CULTIVATING
TOMORROW
Integrated report
2023
CONTENTS
ABOUT THIS REPORT
COMPANY PROFILE
Key highlights
Key events in 2023
2
4
6
8
Key events in the field of education 10
Our mission and values
Navigator on UN SDGs
Business model
Geographical footprint
Investment case
and credit ratings
Stakeholder engagement
Material topics
12
14
15
18
20
27
30
STAGEGIC REPORT
32
PERFOMANCE REVIEW
Chairman's statement
CEO’s statement
Business environment
Market overview
Strategy
Strategic risks
34
37
42
47
50
68
Financial performance
Operational performance
Customers and
product management
Research and education
Supply chain
People development
Industrial safety
Environmental review
Contributing
to local communities
80
82
90
96
110
128
142
164
182
222
CORPORATE
GOVERNANCE
Chairman’s statement
Corporate
governance framework
Corporate
governance structure
General Meeting
of Shareholders
Board of Directors
Executive bodies
Remuneration report
Corporate controls
Ethical practices
244
246
247
250
255
255
278
280
284
290
SHARE CAPITAL
304
APPENDICES
Share capital
Ownership structure
Share performance
Debt management
Analyst coverage
Dividend policy
Relationship with
shareholders and investors
Information disclosure
306
306
306
308
309
309
312
315
The consolidated
financial statements
Independent limited
assurance report
GRI content index
Sustainable development
indicators content index
as per the Order of the Ministry
of Economic Development
of Russia
SASB content index
TCFD Recommendations
Glossary
Contacts
316
318
359
362
384
388
390
391
393
For the interactive
version of the report,
please visit our website
at www.phosagro.com
Appendices
(stand-alone document)
ABOUT
THIS REPORT
GRI 2-1, 2-2, GRI 2-3
It is our pleasure to welcome you
to the 2023 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 AND
STANDARDS
GRI 2-5, 2-14
This Report complies with
the following requirements and
recommendations:
• Bank of Russia’s Regulation
No. 714-P On Disclosure
of Information by the Issuers
of Issue-Grade Securities dated
27 March 2020;
• Bank of Russia’s Letter
No. 06–52/2463 On Corporate
Governance Code dated 10 April
2014;
• Bank of Russia’s Letter
No. IN-06–28/102 On Disclosure
in the Annual Report of a Public
Joint-Stock Company of a Report
on Compliance with the Principles
and Recommendations
of the Corporate Governance Code
dated 27 December 2021;
• the UK Corporate Governance
Code;
• Bank of Russia’s Information
Letter No. IN-06-28/49
On Recommendations
on Disclosure by Joint-Stock
Companies of Non-Financial
Information Pertaining to Their
Activities dated 12 July 2021;
• Order of the Ministry of Economic
Development of Russia No. 764
On Approval of Methodological
Recommendations
The Company maintains an annual
reporting cycle, with the previous
report released on 29 April 2023.
The Report highlights how we inte-
grate ESG principles into everything
we do. The reporting period
for the Company’s consolidated finan-
cial statements is from 1 January
2023 to 31 December 2023.
for the Preparation of Sustainable
Development Reporting dated
1 November 2023;
• the Listing Rules of the Moscow
Exchange and 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);
• Reference Performance
Indicators of the Russian
Union of Industrialists and
Entrepreneurs (RSPP), and
the MOEX–RSPP Responsibility and
Transparency, and Sustainability
Vector indices;
• the Social Charter of the Russian
Business sponsored by the Russian
Union of Industrialists and
Entrepreneurs.
The Company takes into account
Russian and international best
practices for disclosing informa-
tion on sustainable development,
including the ESG reporting stand-
ards IFRS S1 and IFRS S2 issued
by the International Sustainability
Standards Board (ISSB).
The Company prepared reporting
in accordance with the GRI Standards.
Appropriate disclosure of qualita-
tive and quantitative information
prepared in accordance with the GRI
Standards (“Selected Information”)
has been assured by Joint-Stock
Company Technologies of Trust –
Audit (Technologies of Trust – Audit
JSC) in line with the International
Standard on Assurance Engagements
(ISAE) 3000 (Revised), Assurance
Engagements Other than Audits
or Reviews of Historical Financial
Information. The independent assur-
ance report and the GRI Content Index
are available in the appendices to this
Report.
This Report provides insight
into the performance of parent
company PhosAgro and its subsid-
iaries (hereinafter jointly referred
to as “PhosAgro Group”, the “Group”,
or the “Company”) across their
operations for the year 2023, while
also offering information on corpo-
rate governance and corporate
responsibility. The key subsidiaries
of the Group and PhosAgro’s stake
in these subsidiaries are presented
in the Group’s 2023 IFRS consolidated
financial statements.
Financial results in the Report
were disclosed based on the IFRS
consolidated financial statements
of the Group for 2023 audited
by Technologies of Trust – Audit JSC
in accordance with the International
Standards on Auditing.
The boundaries of the Group compa-
nies covered in this Report differ
from those in consolidated financial
statements when it comes to specific
non-financial disclosures. To ensure
compliance with the materiality prin-
ciple, we determined such boundaries
in a way that this Report describes all
material aspects of PhosAgro Group.
The data disclosed in this Report
includes information on:
Boundary 1 – PhosAgro and compa-
nies that are part of the group
to which PhosAgro belongs
(corresponds to the scope of disclo-
sure in IFRS consolidated financial
statements).
Boundary 2 – Apatit, including
its branches and standalone business
units.
For more information on specific
disclosures and their boundaries used
in this Report, see the GRI Content Index
section on page 358.
The future of humanity will depend on how we produce
the food products that we need.
Will they be accessible to everyone?
Will they be environmentally friendly and healthy?
Can we preserve our fragile natural systems along the way?
At PhosAgro, we firmly believe that responsible and efficient production
of mineral fertilizers will play a vital role in addressing these concerns.
In the agricultural sector, the future is already here.
Autonomous farming machinery, precision irrigation systems, and
unmanned crop monitoring have all become daily realities in what
was once deemed a backward and conservative industry.
The theme of knowledge and technologies for sustainable fertility will
be at the core of our Integrated Annual Report for 2023, reflecting our deep
commitment to resolving the challenges faced by Russian agriculture.
One of the remarkable breakthroughs of 2023 was the extensive advance-
ment of artificial intelligence technologies. AI has been instrumental
in preparing this Report, with some of the images generated using neural
networks. However, just like in agriculture, the smartest technology excels
when guided by human intuition, creative vision, and professional expertise.
This is the kind of future we eagerly embrace.
The Report was pre-approved by the
Board of Directors of PhosAgro on
26 April 2024 (Minutes w/o No. dated
27 April 2024).
COMPANY
PROFILE
PHOSAGRO CONTINUES TO STRENGTHEN ITS POSITION AS
A MANUFACTURER OF INNOVATIVE MINERAL FERTILIZERS.
FIELD TESTS AND AGRONOMIC TRIALS CONDUCTED IN
CONJUNCTION WITH RESEARCH CENTRES CONFIRM BOTH
THE EFFECTIVENESS OF OUR MINERAL NUTRITION SYSTEMS
AND THEIR AFFORDABILITY FOR RUSSIAN FARMERS.
THE REPORTING YEAR WILL ALSO BE REMEMBERED FOR
MANY BRIGHT EVENTS RELATED TO EDUCATION AND
DEVELOPMENT OF ADVANCED AGRO TECHNOLOGIES.
For more information, see page 10
>500
agronomic trials in >20 countries
Key
highlights
6
Key events
in 2023
8
Key events
in the field of education
10
Our mission
and values
12
Navigator
on UN SDGs
14
Business
model
15
Geographical footprint
18
Investment case
and credit ratings
20
Stakeholder
engagement
27
Material
topics
30
4
5
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE KEY
HIGHLIGHTS
PhosAgro Group takes
a holistic approach
to evaluating its performance
across production, finance,
environmental, social, and
other domains. We believe
that a successful and efficient
business should contribute
positively to society and make
continuous efforts to reduce
its environmental footprint.
At all levels of the Company’s
management, from the Board
of Directors onwards,
we maintain a steadfast focus
on sustainable development
and social responsibility.
In 2023, we continued
delivering strong operational
and financial results
inseparable from achieving
our climate, environmental,
industrial safety, and social
development targets.
FINANCIAL HIGHLIGHTS
OPERATIONAL HIGHLIGHTS
SUSTAINABLE DEVELOPMENT HIGHLIGHTS
Revenue, RUB bln
Sales by key product1, kt
‘23
‘22
‘21
-22.7%
440.3
569.5
420.5
‘23
‘22
‘21
Adjusted net profit, RUB bln
Phosphoric acid output2, kt
‘23
‘22
‘21
-42.9%
104.1
182.3
130.5
‘23
‘22
‘21
+2.0%
11,353.5
11,133.1
10,483.8
+4.6%
3,345.3
3,199.4
2,952.0
Dividend payments, RUB bln
‘23
‘22
‘21
94.5
142.1
72.3
The Company’s revenue and EBITDA for
2023 decreased year-on-year, driven
by the stabilisation of global fertilizer
prices after a surge to historical highs in
2022, while the annual EBITDA margin
remained at above 40%.This high figure
reflects the growth in production of
high-margin fertilizers and primary
feedstock, and a flexible sales policy of
the Company.
1
In 2023, the Company expanded
its portfolio of key products to include
aluminium fluoride, sulphuric acid,
phosphoric acid, sodium silicofluoride, and
aluminium sulphate. Sales for 2021 and
2022 have been adjusted accordingly.
2 A key ingredient of phosphate fertilizers.
2023 was a new record year
for PhosAgro in terms of output and
sales. The organic growth, driven
by the successful implementation of our
investment programme in previous
years, enabled us to fully capitalise
on promising opportunities, primarily
in the Latin American and in the priority
domestic market. The flexibility of our
production systems and logistics
ensured our ability to effectively meet
customer needs across all product
categories.
Pollutant emissions, kg per tonne
of finished and semi-finished
products
GHG emissions (Scope 1), kg
of СO2-eq. per tonne of finished
and semi-finished products
Waste water discharge into
surface water bodies, m3 per
tonne of finished and semi-finished
products
Goal
‘25
‘23
‘22
‘21
0.800
0.799
0.793
0.801
Goal
‘28
‘23
‘22
‘21
109.1
128.5
133.1
135.5
Goal
‘25
‘23
‘22
‘21
4.16
4.72
5.27
5.31
Share of recycled
and decontaminated hazard class
1–4 waste, %
Water withdrawal, including mining
and pit waters, m3 per tonne
Average annual training hours per
employee, hour
Goal
‘25
‘23
‘22
‘21
40.0
40.2
38.8
39.1
Goal
‘25
‘23
‘22
‘21
5.16
6.05
6.42
6.48
Goal
‘25
‘23
‘22
‘21
123.0
99.4
99.8
95.1
LTIFR (own staff) per 1 mln
man-hours
Workplace fatalities (corporate staff)
Employee satisfaction and loyalty, %
‘23
‘22
‘21
0.37
0.32
0.85
‘23
‘22
‘21
PhosAgro Group continued to progress
towards achieving its goals in climate
action, energy efficiency, waste
management, and water management.
In 2023, the emissions reduction
targets and waste recycling and
decontamination objectives
outlined in our Strategy to 2025
were successfully achieved ahead
of schedule.
In 2023, PhosAgro Group recorded no
accidents, incidents, or fires across
its facilities. The Balakovo branch
maintained a zero lost time injury
frequency rate throughout the year.
0
1
0
Goal
‘25
‘23
‘22
‘21
65
73
69
57
Employee satisfaction and loyalty
within PhosAgro Group have been
consistently improving each year, thanks
to a well-thought-out human resources
strategy, extensive social programmes,
and an active communication policy.
The average pay at the Group's facilities
increased by 60% from 2021 to 2023,
and in February 2024, an additional 15%
indexation was implemented.
For more information on financial
performance, see page 82
For more information on operational
performance, see page 90.
For information on sustainability
performance, see page 142, 165, 182
6
7
2023Integrated Report APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE KEY EVENTS
IN 2023
JANUARY
• The Volkhov branch
MARCH
• PhosAgro received
MAY
• PhosAgro Group received
commenced the production
of water soluble MAP, a new
highly popular fertilizer
its first-ever and highest
possible ratings from
AKRA (AAA (RU)) and
Expert RA (also AAA (RU))
with a stable outlook.
its third Grand Prix
at the Russian Business
Leaders: Dynamics,
Responsibility and
Sustainability Awards
• PhosAgro redeemed
its Eurobonds issued
in 2018
In 2023, PhosAgro celebrated
the 20th anniversary since
the inception of its DROZD
programme
JULY
• PhosAgro topped the ESG ranking
of Russian companies by RAEX
• The interdepartmental
commission approved PhosAgro’s
Special Investment Contracts
(SPIC 2.0) for the development
of the Balakovo production site
• PhosAgro-Region launched
its third proprietary distribution
centre for mineral fertilizers
in the Tambov region
SEPTEMBER
• The Cherepovets facility produced
its 100-millionth tonne of sulphuric
acid
• PhosAgro joined the UN Global
Compact's Forward Faster
initiative calling for an accelerated
achievement of the UN
Sustainable Development Goals
(SDGs)
NOVEMBER
• PhosAgro won in four categories
• PhosAgro received the highest
of the 5 Stars. Leaders
scores in the rankings of Russia’s
in the Chemical Industry
best employers by Forbes and
nationwide annual industry
RBC
competition
• Global Ports and PhosAgro
• The Company achieved top
Group signed a five-year
positions in the 2023 Russian
contract for the transshipment
Leaders in Corporate
of fertilizers at the Great Port
Philanthropy competition
of St Petersburg
• PhosAgro’s Board of Directors
• PhosAgro was included
approved the progress of key
in Forbes' Top 20 largest
investment projects as part
investment companies in Russia
of the Company’s Development
Strategy to 2025
• PhosAgro-Region opened a new
customer centre in Krasnodar
• For the second consecutive year,
• PhosAgro Group won
PhosAgro won the Grand Prix
in the Moscow Exchange Annual
Reports competition
the Competitive Procurement
Leader Award, an all-Russian
professional competition in trade
• PhosAgro ranked among
and procurement
the Top 10 Russian companies
in the new Fortune 500 ranking
of Europe's largest corporations
APRIL
•
Independent director Victor
Cherepov was re-elected Chairman
of PhosAgro’s Board of Directors
• PhosAgro Group increased salaries
for all employees by an additional 15%
• PhosAgro successfully made its debut
in the Russian debt market with
CNY-denominated bonds
• PhosAgro successfully placed
its debut RUB-denominated bonds
with twofold oversubscription
and the lowest spread to the yield
of Russian federal bonds among
domestic issuers
JUNE
• The 900-millionth tonne of apatite-
nepheline ore was shipped from
the Kirovsky mine of Apatit’s Kirovsk
branch
• During the 2023 St Petersburg
International Economic Forum (SPIEF),
PhosAgro and Gazprombank signed
an agreement to organise the offering
of replacement bonds
• Russian Railways and PhosAgro Group
reached an agreement on long-
term strategic partnership in freight
transportation
• PhosAgro-Region commenced supplies
of water soluble MAP to the Russian
market
AUGUST
• PhosAgro Group facilities signed new
collective bargaining agreements,
effective until 2026. They expanded
the range of social support measures
and increased funding for employee
benefits
• August marked the 10th anniversary
since the launch of PhosAgro Group's
large-scale investment programme
• The Cherepovets facility produced
its 100-millionth tonne of phosphate
fertilizers
• PhosAgro successfully placed
USD 740 mln worth of replacement
bonds
DECEMBER
• Output of phosphoric acid across
PhosAgro’s sites surpassed its record 3 mt
mark
• PhosAgro took part in the panel discussion
on food security during the 28th session
of the Conference of the Parties (COP28)
to the UN Framework Convention
on Climate Change
• PhosAgro-Region started selling
domestically bred seeds
OCTOBER
• PhosAgro Group commenced
supplies of water soluble MAP
to customers in Central and Middle
Asia
• The first ore was extracted from
• PhosAgro-Region launched a new
the new +10m horizon at the Yukspor
deposit (the Kirovsky mine of Apatit’s
Kirovsk branch)
distribution centre in the Saratov region
• The Balakovo production site celebrated
its 50th anniversary
• Apatit received the Russian Government’s
2023 Quality Award
FEBRUARY
• The Cherepovets site shipped
the first batch of a new product
called ApaSil
• PhosAgro Group introduced a new
phosphogypsum-based product
for use in livestock farming
8
9
2023Integrated Report APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE KEY EVENTS
IN THE FIELD OF EDUCATION
TODAY, AGRICULTURE HAS
FIRMLY ESTABLISHED ITSELF
AS ONE OF THE FLAGSHIP
SECTORS OF THE RUSSIAN
ECONOMY, THANKS IN LARGE
PART TO THE EXTENSIVE
IMPLEMENTATION
OF THE MOST ADVANCED
AGRICULTURAL
TECHNOLOGIES, INCLUDING
DIGITAL SOLUTIONS.
To sustain and strengthen this trend,
the agricultural sector needs a new
quality of management proficiency.
This, in turn, requires an upgraded skill
set among the human capital engaged
in the agro-industrial sector of Russia.
As one of the leaders in the domestic
agrochemical industry and a reliable
partner for farmers, PhosAgro Group
plays a crucial role in the technological
transformation of Russian agriculture.
In addition to providing farmers with
high-quality and eco-friendly mineral
fertilizers, PhosAgro Group is actively
involved in disseminating cutting-
edge scientific knowledge in the field
of agriculture.
The Company has established
a multi-level system that contributes
to the development of intellectual
capital within the industry. It extends
from supporting school programmes,
secondary and higher education
projects, and aiding existing
agricultural producers to engaging
in global scale initiatives.
At PhosAgro Group, we believe that
the formula for sustainable soil fertility
in our country lies in the combination
of Russia's unique natural resources,
cutting-edge scientific knowledge,
and, most importantly, the talent and
hard work of our people.
10
11
June
PhosAgro Group
and the Russian
Ministry of Agriculture
announced an expansion
of collaboration
in agricultural education
PhosAgro Group launched
Pro Agro Lectorium, a digital
educational platform
PhosAgro Group opened
an educational centre
at St Petersburg State
Agrarian University
February
PhosAgro Group
opened an educational
centre at Urals State
Agrarian University
April
PhosAgro Group
and Mendeleyev
University of Chemical
Technology
announced
partnership to develop
a line of biologised
mineral fertilizers
PhosAgro Group
and several leading
universities in Africa
signed agreements
on collaboration
in promoting
agricultural education
July
September
August
PhosAgro launched
its Pro Agro Lectorium
digital educational
platform for African
farmers
PhosAgro Group
opened its flagship
educational
centre at Moscow
State Academy
of Veterinary
Medicine and
Biotechnology
October
PhosAgro Group and the Russian
Ministry of Agriculture
presented a joint programme
for training agricultural industry
professionals to Prime Minister
Mikhail Mishustin
PhosAgro awarded the winners
of the fourth Laverov
Scholarships competition
for research in the fields
of ecology, new materials, and
substances
November
PhosAgro Group
opened an educational
centre at Kazan State
Agrarian University
UNESCO,
in collaboration with
PhosAgro and IUPAC,
awarded its seventh
grants for research
in the field of green
chemistry to the best
young scholars from
around the world
PHOSAGRO
SCHOOLS
VOCATIONAL SCHOOLS, TECHNICAL
COLLEGES, AND UNIVERSITIES
AGRICULTURAL
UNIVERSITIES
INNOVATION
PRO AGRO
LECTORIUM
A programme to promote in-depth
study of natural sciences, economics,
and management disciplines. Financial
support to schools and career
guidance for students with a view
to attracting young talent to the mining
and chemical industries
Support for educational facilities
infrastructure and assistance in aligning
educational programmes with the labour
market requirements. Offering students
internship opportunities at PhosAgro
Group’s facilities with potential
subsequent employment.
6
schools
5
cities
> 6 thousand
students
620
participants in the High-
Potential Graduates
programme and PhosAgro
START programme
24
educational
institutions
230
students who have signed Company-
funded education and scholarship
agreements
A programme to improve proficiency
levels of students and teachers
at agricultural universities
as well as of agricultural producers
and agro-industrial technology service
providers.
Scholarship programmes
for young researchers
PhosAgro Group's awards
for the best implemented
R&D projects and practices
47
universities
> 40 thousand
programme
participants
Partnership for promoting basic
sciences and research
Collaboration in climate action
and biodiversity preservation
17
PhosAgro Group’s
education centres
An online platform based
on PhosAgro’s From Mine to Plate
training programme and offering
e-lectures on various topics, such
as agronomy and agrochemistry, crop
and livestock production, innovations
and digitalisation in agriculture,
economics, law, and responsible
farming.
15
topics
35
speakers
For more information, see
page 232
For more information, see
page 123, 155, 235
For more information, see
page 236
For more information, see
page 123
For more information, see
page 236
2023Integrated Report APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE OUR MISSION
AND VALUES
AS ONE OF THE WORLD’S LEADING MINERAL
FERTILIZER PRODUCERS, PHOSAGRO
ASSUMES A SPECIAL RESPONSIBILITY
FOR GLOBAL FOOD SECURITY.
WE OFFER HIGH-QUALITY, ECO-
FRIENDLY FERTILIZERS, SUPPLY THEM,
AND TRAIN FARMERS HOW TO APPLY THEM
IN THE MOST SUSTAINABLE MANNER.
OUR MISSION
Caring for Earth fertility
for prosperous lives
OUR VISION
Global presence
Organic growth and development
Healthy lifestyles and occupational
health and safety
Care for the environment
Social responsibility
Innovation and digital transformation
12
13
OUR VALUES
Leadership
Our goals are ambitious as we strive
for professional excellence and continuous
self-improvement
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
Reliability
We always honour our obligations
and are a reliable partner
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
Ethics
We support human integrity, fostering
moral standards and ethics, spiritual values,
dedication at work, and respect for family
values
2023Integrated Report APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY 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, the targets
of our eleven priority UN SDGs.
The Company is among the most
highly-engaged participants
of the world’s largest corporate
sustainability initiative. The UN
first named PhosAgro a Global
Compact LEAD company in 2019.
Target 2.4
Targets 3.4 and 3.9
Target 4.4
Our key programmes
Increasing sales
•
efficiency;
Improvement
of the product mix;
•
• Programme
to develop digital
services for farmers.
For more information, see
page 54, 98, 112
For more information on SDGs, see
the Commitment to UN Goals section
of the Company’s website
National project
• Demography: Sports
as a Way of Life
federal project.
Our key programmes
• Safety culture
improvement
programme;
• Minimising pollutant
emissions per unit
of output;
• Social benefits and
employee guarantees;
• DROZD (Educated and
Healthy Children of
Russia).
For more information, see
page 144, 166, 184, 224
National projects
• Demography: Sports
as a Way of Life federal
initiative;
• Education: promoting
engineering professions;
• Culture: establishing
cultural and educational
museum facilities.
Our key programmes
• School–college/
university–facility
educational model;
• Cooperation
with universities
and Russian and
international R&D
centres;
• Promotion of retraining
and professional
development;
• Improving safety
competencies.
For more information, see
page 112, 144, 166, 224
Target 12.4
Our key programmes
• Programme to promote circular economy elements, including
the use of phosphogypsum in farming and other industries;
Improvement of production processes;
•
• Green procurement programme and ESG assessment of suppliers;
Initiatives to boost water use efficiency as part of the Company’s
•
Water Strategy.
For more information, see page 54-59, 112, 130, 184
Targets 13.1 and 13.2
Our key programmes
• Energy Efficiency Programme;
• Delivering on the Climate Agenda project;
• Green procurement programme and ESG
assessment of suppliers;
• Application improvement.
For more information, see page 58, 112, 130, 184
14
1515
BUSINESS
MODEL
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-friendliness
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 page 50
Targets 6.1 and 6.3
Our key programmes
•
Initiatives to boost
water use
efficiency as part
of the Company’s
Water Strategy;
• Participation
in international
initiatives (CEO Water
Mandate and Water
Resilience Coalition).
For more information, see
page 184
Targets 8.3, 8.5 and
8.8
Our key programmes
• Comprehensive
production
development
programme;
Incentives and
rewards system;
• Our Favourite Cities
•
programme;
• Green procurement
programme and
ESG assessment
of suppliers.
For more information, see
page 64, 130, 144, 166, 244
Target 9.1
Target 11.3
Our key programmes
• Logistics
infrastructure
development
programme;
• Our Favourite Cities
programme;
• Process Mining
development.
For more information, see
page 57, 130, 224
National project
• Housing and Urban Environment:
Creating a Comfortable Urban
Environment federal project.
Our key programmes
• Our Favourite Cities programme;
• Promotion of entrepreneurship.
For more information, see page 222
Target 15.1
Our key programmes
• Comprehensive programmes to assess and preserve biodiversity
Targets 17.16 and 17.17
National project
• Housing and Urban Environment:
Creating a Comfortable Urban
Environment federal project.
Our key programmes
• Cooperation with universities and
Russian and international R&D
centres;
• Collaboration with UN organisations
at the Cherepovets site and the Volkhov and Kirovsk branches of Apatit;
• Partnership with UN FAO in advancing sustainable farming;
• Carbon farm project in the Vologda region run jointly with the Russian Academy
(FAO, UNESCO, UN Global
Compact);
• Joining efforts with
of Sciences to arrange, among other things, for the regional monitoring
of GHG emissions.
For more information, see page 54, 112, 184
the governments and municipal
authorities in the Russian regions
in which the Company operates.
For more information, see page 98, 112, 224
Making a positive impact
Minimising the negative impact
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE
I
S
E
C
D
N
E
P
P
A
L
A
T
I
P
A
C
E
R
A
H
S
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A
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S
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M
O
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We use
Value creation cycle
GRI 2-6
Market and technology
insights
Management,
production and sales
competencies
Energy and water
Mineral resources
and materials
Target 2.4
Partner, supplier
and customer
relationships
Public and private
infrastructure
For more information, see
page 110
Finances
The value creation cycle at PhosAgro Group starts with a thorough
analysis of consumer preferences and market trends. Drawing
upon analytical insights and the latest research findings, our
R&D centres in Cherepovets and Moscow develop highly effective
and eco-friendly fertilizer brands that enjoy steady demand from
consumers.
RUB
2,481.3
mln
investments in R&D
activities and development
of new products
Wide product range
58
agrochemical brands,
including all types
of fertilizers and animal
feed
Our mining division in the Murmansk region extracts unique
high-quality and eco-friendly apatite-nepheline ore for further
production of phosphate fertilizers.
Target 12.4
Unique resource base in terms of size and quality
For more information, see
page 90
Reserves-to-production ratio (RPR) of
60 years
(including off-balance reserves)
Our Cherepovets, Volkhov, and Balakovo facilities produce
our entire range of phosphate and nitrogen-based fertilizers
as well as complex ones. With a strong vertical integration,
we ensure maximum economic efficiency of production while
maintaining full control over product quality.
Self-sufficiency in feedstock
100%
Apatite concentrate
75%
Ammonia
92%
Sulphuric acid
46%
Ammonium sulphate
Targets
3.9, 6.3, 8.3, 12.4 and 15.1
For more information, see
page 63, 90
16
17
17
17
We secure
We use a service model where customers receive a combination
of a fertilizer and our agronomic expertise, all available in a digital
environment. Our industry-leading agronomic service provides
training, agronomic advice, and support to our customers.
Customer feedback serves as a valuable source of information
for improving existing products and developing new ones.
Sustainable soil
fertility
Sustainably
high returns
on investment
Consistent
tax payments
and local
community
development
Well-paid jobs
and social
benefits
New research
and technological
innovations
Large-scale
purchases
of local
products
and services
Basis for making
safe food
products
Contribution
to international
programmes
addressing
global
challenges
Educational
initiatives
and upskilling
opportunities
Targets
13.1, 13.2, 17.16 and 17.17
For more information, see
page 54, 96
Results of
Ca.
> 500
agronomic
trials published
on the Company's
website
50 thousand ha
of soils surveyed
by agronomic experts
in 20 regions
PhosAgro Group’s sales network is the largest in the Russian
agrochemical industry. We have a presence in all key agricultural
regions across the country and are committed to becoming even
closer to our consumers. The digitisation of our sales platforms and
customer services is rapidly advancing.
Targets 2.4 and 12.4
34 distribution
centres in Russian regions
For more information, see
page 18, 96
> 10 mln regular users
of PhosAgro's digital ecosystem
+80% y-o-y
>65 thousand
AgroResult
mobile app downloads
Thanks to our high-capacity railway infrastructure, extensive own
fleet of railcars, and modern port terminals, our transportation and
logistics services ensure reliable supplies of PhosAgro Group's
products to our customers in Russia and worldwide.
Target 9.1
Supplies to
74 regions
in Russia
Port transshipment capacity
of
8 mtpa
For more information, see
page 18, 57
3
2
0
2
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I
Mineral extractionFertilizer productionFertilizer application and serviceMarketing and salesTransportation and logisticsProcess and product development
GEOGRAPHICAL
FOOTPRINT
GRI 2-1, 2-6
PHOSAGRO GROUP’S MINERAL FERTILIZERS AND
FEED PHOSPHATES ARE IN DEMAND BY FARMERS
IN RUSSIA AND APPROXIMATELY 100 COUNTRIES
WORLDWIDE, THANKS TO THEIR EXCEPTIONAL ECO-
FRIENDLY PROPERTIES AND OUR EFFICIENT LOGISTICS
Kirovsk
Volkhov
Cherepovets
Moscow
Balakovo
74regions of operation
22 regional offices
34 distribution centres
PRODUCT AND SERVICE DEVELOPMENT
MINERAL EXTRACTION
FERTILIZER PRODUCTION
The Kirovsk branch of Apatit produces
high-grade phosphate rock and nepheline
concentrate.
The Cherepovets site of Apatit produces phosphate fertilizers,
phosphoric and sulphuric acids, as well as NPK, ammonia, and
ammonium nitrate.
Ore mining
39.2 mt
KIROVSK BRANCH
OF APATIT
The Balakovo branch of Apatit produces phosphate fertilizers and feed
phosphates.
The Volkhov branch of Apatit produces mineral fertilizers and sodium
tripolyphosphate.
Apatite
concentrate
CHEREPOVETS SITE
(APATIT)
PhosAgro Group runs the Samoilov Scientific Research Institute
for Fertilizers and Insectofungicides (NIUIF). We also operate our
Moscow-based Innovations Centre that develops advanced plant
nutrition systems in cooperation with leading R&D centres.
Apatite
concentrate
Nepheline
concentrate
18
19
BALAKOVO
BRANCH OF APATIT
Apatite concentrate
Apatite concentrate
VOLKHOV BRANCH
OF APATIT
Nepheline concentrate
Apatite concentrate
Murmansk
Kotka
Ust-Luga
St Petersburg
FERTILIZER APPLICATION
AND SERVICE
Our high-quality service
for farmers, including agronomic
advice, coupled with the unique
properties of our fertilizers,
ensure the strong performance
of our products.
Novorossiysk
Tuapse
For more information on our
geographical footprint, visit
the Company’s website
TRANSPORTATION AND
LOGISTICS
With its railway infrastructure, an in-house
fleet of railcars, and a ca. 8 mtpa port
transshipment capacity across key export
routes, the Company can ensure reliable
and timely product supplies to customers
both in Russia and abroad.
MARKETING AND SALES
PhosAgro Group’s network of sales offices
covers the majority of key regions in Russia
and the CIS, making its quality products
available to farmers in the local priority
market and across the globe.
Total
14 mt
7.6 mt
1.6
6.0
Domestic market
Exports
2.5 mt
0.9
1.6
Domestic market
Exports
1.1 mt
0.1
1.0
Domestic market
Exports
7.7 mt of agrochemicals,
including: nitrogen fertilizers .................. 2.4 mt
phosphate fertilizers ...............5.2 mt
other products ......................... 0.1 mt
2.5 mt of agrochemicals,
including: phosphate fertilizers ............... 1.9 mt
feed-grade MCP ..................... 0.4 mt
nitrogen fertilizers .................. 0.2 mt
other products ......................... 0.1 mt
1.1 mt of agrochemicals,
including: nitrogen fertilizers ................... 1.0 mt
STPP ...................................... 0.06 mt
other products ...................... 0.04 mt
2.8 mt
INVESTMENT CASE
AND CREDIT RATINGS
1/
A GLOBAL PRODUCER OF HIGH-QUALITY PHOSPHATE
FERTILIZERS
CUSTOMER FOCUS
A netback-driven sales model
with a global presence.
OUR PRODUCTS
meet both national and
international quality standards
and are supplied to farmers
in approximately 100 countries.
PHOSAGRO IS EUROPE’S LARGEST
PRODUCER OF PHOSPHATE
FERTILIZERS1 AND A TOP 5
GLOBAL PRODUCER OF DAP/MAP2
BY CAPACITY.
CERTIFICATION
for compliance with key
international standards
testifies to the highest
quality of our products
and management efficiency
throughout their life cycle.
OUR PRODUCTION TECHNOLOGIES
meet the highest global
standards.
20
21
1 By total production capacity for DAP/MAP/NP/NPK/NPS.
2 Monoammonium phosphate / diammonium phosphate.
2023Integrated Report APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE 2/
UNIQUE RESOURCE BASE AND SECTOR-LEADING MARGINS
No.
No. 1 producer of high-
quality phosphate rock
(P2O5 content at 39% and
above) globally.
No. 1 by mineral fertilizer
output in Russia and
total supplies of all types
of mineral fertilizers
to the domestic market.
UNIQUE MINERAL RESOURCE
BASE
The mine life, including off-balance
reserves, 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.
PhosAgro Group's position on global DAP
production cost curve, production, kt
Source: CRU Industry Cost Curves 2023.
10,000
20,000
30,000
PhosAgro Group's position on global urea production cost curve, production, kt
Source: CRU Industry Cost Curves 2023.
20,000
60,000
100,000
140,000
180,000
Share of PhosAgro Group’s supplies in the key sales markets (share
of compound and complex fertilizers in the region’s total imports),
estimates, %
‘23
WIDE RANGE OF READY-TO-USE
SOLUTIONS FOR FARMERS.
‘23
‘22
‘22
54
17
19
13
18
20
45
24
12
15
38
12
Russia (share of total supplies)
Europe
Latin America, excl. Brazil
Africa
India
Brazil
22
23
Russia (share of total supplies)
Europe
Latin America, excl. Brazil
Africa
India
Brazil
54
17
19
13
18
20
45
24
12
15
38
12
No. 1 in terms of urea
and mineral fertilizer
capacity concentrated
at one production facility
(Apatit, Cherepovets)
in Europe.
One of the highest margins
in the phosphate segment.
The only Russian and one
of the leading European
producers of feed-grade
MCP and liquid complex
fertilizers.
2023Integrated Report APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE 3/
ECO-FRIENDLY
FERTILIZERS
4/
SOUND CAPITAL ALLOCATION IN HIGHLY EFFECTIVE INVESTMENT
PROJECTS
Investment projects may get a go-ahead subject to their high IRR2 (in most
cases 20%+), compliance with the BAT and sustainability criteria along with
the CAPEX/EBITDA target, and a comfortable net debt / EBITDA covenant
headroom.
PhosAgro was the first Russian
company to be certified
to GOST R 58658–2019,
a national standard for products
with improved characteristics
which introduced the world’s
most rigorous limits on heavy
metals and arsenic content.
This allows PhosAgro to mark
its products with a special Green
One.label.
The Company also successfully
completed voluntary
Vitality Leaf .certification.
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.
Additionally, PhosAgro made
a Green Label environmental
claim asserting that the product
is free from dangerous cadmium
concentrations harmful to human
health and soils.
Breakdown of CAPEX, RUB bln
Investment projects
Maintenance
Capitalised repairs
Non-industrial construction
The Group’s product packaging
also has a pictogram from
the EU regulations, which
is used to inform consumers
of safe fertilizers in terms
of heavy metals content
with cadmium content not
exceeding 20 mg/kg P2O5.
In 2023, the compliance
of our products with
the labelling requirements
was confirmed through
relevant audits, and
the range of certified
products was expanded.
The Group’s Cherepovets,
Volkhov, and Balakovo
production sites and phosphate
rock mining and beneficiation
facility in Kirovsk successfully
passed a certification audit
by the Brazilian Association
of Technical Standards (ABNT1).
63.0
2.2
9.8
27.0
64.2
3.3
10.9
31.3
24.1
18.8
73.0
2.7
12.5
32.4
25.4
1 Associação Brasileira de Normas Técnicas.
2
Internal Rate of Return.
24
25
‘22 (actual)
‘23 (actual)
‘24 (plan)
2023Integrated Report APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE 5/
WELL-BALANCED CORPORATE
GOVERNANCE
Our corporate governance
practices undergo an annual
evaluation and demonstrate
a high level of compliance
with the recommendations
of the Corporate Governance Code.
PhosAgro actively engages with
Russian rating agencies to secure
independent assessments, credit
ratings, and ESG ratings.
Throughout 2022 and 2023,
the Company continued to service
its bank loans in a timely manner
and took a number of steps
to continue servicing Eurobonds
in the new regulatory environment.
Thus, the Company once again
confirmed its high credit quality.
Stable credit ratings
The Company's bonds
are included in Level 1 quotation
list of the Moscow Exchange.
These were assigned credit
ratings of ruААА and ААА(RU)
respectively from the Expert RA
and ACRA agencies.
STAKEHOLDER
ENGAGEMENT
50%
5 independent
directors on the Board
of Directors
3 Board
committees meeting
on a regular basis
87%
adherence
to the Corporate
Governance Code
principles
Consistently strong positions in ESG ratings and indices
ESG rating/index
2021
2022
(С to ААА scale)
Responsibility and Transparency index
(С to А scale)
Sustainable Development Vector index
(С to А scale)
Corporate transparency rating
(B to А+ scale)
Expert RA
ESG transparency
(0.00 to 2.00 scale)
А
A↑
A↑
А
А
A
A
А+↑
1.90
1.95↑
2023
AA↑
A
A
А+
1.95
National Rating Agency
(Group 5 to Group 1 scale with scores from 0 to 1)
Group 2,
0.74
Group 2,
0.74
Group 1,
0.83↑
AK&M
(RESG 6 to RESG 1 scale with scores from 0 to 106.6)
RESG 1 (84.8)
RESG 1 (83.2)
RESG 1 (99.6)
Donors Forum
Russian Leaders in Corporate Philanthropy
(C to А+ scale)
RBC
(Level 3 to Level 1 scale)
n/a
А+↑
А+
n/a
Level 1
Level 1
26
27
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. Ensuring
maximum transparency of our operations, including
through full, high quality, and timely reporting,
is a prerequisite for achieving this goal.
In February 2023, PhosAgro received
the Interfax and AK&M information agencies’
award for its advanced practice of information
disclosure in the stock market. We highly value
the acknowledgement from the expert community
and remain dedicated to upholding best ESG
practices and the highest standards of corporate
reporting going forward.
Alexander Sharabaika
Chairman of the Strategy and Sustainable
Development Committee of the Board of Directors
2023Integrated Report APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE APPROACH TO STAKEHOLDER ENGAGEMENT; IDENTIFYING
AND SELECTING STAKEHOLDERS
GRI 3-1, 2-29, SASB EM-MM-210a.3
PhosAgro’s framework for stakeholder
engagement management covers
all tiers of corporate governance.
Our stakeholders include persons
or organisations that, in line with
the double materiality principle, may
be affected by our activities or can
influence our operations and business
decisions. Furthermore, we seek
to build partner relationships with
government agencies in all countries
where we operate and ensure that
we strictly comply with all applicable
regulatory requirements.
Generated and distributed direct economic value1, RUB mln
GRI 201-1
Item
Stakeholder
2021
2022
2023
Direct economic value generated
422,459
573,966
444,682
Revenue from sales
Revenue from other sales
Revenue from financial
investments
Economic value distributed
Operating expenses, including:
• wages and other payments
to employees
• social expenses
Payments to providers of capital
• declared dividends
•
interest expense
Wide range of stakeholders
Suppliers and contractors
Employees and trade unions
Wide range of stakeholders
Investment and finance community
404,849
551,037
421,690
15,639
18,490
1,971
4,439
18,614
4,378
(363,715)
(520,253)
(478,495)
(250,101)
(320,792)
(291,455)
(32,781)
(51,567)
(47,425)
(3,378)
(9,314)
(7,720)
(76,595)
(146,669)
(139,733)
(72,260)
(142,111)
(132,221)
(4,335)
(4,558)
(7,512)
Tax expenses and other payments to government:
(37,019)
(52,792)
(47,307)
•
including income tax expense
Regional and local governments, and
local communities
(31,073)
(41,465)
(34,527)
Retained/(redistributed) economic value2
58,744
53,713
(33,813)
1 Calculated on accrual basis using data from the Group’s IFRS consolidated financial statements.
2 Economic value retained for 2023 was negative since the Company distributed to its shareholders both profits for the reporting year and a
portion of profits retained from the previous years.
28
29
Suppliers and contractors
Employees and trade unions
Consumers
For more information, see
page 128
For more information, see
page 142
For more information, see
page 96
Investment and finance
community, including investors,
shareholders, and rating
agencies
For more information, see
page 312
OUR KEY
STAKEHOLDERS
Regional and local
governments, and local
communities
For more information, see
page 222
Business and industry
associations
International organisations
Scientific and educational
institutions
For more information, see
page 123
For more information, see
page 123
For more information, see
page 123
Feedback
You can send your comments and proposals regarding corporate
reporting to esg@phosagro.ru or ir@phosagro.ru.
Feedback from shareholders and other stakeholders helps
PhosAgro improve reporting transparency and quality.
2023Integrated Report APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE MATERIAL
TOPICS
GRI 2-14, 2-29, 3-1, 3-2
PhosAgro looked into the topics outlined in each
GRI Topic Standard and identified a list of 22 topics
that hold most importance for its key stakeholders
and the Company itself. This selection was made
taking into account the position of the investment
and finance community, including rating agencies,
as well as feedback from key stakeholders, along
with comments received during the professional
and public assurance of the 2022 non-financial
reporting. These topics were included in this Report
for disclosure.
For more information, see the Additional Information
section on page 316
In 2023, the number of disclosed material topics (22)
and GRI indicators remained unchanged compared
to 2022.
For more information on our approach to identifying material topics
and their impact on the value chain, see the Additional Information
section on page 364
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2023Integrated Report APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE
STAGEGIC
REPORT
IN 2023, WE CONTINUED TO EFFECTIVELY DELIVER
OUR STRATEGY TO 2025, RESPONDING FLEXIBLY TO
NEW CHALLENGES AND SEIZING OPPORTUNITIES.
WE KEEP FOCUSING ON THE DEVELOPMENT
OF NEW PLANT NUTRITION SYSTEMS THAT WILL
SHAPE THE AGRICULTURE OF THE FUTURE
For more information, see page 32
Chairman's
statement
34
CEO’s
statement
37
Business environment
42
Market
overview
47
Strategy
50
Strategic
risks
68
32
33
In 2023, PhosAgro accounted for
33%
of the total mineral fertilizers supplied from
Russia to African countries
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE CHAIRMAN'S
STATEMENT
IN 2023, PHOSAGRO STAYED TRUE TO THE
PRIORITIES SET OUT IN ITS LONG-TERM
DEVELOPMENT STRATEGY. WITH AN ONGOING
FOCUS ON PRODUCTION EXPANSION AND
SUBSTANTIAL CAPITAL INVESTMENTS, THE
COMPANY CONTINUED TO DELIVER DYNAMIC
GROWTH, CONSISTENT IMPROVEMENTS IN
PRODUCTION EFFICIENCY, AND STRONG
OPERATING RESULTS, ALL WHILE MAINTAINING
A STEADFAST COMMITMENT TO SUSTAINABILITY
AND CORPORATE SOCIAL RESPONSIBILITY.
How is the Company
performing in the
area of corporate
governance?
As the Chairman of the Board of Directors, I assume
full responsibility for the quality and effectiveness
of our corporate governance system. I firmly believe
that all members of the Board of Directors share
my dedication to acting in the best interest of the
Company’s wide range of stakeholders and making
well-informed, balanced decisions.
We are consistently improving our practices
and aim to strengthen the composition of the
Board of Directors. With the inclusion of Vladimir
Trukhachev in 2023, the Board saw an increase in
the count of independent directors to five out of
ten members. We are committed to maintaining the
Company's utmost openness and transparency,
aiming to 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.
I am confident that the current Board of Directors
consists of highly skilled professionals from diverse
backgrounds, whose contributions considerably
enhance the quality of strategic planning and our
focus on sustainable growth requirements.
My opinion is also supported by external experts.
In 2023, PhosAgro ranked first in the ESG rating
of 160 companies compiled by RAEX, the largest
independent agency specialising in non-credit
ratings. We were awarded the highest rating (AA)
among the rated companies. Additionally, we
attained the top position in sub-rankings for the
effectiveness of our social policy and the quality of
corporate governance, earning us the highest score
possible.
PhosAgro has a
history of setting
industry records.
What milestones has
the Company reached
in the reporting year?
Our performance in 2023 has yet again given
us ample reasons to be proud. We raised our
agrochemical output to an all-time high of
11.3 mt, an increase of 2% from 2022. For DAP/
MAP, production rose by 8.4% to over 4.5 mt,
for ammonium nitrate by 4.4%, for urea by
1.6%, and for phosphoric and sulphuric acids
by 4.6% and 2.5% respectively. Our record of
solid performance over the years attests to the
effectiveness of the chosen path of organic
growth as our preferred development strategy.
PhosAgro persistently upgrades its production
using the best available techniques, enhances
its vertical integration, and maintains a focus on
sustainable development. All this enables us to
remain the largest supplier of all types of fertilizers
to Russian farmers and to strengthen our standing
in the global market.
In 2023, the Company celebrated several more
key accomplishments. We reached a milestone
of 900 mt in apatite-nepheline ore supplies
from the Kirovsky mine of Apatit’s Kirovsk
branch. At the Cherepovets facility of Apatit,
our output hit a mark of 100 mt of phosphate-
based mineral fertilizers and 1 mt of ammonium
sulphate. Production of phosphoric acid across
PhosAgro’s sites surpassed 3.3 mtpa for the first
time ever. These are all important landmarks in
PhosAgro's journey.
Our production achievements have laid a solid
foundation for robust financial results. Revenue
went above RUB 440 bln, EBITDA reached
RUB 183 bln, and adjusted net profit came in
at RUB 104 bln. We also delivered impressive
profitability, with a 41.6% EBITDA margin in 2023.
34
35
Now that we have
discussed the
G component of
your ESG practices,
what are the
achievements in the E
and S domains?
Every year, PhosAgro forges ahead with its
investment programme, which yields positive
results and ensures steady growth in both
production and financial metrics. This enables
us to maintain a decent level of employee
remuneration and fulfil all our social obligations.
In 2023, payments of taxes and duties to budgets
at all levels reached a record high of RUB 69 bln.
We are actively expanding our social and charity
projects, with total support increasing seven-
fold over the past decade and exceeding
RUB 25 bln in 2022–2023.
PhosAgro employs over 23,000 people, and
I deeply appreciate their contribution to both
the Company's development and national food
security. Our employees are our most valuable
asset, so we strive to create a comfortable
and safe working environment while offering
competitive and fair remuneration. Over the past
three years, the average monthly pay at PhosAgro
increased by 60%, and in February 2024, we
raised salaries by an additional 15%. In 2023,
new collective bargaining agreements were
signed by all of the Group’s production facilities
as we increased the size of social benefits and
allowances for our teams in Volkhov, Cherepovets,
Kirovsk, and Balakovo. This is a landmark event
both for the mineral fertilizer industry and the
Russian chemical sector at large. In addition, a
new apartment block for PhosAgro employees
was successfully commissioned in Volkhov
during the year. To date, our corporate housing
programme has improved the living conditions of
nearly 3,000 families.
Our consistent long-term efforts have won us
accolades from external experts as in 2023
PhosAgro was named among the best employers
by Forbes and RBC.
It is important to remember that PhosAgro’s
responsibilities extend beyond its direct
employees to a much wider range of stakeholders.
To that end, in 2023 we went ahead with our
Mine to Plate educational programme designed to
train personnel for the agricultural industry. The
programme already covers 47 universities, with
students benefitting from an impressive portfolio
of more than 370 digital video lectures. A total of
17 PhosAgro educational centres opened their
doors at Russia’s leading agricultural universities.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Last year, PhosAgro and the Russian Ministry
of Agriculture expanded their cooperation by
launching the Pro Agro Lectorium online platform.
We also implemented and launched a digital
educational platform for farmers from Africa.
In addition to promoting basic sciences, we
help train engineers at the schools and colleges
that we support. Last year, our school–college/
university–facility corporate educational
programme celebrated its tenth anniversary.
PhosAgro joined the UN Global Compact's
Forward Faster initiative calling for an accelerated
achievement of the UN Sustainable Development
Goals. As a participant in the Water Resilience
Coalition, a UN Global Compact platform,
PhosAgro will contribute to a faster achievement
of SDG 6 (Clean Water and Sanitation) covered
by the Forward Faster initiative, by advancing
sustainable water resource management.
It is worth mentioning that in 2023, our Company
received its third Grand Prix at the Russian
Business Leaders: Dynamics and Responsibility
Awards held by the Russian Union of Industrialists
and Entrepreneurs. This is a testament that our
achievements in corporate social responsibility
have been recognised by Russia’s leading
businesses and organisations.
We also solidified our standing as a company with
the best social and charitable programmes in the
Russian Leaders in Corporate Philanthropy 2023
competition. These long-standing awards for socially
responsible businesses are organised by the Donors
Forum and its partners, including the Ministry
of Economic Development, Accounts Chamber,
Presidential Grant Foundation, and Russian Union
of Industrialists and Entrepreneurs. In 2023, a total
of 43 companies enrolled in the competition, with
15 making it to the A+ Leaders category. PhosAgro
was the only mineral fertilizer producer to do so.
What are you
expectations
for PhosAgro
in 2024?
I can confidently say that we plan to maintain our
momentum. In 2024, we will be increasing our
CAPEX further, investing a record of RUB 73 bln
in business development (including capitalised
repairs). As a result, we expect our agrochemical
output to continue growing. This will make an
important contribution to strengthening Russia’s
food security for years to come.
I am convinced that in 2024, we will continue
to make steady progress towards our strategic
objectives, propelled by our professional
team and a sustainable and flexible business
model that drivers continuous improvements in
efficiency and profitability. With these strengths,
we are well-positioned to achieve our goals and
solidify our market presence.
I appreciate your trust in our business, and we
look forward to reaching new heights together.
Victor Cherepov,
Chairman of the Board of Directors
of PJSC PhosAgro
36
37
CEO’S
STATEMENT
IN 2023, DESPITE THE CONTINUED EXTERNAL TURBULENCE,
PHOSAGRO ONCE AGAIN DEMONSTRATED RESILIENCE IN
THE FACE OF CHALLENGES AND THE ABILITY TO SET NEW
OPERATING AND FINANCIAL RECORDS. THIS WAS MADE
POSSIBLE THROUGH THE CONCERTED TEAMWORK OF OUR
SKILLED PROFESSIONALS, OUR FLEXIBLE BUSINESS MODEL,
AND A WELL-THOUGHT-OUT COMPREHENSIVE STRATEGY.
During the year, we went ahead with our development plans, upgraded
and constructed production facilities, tapped into new markets, and
unveiled new products. In all our endeavours, we remained committed
to supplying the Russian market, which is our unchanging priority, as
well as some 100 countries globally with high-quality, efficient, and
eco-friendly mineral fertilizers.
2023 was a year of
transformation for
many companies as
they continued to
revamp operational
processes and
reconsider business
models. What was
the year like for
PhosAgro?
In 2023, we once again saw very clearly that our
business model and development strategy are
the right choice and fit. With them, we can stay
an effective and robust business even in turbulent
macro environments and without compromising
our resilience. The year 2023 marked another
set of accomplishments and achievements for
PhosAgro. We were able to ramp up fertilizer
output levels and increase our self-sufficiency in
key types of feedstock.
In 2023, PhosAgro hit yet another record in
agrochemical output, taking it to 11.3 mt. For MAP,
there was a 12.9% increase, driven among other
things by the new production facility in Volkhov,
which was built as part of the Company’s long-
term development programme. The upward
trajectory in the output of phosphate fertilizers
was underpinned by higher volumes of phosphoric
and sulphuric acids that we produced, as well
as consistently high levels of ammonia output.
In particular, production of sulphuric acid added
2.5% to exceed 8.1 mt. This was fuelled by greater
efficiency of the sulphuric acid production unit in
Cherepovets and the launch of a new sulphuric
acid facility in Balakovo in late 2023.
We also enhanced our leadership standing in
terms of total supplies of all types of mineral
fertilizers to our priority market of Russia.
During the year, domestic supplies surged
by 12.0% and reached 3.3 mt.
The stabilisation of global fertilizer prices after they
spiked to all-time highs in 2022 was the key driver
of our financial performance in 2023. For the full
year, we posted revenue in excess of RUB 440 bln,
EBITDA of over RUB 183 bln, and adjusted net
profit of more than RUB 104 bln. Thanks to the
well-coordinated efforts of the management,
we were able to effectively control production
costs while achieving growth in sales of high-
margin products. As a result, we delivered a
strong EBITDA margin of 41.6%. Despite a certain
reduction in our free cash flow from the record
high of 2022, the 2023 level of RUB 70.2 bln
is still one of our best results over the past
decade. We also completed the year with a
comfortable level of net debt (RUB 223.2 bln)
and a net debt/ EBITDA ratio of 1.2x.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report How is PhosAgro
doing in terms of
progress against
its investment
programme?
2023 marked the completion of a ten-year
investment cycle. Over this period, we have
invested over RUB 390 bln in developing our
business. The output of core products has
expanded by over 80%, from 6.1 mt in 2013 to
11.3 mt in 2023. Last year, the Company made
a record investment of more than RUB 64 bln
(including capitalised repairs). In 2024, the plan
is to reach a level of RUB 73 bln.
Efforts to create new and upgrade existing
production capacities across the Group’s sites
progress smoothly in line with our Strategy to
2025. One of the key achievements has been
the successful completion of an investment
project in Volkhov to build a mineral fertilizer
plant with a capacity of more than 1 mt. With
total investments of RUB 34 bln, it will be the
industry’s trailblazer in innovations for years to
come. Thanks to the plant’s complete overhaul
and new construction, the annual output of
mineral fertilizers and other chemical products
will be in excess of 1 mt.
In Cherepovets, in addition to upgrading
ammonia and phosphoric and sulphuric
acid production capacities, we are running
a project to ramp up the processing of
phosphate rock and to build a conveyor belt for
phosphogypsum. In Balakovo, phase 3 of our
production site saw the completion of projects
to ramp up output of feed phosphates and
sulphuric acid.
PhosAgro is a vertically integrated company,
and we take active steps to develop our raw
material base. In 2023, we came close to
finalising a project for the construction of a new
+10 m level at the Kirovsky mine. In Q4 2023,
the level’s second start-up facility was
launched.
PhosAgro’s accomplishments in financial,
investment, and social responsibility domains
have garnered strong recognition from both
Russian and international business and
investment communities. In 2023, the Company
ranked among Russia’s top 10 companies in
terms of net profit according to Forbes and
among the top 10 Russian companies included
on the list of the 500 largest companies
in Europe by revenue as assessed by the
renowned Fortune magazine.
How has the
Company’s product
portfolio been
evolving?
In 2023, we expanded our portfolio to include
58 fertilizer grades, with plans to increase this
number to 100 by 2030. This expansion will
include innovative products such as biologised
fertilizers, fertilizers with a prolonged effect,
plant growth enhancers, and new ameliorants.
natural immunity, and help unlock biological
potential even under severe stress conditions.
Additionally, we expanded our portfolio of
products for animal farming, placing on the
market a new phosphogypsum-based product
used as bedding in farms and poultry houses.
In 2023, in collaboration with Mendeleyev
University of Chemical Technology, PhosAgro
embarked on the development of a new line of
biologised mineral fertilizers. We also started
the production of water soluble MAP at our
Volkhov facility. This is an eco-friendly product
that can be effectively applied on all major
crops without requiring special equipment. In
February 2023, the Company completed the
shipment of the first batch of ApaSil, a new
product made by Apatit’s Cherepovets site.
ApaSil serves to boost plant growth, induce its
Together with Innopraktika, PhosAgro is
implementing a project titled Innagro designed
to create seven innovative products. Three of
them have successfully passed all tests and
are now in production. AgroGard, a leading
Russian agricultural holding company, and
other partners are already making active
use of innovative biofungicide Metabacterin,
Enzymesporin probiotic, and Fermasil biological
preservative, all with exceptionally positive
feedback.
How did the
geography of the
Company’s sales
change in 2023?
Our primary and unwavering focus remains
the supply of mineral fertilizers to the crucial
Russian market, where we aim to maintain and
strengthen our leading position.
Despite the constant volatility of the international
market, PhosAgro has been able to hold its
ground over the recent years, demonstrating
unprecedented flexibility and adaptability. We
have continued to increase supplies, primarily
to emerging markets, with friendly countries
accounting for almost as much as 75% of total
exports (compared to 70% in 2022).
In 2023, Latin America became one of our priority
export markets, as supplies surged 1.5-fold to 3.2 mt.
PhosAgro has maintained its position as Russia’s
leading fertilizer exporter to African countries,
ramping up deliveries to the continent to over 550 kt.
The Company accounts for 33% of all Russian
fertilizer supplies to Africa, where our eco-friendly
products, free from dangerous concentrations of
cadmium and other toxic substances capable of
harming the health of people and soils, are made
available to more than 20 countries. We also have
ambitious plans for the future, aiming to double our
supplies to Africa in the next three years.
38
39
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report How successful has
PhosAgro been in
the capital market?
In 2023, the Company made its debut offering
of RUB-denominated exchange-traded bonds
for RUB 20 bln on the Moscow Exchange. These
were assigned credit ratings of ruААА (EXP)
and eААА(RU) respectively from the Expert RA
and ACRA agencies. With more than two-fold
oversubscription for the bonds, the Company was
able to revise its coupon rate guidance downwards
three times, achieving the minimum spread to the
yield of Russian federal bonds among corporate
issuers: 89 bps. The coupon yield was 9.4% p.a.,
payable semi-annually.
Also in 2023, PhosAgro made its debut offering
of CNY 2 bln exchange-traded bonds on the
Moscow Exchange. The variable coupon is linked
to the China Loan Prime Rate (LPR 1Y) + 1.2%,
and we were able to achieve a reduction from the
initial level of 1.3% on the back of strong investor
demand.
In August 2023, we were the first Russian issuer to
offer replacement bonds worth USD 740 mln.
One of the major developments related to our debt
management was the successful redemption of
the USD 500 mln Eurobond issue in late April 2023.
We had the issue refinanced, among other things
using part of the proceeds from the two exchange-
traded bond issues (for CNY 2 bln and RUB 20 bln)
that we previously offered on the Moscow
Exchange.
These deals enabled PhosAgro to secure available
market financing under the best conditions to go
ahead with its development programmes and loan
portfolio refinancing. PhosAgro acts in the interests
of its existing and potential investors, honours all its
obligations in full, and continues its active efforts in
this domain.
What are your
forecasts for 2024?
At the same time, as PhosAgro continues to
grow, safety and environmental protection will
remain our top priorities.
I would like to express my gratitude to all
PhosAgro employees for their dedication and
great performance in achieving our strategic
goals. I also extend my thanks to our broad
range of stakeholders, including investors,
shareholders, customers, contractors, and
suppliers. Our 2023 results clearly demonstrate
that together we have chosen the right path to
pursue, with our team's efforts paving the way for
the Company's unprecedented achievements.
In 2024, we will carry on our with our objectives
as outlined in the Strategy to 2025. We have
a record CAPEX of RUB 73 bln1 planned for
the upcoming year. Our focus remains on the
development of our raw material base, with
plans to start underground mining within the
Gakman block of the Kirovsky mine’s Yukspor
deposit. In Cherepovets and Volkhov, we
aim to complete a project to increase the
processing of phosphate rock by a combined
total of nearly 400 kt. In Balakovo, phase 3 of
our production site development will continue,
involving a flexible MAP/DAP/NPS/NPK fertilizer
production scheme and delivering an increase
in total output. We also anticipate reaching the
target capacity for feed phosphate production,
increasing by 14% to 443 ktpa. Furthermore,
we plan to achieve the design capacity of the
upgraded SK-20 technological system. As a
result, the facility’s sulphuric acid production is
set to expand by 13% to 3 mtpa.
PhosAgro has
always placed
a significant
emphasis on the
ESG agenda. What
were the primary
accomplishments
here in 2023?
GRI 2-22
Our commitment to sustainability lies at
the core of our operations. All investment
projects and programmes, along with new
product lines, rely on the best available
techniques, keeping the welfare of society
and the environment in mind. The Company
continues to uphold all its social commitments,
preserving and expanding initiatives in the realm
of corporate social responsibility.
This year, I would like to highlight the social
dimension of sustainable development. Our
employees have always been our most valuable
asset. In August 2023, PhosAgro Group facilities
signed new collective bargaining agreements,
effective until 2026. We successfully expanded
the list of benefits and their financial value
while preserving and ramping up all widely used
healthcare and recreation programmes, as well
as our subsidised corporate housing programme.
Support for veterans’ organisations was also
bolstered, with all that done taking into account
the expectations and needs of our employees.
PhosAgro remains committed to raising the
level of employee remuneration: between 2021
and 2023, the average pay went up by 60%, and
at the start of 2024, we introduced an additional
increase of 15%. With our social and financial
support programmes, we work to improve the
well-being of the employees, which I believe
is a crucial incentive for further productivity
enhancements following its 2.6x increase over
the past decade.
We continued to develop our corporate system
for training engineering personnel and fostering
education and science in agriculture through
projects such as School–College/University–
Facility, From Mine to Plate, and Pro Agro
Lectorium. Last year marked the 20th anniversary
of PhosAgro’s key social initiative DROZD
(Educated and Healthy Children of Russia), which
has benefited over 150,000 students to date.
We are also advancing projects related to
soil fertility preservation on a global scale in
collaboration with the Food and Agriculture
Organisation of the United Nations, as well as
implementing green energy at our facilities.
In 2023, the Company joined the UN Global
Compact’s new initiative that calls for an
accelerated achievement of the UN Sustainable
Development Goals (SDGs). As part of that
commitment, we will be contributing to a
faster achievement of SDG 6 (Clean Water and
Sanitation) by advancing sustainable water
resource management. Finally, Tashkent hosted
the seventh round of the grant awards ceremony
for the best young scientists from all over
the world as part of Green Chemistry for Life,
a joint grant programme by PhosAgro, UNESCO
and IUPAC.
40
41
Mikhail Rybnikov,
Chief Executive Officer
of PJSC PhosAgro
1
Including capitalised repairs.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report BUSINESS
ENVIRONMENT
JANUARY
Russia introduced duties on fertilizer
exports
On 1 January 2023, Russia introduced
duties on all types of mineral fertilizers
until the end of 2023: if the customs
value of fertilizers exceeded USD 450/t,
the exporter was charged 23.5% of the
difference between the real price and
the set base amount.
On 1 September 2023, in response
to a decline in fertilizer prices, the
government adjusted the mechanism
by introducing a general rate for all
mineral fertilizers – 7% of the value.
The minimum rates were as follows:
RUB 1,100 per tonne for nitrogen-
based fertilizers, RUB 1,800 per tonne
for potash fertilizers, and RUB 2,100
per tonne for phosphate fertilizers.
Water-soluble phosphate fertilizers with
high production cost – diammonium
hydrogen phosphate and ammonium
dihydrogen phosphate – were exempted
from the measures, which will apply until
the end of 2024.
FEBRUARY
Heads of several international
organisations adopted a joint
statement on food security
Heads of the International
Monetary Fund, World Trade
Organisation, Food and
Agriculture Organisation (FAO),
World Bank Group, and World
Food Programme issued a joint
statement calling for continued
urgent action to address the
global crisis on food and nutrition
On 1 October 2023, changes came
into effect to introduce variable
fertilizer duties (7% and 10%)
depending on the US dollar exchange
rate, and to impose additional duties
on other products in the range of
4% to 7% depending on the US
dollar exchange rate. The previously
established minimum rates remained
unchanged. Phosphate-based
fertilizers with high production cost
- water-soluble MAP and DAP - were
exempted from the measures, which
will apply until the end of 2024.
EU’s new Common Agricultural Policy
(CAP)
On 1 January 2023, the new Common
Agricultural Policy of the EU came
into effect. That Policy will be key to
securing the future of agriculture and
forestry in member countries, as well
as achieving the objectives of the
European Green Deal.
security, including through improving
availability of food and fertilizers. The
statement specified four focus areas:
• to serve the most vulnerable
immediately;
• to facilitate trade and international
food supplies;
• to improve productivity;
• to invest in climate-resilient
agriculture.
42
43
MAY
By the end of May, fertilizer
producers sold more than 60%
of the entire forecast volume of
fertilizer procurement by Russian
farmers for 2023
The Russian agribusiness
increased its mineral fertilizer
procurement by 6% to 3.4 mt
compared to 2022, taking into
account accumulated stocks.
Thus, by mid-May, domestic
fertilizer producers secured more
than 60% of the sector's forecast
procurement volume for the entire
2023.
USA notified banks that the
export of Russian fertilizers was
permitted
The US Department of State said
that it regularly communicated
with US and foreign banks to
remind them that transactions
with Russian food and fertilizers
are exempt from sanctions.
The statement was made after
Russia had long insisted that
the prohibition on imposing
sanctions on Russian agricultural
commodities and fertilizers must
be respected.
JUNE
Russia extended domestic price
threshold for mineral fertilizers
The price threshold set for mineral
fertilizers was extended for the
entire year of 2023 and remained
at the 2022 level. First introduced
Russia extended export quotas for
mineral fertilizers
Russian Prime Minister Mikhail Mishustin
approved the extension of export
quotas for nitrogen-based and complex
fertilizers from 1 June to 30 November,
with their volume totalling 16.33 mt. The
quotas are aimed at keeping sufficient
volumes of fertilizers on the domestic
market.
Later on, in November 2023, the
government raised the total export
quota to more than 18.5 mt, thus
ensuring that producers would be
able to export the remaining finished
products, provided that domestic
demand was fully met.
In late November 2023, the government
resolved to extend the fertilizer export
quotas until 31 May 2024. The quota
totalled 16.9 mt, including around 9.8 mt
of nitrogen-based and 7.1 mt of complex
fertilizers.
in December 2021, the threshold was
intended to keep mineral fertilizers
affordable to Russian farmers. Later on,
this measure was prolonged until the
end of May 2024.
G7 adopted action statement for
resilient global food security
At the 49th G7 summit in Hiroshima,
Japan, the leaders of the member
countries adopted an action statement
for resilient global food security. The
announced measures included focus
on expanding fertilizer efficiency and
decisions aimed at supporting grain
exports from Russia and Ukraine.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report JULY
St Petersburg hosted the
Russia– Africa forum
At the forum, African countries and
Russia agreed to deepen their food
security cooperation.
AUGUST
Russia enacted a law on excess
profit tax for large companies
The Russian president signed a bill
establishing an excess profits tax for
large companies whose average profit
before tax for 2021–2022 exceeded
RUB 1 bln. The tax affected such
companies as PhosAgro, EuroChem,
and Rusagro.
SEPTEMBER
Food exports became one of the key
revenue items for Russia's budget
The head of Russia's Federal
Customs Service said that Russian
food exports are gradually becoming
the main source of income for the
national budget.
44
45
USA ramped up imports of Russian
fertilizers
According to the US statistical service,
in 1H 2023, the country increased
imports of Russian fertilizers to a
record USD 944 mln, making Russia
the country’s second-largest fertilizer
supplier. The cost of imports also grew
by 5%.
G20 leaders called for uninterrupted
grain and fertilizer exports from Russia
and Ukraine
Russia and China agreed to build
a grain hub on the border
At the summit in New Delhi, G20 leaders
adopted a joint declaration calling for the
full implementation of the grain deal and
unimpeded exports of food and fertilizers
from Russia and Ukraine.
During the Eastern Economic Forum,
Russia and China signed an agreement
to build a huge grain hub in the Jewish
Autonomous Region to supply Russian
grain to China.
OCTOBER
FAO and the International Atomic
Energy Agency (IAEA) made a joint
statement to support food security
To strengthen the strategic
partnership between FAO and IAEA,
the two organisations launched
Atoms4Food, a joint flagship
initiative on food security, which
seeks to provide member states of both
organisations with groundbreaking
solutions, tailored to their specific needs
and circumstances, by harnessing
the advantages of nuclear techniques
in agriculture.
NOVEMBER
Russian fertilizer producers covered
100% of agricultural demand for
2023 and started deliveries under
2024 orders
which is 18% higher than the sales
volume for the whole of 2022. PhosAgro
Group emerged as the leader in terms of
sales.
USA raised import duty on PhosAgro
phosphates
The US Department of Commerce raised
the countervailing duty on imports of
PhosAgro's phosphate fertilizers from
9.19% to 28.50%. Meanwhile, US farmers
consistently advocated for lower duties
to make it easier for the fertilizers to
reach the market.
By November, Russia's main mineral
fertilizer producers had delivered 100%
of mineral fertilizer procurements
announced by the Russian Ministry
of Agriculture for 2023 (5.4 mt) and
immediately began accepting orders
for the 2024 spring sowing.
Mineral fertilizer sales at the St
Petersburg International Mercantile
Exchange (SPIMEX) exceeded 2022
figures
The volume of mineral fertilizer
trading on SPIMEX since the
beginning of 2023 exceeded 90 kt,
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report DECEMBER
The UN Climate Change Conference
adopted a joint declaration by
participating countries on food
security
The countries participating in COP28
adopted a joint declaration aimed
at strengthening food security
worldwide on an equal and voluntary
basis and in cooperation with UN
organisations and the WTO.
Russian manufacturers increased
fertilizer production in 2023
In January–November, Russian
companies ramped up fertilizer
production to 23.6 mt, up 10% y-o-y.
JANUARY
Volume of and revenues from
Russian agricultural exports grew
in 2023
In 2023, Russian agricultural exports
went up 12% y-o-y to USD 45 bln.
In addition, revenue from Russian
commodity exports increased by 14%.
In 2023, Russia exported food to 169
countries, including key developing
economies.
MARKET
OVERVIEW
In 2023, the global fertilizer market
continued to face strong headwinds
from the uncertainty in energy and
food markets, which contributed
to sustained high price volatility and
hindered the recovery of fertilizer
consumption worldwide.
The significant influence of global
risks persisted, with the spread
of geopolitical tensions leading
to disruptions in established maritime
trade routes.
The weak outlook for global economic
growth, coupled with recession,
inflation and interest rate risks,
including those in developed countries
across Europe and North America, also
put a curb on fertilizer consumption
growth.
Russian and Belarusian fertilizer
producers made a gradual recovery
under the heavy pressure of Western
sanctions, particularly by shifting
their exports to alternative markets
in the Global South. This came
on the back of intensified competition
from other suppliers, driving downward
fluctuations in fertilizer prices.
Preliminary estimates by consulting
agencies and industry analysts suggest
that in 20231, global consumption
of mineral fertilizes stood at 190 mt
nutrient, a reduction of 2%, or 4 mt
nutrient, against 2022. Consumption
of nitrogen-based fertilizers was up
by 3 mt of N (+2.8%) to 109 mt;
for phosphate fertilizers, it increased
by 1 mt of Р2О5 (+2.2%) to 46 mt, and
for potash fertilizers, consumption
remained flat y-o-y at 35 mt of К2О
In terms of regional trends, fertilizer
consumption rebounded in all major
regions following a decline in 2022,
except for European countries.
Leading growth rates in fertilizer
consumption were observed in former
Soviet Union countries (excluding
Ukraine and the Baltic states), as well
as in the Middle East (primarily driven
by Turkey). Africa, North America, and
South America experienced growth
rates of approximately 4–5%, while
markets in South and Southeast Asia
demonstrated relatively slower demand
resurgence.
The primary driver of fertilizer demand
recovery in global markets was the
enhanced affordability of fertilizers,
particularly following a decline in prices
during 2H 2023.
Global fertilizer consumption
estimates, mt nutrient
Estimate of changes in consumption by region in 2023,
mt nutrient
109
106
110
112
108
‘23
‘22
‘21
‘20
‘19
46
45
49
48
45
35
35
40
40
37
190
186
199
200
190
Nitrogen-based fertilizers
Phosphate-based fertilizers
Potash fertilizers
East Asia
South Asia
Middle East
Latin America
North America
Africa
CIS
Europe
–0.1
0.5
–0.7
0.6
0.2
0.3
0.1 0.1
0.4
0.4
0.4
0.6
0.2
0.3
0.2 0.2
0.5
0.1
–0.1 –0.1
1%
0%
9%
4%
4%
5%
10%
0.4
0.1
0.5
1.2
1.1
0.4
0.7
-0.2
–1%
Nitrogen-based
fertilizers, N
Phosphate-based
fertilizers, P₂О₅
Potash
fertilizers, K₂О
46
47
1 Hereinafter based on data by CRU, Argusmedia, Profercy; expert estimates of industry analysts in Russian and international media.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report PHOSPHATE ROCK AND PHOSPHATE-BASED FERTILIZER MARKET
NITROGEN-BASED FERTILIZER MARKET
According to preliminary estimates,
global production of phosphate rock in
2023 totalled 205 mt, which is 6 mt, or
3%, above the 2022 level.
The increase in production was primarily
driven by the gradual recovery in
phosphate fertilizer consumption and
associated growth in the utilisation of
phosphate rock processing capacities.
The most notable increase in phosphate
rock production was seen in North Africa
(Morocco and Egypt, with a combined
growth of 7.0 mt) and China (+0.8 mt).
At the same time, there was a decrease
in production in the USA (-1.2 mt) and
Jordan (-0.7 mt).
Pricing in the phosphate rock market has
the traditional time lag associated with
changes in price indices in phosphate-
based fertilizer markets. In 1H 2023,
prices for key types of phosphate rock
remained relatively high before price
correction kicked in during the second
half of the year, following the trend for
phosphate-based fertilizers.
According to preliminary estimates,
global production of complex
phosphate-based fertilizers (DAP +
MAP) in 2023 reached 62 mt, a 3 mt
(+5%) increase y-o-y that reflects
temporary recovery of demand for
phosphate fertilizers in general in 2023.
The growth in production of these
fertilizers came primarily from China,
Morocco, and Saudi Arabia.
Global trade in DAP/MAP in 2023 was
up by 3.2 mt, or 12%
to 30mt. y-o-y
Phosphate rock prices, FOB Morocco (31–33% Р2О5), USD/t
320
300
280
260
240
220
200
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Global DAP/MAP prices in 2023, FOB Baltic, USD/t
700
620
540
460
380
300
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Noticeable import growth was recorded
in Latin America, where MAP imports
increased by 25% to 5.5 mt. While
India maintained a stable level of DAP
imports and North America posted an
import growth, in Europe a recovery in
phosphate fertilizer imports was still not
happening.
During 1H 2023, prices in the
phosphate-based fertilizer market
faced downward pressure due to weak
demand from major sales markets and
an increase in supply, partly attributed
to the easing of export restrictions in
China. However, prices gradually began
to recover in the second half of the year,
stabilising at above USD 500/t, FOB
Baltic (for DAP/MAP) by Q4 2023. The
price rebound in 2H 2023 was primarily
driven by the seasonal demand uptick
in India, Brazil, and North America.
In 2023, the global nitrogen-based
fertilizer market remained highly
volatile, with prices experiencing
significant fluctuations of up to 30–50%
in both ways within short timeframes.
This volatility was attributed to
various factors, including continued
uncertainty and high prices in energy
markets, supply chain disruptions in
key regions, trade restrictions, and
unscheduled technical shutdowns at
major production facilities.
Preliminary estimates indicate a 3.5%
or 6.3 mt increase in global urea
production in 2023, reaching a total
of 182 mt. India and China saw the
strongest production growth, driven by
increased utilisation of new capacities
commissioned between 2021 and
2022. Conversely, countries in the
Middle East and Southeast Asia faced
production reductions due to technical
shutdowns. After a considerable
POTASH FERTILIZER MARKET
Unlike the phosphate and nitrogen-
based fertilizer markets, the global
market of potash fertilizers saw no
recovery in demand in 2023. The
increase in potassium chloride imports
to China and Brazil was offset by weak
demand and reduced imports in other
key consumption markets, including
Southeast Asia, South Asia, Europe,
and other regions.
Against this backdrop, exports from
Russia and Belarus exceeded forecasts
by a significant margin. Coupled with
increased production and exports
from Laos following the launch of
new capacities in 2021 and 2022, this
resulted in an oversupply in the global
market and a downward price pressure
throughout 2023.
Global urea prices in 2023, FOB Baltic, USD/t
450
400
350
300
250
200
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
decline in 2022, European urea
production only managed to recover by
a quarter.
Global urea trade volumes in 2023
stayed virtually flat at some
53 mt
Potassium chloride prices in 2023, FOB Baltic, USD/t
500
420
340
260
180
100
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
48
49
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report STRATEGY
STRATEGY TO 2025
IN 2023, PHOSAGRO CONTINUED TO BE GUIDED
BY THE STRATEGY TO 2025 APPROVED BY THE
COMPANY’S BOARD OF DIRECTORS IN MARCH
2019. MOST OF ITS GOALS REMAINED RELEVANT
IN THE REPORTING YEAR DESPITE SIGNIFICANT
CHANGES IN PRODUCTION AND BUSINESS
OPERATIONS. ANOTHER RECORD-BREAKING
YEAR FOR THE PRODUCTION OF MINERAL
FERTILIZERS AND OTHER AGROCHEMICALS
(11.3 MT) WAS YET ANOTHER TESTAMENT TO
THE EFFECTIVENESS OF OUR STRATEGY.
