Supply chain

The Group aims to create a sustainable procurement system that balances financial, environmental, and social considerations in the procurement of goods, services, and works. The strategy rests on three pillars:

• continuous operational improvement, encompassing business process optimisation and the development of suppliers and contractors;
• digital transformation: the integration of digital technologies across all procurement business processes;
• human resources policy: a comprehensive set of measures to build, retain, and develop talent within the Procurement Department.

GRI 3‑3

Supply chain management at the Company is built on transparent, trust‑based, and mutually beneficial relationships with partners, conducted in strict compliance with applicable law and the obligations of both parties. The primary objective of procurement is to ensure the achievement of production targets via timely, complete, and high‑quality procurement, as well as boost the Company’s efficiency.

Key documents governing the Company’s procurement activities

Procurement governance structure

To assess performance, increase engagement, and motivate employees, the Procurement Department has established KPIs aligned with the Company’s business objectives, enabling an evaluation of the Department’s goal attainment. The Board of Directors reviews the Procurement Department’s results annually.

The Company actively adopts best practices and technologies to achieve stronger outcomes. Through supply chain stability and a culture of continuous improvement, the Procurement Department reliably supplies the Company’s business units with materials, equipment, raw materials, works, and services.

For the link to the registration form, main regulations, the EBP registration instructions and step‑by‑step guide, see the   Procurement section of the Company’s official  website

PhosAgro Group upholds the principles of ethical business conduct and zero tolerance for corruption. The Company seeks to build and maintain business relationships with partners who conduct business with integrity, and reserves the right to refuse cooperation with any counterparty involved in corruption or other unlawful activities.

The Company operates a hotline for counterparties and other stakeholders to report on potential violations.

Hotline Regulations

For more information on the Company’s engagement with local and SME suppliers

The following strategic risks affect our procurement objectives

Procurement‑specific risks:

• Suppliers’ failure to perform, changes in the product range or late delivery of materials and equipment, including as a result of geopolitical factors
• Violations of ESG principles by suppliers, including breach of human rights, use of child and forced labour, non‑compliance of products with environmental standards, etc.
• Quality of raw materials, commodities, and equipment, dissatisfaction of the internal customer

Shifting technological standards, a changing external economic environment, and rising expectations for business resilience require the Company to be agile, responsive, and strategic in its approach. PhosAgro Group continues to intensify engagement with domestic manufacturers. Joint work has already resulted in numerous pilot industrial tests and the signing of long‑term cooperation agreements. Special emphasis is placed on adapting and upgrading domestic equipment to Apatit’s specific requirements (covering pumps, filtering materials, and stainless steel, and more) as well as on securing supplies of spare parts, self‑propelled underground machinery, and automation and control equipment.

Procurement highlights in 2025

Key performance indicators

KPI	Performance level			Actual
	Threshold	Target	Stretch	2025
Average number of tender participants in the reporting period	3	5	7	7
Tender price reduction in the reporting period, %	20	30	35	36
Holding tenders on time, %	90	95	100	100

KPI	Performance level			Actual
	Threshold	Target	Stretch	2025
Timeliness of procurement (integrated)	87	90	93	97
Reject rate at incoming control	5	3	2	2

KPI	Performance level			Actual
	Threshold	Target	Stretch	2025
Raw materials procurement index	1.05	1	0.95	1

Performance improvement

A project to procure low‑value goods through the Marketplace online platform was implemented, generating 456 order lines across eight materials and equipment categories. Next steps include broadening the range of categories and items, and evaluating delivery quality, lead times, and service levels.

The transition to purchasing electrical products via the Elektrotechmontazh (ETM) online store is actively progressing, enabling shorter delivery times and purchases at prices averaging 28% below market rates. By year‑end 2025, products from 149 manufacturers were available for purchase through the online store.

The Reliable Counterparty project is in its active implementation phase. Aimed at creating a supplier development system, it is designed to:

• inform counterparties about how their rating is calculated and how they can influence it;
• identify a pool of counterparties classified as Reliable and meeting Apatit’s requirements;
• create incentives for counterparties to pursue the Reliable status;
• ensure stable operations by building partnerships with responsible companies.

As part of the Procurement Department’s business process optimisation, 35 initiatives were implemented. Key measures included the introduction of configurators – parameter sets for generating item names in the stock item catalogue — and a 10‑calendar‑day reduction in average procurement procedure duration compared with 2024.

Procurement Department professionals participate in the in-house Functional Experts programme, designed to improve business process quality and accelerate the onboarding of new employees. Graduates of the programme will be equipped to:

• design training courses in their area of expertise, including setting objectives, structuring course plans, and selecting interactive learning methods;
• deliver effective training sessions;
• maintain an engaging learning environment and handle challenging situations.

Engagement with local suppliers

In September 2025, the annual Apatit Supplier Day was held, organised jointly with the Urban Development Agency in Cherepovets and the Cherepovets branch of the Regional Association of Employers – the Vologda Region Union of Industrialists and Entrepreneurs. Over 60 representatives of Vologda region businesses attended in person, with more than 90 SME representatives from other regions joining online. The discussions centred on key matters of engagement with Apatit.

