ramp-up of phosphate-
based fertilizer capacities in Cherepovets modernisation
of Ammonia-3 Plant in Cherepovets with an increase
of capacity to 2,350 tpd, retrofitting of MFPU No. 1
to switch to MAP production in Volkhov, increased output
of sulphuric acid in Balakovo
Capacity ramp-up programme in Volkhov
The second stage of development
at the Balakovo site
Development of the ore and raw material
base in Kirovsk
Aluminium fluoride production in Cherepovets
Other investment projects2
2020
Actual
2021
Actual
2022
Plan
56
57
Strategic Report
Increasing sales in priority markets
Targets — 2025
Status-2021
Target performance / above-target performance
Progress
Expansion
of the foothold
in premium
markets
Sales volume, mt
Russia and
the CIS
North
and South
America
Europe
3.7
3.5
3.1
2.9
3.5
2.8
Number of
distribution
and logistics
centres
35 31
Total storage
capacity, kt
>650 765
Higher share
of premium
fertilizer brands
in the sales mix
Liquid complex
fertilizer
storage capacity,
kt
62 66
Share of complex
fertilizers (NPK/NPS/PKS)
in total output
43% (5 mt)
35% (3.6 mt)
Progress
Progress
Boosting logistics efficiency
Reduction of
transportation
costs
Increased reliance on own
rolling stock
Use of innovative railcar
fleet
Alignment
of production
and sales
Rail infrastructure throughput
at key production sites,
mt
28.3 24.7
Developing port
infrastructure
Efficient mix of port capacities in terms
of costs and supply reliability,
mt
5.6 4.5
Operating efficiency and production growth
Capacity
expansion
Production of phosphate rock,
mt
Phosphate rock processing,
mt
Stronger operating
efficiency
11.1 10.7
8.6 7.9
Implementation of organisational
development projects with an IRR
of above
Mineral fertilizer and feed phosphate
production, mt
11.6 10.3
20% in line with the BAT
and sustainability criteria
New promising projects
Apart from projects envisaged by the Strategy to 2025, the
Company also considers and implements new promising
initiatives with a significant business and environmental
potential. These projects meet the criteria approved by the
Board of Directors as part of the Strategy (IRR above 20%)
and aim to promote further development in line with the
Company’s strategic priorities – progressive production growth,
innovative and ESG-compliant products and processes, and
operating efficiency.
The second stage
of re-equipping the aluminium
fluoride shop
in Cherepovets
IRR 20%
Project
schedule:
2021
Targets:
Investments:
Increase in
aluminium fluoride
production by 26%
(15 kt)
2.9 RUB bln
Status:
All production facilities were launched
in November 2021
Maintaining
high feedstock
self-efficiency
Ammonia
Sulphuric acid
76% 79%
91% 94%
Ammonium sulphate
75% 55%
Updating the Strategy
to 2025 and stating
the 2030 vision
The world has changed a great deal since 2019, when
we adopted our Strategy to 2025. Today, we are dealing
with new risks and witnessing new opportunities. Hence,
the need to refine our strategic calculations and plans.
We are currently working on an updated version of
Strategy to 2025 and further to 2030. It will be made
available before the year’s end. A special emphasis in the
updated strategy will be made on the ESG agenda that
has been deeply integrated in all aspects of our activities
and has become a key element of PhosAgro’s business
philosophy.
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59
Strategic Report
Increasing sales
in priority
markets
UN SDG:
SDG 2.4
Expanding sales of eco-efficient
mineral fertilizers and developing
innovative plant nutrition systems
SDGs 13.1 and 13.2
Producing mineral fertilizers which
enhance the quality of soils as natural
sinks of СО2 and help reduce GHG
emissions and adapt to climate change
Expansion of the foothold in premium markets
The Company’s strategic goal is to increase
sales in its priority markets by 2025: up to
3.7 mt in Russia and the CIS, 3.5 mt in North
and South America, and 3.1 mt in Europe
by strengthening its position as a producer
of fertilizers that are free of heavy metals
harmful to human health and soils amid
toughening of the EU cadmium regulations.
We are well on course to achieve this goal,
with strong sales in priority markets despite
the introduction of a countervailing duty
by the US in 2021. Given the unique eco-
efficiency of our products, we are optimistic
about reaching our Strategy to 2025 goals
with respect to the Company’s sales in the
European market. The sales breakdown of
premium markets is generally in line with our
strategy, with minor differences attributable
to changes in the market environment and
the netback-driven sales model.
PhosAgro fertilizer and feed phosphates structure in premium markets, kt
2021 actual
2025 strategy
1,055
2,919
10,257
3,461
1,255
3,700
11,555
3,500
2,822
3,100
Progress towards our targets
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Premium
markets
Russia and the CIS
Europe
North and South America
Other
43%
Share of complex fertilizers
2025 strategy
35%
Share of complex fertilizers
2021 actual
From 2018 to 2021, a total of over
RUB 2.5 bln was invested in the
development of the Russian regional
network. In 2021, the network’s total
storage capacity exceeded 765 kt,
including 66 kt for liquid mineral fertilizers
(a new record for Russia). The number of
distribution and logistics centres rose to 31.
In 2022, PhosAgro Group will focus on
further expanding its distribution network,
and developing existing and launching new
logistics centres in the regions with the
greatest agricultural growth potential.
SDGs 6.3, 12.4, 15.1
Promoting and raising awareness about
best farming practices and developing
the service model
PhosAgro Group is successfully
increasing the profitability of its sales
by active involvement in the most
high-margin markets and through
boosting sales of premium mineral
fertilizer grades, primarily complex
fertilizers
The ongoing expansion of storage and logistics capacities in Russia is in line with our strategy
Indicator
Distribution and logistics centre (DLC), kt
Storage capacity, kt
Liquid complex fertilizer storage capacity, kt
2021
Goal 2025
31
765
66
35
>650
62
Higher share of premium
fertilizer brands in the sales
mix
In 2021, the share of complex fertilizers
in production and sales saw a slight
year-on-year decrease. This is due
to the strong growth in Europe and
Latin America, markets that traditionally
consume large volumes of dual fertilizer
grades. As a result, monoammonium
phosphate and diammonium phosphate
had the highest margins in the reporting
year. We expect this positive trend
to continue in 2022.
Change in the product structure of the premium segment, kt
Fertilizer grades
Urea / AN / AS
MCP
APP
NPK/PK/PKS
MAP/DAP
Total
Share of complex fertilizers, %
2021 actual
2025 strategy
2,495
405
206
3,586
3,565
10,257
35
2,620
472
213
4,980
3,270
11,555
43
60
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Strategic Report Innovative products developed
by PhosAgro Group
In 2021, the share of complex fertilizers
in production and sales saw a slight year-
on-year decrease. This is due to the strong
growth in Europe and Latin America,
markets that traditionally consume large
volumes of dual fertilizer grades. As a
result, monoammonium phosphate and
diammonium phosphate had the highest
margins in the reporting year. We expect this
positive trend to continue in 2022.
Sales of fertilizers produced over the last
five years (2017–2021) amounted to
RUB 71 bln, or 17% of total revenue. Strong
R&D capabilities of NIUIF and PhosAgro
Group Engineering Centre and the flexibility
of production capacities achieved through
a fundamental overhaul in recent years,
allow the Company to deliver a high share
1,691.1 kt
Production of fertilizers with
micronutrients in 2021
Urea with urease inhibitor
11.2
16.9
40.0 60.3
of new grades. All of these give PhosAgro
a competitive edge and help the Company
meet the growing demand for the specific
grades that are best suited to certain crops,
soils, and farming practices.
Fertilizers with micronutrients
Fertilizers with micronutrients can be
accumulated by plants and are considered
one of the most potent ways to combat
malnutrition and reduce nutrient
deficiencies. In recent years, PhosAgro
Group has been aggressively ramping up its
production of this promising type of mineral
fertilizers.
Urea with urease inhibitor
Tighter environmental regulations in the EU
are shaping a new market for eco-efficient
fertilizers, such as urea with urease inhibitor.
The effects of use include an up to 98%
reduction in gaseous losses of nitrogen and
a 5% boost in crop yields as urea remains in
effect in the soil for extra 7–14 days, thus
extending the period of incorporation or
RUB71 bln1
Sales of fertilizers developed by PhosAgro
for the last five years
irrigation. The Company started producing
this innovative high-performance fertilizer
in 2020 and expect a strong demand in the
coming years.
Biological and biomineral fertilizers
PhosAgro’s Innovation Centre also focuses
on developing biostimulants and biomineral
fertilizers as part of the Green One for eco-
friendly agricultural products.
Work is ongoing to create special biological
and biomineral fertilizers. Biotechnology
advances are set to greatly boost crop
yields without damaging ecosystems and
bring the agriculture to a whole new level
of development. Given the limited soil
resources and the strong population growth,
biotechnology is key to achieving the global
food security.
Fertilizers with micronutrients, kt
2019 actual
2020 actual
2021 actual
2022 plan
524.2
621.3
1,691.1
1,519.1
2021
2025
Urea with urease inhibitor, kt
Emission reduction in CO2 equivalent, kt
1 Due to accounting features, the revenue shown in the
table does not take into account the margin of traders
included in the PhosAgro Group.
PhosAgro Group’s
digital ecosystem
In 2021, the target audience had over
4.5 million interactions with PhosAgro’s
digital ecosystem (+57% year-on-year).
Late last year, the number of active
users of PhosAgro’s digital services
exceeded 13,500.
There are 600 active personal
accounts registered with the Russia/
CIS online trading platform (each
user makes 1.2 orders annually
on average) and
1,164 active users of the AgroResult
app (each user makes 2.5
settlements monthly on average).
Pro Agro, the Company’s YouTube
channel, has 11,820 subscribers.
In 2021, we added six languages to our
website (the total number was 14 as
at the end of 2021). The Field Trials
section on our website became an
important element of communication
with our customers in the domestic
market.
In 2021, the number of visits
to the Russia/CIS platform that
converted to requests rose from
2.4% to 3%, while the number
of online requests to purchase
fertilizers amounted to 1,678
(up 99% year-on-year).
To further improve our Agro Calculator,
we introduced recommendations in
2021 for seasonal nutrition systems
covering four crops (sugar beet, corn,
soybean, and rapeseed).
In its second season, our YouTube
channel featured twelve playlists,
individual thematic videos, and
blogger endorsements. User statistics
(almost 12,000 subscribers and
over 5.4 million views) show that,
in 18 months, we were able to create
a popular agronomic YouTube channel
highlighting PhosAgro’s expertise
in plant nutrition systems.
Consultancy
Agronomic
YouTube channel
Fertilizer ordering
Agro Calculator /
monitoring and scouting
Information
Website available
in ten languages
Service and support
Online fertilizer sales
platform
Farmer’s personal
account
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63
Strategic Report Boosting
logistics
efficiency
UN SDG:
SDG 9.1
Developing rail infrastructure and
contributing to the development of local
communities through our value chain
Enhancing port network, along with
offering employment opportunities,
developing infrastructure and
implementing social investment
programmes
SDG 12.4
Managing chemicals and wastes wisely
throughout their life cycle, including
transportation
Reduction of transportation
costs
Rail transport accounts for the most part
of PhosAgro Group’s domestic shipments
(ca. 99%). In 2021, transportation volumes
totalled 23.1 mt, up 3% against 2020. Rail
shipments are also subject to key measures
aimed at reducing transportation costs.
Ensuring a reliable and secure supply
is a top priority for us.
In 2019–2021, we significantly increased
reliance on our own rolling stock, buying
mostly innovative railcars with a higher
capacity and longer run life. Increased
reliance on PhosAgro’s own rolling stock
means:
> higher cost efficiency, as corporate railcars
are cheaper in use than third-party rolling
stock;
> enhanced safety of operation and more
reliable supplies, as PhosAgro’s production
and logistics processes are less dependent
on third-party services;
> positive environmental effect, as the use
of innovative rolling stock with higher
cargo tonnage per railcar and train
reduces the impact on the environment
per tonne of cargo.
99%Rail transport accounts for
the most part of the Company’s
domestic shipments
Other efforts to cut logistics costs in 2021:
> signing a long-term (until 2024) service
agreement;
Given these results, we are considering
further purchases of railcars. For example,
the Company has already decided to acquire
1,000 extra mineral hoppers between 2022
and 2024.
> securing tariff preferences for the shipment
of liquid sulphur and sulphuric acid;
> reducing the rates for using third-party
rolling stock, outsourcing shunting services.
Alignment of production and sales
Rail infrastructure throughput capacity
at the Company’s fertilizer hubs is critical
to efficient transportation. Thanks to our
investment programmes, we have been able
to expand throughput capacity to or above
target levels over the last three years.
Cherepovets
As the Kryolite station has come on stream,
long trains (71 railcars vs the standard 56)
now run along the Apatity–Cherepovets–Ust-
Luga–Apatity loop. With this loop, created
under an ambitious joint project with Russian
Railways, long trains account for 65% of
PhosAgro Group’s transportation volumes.
The decision to electrify the Kryolite station
during its construction enabled PhosAgro
to spare diesel locomotives, resulting in a
positive economic and environmental effect.
The project came to an end in late 2021, with
the station operating as planned.
Without reliable, flexible, and cost-
efficient logistics, it is impossible to
ramp up supplies to premium markets
to any tangible extent and maintain
sales margins. Our key logistics efforts
focus on cutting transportation costs,
ensuring alignment of production
and sales, and developing port
infrastructure.
Balakovo
In 2021, an upgrade in Balakovo
prompted us to start planning the
development of infrastructure that
would facilitate shipments of a new
feedstock and allow for increased
transportation of finished products.
By 2025, we expect to ramp up rail
infrastructure throughput capacity
at the Balakovo branch to 8 mtpa vs
6.7 mtpa as at the end of 2021.
in operation: European Sulphur
Terminal in the Baltic Sea and
Murmansk Bulk Terminal in the Barents
Sea. Kotka Terminal (Finland) to be
put into operation for transhipment
ofpremium fertilizer brands.
The new transhipment destinations
enable the Company to optimise
empty runs and come closer to
achieving even more ambitious
goals of increasing the train carrying
capacity. The joint project between
PhosAgro Group and Russian Railways
provides for both companies’
infrastructure upgrades and aims
to start operating 100-car trains
on the Apatity–Cherepovets–Ust-
Luga–Apatity loop as early as in 2023.
If successful, this project will make
transportation of phosphate rock
and mineral fertilizers much more
efficient, both economically and
environmentally. Key to this endeavour
has been the already launched Kryolite
station in Cherepovets designed
to service 100-car trains.
Performance against targets,
mtpa
Volkhov
In 2022, we plan to expand the Volkhov
production site’s rail infrastructure
throughput capacity to 3.6 mtpa from
2.64 mtpa as at the end of 2021. The
project is on schedule, with the first
stage already completed. Apatit and
Russian Railways agreed on a deal to
co-finance the development of public
infrastructure as part of the second
stage. In line with the arrangement,
70% of the investment will be made by
Russian Railways and 30% by Apatit.
Developing port infrastructure
In addition to developing logistics
and sales infrastructure across Russia,
our priority market, we are working
to increase the reliability and efficiency
of our exports by both reducing
transportation costs and providing
state-of-the-art transhipment
capacities.
Our strategic aim is to develop and
maintain a balanced port sales network
in terms of costs and reliability with a
capacity of at least 5.6 mtpa. To achieve
this aim, in 2021 the Company signed
a number of transhipment contracts
covering 4.5 mtpa of fertilizers effective
through 2024. As of today, our overall
capacities reach 6.5 mtpa (expandable
to 8.5 mtpa in case of robust export
growth).
PhosAgro is a strong contributor
to the project that will see the erection
of Ultramar Terminal in Vistino,
Leningrad region. In the long term,
these ports will be active in addition
to the major ports currently
Rail infrastructure
throughput
2021 plan
2021 actual
2025 plan
Cherepovets branch
Balakovo branch
Volkhov branch
14.9
15.2
16.5
6.7
6.7
8.0
2.6
2.6
3.8
Switching to long trains
(100 railcars in length)
2020
Kriolit station
launched (Apatit)
2022
Port infrastructure
improvement in Vistino
with the Northern park
to be launched
(phase 2)
2023
Revamp of the Aykuven
railway station (Kirovsk
Branch of Apatit)
1) Higher traffic speed
2) Quicker railcar turnaround
3) Environmental effect
Ust-Luga
Ports of discharge
Apatity
Cherepovets
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Strategic Report Operating
efficiency
and production
growth
UN SDG:
Capacity expansion
Higher self-sufficiency in feedstock
Despite short-term volatility concerns,
mineral fertilizer demand is set to
demonstrate solid growth in the long term.
In order to respond to stronger demand,
PhosAgro focuses on expanding capacities
to produce its key products.
Strong vertical integration is PhosAgro’s
major competitive advantage. With our
phosphate rock reserves covering 100%
of the Company’s needs for raw materials
required for phosphate-based mineral
fertilizers, we are ramping up the production
of other key commodities, thus increasing
our self-efficiency in feedstock.
SDG 8.3
Maintaining and developing existing
operations and creating innovative
facilities
Progress towards our targets
Feedstock self-efficiency, %
SDG 12.4
Making eco-efficient products in line
with sustainability requirements and
maximising the use of production waste
in further processes
Indicators
Ammonia
Production, mt
Consumption, mt
Sulphuric acid
Production, mt
Consumption, mt
Ammonium sulphate
Production, mt
Consumption, mt
2021 strategy
2021 actual
2025 strategy
84%
1.9
2.3
95%
7.4
7.8
47%
0.3
0.6
79%
1.9
2.5
94%
7.4
7.8
55%
0.3
0.5
76%
1.9
2.5
91%
7.8
8.6
75%
0.7
0.9
Progress towards our targets, mt
Indicators
2021 strategy
2021 actual
2025 strategy
Production of nitrogen-based fertilizers
Production of phosphate-based fertilizers
and MCP
Production of phosphate rock
In-house processing of phosphate rock
2.2
7.7
10.5
7.9
2.4
7.9
10.7
8.0
2.6
8.9
11.1
8.4
7.9 mt
Production of phosphate-based
fertilizers and MCP in 2021
2.4 mt
Production of nitrogen-based
fertilizers in 2021
Stripping and mine development
preparations: +10 m at the
Kirovsky mine
First start-up facility
Development
of the Volkhov
branch
IRR of 27%
IRR of 20%
Project
schedule:
2022
Targets:
Ore reserves
95 mt
Project
schedule:
2021
Targets:
Fertilizer
output increase
by 881 kt
Investments:
RUB 36 bln
Status:
First ore mined
in February 2022
Investments:
RUB 30.7 bln
Status:
General scope of work to
switch production units No.
2 and 3 to MAP completed
For the third stage (production
of water-soluble MAP), launch
is scheduled for December 2022
Capacity ramp-up of the SK-20
sulphuric acid unit to 3.3 kt
per day (Balakovo)
Capacity ramp-up of the
Am-3 unit to 107%
IRR of 27%
Project
schedule:
2023
Targets:
Monohydrate
output increase
by 350 kt
Investments:
RUB 3.2 bln
Status:
Earthwork completed. Design
documentation development
in progress, tender procedures
and equipment procurement
underway
IRR of 20%
Project
schedule:
2022
Targets:
Output increase
by 53 kt
Investments:
RUB1 bln, including
technology costs
Status:
Works to replace the СО2 gas
recovery system packed bed and
catalyst reloading completed.
Debottlenecking soon to be
completed. Production launch
scheduled for April 2022
Operating efficiency
improvements
At PhosAgro Group, we are
implementing a whole range of
projects and initiatives to improve
our technologies and organisational
approaches to optimise production
processes. All of these projects meet
the threshold 20%+ IRR requirement
and criteria of best available
technologies and sustainability. Some
of the initiatives include:
Underground mining control
(second stage completed in 2021)
> Ore output at the combined Kirovsky
mine increased by 10%.
> Production capacity of underground
loaders at the Kirovsky and
Rasvumchorrsky mines increased
by 15%.
> Unique reporting system introduced,
including e-reports, equipment
performance reports, monitoring
reports, and calibration reports.
Digital twin in transport logistics
(in progress)
> Development of five-year target
model concept for transport logistics
management.
> Reduction of costs associated with
transporting feedstock and finished
products.
> Improvement of railcar turnaround
by one day.
> Improvement of transportation
efficiency by using various modes
of transport (rail, road, river, and
sea).
> Better transportation management.
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Strategic
Risks
Key risks associated with PhosAgro’s activities
Robust risk
management
is a sine qua non for
PhosAgro to achieve
its strategic goals and
sustainable development.
We continuously develop
and improve our risk
management framework,
which enables us to identify
external and internal risks in
a timely manner and develop
effective mitigants.
h
g
H
i
t
c
a
p
m
I
i
m
u
d
e
M
w
o
L
1
4
2
10
15
Low
17
18
6
21
3
9
7
8
11
13
12
14
16
22
Medium
Probability
19
5
20
High
List of key risks for 2021
Strategic risk
1
2
3
4
19
20
21
Strategic planning risk
Failure to deliver on SDGs
Social risk
HR risk
Climate risk
Infectious disease risk
Sanctions risk
Production risk
5
6
7
Production risk
Health and safety risk
Environmental risk
Financial risk
16
17
18
22
Credit risk
Currency risk
Commodity risk
Interest rate risk
Operational risk
8
9
11
12
Project risk
Business processes and systems risk
Information security risk
Economic security risk
Regulatory risk
10
13
14
15
Tax risk
Regulatory risk
Corruption risk
Reputational risk
Material strategic risks
Risk
Description
Risk mitigants
Key indicators /
risks materialised /
changes in the risk
Strategic planning
1
Risk associated with the
adoption of an incorrect
strategic decision and
ensuing management
decisions, resulting from
an erroneous assessment
of internal and external
factors that have an
impact on the Company’s
prospects for development
and its ability to achieve
strategic objectives.
The Company actively monitors both internal
and external factors that could impact the
strategy. PhosAgro also takes a systematic
approach to assessing the potential costs and
benefits of new strategic projects to facilitate
and improve the decision-making process.
In 2021, PhosAgro started updating its
strategy to 2030 to reflect the latest changes
in the external and internal environments.
Downside deviations
of actual strategic
performance from targets
No material risk events
occurred. The update of the
Company’s strategy helps
mitigate this risk.
Change in the risk:
Failure to deliver
on ESG and
sustainable
development goals
2
Risk factors include failure
to set ESG targets and
Sustainable Development
Goals (SDGs) or update
them in a timely manner,
as well as the lack of
resources and processes
necessary to achieve these
targets and goals.
The Board of Directors’ Sustainable
Development Committee helped set and
prioritise SDGs and strategic ESG targets.
To achieve the same, PhosAgro developed
and is successfully implementing the low-
carbon transition plan, the Climate Strategy,
the Water Strategy, the Energy Efficiency
Programme, and other initiatives.
Downside deviations
of actual ESG and SDG
performance from targets.
No material risk events
occurred.
Change in the risk: –
Significant work done in this area has enabled
the Company to materially improve its ratings
and become a leader in ESG.
For more information on the Company’s activities
and indicators in this area, see page 22
Social
3
Risk of an adverse social
environment in the regions
of operation
Downside deviations of
actual ESG performance
(social dimension) from
targets.
No material risk events
occurred.
Change in the risk: –
With its commitment to the principles of
partnership and cooperation between private
business and the government, the Company
runs a number of social programmes
on a proactive basis. Social projects are
designed, among other things, to support
local authorities in promoting sports and
culture, and enhancing the public utilities
and opportunities for growth in the cities
where the Company operates. Sustainable
development in the regions of operation is
one of the key goals the Company pursues in
its community activities.
For more information on the Company’s activities in
this area see the Contributing to Local Communities
section on page 190
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Risk
HR
4
Description
Risk mitigants
Developments and decisions
related to the hiring,
development and retention of
employees
PhosAgro Group runs independent and joint
programmes seeking to attract young talents,
including those from other regions, develop
employees’ skills and enhance employee motivation
as a way to improve retention and efficiency rates.
Given the rising number of employees working from
home, PhosAgro Group has introduced an online
personnel appraisal system along with additional
qualification criteria.
For more information on the Company’s activities in this
area, see the People Development section on page 122
Key indicators /
risks materialised /
changes in the risk
Personnel turnover and skill
mismatch
No material risk events
occurred. The ongoing
correction in the labour
market contributes to higher
exposure to this risk.
Change in the risk:
Production
5
Technical/industrial disruptors
of production processes,
unscheduled equipment
downtime
PhosAgro Group seeks to ensure uninterrupted
operation of machinery and reduce unscheduled
equipment downtime. To that end, the Company
invests in the construction and upgrade
of equipment and carries out preventative
maintenance and major overhauls by relying
on backup equipment and a reserve pool of
components, accessories and spare parts.
PhosAgro Group’s insurance programme covers the
risk of production disruptions.
Unscheduled equipment
downtime
No material risk events
occurred.
Change in the risk: –
Key indicators /
risks materialised /
changes in the risk
Exceeding maximum
permissible levels of
negative environmental
impact.
No material risk events
occurred Regulators’ actions
to tighten control over the
environmental footprint
contribute to higher
exposure to this risk.
Change in the risk:
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Risk
Description
Risk mitigants
Environmental
7
Risk of potential
environmental damage
resulting from the
Company’s operations
PhosAgro Group has put in place the
Environmental Policy, the Water Strategy,
and the Code of Conduct for Counterparties
setting out key environmental requirements
for suppliers and contractors. PhosAgro
conducts regular analysis and assessment
of its impact on the environment. The
environmental impact is mitigated through
the upgrade of treatment and warehousing
facilities and the implementation of energy
efficiency programmes. PhosAgro Group
implements projects to address all the main
areas of environmental impact (water use,
greenhouse gas and other emissions, waste,
biodiversity).
The Company partners with the UNESCO
and the International Union of Pure and
Applied Chemistry (IUPAC) to provide research
grants as part of the Green Chemistry for Life
project seeking to protect the environment
and human health through energy efficient
processes and eco-efficient technologies
based on innovative solutions. PhosAgro’s
investment projects harness the best
available techniques to reduce unit feedstock
and energy costs while also cutting unit
emissions of regulated substances. The
Company discloses its environmental impact
minimisation goals and performance in line
with applicable laws and as part of global
initiatives (CDP, TCFD).
For more information on the Company’s activities
in this area, see the Sustainability Report:
Environmental Review section on page 156
Health and safety risk
6
Risk associated with injuries,
occupational illnesses,
accidents and incidents at
production facilities, and non-
compliance with statutory
requirements in the realm of
health and safety.
PhosAgro Group enforces health and safety in
workplaces in line with applicable laws and best
global practices. To that end, the Company trains
staff in health and safety and regularly checks their
knowledge, promotes safety culture, and makes sure
that all contractors adhere to the health and safety
standards. In addition, safety audits and inspections
ensure compliance with applicable regulations and
OHSAS 18001 requirements. Tasks and measures to
reduce the corresponding risks in various PhosAgro
Group’s activities are defined in its health and safety
documents.
For more information on the Company’s indicators in this
area, see the Health and Safety Review section on page 138
Workplace injuries and other
incidents
2021 saw some risks
materialise in terms
of workplace injuries.
The Company carefully
investigated each accident,
with remedial action plans
developed to prevent their
recurrence.
Change in the risk: –
Project
8
Risk associated with delays
and budget overruns in
construction and upgrade
projects, along with failure
to deliver project efficiency
targets.
PhosAgro Group strives to adhere to approved
project budgets and schedules and to take a
unified implementation approach leveraging
a variety of project management tools. All
projects go through a multi-step review
and approval process. For large-scale and
strategically important projects, dedicated
project management offices are set up. The
Company regularly monitors progress against
project budgets and deadlines.
Downside deviations of
actual project efficiency
indicators from targets.
No material risk events
occurred.
Change in the risk: –
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Risk
Description
Risk mitigants
Business processes
and systems
9
Inefficiency or disruption
of the Company’s business
processes, including risks
related to counterparties and
supply chain.
GRI 207-2
Tax
10
Potential claims lodged by tax
authorities in response to the
Company’s failure to correctly
file tax returns or pay taxes in
due time
PhosAgro seeks to maximise efficiency of all its
business processes and systems.
Business process efficiency reviews are conducted
on a regular basis to identify potential bottlenecks
and develop and implement efficiency improvement
initiatives. PhosAgro Group strives to minimise the
risk of disruptions in supplies of key raw materials to
its production facilities.
To that end, PhosAgro Group uses multi-stage
tender procedures and enters into long-term
contracts with its most reliable suppliers. In addition,
it continuously works to optimise the logistics
infrastructure and ensure sufficient rolling stock.
The Company also monitors its IT infrastructure
on an ongoing basis and carries out a number of
initiatives to mitigate risks associated with business
process disruptions caused by technological factors
or cyberattacks.
PhosAgro Group complies with tax legislation in
the countries where it operates. The Company
tracks all changes (including the planned ones) in
tax laws, analyses the law enforcement practices,
and seeks clarifications from the government on
taxes. In addition, law and accountancy experts
are engaged to advise on the administration of
applicable tax laws. The Company also has a tax
monitoring system in place to quickly identify and
minimise tax risks in coordination with the Federal
Tax Service of Russia.
Key indicators /
risks materialised /
changes in the risk
Downside deviations of actual
business process indicators
(by focus area) from targets.
No material risk events
occurred.
Change in the risk: –
Tax claims
No material risk events
occurred.
Change in the risk: –
Information security
11
Losses incurred on PhosAgro
Group’s property and assets
as a result of unauthorised
access to its information
systems or disclosure of
confidential data
PhosAgro Group implements a number of initiatives
to prevent unauthorised access to its information
systems and disclosure of confidential data. A
wide variety of technical and software solutions,
including those based on encryption, are used
to control access to information resources and
systems. Access rights are granted to specific
user groups. There is a clear definition of what
constitutes confidential information and how it
should be handled. The Company undertakes
regular audits to ensure strict compliance with
the Company’s confidentiality policy. In December
2021, the Company’s Board of Directors adopted
the Information Security Policy.
Unauthorised disclosure
of confidential data,
unauthorised access to IT
systems.
No material risk events
occurred.
Change in the risk: –
Risk
Description
Risk mitigants
Economic security
12
Losses incurred on
PhosAgro Group’s property
and assets as a result
of economic crimes
committed by employees
or third parties, including
fraud and theft.
The Company takes steps to prevent
potential damage to its property and
assets as a result of economic law
infringements, including by introducing
access authorisations to the Company’s
administrative and production facilities,
clearly differentiating between
responsibilities as part of contract or
transaction execution, vetting counterparties
before signing a contract, and putting
in place a dedicated hotline. Moreover,
additional checks are undertaken by a variety
of PhosAgro Group’s functions.
Key indicators /
risks materialised /
changes in the risk
Theft and fraud incidents.
No material risk events
occurred.
Change in the risk: –
Regulatory
13
Corruption
14
Untimely receipt/extension
of licences; legislative
changes that might bring
about higher cost of
doing business, restrictive
policies by regulators,
weaker equity story of the
Company and/or adverse
transformation of the
competitive landscape.
PhosAgro is in full compliance with
applicable laws. To make sure it gets timely
updates on potential legislative changes,
the Company closely tracks initiatives of
legislators, the government and regulators,
and takes part in discussing such initiatives
and drafting relevant recommendations in
partnership with professional associations.
PhosAgro Group prepares and submits
documents in due time to receive or extend
licences required for its business.
Deviations related to
regulatory compliance.
No material risk events
occurred.
Change in the risk: –
Losses resulting from non-
compliance or inadequate
compliance with
applicable anti-corruption
laws by PhosAgro
Group or its employees
(penalties levied against
the Company by state
authorities and other
damages)
PhosAgro Group makes sure its facilities
and partners fully comply with applicable
anti-corruption laws. To that end, it provides
training in combating corruption and
administrating the anti-corruption law, and
promotes zero tolerance towards corruption
among the Company’s employees and
partners. Among other things, the Company
has approved the Anti-Fraud and Anti-
Corruption Policy, the Code of Ethics, and the
Regulations on Conflict of Interest. PhosAgro
Group’s counterparties are obliged to declare
their compliance with anti-corruption laws.
The Company is a member of the Anti-
Corruption Charter of Russian Business.
Corrupt practices, conflicts
of interest.
No material risk events
occurred.
Change in the risk: –
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73
Strategic Report Risk
Description
Risk mitigants
Reputation
15
Damage caused to the
Company’s business
reputation as a result of
misleading or defamatory
information or allegations
about the Company made
publicly available, leakages of
confidential information, and
breaches of business ethics
on the part of the Company’s
employees.
In its operations, PhosAgro demonstrates
commitment to transparency by disclosing all
relevant material facts and circumstances. The
Company has adopted an information policy and a
media engagement policy. Information about the
Company is available on its website and in the mass
media. PhosAgro provides comments in response to
media enquiries and regularly monitors coverage in
both Russian and international (social) media.
To protect its business reputation, the Company has
approved the Code of Ethics setting out unified rules
for PhosAgro’s employees based on the principles of
integrity, good judgement, fair play and partnership
and designed to support the Company’s success.
Key indicators /
risks materialised /
changes in the risk
Stakeholder confidence
No material risk events
occurred.
Change in the risk: –
Risk
Description
Risk mitigants
Currency
17
Financial losses arising
from unfavourable
changes in FX rates against
the Company’s base
currency.
In the context of oil price volatility and
fluctuations of the rouble exchange rate against
major international currencies, the Company
seeks to align the currency breakdown of its
debt financing with the FX structure of its
sales. As of now, most of PhosAgro’s debt is
denominated in US dollars as a natural hedge
against predominantly USD-denominated
sales. The Company carefully tracks analyst
forecasts and factors that may influence the
rouble exchange rate against major currencies.
If need be, PhosAgro can hedge its FX positions
either fully or partially.
For more information on the Company’s activities
and indicators in this area, see the Financial Risk
Management. Currency Risk section of the Notes to
the consolidated financial statements on page 316
Key indicators /
risks materialised /
changes in the risk
Adverse changes in
exchange rates
No material risk events
occurred.
Change in the risk: –
Credit
16
Financial losses caused by the
failure of buyers, commercial
contractors and other
financial counterparties to
fulfil their financial obligations
to PhosAgro Group in full and
on time
PhosAgro has approved policies on managing
credit risks to institutionalise a number of credit
risk mitigation techniques, including deliveries
against full or partial prepayments with full or
partial insurance of credit risks, use of letters of
credit, and factoring (securitisation) of accounts
receivable. Providing advance payments to
suppliers and contractors is only considered after
the counterparties have proved their reliability or
after they have offered adequate bank guarantees
for advance payments that exceed approved
internal limits. The Company partners with banks,
financial organisations and insurance companies
that boast a high level of financial stability and
meet the criteria set out in the Company’s treasury
policy. PhosAgro monitors all covenants under the
existing loan agreements on an ongoing basis.
For more information on the Company’s activities and
indicators in this area, see the Financial Risk Management.
Credit Risk section of the Notes to the consolidated financial
statements on page 318
Overdue accounts receivable,
provision for bad debt.
No material risk events
occurred.
Change in the risk: –
Commodity
18
Losses associated with
unfavourable changes
in the market prices for
mineral fertilizers and
other products or a hike
in prices for key feedstock
and equipment sourced by
PhosAgro Group.
Adverse changes in product
and feedstock prices
No material risk events
occurred. However, potential
correction in mineral
fertilizer prices following
their strong growth in 2021
contributes to a moderate
increase in this risk.
Change in the risk:
In the context of heightened price volatility
in the core product markets, PhosAgro
Group takes consistent steps to optimise
its sales structure in terms of the fertilizer
grade offering and regional sales focus as
a way to maximise the Company’s margins.
PhosAgro Group also continues to increase
the share of sales to end consumers, improve
production efficiency and offer its customers
add-on services such as packaging, blending
and storage. PhosAgro Group has offices in
Buenos Aires (Argentina), Belgrade (Serbia),
Hamburg (Germany), Bayonne (France),
Zug (Switzerland), Limassol (Cyprus), Vilnius
(Lithuania), Warsaw (Poland), São Paulo
(Brazil) and Singapore. With a foothold firmly
established in the priority export markets,
the Company can respond more quickly to
changes in the market demand and customer
needs. To reduce its feedstock and equipment
expenses, PhosAgro Group invites multiple
suppliers to take part in tenders, enters into
long-term supply contracts and develops
lasting relationships with its suppliers.
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75
Strategic Report
Risk
Description
Risk mitigants
GRI 201-2
Climate
19
Risks associated with changes
in natural processes or
phenomena as a result of
climate change (physical
factors) or with political,
economic, financial or
other decisions made by
governments, multilateral
organisations, financial
institutions, or producer or
consumer associations or
other NGOs to curb climate
change by reducing GHG
emissions through carbon
border adjustment or
restrictions on the use of
fossil fuels or non-renewable
energy (transitional factors).
Processes to identify and assess climate change
risks are being integrated throughout the value
chain and form an integral part of PhosAgro
Group’s risk management and internal control
framework.
The Board of Directors approved PhosAgro’s
climate strategy, the key elements of which
are analysis of climate risks and opportunities,
scenario analysis, science-based targets, and a
low-carbon transition plan. In accordance with the
climate strategy, priority actions are being taken
to develop and implement the following measures:
direct (Scope 1) emission reduction programmes;
an internal energy efficiency programme, and
communication with energy suppliers to improve
the climate profile of energy supplies (Scope 2);
and a supplier and customer engagement plan
and supplier ESG ratings (Scope 3).
Thanks to these actions, the Company has
improved its ratings for climate disclosure (CDP)
and sustainable development (Sustainalytics, S&P,
and MSCI ESG).
Key indicators /
risks materialised /
changes in the risk
Adverse deviations resulting
from climate impacts (by
focus area).
In 2021, there were severe
weather events, with effects
including heat waves and
squalls. However, at this
stage it is quite difficult to
assess the extent to which
this weather was caused by
climate change. In any case,
PhosAgro Group did not
incur any significant losses
associated with these natural
phenomena. At the same
time, potential changes
related to transition climate
factors contribute to higher
exposure to this risk.
Change in the risk:
Risk
Description
Risk mitigants
Sanctions
21
Foreign sanctions imposed
on the Group’s companies
The global nature of international economy
and increased geopolitical tensions create
a background for various sanctions to be
imposed on the Russian economy and the
Company’s foreign operations by individual
countries or their groups. PhosAgro Group’s
flexible production and sales model would help
minimise any negative impact should such a
risk event occur.
Interest rates
22
The Company borrows
money to finance its
investment programme
and working capital
requirements, including
via floating interest rate
loans. Rising floating rates
might lead to higher debt
service costs and adversely
impact the bottom line.
Should the Company accumulate significant
floating interest rate borrowings, it would
hedge this risk using interest rate derivatives.
PhosAgro closely monitors and manages
its fixed-to-floating debt ratio to mitigate
interest rate risk.
For more information on the Company’s activities
and indicators in this area, see the Financial Risk
Management. Interest Risk section of the Notes to
the consolidated financial statements on page 318
Key indicators /
risks materialised /
changes in the risk
Losses associated with
sanctions.
No material risk events
occurred. At the same
time, increased geopolitical
tensions contribute to an
increase in this risk.
Change in the risk:
Losses associated with
changes in interest rates.
No material risk events
occurred.
Change in the risk: –
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Infectious diseases
20
Risks associated with the
outbreak and spread of
infectious diseases that
pose a threat to business
continuity.
2021 saw further spread of a newly discovered
coronavirus (COVID-19) around the world.
Confirmed cases, business
process disruptions.
PhosAgro Group has been taking a set of measures
to prevent mass infection and to support vaccination
among its employees and local communities in
its regions of operation (jointly with government
agencies). Thanks to these measures, PhosAgro
Group managed to minimise the pandemic’s
negative impact on its operations, ensure business
continuity and deliver on its business targets. The
Company’s successful experience of COVID-19
response and the procedures it has established
help react to further developments associated with
COVID-19, as well as to other infectious disease
outbreaks.
The number of confirmed
cases among PhosAgro
Group’s employees in 2021
generally follow overall trends
in the Company’s regions
of operation. At the same
time, by quickly developing
and putting in place
anti-COVID-19 response
measures, PhosAgro Group
ensured business continuity
and delivered on its targets.
Change in the risk: –
76
77
Strategic Report
E
C
N
A
M
R
O
F
R
E
P
W
E
I
V
E
R
Unique mineral resource base.
The mine life is estimated
at around 60 years.
Thanks to its magmatic origin,
phosphate rock mined
on the Kola Peninsula boasts
exceptional purity.
High-quality phosphate rock
(P2O5 content at 39%
and above).
Efficient products
for bumper crops
In 2021, PhosAgro was at its best in many respects. The Company
continued to strengthen its industry-leading profitability through
cost control programmes and financial and investment discipline.
Our objective is to set new standards for the industry in terms
of product eco-efficiency as a way to promote public health, protect
the environment, and prevent air and water pollution. We are
integrating sustainability principles into all aspects of our operations.
80
Financial
performance
88
Operational
performance
93
Customers
and product
management
104
Research
and education
114
Supply chain
122
People development
138
Industrial
safety
156
Environmental
review
190
Contributing to local
communities
78
79
79
79
Об отчете О компании Стратегический отчет Обзор результатов Корпоративное управление Акционерный капитал Финансовая отчетность Дополнительная информацияАкционерный капитал
Financial performance
Key external drivers of financial results
Other drivers of PhosAgro's outstanding financial performance in 2021 along with
an increase in sales and competitive cost levels include:
In 2021, the Company’s EBITDA more than
doubled year-on-year to a record
RUB 191.8 bln. PhosAgro also remains
a leader among its direct competitors by
EBITDA margin, which grew to 45.6%
in 2021. The robust growth was driven by
historically high output and sales volumes
and favourable conditions in global
agricultural markets.
Our financial performance reached record
highs for the second consecutive year.
Importantly, this upward trend comes
on the back of an increase in fertilizer
output and sales, supported by our ability
to maintain competitive cost levels and
our long-term investment programme.
In addition, our strong performance in
2020–2021 is driven by favourable price
conditions in the global markets.
In the reporting year, we continued
implementing our development projects
and increased investment in fixed assets,
including capitalised overhauls, by 17%
year-on-year to RUB 48 bln. These funds
were allocated to finance the final stage
of construction of an advanced production
facility in Volkhov and other projects under
PhosAgro’s long-term development
programme. Despite significant spending on
PhosAgro Group’s development, our efforts
to improve efficiency and sustainability
of all business processes coupled with a
flexible sales system focusing on the most
profitable markets resulted in an 83% year-
on-year growth of free cash flow to a record of
RUB 78 bln.
As at the end of 2021, our net debt to
EBITDA ratio decreased to a comfortable
level of 0.8x vs 1.8x as at 31 December 2020,
mainly due to robust financial performance
and a well-balanced investment
programme.
We expect the favourable trend in
agricultural markets to continue into 2022
due to low carry-over stocks of key crops
(primarily grain cereals and oilseeds).
This will help maintain stable earnings for
farmers and fertilizer demand. Restrictions
on fertilizer exports from China and Russia
aimed at bolstering domestic supply will
be an additional factor supporting prices,
especially during the seasonal spikes of
activity in the key markets. The continued
price volatility in the global energy
markets that is particularly expected in
the European natural gas market will be
one of the main price factors for the global
merchant ammonia and nitrogen-based
fertilizers markets.
Alexander Sharabaiko
Deputy CEO for Finance and International
Projects
significant growth in fertilizer consumption,
especially in Latin America, Africa, South Asia
and Oceania, due to a good fertilizer/crop
price ratio (fertilizer affordability), favourable
weather conditions in key markets, and stronger
government support for agriculture;
restrictions on exports
of phosphate-based fertilizers
from China to bolster
domestic supply;
growth of global crop prices,
underpinned in part by the increasing
demand for forage crops, which itself
was partially caused by the recovery
of hog production in China after
the swine flu epidemic in 2018–2019.
Revenue analysis
RUB191.8 bln
Record-high EBITDA in 2021
Revenue for 2021 grew by 65.6%
year-on-year and amounted to
RUB 420.5 bln. The growth was mainly
associated with PhosAgro Group’s
record output of finished products,
the recovery in global fertilizer
prices during the year and strong
demand from end consumers
on the back of low inventory
levels in key markets.
FY 2021 financial and operational highlights, RUB mln1
Item
Revenue
EBITDA2
EBITDA margin
Net profit
Adjusted net profit3
Free cash flow
Net debt
12M net debt / EBITDA
Sales volume, kt
Phosphate-based fertilizers and feed phosphates
Nitrogen-based fertilizers
Total fertilizers
Other products
RUB 420.5 bln
Revenue for 2021
+66%
Growth year-on-year
2020
2021
Change y-o-y, %
253,879
85,659
33.7%
16,921
43,370
42,519
420,488
191,810
45.6%
129,674
130,205
77,857
31.12.2020
31.12.2021
156,875
153,718
65.6
123.9
11.9 p.p.
666.3
200.2
83.1
0.80
2021
Change y-o-y, %
1.83
2020
7,669
2,286
9,955
184
7,762
2,495
10,257
177
1.2
9.1
3.0
(3.8)
2.9
Total fertilizers and other products
10,139
10,434
1 RUB/USD exchange rate: average rate in Q4 2021 – 72.6; average rate in Q4 2020 – 76.2; rate as at 31 December 2021 – 74.3; rate as at 31 December 2020 – 73.9.
2 EBITDA is calculated as operating profit adjusted for depreciation and amortisation.
3 Adjusted net profit means net profit less foreign exchange gain or loss from financing activities
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81
Performance Review
Revenue breakdown by key product, RUB bln
Item
Phosphate-based products
Nitrogen-based products
Other
Total
Revenue breakdown by region, RUB bln
Region
Russia
Europe
South America
North America
India
Africa
CIS
Asia
2020
2021
85.1
66.5
41.9
12.3
21.6
12.3
10.5
3.6
110.5
116.8
103.9
31.8
19.8
17.9
12.2
7.7
Operating costs analysis
Cost of sales, RUB mln
Item
2020
2021 Change y-o-y, %
Depreciation and amortisation
Materials and services
Phosphate rock transportation
Repair
Drilling and blasting
Other materials and services
Raw materials
Ammonia
Sulphur and sulphuric acid
Potassium
Natural gas
Ammonium sulphate
Salaries and social contributions
Electricity
Fuel
Products for resale
Customs duties
Freight, port and stevedoring expenses
Russian Railways and operators’ fees
Other
Total
23,743
40,937
8,134
10,134
3,168
19,501
24,812
47,084
9,105
11,373
3,486
23,120
35,514
63,534
4,802
4,360
12,253
12,342
1,757
13,807
6,311
3,885
9,333
1,482
19,128
11,452
1,111
14,277
17,707
16,574
12,635
2,341
15,286
6,740
5,578
12,725
2,483
28,587
10,728
1,250
166,703
218,807
4.5
15.0
11.9
12.2
10.0
18.6
78.9
197.3
306.1
35.3
2.4
33.2
10.7
6.8
43.6
36.3
67.5
49.5
(6.3)
12.5
31.3
2020
203.6
38.7
11.6
253.9
2021 Change y-o-y, %
333.0
71.9
15.6
420.5
64
86
35
66
In 2021, cost of sales grew by 31.3% year-
on-year to RUB 219 bln, mainly on the back
of higher sales volumes and increased prices
for key feedstocks.
Raw materials costs added 79% year-on-
year and amounted to RUB 63.5 bln as a
result of a significant increase in the global
prices for all key inputs, including sulphur
and sulphuric acid, ammonia, potassium,
ammonium sulphate and natural gas.
Despite the higher costs, PhosAgro remains
one of the industry's most efficient players
and leads the pack globally in terms of
production costs. The main way we ensure
effective cost control is by sourcing the
key inputs and materials from domestic
suppliers.
EBITDA
EBITDA in 2021 vs actual 2020, RUB bln
85.7
2.5
147
(46.4)
3
191.8
2020
Sales
volumes
Fertilzer
prices
Costs
FX
2021
2021 EBITDA (plan/actual), RUB bln
+ 20,282 (+12%)
171.528
101
24.692
1.546
(6.925)
409
459
191.810
In 2021, EBITDA more than
doubled year-on-year and
reached a record
RUB 191,8 bln.
EBITDA margin for the
reporting period grew to
45.6%.
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12M 2021
plan
Sales
volume
Price
FX rate
(73.3>37.7)
Prices
for raw
materials
Fixed
costs
12M 2021
actual
FX gain/
loss from
operating
activities
Free cash flow
EBITDA to FCF conversion in 2021, RUB bln
191.8
0.2
(32.0)
(28.8)
(4.9)
126.2
(48.4)
77.9
In 2021, the Company’s
free cash flow increased by
83.1%
year-on-year and
amounted
RUB 77.9 bln
Capital investments for the year
amounted to RUB 48.0 bln and were
focused around completing the
construction of a large production
facility in Volkhov, wrapping up the
project to expand aluminium fluoride
capacity in Cherepovets, and developing
the ore and raw material base in Kirovsk.
EBITDA
Adj.
WC
Tax
paid
Interest
paid
OCF
ICF
FCF
Debt
At the 2021 year-end, our net debt
to EBITDA ratio was 0.8x vs 1.8x as
at 31 December 2020, primarily
thanks to EBITDA growth and a well-
balanced investment programme.
Net debt as at 31 December 2021
was slightly down year-on-year at
RUB 153.7 bln.
In September 2021, the Company’s
SPV issued a USD 500 mln 7-year
Eurobond with a coupon rate of
2.6%, listed on the Irish Stock
Exchange.
Loans and borrowings breakdown
by rate type as at 31 December
2021, %
5
95
Floating rate
Fixed rate
82
83
Performance Review Loans and borrowings breakdown by
currency as at 31 December 2021, %
Repayment schedule, RUB bln
Loans
Bonds
12.7 11.6 16.9
3.9
11.3
2.3
-
-
37.1
-
37.1
-
-
37.1
2
7
91
RUB-denominated
EUR-denominated
USD-denominated
2022
2023
2024
2025
2026
2027
2028
2022
2023
2024
2025
2026
2027
2028
Generated and distributed direct economic value, mln RUB
GRI 201-1
Item
Direct economic value generated
Revenue from sales
Revenue from other sales
Revenue from financial investments
Revenue from sale of assets
Economic value distributed
Operating expenses, including:
wages and other payments to employees
social expenses
Payments to providers of capital:
payments to shareholders
payments to creditors
Tax expenses and other payments to government:
including income tax expense
Economic value retained
Stakeholder
Wide range
of stakeholders
Suppliers
and contractors
Employees
Shareholders
and creditors
Government
2019
249,583
239,130
8,995
1,458
0
(243,077)
(194,090)
(24,706)
(2,661)
(32,244)
(4,635)
(12,108)
(9,724)
6,506
2020
254,854
242,262
11,617
975
0
(247,254)
(193,263)
(28,540)
(2,570)
(38,852)
(4,132)
(11,007)
(8,045)
7,600
2021
422,459
404, 849
15,639
1,971
0
(363,715)
(250,101)
(32,781)
(3,378)
(72,260)
(4,335)
(37,019)
(31,073)
58,744
Tax policy
Management approach
GRI 207-1
In 2021, the topic of taxes was for the first time
identified as material for disclosure based on
polling of executives and key stakeholders
on significant aspects of the impact of the
Company’s operations on the society and
the environment, as well as following the
analysis of the requirements of international
ESG rating agencies. For more information on
our approach to identifying material topics to
be disclosed in an integrated report, see the
About this Report section.
In 2021, the Company drafted a tax
strategy, which will be discussed at the
next meeting of the Audit Committee
and presented to the Board of Directors
in the first half of 2022. The tax strategy is
updated and refined as necessary, but at
least once every two years. Our approach
to taxation was developed in accordance
with the Company’s Strategy to 2025 and
combines social responsibility for developing
and maintaining the well-being of regions
across PhosAgro’s footprint, minimising tax
litigation risks, and maximising the use of the
Company’s leverage toolkit stipulated by law
for actively investing companies, in particular
Investment Protection and Promotion
Agreements (IPPAs) and Special Investment
Contracts (SPICs).
The Group’s taxation principles
Centralisation and alignment
The Group follows a unified and
consistent tax policy aligned with its
sustainability targets and ensures that
all of its companies take a uniform
approach to meeting tax legislation
requirements.
Legality
Group companies rigorously comply with
the Russian tax legislation, international
agreements and other taxation acts,
as well as the legislation of foreign
jurisdictions in the Group’s geography,
including the EU legislation.
Integrity
real economic substance of the Group
companies’ business operations. Group
companies do not carry out transactions
with a primary purpose of tax savings, nor
do they employ aggressive tax planning
practices.
Group companies are located in the
jurisdictions of their actual operations.
The Group comprises no companies
registered in offshore zones recognised
as such by the Russian Federation or
in territories that do not exchange tax
information with the European Union.
Effectiveness
The Group’s tax strategy is implemented
rationally, taking into account the
interests of investors and shareholders,
as well as the Group’s long-term strategic
development goals. The Group relies on
a leverage toolkit that complies with the
applicable laws and includes Investment
Protection and Promotion Agreements
(IPPAs) and Special Investment Contracts
(SPICs).
Due diligence
Group companies undertake
all necessary measures to avoid
entering into transactions with
counterparties whose activities may
indicate dishonesty or evasion of tax
liabilities (obtaining an unjustified
tax benefit). The Group has supplier
screening procedures in place to verify
the business integrity of its future
counterparties before entering into
agreements.
Planning
To fulfil its fiscal obligations in an efficient
and timely manner, the Group procures
to plan and forecast tax payments with
respect to external and internal factors
likely to affect its tax burden, as well as to
monitor their performance.
Openness
GRI 207-3
Taxes are calculated and paid based on the
The Group complies with international
requirements for public disclosure,
including annual publications on
payments to the government in line with
the UK Financial Conduct Authority’s
Disclosure and Transparency Rules.
PhosAgro seeks to build an open
dialogue with the general government
to foster a favourable business and social
environment across its footprint. Group
companies assist tax authorities in their
tax control efforts by addressing their
enquiries in full and on time, providing
access to information and disclosing tax
information in strict compliance with
international reporting standards and
applicable laws where they operate.
Starting from 1 January 2021, tax
monitoring was introduced at Apatit,
the Group’s key production asset, which
accounts for more than 80% of the
Group’s total tax payments. Such tax
control initiative consists in voluntarily
providing tax authorities with real-time
access to accounting and tax records (in
lieu of in-office and on-site audits). Tax
monitoring will be rolled out at PhosAgro
starting from 1 January 2023.
To minimise possible differences in
connection with market price definition
and controls, Group companies enter
into pricing agreements with tax
authorities.
Contributing to the making
of the government tax policy
The Group takes an active part in
shaping and implementing the
government tax policy, as well as
in discussing and development tax
legislation.
The Company’s representatives
participate in four working groups that
help the Russian Ministry of Taxation
ensure tax transparency: Integration of
Taxpayers’ Accounting Systems as part of
Tax Monitoring Initiative under Tax-3 AIS,
Internal Control and Risk Management
System, Tax Register Standards and
Requirements, Control Procedure
Standards.
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Performance Review
As an active member of the Russian Union
of Industrialists and Entrepreneurs (RSPP),
the Group helps develop and review
legislative initiatives, while also promoting
its agenda in key focus areas. The Group
also joined the RSPP’s Social Charter of the
Russian Business.
the Tax Administration Office under the Legal
Department. It also oversees the Tax Planning
and Tax Risk Management Unit (part of the
Economics Department) and the tax function
of the Department of Accounting and Tax
Records at Apatit which is part of the Group
that holds its key production assets.
with tax laws and prepare reliable financial
statements on time. The Group discloses
material tax risks so identified. The accuracy
of information disclosed by the Group in
its financial statements is confirmed by an
external auditor. The Company’s financial
statements are available on its website:
Flexibility (promptitude)
The Group promptly adapts its tax policy
to changes in tax laws and practices and
accordingly fine-tunes its accounting policy.
Independent approach to intra-group
pricing
The Group is best positioned to comply with
both national and international transfer
pricing requirements, with controls in place
that help assess the efficiency of arm’s length
pricing and traders’ margins in export supply
chains
The Group has a tax risk management
and internal control system in place
GRI 207-2
PhosAgro’s Board of Directors determines
the key principles of, and approaches to, risk
management and internal controls and reviews
quarterly reports on key risks, including tax risks.
The key objectives, roles and responsibilities
for the risk management and internal
control system are set out in the Group’s Risk
Management and Internal Control Policy.
The Company takes a conservative approach
to tax matters and seeks to minimise possible
disputes with tax authorities.
Group’s tax function
Group companies run their own tax
functions in line with this strategy
The internal tax control system is subject
to annual assessment, monitoring and
audit, with an action plan to be developed
to improve its efficiency.
PhosAgro’s Board of Directors is in charge of
strategic tax planning. Strategic tax planning
and guidance in Russia is the responsibility of
In case of material tax risks, Group
companies take steps to mitigate
or eliminate the same to ensure compliance
www.phosagro.com.
Group companies have developed and
adopted a set of corporate legal information
and explanatory measures intended to
enhance high ethical standards of our
shared corporate culture and to minimise
risks of employee involvement in illegal
activities, including in tax evasion. The
Group has internal and external mechanisms
in place for seeking advice on ethical and
lawful behaviour and matters related
to organisational integrity. Any Group
employee, as well as any member of the
Board of Directors and Management Board
who has become aware of any actual or
potential violation of law, including tax laws,
is obliged to give a prompt notice of the
same to the PhosAgro Hotline.
RUB 35.1bln
Total amount of taxes paid in 2021
The key subsidiaries whose payments
in 2021 are disclosed in the table
below and their jurisdictions are listed
in note 33 to financial statements.
GRI 207-4 metrics, will be disclosed
in full starting from 2022, following
adjustments to the Company’s
accounts and records.
Payments made in 2021, RUB
Payment type
Total
Russia
Rest of the
world
Including
Switzerland
Poland
France
Income tax
VAT
28,735,968,675
28,401,440,415
334,528,260
136,977,010
59,179,526
314,898
(11,812,679,063)
(12,520,017,776)
707,338,713
178,124,867
524,432,926
196,547,190
Personal income tax
4,298,126,240
3,984,664,584
313,461,655
187,089,040
19,972,095
10,876,768
Social contributions
7,331,606,366
6,895,734,742
435,871,624
284,826,147
27,795,231
36,592,645
MET
Property tax
Pollution fees
Land tax
3,390,504,629
3,390,504,629
1,025,227,238
1,023,322,461
206,774,612
199,636,309
228,761,729
228,761,729
Water use charges
50,343,097
50,343,097
0
1,904,776
7,138,303
0
0
Transport tax
Water tax
14,691,497
14,551,268
140,229
2,813,264
2,813,264
Regular subsoil use fees
2
2
0
0
Other taxes
45,960,947
33,000,868
12,960,079
Tax fines and penalties
4,482,606
4,091,543
391,063
Dividend income tax
1,590,791,000
1,590,791,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2,500
0
0
0
0
0
0
21,181
3,251,517
0
0
354,762
0
Total
35,113,372,837
33,299,638,134
1,813,734,702
787,017,064
631,400,959
247,940,281
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Performance Review
Operational
performance
10.5 mt
Total agrochemical output
The development of the Volkhov facility
was the Company’s key investment
project in the reporting year. Worth
over RUB 30 bln, it provides for ramp-up
of the site’s production capacity to about
900 kt of phosphate-based fertilizers
per year and construction of the
necessary infrastructure. In 2021, we fully
completed the first and the second stages.
We also continued to enhance health and
safety at our facilities, but there is still
room for improvement in this area, as we
seek to completely eliminate workplace
injuries among both PhosAgro and
contractor employees. In 2021, we carried
on with the effort to increase workplace
safety among contractors and plan to
further strengthen this work in 2022.
Mikhail Rybnikov
First Deputy CEO, Executive Director
of PhosAgro until 10 March 2022
In 2021, the Company delivered outstanding
production results. Sound investments
in our facilities and technological
improvements have helped us create a
seamless and well-balanced value chain
from ore mining to packaging and delivery
of end products. We can promptly and
efficiently adjust its capacities to meet the
demand for any of our products, responding
to market dynamics for the benefit of our
shareholders.
Total agrochemical output reached an all
time high of 10.5 mt. Phosphate-based
fertilizers have been growing at a rate of
over 4% for the second year in a row, driven
by a nearly 9% increase in the output
of phosphoric acid, a key ingredient of
phosphate-based fertilizers, following
upgrades of production units and improved
equipment utilization. The production of
sulphuric acid increased by almost 8% due
to the Cherepovets unit reaching its full
capacity and a new unit coming on stream
at the Volkhov facility. In the nitrogen-
based fertilizer segment, commercial
ammonium sulphate saw the most
significant growth with output more than
doubling to reach 74 kt.
Strong customer focus helped us promptly
respond to demand changes in key markets
and increase total fertilizer sales by 3%
year-on-year to a record 10.3 mt primarily
in the most popular and high-margin
products. Nitrogen-based fertilizers
showed the best results, with sales growing
by more than 9% year-on-year.
Product portfolio
Our customers are at the heart of our business.
In 2021, we had 52 fertilizer grades in our portfolio. A significant portion of our offering
consists of newest fertilizer grades developed over the past five years.
PhosAgro is the largest producer of liquid
nitrogen-phosphorus fertilizers in Russia
Mineral fertilizers
Feed additives
Concentrates
Industrial phosphates
> High-grade phosphate
rock
Sodium
tripolyphosphate (STPP)
Nitrogen-phosphorus
and complex fertilizers
Feed grade
urea
Nitrogen-phosphorus
and complex fertilizers
with micronutrients
Monocalcium
phosphate feed grade
> Syenite alkali
aluminium
concentrate
> Nepheline
concentrate
Nitrogen-based
fertilizers
Liquid complex
fertilizers
Industrial products
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Upstream and downstream
Upstream
Apatit’s Kirovsk branch mines apatite-
nepheline ore at six fields of the Khibiny
depositin Russia’s Murmansk Region using
both underground and open-pit mining
methods. PhosAgro Group’s feedstock
reserves are of igneous origin, which means
that they do not have concentrations of toxic
heavy metals. The Company’s phosphate
rock is extremely rich in P2O5.
The mineral resource base at one
of the world’s richest and purest deposits
is expected to last for about 60 years.
The decrease in reserves compared
to 2020 is primarily due to the transfer
of balance reserves for underground
mining at the Koashva deposit to off-
balance reserves following the examination
by the State Commission on Mineral
Reserves of the feasibility study with
calculation of reserves. There were no
significant changes at other deposits.
To support growing production
of phosphate-based fertilizers, PhosAgro
adopted a programme in 2019 to increase
the mining of apatite-nepheline ore
to 41 mt by 2027.
It envisages major investments
in the expansion of existing and construction
of new mining capacities, as well as
in upgrading purchasing advanced
equipment to ensure safe and efficient ore
production.
PhosAgro Group ore reserves as at 1 January 2022
Deposit
Kukisvumchorr
Yukspor
Apatitovy Cirque
Rasvumchorr Plateau
Koashva
Njorkpahk
Total
Balance reserves, kt
(A+B+C1+C2)
Average P2O5
content, %
359,212
467,853
93,104
86,859
258,073
60,326
1,325,427
14.16
13.79
13.75
10.64
17.21
13.84
14.35
Technologies
In 2021, the Company produced 38.4 mt
of apatite-nepheline ore, compared to
37.65 mt in 2020.
In the reporting year, we switched to
remote drilling of deep wells at the
Rasvumchorrsky mine, a project similar
to that previously implemented at the
Kirovsky mine.
We also renewed our dump truck fleet
for open pit mining (Vostochny mine)
to increase technical availability and
utilisation ratios of the equipment.
On top of that, we continued
to implement our sustainable
development strategy. In January
2021, the mining and processing
plant of Apatit signed a contract to
receive electricity from the TGC-1
hydroelectric power plants. In the
reporting year, green electricity
supplies to the plant totalled
299 MWh.
Chemical production
Feedstock
Feedstock production, kt
Item
Ammonia
Phosphoric acid
Sulphuric acid
Ammonium sulphate
Total
2020
2021
Change y-o-y,
%
1,970.3
2,716.8
6,815.6
293.9
1,931.1
2,952.0
7,352.2
259.0
11,796.6
12,494.3
(2.0)
8.7
7.9
(11.9)
5.9
Phosphate-based fertilizers
Phosphate-based fertilizer production, kt
Item
DAP/MAP
NPK
NPS
APP
MCP
PKS
Total
In 2021, the production
of phosphate-based fertilizers grew
by 4.2% year-on-year to 7.9 mt
helped by increased output of
phosphoric acid.
The output of DAP/MAP fertilizer
brands increased by 14.1% to exceed
3.6 mt. The rapid growth rates of
DAP/MAP fertilizers was due to
launching and ramp-up to full
capacity of MAP production at
2020
2021
Change y-o-y,
%
3,164.4
2,840.3
928.9
205.8
392.1
46.4
3,610.7
3,111.3
561.6
208.6
390.6
10.8
7,577.9
7,893.6
14.1
9.5
(39.5)
1.4
(0.4)
(76.7)
4.2
the Volkhov facility, and the higher
demand and prices for bicomponent
fertilizers in 2021.
NPK production in 2021 rose by 9.5%
year-on-year to 3.1 mt, while the
output of NPS and PKS dropped by
39.5% and 76.7% respectively amid
lower margins in the global market.
Nitrogen-based fertilizers
Nitrogen-based fertilizers production, kt
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In 2021, the production of phosphoric
acid, the key feedstock used in phosphate-
based fertilizers, reached 3 mt, increasing
by 8.7% year-on-year on the back of
earlier production unit upgrades and
increased equipment utilisation efficiency.
In 2021, sulphuric acid production surged
by 7.9% year-on-year to 7.4 mt driven by
the ramp-up to full capacity of the new unit
in Cherepovets and the commissioning and
reaching the design capacity of a new unit
at the Volkhov facility.
Ammonia output decreased slightly year-
on-year to 1,931 mt, due to scheduled
maintenance in August–September 2021.
However, PhosAgro Group was still able
to exceed the planned yearly output of
1,906 mt.
In the phosphate segment,
production grew by
4.2%
In the nitrogen segment,
production grew by
0.4%
In 2021, production in the nitrogen
segment went up by 0.4% year-on-
year reaching 2.4 mt. PhosAgro Group
continued to increase the output of
commercial ammonium sulphate by more
than doubling it year-on-year to 74.1 kt.
The production of ammonium nitrate grew
by 0.5% to 694.8 kt, while urea output
in 2021 saw a slight planned decrease
to 1.643 mt.
90
91
In 2021, the production
of phosphate rock
and nepheline concentrate
increased
by 0.8% year-on-year
to 11.8 mt
Ore processing
Production volume, kt
Item
Phosphate rock
Nepheline concentrate
Total
2020
2021
Change y-o-y,
%
10,541.4
10,675.5
1,159.4
1,123.1
11,700.8
11,798.6
1.3
(3.1)
0.8
Item
2020
2021
Change y-o-y, %
Ammonium nitrate
Urea
Ammonium sulphate
Total
691.5
1,679.1
31.7
694.8
1,643.2
74.1
2,402.3
2,412.1
0.5
(2.1)
133.8
0.4
Performance Review Sales
Sales of phosphate-based fertilizers in 2021
amounted to 7.8 mt, a rise of 1.2% year-
on-year. The increase comes on the back
of the consistently high demand for these
fertilizers in Russia and Latin America. We
were able to meet the growth in demand
by boosting the production of MAP in 2021
after launching a new facility at the Volkhov
facility.
In the nitrogen segment, sales were
up by 9.1% year-on-year, primarily
due to a high seasonal demand and
the availability of fertilizers for end users.
In 2021, our total fertilizer sales
increased
by 3% year-on-year to a
record 10.3 mt.
Sales by key product, kt
Item
Phosphate rock
Nepheline concentrate
Total
Phosphate-based fertilizers
DAP/MAP
NPK
NPS
APP
MCP
PKS
Total
Nitrogen-based fertilizers
Ammonium nitrate
Urea
Ammonium sulphate
Total
Total fertilizers
Other products
STPP
Other
Total other products
2021
Change y-o-y, %
2020
3,151.8
1,159.0
2,677.6
1,125.2
4,310.8
3,802.8
3,203.4
2,924.6
912.2
200.3
378.6
49.8
3,564.5
3,011.1
566.8
206.3
405.2
8.5
7,668.9
7,762.4
618.6
1,649.0
18.1
2,285.7
9,954.6
93.3
90.4
183.7
798.0
1,616.3
80.2
2,494.5
10,256.9
94.4
82.9
177.3
(15.0)
(2.9)
(11.8)
11.3
3.0
(37.9)
3.0
7.0
(82.9)
1.2
29.0
(2.0)
343.1
9.1
3.0
1.2
(8.3)
(3.5)
Customers
and product
management
Contribution
to the UN SDGs
2021 highlights
to96%
Increase in customer
satisfaction index
PhosAgro becomes first in Russia
to achieve certification under
the national standard for improved
production.
Improved customer support: website
in 15 languages, development
of online trading platforms and
Agro Calculator.
82
Net Promoter Score
Strategy
One of the major challenges faced
by the world today is producing
sufficient amount of quality
and safe food accessible to all.
According to the UN, the world
population is expected to reach
nearly 10 billion by 2050.
However, the environmental and
social issues reflected in the UN
SDGs are far from being promptly
and effectively addressed. In this
context, we realise PhosAgro’s
strategic and globally important
mission of supplying safe and
eco-efficient fertilizers for
the agricultural industry to ensure
food security in Russia and across
world.
We believe that tackling global
problems is only possible through
open dialogue, cooperation, and
building synergies between all
stakeholders. This approach lies
at the heart of our interaction
with customers.
We are committed to responsible use
of our products making sure they are
safe for people and the environment.
Product life cycle management at
PhosAgro is in full compliance with
applicable Russian and international
standards and regulatory
requirements. We seek to minimise
any potential negative impact of our
products on safety, health and the
environment throughout the value
chain, from product development
to the end of its life cycle.
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Performance Review
To provide consumers with safe, eco-efficient, and quality innovative products and services, the Company's Strategy to 2025 has
identified the following focus areas:
The product management framework can be seen in the chart below:
Development
of digital technologies
in agriculture
Enhancement
of PhosAgro’s
competitive strengths
to boost crop yields
and quality in the
near term
as the world's
leading supplier
of eco-efficient
phosphate fertilizers
for farmers
Expansion of PhosAgro
Group’s involvement
in programmes
to protect human
health and the
environment,
ensure food security
and combat soil
degradation
Development
of circular economy
and increased
recycling, including
the use of waste
generated by
PhosAgro Group
Design
of innovative
products
that meet customer
requirements and
enable farming with
due consideration
of environmental
factors, the climate
agenda and need to
reduce greenhouse
gas emissions in
the value chain, as
well as soil and crop
requirements
An open dialogue with customers helps us
understand their expectations for products
and services, management system,
expectations and, in some cases, their
vision of future products. This valuable
information creates a solid foundation for
the Company’s further strategic growth
and new product development.
> open dialogue with stakeholders
regarding their expectations and
satisfaction with PhosAgro Group's
products and services;
> integration into the quality
management and environmental
management systems.
PhosAgro Group's responsible
production management framework
is based on the following principles:
> compliance with Russian and
international standards and
regulations;
> accurate tracking of materials,
elements and substances from
product development to the end
of life cycle;
> open and transparent information
about the properties and quality
of products for customers and other
stakeholders;
PhosAgro Group’s vertically integrated
business model is a key competitive
advantage. PhosAgro’s upstream assets
benefit from extensive and high-quality
resource base boasting unmatched
purity. Our downstream assets are
located close to key mineral resources
used in fertilizer production.
At PhosAgro Group, we have a product
management framework that relies on
the assessment of product life cycle.
It covers all production facilities and
stages of product life.
> Regulations and other
requirements;
> Expectations of stakeholders;
> PhosAgro’s strategic
initiatives
> Marketing products meeting
customer requirements;
> Taking into account feedback;
> Information support;
> Digital services for customers
> Elaboration of production
requirements and opportunities;
> Product research and
development;
> Ensuring production safety
and product use in compliance
with regulatory and other
requirements
> Drafting documents;
> Registration tests and receipt
of permits
The product management
framework conforms
to ISO 14040 and ISO 14044,
and its efficiency is underpinned
by PhosAgro Group’s existing
quality and environmental
management systems. In 2021,
the environmental management
system and the quality
management system were
certified across the Group's
production facilities and were
found to be in full compliance
with ISO 14001 and ISO 9001,
respectively.
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Performance Review development
Planning is an important element
of PhosAgro Group’s management
system. Planning involves complex
and comprehensive research to determine
a set of criteria for the development
of a future product, including:
> stakeholder requirements and opinions
about products and services;
> regulatory requirements applicable
to activities and products;
> market expectations, requirements
and trends;
> innovative methods and technologies
of production, including those aimed
at ensuring greater safety of the product
and its manufacturing processes
for humans and the environment;
> opportunities for implementing
the circular economy principles
and contributing to UN Sustainable
Development Goals.
PhosAgro’s quality management system
throughout the product life cycle to meet
the stringent quality requirements for the
end product, from ore and material selection
to end product research.