Health and
safety goals
ZERO WORKPLACE
INCIDENTS AND
INJURIES
HR goals
CONTRIBUTION TO
THE UN SUSTAINABLE
DEVELOPMENT
Environmental and
climate goals
REDUCED EMISSIONS AND
WATER USE, INCREASED
WASTE RECYCLING
Sustainability principles are deeply
integrated in all of the strategy
to 2025 aspects
E S G
INCREASING SALES IN
PRIORITY MARKETS
• Expansion of the foothold in the
domestic market and other premium
markets
• Higher share of premium fertilizer
brands in the sales mix
BOOSTING LOGISTICS EFFICIENCY
• Alligment of production and sales
• Reduction of per unit transportation costs
• Developing port infrastructure
OPERATIONAL EFFICIENCY
AND PRODUCTION GROWTH
• Capacity expansion
• Higher self-sufficiency in feedstock
• Stronger operating efficiency
For more information, see page 54
For more information, see page 57
For more information, see page 59
50
51
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report STRATEGIC GOALS
Increasing sales
efficiency
Progress
Operational
efficiency
and production
growth
Progress
Boosting logistics
efficiency
Progress
52
53
2025 targets / 2023 status
Expansion of the foothold in premium markets,
the Company's own products
Sales volume: Russia and the CIS
Total storage capacity:
2025 target ..3.7 mt
2023 .............2.8 mt
up 9% y-o-y
Number of distribution and logistics centres
2025 target ..35
2023 .............34
up 3% y-o-y
2025 target ..>650.0 kt
2023 .............868.0 kt
up 6% y-o-y
Sales volume: Americas
2025 target ..3.5 mt
2023 .............3.8 mt
up 44% y-o-y
Higher share of premium fertilizer brands, the Company’s
own products
Share of complex fertilizers (NPK/NPS/PKS)
in total output:
2025 target ..43.0% (5.0 mt)
2023 .............31.4% (3.5 mt)
down 4.6% y-o-y
Capacity expansion
Maintaining high feedstock self-efficiency
Stronger operating efficiency
Phosphate rock processing:
2025 target ..8.6 mt
2023 .............9.1 mt
up 4% y-o-y
Mineral fertilizer and feed phosphate production:
2025 target ..11.6 mt
2023 .............11.0 mt
up 2% y-o-y
Ammonia:
2025 target ..76%
2023 .............75%
down 1% y-o-y
Sulphuric acid:
2025 target ..91%
2023 .............92%
flat y-o-y
Ammonium sulphate:
2025 target ..75%
2023 .............46%1
down 5% y-o-y
The actual effect of 2023 approved by project
steering committees:
>1.6 bln.
1 Deviation from the self-sufficiency target target for ammonium
sulphate is due to the fact that part of the ammonium sulphate
output (167 kt in 2023) is sold as a commercial product rather
than used for processing into compound mineral fertilizers as per
the scenario adopted in the Strategy to 2025.
Reduction of transportation costs
Alignment of production and sales
Developing port infrastructure
Increased reliance on corporate rolling stock
Rail infrastructure throughput at key production sites:
Use of innovative railcar fleet
2025 target ..28.3 mt
2023 .............26.5 mt
up 2% y-o-y
Efficient mix of port capacities in terms of costs and
supply reliability:
2025 target ..8.0 mt
2023 .............8.0 mt
flat y-o-y
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report INCREASING SALES EFFICIENCY
Progress towards our targets
Both of PhosAgro Group's key strategic
sales goals (expanding our footprint in
premium markets and increasing the
share of premium product sales) serve
the ultimate common goal of increasing
sales profitability.
PhosAgro Group is successfully working
on achieving this goal in the new
landscape through an active involvement
in the most high-margin markets along
with the development and promotion
of premium mineral fertilizer grades,
primarily complex fertilizers.
The goals are interrelated, as historically
there has been a predisposition of
geographical markets to consume
certain fertilizer grades. In particular,
one of our key regions, the Americas,
is largely focused on the consumption
of dual fertilizer grades with the aim
of then independently preparing
combinations of fertilizers that are best
suited to the crops, soils, climate, and
other factors of agricultural production.
At the same time, the Baltic and Eastern
European countries have historically
focused on procuring complex
fertilizer grades that do not require
blending and are ready for application.
Accordingly, the product mix offered
by the Company is also changing amid
restrictions on supplies to the European
market introduced in 2022–2023.
PhosAgro Group is fully prepared for
such challenges, thanks to the flexibility
of its production assets following a
major overhaul during the previous
investment cycle.
EXPANSION OF THE FOOTHOLD IN PREMIUM MARKETS
Sales of mineral fertilizers and feed phosphates, the Company’s own
products, kt
‘22
(actual)
‘23
(actual)
Strategy
to 2025
2,571
2,801
+9%
3,700
Russia and the CIS
2,239
2,137
–5%
3,100
Europe
2,651
3,811
+44%
3,500
Americas
3,493
2,390
–32%
1,255
Other
10,954 11,139
11,555
Total
Targets 2.4, 12.4, 15.1.
Promoting and raising
awareness of best farming
practices and developing a
service model
‘22
(actual) (actual)
‘23
Strategy
to 2025
Markets defined as premium when adopting Strategy to 2025
We remain strategically committed
to our home market, the core one,
which translated into an 8% increase
in domestic sales during the reporting
year (12% including third-party
products), and a 9% increase if the CIS
market is included.
The Latin America market showed the
most significant growth of more than
52% in 2023.
Europe, another market identified as a
priority one in 2019, showed a 5% decline.
54
55
Item
2021 (actual)
2022 (actual)
2023 (actual)
Strategy to 2025
Distribution centres
Total storage capacity, kt
Liquid complex fertilizer storage
capacity, kt
31
765
66
33
821
74
34
868
85
35
>650
62
From 2018 to 2023, PhosAgro invested
some RUB 4 bln in developing its
corporate sales network across Russia.
In 2023, the number of the network’s
distribution centres increased to 34,
while the total storage capacity
exceeded 860 kt, including 85 kt
for the transhipment of liquid mineral
fertilizers (a new record for Russia).
and seeds of Russian breeders. Thus,
the Company's customers gained
access to a comprehensive service,
including agrochemical soil analysis,
hybrid selection, development of plant
nutrition and protection systems,
product supply, and additional
services.
In 2024, PhosAgro Group will focus
on further expanding its distribution
network, developing the existing
logistics centres and launching new
ones in Russia's key agricultural
regions. The Company has already
embarked on projects to build three
new facilities in the Altai territory,
Penza and Ryazan regions. We will
also continue to enhance the service
component of the Company's offer to
Russian farmers.
In 2023, in line with our strategy of
shifting to direct interactions with
In 2023, as part of its service model
customers, the Company transformed
development, the Company introduced
its regional office in Krasnodar into
chemical soil analysis – a new service
Задачи 2.4, 12.4, 15.1. Продвигаем и популяризируем лучшие практики ведения сельского хозяйства, внедряя
Russia's first PhosAgro-Region
for Russian consumers. During the
сервисную модель обслуживания
customer centre to provide farmers
year, the Company's agronomic experts
with a one-stop shop for the full range
surveyed about 50,000 ha across
of PhosAgro Group services, including
20 regions in five federal districts. In
a wide range of mineral fertilizers,
2024, the Company plans to increase
logistics support, agronomic support,
its survey area by 40% by expanding its
agrochemical soil analysis, and
regional coverage and services.
much more. Going forward, if this
practice proves successful, we will roll
it out across our network's footprint.
Another area of increasing sales in
Russia's priority market is expanding
the functionality and improving
the efficiency of PhosAgro Group's
digital ecosystem, which includes,
among other things, an online trading
platform, the AgroResult mobile app,
the Agro Calculator project and the
Pro Agro communications platform
(YouTube, VK, Zen).
A landmark event in 2023 was the
launch of two new business areas –
the supply of crop protection products
�RUB 4 bln
was invested by the Company in the
development of its domestic sales
network in 2018–2023
For more information on the Company’s
digital platform, see the Customers
and Product Management section
on page 96
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report HIGHER SHARE OF PREMIUM
FERTILIZER BRANDS
As the Company forecast in its 2021
and 2022 integrated reports, demand
for dual fertilizer grades continued
to prevail in 2023 due to the superior
growth of the markets historically
focused on these types of fertilizers,
primarily in Latin America. The flexibility
of our production assets enables
Mineral fertilizer and feed phosphate sales mix, kt
us to respond swiftly to changes
in the market demand, while maintaining
full capacity utilisation.
BOOSTING LOGISTICS EFFICIENCY
Rail transport accounts for the most part
of the Company’s domestic shipments
(ca. 99%). In 2023, freight turnover
totalled 29.3 mt, up 1.0% against 2022,
with further growth to 31.0 mt expected
in 2024.
Rail shipments are also a focus area
of key initiatives aimed at improving
the reliability of product deliveries
and reducing transportation costs.
Ensuring a secure supply is a top priority
for us.
Item
Urea/AN/AS
MCP
APP
NPK/PK/PKS
MAP/DAP
Total
Share of complex fertilizers,%
The Company continues to develop and
actively market new fertilizer grades
in an effort to meet the existing and
potential needs of farmers in Russia and
abroad to the fullest extent possible,
while taking into account the specifics
of crops, soil types, and farming
conditions.
In 2023, sales of fertilizers introduced
from 2019 to 2023 exceeded
RUB 19.5 bln, or 5.4% of total sales
of the Company’s chemical products1.
Over the last three years (2021–2023),
revenue from fertilizers developed in
2021 (actual)
2022 (actual)
2023 (actual)
Strategy to 2025
2,495
405
206
3,586
3,565
10,257
35.0
2,551
350
112
3,670
4,272
10,954
33.5
2,561
377
198
3,500
4,504
11,139
31.4
2,620
472
213
4,980
3,270
11,555
43.1
2019–2023 was more than RUB 60.3 bln,
or 5.2% of total sales of the Company’s
chemical products1. The Company’s
ability to maintain a substantial
share of new grades is underpinned
by the strong R&D capabilities of NIUIF
and PhosAgro Innovation Centre.
For more information on our innovative
fertilizer grades, see the Research
and Education section.
Targets 2.4, 12.4, 13.1, 13.2.
Expanding sales of efficient and
eco-friendly mineral fertilizers
and developing innovative plant
nutrition systems, including
those that limit greenhouse gas
emissions and help adapt to
climate change
PhosAgro is actively developing the following premium products:
fertilizers with micronutrients
are considered one of the most
potent ways to combat malnutrition
and reduce nutrient deficiencies,
as the micronutrients can be
accumulated by plants and thus
benefit the human diet;
biological and biomineral fertilizers are
expected to become one of the most
effective solutions to ensuring global
food security by boosting agrochemical
efficiency of plant nutrition systems
without damaging the ecosystem;
coated fertilizers provide increased
environmental and agrochemical
efficiency due to coating with
a mixture of monocalcium and
dicalcium phosphates.
REDUCTION
OF TRANSPORTATION COSTS
As part of implementing the Strategy to
2025, we have 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:
• enhanced safety of operation
and more reliable supplies,
as PhosAgro Group’s production
and logistics processes are less
dependent on third-party services;
• higher cost efficiency, as corporate
railcars are cheaper in use than
third-party rolling stock;
• a positive environmental effect,
as the use of innovative rolling
stock with higher cargo tonnage
per railcar and train reduces the
negative impact on the environment
per tonne of cargo.
Other areas of focus to ensure
transportation security and optimise
transportation costs in 2023 included:
• developing mutually beneficial
terms and entering into agreements
with Russian Railways to co-finance
the development of transport
infrastructure at railway stations
adjacent to Apatit’s production
sites: Volkhov branch – final stage,
Balakovo branch – planning stage;
• securing tariff preferences
for the shipment of liquid sulphur
and sulphuric acid;
Target 12.4.
Managing chemicals and wastes
wisely throughout their life
cycle, including transportation
• verifying the possibility
of receiving subsidies for export
transportation of industrial products
by rail in the period from 2022
to 2024 according to Decree
of the Government of Russia
No. 1347 On State Support
of Russian Industrial Organisations
in Order to Compensate Expenses
for Transportation of Industrial
Products dated 28 July 2022.
Increased reliance on corporate
rolling stock, railcars
‘23
‘22
‘21
+76%
14,904
8,475
8,194
As part of the fleet renewal
programme in 2023, we procured
6,000 containers,
402 mineral hoppers
and 165 tank cars for
molten sulphur.
1 Due to certain aspects of accounting, the revenue does not include the margin.
56
57
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Target 9.1.
Developing rail infrastructure
and contributing to the
development of local
communities through our value
chain
ALIGNMENT OF PRODUCTION
AND SALES
Corporate rail infrastructure throughput
capacity at the Company’s key
production facilities is critical to
efficient transportation. Throughput
capacity depends on a number of
factors, such as availability of rolling
stock, length of railways, combination
of rolling stock types, and quality
of traffic organisation. Thanks to
our comprehensive investment
programmes, we have been able to
expand the throughput capacity of
our key production facilities’ railway
infrastructure to or above target levels
over the last three years.
In particular, in order to achieve the
target, the Company launched a
rolling stock renewal programme to
2034 in November 2022. As part of
the programme, we plan to procure
392 ore dump cars and 11 electric
locomotives for the Kirovsk branch, as
Progress towards our targets, mtpa
well as 23 shunting locomotives for the
Cherepovets facility and the Balakovo
branch.
As at the end of the reporting year, the
construction of a container yard and the
installation of the required equipment
at the phosphate facility in Cherepovets
was practically completed, which will
allow for a significant increase in future
container shipments.
As part of a four-party agreement
between Apatit, Severstal, Russian
Railways and Lengiprotrans, we are
modelling the operation of Cherepovets
railway hub, with a list of measures to
be drawn up to handle both current and
future freight turnover.
In 2023, as part of a comprehensive
Volkhov branch development project,
rail infrastructure throughput at
the Volkhov site was ramped up to
4.0 mtpa from 3.8 mtpa as at the end
of 2022, which exceeds the target set
in the Strategy to 2025. The project
implementation continues. We have
reached an agreement with Russian
Railways to co-finance the construction
of public infrastructure as part
of the second stage. Freight turnover
in 2025 is expected to reach 4.5 mtpa,
which exceeds the targets of Strategy
to 2025.
We continued to work on expanding
the transport infrastructure at the
Balakovo branch to support the planned
increase in finished product shipments
and acceptance of new raw materials –
potassium chloride and ammonium
sulphate. The Company plans to
increase the throughput capacity of
railway infrastructure in Balakovo from
the current 7.2 mtpa to 8.9 mtpa by
2025 (which also exceeds the Strategy
to 2025 target). To that end, more than
12 km of railway tracks are currently
being laid in addition to the existing
51 km.
Freight turnover of chemical facilities’ railway infrastructure
Cherepovets site
Balakovo branch
Volkhov branch
Total
2021
(actual)
2022
(actual)
2023
(actual)
Strategy to 2025
15.2
6.7
2.6
15.4
6.7
3.8
24.5
25.9
15.3
7.2
4.0
26.5
16.5
8.0
3.8
28.3
58
59
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
transhipment costs and providing state-
of-the-art transhipment capacities.
Our strategic aim is to develop
and maintain a balanced port sales
infrastructure in terms of costs
and reliability, capable of handling
at least 8 mtpa of fertilizer exports.
To achieve this target, in 2023
the Company revised a number of
existing transhipment contracts
and entered into new ones covering
the required export volumes
and effective through 2028. As of today,
we have basically secured the required
transhipment capacities in line
with the 8 mtpa target. Given our plans
to expand production capacities, the
work is underway to consider the
measures that would increase the
available transshipment capacity to 9–10
mtpa.
The ports key to PhosAgro Group’s
operations are located in the North-
West of Russia. In the Leningrad
region and St Petersburg: European
Sulphur Terminal, Petrolesport, First
Container Terminal, and St Petersburg
Port, in Murmansk: Murmansk Bulk
Terminal. The Company also uses
its own terminal at the HaminaKotka
port in Finland. We rely on specialised
terminals and their equipment designed
to mitigate the environmental impact.
OPERATIONAL EFFICIENCY AND PRODUCTION GROWTH
Target 9.1.
Enhancing port network, along
with offering employment
opportunities, developing
infrastructure and implementing
social investment programmes
CAPACITY EXPANSION
The long-term growth in demand for
mineral fertilizers has been steady.
In order to respond to stronger
demand, PhosAgro focuses
on expanding capacities to produce
its key products, which is one of our
key strategic goals for 2025.
Delivery on production targets, mt
Target
12.4.
Making ecologically pure products in line with sustainability
requirements and maximising the use of production waste
in further processes
Item
2021 (actual) 2022 (actual)
2023 (plan)1 2023 (actual)
2024 (plan)
Strategy to 2025
Production of nitrogen-based
fertilizers
Production of phosphate
fertilizers and feed-grade MCP
In-house processing
of phosphate rock
2.4
7.9
8.0
2.5
8.2
8.7
2.5
8.4
9.0
2.6
8.4
9.1
2.5
8.7
9.3
2.6
8.9
8.4
1 The Board of Directors approved an updated plan on 30 August 2023.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report IMPLEMENTATION OF HIGH-PRIORITY PROJECTS
Project
Project
Project
Project
Project
Project
Phase 3 of Balakovo
development project with a
flexible production scheme
Developing +10 m level
at the Kirovsky mine
Dry phosphogypsum storage
at the Cherepovets phosphate
facility
Higher volumes of
phosphate rock processing
at the Cherepovets facility
Higher volumes of phosphate
rock processing at the Volkhov
branch
An increase in production of
feed-grade MCP by 53 ktpa
Completion
Completion
Completion
Completion
Completion
Completion
2025
Targets
NPK
937 ktpa,
DAP
560 ktpa
Investments
18.2 bln
IRR of 25%
Status
DAP production is to
be launched in 2Q 2024
2022: first start-up facility
(Kukisvumchorr flank)
2023: second start-up facility
(Yukspor flank)
Further development until
2035
Targets
Maximum production
capacity of the level
9.4 mt of ore
by 2028
Investments
RUB >36 bln
IRR of 21%
Status
In October 2023, the
Kirovsky mine saw the
launch of the second
start-up facility (Yukspor
flank) to compensate for
diminishing ore volumes
and ramp up ore production
to 25 mtpa.
60
61
2023: the first stage is
completed (dry transportation
of phosphogypsum from
technological system 1 of the
wet-process phosphoric acid plant,
conveyor section to transfer unit 1)
2024: dry transportation
of phosphogypsum from
technological system 2 of the
wet-process phosphoric acid plant,
conveyor construction finished
2027: the entire set of works is to
be completed
Targets
The capacity of a trunk
phosphogypsum conveyor
at 550 t/h
2024
2024
2024
Targets
Targets
Targets
An increase in phosphate
rock and DAP processing
An increase in phosphate
rock and MAP processing
An increase in production
of feed-grade MCP
by 218 ktpa
and 173 ktpa
respectively
by 153 ktpa
and 107 ktpa
respectively
by 53 ktpa
Investments
Investments
Investments
RUB 6.3 bln
IRR >20%
RUB 2.3 bln
IRR >20%
RUB 3.3 bln
IRR of 22%
Investments
Status
Status
Status
Scheduled ramp-up to
increased phosphate rock
processing volumes – 4Q 2024
Scheduled ramp-up to
increased phosphate rock
processing volumes – 4Q 2024
In November 2023, major
construction and installation
were completed, with a
new belt filter put in place
to increase phosphate rock
processing as part of the
project. A ramp-up to design
output of feed-grade MCP is
scheduled for 2Q 2024.
RUB 4.6 bln
(targeted project)
Status
In November 2023, building
2.12 (phosphosphoric acid
plant 1) was fully transferred
to the dry transportation
of phosphogypsum, work
was completed on the first
start-up facility of the trunk
phosphogypsum conveyor (to
transfer unit 1), and the first
batches of dry phosphogypsum
were transported by road to a
storage facility
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
HIGHER SELF-SUFFICIENCY
IN FEEDSTOCK
Feedstock self-efficiency
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
mineral fertilizers, we are ramping up
the production of other key commodities
thus maintaining a high level of self-
sufficiency in feedstock.
Chemical production and consumption
Item
2021
(actual)
2022
(actual)
2023
(actual)
2024
(plan) Strategy to 2025
Ammonia, %
76.0
76.0
75.0
74.0
• Production, mt
• Consumption, mt
1.9
2.5
2.0
2.6
2.0
2.6
2.0
2.7
Sulphuric acid, %
95.0
92.0
92.0
95.0
• Production, mt
• Consumption, mt
7.4
7.8
7.9
8.6
8.1
8.8
8.7
9.1
Ammonium sulphate1, %
60.0
51.0
46.0
49.0
• Production, mt
• Consumption, mt
0.3
0.5
0.3
0.6
0.3
0.6
0.3
0.6
76.0
1.9
2.5
91.0
7.8
8.6
75.0
0.7
0.9
Implementation of high-priority projects
Project
Completion
Targets
1Q 2024
An upgrade of the process
system for 20% sulphuric acid
production with an increase
in output by 350 ktpa at the
Balakovo branch
Investments
Status
RUB 6.6 bln
An increase in sulphuric acid
output by
350 ktpa
The sulphuric acid unit with the existing
compressor was launched in November
2023.
A ramp-up to design capacity of 135 t/h
is scheduled for 1Q 2024.
CAPITAL INVESTMENTS
Progress against 2025 strategic goals
of capacity expansion and feedstock
self-efficiency comes on the back of
effective planning and the successful
implementation of the Company's
investment programme.
A disciplined approach to CAPEX
• The minimum project IRR – an
approved discount rate +2%
(at least 15%)
• Annual CAPEX budget of up
to 50% of EBITDA
• More efficient working capital
management
Breakdown of CAPEX, RUB bln
Expenditures
Investment projects
Maintenance
Non-industrial construction
Total excluding capitalised repairs
Total including capitalised repairs
CAPEX funding in 2021–2023 and 2024 forecast1
Item
CAPEX, RUB bln
Adjusted EBITDA, RUB bln
CAPEX / adjusted EBITDA, %
2021 (actual)
2022 (actual)
2023 (actual)
2024 (plan)
30.0
10.8
1.1
41.9
48.0
24.1
27.0
2.2
53.2
63.0
18.8
31.3
3.3
53.4
64.2
25.4
32.4
2.7
60.5
73.0
2021 (actual)
2022 (actual)
2023 (actual)
2024 (plan)
41.9
192.1
22
53.2
266.9
20
53.4
168.4
32
Details of key investment projects in 20231
Stripping and mine development preparations: +10 m at the Kirovsky mine
Stripping and mine development preparations at the Rasvumchorr Plateau
Development of the Balakovo branch (phase 3) with a switch to triple fertilizers
An upgrade of the process system for 20% sulphuric acid production with an increase in output by 350 ktpa
An increase in production of feed-grade MCP by 53 ktpa
Development of the Volkhov branch (including – construction of a unit to produce water soluble MAP)
Other key projects
Total
60.5
165.4
37
3.7
3.4
3.4
2.4
1.6
1.2
3.1
18.8
1 Failure to meet the self-sufficiency target for ammonium sulphate is due to the fact that part of the ammonium sulphate output (167 kt in 2023)
is sold as a commercial product rather than used for processing into compound mineral fertilizers as per the scenario adopted in the Strategy
to 2025.
1 Excluding capitalised repairs.
62
63
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report OPERATING EFFICIENCY
IMPROVEMENTS
At PhosAgro, we are implementing a whole range of projects and initiatives
to improve our technologies and organisational approaches and streamline
production processes.
In 2023, we successfully implemented the following projects.
Target 8.3.
Maintaining and developing existing
operations and creating innovative facilities
Project
Introduction of a screening and forecasting system for Apatit counterparties
This is PhosAgro Group's first state-funded project using a grant from the Skolkovo
Foundation issued in accordance with Russian Government Resolution No. 555 dated
3 May 2019 to finance the first large-scale roll-out of Russian IT solutions. The grant
financed 50% of project costs.
Project schedule
10 January 2022 – 31 December 2023
Project goals
1
Introduction of a counterparty
screening and forecasting IT
system
Project
Improving the performance of Apatit’s business units and
branches in 2023
2
3
Creating a framework to reduce
the likelihood of materialised
risks related to interactions with
unreliable counterparties by
introducing an automated scoring
and forecasting system
Streamlining operational
indicators for counterparty
screening, assessment, selection,
and document submission to
supervisory authorities
Production site
Cherepovets, Kirovsk, Balakovo, Volkhov
Completion
9 January 2023 – 31 December 2023
Economic effect
Saved through:
Project goals are fully met.
RUB 80.4 mln
Risk mitigation in contracting and
bidding procedures
No potential increase in
counterparty vetting expenses
64
65
Key project initiatives
1
2
3
Higher volumes of phosphate rock
processing and MAP production
Reducing end-to-end phosphate
rock losses
Improving recovery rates in
phosphate rock production
Economic effect in 2023
RUB 1,593.6 mln1
1 Not including the impact of higher volumes of phosphate rock processing
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Despite the materialisation of these
risks, the Company ensures
uninterrupted operation of all its
production sites, timely supply
of fertilizers, and care for its employees
and their families. PhosAgro Group's
team manages to cope with the new
challenges in a short space of time, not
just keeping the business stable, but
reaching new highs. Risks materialised
in 2023 did not require us to adjust our
Strategy to 2025.
Based on the foregoing, the Board
of Directors finds it reasonable
to believe that the Company 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.
PROSPECTS
PhosAgro Group’s development
scenarios are reviewed by the Board of
Directors when approving its Strategy.
The strategic planning cycle adopted
by the Company is five years, with the
current approved strategy effective
from 2021 to 2025. Despite increasing
uncertainty as regards the Company's
growth prospects and external factors,
the Board of Directors decided to stick
to a five-year planning horizon in line
with existing practices.
Since 2019, 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.
For PhosAgro Group, 2021 was marked
by the countervailing duties imposed
on Russian and Moroccan producers in
the US market, tighter pricing control
and the introduction of quotas and
export licences in Russia.
In 2023, countervailing duties
and the export quota system remained
in force. The restrictions caused
by international sanctions and supply
chain disruptions still made it difficult
for the Company to deliver its products
to its traditional markets.
In 2023, similarly to the previous year,
the Company was adversely affected
by the termination of operations in
Russia by some Western suppliers of
equipment, services and technology,
as well as by difficulties in making
payments.
When approving the Strategy to 2025,
the Board of Directors also weighed the
associated strategic risks. The Board
of Directors reviews the results of key
risk monitoring every quarter, while
also looking into their reassessment
at the end of the year. Each risk has
a dedicated risk management map,
containing a detailed description
along with mitigants and probability,
materiality and risk appetite estimates.
The previous year's risk profile and
materiality assessment remained
relevant in 2023. At the same time, the
Board of Directors analyses new risks
that can affect the Company's ability
to perform its obligations and continue
business. The key challenges of the
reporting year, primarily sanctions and
restrictions, did not lead to disruptions
of our operations, which proves that we
correctly identified and successfully
managed these risks, while also taking
advantage in such areas as production,
sales growth, HR management, and
sustainable development.
For more information on the Company’s
strategic risks, see the Strategic
Report section on page 68.
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 for the benefit of the Company
to promote its success, taking
into account possible long-term
consequences of its decisions
for 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 Group’s stakeholders should
be interacted with responsibly and that
their interests should be respected to
the maximum extent possible when
making decisions within the Board of
Directors' scope of authority.
At least once a year, the Strategy
and Sustainable Development
Committee of the Board of Directors
reviews feedback from stakeholders
on aspects of the Company’s
operations that are material to them.
Such feedback is used both to identify
topics and indicators to be disclosed in
the Company's non-financial reporting
and to determine mechanisms for
engagement with the Company's
stakeholders, including at the Board
level.
For more information on the
Company's stakeholders and
engagement with them, see the
Stakeholder Engagement section
of this Report on page 28, which
also contains references to related
Performance Review subsections
describing approaches to opinion
surveys of relevant stakeholders and
collecting data on their interests to be
taken into account by the Company's
governance bodies when making
decisions.
As the Company's key governance
body, the Board of Directors aligns its
decision with their understanding of
stakeholder interests shaped as part of
management communications, Board
and committee meetings, approval of
non-financial reporting, and study of
other information sources.
The reporting year saw the resumption
of on-site Board meetings at the
Company's production facilities.
These meeting help the Board of
Directors reach a completely new level
in engaging with the whole range of
stakeholders – regional and municipal
governments, key management of
PhosAgro's subsidiaries, production
teams, and local communities.
In August 2023, such meeting took
place at the Volkhov production site
which completed a major investment
project in the reporting year. The
project culminated in the construction
of a unique mineral fertilizer plant
with a capacity of more than 1 mt.
The Board of Directors made a tour
of the facility, held meetings with
key employees, and took part in the
opening of renovated social facilities
and commissioning of another
apartment block for Volkhov branch
employees.
On-site meetings are a vital element
of feedback which helps the
Board of Directors gain a thorough
understanding of the Company's
economic, social and environmental
impact and make decisions taking into
account the interests of a very wide
range of stakeholders to the fullest
extent possible.
Our employees have a special place
among the Company's stakeholders.
Their welfare, including fair
remuneration along with successful
development and effective social
support, is an area of focus for the
Board of Directors, especially its
Remuneration and Human Resources
Committee, the chairman of which
regularly reports to the Board of
Directors on relevant progress.
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. The Board of Directors can
acquaint itself with the opinion of the
Minudobreniya Association and take it
into account when making decisions
on the key matters of the Company's
development both during personal
meetings, in particular when visiting
production sites, and indirectly from
management reports at the meetings
of the Board of Directors and its
committees.
On top of that, the Audit Committee
reviews reports submitted by
PhosAgro's and its counterparties'
employees to the PhosAgro hot line as
well as management response to such
reports on a quarterly basis. The Board
of Directors and its Remuneration
and Human Resources Committee
also discuss the results of an annual
employee satisfaction and loyalty
survey launched in 2013.
66
67
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report STRATEGIC
RISKS
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.
Impact on sustainability
Effective starting June 2023 is
IFRS S1 General Requirements for
Disclosure of Sustainability-related
Financial Information. This standard
requires disclosure of information
about sustainability-related risks.
These are defined as risks that can
affect an entity’s cash flows, its
access to finance or cost of capital
over the short, medium and long term.
Under the standard, said risks arise
as part of an entity’s interactions
with stakeholders, society, the
economy and the natural environment
throughout its value chain.
2023 is not a reporting period for
the application of IFRS S1. However,
for more comprehensive disclosure
of information, the Company has
classified its risks based on their
impact on sustainability, and has
described this impact.
68
69
Risk appetite
In pursuing its goals, the Company
is guided by risk appetite, or the
level of risk it deems acceptable.
Risk appetite is an integral part of
strategic and operational decision-
making. The Board of Directors
defines the overall risk appetite when
reviewing the Company’s risks and
also as part of approving its strategy,
budget and investment programme
and considering other matters within
the Board’s scope of authority. Risk
appetite is then reflected in the
Company's specific procedures and
key performance indicators.
STRATEGIC
RISKS
4
The Company aims to identify and
use opportunities that open up in
the market as a result of changes
in the external environment. The
Company quickly responds to the
changing operating landscape
and targets priority markets that
offer the best terms and conditions
to sell its products. At the same
time, the Company’s business
model is designed in a way that
ensures operational efficiency
while maintaining a commitment to
sustainable development.
PRODUCTION
RISKS
2
The Company aims to minimise
unscheduled downtime in production
while at the same time making
sure that its processes and end
product quality meet all applicable
requirements. Creating a safe working
environment is the Company’s
absolute priority. The Company
makes every effort to minimise the
negative impact of its production
processes on the environment and
climate.
FINANCIAL RISKS
OPERATIONAL RISKS
REGULATORY RISKS
3
2
1
As a reliable borrower, the Company
seeks to raise funding on the
most attractive terms available in
the market. The Company’s core
operations are FX-linked, so we
use natural hedging methods to
manage our FX risk. We are not
ready to take on credit risk related to
our counterparties: in our relations
with them, we either seek to secure
terms and conditions we see as most
beneficial to us or use risk transfer
strategies.
The Company aims to prevent any
disruptions to its business processes
and IT infrastructure performance and
to also secure maximum protection
from cyber threats and fraud. When
planning and implementing its
investment projects, the Company
works to deliver against strategic
priorities and key performance
indicators while factoring in potential
deviations as a result of changing
external factors.
The Company aims to remain
100% compliant with all applicable
statutory regulations, including
those related to taxation. As part of
industry associations, the Company
is involved in developing regulatory
initiatives in order to minimise any
non-compliance risk. In addition to
laws and regulations, the Company
operates in line with corporate
values and ethical principles so as
to minimise potential reputational
damag.
0
1
zero risk appetite (no operations)
minimum risk appetite (reduction of
risk exposure to the largest extent
possible)
2
3
low risk appetite (reduction of risk
exposure)
balanced risk appetite (risks and
opportunities are balanced)
4
5
focused on opportunities (increased risk
exposure)
maximum risk appetite (maximisation of
risk exposure)
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report KEY RISKS ASSOCIATED WITH PHOSAGRO GROUP’S ACTIVITIES
Probability
Low
Medium
High
4
2
10
15
h
g
H
i
i
m
u
d
e
M
w
o
L
t
c
a
p
m
I
1
17
18
6
20
3
7
11
13
12
14
16
21
19
9
8
5
STRATEGIC RISK
FINANCIAL RISK
PRODUCTION RISK
1 Strategic planning risk
16 Credit risk
17 Currency risk
18 Commodity risk
21
Interest rate risk
5 Production risk
6 Health and safety risk
7 Environmental risk
REGULATORY RISK
OPERATIONAL RISK
10 Tax risk
13 Regulatory risk
14 Corruption risk
15 Reputation risk
8 Project risk
9 Business processes and
systems risk
11
Information security risk
12 Economic security risk
2 Failure to deliver on
sustainable planning
goals
3 Social risk
4 HR risk
19 Climate risk
20 Sanctions risk
Change in the risk
Growing or continuing
tensions
Decreasing tensions
70
71
Key indicators / risks
materialised
Downside deviations of actual
strategic performance from
targets.
Geopolitical developments
cause uncertainty to persist
and result in the assessment of
this risk as high.
Downside deviations of actual
ESG and SDG performance
from targets.
No material risk events
occurred.
Downside deviations of actual
ESG performance (social
dimension) from targets.
No material risk events
occurred.
№ Risk
Description
Risk mitigants
1
Strategic planning
GRI 201, 202
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.
PhosAgro started updating its strategy
to 2030 to reflect the latest changes in
the external and internal environments.
2
Failure to deliver
on ESG and
sustainable
development goals
GRI 203, 308, 414
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.
Has an impact
on sustainable
development through
goal setting and
resource planning to
achieve said goals
3
Social
GRI 401, 413
Risk of an adverse social
environment in the regions
of operation.
Has an impact
on sustainable
development through
community relations in
regions of operatio
The Board of Directors’ Strategy and
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.
Significant work done in this area has
enabled the Company to materially
improve its ratings and become a
leader in ESG. It should be noted
that a result of certain geopolitical
developments, a number of ESG rating
agencies suspended their operations
in Russia.
For more information on the Company’s
activities and indicators in this area, see
the Navigator on UN SDGs section on
page 14
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 and towns where
the Company operates. Sustainable
development in the regions of
operation is one of the key goals
the Group 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 222
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Description
Risk mitigants
№ Risk
4
HR
GRI 401, 402, 403, 404,
405
5
Production
GRI 201, 302,
SASB EM-MM-210b.2
Developments and
decisions related to the
hiring, development and
retention of employees.
Has an impact
on sustainable
development through
dependence on staff,
which are one of
the Company's key
resources
Technical/industrial
disruptions of production
processes resulting in
unscheduled equipment
downtime
PhosAgro runs independent and joint
programmes seeking to train and
attract young talents, including those
from other regions, develop employee
skills and enhance motivation as a way
to improve retention and productivity.
For more information on the Company’s
activities in this area, see the People
Development section on page 142
PhosAgro 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.
The Company’s insurance programme
covers the risk of production
disruptions.
PhosAgro Group ensures health
and safety in workplaces and anti-
terrorist protection of facilities 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, ensures anti-
terrorist protection of facilities, 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. Initiatives and measures
to reduce the above risks are set out in
the relevant internal regulations of the
Company
For more information on the Company’s
indicators in this area, see the Health and
Safety Review section on page 164
Key indicators / risks
materialised
Personnel turnover and skill
mismatch.
No material risk events
occurred. However, labour
market developments, including
those related to generational
and geopolitical factors, cause
the risk to increase moderately.
Unscheduled equipment
downtime.
No material risk events
occurred.
Workplace injuries and other
incidents.
2023 saw some risks
materialise in terms of
workplace injuries. All
investigations lead to the
implementation of remedial
action plans to prevent the
recurrence of similar incidents.
№ Risk
Description
Risk mitigants
7
Environmental
GRI 303, 304, 305, 306,
308
Risk of actual and
potential environmental
damage resulting from the
Company’s operations.
Has an impact
on sustainable
development
by affecting the
environment
8
Project
GRI 201
Risk associated with delays
and budget overruns in
construction and upgrade
projects, along with failure
to deliver project efficiency
targets
The Company 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.
The Company implements projects
to address all the main areas of
environmental impact (water use,
greenhouse gas and other emissions,
waste, biodiversity).
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.
For more information on the Company’s
activities in this area, see the
Environmental Review section on
page 182
PhosAgro 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
Key indicators / risks
materialised
Exceeding maximum
permissible levels of negative
environmental impact.
No material risk events
occurred.
Downside deviations of actual
project efficiency indicators
from targets.
No material risk events
occurred. That said,
geopolitical developments
caused deviations related
to shipments of imported
equipment. The Company sets
up its business processes in
a way that makes sure such
risk is minimised, including by
relying on import substitution
efforts.
6
Health and safety
GRI 403
Risks associated with
occupational illnesses,
injuries, accidents at
production facilities and
other incidents, including
acts of terrorism, and
risks arising from non-
compliance with statutory
requirements in the realm
of health, safety and
combating terrorism
72
73
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report № Risk
Description
Risk mitigants
Key indicators / risks
materialised
№ Risk
Description
Risk mitigants
9
Business processes
and systems
GRI 402
Inefficiency or disruption
of the Company’s business
processes, including risks
related to counterparties
and supply chain
10
Tax
GRI 207
11
Information security
GRI 410
Potential claims lodged by
tax authorities in response
to the Company’s failure to
correctly file tax returns or
pay taxes in due time.
Has an impact
on sustainable
development through
interaction with fiscal
authorities, which
directly impacts cash
flows
Losses incurred on the
Company’s property
and assets as a result of
unauthorised access to
its information systems or
disclosure of confidential
data
PhosAgro seeks to maximise efficiency
of all its business processes and
systems.
Downside deviations of actual
business process indicators (by
focus area) from targets.
No material risk events
occurred. That said,
geopolitical developments
caused deviations related,
among other things, to
shipments of imported
materials and use of software.
The Company sets up its
business processes in a way
that makes sure such risk is
minimised, including by relying
on import substitution efforts.
Tax claims.
No material risk events
occurred.
Unauthorised disclosure of
confidential data, unauthorised
access to IT systems.
No material risk events
occurred.
Business process efficiency reviews
are conducted on a regular basis to
identify potential bottlenecks and
develop and implement efficiency
improvement initiatives. The Company
strives to minimise the risk of
disruptions in supplies of key materials
and feedstock.
To that end, PhosAgro 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 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.
PhosAgro 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 its confidentiality
policy. The Company’s Board of
Directors adopted the Information
Security Policy.
74
75
12
Economic security
GRI 410
Losses incurred on the
Company’s property
and assets as a result
of economic crimes
committed by employees
or third parties, including
fraud and theft
13
Regulatory
GRI 303, 304, 305, 306
14
Corruption
GRI 204, 205
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.
Has an impact
on sustainable
development through
interaction with the
regulatory environment
Losses resulting from non-
compliance or inadequate
compliance with applicable
anti-corruption laws by the
Company or its employees
(penalties levied against
the Company by
government authorities
and other damages)
The Company takes steps to prevent
potential damage to its property and
assets as a result of economic law
infringements, including, in particular,
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 the Company’s functions.
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. The Company prepares
and submits documents in due time to
receive or extend licences required for
its business
PhosAgro 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. The Company’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.
Key indicators / risks
materialised
Theft and fraud incidents.
No material risk events
occurred.
Deviations related to regulatory
compliance.
No material risk events
occurred.
Corrupt practices, conflicts of
interest.
No material risk events
occurred.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Key indicators / risks
materialised
Stakeholder confidence.
No material risk events
occurred.
Overdue accounts receivable,
provision for bad debt.
No material risk events
occurred.
№ Risk
Description
Risk mitigants
15
Reputation
GRI 206
16
Credit
GRI 201
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.
Has an impact
on sustainable
development through
the Company’s business
reputation
Financial losses caused
by the failure of buyers,
commercial contractors
and other financial
counterparties to fulfil their
financial obligations to the
Company in full and on
time.
Has an impact
on sustainable
development through
interaction with
counterparties, whose
credit obligations
directly impact cash
flows
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.
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,
and use of letters of credit. 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 352
Key indicators / risks
materialised
Adverse changes in exchange
rates.
No material risk events
occurred.
Adverse changes in product
and feedstock prices.
No material risk events
occurred.
№ Risk
Description
Risk mitigants
17
Currency
GRI 201
Financial losses arising
from unfavourable changes
in FX rates against the
Company’s base currency
18
Commodity
GRI 204, 417
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 the
Company
In the context of 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, a significant portion 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 352
Given the volatility in prices for its main
products, the Company constantly
seeks to streamline its sales structure
in terms of the fertilizer grade offering
based on market priorities, as a way
to maximise margins. PhosAgro 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. To
reduce its feedstock and equipment
expenses, PhosAgro invites multiple
suppliers to take part in tenders, enters
into long-term supply contracts and
develops lasting relationships with its
suppliers.
76
77
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report № Risk
Description
Risk mitigants
19
Climate
GRI 203, 302, 305
Risks associated with
changes in natural
processes or phenomena
amid 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
regulations or restrictions
on the use of fossil fuels
or non-renewable energy
(transitional factors).
Has an impact
on sustainable
development through
the potential impact
of climate change and
the effect of regulatory
changes on the
Company's operations
Processes to identify and assess
climate change risks are being set up
throughout the value chain and form
an integral part of the Company’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 and sustainable
development.
Key indicators / risks
materialised
Adverse deviations resulting
from climate impacts (by focus
area).
In 2023, there were abnormal
weather events. However, at
this stage it is quite difficult
to assess the extent to which
these were caused by climate
change. In any case, the
Company did not incur any
significant losses associated
with these natural phenomena.
№ Risk
Description
Risk mitigants
20
Sanctions
GRI 201, 202, 203, 204
Foreign sanctions imposed
on the Group’s companies.
Has an impact
on sustainable
development through
the potential effect of
sanctions on cash flows,
access to financing or
cost of capital
The global nature of international
economy and geopolitical
developments create a background for
various sanctions to be imposed on the
Russian economy and the Company’s
operations by individual countries or
their groups. The Company’s flexible
business model helps minimise any
negative impact of such sanctions or
restrictions.
Key indicators / risks
materialised
Losses associated with
sanctions.
Geopolitical developments
have caused this risk to
materialise and continue to
support its assessment as
high. By quickly developing
and putting in place response
measures, the Company
ensured business continuity
and delivered on its targets.
21
Interest rates
GRI 201
Losses associated with
changes in interest rates.
No material risk events
occurred.
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 352
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.
Has an impact
on sustainable
development through
potential changes in
interest rates, which
directly impacts cash
flows
78
79
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report PERFOMANCE
REVIEW
Financial
performance
82
Operational
performance
90
Customers and
product
management
96
Research and
education
110
Supply chain
128
People
development
142
Industrial
safety
164
Environmental
review
182
Contributing to
local communities
222
80
81
41.6%
EBITDA margin
WITH OUR SOUND STRATEGY, STRICT FINANCIAL DISCIPLINE AND
EFFECTIVE DELIVERY OF THE INVESTMENT PROGRAMME, WE SET NEW
PRODUCTION RECORDS, DEMONSTRATED A CONSISTENTLY STRONG
FINANCIAL PERFORMANCE, AND MAINTAINED A STEADY PROGRESS
TOWARDS OUR SUSTAINABILITY OBJECTIVES. ANOTHER SUCCESSFUL YEAR
WILL BE PHOSAGRO’S SIZEABLE CONTRIBUTION TO THE DEVELOPMENT
IN RUSSIA OF A COST-EFFECTIVE AND SUSTAINBLE AGRITECH
SECTOR STAFFED WITH SKILLED AND MOTIVATED WORKFORCE.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report FINANCIAL
PERFORMANCE
In the reporting year, the Company’s
revenue went above RUB 440 bln,
EBITDA reached RUB 183 bln,
and adjusted net profit came
in at RUB 104 bln. Even though this
constituted a decline compared
to 2022 with its historically high
global fertilizer prices, these results
are nonetheless among the strongest
on record. Another highlight
was the EBITDA margin, which remained
at a very high level of over 40%.
In 2023, the Company had a free
cash flow of more than RUB 70 bln,
driven by continuously high capital
investments and additional liquidity
outflows associated with the payment
of newly introduced export duties and
the year-end transfer of RUB 6.4 bln
as an advance payment towards
the excess profit tax liabilities.
Robust financial position, capital
investments without budget overruns,
and a strong free cash flow enable us
to fully meet all our debt obligations
(including those denominated in foreign
currencies) in a timely manner.
As at the end of 2023, PhosAgro’s
leverage remained at a comfortable
level, with net debt standing
at RUB 223.2 bln and the net debt/
EBITDA ratio coming in at 1.2x. The share
of USD-denominated debt also
continued to decline.
The high credit quality of the Company
was further confirmed by the success
of two exchange-traded bond issues
(for CNY 2 bln and RUB 20 bln), which
helped, among other things, replace
more than 74% of the two remaining
PHOR-25 and PHOR-28 Eurobond issues
for a total amount of USD 740.4 mln
With global fertilizer prices going
back to normal from the peak levels
of 2022, PhosAgro Group once
again delivered strong financial
performance in 2023. It was driven
by both growth of sales volumes
(especially in the segment of high-
margin products) and effective
cost control, with cost reduction
coming primarily on the back
of the investment programme
successfully implemented
in the previous years.
> RUB 440 bln
Company revenue in 2023
RUB 104 bln
adjusted net profit
41.6 %
EBITDA margin
Alexander Sharabaika
Deputy CEO for Finance and International Projects at PhosAgro
82
83
KEY EXTERNAL DRIVERS OF FINANCIAL RESULTS
IN ADDITION TO INCREASED SALES VOLUMES AND CONTINUOUSLY COMPETITIVE COST LEVELS,
THE STRONG FINANCIAL RESULTS IN 2023 WERE DRIVEN BY THE FOLLOWING MARKET EVENTS:
1/
2/
Significant increase in mineral fertilizer consumption,
primarily in Latin America, Africa, South Asia and
Oceania, due to a good fertilizer/crop price ratio,
favourable weather conditions in key markets, and
stronger government support for agriculture
Growth of global crop prices 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
3/
4/
Restrictions on exports of phosphate-based fertilizers
from China to bolster domestic supply and introduction
of fertilizer export quotas in Russia
Fertilizer affordability issues caused by supply disruptions
and an increase in raw materials prices
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report REVENUE ANALYSIS
OPERATING COSTS ANALYSIS
In 2023, revenue decreased by 23% y-o-y to RUB 440 bln
(USD 5.23 bln) due to the correction of global fertilizer prices after
the record high levels recorded in 2022.
RUB 440 bln
revenue in 2023
Financial and operational highlights, RUB mln
Item
Financial highlights, rub mln
Revenue
EBITDA
Adj. EBITDA1
Adj. EBITDA margin, %
Net profit
Adj. net profit2
Adj. free cash flow3
Item
Net debt
2021
2022
2023
Δ 2023/2022,%
420,488.00
569,527.00
440,304.00
191,810.00
257,879.00
183,038.00
192,117.00
266,947.00
168,352.00
45.70
46.90
38.20
129,674.00
184,714.00
86,141.00
130,512.00
182,297.00
104,105.00
77,857.00
141,024.00
70,208.00
(22.70)
(29.00)
(36.90)
(53.40)
(42.90)
(50.20)
31.12.2021
31.12.2022
31.12.2023
Δ 2023/2022,%
153,718.00
180,338.00
223,207.00
23.80
12M net debt / EBITDA
0.80
0.70
1.22
Sales volume, kt
2021
2022
2023
Δ 2023/2022,%
Phosphate-based fertilizers and feed phosphates
7,762.40
8,402.80
Nitrogen-based fertilizers
2,494.50
2,550.80
8,578.20
2,560.50
Total fertilizers
Other products
10,256.90
10,953.60
11,138.70
226.90
179.50
214.80
Total fertilizers and other products
10,483.80
11,133.10
11,353.50
2.10
0.40
1.70
19.70
2.00
Revenue breakdown by key product, RUB bln
Item
Phosphate and nitrogen-based products
Other
Total
2021
404.9
15.6
420.5
2022
551.0
18.5
2023
Δ 2023/2022,%
421.7
18.6
(23.5)
0.5
(22.7)
569.5
440.3
1 Adjusted EBITDA is calculated as operating profit adjusted for depreciation and amortisation less foreign exchange gain or loss from operating
activities.
2 Adjusted net profit means net profit less net foreign exchange gain or loss from operating and financing activities.
3 Adjusted free cash flow is calculated as cash flows from operating activities less cash flows from investing activities, adjusted for the outflow
of cash and cash equivalents as result of a loss of control over foreign subsidiaries.
84
85
Cost of sales, RUB mln
Item
Depreciation and amortisation
Materials and services
• Phosphate rock transportation
• Repair
• Toll processing
• 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
In 2023, cost of sales went down by 6.5%
to RUB 251.6 bln.
This was mainly due to lower raw
material expenses (down 41.5% y-o-y
to RUB 63.3 bln) and freight, port and
stevedoring costs (down 39.4% y-o-y
to RUB 9.9 bln).
2023
Δ 2023/2022,%
2021
24,812
47,084
9,105
11,373
-
3,486
23,120
2022
26,979
54,178
11,610
12,002
-
3,217
27,349
63,534
108,323
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
19,550
40,798
27,418
14,226
6,331
19,667
6,754
6,459
15,599
1,420
16,382
12,647
610
29,374
65,738
13,468
15,865
4,341
3,101
28,963
63,335
11,533
11,507
22,444
15,033
2,818
26,265
7,317
5,754
16,056
13,207
9,924
14,047
599
218,807
269,018
251,616
8.9
21.3
16.0
32.2
100.0
(3.6)
5.9
(41.5)
(41.0)
(71.8)
(18.1)
5.7
(55.5)
33.5
8.3
(10.9)
2.9
>100
(39.4)
11.1
(1.8)
(6.5)
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 championing strong
vertical integration and sourcing the key inputs and materials from
domestic suppliers.
RUB 251.6 bln cost
of sales in 2023
−41.5%
lower raw material expenses
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report ADJUSTED EBITDA
Adjusted EBITDA in 2023 vs actual 2022, RUB bln
2023
Fertilizer prices
FX rates
Costs
Sales
2022
Adjusted EBITDA to adjusted FCF conversion in 2023, RUB bln
EBITDA
Adjustment
Working capital
Taxes paid
Advance payment towards the excess profit tax
Interest paid
OCF
ICF
FCF
In 2023, adjusted EBITDA declined
by 36.9 y-o-y to
RUB 168.4 bln
Adjusted EBITDA margin
for the reporting period came in at
38.2%
168.4
(222.4)
98.4
23.9
1.5
266.9
168.4
0.4
9.1
(29.8)
(6.4)
(7.4)
134.3
(64.1)
70.2
DEBT
Net debt as at 31 December 2023
increased y-o-y to RUB 223 bln.
Depreciation of the rouble against
the US dollar in 2023 and reassessment
of the Company’s foreign currency
debt using the year-end exchange
rate had a significant impact
on the RUB-denominated debt amount.
With a decline in EBITDA, the net debt /
adjusted EBITDA ratio increased to 1.33x
as at 31 December 2023 from 0.68x
a year earlier.
Loans and borrowings breakdown
by rate type as at 31 December
2023, %
Loans and borrowings breakdown
by currency as at 31 December
2023, %
83
17
fixed rate
floating rate
19
1
48
32
RUB-denominated
EUR-denominated
USD-denominated
CNY-denominated
Debt maturity profile, RUB bln
Our commitment
to maintaining high credit
quality and ensuring
timely debt servicing
continues to be a priority
for the Company.
Item
2024
2025
2026
2027
2028
Total
Unsecured bank loans1
84.6
8.5
16.1
2.7
–
111.9
Bonds2
Interest payable
Total debt
–
1.8
44.8
45.2
–
–
–
–
44.8
134.8
–
1.8
86.4
53.3
61.3
2.7
44.8
248.5
ADJUSTED FREE CASH FLOW
In 2023, the Company’s adjusted free
cash flow exceeded RUB 70 bln, marking
a 50% decrease compared to 2022.
Capital investments (including
capitalised repairs) for the year
amounted to RUB 64 bln and were
mainly focused around completing
the construction of a large production
facility in Volkhov, developing the ore and
raw material base in Kirovsk, developing
production capacities in Balakovo, and
maintaining production facilities across
all process stages, from mining and
processing of raw materials to producing
finished products.
In 2023, the Company’s adjusted
free cash flow exceeded
RUB 70 bln,
marking a 50% decrease
compared to 2022.
86
87
TAX POLICY
GRI 3-3, 207-1, 207-2, 207-3
In 2023, the Board of Directors approved
a new version of PhosAgro’s Tax
Strategy. The 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).
Our approach to tax management,
participation in shaping government tax
policy, and organisational arrangements
pertaining to the exercise of tax
functions at PhosAgro is described
in the Company’s Tax Strategy.
The full text of the new version
of the Tax Strategy is available
on the Company’s website.
1 Debt amount under unsecured bank loans does not include the bank fee of RUB 6 mln.
2 Bond debt amount does not include the bank fee of RUB 355 mln
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
Country-by-country reporting, RUB mln
GRI 207-4
Tax jurisdiction
Unrelated party revenue
Revenue from intra-group
transactions with other tax
jurisdictions
Profit/(loss) before income tax
Income tax paid (cash basis)1
Income tax accrued2
Statutory tax rate3, %
Average headcount , people
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
Russian Federation
131,527
440,639
440,304
250,534
106,420
Switzerland
221,961
96,268
-
-
14,916
8,088
10,423
7,446
15,833
7,045
4,752
2,020
9,838
1,598
4,681
4,050
6,452
2,343
105
-
-
29
-
-
-
-
-
-
-
-
-
-
-
-
-
-
63,188
27,436
8
-
-
-
4
-
-
-
230
58
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,877
157,360
114,603
28,471
41,393
36,132
29,875
39,932
34,527
20.00
20.00
20.00
18,198
19,846
21,839
112,008
57,850
(598)
(4,243)
7,253
4,943
6,381
5,242
10,887
5,541
2,060
1,063
5,075
1,038
1,213
1,916
4,046
1,643
(7)
(86)
(55)
(2)
(42)
(13)
-
-
-
-
-
-
-
-
-
-
-
-
137
-
59
7
-
(1)
28
5
79
12
(5)
13
331
2
48
2
5
1
26
-
-
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
742
-
84
60
93
89
31
6
85
12
(5)
-
764
2
235
129
94
65
-
63
174
3
4
-
-
-
-
-
-
-
-
-
-
-
-
-
12.05
12.05
12.50
19.00
12.50
19.00
32.27
32.27
26.50
25.00
15.00
15.00
16.00
15.00
15.00
16.00
28.00
28.00
20.00
20.00
34.00
34.00
17.00
17.00
–
–
–
–
–
–
–
–
–
–
–
–
32
28
15
7
6
12
4
5
2
1
7
3
36
30
15
7
6
14
4
7
2
1
7
3
-
-
-
-
-
-
-
-
-
-
-
-
420,488 569,527 440,304
313,961
133,918
0 160,055
232,297
114,603
28,806
41,811
36,132
31,073
41,465
34,527
Cyprus
Poland
Germany
France
Serbia
Lithuania
Romania
South Africa
Finland
Brazil
Singapore
Total
Tax jurisdiction
Tangible assets other than
cash and cash equivalents
Total employee remuneration
Intra-group loans received
Russian Federation
274,386
320,961
367,857
34,039
55,318
53,745
67,069
103,233
137,911
2021
2022
2023
2021
2022
2023
2021
2022
2023
Switzerland
Cyprus
Poland
Germany
France
Serbia
Lithuania
Romania
South Africa
Finland
Brazil
Singapore
Total
4,725
14
1,705
466
578
1,443
7
1,019
338
677
2
7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,723
528
201
121
97
85
54
67
25
18
8
58
25
57
55
33
58
28
20
14
10
2
32
8
-
-
-
-
-
-
-
-
-
-
-
-
-
2,237
-
-
-
337
-
-
502
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
285,368 320,961
367,857
36,522
56,163
53,745
70,146 103,233
137,911
The Company’s income tax rate
in 2021-2023 was
20%
For the list of tax jurisdictions
where the entities included
in the Group’s consolidated
financial statements
are resident for tax purposes,
and the details of taxes
payable in each jurisdiction,
please see page 378.
1
Income tax paid includes windfall tax security payment in the amount of RUB 6,355 mln.
2 Tax rates effective in any given jurisdiction apply to profit/loss before income tax. Reasons for the difference between corporate income tax
accrued on profit/loss and the tax due if the statutory tax rate is applied to profit/loss before tax are as follows:
– intercompany transactions elimination;
– provisions accrued in accordance with IFRS (mostly allowance for expected credit losses);
– reduction in tax rate for certain Russian;
– foreign entities items which are not deductible or assessable for taxation purposes;
– other differences (including the 2023 excess profit tax in the amount of RUB 6,355 mln).
3 For the Russian tax jurisdiction, an average statutory tax rate is used.
88
89
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report OPERATIONAL
PERFORMANCE
fertilizers saw an even slightly more
rapid increment, with a 2.3% yearly
rise to 2.6 mt. Our nimble response
to shifts in market demand continued,
with adjustments made to our
production and logistics workflows
to accommodate changing consumer
needs. In 2023, PhosAgro’s output
of DAP/MAP surged by 8.4%, ammonium
nitrate by 4.4%, and APP by a whopping
75.2%. That said, we marginally
curtailed the production of NPK and
NPS fertilizers to most effectively
align with the market environment and
thereby maximise the profitability of our
manufacturing and sales activities.
The boost in output and product
shipments to our customers
was comprehensively backed
by the relevant upscale in chemical
feedstock production (chiefly sulphuric
and phosphoric acid), where we also
achieved a 2% increase in volumes
compared to 2022.
2023 marked another year
of record-breaking production
and sales for PhosAgro.
We manufactured 11.3 mt
of agrochemicals and supplied 11.1
mt to our customers. Both figures
demonstrate an increase of about
2% over our 2022 successes.
Production of phosphate-based
fertilizers escalated to 8.4 mt (up
2% y-o-y), and nitrogen-based
Alexander Gilgenberg
General Director of Apatit
90
91
But there is one thing that stands
out as a source of particular pride.
The Company perpetually refines
its corporate occupational safety
culture, engaging in daily efforts
to improve working conditions and
elevate the safety of our manufacturing
processes. We are proud to highlight the
significant achievement of completing
the year 2023 without any major
incidents, including accidents and fires.
11,3 mt
of agrochemical products
manufactured
8,4 mt
of phosphate-based fertilizers and
feed phosphates produced in 2023
+2.0% y-o-y
2,6 mt
of nitrogen-based fertilizers
produced in 2023
+2.3% y-o-y
PRODUCT PORTFOLIO
PHOSAGRO IS THE LARGEST PRODUCER OF LIQUID
NITROGEN-PHOSPHORUS FERTILIZERS IN RUSSIA
Mineral fertilizers
Industrial products
Nitrogen-phosphorus
and complex fertilizers
Nitrogen-phosphorus
and complex fertilizers
with micronutrients
Nitrogen-based
fertilizers
Liquid complex
fertilizer
ApaSil
OUR CUSTOMERS
are at the heart of our business.
Apagips/Technogips
In 2023, we diversified our product mix to encompass 58
grades, covering varied fertilizers, feeds, and other products
enjoying robust market demand. A significant portion of our
offering consists of newest fertilizer grades developed over
the past five years.
Concentrates
High-grade
phosphate rock
Syenite alkali
aluminium
concentrate
Nepheline
concentrate
Feed additives
Industrial phosphates
Feed grade urea
Sodium
tripolyphosphat
Feed grade
monocalcium phosphate
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report UPSTREAM AND DOWNSTREAM
UPSTREAM
SASB RT-CH-000.A
Kirovsk Branch of Apatit mines apatite-
nepheline ore at six fields of the Khibiny
deposits in 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 (including off-balance
reserves) at one of the world’s richest
and purest deposits is expected to last
for about 60 years.
PhosAgro Group’s ore reserves as at 1 January 2024
77.0%
of ore coming from open-pit
mining in 2023
39.2 mt
total apatite-nepheline ore
production in 2023
Deposit
Kukisvumchorr
Yukspor
Apatitovy Cirque
Rasvumchorr Plateau
Koashva
Njorkpahk
Total
At the close of 2023, reserves
at the Rasvumchorr Plateau saw
an augmentation attributable
to the allocation of reserves from
the unallocated area under licence
MUR 00892 TE. Conversely, for other
deposits, there was a decline in balance
reserves from the previous year, which
aligns with the extracted ore volumes.
Currently, the Company is shifting
its resource base development profile
from open-pit mining to a higher share
of underground mining. In the reporting
year, the share of open-pit mining came
in at 77%.
The total apatite-nepheline ore
production in 2023 nearly matched
the preceding year, with a marginal
decrease of less than 0.8% to 39.2 mt
from 39.5 mt in 2022.
A significant development in October
2023 was the launch of the second
start-up facility (Yukspor flank)
Balance reserves, kt
(A+B+C1+C2)
Average P2O5
content, %
335,180
447,413
79,900
351,883
249,922
52,729
1,517,027
14.12
13.76
13.58
12.06
17.28
14.25
14.03
at the Kirovsky mine, signifying
a milestone in the Construction of +10 m
level project. The effort involved roughly
2,000 specialists from more than 50
contractors. These were underground
works, melding bleeding-edge
technologies with exceptional technical
solutions, inclusive of ballastless railway
tracks and high-capacity rolling stock.
The crushing and delivery equipment
utilises durable materials and pioneering
technologies to extend useful life, while
state-of-the-art equipment bolstered
the productivity of the continuous
handling system for both
the Kukisvumchorr and Yukspor flanks.
The facility will help us compensate
for diminishing ore volumes and ramp
up ore production at the Kirovsky mine
to 25 mt per annum over the next
triennium, an 8.6% increment relative
to existing production figures. The total
investment earmarked for this project
is estimated at RUB 38.4 bln.
In 2023, the Company continued with
the investment project to construct
a new mine for the Rasvumchorr
Plateau deposit.
The project encompasses the
construction of two start-up facilities.
The first one at the +430 m level with a
4 mt capacity is set to commence ore
extraction in 2Q 2025. The second one
at the +310 m level is slated for launch
in 2031, with a maximum production
capacity of 6 mt by 2035. The total
capital investment for this venture is
estimated at roughly RUB 37.7 bln.
92
93
By year-end 2024, underground mining
is to begin within the Gakman block
of the Kirovsky mine’s Yukspor deposit.
On top of that, we remain committed
to the active implementation of our
sustainable development strategy. In
2023, the mining and processing plant
of Apatit consumed a total of 300 million
kWh of green electricity. The share of its
output produced using green electricity
generated by the hydroelectric power
plants of TGC-1 increased to 18.1%.
18,1%
the shape of its output produced using
green electricity generated by the
hydroelectric power plants of TGС
CHEMICAL PRODUCTION
FEEDSTOCK
Production volume, kt
Item
Ammonia
Phosphoric acid
Sulphuric acid
Ammonium sulphate
Total
8,6 mt
of ore total production at the
Vostochny mine in 2023
The Company proceeded
with its Vostochny mine
development project seeking
to intensify open-pit mining.
In 2023, the project boosted
the Vostochny mine’s production
capacity to 8.6 mt of ore
annually. The target to further
develop and increase the
Vostochny mine’s production
was revised to 9.5 mt by 2027,
as outlined in the updated
Programme for the Development
of the Ore and Raw Material Base
of Apatit’s Kirovsk Branch for
2019–2035.
2021
2022
2023
Δ 2023/2022,%
1,931.10
1,985.30
1,982.80
2,952.00
3,199.40
3,345.30
7,352.20
7,920.20
8,120.00
259.00
322.60
260.20
12,494.30
13,427.60
13,708.30
–0.13
4.6
2.5
–19.3
2.1
In 2023, the production
of phosphoric acid, the key feedstock
used in phosphate fertilizers, reached
3.3 mt, increasing
by 4.6% y-o-y on the back of earlier
production unit upgrades and
increased equipment utilisation
efficiency.
In 2023, sulphuric acid production
was up by 2.5% y-o-y to
8.1 mt.
This was fuelled by greater efficiency
of sulphuric acid production
in Cherepovets and the launch
of a new sulphuric acid facility
in Balakovo in late 2023.
Ammonia output was virtually flat
y-o-y at nearly 2 mt.
The decline in ammonium sulphate
output in 2023 can be attributed
to the scaled-down production
of NPS grades in line with the market
environment.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report PHOSPHATE-BASED FERTILIZERS
The year of 2023 saw a 2% annual
increase in phosphate fertilizer
production, reaching close to 8.4 mt,
bolstered by elevated outputs of both
phosphoric and sulphuric acids, with
ammonia production maintaining
high levels.
Production of primary DAP/MAP fertilizer
grades rose by 8.4%, setting a new
record of over 4.5 mt. Of special note,
MAP output surge by 12.9% y-o-y came,
among other things, from the new
production facility in Volkhov, erected
as part of the Company’s long-term
development programme.
8.4 mt
of phosphate fertilizers and feed
phosphates produced in 2023
In response to market demands,
interchangeable NPS, NPK, and APP
phosphate fertilizers varied as follows
in 2023: a 19.6% decline in NPS
production and a 3.5% reduction
in NPK output, whereas APP production
remarkably soared by 75.2%.
+2.0% y-o-y
>4.5 mt
production of primary DAP/MAP
fertilizer grades in 2023
+8.4% y-o-y
Phosphate-based fertilizers production, kt
Item
DAP/MAP
NPK
NPS
APP
MCP
PKS
Total
2021
2022
2023
Δ 2023/2022,%
3,610.7
4,191.9
4,545.0
3,111.3
2,553.8
2,463.8
561.6
208.6
390.6
10.8
1,003.1
114.0
361.6
–
806.9
199.7
373.3
–
7,893.6
8,224.4
8,388.7
8.4
–3.5
–19.6
75.2
3.2
–
2.0
NITROGEN-BASED FERTILIZERS
In 2023, production in the nitrogen
segment went up by 2.3% y-o-y
to 2.6 mt. Production of granulated
ammonium sulphate, urea, and
ammonium nitrate gained 1.3%, 1.6%,
and over 4%, respectively.
2.6 mt
production in the nitrogen segment
in 2023
+2.3% y-o-y
Nitrogen-based fertilizers production, kt
Item
Ammonium nitrate
Urea
Ammonium sulphate
Total
2021
694.8
2022
693.0
2023
723.4
1,643.2
1,688.2
1,714.4
74.1
165.4
167.5
2,412.1
2,546.6
2,605.3
Δ 2023/2022,%
4.4
1.6
1.3
2.3
OTHER PRODUCTS
Output of other marketable products,
which primarily includes sodium
tripolyphosphate and sodium
silicofluoride, amounted to 286 kt,
down 5.2% y-o-y.
SALES
8.6 mt
of phosphate-based fertilizers and
feed phosphates sold by PhosAgro
Group in 2023
+2.1% y-o-y
11.1 mt
total fertilizer and feed phosphates
sold by PhosAgro Group in 2023
+1.7% y-o-y
In 2023, PhosAgro Group increased
total fertilizer and feed phosphate sales
by 1.7% y-o-y to hit an all-time high
of 11.1 mt.
We were able to meet the growing
demand by boosting MAP production
in 2022 after launching a new facility
at the Volkhov site.
Sales of phosphate-based fertilizers
amounted to 8.6 mt, up 2.1% y-o-y.
The increases came on the back
of strong demand for these fertilizers
in the Latin America markets.
In the nitrogen segment, sales were up
by 0.4% y-o-y, due to a high seasonal
demand and the availability of fertilizers
for end users.
Within the Russian market, a focal point
for PhosAgro Group, deliveries saw a 12%
increase, equivalent to an additional
0.2 mt. This uptick was instrumental
in boosting the total sales figures
for 2023 by 1.7%.
Sales by key product, kt
Item
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
Other1
Total other products
2021
2022
2023
Δ 2023/2022,%
3,564.5
3,011.1
566.8
206.3
405.2
8.5
4,272.2
2,660.7
1,008.8
111.6
349.5
–
4,503.6
2,696.0
803.9
198.1
376.6
–
7,762.4
8,402.8
8,578.2
798.0
1,616.3
80.2
661.6
1,741.8
147.4
2,494.5
2,550.8
10,256.9
10,953.6
94.4
133.0
227.4
48.6
130.9
179.5
688.3
1,698.5
173.7
2,560.5
11,138.7
61.7
153.1
214.8
5.4
1.3
–20.3
77.5
7.8
–
2.1
4.0
–2.5
17.8
0.4
1.7
27.0
17.0
19.7
94
95
1 The portfolio of other products expanded in 2023 to incorporate aluminium fluoride, sulphuric acid, phosphoric acid, sodium silicofluoride, and
aluminium sulphate. Sales of these new products for both 2021 and 2022 have been retrospectively adjusted to reflect this change.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report CUSTOMERS
AND PRODUCT MANAGEMENT
AREA, STRATEGIC GOALS AND HIGHLIGHTS OF 2023
1
Compliance with the requirements applied to mineral fertilizers
2
Mineral fertilizer consumer surveys
Promoting the responsible and rational use of mineral fertilizers, i.e. green agriculture, and
providing expert support to agricultural producers and advancing a customised product offering
Establishing business partnerships built on mutual trust and respect, and ensuring a shared
understanding of obligations and expectations from the partnership
Target
17.16 and
17.17
l
a
o
G
In 2023, the Company joined a pilot project
launched by the Russian Ministry of Industry
and Trade to validate project results,
and completed an initiative to assess the
chemical footprint of its products.
Expansion of certification coverage:
• Green One
• Vitality Leaf
• Green Label
• Brazil’s Environmental Quality Label
Consumers gave a high score to the staff
performance (promptness of request
handling and quality of support and
consultations), with a degree of consumer
satisfaction standing at —
l
a
u
t
c
A
96%
30%
of survey respondents pointed out that
PhosAgro products accounted for the
largest share of mineral fertilizers used
at their farms.
Target
2.4, 17.16
and 17.17
l
a
o
G
l
a
u
t
c
A
96
97
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report STRATEGY
The COVID-19 pandemic, geopolitical
turmoil, climate change, and
increasing inequality are just some
of the challenges faced by the world
over the recent years. Food security
remains one of the most pressing issues,
including producing sufficient amount
of quality and safe food accessible to all.
In this context, we carry out PhosAgro’s
strategic and globally important mission
of supplying safe and eco-friendly
fertilizers for the agricultural industry
to ensure food security in Russia and
across the world.
We believe that tackling global
problems is only possible through open
dialogue, cooperation, and building
synergies between all stakeholders.
This approach is at the heart of our
interaction with customers.
We are committed to the 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.
To provide consumers with safe, eco-friendly, and quality innovative products and services,
the Company’s Strategy to 2025 has identified the following focus areas that reflect consumer
needs regarding product innovations and new digital services:
Developing innovative products
that meet customer requirements
and enable farming with
due consideration of environmental
factors, soil and crop requirements,
the climate agenda and the need
to reduce greenhouse gas emissions
in the value chain
Enhancing PhosAgro’s competitive
strengths as one of the world’s
leading suppliers of eco-friendly
phosphate fertilizers for farmers
Expanding PhosAgro Group’s
involvement in programmes
to protect human health and
the environment, ensure food
security and combat soil degradation
Advancing digital technology
in agriculture to boost crop yields
and quality in the near term, including
by raising consumer awareness
of innovations in agricultural production
Developing circular economy
and increasing rates of recycling,
including the use of by-products from
PhosAgro Group’s facilities
MANAGEMENT APPROACH
GRI 3-3
An open dialogue with customers
helps us understand their expectations
and requirements for our products,
services and the management system,
as well as their vision of future products.
This valuable information creates a solid
foundation for the Company’s further
strategic growth and new product
development.
PhosAgro Group’s
responsible production
management framework
is based on the following
principles:
• compliance with Russian and
international standards and
regulations;
• accurate traceability
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;
• open dialogue with
stakeholders regarding their
expectations and satisfaction
with the Group’s products
and services;
• integration of the production
management, quality
management, and HSE
management systems.
PhosAgro Group’s vertically integrated
business model is a competitive
advantage. PhosAgro’s upstream
assets benefit from extensive and
high-quality resource base boasting
unmatched purity. Our production
facilities are located close to key
mineral resources used as feedstock
for fertilizers and other products.
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.
PRODUCT MANAGEMENT FRAMEWORK
• Regulations and other
requirements
• Expectations of stakeholders
• PhosAgro’s strategic initiatives,
cooperation and joint research
projects with R&D institutes
• 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
• Marketing products meeting
customer requirements
• Taking into account customer
feedback
• Information support
• Digital services for customers
98
99
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report for internal control and support
of the quality and environmental
management systems, integrating
requirements into processes,
performing internal audits,
implementing targeted initiatives,
updating records, and collecting and
providing input data for review by top
management.
Every year, PhosAgro Group facilities
undergo external compliance
reviews by certification authorities
in order to ensure the Company’s
compliance with international and
national standards for quality and HSE
management.
Development of products
and manufacturing processes
is implemented in partnership with
Samoilov Scientific Research Institute
for Fertilizers and Insectofungicides
(NIUIF), Russia’s only institute
specialising in this area.
PhosAgro Group’s quality
management framework defines
interlinked processes that ensure
compliance of the product safety,
quality and eco-friendliness criteria
with stakeholder requirements and
expectations throughout the product
life cycle to conform to the stringent
quality requirements for the end
product, from ore and material
selection to the supplies of products
to end consumers.
All processes are monitored,
measured, analysed and managed
to ensure continuous improvement
of the quality of specific processes
and the framework at large and
to meet the needs and expectations
of stakeholders, above all consumers.
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.
To support quality and HSE
management, PhosAgro facilities have
designated functions responsible
System for planning and
defining criteria for product
development
Planning is an important element
of PhosAgro Group’s product
management framework.
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;
market expectations,
requirements and trends;
regulatory requirements
applicable to activities and
products;
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 SDGs.
100
101
RISKS AND OPPORTUNITIES
The Company has a risk management system in place to identify and mitigate
product related risks in cooperation with customers. This system, among other
things, covers product related risks. The following strategic risks, in particular, affect
our product and customer related objectives
7
environmental
risk
9
risk related
to business processes
and systems
13
regulatory risk
For more information, see the Strategic Risks section,
page 68
RISKS SPECIFIC TO THE GROUP’S OPERATIONS INCLUDE:
The Company develops
the necessary corrective measures
and unlocks opportunities,
including voluntary certification,
to mitigate those risks. Below you
can find more information about
what we do on this front.
risks associated with chemicals
management and regulatory
requirements for product safety;
risks associated with customer
satisfaction;
risks associated with ensuring
ethical research and production
principles.
1
COMPLIANCE WITH THE REQUIREMENTS APPLIED
TO MINERAL FERTILIZERS
REGULATORY ENVIRONMENT
AND MANAGEMENT OF RISKS
ASSOCIATED WITH CHEMICALS
PhosAgro Group facilities ensure
timely receipt of all necessary licences
for their activities to strengthen public
confidence in the safety of their
operations and products. All types
of fertilizers are registered in Russia.
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 Group’s
mineral fertilizers registered in Russia
passed a mandatory examination
for compliance:
• toxicological and hygienic –
in Erisman Federal Research
Centre of Hygiene;
• biological – in Pryanishnikov
Institute of Agrochemistry;
• environmental – in the Federal
Service for Supervision of Natural
Resources (Rosprirodnadzor)
and Lomonosov Moscow State
University;
• sanitary and epidemiological
standards – in Rospotrebnadzor.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report We are committed to the ethical
principles of animal welfare and seek
to avoid using animals for research.
In 2021, we revised our Code of Ethics
to state our position on this matter.
In line with the Code of Ethics,
PhosAgro Group 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.
Currently, 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.
FOREIGN REGULATIONS AND
CERTAIN REQUIREMENTS APPLIED
TO MINERAL FERTILIZERS
BY THE EUROPEAN UNION
PhosAgro Group’s products exported
to EU customers have been
registered pursuant to Regulation (EC)
No. 1907/2006 concerning
the Registration, Evaluation and
Authorisation of Chemicals (REACH).
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 the above Regulation,
Apatit’s products contain no
substances which are subject
to restrictions on their sales
in the European Union.
We produce ammonium nitrate (AN)
CAS 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
I and Annex IV to Regulation
(EU) 2019/1009 of the European
Parliament and of the Council.
To assess conformity, 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 I and Annex IV of Regulation
(EU) 2019/1009.
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 No. 1907/2006.
The quality and safety of mineral
fertilizers produced by the Company
is confirmed by state registration
certificates, declarations
of conformity, and safety data
sheets. According to expert
reviews, new fertilizer grades
of PhosAgro Group are effective and
environmentally and toxicologically
safe.
The products are properly
classified, labelled and packaged
in accordance with Regulation
(EC) No. 1272/2008 (Classification,
Labelling and Packaging Regulation,
CLP Regulation) and Regulation (ЕU)
2019/1009. All types of manufactured
fertilizers have safety data sheets
(SDS).
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
(Fertilizing Products Regulation,
FPR) on fertilizers, establishing
new EU-wide rules for CE-marked
fertilizers (also known as EU Fertilizing
Products). 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 the 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 no more than 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 than required
in the EU, which is reflected in our
product slogan: pure minerals
for healthy lives.
In 2022, in line with Regulation
(EU) 2019/1009, Apatit’s mineral
fertilizers were successfully certified
by an independent notified body
in the area of fertilizer certification
in the EU, making it possible
for the fertilizers to be CE-marked.
Pursuant to the Turkish Regulation on
Registration, Evaluation, Authorisation
and Restriction of Chemicals (KKDIK),
the work was initiated in the reporting
year to register chemicals imported
to the Republic of Turkey as individual
substances and their mixtures.
Voluntary ESG certification of products
GRI 2-28, 417-1
All agrochemicals of PhosAgro
Group have been certified under
the GOST R 58658–2019 national
standard, which has introduced
the world’s most rigorous limits
on heavy metal and arsenic
content, allowing the Company
to use the Green One eco-label.
On top of that, the Company
has a certificate under
the Ecological Union’s Vitality
Leaf standard and the right
to use the internationally
recognised eco-label
on its products.
Also, the Company made a Green
Label environmental claim,
asserting that the Group’s products
are free from dangerous cadmium
concentrations capable of harming
soils.
In addition, 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.
In 2023, annual inspection
audits confirmed the Company’s
certificates. Independent
assessment results
are a testament to the unique
eco-friendliness of PhosAgro
Group’s products.
102
103
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report In 2023, PhosAgro took part
in evaluation of the results of a flagship
pilot project initiated by the Russian
Ministry of Industry and Trade in 2021
to prevent adverse effects of cross-
border handling of Russian chemical
products, and ran a comprehensive
project to assess the chemical footprint
of products. The evaluation exercise
sought to determine the baseline
chemical footprint of products and
define opportunities to reduce it.
