1979 - 2019 REPORT DEVELOPMENT SUSTAINABLE 2019 RHYTHM IN ASINGLE

CONTENTS

OF THE REPORT CHAPTER 2 CHAPTER 4 CHAPTER 5 PRODUCTION, SAFETY AND SALES HUMAN CAPITAL ASSETS ECOLOGY, ENVIRONMENTAL OF PRODUCTS AND FORMATION PROTECTION AND PERSONNEL SAFETY OF A PROFESSIONAL TEAM 2.1. Types of products and production volumes ...... 39 Address of the General Director of the 2.2. Ensuring supply of raw materials and equipment ...... 41 Company ...... 6 2.3. Production efficiency ...... 41 About the Report ...... 8 2.4. Program of modernization and revamping of 4.1. The Company staff and formation 5.1. Environmental policy of the Company .. 69 Key indicators and achievements in 2019 .... 10 production facilities ...... 42 of a professional team ...... 57 5.2. Environmental impact ...... 70 Company development history ...... 14 2.5. Construction of Urea Plant No. 3 ...... 43 4.2. Training and professional development .... 59 5.3. Energy efficiency ...... 71 Awards of the Company ...... 20 2.6. Restructuring of the repair service ...... 45 4.3. Remuneration system ...... 61 5.4. Ecological activities ...... 72 40 years of the Company`s achievements .... 22 2.7. Sales markets and transportation of products ...... 47 4.4. Social support of employees, incentives 62 5.5. Industrial safety, health and labour 2.8. Laboratory research and development ...... 48 protection ...... 73

CHAPTER 1 CHAPTER 3 CHAPTER 6 STRATEGY AND VISION OF ECONOMIC DEVELOPMENT OF THE REGION SUSTAINABLE DEVELOPMENT SUSTAINABILITY OF PRESENCE. CHARITY

1.1. Company overview ...... 25 3.1. Economic growth indicators ...... 51 6.1. Company policy on development 1.2. Company governance structure ...... 26 3.2. Company`s assets ...... 53 of the region ...... 79 1.3. Company`s strategic priorities ...... 27 6.2. Environmental initiatives ...... 81 1.4. Risk management in the field of 6.3. Social projects, charity ...... 82 sustainable development ...... 29 1.5. Stakeholder engagement ...... 34 1.6. Innovation development of the Company ...... 36 ADDRESS OF THE GENERAL DIRECTOR OF THE COMPANY 7 ADDRESS OF THE GENERAL DIRECTOR OF THE COMPANY

2019 is an anniversary year to develop the production site. To process control system, which Care for the environment is for Togliattiazot. The Company increase operating efficiency, it is allows minimizing the influence one of the main tasks for TOAZ. In celebrated its 40th anniversary with planned to bring the repair service of the human factor, increasing 2019, more than 254 million rubles significant successes in all areas in line with the best practices in the the reliability, safety of equipment was allocated for environmental of activity. Thus, a record level frequency and duration of shutdown operation and maintaining an protection, thereby air and water of 3 million tons of annual output repairs, increase labor efficiency optimal process mode. basins protection programs, as well of ammonia in the entire history and reduce gas consumption. An important moment for as programs aimed at reduction of the was achieved. In addition, TOAZ Changes in the structure of sales the further growth of production harmful effects of industrial waste, increased its urea output by almost in the foreign and domestic indicators of TOAZ was the signing are successfully implemented. The 19% up to 784.6 thousand tons. This markets, as well as improving the of a three-year gas supply contract company systematically implements indicator is the best for the Company commercial conditions for the with Gazprom Mezhregiongaz programs to reduce impact on the over the past twelve years. Successful main products with key customers, Samara LLC at the end of 2019. Thus, environment. sales activities allowed the company should contribute to increasing the enterprise guarantees for itself The new year sets new tasks for in the reporting year to become commercial efficiency. As part of the long-term supplies of the key raw the management and employees of the largest supplier of urea to the development of the production site, material and will be able to increase Togliattiazot. In difficult conditions, agricultural market of the Russian it is planned to build Urea Plant No. accuracy of prognosis of expenses we should maintain leadership Federation. During the reporting 4, an Ammonium Nitrate and Urea which constitute a significant part in positions in the Russian and global period, TOAZ demonstrated Ammonium Nitrate Plant, as well as the production cost. markets, developing production, excellent results in energy efficiency. to complete the construction of a It is worth noting individually ensuring a decent standard of living TOAZ became the best in terms of fertilizer transshipment terminal in that highly qualified employees not only for employees and their labor efficiency in the region. Taman. are the basis for the successful families, but also for all residents Abovementioned and many The construction of Urea Plant implementation of all planned of the city and the region, moving other achievements became possible No. 3 is currently in progress. In projects. The TOAZ team is an forward in terms of strengthening due to the systematic modernization November 2019, the foundation example of solidarity and hard the economy of Samara region and of the factory`s capacities and the of one of the key elements of work. The company takes care of its the entire country. I am sure that involvement of each TOAZ employee the facility, a Prilling Tower, was employees, providing them with all taking into account the accumulated in an effective work process. completed. At the end of the year, kinds of support. Thus, the program experience and the constantly At the end of 2019, a new large-scale equipment manufactured for provision of corporate housing, growing production and labor enterprise development strategy by the Swiss company CASALE launched in 2018, is in full swing, indicators, it is within our scope until 2025 was adopted. For the S.A. was delivered at the site, its under which the company allocates of abilities. At the same time, we first time, it formalized the mission installation will begin in the summer apartments for families of employees understand that any progress is of the Company: “We care about of 2020. The implementation of the as per a planned program. possible only with strict compliance land fertility and productivity for project for construction of Urea Plant TOAZ is one of the major with the rules of industrial safety, the benefit of the whole world”, No. 3 will increase the existing urea employers of the city; it takes an improvement of the labor protection as well as stated ambitious goals: production capacity of the enterprise active part in projects of social system and social policy. I am leadership in the production of by 70%. Commissioning of the Plant significance and contributes to grateful to each employee for his/ nitrogen mineral fertilizers in Russia is scheduled for 2021. development of the general cultural her invaluable contribution to and becoming one of the five largest In 2019, TOAZ completed the and educational environment of the overall success and I urge to producers in the world. According overhaul of Ammonia Plant No. Togliatti. The company continues continue, without reducing efforts, to the new development strategy 3. This project has become one to implement awareness-raising, the course of TOAZ development! of Togliattiazot, the enterprise is of the largest in the history of the educational, cultural, charitable, faced with an ambitious task to enterprise in terms of scope of sports and environmental projects. significantly increase production work and investment. The Plant Among those projects which indicators (including production of received modernized turbine, attracted wide public interest are ammonia by approximately 40% up compressor, rotating equipment and such as the city lectures “Chemistry to 4.15 million tons per year, of urea a new control system. Technical of the Word”, a unique educational by more than 2.5 times up to 2.53 re-equipping made it possible to program for the elderly “Chemistry million tons per year) and increase stabilize the operation of the plant of Experience”, a charity program EBITDA by 3.3 times. Investment and reduce the consumption of “Chemistry of Good”, a scholarship Best regards, in production development will natural gas per ton of product by program for young talents “Impulse”. Dmitry Mezheedov amount to 112 billion rubles. almost 10%. In addition, quality of Togliattiazot is in constant search of General Director of CJSC To ensure such growth, it is control of the technological process new vectors for the social and cultural Corporation Togliattiazot, planned to increase operating and has increased due to introduction of development of the Company, its the managing company commercial efficiency, as well as the advanced Honeywell automated hometown and its inhabitants. of PJSC TOAZ ABOUT THE REPORT 9 ABOUT THE REPORT

SUBSTANTIVE AND PRIORITY TOPICS TO BE INCLUDED IN THE REPORT

When preparing the Report for 2019, internal and external environment of development, a list of topics was formed the Company applied the Sustainable the Company with the involvement of that are significant and mandatory for Development Reporting Standards of stakeholders. The results of the analysis disclosure in the Report. the Global Reporting Initiative (GRI of the materiality of aspects of sustainable In 2019, as well as in 2018, when Standards) as a methodological basis. development carried out in 2015–2018 creating the Report, the Company To disclose the most relevant topics were taken into account. focused on the results of the analysis in the Report, the Company analyzed Based on the results of the analysis, of the significance of sustainable the materiality of aspects of sustainable taking into account the principles of development aspects (conducted in development for individual indicators completeness, materiality, interaction 2015) in accordance with the approach. and for topics identified in the GRI with external and internal stakeholders, The identified aspects remain relevant for Standards, based on a study of the as well as the context of sustainable the designated reporting period.

This Report discloses in more detail a number of issues related to the priorities of the Company`s activities in the field of sustainable development in 2019. The sources of information in the field of sustainable development are statistical and management reporting. To show the dynamics of the results and ensure visualization of the data, key indicators are presented both for the reporting period, and for several previous years.

ECONOMIC SOCIAL ENVIRONMENTAL

• Economic • Employment • Energy The Sustainable Development 2019 identifies the main topic of the historically, were and are the basis of performance • Water Report (hereinafter – “the Report”) Report, i.e. “40 years of achievements: its development. • Occupational health • Emissions of Public Joint Stock Company modernization and development”. In The target audience of the • Market presence and safety • Wastes and discharges Togliattiazot (hereinafter – “the an unstable economic and political Report is traditionally a wide range • Compliance with Company”) for 2019 continues the environment, TOAZ is trying not only of stakeholders of PJSC TOAZ, • Indirect economic • Employees training environmental practice of annual disclosure of to keep production output and sales including employees, shareholders impacts and education requirements non-financial corporate statements. in the same volumes, but also to and investors, residents of the regions • Investments It contains a comprehensive increase these indicators. Certainly, as of presence, public organizations, • Local communities in environmental description of production, economic, TOAZ is a first hazard class enterprise, clients and partners of the Company. protection environmental and social indicators the safety is its fundamental priority, The enterprise has various channels for the period from January 1, 2019 to which affects all the aspects of the for obtaining feedback. Comments December 31, 2019. Company`s activities: occupational and suggestions on the sustainable The Sustainable Development and industrial safety, production development reports are accepted Report of PJSC TOAZ for 2019 was facilities modernization program and by phone and e-mail specified in prepared in accordance with the development of internal business the Contact Information section. All Global Reporting Initiative Guidelines processes. received messages are considered and for Sustainable Development, version Support for the team, care for taken into account in the process of Information on disclosure of 4.0 (Global Reporting Initiative - GRI, the region of presence and the working on the next Report. LIMITATIONS indicators with scopes other than CHANGES G4, hereinafter referred to as “the environment come to the forefront and This Report serves as one of the those described above are provided IN THE REPORT Reporting Guidelines”), the basic become the foundations for sustainable instruments for creating a favorable OF THE REPORT in the respective descriptions, tables version (Core). development of Togliattiazot. The image of PJSC TOAZ as a socially The preparation of Sustainable and charts. The key performance The present Report like The analysis of the Company`s abovementioned guidelines for the responsible company for authorities, Development Reports in the Company indicators of the Company in the the Sustainable Development priorities and the events held in Company`s activities were formed local citizens, and other stakeholders. is carried out at the corporate field of sustainable development for Report of PJSC TOAZ for 2018 level and includes consolidated 2017–2019 are presented on page 10 was completed in line with GRI All Company Reports are available on the official website of PJSC TOAZ: www.toaz.ru. information about PJSC TOAZ. of this Report. Guidelines version 4.0. 11 KEY INDICATORS AND ACHIEVEMENTS IN 2019

STABLE POSITIVE DYNAMICS ALLOWS PJSC TOAZ TO KEEP THE LEADERSHIP • 130 employees of the Company obtained apartments under the corporate housing POSITION AMONG INDUSTRIAL ENTERPRISES program OF RUSSIA AND THE WORLD. • Launch of a corporate professional skill competition for mentors

• 40th anniversary of factory football PRODUCTION LABOUR PROTECTION EMPLOYEES • Nadezhda health resort celebrated the 20th anniversary • 556 people took a course of treatment in Nadezhda health resort with subsidized MILLION MILLION 4 110 vouchers 3.9 TONS 200.6 RUBLES EMPLOYEES ARE IN THE TEAM OF THE COMPANY IS THE TOTAL WAS ALLOCATED FOR LABOUR PRODUCTION OUTPUT PROTECTION AND OCCUPATIONAL • The average salary of TOAZ employees is 51.33% higher than the average salary in SAFETY Samara region (35 274 rubles, according to Rosstat data) • Shipment of 60 million tons of ammonia since the start-up of the factory • 100% of employees are provided with the LTIFR VHI program • 3.019 MILLION TONS IS ammonia output 0.58 • 400 VHI policies were received by family members of employees • 784.6 MILLION TONS urea output • 140 million rubles was allocated for identified occupational medical support and health improvement • 12 million tons is the product output diseases of employees since start-up of AMMONIA 0 PLANT NO. 2 • 28.5 million rubles was allocated for training • 215 children of employees received an • Start of the maintenance and repair invitation to the First-Grader Day system improvement program • Launch of the online training system • More than 3 million rubles has been • Procurement of 50 mineral hoppers for • More than 13 thousand people spent on children`s recreation; 174 transportation of urea underwent occupational training and children of the company`s employees advanced training visited the leisure and health centers, • More than 1.9 million tons of ammonia has 100 of them had holidays on the Black been pumped through the Togliatti-Odessa • 240 applications with ideas were Sea coast in August. According to the pipeline submitted as part of the incentive Collective Bargaining Agreement, the program “YIW: Your Idea Works”, 109 of parents paid only 30% of the cost of the • Production capacity volume of AMMONIA which were accepted for implementation voucher PLANT NO. 7 totalled 620 000 tons • 119 students had the work experience • 1300 of the retired, the members of the • Completion of scheduled overhauls and internship at TOAZ within the framework TOAZ veteran organization, received gifts technical re-equipping of AMMONIA PLANTS of the Career Guidance program to create and awards for the 40th anniversary of NO. 3.6 and UREA PLANT NO. 2 a labour pool. the factory 13 KEY INDICATORS AND ACHIEVEMENTS IN 2019

