Chairman of the CSR Committee statement

Sir Robert MARGETTS Senior Independent Director,
Chairman of CSR Committee

Throughout recent history up to the present day, the principles of sustainable development have been among the main priorities in the formulation of development strategies for Uralkali. On the basis of these principles, we take into account the interests of all stakeholders (employees, partners, investors, shareholders, government bodies, NGOs, the media and the residents of the surrounding region). We know that people expect stability, responsibility, openness and respect for the environment. And we strive to meet these expectations by consistently implementing our sustainable development strategy. By pre-planning our work for decades in advance, we are concerned about the welfare of future generations, and undertake these obligations voluntarily. In implementing the sustainable development strategy, we also rely on the company's values that unite all employees, regardless of what division and at which enterprise they work. Safety, responsibility, efficiency and teamwork are the foundation that allows us to move forward with confidence.

Environment and Industrial Safety

The activities of Uralkali are inextricably linked to the environment in which it operates. That is why, whilst fully being aware of its responsibility, the Company is strictly committed to the principles of environmental responsibility through compliance with environmental legislation, the rational use of natural resources and the continuous improvement of environmental protection activities and measures. The production activities of any mining company are associated with risks of negatively affecting the external environment. However, our main task is to carefully and fully implement risk-management and risk-minimisation measures in this regard. This is achieved by utilising advanced wastewater treatment technologies, optimising production and waste management systems, as well as supporting private initiatives by volunteers. In 2015, in parallel with the development of production capacity, the Company continued to invest in measures aimed at protecting the environment. In addition to current expenditure on the protection of air, water and land resources, Uralkali is investing in the modernisation of existing equipment and the installation of new purification equipment, personnel training, and the development of internal systems for monitoring and control, as well as carrying out research work. Our activities are primarily aimed at providing geological safety, energy efficiency and minimising impact on the climate, together with the protection of air and water resources and waste management. In 2015 alone, about 1.5 billion roubles was spent on environmental protection projects.

Geological safety is a critical factor in the development of the potash deposits and mining operations.

Uralkali constantly monitors the geological environment at all operated mine fields. Uralkali staff, experts and specialists work closely with independent Russian and international consultants and research institutes in this field.

Occupational Health and Safety

One of the Company’s top priorities is to ensure the absence of injuries, incidents, accidents and occupational health problems. We are aware of our responsibility, not only towards employees, but also towards their families and society as a whole. Therefore, we strive to create the best environment and systems for the conduct of work. However, achieving a zero rate of accidents is only possible if each worker adheres to the principal safety requirements which, after their introduction in 2013, have proven themselves to be effective in reducing injuries. In 2015, we were dismayed to incur three fatalities but the overall accidents frequency rate remained at the 2014 level. In 2015, the comprehensive program for the prevention of occupational accidents was enhanced. At all the mines of the Company, a mining and technical inspector was present continuously to audit and control safety rules. In 2015, in order to prevent occupational health problems associated with hearing loss among miners, the company purchased a batch of innovative headphones, equipped with an active noisereduction system. In addition, a number of other initiatives were implemented during the year, including the implementation of further industrial and fire safety measures, preventive health measures, education and personnel training.

Interaction with local communities

Uralkali operates in two cities of the Perm Region - Berezniki and Solikamsk. More than 99% of over 21,000 employees of the Uralkali Group of Companies have permanent residence in these towns and nearby communities. The wellbeing of our employees is our natural duty as a responsible employer, but we are also striving for corporate responsibility. An essential part of our activity is increasing the level and quality of life in the surrounding region. In 2015, we continued to work, both independently and in collaboration with local authorities, to fund a variety of projects aimed at improving city social infrastructure. In 2015, the total amount of social investment amounted to about US$28 million. As part of the programme for the resettlement of residents from old and dilapidated housing, the Company is working closely with regional and Russian federal authorities. In 2015, as part of its obligations under the programme's funding, the Company transferred 1.29 billion roubles to the budget of the Perm Region. The company also undertakes projects aimed at the promotion of a healthy lifestyle. In 2015, as in previous years, the Company is funding its own programme for the development of basketball.

In addition, with the assistance of the Company, a number of sporting events were held. Once again, in the city of Solikamsk, a judo national youth tournament was organised, as well as Greco-Roman wrestling national youth competitions. In addition, an open Sambo tournament was held, as well as a regional-level boxing tournament and a city festival of martial arts. Thanks to Uralkali support, Solikamsk kickboxers performed successfully during the World Cup Tournament in the City of Anapa. Disabled athletes also competed in the Russian National Team at the world championship in Poland, and triumphantly returned to their native city, Solikamsk. We continue to cooperate with leading regional educational institutions, and provide support in the form of personal scholarships to talented students of Berezniki and Solikamsk. The Company's employees actively participate in projects initiated by the Company, as well as independently in other initiatives such as citywide cleaning events for urban areas and surrounding regions, which are regularly held in the cities in which the Company operates.