In order to test the viability of proposed
regulatory mechanisms in chemical
safety, among other things state
registration of chemical substances
and their mixtures to introduce them
to the Russian market, the Company’s
employees took part in a business
game organised by the Russian
Ministry of Industry and Trade
and the Committee for Industrial
Policy and Technical Regulation
of the Russian Union of Industrialists
and Entrepreneurs.
In 2023, a procedure of obtaining
state registration was completed
for 16 grades of fertilizers
including three new ones:
• nitrogen-phosphorus-
potassium-sulphur fertilizer
NPK(S) 12-15-21(8) grade;
• sulphur-containing nitrogen-
phosphorus fertilizer
NP+S=19:20+14 grade;
• sulphur-containing nitrogen-
phosphorus fertilizer
NP+S=20:16+16 grade.
In 2023, PhosAgro underwent
an audit to confirm its certificates
of compliance with ISO 9001
(GOST R ISO 9001:2015), ISO 14001,
and ISО 45001:
• ISO 9001:2015
(link to certificate ISO 9001
(22.2210.026), link
to IAF-accredited certificate
ISO 9001 (IAF));
• GOST R ISO 9001:2015
(link to certificate GOST R
ISO 9001 (22.2213.026);
• ISO 14001:2015
(link to certificate ISO 14001
(22.2211.026), link
to IAF-accredited certificate
ISO 14001 (IAF));
• ISO 45001:2018
(link to certificate ISO 45001
(21.1584.026) AP-Ch, link
to IAF-accredited certificate
ISO 45001 (IAF)).
The Company also confirmed
its compliance with the national
HACCP standard (GOST R
51705.1-2001) and new requirements
of the GMP+ international standard
with the transition to the new
104
105
GMP+ FC scheme 2020 for feed
certification. Having the GMP+FC
2020 and НАССР (GOST R
51705.1-2001) certificates authorises
production and sale of feed
additives in Russia, CIS, and EU:
• GMP+ R1.0
(link to certificate
EN RUNR_000255_
GenericCertificateGmpPlusFsc_
Final);
• НАССР (GOST R 51705.1-2001)
(link to certificate HACCP).
In 2023, a new popular
grade – the NP+S=16:20+14
sulphur-containing nitrogen-
phosphorus fertilizer – was certified
for the Brazilian market.
To enable supplies of packaged
fertilizers, the Company confirmed
the compliance of its packaging
with the ABNT NBR 13230 national
standard.
The Brazilian standard contains
strict limits on levels of arsenic and
heavy metals, which PhosAgro
Group mineral fertilizers are fully
compliant with.
Throughout 2023, PhosAgro
Group maintained a strong focus
on activities that help make
information about the Company’s
products and services more
accessible for a wide range
of stakeholders. Customers
enjoy our digital services, which
are complementary to PhosAgro
Group’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. PhosAgro Innovation Centre
provided extensive expert support
to consumers during the year.
In 2022, the Company’s products
obtained Brazil’s Environmental
Quality Label. As part of mutual
recognition of eco-labels,
Brazilian experts annually review
the life cycle of the Company’s
products, with a special focus
on conformity to requirements
for the production, storage and
transportation of fertilizers. This
comprehensive assessment
includes production,
environmental and social criteria,
such as:
energy efficiency and use
of recycled materials and energy
resources;
customer service in terms
of providing reliable information
on the properties and optimal use
of the mineral fertilizers.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report 2
MINERAL FERTILIZER CONSUMER SURVEYS
MINERAL FERTILIZER CONSUMER SURVEYS
46 %
of the respondents said that
the volume of fertilizers used in their
farming remained unchanged vs
2022
24 %
of the respondents said there
was an increase in fertilizer usage
29 %
of the respondents said they
started using more fertilizers
1 %
were undecided
In 2023, we held two large-scale surveys
of consumer opinion.
Between October and December
2023, we polled market players
in the agribusiness sector across all
agricultural regions of Russia. To do
that, we conducted a total of 400
surveys. To ensure greater coverage and
impartiality, we engaged an independent
polling agency to conduct the survey.
The exercise was aimed at exploring
customer awareness and preferences,
as regards key players in the mineral
fertilizer market. The survey also looked
into changes in the way customers
106
107
30%
of the respondents said that
PhosAgro products make up
the majority of mineral fertilizers
used in their farms.
The most common reasons cited
by the respondents were
32 %
attractive prices
28 %
strong quality
18 %
high crop yields
18 %
positive prior experience
SERVICES USED
BY THE SURVEY
RESPONDENTS:
55 %
Website of the Company
(fertilizer manufacturer)
used the products and perceived
environmental labels, as well as into
the popularity of new products,
such as ameliorants and anti-stress
agents. As part of the survey, we also
analysed customer opinion and
preferences regarding products and
services of PhosAgro as compared
to peers. The survey showed that 75%
of the respondents either increased their
use of fertilizers or kept it on the same
level.
According to the survey, consumers
prefer PhosAgro products to all other
fertilizers available in the market.
More than one half of those surveyed
associate the PhosAgro brand with
high quality of products. The key
brand attributes for PhosAgro listed
by respondents included “best known
Russian producer”, “good reputation
and reliable partner”, and “socially
responsible company”.
The survey demonstrated high
awareness of green labelling. 53%
of the respondents are aware of green
labels, with the Vitality Leaf and Green
One labels known to 38% and 35%
of the respondents respectively.
We pay special attention to awareness
raising efforts and do our best
to communicate all the necessary
information about our products and
their proper and safe use. To that
end, the survey emphasised the use
of digital services and sources
of information that consumers rely on.
The results showed that the Company’s
website and educational videos
on YouTube and in social media
remain the key sources of information.
Respondents also said that they
were making active use of our Agro
Calculator.
45 %
Educational videos on YouTube and social
media
36 %
Agro Calculator (calculation of nutrient
application rates and advice on fertilizer
selection)
36 %
Agronomic advice
35 %
Agro service mobile app
36 %
Training (including online)
35 %
Online fertilizer purchase services
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report SATISFACTION OF THE COMPANY’S CONSUMERS
Degree of consumer satisfaction by criterion
Customer satisfaction was assessed across the following indicators:
Criteria
Domestic
sales
Satisfaction with
quality
Satisfaction with
packaging
Satisfaction with
product range
Performance
of PhosAgro's staff
Total
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
4.93
4.85
4.78
4.93
4.89
4.86
4.87
4.37
4.59
4.73
4.93
4.79
4.87
4.76
4.76
99%
97%
96%
99%
98%
97%
97%
87%
92%
95%
99%
96% 98% 95%
95%
quality of the products
supplied;
product range;
Сontinue to receive high scores from customers
packaging (design, durability,
moisture protection);
performance of PhosAgro’s
staff in terms of promptness
of request handling and quality
of support and consultations.
96 %
product’s
quality
92 %
packaging
96 %
staff
performance
Customer satisfaction by criterion is shown on the charts below.
Quality (composition:
nutrients) %
Quality (grain-size composition,
dusting, caking), %
83
17
score 5
score 4
72
24
4
score 5
score 4
score 3
Packaging (design,
durability, moisture
protection), %
Performance of PhosAgro’s
staff (quality of support and
consultations), %
Product
range, %
73
24
3
score 5
score 4
score 3
83
11
6
score 5
score 4
score 3
65
23
11
1
score 5
score 4
score 3
score 2
The survey showed that customers
gave a high appraisal of Apatit’s
products using the above criteria. Most
of the customers praise the Company’s
excellent product quality, timely supplies,
and strong skills of the staff responsible
for support and consultations.
Summarised data of customer
satisfaction monitoring for Apatit in 2023
showed that the average satisfaction
rate was 95%, confirming a high level
of satisfaction.
Ensuring customer satisfaction
is key for the Company’s operations.
To identify existing and potential
expectations of our customers, we use
a dedicated questionnaire.
The data obtained serves as the basis
for the annual assessment of customer
satisfaction. For 2023, PhosAgro
polled its Russian customers
using a questionnaire on Yandex
Forms, which focused on customer
satisfaction aspects.
With the questionnaire, we obtained
a qualitative assessment of consumer
satisfaction on a scale from 1 (not
satisfied at all) to 5 (completely
satisfied). Additionally, the
questionnaire assessed the degree of
importance of each specific parameter
for the customers purchasing mineral
fertilizers, also on a scale from 1 (not
important at all) to 5 (very important).
Customer satisfaction was assessed
using the following criteria: product
quality, packaging (design, durability,
moisture protection), product
range, performance of PhosAgro’s
staff in terms of prompt handling
of requests and quality of support and
consultations.
The 2023 customer satisfaction level
is shown in comparison to the 2022
and 2021 levels. The average score
for each criteria was converted
to percentages, assuming that 5
is the highest possible score and taking
into account the importance of each
criterion when purchasing mineral
fertilizers.
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APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report RESEARCH
AND EDUCATION
AREA, STRATEGIC GOALS AND METRICS
1
Improvement of production processes
3
Application improvement
High-quality and eco-friendliness of our products, including a process for the development of new
products that respects safety and the environment throughout its life cycle
The Balakovo branch developed
and implemented a process for the
conversion of phosphogypsum and
fluosilicate acid to obtain highly
demanded products
Development of an energy-saving
technology for the production of complex
granular fertilizers
(NPKS/NPK/NPS/NP)
l
a
o
G
l
a
u
t
c
A
Target
13.1 and 13.2
l
a
o
G
l
a
u
t
c
A
Soil safety, biodiversity conservation, fertility growth and lower GHG emissions in production and
throughout the product’s life cycle: from mine to plate
Research into an integrated
approach to plant nutrition
and N2O emissions
in a grain-grass crop rotation
PhosAgro Group’s carbon
farm project in the Vologda
region (13.4 kt of CO2-eq.
– volume of carbon dioxide
absorbed by plant biomass
per 200 ha over two years)
Cutting-edge biologised
adaptive plant nutrition
systems
2
Improvement of the product mix
Promotion of sustainable farming practices, development of new fertilizer grades for increased
availability of best practices in farming
Development
of biologised
fertilizers and
probiotic feed
additives
Sales of a new
product – ApaSil
Development of a construction investment
project for the production of feed
phosphates and food grade technical
orthophosphoric acid
l
a
o
G
l
a
u
t
c
A
Target
15.1
Target
4.4
Target
17.16
and 17.17
4
Cooperation with universities and Russian and international R&D centres
Implementation of a comprehensive phased programme to support sustainable agricultural practices
and support young scholars in running sustainable development projects
Cooperation across
a range of areas related
to the climate agenda
A project to run cooperation
programmes with
universities
Cooperation with R&D
centres to develop new
products and ways
of application
l
a
o
G
l
a
u
t
c
A
Target
12.4
Target
2.4
110
111
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report STRATEGY
The Company’s innovations in fertilizer
production are a sustainable
development driver in agriculture
and make a meaningful contribution
to strengthening cooperation for food
security.
PhosAgro Group seeks to ensure
efficient and safe agricultural
production and develops innovative
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.
MANAGEMENT APPROACH
GRI 3-3
Our innovation, product development,
and research and education
management system is seamlessly
integrated into the overall
management framework covering all
Company processes.
PhosAgro Group runs the Samoilov
Scientific Research Institute
for Fertilizers and Insectofungicides
(NIUIF), Russia’s only institute
specialising in this area.
PhosAgro Innovation Centre
was established in 2018 to create
cutting-edge products and
112
113
fertilizers while also working hard
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.
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.
technologies in partnership with
research institutions in Russia and
abroad. The NIUIF and PhosAgro
Innovation Centre bring together
world-class researchers, engineers,
and experts from various areas
to address the most complex
operational issues as well as applied
and fundamental research problems.
The Group actively cooperates
with the Ministry of Agriculture,
the Russian Academy of Sciences,
federal research centres, universities,
innovation funds, and international
R&D organisations (University
of Belgrade and Brazil’s Federal
University of Lavras), along with
recognised international organisations
with a view to providing broad support
to humanitarian and research-
intensive projects.
Research and education fall
within the remit of the Technical
Development Department and
are discussed at the meetings
of the Strategy and Sustainable
Development Committee of the Board
of Directors. These matters
are subject to an annual review
by the Board of Directors.
RISKS AND OPPORTUNITIES
Among other things, the following strategic risks affect our research and
educational objectives:
7
environmental risk
13
regulatory risk
19
climate risk
For more information, see the Strategic Risks section
on page 68
RISKS SPECIFIC TO THE COMPANY’S OPERATIONS:
The Group develops corrective
measures as necessary and
unlocks opportunities, including
import substitution, to mitigate
those risks. Below you can find
more information about what
we do on this front.
Non-compliance of products’
manufacturing process
and their use with carbon
footprint standards and other
environmental requirements
Insufficient efficiency of resource
use
Lack of awareness about
the Company’s products and
services, coupled with the level
of expertise prevailing among
agricultural professionals both
in Russia and abroad
Non-alignment of plant nutrition
systems with specific farming
conditions
Insufficient environmental
friendliness of production
processes
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report KEY INITIATIVES IN 2023
Investments in R&D activities and
development of new products,
RUB mln
‘23
‘22
‘21
2,481.3
2,026.3
1,416.8
1
IMPROVEMENT OF PRODUCTION PROCESSES
Improvement of ore extraction and
processing
In 2023, to enable the mining
of a block pillar under the Saami
pit (Murmansk region), a project
was developed to divert the Gakman
and Loparskaya rivers. The project
provides for the establishment
of a group of hydraulic structures
and is aimed at preventing the risk
of river pollution when developing
new deposits, which is aligned with
the principles of environmental
responsibility and commitment to look
for optimal approaches in terms
of environmental and technical safety.
The Company’s team developed and
agreed with regulatory authorities
(state environmental review and
state expert review) the design
documents for the facilities required
to divert the Gakman River; similar
design documents for the Loparskaya
River are pending approval from
the regulators.
which provides for a diversified use
of coolants at the main ventilation and
hot-air heating unit. The use of liquefied
natural gas at the Rasvumchorrsky mine
will help reduce emissions of pollutants
and GHG.
Energy and elements of circular
economy
Improving the efficiency of using
resources, including water, and
increasing the energy efficiency
of production processes are crucial
tasks for PhosAgro.
In 2023, we implemented a project
to increase the hourly loads
of process systems by introducing
a set of measures to upgrade
the production of wet-process
phosphoric acid, which made
it possible to reduce consumption
of raw materials and energy resources
across industrial sites.
Apart from that, in order to increase
output, design documentation was put
together for the project to develop
the reserves of the Rasvumchorr Plateau
deposit through underground mining,
Measures were also put in place
to improve the reliability of ammonia
production units and units
No. 1, 2 and 3 of the Cherepovets site,
with recommendations developed
on how to improve the planning
efficiency considering major overhauls
amid an increase in working time.
In addition, the Balakovo site
is running a project to set up
an exhaust gas turbine to generate
its own electricity using waste energy
(sulphuric acid production steam).
The Company pays special
attention to the recycling
of waste and by-products and
remains on the lookout for new
opportunities to utilise them
as feedstock. During 2023, research
and engineering efforts were
completed for the Volkhov branch
to develop formulations of popular
NPS fertilizer grades and set up their
commercial production involving
the mother liquor (by-product)
of water-soluble MAP production.
The Balakovo branch developed
and implemented a process
for the conversion of phosphogypsum
and fluosilicate acid to obtain
a solution of ammonium sulphate
and technical calcium fluoride,
which makes it possible to utilise
the by-product of phosphoric acid
production.
During the year, the Volkhov
branch engaged in research
and engineering efforts
to develop technologies
and set up new production
facilities to make high-
grade phosphates, including
water-soluble phosphate
fertilizers (monoammonium
phosphate and monopotassium
phosphate) and feed
phosphates. PhosAgro also
developed measurement
methods for feed phosphates
and food grade phosphoric
acid.
2
IMPROVEMENT OF THE PRODUCT MIX
58 grades
of agrochemicals of all types:
PhosAgro Group’s product mix in 2023
PhosAgro Group’s product mix
comprised 58 grades of agrochemicals
of all types in 2023. By 2030,
the Company plans to gear up
for the introduction of 46 new own
products and 24 partner products,
which will include biological
decomposers of organic matter,
fertilizers, crop protection products;
mineral fertilizers with controlled and
prolonged release, liquid and solid
fertilizers with microelements; feed
additives with non-protein nitrogen
sources and biological components;
growth enhancers, adaptogens,
and amino acids. The overall
focus of these developments
is biologicalisation of agriculture and
reduction of the environmental impact
of chemicals in intensive farming,
which will bolster crop yields and
improved quality, while also mitigating
climatic and environmental impact.
To this end, the Company
is constantly exploring new solutions
for the manufacturing of popular
products, among other things
in response to the drive for import
substitution for some of the most
common products.
As part of our import substitution
efforts in 2023, we developed key
technical solutions to produce liquid
SO2. In addition, initial data was made
available for the construction
of a unit manufacturing food
grade and technical grade purified
phosphoric acid in the Volkhov
branch. The Company is also
working on an investment project
for a construction site for feed
phosphates and food grade
orthophosphoric acid.
The Company’s team proposed
a solution for the reconstruction
of the ammonia refrigeration cycle
in the third ammonia production line
at the Cherepovets site to increase
ammonia production in the warm
season.
On top of that, we developed
an energy-saving technology
for the production of complex
granular fertilizers (NPKS/NPK/NPS/
NP), which boasts high capacity per
unit and is designed for the upgrade
of existing and creation of new
production facilities at the Cherepovets
site and in the Balakovo branch
(for that, Russian patent
No. 2805234 was obtained).
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115
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report INNOVATIVE DEVELOPMENTS
OF JSC “NIUF”
Our long-standing efforts in the
development of sulphuric acid
production were recognised
in 2023, with the NIUIF team
nominated for the Russian
Government’s 2023 Award in
science and technology.
acid system with mega capacity of 1.1
mtpa of H2SO4 per year, or 3.3 kt
of H2SO4 per day.
This technology features extensive
reliance on Russian-made equipment,
which has already proven reliable
and delivering strong process
performance in existing sulphuric acid
systems.
• is fitted with simple and reliable
equipment;
• has an SO2 conversion rate
of 0.9980 and above;
• has a total SO3 absorption rate
of 0.9999;
• generates high-pressure steam
(40 atm) to produce electricity;
• has reserve capacity available.
In addition to certain technical
solutions contributing to project
reliability and operability
in a considerably wider range
of conditions as compared to foreign
peers, the new sulphuric acid
technology is based on a short,
environmentally friendly, and energy-
saving DCDA process. To name
its competitive advantages, the new
process scheme for sulphuric acid:
• quickly reaches design capacity;
• is reliable and easy to operate;
• guarantees minimal exhaust
of harmful gases into
the atmosphere;
• has minimum power consumption
levels;
Another major area of related efforts
is NIUIF’s R&D project run jointly
with the Kirovsk-based Geological
Institute of the Kola Science Centre
of the Russian Academy of Sciences
to identify natural diatomite in Russia
suitable for the domestic production
of high-performance vanadium
sulphuric acid catalysts. These efforts
bore fruit as the exploration team
discovered lake deposits of natural
diatomite on the Kola Peninsula, which
were deemed fit for obtaining high-
performance catalysts. Currently, NIUIF
is looking into options available to mine
and prepare diatomite for subsequent
use. Lake deposits have high-
quality reserves sufficient to sustain
production of catalysts for 40 years.
Since 2001, NIUIF, which is part
of Apatit, has developed, patented
and improved an intensive
domestic energy-saving and
eco-friendly technology to make
sulphuric acid from sulphur using
the Double Contact Double
Absorption (DCDA) method
(Russian patent No. 2201393
dated 18 September 2001,
Eurasian patent No. 028058 dated
10 March 2017). In 2001–2023,
Russian-made sulphuric acid
systems with high capacity per
unit were designed, built and put
into operation at facilities across
Russia and the CIS countries.
Lessons learnt from the operation
of sulphuric acid systems that
rely on our technology, combined
with actual levels of resource
consumption, production of power-
generating steam, and pollutant
emissions (which are in line with
both Russian and European BAT),
have proven the solution’s strong
competitive edge as compared
to technologies offered by leading
international engineering
companies.
Since 2018, Apatit’s sites have
faced the need to build sulphuric
acid systems of significantly
greater capacity, i.e. in excess
of 1 mtpa of H2SO4 per year.
As part of Russia’s focus on import
substitution, NIUIF leveraged
its track record in constructing
and operating domestic sulphuric
acid production systems and
developed a comprehensive
package of technical, design,
and engineering documentation
for the customer (Apatit) to erect
the first ever Russian sulphuric
116
117
DEVELOPMENT OF NEW FERTILIZERS
Development of biologised
fertilizers
In 2023, PhosAgro Group, together
with the Russian State Agrarian
University – Moscow Timiryazev
Agricultural Academy, conducted
second-year enhanced tests
of the impact of mineral fertilizers
and their biologised counterparts
on the carbon footprint of products.
The carbon footprint of crop
production includes nitrous oxide
emissions from soil resulting from
nitrogen conversion processes
in mineral and organic fertilizers,
as well as carbon emissions from
plant respiration, decomposition
of crop residues and straw, and
mineralisation of soil organic matter
(including humus). Thus, tests with
biologised counterparts at comparable
fertilizer doses demonstrated higher
crop yield per hectare and a smaller
carbon footprint per unit of agricultural
products.
The tests also helped obtain
data on actual GHG emissions vs
standard levels of soil nitrogen and
carbon loss. This data can be used
for the reduction of the carbon
footprint of agriculture and carbon
accumulation in soil, among other
things through the application of new
eco-friendly biologised mineral
fertilizers. On top of that, the tests
clearly showed that the rate of 1% set
in Russia for nitrogen losses induced
by mineral fertilizer application is
significantly overestimated.
In 2024, there are plans to clarify
the data available and to conduct
a detailed analysis of the processes
of nitrogen and carbon
transformations in soil in order
to achieve intensified accumulation
of humus in arable land.
N2O emission for various fertilizers at a nitrogen dose of 100 kg/ha in a spring barley test vs emission estimates assuming
a 1% nitrogen loss, and comparison of carbon footprint of 1 g of barley for biologised and non-biologised mineral
fertilizers
Emission
estimate,
N2O (1%), kg
of СО2-eq. per t
of fertilizer
Actual N2O
emission (1%),
kg of СО2-eq.
per t
of fertilizer
Actual vs estimate
ratio
Carbon footprint
of the product, kg
of СО2-eq. per t
of barley
Yield, c/ha
Bio / untreated
Sample
Control
Bio-MAP Bio-NP
12-52
MAP NP 12-52
Bio-NPK(S)
8-20-30(2)
NPK(S) 8:20:30(2)
Bio-NPK(S)
15-15-15(10)
NPK(S) 15:15:15(10)
Bio-urea bio-N
46.2
Urea N 46.2
Bio-DAP bio-NP
18-46
DAP NP 18:46
Bio-NPK(S)
10-26-26(2)
NPK(S) 10:26:26(2)
44.20
30.40
52.20
51.80
56.20
55.70
49.70
39.00
47.60
46.90
54.90
52.30
44.80
–
562
562
375
375
702
702
2,163
2,163
843
843
468
468
–
374
385
221
233
582
621
1,662
1,859
535
535
360
360
–
0.66
0.69
0.59
0.62
0.83
0.94
0.77
0.86
0.63
0.63
0.77
0.77
382
247
271
211
234
284
440
313
350
224
262
327
356
0.91
1.00
0.90
1.00
0.65
1.00
0.89
1.00
0.85
1.00
0.92
1.00
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report OTHER INNOVATIVE
PRODUCTS
Manufacturing and sales
of the new product – ApaSil
In 2023, the Company continued
to develop and sell products
with innovative features. As one
example, the ApaSil adaptogen
was placed on the market,
with over 5.1 t already supplied
to farmers. The product
is designed for seed pre-treatment
and foliar application on a wide
range of agricultural crops and
ornamental plants. Field trials
in different regions and on different
crops have shown that ApaSil
helps plants cope with the stresses
associated with drought and
diseases.
In 2023, the results of scientific
tests have been confirmed
by PhosAgro Group’s customers.
In 2024, the process method will
be patented, with plans to register
ApaSil in foreign markets.
Development of probiotic feed
additives
In 2023, PhosAgro teamed
up with the Skryabin Moscow
State Academy of Veterinary
Medicine and Biotechnology
to run an experiment on laboratory
animals to determine
the effectiveness of cutting-
edge probiotics against the main
pathogens that cause intestinal
diseases in the young stock of farm
animals. New MAP-based additives
will help improve the health and
productivity of animals while
reducing the intake of antibacterial
drugs. Initial results show that
animals demonstrated increased
survival when new additives were
used.
In 2024, prototypes of probiotic
feed additives are planned
to be tested on young cattle
in farm settings.
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119
3
APPLICATION IMPROVEMENT
Research as part of PhosAgro’s
carbon farm project in the Vologda
region
forests, and agricultural sites with
varying organomineral nutrition
regimes.
As part of a long-term climate action,
in 2022 the Company set up a carbon
farm to study CO2 compensation
and absorption of carbon emissions
by various ecosystems, as well as to test
hands-on solutions for establishing large-
scale carbon farms in agriculture and
forestry.
In the Cherepovets and Vologda regions,
in 2022 we set up 100 ha trial stations 100
km away from each other to study carbon
sequestration abilities of perennial forage
grasses cultivated in industrial conditions
using a variety of fertilization schemes.
In the Vologda region, forage grasses
are the basic crop with the greatest
GHG absorption potential.
The project’s priority objective
is to accumulate knowledge and
expertise in cooperation with
the research community and study CO2
absorption by various crops (forage
grasses, grain cereals and pulse crops),
young coniferous and deciduous
In 2023, we continued tests
at 24 forest areas within the carbon
farm, planting additional
10 thousand coniferous and
15 thousand coniferous young
seedlings to compensate for those
that failed to survive the winter.
Preliminary research done
by the Centre for Forest Ecology and
Productivity of the Russian Academy
of Sciences shows that ecosystems
of this kind can achieve average
annual carbon stock of 14.6–16.0
t of CO2-eq. per ha over a period
of 25 years.
Two years of tests run
by the Vereshchagin Vologda State
Dairy Farming Academy show that
estimated levels of carbon dioxide
absorption by the aboveground
plant biomass on an area of 200 ha
are 5,475 t of CO2-eq., resulting
in accumulation of 7,925 t of CO2-eq.
by the belowground plant biomass.
Carbon absorption by the carbon farm using different farming practices
Taking into account the processes
of soil respiration, humification and
humus mineralisation, these results
suggest that soil stores 1,050 carbon
units with an average annual gain
rate of 2.6 t of CO2-eq. per ha, which
can be verified in actual farming
environments by using the most
common methods of tests for soil
carbon.
The carbon farms used only PhosAgro
Group’s mineral fertilizers and did not
rely on organic fertilizers, green mass,
or other methods to build soil carbon.
Forage grass trials were conducted
on a 20-hectare plot at PhosAgro’s
carbon farm in 2023:
• Agricultural technology 1: ryegrass
+ clover + festulolium;
• Agricultural technology 2: ryegrass
+ clover + alfalfa;
• Agricultural technology 3: ryegrass
+ clover + bird’s-foot trefoil;
• Farm’s practice: ryegrass + clover
Farm
Vologda carbon farm
Grass mixture
Agricultural
technology 1
Agricultural
technology 2
Agricultural
technology 3
Farm's option
Cherepovets carbon
farm
Agricultural
technology 1
Agricultural
technology 2
Agricultural
technology 3
Farm's option
CO2-eq. gain
in the biomass
in two years, t/ha
CO2-eq. gain in roots
in two years, t/ha
Formation
of humus,
t of CO2-eq. per
ha
Carbon gain,
t of CO2-eq. per ha
(carbon units)
26.70
26.90
25.20
24.20
32.80
30.40
27.50
29.40
39.50
39.70
36.90
35.50
47.60
43.30
38.70
42.70
7.11
7.15
6.64
6.39
8.57
7.79
6.97
7.69
4.98
5.02
4.51
4.26
6.44
5.66
4.84
5.56
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report As part of the project, PhosAgro
and the Russian State Agrarian
University – Moscow Timiryazev
Agricultural Academy are also running
a series of tests in grain-grass
crop rotation at the farming station
for different types of fertilizers with
the return of plant residues to soil.
Results obtained so far suggest that
it is a combination of mineral and
organic fertilizers with regular liming
that allows for the most effective
carbon gain in soil during the crop
rotation period (five years).
These studies show that a balanced
approach to crop rotation and
application of fertilizers and ameliorants
not only deliver a good yield of winter
wheat of 5.5–6.0 t per ha in the Vologda
region but also, subject to the return of
plant residues to soil, achieve carbon
gain by soil of 2.8 t of CO2-eq. per ha
per year even without organic fertilizers;
when organic fertilizers are used, the
efficiency of the carbon gain process
increases to 5.2 t of CO2eq. per ha
per year. The data demonstrate that
with an increase in the dose of mineral
fertilizers, subject to properly organised
processes, the carbon footprint of
agricultural products will be decreasing.
In 2024, PhosAgro plans to refine
and analyse all data and, jointly
with the Izrael Institute of Global
Climate and Ecology (IGCE), develop
methods for various agricultural crops,
ornamental plants and forest crops
and have them rolled out for practical
application by farmers.
Change in soil carbon stock for different fertilization schemes, t/ha (five years)
Fertilization scheme
Control (no fertilizer)
Manure, 50 t/ha
N150P120K225
Manure, 25 t/ha + N75P60K113
Manure, 50 t/ha + N150P120K225
End of crop rotation
Change
Initial carbon content
no liming1
liming
no liming
liming
46.52
49.00
48.14
46.14
51.58
49.48
46.43
49.48
50.24
46.62
51.29
52.34
47.57
49.96
49.48
2.48
5.43
3.05
4.67
2.38
1.62
3.34
3.81
5.72
1.91
Productivity of crop rotation during crop rotation period, t/ha of conventional grain units (five years)
Fertilization scheme
Control (no fertilizer)
Manure, 50 t/ha
N150P120K225
Manure, 25 t/ha + N75P60K113
Manure, 50 t/ha + N150P120K225
Yield over five years (oat-vetch mixture –
winter wheat – spring barley – red clover
— oats)
Carbon gain, t of СО2-eq. per ha
no liming1
17.58
20.29
21.54
22.81
25.21
liming
19.15
22.49
24.05
25.50
28.27
no liming
9.09
19.91
11.18
17.12
8.73
liming
5.94
12.25
13.97
20.97
7.00
Cutting-edge biologised adaptive
plant nutrition systems
In 2023, experts from the Company
and the Federal Williams Research
Centre of Forage Production and
Agroecology ran a production trial
in the Moscow Region to cultivate
forage crops using biologised
adaptive plant nutrition systems and
a biological preservative for forage
conservation.
As opposed to the routine
alfalfa cultivation using
100 kg/ha of ammonium nitrate, two
biofertilization options were tested
during the trial. The first option
involved using only biological agents
and the ApaSil adaptogen (trial
plot 1), while the second one relied
on replacing ammonium nitrate with
biologised urea and using the same
nitrogen dose along with ApaSil (trial
plot 2). Trial results showed that
innovative nutrient systems led to
improved crop yields. More trails are
scheduled for 2024.
Cut
1
2
3
Total for three cuts
Check strip (farm's option)
Trial plot 1
Trial plot 2
Yield, t/ha
21.44
12.95
8.80
43.19
21.66
14.18
11.60
47.44
23.77
15.48
12.50
51.75
Average dry matter (DM) and crude protein (CP) yield per hectare per cut
Check strip (farm's option)
Trial plot 1
Trial plot 2
DM, t/ha
3.67
CP, c/ha
6.10
DM, t/ha
3.81
CP, c/ha
6.20
DM, t/ha
4.10
CP, c/ha
7.10
1 No liming: pHKCl = 5.1–5.2, liming: pHKCl = 5.7–5.9.
120
121
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report The application of Fermasil
developed by Innopraktika
along with the biologised
adaptive plant nutrition
system resulted in improved
quality and nutritional value
of forage while offering
the same storage life. The
trial involved analysing
both the carbon footprint
of the products and their
qualitative properties. The
results showed an increase
in the levels of lactic and
acetic acids, contributing to
the prolonged preservation
of the feed’s high quality.
The level of succinic acid,
which is an indicator of feed
spoilage, remained within
acceptable limits.
Biochemical quality indicators of alfalfa haylage
Haylage conservation
option
Protein
MEcattle, MJ/kg
of DM
Check strip (farm’s practice)
Content in DM of haylage, %
Organic acids
рН
Lactic
Acetic
Succinic
Lactic acid
as % of total
acids
Ammonia
nitrogen
as % of total
nitrogen
Farm's practice
Fermasil, 6 g/t
Trial plot 1
Farm's practice
Fermasil, 6 g/t
Trial plot 2
Farm's practice
Fermasil, 6 g/t
19.74
19.82
20.24
20.76
21.65
21.42
9.62
4.61
9.64 4.57
9.62 4.70
9.64 4.66
9.70 4.69
9.73 4.55
9.51
9.32
9.70
11.22
9.82
10.07
1.12
0.98
1.32
1.25
1.71
1.31
0.91
0.90
1.18
1.32
1.06
1.08
82.37
82.19
79.49
81.25
77.99
80.83
8.28
7.58
9.40
8.91
10.49
10.46
Thus, the new types of fertilizers
developed by PhosAgro help
agricultural producers increase
crop yields despite the constraints
of limited land resources while also
improving forage quality, reducing
carbon footprint, enhancing soil
fertility, and increasing production
margins.
122
123
4
COOPERATION
IN INNOVATION
OUR STRATEGY FOR INNOVATING AND HELPING STUDENTS, TEACHERS AND
FARMERS TO DEVELOP PROFESSION COMPETENCIES RELIES ON PARTNERSHIPS
WITH THE LEADING AGRICULTURAL UNIVERSITIES AND R&D CENTRES
RUSSIAN SCIENCE, EDUCATION AND AWARENESS RAISING PROJECTS
Partner and
partnership goals
Key results
in 2023
1. The carbon farm project progressed into
4. biotechnologies and feed additives
Russian Academy of Sciences
Cooperation across a range
of areas related to the climate
agenda and low-carbon transition
plan
its second year with additional tree seedling
planting and procurement of necessary
equipment
2. 15 research organisations participated
in the development of new fertilizers
and feed additives, completing a total
of 20 research projects
3. Further progress was made in implementing
other projects involving leading Russian
scientists to develop and promote
innovative products:
Partner universities
More than
Creating PhosAgro Group’s
nationwide educational network
across 30 agricultural universities
in Russia
390 online lectures
digitised for 47 agricultural universities
Lectures drew an audience of over
53,000
students and professors from both Russia
and the CIS
1. The number of educational centres
expanded to 17, including two flagship
multifunctional centres in Moscow
at the Russian State Agrarian University –
Moscow Timiryazev Agricultural Academy
and Skryabin Moscow State Academy
of Veterinary Medicine and Biotechnology
2. PhosAgro’s open educational centres
hosted an array of activities, including daily
lectures, additional professional education
courses, open days with major employers,
meetings for young scientists, conferences,
and recorded lecture demonstrations
developed
5. registration process for new biologised
mineral fertilizers launched
6. a pipeline of new promising projects
built
3. Lecture topics spanned a broad range
of subjects, including agrochemistry,
agronomy, crop production, innovation and
digitalisation in agriculture, economics, law,
and sustainable farming
4. Plant trials, including as part of diploma
projects, were conducted at four phyto-
classes of PhosAgro educational centres
5. Career guidance activities
for schoolchildren were implemented jointly
with professors from the Russian State
Agrarian University – Moscow Timiryazev
Agricultural Academy
6. Efforts were underway to develop 15
innovative additional educational courses
covering various subjects and providing
an opportunity to earn PhosAgro certificates
and official state qualifications
7. The Company continued to develop the Pro
Agro Lectorium educational online platform
and implement it across all agricultural
universities
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report INTERNATIONAL SCIENCE, EDUCATION AND AWARENESS RAISING PROJECTS
Partner, project
and goals
UNESCO
Green Chemistry for Life, a joint grant programme
by PhosAgro, UNESCO and IUPAC
Financial support and scientific guidance for young scholars doing
research in emerging Green Chemistry technologies to address
environmental challenges and ensure sustainable use of natural
resources
UNESCO-Russia Mendeleyev International Prize in Basic
Sciences
The international prize aims to foster scientific progress, science
popularisation and international cooperation. It also serves as a tribute
to the renowned Russian scientist Dmitri Mendeleyev, who devised
the periodic table of the elements, playing a pivotal role in the future
of chemistry, physics, biology, astronomy, and geochemistry
IUPAC
Summer Schools on Green Chemistry project run jointly
by PhosAgro, IUPAC and Green Sciences for Sustainable
Development Foundation
The project is an educational initiative run by the International
Union of Pure and Applied Chemistry (IUPAC) with the support
of PhosAgro to improve the qualifications of young scholars
engaged in green and innovative chemistry research globally with
a view to promoting innovations and breakthroughs
124
125
Key results
in 2023
Partner, project
and goals
Key results
in 2023
UN Food and Agriculture
Organisation (FAO)
Development of Sustainable Agriculture through
the Implementation of the Global Soil Doctors Programme
and the Creation of the Global Soil Laboratory Network
(GLOSOLAN)
Promoting sustainable soil management among farmers and
expanding the Regional Soil Laboratory Network (RESOLAN)
in Africa, Latin America and the Middle East; achieving
environmental and social well-being by raising awareness
of soils to inform sustainable farming decisions
Development of scientific and
educational cooperation with
African countries
PhosAgro’s sponsorship and expert contribution to building
Africa’s food sovereignty and expanding scientific and
educational cooperation between Russian and African
universities and agricultural associations
Development of scientific and educational potential of African
countries, along with the training of qualified personnel
for the agricultural and chemical industries to build Africa’s food
sovereignty
1. PhosAgro supports the FAO Global Soil Partnership in implementing
the project to advance sustainable agriculture and set up the Global
Soil Laboratory Network. Currently, the global network comprises
over 800 laboratories across 150 countries
2. PhosAgro supported the establishment of the International Network
on Soil Fertility and Fertilizers (INSOILFER), which aims to promote
sustainable soil and fertilizer management with a view to increasing
crop yields, as well as the International Network on Soil Pollution
(INSOP).
1. During the Second Summit Russia–Africa Economic and Humanitarian
Forum, PhosAgro introduced its Pro Agro Lectorium, a digital
educational platform for agricultural professionals in African countries
to learn more about advanced and effective farming practices.
2. As part of the Second Summit Russia–Africa Economic and
Humanitarian Forum, several bilateral and trilateral agreements
were signed between Russian and African educational institutions
and PhosAgro. These include: an agreement between PhosAgro,
the Mendeleyev University of Chemical Technology and Assiut
University (Egypt); an agreement between PhosAgro, the University
of Zambia, and the Russian State Agrarian University – Moscow
Timiryazev Agricultural Academy; an agreement between PhosAgro
and Makerere University (Uganda); an agreement between PhosAgro
and Ahmed Baba University (Mali); an agreement between PhosAgro
and Injibara University (Ethiopia)
1. As part of the seventh round of the grant programme, PhosAgro,
in partnership with UNESCO and the International Union of Pure and
Applied Chemistry (IUPAC), awarded eight grants to young scientists
from Armenia, Italy, Brazil, Vietnam, Malaysia, Tunisia, Croatia, and
South Africa. Over the course of seven rounds of the programme,
more than 900 applications from young researchers across 120
countries were submitted, with grants awarded to 48 scientists from
32 countries.
2. PhosAgro Group proudly served as a partner for the UNESCO-
Russia Mendeleyev International Prize in Basic Sciences. The prize
is the only award granted for sustainability-focused research
in fundamental sciences under the auspices of UNESCO.
1. The sixth session of the IUPAC Summer School on Green Chemistry
took place at Ca’ Foscari University of Venice, Italy. It brought together
150 young scientists and 30 leading teachers from 44 countries,
including 48 African researchers
2. 2023 saw the sixth session of the IUPAC Summer School on Green
Chemistry supported by Phosagro. Since inception, it has attracted
the participation of over 800 young researchers and 60 teachers from
75 countries
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Partner, project
and goals
Key results
in 2023
Partner, project
and goals
Key results
in 2023
Institute of Chemistry and Sustainable
Development at the Mendeleyev
University of Chemical Technology
Partnership in promoting basic sciences and research
in chemistry and related fields to further sustainable
development globally
1. Promoting basic sciences and research in chemistry and
related fields to further sustainable development globally
2. Articulating an expert point of view on major issues
on the global sustainability agenda
3. Implementing joint programmes and projects
4. Organising joint events to promote research in green chemistry
5. Supporting young scholars engaged in innovative research
in green chemistry, unlocking their scientific potential,
strengthening cooperation between them and involving them
in joint research projects
United Nations
Global Compact
As a Global Compact Lead company, PhosAgro contributes
to the initiative by providing expert advice on a wide range
of topics
1. The Global Compact Lead status makes it possible to engage
in the discussion of the international agenda while actively
liaising with other international organisations and contributing
to the development of new business approaches, regulations and
standards globally
2. Contributing to the UN Sustainable Development Goals through
projects implemented by the Company as a responsible producer
of environmentally friendly mineral fertilizers
3. Enhancing global partnerships for sustainable development
4. Articulating an expert point of view on major issues on the global
agenda
5. Participating in global initiatives aimed at addressing today’s global
challenges
PhosAgro joined the UN Global Compact’s Forward Faster
initiative calling for an accelerated achievement of the UN
Sustainable Development Goals (SDGs)
The initiative launched during the United Nations General Assembly
seeks to bring together the efforts of social responsibility leaders
worldwide. As a participant in the Water Resilience Coalition, a UN
Global Compact platform, PhosAgro will contribute to a faster
achievement of SDG 6 (Clean Water and Sanitation) covered
by the Forward Faster initiative, by advancing sustainable water
resource management
1. PhosAgro awarded scholarships to 20 winners of the third and fourth
competitions of the Laverov scholarship programme established
for young scientists from the Mendeleyev University of Chemical
Technology who do research in ecology, environmental management,
new materials and substances. Winners were selected based on their
academic achievements, scientific publications in high-ranking journals,
and their interest in developing projects in the field of green chemistry.
2. PhosAgro-funded scholarships named after academician Nikolay Laverov
were awarded to 40 talented university students and postgraduates
3. In order to develop students’ professional knowledge of innovative
processes in green chemistry and related fields, PhosAgro Group
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 the Mendeleyev University of Chemical Technology. The focus areas
were aligned with the UN 17 Sustainable Development Goals
1. We retain our status of a Global Compact Lead company and
are actively involved in the alliance’s initiatives. This enhances
PhosAgro’s business reputation globally, reinforces its competitive
strengths and increases public trust in PhosAgro, while also helping
to boost existing and forge new partnerships
2. PhosAgro Group supported the open call by the business community
to safeguard water resources under the auspices of the United
Nations. The Forward Faster initiative was presented during the UN
Water Conference and was developed in collaboration with the Water
Resilience Coalition, a UN Global Compact platform, alongside
the CEO Water Mandate. PhosAgro stands as the only Russian
participant in the Forward Faster initiative focused on achieving SDG
6 (Clean Water and Sanitation)
3. PhosAgro took part in the panel discussion “Food Security
in a Changing Climate: Global Challenges and Opportunities” during
the 28th session of the Conference of the Parties (COP28) to the UN
Framework Convention on Climate Change
126
127
The Diplomatic Academy of the Russian
Ministry of Foreign Affairs
Partnership in scientific research with a focus on sustainable
development and green economy
1. Advancing research in sustainable development and carbon-
neutral green technologies
2. Collaborating on green programmes and projects
3. Supporting major national, regional, and international initiatives
promoting the UN Sustainable Development Goals
4. Organising events addressing food security, environmental
protection, and human health
European Sustainable Phosphorus
Platform (ESPP)
Partnership on the European political, scientific and technical
agenda for the sustainable use of phosphate resources
1. Fostering knowledge exchange, experience transfer and
professional networking in phosphorus management; promoting
dialogue between market participants, stakeholders and
regulators
2. Removing regulatory barriers
3. Effecting communication through newsletters, website,
conferences and publications
1. PhosAgro, in partnership with the Diplomatic Academy
of the Russian Ministry of Foreign Affairs and with support from
the FAO Liaison Office with the Russian Federation, organised
an international forum-webinar titled “Protecting the Planet’s
Soils from Degradation and Depletion. International Experience
in Maintaining Soil Fertility and Health”. The forum attracted more
than 350 scientists and experts from Russia and Latin America,
Africa, Europe, and Asia
1. PhosAgro Group participated in the European Sustainable
Phosphorus Conference that brought together several hundreds
of representatives of business, stakeholders, regional and
national authorities. At the event, we presented our best practices
of phosphogypsum application in road construction
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report 3
ESG evaluation of suppliers
ESG evaluation coverage
of at least 50%
of counterparties
that participated
in the procurement
l
a
o
G
and at least 30%
of procurement volume from
the evaluated counterparties
Target
8.3, 12.4
and 13.2
l
a
u
t
c
A
64%
share of suppliers in 2023
that underwent ESG
evaluation
59%
share of procurement from
evaluated suppliers
Training materials
are available on the
Company’s official
website in the
Procurement section
Материалы по обучению
представлены на официальном
сайте Компании в разделе
«Закупки».
SUPPLY
CHAIN
AREA, STRATEGIC GOALS AND METRICS
1
Digital transformation
Target
9.1
Target
12.4
l
a
o
G
l
a
u
t
c
A
Further development of Process Mining and introducing new robotic solutions
5
new robotic solutions
implemented to improve the
efficiency of procurement
management
Robert chatbot launched
to quickly handle standard
procurement queries
Migration of robotic
solutions to a new
Russian-developed
platform initiated
2
Procurement function development
Enhancing long-term relationships with suppliers
• Long-term agreements
• Consignment warehouses
• Online shops
Developing direct and
alternative supplies of
imported equipment and
spare parts
2023 target:
30% of inventory
Increased procurement
using embossed bank cards
Further development of
category strategies
32%
inventory procured as part of
long-term relationships
23%
procurement from local
suppliers
8%
direct procurement from
Chinese manufacturers
3
2
0
2
-
l
a
o
G
l
a
u
t
c
A
58%
rise in procurement using
embossed bank cards
The category strategies cover:
13 raw material categories
17 categories of materials and equipment
128
129
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
STRATEGY
PhosAgro’s procurement system seeks
to ensure that the Group’s subsidiaries
receive the required resources, materials,
and services of 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 Company’s sustainable
development.
In 2023, our procurements of goods and
services reached almost RUB 184 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 more important 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 strong positive impact on all our
stakeholders.
RUB
184 bln
procurements of goods and services
in 20231
In 2023, PhosAgro placed
a strong emphasis on import
substitution throughout
its supply chain. In order
to identify alternatives and
replace the equipment and
machinery of Western suppliers,
we engaged in technical audits
of Russian manufacturers, ran
trials of materials and equipment,
and shared our experiences
and insights with peers
from the chemical and other
industries.
MANAGEMENT APPROACH
GRI 3-3
In its procurement, PhosAgro aims
to foster open, trustful and mutually
beneficial relationships with our partners
in compliance with the applicable laws,
regulations, and contractual and other
obligations.
All of the Group’s suppliers,
including potential ones, are subject
to the Company’s anti-corruption
standards. To ensure compliance
with Russian anti-corruption laws and
PhosAgro’s Anti-Corruption Policy,
prevent and fight fraud and corruption,
avert conflicts of interest among
PhosAgro employees, and provide
more opportunities for companies and
individuals to engage in supplies of goods
and services in line with principles
of good faith competition, transparency
and openness, the Company adopts
a zero tolerance approach to fraud and
corruption in any form and manifestation.
PhosAgro believes that any and all
instances of bribery, fraud and corruption
involving the Company’s employees and
contractors are unacceptable. To enforce
this principle, PhosAgro expects
its potential contractors to meet certain
obligations made known to them when
first signing up to the EBP.
Documents governing the Company’s
procurement activities are publicly
available on its official website.
General information
on PhosAgro’s procurement
activities is available
in the Procurement section
on its official website
Requirements for suppliers
Общая информация о закупочной
деятельности ФосАгро
размещена в разделе «Закупки»
на официальном сайте
Требования к поставщикам
Procurement Policy
Procurement Policy
As a way to ensure prompt
response to suspected
corruption and fraud, in 2016,
PhosAgro launched a Group-
wide hotline for the Company’s
management to better handle
all reports of violations and
issues, including those related
to procurement. The hotline
is available to everyone, including
the Company’s contractors and
partners.
The Company’s potential
suppliers can participate
in a fully transparent and
accessible procurement
procedure using
PhosAgro’s electronic
bidding platform (EBP).
All prospective bidders
are required to sign up and
familiarise themselves with
the regulations governing
the Company’s procurement
activities:
Procurement Policy;
Anti-Corruption Policy;
Code of Ethics;
Code of Conduct
for Counterparties;
PhosAgro EBP Operating
Procedure.
1
In accordance with the materiality principle, the quantitative metrics in this section are presented for Apatit (Boundary 2) (Apatit is a subsidiary of
PhosAgro holding its production assets)
130
131
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
Board of Directors level
Strategy and Sustainable
Development Committee of the Board
of Directors
• Setting strategic priorities in procurement
• Review of the executive management’s procurement
reporting
Procurement Department management level
Director (Supervisor, officer-in-
charge) of the Department
• Organising the overall operation, allocation
of functions, business development strategies,
definition of methodologies and procedures
for the uninterrupted supply of equipment and
materials
Department Director
Head of Division
• Meeting the Company’s needs in a timely manner
• Apatit’s warehouse inventory management
• Day-to-day functioning of the Department, supervising
operations of the Department’s structural units
• Developing a strategy for re-engineering of business
processes in the Department, etc.
Procurement Department operational level
Heads of units and working groups
Specialists
• Managing operations of subordinate business units,
• Meeting the Company’s needs for equipment
selecting and deploying staff, determining the relevance
of their work
• Acting in accordance with the requirements
of the management system, contributing
to its improvement within their remit, etc.
and materials, controlled materials, and
services in a timely manner, in full and
at the best possible prices
• Professional development and upskilling
Cross-functional teams
132
133
In 2023, in order to boost
performance, PhosAgro
set up dedicated cross-
functional teams tasked with
handling the most important
or challenging categories
of procured equipment and
materials and developing
their procurement
strategies.
To assess the performance of its staff,
the Procurement Department has
individual KPIs in place aligned with
the Company’s business goals.
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.
KPIs contribute to better employee
performance by creating a coherent
vision of the deliverables and
assessment criteria shared by the team
and management. Progress against
KPIs is regularly monitored, with interim
evaluation in place. Overall performance
of the Company’s procurement function
is subject to annual review by PhosAgro’s
Board of Directors.
RISKS AND OPPORTUNITIES
The following strategic risks affect our procurement objectives
14
Corruption
18
Commodity risk
20
Sanctions risk
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.
for more information, see the Strategic Risks section,
page 68
PROCUREMENT-SPECIFIC RISKS ARE:
Suppliers’ failure to perform,
changes in the product range
or late delivery of materials and
equipment, including as a result
of geopolitical factors
Violations of ESG principles
by suppliers, including breach
of human rights, use of child and
forced labour, non-compliance
of products with environmental
standards, etc.
Quality of raw materials,
commodities, and equipment,
dissatisfaction of the internal
customer
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report 1
DIGITAL TRANSFORMATION
СUTTING-EDGE SOLUTIONS TO CREATE
OPTIMAL PROCUREMENT MODELS
The Company effectively
implements cutting-edge
business solutions and IT tools
in its procurement processes
to create optimal procurement
models and seamlessly interact
with parties along the supply
chain.
PhosAgro’s Hotline Regulations setting
out the procedure for whistle-blowing
related to fraud, corruption, theft and
conflicts of interest
PhosAgro’s Hotline Regulations
setting out the procedure for
whistle-blowing related to fraud,
corruption, theft and conflicts of
interest
AUTOMATED REPORTING
• Implemented at all stages
of the procurement process,
including reporting, which
makes it transparent and
convenient for subsequent
analytics
• For each process,
analysis can be broken
down as needed, with
flexible reporting that can
be adjusted to user needs
• Reporting covers the entire
process from need
identification to inventory
delivery, with 269 metrics
monitored
SINGLE FORM OF PURCHASE
REQUISITION
• Developed to raise
a purchase request within
the procurement system
• The form offers search across
all stores (for the inventory
items you need), enabling
viewing of information
on quantities available
at the central warehouse,
on-site warehouses and
holding company warehouses
(including information
on alternatives)
134
135
SINGLE SIGN-ON SOLUTION
• Versatile tool that makes sure
internal customers do not
overstock or purchase items
already available at the warehouse
EXPERT OPINIONS
ELECTRONIC QUOTE SUMMARY FORM
• Collation of reviews provided
by internal or external experts,
containing sound insights into
whether potential suppliers
qualify or not and whether their
quotes meet the Company’s
needs for goods and services
• Dealing with information gaps
in the procurement process
to make it more transparent
• Reduced handling of hard-copy
quote summary forms, optimised
storage and record keeping
• Reduced time needed to verify
contractors before selecting
the winning bidder
PROCESS MINING
• Innovative method of data
analysis and business process
optimisation to improve
procurement efficiency, ensure
timely supplies of materials
and equipment, and reduce
losses and labour and time
costs
ROBOTISATION
• Creation of software algorithms
to take over some of the routine
tasks and mitigate human error
while increasing the speed
of information processing and
labour productivity
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report KEY RESULTS IN 2023
COST BUDGET IN 2023
Breakdown of procurement costs, %
‘21
‘22
‘23
15
65
20
17
57
26
Materials and equipment
Raw materials and fuel
Work and services
Breakdown of procurement costs, bln
‘23
‘22
‘21
25
44
31
183.8
213.9
150
The Company’s procurement
costs in 2023 totalled
RUB 183.8 bln
of which raw
materials and fuel
accounted for
44%
Service procurement in 2023
Performance level
Actual
KPI
Threshold
Target
Stretch
2022
2023
Average number of tender participants in the reporting
period
Tender price reduction in the reporting period, %
Holding tenders on time, %
Bidders’ motivation assessment with respect
to procurement quality
3
5
90
3.5
5
7
95
4.5
7
12
100
5.0
4
10
99
5.0
5
10
99
5.0
Commodity procurement in 20231
KPI1
Threshold
Target
Stretch
2022
2023
Timeliness of procurement, %
Reject rate at incoming control, %
87
5
90
3
93
2
89
6
89
6
Performance level
Actual
Raw materials procurement in 2023
KPI
Threshold
Target
Stretch
Raw materials procurement index
1.05
1.00
0.95
2022
0.79
2023
0.96
Performance level
Actual
1 The commodity price control index has been removed from the KPI list since 2023.
136
137
GRI 2-6
Geopolitical factors continued to have
a significant impact on PhosAgro Group’s
supply chains in 2023. Among other
things, banking operations with foreign
suppliers became more complicated.
To respond to these challenges,
PhosAgro introduced structural changes
in the Procurement Department,
organised alternative procurement, and
put up new supply chains. Category
managers secured timely supplies
of materials and equipment that
are critical for the operational process.
One of PhosAgro’s priorities
was collaboration with Russian
manufacturers, with a variety of trials
held and agreements signed for long-
term cooperation and fine-tuning
of equipment (including self-propelled
underground machinery and automation
and control equipment) to meet
the needs of Apatit. To manage risks
more effectively and swiftly, a dedicated
flowsheet was introduced to monitor
the supplies of critical inventory items.
The insourcing of services provided
by Cherepovets Energy Company helped
increase the share of self-procured
electrical goods.
During the reporting year, PhosAgro
achieved a further reduction in the reject
rate at incoming control of centrally
procured materials and equipment,
bringing it down to 7.7% vs 8.7% a year
earlier.
DIGITAL TOOLS
In 2023, PhosAgro’s Procurement
Department continued to actively
deploy digital tools and management
solutions based on them. In particular,
five robotic solutions were developed
and implemented to administer and
control tasks of procurement function,
upload and verify documents, and
select the approval route. In addition,
the Robert chatbot was launched
to quickly process typical procurement
queries. At the same time, the transfer
of robotic solutions to a new Russian
platform was initiated as a way
to improve reliability and efficiency.
In the reporting year, the expanded use
of Process Mining technology reduced
the time required to approve contractual
documents by an average of 13%.
In 2023, PhosAgro’s EBP introduced
a new functionality, the Document
Management Form (DMF), which enables
interaction with potential counterparties
and automates the document collection
on a one-stop-shop basis. Uploading
and keeping documents in the DMF
up-to-date are a responsibility
of counterparties and a prerequisite
for entering into contractual relations
with Apatit.
Competitive Procurement Leader
In October 2023, PhosAgro Group won the Competitive Procurement
Leader contest in the Procurement Digitalisation Leader category
with its Procurement Automation and Internal Audit of Business
Processes projects.
The Competitive Procurement Leader Award is the first professional
competition in the field of trade and procurement, bringing together
suppliers, government officials, mass media, and non-governmental
organisations. Established in 2012, the award aims to raise
awareness about the most significant procurement projects that
make operations of companies more efficient and transparent and
contribute to the development of the market at large. In 2023, a total
of 174 projects were submitted by companies across all industries.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report To inform and train
its counterparties to use
the DMF, the Company
developed video instructions
(available on PhosAgro’s
official website).
Video instructions
on PhosAgro’s official website
Видеоинструкции на
официальном сайте ФосАгро
Видеоинструкции на
официальном сайте ФосАгро
Video instructions
in the Instructions section
on PhosAgro’s EBP
In addition, the Company
organised training
for its counterparties as part
of the Supplier Day and included
links to the instructions in notices
made available to counterparties
registered on PhosAgro’s EBP.
The SCOUT system used
to automate counterparty
verification procedures
was integrated with key corporate
systems to collect and categorise
data from corporate and external
sources.
the operating efficiency of the Company
units and enhanced the competences
of employees involved in procurement,
as well as helped us build universal
chains of interaction between a joint-
venture customer (applicants) and
the Procurement Department.
The Company also launched a project
for the procurement of low-value items
on Marketplace, an online platform that
connects suppliers and customers,
which serves to reduce the transaction
burden in non-strategic procurement
categories and increases the speed
of B2B procurement.
IMPROVED PERFORMANCE
In the reporting year, PhosAgro
focused on streamlining the operations
of its Procurement Department
and related joint ventures involved
in the procurement process. To this
end, we implemented a project
to improve the efficiency of interaction
between a joint-venture customer
and the Procurement Department
by optimising end-to-end processes
and structural changes, while another
initiative – updating PhosAgro
Group’s stock item catalogue –
is now in the advanced stages
of implementation. This has improved
Oleg Minnullin
Head of Procurement, Apatit
“Continuous development and improvement of business
processes is the foundation that underpins everything
we do in our function. We never stop learning and
adopting the best practices of successful businesses.”
138
139
161 initiatives
were implemented to develop the
Procurement Directorate, optimize
procurement business processes and
improve the efficiency of the Company
LOCAL SUPPLIER MANAGEMENT
GRI 204-1
At the St Petersburg International
Economic Forum in June 2023,
the Company signed a protocol
on the implementation of the cluster
model of economic development
in the Vologda region. This is a joint
project of the regional government,
Vologda regional branch of the Russian
Union of Industrialists and Entrepreneurs
(RSPP), PhosAgro Group, and Severstal.
The initiative will see the creation
of a new cluster model for the Vologda
region’s economy at the industrial
site in Cherepovets. The project
of the Synergy of Growth 3.0 cluster
model is a continuation of the Synergy
of Growth project. It provides
for the local manufacture of popular
products in order to meet long-term
needs of the region’s largest businesses.
PhosAgro is also actively involved
in similar initiatives organised
by the Vologda regional branch
of the RSPP and the All-Russia Public
Organisation Business Russia.
Share of local
procurement, %
Total
In 2023, the amount
of PhosAgro’s procurement
from local suppliers exceeded
RUB 41 bln (vs RUB 37 bln
in 2022), while the share
of procurement from local
businesses increased to 23%
(from 17% in 2022).
Branches
‘23
‘22
‘21
‘23
’22
‘21
23
17
19
28
19
28
15
20
13
14
18
23
13
23
14
The Company is engaged
in active work with small and
medium-sized enterprises and
provides comprehensive support
to the development of local
businesses. Our efforts are aimed
at promoting economic, social and
cultural development across our
footprint.
In addition, PhosAgro organises
regular Supplier Days to promote
cooperation with local suppliers,
including training them in the use
of specific tools in the Company’s
procurement process. More than
50 key contractors attended
the event held on 19 September
2023.
Apatit
Balakovo branch of Apatit
Volkhov branch of Apatit
Kirovsk branch of Apatit
Number of suppliers
in procurement
Procurement, RUB mln
Year
2023
2022
2021
Total
183,842.61
213,910.69
150,006.70
SMEs
57,957.23
42,143.22
29,918.40
‘23
‘22
‘21
2,577
816 48
2,478
2,332
798
72
772
110
3,797
3,511
3,350
SMEs
Local
Imports
Local
41,493.65
37,099.57
28,330.40
Imports
12,436.83
5,914.77
4,389.30
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
3
SUPPLIER ESG
EVALUATION
Suppliers are an essential aspect
of sustainability in PhosAgro’s
operations. The Company has
an automated system in place
to evaluate suppliers on the basis
of ESG criteria, which results
in an individual rating of each
counterparty. This enables
us to assess our suppliers’
environmental, social and
governance performance.
To verify the resources and
capabilities of its business partners,
the Company conducts regular
technical audits of suppliers.
In 2023, we carried out 86
audits of Russian and foreign
manufacturers, four of which
were disqualified on the basis
of environmental and social criteria.
Also, in order to unify approaches
and criteria for evaluating suppliers,
PhosAgro, as part of the National
ESG Alliance, has been a member
of a working group since 2023
to discuss draft unified supplier
evaluation methodology, a practical
ESG transformation solution
for as many large companies
as possible, as well as for medium
and small businesses in corporate
supply chains.
KEY ESG EVALUATION INDICATORS
In 2023, the total number
of counterparties that underwent
our ESG assessment based on their
completion of the Sustainable
Procurement Indicators checklist
reached X (compared to X in 2022).
The percentage of rated counterparties
in total supplies increased from 35%
in 2022 to 59% in 2023. The average
score of suppliers also grew from 62
in 2022 to 65 in the reporting year.
Item
Number of counterparties that
participated in the evaluation
on PhosAgro's EBP as at the end
of the reporting period
65
the average score of suppliers
2021
3,031
2022
7,605
2023
11,191
Number of suppliers in the reporting
year
3,350
3,511
3,797
Number of rated suppliers
in the reporting year
Share of rated suppliers
in the reporting year, %
1,046
1,888
2,418
35
54
64
Total supplies, RUB bln
150.0
213.9
183.8
Training materials on engaging with
suppliers in sustainable development
are available in the Procurement
section on PhosAgro’s official website.
Supplies from rated counterparties
in the total volume of supplies
in the reporting year, RUB bln
36.1
74.8
108.0
Training materials on engaging
with suppliers in sustainable
development are available in the
Procurement section on PhosAgro’s
official website.
140
141
Share of supplies from rated
counterparties in the total volume
of supplies in the reporting year
Average supplier rating, %
24
54
35
62
59
65
SUPPLIER ENVIRONMENTAL
ASSESSMENT
GRI 308-1, 308-2
In 2023, more than a third of PhosAgro’s
suppliers in the category “Raw materials,
fuel, energy and commodities” had
an environmental management system
certified to comply with ISO 14001
or a similar standard (34% in 2023 vs
33% in 2022).
Item
Number of rated suppliers in the reporting year, including:
Number of rated counterparties producing raw materials,
fuel, energy, and commodities
Number of rated counterparties in the above categories
that have an environmental management system certified
to comply with ISO 14001 or a similar standard
Share of rated counterparties in the above categories
that have an environmental management system certified
to comply with ISO 14001 or a similar standard, %
SUPPLIER SOCIAL ASSESSMENT
Item
GRI 414-1, 414-2
According to the 2023 social
assessment, 62% of PhosAgro’s rated
suppliers adhere to the official zero-
tolerance policy on child labour.
In addition, zero-tolerance policies
on discrimination and forced labour
were adopted respectively by 60% and
61% of the Company’s counterparties
in the categories “Producers of raw
materials, fuel, energy”, “Commodity
producers and intermediaries”,
“Logistics services”, and “Construction
and installation, repairs”. The share
of counterparties in the above categories
that have an occupational health and
safety management system certified
to comply with OHSAS 18001 or a similar
system also rose to 40%.
40%
for contractors using a certified
occupational safety and health
management system
Number of rated suppliers in the reporting year,
including:
Number of rated counterparties that adopted a zero-
tolerance policy on child labour
Share of rated counterparties that adopted a zero-
tolerance policy on child labour, %
Number of rated suppliers in the categories “Producers
of raw materials, fuel, energy”, “Commodity producers
and intermediaries”, “Logistics services”, "Construction
and installation, repairs” in the reporting year, including:
Number of rated counterparties in the above categories
that adopted a zero-tolerance policy on discrimination
Share of rated counterparties in the above categories that
adopted a zero-tolerance policy on discrimination, %
Number of rated counterparties in the above categories
that adopted a zero-tolerance policy on forced labour
Share of rated counterparties in the above categories that
adopted a zero-tolerance policy on forced labour, %
Number of rated suppliers in the categories “Producers
of raw materials, fuel, energy, commodities”, “Logistics
services”, "Construction and installation, repairs”
in the reporting year, including:
Number of rated counterparties in the above categories
that have an occupational health and safety management
system certified to comply with OHSAS 18001, or a similar
system
Share of rated counterparties in the above categories
that have an occupational health and safety management
system certified to comply with OHSAS 18001, or a similar
system, %
2022
1,888
847
276
2023
2,418
908
310
33
34
2022
1,888
2023
2,418
1,091
1,511
58
62
1,524
1,926
831
55
1,151
60
856
1,171
56
61
1,174
1,303
452
518
39
40
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report PEOPLE
DEVELOPMENT
AREA, STRATEGIC GOALS AND HIGHLIGHTS OF 2023
1
Inclusive environment
4
Training and evaluation
Targets
8.5 и 8.8
l
a
o
G
l
a
u
t
c
A
The Company strives to build an inclusive environment for disabled people, help
adapt workplaces and municipal infrastructure to their needs and employ more
such people depending on business requirements
We organised a job fair
for disabled people
We streamlined cooperation with
employment centres to facilitate
the employment of disabled people
2
Gender equality
l
a
o
G
The Company is ready to provide all employees with opportunities
for professional and career growth mainly subject to their competencies and
personal performance
Targets
8.5 и 8.8
22%
of women among managers of all
levels
23%
of women in the Company’s Top
Talent Pool (10 out of 44)
34%
of women in the Company’s
total headcount
l
a
u
t
c
A
3
Annual employee survey
l
a
o
G
l
a
u
t
c
A
Targets
3.4 и 8.3
Maintaining employee satisfaction and loyalty at
no less than 65 p.p. by 2025
72 p.p.
employee engagement
73 p.p.
aggregate employee satisfaction
and loyalty index
89%
of employees trust decisions
of the Group’s management
Target
4.4
l
a
o
G
l
a
u
t
c
A
Increasing average annual training
hours per employee
Promoting retraining and
professional development
Investing in future talent
to 123 by 2025
99.4
average annual training hours per
employee
RUB 262 mln
invested in employee
training
Over 350 people hired
as part of career guidance and youth
engagement initiatives
Over 47%
of PhosAgro START participants employed
by the Company were promoted and included
in the talent pool
5
Incentives and rewards
Target
8.3
l
a
o
G
l
a
u
t
c
A
Motivating the staff to increase productivity and deliver strong operating results,
retaining qualified talent
Average salary increased
by in 2021–2023
60%
15%
wage indexation on 1 April
2023
6
Social benefits and employee guarantees
l
a
o
G
l
a
u
t
c
A
Targets
3.4, 8.3 и 8.8
Providing comprehensive social support to our employees with annual increase
in funding for social benefits and guarantees, financial aid, and implementation
of corporate social programmes
+29%
more investments in social
programmes for employees
92%
satisfaction with the social benefits
offered
142
143
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report To deliver on our objectives,
we:
implement a remedial action
plan called Growth Area based
on the annual employee survey
results;
develop and implement
e-learning modules on blue-
collar jobs, occupational
safety, and managerial skills;
leverage an innovative approach
to professional training (virtual
reality simulators, 3D models,
production training grounds
for improving workplace safety
skills, among other things);
draft and put in place online
training courses on personal
competencies;
develop a knowledge
management system, including
corporate libraries and guidelines;
introduce succession and training
support tools such as mentoring,
coaching and supervision;
assess the application of skills
acquired by the staff involved
in real business operations and
project activities.
STRATEGY
Our key asset is talented, professional,
and committed employees that share
our corporate goals and values.
The Company’s entire HR framework
is geared towards recruiting,
supporting, and motivating employees
to achieve the most ambitious goals.
To this end, we provide a wealth
of opportunities to enhance skills and
knowledge, take consistent efforts
to foster a culture of safety, equality
and respect, and offer competitive
salaries and social benefits.
2023 ACCOLADES
• A top 5 employer among
Russian manufacturing majors
according to HeadHunter
• The highest, platinum status
in the rating of Russia’s best
employers from Forbes
• Highest scores in RBC’s
employer rating
• PhosAgro enterprises won
in four categories of the 5
Stars. Leaders in the Chemical
Industry nationwide industry
competition
• A top 15 company with the most
effective social and charitable
programmes in the Russian
Leader in Corporate
Philanthropy competition
• Nomination for Graduate
Awards, a professional
competition of the best projects
in working with graduates and
young professionals
• Seven employees recognised
as winners of the Engineer
of the Year contest
• Ten employees named Russia’s
Professional Engineers
• 20 employees honoured with
Russian state awards
• Nominee of HR Brand 2023,
an award from HeadHunter
for achievements in HR
management
144
145
MANAGEMENT APPROACH
GRI 3-3
We rely on a robust performance
management system that covers all
levels – from individual employees
to the Company as a whole – to ensure
PhosAgro’s sustainable growth in line
with its goals.
New-generation employees are aware
of how important personal and
professional growth is as it is a key
to success and self-fulfilment
in the constantly changing world.
High remuneration is often no longer
the main incentive, with self-fulfilment
coming to the forefront if the Company
invests heavily in developing
the professional skills and
competencies which will be in demand
going forward. This is why we place
a strategic emphasis on supporting our
people’s drive for self-improvement.
We seek to create the right
environment for them to fully unlock
their potential.
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
employers in these regions, PhosAgro
has a significant positive impact
on social development and welfare
across its geography.
Integrated HR management framework
The Board of Directors
Management
Operations
Remuneration and Human
Resources Committee
HR and Social Policy
Department
Local human resources and
social policy department
• Supervision over the introduction
• Strategic development of HR
processes
•
Implementation of the Personnel
Management Policy
and implementation
of the Company’s remuneration
policies and various incentive
programmes
• Performance appraisal in respect
of executive bodies and key
executives, including their
performance against the targets
set forth in the incentive
programme
• Succession planning for executive
bodies and other key executives
• Development and implementation
• Recruitment for vacant and key
of process methodology
• Optimisation, automation, and
digitalisation of HR processes
• Functional management of HR
services in the regions
positions
• Organisation and implementation
of initiatives for occupational
training and competency building
• Development and management
of an incentive framework
• Social support for the Company’s
employees in accordance
with the collective bargaining
agreement
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report HR MANAGEMENT PRINCIPLES
Relations between the Company
and its employees are governed
by the Russian Labour Code.
The reporting year saw a new
version of the UK Modern Slavery Act
Transparency Statement approved,
which discloses contributions towards
the UN SDGs and the Company’s social
projects to combat violations of human
rights. Over the last three years, our
employees have received more than
21 additional training courses in human
rights and corporate ethics.
We provide equal access
to educational resources and
endeavour to remove all restrictions
on career growth for women and men.
An important focus for our
employees on their way to success
is professionalism, consistently
high performance, and commitment
to corporate values.
The Company pays special attention
to the gender composition of its staff.
Due to the nature of our operations,
the personnel structure is dominated
by men. Nevertheless, PhosAgro
seeks to maintain gender diversity
both in production and administration,
taking into account the specifics
of the Company’s operations, and
to develop an income generation
strategy for employees based on these
aspects.
The Code of Ethics
In our operations, we seek to maintain
an impeccable reputation and comply
with ethical business practices.
PhosAgro’s Personnel
Management Policy has
the following key areas:
• organisational change
management system;
• personnel attraction and
recruitment system;
• personnel training and
development system;
• incentives and rewards system;
GRI 2-30
• social benefits system;
• corporate communication
system;
• working hours and leisure;
• respect for human rights and
non-discrimination.
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 defines our corporate
culture, rules and regulations
for collective behaviour within
the Company, business and social
relationships, and interactions with
other stakeholders.
When agreeing and entering into
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
the Company’s Code of Ethics.
We negotiate collective
bargaining 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 Apatit1, its branches, and
standalone business units).
Share of employees covered
with collective bargaining
agreements, %
‘23
‘22
‘21
100
100
100
The Code outlines our common values
and underpins our success, helping us
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.
1
In accordance with the materiality principle, this metric is presented for Apatit (Boundary 2) (Apatit is a subsidiary of PhosAgro holding its
production assets)
146
147
RISKS AND OPPORTUNITIES
The following strategic risks affect our HR management
objectives:
3
Social risk
4
HR risk
6
Health and safety
risk
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.
for more information, see the Strategic Risks
section on page 68
RISK AREAS SPECIFIC
TO HR MANAGEMENT
compliance with human rights
and ethical standards;
workforce sufficiency, competence
and development;
provision of competitive incentives
and social support to staff;
health and safety.
RECRUITMENT
As part of its comprehensive
recruitment approach, PhosAgro
continuously monitors the labour
market in Russia to attract skilled staff
and efficient managers with work
experience at leading national and
global companies, always determined
to be one step ahead of the curve.
Our recruitment efforts
are underpinned by a consistent
career guidance model, which
prioritises engagement with school
and university students.
The Company works continuously
to improve its recruitment processes.
In 2023, as part of the process
automation, a recruitment module
was put into commercial operation
to ensure faster communication with
candidates and customers, while
also reducing the time it takes to fill
vacancies and minimising labour
inputs along the way. In addition,
we actively roll out and develop HR
marketing tools.
If two or more candidates qualify
for a job, we are more likely to pick
the one who is either:
• a young promising professional
(a programme for attracting,
mentoring, and upskilling high-
potential university graduates);
• an employee included in our talent
pool (a programme for those
looking to develop professional
and managerial competencies
for career growth).
As at the end of 2023, the Group
employed 128 people with disabilities
(88 in 2022). We believe we must
exercise an individual approach
when hiring people with special
needs, and we are aware of our
responsibility to create an inclusive
environment for them.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report KEY AREAS
The PhosAgro Schools project
running in cooperation with schools
across our footprint. By creating
the right environment at schools,
we help guide graduates in their career
choices. In 2023, we engaged with six
schools across our geography.
As part of our collaboration with
secondary vocational institutions,
we seek to create a pipeline of skilled
employees with relevant competencies
who are competitive in the labour market,
acquainted with allied professions, and
have what it takes to pursue career
opportunities for their further employment
with the Company. In 2023, the Company
actively liaised with ten technical colleges.
Cooperation with universities
serves to fill the most relevant jobs
by attracting and retaining talented
graduates. Today, the Company actively
collaborates with 24 universities that
offer courses relevant to its core
activities.
2
GENDER EQUALITY
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 pregnant 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.
Share of women taking part in corporate programmes, %
22% of women
among managers of all levels
23% of women
in the Company’s Team of the Future
(10 out of 44)
34% of women
in the Company’s total headcount
High-Potential Graduates
Corporate training initiatives
Top 40 Talent Pool / Team of the Future
‘23
’22
‘21
31
36
38
‘23
’22
‘21
35
33
30
‘23
’22
23
19
1
INCLUSIVE ENVIRONMENT
The Company honours
all its obligations related
to the employment of the disabled
as required by applicable laws.
In addition, we rely on job quotas
in hiring the disabled, support
Abilympics, a competition
for the promotion of disabled people’s
professional expertise, take an active
part in job fairs for the disabled, and
sign workplace lease agreements
with other companies. Going forward
we plan to expand our practices
of building an inclusive space.
OPEN COMMUNICATION
CHANNELS
GRI 2-25, 2-26
Our employees have access
to multiple communication
and feedback channels within
the Company. Some of the formats
are a hotline, regular information
sessions for the staff and
management, a corporate portal,
a mobile app, information boxes
for requests, and official social media
accounts of the Company.
The Company keeps introducing
popular cutting-edge technologies
in corporate communications. These
include a user-friendly mobile app with
self-service options and a personal
account with HR data, a chatbot, our
corporate portal with new capacities,
online training platforms, automated
HR management system, and many
more.
148
149
In developing our production
and creating new jobs, we seek
to prioritise local residents
when filling our vacancies.
>89% of on-site
employees are hired locally.
PARTICIPATION OF WOMEN
IN INTERNAL THEMATIC EVENTS
• Superfinals of the Young
Manager – 2023 competition.
10 men, 3 women.
• Superfinals of the Mentor
of the Year – 2023 corporate
contest. 8 men, 5 women.
A woman won the superfinal
• Final of the Formula
of Knowledge – 2023 corporate
contest. 1 man, 5 women.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report 2023 HIGHLIGHTS
GRI 2-7, SASB EM-MM-000.B
Breakdown of employees by gender, region, types of employment and employment contracts, number of employees
Permanent employees
Temporary employees
Number of employees
(headcount)1
Full-time employees
Part-time employees
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
5,623
6,238
6,736
485
529
473
6,108
6,767
7,209
6,107
6,762
7,204
2,161
2,321
2,426
142
168
229
2,303
2,489
2,655
2,293
2,476
2,635
Murmansk region, total
7,784
8,559
9,162
627
697
702
8,411
9,256
9,864
8,400
9,238
9,839
Men
Women
3,252
3,721
4,433
70
105
110
3,322
3,826
4,543
3,321
3,825
4,538
2,516
2,755
2,991
221
234
246
2,737
2,989
3,237
2,734
2,977
3,218
Vologda region, total
5,768
6,476
7,424
291
339
356
6,059
6,815
7,780
6,055
6,802
7,756
Men
Women
1,282
1,594
1,792
649
740
806
50
61
63
85
112
105
1,332
1,657
1,904
1,330
1,654
1,901
710
825
911
703
814
899
Saratov region, total
1,931
2,334
2,598
111
148
217
2,042
2,482
2,815
2,033
2,468
2,800
Men
Women
830
1,100
1,192
540
637
680
93
66
117
72
144
59
923
1,217
1,336
923
1,215
1,335
606
709
739
606
708
738
Leningrad region, total
1,370
1,737
1,872
159
189
203
1,529
1,926
2,075
1,529
1,923
2,073
209
194
206
164
147
157
373
341
363
571
557
563
215
249
292
786
806
855
2
2
4
10
10
20
2
3
5
7
7
14
3
8
11
1
4
5
211
196
209
211
196
209
166
150
165
165
150
160
377
346
374
376
346
369
581
564
564
578
561
550
225
256
296
215
246
286
806
820
860
793
807
836
11,767
13,404
14,922
710
823
843
12,477
14,227
15,765
12,470
14,213
15,737
6,245
6,849
7,352
502
569
651
6,747
7,418
8,003
6,716
7,371
7,936
18,012
20,253
22,274
1,212
1,392
1,494
19,224
21,645
23,768
19,186
21,584 23,673
38
Average headcount of PhosAgro
Group1
‘23
‘22
‘21
Productivity2, t per person
‘23
‘22
‘21
21,828.6
19,846.1
18,320.9
1,601
1,793
1,874
The decrease in productivity at Apatit
was due to the growth of the Company’s
headcount as a result of investment
projects and bringing previously
outsourced equipment repair and
maintenance functions back in-house.