DEVELOPMENT OF THE REGION ECONOMIC SUSTAINABILITY

THE BOARD OF DIRECTORS OF PJSC TOAZ APPROVED BILLION A NEW STRATEGY 3.8 RUBLES FOR 2019-2025 TO THE AMOUNT OF WAS ALLOCATED TO THE BUDGET OF SAMARA REGION BILLION • The amount of taxes paid to the RUBLES budget of the region increased by 8.6% 112 • More than 15.5 million rubles was allocated to charity and sponsorship REVENUE IN 2019 AMOUNTED TO programs ENVIRONMENTAL PROTECTION • A grant program “Chemistry of the BILLION Good” was launched, within the RUBLES TOP-20 RAEX-600 54.15 • TOAZ entered the TOP-20 socially framework of which 15 socially significant projects received support for responsible companies in RAEX-600 a total amount of 2.9 million rubles MILLION (17th place) • TOAZ became a partner of the 10th 254 RUBLES • TOAZ took 16th place in the rating BILLION anniversary basketball tournament WAS ALLOCATED TO THE of business leaders in terms of energy 3x3 Samara Open in memory of 5.3 RUBLES efficiency by RAEX rating agency the honoured coach of Russia Yuri IMPLEMENTATION OF MEASURES Tyulenev AND PROJECTS FOR ENVIRONMENTAL • Togliattiazot took 1st place in the Samara PROTECTION OF TAXES WAS PAYED region in the ranking of the 100 largest • Organization of the regional industrial companies by labor productivity competition-exhibition “Chemistry in TO BUDGETS OF ALL LEVELS from the Production Management business Paints” • Seedlings were planted in the area of 10 portal hectares to reforest the woods suffered (9% higher compared to 2018) • 7 musicians and artists of the city from the fire • TOAZ took 247th place in the RAEX-600 received a grant from TOAZ within the rating in terms of gross income from the sale framework of the “Impulse” program • 6 586 carp fry were released into the of products, works, services Volga River • Togliattiazot became the largest • 11 business projects were developed supplier of urea to the Russian • Togliattiazot took 231st place in the rating by the graduates of the first season of • 116.6 tons of garbage were removed market, the Company`s share of the largest companies in the Russian Federation according to RBC the “Chemistry of Experience” as part of the activities to clean up in the market of this mineral unauthorized landfills in the city of fertilizer in the Russian • Creation of engineering and technical Togliatti • TOAZ traditionally entered the TOP-200 classes on the basis of two schools Federation totalled largest private companies according to in Togliatti, 36 high school students • The share of waste recycling OVER 38% Forbes (173rd place, in 2018 it took started studying in these classes has reached the level of 75% (data of FAS Russia) 192nd place) 15 THE CORPORATE HISTORY

1970-80s

CONSTRUCTION OF THE FACTORY

1973 • The area for construction of Togliatti Nitrogen Plant was determined 1981 • TOAZ withdrew from Production • The agreement with Occidental Association Kuibyshevazot and was Petroleum Corporation (USA) was transformed into an independent concluded enterprise Production Association s 1974 Togliattiazot 1990 • Start of the construction: the first • Togliatti-Odessa ammonia pipeline was DIVERSIFIED load of dipper was excavated at commissioned the construction site of Togliatti ENTERPRISE complex for production, storage and • Commissioning certificate for Ammonia transportation of chemical fertilizers Plant No. 5 was signed 1990 1976 1983 • Commissioning of ammonia water • Start of laying Togliatti-Odessa • Commissioning of Ammonia Plant No. 6. unit ammonia pipeline with the length of First tons of product were produced in more than 2 400 km carbon dioxide workshop 1992 1978 1985 • The enterprise was transformed • Commissioning of the first facility of • Commissioning of urea-formaldehyde into a joint stock company. Start of TOAZ, i.e. liquid ammonia storage resin production unit construction materials production vessel 1986 1979 • Commissioning of Ammonia Plant No.7 1994 • ”Birthday of the Chemical Colossus”: • Start of production of consumer on the 7th of April, first ammonia was goods produced at Ammonia Plant No. 1. Before the end of the year ammonia was produced at Plants No. 2 and 3. Urea Plant No.1 was commissioned 1998 • Commissioning of the second urea formaldehyde concentrate (UFC) 1980 production unit • Commissioning certificate for Ammonia Plant No. 4 was signed. Commissioning of Urea Plant No. 2 17 THE CORPORATE HISTORY

• TOAZ took 16th place in the rating of business leaders in terms of energy XXI CENTURY efficiency by RAEX rating agency LEADERSHIP IN THE INDUSTRY AND FURTHER DEVELOPMENT • TOAZ entered the TOP-20 socially re- sponsible companies in RAEX-600 (17th 2003 place) • Start of construction of ammonia transship- • Togliattiazot took 1st place in Samara ment terminal in the Port of Taman (Krasno- region in the ranking of the 100 largest darsky Region) industrial companies by labor produc- tivity from the business portal “Produc- 2006 tion Management” • The produced urea formaldehyde concen- 2019 trate was awarded the certificate “100 Best • Togliattiazot celebrated the 40th anni- • TOAZ took 247th place in the RAEX- Russian Goods” versary of its successful work 600 rating in terms of gross income from the sale of products, works, 2007 • Achievement of a record indicator of 3 services • The produced technical ammonia was 2017 million tons for annual production of awarded the certificate “100 Best Russian • Production of 80 millionth ton of ammonia ammonia in the entire history of oper- • Togliattiazot took 231st place in the Goods” ations rating of the largest companies in the • TOAZ entered Forbes rating “200 Largest Russian Federation according to RBC 2011 private companies in Russia” • Achievement of a record indicator of • Commencement of large-scale program for more than 1.9 million tons in terms of • TOAZ traditionally entered the TOP-200 modernization and revamping of production • TOAZ held the 256th position in RAEX-600 volumes of ammonia pumped through largest private companies according facilities index in terms of gross income from sales of the Togliatti-Odessa pipeline to Forbes (173rd place, in 2018 it took products, works, services 192nd) 2014 • Shipment of 60 million tons of ammo- • Production of the 70 millionth ton of ammo- • TOAZ held the 230th position in the annual nia since the start-up of the factory • TOAZ was included in the list of the nia ranking of RBC Top-500 largest companies country’s largest exporters according to in terms of revenue • Ammonia Plant No. 7 became the lead- Expert magazine (60th place) 2015 er in terms of the amount of ammonia • TOAZ entered TOP-200 largest Russian • Togliattiazot was among the winners in the produced, its result reached 620 thou- • TOAZ was awarded “Commersant of companies according to RBC magazine and nomination “For achievements in the field of sand tons the Year” in nomination “Moderniza- Expert-400 occupational safety and health of workers” in tion” by the Kommersant-Volga publish- the competition of Russian Union of • Ammonia Plant No. 2 produced the 12 ing house • The products of the Company entered into Industrialists and Entrepreneurs (RUIE) millionth ton of product since the start “100 Best Russian Goods” of production in 1979 • TOAZ became the winner in the nomina- • The 1st position in the ranking “100 largest tion “Safe Production Leader” in the award • Creation of engineering and technical enterprises in Togliatti” “People of the City” classes on the basis of two schools in Togliatti • TOAZ became the winner of the compe- 2018 tition “Leader of environmental activity in • Commencement of Urea Plant No. 3 con- • Nadezhda health resort celebrated the Russia 2015” struction 20th anniversary of its work 2016 • TOAZ continued implementation of the con- • Launch of a corporate professional skill • TOAZ is the 50th largest company in terms struction project of transshipment terminal in competition for mentors of net profit according to RBC magazine the sea port of Taman • Togliattiazot became the largest suppli- • TOAZ won the award “Philanthropist of the • TOAZ launched corporate housing program er of urea to the Russian market, the Year” following the results of 2015 for employees company`s share in the market of this mineral fertilizer in the Russian Federa- • TOAZ health and safety inspector held the • Start of implementation of improvement tion amounted to over 38% (data of FAS 3rd position among the best in Russia program “YIW: Your Idea Works” Russia) 19 THE CORPORATE HISTORY

• The first stage of the overhaul of the 2018 water disposal system (completed in • Completion of overhaul of Ammonia • Active phase of construction of Urea XXI CENTURY 2016) Plant No. 7 Plant No. 3; the Prilling Tower has grown up to 35 meters MODERNIZATION • Modernization of Ammonia Plant No. • Increase of Ammonia Plant No. 5 6 (completed in 2016), which led to an productivity to 1750 tons/day due to • Start of the program of repairs in social increase in the capacity of the plant by modernization premises at production more than 20% • Implementation of a modern Yokogawa • Completion of overhaul of Ammonia From 2012 • The first stage of the project for automated system at urea plants, which Plant No. 3; the project is one of the • The beginning of the implementation of a renewal of thermal insulation at the will increase the safety and efficiency of largest in the history of the enterprise large-scale program for the modernization technical facilities of the enterprise Plant control in terms of scope of work and and revamping of production facilities, set investments until 2022. All projects are aimed at reducing • Overhaul of the isothermal ammonia • Replacing of the reactor at Urea Plant the consumption of raw materials, reducing storage facility No. 2 (which was a unique procedure) • TOAZ continues the renewal of the the environmental impact and increasing factory railway infrastructure; in the production 2016 2019 shop for preparation of ammonia for • Modernization of TOAZ own railway • At the end of the year, the Board of transportation (No. 13), a 300-meter 2013 infrastructure Directors of PJSC TOAZ approved a section of track No. 10 was repaired • Large-scale repair of Ammonia Plant No. 2 new strategy for 2019–2029, it amounts • Large-scale repair of Ammonia Plants to 112 billion rubles • Continuation of technical re-equipping 2014 No. 3,4 of the existing chemical water • Modernization of Ammonia Plant No. 1 • Start of the maintenance and repair treatment unit at the urea production; 2017 system improvement program the facility is strategically important for • Renewal of the bus fleet for comfortable • Overhauls of: the Company: the unit will be able to transportation of factory employees - Urea Plants No. 1, No. 2, • Procurement of 50 mineral hoppers for meet the needs of three urea plants - isothermal storage facility No. 2, transportation of urea 2015 - Ammonia Plants No. 2, No. 5 • Completion of scheduled overhauls at • Large-scale repair of Ammonia Plant (with a complete renewal of the • Implementation of an electronic face Urea Plant No. 2 and Ammonia Plant No. 4 (completed in 2016) cooling tower) recognition system at checkpoints No. 6 21 AWARDS OF THE COMPANY

Contribution of PJSC TOAZ into social, economic and environmental development of the region of presence and the whole country is annually marked with various awards. Various federal and regional awards and commendations also evidence labour achievements and active stance of the team.

“ARCHIMEDES -2019” VOLGA REGION ANNUAL AWARD OF THE BEST MARKETING • The medal of the Russian national SOLUTIONS Intellectual Property Organization VOLGA BRAND – 2019 “For Invention” was awarded to Sergey Afanasyev, Head of the Bureau • The project “Power in Truth” took for Development and Protection of 1st PLACE in “The Best Solution Intellectual Property Objects of PJSC in Outdoor and Print Advertising” TOAZ, Professor of Togliatti State nomination TRADE UNION University

• The music video “40 years in a single • The chairman of the TOAZ Trade Union COMPETITION OF THE ONLINE MEDIA rhythm” took 2nd PLACE in the committee, deputy of the regional FERTILIZER DAILY nomination “The Best Solution in Video duma Olga Sevostyanova was awarded and Radio Advertising” the badge “For serving the law” of the • The newspaper “Volzhsky Chemist” THE MINISTRY OF AGRICULTURE Samara Regional Duma. became a laureate in the nomination • Special prize “For Loyalty to the Native OF THE RUSSIAN FEDERATION “The best corporate media in the Enterprise” from the publishing house • Certificate of honour of the Samara chemical industry of Russia and foreign Rossiyskaya Gazeta • Letter of gratitude “For the active work regional committee of the Russian countries” in 2019 to provide domestic agricultural Trade Union of Workers of Chemical Industries was given to 5 EMPLOYEES REGIONAL STAGE producers with mineral fertilizers” INTERNATIONAL COMPETITION OF THE NATIONAL PRIZE • Badge of Trade Union “Honour Badge” OF CORPORATE MEDIA “SILVER ARCHER”, SAMARA SECTORAL: CORPORATE, of the third degree was given to “MEDIA LEADER, 2019” REGIONAL AND CITY AWARDS 1 EMPLOYEE • The project “Intellectual Club Chemistry • The project “Corporate video: 40 years of the Word” became the winner in • Letters of appreciation of PJSC TOAZ • 2 EMPLOYEES were awarded the in a single rhythm” took 2nd PLACE in the nomination “Corporate Social were given to 26 EMPLOYEES title “Honoured Veteran of the Trade the nomination “The Best Corporate Responsibility”. The project became Union Movement of Chemical Industry Film for Clients” a participant in the federal stage • Certificates of honour were given to Workers of Samara Region” competition 26 EMPLOYEES RUSSIAN COMPETITION “THE BEST • 3 EMPLOYEES were honoured with an CORPORATE MEDIA -2020” • The project “Newspaper Volzhsky • 10 EMPLOYEES were recognized by award “The Best Young Trade Union Chemist. Restart” became the winner in the title “Honoured Employee” Leader” • Illustrated edition “TOAZbuka” (TOAZ the category “Internal Communications alphabet) is a laureate. It is awarded a and Corporate Media”. The project • 20 EMPLOYEES were listed on the • 1 EMPLOYEE received badge of special nomination “The Best Corporate became a participant in the federal stage board of honour honour of the Russian Trade Union of Edition for Children” of the competition Workers of Chemical Industries “For • 12 EMPLOYEES Proactive Efforts in Trade Union” of the ANNUAL BUSINESS FORUM “RESULTS were awarded according to the results first degree NATIONAL COMPETITION OF CORPORATE MEDIA OF THE YEAR” ORGANIZED IN of the review competition for the best SAMARA BY THE PUBLISHING HOUSE authorized OSH specialist • 1 EMPLOYEE received badge of “SILVER THREADS” honour of the Russian Trade Union of KOMMERSANT-VOLGA • 79 EMPLOYEES received external Workers of Chemical Industries “For • The video “40 years in a single rhythm” awards (of local government, Samara proactive efforts in Trade Union” of the won the Grand Prix in the nomination • Award in the “Modernization” region, departmental) second degree “The Best Corporate Video” nomination for the development of own production • 1 EMPLOYEE was awarded badge • The booklet “40 years of PJSC TOAZ” THE COMPETITION of honour of the Governor of Samara was awarded a diploma in “The Best “INSPIRATION” OF SAMARA REGION Region “For the Development of the Design” nomination NAME AWARD OF THE CITY TRADE UNIONS FEDERATION Trade Union Movement in Samara ADMINISTRATOR Region” • The Corporate alphabet “TOAZbuka” • Collective Bargaining Agreement of PJSC became a laureate in the nomination “The • Intellectual club “Chemistry of the TOAZ for 2017-2020 was recognized as • 39 EMPLOYEES received diplomas of the Highest Achievement: Creative Solutions Word” became a laureate of the first the best in the region Trade Union committee of PJSC TOAZ in Corporate Nominations” degree 23 40 YEARS OF THE COMPANY`S ACHIEVEMENTS • The total number of benefits in the Public Joint Stock Company market, produces urea-formaldehyde Collective Bargaining Agreement Togliattiazot is the leading producer concentrate and other chemical products In 2019, Togliattiazot celebrated of PJSC TOAZ is 53 BENEFITS, of ammonia in Russia, one of three that are in demand by consumers on GUARANTEES AND COMPENSATIONS the 40th anniversary of the factory. enterprises in the world, the capacity of five continents. Togliattiazot is one of The first ammonia was produced at which allows to manufacture more than 3 the leading taxpayers and employers in • Collective Bargaining Agreement million tons of this product per year at one Samara region, and is one of the largest TOAZ on April 7, 1979. of PJSC TOAZ is the best in the region production site. TOAZ is also the largest companies in Russia according to the for 2 years supplier of urea to the Russian agricultural magazines RBC, Forbes and Expert. • 100% of PJSC TOAZ employees receive VHI • 1200 PUPILS have graduated from the kindergarten “Tulip” EMPLOYEES • The total number of people who TOAZ PRODUCTION received health improvement services for the entire period of operation of the AREA IS TOTAL EMPLOYEES Nadezhda health resort is MORE THAN OVER 40 YEARS MORE THAN 80 000 • Number of types of professional skills competitions is 18 HA 200 35 912 • The total number of competition participants is 684 EMPLOYEES EMPLOYEES

from from CJSC PJSC TOAZ Corporation OWN RAILWAY PARK 34 568 Togliattiazot EMPLOYEES 1344 CONSISTS OF COMPANY PERFORMANCE INDICATORS FOR EMPLOYEES 40 YEARS

