Directors’ report

Acron Group’s Board of Directors presents the Group’s annual report and audited financial statements for the year ended 31 December 2014.

Acron Group’s Activities

Production, sales and marketing of mineral fertilisers and by-products are the Group’s core business. Acron Group’s production facilities are located in the Novgorod and Smolensk regions of Russia and in China. In 2012, Acron launched the Oleniy Ruchey mine producing apatite concentrate in Murmansk region. The Group is also developing a project to construct the Talitsky potash mine in Perm Krai. Acron Group additionally owns transportation infrastructure and an international distribution network. Acron Group has assets in six countries and sells products to 66 countries.

More information about the Group is available in Strategic Report chapter.

Going Concern and Development Strategy

The Group’s activity, strategy and factors that could affect its future performance are describedin chapter Development strategy. Risks and Risks mitigation strategy present information on the risks associated with the Group’s strategic goals. Information on the Group’s financial standing and cash flow is presented in chapter Financial statements.

Analysis of the Group’s financial standing, development prospects and future cash flows gives the Group’s management reason to believe that Acron Group will continue its business on a going basis in the future.

Key Risks

Risk management is a key element of Acron Group’s long-term strategy. The Group is committed to mitigating risks, ensuring sustainability, creating the base for continuing growth and improving its competitive edge. Further information about key risks and measures undertaken to mitigate them is available in the Risks and Risk Mitigation Strategy chapter.

Financial Statements and Operating Results

The Group’s management believes that information disclosed in the Financial Overview and Operating Results that help shareholders make an impartial assessment of the Group’s performance in the reporting period.

Corporate Governance

Short biographies of Board of Directors and Managing Board members are available on pages Board of Directors and Managing Board.

Remuneration of Board of Directors and Managing Board Members

Information about remuneration to Board of Directors and Managing Board members is available on page Remuneration of Directors and Members of the Managing Board.

Statement by the Board of Directors on Compliance with the Corporate Governance Principles Established by the Corporate Governance Code

Acron’s Board of Directors is confident that stringent corporate governance principals are at the heart of the Group’s management system. Ongoing improvement of the Group’s corporate governance is a major task for management and the Board of Directors. The Board of Directors states that this task is performed on a continuing basis in order to enhance the Group’s efficiency and support investor confidence.

While non-binding, the Corporate Governance Code encourages public companies to introduce the best corporate governance practices and determines targets for improving corporate relations. The Board of Directors confirms the Group’s commitment to the corporate governance principles set forth in the Corporate Governance Code. The Group strives to implement the best corporate governance practices recommended to public companies by the Code.

The Group’s management is committed to creating and maintaining a governance model focused on increasing shareholder value. This goal can be achieved by a Board of Directors made up of professionals who set sensible priorities and pass strategic resolutions. We have no doubt that Acron’s leading position in the mineral fertiliser market is founded on its application of clear, correct corporate governance guidelines.

Detailed information on corporate governance is available in the Corporate Governance Report. Background information on compliance with the principles and recommendations of the Corporate Governance Code and its assessment by the Board of Directors is available on page of this report. A detailed report on the Group’s compliance with corporate governance principles established by the Corporate Governance Code as of 31 December 2014 is attached in Appendix 1. The Board of Directors confirms that the results of this self-assessment demonstrate a mature level of corporate governance in the Group.

Developing Local Communities

Acron Group is involved in the life of its footprint regions, implementing social and charity projects in compliance with the principles of transparency and cost efficiency.

To contribute to social and economic development in the regions of its operation, Acron Group’s companies work together with local governments under cooperation agreements to implement programmes furthering education, culture, science and sports. (Read more in Sustainable Development)

Annual general meeting

Acron’s annual general meeting will be held on 21 May 2015, at the Acron Cultural Centre (22a Lomonosov Street, Veliky Novgorod).

Responsibility Statement

We confirm that to the best of our knowledge:

  • The Group’s IFRS consolidated financial statements present an accurate and impartial picture of its assets, liabilities, financial position, profit and loss accounts, and of the consolidated companies as a whole.
  • This annual report provides an impartial description of the business and position of the Group and of the consolidated companies as a whole, along with a description of the key risks and uncertainties to which they are subject.

On behalf of the Board of Directors

Alexander Popov

Chairman of the Board of Directors

My Annual Report

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