Global Food Security

As a leader in the potash industry, we recognise the need for our involvement in one of the global challenges facing humanity - food security. The Company aims to not only produce potash fertilisers to meet the requirements of agricultural producers, but also to improve the efficiency of their use. In cooperation with international organisations and research institutions, Uralkali is carrying out a number of projects to improve crop yields in Russia and abroad. In addition, we regularly organise seminars bringing together experts, advisors and journalists to promote best agricultural practice.

I would like to thank Uralkali's Board of Directors, management and employees for all their efforts in the development and implementation of the best global practices in social responsibility. We will continue to work in all areas related to sustainable development for the benefit of the Company and society as a whole.

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Independent assurance statement by ZAO Deloitte & Touche Cis (‘Deloitte’) to the board of directors of Uralkali Open Joint Stock Company on the selected performance indicators disclosed in Integrated Report and stated in GRI Tables 2015 for the year ended 31 December 2015

deloitte
ZAO Deloitte & Touche CIS
5 Lesnaya Street
Moscow, 125047
Russia
Tel: +7 (495) 787 06 00
Fax: +7 (495) 787 06 01
www.deloitte.ru

Scope of our work and assurance standards we used

We have been engaged by Uralkali Public Joint Stock Company (“Uralkali”) to provide limited assurance on the selected performance indicators disclosed in Integrated Report and stated in GRI Tables 2015 available on the website of Uralkali.

We carried out limited assurance procedures in accordance with International Standard on Assurance Engagements 3000 (Revised) (“ISAE 3000 (Revised)”). To achieve limited assurance ISAE 3000 (Revised) requires that we review the processes and systems used to compile the areas on which we provide limited assurance. It does not include detailed testing of source data or the operating effectiveness of processes and internal controls. This provides less assurance and is substantially less in scope than a reasonable assurance engagement.

The evaluation criteria used for our assurance are the GRI G4 reporting guidelines.

Our key assurance procedures

To form our conclusions, we undertook the following procedures:

  • interviewed management and those with operational responsibility in relevant areas;
  • understood, analysed and tested on a sample basis the key processes, procedures and controls relating to the collation, aggregation, validation and reporting processes of the selected performance indicators;
  • reviewed the contents of the Integrated Report against the findings of the aforementioned procedures and, as necessary, provided recommendations for improvement.

We planned and performed our work to obtain all the information and explanations we considered necessary to provide sufficient evidence to support our assurance conclusion. Our work was planned to mirror Uralkali's own compilation processes, tracing how data for each indicator within our limited assurance scope was collected, collated and validated and included in the Integrated Report and GRI Tables 2015.

Roles and responsibilities

The Directors are responsible for the preparation of the Integrated Report and GRI Tables 2015 and for the information and statements contained within it. They are responsible for determining the goals, performance and for establishing and maintaining appropriate performance management and internal control systems from which the reported information is derived.

Our responsibility is to independently express a conclusion on the selected performance indicators included in the GRI Tables 2015 and disclosed in the Integrated Report as defined within the scope of work above to Uralkali in accordance with our letter of engagement. Our work has been undertaken so that we might state to Uralkali those matters we are required to state to them in this statement and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Uralkali for our work, for this statement, or for the conclusions we have formed.

Our independence

We complied with Deloitte’s independence policies, which address and, in certain cases, exceed the requirements of the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants in their role as independent auditors.

Conclusion

Based on the scope of our work and the assurance procedures we performed we conclude that nothing has come to our attention that causes us to believe that selected performance indicators stated in the GRI Tables 2015 available on the website of Uralkali and disclosed in the Integrated Report for the year ended 31 December 2015 is not prepared, in all material respects, in accordance with the applicable criteria.

ZAO Deloitte & Touche CIS
Moscow, Russia
13 April 2016

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms. Please see www.deloitte.ru/en/about for a detailed description of the legal structure of Deloitte CIS.

© 2016 ZAO Deloitte & Touche CIS. All rights reserved.

Member of Deloitte Touche Tohmatsu Limited




Environmental protection

In 2015, while expanding its production capacity, the Company continued to invest in initiatives to protect the environment. In addition to current expenditures associated with protecting the atmosphere, water and land resources, Uralkali is investing in the modernisation of existing machinery and the installation of new pollution control equipment, staff training, and the development of internal monitoring and control systems, as well as scientific research. The Company invested over 1.4 billion roubles in environmental protection in 2015 (relative to over 1.3 billion roubles in 2014).

Our approach

PJSC Uralkali focuses on measures to minimise the negative impact of its activities on the environment. Responsibility for preservation of the environment is an integral part of doing business.

The Company fully adheres to the requirements of environmental legislation, uses natural resources responsibly, and constantly introduces new environmental protection measures.

Why these issues are important to us

The highest level of production organisation and the use of advanced technologies enable PJSC Uralkali to successfully achieve its sustainable development goals. These include the efficient use of non-renewable resources and adherence to the highest environmental protection standards, aimed at minimising the impact of the Company's business on the environment.

Sustainability of ecosystems, biodiversity and a healthy environment are vital conditions for the wellbeing of future generations.

