PJSC "PhosAgro"
IFRS® Accounting Standards
Consolidated Financial Statements and
Independent Auditor's Report
31 December 2023
PJSC "PhosAgro"
Contents | ||
Independent Auditor's report | ||
Consolidated Statement of Profit or Loss and Other Comprehensive Income | .............................................1 | |
Consolidated Statement of Financial Position | 2 | |
Consolidated Statement of Cash Flows | 3 | |
Consolidated Statement of Changes in Equity | 4 | |
Notes to the Consolidated Financial Statements | ||
1 | Background | 5 |
2 | Basis of preparation | 6 |
3 | Significant accounting policies | 7 |
4 | Fair value determination | 12 |
5 | Revenues | 13 |
6 | Cost of Group products sold | 13 |
7 | Administrative and selling expenses | 14 |
8 | Taxes, other than income tax | 14 |
9 | Other expenses, net | 14 |
10 | Finance income and finance costs | 15 |
11 | Income tax expense | 15 |
12 | Property, plant and equipment | 16 |
13 | Right-of-use assets | 17 |
14 | Investments in associates and joint ventures | 18 |
15 | Deferred tax assets and liabilities | 18 |
16 | Other non-current assets | 19 |
17 | Other financial assets | 20 |
18 | Inventories | 21 |
19 | Trade and other receivables | 21 |
20 | Cash and cash equivalents | 22 |
21 | Equity | 22 |
22 | Earnings per share | 23 |
23 | Loans and borrowings | 24 |
24 | Lease liabilities | 26 |
25 | Defined benefit obligations | 26 |
26 | Trade and other payables | 27 |
27 | Financial risk management | 27 |
28 | Commitments | 31 |
29 | Contingencies | 31 |
30 | Related party transactions | 32 |
31 | Significant subsidiaries of the Group | 33 |
32 | Subsequent events | 33 |
Joint-Stock Company | Ferro-Plaza Business Centre, |
"Technologies of Trust - Audit" | 14/3 Krzhizhanovsky street, bldg. 5/1, |
("Technologies of Trust - Audit" JSC) | Akademichesky municipal district, |
Moscow, Russian Federation, 117218 | |
www.tedo.ru | T: +7 495 967 60 00 |
Independent Auditor's Report
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 Public Joint Stock Company "PhosAgro" (PJSC "PhosAgro") and its subsidiaries (together - the "Group") as at
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.
What we have audited
The Group's consolidated financial statements comprise:
- the consolidated statement of profit or loss and other comprehensive income for 2023;
- the consolidated statement of financial position as at 31 December 2023;
- the consolidated statement of cash flows for 2023;
- the consolidated statement of changes in equity for 2023; and
- the notes to the consolidated financial statements, which include material accounting policy information and other explanatory information.
Basis for qualified opinion
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, Operating Segments. Disclosing the omitted segment information within this Basis for qualified opinion section is not practicable as it would be unduly voluminous in relation to this auditor's report.
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Independence
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 Accountants (IESBA Code) and the ethical requirements of the Auditor's Professional Ethics Code and Auditor's Independence Rules that are relevant to our audit of the consolidated financial statements in the Russian Federation. We have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 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.
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Key audit matter | How our audit addressed the key audit matter | ||||
Recoverability of deferred tax assets | |||||
Refer to Note 15 to the consolidated financial | We performed the following audit procedures to address the | ||||
statements of the Group | key audit matter: | ||||
In the consolidated statement of financial | • We analysed the management's plan in respect of | ||||
position as at 31 December 2023, the Group | utilisation of the deferred tax assets and the process of | ||||
recognised deferred tax assets in the amount of | projecting the future taxable profit. | ||||
RUB 9,751 million in respect of the Group | • We assessed the current status of implementation of the | ||||
companies' accumulated tax loss carried | |||||
management's plan to utilise the deferred tax assets. | |||||
forward. | |||||
Under IAS 12, Income Taxes, a deferred tax | • | We received the projection of the future taxable profit | |||
prepared by the Group's management and reviewed, on | |||||
asset in respect of unused tax losses shall be | |||||
a sample basis, the assumptions related to future | |||||
recognised to the extent that it is probable that | |||||
future taxable profit will be available against | income and expenses reflected in the projection, | ||||
which the unused tax losses can be utilised. | including their comparison to the industry and market | ||||
The Group's management analysed probability | trends. We also assessed the quality of the Group's | ||||
management projections by comparing the previous | |||||
of receiving future taxable profits by Group | |||||
periods projections to actual results. | |||||
companies and concluded that the deferred tax | |||||
assets are recoverable. This analysis was | • | We assessed, on a sample basis, the mathematical | |||
based on management's plans in respect of | accuracy of calculations applied by the Group's | ||||
recoverability of the Group's deferred tax assets | |||||
management. | |||||
and projections of the future taxable profit. | |||||
• | We assessed whether the management used | ||||
We focus our audit on the existence of sufficient | |||||
reasonable judgements related to applying the | |||||
evidence that the Group's deferred tax assets are | |||||
mechanisms available to the Group to recover the | |||||
recoverable because the Group's management | |||||
deferred tax assets, among other things, by engaging | |||||
applied significant judgements and estimates in | |||||
our taxation experts. | |||||
respect of available mechanisms for recovery of | |||||
deferred tax assets in the Group companies with | • | We obtained and analysed written representations of | |||
accumulated loss, and in respect of the amount of | the Group's management in relation to their assessment | ||||
the future taxable profit and timing when it would | of recoverability of deferred tax assets. | ||||
be available. | |||||
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 | |||||
for 2023 does not guarantee that future events which are | |||||
inherently uncertain will not lead to a significant change in | |||||
these estimates. | |||||
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
Overview
Materiality | Overall Group materiality: Russian Roubles ("RUB") 5,730 million, which represents | ||
5% of profit before tax. | |||
Group scoping | • | We conducted audit procedures on the entire financial information of the | |
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. | |||
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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 | We chose profit before tax as the benchmark because, in our view, it is the | |
benchmark applied | 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.