Importantly, the quality
management system
guarantees product safety
and full compliance with all
requirements for hazardous
substances for humans and
the environment
Management approach
Interaction with customers and product
safety are closely related issues regularly
discussed by the Board of Directors’
committees and submitted to the Board of
Directors for consideration.
Each facility has designa ted staff
members to maintain the quality and
environmental management systems,
which includes implementing initiatives,
Risks and opportunities
The Company has a risk management
system in place to identify and mitigate
product related risks in cooperation with
customers.
product and customer related objectives
(
for more information, see the Strategic
Risks section, page 68):
performing internal audits, updating
records, collecting and providing input
data for review by top management to
improve governance across the board.
Every year, the quality and environmental
management systems undergo an external
audit by an independe nt firm to confirm
their compliance with ISO 9001 and ISO
14001. The systems are supported by
internal and external audits that help
promptly reveal areas for improvement and
introduce best practices into management
systems.
Development of products and
manufacturing processes is implemented
in partnership with the Samoilov Scientific
Research Institute for Fertilizers and
Insectofungicides (NIUIF), Russia's only
institute specialising in this area.
7 environmental risk;
risk related to business processes
9
and systems;
13 regulatory risk.
1 risks associated with chemicals
management and product safety;
2 risks associated with customer
satisfaction and innovation;
3 risks associated with ensuring ethical
research and production principles.
The Company develops corrective measures
as necessary and unlocks opportunities
to mitigate those risks. Below you can find
more information about what we do on
this front.
Regulatory environment
and management of risks
associated with chemicals.
The Company constantly
monitors regulatory
and other requirements
and products
0.2 mg per kg
PhosAgro Group's unique phosphate-based fertilizers have
perfectly low cadmium average content
Directors. In 2021, we revised our
Code of Ethics to state our position
on this matter. In line with its Code
of Ethics, PhosAgro does not conduct
experiments on animals, except as
required by law; when conducting an
expert examination of fertilizers, the
main method of evaluating information
on the toxicity and hazard of a multi-
component substance to animals is
to analyse information from national
and international databases, as well as
information on previously registered
fertilizers.
Presently, there are very few alternatives
to animal research that are recognised
by the government. We are doing
our best to expand the range of
allowed research methods and reduce
experiments on animals.
PhosAgro Group facilities ensure timely
receipt of all necessary licences for
their activities to strengthen public
Agrochemistry, Rosprirodnadzor and
Lomonosov Moscow State University,
and Rospotrebnadzor, respectively.
operations and products. All PhosAgro
PhosAgro Group is committed to
reducing hazardous substances in its
activities. We ensure full transparency
with respect to the chemicals we use
and the content and properties of our
products.
Regulations and certain
requirements applied
to mineral fertilizers
in Russia
We tap our extensive knowledge base
and technologies to design products
that are safe for the environment and
people. In strict compliance with the
regulations, all PhosAgro products
undergo the necessary environmental
and toxicological tests as part of their
registration process before being
marketed to our customers.
Mineral fertilizers produced by
PhosAgro Group are subject to
mandatory state registration of
agrochemicals by the Russian Ministry
of Agriculture. All grades of PhosAgro
mineral fertilizers registered in Russia
underwent a mandatory examination
for compliance with toxicological and
hygienic, biological, environmental,
and sanitary and epidemiological
standards. The examination was
performed by experts of the F.F.
Erisman Federal Research Centre
of Hygiene, D.N. Pryanishnikov
All-Russian Research Institute of
PhosAgro Group's unique phosphate-
based fertilizers have perfectly low
cadmium average content (0.2 mg per kg),
making them among the safest
in the world. On 5 June 2019,
the European Council and European
Parliament approved the EU Regulation
2019/1009 (FPR) on fertilizers (also
known as EU Fertilizing Products),
establishes new EU-wide rules for
CE-marked fertilizers. The regulation
provides for reducing cadmium
content in EU fertilizers, by introducing
a single cap at 60 mg per kg of P₂O₅
and banning inorganic fertilizers in EU
with a cadmium content above that
cap starting from 16 July 2022. Going
forward, the regulation provides for
gradual reduction of cadmium content
to 20 mg per kg of of P₂O₅. The plans
of cutting the cap to 40 mg per kg of
P₂O₅ have been already announced.
At the same time, the French
Agency for Food, Environmental and
Occupational Health & Safety (ANSES)
has already issued recommendations
for a cadmium content in inorganic
phosphate-based fertilizers of less than
20 mg per kg of P₂O₅. Thus, PhosAgro
Group's phosphate-based fertilizers
have a much lower cadmium content
in our product slogan: Pure minerals for
healthy lives
We are committed to the ethical
principles of animal welfare and seek
to avoid using animals for research.
This issue is addressed at the highest
level by the Company’s Board of
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Performance Review
Voluntary ESG certification of products
GRI 2-28, 417-1
In 2021, PhosAgro Group became Russia’s
first entity certified under the national
standard for improved production. This
will enable the Company to eco-label its
products. Certificates numbered 1, 2 and
3 were issued to PhosAgro's Cherepovets,
Volkhov and Balakovo sites respectively.
Today, all of the products made at our
mineral fertilizer facilities have been certified
under GOST R 58658–2019, which has
introduced the world’s most rigorous limits
on heavy metal and arsenic content. This
is a testament to the unique eco-efficiency
of our products, which can now be labelled
with the green brand.
Eco-friendly products and responsible
consumption are currently gaining
momentum in Russia and abroad, with
more consumers setting great store by
environmental properties of a product. This
is confirmed by international and Russian
research:
> over 44% of Russians trust eco-labels,
while 42% pay a premium for more
environmentally friendly products and
packaging (Green Response, 2021);
> Three in five global consumers are
interested in learning more about where
their food comes from and how it is made.
Three in four global consumers expect
companies to invest in sustainability (Innova
Consumer Survey, 2020);
> Some 37% of Russians are likely to opt
for goods and services provided by
a responsible business, should they all
be in the same price range (Romir jointly
with Plan B and SKOLKOVO Sustainable
Business Lab, 2019).
PhosAgro Group has
become the first company
in the Russian mineral
fertilizer industry to receive
a certificate of compliance
harm the environment and people. The
requirements imposed by the Ecological
Union on the content of most heavy
metals align with the EU directive due
to be enacted on 16 July 2022.
with the Ecological Union’s Vitality
Leaf standard and the right to use the
internationally recognised eco-label on
its products. This is a credible testimonial
to the outstanding eco-efficiency of our
mineral fertilizers. It is worth noting that
the Ecological Union uses a science-based
approach grounded in a comprehensive life
cycle analysis to evaluate products, projects
and services. Certificate for compliance
with the Standard STO-56171713-023-
2020 (Mineral fertilizers. Requirements
for environmental safety and assessment
methods):
> developed by the Ecological Union;
> recognised by the Global Ecolabelling
Network (GEN)1;
> authorises the use of internationally
recognised Vitality Leaf eco-label.
Going forward, PhosAgro Group’s fertilizers
that have successfully completed certification
will bear the Vitality Leaf eco-label.
The Vitality Leaf eco-label on PhosAgro’s
fertilizers confirms that:
> these fertilizers are essential to sustainable
agriculture, as they are a part of sustainable
intensive farming practices;
> they do not contain any heavy metal
concentrations such as cadmium,
chromium, mercury, or nickel, which can
> fertilizers come with precise dosage
recommendations, which serve to preserve
soil fertility;
> the production cycle is designed to ensure
a sustainable use of resources and apply the
best available techniques;
> the feedstock suppliers have passed all
environmental safety checks, as PhosAgro
Group has put in place the Green
Procurement system.
Eco-labelling is an opportunity to make
an informed choice in favour of PhosAgro
products with internationally recognised
environmental credentials.
Additionally, PhosAgro’s Green Label
environmental claim asserts that the
product is free from dangerous cadmium
concentrations capable of harming soils.
Finally, our products are labelled with an EU
pictogram developed under Regulation (EU)
2019/1009 and ensuing rules for voluntary
labelling of safe fertilizers in terms of heavy
metals content.
> 44%
of Russians trust eco-labels
1 Global Ecolabelling Network (GEN)
Russia is represented in the GEN only by the Vitality Leaf eco-label operated by the Ecological Union. Apart from that, the non-profit association includes
internationally recognised Type I eco-labels focusing on life cycle analysis such as the EU Flower (EU countries), Blue Angel (Germany), Nordic Swan (Nordic
countries), etc
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99
Regulations and certain requirements applied to mineral fertilizers
by the European Union, REACH, and SVHC
PhosAgro Group’s products exported to
European Union (EU) customers were
registered pursuant to Regulation (EC) No.
1907/2006 concerning the Registration,
Evaluation and Authorisation of
Chemicals (REACH). Effective since 1
June 2007, REACH replaced previous
EU legislation on chemicals. REACH
seeks to ensure a higher level of safety
and to protect human health and the
environment. For companies, REACH
conformity means greater responsibility
for assessing the risks associated with the
use of chemicals and providing users with
relevant safety information.
Companies producing or importing
10 tonnes or more of hazardous
substances per year are required to
submit not only technical data, but also
a chemical safety assessment (CSA).
All information on such substances is
communicated by PhosAgro Group in
full to the regulators.
Pursuant to Regulation (EC) No.
1907/2006 (REACH), Apatit’s products
contain no substances which are
subject to restrictions on their sales in
the European Union (EU).
We produce ammonium nitrate (AN)
CAS N 6484-52-2 EC No. 229-347-8,
which is subject to para 58, Annex XVII
of REACH. However, it does not apply
if a fertilizer conforms to specifications
defined in Annex III to Regulation
(EC) No. 2003/2003 of the European
Parliament and of the Council.
To confirm compliance, samples of
ammonium nitrate are sent quarterly
to the Inspectorate Estonia AS lab for
detonation resistance and oil retention
tests. The results are formalised by
a protocol for compliance with the
requirements of Annex III of Regulation
(EC) 2003/2003.
In addition, para 30 of Annex XVII to
REACH lists substances specified in Part
3 of Annex VI to Regulation (EC) No.
1272/2008 and classified as toxic to
reproduction, Category 1A/1B. These
include sodium tetraborate which is
on the list of Substances of Very High
Concern (SVHC) and is classified as a
reproductive toxicant, Category 1В, but
the restrictions only apply to individual
concentrations in the mixture above
4.5%. We produce NPK fertilizers with
boron that contain sodium tetraborate
at a concentration of 2–3%. Therefore,
the special concentration level as
defined in Part 3 of Annex VI to
Regulation (EC) No. 1272/2008 is not
reached.
Thus, PhosAgro Group faces no
restrictions under Annex XVII of
Regulation 1907/2006.
The quality and safety of mineral
fertilizers produced by PhosAgro Group
is confirmed by state registration
certificates, declarations of conformity,
and safety data sheets. According to
expert reviews, new fertilizer grades
are effective and environmentally
and toxicologically safe. The products
are properly classified, labelled
and packaged in accordance with
Regulation (EC) No. 1272/2008 (CLP
Regulation). All types of manufactured
fertilizers have safety data sheets
(SDS).
Performance Review Results
Consumer research – 1
As part of the research, PhosAgro Group analysed consumer
awareness of products and services, their preferences for
new products and assessed attitudes to the Company’s
environmental initiatives.
In 2021, the Company took a set of measures
to make information about PhosAgro Group’s
products and services more accessible.
Customers enjoy our digital services, which
are complementary to PhosAgro’s core
products and allow us to expand consumer
opportunities, including by offering faster
access to the relevant information and
competencies of PhosAgro Group experts.
During the COVID-19 pandemic, these
services have been particularly effective and
have flourished.
PhosAgro Group’s digital services in 2021, see the
Strategy section on 56.
For more information on
PhosAgro Group Innovation Centre provides
expert support to consumers and is also
engaged in:
> promotion of new products;
> promotion of core assortment in other
countries (including registration tests);
> on-demand expertise for other related
business units;
> preparation of agrochemical materials;
> participation in educational programmes.
Ensuring customer satisfaction
is key for PhosAgro Group’s
operations. Customer satisfaction
is assessed in accordance with
the requirements of ISO 9001
Monitoring of customer satisfaction helps
obtain unbiased data on the performance
of the quality management system, collect
comments, search for the root cause
of inconsistencies and timely develop
corrective actions. We also take on board
our customers’ wishes and suggestions,
which are duly considered to boost
customer satisfaction, expand our product
range, acquire new customers and tap
into new markets, both domestic and
international.
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Conducted from June to November
2021, the survey was organised as part
of regional field days, PhosAgro field
days, Chemistry, Yug Agro, and Golden
Autumn exhibitions, as well as via the
corporate website.
During the survey, we measured
the following indicators:
> awareness of the Company’s products
and services;
> awareness and attitude towards
> media preferences;
environmental initiatives in Russia
as a whole and those carried out by
PhosAgro Group;
> attitude towards new fertilizer brands
and selection criteria..
> the degree to which different factors
influence the decision to buy fertilizers;
Surveying method: questionnaire
(paper/digital).
Key conclusions of the survey
Key conclusions
Additional information
Survey participants are positive about
environmental initiatives in Russia and can
identify the Company’s green label; respondents
also consider PhosAgro Group’s products to be
eco-efficient.
>60% of respondents have heard of the Russian
law On Agricultural Products, Raw Materials and
Food with Improved Environmental Characteristics.
>70% of those surveyed support the creation
of a green brand for domestic agricultural
products.
For agricultural producers, the main criterion
for choosing fertilizers is quality. In this regard,
it is very important that the respondents' first
association with PhosAgro Group's fertilizers is
quality.
According to the survey results, quality (>80%
of respondents) and user experience (80% of
respondents) are the factors that most influence
consumer choice.
Consumer awareness of PhosAgro Group’s
brands has increased significantly over the past
year.
Networking at specialised events and the
printed catalogue remain the most preferred
channels for learning about products; with that,
consumers have become way more interested
in digital channels (website, email newsletters,
YouTube channel) over the past year.
Almost all respondents (90%)
expressed interest in fertilizers with controlled
and prolonged effect.
> 70%
of respondents are familiar with
PhosAgro Group’s digital ecosystem
When choosing new products, attention is
paid to increasing yield targets and economic
efficiency. This was reported by about half of
the respondents. About 40% are eager to
introduce new practices.
Environmental
safety
Quality
and efficiency
Product
awareness
Development and
launch of innovative
products
The survey of consumers’ opinion
on PhosAgro Group and its products
explicitly confirms that:
> the implementation of Strategy
to 2025 is fully consistent
with stakeholders’ needs and
expectations;
> environmental properties of
products, their quality and eco-
efficiency, as well as PhosAgro
Group’s efforts to promote its green
label and the new paradigm with
respect to agricultural products, raw
materials and food with improved
characteristics are of importance for
consumers;
> digitalisation and digital services are
as essential as in-person interaction
and are an effective channel of
communication with a variety of
stakeholders
100
101
Performance Review
Consumer research – 2
Additional research included an analysis of
consumer requirements and expectations
in terms of product quality, assortment, and
output.
The research was carried out by means of an
online consumer survey both in Russia and
abroad.
number of customer satisfaction criteria,
including:
The data obtained serves as the basis for the
annual assessment of customer satisfaction.
> quality of the products supplied;
> packaging of the products supplied;
> product range;
In 2021, the survey covered 11.8% of
PhosAgro Group’s total customer base by
revenue, with 24% of them being from Russia
and 76% from abroad.
The respondents were asked to rate their
satisfaction level on a scale from 1 (the lowest
score) to 5 (the highest). The survey used a
> promptness of request handling and quality
of support and consultation by trading
offices.
Key results of the customer satisfaction survey
Customer survey result
>70%
73%
76%
77%
Survey participants are positive about the quality of
PhosAgro Group’s products, with more than 70% of
respondents giving the highest score to this criteria.
73% of survey participants said that they were fully
satisfied with the quality of packaging, giving it the
highest score.
PhosAgro Group’s product range fully meets the
expectations of 76% of respondents; PhosAgro Group is
developing new brands and some consumers are positive
about their potential release.
Consumers who took part in the survey praised
PhosAgro Group’s handling of requests: it was rated
as fully meeting expectations
by over 77% of customers .
Satisfaction with product quality
Satisfaction with packaging
Satisfaction with product
range
Promptness of request handling and
quality of support and consultation by
trading offices
Degree of consumer satisfaction from
2019 to 2021, %
2021
2020
2019
Following the customer satisfaction
survey, corrective measures were
developed, with their effectiveness
to be evaluated in the next research
cycle.
96
94
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103
18% are “neutrals”: they are not dissatisfied, but neither are they completely sure that they would
recommend PhosAgro Group. The percentage of “neutrals” was significantly higher in general than in
Russia, where customers are noticeably more loyal to the brand.
Brand loyalty a ssessment
In addition to the basic criteria
underpinning the quality management
system, the findings of the survey
were studied in terms of behavioural
characteristics and customer loyalty
to the brand. For this purpose, the
net promoter score (NPS), an index
that measures customer loyalty to a
product or company, was calculated. It
totalled 82 for the Russian and foreign
customers. This is a very high score,
which means that many respondents are
likely to recommend PhosAgro Group
and our products to their friends.
82% of respondents
can be categorised as
“promoters”, or highly loyal
customers.
The prevalence of “promoters”
shows that PhosAgro Group has a
competitive edge in terms of a hefty
share of loyal customers and the
possibility of growth through customer
recommendations.
It was essential for us not only to have
our performance evaluated against
various criteria, but also to get a deep
understanding of what lays behind
respondents’ high scores. The main
aspects that consumers cited as
the most motivating for being loyal
to PhosAgro Group were as follows:
> value for money;
> quality products (the most popular
answer);
> quality service (agricultural support,
logistics and speed of delivery);
> personnel qualification;
> reliability and convenience
of cooperation;
> customer focus, flexibility;
> innovativeness;
> good packaging.
At the same time, we received
a number of comments on isolated
matters. They were investigated as part
of the quality management efforts,
with appropriate corrective measures
further developed. Some consumers
noted that our product range is
not wide enough. We are actively
working to improve the situation;
under the Strategy to 2025, the
Company plans to introduce 50+ new
product grades to the global market,
including not only fertilizers, but also
complementary products, such as crop
protection agents..
Performance Review
Research
and education
Management approach
Our innovation, product development and education management system is
seamlessly integrated into our quality management system, which is aligned with
ISO 9001:2015.
Management approach to innovation, product development,
and education
Global Sustainable
Development Goals (SDGs)
Research and education is an integral
part of our operations. PhosAgro
Group strives to ensure efficient and
safe agricultural production and
develops new innovative fertilizers
while also working to minimise the
environmental impact of mineral
fertilizer application and production.
In doing so, the Company relies on
Russian and international experience
and leading research and production
practices.
17% of total
revenue
RUB 71.2 bln
was generated by sales of fertilizers
produced for the last five years
The use of phosphogypsum
in agriculture was recognised as a
best practice by International
Fertilizer Association (IFA).
2021 highlights
̃ х3
The growth in the output of mineral
fertilizers with micronutrients almost
to 1.7 mt (vs 621 kt in 20202).
Urea with urease inhibitor was
marketed
Strategy
Our Strategy to 2025 envisages efforts to increase
the share of innovative products, develop technology
and production, and ramp up potential for
cooperation with stakeholders and partners in the
area of innovation and research.
Another important focus under this strategy
is to ensure efficient production and its compliance
with high standards for environmental responsibility,
circular economy principles, and safety.
1 Due to certain aspects of accounting, the
revenue does not include the margin of
PhosAgro Group’s traders
2 For grades registered as fertilizers with
micronutrients in 2020, production output
since 2021 is presented
PhosAgro Group runs the Samoilov
Scientific Research Institute for Fertilizers
and Insectofungicides (NIUIF), Russia's
only institute specialising in this area.
The Group actively cooperates with
the Russian Ministry of Agriculture,
the Russian Academy of Sciences,
federal research centres, universities,
innovation funds, and international R&D
organisations (UniLaSalle Polytechnic
Institute (France), University of Belgrade,
Poland's Research Centre for Cultivar
Testing, Mendel University in Brno (Czech
Republic), Lithuanian Research Centre for
Agriculture and Forestry, Latvia University
of Life Sciences and Technologies,
University of Tartu (Estonia), and Brazil’s
Federal University of Lavras). Moreover,
in 2018, PhosAgro Group set up the
Innovation Centre to create cutting-edge
products and technologies in partnership
with research institutions in Russia and
abroad.
The NIUIF and PhosAgro Innovation
Centre bring together researchers,
engineers, and experts from various areas.
With PhosAgro Group pursuing ambitious
development goals, its business units
have been attracting new highly qualified
experts. In 2021, the average staff
headcount at PhosAgro Group’s R&D
units reached 427 employees.
Furthermore, the Company has a
competence centre that employs a
broad range of experts. The tasks of this
centre include:
Risks and
opportunities
The following strategic risks affect our
research and educational objectives
(
for more information, see the
Strategic Risks section on page 68):
1 strategic planning risk;
13 regulatory risk;
19 climate risk.
Activity specific risks are listed below:
> non-compliance of products’
manufacturing process and their
use with carbon footprint standards
and other environmental aspects
associated with the adoption of the
European Green Deal (primarily the
From Farm to Fork Strategy) and
potential similar restrictions in other
markets;
> insufficient environmental
friendliness of production processes;
> inability to ensure full compliance of
plant nutrition systems with specific
farming practices;
promotion of new products;
promotion of core assortment
in other countries (including
registration tests);
on-demand expertise for other
related business units
writing/editing agrochemical
materials;
monthly reviews on cadmium
and other pollutants;
participation in educational
programmes.
PhosAgro is working closely with
international organisations to provide
broad support to humanitarian and
research-intensive projects.
> inability to accommodate
customers’ expectations of advisory
support regarding the use of
products.
The Group develops corrective
measures as necessary and unlocks
opportunities to mitigate those risks.
Below you can find more information
about what we do on this front.
Research and education fall within the
remit of the Technical Development
Department and are discussed at
the meetings of the Sustainable
Development and Strategy Committees
of the Board of Directors. These matters
are subject to an annual review by the
Board of Directors
.
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Performance Review
Performance
NIUIF performance in 2021
Sulphuric acid production
Phosphoric acid
НThe NIUIF is a leading research centre
that explores sulphuric acid technology
and production and supports facilities
countrywide. In 2021, in addition to
providing services to PhosAgro Grooup
sites, the institute also carried out a
review of process and technical solutions
of engineering documentation of one
the leading manufacturer of non-ferrous
metals. The findings resulted in expert
opinions and recommendations on
technologies used in the project, process
solutions, equipment selection and
configuration, construction materials,
and production technologies.
The second stage of creating in-house
production of high-performance
vanadium sulphuric acid catalysts,
carried out jointly with the Boreskov
Institute of Catalysis (Siberian Branch
of the Russian Academy of Sciences),
included provision of input data for a
feasibility study. This work will continue
in 2022.
The development of sulphuric acid
production (in particular SK-650 and
SK-20 in Balakovo, SKU-23/40 boiler
furnace in Volkhov) is being monitored
and provided with advisory support
across all of PhosAgro Group’s major
production facilities.
The installation of the SK-800 sulphuric
acid production unit in Volkhov was
supported with R&D and advisory
services during boiler efficiency testing.
Some of the work will continue in 2022.
As part of R&D support for phosphoric
acid production, the NIUIF kept up efforts
to monitor and analyse the efficiency of raw
material processing, as well as develop
hemihydrate and dihydrate production
of wet-process phosphoric acid across all
of PhosAgro Group’s sites.
In Cherepovets, Balakovo, and Volkhov, the
NIUIF developed vacuum evaporation of
wet-process phosphoric acid. In particular,
core engineering solutions were developed
to design a vacuum-evaporating unit with
a capacity of 50 ktpa of P2O5 as part of
wet-process phosphoric acid production in
Cherepovets and to expand the capacity of
dihydrate technology systems EFK-1, EFK-2
to 311 ktpa of P2O5 in Balakovo.
Production of mineral fertilizers
At the Cherepovets facility, the NIUIF is
working to intensify MFPU-2 operation that
uses a catalytic converter. The NIUIF staff also
provide R&D support for the commissioning
and start of crystalline ammonium
sulphate production and develop core
technical solutions for the reconstruction of
magnesium additive injection systems for
MFPU.
In Volkhov, the NIUIF is responsible for R&D
support of production at MFPU Sections No. 1
and No. 3, as well as for utilising capacity and
reaching production targets at MFPU Section
No. 2.
In Balakovo, we are also planning to develop and
implement a technology involving ammoniator-
granulators and drum driers to develop
production of mineral fertilizers.
The range of the NIUIF activities features,
among other things, R&D support and
advisory services with regard to product
quality requests, preparation for and
participation in pilot production of new
fertilizer grades, examinations and lab tests
of fertilizer samples.
11 methods
of quantitative chemical analysis
developed and certified in 2021
In 2021, the NIUIF employees developed
and certified eleven methods of quantitative
chemical analysis to ensure analytical
monitoring of production processes, with five
methods certified at a federal level.
We developed the industry’s first simulator to
train granulation operators.
Last year, we had an in-depth study
of physical and chemical properties inherent
in monocalcium phosphate to reduce caking
tendency during transportation
and storage.
The NIUIF is a leading research centre that explores sulphuric acid
technology and production and supports facilities countrywide.
Development of advanced types
of fertilizers and other products
In 2021, the NIUIF and Moscow Timiryazev
Agricultural Academy continued with
research efforts to explore potential for
developing innovative grades of slow and
controlled-release fertilizers produced
by applying inorganic coatings/shells.
Cultivation tests brought positive results
and enabled us to file national patent
application No. 2021126117 “A Method
to Produce Slow and Controlled-Release
Fertilizers”. This work will continue in
2022.
The NIUIF employees explored available
technologies and developed core
technical solutions to produce water-
soluble monocalcium phosphate as
both an end product and feedstock for
water-soluble NPK fertilizers.
They also developed technical solutions
to upgrade sodium tripolyphosphate
production and create a product
with a low bulk density at the Volkhov
production site.
The NIUIF held a set of studies to refine a
technology for injecting zinc-containing
additives into mineral fertilizers.
Cultivation tests were carried out to assess
the impact of zinc-containing fertilizers
on the accumulation of biomass and
plant nutrients. In 2022, the NIUIF will
further assess the impact of technological
processes on agrochemical performance
of zinc-containing fertilizers.
Environmental R&D, including
with a focus on the use of
recycled materials
The NIUIF staff took part in the upgrade
and improvement of scrubbing systems
at the PhosAgro Group’s production
facilities in Cherepovets and Balakovo. In
particular, they put forward suggestions
on reducing aggregate dust emissions
from MFPU No. 3, block 2.70 in
Cherepovets.
As part of the programme to develop
the Volkhov branch, the NIUIF provided
R&D support for water circulation
facilities after the implementation of
a zero-discharge production scheme.
Its employees also support design and
construction of a neutralisation station
and slaked lime station in Volkhov.
The technical upgrade of the Balakovo
branch also saw the water use system
improve. Jointly with St Petersburg
Mining University, the NIUIF monitored
the condition and stability of dump sites
in Balakovo.
In 2022, the NIUIF will further provide
R&D support for the design of a unit for
the integrated treatment of by-products
from wet-process phosphoric acid –
fluosilicate acid and phosphogypsum
production (based on the NIUIF
technology), as well as for the design of
aluminium fluoride shop reconstruction
with increased capacity.
In the reporting year, the NIUIF
developed a technology for hydrogen
sulphate treatment of Kola nepheline
concentrate with production of
aluminium hydroxide and by-products.
2022 will see the NIUIF staff advance this
technology further.
The NIUIF will further develop a
technology to produce crystalline
ammonium sulphate by processing
phosphogypsum and carbon dioxide.
In 2022, we also plan to focus on
developing an action plan to optimise
the use of chemical reaction heat,
reduce natural gas consumption
and, consequently, greenhouse gas
emissions at the fertilizer drying stage in
Cherepovets.
The NIUIF employees are developing
measures to improve the quality of
marketable silica gel and studying
recovery and processing of waste water
phosphorus.
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82
107
Performance Review PhosAgro innovation centre
Development of new products
PhosAgro Group's portfolio
includes
52 fertilizer grades
In the reporting year, more products with
innovative properties were developed.
Urea with urease inhibitor – a product with
a positive climate profile that improves
the plants’ nutrient uptake through controlled
release – was brought to the market
We plan to develop and market 50 new grades
by 2025, and 70 by 2030, including innovative
biomineral fertilizers, fertilizers with inhibitors
and ameliorants, as well as fertilizers with
prolonged effect.
By 2025, PhosAgro Group looks to start
producing three fundamentally new products:
ApaSil, biologised fertilizers, and BioCPA (crop
protection agents). Furthermore, urea with
urease inhibitor, which is already registered
in Europe, is currently pending registration
to be supplied in the Russian market.
Phosphogypsum
In December 2021, a working group of the
International Fertilizer Association (IFA)
recognised PhosAgro Group’s production
of improved phosphogypsum and its use
in agriculture as a best practice.
Phosphogypsum is a valuable by-
product of the production of mineral
fertilizers. It includes, among other
things, such elements as calcium, sulphur,
phosphorus, zinc, silicon, magnesium,
copper, which are important for the soil.
The use of phosphogypsum enhances
the soil structure, its water and air
permeability, improves leaching highly
soluble salts, and shapes favourable
conditions for the development of soil
biota. Phosphogypsum makes it possible
to increase productivity of arable lands and
reduce the cost of crop production.
For several years now, PhosAgro Group’s
R&D and production units have been
working to make this valuable product,
which used to be regarded as waste,
a marketable commodity. The certification
was completed in 2019. The Balakovo
branch became the first to start commercial
production of marketable phosphogypsum
with improved properties. In 2021, 40.5 kt
of phosphogypsum was supplied (vs 8.7 kt
in 2020).
Apart from being a new revenue source,
phosphogypsum contributes to circular
economy principles and, thus, to PhosAgro
Group’s ambitious environmental goals.
Another important factor is potential
large-scale application of phosphogypsum
in order to reuse 20 m ha of salinised land
currently incapable of being cultivated.
Chemical amelioration, which is required
to reuse this land, cannot proceed
without certain products, including
phosphogypsum.
Production of mineral fertilizers with
micronutrients, kt
2021
20201
2019
1,691.1
621.3
542.2
Sales of fertilizers produced for the last
five years (2017–2021) amounted to
RUB 71.2 bln, or 17% of total revenue.
Strong R&D capabilities and the flexibility
of production capacities achieved through
a fundamental overhaul in recent years
allowed the Company to deliver a high
share of new grades. All of these give
PhosAgro a competitive edge and help
PhosAgro Group meet growing demand
for the specific grades that are best
suited to certain crops, soils, and farming
practices.
Investments in R&D activities and
development of new products, RUB mln
2021
2020
2019
1,416.8
1,845.9
1,642.1
16.9%
Share of revenue generated by
sales of cutting-edge fertilizer
grades developed and brought
to the market in 2017–2021
Trends in demand for innovative products
and eco-efficient fertilizers with improved
characteristics over the recent years show
that farmers opt for a more targeted
approach to their agricultural tasks
PhosAgro Group promotes innovations
in agriculture, including by way of providing
farmers with access to its broad range
of products, services, and digital resources.
Revenue generated by sales of cutting-edge fertilizer grades developed and brought to the
market in 2017–2021, RUB mln
Item
Diammonium phosphate 18.1:46.2 dark
Diammonium phosphate 18.1:46.5 dark
Diammonium phosphate 18.2:46.2 green
Nitrogen-phosphorus-potassium diammophoska fertilizer 10.3-26.4-26.4 light brown
Sulphur-containing nitrogen-phosphorus-potassium fertilizer NPK(S) 8-20-30(2)+0.5Zn grade
Prilled urea without processing with anticaking agents
Nitrogen-phosphorus-potassium fertilizer 12-32-16
Nitrogen-phosphorus-potassium fertilizer 12-32-16 light brown
Granulated urea
Feed grade urea
Nitrogen-phosphorus-potassium fertilizer 12:15:21
Nitrogen-phosphorus-potassium-sulphur fertilizer NPK(S) 9-22-29(2) grade
Sulphur-containing nitrogen-phosphorus fertilizer NP+S=20:16+16
Sulphur-containing nitrogen-phosphorus fertilizer NP(S) = 14-40(7) grade
Sulphur-containing nitrogen-phosphorus fertilizer NР+S(Zn) 14:40+7(1.0%) grade
Ammonium sulphate
Ammophos 10-46 grade
NPK fertilizer 4:12:32 grade with ammonia spirit
Total
Revenue
23,832.1
10,223.2
1,668.7
3,740.2
1,152.0
4,469.3
4,071.9
967.4
15,356.5
514.6
455.4
1,342.7
69.8
869.3
558.4
1,387.2
432.1
88.7
71,199.4
1 For grades registered as fertilizers with
micronutrients in 2020, production output
since 2021 is presented.
Note: due to certain aspects of accounting, the revenue does not include the margin of PhosAgro Group’s
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Performance Review Cooperation in innovation
The Company's strategy for developing
new products relies on cooperation
with leading scientific and research
centres. PhosAgro Innovation Centre
cooperates with more than 15 federal
research centres and institutes.
Partner
non-government development
institution and National Intellectual
Development Foundation (NIDF)»
Project
Cooperation roadmap for 2021–2023
Activities in 2021
We have embarked on implementing
the cooperation roadmap.
30
agricultural universities in Russia
made part of PhosAgro’s nationwide
educational network
5,773
participants of online lectures
Partner
Russian Academy of Sciences
Project
Cooperation across a range of areas related to the climate agenda and low-carbon transition plan
Activities in 2021
At the conference, mineral fertilizer
producers, agricultural market
participants and leading representatives
of the scientific community discussed
national and regional issues of low-
carbon development in Russian
agriculture and related industries.
A comprehensive study was carried
out and a detailed terms of reference
prepared for the forestry and
agricultural parts of the farm. Work on
the cloning of deciduous trees specific
to the Vologda region was launched to
grow plantations of mixed forests.
In addition, scientific experiments were
launched and are being successfully
conducted at Nemchinovka Federal
Research Centre jointly with RAS
scholars, with a farming station set up
for new crops with full crop rotation. 15
federal research centres and institutes
are involved in the project.
PhosAgro and the Russian Academy
of Sciences (RAS) announced at the
conference the launch of a project to
create a carbon farm in the Vologda
region. The project is a pilot in the joint
work to create a system of regional
monitoring of greenhouse gas emissions.
A working group of 93 experts from
19 RAS institutes was set up to
implement the carbon farm project.
Partner
Partner universities
Plans for further cooperation with
the RAS in 2022:
> further progress in implementing the
carbon farm project and equipment
procurement;
> further progress in implementing
other projects involving leading
Russian scientists to develop and
promote innovative products jointly
with PhosAgro, for example:
> developing biotechnologies and feed
additives;
> testing and registering new
biomineral fertilizers;
> building a pipeline of new promising
projects.
Project
Creating PhosAgro’s nationwide educational network across 30 agricultural universities in Russia
Activities in 2021
Activities and results in 2021:
> vocational profiling organised
> building PhosAgro's knowledge
> more than 100 online lectures were
held for 21 agricultural universities;
> the lectures draw 5,773 students and
teachers from across Russia and the CIS;
> the lectures covered multiple
themes, including agrochemistry
and agronomy, crop production,
innovations and digitalisation in
agriculture, economics, law and
responsible farming;
> capabilities for conducting scientific
experiments were set up at PhosAgro
Educational Centre’s Phyto-Class of
the Moscow Timiryazev Agricultural
Academy, including those for
students’ thesis projects;
jointly with teachers of the Moscow
Timiryazev Agricultural Academy was
made available to school students;
> PhosAgro Educational Centre offers
ongoing further education courses,
hosts open days by major employers,
holds meetings for young scholars
and conferences, and offers lectures
recordings.
Programme expansion plans for 2022:
> integrating PhosAgro's educational
programme into the curriculum of 30
Russian agricultural universities;
> increasing the enrolment of
PhosAgro’s lectures to 10,000
students per year;
and lecture base;
> setting up ten PhosAgro
educational centres in Russian
agricultural universities by 2023;
> expanding the programme to
250 lectures (vs 103 lectures in
2021);
> launching PhosAgro's e-learning
platform with certificates
recognised by our partners and
employment opportunities for
graduates.
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Performance Review PhosAgro's
international
humanitarian projects
PhosAgro runs multiple humanitarian projects focused on building a modern
education and science framework. In line with our strategic goals, we support young
scholars and their projects addressing the challenges of biodiversity conservation,
environmental well-being, sustainable development and the circular economy.
Lobbying expenses in 2021 amounted to RUB 26.4 mln
Project
Activities in 2021
Partner
Project
Activities in 2021
GRI 2-28
Partner
UNESCO
Green Chemistry for Life,
a joint grant programme
by PhosAgro, UNESCO and
IUPAC
IUPAC
Summer Schools on Green
Chemistry project run
jointly by PhosAgro and
IUPAC
UN Food and
Agriculture
Organisation (FAO)
International
Fertilizer
Association (IFA)
United Nations
Global Compact
The project for
Development of Sustainable
Agriculture through
the Implementation of
the Global Soil Doctors
Programme and the
Creation of the Global
Soil Laboratory Network
(GLOSOLAN)
As a core member of the
IFA, PhosAgro Group
contributes to the
association by providing
expert advice on a wide
range of topics
As a Global Compact
LEAD company, PhosAgro
contributes to the initiative
by providing expert advice
on a wide range of topics
> The final selection of project applications was held as part of the seventh round of the Green Chemistry
for Life grant programme implemented jointly by PhosAgro, UNESCO and IUPAC.
> Eight talented scholars from countries across Africa, Asia, Europe and Latin America (Armenia, Brazil,
Vietnam, Italy, Malaisia, Croatia, Tunisia, South Africa). were named winners by the International
Scientific Jury.
> The grant awards ceremony is planned for 2022.
> Over the nine years of the programme's existence, its International Scientific Jury considered more than
800 applications from young scientists representing 125 countries. More than 40 scholars from 29
countries received grants.
> The fourth training session of the Summer School was held in an online-offline hybrid format.
> It draw more than 150 young scientists and 40 teachers from 30 countries.
> Since 2018, Summer School sessions have been held annually with PhosAgro Group’s support,
attracting hundreds of talented scholars from emerging and transition economies. Over the
past few years, four training sessions were held, bringing together over 400 young specialists
from 60 countries..
> Phosagro Group assists FAO in implementing the Global Soil Doctors Programme and creating
the Global Soil Laboratory Network (GLOSOLAN), which comprises over 800 laboratories
in 150 countries.
> PhosAgro and FAO agreed to extend their partnership for the development of sustainable
agriculture until 2023. PhosAgro Group’s total contribution to the project will reach USD 2.4 mln
by 2023.
> PhosAgro participated in FAO's international conference on soil protection as part of the World
Soil Day celebrations.
> PhosAgro participated in the Global Symposium on Soil Biodiversity hosted by FAO.
> Throughout the year, PhosAgro's experts actively contributed to the work of the IFA committees
on agriculture, safety and environmental protection, international trade, communications and PR.
> PhosAgro was commended as a leading responsible producer in the fertilizer industry at the IFA
Strategic Forum held annually.
> PhosAgro Group’s agricultural use of improved phosphogypsum certified in Russia was
recognised as best practice at the IFA Working Group Meeting in December 2021.
> PhosAgro was for the third time recognised as a UN Global Compact LEAD company. This
enhances the Company's business reputation globally, reinforces its competitive strengths
and increases public trust in PhosAgro, while also helping to boost existing and forge new
partnerships.
> As part of the UN Global Compact, PhosAgro endorsed the CEO Water Mandate, joining the
global initiative of business leaders committed to advancing water stewardship.
> PhosAgro solidified its commitment to the UN Global Compact by joining the Water Resilience
Coalition and Climate Ambition action platforms.
> The Global Compact Network Russia, in partnership with PhosAgro and with the support
of Accenture and SAP, launched a regional track of the SDG Ambition accelerator programme
in Russia and Belarus
Institute of Chemistry
and Sustainable
Development
at Mendeleyev
University of Chemical
Technology
Partnership in promoting
basic sciences and research
in chemistry and related
fields to further sustainable
development globally
International
Competence
Centre for Mining
Engineering Education
under the auspices
of UNESCO
The Centre is based at
St Petersburg Mining
University and plays
an important role in
implementing the UN
Sustainable Development
Goals, such as improving
the quality of education,
combating climate change,
and protecting and
restoring ecosystems
European Sustainable
Phosphorus Platform
(ESPP)
Partnership on the
European political,
scientific and technical
agenda for the sustainable
use of phosphate resources.
Safer Phosphates, an
international alliance
of environmentally
friendly fertilizer
producers
Partnership in protecting
human health and
agricultural ecosystems
from contamination with
heavy metals
> In order to develop students’ professional knowledge of advanced
technological processes in green chemistry, PhosAgro partnered with
the Institute of Chemistry and Sustainable Development to organise a
series of webinars for Bachelor's and Master's Students at the UNESCO
Chair of Green Chemistry for Sustainable Development at Mendeleyev
University of Chemical Technology.
> Webinars focused on the following global challenges: natural resource
management, carbon free technologies, green guidelines, waste
recycling, etc.
> The focus areas were aligned with the UN’s 17 Sustainable Development
Goals.
> PhosAgro is a member of the Centre's Steering Committee and actively
participates in its activities.
> PhosAgro Group took part in the 4th Russian–UK Raw Materials
Forum, supported by the International Competence Centre for Mining
Engineering Education under the auspices of UNESCO. The forum
was attended by 35 speakers, including representatives of 25 leading
Russian and UK mining companies. The forum’s audience exceeded
800 people.
> PhosAgro Group took part in the 8th Russian–German Raw Materials
Forum, supported by the International Competence Centre for Mining
Engineering Education under the auspices of UNESCO.
> PhosAgro’s employees participated in the professional certification
programme to earn verification of their qualifications with international
requirements for a mining engineer.
> PhosAgro Group's research on its use of phosphogypsum in road
construction was published in the ESPP newsletter on best practices
in phosphogypsum application.
> Drafting the article “Sustainable crop production: decreasing
phosphorus rates or splitting phosphorus application?” for the Soil P
legacy collection.
> At the ESPP online conference, a report titled "Sustainable crop production:
decreasing phosphorus rates or splitting phosphorus application?” was
presented, featuring the results of PhosAgro Group’s European field
experiments conducted at a branch of the Lithuanian Research Centre for
Agriculture and Forestry.
> In November 2021, Safer Phosphates (where PhosAgro is a member) and
OPERA, a research centre of the Università Cattolica del Sacro Cuore (Italy),
published the white paper "Cadmium Limits in Phosphorus Fertilizers". This
research focuses on cadmium and its negative effects on soils, food and
the human body.
> It calls for the introduction of evidence-based levels for cadmium
in fertilizers to ensure food safety and protect human health.
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Performance Review Supply chain
Global Sustainable
Development Goals (SDGs)
Strategy
PhosAgro Group’s procurement system
seeks to ensure that the Group’s
subsidiaries receive required resources,
materials, and services with adequate
quality, in full, and at reasonable prices.
However, there is much more to the
principles and business processes
underlying our procurement activities.
We believe that running a supply chain
in an efficient and responsible manner is
the cornerstone of the PhosAgro Group’s
sustainable development. In 2021, our
procurements of goods and services
exceeded RUB 150 bln. Thousands of our
suppliers and contractors benefit directly
from these investments, and so do their
employees, who have to provide for their
families. We contribute to the public
budget at various levels. But what is
even more close to our heart is that
the tools that we employ, including our
environmental and social assessment
of suppliers, as well as anti-corruption
mechanisms, directly promote sustainable
values across the Russian business
community. These values are the bedrock
of our business philosophy. We work
to ensure that our procurement activities
have a sizeable positive impact on all our
stakeholders.
2021 highlights
Share of local suppliers
19%
20%
Share of procurement
from SMEs
50%
Share
of counterparties
which have
completed
ESG assessment
Management approach
GRI 2-6, 3-3, 204
Procurement principles
Be legitimate, competitive,
and transparent
Factor in the requirements for
specifications, quality, customer
service, delivery, reliability, eco-
friendliness and total cost of
equipment and materials ownership,
along with compliance and social
matters
Use the best-fitting, sustainable
business solutions
Protect PhosAgro Group’s
reputation
Comply with PhosAgro Group's
existing procedures and best
practices.
reliability, and customer
satisfaction. In 2021, the
strategies covered 16 categories
of raw materials, 15 categories
of materials and equipment, two
categories of works and services.
> IT solutions. Procurement is
managed through IT solutions.
One of such solutions is SAP
Process Mining by Celonis, a
powerful software for analysing
and streamlining procurement
across multiple processes, including
demand forecasting, analysing
data after inventories have been
issued for production, as well
as identifying bottlenecks and
procedural violations.
> Robotisation. Robotic solutions
reduce lead time for day-to-day
and routine tasks and eliminate
overlapping functions.
4) PhosAgro is committed to its anti-
corruption policy. In our relationships
with counterparties, we rely on the
Anti-Corruption Charter of the
Russian Business and, thus, mitigate
the risk of fraud and/or corruption on
both sides.
5) Procurement activities take
account of PhosAgro Group’s existing
requirements, procedures, and
methods based on good business
practices.
1) Interaction with suppliers is based
on full transparency in decision-
making, market and formula pricing,
and long-term relationships.
Procurement procedures are
competitive, with bidders submitting
their applications on the electronic
bidding platform and a dedicated
commission put in charge of
organising tenders for petroleum
products, materials and equipment,
works and services.
PhosAgro Group has in place
documented procedures for assessing
and selecting suppliers.
2) Procurement activities ensure
that PhosAgro Group receives the
required amount of quality feedstock,
materials, equipment, and services
when and where it needs, supplied
by a responsible partner that meets
deadlines, provides good customer
service, and offers a good price. To
this end, all procured goods undergo
a thorough selection process based
on requirements for:
> quality;
> sustainability;
> reliability;
> human rights.
3) Cutting-edge solutions allow
building best available procurement
models, comparing prices with other
suppliers within the system and in the
market in general.
Key solutions in procurement.
> Development and implementation
of category strategies. This
approach to procurement is
designed to enhance quality,
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12345Performance Review
Key policies and ethical compliance
PhosAgro Group’s fundamental documents
for supply chain management:
PhosAgro's Anti-Corruption
Policy;
PhosAgro’s Code of Ethics;
Code of Conduct for
Counterparties.
All the above regulations are available on
the Company's website and counterparties
are required to read them upon registration
at PhosAgro Group’s electronic bidding
platform
(
for more information, see Familiarising
Business Partners with the Company’s Anti-
Corruption Standards and Procedures on
page 256).
The standard form contract for
counterparties stipulates their compliance
with the Code of Ethics and Code of Conduct
for Counterparties.
PhosAgro Group may refuse to cooperate with
suppliers or business partners discriminating
against their or their subcontractors’
employees or using forced labour.
Factors affecting procurement
Corporate
culture
Global
transformation
Building up a pool of suppliers
1
The Department works on a strategy for each
procurement category to develop the supplier pool
EBP 2
At the initial stage, suppliers face a filtering barrier upon
their registration on the EBP. It provides for documented
checks. As a result, the Company creates a pool of reliable
counterparties.
ESG
3
ESG questionnaire for counterparties to improve
the discipline of suppliers and put in place additional
checks for accessing the Company’s platform and
participating in tenders
Procurement
PhosAgro Group has
a dedicated hotline, and
counterparties are expected
to report in good faith any
concerns related to the Group’s
activities (including the
supply of goods and services
to the Company) along
with potential violations
of the Regulations on Conflict
of Interest and other bylaws,
laws, other regulations,
or ethical standards.
Today
Tomorrow
> Business partnership
with the customer
> Focus on strategic
categories
> Digitalisation
> Goal: operational efficiency
> Cost reduction
> Re-engineering and complete automation, single digital strategy
> Amendments to the HR policy, enhancing appeal of the procurement function
> Localised pool of suppliers to mitigate cross-border risks. A new global
objective of the procurement function is to ensure that supply
chains are resilient
> Shifting the focus from the art of negotiation towards risk management
and problem solving
> Situational management – prompt response to emerging global challenges
> Development of the Sustainable Development and Green Procurement Policy
Sustainable
development
Market
Digital
transformation
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Efficient structure
Deputy CEO of Apatit is at the helm of the
Procurement Department. At PhosAgro,
we have both a centralised procurement
function at our primary production site in
Cherepovets (Vologda region) and local
procurement units at our branches in Kirovsk
(Murmansk region), Balakovo (Saratov
region), and Volkhov (Leningrad region). The
organisational structure of the Procurement
Department covers three major areas: raw
materials and fuel, equipment and materials,
works and services. For each area there are
units engaged in routine procurement and
dedicated teams responsible for category
strategies. There are individual units within
the procurement function that focus on
tender procedures, capital procurement,
support of supplies, planning and analysis.
The function has in place key performance
indicators (KPIs) aligned with the
Group’s business objectives to assess the
effectiveness of its employees. KPIs are
individual, and their caclulation accounts
for the personal contribution of each
employee. A development plan can be
introduced at all levels in line with an
employee’s or task group’s initiatives and
projects, thus improving engagement and
motivation.
The performance of the Group’s procurement
function is subject to annual review by the
Board of Directors, while the key role in
this process is assigned to its Sustainable
Development Committee. After the review,
the Board suggests recommendations on key
development areas and ways to improve the
Procurement Department’s efficiency.
Risks and opportunities
The following strategic risks affect
our procurement objectives (for more
information on them, see the Strategic Risks
section on page 68):
14 corruption
17 FX risk
18 commodity risk
Procurement-specific risks are:
> late delivery of raw materials,
commodities, and equipment,
including as a result of supply chain
disruptions related to COVID-19;
> violations of ESG principles by
counterparties, including breach of
human rights, use of child and forced
labour, non-compliance of goods
and services with environmental
standards, etc.;
> quality of raw materials, commodities,
and equipment, dissatisfaction of the
internal customer.
PhosAgro Group develops corrective
measures as necessary and unlocks
opportunities to mitigate those risks.
Below you can find more information
about what we do on this front.
116
117
Performance Review
Results
Supplier environmental and social assessment
Reduction of GHG emissions and carbon footprint
GRI 308, 308-1, 308-2
We consider procurement to be
one of the most effective tools for
implementing the Company’s sustainability
strategy and promoting responsible
business principles within the Russian
business community and society as a whole.
We therefore pay particular attention to
ensuring that our suppliers and contractors
adhere to sustainability principles
throughout their operations.
In 2020, based on the principles
of sustainable development set forth
in the Code of Conduct for Counterparties,
PhosAgro developed a system to evaluate
suppliers against ESG criteria that cover
environmental issues, social responsibility
and quality management. The assessment
is based on the Sustainable Procurement
Indicators checklist, which contains 61 ESG
indicators, and a procedure for their
evaluation depending on the category of
suppliers/contractors. This assessment
system includes criteria/requirements
in six key aspects of ESG, providing
a multifaceted view of counterparties’
performance:
> environment;
> occupational health and safety;
> human resources;
> permits;
> quality control;
> corporate governance quality;.
In 2021 the
counterparty assessment
system was automated,
which significantly increased
the coverage of
ESG evaluation
ESG evaluation indicators in 2020–2021, %
Average counterparty rating (on a 100 point scale),
points
2021
2020
ESG evaluation coverage by counterparties
50%
2%
Current supplier engagement projects:
> The use of white cast iron liners
post-consumer recycling for
procured big bags.
and steel grinding balls of the 5th
hardness group is being considered,
which would improve wear resistance
and reduce material consumption
and, accordingly, carbon footprint.
> A project to transition the key lime
supplier’s production from coal to gas
is en route to being greenlit, which
will reduce air emissions according to
preliminary estimates.
are by-products for suppliers. This
reduces the environmental footprint,
as these materials would otherwise
be disposed for the lack of external
demand. We are exploring the
possibilities of further ramping up
the processing of such raw materials.
54%
64%
> To enhance the ESG strategy with
regards to packaging sustainability,
we are considering implementing
> Throughout production, PhosAgro
Group procures and processes
large volumes of raw materials that
ESG evaluation coverage by
procurement volume
Share of producers of raw materials, fuels, energy
and commodities among counterparties with an
implemented and certified environmental management
system that complies with ISO 14001 or a similar
standard
24%
4%
30%
27%
Since the supplier evaluation system
includes environmental requirements, it is
fair to say that all participating suppliers
and contractors (3,031 counterparties)
were assessed for environmental impact.
Thirty percent of evaluated counterparties
are producers of raw materials, fuels,
energy, and commodities with an
implemented and certified environmental
management system that complies with
ISO 14001 or a similar standard.
The reporting year saw revision of the
supplier audit procedure, with ten technical
audits conducted, which included ESG
criteria. The obtained results demonstrate
that suppliers are enhancing their
sustainability and identifying areas for
further improvements. The audits unveiled
no environmental or social violations.
Contract templates were also updated in
2021 to include a clause with a reference
to the Code of Conduct for Counterparties.
The clause formalised the counterparties’
duty to adhere to the principles set
forth in PhosAgro’s Code of Conduct for
Counterparties, including the obligations
to observe and respect human rights, treat
employees and partners with dignity and
respect and never engage or otherwise
participate in human trafficking, slavery, child
labour, or any other form of forced labour.
GRI 204-1
Procurement in 2019–2021, RUB mln
Other counterparties
SME
2021
2020
2019
120,088
29,918
83,865
20,203
57,487
32,713
Procurement from SME in 2021, %
Other counterparties
SME
20%
80%
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118
119
Performance Review Cost budget in 2021
In 2021, PhosAgro Group’s procurement
costs totalled RUB 150 bln, of which RUB
131.9 bln is the Procurement Department’s
cost budget. Raw materials and fuel
accounted for over 60% of procurement
costs. The 31% year-on-year increase in
costs was mostly associated with higher
prices for major categories of raw materials
and logistics expenses, coupled with
intensive implementation of investment
programmes.
Service procurement
KPI
Breakdown of Procurement Department expenses in 2021
RUB150 bln
PhosAgro Group’s procurement
costs
RUB131.9bln
Procurement Department’s cost
budget
20%
Services
65%
Raw materials and fuel
15%
Materials and
equipment
Average number of tender participants in the reporting period, units
Tender price reduction in the reporting period, %
Holding tenders on time, %
Bidders’ motivation assessment with respect to procurement quality, score
Scale
Worst
Critical
Target
3
5
90
3.5
5
7
95
4.5
7
12
100
5
Actual
5
10
99
5
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Information
Over the years, PhosAgro Group has been
effectively expanding industrial cooperation
with manufacturers to support small
and medium-sized enterprises (SMEs)
by engaging them as suppliers. In 2020,
the government of the Vologda region,
Apatit, Severstal and Urban Development
Agency signed the Synergy of Growth 2.0
agreement to expand business cooperation
between the region’s SMEs and leading
companies. Mutually beneficial partnerships
between Apatit and SMEs contribute to
the sustainable development of the local
economy and society, serving the interests
of all parties involved.
To find reliable partners and foster win-win
long-term cooperation with local suppliers,
we regularly:
> convene online meetings with
well as the Urban Development Agency in
Cherepovets;
> hold roundtables to exchange
experiences;
> participate in exhibitions and strategic
sessions.
representatives of local businesses and
regional branches of the Russian Union
of Industrialists and Entrepreneurs, as
Year after year, PhosAgro Group maintains
a high share of local suppliers in its supply
chain and is determined to raise it further.
Procurement in 2019–2021, RUB mln.
Indicators
Number of counterparties in 2021, units
2021 procurement volume
2020 procurement volume
2019 procurement volume
Procurement Department highlights
Total
3,350
150,006.7
104,069.3
SMEs
2,332
29,918.4
20,203.7
Local
772
28,330.4
23,467.2
90,201.3
32,713.4
18,705.8
Imports
110
4,389.3
2,878.5
3,820.6
Share of local
counterparties
19%
Share
of SMEs
20%
Share
of imports
3%
Number
of counterparties
3,350
Procurement Department
objectives
Total automation
and robotisation
of procurement processes
2050
procurement
2022
Digital
transformation
Procurement
development
Human
resources
Sustainable
development
> Advancement of SAP
> Transparent business
> Management culture
Process Mining by Celonis
partnerships
> Further process
> Long-term contracts
> Implementation
of a grading system
robotisation (feedstocks,
services)
> Further development
and implementation
of an automated
procurement
workstation
> Further development
of category
strategies
> Expansion of the ESG
evaluation coverage
> Development of an ESG
training programme for
counterparties
> Mutual improvement
agreement for services,
feedstocks and
inventories
Higher speed, better results
120
121
Performance Review People development
UN sustainable
development goals (SDGs)
2021 highlights
GRI 2-30
>18 ths
Employees
Strategic goals
Employee satisfaction and loyalty, %
+20%
Average training hours per employee
2021
Strategy to 2025
57
65
Average annual training hours per
employee
2021
Strategy to 2025
95
123
2021 accolades
> PhosAgro won the 1st place in the
Region category of the nationwide HR
Brand Award.
> PhosAgro Group’s Mentoring project
secured 3rd place in the Leaders of
the Future category of the Creating
the Future competition – a nationwide
employee best practice award.
More investments
in social programmes for our employees
х3.5 times
100%
Staff coverage
by collective bargaining agreements
> Maxim Nadezhin, a researcher in
the quality and standardisation
department at NIUIF, was recognised
as a winner of the Engineer of the Year
contest
Management
approach
We believe that a robust
performance management
system that covers all levels –
from individual employees to
PhosAgro Group as a whole – is key
to the Group’s continued growth
in line with its goals and vision.
The Group leverages a diverse
set of tools, approaches and
automated solutions to assess staff
performance.
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Strategy
PhosAgro relies on talented,
professional, and committed employees
that share our corporate goals and
values. Our people are the backbone
of our success. The Company’s entire
HR framework is geared towards
recruiting, supporting and motivating
such employees to achieve the most
ambitious professional goals. To this
end, we continuously foster a culture
of safety, equality and respect, provide
ample opportunities to develop new
competencies and offer competitive
salaries and social benefits.
We seek to deliver on our targets by running the following programmes:
> Implementing a remedial action plan
based on the annual employee survey
results
> Developing and implementing
online training courses on personal
competencies
> Developing and implementing
> Developing a system of corporate
e-learning modules on blue-collar
jobs, occupational safety, and
managerial skills; introducing an
innovative approach to professional
training (virtual reality simulators,
3D models for training, production
training grounds for improving
workplace safety skills, etc.)
libraries, guidelines, and knowledge
management at large
> Employing interpersonal training
tools, such as mentoring, coaching,
and supervision
> Enabling and assessing the
application of skills acquired by
the staff involved in real business
operations and project activities.
Integrated HR management framework
Unit
Key responsibilities
The Board of
Directors
Remuneration and
Human Resources
Committee
> Supervision over the introduction
and implementation of the
Company’s remuneration policies
and various incentive programmes;
> Performance appraisal in respect of
executive bodies and key executives,
including the assessment of their
performance against the targets
set forth in the long-term incentive
programme;
> Succession planning for executive
bodies and other key executives
Management
Human Resources
and Social Policy
Department of Apatit
> Strategic development of HR
processes
> Development and implementation
of process methodology
> Optimisation, automation, and
digitalisation of HR processes
> Functional management of HR
services in the regions
Operations
Local human resources
and social policy
departments
> Implementation of the Personnel
an incentive framework
Management Policy
> Recruitment for vacant and key
positions
> Organisation and implementation
of initiatives for occupational
training and competency building
> Development and management of
> Social support for PhosAgro Group’s
employees in accordance with the
collective bargaining agreement
122
123
Performance Review
HR management principles
Non-discrimination policy and human rights
The Code of Ethics
GRI 3-3, 406
GRI 405, 405–1
In April 2021, the Board of Directors
approved the revised version of the Personnel
Management Policy which enshrines the
following focus areas:
> organisational change management
system;
> personnel attraction and recruitment
system;
> personnel training and development
system;
> incentives and rewards system;
> social benefits system;
> corporate communication system;
> working hours and leisure;
> respect for human rights and non-
discrimination.
In 2019, we approved a transparency
statement under the UK Modern Slavery Act.
In 2021, the Board of Directors approved
the amended transparency statement
under the UK Modern Slavery Act, outlining
the Company’s actions to prevent all forms
of modern slavery and human trafficking
within PhosAgro Group and its supply chain.
In 2020–2021, over 12,000 employees
received additional human rights and
corporate ethics training.
All relations between PhosAgro and its
employees are strictly regulated by the
Labour Code of the Russian Federation
and adhere to the requirement to provide
employees with a timely notice of material
changes in employment terms thus
respecting human rights.
We negotiate collective agreements with
trade unions that address issues such as
working conditions and compensation for
employees at each of our production sites
(usually for a three-year period, covering
100% of the employees of Apatit, its
branches and standalone business units).
Most of these agreements are three-year.
We expect our employees to treat their
colleagues and everybody else, including
customers, suppliers and other stakeholders,
with due professionalism, respect and
fairness.
We consider unacceptable any restriction
of employee rights or freedoms, whether
at workplace or in any other job-related
environment.
Over the past nine years that we have been
conducting employee loyalty and satisfaction
surveys and collecting feedback from anyone
who wishes to express their opinion, not
once have we received negative feedback
or report of violation of human rights. This
clearly indicates that all obligations to the
Group’s staff are respected and met.
PhosAgro Group is committed to respecting
employees’ human rights as required by
the International Bill of Human Rights
and the ILO Declaration on Fundamental
Principles and Rights at Work, including
zero discrimination, not using child or
forced labour, respecting their right to
exercise freedom of association and
collective bargaining, and creating a safe
and favourable working environment for
both its own employees and the employees
of its contractors, which are also expected
to comply with such requirements and
regulations.
PhosAgro Group appreciates and encourages
diversity among its employees. We maintain
our commitment to an equal opportunities
policy and do not tolerate any discrimination
or privacy violations in respect of our
employees.
Our goal is to keep our working environment
free from restrictions based on nationality,
gender, age, faith or other grounds as
required by the applicable laws. Any
decisions regarding promotion, hiring,
remuneration or benefits are based solely on
the employee’s qualifications, performance,
skills and experience.
In 2021 PhosAgro Group’s
respect of human rights
was once again assessed by the Board of Directors and the
Remuneration and Human Resources Committee, with special
attention paid to diversity, gender equality and staff appointments.
The discussion led to the key conclusion that every employee
who works dutifully and has professional skills and competencies
may apply for any position within the Company, including
an executive one.
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PhosAgro adopted a Code of Ethics in
2014 and updated it in 2021. It applies
to all employees and is the Company’s
primary document that clearly outlines
its corporate culture, together with
all basic requirements for PhosAgro
employees, and establishes rules and
regulations for individual and collective
behaviour within the Company. It
covers all professional and business
relationships, both at PhosAgro and
with business partners and other
external parties. When agreeing and
concluding contracts with external
contractors, it is an imperative for us to
cover arrangements and commitments
related to mutual respect of human
rights and compliance with PhosAgro’s
Code of Ethics. Commitment to these
principles ensures that all our employees
take pride in their work and are keen
to communicate with colleagues, feel
comfortable in a team and can grow
both professionally and personally. They
help PhosAgro to avoid unjustified risks,
maintain long-term business growth,
strengthen our position in the Russian
and foreign markets, and increase the
Company’s value for shareholders and
other stakeholders.
Responding to the way people
have to communicate in the
wake of the turbulences and
working remotely in 2021, we are
active in introducing cutting-
edge technologies in corporate
communications. These include
enhanced personal accounts for
the employees, a corporate mobile
app with self-service options, and a
chatbot, along with new capacities
we added to our corporate portal.
Risks and
Opportunities
The following strategic risks affect our
HR objectives (
the Strategic Risks section, page 68):
for more information, see
3 social risk;
4 HR risk;
20 infectious disease risk
HR specific risks are listed below:
> risks related to human rights and
ethical standards;
> risks related to workforce sufficiency,
competence and development;
> risks related to the provision of
competitive incentives and social
support to staff.
The Company develops corrective
measures as necessary and unlocks
opportunities to mitigate those risks.
Below you can find more information
about what we do on this front.
Open communication channels
GRI 2-25, 2-26
Access to multiple communication
and feedback channels within
PhosAgro Group allows our
employees to resolve employment
and other job-related issues.
Some of the formats are Q&As
in the corporate newspaper,
town-hall meetings for staff and
management, corporate portal, and
a hotline.
Any employee or other stakeholder
can use PhosAgro Group’s whistle-
blower hotline to report human
rights violations or discrimination
of any nature, or to communicate
any other issues or concerns
related to employer-employee
relationships. Since the start of the
monitoring in 2019 through 2020,
our employees reported no human
rights violations via the hotline.
Annual employee survey
Over the past nine years, PhosAgro
Group has been conducting annual
employee surveys which serve as a
basis for subsequent remedial action
plans designed to address employee
concerns and requests. 2021 was
no exception, with a major set of
initiatives implemented.
For more information on these
initiatives, see the Industrial Safety
section on page 153.
82
124
125
Performance Review Gender equality
PhosAgro Group’s gender ratio:
an overview
20%
of women on the Board of Directors
(2 out of 10)
22%
of women among managers of all levels
21%
of women in the Company’s Talent Pool
(6 out of 29)
33%
of women in the Company’s total
headcount
> identifying leaders among young professionals;
> involving young professionals in tackling
relevant operational challenges faced by
the Company and the industry as a whole
by using real cases;
> transferring the experience and
knowledge accumulated by the Company’s
management and leading employees to
young professionals.
Share of women taking part in corporate programmes, %
High-Potential Graduates
Corporate training initiatives
38%
26%
27%
30%
2021
2020
Women taking part in external
events
Women taking part in corporate
events
CASE-IN International Engineering
Championship. League of Young
Professionals.
Autumn Cup (October 2021)
The championship aims to foster the
professional and personal development
of young professionals.
PhosAgro team сonsists of four people:
two men and two women.
Best Professional contest: Laboratory-
Based Chemical Analysis category
11 female finalists
Young Manager – 2021 competition (2021
superfinal)
11 finalists: seven men and four women.
The event was won by Olga Ovcharenko,
Head of the Chemical Water Treatment and
Water Supply Section at the water supply and
treatment shop of the Balakovo branch.
Goals:
> assessing and developing hard and soft
skills and leadership of young professionals;
Young Manager – 2022 competition
Men – 47, women – 12.
Results
GRI 2-7
Average headcount in 2021, people2
Region
Saratov region
Murmansk region
Moscow region
Leningrad region
Vologda region
Other
Total
Productivity,
t per person1
1,958
1,889
1,874
Men
Women
Total
1,290.7
6,044.4
218.2
826.9
3,210.0
658.6
626.8
2,059.5
167.3
533.2
2,425.0
260.3
1,917.5
8,103.9
385.5
1,360.1
5,635.0
918.9
12,248.8
6,072.1
18,320.9
2019
2020
2021
Mentor of the Year first corporate contest
(superfinal was in December 2021)
10 men, 2 women
To enhance women’s social security
in accordance with the applicable laws,
the Company:
> does not use female labour for manual
lifting or carrying weights exceeding
maximum allowable limits;
> releases women from their job duties and
transfers them, subject to their medical
reports, from production sites to lighter-
duty positions;
> provides women, at their request, with
a parental leave until the child reaches
the age of three;
> prohibits business trips, overtime or night
work, work on weekends and public
holidays for pregnant women, except
when there are a written consent and
no contraindications;
> safeguards employment of pregnant
women, with their employment contracts
terminated only in the event of liquidation
of the facility, as well as that of women
having children up to three years of age
and single mothers having children
up to 18 years of age.
In 2021, the Company had an average headcount of 18,320.9 people.
In 2020, the Company had an average headcount of 17,891.0 people
Average headcount2, %
Age
Under 25
25–34
35–44
44–55
Over 55
Category
Blue-collar workers
White-collar workers
Executives
Education3
Higher
Basic vocational
Secondary
Secondary vocational
2020
2021
Men
Women
Men
Women
3.3
20.9
22.8
14.1
3.7
42.6
11.7
10.6
25.4
17.8
10.1
11.5
1.9
10.1
12.4
8.4
2.3
15.0
17.2
3.0
20.3
5.3
3.4
6.3
3.5
19.2
23.2
14.6
4.0
41.9
12.0
10.7
25.4
17.1
10.2
11.8
2.0
9.8
12.5
8.6
2.5
15.2
17.2
3.0
20.3
5.3
3.6
6.2
1 Apatit, including its branches and standalone business units
2 PhosAgro and Apatit, including its branches and standalone business units
3 Based on the classification of education levels. For employees who were recognised as having incomplete higher education in previous periods,
the most recent complete education is used. Data for 2020 and 2021 is shown on a comparable basis
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126
127
Performance Review Headcount by region, employment type
and employment contract as
at 31 December 2021, people1
The increase in the 2021 headcount
was mainly due to the implementation
of investment projects and development
of production facilities.
Gender
Full employment
Partial employment
Permanent contract
Fixed-term contract
M
F
Total
M
F
Total
M
F
Total
M
F
Total
M
F
Total
M
F
Total
M
F
Total
3,302
2,719
6,021
1,330
703
2,033
923
606
1,529
6,107
2,293
8,400
211
165
376
2
9
11
11,875
6,495
18,370
1
3
4
2
7
9
0
1
10
11
1
1
0
4
21
25
3,233
2,501
5,734
1,282
649
1,931
830
540
1,370
5,623
2,161
7,784
209
164
373
2
8
10
11,179
6,023
17,202
70
221
291
50
61
111
93
66
159
485
142
627
2
2
4
1
1
700
493
1,193
GRI 2-7
Region
Vologda
Saratov
Leningrad
Murmanskaya
Moscow
OTHER (Stavropol, Krasnodar, Kursk, Tambov,
Berezniki)
TOTAL
GRI 405–2
Due to the nature of our operations, there
are generally more male employees than
female ones.
At PhosAgro Group, we believe that
professionalism, sustainably strong
performance and adherence to corporate
values are the essential prerequisites and
the only guarantee of promotion and
career advancement. Our regulations on
11.2%
Key personnel turnover indicator in 20213
labour relations, remuneration and social
benefits cover all of the Group’s employees
and underpin the principle of equitable
remuneration and performance rewards. We
comply with the principle by implementing
a remuneration framework that offers equal
pay to employees in equivalent positions,
regardless of their gender.
Key personnel turnover indicators3, people
> cooperating with universities.
GRI 401–1
2021
11.2%
2020
8%
Joiners
Leavers
Turnover
3,806
3,078
3,123
2,750
2 Senior management include N, N-1 and
N-2 managers (CEO, functional manager,
head of production site, chief engineer
of the company (branch), director of subsidiary
(affiliate, managed company), advisor
to the CEO). The management levels are
determined by the respective order.
3 PhosAgro and Apatit, including its branches
and standalone business units. Key personnel
turnover indicators by age group, gender and
region see on page 342.
4 Based on the generally accepted concept,
which describes a person or group of persons
living in a certain territory, without taking into
account the ethnic and cultural composition,
the local comunity means employees whose
region of registration coincides with the region
of the facility's location.
1 Phosagro and Apatit, including its branches and standalone business units.Average headcount
is calculated in accordance with the instruction to fill in Federal Statistical Observation Form No. P-4
Staff and senior management2 hired from
the local community3, %
GRI 202-2
Region
Vologda region
Leningrad region
Moscow region
Murmansk region
Saratov region
Average by all regions
Share of staff hired from
the local community4
in total headcount
Share of senior
management hired from
the local community in
total headcount
94
82
79
90
97
91
48
22
92
63
44
61
Up to97%
of on-site employees are hired locally
The Company’s key production sites
are located in the Murmansk, Vologda,
Leningrad, and Saratov regions. As a major
contributor to the local economy and one
of the largest taxpayers in these regions,
PhosAgro makes a significant social
impact across its geography.
In developing our production and creating
new jobs, we seek to prioritise local
residents when filling our vacancies.
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Recruitment
As part of its comprehensive
recruitment approach, PhosAgro
Group continuously monitors the
labour market in Russia and beyond
for skilled staff and efficient managers
with experience at leading global
companies, always determined to excel
in their roles and be one step ahead
of the curve.
Our talent attraction and recruitment
priorities:
> cooperating with schools across our
regions of operation;
> cooperating with technical colleges;
In 2020, PhosAgro Group introduced
a training system for recruitment
professionals to improve the hiring
process. The system includes:
> a competency model for recruitment
professionals;
The course will help improve employee
competencies, making talent recruitment
more effective.
In 2021, we launched multi-stage
comprehensive training in recruitment for
managers. The 80+ enrollees praised the
course, which covered such topics as:
> the labour market environment and
short-term outlook;
> what is important for candidates;
> key parameters in CV vetting;
> the right way to use the CV during an
interview;
> interview stages;
> three-level candidate screening;
> the Moment of Truth technique: how
to spot a liar;
> job tests and the right way to compile
one;
> gathering references for experienced
candidates;
> common managerial mistakes
in recruitment.
The training took place in interactive
format and involved homework and
a variety of hands-on activities.