1523 VOLUMES OF PRODUCTION: WAGONS AMMONIA UREA AWARDED:

84.1 26.1 Order of the Red Banner of Labour 6 Order of the Badge of Honour 14 ACCESS TO THE UNIQUE MILLION MILLION ENVIRONMENTAL PROTECTION AMMONIA TOGLIATTI- TONS TONS Order of Glory of Third Class 6 ODESSA PIPELINE WITH A LENGTH OF Order of Merit for the Chemical INVESTMENT VOLUME: Industry 8 40 HA Medal “For Labor Valor” 21 MORE THAN IS TOTAL AREA КМ Medal “For Labor Distinction” 24 OF FOREST PLANTS 2 400 TO REPLACE THE 47.5 30 Honoured Oil Chemist 55 BURNT DOWN FOREST Honoured Chemis BILLION BILLION 82 RUBLES RUBLES тольятти Honoured Construction Worker 9 THOUSAND OF IN TAXES WAS Honoured Energy Worker 26 266 INVESTMENTS PAID TO BUDG- TOTAL NUMBER Honored Employee of CJSC SINCE 2012 ETS OF VARIOUS OF YOUNG FISH о десса Corporation Togliattiazot 5 LEVELS SINCE RELEASED IN THE WATER 2012 Honored Employee of PJSC TOAZ 27 BODIES OF SAMARA REGION STRATEGY AND VISION OF STRATEGY AND VISION OF SUSTAINABLE DEVELOPMENT 25 SUSTAINABLE DEVELOPMENT

1.1 COMPANY OVERVIEW 1.1 COMPANY Public Joint Stock Company Stable and reliable supplies are OVERVIEW Togliattiazot is one of the largest ensured by a developed transport “The new strategy declares an enterprises in Russian chemical infrastructure, which includes rail ambitious vision that reflects the industry, a recognized leader of the car and motor vehicle fleets and the leadership aspirations not only industry in the country and abroad. unique Togliatti-Odessa ammonia of the management, but of the Production facilities of PJSC TOAZ pipeline of more than 2400 km in entire team of Togliattiazot. We 1.2 are located 12 km to the north-east length. believe that the achievement COMPANY GOVERNANCE of Togliatti in Samara region and on At the end of 2019, the Board of of the declared indicators in 1 STRUCTURE the area of more than 200 hectares, Directors of PJSC TOAZ approved the medium term is absolutely uniting an industrial complex and a new development strategy for the realistic, since over the past 7 administrative buildings. Company until 2025. The strategy years a huge amount of work has The main activity of the Company formalized the mission of Togliattiazot, been done within the framework is production of ammonia, urea, UFC which the management and members of the strategic modernization 1.3 and ammonia water. The capacities of the Board of Directors formulated program; more than 47.5 billion COMPANY`S STRATEGIC of the facilities operated by PJSC as, “We care about fertility and rubles has been invested in PRIORITIES TOAZ allow to produce annually: productivity for the benefit of the the renovation of TOAZ`s whole world”. The document states production facilities. The next • More than 3 million tons that the Company will strive to step, which is recorded in the of liquid ammonia at seven become the leader in the production new strategy, is the development large-scale plants; of nitrogen mineral fertilizers in Russia of production, expansion of 1.4 • 960 000 tons of urea and enter the five largest producers the product portfolio, a more RISK MANAGEMENT at two plants; in the world. To achieve this goal, active presence on the market, IN THE FIELD OF • 47 000 tons of UFC the strategy assumes an increase in so that Togliattiazot products at two units; production (including ammonia by are associated with efficient SUSTAINABLE DEVELOPMENT • 109 000 tons about 40% to 4.15 million tons per year agriculture worldwide”. and urea by more than 2.5 times, up of ammonia water. Petr Ordzhonikidze to 2.53 million tons per year) and an Chairman of PJSC TOAZ increase in EBITDA by 3.3 times. Board of Directors PJSC TOAZ IS ONE OF THE The new strategy of PJSC TOAZ 1.5 WORLD`S LARGEST CHEM- outlines the development directions STAKEHOLDER ICAL ENTERPRISES CAPA- that will allow the enterprise to achieve More detailed information about ENGAGEMENT BLE OF PRODUCING MORE the declared indicators. the Company is contained in the THAN 3 MILLION TONS OF Investments in the development Annual Report of PJSC TOAZ for of production facilities and an increase 2019, which is presented on the AMMONIA AT ONE PRO- in production volumes will amount to Company`s official website (www. 1.6 DUCTION SITE ANNUALLY. 112 billion rubles. toaz.ru) in the Investors section. INNOVATION DEVELOPMENT OF THE COMPANY DEVELOPMENT DIRECTIONS OF THE COMPANY

IMPROVING IMPROVING PRODUCTION SITE OPERATING COMMERCIAL DEVELOPMENT EFFICIENCY EFFECTIVENESS

• Bringing the repair • Change in the structure of • Construction of Urea Plant service in line with best sales in foreign and domestic No. 4, ammonium nitrate and practices in terms of markets urea ammonium nitrate units frequency and duration of for the production of new shutdown repairs • Improving commercial terms products for key products with key • Completion of the • Improving labor efficiency buyers construction of a terminal for and reducing gas transshipment of fertilizers in consumption Taman • Improving the performance of ammonia plants SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 1 STRATEGY AND VISION OF SUSTAINABLE DEVELOPMENT 27

1.2 COMPANY GOVERNANCE STRUCTURE 1.3 COMPANY`S STRATEGIC PRIORITIES

The corporate governance of of Association and the Regulations on key managers directly depends on the PJSC TOAZ is a set of processes the Board of Directors approved at the performance of the Company. ensuring regulation and control of general meeting of shareholders held In order to control the financial the Company`s activities for the on 29.04.2017 (Minutes of meeting and economic activities of the Company benefit of shareholders and the team. No. 38 dd. 03.05.2017). All members the Audit Commission is elected. At the The shareholders are represented of the Board of Directors have many request of the Audit Commission, persons by the Board of Directors. The years of experience in the chemical holding positions in the management interaction of the Board of Directors industry and have participated in bodies of the Company are required to and senior executives is focused the implementation of best practices submit documents on the financial and on maintaining the most effective and projects both in the industry economic activities of the Company. The corporate governance system. and in other spheres. The amount Audit Commission is entitled to request Due to reliance on its own of remuneration of members of the calling of an extraordinary General capacities and maximum self- governing bodies of the Company and meeting of shareholders. sustainment, the Company has been steadily working for 40 years under various external political and economic conditions. In its activities, the Company strives to comply with the following principles of the Corporate Governance Code, recommended for use by the Bank of Russia:

• Equal and fair treatment of all shareholders with the exercise of their right to participate in the management of the Company; • Factory management building • Equal and fair opportunity for shareholders to participate in profits Public Joint Stock Company • Constant search for new solutions; workers, a reduction in the specific of the Company through receipt of Togliattiazot is guided by a long- • Continuous improvement of the consumption of resources, as well dividends; term development program, which technological capabilities; as an increase in the productivity • Reliable and efficient ways of is aimed at strengthening the • Ethical business management. of ammonia and urea plants. The consideration of shareholders` share Company`s competitiveness both At the end of 2019, with the latter is achieved by reducing rights, as well as the possibility of in the Russian, and in the global adoption of a new strategy, a clear the duration and frequency of free and unburdensome disposal of chemical markets. In an effort understanding was formed in shutdown repairs to best practice their shares; to make business as efficient as accordance with which the direction levels and in accordance with • The right for regular and timely possible, the Company modernizes of the Company`s work will be built industrial safety requirements; acquisition of complete and reliable production, optimizes management from 2020 and on which priorities it • Increase of sales efficiency. It is information on the activities of processes, reduces environmental will rely. planned to switch to direct sales PJSC TOAZ in accordance with burden, and invests in human capital The main strategic priorities both in the domestic and foreign the requirements and provisions assets and the prosperity of the of the Company are the growth of markets, as well as to revise the of the Federal Law ‘‘On Joint Stock region of presence. internal efficiency and expansion trading conditions for working with Companies’’, as well as on the Internet of production, which together will buyers; page used by the Company for The strategic goal of PJSC lead to an increase in the value of • Product line development. It is information disclosure: TOAZ is the continuous the business and will allow achieving planned to build units for the www.e-disclosure.ru/portal/company. growth of the Company`s the strategic goal of leadership in the production of ammonium nitrate aspx?id=23343. capitalization, achievement Russian and world markets. and UAN at the factory in Togliatti, of maximum business ef- By 2025, the Company plans to which will lead to diversification of In accordance with the articles ficiency and leadership in significantly increase production, the Company`s product portfolio of association, the company`s the chemicals’ production expand its sales geography and and an increase in its marginality. management bodies are: to ensure sustainable devel- product portfolio, which will make There are also plans to increase opment for the benefit of it the world’s fifth largest producer the production of urea, including • General meeting of shareholders; shareholders, team, partners of nitrogen mineral fertilizers. Such packed in big-bags. Board of Directors; and consumers. According to a change in the market position will • Construction of Urea Plant No. • Single executive body (CJSC TOAZ, achievement of this require investments in the amount 4 in Togliatti and completion of Corporation Togliattiazot). goal is possible only through of 112 billion rubles, a change in work on the urea transshipment ensuring environmental and corporate culture and a significant terminal in Taman will lead to an The General meeting of industrial safety, preserving increase in operating efficiency. increase in urea production and shareholders is the highest governing the life and health of em- To achieve the growth stated optimization of commercial costs. body of PJSC TOAZ. The Board of ployees and people affected in the strategy, the management of Directors is a collegial body consisting by the Company`s activities. the Company will ensure significant Not the least important place among of five members. Independence of changes in the following areas: the strategic priorities of the Company directors is determined in accordance is given to the issues of production by the Corporate Governance Code. TOAZ values and principles: • Increase of operational efficiency. safety, increasing the efficiency of the The order of activities of the Board of • Due regard for the interests and This implies an increase in labor Company management and increasing Directors is regulated by the Articles • Repair work on the Ammonia Plant expectations of the stakeholders; productivity of all groups of the involvement of employees. SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 1 STRATEGY AND VISION OF SUSTAINABLE DEVELOPMENT 29

