INTERNATIONAL ACCOUNTING STANDARD No. 34 CONSOLIDATED CONDENSED INTERIM (NINE MONTHS) FINANCIAL INFORMATION AND REVIEW REPORT

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1 EUROCHEM GROUP INTERNATIONAL ACCOUNTING STANDARD No. 34 CONSOLIDATED CONDENSED INTERIM (NINE MONTHS) FINANCIAL INFORMATION AND REVIEW REPORT 30 SEPTEMBER

2 Contents Auditor s Report on the Review of the Consolidated Condensed Interim Financial Information as of and for the three and nine months ended Consolidated Interim Statement of Financial Position as at... 1 Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income for the three and nine months ended... 2 Consolidated Interim Statement of Cash Flows for the nine months ended... 3 Consolidated Interim Statement of Changes in Equity for the nine months ended The and its operations... 5 Basis of preparation and significant accounting policies... 5 Adoption of new or revised standards and interpretations... 6 Fair value of financial instruments... 6 Segment information... 9 Property, plant and equipment Investment in associates and joint ventures Inventories Trade receivables, prepayments, other receivables and other current assets Originated loans Cash and cash equivalents, fixedterm deposits and restricted cash Bank borrowings and other loans received Project finance Bonds issued Derivative financial assets and liabilities Sales Cost of sales Distribution costs General and administrative expenses Other operating income and expenses Other financial gain and loss Income tax Earnings per share Balances and transactions with related parties Business combinations Contingencies, commitments and operating risks Subsequent events... 31

3 EuroChem Group AG Zug Review Report to the Board of Directors on the consolidated condensed interim financial information as of and for the three and ninemonth periods ended

4 Report on the Review of consolidated condensed interim financial information to the Board of Directors of EuroChem Group AG Zug Introduction We have reviewed the accompanying consolidated condensed interim financial information (statement of financial position, statement of profit or loss and other comprehensive income, statement of cash flows, statement of changes in equity and notes) of EuroChem Group AG as of and for the three and ninemonth periods ended. The Board of Directors is responsible for the preparation and presentation of this consolidated condensed interim financial information in accordance with International Accounting Standard 34 Interim Financial Reporting. Our responsibility is to express a conclusion on this consolidated condensed interim financial information based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements 2410, Review of interim financial information performed by the independent auditor of the entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated condensed interim financial information as of and for the three and ninemonth periods ended have not been prepared, in all material respects, in accordance with International Accounting Standard 34 Interim Financial Reporting. PricewaterhouseCoopers AG Joanne Burgener Audit expert Auditor in charge Christopher Vohrer Audit expert Zug, 8 November Enclosure: Consolidated condensed interim financial information (statement of financial position, statement of profit or loss and other comprehensive income, statement of cash flows, statement of changes in equity and notes) as of and for the three and ninemonth periods ended. PricewaterhouseCoopers AG, Grafenauweg 8, Postfach, CH6302 Zug, Switzerland Telefon: , Telefax: , PricewaterhouseCoopers AG is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.

5 Consolidated Interim Statement of Financial Position as at 31 December 6,616, , , ,355 39,449 47,190 21,116 4,062 87,168 57,997 8,013,893 5,297, , , ,625 36,500 53,178 18, ,464 83,690 6,697, , , ,599 30, ,127 17, ,571 1,604,736 9,618, , , ,185 32, ,602 45, ,605 1,639,765 8,337, (1,403,546) 5,338,549 3,935, ,935, (1,749,745) 4,966,855 3,217,221 1,371 3,218, , ,692 1,508, , ,509 3,267,005 1,305, , ,848 75, , ,456 3,159, ,183, ,175 64, , ,626 10,992 28,974 2,415,738 5,682,743 9,618,629 1,075, , , ,396 18,912 34,494 1,959,328 5,118,824 8,337,416 Note ASSETS Noncurrent assets: Property, plant and equipment Mineral rights Goodwill Intangible assets Investment in associates and joint ventures Originated loans Restricted cash Derivative financial assets Deferred income tax assets Other noncurrent assets Total noncurrent assets Current assets: Inventories Trade receivables Prepayments, other receivables and other current assets Income tax receivable Originated loans Derivative financial assets Restricted cash Fixedterm deposits Cash and cash equivalents Total current assets TOTAL ASSETS LIABILITIES AND EQUITY Equity attributable to owners of the parent: Share capital Cumulative currency translation differences Retained earnings and other reserves Noncontrolling interests Total equity Noncurrent liabilities: Bank borrowings and other loans received Project finance Bonds issued Derivative financial liabilities Deferred income tax liabilities Other noncurrent liabilities and deferred income Total noncurrent liabilities Current liabilities: Bank borrowings and other loans received Bonds issued Derivative financial liabilities Trade payables Other accounts payable and accrued expenses Income tax payable Other taxes payable Total current liabilities Total liabilities TOTAL LIABILITIES AND EQUITY The accompanying notes on pages 5 to 31 are an integral part of this consolidated condensed interim financial information. 1

6 Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income for the three and nine months ended Three months ended Nine months ended Note Sales Cost of sales ,172,275 (765,302) 1,053,824 (683,783) 3,569,477 (2,263,902) 3,321,710 (2,087,732) 406, ,041 1,305,575 1,233,978 (168,627) (58,682) 4,127 (149,424) (43,218) (12,498) (507,817) (159,386) (13,216) (442,127) (123,585) (18,557) Operating profit 183, , , ,709 Share of profit/(loss) from associates and joint ventures, net Interest income Interest expense Financial foreign exchange gain/(loss), net Other financial gain/(loss), net Profit before taxation (991) 2,086 (43,770) (722) 34, ,682 4,591 5,782 (27,487) 14,429 3, ,066 (2,534) 8,564 (96,468) 9,508 20, ,912 15,221 14,316 (94,556) 103,653 42, ,503 (62,949) (42,912) 111, , , , ,983 91, , , (674) 123, ,340 91, , , , ,917 1,098, , , ,211 (57) 123, ,694 (91) 371, , , , , ,893 (1) 717,892 1,098, ,098, Gross profit Distribution costs General and administrative expenses Other operating income/(expenses), net Income tax expense Net profit Other comprehensive income/(loss) that may be reclassified to profit or loss in subsequent periods Currency translation differences Share of currency translation differences of associates and joint ventures, net Total other comprehensive income that may be reclassified to profit or loss in subsequent periods Total comprehensive income 7 Profit/(loss) attributable to: Owners of the parent Noncontrolling interests Total comprehensive income/(loss) attributable to: Owners of the parent Noncontrolling interests Earnings per share basic and diluted 23 (193,309) (171,308) 559,303 (108) 559,195 The accompanying notes on pages 5 to 31 are an integral part of this consolidated condensed interim financial information. 2

7 Consolidated Interim Statement of Cash Flows for the nine months ended Operating profit Income tax paid Operating profit less income tax paid Depreciation and amortisation (Gain)/loss on disposals, impairment and writeoff of property, plant and equipment, net Change in provision for impairment of receivables and provision for obsolete and damaged inventories, net Other noncash (income)/expenses, net Gross cash flow Note 19 Changes in operating assets and liabilities: Trade receivables Advances to suppliers Other receivables Inventories Trade payables Advances from customers Other payables Restricted cash Net cash operating activities Cash flows from investing activities Capital expenditure on property, plant and equipment and intangible assets Purchase of mineral rights Other payments related to mineral rights Investment in associates Proceeds from sale of interest in associate Acquisition of subsidiaries, net of cash Deferred compensation related to business combination, paid Proceeds from sale of property, plant and equipment Cash proceeds/(payments) on derivatives, net Net change in fixedterm deposits Originated loans Repayment of originated loans Interest received Other investing activities Net cash investing activities Free cash outflow Cash flows from financing activities Proceeds from bank borrowings and other loans received Funds received under the Project Finance Facilities Repayment of bank borrowings and other loans Proceeds from bonds, net of transaction costs Prepaid and additional transaction costs related to bank borrowings Prepaid and additional transaction costs related to Project Finance Facilities Return of collateral provided to banks to secure derivative transactions Interest paid Cash proceeds/(payments) on derivatives, net Dividends paid to noncontrolling interests in subsidiary Other financial activities Net cash financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Nine months ended 625, ,709 (138,994) (108,719) 486, , , ,440 5,230 5,570 17,865 20, ,164 (3,585) 38, ,967 4,204 (7,010) 3,825 (3,136) 24,019 24, , ,079 9,524 28,861 (18,797) 90,770 (9,913) (24,506) (6) 6, ,435 (1,039,110) (4,455) (2,991) 60,749 (3,203) (6,795) 1, (34,702) 9,469 10,681 (22,427) (1,031,550) (922,268) (37,893) (197) (10,403) (67,871) 483 (932) 6,597 (106,350) 158,990 12,673 (967,171) (207,471) (144,736) 2,066, ,052 (2,831,146) 767,522 (16,356) 1,825, ,544 (1,848,734) 218,947 (14,897) (3,863) (128,064) 7,103 (598) (1,058) 185,613 13,824 (8,034) 285, ,571 (111,179) 25,180 (110,415) (76,721) (72) 249,252 10, , , ,132 The accompanying notes on pages 5 to 31 are an integral part of this consolidated condensed interim financial information. 3