> performance evaluation
of employees responsible for
recruitment;
> ongoing training and further
improvement courses for
recruitment professionals.
In 2020, we launched a training course
comprising four modules:
Module 1.
Candidate flow generation
Module 2.
Candidate evaluation methods
Module 3.
Persuasive arguing skills
Module 4.
Analytics and additional methods
to fill vacancies
128
129
Performance Review Training and evaluation
Due to the COVID-19 pandemic and external
restrictions in 2020, personnel training,
evaluation and development all went online,
helping to develop distance learning and
evaluation. In 2021, we continued to deploy
automated solutions and services for effective
personnel evaluation. These tools help quickly
identify risk areas in personnel management
and fine-tune the cycle of management
initiatives for higher operational efficiency.
We introduced motivation and commitment
assessment, a number of personality
questionnaires and tests, and a mechanism to
gauge employee satisfaction with the teamwork
between functions. This mechanism is designed
to provide information that can be used to
develop action plans for improving this cross-
functional performance within our diversified
group of companies.
Our focus on training and developing our people
also helps us hedge against a potential shortage
of talent at all management levels. In 2021,
PhosAgro Group made substantial progress
in this area by increasing the average training
hours per employee by 20% year-on-year.
Number of training hours
GRI 404–1
Assets
Volkhov branch
Balakovo branch
Kirovsk branch
Apatit (Cherepovets)
Additional online training for employees
Apatit and branches total
95.1Average hours of training per
employee in 2021
Our corporate training framework relies on the
following principles:
> clear alignment with the Group’s strategy;
> assessing and prioritising actual training
> introducing the most advanced and efficient
tools from an economic and methodological
perspective;
> developing new formats;
needs of various staff categories;
> using an individual approach to young talent;
> planning, coordination, quality and efficiency
> proactively identifying and developing new
audit;
leaders to succeed current ones..
Average per employee in
2020
Average per employee
in 2021
Change y-o-y, %
80.8
88.8
55.9
93.4
3.5
79.5
109.4
72.7
61.8
123.9
4.3
95.1
Training hours breakdown by employee gender and category1, %
Category
blue-collar workers
white-collar workers
managers
total
Hours, total
Hours per person
M
F
Total
514,799
109,457
109,886
186,735
100,882
30,668
701,534
210,339
140,554
734,142
318,285
1,052,427
M
107.8
72.4
83.5
96.6
F
94.7
53.2
81.9
75.0
36
(17)
11
32
23
20
Total
104.0
61.7
83.2
88.8
Number of training courses per capita2
Assets
Volkhov branch
Balakovo branch
Kirovsk branch
Apatit
Group total
Additional online training
Group total including additional online training
2019
552
2,393
2,771
8,769
14,485
n/a
2020
2021
1,609
2,638
5,405
6,518
16,170
21,566
1,678
2,604
8,758
11,728
24,768
16,276
37,736
41,044
In 2021, PhosAgro Group continued to
explore new opportunities for organising
its personnel training and development
processes. We did not stop nurturing
talent but rather leveraged the external
circumstances related to restrictions on
mass events to streamline this training.
Most in-person events went online,
allowing us to deliver on our training
plans in less time and at a lower cost.
The Our employees highly appreciate
the new opportunities they have for
self-development and training using
distance learning technologies, which
allows them to train and improve their
competencies anywhere at any time.
The Group’s personnel training budget
for 2021 was spent by 80.5%, with
all the planned training activities implemented
to the required extent
Training expenses,
RUB ‘0002
Training expenses per employee,
RUB ‘0002
236,089
199,684
235,216
21.7
11.8
13.6
2019
2020
2021
2019
2020
2021
1 Apatit, including its branches and standalone business units
2 Apatit, including its branches and standalone business units
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131
Performance Review Retraining and development
GRI 404-2
PhosAgro relies on its Talent Pool initiative as
a means of identifying talented staff with the
potential to expand their roles and step into
senior positions, and it provides additional
training to help them achieve these goals.
The programme includes management
training courses on personal and business
skills such as decision-making, leadership
and delegation, conflict management, project
management, communication skills and staff
mentoring.
Since 2020, PhosAgro Group has been
active in implementing a mentoring
programme for senior and middle
management, with the senior executives
(mentors) sharing their expertise and
knowledge and taking the Company’s
management culture to the next level. This
is unique opportunity for those included
in the talent pool to learn the skill of
management from the best professionals.
The programme involves over 30 top
managers of PhosAgro Group with more
than 120 meetings held between its
participants in 2021.
All people involved in the programme to
develop a pool of senior executive candidates
undergo comprehensive training that covers
such topics as management (including
practical tools), public speaking, and English.
Six top management appointments were
made from within this pool.
Line Manager programme for middle
and junior managers
As part of this programme, line managers take part in training and development
initiatives on the following topics:
Project results
> personnel management, planning,
> analysis and decision-making;
goal setting, organisational activities
and oversight;
> effective communication;
> focus on results;
> mentoring.
Virtual teaching package
In 2021, we put a lot of effort into
rolling out a virtual teaching package
and launching a distance learning
system. This was needed because of:
> the transition to remote work;
> demand for a specific range
of professions;
> a large number of trainees required;
> employees’ aspirations for
self-learning and keeping their
knowledge up to date
10Сorporate and job-agnostic
courses
competencies
1. A matrix of 24 corporate, job-
agnostic and job-specific competencies
developed.
2. Teaching packages developed
for 15 corporate and job-agnostic
competencies (20% of the theoretical
course).
3. Ten distance learning courses
developed for corporate and job-agnostic
competencies, with five more to follow.
4. A tool to create online courses for
nine job-specific competencies under
development.
A personal account was developed
for the system and made available
for pilot operation at all sites. It
features mandatory multi-sectioned
courses, courses to develop additional
competencies, process flowcharts,
student atlases, etc.
We also plan to convert 100% of the
theoretical course to distance learning
covering four professions under a pilot
project, with a view to scaling it up and
using the format for the 55 most needed
professions.
Mentoring
In 2021, we continued to implement
mentoring in the workplace as part
of a dedicated programme. The
programme’s key objectives have
not changed and are to:
> create a system to accumulate
Group-wide expertise to help
develop the competencies of new
hires;
> identify, evaluate and develop
the initial potential of employees
and leverage their professional
experience in line with the
Group’s requirements;
> improve labour productivity;
> reduce workplace injuries;
> improve professional skills of
employees;
> reduce the number of errors,
defects and other failures at
work.
To organise the process, we identified
a pool of mentors (over 1,500 people
so far).
The main selection criteria
included:
When implementing the
programme, we developed
and approved the mentor’s
competence model and evaluated
most of the participants
using competency-based
interviews. That was followed by
comprehensive training covering
all participants to improve
knowledge and personnel
development and training
approaches.
The modular mentoring
programme is promoted at every
production site of the Group by
issuing certificates and badges for
programme graduates, placing
information about the best
mentors on stands at business
units, holding awareness meetings
with mentors at business units,
publishing stories in corporate
print outlets, setting up and
running Mentoring groups
on social media.
In 2021, we held the first Mentor
of the Year corporate contest.
> qualifications and professional
experience;
The contest aims:
> perception by the team;
> leadership and training skills;
> commitment and motivation to
share experience and knowledge.
> to develop and promote
mentoring and make it more
prestigious;
> to drum up interest in and
encourage mentoring;
> to reward and recognise mentors
for their significant contributions
to fostering young talent.
A total of 78 mentors from across
the branches applied to represent
their business units in the contest,
filling out questionnaires that also
served as self-presentations.
The best mentors from all
of the Group’s locations went
on to compete in the grand final
at its Sosnovka Recreational
Compound. The eleven finalists
shared their experience,
discussed the programme’s
implementation, shared their
insights on how to address issues
and tried to prove their worth
and win.
The mentoring programme serves
to improve the professionalism
of our employees and reduce
personnel turnover and
recruitment costs, while
at the same time enhancing
employee loyalty and
engagement. The programme has
played a major role in building
the Group’s profile as an
attractive employer.
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Performance Review Personnel Assessment
To assess HR management and make efficient decisions in this
area, we continuously monitor employee performance metrics and
analyse the structure of staff costs, labour productivity, along with
the performance of social, training and other programmes.
Personnel evaluated in 2021, people
Assets
Volkhov branch
Apatit (Cherepovets)
Kirovsk branch
Balakovo branch
Group total
Personnel evaluated in 2021, %
GRI 404–3
Assets
Volkhov branch
Apatit (Cherepovets)
Kirov branch
Balakovo branch
Total for the Group
Incentives and rewards
Our robust system of rewards is aligned with
the Company’s performance and motivates
all employees to improve their performance in
order to achieve our business goals.
It ensures:
> decent pay;
> implementation of incentive programmes
using a transparent system of KPIs to
calculate managerial rewards;
> implementation of incentive programmes
to motivate blue-collar employees to deliver
against their targets;
> availability of financial and non-financial
rewards;
> employee coverage by social programmes;
Managers
White-collar workers
Blue-collar workers
Men
Women
Men
Women
Men
Women
34
43
71
29
2
9
5
8
12
31
48
19
177
24
110
8
36
25
9
78
63
14
134
33
244
19
1
79
20
119
Managers
White-collar workers
Blue-collar workers
men
3.28
1.04
1.31
2.37
1.49
women
0.19
0.22
0.09
0.65
0.20
men
1.16
0.75
0.88
1.55
0.93
women
0.77
0.87
0.46
0.74
0.66
men
6.09
0.34
2.47
2.70
2.06
women
1.84
0.02
1.45
1.63
1.00
> availability of benefits for certain employee
Average monthly pay, RUB
categories;
> adherence to global best practices on
benefit packages.
RUB1.3 bln
Social investment
2019
2020
2021
2019
2020
2021
Apatit and its branches
Group (excluding foreign traders)
Total
138
134
362
118
752
Total
13.3
3.2
6.7
9.6
6.3
87,191
96,401
106,006
83,770
92,442
111,288
Ratios between the standard entry-level wage and the established minimum wage in the
Company’s regions of operation1
GRI 202–1
Men
1.06
1.00
2.30
1.33
1.18
Women
1.04
1.00
1.32
1.17
1.18
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Region
Saratov region
Murmansk region
Moscow region
Leningrad region
Vologda region
Social benefits and employee
guarantees
We also provide social support
to our employees, increasing
amounts of financial aid, health
resort rehabilitation and corporate
housing programmes. In 2021,
we implemented major projects
worth over RUB 300 mln to
improve working conditions at our
facilities. For example, repairs were
carried out on lounge, shower and
meeting rooms, staircases, and
corridors in administrative and
production facilities.
Social investment, RUB mln
Programme
Financial aid to employees
Recreation, rehabilitation, health resort treatment and VHI
Improvement of working conditions
Corporate housing programme
Other social benefits and guarantees
Corporate and cultural events
Support to the trade union (special purpose funding and bonuses)
Total
1 PhosAgro and Apatit, including its branches and standalone business units
2020
2021
Change y-o-y,
%
48.3
225.3
80.7
67.5
84.6
72.3
151.9
731.3
64.7
359.5
302.1
76.5
227.7
134.2
188.6
1,353.3
34
59
253
13
169
86
24
83
134
135
Performance Review Investing in PhosAgro Group's future talent
PhosAgro Classes and PhosAgro Schools
Agro Class project
We continue to implement the PhosAgro
Schools career guidance project. Since
2013, the Company has invested over RUB
600 mln in it, including RUB 400 mln spent
on renovations and equipment. In 2022,
we plan to ramp up our investment by 2.5
times, with Kirovsk and Apatity schools
among the beneficiaries. PhosAgro Schools
intend not only to develop educational
and research auditoria and labs, but also to
implement career guidance projects and
give students, teachers and parents a better
understanding of PhosAgro Group and its
corporate culture.
Since 2019, the Group has employed
53 participants of the PhosAgro Classes
programme who graduated from
universities that had courses relevant to
our core activities, including 26 hires in
2021. All of them will pursue engineering
careers, having demonstrated a high level
of qualification from their first days on the
job. We expect to hire around 30 former
PhosAgro Classes students in 2022 and over
100 more by 2025.
More than 100 PhosAgro Classes 2021
graduates have been admitted to higher
educational institutions, with St Petersburg
Mining University enjoying the highest
popularity among them (18 graduates).
Since 2015, over 700 graduates of PhosAgro
Classes have been enrolled in higher
educational institutions, with technical
careers gaining more traction among them
every year.
In September 2021, 125 new students
started their 10th grade programme at
PhosAgro Classes, marking the ninth
admission round since the project launch.
53 participants
of the PhosAgro Classes programme were
employed by the Group since 2019
Launched in 2020, the Agro Class project
is based on a trilateral agreement signed
by PhosAgro, Voronezh Secondary School
No. 102 and Voronezh State Agricultural
University. The project focuses on facilitating
early specialism in school education, career
guidance for schoolchildren, their motivation
to choose an agricultural profession and
obtain the necessary in-depth knowledge
in natural and exact sciences. The project
targets 10th and 11th graders of Voronezh
Secondary School No. 102. In 2020, the
programme’s first students were enrolled
in the 10th grade. In 2021, 22 Agro |Class
students were promoted to the 11th grade
and 15 were enrolled in the 10th grade.
The Company helped procure
RUB 456,000 worth of research equipment
in the reporting year.
The first Agro Class will graduate in 2022.
We plan to monitor whether any of these
students are admitted to universities relevant
to our core activities and support them during
their first year there.
Collaboration with universities
We maintain strong relationships with
33 industry-specific universities as part
of our commitment to improving access
to quality education and supporting
academic research.
As part of its collaboration with
universities, PhosAgro Group:
> sponsors advanced training for
graduates of PhosAgro Classes in the
fields relevant to PhosAgro (subject
to their commitment to future
employment at the Company);
> offers scholarships to the most talented
students (based on exam results);
High-Potential Graduates
> invites students to see the industry in
practice at one of the Group’s many
companies;
> offers students a job in one of the
Group’s popular specialisations after
they graduate;
> allocates money for repair and
equipment of chemistry laboratories
at dedicated universities.
We have cooperation agreements and
roadmaps with many universities.
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We build upon the foundation laid
by PhosAgro Classes and PhosAgro
Schools by partnering with universities
through our High-Potential Graduates
programme as an avenue to better
reach university students interested in
working at PhosAgro Group. We offer
programme recruits a competitive
salary, as well as relocation and housing
support, and we assign them a mentor
upon their arrival at the workplace. The
programme’s key tasks are to build a
talent pool for key positions within the
Group and to identify career paths for
young talented professionals to prepare
future executives.
Number of people recruited to the High-Potential Graduates programme
Collaboration
with technical colleges
Since 2013, as part of its focus
on nurturing talent from secondary
schools to employment, PhosAgro
Group has been partnering with
technical colleges across its footprint,
including:
> Kirovsk branch of Murmansk Arctic
State University (Kirovsk, Murmansk
region);
> Cherepovets College of Chemistry
and Technology (Cherepovets,
Vologda region).
> In 2021, more than 130 students
were trained for and received
some of the key blue-collar jobs at
PhosAgro Group.
Our collaboration with technical
colleges cover:
> setting up testing grounds and labs
for students to acquire hands-on
experience using real equipment;
> internship programmes at
PhosAgro’s facilities with highly-
qualified mentors;
2021
2020
2019
80
71
63
> undergraduate and graduate thesis
research;
> sports, educational and research
initiatives, competitions, Olympiads.
PhosAgro Group also supports
a regional Training Centre
at the Cherepovets College
of Chemistry and Technology.
In 2021, PhosAgro Group recruited 80
young specialists through the High-
Potential Graduates programme. This
brought to 458 the total number of
graduates who have joined the Group
through this initiative since its inception
in 2012. Over 300 of these employees are
still with PhosAgro Group today, pursuing
careers in such areas as mineralogy,
geology, hydraulic engineering,
chemistry, thermal energy and electricity
production, rail transport, open-pit
and underground mining, and mine
surveying.
Of the programme participants still
employed at PhosAgro as at December
2021, over 35% had received promotions
and/or had been included in our talent
pool, and many of them had successfully
completed the projects assigned to them
upon recruitment.
136
137
Performance Review Industrial
safety
2021 highlights
-75%
reduction in severe injuries
(three cases in 2021 vs twelve
in 2020)
-37%
reduction in road traffic accidents
across the Group (19 cases in 2021
against 29 in 2020, none involving
injuries or major damage)
0 industrial accidents
lost time injury frequency rate
(LTIFR) at the Balakovo branch
of Apatit
0 fires
Global Sustainable
Development Goals (SDGs)
Strategic goals:
to reduce workplace
injuries
by 10%
annually
to reduce the number
of incidents
by 10%
annually
Strategy
PhosAgro Group employs over 18,000
people. The headcount of our contractors
working temporarily at our production
sites and other facilities reaches many
thousands as well. All employees of
PhosAgro Group and its contractors need
to go back from work to their loved ones
in perfect health. This is the underlying
principle of all our efforts to ensure safe,
healthy and comfortable workplace
conditions.
PhosAgro Group is consistently improving
its safety culture, employee responsibility
and awareness, hazard identification
procedures and danger prevention
measures by putting managers at
all levels in charge and studying and
applying best health and safety practices.
We apply continuous efforts to identify
and reduce health and safety threats to
PhosAgro Group employees, contractors
and visitors to the Company’s sites.
Our Strategy to -2025 focuses on
fostering a safety culture and adhering
to the highest occupational health and
safety standards. We have also adopted
a Health and Safety Strategy, which
defines key focus areas and targeted
initiatives to reduce the risks associated
with various operations. In 2021, we kept
implementing it.
Our key aim is to avoid any fatalities and
take a leading position among the best
health and safety performers.
The Company’s relevant goals and
objectives, both strategic and day-to-
day, are based on huge volumes of data
derived from internal and external audits,
inspections, incident investigations,
employee recommendations and
feedback.
Management approach
Health and safety management system
GRI 403-1
We pay special attention to making our
health and safety management system
compliant with applicable laws and the
highest international standards.
To this end, we have introduced a multi-
tier health and safety management system
involving managers of all levels.
In 2008, the Group introduced
an integrated health and safety
management system which has been
subject to annual recertification by an
independent certification authority.
In 2021, Apatit’s Cherepovets site
was certified for compliance with
ISO 45001:2018.
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Health and safety management system
Occupational health services
GRI 403-3
Organisational unit
Key responsibilities
Occupational health services play a key
role in ensuring safety at our facilities.
and other internal regulations;
> preventing workplace injuries,
Apart from applicable laws, these
activities are regulated by:
> sets strategic priorities and develops
> reviews executive management's
relevant policy;
health and safety reporting
Their main objectives are:
occupational diseases and work-
related illnesses and improving
workplace conditions;
The Board
of Directors
Environmental, Health and
Safety Committee of the Board
of Directors and Sustainable
Development Committee
of the Board of Directors
> taking steps to ensure workers’
compliance with health and safety
requirements;
> monitoring workers’ compliance
with OHS laws and regulations, the
collective agreement, OHS agreement
> advising workers on, and raising their
awareness about occupational health
and safety;
> studying and disseminating best OHS
practices and promoting occupational
health.
> health and safety SOPs at the facility
(shop) level;
> production SOPs;
> worker health and safety instructions;
> corporate standards;
> process regulations;
> accident management action plans,
etc.
Key OHS focus areas and
initiatives in 2021
Key targeted OHS programmes
in 2021:
Improving contractor safety
practices
> Internal investigations of every
> Improving the safety of working at
accident, including micro- and minor
injuries, aimed at identifying the root
causes.
> “Golden Rules” of OHS.
> Assessment of potential contractors
for compliance with the Group's OHS
requirements.
> Improving contractor safety practices.
> Health and safety training for
employees.
heights (including a theoretical course,
drills at the Vysota (Height) training
centre and with mobile simulators).
> Gas safety.
> Improving transport safety.
> Identifying and managing production
process risks.
> Development of gas and mine rescue,
fire-fighting and fire prevention
services.
> Risk assessment procedure, including
> Programme to improve contractor
fatal hazard protocols.
safety practices.
We consider the safety of contractors’
employees temporarily working at
our production and other facilities an
indispensable component of our OHS
strategy.
ESG assessment is a key
factor in contractor
selection (
for more
information, see the Supply Chain
section on page 118).
Management
Executive bodies
> define and oversee the health and
safety policy;
> review all on-site incidents involving
people and machinery on a weekly
basis
OHS Department
> supervises OHS management
functions across the Group’s
companies to implement OHS policies
and strategies;
> cooperates with external consultants
to implement the best practices of
OHS management;
> conducts audits and inspections at
> collects data and prepares OHS
the Company’s sites
reports for the Management Board
and the Environmental, Health and
Safety Committee;
Operations
Heads of production sites
> oversee OHS policies and strategies
at respective production sites;
> develop and implement response
measures following internal and
external audits and accident
investigations
Operational
OHS staff
Local OHS management
functions
> monitor the site’s compliance with
OHS regulations and corporate
standards;
> interact with relevant regulatory
authorities on behalf of the site and
facilitate inspections;
> develop targeted programmes,
> conduct internal inspections and
conduct training and stage initiatives;
audits and present analytical reports
to the local management.
> LOTO system.
> Efforts to strengthen the role of OHS
officers.
> Public scrutiny system.
> OHS incentive system for employees.
> OHS communication system.
Since 2014, health and safety committees have
been functioning at the Group’s companies.
They are both an integral part of our OHS
management system and a form of employee
participation in it. In its work, the Committee
relies on the principles of social partnership.
In 2021, we revised the regulation on the health
and safety committee. Now, it meets on a
monthly basis (previously, at least once in three
months) to review reports on 14 focus areas:
> PPE effectiveness
> Education and training
> Contractors’ safety
> OHS leadership, promotion and
communication
> Industrial safety
> Fire safety
> Transport safety
> Safety Culture Transformation Project
> LOTO system implementation – stage 2
> “Golden Rules” of OHS.
> Assessment of workplace conditions, and
healthcare
> Trade union
> Accident/incident investigation
> Safety assessments and audits
Workers are represented at committee
meetings by heads or representatives of local
unions.
Channels for health and safety feedback:
> regular local OHS meetings;
> OHS meetings on production sites,
in departments and at facilities;
> union and union committee meetings
(for feedback from OHS officers);
> one-on-one meetings, and supervision;
> OHS training sessions and briefings;
> industrial and fire safety drills;
> corporate e-mail;
> corporate periodicals;
> health and safety committees;
> employee surveys and OHS
questionnaires.
Employees can also use the Public Scrutiny
application to submit their health and safety
proposals.
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Our OHS agenda is integrated into contractor relationships at all stages:
1 Contractor selection
2 Preparation for work
> OHS requirements included in the
specifications.
> OHS qualification assessment to establish
the status of potential contractors:
“Qualifies” for contractors with which
agreements are permitted; “Does not
qualify” for contractors with which
agreements are not permitted.
> Tender committee meeting (companies with
higher qualification scores are prioritised).
> The selected company receives a copy
of the contractor safety requirements
together with a notice of the tender results.
> Drafting and negotiating the documents
required for work (project implementation
and task plans, obtaining permits, etc.).
> Providing contractor data and supporting
documents, as well as an order/instruction
on employee allocation for the contracted
activities.
> Maintaining digital systems designed to
automate data exchange and facilitate
cooperation between the contractor and
the Group (PhosAgro’s official website and
contractor’s account in the OEBS corporate
information system).
> Introductory briefings and pass
issuance.
> Examination of the working site to identify
key risks, preventive measures and possible
impediments to work.
> Assessment of the contractor’s
readiness to work by its safety officer and
representatives of the Group’s business
units (including visits to the contractor’s
premises).
> Audits of compliance with the contract, and
organisational and technical documents
(project implementation, work and task
plans, etc.).
> Contract award.
> Designating the contractor’s safety officer
under each contract.
contractor employees under the Vysota
(Height) programme with drills at the
training site of PhosAgro Education
Centre.
before work.
3 Contractor supervision
> When performing work / providing
services at the Company’s premises,
the contractor must ensure full-time
employment of one or more OHS
officers.
> OHS compliance audits
are carried out:
> daily by heads and employees
of business units;
> by the contractor’s OHS officer during
visits to the site;
> by OHS Department
officers.
> Contractor audit reports accompanied
by photos and/or charts (if any).
with the findings of audits, incident
investigations, etc.).
> Danger prevention measures before
resuming the work, control over
addressing the drawbacks identified
by audits.
> Informing legal staff of all contractor
violations with a view to applying
penalties (including removal of
the employee from the Company’s
premises and possible termination
of the contract).
> Qualification reassessment (including
changing the contractor’s OHS status
upon complementing the information
of the assessment questionnaire
> Meetings with contractors’ responsible
employees.
4 Preparation for work
> Work acceptance.
> Contractor performance assessment.
The performance assessment results
are later used in contractor selection
based on the evaluation of their
health, safety and environmental
management systems and current OHS
statistics.
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Internal and external industrial safety audits
In line with statutory requirements,
PhosAgro Group is subject to
scheduled external audits by Russian
authorities, including the Federal
Service for the Supervision of
Environment, Technology and Nuclear
Management (Rostekhnadzor), State
Labour Inspectorate, Federal Service
for Surveillance on Consumer Rights
Protection and Human Wellbeing
(Rospotrebnadzor), the Ministry for Civil
Defence, Emergencies and Elimination
of Consequences of Natural Disasters
(EMERCOM). We may also engage
consulting companies, or international
associations of which the Group is a
member to conduct additional external
audits of compliance with international
standards, or as part of a special
assessment of workplace conditions.
In 2021, state supervisory authorities
carried out 132 audits at Apatit
and its managed companies. The
reduction in the number of audits
(from 146 in 2020) was due to our
COVID-19 response, which saw audits,
including scheduled ones, cancelled or
postponed.
We also run internal audits conducted
by our OHS departments and
directorate, managers and employees
exercising production H&S control.
After external and internal audits,
the Company issues orders and
instructions outlining remedial action
plans and establishing the deadlines
and responsible persons. Identified
breaches are remedied within the
Risks and opportunities
agreed time limits, and gaps that can
be eliminated at no additional cost are
addressed immediately.
The Company has a procedure for
drafting, submitting and reviewing
reports on internal and external OHS
audits. The results of all internal and
external assessments and audits are
recorded in the Safety and Instructions
(Shift Assignments) management
systems for further analysis, gap
identification and elimination
monitoring. We also submit all relevant
reports to state supervisory bodies and
statistical agencies in accordance with
the Russian laws.
The following strategic risks affect our
OHS objectives (
for more information,
see the Strategic Risks section on page 68):
6 health and safety risk;
20 infectious disease risk.
changes.
OHS-specific risks are:
> occupational risks of the Group’s
business units, including occupational
disease risks;
> safety culture risks, including
OHS communications and safety
incentives;
> risks of OHS-related regulatory
The Group develops corrective
measures as necessary and unlocks
opportunities to mitigate those risks.
Below you can find more information
about what we do on this front.
142
143
> Providing opportunities for training
> Briefings on labour, road and fire safety, etc.
4 HR risk;
Performance Review Results
Hazard identification, risk assessment, and incident
investigation
GRI 403-2
Performance analysis, revision
and setting strategic OHS goals
Forecasting and assessment
of key OHS risks
Control, analysis
and investigation of accidents
Development
and implementation of OHS
initiatives
PhosAgro Group has implemented a system-
based approach to hazard identification, risk
assessment, and incident investigation as a
fully integrated process. This approach seeks
to integrate occupational health and safety
management into the Group’s overall business
processes.
We have adopted a system that moves
through a “plan–do–check–act” cycle,
promoting leadership and best practices
through meaningful consultation and
participation of employees from all job levels
in the Group.
We are constantly working to assess and
mitigate risks. We perform risk assessment
and identify material risks using our
proprietary methodology. Following hazard
identification and risk assessment, the unit’s
OHS officer compiles a List of Occupational
Risks, which is then used as a basis for the
Group’s List of Material Occupational Risks.
Risk assessment takes into account the
following aspects:
> degree of personnel exposure;
> impact on personnel;
> frequency of occurrence;
> compliance with the applicable regulatory
and other OHS requirements.
In accordance with an established procedure,
information about incidents is provided by
eyewitnesses to the supervisors in charge
and by those supervisors to the dispatcher
of the enterprise. Next, the dispatcher notifies
the designated persons using text messages
and phone calls.
Industrial accidents and incidents are
investigated in accordance with legislative
requirements and internal procedures
to determine the root causes. The Company
encourages its staff to disclose information
on potential sources of danger to employee
health and life.
For better OHS efficiency, and to automate
and streamline the relevant processes, we
have introduced and now use the Safety and
Instructions (Shift Assignments) management
systems. Both systems include a Risk
Management module. The module enables
internal check list-based OHS assessment
at all units of Apatit. The module’s new
underlying principles help enhance production
H&S control, while its new functions facilitate
operation, monitoring and analysis.
PhosAgro Group has a formal procedure
for addressing workplace hazards. When a
hazard is identified, employees are required to
suspend work and report it to their supervisors
directly or via the Public Scrutiny mobile app
(on an anonymous basis if necessary). The
supervisor uses the report to assess the risk
and develop a remedial action plan.
Public Scrutiny mobile app
LOTO system
1
2
3
4
Download the app
to a mobile device
and create an account.
If a hazard is identified, create a report in the app, adding
the required data (location, description, suggested
remedial actions) and taking a photo of the hazard. Save
the report and send it for processing. The app can also
be used to suggest improvements.
Track the report and its status
in the app or management system.
Receive feedback (unless the report was anonymous)
and a confirmation of hazard elimination, status
of the suggested improvement.
In 2021, PhosAgro Group successfully
continued the implementation of a
LOTO system that helps avoid hazards
associated with unauthorised use
of energy (electricity, gases, liquids,
etc.) and ensure the proper shutdown
and prevent the restart of dangerous
equipment before maintenance and
repairs are complete.
253
internal training sessions
and two joint training sessions
with EMERCOM
Emergency response
procedures
At our sites, we have introduced the
following emergency response and
prevention measures compliant with the
Russian laws:
> accident management action plans
for all hazardous industrial facilities as
defined by the Russian laws;
> training sessions, test alerts for
different scenarios, and emergency
response exercises, with EMERCOM
and other services also taking part.
In 2021, the Company arranged
253 internal training sessions and
two joint training sessions with
EMERCOM;
> Apatit’s programme for developing
gas and mine rescue, fire-fighting and
prevention activities for 2019–2022.
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145
Performance Review Transport safety
In 2021, we carried on with our efforts
to ensure safety of passenger and cargo
transportation.
The systematic efforts made by the OHS
Department and transport departments to
mitigate traffic accident risks include drafting
In 2019–2021, Apatit and its branches managed to reduce
the number of traffic accidents
by 26% (to 37 from 50).
internal regulations to ensure safe operation
of motor vehicles, self-propelled machines
and rail transport and performing targeted
and full-scope inspections of vehicles used
by our contractors, subsidiaries. In 2021,
for example, we created mobile teams at
the Volkhov and Kirovsk branches of Apatit
to monitor compliance with the laws and
internal regulations on road traffic safety and
inspect vehicles on a daily basis (*earlier such
teams were formed at Cherepovets-based
Apatit and its Balakovo branch).
Vehicle safety inspections
Indicators
Number of inspections
Number of violations
Violation frequency rate
Penalties, RUB '000
Road and rail accidents per year
Road accidents
Rail accidents
2021
2020
2019
2019
2020
2021
4,120
7,188 13,845
1,259
1,300
2,073
0.31
0.18
0.15
4,559
6,067
8,900
2021
2020
2019
19
29
44
18
16
6
Goals and metrics
Senior executives (management of the
Company and its business units, as well as
their direct subordinates) recognise the
importance of OHS and are committed
to safety and ready to take necessary
managerial decisions. Since 2014, PhosAgro
Group has had a system of KPIs that uses
uniform standards linking the size of
management remuneration to the efficiency
of OHS measures, among other things.
In particular, the Group established the
following KPIs with regard to OHS:
> LTIFR covering all staff categories;
> number of action items from improvement
notices issued by supervisory authorities
that have not been implemented on time;
> zero accidents;
> number of injuries among contractor
employees;
> zero fatalities among contractor employees.
Work-related injuries
GRI 403-9
We were deeply saddened by the fatality
involving a contractor’s employee
which occurred at the production
site of Apatit’s Volkhov branch during
unscheduled cleaning of process
equipment in December 2021. The
investigation has been completed.
We have thoroughly analysed the
circumstances of the fatality and
communicated conclusions and
recommendations on preventive
measures to the management
and employees of the facility and
contractors. This tragedy clearly shows
the importance of further improving
contractor safety practices.
In 2021, PhosAgro Group continued
its efforts to perfect the health and
safety management system and made
considerable progress in reducing
injuries:
> severe injuries reduced by 75% – to
three cases from twelve;
> incidents reduced by 75% – to two
cases from eight;
> zero accidents;
> zero fires;
> no traffic accidents with injuries or
major damage.
At the same time, the reporting year
saw an increase in the number of
minor workplace injuries. The total
number of injuries was 41 (against
32 in 2020), of which 24 (against 22
a year earlier) happened to employees
working for contractors, subsidiaries
and affiliates. Across the Staff of JSC
Apatit and its Kirovsk, Balakovo and
Volkhov branches, the overall LTIFR1
was 0.85 (against 0.52 a year earlier),
with the Cherepovets site of Apatit
slightly improving its result from
0.42 to 0.40, and Balakovo branch
achieving a zero LTIFR (against 0.48
in 2020). However, higher LTIFRs at
the Kirovsk and Volkhov branches
did not allow us to achieve our goal
of improving the Group’s overall
performance in the reporting year. We
see this as a major shortcoming, and
our action plans for 2022 reflect the
absolute need to eliminate it. We also
expect that active measures to improve
the labour safety of contractors will
soon start producing the intended
outcome.
Most of the injuries in 2021 were caused
by falling while in motion (mainly due
to haste, failure to apply the three-point
rule, or use of gadgets while moving)
or by moving or rotating objects and
equipment.
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LTIFR, per 1 mln of hours worked
Assets
JSC Apatit
Kirovsk branch
Balakovo branch of Apatit
Volkhov branch of Apatit
Total:
Fatalities as a result of work-related injury, per 1 mln of hours worked
Staff
Employees
Staff of external contractors (including subsidiaries, affiliates and managed companies)
LTIFR, per 1 mln of hours worked
Staff
Employees2
Employees + staff of external contractors (including subsidiaries, affiliates and managed
companies)3
2019
2020
2021
0.56
0.75
0.48
0
0.42
0.47
0.48
1.37
0.40
1.18
0.00
2.28
0.59
0.52
0.85
2019
2020
2021
0.16
n/a
0
0
0.08
0.03
2019
2020
2021
0.59
0.52
0.85
n/a
0.69
0.81
1 Lost time injury frequency rate, excluding fatalities.
2 Staff of JSC Apatit and its Kirovsk, Balakovo and Volkhov branches.
3 Staff of JSC Apatit and its Kirovsk, Balakovo and Volkhov branches; staff of external contractors carrying out work for PhosAgro Group companies;
staff of internal contractors (subsidiaries, affiliates and managed companies).
146
147
Performance Review High-consequence work-related injuries (excluding fatalities),
per 1 mln of hours worked
Staff
Employees
Staff of external contractors (including subsidiaries, affiliates and
managed companies)
2019
2020
2021
0.11
0.21
0.05
n/a
0.25
0.07
19.9 mln
hours worked by employees
Hours worked by employees
Employees
2019
2020
2021
18,567,299.61
19,091,953.05
19,893,115.33
Staff of external contractors (including subsidiaries, affiliates and managed companies)
n/a
24,359,432.13
29,207,298.96
Work-related injuries in 2019–2021
1
2
0
2
Branches of Apatit
Subsidiaries and affiliates
External contractors
0
2
0
2
Branches of Apatit
Subsidiaries and affiliates
External contractors
9
1
0
2
Branches of Apatit
Subsidiaries and affiliates1
External contractors
JSC Apatit
Balakovo branch
Volkhov branch
Kirovsk branch
JSC Apatit
Balakovo branch
Volkhov branch
Kirovsk branch
JSC Apatit
Balakovo branch
Volkhov branch
Kirovsk branch
Number of injured
Minor injuries
Serious injuries
Fatal injuries
Total
3
–
4
9
7
14
–
–
–
1
1
1
–
–
–
–
0
1
3
0
4
10
8
16
Number of injured
2
–
2
2
7
5
1
1
–
2
6
2
–
–
–
–
–
2
3
1
2
4
13
9
Number of injured
Minor injuries
Serious injuries
Fatal injuries
Total
4
0
0
5
5
5
0
1
0
1
1
6
0
0
0
3
0
2
4
1
0
9
6
13
1 The above data include the following subsidiaries and affiliates: Tirvas, Gorny Tsekh, PromTransPort, Korporativnoe pitanie, Construction Materials Centre, DROZD-Khibiny, NIUIF,
Aeroport, SMART, Teleset, Khibiny Electricity Retail Company, Ecoprom, PhosAgro Education Centre, Mekhanik, PhosAgro Engineering Centre, Trading House PhosAgro. Some of
them are non-profit organisations or are not subsidiaries or affiliates of Apatit.
Work-related ill health
GRI 403-10
In 2021, the Company recorded 30 cases
of occupational diseases, with the Kirovsk
branch of Apatit accounting for 87% of
them. No cases of death as a result of
occupational diseases were recorded.
Subsequent to the investigation of
occupational diseases, the following
initiatives were introduced in line with
the orders on measures to prevent
occupational diseases:
Starting from 2021, PhosAgro Group has
been analysing cases of occupational
diseases and looking for ways to manage
the risks of their occurrence.
The main causes of occupational diseases
are:
> hard labour;
> vibration (general or local);
> noise.
> ensuring regular medical
examinations in a timely manner;
> timely maintenance and inspection of
equipment;
> control of PPE use at workplaces with
higher risk of occupational diseases;
> oversight of compliance with the
work and rest regime and regulated
workplace breaks
> compliance with sanitary rules
at workplaces with higher risk of
occupational diseases;
> unscheduled special audits of
working conditions at workplaces with
higher risk of occupational diseases
caused by harmful and/or hazardous
production factors.
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Work-related ill health
Cherepovets site
Kirovsk branch
Volkhov branch
Balakovo branch
2017
2018
2019
2020
2021
0
37
0
0
0
50
0
0
0
27
0
0
0
23
0
0
4
26
0
0
OHS expenses, RUB mln
Assets
JSC Apatit
Kirovsk branch of JSC Apatit
Balakovo branch of JSC Apatit
Volkhov branch of Apatit
Total1
2019
2020
2021
1,094
911
407
189
884
1,593
402
150
1,397
1,770
471
203
2,601
3,030
3,840
The significant increase in OHS expenses at Apatit's Cherepovets site (by 58% as
compared to 2020) was due to the purchase of equipment for the LOTO project.
The increased costs at the Volkov branch of Apatit (by 35% as compared to 2020)
were related to the hire of a considerable number of new employees on the back
of new production site launches and an associated increase in PPE, training
and medical support costs.
1 The total may differ from the sum of parts due to rounding.
148
149
Minor injuries
Serious injuries
Fatal injuries
Total
Actual OHS expenses of PhosAgro Group
Performance Review
Changes to labour safety promotion
programmes
> a new incentive programme, The Best
Business Unit of the Enterprise, was
launched;
Worker participation, consultation, and communication on occupational
health and safety
Revised Golden Rules
In 2021, we adopted a revised version of
our Occupational Health and Safety Golden
Rules. The rules were formulated following
the extensive analysis of information about
injuries, incidents and accidents occurred at
our production facilities and are intended to
focus the attention of the Company’s and
third-party contractors’ staff on safety issues.
The Golden Rules are mandatory for all
the employees of PhosAgro Group and
its contractors, as well as for the Group’s
visitors, and any failure to comply with them
is considered a serious violation of labour
discipline.
The Golden Rules provisions are
communicated to the employees at the
introductory OHS briefings.
Incentive programmes
The Group has developed OHS promotion
programmes to maintain each PhosAgro
Group employee’s interest in ensuring their
own safety and the safety of those around
them, as well as to encourage the employees
to take initiative and implement OHS
improvements. In 2021, the employee labour
safety promotion regulations were revised as
follows:
> teams making it to the final of CEO's OHS
Achievement Award contest will receive
bonuses (RUB 50,000 per team);
> frequency of bonus payments under
individual incentive programmes was
changed from once every six months
to once a quarter;
> bonuses under the Safety Ideas programme
were increased from RUB 10,000 to RUB
30,000.
At the moment, the promotion programme
includes:
> individual incentive programmes (Best OHS
Employee and Safety Ideas);
> collective incentive programmes (CEO’s
OHS Achievement Award, and Best OHS
Business Unit).
Individual
Collective
Safety Ideas
(Cherepovets site – Kirovsk branch –
Balakovo branch – Volkhov branch)
Once a quarter
RUB 30,000 + RUB 5,000 for every idea implemented
Best OHS Business Unit
(Cherepovets site – Kirovsk branch –
Balakovo branch – Volkhov branch)
Once a year (January)
RUB 100,000
Best OHS Employee
(Cherepovets site – Kirovsk branch –
Balakovo branch – Volkhov branch)
Once a quarter
RUB 35,000 / RUB 10,000 / RUB 5,000
for the 1st, 2nd and 3rd places respectively
CEO's OHS Achievement Award
(1 winner from the Company)
Once a year (February)
RUB 125,000 + RUB 50,000 for teams
participating in the superfinal
Roll-out of the OHS remote monitoring system at the Cherepovets site of Apatit
Starting from 2021, Apatit’s Cherepovets
site (fluosilicate acid storage facility of the
aluminium fluoride shop) participates in
Rostechnadzor’s experiment to roll out
an OHS remote monitoring system under
Russian Government Decree No. 2415
On Experimental Roll-out of the Industrial
Safety Remote Monitoring System dated 31"
December 2020.
The experiment provides for the development
of stand-alone remote monitoring technology
for hazardous production facilities, and
a relevant legal framework. As assumed,
the technology will improve the overall
reliability and monitoring efficiency of safety
systems, and help reduce the associated
paperwork and bureaucracy.
GRI 403-4
For better OHS communication
with employees, we have adopted
Regulations on the OHS Communication
System. Pursuant to the Regulations,
the OHS communication system
is divided into internal and external
communications, and provides for
a feedback procedure.
Internal OHS communication is achieved
through:
> health and safety bulletin boards,
posters and other visuals;
> health and safety committees;
> corporate television (screens), intranet
> Group management meetings and
conferences to discuss the health and
safety performance of our enterprises;
regular OHS meetings in departments,
on production sites and at facilities;
site, e-mail;
> corporate periodicals;
> preventive practices by OHS officers
(including one-on-one meetings,
training, mentoring, supervision, etc.).
Worker training on occupational health and safety
GRI 403-5
In 2021, 7,800 PhosAgro Group
employees were trained in occupational
health.
PhosAgro Group keeps working to
improve OHS competencies and
knowledge of its staff. Employees of the
Group undergo online and in-person
training arranged at our PhosAgro
Education Centre.
> Health and safety promotion at Apatit
> Occupational health and safety
communication system
> Occupational Health and Safety
Golden Rules.
Whenever required, the courses
developed earlier are updated following
changes in the law and the Group’s
internal regulations.
Our e-courses are easy to understand
since they are made in the form of
illustrated slides with key highlights on
them. In particular, we offer an e-course
on corporate OHS standards. It is
followed by tests to check the knowledge
and understanding of the standards and
requirements.
In 2021, we updated and rolled out the
following e-courses:
> Working at heights
> Road traffic safety system at Apatit
and its branches
> Contractor safety requirements
> LOTO system in maintenance and
repairs
In 2021, we revised and rolled out three
e-courses on the key occupational
health and safety regulations:
> Investigation and communication
of occupational health and safety
accidents/incidents
> Management of contractors’
organisational and technical
documents.
PhosAgro Education Centre organises
OHS training, including that in basic fire
safety and electrical safety, industrial
safety pre-certification sessions, drills
at the Vysota training centre, and safety
training sessions to develop employee
hands-on knowledge and skills.
All our employees, from managers to
blue-collar staff, receive occupational
health and safety briefing and training
as required by the Russian laws.
Furthermore, the employees of the
Group and some contractors are offered
a number of additional courses.
To improve OHS training and remind
employees about workplace safety,
PhosAgro Education Centre creates
animated videos.
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Performance Review Raising awareness about OHS
To keep our employees well-informed about
our safety measures, PhosAgro constantly
develops and updates OHS check lists,
presentations and other visual materials that
emphasise the crucial information employees
must rely on in various situations, including
working on particular assignments, in order to
stay safe.
In 2021, the Company put in place check lists/
presentation materials covering the following
issues:
> Rules for working in winter / safe driving
and walking in winter
> Safe use of stairs / flights of stairs
> Safety briefings on operating an angle
grinder
> Golden Rules
> Compliance with epidemiological
restrictions, etc.
In October 2021, select business units of
Apatit launched monthly briefings.
The key objectives of such briefings are:
> revising industrial dangers/hazards, OHS
requirements (as set out in the Company’s
internal regulations, OHS guidelines,
technical and operational documents), and
safe work practices;
> fostering leadership skills among mid-level
managers;
> developing managers’ communication skills.
We plan to roll out this initiative to all business
units in 2022.
Promotion of worker health
GRI 403-6, 403-7
PhosAgro Group places a strong
emphasis on disease prevention,
health improvement, and high-quality
affordable healthcare for the employees
of all its production sites.
The Group takes part in the Health 360
programme run by the Russian Chemists
Union to promote annual health self-
assessments based on a dedicated
questionnaire.
In 2021, the Company developed a
unified policy to be approved in 2022
to manage health and well-being of its
employees envisaging an ambitious plan
to carry out dedicated programmes.
All our employees benefit from long-
term voluntary health insurance (VHI)
covering a broad range of risks.
The benefits include:
> health resort (rehabilitation) treatment
at corporate resort centres in our
regions of operation and countrywide;
> treatment (expensive, dental, medical
counselling);
> services of outpatient clinics and
health posts at the Company’s
production facilities.
On-site clinics can provide accident
and emergency care and specialist
advice from a therapist, endocrinologist,
neurologist, ophthalmologist, dentist and
other doctors.
PhosAgro Group’s production sites
organise initial and regular check-ups
and examinations of staff involved in
potentially hazardous and/or dangerous
activities.
Since 2010, the Company has been
running a programme to improve social
and working conditions by conducting
annual scheduled repairs in all buildings
housing social and sanitary facilities,
canteens, and workplaces. PhosAgro
has invested over RUB 1.8 bln in this
programme since 2010.
In 2021, the Company made further
progress on its Occupational Health and
Preventive Healthcare Programme by
focusing on making workplaces more
comfortable and putting in place break
rooms. In doing so, we wanted to create
the best conditions for employees to
unwind, get away from the stresses of
the job, restore productivity, and take
part in psychotherapeutic activities
involving emotional hygiene. These
initiatives enable employees to carry out
health self-assessments and get medical
assistance as soon as the first negative
symptoms develop. Furthermore, our
employees will be able to monitor/check
their health under various circumstances
(emotional and physiological, after
work) and report reliable information
to their physician. Psychological Relief
Room, another project aimed at reducing
employee’s emotional stress, kicked off in
2021 at Apatit’s Balakovo branch. Going
forward, the project will be extended to
other facilities of the Group.
In 2021, Balakovo branch saw another
pilot project designed to promote
telemedicine by providing employees
with broad and prompt access to medical
services, while also reducing personal
contact and the number of visits to
medical facilities. The technology has
become particularly relevant during the
COVID-19 pandemic.
Starting from 2022, employees of all
PhosAgro Group's facilities have access
to Telemed, a telemedicine service
offered by SOGAZ. Furthermore, DOCTIS,
a project offering online counselling
on critical issues, is piloted jointly by
DobroService and Doctor Nearby.
Dietary/health meals and milk are
distributed to employees working
in harmful conditions. Food quality
is monitored on an ongoing basis under
the supervision of a trade union.
On top of that, we have a dedicated
working group that attends all of
Apatit’s sites to assess food quality and
canteen conditions on an annual basis.
As part of healthcare initiatives, staff
canteens provide nutrition according
to Diet No. 10 targeting patients with
cardiovascular diseases.
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153
Performance Review The traffic light food labelling is underway,
with the pilot project completed in 2021 at
Balakovo branch.
Corporate fitness centres at PhosAgro
facilities include gyms, fitness halls, air
rifle shooting ranges, as well as game
halls (volleyball, badminton, basketball,
futsal, table tennis, billiards, and darts)
and swimming pools. Under the health
improvement programme, employees can
visit both on-site and off-site fitness centres
and pools on beneficial terms.
We also make efforts to support our
employees’ mental health and well-being by
giving them an opportunity to seek help from
an on-site psychotherapist or ask for online
counselling. Automated registration of calls
was introduced, and a free hotline was put
in place. The counselling is also available via
the corporate e-mail and messengers. The
Company produced three videos addressing
the issue of stress during the pandemic,
which describe the ways by which COVID-19
is transmitted and relevant preventive
measures, as well as motivational postcards
with information on how to withstand stress.
Heads of production participate in trainings
to prevent emotional burnout and
encourage collaboration within the team. As
part of the Week of Mental Health, we took
steps to remind our employees of the need to
practice emotional hygiene.
Key projects in 2021
Apatit's target programme for developing gas and mine rescue, fire-fighting
and prevention activities for 2019–2022.
Apatit's target programme for developing
gas and mine rescue, fire-fighting and
prevention activities for 2019–2022
is ongoing at Cherepovets production
site. In 2021, similar programmes were
completed at Kirovsk, Volkhov, and
Balakovo branches.
Programme results:
> improved training facilities and
equipment of gas/mine rescue and fire-
fighting units;
> re-equipped gas/mine rescue and
fire-fighting units, purchased new
equipment and machinery.
> enhanced quality of hands-on training
for young hires;
As part of the programme, headcount
of the respective business units increased
by 92 people to 456 employees.
The total amount of funds allocated for the
programme stands at approximately RUB
237 mln.
> achieved compliance with gas, mine,
fire rescue, and personnel training
regulations;
Purchased:
392 units
of gear
579 units
of equipment
17 units
of machinery
Two buildings
were renovated to
accommodate a gas
rescue squad.
396 people
participated in personnel
training initiatives
Transformation of safety culture and OHS management system
In 2021, we engaged a third-party
consulting agency to complete
a comprehensive evaluation of
PhosAgro Group's safety culture and
OHS management system, and to
develop and finalise a response plan
designed to improve them.
According to the evaluation findings,
the Group is at the “Dependent”
stage (as per Bradley curve1) and
demonstrates a “conscious” approach
to hazard identification and risk
assessment.
To ensure further improvements,
in 2021 we launched a three-year
project called "Transformation of
Safety Culture and OHS Management
System".
Project goals:
> transforming the safety culture
and developing OHS leadership;
> developing, adapting and ensuring
the sustainability of best practices
in the field of safety culture and
OHS management improvements;
> learning how to arrange and carry
out works associated with high
OHS risks;
> ensuring the sustainability of our
performance and the relevance of
our management system over the
next five years;
> reaching stage 3.1 as per Bradley
curve by 2024 (in 2021, we were at
stage 2.2)
The project covers key business
units of Apatit, its entities under
management, subsidiaries and
affiliates, and third-party contractors
engaged by our production sites.
The initial results of the project
(improved safety standards for
higher-risk works) are expected in
the first half of 2022.
2.2
stage as per Bradley
curve in 2021
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1 Reflects evolution of safety culture and OHS system efficiency. The curve assesses the transition from external supervision to the conscious attitude of each
employee towards labour safety. There are four safety culture stages: reactive, dependent, independent, and interdependent).
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Performance Review Environmental
review
UN Global Sustainable
Development Goals
(SDG)
Key objectives
Climate
2028: gross emissions: Scope 1 —
4,175.5 kt of СО2 equivalent;
Scope 2 — 794.7 kt of СО2
equivalent.
2028: gross emissions: Scope 1 —
109.1 kg/t of СО2
Status in 2021
equivalent
Gross emissions: Scope 1 —
4,675.8 kt of СО2
equivalent;
Scope 2 — 893.3 kt of СО2
equivalent.
Scope 1 emissions —
132.7 kg/t of СО2
equivalent1
Key projects in 2021
> The Climate Agenda project was
initiated to streamline the climate
action management system and push
forward the low-carbon transition
plan.
> In 2021, we started developing and
prioritising technical and technological
initiatives to reduce direct GHG
emissions with due regard to their
economics with the support of a
leading global consultancy.
> Output of urea with urease inhibitor
(a new modern low-carbon fertilizer
that helps to retain nitrogen in the soil)
expanded.
> TGC-1 contracted as a supplier
of green energy generated by HPPs.
> The actual impact of the carbon
border adjustment mechanism
on the Company’s operating expenses
measured.
Energy efficiency
Reduction of Scope 2 GHG emissions to
794.7 kt of СО2 equivalent till 2028 due
to the enhanced eco- and energy efficiency of the main
technological processes.
Scope 2 — 893.3 kt of СО2
equivalent.
Self-sufficiency in electricity
supplies:
40.3%
> Launch of the first of two solar power
stations with a capacity of 40 kW
(Balakovo).
> Upgrade of the ceiling lighting system,
with LED lights installed (Balakovo).
> Upgrade of the lighting system
at the granulated sulphur warehouse,
LED lamps installed (Volkhov).
> Upgrade of the steam pipeline, with
thermal insulation system replaced
(Volkhov).
> Laying a pipeline between с. 911 and 901
to save drinking water (Cherepovets).
Waste reduction
2025: 40% of hazard class 1–4 waste
recycled and decontaminated.
39.1% of hazard
class 1–4 waste recycled and
decontaminated2
> Upgrade of production facilities for
aluminium fluoride (Cherepovets).
> Enhanced ore processing mechanisms
(Kirovsk).
> Promotion of phosphogypsum as a
commercial product for various uses.
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Reduction of air emissions
2025: pollutant emissions — 0.80 kg/t
0.801 kg/t3
> Implementation of a Clean Air
> Upgrade of gas recovery equipment
nationwide initiative (Cherepovets).
> Installation and upgrade of gas recovery
(Balakovo).
> Dust suppression of dusty surfaces
equipment (Volkhov).
(Kirovsk).
Responsible water use
2025: waste water discharge — 4.16 m3/t.
Water withdrawal — 5.16 m3/t.
Biodiversity
Preservation of biodiversity in regions of PhosAgro
Group’s operation at a level securing sustainability.
1 The indicator was calculated as the ratio of the gross emissions under
GRI 305-1 to the total output of finished and semi-finished products
2 The Group specific disclosure was calculated as ratio of class 1–4 waste
recycled and decontaminated to the total volume of class 1–4 waste
waste water discharge —
5.42 m3/t4
Water withdrawal —
6.48 m3/t5
> First stage of water use optimisation
programme (Cherepovets).
> Electricity generation based on the
system of chemical water treatment
and waste water reuse (Volkhov).
> Assessment of risks and opportunities
related to water use, setting goals for
water withdrawal and waste water
discharge, development of a detailed
action plan for each facility.
> The first reports submitted under the
CDP water programme with the C rating
obtained.
A set of initiatives carried
out: a project to support
the biodiversity preservation
programme in association
with an R&D organisation
(Cherepovets) and another one
dedicated to the programme for
environmental monitoring
of flora/fauna and soils (Volkhov)
> Development of comprehensive
programmes to protect biodiversity
(Cherepovets and Volkhov).
> Release of young fish into water
bodies across the Company’s regions
of operation.
3 The Group specific disclosure was calculated as ratio of total significant air emissions to the output
of products and semi-finished products
4 The Group specific disclosure was calculated as the ratio of the total volume of waste water discharged
into surface waters to the total output of finished and semi-finished products
5 The Group specific disclosure was calculated as a ratio of total water withdrawal, including mining
and drainage waters to the total output of products and semi-finished products
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Performance Review
Strategy
At PhosAgro Group, we attach much
importance to environmental protection and
safety, as well as climate risk management,
putting every effort into all of these areas
to secure the Company’s sustainable
development and well-being of the regions
across its geography.
Our Strategy to 2025 is designed to observe
strict compliance with environmental
responsibility standards and practices aimed
at minimising the impact of the Company’s
operations throughout the whole life cycle
of a product, from mine to food.
We strive to produce fertilizers in a safe and
eco-friendly manner, thus contributing to
the sustainable agricultural development
worldwide. Committed to continuous
improvement, the Company keeps working
to lessen the environmental impact of its
production operations and across the value
chain.
The key priorities set out in PhosAgro’s
Environmental Policy are careful use of
natural resources and reduction of the
environmental impact.
We had a comprehensive assessment of our
operations, determining key focus areas
of such impact, both direct and indirect,
and weighed it against the UN Sustainable
Development Goals (UN SDGs).
Based on the assessment results, we mapped
out six strategic focus areas of environment
protection, including:
implementing a range of projects aimed at
minimising waste generation and increasing
the share of recycled waste.
climate;
energy efficiency;
waste;
air;
water;
biodiversity.
In 2020, we worked out the Climate Strategy
based on PhosAgro Group’s vision and
expertise in GHG emissions management.
The document reviews climate risks and
opportunities extensively, setting targets for
GHG emissions and presenting the low-carbon
transition plan.
PhosAgro Group acts on the Energy
Efficiency Programme designed to ensure
compliance with the Climate Strategy and the
Energy Efficiency and Energy Saving Policy
tightly integrated into the Company’s Strategy
to 2025.
Strategy to 2025 also seeks to reduce waste
generation substantially. Having developed
a system for accumulating and analysing
data on production and consumption
waste from our operations, we are now
Implemetation of projects
at the Cherepovets site as part of the Clean
Air nationwide initiative
In the scope of the strategic objectives
to reduce air emissions, PhosAgro Group
is running a programme to re-equip
production facilities and minimise pollutant
emissions.
In addition, we developed the Water
Strategy to minimise our impact on water
bodies by means of lean treatment of
resources: less water withdrawal and waste
water discharge. As part of the Strategy, we
assessed water use risks and opportunities, set
targets for water withdrawal and waste water
discharge and designed a detailed action plan
for each facility to achieve the targets.
PhosAgro Group sticks to its biodiversity
management system comprising the
assessment of potential impact, interaction
with a wide range of stakeholders, as well as
monitoring practices.
We believe that our requirements should
be uniform both for us and our partners
engaged in PhosAgro’s projects. Everything
we require of ourselves equally applies to our
counterparties and is enshrined in the Code
of Conduct for Counterparties.
We adopted a unified approach
to environmental management that
relies on:
Company-wide control.
Putting Strategy to 2025 into action and
compliance with the Group’s Environment
Policy are overseen by two committees
of the Board of Directors (Environmental,
Health and Safety Committee and
Sustainable Development Committee)
that regularly report on the Company’s
progress to the Board of Directors. The
Environmental Protection Department
exercises executive control over the
Group’s environmental activities.
A unified management system.
Environmental compliance.
Our environmental management
system relies on strict compliance with
applicable laws and regulations.
The consistency of PhosAgro Group’s
activities aimed at environmental
protection and strengthening of
the Company’s environmental
performance results from continuous
development of the environmental
management system that was certified
according to the ISO 14001 standards
in 2021.
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Approach to environmental management
GRI 3-3
Effective environmental management is key
to PhosAgro Group’s long-term sustainability
and indicative of the Company’s commitment
to run a socially responsible business,
balancing its obligations to a wide range
of stakeholders.
Traditionally, we put a special focus
on environmental matters and stand
in unconditional support of the vulnerable
and rare habitats across our geography,
leaving them intact and carefully treating
natural systems and resources. Our
operations undergo a stringent assessment
for compliance with the Environmental Policy
(and the Group’s other internal requirements.
For PhosAgro’s
Environmental Policy, see
the Company's website
Environmental management
Our environmental management system
is integrated in PhosAgro Group’s overall
management framework and is a key
element in our approach to managing
environmental responsibility.
In 2021, the environmental
management system was certified
across the Group’s production facilities
and was found to be in full compliance
with
ISO 14001.
PhosAgro’s environmental
management system embraces all
management levels and all stages
of the product’s life-cycle, from
R&D to manufacturing and finished
product application by customers.
This approach ensures uniform
management requirements across all
aspects of the Group’s operations.
Apatit's Balakovo branch and
Cherepovets site PhosAgro Group
successfully passed a certification
audit for compliance with the IFA
(International Fertilizer Association)
Protect and Sustain standard.
SGS, the world’s leading inspection,
verification, testing and certification
company, acted as the auditor.
Our facilities have also put in place
a procedure to manage internal
environmental audits. Every
year, they develop internal audit
programmes taking into account the
environmental significance of the
reviewed processes, changes affecting
the facility and previous audit
outcomes. The audits provide input
data for the management to analyse
environmental management
efficiency.
82
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Performance Review
Environmental management framework
Management approach
Board of Directors
Defines the Company’s environmental policy and sets strategic goals
to ensure environmental protection and reduce the negative
impact of its operations
Sustainable Development
Committee of Board
of Directors
> maintains and regularly assesses PhosAgro’s
> engages with key stakeholders and fosters
internal sustainability regulations and monitors
their development, relevance, quality and
efficiency, as well as compliance with applicable
laws and internal sustainability objectives;
healthy and sustainable communities across
all regions of operation;
> prepares recommendations to the Board of
Directors on determining the Company’s
strategic sustainability objectives.
Environmental, Health
and Safety Committee
Is responsible for planning, identifying key focus areas for environmental
management, tracking progress, and assessing results
Apatit’s Department of Ecology
and Environmental Management
Is responsible for general management, organisation and coordination
of efforts to continuously enhance environmental management
Environmental Control
and Management Servic
Fulfils commitments to the ongoing environmental improvement
and reduction of the environmental footprint
Officers in charge
of environmental
protection
> Production units, which have the greatest
environmental impact, have introduced a
procedure for identifying and assessing risks and
opportunities. Based on the results, we develop
measures to bring risks pertaining to significant
environmental aspects to an acceptable level
> Managers and experts responsible for making
operational and other decisions that may
adversely affect the environment take
a specially designed training course
in environmental safety.
Our strategic environmental protection goals are set out in the Company’s Strategy to 2025, and their
achievement is included in the KPIs of managers and senior executives.
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Compliance
Environmental compliance is key
to running a responsible business.
PhosAgro Group’s environmental
management practices ensure our
compliance with the applicable
environmental and nature conservation
regulations. To that end, the Group
has developed an internal and
external control framework, which
includes internal audit and external
compliance reviews, a reporting system
designed in accordance with legislative
requirements, and a staff training
system.
All our facilities that have a negative
environmental impact impact are
included in dedicated state registers,
with relevant categories assigned
to them. PhosAgro has all necessary
permits in place for each of them.
None of PhosAgro’s enterprises uses
ozone-depleting substances in the
production process. A small amount
(not more than 250 kg/year) of carbon
tetrachloride (CCl4) is used in laboratory
testing.
We do not undertake cross-border
hazardous waste transportation and
our production sites are not situated
in protected areas. Hence, there are no
significant restrictions on our operations.
Spending on environmental protection, RUB mln
Item
Operating costs of environmental protection (form 4-OS)
Investments in fixed assets aimed at environmental protection (form 18-KS)
Environmental impact payments
Environmental fines and damages
Investments in fixed assets aimed at environmental protection
(not included in form 18-KS)
Total
2019
2020
2021
4,351.9
4,825.3
5,510.3
4,221.9
3,120.4
4,168.8
165.3
174.6
178.4
0.79/2.12
0.02
4,258
317.5
–
–
9,059.5
8,120.3
9,860.7
Spending on environmental protection
in 2021 increased due to the completion
of large-scale environmental projects
for which capital expenditures were
included in investments in fixed assets.
In 2021, PhosAgro paid RUB 7.914 mln
under a claim filed by the Baltic-Arctic
Interregional Department of the Federal
Service for Supervision of Natural
Resources to recover outstanding
payments for a negative environmental
impact for 2017.
RUB 9.9 bln
Spending on environmental
protection
Environmental impact payments, RUB mln
Atmosphere
Aquatic environment
Waste
Year
MPE
TPE
O-limit
SPD
TPD
O-limit
Limit
O-limit
Total
Over-
limit
Share of
overlimit in
total payments
2019
2.467
2020
2.901
2021 2.440
0
0
0
0
0
0.018
1.644
3.286
2.165
3.886
0 157.880
0 169.487
0
172.091
0
0
0
165.277
174.553
0
0
0
0
178.416
0.018
0.01
In 2021, over-limit payments
accounted for 0.01% of total
environmental impact payments.
Atmosphere impact over-limit
payments are attributable to an
external voltage dip at PhosAgro’s
nitrogen facility and an emergency
at PhosAgro’s phosphate facility
in Cherepovets resulting in small
ammonia emissions.
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Performance Review
Assessment, analysis, and monitoring
Continuous improvement is inherent in our
environmental management. PhosAgro
Group identifies areas for improvement
by reviewing its management system
using an effective mechanism, which
includes external and internal audits of
the environmental management system
(EMS), activities to monitor and assess the
Group's performance, including by a wide
range of stakeholders, and the analysis and
assessment of the Group’s performance by
the Group’s management. These efforts
enable the Company to work out preventive
and corrective action plans and proposals on
how to develop and improve the EMS.
Stakeholder engagement is essential for
PhosAgro Group’s planning. Public hearings
PhosAgro Group public hearings coverage
are a legitimate and effective mechanism
for establishing dialogue with stakeholders
using a discussion platform to express
their opinions and make suggestions on
the initiatives under consideration. This
mechanism has a positive impact on the
decision-making process and improves its
efficiency. Engaging the general public and a
wide array of stakeholders in discussion plays
an important role and helps ensure that all
points of view are considered.
List of public hearings
Indicator
Number of public hearings
2019
2020
2021
13
13
15
Average number of participants per hearing
102.7
42.9
27.2
When assessing the Company’s performance, much attention is paid
to the analysis of international ESG ratings and investor feedback.
Risks and
opportunities
GRI 201-2
Environmental risk management is an integral
part of the Company's risk governance
framework.
The following strategic risks affect our
environmental protection objectives
(
section on page 68):
for more information, see the Strategic Risks
The environmental protection risks include
non-compliance with the existing regulations
on environmental impact and energy
efficiency issues.
The Company develops corrective measures
as necessary and unlocks opportunities to
mitigate those risks. Below you can find more
information about what we do on this front.
5 production;
7 environmental;
13 regulatory.
Climate
Our goals:
reduce total GHG emissions (Scope 1, 2, 3)
by 14% by 2028 vs 2018;
reduce GHG emissions (Scope 1) per tonnes
of finished and semi-finished products by
31% by 2028 vs 2018.
Gross and specific GHG emissions (Scope 1 and 2) across the Group
Indicator
2018
2019
2020
2021
2028
Gross GHG emissions (Scope 1), kt
Gross GHG emissions (Scope 2), kt
GHG emissions (Scope 1), kt
4855.3
924.1
158.0
4656.3
967.0
143.3
4739.4
978.3
140.1
4675.8
893.3
132.7
4,175.5
794.7
109.1
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risks, opportunities, governance,
performance, and metrics in 2020
(for more information, visit the
Company’s website). In June 2021,
PhosAgro publicly declared support for
the TCFD and its recommendations.
The Company’s representatives are
members of climate change and
sustainable development task and
expert groups instituted by government
authorities and non-governmental
organisations, and are actively engaged
in discussions on current global
challenges.
2020 TCFD report
2021 highlights
Total Scope 1 and
2 emissions —
5,569.1 kt
of CO2 eq
Scope 1 emissions of СО2
equivalent —
132.7 kg/t1
> The Company increased the output
of urea with urease inhibitors, a
modern low-carbon fertilizer that
helps deliver a material positive
environmental effect by reducing
emissions of nitrous oxide (N2O),
which is a greenhouse gas (in
2021, emissions were reduced by
16.9 kt of CO2 eq.).
> In 2021, we used green energy
(hydroelectric power produced by
small hydroelectric power plants
and purchased from TGC-1 as part
of our pilot project) to produce
some 18% of phosphate rock and
nepheline concentrate.
> PhosAgro signed a cooperation
agreement with the Russian
Academy of Sciences and the
Vologda region to monitor
climate change and minimise the
environmental impact.
PhosAgro has LEAD status under the
UN Global Compact and is a participant
in the Climate Ambition initiative.
In 2021, the Company partnered
with CGI Russia (Climate Governance
Initiative), an organisation established
by the World Economic Forum to
raise awareness and boost efficiency
of boards of directors with respect
to climate change. The organisation
assists in developing climate strategies
and implementing them, as well
as integrating the climate change
agenda into day-to-day and long-
term business decisions. In April 2021,
PhosAgro published its first TCFD
report fully addressing the climate
aspects of its operations, strategy,
1 The indicator was calculated as the ratio of the gross emissions under GRI 305-1 to the total output of finished and semi-finished products.
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Performance Review
Strategy
Climate matters feature prominently in
PhosAgro Group’s strategic and investment
decisions, as well as in its day-to-day
business management. The Company
has identified, assessed, and prioritised
climate risks, establishing their short,
medium and long-term consequences for
its production and business processes. We
make our strategic plans and day-to-day
management decisions with full awareness
of the nature and extent of climate impact
(both environmental and political) on
PhosAgro Group’s business, strategy, and
financial planning. The Group develops
and takes systemic measures to reduce its
carbon footprint and closely interacts with
partners across its value chain (suppliers and
consumers) and other stakeholders in Russia
and worldwide.
PhosAgro's Climate Strategy was developed
in 2020. It is a comprehensive document
setting out the Company's climate policy
in the face of growing climate change and
uncertainty. In December 2020, the Board
of Directors approved the Climate Strategy
and endorsed a low-carbon transition plan.
PhosAgro's Climate Strategy is based on five
main principles.
Main principles of the
Climate Strategy
The Strategy has set the
following goals:
Risks and
opportunities
Risks
Opportunities
R1 — disruptions in production processes
and logistics operations due to increasing
acute climatic effects and other climate-
related factors;
R3 — PhosAgro Group’s failure to comply
with regulations reducing its negative
environmental footprint (following
the adoption of the carbon border
adjustment mechanism);
R2 — flaws in supply chains,
construction design, health and safety;
negative environmental footprint and
reduced flows of ecosystem services;
lower resilience of infrastructure and
communications due to increasing
climatic effects;
R4 — deterioration of the Company’s
sustainability reputation;
R5 — increased costs and losses
(as a result of customers’ failure to
meet their obligations, rising prices
for feedstock, materials and services,
higher borrowing rates) and shrinking
revenues (as a result of a decline
in sales, customers, countries and
regions of operation).
O1 — boosting PhosAgro Group’s
appeal as an environmentally and
climatically responsible supplier of
products with a positive climate profile;
O2 — improved logistics driven by the
new export opportunities amid shortened
seasonal freeze-up of rivers and lakes due
to climate change;
O3 — new financial products that open
up new sources of cheaper funding (such
as green bonds) for companies that
embraced environmental and climate
sustainability.
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PhosAgro identifies its climate risks and
opportunities taking account of climate
change. The process is influenced by physical
(changes in natural processes or phenomena)
and transitional (changes in the policy and
regulation with a view to fulfilling low-carbon
transition) factors of various nature.
The following strategic risks affect our climate
objectives (
Strategic Risks section, page 68).
for more information, see the
1 strategic planning risk;
13 regulatory risk;
19 climate risk.
A detailed description of climate risks and
opportunities, as well as corrective measures
taken in 2021 remained unchanged and
is presented in the
TCFD report on the
Company’s website.
1 Setting up targets to reduce GHG
emissions in line with the Science Based
Targets initiative; using climate scenario
analysis.
2 Integrating climate risks into
the comprehensive risk management
framework for investment and day-to-day
business activities.
3 Prioritising proper organisation and
management on par with technology-
related measures with a view to reducing
GHG emissions.
4 Identifying not only risks, but also
climate-related opportunities and
making long-term plans for them.
5 Promoting awareness of the
Company's climate initiatives and plans,
as well as cooperation in specific areas.
> to reduce GHG emissions while increasing
output;
> to improve energy efficiency and
environmental performance of the key
production processes;
> to reduce energy and carbon intensity per
unit of output;
> to enter into new emerging markets for
green products;
> to retain and expand the existing market
niches by ensuring PhosAgro Group’s
competitive edge in terms of energy and
carbon intensity.
PhosAgro Group is currently focused on
creating particular metrics reflecting the
impact of climate action in production
and management processes on financial
indicators. In 2021, we reassessed the
impact of the carbon border adjustment
mechanism (CBAM) on PhosAgro’s operating
expenses. The mechanism covers Russian
industrial products, including, most likely,
mineral fertilizers. Given the uncertainties
as to the emission scopes the CBAM will
apply to, the ability to account for PhosAgro
Group's individual emission levels, and the
changing carbon dioxide prices, we have
determined the estimated ceiling and floor
of the mechanism’s impact on the Group's
financial performance in 2023–2030.
Climate scenario analysis
The Company views climate scenario
analysis as a tool to make its climate
strategy resilient to uncertainties and
risks related to climate change. In line
with that, we adopted climate scenarios
and determined respective scenario
parameters that are most probable and
significant for PhosAgro Group in the
short, medium and long term.
