PhosAgro : 4Q and FY 2020 Financial Statements

PJSC "PhosAgro"

Consolidated Financial Statements for 2020

PJSC "PhosAgro"

Contents

Independent Auditors' Report 3

Consolidated Statement of Profit or Loss and Other Comprehensive Income 7

Consolidated Statement of Financial Position 8

Consolidated Statement of Cash Flows 9

Consolidated Statement of Changes in Equity 10

Notes to the Consolidated Financial Statements 11

Independent Auditors' Report

To the Shareholders and Board of Directors of PJSC "PhosAgro"

Opinion

We have audited the consolidated financial statements of PJSC "PhosAgro" (the "Company") and its subsidiaries (the "Group"), which comprise the consolidated statement of financial position as at 31 December 2020, the consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising significant accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 31 December 2020, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS).

Basis for Opinion

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

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.

Audited entity: PJSC "PhosAgro"	Independent auditor: JSC "KPMG", a company incorporated under the Laws of
the Russian Federation, a member firm of the KPMG global organization of
Registration number in the Unified State Register of Legal Entities:	independent member firms affiliated with KPMG International Limited, a private
No. 1027700190572.	English company limited by guarantee.
Moscow, Russia	Registration number in the Unified State Register of Legal Entities:
No. 1027700125628.
Member of the Self-regulatory Organization of Auditors Association
"Sodruzhestvo" (SRO AAS). Principal registration number of the entry in the
Register of Auditors and Audit Organizations: No. 12006020351.

PJSC "PhosAgro"

Independent Auditors' Report Page 2

Valuation of deferred tax assets
Please refer to the Note 18 in the consolidated financial statements.
The key audit matter	How the matter was addressed in our audit
The Group has recognised significant deferred tax assets in respect of tax losses. The Group regularly considers possible options for utilization of deferred tax asset and assesses recoverability based on the most likely utilization option. The recovery of the deferred tax assets also depends on achieving sufficient taxable profits in the future. The assessment of the recoverability of tax losses depends on the projected profitability of the Group, which is formed on the basis of planned sales volumes and prices for sold products and expected inflation rates and exchange rates. There is inherent uncertainty involved in forecasting timing and quantum of future taxable profits, which support the extent to which tax assets are recognised. Therefore, this is the key judgmental area our audit is concentrated on.	Our audit procedures included the following: We considered the Group's assessment of possible options for the utilization of deferred tax asset and its assessment of the likelihood of those options. We tested the accuracy of the taxable profits forecast model used to estimate the recoverability of deferred tax assets. We evaluated the appropriateness of management's key assumptions and estimates used by management to assess the likelihood of generating sufficient future taxable profits to support the recognition of deferred tax assets, taking into account external market indicators such as trends in prices for chemical fertilizers, inflation rates and exchange rates. Using KPMG tax specialists, we considered the appropriateness of the application of relevant tax legislation by the Group, in relation to the utilization of tax losses, including analysis of the most likely option for their utilization.

Other Information

Management is responsible for the other information. The other information comprises the information included in the Annual report but does not include the consolidated financial statements and our auditors' report thereon. The Annual report is expected to be made available to us after the date of this auditors' report.

Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.