1.4 RISK MANAGEMENT IN THE FIELD OF SUSTAINABLE DEVELOPMENT

• The focus of the enterprise on foreign buyers inherent in the design, which makes the enterprise dependent on the uninterrupted shipment of ammonia to the ammonia pipeline; • Transit of ammonia through the territory of Ukraine is associated with possible failure to fulfill transit obligations, which entails risks of improper fulfillment of obligations under contracts; RESULTS OF COMPANY`S PERFORMANCE FOR 2019 BY MAJOR AREAS OF DEVELOPMENT • Establishment of quotas on the transit of ammonia through the DEVELOPMENT DIRECTIONS RESULTS OF COMPANY`S PERFORMANCE FOR 2019 territory of Ukraine; • The Construction of Urea Plant No. 3 • Сommissioning of new capacities in fertilizer producing countries Improving of operational The company focused on improving production efficiency through the PJSC TOAZ, like any industrial builds trust on the part of stakeholders. with cheaper resources leads to efficiency systematic implementation of modernization and overhaul of priority company, faces certain risks in its The Company has approved the increased competition in world facilities. Technical re-equipment and modernization of basic production work, the level of which is influenced Regulation on the Risk Management markets. assets, large-scale renovation of the production base of the enterprise by internal and external factors. System, formed the Risk Management External factors are associated with Department and has a Risk Management were carried out. In particular, overhauls of Ammonia Plants No. 3, 6 the economic and political situation, Committee. Industry risks and Urea Plants No. 1, 2 were completed. Implementation of a program the situation on the labor and capital The main tools used in the risk PJSC TOAZ takes all necessary to improve the system of maintenance and repairs was started. markets, which the enterprise cannot management policy are: measures to neutralize and Ammonia production increased compared to the previous year. have a direct impact on: reduce the impact of risks on the Compared to the previous year, the production volumes of urea and • Compliance of the Company`s achievement of the strategic goals of UFC also increased. • Geopolitical situation; activities with the requirements of • Shortage of qualified personnel in international and Russian standards; the enterprise, including construction Increasing of commercial The company focused on selling ammonia and urea directly to end the region; • Long-term financial and investment of ammonia transshipment terminal efficiency customers, bypassing agents and traders. This will lead to an increase in • Currency fluctuations planning; in Volna village of Temryuk district marginality, and thus reduce the Company`s dependence on traders. and inflation; • Rejection of risk investments; in Krasnodar Region, increase of • Negative coverage and • Comprehensive insurance; production output of urea and Expansion of sales markets The existing sales markets have been preserved. The priority is to activities of competitors` • Increasing labor productivity and lobbying groups; awareness of employees` activities; development of railway logistics for promote in the domestic market of the Russian Federation and the Middle • Reduction of natural resources; • Introduction of modern technologies the transportation of ammonia. East. • Changes in legislation resulting in and processes of production and The Company pays much additional costs to bring the management, contributing to attention to modernization and Effective human resources The Collective Bargaining Agreement of TOAZ is recognized as the activity of the Company in line the further development of the technical re-equipping of the management best in the region. with them. Company. In 2019, the Company spent over 28.5 million rubles on employee production complex, aimed at training. In addition to the external Togliattiazot is one of the leaders improving the quality of products TOAZ has allocated 400 VHI policies to family members of employees. conditions, the Company is affected in the Russian chemical complex. and saving raw materials. This In 2019, 140 million rubles was allocated for medical support and by the following internal factors: Due to the fact that about 70% of provides a margin of safety in the manufactured products are exported, health care of employees. conditions of rising prices for raw Holding a corporate competition of professional skills for mentors. • Imperfection of a number of the Company is exposed to both business processes; internal and external factors that materials and energy. Long-term Implementation of the Career Guidance program to attract young • Human mistake factor. may have a negative impact on its contracts have been concluded with professionals. activities: major suppliers, partnership relations The risk management policy is an have been strengthened. Ensuring industrial and In 2019, there were 4 incidents with loss of ability to work (minor injury). important component of improving • The main activity of the enterprise One of the main elements of environmental safety The LTIFR injury rate is 0.58. There were no cases of occupational the efficiency of the Company`s is related to the chemical industry, diseases. operational and strategic activities, which the production of hazardous the Company`s development is is aimed at identifying and assessing substances, i.e. along with preservation and protection of the Development of the region of Payments to the budget of Samara region amounted to 3.5 billion rubles. unfavorable factors and threats in order mining, metallurgical and fuel, it natural environment and reduction presence A number of social projects was implemented in the field of culture, to prevent or reduce the likelihood of is technogenically hazardous in of man-induced impact in the area their occurrence. Timely identification nature; ecology, sports, health and education. where the production site is located. A scholarship program to support gifted musicians “Impulse”, an of risks and development of scenarios • An increase in prices (tariffs) for All projects being carried out undergo educational project of the lectures Intellectual Club “Chemistry of for their management contribute to products and services of natural the achievement of the Company`s monopolies, including an increase an environmental impact assessment the Word”, a program for development of personal and professional strategic goals in the field of sustainable in the price of natural gas used in skills of people of pre-retirement age “Chemistry of Experience” were process from the moment of their development. the production of ammonia and development to implementation. implemented. In addition, risk management ensures fertilizers, an increase in the cost Significant funds are allocated The program of grants for families who adopted children left without the stability of the Company`s operation of energy and other resources, parental care is continuing. in changing external conditions, an increase in tariffs for railway for environmental protection and promotes the Company`s image and transport; industrial safety improvement. SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 1 STRATEGY AND VISION OF SUSTAINABLE DEVELOPMENT 31

Financial risks of counterparties to fulfill their reducing the terms of turnover of The Company`s activities are obligations to Togliattiazot. accounts receivable. exposed to the following types of In order to reduce credit risk, financial risks that may adversely the company uses tools such as Legal risks affect it: maintaining a system of long- In the Russian economy, there is a term relations with buyers with risk of changes in tax conditions: tax Foreign currency risk an appropriate credit history, legislation is being reformed, and the Among the risks that industrial effective counterparty accreditation existing laws allow their ambiguous enterprises active in foreign trade have to procedures, continuous monitoring interpretation and can negatively face, there is a special place for foreign of counterparty creditworthiness, affect the activities of the enterprise. currency risk. the use of letters of credit and bank Changes in the rules of currency The export share of PJSC TOAZ is guarantees, settlements for partially regulation, customs control and duties more than 70% of the total volume of supplied products and a decrease in can also have a significant impact on manufactured products; the company the share of advance payments. the company due to the high volumes also buys equipment, spare parts, of product export. catalysts, etc. abroad. Inflation risk The company is forced to spend The Company is exposed to the risk Inflation risk has a comparable significant efforts and funds to protect of changes in exchange rates in terms degree of influence with foreign its assets, conduct legal proceedings of cash flows related to sales, financing exchange risk. Only that part of related to unfounded claims of tax and investments. To mitigate this risk, costs is subject to inflation risk, authorities and minority shareholders. the company seeks to match assets and which is formed from resources that State authorities regularly carry out liabilities denominated in one currency. do not depend on prices for similar numerous checks. At the request of resources abroad, such as energy the Investigative Committee of the Interest rate risk resources, labor costs, etc. Russian Federation, the court imposed This type of risk may have a PJSC TOAZ also sells its products a temporary arrest on the property negative impact on the Company`s on the domestic market, where of PJSC TOAZ within the framework activities with an increase in the cost prices for finished products are also of a criminal case, which limits the of borrowed resources. affected by inflation. In order to limit possibility of disposing of it. At the The following measures are inflation, the Company is taking same time, this temporary arrest does taken by the Company to minimize measures to improve production not impose any restrictions on the exposure to interest rate risk: efficiency, including reduction in operational management of property resource consumption, accelerating and its use for the production activities • Continuous monitoring of the turnover of current assets and of the Company. macroeconomic indicators and the conditions in the financial market in order to predict changes in interest rates; • Maintaining an impeccable credit history; • Work process at Urea Plant No. 1 • Exercising control over the increase in the cost of paying interest or reducing the income KEY RISKS OF THE COMPANY AND MITIGATION ACTIVITIES from investments and receipts. DIRECTION BASIC RISKS MITIGATION ACTIVITIES Liquidity risk PJSC TOAZ constantly analyzes Production • Risks of delivery of low-quality • Modernization and technical reequipping cash flows and, due to the dynamic process products; of production complex development of the business, strives • Conclusion of long-term contracts, to provide a flexible financing • Risks of late delivery strengthening of partnership relations system. To minimize the impact of • Supplier accreditation procedure liquidity risk, the company takes the • Development of procedure for suppliers • Risks of lack of local suppliers following actions: assessment with sufficient qualifications • Measures for reduction of technogenic impact • Implementation of effective cash in the region of presence flow planning tools (payment • Increase of raw material prices calendar); • Improving the efficiency of using • Technogenic hazard of products free cash; • Strengthening the expenditure control (improving payment Human resources • Risks of a shortage of qualified • Providing a systematic approach to training, procedures); employees proficiency enhancement, retraining of the • Strengthening the budget control; management • Risks of an ineffective training Company’s employees • Assessment of non-core production • Implementation of a system of key performance facilities’ effectiveness. system • Risks of insufficient motivation of indicators for all levels and categories of personnel employees Credit risk • Youth engagement, cooperation with It is connected with the educational institutions possibility of a decrease in the value of assets as a result of the inability • Ammonia Plant SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 1 STRATEGY AND VISION OF SUSTAINABLE DEVELOPMENT 33

KEY RISKS OF THE COMPANY AND MITIGATION ACTIVITIES

DIRECTION BASIC RISKS MITIGATION ACTIVITIES

Finance • Foreign currency risks • Compliance of assets and liabilities denominated in one currency • Interest rate risks • Continuous monitoring of macroeconomic indicators and the conditions in the financial • Liquidity risks market in order to predict changes in interest rates; • Maintaining an impeccable credit history; • Competition of volunteer fire brigades • Credit exposure • Exercising control over the increase in the cost of paying interest or reducing the income from • Inflation risks investments and receipts; KEY RISKS OF THE COMPANY AND MITIGATION ACTIVITIES • Implementation of effective cash flow planning • Legal risks tools (payment calendar); • Improving the efficiency of using free cash; OHS • The risks of accidents at work • Compliance with legislation requirements in the • Strengthening the expenditure control field of industrial safety and labour protection, (improving payment procedures); • The risks of professional diseases in particular, conduction a special assessment of • Strengthening the budget control; labour conditions; • Assessment of non-core production facilities’ • The risks of accidents and incidents • Actions to ensure facilities’ operation in line effectiveness; with the imposed requirements; • Effective counterparty accreditation procedures • Development of plans and strategic scenarios and continuous monitoring of counterparty creditworthiness; for emergency response; • Reduction in resource consumption; • Conducting regular comprehensive emergency • Accelerating the turnover of current assets and training exercises for all services and workers; reducing the terms of turnover of accounts • Team training to reduce the risk of errors receivable; leading to work injuries, accidents and incidents; • Conducting behavioural safety audits (BSA); • “Leader-Winner” program aimed at developing an effective system of occupational safety and ensuring a high level of industrial safety;

Environment • Negative environmental impact • Compliance with environmental legislation (emissions, discharges, waste and adaptation of internal regulations to new disposal, resource consumption) requirements; • Long-term investment in environmental improvement of the region of presence; • Obtaining quotas for waste disposal; Realizing the existence of the field of sustainable development. In framework and a comprehensive • Obtaining a license for waste disposal activities; abovementioned risks, the Company addition, risk management ensures assessment of the identified risks. • Introduction of technologies for processing and makes every effort to minimize the the stability of the Company in a Further plans for the development of reuse of waste; potential impact of risks and to reduce volatile external environment, as the risk management system at PJSC • Undergoing ecological expert review; the likelihood of their occurrence. well as enhances the image of the TOAZ include process automation Timely identification of risks, Company and the confidence of and improvement of the risk development and implementation stakeholders. management culture, the integration of measures to manage them The main tasks for 2020 in the of risk management into the decision- contribute to the achievement of field of risk management are the making and planning processes at all the Company’s strategic goals in the development of the regulatory levels of the Company`s management. SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 1 STRATEGY AND VISION OF SUSTAINABLE DEVELOPMENT 35

1.5 STAKEHOLDER ENGAGEMENT

When building up its activities, PJSC TOAZ takes into account the STAKEHOLDER ENGAGEMENT IN 2019 interests of all groups of stakeholders (parties interested in the Company`s EXPECTATIONS OF A STAKEHOLDER FORMS OF INTERACTIONS activities) and seeks mutually beneficial cooperation based on the principles of respect and responsible EMPLOYEES AND TRADE UNION fulfilment of its obligations. Such open dialogue with stakeholders is the key to achieve high results and set • Fair salaries • Conclusion of labour and collective bargaining strategic goals, improving business • Occupational safety agreements efficiency and risk management. • Social benefits and bonuses • Holding regular meetings with management to get the Togliattiazot determines a certain • Opportunities for professional development employee feedback on social and production issues range of external and internal • Consideration of employees` opinions and dispute • Professional training of employees of various stakeholders directly or indirectly influencing the management resolution specialities and management levels decisions. • Implementation of the Company`s activities taking • Lecturing on safety and labour protection Stakeholder engagement is into account the interests of employees • Implementation of internal social programs governed by legal requirements, the • Informing about the activities of the Company through Collective Bargaining Agreement, the regular Information Days, Volzhsky Chemist documents on certain areas of activity, and existing agreements with corporate newspaper, radio newscasts, information stakeholders. kiosks, and other channels of internal communication The Stakeholders are: • Consideration of appeals filed through the “hot line”, to the editorial board of the internal newspaper • State bodies; • View from the checkpoint of Togliattiazot Volzhsky Chemist, corporate e-mail as well as on “hot • Mass media; • Local communities; To interact with external All news releases of the corporate line” telephone 60-17-77 • Workers and Trade Unions; audiences, the Company uses both its television studio “Togliattiazot TV” • Participation of Trade Union representatives in labour • Consumers and partners; own channels (a corporate website, are available on the official YouTube dispute resolution • Shareholders and investors. social networks, the Togliattiazot channel: • Participation of Trade Union representatives in TV studio, newsletters, events) and industrial safety compliance checks To build an effective dialogue, public media. The Company strives www.youtube.com/c/toaz_official the Company uses a wide range for open, honest and multilateral • Preparation of the Report on compliance with the of communication channels, the dialogue with all audiences. TOAZ The main objectives of the Company`s Collective Bargaining Agreement choice of which depends on the website has been translated into presence in social networks are: specific features of interaction with a English. particular group of the stakeholders. Messages on important events • Informing an unlimited number of SHAREHOLDERS AND INVESTORS The most popular channels are published in Press Center section people; of interaction with stakeholders of the official website of PJSC TOAZ. • Working with an external audience; are Volzhsky Chemist corporate The News section contains the official • Increasing loyalty to the Company; • Economic performance of the Company • Involvement in the activities of the Company through newspaper, corporate newscast press releases of the Company. • Maintaining the image of a modern, • Increase in the Company value the General meeting of shareholders on the radio, feedback boxes and The Mass Media About Us section technological enterprise; • Investment potential of the Company • Informing of shareholders through: information kiosks. Another effective contains publications of external • Attracting the employees. • Stability of business over a long period -Publication of annual reports, channel of communication with mass media about the enterprise. -Publication of sustainable development reports, employees are regular Information The Corporate Newspaper section Interaction with stakeholders as part Days, i.e. meetings at which the contains electronic versions of of Urea Plant No. 3 construction project is • News portal of PJSC TOAZ website Company managers report the all issues of Volzhsky Chemist performed separately. Detailed data and results of work for the period and newspaper since 2017. contact addresses are listed on the site in PUBLIC AUTHORITIES further development plans for each In 2019, Togliattiazot continued the section About Company / Investment functional unit. Heads of workshops active development and use of its Projects / Urea Plant No.3 and departments, workers accounts in social networks: • Maintaining of employment level • Implementation of social programs and projects of the representatives of each workshop, toaz.ru/rus/about/invest_projects/ • Ensuring safe production region of presence development the Youth Council and the Trade vk.com/toaz_official project_1.phtml?prod=1 • Reducing negative environmental impact • Legislative and regulatory dialogue Union Committee representatives www.facebook.com/toazofficial/ • Assistance in environmental monitoring by regional • Participation in expert councils and industry associations are invited to participate in the twitter.com/toaz_official Comments and suggestions on enterprises • Coordination of the Company`s projects in the Information Day meeting. Sustainability Reports are accepted In 2019, another feedback In the reporting year, the by phone and e-mail, indicated in • Support of social and economic development of the framework of production modernization channel, called a “hot line”, began Company`s official account was the SummaryС section. All received regions • Reporting on the Company`s activities to work, where employees of the registered and began to be filled with messages will be considered and taken enterprise can address if they notice content in another social network: into account during the work on the next the fact of any violation. instagram.com/toaz_official_ Reports. SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 1 STRATEGY AND VISION OF SUSTAINABLE DEVELOPMENT 37