Key priorities
  • Reduction of waste discharges into water, balanced water consumption
  • Efficient waste management
  • Reduction of air emissions
  • Minimisation of energy consumption
Stakeholders engaged
  • Employees
  • Trade unions
  • Government and local authorities
  • Local communities

The Company strictly complies with the requirements of environmental legislation and internal environmental standards, constantly assessing environmental risks and ensuring transparency and openness of its operations.

Geological safety

The Company carries out the extraction of minerals at the Verkhnekamskoye deposit on the basis of technical specifications developed in accordance with applicable regulations and subject to examination and approval prescribed by the legislation of the Russian Federation.

The main condition for the development of the Verkhnekamskoye deposit is safe mining and preservation of the functional state of the undermined areas.

According to the legal requirements, the Company applies mining protection measures in the mined-out areas of mines, where it is technically possible.

In case of any restrictions in the use of mining protection measures, Uralkali takes advantage of its own complex monitoring system to identify potentially hazardous sections in a timely manner and to ensure protection for the local population.

The Company surveys and carries out visual monitoring of and undertakes geophysical and hydrogeological research in all its mines.

The frequency of monitoring is determined for each facility individually, and is in full compliance with all applicable safety requirements.

Uralkali cooperates closely with R&D institutes to perform in-depth studies into the environmental impact of its operations in the regions where it is present.

Uralkali has implemented special monitoring of the potentially dangerous area in the Solikamsk-2 minefield since 5 January 1995, when an earthquake led to the destruction of pillars and the formation of a soil subsidence area. To minimise the consequences of the accident, the Company backfilled areas around the collapsed zone.

On 18 November 2014, Uralkali detected higher levels of brine inflow in the Solikamsk- 2 mine and immediately introduced an emergency plan. All employees were evacuated from the mine. On 18 November 2014, at around 16:00, a sinkhole with a diameter of approximately 30x40m was discovered east of the Solikamsk-2 production site, outside the metropolitan area. The area around the sinkhole was immediately fenced off.

According to the Act of the technical investigation of the accident cause, the fresh water inflow into the worked-out areas of the Solikamsk-2 mine in November 2014 was the consequence of the mass collapse of rock in the mine during the accident in 1995. Thus, the cause of the accident on 18 November 2014 at the Solikamsk-2 mine was an emergency that was unavoidable under the given circumstances.

Currently the Company is implementing a number of engineering and other arrangements to minimise the impact of the accident and reduce suprasalt water inflows into the mine. To reduce water inflow into the mine, a dewatering system is arranged around the sinkhole, supplemented by plugging of the voids. To prevent adverse effects of the accident, the danger area within the mine of Solikamsk-2 has been outlined and outside such danger area backfilling operations are carried out with further monitoring of the situation. The enhanced monitoring is supplemented by a series of operational methods.

Energy and climate

As a result of the energy audit, a new Energy Saving Programme, which includes a set of organisational and technical measures aimed at reducing energy consumption, was approved. The programme started with the establishment of an energy-saving commission and the development of an incentive scheme. Investment projects with expected completion dates in 2017-2018 were initiated.

At the end of 2015, over 1,100 employees received awards for their performance in 2014 for conserving energy as part of the incentive scheme. Some of the money saved on energy in 2014 was allocated for rewarding employees.

In 2015, the implementation of technical measures aimed at reducing energy consumption continued. This work included the installation of over 66 frequency shifters for pumps and ventilation equipment. More than 24 condensate traps were mounted in the steam networks.

Uralkali continued to work on project documentation for previously initiated projects. Construction and installation work continued for some projects. In 2015, the Company increased power generation using its own facilities. The actual amount of electricity generated increased by 24% compared to 2014.

As a result of energy-saving measures,the Company conserved 106,721 MWh of electricity and 2.734 million m3 of water.


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Use of associated petroleum gas

As part of the Energy Saving Programme, the Company uses associated petroleum gas, which it purchases from oil and gas companies of the Perm region. This approach makes it possible not only to reduce natural gas consumption and to lower costs, but also to prevent the flaring of associated gas by oil companies, thus reducing global greenhouse gas emissions.

In 2015, the volume of associated gas used across the Group totalled 70.9 million m3.

Greenhouse gas emissions

Uralkali recognises that its operations are inextricably linked to energy consumption and result in greenhouse gas emissions. Greenhouse gas emissions from fertiliser production account for less than 1% of the global total.

In 2012, we joined the international Carbon Disclosure Project (CDP), which is the most authoritative source of data on global climate change, and has since been providing information on our activities to reduce greenhouse gases.

In the reporting period, emissions of CO2- equivalent gases across the Group amounted to 1.763 million tonnes, compared to 1.852 million tonnes in 2014, due to a decrease in potash production output, fuel consumption and total energy consumption.

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Atmospheric emissions

The Company’s enterprises have environmental protection departments which are responsible for emissions of pollutants into the atmosphere.

As part of the Company’s programme to expand its existing production facilities in 2015, Uralkali is upgrading its waste treatment equipment. As a result, the operational efficiency of treatment facilities is increasing, thus reducing the Company’s environmental impact.