PhosAgro Group assessed the impact of
climate-related risks and opportunities
on its operations under two climate
change scenarios: global warming of
2°С and 4°С. The key features of the
scenarios are:
> 2°С scenario is expected to result in
stringent climate policy measures
that will increase market volatility
(goods, services, finances, etc.).
This is projected to bring about
low-carbon transition, putting in
place mechanisms of a low-carbon
economy that will slow down physical
climate-related impacts going
forward;
> 4°С scenario is expected to result in
less stringent climate policy measures
as compared to the 2°С scenario,
triggering faster physical climate-
related changes;
> it was the 2°С scenario that we
prioritised under the climate strategy;
> in accordance with criteria of the
global Science Based Targets initiative
(SBTi) and the pattern of global
anthropogenic emissions according to
RCP 2.6.
PhosAgro identified projected changes
in climate risks and opportunities
under the adopted climate scenarios
based on risks, opportunities, scenario
parameters, and time frames.
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Performance Review
Highlights and performance related
to climate change
Processes to identify and assess climate
change risks are being integrated
throughout the value chain – from design,
procurement and apatite-nepheline ore
mining to finished product delivery.
Climate risk priority map
Climate risk management process is baked
in the company-wide risk management
processes.
The assessment is carried out on a quarterly
basis and covers short, medium, and long-
term horizons.
The Group’s climate risk management forms
an integral part of its comprehensive risk
management system (RMS), and meets
the applicable Russian and international
standards.
Low-carbon transition plan
The low-carbon transition plan is based on the specialised research data and aims to support economic development
of PhosAgro Group that builds on the priority of keeping GHG emissions to a minimum. It is implemented to ensure that
the GHG emission reduction targets are delivered across all scopes.
2021 initiatives
Focus areas
Introduce HR actions to support the
implementation of PhosAgro’s Climate
Strategy, including additional training to
improve staff competence and raise staff
awareness in climate change
Climate-related risk
and opportunities
R1, R2, O1
Description and results
Our employees took part in webinars
dedicated to sustainable development and
corporate climate responsibility.
Р2
Р3
Р4
Р1
Р5
Integrate climate change factors
(depending on the risks and opportunities
they present) into the existing regulations
and provisions
R1, R2, O1
In 2021, taking into account climate
factors, we updated the Company’s
Environmental Policy and regulations on
the Committees of the Board of Directors.
Emerging
Manageable
Relevant
Immaterial
Manageable
Manageable
y
t
i
l
a
i
r
e
t
a
M
Immaterial
Probability
Actions to deliver on the Climate Strategy
In 2021, the Climate Agenda project
was initiated to create the climate action
management system and push forward
the low-carbon transition plan. The project
addresses the following objectives:
Immaterial
Amenable
> establish a process to reduce carbon
intensity per unit of output through
technical and technological measures
aimed at reducing direct GHG emissions;
> identify a mechanism for shifting to low-
carbon energy sources, purchasing green
energy, and supporting projects that focus
on GHG capture and carbon offset;
> introduce a procedure for cooperation
across the value chain involving suppliers,
customers, and other stakeholders;
> determine the most efficient technologies
and methods available to capture GHG.
Establish a task group on reduction of GHG
emissions and negative effect of climate
change on the efficiency of management
and production processes
R1, R2, R3, O1
Approve a comprehensive plan of
interaction with value chain participants
R1, R2, R3, R4, R5, O1,
O2, O3
By initiating the Climate Agenda project
we took forward thoroughly researched
and technically feasible proposals
to reduce the Company's climate
footprint, minimise risks and maximise
opportunities related to growing climate
change impacts (technology, equipment,
energy generation, operations, etc.).
A plan of interaction with value chain
participants was developed and adopted
for implementation (supplier-customer
interactions).
Harmonise strategic documents (the
Company's Development Strategy to 2025),
financial planning and other policies and
procedures with the low-carbon transition
strategy and plan
R1, R2, R3, R4, R5, O1,
O2, O3
Climate risks and opportunities were
assessed and integrated into the
Company’s risk management framework, as
well as internal regulations.
Arrange for identification, assessment,
management and monitoring of climate-
related risks
R1, R2, R3, R4, R5, O1,
O2, O3
Climate change risks were integrated into
PhosAgro’s risk management framework.
Factor in climate change impacts in
industrial engineering projects to build
new facilities and upgrade transport
infrastructure
R1, R2
At present, there is no need to proceed with
this initiative. Reference documents used in
engineering provide a sufficient margin of
safety, with no factors driving accelerated
climate changes observed.
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Performance Review Focus areas
Support R&D developments related to the use of
low-carbon energy and low-carbon production
Explore options for GHG capture and select
the most efficient ones to be employed by the
Company
Climate-related risk
and opportunities
R3, R4, R5, O1
Description and results
Plans for 2022
Focus areas
Climate-related risk
and opportunities
Description, current status, and expected outcomes
The Company increased the output of urea with
urease inhibitors, a modern low-carbon fertilizer.
Include climate metrics in incentive
schemes of employees
R2, O1
Raising the motivation of employees and improving
their climate-related performance. High-level approach
to designing climate-related KPIs was defined.
In 2021, the mining and processing plant of Apatit (its
Kirovsk branch) purchased 299 mln kWh under the
agreement with TGC-1, with the energy generated
by hydroelectric power plants. Therefore, the facility
used green energy for 18% of its output.
In 2021, the Russian Academy of Sciences, PhosAgro,
and the Vologda region signed a cooperation
agreement to monitor climate change and minimise
the environmental impact. The project envisages
efforts in low-carbon transition, including regional
monitoring of GHG emissions. Promising methods
of farming focused on emissions prevention and
carbon sequestration by soils will be developed and
implemented in Russia. New forests and fields will be
planted and created in the Vologda region to capture
and store carbon. Their capacity is estimated at
0.7 mt of CO2 per year.
Introduce regular climate-related reporting
in accordance with Russian and international
standards
R3, R4, O1
Since 2020, the Company has been preparing
climate reports in line with the TCFD standards and
is considering options to have the reports assured
starting from 2022.
Collaborate with international organisations and
join climate initiatives
R4, O1
The Company participates in Climate Ambition, an
initiative launched under the UN Global Compact;
teams up with Climate Governance Initiative Russia;
supports the TCFD; and takes part in task and
expert groups of government authorities and non-
governmental organisations.
Report submitted to CDP with the Company's rating
upgraded to B.
Develop a set of technological
measures to mitigate the negative
impact of climate change on
production processes
Develop a set of technological
measures to mitigate the negative
impact of production processes
on climate
R1, R2
R1, R2
Developing measures to mitigate climate change risks
to the Group's production processes.
Developing and prioritising technical and
technological initiatives to reduce direct GHG
emissions with due regard to their economics. The
Company began the work in 2021 as part of the
Climate Agenda project with the support of a leading
global consultancy.
Prepare feasibility studies (business
projects) for innovative climate-
resilient products based on carbon
dioxide utilisation
R3, R4, R5, O1
Diversifying production to facilitate expansion into new
markets and improve the climate-related performance
on the back of new products better meeting consumer
needs and having a positive climate profile.
Develop production in high-potential
areas
Reduce the negative impacts of climate
change on operational processes such
as disruptions in transportation of
products and raw materials, increased
consumption of production water and
waste water, product dusting, failures
to use equipment in accordance with
operating instructions and failures to
create proper workplace conditions.
R1, R2, O2
Mitigating climate change risks to the Group's
operating processes. Work is in progress to assess the
risks and identify actions needed to manage them.
Introduce an automated system to
collect and process primary climate
data
R3, R4, O1
Introducing a software solution for automated
collection of input data and calculation of GHG
emissions (total volumes by site and product). Draft
guidelines for assessing products’ carbon footprint
were developed and tested using PhosAgro Group’s
existing software. In 2022, the Company will refine the
guidelines with the support of expert organisations,
taking account of current and expected requirements
for climate disclosure applicable in Russia and globally,
and will look into implementation options.
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Performance Review
2021 metrics and highlights
PhosAgro Group’s climate metrics are
aligned with the goals of the Climate
Strategy approved by its Board of Directors.
PhosAgro Group is working to expand and
enhance the quality of climate-related
measurements, including both existing
and prospective metrics. Most metrics are
locked on targets which are aligned with
the goals of the Climate Strategy and other
commitments of the Company.
The metrics are monitored and reported
annually to stakeholders.
The Company’s primary focus is on GHG
emissions in all three Scopes (1 and 2).
The Group calculates greenhouse gas emissions
in accordance with the international guidelines:
This includes end-to-end monitoring of raw
data and analysis of supply chain participants’
data (Scopes 2 and 3).
> 2006 IPCC Guidelines for National
Greenhouse Gas Inventories;
> The Greenhouse Gas Protocol: Scope 2
Guidance;
> the Greenhouse Gas Protocol: A Corporate
Accounting and Reporting Standard
(Revised Edition);
> ISO 14064-1 – Specification with Guidance
at the Organisation Level for Quantification
and Reporting of Greenhouse Gas
Emissions and Removals.
The targets of 14% reduction in emissions
by 2028 compared to the 2018 baseline
across all scopes are set in line with
minimum qualitative and quantitative
criteria based on RCP 2.6, a representative
concentration pathway for reduction
of global anthropogenic emissions, in order
to keep global temperature rise below 2°C
by 2100.
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List and description of existing metrics introduced in 2021 for the monitoring
of performance under the climate strategy
Indirect (Scope 2) GHG emissions, kt of СО2 eq.2,
GRI 305-2
Metric
Unit
2018
2019
2020
2021
Assets
Gross global emissions (Scopes 1 and 2) per currency unit of total
revenue (GRI 305-4)
Gross global emissions (Scopes 1 and 2) per FTE (GRI 305-4)
t of CO2 eq. / USD mln1
1,552.3
1,467.1
1,621.6
975.5
t of CO2 eq. / FTE2
331.0
321.6
319.6
304.0
Electricity purchased per unit of finished and semi-finished products
ths kWh/t
0.071
0.069
0.068
0.066
Energy efficiency improvement costs
Share of feedstock suppliers providing necessary input data on GHG
emissions (Scope 3)
RUB mln
%
n/a
n/a
82.0
10,500.0
17.4
n/a
4.0
2.7
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
2018
2019
2020
2021
713.0
730.9
723.9
622.53
52.2
65.2
93.7
55.4
62.8
51.1
66.0
45.3
80.1
117.9
137.3
145.4
924.1
967.0
978.3
893.3
Direct (Scope 1) GHG emissions, kt of СО2 eq.2
GRI 305-1, 305-4
Assets
Gross emissions of the Kirovsk branch, kt
GHG emissions of the Kirovsk branch, kg per tonne of finished and semi-finished products
Gross emissions of the Balakovo branch, kt
GHG emissions of the Balakovo branch, kg per tonne of finished and semi-finished products
Gross emissions of the Volkhov branch, kt
GHG emissions of the Volkhov branch, kg per tonne of finished and semi-finished products
Apatit (Vologda region), gross emissions, kt
2018
2019
2020
2021
583.1
636.3
646.4
665.3
53
54.7
55.5
56.7
157.9
152.6
170.0
178.6
28.4
118.4
181.5
25.7
27.9
29.6
121.3
111.4
125.5
197.4
179.5
109.2
3995.8
3,746.1
3,811.5
3,706.4
GHG emissions of Apatit (Vologda region), kg per tonne of finished and semi-finished products
295.2
261.9
246.4
227.1
Total gross emissions, kt
Total GHG emissions, kg per tonne of finished and semi-finished products
4,855.3
4,656.3
4,739.4 4,675.8
158.0
143.3
140.1
132.7
In 2021, we changed our approach
to calculating Scope 2 GHG emissions.
Previously, we relied on emission factors
from a study by the European Bank
for Reconstruction and Development.
In 2021, however, we started using
factors defined by the International
Energy Agency4, which enabled more
accurate calculation of Scope 2 GHG
emissions.
We have chosen 2018 as the base
year for calculations because it
was the Company’s first reporting
year and given the need to set GHG
reduction targets for all three scopes
based on the available emission data.
In 2021, Scope 1 GHG emissions
declined by 179.5 kt, or 3.7%.
GRI 305-5
Energy indirect (Scope 2) emissions
also dropped by 30.8 kt, or 3.3%, vs
2018 thanks to the green electricity
procured by the Kirovsk branch of
Apatit, as well as energy efficiency
initiatives.
1 The indicator was calculated as the ratio of the sum of Scope 1 and 2 gross emissions under GRI 305-1 and GRI 305-2 respectively to PhosAgro Group revenue
according to consolidated financial statements converted into USD mln at quarterly average (2018 and 2019) and monthly average (2020 and 2021) USD/RUB
exchange rates
2 The indicator was calculated as the ratio of the sum of Scope 1 and 2 gross emissions under GRI 305-1 and GRI 305-2 respectively to the total number
of full-time employees under GRI 2-7
3 Including electricity from renewable energy sources
4 Following the comparability principle, figures for 2018-2020 in the above table Indirect (Scope 2) GHG emissions, kt of СО2 eq.2 have been recalculated using
the factors defined by the International Energy Agency
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Performance Review
2021 saw PhosAgro’s self-sufficiency in electricity increase by
0.5%, to 40.3%
Energy efficiency
2021 highlights
GRI 302-4
In 2021, the consumption of all types
of energy resources per tonne of
finished and semi-finished products
decreased by 3.43%,
to 5.06 GJ
This significant reduction was underpinned
by the implementation of PhosAgro Group’s
Strategy to 2025 and its Energy Efficiency
Programme.
In 2022, the share of in-house electricity
generation is expected to grow further due
to the planned launch of a 34 MW heat and
power plant at the Volkhov branch.
The first complex comprising two 40 kW solar
power stations has been commissioned in
Balakovo. In 2022, we plan to test solar power
generation at Apatit’s chemical facility in
Balakovo to assess the viability of a further
scale-up.
Energy Efficiency
Programme
PhosAgro’s energy efficiency
strategy
In 2021, PhosAgro continued to follow
the Climate Strategy approved by the Board
of Directors, the Energy Efficiency and Energy
Saving Policy, and the Energy Efficiency
Programme, which are tightly integrated into
the Company’s Strategy to 2025 adopted
in 2020.
The Energy Efficiency and Energy Saving Policy
sets out the following key goals:
> continuously improving energy efficiency;
> using energy resources in a sustainable and
efficient manner;
> streamlining the energy management
process for all types of operating activities.
The Company pays particular attention
to energy efficiency risks:
1 Having a sufficient and reliable energy
supply is a material aspect and major concern
for us. We thoroughly explore all opportunities
to transition to renewable energy. In 2021,
we purchased electricity generated by
hydroelectric power plants that had no
large reservoirs and therefore no methane
emissions, and implemented a solar power
plant project in Balakovo.
2 Risk of Scope 2 GHG emissions
being included in the carbon border
adjustment mechanism in 2023–2026.
PhosAgro Group’s energy efficiency directly
affects Scope 2 GHG emissions, which poses
a potential risk under the European
Green Deal.
3 Market availability of electricity
from renewable energy sources.
PhosAgro Group continuously monitors
the market to ensure a sufficient supply
of electricity from renewable energy
sources.
The initiatives set out in the Energy
Efficiency Programme are aimed to
improve the energy efficiency of each
production site and achieve strategic
objectives in the following focus areas:
> in-house power generation
through utilisation of sulphuric acid
production steam;
> increase of the share of renewable
energy sources;
> introduction of technologies
aimed at loss reduction and energy
savings (e.g. LED lighting, frequency
converters, less heat energy losses).
In 2021, we implemented
comprehensive energy efficiency
projects at all of our facilities.
2021 initiatives
Project
Description and results
Balakovo: installation of a solar power
plant at Apatit’s Balakovo branch with a
total capacity of 40 kW (Phase 2)
Phase 2 of the project to replace third-party
electricity supply with an alternative energy
source (solar power plant)
Balakovo: upgrade of the ceiling lighting
system at the wet-process phosphoric
acid production unit, with LED lights
installed
Volkhov: upgrade of the lighting system
at the granulated sulphur warehouse,
LED lights installation
Volkhov: upgrade of the 4.0 MPa steam
pipeline, with thermal insulation system
replaced
Cherepovets: installation of a new
pipeline between c. 911 and 901 to save
drinking water
Energy savings due to replacing mercury
lamps with LED ones
Energy savings due to replacing mercury
lamps with LED ones
Heat savings
Reduced water consumption, cost cutting
Plans for 2022
Project
Description and results
Volkhov: Construction of a heat and
power plant with a 34 MW high-
efficiency electric turbine and a water
treatment system at Apatit’s Volkhov
branch
Project seeks to cut electricity costs through
the utilisation of process steam from the
new sulphuric acid plant at the heat and
power plant of Apatit’s Volkhov branch,
with the objective of providing all of the
facility’s consumers with steam. This will also
significantly reduce the need to purchase
electricity from third-party power suppliers
Kirovsk: upgrade of the lighting system
to LED at ANBP-2 of Apatit’s Kirovsk
branch
A 0.5 MW reduction in annual energy
consumption, lower maintenance and repair
costs
Kirovsk: upgrade of drum drier sections,
with thermal insulation replaced
Reduced heat losses and per unit
consumption of fuel oil in concentrate drying
Balakovo: installation of frequency
converters on chemically treated water
pumps
Reduced electricity consumption
Cherepovets: use of circulating water to
cool feed water pumps
Reduced river water consumption with no
discharges into the sewer system
Expenditures,
RUB mln
5.0
(Phases 1 and 2
in total)
2.0
1.5
4.5
0.5
Completion
Q3
Q4
Q2
Q3
Q4
Expenditures, RUB
mln
Completion
2,941.0
Q1
42.0
7.0
2.0
3.5
Q3
Q4
Q3
Q3
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Performance Review 2021 metrics and highlights
1 In 2021, the Company’s production
facilities were 40.3% self-sufficient in
terms of electricity needs, which is 0.5%
more than in 2020. In absolute terms,
the electricity generated by PhosAgro
went up by 50 mln kWh year-on-year,
driven by the commissioning of new
power generating facilities at the Volkhov
branch and optimisation of the heat and
power plant at the Balakovo branch. Total
electricity consumption grew by 79 mln
kWh year-on-year, which is attributable to
the commissioning of new facilities at the
Volkhov branch and Cherepovets site. In
2022, the share of electricity generated in-
house is likely to increase due to the planned
launch of the 34 MW heat and power plant at
the Volkhov branch.
2 In 2021, PhosAgro Group commissioned
a complex comprising two solar power plants
at the Izumrud corporate health resort in
Balakovo. The first 25 kW solar power plant
was installed on the roof of the resort’s
medical treatment building in December
2020, with more solar panels installed on
Izumrud’s hotel building during Phase 2
in summer 2021. Now, the total capacity
is 40 kW. In 2022, we also plan to test the
technology at Apatit’s chemical facility in
Balakovo to assess the viability of a further
scale-up.
The energy efficiency metrics are used to
monitor the Company’s progress towards its
energy efficiency improvement target and
set forth in PhosAgro’s Energy Efficiency
Programme and Action Plan, which helps
keep track of electricity generation and
consumption, energy intensity, etc.
79 mln kWh
Total electricity consumption
growth in 2021
PhosAgro Group’s energy consumption
GRI 302-1, 302-3
Indicator
Electricity
Purchased electricity, including
Purchased from renewable sources
Electricity purchased per unit of finished and semi-finished
products
Unit
mln kWh
mln kWh
ths kWh / t
Total for production facilities
2019
2020
2021
2,234.57
2,300.77
2,326.63
0.00
0.069
0.00
299.00
0.068
0.066
Produced (non-renewables)
mln kWh
1,500.11
1,519.00
1,572.62
Electricity generated (from non-renewables), per unit of finished
and semi-finished products
ths kWh / t
0.046
0.045
0.045
Internal use
mln kWh
3,734.68
3,819.77
3,899.26
Internal use per unit of finished and semi-finished products
ths kWh / t
0.115
0.113
0.111
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Calculation methodologies
The energy efficiency metrics are based on
PhosAgro Group’s raw data and calculated
in accordance with the approved statistical
methodologies. The Group prepares its
energy efficiency reports in accordance with
GRI 3 Material Topics, GRI 302-1 Energy
Consumption within the Organisation, GRI
302-3 Energy Intensity, and GRI 302-4
Reduction of Energy Consumption.
PhosAgro’s energy consumption in 2021, GJ1
GRI 302-1
Indicator
Internal use of electricity
Internal use of heat energy
13,142,052
13,444,848
13,751,172
14,037,317
45,919,608
47,440,086
49,114,094
51,444,258
Internal consumption of natural gas
104,031,330
105,465,360
105,295,320
103,592,667
Internal consumption of LNG
Internal consumption of fuel oil
Internal consumption of heating oil
Internal consumption of diesel fuel
Total internal consumption
Total energy consumption per unit of finished and semi-
finished products, GJ/t
147,130.24
170,533.12
123,672.96
160,565
6,525,771
6,797,256
6,473,253
6,671,968
30,686
30,945
31,922
34,294
1,839,667
1,827,282
2,419,273
2,539,731
171,636,246
175,176,312
177,208,709
178,480,800
5.58
5.39
5.24
5.06
1 To convert energy consumption values into joules, the coefficients on the Berkeley Institute (USA) website were used
Heat energy
Produced by TPPs
Produced by boilers (steam)
Purchased (in hot water)
Supplied (in hot water)
Exhaust steam
Internal consumption
Internal consumption per unit of finished and semi-finished
products
Natural gas
Production purposes
LNG
Consumption
Fuel oil
Consumption
Heating oil
Consumption
Diesel fuel
Consumption
ths Gcal
ths Gcal
ths Gcal
ths Gcal
ths Gcal
ths Gcal
Gcal/t
2,742.82
2,435.44
2,234.32
1,121.49
1,030.34
1,237.13
406.60
155.46
374.54
200.78
438.22
161.23
7,215.41
8,091.16
8,538.81
11,330.87
11,730.70
12,287.25
0.349
0.347
0.348
mln m3
ths m3 / t
2,704.24
2,699.88
2,656.22
0.083
0.079
0.075
t
t
t
t
3,134.80
2,273.40
2,951.57
154,132.80
146,785.80
151,291.8
703.70
725.50
779.40
40,071.98
53,054.25
55,695.87
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175
2018
2019
2020
2021
Consumption per unit of finished and semi-finished products
Performance Review Waste
2021 highlights
Waste management strategy
Share of recycled and decontaminated
hazard class 1–4 waste, %1
GRI 306-2
2021
2020
2019
39.1
37.6
34.5
PhosAgro’s waste management
is monitored on a regular
basis and discussed by the
Sustainable Development
Committee andthe Environmental,
Health and Safety Committee
of the Board of Directors, with
their findings communicated
directly to the Board
Having developed a system for accumulating
and analysing data on production and
consumption waste from our operations, we
are now implementing a range of projects
aimed at minimising waste generation and
increasing the share of recycled waste.
The management system covers:
> an inventory of resources that are used to
manufacture products and become waste
afterwards;
> data on the amount of waste generated
from our own operations, including future
waste in the form of products or their part
provided to customers;
> waste characteristics;
PhosAgro’s Development
Strategy to 2025 stipulates an
increase in the share of recycled
hazard class 1–4 waste
to 40%
> properties that limit or prevent
the recycling (recovery) of the material
or product or limit its useful life;
> continuous monitoring of known and
potential negative characteristics of certain
materials after they become waste; measures
to remove environmental and health hazards;
> identification of activities and processes
that generate significant amounts of waste.
2021 metrics and highlights
Waste generation by hazard class, t
GRI 306–3
Waste hazard class
I
II
III
IV
V
Total
2019
7.64
10.76
1,938.63
196,725.82
2020
6.48
7.61
1,070.64
180,439.54
2021
5.63
3.86
1,698.52
192,698.46
112,458,560.40
132,492,537.10
132,227,604.7
112,657,243.30
132,674,061.36
132,422,011.17
PhosAgro Group’s waste by type and disposal method, t
GRI 306–4, 306-5
Disposal method
2019
2020
2021
Reused PhosAgro Group’s waste
22,868,749.9
21,877,032.2
19,203,406.7
Hazardous waste
Non-hazardous waste
Landfilled
Hazardous waste
Non-hazardous waste
Landfilled at the Company's waste disposal facilities
63,533.6
51,632.9
74,266.9
22,805,216.3
21,825,399.3
19,129,139.8
89,794,090.4
110,771,883.1
112,386,304.7
122,765.0
109,096.9
113,463.9
89,671,325.4
110,662,786.2
112,272,840.8
89,671,202.4
110,662,686.7
112,272,350.3
Third-party recycled
Hazardous waste
Non-hazardous waste
Third-party decontaminated
Hazardous waste
Non-hazardous waste
Third-party processed
Hazardous waste
Non-hazardous waste
Third-party landfilled
Hazardous waste
Non-hazardous waste
37,696.5
5,149.7
32,546.8
289.8
289.8
0
2,906.1
5.9
2,900.1
7,471.8
7,348.8
123.0
52,377.7
16,402.3
35,975.4
262.4
262.4
0
1,590.9
6.4
1,584.5
4,599.9
4,500.2
99.7
72,278
1,432.2
70,845.8
332.5
332.5
0
2,756.7
2.2
2,754.5
6,076.8
5,586.3
490.5
1 The Group specific disclosure was calculated as ratio of class 1–4 waste recycled and decontaminated to the total volume of class 1–4 waste according
Note: hazardous means hazard class 1–4 waste; non-hazardous means hazard class 5 waste
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177
Performance Review
Reused
Landfilled at waste disposal facilities
Disposal of beneficiation waste and overburden at Apatit’s Kirovsk branch, t
Waste
2019
Apatite-nepheline ore processing waste (tailings)
Rocks and overburden mix
2020
Apatite-nepheline ore processing waste (tailings)
Rocks and overburden mix
2021
Apatite-nepheline ore processing waste (tailings)
Rocks and overburden mix
12,500,635.0
7,156,342.0
12,015,508.0
6,625,514.0
12,535,665.7
3,360,586.0
Waste generation, tonne per tonne of finished and semi-finished products
Asset
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
2019
8.7
0.9
0.002
0.4
3.5
Waste generation (hazard class 1–4), kg per tonne of finished and semi-finished products
Asset
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
2019
0.6
19.5
2.2
5.2
6.1
2020
10.4
0.9
0.031
0.4
3.9
2020
0.3
16.7
27.0
3.8
5.4
12,560,903.0
69,073,827.0
12,947,652.0
89,454,699.0
13,483,863.3
90,494,219.0
2021
10.3
0.9
0.003
0.4
3.8
2021
0.5
21.3
0.6
3.6
5.5
Key initiatives in 2021
Upgrade of production facilities for
aluminium fluoride
Promotion of phosphogypsum
The Cherepovets site upgraded
its aluminium fluoride plant, with
its capacity expanded from 57
to 73 ktpa. This helped increase
the use of fluorine extracted as
part of phosphate rock processing,
reduce lime consumption
in treating effluents, and decrease
the generation and disposal
of fluorine-containing waste.
Investments in the project totalled
RUB 3.5 bln.
Enhanced ore processing
mechanisms
PhosAgro and the Kola Science Centre
of the Russian Academy of Sciences
have signed a long-term cooperation
agreement to implement a project
for improving the processing of
hard-to-process apatite-nepheline
ores. The agreement prioritises
joint projects focused on novel
production technologies. As part
of the initiative, KSC RAS researchers
will study key industrial ores, identify
optimal mineral liberation and
selective flotation modes, conduct
technological and mineralogical 3D
mapping of ore reserves, as well as
select and develop efficient and eco-
friendly flotation reagents.
Our project to promote
phosphogypsum as a chemical
ameliorant agent in agriculture first
saw light in February 2021. Its initial
aim was to reduce the accumulation
of phosphogypsum at dump sites by
promoting its use on saline soils as
a conditioner and source of sulphur,
phosphorus and micronutrients.
To this end, we established
a preparation and loading hub for
bulk phosphogypsum and remodelled
a railway to ensure its supply
to farmers in the Moscow, Tambov,
Voronezh, Lipetsk, Penza, Ulyanovsk,
Samara, Saratov, and Volgograd
regions.
In 2019, we sold
a total of
4.1 kt
of phosphogypsum.
In 2020, this number
stood at
before surging to
8.709 kt
42 kt
in 2021 (of which 41 kt
was sold for agricultural
purposes).
In November 2021, we made
a decision to merge all our
phosphogypsum-related operations
into one project.
Project goals by 2026:
> improving sales volumes;
> reducing phosphogypsum
accumulations at dump sites;
> increasing phosphogypsum
recycling rates.
A data analysis and target market
review has identified eight focus areas
for selling phosogypsum. Currently, we
can cover two of them:
> agriculture;
> road construction.
In 2022, PhosAgro Group seeks
to sell around 75–80 kt and 10 kt
of phosphogypsum to customers
in agriculture and road construction
respectively, while also expanding
its customer pool.
This year, we look to achieve progress
in the remaining six areas as well,
with R&D, state environmental expert
evaluation, pilot tests, and the drafting
of a relevant internal standard,
specifications, and regulatory and
technical documents all planned for
2022. We expect that these steps will
enable us to significantly expand our
phosphogypsum market reach.
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179
Performance Review Air
2021 highlights
RUB >1 bn
invested under the Clean Air initiative in 2021
Pollutant emissions, kg per tonne
of finished and semi-finished products
Strategy
23.7% reduction in emission intensity
(to 0.8kg/t of products and semi-finished
products) by 2025 vs 2018.
PhosAgro Group takes part in the
government’s Clean Air initiative, which
aims to drastically reduce air pollution in
major industrial cities across Russia.
In the reporting year, more than RUB 1 bln
was invested in Clean Air capital projects
of Apatit’s Cherepovets site.
1.048
0.888
0.892
0.801
2018
2019
2020
2021
NOx, SOx and other significant air emissions, t
2021 metrics and highlights
PhosAgro Group has developed
and now maintains an emissions
management process that includes
assessment of planned activities,
discussion of relevant matters with
a wide range of stakeholders, as well
as monitoring and disclosing pollutant
emissions. To effectively reduce its
environmental impact, the Group
is running a programme to re-equip
production facilities and minimise
pollutant emissions.
by 11% emissions
reduced in 2021 vs 2017 at
Apatit•s Cherepovets site as part
of the Clean Air initiative
GRI 305-7
Pollutants
Total
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
Solids
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
2019
2020
2021
9,221.1
7,002.4
1,162.5
11,488.9
28,874.9
10,003.4
10,120.3
7,286.2
1,068.9
11,830.7
30,189.0
6,876.0
1,165.8
10,065.3
28,227.4
3,734.1
5,148.6
4,939.8
410.8
610.4
1,356.3
6,111.7
429.5
461.7
917.3
6,957.1
425.8
528.6
1,055.1
6,949.3
NOx, SOx and other significant air emissions, t
Pollutants
Sulphur dioxide
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
Carbon monoxide
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
Nitrogen oxides (NOx as NO2)
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
Hydrocarbons (w/o VOCs)
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
Volatile organic compounds (VOCs)
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
Other gaseous and liquid pollutants
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
2019
2020
2021
3,458.3
4,293.7
161.7
3,297.4
3,104.0
4,432.1
180.8
3,367.2
3,308.2
3,975.4
206.7
3,029.2
11,211.1
11,084.0
10,519.5
477.6
782.8
73.3
1,476.3
2,810.0
711.1
870.0
92.4
1,573.5
3,247.0
777.0
933.1
115.3
1,274.8
3,100.2
1,534.8
1,012.2
1,067.8
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724.1
149.8
2,309.2
4,717.9
0
2.6
0.0
37.8
40.4
16.1
340.0
3.4
2.8
362.3
0.1
448.5
163.9
3,009.1
3,621.5
746.9
283.1
2,540.0
4,582.1
8.0
2.6
0.0
38.1
48.7
19.0
340.1
4.6
2.2
760.7
207.6
2,401.8
4,437.9
8.0
2.6
0.0
38.1
48.7
19.0
340.7
5.0
2.0
365.8
366.7
0.5
465.1
46.2
3,392.6
3,904.3
0.5
437.7
102.6
2,264.3
2,805.1
180
181
Performance Review Initiatives implemented in 2020–2021
to achieve the target
Apatit’s Cherepovets site implemented two key projects as part
of the Clean Air initiative:
> an upgrade of technological system No. 3, block 2.70 at the
mineral fertilizer production site (CAPEX: RUB 777 mln);
> a technical upgrade of the low-capacity absorption unit,
blocks 7.00 and 7.01 at the mineral fertilizer production site
(CAPEX: RUB 311 mln).
The total environmental effect of these measures in 2021 was a
464,9 t reduction in pollutant emissions
The following projects were completed
at the Volkhov branch in 20211:
> Installation of equipment to treat waste
gases as part of the effort to modernise
the wet-process phosphoric acid
production unit and increase its capacity
to 450 ktpa. Expected environmental
effect: maintaining per unit emission of
gaseous fluorides on par with the best
available techniques included in the best
available technique guidelines (ITS2-
2015) (0.31 kg/t).
> Installation of equipment to treat waste
gases as part of the construction of an
800 ktpa sulphuric acid facility. Expected
effect: ensuring and maintaining SO2
emissions on par with the best available
techniques (1.292 kg/t).
> A technical upgrade at the mineral
fertilizer production site (with an upgrade
of gas recovery equipment). Expected
effect: ensuring and maintaining
emissions of hydrogen chloride and
fluorine compounds (expressed as
fluorine) on par with the best available
techniques (0.183 kg/t).
Balakovo and Kirovsk branches
> In 2001, the first stage of a project to
re-equip technological systems No. 5
and 6 of the phosphate fertilizers unit
was completed at the Balakovo branch.
The second stage will be implemented
in 2022 and will include an upgrade
of gas recovery equipment, with the
environmental effect to be determined
upon completion.
> Apatit’s Kirovsk branch implements
annual dust suppression of dusty
surfaces. In 2021, dusty surfaces of
tailing dumps were chemically stabilised
at ANBP-2 (631 ha in the beach area,
47.23 ha on the dam slopes, and 67
ha in the roads) and ANBP-3 (346 ha
in the beach area and 51 ha in the
roads). ANBP-2 saw hydroseeding of
dam slopes (15 ha), while the slopes at
ANBP-3 were biologically stabilised in
manual mode (5.3 ha).
Water
2021 highlights
Water use, m3 per tonne of finished and semi-finished products
2021
2020
2019
2018
Water withdrawal1
Waste water discharge2
Strategy
303-1
Reduction in specific effluents
by 2025
by 27% from the 2018
level to 4.4 m3/t of finished
and semi-finished products
Water is an important resource for
PhosAgro Group. There is no shortage
of water sources in the regions where
our facilities are based. According to
the Water Risk Atlas and Water Risk
Filter, all PhosAgro production sites are
located in areas with low or moderate
fresh water scarcity. However, access
to clean water is a major issue facing
the world.
2021
2020
2019
2018
6.48
6.70
5.85
7.29
5.42
5.57
4.68
6.04
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The main risks related to water
consumption are water quality
deterioration in water bodies across
PhosAgro Group’s footprint and
the Group’s non-compliance with
statutory requirements for limiting
negative impact on water bodies.
PhosAgro Group has implemented
closed-loop water recycling systems
at its sites in Volkhov and Balakovo
to reuse water in production processes.
Going forward, we plan to improve
waste water management by focusing
on maximum reuse of water through
closed-loop water recycling systems
and better treatment of effluents
discharged into water bodies in addition
to ongoing monitoring of water bodies
in the regions of operation.
The regulatory risks include tightened
waste water quality requirements, as well
as restrictions on the amount of
water consumed and discharged into
water bodies and centralised waste water
systems.
To mitigate these risks, in 2020 we
adopted and started implementing a
water strategy that sought to reduce
water consumption and discharge and
improve waste water quality.
The strategy is implemented at all
PhosAgro Group’s sites, and we regularly
analyse these measures to determine
whether they are sufficient and effective
enough to achieve our targets.
To identify the impact of the Company's
operations on water bodies, we monitor
these bodies in accordance with adopted
programmes by engaging our own
certified laboratory and external certified
laboratories.
Water Strategy
for 2020–2025
1 The environmental effect of the projects completed at Apatit’s Volkhov branch will be determined based on the 2022 results.
1 The Group specific disclosure was calculated as a ratio of total water withdrawal, including mining and drainage waters to the total output
of products and semi-finished products
2 The Group specific disclosure was calculated as the ratio of the total volume of waste water discharged into surface waters to the total output
of finished and semi-finished products
182
183
Performance Review
2021 metrics and highlights
Total water withdrawal by source, ths m3
GRI 303–3
Indicators
Surface water
Total water withdrawal from surface sources, including:
process water
drinking water (internal use)
drinking water (for supplies to third parties)
mining water
drainage water
rainwater
Ground water
2019
2020
2021
145,179
58,315
885
466
79,933
3,577
2,002
170,862
59,081
995
399
104,475
3,312
2,600
175,943
60,747
1,193
557
107,633
3,171
2,642
Water withdrawal from ground-water sources:
2,842
2,832
2,912
Water received from third-party suppliers
Total water received from third-party suppliers, including:
process water received from suppliers
water from municipal supply (internal use)
water from municipal supply (for supplies to third parties)
waste water from other waste-water discharge systems
42,082
27,546
8,560
34
5,943
52,898
28,443
8,138
17
16,300
49,600
28,373
9,126
47
12,054
Total
190,104
226,592
228,456
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Measurement of total and specific water withdrawal including
and excluding mining and drainage waters
Indicators
UoM
2019
2020
2021
Total water withdrawal, including mining and drainage waters
Specific water withdrawal, including mining and drainage waters1
Total water withdrawal from surface sources, excluding mining and
drainage waters
Specific water withdrawal from surface sources, excluding mining and
drainage waters2
ths m3
m3/t
ths m3
m3/t
190,104
226,592
228,456
5.85
6.70
6.48
106,593
118,805
117,651
3.28
3.51
3.34
Total water discharge by source, ths m3
GRI 303–4
Indicators
Water discharge into surface waters
Total water discharge into surface waters, including:
mining water
drainage water
waste water from other waste-water discharge systems
Supplies to third parties
Total water supplies to third parties
waste water to the public water discharge system (after use)
waste water to the public water discharge system (unused)
water supplies to third parties from surface sources
water supplies to third parties from municipal sources
Total
Treated effluents (reused in the production cycle)
Asset
Total, mln m3
Share of reused water, %
Total water withdrawal by source,
ths m3
2019
2020
2021
152,223
188,455
187,012
79,933
104,475
107,634
3,577
3,312
3,170
5,494
15,901
11,673
4,118
3,170
448
466
34
4,147
3,314
399
417
17
4,222
3,238
381
557
47
156,341
192,602 191,234
2019
231.5
87
2020
240.4
88
2021
244.7
87
1 The Group specific disclosure was calculated as a ratio of total water withdrawal, including mining and drainage waters to the total output of products
and semi-finished products
2 The Group specific disclosure was calculated as a ratio of total water withdrawal from surface soruces, excluding mining and drainage waters,
to the total output of products and semi-finished products
184
185
Performance Review Water consumption, ths m3
GRI 303–5
Total water withdrawal (all sources)
Total water discharge (all sources)
Water consumption
2021
2020
2019
2021
2020
2019
228,456
226,592
190,104
2021
2020
2019
191,234
192,602
156,341
37,222
33,990
33,763
Water discharge in 2021, mln m3
GRI 303–4
Indicator
Waste water into surface water bodies
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
Discharged without treatment (% of total water discharge)
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
Waste water discharge at Apatit
Waste water discharge
Kirovsk branch
Discharge 1. Discharge from ANBP-3
Discharge 2. Discharge from ANBP-2
Discharge 3. Rainwater at ANBP-2
2020
2021 actual
173.9
0
0
13.1
187.0
0
0
0
0
0
173.7
0
0
14.8
188.5
0
0
0
0
0
Receiving water body
Zhemchuzhnaya River
Belaya River
Belaya River
Discharge 4. Mining waters of the combined Kirovsky, Central and Rasvumchorrsky mines
Lake Bolshoi Vudyavr
Discharge 6. Waters of the wells installed at the Vostochny mine to reduce groundwater level
Vuonnemyok River
Discharge 5. Mining waters of the Koashva and Njorkpahk open pits
Discharge 8. Mining waters of the Koashva and Njorkpahk open pits
Discharge 9. Waters of water-lowering wells of the Vostochny mine
Apatit (Vologda region)
Effluents from the phosphate facility
Effluents from the nitrogen facility
Lake Kitchepahk
Lake Kitchepahk
Vuonnemyok River
Rybinsk Reservoir
Rybinsk Reservoir
Key initiatives implemented under the Water Strategy in 2020–2021
to achieve the target
At the Cherepovets facility, the
Company completed the first stage
of the water use optimisation
programme as part of its production
upgrade.
> Unit for pumping treated
effluent back to the phosphate
facility reconstructed, helping
reduce hourly discharge into the
water body by 250 m3 in 2021
(with no discharge in the dry
June–July period).
> Technical audit of the water use
at the phosphate facility carried
out.
> Technical audit of the water use
at the nitrogen facility carried
out.
> Measures taken to inspect
the chemical water treatment
facilities of blocks 303 and 308
and convert them to alternative
sources of water supply,
including treated waste water.
The Volkhov branch reduced its
waste water discharge by 135
m3/hour by implementing the
Electricity Generation Based on
the System of Chemical Water
Treatment (Heat and Power Plant)
project. The project involved
launching a system to reuse waste
water produced by the thermal
power plant and perform chemical
water treatment of concentrates.
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187
Performance Review Biodiversity
2021 highlights
2021 metrics and highlights
GRI 304-2
Investment in biodiversity protection programmes, RUB mln
> 1,000,000
juvenile fish were released into
water bodies across PhosAgro
Group’s footprint in 2019–2021.
2019
2020
2021
5.3
4.1
11.4
Strategy
GRI 304-3
Comprehensive biodiversity protection
programmes
In 2021, the Group completed the
development of comprehensive biodiversity
protection programmes for the Cherepovets
and Volkhov facilities.
1,031,440 juvenile fish and fry were released
into water bodies across the Company’s
footprint in 2019–2021.
Nakhimovskoye Lake,
Leningrad region
Zander
28,715
Umba River,
Murmansk region
Atlantic salmon
5,000
Kirovsk
In 2021, PhosAgro Group’s
Environmental Policy was amended to
focus on the Company's obligations
to preserve biodiversity, natural
landscapes and habitats across its
footprint and prevent its projects from
causing any harm to the same.
Before building any new production
facilities or renovating existing
ones, PhosAgro Group conducts an
environmental impact assessment (EIA)
based on the results of engineering and
environmental surveys. Assessment of
the local flora, fauna and landscapes,
as well as research, analysis and
consideration of public attitudes
towards biodiversity protection are
integral to our EIA procedures.
For a number of years, PhosAgro
Group has been working to preserve
biodiversity and replenish biological
resources. In 2020, PhosAgro started
developing comprehensive biodiversity
protection programmes in partnership
with research institutions. The effort
is aimed at assessing and restoring
environmental conditions across the
Company’s footprint and establishing
its priorities in protecting biodiversity
based on indicator species monitoring.
In 2021, the Company completed
the development of comprehensive
biodiversity protection programmes for
the Cherepovets and Volkhov facilities.
Together with Cherepovets State
University, we conducted biological
diversity monitoring in the sanitary
protection zone of the Cherepovets
branch, covering 18 km along eight
routes and studying over 400 species
of vascular plants, mosses, lichens and
fungi, as well as more than 250 animal
species. The research confirmed
that all species were in a satisfactory
condition and did not require special
restoration or conservation measures.
We also selected indicator species
and developed a plan for annual
biodiversity monitoring.
At the Volkhov branch, biodiversity
monitoring in its sanitary protection
zone was conducted jointly with
FRECOM, an independent Russian
company providing environmental
protection services. Following large-
scale wildlife, soil and geobotanical
studies, an environmental flora, fauna
and soil monitoring programme was
developed for the Volkhov branch’s
industrial facilities.
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Volkhov
Cherepovets
Balakovo
Sheksna Reservoir,
Vologda region
Sterlet
3,500
Sukhona River,
Vologda region
Sterlet
22,933
Juvenile fish and larvae released into water bodies across PhosAgro
Group’s footprint, units
Apatit JSC Biodiversity
Preservation Program
GRI 304-3
Water body
Gorky Reservoir
Volgograd Reservoir, Saratov region
Sukhona River, Vologda region
Umba River, Murmansk region
Rybinsk Reservoir, Vologda region
Saratov Reservoir, Saratov region
Lake Ladoga, Leningrad region
Nakhimovskoye Lake, Leningrad region
Sheksna Reservoir, Vologda region
Total
2019
6,500
55,000
84,353
2,130
–
–
–
–
–
2020
6,500
45,911
–
4,000
654,400
26,393
2,116
–
–
2021
–
55,838
22,933
5,000
–
28,151
–
28,715
3,500
147,983
739,320
144,137
Volgograd Reservoir,
Saratov region
Sterlet
5,601
Volgograd Reservoir,
Saratov region
Silver carp
25,237
Volgograd Reservoir,
Saratov region
Carp
25,000
Saratov Reservoir,
Saratov region
Carp
28,151
188
189
Performance Review
Contributing to local
communities
PhosAgro Group makes an extensive and
diverse contribution to the social and
economic development of local communities
in the regions of our presence: we pay taxes
to local budgets, create stable and well-paid
jobs for local people, and place regular orders
with local businesses. As a responsible long-
term partner, we also allocate significant
funds to support local communities,
contribute to charitable causes and develop
infrastructure. Stable and successful home
regions are a key driver of PhosAgro Group's
sustainable development.
UN Global Sustainable Development
Goals (SDG)
2021 highlights
+17%
increase in social investments
(RUB 3.8 bln vs RUB 3.2 bln in 2020)
+21%
increase in local procurement
programmes (RUB 28.3 bln vs
RUB 23.5 bln in 2020)
+702
new full-time jobs
Strategy
Management approach
Our strategy is focused on long-term
social and economic development
programmes in the regions, cities,
towns and rural communities in which
our key production units operate. We
implement regional development
projects with a special focus on:
> Respecting the interests of, and open
communication with, all stakeholders
> Investments in social and
infrastructure development initiatives
> Charitable support of local population
and communities
> Improving educational potential
of the regions and promoting sports
and a healthy lifestyle
We place a high priority on historical
continuity: as a successful enduring
partner of local communities in
which we operate, we are committed
to promoting their sustainable
development. While hinging upon
long-established social responsibility
practices implemented by our
production facilities, this partnership
is perfectly tailored to meet today’s
challenges and relevant stakeholder
expectations.
We have identified the following social
investment priorities:
> education;
> sports and a healthy lifestyle;
> social;
> medicine and healthcare.
In the end, every programme or
initiative involving social investments
should be aligned with the goals
and objectives set in PhosAgro's
Development Strategy until 2025
and contribute to its successful
implementation.
Our social investment programmes
are based on public benefit priorities
and opportunities to partner with
regional and local government
authorities, local communities,
non-governmental organisations,
including non-profit organisations
established by the Company to this
end, educational institutions and
other stakeholders.
lifestyles, and the cultural
potential, as well as supporting
veterans, the disabled and other
underprivileged social groups;
> establishment of subsidiaries
to promote non-core activities
that have economic influence
on the sustainable development
of local communities;
We implement our social investment
strategy through promoting efficient
and successful cooperation with
a broad range of partners in line with
the highest international sustainable
development standards.
The key principle underlying our
interaction with local communities
is a meaningful dialogue through
a variety of communication channels,
from public hearings and
the involvement of Company
representatives in the work
of local legislative bodies and
government authorities to setting up
community liaison offices and other
venues for meetings with people.
Our key interaction mechanisms
include the following:
> social and economic partnership
agreements with governments
of the Russian regions in which
the Company operates, namely,
the Murmansk, Leningrad,
Vologda, and Saratov regions,
as well as with the municipal
authorities of five cities
in the above regions;
> agreements on the support and
development of educational
institutions;
> support and establishment
of non-commercial organisations
to establish platforms for promoting
civil initiatives of the local
population, education, healthy
> grant projects;
> support of volunteering
by the Group’s employees;
> targeted assistance to people
who apply directly to PhosAgro
Group.
Key policies
and regulations
GRI 203-2
All of the Group’s social investment
projects and initiatives are
implemented in accordance with the
requirements of the Federal Law on
Charitable Activities and Charitable
Organisations, the Federal Law on
Advertising, and other applicable laws
and regulations. To ensure transparent
and effective corporate governance,
the Group has developed a framework
of internal regulations governing
charity and sponsorship, including:
> Code of Ethics;
> Charity policy;
> Rules for the Provision of Charitable
Assistance by Apatit;
> Regulations on Business Unit
Interaction and Document Execution
for the Provision of Charitable
Assistance by Apatit and the
companies managed by Apatit;
> Regulations on Managing Community
Social Projects.
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191
Performance Review Organisational unit
Key responsibilities
Corporate level
Management Board
Chief Executive Officer
Deputy CEO
Office for External
Communications
> Annual budget consideration
> Collection and analysis
and approval
> Decisions on participation
in social and charitable
initiatives
of feedback and other relevant
information on ongoing projects
> Organisation of public hearings
and sociological surveys
> General coordination
> Information support
of activities related to charity,
sponsorship and community
investment
Subsidiary level
Government Relations Department
> Regular communication with
Information Policy Department
business partners
> Preparation of proposals
on the basis of feedback
Human Resources and Social Policy
Department
Social Development Departments
Commission for Social Issues and Charity
> Project and programme
> Initial consideration of new
management
applications
Risks
and opportunities
The following strategic risks affect our
social investment objectives (
for more
information, see the Strategic Risks section
on page 68):
3 Social risk
4 HR risk
15 Reputational risk
Social investment specific risks are listed
below:
1 Insufficient regulation of social
investment management processes
2 Performance evaluation of social
investment programmes
3 Evolution of public priorities
of social and economic development
The Company develops corrective
measures as necessary and unlocks
opportunities to mitigate those risks.
Below you can find more information
about what we do on this front.
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Results GRI 413-1
We focus heavily on evaluating
the results of our social investment
programmes. Assessment criteria
include both objective data and
stakeholder views, thus ensuring
comprehensive performance
assessment and monitoring
the evolution of public priorities
related to social and economic
development.
Social spending by area, %
6
11.2
1.3 0.4
12.4
12.5
56.1
Infrastructure facilities, including renovation
of educational institutions
Educational projects (net of renovation
of educational institutions)
Sports
Churches
Nation-wide projects
Organisations of veterans and
disabled people
Membership fees
In 2021, we partnered with the Donors
Forum to run an exhaustive stakeholder
survey and evaluate charity programmes
and projects implemented in the
regions of our footprint and supported
by PhosAgro Group. The survey helped
us to determine our strengths in social
and charitable activities and identify
the areas for further development and
improvement.
The successful matching of our projects
and initiatives with UN SDGs was
praised as a good practice. Importantly,
PhosAgro Group engaged a broad range
of partners in the implementation of
its projects to ensure a greater social
effect. At the same time, the survey
showed that we had to give more
focus to and consolidate information
on volunteering. It has significantly
developed in recent years, but the
potential of this component is far from
being exhausted. We also found that
many of our projects would benefit from
greater visibility to be achieved with
more active information support.
In the reporting year, we once again
organised a large-scale presentation
of our social projects in all cities of
our presence (previously, similar
presentations were held in 2016 and
2018). Such presentations have the
format of charitable festivals attended
by all charity recipients, with relevant
project reports. We invite all city
population as well as representatives
of government and local authorities,
public organisations and associations
to attend such events.
In 2021, charity festivals celebrated
the 20th anniversary of PhosAgro.
Our festival of social projects in
Volkhov was named On the Wave
of Good and the festival in Kirovsk –
20 Years of Success and Victories.
Amid the challenging epidemiological
situation, Doing Good Together, a
festival in Cherepovets, was partially
held online and broadcast in social
media. In Balakovo, we used several
interactive platforms to hold an online
event, Good Deeds Chain. The festival
closed on 13 November with a live
celebration that was broadcast on
both social media and TV. Following
the events, we closely analyse feedback
from festival participants and visitors,
including social media publications,
written questionnaires and statements.
The results of our analysis will be used
to improve the existing initiatives and
implement new ones.
We also collect a considerable
amount of data used for analysing
the effectiveness of our social
investment programmes from the
ongoing stakeholder feedback,
including corporate newspapers, TV
broadcasts, and social networking. In
addition, PhosAgro Group delegates
its employees to represent its interests
in regional and local legislative bodies.
Our work in these bodies provides us
with information on the most urgent
issues faced by local authorities.
We include them in the agenda of
joint working groups which discuss
the methods and mechanisms for
addressing the issues.
Charitable giving and community and infrastructure investment, RUB mln
GRI 203-1
2019
2020
2021
Contributions to charities, NGOs and research institutions (not related
to the organisation’s commercial research and development)
597,739
624,391
755,526
Funds allocated to support community infrastructure such as
recreational facilities
Direct spending on social programmes, including arts and
educational activities
1,414,990
1,885,719
2,052,495
840,276
720,438
939,227
Total
2,853,005
3,230,548
3,747,248
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Performance Review
Key social investment programmes
Our Favourite Cities
Our main social programme aimed at improving the quality of urban environment and
promoting sustainable development of PhosAgro Group.
Murmansk region
As part of Our Favourite Cities programme,
we participate in a public-private partnership
to develop a tourist cluster in the Murmansk
region, including the construction of Bolshoi
Vudyavr Ski Resort, Tirvas Health Resort and
Tirvas Ski Arena, the upgrade of Severnaya
Hotel, the construction of unique Plateau
Panoramic Restaurant, winner of the
international Ski Business Awards 2021, and
the ongoing renovation of the Khibiny Airport.
All of these sports facilities were certified by
the International Ski Federation (FIS).
Over the last five years, the number of people
visiting the ski resort has grown 3.5 times to
record 245,000 visitors in the 2020–2021 season.
In future, Bolshoi Vudyavr is expected to
function as an all-year resort. PhosAgro Group
has invested RUB 5 bln in the development
of the ski resort and the sports and tourist
cluster in the Khibiny Mountains.
In 2021, we also provided assistance to local
authorities in the development of an eco-
park around Lastochka Equestrian Club, the
construction of a new bridge over the Belaya
River and the Art Skating Rink in Apatity, as
well as the restoration of war graves.
Saratov region
In 2021, we doubled our investments in Our
Favourite Cities programme. In the reporting
year, we assisted local authorities in the
construction and renovation of nine public
gardens and parks, a monument to Fighters
for Soviet Power, and the municipal beach and
embankment, as well as with the installation
of streetlights in a pedestrian zone leading
towards the housing development area in
Microdistrict 21. Land plots in this area have
been allocated to large families.
We financed the renovation of the City
Exhibition Hall, district police station
No. 2, two playgrounds (Erudites and
Athletes) in Teremok Kindergarten No. 70,
including the construction of a playing
area and a sports zone with a race track,
as well as the technological upgrade of
power supply mains in the building of the
Saratov Regional Centre for Psychological,
Pedagogical, Medical and Social Support
of Children and purchase of a car for the
Centre. We also purchased an intercity bus
for Art-Allez, a circus arts centre in the town
of Marks.
The Company financed the construction
of sports grounds and playgrounds in
Novaya Yelyuzan and Naumovka villages
and the renovation of sports facilities for the
Mayanga village school.
Vologda region
In 2021, we allocated over RUB 300 mln for
social investment programmes in the region,
up 1.5 times year-on-year.
The most important (in terms of social
effect) project implemented by PhosAgro
Group jointly with government authorities
and other companies in Cherepovets is the
construction of the Northern Ring Road
(estimated total project cost is RUB 500 mln).
In 2021, the Group invested RUB 168 mln in
the project. We also funded the construction
of a playground and a public garden for
family recreation and installed security
cameras in the Northern Microdistrict
inhabited mainly by the Company’s
employees. The Company completed the
renovation of a pottery for the Future Exists
Charity. The pottery offers classes to more
than 40 children and teenagers with autistic
disorders and other health problems. We
launched the construction of a dormitory for
students of a technical college in the same
district.
The Company assisted with the renovation
of five municipal schools, including two
PhosAgro Schools, and five kindergartens
(including the region’s kindergartens).
Number of visitors to Bolshoi Vudyavr Ski
Resort, 2018–2021 winter seasons, ths.
2017–2018
2018–2019
2019–2020
2020–2021
178
184
103
245.8
We also completed a renovation project for a
sports school in Kaduisky municipal district.
Funding was allocated for renovation of
a municipal school in Nelazskoye and a
municipal kindergarten in Shulma in the
Cherepovetsky district.
Leningrad region
In January 2021, we inaugurated Dvugorye,
a modern ski sports centre, and built
two multi-use sports areas for football,
volleyball and basketball in the 40th
Anniversary of VLKSM and Yuri Gagarin
parks. PhosAgro Group supported the
initiative of Governor Alexander Drozdenko
and undertook to restore Vladimir
Pochivalov public garden, which used to
be a favourite recreational area for local
people. The renovation project is to be
completed in 2022. We also assisted the
municipal authorities in the installation
of busts to commemorate the honorary
citizens of the town – General Ivan
Fedyuninsky, who commanded troops
during World War II, and the People’s Artist
and Hero of Labour Vasily Lanovoy.
We financed a dewatering project and
the cleaning of drain canals to prevent
the flooding of private garden plots.
Previously, some 120–130 out of
450 garden plots in the area had been
flooded every spring.
PhosAgro Group employees joined
the Garden of Memory international
campaign and planted 50 thujas and
spruces along the plant fence facing
Kirovsky Prospekt on 7 May 2021
to commemorate those killed in World
War II. In the same district, we also
financed:
> financed the upgrade of a car
park,repairs of sidewalks along
the parkinglots, and the installation
of "smart"bus stops with a special
information system to keep
passengers informed about bus
arrival time;
> renovationof two schools, including
PhosAgro School No. 1;
> preparations for the construction
of a 305-apartment project for
PhosAgro Group employees.
Education
Healthy, educated and professionally trained population is a critical driver of any region’s social
and investment attractiveness.
its goal, it is necessary to provide
accessible sports infrastructure and
engage as many children as possible
in regular exercise. This task can
be addressed through an effective
combination of high-quality education
and physical training to facilitate moral
and ethical development and promote
health of the younger generation.
The key areas include organisation
of athletic events, spiritual and patriotic
training, environmental projects, artistic
festivals, and mass cultural events.
An important feature of the project
is continuous health monitoring based
on the Health Navigator methodology.
It helps teachers and parents to
adapt educational activities as closely
as possible to specific requirements
of a child’s body.
In 2021, the project covered more than
6,500 children (including 150 physically
disabled and handicapped ones) who
practised 20 athletic disciplines in 60
sports classes.
In addition, DROZD has established
11 non-sports clubs: Media School,
patriotic and preliminary military
training, ecology, robotics, fitness,
popular science, etc. Overall, more than
50,000 participants took part in DROZD
events in 2021.
As part of the project, we opened a new
youth cultural centre in Kirovsk and
held a sports and education festival
Since its establishment, PhosAgro
Group has been deeply involved in the
development of human potential in the
regions of its operation, in particular,
by helping to address the outflow of
young people from small towns.
The Educated and Healthy Children
of Russia (DROZD) programme is
PhosAgro’s key social initiative. In 2001,
this was solely an extra-curricular and
educational project, but later it was
expanded to a programme that covered
PhosAgro Classes and PhosAgro
Schools alike.
DROZD (Educated and Healthy
Children of Russia)
Project operators are independent non-
profit organisations established to provide
extra-curricular education and upbringing
for children.
The Educated and Healthy Children
of Russia (DROZD) project initiated
by Andrey Guryev, the founder of
PhosAgro and a member of its Board of
Directors, was launched in 2001. Our
project is aimed at promoting a healthy
lifestyle among the young. To achieve
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Performance Review to celebrate the 20th anniversary of PhosAgro,
as well as the 20th anniversary of DROZD
Khibiny Autonomous Non-profit Organisation.
PhosAgro Group invested over RUB 93 mln in
the renovation and equipment of the centre.
In April 2021, a working group of the Sports
Industry Commission of the Russian Union
of Industrialists and Entrepreneurs (RSPP)
presented its reports on the social and sports
activity in the regions of our operation. Its
members praised the unique experience of the
Group and proposed recommending its proven
solutions to other RSPP member companies.
College Classes
The project is implemented at Educational
Centre No. 29, Cherepovets College of
Chemistry and Technology, Ivanovo State
University of Chemistry and Technology
and the Kirovsk branch of Murmansk Arctic
State University. Its objective is to improve
the quality of preliminary professional
education by providing students with
opportunities for continuous learning
For more information, see the People
(
Development section on page 136).
PhosAgro Schools
The project covers six schools, close
to 6,000 pupils from grades 1 to 11, and
nearly 400 teachers and schoolmasters across
the Group’s footprint. In addition to financial
support and assistance in building renovations
provided to the schools, the project offers
advanced programmes in natural sciences,
economics, and management. In 2010–2021,
PhosAgro Group invested more than RUB
248 mln in the programme (net of school
renovation projects).
see the People Development section on page 136.
For more information,
Career guidance and exhibition
centres project
Career guidance and exhibition centres are
located in all of the four key cities across
our footprint and represent a combination
of a modern multimedia corporate museum
and an innovative and interactive popular
science centre offering advanced programmes
in chemistry, biology, and related professional
training.
The centres are equipped with virtual and
physical science laboratories designed to
prepare a variety of chemical compounds,
multimedia microscopes with 50,000x power,
and an interactive garden where students
can watch educational videos on cell life and
structure and do lab experiments. There are
panoramic cinemas offering career guidance
and educational films, sensor tables with
geographic data on minerals and countries
around the world, and sensor booths to test
professional aptitude.
The centres are very popular with schoolchildren
for being the place to learn about different
professions and a major attraction for teenagers
combining cultural entertainment and
intellectual pastime.
According to a survey, 95% of teachers have
noted that pupils, who took part in the centre’s
projects, displayed a growing interest in blue-
collar and white-collar jobs and relevant school
disciplines, such as chemistry, biology, geology,
and geography.
Survey findings also indicate that 98% of
children have expressed a wish to revisit the
centres after their participation in a career
guidance project.
RUB > 248 mln
PhosAgro Group invested
in the programme PhosAgro Schools
Universities
Our key partners among Russian universities
include St Petersburg Mining University,
Murmansk Arctic State University, Ivanovo
State University of Chemistry and Technology,
Kuban State Agrarian University, and
Timiryazev Academy. Every year, the Company
offers on-the-job training and pre-graduation
internship to over 600 students from these
and other universities (
for more information,
see the People Development section on page 136).
Spiritual Revival
The main objective of the programme is to preserve and promote orthodox values, spiritual
ideas, and respect for our legacy and motherland.
The programme has been underway
since 2001 and is implemented in
cooperation with the Russian Orthodox
Church, regional and local government
authorities, non-governmental
organisations and civil society.
We assist in rebuilding and aiding
26 churches, including the Holy Trinity
Church in Balakovo, a unique heritage-
listed building designed by Fyodor
Schechtel, a prominent architect
of the early 20th century. In June
2021, a service was held in the church
to consecrate the restored mosaic
of the Saviour. Unique pieces of high-
quality smalt for the icon had been
imported from Italy.
The Company also contributes
to reviving a pre-revolutionary
tradition of building on-site churches.
The congregation of on-site churches
at PhosAgro enterprises has exceeded
20,000 people and continues
to grow.
In October 2021, the Andreyevsky
Spiritual and Educational Centre opened
at the Volkhov branch of Apatit.
In 2021, a cross and a foundation stone
for a chapel of the Archangel Michael
were consecrated at the Cherepovets
site of Apatit. The new church is
expected to be consecrated in the
autumn of 2022, on Michaelmas.
The Company organises biannual
pilgrimage tours to the relics of St Nicolas
the Wonderworker for Russian believers.
PhosAgro Group supports the project
to develop the Russian Orthodox Centre
in Singapore. The Group also provides
assistance to the exarchate of the Russian
Orthodox Church in Southeast Asia.
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Connecting Generations
The programme combines the assistance to 24 non-governmental organisations of labour
and war veterans as well as charitable organisations with the promotion of volunteer
initiatives across the Company’s footprint.
In particular, PhosAgro Group supports
10 non-governmental organisations
in Cherepovets, including In the Name
of Good charity, the Cultural and
Recreational Centre in the Northern
Microdistrict, and veteran
organisations.
In Kirovsk and Apatity, we provide
support to six non-governmental
organisations, including a volunteer
centre for the Group’s pensioners.
We also support four local non-
governmental organisations
in Balakovo and Volkhov, respectively.
Volunteer initiatives
We see the engagement of PhosAgro
Group employees in public benefit and
charitable programmes as an important
means of improving social environment
in the regions of our operation and are
committed to focus on the promotion
of volunteering.
In the Murmansk region, the Group
supported the creation of three volunteer
centres (in Kukisvumchorr, Koashva, and
Kirovsk) to work with pensioners, veterans
and residents of remote communities.
Any local resident can come to the
centres to benefit from the services of a
mini-laundry and a sewing workshop, use
modern fitness equipment for exercise,
play billiards, do some needlework or
just enjoy a cup of tea with their good
friends. Volunteers working at the centres
send birthday greetings to pensioners,
take care of long-livers and long-term
residents, identify people in need of social
assistance and submit their findings to
social service centres. Volunteers also
look after lonely pensioners with limited
mobility (deliver food and medicines, help
with correspondence, provide assistance
in dealing with utility companies and
social services, etc.).
During the pandemic, volunteers
called up elderly residents on a regular
basis, distributed masks and vitamins,
delivered food parcels, and provided
comprehensive assistance.
In the Vologda region, GTO Volunteers
project run by DROZD-Cherepovets
won the Best Volunteer Initiative in
the Non-Government Organisation
(Association) nomination at the
Civil Forum. The project focuses
on supporting sports classes for
handicapped and physically disabled
children. DROZD-Cherepovets
provided them with specialised sports
equipment and gear. The project
also included training courses for
adapted physical education teachers
from Cherepovets schools and
kindergartens, the Sports Club for the
Disabled, and DROZD-Cherepovets.
Cherepovets hosted the first festival
of physical training for handicapped
and physically disabled children, which
brought together over 150 school
children and pre-schoolers, their
trainers and volunteers.
196
197
Performance Review Across cities of our footprint, volunteers from
among our employees and their families take
part in annual campaigns to plant trees and
release fingerlings into rivers, help people
with limited mobility and assist veterans in flat
renovations.
PhosAgro Group has joined
#WeAreTogether nationwide campaign.
The Company’s facilities collect funds, and
any employee can fill in a simple form and
make a charitable donation. The collected
funds are sent to healthcare and social
institutions, volunteer centres, elderly
citizens, people with limited mobility,
and health workers. In 2021, the money
collected as part of the campaign were sent
to 53 recipients across PhosAgro Group’s
footprint.
Promotion of sports
PhosAgro Group has been traditionally supporting Russian sports on the international,
national, and regional levels.
We believe that supporting the first steps
of young athletes in the cities of our
presence is just as important as contributing
to the success of record holders.
PhosAgro Group has been a key partner
of the Russian Chess Federation for
11 years. In June 2021, the Company
once again renewed its partnership
agreement with the Federation and became
the general partner of the World Chess
Championship held in Dubai in November.
In addition, PhosAgro acts as a strategic
partner of the Russian chess grandmaster
Ian Nepomniachtchi, the challenger for
the World Chess Championship.
Andrey Guryev,
Chief Executive
Officer of
PhosAgro until
10 March 2022:
“Chess has become
our traditional corporate game, an element of our
corporate culture. Chess and PhosAgro have a
lot in common: we always calculate a move, or
rather two or three moves in advance to outdo our
opponents. PhosAgro is committed to supporting
Russian chess and Russian chess players. Our main
goal is to return world chess crown to Russia.”
Our support helped Severyanka Women’s
Volleyball Club from Cherepovets to achieve
the highest results in its history both in
Russia and internationally. In the last seven
seasons, the Club has won four gold medals,
two silver ones and a bronze in Major
League A, twice made it to the finals
of the Russian Cup, won four gold medals
in Major League B and three gold medals
in First League. It can boast a constellation
of athletes playing for Russian youth
teams – winners and awardees of European
and world championships. Severyanka also
developed a training methodology and
launched a Ball School project for children
from DROZD autonomous organisations.
As a result, DROZD students, from pre-
schoolers to school graduates, play
team sports. Severyanka holds annual
city volleyball tournaments for children
in Cherepovets and enjoys full stands
of fans – mainly PhosAgro Group employees
and their families – at all club fixtures
in the city.
PhosAgro Group supports a number
of other sports organisations,
including
> Russian Olympians Foundation
> Russian Rhythmic Gymnastics
Federation
> Russian Cross-Country Skiing Federation
> Russian Rugby Federation
> Avtodor Basketball Club (Saratov)
(financed under an agreement with
the State Autonomous Institution of
the Saratov Region Olympic Reserve
Basketball School or the Olympic Reserve
School)
> Proton-Saratov Volleyball Club
> Turbina Speedway Club (Balakovo)
> Kovrovets Motoball Club
Supporting local communities during the COVID-19 outbreak
In 2021, the COVID-19 pandemic continued to affect social and economic environment across our footprint,
and the Group did not stand aside from the common challenge.
The Cherepovets branch of
Apatit continued to provide hot
meals to Cherepovets health care
professionals at high risk of COVID-19.
150 health workers from ambulance
teams and infectious disease
departments of Vologda Regional
Clinical Hospital No. 2 (Cherepovets)
and the COVID department
of Cherepovets City Hospital received
quality lunches cooked by city caterers
and delivered to their workplaces.
We also purchased medicines,
equipment and protective gear for
several municipal clinics in the city.
In Volkhov, PhosAgro Group has
been actively supporting social and
healthcare institutions throughout
the pandemic. In particular, we
provided protective means and
disinfectants, medical equipment,
and lung ventilators to the Volkhov
Interdistrict Hospital. In August 2021,
we gifted a RUB 5 mln certificate
to the hospital for the procurement
of medicines to treat COVID patients.
The Company also delivered hot
meals to medical teams on call during
the New Year holidays.
In 2021, the Balakovo branch of
Apatit continued to provide financial
support to health care workers of, and
purchased equipment and medicines
for, hospitals and clinics in the
Saratov region. Similarly, PhosAgro
Group financed the same assistance,
including the purchase of medicines,
protective gear, and medical
equipment and bonuses to healthcare
workers, in the Murmansk region.
Our initiatives during the pandemic
have been highly appraised by
the government. In October 2021,
Andrey Guryev, CEO of PhosAgro
and Chairman of the RSPP
Coordinating Council for COVID-19,
was awarded the Order of Pirogov
for his considerable contribution
to organising the efforts to provide
medical care and prevent the spread
of COVID-19.
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Performance Review
Committed to the highest
standards
PhosAgro has been meeting high corporate
governance standards since its inception.
The Company’s internal standards are aligned
with Russian laws, recommendations of the
Bank of Russia, Russia’s Corporate Governance
Code and the UK Corporate Governance Code
61.1
Corporate governance quality
assessment of Phosagro Group
assesment score by Sustainalytics
7.1Corporate governance quality
assessment of Phosagro Group
assesment score by MSCI ESG
Research
E
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N
A
N
R
E
V
O
G
E
T
A
R
O
P
R
O
C
202
Chairman’s
Statement
204
Corporate
Governance
Framework
212
Board of Directors
240
Executive Bodies
246
Corporate Controls
252
Ethical Practices
262
Remuneration
Report
200
201
201
201
Об отчете О компании Стратегический отчет Обзор результатов Корпоративное управление Акционерный капитал Финансовая отчетность Дополнительная информацияАкционерный капитал
Chairman’s
Statement
2021saw important
regulatory changes in corporate governance both in Russia and
abroad. Amendments made recently to national legal codes
around the world reflect a dominant global trend towards greater
focus on sustainable development and the increasing role of the
board of directors in addressing sustainability challenges.
2021 saw important regulatory changes in
corporate governance both in Russia and
abroad. Amendments made recently to
national legal codes around the world reflect
a dominant global trend towards greater
focus on sustainable development and the
increasing role of the board of directors in
addressing sustainability challenges. The
COVID-19 crisis also significantly impacted
the transformation of expectations in terms
of corporate governance quality. It will
take time to fully understand the structural
implications of the pandemic for capital
markets and its long-term impact on how
boards of directors operate. However, today
we are already witnessing changes in these
markets and the introduction of temporary
corporate governance initiatives to address
them. The need to adjust existing rules and
practices to the post-pandemic reality is
becoming increasingly obvious, especially
in areas such as ESG risk management,
digitalisation, audit quality, and creditors’
rights. As boards of directors are held
accountable to shareholders and other
stakeholders in these fields, their scope
of responsibilities will inevitably be
reviewed going forward.
According to a PwC survey1, more
than 90% of current Russian directors
are convinced that the role of the
board of directors will change in the
future. The importance of the board’s
supervisory and analytical functions will
fade, replaced by a focus on visionary
leadership, and boards will spend more
time interacting with stakeholders and
nurturing corporate culture and values.