8 Consolidated Interim Statement of Changes in Equity for the nine months ended Attributable to owners of the parent Cumulative Retained currency earnings Share translation and other capital differences reserves Total Balance at 1 January 111 (2,404,581) 4,009,496 1,605,026 Noncontrolling interests Total equity 894 1,605,920 Comprehensive income/(loss) Net profit/(loss) 559, ,303 (108) 559,195 Other comprehensive income Currency translation differences Total other comprehensive income Total comprehensive income 538, , , , , ,794 1,098, , ,917 1,098,112 (72) (72) 837 (72) (72) 2,703,960 Transactions with owners Dividends paid to noncontrolling interests in subsidiaries Total transactions with owners Balance at 111 (1,865,787) 4,568,799 2,703,123 Balance at 1 January 111 (1,749,745) 4,966,855 3,217,221 Comprehensive income/(loss) Net profit/(loss) Other comprehensive income/(loss) Currency translation differences Share of currency translation differences of associate and joint ventures Total other comprehensive income Total comprehensive income/(loss) Transactions with owners Dividends paid to noncontrolling interests in subsidiaries Total transactions with owners Balance at 1,371 3,218, , ,694 (91) 371, , , ,963 (674) 346, , ,694 (674) 346, , (1) (674) 346, , (1,403,546) 5,338,549 (598) (598) 772 (598) (598) 3,935,886 3,935,114 The accompanying notes on pages 5 to 31 are an integral part of this consolidated condensed interim financial information. 4

9 for the nine months ended 1 The and its operations The comprises the parent entity, AG (the Company ) and its subsidiaries (collectively the Group or EuroChem Group ). The Company was incorporated under the laws of Switzerland on 16 July 2014 and has its registered office at: Baarerstrasse, 37, 6300, Zug, Switzerland. As at, AIM Capital SE owned 90% (31 December : 90%) of the share capital of AG, the remaining 10% of the Company were held indirectly by Mr. Dmitry Strezhnev (31 December : 10%). A company that holds business interests beneficially for Mr. Andrey Melnichenko owned 100% of Linea Ltd. registered in Bermuda, which in its turn indirectly owns 100% of AIM Capital SE (31 December : 100%). The Group s principal activity is the production of mineral fertilizers (nitrogen and phosphatebased) as well as mineral extraction (apatite, phosphate rock, ironore, baddeleyite and hydrocarbons), and the operation of a distribution network. The Group is developing potassium salts deposits to start the production and marketing of potassium fertilizers. The Group s main production facilities are located in Russia, Lithuania, Belgium, Kazakhstan and China (the joint venture s production facilities). The Group s distribution assets are located globally across Europe, Russia, North and Latin America, Central and South East Asia. 2 Basis of preparation and significant accounting policies Basis of preparation. This consolidated condensed interim financial information for the nine months ended has been prepared in accordance with IAS 34, Interim Financial Reporting ; it supplements the annual consolidated financial statements for the year ended 31 December prepared in accordance with International Financial Reporting Standards. The principal accounting policies, significant judgments and estimates applied therein are consistent with those of the consolidated financial statements for the year ended 31 December, except for the following changes in presentation: starting 1 January the Group changed its treatment of foreign exchange revaluation of cash and cash equivalents to financial foreign exchange gain/loss (previously: foreign exchange gains/losses from operating activity ). This was done due to the centralisation of management of cash and cash equivalents by the Group Treasury regardless of jurisdiction or legal entity in the course of ; the presentation of divisional sales (Note 5) was changed by the grossing up of certain intragroup revenues which were previously presented on a net basis; sales to Turkey are reallocated from Asia Pacific to Europe (Note 5); sales of certain products are reallocated from Nitrogen product group to Industrial products (Note 16). The comparative figures are presented and reallocated respectively to reflect these changes. At, the official exchange rates were: US$ 1 = RUB , US$ 1 = EUR (31 December : US$ 1 = RUB , US$ 1 = EUR ). Average rates for the nine months ended were: US$ 1 = RUB , US$ 1 = EUR (nine months ended : US$ 1 = RUB , US$ 1 = EUR ). 5

10 for the nine months ended 3 Adoption of new or revised standards and interpretations The following amendments and improvements to standards became effective from 1 January : Amendments to IAS 12, Recognition of Deferred Tax Assets for Unrealised Losses; Annual Improvements to IFRSs 2014 cycle; Amendments to IAS 7, Disclosure Initiative. These amendments and improvements to standards did not have any impact or did not have a material impact on the Group s consolidated financial statements. A number of new standards, amendments to standards and interpretations are not yet effective as at, and have not been early adopted by the Group: IFRS 9, Financial Instruments. The Group is currently assessing the impact of the standard on its consolidated financial statements; IFRS 15, Revenue from Contracts with Customers and associated amendments to various other standards. The Group is currently assessing the impact of the standard on its consolidated financial statements; Amendments to IFRS 10 and IAS 28 regarding the sale or contribution of assets between an investor and its associate or joint venture; IFRS 16, Leases. The Group is currently assessing the impact of the standard on its consolidated financial statements; Amendments to IFRS 2, Sharebased Payment; Amendments to IFRS 4, Applying IFRS 9 Financial instruments with IFRS 4, Insurance contracts; IFRIC 22, Foreign Currency Transactions and Advance Consideration; Amendments to IAS 40, Transfers of Investment property; IFRS 17, Insurance contracts; IFRIC 23, Uncertainty over Income Tax Treatments. Unless otherwise described above, the new standards, amendments to standards and interpretations are expected to have no impact or to have a nonmaterial impact on the Group s consolidated financial statements. 4 Fair value of financial instruments Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by an active quoted market price. The estimated fair value of financial instruments is determined by the Group using available market information, where it exists, and appropriate valuation methodologies. However, judgement is necessarily required to interpret market data to determine the estimated fair value. Financial instruments carried at fair value. The fair values of derivative financial instruments carried at fair value through profit or loss, which typically include foreign exchange forward contracts, cross currency interest rate swaps, commodity swaps etc., are based on recurring marktomarket valuations provided by the financial institutions which deal in these financial instruments. The fair value of derivative financial assets and liabilities were included in level 2 of the fair value hierarchy. 6

11 for the nine months ended 4 Fair value of financial instruments (continued) Financial assets carried at amortised cost. The fair value of floating rate instruments is normally their carrying amount. The estimated fair value of fixed interest rate instruments is based on estimated future cash flows expected to be received discounted at current interest rates for new instruments with similar credit risk and remaining maturity. The discount rates used depend on the credit risk of the counterparty. The carrying amounts of trade and other receivables and originated loans approximate their fair values and are included in level 3 of fair value hierarchy. Cash and cash equivalents and fixedterms deposits are carried at amortised cost which approximates their current fair value, included in Level 2 of fair value hierarchy. The fair values in level 2 and level 3 of the fair value hierarchy were estimated using the discounted cash flows valuation technique. Financial liabilities carried at amortised cost. The fair value of floating rate instruments is normally their carrying amount. The fair value is based on quoted market prices, if available. The estimated fair value of fixed interest rate instruments with a stated maturity, for which quoted market prices are not available, is estimated based on expected cash flows discounted at current interest rates for new instruments with similar credit risks and remaining maturities. The fair value of liabilities repayable on demand or after a notice period ( demandable liabilities ) is estimated as the amount payable on demand, discounted from the first date that the amount could be required to be paid. The fair value of loans and borrowings, project finance and issued bonds at and 31 December are disclosed in Notes 12, 13 and 14. The fair value of other financial liabilities carried at amortised cost approximates their carrying values. The fair value of all liabilities carried at amortised costs was included in level 3 with exception of issued bonds which were included in level 1 of the fair value hierarchy. During the nine months ended and there were no transfers between levels 1, 2 and 3 in the fair value hierarchy. 7