In the reporting period, Uralkali’s pollutant emissions increased from 5.49 to 5.75 thousand tonnes year-on-year due to increased consumption of backup fuel (fuel oil storage tank cleanup before repair work). All atmospheric emissions from stationary sources are within the regulated limits.

Water resources

In 2015, total water intake for industrial needs and utility services at Uralkali decreased by 11.4% compared to 2014 and amounted to 18.65 million m3 (Not including water intake for third parties). The water intake from surface sources totalled 14.2 million m3 (not including water intake for third parties). Reduced water consumption is explained by the lease of Berezniki-1 to OJSC BSZ.

The Company aims to reduce consumption of water for industrial needs and minimise the impact of wastewater disposal on the environment.

The volume of water recycled and reused at PJSC Uralkali totalled 104.057 million m3 (the total volume of reused water in the system including industrial brines).

Waste management

Uralkali’s mining activities generate significant amounts of secondary resources and waste. Effective waste management begins with the adoption of measures to prevent environmental pollution. Preventative measures include refusal of or reduction of operating practices that pollute the soil, atmosphere and water bodies. The Company is guided by this principle in the design and operation of its facilities, as well as in business planning.



The amount of waste intended for use in own production has increased by 10% in the past three years, to 11.25 million tonnes in 2015, from 10.43 million tonnes in 2014 and 10.23 million tonnes in 2013.

In 2015, Uralkali continued to implement measures to achieve higher levels of waste management efficiency. Such measures included:

  • the introduction of state-of-the-art production solutions at both existing and new facilities to increase the recovery ratio of valuable components from ore, resulting in significant reductions in waste;
  • the backfilling of the mined-out areas of mines, thus reducing the environmental impact;
  • ongoing crushing of concrete slabs at a mobile crushing-and-sorting plant (16,608 tonnes crushed in 2014, 12,600 tonnes crushed in 2015).

Berezniki shaft construction administration, a subsidiary of Uralkali, acquired a mobile crushing plant to process large concrete slabs into crushed stone.

The introduction of this technology will reduce the burden on solid waste landfills and will enable the Company to reuse materials that remain after major maintenance of buildings and structures. The resulting crushed stone can be utilised for the bedding of temporary roads, dams and other waterworks and for temporary construction sites.

Previously, concrete slabs were disposed of at landfill sites; now the process is much simpler and more environmentally friendly. The new measures reduce the Company’s adverse impact on land resources (by decreasing the amount of waste sent to the landfill in Berezniki).

In 2015, the Company’s enterprises produced 31.3 million tonnes of waste (in 2014 – 34.77 million tonnes). More than 99% of this is industrial waste of hazard class V (halite waste and clay-salt slurries). Wherever possible, we look for ways to minimise waste by improving the relevant processes, including waste recycling.

Thus, halite waste is used for the production of:

  • saline solution, which is used in the production of soda;
  • industrial sodium chloride;
  • mineral concentrate “halite”.

Halite waste and clay-salt slurries are also used for filling the mined-out areas of mines. In 2015, the disposal of halite waste and clay-salt slurries at waste disposal facilities operated by the Company decreased by 36% (11,237 thousand tonnes) due to their use.

In the reporting period, waste disposal at the landfill decreased by 1% compared to 2014 and amounted to 37.37 thousand tonnes (the decrease has been observed over the past three years: in 2014 – 38.81 thousand tonnes, in 2013 – 41.88 thousand tonnes; compared to 2013, it amounts to 10.7%). This decrease is due to lower amounts of construction waste from the reconstruction of buildings and structures (using the crushing plant). Also, over the past three years there has been an increase in the tonnage of waste intended for own production use: in 2015 – 11.25 million tonnes, in 2014 – 10.43 million tonnes, in 2013 – 10.23 million tonnes (an increase of 10% compared to 2013).

Uralkali aims to increase the amount of hazardous waste transferred for use. In 2015, 54.9 thousand tonnes of I-V hazard class waste was transferred for re-use by the Company (in 2014- 39 thousand tonnes, an increase by 40.1%).

Public environmental measures

Uralkali actively engages with local communities in various environmental campaigns.

As part of its continued efforts to increase environmental awareness in communities, the Company took part in a number of projects in 2015, including:

  • Participation of employees in environmental campaigns ("Protection from Environmental Hazard Days", "Give Life to a Tree 2015", "Clean Banks for our Rivers and Lakes!");
  • Financing the environmental campaign "Protection and Preservation of Water Bodies";
  • Children's environmental workshops at the "Ural Gems" summer camp, and others.

As a result, we delivered nearly 300 tonnes of waste to the landfill and sent 3 tonnes of waste paper for recycling.

Based on the results of the "Protection from Environmental Hazard Days", the Company was awarded by the Berezniki town administration for the active participation in the 2015 campaign.

In 2015, at the Company's request, juvenile sterlet (sturgeon) was bred in the territory of LLC Dobryansky Hatchery Centre. According to environmentalists, this species of fish should play a positive role in the ecological balance of the River Kama. The total weight of more than 76 thousand juvenile fishes was about 230 kilograms.