Key personnel turnover
indicators3, people
GRI 401-1
‘23
‘22
‘21
5,459
3,362
5,747
3,384
4,033
3,285
8.1%
9.8%
11.6%
Joiners
Leavers
Turnover
In 2023, the employee turnover rate
was 8.1%, down 1.7 p.p. y-o-y.
1
10
11
1
3
4
2
7
9
1
1
3
10
13
7
31
5
13
18
1
12
13
3
11
14
2
1
3
0
3
10
13
14
47
61
5
20
25
5
19
24
3
12
15
1
1
2
5
5
14
10
24
28
67
95
Item
Men
Women
Men
Women
Moscow, total
Men
Women
Other, total
Men
Women
Total
1 Headcount as at the end of the reporting period. The headcount includes employees with an employment contract.
150
151
1 Calculated using the period average methodology by adding up headcounts for each calendar day of any given period and dividing the sum of these
headcounts by the number of calendar days in the period.
2 The ratio of mineral fertilizers, phosphate rock, nepheline concentrate and syenite alkali aluminium concentrate produced to the average headcount
of Apatit, including its branches and standalone business units.
3 For key personnel turnover indicators by age, gender, and region, see page 367.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report GRI 405-1
Personnel breakdown, %
Item
Men
Women
Men
Women
Men
Women
2021
2022
2023
Average headcount, %
Employees by gender and age
Under 30 years
30–50 years
Above 50 years
Employees by category
Blue-collar employees
White-collar employees
Managers
Employees by education
Higher
Basic vocational
General
Secondary vocational
10.1
45.5
9.3
42.3
12.0
10.6
25.3
16.6
10.5
12.5
5.5
23.9
5.7
14.9
17.2
3.0
20.3
5.1
3.6
6.1
10.9
45.5
9.3
42.7
12.6
10.5
25.4
16.6
10.2
13.5
5.5
23.2
5.6
14.5
16.9
2.9
19.7
5.0
3.6
6.0
11.3
45.3
9.7
42.9
12.9
10.5
25.5
16.6
10.1
14.2
5.3
22.8
5.6
13.6
17.2
2.9
19.6
4.8
3.4
5.8
3
ANNUAL EMPLOYEE SURVEY
The Growth Point employee feedback
survey serves as a vital instrument
for the Company to gather insights
from employees, enabling it to swiftly
identify both challenges and areas of
opportunity and develop improvement
plans for all PhosAgro Group facilities.
This annual study has been carried out
for eleven years, accumulating over
76 thousand completed questionnaires.
In 2023, 74% of the Company’s
workforce participated in the survey.
The consolidated employee
satisfaction and loyalty index stood
at 73 p.p., surpassing the industry-
wide benchmark for manufacturing
and mining industries (provided
by an independent consulting firm)
by 13 p.p. and hitting an all-time high
since the measurement began in 2013.
Employee engagement reached
72 p.p., marking a 2 p.p. increase from
the previous year. Additionally, 89%
of employees expressed willingness
to recommend the Company
as a great place to work, which
is an improvement from the 2022 level
of 82%. Furthermore, 89% of employees
expressed trust in PhosAgro’s
management decisions, compared
to 87% in 2022.
The survey results demonstrate that
employees of PhosAgro Group hold
a positive view of the Company’s
overall strategy and the effectiveness
of its annual improvement plans.
Notably, employees show a high level
of confidence in the opinion research
as an effective tool for addressing
challenges within business units.
74%
of the Company’s workforce
participated in the survey
89%
of employees expressed trust
in PhosAgro’s management decisions
Employee loyalty and satisfaction
index, p.p.
‘25
(target)
‘23
‘22
‘21
65
73
69
57
4
TRAINING AND EVALUATION
PhosAgro management seeks to attract
highly skilled professionals and young
talents, establish a knowledge and
experience transfer system for new
generations of employees, and provide
continuous training and development
opportunities. We place heavy
emphasis on professional growth and
are committed to fostering production
initiatives and in-house expertise.
Our objective is to create a corporate
educational environment that
encourages the development
of professionalism, self-improvement,
training, and knowledge sharing.
We actively utilise new tools, methods,
and technologies in this pursuit.
In 2023, we continued to develop
a distance learning system for our
employees and create internal training
materials. By leveraging automated
solutions and services in personnel
assessment and training, we expanded
the number of methods and tools
available for personnel development.
Training expenses¹, RUB ‘000
‘23
‘22
‘21
262,497
271,872
235,216
Training expenses per
employee¹, RUB ‘000
‘23
‘22
‘21
15,739
employees
completed various types of training
programmes in 2023
36% increase from 2022
99.4
average annual number of training
hours per employee
Representing a slight decrease of 0.4%
due to an increase in the number and
duration of training sessions of new hires
before they complete their training in 2024
18.4
21.0
13.6
planning, coordination, quality
and efficiency audit;
Our corporate training framework
relies on the following principles:
alignment with the Company’s
strategy;
assessing and prioritising
actual training needs of various
staff categories to build
appropriate processes;
introducing the most advanced
and efficient methods and
tools from an economic and
methodological perspective;
developing new formats;
using an individual approach
to young talent;
proactively identifying and
developing new leaders
to succeed current ones.
152
153
1 Boundary 2: Apatit, including its branches and standalone business units.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report 2023
Change y-o-y, %
GRI 404-1
Average annual training hours per employee¹
Item
Number of employees trained
Average annual training hours per employee
Breakdown by gender
•
Women
•
Men
Breakdown by employee category
• Managers
• White-collar employees
• Blue-collar employees
Average annual hours of mandatory training
per employee
Average annual hours of optional training per
employee
UoM
people
hours
hours
hours
hours
hours
hours
hours
hours
2021
9,926
95.1
75.0
96.6
83.9
61.7
104.0
81.6
13.6
2022
11,551
99.8
86.5
107.1
113.0
85.4
104.0
85.1
14.7
15,739
99.4
73.5
113.3
109.1
73.5
110.8
94.1
5.3
Total investments in training
RUB '000
235,216
271,872
262,497
Annual training investments per employee
RUB '000
• Women
• Men
RUB '000
RUB '000
13.6
12.9
14.0
21.0
20.4
21.3
18.4
19.3
17.9
36.3
-0.4
-15.0
5.9
-3.4
-13.9
6.5
10.5
-63.8
- 3.4
-12.4
-5.2
-16.1
In 2023, we continued to improve
our corporate training programme
by rolling out remote educational
and development tools, leveraging
digital technologies and creating
mixed training formats.
>250 courses in our
remote training system
11,5 thousand lectures
attended by employees
>35 thousand tests
passed by employees on the Eduson
corporate educational platform
The Company promotes a remote
training system, creates online
courses and upgrades technical
capabilities by introducing computer
simulators, and implementing VR
technologies to support the learning
process. In 2023, remote training
experts put together 25 programmes
on information security, pricing
in construction, safety of rail
transportation of hazardous
substances, introductory video
briefings, etc. The remote training
system counts over 250 courses,
while the VR library offers 15
programmes on occupational health
and safety, as well as two programmes
on assembling and disassembling
of rotating equipment.
We also provide our employees with
opportunities for self-development
by giving them access to our
corporate electronic library and
online training platform. In 2023,
our employees completed over 6.7
thousand courses on the Eduson
corporate educational platform,
attended 11.5 thousand lectures, and
passed more that 35 thousand tests,
investing over 3,500 hours in learning.
They also spent a total of over 5,800
hours using the corporate e-library,
Alpina.
Total investments in employee
training during the year came in at
RUB 262.5 mln
This is 3.4% below the previous
year, which is due to improvements
in efficiency driven by greater
reliance on in-house resources
during the training process.
1 Boundary 2: Apatit, including its branches and standalone business units.
154
155
TALENT POOL
PROGRAMMES
GRI 404-2
The Company seeks to meet
its personnel needs by maximising
its use of the talent pool to select,
develop and appoint employees
to new positions.
The talent pool programmes
include a variety of training options
for talent pool members helping
them to develop managerial and
professional competencies, and
to boost personal and business skills,
such as analysis and decision-making,
leadership, workflow management,
motivation and delegation
of powers, conflict settlement,
project management, effective
communications, etc.
In 2021, the Company started to use
mentoring as a vehicle for promoting
talent pool members. Senior managers
(mentors) share their experience
and knowledge with the participants
in an attempt to build a next-level
management culture, while talent
pool members get a chance to learn
the secrets of successful management
from executives.
Previously known as the Top
40 Talent Pool, the programme
was reconsidered and renamed
the Team of the Future. Its goals
remain unchanged: fostering
conditions for professional
and personal growth, sharing
experience, and addressing new
challenges in the face of constant
change. The programme is open
for professional managers who
act as role models and are willing
to take on challenging tasks while
remaining true to the Company’s
values. The Team of the Future
programme includes four in-person
sessions combining group training
and individual support, such as work
The pillars of creating our talent pool are:
• flexible planning of positions
• prioritised investments
eligible for filling from the talent
pool, and of lists of talent pool
members;
• collegial decision-making on key
aspects regarding the talent
pool;
• focused career planning and
professional development
for talent pool members;
in training and development
of talent pool members;
• prioritised appointment
of talent pool members to fill
relevant job vacancies;
• transparent communication
on how the talent pool
is created and how employees
can participate and benefit.
in groups of three, mentoring, and
project teams. At the end of 2023,
Moscow hosted the programme’s
final session, with six teams
showcasing their projects. Of them,
three projects were recommended
for implementation: “Automation
of the Register of Buildings
and Structures”, “Automation
of Warehouses”, and “Ideogora”
(creation of a single digital platform
for new ideas and expert communities
based on WebSoft).
skills, and experience. Mentoring
is recognised as a valuable tool
for mentees as it enables them
to seek advice from seasoned
managers, better understand
the corporate culture and the role
of the manager, and build new
connections. Mentees can choose
their mentor via the corporate portal,
where the Mentoring section contains
profiles of all available mentors and
a contact form to initiate a kick-off
meeting.
Starting 2023, members of the Team
of the Future act as mentors
for employees taking part
in the PhosAgro-START programme.
For mentors, it is also an opportunity
to take stock of their knowledge,
In 2024, we will continue our efforts
to develop leadership competencies.
Another major task for us is to create
management teams at structural units
and cross-functional project teams led
by the Team of the Future members.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report RULES OF EFFECTIVE MANAGEMENT
One of the Company’s focus
areas in training and development
is to improve management culture.
In 2022, PhosAgro set up the Rules
of Effective Management project
to train and support its managers.
The purpose of the initiative
is to strengthen management
culture, while also establishing
and applying uniform rules
for the supervisor-subordinate
relationship to make staff interaction
more effective.
The Rules of Effective Management
help the Company’s employees
in their managerial activities, laying
down the fundamental principles
of building effective communication
between a supervisor and
a subordinate, which in turn
bolsters employee loyalty and
engagement.
In 2023, PhosAgro started
rolling out the Rules of Effective
Management programme across
production sites at the Balakovo
and Kirovsk branches. In 2024,
the efforts will also cover
the Volkhov branch.
VIRTUAL TEACHING PACKAGE
In 2023, we kept rolling out a virtual
teaching package and a distance
learning system to automate
training and development
processes.
At the end of 2023, the virtual
teaching package included:
1. A matrix
of 24 corporate, job-agnostic
and job-specific competencies;
2. Teaching packages
for 15 corporate and
job-agnostic competencies (23%
of the theoretical course).
3. A tool to create online courses
for nine job-specific
competencies, including
guidelines on developing
the teaching package,
a template of terms of reference
for creating a programme,
a template course presentation,
didactic materials for teaching
in-house developers, and
recommendations on incentives
for in-house developers;
4. 100% of content
required for distance
learning theoretical courses
on job-specific competencies
covering four professions;
5. personal accounts for key
structural units, containing courses
on general and specialised
competencies of blue-collar
workers, as well as courses
to develop additional
competencies, process flowcharts,
student atlases, etc.
In 2023, we developed and
launched e-courses on additional
competencies:
• Safety of Rail Transportation
of Hazardous Substances,
Including Loading and Unloading;
• Mining, part 11 (Mining Machines
and Equipment); Mining, part 2
(Mining Geology);
• video titled “Introductory Video
Briefing for Mekhanik LLC”; video
for operators of chemical production
processes of Mekhanik LLC;
• How to Compile a Work Permit;
How to Compile a Work Permit
Using Pitram;
• Regulatory Documents
on Protection Against Avalanches;
• ILAC Policy;
• Key Requirements on Pricing
in Construction;
• Guidelines on Operation and
Surveillance of Buildings
and Structures by Relevant
Personnel at Apatit;
• Organising High-Risk
Operations: Work Permits
for Repairs, Gas Hazardous
Work, Hot Work, Work
at Height, and Earthwork;
• videos on information security
of automated process control
systems;
Going forward, we plan to roll
out the project. In 2024, there
are plans to develop teaching
packages for 28 professions
in order to achieve 100%
coverage of the 49 most popular
professions in the distance
learning format by 2026.
MENTORING
The mentoring system in place
at our facilities plays a major
role in enhancing the quality
of professional training, reducing
the number of errors, defects,
workplace injuries, and staff turnover
rates, which ultimately helps
increase labour productivity.
Approximately
1,500
experienced and skilled staff
members from PhosAgro facilities
are engaged in Group-wide
efforts to transfer knowledge
and expertise in order to develop
new employees’ professional
competencies, including
knowledge and skills related
to equipment, technology, and
software used in the workflow.
The Company offers mentor
development programmes,
provides communicational
and methodological support
for them, and organises corporate
competitions to motivate
the best mentors. Additionally,
we facilitate corporate meetings
for mentors from different
facilities to exchange experiences.
To acknowledge the importance
and value of what mentors do,
the Company has put in place
measures combining financial and
non-financial incentives. These
include a mentor recognition
board, remuneration for employees
involved in mentoring, letters
of appreciation, and more.
156
157
On top of that, PhosAgro holds
the annual Mentor of the Year
corporate contest set to develop
mentoring, make it more
prestigious, raise employee
awareness, and encourage and
recognise mentors’ personal
contribution to the development
of young talents. In 2023, 14
mentors from different assets
of the Company took part
in the Mentor of the Year super
final.
INVESTING IN PHOSAGRO
GROUP’S FUTURE TALENT
PhosAgro has been implementing
a school–college/university–facility
career guidance model since 2013.
For more information on programmes run
under this model, including collaboration
with schools, colleges and universities, and
the PhosAgro-START programme for young
professionals, see the Contributing to Local
Communities section on page 228.
For more information on a large-scale
programme of cooperation with the leading
Russian agricultural universities,
see page 242.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report PERSONNEL ASSESSMENT
The Company has a personnel
assessment system in place aimed
at aligning employees’ competencies
with the job/profession
requirements and personnel
development planning.
Additionally, personnel assessment
is designed to address the following
objectives:
• ongoing monitoring of employee
performance;
• identification of competency
development needs;
• sourcing of comprehensive
information to support decision-
making on further employee
development, employee eligibility
to be included in the talent pool,
and job appointments;
• enhancement of employee
development processes
by providing employees with
feedback in the form of assessment
findings and recommendations
on their strengths and areas
for improvement.
GRI 404-3
The personnel assessment findings
are used to:
• plan personnel training;
• create educational programmes;
• build the talent pool;
• make personnel decisions
in the context of job appointments;
• draft individual development plans
and development programmes;
• draft proposals for the management
team on the review of salaries
and other employment conditions,
and make other organisational
decisions;
• build project teams;
• select candidates to corporate
programmes and competitions.
Percentage of employees receiving regular performance and career development reviews¹, %
Category
Managers
White-collar workers
Blue-collar workers
Total by gender
2021
2022
1.5
0.9
2.1
4.5
1.6
1.0
5.1
7.7
Men
2023
2.4
1.6
1.8
5.7
2021
2022
2023
Women
0.2
0.7
1.0
1.9
0.2
0.7
0.8
1.6
0.5
1.6
0.3
2.4
The total number of Apaptit’s employees who
completed assessment in 2023 went slightly down
to 1,161 people (compared to 1,211 employees in 2022).
In the reporting year, the focus was on assessing
managers (407 employees compared to 236 in 2022)
and white-collar workers (458 employees compared
to 213 in 2022).
Personnel evaluated in 2023, people
Branch
Volkhov branch
Apatit (Cherepovets)
Kirovsk branch
Balakovo branch
Total
Managers
White-collar workers
Blue-collar workers
Men
Women
Men
Women
Men
Women
Total
41
139
79
77
336
3
41
12
15
71
45
76
53
52
15
119
46
52
226
232
15
48
107
85
255
17
14
8
2
41
136
437
305
283
1,161
5
INCENTIVES AND REWARDS
Our robust system of financial and
non-financial rewards is aligned with
the Company’s performance and
motivates all employees to improve
their performance in order to achieve
our business goals. The purpose
of the system is to incentivise staff
in order to deliver strong operating
results and increase productivity,
as well as to retain qualified talent.
Salaries are complemented by a flexible
system of incentives and bonuses paid
to employees who meet or exceed
production targets. Bonuses are paid
annually and are timed to coincide
with such professional holidays
as the Chemist’s Day and the Miner’s
Day. In 2023, each employee received
a total of RUB 100,000 on the occasion
of these two professional holidays,
while the Company’s veterans were
paid RUB 20,000.
PhosAgro prohibits any discrimination
in setting or adjusting salaries based
on an employee’s gender, age, race,
nationality, origin, or religion.
In 2023, the Company launched
a project of grade-based
compensations as a way to increase
the internal fairness and external
competitiveness of PhosAgro’s
remuneration framework. Job
assessments and grading rely
on a point-factor methodology, which
considers the knowledge and skills
of employees, complexity of tackled
issues, responsibility, and impact
on outcomes.
In 2023, the salaries of all employees
were increased by
15%.
The indexation rate is higher than
the official inflation rate for 2022
(11.94%)1
1 Boundary 2: Apatit, including its branches and standalone business units.
1 Based on the statistics of the Bank of Russia, www.cbr.ru/eng.
158
159
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report GRI 405-2
Correlation of the standard entry-level wage and remuneration of women and men
OUR INCENTIVES AND REWARDS SYSTEM ENSURES:
Region
Vologda region
Saratov region
Leningrad region
Moscow
Murmansk region
Other
Total
GRI 202-1
Difference in remuneration of men and women
Blue-collar workers
White-collar employees
Managers
2021
2022
2023
2021
2022
2023
2021
2022
2023
0.70
0.69
0.76
0.49
0.60
0.65
0.62
0.70
0.67
0.64
0.52
0.60
0.59
0.61
0.72
0.68
0.69
0.47
0.61
0.66
0.67
0.72
0.59
0.82
0.70
1.14
0.66
0.63
0.83
0.75
0.69
1.05
0.67
0.56
0.92
0.80
0.69
0.98
0.63
0.70
0.68
0.68
0.61
0.71
0.67
0.14
0.69
1.19
0.51
0.59
0.65
0.63
0.17
0.63
1.35
0.51
0.63
0.69
0.71
0.22
0.65
1.35
0.59
Ratios of standard entry-level wage by gender compared to local minimum wage
Decent pay
Region
Vologda region
Leningrad region
Murmansk region
Saratov region
Moscow
Ratios between the standard entry-level wage and the minimum wage established
in the significant regions of operation1, including gender differentiation
2021
1.18
1.33
1.00
1.06
2.30
2022
1.21
1.20
1.00
1.02
1.98
Men
2023
1.19
1.75
1.00
1.15
2.16
2021
2022
2023
Women
1.18
1.17
1.00
1.04
1.32
1.21
1.24
1.00
1.05
1.30
1.15
1.30
1.00
1.05
1.41
Average monthly pay, RUB
GRI 202-2
Proportion of senior management2 hired from the local community3,%
‘23
‘22
‘21
147,697
132,110
111,288
In the period under review, pay rises
covered all personnel categories.
They came as a result of 15% salary
indexation starting from 1 April 2023,
targeted remuneration adjustments
and the implementation of incentive
programmes.
Region
Vologda region
Leningrad region
Moscow
Murmansk region
Saratov region
Average
2021
2022
2023
48
22
92
63
44
61
47
22
92
80
36
61
50
22
90
73
36
62
1 Significant regions of operation are those with the Company’s main production facilities, maximum headcount, and governance structures.
2 Senior management includes managers at level N, N-1, N-2 (CEO, heads of functions, director for production, chief engineer of a company
3
(branch), director of a subsidiary and affiliate, adviser to the CEO). The governance levels of managerial positions are determined by an order.
In accordance with the generally accepted concept, which describes a person or a group of persons living in a certain territory regardless
of ethnic and cultural composition, local community means employees whose region (area) of registration is the same as the region
of the facility’s location. For facilities located in the Leningrad region and Moscow, local communities also include residents of St Petersburg
and the Moscow region, respectively.
160
161
Implementation of incentive
programmes to motivate
blue-collar employees to
deliver against their targets
Implementation of incentive
programmes using a
transparent system of key
performance indicators
(KPIs) to calculate
managerial rewards
Availability of financial and
non-financial rewards
Availability of benefits for
certain employee categories
Employee coverage by
social programmes
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report The Company offers financial support
to employees facing hardships in life
such as fire, flood, theft, or loss
of a close relative.
Each employee is provided with
a supplementary health insurance
policy and can benefit from
discounted dental services, including
dental prosthesis.
Employees can seek psychological,
financial, and legal assistance and
receive active lifestyle and healthy
eating advice, including through
the use of telemedicine services.
In 2023, we implemented major
projects worth over RUB 500 mln
to improve the working conditions
at our facilities.
6
SOCIAL BENEFITS AND EMPLOYEE GUARANTEES
GRI 401-2
We provide comprehensive social
support to our employees, and every
year we increase funding for social
programmes, benefits and guarantees
and expand their range.
Collective Bargaining Agreements
provide for a range of relevant benefits
as part of the government programme
to support families, mothers, and
children. Recreational summer health
resorts and specialised excursions
are organised for employees’ children
on an annual basis. The Company
provides financial assistance
to employees supporting large
families, with separate payments
made for each child. Employees
taking a parental leave to take care
of children aged 1.5 to 3 are also
entitled to monthly financial assistance.
New Collective Bargaining Agreements
formalise additional benefits
for families raising children with
disabilities. All children of employees
aged 1 to 14 receive New Year
presents, while parents of children
under 1 year of age are entitled
to financial assistance equivalent
to the cost of a corporate New Year
present for their child. Parents of first
graders annually receive RUB 10,000
in financial assistance on the occasion
of the Knowledge Day.
PhosAgro provides employees with
vouchers to local and southern
health (rehabilitation) resorts and
corporate health (rehabilitation)
resorts. Employees and their family
members can apply on a competitive
basis for a free health resort vacation
programme, with 50% of travel
expenses covered. Employees
and veterans of the Company,
as well as their family members, have
access to corporate health resorts
at a reduced price.
The Company runs a corporate housing programme by:
Offering compensation
of interest paid on mortgage
loans. Candidates are selected
using a point-based system.
The programme aims to retain
highly qualified professionals
with hard-to-find skills, including
workers from other regions.
Priority is given to employees
included in the talent pool,
participants of young talent
support programmes, and
employees with strong work
performance and a track record
of social activities;
Building corporate housing. From
2014 to 2023, five residential buildings
(622 apartments) were constructed
in Cherepovets, Kirovsk, and Balakovo;
Providing corporate accommodation
equipped with all the necessary
amenities. Additionally, employees
who lease private apartments
receive compensation for their rental
expenses.
Since the programme’s inception,
the Company has helped around
3,000 employees improve their living
conditions.
162
163
To provide opportunities for leisure
activities, foster creativity, meet
the spiritual needs of employees, and
strengthen the unity of the workforce,
the Company stages corporate and
cultural events timed to coincide
with professional holidays or other
significant dates and occasions
(Chemist’s Day, Miner’s Day, charity
festivals, Theatre Day, Victory Day,
etc.), environmental games and
campaigns, family contests (PhosAgro
Generation), and sports challenges.
These events aim to increase
employee engagement and enhance
communication within the team.
Apatit’s veteran organisations bring
together retired workers and use
corporate funding for a wide range
of social support measures and
leisure-time activities. Additionally,
a corporate pension programme
was put in place to provide financial
assistance to retired employees.
Social investment2, RUB mln
Programme
Financial aid to employees1
Recreation, rehabilitation, health resort treatment, and VHI programme
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)
2021
68.9
359.5
302.1
76.5
227.7
134.2
188.6
2022
72.2
506.2
390.1
88.5
227.1
186.4
233.1
2023
98.0
586.5
509.7
112.0
329.7
243.4
315.9
Total
1,357.5
1,703.7
2,195.2
Change 2023
to 2022, %
36
16
31
27
45
31
35
29
1
In 2023, the Company revised the methodology for calculating the indicator and included expenses incurred by the CEO’s pool.
Based on the principle of comparability, the data for 2022 and 2021 was recalculated accordingly.
2 Boundary 2: Apatit, including its branches and standalone business units.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report INDUSTRIAL
SAFETY
AREA, STRATEGIC GOALS AND HIGHLIGHTS OF 20231
Target
3.4
1
l
a
o
G
l
a
u
t
c
A
Transport safety
Reducing risks of traffic accidents
0 accidents
down
78%
transport incidents in
2021–2023
3
traffic accidents with injuries
or major damage
2
Work-related injuries
Fostering a safety culture
and adhering to the highest
occupational health and
safety standards
Reducing workplace injuries
by 10% annually1
Zero fatalities, and reducing
the number of incidents by
10% annually
0 LTIFR at the
Balakovo branch
33 injuries (vs 20 in 2022)
Target
3.4 и 8.8
l
a
o
G
l
a
u
t
c
A
3
Employee training
l
a
o
G
l
a
u
t
c
A
Target
4.4 и 8.8
Improving safety competencies
Keeping employees motivated to stay safe
and protect others
Roughly 13,000 employees of the Apatit
(around 88% of the total headcount) passed health and safety training
4
Occupational diseases
Target
3.4
l
a
o
G
l
a
u
t
c
A
Disease prevention and health improvement
among the employees of all production sites
Providing employees with access to high-
quality affordable healthcare
58
employees diagnosed with occupational
diseases
0
fatalities caused by occupational diseases
1
In accordance with the materiality principle, the quantitative metrics in this section are presented for Apatit (Boundary 2) (Apatit is a subsidiary of
PhosAgro holding its production assets)
164
165
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Health and safety management system
The Board of Directors
Strategy and Sustainable
Development Committee
• Sets strategic priorities and develops relevant policy
• Reviews executive management’s health and safety reporting
Management
Executive bodies
OHS Department
• Define and oversee the health
• Supervises OHS management functions across the Group’s companies
and safety policy
• Review all on-site incidents
within the Group on a weekly
basis
to implement OHS policies and strategies
• Collects data, does analysis, and prepares OHS reports for the Management
Board and the Strategy and Sustainable Development Committee
• Cooperates with external consultants to implement the best practices
of OHS management
• Conducts audits and inspections at the Company’s sites
Operations
Heads of production sites
• Oversee OHS policies and strategies at respective production sites
• Arrange for the development and implementation of effective response
measures following internal and external audits and accident investigations
MANAGEMENT APPROACH
GRI 403-1, 3-3
We pay special attention to making our
health and safety 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 Company introduced an integrated
health and safety management
system in line with BS OHSAS 18001.
In 2021, Apatit’s Cherepovets site
was certified and successfully audited
for compliance with ISO 45001:2018
in 2023.
Local OHS management
functions
Operational OHS staff
• Monitor the site’s compliance with OHS regulations and corporate standards
Arrange for the development of target programmes and monitor OHS events
•
and trainings
Interact with relevant regulatory authorities on behalf of the site and facilitate
inspections
Conduct internal inspections and audits, produce and present analytical
reports to the local management
•
•
STRATEGY
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.
Our Strategy to 2025 focuses
on fostering a safety culture and
adhering to the highest occupational
health and safety standards. In 2023,
we continued to implement our Health
and Safety Strategy, which defines
key focus areas and target initiatives
to reduce the risks associated with
various operations.
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.
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.
166
167
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Internal OHS communication is achieved
through:
• local health and safety committees;
• 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;
• health and safety bulletin boards,
posters and other visuals;
• corporate television (screens),
intranet site, e-mail;
• corporate periodicals;
• education by OHS officers (including
one-on-one meetings, training,
mentoring, supervision, etc.).
LOCAL HEALTH AND SAFETY
COMMITTEES
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 their work, these
committees rely on the principles
of social partnership. As part of their
activities, health and safety committees
draft and improve programmes to join
efforts of the employer, employees and
trade unions in ensuring occupational
health and safety.
Committee meetings are held at least
once a month and chaired by heads
of companies. At meetings, information
exchange and reporting are multilateral,
as both health and safety functions
and local unit heads report on health
and safety progress. All resolutions
are documented in minutes
of the meetings.
As part of these workstreams health and
safety committees consider the following
topics:
• “Golden Rules” of OHS;
• Safety Culture Transformation Project;
• OHS leadership;
• OHS motivation;
• effective OHS communications;
• contractors’ safety;
• PPE effectiveness;
• trade union report.
GRI 403-3
Occupational health functions play a key
role in ensuring safety at our facilities.
Their main objectives are:
• taking steps to ensure compliance
with OHS requirements by workers
and third parties;
• monitoring workers’ compliance
with OHS laws and regulations,
the Collective Bargaining
Agreement, OHS agreement and
other internal regulations;
• preventing workplace injuries,
occupational diseases and
improving workplace conditions;
• advising workers and contractors on,
and raising their awareness about,
occupational health and safety;
• studying and promoting best
OHS practices.
Apart from applicable laws, these
activities are regulated by:
• 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.
GRI 403-4
For better OHS communication
with employees, we have
adopted the 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:
• regular OHS meetings at business
units and enterprises;
• OHS meetings at production sites,
departments and facilities;
• union and union committee meetings
(for feedback from OHS officers);
• corporate e-mail;
• corporate periodicals;
• local health and safety committees;
• employee loyalty surveys;
• OHS questionnaires.
168
169
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 agreed time limits.
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 offering
instruments 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.
In 2023, state supervisory authorities
carried out
198 audits
at Apatit and its managed companies.
In 2023, health and safety
committees held
25 meetings
Adopted
790 resolutions
Workers are represented
at committee meetings by heads
or representatives of local unions.
IMPROVING CONTRACTOR
SAFETY PRACTICES
Measures to ensure safety
of contractors’ employees working
at our production and other
facilities are an integral component
of our OHS strategy. They include
the selection of contractors based
on a health and safety qualification
assessment, briefings, enforcing their
application of our safety tools, and
conducting relevant OHS compliance
audits.
Meeting agendas comprise nine
workstreams
ESG assessment is a key factor
in contractor selection.
Accident/incident
investigation
Occupational health
Industrial safety
Fire safety
Road traffic safety
Safety assessments
and audits
Development
of health and safety
management
Safety projects
(programmes,
initiatives)
Education and training
for more information, see the Supply
Chain section on page 128.
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),
etc. 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.
We also run internal audits conducted
by our OHS departments and
directorate, managers and employees
exercising production H&S control.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report RISKS AND OPPORTUNITIES
GRI 403-2
The following strategic risks affect our OHS objectives:
4
HR risk
6
health and safety risk
13
regulatory risk
for more information, see the Strategic Risks section on page 68
OHS-SPECIFIC RISKS
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.
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
changes
SASB RT-CH-320a.2
We are constantly working to assess
and mitigate risks. We perform
risk assessment and classify them
by severity and frequency using our
dedicated 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 Company’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.
The Company has instituted a robust
protocol that facilitates swift
communication from eyewitnesses
to the appropriate functions and
managerial personnel, inclusive
of PhosAgro’s CEO by means
of corporate communication tools
such as text message alerts and
telephone calls.
All 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 worker 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.
The Company 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.
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 developed;
• training sessions and drills held
in 2023:
– test alerts – 143,
– fire training sessions – 636,
– evacuation drills – 132,
joint fire drills with
–
EMERCOM – 5;
• a targeted programme
for upgrading Apatit’s fire safety
systems in 2023–2025 developed.
PROJECT
to roll out the OHS remote
monitoring system
at the Cherepovets site
of Apatit
The Company endorses
the initiatives put forth by state
authorities as regards OHS data
disclosure, in order to facilitate
remote monitoring measures and
alleviate the regulatory oversight
burden.
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. The technology
is expected to improve the overall
reliability and monitoring efficiency
of safety systems, and help reduce
the associated paperwork and
bureaucracy.
The OHS remote monitoring
system was put into operation
in April 2023, with the process
of data transmission
to the Automated Information
System of Rostekhnadzor
configured.
170
171
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report The solid increase in OHS expenses
is attributable to higher investments
in personal protective equipment and
training in modern OHS practices
for employees. Moreover, the ramp-up
of production along with the initiation
of upgrade and revamp projects
triggered the recruitment of extra staff.
OHS expenses of Apatit, RUB mln
This contributed to an uptick in overall
OHS spending. Specifically, there were
heightened expenses for check-ups,
establishment of supplementary fire
command stations (fire brigades),
and engagement of services from
professional rescue squads.
1,863
2,956
1,709
907
‘23
‘22
‘21
1,545
1,397
2,002
983
447
1,770
471 203
7,435
4,977
3,841
Cherepovets site of Apatit
Kirovsk branch
Balakovo branch
Volkhov branch
tailored to help drivers during their
12-hour shifts. Additionally, the Kirovsk
branch holds annual training sessions
under the Safe Driving programme, and
a driving skills competition for dump
truck operators.
Traffic accidents at Apatit
and its branches
5 3
10
3
19
18
‘23
‘22
‘21
Road
Rail
8
13
37
a 78% decrease in transport
incidents was achieved between 2021
and 2023
KEY RESULTS IN 2023
In 2023, PhosAgro maintained
an impeccable safety
record with zero fatalities
among its own employees,
as well as those of contractors,
subsidiaries and affiliates.
Additionally, the Balakovo
branch team achieved a zero
LTIFR, with a remarkable near
fivefold reduction in traffic
incidents compared to 2021.
1
TRANSPORT SAFETY
SASB RT-CH-540a.2
From 2021 to 2023, PhosAgro Group
was able to reduce the total number
of traffic accidents nearly fivefold
(by 78%) from 37 accidents in 2021
to eight in 2023.
The initiatives implemented
by the OHS Department and transport
departments to mitigate traffic
accident risks includes drafting
internal regulations to ensure safe
operation of motor vehicles, self-
propelled machines and rail transport,
performing targeted and full-scope
inspections of vehicles used by our
contractors, subsidiaries, enhancing
the competencies and skills of PhosAgro
employees responsible for operating
all types of transport, and introducing
various technical solutions to mitigate
risks of traffic accidents. For instance,
the Kirovsk branch equipped quarry
self-propelled machines with
visualisation systems for dangerous
zones. There are also ongoing pilot
tests for similar systems in underground
operations, as well as for collision
prevention systems on quarry dump
trucks. Preparations are underway
at the Cherepovets facility and
the Balakovo branch to outfit dump
trucks with a fatigue monitoring system
172
173
2
WORK-RELATED INJURIES
GRI 403-9, SASB RT-CH-320a.1, RT-CH-540a.1
There were no fatalities across the
Company’s facilities, but the total
number of work-related injuries, both
minor and severe, increased. At the
time of publishing this Report, an
official investigation is being conducted
into an incident involving a Company
employee in 2023. The incident has
been categorised in the Report as
a severe injury, but it is subject to
potential reclassification based on the
investigation findings. The was a total of
33 injuries recorded in 2023 compared
to 20 in 2022. Of these injuries, nine
occurred to contractor employees,
nine to PhosAgro’s own staff, and
15 to employees of subsidiaries and
affiliates (compared to five, eight,
and seven in 2022, respectively), which
accounted for the largest proportion
of all work-related injuries, including
major accidents. We are convinced
that rolling out the existing methods
and tools in the field of occupational
safety among personnel of contractors,
as well as subsidiaries, affiliates and
managed companies, will further
reduce the level of occupational
injuries among this category
of personnel.
Most of the injuries reported in 2023
were related to falls and contact
with moving and rotating objects
and equipment, as well as impact
of hazardous substances.
The main causes of work-related
injuries in 2023 were poor work
organisation, violations of labour
and industrial discipline, personal
negligence, and underestimation
of risks by the injured persons.
The Company plans to continue implementing its safety improvement
strategy by leveraging advanced safety tools and modern comprehensive
solutions and approaches that have already proven effective, including:
• senior management’s
• providing employees with modern
• developing and implementing
leadership and commitment
to health and safety;
and effective personal and collective
protective equipment;
• allocating sufficient funding
to ensure occupational,
industrial and fire safety;
• knowing and applying
international and domestic best
practices;
• improving the internal incident
investigation process to identify
and eliminate root causes;
• implementing project solutions
and targeted programmes
to improve workplace safety;
• involving blue-collar workers
(OHS officers) in directly managing
health and safety in their business
units;
• reviewing the structure and
functions of occupational health,
industrial safety and fire safety
services with a focus on enhancing
control and preventive work;
a system of incentives
motivating all categories
of employees for safe working
practices;
• developing and updating
e-courses to educate
employees in corporate health
and safety requirements;
• integrating corporate health
and safety requirements into
the work of contractors;
• selecting and appointing highly
qualified leaders to key positions
in occupational health, industrial
safety and fire safety services;
• digitalising data management
processes to support high-
quality analysis and effective
management decision-making.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report LTIFR1, per 1 mln of hours worked
Item
Employees, including
Apatit
Kirovsk branch of Apatit
Balakovo branch of Apatit
Volkhov branch of Apatit
Employees + staff of external contractors (including
subsidiaries, affiliates and managed companies2)
Fatalities as a result of work-related injury, per 1 mln of hours worked
Item
Employees
Staff of external contractors (including subsidiaries,
affiliates and managed companies)
Severe injuries (excluding fatalities), per 1 mln of hours worked
Item
Employees
Staff of external contractors (including subsidiaries,
affiliates and managed companies)
Work-related injuries, per 1 mln of hours worked
Item
Employees
Staff of external contractors (including subsidiaries,
affiliates and managed companies)
2021
0.85
0.40
1.18
0.00
2.28
0.81
2021
0
0.03
2021
0.05
0.07
2021
0.85
0.823
2022
0.32
0.12
0.22
0.80
0.88
0.38
2022
0.05
0
2022
0
0.04
2022
0.36
0.44
2023
0.37
0.32
0.41
0.00
0.80
0.61
2023
0
0
2023
0.04
0.17
2023
0.37
0.82
Number of hours worked by the Company’s employees and staff of external contractors
Item
Employees
Staff of external contractors (including subsidiaries, affiliates and
managed companies)
2021
2022
2023
19,893,115.33
22,196,069.58
24,508,418.38
29,207,298.96
27,194,133.46
29,222,666.40
1 Lost time injury frequency rate, excluding fatalities.
2 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, Tirvas Public Catering,
Khibiny Airport, 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. This applies to all references to subsidiaries and affiliates in this section.
Including a fatality.
3
174
175
Work-related injuries over the past three years
Branches
Minor injuries
Severe injuries
Fatal injuries
Total
‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23
Cherepovets site of
Apatit
Balakovo branch
Volkhov branch
Kirovsk branch
Subsidiaries and
affiliates
3
–
4
9
7
External contractors
14
1
2
2
2
6
5
3
–
2
3
11
8
–
–
–
1
1
1
–
–
–
–
1
–
–
–
–
1
4
1
–
–
–
–
-
1
–
–
–
1
–
–
–
–
–
–
–
–
3
-
4
10
8
16
1
2
2
3
7
5
3
-
2
4
15
9
WORKER TRAINING
3
ON OCCUPATIONAL HEALTH AND
SAFETY
GRI 403-5
In 2023,
13 007 employees
of the Apatit completed health
and safety trainings and passed
the relevant knowledge tests
88 % of the total headcount
The Company offers continuous
education for employees, conducts
workshops and trainings.
• Safe Behaviour Fundamentals
– in-person training for new hires
and employees of business units
where accidents have occurred, with
the focus on risk identification and
management methods
• Training of the Company’s and
contractors’ staff on working
at heights
• The Rules – a training for white- and
blue-collar workers in the modern
methods to raise employees’
awareness of safety rules
• Golden Rules – training
the Company’s (online training) and
contractors’ (workplace training)
employees.
PhosAgro makes efforts to improve
OHS competencies and knowledge
of its staff. Employees of the Company
undergo online and in-person
training. 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.
Whenever required, the courses
developed earlier are updated
following changes in the law and
the Company’s internal regulations.
In 2023, we developed and updated
the following e-courses:
• operation and maintenance
of Apatit’s rail infrastructure;
• organising and exercising production
H&S control at Apatit’s hazardous
facilities;
Employees undergo OHS training,
including that in basic fire safety and
electrical safety, industrial safety
pre-certification sessions, and drills
in the Vysota training centre.
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 Company and some contractors
are offered a number of additional
courses.
We use animated videos to improve
OHS training and remind employees
about workplace safety.
In 2023,
employees of Apatit completed
7,300
13 e-courses
in occupational safety
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report 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.
Raising awareness about occupational
health and safety, each month
the Company issues check lists
on the month’s topic. In 2023, such
topics included the “Golden Rules”
of OHS, use of PPE, safe behaviour, and
high-risk operations.
In the reporting year, the Company
was actively carrying out briefings
for each shift – daily OHS trainings
for employees, 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.
The key objectives of such
briefings are:
fostering leadership skills among
mid-level managers;
developing managers’
communication skills;
obtaining employee feedback
on safety issues;
maintaining direct
communication between
managers and their subordinate
staff.
Changes to labour safety promotion
programmes
Senior executives (CEOs
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 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 Company established
the following KPIs with regard to OHS:
• LTIFR covering all staff categories,
including contractors;
• zero fatalities among all employee
categories, including contractors;
• timely implementation of action items
from improvement notices issued
by supervisory authorities.
The Company has developed
OHS promotion programmes
to maintain each PhosAgro employee’s
engagement 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.
The incentive system includes both
individual and collective programmes.
176
177
Individual incentive programmes (with results summarised quarterly):
Once a quarter
Best OHS Employee
Safety Ideas
Best Public Scrutiny User
1st place – RUB 15,000
2nd place – RUB 10,000
3rd place – RUB 5,000
RUB 30,000
+ RUB 5,000 for every idea
implemented
1st place – RUB 15,000
2nd place – RUB 10,000
3rd place – RUB 5,000
Once a year
CEO’s OHS Achievement
Award
Best OHS Business Unit
RUB 125,000
RUB 100,000
+ RUB 50,000 for teams
participating in the super final
The employee incentive system is
being improved annually, with an
increase in funding (RUB)
‘23
‘22
‘21
‘20
2,523,053
2,339,090
2,063,218
445,000
4
PROMOTION
OF WORKER HEALTH
GRI 403-6, 403-7, 403-10
In addition, in 2023, occupational
diseases were detected in two
employees who work for subsidiaries
and affiliates and perform their job
duties at the Cherepovets facility
and the Kirovsk branch of Apatit.
The notable growth in the number
of detected occupational diseases
in 2023 compared to previous
years is due to the introduction
of in-depth medical examinations
at the occupational pathology centre.
PhosAgro places a strong emphasis
on disease prevention, health
improvement, and high-quality
affordable healthcare and prevention
for the employees of its production
sites.
The Company takes part in the Health
360 programme run by the Russian
Chemists Union. In 2023:
1. The Volkhov branch of Apatit
was the runner-up in the Wellness
Culture Development nomination
of Russian national contest dubbed
Investing in the Development
of a Healthy Country. Best
Corporate Practices
2. The Volkhov branch of Apatit
won a leader diploma at Healthy
Working Environment 2023,
a contest of corporate health
promotion programmes
for employees in the Northwestern
Federal District
3. The Volkhov branch of Apatit took
the third place in the Leningrad
region Cup in Nordic walking
4. Apatit was awarded a participant’s
diploma in the Sports Culture
Development nomination of Russian
national contest dubbed Investing
in the Development of a Healthy
Country. Best Corporate Practices.
In 2023, the Company continued to
expand its staff support programmes
(mental health support, online advice
for personal circumstances, etc.) and
programmes to promote health and
well-being (telemedicine, healthy diets,
emotional unwinding, etc.) to benefit
more employees.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report All employees who have signed
an employment contract with
the Company benefit from long-
term voluntary health insurance
(VHI) covering an extended range
of risks. Health insurance contracts
are signed annually as part of long-term
cooperation with the SOGAZ insurance
company.
The benefits include:
• health resort (rehabilitation) treatment
at corporate resort centres in our
regions of operation and countrywide;
• services of outpatient clinics and
health posts (including those available
24/7) at the Company’s production
sites, operated by corporate medical
centres and private and state-run
healthcare facilities;
• treatment (expensive, dental, medical
counselling) at healthcare facilities
in our regions of operation and
in other Russian regions.
On-site clinics can provide accident and
emergency care, as well as specialist
advice. PhosAgro also has mobile
medical teams and organises screening
sessions for its employees.
Employees of all PhosAgro facilities
enjoy access to Telemed, a telemedicine
service offered by SOGAZ.
PhosAgro’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
invested over RUB 3 bln in this
programme in 2013–2023.
GRI 403-10
Number of employees diagnosed with occupational diseases
2021
2022
2023
4
26
0
0
30
1
14
0
0
15
1
57
0
0
58
In 2021–2023, there
were no fatalities caused
by occupational diseases.
As part of preventive care and health promo-
tion efforts for PhosAgro’s employees and vet-
erans in 2023, the Company purchased
4,140 vouchers
for them to go to health resort facilities
Employees of the Company and
members of their families have access
to corporate recreation centres and
health resorts in Southern regions
at a reduced price. In 2023, over 1,000
vouchers were granted for employees
to spend their holidays at southern
health resorts.
Branches
Cherepovets site of Apatit
Kirovsk branch of Apatit
Volkhov branch of Apatit
Balakovo branch of Apatit
Total
In 2023, as part of initiative to improve
working conditions, employees of Apatit
business units in Cherepovets received
modern, comfortable, and durable chairs
selected following tests at business units
and surveys in Apatit and its branches,
with as many as 99 chairs replaced
in workshops.
In 2023, the Company continued
changing its menu of dietary and
healthy meals provided to employees
working in harmful conditions. Quality
of the meals is subject to regular control
in cooperation with the trade union.
Every day, each canteen
at the Company’s facilities serves
up to 800 people, and all meals
are assessed each quarter based
on employee surveys, review
of complaints, and canteen attendance
levels. Employees can comment
on the quality of meals in a real-time
mode by completing a survey available
in corporate canteens via a QR code.
On top of that, we have a dedicated
working group that attends all of Apatit’s
sites to assess food quality and canteen
conditions.
In 2021, PhosAgro started a pilot project
to use a traffic light labelling system
for foods as a way to promote healthy
dieting among employees.
more than
22,000
employees, their family members,
and pensioners enjoyed vacations
at corporate recreation centres
PhosAgro’s facilities have corporate
fitness centres, which include game
halls, gyms and swimming pools
and are available to employees
on a daily basis. The pool of our
Cherepovets facility offers classes
in water aerobics and swimming
lessons, both very popular among
employees. In 2023, over 25,000
people visited the Cherepovets
sports and recreation facility.
An annual sports contest (Spartakiad)
is held for employees in 18 sports
with new sports introduced. Teams
in football, volleyball, and other sports
represent the Company in various levels
of competitions, including national ones.
Since 2020, our production facilities
provide free psychological support
to employees, with in-house
psychologists available to them
for counselling and advice. As part
of the Employee Mental Health
Support programme, the Company
offers meetings in person, online
interviews, and comprehensive events
such as webinars, training sessions,
and marathons to minimise conflicts
in teams, improve psychological
resilience, and increase performance.
In 2023, on-site psychologists received
3,257 requests from the Company’s
employees.
We continue to extend our Psychological
Relief Room, a project kicked off in 2021
at the Balakovo branch. In the reporting
year, a plan was developed to roll out
such rooms at the Cherepovets site.
In 2023, Healthy Lifestyle Mania, Apatit’s
employee support programme designed
to promote active lifestyles, physical and
sports activities, and healthy nutrition
among employees, gained traction
among the staff of Apatit’s Balakovo
branch.
To promote traditional spiritual values,
improve social and psychological
climate in the team, and enhance
emotional well-being, the Company
does a lot to help build and reconstruct
Orthodox churches.
Those employees whose
children are involved
in the DROZD project
(Educated and Healthy
Children of Russia) annually
take part in several joint
training sessions and
sports contests held among
families. At the DROZD
sports facilities, our
employees can work out and
get ready for GTO (Ready
for Labour and Defence)
fitness tests.
TARGETED
PROGRAMME
for upgrading Apatit’s
fire safety systems
in 2023–2025
In 2023, the facilities
of the Cherepovets facility,
Volkhov and Balakovo branches
were audited for the availability
and compliance of fire
protection systems with
the requirements of applicable
rules and regulations.
Following the audit,
we identified facilities in need
of repair, replacement
or installation of new automatic
fire protection systems and
carried out an initial assessment
of the cost of the entire range
of work to implement the target
programme. The Company
defined key requirements
for the implementation
of the targeted programme
for upgrading Apatit’s fire safety
systems, namely:
• the procedure for works
in 2023 to implement
the targeted programme
at the facilities of Apatit and
its branches;
• requirements for contracts
with parties involved
in the targeted programme;
• milestones for the whole
period of the targeted
programme implementation
at the facilities of Apatit and
its branches;
• the procedure for financing
the targeted programme
for upgrading Apatit’s fire
safety systems.
178
179
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report TRANSFORMATION
OF SAFETY CULTURE AND
OHS MANAGEMENT SYSTEM
Since 2021, we have been running
a project – Transformation of Safety
Culture and OHS Management
System – focused on switching
to proactive OHS management.
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 (we are currently
at stage 2.2).
The project covers key business
units of Apatit, entities under
management, subsidiaries and
affiliates, and key third-party
contractors engaged by our
production sites.
180
181
In 2023, as part of the Risk Hunting initiative, a total of 2,529 risks were
identified, out of which 374 were classified as critical. Measures for
elimination or mitigation were developed for each risk. By the end of 2023,
60% of the critical risks (224) were eliminated.
In 2023, we continued our efforts to implement, develop, and improve
transformation tools.
Leadership visits – comprehensive
study of business units by top
executives of enterprises to jointly
address identified risks and develop
improvement actions.
Audits of high-risk operations –
improving the safety of hot and
gas hazardous works, underground
construction work, maintaining
standards by means of audit based
on a checklist for a certain type
of work.
Standard operating procedures –
a step-by-step operating protocol
for employees when performing
work beyond the scope of high-risk
operations when servicing specific
process equipment.
Risk hunting – engagement
of managers at the business unit
level in ensuring appropriate working
environment. Exploring the business
unit’s site with the basic question
“what can go wrong?” Mitigating
occupational safety risks.
Briefings for each shift – daily
awareness efforts for subordinate
personnel to reiterate
on hazardous factors and control
measures prescribed when issuing
a shift assignment before the start
of a shift, admission to work
in accordance with the expected
types of work and planned
production operations.
In 2023, as part of the transformation
of safety culture and OHS management
system initiative, the Company
implemented Leadership in Safety
Management, a programme of strategic
sessions for N1–N3 managers.
Session objectives:
• to raise awareness of safety issues
among N1–N3 managers;
• to shift from inspections and
penalties to mentoring and
proactive oversight;
• to build ability to deal with
employee stereotypes and beliefs;
• to enable managers to show
commitment to safety by personal
example;
• to build understanding
of leadership impact on safety
culture;
• to be able to tell the difference
between the notions of “leader”
and “manager”;
• to develop a desire
to influence safety culture and
an understanding of how to do so.
Following an audit of the corporate
work permit systems in place
at the Cherepovets facility and
Volkhov branch conducted in 2022,
in 2023 the Company developed
a target model of the work permit
system to be rolled out across our
assets as early as in 2024.
TARGET MODEL OF WORK PERMIT SYSTEM
Step 1
Step 3
Step 5
Step 7
Work planning
Controls
implementation
Issuance
of a permit
Work performance
and monitoring
of compliance
Risk assessment
and development
of controls
Audit of controls
Pre-work
briefing
Completion and
closing of the work
permit
Step 2
Step 4
Step 6
Step 8
3
2
0
2
т
е
ч
т
о
й
ы
н
н
а
в
о
р
и
р
г
е
т
н
И
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
ENVIRONMENTAL
REVIEW
AREA, STRATEGIC GOALS AND METRICS
1
Climate
Climate action
and reduction
of GHG emissions
l
a
o
G
2028:
Gross emissions
Per unit emissions
Scope 1 —
Scope 1 —
4,175.5
kt of СО₂-eq.
109.1
kg of СО2-eq./t
Gross emissions:
Per unit emissions
Scope 1 —
Scope 1 —
4,778.9
kt of СО₂-eq.
down 2.6% y-o-y
l
a
u
t
c
A
128.5
kg of СО2-eq./t1
down 3.5% y-o-y
• Delivering on the Climate Agenda project
•
Introduction of the internal carbon price
• Contracting TGC-1 as a supplier of green electricity
generated by HPPs
• Assessing the actual impact of the carbon border
adjustment mechanism on the Company’s operating
expenses and implementing a project to automate
calculation of the carbon footprint of products
Implementing the low-carbon transition plan
•
Target
12.4, 13.1
and 13.2
2
Energy efficiency
Reduction of Scope 2 GHG emissions
l
a
o
G
l
a
u
t
c
A
Target
12.4 and 13.1
to 794.7 kt of СО₂-eq.
by 2028 as a result of implementing the Energy Efficiency Programme
42.5%
self-sufficiency
in electricity supplies
down 0.9% y-o-y
Scope 2 —
• Assessing the energy management system
829.7
kt of СО₂-eq.
up 0.99% y-o-y
for compliance with ISO 50001
• Updating the list of initiatives under the Energy
Efficiency Programme
• Upgrading the lighting system to LED
•
• Replacing compressors with more efficient equipment
Installing frequency converters at pumps
3
Waste
Waste reduction
2025:
l
a
o
G
l
a
u
t
c
A
Target
12.4
40% of hazard class 1–4 waste recycled
and decontaminated
40.17% of hazard class 1–4 waste
recycled and decontaminated
up 3.6% y-o-y
• Enhancing ore processing mechanisms (Kirovsk)
• Using phosphogypsum
•
Implementing phosphogypsum conversion at Balakovo branch
1 The indicator was calculated as the ratio of the (Scope 1) gross emissions under GRI 305-1 to the total output of finished and semi-finished
products.
182
183
4
Air
Reduction of air
emissions
2025:
Pollutant emissions —
0.80 kg/t
0,799 kg/t
per unit pollutant emissions
to the atmosphere
up 0.8% y-o-y
•
Installing and modernising gas recovery equipment in upgraded and new
shops (Volkhov branch)
• Enhancing dust suppression of dusty surfaces (Kirovsk branch)
• Upgrading the wet-process phosphoric acid production unit and
reconstructing the SK-20 sulphuric acid production unit
• Upgrading complex mineral fertilizer production
l
a
o
G
l
a
u
t
c
A
5
Water
Responsible
water use
l
a
o
G
l
a
u
t
c
A
4.72 m3/t
waste water discharge
into surface waters
down 10.5% y-o-y
6
Biodiversity
2025:
Waste water discharge
into surface waters —
4.16 m3/t
6.05 m3/t
water withdrawal
down 5.8% y-o-y
Water withdrawal —
5.16 m3/t
• Delivering on stage 2 of the Water
Use Optimisation Programme
(Cherepovets site)
Implementing initiatives to reduce water
consumption at the Kirovsk branch
•
Target
3.9, 12.4
and 13.1
Target
3.9, 6.3
and 12.4
l
a
o
G
l
a
u
t
c
A
Target
3.9 and 15.1
Preservation of biodiversity in regions of the Company’s operation at a level securing
sustainability
• Development and inception of comprehensive biodiversity protection programmes (Cherepovets site, Volkhov and
Kirovsk branches)
• Releasing young fish into water bodies across the Company’s regions of operation
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report STRATEGY
SASB EM-MM-160a.1, RT-CH-410b.2
At PhosAgro Group, we attach
much importance to environmental
protection and safety, as well as climate
risk management. Proper focus
on all of these areas helps secure
the Company’s sustainable development
and well-being of the regions across
its geography.
Our Strategy to 2025 provides for strict
compliance with statutory requirement
on environmental responsibility
and practices aimed at minimising
the impact of the Company’s
operations throughout the whole life
cycle of a fertilizer, from mine to food
products.
The key priorities set out in PhosAgro’s
Environmental Policy are careful use
of natural resources and reduction
of the environmental footprint.
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) and national goals.
In 2020, we started implementing
the Climate Strategy based
on the Company’s vision and expertise
in GHG emissions management.
The document reviews climate
risks and opportunities extensively,
setting targets for Scope 1, 2, and
3 GHG emissions and presenting
the low-carbon transition plan.
PhosAgro carries out 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.
184
185
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 implementing a range
of projects aimed at minimising waste
generation and increasing the share
of recycled waste.
In the scope of the strategic objectives
to reduce air emissions, PhosAgro
is running a comprehensive programme
to re-equip production facilities and cut
pollutant emissions.
In addition, we developed the Water
Strategy in 2020 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,
including potential scarcity of water, set
targets for water withdrawal and waste
water discharge and designed a detailed
action plan for each site to achieve
the targets.
The Company sticks to its biodiversity
management system comprising
the assessment of potential impact,
Based on the assessment results,
we mapped out six strategic
focus areas of environmental
protection:
climate;
energy efficiency;
waste;
air;
water;
biodiversity.
interaction with a wide range
of stakeholders, as well as monitoring
and reporting 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.
APPROACH TO ENVIRONMENTAL MANAGEMENT
GRI 3-3
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
ENVIRONMENTAL MANAGEMENT
SYSTEM
Our environmental management
system is integrated in the Company’s
overall management framework and
is a key element in our approach
to managing environmental
responsibility.
In 2022, the environmental
management system passed
a recertification audit across
the Company’s production sites and
was found to be in full compliance with
ISO 14001. In 2023, it successfully
underwent an inspection audit under
the same standard.
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 Company’s operations.
The facilities have also put in place
a procedure to manage internal 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 Company’s
management to analyse environmental
management efficiency.
natural systems and resources.
Our operations undergo a stringent
assessment for compliance with
the Environmental Policy and
the Company’s internal regulations.
For the full text of the document,
please visit the Company’s website .
We adopted a unified approach to environmental management that
relies on:
Company-wide control
Putting Strategy to 2025 into action
and compliance with the Company’s
environmental policies are overseen
by the Strategy and Sustainable
Development Committee that
regularly reports on the Company’s
progress to the Board
of Directors. The Department
of Ecology and Environmental
Management exercises executive
control over the Company’s
environmental activities.
A unified management system
The consistency of PhosAgro’s
activities aimed at environmental
protection and strengthening
of the Company’s environmental
performance results from continuous
development of the environmental
management system built in line with
the ISO 14001 standards.
Strict compliance
with applicable statutory and
regulatory requirements.
For PhosAgro’s Environmental
Policy, see the Company’s
website.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report ENVIRONMENTAL MANAGEMENT FRAMEWORK
Board of Directors level
Board of Directors
Strategy and Sustainable Development Committee
Defines the Company’s environmental
policy and sets strategic goals to ensure
environmental protection and reduce the
negative impact of its operations
• Maintains and regularly assesses PhosAgro’s internal sustainability
regulations and monitors their development, relevance, quality and efficiency,
as well as compliance with applicable laws and internal sustainability
objectives
• Engages with key stakeholders and fosters healthy and sustainable
communities across all regions of operation
• Prepares recommendations to the Board of Directors on determining the
Company’s strategic sustainability objectives
Group Management level
Department of Ecology and
Environmental Management
of JSC Apatit
Responsible for general management, organisation and coordination of
efforts to continuously enhance environmental management
Operational level
Environmental Control
and Management Service
Officers in charge
of environmental protection
Fulfils commitments to the ongoing
environmental improvement and
reduction of the environmental footprint
• 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
186
187
Our strategic environmental
protection goals are set out
in the Company’s Strategy
to 2025, as well as Water
and Climate strategies. Their
achievement is included
in the KPIs of managers and
senior executives.
COMPLIANCE WITH STATUTORY
AND REGULATORY REQUIREMENTS
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 and
regulators’ decrees. To that end, the
Company has in place 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 an adverse
environmental impact are included
in dedicated state registers, with
relevant categories assigned to them.
PhosAgro has all necessary permits
in place for each of these facilities.
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.
In 2021, in order to prevent adverse
effects of cross-border handling
of Russian chemical products,
the Russian Ministry of Industry
and Trade initiated a flagship pilot
in the chemical sector, which gave
rise to innovative development
proposals and support measures
for exporters of chemical products.
The key pilot objectives were
to determine the baseline chemical
footprint of products and develop
a plan to reduce (and, ultimately,
eliminate) the negative impact
of the used hazardous chemicals
on human health and the environment.
In 2023, the Company participated
in the project to measure the chemical
footprint of products.
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.
For more information on the project, see
page 96 of the Customers and Product
Management section.
Spending on environmental protection, RUB mln
Item
Current environmental protection expenses (form 4-OS)
Investments in fixed assets aimed at environmental protection (form 18-KS)
Environmental impact payments
Environmental fines and damages
Total
2021
5,510.3
4,168.8
179.291
4.258
2022
6,534.6
2,396.7
192.573
2.464
2023
7,394.921
3,544.013
204.927
1.584
9,860.7
9,126.120
11,145.445
The Company takes steps to remedy
the harm caused by an emergency
in 2019 by committing RUB 1,584,000
to the reproduction of aquatic
biological resources in 2023.
No audits of Apatit by local bodies
of Rosprirodnadzor were held
in 2023. There were no administrative
proceedings involving the Company,
and hence no fines.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report Environmental impact payments, RUB mln
Atmosphere
Maximum permissible emissions
Temporarily permitted emissions
O-limit
Aquatic environment
Standard permissible discharge
Temporarily permitted discharge
O-limit
Waste
Limit
O-limit
Total
Including o-limit
Share of o-limit in total payments, %
In 2023, the increase in the Company’s
environmental impact payments was
driven by a higher indexation rate
used in the calculations. Over-limit
payments accounted for 0.86% of total
environmental impact payments
(vs 1.22% in 2022). They resulted
from exceeding the permissible
emission limit for nitrogen oxides
by one of the emission sources
at the Cherepovets facility.
ASSESSMENT, ANALYSIS,
AND MONITORING
Continuous improvement is inherent
in our environmental management.
The Company identifies areas
2021
2.440
0.000
0.018
3.886
2022
2.797
0.000
2.355
4.864
2023
2.815
0.000
1.756
4.366
0.000
0.000
0.000
172.091
0.000
178.416
0.018
0.010
182.606
0.000
192.620
2.355
1.220
195.990
0.000
204.927
1.756
0.860
for improvement by reviewing
its management system using
an effective mechanism, which
includes external and internal audits
of the environmental management
system, activities to monitor and
assess the Company’s performance,
including by a wide range
of stakeholders, and the analysis
and assessment of PhosAgro’s
performance by the Company’s
management. These efforts enable
us to work out corrective action plans
and proposals on how to develop and
improve the system.
Stakeholder engagement is essential
for the Company’s planning. Public
discussions 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.
For the list of public discussions,
please visit the Company’s website.
PhosAgro Group public discussions coverage
Item
Number of public discussions
Average number of participants per
discussion
2021
15
27.2
2022
2023
12
6
17
22
When assessing the Company’s
performance, much attention is paid
to the analysis of ESG ratings and
investor feedback.
188
189
RISKS AND OPPORTUNITIES
Environmental risk management is an integral part of the Company’s risk
governance framework. The general approaches to managing risks are set our
in the Strategic Risks section.
The following strategic risks affect our environmental protection objectives
7
environmental risk;
13
regulatory risk;
19
climate risk.
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.
For more information, see the Strategic Risks section on page 68
THE ENVIRONMENTAL PROTECTION RISKS INCLUDE
non-compliance with
the existing regulations
on environmental impact
energy efficiency issues.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report 1
CLIMATE
SASB RT-CH-110a.2 / EM-MM-110a.2
Our targets
1
1
Reduce gross GHG emissions
(Scope 1, 2, 3)
by 14%
by 2028 vs 2018
2023 highlights
1
Scope 1, 2, 3 gross emissions
19,210.7
kt of CO₂-eq.
up 12.7% vs 2018
3
3
In 2023, we used green energy
(purchased hydroelectric power)
to produce
18.3%
of phosphate rock and nepheline
concentrate
2
2
2
Reduce per unit GHG emissions
(Scope 1)
by 31%
by 2028 vs 2018
Scope 1 emissions of СО₂-eq.
128.5 kg/t
down 15% vs 2018
Gross and per unit GHG emissions (Scope 1 and 2) across the Group, kt of СО₂-eq.
Item
2018
2020
2021
2022
2023
Goal 2028
Gross GHG emissions (Scope 1), kt
4,624.6
4,856.5
4,775.8
4,909.0
4,778.9
4,175.5
Gross GHG emissions (Scope 2), kt
Per unit GHG emissions (Scope 1), kg/t
924.1
150.5
978.3
143.6
893.3
135.5
821.6
133.1
829.7
128.5
794.7
109.1
PhosAgro has LEAD status under
the UN Global Compact and
is a participant of the Climate Ambition
initiative.
Starting 2021, the Company has been
making annual climate disclosures
in line with the TCFD standards and
key requirements of the new IFRS
S2, which enables the most thorough
disclosure of the climate-related
aspects of PhosAgro Group’s strategy,
risks and opportunities, management
approach, results, and indicators.
STRATEGY AND MANAGEMENT
APPROACH
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.
GRI 3-3
The Company focuses on climate
change in line with the double
materiality principle: on the one hand,
it identifies and assesses the impact
of its operations on climate all along
the value chain from extraction of raw
materials to consumption of finished
products. On the other hand,
it projects how climate change affects
PhosAgro’s business, strategy, and
financial planning.
Climate matters feature prominently
in PhosAgro’s strategic and investment
decisions, as well as in its day-to-day
management. For instance,
in the reporting year, we applied
the internal carbon price mechanisms
developed in 2022 in the evaluation
of investment projects. 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 the Company’s business, strategy,
and financial planning. The Group
develops and takes consistent
steps to reduce its carbon footprint
and closely interacts with partners
across its value chain (suppliers and
consumers) and other stakeholders
domestically and worldwide.
PhosAgro’s Climate Strategy
was adopted in 2020.
It is a comprehensive document
setting out the Company’s
climate policy in the face
of growing climate change and
uncertainty.
Main principles of PhosAgro
Group’s Climate Strategy:
• setting up targets to reduce
GHG emissions in line with
the Science Based Targets
initiative; using climate scenario
analysis;
• integrating climate risks
into the comprehensive risk
management framework
for investment and day-to-day
business activities;
• utilising technology-related
measures along with proper
organisation and management,
as well as sound social and
personnel policy, to reduce
GHG emissions;
• identifying not only risks, but
also attractive climate-related
investment opportunities and
making long-term plans for them;
• promoting awareness
of the Company’s climate initiatives
and plans, as well as cooperation
in specific areas;
• engaging stakeholders to reduce
GHG emissions along the value
chain.
The Strategy has set the following
goals:
• to minimise 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 develop innovative fertilizers
and efficient plant nutrition
systems to reduce Scope 3
GHG emissions from the use
of fertilizers by farmers;
• 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.
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APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report The Company is currently focused
on creating particular metrics
reflecting the impact of climate action
in production and management
processes on financial indicators.
To that end, we assessed the impact
of the carbon border adjustment
mechanism EU CBAM on PhosAgro’s
operating expenses. The mechanism
covers Russian industrial products,
including mineral fertilizers. In 2023,
the Company established a working
group responsible for developing
a way to assess the carbon footprint
of products under the EU CBAM
. The working group created
an effective mechanism to measure
carbon footprint per each tonne
of fertilizer based on a transparent
calculation methodology
for GHG emissions, which covers
production processes and semi-
product flows fully in line with
the CBAM guidelines.
Low-carbon transition plan
The low-carbon transition plan
was developed in 2020 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.
Actions to deliver the Climate
Strategy
In 2023, we continued to implement
initiatives under the climate project.
The Company’s experts continued
to explore options for absorbing
greenhouse gases in order to select
the most suitable ones. In 2023,
we also launched the Carbon
Footprint Compensation project
aimed at absorbing (compensating
for) GHG emissions, with a carbon
footprint compensation farm being
set up in the Vologda region. In 2023,
we planted additional 10 thousand
coniferous and 15 thousand.
Risks
Opportunities
R1 – disruptions in production
processes and logistics operations
due to increasing acute climatic effects
and other climate-related factors.
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.
R3 – PhosAgro Group’s failure to comply
with regulations reducing its negative
environmental footprint (following
the adoption of the carbon border
adjustment mechanism).
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.
10 thousand
coniferous seedlings,
RISKS AND OPPORTUNITIES
GRI 201-2
15 thousand
deciduous seedlings
were planted additionally at the carbon
farm in 2023
PhosAgro identifies its climate risks
and opportunities based on climate
change. The process is influenced
by physical (changes in natural
processes or phenomena) and
transitional factors of various nature
(changes in the policy and regulation
with a view to fulfilling low-carbon
transition).
Climate risk priority map
Probability
Low
h
g
H
i
y
t
i
l
a
i
r
e
t
a
M
Medium
High
R2
R3
R4
R1
R5
Emerging
Manageable
Relevant
The assessment is done
Process description:
quarterly.
Covered time horizon(s):
short-term,
medium-term,
long-term.
the Company’s climate risk management forms an integral part
of its comprehensive risk management system (RMS), with all
its elements embedded in PhosAgro’s existing structure. The RMS
relies on the Company’s Risk Management and Internal Control Policy
and other internal policies and procedures, as well as the applicable
Russian and international standards.
As part of our comprehensive risk
management framework, we identify,
assess and manage climate risks.
Covered value chain stages – direct
operations up and down the value
chain. Climate risk management
process is baked in the company-wide
risk management processes.
As part of the project
implementation in 2023,
the Company developed
and approved:
• guidelines and methodology
for calculating the carbon
footprint of products
(validated by a reputable
international certification
authority);
• carbon footprint calculation
methodology compliant
with the EU carbon border
adjustment mechanism;
• a mechanism
for the transition to low-
carbon energy sources and
acquisition of green energy;
• rules for using the internal
carbon price (adopted and
put to use).
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APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report KEY INITIATIVES IN 2023
Focus areas
Climate-related risk and
opportunities
Description and results
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
R1, R2, O1
Our employees take part in events dedicated to sustainable
development and corporate climate responsibility
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
Based on the outcomes of the Climate Agenda project, we
continued to consider and implement thoroughly researched
and technically feasible initiatives and 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.).
Additionally, in 2023, a dedicated task group set the stage for
implementing the EU CBAM, with carbon footprint calculation
methodologies and procedures put in place and carbon
footprint assessed for 4Q of 2023
Develop a set of technological
measures to mitigate the negative
impact of production processes
on climate
R1, R2
Technical and technological initiatives were developed
to reduce direct GHG emissions. To this end, we engaged
one of the global leaders among consulting firms
Approve a comprehensive plan
of interaction with value chain
participants
R1, R2, R3, R4, R5, O1, O2,
O3
A plan of interaction with value chain participants
was developed and adopted for implementation (company-
customer and 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 impact matters and the risks and opportunities
arising from climate change were integrated into personnel
trainings and added as matters disclosed in the report, data
book, and considered by the Board committee and Board
of Directors, which helps to embed this topic into PhosAgro’s
culture
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
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.
As part of the climate strategy
development in 2020, we adopted
climate scenarios and determined
respective scenario parameters that
are most probable and significant for
the Company 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:
е
и
н
я
и
л
В
• 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.
Experts assessed the 2°C scenario
as the most probable, hence it was
selected as the basis for setting
targets, evaluating risks and
opportunities, and developing plans
under the low-carbon transition.
PhosAgro identified projected
changes in climate risks and
opportunities under the adopted
climate scenarios based
on risks, opportunities, scenario
parameters, and time frames.
In doing so, the Company focused
on its operations, strategy, and
financial planning.
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.
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APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report
Description and results
Focus areas
Introduce regular climate-related
reporting in accordance with Russian
and international standards
Climate-related risk and
opportunities
R3, R4, O1
In 2023, the mining and processing plant of Apatit (its Kirovsk
branch) purchased 300 mln kWh under the agreement with
TGC-1, with the energy generated by small hydroelectric
power plants. Therefore, the facility used green energy
for 18.3% of its output.
In 2023, we made the following progress on the carbon
farm project implemented jointly by the Russian Academy
of Sciences, PhosAgro, and the government of the Vologda
region since 2021:
• completed the monitoring of forest areas of the carbon
farm (built databases of nature studies to measure
the carbon sequestration capacity of the test areas
with spontaneously growing trees and those with man-
made forests; developed model forecasts and compared
the modelling results);
• developed recommendations to roll out the study results
to other areas in the Vologda region;
• based on the analysis of satellite forest image time series
and additional forest data, identified parts of agricultural
lands in the Cherepovets district with spontaneous forest
growth;
• performed an unmanned aerial vehicle (UAV) survey and
developed digital orthophotos and digital models of test
fields in order to assess forest vegetation biometric
properties;
• created a layout for a unified database of ground surveys
of vegetation and soil of the carbon farm’s test agricultural
fields;
• performed a reconnaissance survey of the test fields
created in 2022 and planted tree seedlings (in 2023,
we planted additional 10 thousand coniferous and
15 thousand deciduous young trees);
• monitored agronomic and environmental efficiency
of fertilizers applied for mixtures of perennial grasses
and developed feasibility proposals as regards their
use in the Vologda region’s agriculture to reach carbon
neutrality;
• defined the effects and aftereffects of the mineral,
organic, and organomineral fertilizer systems applied
in grain-grass crop rotation on carbon sequestration,
yields, and crop quality.
Introduce an automated system
to collect and process primary climate
data
R3, R4, O1
Collaborate with international
organisations and join climate initiatives
R4, O1
Develop innovative products that help
reduce GHG emissions generated
by the fertilizer use
R3, R4, R5, O1
Develop solutions to replace heat from
natural gas combustion
R1, R3, R5, O1
Description and results
Since 2020, PhosAgro has based its climate reporting
on the TCFD standards. Climate reporting for 2021
was verified for the first time, and the 2022 reporting
was submitted to the Energy Efficiency state information
system, also for the first time.
The carbon footprint data collected under the carbon
border adjustment mechanism (CBAM) was sent to our
counterparties in the EU.
We introduced a software solution for automated collection
of input data and calculation of GHG emissions (total
volumes by site and product). The Company developed
a methodology for calculating the carbon footprint
of products and had it validated by a reputable international
certification authority
The Company participates in Climate Ambition, an initiative
launched under the UN Global Compact; supports the TCFD;
and takes part in task and expert groups of government
authorities and non-governmental organisations, and the
COP28 (Conference of the Parties to the UN Framework
Convention on Climate Change) events
Together with R&D centres of the Russian Academy
of Sciences develops products with a proven positive climate
profile (for instance, lower GHG emissions from their use
in agriculture). This is achieved through better plant uptake
and reduced losses of nutrients (such as nitrogen) from
the soil in the form of oxides
NIUIF developed solutions to replace heat from natural gas
combustion. It proposed flexible ways to optimise the use
of heat generated as a result of chemical neutralisation
of phosphoric and sulphuric acids by ammonia and thus
partially replace the heat from flue gases feeding the drum
drier.
NIUIF also developed solutions with heating the air supplied
to combustion devices and used at the fertilizer drying stage,
which helps reduce natural gas consumption. The above
solutions have been implemented in the production
of mineral fertilizers at section 2 of the Cherepovets
phosphate facility. The actual effect is to be determined
in 2024
Climate-related risk and
opportunities
R3, R4, R5, O1
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
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APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report PLANS FOR 2024
Focus areas
Climate-related risk and
opportunities
Improve technological measures
to mitigate the negative impact
of climate change on production
processes
Implement technological measures
to mitigate the negative impact
of production processes on climate
R1, R2
R1, R2
R3, R4, R5, O1
R1, R2, O2
Prepare feasibility studies (business
projects) for innovative climate-resilient
products based on carbon dioxide
utilisation. 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 water for industrial use and waste
water, product dusting, failures
to use equipment in accordance with
operating instructions and failures
to create proper workplace conditions
Description, current status, and expected outcomes
Taking measures to mitigate climate change risks
for PhosAgro’s production processes, updating the list
of measures as necessary
The economic analysis of the majority of measures to reduce
direct GHG emissions developed in 2021–2023 showed their
insufficient ROI. The Company decided to further enhance
technological solutions and keep looking for other promising
technologies in this field
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
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
Fine-tuning the software solution for automated collection
of input data and calculation of GHG emissions (total volumes
by site and product), including for the CBAM application
purposes
Assets
Kirovsk branch
METRICS AND TARGETS
PhosAgro’s climate metrics are aligned
with the goals of the Climate Strategy
approved by its Board of Directors.
The Company is working to expand
and enhance the quality of climate-
related measurements. 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 (carbon dioxide
CO₂, methane CH4 and nitrous oxide
Direct (Scope 1) GHG emissions, СО₂-eq.
GRI 305-1, 305-4, SASB RT-CH-110a.1 / EM-MM-110a.1
N2O) in all three Scopes (1, 2, and 3).
The Company calculates greenhouse
gas emissions in accordance with
the international guidelines:
• 2006 IPCC (Intergovernmental
Panel on Climate Change)
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.
Calculations are based
on global warming projections
of the IPCC report “Climate Change
2021: The Physical Science Basis”.
The Company’s efforts include
end-to-end monitoring of raw data
(Scopes 1, 2, and 3) and analysis
of supply chain participants’ data
(Scopes 2 and 3).
The targets 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.