EXPECTATIONS OF A STAKEHOLDER FORMS OF INTERACTIONS

LOCAL COMMUNITIES

• Local communities support programs • Conclusion of cooperation agreements • Implementation of the Company`s activities with • Company`s social initiatives implementation due account for the local communities` interests • Holding public events • Reducing the negative environmental impact and • Publications in local mass media contributing to environmental improvement • Communication with non-profit organizations

MASS MEDIA

• Completeness and accuracy of public information • Press releases on important events on the Company`s activities and its impact on the • Press conferences arrangement life of the region • Informing the media through news and public reports

1.6 INNOVATION DEVELOPMENT OF THE COMPANY Research and innovative Togliattiazot is always open “On connection of Bently Nevada technologies are an important to exchange information on the 7200 vibration monitoring system of component of the Company`s existing technical achievements with carbamate pumps 11-МР-2В, 14-МР- development. TOAZ employees the expert community and other 2А to the automated process control participate in the development of enterprises of chemical industry. system Centum VP using the Modbus various solutions aimed at production IPDPD specialists regularly RTU protocol”; “On reconnecting processes improvement, based on publish research papers on topics the Enraf servo level control station their many years of experience and relevant both for the Company from the APC Smart-UPS 750 high qualifications. and for the whole industry, and uninterruptible power supply to TOAZ holds more than 100 also generalize the accumulated the LIEBERT uninterruptible power patents for inventions. information and publish it in the form supply unit of the HINET system”. Scientific and practical activities of textbooks for universities, which The total economic effect from are an important component in terms are sent to the scientific libraries of ideas accepted for implementation is of operation and modernization of the region of presence and other more than 32.8 million rubles. the Company. The Company actively regions. ТИР | Идеи к реализации, 2019 invests in the production facilities In 2018, the motivational YIW | IDEAS FOR re-equipping and introduces into program “YIW. Your idea works” IMPLEMENTATION, 2019 the process both advanced world was started. It is aimed at increasing technologies and the solutions the involvement of employees in developed with the participation of the development of the enterprise, 18% TOAZ employees. The Company has increasing productivity and quality 24% Intellectual Property Development of work performed, eliminating and Protection Department economic and organizational losses, 5% (hereinafter – IPDPD). improving working conditions, IPDPD employees conduct increasing the comfort and safety research and develop innovative of the workplace. In 2019, as part 53% technologies for application in the of the “YIW. Your idea works” chemical industry. All the innovative 240 applications with ideas were development results of the Company submitted from TOAZ employees, are legally protected, currently the 109 applications were accepted for Company has more than 100 patents implementation based on the results • Improving worplace organization and woring conditions for inventions. These up-to-date of the commission review. solutions are implemented as part In 2019, the following ideas • Improvement of technical of the modernization process and were implemented: “Installation and economic indicators are used to increase the operational of a service platform for clean and • Reduction of waste efficiency of production and solve dirty CO2 fraction valves”; “For of raw material and time • Ammonia production unit specific problems in the field of improvement of cooling of the • Environmental safety progress environmental protection. front bearing of IM-1001 motors”; PRODUCTION, SAFETY AND SALES OF PRODUCTS 39 PRODUCTION, SAFETY AND SALES OF PRODUCTS 2.1 TYPES OF PRODUCTS AND PRODUCTION VOLUME

of approximately 300 hectares of the 2019 was not only an anniversary 3 019 000 tons – ammonia output production site. year for Togliattiazot, but also a 785 000 tons – urea output Togliattiazot is one of three record year in terms of production 45 000 tons – UFC output chemical complexes in the world performance indicators. TOAZ 2.1 capable of producing three million produced a record volume of TYPES OF PRODUCTS tons of ammonia annually. ammonia in 40 years of operation – AND PRODUCTION PJSC TOAZ is one of the largest Ammonia is one of the most 3 019 000 tons, which is 9.6% more VOLUME chemical enterprises in Russia, one of important products of the chemical compared to 2018. the three major producers of ammonia industry, as it is used to obtain Urea output in 2019 amounted to in the country and among the ten nitrogen-containing compounds, nitric 785 000 tons which is 19.7% more world leaders. acid and fertilizers (ammonium nitrate, than in 2018. The main activity of the enterprise urea, complex fertilizers). UFC output in 2019 increased in 2.2 is the production of mineral fertilizers relation to the result of 2018 by 3.8% and chemical products. Currently, the The introduction of 100 kg of and amounted to 45 000 tons. 2 ENSURING SUPPLY OF RAW Ammonia water output in 2019 factory is comprised of seven plants ammonia per hectare of land MATERIALS AND EQUIPMENT for production of ammonia and two increases yield of wheat by increased compared to 2018 by urea plants, located in the territory 8-10%, corn by 60 %. 28.7% and amounted to 59 600 tons. 2.3 PRODUCTION PRODUCTS OUTPUT, `000 TONS EFFICIENCY 2016 2017 2018 2019 Dynamics 2018-2019 Ammonia water 64 52 46 59,6 29.6% 2.4 UFC 129 96 43 45 4.7% PROGRAM OF Urea 552 720 655 785 19.8% MODERNIZATION AND REVAMPING Ammonia 2856 2642 2754 3019 9.6% OF PRODUCTION Total 3601 3510 3498 3909 11.75% FACILITIES

PRODUCTS OUTPUT AMMONIA , OUTPUT, UFC OUTPUT, , FOR - 2014-2019 , (`000 TONS) `000 TONS `000 TONS 2.5 CONSTRUCTION OF UREA PLANT NO. 3

2.6 RESTRUCTURING OF THE REPAIR SERVICE

UREA OUTPUT, , `000 TONS CONSUMERS 2.7 SALES MARKETS Agriculture -Production of fertilizers AND TRANSPORTATION -Production of cosmetic, dyes Chemical industry and detergents OF PRODUCTS -Production of medicines Pharmaceutical companies -Formaldehyde resins production Household chemicals 2.8 Transport sector LABORATORY RESEARCH Woodworking enterprises AND DEVELOPMENT SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 2 PRODUCTION, SAFETY AND SALES OF PRODUCTS 41

In 2019, Ammonia Plant No. 2 ОБЪЕМVOLUME ИСПОЛЬЗУЕМОГО OF AMMONIA, produced 12 million tons of products OUTPUT RESOURCES ENSURING SUPPLY OF RAW ВMETHANOL КАЧЕСТВЕ СЫРЬЯAND UREA АММИАКА, since the start of its operation; 2.2 MATERIALS AND EQUIPMENT МЕТАНОЛАUSED AS RAW И КАРБАМИДА,MATERIALS Т Ammonia Plant No. 6 produced 13 Ammonia 3 019 000 million tons. Ammonia Plants have Natural gas 3 789 500000 achieve the production indicator of 85 (7 plants) tons million million tons since their start-up. Both cubic meters 375000 Urea Plants have produced 26 million PJSC TOAZ does not import One of the Company’s strategic tons of products since the start-up. Urea 785 000 Ammonia 466 000 products or raw materials, which targets is to increase competitiveness Ammonia Plant No. 7 increased guarantees protection of end through more efficient operating 250000 its productivity. It reached a record (2 plants) tons tons customers from currency fluctuations. activities, including reduction of output for PJSC TOAZ of 620 000 tons In addition to the raw materials production costs. In conditions of 125000 per year. needed for the production process, the outstripping growth in the cost In the reporting year, a record Togliattiazot purchases other types of of resources, this task is of particular UFC 45 000 Methanol 31 000 0 volume of ammonia shipment since goods, materials and services. importance. 2014 2014 2014 2014 the start of the plant for 60 million tons tons tons ammonia metanol urea was achieved. After the technical re-equipment of Plant No. 3, a record (among Chemico Ammonia wa- 59 600 Urea 11 000 Plants) minimum flow rate for natural ter output tons tons PRODUCTION gas per ton of ammonia was reached 2.3 and amounted to 1 270 000 m3/t. EFFICIENCY

VOLUME OF NATURAL GAS “Transammiak is a long- “Since 1981, when the USED AS RAW MATERIALS, term and reliable partner of ammonia pipeline was `000 000 M3 TOAZ. Due to the confident launched, our main task work of colleagues, TOAZ has been to guarantee ensures guaranteed sales of uninterrupted and safe 3800 its products to consumers transportation of TOAZ and in dozens of countries. I am other manufacturers’ products. confident that our cooperation We are successfully managing 3700 will continue, and in the near this task. I hope that the future we will celebrate the partnership of our enterprises shipment of the 100 millionth will develop for the benefit of 3600 ton of ammonia”. the Russian economy”.

Vladislav Pustynnikov 3500 Deputy General Director - Director on Andrey Ivanov Commercial Affairs General Director CJSC Corporation Togliattiazot PJSC Transammiak • Ammonia pipeline 3400 2016 2017 2018 2019 Shipment and transportation of • Mineral hoppers – 669 vehicles; the safety of shunting operations products is an integral part of the • Special machinery (cars, buses, during the supply and removal of On April 12, 2019, the dispatcher production process, in this regard, tractors) – 921 vehicles. wagons and during maneuvering of the Central Control Center of PJSC the well-managed operation of and transportation of goods. Transammiak, which manages the the Company`s transport services 47 kilometers of railway tracks, In relation to the last year, the rate Russian part of the Togliatti-Odessa is of great importance in the chain 88 railroad switches, 32 railroad of product shipment has increased. ammonia pipeline, confirmed the of delivery of finished products to crossings, 3 bridges, crossovers About a hundred wagons of finished fact of shipment of the 60 millionth customers. comprise track facilities of products are sent per day. ton of ammonia. PJSC TOAZ has a wide own Togliattiazot. In 2019, the overhaul Togliattiazot has an established The ammonia pipeline was rolling stock: of seven railway tracks with a total circle customers and consumers of built according to the project in the length of about four kilometers was products, both in the external and TOAZ-Transammiak-OPP complex • Diesel locomotives – 4 vehicles; completed. Wooden sleepers were domestic markets. The Company`s (Odessa Port Plant, Ukraine) and has • Tanks (for ammonia, UFC, replaced with reinforced concrete permanent partners appreciate been successfully operating for forty ammonia water, methanol) – ones, which made it possible to the reliability and high quality of years. The pipeline is the longest in 853 vehicles; double their service life and increase products under TOAZ brand. the world, its length is 2 417 km, it passes through the territory of Russia and Ukraine and serves to transport TRANSPORTATION products of PJSC TOAZ, as well as other enterprises to the port of Yuzhny (Odessa) for transshipment Way of transportation Volume of sales, tons % to ships (gas tankers). The capacity of the pipeline is up to 2.5 million Railway transport 1 021 770 29% tons per year, the production of Togliattiazot is about 75% of the total. Ammonia pipeline 2 332 390 67% The anniversary ton of ammonia Motor vehicles 151 416 4% was intended for the Russian consumers of TOAZ products. • Railway fleet of the Company SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 2 PRODUCTION, SAFETY AND SALES OF PRODUCTS 43

2.4 PROGRAM OF MODERNIZATION AND REVAMPING 2.5 CONSTRUCTION OF UREA PLANT NO. 3 OF PRODUCTION FACILITIES

Since 2012, PJSC TOAZ has development and increase of capacity in September, divided into 2 parts The priority project for design documentation, supply of the will subsequently be installed in been implementing a program for of the enterprise. (major overhaul in 2020); implementation of the investment equipment for construction. the converter and the boiler house, modernization of production facilities, In total, the modernization • Ammonia Plant No. 06 А was program of PJSC TOAZ in 2019 was The project has passed the second the construction of which is in the designed until 2022, under which a program will allow to significantly undergoing a planned overhaul: in the construction of Urea Plant No. 3. state examination. active phase. The installation of large-scale renewal of the enterprise is increase the operational and June-July, during which there was Site preparation was completed After the foundation was laid, the equipment is scheduled for the being performed. economical efficiency of the a replacement of MDEA solution in May 2019. After completion of the the construction of the prilling tower summer of 2020. The implementation of the Company. tank (item No. 335), condenser preparation, the process of arranging began. The construction rate of the Construction work at Urea strategic investment program aimed at In order to increase productivity, tank (item No. 6), sulphuric the foundation for the equipment of facility is two meters per day, the total Plant No. 3 is being carried out in the modernization and development improve efficiency and ensure the acid (item No. 11) and alkali the plant began. height of the structure is 107 meters, compliance with all industrial safety of the production facilities of PJSC stability and safety of production (item No. 12) tanks, condensate In order to ensure timely and and the diameter is 14.6 meters. requirements, as well as taking TOAZ remains a priority task, the processes in the ammonia production, pumps (item No. 426), primary uninterrupted supply of construction A special feature of the into account the ongoing main results of which are already positively the following technical measures flow feed pump pos. 317, highly materials, the installation of a concrete construction was the use of advanced production process: the prilling affecting the performance of the were carried out: demineralized water pumps (item distribution unit was planned on the technology, i.e. the slip formwork tower of Urea Plant No. 2 is located enterprise. In particular, during 2015– No. 18), relocation of underground territory of the production site. method. It allows, without removing nearby. In particular, a safe work 2018 the overhaul and modernization • Ammonia Plant No. 01 А: in May, CW tower pipeline outside, At the end of the summer, the or disassembling the formwork, to plan has been developed and strictly of ammonia plants, both isothermal the tube bundle of the boiler E-451 replacement of bubble trays on contractor carried out work on move it up and pour new portions of observed, which takes into account ammonia storages, factory`s process of Benfield solution was replaced; ammonia refrigeration units (item dismantling of concrete and metal concrete over the hardened layer. To the technological regime of Urea pipelines system, railway infrastructure • Ammonia Plant No. 02 А: in No. 901 A-G), replacement of utility structures and the reconstruction ensure the uniformity of the concrete Plant No. 2 and the use of personal were carried out. November-December, the feed air header and flare unit stack. of underground communications, and the formation of cold joints, the protective equipment. Construction water preheaters E-103 A/B/C freeing up the space for new work was carried out on a round-the- progress and safety regulations are The total volume of capi- were replaced, the LTC and HTC At the urea production facility construction. In the eastern part of the clock basis for over regularly inspected by representatives tal investments within the catalysts were replaced, the safety the following works within the site, a pile foundation for an electrical 50 days. of the organizations which provided framework of the production check valve was installed on the modernization framework have been substation was installed; in the In November 2019, the project for financing of the project. renovation and development fuel gas pipeline to the D-101 performed: western part, the foundation for the the construction of Urea Plant at the program has exceeded 47.5 primary reforming furnace; building of one of the key elements production site of PJSC TOAZ passed billion rubles since 2012. • Ammonia Plant No. 03 А was • Urea Plant No. 1 was under of the new facility, the future prilling public hearings to assess the facility`s More than 14 billion rubles put into operation in March after scheduled overhaul from August tower, was laid. The process of laying impact on the environment. The need was invested in moderniza- the completion of overhaul and to October to restore lining of the the foundation lasted for three days. for the public hearings is associated tion in 2019. commissioning of the automated reactor 11‑R‑1; During the foundation more than with the introduction of changes in “This project will allow process control system and • Urea Plant No. 2 was under 2700 m3 of concrete, supplied by the design documentation. Based on TOAZ to strengthen its automatic control and regulation scheduled overhaul from July three concrete pumps, which were the results of the hearings, Casale S.A. leadership in the market This program will allow to ramp system, repair and modernization to August to introduction of the continuously operated by more than and JSC NIIK were invited to finalize for products with higher up production volumes by increasing of compressor equipment, Yokogawa automated process 500 concrete mixers, was used. The the design documentation by the added value, such as urea. efficiency and uninterrupted replacement of catalysts; control system at compressor tests carried out have confirmed the end of 2019 in accordance with the At the same time, the new operation of plants, as well as to • Ammonia Plant No. 04 А was 14‑К‑1 and steam boiler 24‑В‑1. full compliance of the structure with comments and suggestions received facility meets all safety and reduce negative environmental stopped for unscheduled repair the industrial safety requirements. and send it to the State Environmental environmental requirements, impact due to introduction of modern since October 2018; in 2019, the At the UFC production facility, By this time, the site for the storage Expert Review. which means that residents of high-efficiency equipment. Under foundations of the D-101 primary scheduled overhauls with the of pipes and building materials was In addition, the supply of large- Togliatti have nothing to worry the program, TOAZ introduces the reforming furnace were erected; replacement of catalysts were carried already prepared. capacity equipment to the plant about. I believe that they have latest technologies, which result • Ammonia Plant No. 05 А was out on the 3rd train in May and on the At the process site, a concrete started last year. The separator of the demonstrated their confidence from the engineering work of both undergoing a planned overhaul 4th train in August 2019. mixing unit began operation, the second stage evaporator with a total in what Togliattiazot is doing the world’s leading developers and capacity of which will provide weight of 55 tons, the urea solution by re-supporting this project”. the Company`s employees. The tank with a total weight of 48 tons concrete for all construction work Viktor Kazachkov major overhaul and modernization at Urea Plant No. 3. The final stage and economizer with a total weight Director of Technical Policy projects implemented in 2019 are set was the development of working of 110 tons were delivered to the PJSC TOAZ out below: documentation and updating of the Togliattiazot site. This equipment