12 for the nine months ended 4 Fair value of financial instruments (continued) The Group s financial assets and liabilities were as follows: 31 December 21,116 47,190 4,062 18,170 53, , ,645 74,509 17, , ,127 45, , ,602 4, , , ,465 59,760 4, , , , ,869 1,508, , ,305, , ,022 75, , ,655 13,208 2,970,612 13,448 2,898,853 1,183, ,175 64, ,729 1,075, , ,549 48,469 3,181 18,002 3,366 8,344 1,849 2,110,011 5,080,623 1,262 1,712,134 4,610,987 Financial assets Noncurrent financial assets Restricted cash Originated loans Derivative financial assets Other noncurrent assets including: Longterm other receivables Interest receivable Total noncurrent financial assets Current financial assets Restricted cash Trade receivables Originated loans Derivative financial assets Other receivables and other current assets including: Receivable due to sale of associate Other receivables Collateral held by banks to secure derivative transactions Interest receivable Fixedterm deposits Cash and cash equivalents Total current financial assets Total financial assets Financial liabilities Noncurrent financial liabilities Bank borrowings and other loans received Bonds issued Project finance Derivative financial liabilities Other noncurrent liabilities including: Contingent liability related to business combination Longterm portion of deferred payables related to mineral rights acquisition Total noncurrent financial liabilities Current financial liabilities Bank borrowings and other loans received Bonds issued Derivative financial liabilities Trade payables Other accounts payable and accrued expenses including: Interest payable Payable for acquisition of associate Shortterm portion of deferred payables related to business combinations Shortterm portion of deferred payables related to mineral rights acquisition Total current financial liabilities Total financial liabilities 8

13 for the nine months ended 5 Segment information The Group has a vertically integrated business model conducted by five operating divisions, representing reportable segments, which are Mining, Oil & Gas, Fertilizers, Logistics and Sales: Mining division encompasses the extraction of ores to obtain apatite, baddeleyite and ironore concentrates, phosphorite; as well as the development of potassium salts deposits (potash); Oil & Gas division represents the exploration and production of natural gas and gas condensate, as well as the development of hydrocarbon deposits; Fertilizers division includes the production of mineral fertilizers (nitrogen, phosphate and complex) and organic synthesis products; Logistics division covers all supply chain operations including transportation services, purchase and delivery of raw materials and finished goods, as well as freight forwarding and other logistics services; Sales division is responsible for the sale of the complete range of products produced by the Group as well as thirdparty products through the Group s global distribution network spanning across Europe, Russia, North and Latin America, Central and South East Asia. Activities not assigned to a particular division are reported in Other. These include certain service activities, central management and other items. Аll intersegment transactions and unrealised profit in inventory from intragroup sales are eliminated through Elimination. The review of financial reports of the Group, evaluation of the operating results and allocation of resources between the operating divisions are performed by the Management Board (considered to be the chief operating decision maker in the Group). The development and approval of strategies, market and risk analysis, investment focus, technological process changes are undertaken mostly in accordance with the operating divisions. Budgets and financial reports are prepared in a standard format according to the IFRS accounting policy adopted by the Group. Sales between divisions are carried out on an arm s length basis. The Management Board assesses the performance of the operating divisions based on, among other factors, a measure of EBITDA (profit before taxation adjusted by interest expense, depreciation and amortisation, financial foreign exchange gain or loss, other noncash and oneoff items, excluding net profit attributed to noncontrolling interests), allocated by division according to internal rules. Since the EBITDA term is not a standard IFRS measure, EuroChem Group s definition of EBITDA may differ from that of other companies. The division results for the nine months ended were: External sales Mining Oil&Gas Fertilizers Logistics Sales Other Elimination Total 8,066 24,543 40,970 28,103 3,463,388 4,407 3,569,477 Internal sales 488,144 40,588 2,095, ,757 6,232 51,528 (2,818,335) Total sales EBITDA 496,210 65,131 2,136, ,860 3,469,620 55,935 (2,818,335) 3,569, ,168 13, ,690 69,940 58,764 (17,244) 12, ,712 9

14 for the nine months ended 5 Segment information (continued) The division results for the nine months ended were: External sales Mining Oil&Gas Fertilizers Logistics Sales Other Elimination Total Internal sales 7,391 16,865 36,190 25,899 3,208,535 26,830 3,321, ,020 35,116 2,067, ,945 4,971 14,067 (2,679,602) Total sales 447,411 51,981 2,103, ,844 3,213,506 40,897 (2,679,602) 3,321,710 EBITDA 211,262 6, ,694 54,549 36,737 2,103 91, ,007 The division results for the three months ended were: External sales Mining Oil&Gas Fertilizers Logistics Sales Other Elimination Total Internal sales 1,632 8,391 12,510 7,128 1,140,869 1,745 1,172, ,006 14, ,265 45,123 2,018 17,008 (895,471) Total sales 142,638 22, ,775 52,251 1,142,887 18,753 (895,471) 1,172,275 EBITDA 61,972 6, ,559 20,973 31,138 (6,873) 13, ,358 The division results for the three months ended were: External sales Mining Oil&Gas Fertilizers Logistics Sales Other Elimination Total Internal sales 809 5,561 11,344 7,395 1,017,932 10,783 1,053, ,869 11, ,503 40,969 2,503 4,386 (852,687) Total sales 147,678 17, ,847 48,364 1,020,435 15,169 (852,687) 1,053,824 EBITDA 68, ,462 16,197 26, , ,374 A reconciliation of EBITDA to profit before taxation is provided below: Note EBITDA Depreciation and amortisation Provision for impairment and writeoff of idle property, plant and equipment Nonrecurring income/(expenses), net Interest expense Financial foreign exchange gain/(loss), net Other financial gain/(loss), net Noncontrolling interests Profit before taxation Three months ended Nine months ended 254, , , , (68,952) (56,272) (204,577) (158,440) 17, (1,700) (43,770) (722) 34, ,682 (1,377) (1,394) (27,487) 14,429 3,850 (57) 166,066 (3,845) (5,013) (96,468) 9,508 20,686 (91) 564,912 (2,663) (6,550) (94,556) 103,653 42,160 (108) 730, The main Group s manufacturing facilities are based in Russia, Lithuania, Belgium, Kazakhstan and China (joint venture s production facilities). 10

15 for the nine months ended 5 Segment information (continued) The analysis of Group sales by region was: Three months ended Europe Russia Latin America North America Asia Pacific CIS Africa Total sales 386, , ,181 94, ,016 95,485 34,006 1,172, , , , , , ,291 9,131 1,053,824 Nine months ended 1,121, , , , , ,037 99,078 3,569,477 1,225, , , , , ,493 42,433 3,321,710 The sales are allocated to regions based on the destination country. During the nine months ended, the Group had sales in excess of 10% to Russia, the United States of America and Brazil, representing 20.9%, 11.2% and 10.8% of total revenues, respectively (nine months ended sales to Russia and the United States of America representing 17.7% and 16.3% of total revenues, respectively). During the nine months ended and, there were no sales in excess of 10% to one customer. 6 Property, plant and equipment Movements in the carrying amount of property, plant and equipment were: Note Carrying amount at 1 January Including advances given to construction companies and suppliers of property, plant and equipment 5,297,313 3,365, , ,790 Additions Including changes in advances given Additions through business combination Disposals Depreciation charge for the period Provision for impairment and writeoff of idle property, plant and equipment Currency translation differences Carrying amount at Including advances given to construction companies and suppliers of property, plant and equipment 1,269,988 (70,523) 1,854 (2,482) (206,407) 1,009, ,649 62,542 (3,390) (153,020) (3,845) 260,229 6,616,650 (2,663) 516,009 4,795, , , , 20 Borrowing costs capitalised During the nine months ended, borrowing costs totalling US$ 88,624 thousand were capitalised in property, plant and equipment at an average interest rate of 5.47% p.a. (nine months ended 30 September : US$ 48,533 thousand capitalised at an average interest rate of 4.47% p.a.). Payables to suppliers of property, plant and equipment and construction companies As at, trade payables included payables to suppliers of property, plant and equipment and construction companies amounting to US$ 130,787 thousand (31 December : US$ 66,099 thousand). This amount includes accounts payable with irrevocable documentary letter of credit opened in the amount of US$ 12,896 thousand with a deferred term of payment under the contract with a construction company. 11