Health & safety

In 2012, the Company adopted the HSE Policy. When adopting this document, Uralkali stated that health, safety and the environment are key priorities that should be taken into account in all actions and decisions, regardless of the line of work to which they relate.

Our approach

Safety is an unconditional value that must be an integral part of any action and decision. We understand that careless, thoughtless and irresponsible actions may have tragic implications not only for ourselves and our colleagues, but also for our families and friends. No achievement or economic benefit can justify loss of life or damage to a person’s health.

Why these issues are important to us

Absence of fatalities, incidents, accidents and occupational diseases is one of the key goals of an efficient business. Each employee expects to work in a healthy environment. At the same time, the Company expects its employees to follow the safety rules. Jointly supporting these principles, we will be able to bring our business to a higher level of performance and a sustainable future.

Key priorities
  • Absence of fatalities and incidents
  • Absence of accidents
Stakeholders engaged
  • Employees
  • Trade unions
  • Local communities
  • Media



Policy and strategy

In 2012, the Company adopted the HSE Policy. When adopting this document, Uralkali stated that health, safety and the environment are key priorities that should be taken into account in all actions and decisions, regardless of the line of work to which they relate.

Performance indicators

In 2015, the number of accidents at the Company’s facilities totalled 18. We regret to report three fatal accidents (two accidents happened at PJSC Uralkali and one at LLC Uralkali-Remont). All accidents were investigated and the Company adopted the necessary measures to prevent similar incidents.

The Group’s lost time injury frequency rate (LTIFR) has not changed compared to 2014.

In 2015, the lost days rate (LDR) across the Group increased by 20% compared to 2014.

Organisational and technical measures

Occupational safety

1) Following the investigation of accidents that occurred in 2015, the Company decided to toughen penalties for the violation of health and safety rules. The adopted Regulation of Disciplinary Action provided for tougher penalties for the heads of departments where violators work for non-compliance with the disciplinary procedure. The Company introduced a special procedure for the examination of violations that may lead to accidents, according to which Uralkali's Commission decides on the degree of culpability of all violators, including the heads of departments.

2) All mines were examined for unauthorised equipment.

3) In 2015, in accordance with the Special Assessment Law, the Company initiated assessment of working conditions for the occupations and jobs involving harmful and hazardous production factors at new workplaces in the Company's functional and production units.

4) The Group records all incidents that do not lead to temporary loss of working capacity, but just require first aid.

5) The hotline for reporting possible violations of health and safety rules continues to operate.


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Industrial safety

1) Due to legislative changes, the Company developed new and updated existing internal regulations.

2) Three industrial safety declarations for hazardous production facilities (hazard class II) were developed and approved.

3) In 2015, Uralkali received the Certificate of qualification of mine rescue crews issued by the Ministry of Industry and Trade. Those crews were formed from employees of Uralkali's mines who were qualified as rescuers.

4) At the Company's mines, a system of personnel positioning was installed and commissioned.

5) The Company completed the scheduled examination of industrial safety of technical devices, buildings and structures used at Uralkali’s hazardous production facilities.

Fire safety, civil defence and emergencies

In 2015, no fire or emergency situations were registered at the Company’s facilities. The number of fire outbreaks decreased by 41% and totalled 12 cases.

1) In September-October 2015, an independent fire safety audit of the Company's facilities was conducted. Based on the proposals of the auditors, the Company is developing plans for 2016-2018 aimed at reducing the risk of fires breaking out and spreading at the Company's facilities.

2) Over 800 existing fire alarm and fire extinguishing systems and installations for the surface complex, as well as warning systems for civil defence and emergencies, were serviced.

3) As part of the technical re-equipment of professional rescue units engaged in mine rescue and fire protection operations at the Company's facilities, a fire tanker mounted on the chassis of an Ural off-road truck (AC-3.0-40 (43206)) was purchased.

4) The Company continued pilot operation of an alternative automatic fire-extinguishing unit based on mist-sprayed water, "Typhoon-60UK" at Berezniki-4.

5) The Company carried out maintenance of primary fire extinguishing means (fire extinguishers). During the year, over 25,000 fire extinguishers were tested, repaired and recharged.

6) The certification of existing systems for monitoring and control of engineering systems of buildings and structures (ESM) was completed. In 2015, the Company developed three certificates with descriptive and graphical parts for Berezniki- 2, Solikamsk-2 and Solikamsk-3.

7) The Company completed work to form, train and assess emergency response units. The Industry and Trade Ministry issued certificates for gas rescue units (NASF) consisting of more than 60 employees of the surface complex employed at Berezniki-2, Berezniki-3, Berezniki-4, Solikamsk-1, Solikamsk-2, Solikamsk-3 of PJSC Uralkali.

8) Scheduled comprehensive exercises were conducted to prepare employees for natural and man-made emergency situations and civil defence warning signals.

9) The Company maintained its civil defence structures in proper working order, adopted and scheduled measures to improve their protective properties. Based on the results of local review competitions, the Company's civil defence structures received awards and were recognised as superior to similar structures of Perm region.



