6. Segment information

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The Group has two reportable segments, as described below, which are the Group’s strategic business units. The strategic business units offer different products, and are managed separately because they require different technology and marketing strategies. The following summary describes the operations in each of the Group’s reportable segments:

  • Phosphate-based products segment includes mainly production and distribution of ammophos, diammoniumphosphate and other phosphate based and complex (NPK) fertilisers on the factories located in Cherepovets, Balakovo and Volkhov, and production and distribution of apatite concentrate extracted from the apatitenepheline ore, which is mined and processed in Kirovsk;
  • Nitrogen-based products segment includes mainly production and distribution of ammonia, ammonium nitrate and urea on the factory located in Cherepovets.

Certain assets, revenue and expenses are not allocated to any particular segment and are, therefore, included in the “other operations” line. None of these operations meet any of the quantitative thresholds for determining reportable segments. Information regarding the results of each reportable segment is included below. Performance is measured based on gross profit, as included in internal management reports that are reviewed by the Group’s CEO.

Business segment information of the Group as at 31 December 2012 and for the year ended is as follows:

RUB million Phosphate-based products Nitrogen-based products Other operations Inter-segment elimination Total
Segment revenue and profitability
Segment external revenues, 91,233 13,048 1,022 105,303
thereof:
Export 60,759 11,404 72,163
Domestic 30,474 1,644 1,022 33,140
Inter-segment revenues 3,175 (3,175)
Cost of goods sold (55,276) (7,632) (1,687) 3,175 (61,420)
Gross segment profit/(loss) 35,957 8,591 (665) 43,883
Certain items of profit and loss
Amortisation and depreciation (5,089) (688) (135) (5,912)
Total non-current segment assets 45,200 13,309 2,657 61,166
Additions to non-current assets 9,855 3,700 64 13,619

Business segment information of the Group as at 31 December 2011 and for the year ended is as follows:

RUB million Phosphate-based products Nitrogen-based products Other operations Inter-segment elimination Total
Segment revenue and profitability
Segment external revenues, 88,982 10,727 809 100,518
thereof:
Export 60,837 9,426 70,263
Domestic 28,145 1,301 809 30,255
Inter-segment revenues 3,629 (3,629)
Cost of goods sold (50,631) (7,495) (2,042) 3,629 (56,539)
Gross segment profit/(loss) 38,351 6,861 (1,233) 43,979
Certain items of profit and loss
Amortisation and depreciation (4,887) (413) (109) (5,409)
Total non-current segment assets 40,310 10,296 1,948 52,554
Additions to non-current assets 8,314 6,561 368 15,243

The analysis of export revenue by regions is as follows:

2012
 RUB Million
2011
 RUB Million
North and South America 24,380 28,287
Europe 16,822 16,197
Asia 9,051 6,396
India 7,454 12,029
Africa 7,579 3,016
CIS 6,877 4,338
72,163 70,263

The Group distributes its products globally through large independent traders and distributors. The sales volume may vary from one trader to another. In 2012, revenue from sales of phosphate-based products to one single trader amounted to approximately 10% (RUB 10,857 million) of the Group’s total revenue. In 2011, revenue to another single trader amounted to approximately 28% (RUB 27,725 million) of the Group’s total revenue.

2012
 RUB Million
2011
 RUB Million
Total segment revenues 105,303 100,518
Consolidated revenues 105,303 100,518
2012 
RUB Million
2011 
RUB Million
Total segmental profit 43,883 43,979
Difference in depreciation and amortisation (338) (77)
Difference in timing of expenses recognition 191 (168)
Reallocation of administrative expenses (145) (89)
Reallocation of selling expenses (160) (184)
Reallocation of other income 887 297
Reallocation of capitalized expenses 387
Elimination of unrealized profit (224) (8)
Recognition of finance lease 794 350
Other adjustments (108) 222
Consolidated gross profit 45,167 44,322
Total non-current segment assets 61,166 52,554
Difference in the carrying value of the tangible assets 5,915 5,502
Consolidated non-current assets 67,081 57,756
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