16 for the nine months ended 7 Investment in associates and joint ventures The Group s investment in associates and joint ventures were as follows: 31 December 19,190 7,290 6,952 6,017 39,449 20,517 7,358 8,625 36,500 Investment in joint venture EuroChemMigao Ltd. Investment in joint venture Thyssen Schachtbau EuroChem Drilling LLC Investment in associate Agrinos AS Investment in associate Hispalense de Liquidos S.L. Total investment in associates and joint ventures Movements in the carrying amount of the Group s investment in associates and joint ventures were: Carrying amount at 1 January Acquisition of interest in associates Reclassification of interest held in PJSC Murmansk Commercial Seaport to assets held for sale Share of profit/(loss) of associates and joint ventures, net Share of other comprehensive income/(loss) of associates and joint ventures, net Currency translation difference Carrying amount at 36,500 5, ,755 10,403 (2,534) (110,313) 15,459 (674) ,449 14,556 32,860 Investment in joint venture EuroChemMigao Ltd. The aggregated assets, liabilities of joint venture were as follows: Current assets Noncurrent assets Current liabilities Noncurrent liabilities Net assets 30,795 31,340 (22,913) (194) 39, December 38,179 32,176 (29,063) (259) 41,033 The joint venture s revenues and results were as follows: Nine months ended Sales Net loss 26,492 (477) 20,637 (155) Investment in joint venture Thyssen Schachtbau EuroChem Drilling LLC The aggregated assets, liabilities of joint venture were as follows: Current assets Noncurrent assets Current liabilities Noncurrent liabilities Net assets 9,949 8,437 (1,923) (223) 16, December 7,947 9,299 (475) (421) 16,350 12

17 for the nine months ended 7 Investment in associate and joint ventures (continued) The joint venture s revenue and result were as follows: Nine months ended Sales Net loss 7,677 (780) 1,975 (100) Investment in associate Agrinos AS The aggregated assets, liabilities of the associate were as follows: Current assets Noncurrent assets Current liabilities Noncurrent liabilities Noncontrolling interest Net assets 17,515 9,338 (9,145) (18,595) 1, December 12,429 9,963 (9,202) (1,495) 1,142 12,837 The associate s revenues and results were as follows: Nine months ended Sales Net loss 5,530 (14,919) Nine months ended * 4,065 (12,242) * The comparatives were presented since the acquisition date. Acquisition of associate Hispalense de Liquidos S.L. In June, the Group acquired 50% minus 1 share of interest in the company Hispalense de Líquidos S.L., a fertilizer distributor with own liquid blending facilities, located in the South of Spain. The aggregated assets, liabilities of the associate were as follows: Current assets Noncurrent assets Current liabilities Noncurrent liabilities Net assets 9,181 5,854 (7,185) (2,650) 5,200 The associate s revenues and results were as follows: From the date of acquisition to Sales Net profit 4,

18 for the nine months ended 8 Inventories Finished goods Materials Catalysts Work in progress Less: provision for obsolete and damaged inventories Total inventories 9 420, ,731 76,482 57,458 (6,711) 722, December 375, ,535 72,007 57,257 (8,579) 678,754 Trade receivables, prepayments, other receivables and other current assets Trade receivables Trade receivables denominated in US$ Trade receivables denominated in EUR Trade receivables denominated in RUB Trade receivables denominated in other currencies Less: provision for impairment Total trade receivables Prepayments, other receivables and other current assets Advances to suppliers VAT recoverable and receivable Other taxes receivable Other receivables and other current assets Receivable due to sale of associate Collateral held by banks to secure derivative transactions Interest receivable Less: provision for impairment Total prepayments, other receivables and other current assets Total trade receivables, prepayments, other receivables and other current assets December 168,500 45,010 43,179 31,402 (19,146) 268, ,323 78,914 29,804 24,174 (5,429) 267,786 90, ,180 9,222 29, (13,051) 271,599 79, ,210 7,145 23,215 59, (7,670) 315, , ,971 Originated loans Note Noncurrent originated loans Unsecured US$denominated loans to related party which is entity under common control with Group Unsecured US$ denominated loan to associate Secured RUBdenominated loan to related party Total noncurrent originated loans Current originated loans Unsecured RUBdenominated loan to 3rd party Total current originated loans Total originated loans Interest rate * Interest rate * 31 December % 3.2%3.8% 43,501 53, % 3, % ,190 53, % 13.4% , ,590 * Contractual interest rate as at and 31 December, respectively. 14

19 for the nine months ended 10 Originated loans (continued) Movements in Group s originated loans were as follows: Note Balance as at 1 January Originated loans to parent company Originated loan to associate Originated loans to related parties Originated loan to 3rd party Repayment of originated loan by parent company Repayment of originated loan by related party Reclassification of loan issued to 3d party to other receivables Intragroup elimination of loans provided to asset holders before acquisition Foreign exchange gain/(loss), net Currency translation differences Balance as at 11 53,590 3,000 31, (9,469) (433) 132, ,350 (150,350) (8,640) (30,850) (2,608) 2,430 47,362 (7,672) 7,672 80, December 1,278 96,621 22,761 78,436 14, ,811 29, , ,126 37,519 67,083 10,999 14,050 51,588 25, , ,745 21,116 38,861 45,994 18,170 64, Cash and cash equivalents, fixedterm deposits and restricted cash Cash on hand* Bank balances denominated in US$ Bank balances denominated in RUB Bank balances denominated in EUR Bank balances denominated in other currencies Term deposits denominated in US$ Term deposits denominated in RUB Term deposits denominated in other currencies Total cash and cash equivalents Fixedterm deposits in different currencies Total fixedterm deposits Current restricted cash Noncurrent restricted cash Total restricted cash * Includes cash on hand denominated in different currencies. Term deposits as at and 31 December were held to meet short term cash needs and had various original maturities but could be withdrawn on request without any restrictions. Fixedterm deposits have various original maturities and can be withdrawn with an early notification and/or with a penalty accrued or interest income forfeited. At, noncurrent restricted cash consisted of US$ 18,611 thousand (31 December : US$ 15,802 thousand) held in a debt service reserve account as required by the Usolsky Project Finance Facility Agreement (Note 13) and US$ 2,505 thousand (31 December : US$ 2,368 thousand) held in bank accounts as security deposits for third parties. At, current restricted cash consisted of: US$ 16,851 thousand received under targeted loan agreements with a state development fund; US$ 894 thousand held at banks under regulatory requirements for state contracts. 15

20 for the nine months ended 11 Cash and cash equivalents, fixed term deposits and restricted cash (continued) At 31 December current restricted cash consisted of US$ 30,358 thousand held at bank as required by preexport finance club facility and US$ 15,636 thousand held at banks as a guarantee for import transactions to comply with Ukrainian legislation. 12 Bank borrowings and other loans received Currency and rate Interest rate * Current loans and borrowings Shortterm unsecured bank loans US$ with floating rate 3.02% 5.18% US$ with fixed rate 2.60% 5.95% RUB with fixed rate 8.56% 8.90% BRL with floating rate BRL with fixed rate Shortterm secured bank loans US$ with fixed rate BRL with fixed rate 2.50% Current portion of unsecured longterm bank loans US$ with floating rate 3.12% RUB with fixed rate 11.05% BRL with floating rate 19.28% BRL with fixed rate 15.50% ARS with fixed rate 18.00% 22.00% Current portion of secured longterm bank loans BRL with floating rate 10.15% BRL with fixed rate 2.94% 12.17% Less: shortterm portion of transaction costs Total current loans and borrowings Currency and rate Noncurrent loans and borrowings Longterm unsecured bank loans US$ with floating rate Longterm secured bank loan US$ with floating rate Loanterm unsecured targeted loans RUB with fixed rate Longterm portion of unsecured bank loans US$ with floating rate BRL with floating rate BRL with fixed rate ARS with fixed rate Longterm portion of secured bank loans BRL with floating rate BRL with fixed rate Less: longterm portion of transaction costs Total noncurrent loans and borrowings Total loans and borrowings Interest rate * Interest rate * 31 December 2.26%3.52% 2.55%5.95% 20.70%26.58% 10.51% 130,581 55, , ,000 55,738 1, % 2.50%8.70% 5 12, % 21.36% 15.50% 400,000 5, , % 3.00%12.17% 111 2,714 (2,449) 1,183, ,108 (2,508) 1,075,418 Interest rate * 31 December 3.24% 3.56% 3.56% 430, , % 800, % 17, % 19.00% 22.00% 2.75% 21.36% 15.50% , , % 2.94% 12.17% 10.65% 3.0%12.17% 74 15, ,869 1,647, ,708 (13,406) 1,305,671 2,381,089 * Contractual interest rate on and 31 December, respectively. 16