Making employees aware of the latest health and safety requirements and developing a culture of compliance play a key role in ensuring workplace safety.

Health

In 2015, the Federal Scientific Centre for Medical and Preventative Health Risk Management Technologies examined the study group (56 employees) of Berezniki-2 and the control group (67 employees) of the engineering and technical personnel of the Company's administration.

As a result, the scientists identified two genes with the greatest pathogenic significance for the studied deterioration of health that are diagnostic markers of conditions prior to the development of hypertension. A programme of primary prevention of hypertension was proposed, and preventive measures were taken in respect of workers involved in enrichment processes. A set of measures will reduce the risk of hypertension and, as a consequence, the number of temporary disability cases.

Training and briefing

Making employees aware of the latest health and safety requirements and developing a culture of compliance play a key role in ensuring workplace safety. Before starting work at Uralkali’s production facilities, the Company’s employees receive workplace training. Ensuring workplace safety and monitoring employee compliance with safety requirements are part of the responsibilities of all foremen and supervisors.

Training and certification in 2015:

  • In the field of industrial safety – 7,663 employees;
  • In the field of occupational safety – 1,881 employees;
  • In the field of emergency situations and civil defence – over 3,500 employees;
  • In the field of fire safety – 8,613 employees.

Our plans for 2016

Re-licensing of the Company's operations at explosive and chemically hazardous production facilities (hazard classes 1, 2, 3).

Collection and compilation of data on the number of technical devices, buildings and structures at the Company's hazardous production facilities, subject to examination of industrial safety to extend the period of safe operation, as well as the preparation of a strategic plan for expert examination of industrial safety.

Development of the safety case for deviation from the requirements of the Federal Regulations "Safety Rules for Mining and Processing of Solid Minerals", which are technically unjustified, due to the specifics of potassiummagnesium salt extraction by underground methods.

Development of the procedure for identification and assessment of accident risks; planning of measures according to the risk level at hazardous production facilities of the Company.

Preparation of hazardous production facilities of the Company for a planned inspection by Rostekhnadzor's central bodies in September 2016.

Continued phased upgrade of rescue and firefighting machinery and equipment in professional units, as well as non-professional teams for the continuous performance of rescue functions in accordance with the applicable laws.

Protection of hydraulic structures of processing plants Berezniki-2 and Solikamsk-3 using local warning systems (LWS) in the event of emergencies.






Our people

Руслан ИЛЬЯСОВ
Ruslan ILYASOV Human Resources Director

It is important not only to motivate and develop our personnel, but also to organise its activities in the most efficient way. We strive to consistently improve the productivity of each employee.

One way to achieve this goal is through our "Programme 2020", aimed at the most optimal use of all types of resources, introduction of new technologies, efficient labour organisation to maintain our leading position in the market.



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Our approach

As one of the most attractive employers in Russia and an acknowledged leader in the global potash market, Uralkali creates an environment for the career and professional growth of its employees, as well as actively working to increase staff engagement and efficiency within the Company (the development of initiatives, benefits package and competitive salaries). We are chosen by those who seek professional development and strive for self-improvement. We, for our part, welcome talented young people and professionals who are ready to share their experience and knowledge.

Uralkali implements programmes to increase employee loyalty, offering competitive salaries, a comprehensive benefits package, and a variety of training and development programmes.

Policy and strategy

Our functional strategy in human resources management aims to increase productivity and provide the business with qualified people. Part of our strategy at all levels is talent management, which allows Uralkali to control staff turnover.

This is connected with the ongoing tight labour market situation in Berezniki and Solikamsk, where the Company’s main production facilities are situated: low unemployment levels and a reduced working-age population complicate the search for and attraction of new professionals and mean that we compete for the most qualified employees. Both attracting and retaining staff are important to the Company.

Activities and results

Our team

The total number of Group employees amounted to 21,294 people (as of December 2015). Uralkali’s production facilities are located in the towns of Berezniki and Solikamsk (Perm region, Russia), that is why 99.6% of the Group’s employees come from the local population.

Motivation

Uralkali’s compensation system is built upon uniform principles, i.e. based on personnel grades and taking into account the complexity and importance of each role. Thus, employees and their direct supervisors can influence the amount of remuneration.

The evaluation of the Company's employees and business units is based on key performance indicators (KPIs).

Each year, Uralkali assesses wage levels in the Perm region. The results of this analysis are taken into account when deciding the rate of annual indexation of staff salaries, as stipulated in the Collective Agreement.

Professional and career growth

One of the reasons for Uralkali’s status as an attractive employer is the potential for professional and career growth within the Company. The most popular educational opportunities include programmes such as “Talent Pool” and the “Foreman’s Academy”, the "Supervisor's Academy", "Coaching and Facilitation Institute" and a training programme for future mid-level managers, as well as a training centre owned by the Company.

This year, the Company organised its second “Development and Career Week”, which was attended by employees and students from schools and colleges. Each group had its own set of activities.

In 2015, we launched innovative projects to provide employees with opportunities for personal fulfilment and making their own contribution to the Company's development:

  • "Initiative", aimed at engaging personnel in solving complex production issues;
  • "TRIZ", intellectual project, which allows to "calculate" new ideas, find unconventional solutions to complex production and strategic problems.