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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.
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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)
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PJSC "PhosAgro"
Consolidated Statement of Financial Position as at 31 December 2023
31 December | 31 December | ||
RUB million | Note | 2023 | 2022 |
Assets | |||
Property, plant and equipment | 12 | 308,663 | 274,522 |
Advances issued for property, plant and equipment | 10,337 | 9,270 | |
Deferred tax assets | 15 | 9,751 | 7,903 |
Other non-current assets | 16 | 8,262 | 8,546 |
Non-current spare parts | 8,059 | 5,125 | |
Right-of-use assets | 13 | 7,240 | 4,277 |
Intangible assets | 2,773 | 2,099 | |
Catalysts | 2,667 | 1,965 | |
Investments in associates and joint ventures | 14 | 636 | 592 |
Non-current assets | 358,388 | 314,299 | |
Trade and other receivables | 19 | 66,362 | 75,741 |
Inventories | 18 | 48,468 | 39,349 |
Cash and cash equivalents | 20 | 29,163 | 13,356 |
VAT and other taxes receivable | 10,119 | 12,565 | |
Security payment for windfall tax | 1(b) | 6,355 | - |
Other financial assets | 17 | 5,083 | 210 |
Income tax receivable | 1,703 | 93 | |
Current assets | 167,253 | 141,314 | |
Total assets | 525,641 | 455,613 | |
Equity | |||
Share capital | 21 | 372 | 372 |
Share premium | 7,494 | 7,494 | |
Retained earnings | 144,658 | 190,664 | |
Actuarial losses | (1,003) | (968) | |
Equity attributable to shareholders of the Company | 151,521 | 197,562 | |
Equity attributable to non-controlling interests | 84 | 158 | |
Total equity | 151,605 | 197,720 | |
Liabilities | |||
Loans and borrowings | 23 | 161,710 | 109,784 |
Deferred tax liabilities | 15 | 13,603 | 17,820 |
Lease liabilities | 24 | 2,818 | 1,660 |
Defined benefit obligations | 25 | 1,129 | 1,050 |
Non-current liabilities | 179,260 | 130,314 | |
Loans and borrowings | 23 | 86,429 | 80,974 |
Dividends payable | 54,919 | 82 | |
Trade and other payables | 26 | 42,653 | 39,412 |
Windfall tax payable | 1(b) | 6,355 | - |
VAT and other taxes payable | 2,799 | 5,632 | |
Lease liabilities | 24 | 1,413 | 1,276 |
Income tax payable | 208 | 203 | |
Current liabilities | 194,776 | 127,579 | |
Total equity and liabilities | 525,641 | 455,613 | |
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.
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PJSC "PhosAgro"
Consolidated Statement of Cash Flows for 2023
RUB million | Note | 2023 | 2022 |
Cash flows from operating activities | |||
Operating profit | 150,756 | 228,340 | |
Adjustments for: | |||
Depreciation and amortisation | 6, 7 | 32,282 | 29,539 |
Loss on disposal of property, plant and equipment and intangible assets | 9 | 365 | 429 |
Operating profit before changes in working capital | 183,403 | 258,308 | |
Decrease in trade and other receivables1 | 6,063 | 7,498 | |
Increase in inventories, catalysts and non-current spare parts | (11,624) | (12,308) | |
Decrease in trade and other payables1 | (46) | (3,131) | |
Cash flows from operations before income tax and interest paid | 177,796 | 250,367 | |
Income tax paid | (29,777) | (41,811) | |
Finance costs paid | (7,378) | (5,275) | |
Windfall tax security payment | 1 (b) | (6,355) | - |
Cash flows from operating activities | 134,286 | 203,281 | |
Cash flows from investing activities | |||
Finance income | 2,000 | 3,783 | |
Acquisition of property, plant and equipment and intangible assets | (64,232) | (63,021) | |
Borrowing cost capitalised paid | 12 | (1,896) | (976) |
Advances issued for right-of-use assets | (94) | (850) | |
Cash and cash equivalents disposed as a result of loss of control over | |||
foreign subsidiaries | - | (36,729) | |
Loans issued | 17 | - | (3,130) |
Proceeds from disposal of financial assets measured at fair value through | |||
profit or loss | - | 1,778 | |
Other | 144 | 159 | |
Cash flows used in investing activities | (64,078) | (98,986) | |
Cash flows from financing activities | |||
Proceeds from borrowings, net of transaction costs | 23 | 172,906 | 57,171 |
Repayment of borrowings | 23 | (155,306) | (23,926) |
Refund of dividends paid2 | 17,256 | 9 | |
Dividends paid to shareholders of the Company | 21 | (94,509) | (142,120) |
Lease payments | 24 | (1,416) | (1,429) |
Dividends paid to non-controlling interests | (131) | - | |
Cash flows used in financing activities | (61,200) | (110,295) | |
Net increase/(decrease) in cash and cash equivalents | 9,008 | (6,000) | |
Cash and cash equivalents at 1 January | 13,356 | 21,710 | |
Effect of exchange rates fluctuations | 6,799 | (2,354) | |
Cash and cash equivalents at 31 December | 20 | 29,163 | 13,356 |
- Changes in trade and other receivables and changes in trade and other payables include effect of foreign exchange differences from operating activities.
- The Group received cash refund from depositories paid as dividends to parties who were entitled to receive them, but didn't receive dividends due to reasons beyond the depositories' control.
The consolidated 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.
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OAO PhosAgro published this content on 26 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2024 17:07:00 UTC.