• A large-scale overhaul of Ammonia Plant No. 3 was completed, which PROJECT IN FIGURES* made it possible to stabilize the operation of the equipment * at the end of 2019 and reduce by almost 10% the consumption of natural gas per ton Designed Were excavated foundation of product at this plant; 316 piles • Ammonia Plant No. 6 was repaired; % • Work was carried out on both 84.9 21 409 m3 of ground were driven Urea Plants, including overhaul of Urea Plant No.1 reactor and the Equipment Were mounted m3 of concrete structures introduction of Yokogawa process delivered m3 of underground 6 694 control system at Urea Plant No. 2. 3 738 pipelines were mounted 35% Modernization and overhaul tons of of production facilities is the most Construction progress 84.9% 21.7 metal structures important stage in implementation of design documentation was of the Company`s plans in terms of • Ammonia Compression Operator 17.44% developed were mounted SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 2 PRODUCTION, SAFETY AND SALES OF PRODUCTS 45 2.6 RESTRUCTURING OF THE REPAIR SERVICE

Environmental aspects the enterprise in terms of scope of • Technical re-equipping of In 2019, TOAZ began work and investments. ammonia plant No. 7; implementing a program to improve PJSC TOAZ organizes noise level The Plant received modernized • Technical re-equipping of urea the maintenance and repair system monitoring and measurements of turbine, compressor, rotating plant No. 1; (MRS). The need to transform harmful substances concentration equipment and a new control • Technical re-equipping of urea the repair service has appeared in the atmosphere both on the system. Technical re-equipping plant No. 2; after strategizing the Company`s construction site and on the made it possible to stabilize the • The construction of new urea development program until 2025, boundaries of the sanitary protection operation of the plant and reduce plant No. 3 with a production which implies a significant increase zone. the consumption of natural gas per capacity of 2200 MTD; in production through increased - The monitoring is carried out ton of product by almost 10%, which • Technical re-equipping of business efficiency. The growth by an independent laboratory of will ensure significant economic water treatment plant of urea of production cannot be imagined Ecostandard LLC, which meets the and environmental benefits. production; without quality repairs. requirements of the International Also, the environmental safety of • Revamping of the gas The key tasks of the transformation Finance Corporation. production has increased due to the measurement and pressure are building of a system for organizing - In April and September 2019, improvement of the K-901 ammonia reduction unit; repairs in accordance with world two monitoring studies of the compressor. • Revamping of the wastewater practices, reducing shutdown repairs construction environmental impact The turbines were renovated treatment facilities; and increasing equipment reliability. were carried out. As a result, it was by Telatek Engineering Plant, a • Technical re-equipping of concluded that the construction of partner of General Electric the the workshop responsible the Urea Plant with a capacity of 2200 general contractor of the project. In for ammonia preparation for • Repair work in progress MTD does not affect the acoustic addition, the plant was transfered transportation; “In the future, Togliattiazot department manages the repair permanent basis: a chief mechanical situation within the boundaries of to a Honeywell automated digital • Modernization of the water needs to reach a three-year personnel, therefore its task is to engineer, a chief power engineer the sanitary protection zone. In production control system, which purification plant of PJSC TOAZ overhaul period and increase constantly monitor and analyze and a chief metrologist. The center addition, no impact of construction minimizes the impact of the human with the start-up of reverse ammonia production by the condition of the equipment, will be engaged in the development on the air condition was revealed. factor, improves the reliability, osmosis unit; 1 million tons, in order to transfer requests for repair to of technology and methodology for safety of equipment operation and • Technical re-equipping of the achieve this it is necessary to the performer of the work. The carrying out repairs by directions, maintains an optimal technological Azotnaya Station. improve the quality of repairs. division is responsible for formation control over technology compliance ABOUT UREA PLANT NO. 3, mode. Therefore, we decided to opt of demands, organization and during performance of work and PJSC TOAZ Ammonia Plant No. 3 has been In the framework of for using the best practices to acceptance of repair work together equipment examination, analysis In October 2018, Togliattiazot brought up to the design capacity. implementation of the new Strategy, create a world-class service, as with the process personnel, as well of the causes of equipment failure, launched a project for construction it is planned to build a new complex well as reliability management as collecting a list of all defects and development of appropriate of Urea Plant No. 3 at the production Priority activities and for the production of nitric acid and service, development and ensuring safety during repairs. solutions and other tasks. site in Togliatti. The design prospects for development ammonium nitrate that will become implementation of solutions to The functions of planning and A working group of nine capacity of the plant will be 2200 another step for the Company on the reduce shutdown maintenance. formation of demands for purchases people was formed specially for the tons per day, which will allow to way to leadership in the production The development of the enterprise I would like to emphasize that to perform repairs are concentrated implementation of the project. At the increase the existing production of nitrogen fertilizers in Russia, is carried out in accordance with the the changes do not imply in a separate department of the initial stage, about 50 applications capacity of the enterprise for the allowing it to become one of the five new development strategy of the the physical movement of department. Its specialists are from employees of different shops production of urea by more than largest producers in the world. Company until 2025, Investment specialists from the workshops, engaged in the plans and schedules were submitted for participation in the 70%. Commissioning of the plant program of PJSC TOAZ for the reduction of personnel and development, determination of project. The working group, which is expected in 2021. The project period until 2022 and the schedule salary. Everyone will retain the repair performers, the timing of began the work on November 18, budget is over 25 billion rubles. The of major overhauls adopted by the workplace, there will only be elimination of the defect according 2019, includes promising employees project is financed by PJSC TOAZ`s Board of Directors. These documents changes in the organizational to priorities, allocation of resources of production departments. Before own and borrowed resources. In determine the major projects of the structure of the repair personnel of the repair personnel, acceptance becoming participants of the March 2018, Togliattiazot signed a Company, which meet production of technological shops, which of applications for the purchase transformation, these employees loan agreement with the syndicate and management goals, social policy will become subordinate to the of inventory items and services, were tested and interviewed; they of banks Commerzbank AG (Zurich, and corporate activities. Repair Department”. and engaged in contracts with proved competence and analytical Switzerland) and Landesbank Baden- The tasks of the enterprise for contractors. skills. W ttemberg (Stuttgart, Germany) Dmitry Mezheedov ür 2020 are the phased implementation “The plant is equipped with In addition to the customer The improved MRS system for 180 million euros for the period General Director of the investment program for the a new steam turbine of a Siemens service department and planning shall start working in the first half of 9 years. The guarantor is Swiss CJSC Corporation Togliattiazot development of the Company air compressor, it is economical, division, the new structure will have of 2020. However, the developers Export Risk Insurance Agency In 2020, PJSC TOAZ will it consumes less steam and it several new divisions dealing with: note that after the transition, it will (SERV). The project of the plant focus its efforts on the following is technically more advanced reliability department (development take some time to stabilize internal was developed in collaboration with projects, implementation of which and has a power reserve. Air and implementation of repair processes. Casale S.A. (Lugano, Switzerland) will contribute to ensuring stable compressor housings were It is worth noting the general strategies by groups and units of At the end of 2019, the target taking into account the latest operation of production and upgraded. In order to carry out tendency to reduce the time of equipment, ensuring equipment organizational structure of the technologies in the field of industrial reliability: technical re-equipping of the shutdown repairs at chemical reliability and analyzing the reasons Repair Directorate was approved. and environmental safety, that will low and high pressure turbines enterprises in Russia, i.e. once every for its downtime), shutdown repair Further, there shall be the plan for guarantee a significant reduction in of the synthesis gas compressor, two or three years for up to forty management (duration and list the transition to the target model, air emissions. • Technical re-equipping of both turbines were dismantled days. of shutdown repairs, scheduling, study and elimination of risks for ammonia plant No. 1; and sent for repairs to Finland”. The main change in the control of the timing and quality of the repair service. TOAZ completed the over- • Technical re-equipping of improvement of the service will repairs, formation of requirements It worth noting, that the program haul of Ammonia Plant No. 3 ammonia plant No. 2; affect the repair personnel from for the necessary resources etc.). is aimed at restarting the repair • Technical re-equipping of Viktor Kazachkov the process shops, which will be An expert review will also enter system of Togliattiazot and bringing The overhaul of Ammonia Plant ammonia plant No. 3; Director of Technical Policy transferred to the repair shops and in the repair department, which it to a new level, where planning, No. 3 has become one of the most • Technical re-equipping of PJSC TOAZ the customer’s service department will include the chief specialists diagnostics and reliability will be of ambitious projects in the history of ammonia plant No. 4; being created. The customer service of the enterprise as experts on a top priority. SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 2 PRODUCTION, SAFETY AND SALES OF PRODUCTS 47

2.7 SALES MARKETS AND TRANSPORTATION OF PRODUCTS The volume of supply/shipments of main products by means of transportation Type 2016 2017 2018 2019 of transportation In 2019, TOAZ took about 30% Tons Tons, Structure of the Russian market and 11% of TOAZ product sales in the domestic market turnover world ammonia exports. and for export in 2019 Ammonia pipeline 2 041 1689 2 081 83 % 12% 67%

The main products of the Railway transport 1 588 1 764 781 66 % 31% 29% enterprise are liquid technical Products domestic market export ammonia, urea, urea-formaldehyde Motor vehicles 224 242 220 0 % concentrate, ammonia water. -31% 4% Foreign buyers are located in dozens Tons % Tons % Total 3 853 3 695 3 082 0 % of countries around the world on 14% 100% five continents. The main buyers Ammonia 436 078 17% 2 141 982 83% of ammonia in 2019 are Morocco, * The volume of deliveries by railway transport is indicated taking into account the methanol of TOMET LLC Turkey, Belgium, India, Bulgaria and transported by PJSC TOAZ under the service agreement. Tunisia. The main buyers of urea in Urea 273 263 34% 530 385 66% 2019 are Mexico, Peru, India and Senegal. UFC 39 630 100% 0% At the beginning of 2019, the The dynamics of the number of TOAZ OWN TRANSPORT, Собственный транспорт ТОАЗ 2016-2019 гг. Company`s management was active- units of TOAZ own rolling stock and 2016-2019 Ammonia 59 169 100% 0% own vehicles is presented below. ly resolving issues of ensuring un- 1600 interrupted supplies of ammonia to water VOLUMES OF PURCHASES 1200 EXPORT OF AMMONIA IN 2019, EXPORT OF UREA IN 2019, the Turkish authorities to cross the Other conditions being equal, `000 2019 TONS , ЭКСПОРТ`000 TONS КАРБАМИДА straits at night, TOAZ sent appeals PJSC TOAZ prefers to cooperate with and negotiated with the Consulate 800 600 В 2019 г. тыс. т local suppliers, thereby contributing General of the Russian Federation to the economic development of 500 400 25 in Turkey and with representatives Samara Region. The number of 400 of the Turkish Maritime Chamber of local suppliers with which the 0 2 Shipping, as well as with the vessel 2016 2017 2018 2019 300 Company cooperated in 2019 was 15 traffic service in Istanbul. 168 organizations. This is 34.78% of 200 1 In 2019, TOAZ`s share in the the total number of suppliers (483 Railroa rollin stoc 100 5 Russian urea market was 17% and 1% organizations in total). ehicles 0 in the global market. The uninterrupted supply is en-

Spain sured by a developed transport infra- nia Meico Senegal ther Turey

Tunisia VOLUMES OF PURCHASES, Argentina

onduras EXPORT GEOGRAPHY raine

Costa Rica structure: in addition to its own rail- ularia elium Morocco , way fleet (1 523 wagons), TOAZ has BILLION RUBLES. access to the unique Togliatti-Odessa 28 end customers. In the first quarter of a length of more than 150 meters ammonia pipeline with a length of the reporting period, the Company were to pass the Turkish sea straits more than 2,400 km. The length of 21 worked on reduction of the transit exclusively during daylight hours TOAZ`s own railways is about 47 time for ammonia tankers through and only accompanied by tugboats. km. The structure of the Company`s the Turkish sea straits. The problem Thus, the passage time for each tank- shipments in the context of transpor- 14 of increasing the idle time of ships er per voyage increased to two-three tation methods for the main types of in the Turkish straits at the begin- weeks. To obtain permission from products is presented below. 7 ning of 2019 is caused by the fact 0 that the Turkish Government intro- 2016 2017 2018 2019 duced new rules for the passage of the Bosphorus and Dardanelles in Total purchases September 2018. According to new olume of purchases from local suppliers safety requirements, gas tankers with