The Company has also implemented a highly efficient system of organisation and rationalisation of workplaces – 6C. The project involves production units, office buildings of the Company and its subsidiaries.

In 2015, Uralkali opened its Corporate University, bringing together all training programmes, so that employees can use any learning formats – classroom and online – and develop their potential, build up competence.

The students from schools and colleges enjoyed vocational activities, through which they were able to learn more about Uralkali and the types of candidates it looks to hire.



Why these issues are important to us

The successful realisation of a business strategy is entirely dependent on people: their management skills, professional knowledge and commitment to the Company’s values and corporate ethos. Therefore, Uralkali creates ideal conditions for professional growth and career progression and develops ways to build and strengthen Company loyalty and team efficiency

Key priorities
  • Increase workforce productivity
  • Develop management skills to ensure the stability of our management team
  • Maintain favourable working conditions to protect the life and health of employees
Stakeholders engaged
  • Employees
  • Trade unions
  • Government and local authorities
  • Local communities

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Social benefits

In 2014, employer and employee representatives decided to extend the term of the Collective Agreement for the next three years and maintain the social benefits and guarantees.

The employment benefits provided by Uralkali include: an optional health insurance programme, periodical and extensive medical examinations; reimbursement of meal costs; health resort offers for employees; a housing improvement programme; summer holidays for children of employees; partial compensation for the cost of sports; corporate Olympiad events; free transportation to work and back; Christmas gifts for children of employees; financial assistance in various situations; lump sum remuneration in connection with retirement and the “Attention and Care” programme for retired former Uralkali employees. Our social programmes cover the entire Group of companies.

In 2015, the Company organised traditional Health Days. Each employee received important information about available preventive services and treatments, and participated in various activities.



The professional attitude to work demonstrated by each member of our team contributes greatly to the leadership position of Uralkali. The development of a close-knit and effective team is the responsibility of each employee.


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Corporate culture

The professional attitude to work demonstrated by each member of our team contributes greatly to the leadership position of Uralkali. The development of a close-knit and ef fective team is the responsibility of each employee.

The corporate culture is t he foundation that holds the team together and makes it a single entity. That is why all divisions of the Company participate in its development. The basic r ules of interaction within the Company are reflected in the Code of Corporate Culture – a binding document for all Group companies. In addition, the corporate culture is formed and maintained by means of large-scale events for employees and an ef ficient communication system. The tools of internal communications include corporate events, a well-developed network of information channels, etc.

In 2015, in connection wit h the new business environment, a need to transform the corporate culture so t hat it can better meet the needs of our business became apparent. New values were presented to our employees for consideration. All the Company's units were involved in this work. Currently we are preparing a new version of the Code of Cor porate Culture with revised values.



The corporate culture is the foundation that holds the team together and makes it a single entity. That is why all divisions of the Company participate in its development. The basic rules of interaction within the Company are reflected in the Code of Corporate Culture.

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Feedback

Group companies arrange regular informational meetings for personnel. These include meetings with Uralkali's CEO, Directors of subsidiaries and affiliates, as well as Directors of the Company's mines.

The activities, during which employees can learn a lot about the Company and ask questions of interest, are very popular.

The Group also runs its Call-centre and an ethical representation working group that enhance the Company's efficiency, improve the operations of all business units, as well as mitigate the risk of conflicts and violations in the Company, and in some cases prevent them.







Our communities

In 2015, the Company continued its work with the local authorities through partnership agreements aimed at ensuring the long-term effect from investments in key social projects in the field of socioeconomic development of the territories. A number of Uralkali’s employees participate in the work of local government, such as the Berezniki Town Duma and Solikamsk Town Duma. At a regional level, the Company collaborates with the governor’s office and the government of the Perm region.

Our approach

Uralkali regards its involvement in the social development of the regions where it operates as vital to the successful growth of the business. In all activities, the Company aims to strike a balance between its own interests and those of its employees and stakeholders.

Why these issues are important to us

Realisation of major projects is a very demanding task without an open dialogue within society, as we work for sustainable development in the territories where the Company operates. We improve the living standards of local communities and create a close partnership with society.

Key priorities
  • Socio-economic development in the regions where we operate
  • Provision of comfortable and safe living conditions
  • Partnership
  • Trust and efficient dialogue with local communities and authorities
Stakeholders engaged
  • Employees
  • Government and local authorities
  • Local communities

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Activities and results

In 2015, Uralkali continued to implement its social investment policy aimed at sustainable development in the regions where it operates. Social investments in 2015 amounted to about US$28 million.

Social and economic development in the towns where we operate

In addition to providing stable employment and meeting its tax obligations, the Company undertakes voluntary commitments to create comfortable living conditions in Berezniki and Solikamsk, where its main production facilities are located.

Encouraging sports

In 2015, Uralkali continued to support the development of physical education and sports in the regions where it operates.