In November 2025, the Apatit Contractor Day online conference brought together more than 150 contractor organisations.

We actively seek feedback from our partners. Events of this kind serve not only to share updates but also to address questions in real time. Following each event, participants receive materials summarising the topics discussed.

To attract local contractors to tenders during 2025, the Company:

• presented its 2025 work plan to contractor organisations and SROs of the Murmansk region at Contractor Day conferences in Murmansk;
• presented the investment project for the development of the Volkhov branch of Apatit to contractors and SRO representatives from the Leningrad region;
• participated in the ICID‑2025 forum on industrial construction and design, organised by the Ural Association of Builders SRO;
• presented its 2026 work plan at the Cooperation Economy: Prospects and Opportunities conference, organised by the Urban Development Agency in Cherepovets for contractors and SRO representatives from the Vologda region.

GRI 204‑1

Since 2020, PhosAgro Group has assessed suppliers against ESG criteria using its Sustainable Procurement Indicators checklist. This enables us to assess our suppliers’ environmental, social and governance performance.

The checklist addresses environmental practices, social responsibility, and quality management, with each supplier receiving an individual rating based on the assessment results.

We believe that making counterparties aware of the Company’s system of values contributes to a more responsible and sustainable business culture in the long run.

To ensure reliable and predictable cooperation, the Company conducts technical audits of suppliers, covering environmental and social impact requirements. In 2025, we held 40 technical audits of Russian and foreign manufacturers, with three suppliers ultimately not recommended for cooperation.

Key ESG evaluation indicators

Item	2023	2024	2025
Number of rated suppliers with existing checklists, at the end of the reporting period	11,191	14,885	19,009
Number of suppliers in the reporting year	3,797	3,968	3,986
Number of rated suppliers in the reporting year	2,418	2,685	2,826
Share of rated suppliers in the reporting year, %	64	68	71
Total supplies, RUB bln	183.8	216.7	261.5
Supplies from rated counterparties in the total volume of supplies in the reporting year, RUB bln	108	137	165.6
Share of supplies from rated counterparties in the total volume of supplies in the reporting year, %	59	63	63
Average supplier rating, %	65	65	64

Supplier environmental assessment

GRI 308‑1, 308‑2

PhosAgro Group is committed to applying safe and environmentally sound technologies, reducing greenhouse gas emissions, and using natural resources responsibly across the entire product life cycle – from ore to food. In line with this commitment, the Company assesses the environmental performance of its suppliers. Among the 957 suppliers producing raw materials, fuel, energy, and commodities, 32% have a certified environmental management system in place, meeting ISO 14001 or an equivalent standard.

Item	2023	2024	2025
Total number of rated suppliers	2,418	2,685	2,826
Number of rated suppliers producing raw materials, fuel, energy, and commodities	908	949	957
Number of rated suppliers producing raw materials, fuel, energy, and commodities with an environmental management system certified to ISO 14001 or a similar standard	310	322	308
Share of rated suppliers producing raw materials, fuel, energy, and commodities with an environmental management system certified to ISO 14001 or a similar standard, %	34	34	32

Supplier social assessment

GRI 414‑1, 414‑2

PhosAgro Group is committed to a working environment free from discrimination based on nationality, gender, age, religion, or any other grounds. The Company does not tolerate disrespectful behaviour towards employees and prohibits child labour. These principles are shared by the Company’s counterparties, as evidenced by social assessment results showing that suppliers and contractors operate in line with corporate responsibility and ethical business standards.

Item	2023	2024	2025
Total number of rated suppliers	2,418	2,685	2,826
Number of rated suppliers that adopted a zero‑tolerance policy on child labour	1,511	1,852	1,853
Share of rated suppliers that adopted a zero‑tolerance policy on child labour, %	62	66	66
Number of rated suppliers in the categories “Producers of raw materials, fuel, energy”, “Commodity producers and intermediaries”, “Logistics services”, “Construction and installation, repairs”	1,926	2,129	2,197
Number of rated suppliers in the above categories that adopted a zero‑tolerance policy on discrimination	1,151	1,382	1,382
Share of rated suppliers in the above categories that adopted a zero‑tolerance policy on discrimination, %	60	63	63
Number of rated suppliers in the above categories that adopted a zero‑tolerance policy on forced labour	1,171	1,403	1,403
Share of rated suppliers in the above categories that adopted a zero‑tolerance policy on forced labour, %	61	64	64
Number of rated suppliers in the categories “Producers of raw materials, fuel, energy, and commodities”, “Logistics services”, “Construction and installation, repairs”	1,303	1,362	1,392
Number of rated suppliers in the above categories with an occupational health and safety management system certified to OHSAS 18001 or a similar standard	518	543	543
Share of rated suppliers in the above categories with an occupational health and safety management system certified to OHSAS 18001 or a similar standard, %	40	39	39