Per unit emissions, Kirovsk branch
kg per tonne of finished and
semi-finished products
Balakovo branch
kt
Per unit emissions, Balakovo branch
kg per tonne of finished and
semi-finished products
Volkhov branch
kt
Per unit emissions, Volkhov branch
kg per tonne of finished and
semi-finished products
UoM
kt
2021
665.8
56.7
238.0
39.4
155.2
135.0
2022
690.9
57.7
236.6
41.5
191.5
71.8
2023
657.8
55.9
232.7
37.9
193.3
72.4
Cherepovets site (Apatit)
kt
3,716.7
3,790.0
3,695.1
Per unit emissions, Cherepovets site (Apatit)
kg per tonne of finished and
semi-finished products
227.7
229.1
222.4
Total gross emissions
Total per unit emissions
kt
4,775.8
4,909.0
4,778.9
kg per tonne of finished and
semi-finished products
135.5
133.1
128.5
198
199
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report Indirect (Scope 2) GHG emissions, СО₂-eq.
GRI 305-2, 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
Cherepovets site (Apatit), gross emissions, kt
GHG emissions of the Cherepovets site (Apatit), kg per tonne of finished
and semi-finished products
Total gross emissions, kt
Total GHG emissions, kg per tonne of finished and semi-finished products
Note
2021
622.51
53.1
45.3
7.5
80.1
69.6
145.4
8.9
893.3
25.343
2022
588.21
49.1
51.9
9.1
44.6
16.7
136.9
8.3
2023
577.21
49.0
46.0
7.5
17.8
6.6
188.7
11.3
821.6
829.7
22.282
22.317
Greenhouse gas emissions
were calculated in line with
the Guidelines for Climate Impact
Management of PJSC PhosAgro
and other Group Entities (using
the IPCC methodology).
Energy indirect GHG emissions
(Scope 2) are related
to the production of electricity and
heat brought in from third parties
to meet the Company’s needs.
In 2022, we changed our
approach to calculating Scope 2
GHG emissions related to electricity
consumption. In 2020–2021,
the methodology relied on emission
factors defined by the International
Energy Agency (IEA), while starting
2022, we use the energy indirect
GHG emission factor for the First
Synchronous Zone of the Russian
Energy System defined
by the Trading System Administrator
of the Wholesale Electricity and
Capacity Market.
Calculation of other indirect GHG emissions
GRI 305-3
Category
Purchased goods and
services
Fuel- and energy-
related activities not
included in Scope 1
or Scope 2
Processing of sold
products
GHG emissions, t of СО₂-eq.
Share in total other indirect emissions, %
2021
2022
2023
1,963,324
2,425,375
2,672,424
407,740
350,275
427,877
2021
16.21
3.37
2022
18.28
2.64
2023
19.65
3.14
704,402
720,223
642,002
5.28
5.43
4.72
Use of sold products
9,035,283
9,768,958
9,859,766
Total
12,110,749
13,264,831
13,602,069
74.60
100.00
73.65
100.00
72.49
100.00
1
Including electricity from renewable energy sources.
200
201
Scope 3 GHG emissions, СО₂-eq.
GRI 305-3, 305-4
Category
Total gross emissions of production
assets, kt
Total GHG emissions of production assets,
kg per tonne of finished and semi-finished
products
GRI 305-5
We have chosen 2018 as the base
year for calculations because it was
the Company’s first GHG inventory
year and we needed to set GHG
reduction targets for all three scopes
based on the available emission
data. In 2018, GHG emissions were
as follows: direct GHG emissions
(Scope 1) – 4,624.6 kt of CO2-eq.,
indirect GHG emissions (Scope 2)
– 924.1 kt of CO2-eq., and other
indirect GHG emissions (Scope 3)
– 11,413.8 kt of CO2-eq. In 2023,
per unit GHG emissions (Scope
1) declined by 21.9 kg/t or 14.6%
compared to 2018, driven by growing
output, whereas gross GHG emissions
(Scope 1) increased by 3% vs 2018.
2021
2022
2023
12,110.749 13,264.831 13,602.069
343.579
359.767
365.857
Scope 3 greenhouse gas emissions
were calculated for four categories
after an expert review identified them
to be the most significant emission
sources for the Company.
Excluding the output growth factor,
gross emissions decreased by 815 kt
compared to 2018. The mix of semi-
finished products used in fertilizer
production had the most significant
impact on the reduction of Scope
1 GHG emissions, as part of direct
emissions related to manufacturing
of semi-finished products
decreased due to replacing some
of the Company’s own products (for
example, ammonia) with third-party
feedstock.
Per unit GHG emissions (Scope 2)
declined by 25.8% compared to the
baseline year of 2018, while gross
GHG emissions (Scope 2) (excluding
the output growth factor) decreased
by 288 kt vs 2018. The reduction
was achieved thanks to the green
electricity procured by the Kirovsk
branch of Apatit, as well as energy
efficiency initiatives.
Total GHG emissions (Scope 3)
increased by 19.2% vs the baseline
year. Key growth drivers in 2023
were as follows: an increase in the
volumes of purchased feedstock
and fuel consumed at subsidiaries
and affiliates that are not included
in Scope 1 and Scope 2 emissions,
as well as higher product sales.
Excluding the output growth factor,
Scope 3 GHG emissions declined by
205 kt vs the baseline year.
List and description of existing metrics introduced for the monitoring of performance under the climate strategy
Metric
Gross global emissions (Scopes 1 and 2) per currency unit of total revenue
(GRI 305-4)1, t of CO₂-eq. / USD mln
Gross global emissions (Scope 1 and 2) per FTE (GRI 305-4)2,
t of CO₂-eq. / FTE
Electricity purchased per unit of finished and semi-finished products,
‘000 kWh / t
Energy efficiency improvement costs, RUB mln
Share of feedstock suppliers providing necessary input data
on GHG emissions (Scope 3), %
2021
2022
993.100
693.500
309.400
288.800
0.066
0.062
17.400
2.700
3,044.100
7.500
2023
1,072.4
256,9
0.064
371.900
9.500
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 monthly average 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.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report 2
ENERGY EFFICIENCY
Our targets
2023 highlights
Reduction of Scope 2 GHG
emissions
to 794.7
kt of CO2-eq.
by 2028 as a result of implementing
the Energy Efficiency Programme
In 2023, the Company implemented
a comprehensive project to assess
the energy management system
for alignment with best practices and
ISO 50001. The assessment covered
all of the Company’s production
facilities where teams combining
external experts and key employees
of each facility performed an in-depth
analysis of processes, risks, and
opportunities, identified growth
areas, and developed action plans
to tackle bottlenecks. The assessment
findings were thoroughly analysed
and submitted for the management’s
consideration.
In order to better understand
the processes and complex elements
of the energy management system,
employees and managers underwent
relevant training with inputs from
external experts.
In 2023, PhosAgro’s executives
resolved to establish a stand-alone
unit within the Company responsible
for building a unified energy
management system, setting targets
for reducing energy consumption,
42.5%
self-sufficiency in electricity
down 0.9% vs 2022
Scope 2 —
829.7 kt of
СО₂-eq.
up 0.99% y-o-y
Electricity generated by the Company’s own heat and power plants, mln kWh
Production site
Cherepovets site
Balakovo branch
Volkhov branch
Total
2022
2023
Growth, %
787.93
340.83
184.89
807.70
384.53
251.86
1,313.65
1,444.09
2.50
12.90
36.301
10.00
and managing changes as part
of the continuous improvement
of the energy management system.
exhaust gas turbine at the Balakovo
branch is currently at the design
stage.
In the reporting year, the amount
of electricity generated internally
by heat and power plants
in Cherepovets, Balakovo, and Volkhov
went up 10% y-o-y.
As a result, the Company’s production
facilities were 42.5% self-sufficient
in terms of electricity needs in 2023
(vs 42.9% in 2022, flat y-o-y).
Going forward, the Company will
continue developing in-house power
generation. A project to build a new
In 2023, we completed tests
of a solar power generation
technology at the Company’s facility
in Balakovo. With the manufacturer’s
lab completing an extensive study
of the prototype solar panels,
which had operated at the facility
for 18 months, PhosAgro gained
important knowledge essential
for the technology’s further roll-out
across the Company’s facilities.
1 The increase is driven by longer operation of the Volkhov branch HPP at design capacity: 12 months in 2023 vs seven months in 2022
(the HPP was commissioned in May 2022).
202
203
STRATEGY AND MANAGEMENT
APPROACH
GRI 3-3, 302-4
In 2023, the Company continued
to follow the Climate Strategy and
the Energy Efficiency and Energy
Saving Policy approved by the Board
of Directors. We reviewed and
updated the list of initiatives set out
in the Energy Efficiency Programme,
which is tightly integrated into
the Company’s Strategy to 2025.
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 managing energy efficiency risks.
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: among other
things, in 2023, we continued
to purchase electricity generated
by hydroelectric power plants.
Risk of Scope 2 GHG emissions
to be included in carbon
regulation in the EU and other
jurisdictions. The Company’s energy
efficiency directly affects Scope
2 GHG emissions, which poses
a potential risk, for example after full-
scale implementation of carbon border
adjustment mechanisms.
Market availability of electricity
from renewable energy sources.
The Company continuously monitors
the market to ensure a sufficient
supply of electricity from renewable
energy sources.
The initiatives set out
in the Programme are aimed
at improving energy efficiency,
developing energy management
at each production site, and achieving
objectives in the following focus
areas:
• in-house power generation
through utilisation of sulphuric acid
production steam;
• introduction of technologies
aimed at loss reduction and
energy savings (e.g. LED lighting,
frequency converters, less heat
energy losses).
In addition, the Company actively
studies and tests promising solutions,
including by increasing the share
of renewable energy sources both
as part of pilot projects at PhosAgro’s
own facilities and through green
electricity purchases.
In 2023, we implemented
comprehensive energy efficiency
projects at all of our sites.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report KEY INITIATIVES IN 2023
Project
Description and results
Expenditures, RUB mln
Completion
Cherepovets site
Cherepovets site
Volkhov branch
Volkhov branch
Kirovsk branch
Kirovsk branch
Upgrade of the lighting system to LED at block 2.70 of the mineral
fertilizer production site. Ca. 0.5 mln kWh of annual reduction
in electricity consumption
Upgrade of the lighting system to LED at the nitrogen facility
(Ammonia-2). Ca. 0.06 mln kWh of annual reduction in electricity
consumption
Upgrade of the shop lighting system to LED at sulphuric acid
production unit 235. Ca. 0.02 mln kWh of annual reduction
in electricity consumption
Audit of compressed air production and distribution systems.
Developing measures to reduce compressed air consumption
Upgrade of the lighting system to LED at apatite-nepheline
beneficiation plant 2. Ca. 4.8 mln kWh of annual reduction
in electricity consumption
Upgrade of the Rasvumchorrsky mine’s compressor station. Lower
cost of compressed air production as a result of reductions in per unit
electricity consumption
52.2
4Q 2023
41.1
4Q 2023
13.0
4Q 2023
6.6
3Q 2023
49.0
2Q 2023
210.0
4Q 2023
INITIATIVES PLANNED FOR 2024
Project
Description and results
Expenditures, RUB mln
Project schedule
Cherepovets site
Technical upgrade of the operating system and automated process
management system of turbine generator 6 at the phosphate facility’s
HPP. 1.600 m3 reduction in natural gas consumption. Annual savings
of RUB 48 mln
Kirovsk branch
Kirovsk branch
Developing a methodology and piloting the transition to fuel oil
pressure of 12 kgf/cm2 for the drum drier furnace. Saving diesel fuel
by increasing combustion completeness, target: 1%
Pump replacement and installation of additional frequency drives
at the flotation mill section of apatite-nepheline beneficiation plant
3. Electricity savings resulting from the use of frequency drives,
target: 5%
Balakovo branch
Enhancement of in-house power generation from the sulphuric
acid production exhaust steam. 135 mln kWh annual replacement
of purchased electricity
65.0
2024
24.0
2024
89.0
2024–2025
1,820.0
2024–2025
Volkhov branch
Upgrade of the facility’s street lighting system to LED. Ca. 0.07 mln
kWh of annual reduction in electricity consumption
1.5
2024
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205
METRICS AND HIGHLIGHTS
The energy efficiency metrics
are used to monitor the Company’s
progress towards its energy efficiency
improvement target and are set
forth in PhosAgro’s Energy Efficiency
Programme and Action Plan, which
helps keep track of electricity
generation and consumption, energy
intensity, etc.
PhosAgro Group’s energy consumption
GRI 302-1, 302-3, SASB RT-CH-130a.1 / EM-MM-130a.1
Item
Electricity
The energy efficiency metrics
are based on PhosAgro’s raw data
and are calculated in accordance with
the approved statistical methodologies.
The Company prepares its energy
efficiency reports in accordance with
the GRI 302: Energy 2016 standard.
In 2023, the volume of carbon-free
electricity used in the production
of phosphate rock at the Kirovsk branch
grew to 300 mln kWh. Thus, about 18.3%
of the plant’s output is covered by green
electricity generated by the hydroelectric
power plants of TGC-1.
Total electricity consumption
is attributable to the expansion
of the processing facilities.
Unit
2021
2022
2023
Total for production assets
Purchased electricity, including
Purchased from renewable sources
Electricity purchased per unit of finished and semi-
finished products
mln kWh
mln kWh
‘000 kWh / t
2,326.630
2,303.260
2,396.250
299.000
0.066
300.000
300.000
0.062
0.064
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report Item
Heat energy
Purchased (in hot water)
Supplied (in hot water)
Exhaust steam
Per unit consumption of heat energy
Natural gas1
As feedstock for ammonia production
As fuel, etc.
Total
Unit
2021
2022
2023
Total for production assets
'000 Gcal
'000 Gcal
'000 Gcal
‘000 Gcal
mln m3
mln m3
mln m3
438.220
161.230
352.070
187.490
423.360
104.800
8,538.810
8,923.700
9,229.870
0.250
0.246
0.257
1,926.100
1,968.060
1,969.340
730.120
771.720
745.510
2,656.220
2,739.780
2,715.050
Consumption per unit of finished and semi-finished
products2
'000 m3 / t
0.021
0.021
0.020
LNG
Consumption
Fuel oil
Consumption
Heating oil
Consumption
Diesel fuel
Consumption
t
t
t
t
2,951.570
2,380.300
2,782.060
151,291.800
152,895.500
146,764.100
779.400
766.400
789.800
55,695.870
58,276.730
57,109.120
PhosAgro Group’s energy consumption, GJ3
GRI 302-1, 302-3
Item
Internal use of electricity
Internal use of heat energy
Internal consumption of natural gas (excluding gas consumed
as feedstock during production processes)
Internal consumption of LNG
Internal consumption of fuel oil
2021
2022
2023
8,375,878.00
8,291,723.00
8,626,491.00
36,910,017.00
38,050,823.00
39,977,375.00
28,474,611.00
30,097,257.00
29,074,904.00
160,565.00
129,488.00
151,344.00
6,671,968.00
6,742,692.00
6,472,297.00
Internal consumption of heating oil
36,008.00
35,407.00
36,489.00
Internal consumption of diesel fuel
2,539,731.00
2,657,419.00
2,604,176.00
Total internal consumption
83,168,778.00
86,004,809.00
86,943,076.00
Total energy consumption per unit of finished and semi-finished
products, GJ/t
2.36
2.33
2.34
1 Calculations of total energy consumption include only gas consumed as fuel, whereas gas consumed as feedstock for ammonia production
is provided for illustrative purposes and excluded from further calculations of total energy consumption (in GJ), as it is not used as an energy
resource.
2 The Company excludes natural gas used as feedstock for ammonia production from the calculation of per unit energy consumption.
3 To convert energy consumption values into joules, the coefficients on the Berkeley Institute (USA) website were used (https://w.astro.berkeley.
edu/~wright/fuel_energy.html).
206
207
3
WASTE
Target
By 2025, increase the share
of recycled and decontaminated
hazard class 1–4 waste
to 40.00%
2023 highlights
40.17%
of hazard class 1–4 waste recycled
and decontaminated
up 3.6% y-o-y
STRATEGY AND
MANAGEMENT APPROACH
GRI 3-3, 306-1
PhosAgro’s Development Strategy
to 2025 stipulates an increase
in the share of recycled hazard class
1–4 waste to 40%.
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.
PhosAgro’s waste management
is monitored on a regular basis
and discussed by the Strategy and
Sustainable Development Committee
before being communicated to the Board
of Directors.
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;
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.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report KEY INITIATIVES IN 2023
GRI 306-2
Consistent efforts to grow the share
of recycled and decontaminated hazard
class 1–4 waste, which helped increase
recycling and decontamination of
relevant waste in 2023.
Promotion of phosphogypsum
Collecting used bags (fertilizer packaging waste) from PhosAgro-Region’s
customer farmers and their further processing into recycled feedstock for new
packaging sacks (in collaboration with Chempack).
Balakovo branch equipped
road and rail loading areas
for phosphogypsum, which is used
as an ameliorant agent in farming.
are primarily based on sodium salts
(toxic for plants). Phosphogypsum
offsets the salt effect and preserves
urban soils and vegetation.
In 2023, the Company sold
73 kt
of phosphogypsum.
We keep testing this new
product to discover its different
applications. For instance,
in 2023, we held a series of trials
of neutralised phosphogypsum
on acidic soils together
with Pryanishnikov Institute
of Agrochemistry and Saratov
State Agrarian University. The trial
findings were comparable
to the results of lime treatment,
while the application rate per 1 ha
was three times lower.
We also tested the safety
of phosphogypsum used
as a component for cattle and
poultry bedding. Bedding with
phosphogypsum content is 20%
dryer. It also serves as a sulphate-
based disinfectant, which helps
reduce the number of mastitis
cases and paw and hoof diseases
by 50%.
Phosphogypsum was also tested
as an ameliorant for urban areas
reducing the deterioration of soils
and perennial plants caused
by anti-icing reagents, which
An important driver behind the further
expansion of phosphogypsum use
in Russia’s agriculture is its inclusion
on the list of subsidised products
(for plastering of solonetz soils)
as part of the Amelioration
Development and Soil Fertility
Preservation Programme starting
2024.
We also promote the use
of phosphogypsum in construction.
To that end, we implement a joint
project with two large cement plants –
Volga-Cement and Cementum,
Saratov region – to partially replace
natural gypsum with phosphogypsum
in cement production.
Phosphogypsum application
in road construction is also gaining
momentum. For instance, commercial
organisations and agricultural
producers use it to build private
driveways, ramps, manure storage
areas, etc. They apply hemihydrate
phosphogypsum to reinforce soils
and produce durable road pavement
(similar to lean concrete) for category
3–5 roads. Phosphogypsum improves
road throughput capacity, doubles
permitted axle load, boosts rutting
resistance, and prevents soil heaving
during abrupt changes in temperature
thanks to its low thermal conductivity.
In addition to expanding
phosphogypsum sales geography
(for instance, PhosAgro plans
to start shipping it to the Volgograd,
Astrakhan, Penza and Tambov
regions, and the Republic
of Udmurtia), the Company’s plans
for 2024 include active promotion
of phosphogypsum in urban soil
amelioration, road repairs and
construction, and production
of building blocks and paving
slabs (relevant trials are currently
in progress). On top of that, together
with the Scientific Research Institute
for Road Construction, we started
developing a technical certificate
(preliminary national standard)
for phosphogypsum used in road
pavement and soil reinforcement.
208
209
METRICS AND HIGHLIGHTS
SASB RT-CH-150a.1
Share of recycled and
decontaminated hazard class
1–4 waste1, %
Target
‘25
‘23
‘22
‘21
40.00
40.17
38.80
39.10
The reduction in class 5 waste
generation was due to lower
generation of waste from mining
at the Kirovsk branch resulting
from reduction of mining
operations on the back of better
excavation quality.
Waste generation by hazard class, t
GRI 306-3, SASB RT-CH-410b.1
Waste hazard class
1
2
3
4
5
Total
Waste by type and disposal method, t2
GRI 306-4, 306-5
Disposal method
2021
5.63
3.86
2022
2023 (actual)
4.22
0.39
3.82
3.23
1,698.52
1,436.71
1,278.12
192,698.46
195,057.45
253,064.94
132,227,604.70
120,229,530.98
94,372,377.65
132,422,011.17 120,426,029.77
94,626,727.75
2021
2022
2023
PhosAgro Group’s waste reused internally
19,203,406.7
27,753,191.6
26,418,490.4
• Hazardous waste
• Non-hazardous waste
Total waste landfilled
• Hazardous waste
• Non-hazardous waste
74,266.9
74,456.8
99,800.9
19,129,139.8
27,678,734.8
26,318,689.5
112,392,381.5
93,400,262.0
65,294,928.0
119,050.2
120,688.6
153,525.5
112,273,331.3
93,279,573.4
65,141,402.5
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.
2 Hazardous means hazard class 1–4 waste; non-hazardous means hazard class 5 waste.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report Disposal method
2021
2022
2023
4
AIR
Including landfilled at the Company’s waste disposal facilities
112,386,304.7
93,390,463.8
65,285,342.7
Our targets
2023 highlights
23.7%
reduction in emission intensity
by 2025 vs 2018
The 2025 target
to reduce
GHG emissions
was by and large
achieved
RUB 4 bln
was invested throughout
the duration of the Clean
Air Initiative,
including
RUB 57 mln
in 2023.
KEY INITIATIVES IN 2023
Apatit’s Cherepovets site implemented
four out of five planned activities as part
of the Clean Air national project.
STRATEGY AND MANAGEMENT
APPROACH
GRI 3-3
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,
PhosAgro is running a programme
to re-equip production facilities and
cut pollutant emissions.
PhosAgro takes part
in the government’s Clean Air initiative,
which aims to drastically reduce air
pollution in major industrial cities
across Russia. As part of the initiative,
the Company implemented a number
of measures at its Cherepovets site,
which helped reduce per unit pollutant
emissions by 20.5% vs the 2017 level
(project launch) as early as in 2023.
Air quality in sanitary protection areas
near the Company’s production sites
complies with applicable hygienic
requirements.
• Hazardous waste
• Non-hazardous waste
Third-party recycled
• Hazardous waste
• Non-hazardous waste
Third-party decontaminated
• Hazardous waste
• Non-hazardous waste
Third-party processed
• Hazardous waste
• Non-hazardous waste
113,463.9
110,976.1
143,988.9
112,272,840.8
93,279,487.7
65,141,353.8
72,278.0
63,010.9
83,219.2
1,432.2
70,845.8
332.5
332.5
0.0
1,449.9
61,561.0
299.8
263.1
36.7
2,756.7
2,880.6
2.2
2,754.5
45.1
2,835.5
1,808.1
81,411.1
612.2
563.2
49.0
3,027.4
314.2
2,713.2
Disposal of beneficiation waste and overburden at Kirovsk branch
SASB EM-MM-150a.1, EM-MM-150a.2
Reused
Landfilled at waste disposal facilities
2021
2022
2023
2021
2022
2023
12,535,665.7
13,065,273.3
12,984,017.0
13,483,863.3
12,865,355.7
12,812,723.0
Apatite-nepheline ore
processing waste (tailings)
Rocks and overburden mix
3,360,586.0
11,276,148.0
9,916,198.0
90,494,219.0
72,281,414.0
43,680,591.0
Waste generation, tonne per tonne of finished and semi-finished products
Production site
Kirovsk branch
Balakovo branch
Volkhov branch
Cherepovets site (Apatit)
Total
2021
10.300
0.900
0.003
0.400
3.800
2022
9.100
0.900
0.001
0.400
3.300
2023
7.000
0.900
0.001
0.400
2.500
The decrease in indicators is due to:
1. The formation of rocks
duringunderground works on sections
that do not contain valuable minerals
decreased due to the higher quality
of mining techniques, driving waste
generation down.
Waste generation (hazard class 1–4), kg per tonne of finished and semi-finished products
Production site
Kirovsk branch
Balakovo branch
Volkhov branch
Cherepovets site (Apatit)
Total
2021
0.5
21.3
0.6
3.6
5.5
2022
0.8
21.1
0.5
4.0
5.3
2023
0.7
28.7
0.7
4.1
6.8
2. The increase in hazardous waste
generation of classes I-IV at Balakovo
branch was due to large-scale
cleaning of treatment facilities.
210
211
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report Activities under the Comprehensive Plan to Reduce Pollutant
Emissions at the Cherepovets site
Status
Environmental efficiency, t
Year
Actual
expenditures,
RUB mln
Upgrade of the SK-600/3 sulphuric acid plant
Deployment of new tailing gas pre-heating equipment
for unified acid line 7
Upgrade of technological system No. 3, block 2.70
at the mineral fertilizer production site
Completed
Completed
Completed
Technical upgrade of the low-capacity absorption unit,
blocks 7.00 and 7.01 at the mineral fertilizer production site
Completed
892
2018–2019
2,733.225
105
2019
10.975
62.3
2020
776.62
402.6
2021–2022
321.84
Catalyst replacement at contact process units
of the SK-600/1 and SK-600/2 technological systems
at the sulphuric acid facility
In progress
910 t reduction achieved
in sulphur dioxide emissions
(partial catalyst replacement
at SK-600/2 and SK-600/1)
2021–2024
182.18
Projects in addition to the Comprehensive Plan’s activities
Upgrade of the process to return synthesis and purge
gas to the fuel gas system without sending ammonia-
containing gases to burners of the steam superheater
at Ammonia-1 and 2 production lines
In progress
Effect to be determined
in 2025
2023–2025
8.970
Upgrade of the complex mineral fertilizer production
Implemented
Diesel locomotive fleet upgrade
Implemented
50t annual reduction
of NOx emissions
Effect to be determined
in 2025
2023
394.819
2023
207.230
At the Volkhov branch,
the key activities of 2021–2023
to reduce the negative impact
on the environment, including air, were
implemented as part of an investment
project to develop the Volkhov site:
technical solutions to reduce per
unit emissions and concentrations
of pollutants at the sanitary protection
zone boundaries near residential areas
were provided for back at the stages
of new construction and upgrades.
The considerable reduction in per
unit emissions confirms that we have
chosen the right approach.
At the Balakovo branch, upgrade
of the wet-process phosphoric acid
production unit and reconstruction
of the SK-20 sulphuric acid production
unit in 2023 were implemented
in combination with a revamp of gas
recovery equipment, which ensured
the reduction of per unit pollutant
emissions to the atmosphere.
At the Kirovsk branch, the 2023
activities to minimise dust emissions
from tailing dumps of beneficiation
facilities included:
• chemical stabilisation using binding
agents (PSKh-18, Lukoil, bitumen
emulsion) for dusty surfaces
in the beach area of tailing dumps:
– at apatite-nepheline
beneficiation plant 2 across
443 ha,
• chemical stabilisation for dusty
surfaces on service roads of tailing
dumps:
– at apatite-nepheline
beneficiation plant 2 across
88 ha,
– at apatite-nepheline
beneficiation plant 3 across
109 ha;
• extra nutrition of crops planted
in the past years on the dam slopes
and in the beach area of tailing
dumps across 30 ha;
• covering operating roads
of the tailing dump at apatite-
nepheline beneficiation plant 3 with
crushed stone across 50 ha;
– at apatite-nepheline
• piloting five new anti-dusting agent
beneficiation plant 3 across
557 ha;
prototypes.
METRICS AND HIGHLIGHTS
Pollutant emissions, kg per tonne
of finished and semi-finished products1
Target
‘25
‘23
‘22
‘21
0.800
0.799
0.793
0.801
GRI 305-7, SASB RT-CH-120a.1 / EM-MM-120a.1
NOX, SOX, and other significant air emissions, t
Pollutants
Total
Kirovsk branch
Balakovo branch
Volkhov branch
Cherepovets site (Apatit)
Total
Solids
Kirovsk branch
Balakovo branch
Volkhov branch
Apatit (Vologda region)
Total
Sulphur dioxide
Kirovsk branch
Balakovo branch
Volkhov branch
Cherepovets site (Apatit)
Total
Carbon monoxide
Kirovsk branch
Balakovo branch
Volkhov branch
Cherepovets site (Apatit)
Total
2021
2022
2023
10,120.30
10,141.30
10,056.80
6,876.00
1,165.80
7,323.80
1,575.00
8,217.00
1,203.40
10,065.30
10,193.50
10,235.00
28,227.40
29,234.60
29,712.20
4,939.80
5,011.10
4,969.60
425.80
528.60
1,055.10
497.10
234.90
771.70
745.50
214.60
768.00
6,949.30
6,514.80
6,697.70
3,308.20
3,975.40
206.70
3,373.40
4,227.20
320.50
3,273.70
4,723.70
351.50
3,029.20
3,770.90
3,736.60
10,519.50
11,692.00
12,085.50
777.00
933.10
115.30
1,274.80
3,100.20
798.10
949.40
106.30
1,324.20
3,178.00
908.20
927.60
153.40
1,332.60
3,321.80
212
213
1 The Group specific disclosure was calculated as the ratio of pollutant emission to the output of products and semi-finished products.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report Pollutants
Nitrogen oxides (NOx as NO2)
Kirovsk branch
Balakovo branch
Volkhov branch
Cherepovets site (Apatit)
Total
Hydrocarbons (w/o VOCs)
Kirovsk branch
Balakovo branch
Volkhov branch
Cherepovets site (Apatit)
Total
Volatile organic compounds
Kirovsk branch
Balakovo branch
Volkhov branch
Cherepovets site (Apatit)
Total
Other gaseous and liquid pollutants
Kirovsk branch
Balakovo branch
Volkhov branch
Cherepovets site (Apatit)
Total
214
215
2021
2022
2023
5
WATER
RT-CH-140a.2 / EM-MM-140a.2
1,067.80
760.70
207.60
2,401.80
4,437.90
8.00
2.60
0.00
38.10
48.70
19.00
340.70
5,00
2.00
931.20
765,10
330.70
2,491.90
4,518.90
8.00
2.60
0.00
38,10
48.70
19.00
340.00
6.20
2.80
366.70
368.00
859.50
759.40
224.40
2,467.60
4,310.90
7.60
2,60
0.00
4.0
14.20
38.10
339.50
5.80
12.90
396.3
0.1
718.70
253.70
0.50
437.70
102.60
2,264.30
2,805.10
0.50
542.40
576.40
1,793.90
1,913.30
2,913.20
2,885.80
Our targets
2023 highlights
Reduction in water withdrawal to
Water withdrawal
5.16 m3/t of finished and
semi-finished products by 2025
down 29.30% vs 2018
6.05 m3/t
down 5.8% y-o-y
Reduction of waste water discharges
into surface water bodies to
Actual performance
in 2023
4.16 m3/t
of finished and semi-finished
products by 2025
down 31.10% vs 2018
4.72 m3/t
down 10.5% vs 2022
STRATEGY AND MANAGEMENT
APPROACH
GRI 3-3, 303-1
Water is an essential resource
for the Company. 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.
RISKS AND OPPORTUNITIES
SASB RT-CH-140a.3
The main risks related to water
consumption are water quality
deterioration in water bodies
across PhosAgro’s footprint and
the Company’s non-compliance with
statutory requirements for limiting
one’s negative impact on water
bodies.
PhosAgro 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 both water
bodies and centralised waste water
systems. There were no incidents
of non-compliance associated with
water quality permits, standards, and
regulations in 2023.
To mitigate these risks, in 2020
we adopted the Water Strategy that
sought to reduce water consumption
and discharge and improve waste
water quality.
The strategy is implemented at all
PhosAgro 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.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report KEY INITIATIVES IN 2023
METRICS AND HIGHLIGHTS
At the Cherepovets site, we continued to implement the second stage of the water use optimisation programme as part
of our production upgrade initiative for 2020–2025.
Phosphate facility:
1
2
4
A base case design developed
for A Waste Water Treatment Unit
with a Source Water Capacity
of at Least 400 m3/h. Design
works on the facility (construction,
networks, auxiliary systems)
are in progress;
Key technical solutions implemented;
design works are in progress
for the Technical Upgrade of an Acidic
Waste Water Treatment Station with
Production Capacity Increase;
3
The development of engineering
documentation completed
for A Saline Waste Water Sewerage
at the Phosphate Facility of Apatit.
Engineering documentation
implemented for The Technical
Upgrade of a Water Treatment
Station in a Utility and Drinking
Water Supply System with
Arrangements Made to Dehydrate
Sludge Water.
Nitrogen facility:
1
2
A base case design implementation
in progress for a waste water
treatment unit at the nitrogen
facility of Apatit (until 4Q 2024).
Engineering surveys and design works
in progress for the system of reception
and accumulation, transportation and
treatment of industrial waste water
(industrial waste water neutralisation
and treatment 1); priority actions
for the system upgrade were
scheduled.
At the Kirovsk branch, measures
are taken to reduce water
consumption:
• Using the Saami pit
water for process needs
at the Kirovsky mine workings;
• Reconstruction of the Kirovsky
and Rasvumchorrsky mines’
compressor stations.
216
217
Discharge of waste water into
surface water bodies, m3 per tonne
of products and semi-finished products1
Water withdrawal, m3 per tonne of
products and semi-finished products1
Target
‘25
‘23
‘22
‘21
4.16
4.72
5.27
5.31
Target
‘25
‘23
‘22
‘21
5.16
6.05
6.42
6.48
Total water withdrawal by source, ‘000 m3
GRI 303-3, SASB RT-CH-140a.1 / EM-MM-140a.1
Item
Surface water
Total water withdrawal from surface sources, including:
• process water
• drinking water (internal use)
• drinking water (for supplies to third parties)
• mining and pit waters
• drainage water
• rainwater
Ground water
Water withdrawal from ground-water sources
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
2021
2022
2023
175,943
60,747
1,193
557
182,276
62,163
1,187
632
176,760
63,029
1,093
527
107,633
111,751
105,024
3,171
2,642
2,912
49,600
28,373
9,126
47
12,054
2,401
4,142
3,357
51,240
28,644
8,400
32
14,164
2,742
4,345
3,507
44,636
30,359
7,022
30
7,225
Total
228,456
236,873
224,903
Measurement of total and per unit water withdrawal, including and excluding mining and pit waters
Item
2021
2022
2023
Total water withdrawal, including mining and pit waters, ‘000 m3
228,456.00
236,873.00
224,903.00
Per unit water withdrawal, including mining and pit waters2, m3 per tonne
6.48
6.42
6.05
Total water withdrawal, excluding mining and pit waters, ‘000 m3
120,823.00
125,122.00
119,878.00
Per unit water withdrawal from surface sources, excluding mining and pit
waters3, m3 per tonne
3.43
3.39
3.22
1 The Group specific disclosure was calculated as the ratio of the volume of waste water discharged into surface water bodies, including mine and
pit waters, to the total output of products and semi-finished products.
2 The Group specific disclosure was calculated as the ratio of total water withdrawn, including mining and pit waters, to the total output of products
and semi-finished products.
3 The Group specific disclosure was calculated as the ratio of total water withdrawn, excluding mining and pit waters, to the total output
of products and semi-finished products.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report Total water discharge by source, ‘000 m3
GRI 303-4
Item
Water discharge into surface water bodies
2021
2022
Total
2023
Total water discharge into surface water bodies, including:
187,012
194,447
175,618
mining and pit waters
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
107,633
111,751
105,024
3,171
11,673
4,222
3,238
381
557
47
2,401
13,782
4,406
3,219
523
632
32
2,742
6,872
4,019
3,109
353
527
30
Total
191,234
198,853
179,637
Measurement of total and per unit waste water discharge, including and excluding mining and pit waters
Item
2021
2022
2023
Water consumption, ‘000 m3
GRI 303-5
Item
Total water withdrawal (all sources)
Total water discharge (all sources)
Water consumption
Water discharge, mln m3
GRI 303-4
Item
Waste water discharge into surface water bodies
Kirovsk branch
Balakovo branch
Volkhov branch
Cherepovets site (Apatit)
Total
Discharged without treatment (% of total water discharge)
Kirovsk branch
Balakovo branch
Volkhov branch
Total water discharge into surface water bodies, including mining and pit
waters, ‘000 m3
187,012.00
194,447.00
175,618.00
Cherepovets site (Apatit)
Total
Per unit water discharge into surface water bodies, including mining and pit
waters1, m3 per tonne
5.31
5.27
4.72
Total water discharge into surface water bodies, excluding mining and pit
waters, ‘000 m3
79,379.00
82,696.00
70,594.00
Waste water discharge
2021
228,456
191,234
37,222
2022
236,873
198,853
38,020
Total
2023
224,903
179,637
45,266
2021
2022
2023
173.9
180.0
162.4
–
–
13.1
187.0
0.0
0.0
0.0
0.0
0.0
–
–
14.4
194.4
0.0
0.0
0.0
0.0
0.0
–
–
13.2
175.6
0.0
0.0
0.0
0.0
0.0
Per unit water discharge into surface water bodies, excluding mining and pit
waters2, m3 per tonne
2.25
2.24
1.90
Treated effluents (reused in the production cycle)
Asset
Total, mln m3
Share of reused water, %
2021
244.7
87.0
2022
241.7
86.0
2023
227.9
83.0
1 The Group specific disclosure was calculated as the ratio of the volume of waste water discharged into surface water bodies, including mine and
pit waters, to the total output of products and semi-finished products.
2 The Group specific disclosure was calculated as the ratio of the volume of waste water discharged into surface water bodies, excluding mine and
pit waters, to the total output of products and semi-finished products.
218
219
Item
Kirovsk branch
Discharge 1
Discharge 2
Discharge 3
Discharge 4
Discharge 5
Discharges 6, 9
Cherepovets site (Apatit)
Effluents from the phosphate facility
Effluents from the nitrogen facility
Discharge from ANBP-3
Discharge from ANBP-2
Rainwater at ANBP-2
Receiving water body
Zhemchuzhnaya River
Belaya River
Belaya River
Mining waters of the combined Kirovsky, Central and
Rasvumchorrsky mines
Lake Bolshoi Vudyavr
Mining waters of the Koashva and Njorkpahk open pits
Lake Kitchepahk
Waters of water-lowering wells of the Vostochny mine
Vuonnemyok River
Rybinsk Reservoir
Rybinsk Reservoir
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report 6
BIODIVERSITY
Our targets
2023 highlights
Preservation of biodiversity in
regions of PhosAgro Group’s
operation at a level securing
sustainability
123,915
juvenile fish was released in 2023
STRATEGY AND MANAGEMENT
APPROACH
KEY INITIATIVES IN 2023
For a number of years, the Company
has been conducting research
to develop biodiversity protection
programmes, including the evaluation
of the current state and development
of a list of indicators for future
biodiversity monitoring.
Going forward, we plan to integrate
the comprehensive biodiversity
programmes of the Company’s
branches into a single system based
on a unified approach to assessment
and monitoring. This work is underway
and it will be finalised as we complete
research projects at each
of PhosAgro’s assets.
For a number of years,
the Company has been working
to preserve biodiversity and
replenish biological resources.
Since 2020, the Company has
been 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.
GRI 3-3
The Company’s Environmental Policy
sets forth PhosAgro’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 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.
Comprehensive biodiversity protection programmes
METRICS AND HIGHLIGHTS
Investment in biodiversity
protection programmes,
RUB mln
‘23
‘22
‘21
16.7
13.7
11.4
GRI 304-2, 304-3
Comprehensive biodiversity
protection programmes were
developed for the Volkhov branch, two
of the Kirovsk branch’s facilities and
the Cherepovets production site.
In 2022, we completed a comprehensive
environmental study of the area
within the footprint of the Kirovsky
mine. As part of the efforts to develop
biodiversity protection programmes
in 2023, the Company joined forces with
the Kola Science Centre of the Russian
Academy of Sciences to conduct
a comprehensive environmental
study of the area within the footprint
of the Rasvumchorrsky mine (Kirovsk
branch, Murmansk region).
The research revealed that the biota
of terrestrial ecosystems within
the footprint of the Rasvumchorrsky
GRI 304-3
mine includes over 650 species
of fungi, liverworts, lichens, mosses
and vascular plants, as well as 135
bird and 12 mammal species.
The diversity of bird and mammal
species was strongly affected
and disturbed by human activities
in the area. The study also found
four fish species within the footprint
of the Rasvumchorrsky mine.
Lake Bolshoi Vudyavr currently
fits the habitat requirements
for these species, as it offers ample
food supplies for both salmonids
(brown trout, Arctic char) and
European smelt.
In 2024, we plan to launch a
comprehensive environmental study
of the area within the footprint of the
Vostochny mine.
Juvenile fish and pike larvae, released into water bodies across the Company’s geographies
Water body
Volgograd Reservoir, Saratov region
Sukhona River, Vologda region
Umba River, Murmansk region
Rybinsk Reservoir, Vologda and Yaroslavl regions
Saratov Reservoir, Saratov region
Lake Ladoga, Leningrad region
Nakhimovskoye Lake, Leningrad region
Sheksna Reservoir, Vologda region
Kovdozero Reservoir, Murmansk region
Imandra Reservoir
Onega River
Total
2021
55,838
22,933
5,000
–
28,151
–
28,715
3,500
-
-
-
2022
60,838
11,743
-
70,404
28,151
1,584
-
3,000
11,502
-
-
2023
35,838
–
–
11,142
53,151
1,539
–
–
–
15,520
6,725
144,137
187,222
123,915
220
221
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE2023Integrated Report CONTRIBUTING TO
LOCAL COMMUNITIES
AREA, STRATEGIC GOALS AND HIGHLIGHTS OF 2023
1
Our Favourite Cities
3
Spiritual revival
Improving the quality of urban environment and promoting sustainable development of the cities
where we operate: Kirovsk, Cherepovets, Balakovo, and Volkhov
84
improvement
projects
completed
RUB 4 bln
invested in infrastructure
facilities
117 new jobs
created in the Murmansk
region
l
a
o
G
l
a
u
t
c
A
Targets
8.3, 9.1,
11.3 and 17.17
2
Education
Target
3.4 and 4.4
l
a
o
G
l
a
u
t
c
A
Attracting educated, motivated and skilled
young talent to innovative Russian facilities,
including those of PhosAgro Group
Effective combination of high-quality
education and physical training to facilitate
moral and ethical development and promote
health of the younger generation
43 graduates
of PhosAgro Schools
started their career with the
Company after completing
higher education
RUB 612 mln
invested in the school–
college/university–facility
educational model
7.2%
growth in the number
of DROZD students
l
a
o
G
l
a
u
t
c
A
Preservation and promotion of orthodox values, spiritual ideas, respect for our legacy and
motherland, and benevolence
40 churches
in the regions of operation,
other Russian regions and
foreign countries received
assistance from the Company
15%
growth in the number
of people attending spiritual
education events
Reconstruction
of the Church of the Vernicle
Image of the Saviour
commenced in Kirovsk
4
Connecting generations
l
a
o
G
Preserving the history of the nation, industry, or facility for all generations; supporting continuity
of generations, inclusive traditions, respect for the older generation, veterans, and vulnerable
population groups
l
a
u
t
c
A
More than 70 NGOs,
organisations of veterans and disabled
people, and charitable foundations received
assistance from the Company
4,500 events
held by career guidance and exhibition
centres
5
Promotion of sports
l
a
o
G
Supporting Russian sports at the international, national
and regional levels, and promoting sports in regions where
the Group operates
l
a
u
t
c
A
Total financial support
exceeded
RUB 652 mln
Target
3.4
Target
4.4 and 3.4
Target
3.4
222
223
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report STRATEGY
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 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.
• supporting culture;
• strengthening corporate culture
through employee engagement
in socially significant projects;
• offering career guidance for school
and university students;
• enhancing the Company’s reputation
as a socially responsible business;
• promoting advanced corporate social
responsibility standards.
External recognition
PhosAgro Group achieved
the highest distinction at the
Responsible Business Leadership
national award, emerging as the
winner in the majority of categories:
• Educated and Healthy Children
of Russia (DROZD), PhosAgro’s
sports and educational
programme, came first in the
Contribution to Strategic Social
Objectives nomination;
• Our Favourite Cities, PhosAgro’s
social initiative, became the winner
in the Contribution to Regional
Sustainable Development
nomination;
• PhosAgro’s educational
programme got the top prize in the
Contribution to Strategic Human
Capital Objectives nomination.
In 2023, PhosAgro Group once again
ranked among businesses with the
best social and charitable programmes
in the Russian Leaders in Corporate
Philanthropy competition. These long-
standing awards for socially responsible
businesses are organised by the Donors
Forum, a coalition of major grantmakers
in Russia. 15 Russian companies made
it to the A+ Leaders category, while
PhosAgro was the only mineral fertilizer
producer to do so.
The Volkhov branch ranked second in
the Wellness Culture Development
nomination among more than 70
projects participating in the nationwide
contest – Investing in the Development
of a Healthy Country. Best Corporate
Practices.
224
225
The Company’s Policy for Managing
Community Social Programmes (new
version approved in December 2022)
sets out the following areas as primary
targets for social investments
• unlocking the social and economic
potential in the regions of operation,
enhancing their environmental
resilience;
• improving the living standards
All our programmes and initiatives
involving social investments are aligned
with the goals and objectives set
in the Group’s Strategy to 2025
and contribute to its successful
implementation.
The Company’s Policy for Managing
Community Social Programmes
of employees, their families, PhosAgro
veterans and local communities;
Политика Компании в области
управления внешними социальными
программами
MANAGEMENT APPROACH
GRI 3-3
Our social investment programmes
are based on public benefit priorities
and mostly rely on 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.
a broad range of partners in line with
the highest international sustainable
development standards.
We implement our social investment
strategy through promoting efficient
and successful cooperation with
For more information on community
social programmes, please visit
the Company’s website.
Более подробная информация о
внешних социальных программах
представлена на сайте Компании:
https://www.phosagro.ru
/sustainability/ social-response
/#accordion-social-projects.
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.
KEY POLICIES AND
REGULATIONS
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, and other
applicable laws and regulations.
To ensure transparent and effective
corporate governance, the Group has
developed a framework of internal
regulations governing social
programmes, including:
Более подробная информация о
внешних социальных программах
представлена на сайте Компании:
https://www.phosagro.ru
/sustainability/ social-response
/#accordion-social-projects.
Policy for Managing Community
Social Programmes of Apatit
Government Relations Policy
of PhosAgro
Regulations on Managing
Community Social Programmes
of Apatit (the “Regulations”)
Политика в области управления
внешними социальными программами
АО «Апатит»;
Политика по взаимодействию с
органами государственной власти и
представителями государства ПАО
«ФосАгро»;
Регламент управления внешними
социальными программами АО
«Апатит» (далее — Регламент);
Code of Ethics of PhosAgro
Charity and Sponsorship Policy
of PhosAgro
Assessment Criteria
for the Programmes of Apatit
кодекс этики
Политика в области
благотворительной и спонсорской
деятельности ПАО «ФосАгро».
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
Management of social investment programmes
Corporate level of PhosAgro Group
Management Board
Chief Executive Officer
Deputy CEO
• Annual budget consideration and approval
• Decisions on participation in social and charitable
initiatives
• General coordination of activities related to charity,
sponsorship and community investment
• Collection and analysis of feedback and other relevant
information on ongoing projects
• Organisation of public hearings and sociological
surveys
Information support
•
Office for Community Social Projects
Operations
• Regular communication with business partners
• Project and programme management
• Preparation of proposals on the basis of feedback
•
Initial consideration of new applications
Government Relations Department
Information Policy Department
HR and Social Policy Department
Social Development Departments
Commission for Social Issues and Charity
226
227
PERFORMANCE ASSESSMENT
AND FEEDBACK
GRI 413-1
The Regulations on Managing
Community Social Programmes
formalise the appointment of an officer
responsible for the implementation
and monitoring of a community social
programme on the part of Apatit, and
set out the procedure for creating
a programme passport to describe
the material aspects of each
programme.
The Regulations also establish
a framework of internal controls
entrusted to the Commission
for Social Issues and Charity (drafting
of proposals on assessment criteria),
social programme administrator
(control over progress against
initiatives and assessment criteria,
preparation of reports) and Office
for Community Social Projects
(organisation of internal and external
performance evaluations)
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
Stakeholders feedback channels:
representatives in the work of local
legislative and representative bodies
and government authorities to setting
up community liaison offices and other
venues for meetings with people.
We also collect a considerable
amount of data used for analysing
the effectiveness of our social
investment programmes from ongoing
stakeholder feedback.
For more information, see clause 4
of the Regulations
Регламент управления внешними
социальными программами АО
«Апатит» (далее — Регламент);
To collect feedback on the quality
and efficiency of community
social programmes, the Company
organises annual employee surveys
and distributes questionnaires
among the participants who are not
PhosAgro’s employees. Once every
two years regions of operation host
public presentations of community
social projects. These events
are attended by project beneficiaries
and used to poll local residents.
Also, the Company’s employees have
been elected to various 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.
Monitoring and performance
assessment are the crucial
elements of the social project
management framework.
Assessment criteria include both
objective data and stakeholder
views, thus ensuring comprehensive
performance assessment and
monitoring of the evolution
of public priorities related to social
and economic development.
In 2021, third-party experts
from Donors Forum completed
an audit of the Company’s social
investments. Based on the audit
findings, in 2022 PhosAgro
reviewed some of its internal
documents, while also developing
and approving assessment criteria
and procedures for community
social programmes. The sets
of criteria for each programme
are available on the Company’s
website. The monitoring and
performance assessment procedures
were approved by the relevant
Regulations.
involvement in the work
of regional and
municipal legislative and
representative bodies;
participation in meetings
of regional and local
government authorities;
interaction with community
groups (veterans,
pensioners, NGOs,
and volunteers);
interaction with religious
and faith leaders;
organising and running city-wide
public events (the Company’s
corporate holidays, city
celebrations, sports
competitions, tree planting,
release of young fish, etc.);
public opinion research,
including through public hearings
held to discuss the Company’s
projects (festivals of charity
projects);
interaction through social
networks, mass media and
the Company’s website;
partnerships in implementing
projects such as DROZD,
PhosAgro Schools, projects
run with colleges, universities,
hospitals, sports clubs/teams,
and charity foundations
(including in the form
of surveys, polls, reviews
on social networks and
in mass media);
questionnaires filled
in by beneficiaries
of the Company’s initiatives.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
Annually, PhosAgro Group takes the following measures
to monitor and assess social investment programmes:
Assessment criteria for Apatit’s
programmes
• financial and non-financial
audits by external experts;
• employee surveys;
• questionnaire-based surveys
for participants who are not
employees of the Company;
Regulations on Managing Community
Social Programmes at Apatit
• monitoring and performance
Регламент управления внешними
социальными программами АО
«Апатит» (далее — Регламент);
assessment against
the approved criteria;
respective programmes, with
necessary adjustments made based
on the review results.
Donors Forum completed external
audit of community social investment
programmes.
From time to time, external experts
are engaged to contribute to the social
investment management framework.
For example, at the end of 2021
Once every two years regions
of operation host public presentations
of community social projects; these
events are attended by project
beneficiaries and used to poll local
residents; once every five years
the Company conducts expert
review of the regulations governing
RISKS AND OPPORTUNITIES
SASB RT-CH-210a.1, EM-MM-210b.1
Our social investment objectives are affected, among other things, by the following
strategic risks:
3
social risk;
4
HR risk;
15
reputational risk.
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.
for more information, see the Strategic Risks section on page 68
SOCIAL INVESTMENT SPECIFIC RISKS INCLUDE:
regulation of social investment
management processes;
performance evaluation of social
investment programmes;
evolution of public priorities
of social and economic
development.
228
229
2023 METRICS AND HIGHLIGHTS
PhosAgro Group makes an extensive
and diverse contribution to the social
and economic development
of local communities in the regions
of operation: 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.
Breakdown of social expenses
in 2022, %
Breakdown of social expenses
in 2023, %
‘22
‘23
2.62
22.45
62.65
5.23
0.52
6.51
0.02
Nationwide projects
Infrastructure facilities, including
renovation of educational
institutions
Educational projects (net of
renovation of educational
institutions)
Sports
Organisations of war veterans
and disabled people
Churches
Membership fees
2.63
77.68
2.62
7.02
2.75
7.21
0.09
Nationwide projects
Infrastructure facilities, including
renovation of educational
institutions
Educational projects (net of
renovation of educational
institutions)
Sports
Organisations of war veterans
and disabled people
Churches
Membership fees
Charitable giving and community and infrastructure development investment1, RUB ‘000
GRI 203-1
Allocations
Contributions to charities, NGOs and research institutions (not related to the organisation’s
commercial research and development)
2021
2022
2023
742,048
3,083,504
802,874
Funds allocated to support community infrastructure (recreational facilities, etc.)
1,756,238
1,838,886
7,335,597
Direct spending on social programmes, including arts and educational activities
825,613
3,978,562
1,217,822
Total
3,323,899
8,900,952
9,356,293
1
In 2023, the Company revised
the methodology for calculating
the charitable giving and community and
infrastructure investment (GRI 203-1)
amounts. Starting from this year,
the indicator is calculated for consolidated
companies, which agrees with the general
approach towards consolidated
financial statements under IFRS. Based
on the principle of comparability, the data
for 2021 and 2022 was recalculated
accordingly.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
KEY SOCIAL INVESTMENT PROGRAMMES
GRI 203-2
1
OUR FAVOURITE CITIES
Improving the quality of urban environment and promoting sustainable development of the cities where we operate:
Kirovsk of Apatit, Cherepovets, Balakovo, and Volkhov.
This programme seeks to create
comfortable conditions for comprehensive
personal development, with its target
audience including both employees
of PhosAgro Group and communities
residing in the regions of operation.
By providing physical resources
for building social capital and promoting
commitment to healthy lifestyle,
the Company assists regional and local
authorities in ensuring harmonious
and balanced social development, and
offering high quality of life comparable
to living standards in large cities or even
surpassing them in terms of accessibility
for an average resident.
Partnership and ongoing meaningful
dialogue with stakeholders allow us
to fine-tune our social programmes
to better align them with focuses
of regional development and invest more
efficiently. As regional authorities are well
aware of the most pressing needs their
regions face, they are engaged through
mutual agreements to coordinate joint
programmes for industrial and economic
development, education, culture, sports,
support of local communities, etc. This
ensures efficient and systemic utilisation
of funds allocated by the Company
to address social challenges.
The outcomes and effectiveness
of the programme, and its impact
on socially significant issues
are reviewed in line with
the methodology and procedures
approved by the Regulations and
benchmarked against assessment
criteria set for each focus area
on an individual basis. These criteria
are listed below.
According to a sociological survey
conducted in the reporting year and
feedback collected in social networks,
residents of the Vologda, Saratov,
Leningrad and Murmansk regions
are generally satisfied with urban
improvements currently taking place in
these regions.
Importantly enough, PhosAgro
implements the programme
in partnership with a wide
array of stakeholders
and uses co-financing
arrangements to enhance
the engagement of society,
local government bodies,
and business communities.
Social and economic
partnership agreements signed
by the Company with respective
regional governments
on an annual basis formalise,
among other things, PhosAgro’s
commitment to run Our
Favourite Cities programme.
Assessment criteria for Apatit’s
programmes
Item
Total improvement projects completed (including repairs
and reconstruction of social and healthcare facilities,
educational institutions and roads)
Residents’ initiatives (applications submitted)
•
including those implemented with the Company’s
support
Number of partners involved (among others,
local residents for reconstruction/construction
of infrastructure facilities, including leisure and sports
facilities)
2022
78
3
3
2023
84
70
24
Funds allocated by PhosAgro Group
to finance Our Favourite Cities, RUB mln
‘23
‘22
‘21
3,935
3,412
1,898
139
120
Financing allocated by the Company for
Our Favourite Cities in 2023 reached
RUB 3.9 bln
up 15% y-o-y
Number of city-wide events organised by the Company
101
91
230
231
Vologda region
In 2023, the Vologda region
had 26 social facilities (schools,
kindergartens, hospitals, museums,
churches, etc.) renovated and 8
public spaces (including parks, public
gardens and courtyards) landscaped
as part of Our Favourite Cities
programme. Additionally, assistance
was provided to 31 non-profit
organisations (charitable foundations,
public organisations for disabled
people and veterans, etc.).
Comments of city residents regarding
the need to maintain improved areas
in due state are taken into account
when creating PhosAgro Group’s
municipal and charitable initiatives.
Saratov region
In 2023, Our Favourite Cities
programme in the Balakovo municipal
district of the Saratov region focused
on the renovation and improvement
of several dozen facilities, including
parks, public gardens, sports
grounds, roads, parking lots,
sidewalks, etc. Significant attention
was paid to the installation of lighting
and video surveillance systems.
Additionally, the Company entered
into co-financing arrangements with
local authorities to beautify 12 public
spaces in six villages: Bykov Otrog,
Malaya Bykovka, Yelanka, Mayanga,
Kormezhka, and Maloperekopnoye.
As a result, Balakovo won prizes
in several nominations of a regional
landscaping competition and
was recognised the most well-
maintained city of the Saratov region.
Leningrad region
In 2023, the Leningrad region had 14
facilities and public spaces renovated
and landscaped as part of Our
Favourite Cities programme.
Additionally, the Volkhov branch
organised a series of events
to address the pressing social issues
of Volkhov. One of the most successful
events was the Cultural Cat festival,
which featured fundraising and food
donation initiatives for helping animals,
discussions with veterinarians,
a drawing contest, and many more.
More than 100 people participated
in a campaign launched
by the Company to clean up the banks
of the Volkhov River, a crucial
waterway of the region.
Murmansk region
In 2023, the Murmansk region
had 18 social facilities (schools,
kindergartens, hospitals, museums,
churches, etc.) renovated and 35
public spaces (including parks, public
gardens and courtyards) landscaped
as part of Our Favourite Cities
programme. Additionally, assistance
was provided to 37 non-profit
organisations (charitable foundations
and public organisations for disabled
people and veterans).
Promoting entrepreneurship
The Company traditionally supports a range of initiatives aimed at promoting entrepreneurship in the regions
of operation, as it is fully aware of the positive impacts it has on the economic activity, employment market and well-
being of respective regions.
1
2
In 2023, in Cherepovets
the share of external
co-financing for PhosAgro’s
competitive corporate-city
project Making Our City Better
Together! reached 52%.
One of PhosAgro Group’s key
social investment projects
is the development of the
infrastructure of the Khibiny
mountain tourism cluster. The
flow of tourists to the Khibiny
Mountains has been steadily
growing over the past five
years. The growing tourism
industry stimulated demand
for local services. The Company
supports local businesses in
partnership with municipal
authorities, acting through the
Tourism and Entrepreneurship
Development Agency, a dedicated
non-profit organisation. With new
hotels and hospitality facilities
opened, jobs are being created,
people’s income is growing, and
so are local tax revenues. As a
result, the unemployment rate in
the city has decreased almost 10
times over 10 years from 5.9% to
0.6%. The number of SMEs has
grown almost 2.5 times, from 728
to 1,693.
RUB 8 mln worth of interest-free
loans and grants was allocated
on a competitive basis to 12
tourism and other related
business projects initiated
by entrepreneurs from Kirovsk.
Additionally, assistance
was provided in obtaining
a federal grant from the Russian
Ministry of Economic Development
in the amount of RUB 20.7 mln.
Currently, the Company
supports 16 investment projects
aimed at developing tourism
infrastructure in Kirovsk and
creating 420 new jobs, with
investments totalling RUB 2.9 bln.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PhosAgro Schools
The first stage of the school–college/
university–facility career guidance
model operates across six educational
entities based in five cities: Volkhov,
Balakovo, Apatity, Kirovsk, and
Cherepovets, where 360 teachers
educate more than 6,000 students.
Beyond financial support
for school infrastructure and
refurbishment, the initiative facilitates
the advancement of natural sciences,
economics, and management studies.
It champions career guidance initiatives
and pursues ventures designed to instil
a corporate ethos, leadership acumen,
and personal competencies that mirror
the Company’s principles – spirituality,
ethics, leadership, reliability, safety,
teamwork, continuous improvement,
and innovation. Furthermore, there
is a retraining and incentive framework
in place for the teachers and
administrators of these institutions.
PhosAgro organises educational
tours annually during the summer
months for all PhosAgro Classes
students to visit production sites and
specialised educational organisations.
It also holds team-building events and
offers elective courses in physics,
chemistry, and maths.
Since 2013, the Company has invested
a total of over RUB 6 bnl in the
programme.
PhosAgro Schools not only develop
educational and research auditoria
and labs, but also implement career
guidance projects to introduce
the Company and its corporate culture
to students, teachers, and parents.
Since 2019, 126 participants
of the PhosAgro Classes programme
who graduated from dedicated
universities have been hired
by PhosAgro units, including 43
in 2023, to take engineering positions.
More than 30 graduates of PhosAgro
Classes are expected to be employed
by the Company in 2024, with over
100 more by 2026.
More than 100 graduates of 2023
have been admitted to higher
educational institutions, with St
Petersburg Mining University enjoying
the highest popularity among them
(25 students). Since 2015, over 1,000
graduates of PhosAgro Classes have
been enrolled in higher educational
institutions, with technical careers
gaining more traction among them
every year.
Over 6 thousand
total number of students at
PhosAgro Schools
360 teachers
working at PhosAgro Schools
126 graduates
from PhosAgro Classes, who
studied at dedicated universities,
have been hired by PhosAgro
units since 2019
Over
100 graduates
from PhosAgro Classes entered
universities in 2023
146
10th-grade students were
admitted to PhosAgro Classes in
September 2023.
In September 2023, 146 new students
started their 10th grade programme
at PhosAgro Classes, marking
the eleventh admission round since
the project launch.
Surveys in 2023 pointed to a rise
in positive feedback from parents
and students on PhosAgro Classes.
Notably, satisfaction with the standard
of teaching saw an increase of 4 p.p.,
bringing it to 94%. An important fact
is that more than 50% of PhosAgro
Classes students who took part
in the survey appreciated the quality
and level of equipment.
2
EDUCATION
Healthy, educated and professionally trained population is a critical driver of any region’s social appeal and
investment case. 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.
SCHOOL–COLLEGE/UNIVERSITY–
FACILITY EDUCATIONAL MODEL
As part of our unique multi-stage
education support programme along
the school–college/university–
enterprise pathway, we implement
career guidance projects
for schoolchildren. In the field
of personnel training, we cooperate
with educational institutions
in the cities and towns where
we operate, as well as in Moscow, St
Petersburg, Ivanovo, Kazan and more.
Financing of the School–College/
University–Facility educational
model, RUB mln
PhosAgro’s educational model is a good
example of consistent progress
on a personnel training strategy,
which covers all levels of education.
It also illustrates a convincing picture
of alignment between the Company’s
goals and government priorities.
‘23
‘22
‘21
612.1
602.8
364.2
School
College
University
Career with
PhosAgro
232
233
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report College/university
At the next stage, we provide
the country’s leading technical
universities with funds for equipment
and supplies and participate
in adapting educational programmes
to the needs of modern production
facilities. Students of PhosAgro
Group’s partner vocational schools
and universities are offered
internships at the Group’s facilities,
and the most promising students get
employment opportunities.
Our collaboration with
technical colleges covers:
setting up testing
grounds and labs
for students to acquire
hands-on experience using
real equipment;
running internship
programmes at PhosAgro’s
facilities with mentors;
supporting students
in undergraduate and
graduate thesis research;
organising and engaging
students in sports,
educational, and research
initiatives, competitions,
Olympiads.
The Company lays a significant
emphasis on advancing secondary
vocational education, consistently
engaging with educational institutions
in the regions of operation, including:
• Kirovsk branch of Murmansk Arctic
State University (Murmansk region);
• Cherepovets College of Chemistry
and Technology.
In 2023, around 167 students
were trained for and received
some of the key blue-collar jobs
at the Company.
PhosAgro also supports a Training
Centre at the Cherepovets College
of Chemistry and Technology that
offers express programmes in chemistry
and associated fields to nurture talent
for most in-demand jobs.
In 2023, the college again took
part in Professionalism, a federal
project set to “reload” vocational
education. PhosAgro is providing
financial support for an internship-
focused training programme
for the professions: Inorganic
Production Operator and Installation,
Maintenance, and Operation
of Industrial Equipment. In 2023, 75
students were admitted to the project.
Cooperation with universities as part
of the school–college/university–
facility educational model serves to fill
the most relevant jobs by attracting
and retaining talented graduates.
Today, the Company actively
collaborates with 24 universities that
offer courses relevant to its core
activities to provide high-quality and
affordable education and support
research.
167 students
were trained and hired in 2023
As part of its collaboration with universities, PhosAgro:
1
4
sponsors advanced training
for graduates of PhosAgro
Classes in the fields relevant
to PhosAgro (subject to their
commitment to future employment
at the Company);
2
offers scholarships to the most
talented students (based on exam
results);
3
invites university students to take
a tour of the Company’s facilities;
offers students a job in one
of the Company’s popular
specialisations after they
graduate;
5
allocates money for repair
and equipment of chemistry
laboratories at dedicated
universities.
We have cooperation agreements
and roadmaps with many
universities.
PhosAgro-START programme
One of PhosAgro’s pivotal
collaborative efforts with higher
education establishments
is the recruitment of university
graduates through the PhosAgro-
START corporate programme,
previously known as High-Potential
Graduates. This programme, bolstered
by an 11-year synergy with academic
institutions, is tailored to foster
closer contacts with graduates, build
a talent pool for key positions within
the Company and identify career
paths for capable young professionals
eager to work for the Company.
Within this framework, PhosAgro
offers young talents comprehensive
professional development,
hands-on training, and nurtures their
personal and leadership competencies
via corporate training sessions,
workshops, and project presentations,
all under the supervision of seasoned
mentors.
Those enrolled in the programme
enjoy competitive remunerations,
assistance with relocation and
settling in their new environment,
and are offered accommodation.
Additionally, every young professional
is partnered with a well-versed mentor
colleague.
To prepare future leaders and
establish a pool of internal
experts, programme participants
are categorised into two development
pathways:
• the Leader career track
concentrates on honing managerial
and cross-functional competencies;
• the Expert career track focuses
on specialising in a specific domain
to enhance expertise and skills.
In 2023, 54 young professionals were
recruited by the Group’s entities.
This brings the total number
of graduates who have joined
the Company since the launch
of the university engagement
programme to 620 people. 416 of these
employees are still with PhosAgro
today, pursuing careers in such areas
as mineralogy, geology, hydraulic
engineering, chemistry, thermal
energy and electricity generation, rail
transport, open-pit and underground
mining, and mine surveying.
Of the programme participants still
employed at PhosAgro as at December
2023, over 47% had received
promotions and had been included
in our talent pool, and many of them had
successfully completed the projects
assigned to them upon recruitment.
54
young professionals
were recruited by the Group facilities
in 2023
620 graduates
joined the Company under the
university engagement programme
Item
2021
2022
2023
1
Number of PhosAgro-START participants, persons
1.1
Target
1.2 Actual
1.3
Performance %
2
3
4
5
Number of PhosAgro Schools graduates enrolled to study technical
professions, persons
Number of PhosAgro Schools graduates enrolled to study technical
professions under targeted and scholarship arrangements, persons
Number of PhosAgro Schools graduates hired by the Company, persons
Internship focus – number of students who had/have internship
at PhosAgro facilities/entities for self-identification and self-actualisation
purposes, persons
57
53
93
63
19
26
749
59
59
100
73
25
30
64
54
84
73
30
43
1,009
1,281
234
235
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Project of cooperation with
Russianagricultural universities
At PhosAgro, we believe that
the development of education
in the agribusiness sector is a crucial
factor in supporting and enhancing
the robust growth that Russian
agriculture has been delivering
in recent years. We are focused
on fostering the right conditions
for that by developing professional
competencies of students and
teachers at agricultural universities,
as well as of agricultural producers
and agro-industrial technology service
providers.
The creation of educational
infrastructure is of paramount
importance, and it is only achievable
with the commitment of engaged
businesses. In line with this vision,
Timiryazev Agricultural Academy
has established the first flagship
multifunctional centre, setting
the stage for an educational network
of 17 regional agrarian universities.
Looking ahead to 2024–2025,
we project to integrate PhosAgro
Group’s educational initiatives into
57 Russian agrarian universities,
and to give life to another eight
educational centres.
In 2024, we anticipate offering a total
of 500 lectures that delve into various
aspects of agricultural production,
business, and environmental
stewardship, encompassing topics like
rational and responsible agricultural
practices, production processes,
food security, and other sustainable
development domains. A selection
of these lectures is set to evolve into
15 additional professional education
courses, culminating in the awarding
of both personal PhosAgro certificates
and official state qualifications.
17 regional agrarian
universities
are part of the educational network
8 educational centres
will be opened in 2024–2025
A contemporary agricultural
university is much more
than a hub for theoretical
education; it also serves
as an incubator for pioneering
new technologies. Recognising
this, the Company is dedicated
to nurturing digital education
platforms. Our initial stride
in this direction has been
the introduction of Pro Agro
Lectorium, an online digital
educational platform that
grants unrestricted access
to free agronomic lectures..
15 new courses
for additional professional
education to be launched by
2024
DROZD (Educated and Healthy
Children of Russia)
DROZD (Educated and Healthy
Children of Russia) is the Company’s
key social project aimed at a balanced
development of young people in the
cities where we operate.
The project is a comprehensive
system of multi-faceted long-term
interactions with children aged 4 to 18
that harmoniously combines sports,
spiritual, and patriotic education.
To facilitate the DROZD programme,
operators (independent non-profit
organisations) have been established
in five cities where the Group
operates: DROZD-Balakovo (Saratov
region), DROZD-Cherepovets (Vologda
region), DROZD-Khibiny (Murmansk
region) and DROZD-Volkhov
(Leningrad region). 2023 marks
the 20th anniversary of the DROZD
programme.
Media actively spotlight DROZD’s
endeavours:
• in local and corporate newspapers
and e-publications;
• in regional and national media
outlets;
• in social networks and partner
communities that post information
about DROZD’s member
organisations and events.
Nevertheless, DROZD collaborates
with social service centres, crisis
centres, and homes for children
without parental care, integrating their
involvement into the programme’s
initiatives.
An important feature
of the project is continuous
children’s 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.
Health monitoring
3,524
Number of children monitored,
persons
4.5
Average health index
of all children monitored,
at the beginning
of the reporting period
4.6
Average health index of all
children monitored, at the end
of the reporting period
1,930
Number of children who
improved their health index,
persons
236
237
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Independent organisations within
DROZD currently serve 7,785 children,
who practice 30 disciplines in 78
sports classes. Among them, over 170
children with disabilities also take part
in the organisations’ programmes.
In addition, DROZD has established
11 non-sports hobby groups
for popular science, patriotic and
preliminary military training, fitness,
Media School, robotics, etc. 2023 saw
the participation in DROZD events rise
to 55,487 individuals, a 39% increase
from the previous year.
Total number of involved, persons
Children of PhosAgro employees, persons
7,785 +7.2%
7,263
‘23
‘22
1,695 +5.5%
1,606
Number of events held
Number of offsite events held
2022
563
413
Total number of participants in DROZD events, persons
39,840
55,487
Number of sports
Number of sports clubs
Number of non-sports clubs
Total headcount (including administrative and managerial staff,
instructors, and other employees, with part-timers covered),
persons
26
70
9
123
30
78
11
138
2023
Δ 2023/2022,%
641
558
13.9
35.1
39.3
15.4
11.4
22.2
12.2
Winners and runners-up of international
competitions
Winners and runners-up of national
competitions
Winners and runners-up of international
Winners and runners-up of regional
competitions
‘23
‘22
‘23
‘22
‘23
‘22
Winners and runners-up of municipal
competitions
‘23
‘22
Candidate masters of sports
competitions
‘23
‘22
Winners and runners-up of national
competitions
‘23
‘22
6
10
86
71
Sports achievements of students, persons
Winners and runners-up of international
competitions
Winners and runners-up of regional
competitions
‘23
‘22
Winners and runners-up of national
competitions
‘23
‘22
6
10
86
71
‘23
‘22
Winners and runners-up of municipal
competitions
‘23
‘22
1,476
1,158
‘23
‘22
Masters of sports
‘23
‘22
3,874
3,406
GTO fitness tests, persons
Winners and runners-up of regional
competitions
To gauge the effectiveness
of DROZD’s activities, an annual
‘23
‘22
survey captures feedback from
children and parents within each
organisation, pinpointing strengths
Winners and runners-up of municipal
competitions
and weaknesses. The latest survey
‘23
‘22
1,476
1,158
3,874
3,406
Candidate masters of sports
findings reveal a tremendous rise
30
‘23
in positive parent feedback – from
13
‘22
84% to 90% – about the organisation
of classes across the four regions
Masters of sports
where DROZD operates.
‘23
‘22
4
2
‘23
‘22
Children who completed GTO training
Children who passed GTO fitness tests
Candidate masters of sports
SPIRITUAL REVIVAL
3
‘23
‘22
30
13
The main objective of the programme is to preserve and promote orthodox values, spiritual ideas, and respect for our
legacy and motherland.
Masters of sports
6
10
86
71
1,476
1,158
3,874
3,406
30
13
4
2
104
52
171
51
In 2023, funds raised accounted
for 38.29% compared to the amount
of funds from the founder, which
indicates the popularity and great
interest in the project not only from
the region’s local communities, but
also from the regional authorities.
Programme expenses, RUB mln
203.6
58.7
147.2
44.6
121.7
39.2
‘23
‘22
‘21
262.3
191.8
160.9
Funding provided by Apatit
Funds raised from third parties
4
2
‘23
‘22
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.
In 2023, the Company extended support
to the patriarchate, dioceses, and 40
churches in the regions of operation
and other domestic and international
locations, which included financial
aid, coverage of repair works, and
contributions of mineral fertilizers.
4
CONNECTING GENERATIONS
The main goal of the programme is to preserve memory of the history of the nation, industry, or facility for all
generations; traditions of respect for the older generation, veterans, and vulnerable population groups.
Career Guidance and Exhibition
Centres project
PhosAgro Group’s corporate
interactive museums are integral
to the vocational guidance programme
targeting schoolchildren, students,
and young professionals.
The Group’s interactive education
centre combines the features
of museums, exhibition venues,
and interactive learning spaces, all
situated within the cities that host
the Company’s operations.
‘23
‘22
Item
1
2
3
4
5
6
7
238
239
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report PARTICIPANTS:
Fifteenth Element, a museum and
exhibition centre and a centre for
interactive learning in Volkhov
Green Planet, a centre for interactive
education in Cherepovets
Academy of Fertility, a centre for
interactive learning in Balakovo
Museum and exhibition centre for
interactive education of Apatit
in Kirovsk
The centres boast permanent
multimedia and interactive exhibitions
on chemistry, geology, safety, and
agrochemistry advancements.
These hubs run educational
programmes, hold chemical and
geological workshops, creative master
classes, scientific lectures, and
vocational guidance assessments.
The interactive education centres
provide information about specialised
educational programmes, such
as Talent Pool, PhosAgro-START, and
PhosAgro Schools. Schoolchildren
and students are invited to participate
in a bespoke vocational guidance test
and offered insights into professions
in high demand at the Company’s
facilities.
Number of events held at the
Company’s museum and exhibition
centres
‘23
‘22
4,560
3,425
Growth in the number of visitors to the Company’s museum and exhibition
centres in the reporting period, people
Item
Offline
Online
Total
240
241
2022
85,544
241,034
326,578
2023
110,843
281,793
392,636
Awards won by museum and
exhibition centres and centres
for interactive learning
Volkhov
• Won the second prize in
the Short Film category at
the MEETINGS ON VYATKA
Russian Film Festival for the
films about tourist attractions
• Received the second-degree
diploma at the Corporate
Museum – 2023, 5th National
Award, in the Best Museum
Event category
Cherepovets
• Received the second-degree
diploma at the Corporate
Museum – 2023, 5th National
Award, in the Best Corporate
Museum category
Balakovo
• Won the first-degree diploma
at the Corporate Museum –
2023, 5th National Award,
in the Best Educational Projects
of a Corporate Museum
category
Kirovsk
• Came third in How Does
it Work?, a regional industrial
tourism competition
• Won the first-degree diploma
at the Corporate Museum –
2023, 5th National Award,
in the Development of HR
Potential category
Security Agents project
This project is aimed at promoting
a responsible attitude towards safe
behaviour and raising awareness in
children, young people and their parents.
In 2023, PhosAgro continued a unique
project for schoolchildren which
was initiated by the Cherepovets
facility and enlisted the support
of Apatit’s Economic Security
Department and the Ministry of Internal
Affairs’ Office in Cherepovets.
The project achieved the following results:
Laboratory of Safety, a space
dedicated to raising awareness
and facilitating prevention
measures, created
Security and safety training courses
developed for different audiences
(including children)
Mobile exhibitions Safety Route,
Road Safety in Cherepovets, and
Safety Laboratory in Volkhov set
up
Five episodes of The Kislov Family, a
cartoon for children (6+), filmed, with
the main characters exemplifying the
significance of choosing a safe life
path
Cyberlab, a new interactive
learning space offering
cybersecurity training, launched
A 12-episode comic book series on
safe internet practices designed
1.3 thousand classes
23 thousand
people involved
3 festivals,
250 schoolchildren
20 project partners
Security Agents, a media school,
set up, offering teenagers to
acquire fundamental skills in
journalism, interviewing, and video
recording and promoting safe
behaviour
Five editions of the Security Agents
information brochure for teenagers
(12+) published
Project experience rolled out at
Apatit’s Balakovo and Volkhov
branches.
It culminated in three grand finale
Safety Territory festivals, which
engaged over 250 school students
and around 20 partner organisations
contributing to the programme’s
success. In 2023, the event expanded
to an interregional scale, drawing
involvement from teenagers across
Cherepovets, St Petersburg,
Arkhangelsk, and Vologda.
Accolades in 2023 included:
• winning the second-degree
diploma for The Kislov Family
cartoon series in the Animated
Films category of the Marvel
of the World, a nationwide
competition of tourist video
presentations for individuals
and teams;
• receiving the title of Laureate
of the Prize of the Ministry
of Internal Affairs of Russia –
StGeorge in the social domain.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Targeted Assistance project
A combination of targeted assistance
to public organisations and support
for volunteer initiatives in the regions
of operation.
More than 70 NGOs, organisations
of veterans and disabled people,
and charitable foundations received
assistance from the Company in 2023.
In the Vologda region, PhosAgro
Group backed 31 NGOs, including
In the Name of Good charity
foundation, women’s associations
such as the Union of Cherepovets
Women and Mothers of Cherepovets
Recommend, as well as the regional
organisation Future Exists,
supporting families with disabled
members. Specifically, In the Name
of Good charity foundation
(established by the Company)
provided targeted aid
for the treatment and rehabilitation
of 127 disabled children. Moreover,
380 families participated
in the foundation’s training sessions,
lectures, and other activities.
In the Murmansk region, PhosAgro
supported the creation of three
volunteer centres (in Kirovsk and
Apatity municipal districts) to offer
leisure-time activities to elderly
people in remote communities.
The Rodnik club assembled 16
social groups to foster both patriotic
and creative pursuits, and offer
dedicated activities for individuals
with disabilities. The value of this
initiative is underscored by a 19%
rise in volunteer centre attendance
by the elderly, a substantial increase
from the previous year.