“The active position of Togliattiazot helped to resolve the situation. This allowed our UREA: company to timely fulfill its Argentina, Guatemala, Germany, obligations to customers, as Honduras, Spain, India, Costa Rica, well as to avoid a significant Cote d’Ivoire, Mexico, Netherlands, increase in the cost of crossing Nicaragua, Peru, Poland, Senegal, the Dardanelles and increase the France, Ecuador cargo turnover of the fleet”. AMMONIA: Vladislav Pustynnikov Belarus, Belgium, Bulgaria, Deputy General Director - Director on Commercial Affairs Greece, Spain, India, Morocco, CJSC Corporation Togliattiazot Tunisia, • Delivery of products by water transport Turkey, Ukraine SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 2 PRODUCTION, SAFETY AND SALES OF PRODUCTS 49

• Laboratory specialists at work

2.8 LABORATORY RESEARCH AND DEVELOPMENT PJSC TOAZ values the trust of Control Department. third-party research organizations, consumers and carefully monitors The object of activity of the Central surveys to stabilize production the quality and safety of its products, Factory Laboratory is organization and and develop measures to improve therefore close attention is paid to ensuring of research and development technology, clarify the norms of internal quality control at all stages of works on improvement of existing the technological regime, eliminate the production chain. and introduction of new technologies, excessive consumption of raw Quality assessment is carried out implementation of analytical control of materials and energy resources. in accordance with legal requirements, production facilities while performing 4. Preparation of necessary data and state standards, regulatory and technical pilot studies, introducing new verification of analysis methods for documents, internal standards and and improving existing processes, projects developed by TOAZ, and procedures. identifying and eliminating reasons of revision of existing specifications Input control is performed in process malfunctions. and standards. order to establish compliance of The Central Factory Laboratory 5. Methodological guidance provided the supplied products with the consists of the following divisions: by laboratory departments of the requirements of regulatory documents Company, ensuring correctness of (state and technical specifications) • Ammonia and methanol laboratory, analysis methods, development of to determine possibility of its further • UFC and urea laboratory, new methods of analytical control use in production and to prevent the • Construction materials laboratory, of production. use of products, which do not meet • Analytical laboratory. the established requirements, in the In 2019, the following organizations production process. PJSC TOAZ laboratories are carried out air quality control at the Operational control is carried completed with modern equipment, production site as part of industrial out in order to ensure control and which allows conducting research environmental control: maintenance of stable parameters of work, ensuring high accuracy of technological processes in accordance product quality analysis and effective 1. Accredited sanitary and industrial with operational procedures and control of the production process. laboratory of workshop No. 34 of approved schedules. Responsibilities of the Central PJSC TOAZ; Acceptance control of products Factory Laboratory include as follows: 2. Accredited laboratory FSBI “CLATM is performed in order to obtain VFD” (Federal State Budgetary certificates of compliance of quality of 1. Development of recommendations Institution “Center for Laboratory the finished product to the established aimed at intensification of Analysis and Technical Measurements requirements. production. of the Volga Federal District.”) Many years of experience, a high 2. Optimization of process parameters level of expertise and a leading position to increase output of products, In 2019, air quality control in in the market allow the Company to improve their quality, reduce the sanitary protection zone of the carry out unique research and the latest consumption indices of feedstock enterprise was carried out by an developments in order to increase the and power, and reduce production accredited laboratory Federal State efficiency of the enterprise. waste. Budgetary Institution Volga Territorial • Сonducting control on the territory of the enterprise The Company has the Central 3. Carrying out, jointly with other Administration for Hydrometeorological Factory Laboratory and the Technical divisions of the Company and and Environmental Monitoring. ECONOMIC SUSTAINABILITY ECONOMIC 51 SUSTAINABILITY 3.1 ECONOMIC GROWTH INDICATORS

“2019 for Togliattiazot 3.1 was marked by a number ECONOMIC GROWTH of outstanding results both in terms of production and INDICATORS sales policy. We have not just increased production, which is a consequence of constant modernization, increasing the stability and safety of the plants. 3.2 For the first time, TOAZ became COMPANY`S ASSETS the largest supplier of urea to 3 the Russian agricultural market, which testifies to the successful work of the commercial services of the enterprise, helping to overcome the unstable situation on the world markets with less losses. Despite all the difficulties, the changing market situation • Factory management building and non-market factors, TOAZ Revenues for 2019 amounted of ammonia in dollar turned out to be continues to develop. We to 54 159 million rubles, which is 15% lower than the budgetary plans are building Urea Plant No. 3 higher than the same period in 2018 of the Company, and the price of on schedule; a new strategy by 622 million rubles. The increase urea 5% lower. with ambitious goals has in revenue from selling the main In 2019, Togliattiazot fulfilled all been adopted, which sets the products was due to an increase in of its tax and social obligations on guidelines for moving forward sales volumes. time and in full, and implemented a for the next 5 years. 2019 has The net profit of the Company broad social responsibility program shown that our team could in 2019 amounted to 5 510 million aimed at developing the key region solve the most difficult tasks, rubles, which is 1 613 million rubles of operations, Samara region. meet new challenges and help lower than the net profit in 2018 which In the reporting period, tax Togliattiazot develop in the most amounted to 7123 million rubles. The payments to the budgets of all levels difficult conditions”. main factors for the decrease in the amounted to 5.33 billion rubles, financial result in the reporting year which is 9% higher than in 2018 Dmitry Mezheedov are the growth of the Company`s tax (4.91 billion rubles). The company General Director liabilities and the fall of prices for the has once again confirmed its status CJSC Corporation Togliattiazot main products of PJSC TOAZ on the as one of the largest taxpayers in world market. Thus, the actual price Samara region.

KEY FINANCIAL INDICATORS

Indicator 2019, 2018, `000 rubles `000 rubles Revenue (less VAT) 54 158 927 53 537 206

Cost of goods sold (24 986 263) (22 249 109)

Profit (loss) on sales 8 671 263 13 073 377

Profit (loss) before taxation 11 242 627 9 864 479

Income tax and similar (5 732 415) (2 741 703) mandatory payments, deferred tax assets and liabilities

Net profit (loss) 5 510 212 7 122 776 from ordinary activities SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 3 ECONOMIC SUSTAINABILITY 53

3.2 COMPANY`S ASSETS

In 2019, to reduce the influence of • Implementation of better cash- • Improving the efficiency of use of exogenous factors on the economic flow planning tools; available assets; performance of the Company a • Evaluation of non-core production • Strengthening of budget control. number of measures was taken: units’ performance;

Indicator Code As of 31 Decem- As of 31 Decem- As of 31 Decem- GENERATED AND DISTRIBUTED ECONOMIC VALUE OF THE COMPANY (billion rubles ) ber 2019, ber 2018, ber 2017, `000 rubles `000 rubles `000 rubles 2016 2017 2018 2019 ASSET Generated straight 45,52 43,07 54,31 54,5 I. NONCURRENT ASSETS economic value Intangible assets 1110 1 2 - Revenue 44,35 42,18 53,53 54,16 Research and development 1120 - - - Income from financial 1,17 0,87 0,78 0,34 results investments Intangible development assets 1130 - - - Income from sales 0,0002 0,02 of tangible assets Tangible 1140 - - - development assets Distributed 41,48 38,83 45,67 50,80 economic value Fixed assets 1150 43 605 451 39 441 083 35 608 027 AMONG SUPPLIERS AND CONTRACTORS Income bearing 1160 - - - investments Operational costs 34,42 33,93 38,02 42,56 in tangible assets excluding salaries Financial investments 1170 1 136 424 1 259 793 7 507 167 AMONG EMPLOYEES Deferred tax assets 1180 250 793 201 299 163 637 Salaries 2,59 2,12 2,44 2,64 Other noncurrent assets 1190 25 080 130 16 061 521 9 914 818 Other payments and benefits 0,08 0,04 0,03 0,06 for employees Total section I 1100 70 072 799 56 963 698 53 193 649 AMONG LOCAL COMMUNITIES II. CURRENT ASSETS Charitable donations 0,032 0,008 0,010 0,011 Inventory 1210 6 547 071 7 885 991 8 320 640 Value added tax 1220 130 850 265 339 1 902 697 Sponsor support 0,016 0,003 0,002 0,005 on acquired assets

AMONG SHAREHOLDERS AND INVESTORS Accounts receivable 1230 16 115 643 11 464 014 10 950 435 Payments 0,14 0,33 0,27 0,22 Financial investments (excluding 1240 15 671 3 418 100 2 744 231 to capital providers monetary equivalents) Including dividends 0 0 0 0,11 Cash assets and monetary 1250 8 909 777 10 272 578 3 908 185 Including finance costs 0,14 0,33 0,27 0,11 equivalents AMONG STATE BODIES Other 1260 114 810 143 484 107 337 current assets 4,2 2,4 4,9 5,3 Total section II 1200 31 833 822 33 449 506 27 933 525 Undistributed 4,04 4,24 8,64 3,7 economic value TOTAL 1600 101 906 621 90 413 204 81 127 174 SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 3 ECONOMIC SUSTAINABILITY 55

Indicator Code As of 31 Decem- As of 31 Decem- As of 31 Decem- ber 2019, ber 2018, ber 2017, `000 rubles `000 rubles `000 rubles LIABILITES III. EQUITY Share capital (joint capital, 1310 97 116 97 116 97 116 authorised fund, contributions of partners) Shares repurchased 1320 - - - from shareholders Re-evaluation of non-current 1340 1 233 477 1 233 477 1 476 389 assets Additional fund 1350 - - - (without re-evaluation) Reserve fund 1360 4 856 4 856 4 856 Undistributed profits 1370 78 127 040 73 972 793 66 605 508 (uncovered loss) Total section III 1300 79 462 489 75 308 242 68 183 869 IV. LONG-TERM LIABILITIES • A bird`s eye view of the factory Borrowed assets 1410 9 817 302 4 804 729 1 440 005

Deferred 1420 538 668 442 491 362 540 According to the results of DYNAMICS DYNAMICS tax liabilities 2019, PJSC TOAZ maintained the OF THE BALANCE SHEET OF THE COMPANY`S NET ASSETS TOTAL VALUE (`000 RUBLES) (`000 RUBLES) Company`s net assets at high level, (.) Estimated liabilities 1430 - - - significantly exceeding the values (.) of 2018, which indicates that the Other liabilities 1450 - - - Company retained and increased its investment attractiveness 110000000 Other liabilities 1400 10 355 970 5 247 220 1 802 545 among shareholders, creditors and 80000000 employees. V. SHORT-TERM In 2019, a loss adjustment on the 82500000 75000000 LIABILTIES insured accident that occurred in 2018 at Ammonia Plant No. 4 was Borrowed assets 1510 1 648 039 1 658 045 2 710 685 completed. The insurance proceeds 55000000 70000000 amounted to 3.9 billion rubles. Accounts payable 1520 9 361 322 6 338 036 6 101 444 In order to improve the liquidity 27500000 65000000 indicators of the Company, to Income of future periods 1530 429 16 23 improve the efficiency of cash 0 60000000 flow planning, in 2019 the forms of 2016 2017 2018 2019 2016 2017 2018 2019 Estimated liabilities 1540 1 075 928 1 860 002 2 327 840 settlements using discounted letters of credit were used for settlements Other liabilities 1550 2 444 1 643 768 with customers for operating The value of balance sheet total As at the end of 2019, net assets amounted to 79.4 billion rubles. Total section V 1500 12 088 162 9 857 742 11 140 760 activities. for 2019 increased by 11 billion rubles. BALANCE 1700 101 906 621 90 413 204 81 127 174 HUMAN CAPITAL ASSETS AND FORMATION OF A PROFESSIONAL TEAM 57 HUMAN CAPITAL ASSETS 4.1 THE COMPANY STAFF AND FORMATION AND FORMATION OF A PROFESSIONAL TEAM

OF A PROFESSIONAL TEAM The general approach of the implementing team development enterprise to sustainable development and attracting new employees Key indicators is formed on the basis of the principle (about 100 jobs are planned to be for 2019: of creating a professional, well- created upon completion of the plant coordinated team. PJSC TOAZ invests construction). For future employees, in human resources, providing career guidance is also being carried 53 379 RUBLES employees with competitive out through initiatives aimed at is an average salary remuneration, opportunity for popularizing of chemical education. of a TOAZ employee 4.1 professional development and career In the field of labour relations THE COMPANY STAFF growth, social support programs, and social protection, PJSC TOAZ is AND FORMATION and ensures health care and disease guided by the Collective Bargaining 262,3 MILLION RUBLES OF A PROFESSIONAL prevention, takes care of safe and Agreement, which is the main is a total amount of funds comfortable working conditions. document regulating the relationship allocated to social projects TEAM As part of the employee between the employees and the motivation program, the company employer, contributing to the offers salaries, which are competitive formation of reliable partnership 3 in the region of presence, as well as relations. The Collective Bargaining professional skills contests 4.2 various forms of material and non- Agreement of the enterprise for “The best in profession” were held TRAINING material rewards. The policy in the many years has been a leader among 4 field of remuneration and motivation similar enterprises and is recognized AND PROFESSIONAL system is aimed at encouraging as the best in the region. 592 employees to increase interest in the PJSC TOAZ takes care of DEVELOPMENT employees have efficiency of work and improve its employees` health. The policy in a higher education quality in order to achieve enterprise the field of health insurance is being targets by creating a common actively implemented, analysis and effective remuneration system. constant monitoring of existing 4.3 The Company pursues an voluntary health insurance programs 43,8 YEARS REMUNERATION active personnel policy, which is is carried out. Much attention is paid is an average age SYSTEM an integrated coordinated system, to sports initiatives. of a TOAZ employee including the recruitment, training The following priorities are and retraining of all categories defined in the personnel policy of of employees. One of the most PJSC TOAZ: 2 446 important directions is creation of employees are 4.4 conditions for increasing efficiency, • Improvement of the human resources of age 30-50 years SOCIAL SUPPORT developing staff business initiative management system; and creative activity. As part of long- • Monitoring of effective managers and OF EMPLOYEES, term planning, a labour pool in key highly qualified specialists capable of 4 195 INCENTIVES areas is being formed. implementing the company`s strategy; In connection with the • Providing competitive working employees are modernization of production and conditions; provided with VHI the construction of Urea Plant • Employees development; No.3, the Company is continuously • Maintaining corporate culture. 556 employees recreated and took a treatment course in Nadezhda health resort 130 LAOR SECURITY REARDS SYSTEM employees obtained apartments for corporate residence