With the Company’s assistance, a number of sports competitions were held. An all-Russia judo tournament among teenagers was once again organised in Solikamsk, together with a nation-wide youth competition in Greco-Roman wrestling. During the year, Uralkali also supported volleyball and hockey teams from Solikamsk to participate in regional competitions, and local figure skaters to prepare for the championship of the Volga Federal District and the Russian championship.

The Company provided financial assistance to the Swimming Federation of the Perm region in the arrangement of a training camp for leading athletes of the Perm region and the organisation of all-Russia competitions in the region. The Company also supported the All-Russia Football Association in the town of Berezniki, so that young players could participate in a competition in the city of Nizhny Novgorod.

The Company provided material and technical support to sports organisations.

In Berezniki, we implemented a large-scale project including the arrangement of recreation areas, which included a "street workout" area and a children's playground. Such facilities were installed in 8 residential districts of the town, supplemented by a playground at the Solikamsk Orphanage.

As part of the project to develop basketball as a mass sport for children and teenagers in Berezniki and Solikamsk, in 2015 Uralkali supported 28 basketball centres which trained 1,570 children. More than 100 teams participated in town streetball championships.

Resettlement programme

The Company’s representatives are working closely with regional and federal authorities to implement a programme for the resettlement of residents from buildings in disrepair.

In 2015, Uralkali transferred US$21.2 million1 to the budget of the Perm region. The total amount of Uralkali's support provided to the programme for the resettlement of Berezniki residents in 2013-2015 totalled US$56.6 million2. Thus, the Company has fully fulfilled its part of funding obligations.

The budget of the Perm region also provides for funds in the amount of US$56.6 million2 for the implementation of measures to resettle Berezniki residents. A comparable sum will be allocated from the federal budget, including US$20.5 million3 in 2015. The funds will be used for the relocation of people living in 97 buildings with a total area of 247 thousand m2. In the coming years, it is planned to build more than 250 thousand m2 of new housing on the right bank of the Kama River in Berezniki.

Culture and education

Year after year, Uralkali encourages creative development and takes care of the education of the younger generation. For several years, the Company has supported the competition "Teacher of the Year" in Solikamsk, as well as the "Formula of Success" ceremony, which recognises the achievements of talented children and teachers of the town. With the help of the Company, a project for the development of vocal art and search for talented young performers "Voice. Children. Solikamsk" was implemented in 2015.

The International Theatre Festival "Post Efremov Space" was a big event for Berezniki. Funds allocated by Uralkali made it possible to complete the equipment of Solikamsk and Berezniki schools with video surveillance systems to ensure safety in educational institutions.

Preparing for the celebration of the 70th anniversary of the Victory in the Great Patriotic War, the Company helped renovate the Memorial to those who died of wounds in the hospitals of Solikamsk, and allocated funds for the Veterans' Council to organise celebrations.

Support for municipalities

In 2015, Uralkali supported municipalities in solving local problems:

  • road repairs in the Solikamsk area;
  • vehicle purchase for the transport connection with remote communities of the Solikamsk municipal area, as well as for municipal needs of the Rodnikovskoye rural settlement of the Solikamsk district;
  • repair of the Basim community center (Basim village Solikamsk district);
  • continued construction of a gas pipeline between Solikamsk and Chertezh.

In addition, the Company allocated funds for the purchase of medical and general-purpose furniture for the children's hospital of Solikamsk.

Support for NGOs and religious organisations

Uralkali regards the activity of NGOs and religious organisations as an important element of the social environment, which serves to maintain stability in the territories where the Company operates.

In 2015, Uralkali allocated funds to the church in honour of the Praise of the Holy Virgin Theotokos, in the village of Orel, Usolsk district, to construct a Sunday school. During 2015, the Company actively supported the construction of St. Nicholas church, which will be attended by over 1,500 churchgoers.

Charity and sponsorship

As part of the international exhibition "Chemistry- 2015", bringing together over 500 delegates from Russia, CIS countries and abroad, Uralkali acted as the official sponsor of the III Moscow International Chemical Forum, organise with the support of the Ministry of Industry and Trade of the Russian Federation.

In 2015, Uralkali supported the Perm National Research Polytechnic University, in particular, funded the erection of monuments to prominent people in the field of science and education as part of the University's anniversary celebration.

The Company assisted the Perm Cadet Corps of the Volga Federal District named after the Hero of Russia F. Kuzmin in purchasing equipment and preparing a new building for the comfortable stay of students.

In 2015, the Company allocated funds for the Town Days in Berezniki and Solikamsk.

Uralkali regularly supports disadvantaged groups of the population. In particular, in 2015 the Company paid for the development of design and estimate documentation for the overhaul of a building of the Solikamsk Orphanage.

1 Commitment is determined in RUB and amounts to 1.29 billion (for the conversion the average exchange rate for 2015 was used: 60.96 US$/RUB).

2 Commitment is determined in RUB and amounts to 2.54 billion (for the conversion of each payment the average exchange rates were used for 2013,2014 and 2015, respectively).

3 Commitment is determined in RUB and amounts to 1.25 billion (for the conversion the average exchange rate for 2015 was used: 60.96 US$/RUB).