5
PROMOTION OF SPORTS
Support for Russian sports at the international, national and regional levels, and promoting sports in regions where
the Group operates.
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.
Apart from DROZD, the Company
provides assistance to 25 sports
organisations at the federal, regional,
and municipal levels. In 2023,
total support amounted to nearly
RUB 652 mln
• Russian Cross-Country Skiing
Federation;
• Russian Chess Federation;
• Russian Rugby Federation;
• Moscow Rhythmic Gymnastics
Federation;
The Company’s support at the regional
level went to:
• Proton Volleyball Club (Saratov
region);
• Avtodor Basketball Club (Saratov
region);
PhosAgro’s support at the federal level
went to:
• Russian Olympians Foundation:
• Russian Rhythmic Gymnastics
• Turbina 2016 speedway team;
• Severyanka Volleyball Club
(Vologda region);
• Kovrovets Motoball Club.
Federation;
The Company provides support
to
25 sports
organisations
operating on the federal,
regional and municipal levels
The Company extended
support to
14 entities,
encompassing youth sports
schools, sports associations
and clubs
RUB 652 mln
total financial support in 2023
242
243
In 2023, the Severyanka Volleyball
Club conducted a master class
for DROZD children from Balakovo,
Volkhov, Apatity, Kirovsk, and
Cherepovets.
Regularly, the Avtodor Basketball
Club (Saratov) opens its home
games to students from local
educational and sports schools, and
to minors assigned to the Juvenile
Liaison Office. Over 5,500
children were granted free access
to the team’s games in 2023.
The year also saw the launch
of Sergei Fedorov Hockey
School in Apatity, established
with the support from PhosAgro
and operating as part of DROZD-
Khibiny. The school will nurture
the talents of 150 young athletes.
For more information on the
opening of the Hockey School,
visit the Murman TV and Radio
website.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report CORPORATE
GOVERNANCE
PHOSAGRO IS CONTINUOUSLY EXPANDING ITS CAPACITIES AND
IMPLEMENTING CUTTING-EDGE TECHNOLOGIES, UPGRADING
BOTH ITS PRODUCTION FACILITIES AND MANAGEMENT
SYSTEMS. OUR IMPLEMENTED DIGITAL SOLUTIONS ENHANCE
THE ACCURACY AND TIMELINESS OF INFORMATION ABOUT
ONGOING PRODUCTION PROCESSES, TRANSFORM APPROACHES
TO BUSINESS PROCESSES AND CORPORATE CULTURE, AND
ELEVATE THE EFFICIENCY OF MANAGEMENT TO A NEW LEVEL.
Chairman’s statement
246
Corporate governance
framework
247
Corporate governance
structure
250
General Meeting
of Shareholders
255
Board of Directors
255
Executive bodies
278
Remuneration report
280
244
245
>13 thousand
employees completed information security training
COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICES CHAIRMAN’S STATEMENT
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 other global
challenges facing the agricultural
industry. PhosAgro’s directors commend
the performance of the management
team and its contribution to the strong
results delivered by the Company
in 2023, while also continuing to support
the management in implementing
the Strategy to 2025.
Victor Cherepov
Chairman of the Board of Directors
of PJSC PhosAgro
CORPORATE GOVERNANCE
FRAMEWORK
CORPORATE GOVERNANCE PRINCIPLES
PhosAgro’s corporate governance
principles, structure, practices and
procedures are set forth in its Charter
and Corporate Governance Code.
Provisions of the Company’s Corporate
Governance Code do not contradict
the Corporate Governance Code
recommended by the Bank of Russia’s
Letter dated 10 April 2014 (the “CGC”)
and the UK Corporate Governance
Code (UK CGC, FRC, 2018).
For the full text of PhosAgro’s Charter,
please visit our website.
Полный текст документа «Устав ПАО
«ФосАгро» представлен на сайте Компании:
http://www.phosagro.ru/ori/item4157.php.
Полный текст
документа «Кодекс
корпоративного
управления ПАО
«ФосАгро» представлен
на сайте Компании:
For the full text of PhosAgro’s
Corporate Governance Code,
please visit our website.
Basic principles of the Company’s
corporate governance
Accountability
of management bodies
Equal rights
of shareholders
Transparency
of operations
Responsibility
to society, the state, and
stakeholders
SUSTAINABLE DEVELOPMENT
GOVERNANCE
GRI 2-12, 2-13
Internal drivers
External drivers
Our governance framework
for sustainable development (SD)
relies on a number of internal and
external drivers.
The Company’s mission and
values supported by our
Corporate Strategy
Regulations, stakeholder
expectations for the maturity
of the Company’s SD governance
framework
Биография Родионова И. И.,
выбывшего из состава совета
директоров в марте 2023 года,
представлена в Интегрированном
годовом отчете ПАО «ФосАгро»
за 2022 год на сайте Компании:
For more information on the six
main components of the sustainable
development governance framework,
please visit the Sustainability section
on the official website.
Шесть основных
компонентов системы
управления устойчивым
развитием представлены на
официальном сайте Компании:
246
247
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report 2023 SUSTAINABLE DEVELOPMENT INITIATIVES
GRI 2-14
Documentation
support
Approval of:
• Regulations on Business Presents and
Representation Expenses as amended
• Tax Strategy of PJSC PhosAgro and
other Group Entities as amended
• External Auditor Selection and
Cooperation Policy of PhosAgro
as amended
• Transparency statement under the UK
Modern Slavery Act as amended
• Charity Policy of PJSC PhosAgro
as amended
Project
management
• List and coverage
of sustainability key
performance indicators (KPIs)
expanded
• Coverage of the automated
supplier ESG assessment
system expanded
• Joint project with ESG Alliance
member partners to harmonise
assessment criteria and
design a single supplier ESG
assessment platform launched
Business processes
and organisation
• Strengthening the sustainability
management function
at the corporate headquarters and
the enterprises
• Comprehensive regulations
on interaction in preparing non-
financial reporting updated
• Certificates of compliance
with requirements of ISO 9001,
ISO 14001, ISO 45001, and GMP+
FSA extended
• Preparedness for ISO 50001
certification of our energy
management system externally
assessed
• Climate and water-related risks
and opportunities identified,
assessed and included
in the corporate risk register
248
249
IT
• Calculation of a number
of GRI indicators based
on data from the Company’s
accounting systems
automated
Competencies and
people
• Participating in major
international and Russian
events and initiatives hosted
by the RSPP, ESG Alliance,
UN Global Compact, etc.
• Taking part in the Conference
of the Parties (COP28) to the
UN Framework Convention
on Climate Change for the
first time
Performance review and
reporting
• The integrated annual report
procedure updated and approved
• Global and local ESG ratings and
rankings reviewed
• Procedure for the Strategy
and Sustainable Development
Committee to monitor
the Company’s sustainability
projects developed
• Reporting in line with GRI, CDP,
IFRS, SASB, Bank of Russia,
and Ministry of Economic
Development recommendations
developed
• Non-financial reporting publicly
verified by the Expert Council
of the RSPP
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report CORPORATE GOVERNANCE
STRUCTURE
STRUCTURE OF CORPORATE GOVERNANCE AND
SUSTAINABILITY MANAGEMENT
GRI 2-9
Administrative reporting
Functional reporting
Functional relationship
GENERAL MEETING OF SHAREHOLDERS
Review
Committee
Board of Directors
Board of Directors
committees:
Chief Executive
Officer
Collective executive body
(Management Board)
• Audit Committee
• Remuneration and Human
Resources Committee
• Strategy and Sustainable
Development Committee
Internal Audit
Department
Legal and Corporate
Governance Department
Corporate
Secretary
CORPORATE GOVERNANCE ASSESSMENT
To assess corporate governance,
the Company relies on the Corporate
Governance Code recommended
by the Bank of Russia, the UK
Corporate Governance Code (UK
CGC, FRC, 2018), and criteria from
key corporate governance and ESG
ratings as best practice benchmarks.
The actual compliance with the CGC
is evaluated on an annual basis and
disclosed in a dedicated report, which
is subject to review by the Audit
Committee of the Board of Directors
and approval by the Board of Directors,
and forms a part of the Company’s
annual report.
In February 2024, the Board
of Directors reviewed the performance
of the 2023 improvement plan.
The Board scrutinised the evolution
of compliance with the Code’s
principles and trends in the quality
of explanations for non-compliance
or partial compliance. Post-review,
the Board of Directors approved the 2023
CGC Report, and issued a positive
assessment of compliance with the CGC
recommendations. Furthermore,
the Board of Directors praised progress
against the 2023 Corporate Governance
Practice Improvement Plan, and approved
the improvement plan for 2024.
Over the past three years, PhosAgro has
demonstrated a high level of compliance
with the CGC recommendations.
Over the past three years,
PhosAgro has demonstrated
a high level of compliance with
the Code recommendations.
Compliance with the CGC recommendations
CGC section
1. Shareholders’ rights
2. Board of Directors
3. The Company’s Corporate
Secretary
4. Remuneration
5. Risk governance and internal
control
6. Information disclosure
7. Material corporate actions
Total
Percentage of compliance with
the CGC principles, %
Total
number
of matters
13
36
2
10
6
7
5
79
Full compliance
Partial compliance
Non-compliance
‘21
‘22
‘23
‘21
‘22
‘23
‘21
11
32
2
8
6
5
5
69
87
‘22
11
30
2
8
6
7
5
69
87
‘23
11
30
2
8
6
7
5
69
87
1
4
2
2
9
11
1
5
2
1
6
2
8
10
9
11
1
1
1
1
1
2
3
1
1
1
1
2
1
1
Functional departments in sustainable development
• Ecology and Environmental
• Marketing and Development,
Management
• Human Resources and Social Policy
• Technical Development, Capital
Construction and Repairs, Samoilov
Scientific Research Institute for
Fertilizers and Insectofungicides
(NIUIFI)
Innovations, NIUIF
• Procurement
• Project Management
• Economic departments
• Risk Management and internal
Control
Sustainable
Development
Department
Compliance with CGC principles at PhosAgro and other Russian companies, %
Full compliance
Partial compliance
Non-compliance
‘23
‘22
‘21
‘20
76
78
77
87
87
87
85
‘23
‘22
‘21
‘20
19
17
17
PJSC PhosAgro
Russian public joint-stock companies
11
10
11
14
‘23
‘22
‘21
‘20
5
6
5
250
251
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report Degree of disclosure to explain non-compliance (partial compliance) with CGC
principles at PhosAgro and other Russian companies, %
‘22¹
‘21
‘20
PJSC PhosAgro
Russian public joint-stock companies
77
64
76
59
69
63
For every case of partial compliance
or non-compliance, PhosAgro specifies
the measures taken to mitigate
the associated risks in the CGC Report.
In 2023, the quality of PhosAgro’s
disclosure to explain the non-compliance
(partial non-compliance) with
the recommendations of the Code,
according to the Bank of Russia,
improved from 76 to 77%, while
the average level in the Russian
Federation grew from 59% to 64%.
Results of implementing the CG improvement plan developed and approved by the Board of Directors in the analysis
of the 2022 CGC Report
Plan
Actual
Proposed actions following the review of the 2023 CGC Report include:
Despite these intentions, the Committee continued under the leadership
of a non-independent member of the Board (Committee Chairman).
The Committee’s composition was drawn from the post-election Board,
considering attributes most conducive to achieving the Committee’s objectives,
such as relevant experience, education, and expertise.
Upon the re-election
of the Remuneration and Human
Resources Committee in 2023,
the Board of Directors will seek
to elect an independent director
as the Chairman of the Remuneration
and Human Resources Committee.
Once the General Meeting
of Shareholders elects new
members of PhosAgro’s Board
of Directors in 2023, the Board will
seek to staff the Remuneration and
Human Resources Committee with
independent directors only.
As part of the next amendments made
to the Regulations on the Remuneration
and Human Resources Committee
or upon approval of a new version
of the Regulations (presumably
in 2023), a clause on conditions (events)
for reviewing the compensation policies
will be introduced.
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
from time to time and meets the current needs of the Company; thus, stipulating
special conditions (trigger events) for reviewing the policy is not a critical element
of the Regulations. Since there were no other compelling reasons to revise
the Regulations in 2023, its updating was postponed.
In 2023, the Company will resume
the practice of assessing each
Board member individually, as part
of the Board’s overall performance
assessment exercise.
The Board of Directors resolved to skip individual assessment, as 70%
of its members are newcomers since July 2022. In this context, the Board
identified no significant risks associated with not proceeding with an individual
assessment. In 2024, the Company may resume the practice of assessing
each Board member individually, as part of the Board’s overall performance
assessment exercise.
1 The most recent year assessed by the Bank of Russia.
252
253
after the Annual General
Meeting of Shareholders and
election of a new Board, staffing
the Remuneration and Human
Resources Committee exclusively
with independent directors and
seeking to elect an independent
director as its Chairman;
in 2024, the Company resuming
the practice of assessing each
Board member individually, as part
of the Board’s overall performance
assessment exercise;
engaging external experts in relevant
topics;
early notifying shareholders
of the Board’s or Remuneration
and Human Resources
Committee’s assessment
of professional qualifications,
experience, and skills of Board
candidates against the Company’s
present and future needs.
increasing the number of independent
directors in the Strategy and
Sustainable Development Committee
and electing an independent director
to chair it;
Report on compliance with the principles and recommendations
of the Corporate Governance Code (stand-alone document)
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report Changes in self-assessment as regards compliance with corporate governance principles
Number and brief description
of the principle
Criteria to evaluate compliance with the corporate governance
principle
1. The board of directors has established a remuneration
committee comprising solely independent directors
2. The remuneration committee is chaired by an independent
director who is not the chairman of the board of directors
3. The company’s internal regulations set out the tasks
of the remuneration committee, including those listed in
Recommendation 180 of the Code, as well as the conditions
(events), upon the occurrence of which the remuneration
committee considers revising the company’s remuneration
policy for members of the board of directors, executive bodies
and other key executivesв
Status of compliance
2022:
Non-compliance
2023:
Partial compliance
GENERAL MEETING
OF SHAREHOLDERS
The activities of PhosAgro’s supreme
governing body – the General
Shareholders’ Meeting – are governed
by the Regulations on the General
Meeting of Shareholders. In March
2023, the Annual General Meeting
of Shareholders was held in absentia
to elect new members of the Board
of Directors and Review Committee,
determine the Board of Directors’
remuneration, and resolve on other
matters within the Meeting’s remit.
The reporting year also saw three
extraordinary General Shareholders’
Meetings convened to vote on payout
of interim dividends.
For the full text of PhosAgro’s
Regulations on the General Meeting
of Shareholders, please visit
the official website of the Company.
Полный текст документа
«Положение об общем
собрании акционеров ПАО
«ФосАгро» представлен
на официальном
сайте Компании:
Criterion 1 was only partially complied with, as one of the members of the Remuneration and
Human Resources Committee does not meet the independence requirements. The Committee’s
composition was drawn from the post-election Board, considering attributes most conducive
to achieving the Committee’s objectives, such as relevant experience, education, and expertise.
Once the General Meeting of Shareholders elects new members of PhosAgro’s Board of Directors
in 2024, the Board will seek to staff the Remuneration and Human Resources Committee with
independent directors only.
Criterion 2 is partially complied with, as the Chairman of the Remuneration and Human Resources
Committee is not an independent member of the Board of Directors. Nonetheless, the individual
in question is a seasoned HR management expert whose perspective on Board meeting agenda
items has always relied only on professional expertise and insight, independent of other Board
members or Company management team.
The Committee Chairman does not concurrently serve as the Chairman of the Board of Directors.
Upon the re-election of the Remuneration and Human Resources Committee in 2024, the Board
of Directors will seek to elect an independent director as the Chairman of the Remuneration and
Human Resources Committee.
Criterion 3 was not met with respect to the 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 PhosAgro’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
When deliberating on amendments to the Regulations on the Remuneration and Human Resources
Committee or the adoption of a new version of the Regulations (anticipated in 2024–2025), specific
triggers (events) for reviewing the above policy will be incorporated into the draft documents.
BOARD
OF DIRECTORS
In 2023, the Board of Directors
continued to oversee strategic
focus areas and key decision-
making within its scope
of functions. Throughout the year,
the Board focused on maintaining
the continuous operation
of the Company’s production
assets, supporting established
supply chains and building new
ones.
2.8.2. Performance
of the remuneration
committee
Comments
254
255
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report STRATEGY AND GLOBAL CHALLENGES
In 2023, the Board of Directors
continued to develop our
updated Strategy to 2030, but
given the serious rise in the level
of uncertainty, this will take longer
than expected.
The Board traditionally paid great
attention to monitoring progress
in the implementation of the Strategy
to 2025, including a detailed review
of progress towards strategic goals
in functional areas such as sales,
logistics, production, environmental
protection and climate change,
occupational health and safety,
and personnel development.
Statutory compliance was rigorously
evaluated, and the practice of doing
regular surveys of stakeholder
expectations and reviewing changes
in the external environment,
particularly concerning sustainable
development objectives, was
expanded.
In the reporting year, the fruitful
exercise of incorporating anti-crisis
management topics into the agenda,
established in 2022, continued.
This approach focuses on planning
and assessing efforts to ensure
stable and sustainable operation
of the Company’s production sites,
especially in procurement and sales,
amid the existing conditions.
In addition, the focus of the Board
during the year was on approved
projects that, though not part
of the Strategy to 2025, meet
the criteria adopted by the Board
when approving the Strategy
in the context of the main scenarios
considered. These criteria include
sustainable production growth,
introduction of innovative and
sustainable products and processes,
and stronger operatingefficiency.
The Board also reviewed a number
of investment initiatives that form
the basis for the Strategy to 2030
and can be integrated into it in line
with developments in the markets.
SUSTAINABLE DEVELOPMENT AND CORPORATE GOVERNANCE
GRI 2-12, 2-14
During 2023, as part of the action
plan to implement the ESG agenda
in the Company’s practices,
the Board of Directors updated the tax
strategy and a number of internal
documents on charity, sponsorship,
and external audit.
In the reporting year, the
Board of Directors continued
reviewing the Company’s
practices for compliance with
the recommendations published
by the Bank of Russia in December
2021 to encourage boards of directors
of public joint-stock companies
to consider ESG factors and
sustainable development in their
activities. Building on the practice
of assessment introduced in 2021,
the self-assessment of the Board
of Directors’ performance for 2023
factored in the regulator’s
recommendations. The post-
assessment steps were also largely
based on this significant document
of the Bank of Russia, which reasserted
that the Company’s sustainable
development and high-quality
corporate governance are intertwined.
INFORMATION TECHNOLOGIES AND INFORMATION SECURITY
In accordance with its earlier
decision, the Board of Directors
reviewed the quality of countering
information security threats twice
during 2023. The Board also focused
on the Company’s readiness
to replace software that is about
to be no longer supported in Russia
after the sanctions were imposed.
256
257
• appointment and evaluation
• evaluating the alignment
ONGOING TASKS
In addition to the above key tasks, which
were the top priorities in the reporting
year, there are traditional focus areas
in the Board’s activities:
• assessment and quarterly monitoring
of 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 compliance with
of the performance
of PJSC PhosAgro’s CEO and
Management Board;
• oversight over management
relations with shareholders,
investors and other stakeholders;
• monitoring the implementation
of priority areas of PhosAgro’s
activities in 2023 and determining
priority areas of its activities
for 2024;
the Inside Information Regulations;
• reviewing PJSC PhosAgro’s budget
• assessment of the quality
of investment and organisational
project management at PhosAgro
Group subsidiaries;
for 2024, as well as quarterly
follow-up on the 2023 budget
utilisation;
of the Company’s corporate
culture with its goals, values, and
strategy; assessing and overseeing
the corporate culture;
• reviewing and approving
the results, work plans, and budget
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;
• assessing the quality of non-financial
reporting and approving
the Company’s annual report.
PARTICIPATION IN THE BOARD MEETINGS
Meetings of the Board of Directors
12 meetings
of the Board of Directors held
in 2023
78 agenda items
considered by the Board of Directors
in 2023
‘23
‘22
‘21
12
10
7
1
2
12
12
8
In-person meetings
Absentee meetings
Participation in the Board meetings
Participation
Victor Ivanov
Yuri Krugovykh
Siroj Loikov
Ivan Rodionov (before 24 March 2023)
Natalia Pashkevich
Vladimir Trukhachev
Alexander Seleznev
Victor Cherepov
Mikhail Rybnikov
Alexander Sharabaika
Andrey Sharonov
Board
of Directors
Audit
Committee
Remuneration and Human
Resources Committee
Strategy and Sustainable
Development Committee
11/12
12/12
12/12
3/12
11/12
8/12
12/12
11/12
12/12
12/12
11/12
2/6
4/6
6/6
6/6
1/4
3/4
1/4
3/4
4/4
2/4
2/4
4/4
4/4
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report COMPOSITION OF THE BOARD OF DIRECTORS
GRI 2-9, 2-10, 405-1
The General Meeting of Shareholders
annually elects ten members
of the Board of Directors
by cumulative voting: the nominees
with the highest number of votes
are elected.
The composition of the Board
of Directors is well-balanced in terms
of the qualifications, expertise and
business skills of its members. Board
members should have a recognised,
including among investors and
shareholders, good business
reputation and no conflicts of interest
with the Company.
The Company should aim for a well-
balanced composition of its Board
of Directors, where the qualifications,
experience, knowledge, business
acumen, and independence
of members are harmonised.
The Remuneration and Human
Resources Committee and the Board
of Directors themselves assess these
attributes of prospective candidates
and of the serving directors at least
semi-annually. This assessment
includes evaluating whether potential
members can dedicate adequate
time to their duties on the Board,
considering all other commitments.
The Committee’s findings on these
matters are compiled as part
of the documents for the General
Meeting of Shareholders
whenever elections to the Board
are on the agenda.
Furthermore, the correlation
of Board members’ competencies
with the Company’s strategic needs
is revisited by the Remuneration
and Human Resources Committee
annually. This is part of managing
the succession planning for key
executive roles and within the context
of the Board’s annual performance
assessment. The outcomes of these
deliberations are communicated
to the Board of Directors
by the Committee Chairman as part
of its performance report.
In the reporting year, there
was modest turnover within
the Board, with only one new
member elected. The Board’s
responsibility to the government,
shareholders, employees,
communities in the regions
of PhosAgro’s footprint
and other stakeholders
for the Company’s operational,
financial, environmental and
social performance remained
unchanged.
Board of Directors: independence, %
Board of Directors: gender split, %
Before 27 March 2023
After 27 March 2023
90
10
Men
Women
Board of Directors1: age %
10
40
50
0
50
50
Non-executive directors
Independent directors
Executive directors
50
20
20
10
Above 60 years
50–60 years
40–50 years
Under 40 years
Board of Directors: length
of continuous service, %
Board of Directors: place
of residence, %
70
10
20
<3 years
4–7 years
>7 years
100
0
0
Russian
Federation
Europe
Southeast Asia
GRI 2-17
Key competencies of Board members
Key competencies (based on professional experience)
c
i
l
b
u
p
d
n
a
y
c
i
l
o
p
n
o
i
t
a
m
r
o
f
n
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s
n
o
i
t
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e
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l
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o
i
t
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v
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n
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e
t
a
r
t
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t
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u
a
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n
a
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n
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n
F
i
t
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m
e
g
a
n
a
m
k
s
R
i
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t
a
r
o
p
r
o
c
d
n
a
w
a
L
e
c
n
a
n
r
e
v
o
g
Member
of the Board
of Directors
Victor
Cherepov
Victor
Ivanov
Natalia
Pashkevich
Andrey
Sharonov
Ivan Rodionov
(before 24
March 2023)
Vladimir
Trukhachev
(after 24
March 2023)
Yuri
Krugovykh
Alexander
Sharabaika
Alexander
Seleznev
Siroj
Loikov
Mikhail
Rybnikov
Status
Chairman, independent
Independent
Independent
Independent
Non-executive
Independent
Executive
Executive
Executive
Executive
Executive
i
i
g
n
n
m
d
n
a
y
r
t
s
m
e
h
C
i
d
n
a
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c
n
a
n
r
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t
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o
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r
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t
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m
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r
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p
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e
b
a
n
a
t
s
u
s
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o
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o
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a
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o
i
t
a
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e
t
n
I
1
)
G
S
E
(
Equity
interest, %
none
0.0013
none
none
0.0064
none
none
none
none
none
0.024
1 There are no members of the Board of Directors under the age of 30.
1
Including competencies in environment, health and safety.
258
259
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report
ROLE OF INDEPENDENT DIRECTORS
Progress of improvement initiatives following the Board’s performance assessment for 2022
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 PJSC PhosAgro’s
management, and they are primarily
focused on improving the Company’s
performance. Following the election
of new directors on 24 March 2023,
five out of ten Board members
are independent and one of the three
Board committees is chaired
by an independent director.
The independence of Board
members and nominees is assessed
biannually by the Remuneration
and Human Resources Committee.
The assessment is based
on the criteria set out in PhosAgro’s
Regulations on the Board of Directors,
Clause 2.4 of the Code, Clause 2
of Appendix 2 (2.18) and Appendix 4
of the Listing Rules of the Moscow
Exchange, and Clause 10 of the UK
Corporate Governance Code (FRC,
2018). In 2023, five of the Board
members (Victor Ivanov, Natalia
Pashkevich, Vladimir Trukhachev,
Victor Cherepov, and Andrey
Sharonov) were recognised
as independent.
D&O1 LIABILITY INSURANCE
The Company has been taking
out D&O liability insurance every
year since 2012. Under the current
insurance contract (insurance period
from 1 June 2023 to 31 May 2024),
liability for third-party losses incurred
in the exercise of duties by directors
and officers of PhosAgro is covered
up to USD 50 mln in rouble equivalent,
with an extension of the aggregate
liability limit for all independent
directors by USD 2 mln. Apart from
directors’ liability, the above contract
includes the liability of the Company’s
officers.
ASSESSMENT OF THE BOARD OF DIRECTORS’ PERFORMANCE
GRI 2-18
In accordance with the Code
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.
In January 2023, IDA – Association
of Professional Directors conducted
an external assessment of the Board
of Directors’ performance for 2022.
The external assessment confirmed
that the Board and its committees
were functioning in accordance
with the recommendations
of the Code and the Listing Rules
of the Moscow Exchange. Corporate
governance practices in such areas
as the organisation of activities and
operation of the Board of Directors,
interaction with committees,
the role of the Board Chairman,
the performance of the Corporate
Secretary, and the Company’s ESG
and sustainability activities were
noted as highly effective.
The Board performance
assessment methodology
was based on international best
practices, Code requirements and
the Listing Rules of the Moscow
Exchange, and was agreed with
the Chairman of the Remuneration
and Human Resources Committee
and the Corporate Secretary.
Questionnaires and interviews were
used to assess the performance
of the Board of Directors and
its committees. During the first stage,
detailed questionnaires were circulated
among the directors. The findings
were supplemented by comments
and feedback from Board members
and management during individual
interviews. As part of the assessment,
the number of the Board’s focus areas
under review was increased to eleven.
Each of them received a fairly high
score. Following the assessment
completion, in March 2023 the Board
approved a number of initiatives
to further enhance corporate
governance practices.
Plan
Actual
More active participation of the Board members
in shaping the agenda of the Board and
its committees, as well as enhancing the agenda
to proactively address future challenges and strategic
risks (strategy updates and changes in external
markets, refining mid- and long-term business and
financial models, risk management issues and search
for opportunities, crisis management practices, top
management development and remuneration, new
technologies)
All recommendations and suggestions of the Board members
with respect to the 2023–2024 work agenda were reflected
in the approved work plan of the Board of Directors
Reviewing the role of the Board of Directors and
streamlining approaches to stakeholder engagement,
including by revising investor relations policies (in line
with the current focus on retail).
Since 2021, the Company has been including stakeholder
engagement topics in the agenda of the Board committees
(Sustainable Development, and Strategy and Sustainable
Development committees), either as separate items or as part
of reviewing non-financial reporting
Inviting external experts to address pertinent subjects
and keep the Board members’ knowledge up to date
The Company drafted reports on innovations in the fertilizer and
related industries and trends in the agriculture for discussion
at the August 2023 meeting of the Strategy and Sustainable
Development Committee without involving external experts.
Improving the onboarding procedure (introducing new
board members to production sites and personnel)
The Company resumed visits of newly appointed directors
to production sites and their meetings with the Company’s
executives
On-site meetings and closer communication with
site management, informal meetings of directors
to discuss the Company’s operations between Board
meetings
In 2023, the Board held an on-site meeting at the Volkhov
production site
Providing the Board members with updated
information on approaches to determining top
management remuneration
The information was reviewed at a meeting of the Remuneration
and Human Resources Committee on 17 May 2023 and the matter
is also included in its agenda on an annual basis
Enhancing the Board’s involvement in future decision-
making regarding top management remuneration
As part of the subsequent review process by the Remuneration
and Human Resources Committee, key aspects of top management
remuneration will be presented to the Committee for approval
Increasing the number of independent directors
in the Strategy and Sustainable Development
Committee and electing an independent director
as its chair
The composition of the Strategy and Sustainable Development
Committee was analysed and disclosed in non-financial reporting
1 Directors & Officers Liability.
260
261
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report The self-assessment of the Board’s
2023 performance was completed
in early 2024. Its results were
discussed in detail at a meeting
of the Remuneration and Human
Resources Committee and, in a more
condensed form, at a meeting
of the Board of Directors in early
April 2024.
The self-assessment was conducted
using questionnaires, with
the questions remaining unchanged
from the external assessment
of the Board’s performance in 2022.
Areas for improvement identified as part of the Board of Directors’ self-assessment
1
3
4
Potentially enhancing the Board’s
well-balanced composition and
range of competencies through
greater gender diversity and
inclusion of younger and foreign
directors
2
Expanding direct communication
between the Board members and
investors, analysts, government
and regulator representatives,
and other stakeholders
Enhancing the Board’s agenda
setting and handling:
• Reviewing the Company’s
Development Strategy
for the next five years,
including as regards such
areas as corporate social
responsibility
•
Inviting experts
to the Strategy and Sustainable
Development Committee
meetings to leverage relevant
external expertise and analyse
best global practices
• Receiving updates from
specific facilities on their
current operations and future
plans
Encouraging the Board members’
participation in public events
organised by the Company (such
as Chemist’s Day, Miner’s Day,
sports and other events)
5
Organising the distribution
of useful short newsletters
and market updates (product
prices, capitalisation, important
regulatory news, etc.)
to the Board members between
meetings
Board of Directors’ self-assessment (scale 1 to 4)
Role of the Board
of Directors
Integral
assessment
3.5
3.5
Composition and structure
of the Board of Directors
3.6
3.4
ESG and sustainable
development
3.6
3.5
3.5
3.2
Organisational and
operational aspects
of the Board of
Directors' work
3.6
3.5
3.9
3.6
Corporate
Secretary
assessment
3.2
3.3
Effectiveness of the
Board of Directors
4.0
3.6
Chairman of the
Board of Directors
3.8
Board committees
engagement
3.3
3.4
Strategy and risks
3.5
3.3
3.1
3.3
3.7
Senior management
engagement
External
stakeholder
engagement
2023
2022
The composition of the Board
of Directors is fully compliant
with the Code requirements and
the Listing Rules of the Moscow
Exchange. The directors believe
that the composition of the Board
of Directors is strong and balanced,
and its structure is optimal (the score
remained at the level of 3.5 achieved
in the 2022 self-assessment).
Organisational aspects of the Board
of Directors’ work were also rated
highly (an increase from 3.5 to 3.6
compared to the previous score),
and the assessment of the Board
of Directors’ effectiveness remained
at the previous level of 3.2.
262
263
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report MEMBERS OF THE BOARD OF DIRECTORS
INFORMATION ON THE MEMBERS OF THE BOARD OF DIRECTORS
GRI 2-11
Victor Cherepov
Chairman of the Board of Directors at PhosAgro,
independent director
Year of election: 2022
Date of birth: 15 January 1951
Alexander Sharabaika
Deputy Chairman of the Board of Directors at PhosAgro,
Deputy CEO for Finance and International Projects at PhosAgro
Year of election: 2022
Date of birth: 25 February 1977
Professional experience
2023 – Pr. – Social Fund of Russia,
Member of the Management Board
2023 – Pr. – PhosAgro, Chairman
of the Board of Directors, Chairman
of the Audit Committee
2023 – Pr. – Kompaniya Ust-Luga,
Member of the Board of Directors
2022–2023 – Kashira Steel Structures
and Boiler Building Plant, Member
of the Board of Directors
2021 – Pr. – RC Novotrans, Advisor
2021 – Pr. – Russian Union
of Industrialists and Entrepreneurs,
Vice President for Social Policy and
Labour Relations
2021 – Pr. – HC Novotrans, Member
of the Board of Directors
2020 – Pr. – Public Council under
the Ministry of Health of the Russian
Federation, Deputy Chairman
of the Public Council
2019 – Pr. – NPF Blagosostoyanie,
Chairman of the Human Resources and
Remuneration Committee, Member
of the Strategic Planning Committee
2008 – Pr. – Federal Compulsory
Health Insurance Fund, Member
of the Management Board
2018 – Pr. – NPF Blagosostoyanie,
Member of the Board of Directors
2018–2023 – AB Energo, Member
of the Board of Directors
2016–2023 – Krasnoyarskii Kotelnyi
Zavod, Member of the Board
of Directors
2016–2020 – Public Council under
the Ministry of Health of the Russian
Federation, Member of the Board
of Directors
2015 – Pr. – Pharmaceutical and
Medical Industry Investors Club,
President
2010–2022 – Machine-Building Factory
of Podolsk, Member of the Board
of Directors
2010 – Pr. – National Medical Chamber,
Member of the Council for Professional
Qualifications in Healthcare
2005–2021 – Russian Union
of Industrialists and Entrepreneurs,
Executive Vice President, Managing
Director of the Department of Relations
with Regional and Industrial
Associations
2002 – Pr. – State University
of Management, Head
of the Department of Healthcare and
Sport Industry Management
Education
Karaganda State Medical Institute,
Degree in General Medicine
School of Medicine, Boston University
School of Public Health, USA
Euromanagement Institute, Germany
MD, Professor, Member of the Russian
Academy of Medical and Technical
Sciences, Member of the International
Academy of Energy Information
Sciences
For information on Ivan Rodionov, who stepped
down from the Board of Directors in March 2023,
please see the 2022 integrated Annual Report
of PhosAgro on our website
Биография Родионова И. И.,
выбывшего из состава совета
директоров в марте 2023 года,
представлена в Интегрированном
годовом отчете ПАО «ФосАгро»
за 2022 год на сайте Компании:
264
265
Professional experience
2017 – Pr. – Apatit, Advisor to the CEO
(part-time)
Education
2022 – Pr. – PhosAgro, Deputy
Chairman of the Board of Directors,
Chairman of the Strategy and
Sustainable Development Committee
2019 – Pr. – PhosAgro, Deputy CEO
for Finance and International Projects
2018–2022 – PhosAgro, Member
of the Management Board
2017–2019 – Apatit, Member
of the Management Board
2015 – Pr. – PhosAgro-Region, Member
of the Management Board
2014–2019 – PhosAgro, Director
for Economic Affairs and Finance
Belarus State Economic University,
Degree in Finance and Credit
University of Nottingham (UK),
Bachelor’s degree in Finance
Moscow School of Management
SKOLKOVO, Executive Coaching
for the Development of Leaders,
Project Management
Victor Ivanov
Member of the Board of Directors at PhosAgro, independent director
Year of election: 2022
Date of birth: 17 January 1943
Professional experience
2023 – Pr. – PhosAgro, Member
of the Strategy and Sustainable
Development Committee
2022–2023 – PhosAgro, Member
of the Remuneration and Human
Resources Committee
2022 – Pr. – PhosAgro, Member
of the Board of Directors
2017 – Pr. – Reatex, Member
of the Board of Directors
Education
2017 – Pr. – Agrochiminvest, Chairman
of the Board of Directors
2013 – Pr. – Pigment, Member
of the Board of Directors
2012 – Pr. – Russian Chemists Union,
President
Tomsk Polytechnic Institute, Degree
in Chemical Process Engineering
Academy of National Economy under
the USSR Council of Ministers
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report Natalia Pashkevich
Member of the Board of Directors at PhosAgro,
independent director
Year of election: 2017
Date of birth: 5 November 1939
Professional experience
2022 – Pr. – PhosAgro, Member
of the Board of Directors
2017–2022 – PhosAgro, Member
of the Board of Directors, Member
of the Environmental, Health and Safety
Committee
2021 – Pr. – Priority 2030 Strategic
Academic Leadership Programme,
Head of the programme
2009 – Pr. – National Research
University, Head of the development
programme
Education
Leningrad Mining Institute, Degree
in Mining Engineering and Economics,
PhD in Economics, Professor
1999 – Pr. St Petersburg Mining
University, First Vice Rector
Andrey Sharonov
Member of the Board of Directors at PhosAgro,
independent director
Year of election: 2017
Date of birth: 11 February 1964
Professional experience
2021–2022 – Sberbank, Vice President
2022 – Pr. – PhosAgro, Member
of the Board of Directors, Member
of the Audit Committee, Member
of the Remuneration and Human
Resources Committee, Member
of the Strategy and Sustainable
Development Committee
2022–2022 – PhosAgro, Chairman
of the Board of Directors
2022 – Pr. – ESG Alliance, CEO
2021 – Pr. – Profilum, Chairman
of the Board of Directors
2020 – Pr. – Foundation
for Development of the Centre
for Elaboration and Commercialisation
of New Technologies (Skolkovo
Foundation), Member of the Board
of Directors, 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
2019–2022 – Rosseti, Member
of the Board of Directors (independent
director), Member of the Personnel and
Remuneration Committee
2018 – Pr. - Medicina, Chairman
of the Board of Directors
2017–2022 – 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
2016–2022 – SKOLKOVO Endowment
Fund, Director
266
267
2016–2022 – Association
for the Development of Moscow School
of Management SKOLKOVO, Managing
Director
2016–2021 – Moscow School
of Management SKOLKOVO, President
2015 – Pr. – Sovcomflot, Chairman
of the Audit Committee, Member
of the Compensation Committee
2014–2022 – International Business
Leaders Forum, Chairman of the Board
of Trustees
2014 – Pr. – MC NefteTransService,
Chairman of the Board of Directors
2014 – Pr. – Sovcomflot, Member
of the Board of Directors (independent
director), Member of the Innovative
Development and Technical Policy
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
Education
Ufa Aviation Institute, Degree in Aviation
Instrument Making
Institute of Socio-Political Research
under the Russian Academy of Sciences,
PhD in Sociology
Russian Academy of Public
Administration under the President
of the Russian Federation, Degree in Law
Moscow School of Management
SKOLKOVO, Executive Coaching
for the Development of Executives,
Top Management Teams and
Organisations
Bocconi University, Italy, DBA
Vladimir Trukhachev
Member of the Board of Directors at PhosAgro
since 24 March 2023, independent director
Year of election: 2023
Date of birth: 16 July 1955
Professional experience
2023 – Pr. – PhosAgro, Member
of the Board of Directors, Member
of the Remuneration and Human
Resources Committee, Member
of the Audit Committee
2019 – Pr. – Russian State Agrarian
University – Moscow Timiryazev
Agricultural Academy, Rector
2018 – Pr. – Agroeducation Association
of Agrarian Universities of Russia,
Chairman
2020 – Pr. – Russian Professors’
Assembly, Head of Agriculture section
2018 – Pr. – Member of the Russian
Academy of Sciences
Education
Stavropol Agriculture Institute,
Degreein Veterinary
Russian Academy of Sciences,
PhD in Agriculture, PhD in Economics,
Professor
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report Alexander Seleznev
Member of the Board of Directors,
Chief of Staff for the CEO of PhosAgro
Year of election: 2022
Date of birth: 6 July 1984
Yuriy Krugovykh
Member of the Board of Directors, First Deputy CEO of PhosAgro,
Deputy General Director for Information Policy of Apatit
Year of election: 2022
Date of birth: 29 May 1955
Professional experience
2022 – Pr. – PhosAgro, Member
of the Board of Directors
2019 – Pr. – PhosAgro, Chief of Staff
for the CEO
2019–2022 – PhosAgro, Member
of the Management Board
Education
Professional experience
2015 – Pr. – Apatit, Deputy CEO
for Information Policy (part-time)
Education
2015–2019 – PhosAgro, Head
of Investor Relations
Bauman Moscow State Technical
University, Degree in Comprehensive
Information Security of Automated
Systems
2022 – Pr. – PhosAgro, First Deputy
CEO of PhosAgro, Member of the Board
of Directors
2022–2022 – PhosAgro, Member
of the Management Board
2013 – Pr. – PhosAgro-Region, Member
of the Management Board
2010–2022 – PhosAgro, Deputy CEO
Moscow University for the Humanities,
Degree in History
Siroj Loikov
Member of the Board of Directors,
First Deputy CEO of PhosAgro
Year of election: 2022
Date of birth: 9 September 1972
Professional experience
2023 – Pr. – PhosAgro, Chairman
of the Remuneration and Human
Resources Committee
2022 – Pr. – PhosAgro, Member
of the Board of Directors
2020 – Pr. – PhosAgro, First Deputy
CEO
2020 – Pr. – Apatit, Advisor to the CEO
(part-time)
Education
2018–2020 – PhosAgro, Deputy CEO
2018–2020 – Apatit, Deputy CEO
(part-time)
2018–2019 – PhosAgro-Region, Deputy
CEO for Human Resources (part-time)
2013–2022 – PhosAgro, Member
of the Management Board
Tashkent State University
of Economics, International Economic
Relations
University of Nottingham (UK),
Bachelor’s degree in Business
Management
Diplomatic Academy of the Russian
Ministry of Foreign Affairs, Degree
in World Economy
Mikhail Rybnikov
Chairman of the Management Board,
Member of the Board of Directors and CEO at PhosAgro
Year of election: 2022
Date of birth: 30 November 1975
2018–2020 – PhosAgro, First Deputy
CEO
Education
Lomonosov Moscow State University,
Master’s degree in Economics
Moscow School of Management
SKOLKOVO, Executive Coaching
for the Development of Executives,
Leadership In Action
2018–2019 – Apatit, Member
of the Management Board
2016–2022 – PhosAgro, Member
of the Board of Directors, Chairman
of the Environmental, Health and Safety
Committee, Member of the Strategy
Committee, Member of the Sustainable
Development Committee
2016 – Pr. – PhosAgro-Region, Member
of the Management Board
2013–2022 – PhosAgro, Member
of the Management Board
Professional experience
2022–2023 – PhosAgro, Member
of the Strategy and Sustainable
Development Committee
2022 – Pr. – PhosAgro, CEO
2022 – Pr. – PhosAgro, Member
of the Board of Directors, Chairman
of the Management Board
2021–2022 – PhosAgro, Deputy CEO
2020–2021 – PhosAgro, Managing
Director
2018 – Pr. – NIUIF, Member of the Board
of Directors
2018 – Pr. – Apatit, Advisor to the CEO
(part-time)
268
269
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report 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 Company’s Board of Directors.
For the full text
of PhosAgro’s Regulations
on the Corporate Secretary,
please visit our website.
Полный текст документа
«Положение о корпоративном
секретаре ПАО
«ФосАгро» представлен
на сайте Компании:
Sergey Samosyuk
Year of appointment: 2016
Date of birth: 1 October 1976
Professional experience
Education
Achievements
2023 – Pr. – PhosAgro-Region,
Corporate Governance Advisor
to the CEO (part-time)
St Petersburg State University
of Economics, Degree in Engineering
and Economics
2022 – Pr. – PhosAgro, Advisor
to the Deputy CEO for Sales, Marketing
and Logistics (part-time)
St Petersburg University, Degree in Law
National Research University Higher
School of Economics, Executive MBA
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
(part-time)
2016 – Pr. – PhosAgro, Corporate
Secretary
Professional award of the Semyonov
National Corporate Secretaries
Association (NCSA) in the Cutting-Edge
Practices in Corporate Governance
for Board of Directors’ Support and
Exemplary Disclosure Leadership
categories (2023)
2020 Director of the Year National
Award for the best corporate
governance directors / corporate
secretaries
COMMITTEES
OF THE BOARD
OF DIRECTORS
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 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.
At its meeting on 30 March
2023, the Board of Directors
established three committees:
Audit Committee;
Remuneration and Human
Resources Committee;
Strategy and Sustainable
Development Committee.
270
271
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report INFORMATION ON COMMITTEES’ PERFORMANCE
AUDIT COMMITTEE
The activities of the Audit Committee (hereinafter in this section “the
Committee”) are governed by the Regulations of the Audit Committee.
For more information,
please visit
the Company’s website.
Полный текст документа
«Положение о комитете по аудиту
ПАО «ФосАгро» представлен на
сайте Компании.
Committee members
as at 31 December 2023
First and last
name
Position
Victor
Cherepov
Committee Chairman,
independent director
Vladimir
Trukhachev
Committee member,
independent director
Andrey
Sharonov
Committee member,
independent director
The Committee’s statistics
Meetings,
including in person
Matters
6
5
6
35
30
35
‘21
‘22
‘23
‘21
‘22
‘23
272
273
Key highlights in 2023
Ongoing tasks
External auditor
In the reporting year, the Committee
focused on the quality, reliability
and timeliness of financial and
non-financial corporate reporting.
In 2023, the Committee paid
special attention to the taxation
of the Company’s operations.
Relevant matters were
included on the agenda of two
of its meetings, including the one
held in December 2023 to approve
a new version of PhosAgro’s Tax
Strategy.
In line with the recommendations
submitted after external
assessment of the Board’s
performance in 2022,
the Committee reviewed
the Company’s report on investor
relations in the context of key
challenges in 2022 and 2023,
including limitations on the exercise
of rights by shareholders,
Based on the 2023 results,
the Committee is happy
to report an invariably high
quality of financial reporting,
observance of previously
established release
deadlines, and the growing
scope and improved quality
of non-financial reporting.
holders of depositary receipts,
and bondholders, and a significant
increase in the share of retail
investors. The Committee praised
the quality of interaction between
the Company’s relevant departments
and investors/shareholders in the new
circumstances.
The Committee focused
on the following:
• analysis, review and discussion
of the Company’s annual financial
and operating performance based
on the IFRS consolidated financial
statements, including reasons
for deviations from the previous
periods;
• approval of the plan and budget,
and assessment of the Internal Audit
Department’s performance;
• analysis of the Company’s
compliance with Russian
and European legislation
on the protection and use of insider
information;
• review of quarterly IFRS
• analysis of the quality
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
in accordance with RAS and IFRS;
• review of the external auditor
plan for the assurance of 2023
financial statements;
of the Company’s corporate
governance, including compliance
with the Corporate Governance
Code;
• discussion with legal and tax
department heads about ongoing
issues that may have an impact
on financial statements;
• development of non-financial
reporting regulations, analysis
of quality and completeness of ESG
reporting in 2023 as compared
to previous periods.
The Committee’s approach
to assessing the independence
and effectiveness of external audit,
as well to the appointment and
reappointment of the external auditor
is described in detail in the new
version of PhosAgro’s External Auditor
Selection and Cooperation Policy
approved by the Board of Directors
in August 2023. 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, with
due regard to appropriate
independence considerations.
Полный текст документа
«Положение об общем
собрании акционеров ПАО
«ФосАгро» представлен
на официальном
сайте Компании:
For more information, please
visit the Company’s website.
(более подробная информация
представлена на сайте Компании:
https://cdn.phosagro.ru/upload/docs
/External_Auditor_Selection_and_Coop
eration_Policy_upd_rus.pdf).
Victor Cherepov
Chairman of the Audit
Committee
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report REMUNERATION AND HUMAN RESOURCES COMMITTEE
The Remuneration and Human Resources Committee (within this section,
the “Committee”) is governed by the Regulations on the Remuneration and Human
Resources Committee.
Полный текст
документа «Кодекс
корпоративного
управления ПАО
«ФосАгро» представлен
на сайте Компании:
For more information, please visit
the Company’s website.
Полный текст документа
«Положение о комитете по
вознаграждениям и кадрам
ПАО «ФосАгро» представлен
на сайте Компании:
Committee members
as at 31 December 2023
Committee
member
Siroj Loikov
Position
Committee Chairman,
executive director
Vladimir
Trukhachev
Committee member,
independent director
Andrey
Sharonov
Committee member,
independent director
The Committee’s statistics
Meetings,
including in person
Matters
4
3
4
16
12
15
Key highlights in 2023
Twice a year, initially when assessing
nominations to the Board of Directors
and subsequently when appraising
its final composition, the Committee
analyses the adequacy of the Board
members’ skills, experience, expertise,
and business acumen for their
service on the Board of Directors,
assesses the Board members against
independence criteria, and identifies
reasons (if any) that could disqualify
them from serving on the Board
of Directors.
The Committee’s conclusions
with respect to the nominees
to the Board of Directors are included
in the materials for the General
Meeting of Shareholders voting
on the election of Board members.
While preparing the shareholder
information for the Annual General
Meeting, the Committee, among
other factors, analysed the effect
of important external nominations
of independent directors on their
ability to duly discharge their
responsibilities as the Company’s
Board members.
Independent directors’ external
nominations as at 31 December 2023:
• Victor Cherepov: Russian Union
of Industrialists and Entrepreneurs,
State University of Management,
Pharmaceutical and Medical
Industry Investors Club, Novotrans
Repair Company, Novotrans
Holding Company, Krasnoyarskii
Kotelnyi Zavod, AB Energo,
Kompaniya Ust-Luga, Kashira Steel
Structures and Boiler Building
Plant, and others;
• Victor Ivanov: Russian Chemists
Union, AgroChimInvest, Reatex,
Pigment;
• Andrey Sharonov: ESG Alliance,
Sovcomflot, MC NefteTransService,
Profilum, En+ Group, Medicina, and
others;
• Natalia Pashkevich: St Petersburg
Mining University;
• Vladimir Trukhachev: Russian State
Agrarian University – Moscow
Timiryazev Agricultural Academy,
Agroeducation Association
of Agrarian Universities, Russian
Academy of Sciences.
‘21
‘22
‘23
‘21
‘22
‘23
274
275
The Committee found that 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.
Other highlights of the Committee’s
activities included consideration
of the 2030 demographic forecast,
and review of workforce composition
in PhosAgro and companies within
PhosAgro Group as regards diversity,
gender equality, and inclusion.
Ongoing tasks
The Committee focused
on the following:
• assessment of professional skills,
independence, engagement and
important external nominations
or appointments to the Board
of Directors;
• 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;
• performance assessment
• analysis of alignment between
the Company’s corporate culture
and its goals, values, and strategy;
• review of workforce composition
in companies within PhosAgro
Group as regards diversity, gender
equality, and inclusion;
• best practice guidance and analysis
following self-appraisal or third-
party appraisal of the Board
of Directors’ performance.
of the Company’s executive
bodies, other key employees,
and the Corporate Secretary;
• assessment of the incentive
system for the members
of executive bodies and other
key employees;
• succession planning for members
of the management bodies and
other key executives;
• 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;
Siroj Loikov
Chairman of the Remuneration
and Human Resources
Committee
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report STRATEGY AND SUSTAINABLE DEVELOPMENT COMMITTEE
GRI 2-16
The Strategy and Sustainable Development Committee (within this section,
the “Committee”) is governed by the Regulations on the Strategy and Sustainable
Development Committee.
For more information, please visit
the Company’s website.
Полный текст документа
«Положение о комитете по
стратегии и устойчивому
развитию ПАО «ФосАгро»
представлен на сайте Компании:
Committee members
as at 31 December 2023
Committee
member
Position
Alexander
Sharabaika
Committee chairman,
executive director
Victor Ivanov Committee member,
independent director
Andrey
Sharonov
Committee member,
independent director
The Committee’s statistics
Meetings,
including in person
Matters
2
4
14 25
Key highlights in 2023
As a successor to the Strategy
Committee since 2022, the Committee
focused on monitoring the progress
against the Strategy to 2025
approved in 2019. Following the Board
of Directors’ recommendations
issued upon approval, the Committee
regularly checks such actual
metrics as production volumes,
sales in priority markets, expansion
of sales and transport infrastructure
and ESG metrics, including those
set in the Climate and Water
strategies approved in 2020, against
the Strategy.
As the Board of Directors approved
the Climate Strategy in December
2020 and the low-carbon transition
plan was put into action, monitoring
of activities specified in these
documents remained an important
item on the Committee’s agenda.
The Committee took over from
the dissolved Sustainable
Development Committee
to monitor and regularly update
the action plan set to improve ESG
ratings. 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. Currently, the above action plan
considers not only ESG rating criteria,
but also the position of the Company’s
management bodies regarding the tools
to achieve strategic sustainability goals.
Sustainability reporting and disclosure
supervision were among key agenda
items as well. The Committee reviewed
matters related to stakeholder
engagement, identification of material
topics to be disclosed in the 2023
integrated Annual Report, and
the Report’s overall concept and
standards we relied on when preparing
it. Also, after analysing the quality
of disclosure and feedback on the 2022
integrated Annual Report, the Committee
praised the Company’s non-financial
disclosure practices.
‘22
‘23
‘22
‘23
276
277
Following proposals received from
the Board of Directors as part
of the external assessment,
the Committee invited other Board
members and relevant experts to discuss
such items as challenges and trends
in agriculture and allied industries,
report on the carbon farm project
in the Vologda region, and PhosAgro’s
innovations.
The Committee members also
remained focused on HSE compliance
by reviewing, among others, draft laws,
which are yet to be considered and
approved.
For the first time in its history,
the Committee reviewed the findings
of a comparative study focusing
on PhosAgro’s energy efficiency.
• assessment of environmental, social,
technological, climate, and industrial
risks associated with the Company’s
production activities;
• review of investigation records
on industrial accidents and incidents,
environmental law violations, and
breach of climate impact regulations;
• consideration of proposals
on improving working conditions,
complying with safety regulations,
reducing injury frequency rates,
greenhouse gas emissions, pollutant
discharges, waste generation and
disposal, and enhancing energy
efficiency;
• analysis of progress on programmes
and initiatives to introduce resource
and energy efficiency solutions and
climate protection technologies.
Ongoing tasks
The Committee focused
on the following:
• implementation status
of the Company’s Development
Strategy to 2025;
• creation and analysis of PhosAgro’s
framework for sustainable
development bylaws, control over
their drafting process, relevance,
effectiveness and quality;
• control over progress against
internal sustainability objectives;
• review of sustainability reporting
and supervision of disclosures
on the Company’s sustainability
activities;
• analysis of the Company’s practices
and bylaws in terms of compliance
with sustainable development rating
and competition requirements and
management of efforts to maintain
and improve the Company’s
standing in ratings/competitions;
• monitoring of compliance with
HSE laws and progress in reducing
negative climate impact from
the Company’s production
activities;
Alexander Sharabaika
Chairman of the Strategy
and Sustainable Development
Committee
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report EXECUTIVE
BODIES
INFORMATION ON MEMBERS OF THE MANAGEMENT BOARD
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 2023, the Management Board held
five meetings and reviewed eight
matters, most of which were related
to the budget discipline.
At least twice a year, at the end of six
months and full calendar year, the CEO
submits a report on the performance
of the Company’s executive bodies
to the Board of Directors for review
and approval. The report traditionally
includes highlights of the Company’s
production, sales, logistics, and
procurement operations, and data
on progress against key investment
and target projects. It also focuses
heavily on the executive team’s
environmental and occupational
safety performance, social support
for employees, and external social
investments.
For more information, see the Remuneration
Report section on page 280.
In May 2022, the number
of Management Board members
was approved at three. Since that
date and as at 31 December 2023,
members of the Management Board
are Mikhail Rybnikov, Alexei Sirotenko,
and Dmitry Morozov.
Breakdown and number of matters
considered
2
4
2
4
4
6
4
‘23
‘22
‘21
8
8
10
Revision and approval of PhosAgro’s
quarterly and annual budgets
Review of operating and financial reports
Approval of internal regulations
In the reporting year,
the Company delivered robust
environmental results, ticking
off nearly all relevant KPIs.
Significant progress was made
in the management of health and
safety issues. In addition to that,
PhosAgro continued to honour
all its social commitments
to develop the regions of operation,
keeping its support for social and
charitable projects unchanged from
the previous year’s record level.
The Board of Directors praised
the performance of executive
bodies and key executives for their
due consideration of ESG factors and
addressing sustainability issues.
The executive management
focuses on PhosAgro’s strategy
and long-term sustainable
business development
for the benefit of shareholders
and other stakeholders by linking
executive remuneration
to the Company’s goals, including
those in the realm of ESG.
278
279
Mikhail Rybnikov
Member of the Management Board,
Member of the Board of Directors
and CEO at PhosAgro
Year of election: 2022
Date of birth: 30 November 1975
For more information on Mikhail Rybnikov,
please see page 269.
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: 3 January 1969
Professional experience
2017 – Pr. – Apatit, Legal Affairs Director
2010 – Pr. – PhosAgro, Deputy CEO
for Corporate and Legal Affairs (part-time)
Key competencies
• Law and corporate governance
2017–2019 – Apatit, Member
of the Management Board
2013 – Pr. – PhosAgro, Member
of the Management Board
Education:
Lomonosov Moscow State University, Degree
in Jurisprudence, Lawyer
Dmitry Morozov
Member of the Management Board,
Advisor to the CEO of PhosAgro
Year of election: 2022
Equity interest / stake of ordinary
shares: none
Date of birth: 5 June 1964
Professional experience
2022 – Pr. – PhosAgro, Member
of the Management Board
2022 – Pr. – PhosAgro, Advisor to the CEO
(part-time)
2019–2022 – PhosAgro, Director
for Economic Affairs
Economic Relations, Economist
for International Economic Relations
2015–2019 – PhosAgro, Deputy Director
for Economic Affairs and Finance
Education:
Key competencies
• Strategy and innovation
• Economics, finance and audit
2019 – Pr. – Apatit, Director for Economic
Affairs
Moscow State Institute of International
Relations (Russia), Degree in International
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report REMUNERATION
REPORT
GRI 2-19, 2-20
BOARD OF DIRECTORS REMUNERATION
When deciding on the Board
composition, the General Meeting
of Shareholders approves the amount
and the rules for determining and
paying remuneration and compensation
to the Board members. 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. The existing amounts
and rules for determining and paying
remuneration and compensation
to the Board members were
approved by the General Meeting
of Shareholders on 24 March 2023.
Биография Родионова И. И.,
выбывшего из состава совета
директоров в марте 2023 года,
представлена в Интегрированном
годовом отчете ПАО «ФосАгро»
за 2022 год на сайте Компании:
The report on the voting results
of PhosAgro’s General Meeting
of Shareholders dated 28 March
2023 is available on the Company’s
official website.
Отчет об итогах голосования
на годовом общем собрании
акционеров ПАО «ФосАгро» от
28 марта 2023 года размещен на
официальном сайте Компании:
Board of Directors’ remuneration, RUB
Full name of the member of the Board of Directors:
2021
2022
2023
Sven Ombudstvedt
James Rogers
Marcus Rhodes
Xavier Rolet
Irina Bokova
Andrey Sharonov
Ivan Rodionov
Victor Cherepov
Victor Ivanov
Vladimir Trukhachev
Total
26,561,520.00
12,171,879.00
22,134,600.00
10,143,232.50
22,134,600.00
10,143,232.50
26,561,520.00
22,134,600.00
5,717,786.80
5,115,232.97
–
–
–
–
–
13,280,760.00
14,418,297.00
15,805,053.00
–
–
–
9,581,287.50
5,781,472.50
12,746,475.00
42,146,808.00
5,748,772.50
15,805,053.00
12,336,169.50
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.
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, which
aim to improve the efficiency
of investments and sales, control
costs, and reduce employee
injury rates for the Company and
its contractors.
Values of the CEO 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 of Directors. 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 2023
352
officers
of PhosAgro Group were benchmarked
against 1,968 KPIs
KPIs of N-1 level managers include indicators that help benchmark
the Company’s performance against industry peers:
132,807,600.00
85,786,195.77
91,874,556.00
1
2
Number of officers holding KPIs
by year:
REMUNERATION OF THE MANAGEMENT
REMUNERATION PRINCIPLES
The Company’s remuneration
policy for executive bodies 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.
the CEO for the reporting period,
as well as the Company’s achievement
of the EBITDA target.
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 KPIs and completeness
and quality of accomplishment
of additional tasks, as determined
by the Board of Directors and
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.
280
281
Change in spread between
average EV/EBITDA of public
phosphate fertilizer
manufacturers and PhosAgro’s
EV/EBITDA.
EV/EBITDA reflects investors’
estimate of the Company’s fair
market value and its investment
case. The goal is to increase
the spread;
Excess of PhosAgro’s ROIC – WACC
spread over the average ROIC –
WACC spread of public peers.
The indicator reflects how much
higher the 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 increase
the indicator.
‘23
‘22
‘21
‘20
‘19
352
307
280
277
106
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report EXTERNAL AUDITOR’S REMUNERATION
PhosAgro engaged independent
auditor JSC Technologies of Trust –
Audit to audit its IFRS consolidated
financial statements for 2022 and
2023. The actual remuneration paid
to the auditor for the audit of the IFRS
consolidated financial statements
of PJSC PhosAgro and the RAS
accounting statements of the entities
controlled by PJSC PhosAgro
amounted to RUB 24.9 mln for 2023
(vs RUB 22.4 mln1 for 2022), net of VAT
and overhead costs.
In addition to that, in 2023 JSC
Technologies of Trust – Audit
and its affiliated companies
performed review of the IFRS
consolidated financial statements
of PJSC PhosAgro and the entities
controlled by it and provided other
services for the total amount
of RUB 21.4 mln (vs RUB 21.4 mln
in 2022), net of VAT. All additional
services provided by the external
auditor were duly approved
by the Chairman of the Audit
Committee of PhosAgro’s Board
of Directors in line with the applicable
independence requirements.
The actual remuneration of JSC Unicon
to audit PhosAgro’s RAS financial
statements for 2023 was RUB 752,100
(vs RUB 683,700 in 2022), net of VAT.
Additionally, in 2023 JSC Unicon
provided tax consulting services
to PJSC PhosAgro and the entities
controlled by it for the total amount
of RUB 200,000 net of VAT.
1
In 2023, the Group changed its approach to disclosing the external auditor’s remuneration: remuneration paid to the auditor includes
remuneration for the audit of the IFRS consolidated financial statements of PJSC PhosAgro and the RAS accounting statements of the entities
controlled by PJSC PhosAgro. The remuneration for services other than auditing accounting statements includes remuneration for the review
of the IFRS consolidated financial statements of PJSC PhosAgro and other services that are not related to audit and are provided by the external
auditor to PJSC PhosAgro and the entities controlled by it. Comparable data have been restated to align indicators of the previous reporting
period with those of the current reporting period.
Top 3 KPI driven areas
As can be seen from the statistics,
PhosAgro Group is focused
on sustainable development,
and the KPI framework includes
the following indicators:
Commitment to sustainability —
42% of KPIs.
reduction of unit emissions
to the atmosphere;
Expansion of production
capacities through improved
operational efficiency —
34% of KPIs.
Development in high-potential
areas —
21% of KPIs.
share of waste recycling,
neutralisation, and processing;
implementation of key social projects;
% of completion of the programme
to improve social and working
conditions;
zero accidents;
zero occupational injuries among
the Company and contractor
employees.
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. 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.
REMUNERATION OF MEMBERS
OF EXECUTIVE BODIES
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.
No loans were extended to members
of the Board of Directors
or the Management Board as at 31
December 2023.
For information on total remuneration
paid to all members of the Company’s
executive bodies over the year
with a breakdown by type
of remuneration, see the issuer’s
report for the reporting year.
Сведения о суммарном
вознаграждении за год по всем
членам исполнительных органов
Общества с разбивкой по каждому
виду вознаграждения представлены
282
283
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report CORPORATE
CONTROLS
GRI 2-12
RISK MANAGEMENT AND INTERNAL CONTROL
ORGANISATIONAL STRUCTURE OF THE RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK
Audit committee
Board of Directors
Review Committee
Executive bodies
(Management Board and CEO)
Internal Audit
Department
Risk Management and Internal
Control Department
Other structural
departments
Administrative
reporting
Functional
reporting
284
285
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 sustainable development,
and ensure efficient operations,
protection of its assets, compliance
with applicable laws and internal
documents, 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, including setting
the overall risk appetite and reviewing
material risks and ways to manage
them.
The Board’s Audit Committee
focuses on assessing and making
proposals to improve the risk
management and internal controls.
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 Meeting
of Shareholders exercises control over
the financial and business operations
of the Company.
The Annual General Meeting
of Shareholders held in March 2023
elected the following members
to the Review Committee:
• Lusine Agabekyan, Deputy
Head of Group Financial Control
and Management Reporting
at PhosAgro;
• Ekaterina Viktorova, Deputy Head
of Treasury at PhosAgro;
• Olga Lizunova, head of unit
(functional in other areas),
budgeting office, Economics
Department at Apatit.
The Review Committee’s
goals, objectives and powers
are outlined in the Regulations
on Review Committee of PhosAgro
as approved by the General Meeting
of Shareholders on 12 May 2011.
The Committee endorsed PhosAgro’s
financial statements for 2023, with
its report dated 5 April 2024 included
in the materials for the shareholders
to prepare for the Annual General
Meeting of Shareholders.
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 effectiveness
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 executive bodies and the Board
of Directors.
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.
For the full text of PhosAgro’s
Regulations on Review Committee,
please visit our website
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report RISK MANAGEMENT
In 2023, 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.
THE DEVELOPMENT OF RISK
MANAGEMENT AND INTERNAL
CONTROL FRAMEWORK IN 2023
The Company is making a consistent
effort to develop its risk management
and internal control framework.
The Board of Directors reviewed
the results of the framework’s
INTERNAL AUDIT
PhosAgro’s Internal Audit Department
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.
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;
• development of corrective actions;
• follow-up control and review.
In 2023, the Company sustained
its focus on addressing risks across
certain business areas, including
the continuity of procurement,
logistics, and software and
IT infrastructure operation, in response
to geopolitical developments. We also
continued work to develop risk
management competencies among
managers at different levels, alongside
further implementation of a risk-
oriented approach within key functions
such as information security and
occupational health and safety.
PLANS FOR 2024
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 detailed information on key risks
and risk management, see the Strategic
Risks section on page 68
Internal audit goals, objectives and
powers are outlined in the Internal
Audit Policy as approved by the Board
of Directors on 18 May 2021.
The Company’s internal audit procedure
is set out in the Internal Audit Guidelines.
For the full text of the document, please
visit our website
Audits
‘23
‘22
‘21
Scheduled
Unscheduled
5
20
5
15
4
16
286
287
AUDIT OF BUSINESS PROCESSES
The audit plan along with the budget
of the Internal Audit Department
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 Company
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 2023, the Internal Audit Department
fully met the annual action plan. It carried
out audits that covered PhosAgro
Group’s business processes related
to personnel management, cash
management, and capital investments
as well as an IT audit of sales units
and an audit of ESG targets. Based
on the audit findings, recommendations
were developed to improve
the efficiency of personnel management
processes and approaches, and enhance
measures related to information security.
The management developed and
approved corrective action plans, with
the progress monitored by the Internal
Audit Department.
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;
In March 2024, the 11th
Internal Auditor of the Year
national competition named
PhosAgro’s Internal Audit
Department a winner
in the Internal Audit Service
of the Year category.
Plans for 2024 encompass audits
of various business processes,
including logistics management,
repairs, industrial safety, and
occupational health and safety,
as well as IT audits and audits
of insider information handling.
TEAM DEVELOPMENT
SELF-ASSESSMENT AND EXTERNAL
ASSESSMENT
Internal audit quality is assured
through regular external independent
assessments and self-assessment.
An external independent assessment
takes place once every three years.
The previous one was conducted
in late 2021 by PwC.
In order to achieve the strategic
goals in internal audit, we continue
working to develop and diversify
the competencies of our team
by holding regular training sessions,
which focus on sourcing data from
information systems and further
processing and visualising it. Training
initiatives addressing this focus area
are scheduled for 2024.
At the end of 2023, the Internal Audit
Department held a self-assessment
of its compliance with the International
Standards for the Professional
Practice of Internal Auditing and
the Institute of Internal Auditors’
Code of Ethics. The self-assessment
showed the Department’s full
compliance with all applicable
standards and requirements.
• the auditor’s independence
evaluated 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 PhosAgro’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 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;
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
INFORMATION SECURITY
GRI 3-3
The Information Security Policy
is the Company’s fundamental
document defining the general
provisions and principles for ensuring
information security. 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 internal
documents covering respective
issues. This set of documents reflects
modern solutions and best practices
in information security.
Ensuring information security
is the responsibility of each employee.
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 2023 and in previous periods that
could have caused tangible material
or reputational damage. Information
security issues are submitted
for consideration by the Board
of Directors every six months.
In 2023, the Company implemented
the following information initiatives
to enhance information security:
• increasing awareness of information
security: over 12,000 employees
completed courses and testing
on a corporate training platform
to enhance their knowledge
of information security;
• improving processes to comply
with legal requirements: a total
of 21 internal regulations were
issued, with measures taken
to ensure their implementation;
• enhancing protection
of an automated process control
system: information security
safeguards were implemented
on all significant components
of critical information infrastructure,
with dedicated training sessions
conducted for personnel
responsible for operating and
supporting the automated process
control system;
• automating processes for managing
security events and incidents,
implementing a security
information and event management
(SIEM) system and establishing
an operations centre;
• assessing the security
of the Group’s information
resources, developing plans
to enhance security safeguards;
• identifying and blocking
fraudulent IT resources linked
to the generation of fake
commercial offers on behalf
of the Group.
For the full text of the Information
Security Policy, please visit the
Company’s website.
GRI 410-1
All employees of the Economic
Security Department receive training
in terrorism prevention and the main
goals and principles of PhosAgro
Group Code of Ethics.
Security personnel who completed
human rights training, %
• improving processes for managing
access to information resources,
transitioning to automated control
of access rights;
‘23
‘22
‘21
100
100
100
• balance between the benefits
of long-term cooperation with
the auditor and the need for a fresh
look at PhosAgro’s 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 Meeting
of Shareholders. The Company
engaged JSC Technologies of Trust –
Audit (Ferro-Plaza Business Centre,
14/3 Krzhizhanovsky street, bldg. 5/1,
Moscow, Russia) to audit its 2023 IFRS
financial statements.
The Company’s 2023 RAS accounting
statements were audited by JSC
Unicon (8 Preobrazhenskaya
Ploshchad, Preo 8 Business Centre,
Moscow, Russia).
The 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 30 August 2023.
For the full text of the External Auditor
Selection and Cooperation Policy
of PhosAgro, please visit our website
For more information on the auditors,
their selection procedure and
independence evaluation, please
see the Company’s semi-annual
reports, as well as the respective
section of this Report that discusses
the Audit Committee’s activities and
the Remuneration Report
INSIDER INFORMATION
PhosAgro has adopted the Insider
Information Regulations compliant
with the Russian laws and the EU
Market Abuse Regulation (MAR).
In accordance with its provisions,
the Corporate Secretary Office keeps
a list of insiders, persons discharging
managerial responsibilities (PDMR)
and persons closely associated with
them (PCA). The Regulations define
the scope of responsibilities for each
insider group, which the Corporate
Secretary Office from time to time
communicates to respective persons.
First and foremost, these include
the limitations on the use
of insider 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 Office checks
the list of shareholders to identify
transactions that may have been
executed in breach of such limitations.
For 2024, the Internal Audit
Department has scheduled an audit
to evaluate the Company’s insider
information practices.
For the full text of the Insider
Information Regulations, please visit
our website
The list of insider information
is available on our website
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289
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
ETHICAL
PRACTICES
GRI 2-23, 2-24
VALUES, PRINCIPLES, STANDARDS AND NORMS OF BEHAVIOUR
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 the Company
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.
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 has
been 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. 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.
MANAGEMENT APPROACH
PhosAgro Group does its best
to eliminate violations of human
rights, corrupt practices, and other
instances of non-compliance with
corporate ethical principles, while
also enhancing and protecting
its business reputation as an honest,
open and bona fide company
among shareholders, potential
investors, partners, employees,
and counterparties. Elimination
of any possible occurrences
bearing the signs of the above,
and strengthening the commitment
of PhosAgro Group’s employees
to the highest ethical standards
are at the forefront of the Group’s
activities.
To ensure PhosAgro Group’s
observance of ethical practices
and generally recognised business
standards, the Company among
other things put in place an anti-
fraud and anti-corruption system
covering all areas of operation.
On top of that, Group companies
adopted a set of corporate, legal,
information and educational measures
to build a shared corporate culture
underpinned by high ethical standards
and maintain an atmosphere of trust,
mutual respect and integrity among
employees. All subsidiaries and
affiliates of PhosAgro and Apatit
approved anti-corruption standards.
PhosAgro runs activities as part
of an approved anti-corruption plan
until 2024.
ETHICAL STANDARDS AND NORMS
OF BEHAVIOUR
The principles and standards of ethical
behaviour when working at and with
PhosAgro are set out in relevant
policies and other internal documents
listed below. These are regulatory
documents all the Group’s managers,
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.
290
291
The following internal policies and procedures governing the compliance of the Company with the key
principles and standards of ethical conduct are currently in effect:
SASB EM-MM-510a.1, RT-CH-530a.1
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
Apatit’s Procurement Policy
The Policy defines the goals, key
principles, roles and employee
responsibilities in procurement
UK Modern Slavery Act Transparency
Statement
Regulations on Business Presents
and Representation Expenses
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 Company’s internal regulations
PhosAgro Hotline Regulations
The Regulations 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
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
Charity 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
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report ORGANISATIONAL AND INFORMATIONAL MECHANISMS
Reports received by PhosAgro Hotline by category
PhosAgro Group has a well-designed
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 relevant officers and units.
Tools to notify the relevant PhosAgro Group’s executives of any instances of misconduct and corrupt practices
GRI 2-25, 2-26
Tool
Obligation
Communication
Confidentiality and protection
Advice
PhosAgro Hotline
Description
Any Company employee, as well as any member of the Board of Directors, who has become
aware of any actual or potential violation of law or PhosAgro’s internal regulations is obliged
to give a prompt notice of the same in writing.
This also applies to any inducement to corruption or violations showing signs of corruption
committed with respect to other employees, counterparties or other parties interacting with
the Group.
The procedures for reporting and consideration of violation reports 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 Procedure for Informing Management of Apatit,
its Subsidiaries and Affiliates dated 15 January 2020.
A person who has submitted a notice/report is guaranteed confidentiality of the information
received, as well as such person’s personal data. PhosAgro takes steps to protect
the employee who has notified the employer’s representative (employer) of any actual
or potential violation of law and the Company’s internal regulations that may pose a threat
to the Group’s interests.
PhosAgro’s Code of Ethics formalises the right of each employee, if they have any questions
relating to anti-corruption compliance or any concerns as to the rightness of their
actions the actions of other employees, counterparties, or other parties interacting with
the Company, to seek advice or assistance from their immediate supervisors or, if need be,
the relevant business units of the Company.
The Hotline is in place to improve the efficiency of measures taken to prevent fraud,
corruption, theft, and conflict of interest, as well as to mitigate compliance and reputational
risks resulting from the 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;
• by e-mail help@phosagro.ru; and
• by regular mail at the following address: Economic Security Department, 75 Severnoye
Highway, Cherepovets, Vologda Region, 162622, Russia.
To ensure free access to the Company’s Hotline, all existing communication chanels
are posted on PhosAgro’s website.
PhosAgro Hotline
To improve the timeliness and
effectiveness of measures
aimed at preventing
ethical violations, including
corruption, discrimination,
human rights violations,
etc., the Company created
the PhosAgro Hotline portal.
Any employee or other
stakeholder can use
PhosAgro 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.
Number of reports
106
2
110
6
119
3
‘23
‘22
‘21
Total reports received
by PhosAgro hotline
Reports related to
corruption
‘23
‘22
‘21
106
110
119
35
25
15
1
2
23
2
3
0
37
27
20
9
6
5
4
2
0
53
25
16
16
3
3
3
0
Other (non-compliance with sanitary and epidemiological rules or
internal regulations)
Violations of law and tender procedures
Fraud in foreign and domestic markets
HSE
Non-compliance with the Code of Ethics
Workplace conditions
Theft
Foreign trading
Violations of human rights
Other (non-compliance with sanitary and epidemiological rules or
internal regulations)
Violations of law and tender procedures
Fraud in foreign and domestic markets
HSE
Non-compliance with the Code of Ethics
Workplace conditions
Theft
Confidential information
Violations of human rights
Other (non-compliance with sanitary and epidemiological rules or
internal regulations)
External fraud
Violations of law and tender procedures
HSE
Reputational risk
Internal fraud
Non-compliance with the Code of Ethics
Violations of human rights
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 the Group’s ethical standards.
The Chairman of the Audit Committee
provides this information to members
of PhosAgro’s Board of Directors.
In 2021–2023, there were no
employee reports or complaints
about violations of labour practices,
human rights, or discrimination.
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293
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report HUMAN
RIGHTS
PhosAgro’s Code of Ethics
recognises labour rights
as integral part of human
rights. In its operations,
PhosAgro respects labour
rights of employees as provided
by law, recognises the right
of employees to decent
remuneration, helps prevent
any form of discrimination and
forced labour, and supports
employee participation in key
matters pertaining to the Group’s
development.
The Company implements
personnel development
programmes that provide
for employee training and
personal growth and offer social
benefits, incentives, and leisure
and recreation opportunities.
PhosAgro is committed
to respecting employees’ 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.
294
295
PhosAgro encourages family
generations of employees and
corporate traditions that help retain
teams, improve labour discipline,
performance, and morale.
Any decisions regarding promotion,
hiring, remuneration, benefits
or compensations are based solely
on the employee’s qualifications,
performance, skills and experience
assessed impartially and fairly.
The Group supports professional and
personal growth of its employees.
The key goal here is to create
a talent pool of professionals with
strong knowledge of theory and
practical skills required to support
the operations of PhosAgro’s sites.
PhosAgro Group appreciates
and encourages diversity among
its employees. We provide equal
opportunities for them to unlock
their potential and do not tolerate
any restriction of a person’s
or a group’s natural rights and
freedoms or any conduct violating
privacy of our employees. Each
year, the Board of Directors and
the Remuneration and Human
Resources Committee reviews human
rights, focusing on staff diversity and
equality of genders.
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.
Since 2013, we have been conducting
annual employee surveys enabling
each employee to give feedback on
the performance of the Company and
its management.
Throughout the history of such
surveys, we have not received any
negative feedback or reports of
violations of human rights. This
clearly indicates that all obligations
to PhosAgro’s staff are respected and
met.
ANTI-CORRUPTION
GRI 3-3
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 the entire
range of its activities, and set up
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.