In 2020 and 2021, we saw sustainable
development gain momentum, with
boards getting increasingly involved in
the management of sustainability issues.
We expect these changes to continue
in 2022, as the investment community
wakes up to the new reality and
stakeholder expectations shift, requiring
companies to move away from simply
crafting declarations to implementing
practical action. Transformation
of non-financial reporting is also
underway, with emphasis placed on
a harmonisation of standards and closer
alignment with financial statements.
Non-financial reporting was the main
focus of one of the critical corporate
government documents issued by the
Central Bank of Russia in 2021 – the
Bank of Russia’s Information Letter
on Recommendations on Disclosure
by Joint-Stock Companies of Non-
Financial Information Pertaining to
Their Activities No. IN-06-28/49 dated
12 July 2021.
1 PwC survey The Board of the Future
By unifying international standards
and supranational regulations in the
realm of non-financial disclosure, the
Russian regulator developed guidelines
to ensure the relevance, practicality,
consistency and comparability of
non-financial indicators. We sought
to integrate the Bank of Russia’s key
recommendations into this report
as much as possible, including by
reflecting the double and dynamic
materiality approaches and disclosing
non-financial data in the context of our
strategy, management approach, risks,
and metrics.
In December 2021, through its
information letter No. IN-06-28/96
(dated 16 December 2021), the Bank of
Russia issued recommendations to the
boards of directors of public joint-stock
companies on how to consider ESG
factors and sustainable development
in their activities. Given the growing
influence ESG exerts on the operations
of different organisations and the
increasing impact such organisations
have on the environment, society and
economy, the Bank of Russia came
up with these proposals in order to
redefine the key responsibilities of the
board of directors in areas of strategic
guidance, risk management, and
non-financial disclosure. PhosAgro’s
Board of Directors included these
recommendations from the regulator in
its self-assessment report for 2021.
Our directors adhere to the Company’s
policy of promoting ongoing research
and implementing best market
practices throughout all of PhosAgro’s
operations. PhosAgro carried out an
analysis of its corporate governance
framework following the publication
61.1
Sustainalytics upgraded the Company’s
corporate governance score from 59.1
to 61.1 (putting the Company in the top
17% globally)
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Our directors adhere to the Company’s policy of promoting
ongoing research and implementing best market practices
throughout all of PhosAgro’s operations.
of the new recommendations
on reporting compliance with
the Corporate Governance Code
in December 2021 (the Bank of
Russia’s letter No. IN-06-28/102
On Disclosure of the Corporate
Governance Code Compliance
Report in the Public Joint Stock
Company’s Annual Report dated
27 December 2021). The Board of
Directors confirmed strong alignment
between the Company’s practices
and the quality criteria outlined in the
regulator’s recommendations.
After reviewing PhosAgro’s yearly
corporate governance quality report,
the Board of Directors discussed
and approved improvements to the
Company’s corporate governance
procedures and additional disclosure
initiatives.
The directors are happy to see that
the Company’s sustainability efforts
and significant progress in this area
have won well-deserved praise
from Russian and international
rating agencies, as well as industry
consultants. In the second half of
2021, Sustainalytics upgraded the
Company’s corporate governance
score from 59.1 to 61.1 (putting the
Company in the top 17% globally),
and MSCI ESG Research upgraded it
from 6.9 to 7.1 (top 19% globally).
PhosAgro continues to perform
brilliantly in comparison to both Russian
companies and peers from the global
agrochemical industry.
The Board of Directors is highly satisfied
with the management’s performance
and contribution to the Company’s
success in 2021. During a Board
meeting held on 9 February 2022, the
directors expressed their gratitude to
PhosAgro’s management team for strong
operational and financial results and
for achieving all of the previous year’s
strategic goals.
Equally important was the recognition
coming from third parties. In February
2021, Andrey Guryev, PhosAgro’s
CEO, won the national Director of the
Year award for his Contribution to the
Development of ESG Culture, and in
March, the World Economic Forum (WEF)
recognised Guryev as a 2021 Young
Global Leader.
The Board of Directors reaffirms the
Company’s commitment to the highest
standards of corporate governance and
will continue to focus closely on health
and safety, sustainable development,
climate change and the global challenges
facing the agricultural industry.
PhosAgro’s directors will continue to
support the management team in
implementing the Strategy to 2025.
Xavier Rolet,
Chairman of the Board of Directors
of PJSC PhosAgro until 10 March 2022
202
203
Corporate Governance
Corporate
Governance
Framework
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Corporate governance principles
The Company sees its commitment to the
highest corporate governance standards as
key to building a transparent, responsible
and trustworthy governance framework
to ensure further growth and sustainable
financial strength.
PhosAgro’s corporate governance principles,
structure, practices and procedures are
set forth in its Charter1 and Corporate
Governance Code. The current version of
PhosAgro’s Corporate Governance Code2 was
developed in accordance with the Russian
legislation, the Company’s Charter and other
internal documents, taking into account the
requirements of securities market operators,
as well as recommendations set out in the
Corporate Governance Code approved
by the Bank of Russia’s Board of Directors
(the “Russian CGC”, the “Code”). Provisions
of the Company’s Corporate Governance
Code do not contradict Russia’s Corporate
Governance Code and the UK Corporate
Governance Code.
Basic principles of the Company’s
Corporate Governance Code
Accountability
Transparency
Sustainable development governance
GRI 2-9, 2-12, 2-13
Our governance framework for sustainable development (SD) relies on
a number of internal and external drivers.
Internal drivers
External drivers
Company’s mission and values
supported by our Corporate
Strategy
Stakeholder expectations and the
global community’s requirements
for the maturity of the Company’s
SD governance framework
1 For the full text of the document, please visit
our website.
2 The current version of the Corporate
Governance Code of PJSC PhosAgro.
Equality
Responsibility
The six main components of the sustainable
development governance system are listed in
the Sustainable Development section on the
official website
204
205
Corporate Governance Documents and initiatives
updated or developed
in 2021
Documentation
support
Business
processes
and organisation
Project
management
Competencies
and people
Performance
review and
reporting
> Expanding the composition and
functionality of the Sustainable
Development Committee of the Board
of Directors, established in 2019
> Strengthening the sustainability
management function at the corporate
headquarters and the enterprises
> Comprehensive regulations on
interaction in preparing non-financial
reporting drafted and implemented
> Climate and water-related risks and
opportunities identified, assessed and
included in the corporate risk register
> Certification of compliance with
requirements of ISO 9001, ISO 14001,
ISO 45001, GMP+ FSA
> Investor material topic surveys (in
particular, obtaining a five-component
SPO from Vigeo Eris to map out KPIs as
part of the preparation for issuing green
finance instruments)
> Approval of the External Auditor
Selection and Cooperation Policy
> Approval of the Personnel Management
Policy as amended
> Approval of the Environmental Policy as
amended
> Approval of the Regulations on the
Remuneration and Human Resources
Committee of the Board of Directors as
amended
> Approval of the Regulations on the
Environmental, Health and Safety
Committee of the Board of Directors as
amended
> Approval of the Internal Audit Policy
(internal audit regulations) as amended
> Approval of the Inside Information
Regulations as amended
> Approval of the Information Security
Policy
> Approval of a transparency statement
under the UK Modern Slavery Act as
amended
> Approval of the Code of Ethics as
amended
> List and coverage of sustainability KPIs
expanded
> Comprehensive system to evaluate
suppliers against ESG criteria developed,
with its automation and migration
to an e-platform in progress
> List of initiatives pursuing individual UN
SDGs-related targets being updated
> Mandatory training in various areas
(for example, UN SDGs, climate, etc.)
included in the sustainability training
framework
> Participation in major international
and Russian initiatives (RSPP, UN Global
Compact, IFA) maintained
> FAO Global Soil Partnership, European
Sustainable Phosphorus Platform,
Association of Economic Cooperation
with African States (AECAS).
IT technologies
> Procedure for preparing integrated
> Redesign of the
Sustainability page on
the Company’s official
website
annual reports drafted and approved.
CEO appointed as chair of the working
group in charge of the integrated
annual report
> Analysis of global and local ESG ratings
and rankings and expanding the range
of global ESG ranking questionnaires
(MSCI ESG Research, Sustainalytics, CDP
Climate Change, CDP Water Security,
Standard & Poor’s (S&P) CSA, RAEX)
> Stakeholder surveys (inside and outside
the Company)
> Procedure for the Sustainable
Development Committee to monitor
the Company’s ESG scores and ratings
assigned by leading global ESG data
providers (Sustainalytics, MSCI, S&P
CSA, CDP, FTSE Russell) developed
> TCFD, CDP, The Value Reporting
Foundation recommendations for
reporting implemented
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206
207
Corporate Governance
Corporate
Governance
Structure
Structure of corporate governance
and sustainability management
General Shareholders’
Meeting
Board
of Directors
Review
Committee
Board of Directors
committees
Chief Executive
Officer
Executive bodies
(Management Board)
> Audit Committee
> Remuneration and Human
Resources Committee
> Strategy Committee
> Environmental, Health and
Safety Committee
> Risk Management
Committee
> Sustainable Development
Committee
Corporate
Secretary
Internal
Audit
Department
Legal and Corporate
Governance
Department
administrative reporting line
functional reporting line
functional relationship
Sustainable Development
Department
Functional
departments
in sustainable
development
Procurement
Develops ESG-rating of suppliers and contractors, including
climate criteria, and integrates it into the contractor
selection system
Includes ESG criteria in the list of indicators assessed in
supplier audits
Project Management
Works on matters pertaining to the establishment of a task
group on reduction of GHG emissions and of negative
climate change effects on the efficiency of management and
production processes
Risk Management and Internal Control
Arranges for identification, assessment, management and
monitoring of strategic risks, including ESG-related, subject
to the approval and implementation
of the Strategy to 2025
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Functional departments
in sustainable development
Ecology and environmental management
Arranges the development of a climate and water strategy;
arranges the implementation of activities approved at
meetings of the Sustainability Committee and as part of the
low-carbon transition plan
Technical Development, Capital Construction and
Repairs, Samoilov Scientific Research Institute for
Fertilizers and Insectofungicides (NIUIF)
Studies and reviews technical and organisational actions
adopted at meetings of the Sustainable Development
Committee and the Board of Directors, and as part of the
low-carbon transition plan to reduce emissions and energy
consumption
Marketing and Development, Innovations, NIUIF
Studies and reviews actions adopted at meetings of the
Sustainable Development Committee and the Board of
Directors, and as part of the low-carbon transition plan
specifically pertaining to the development of technology
for releasing and promoting new products
Develops and promotes sustainable farming practices that
mitigate negative environmental effects or respond to
materialised climate risks
Economic departments
Works out a mechanism for incorporation of the carbon
price into the system created to evaluate the efficiency
of investment projects
Human Resources and Social Policy
Works out a plan for the development of personnel
competencies related to the ESG agenda
Develops and integrates ESG KPIs into the personnel
incentive system
208
209
Corporate Governance
Corporate governance quality assessment
Compliance with CGC principles at PhosAgro and other Russian companies, %
When assessing the quality of the
Company’s corporate governance,
the recommendations of the Russian
Corporate Governance Code (the “Russian
CGC”) and the UK Corporate Governance
Code (UK CGC, FRC, 2018) are adopted
as best practices. PhosAgro’s Corporate
Governance Code is based on the Russian
CGC, and the degree of consistency
between these two documents is reflected
on PhosAgro’s corporate website. The actual
compliance with the CGC is measured on an
annual basis and disclosed in a dedicated
report (report on compliance with the
principles and recommendations of the
Corporate Governance Code, hereinafter
the CGC Report), which is subject to review
and approval by the Board of Directors and
is included in the Company’s annual report
as an appendix.
In December 2021, the updated
recommendations of the Bank of Russia
on drafting the report on compliance with
the principles of the Russian CGC and
the relevant report form were published.
The self-assessment of compliance with
the principles and recommendations of
the Code in 2021 was carried out with due
regard to the above updates.
In April 2021, the Board of Directors reviewed
the management report on the quality of
the Company’s corporate governance in
2020, taking into account the results of
assessments by the rating agencies MSCI,
CDP and Sustainalytics, the 2020 CGC Report.
Noting a high level of compliance as a result
of the review, the Board of Directors also
reviewed the governance quality criteria,
which for certain reasons were not met fully or
partially, and discussed an improvement plan.
In March 2022, the Audit Committee of the
Board of Directors reviewed the results of the
improvement plan implementation in 2021,
analysed the developments of the degree
of compliance with the CGC principles, as
well as the assessment of the disclosure
quality to explain non-compliance or partial
compliance. The level of compliance with
the Bank of Russia recommendations was
assessed as high.
Following a review of the corporate
governance quality assessment, the Board
of Directors approved the 2021 report
on compliance with the principles and
recommendations of the Russian CGC, issued
a positive assessment of the implementation
of the 2021 Corporate Governance Practice
Improvement Plan, and approved the
improvement plan for 2022.
1 Principles of Corporate
Governance
2 Report on compliance with the
principles and recommendations
of the CGC of the Russian
Federation for 2021
Over the past three years, PhosAgro has demonstrated a high level of compliance with the Bank of Russia’s recommendations.
CGC section
I. Shareholders’ rights
II. Board of directors
III. The company’s corporate secretary
IV. Remuneration
V. Risk governance and internal control
VI. Information disclosure
VII. Material corporate actions
Total for the Group
%
Full compliance
Partial compliance
Non-compliance
2019
2020
2021
2019
2020
2021
2019
2020
2021
13
36
2
10
6
7
5
79
11
33
2
4
6
7
3
66
84
11
33
2
5
6
7
3
67
85
11
32
2
8
6
5
5
69
87
2
3
5
2
12
15
2
3
4
2
11
14
1
4
2
2
1
1
9
11
1
1
1
1
1
1
1
Full compliance
Full compliance
Full compliance
Partial compliance
Partial compliance
Partial compliance
Non-compliance
Non-compliance
Non-compliance
85 84 85 87
85 84 85 87
85 84 85 87
14 15 14 11
14 15 14 11
14 15 14 11
1 1 1 1
1 1 1 1
1 1 1 1
76 78 77
76 78 77
76 78 77
18 16 17
18 16 17
18 16 17
6 6 6
6 6 6
6 6 6
2018 2019 2020 2021
2018 2019 2020 2021
2018 2019 2020 2021
2018 2019 2020 2021
2018 2019 2020 2021
2018 2019 2020 2021
2018 2019 2020 2021
2018 2019 2020 2021
2018 2019 2020 2021
ФосАгро другие российские публичные акционерные общества
PJSC PhosAgro
ФосАгро другие российские публичные акционерные общества
ФосАгро другие российские публичные акционерные общества
Other Russian public joint-stock companies
Degree of disclosure to explain non-
compliance (partial non-compliance)
with CGC principles at PhosAgro and
other Russian companies, %
Results of implementing the CG improvement plan developed
and approved by the Board of Directors in the analysis of the
2020 CGC report
65.8
60
77
63
69
63
2018 2019
20201
PJSC PhosAgro
Other Russian public joint-stock
companies
For every case of partial compliance or non-
compliance, the Company specifies the
measures taken to mitigate the associated
risks in the CGC Report. In 2021, the quality
of the Company’s disclosure to explain the
non-compliance (partial non-compliance)
with the recommendations of the Code,
according to the Central Bank of Russia,
slightly worsened to 69%, while the average
level in the Russian Federation was 63%.
The deterioration is not critical, and its
causes are taken into account in the 2021
CGC report.
1 The most recent year assessed by the Bank of Russia.
Expanding the scope of the annual reports for 2020 and beyond to
include the Board of Directors’ viability statement, the going concern
assumptions, consideration given to key stakeholders’ voice in the
Board’s discussions and decision-making, information about significant
external appointments of the Board members
Expanding the disclosure in the annual report for 2020 and subsequent
years regarding the remuneration system as a whole, the KPI system and
their alignment with the strategy
Development of the External Auditor Selection and Cooperation Policy
Development of the Company’s tax strategy
Update of Regulations on Board Committees and other internal
documents to reflect the climate agenda, gender equality and diversity,
supply chain approach, and stance on animal testing
Approval of the Information Security Policy
Update of the Internal Audit Policy
Update of the Inside Information Regulations
In progress, disclosure is being improved
Done, approved by the Board of Directors
Done, prepared for review by the Audit Committee of the Board of Directors
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211
Corporate Governance
Key actions approved by the Board of
Directors upon review of the 2021 CGC report
which are aimed at improving the governance
quality in 2022:
> Review and approval of the tax strategy
> Amendments to the information policy
detailing the process for providing data on
shareholder requests
> Amendments to the Regulations on the
Remuneration and Human Resources
Committee reflecting the conditions (events)
for reviewing the compensation policies
> Return to the practice of individual
assessment of the Board members when
assessing the Board performance in general
General Shareholders’
Meeting
The activities of the Company’s supreme
governing body – the General Shareholders’
Meeting – are governed by the Regulations on
the General Meeting of Shareholders. In May
2021, the Annual General Shareholders’
Meeting was held in absentia to elect a new
Board of Directors and Review Committee,
determine the Board of Directors’
remuneration, distribute the 2020 profit,
including dividend payouts, and resolve on
other matters within the its remit. It was held
in absentia due to the COVID-19 outbreak.
Despite the pandemic-related restrictions, the
Annual General Shareholders’ Meeting was
held no later than usual, i. e. in last ten days
of May.
The reporting year also saw three extraordinary
General Shareholders’ Meetings convened
to vote on interim dividends.
Board of Directors
The Board of Directors plays
a key role in the Company’s
corporate governance
system. Its activities are
governed by the Regulations
on the Board of Directors.
Effective and resourceful leadership
of the Board of Directors is the
central pillar upon which the
success of PhosAgro is based.
In 2021, as the Board of Directors
continued to set the Company’s
strategic direction and make key
decisions, it is fully accountable to
PhosAgro’s shareholders and other
stakeholders for the Company’s
performance in production,
financial, environmental, social and
other areas.
Full text of the Regulations on the General Meeting
of Shareholders of PhosAgro is available on the
official website of the Company
The Regulations on the Board
of Directors
Sustainable development
and the Climate Strategy
GRI 2-14, 2-16
In 2021, with the sustainability agenda
gaining greater prominence, the
Company adopted or revised a number
of internal regulations, such as the
regulations on the Committees of the
Board of Directors, the Environmental
Policy, the Personnel Management
Policy and the Code of Ethics.
These documents set the stage for
furthering the Company’s ESG agenda.
The revisions made to the regulations
on the Committees expanded their
remit to include the matters of
climate agenda, gender equality and
diversity. The amended Environmental
Policy identified climate action and
biodiversity protection as overriding
priorities. The updated Code of Ethics
reinforced the Company’s responsible
approach to the supply chain.
The Board of Directors’ transparency
statement under the UK Modern
Slavery Act outlined the Company’s
actions to prevent all forms of modern
slavery and human trafficking within
PhosAgro and its supply chain.
Strategy and global challenges
The Board has traditionally focused on
strategic matters, overseeing the overall
implementation of PhosAgro’s Strategy
to 2025 and extensively reviewing
progress towards strategic objectives in
production, distribution, procurement,
innovative development and
international projects. The Company’s
Climate Strategy approved in
December 2020 added to the list of
the Board’s monitoring responsibilities.
The COVID-19 pandemic again made
crisis management an important part of
the Company’s operations.
Information
security
Internal
audit
In 2021, the Board placed
a particular focus on information
technologies. As part of work
in this area, it considered the
Company’s IT strategy, approved
the Information Security Policy
and analysed the key aspects of
cybersecurity at PhosAgro Group
companies.
The Internal Audit Policy of PhosAgro
(the Internal Audit Regulation) was
reviewed following the Bank of
Russia’s recommendations for the
arrangement of risk management,
internal control, internal audit, and
activities of the audit committee of
the board of directors (supervisory
board) in public joint-stock
companies.
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213
Corporate Governance Ongoing tasks GRI 2-16
Key activities undertaken by the Board of Directors in 2021 included:
> assessment and quarterly monitoring of
> review of the Company’s budget for 2022,
the risk management process;
> assessment and quarterly monitoring
of subsidiary activities with a focus on
workplace health and safety, industrial
safety and environmental protection;
> assessment of the degree to which the
requirements of the Company’s Insider
Information Policy were met;
> development of project management
across PhosAgro Group companies;
> appointment and evaluation of the
performance of the Company’s CEO and
Management Board;
> oversight over management relations
with shareholders, investors and other
stakeholders;
> monitoring the progress achieved across
the Company’s priority areas in 2021 and
setting priority activities for 2022;
as well as quarterly follow-up on the
2021 budget utilisation;
> determination of sustainable
development priorities;
> determination of whether PhosAgro’s
corporate culture is aligned with its
mission, values and strategy, as well as
assessing and monitoring the corporate
culture;
> performance and work plans of the
Internal Audit Department;
> quarterly review and approval of financial
statements;
> approval of major transactions and
interested-party transactions;
> convening General Meetings of
Shareholders.
Participation
in the Board
meetings
In 2021, the Board of Directors held eight
meetings (one of them by absentee voting)
and considered a total of 91 agenda items.
The number of items considered by the
Board of Directors in 2021 grew from the
previous years (70 and 79 in 2019 and
2020, respectively). This is the result of
the agenda of in-person meetings being
expanded to include workplace injuries and
progress of the relevant risk management
initiatives.
8 meetings
of the Bord of Directors in 2021
91matters
Reviewed by the Board of Directors
for 2021
Irina
Bokova
Andrey A.
Guryev
Andrey G.
Guryev
Sven
Ombudstvedt
Natalia
Pashkevich
James
Rogers
Marcus
Rhodes
Mikhail
Rybnikov
Xavier
R. Rolet
Andrey
Sharonov
Board of Directors
8/8
8/8
8/8
Audit Committee
Strategy Committee
2/2
2/2
Remuneration and Human
Resources Committee
4/4
Risk Management Committee
Environmental, Health and
Safety Committee
4/4
1/2
Sustainable Development
Committee
4/4
8/8
6/6
2/2
4/4
8/8
8/8
6/6
4/4
2/2
8/8
8/8
8/8
6/6
2/2
2/2
2/4
4/4
7/8
6/6
4/4
4/4
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215
S172 statement
According to Section 172 “Duty to
promote the success of the company”
of the UK Companies Act 2006,
PhosAgro’s Board of Directors acts in
good faith to promote the success of
the Company for the benefit, taking
into account possible long-term
consequences of its decisions for the
society and the environment, as well
as the interests of the Company’s
employees and other stakeholders.
For the members of PhosAgro’s Board
of Directors, these standards mean that
the Company’s stakeholders should be
interacted with responsibly and that
their interests should be respected to
the maximum extent possible.
This includes developing a special
section of PhosAgro’s corporate website
and our electronic bidding platform to
enhance procurement transparency,
encouraging small and medium-sized
businesses and local counterparties to
become our suppliers or contractors
and expanding public engagement
with local communities through public
hearings.
Our employees have a special place
among the Company’s stakeholders,
which is reflected, in particular, in one
of our strategic objectives – increasing
the loyalty and satisfaction of our staff.
Employee satisfaction and loyalty
surveys and programmes based on
their results are at the forefront of the
Remuneration and Human Resources
Committee’s agenda. Analysis of
hotline complaints and respective
management response is reviewed by
our Audit Committee on a quarterly
basis. Importantly, the said committees
are composed solely of independent
directors.
Although at the moment we do not
apply such practices as appointing
directors from among the employees
or appointing a non-executive
director responsible for interaction
with employees for considering their
standpoint when managing the
Company, we consider it effective and
are actively involved in a dialogue
on all major management issues
with the trade union organisation
(Minudobreniya Association), which
has historically been an equal partner
for PhosAgro Group’s management
and an authorised representative of
employees in collective bargaining,
review and resolution of labour
disputes.
In addition, heads of each production
site of PhosAgro Group regularly (at
least twice a year) visit all business units
and hold meetings with employees, at
which they inform the staff about the
Group’s performance, implemented
measures, and plans for production and
social development.
Based on employees’ suggestions and
comments, an action plan for improving
organisational and technological
processes is then developed and
implemented.
In 2021, PhosAgro Group also expanded
its dialogue with stakeholders about our
environmental footprint. We worked
intensively with local communities,
holding public hearings on the
development of the Group’s production
sites and their environmental impact.
Corporate Governance Prospects
PhosAgro Group’s development scenarios
are reviewed by the Board of Directors when
approving its Strategy. The Company’s
strategic planning cycle spans five years,
which we believe to be optimal given the
growing speed of external changes and our
investment horizon.
Since 2019, in addition to our traditional
analysis of sensitivity to FX rate fluctuations
and changes in product and feedstock
prices, the Board of Directors has been
considering a contingency plan to prepare
for critical changes in the external
operating environment, such as possible
restrictions on our supplies to key markets.
2021 was a challenging year for
PhosAgro, marked by the completion of
the investigation in the US ending with
countervailable duties imposed on Russian
and Moroccan producers, tighter pricing
control and the introduction of quotas and
export licences in Russia. An important
lesson we learnt from that year is that such
risks need to be assessed and managed.
When approving the Strategy to 2025,
the Board of Directors also weighed the
associated strategic risks and regularly
(semi-annually) reviews them as part of
strategy implementation monitoring.
Risk management maps were drawn for
each, containing a detailed description
along with mitigants and probability,
materiality and risk appetite estimates.
Board of Directors: place of residence,
%
Board of Directors: length of service,
%
For more information on our strategic risks, see
the Strategic Report section on page 68.
10%
Based on the foregoing, the Board of
Directors finds it reasonable to believe
that PhosAgro Group will, without any
reservations, be able to continue its
operations and meet all its obligations as
they fall due while the Strategy to 2025 is
in force.
50%
50%
50%
40%
Russian Federation
Europe
Southeast Asia
<3 years
>3 years
4–7 years
50%
of foreign nationals
on the Board
20%
of women on the Board
60 years –
average age of directors
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Composition of the Board of Directors
PhosAgro’s Board of Directors is compared to other boards based on Stanton Chase’s
Overview of Boards of Directors at Russia’s Largest Public Companies1.
70 %
Independent Directors
Board of Directors: age,
%
Board of Directors: gender split,
%
PhosAgro
Board of Directors: independence,
%
PhosAgro
10%
10%
40%
Above 60 years
50–60 years
40–50 years
Under 40 years
20%
20%
10%
40%
11%
89%
15%
52%
33%
80%
70%
Stanton Chase
Stanton Chase
Men
Women
Non-executive directors
Independent directors
Executive directors
Generalised board member profile
Criterion
Gender (female | male)
Age
Foreign citizenship, %
Duration of service since
appointment
Brief bio on the corporate website
Photo on the corporate website
Actual total remuneration per year
Number of the Board of Directors,
people
Stanton Сhase data2
Korn Ferry Russia data3
PhosAgro
Number of
companies
disclosing
information
112
113
112
111
86
82
26
112
Average
11% | 89%
54
20%
5 years
77%
73%
RUB 11 mln
11
Number of
companies
disclosing
information
40
40
40
40
n/a
n/a
n/a
40
Average
2021
13% | 87%
20% | 80%
55.2
30%
60 years
50%
5.5
5.2 years
n/a
n/a
n/a
10.8
100%
100%
RUB 22.1 mln
10
1 Companies were selected from RIA Rating’s TOP-100 Russian companies by market capitalisation ranking. The list includes companies from the 2021 ranking as well
as those that were included in the previous ranking but subsequently dropped out. This brings the total number of companies on the list to 115, six of which are “new”
compared to the last year’s study.
2 The review was prepared by Korn Ferry Russia together with the School of Finance at the National Research University Higher School of Economics.
The list includes 40 Russian companies.
3 According to the Stanton Chase study of 115 largest public companies of Russia conducted in September 2021, the average share of independent
directors stands at 33%.
216
217
Corporate Governance Professional development and training
of the Board of Directors
GRI 2-17
The Company views commitment
to continuous professional growth
as a cornerstone of good corporate
governance. By expanding their
knowledge and skills, directors add
value to the Board of Directors and
PhosAgro on the whole. An annual
performance assessment highlights
the need for the qualification upgrade
and training of the Board members,
with a focus on the following areas:
> industry trends in Russia and
abroad;
> current legislative and stock
exchange requirements;
> technological and agricultural
innovations.
In 2020-2021, trainings could not be
held in a traditional format due to the
COVID-19 pandemic. Nonetheless,
the development areas identified
during the 2021 assessment of the
Board of Directors performance,
including innovative development,
cyberrisks and cybersecurity, were
addressed. These topics were added
to the meeting agendas, and heads
of the relevant functions were invited
to the Board meetings, which ensured
deep understanding of these matters
by the Board members and gave an
impetus for PhosAgro’s accelerated
development in these areas.
In addition, outside experts from the
Big Four companies and other leading
expert organisations were invited to
the meetings. The Board heard the
following issues:
> The impact of the pandemic on risk
appetite and risks on the Board’s
agenda: cybersecurity, business
continuity, and resilience
> Assessment of information security
risks
> Assessment of sanctions risks
Board members took an active part
in conferences and round tables
arranged by such entities as CGI
Russia – World Economic Forum
Climate Initiative in Davos, IDA –
Association of Professional Directors.
Three members of the Board of
Directors became sought-after
speakers at St Petersburg International
Economic Forum 2021.
The Board of Directors regularly
receives newsletters from the
Company, including quarterly
newsletters on corporate governance
and weekly updates on the
developments in the chemical and
related industries.
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D&O liability insurance
Directors and officers liability for
damage caused to third parties by their
duties is insured by SOGAZ (contract
No. 20 DO 0018 in effect from 1 June
2020 to 31 May 2021, contract No. 21
DO 0022 in effect from 1 June 2021
to 31 May 2022) and is covered up
to USD 75 mln (in rouble equivalent)
and extended by USD 2 mln for
independent directors.
Apart from directors’ liability, the
above contracts include the liability of
the Company’s officers. Contracts with
SOGAZ have been concluded annually
since 2012.
Assessment of the Board of Directors
GRI 2-18
In accordance with the Russian
CGC recommendations, PhosAgro
assesses the performance of its
Board of Directors on an annual
basis, with external experts engaged
for this purpose once in three years.
Each new assessment relies on previous
assessments allowing to analyse both
absolute values and any changes that
occur over time. January 2020 saw
KPMG conduct an external assessment
of the Company’s Board of Directors.
The independent consultant
recognised the Board’s high efficiency
and a strong engagement of its
members. The next Board evaluation
by a third-party expert organisation
is scheduled for 2023.
218
219
Role of independent Directors
GRI 2-10
Independent directors make a valuable
contribution to the Board’s decision-making
as their opinions rely solely on professional
skills and expertise, as well as a comprehensive
study of the matter. Their position is unbiased,
independent and free from the influence
of other members of the Board and the
Company`s management, and they are
primarily focused on improving the Company`s
performance. At present, seven of the ten
directors are independent, which is well above
the average in Russia1 and at par with the best
global practices. Independent directors chair
five of the six Board committees.
Independent directors are world-class
experts with unique competencies
and a track-record in investment and
management of major businesses, financial
and research organisations and government
agencies. They are equipped with a full
set of knowledge and skills needed to
propel the Company and its Board of
Directors forward and foster dialogue with
stakeholders at various levels.
The independence of Board members
and nominees is assessed biannually by
the Remuneration and Human Resources
Committee. The assessment meets
the criteria established by the Regulations
on the Board of Directors and the Moscow
Exchanges rules. In 2021, a special
resolution of the Board of Directors
recognised three of its members, Sven
Ombudstvedt, Markus Rhodes, and James
Rogers, as independent, despite their
formal affiliation with the Company after
serving for over seven years on its Board
of Directors.
Onboarding of newly elected directors
Despite the fact that there were no
changes in the Board composition in 2020
and 2021, the Remuneration and Human
Resources Committee updates the
onboarding programme for new Board
members which is considered an effective
tool to gain an insight into the Company’s
operations. As part of the onboarding
programme, newly appointed directors
visit PhosAgro Group’s production sites and
meet with functional managers.
1 According to the Stanton Chase study of 115 largest public companies of Russia conducted in September 2021, the average share of independent directors stands at 33%.
Corporate Governance Self-assessment
The self-assessment of the Board’s
performance was completed in February
2022; its results were discussed in detail at
a meeting of the Remuneration and Human
Resources Committee of the Board of
Directors and, in a more condensed form, at
a meeting of the Board of Directors in early
March 2022.
Separately, it should be noted that the
self-assessment of the PhosAgro Board
of Directors’ performance for 2021 was
carried out for the first time with due
consideration of the recommendations of
the Bank of Russia on how to consider ESG
factors and sustainable development in
their activities (Bank of Russia information
letter No. IN-06-28/96 dated 16
December 2021). In general, the Board
members highly appreciated the degree of
integration of ESG factors into the work of
the governing body – the integral score was
4.34 on a 5-point scale.
6
5
4.71
4.71
4.30
4.31
4.50
4.83
1
4.58
4.52
4.50
4.35
4.47
4.55
4
4.45
4.35
4.40
3.90
4.10
3.90
2
3
1 Organising the business of the Board of Directors
2 Effectiveness of the Board of Directors
3 Continuous improvement
4 Liaising with committees
5 Corporate Secretary assessment
6 Composition and structure of the Board of Directors
2021
2020
2019
Integral assessment
Main conclusions of the self-assessment:
Balanced and effective
board composition
High quality
of financial reporting
Maintaining the quality of work
during the COVID-19 pandemic
Focus on employee well-being
and safety, sustainability, and
management quality
Deep immersion in operational issues,
including IT and cybersecurity,
and project management issues
Respect for shareholder interests,
including ESG and corporate social
responsibility, as well as dividend and
investment policies
Special focus was placed on the extent to which the Company has implemented the recommendations given following the
2021 performance assessment.
Assessment notes 2021
While the Board composition and competencies are generally balanced, it could be supplemented with a director
with expertise in agriculture and a director having knowledge of the Asian region.
Implementation
The Board composition remained unchanged.
Changed perception among directors assessing the Board of Directors1
Overall, the score remained high (4.62 for 2021 and 4.43 for 2020).
01
02
Need to expand communication with investors/analysts (one opinion), business unit leaders and key employees
(one opinion), members of the Management Board (one opinion).
Implementation
During 2021, the number of executives speaking at meetings of the Board and its committees continued to grow.
The Management Board members are invited to attend the Board meetings on a regular basis.
4.29
4.4
4.5
Changed perception among directors assessing the Board of Directors1
Need to expand communication with investors/analysts (two opinions), business unit leaders and key employees (one
opinion), Management Board members (one opinion), minority shareholders (one opinion).
03
There is a continued demand for training on industry trends
in Russia and globally (four opinions), cyber threats and risk
management (one opinion each), as well as technological and
agricultural innovations (one opinion).
Implementation
External experts from the Big Four companies and other leading expert
organisations were invited to the meetings of the Board of Directors and
committees to discuss the following issues:
> The impact of the pandemic on risk appetite and risks on the Board’s agenda:
cybersecurity, business continuity, and resilience
> Assessment of information security risks
> Assessment of sanctions risks
Educational events on agricultural innovation and regenerative agriculture, as
well as on climate agenda issues have been planned.
Changed perception among directors assessing the Board of Directors1
There is a continued demand for training on industry trends in Russia and
abroad (four opinions), statutory requirements (one opinion), technological and
agricultural innovations (two opinions).
04
Comments regarding the Audit Committee agenda: audit and
internal control policies; climate change issues; assessment of
corporate governance as part of internal audit to be considered
in 2021.
Implementation
Reviewed.
Changed perception among directors assessing the Board of Directors1
No comments on the agenda, the assessment of the Audit Committee
performance is traditionally high (4.67 for 2021 and 5.00 for 2020).
1 Assessed on a 5-point scale.
The assessment also identified the
following areas of improvement for
the Board of Directors, such as:
> more active engagement with
investors, analysts, business
unit leaders, key employees, and
members of the Management Board;
including the resumption of visits of
the Board of Directors to PhosAgro
Group’s production sites;
> providing training on industry
trends in Russia and globally, as well
as technological and agricultural
innovations;
> improvements in the organisation
and procedures of the Board of
Directors meetings, such as reducing
the scope of a single meeting
agenda, reducing the number of
reports, provided that the Board
members familiarise themselves
with the materials in advance and
committee chairpersons present
a brief report on issues that have
been discussed by the respective
committees.
The next study is scheduled for early
2023 and will involve external experts.
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220
221
Corporate Governance
Members of the Board of Directors
Information on members of the Board of Directors
GRI 2-11
Xavier Rolet
Chairman of the Board of Directors at PhosAgro, independent director from 2018
to 10 March 2022
Year of election: 2018
Equity interest / Stake of ordinary shares: None
Date of birth: 12.11.1959
Andrey G. Guryev
Deputy Chairman of the Board of Directors at PhosAgro, non-executive director
from 2013 to 10 March 2022
Year of election: 2013
Equity interest / Stake of ordinary shares: None
Date of birth: 24.03.1960
Professional experience
Education
Professional experience
Education
2021 — Pr. Greater Yellowstone Coalition,
Member of the Board of Directors
2018–2019 Verseon, Independent non-
executive director
KEDGE Business School (France),
Master’s degree in Management Science and
Finance
2018 — Pr.
AgroGard-Finance, Chairman of the
Board of Directors
St Petersburg Mining University,
Degree in Economics and Management
of Mining and Exploration Enterprises
2021 — Pr. World Quantum Growth
Acquisition Corporation, Chairman of the
Board of Directors and CEO
2020 — Pr. Shore Capital Markets, Non-
executive chairman
2020 — Pr. TowerBrook Capital Partners L.P.,
Member of the Advisory Board
2020 — Pr. Golden Falcon Special Acquisition
Corporation, Independent non-executive
director
2020 — 2021 Seplat Petroleum Development
Company Plc., Independent non-executive
director
2019 — 2022 PhosAgro, Member of the Risk
Management Committee
2019 — Pr. The Public Investment Fund
(Saudi Stock Exchange – TADAWUL), Member
of the Board of Directors
2019–2020 CQS Management LTD., Chief
Executive Officer
2018–2019 PhosAgro, Chairman of the Risk
Management Committee
2017 — Pr. Grayling Centennial LLC,
Managing Partner
2017–2020 goAfrica, Angel investor
Columbia Business School (USA),
MBA in International Finance
Institute for Higher National Defence Studies
(IHEDN) (France), Post-graduate degree
2017–2019 UK Department for International
Trade, Member of the Committee of Experts
Titles of honour and awards
2017–2018 London Stock Exchange Group
(LSEG), Advisor.
2014–2017 The Governor of the Bank of
England’s Financial Services Forum, Member
2013–2017 HM Treasury, Advisor
2011–2014 The European Securities and
Markets Authority (ESMA), Member of the
Securities and Markets Stakeholder Group
2011 — Pr. Columbia Business School,
Member of the Board of Overseers
2011 — Pr. Ranchlands, Member of the Board
of Advisors
In 2016, he was made a Knight of the National
Order of the Legion of Honour by François
Hollande, President of France.
In 2015, he was appointed an Honorary Knight
Commander of the Most Excellent Order of
the British Empire (KBE) by Her Majesty Queen
Elizabeth II.
He was also awarded the Order of Friendship
of the Russian Federation and was made an
Officer of Morocco’s Royal Sharifian Order of
Al-Alaoui.
2018 — Pr. Shanghai Institute of Finance for
the Real Economy – SIFRE, Expert Advisor
2011 — Pr. PEACCEL, Angel investor
2018–2022 PhosAgro, Chairman of the Board
of Directors
2009–2017 London Stock Exchange Group
(LSEG), CEO
Key competencies
> Strategy
> Finance and audit
> Risk management
> Law and corporate governance
> Chemistry and mining engineering
2017–2018
AgroGard-Finance, Member of the
Board of Directors
Central State Institute for Physical
Education, Degree in Physical Culture
and Sports
2013 — 2022 PhosAgro, Deputy
Chairman of the Board of Directors,
Member of the Strategy Committee
2006 — Pr. Russian Chemists Union,
Vice President
Titles of honour and awards
He was awarded the Order of Merit to
the Fatherland, 4th class, the Order of
Honour, the Order of Alexander Nevsky,
the Certificate of Merit of the President
of the Russian Federation, the Certificate
of Merit of the Federation Council of
the Russian Federation, the Orders of
the Russian Orthodox Church and the
Miner’s Glory badges of all three classes.
He also received a Letter of
Acknowledgement from the
Government of the Russian Federation.
He is an honorary citizen of the cities of
Kirovsk and Cherepovets.
Key competencies
> Strategy
> Chemistry and mining engineering
> Human resources
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222
223
Corporate Governance
Sven Ombudstvedt
Member of the Board of Directors at PhosAgro, independent director
Year of election: 2011
Equity interest / Stake of ordinary shares: 0.00103%
Date of birth: 27.07.1966
Professional experience
2019 — Pr. Norske Skog ASA, CEO
2018 – Pr. Norske Skog Norway Holding AS,
Member of the Board of Directors
2011–2019 PhosAgro, Chairman of the
Board of Directors
2010–2017 Norske Skogindustrier ASA,
CEO
2017–2019 Norske Skog AS, Chairman of the
Board of Directors
Education
2017–2017 Norske Skogindustrier ASA,
Special Advisor
2011 – Pr. PhosAgro, Member of the
Audit Committee, Chairman of the
Strategy Committee, Chairman of the Risk
Management Committee
Pacific Lutheran University (USA),
Bachelor’s degree
Thunderbird School of Global
Management, Master’s degree
in International Management
Key competencies
> Strategy
> Finance and audit
> Chemistry and mining engineering
> Risk management
Marcus Rhodes
Member of the Board of Directors at PhosAgro, independent director
Year of election: 2011
Equity interest / Stake of ordinary shares: 0.000644%
Date of birth: 31.05.1961
Professional experience
2021 — Pr. Segezha Group, Member of the
Board of Directors
2021— Pr. T Plus, Member of the Board of
Directors, Chairman of the Audit Committee
2018–2019 Rustranscom Plc, Non-executive
director, Chairman of the Audit Committee
2014 — Pr. QIWI Group (QIWI plc), Member of
the Board of Directors, Chairman of the Audit
Committee
2011 — Pr. PhosAgro, Member of the
Board of Directors, Chairman of the Audit
Committee
2014–2017 Zoltav Resources Inc., Member
ofthe Board of Directors, Chairman of the
Audit Committee
Titles of honour and awards
2017–2019 SIA Enterprises Limited, Honorary
Treasurer
Education
Loughborough University (UK), Bachelor’s
degree in Economics and History of
Economics
The Institute of Chartered Accountants
in England and Wales, Qualified as chartered
accountant
Key competencies
> Corporate governance
> Finance and audit
Irina Bokova
Member of the Board of Directors at PhosAgro, independent director from
2018 to 15 March 2022
Year of election: 2018
Equity interest / Stake of ordinary shares: None
Date of birth: 12.07.1952
2018 — Pr. Ban Ki-moon Centre for
Global Citizens, Member of the Board of
Directors
Key competencies
2017 — Pr. Royal Commission for AlUla,
Member of the Advisory Board
> Environment, health and safety
> Human resources
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2012 — Pr. Council of the UN Sustainable
Development Solutions Network (SDSN),
Member of the Leadership Council
2009–2017 UNESCO, Director-General
Education
Moscow State Institute of International
Relations (Russia), Degree in
International Relations
John F. Kennedy School of Government
at Harvard University (USA), Leadership
and Economic Development
Titles of honour and awards
She received state honours from several
countries.
Received an honorary doctorate from
a number of research and educational
organisations, including MGIMO
University, the Russian Academy of
Sciences and Moscow State University.
Professional experience
2021 — Pr. Edelman Global Advisory,
Member of the Advisory Board
2021 — Pr. Commission for Global
Scientific Missions for Sustainability
established by the International
Science Council (ICS), Co-chair
2021 — Pr. International Advisory
Board of the Geneva-Tsinghua
Initiative (GTI), Chair
2021 — Pr. The Board of Governors
of the UN University of Peace,
Costa Rica, Member of the Board of
Directors
2020 — Pr. FIA Foundation, Member
of the Board of Directors
2018 — Pr. Federation Internationale
de l’Automobile, Member of the
Board of Directors
2018 — 2022 PhosAgro, Member
of the Board of Directors, Member
of the Remuneration and Human
Resources Committee, Chair of
the Sustainable Development
Committee
224
225
Corporate Governance
Natalia Pashkevich
Member of the Board of Directors at PhosAgro, independent director
Year of election: 2017
Equity interest / Stake of ordinary shares: None
Date of birth: 05.11.1939
James Rogers
Member of the Board of Directors at PhosAgro, independent director
Year of election: 2014
Equity interest / Stake of ordinary shares: 0.0064%
Date of birth: 19.10.1942
Professional experience
Education
Professional experience
Education
2021 — Pr. Priority 2030 Strategic Academic
Leadership Programme, Head of the
programme
St Petersburg Mining University, Degree in
Mining Engineering and Economics, PhD in
Economics, professor
Key competencies
> Chemistry and mining engineering
> Human resources
2017 — Pr. PhosAgro, Member of the Board
of Directors, Member of the Environmental,
Health and Safety Committee
Titles of honour and awards
> Order of Honour
2009 — Pr. National Research University,
Head of the development programme
> Honoured Worker of Higher Education of
the Russian Federation
1999 — Pr. St Petersburg Mining University,
First Vice Rector
> Veteran of Labour medal
> Labour Glory badge, 2nd and 3rd class
> Miner’s Glory badge, 3rd class
> Honorary Worker of the Gas Industry
> Award of the Government of St Petersburg
> Medal of the Ministry of Defence of the
Russian Federation
> Distinguished Employee of St Petersburg
Mining University
> Honorary Doctor of the Ch’an-Chun
Geological University (China)
> Full member of the Russian Academy of
Natural Sciences
> Full member of the International Academy
of Ecology and Security
> Full member of the Russian Academy of
Mining Sciences.
2019 — Pr. ENPlus Co Ltd, External
director
2019 — Pr. Spanish Mountain Gold
Limited, Advisor
2014 — Pr. PhosAgro, Member of the
Board of Directors, Chairman of the
Remuneration and Human Resources
Committee, Member of the Audit
Committee
2018 — Pr. Ananti Inc, Director
2014 — Pr. Genagro Limited, Advisor
Yale University (USA), Bachelor’s
degree
Balliol College, University of Oxford
(UK), Bachelor’s / master’s degree in
Philosophy, Politics and Economics
2018–2021 Sirius International
Insurance Group, Ltd, Member of the
Board of Directors
2018–2019 Ocean Capital Advisors
LLC, Director
2014–2019 Sinofortune Financial
Holdings Limited, Non-executive director
2013–2018 Laguna Bay Pastoral
Company Pty Ltd, Advisor
2012 — Pr. Santiago Gold Fund, Advisor
Key competencies
> Finance and audit
> Human resources
> Risk management
> Law and corporate governance
2018–2019 Quantum Digital Asset
Management Pte Ltd, Member of the
Board of Directors
2012 — Pr. Geo Energy Resources
Limited, Non-executive director
2017 — Pr. AgroGard-Finance,
Member of the Board of Directors
2012–2019 Spanish Mountain Gold
Limited, Director
2017–2018 Agritrade Resources Ltd,
Advisor
2011 — Pr. Forbes & Manhattan, Advisor
2017–2018 ITF Corporation, Advisor
2007 — Pr. Beeland Holdings Pte Ltd,
Director
2017–2018 Global Blockchain
Technologies Corp, Advisor
2007 — Pr. Beeland Enterprises, Inc.,
Director
2016 — Pr. Duff & Phelps Select
Energy MLP Fund Inc., Director
1990 — Pr. Beeland Interests, Inc.,
Director
2016 — Pr. Virtus Global Multi-
Sector Income Fund, Trustee
1988–2019 Virtus Global Dividend &
Income Fund Inc., Director
2016–2018 Crusader Resources
Limited, Non-executive director
1986 — Pr. Virtus Total Return Fund Inc.,
Director
2015–2017 Latitude Technologies
Limited, Senior Advisor
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226
227
Corporate Governance Andrey Sharonov
Member of the Board of Directors at PhosAgro, independent director
Year of election: 2017
Equity interest / Stake of ordinary shares: None
Date of birth: 11.02.1964
Andrey A. Guryev
Member of the Board of Directors, CEO and
Chairman of the Management Board at PhosAgro from 2013 to 10 March 2022
Year of election: 2013
Equity interest / Stake of ordinary shares: 0.048%
Date of birth: 07.03.1982
Titles of honour and awards
Professional experience
Education
Professional experience
2022 — Pr. ESG Alliance, CEO
2021 — Pr. Sberbank, Vice President
2021 — Pr. Foundation for Development
of the Centre for Elaboration and
Commercialisation of New Technologies
(Skolkovo Foundation), Member of the Board
of Directors
2020 — Pr. Foundation for Development
of the Centre for Elaboration and
Commercialisation of New Technologies
(Skolkovo Foundation), Chairman of the
Human Resources and Compensation
Committee
2019 — Pr. En+ Group, Independent non-
executive director, Member of the Audit
Committee, Chairman of the Corporate
Governance and Nominations Committee
2020 — Pr. Rosseti, Member of the Board of
Directors (independent director), Member of
the Personnel and Remuneration Committee
2016–2021 Moscow School of Management
SKOLKOVO, President
2015–2018 VTB Bank, Member of the
Supervisory Council
2015–2017 Rosgeologia, Member of the
Board of Directors
2014 — Pr. International Business Leaders
Forum, Member of the Board of Trustees
2014 — Pr. MC NefteTransService, Chairman
of the Board of Directors
2014 — Pr. Sovcomflot, Independent
director, Member of the Strategy Committee
2014–2019 NOVATEK, Independent director,
Chairman of the Audit Committee, Member
of the Remuneration and Nomination
Committee
2009–2020 National Research University
Higher School of Economics, Professor (part-
time) at the School of Finance of the Faculty
of Economic Sciences
2018 — Pr. Medicina, Chairman of the Board
of Directors
Education
He was awarded Aristos Award in the
Independent Director category (2009); Special
Award for Merit in Managerial Education
(2016), Director of the Year National Award
in the Independent Director category (2009),
and the International Award “Person of the
Year” in the Business Reputation category
(2012).
He received a special award “Contribution
to the Development of the Institution of
Independent Directors” in 2016 by the
Independent Directors Association and
the Russian Union of Industrialists and
Entrepreneurs.
He was awarded the Order of Honour.
He received Commendations of the President
of the Russian Federation.
He is an Honoured Economist of the Russian
Federation.
Ufa Aviation Institute, Degree in Aviation
Instrument Making
Russian Academy of Public Administration
under the President of the Russian
Federation, Degree in Law, PhD in Sociology
Moscow School of Management Skolkovo,
Executive Coaching for the Development
of Executives, Top Management Teams and
Organisations
Key competencies
> Law and corporate governance
> Finance and audit
> Human resources
2017 — Pr. Sovcomflot, Chairman of
the Audit Committee, Member of the
Compensation Committee
2017 — Pr. PhosAgro, Member of the
Board of Directors, Member of the Audit
Committee, Member of the Remuneration
and Human Resources Committee, Member
of the Sustainable Development Committee
2016 — Pr. SKOLKOVO Endowment Fund,
Director
2016 — Pr. Association for the Development
of Moscow School of Management
SKOLKOVO, Executive Director
2020 — Pr. The Coordinating
Council of the Russian Union of
Industrialists and Entrepreneurs on
Combating COVID-19, Chairman of
the Council
2015 — Pr. Russian-Argentine Business
Dialogue of the Russian Union of
Industrialists and Entrepreneurs (RUIE)
and the Argentine Industrial Union (UIA),
Co-chair from the Russian side
2019 — Pr. Russian Union of
Industrialists and Entrepreneurs,
Member of the Management Board
Bureau
2019 — Pr. The Russia–Brazil
Business Council, Chairman of the
Council
2017 — Pr. The Russia–Argentina
Council of Entrepreneurs at the
Russian Chamber of Commerce,
Chairman of the Council
2016 — Pr. Russian Association of
Fertilizer Producers, President
2016 — Pr. Miners of Russia non-
commercial partnership, Deputy
Chairman of the Supreme Mining
Council
2016 — Pr. Russian Rhythmic
Gymnastics Federation, Chairman of
the Board of Trustees, Vice President
2015 — Pr. Russian Union of
Industrialists and Entrepreneurs,
Member of the Management Board
2015 — Pr. Russian Olympians
Foundation, Member of the Council of
Trustees
2014 — Pr. International Fertilizer
Association (IFA), Member of the Board of
Directors
2014 — Pr. Russian Chess Federation,
Member of the Board of Trustees
2013 — 2022 PhosAgro, CEO, Chairman
of the Management Board, Member
of the Strategy Committee, Member
of the Environmental, Health and
Safety Committee, Member of the Risk
Management Committee
2013 — 2022 PhosAgro, Member of the
Board of Directors
2012 — Pr.
PhosAgro-Region, Member of the
Management Board
2012 — Pr. Andrey Guryev Charitable
Foundation, Chairman of the
Management Board
2011 — Pr. Moscow Rhythmic
Gymnastics Federation, President
University of Greenwich (UK),
Bachelor’s degree in Economics
Academy of National Economy
under the Government of the
Russian Federation
St Petersburg Mining University,
PhD in Economics
Titles of honour and awards
In 2021, he was awarded the Order of
Merit to the Fatherland, 2nd class, and
the Order of Pirogov for considerable
contribution to organising efforts to
provide medical care and to prevent
the spread of COVID-19.
In 2022, he was awarded the Order
of Rio Branco, 4th class, for his
contribution to the development of
bilateral relations between Russia and
Brazil.
Key competencies
> Strategy
> Finance and audit
> Chemistry and mining engineering
> Environment, health and safety
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Corporate Governance Mikhail Rybnikov
Member of the Management Board, Member of the Board of Directors
and Deputy CEO at PhosAgro until 10 March 2022, CEO and Chairman
of the Management Board at PhosAgro from 11 March 2022
Year of election: 2016
Equity interest / Stake of ordinary shares: 0.0258%
Date of birth: 30.11.1975
Corporate Secretary
The Corporate Secretary is responsible
for day-to-day interactions with
the shareholders, coordination of
the Company’s efforts to protect
shareholder rights and interests,
and support provided to the Board
of Directors to ensure its efficient
performance. The Corporate Secretary
is appointed by the Board of Directors.
The operating procedures of the
Corporate Secretary are governed
by the Regulation on the Corporate
Secretary approved by the Board of
Directors.
Regulation on the Corporate
Secretary
Professional experience
2022 — Pr. PhosAgro, CEO
2016 — Pr. PhosAgro, Member of the Board
of Directors
Lomonosov Moscow State University,
Master’s degree in Economics
Education
2021 — 2022 PhosAgro, Deputy CEO
2021 — Pr. PhosAgro, Executive Director
2016 — Pr. PhosAgro-Region, Member of the
Management Board
2018 — Pr. Samoilov Scientific Research
Institute for Fertilizers and Insectofungicides,
Member of the Board of Directors
2015–2017 PhosAgro-Cherepovets, CEO,
Chairman of the Management Board
2018 — Pr. Apatit, Advisor to the CEO (part-
time)
2018–2020 PhosAgro, First Deputy CEO
2013 — Pr. PhosAgro, Member of the
Management Board, Chairman of the
Environmental, Health and Safety Committee,
Member of the Strategy Committee, Member
of the Sustainable Development Committee.
2018–2019 Apatit, Member of the
Management Board
2013–2018 PhosAgro, Executive Director
(part-time)
2017–2018 Apatit, CEO, Chairman of the
Management Board
Key competencies
> Strategy
> Finance and audit
> Chemistry and mining engineering
> Environment, health and safety
Sergey Samosyuk
Year of election: 2016
Date of birth: 01.10.1976
Professional experience
Education
Achievements
2021 — Pr. AgroGard-Finance,
Member of the Board of Directors
2021 — Pr. Giproruda, Member of
the Board of Directors
2017 — Pr. Apatit, Advisor to the
CEO
2016 — Pr. PhosAgro, Corporate
Secretary
St Petersburg State University of
Economics, Degree in Engineering and
Economics
St Petersburg University, Degree
in Law
National Research University Higher
School of Economics, Executive MBA.
2020 Director of the Year National
Award for the best corporate
governance directors / corporate
secretaries.
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231
Corporate Governance
The committees of the Board
of Directors are advisory and
consultative bodies made up
of the current Board members with
relevant experience and expertise
in committees’ specific focus areas.
The committees can also engage
external experts and consultants
in their work. The primary role of
the committees is the preliminary
consideration of key issues submitted
for review by the Company’s Board
of Directors.
The committees are responsible for
making sure that issues brought
before the Board have been
sufficiently reviewed as a way to
enable the directors to cast their
votes based on full and accurate
information. To achieve this,
committee members maintain an
ongoing dialogue with the Company’s
executive bodies, other senior
executives, external auditor and other
advisors on the issues falling within
their remit.
At its first meeting on 28 May 2021
the newly elected Board of Directors
established the committees without
any changes to their composition
given the high assessment of their
performance in the 2020–2021
corporate year.
Committees
of the Board
of Directors
Committee reports
Audit Committee
The Audit Committee of PhosAgro’s
Board of Directors is a key advisory and
consultative body of the Board responsible
for such critical tasks as assessing
the reliability and transparency of the
Company’s IFRS consolidated financial
statements, reviewing and overseeing
financial reporting processes, interacting
with the external auditor, overseeing
compliance with relevant laws and
regulations and managing and directing the
internal audit function.
Since 2018, the Committee’s has
consisted of independent directors only.
The Committee’s activities are governed by
the Regulation on the Audit Committee.
Regulation on the Audit
Committee
6meetings
were held in 2021
Committee members:
Marcus
Rhodes
Committee Chairman,
independent director
Sven
Ombudstvedt
Committee member,
independent director
James
Rogers
Andrey
Sharonov
Committee member,
independent director
Committee member,
independent director
The Committee’s statistics
5 5 26
5 5 27
5 5 26
5 5 27
6 35
6 35
6
6
2021
2020
2019
2021
2020
2019
Meetings
Meetings
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(in person)
via video
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via video
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Internal audit and control were another
central focus area in the reporting year.
The Internal Audit Policy of PhosAgro was
reviewed following the Bank of Russia’s
recommendations for the arrangement of
risk management, internal control, internal
audit, and activities of the audit committee
of the board of directors (supervisory board)
in public joint-stock companies. As a result
of the review, no significant changes were
made. We also assessed the Company’s
internal control and internal audit systems
with the assistance of KPMG who concluded
that they were well developed, robust and
effective. The work plan for the Internal
Audit Department was discussed and
approved and we carried out a thorough
assessment of its performance.
We certainly could not ignore the growing
interest of investors and other stakeholders
in the non-financial aspects of business. In
2021, we completed a detailed analysis of
non-financial disclosure trends, including the
development of uniform principles for non-
financial disclosures and the alignment and
integration of various reporting standards.
Also during the reporting year,
the Committee met twice to discuss
the concept of an Audit and Assurance
Key highlights in 2021
The quality, reliability and timeliness of
financial and non-financial corporate
reporting is a top priority for the investment
community and other stakeholders.
We undertake consistent efforts to ensure
that you receive the most complete and
trustworthy information on a wide scope
of PhosAgro’s operations. In 2021, as part
of this work, in addition to our standard
responsibilities (please see the Ongoing
Tasks below), we drafted a policy on the
selection of external auditors and the
principles for building relationships with
them which was approved by the Board of
Directors. This policy sets out the grounds
and procedures for selecting the external
auditor, maximum duration of services,
rules for rotating the audit partner, and the
maximum proportion of non-audit service
fees paid to the incumbent auditor.
policy. After much debate, it was
decided that this was not appropriate
to introduce at this time and that
we would revisit the concept
in December 2022.
Finally, the Audit Committee
initiated the development
of PhosAgro’s draft tax strategy.
The draft will be discussed
at the next audit committee meeting
and will be presented to the Board
of Directors in the first half
of 2022.
> review of the quarterly IFRS
External auditor
condensed consolidated financial
statements, along with ensuring
the adequacy of disclosures;
> review and discussion
of the results of the annual audit
and quarterly reviews by the
external auditor;
> review of the external auditor plan
for the 2021 audit;
> review and discussion of the results
of the work of Internal Audit;
The Committee’s approach
to the assessment of the
independence and effectiveness
of the external audit process, as
well as to the appointment or
reappointment of the external
auditor is comprehensively described
in the External Auditor Selection and
Cooperation Policy of PJSC PhosAgro
approved by the Company’s Board
of Directors in April 2021.
Ongoing tasks in 2021
During the reporting period, the Audit
Committee held six meetings, where
35 matters were considered, mainly
in the following areas:
> analysis of the Company’s
compliance with Russian and
European legislation on the
protection and use of insider
information;
> analysis, review and discussion
> analysis of the Company’s
of the Company’s annual
financial performance based
on the IFRS consolidated financial
statements, including reasons
for changes as compared
to the previous periods and
obtaining a clear understanding
of the disclosures;
corporate governance compliance
with the Russian CGC and the UK
Corporate Governance Code;
> discussion with legal and tax
department heads about ongoing
issues that may have an impact
on the IFRS financial statements.
Marcus Rhodes
Audit Committee Chairman
PhosAgro’s External
Auditor Selection and
Cooperation Policy
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Corporate Governance
Remuneration and
Human Resources
Committee
According to the Regulations on the Remuneration and
Human Resources Committee .
Regulations on the
Remuneration and
Human Resources
Committee
4 meetings
were held in 2021
Committee members:
James
Rogers
Irina
Bokova
Committee Chairman,
independent director
Committee member,
independent director
Andrey
Sharonov
Committee member,
independent director
The Committee’s statistics
4 4 15
5 5 14
4 4 15
4 16
5 5 14
4 16
4
4
2021
2020
2019
2021
2020
2019
Meetings
Meetings
Including
in person /
(in person)
via video
Matters
Including
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Matters
a prerequisite and the only guarantee
of career growth, and we are happy that
the Company’s management shares this
belief.
At the same time, at the Committee’s
initiative and as part of the efforts to
implement best ESG practices, the
Board of Directors approved a new
version of the Personnel Management
Policy, which was supplemented with
a number of recommendations from
the International Bill of Human Rights
and the UN Guiding Principles on
Business and Human Rights, along with
regulations on work and rest hours and
labour disputes.
Ongoing tasks in 2021
We also stayed focused on regular
matters:
> assessment of professional skills,
independence, engagement and
important external nominations
or appointments to the Board of
Directors;
> best practice guidance and analysis
following the appraisal of the Board
of Directors’ performance;
> performance assessment of the
Company’s executive bodies, other
key employees, and the Corporate
Secretary;
> assessment of social and employee
training programmes, including the
progress towards a sustainability
target approved in the Strategy to
2025 – the number of employee
training hours;
> review of the outcomes following the
annual staff loyalty and satisfaction
survey, including progress towards
a sustainability target approved in
the Strategy to 2025 – integrated
employee loyalty index.
Key highlights in 2021
In the reporting year, taking into
account the results of the Committee’s
self-appraisal, its members focused on
the following matters:
> succession planning for the Board
of Directors, executive bodies and
other key employees, including
implementation of the committee’s
earlier recommendations to
develop a succession plan for N-1
executives;
> review of all internal regulations of
the Company related to the incentive
system. The existing management
incentive system, which relies on
key performance indicators (KPIs)
correlated with strategic targets,
made another step forward in 2021,
covering as many as 280 people from
N to N-3 levels. A notable part of
this growth came from the extended
scope of KPIs linked to the Company’s
sustainability targets. The Committee
confirmed that the existing
remuneration framework is efficient
and in line with the Company’s
requirements
For more information on the
remuneration of the Company’s key
employees, see the Management
remuneration section on page 262.
In April 2021, the Committee added
oversight over securing diversity, gender
equality and inclusion to its goals and
objectives set forth in the Regulations
on the Remuneration and Human
Resources Committee. We are confident
that our people’s professionalism,
consistently strong performance and
adherence to corporate values are
Two times a year, when initially assessing nominations
to the Board of Directors and subsequently when finalising
its composition, the Committee decides which reasons should
disqualify members from serving on it.
While preparing the shareholder information for
the annual general meeting, the Committee, among other
factors, analysed the effect of the below appointments
of independent directors on their ability to duly discharge their
responsibilities as the Company’s Board members:
Xavier Rolet: Shanghai Institute of Finance for the Real
Economy — SIFRE, The Public Investment Fund, Saudi Stock
Exchange TADAWUL, Shore Capital Markets, TowerBrook
Capital Partners L.P., Golden Falcon Special Acquisition
Corporation, World Quantum Growth Acquisition Corporation
Sven Ombudstvedt: Norske Skog ASA, Norske Skog Norway
Holding AS
James Rogers: Virtus Total Return Fund Inc, Beeland Interests
Inc., Santiago Gold Fund, Genagro Limited, Duff & Phelps
Select Energy MLP Fund Inc., AgroGard-Finance, Spanish
Mountain Gold Limited, ENPlus Co Ltd, etc.
Andrey Sharonov: Sberbank, Sovcomflot, Rosseti, En+ Group
Plc, Medicina, etc.
Natalia Pashkevich: St. Petersburg Mining University
Irina Bokova: Ban Ki-moon Centre for Global Citizens,
Federation Internationale de l’Automobile, FIA Foundation
The Committee found that in the reporting year the above
external appointments did not prevent the Board members
from duly discharging their responsibilities, while also
maximising their contribution to the Company’s growth.
Environmental,
Health and Safety
Committee
GRI 2-16
The Committee is governed by the Regulations on the
Environmental, Health and Safety Committee.
Regulations
on the Environmental, Health
and Safety Committee
of the Board of Directors
2 meetings
were held in 2021
Committee members:
Mikhail
Rybnikov
Committee Chairman,
executive director
Andrey A.
Guryev
Committee member,
executive director
Natalia
Pashkevich
Committee member,
independent director
The Committee’s statistics
3 3 17
2 2 13
3 3 17
2 14
2 2 13
2 14
2
2
2021
2020
2019
2021
2020
2019
Meetings
Meetings
Including
in person /
(in person)
via video
Matters
Including
in person /
via video
Matters
James Rogers
Chairman of the Remuneration
and Human Resources Committee
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Corporate Governance
also designed comprehensive biodiversity
protection programmes for its Cherepovets
and Volkhov sites.
The main goals and tasks in these
areas were:
Strategy Committee
GRI 2-16
he Committee’s activities are governed
by the Regulations on the Strategy Committee.
> monitoring compliance with HSE laws
and progress in reducing negative climate
impact from the Group’s production
activities;
> assessing environmental, social,
technological, climate and industrial risks
associated with the Group’s production
activities;
> reviewing investigation records on
industrial accidents and incidents,
environmental laws violation, and breach
of climate impact regulations;
> considering proposals on working
conditions improvement, safety
regulations compliance and injury
frequency rate reduction, as well as
on the reduction of greenhouse gas
emissions and pollutant discharges, waste
generation and disposal, and increase in
energy efficiency;
> analysing the progress on programmes
and initiatives to introduce resource and
energy efficiency solutions and eco-
efficient technologies.
The reporting year saw the Regulations on
Committee amended to add climate change
issues to the Committee functions. As part
of its new powers, the Committee oversees
progress against the Company’s low-carbon
transition plan.
In the reporting year, the landmark
event was the certification of the quality
management system, the certification of
the environmental management system at
all the four production sites of the Group
for compliance with ISO 9001 and ISO
14001, and the certification of the health
and safety management system at the
Cherepovets site for compliance with ISO
45001.
Apatit saw its first certification under GMP+
B4 for affreightment of rail transport in feed
supplies (feed grade urea and monocalcium
phosphate).
We made excellent progress in improving
energy efficiency. In 2021, similarly to the
last few years, consumption rates for all
major energy resources showed a steady
decline.
The Committee continued monitoring the
Energy Efficiency Programme. Approved in
2020, it covers all our projects and initiatives
designed to reduce energy consumption.
We also remained focused on regulatory
compliance, reviewing, among others, draft
laws, which are yet to be considered and
approved.
Ongoing tasks in 2021
In the reporting year, the Committee held
two meetings and discussed 14 matters.
The Committee oversaw three Company’s
workstreams:
> health and safety;
> environmental protection;
> energy efficiency.
Mikhail Rybnikov
Chairman of the Environmental,
Health and fety Committee
Key highlights in 2021
The most important results in 2021 include
a decrease in the number of severe injuries,
a decrease in the number of incidents, no
breakdowns, fires and traffic accidents
with injuries or major damage. We were
deeply saddened by the fatality involving
a contractor’s employee which occurred
in December 2021 at our Volkhov branch.
The investigation is underway. We will
thoroughly analyse the circumstances of the
fatality and communicate conclusions and
recommendations on preventive measures
will be communicated to the management
and employees of the facility and contractors.
This tragedy once again highlights the
importance of the efforts taken by the Board
of Directors and the management to enhance
industrial safety.
The most frequent violations were of fire
safety requirements along with safety
rules for vehicle operation and electrical
works. We paid special attention to the
safety of contractor activities, at all stages
of interaction with the counterparties,
from selecting a contractor and work
preparations to overseeing their activities
and completing work.
Among the significant safety projects
initiated by the Committee in 2021, we would
like to note the three-year Safety Culture
Transformation Project seeking to achieve
the safety culture level of 3.1 as per the
Bradley curve, and the initiative to improve
the safety of high-risk operations.
In terms of environmental protection, the
reporting period saw positive changes
in unit pollutant emissions, unit waste
water discharges and waste recycling rate.
We take consistent efforts to reduce the
environmental impact and achieve the
desired environmental effect. The Company
Regulations on the Strategy
Committee
Key highlights in 2021
2 meetings
were held in 2021
Committee members:
Sven
Ombudstvedt
Committee Chairman,
independent director
The Strategy Committee focused on monitoring the
progress towards the 2025 goals approved in 2019.
According to a resolution of the Board of Directors, control
over compliance of the current activities with the approved
strategy is carried out at least twice a year by reviewing the
monitoring results, as well as in the course of the Board of
Director’ review of the Company’s annual budgets. At both
meetings the Committee checked production volumes, sales
in priority markets, and expansion of sales and transport
infrastructure against the Strategy. Another innovation
for the Committee was the mandatory monitoring of the
approved ESG indicators, including the first-ever monitoring
of indicators under the climate and water strategies
approved in December 2020.
Andrey G.
Guryev
Committee member, non-
executive director
The 2021 results show that we are well on our way to the
2025 goals.
Andrey A.
Guryev
Committee member,
executive director
Mikhail
Rybnikov
Committee member,
executive director
The Committee’s statistics
2 2 3
2 2 4
2 2 3
2 2 4
2 4
2 4
2
2
2021
2020
2019
2021
2020
2019
Meetings
Meetings
Including
in person /
(in person)
via video
Matters
Including
in person /
via video
Matters
We expect the production of phosphate rock to exceed the
approved target level of 11 mt in 2025. In the reporting year,
we completed the majority of construction operations, and
in Q1 2022 we commissioned the 1st start-up facilities at
level 10 of the Kirovsk mine. In a few years, the amount of
ore mined at this facility will be just under 9 mtpa, which is
almost a quarter of our total production. The total reserves
of the horizon are estimated at 95 mt of ore.
In the reporting year, we managed to achieve another
essential strategic goal ahead of schedule as we met the
2025 target for internal phosphate rock processing (8.4 mt),
with the corresponding increase in mineral fertilizer
production, in particular thanks to the ambitious Volkhov
site development project, which had been completed, and
the upgrade programme currently underway in Balakovo.
We expect PhosAgro Group to maintain its target sales share
in premium markets, although we allow for minor deviations
due to changes in market conditions and adherence to the
best netback strategy.
In 2021, the Group achieved interim targets in such
indicators as the number of distribution and logistics
centres, and storage capacity for solid and liquid mineral
fertilizers. We believe that the 2025 goals will also be
successfully achieved in this important area, reflecting our
commitment to be closer to the consumer.
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In addition, the Committee
focused on monitoring the
progress of the investment
projects underlying PhosAgro
Group’s organic growth in the
current strategic cycle, together
with development of new projects
that will ensure the further
dynamic evolution of the Group.
Our strategy cannot be static,
we are developing, the external
economic environment is
changing. In 2021, we began
developing an updated strategy
to 2025 and further to 2030,
and I am sure that in 2022 we
will be able to present it to our
stakeholders.
Ongoing tasks in 2021
In 2021, the Strategy Committee
held two meetings, focusing on
the following matters alongside
those mentioned above:
> the implementation status of
the Company’s Development
Strategy to 2025;
> key target indicators and sales
development models by market
group;
> key areas of logistics
development;
> future projects (assessment
of prospects, preliminary
calculation of the new products
efficiency).
Sven Ombudstvedt
Chairman of the Strategy Committee
Risk Management Committee
GRI 2-16
The Committee’s activities are governed by
the Regulations on the Risk Management
Committee.
Sustainable Development Committee
GRI 2-16
Regulations on the Risk
Management Committee
The Committee’s activities are governed by the Regulations
on the Sustainable Development Committee.
Regulations on the Sustainable
Development Committee
The Committee’s statistics
4 4 10
3 3 8
4 4 10
3 3 8
4 9
4 9
4
4
Committee members:
Sven
Ombudstvedt
Committee
Chairman,
independent director
Xavier Rolet
Committee member,
independent director
Andrey A.
