The Strategy Committee

As part of the Committee’s responsibilities, all divisional and segment strategies, large-scale projects, M&A deals and other strategic proposals of management are reviewed and considered.

In 2013, the Strategy Committee membership was subject to several changes. Whilst the non-executive Chairman, Andrey Melnichenko, chaired the Committee throughout the year, the membership of non-executive directors in the Committee altered. The current members of the Committee, besides the Chairman Andrey Melnichenko, are Alexander Landia, who joined on 21 June 2013 as advisor and later appointed on 12 December 2013, and Garth Moore, who was appointed on 12 December 2013.

The CEO, CFO and Head of Strategy and Investment regularly attend meetings at the Committee’s invitation.

STRATEGY COMMITTEE MEETINGS AND ATTENDANCE

In 2013, the Committee held six meetings in person. The 2013 Strategy Committee attendance table is here.

OVERVIEW OF STRATEGY COMMITTEE ACTIVITY DURING 2013

Strategy and development

  • EuroChem Group’s 2013-2017 general strategy and business valuation
  • Segment and divisional strategies for 2014-2018:
    – Oil & Gas segment development strategy
    – Mining division strategy
    – Mineral fertilizers division strategy
    – Regional sales and logistics development strategies

Investment activity and strategic projects

  • Review of ongoing strategic investments and analysis of new strategic opportunities
  • Analysis of investment programme budgets and effectiveness of budgeting process and planning

Financing and budgeting

  • Monitoring financing plans for the Company’s investment projects and compliance with debt covenants
  • Approval of 2014 consolidated budget, including investment budget

Contemplated Reorganisation of the Company

  • Reorganisation of the Company: core architecture of business processes and plans for 2014
  • Reorganisation of commercial business processes
  • Review of the new business planning model
  • EuroChem Group’s target legal structure

Methodology

  • Changes to the investment planning standards
  • Changing the business valuation methodology
  • Changing processes in strategic investment planning and project management

PRIORITIES FOR 2014

Segment and divisional strategies for 2015-2019:

  • Oil & Gas segment development strategy
  • Mining division’s strategy
  • Mineral fertilizer division’s strategy
  • Regional sales development strategies
  • The aggregate strategy for the Sales & Distribution strategy
  • Logistics division strategy

Investment activity and strategic projects

  • Review of quarterly reports on strategic investment projects

Financing and budgeting

  • Evaluating EuroChem’s business and the Group’s general development strategy for 2014-2018
  • Budget execution as of 1H2014, and budget review for 2H2014
  • Approval of the 2015 budget

Contemplated Reorganisation of the Company

  • The Company’s new economic model: pricing, the structure of fi nancial
    accounting centres, cost and capital allocation
  • The targets state of and plans for reorganising the Sales, Logistics, and Purchasing functions
  • Regular status updates on the project to develop the Company’s management system
  • The Group’s legal reorganisation

Methodology

  • Strategic planning within the new economic model
  • Investment project management
  • Operational efficiency indicators