21 for the nine months ended 12 Bank borrowings and other loans received (continued) Movements in the Group s bank borrowings and other loans received were as follows: Currency Balance as at 1 January Bank loans received Bank loans received Targeted loans received Bank loans received Bank loans acquired in a business combination Bank loans acquired in a business combination Bank loans acquired in a business combination Loan acquired in a business combination Bank loans repaid Loan repaid Bank loans repaid Bank loans repaid Loan repaid to related party Bank loans repaid Capitalisation and amortisation of transaction costs, net Foreign exchange (gain)/loss, net Currency translation differences, net Balance as at US$ RUB RUB UAH US$ BRL ARS EUR US$ EUR RUB UAH US$ BRL 2,381,089 2,685,412 1,300, ,414 17,345 7, ,555 (2,657,400) (6,555) (155,431) (7,670) (4,090) 13,434 10,026 1,015 1,647,030 1,606, ,569 4,676 33,678 44,445 (1,490,010) (344,873) (4,615) (9,000) (236) 4,200 27,986 5,318 2,777,904 The Group s bank borrowings and other loans received mature: 31 December within 1 year between 1 and 2 years between 2 and 5 years more than 5 years Total bank borrowings and other loans received 1,183,161 3, ,680 6,859 1,647,030 1,075, , ,624 8,313 2,381,089 According to IFRS 7, Financial Instruments: Disclosures, an entity shall disclose the fair value of financial liabilities. The fair value of shortterm bank borrowings and borrowings bearing floating interest rates is not materially different from their carrying amounts. The fair value of the longterm borrowings bearing a fixed interest rate is estimated based on expected cash flows discounted at a prevailing market interest rate. As at the total fair value of longterm loans with fixed interest rates was less than their carrying amount by US$ 3,019 thousand (31 December : the fair value of longterm loans was less than their carrying amount by US$ 740 thousand). Under the terms of the loan agreements, the Group is required to comply with a number of covenants and restrictions, including the maintenance of certain financial ratios and financial indebtedness and crossdefault provisions. The Group was in compliance with covenants at and 31 December. Interest rates and outstanding amounts of major loans and borrowings In September, the Group signed an uncommitted facility agreement with a Russian bank, the funds through this facility may be obtained in multiple currencies with a credit limit up to US$ 550 million. As at, the outstanding amount was RUB 14,250 million (31 December : nil). In, the Group signed a RUB 20 billion 3year revolving uncommitted credit agreement, bearing a fixed interest rate. As at, the outstanding amount was RUB 20 billion (31 December : nil). 17

22 for the nine months ended 12 Bank borrowings and other loans received (continued) In, the Group signed a preexport finance club facility of US$ 800 million bearing interest at 1month Libor +2.75% and maturing in October In July, the loan was fully repaid (31 December : outstanding amount was US$ 800 million). In, the Group signed a US$ 250 million term loan facility bearing a floating interest rate and maturing in September. In September, the loan was fully repaid (31 December : US$ 250 million). In 2014, the Group signed a US$ 100 million uncommitted revolving credit facility bearing a floating interest rate and maturing in December 2018 with credit limit increased to US$ 150 million in As at, the outstanding amount was US$ 100 million (31 December : US$ 150 million). In 2014, the Group signed an uncommitted revolving credit facility with a Russian bank. The funds through this facility may be obtained in multiple currencies. During the nine months ended, the facility was utilised and repaid several times. As at, the outstanding amount was US$ 430 million (31 December : US$ 330 million). In 2013, the Group obtained a credit facility of US$ 1.3 billion bearing interest at 3month Libor +1.8% and maturing in September As at, the outstanding amount was US$ 400 million (31 December : US$ 700 million). Undrawn facilities US$ 100 million committed revolving credit facility bearing a floating interest rate and maturing in December ; RUB 9.5 billion revolving fixedinterest rate committed credit agreement maturing in August During the nine months ended, RUB 9.1 billion of the facility was utilised and fully repaid; US$ 750 million unsecured credit facility bearing a floating interest rate and maturing in September As at and 31 December, the above credit facilities had no outstanding balances and are available to the Group. Collaterals and pledges As at, loans of a Brazilian subsidiary totaling US$ 18,279 thousands were collaterised by property, plant and equipment with the carrying value of US$ 33,651 thousand (31 December : loans of US$ 32,519 thousand were collaterised by property, plant and equipment with the carrying value of US$ 42,193 thousand). As at 31 December, the preexport finance club facility of US$ 800 million was collateralised by future export proceeds of the Group under sales contracts with certain customers and cash balances of US$ 30,358 thousand on the bank accounts. As at and 31 December, all other bank borrowings and loans received listed in Note 12 were not secured. 13 Project finance Due to the nonrecourse nature of the Project Finance facilities they are excluded from financial covenant calculations in accordance with the Group s various debt, project, finance, legal and other documents and are presented as a separate line Project finance in the consolidated statement of financial position. Usolsky potash project. In 2014, the Group signed a US$ 750 million Nonrecourse Project Finance Facility Agreement ( Project Financing or the facility ) maturing at the end of 2022 with a floating interest rate based on 3month Libor for financing the Usolsky potash project located in the Perm region of Russia. 18

23 for the nine months ended 13 Project finance (continued) During the nine months ended, the Group received the final tranche of the facility amounting to US$ 159,555 thousand (nine months ended : US$ 267,749 thousand). As at, the outstanding balance was US$ 731,503 thousand shown net of transaction costs of US$ 18,497 thousand (31 December : US$ 573,022 thousand shown net of transaction costs of US$ 17,423 thousand). The contractual interest rate as at was 4.83 % p.a. (31 December : 4.51% p.a.). The facility matures: between 1 and 2 years between 2 and 5 years more than 5 years Total Project Finance 31 December 105, ,886 49, , , , ,022 The fair value of this facility was not materially different from its carrying amount. As at, in compliance with terms of the facility agreement the Group held US$ 18,611 thousand on a debt service reserve account (31 December : US$ 15,802 thousand) (Note 11). As at and 31 December, under the terms of the Project Finance Facility Agreement 100% of the shares in EuroChem Usolsky Mining S.à r.l., the project owner and whollyowned subsidiary of the Group, were pledged as collateral. The carrying value of the total assets of the company pledged under the facility related to the project amounted to US$ 1,712,414 thousand (31 December : US$ 1,250,802 thousand). During the nine months ended and, the EBITDA of subsidiaries under the Usolsky potash project was US$ 623 thousand and US$ 1,468 thousand, respectively, solely due to foreign exchange impact. Ammonia project in Kingisepp. In 2015, the Group signed a EUR 557 million Nonrecourse 13.5year Project Finance Facility with a floating interest rate based on 3month Euribor to finance the construction of an ammonia plant in Kingisepp, Russia. During the nine months ended, the Group received funds under the facility of EUR 143,711 thousand (US$ 166,497 thousand) (nine months ended : EUR 65,753 thousand or US$ 73,795 thousand). As at, the outstanding balance was US$ 130,189 thousand shown net of transaction costs of US$ 116,936 thousand. As at 31 December, the outstanding balance of US$ 69,172 thousand was netted off with transaction costs of US$ 69,172 thousand, the amount of incurred transaction costs of US$ 49,134 thousand that exceeded received funds was included into Other noncurrent assets in the consolidated statement of financial position. The contractual interest rate as at was 1.3% p.a. (31 December : 1.3% p.a.). The facility matures: between 1 and 2 years between 2 and 5 years more than 5 years Total Project Finance 31 December 35,920 94, ,189 19