Guryev
Committee member,
executive director
Meetings
Meetings
Including
in person /
(in person)
via video
2020
Matters
Including
in person /
via video
2020
2021
2019
2019
2021
2020
2019
2021
2020
2019
Matters
2021
Committee members:
Irina
Bokova
Andrey
Sharonov
Mikhail
Rybnikov
Committee Chairman,
independent director
Committee member,
independent director
Committee member,
executive director
The Committee’s statistics
2 2 9
3 3 10
2 2 9
3 3 10
4 18
4 18
4
4
Meetings
Meetings
Including
in person /
(in person)
via video
Matters
Including
in person /
via video
2019
2020
2019
2021
2020
2021
2020
2019
2021
2020
2019
Matters
2021
Key highlights in 2021
One of the key updates to PhosAgro risk
map was the integration of the climate-
related risk. Thus, climate risk management
has become an integral part of the
Company’s risk management system.
Climate risks were considered in the context
of physical and transition (regulatory)
factors, taking into account rapidly
changing conditions and requirements in
this domain. In 2022, the Committee will
keep a close watch for the use of a risk-
oriented approach while implementing
PhosAgro’s Climate Strategy.
The 2021 independent assessment once
again showed that PhosAgro generally
complies with the relevant industry’s best
practices and is even ahead of its peers in
some areas.
As in the previous year, the Company
continued to monitor the risk of the
new coronavirus infection. The waves of
COVID-19 had its toll on practically all
our operations. Nevertheless, the steps
taken by the Group helped prevent the
suspension of production operations and
avoid disruptions to business processes. In
addition, in 2021, the Committee regularly
reviewed key cybersecurity metrics as well
as the status of measures to develop it.
With effective cybersecurity tools in place,
PhosAgro Group did not record any material
incidents in this area in 2021.
The key risks were reviewed in conjunction
with the Company strategy to assess their
negative impact on the Company’s strategic
goals.
On top of that, the Committee took part in
developing Board of Directors competencies
in risk management by organising a training
workshop in 2021.
Ongoing tasks in 2021
The Committee held four meetings in 2021
focusing on the following matters alongside
those mentioned above:
> results of a reassessment of the
Company’s key risks and updating its risk
map for 2021.
> evaluation of the Company’s risk
management and internal control system.
Sven Ombudstvedt
Chairman of the Risk Management Committee
Decisions are made by the project
steering committee, which convenes
on a monthly basis. The Committee
coordinates and oversees the project.
The project covers all risks associated with
the climate agenda, both physical and
regulatory. However, due to the potentially
serious impact on PhosAgro Group’s
business, carbon border adjustment
mechanism was subject to a separate
review in December 2021. The Committee
also reviewed the opportunities presented
by the climate agenda, including the
analysis of peer strategies.
2. In 2020, at the Committee’s
recommendation, the Company
developed an action plan to improve
the Company’s ESG ratings, and the
Committee reviews appropriate reports at
each meeting. We consider this practice
to be effective in terms of developing and
prioritising organisational and technical
sustainability measures, and intend to
maintain this approach going forward. We
are pleased that PhosAgro has managed
to significantly improve its position in
the most reputable international ratings
and are looking forward to further steady
progress in this area.
in which sustainability-related goals are
adopted and monitored. In particular,
the Committee received relevant
reports on innovation management,
procurement, and international projects.
Ongoing tasks in 2021
At each of its four meetings,
the Committee focused on the following
matters alongside those mentioned above:
> controlling compliance with applicable
statutory requirements and internal
sustainability objectives;
> preparing recommendations
to the Board of Directors on
determining the Company’s strategic
sustainable development objectives;
> reviewing sustainable development
reports;
> supervising PhosAgro’s sustainable
development disclosure;
> analysing PhosAgro’s practices
and bylaws in terms of compliance
with sustainable development
rating requirements and managing
efforts to maintain and improve
the Company’s rating positions.
3. An important innovation
in the Committee’s work in 2021 was
the expansion of the functional areas
Irina Bokova
Chairman of the Sustainable Development
Committee from 2019 to 15 March 2022
Key highlights in 2021
In 2021, the Committee held four
meetings and reviewed 18 matters,
thereby significantly expanding its
remit:
1. As the Board of Directors approved
the Climate Strategy in December
2020 and the low-carbon transition
plan was put into action, one of the
Committee’s key roles in the reporting
year was to monitor the activities
specified in these documents.
All the workstreams related to
PhosAgro Group’s climate agenda
were united into a dedicated project
of Apatit’s Project Execution and
Management Department. The
project working group includes
representatives from all the Group’s
key functions, including procurement,
production, energy, economics, sales,
promising technology development,
environment, personnel and social
policy, and IT – a total of 25 people.
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239
Corporate Governance
Executive
Bodies
As at 31 December 2021, the Management Board was composed of:
Andrey A. Guryev
CEO
Siroj Loikov
Deputy CEO
Alexander Seleznev
Сhief of Staff
for the CEO
Alexei Sirotenko
Deputy CEO
for Corporate
and Legal Affairs
и правовым вопросам
Number of Management
Board meetings
Matters considered
12
12
10
8
8
6
4
4
4
In charge of PhosAgro’s day-to-
day operations are two executive
bodies accountable to the Board
of Directors:
the collegial body
(Management Board) and
the sole executive body
(CEO).
In 2021, the Management Board
held five meetings and reviewed
10 items most of which were
related to the budget discipline.
In November 2021, the
approved number of
Management Board members
was
7
unchanged from the end
of 2020
2019
2020
2021
2019
2020
2021
2019
2020
2021
Revision and approval of PhosAgro’s quarterly and annual budgets
Review of operating and financial reports
Mikhail Rybnikov
Deputy CEO
Sergey Pronin
First Deputy CEO
and Managing Director
of PhosAgro
Alexander Sharabaiko
Deputy CEO for Finance
and International Projects
At least twice a year (after the end of the previous calendar
year and after a new Management Board is elected) the CEO
submits a report on the performance of PhosAgro’s executive
bodies to the Board of Directors for review and approval.
We ensure that the executive management focuses on
PhosAgro’s strategy and long-term sustainable business
development for the benefit of our shareholders and other
stakeholders by linking executive remuneration to the
Company’s goals and values, as well as ESG KPIs.
For more information, see page 262.
Changes in the Management Board
composition
The following changes to the Management Board took
place in 2021. Roman Osipov was not appointed to the new
Management Board approved by the Board of Directors
on 3 November 2021 due to his retirement from PhosAgro,
and Sergey Pronin, First Deputy CEO and Managing Director
of PhosAgro, joined the Management Board.
Roman Osipov
Business Development Director
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241
Corporate Governance
Information on members of the Management Board
Andrey A. Guryev
Member of the Board of Directors, CEO and Chairman of the Management Board
at PhosAgro from 2013 to 10 March 2022
Year of election: 2013
Equity interest / Stake of ordinary shares: 0.048%
Date of birth: 07.03.1982
Mikhail Rybnikov
Member of the Management Board, Member of the Board of Directors and Deputy CEO
at PhosAgro until 10 March 2022, CEO and Chairman of the Management Board
at PhosAgro from 11 March 2022
Year of election: 2016
Equity interest / Stake of ordinary shares: 0.0258%
Date of birth: 30.11.1975
Andrey A. Guryev detailed biography on page 229.
Mikhail Rybnikov detailed biography on page 230.
Alexander Seleznev
Member of the Management Board, Сhief of Staff of PhosAgro
Year of election: 2019
Equity interest / Stake of ordinary shares: None
Date of birth: 06.07.1984
Professional experience
Education
2019 – Pr. PhosAgro, Chief of Staff for the
CEO, Member of the Management Board
in 2015–2019, Head of IR
Bauman Moscow State Technical University,
Information Security
Key competencies
> Finance and audit
Siroj Loikov
Member of the Management Board, First Deputy CEO of PhosAgro
Year of election: 2013
Equity interest / Stake of ordinary shares: None
Date of birth: 09.09.1972
2015–2018 PhosAgro, Human
Resources and Social Policy Director
2015–2018 Korporativnoe pitanie
(Corporate Nutrition), Member of the
Board of Directors
Key competencies
> HR management
2015–2017 PhosAgro-Cherepovets,
Human Resources and Social Policy
Director, Member of the Management
Board
2013 — Pr. PhosAgro, Member of the
Management Board
2013–2017 Izumrud, Member of the
Board of Directors
Professional experience
2020 — Pr. PhosAgro, First Deputy
CEO
2020 — Pr. Apatit, Advisor to the
CEO (part-time)
2018–2020 PhosAgro, Deputy CEO
2018–2020 Apatit, Deputy CEO
(part-time)
2018–2019 PhosAgro-Region,
Deputy CEO for Human Resources
(part-time)
2017–2018 Tirvas, Member of the
Board of Directors
Education
2017–2018 Apatit, Human
Resources and Social Policy Director
2017–2018 Apatit, Member of the
Management Board
Tashkent State University of
Economics, International Economic
Relations
Nottingham University Business
School (UK), Bachelor’s degree in
Business Management
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243
Corporate Governance Roman Osipov
Member of the Management Board until October 2021
Year of election: 2017
Equity interest / Stake of ordinary shares: None
Date of birth: 04.11.1971
Alexei Sirotenko
Member of the Management Board, Deputy CEO of PhosAgro for Corporate and Legal
Affairs, Legal Affairs Director at Apatit
Year of election: 2013
Equity interest / Stake of ordinary shares: None
Date of birth: 03.01.1969
Professional experience
2018–2021 Apatit, Advisor to the CEO
(part-time)
2013–2021 PhosAgro, Business
Development Director
2013–2021 AgroGard-Finance, Member of
the Board of Directors
2018–2019 Apatit, Member of the
Management Board
Education
2017–2021 PhosAgro, Member of the
Management Board
2014–2021 Giproruda, Member of the Board
of Directors
Baltic State Technical University, Master’s
degree from the LETI-Lovanium International
School of Management
Key competencies
> Strategy
> Chemistry and mining engineering
Professional experience
2017 — Pr. Apatit, Legal Affairs
Director
2013 — Pr. PhosAgro, Member of the
Management Board
2010 — Pr. PhosAgro, Deputy CEO for
Corporate and Legal Affairs (part-time).
2017–2019 Apatit, Member of the
Management Board
Education
2015–2017 PhosAgro-Cherepovets,
Legal Affairs Director, Member of the
Management Board
Lomonosov Moscow State University,
Jurisprudence
Key competencies
> Law and corporate governance
Sergey Pronin
Member of the Management Board, First Deputy CEO, Managing Director of PhosAgro
Year of election: 2021
Equity interest / Stake of ordinary shares: None
Date of birth: 10.05.1964
Alexander Sharabaiko
Member of the Management Board, Deputy CEO for Finance and International
Projects of PhosAgro
Year of election: 2018
Equity interest / Stake of ordinary shares: None
Date of birth: 25.02.1977
Professional experience
Education
2021 — Pr. PhosAgro, First Deputy CEO and
Managing Director
Moscow Kuybyshev Construction
Engineering University, Industrial and Civil
Construction, PhD in Economics
2019 — Pr. PhosAgro-Region, Advisor to the
CEO (part-time)
Titles of honour and awards
2017 — Pr. Apatit, Deputy CEO for Sales and
Logistics
2017–2021 PhosAgro, Deputy CEO for Sales
and Logistics
2012 — Pr. PhosAgro-Region, Member of the
Management Board
2012–2017 PhosAgro-Region, CEO,
Chairman of the Management Board
Hе has been awarded the Medal
in Commemoration of the 850th
Anniversary of Moscow, the Zhukov
Medal, gold and silver medal “For
Contributions to the Development of the
Agro-Industrial Complex of Russia”. Prize-
winner of the Peter Stolypin National
Prize and prize-winner of the Highest
Russian Public Award of the Russian
Federation in foodstuff production “For
the Abundance and Prosperity of Russia”.
Key competencies
> Strategy
> Chemistry and mining engineering
Professional experience
2019 — Pr. PhosAgro, Deputy
CEO for Finance and International
Projects
2018 — Pr. PhosAgro, Member of
the Management Board
2017 — Pr. Apatit, Advisor to the
CEO (part-time)
2017–2019 Apatit, Member of the
Management Board
2017–2018 PhosAgro, Member of
the Board of Directors
2015 — Pr. PhosAgro-Region, Member of
the Management Board
Education
2015–2017 PhosAgro-Cherepovets,
Advisor to the CEO (part-time), Member
of the Management Board
2014–2019 PhosAgro, Director for
Economic Affairs and Finance
2013–2017 PhosAgro, Member of the
Management Board
Belarus State Economic University,
Finance and Credit
University of Nottingham (UK), Bachelor’s
degree in Business Management
Key competencies
> Finance and audit
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245
Corporate Governance Corporate
Controls
Risk governance and internal control
Organisational structure of the risk management
and internal control framework
GRI 2-12
Review
Committee
Audit
Committee
Board
of Directors
Risk Management
Committee
The risk management and internal control framework
is a set of organisational measures, methods, practices
and standards of corporate culture. It also embraces
actions taken by the Company to strike the right
balance between value growth, profitability and risks,
support financial sustainability, and ensure efficient
operations, protection of its assets, compliance with
the laws and bylaws, along with timely and accurate
reporting.
The Board of Directors defines the key principles
of, and approaches to, risk management and internal
controls, oversees the Company’s executive bodies,
and performs other key functions. The Board’s Risk
Management Committee provides recommendations
to the Board of Directors on identifying material
risks and developing relevant management tools
and measures to enhance the risk management
framework. The Board’s Audit Committee focuses on
assessing and making proposals to improve the risk
management and internal control efficiency. On top
of that, its members supervise the preparation of
accounting (financial) statements and the measures
taken to prevent fraudulent behaviour of the
Company’s employees or third parties.
The Review Committee elected by the General
Shareholders’ Meeting exercises control over the
financial and business operations of the Company.
The executive bodies establish and maintain
an efficient risk management and internal
control framework. To this effect, they have set
up a Risk Commission that monitors the status
and effectiveness of risk management initiatives.
The monitoring results serve as a basis for the relevant
proposals issued by the Commission to executive
bodies and the Board of Directors.
Following the audits, the Internal Audit Department
provides the Board of Directors and executive bodies
with recommendations and reports, including, among
other things, the assessment of the current status,
reliability and efficiency of the corporate governance,
risk management and internal control framework.
The Risk Management and Internal Control
Department is charged with the general supervision
of risk management, including related activities, and
consolidated reporting to the Board of Directors and
executive bodies.
As part of their duties, heads of other organisational
units are responsible for building, documenting,
implementing, monitoring and developing the risk
management and internal control framework in their
respective functional areas. The framework requires the
Company’s employees to identify and assess relevant
risks and efficiently implement the controls and risk
management initiatives.
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For more information on key roles and
other relevant information, see the Risk
Management and Internal Control Policy
Chief Executive
Officer
Executive bodies
Risk management
Internal
Audit
Department
Risk Management
and Internal Control
Department
Other structural
departments
administrative reporting line
functional reporting line
In 2021, PhosAgro’s risk management and internal
control framework performed strongly thanks to
timely identification and assessment of risks, as
well as development and implementation of risk
management measures. On a quarterly basis,
the Board of Directors reviewed reports on the
management of the Company’s key risks. PhosAgro’s
executives paid special attention to managing
these key risks. The Risk Commission continuously
monitored the status of risk management activities
and, when necessary, initiated changes to improve
those related to key risks.
246
247
Corporate Governance The audits were followed by
proposals to update the logistics
strategy, streamline the approach to
project management and improve
cooperation between business units.
The management developed and
approved corrective action plans, with
the progress monitored by the Internal
Audit Department.
The 2022 audit plan covers audits
of the procurement and inventory
management business processes, IT
audit of the automated process control
system, review of the IT strategy
alignment and audit of ESG targets.
External assessment
In 2021, PwC completed an external
assessment of the IAD’s compliance
with the International Standards for
the Professional Practice of Internal
Auditing and the Institute of Internal
Auditors’ Code of Ethics. The IAD
earned high scores in the assessment
for being generally compliant with
all the applicable standards and
requirements. According to PwC, its
level of organisational and process
maturity is above the average among
similar functions in the mineral
fertilizer and other industries. We plan
to organise external assessments once
every three years in the future.
Development of the risk
management and internal control
framework in 2021
The Company is making a consistent
effort to develop its risk management and
internal control framework. In 2021, the
Board of Directors reviewed the results
of the framework’s independent external
assessment, which showed that it was on par
with those adopted by the industry’s leading
companies, including:
> compliance with applicable regulatory
requirements,
> adoption of most of the leading risk
management practices such as alignment
with the Company’s development strategy,
risk appetite, key risk indicators, automation
and robotisation in risk management, as well
as integration into the Company’s incentive
system and governance framework.
The reporting year saw both the production
sites and PhosAgro Group as a whole complete
a full-year cycle of risk management and internal
control, including:
> ongoing risk monitoring;
> analysis of key risk indicators;
Review Committee
The General Shareholders’ Meeting held in
May 2021 elected the following members
to the Review Committee:
> Lusine Agabekyan;
> Ekaterina Viktorova;
> Olga Lizunova.
Internal audit
PhosAgro’s Internal Audit Department
(IAD) assists the Company’s top
executives and the Board of Directors in
improving the management of business
processes and enhancing the internal
control and risk management framework.
In doing this, it uses a risk-oriented
approach and works closely with the
Risk Management, Internal Control and
Economic Security Departments, and the
Company management.
Internal audit goals, objectives and
powers are outlined in the Internal
Audit Policy as approved by the
Board of Directors on 18 May 20211.
The Committee endorsed PhosAgro’s
financial statements for 2021, with its
report dated 21 February 2022 included
in the materials for the shareholders
to prepare for the Annual General
Shareholders’ Meeting.
The Company’s internal audit procedure
is set out in the Internal Audit Guidelines.
In 2021, the Audit Committee and the
Board of Directors drafted and reviewed
internal audit strategic goals. We are
consistently working to improve the
maturity of the Company’s internal
audit function in line with the plan,
as well as to develop and diversify the
competencies of our internal audit team.
The internal audit quality is assured
through regular external independent
assessments and self-assessment.
> development of corrective actions;
Audits
External audit
A key element of the Audit Committee’s
operations is ongoing interaction with
external auditors and development
of recommendations for the Board of
Directors regarding the choice and
approval of auditors. When selecting
an auditor, we evaluate the following
factors in addition to the cost of their
services:
> composition of the audit team
(in terms of experience and
qualifications), which should ensure
that the statements are audited
within acceptable deadlines and with
adequate quality;
> follow-up control and review.
5
20
6
16
4
16
Internal Audit Policy
> the auditor’s independence evaluated
In 2021, PhosAgro Group also continued
rearranging a number of risks in different focus
areas such as climate action, occupational
health and safety, and information and
cybersecurity.
Plans for 2022
PhosAgro Group looks to maintain and
further develop the existing elements of its
risk management framework based on the
best practices, while also taking into account
the changing external and internal factors.
For information on key risks and risk
management, see the Strategic Report section
on page 68.
Scheduled
Unscheduled
2019
2020
2021
Audit of business processes
The audit plan for the calendar year is
subject to review, discussion and approval
by the Audit Committee and the Board
of Directors. Audits are performed at
the Group level, as well as at specific
subsidiaries and their standalone business
units. In addition, the Internal Audit
Department monitors the effectiveness
and efficiency of corrective actions taken
by the management following the audit,
and reports to the Audit Committee on
a quarterly basis and to the Board of
Directors annually.
In 2021, the Internal Audit Department
fully met the annual action plan. The audits
covered PhosAgro Group’s business
processes related to logistics, including all
types of feedstock and finished products
transportation, project management,
insiders and inside information, as well as IT
audit of production facilities.
based on a variety of factors,
including assessment of the scope
of non-audit services provided to us
by the candidate company during
the relevant periods. Each offer from
the current auditor for non-audit
services requires confirmation by
the audit partner to make sure there
is no risk to independence and is
submitted to the Company’s Audit
Committee for consideration and
approval. The Committee consents
to the contract only if the scope of
the non-audit services does not call
into question the ability to perform
the audit service independently
and impartially. The Committee’s
assessment of the auditor’s
independence is also significantly
influenced by the auditor’s internal
procedures for controlling the
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The Company engaged FBK (44/1
Myasnitskaya St., Bld. 2AB, Moscow,
Russia) to audit its 2021 RAS
accounting statements.
The committee approach to assessing
external audit’s independence and
efficiency, as well as appointment and
re-appointment of the external auditor
is set out in the External Auditor
Selection and Cooperation Policy of
PhosAgro as approved by the Board of
Directors on 14 April 20212.
For more information on the auditors,
their selection procedure and
independence, see the Company’s
quarterly reports3, as well as the
respective section of this report that
discusses the Audit Committee’s
activities.
impartiality and professional ethics
of the auditor’s staff, including
requirements for periodic rotation
of the audit partner, training
arranged in this area and the use of
specialised software to perform the
respective audits;
> balance between the benefits of
long-term cooperation with the
auditor and the need for a fresh
look at the Company’s financial
statements and preparation
procedures;
> the auditor’s performance over the
previous period. The Committee may
form its opinion on the quality of the
external auditor’s work during in-
person Committee meetings, where
the external auditor’s mandatory
participants are a manager and the
partner, as well as during meetings
between the audit team and the
Chairman of the Audit Committee
held prior to the Committee
meetings.
PhosAgro’s auditor performs the audit
of its financial and business operations
in compliance with Russian laws and
regulations and the agreement signed
with the Company. The auditor is
approved by the Company’s General
Shareholders’ Meeting. The Company
engaged AO PricewaterhouseCoopers
Audit (10 Butyrsky Val, Moscow,
Russia) to audit its 2021 IFRS financial
statements.
PhosAgro’s External Auditor
Selection and Cooperation
Policy
For more information on
the auditors, their selection
procedure and independence,
see the Company’s quarterly
reports
248
249
Corporate Governance Inside information
Information security
PJSC PhosAgro has adopted an Inside
Information Regulation compliant with
the Russian laws and the EU Market Abuse
Regulation (MAR).
In accordance with its provisions, the
Corporate Secretary’s office keeps a list of
insiders, persons discharging managerial
responsibilities (PDMR) and persons closely
associated with them (PCA). The Regulation
defines the scope of responsibilities for
each insider group, which the Corporate
Secretary’s office from time to time
communicates to respective persons.
First and foremost, these include the
limitations on the use of inside information
and trading in the Company’s securities.
Depending on the group, an insider may be
prohibited from such transactions or obliged
to notify the Company or obtain its consent for
such transactions. Every quarter, the Corporate
Secretary’s office checks the list of shareholders
to identify transactions that may have been
executed in breach of such limitations.
In 2021, the Board of Directors approved
a revised version of the Inside Information
Regulation following the enactment in April
2021 of the updated version of the Bank
of Russia Instruction No. 5326-U dated
21 November 2019 On the List of Inside
Information of Legal Entities Specified in Clause
1, 3, 4, 11 and 12 of Article 4 of the Federal Law
No. 224-FZ On Combating Inside Information
Unlawful Use and Market Manipulation, and
Amendments to Certain Laws of the Russian
Federation dated 27 July 2010.
In accordance with the above change in the
regulatory requirements, PhosAgro approved
by CEO’s order a new list of inside information
(List) comprising the list of inside information
introduced by the Bank of Russia Instruction
and the list of inside information outlined
by PhosAgro with regard to the nature of its
operations in line with the Federal Law No.
224-FZ dated 27 July 2010.
The key changes in the list of inside
information mainly covered the disclosure of
the Board of Directors’ resolutions and the
procedure and timelines for disclosing inside
information.
The List’s alignment with the applicable
laws and regulations led to the following
amendments to the Inside Information
Regulation:
> removal of the List from the Inside
Information Regulation due to the need
to further amend it in autumn 2021 (in
accordance with the regulation registered
with the Russian Ministry of Justice and
coming into effect on 1 October 2021),
> addition of a clause regarding the approval
of the procedure and timelines for
disclosing inside information identified by
PhosAgro with regard to the nature of its
operations and not included in the list of
inside information specified in the Bank of
Russia Instruction.
The audit conducted by the IAD in 2021
identified no material violations of the
applicable laws and the Inside Information
Regulation. The audit results were reviewed
by the Audit Committee and the Board of
Directors. For the full text of the Regulation
on Inside Information, please visit our
website.
The Information Security Policy is the
Company’s fundamental document defining
the general provisions and principles for
ensuring information security. The Information
Security Policy applicable to all PhosAgro
Group companies and approved by the Board
of Directors was first adopted in 2021. Its
adoption ensues from the risks and hazards
faced by the Group companies in their
operations and the respective need to respond
to the hazards and minimise the risks.
The Policy states high priority of
information security activities and sets up
its key principles. They cover the target
setting and planning of information
security activities, as well as their
implementation, quality management
and process improvement. The above
principles define the contents of the lower-
level documents such as the Information
Security Framework and other bylaws
covering respective issues. This set of
documents reflects modern solutions and
best practices in information security.
Every employee of the Internal Audit
Department is responsible for ensuring
information security. To this end, the Group
regularly holds events to raise employees’
awareness of information security issues and
develop practical skills to deal with modern
threats. This, together with the use of
modern information security tools and well-
coordinated work of the department, helped
avoid information security incidents in 2021
and in previous periods that could have
caused tangible material or reputational
damage. In 2021, an independent
assessment of PhosAgro Group’s information
security function was conducted by one of
the world’s leading expert companies.
The function’s main strengths, as per
the assessment, were methodological
and documentation support, annual
information security tests, the use of
tools to protect against various types of
information security threats. The areas
for improvement included access control
and asset management processes, event
monitoring and handling of information
security incidents. Creating safe conditions
for software development and ensuring
information security in third-party
interactions (supply chain security) were
suggested for development.
Based on the results of the above
assessment, a description of the target
state and a respective roadmap were also
prepared by one of the world’s leading
expert companies. The proposed measures
were included in the 2022–2023 action
plans; information security issues are
submitted for consideration by the Board of
Directors every six months.
1 For the full text of the Regulation
on Inside Information, please visit
our website
2 List of insider information
3 The Information Security Policy
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250
251
Corporate Governance Ethical
Practices
Values, principles,
standards, and norms
of behaviour
GRI 2-23, 2-24, 2-26
PhosAgro Group has a well-deserved
reputation of a reliable business partner,
attractive employer, responsible taxpayer,
and partner to the Russian government
and regions where the Company operates.
The trust that our investors, employees,
customers, contractors and authorities place
in us is underpinned by the high ethical
standards that we have adhered to since
PhosAgro’s inception.
We take an integrated approach to business
ethics; in other words, we believe that
ethical considerations are intrinsic to all
aspects of our operations, from procurement
and teamwork to safety and trade. We
systematically analyse risks in this area and
develop and implement measures to manage
them.
PhosAgro Group is a large company: we
operate in 70 regions of Russia, supply our
products to more than 100 countries, employ
over 17,000 people, and have thousands of
contractors and counterparties. This means
that we deal with potential ethical issues on a
daily basis, and our managers and employees
have to be comprehensively trained to make
ethically sound decisions that meet the
highest standards of integrity.
To achieve the above, we need to ensure
that our ethical principles and standards
are clearly defined and communicated to
employees and counterparties. We also
need to have relevant legal, organisational
and informational mechanisms in place to
support and, more importantly, monitor
compliance with these principles and
standards, which should also be overseen at
the highest corporate governance level.
By consistently implementing this approach
for years, PhosAgro Group was able to
become a company operating to the highest
global standards in human rights, industrial
safety, environmental protection, anti-
corruption, etc. We recognise that it is hardly
possible to fully eliminate ethical risks in a
large and diverse organisation that has an
almost global presence. We believe that
by adhering to our ethical principles and
standards we minimise unnecessary risks,
maintain our business reputation and keep
ourselves on track to achieve our ambitious
production and financial targets for the
benefit of PhosAgro’s shareholders and other
stakeholders.
Ethical standards and
norms of behaviour
The principles and standards of ethical
behaviour when working at and with
PhosAgro Group are set out in relevant
policies and other internal documents,
which are listed below. These are regulatory
documents all the Group’s heads,
officers and employees must comply
with. Employees who have violated them
are subject to the respective sanctions,
including social condemnation, public
censure through publication in the media,
full or partial withholding of bonuses, and –
if the employee’s action (omission) bears
signs of a disciplinary offence – disciplinary
measures also apply to such employee
pursuant to the applicable labour and
employment laws.
The following internal policies and procedures governing the compliance of PhosAgro with the key principles and
standards of ethical conduct are currently in effect
Code of Ethics
The Code outlines the key principles and
rules of ethical business conduct underlying
the corporate culture of PhosAgro
Corporate Governance Code
The Code defines the main principles of and
approaches to corporate governance
Code of Conduct for Counterparties
The Company may refuse to cooperate with
suppliers or business partners discriminating
their own or subcontractors’ employees or
using forced labour
Anti-Corruption Policy
The Policy defines the goals and objectives
and sets forth the Company’s key principles
and employee responsibilities in the sphere of
anti-fraud and anti-corruption
Regulations on Conflict of Interest
The Regulations establish the procedure for
identifying and resolving conflicts of interest
arising with employees in the course of their
employment
Procurement Policy of Apatit
The Policy defines the goals and
responsibilities and sets forth the key
principles and employee scope of functions in
the sphere of procurement
Modern Slavery Act Transparency Statement
The Act outlines the Company’s actions
to prevent all forms of modern slavery and
human trafficking within PhosAgro and its
supply chain
Regulations on the Commission for
Combating Fraud and Corruption and
Regulating Conflicts of Interest
The Regulations address and govern the
issues pertaining to employee anti-corruption
compliance
Regulations on Internal Checks
Regulations on Inspections
The Regulations govern a set of actions
taken to elicit the facts and identify the
circumstances, motives and conditions of
misconduct, incidents, and other violations of
requirements set out in the Group’s internal
documents
PhosAgro Hotline Regulations
The Terms set out the goals and objectives
with regard to the receipt of employee reports
on the matters pertaining to combating
fraud, corruption and theft and identifying
conflicts of interest
Regulations on Business Presents and
Representation Expenses
The Regulations set out the procedure
for receiving presents by the Company’s
employees, as well as making them on behalf
of the Company. The Regulations substantiate
and detail the formation, structure, and
documentation of representation expenses
Government Relations Policy
The Policy establishes the principles,
areas, purpose and objectives of PhosAgro
interaction with public authorities and
officials
Сharity Policy
The Policy sets out the key principles and
areas for providing charitable support on
behalf of and through the funds of the
Company
Personnel Management Policy
The Policy sets forth the Company’s and its
management’s adherence to high ethical
standards of transparent and fair business
aimed at building the image of an employer
attractive for the best professionals
Regulations to Ensure Compliance with Anti-
Corruption Laws as Part of Legal Support
Process
The Regulations outline goals and objectives
for legal support of the Company’s business
processes and transactions involving a high
risk of corruption
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Antitrust measures
The Company has approved two trade policies: for the
sale of phosphate rock (Apatit’s Marketing Policy for
Domestic Sales of Phosphate Rock and for the sale
of certain fertilizer grades to agricultural producers
(Apatit’s Trade Policy for Selling Mineral Fertilizers
to Agricultural Producers). Both documents were
designed to comply with antitrust laws and to mitigate
risks associated with anti-competitive behaviour.
Apatit’s Marketing
Policy for Domestic
Sales of Phosphate
Rock and for the sale
of certain fertilizer
grades to agricultural
producers
Apatit’s Trade
Policy for
Selling Mineral
Fertilizers
to Agricultural
Producers
252
253
Corporate Governance
Communication and training about anti-
corruption policies and procedures
Informing, advising,
and training employees
Organisational
and informational
mechanisms
PhosAgro Group has a well-thought-out set
of tools in place to ensure that the Group’s
employees and counterparties are kept
abreast of and trained in ethical business
practices and that cases of potentially
unethical and corrupt behaviour are
effectively reported to authorised officers
and business units.
Training methodology
205-2
PhosAgro Group offers ongoing training
programmes to educate employees on anti-
corruption in order to minimise the risk
of their involvement in corrupt practices.
To this end, the Group has put in place
a robust training system to prevent any
and all corrupt practices, mitigate possible
harm, and eliminate the consequences
thereof.
To train and inform employees, PhosAgro
Group annually develops anti-corruption
courses with final tests, which are
posted on the corporate intranet portal.
The themes of the courses depend on the
functions (responsibilities) of business units
(employees) and the established system of
anti-corruption standards.
Target audience
Training results
> Human Rights and Code of Ethics
Completed training programmes
2019
Managers of levels N-1, N-2, N-3,
N-4, N-5, as well as managers without
assigned levels (as stipulated by the
organisational and staff structure
of the Group), white-collar workers,
including employees of branches and
other standalone business units
Upon completion of the anti-
corruption training, a student should
have an understanding of the theory
of counteracting corruption in the
Group; factors, causes, essence and
consequences of corruption; Russian
anti-corruption laws and regulations,
as well as anti-corruption standards
adopted in the Group; responsibility
for failure to comply with anti-
corruption practices
Goals and objectives
Provide students with updated
information on laws and regulations
on detecting and combating
corruption in business entities.
Help students develop an anti-
corruption attitude, learn about
methods of combating corruption
and conflicts of interests and
master relevant skills. Help students
acquire knowledge of the causes
and preconditions for corruption
and practices of identifying and
counteracting such cases
Benefits of online training
Educational materials (presentations,
tests) accurately reflect the current
issues of corruption at PhosAgro Group
companies. The training process does
not disrupt core business activities
2020
> Preventing and Resolving Conflict of
Interest
> Main Goals and Principles of the PhosAgro
Group Code of Ethics
2021
> Principles of the PhosAgro Hotline
> PhosAgro Group Anti-Corruption Policy
> The test results were used to monitor the
training process and served as a basis for
issuing an order on additional training for
students who have demonstrated poor
performance
To implement anti-corruption
measures, the Economic Security
Department approves an annual
training plan, according to which
employees are informed from time
to time about existing internal
regulations on anti-corruption, anti-
corruption standards, responsibility
for failure to comply with them, as
well as amendments and additions
thereto. The Group’s management
serves as the key communication
channel to emphasise the importance
of compliance with the established
anti-corruption measures. PhosAgro
Group’s employees and counterparties
have free and easy access to
information about the Group’s anti-
corruption practices. PhosAgro
Group’s official website features
a special section on anti-corruption,
which contains CEO’s message
about the need to strictly comply
with established anti-corruption
standards, as well as copies of internal
documents aimed at preventing
corruption (the Anti-Corruption
Policy, Code of Ethics, Regulations on
Conflict of Interest and on PhosAgro’s
Hotline). Internal documents are
supplemented by methodological
materials (handouts, presentations),
which explain in easy terms the
anti-corruption policy, standards
of conduct, responsibility, and
provide examples of corruption-
prone situations that employees
may encounter in the course of their
employment.
above. Employees’ job descriptions
stipulate their obligation to comply
with anti-corruption standards
and PhosAgro Group’s internal
regulations, as well as to receive
respective training. When employees
perform functions involving a high
risk of corruption, those responsible
for the implementation of the
Anti-Corruption Policy additionally
explain to them the Russian laws and
PhosAgro Group’s internal policies on
anti-corruption.
Every new employee receives training
on the basic requirements of the Anti-
Fraud and Anti-Corruption Policy,
the Code of Ethics, Regulations on
Conflict of Interest and on PhosAgro’s
Hotline by watching a respective
video and putting their signature
in briefing log to confirm the
88.2%
Share of employees trained in anti-
fraud, anti-corruption, and conflict
of interest issues (as part of online
learning courses)
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Training of PhosAgro employees in anti-fraud, anti-corruption, and conflict of interest issues
(as part of online learning courses)
7,891
8,691
6,524
4,388
5,441
5,752
1,053
1,143
1,328
3,335
4,298
4,424
55.61
62.6
88.2
Total number
of employees to be
trained
Total number
of employees
trained
Executives
White-collar
workers
Share of employees
trained, %
2021
2020
2019
254
255
Corporate Governance
Reports received by PhosAgro’s Hotline by category in 2019 – 2021
Total reports received by PhosAgro’s
Hotline
Reports related to corruption
126
134
119
0
2
3
PhosAgro’s
Hotline
GRI 205
To improve the timeliness and effectiveness
of measures aimed at preventing
ethical violations, including corruption,
discrimination, human rights violations,
etc., PhosAgro Group created the PhosAgro
Hotline portal.
Any employee or other stakeholder can use
PhosAgro’s Hotline to report any potential
violations detrimental to the Company’s
interests, while the Company may not
disclose the identity of the whistle-blower to
other employees and third parties.
Reports received by PhosAgro’s Hotline
by category in 2019 – 2021
Non-discrimination policy and human
rights
GRI 2-23
2019 2020 2021
2019 2020 2021
We are committed to keeping our
working environment free from
restrictions based on nationality,
gender, age, faith or other grounds
as required by the applicable
laws. At PhosAgro Group, any
decisions regarding promotion,
hiring, remuneration or benefits
are based solely on the employee’s
qualifications, performance, skills and
experience.
In 2021, the Board of Directors
and the Remuneration and Human
Resources Committee paid special
attention to human rights focusing
on diversity and equality of genders.
The discussion led to the key
conclusion that every employee who
works dutifully and has professional
skills and competencies may apply for
any position within PhosAgro Group,
including in an executive role.
PhosAgro’s Internal Audit Department
reports on a quarterly basis to the Audit
Committee on all reports received by
the PhosAgro Hotline, actions taken,
the results of audits and measures to
address violations of PhosAgro Group’s
ethical standards. The Chairman
of the Audit Committee provides
this information to members of the
Company’s Board of Directors.
119
Total reports received
by PhosAgro’s Hotline
Over the past three years,
including the reporting
period, there have been
no employee reports or
complaints about violations
of labour practices, human
rights, or discrimination.
For more information on PhosAgro Group’s non-
discrimination policy and human rights, see the
People Development section on page 122 and 156.
Tools to notify the relevant PhosAgro Group’s executives
of any instances of misconduct and corrupt practices
GRI 2-25, 2-26
PhosAgro Group’s employees and members of the Company’s
Board of Directors who have become aware of any actual or poten-
tial violation of law or PhosAgro Group’s internal documents are
obliged to give a prompt notice of the same in writing.
This shall apply to any inducement to corruption and any viola-
tions showing signs of corruption, including those targeted at
other employees, counterparties or other parties interacting with
the Group
The procedures for reporting and consideration of violation re-
ports are defined in the Anti-Corruption Policy, the Code of Ethics,
the Regulations on Conflict of Interest, and the anti-corruption
agreement, as well as in notifications/recommendations sent in
accordance with Apatit’s Order No. 16-U On Improving the Pro-
cedure for Informing Management of Apatit, its Subsidiaries and
Affiliates dated 15 January 2020
A person who has submitted the above notice/report is guaran-
teed confidentiality of the information received, as well as such
person’s personal data. PhosAgro Group assumes measures to
protect the employee who has notified the employer of any actual
or potential violation of law and PhosAgro Group’s internal docu-
ments that poses a threat to the Group companies’ interests
The Code of Ethics states that each Company employee, if they
have any questions relating to anti-corruption compliance or any
concerns as to the rightness of their actions or the actions of other
Company employees, counterparties, or other parties interact-
ing with the Company, may seek advice or assistance from their
immediate supervisors or, if need be, the relevant business units of
the Company
The Hotline operates to improve the efficiency of measures taken
to prevent fraud, corruption, theft, and conflict of interest, as
well as mitigate the compliance and reputational risks resulting
from violation of professional and ethical standards by PhosAgro
Group’s employees. There are three ways to report to the Hotline:
> by phone at +8 8202 59 32 32,
> e-mail at help@ phosagro.ru
> regular mail to the following address: the Economic Security
Department, 75 Severnoye Highway, Cherepovets, Vologda
Region, 162622, Russia.
To ensure free access to the Company’s Hotline, all existing
communication channels are posted on the corporate website
126
134
119
2
4
15
11
30
66
2
2
5
32
20
30
41
3
3
3
16
25
16
53
2019
2020
2021
Other
External fraud
HSE
Violations of law and tender procedures
Internal fraud
Reputational risk
Conflicts of interest
Corruption (Code of Ethics)
Anti-corruption
205-1
We consider it unacceptable for
PhosAgro Group’s executives and
employees at all levels to take
advantage of their official position in
a way that is in conflict with corporate
or national interests. To prevent fraud
and corruption, PhosAgro has put
in place its Anti-Corruption Policy
together with a system covering 100%
of its activities and a commission
on fraud, corruption, and conflicts
of interest. The Company seeks to
identify and assess corruption risks
on a regular basis to keep track of
functions and positions exposed to
such risks. PhosAgro’s management
regularly reviews reports on the
progress of anti-corruption initiatives
and the performance of the anti-fraud
and anti-corruption system.
In addition, we make an ongoing effort
to build a culture of zero tolerance
to corruption underpinned by high
ethical standards, as well as maintain
an atmosphere of trust, mutual respect
and integrity among employees.
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Corporate Governance
PhosAgro Group’s participation in collective efforts to combat
corruption
205-2
The Company’s anti-corruption policy is
implemented in accordance with applicable
anti-corruption laws and international
conventions (including the UN Convention
against Corruption and Russian anti-
corruption laws). To prevent and combat
corruption, PhosAgro Group cooperates
with business communities and participates
in public associations, which is seen as
a guarantee of compliance with Article 13.3
of Federal Law No. 273-FZ On Combating
Corruption dated 25 December 2008:
The Anti-Corruption Charter of the
Russian Business adopted by the RSPP.
As part of self-assessment of special anti-
corruption programmes and practices
implemented by the Company and
covering not only internal activities, but
also relations with business partners and
the state, procurement through public
auctions, financial control, staff training
and development, cooperation with law
enforcement agencies, PhosAgro Group
regularly completes surveys using the portal
of the Chamber of Commerce and Industry
of Russia;
The Social Charter of the Russian
Business adopted by the RSPP. Having
joined the Social Charter of the Russian
Business, PhosAgro formalised the
responsible approach it takes to ESG and its
commitment to best practices in corporate
social responsibility;
The Anti-Fraud Working Group of
the Russian Association of Fertilizer
Producers (RAFP), which has developed
initiatives to combat wrongdoings
committed by unidentified persons using
brands of major mineral fertilizer producers.
To counteract corruption, we cooperate
successfully with state and local
government authorities and non-
governmental organisations based on the
principles of partnership, mutual respect,
trust and professionalism. We have entered
into a number of long-term agreements
on preventing and detecting crime, as well
as helping to build security infrastructure
through the creation of police stations
at PhosAgro Group’s production sites.
Joint activities are widely covered in the
corporate media (Khimik newspaper, No. 47
dated 2 December 2021, No. 48 dated
9 December 2021).
Every year, the Company’s Economic
Security Department takes part in the
International Compliance Day online forum
under the auspices of the Anti-Corruption
Charter of the Russian Business, as well
as in in-person conferences titled Anti-
Corruption and Compliance in Russia
and the CIS held by Dialog Management
Partners.
Preventing corruption through interaction
with partners and counterparties
205-2
When building an effective anti-corruption
policy, it is of utmost importance to
understand what corruption offences
employees may be inclined to commit
depending on their positions, what business
processes are most likely to involve the
commission of such offences, what ways or
schemes are available for committing them
and what consequences they may lead to.
For this purpose, PhosAgro Group has
defined lists of corruption-prone functions
and positions. The activities of the officials
occupying the positions included in the list
are under special control of the Economic
Security Department and heads of the
relevant business units in terms of their
compliance with high ethical standards and
requirements of internal documents on
anti-corruption, including compliance with
related prohibitions and restrictions and
measures to prevent and resolve conflicts of
interest.
PhosAgro Group seeks to identify and
assess corruption risks on a regular basis
using a three-step procedure to update
the list of functions and positions exposed
to such risks.
Corruption risk identification.
Identification of corruption offences that
may be committed by PhosAgro Group’s
employees and detection of business
processes (critical points) in the course
of which such misconduct is possible
Corruption risk analysis. Identification
of ways that can be potentially used to
commit a corruption offence, depending on
the specifics of PhosAgro Group’s business
processes (corruption schemes), persons
who may be involved in corruption, and
business processes’ vulnerabilities
Assessment of materiality of corruption
risks. Assessment of the probability
of a corruption offence at a specific stage
of a business process and the potential
damage to PhosAgro Group in case
an employee (employees) commits (commit)
a corruption offence
Acquainting business partners with PhosAgro Group’s
anti-corruption standards and procedures
PhosAgro Group recognises that
corruption risks can arise not only
within, but also outside the Company,
primarily when interacting with
counterparties, including business
partners, suppliers, contractors, etc.
PhosAgro Group has approved
a procedure for incorporating
an anti-corruption clause and
a clause of good faith in every
contract signed by the parties; these
clauses contain clear and detailed
rules and procedures aimed at
preventing corruption, including
special management procedures,
requirements for counterparties, rules
of special anti-corruption control and
audit, measures to prevent conflicts
of interest and commercial bribery,
and compensation for material
damage.
As part of the Company’s sustainable
development strategy, we
introduced the Code of Conduct for
Counterparties.
We are committed to establishing and
maintaining business relationships
with companies that operate in line
with high ethical standards and
combat corruption.
PhosAgro’s official website now
enables visitors to register at the
electronic bidding platform. Every
potential supplier of goods or
services interested in establishing
a business relationship with the
PhosAgro Group is required to read
the relevant internal documents
(PhosAgro’s Anti-Corruption Policy,
Code of Ethics, Anti-Fraud and Anti-
Corruption Policy of Apatit, etc.),
and familiarise themselves with
information on PhosAgro’s Hotline.
Only after becoming aware of these
standards may they proceed with the
registration at the electronic bidding
platform. This helps to ensure that
all potential counterparties seeking
to do business with PhosAgro Group
are familiar with PhosAgro’s Anti-
Corruption Policy and standards.
Anti-Fraud and Anti-Corruption Policy
Total number of business partners
registered at the electronic bidding
platform
Share of business partners
in this category, %
3,751
3,523
3,751
100
100
22
Total number of partners acquainted
with anti-corruption standards
2,980
3,523
831
2021
2020
2019
Incidents of corruption identified
and actions taken
PhosAgro Group’s commitment to the anti-corruption standards is
evidenced by the fact that it cooperates with law enforcement authorities:
1
PhosAgro Group made a public commitment to report to the
relevant law enforcement authorities any cases of corruption
(signs of corruption) PhosAgro Group (its employees) become
aware of.
2
PhosAgro will not impose any sanctions on employees
who reported to law enforcement authorities any actual or
potential corruption incidents that they became aware of in
the course of their employment.
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259
Corporate Governance Internal investigations into reported
corrupt behaviour
GRI 2-15
Number of internal investigations into
various failures to comply with the internal
regulations, Including corruption-related
3
2
2
52
52
68
2021
2020
2019
Internal investigations were in progress
into suspected failures in connection with
corruption
In 2021, 52 internal investigations were in
progress into suspected failures to comply
with the internal regulations, of which four
(into corruption and fraud) were completed.
The details can be found in the relevant
sections of the Report.
52
internal investigations were in progress
into suspected failures to comply with
the internal regulations in 2021
Cases of corruption identified
over three years
GRI 205-3
2021
2020
2019
Registered
Confirmed
Investigation in progress
Unconfirmed
1 Article 204, Parts 6 and 8, and Article 159, Part 3,
of the Russian Criminal Code.
2 Article 258, Part 1, of the Russian Criminal Code.
3 Article 204 and Article 159, Part 4, of the Russian
Criminal Code.
5
2
2
1
2
2
0
0
3
3
0
0
In 2021, two cases of corruption were
confirmed, one involving an employee
of Apatit’s Volkhov branch and the other
one involving a contractor’s management,
both of them giving rise to criminal
proceedings.
1. On 31 May 2021, we completed an
internal investigation into wrongdoings
committed by CEO of a business entity
acting as a counterparty and the
management of Apatit’s Heat, Water
and Gas Supply Unit when signing work
completion certificates, with a disciplinary
action (punitive reprimand) taken against
the head of Apatit’s respective business
unit. The results of investigation were
sent to law enforcement authorities for
consideration. The criminal case was
opened in accordance with Article 159,
Part 4 (“Fraud”) of the Russian Criminal
Code on 28 December 2021 in connection
with fraudulent acts on the part of the
counterparty’s management resulting in a
loss of RUB 19 mln by Apatit.
2. On 18 November 2021, we completed
an internal investigation in respect of
a road traffic safety officer of the Transport
Department (Volkhov branch of Apatit)
who was reported to have illegally received
RUB 100,000 for the benefit of a contractor
in exchange for concealing their failures
to comply with the internal regulations,
following which the Company terminated
Criminal cases initiated in connection
with corruption and fraud
Number of criminal cases initiated, total,
Including corruption-related
23
12
31
29
19
28
2020
2021
Criminal cases initiated in connection
2019
with corruption and fraud
his employment. A criminal case was
opened in accordance with Article 204, Part
7 of the Russian Criminal Code. The criminal
case was opened in accordance with
Article 204, Part 7, clause (c) (“Commercial
Bribery”) of the Russian Criminal Code
on 14 July 2021 in connection with an
illegal transfer of funds as payment for
concealing violations and failure to impose
penalties on the offenders as prescribed by
the Company’s internal regulations.
In 2021, the Company disqualified
two business partners who wanted to
participate in bidding procedures worth
over RUB 400 mln on the grounds that they
were considered not trustworthy because of
their failure to comply with anti-corruption
standards. The management of one
of the business entities offered RUB 2 mln
to representatives of the Economic Security
Service for knowingly performing illegal
actions to approve their bid for a mineral
fertilizer supply contract. The court found
the management of the business entity
guilty of an administrative offence under
Article 19.28, Part 1 (“Illegal Gratification
on behalf of a Legal Entity”) of the
Russian Administrative Code and imposed
an administrative fine in the amount
of RUB 500,000.
Conflict of interest
GRI 2-15
PhosAgro’s Code of Ethics and
Regulations on Conflict of Interest
require employees to report any
potential or actual conflicts of interest
to their line manager or an anti-
corruption officer.
As part of the work to develop
a framework for preventing,
identifying and resolving conflicts
of interest, three designated collegial
advisory bodies were established at
PhosAgro Group:
1. the Commission on Conflict
of Interest between Employees of
PhosAgro chaired by the CEO;
2. the Commission on Fraud,
Corruption and Conflicts of Interest at
Apatit (to streamline anti-corruption
efforts across the Company’s
production units);
3. the Commission on Fraud,
Corruption and Conflicts of Interest
at PhosAgro-Region (to act for the
downstream business).
PhosAgro places a strong emphasis
on timely prevention, identification
and resolution of potential conflicts of
interest. The Company puts in place
verification procedures to be carried
out when personnel decisions are made
and responsibilities are distributed and
requires all candidates to report personal
interest, if any, at the time they are
offered employment with the Company
and regularly from then onwards.
> an investigation as of 7 June 2021 into
the abuse of powers by Deputy Director
of Capital Constitution Department
(Volkhov branch of Apatit) who had
awarded a contract to a close relative
and into the way he oversaw the
performance of the contract. Following
the investigation, this manager’s
employment was terminated;
> an investigation as of 12 August
2021 in respect of a leading expert
of LLC PromTransPort’s standalone
business unit who abused their
powers when overseeing the
performance of the contract
awarded to a close relative. Following
the investigation, this expert’s
employment was terminated.
In 2021, the Company considered
ten cases of potential conflict of
interest, five of them at a meeting of
the Commission on Fraud, Corruption
and Conflicts of Interest chaired by
Apatit’s CEO. Two internal investigations
were carried out (see above).
Employment with three employees
was terminated for failure to comply
with the internal documents and
report potential conflicts of interest.
Internal investigations into reported
corrupt behaviour, including conflicts
of interest
2
3
0
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2021
2020
2019
Internal investigations into reported corrupt behaviour,
including conflicts of interest Period
2021
2020
2019
11
12
10
6
5
5
0
1
1
0
0
2
Number of
potential conflicts
of interest, total
Number of
conflicts of interest
considered at the
meeting of the
Commission on
Fraud, Corruption
and Conflicts of
Interest
Number
of notices
to heads
of business
units
Number
of employees with
whom employment
was terminated
260
261
Corporate Governance
Remuneration
Report
Board of Directors remuneration
GRI 2-19. 2-20
When deciding on a Board of Directors
composition, the General Meeting of
Shareholders approves the amount and
the rules for determining and paying
remuneration and compensation to
the Board members. According to the
Company’s Corporate Governance Code,
the Board remuneration shall be in line
with current market conditions and shall
be sufficient to enable the Company to
attract, motivate and retain highly skilled
professionals to help drive the future growth
and performance.
At the same time, the Company avoids
higher-than-necessary remuneration.
Fixed (quarterly) remuneration is paid
only to independent Board members.
RUB132.8mln
the total remuneration paid
to PhosAgro’s Board of Director in 2021
Additional (quarterly) remuneration is paid
to the chairmen of Board committees who
are independent directors and the non-
employee directors of the Board of Directors.
If such independent or non-employee
director chairs two or more committees,
the additional (quarterly) remuneration is
increased to USD 45,000 for a full quarter.
The Company compensates directors for
actual expenses incurred by them while
performing their respective functions.
The Chairman of the Board of Directors
who is an independent director receives
fixed (quarterly) remuneration equivalent
to USD 90,000 for a full quarter.
Other independent directors are paid
an equivalent of USD 45,000 for a full
quarter.
Additional (quarterly) remuneration
is payable to the chairmen of Board
committees who are either independent
or non-employee directors in an amount
equivalent to USD 30,000 for a full quarter.
Board of Directors’ remuneration, RUB
Full name of the member of the Board
of Directors
Sven Ombudstvedt
James Beeland Rogers Jr.
Marcus Rhodes
Andrey Sharonov
Xavier Rolet
Irina Bokova
Total
2019
2020
2021
22,871,844.00
27,111,960.00
26,561,520.00
19,059,870.00
22,593,300.00
22,134,600.00
19,059,870.00
22,593,300.00
22,134,600.00
11,435,922.00
13,555,980.00
13,280,760.00
21,339,381.35
27,111,960.00
26,561,520.00
15994944.69
22,593,300.00
22,134,600.00
109,761,832.04
135,559,800.00
132,807,600.00
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Remuneraton of the management
Remuneration principles
The Company’s remuneration policy for
executive bodies’ members and other key
employees is determined by the Board of
Directors based on the recommendations
of the Remuneration and Human
Resources Committee.
The Remuneration and Human Resources
Committee conducts a detailed bi-annual
review of the incentive system, evaluating
its effectiveness and, if necessary, making
recommendations for its improvement.
KPIs for each senior manager are set
annually and take into account metrics
related to operational efficiency and
individual contribution to the corporate
growth and strategic performance.
To assess the performance of the
Company’s CEO, a number of indicators
are used that characterise the
Company’s performance benchmarked
against peers in the industry and reflect
the efficiency of investments made:
The remuneration due to the
Company’s senior executives
consists of a monthly base salary plus
additional compensation payable
twice a year. Additional remuneration
is linked to achieving the Company’s
key performance indicators (KPIs)
and completeness and quality of
accomplishment of additional tasks, as
determined by the Board of Directors and
the CEO for the reporting period, as well
as the Company’s achievement of the
EBITDA target.
All KPIs are aligned with the Company’s
strategic goals defined in its Strategy
to 2025 and oriented towards their
achievement.
The amount of additional remuneration
ranges from 30% to 150% of the annual
base salary and depends on the level
of the position held and the functional
area of the manager. The Remuneration
and Human Resources Committee
of the Board of Directors, during its
annual evaluation of the incentive
system, ensures an effective proportion
of fixed and variable components of
remuneration.
1. Excess of PhosAgro’s average
shareholder return over the average
total shareholder return of phosphate
fertilizer manufacturers. The indicator
is based on benchmarking the level
of return received by PhosAgro
shareholders against the average return
received by shareholders of other public
companies in the industry. We use
both the dividend yield received by
shareholders during the reporting period
and the income generated by changes in
the value of shares (depositary receipts)
as the indicator. The goal is to exceed the
shareholder return of peer companies.
2. Change in spread between average
EV/EBITDA of public phosphate
fertilizer manufacturers and
PhosAgro’s EV/EBITDA. EV/EBITDA
reflects investors’ estimate of a
company’s fair market value and its
investment case. The goal is to increase
the spread.
3. Excess of PhosAgro’s ROIC – WACC
spread over the average ROIC – WACC
spread of public peers. The indicator
reflects how much higher a company’s
return on investment is than the cost
of capital (equity and debt), and how
efficient the company’s investments are
compared to other companies in the
industry. The goal is to outperform.
4. Achievement of the target NPV for
investment proje. This indicator reflects
the success of the strategic investment
decisions made and the quality of
delivering the company’s strategic plans.
The goal is to achieve the target.
Values of the specified KPIs in the range
of base case / target / challenge, as well
as their actual values at the end of the
reporting period are approved by the
Chairman of the Board. Taken together,
these indicators contribute to the
achievement of the Company’s
strategic goals and serve the interests
of shareholders both in terms of
the Company’s development and in
terms of minimising the risks arising
from incentivising excessively risky
management decisions.
KPIs of the CEO and N-1 level managers,
including sustainable development
indicators, are cascaded down and
decomposed into KPI scorecards of
lower-level management. The indicators
themselves and their weights are
modified depending on the nature
of a particular manager’s focus area
with due regard to their strategic fit.
Specific KPI wordings and their weights
are established by the Company’s KPI
Committee, taking into account the
opinion of the KPI holder and their
immediate supervisor.
In 2021, 280 PhosAgro Group’s officers
were benchmarked against 1,527 KPIs.
Item
no.
Wording
Impact on the variable
component of the CEO's
annual remuneration, %
KPI performance
in 2021, %
1
2
3
4
Excess of PhosAgro's average shareholder return over the average
total shareholder return of phosphate fertilizer manufacturers
Change in spread between average EV/EBITDA of public phosphate
fertilizer manufacturers and PhosAgro's EV/EBITDA
Excess of PhosAgro's ROIC – WACC spread over the average ROIC –
WACC spread of public peers
Achievement of the target NPV for investment projects
20
20
20
20
100
125
125
115
262
263
Corporate Governance 280
PhosAgro Group’s officers were
benchmarked against 1,527 KPIs in 2021
Number of officers holding KPIs by year:
2021
2020
2019
280
277
106
Top-3 KPI-driven areas
1
2
3
Commitment to sustainability — 50% of KPIs
Expansion of production capacities through improved
operational efficiency — 36% of KPIs
Development in high-potential areas — 9% of KPIs
Management remuneration
The amount of remuneration and
additional compensation due to PhosAgro’s
CEO is regulated by a contract between
them and the Company, which is signed
by the Chairman of the Board of Directors.
The total remuneration reflects the
CEO’s qualifications and their personal
contribution to the Company’s financial
results.
Loans extended to members of the Board
of Directors and executive bodies –
RUB 15 mln (as at 31 December 2021).
Terms of borrowing – based on 2/3 of the
refinancing rate effective as at the date
of the loan.
Remuneration paid to the CEO and six other Management Board members who
represent the senior management team for their services to the Company,
RUB ‘000
Pay type
2019
2020
2021
Total, including
451,207.7
1,098,922.60
1,422,662.4
salary
bonus
other types of
remuneration
fee
170,490.6
421,033.0
399,548.2
280,408.6
677,807.1
1,023,035.3
302.5
0
82.5
0
78.9
0
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As can be seen from the above statistics,
PhosAgro Group is focused on sustainable
development, and the KPI framework
includes the following indicators:
> Share of waste recycling, neutralisation
and processing
In 2021, KPIs were added for the following
areas:
> projects to implement the most
environmentally friendly methods of
farming (promotion of sales of urea with
urease inhibitor)
> Compliance with maximum permissible
> promotion of the Green Label project
discharge/emission rates
> Implementation of key social projects
Innovations project
> promotion of the University of
> % of completion of the programme to
improve social and working conditions
> quality of non-financial reporting
> Zero industrial accidents
> Zero occupational injuries
> external perception of environmentally
responsible development activities
External auditor’s remuneration
The Company engaged AO
PricewaterhouseCoopers Audit
to audit its 2021 IFRS consolidated
financial statements. The actual
remuneration paid to the auditor for
this service stood at RUB 36.0 mln,
net of VAT and overhead costs; a similar
amount for 2020 was RUB 36.5 mln.
In addition, in 2021, Pricewaterhouse-
Coopers Audit rendered audit-related
services to the Company for a total of
RUB 13.7 mln, including preparations for
the Eurobond issue worth RUB 8.4 mln,
net of VAT.
Also, during 2021, other contracts were
concluded for the provision of non-audit
services to the Company in the amount
of RUB 10.4 mln, net of VAT. All additional
services, related and unrelated to audit,
were duly approved by the audit partner,
as well as by the Chairman of the Audit
Committee of the Company’s Board of
Directors, with due regard to appropriate
independence considerations.
The actual remuneration of FBK to
audit the Company’s RAS accounting
statements for 2021 was RUB 620,000
net of VAT, up 5% year-over-year.
When determining the amount
of additional annual remuneration for
the top management, we look at the
achievement of the EBITDA target as
an integral indicator of the Company’s
performance. The managers’ performance
is adjusted by the percentage of delivering
on the EBITDA target as follows:
% of EBITDA target met
Adjustment based on the Company's EBITDA, %
Less than 60
Greater than or equal to 60
and less than or equal to 125
Above 125
0
Actual EBITDA / Target EBITDA
125
The Company does not provide for any
compensation payable to managers in case
of their dismissal or voluntary resignation or
the Company’s takeover or the change of its
owner (golden parachutes). Neither does it
use options, pre-determined unconditional
bonuses or a clawback mechanism.
264
265
Corporate Governance
Transparency and consistency
The Company maintains an ongoing dialogue with the
investor community through a variety of communication
channels and with involvement of the Company’s senior
management and independent directors.
Responsible growth
Since the IPO, we have more than doubled
our output of mineral fertilizers and feed
phosphates. From 2011 up to now, we have
invested close to USD 6 bln in the Company’s
development. Over these ten years, we have
achieved a nearly four-fold increase in labour
productivity at our production sites, while also
reducing workplace injury rates by more
than two thirds.
>250
online meetings and conference
calls with investors and analysts
L
A
T
I
P
A
C
E
R
A
H
S
268
Ownership
Structure
269
Share Performance
270
Debt Management
271
Analyst Coverage
271
Dividend Policy
273
Relationship with
shareholders and
investors
266
267
267
267
Об отчете О компании Стратегический отчет Обзор результатов Корпоративное управление Акционерный капитал Финансовая отчетность Дополнительная информацияАкционерный капитал
Share
Capital
Ownership structure
The authorised capital of PhosAgro
as at 31 December 2021 amounted
to RUB 323,750,000 consisting of
129,500,000 ordinary shares with a par
value of RUB 2.5 per share.
The register of holders of PhosAgro’s
securities is maintained by JSC Reestr
whose details are set out in the Contacts
section https://www.phosagro.com/
contacts/.
As at 31 December 2021, there were no
shareholders in the Company with a stake
of more than 5% beyond those already
disclosed by the Company in this report.
The Company is unaware of any
shareholders that may gain or have
gained control disproportionate to their
share in the Company’s authorised
capital, including by virtue of shareholder
agreements.
Shareholding structure as at 31 December 2019
Shareholder
Adorabella Limited
Chlodwig Enterprises Limited
Evgenia Guryeva
Vladimir Litvinenko
Other shareholders
Total
Number of shares
% of issued and
outstanding shares
32,176,662
24,359,900
6,235,960
27,174,815
39,552,663
129,500,000
24.85
18.81
4.82
20.98
30.541
100.00
Share performance
PhosAgro’s shares are traded on the A1
quotation list of the Moscow Exchange
under the ticker symbol PHOR (ISIN:
RU000A0JRKT8).
Global depositary receipts (three GDRs
represent one share) are traded in the Main
Market of the London Stock Exchange under
the symbol PHOR.
Shares of PhosAgro are included in the
following indices of the Moscow Exchange:
> MSCI Russia;
> MSCI Emerging Markets;
> MOEX Russia;
> RTS.
Citigroup Global Markets Deutschland AG
acts as the depositary for the Company’s
GDR Programme.
Tickers
Stock exchange
Bloomberg
Reuters
ISIN
Moscow Exchange
London Stock Exchange
PHOR RU
PHOR LI
PHOR.MM
RU000A0JRKT8
PHORq.L
US71922G2093
Codes for Global Depositary
Receipts
Under Regulation S
Under Rule 144A
CUSIP
ISIN
Common code
SEDOL
RIC
71922G209
71922G100
US71922G2093
US71922G1004
065008939
0B62QPJ1
PHOSq.L
065008939
0B5N6Z48
GBB5N6Z48.L
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Shareholding structure as at 31 December 2020
Share/GDR performance in 2021
Shareholder
Adorabella Limited
Chlodwig Enterprises Limited
Evgenia Guryeva
Vladimir Litvinenko
Other shareholders
Total
Shareholding structure as at 31 December 2021
The current ownership
structure is available on the
Company’s website
Contacts section
Shareholder
Adorabella Limited
Chlodwig Enterprises Limited
Evgenia Guryeva
Vladimir Litvinenko
Other shareholders
Total
1 Free-float ratio (% of shares in free float).
Number of shares
% of issued and
outstanding shares
30,234,162
26,302,400
6,235,960
27,174,815
39,552,663
129,500,000
23.35
20.31
4.82
20.98
30.541
100.00
Number of shares
% of issued and
outstanding shares
30,234,162
26,302,400
6,235,960
27,174,815
39,552,663
129,500,000
23.35
20.31
4.82
20.98
30.541
100.00
6,000
5,000
4,000
3,000
2,000
30
25
20
15
5
January
February
March
April
May
June
July
August
September October
November December
Share price (MOEX)
GDR price (LSE)
The key factors affecting the Company’s share performance in 2021:
surge in demand for phosphate-
and nitrogen-based fertilizers
over the year;
high prices for major
crops in global
markets;
more expensive primary
feedstock (gas, sulphur,
potassium);
strong operational
and financial performance
of the Company;
successful completion of
construction of an 800 ktpa
phosphate-based fertilizer
plant in Volkhov;
low fertilizer stocks
in the Company’s key
sales markets;
improvements across
the Company’s key ESG
ratings in 2021.
268
269
Share Capital PhosAgro is covered by analysts from leading Russian and international
brokers.
Company
ATON
BCS Investment Bank
VTB Capital
Goldman Sachs
BMO
Sberbank CIB
Bank of America
Alfa Bank
Renaissance Capital
Raiffeisen Bank
Analyst
Andrey Lobazov
Kirill Chuyko
Elena Sakhnova
Artem Vodyannikov
Nina Dergunova
Ilya Dmitriev
Joel Jackson
Sergey Donskoy
Maria Martynova
Sashank Lanka
Boris Krasnojenov
Yulia Tolstykh
Boris Sinitsyn
Sergey Garamita
Tel.
+7 (495) 213-03-37
+7 (495) 213-15-26
+7 (495) 213-15-03
+7 (495) 287-68-77
+7 (495) 645-42-30
+1 (416) 359-42-50
+44 207 071-08-24
+7 (495) 665-56-00
+971 4 425 8231
+7 (495) 795-36-12
+7 (499) 956-45-40
+7 (495) 221-98-42
Sinara Financial Corporation
Anastasia Egazaryan
+7 (917) 514-85-51
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Share
performance
Item
Share price on the
Moscow Exchange,
RUB
GDR price on the
London Stock
Exchange, USD
Market
capitalisation,
USD mln
List of major institutional investors in shares and GDRs as at 31 December 2021,
%
As at 31
December
2020
As at 31
December
2021
Name
BlackRock, Inc.
FIL Limited
3,133.00
5,833.00
Vanguard Group, Inc./The
Norges Bank
Van Eck Associates Corporation
13.64
21.58
Nordea Bank Abp
5,299.14
8,383.83
Swedbank AB
Grantham, Mayo, Van Otterloo & Co. LLC
FMR LLC
Government Pension Investment Fund
Source: Bloomberg
% of the free float
1.72
1.55
0.86
0.64
0.39
0.37
0.37
0.26
0.24
0.22
For more information on our
historical share performance,
please visit website
Debt management
The Company uses a conservative approach
to leverage and believes that a comfortable
net debt/EBITDA ratio should be below
2х or even within a range of 1–1.5х in the
long run. As at 31 December 2021, the
Company’s leverage was much lower than
that, at 0.8x.
When determining its borrowing
requirements, the Company assesses the
cost of borrowing from banks and public
debt markets, the amount and maturity
available while striving to ensure that
this fits into the Group’s long-term debt
reduction strategy.
The choice of the currency of borrowings
is based on the structure of the Company’s
revenue, 70% of which is in foreign currency
and the rest is strongly correlated with US
Dollar exchange rate.
Bonds
Borrower
Issuer
PJSC PhosAgro
PJSC PhosAgro
PJSC PhosAgro
PhosAgro Bond Funding Limited
PhosAgro Bond Funding Limited
PhosAgro Bond Funding Limited
Settlement date
Principal outstanding, USD mln USA
Guarantor(s)
24 January 2018
23 January 2020
16 September 2021
500
JSC Apatit
500
JSC Apatit
500
JSC Apatit
Analyst coverage
Recommendations from analysts
of investment banks and financial
institutions regarding the Company’s
shares as at 31 December 2021, %
27
9
18
46
Buy
Hold
Sell
Recommendation under
review
Dividend policy
PhosAgro is committed to striking
an effective and reasonable balance
between the payment of dividends
and reinvestment of profit in further
development.
Higher transparency and predictability
of dividend payments are a priority for
the Company as it seeks to ramp up its
growth and strengthen its investment
case.
All resolutions on the payment
of dividends and the timing and amount
of such payment are subject to approval
of the General Shareholders’ Meeting,
based on recommendations provided
by the PhosAgro Board of Directors.
When preparing recommendations
for the General Shareholders’ Meeting
on any dividend payout (declaration),
in addition to the current financial
standing assessment, the Board
of Directors takes into account
the relevant provisions of the Company’s
dividend policy that state that the
amount of distributed dividends may
range from 50% to over 75% (subject
to the Company’s leverage ratio) of the
Company’s consolidated free cash flow
for the respective year under IFRS. At
the same time, the amount of declared
dividends should not be lower than 50%
of net profit for the year under IFRS.
(AGM) approve dividends of RUB
390 per share (RUB 130 per global
depositary receipt), or RUB 50,505 in
total. If approved by the Annual General
Shareholders’ Meeting on 30 June 2022,
declared dividends for 2021 will amount
to RUB 114,608, or 147% of the free
cash flow calculated on the basis of
the Company’s 2021 IFRS consolidated
financial statements.
The full text of our dividend
policy is available on the
Company’s website
On 9 February 2022, PhosAgro’s Board
of Directors recommended that the
Annual General Shareholders’ Meeting
270
271
Share Capital Report on dividends declared and paid
Dividend per
share, RUB
Dividend per
GDR, RUB
Total amount of
declared dividends,
RUB
Governance
body deciding on
the payment of
dividends
Date of the General
Shareholders’
Meeting where the
relevant resolution
on the payment
of dividends was
adopted and No.
of the minutes
Dividend
payment
timeframes1
72
54
48
18
78
33
123
63
105
156
234
390
24
18
16
6
26
11
41
21
35
52
78
130
9,324
6,993
6,216
2,331
10,101
4,273.5
15,928.5
8,158
13,597.5
20,202
30,303
50,505
24.06.2019
04.10.2019
24.01.2020
22.05.2020
19.06.2020
30.09.2020
14.12.2020
25.05.2021
22.06.2021
13.09.2021
08.12.2021
No later than 11 July 2019 –
15 August 2019
No later than 16 October
2019 – 20 November 2019
No later than 5 February
2020 – 12 March 2020
No later than 3 June 2020 –
8 July 2020
No later than 7 July 2020 –
10 August 2020
No later than 16 October
2020 – 20 November 2020
No later than 28 December
2020 – 18 January 2021
No later than 8 June 2021 –
13 July 2021
No later than 6 July 2021 –
9 August 2021
No later than 08 October
2021 – 29 October 2021
No later than 21 December
2021 – 1 February 2022
30.06.2022
No later than 25 July 2022 –
15 August 2022
Item
2019
Retained earnings
as at 31 March 2019
.... as at 31.12.2018
.... as at 31.12.2018
.... as at 31.12.2019
(based on 2019 results)
2020
.... as at 31.03.2020
.... as at 30.06.2020
.... as at 30.09.2020
.... as at 31.12.2020
(based on 2020 results)
2021
.... as at 31.03.2021
.... as at 30.06.2021
.... as at 30.09.2021
.... as at 31.12.2021
(based on 2021 results)2
Extraordinary General Shareholders’ Meeting
Annual General Shareholders’ Meeting
For more information on the
Company’s dividend payment
history, please visit website
1 To nominee holders and trustees who are securities market professionals and are on PhosAgro’s register of shareholders / other persons on PhosAgro’s register of shareholders.