OPERATIONS ASSESSED FOR RISKS RELATED TO CORRUPTION
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, the Group has
defined lists of corruption-prone
functions and positions. PhosAgro
(order No. 39 dated 7 April 2022) and
its subsidiary Apatit (order No. 486-U
dated 10 December 2022) have lists
of positions for which filling of job
vacancies is exposed to corruption
risks. The share of employees
filling positions exposed to high
corruption risks is 0.3136%.
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. These standards are set
out in internal regulations.
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
Corruption risk analysis
Identification of corruption
offences that may be committed
by Group employees and
detection of business processes
(critical points) where such
misconduct is possible.
Identification of ways that can
be potentially used to commit
a corruption offence, depending
on the specifics of the 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.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report PhosAgro’s Board of Directors
receives regular reports
on the progress of anti-corruption
initiatives and the performance
of the anti-fraud and anti-corruption
system in accordance with PhosAgro’s
Risk Management and Internal Control
Policy. In addition, the process
of identifying risks and preventing
wrongdoings is monitored by line
managers on the basis of, among
other things, the Risk Management
Regulations. The corruption risk
is assessed by an independent unit –
the Risk Management Methodology
Department. For 2023, the corruption
risk was assessed as minimal.
INFORMING, ADVISING, AND TRAINING EMPLOYEES
GRI 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.
Target audience
Goals and objectives
• Provide employees 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
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
standalone business units
TRAINING
METHODOLOGY
Benefits of online training
Educational materials
(presentations, tests) accurately
reflect the potential issues
of corruption at PhosAgro Group
companies. The training process
does not disrupt core business
activities
Training results
Upon completion of the anti-
corruption training, an employee
shall have an understanding of:
• theory of counteracting
corruption in the Group;
• factors, causes, essence and
consequences of corruption;
• Russian anti-corruption laws
and regulations;
•
internal regulations and anti-
corruption standards approved
by the Group;
• responsibility for failure
to comply with anti-corruption
practices.
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297
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 responsibilities
of business units (employees) and
the established system of anti-
corruption standards.
COMPLETED TRAINING PROGRAMMES
Training period
Completed programmes
2021
2022
2023
• Principles of the PhosAgro Hot Line
• 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 underperforming students
• Main Goals and Principles of the PhosAgro Group Code of Ethics
• On Training and Testing of Employees of Apatit, its Branches and Companies
Managed by Apatit, in Preventing and Resolving Conflict of Interest
To implement anti-corruption
measures, PhosAgro’s Economic
Security Department drafts 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
to them. The Company’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 Company’s
anti-corruption practices. PhosAgro’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 Hot Line).
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.
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 Hot Line by watching
a respective video and putting their
signature in briefing log to confirm
the 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 the Group’s internal policies
on anti-corruption. Employees and
counterparties can inquire about
the Company’s anti-corruption
standards through PhosAgro’s
hotline portal, where they can obtain
professional legal assistance and
expert clarification.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Total number and share of members of the governance body, employees and business partners familiarised with
the Company’s Anti-Corruption Policy and procedures, by region
Total number
of members
of the governance
body
Share
of members
of the
governance
body, %
Region
Total number
of employees
Share of
employees, %
Total number
of business partners
Share
of business
partners, %
‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23 ‘21
‘22
‘23
‘21
‘22
‘23
‘21
‘22
‘23
Saratov region
177
283
307
28
33
98
609
852
961
59
67
99
Murmansk
region
427
888
861
31
34
79 2,564
2,621 2,671
61
66
86
89
95
104
98
100
100
100
71
85
100
100
100
Moscow region
74
87
91
32
39
71
82
225
215
45
61
78
903
898
852
100
100
100
Leningrad
region
172
266
260
31
35
84
502
770
751
58
65
90
504
487
410
100
100
100
Vologda region
478
943
946
32
28
96
2,767 33,346 3,415
81
72
97
181
167
170
100
100
100
Other
Total
132
32
408
68
1,208
1,401
1,386
100
100
100
1,328
2,599 2,465
30
32
88 6,524
8,222 8,013
62
68
92
2,980
3,128 3,001
100
100
100
Total number and share of members of the governance body and employees trained in anti-corruption measures,
by region
Region
Total number of members
of the governance body
Share of members
of the governance body, % Total number of employees
Share of employees, %
‘21
177
335
74
110
Saratov region
Murmansk
region
Moscow region
Leningrad
region
Vologda region
447
‘22
234
718
‘23
307
861
68
91
209
260
946
910
102
‘21
80
80
80
80
89
‘22
‘23
‘21
‘22
‘23
98
79
71
84
609
747
961
2,564
2,275
2,671
82
181
215
502
636
751
96
2,767
3,206
3,415
335
83
81
78
79
97
77
86
‘21
87
82
80
81
90
‘22
‘23
88
87
80
83
96
82
90
99
86
78
90
97
92
1,328
2,241
2,465
87
88
6,524
7,380
8,013
89
Other
Total
298
299
PHOSAGRO GROUP’S
PARTICIPATION IN COLLECTIVE
EFFORTS TO COMBAT CORRUPTION
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,
PhosAgro (certificate No. RP-15)
and Apatit (certificate No. RP-02)
have been included in the Register
of Parties to the Anti-Corruption
Charter of the Russian Business;
• 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;
• the Chamber of Commerce
and Industry of Russia (CCI).
The CCI membership implies
engaging in a dialogue between
the business community and
the government to forge the social,
economic, and industrial policy,
remove administrative hurdles,
improve the business and
investment climate, and promote
entrepreneurship. PhosAgro is set
to participate in annual “anti-
corruption dictation” as part
of the nationwide interactive
campaign held in furtherance
of the National Anti-Corruption Plan
for 2021–2024;
• The Russian Union of Industrialists
and Entrepreneurs, which
enables engagement with
political and administrative
bodies in the Company’s
regions of operation, focusing
on developing and executing
regional economic strategies.
As a member of the RSPP,
PhosAgro participates in the annual
Anti-Corruption Rating assessing
compliance with best business
conduct practices both in Russia
and globally. PhosAgro and Apatit
received A, the highest score,
in the 2023 ranking.
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.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report ACQUAINTING BUSINESS
PARTNERS WITH PHOSAGRO
GROUP’S ANTI-CORRUPTION
STANDARDS AND PROCEDURES
audit, measures to prevent conflicts
of interest and commercial bribery,
and compensation for material
damage.
SASB EM-MM-510a.1
PhosAgro 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
The Group is committed
to establishing and maintaining
business relationships with companies
that operate in line with high ethical
standards and combat corruption.
We have improved the registration
process at the electronic bidding
platform (PhosAgro’s official website –
Procurement – Tenders – Supplier
Registration Form). Every potential
supplier of goods or services wishing
to establish a business relationship
with PhosAgro Group is required
to examine the relevant internal
regulations, including the Company’s
Anti-Corruption Policy, Code of Ethics,
and Regulations on PhosAgro’s
Hotline. Access for further
registration on the electronic bidding
platform, a prerequisite for business
collaboration, is only granted after
that.
As a result, 100% of counterparties
wishing to engage in business
with the Company complete anti-
corruption training at the electronic
bidding platform.
Total number of business partners
registered at the electronic bidding
platform and acquainted with anti-
corruption standards
‘23
‘22
‘21
3,001
3,128
2,980
Share of business partners in this
category, %
‘23
‘22
‘21
100
100
100
INCIDENTS OF CORRUPTION IDENTIFIED AND ACTIONS TAKEN
GRI 205-1
In 2023, 36 internal investigations
were launched to identify failures
in complying with internal regulations.
Three of the completed investigations
were related to corruption and fraud
and had to do with:
• attempt by a contractor’s
executive to illegally transfer
RUB 300,000 to the head of section
of the Procurement Department
at Apatit in order to continue
contractual relationship;
• attempt of illegal receipt
of RUB 1,669,000 by the head
of section of the Procurement
Department at Apatit in exchange
for exercising their official powers
for the benefit of a contractor;
• attempt of illegal receipt of over
RUB 3 mln by the head of sector
of the OHS Department at Apatit
in exchange for exercising their
official powers.
Following internal investigations,
the Company dismissed one
employee.
Internal investigations into
reported corrupt behaviour
Number of internal investigations
into various failures to comply with
internal regulations
‘23
‘22
‘21
Including corruption-related
violations
‘23
‘22
‘21
36
35
52
3
4
3
Confirmed incidents of corruption and actions taken
GRI 205-3
Corruption cases
Total number of confirmed incidents of corruption
Total number of confirmed incidents in which employees were dismissed or disciplined for corruption
Total number of confirmed incidents when contracts with business partners were terminated or not
renewed due to violations related to corruption
Public legal cases2 regarding corruption brought against the organisation or its employees
2021
2022
2023
2
2
11
1
4
3
2
2
5
1
1
3
In 2023, five corruption-related
criminal cases were initiated:
1. on 20 April 2023, a criminal case
was opened under Article 204,
Part 3 of the Russian Criminal
Code (“commercial bribery”)
against the head of a section
of the Procurement Department
at Apatit who illegally received
RUB 100,000 from a counterparty’s
executive;
2. on 20 April 2023, a criminal case
was opened under Article 204,
Part 3 of the Russian Criminal
Code (“commercial bribery”)
against the head of a section
of the Procurement Department
at Apatit who received RUB 200,000
from a counterparty’s executive;
3. on 15 May 2023, a criminal case
was opened under Article 204,
Part 8 of the Russian Criminal
Code (“commercial bribery”)
against the head of a section
of the Procurement Department
at Apatit who received
RUB 1,669,000 from a counterparty;
4. on 24 March 2023, two criminal
cases were opened under Article
204.1, Parts 2 and 1 of the Russian
Criminal Code (“commercial
bribery”) for intermediation
in money transfers to the deputy
head of the ecology and
environmental management
at Apatit’s Volkhov branch.
PhosAgro Group’s
commitment to the anti-
corruption standards
is evidenced by the fact
that it cooperates with law
enforcement authorities:
1
PhosAgro made a public
commitment to report
to the relevant law
enforcement authorities
any cases of corruption
(signs of corruption)
the Group (its employees)
may 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
300
301
1 The Company updated the 2021 data: in 2021, the Company disqualified one business partner who wanted to participate in bidding procedures
worth over RUB 400 mln on the grounds that it was not considered trustworthy because of its failure to comply with anti-corruption standards.
2 All corruption-related cases are included in the official statistics of law enforcement agencies.
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report CONFLICTS 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.
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
As part of the efforts to develop
a framework for preventing,
identifying and resolving
conflicts of interest, three
designated collegial advisory
bodies were established:
they are offered employment with
the Company and regularly from then
onwards.
The Company regularly conducts
anti-corruption review of its internal
regulations, including orders,
directives, contracts, standards, etc.
to detect and remedy factors that may
lead to anti-corruption law breaches
or pose risks to its interests.
Following CEO Order No. 621-U
dated 8 December 2023, the Risk
Management and Internal Control
Department, an independent body,
performs annual internal control
exercises to ensure adherence
to corruption prevention procedures
and frameworks. The assessment
of Apatit’s anti-corruption efforts
confirmed alignment with the Anti-
Corruption Charter of the Russian
Business.
The Company did not identify
any conflicts of interest related
to membership in the Board
of Directors; joint ownership with
suppliers and other stakeholders;
controlling shareholders; related
parties and their relations,
transactions and outstanding
balances.
• Commission on Conflict
of Interest between Employees
of PhosAgro chaired by the CEO
• Commission on Fraud, Corruption
and Conflicts of Interest at Apatit
(to streamline anti-corruption
efforts across the Company’s
production units)
• Commission on Fraud, Corruption
and Conflicts of Interest
at PhosAgro-Region (to act
for the downstream business)
In 2023, out of ten potential
conflict of interest scenarios
identified and examined, six
were scrutinised by Apatit’s
Commission on Fraud,
Corruption and Conflicts
of Interest, which offered
resolution recommendations.
A notice requiring preventive
action was issued to the relevant
business unit’s management
team. In five of the reviewed
cases, conflict of interest proved
to be unsubstantiated.
Identification, prevention and settlement of conflicts of interest in the actions of PhosAgro Group’s employees
Conflict of interest cases
2021
2022
2023
Total number of conflict of interest cases pertaining to joint ownership with suppliers
and other stakeholders
Total number of conflict of interest cases pertaining to controlling shareholders
Total number of conflict of interest cases pertaining to related parties and their relations,
transactions and outstanding balances
Total number of conflict of interest cases pertaining to membership in the Board
of Directors
Total number of potential conflict of interest cases
Number of conflict of interest cases considered at the meeting of the Commission
on Fraud, Corruption and Conflicts of Interest
1
0
0
0
10
5
0
0
0
0
15
9
0
0
0
0
10
6
LEGAL ACTIONS FOR ANTI-COMPETITIVE BEHAVIOR, ANTI-TRUST, AND MONOPOLY PRACTICES
GRI 3-3, 206-1
The Company has approved 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. There are no pending
lawsuits filed on charges of breach
of applicable antitrust laws,
or any similar lawsuits settled
in 2021–2023 to which the Company
could be identified as a party.
The respective documents are available
in the Our Products section
of the Company’s official website
302
303
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report SHARE
CAPITAL
IN OCTOBER 2023, PHOSAGRO APPROVED A DIVIDEND PAYMENT
PROCEDURE FOR ITS SHAREHOLDERS AND GDR HOLDERS
WHOSE TITLES ARE RECORDED IN FOREIGN DEPOSITORIES. THIS
ELIMINATED BARRIERS TO RECEIVING THE DIVIDENDS BY HOLDERS
OF THE COMPANY’S SECURITIES WHO HAD PREVIOUSLY BEEN
UNABLE TO OBTAIN PAYMENTS FROM THEIR DEPOSITORIES.
PHOSAGRO IS COMMITTED TO ENSURING FULL PAYMENT OF
DIVIDENDS DUE TO ALL CATEGORIES OF ITS SHAREHOLDERS.
4
Ownership
structure
4
Share
performance
6
Debt
management
7
Analyst
coverage
7
Dividend
policy
10
Relationship
with shareholders
and investors
13
Information
disclosure
304
305
COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICES SHARE
CAPITAL
OWNERSHIP STRUCTURE
The authorised capital of PhosAgro
as at 31 December 2023 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 Joint-Stock
Company Reestr, whose details are set
out on the Company’s website.
For more information on Reestr,
please visit the Company’s website
SHARE PERFORMANCE
PhosAgro’s shares are traded
on the A1 quotation list of the Moscow
Exchange under the ticker symbol
PHOR (ISIN: RU000A0JRKT8),
CFI code: ESVXFR.
Global depositary receipts (GDR;
three GDRs represent one share)
are admitted to listing on the London
Tickers
Stock exchange
Moscow Exchange
London Stock Exchange
Stock Exchange under the ticker symbol
PHOR. On 3 March 2022, trading
in the Company’s GDRs was suspended.
Citigroup Global Markets
Deutschland AG acts as the depositary
for the Company’s GDR programme.
Shares of PhosAgro are included
in the following indices of the Moscow
Exchange:
• MOEX Russia;
• RTS.
Bloomberg
PHOR RU
PHOR LI
Reuters
ISIN
PHOR.MM
RU000A0JRKT8
PHORq.L
US71922G3083
US71922G4073
Codes for Global Depositary Receipts
Under Regulation S
Under Regulation S
Under Rule 144A
CUSIP
ISIN
Common code
SEDOL
RIC
306
307
71922G308
71922G407
71922G100
US71922G3083
US71922G4073
US71922G1004
065008939
065008939
065008939
0B62QPJ1
PHOSq.L
0B62QPJ1
0B5N6Z48
PHOSq.L
GBB5N6Z48.L
10,000
Share performance on MOEX in 2023
8,000
6,000
4,000
2,000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Share performance
Item
As at 30 December 2021 As at 30 December 2022
As at 29 December 2023
Weighted average trading price of a share
on the Moscow Exchange, RUB
5,857.00
6,390.00
6,592.00
GDR price on the London Stock Exchange1, USD
21.58
–
–
Market capitalisation, RUB mln
758,611.00
827,505.00
853,664.00
THE KEY FACTORS AFFECTING THE COMPANY’S SHARE PERFORMANCE IN 2023
Strong demand for phosphate
and nitrogen-based fertilizers
over the year
Reduction in key feedstock prices
over the year
Lower fertilizer prices
at the beginning of the year and
their recovery in the second half
of the year
Higher fiscal pressure on industry
players following introduction
of export duties and payment
of the excess profit tax
Strong operational and financial
performance of the Company and
regular dividend payments
Low fertilizer stocks
in the Company’s key sales markets
Greater availability of fertilizers
to farmers
Official market capitalisation data
is published on the Moscow Exchange’s
website
For more information on our historical
share performance, please visit
the Company’s website
1 Trading in PhosAgro’s GDRs on the London Stock Exchange was suspended starting 3 March 2022.
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report
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 the range of 1–1.5х
in the long run. As at 31 December
2023, the Company’s leverage
was comfortable, with the net debt/
EBITDA ratio standing at 1.2x.
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 availability of currencies and
the structure of the Company’s revenue,
about 70% of which was in foreign
currency in 2023.
its investment case, the investment
budget shall not exceed 50%
of planned EBITDA.
The record high capital investments
and charitable expenses in 2023 did
not affect the Company’s leverage,
which remained comfortably below
the net debt/EBITDA target.
When determining its borrowing
requirements, the Company assesses
the cost of borrowing from banks and
In line with the investment policy
designed to meet PhosAgro’s
investor obligations and strengthen
EUROBONDS
ISIN
Borrower
Issuer
Currency
Offering date
Maturity date
Issue value, USD mln
Including replacement bonds,
USD mln
308
309
XS2099039542
PJSC PhosAgro
XS2384719402
PJSC PhosAgro
PhosAgro Bond Funding Limited
PhosAgro Bond Funding Limited
USD
23 January 2020
23 January 2025
500
RU000A106G31
356.915
USD
16 September 2021
16 September 2028
500
RU000A106G56
383.470
RUB-DENOMINATED EXCHANGE BONDS
CNY-DENOMINATED EXCHANGE BONDS
ISIN
Issuer
Currency
Offering date
Maturity date
RU000A106516
ISIN
PJSC PhosAgro
Issuer
RUB
Currency
21 April 2023
Offering date
17 April 2026
Maturity date
Issue value, RUB mln
20,000
Issue value, CNY mln
RU000A1063Z5
PJSC PhosAgro
CNY
13 April 2023
9 April 2026
2,000
ANALYST COVERAGE
PhosAgro is covered by analysts from leading Russian and international brokers.
Company
ATON
Alfa Bank
BCS Global Markets
Sberbank CIB
Sinara Financial Corporation
Veles Capital
My Investments
Finam
Renaissance Capital
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 by the General
Meeting of Shareholders, based
on recommendations provided
by PhosAgro’s Board of Directors.
Analyst
Andrey Lobazov
Boris Krasnojenov
Kirill Chuyko
Georgiy Ivanin
Dmitriy Smolin
Elsa Gazizova
-
Tel.
+7 (495) 213-03-37
+7 (495) 795-36-12
+7 (495) 213-15-26
+7 (495) 665-56-00
+7 (916) 555-79-97
+7 (495) 258-19-88, ext. 599
-
Alexey Kalachev
+7 (495) 796-93-88, ext. 2357
When preparing recommendations
for the General Meeting
of Shareholders on any dividend
payout (declaration), in addition
to the current financial standing
assessment, the Board of Directors
takes into account the relevant
provisions of PhosAgro’s dividend
policy whereby the amount
of distributed dividends may range
from 50 to over 75% (subject
to PhosAgro’s leverage ratio)
of PhosAgro’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 adjusted net
profit for the year under IFRS.
In light of the above-mentioned drain
on liquidity and in accordance with
PhosAgro’s dividend policy, a decision
was taken not to include the issue
of profit distribution for 2023 on the
agenda for the Board of Directors
meeting where the Company’s
annual financial statements are to
be discussed. This issue is expected
to be included on the agenda for
the Board of Directors meeting that
will discuss the Company’s 1Q 2024
performance. .
The full text of the Company’s Dividend
Policy is available on the Company’s
website
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report Report on dividends declared and paid
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2021
Retained earnings as at 31 March 2021
105
Retained earnings as at 30 June 2021
156
Retained earnings as at 30 September
2021
234
35
52
78
Retained earnings as at 31 December
2021 (based on 2021 results)2
390 (no
resolution
passed)
130 (no
resolution
passed)
2022
Retained earnings as at 30 June 2022
780
9M 2022
FY 2022
2023
1Q 2023
318
465
216
Retained earnings as at 30 June 2022
48
1H 20233
9M 2023
126 (no
resolution
passed)
291
Extraordinary General Meeting of Shareholders
Annual General Meeting of Shareholders
260
106
155
72
16
42
97
22 June 2021
No later than 6 July 2021/
9 August 2021
13 September 2021 No later than 8 October
2021/29 October 2021
8 December 2021
No later than 21 December
2021/1 February 2022
30 June 2022
No later than 25 July
2022/15 August 2022
21 September
2022
No later than 17 October
2022/8 November 2022
8 December 2022
No later than 9 January
2023/30 January 2023
24 March 2023
No later than 18 April
2023/12 May 2023
30 June 2023
30 June 2023
No later than 25 July
2023/15 August 2023
No later than 25 July
2023/15 August 2023
30 September
2023
No later than 25 October
2023/16 November 2023
14 December 2023 No later than 16 January
2024/6 February 2024
1 For 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 The General Meeting of Shareholders did not approve profit distribution for FY 2021, including payment of dividends.
3 The General Meeting of Shareholders did not approve profit distribution for 1H 2023, including payment of dividends.
310
311
Results of the vote held
by the Annual General
Meeting of Shareholders
on the distribution
of profits (including
payout (declaration)
of dividends) and losses
of the Company
Annual General Meeting
of Shareholders
of 30 June 2022
For
38,088,321
Against
56,540,778
Abstained
0
Annual General Meeting
of Shareholders of 24 March 2023
For
94,790,985
Against
0
Abstained
0
For more information
on the Company’s dividend
payment history, please visit
the Company’s website
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report
RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS
WHY WE INTERACT
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.
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 conference calls.
For more information on our dividend
history, please visit the Company’s
website
OUR STRONG ENGAGEMENT PROGRAMME ENABLES US:
In 2023, the Company continued
to stay in touch with retail
investors by holding conference
calls with assistance of major
Russian brokers and taking part
in a number of conferences
for retail investors (including
SmartLab conferences).
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
312
313
Four main purposes for which
PhosAgro interacts with the
invesmtent community:
Each building on each other
Facilitating an ongoing exchange
of information
Ensuring greater business
transparency
HOW WE INTERACT
The Company interacts with
the investment community
in a variety of ways
1
2
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
3
4
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
Monitor the progress against
the Company’s development
strategy and present
its results to the public
Roadshows
Work with rating agencies
Virtual non-deal roadshows covering
general topics for broader investor
audiences and deal roadshows
relating to Eurobond offerings and ESG
disclosures, etc.
One-on-one calls
One-on-one calls with investors
Meetings of Shareholders
Annual General Meetings of
Shareholders and formal reporting
Interaction with credit and ESG rating
agencies
Press releases
Regulatory press releases
Online conferences
Online investor conferences
Corporate website
Corporate website of the Company
Work with members of the analyst
Work with investors
Selective communication with
members of the analyst community to
raise their awareness of the Company’s
operations
A dedicated in-house investor relations
team
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report KEY TOPICS AND OUTCOMES IN 2023
Cooperation
Proactive approach
In 2023, closer contacts
of the Company with
shareholders, debt investors
and analysts (primarily
in the form of online meetings)
were of critical importance
due to the impact of external
challenges.
For more information
on our initiatives and their
accompanying pres-
entations, please visit
the Company’s website
Information
disclosure
118 publications
were made in line with
Russian disclosure regulations
via the Interfax Corporate
Disclosure Centre
Bond issue
PhosAgro’s proactive
approach to communication
with debt market players
guaranteed successful
replacement of two
Eurobond issues worth more
than
USD 740 mln
The Company offered two
exchange bond issues
on the Moscow Exchange for
RUB 20 bln
and CNY 2 bln
PhosAgro’s official disclosure page
on the Interfax portal
The Company’s page on the official
LSE website
Disclosure on the Company’s
official website
In 2023, the Company
exercised its right to disclose
and/or provide only some
of the information that must
be disclosed and/or provided
under federal laws On Joint-
Stock Companies and
On the Securities Market,
guided by Russian Government
Resolution No. 1102 dated 4 July
2023 On Details of Disclosure
and/or Provision of Information
that Must be Disclosed and/
or Provided under Federal Law
On Joint-Stock Companies,
and by the Federal Law
On the Securities Market.
INFORMATION DISCLOSURE
In its declarations and disclosures,
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 on the LSE webpage.
FINANCIAL CALENDAR FOR 2024
Financial results disclosure
IV / 2023
4Q and FY 2023
26 April 2024
I / 2024
1Q 2024
27 May 2024 (TBD)
II / 2024
2Q and 6M 2024
29 August 2024 (TBD)
III / 2024
3Q and 9M 2024
11 November 2024 (TBD)
314
315
2023COMPANY PROFILESTRATEGIC REPORT PERFORMANCE REVIEWCORPORATE GOVERNANCESHARE CAPITALAPPENDICESIntegrated Report
APPENDICES
The consolidated
financial statements
318
Independent limited
assurance report
357
GRI
content index
362
Sustainable development
indicators content
index as per the Order
of the Ministry of Economic
Development of Russia
384
SASB
content index
388
TCFD
Recommendations
390
Glossary
391
Contacts
393
316
317
APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILE THE CONSOLIDATED
FINANCIAL STATEMENTS
Joint-Stock Company
“Technologies of Trust – Audit”
(“Technologies of Trust – Audit” JSC)
Joint-Stock Company
“Technologies of Trust – Audit”
(“Technologies of Trust – Audit” JSC)
www.tedo.ru
Ferro-Plaza Business Centre,
14/3 Krzhizhanovsky street, bldg. 5/1,
Akademichesky municipal district,
Moscow, Russian Federation, 117218
Ferro-Plaza Business Centre,
14/3 Krzhizhanovsky street, bldg. 5/1,
Akademichesky municipal district,
Moscow, Russian Federation, 117218
T: +7 495 967 60 00
www.tedo.ru
www.tedo.ru
www.tedo.ru
T: +7 495 967 60 00
Key audit matter
How our audit addressed the key audit matter
Independent Auditor’s Report
Independent Auditor’s Report
To the Shareholders and Board of Directors of Public Joint Stock Company “PhosAgro”:
To the Shareholders and Board of Directors of Public Joint Stock Company “PhosAgro”:
Qualified opinion
In our opinion, except for the effects of the matter described in the Basis for qualified opinion section of our report,
the consolidated financial statements present fairly, in all material respects, the consolidated financial position of
Qualified opinion
Public Joint Stock Company “PhosAgro” (PJSC “PhosAgro”) and its subsidiaries (together – the “Group”) as at
In our opinion, except for the effects of the matter described in the Basis for qualified opinion section of our report,
31 December 2023, and the Group’s consolidated financial performance and consolidated cash flows for the year
the consolidated financial statements present fairly, in all material respects, the consolidated financial position of
then ended in accordance with IFRS Accounting Standards.
Public Joint Stock Company “PhosAgro” (PJSC “PhosAgro”) and its subsidiaries (together – the “Group”) as at
What we have audited
31 December 2023, and the Group’s consolidated financial performance and consolidated cash flows for the year
then ended in accordance with IFRS Accounting Standards.
The Group’s consolidated financial statements comprise:
the consolidated statement of profit or loss and other comprehensive income for 2023;
What we have audited
•
The Group’s consolidated financial statements comprise:
•
•
•
•
•
•
•
•
the consolidated statement of financial position as at 31 December 2023;
the consolidated statement of profit or loss and other comprehensive income for 2023;
the consolidated statement of cash flows for 2023;
the consolidated statement of financial position as at 31 December 2023;
the consolidated statement of changes in equity for 2023; and
the consolidated statement of cash flows for 2023;
the notes to the consolidated financial statements, which include material accounting policy information and
other explanatory information.
the consolidated statement of changes in equity for 2023; and
•
Basis for qualified opinion
the notes to the consolidated financial statements, which include material accounting policy information and
other explanatory information.
The Group’s management did not disclose segment information for the year ended 31 December 2023 and for the
year ended 31 December 2022 in the notes to the consolidated financial statements as required by IFRS 8,
Basis for qualified opinion
Operating Segments. Disclosing the omitted segment information within this Basis for qualified opinion section is
The Group’s management did not disclose segment information for the year ended 31 December 2023 and for the
not practicable as it would be unduly voluminous in relation to this auditor’s report.
year ended 31 December 2022 in the notes to the consolidated financial statements as required by IFRS 8,
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
Operating Segments. Disclosing the omitted segment information within this Basis for qualified opinion section is
those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
not practicable as it would be unduly voluminous in relation to this auditor’s report.
statements section of our report.
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
qualified opinion.
statements section of our report.
Independence
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
qualified opinion.
We are independent of the Group in accordance with International Code of Ethics for Professional Accountants
(including International Independence Standards) issued by the International Ethics Standards Board for
Independence
Accountants (IESBA Code) and the ethical requirements of the Auditor’s Professional Ethics Code and Auditor’s
We are independent of the Group in accordance with International Code of Ethics for Professional Accountants
Independence Rules that are relevant to our audit of the consolidated financial statements in the Russian
(including International Independence Standards) issued by the International Ethics Standards Board for
Federation. We have fulfilled our other ethical responsibilities in accordance with these requirements and the
Accountants (IESBA Code) and the ethical requirements of the Auditor’s Professional Ethics Code and Auditor’s
IESBA Code.
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
Key audit matters
IESBA Code.
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
Key audit matters
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
separate opinion on these matters. In addition to the matter described in the Basis for qualified opinion section, we
consolidated financial statements of the current period. These matters were addressed in the context of our audit of
have determined the matters described below to be the key audit matters to be communicated in our report.
the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. In addition to the matter described in the Basis for qualified opinion section, we
have determined the matters described below to be the key audit matters to be communicated in our report.
318
319
Recoverability of deferred tax assets
Key audit matter
Refer to Note 15 to the consolidated financial
statements of the Group
Recoverability of deferred tax assets
In the consolidated statement of financial
Refer to Note 15 to the consolidated financial
position as at 31 December 2023, the Group
statements of the Group
recognised deferred tax assets in the amount of
RUB 9,751 million in respect of the Group
In the consolidated statement of financial
companies’ accumulated tax loss carried
position as at 31 December 2023, the Group
forward.
recognised deferred tax assets in the amount of
RUB 9,751 million in respect of the Group
Under IAS 12, Income Taxes, a deferred tax
companies’ accumulated tax loss carried
asset in respect of unused tax losses shall be
forward.
recognised to the extent that it is probable that
future taxable profit will be available against
Under IAS 12, Income Taxes, a deferred tax
which the unused tax losses can be utilised.
asset in respect of unused tax losses shall be
recognised to the extent that it is probable that
The Group’s management analysed probability
future taxable profit will be available against
of receiving future taxable profits by Group
which the unused tax losses can be utilised.
companies and concluded that the deferred tax
assets are recoverable. This analysis was
The Group’s management analysed probability
based on management’s plans in respect of
of receiving future taxable profits by Group
recoverability of the Group’s deferred tax assets
companies and concluded that the deferred tax
and projections of the future taxable profit.
assets are recoverable. This analysis was
based on management’s plans in respect of
We focus our audit on the existence of sufficient
recoverability of the Group’s deferred tax assets
evidence that the Group’s deferred tax assets are
and projections of the future taxable profit.
recoverable because the Group’s management
applied significant judgements and estimates in
We focus our audit on the existence of sufficient
respect of available mechanisms for recovery of
evidence that the Group’s deferred tax assets are
deferred tax assets in the Group companies with
recoverable because the Group’s management
accumulated loss, and in respect of the amount of
applied significant judgements and estimates in
the future taxable profit and timing when it would
respect of available mechanisms for recovery of
be available.
deferred tax assets in the Group companies with
accumulated loss, and in respect of the amount of
the future taxable profit and timing when it would
be available.
How our audit addressed the key audit matter
We performed the following audit procedures to address the
key audit matter:
• We analysed the management’s plan in respect of
We performed the following audit procedures to address the
key audit matter:
utilisation of the deferred tax assets and the process of
projecting the future taxable profit.
• We analysed the management’s plan in respect of
• We assessed the current status of implementation of the
utilisation of the deferred tax assets and the process of
management’s plan to utilise the deferred tax assets.
projecting the future taxable profit.
• We received the projection of the future taxable profit
• We assessed the current status of implementation of the
prepared by the Group’s management and reviewed, on
management’s plan to utilise the deferred tax assets.
a sample basis, the assumptions related to future
• We received the projection of the future taxable profit
income and expenses reflected in the projection,
prepared by the Group’s management and reviewed, on
including their comparison to the industry and market
a sample basis, the assumptions related to future
trends. We also assessed the quality of the Group’s
income and expenses reflected in the projection,
management projections by comparing the previous
including their comparison to the industry and market
periods projections to actual results.
trends. We also assessed the quality of the Group’s
• We assessed, on a sample basis, the mathematical
management projections by comparing the previous
accuracy of calculations applied by the Group’s
periods projections to actual results.
management.
• We assessed, on a sample basis, the mathematical
• We assessed whether the management used
accuracy of calculations applied by the Group’s
reasonable judgements related to applying the
management.
mechanisms available to the Group to recover the
• We assessed whether the management used
deferred tax assets, among other things, by engaging
reasonable judgements related to applying the
our taxation experts.
mechanisms available to the Group to recover the
• We obtained and analysed written representations of
deferred tax assets, among other things, by engaging
the Group’s management in relation to their assessment
our taxation experts.
of recoverability of deferred tax assets.
the Group’s management in relation to their assessment
of recoverability of deferred tax assets.
• We obtained and analysed written representations of
Acceptability of the management’s current estimates in
relation to the deferred tax assets recoverability for the
purpose of the consolidated financial statements of the Group
Acceptability of the management’s current estimates in
for 2023 does not guarantee that future events which are
relation to the deferred tax assets recoverability for the
inherently uncertain will not lead to a significant change in
purpose of the consolidated financial statements of the Group
these estimates.
for 2023 does not guarantee that future events which are
We also assessed a compliance of the information disclosed
inherently uncertain will not lead to a significant change in
in Note 15 to the consolidated financial statements with the
these estimates.
IFRS Accounting Standards disclosure requirements.
We also assessed a compliance of the information disclosed
in Note 15 to the consolidated financial statements with the
IFRS Accounting Standards disclosure requirements.
Other matter – Materiality and Group audit scope
Other matter – Materiality and Group audit scope
Materiality
Overall Group materiality: Russian Roubles (“RUB”) 5,730 million, which represents
5% of profit before tax.
Overview
Overview
Group scoping
Materiality
Group scoping
We conducted audit procedures on the entire financial information of the
three components.
•
Overall Group materiality: Russian Roubles (“RUB”) 5,730 million, which represents
5% of profit before tax.
•
•
Our audit scope addressed 99.6% of the Group’s revenues and 97.6% of the
We conducted audit procedures on the entire financial information of the
Group’s absolute value of underlying profit before tax.
three components.
•
Our audit scope addressed 99.6% of the Group’s revenues and 97.6% of the
Group’s absolute value of underlying profit before tax.
2
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2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
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www.tedo.ru
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 significant 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 5,730 million (2022: RUB 11,615 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.
We selected components based on the assessment of risk of material misstatement of the Group’s consolidated
financial statements associated with components, taking into account a relative significance of the components for
the Group. The Group auditor performed further audit procedures for the selected components on their entire
financial information not engaging the component auditors. We also included information systems and tax
specialists in our engagement team.
By performing the above audit procedures at the components, combined with the centralized audit procedures and
audit procedures with respect to the process of preparation of the consolidated financial statements, we have
obtained sufficient and appropriate audit evidence regarding the consolidated financial statements of the Group as
a whole.
Other information
Management is responsible for the other information. The other information comprises the Integrated annual report
of PJSC “PhosAgro” for 2023 (but does not include the consolidated financial statements and our auditor’s report
thereon), which we obtained prior to the date of this auditor’s report, and the Securities issuer’s report for the 12
months 2023, which is 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 information and we do not and will
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above 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.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to report that
fact. We have nothing to report in this regard.
When we read the Securities issuer’s report for the 12 months 2023, 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 financial statements in
accordance with IFRS Accounting Standards, 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 level of assurance, but is not a guarantee that an audit conducted in
accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
•
•
•
•
•
•
identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control;
obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control;
evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by 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;
plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the group as a basis for forming an opinion on the group
financial statements. We are responsible for the direction, supervision and review of the audit work
performed for purposes of the group audit. We remain solely responsible for our audit opinion.
320
321
3
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2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
www.tedo.ru
PJSC "PhosAgro"
Consolidated Statement of Profit or Loss and Other Comprehensive Income for 2023
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 Fegetsin Alexey
Iakovlevich.
26 April 2024
Moscow, Russian Federation
Fegetsin Alexey Iakovlevich is authorised to sign on behalf of the General Director of Joint-Stock Company
“Technologies of Trust – Audit” (Principal Registration Number of the Record in the Register of Auditors and Audit
Organizations (PRNR) – 12006020338), certified auditor (PRNR – 21906101957)
Note
5
6
7
8
9
27 (c)
10
10
16
27 (c)
11
22
25
RUB million
Revenues
Cost of Group products sold
Cost of products for resale
Gross profit
Administrative and selling expenses
Taxes, other than income tax
Other expenses, net
Foreign exchange gain/(loss) from operating activities, net
Operating profit
Finance income
Finance costs
Gain from revaluation of investments in equity instruments measured
at fair value through profit or loss
Foreign exchange (loss)/gain from financing activities, net
Profit before tax
Income tax expense
Profit for the year
Attributable to:
Shareholders of the Company
Non-controlling interests*
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
Foreign currency translation difference reclassified to profit or loss
upon loss of control over foreign subsidiaries
Actuarial losses reclassified to profit or loss upon loss of control over
foreign subsidiaries
Other comprehensive loss for the year
Total comprehensive income for the year
Attributable to:
Shareholders of the Company
Non-controlling interests*
2023
2022
440,304
(235,560)
(16,056)
569,527
(253,419)
(15,599)
188,688
(32,282)
(12,779)
(7,557)
14,686
150,756
3,353
(7,881)
1,025
(32,650)
114,603
(28,462)
300,509
(42,403)
(11,327)
(9,371)
(9,068)
228,340
4,439
(11,967)
11,485
232,297
(47,583)
86,141
184,714
86,084
57
665
(35)
184,662
52
1,426
(276)
(2,929)
(6,302)
61
(35)
(9,446)
86,106
175,268
86,049
57
175,216
52
*Non-controlling interests are the minority shareholders of the subsidiaries of PJSC "PhosAgro"
The consolidated financial statements were approved on 26 April 2024:
Chief executive officer
M. K. Rybnikov
Deputy CEO for Finance and International Projects
A. F. Sharabaiko
flt
322
323
5
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 set out on pages 5 to 33.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report PJSC “PhosAgro”
Consolidated Statement of Financial Position as at 31 December 2023
PJSC “PhosAgro”
Consolidated Statement of Cash Flows for 2023
RUB million
Assets
Property, plant and equipment
Advances issued for property, plant and equipment
Deferred tax assets
Other non-current assets
Non-current spare parts
Right-of-use assets
Intangible assets
Catalysts
Investments in associates and joint ventures
Non-current assets
Trade and other receivables
Inventories
Cash and cash equivalents
VAT and other taxes receivable
Security payment for windfall tax
Other financial assets
Income tax receivable
Current assets
Total assets
Equity
Share capital
Share premium
Retained earnings
Actuarial losses
Equity attributable to shareholders of the Company
Equity attributable to non-controlling interests
Total equity
Liabilities
Loans and borrowings
Deferred tax liabilities
Lease liabilities
Defined benefit obligations
Non-current liabilities
Loans and borrowings
Dividends payable
Trade and other payables
Windfall tax payable
VAT and other taxes payable
Lease liabilities
Income tax payable
Current liabilities
Total equity and liabilities
Note
31 December
2023
31 December
2022
12
15
16
13
14
19
18
20
1(b)
17
21
23
15
24
25
23
26
1(b)
24
308,663
10,337
9,751
8,262
8,059
7,240
2,773
2,667
636
274,522
9,270
7,903
8,546
5,125
4,277
2,099
1,965
592
358,388
314,299
66,362
48,468
29,163
10,119
6,355
5,083
1,703
75,741
39,349
13,356
12,565
-
210
93
167,253
141,314
525,641
455,613
372
7,494
144,658
(1,003)
151,521
84
372
7,494
190,664
(968)
197,562
158
151,605
197,720
161,710
13,603
2,818
1,129
109,784
17,820
1,660
1,050
179,260
130,314
86,429
54,919
42,653
6,355
2,799
1,413
208
80,974
82
39,412
-
5,632
1,276
203
194,776
127,579
525,641
455,613
RUB million
Note
2023
2022
Cash flows from operating activities
Operating profit
Adjustments for:
Depreciation and amortisation
Loss on disposal of property, plant and equipment and intangible assets
6, 7
9
Operating profit before changes in working capital
Decrease in trade and other receivables1
Increase in inventories, catalysts and non-current spare parts
Decrease in trade and other payables1
Cash flows from operations before income tax and interest paid
Income tax paid
Finance costs paid
Windfall tax security payment
1 (b)
150,756
228,340
32,282
365
183,403
6,063
(11,624)
(46)
177,796
(29,777)
(7,378)
(6,355)
29,539
429
258,308
7,498
(12,308)
(3,131)
250,367
(41,811)
(5,275)
-
Cash flows from operating activities
134,286
203,281
Cash flows from investing activities
Finance income
Acquisition of property, plant and equipment and intangible assets
Borrowing cost capitalised paid
Advances issued for right-of-use assets
Cash and cash equivalents disposed as a result of loss of control over
foreign subsidiaries
Loans issued
Proceeds from disposal of financial assets measured at fair value through
profit or loss
Other
Cash flows used in investing activities
Cash flows from financing activities
Proceeds from borrowings, net of transaction costs
Repayment of borrowings
Refund of dividends paid2
Dividends paid to shareholders of the Company
Lease payments
Dividends paid to non-controlling interests
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
12
17
23
23
21
24
2,000
(64,232)
(1,896)
(94)
-
-
-
144
3,783
(63,021)
(976)
(850)
(36,729)
(3,130)
1,778
159
(64,078)
(98,986)
172,906
(155,306)
17,256
(94,509)
(1,416)
(131)
57,171
(23,926)
9
(142,120)
(1,429)
-
(61,200)
(110,295)
9,008
13,356
6,799
(6,000)
21,710
(2,354)
Cash and cash equivalents at 31 December
20
29,163
13,356
1 Changes in trade and other receivables and changes in trade and other payables include effect of foreign exchange
differences from operating activities.
2 The Group received cash refund from depositories paid as dividends to parties who were entitled to receive them, but
didn’t receive dividends due to reasons beyond the depositories’ control.
324
325
The consolidated statement of financial position is to be read in conjunction with the notes to, and forming part of, the
consolidated financial statements set out on pages 5 to 33.
The consolidated statement of cash flows is to be read in conjunction with the notes to, and forming part of, the
consolidated financial statements set out on pages 5 to 33.
2
3
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
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4
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
1
BACKGROUND
(a) Organisation structure and operations
PJSC “PhosAgro” (the “Company” or the “Parent”) is a public joint stock company registered in accordance
with Russian legislation. PJSC “PhosAgro” and its subsidiaries (together referred to as the “Group”)
comprise Russian legal entities. The Company was registered in October 2001. The Company’s address
is Leninsky prospekt 55/1 building 1, Moscow, Russian Federation, 119333.
The Group’s principal activity is production of apatite concentrate and mineral fertilisers at plants located
in the cities of Kirovsk (Murmansk region), Cherepovets (Vologda region), Balakovo (Saratov region) and
Volkhov (Leningrad region), and their distribution across the Russian Federation and abroad.
As at 31 December 2023 and at 31 December 2022, the Company’s major shareholder is the entity
registered in Russia – ILLC Adorabella holding approximately 23.3% of the ordinary shares. As of
31 December 2023, and 31 December 2022, the Parent does not have the ultimate controlling party in
accordance with the definitions of control described in IFRS 10 Consolidated financial statements.
(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 29). The Russian economy continues to be negatively impacted by ongoing political
tension in the region and international sanctions against certain Russian companies and individuals.
Geopolitical tension caused by the Ukrainian case in February 2022 continued in 2023. Geopolitical
situation escalation resulted in significant exchange rates fluctuations and increased volatility in financial
and commodity markets. Sanctions and restrictions have been and continue to be imposed towards a
number of Russian entities such as access termination to European and USA financial markets, SWIFT
international system and others. Price cap on Russian oil and gas and embargo on Russian petrochemicals
were introduced. There is no way to determine how long the increased volatility will continue and when the
above factors will stabilise. The future effects of current economic situation and the above measures are
difficult to predict. Management’s current expectations and estimates could differ from actual results.
The Russian Government Resolution that came into effect starting from 2023 introduced export duties on
mineral fertilisers followed by the subsequent changes to the customs duty calculation method and rates:
1)
2)
3)
From 1 January to 31 August 2023, the rate stood at 23.5% and was applied to a difference between
the customs value of exported products and USD 450 per tonne.
From 1 September to 30 September 2023, the customs duty rate for nitrogen-based fertilisers
was 7% of their customs value, but not less than RUB 1,100 per tonne; the rate for phosphate-based
and compound fertilisers stood at 7% of their customs value, but not less than RUB 2,100 per tonne.
From 1 October 2023 to 31 December 2024, the following customs duty rates depending on the
official exchange rate of US dollar to Russian Rouble set by the Central Bank of Russia are applied:
−
−
fertilisers – 7% of
on nitrogen-based
than
RUB 1,100 per tonne, if the average US dollar exchange rate over the monitoring month is
below RUB 80, or 10% of their customs value, but not less than RUB 1,100 per tonne, if the
average US dollar exchange rate over the monitoring month is above RUB 80;
their customs value, but not
less
on phosphate-based and compound fertilisers – 7% of their customs value, but not less than
RUB 2,100 per tonne, if the average US dollar exchange rate over the monitoring month is
below RUB 80, or 10% of their customs value, but not less than RUB 2,100 per tonne, if the
average US dollar exchange rate over the monitoring month is above RUB 80.
On 4 August 2023, the President of the Russian Federation signed Federal Law No. 414-FZ On Excess
Profits Tax (the so-called “Windfall Tax”) effective from 1 January 2024. The law introduces 10% tax rate
applied to the excess of the arithmetic average profits for 2021-2022 over the arithmetic average profits
for 2018-2019. The amount of tax can be reduced by half to the effective rate of 5% provided that the
taxpayer pays a security payment to the federal budget from 1 October to 30 November 2023. The Group's
windfall tax liability and expense calculated at 5% tax rate is RUB 6,355 million. In November 2023, the
Group made a security payment for the windfall tax presented as a separate line item in the consolidated
statement of cash flows.
Management of the Group has considered events and conditions that could give rise to material
uncertainties and concluded that the range of possible outcomes does not cast significant doubt over
the Group’s ability to continue as a going concern.
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2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
2
BASIS OF PREPARATION
(a)
Statement of compliance
These consolidated financial statements have been prepared in accordance with IFRS Accounting
Standards as issued by the International Accounting Standards Board.
The Group additionally prepares IFRS Accounting Standards consolidated financial statements in the
Russian language in accordance with the Federal Law No. 208-FZ On consolidated financial reporting.
(b) Basis of measurement
The consolidated financial statements are prepared on the historical cost basis, except for financial
instruments initially recognised at fair value with subsequent revaluation through profit or loss.
(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. In March 2022, the Group lost control over its 100% foreign
subsidiary Phosint Limited (currently PUREFERT LIMITED) owning all the foreign companies of the Group.
Until the loss of control, the Group included entities with US dollar, Euro and other currencies as a
functional currency.
(d) Presentation currency
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.
In 2022, until the loss of control over Phosint Limited, profit and loss items of foreign subsidiaries were
translated from USD and EUR into RUB at the following average exchange rates for the appropriate month:
Average exchange rate for the month
RUB to USD 1
RUB to EUR 1
2022
January
February
March
(e) Use of estimates and judgments
75.8837
77.4048
104.0810
85.9393
87.7638
114.7127
The preparation of consolidated financial statements in conformity with IFRS Accounting Standards
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 (b) (iii) – estimated useful lives of property, plant and equipment;
Note 15 - recognition of deferred tax assets: availability of future taxable income for offsetting with
appropriate tax losses.
(f)
Adoption of new and revised standards and interpretations
The following revised standards, issued by the International Accounting Standards Board (IASB) and
approved for use on the territory of Russian Federation, became effective from January 1, 2023, but didn’t
have a material impact on the Group unless otherwise specified.
•
•
IFRS 17 Insurance Contracts (issued on 18 May 2017 and effective for annual periods beginning on
or after 1 January 2021, the effective date subsequently modified to 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).
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
2
•
•
•
BASIS OF PREPARATION (CONTINUED)
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). The Group
revised its approach to significant accounting policies disclosure in accordance with amendments to
the requirements as set out in note 3.
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).
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).
The following amendments, issued by the International Accounting Standards Board (IASB), were not
approved for application in Russian Federation and didn’t have a material impact on the Group:
International Tax Reform – Pillar Two Model Rules – Narrow-scope amendments to IAS 12 (issued on
23 May 2023 and effective for annual periods beginning on or after 1 January 2023).
(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 2024 and which the Group has not early adopted, but is in process of
assessing the impact on the Group’s consolidated financial statements.
•
•
•
•
•
•
•
•
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, the effective date
subsequently modified to 1 January 2024).
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, the
effective date subsequently modified to 1 January 2024).
Lease Liability in a Sale and Leaseback Amendments to IFRS 16 – Amendments to IFRS 16 (issued
on 22 September 2022 and effective for annual periods beginning on or after 1 January 2024).
Non-current Liabilities with Covenants – Amendments to IAS 1 (issued on 31 October 2022 and
effective for annual periods beginning on or after 1 January 2024).
Supplier Finance Arrangements – amendments to IAS 7 and IFRS 7 (issued on 25 May 2023 and
effective for annual periods beginning on or after 1 January 2024).
Lack of exchangeability – Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates
(issued on 15 August 2023 and effective for annual periods beginning on or after 1 January 2025).
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 18 Presentation and Disclosure in Financial Statements (issued on 9 April 2024 and effective
for annual periods beginning on or after 1 January 2027).
3
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these
consolidated financial statements.
(a)
Foreign currencies
Foreign exchange gains and losses that relate to loans and borrowings as well as cash and cash
equivalents are presented in the consolidated statement of profit or loss and other comprehensive income
within the line item “Foreign exchange loss/gain from financing activities, net”. All other foreign exchange
gains and losses are presented in the consolidated statement of profit or loss and other comprehensive
income within the line item “Foreign exchange gain/loss from operating activities, net”.
328
329
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2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Property, plant and equipment
(i)
Initial recognition
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 Accounting Standards
(January 1, 2005) 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.
(ii)
Subsequent expenditure
Expenses related to current repairs and maintenance of property, plant and equipment are recognised
within profit or loss and other comprehensive income as incurred.
The Group recognises expenses related to current repairs and maintenance of property, plant and
equipment incurred less than once per 12 months with the cost of more than RUB 100 thousand as assets,
and depreciates these assets on a straight-line basis until the next repair.
Expenses related to the replacement of major spare parts and renewal of property, plant and equipment
are capitalised and depreciated in the ordinary course.
(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 depreciated.
Tangible fixed assets are depreciated over the following useful lives:
Buildings
Plant and equipment
Fixtures and fittings
10 to 60 years;
5 to 35 years;
2 to 25 years.
(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 capitalised 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 capitalised are presented as part of cash flows from investing activities in the consolidated
statement of cash flows.
(v) Advances issued for property, plant and equipment
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.
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
Financial instruments
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt securities, trade and other
receivables, long-term accounts receivables, cash and cash equivalents, 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's financial assets measured at amortised cost include trade and other receivables (excluding
receivables measured at fair value under provisionally priced sales agreements), long-term receivables,
cash and cash equivalents, and loans issued.
The Group's financial assets measured at fair value through profit or loss include receivables under
provisional pricing agreements and investments in equity instruments.
The Group's financial liabilities measured at amortised cost include loans and borrowings, lease liabilities,
trade and other payables, dividends payable.
(d) 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.
(e)
Inventories
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.
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.
Spare parts to be used for construction and in repairs capitalised are classified as non-current assets and
are included in line item “Non-current spare parts”.
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.
(f)
Impairment
Financial assets
The Group recognises loss allowances for expected credit losses (ECLs) on financial assets measured at
amortised cost. The Group estimates loss allowances either based on ECLs that result from default events
possible within 12 months after the reporting date or based on lifetime ECLs that result from all possible
default events over the expected life of a financial instrument.
The Group estimates loss allowance for trade receivables using the simplified approach in the amount
equal to the lifetime ECL of the financial instrument. To calculate expected credit losses, the Group
segments counterparties based on their geographic location and considers their credit rating, adjusted for
current and future factors specific to the debtors, historical credit loss experience and economic
environment in which they operate.
330
331
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2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Group estimates loss allowances for other financial assets either based on ECLs that result from default
events possible within 12 months after the reporting date or until contract maturity, if shorter, until there has
been a significant increase in credit risk since the initial recognition of the asset. In assessing ECL and
credit risk, the Group considers quantitative and qualitative information and performs an analysis that is
based on the Group's actual credit loss experience and considers forward-looking information. A significant
increase in credit risk is presumed if a debtor is more than 30 days past due.
If credit risk has increased significantly since the initial recognition or there is evidence that a financial asset
is impaired, the expected credit losses for that asset are measured based on the lifetime ECLs. If the fair
value of an impaired financial asset subsequently increases and such increase can be objectively attributed
to an event occurring after the impairment loss was recognised in profit or loss for the period, the amount
written off as a loss is reversed and the reversed amount is recognised in profit or loss for the period.
(g)
Leases
As a lessee
The Group determines its incremental borrowing rate by obtaining interest rates from various external
financing sources and making certain adjustments to reflect the terms of the lease and type of the asset
leased.
Lease payments included in the measurement of the lease liability comprise fixed payments.
The Group separates lease cash flows into principal lease payments (financing activities) and interest lease
payments (operating activities) in the consolidated statement of cash flows.
Lease liability is measured at amortised cost using the effective interest method. It is revalued when there
is a change in future lease payments 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.
(h) Employee benefits
(i)
Defined benefit plans
The Group’s net obligation in respect of defined benefit post-employment plans, including pension plans,
is calculated separately for each plan by estimating the amount of future benefit that employees have
earned in return for their service in the current and prior periods. That benefit is discounted to determine its
present value, and the fair value of any plan assets, 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 consolidated statement of profit or loss and
other comprehensive income. To the extent the benefits vest immediately, the expense is recognised
immediately in the consolidated statement of profit or loss and other comprehensive income.
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.
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(iii) Defined contribution plans
The Group makes mandatory contributions to the Social Fund of Russian Federation (until January 1, 2023
– Russia’s State pension fund). These amounts are written off as expenses in the period when the Group's
employees provided services related to these accruals.
(i)
Income tax
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 measured at the tax rates that are expected to be applied to the temporary differences when
they reverse, based on the laws in force or put into force by the reporting date.
Deferred tax assets and liabilities are offset if they relate to income taxes levied by the same tax authority
on the same taxable entity.
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.
(j) Windfall tax
Windfall tax is within the scope of IAS 12 Income taxes, it is recognised as a current income tax and is
subject to respective income tax accounting policy.
Windfall tax is a one-off tax. Windfall tax liability and expenses are recognised in the consolidated financial
statements starting from the moment when the Federal Law has been substantively enacted.
Windfall tax liability and expenses are measured at the amount calculated using the tax rates considering
security payment made.
In the consolidated statement of financial position, the security payment was reflected together with the
with the windfall tax liability until the entity had a legally enforceable right of offset, which would arise from
1 January 2024.
(k) Revenues
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.
The selling price for goods or services can be fixed or provisionally priced, with subsequent determination
of the final price within the period established by the contract (provisionally priced contracts). Revenue
under such contracts is initially recognised at a predetermined price. Accounts receivable under
provisionally priced contracts are measured at fair value through profit or loss with appropriate adjustments
recorded in revenue until the final price is determined.
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 certain contracts for the supply of goods 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.
Group`s revenue include the proceeds from transportation services. Costs related to rendering of
transportation services are mainly represented by logistics costs and included in cost of Group products
sold.
332
333
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2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
3
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l)
Export customs duties
Starting from January 1, 2023, customs duties were introduced on export revenue of mineral fertilisers
(note 1), which are considered by the Group as an additional fee and are recognised as logistics expenses
as part of the cost of products sold.
(m) Taxes, other than income tax
The Group presents taxes, other than income taxes in a separate line item in the consolidated statement
of profit or loss and other comprehensive income “Taxes other than income taxes” (note 8). The Group
does not classify these expenses according to their function in the line items of cost of sales, administrative
and selling expenses. According to the Group’s management opinion the presentation in a separate line
item in the consolidated statement of profit or loss and other comprehensive income, transparently and fully
presents information about taxes, other than income tax impact on the financial results of the Group.
(n)
Finance income and finance costs
Finance income comprises interest income, dividend income, 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 accrues in profit or loss. 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,
interest expense on defined benefit obligations, securitisation fees, increase in credit loss for financial
investments, share of loss of associates and foreign exchange losses on financing activities.
Foreign currency gains and losses, arising from operations with foreign currency and share of profit and
losses of associates are reported on a net basis.
(o) Overburden removal expenditure
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.
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 recognised in the
profit or loss as incurred.
4
FAIR VALUE DETERMINATION
When measuring a fair value of an asset or a liability, the Group uses market observable data
as far as possible. Fair values are categorised into different levels of a fair value hierarchy based
on the inputs used in the valuation techniques as follows:
•
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included in Level 1 that are observable, either directly
(i.e. as prices) or indirectly (i.e. derived from prices);
Level 3: inputs for the asset and liability that are not based on observable market data (unobservable
inputs).
If inputs used to measure a fair value of an asset or a liability might be categorised into different levels
of fair value hierarchy, then fair value measurement is categorised in its entirety in the same level of the fair
value hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period
during which the change has occurred.
Fair values have been determined for measurement and / or disclosure purposes based on the methods
described below. When applicable, further information about the assumptions made in determining fair
values is disclosed in the notes specific to that asset or liability.
334
335
12
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
4
FAIR VALUE DETERMINATION (CONTINUED)
(a)
Financial assets and liabilities measured at amortised cost
The fair value of financial assets and liabilities represented by short-term loans issued, trade and other
receivables (except for receivables measured at fair value under provisional pricing agreements), cash and
cash equivalents, trade and other payables is categorised into level 3 of fair value hierarchy and
approximate their carrying amounts at the reporting date.
Bonds’ fair value is measured based on quoted market prices for disclosure purposes and categorised into
level 1 of the fair value hierarchy. Loans and borrowings and non-current receivables fair value is
categorised into level 3 of the fair value hierarchy.
(b)
Financial instruments measured at fair value
The fair value of investments measured at fair value through profit or loss and receivables under
provisionally priced sales agreements measured at fair value through profit or loss is determined using the
valuation techniques and categorised into level 3 of the fair value hierarchy.
Investments value measured at fair value through profit or loss is estimated based on the model of
discounted cash flows from the investee's operating activities.
Receivables fair value under provisionally priced sales agreements is calculated based on mineral fertiliser
market prices expected at the date when the price is finalised. These assumptions are based on consensus
prices forecasts prepared by independent analytical agencies, adjusted in accordance with price calculation
formulas specified in existing delivery contracts.
5
REVENUES
RUB million
Phosphate-based and nitrogen-based products
Other
Revenues
6
COST OF GROUP PRODUCTS SOLD
RUB million
Production expense for Group goods sold
Depreciation
Salaries and social contributions
Potash
Materials and services
Repair and maintenance expenses
Natural gas
Transportation of phosphate rock
Ammonia
Sulphur and sulphuric acid
Electricity
Fuel
Feedstock processing services
Anti-clodding agent
Drilling and blasting operations expenses
Reagents
Ammonium sulphate
Logistics expenses for Group goods sold
Russian Railways infrastructure tariff and operators’ fees
Customs duties
Freight, port and stevedoring expenses
Other services and materials
Cost of Group products sold
2023
421,690
18,614
2022
551,037
18,490
440,304
569,527
2023
2022
(197,783)
(222,360)
(29,374)
(26,265)
(22,444)
(22,158)
(15,865)
(15,033)
(13,468)
(11,533)
(11,507)
(7,317)
(5,754)
(4,341)
(3,785)
(3,101)
(3,020)
(2,818)
(26,979)
(19,667)
(27,418)
(19,997)
(12,002)
(14,226)
(11,610)
(19,550)
(40,798)
(6,754)
(6,459)
-
(4,597)
(3,217)
(2,755)
(6,331)
(37,777)
(31,059)
(14,047)
(13,207)
(9,924)
(599)
(12,647)
(1,420)
(16,382)
(610)
(235,560)
(253,419)
13
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
7
ADMINISTRATIVE AND SELLING EXPENSES
RUB million
Administrative expenses:
Salaries and social contributions
Professional services
Depreciation and amortisation
Security and fire safety services
Office equipment and stationery
Representative and travel expenses
Repair and maintenance services
Utilities
Advertising and brand promotion
Other services
Selling expenses:
Salaries and social contributions
Depreciation and amortisation
Advertising and brand promotion
Repair and maintenance services
Other services
2023
2022
(27,185)
(37,328)
(18,684)
(2,197)
(1,561)
(1,539)
(866)
(831)
(362)
(281)
(206)
(658)
(5,097)
(2,476)
(1,347)
(458)
(322)
(494)
(29,015)
(2,386)
(1,387)
(1,222)
(784)
(553)
(303)
(240)
(226)
(1,212)
(5,075)
(2,885)
(1,173)
(252)
(324)
(441)
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
10
FINANCE INCOME AND FINANCE COSTS
RUB million
Interest income
Unwinding of discount (note 16)
Other finance income
Finance income
Interest expense on borrowings (note 23)
Interest expense on lease liabilities (note 24)
Bank fees
Interest expense on defined benefit obligations
Credit loss allowance on loans issued (note 17)
Discount on extension of payment terms (note 16)
Loss from revaluation of financial instruments
Securitization fees
Increase in credit loss allowance on financial assets
Other finance costs
2023
1,967
1,308
78
3,353
(7,179)
(284)
(171)
(103)
-
-
-
-
-
(144)
2022
3,818
519
102
4,439
(4,223)
(244)
(258)
(56)
(4,124)
(2,777)
(55)
(47)
(14)
(169)
Finance costs
(7,881)
(11,967)
Administrative and selling expenses
(32,282)
(42,403)
11
INCOME TAX EXPENSE
8
TAXES, OTHER THAN INCOME TAX
RUB million
Mineral extraction tax
Property tax
Environment pollution payment
VAT included in expenses
Land tax
Using water objects payment
Other taxes
Taxes, other than income tax
2023
(10,026)
(2,030)
(225)
(206)
(184)
(67)
(41)
2022
(8,707)
(1,890)
(207)
(162)
(226)
(58)
(77)
(12,779)
(11,327)
9
OTHER EXPENSES, NET
RUB million
Social expenditures
Loss on disposal of property, plant and equipment and intangible assets
Accrual of contingent liabilities
Increase in credit loss allowance
Gain on disposal of inventories
Fines, penalties and compensations received
Decrease in allowance for inventory write-down
Other income, net
Other expenses, net
2023
(7,720)
(365)
(108)
(76)
485
173
6
48
(7,557)
2022
(9,314)
(429)
(32)
(539)
276
288
120
259
(9,371)
14
336
337
The Company’s applicable corporate income tax rate is 20% (2022: 20%).
RUB million
Current tax expense
Windfall tax expense
Deferred income tax - origination and reversal of temporary differences,
including change in unrecognised tax assets
Income tax expense
2023
(28,172)
(6,355)
2022
(41,465)
-
6,065
(6,118)
(28,462)
(47,583)
In November 2023, the Group made windfall tax security payment in the amount of RUB 6,355 million.
Accordingly, the windfall tax rate was amounted to 5%.
Reconciliation of income tax:
RUB million
Profit before tax
Income tax at applicable tax rate
Windfall tax
Tax effect of items which are not deductible or assessable for taxation purposes
Tax effect from concessionary tax rate
Tax effect on foreign exchange differences on receivables recognised from
disposal of Phosint Group
Tax effect on receivables recognised from disposal of Phosint Group
Tax effect on provision for loans issued
Effect of tax rates in foreign jurisdictions
2023
114,603
2022
232,297
(22,921)
(46,459)
(6,355)
(1,818)
2,157
475
-
-
-
-
(2,072)
3,289
(295)
(1,647)
(517)
118
Income tax expense
(28,462)
(47,583)
15
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
12
PROPERTY, PLANT AND EQUIPMENT
RUB million
Land and
buildings
Plant and
equipment
Fixtures
and fittings
Construction
in progress
Total
Gross book value at 1 January 2022
116,400
203,800
20,737
43,494
384,431
Additions
Transfers
Disposals
Disposal of foreign subsidiaries
Other transfers
3,312
20,246
(1,071)
(1,129)
62
14,193
26,198
(6,602)
(2,891)
138
3,125
-
(358)
(101)
11
47,160
(46,444)
(209)
-
-
67,790
-
(8,240)
(4,121)
211
Gross book value at 31 December 2022
137,820
234,836
23,414
44,001
440,071
Additions
Transfers
Disposals
4,693
6,102
(1,924)
11,657
19,577
(6,236)
3,235
-
(451)
47,392
(25,679)
(123)
66,977
-
(8,734)
Gross book value at 31 December 2023
146,691
259,834
26,198
65,591
498,314
Accumulated depreciation
at 1 January 2022
Depreciation
Disposals
Disposal of foreign subsidiaries
Other transfers
Accumulated depreciation
at 31 December 2022
Depreciation
Disposals
Accumulated depreciation
at 31 December 2023
(30,609)
(103,410)
(12,968)
(7,416)
973
357
(13)
(18,528)
6,270
1,241
59
(1,886)
305
85
(9)
(36,708)
(114,368)
(14,473)
(8,572)
1,889
(21,512)
5,844
(2,191)
440
-
-
-
-
-
-
-
-
(146,987)
(27,830)
7,548
1,683
37
(165,549)
(32,275)
8,173
(43,391)
(130,036)
(16,224)
-
(189,651)
Net book value at 1 January 2022
85,791
100,390
Net book value at 31 December 2022
101,112
120,468
Net book value at 31 December 2023
103,300
129,798
7,769
8,941
9,974
43,494
237,444
44,001
274,522
65,591
308,663
During the year ended 31 December 2023, the Group capitalised borrowing costs in the amount of
RUB 1,896 million (2022: RUB 976 million) in the value of property, plant and equipment using the weighted
average interest rate of 4.43% per year (2022: 2.55% per year).
As at 31 December 2023, the most significant construction in progress balances were represented by the
following investment projects:
•
•
•
Kirovsk branch of Apatit, JSC: Kirovsk mine extension and modernization. As at 31 December 2023,
(as at 31 December 2022:
the Group capitalised expenses of RUB 18,674 million
RUB 13,458 million);
Kirovsk branch of Apatit, JSC: Rasvumchorrskiy mine extension and modernization. As at
31 December 2023, the Group capitalised expenses of RUB 6,903 million (as at 31 December 2022:
RUB 4,821 million);
Kirovsk branch of Apatit, JSC: apatit-nepheline beneficiation plants extension and modernization.
As at 31 December 2023, the Group capitalised expenses of RUB 3,835 million (as at 31 December
2022: RUB 4,575 million);
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
12
PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
•
•
•
•
Balakovo branch of Apatit, JSC: sulphuric acid
As at 31 December 2023,
capitalised
(as at 31 December 2022: RUB 2,184 million);
the Group
facilities extension and modernization.
5,605 million
of RUB
expenses
Balakovo branch of Apatit, JSC: granulated ammonium sulphate facilities construction. As at
31 December 2023, the Group capitalised expenses of RUB 2,315 million (as at 31 December 2022:
RUB 2,616 million);
Apatit, JSC, Cherepovets: ammonia production facilities support and modernization. As at
31 December 2023, the Group capitalised expenses of RUB 3,198 million (as at 31 December 2022:
RUB 1,724 million);
Volkhov branch of Apatit, JSC: construction of auxiliary facilities for the production of
monoammonium phosphate. As at 31 December 2023, the Group capitalised expenses of
RUB 754 million (as at 31 December 2022: RUB 3,385 million).
13
RIGHT-OF-USE ASSETS
The Group has the following types of right-of-use assets: railway wagons, production equipment, containers
for bulk cargo, offices. The leases typically run for a period of 5 years, with an option to renew the lease
after that date.
RUB million
Buildings
Plant and
equipment
Fixtures and
fittings
Net book value at 1 January 2022
452
6,503
New lease contracts or modification
on existing lease contracts
Depreciation
Disposals
Disposal of foreign subsidiaries
Effect of foreign currency translation reserve
60
(78)
(67)
(246)
27
(1,118)
(1,108)
(132)
(18)
2
Net book value at 31 December 2022
148
4,129
-
-
-
-
-
-
-
New lease contracts or modification
on existing lease contracts
Depreciation
Disposals
Net book value at 31 December 2023
216
(63)
(15)
286
1,102
(978)
(62)
2,851
(88)
-
4,191
2,763
7,240
Amounts recognised in the consolidated statement of profit or loss and other comprehensive income:
RUB million
Depreciation expense on right-of-use assets
Expenses relating to leases with variable payments
Expenses relating to short-term leases
Interest expense on lease liabilities
Amounts recognised in the consolidated statement of cash flows:
RUB million
Principal lease payments (note 24)
Expenses relating to leases with variable payments
Expenses relating to short-term leases
Interest payments (note 24)
2023
1,129
562
387
284
2023
(1,416)
(562)
(387)
(284)
2022
1,186
498
349
244
2022
(1,429)
(498)
(349)
(244)
Total payments
(2,649)
(2,520)
Total
6,955
(1,058)
(1,186)
(199)
(264)
29
4,277
4,169
(1,129)
(77)
338
339
16
17
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
14
INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
15
DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
Carrying values of the Group’s investments in associates and joint ventures are as follows:
(b) Movement in temporary differences during the year
RUB million
JSC Khibinskaya Teplovaya Kompaniya (Russia)
JSC Giproruda (Russia)
JSC Soligalichskiy izvestkovyi kombinat (Russia)
LLC Avrora-Khibiny (Russia)
Total
31 December 2023
Carrying
value
Share of
ownership
31 December 2022
Carrying
value
Share of
ownership
50%
25%
26%
50%
534
62
39
1
636
504
62
26
-
592
50%
25%
26%
-
15
DEFERRED TAX ASSETS AND LIABILITIES
(a) Deferred tax assets and liabilities by type of temporary difference
Deferred tax assets and liabilities are attributable to the following items:
RUB Million
Property, plant and equipment,
right-of-use assets and intangible
assets
Other non-current assets
Current assets
Liabilities
Tax loss carry-forwards
Assets
Liabilities
31 December 2023
Net
Assets
Liabilities
31 December 2022
Net
85
39
721
5,514
10,876
(18,314)
(1,615)
(1,158)
-
-
(18,229)
(1,576)
(437)
5,514
10,876
104
41
765
1,345
8,523
(15,986)
(1,199)
(1,945)
(1,565)
-
(15,882)
(1,158)
(1,180)
(220)
8,523
Deferred tax assets/(liabilities)
Offset
17,235
(7,484)
(21,087)
7,484
(3,852)
-
10,778
(2,875)
(20,695)
2,875
(9,917)
-
Net deferred tax
assets/(liabilities)
9,751
(13,603)
(3,852)
7,903
(17,820)
(9,917)
The deferred tax assets on tax loss carry-forwards relate to the Russian entities of the Group. Due to the
Russian tax legislation, starting from 1 January 2017, tax losses accumulated as at 31 December 2023 can
be carried forward without limitation on utilisation period.
Management has developed a tax strategy to utilise the above tax losses. In assessing the tax losses
recoverability, management considers a future Group’s taxable profits forecast and the Group’s tax position
to ensure whether it is probable that the relevant taxable profit will be available taking into account the
Group’s available restructuring arrangements to deferred tax utilization. In addition, management expects
to utilise a part of tax losses in 2024 through the taxable income from the repayment of short-term part of
receivable recognised as a result of Phosint Group disposal (note 17).
As at 31 December 2023, no deferred tax liability for taxable temporary differences of RUB 88,627 million
associated with investments in subsidiaries has been recognised (31 December 2022: for taxable
temporary differences of RUB 113,2121 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 income tax rate for intragroup dividends is expected
to be 0%.
1In 2023, the Group changed the approach to taxable temporary differences calculation. The Group adjusted the amount of taxable
temporary differences as at 31 December 2022 to ensure information comparability in the consolidated financial statements for 2023.
RUB million
Property, plant and equipment,
right-of-use assets and
intangible assets
Other non-current assets
Current assets
Liabilities
Tax loss carry-forwards
Net deferred tax
(liabilities)/assets
RUB million
Property, plant and equipment,
right-of-use assets and
intangible assets
Other non-current assets
Current assets
Liabilities
Tax loss carry-forwards
Net deferred tax
(liabilities)/assets
31 December
2023
Recognised
in profit or
loss
Recognised
in other
comprehensi
ve income
Disposal of
foreign
subsidiaries
1 January
2023
(18,229)
(1,576)
(437)
5,514
10,876
(2,347)
(418)
743
5,734
2,353
(3,852)
6,065
-
-
-
-
-
-
-
-
-
-
-
-
(15,882)
(1,158)
(1,180)
(220)
8,523
(9,917)
31 December
2022
Recognised
in profit or
loss
Recognised
in other
comprehensi
ve income
Disposal of
foreign
subsidiaries
1 January
2022
(15,882)
(1,158)
(1,180)
(220)
8,523
(2,288)
(904)
(2,788)
(1,835)
1,697
(9,917)
(6,118)
25
10
37
3
-
75
(280)
(79)
(69)
(8)
-
(13,339)
(185)
1,640
1,620
6,826
(436)
(3,438)
16 OTHER NON-CURRENT ASSETS
RUB million
Receivable accrued as a result of Phosint Group disposal1
Allowance for expected credit losses
Receivable accrued as a result of Phosint Group disposal, net
Investments in equity instruments measured at fair value through profit or loss1
Loans issued to employees, at amortised cost
Long-term accounts receivable
Financial assets, at fair value through profit or loss
Loans issued to third parties, at amortised cost
Total other non-current assets
31 December
2023
31 December
2022
7,178
(71)
7,107
1,025
65
45
11
9
8,262
8,454
(85)
8,369
-
69
58
12
38
8,546
1In March 2022, the Group’s wholly owned foreign subsidiary Phosint Limited (currently PUREFERT
LIMITED), owning the foreign companies of the Group, increased its share capital, resulting in dilution of
the Group’s stake in Phosint Limited to 5%. The Group performed the analysis of the key attributes and
documents of the transaction, and made a conclusion that it lost a control over Phosint Limited as described
in IFRS 10 Consolidated Financial Statements.
Upon the loss of control in 2022, the Group recognised a receivable of RUB 12,189 million with 3 years
payment period.
As at 31 December 2023, part of the receivables of RUB 4,959 million was reclassified into current financial
assets in accordance with the repayment schedule.
340
341
18
19
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
16 OTHER NON-CURRENT ASSETS (CONTINUED)
The following information shows the movements of the Group’s receivables recognised as a result
of Phosint Group disposal during the reporting period:
RUB million
Balance at 1 January
Foreign currency translation difference
Unwind of discount (note 10)
Reclassification of the current portion of long-term accounts receivables (note 17)
Receivable accrued
Discount on extension of payment terms (note 10)
2023
8,454
2,375
1,308
(4,959)
-
-
2022
-
(1,477)
519
-
12,189
(2,777)
Balance at 31 December
7,178
8,454
As the Group has no longer significant influence over Phosint Limited (currently PUREFERT LIMITED)
following the loss of control, the remaining 5% investment was recognised as financial asset measured at
fair value through profit or loss with insignificant fair value at the date of initial recognition. As at
31 December 2023, the fair value of the investment measured based on the model of discounted cash flows
from the investee’s operating activities amounted to RUB 1,025 million.
17 OTHER FINANCIAL ASSETS
RUB million
31 December
2023
31 December
2022
Short-term part of receivable accrued as a result of Phosint Group disposal (note 16)
Loans issued to employees, at amortised cost
Loans issued to third parties, at amortised cost
Interest receivable
Credit losses allowance
Total other financial assets
The movements in provision for expected credit losses allowance are as follows:
RUB million
Balance at 1 January
Disposal of foreign subsidiaries
Use of allowance
Increase in provision for expected credit losses allowance
Effect of foreign currency translation reserve
Balance at 31 December
4,959
91
59
42
(68)
5,083
2023
(18)
-
1
(51)
-
(68)
-
101
51
76
(18)
210
2022
(113)
4,235
6
(4,135)
(11)
(18)
In February 2022, the Group provided cash of RUB 3,130 million (USD 40 million) to the investment broker
at 0.25% and received securities as a collateral for the funds deposited (reverse repo transaction).
As a result of negative economic situation, significant market disruptions to broker cross-border operations
led to his liquidity problems and inability to repurchase securities back from the Group. As a result,
the Group loan issued under this transaction was fully impaired and loss of RUB 4,124 million was
recognised as a part of finance costs.
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
18
INVENTORIES
RUB million
Raw materials and spare parts
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
Allowance for inventory write-down
31 December
2023
31 December
2022
23,767
15,109
12,641
698
1,066
8,250
1,965
177
(96)
10,388
801
1,379
5,685
5,941
148
(102)
Total inventories
48,468
39,349
19
TRADE AND OTHER RECEIVABLES
RUB million
Financial assets
Trade accounts receivable
Other receivables
Credit losses allowance
Non-financial assets
Advances issued
Advances issued on custom duties
Deferred expenses
Receivables from employees
Provision for doubtful accounts and expected credit losses allowance
31 December
2023
31 December
2022
51,403
430
(474)
9,958
4,816
204
40
(15)
61,997
1,479
(482)
8,634
3,901
202
20
(10)
Total trade and other receivables
66,362
75,741
As at 31 December 2023, the Group performed revaluation of receivables under provisionally priced sales
agreements measured at fair value through profit or loss and recognised an adjustment within revenue.
The following information shows the movement of the Group's receivables under provisionally priced sales
agreements:
RUB million
Balance at 1 January
2,711
2023
Receivables recognised
Receivables redeemed
Foreign exchange gain, net
Loss from revaluation at fair value (unrealised)
Balance at 31 December
90,813
(62,097)
2,233
(74)
33,586
As at 31 December 2023, a 5% increase/(decrease) in forecasted market prices, with all other variables
held constant, will lead to increase/(decrease) fair value of the Group's receivables under provisionally
priced sales agreements by RUB 1,493 million.