24 for the nine months ended 13 Project finance (continued) The fair value of this facility was not materially different from its carrying amount. As at and 31 December, under the terms of the facility agreement 100% of the shares in EuroСhemNorthWest JSC, the project owner and whollyowned subsidiary of the Group, were pledged as collateral. The carrying value of the total assets of the company pledged under the Facility related to the project amounted to US$ 760,540 thousand as at (31 December : US$ 590,100 thousand). During the nine months ended, the EBITDA of the subsidiary under the Ammonia project was US$ 2,011 thousand solely due to foreign exchange impact (nine months ended : the EBITDA was negative US$ 922 thousand). 14 Bonds issued Currency Rate Coupon rate, p.a. Current bonds USD Fixed 5.125% RUB Fixed 12.40% Less: transaction costs Total current bonds issued Noncurrent bonds US$ Fixed 3.80% US$ Fixed 3.95% RUB Fixed 12.40% RUB Fixed 8.25% RUB Fixed 10.60% RUB Fixed 8.75% Less: transaction costs Total noncurrent bonds issued Total bonds issued Maturity Fair Carrying value amount 31 December Fair Carrying value amount ,993 88, , ,033 86,182 (40) 410, , , ,033 (177) 323, , , , , , , , ,545 (8,951) 1,508,447 1,918, ,335 85, , ,795 1,168, ,000 82, ,293 (5,170) 824,848 1,148,704 1,536,558 1,950,887 US$denominated bonds and RUBdenominated bonds were listed on the Irish Stock Exchange and the Moscow Exchange, respectively. The fair value of the bonds was determined with reference to their market quotations or executable prices. In May, the Group issued RUBdenominated bonds totaling RUB 15 billion bearing a semiannual coupon rate of 8.75% p. a. maturing in May In July, the Group issued US$denominated notes for a total amount of US$ 500 million bearing a semiannual coupon rate of 3.95% p. a. maturing in July

25 for the nine months ended 15 Derivative financial assets and liabilities At, net derivative financial assets and liabilities were: Assets Noncurrent Commodity swaps UAH/US$ deliverable forward contracts with a nominal amount of US$ 5 million RUB/US$ nondeliverable forward contracts with a nominal amount of RUB 750 million RUB/US$ nondeliverable forward contracts with a nominal amount of RUB 5,500 million EUR/US$ nondeliverable forward contracts with a nominal amount of EUR 67 million Cross currency interest rate swaps Total Liabilities Noncurrent Current Current , ,014 4,062 13,780 16, ,683 64,081 At 31 December, net derivative financial assets and liabilities were: Assets Noncurrent Commodity swaps UAH/US$ deliverable forward contracts with a nominal amount of US$ 6 million RUB/US$ nondeliverable forward contracts with a nominal amount of RUB 9,000 million Cross currency interest rate swaps Total Liabilities Noncurrent Current Current ,457 13,602 75,209 75, Cash (proceeds)/ payments on derivatives, net Movements in the carrying amount of derivative financial assets/(liabilities) were: 1 January Gain/(loss) from changes of fair value, net Operating activities Commodity swaps Foreign exchange deliverable and nondeliverable forward contracts, net 12, ,444 (3,310) (23,394) 2,871 1,949 (234) 12,694 15,754 (26,265) 2,183 Financing activities Foreign exchange deliverable and nondeliverable forward contracts, net Cross currency interest rate swaps, net Total derivative financial assets and liabilities, net (75,209) 36,041 (7,103) (46,271) (75,209) ,644 (779) (6,324) (382) (45,889) (62,310) 48,485 (30,497) (44,322) Changes in the fair value of derivatives, which are entered into for the purpose of mitigating risks linked to cash flows from operating activities of the Group, are recognised in Other operating income/(expenses), net (Note 20), where foreign currency derivative contracts are recognised in Foreign exchange gain/(loss) from operating activities, net and commodity swaps are recognised in Other operating income/(expenses), net. Changes in the fair value of derivatives, which are entered into for the purpose of hedging the financing and investing cash flows, are recognised in Other financial gain/(loss), net (Note 21). 21

26 for the nine months ended 15 Derivative financial assets and liabilities (continued) Cross currency interest rate swaps In May, the Group signed RUB/US$ cross currency interest rate swap agreements with total notional amount of RUB 15,000 million, maturing in May In July, the Group signed a RUB/US$ cross currency interest rate swap agreement with a notional amount of RUB 20,000 million, maturing in July In September, the Group signed a RUB/US$ cross currency interest rate swap agreement with a notional amount of RUB 14,250 million, maturing in September Foreign exchange nondeliverable forward contracts Outstanding at the beginning of the year, RUB/US$ nondeliverable forward contracts with total notional amount of RUB 7,000 million were terminated in March. Outstanding at the beginning of the year, a RUB/US$ nondeliverable forward contract with a notional amount of RUB 2,000 million matured in March. In March, the Group signed a RUB/US$ nondeliverable forward contract with a notional amount of RUB 3,000 million, which was terminated by the end of March. In April, the Group signed RUB/US$ nondeliverable forward contracts with total notional amount of RUB 4,000 million matured in May and June. In July, the Group signed a RUB/US$ nondeliverable forward contract with a notional amount of RUB 1,500 million, maturing in December. In May, the Group signed RUB/US$ nondeliverable forward contracts with total notional amount of RUB 6,000 million, out of which contracts with total notional amount of RUB 3,000 million matured in July and August, contracts with total notional amount of RUB 2,000 million were terminated in September, and the outstanding contract matures in November. In September, the Group signed EUR/US$ nondeliverable forward contracts with total notional amount of EUR 67 million, which mature in the period from February 2019 to May In September, the Group signed RUB/US$ nondeliverable forward contracts with total notional amount of RUB 3,000 million, which mature in the period from January to February Foreign exchange deliverable forward contracts In September, the Group signed a RUB/US$ deliverable forward contract with a notional amount of RUB 750 million that matures in March In August, the Group signed a RUB/US$ deliverable forward contract with a notional amount of US$ 50 million which matured by the end of August. 22

27 for the nine months ended 16 Sales The external sales by product group were: Nine months ended Sales volume Sales volume (thousand Sales (thousand Sales metric tonnes) (thousand US$) metric tonnes) (thousand US$) Nitrogen products Nitrogen fertilizers Other products Phosphate and complex fertilizers Phosphate fertilizers Complex fertilizers Feed phosphates Other fertilizers Iron ore concentrate Apatite and baddeleyite concentrates Apatite concentrate Baddeleyite concentrate Industrial products Wood Processing Organic base chemicals Explosives Other products Hydrocarbons Other sales Logistic services Other products Other services Total sales 6,199 6, ,895 1,667 1, , ,282,288 1,280,252 2,036 1,374, , ,010 96,785 85, ,694 24,221 4,288 19, , ,026 95,200 81,405 65,481 22,110 92,425 26,463 33,773 32,189 3,569,477 6,823 6, ,420 1,724 1, , ,387,600 1,385,996 1,604 1,278, , , ,643 42, ,162 24,685 2,798 21, , ,867 82,905 54,396 56,376 16,162 77,488 24,771 22,348 30,369 3,321,710 Three months ended Sales volume Sales volume (thousand Sales (thousand Sales metric tonnes) (thousand US$) metric tonnes) (thousand US$) Nitrogen products Nitrogen fertilizers Other products Phosphate and complex fertilizers Phosphate fertilizers Complex fertilizers Feed phosphates Other fertilizers Iron ore concentrate Apatite and baddeleyite concentrates Apatite concentrate Baddeleyite concentrate Industrial products Wood Processing Organic base chemicals Explosives Other products Hydrocarbons Other sales Logistic services Other products Other services Total sales 1,796 1, , , , , , , ,911 34,346 45,240 95,594 8, , ,848 44,504 34,456 28,633 24,255 6,849 19,086 6,502 3,104 9,480 1,172,275 2,132 2, , , , , , , ,840 26,398 23,449 77,443 8, , ,453 38,460 31,039 22,679 22,275 5,389 18,624 6,863 2,507 9,254 1,053,824 23