2 On condition the approval of the payments recommended by the Board of Directors based on the results of 2021 at the Annual General Shareholders’ Meeting on June 30, 2022.
Relationship with shareholders and investors
At PhosAgro, we are committed to
transparency and consistency, and
maintain an ongoing dialogue with the
investor community through a variety
of communication channels and
with involvement of the Company’s
senior management and independent
directors.
Continuous engagement programme
allows the Company:
> To raise investor awareness of the
Company’s potential value and long-
term sustainability;
> To update investors on PhosAgro’s
strategic priorities and progress we
have made;
> To attract a wider pool of investors
to improve liquidity, share price and
borrowing costs;
> To increase our access to a variety of
capital market instruments;
> To provide transparency on how our
corporate governance systems work;
> To generate new ideas through a
dialogue with investors;
> To clarify the Company’s contribution
to the UN Sustainable Development
Goals.
We keep the market abreast of
the Company’s performance by
publishing quarterly operational
and financial results that are made
available to investors via press releases,
presentations, conference calls and
webcasts. On top of that, we take
every opportunity to answer investors’
questions and gather feedback from
market players by participating in
industry and regional investment
conferences.
Regular NDRs allow us to expand
our investor base through meetings
arranged outside of key financial market
centres.
In 2022, the Company is conducting
another ESG investor survey, with plans
to make it biennial. The first survey took
place in 2020.
A well developed Eurobond programme
helps reinforce the Company’s position
in the public debt market while ensuring
the lowest cost of funding.
In 2021, the Company expanded
communication with retail investors by
holding five conference calls with the
assistance of major Russian brokers.
The calls were broadcast on Telegram,
YouTube, Clubhouse and other channels
and helped the Company reach a wider
audience.
In 2021, PhosAgro received DFI
certification of its USD 500 mln
Eurobond issue. Also, the Company
engaged Vigeo Eris to provide a five-
component Second Party Opinion (SPO).
The purpose was to map out KPIs as
part of the preparation for issuing green
finance instruments.
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Why we interact
There are four main purposes for which PhosAgro
interacts with the investment community – each
building on each other and facilitating an ongoing
exchange of information and higher business
transparency:
> Communicate investor feedback to the
management to form the internal position
and tweak/work out a development strategy
that would mitigate major risks and unlock the
Company’s potential;
> Provide investment community with reliable and
relevant information on the key aspects of the
Company’s operations, its development plans
and long-term goals;
> Identify risks and opportunities for the Company
as seen from the perspective of members of the
investment community after they have analysed
the provided information;
> Monitor the progress against the Company’s
development strategy and present its results to
the public.
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273
Share Capital Information disclosure
PhosAgro strictly follows the requirements
imposed by Russian securities regulations,
as well as rules for the companies traded
on the LSE. The Company publicly discloses
all required information to shareholders
and investors in a timely manner through
authorised newswires, the corporate
website, PhosAgro’s official disclosure
page on the Interfax portal, and at the LSE
webpage.
Financial calendar for 2022
Financial results disclosure
Q4 and FY 2021
Q1 2022
Q2 and 6M 2022
Q3 and 9M 2022
10 February 2022
19 May 2022 (TBC)
11 August 2022 (TBC)
10 November 2022 (TBC)
PhosAgro’s official
disclosure page
on the Interfax portal
The Company’s page
on the LSE website
Disclosure on
the Company’s official
website
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How we interact
The Company interacts with the investment community in
a variety of ways:
community to raise their awareness of the Company’s
operations;
> Non-deal roadshows (including those held virtually)
> Interaction with credit and ESG rating agencies;
covering general topics for broader investor audiences
and deal roadshows relating to Eurobond offerings and
ESG disclosures etc.;
> Regulatory press releases;
> Annual General Shareholders’ Meetings and formal
> One-on-one meetings and calls with investors;
reporting;
> Investor conferences, both offline and online;
> Corporate website;
> Conference calls on the Company’s financial and
> A dedicated in-house investor relations team;
operational performance;
> Surveys of the Company’s perception by different
investor categories, including ESG-oriented groups;
> Selective communication with members of the analyst
> Appointment of seven independent directors of the
Board of Directors to represent shareholder interests
Key topics and activities in 2021
> In 2021, the Company held meetings with more than
250 investors and analysts. These include 12 investor
conferences and numerous calls as part of virtual NDRs.
> 120 publications were made in line with Russian
disclosure regulations via the Interfax Corporate
Disclosure Centre.
> Following an intensive DCM marketing campaign the
Company raised USD 500 mln via a Eurobond issue,
which was priced at a coupon of 2.6% per annum, the
lowest ever rate among Russian corporate issuers.
> Four conference calls and webcasts for analysts and
investors were organised in order to discuss the
Company’s financial results.
> More than 50 press releases were distributed via
the UK regulatory news service.
For more information on our initiatives and their
accompanying presentations, please visit the
Calendar section of the Company’s official website
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Share Capital
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278
Financial statements
326
Changes
in the status
of conformity with
the Corporate
Governance Code
(CGC) principles in
2021
328
Independent limited
assurance report
334
GRI content index
343
SASB content index
345
TCFD
recommendations
346
Glossary
347
Contacts
276
277
Financial statements
Independent Auditors’ Report
To the Shareholders and Board of Directors of PJSC “PhosAgro”:
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects,
the consolidated financial position of PJSC “PhosAgro” (the “Company”) and its subsidiaries
(together – the “Group”) as at 31 December 2021, and the Group’s consolidated financial performance
and consolidated cash flows for the year then ended in accordance with International F inancial
Reporting Standards (IFRS).
What we have audited
The Group’s consolidated financial statements comprise:
the consolidated statement of profit or loss and other comprehensive income for the year ended
31 December 2021;
the consolidated statement of financial position as at 31 December 2021;
the consolidated statement of cash flows for the year then ended;
the consolidated statement of changes in equity for the year then ended; and
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs).
Our responsibilities under those standards are further described in the Auditor’s responsibilities
for the audit of the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Independence
We are independent of the Group in accordance with the International Code of Ethics for Professional
Accountants (including International Independence Standards) issued by the International Ethics
Standards Board for Accountants (IESBA Code) and the ethical requirements of the Auditor’s
Professional Ethics Code and Auditor’s Independence Rules that are relevant to our audit of the
consolidated financial statements in the Russian Federation. We have fulfilled our other ethical
responsibilities in accordance with these requirements and the IESBA Code.
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.
AO PricewaterhouseCoopers Audit
White Square Office Center 10 Butyrsky Val Moscow, Russian Federation, 125047
T: +7 (495) 967 6000, F:+7 (495) 967 6001, www.pwc.ru
Key audit matter
How our audit addressed the key audit matter
Initial audit procedures as a result of changing
the auditor
Refer to Note 4 to the consolidated financial
statements of the Group
In December 2020, the Company appointed
us as auditors of the consolidated financial
statements of the Group for the year ended
31 December 2021. The consolidated financial
statements of the Group for the year ended
31 December 2020 were audited by another
auditor who expressed an unmodified opinion
on those statements on 18 February 2021.
For the first-year audit, our objective with
respect to the opening balances was to obtain
sufficient appropriate audit evidence about
whether:
(a) The opening balances contain
misstatements that materially affect the current
period’s financial statements; and
(b) Appropriate accounting policies reflected
in the opening balances have been consistently
applied in the current period’s financial
statements, or changes thereto are appropriately
accounted for and adequately presented and
disclosed in accordance with IFRS.
We focus on this matter as the first-year audit
inherently requires greater attention to the
consistency of the application of accounting
principles, critical estimates and significant
management judgements.
As the newly appointed auditor we performed
the following audit procedures to obtain sufficient
appropriate audit evidence regarding the opening
balances:
We contacted the predecessor auditor and
assessed the predecessor auditor’s working
papers to obtain evidence regarding the
opening balances.
We reviewed the accounting policies of
the Group and ensured that the accounting
policies have been consistently applied in
the current period’s financial statements.
We assessed changes in the accounting
policies implemented by the Group since
2020 to make sure they were appropriately
applied and presented in the consolidated
financial statements in accordance with
IFRS.
We identified complex accounting matters
and transactions and assessed
management’s judgement, the accounting
treatment and the disclosures made in the
consolidated financial statements.
We obtained an understanding of
management’s process in respect of the
identification and measurement of the
accounting estimates and related controls.
We assessed critical estimates and
judgements applied by management that had
the most significant effect on the amounts
recognised in the consolidated financial
statements of the Group and ensured that
these estimates and judgements are
adequate and conform with IFRS
requirements.
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Additional Information
Independent Auditors’ Report
Key audit matter
How our audit addressed the key audit matter
Recoverability of deferred tax assets
Refer to Note 17 to the consolidated
financial statements of the Group
We performed the following audit procedures
to address the key audit matter:
As at 31 December 2021, the Group’s
consolidated statement of financial position
includes RUB 9,499 million of deferred
tax assets, the main part of which relates
to deferred tax assets recognised by the
Company in respect of tax losses carried
forward.
In terms of IFRS, a deferred tax asset shall
be recognised for unused tax losses only
to the extent that it is probable that future
taxable profit will be available against which
the unused tax losses can be utilised.
Management of the Group performed the
assessment of and concluded on the
recoverability of the deferred tax assets.
This analysis was based on the long-term
plans of the Group and the financial
projections of the future taxable profits
of the Company.
We focus on this area because it involves
significant management’s judgement and is
affected by the uncertainty over the amount
of future taxable profit.
We obtained an understanding of the
Company’s process in relation to the
assessment of the recoverability of the
deferred tax assets and long-term budget
preparation.
We obtained the long-term budget prepared
by the Company’s management and
challenged the expected future profits and
assumptions regarding future earnings
as reflected therein, by comparing them
to industry and market trends.
We assessed the accuracy of the Company’s
calculations used in the model, including
deferred tax calculations.
We assessed the adequacy of the
management’s assumptions used in assessing
the recoverability of the deferred tax assets
arising from tax losses carried forward in the
consolidated financial statements.
We involved our tax specialists to assist
in evaluating the management’s plans and
to consider any potential limitations to the
amount and timing of the utilisation of the
unused tax loss as established by Russian
tax legislation.
We have read the consolidated financial
statements and assessed adequacy of the
related note disclosures.
Other matter – Materiality and Group audit scope
Overview
Materiality
Overall Group materiality: Russian Roubles (“RUB”) 8,003 million,
which represents 5% of profit before tax
Group scoping
We conducted audit work at six reporting units located in three
countries
Our audit scope addressed 88% of the Group’s revenues and
78% of the Group’s absolute value of underlying profit before tax
Materiality
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of signifi cant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls including, among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out in
the table below. These, together with qualitative considerations, helped us to determine the scope of our
audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements,
if any, both individually and in aggregate on the consolidated financial statements as a whole.
Overall Group materiality RUB 8,003 million
How we determined it
5% of profit before tax
Rationale for the
materiality
benchmark applied
We chose profit before tax as the benchmark because, in our view, it is
the benchmark against which the performance of the Group is most
commonly measured by users, and is a generally accepted benchmark.
We chose 5% which is consistent with quantitative materiality
thresholds used for profit-oriented companies in this sector
How we tailored our Group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the consolidated financial statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the Group operates.
Our group audit was focused on the significant components in the Russian Federation and abroad.
For components which are individually financially significant we performed an audit of their complete
set of financial information. For components that are not individually financially significant, but that are
important to achieve sufficient coverage on individual items, we performed an audit of a complete set
of financial information or an audit of one or more account balances.
As a group auditor, we determined the nature and extent of the audit procedures to be performed for
the components of the Group to ensure that we have performed enough work to be able to give an
opinion on the Group’s consolidated financial statements as a whole. For the component auditors
involved from another PwC network firm, we issued specific instructions which included our risk
analysis, materiality and audit approach for the key audit areas. The Group engagement team
regularly communicated with the component auditor.
By performing the above procedures at the components, combined with additional procedures at the
Group level, we have obtained sufficient and appropriate audit evidence regarding the consolidated
financial statements of the Group as a whole that provides a basis for our opinion.
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Additional Information
Independent Auditors’ Report
Other information
Management is responsible for the other information. The other information comprises the Group’s
Annual report for 2021 and the Company’s Securities issuer’s report for the 12 months ended 31
December 2021 (but does not include the consolidated financial statements and our auditor’s report
thereon), which are expected to be made available to us after the date of this auditor’s report.
Our opinion on the consolidated financial statements does not cover the other info rmation and we will
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our respons ibility is to read the
other information identified above 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.
When we read the the Group’s Annual report for 2021 and the Company’s Securities issuer’s report
for the 12 months ended 31 December 2021, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to those charged with governance.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financ ial
statements in accordance with IFRS, and for such internal control as management determines 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, management is 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 management either intends 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.
Auditor’s 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 auditor’s report that includes our opinion. Reasonable assurance is a high lev el of assurance, but is
not a guarantee that an audit conducted in accordance with ISAs will always det ect 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 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.
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Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s 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
auditor’s 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 auditor’s 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 to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards applied.
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 auditor’s 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.
The certified auditor responsible for the audit resulting in this independent auditor’s report is
A.Y. Fegetsyn.
022
9 February 2022
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Moscow, Russian Federation
A. Y. Fegetsyn is authorised to sign on behalf of the general director of AO PricewaterhouseCoopers
Audit (Principal Registration Number of the Record in the Register of Auditors and Audit Organizations
(PRNR) – 12006020338), certified auditor (PRNR – 21906101957)
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006020000000000000000000000000000033333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333333338)8)888)88)8)8)8)8))))))8)8)8888)88)8)8)))8)8)8888)8)))))88))))8)8)8)8)8))8)8)8)88)8)88)88888)888)88)8888)88888)8)888)8)8)888888888888888888)8)8888)))8)88888)8)88888))888888888)))))8)))888888))8))8)))8)8)))))))8))8))8))8)88)8888888)888)888)8)888888888)8)8)8)8)8))8)8)88)8)8)))8)8888)88)))))88888)8)88))8)88)))))))))))))),,,,,,,,,,,,,,,,,,,,, ceccecececececececeeceeceecececececececececeeeeeeeeeceeeceeceeeeeeeeeeececececeeceeeeeeeeceeeececeecececccccccccecceceeeececeeceeeececcccccccccccccececeeeececececcccceeeeececcccccccccceeeccccccececeeeeeeeeeceeeeeecececeecececeeeceeeeeececececececccecceeceeeeeeecececeeceececcceeeeeceeececccccceeeeceeeccccccccccccceeeeeeeeeccccceeeeeccceeecccccccccccc rtrtttrtrtrtrtrtrtrttrtttrttttrttrtttrttrtrtrtrrtrttrtttrttrtrtrttrtrtttttttrrtrtttrtttrrrttttttttrrrrrrrrtttrtrrrrrrttttrrrrrrrrrrrrttrrrrrrrrttrrrrrrrrrrrtrrrrrrrrrrrrrrrrrrrrrrrrr iififfiffiffffifffffffffffffiffffifififffifffffffffffifffifffffffififffffffffffiiifffififfffiifffiiiiiffffffiiiififfffffifiifiiiii iiiiieiiiiiiii d au
282
283
Additional Information Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2021
Consolidated Statement of Financial Position as at 31 December 2021
RUB million
Revenues
Cost of Group products sold
Cost of products for resale
Gross profit
Administrative and selling overhead expenses
Taxes, other than income tax, net
Other expenses, net
Foreign exchange (loss)/gain from operating activities, net
Operating profit
Gain from revaluation of financial assets measured at fair value
Finance income
Finance costs
Foreign exchange loss from financing activities, net
COVID-19 related expenses
Profit before tax
Income tax expense
Profit for the year
Attributable to:
Non-controlling interests*
Shareholders of the Parent
Basic and diluted earnings per share (in RUB)
Other comprehensive loss
Items that will never be reclassified to profit or loss
Actuarial losses
Items that may be reclassified subsequently to profit or loss
Foreign currency translation difference
Other comprehensive (loss)/income for the year
Total comprehensive income for the year
Attributable to:
Non-controlling interests*
Shareholders of the Parent
*Non-controlling interests are the minority shareholders of the subsidiaries of PJSC “PhosAgro”
The consolidated financial statements were approved on 9 February 2022:
Note
7
8
9
10
11
18
12
12
29(b)
13
24
27
2021
420,488
(206,082)
(12,725)
201,681
(27,845)
(5,946)
(3,449)
(307)
164,134
1,193
778
(5,044)
(531)
(475)
160,055
(30,381)
129,674
(23)
129,697
1,002
2020
253,879
(157,370)
(9,333)
87,176
(24,048)
(2,962)
(2,512)
1,379
59,033
-
975
(5,455)
(26,449)
(1,434)
26,670
(9,749)
16,921
(11)
16,932
131
(36)
(28)
(350)
(386)
129,288
(23)
129,311
2,345
2,317
19,238
(11)
19,249
A.A. Guryev
Chief executive officer
A.F. Sharabaiko
Deputy CEO for Finance
and International Projects
RUB million
Assets
Property, plant and equipment
Advances issued for property, plant and equipment
Deferred tax assets
Right-of-use assets
Non-current spare parts
Other non-current assets
Catalysts
Intangible assets
Investments in associates
Non-current assets
Trade and other receivables
Inventories
Cash and cash equivalents
VAT and other taxes receivable
Income tax receivable
Other financial assets
Current assets
Total assets
Equity
Share capital
Share premium
Retained earnings
Actuarial losses
Foreign currency translation reserve
Equity attributable to shareholders of the Parent
Equity attributable to non-controlling interests
Total equity
Liabilities
Loans and borrowings
Deferred tax liabilities
Lease liabilities
Defined benefit obligations
Non-current liabilities
Trade and other payables
Loans and borrowings
VAT and other taxes payable
Income tax payable
Lease liabilities
Current liabilities
Total equity and liabilities
Note
31 December 2021
31 December 2020
14
17
15
18
16
21
20
22
19
23
25
17
26
27
28
25
26
237,444
13,237
9,499
6,955
4,698
2,058
2,049
1,756
569
220,031
7,835
7,462
7,335
4,308
948
2,292
1,621
556
278,265
252,388
48,526
41,177
21,710
15,013
540
216
127,182
405,447
372
7,494
148,193
(753)
9,231
164,537
106
164,643
157,081
12,937
3,459
952
174,429
41,756
12,710
6,397
3,334
2,178
66,375
405,447
17,515
30,580
8,460
10,285
479
311
67,630
320,018
372
7,494
90,757
(717)
9,581
107,487
129
107,616
103,824
11,578
4,268
945
120,615
29,869
55,316
3,675
1,000
1,927
91,787
320,018
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the notes to, and forming part of, the consolidated financial
statements.
The consolidated statement of financial position is to be read in conjunction with the notes to, and forming part of, the consolidated financial statements.
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285
Additional Information
Consolidated Statement of Cash Flows for the year ended 31 December 2021
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
RUB million
Cash flows from operating activities
Operating profit
Adjustments for:
Depreciation and amortisation
Loss on disposal of property, plant and equipment and intangible assets
Operating profit before changes in working capital and provisions
Increase in inventories, catalysts and non-current spare parts
Increase in trade and other receivables
Increase in trade and other payables
Cash flows from operations before income taxes and interest paid
Income tax paid
Finance costs paid
Cash flows from operating activities
Cash flows from investing activities
Acquisition of property, plant and equipment and intangible assets
Borrowing cost capitalised paid
Other
Cash flows used in investing activities
Cash flows from financing activities
Proceeds from borrowings, net of transaction costs
Repayment of borrowings
Early eurobond partial redemption fees
Dividends paid to shareholders of the Parent
Dividends paid to non-controlling interests
Lease payments
Other payments
Cash flows used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
Effect of exchange rates fluctuations
Cash and cash equivalents at 31 December
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Note
2021
2020
Attributable to shareholders of the Parent
164,134
59,033
RUB million
Share
capital
Share
premium
Retained
earnings
Actuarial
losses
Foreign
currency
translation
reserve
Attributable
to non-
controlling
interests
Total
Total
equity
Balance at 1 January 2020
372
7,494
111,054
(689)
7,236
125,467
170
125,637
Total comprehensive income
Profit/(loss) for the year
Actuarial losses, note 27
Foreign currency translation
difference
Transactions with owners
recognised directly in equity
Dividends to shareholders, note 23
Other
-
-
-
-
-
-
-
-
-
-
16,932
-
-
(38,850)
(249)
-
(28)
-
-
-
-
-
16,932
(28)
2,345
2,345
(11)
16,921
-
-
(28)
2,345
-
-
(38,850)
(249)
(30)
(38,880)
-
(249)
Balance at 31 December 2020
372
7,494
88,887
(717)
9,581
105,617
129
105,746
Effect of change in accounting
policy, note 4
-
-
1,870
-
-
1,870
-
1,870
Balance at 1 January 2021
372
7,494
90,757
(717)
9,581
107,487
129
107,616
Total comprehensive income
Profit/(loss) for the year
Actuarial losses, note 27
Foreign currency translation
difference
Transactions with owners
recognised directly in equity
Dividends to shareholders, note 23
-
-
-
-
-
-
-
-
129,697
-
-
(72,261)
-
(36)
-
-
-
-
(350)
129,697
(23)
129,674
(36)
(350)
-
-
(36)
(350)
-
(72,261)
-
(72,261)
Balance at 31 December 2021
372
7,494
148,193
(753)
9,231
164,537
106
164,643
8, 9
11
25
25
12
23
26
22
27,676
198
192,008
(10,855)
(38,667)
17,490
159,976
(28,806)
(4,945)
126,225
(47,951)
(1,141)
724
(48,368)
61,622
(50,081)
-
(72,260)
-
(1,950)
-
(62,669)
15,188
8,460
(1,938)
21,710
26,626
209
85,868
(1,843)
(2,316)
12,612
94,321
(6,462)
(4,121)
83,738
(40,878)
(1,220)
879
(41,219)
63,520
(66,182)
(292)
(38,852)
(30)
(1,951)
(249)
(44,036)
(1,517)
8,236
1,741
8,460
The consolidated statement of сash flows is to be read in conjunction with the notes to, and forming part of, the consolidated financial statements.
286
The consolidated statement of сhanges in equity is to be read in conjunction with the notes to, and forming part of, the consolidated financial statements. 287
Additional Information
Notes to the consolidated financial statements for 2020
(d) Presentation currency
1. BACKGROUND
(a) Organisation and operations
PJSC “PhosAgro” (the “Company” or the “Parent”) is a public joint stock company registered in accordance with the Civil Code of the Russian Federation.
PJSC “PhosAgro” and its subsidiaries (together referred to as the “Group”) comprise Russian legal entities and foreign trading subsidiaries. The Company was
registered in October 2001. The Company’s location 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), Chere-
povets (Vologda region), Balakovo (Saratov region) and Volkhov (Leningrad region), and their distribution across the Russian Federation and abroad.
As at 31 December 2021, the Company’s key shareholders are two entities (Adorabella AG, Chlodwig Enterprises AG) registered in Switzerland that together
hold approximately 44% of the Company’s ordinary shares in total and Mr. Vladimir S. Litvinenko holding approximately 21% of the Company’s ordinary
shares. The above mentioned companies’ shares are ultimately owned by trusts, where the economic beneficiary is Mr. Andrey G. Guryev and his family
members.
(b) 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 (note 31). The Russian economy contin-
ues to be negatively impacted by ongoing political tension in the region and international sanctions against certain Russian companies and individuals.
In March 2020, the World Health Organisation declared the outbreak of COVID-19 a global pandemic. In response to the pandemic, the Russian author-
ities implemented numerous measures attempting to contain the spreading and impact of COVID-19, such as travel bans and restrictions, quarantines,
shelter-in-place orders and limitations on business activity, including closures. Some of the above measures were subsequently relieved, however, as of
31 December 2021, the global infection levels remain high, vaccination rate is relatively low, and there is a risk that additional restrictions may be imposed in
subsequent periods, including due to emerging new variants of the virus.
In 2021 the Russian economy demonstrated positive dynamics in recovery from the pandemic. This trend was also supported by the global economic recovery
and higher prices on global commodity markets. However, higher prices on certain markets in Russia and globally also contribute to the inflation in Russia.
These consolidated financial statements are presented in RUB. All financial information presented in RUB has been rounded to the nearest
million, except per share amounts.
The translation from USD and EUR into RUB, where applicable, was performed as follows:
Assets and liabilities in USD and EUR as at 31 December 2021 and 31 December 2020 were translated at the following closing exchange
rates:
Closing exchange rate
31 December 2021
31 December 2020
RUB to USD 1
RUB to EUR 1
74.2926
73.8757
84.0695
90.6824
Profit and loss items for the year ended 31 December 2021 and 31 December 2020 were translated at the average exchange rate for
the appropriate month:
Average exchange rate for the month
RUB to USD 1
RUB to EUR 1
RUB to USD 1
RUB to EUR 1
2021
2020
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Information
January
February
March
April
May
June
July
August
September
October
November
December
74.2291
74.3842
74.4151
76.0977
74.0438
72.5106
73.9194
73.5942
72.8914
71.4981
72.6024
73.7172
90.5062
89.9403
88.6904
90.8178
89.8856
87.4537
87.3794
86.6334
85.9412
82.9586
82.9339
83.3260
61.7823
63.8836
73.3183
75.2321
72.6187
69.2239
71.2853
73.7998
75.6621
77.5924
77.0462
74.0563
68.7249
69.7001
81.0512
81.9481
79.0550
77.9624
81.3800
87.3414
89.2870
91.2900
91.0875
90.0734
Management of the Group has considered events and conditions that could give rise to material uncertainties and concluded that the range of possible out-
comes does not cast significant doubt over the Group’s ability to continue as a going concern.
> Equity items arising during the year are recognised at the exchange rate ruling at the date of transaction. The resulting foreign exchange
The future effects of the current economic situation and the above measures are difficult to predict, and management’s current expectations and estimates
could differ from actual results.
difference is recognised in other comprehensive income.
(e) Use of estimates and judgments
2. BASIS OF PREPARATION
(a) Statement of compliance
These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the Inter-
national Accounting Standards Board.
The Group additionally prepares IFRS consolidated financial statements in the Russian language in accordance with the Federal Law No. 208-FZ On consoli-
dated financial reporting.
(b) Basis of measurement
The consolidated financial statements are prepared on the historical cost basis except for the financial assets measured at fair value.
(c) 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, except for
foreign trading subsidiaries, where the functional currency is USD, EUR and other currencies.
The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities. Actual results may differ
from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimates are revised and in any future periods affected.
Information about critical assumptions and estimation uncertainties that have the most significant effect on the amounts recognised in
the consolidated financial statements is included in the following notes:
> Note 3 (c) (iii) – estimated useful lives of property, plant and equipment;
> Note 17 – recognition of deferred tax assets: availability of future taxable profit against which carry-forward tax losses can be used;
> Note 3 (f) – derecognition of trade receivables under the securitisation arrangement.
288
289
Additional Information (f) Adoption of new and revised standards and interpretations
(ii) Loss of control
The following amended standards became effective from 1 January 2021, but did not have any material impact on the Group:
> COVID-19-Related Rent Concessions Amendment to IFRS 16 (issued on 28 May 2020 and effective for annual periods beginning on or after 1 June 2020).
> Interest rate benchmark (IBOR) reform – phase 2 amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (issued on 27 August 2020 and effective for
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the oth-
er components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If
the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Sub-
sequently it is accounted for as an equity-accounted investee or as measured at FVOCI financial asset depending on the level of influence
retained.
annual periods beginning on or after 1 January 2021).
(g) New standards and interpretations not yet adopted
A number of new standards and interpretations have been issued that are mandatory for the annual periods beginning on or after 1 January 2022 or later,
and which the Group has not early adopted, but is in process of assessing the impact on the Group’s consolidated financial statements.
> Sale or Contribution of Assets between an Investor and its Associate or Joint Venture – Amendments to IFRS 10 and IAS 28 (issued on 11 September 2014
and effective for annual periods beginning on or after a date to be determined by the IASB).
> IFRS 17 “Insurance Contracts” (issued on 18 May 2017 and effective for annual periods beginning on or after 1 January 2023).
> Amendments to IFRS 17 and an amendment to IFRS 4 (issued on 25 June 2020 and effective for annual periods beginning on or after 1 January 2023).
> Classification of liabilities as current or non-current – Amendments to IAS 1 (issued on 23 January 2020 and effective for annual periods beginning on or
after 1 January 2022).
(iii) Acquisitions and disposals of non-controlling interests
Any difference between the consideration paid to acquire a non-controlling interest, and the carrying amount of that non-controlling
interest, is recognised in equity.
Any difference between the consideration received from disposal of a portion of a Group’s interest in the subsidiary and the carrying
amount of that portion, including attributable goodwill, is recognised in equity.
(iv) Associates
Associates are those enterprises in which the Group has significant influence, but not control, over the financial and operating policies.
The consolidated financial statements include the Group’s share of the total recognised gains and losses of associates on an equity ac-
counted basis, from the date that significant influence effectively commences until the date that significant influence effectively ceases.
Dividends received from associates reduce the carrying value of the investment in associates. When the Group’s share of losses exceeds
the Group’s interest in the associate, that interest is reduced to nil and recognition of further losses is discontinued except to the extent
that the Group has incurred obligations in respect of the associate.
> Classification of liabilities as current or non-current, deferral of effective date – Amendments to IAS 1 (issued on 15 July 2020 and effective for annual
periods beginning on or after 1 January 2023).
(v) Transactions eliminated on consolidation
> Proceeds before intended use, Onerous contracts – cost of fulfilling a contract, Reference to the Conceptual Framework – narrow scope amendments to
IAS 16, IAS 37 and IFRS 3, and Annual Improvements to IFRSs 2018-2020 – amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 (issued on 14 May 2020 and
effective for annual periods beginning on or after 1 January 2022).
> Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting policies (issued on 12 February 2021 and effective for annual periods
beginning on or after 1 January 2023).
> Amendments to IAS 8: Definition of Accounting Estimates (issued on 12 February 2021 and effective for annual periods beginning on or after
1 January 2023).
> Covid-19-Related Rent Concessions – Amendments to IFRS 16 (issued on 31 March 2021 and effective for annual periods beginning on or after
1 April 2021).
> Deferred tax related to assets and liabilities arising from a single transaction – Amendments to IAS 12 (issued on 7 May 2021 and effective for annual
periods beginning on or after 1 January 2023).
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.
(a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, 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. The financial statements of subsidiaries are included in the con-
solidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been
changed when necessary to align them with the policies adopted by the Group.
Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated in preparing
the consolidated financial statements. Unrealised gains arising from transactions with associates and jointly controlled enterprises are
eliminated to the extent of the Group’s interest in the enterprise. Unrealised gains resulting from transactions with associates are eliminat-
ed against the investment in the associate. Unrealised losses are eliminated in the same way as unrealised gains except that they are only
eliminated to the extent that there is no evidence of impairment.
(b) Foreign currencies
Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at the exchange rate ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to
the functional currency at the exchange rate ruling at that date. Non-monetary assets and liabilities denominated in foreign curren-
cies that are stated at historical cost are translated to the functional currency at the exchange rate ruling at the date of the transaction.
Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at the exchange rate rul-
ing at the dates the fair values were determined. Foreign exchange differences arising on translation are recognised in the profit or loss.
(c) Property, plant and equipment
(i) Owned assets
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. The cost of property, plant and
equipment at the date of transition to IFRS was determined by reference to its fair value at that date (“deemed cost”) as determined by an
independent appraiser.
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 their intended use and
capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that
equipment.
Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as sep-
arate items of property, plant and equipment.
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291
Additional Information (ii) Subsequent expenditure
Expenses in connection with ordinary maintenance and repairs are recognised in the consolidated statement of profit or loss and other comprehensive in-
come as they are incurred.
ucts and processes, is capitalised if the product or process is technically and commercially feasible and the Group has sufficient resources
to complete development. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of over-
heads. Other development expenditure is recognised in the profit or loss as an expense as incurred. Capitalised development expenditure is
stated at cost less accumulated amortisation and impairment losses.
Expenses in connection with periodic maintenance on property, plant and equipment are recognised as assets and depreciated on a straight-line basis over
the period until the next periodic maintenance, provided the criteria for capitalizing such items have been met.
(ii) Other intangible assets
Expenses incurred in connection with major replacements and renewals of property, plant and equipment are capitalised and depreciated on a systematic
basis.
(iii) Depreciation
Depreciation is charged to the profit or loss on a straight-line basis over the estimated useful lives of the individual assets. Depreciation commences on
the month of acquisition or, in respect of internally constructed assets, from the month when an asset is completed and ready for use. Land is not depreciat-
ed.
The estimated useful lives as determined when adopting IFRS (1 January 2005) for the assets reflected on the statement of financial position at that date are
as follows:
Buildings
Plant and equipment
Fixtures and fittings
Tangible fixed assets acquired after the date of adoption of IFRS, are depreciated over the following useful lives:
Buildings
Plant and equipmen
Fixtures and fittings
12 to 17 years;
4 to 15 years;
3 to 6 years.
10 to 60 years;
5 to 35 years;
2 to 25 years.
Management assesses the remaining useful lives in accordance with the current technical conditions of the assets and estimated period during which
the assets are expected to earn benefits for the Group.
(iv) Capitalisation of borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial time to get ready for intended
use or sale (qualifying assets) are capitalized as part of the costs of those assets.
Capitalisation of borrowing costs continues up to the date when the assets are substantially ready for their use or sale.
The Group capitalises borrowing costs that could have been avoided if it had not made capital expenditure on qualifying assets. Borrowing costs capitalised
are calculated at the Group’s average funding cost (the weighted average interest cost is applied), except to the extent that funds are borrowed specifically
for the purpose of obtaining a qualifying asset. Where this occurs, actual borrowing costs are capitalised.
Borrowing costs capitalized are presented as part of cash flows from investing activities in the consolidated statement of cash flows.
Other intangible assets acquired by the Group are represented by Oracle software, which has finite useful life and is stated at cost less ac-
cumulated amortisation and impairment losses.
(iii) Amortisation
Intangible assets, other than goodwill, are amortised on a straight-line basis over their estimated useful lives from the date the asset is
available for use. The estimated useful lives are 3 – 10 years.
(e) Financial instruments
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other receivables, cash and cash equiv-
alents, loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any
directly attributable transaction costs.
The Group financial assets are classified in the following measurement categories based on the Group’s business model for managing
the financial assets and the contractual terms of the cash flows: financial assets at amortised cost; financial assets at fair value (either
through other comprehensive income or profit or loss).
Financial assets at amortised cost. Financial asset is measured at amortised cost if it meets both of the following conditions:
• the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding.
The financial assets are measured at amortised cost using the effective interest method, less any impairment losses. Any gains or losses
arising from derecognition are recognised directly in profit or loss.
Financial assets at fair value through other comprehensive income (“FVOCI”). Financial assets are classified and measured at fair value
through other comprehensive income if they meet both of the following conditions:
> they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets;
and
> their contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
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(v) Advances issued for property, plant and equipment
amount outstanding.
A prepayment is classified as non-current when the goods or services relating to the prepayment are expected to be obtained after one year, or when
the prepayment relates to an asset which will itself be classified as non-current upon initial recognition.
These financial assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign ex-
change gains and losses and impairment are recognised in profit or loss.
(d) Intangible assets
(i) Research and development
Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in
the profit or loss as an expense as incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved prod-
Financial assets at fair value through profit or loss (“FVPL”). Financial asset that do not meet the criteria for amortised cost or FVOCI are
measured at fair value through profit or loss.
(f) Securitisation arrangements
The Group enters into non-recourse securitisation arrangements under which insured trade receivables can be sold to a bank for cash
proceeds.
292
293
Additional Information Trade receivables are derecognised from the statement of financial position as the Group does not retain substantially all risks and rewards of ownership,
except for the amount of security deposit which represents insurance deductible amount for the receivables transferred to a bank. A deposit is recognised
in trade receivables in the consolidated statement of financial position of the Group. The Group continues to collect and service the receivables and then
transfers to the bank the collected amounts of the trade receivables sold.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impair-
ment losses are recognised in the profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to
reduce the carrying amount of any goodwill allocated to the units, if any, and then to reduce the carrying amount of the other assets in
the unit (group of units) on a pro rata basis.
The portfolio of trade receivables that can be sold to a bank meets the criteria for “held to collect and sell” business model and such trade receivables are
classified and measured at fair value through other comprehensive income.
Cash collected from the customers and not yet transferred to the bank at the reporting date is presented within other payables in the consolidated state-
ment of financial position of the Group. Securitisation fees are recognised as finance costs.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are
assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there
has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that
the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation,
if no impairment loss had been recognised.
(g) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, and other short-term highly liquid investments with original maturities of
three months or less.
Bank deposits held for longer than three months that are repayable on demand within several working days without penalties or that can be redeemed/
withdrawn, subject to the interest income forfeited, are classified as cash equivalents if the deposits are held to meet short-term cash needs and there is no
significant risk of a change in value as a result of an early withdrawal.
(h) Inventories
Inventories are stated at the lower of cost and net realisable value. The cost of inventory (finished goods and goods for resale) for distribution companies is
determined on the first-in, first-out (FIFO) basis. The cost of inventories for production companies is based on the weighted average principle and includes
expenditure incurred in acquiring the inventories and 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.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.
(j) Leases
As a lessee
Applying IFRS 16 for all leases (except as noted below), the Group:
> Recognises right-of-use assets and lease liabilities in the consolidated statement of financial position, initially measured at the present
value of future lease payments;
> Recognises depreciation of right-of-use assets and interest on lease liabilities in the consolidated statement of profit or loss and other
comprehensive income; and
> Separates the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented within
operating activities) in the consolidated statement of cash flows.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and making cer-
tain adjustments to reflect the terms of the lease and type of the asset leased.
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Spare parts to be used for construction and in repairs capitalised are classified as non-current spare parts.
Lease payments included in the measurement of the lease liability comprise the following:
Catalysts to be used in production during the period of more than 1 year are classified as part of non-current assets and written-off to the production cost
based on the volume of goods produced. Catalysts to be used in production within 1 year are classified as part of inventories
> fixed payments;
(i) Impairment
Financial assets
The Group recognises loss allowances for expected credit loss (ECLs) on financial asset measured at amortised cost and debt investments measured at fair
value through other comprehensive income (“FVOCI”). The loss allowances are measured on either of the following bases: 12-month ECLs that result from
default events that are possible within the 12 months after the reporting date; and lifetime ECLs that result from all possible default events over the expect-
ed life of a financial instrument.
For trade receivables the Group estimated the expected credit losses for the entire period, applying a simplified approach to measuring expected credit loss-
es, which uses lifetime expected loss allowance. In the terms of calculating the expected credit loss, the Group considers the credit rating for each counter-
party, adjusted with forward-looking factors specific to the debtors, historical credit loss experience and economic environment in which they operate.
If, in a subsequent period, the fair value of an impaired financial assets increases and the increase can be related objectively to an event occurring after
the impairment loss was recognised in profit or loss, then the impairment loss is reversed, with the amount of the reversal recognised in profit or loss.
Non-financial assets
> variable lease payments that depend on the rate;
> amounts expected to be payable under a residual value guarantee.
Lease liability is measured at amortised cost using the effective interest method. It is revalued when there is a change in future lease pay-
ments arising from adjusted interest rate, extension or termination option and other events.
Under IFRS 16, right-of-use assets are tested for impairment in accordance with IAS 36 Impairment of Assets.
For short-term leases (lease term of 12 months or less) and leases of low-value assets the Group has opted to recognise a lease expense on
a straight-line basis as permitted by IFRS 16. This expense is presented within cost of sales, administrative expenses and selling expenses in
the consolidated statement of profit or loss and other comprehensive income.
(k) Share capital
(i) Repurchase of share capital
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable costs, is de-
ducted from equity.
The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.
(ii) Dividends
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).
Dividends are recognised as a liability in the period in which they are declared.
294
295
Additional Information (l) Financial liabilities
(p) Revenues
The Group’s financial liabilities comprise trade and other payables, borrowings and bonds which are measured at amortised cost. The Group derecognises
a financial liability when its obligation specified in the contract is discharged or cancelled or expires.
(m) Employee benefits
(i) Pension plans
The Group’s net obligation in respect of defined benefit post-employment plans, including pension plans, is calculated separately for each plan by estimat-
ing 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 deter-
mine its present value, and the fair value of any plan assets, if any, is 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 benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised immediately as an expense
in the profit or loss. To the extent the benefits vest immediately, the expense is recognised immediately in the profit or loss.
All actuarial gains and losses are recognised in full as they arise in other comprehensive income.
(ii) Long-term service benefits other than pensions
The Group’s net obligation in respect of long-term service benefits, other than pension plans, is the amount of future benefits that employees have earned
in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present
value and the fair value of any related assets is 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. All actuarial gains and losses are recognised in full as they arise in other comprehensive income.
(iii) State pension fund
The Group makes contributions for the benefit of employees to Russia’s State pension fund. The contributions are expensed as incurred.
(n) Provisions
Revenue from contracts with customers is recognised when control of the goods or services is transferred to a customer. The amount of
revenue recognised reflects the consideration the Group expects to be entitled in exchange for goods or services, taking into account any
trade, volume and other discounts. Advances received before the control passes to a customer are recognised as the contract liabilities.
The amount of consideration does not contain a significant financial component as payment terms for the majority of contracts are less
than one year. No information is provided about remaining performance obligations as at the reporting date that have an original expected
duration of one year or less, as allowed by IFRS 15.
Contracts with customers for the supply of goods use a variety of delivery terms. The Group determined that under the terms of the major-
ity contracts for the supply of mineral fertilizers the Group undertakes to provide delivery and the related delivery services after the transfer
of control over the goods to the buyer at the loading port. Under IFRS 15, these services are a separate performance obligation, which
revenue must be recognised during the period of delivery as revenue from logistics activities. The Group recognises revenue from these
logistics services at the time of delivery, due to the fact that the potential difference is calculated and recognised as insignificant.
In the revenue disclosure the sales of certain product groups include the proceeds from logistics services. Costs related to rendering of
logistics services are mainly represented by transportation costs and included in cost of group products sold.
(q) Finance income and finance costs
Finance income comprises interest income, dividend income, gain arising from operations with foreign currency, unwinding of discount on
financial assets and share of profit of associates and foreign exchange gains on financing activities. Interest income is recognised as it ac-
crues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right
to receive payment is established.
Finance costs comprise interest expense on borrowings, interest expense on lease liabilities, bank fees, securitisation fees, loss arising from
operations with foreign currency, share of l oss of associates, increase in provision for bad debts for financial investments, interest expense
on defined benefit obligations and foreign exchange losses on financing activities. Borrowing costs that are not directly attributable to
the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.
Foreign currency gains and losses, gains and losses arising from operations with foreign currency, securitisation fees, share of profit and
losses of associates are reported on a net basis.
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A provision is recognised when the Group has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic
benefits will be required to settle the obligation. If the effect is material, 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, where appropriate, the risks specific to the liability.
(r) Overburden removal expenditure
(o) Income tax
In open pit apatite rock mining operations, it is necessary to remove the overburden and other waste in order to access the economically
recoverable resources.
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recog-
nised in other comprehensive income, in which case it is recognised in other comprehensive income.
Stripping costs incurred during the pre-production phase of the open pit mine are capitalised as the cost of the development of the mining
property and amortised over the life of the mine.
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 using the balance sheet method, providing for 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 assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differenc-
es relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not
recognised for taxable temporary differences arising on the initial recognition of goodwill. 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 if there is a legally enforceable right to offset current tax assets and liabilities, and they relate to income taxes levied by
the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their
tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference 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.
According to the Group’s approach to stripping, the ore, which becomes accessible after the overburden removal, is extracted within no
more than four months. Therefore, the stripping ratio (volume of overburden removed over the volume of resources extracted) is expected
to stay relatively constant over the future periods and stripping costs incurred during the production phase of the open pit mine are recog-
nised in the profit or loss as incurred.
(s) Earnings per share
The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or
loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the peri-
od, adjusted for own shares held.
If the number of ordinary shares outstanding increases/ (decreases) as a result of a share split/ (reverse share split), the calculation of
the EPS for all periods presented is adjusted retrospectively.
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297
Additional Information (t) Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including reve-
nues 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 top management to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial
information is available. Segment results that are reported to the Group’s top management include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis.
4. CHANGE IN ACCOUNTING POLICY AND RECLASSIFICATIONS
Starting from 1 January 2021, the Group:
(a) Changed its accounting policy on the recognition of logistics expenses to the point of sale. The Group started to capitalise such logistics expenses in
the cost of finished goods, while previously these expenses were recognised as part of selling expenses as they occurred. The Group also classified these
expenses as part of the cost of products sold, while previously these expenses were recognised as part of selling expenses. The comparative figures were
changed respectively to align them with the current year presentation. Balances at 1 January 2020 were not restated as having no material effect on the
financial statements.
(b) Changed the presentation of administrative and fixed selling expenses. The Group started to present these expenses together as administrative and
selling overhead expenses, while previously these expenses were presented separately as selling and as administrative expenses. The comparative figures
were changed respectively to align them with the current year presentation.
(c) Netted-off trade accounts receivable against other payables under the arrangement with the bank for the sale of accounts receivable described in note
29 (c).
(d) Separately presented spare parts to be used as part of non-current assets and made other reclassifications.
Management believes that the new accounting policy and change in classification and presentation of certain expenses will provide more relevant and
transparent information about the results of Group’s operations.
The tables below reconcile the carrying amounts of assets, liabilities, equity, expenses and cash flows as presented in accordance with the previous account-
ing policy and the new amounts after the changes were adopted.
Extract from the Consolidated Statement of Financial Position:
RUB million
Assets
Non-current spare parts (d)
Non-current assets
Trade and other receivables (c), (d)
VAT and other taxes receivable (d)
Income tax receivable (d)
Inventories (a), (d)
Current assets
Total assets
31 December 2020
(as previously reported)
Adjustment/
reclassification
31 December 2020
(as presented)
-
248,080
32,887
-
-
32,636
74,294
322,374
4,308
4,308
(15,372)
10,285
479
(2,056)
(6,664)
(2,356)
4,308
252,388
17,515
10,285
479
30,580
67,630
320,018
RUB million
Equity
Retained earnings (a)
Equity attributable to shareholders of the Parent (a)
Total equity
Liabilities
Deferred tax liabilities (a)
Non-current liabilities
Trade and other payables (c), (d)
Income tax payable (d)
VAT and other taxes payable (d)
Current liabilities
Total equity and liabilities
31 December 2020
(as previously
reported)
Adjustment/
reclassification
31 December 2020
(as presented)
88,887
105,617
105,746
11,196
120,233
39,152
-
-
96,395
322,374
1,870
1,870
1,870
382
382
(9,283)
1,000
3,675
(4,608)
(2,356)
90,757
107,487
107,616
11,578
120,615
29,869
1,000
3,675
91,787
320,018
Extract from the Consolidated Statement of Profit or Loss and Other Comprehensive Income:
RUB million
Cost of sales (d)
Cost of Group products sold (a), (d)
Cost of products for resale (a), (d)
Gross profit
Selling expenses (b)
Administrative expenses (b)
Administrative and selling overhead expenses (b)
Foreign exchange gain from operating activities, net (d)
Operating profit
Foreign exchange loss (d)
Foreign exchange loss from financing activities, net (d)
Extract from the Consolidated Statement of Changes in Equity:
RUB million
Retained earnings (a)
Total
Extract from the Consolidated Statement of Cash Flows:
RUB million
Cash flows from operating activities
Operating profit (d)
Operating profit before changes in working capital and provisions
Decrease in trade and other receivables (d)
Increase in trade and other payables (d)
2020
(as previously
reported)
(133,335)
-
-
120,544
(39,588)
(17,828)
-
-
57,654
(25,070)
-
Reclassification
2020
(as presented)
133,335
(157,370)
(9,333)
(33,368)
39,588
17,828
(24,048)
1,379
1,379
25,070
(26,449)
-
(157,370)
(9,333)
87,176
-
-
(24,048)
1,379
59,033
-
(26,449)
31 December 2020
(as previously
reported)
88,887
105,746
Adjustment
31 December 2020
(as presented)
1,870
1,870
90,757
107,616
2020
(as previously
reported)
Reclassification
2020
(as presented)
57,654
84,489
(345)
12,020
1,379
1,379
(1,971)
592
59,033
85,868
(2,316)
12,612
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Additional Information 5. DETERMINATION OF FAIR VALUES
Segment information for the year ended 31 December 2021 is as follows:
When measuring the 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 in 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 for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
> Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the 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 informa-
tion about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
(a) Financial assets and liabilities measured at amortised cost
The fair values of financial assets and liabilities presented by loans issued, trade and other receivables, cash and cash equivalents, trade and other payables
approximate their carrying amounts as at the reporting date.
The fair values of eurobonds are determined for disclosure purposes based on quoted market prices and included in level 1 of the fair value hierarchy.
The fair values of loans and borrowings are categorised as Level 3 of the fair value hierarchy. The fair values are calculated based on the present value of fu-
ture principal and interest cash flows, discounted at the market rate of interest at the reporting date.
(b) Financial instruments measured at fair value
The fair value of financial assets measured at fair value through profit or loss is determined using valuation techniques and categorised as Level 3 of the fair
value hierarchy.
6. SEGMENT INFORMATION
Operating segments are components that engage in business activities that may earn revenues or incur expenses, whose operating results are regularly re-
viewed by the chief operating decision maker (CODM) and for which discrete financial information is available. The CODM has been identified as the Group’s
top management.
The Group has two reportable segments, as described below, which are the Group’s strategic business units. The strategic business units offer different
products, and they require different technology and marketing strategies. The following summary describes the operations in each of the Group’s reportable
segments:
> Phosphate-based products segment includes mainly production and distribution of ammophos, diammonium phosphate, sodium tripolyphosphate and
other phosphate-based and complex (NPK) fertilisers on the factories located in Cherepovets, Balakovo and Volkhov, and production and distribution of
apatite concentrate extracted from the apatite-nepheline ore, which is mined and processed in Kirovsk;
> Nitrogen-based products segment includes mainly production and distribution of ammonia, ammonium nitrate and urea on the factory located in
Cherepovets.
Certain revenue and expenses are not allocated to any particular segment and are, therefore, included in the “other operations” column. None of these op-
erations meet any of the quantitative thresholds for determining reportable segments.
The CODM assesses the performance of the reportable segments based on, among other factors, a measure of EBITDA (operating profit adjusted by depre-
ciation and amortization). Since the EBITDA term is not a standard IFRS measure, its definition may differ from that of other companies.
Information regarding the results of each reportable segment is included below.
RUB million
Segment revenue and profitability
Segment external revenues,
thereof:
Export
Domestic
Cost of Group products sold
Cost of products for resale
Gross segment profit
Administrative and selling overhead expenses
Taxes, other than income tax, net
Other expenses, net
Foreign exchange loss from operating activities, net
Operating profit
Certain items of profit and loss
Depreciation and amortisation
EBITDA
Gain from revaluation of financial assets measured at fair value
Finance income
Finance costs
Foreign exchange loss from financing activities, net
COVID-19 related expenses
Profit before tax
Phosphate-
based products
Nitrogen-based
products
Other
operations
Total
332,999
238,033
94,966
71,851
64,722
7,129
(175,036)
(29,481)
-
157,963
(23,001)
(5,702)
(2,881)
(200)
-
42,370
(4,378)
(236)
(550)
(97)
126,179
37,109
(22,188)
148,367
978
603
(4,178)
(276)
(412)
(4,966)
42,075
205
127
(854)
(245)
(59)
122,894
36,283
15,638
7,276
8,362
(1,565)
(12,725)
1,348
(466)
(8)
(18)
(10)
846
(522)
1,368
10
48
(12)
(10)
(4)
878
420,488
310,031
110,457
(206,082)
(12,725)
201,681
(27,845)
(5,946)
(3,449)
(307)
164,134
(27,676)
191,810
1,193
778
(5,044)
(531)
(475)
160,055
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Additional Information Segment information for the year ended 31 December 2020 is as follows:
8. COST OF GROUP PRODUCTS SOLD
RUB million
Segment revenue and profitability
Segment external revenues,
thereof:
Export
Domestic
Cost of Group products sold
Cost of products for resale
Gross segment profit
Administrative and selling overhead expenses
Taxes, other than income tax, net
Other expenses, net
Foreign exchange gain from operating activities, net
Operating profit
Certain items of profit and loss
Amortisation and depreciation
EBITDA
Finance income
Finance costs
Foreign exchange loss from financing activities, net
COVID-19 related expenses
Profit before tax
The analysis of export revenue by regions is as follows:
RUB million
Europe
South America
North America
India
Africa
CIS
Asia
7. REVENUES
RUB million
Phosphate-based products
Sales of chemical fertilisers
Sales of apatite concentrate
Sales of nepheline concentrate
Sales of other phosphate-based products and services
Nitrogen-based products
Other
Phosphate-based
products
Nitrogen-based
products
Other operations
Total
RUB million
Production expense for Group goods sold
2021
(163,034)
2020
(124,197)
203,561
38,701
11,617
253,879
135,506
68,055
(131,937)
-
71,624
(20,128)
(2,773)
(2,239)
1,168
47,652
(20,830)
68,482
798
(4,544)
(22,806)
(1,299)
19,801
31,530
7,171
(23,654)
-
15,047
(3,413)
(179)
(273)
211
11,393
(5,392)
16,785
149
(897)
(3,642)
(131)
6,872
1,771
9,846
(1,779)
(9,333)
505
(507)
(10)
-
-
(12)
(404)
392
28
(14)
(1)
(4)
(3)
2021
116,771
103,893
31,780
19,765
17,916
12,171
7,735
168,807
85,072
(157,370)
(9,333)
87,176
(24,048)
(2,962)
(2,512)
1,379
59,033
(26,626)
85,659
975
(5,455)
(26,449)
(1,434)
26,670
2020
66,516
41,915
12,287
21,623
12,336
10,512
3,618
310,031
168,807
2021
332,999
297,009
24,397
1,382
10,211
71,851
15,638
2020
203,561
167,718
25,877
1,090
8,876
38,701
11,617
420,488
253,879
Depreciation
Materials and services
Sulphur and sulphuric acid
Potash
Salaries and social contributions
Ammonia
Natural gas
Repair and maintenance expenses
Transportation of phosphate rock
Electricity
Fuel
Drilling and blasting operations expenses
Ammonium sulphate
Logistics expenses for Group goods sold
Freight, port and stevedoring expenses
Russian Railways infrastructure tariff and operators’ fees
Customs duties
Other services and materials
9. ADMINISTRATIVE AND SELLING OVERHEAD EXPENSES
RUB million
Administrative overhead expenses:
Salaries and social contributions
Professional services
Depreciation and amortisation
Security and fire safety services
Other
Selling overhead expenses:
Salaries and social contributions
Depreciation and amortisation
Materials and services
(24,812)
(23,120)
(17,707)
(16,574)
(15,286)
(14,277)
(12,635)
(11,373)
(9,105)
(6,740)
(5,578)
(3,486)
(2,341)
(43,048)
(28,587)
(10,728)
(2,483)
(1,250)
(23,743)
(19,501)
(4,360)
(12,253)
(13,807)
(4,802)
(12,342)
(10,134)
(8,134)
(6,311)
(3,885)
(3,168)
(1,757)
(33,173)
(19,128)
(11,452)
(1,482)
(1,111)
(206,082)
(157,370)
2021
(21,083)
(13,493)
(1,971)
(1,384)
(1,053)
(3,182)
(6,762)
(4,002)
(1,480)
(1,280)
2020
(17,828)
(11,249)
(1,929)
(1,368)
(886)
(2,396)
(6,220)
(3,484)
(1,515)
(1,221)
(27,845)
(24,048)
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302
303
Additional Information 10. TAXES, OTHER THAN INCOME TAX, NET
13. INCOME TAX EXPENSE
The Company’s applicable corporate income tax rate is 20% (2020: 20%).
RUB million
Current tax expense
Deferred income tax - origination and reversal of temporary differences, including change in
unrecognised assets
Income tax expense
Reconciliation of effective tax rate:
Profit before tax
Income tax at applicable tax rate
Deferred tax assets decrease
Over/(under) provided in respect of prior years
Tax effect of items which are not deductible or
assessable for taxation purposes
Effect of tax rates in foreign jurisdictions
Effect of reduction in tax rate
Change in tax incentive
2021
RUB million
160,055
(32,011)
-
78
(1,017)
431
2,163
(25)
%
100
(20)
-
-
(1)
1
1
-
2021
(31,073)
692
(30,381)
2020
RUB million
26,670
(5,334)
(4,800)
(9)
(864)
317
716
225
(30,381)
(19)
(9,749)
2020
(8,045)
(1,704)
(9,749)
%
100
(20)
(18)
-
(3)
1
2
1
(37)
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Information
RUB million
Mineral extraction tax
Property tax
Land tax
Environment pollution payment
VAT included in expenses
Using water objects payment
Other taxes
11. OTHER EXPENSES, NET
RUB million
Social expenditures
Increase in provision for inventory obsolescence
Loss on disposal of property, plant and equipment and intangible assets
Increase in provision for bad debt and expected credit losses allowance
Gain/(loss) on disposal of inventories
Reversal/(accrual) of contingent liabilities
Other income, net
12. FINANCE INCOME AND FINANCE COSTS
RUB million
Interest income
Unwinding of discount on financial assets
Share of profit of associates
Dividend income
Other finance income
Finance income
Interest expense on borrowings
Interest expense on lease liabilities
Bank fees (incl. early eurobond partial redemption fees)
Securitisation fees
Increase in provision for bad debts for financial investments
Interest expense on defined benefit obligations
Other finance costs
Finance costs
2021
(3,605)
(1,694)
(222)
(211)
(113)
(53)
(48)
2020
(919)
(1,397)
(258)
(174)
(129)
(44)
(41)
(5,946)
(2,962)
2021
(3,378)
(370)
(198)
(125)
387
2
233
2020
(2,570)
(18)
(209)
(114)
(73)
(119)
591
(3,449)
(2,512)
2021
643
64
13
-
58
778
(3,910)
(395)
(221)
(146)
(81)
(48)
(243)
2020
338
60
37
242
298
975
(3,647)
(485)
(517)
(141)
(503)
(53)
(109)
(5,044)
(5,455)
304
305
Additional Information 14. PROPERTY, PLANT AND EQUIPMENT
15. RIGHT-OF-USE ASSETS
The Group has the following types of right-of-use assets: railway wagons, production equipment, offices. The leases typically run for a peri-
od of 5 years, with an option to renew the lease after that date.
Buildings
Plant and
equipment
RUB Million
Cost
At 1 January 2020
Additions
Transfers from right-of-use assets (note 15)
Transfers
Disposals
Other movements
At 1 January 2021
Additions
Transfers to right-of-use assets (note 15)
Transfers
Disposals
Other movements
At 31 December 2021
Accumulated depreciation
At 1 January 2020
Transfers from right-of-use assets (note 15)
Depreciation charge
Disposals
Other movements
At 1 January 2021
Transfers to right-of-use assets (note 15)
Depreciation charge
Disposals
Other movements
At 31 December 2021
Net book value at 1 January 2020
Net book value at 1 January 2021
Net book value at 31 December 2021
Land and
buildings
Plant and
equipment
Fixtures and
fittings
Construction in
progress
94,482
1,757
-
10,653
(2,425)
138
104,605
1,529
-
11,760
(1,450)
(44)
164,929
4,013
16
25,253
(6,425)
175
187,961
4,406
(15)
18,110
(6,655)
(7)
116,400
203,800
(21,774)
(81,164)
-
(5,945)
2,289
(25)
(8)
(17,552)
6,343
97
15,649
2,477
-
-
(242)
16
17,900
3,031
-
-
(192)
(2)
20,737
(9,658)
-
(1,862)
234
(10)
(25,455)
(92,284)
(11,296)
-
(6,425)
1,263
8
7
(17,703)
6,560
10
-
(1,852)
179
1
(30,609)
(103,410)
(12,968)
36,995
37,590
-
(35,906)
(79)
-
38,600
34,866
-
(29,870)
(102)
-
43,494
-
-
-
-
-
-
-
-
-
-
-
72,708
79,150
85,791
83,765
95,677
100,390
5,991
6,604
7,769
36,995
38,600
43,494
Total
312,055
45,837
16
-
(9,171)
329
349,066
43,832
(15)
-
(8,399)
(53)
384,431
(112,596)
(8)
(25,359)
8,866
62
(129,035)
7
(25,980)
8,002
19
(146,987)
199,459
220,031
237,444
During the year ended 31 December 2021, the Group capitalised borrowing costs in the amount of RUB 1,141 million (2020: RUB 1,220 million) in the value
of property, plant and equipment using the weighted average interest rate of 2.86% per year (2020: 3.20% per year).
As at 31 December 2021, the most significant balances of the construction in progress related to the following investment projects:
16. INVESTMENTS IN ASSOCIATES
> Kirovsk mine extension and modernization. As at 31 December 2021, the Group has capitalised expenses of RUB 14,045 million (as at 31 December 2020:
Carrying values of the Group’s investments in associates are as follows:
RUB 10,758 million);
> MAP facilities construction in Volkhov. As at 31 December 2021, the Group has capitalised expenses of RUB 13,362 million (as at 31 December 2020: RUB
7,939 million);
RUB million
JSC Khibinskaya Teplovaya Kompaniya (Russia)
> Granulated ammonium sulphate facilities construction in Balakovo. As at 31 December 2021, the Group has capitalised expenses of RUB 1,862 million
JSC Giproruda (Russia)
(as at 31 December 2020: RUB 715 million);
> Aluminium fluoride production facilities development in Cherepovets. As at 31 December 2021, the Group has capitalised expenses of RUB 1,090 million
(as at 31 December 2020: RUB 2,180 million).
JSC Soligalichskiy izvestkovyi kombinat (Russia)
Total
RUB million
Net book value at 1 January 2020
New lease contracts and modification on existing lease contracts
Transfers to property, plant and equipment (note 14)
Depreciation
Disposals
Effect of foreign currency translation reserve
Net book value at 31 December 2020
Net book value at 1 January 2021
New lease contracts and modification on existing lease contracts
Transfers from property, plant and equipment (note 14)
Depreciation
Disposals
Effect of foreign currency translation reserve
Net book value at 31 December 2021
RUB million
Depreciation expense on right-of-use assets
Interest expense on lease liabilities
Expenses relating to short-term leases
Expenses relating to leases with variable payments
Amounts recognised in the consolidated statement of cash flows:
RUB million
Principal lease payments (note 26)
Interest lease payments (note 26)
Expenses relating to short-term leases
Expenses relating to leases with variable payments
Total payments
Amounts recognised in the consolidated statement of profit or loss and other comprehensive income:
109
146
-
(79)
(6)
15
185
185
395
-
(100)
(20)
(8)
452
6,782
1,934
(8)
(1,545)
(15)
2
7,150
7,150
1,087
8
(1,673)
(68)
(1)
6,503
2021
1,773
395
481
524
2021
(1,949)
(395)
(481)
(524)
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Total
6,891
2,080
(8)
(1,624)
(21)
17
7,335
7,335
1,482
8
(1,773)
(88)
(9)
6,955
2020
1,624
485
618
476
2020
(1,951)
(485)
(618)
(476)
(3,349)
(3,530)
31 December 2021
31 December 2020
Carrying
value
Share of
ownership
Carrying value
Share of
ownership
484
59
26
569
50%
25%
26%
463
62
31
556
50%
25%
26%
306
307
Additional Information 17. DEFERRED TAX ASSETS AND LIABILITIES
(a) Deferred tax assets and liabilities by type of temporary difference
RUB million
31 December 2020
Recognised in
profit or loss
Recognised
in other
comprehensive
income
Reclassification
1 January 2020
Deferred tax assets and liabilities are attributable to the following items:
RUB Million
Property, plant and equipment and intangible assets
Other long-term assets
Current assets
Liabilities
Tax loss carry-forwards
Unrecognised deferred tax assets
Tax assets/(liabilities)
Set off of tax
Net tax assets/(liabilities)
Assets
2021
375
71
2,449
1,825
6,881
(55)
11,546
(2,047)
9,499
Liabilities
2021
Net
2021
(13,714)
(13,339)
(256)
(809)
(205)
-
-
(14,984)
2,047
(185)
1,640
1,620
6,881
(55)
(3,438)
-
(12,937)
(3,438)
Assets
2020
383
115
1,322
1,921
5,962
(55)
9,648
(2,186)
7,462
Liabilities
2020
(12,390)
(51)
(1,012)
(311)
-
-
(13,764)
2,186
(11,578)
Net
2020
(12,007)
64
310
1,610
5,962
(55)
(4,116)
-
(4,116)
The deferred tax assets on tax loss carry-forwards relate to the Russian entities. Due to amendments to the Russian tax legislation, starting from 1 Janu-
ary 2017, tax losses for Russian tax purposes carried forward existing as at 31 December 2021 do not expire.
Management has developed a tax strategy to utilise the tax losses above. In assessing the recoverability of the tax losses, management considers a forecast
of future taxable profits of the Group and the Group’s tax position. The forecast is reviewed at each reporting date to ensure that the related tax benefit will
be realised.
As at 31 December 2021, no deferred tax liability for taxable temporary differences of RUB 714 million associated with investments in subsidiaries has been
recognised (31 December 2020: RUB 19,984 million), either because the Parent can control the timing of reversal of the temporary differences and it is
probable that the temporary differences will not reverse in the foreseeable future, or because the applicable tax rate is expected to be 0%.
(b) Movement in temporary differences during the year
Property, plant and equipment, right-
of-use assets and intangible assets
Other long-term assets
Current assets
Liabilities
Tax loss carry-forwards
Unrecognised deferred tax assets
(12,007)
64
692
1,610
5,962
(55)
(78)
63
(9)
(215)
(1,465)
-
Net tax (liabilities)/assets
(3,734)
(1,704)
(2)
9
24
3
-
-
34
-
-
-
-
-
-
-
(11,927)
(8)
677
1,822
7,427
(55)
(2,064)
18. OTHER NON-CURRENT ASSETS
RUB million
Loans issued to third parties, at amortised cost
Provision for loans issued to third parties
Loans issued to third parties, at amortised cost, net
Long-term accounts receivable
Provision for long-term accounts receivable
Long-term accounts receivable, net
Financial assets, at fair value through profit or loss
Loans issued to employees, at amortised cost
Total other non-current assets
31 December
2021
31 December
2020
637
(561)
76
677
(589)
88
1,790
104
2,058
716
(605)
111
732
(635)
97
592
148
948
RUB million
Property, plant and equipment,
right-of-use assets and
intangible assets
Other long-term assets
Current assets
Liabilities
Tax loss carry-forwards
Unrecognised deferred tax
assets
31 December
2021
Recognised in
profit or loss
Recognised
in other
comprehensive
income
Reclas-
sification
1 January 2021
(as presented)
Effect of change
in accounting
policy
31 December
2020
(as previously
reported)
(13,339)
(1,331)
(185)
1,640
1,620
6,881
(55)
(243)
1,337
10
919
-
692
1
(6)
(7)
(2)
-
-
(14)
(2)
(12,007)
(12,007)
64
310
1,610
5,962
(55)
-
-
(382)
-
-
-
64
692
1,610
5,962
(55)
(4,116)
(382)
(3,734)
-
-
2
-
-
-
Net tax (liabilities)/assets
(3,438)
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308
309
Additional Information 2021
2020
Raw materials and spare parts
20. INVENTORIES
RUB million
18
OTHER NON-CURRENT ASSETS (CONTINUED)
The movements in provision for loans issued and long-term accounts receivable are as follows:
RUB million
Loans issued to third parties
Balance at 1 January
Provision for loans issued accrued
Use of provision
Reversal of provision
Effect of foreign currency translation reserve
Balance at 31 December
Long-term accounts receivable
Balance at 1 January
Provision for Long-term accounts receivable accrued
Use of provision
Reversal of provision
Effect of foreign currency translation reserve
Balance at 31 December
(605)
(510)
(1)
-
-
45
(561)
(635)
(1)
-
-
47
(589)
-
2
59
(156)
(605)
-
(584)
-
-
(51)
(635)
As at 31 December 2021 and 31 December 2020, financial assets measured at fair value through profit or loss include 9.27% share in a related party
JSC “AgroGuard-Finance”. The company is not publicly traded and the fair value of the investment was estimated using valuation techniques. As at 31 De-
cember 2021, a fair value of operating subsidiaries of JSC “AgroGuard-Finance” was estimated by reference to the projected cash flows discounted at
the post-tax RUB-nominated rate of 13.7% based on the weighted average cost of capital, a fair value of other subsidiaries was estimated using adjusted net
assets method.
During the year ended 31 December 2021, the Group recognized fair value gain of RUB 1,193 million in profit or loss (no fair value gain or loss has been rec-
ognized during the year ended 31 December 2020).
Finished goods:
Chemical fertilisers
Apatite concentrate
Other products
Work-in-progress:
Chemical fertilisers and other products
Chemical fertilisers and other products for resale, purchased from third parties
Other goods
Provision for obsolescence
Total inventories
21. TRADE AND OTHER RECEIVABLES
RUB million
Financial assets
Trade accounts receivable
Other receivables
Provision for doubtful accounts and expected credit losses allowance
Non-financial assets
Advances issued
Deferred expenses
Receivables from employees
Provision for doubtful accounts and expected credit losses allowance
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31 December
2021
31 December
2020
10,535
8,086
22,110
607
291
6,375
1,662
197
(600)
14,254
717
378
4,902
2,292
172
(221)
41,177
30,580
31 December
2021
31 December
2020
33,013
822
(339)
14,819
199
28
(16)
11,212
996
(349)
5,537
117
22
(20)
19. OTHER FINANCIAL ASSETS
RUB million
Interest receivable
Loans issued to employees, at amortised cost
Loans issued to third parties, at amortised cost
Loans issued to related parties, at amortised cost
Dividend receivable
Provision for doubtful accounts
Total other financial assets
31 December
2021
31 December
2020
140
104
60
25
-
(113)
216
134
125
48
-
41
(37)
311
Total trade and other receivables
48,526
17,515
As at 31 December 2021, amount of trade accounts receivable includes RUB 3,166 million of trade receivables measured at fair value
through other comprehensive income (31 December 2020: RUB 1,874 million) and RUB 4,885 million measured at fair value through profit
or loss (31 December 2020: RUB 93 million). The fair values of these receivables approximate their carrying amounts.
The movements in bad debt and expected credit losses allowance are as follows:
RUB million
Balance at 1 January
Use of allowance
Reversal of allowance
Reclassification from non-сurrent assets
Effect of foreign currency translation reserve
Increase in provision for doubtful accounts and expected credit losses allowance
Balance at 31 December
See note 29 (c) for the analysis of overdue trade accounts receivable.
2021
(369)
140
10
-
(3)
(133)
(355)
2020
(258)
78
5
(37)
(29)
(128)
(369)
310
311
Additional Information 22. CASH AND CASH EQUIVALENTS
(c) Dividends
RUB million
Cash in bank
Call deposits
Petty cash
Total cash and cash equivalents
31 December
2021
31 December
2020
13,298
8,405
7
21,710
4,023
4,432
5
8,460
The most significant balances of cash and cash equivalents were held in banks with credit rating from an AA to BBB.
23. EQUITY
(a) Share capital
As at 31 December 2021 and 31 December 2020, the Company’s share capital consists of 129,500,000 ordinary shares with par value of RUB 2.5 per share.
All issued ordinary shares are fully paid. Each ordinary share carries one vote.
As at 31 December 2021 and 31 December 2020, the number of ordinary shares authorised for additional issue is 994,977,080, with a par value of
RUB 2.5 per share.
(b) Dividend policy
The Group’s dividend policy is based on the following principles:
> striking an effective and reasonable balance between the payment of dividends and reinvestment of profit in further development;
> ensuring transparency and predictability of dividend payments as a way to boost the Company’s investment case.
Amount of such payment is subject to approval of the General Shareholders’ Meeting, based on recommendations provided by the PhosAgro Board of Di-
rectors. The Board of Directors’ recommendations depend on such factors as the Company’s earnings for the reporting period and its financial position. To
calculate the amount of dividend payments, the Board of Directors considers the Company’s consolidated free cash flow for the reporting period (quarter, six
months, first nine months or year) under IFRS. Free cash flow is defined as cash flows from operating activities less cash flows from investing activities based
on the consolidated statement of cash flows. A decision on the payment of an interim dividend is made at the General Shareholders’ Meeting within three
months of the end of the relevant reporting period. The payment period for dividends payable to a nominal holder or a trustee, which is a professional par-
ticipant of the securities market, who are registered in the share register, shall be not more than 10 business days. The payment period for dividends payable
to other parties registered in the shareholders register shall not exceed 25 business days after the date on which the parties entitled to receive dividends
are determined. Holders of PhosAgro GDRs are also entitled to receive dividends in respect of the underlying shares, subject to the terms of their Depositary
Agreements. In accordance with the dividend policy, the Board of Directors shall seek to make sure that the amount of distributed dividends ranges from
50% to over 75% (subject to the Company’s leverage ratio) of the Company’s consolidated free cash flow for the respective period under IFRS. At the same
time, the amount of declared dividends shall not be lower than 50% of net profit for the relevant period under IFRS adjusted by the amount of unrealized
exchange rate difference.
