EuroChem is assigned score of GAMMA-6+

[ 21.07.09 11:15 ]

Standard & Poor's Governance Services said it has assigned GAMMA score (Governance, Accountability, Management Metrics and Analysis) of GAMMA-6+ on EuroChem Mineral and Chemical Co. OJSC (EuroChem), a major Russian fertilizer company. The GAMMA score replaces Standard & Poor’s Corporate Governance Score (CGS) assigned to EuroChem on 24 April 2006. Accordingly, the CGS was reviewed and withdrawn.

”Although a closely held company, EuroChem has institutionalized many elements of strong governance found at the best-governed public companies around the world,” says Standard & Poor's governance analyst Oleg Shvyrkov.

The strengths of corporate governance practices at EuroChem include:

-- The motivation of Andrey Melnichenko, the ultimate controlling shareholder, to raise the shareholder value of EuroChem and his support for improvements in governance mechanisms. Mr. Melnichenko is not involved in executive functions at EuroChem.
-- A strong board composition in terms of independence, level of expertise and the skill mix of its members. Three active board-level committees contribute to the board's effectiveness.
-- A clear and effective incentives plan for executives and a sound compensation plan for non-executive directors.
-- A high overall level of transparency. The company prepares its International Financial Reporting Standards (IFRS) statements quarterly and discloses them sooner than most Russian companies. A reputable international audit firm audits these accounts. EuroChem is one of the few companies to present social and environmental reporting in accordance with internationally recognized standards.
-- A wide measure of shareholder rights under EuroChem’s charter.
-- A solid strategic process.

The GAMMA score is based on an updated CGS methodology and introduces two new elements of governance analysis: the enterprise risk management system (ERM) and the strategic process.

The overall GAMMA score of EuroChem is the result of four component scores of 1 (low) to 10 (high).
-- Shareholder influence 6+
-- Shareholder rights 6
-- Transparency, audit and ERM 6
-- Board effectiveness, strategic process and incentives 6+
 
Information on corporate governance scores and GAMMA scores, including the related report "EuroChem: GAMMA Score ", is published on July 16, 2009.

The opinions expressed are the independent opinions of S&P’s Governance Services, a department of Equity Research Services, and do not reflect the opinions of other areas of Standard & Poor’s. Standard & Poor's GAMMA scores and other analytic services are performed as entirely separate activities in order to preserve the independence and objectivity of each analytic process. GAMMA scores are offered to companies in emerging markets, with the primary focus on Brazil, Russia, India and China (the BRIC countries).