28 for the nine months ended 17 Cost of sales The components of cost of sales were: Three months ended Nine months ended Raw materials Goods for resale Other materials Energy Utilities and fuel Labour, including contributions to social funds Depreciation and amortisation Repairs and maintenance Production overheads Property tax, rent payments for land and related taxes Provision /(reversal of provision) for impairment and writeoff of idle property, plant and equipment, net (Note 6) Provision/(reversal of provision) for obsolete and damaged inventories, net Changes in work in progress and finished goods Other costs/(compensations), net Total cost of sales , ,724 42,756 44,930 14,621 53,422 56,110 15,455 17,854 8, , ,264 43,723 36,110 13,696 53,457 47,429 17,450 16,749 8, , , , ,108 52, , ,742 44,605 52,834 31, , , , ,071 42, , ,766 46,561 47,849 23,389 (593) 1,380 (1,239) 2,343 (1,901) 4,182 9, ,302 (508) 48,068 2, ,783 (2,082) (24,563) 20,410 2,263,902 (3,018) 76,349 9,464 2,087,732 Distribution costs Distribution costs were: Three months ended Nine months ended Transportation Labour, including contributions to social funds Depreciation and amortisation Repairs and maintenance Provision/(reversal of provision) for impairment of receivables, net Other costs Total distribution costs ,599 20,572 9,504 2, ,299 16,126 6,287 1, ,813 58,129 25,627 4, ,312 48,086 17,334 5, , , , ,424 14,407 33, ,817 (954) 30, ,127 General and administrative expenses General and administrative expenses were: Three months ended Nine months ended Labour, including contributions to social funds Depreciation and amortisation Audit, consulting and legal services Rent Bank charges Social expenditure Repairs and maintenance Provision/(reversal of provision) for impairment of receivables, net Other expenses Total general and administrative expenses 31,501 3,338 3,064 1,632 1,017 1, ,554 2,556 4,558 1,478 1,500 1, ,215 10,208 9,563 5,164 3,182 3,044 1,714 5,663 10,518 58, ,931 43,218 5,540 31, ,386 64,490 6,340 13,650 4,239 3,661 2,596 1, , ,585 24

29 for the nine months ended 19 General and administrative expenses (continued) The total depreciation and amortisation expenses included in all captions of the consolidated interim statement of profit or loss and other comprehensive income amounted to US$ 204,577 thousand (nine months ended : US$ 158,440 thousand). The total staff costs (including social expenses) included in all captions of the consolidated interim statement of profit or loss and other comprehensive income amounted to US$ 321,943 thousand (nine months ended : US$ 279,996 thousand). 20 Other operating income and expenses The components of other operating (income) and expenses were: Three months ended Nine months ended Sponsorship (Gain)/loss on disposal of property, plant and equipment and intangible assets, net Foreign exchange (gain)/loss from operating activities, net Provision/(reversal of provision) for impairment and write off of idle property plant and equipment, net (Note 6) (Gain)/loss on sales and purchases of foreign currencies, net Nonrecurring (income)/expenses, net Other operating (income)/expenses, net Total other operating (income)/expenses, net 21 5,597 7,226 16,119 14,106 1,040 2,043 3,960 4,016 (5,595) 576 (6,671) 5,723 (3) 5, (783) 1,700 (6,086) (4,127) 1,299 1,394 (37) 12,498 (2,266) 5,013 (8,023) 13,216 (3,946) 6,550 (8,212) 18,557 Other financial gain and loss The components of other financial (gain) and loss were: Note Changes in fair value of cross currency interest rate swaps Changes in fair value of foreign exchange deliverable and nondeliverable forward contracts Unwinding of discount on deferred payables Unwinding of discount on land restoration obligation Other Total other financial (gain)/loss, net 15 Three months ended Nine months ended (37,801) (397) 3, (34,288) (5,588) (3,850) (35,644) (31,409) (397) (13,794) 12,934 2,049 1,363 1,058 (20,686) (42,160) 25

30 for the nine months ended 22 Income tax Three months ended Nine months ended Income tax expense current Deferred income tax origination and reversal of temporary differences, net Writeoff/provision for impairment of previously recognised deferred tax assets Prior periods adjustments for income tax Reassessment of deferred tax assets/ liabilities due to change in the tax rate Income tax expense 30,927 31, , ,717 32,701 6,045 30,620 39,656 (679) 62,949 3,479 2,282 42,912 (824) 33, ,309 11,517 3, ,308 The Group companies are subject to tax rates depending on the country of domicile. Subsidiaries located in Russia applied a tax rate of 20.0% on taxable profits during the nine months ended (nine months ended : 20.0%) except for several subsidiaries which applied reduced income tax rates within a range from 15.5% to 19.3% according to regional tax law and agreements with regional authorities (nine months ended : within a range from 15.5% to 19.3%). In addition, at the end of, the Group signed special investment contracts with Russian authorities in respect of its potash project subsidiaries, EuroChemVolgaKaliy LLC and EuroChemUsolsky potash complex LLC enacted from 1 January effective till 31 December Under the contracts terms income tax rates are reduced to 5% and 0% respectively for the abovementioned subsidiaries. During the nine months ended, the effect from reassessment at a regional income tax rate of deferred tax assets and liabilities at EuroChemVolgaKaliy LLC totaled US$ 33,284 thousand. Two major manufacturing entities located in the European Union, Lifosa AB in Lithuania and EuroChem Antwerpen NV in Belgium, apply tax rates of 15.0% and 33.99% on taxable profits, respectively (nine months ended : 15.0% and 33.99%). The rest of the subsidiaries are subject to the tax rates on taxable profit ranging from 7.8% to 39.5% (nine months ended : 7.8% to 40.5%). Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings. 23 Earnings per share Basic earnings per share are calculated by dividing the net profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period. The Company has no dilutive potential ordinary shares and, therefore, the diluted earnings per share equals the basic earnings per share. Three months ended Nine months ended Net profit for the period attributable to owners of the parent Weighted average number of ordinary shares outstanding Earnings per share basic and diluted 111, , , ,303 1, , , ,

31 for the nine months ended 24 Balances and transactions with related parties The Group s related parties are considered to include the ultimate beneficiaries, affiliates and entities under common ownership and control within the Group and/or entities having common principal ultimate beneficiaries. The relationships with those related parties with whom the Group entered into significant transactions or had significant balances outstanding are detailed below: Financial statements caption Nature of relationship Statement of financial position Assets Noncurrent originated loans (Note 10) Noncurrent originated loans (Note 10) Other noncurrent assets including: Interest receivable Prepayments, other receivables and other current assets including: Receivable due to sale of associate (Note 9) Liabilities Contingent liability related to business combination Trade payables Financial statements caption 31 December Associates Other related parties 3,000 44,190 53,178 Other related parties 392 2,645 Other related parties 59,760 Other related parties Joint ventures 122,966 1, ,655 1,069 Three months ended Nine months ended Nature of relationship Statement of profit or loss and other comprehensive income Sales Associates Sales Joint ventures Sales Other related parties Distribution costs Other related parties Interest income Parent company Interest income Other related parties Changes in fair value of foreign exchange nondeliverable forward contracts Parent company Financial statements caption Statement of cash flows Capital expenditure on property, plant and equipment and other intangible assets Capital expenditure on property, plant and equipment and other intangible assets Proceeds from sale of interest in associate Originated loans (Note 10) Originated loans (Note 10) Originated loans (Note 10) Repayment of originated loans (Note 10) Repayment of originated loans (Note 10) Loan repaid (Note 12) Interest received Interest received Interest paid (198) 317 Nature of relationship Associates Joint ventures Other related parties Parent company Associates Other related parties Parent company Other related parties Other related parties Parent company Other related parties Other related parties (3,730) 2, ,385 3,568 (6,702) 1,283 (631) 2,215 1,362 (5,476) 4,481 2,431 (22,849) Nine months ended (7,754) 60,749 (3,000) (31,530) 9,469 3,455 (1,050) (2,979) (106,350) 150,350 8,640 (9,000) 4, (1,141) Other related parties are represented by the companies under common control with the Group and/or by the company ultimately controlled by one of Group s shareholders. 27