342
343
20
21
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
19
TRADE AND OTHER RECEIVABLES (CONTINUED)
The movements in the amount of credit losses allowance are as follows:
RUB million
Balance at 1 January
Increase in credit losses allowance
Reversal of allowance
Use of allowance
Disposal of foreign subsidiaries
Effect of foreign currency translation reserve
Balance at 31 December
2023
(492)
(28)
16
15
-
-
(489)
2022
(355)
(472)
7
223
125
(20)
(492)
See note 27 (e) for the analysis of overdue trade and other accounts receivable.
20
CASH AND CASH EQUIVALENTS
RUB million
Call deposits
Cash in bank
Petty cash
Total cash and cash equivalents
31 December
2023
31 December
2022
20,058
9,095
10
5,911
7,438
7
29,163
13,356
As at 31 December 2023 and 31 December 2022 the most significant cash and cash equivalent balances
(more than 95%) are kept with large Russian banks rated at АА+ and ААА by independent Russian rating
agencies (AСRA, Expert RA).
21
EQUITY
(a)
Share capital
the Company’s share capital consists
As at 31 December 2023 and 31 December 2022,
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 2023 and 31 December 2022, 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.
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
21
EQUITY (CONTINUED)
Amount of such payment is subject to approval of the General Shareholders’ Meeting, based on
recommendations provided by the PhosAgro Board of Directors. 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 Accounting Standards. 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 participant 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 Accounting Standards. At the
same time, the amount of declared dividends shall not be lower than 50% of net profit for the relevant period
under IFRS Accounting Standards adjusted by the amount of unrealised exchange rate difference.
(c) Dividends
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 financial statements prepared in accordance
with Russian Accounting Standards. As at 31 December 2023, the Company had cumulative retained
earnings of RUB 38,397 million (31 December 2022: RUB 69,540 million).
Proposed
by the Board of Directors in
March 2023
May 2023
November 2023
Total
Proposed
by the Board of Directors in
August 2022
November 2022
Total
Approved
by shareholders in
March 2023
June 2023
December 2023
Approved
by shareholders in
September 2022
December 2022
Amount per
share
RUB
Amount of
dividends
RUB million
465
264
291
Amount per
share
RUB
780
318
60,217.5
34,188.0
37,684.5
132,090.0
Amount of
dividends
RUB million
101,010.0
41,181.0
142,191.0
22
EARNINGS PER SHARE
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.
Weighted average number of ordinary shares in issue
Profit for the year attributable to shareholders of the Company, RUB million
Basic and diluted earnings per share, RUB
2023
2022
129,500,000
86,084
665
129,500,000
184,662
1,426
344
345
22
23
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
23
LOANS AND BORROWINGS (CONTINUED)
The breakdown of the loans and borrowings denominated in different currencies is as follows:
RUB million
USD-denominated
CNY-denominated
RUB-denominated
EUR-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
31 December
2023
31 December
2022
117,677
80,280
47,254
2,928
135,825
-
42,805
12,128
248,139
190,758
31 December
2023
31 December
2022
86,429
53,298
61,225
2,704
44,844
-
(361)
80,974
23,218
38,824
10,688
2,105
35,169
(220)
248,139
190,758
Analysis of Group's loans and borrowings changes related to cash and non-cash movements is presented
below:
RUB million
Balance as at 1 January
Cash inflows
Cash outflows
Foreign exchange differences
Interest accrued
Interest paid
Amortisation of bank commission
Other turnovers
Balance as at 31 December
2023
190,758
172,906
(155,306)
39,316
7,179
(6,840)
126
-
2022
169,791
57,171
(23,926)
(11,950)
4,223
(4,628)
78
(1)
248,139
190,758
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
23
LOANS AND BORROWINGS
This note provides information about the contractual terms of the Group’s loans and borrowings. For more
information about the leases, see note 24. For more information about the Group’s exposure to foreign
currency risk, interest rate risk and liquidity risk, see note 27.
RUB million
Current loans and borrowings
Unsecured bank loans
Interest payable
Eurobonds
Total current loans and borrowings
Non-current loans and borrowings
Replacement bonds
Unsecured bank loans
Bonds CNY-denominated
Eurobonds
Bonds RUB-denominated
Bank commission (long-term)
Total non-current loans and borrowings
Total loans and borrowings
31 December
2023
31 December
2022
84,610
1,819
-
44,648
1,157
35,169
86,429
80,974
66,404
27,231
25,152
23,284
20,000
(361)
-
39,666
-
70,338
-
(220)
161,710
109,784
248,139
190,758
Information on the Group's bond loans is presented below:
RUB million
Currency
Eurobonds
USD
USD
USD
Replacement
bonds
USD
USD
CNY-denominated
bonds
CNY
RUB-denominated
bonds
RUB
Total bonds
Expiry
date
Rate, %
31 December 2023
Carrying
value
Fair value
31 December 2022
Carrying
value
Fair value
24.04.2023
23.01.2025
16.09.2028
3.95%
3.05%
2.60%
-
12,833
10,451
-
10,877
6,994
35,169
35,169
35,169
27,256
18,552
24,407
23.01.2025
16.09.2028
3.05%
2.60%
32,011
34,393
31,531
31,261
09.04.2026
4.65%
25,152
25,190
17.04.2026
9.40%
20,000
19,589
-
-
-
-
-
-
-
-
134,840
125,442
105,507
70,215
In April 2023, the Company repaid Eurobonds with a nominal value of USD 500 million issued in
January 2018 with a coupon rate of 3.949%. The source of funds for making payments also included funds
raised as part of the placement of exchange-traded bonds in April 2023.
In April 2023, the Company issued two series of 3-year bonds on the Moscow Stock Exchange:
•
•
CNY 2,000 million, with a coupon period of 91 days and coupon income China Loan prime rate
(LPR 1Y) + 1.2%;
RUB 20,000 million, with a coupon period of 182 days and coupon income 9.4%.
In accordance with the Russian President Decree from 5 July 2022 № 430 On repatriation of foreign
currency and Russian Federation currency by the residents as a foreign economic activity participants, in
July 2023 the Company issued replacement bonds of Z025-D series for USD 356.9 million and ZO28-D
series for USD 383.5 million in exchange for Eurobonds with maturity in 2025 and 2028 respectively.
Replacement bonds have the same terms as Eurobonds including rate, coupon payment terms, par value
and maturity date. Bonds repayment during issue was made by the Eurobonds, rights on which
are registered by Russian depositaries. Repayment of Z025-D and ZO28-D series bonds and appropriate
coupon will be made in Russian roubles applying Bank of Russia exchange rate at the repayment date.
346
347
24
25
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
24
LEASE LIABILITIES
RUB million
Lease liability
without subsequent
asset buyout
Lease liability with
subsequent
asset buyout
Balance as at 1 January 2022
3,148
2,489
New lease contracts or modification of existing
lease contracts
Principal lease payments
Interest expense on lease liabilities
Interest lease payments
Disposal of foreign subsidiaries
Effect of foreign currency translation reserve
Balance as at 31 December 2022
New lease contracts or modification of existing
lease contracts
Principal lease payments
Interest expense on lease liabilities
Interest lease payments
Foreign exchange differences
Balance as at 31 December 2023
(1,431)
(730)
106
(106)
(290)
34
731
518
(401)
66
(66)
(2)
846
460
(699)
138
(138)
-
(45)
2,205
2,060
(1,015)
218
(218)
135
3,385
Total
5,637
(971)
(1,429)
244
(244)
(290)
(11)
2,936
2,578
(1,416)
284
(284)
133
4,231
25
DEFINED BENEFIT OBLIGATIONS
RUB million
31 December 2023
31 December 2022
Pension obligations, long-term
Post-retirement obligations other than pensions
Total defined benefit obligations
308
821
1,129
442
608
1,050
The Group has defined benefit plans at JSC “Apatit”, including all the branches, which stipulate payment of
a lump sum allowance to employees who have a specified period of service in this company upon their
retirement. The movement in the present value of the defined benefit obligations is as follows:
RUB million
Defined benefit obligations at 1 January
Disposal of foreign subsidiaries
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
2023
1,050
-
(101)
145
-
35
-
1,129
2022
952
(194)
(101)
103
(1)
276
15
1,050
The key actuarial assumptions used in measurement of the defined benefit obligations are as follows:
Discount rate
Future pension increases
31 December 2023
31 December 2022
12.0%
5.7%
10.1%
6.0%
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
26
TRADE AND OTHER PAYABLES
RUB million
Financial liabilities
Trade accounts payable
including accounts payable for property, plant and equipment
and intangible assets
Other payables
Non-financial liabilities
Advances received (liabilities under the contracts with customers)
Accrued expenses and provisions
Payables to employees
Other payables
Total trade and other payables
31 December 2023
31 December 2022
22,130
7,661
870
13,003
349
5,990
311
42,653
15,700
4,294
1,089
17,258
241
4,620
504
39,412
Contract liabilities balance at the beginning of the year was fully recognised in revenue during the reporting
period.
27
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 managing 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 management policies are established to identify and analyse the
risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to
limits. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Group’s activities.
(b) Market risk
Market risk is the risk that changes in market conditions, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s profit or the value 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.
(c)
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 currency of Group entities. The currencies giving rise to this
risk are primarily USD, CNY 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 buying 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 currencies in which the Group’s sales agreements are
denominated.
348
349
26
27
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
27
FINANCIAL RISK MANAGEMENT (CONTINUED)
The Group has the following net monetary position on financial assets and liabilities denominated in foreign
currencies:
RUB million
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net position of the
Group companies
31 December 2023
31 December 2022
USD
denominated
CNY
denominated
EUR
denominated
USD
denominated
CNY
denominated
EUR
denominated
7,178
64,290
(108,875)
(12,822)
-
-
(28,937)
(51,959)
-
1,667
(2,185)
(1,910)
8,454
64,273
(92,131)
(46,001)
(50,229)
(80,896)
(2,428)
(65,405)
-
-
-
-
-
-
1,242
(9,293)
(3,333)
(11,384)
Management estimates that a 10% strengthening/(weakening) of RUB against USD, CNY and EUR, based
on the Group’s total net position in USD, CNY and EUR as at the reporting date would have
increased/(decreased) the Group’s profit for the year by RUB 13,355 million, before any tax effect
(2022: would have increased/(decreased) the Group’s profit for the year by RUB 7,679 million).
This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is
performed on the same basis for 2022.
The net foreign exchange loss recognised in profit or loss of RUB 17,964 million (net foreign exchange gain
of RUB 2,417 million for the comparative period) resulted from Russian rouble depreciation against major
currencies during the reporting period (Russian rouble appreciation against major currencies during the
comparative period).
(d)
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:
RUB million
Fixed rate instruments
Call deposits and other financial assets
Other non-current assets
Long-term borrowings
Short-term borrowings
Lease liabilities
31 December 2023
31 December 2022
20,208
74
(132,309)
(75,107)
(4,231)
6,063
107
(107,781)
(74,749)
(2,936)
Total fixed rate instruments
(191,365)
(179,296)
Variable rate instruments
Long-term borrowings
Short-term borrowings
Total variable rate instruments
(29,762)
(11,322)
(41,084)
(2,223)
(6,225)
(8,448)
Sensitivity analysis for financial instruments with variable interest rates
At 31 December 2023, 2 percentage points increase/(decrease) in interest rate, with all other variables held
constant, would have decreased/(increased) the Group’s profit for the year and equity by RUB 822 million
(31 December 2022: RUB 169 million).
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
27
FINANCIAL RISK MANAGEMENT (CONTINUED)
(e) Credit risk
Credit risk is the risk of financial loss to the Group if a customer and supplier or counterparty to a financial
instrument fails to meet its contractual obligations, and arises from the Group’s receivables from customers,
current and non-current financial assets and cash and cash equivalents.
As at 31 December 2023, the Group’s maximum exposure to credit risk is represented by the carrying
amount of
to RUB 92,842 million (31 December 2022:
RUB 85,116 million). As at 31 December 2023, 95% of the Group’s trade receivables balance are
represented by one counterparty (31 December 2022: 98%).
financial assets and amounted
its
As at 31 December 2023, the Group’s financial assets measured at amortised cost amounted to
RUB 59,245 million (31 December 2022: RUB 84,563 million).
As at 31 December 2023, the Group’s financial assets measured at fair value through profit or loss
amounted to RUB 33,597 million (31 December 2022: RUB 553 million).
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual specific characteristics of each
customer. The general characteristics of the Group’s customer base, including the default risk of the
industry and country, in which customers operate, have 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 outstanding receivables;
these limits are reviewed quarterly. Customers that fail to meet the Group’s benchmarks of creditworthiness
may transact with the Group only on a prepayment basis.
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.
The Group establishes an allowance for expected credit losses that represents its estimate of the expected
credit losses in respect of trade and other receivables and other financial assets. The Group estimates the
allowance for expected credit losses for trade receivables in the amount equal to lifetime expected loss
allowance of the financial instrument. In the terms of calculating the expected credit loss, the Group
considers the credit rating of counterparties, adjusted with forward-looking factors specific to the debtors
and economic environment in which they operate, and historical credit loss experience.
Exposures within each credit risk grade are segmented by geographic region classification and an ECL rate
is calculated for each segment based on delinquency status and actual credit loss experience over the past
years.
The allowance for expected credit losses on accounts receivable has been accrued in accordance with the
risk matrix presented in the table below:
RUB million
Loss rate
Not past due
0.1-6%
Past due
0-90 days
0.1-10%
Past due
91-180 days
8.62%
Past due
181-365 days
10.53%
More than
one year
100%
Total
31 December 2023
Gross carrying amount
Lifetime ECL
50,148
(165)
1,338
(66)
Net carrying value
49,983
1,272
58
(5)
53
57
(6)
51
232
(232)
51,833
(474)
-
51,359
350
351
28
29
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
27
FINANCIAL RISK MANAGEMENT (CONTINUED)
RUB million
Loss rate
Not past due
0.1%-2%
Past due
0-90 days
0.1%-5%
Past due
91-180 days
13.75%
Past due
181-365 days
21.25%
More than
one year
100%
Total
31 December 2022
Gross carrying amount
Lifetime ECL
61,684
(406)
1,681
(18)
Net carrying value
61,278
1,663
29
(4)
25
34
(6)
28
48
(48)
63,476
(482)
-
62,994
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 large banks with high credit rating and minimal risk of
default, which provides high-level credit risk limits. All bank account balances and term deposits are not
overdue or impaired.
(f)
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 ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
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.
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:
31 December 2023
RUB million
Carrying
value
Contractual
cash flows 0-1 year 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs
Loans and borrowings
Lease liabilities
Dividends payable
Trade and other payables
248,500
4,231
54,919
23,000
267,696
5,823
54,919
23,000
94,081 59,358 64,308
758
1,003
-
-
-
-
1,770
54,919
23,000
3,939 46,010
355
-
-
522
-
-
Over
5 yrs
-
1,415
-
-
Total
330,650
351,438 173,770 60,361 65,066
4,461 46,365
1,415
RUB million
Carrying
value
Contractual
cash flows 0-1 year 1-2 yrs 2-3 yrs 3-4 yrs 4-5 yrs
Over
5 yrs
31 December 2022
Loans and borrowings
Lease liabilities
Dividends payable
Trade and other payables
190,978
2,936
82
16,789
202,313
3,487
82
16,789
84,567 26,025 40,747 11,829
312
-
-
1,488
82
16,789
1,026
-
-
515
-
-
3,060 36,085
33
-
-
113
-
-
Total
210,785
222,671 102,926 27,051 41,262 12,141
3,173 36,118
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
27
FINANCIAL RISK MANAGEMENT (CONTINUED)
(g) Capital management
The Group’s Board of Directors pursues a policy aimed at maintaining high capital levels to keep investor,
lender and market confidence and to provide future sustainable business development. The Board of
Directors keeps under control the return on invested capital and dividends paid to shareholders. To maintain
and adjust the capital structure, the Group may adjust periods of dividend payment to shareholders, revise
its investment programme and obtain new or repay existing loans and borrowings. There were no changes
in the Board’s approach to capital management during the year.
The Group defines capital under management as the amount in “Equity attributable to shareholders of the
Company” line item in the consolidated statement of financial position. As at 31 December 2023, the
to RUB 151,521 million (31 December 2022:
Group’s capital under management amounted
RUB 197,562 million).
The Group's management regularly analyses Net Debt / EBITDA ratio calculated by dividing the Group's
total short-term and long-term loans and borrowings less cash and cash equivalents by EBITDA (operating
profit adjusted for depreciation and amortisation). Some loan agreements cap this ratio at no more than 3.
The Company and its subsidiaries comply with external regulatory requirements for capital including
requirements established by law and loan agreements.
28
COMMITMENTS
As at 31 December 2023, the Group had contractual commitments for the purchase of property, plant and
equipment for RUB 52,917 million (31 December 2022: RUB 35,181 million), including VAT where
applicable.
29
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.
(b)
Taxation contingencies
Russian tax and customs 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 documentation supporting the
tax positions may be challenged tax authorities. Russian tax administration is gradually strengthening,
including 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 Economic 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; however, it may be significant to the financial
position and/or the Group's operations.
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 authorities. 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.
352
353
30
31
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
29
CONTINGENCIES (CONTINUED)
(c)
Environmental contingencies
The enforcement of environmental regulation in the Russian Federation is evolving and the enforcement
posture of government authorities is continually being reconsidered.
The Group is involved in chemical production, which is inherently exposed to significant environmental
risks. The Group companies record environmental 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) 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 consequences for the Group including growth in the cost of
borrowings and declaration of default. The payment obligations of the Group in respect of coupon payments
for Eurobonds are fulfilled when the funds are transferred to the account of the paying agent.
The Group was in compliance with covenants during the years ended 31 December 2023 and
31 December 2022 and as of each reporting date.
30
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 relationship,
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, having significant influence on the Group.
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
Purchases of goods and services
Sales of goods and services
Other expenses, net
Purchases of goods and services
Nature of relationship
Associates
Associates
Other related parties
Other related parties
Other related parties
2023
27
(879)
1,082
(400)
(60)
2022
30
(734)
1,089
(85)
(246)
In 2023, the Company declared dividends, including RUB 77,113 million (2022: RUB 91,366 million) to the
shareholders holding more than 20% of the Company’s shares.
In 2023, the Group received and repaid unsecured loan from the related party amounted to
RUB 10,000 million. The loan was received at interest rate of 13.65 – 15.65% per annum.
(b) Balances with related parties
RUB million
Nature of relationship
31 December 2023
31 December 2022
Trade and other receivables
Trade and other payables
Trade and other receivables
Trade and other payables
Associates
Associates
Other related parties
Other related parties
57
(60)
-
(2)
42
(39)
8
(451)
(c) Remuneration of key management personnel and Board of Directors members
Remuneration of key management personnel consists of monthly compensation, annual performance
bonus contingent on operating results, termination benefits and social security costs. The remuneration of
the Board of Directors and key management personnel recognised as part of administrative and selling
expenses amounted to RUB 3,553 million (2022: RUB 16,897 million).
354
355
32
PJSC “PhosAgro”
Notes to the Consolidated Financial Statements for 2023
31
SIGNIFICANT SUBSIDIARIES OF THE GROUP
Subsidiary
Country of
incorporation
Effective ownership (rounded)
31 December
31 December
2022
2023
Apatit, JSC (including Balakovo, Volkhov and Kirovsk branches) Russia
Russia
Mekhanik, LLC
Russia
NIUIF, JSC
Russia
PhosAgro-Region, LLC
Russia
PhosAgro-Belgorod, LLC
Russia
PhosAgro-Don, LLC
Russia
PhosAgro-Kuban, LLC
Russia
PhosAgro-Kursk, LLC
Russia
PhosAgro-Lipetsk, LLC
Russia
PhosAgro-Oryol, LLC
Russia
PhosAgro-Stavropol, LLC
Russia
PhosAgro-Volga, LLC
Russia
PhosAgro-SeveroZapad, LLC
Russia
PhosAgro-Tambov, LLC
Russia
PhosAgro-Sibir, LLC
100%
100%
94%
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%
32
SUBSEQUENT EVENTS
In 2024, the Group received loans and borrowings amounted to RUB 96,1 billion, including short-term loans
received from a related party amounted to RUB 17,1 billion, and repaid loans and borrowings amounted to
RUB 47 billion, including short-term loans to a related party amounted to RUB 17,1 billion.
In February 2024, the Company repaid dividends to the shareholders of RUB 37,7 billion.
www.tedo.ru
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MANAGEMENT RESPONSIBILITY STATEMENT
The PhosAgro’ 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 PhosAgro
and the undertakings included
in the consolidation taken as a whole,
together with a description
of the principal risks and uncertainties
that they face.
This integrated report was reviewed
and approved at PhosAgro’s Board
of Directors meeting on 26 April 2024.
The consolidated financial statements
for the year ended 31 December 2023
were approved by the Board of Directors
on 26 April 2024.
Mikhail Rybnikov
Chief Executive Officer and
Chairman of the Management
Board of PhosAgro
INDEPENDENT LIMITED
ASSURANCE REPORT
Joint-Stock Company
“Technologies of Trust – Audit”
(“Technologies of Trust – Audit” JSC)
Joint-Stock Company
“Technologies of Trust – Audit”
www.tedo.ru
(“Technologies of Trust – Audit” JSC)
Ferro-Plaza Business Centre, 14/3
Krzhizhanovsky street, bldg. 5/1,
Akademichesky municipal district,
Moscow, Russian Federation, 117218
Ferro-Plaza Business Centre, 14/3
Krzhizhanovsky street, bldg. 5/1,
F: +7 (495) 967 6001
Akademichesky municipal district,
Moscow, Russian Federation, 117218
www.tedo.ru
F: +7 (495) 967 6001
Independent Auditor’s Limited Assurance Report
Independent Auditor’s Limited Assurance Report
To the Management of Public Joint Stock Company “PhosAgro”:
Introduction
To the Management of Public Joint Stock Company “PhosAgro”:
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
Introduction
Integrated Annual Report of the Company for the year ended 31 December 2023 (hereinafter – the “Integrated
We have been engaged by the Management of Public Joint Stock Company “PhosAgro” (hereinafter – the
Annual Report”). The Integrated Annual Report represents information related to the Company and its subsidiaries
“Company”) to provide limited assurance on the selected information described below and included in the
(hereinafter together – the “Group”), unless otherwise stated in the Integrated Annual Report.
Integrated Annual Report of the Company for the year ended 31 December 2023 (hereinafter – the “Integrated
Annual Report”). The Integrated Annual Report represents information related to the Company and its subsidiaries
Selected information
(hereinafter together – the “Group”), unless otherwise stated in the Integrated Annual Report.
We assessed the quantitative and qualitative information specified in Appendix 1 to this report that is disclosed in
the Integrated Annual Report and referred to or included in the GRI Content Index of the Integrated Annual Report
Selected information
(hereinafter – the “Selected Information”).
We assessed the quantitative and qualitative information specified in Appendix 1 to this report that is disclosed in
The scope of our limited assurance procedures was limited to the Selected Information for the year ended
the Integrated Annual Report and referred to or included in the GRI Content Index of the Integrated Annual Report
31 December 2023 only. We have not performed any procedures with respect to earlier periods or any other items
(hereinafter – the “Selected Information”).
included in the Integrated Annual Report and, therefore, do not express any conclusion thereon.
The scope of our limited assurance procedures was limited to the Selected Information for the year ended
31 December 2023 only. We have not performed any procedures with respect to earlier periods or any other items
Reporting criteria
included in the Integrated Annual Report and, therefore, do not express any conclusion thereon.
We assessed the Selected Information using relevant criteria, including reporting requirements in the respective
GRI Sustainability Reporting Standards 2, 3, 201, 202, 203, 205, 207, 302, 303, 304, 305, 306, 401, 403, 404 and
Reporting criteria
413 (hereinafter – the “GRI Standards”) published by Stichting Global Reporting Initiative and in the Group’s
We assessed the Selected Information using relevant criteria, including reporting requirements in the respective
management methodology as set forth in the criteria defined in the notes to the Group’s specific disclosures in the
GRI Sustainability Reporting Standards 2, 3, 201, 202, 203, 205, 207, 302, 303, 304, 305, 306, 401, 403, 404 and
Environmental review section of the Integrated annual report (hereinafter – the “PhosAgro Methodology”, and
413 (hereinafter – the “GRI Standards”) published by Stichting Global Reporting Initiative and in the Group’s
together with the GRI Standards – the “Reporting Criteria”). We believe that the Reporting Criteria are appropriate
management methodology as set forth in the criteria defined in the notes to the Group’s specific disclosures in the
given the purpose of our limited assurance engagement.
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
Responsibilities of the Group’s management
given the purpose of our limited assurance engagement.
Management of the Group is responsible for:
Responsibilities of the Group’s management
• designing, implementing and maintaining internal control relevant to the preparation of the Selected Information
Management of the Group is responsible for:
that is free from material misstatement, whether due to fraud or error;
• designing, implementing and maintaining internal control relevant to the preparation of the Selected Information
• establishing internal methodology and guidelines (including the PhosAgro Methodology) for preparing and
that is free from material misstatement, whether due to fraud or error;
reporting the Selected Information in accordance with the Reporting Criteria;
• establishing internal methodology and guidelines (including the PhosAgro Methodology) for preparing and
• preparing, measuring and reporting of the Selected Information in accordance with the Reporting Criteria; and
reporting the Selected Information in accordance with the Reporting Criteria;
the accuracy, completeness and presentation of the Selected Information.
the accuracy, completeness and presentation of the Selected Information.
•
• preparing, measuring and reporting of the Selected Information in accordance with the Reporting Criteria; and
Our responsibilities
•
We are responsible for:
Our responsibilities
• planning and performing the engagement to obtain limited assurance about whether the Selected Information
We are responsible for:
is free from material misstatement, whether due to fraud or error;
356
357
• planning and performing the engagement to obtain limited assurance about whether the Selected Information
•
forming an independent conclusion, based on the procedures we have performed and the evidence we have
is free from material misstatement, whether due to fraud or error;
obtained; and
•
•
•
forming an independent conclusion, based on the procedures we have performed and the evidence we have
reporting our conclusion to the Management of the Group.
obtained; and
reporting our conclusion to the Management of the Group.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
www.tedo.ru
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Reporting and measurement techniques
Under the GRI Standards there is a range of different, but acceptable, reporting and measurement 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.
Limited assurance 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 2023 has not
been prepared, in all material respects, in accordance with the Reporting Criteria.
27 April 2024
Moscow, Russian Federation
Fegetsin Alexey Iakovlevich is authorised to sign on behalf of the General Director of Joint-Stock Company
“Technologies of Trust – Audit” (Principal Registration Number of the Record in the Register of Auditors and Audit
Organizations (PRNR) – 12006020338), certified auditor (PRNR – 21906101957)
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 its governance responsibilities by obtaining an
independent auditor’s 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 between us in writing and our prior
consent in writing is obtained.
Professional standards applied and level of assurance
We performed our 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.
Our independence and quality management
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.
Our firm applies International Standard on Quality Management 1, which requires the firm to design, implement and
operate a system of quality management including policies or 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:
• made enquiries of the Group’s management, including the Group Sustainability Reporting (SR) team and those
with responsibility for SR management and Group SR reporting;
•
conducted interviews of Group’s personnel responsible for the preparation of the Integrated Annual Report and
collection and analysis of underlying data;
• performed analysis of the relevant internal methodology and guidelines (including the PhosAgro Methodology),
gaining an understanding of the design of the key structures, systems, processes and controls for managing,
recording, preparing and reporting the Selected Information;
• performed limited substantive testing on a selective basis of the Selected Information to check that data had
been appropriately measured, recorded, collated and reported; and
•
reviewed the Selected Information for compliance of the disclosures with the relevant requirements of the
Reporting Criteria.
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.
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.
358
359
2
3
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PhosAgro Methodology
(the Group’s specific
disclosure)
Pollutant emissions
Waste water discharge
Specific water withdrawal
Specific water withdrawal
Recycled and
decontaminated waste
Related description
Pollutant emissions, kg per tonne of finished and semi-finished products
Waste water discharge into surface waters, m3 per tonne of finished and semi-finished products
Specific water withdrawal, including mining and pit waters, m3 per tonne of finished and semi-
finished products
Specific water withdrawal from surface sources, excluding mining and pit waters, m3 per tonne
of finished and semi-finished products
Share of recycled and decontaminated hazard class 1–4 waste, %
Appendix 1 to the Independent Auditor’s Limited Assurance
Report dated 27 April 2024
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
3-1
3-2
3-3
201-1
202-1
202-2
203-1
205-3
207-1
207-2
207-3
207-4
302-1
302-3
303-3
303-4
303-5
304-3
305-1
305-2
305-3
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
Narrative
Employees
Compliance with laws and regulations
Process to determine material topics
List of material topics
Management of material topics
Direct economic value generated and distributed
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
Country-by-country reporting
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
Other indirect (Scope 3) 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
403-8
403-9
403-10
404-1
404-2
404-3
413-1
360
361
4
5
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report
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: Apatit, including its branches and standalone business units..
The Selected GRI Indicators subject to limited assurance procedures
Code
GRI Indicator
Page number (or link)/Comments
Boundary
2
2-1
2-2
2-3
2-4
2-5
2-6
2-7
2-8
2-9
2-10
2-11
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
General disclosures (2021)
Organisational profile
Entities included in the organisation's sustainability reporting
Reporting period, frequency, and point of contact
Restatements of information
2, 18
2
2
In the 2023 Report, the methodology for calculating the GRI 203-1 indicator was
revised. Starting from this year, the indicator is calculated for all consolidated
companies, which agrees with the general approach towards consolidated financial
statements under IFRS. Based on the principle of comparability, the data for 2021
and 2022 was recalculated accordingly
External assurance
2
Activities, value chain and other business relationships
16-18, 139
Employees
152
Workers who are not employees
In 2023, there were 758 people working under civil law
contracts with the Company, or 3.5% of the average headcount.
They mainly provided documentation support, cleaning,
information and consulting, accounting, social support and
supervisory services.
Governance structure and composition
252, 260
Appointment and selection of the supreme governance body
PhosAgro Group has an onboarding programme for new Board
members. Newly appointed directors also visit PhosAgro
Group’s production sites and meet with functional managers.
Chair of the supreme governance body
266
Role of the supreme governance body in overseeing the
impacts
249, 258, 286
Delegation of responsibility for impact management
249
Role of the supreme governance body in sustainability
reporting
30, 250, 258
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
304
278
261
262
282
282
Annual total compensation ratio
Not disclosed owing to the confidential nature of this information
Statement on sustainable development strategy
Policy commitments
Embedding policy commitments
40
292
292
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
362
363
Code
GRI Indicator
Page number (or link)/Comments
Boundary
2-25
2-26
2-27
2-28
2-29
2-30
3
3-1
3-2
3-3
201
3-3
Processes to remediate negative impacts
Mechanisms for seeking advice and raising concerns
150, 294
150, 294
Compliance with laws and regulations
Membership associations
Approach to stakeholder engagement
Collective bargaining agreements
For the purposes of this disclosure, the Group uses the following
materiality criteria:
• with regard to fines, the Group determined the amount
exceeding RUB1 mln as a materiality criterion which it deems
to be meaningful given the scale of its operations;
• with regard to other penalties, 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.
In 2023, there were no violations by the Group of any laws and
regulations resulting in material fines or penalties. The Group
took steps to remedy the harm caused by an emergency in
2019 by committing RUB 1,584 thousand to the reproduction of
aquatic biological resources in 2023. For information on cases
of non-compliance with environmental laws and regulations,
see page 189.
105
28-30
We negotiate collective bargaining 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).
Material topics (2021)
Processes to determine material topics
28-30, 380
List of material topics
Management of material topics
Economic performance (2016)
Management of material topics
201-1
Direct economic value generated and distributed
201-2
Financial implications and other risks and opportunities due to
climate change
30
192
28
194
201-3
Defined benefit plan obligations and other retirement plans
386-387
201-4
Financial assistance received from government
Not disclosed owing to the confidential nature of this information
202
3-3
202-1
202-2
203
3-3
Market presence (2016)
Management 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
Indirect economic impacts (2016)
Management of material topics
203-1
Infrastructure investments and services supported
203-2
Significant indirect economic impacts
204
3-3
204-1
205
3-3
Procurement practices (2016)
Management of material topics
Proportion of spending on local suppliers at significant
locations of operation
Anti-corruption (2016)
Management of material topics
147
162
162
227
231
232
133
141
297
1
1
1
1
1
2
1
1
1
1
1
1
1
1
1
1
2
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Code
GRI Indicator
Page number (or link)/Comments
Boundary
Code
GRI Indicator
Page number (or link)/Comments
Boundary
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
206
3-3
206-1
207
3-3
Anti-competitive Behavior (2016)
Management of material topics
Legal actions for anti-competitive behavior, anti-trust, and
monopoly practices
Tax (2019)
Management of material topics
207-1
Approach to tax
207-2
Tax governance, control, and risk management
207-3
Stakeholder engagement and management of tax-related
concerns
207-4
Country-by-country reporting
302
3-3
Energy (2016)
Management of material topics
302-1
Energy consumption within the organisation
302
298
303
297
305
89
89
89
89
90, 388
205
207-208
302-2
Energy consumption outside of the organization
Not applicable
302-3
Energy intensity
302-4
Reduction in electricity consumption
207-208
205
302-5
Reductions in energy requirements of products and services
Not applicable
303
3-3
Water and effluents (2018)
Management of material topics
303-1
Responsible water consumption
217
217
303-2
Management of water discharge and related impacts on water
resources
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.
303-3
Water withdrawal
303-4
Water discharge
303-5
Water consumption
Biodiversity (2016)
Management of material topics
304
3-3
304-1
218
220-221
221
222
1
1
1
1
1
1
1
1
2
2
2
2
2
2
2
2
2
3-3
Management of material topics
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
192
201
202
202-203
201-203
203
2
2
2
2
2
305-6
Emissions of ozone-depleting substances
The Сompany does not use ozone-depleting substances on an industrial scale
305-7
306
3-3
Nitrogen oxides (NOX), Sulphur oxides (SOX), and other
significant air emissions
Waste (2020)
Management of material topics
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
3-3
Supplier environmental assessment (2016)
Management of material topics
215
209
209
210
211
211
211
133
308-1
New suppliers that were screened using environmental criteria
143
308-2
401
3-3
Negative environmental impacts in the supply chain and
actions taken
Employment (2016)
Management of material topics
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
143
147
392
Benefits established by collective bargaining agreements apply
to all employees of Company, its branches, standalone business
units and subsidiaries and do not depend on conditions of
employment.
401-3
Parental leave
402
3-3
Labor/Management Relations (2016)
Management of material topics
396
147
2
2
2
2
2
2
2
2
1
1
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.
304–2
Significant impacts of activities, products, and services on
biodiversity
304-3
Habitats protected or restored
223
223
2
2
304-4
IUCN Red List species and national conservation list species
with habitats in areas affected by operations
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
305
Emissions (2016)
364
365
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Code
GRI Indicator
Page number (or link)/Comments
Boundary
Code
GRI Indicator
Page number (or link)/Comments
Boundary
404-1
Average hours of training per year per employee
404-2
404-3
405
3-3
Programmes for upgrading employee skills and transition
assistance programmes
Percentage of employees receiving regular performance and
career development reviews
Diversity and equal opportunity (2016)
Management of material topics
405-1
Diversity of governance bodies and employees
156
156
160
147
154, 260
405-2
Ratio of basic salary and remuneration of women to men
162
410
3-3
410-1
413
3-3
413-1
Security Practices 2016
Management of material topics
Security personnel trained in human rights policies or
procedures
Local Communities 2016
Management of material topics
Operations with local community engagement, impact
assessments, and development programs
413-2
Operations with significant actual and potential negative
impacts on local communities
414
3-3
Supplier Social Assessment 2016
Management of material topics
414-1
New suppliers that were screened using social criteria
414-2
Negative social impacts in the supply chain and actions taken
Marketing and labelling (2016)
Management of material topics
291
291
227
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, including its branches and
standalone business units. For more information on page 227
The Apatit, including its branches and standalone business units
has no operations with significant actual and potential negative
impacts on local communities. Significant impacts of the Apatit,
including its branches and standalone business units on local
communities has been assessed as part of evaluation of UN
Sustainable Development Goals impacts.
133
143
143
101
Requirements for product and service information and labelling
105
Incidents of non-compliance concerning product and service
information and labelling
No such cases registered, not applicable.
Incidents of non-compliance concerning marketing
communications
No such cases registered, not applicable.
417
3-3
417-1
417-2
417-3
2
2
2
1
1
1
2
2
2
2
1
1
1
402-1
Minimum notice periods regarding operational changes
In case of significant changes in labour conditions of employees
or their representatives the Company is guided by the
applicable Russian laws.
1
For example, organisational or technological changes are
communicated to employees no later than two months before
they take effect. In case of staff optimisation, the employer shall
also send respective notice to employees at least two months
in advance or three months in advance if optimisation measures
may lead to large-scale dismissals. In these cases and in other
circumstances related to material operational changes, the
Company shall act in compliance with the Labour Code of the
Russian Federation, collective bargaining agreements and
internal regulations of PhosAgro Group companies. Collective
bargaining agreements negotiated with trade unions also
stipulate notification timeframes for changes.
In addition to statutory requirements, the Company has drafted
and is ready to implement anti-crisis measures, including an
employee communication plan (e.g. information sessions for
the staff and management), professional and career guidance,
psychological aid and all kinds of other support to employees
during transition periods.
403
3-3
Occupational health and safety (2018)
Management of material topics
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
403-8
Prevention and mitigation of occupational health and safety
impacts directly linked by business relationships
Workers covered by an occupational health and safety
management system
168
168
172
170
170
177
179
179
In 2023, our health and safety management system covered
100% of the Company’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. The minimum required training is provided to each
and everyone, including all visitors and representatives of
contractors as part of the introductory briefing.
403-9
Work-related injuries
403-10
Occupational diseases
175
179, 396
404
3-3
Training and education (2016)
Management of material topics
147
2
2
2
2
2
2
2
2
2
2
366
367
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Our strategy and risk experts analysed
the list of topics, compared them
against our strategic priorities and risk
profile, and assessed their impact on
PhosAgro’s value chain. The impact
of material aspects on our value chain
from mine to plate was rated as high,
medium or low.
For more information, see the Business
Model section on page 15.
Our strategy and risk experts
analysed the list of topics, compared
them against our strategic priorities
and risk profile and assessed their
impact on PhosAgro’s value chain.
The impact of material aspects
on our value chain from mine to plate
was rated as high, medium or low.
When assessing the degree of impact
on processes under our control
such as product development and
manufacturing, purchase and mining
of mineral resources, logistics and
sales, we took into account the scale
of an actual and potential impact
and the nature of the assessed topic
with due regard to industry specifics.
With the application of our products
seen as an important stage in value
creation, we assessed the effect
of this element on the selection
of material topics by analysing both
the Company’s impact on the end
consumer and customer needs,
expectations and requirements with
regard to our products and practices.
To illustrate our approach to impact
assessment, let us look at the GRI
404 Training and Education. For this
topic, we rated the impact as high
at every stage of the value chain
due to an important role our highly
qualified staff plays along the way
from product development to sales.
As regards the application stage,
we assume that the customer
gets a 2-in-1 product, including
a fertilizer and our service expertise
(training, agronomic advice and
support). Employees are also
directly interested in improving their
professional qualifications as a means
of facilitating their career development
in the Company and obtaining
a competitive edge in the labour
market. Personal development tools
help employees to harmoniously
develop their skills in other areas
of interest. Hence, relevant
competencies and skills acquired,
in particular, as part of the provided
training are highly relevant.
KEY ASPECTS OF 2023 REPORTING
THAT DESERVE A SPECIAL MENTION
1. Material topics disclosed
in the 2022 Annual Report are still
relevant in 2023.
2. Our work to define material topics
resulted in a materiality list based
on the entire range of stakeholder
interests and opinions related
to the Company’s disclosures.
3. 45 GRI indicators underwent
external independent audit
by Technologies of Trust – Audit
JSC providing limited assurance.
Notably, we did not receive
any communications from
stakeholders via the hot line and
email (esg@phosagro.ru and
ir@phosagro.ru) in 2023.
For more information, see the GRI Content
Index section on page 358.
GRI CONTENT INDEX: ADDITIONAL INFORMATION
GRI 3-1
APPROACH TO DEFINING
MATERIAL TOPICS
In 2022 and 2023, PhosAgro revised the
Regulations on Collecting, Processing
and Presenting Non-Financial Reporting
Data in accordance with GRI standards,
including the GRI Universal Standards
updated in 2021. The Regulations
include GRI-compliant data collection
forms for the Report and establish
approach to defining material topics
based on double materiality. This
approach relies on the review of the
impact that social, economic, regulatory
and governance and/or environmental
factors or aspects have on the
Company and vice versa.
In 2023, the Company added the
following new sources of information
to the materiality analysis process:
STEPS TO SELECT MATERIAL TOPICS
feedback and comments received
during the RSPP public assurance
process, as well as opinions of
external experts on the quality of the
Company’s reports and its compliance
with the best market practices, in
particular, opinions of experts from
Telegram channels.
1
2
3
Identifying the source of data
for selecting material topics and
assessing respective impacts
Short-listing material topics
Approving the final list of
material topics
• Checking the selected topics
for relevance to information users
and against expert opinions
• Selection of GRI topics rated above
1 (see Appendix 1)
• Approving the final list of material
topics by the Strategy and
Sustainable Development
Committee
• Review of material topics from
• Assessment of each topic’s
the perspective of the corporate
strategy, risks, opportunities and the
Company’s business model
• Stakeholder surveys (within the
Company)
–
materiality:
–
for the Company and its
stakeholders (including
investors);
from the perspective of industry
standards and ratings
• Survey of investors’ opinions on
• Materiality assessment of
negative and positive impacts and
assessing the materiality of each
impact in the value chain
• Assessment of each topic’s
materiality on a scale from 0 to 3
material topics
• Analysis of global and local ESG
ratings, rankings and standards
• Review of material topics as per the
SASB industry standard
• Review of comments and
suggestions from external experts,
including RSPP
• Reports on long-term trends and
strategies issued by major analytical
agencies, such as the Higher School
of Economics, Skolkovo, McKinsey,
the National ESG Alliance, etc.)
• Analysis and prioritising of the UN
SDGs
• Survey of external stakeholders,
including review of complaints and
queries received via the PhosAgro hot
line and e-mail
368
369
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Impact on the value chain
Impact on the value chain
High
Medium
Low
Impact degree
Mineral resources
Production
Logistics
Sales
Application
Average score Related risks
UN SDGs
2.80 Strategic planning, production, project, sanctions, interest
rate, credit, currency risks
2.80 Strategic planning, production, project, sanctions, interest
rate, credit, currency risks
2.76 Climate, environmental, regulatory risks
2.76 Climate, environmental, regulatory risks
2.67 HR, health and safety risks
2.67
Environmental, regulatory risks
2.65
Production, climate risks
2.54 Failure to deliver on SDGs and ESG, climate, sanctions risks
2.43 Commodity, corruption, sanctions risks
2.43 Environmental, regulatory risks
2.40 Strategic planning, sanctions, risks
2.35
Failure to deliver on SDGs, and ESG environmental risks
2.33 Environmental, regulatory risks
2.31 HR, business process risks
№
1
2
3
4
5
6
7
8
9
10
11
12
13
Material topics
Corresponding GRI standard
Economic impact
201 Economic performance
Product
development
Share capital
201 Economic performance
Climate
Economic impact
305 Emissions
Air
305 Emissions
Industrial safety
403 Occupational health and safety
Waste
306 Waste
Energy efficiency
302 Energy
Contributing to local
communities
Economic impact
203 Indirect economic impacts
Supply chain
204 Procurement practices
Water
303 Water and effluents
Personnel development and
human rights
Economic impact
202 Market presence
Supplier ESG evaluation
308 Supplier environmental
assessment
Biodiversity
304 Biodiversity
Double
Personnel development and
human rights
402 Labor/management relations
370
371
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report №
Double
Material topics
Corresponding GRI standard
Contributing to local
communities
413 Local communities
Product
development
14
Employment
401 Employment
Double
Personnel development and
human rights
405 Diversity and equal opportunity
15
Motivation and training
404 Training and education
Impact on the value chain
Mineral resources
Production
Logistics
Sales
Application
Average score Related risks
UN SDGs
2.31
Social risks
2.18 Social, HR risks
2.12 HR risks
2.05 HR risks
Double
Supplier ESG evaluation
414 Supplier social assessment
2.01
Failure to deliver on SDGs and ESG
16
17
18
19
20
Anti-corruption
205 Anti-corruption
Anti-competitive behavior
206 Anti-competitive behavior
Tax policy
207 Tax
Information security
410 Security practices
Customers and product
management
417 Marketing and labelling
Other material topics subject to mandatory disclosure:
21
22
Corporate governance
principles
Research and education
–
–
372
373
1.96 Corruption risks
1.96 Reputational risks
1.81
Tax risks
1.75
Information and economic security risks
1.59 Commodity risks
– Corruption and Reputational risks
–
Strategic planning,climate and regulatory risks
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report GRI 201-3
The Company has a voluntary non-profit
union of pensioners (veterans).
As at 31 December 2023, the union
had more than 11.000 members.
It operates in accordance with collective
bargaining agreements and an annual
plan including leisure activities
for unemployed pensioners (clubs
and sports competitions for veterans
of various age groups), celebrations
of professional and public holidays,
jubilees and wedding anniversaries.
Support to union members includes:
• one-off termination allowance;
• annual financial aid linked
to anniversaries (50th birthday
and every five years afterwards),
Day of the Older Persons, Chemist’s
Day, Victory Day, 8th of March;
• a one-off payment in case
of a pensioner’s decease;
• financial aid associated
with expensive treatment
or decease of relatives (family
members);
• annual paid tours to corporate
health resorts, including
for treatment purposes.
Defined benefit plan obligations and other retirement plans, RUB mln
GRI 201-3
№ Region
Retirement-related obligations (other than employee
benefit obligations)
1
Saratov region
Payment of retirement benefits
Merit benefit plans
Financial aid to retired former employees
Total
2
Murmansk
region
Payment of retirement benefits
Merit benefit plans
Financial aid to retired former employees
Total
3
Leningrad region
Payment of retirement benefits
Merit benefit plans
Financial aid to retired former employees
Total
4
Vologda region
Payment of retirement benefits
Merit benefit plans
Financial aid to retired former employees
Total
5
Total
Payment of retirement benefits
Merit benefit plans
Financial aid to retired former employees
Total
Actual pension payments
2021
1.620
0.000
7.640
9.260
43.860
0.000
88.880
132.740
0.710
0.000
19.750
20.460
11.010
19.150
73.190
103.340
57.200
19.150
189.450
265.800
2022
2.770
0.000
16.720
19.490
39.210
0.000
148.830
188.040
2.680
0.000
31.650
34.320
13.050
21.380
119.930
154.370
57.710
21.380
317.130
396.220
2023
3.290
0.000
21.030
24.360
40.204
0.000
157.736
197.940
5.280
0.000
30.100
35.590
14.030
23.590
120.800
158.430
62.810
23.590
329.670
416.310
374
375
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report GRI 207-4
Tax payments, RUB mln.
Item
VAT1
Personal income tax
Social contributions
MET
Property tax
Pollution fees
Land tax
Water use charges
Transport tax
Water tax
Regular subsoil use fees
Other taxes
Tax fines and penalties
Unified tax account2
Dividend income tax
Item
VAT 1
Personal income tax
Social contributions
MET
Property tax
Pollution fees
Land tax
Water use charges
Transport tax
Water tax
Regular subsoil use fees
Other taxes
Tax fines and penalties
Unified tax account2
Dividend income tax
Group
Russia
Poland
Switzerland
France
Germany
Serbia
2021
2022
2023
2021
2022
2023
11 813
20 425
17 700
12 520
21 650
17 700
(4 298)
(7 324)
(5 508)
(3 985)
(7 199)
(5 508)
(7 332)
(9 902)
(11 822)
(6 896)
(9 595)
(11 822)
(3 391)
(8 028)
(9 873)
(3 391)
(8 028)
(9 873)
(1 025)
(1 737)
(2 067)
(1 023)
(1 737)
(2 067)
(207)
(229)
(50)
(15)
(3)
(0)
(46)
(4)
(1 591)
(187)
(226)
(56)
(17)
(4)
0
(19)
(8)
0
(1)
(200)
(229)
(50)
(15)
(3)
(0)
(33)
(4)
(203)
(194)
(64)
(18)
(5)
0
(22)
(4)
(53)
(608)
(1 591)
(187)
(226)
(56)
(17)
(4)
0
(15)
(8)
0
(1)
(203)
(194)
(64)
(18)
(5)
0
(22)
(4)
(53)
(608)
2021
(524)
(20)
(28)
–
–
–
–
–
–
–
–
–
–
–
–
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
(108)
(13)
(14)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(178)
(707)
(187)
(285)
(53)
(238)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(197)
(447)
(11)
(37)
(11)
(21)
–
–
–
–
–
–
–
–
(3)
–
–
–
–
–
–
–
–
–
–
–
(1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
149
(27)
(18)
148
(15)
(4)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
35
–
(5)
–
(1)
(7)
–
–
–
–
–
(1)
–
–
–
30
–
(1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Lithuania
Romania
Africa
Brazil
Singapore
Cyprus
Finland
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
–
(13)
(10)
–
–
–
–
–
–
–
–
–
–
–
–
–
(5)
(5)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(96)
(1)
(8)
(43)
–
(7)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
103
(5)
(99)
(5)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(16)
(10)
–
–
–
–
–
–
–
–
–
(5)
(4)
–
–
–
–
–
–
–
–
(8)
(3)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(31)
(33)
–
(16)
(12)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2)
(1)
–
(1)
–
–
–
–
–
–
–
–
–
–
2
(1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
Information on input/output VAT is presented on a net basis: the amount was obtained by offsetting VAT paid and refunded by PhosAgro Group
companies in each jurisdiction.
2 As of 1 January 2023, the Russian Federation introduced a new mandatory procedure for the assessment and payment of taxes and insurance
contributions. The procedure provides for every taxpayer to have the so-called single tax account, which is to be replenished with a single tax
payment before the tax payment deadline. The amount credited to the account is then distributed to cover the taxpayer’s liabilities.
376
377
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Country-by-country reporting
Tax jurisdiction
Name of the resident entities
Primary activity of the organization
Russian Federation
PhosAgro, PJSC
Apatit, JSC
Tirvas, LLC
Gornyy tsekh, LLC
Teleset, LLC
Tsentr stroitelnyh materialov, LLC
Aeroport, JSC
Korporativnoe pitanie, LLC
PromTransPort, LLC
Mekhanik, LLC
PhosAgro-Region, LLC, PhosAgro-Oryol, LLC, PhosAgro-Belgorod,
LLC, PhosAgro-Volga, LLC, PhosAgro-Lipetsk, LLC, PhosAgro-Kursk,
LLC, PhosAgro-Don, LLC, PhosAgro-Kuban, LLC, PhosAgro-Stavropol,
LLC, PhosAgro-Tambov, LLC, PhosAgro-Severo Zapad, LLC
Smart Balk Terminal, LLC
NIUIF, JSC
Trading House PhosAgro, LLC
RBTS PhosAgro, LLC
ITS PhosAgro, LLC
PhosAgro-Service, LLC
PhosAgro-Sibir, LLC (from 01.09.2021)
Tirvas OP, LLC (from 16.12.2021)
Aeroport Khibiny, LLC (from 29.04.2022)
PhosAgro Americas
PhosAgro Deutschland GmbH(until 31.03.2022)1
Phosint Trading Limited Ltd (until 31.03.2022)1
Phosint Ltd (until 31.03.2022)1
Okmus Oy(until 31.03.2022)1
UAB PhosAgro Baltic(until 31.03.2022)1
PHOSAGRO POLSKA Sp.z o.o.(until 31.03.2022)1
Parent company
Core production
Social services
Capital mining operations
Social services
Repair services
Social services
Social services
Transportation services
Repair services
Domestic trader
Stevedoring services
R&D
Trading
Service company
Service company
Service company
Domestic trader
Social services
Social services
Service company
Foreign trader
Foreign trader
Holding company
Holding company
Foreign trader
Foreign trader
PhosAgro Balkans SRL Romania (from 01.09.2020 until 31.03.2022)1
Foreign trader
Phosagro Balkans d.o.o. Beograd (until 31.03.2022)1
Phosagro Asia Pte Ltd (until 31.03.2022)1
Bulk Terminal Kotka Oy (until 31.03.2022)1
Logifert Oy (until 31.03.2022)1
Phosagro France SAS (until 31.03.2022)1
PhosAgro Trading SA (until 31.03.2022)1
Foreign trader
Foreign trader
Service company
Service company
Foreign trader
Foreign trader
Brazil
Germany
Cyprus
Lithuania
Poland
Romania
Serbia
Singapore
Finland
France
Switzerland
PhosAgro Logistics AG (until 31.03.2022)1
Logistics and distribution
South Africa
PhosAgro South Africa Proprietary Limited (from 01.11.2020 until
31.03.2022)1
PhosAsset GmbH (until 31.03.2022)1
Holding company
Foreign trader
1
In March 2022, the Group lost control over all the foreign companies of the Group
378
379
GRI 401-1
New hires
Region
Vologda region
Total
Saratov region
Total
Leningrad region
Total
Moscow
Total
Murmansk region
Total
Other
Total
Men, total
Women, total
Total
Region
Vologda region
Total
Saratov region
Total
Leningrad region
Total
Moscow
Total
Murmansk region
Total
Other
Total
Men, total
Women, total
Total
Gender
under 30 years
30–50 years
above 50 years
Share, %
2021
M
F
M
F
M
F
M
F
M
F
M
F
284
190
474
68
40
108
117
44
161
4
5
9
364
145
509
16
12
28
853
436
1,289
332
319
651
130
88
218
227
94
321
23
32
55
872
190
1,062
104
41
145
1,688
764
2,452
26
47
73
5
12
17
21
24
45
7
3
10
65
31
96
45
6
51
169
123
292
15.92
13.79
29.70
5.03
3.47
8.50
9.05
4.02
13.07
0.84
0.99
1.83
32.26
9.08
41.33
4.09
1.46
5.55
67.20
32.80
100.00
Gender
under 30 years
30–50 years
above 50 years
Share, %
2022
M
F
M
F
M
F
M
F
M
F
M
F
405
197
602
143
65
208
201
68
269
3
3
6
449
161
610
19
13
32
1,220
507
1,727
526
354
880
310
156
466
374
118
492
20
17
37
1,237
287
1,524
98
26
124
2,565
958
3,523
107
50
157
33
26
59
35
18
53
8
2
10
123
47
170
39
9
48
345
152
497
18.06
10.46
28.52
8.46
4.30
12.75
10.61
3.55
14.16
0.54
0.38
0.92
31.48
8.61
40.09
2.71
0.84
3.55
71.86
28.14
100.00
Total
642
556
1,198
203
140
343
365
162
527
34
40
74
1,301
366
1,667
165
59
224
2,710
1,323
4,033
Total
1,038
601
1,639
486
247
733
610
204
814
31
22
53
1,809
495
2,304
156
48
204
4,130
1,617
5,747
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Region
Vologda region
Total
Saratov region
Total
Leningrad region
Total
Moscow
Total
Murmansk region
Total
Other
Total
Men, total
Women, total
Total
Gender
under 30 years
30–50 years
above 50 years
Share, %
2023
M
F
M
F
M
F
M
F
M
F
M
F
388
199
587
124
67
191
150
56
206
9
8
17
501
145
646
24
12
36
1,196
487
1,683
601
350
951
292
107
399
271
72
343
27
17
44
1,170
290
1,460
69
55
124
2,430
891
3,321
132
48
180
30
12
42
14
7
21
7
1
8
118
45
163
30
11
41
331
124
455
20.53
10.93
31.47
8.17
3.41
11.58
7.97
2.47
10.44
0.79
0.48
1.26
32.77
8.79
41.56
2.25
1.43
3.68
72.47
27.51
100.00
Total
1,121
597
1,718
446
186
632
435
135
570
43
26
69
1,789
480
2,269
123
78
201
3,957
1,502
5,459
380
381
GRI 401-1
Turnover1, %
Region
Vologda region
Total
Saratov region
Total
Leningrad region
Total
Moscow
Total
Murmansk region
Total
Other
Total
Men, total
Women, total
Total
Region
Vologda region
Total
Saratov region
Total
Leningrad region
Total
Moscow
Total
Murmansk region
Total
Other
Total
Men, total
Women, total
Total
Gender
under 30 years
30–50 years
above 50 years
Total
2021
M
F
M
F
M
F
M
F
M
F
M
F
0.57
0.43
1.00
0.15
0.07
0.22
0.30
0.07
0.37
0.02
0.01
0.02
0.95
0.24
1.19
0.06
0.01
0.07
2.04
0.82
2.87
1.35
1.07
2.42
0.36
0.26
0.62
0.57
0.20
0.76
0.07
0.04
0.10
2.57
0.66
3.24
0.38
0.09
0.47
5.29
2.32
7.61
2022
0.11
0.16
0.27
0.04
0.08
0.12
0.04
0.04
0.08
0.01
0.01
0.01
0.21
0.11
0.32
0.28
0.03
0.31
0.69
0.42
1.11
Gender
under 30 years
30–50 years
above 50 years
M
F
M
F
M
F
M
F
M
M
F
0.47
0.31
0.79
0.18
0.07
0.25
0.38
0.10
0.48
0.01
0.01
0.01
0.69
0.24
0.93
0.06
0.01
0.07
1.79
0.74
2.52
0.81
0.72
1.53
0.45
0.21
0.66
0.72
0.19
0.91
0.06
0.05
0.11
2.18
0.57
2.75
0.33
0.07
0.40
4.55
1.81
6.36
0.12
0.09
0.21
0.04
0.06
0.10
0.10
0.05
0.15
0.03
0.01
0.04
0.22
0.09
0.31
0.14
0.02
0.16
0.63
0.32
0.95
2.03
1.66
3.69
0.54
0.41
0.95
0.91
0.31
1.21
0.09
0.05
0.14
3.73
1.01
4.74
0.72
0.13
0.85
8.02
3.57
11.59
Total
1.40
1.12
2.52
0.67
0.33
1.00
1.20
0.34
1.54
0.09
0.07
0.15
3.09
0.91
4.00
0.52
0.10
0.62
6.97
2.87
9.84
1 The calculation of personnel turnover includes voluntary resignations (less retirements) on the grounds of article 77, part 1, clauses 3 and 7 of the
Labour Code of the Russian Federation, and dismissals for employee misconduct on the grounds of article 81, part 1, clauses 5, 6a, 6b, 6e and 7
of the Labour Code of the Russian Federation.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Gender
under 30 years
30–50 years
above 50 years
Total
2023
M
F
M
F
M
F
M
F
M
F
M
F
0.21
0.19
0.39
0.13
0.09
0.22
0.28
0.14
0.42
0.00
0.01
0.01
0.61
0.29
0.90
0.04
0.01
0.05
1.28
0.72
2.00
0.45
0.64
1.09
0.43
0.18
0.61
0.60
0.16
0.77
0.05
0.03
0.09
1.83
0.54
2.37
0.27
0.10
0.37
3.65
1.65
5.30
0.05
0.08
0.13
0.06
0.03
0.09
0.05
0.03
0.08
0.01
0.00
0.01
0.23
0.09
0.32
0.15
0.05
0.20
0.56
0.28
0.84
0.71
0.90
1.62
0.62
0.31
0.93
0.93
0.33
1.27
0.07
0.04
0.11
2.68
0.91
3.59
0.46
0.16
0.61
5.49
2.65
8.14
Region
Vologda region
Total
Saratov region
Total
Leningrad region
Total
Moscow
Total
Murmansk region
Total
Other
Total
Men, total
Women, total
Total
GRI 401-3
Parental leave in the reporting year
Item
Number of employees
entitled to parental leave
Employees on parental
leave
Employees who returned
to work after parental
leave
Employees who returned
to work after parental
leave and stayed at work
12 months after return
Return to work ratio
Retention ratio
2021
2022
2023
M
n/a
14
3
0
F
n/a
818
176
Total
n/a
832
179
159
159
M
n/a
15
2
3
F
n/a
827
198
Total
n/a
842
200
165
168
M
n/a
16
0
1
F
n/a
828
188
Total
n/a
844
188
187
188
60.0
0.0
86.3
88.8
85.6
88.8
40.0
100.0
86.5
93.8
85.5
93.9
0.0
50.0
97.4
94.4
96.9
94.0
Occupational diseases
GRI 403-10
Employee category
Main types of occupational diseases
Causes
Employees
Persistent bilateral sensorineural hearing loss
Cervical radiculopathy of occupational aetiology
Lumbosacral radiculopathy of occupational aetiology
Reflex cervical muscular-tonic syndrome of occupational
aetiology
Reflex cervical muscular-tonic syndrome of occupational
aetiology
Polyneuropathy of the upper and lower limbs of occupational
aetiology
Bilateral humeroscapular periarthrosis (with first-degree joint
function impairment) of occupational aetiology
Osteoarthritis deformans of the shoulder and elbow joints
(with first-degree joint function impairment) of occupational
aetiology
Bilateral medial epicondylitis of the humerus (without joint
function impairment) of occupational aetiology
Cervical myeloradiculopathy of occupational etiology
Vibration syndrome
Workers who are not employees
but whose work and/or
workplace is controlled by the
organization
Total dystrophic upper respiratory tract disease
– rhinopharyngolaryngitis
Persistent bilateral sensorineural hearing loss
Cervical radiculopathy of occupational aetiology
Vibration syndrome
Prolonged exposure to a harmful production factor (industrial
noise)
Physical exertion and functional overstrain of individual organs
and systems in respective locations
Prolonged exposure to a harmful production factor (general/
local vibration)
Exposure to complex chemical aerosols
Prolonged exposure to a harmful production factor (industrial
noise)
Physical exertion and functional overstrain of individual organs
and systems
Prolonged exposure to a harmful production factor (general
vibration)
LIST OF PHOSAGRO GROUP
COMPANIES
1. PhosAgro, PJSC
2. Kirovsk Branch of Apatit, JSC
3. Tirvas, LLC
4. Gorny tsekh, LLC
5. Teleset, LLC
6. Tsentr stroitelnyh materialov, LLC
7. Aeroport, JSC
8. Balakovo Branch of Apatit, JSC
9. Korporativnoe pitanie, LLC
10. PromTransPort, LLC
11. Mekhanik, LLC
12. Volkhov Branch of Apatit, JSC
13. Apatit, JSC
14. PhosAgro-Region, LLC
15. PhosAgro-Oryol, LLC
16. PhosAgro-Belgorod, LLC
17. PhosAgro-Volga, LLC
18. PhosAgro-Lipetsk, LLC
19. PhosAgro-Kursk, LLC
20. PhosAgro-Don, LLC
21. PhosAgro-Kuban, LLC
22. PhosAgro-Stavropol, LLC
23. PhosAgro-Tambov, LLC
24. PhosAgro-SeveroZapad, LLC
25. Smart Bulk Terminal, LLC
26. NIUIF, JSC
27. Trading House PhosAgro, LLC
28. RBTS PhosAgro, LLC
29. ITS PhosAgro, LLC
30. PhosAgro-Service, LLC
31. PhosAgro-Sibir, LLC
32. Tirvas, LLC
33. Khibiny Airport, LLC
382
383
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report SUSTAINABLE DEVELOPMENT INDICATORS CONTENT
INDEX AS PER THE ORDER OF THE MINISTRY
OF ECONOMIC DEVELOPMENT OF RUSSIA¹
№
Indicator
Economic
Page number/Comments
Boundary
№
Indicator
Environmental
Page number/Comments
Boundary
1
2
3
4
5
6
7
8
9
10
11
12
Revenue (or a similar indicator), RUB’000
6
Added value, RUB’000
Net added value, RUB’000
Total R&D expenses, RUB’000
Labour productivity, RUB’000 per person
2021 - 236 776;
2022 - 340 632;
2023 - 249 320
2021 - 209 100;
2022 - 311 093;
2023 - 217 038
p. 118
2021 - 22 951;
2022 - 28 697;
2023 - 20 171
p. 153
Total accrued payments to government (except for fines and
penalties), including, RUB’000:
• Taxes and other charges
• Social contributions
• Other payments to government
Total actual payments to government (except for fines and
penalties), including, RUB’000:
• Taxes and other charges
• Social contributions
• Other payments to government
Share of Russian goods, work and services in the total
procurement volume, %
Share of goods, work and services purchased from SME in the
total procurement volume from Russian organizations, %
р. 90-91 (in terms of income tax)
p. 392-395
2021 - 97,07;
2022 - 97,23;
2023 - 93,24
(Share of local procurement – p. 139)
2021 - 20,55;
2022 - 20,26;
2023 - 30,81
p. 141
Sustainable investments (including green investments),
RUB’000
Item not calculated
Investments into projects aimed at promoting the technological
sovereignty and the structural adaptation of the Russian
economy, RUB’000
Index of economic vulnerability of business and other activities
to climate risks, %
1
1
1
1
1
1
1
2
2
13
14
15
16
17
18
19
20
21
Water consumption from all sources of water supply
Recycled and recirculated water supply
p. 219
p. 220
Total waste water discharged, including untreated waste water
p. 220
Water use efficiency (water use per unit of product)
Specific water consumption, m3 per tonne of
products/RUB
2021 - 0,0010926
2022 - 0,0007614
2023 - 0,0010362
p. 221
р. 211
р. 211
Indicator reduction of waste generation - see the
table below, data for indicator 18.
Total hazard class 1-5 waste generation, including:
• Class 1
• Class 2
• Class 3
• Class 4
• Class 5
Total hazard class 1-5 waste handled, including:
• Disposed waste
• Decontaminated waste
• Buried waste
• Reused waste
• Recycled waste
• Reduction in waste generation
Emission load from stationary pollution sources
p. 215-216
Greenhouse gas emissions
Total expenses for environmental activities, including:
• Atmospheric air protection and climate change prevention
• Waste water collection and treatment
• Waste management
• Conservation of biodiversity and protection of natural areas
22
Consumption of renewable and low-carbon energy
23
Energy efficiency: electricity consumption per unit of net added
value
Social
24
Total payroll expenses, RUB’000
There is no 2023 data obtained with the
methodology approved by Order No. 371; this data
will be provided later
Total — p. 215
The data, including in the directions, can be found
below in the table for indicator 21
PhosAgro Group’s energy consumption, GJ3
see p. 207
Renewable and low-carbon energy consumption, %:
2021 — 1,29%
2022 — 1,26%
2023 — 1,24%
2021 - 11,127
2022 - 7,404
2023 - 11,041
p. 207-208
2021 — 15 772,75
2022 — 20 484,43
2023 — 26 334,95
2
2
2
2
2
2
2
2
2
2
2
2
384
385
1 Order of the Ministry of Economic Development of Russia No. 764 On Approval of Methodological Recommendations for the Preparation of
Sustainable Development Reporting dated 1 November 2023.
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report Indicator
Page number/Comments
Boundary
Total average headcount, including disabled employees, people
2021 – 11,845, including 43 disabled employees
2022 – 12,970, including 52 disabled employees
2023 – 14,290, including 69 disabled employees
Total average monthly pay, RUB’000
including:
• By occupation group
• By gender
• By age group
Total health and safety expenses, including average costs per
employee, RUB’000
Expenses on organising and holding social, fitness, recreational,
and healthcare activities for employees and their families,
RUB’000, %
Number of persons injured as a result of industrial accidents
where lost time of one or more days was involved, including
fatalities, people, %
Total training expenses, including average costs per employee,
RUB’000
Average training hours per year per employee by occupation
group, units
2021 – 106.0
2022 – 128.8
2023 – 150.2
Total:
2021 — 3 841
2022 — 4 977
2023 — 7 435
Total:
2021 — 1 357 500
2022 — 1 703 700
2023 — 2 195 200
2021 — 17; 0,14%
2022 — 8; 0,06%
2023 — 9; 0,06%
Total:
2021 — 235 216
2022 — 271 872
2023 — 262 497
Including
average costs per
employee:
2021 — 13,6
2022 — 21,0
2023 — 18,4
Managers
White-collar
workers
2
2
2
2
2
2
2021
2022
2023
83,2
113,0
109,1
61,7
85,4
73,5
№
Indicator
Governance
Page number/Comments
Boundary
35
36
37
38
39
40
41
42
43
44
Availability of a sustainable development policy and/or other
strategic documents in this area
There is no separate sustainable development strategy or policy, as
PhosAgro’s Strategy to 2025 integrates sustainability principles in all of its
areas of focus
Number of Board of Directors meetings and the attendance rate
259
Total number of directors, including age structure
Number of the Audit Committee meetings and the attendance
rate
Inclusion into sustainable development (ESG) indices and
ratings, number
260
259
26
Number of reported violations of the rights of indigenous
peoples living in the Russian Federation
Not applicable
Share of employees filling positions exposed to high corruption
risks, %
0,3136%
Average hours of anti-corruption training per employee, units
Item not calculated
Number of administrative proceedings against the Company, its
subsidiaries and affiliates for corruption offences
There were no anti-corruption proceedings against the Company (in 3 years)
Share of female managers in the total number of managers,
including members of the Board of Directors (Supervisory
Board)
p. 154, 260
Table for Item 18 “Total hazard class 1–4 waste management, including by category”, kt / net added profit,
reduction in waste generation
Item
2021
2022
2023
Total waste generation (all hazard classes), kt
132,422.01117
120,426.02977
94,626.727750
Change y-o-y, t/RUB '000
0.633
0.387
0.436
Blue-collar workers
104,0
104,0
110,8
Table for Item 21 “Expenditures on environment protection measures”, total, incl. 2, RUB ‘000
Share of employees covered by collective bargaining
agreements in total average headcount, %
Turnover1, %
Total expenses on supporting social programmes not aimed at
employees and their families, including, RUB’000, %
• Charity
• Housing
• Healthcare
• Education
• Support of people in need of social assistance
2021 — 100%
2022 — 100%
2023 — 100%
2021 — 9,08
2022 — 7,29
2023 — 5,88
2021 — 3 323 899
2022 — 8 900 952
2023 — 9 356 293
2
2
2
Item
Total, including
Atmospheric air protection and climate
change mitigation
Waste water collection and treatment
Waste management
Biodiversity conservation and protection
of natural habitats
2021
9,860,700
1,131,694
2,085,932
1,235,974
0
2022
9,126,120
1,267,576
2,234,548
1,613,869
0
2023
11 145 45
1,408,701
2,453,407
1,795,581
0
№
25
26
27
28
29
30
31
32
33
34
386
387
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report SASB
CONTENT INDEX
Code
RT-CH-000.A
EM-MM-000.B
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
RT-CH-150a.1
EM-MM-150a.1
EM-MM-150a.2
EM-MM-160a.1
EM-MM-160a.3
RT-CH-410b.1
Activity metric
Page number/Comment
Production broken down by reporting segments
Total number of employees, percentage contractors
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)
94
152
201
192
215
(1) Total energy consumed, (2) percentage grid electricity, (3) percentage
renewable, (4) total self-generated energy
207
(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
Amount of hazardous waste generated, percentage recycled
Total weight of tailings waste, percentage recycled
Total weight of mineral processing waste, percentage recycled
Description of environmental management policies and practices for
active sites
Percentage of (1) proved and (2) probable reserves in or near sites with
protected conservation status or endangered species habitat
219
217
217
211
212
212
186
The Group’s facilities are not situated in
protected areas or in high biodiversity areas
outside of protected areas.
(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
211
RT-CH-410b.2
Discussion of strategy to (1) manage chemicals of concern and (2)
develop alternatives with reduced human and/or environmental impact
186
388
389
Code
Social
EM-MM-210a.3
RT-CH-210a.1
EM-MM-210b.1
EM-MM-210b.2
EM-MM-310a.2
RT-CH-320a.1
RT-CH-320a.2
RT-CH-540a.1
RT-CH-540a.2
Governance
EM-MM-510a.1
EM-MM-510a.2
RT-CH-530a.1
Activity metric
Page number/Comment
Discussion of engagement processes and due diligence practices with
respect to human rights, indigenous rights, and operation in areas of
conflict
Discussion of engagement processes to manage risks and opportunities
associated with community interests
Discussion of process to manage risks and opportunities associated with
community rights and interest
Number and duration of non-technical delays
28
230
230
73
Number and duration of strikes and lockouts
No cases
(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
Process Safety Incidents Count (PSIC), Process Safety Total Incident Rate
(PSTIR), and Process Safety Incident Severity Rate (PSISR)
Number of transport incidents
175
173
175
174
Description of the management system for prevention of corruption and
bribery throughout the value chain
292, 302
Production in countries that have the 20 lowest rankings in Transparency
International’s Corruption Perception Index
The Company does not carry out production
in countries that have the 20 lowest rankings
in Transparency International’s Corruption
Perception Index
Discussion of corporate positions related to government regulations
and/or policy proposals that address environmental and social factors
affecting the industry
293
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report 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 target
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
252
193
195
195
196
195
195
70
201
201
192
TCFD-REPORT
For more information on GHG
emissions and climate risks,
see the TCFD report 2020
изменение климата
GLOSSARY
AN – ammonium nitrate
ANBP – apatite-nepheline beneficiation
plant
ANSES – French Agency for Food,
Environmental and Occupational Health
& Safety
BAT – best available technique
bln – billion
Capex – capital expenditure
CDP – Carbon Disclosure Project
CIS – Commonwealth of Independent
States
CJSC – closed joint-stock company
CO2 – carbon dioxide
COVID-19 – сoronavirus disease 2019,
the pandemic caused by severe acute
respiratory syndrome coronavirus 2
(SARS-CoV-2)
DAP – diammonium phosphate
DROZD – Educated and Healthy Children
of Russia programme
EMERCOM – Ministry for Civil Defence,
Emergencies and Elimination of
Consequences of Natural Disasters
IPCC – in-pit crushing and conveying at
the Vostochny mine
ESG – environmental, social, and
governance
IRR – internal rate of return
IT – information technology
ESPP – European Sustainable
Phosphorus Platform
IUPAC – International Union of Pure and
Applied Chemistry
EU – European Union
JSC – joint-stock company
FAO – Food and Agriculture Organisation
kg – kilogram
GDP – gross domestic product
KPI – key performance indicator
GDR – global depositary receipt
kWh – kilowatt-hour
GLOSOLAN — Global Soil Laboratories
Networks; supporting the GLOSOLAN
by developing research capacities
and strengthening the Regional Soil
Laboratories Networks (RESOLAN)
LSE – London Stock Exchange
LTIFR – lost time injury frequency rate
MAP – monoammonium phosphate
GRI – Global Reporting Initiative
MCP – feed monocalcium phosphate
HR – human resources
mg – milligram
HSE – health, safety and environment
mln – million
IFA – International Fertilizer Association
MOP – muriate of potash
IFRS – International Financial Reporting
Standards
MW – megawatt
EBITDA – earnings before interest, taxes,
depreciation and amortisation
IMF – International Monetary Fund
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NIUIF – Samoilov Scientific
Research Institute for Fertilizers and
Insectofungicides
REACH – Registration, Evaluation,
Authorisation and Restriction of
Chemicals
Strategy to 2025 – PhosAgro’s
Development Strategy to 2025
NO2 – nitrogen dioxide
NPK – nitrogen-phosphorus-potassium
fertilizer
OPEC – Organisation of the Petroleum
Exporting Countries
Rospotrebnadzor – Federal Service
for Surveillance on Consumer Rights
Protection and Human Wellbeing
t – metric tonne
ths – thousand
UN – United Nations
Rostekhnadzor – Federal Service for the
Supervision of Environment, Technology
and Nuclear Management
UNESCO – United Nations Educational,
Scientific and Cultural Organisation
P2O5 – phosphoric pentoxide
RSPP – Russian Union of Industrialists
and Entrepreneurs
USA – United States of America
PhosAgro Group – PJSC PhosAgro and
its subsidiaries and affiliates
RUB – Russian rouble
USD – United States dollar
VAT – value-added tax
PJSC – public joint-stock company
PwC – PricewaterhouseCoopers
R&D – research and development
SDG – UN Sustainable Development
Goal
VOC – volatile organic compound
SMEs – small and medium-sized
enterprises
RAFP – Russian Association of Fertilizer
Producers
SO2 – sulphur dioxide
STPP – sodium tripolyphosphate
RAS – Russian Accounting Standards
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CONTACTS
INVESTOR RELATIONS
REGISTRAR
SUSTAINABILITY CONTACTS
Andrey Serov
Head of Investor Relations
Tel.: +7 (495) 231-31-15
Email: ir@phosagro.ru
CORPORATE SECRETARY
Sergey Samosyuk
JSC Reestr
20 B. Balkansky Lane, bldg. 1, Moscow,
Russia
Sergey Kudryashov
Head of Sustainable Development
Department
Tel.: +7 (495) 617 01 01
Fax: +7 (495) 680 80 01
Email: reestr@aoreestr.ru
Website: www.aoreestr.ru
Tel.: +7 (495) 231-27-47
Email: esg@phosagro.ru
Irina Lukina
Senior specialist, Sustainable
Development Department
Tel.: +7 (495) 232-96-89, ext. 2720
Email: esg@phosagro.ru
Tel.: +7 (495) 232-96-89, ext. 2712
Email: ks@phosagro.ru
CONTACTS FOR EMPLOYEES AND
POTENTIAL EMPLOYEES
ADDRESS PJSC PHOSAGRO
Dmitry Borodich
HR and Social Policy Director
55/1 Leninsky Prospekt, bldg. 1, Moscow
119333, Russia
Tel.: +7 (495) 231-31-15
Email: info@phosagro.ru
CONTACTS FOR MEDIA
Andrey Podkopalov
Director of Information Policy
Tel.: +7 (495) 232 96 89, ext. 26 51
Timur Belov
Press Officer
Tel.: +7 (495) 232 96 89, ext. 26 52
Email: pr@phosagro.ru
Tel.: +7 (495) 232 96 89
Fax: +7 (495) 956 19 02
AUDITOR
JSC Technologies of Trust – Audit
Ferro-Plaza Business Centre, 14/3
Krzhizhanovsky street, bldg. 5/1,
Moscow, Russia
Tel.: +7 (495) 967 60 00
Fax: +7 (495) 967 60 01
Website: www.tedo.ru
JSC Unicon
8 Preobrazhenskaya Ploshchad, Preo 8
Business Centre, Moscow, Russia
Tel.: +7 (495) 797 56 65,
Fax: +7 (495) 797 56 60
Website: www.unicon.ru
2023APPENDICESSHARE CAPITALCORPORATE GOVERNANCE PERFORMANCE REVIEWSTRATEGIC REPORTCOMPANY PROFILEIntegrated Report