In accordance with Russian legislation the Company’s distributable reserves are limited to the balance of accumulated retained earnings as
recorded in the Company’s statutory financial statements prepared in accordance with Russian Accounting Standards. As at 31 December
2021, the Company had cumulative retained earnings of RUB 59,337 million (31 December 2020: RUB 18,057 million).
Proposed
by the Board of Directors in
Total dividends approved during the reporting period
April 2021
May 2021
August 2021
November 2021
Total dividends approved subsequent to the reporting date
February 2022
Total dividends
24. EARNINGS PER SHARE
Approved
Amount per share
Amount of
dividends
by shareholders in
RUB
RUB million
May 2021
June 2021
September 2021
December 2021
April 2022
63
105
156
234
390
8,158.5
13,597.5
20,202.0
30,303.0
50,505.0
122,766.0
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Basic earnings per share are calculated based on the weighted average number of ordinary shares outstanding during the year. Basic and
diluted earnings per share are the same, as there is no effect of dilution.
RUB million
Weighted average number of ordinary shares in issue
Profit for the year attributable to shareholders of the Parent, RUB million
Basic and diluted earnings per share, RUB
25. LOANS AND BORROWINGS
2021
2020
129,500,000
129,500,000
129,697
1,002
16,932
131
This note provides information about the contractual terms of the Group’s loans and borrowings. For more information about the leases,
see note 26. For more information about the Group’s exposure to foreign currency risk, interest rate risk and liquidity risk, see note 29.
RUB million
Current loans and borrowings
Unsecured bank loans
Eurobonds
Interest payable
Bank commission (short-term)
Total current loans and borrowings
Non-current loans and borrowings
Eurobonds
Unsecured bank loans
Bank commission (long-term)
Total non-current loans and borrowings
Total loans and borrowings
31 December
2021
31 December
2020
11,492
-
1,220
(2)
12,710
111,439
45,957
(315)
157,081
169,791
28,326
25,857
1,137
(4)
55,316
73,876
30,159
(211)
103,824
159,140
In May 2017, the Company’s SPV issued a USD 500 million 4.5-year Eurobond with a coupon rate of 3.95%, which was listed on the Irish
Stock Exchange. In 2020, the Company’s SPV redeemed USD 150 million of the Eurobond ahead of schedule. The fair value of the Eu-
robond at 31 December 2020 was RUB 26,514 million. In November 2021, the Company’s SPV redeemed USD 350 million. The redemption
was financed through the proceeds from Eurobonds issued in September 2021.
312
313
Additional Information In January 2018 the Company’s SPV issued a USD 500 million 5,25-year Eurobond with a coupon rate of 3.949%, which is listed on the Irish Stock Exchange,
with the fair value at the reporting date of RUB 37,940 million (31 December 2020: RUB 38,763 million).
26. LEASES
In January 2020 the Company’s SPV issued a USD 500 million 5-year Eurobond with a coupon rate of 3.05%, which is listed on the Irish Stock Exchange, with
the fair value at the reporting date of RUB 37,726 million (31 December 2020: RUB 38,534 million).
In September 2021, the Company’s SPV issued a USD 500 million 7-year Eurobond with a coupon rate of 2.6%, which is listed on the Irish Stock Exchange,
with the fair value at the reporting date of RUB 36,140 million.
Management believes that the fair value of the Group’s other loans and borrowings approximates their carrying amounts.
The breakdown of the loans and borrowings denominated in different currencies is as follows:
RUB million
USD-denominated
EUR-denominated
RUB-denominated
Total
The maturity of the loans and borrowings is as follows:
RUB million
Less than 1 year
1-2 years
2-3 years
3-4 years
4-5 years
More than 5 years
Bank commission
Total
Reconciliation of loans and borrowings balances:
RUB million
Balance as at 1 January
Cash inflows
Cash outflows
Interest accrued
Interest paid
Amortisation of bank commission
Foreign exchange (gain)/loss
Other turnovers
Balance as at 31 December
31 December
2021
31 December
2020
154,288
12,407
3,096
169,791
129,593
20,018
9,529
159,140
31 December
2021
31 December
2020
12,712
48,760
16,879
41,037
11,320
39,400
(317)
55,320
12,182
40,859
3,921
40,859
6,214
(215)
169,791
159,140
2021
159,140
61,622
(50,081)
3,910
(3,861)
83
(812)
(210)
2020
133,576
63,520
(66,182)
3,647
(3,352)
83
27,848
-
169,791
159,140
RUB million
Balance as at 1 January 2020
New lease contracts and modification of existing lease contracts
Interest expense on lease liabilities
Principal lease payments
Interest lease payments
Effect of foreign currency translation reserve
Balance as at 1 January 2021
New lease contracts and modification of existing lease contracts
Interest expense on lease liabilities
Principal lease payments
Interest lease payments
Effect of foreign currency translation reserve
Balance as at 31 December 2021
27. DEFINED BENEFIT OBLIGATIONS
RUB million
Pension obligations, long-term
Post-retirement obligations other than pensions
Total defined benefit obligations
Lease liability
without
subsequent asset
buyout
Lease liability with
subsequent asset
buyout
4,757
94
295
(1,242)
(296)
14
3,622
882
223
(1,345)
(223)
(11)
3,148
1,487
1,793
190
(709)
(189)
1
2,573
521
172
(604)
(172)
(1)
2,489
Total
6,244
1,887
485
(1,951)
(485)
15
6,195
1,403
395
(1,949)
(395)
(12)
5,637
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31 December
2020
307
645
952
323
622
945
The Group has defined benefit plans at JSC “Apatit”, including all the branches, and PhosAgro Trading SA which stipulate payment of
a lump sum allowance to employees who have a specified period of service in these companies upon their retirement. All the defined ben-
efit plans are unfunded. The movement in the present value of the defined benefit obligations is as follows:
RUB million
Defined benefit obligations at 1 January
Benefits paid
Current service costs and interest
Past service costs
Actuarial loss in other comprehensive income
Effect of foreign currency translation reserve and foreign exchange differences
Defined benefit obligations at 31 December
The key actuarial assumptions used in measurement of the defined benefit obligations are as follows:
2021
945
(132)
123
(15)
36
(5)
952
2020
857
(74)
98
(1)
28
37
945
Discount rate
Future pension increases
31 December 2021
31 December 2020
7.5%
4.1%
6.4%
3.5%
314
315
Additional Information 28. TRADE AND OTHER PAYABLES
RUB million
Trade accounts payable
including accounts payable for property, plant and equipment and intangible assets
Advances received (contract liabilities)
Payables to employees
Accruals and provisions
Dividends payable
Other payables
Total trade and other payables
31 December 2021
31 December 2020
16,643
5,676
16,379
5,094
209
2
3,429
41,756
12,230
4,777
12,406
4,029
210
-
994
29,869
Contract liabilities balance at the beginning of the year was fully recognised in revenue during the reporting period.
29. FINANCIAL RISK MANAGEMENT
(a) Overview
In the normal course of its operations, the Group has exposure to market, credit and liquidity risks.
This note presents information about the Group’s exposure to each of the above risks, the Group’s objectives, policies and processes for measuring and man-
aging risk, and the Group’s management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk manage-
ment 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 adher-
ence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
(b) 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 val-
ue of its financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters,
while optimising the return.
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 curren-
cies of Group entities. The currencies giving rise to this risk are primarily USD and EUR.
In respect of monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net exposure is kept to an acceptable level by buy-
ing or selling foreign currencies at spot rates when necessary to address short-term imbalances.
The Group implemented a natural hedge approach (policy) aiming at reducing its exposure to foreign currency risk by means of borrowing in the same cur-
rencies in which sales agreements are denominated.
The Group has the following net monetary position on financial assets and liabilities denominated in foreign currencies:
RUB million
Group companies in Russia:
Current assets
Trade and other receivables
Cash and cash equivalents
Other financial assets
Non-current liabilities
Non-current loans and borrowings
Non-current finance lease liabilities
Сurrent liabilities
Current loans and borrowings
Trade and other payables
Current finance lease liability
31 December 2021
31 December 2020
USD denominated
EUR denominated USD denominated
EUR denominated
1,643
654
989
-
(143,073)
(142,510)
(563)
(13,563)
(12,070)
(1,422)
(71)
70
3
67
-
(11,786)
(11,786)
-
(1,712)
(620)
(1,092)
-
439
366
73
-
(97,319)
(97,319)
-
(33,457)
(32,475)
(982)
-
28
5
23
-
(6,716)
(6,716)
-
(14,094)
(13,302)
(792)
-
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Net position of the Group companies in Russia
(154,993)
(13,428)
(130,337)
(20,782)
Foreign Group companies:
Current assets
Trade and other receivables
Cash and cash equivalents
Other financial assets
Non-current liabilities
Non-current finance lease liability
Сurrent liabilities
Trade and other payables
Current loans and borrowings
Current finance lease liability
Net position of foreign Group companies
RUB million
Total:
Current assets
Trade and other receivables
Cash and cash equivalents
Other financial assets
Non-current liabilities
Non-current loans and borrowings
Non-current finance lease liabilities
Сurrent liabilities
Current loans and borrowings
Trade and other payables
Current finance lease liabilities
Total net position
2,831
1,572
1,182
77
-
-
(137)
(121)
(16)
-
2,694
2,977
1,390
1,587
-
(2)
(2)
(199)
(197)
-
(2)
2,776
1,596
970
543
83
-
-
(2)
(2)
-
-
1,594
916
560
356
-
-
-
(171)
(171)
-
-
745
31 December 2021
31 December 2020
USD denominated EUR denominated
USD denominated
EUR denominated
4,474
2,226
2,171
77
(143,073)
(142,510)
(563)
(13,700)
(12,086)
(1,543)
(71)
3,047
1,393
1,654
-
(11,788)
(11,786)
(2)
(1,911)
(620)
(1,289)
(2)
2,035
1,336
616
83
(97,319)
(97,319)
-
(33,459)
(32,475)
(984)
-
944
565
379
-
(6,716)
(6,716)
-
(14,265)
(13,302)
(963)
-
(152,299)
(10,652)
(128,743)
(20,037)
316
317
Additional Information Management estimates that a 10% strengthening/(weakening) of RUB against USD and EUR, based on the Group’s total net position in USD and EUR as at
the reporting date would have increased/(decreased) the Group’s profit for the year by RUB 16,295 million, before any tax effect (2020: would have in-
creased/(decreased) the Group’s profit for the year by RUB 14,878 million). This analysis assumes that all other variables, in particular interest rates, remain
constant. The analysis is performed on the same basis for 2020.
The foreign exchange loss recognized in profit or loss of RUB 838 million (RUB 25,070 million for the comparative period) resulted from the depreciation of
the Russian Rouble against major currencies during the reporting and comparative periods.
Foreign currency translation differences
In addition, the net assets of the Group’s foreign subsidiaries denominated in USD, EUR and other currencies amount to RUB 19,842 million as at the report-
ing date (31 December 2020: RUB 16,760 million).
Interest rate risk
Interest rate risk is the risk that changes in interest rates will adversely impact the financial results of the Group. Management does not have a formal policy
of determining how much of the Group’s exposure should be to fixed or variable rates. However, at the time of raising new loans or borrowings management
uses its judgment to decide whether it believes that a fixed or variable rate would be more favourable to the Group over the expected period until maturity.
The interest rate profile of the Group’s interest-bearing financial instruments at their carrying values is as follows:
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual specific characteristics of each customer. The general charac-
teristics of the Group’s customer base, including the default risk of the industry and country, in which customers operate, has less of an
influence on credit risk.
Management has established a credit policy under which each new customer is analysed individually for creditworthiness before
the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, when available,
and in some cases bank references. Purchase limits are established for each customer, which represent the maximum amount of outstand-
ing receivables; these limits are reviewed quarterly. Customers that fail to meet the Group’s benchmark creditworthiness may transact with
the Group only on a prepayment basis. In response to the COVID-19 pandemic, the risk management committee has also been performing
more frequent reviews of sales limits for customers in regions and industries that are severely impacted.
The Group is monitoring the economic environment in response to the COVID-19 pandemic and is taking actions to limit its exposure to
customers that are severely impacted. The majority of the Group’s customers have been transacting with the Group for several years, and
losses have occurred infrequently. In monitoring customer credit risk, customers are grouped according to their credit characteristics.
Trade and other receivables relate mainly to the Group’s wholesale customers.
The Group does not require collateral in respect of trade and other receivables, except for new customers who are required to work on
a prepayment basis or present an acceptable bank guarantee or set up letter of credit with an acceptable bank.
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31 December 2020
In addition, a major part of trade receivables in the Group’s foreign subsidiaries is insured.
RUB million
Fixed rate instruments
Other non-current assets
Call deposits and other financial assets
Long-term borrowings
Short-term borrowings
Lease liabilities
Total fixed rate instruments
Variable rate instruments
Long-term borrowings
Short-term borrowings
Total variable rate instruments
181
8,594
(154,309)
(6,523)
(5,637)
259
4,605
(94,498)
(53,027)
(6,195)
(157,694)
(148,856)
(3,087)
(6,189)
(9,276)
(9,537)
(2,293)
(11,830)
At 31 December 2021, a 1 percentage point increase/(decrease) in LIBOR/EURIBOR, with all other variables held constant, would have decreased/(increased)
the Group’s profit for the year and equity by RUB 93 million (31 December 2020: RUB 118 million).
(c) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises
from the Group’s receivables from customers, loans issued to related parties, current and non-current financial assets and cash and cash equivalents.
As at 31 December 2021, the Group’s maximum exposure to credit risk is represented by the carrying amount of its financial assets and amounted to
RUB 57,489 million (31 December 2020: RUB 21,580 million). There are no significant concentrations of credit risk, whether through exposure to individual
customers and/or regions.
As at 31 December 2021, the Group’s financial assets measured at amortised cost amounted to RUB 47,648 million (31 December 2020: RUB 19,021 mil-
lion).
As at 31 December 2021, the Group’s financial assets measured at fair value through profit or loss amounted to RUB 6,675 million (31 December 2020:
RUB 685 million).
As at 31 December 2021, the Group’s financial assets measured at fair value through other comprehensive income amounted to RUB 3,166 million (31 De-
cember 2020: RUB 1,874 million).
The Group establishes an allowance for impairment that represents its estimate of the expected credit losses in respect of trade and other
receivables and other financial assets. The Group estimated the expected credit losses for the entire period, applying a simplified approach
to measuring expected credit losses, which uses lifetime expected loss allowance. In the terms of calculating the expected credit loss,
the Group considers the credit rating for each counterparty, adjusted with forward-looking factors specific to the debtors, historical credit
loss experience and economic environment in which they operate.
The Group allocates each exposure to a credit risk grade based on data that is determined to be predictive of the risk of loss (including but
not limited to external ratings, audited financial statements, management accounts and cash flow projections and available press informa-
tion about customers) and applying experienced credit judgement. Credit risk grades are defined using qualitative and quantitative factors
that are indicative of the risk of default and are aligned to external credit rating definitions from agencies.
Exposures within each credit risk grade are segmented by geographic region and industry classification and an ECL rate is calculated for
each segment based on delinquency status and actual credit loss experience over the past years. These rates are multiplied by scalar fac-
tors to reflect differences between economic conditions during the period over which the historical data has been collected, current condi-
tions and the Group’s view of economic conditions over the expected lives of the receivables.
The Group uses an allowance matrix presented in the table below to measure the ECLs of trade receivables from individual customers,
which comprise a very large number of small balances. Loss rates are calculated using a ‘roll rate’ method based on the probability of a re-
ceivable progressing through successive stages of delinquency to write-off. Roll rates are calculated separately for exposures in different
segments based on the following common credit risk characteristics – geographic region, age of customer relationship.
The analysis of overdue trade and other receivables at the reporting date is as follows:
RUB Million
Not past due
Past due 0-90 days
Past due 91-180 days
Loss
Rate
0%-15%
1%-35%
5%-60%
Past due 181-365 days
15%-90%
More than one year
50%-100%
31 December 2021
31 December 2020
Gross
carrying
amount
30,652
2,265
32
68
812
33,829
Lifetime
ECL
Net
carrying
value
Loss
Rate
Gross
carrying
amount
Lifetime
ECL
(3)
(46)
(6)
(51)
(232)
(338)
30,649
0%-15%
10,252
2,219
1%-35%
26
17
5%-60%
15%-90%
580
50%-100%
951
391
32
582
33,491
12,208
(4)
(4)
-
(8)
(333)
(349)
Net
carrying
value
10,248
947
391
24
249
11,859
318
319
Additional Information The following information shows the movements in the Group’s assets and liabilities under the securitisation arrangement for the reporting period:
RUB million
Trade receivables transferred to the bank
Associated cash inflow
Associated cash outflow
Net-off with other payables
Other non-cash operations
2021
23,992
8,684
(3,566)
15,308
253
2020
14,899
2,350
(3,881)
12,549
63
RUB Million
Carrying
value
Contractual
cash flows
Loans and borrowings
159,355
171,988
0-1 year
59,276
2,336
18,042
6,195
18,042
7,122
18,042
340
360
283
Lease liabilities
Trade and other payables
Financial guarantees
issued for associates and
related parties
31 December 2020
1-2 yrs
15,637
2,109
-
77
2-3 yrs
43,337
1,477
-
-
3-4 yrs
4-5 yrs
Over 5 yrs
5,529
1,021
41,759
161
-
-
-
-
6,450
18
-
-
Payables to the bank as at 31 December 2021 amounted to RUB 3,229 million (31 December 2020:
RUB 852 million) are presented within other payables. Receivables from the bank as at 31 December 2021 amounted to RUB 854 million (31 December
2020: RUB 537 million) are presented within trade receivables.
Current and non-current financial assets
The Group lends money to related parties and to third parties, who have good credit standing. Based on the prior experience, management believes that
there is no significant credit risk in respect of related party and third party loans.
Cash and cash equivalents are primarily held with banks with high credit rating.
Guarantees
Total
183,932
197,512
79,937
17,823
44,814
6,550
41,920
6,468
(e) Capital management
The Group’s policy is to safeguard the Group’s ability to continue as a going concern, to maintain a strong capital base in order to provide
investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return on
capital invested and the level of dividends paid to shareholders.
There were no changes in the Board’s approach to capital management during the year.
The Company and its subsidiaries are subject to externally imposed capital requirements including the statutory requirements of the coun-
try of their domicile and the bank covenants.
For financial guarantees issued the maximum exposure to credit risk is the amount of the commitment (note 32). The Group’s policy is to provide financial
guarantees only to the subsidiaries or related parties.
30. COMMITMENTS
(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’s approach to managing liquidity is to en-
sure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incur-
ring unacceptable losses or risking damage to the Group’s reputation.
Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 30 days, including the servicing of
financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters. In addition,
the Group maintains several lines of credit in various Russian and international banks.
As at 31 December 2021, the Group had contractual commitments for the purchase of property, plant and equipment for RUB 29,458 mil-
lion (31 December 2020: RUB 31,197 million), including VAT where applicable.
31. CONTINGENCIES
(a) Litigation
The Group has a number of small claims and litigations relating to regular business activities and small fiscal claims. Management believes
that none of these claims, individually or in aggregate, will have a material adverse impact on the Group.
The table below illustrates the contractual maturities of financial liabilities, including interest payments, which are converted at the closing exchange rates,
where applicable. The amounts disclosed in the maturity table are the contractual undiscounted cash flows:
(b) Taxation contingencies
RUB Million
Loans and borrowings
Lease liabilities
Trade and other payables
Financial guarantees issued for associates
and related parties
31 December 2021
Carrying
value
Contractual
cash flows
170,108
185,811
5,637
20,283
6,246
20,283
0-1 year
16,492
2,487
20,283
75
75
75
1-2 yrs
52,628
1,856
-
-
2-3 yrs
19,720
1,261
-
-
3-4 yrs
43,070
318
-
-
4-5 yrs
Over 5 yrs
12,526
41,375
202
122
-
-
-
-
Total
196,103
212,415
39,337
54,484
20,981
43,388
12,728
41,497
Russian tax legislation which was enacted or substantively enacted at the end of the reporting period, is subject to varying interpretations
when being applied to the transactions and activities of the Group. Consequently, tax positions taken by management and the formal doc-
umentation supporting the tax positions may be challenged tax authorities. Russian tax administration is gradually strengthening, includ-
ing the fact that there is a higher risk of review of tax transactions without a clear business purpose or with tax incompliant counterparties.
Fiscal periods remain open to review by the authorities in respect of taxes for three calendar years preceding the year when decisions about
the review was made. Under certain circumstances reviews may cover longer periods.
Russian transfer pricing (TP) legislation is generally aligned with the international TP principles developed by the Organisation for Econom-
ic Cooperation and Development (OECD), although it has specific features. The TP legislation provides for the possibility of additional tax
assessment for controlled transactions (transactions between related parties and certain transactions between unrelated parties) if such
transactions are not on an arm’s-length basis. The management has implemented internal controls to comply with current TP legislation.
Tax liabilities arising from controlled transactions are determined based on their actual transaction prices. It is possible, with the evolution
of the interpretation of TP rules, that such prices could be challenged. The impact of any such challenge cannot be reliably estimated; how-
ever, it may be significant to the financial position and/or the Group’s operations.
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321
Additional Information The Group includes companies incorporated outside of Russia. The tax liabilities of the Group are determined on the assumption that these companies are
not subject to Russian profits tax, because they do not have a permanent establishment in Russia. This interpretation of relevant legislation may be chal-
lenged but the impact of any such challenge cannot be reliably estimated currently; however, it may be significant to the financial position and/or the overall
operations of the Group. The Controlled Foreign Company (CFC) legislation introduced Russian taxation of profits of foreign companies and non-corporate
structures (including trusts) controlled by Russian tax residents (controlling parties). The CFC income is subject to a 20% tax rate. Management doesn’t ex-
pect any significant payments in respect of its foreign subsidiaries profits due to new CFC legislation.
As Russian tax legislation does not provide definitive guidance in certain areas, the Group adopts, from time to time, interpretations of such uncertain areas
that reduce the overall tax rate of the Group. While management currently estimates that the tax positions and interpretations that it has taken can probably
be sustained, there is a possible risk that an outflow of resources will be required should such tax positions and interpretations be challenged by the tax au-
thorities. The impact of any such challenge cannot be reliably estimated; however, it may be significant to the financial position and/or the overall operations
of the Group.
(c) Environmental contingencies
b) Balances with related parties
RUB million
Trade and other receivables
Trade and other payables
Trade and other receivables
Trade and other payables
Short-term loans issued, at amortised cost
c) Financial guarantees
Nature of relationship
31 December
2021
31 December
2020
Associates
Associates
Other related parties
Other related parties
Other related parties
20
(17)
8
(349)
25
16
(12)
14
(237)
-
The environmental legislation, currently effective in the Russian Federation, is relatively new and characterised by frequent changes, official pronounce-
ments and court decisions, which are often unclear, contradictory and subject to varying interpretation by different authorities.
The Group issued financial guarantees to the bank to secure associates’ bank loans amounting to RUB 75 million (31 December 2020:
RUB 340 million).
The Group is involved in chemical production, which is inherently exposed to significant environmental risks. The Group companies record environmen-
tal obligations as they become probable and reliably measurable. The Group companies are parties to different litigations with the Russian environmental
authorities. The management believes that based on its interpretations of applicable Russian legislation, official pronouncements and court decisions no
provision is required for environmental obligations. However, the interpretations of the relevant authorities could differ from management’s position and
the effect on these consolidated financial statements, if the authorities were successful in enforcing their interpretations, could be significant.
d) Key management personnel remuneration
Remuneration of key management personnel consists of monthly compensation, annual performance bonus contingent on operating
results and contributions to the Russian state pension and social funds. The remuneration of the Board of Directors and key management
personnel recognised as part of administrative and selling overhead expenses amounted to RUB 4,147 million (2020: RUB 3,351 million).
(d) Compliance with covenants
The Group is subject to certain covenants related primarily to its loans and borrowings. Non-compliance with such covenants may result in negative conse-
quences for the Group including growth in the cost of borrowings and declaration of default.
The Group was in compliance with covenants during the years ended 31 December 2021 and 31 December 2020.
32. RELATED PARTY TRANSACTIONS
Parties are generally considered to be related if the parties are under common control or if one party has the ability to control the other party or can exercise
significant influence or joint control over the other party in making financial and operational decisions. In considering each possible related party relation-
ship, attention is directed to the substance of the relationship, not merely the legal form. Other related parties include entities controlled by the Company’s
key shareholders.
The balances and transactions with related parties are usually unsecured and denominated in RUB.
a) Transactions with related parties
RUB million
Sales of goods and services
Other income, net
Purchases of goods and services
Sales of goods and services
Dividend income
Other expenses, net
Purchases of goods and services
Nature of relationship
Associates
Associates
Associates
Other related parties
Other related parties
Other related parties
Other related parties
2021
26
-
(585)
968
-
(60)
(224)
2020
26
1
(561)
686
203
(53)
(115)
In 2021, the Company declared dividends in total amount of RUB 46,824 million (2020: RUB 25,113 million) to its shareholders which have significant influ-
ence over the Group.
About
this Report
Company
Profile
Strategic
Report
Performance
Review
Corporate
Governance
Share Capital
Additional
Information
322
323
Additional Information 33. SIGNIFICANT SUBSIDIARIES
Subsidiary
Country of incorporation
31 December 2021
31 December 2020
Effective ownership (rounded)
Apatit, JSC (including Balakovo, Volkhov and Kirovsk branches)
Mekhanik, LLC
NIUIF, JSC
PhosAgro-Region, LLC
PhosAgro-Belgorod, LLC
PhosAgro-Don, LLC
PhosAgro-Kuban, LLC
PhosAgro-Kursk, LLC
PhosAgro-Lipetsk, LLC
PhosAgro-Oryol, LLC
PhosAgro-Stavropol, LLC
PhosAgro-Volga, LLC
PhosAgro-SeveroZapad, LLC
PhosAgro-Tambov, LLC
PhosAgro-Sibir, LLC
PhosAgro Trading SA
Phosint Limited
PhosAgro Logistics SA
PhosAgro Polska Sp.z o.o.
PhosAgro Deutschland GmbH
PhosAgro France SAS
PhosAgro Balkans DOO
UAB PhosAgro Baltic
PhosAgro Balkans SRL
PhosAgro South Africa Proprietary Limited
Logifert Oy
Bulk Terminal Kotka Oy
34. SEASONALITY
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Russia
Switzerland
Cyprus
Switzerland
Poland
Germany
France
Serbia
Lithuania
Romania
South Africa
Finland
Finland
100%
100%
94%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
94%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Management
responsibility
statement
The Company’ management hereby confirms that, to the best of its knowledge, the financial statements prepared in accordance with
the International Financial Reporting Standards as issued by the International Accounting Standards Board give a true and fair view of
the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as
a whole.
The management report includes a fair review of the development and performance of the business and the position of the Company and
the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that
they face.
The Company was guided by GRI standards, as well as the principles of the ISO 26000 and AA 1000 standards during the preparation
of the integrated report. A draft of this integrated report was reviewed and pre-approved at PhosAgro’s Board of Directors meeting
on3 March 2022. On 30 June 2022, it will be submitted for approval to the Annual General Meeting of Shareholders.
The consolidated financial statements for the year ended 31 December 2021 were approved by the Board of Directors
on 10 February 2022.
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. 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 appli-
cation 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 spreaded.
Andrey A. Guryev
ГChief Executive Officer and
Chairman of the Management
Board of PJSC PhosAgro
About
this Report
Company
Profile
Strategic
Report
Performance
Review
Corporate
Governance
Share Capital
Additional
Information
324
325
Additional Information Changes in the status
of conformity with
the Corporate
Governance Code
principles in 2021
№
Number and brief
description of the
principle
Old status
New status
Change in
criteria
Comments
1
2
3
4
1.1.5. Ability for
shareholders to freely
exercise their rights to
vote
1.1.6. Equal
opportunity to all
persons present at the
General Shareholders’
Meeting to express
their opinions and ask
questions that might
be of interest to them
1.2.1. A transparent
and clear mechanism
for determining the
amount of dividends
and payment thereof
1.2.4. Ruling out
any ways through
which shareholders
can obtain any
profit or gain at the
Company’s expense
other than dividends
and the payment of
the liquidation value
thereof
A new criterion, fundamentally different from the previous one, was introduced at
the end of the reporting year and, therefore, it was not complied with (PhosAgro
Charter does not provide for online ballot completion on the website). The vast
majority of the Company’s shareholders hold their shares through nominee
shareholders (with the exception of only 25 out of 139,000 shareholders, or
less than 0.02%) and can take advantage of remote voting by instructing their
nominees accordingly (proxy voting) and thus exercise their voting rights by
completing online ballots.
In the reporting year, all general shareholders’ meetings of the Company were held
by absentee voting and for that reason compliance with the criteria of this clause
was not required (was impossible). Going forward (starting from this year), the
Company will make certain to comply with these criteria when holding in-person
meetings.
Criteria 1 and 2 were fully complied with. Criterion 3, introduced for the first
time, was not met with respect to failing to provide explanations and business
justification for allocating a portion of the net profit for own needs as part of
the materials for the general shareholders’ meetings in 2021. At the same time,
information on the procedure for determining the amount of dividends and its
conformity with the Company’s dividend policy was included in the shareholders
materials for the GSM meetings. Starting from 2022, the Company will include
explanations and business justification for allocating a portion of its net profit for
own needs in annual GSM materials.
In the reporting year, no ways through which persons controlling the Company
could obtain profit or gain at the Company’s expense, other than dividends, were
registered.
№
Number and brief
description of the
principle
Old status
New status
Change in
criteria
Comments
2.1.1. Responsibility of
the Board of Directors
for decisions to appoint
and oversee the
activities of executive
bodies
2.1.4. Determination
of the Company’s
remuneration policy by
the Board of Directors
2.8.2 Performance
of the remuneration
committee
2.8.5. Composition of
the Board of Directors
committees
2.9.1. Evaluation of the
quality of the work of
the Board of Directors
5
6
7
8
9
4.1.1 The level of
remuneration paid by
the Company to its
Board members and key
managers
4.1.2 Remuneration
Policy
4.1.3 Remuneration
Policy
4.3.1 Remuneration key
managers
10
11
12
13
14
4.3.2 Long-term
incentive programme
To improve the explanation, an indication of no time limits for
non-compliance with the criterion has been added.
To improve the explanation, an indication of no time limits for
non-compliance with the criterion has been added.
Criteria 1 and 2 were fully complied with. Criterion 3, first used in
this version, was not met with respect to failure to define in the
Company’s internal documents the conditions (events) upon the
occurrence of which the Remuneration and Human Resources
Committee of the Board of Directors considers the revision of
the Company’s policy on remuneration of the Board members,
members of executive bodies, and other key executives. The
Company proceeded from the fact that the responsibility to
regularly revise the policy, which is specified in the Regulations on
the Remuneration and Human Resources Committee of the Board
of Directors, implies ensuring that it is updated and meets the
current needs of the Company. However, in 2022, a new version of
the Regulations setting out the conditions (events) for the revision
of the Remuneration Policy will be presented to the Board of
Directors.
According to the new version of the criteria, the recommendation
that the Board committees should be headed by independent
directors is limited to the Audit Committee and the
Remuneration and Human Resources Committee.
Criteria 1 and 3 were fully complied with. Criterion 2, first
formulated in this version, was not met with respect to the failure
to conduct individual assessment of each member of the Board
of Directors in 2021 (for 2020) and 2022 (for 2021). In 2022,
the Company will resume the practice of assessing each Board
member individually, as part of the evaluation of the quality of the
work of the Board of Directors.
In the new version of the criteria, the only compliance
requirement is a comparative analysis of remuneration in peer
companies.
To improve the explanation, an indication of no time limits for
non-compliance with the criterion has been added.
To improve the explanation, an indication of no time limits for
non-compliance with the criterion has been added.
The principle is complied with given the exclusion from the
criteria of the procedure for refunding to the Company unlawfully
obtained bonuses.
The principle is complied with given the exclusion from the
criteria of the requirement to have a long-term incentive
programme.
complied
did not comply
partially complied
criteria changed
criteria not changed
complied
did not comply
partially complied
criteria changed
criteria not changed
326
327
Additional InformationAbout this ReportCompany ProfileStrategic ReportPerformance ReviewCorporate GovernanceShare CapitalAdditional Information №
Number and brief
description of the
principle
Old status
New status
Change in
criteria
Comments
Independent limited assurance report
15
6.3.1 Providing
shareholders with
access to information at
their requests
16
6.3.2. Providing
shareholders with
access to information at
their requests
17
18
7.1.3. Material
corporate actions taken
by the Company
7.2.2. Material
corporate actions taken
by the Company
Criteria 1 was complied with. Criterion 2, introduced for the first time, was not met
as regards to absence in the Company’s internal documents of provisions specifying
access to information on legal entities controlled by the Company upon the request
of a shareholder. The principle of completeness set out in the current information
policy means that the Company provides shareholders with information it is required
to provide under the applicable law, as well as other information necessary for making
informed decisions, which, we believe, also includes information on controlled
entities. However, in 2022, a new version of the information policy setting out
provisions on controlled entities will be presented to the Board of Directors.
Criteria 1 was complied with. Criterion 2, introduced for the first time, was not
met as regards to absence in the Company’s internal documents of provisions
providing for shareholders’ warning of the confidential nature of information
and the need for commitment to keep it confidential. The principle of balance
specified in the current information policy means that the Company maintains
a reasonable balance between being transparent and observing the interests of
the Company and existing shareholders with respect to protecting business and
confidential information, which, we believe, implies complying with requirements
for maintaining information confidentiality. However, in 2022, a new version of
the information policy setting out the conditions upon the occurrence of which
shareholders are warned of the confidential nature of information and the need for
commitment to keep it confidential, will be presented to the Board of Directors.
Independent Limited Assurance Report
To the Management of Public Joint Stock Company “PhosAgro”:
Introduction
We have been engaged by the Management of Public Joint Stock Company “PhosAgro” (hereinafter –
the “Company”) to provide limited assurance on the selected information described below and
included in the Integrated annual report of the Company for the year ended 31 December 2021
(hereinafter – the “Integrated annual report”). The Integrated annual report represents information
related to the Company and its subsidiaries (hereinafter together – the “Group”).
Selected information
We assessed the qualitative and quantitative information specified in Appendix 1 to this report, that is
disclosed in the Integrated annual report and referred to or disclosed in the GRI Content Index of the
Integrated annual report (hereinafter – the “Selected Information”).
The scope of our limited assurance procedures was limited to the Selected Information for the year
ended 31 December 2021 only. We have not performed any procedures with respect to earlier periods
or any other items included in the Integrated annual report and, therefore, do not express any
conclusion thereon.
In 2021, all material corporate actions were approved prior to being taken.
Reporting criteria
The status was changed following additional review of internal documents related
to engaging an appraiser for taking material corporate actions. It revealed that
PhosAgro’s Order No. 77 dated 31 January 2018 in conjunction with PhosAgro
Regulations on the Procurement of Commodities, Works and Services fully comply
with the criteria for this corporate governance principle.
Appendices
(presented in a separate
document)
We assessed the Selected Information using relevant criteria, including reporting requirements, in the
respective GRI Sustainability Reporting Standards 2, 3, 202, 203, 205, 207, 302, 303, 304, 305, 306,
401, 403, 404 and 413 (hereinafter together – the “GRI Standards”) published by the Global Reporting
Initiative (GRI) and in the Group’s management methodology as set forth in the criteria defined in the
notes to the Group’s specific disclosures in the Environmental review section of the Integrated annual
report (hereinafter – the “PhosAgro Methodology”, and together with the GRI Standards – the
“Reporting Criteria”). We believe that the Reporting Criteria are appropriate given the purpose of our
limited assurance engagement.
Responsibilities of the management of the Group
The management of the Group is responsible for:
(cid:31)
(cid:31)
(cid:31)
(cid:31)
designing, implementing and maintaining internal control relevant to the preparation of the
Selected Information that is free from material misstatement, whether due to fraud or error;
establishing internal methodology and guidelines (including the PhosAgro Methodology) for
preparing and reporting the Selected Information in accordance with the Reporting Criteria;
preparing, measuring and reporting of the Selected Information in accordance with the
Reporting Criteria; and
the accuracy, completeness and presentation of the Selected Information.
Our responsibilities
We are responsible for:
(cid:31)
(cid:31)
(cid:31)
planning and performing the engagement to obtain limited assurance about whether the
Selected Information is free from material misstatement, whether due to fraud or error;
forming an independent conclusion, based on the procedures we have performed and the
evidence we have obtained; and
reporting our conclusion to the management of the Group.
AO PricewaterhouseCoopers Audit
White Square Office Center 10 Butyrsky Val Moscow, Russian Federation, 125047
T: +7 (495) 967-6000, F:+7 (495) 967-6001, www.pwc.ru
complied
did not comply
partially complied
criteria changed
criteria not changed
328
329
Additional InformationAbout this ReportCompany ProfileStrategic ReportPerformance ReviewCorporate GovernanceShare CapitalAdditional Information This report, including our conclusion, has been prepared solely for the management of the Group in
accordance with the agreement between us, to assist management in reporting on the Group’s
sustainability performance and activities. We permit this report to be disclosed in the Integrated annual
report, which will be published on the Company’s website1, to assist management in responding to
their governance responsibilities by obtaining an independent limited assurance report in connection
with the Selected Information. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the management of the Group for our work or this report except
where the respective terms are expressly agreed in writing and our prior consent in writing is obtained.
Professional standards applied and level of assurance
We performed a limited assurance engagement in accordance with International Standard on
Assurance Engagements 3000 (Revised) “Assurance Engagements other than Audits or Reviews of
Historical Financial Information”, issued by the International Auditing and Assurance Standards Board .
A limited assurance engagement is substantially less in scope than a reasonable assurance
engagement in relation to both the risk assessment procedures, including an understanding of internal
control, and the procedures performed in response to the assessed risks. The procedures performed
in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a
reasonable assurance engagement. Consequently, the level of assurance obtained in a limited
assurance engagement is substantially lower than the assurance that would have been obtained had
a reasonable assurance engagement been performed.
Our independence and quality control
We have complied with the independence and other ethical requirements of the International Code of
Ethics for Professional Accountants (including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (IESBA Code), which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behaviour, and the ethical requirements of the Auditor’s Professional Ethics Code and
Auditor’s Independence Rules that are relevant to our limited assurance engagement in respect of the
Selected Information in the Russian Federation. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm applies International Standard on Quality Control 1 and accordingly maintains a
comprehensive system of quality control including documented policies and procedures regarding
compliance with ethical requirements, professional standards and applicable legal and regulatory
requirements.
Work done
We are required to plan and perform our work in order to consider the risk of material misstatement of
the Selected Information. In doing so, we:
(cid:31)
(cid:31)
(cid:31)
made enquiries of the Group’s management, including the Sustainability Reporting team and
those with responsibility for Sustainability Reporting management and group reporting;
conducted interviews of the Group’s personnel responsible for the preparation of the Integrated
annual report and collection of underlying data;
performed analysis of the relevant internal methodology and guidelines (including the PhosAgro
Methodology), gaining an understanding and evaluating of the design of the key structures,
systems, processes and controls for managing, recording, preparing and reporting the Selected
Information; and
________________________
1 The maintenance and integrity of the Company’s website is the responsibility of management; the work carried out by us does
not involve consideration of these matters and, accordingly, we accept no responsibility for any changes that may have occurred
to the reported Selected Information or Reporting Criteria when presented on the Company’s website.
2
(cid:31)
performed limited substantive testing on a selective basis of the Selected Information to chec k
that data had been appropriately measured, recorded, collated and reported.
Reporting and measurement methodologies
Under the GRI Standards there is a range of different, but acceptable, measurement and reporting
techniques. The techniques, together with the PhosAgro Methodology, can result in materially different
reporting outcomes that may affect comparability with other organisations. The Selected Information
should therefore be read in conjunction with the methodology used by management in preparing the
Integrated annual report, described therein, and for which the Group is solely responsible.
Conclusion
Based on the procedures we have performed and the evidence we have obtained, nothing has come
to our attention that causes us to believe that the Selected Information for the year ended
31 December 2021 has not been prepared, in all material respects, in accordance with the Reporting
Criteria.
15 April 2022
022
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Moscow, Russian Federation
A. Y. Fegetsyn is authorised to sign on behalf of the general director of AO PricewaterhouseCoopers
Audit (Principal Registration Number of the Record in the Register of Auditors and Audit Organizations
(PRNR) – 12006020338), certified auditor (PRNR – 21906101957)
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330
331
Additional InformationAbout this ReportCompany ProfileStrategic ReportPerformance ReviewCorporate GovernanceShare CapitalAdditional Information Appendix 1 to the Independent Limited Assurance Report dated
15 April 2022
The Selected Information subject to limited assurance procedures and prepared in accordance with
the GRI Disclosures and the PhosAgro Methodology, as applicable, is set out below:
GRI Disclosure
2-7
2-27
3-2
202-1
202-2
203-1
205-3
207-1
207-2
207-3
302-1
302-3
303-3
303-4
303-5
304-3
305-1
305-2
305-4
305-5
305-7
306-3
306-4
306-5
401-1
401-2
403-1
403-2
403-3
403-4
403-5
403-6
403-7
403-8
403-9
403-10
404-1
404-2
404-3
413-1
Narrative
Employees
Compliance with laws and regulations
List of material topics
Ratios of standard entry level wage by gender compared to local minimum wage
Proportion of senior management hired from the local community
Infrastructure investments and services supported
Confirmed incidents of corruption and actions taken
Approach to tax
Tax governance, control, and risk management
Stakeholder engagement and management of concerns related to tax
Energy consumption within the organization
Energy intensity
Water withdrawal
Water discharge
Water consumption
Habitats protected or restored
Direct (Scope 1) GHG emissions
Energy indirect (Scope 2) GHG emissions
GHG emissions intensity
Reduction of GHG emissions
Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions
Waste generated
Waste diverted from disposal
Waste directed to disposal
New employee hires and employee turnover
Benefits provided to full-time employees that are not provided to temporary or part-time
employees
Occupational health and safety management system
Hazard identification, risk assessment, and incident investigation
Occupational health services
Worker participation, consultation, and communication on occupational health and safety
Worker training on occupational health and safety
Promotion of worker health
Prevention and mitigation of occupational health and safety impacts directly linked by
business relationships
Workers covered by an occupational health and safety management system
Work-related injuries
Work-related ill health
Average hours of training per year per employee
Programs for upgrading employee skills and transition assistance programs
Percentage of employees receiving regular performance and career development reviews
Operations with local community engagement, impact assessments, and development
programs
4
Related description
PhosAgro
Methodology (the
Group’s specific
disclosure)
Pollutant emissions
Waste water discharge Waste water discharge, m3 per tonne of finished and semi-finished products
Specific water
withdrawal
Specific water
withdrawal
Recycled and
decontaminated waste
Specific water withdrawal from surface sources, excluding mining and drainage
waters, and waste water from other waste water discharge systems, m3 per tonne
Share of recycled and decontaminated waste of 1–4 hazard classes, %
Specific water withdrawal, including mining and drainage waters, m3 per tonne
Pollutant emissions, kg per tonne of finished and semi-finished products
5
332
333
Additional InformationAbout this ReportCompany ProfileStrategic ReportPerformance ReviewCorporate GovernanceShare CapitalAdditional Information GRI Content Index
The data disclosed in this Report includes information on:
Boundary 1: PhosAgro and companies that are part of the
group to which PhosAgro belongs (corresponds to the scope
of disclosure in IFRS consolidated financial statements).
Boundary 2: PhosAgro and Apatit, including its branches
and standalone business units.
Boundary 3: Apatit, including its branches and
standalone business units.
Code
GRI Indicator
Comments
Boundary
Page number
2
2-1
2-2
2-3
General disclosures (2021)
Organisational profile
Entities included in the organisation's
sustainability reporting
Reporting period, frequency, and
point of contact
2-4
Restatements of information
2-5
2-6
External assurance
Activities, value chain and other
business relationships
2-7
2-8
2-9
2-10
2-11
Employees
Workers who are not employees
Governance structure and
composition
Appointment and selection
of the supreme governance body
Chair of the supreme governance
body
The following historical data have been revised in the 2021
report:
- methodology for GHG (Scope 2) emissions calculation was
amended – for more information, see GRI 305-2;
- HR metrics regarding personnel breakdown by education –
for more information, see GRI 2-7.
The new sulphuric acid plant at the Volkhov branch of Apatit
allowed us to purchase less acid from external parties and
reduce logistics costs for transporting our own sulphuric
acid between production facilities. An upgraded loading
unit at the Cherepovets production site enabled us to sell
higher-quality sulphuric acid.
To meet the increased demand for ammonia at the
Cherepovets and Volkhov branches, which grew by roughly
60% year-on-year, we entered into long-term contracts with
major suppliers and made a decision to build a new ammonia
plant. To source natural gas for this promising project,
a connection agreement was signed with a gas
distribution organisation.
As part of the rolling stock renewal programme, we
successfully tested a new Russian-made dump car with
an increased capacity of 115 tonnes and signed a supply
agreement to increase the volume and efficiency of ore
transportation.
In 2021, PhosAgro launched SAP Process Mining by Celonis,
a platform that takes a fundamentally new approach
to managing business processes and complements our
existing toolkit, to further automate procurement activities.
Not disclosed owing to the confidential nature of this
information.
4, 26, 347
4
4
4, 328
3
26,-27, 115
2
1
1
1
127-128
204
218
222
Code
GRI Indicator
Comments
Boundary
Page number
2-12
2-13
2-14
2-15
2-16
2-17
2-18
2-19
2-20
2-21
2-22
2-23
2-24
2-25
2-26
2-27
Role of the supreme governance
body in overseeing the impacts
Delegation of responsibility for
impact management
Role of the supreme governance
body in sustainability reporting
Conflicts of interest
Communication of critical concerns
Collective knowledge of the supreme
governance body
Supreme governance body
performance assessment
Remuneration policies
Process to determine remuneration
Annual total compensation ratio
Statement on sustainable
development strategy
Policy commitments
Embedding policy commitments
Processes to remediate negative
impacts
Mechanisms for seeking advice and
raising concerns
Compliance with laws and
regulations
2-28
2-29
Membership associations
Approach to stakeholder
engagement
2-30
Collective bargaining agreements
3
3-1
3-2
3-3
Material topics (2021)
Processes to determine material
topics
List of material topics
Management of material topics
Not disclosed owing to the confidential nature of this infor-
mation.
For purpose of this disclosure, the Group uses the
following materiality criteria:
- with regard to fines, the Group determined the amount
exceeding RUB 1 mln to be material fines for the Group
considering the scale of its operations;
- with regard to other non-monetary sanctions, the Group
assesses their influence on its reputation and ability to
continue as a going concern, taking into account the
amount of expenses likely to be incurred as a result of such
penalties.
There were no significant instances of non-compliance with
laws and regulations during 2021 for which material fines or
non-monetary sanctions were incurred by the Group.
During 2021, the Group incurred expenses of
RUB 2,274 thousand for the reproduction of aquatic
biological resources as a compensation for the harm caused
by an emergency situation in 2019.
For information on cases of non-compliance with environmen-
tal laws and regulations, see page 161.
1
1
1
1
204, 247
204
212
260
1 212, 214, 234
1
1
1
1
1
1
1
1
218
219
262
262
36
252, 256
252
124, 256
1 134, 252, 256
1
161
98, 112-113
9
122
7
8
124, 158
2
1
1
1
334
335
Additional InformationAbout this ReportCompany ProfileStrategic ReportPerformance ReviewCorporate GovernanceShare CapitalAdditional Information Code
GRI Indicator
Comments
Boundary
Page number
Code
GRI Indicator
Comments
Boundary
Page number
201
Economic performance (2016)
201-1 Direct economic value generated and
distributed
201-2 Financial implications and other risks
and opportunities due to climate change
201-3 Defined benefit plan obligations and
other retirement plans
201-4 Financial assistance received from
government
Not disclosed owing to the confidential nature of this infor-
mation.
202
Market presence (2016)
202-1 Ratios of standard entry level wage by
gender compared to local minimum
wage
202-2 Proportion of senior management
hired from the local community
203
Indirect economic impacts (2016)
203-1 Infrastructure investments and
services supported
203-2 Significant indirect economic
impacts
204
Procurement practices (2016)
204-1 Proportion of spending on local
suppliers at significant locations
of operation
205
Anti-corruption (2016)
205-1 Operations assessed for risks related
to corruption
205-2 Communication of and training
in anti-corruption policies and
procedures
205-3 Confirmed incidents of corruption
and actions taken
207
Tax (2019)
207-1
Approach to tax
207-2
207-3
Tax governance, control, and risk
management
Stakeholder engagement and
management of tax-related concerns
207-4
Country-by-country reporting
302
Energy (2016)
302-1
302-2
Energy consumption within the
organisation
Energy consumption outside of the
organization
not applicable
302-3
Energy intensity
302-4
Reduction in electricity consumption
302-5
Reductions in energy requirements
of products and services
Information will be disclosed in the next annual report 2022.
1
3
2
2
2
1
3
1
1
1
1
1
1
1
3
3
3
84
76, 162
340
135
129
193
191
114, 119
256
254, 258
260
85
86
85
87
174, 175
175
172
303
Water and effluents (2018)
303-1
Responsible water consumption
303-2 Management of water discharge and
related impacts on water resources
303-3 Water withdrawal
303-4 Water discharge
303-5 Water consumption
304
Biodiversity (2016)
Effluents are treated until standard permissible discharge
and temporarily permitted discharge rates are reached
as required by permits to discharge pollutants into the
environment (water bodies) issued by a relevant authority
for each discharge
304-1 Operational sites owned, leased,
managed in, or adjacent to, protected
areas and areas of high biodiversity
value outside protected areas
The Group’s operations are not located in protected areas or
areas of high biodiversity value outside protected areas.
The Group’s operations are not located in protected areas
or areas of high biodiversity value outside protected areas
304-2
Significant impacts of activities,
products, and services on biodiversity
304-3
Habitats protected or restored
304-4
IUCN Red List species and national
conservation list species with
habitats in areas affected by
operations
305
Emissions (2016)
305-1
Direct (Scope 1) GHG emissions
305-2
Energy indirect (Scope 2) GHG
emissions
305-3 Other indirect (Scope 3) GHG
emissions
305-4
GHG emissions intensity
305-5
Reduction of GHG emissions
The Group’s operations are not located in protected areas or
areas of high biodiversity value. The Group’s operations do not
pose a threat to endangered animal and plant species listed in
the International Union for Conservation of Nature (IUCN) Red
List and the Russian Red Data Book
Other indirect (Scope 3) GHG emissions will be calculated and
disclosed in 2022 as part of the CDP
305-6
Emissions of ozone-depleting
substances
The Сompany does not use ozone-depleting substances on an
industrial scale
Information will be disclosed in the next annual report 2022
305-7 Nitrogen oxides (NOX), sulphur
oxides (SOX), and other significant air
emissions
306
Waste (2020)
306-1 Waste generation and significant
waste-related impacts
306-2 Management of significant waste-
related impacts
306-3 Waste generated
306-4 Waste diverted from disposal
306-5 Waste directed to disposal
308
Supplier environmental
assessment (2016)
308-1 New suppliers that were screened
using environmental criteria
308-2 Negative environmental impacts in
the supply chain and actions taken
3
3
3
3
1
1
3
3
3
3
3
3
3
3
3
3
3
183
184
185, 186
186
189
189
170
171
170
171
180
176
177
177
177
118-119
118-119
336
337
Additional InformationAbout this ReportCompany ProfileStrategic ReportPerformance ReviewCorporate GovernanceShare CapitalAdditional Information Code
GRI Indicator
Comments
Boundary
Page number
Code
GRI Indicator
Comments
Boundary
Page number
401
Employment (2016)
401-1 New employee hires and employee
turnover
401-2
Benefits provided to full-time
employees that are not provided to
temporary or part-time employees
Benefits established by collective bargaining agreements apply
to all employees of Apatit, its branches, standalone business units
and do not depend on conditions of employment
401-3
Parental leave
403
Occupational health and safety
(2018)
403-1 Occupational health and safety
management system
403-2
Hazard identification, risk assessment,
and incident investigation
403-3 Occupational health services
403-4 Worker participation, consultation,
and communication on occupational
health and safety
403-5 Worker training on occupational
health and safety
403-6
Promotion of worker health
403-7
Prevention and mitigation of
occupational health and safety
impacts directly linked by business
relationships
403-8 Workers covered by an occupational
health and safety management
system
403-9 Work-related injuries
403-10 Occupational diseases
404
Training and education (2016)
404-1
404-2
Average hours of training per year
per employee
Programmes for upgrading employee
skills and transition assistance
programmes
In 2021, our occupational health and safety management
system covered 100% of the Group’s employees.
All our employees (executives together with blue- and white-
collar staff) take OHS training as required by the national
laws, as well as additional training (for more information,
see page 140). The minimum required training is provided
to each and everyone, including all visitors and representatives
of contractors as part of the introductory briefing.
Occupational diseases are divided into three groups:
group 1: HAVS, stage 1 and 2, Polyneuropathy of the upper
and lower limbs, Cervical/lumbosacral radiculopathy, Bilateral
humeral epicondylitis with joint function disorder, stage
1, Myofibrosis of the forearms, Bilateral humeroscapular
periarthrosis, Osteoarthritis deformans of the shoulder and
elbow joints, Osteoarthritis deformans of the shoulder and
elbow joints, Osteoarthritis deformans of the shoulder and
elbow joints, Reflex myotonic syndrome of the cervical/
lumbosacral area;
group 2: Chronic bilateral sensorineural hearing loss, 1st and
2nd degree;
group 3: Respiratory diseases associated with exposure to
complex chemical aerosols.
2
3
2
3
3
3
3
3
3
3
2
3
3
3
3
128, 342
341
139
144
141
151
151
153
153
147
149
130
132
404-3
Percentage of employees receiving
regular performance and career
development reviews
405
Diversity and equal opportunity
(2016)
405-1 Organisation’s governance bodies
and main employee categories by
gender, age group, minority groups
and other indicators of diversity
405-2
Ratio of basic salary and
remuneration of women to men
408
Child labour (2016)
408-1 Operations and suppliers at
significant risk for incidents of child
labour
413
Local communities (2016)
413-1 Operations with local community
engagement, impact assessments,
and development programmes
413-2 Operations with significant actual
and potential negative impacts on
local communities
417
Marketing and labelling (2016)
417-1
417-2
417-3
Requirements for product and service
information and labelling
Incidents of non-compliance
concerning product and service
information and labelling
Incidents of non-compliance
concerning marketing
communications
PhosAgro is committed to ensuring that no child labour
is used by its business units and subsidiaries. As part of
regular risk assessments, each of our subsidiaries identifies
risks related to the use of child and forced labour in their
own and their counterparties’ operations. PhosAgro Group
only cooperates with those counterparties that show no
tolerance for child labour (work done by children under the
minimum age for admission to employment as provided by
the laws) and may refuse to cooperate with the suppliers
that do not adhere to the respective zero-tolerance policy.
The ESG assessment of suppliers in 2021 revealed that 51%
of our counterparties had adopted a zero-tolerance policy
on child labour, which prevents such incidents. Needless
to say, this number should show a trend towards growth.
Therefore, our important objective in 2022 is to step up
efforts in communicating the importance of principles
enshrined in the Code of Conduct for Counterparties and
invite suppliers to discuss sustainable development matters.
Programmes for engagement with local communities,
assessment of our operations' impact on local communities,
and local community development programmes were
implemented across all branches of Apatit and PhosAgro.
The Group has no operations with significant actual and
potential negative impacts on local communities. Significant
impacts of the Group on local communities has been assessed
as part of evaluation of UN Sustainable Development Goals
impacts.
No such cases registered, not applicable.
No such cases registered, not applicable.
3
134
124
128
2
192
98
338
339
Additional InformationAbout this ReportCompany ProfileStrategic ReportPerformance ReviewCorporate GovernanceShare CapitalAdditional Information GRI Content Index: additional information
Defined benefit plan and other retirement-related obligations
GRI 201–3
Region
Employee benefit obligations
Actual performance of the employee benefit
obligations, RUB mln
i
n
o
g
e
r
a
d
g
o
o
V
l
i
n
o
g
e
r
d
a
r
g
n
n
e
L
i
i
n
o
g
e
r
k
s
n
a
m
r
u
M
i
n
o
g
e
r
v
o
t
a
r
a
S
l
a
t
o
T
Current value of employee benefit obligations (private benefit coverage for
newly retiring employees)
Retirement-related obligations
(other than employee benefit
obligations)
Payment of retirement benefits
Merit benefit plans
Financial aid to retired former employees
Total:
Current value of employee benefit obligations (private benefit coverage for
newly retiring employees)
Retirement-related obligations
(other than employee benefit
obligations)
Payment of retirement benefits
Merit benefit plans
Financial aid to retired former employees
Total:
Current value of employee benefit obligations (private benefit coverage for
newly retiring employees)
Retirement-related obligations
(other than employee benefit
obligations)
Payment of retirement benefits
Merit benefit plans
Financial aid to retired former employees
Total:
Current value of employee benefit obligations (private benefit coverage for
newly retiring employees)
Retirement-related obligations
(other than employee benefit
obligations)
Payment of retirement benefits
Merit benefit plans
Financial aid to retired former employees
Total:
Current value of employee benefit obligations (private benefit coverage for
newly retiring employees)
Retirement-related obligations
(other than employee benefit
obligations)
Total:
Payment of retirement benefits
Merit benefit plans
Financial aid to retired former employees
2021
Estimate
7,918
19,148
73,191
100,256
Estimate
0,385
0,000
19,746
20,131
Estimate
35,126
0,000
88,877
124,003
Estimate
0,902
0,000
7,637
8,539
Estimate
44,331
19,148
189,451
252,929
Parental leave
GRI 401-3
Region
Vologda Region
Vologda Region
Vologda Region, total
Saratov Region
Saratov Region
Saratov Region, total
Leningrad Region
Leningrad Region
Leningrad Region, total
Murmansk Region
Murmansk Region
Murmansk Region, total
Moscow Region
Moscow Region
Moscow Region, total
Grand total
Employees on leave
Employees on leave
Employees who returned
after leave
Gender
as at 31 December 2021
1 January 2021 to
31 December 2021
1 January 2021 to
31 December 2021
F
M
F
M
F
M
F
M
F
М
288
2
290
51
1
52
42
42
194
4
198
11
11
593
379
3
382
68
1
69
56
1
57
285
8
293
18
18
819
Returning ratio is the ratio between those who returned and those who had been supposed to return.
Retention ratio is the ratio between those who returned in the previous period and continued working as at 31 December
and all of those who returned to work in the previous period.
Total number of new employee hires in 2021, people
GRI 401-1
Region
Gender
Under 25 years
25–34 years
35–44 years
45–55 years
Above 55 years
Vologda Region
Vologda Region
Vologda Region, total
Leningrad Region
Leningrad Region
Leningrad Region, total
Moscow region
Moscow region
Moscow Region, total
Murmansk Region
Murmansk Region
Murmansk Region, total
Saratov Region
Saratov Region
Saratov Region, total
Other
Other, total
Total
M
F
M
F
M
F
M
F
M
F
M
F
173
102
275
60
32
92
1
1
2
196
82
278
26
26
52
0
0
0
215
183
398
127
42
169
11
12
23
424
127
551
90
41
131
0
3
3
167
160
327
118
43
161
11
20
31
463
101
564
69
44
113
1
5
6
70
78
148
52
30
82
8
7
15
196
46
242
17
22
39
0
1
1
11
26
37
7
15
22
3
0
3
22
10
32
1
7
8
0
1
1
699
1,275
1,202
527
103
3,806
65
65
13
13
15
1
16
76
2
78
3
3
175
Total
636
549
1,185
364
162
526
34
40
74
1,301
366
1,667
203
140
343
1
10
11
340
341
Additional InformationAbout this ReportCompany ProfileStrategic ReportPerformance ReviewCorporate GovernanceShare CapitalAdditional Information
Personnel turnover by gender, age and region
GRI 401-1
Turnover in 2020, %
Region
Gender
Under 25 years
25–34 years
35–44 years
45–55 years
Above 55 years
M
F
M
F
M
F
M
F
M
F
M
F
0.14
0.11
0.25
0.04
-
0.04
-
0.01
0.01
0.29
0.09
0.38
-
0.03
0.03
0.47
0.24
0.70
0.54
0.33
0.87
0.16
0.08
0.24
0.05
0.02
0.07
1.24
0.25
1.50
0.06
0.05
0.11
2.05
0.73
2.78
0.40
0.31
0.71
0.14
0.14
0.28
0.03
0.01
0.04
1.43
0.24
1.67
0.11
0.05
0.15
2.11
0.74
2.85
0.21
0.18
0.39
0.06
0.04
0.10
0.01
0.01
0.02
0.62
0.11
0.74
0.05
0.05
0.09
0.95
0.39
1.34
0.08
0.06
0.14
0.01
-
0.01
-
0.01
0.01
0.10
0.05
0.15
0.04
0.04
0.08
0.22
0.16
0.38
Vologda Region
Vologda Region
Vologda Region, total
Leningrad Region
Leningrad Region
Leningrad Region, total
Moscow region
Moscow region
Moscow Region, total
Murmansk Region
Murmansk Region
Murmansk Region, total
Saratov Region
Saratov Region
Saratov Region, total
Men, total
Women, total
Total
Turnover in 2021, %
Region
Gender
Under 25 years
25–34 years
35–44 years
45–55 years
Above 55 years
Vologda Region
Vologda Region
Vologda Region, total
Leningrad Region
Leningrad Region
Leningrad Region, total
Moscow region
Moscow region
Moscow Region, total
Murmansk Region
Murmansk Region
Murmansk Region, total
Saratov Region
Saratov Region
Saratov Region, total
Men, total
Women, total
Total
M
F
M
F
M
F
M
F
M
F
M
F
0.19
0.15
0.34
0.13
0.04
0.17
0.01
-
0.01
0.33
0.11
0.44
0.06
0.03
0.09
0.71
0.34
1.05
0.87
0.60
1.47
0.38
0.10
0.48
0.03
0.01
0.04
1.47
0.36
1.83
0.26
0.11
0.38
3.02
1.18
4.21
0.74
0.66
1.40
0.33
0.10
0.43
0.02
0.03
0.05
1.48
0.36
1.84
0.14
0.17
0.31
2.71
1.31
4.02
0.27
0.24
0.51
0.09
0.06
0.14
0.03
0.01
0.04
0.53
0.18
0.71
0.08
0.08
0.16
0.99
0.57
1.56
0.05
0.09
0.14
0.02
0.02
0.05
-
-
-
0.10
0.05
0.14
0.02
0.03
0.05
0.20
0.18
0.38
Total
1.35
0.99
2.34
0.41
0.25
0.67
0.09
0.06
0.15
3.69
0.74
4.43
0.25
0.21
0.47
5.80
2.25
8.05
Total
2.13
1.73
3.86
0.95
0.32
1.27
0.09
0.05
0.14
3.90
1.06
4.96
0.57
0.43
0.99
7.64
3.59
11.22
SASB content index
Code
Activity metric
EM-MM-000.B
Total number of employees, percentage contractors
Environmental
RT-CH-110a.1
EM-MM-110a.1
RT-CH-110a.2
EM-MM-110a.2
RT-CH-120a.1
EM-MM-120a.1
RT-CH-130a.1
EM-MM-130a.1
RT-CH-140a.1
EM-MM-140a.1
RT-CH-140a.2
EM-MM-140a.2
RT-CH-140a.3
Gross global Scope 1 emissions, percentage covered under
emissions-limiting regulations
Discussion of a long-term or short-term strategy or plan to manage
Scope 1 emissions, emissions reduction targets, and an analysis
of performance against those targets
Air emissions of the following pollutants: (1) CO, (2) NOx (excluding
N2O), (3) SOx, (4) particulate matter (PM10), (5) mercury (Hg), (6) lead
(Pb), (7) volatile organic compounds (VOCs), and (8) hazardous air
pollutants (HAPs)
1 (1) Total energy consumed, (2) percentage grid electricity, (3)
percentage renewable, (4) total self-generated energy
(1) Total water withdrawn, (2) total water consumed, percentage of
each in regions with High or Extremely High Baseline Water Stress
Number of incidents of non-compliance associated with water quality
permits, standards, and regulations
Description of water management risks and discussion of strategies
and practices to mitigate them
RT-CH-150a.1
Amount of hazardous waste generated, percentage recycled
EM-MM-150a.1
Total weight of tailings waste, percentage recycled
EM-MM-150a.2
Total weight of mineral processing waste, percentage recycled
EM-MM-160a.1
Description of environmental management policies and practices for
active sites
EM-MM-160a.3
Percentage of (1) proved and (2) probable reserves in or near sites
with protected conservation status or endangered species habitat
RT-CH-410b.1
(1) Percentage of products that contain Globally Harmonized System
of Classification and Labeling of Chemicals (GHS) Category 1 and 2
Health and Environmental Hazardous
Substances, (2) percentage of such products that have undergone a
hazard assessment
RT-CH-410b.2
Discussion of strategy to (1) manage chemicals of concern and (2)
develop alternatives with reduced human and/or environmental
impact
Page number/
Comment
127
170
164
180
174
183
183
183
176
177
177
158
188
177
158
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Code
Social
Activity metric
EM-MM-210a.3 Discussion of engagement processes and due diligence practices
with respect to human rights, indigenous rights, and operation in
areas of conflict
RT-CH-210a.1
Discussion of engagement processes to manage risks and
opportunities associated with community interests
EM-MM-210b.1
Discussion of process to manage risks and opportunities associated
with community rights and interests
EM-MM-210b.2 Number and duration of non-technical delays
EM-MM-310a.2 Number and duration of strikes and lockouts
RT-CH-320a.1
RT-CH-320a.2
(1) Total recordable incident rate (TRIR) and (2) fatality rate for (a)
direct employees and (b) contract employees
Description of efforts to assess, monitor, and reduce exposure of
employees and contract workers to long-term (chronic) health risks
RT-CH-540a.1
Process Safety Incidents Count (PSIC), Process Safety Total Incident
Rate (PSTIR), and Process Safety Incident Severity Rate (PSISR)
RT-CH-540a.2
Number of transport incidents
Governance
EM-MM-510a.1 Description of the management system for prevention of corruption
and bribery throughout the value chain
EM-MM-510a.2 Production in countries that have the 20 lowest rankings in
Transparency International’s Corruption Perception Index
RT-CH-530a.1
Discussion of corporate positions related to government regulations
and/or policy proposals that address environmental and social factors
affecting the industry
Page number/
Comment
124
190
190
42
No cases
147
144
147
146
256
The Company does not carry out production
in countries that have the 20 lowest rankings
in Transparency International’s Corruption
Perception Index
161, 252
TCFD
Recommendations
Indicator
Corporate governance
The Board of Director’s role in monitoring climate-related risks and opportunities.
The management’s role in assessing and managing climate-related risks and opportunities
Strategy
Description of the climate-related risks and opportunities the organisation has identified
over the short, medium, and long term.
Description of the impact of climate-related risks and opportunities on the organisation’s
businesses, strategy, and financial planning.
Assessment of the resilience of the organisation’s strategy, taking into consideration
different climate-related scenarios, including a 4°C and 2°C scenario.
Climate risk management
Description of the organisation’s processes for identifying and assessing climate-related
risks.
Description of the organisation’s processes for managing climate-related risks.
Description of integration of processes for identifying, assessing and managing climate-related
risks into the general risk management framework
Metrics and targets
Description of the metrics used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management processes.
Disclosure of Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions,
and the related risks.
Description of the targets used by the organisation to manage climate-related risks
and opportunities and performance against targets.
Reported
208
208
164
164
165
165
165
76
166
170
163
TCFD Report
For more information on GHG
emissions and climate risks,
see the TCFD report 2020
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AN – ammonium nitrate
HR – human resources
ANBP – apatite-nepheline beneficiation plant
HSE – health, safety and environment
ANSES – French Agency for Food,
Environmental and Occupational Health & Safety
IFA – International Fertilizer Association
BAT – best available technique
IFRS – International Financial Reporting
Standards
bln – billion
IMF – International Monetary Fund
Capex – capital expenditure
CDP – Carbon Disclosure Project
CIS – Commonwealth of Independent States
CJSC – closed joint-stock company
CO2 – carbon dioxide
IPCC – in-pit crushing and conveying
at the Vostochny mine
IRR – internal rate of return
IT – information technology
IUPAC – International Union of Pure and
Applied Chemistry
COVID-19 – сoronavirus disease 2019,
the pandemic caused by severe acute respiratory
syndrome coronavirus 2 (SARS-CoV-2)
JSC – joint-stock company
kg – kilogram
DAP – diammonium phosphate
KPI – key performance indicator
DROZD – Educated and Healthy Children
of Russia programme
kWh – kilowatt-hour
EBITDA – earnings before interest, taxes,
depreciation and amortisation
LSE – London Stock Exchange
LTIFR – lost time injury frequency rate
EMERCOM – Ministry for Civil Defence,
Emergencies and Elimination of
Consequences of Natural Disasters
MAP – monoammonium phosphate
MCP – feed monocalcium phosphate
ESG – environmental, social, and governance
mg – milligram
ESPP – European Sustainable Phosphorus
Platform
mln – million
PhosAgro Group – PJSC PhosAgro
and its subsidiaries and affiliates
PJSC – public joint-stock company
PwC – PricewaterhouseCoopers
R&D – research and development
RAFP – Russian Association of Fertilizer
Producers
RAS – Russian Accounting Standards
REACH – Registration, Evaluation,
Authorisation and Restriction of Chemicals
Rospotrebnadzor – Federal Service for
Surveillance on Consumer Rights Protection
and Human Wellbeing
Rostekhnadzor – Federal Service for
the Supervision of Environment, Technology
and Nuclear Management
RSPP – Russian Union of Industrialists and
Entrepreneurs
RUB – Russian rouble
SDG – UN Sustainable Development Goal
SMEs – small and medium-sized enterprises
SO2 – sulphur dioxide
STPP – sodium tripolyphosphate
Strategy to 2025 – PhosAgro’s Development
Strategy to 2025
EU – European Union
FAO – Food and Agriculture Organisation
GDP – gross domestic product
MOP – muriate of potash
t – metric tonne
MW – megawatt
ths – thousand
NIUIF – Samoilov Scientific Research Institute
for Fertilizers and Insectofungicides
UN – United Nations
GDR – global depositary receipt
NO2 – nitrogen dioxide
UNESCO – United Nations Educational,
Scientific and Cultural Organisation
GLOSOLAN — Global Soil Laboratories
Networks; supporting the GLOSOLAN
by developing research capacities and
strengthening the Regional Soil Laboratories
Networks (RESOLAN)
NPK – nitrogen-phosphorus-potassium
fertilizer
USA – United States of America
OPEC – Organisation of the Petroleum
Exporting Countries
USD – United States dollar
VAT – value-added tax
GRI – Global Reporting Initiative
P2O5 – phosphoric pentoxide
VOC – volatile organic compound
Contacts
GRI 2-1
Investor Relations
Andrey Serov
Head of Investor Relations
Corporate Secretary
Sergey Samosyuk
Address
PJSC PhosAgro
Depositary
Auditor
Citigroup Global Markets Deutschland AG
AO PricewaterhouseCoopers Audit
LLC FBK
Registrar
JSC Reestr
Contacts for employees
and potential employees
Contacts for media
Dmitry Borodich
HR and Social Policy Director
Andrey Podkopalov
Director of Information Policy
Tel.: +7 (495) 231 31 15
Email: ir@phosagro.ru
Tel.: +7 (495) 232 96 89, ext. 27 12
Email: ks@phosagro.ru
55/1 Leninsky Prospekt, bldg. 1,
Moscow 119333, Russia
Tel.: +7 (495) 232 96 89
Fax: +7 (495) 956 19 02
Frankfurter Welle Reuterweg 16
60323 Frankfurt, Germany
White Square Business Centre
10 Butyrsky Val,
Moscow, 125047, Russia
Tel.: +7 (495) 967 60 00
Fax: +7 (495) 967 60 01
Website: www.pwc.ru
44/1 Myasnitskaya St., Moscow
101990, Russia
Tel.: +7 (495) 737 53 53
Fax: +7 (495) 737 53 47
Website: www.fbk.ru
20 B. Balkansky Lane, bldg. 1,
Moscow 129090, Russia
Tel.: +7 (495) 617 01 01
Fax: +7 (495) 680 80 01
Email: reestr@aoreestr.ru
Website: www.aoreestr.ru
Tel.: +7 (495) 231 31 15
Email: info@phosagro.ru
Tel.: +7 (495) 232 96 89, ext. 26 51
Sustainability contacts
Sergey Kudryashov
Head of Sustainable Development Department
Tel.: +7 (495) 231 27 47
Email: info@phosagro.ru
Timur Belov
Head of Information Policy Division, Press Secretary
Tel.: +7 (495) 232 96 89, ext. 26 52
Email: pr@phosagro.ru
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