32 for the nine months ended 24 Balances and transactions with related parties (continued) In December, the Group sold its interest in the associate Murmansk Commercial Seaport PJSC to a related party for a total consideration of US$ 142,612 thousand (denominated in RUB), out of which US$ 82,852 thousand were received in, and US$ 60,749 thousand were received in January. In the second quarter, the Group acquired from the parent company of the Group, AIM Capital S.E., two companies, each owning a vessel. The Group treats this transaction as an asset acquisition. Management compensation. The total key management personnel compensation amounted to US$ 12,504 thousand and US$ 5,900 thousand for the nine months ended and, respectively. This compensation relates to seven individuals (eight individuals for the period from February to May ) who are members of the Management Board, for their services in full time positions. Compensation is made up of an annual fixed remuneration plus a performance bonus accrual. 25 Business combinations Acquisition of Bulgarian distributor. On 28 February, the Group completed the acquisition of 100% interest in Agricola Bulgaria Ead, Bulgaria s fertilizer distribution company, to be renamed EuroChem Agro Bulgaria. The main purpose of this acquisition is to further develop EuroChem s distribution footprint in Bulgaria and the wider region of Eastern Europe. The total purchase consideration for 100% interest in the company of US$ 320 thousand (denominated in EUR) was paid in cash. The provisional purchase price allocation for the acquisition was: Attributed fair value, in thousands of BGN* Cash and cash equivalents Accounts receivable and other assets Inventories Property, plant and equipment Trade and other accounts payable Bank borrowings Other longterm liabilities Deferred income tax asset/(liability) net Fair value of net assets of subsidiary 918 5,758 4,796 2,445 (1,022) (12,130) (41) Attributed fair value, in presentation currency in thousands of US$ 496 3,113 2,593 1,322 (553) (6,559) (22) * BGN Bulgarian Lev. The Group is performing the valuation of the fair value of the identifiable assets and liabilities of the subsidiary and intends to finalise the fair value measurement within 12 months of the acquisition date. For the period from the date of acquisition to Agricola Bulgaria Ead contributed revenue, EBITDA and net profit to the Group of US$ 26,484 thousand, US$ 855 thousand and US$ 714 thousand, respectively. If the acquisition of the company had occurred on 1 January, the Group s consolidated revenue, EBITDA and net profit for the nine months ended would not have changed significantly. 28

33 for the nine months ended 25 Business combinations (continued) Acquisition of Argentina distributor. On 7 July, the Group completed the acquisition of 100% interest in Emerger Fertilizantes S.A. a privatelyowned distributor of premium and standard fertilizers in Argentina. The main purpose of this acquisition is to further develop EuroChem s distribution footprint in Latin America. The total consideration of US$ 6,732 thousand comprised US$ 3,366 thousand paid in cash and a deferred consideration of US$ 3,366 thousand payable in cash in 12 months period from the date of acquisition. The provisional purchase price allocation for the acquisition was: Attributed fair value, in thousands of ARS* Cash and cash equivalents Accounts receivable and other assets Inventories Property, plant and equipment Trade and other accounts payable Advances from Customers Bank borrowings Fair value of net assets of subsidiary 8,070 27,194 28,547 9,382 (59,031) (1,200) (750) 12,212 Attributed fair value, in presentation currency in thousands of US$ 486 1,638 1, (3,556) (72) (45) 736 * ARS Argentina Peso. The Group recognised goodwill of US$ 5,996 thousand which is primarily attributable to the market expertise, effectiveness of operating process, an experienced workforce and other factors which are expected to result in higher profitability of the acquired assets than was assumed in determining the fair values of assets and liabilities acquired. The Group is performing the valuation of the fair value of the identifiable assets and liabilities of the subsidiary and intends to finalise the fair value measurement within 12 months of the acquisition date. For the period from the date of acquisition to Emerger Fertilizantes S.A. contributed revenue, EBITDA and net profit to the Group of US$ 3,137 thousand, US$ 770 thousand and US$ 454 thousand, respectively. If the acquisition of the company had occurred on 1 January, the Group s consolidated revenue, EBITDA and net profit for the nine months ended would not have changed significantly. 26 Contingencies, commitments and operating risks i Capital expenditure commitments As at, the Group had contractual commitments for capital expenditures of US$ 1,018,632 thousand (31 December : US$ 1,043,626 thousand), including amounts denominated in EUR of US$ 440,803 thousand and in RUB of US$ 370,069 thousand, which will represent cash outflows in the next 6 years according to the contractual terms. US$ 219,632 thousand and US$ 281,685 thousand of the total amount relate to the development of potassium salt deposits and the construction of mining facilities at the Gremyachinskoe and Verkhnekamskoe potash licence areas, respectively (31 December : US$ 175,387 thousand and US$ 330,272 thousand, respectively). 29

34 for the nine months ended 26 Contingencies, commitments and operating risks (continued) US$ 319,445 thousand of the total amount relates to the construction of the Ammonia Plant at Kingisepp, Russia (31 December : US$ 361,108 thousand). ii Tax legislation Management of the Group believes that its interpretation of the tax legislation is appropriate and the Group s tax position will be sustained. Given the scale and international nature of the Group s business, intragroup transfer pricing and issues such as controlled foreign corporations legislation, beneficial ownership, permanent establishment and tax residence issues, are inherent tax risks just as they are for other international businesses. Changes in tax laws or their application with respect to tax matters in the countries where the Group has subsidiaries could increase the Group s effective tax rate. The majority of the Group s production subsidiaries are located in Russia and are required to comply with Russian tax, currency and customs legislation. The Russian tax authorities may be taking a more assertive position in their interpretation of the legislation and assessments than the Management of the Group, and it is possible that transactions and activities that have not been challenged in the past may be challenged. Fiscal periods remain open to review by the authorities in respect of taxes for three calendar years preceding the year of review with possible extension of this period under certain circumstances. Where management believes that it is probable that certain tax positions taken by the Group may not be sustained if challenged by the tax authorities, the Group recognizes provisions for related taxes, interest and penalties. There were no such provisions recorded by the Group at and 31 December. iii Insurance policies The Group obtains risk insurance cover as mandated by statutory requirements. The Group also holds voluntary insurance policies covering directors and officers liability (D&O insurance), general liability, physical property and business interruption insurance at nitrogen and phosphate production plants, as well as insurance policies related to trade operations, including export shipments, and credit insurance of certain trade debtors. The Group also carries voluntary life and accident insurance for employees. As part of the Verkhnekamskoe potash project the Group has insured construction risks of all mining and surface facilities related to this project including third party liability during construction works. The insurance covers the risks of destruction and damage related to all facilities including those previously constructed starting from November 2014 to July 2020, including two year guarantee period. As a part of the Ammonia project at Kingisepp, the Group has insured construction risks of all facilities related to this project. iv Environmental matters The Group s plants and operations are subject to numerous national, state and local environmental laws and regulations. The Group s management regularly evaluates its obligations under these laws and regulations and believes that the Group s plants and operations are in compliance with environmental laws and regulations. The estimated cost of known environmental obligations has been provided for in this consolidated condensed interim financial information in accordance with the Group s accounting policies. 30

35 for the nine months ended 26 Contingencies, commitments and operating risks (continued) The environmental laws and regulations are essentially complex and tend to change over time. The scope, extent and speed of this change may vary substantially in different jurisdictions. Accordingly, the Group s management system provides for ongoing monitoring of the key trends in applicable environmental laws and regulations. Though it is inherently difficult to estimate precisely all costs associated with current and newly proposed environmental requirements, the Group s management does not expect these costs to have a material effect on the Group s financial position or liquidity. v Legal proceedings During the reporting period, the Group was involved in a number of court proceedings (both as a plaintiff and a defendant) arising in the ordinary course of business. In the opinion of management, there are no current legal proceedings or other claims outstanding which could have a material effect on the results of operations or the financial position of the Group. vi Operating environment of the Group The Group operates in the fertilizer industry with production assets in Russia, Lithuania, Belgium, Kazakhstan, China and sales networks in Europe, Russia, the CIS, North and Latin America, Central and South East Asia. The highly competitive nature of the market makes prices of the Group s key products relatively volatile. Possible deteriorating economic conditions may have an impact on management s cash flow forecasts and assessment of the impairment of financial and nonfinancial assets. Debtors of the Group may also become adversely affected by the financial and economic environment, which could in turn impact their ability to repay amounts owed or fulfil obligations undertaken. Management is unable to predict all developments which could have an impact on the industry and the wider economy and consequently what effect, if any, they could have on the future financial position of the Group. Management believes all necessary measures are being taken to support the sustainability and growth of the Group s business in the current circumstances. Under the terms of valid licences for the exploration and development of mineral resource deposits, the Group is required to comply with a number of conditions, including preparation of design documentation, commencement of the construction of mining facilities and commencement of the extraction of mineral resources by certain dates. If the Group fails to materially comply with the terms of the licence agreements there are circumstances whereby the licences can be revoked. Management of the Group believes that the Group faces no material regulatory risks in relation to the validity and operation of any of its licences. Effective October, certain companies of the Group in Russia and Ukraine are subject to temporary suspension of foreign economic activities in Ukraine. The Group is taking measures to both cancel the sanctions and prevent possible breaches in the future. 27 Subsequent events In October, the Board of Directors of the Group made a decision to sell SeverneftUrengoy, LLC, a subsidiary within the Oil & Gas Division, to an unrelated company. The sale will be subject to approval from the antimonopoly authority of the Russian Federation and certain other conditions. 31