“For 40 years, the factory has produced almost 84 million tons of ammonia and HEALTH more than 26 million tons of PROGRAM urea. This is not just statistics, this are the success and achievements of every day TRAINING AND the employees of the factory DEVELOPMENT lived”. SOCIAL Petr Ordzhonikidze SUPPORT Chairman of PJSC TOAZ Board of Directors SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 4 HUMAN CAPITAL ASSETS AND FORMATION OF A PROFESSIONAL TEAM 59

4.2 TRAINING AND PROFESSIONAL DEVELOPMENT

Organizational structure TURNOVER stability, loyalty of employees, as to count upon career growth and of human resources OF EMPLOYEES DYNAMICS well as reliability of PJSC TOAZ as an Togliattiazot is interested in remuneration corresponding to his/ IN 2018-2019 employer in the region of presence. her level of training and personal management and Collective The percent of workers with the professional development contribution to the business of Bargaining Agreement secondary vocational education of its employees, the the Company. PJSC TOAZ assists and higher is 62.4%. Automation of Company allocates significant young employees of the enterprise The Company has developed production processes leads to an amount of funds in this in obtaining higher education by and approved a number of official increase in the number of workers direction, focusing on partial or full tuition assistance at a documents regulating various areas with higher specialized education. university. 4 implementation of the best in the field of labour management of PJSC TOAZ has a grant training In the reporting year, three employees: program, which implies training in practices. candidates from the labour pool higher educational institutions at the were trained under the Management 1. Regulations on recruitment of expense of the enterprise. training for organization of the employees of PJSC TOAZ; Employees form the basis of As a result of modernization national economy of the Russian 2. Regulations on equipping of the enterprise’s activities, therefore and implementation of investment Federation program (Presidential workplaces of PJSC TOAZ; increasing the efficiency and projects, TOAZ receives high- Program). Based on the results of the 3. Regulations on labour personal interest of employees LEVEL OF EDUCATION technology equipment and creates training, the participants completed remuneration of PJSC TOAZ; in achieving high results are the OF PJSC TOAZ EMPLOYEES new jobs for qualified specialists. project work on topics relevant to the 4. Regulations on the rate of main areas of personnel policy. In this regard, with an equal level enterprise. • Studying proccess bonuses to employees of PJSC The personnel structure over the of qualifications, the recruitment In 2019, 13 728 employees the category of managers, specialists TOAZ, including regulation on past years has remained stable and advantage is given to specialists underwent professional training and workers attended the testing. special kinds of bonuses; meets the needs of the enterprise. with a higher specialized education and advanced training, which is 6% As a result, the employees of the 5. Regulations on the procedure Comfortable working conditions who are able to work on the latest more than in 2018. 211 employees Company demonstrated a level of for establishing personal and expanded employment benefits equipment, which makes it possible improved their qualifications in numerical and verbal abilities sufficient S ER bonuses to employees of PJSC ensure low turnover of employees. RK MPLOYEES to gradually improve the general third-party organizations. 86 people for professional performance. The O E E W IC TOAZ; The average age of employees of FF LISTS level of qualifications of employees. were qualified for work at the workers were additionally tested for O IA EC 6. Regulation on the awards of PJSC TOAZ is 43.8 years. The ratio P UTIVES For existing employees of the second workstation, out of which the factors of unsafe behavior. Based S EC PJSC TOAZ; of employees with work experience EX enterprise, training is provided to 37 remote control console operators. on the test results, managers provided 7. Regulations on honoured (baby boomers generation) and effectively apply new technologies 32 remote control console operators feedback to their subordinates. The employees of PJSC TOAZ; promising young workers (X and and procedures. took training and skills improvement test results will be used when deciding 8. Regulations on financial Y generation) is currently optimal. In the long run, the success program in technological process on the development of the employee assistance to employees of In 2019, the number of employees of Togliattiazot depends on the conducting at a computer simulator. (his/her training, transfer to other PJSC TOAZ; of Y generation increased by 7%. availability of labour pool of departnents, etc.). 9. Regulations on additional This contributes to the succession employees who have the potential to 3 116 employees were trained In addition to training its own pension benefits; of personnel, i.e. the transfer of continue to work in senior positions in labor protection, 700 peo- employees, an important area of as well as regulatory documents professional expertise and highly or to perform tasks of high level social and personnel policy of PJSC ensuring implementation of specialized knowledge. of complexity that require special ple were trained to work at TOAZ is the creation and long-term benefits. The average term of employment H | I technical knowledge and skills. The height and 2 383 had training development of a comprehensive at the enterprise is 11 years, which, S Centre for Training and Employees on industrial safety. rotation of workforce. The Company In 2019, the average headcount combined with low turnover of P Development of PJSC TOAZ was not only attracts young professionals, of employees was 4 110 people. employees indicators, reflects high created specifically to provide the During the year, Togliattiazot but also educates them from school. enterprise with professional workers also had Effective Mentor program PJSC TOAZ also carries out active and to ensure advanced training for for employees working with young work among schoolchildren and THE COMPOSITION OF PJSC TOAZ IN 2018-2019 BY GENERATION engineering and technical workers personnel, also a system of online students, systematically implementing and specialists. personnel training was launched. educational projects. In partnership Young employees are assisted In the reporting year, a new with leading technological universities in career growth at the enterprise procedure for assessing the and vocational educational institutions by the Youth Council. The professional status of TOAZ employees in the region of presence, there is a professional skill contests organized and the formation of a labour pool was program to attract students of industry- by the Council also allow to identify carried out. Over 3 950 employees specific educational institutions for 4 promising employees. In 2019, 3 have been assessed and over 3 000 subsequent employment in PJSC such competitions were held: “The individual development plans have TOAZ. Students conclude agreements best gas-electric welder”, “The best been developed. In the process of on mutual obligations with payment operator”, “The best mentor”, in assessing occupational statuses, over of scholarships and provision of the 4 which more than 130 employees 400 employees were included in the opportunity to have job training at the took part. lists of candidates for the labour pool. enterprise. The activities of the Center At the end of 2019, TOAZ In 2019, the work of the Togliatti for Training and Employees employees were tested for the general State University (TSU) Methodical 4 B Development is part of a motivation level of numerical and verbal abilities. Council was started, which includes 4 4 4 system that allows each employee 98% of the Company`s employees in TOAZ. SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 4 HUMAN CAPITAL ASSETS AND FORMATION OF A PROFESSIONAL TEAM 61

4.3 REMUNERATION SYSTEM

As part of the new Dual Training The salaries accounting system AVERAGE SALARY OF PJSC TOAZ EMPLOYEES project, in accordance with an of PJSC TOAZ is in full compliance agreement on cooperation with with employment and labour Togliatti chemical engineering legislation. 4 4 college, the enterprise concluded The average salary at the contracts for education with 8 enterprise in 2019 amounted to 4 4 4 students of the college. In 2019, 53 379 rubles, which is 4.7 times these students underwent practical higher than the minimum salary of training in workshops No. 01 A, 03 working population. A, 100, and in 2020 they will come to In the reporting year, PJSC work at PJSC TOAZ. TOAZ took measures to increase the 4 4 In 2019, 3 graduates of the Career share of the permanent-conditional Guidance program of Togliatti part of remuneration in the total chemical engineering college joined remuneration of the Company`s A T TOAZ team (workshops No. 01 А, employees to a value equal to at No. 03 А), three students of this least 70%. The increase in the share educational institution entered the of the permanent-conditional part of Career Guidance program. the remuneration of the Company`s In the reporting year, Togliattiazot employees was made by reducing for the first time became a participant the target amount of the bonus in the Golden HR festival, dedicated and at the same time increasing the to honouring 337 graduates of amount of personal premium for the colleges and technical schools employees of the enterprise. who graduated with honours from The salary, in addition to the city`s professional educational • Introductory practice of TSU students at the enterprise the main and motivational parts, institutions. Togliattiazot became the includes compensation payments, only representative of the chemical of these classes, the employees of were awarded a cash prize from the incentive payments and bonuses for industry at the ceremony. the enterprise conducted elective Company. performing particularly important The enterprise assists the courses on the topics “Production 119 students had industrial tasks outside the framework of main schoolchildren in the choice of the of ammonia and urea”, “Treatment work placement at TOAZ, most responsibilities. In 2019, salaries future job already at the secondary facilities of the enterprise” and of them are from TSU (59 people) were indexed by 3%, and in the education stage. To do that, TOAZ “Principles of work with personnel and Togliatti chemical engineering reporting year, on the occasion continues to cooperate closely with in the company”. Pupils of schools college (57 people). of reaching a production target of schools No. 10, 35, 39, 41, 57, 93, 94, No. 35, 41 took part in an excursion In 2019, Togliattiazot was first 3 million tons, the management 80 of Togliatti. around the enterprise. represented by its specialists at the decided to reward each employee of In 2019, PJSC TOAZ launched the Also in 2019, with the support of PJSC “iVolga” youth forum of the Volga the enterprise. Engineering Classes project together TOAZ and the Department of Education Federal District. The project, prepared with vocational guidance partners of the Togliatti City Administration, a for the forum by TOAZ employees, is Municipal budgetary educational competition The Best Chemistry Teacher called City competition of professional institutions School No. 41 and According to PJSC TOAZ was held. The skills for young professionals and Gymnasium No. 35. For the students winners who took the first three places students “Best in profession”.

Priority areas of activity and development prospects

In 2020, TOAZ will continue to program on personal and team implement career guidance programs, effectiveness, management trainings, namely: development of online training; • Revision of the mentors` • Supervising the work of the TSU motivation system; methodological council: developing • Updating the criteria for assessing of educational programms for professional statuses; business needs; • Automation of assessment • Development of the project of processes; engineering classes: involvement of • Training and development of students of 7th-8th grades; employees; • Development of the dual training • Formation of the labour pool of system: increase in coverage by 50%; the Company; • Revision of the Collective Professional development and Bargaining Agreement for 2020– training of employees also remain 2023; among the priority areas of the • Indexation of salaries by 5%; enterprise; within the framework of this • Holding a conference on the the following activities are planned: selection of the active core to the youth council for the period • Introduction of an internal training 2020–2023. • TSU chemistry students, 1st grade • Maintenance service employee at work SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 4 HUMAN CAPITAL ASSETS AND FORMATION OF A PROFESSIONAL TEAM 63 4.4 SOCIAL SUPPORT OF EMPLOYEES, INCENTIVES

Existing benefits of high performance indicators repertoire does not leave anyone the history of the factory and the and compensation of Togliattiazot were awarded indifferent. environment. Participants of the The policy of the Company is aimed special gifts (cars and family travel As part of the anniversary celebration could take a photo with at creating conditions for the social vouchers). A separate category of celebrations, 1 300 pensioners, superheroes as a souvenir. protection of employees, maintaining awardees was the winners of the members of the TOAZ veteran stability and a favourable psychological corporate innovation program “YIW: organization, received gifts and TOAZ through the eyes climate in the team. Your Idea Works!” prizes for the 40th anniversary of the of children The Collective Bargaining Agreement Chemist Day annually becomes a factory. On the anniversary of of PJSC TOAZ is recognized as one of holiday not only for all employees Togliattiazot, a drawing competition the best in Samara region among the of Togliattiazot, but also for the Hero race was also held among employees` enterprises of chemical industry. The local residents. On this day at the TOAZ employees are team- children. The following topics social program of the enterprise includes territory of the TOAZ Community oriented. Therefore, many events in of works were presented at the more than 50 benefits, guarantees center, each guest of the celebration the framework of the celebration of competition: “TOAZ, you are my and compensations such as providing participates in a rich program. The the anniversary of the factory were future”, “TOAZ, as I see you”, financial support in various life situations, concert of the guest celebrity and for family participation, and some “I want to do chemistry like preferential vouchers for children`s fireworks, which were admired by were focused exclusively on the father (mother, grandmother, camps and for treatment in health resorts, all residents of the Komsomolsk children of the factory employees. grandfather”), “Factory: how many providing transport and preferential district, traditionally became a bright Thus, for the 40th anniversary of interesting things there are!”, “What transportation services, dental services at point of the celebration. Togliattiazot and the International does chemistry look like? The a reduced cost, additional paid vacations, Children`s Day, the administration children`s view”, “TOAZ: a look into remuneration for work on anniversary Taking care of veterans organized a celebration called the future”. Young fans of fine arts dates, etc. Communication of former and “Future Heroes of TOAZ”. After at the age of 4 to 14 years old sent In 2019, preferential vouchers to • Rewarding of TOAZ employees on Chemist Day current employees is a wonderful registering and receiving a route 77 works to the competition. The children`s camps, including those on in 2019, 130 employees received the company`s managers considered tradition of Togliattiazot; it is map with a description of the trials, works of little artists were presented the Black Sea coast, were in demand. opportunity to move into the corporate it important to demonstrate their the continuity of generations, young participants could complete at the exhibition, which opened on This benefit was used by 174 employees house. 33 one-room, 21 two-room 1 attitude to the culture of production by the exchange of experience and tasks and receive memorable gifts. April 8 in the factory management (70% of them used the benefit for the three-room apartments were allocated personal example. knowledge, and the invaluable care Throughout the day, the guests building. One of the winning works first time). The Company allocated for this purpose. In the reporting and attention to veterans from the were entertained by the presenter, was used for the manufacture of more than 3 million rubles for this. year, a partnership agreement was Chemist Day 2019 administration. who cheerfully commented on the souvenirs within the framework of Financial assistance was provided to 211 concluded with JSC Togliattikhimbank The chemistry of movement Before the Chemist Day, an passage of the distance, conducted the PJSC TOAZ anniversary. All the employees in difficult life situations, for on preferential mortgages for members became the central theme of the excursion to the plant was organized quizzes on the knowledge of participants received prizes. a total amount of more than 8 million of the Youth Council and members of celebration on the occasion of the for the veterans, so that the older rubles. Payments after the birth of a child the Trade Union at the request of one double celebration: the Chemist generation could see with own eyes were received by 34 employees (680 or another public organization. In 2020, Day and the 40th anniversary of the that their life`s work is developing thousand rubles), a monthly allowance the enterprise will continue to collect factory. successfully. The veterans visited the for caring for a child from 1.5 to 3 years applications from employees in need of On the Chemist Day, the central industrial site and again plunged into old was provided to 51 people (more housing. figures of the celebration, of course, the working atmosphere for several than 618 thousand rubles). were factory workers, experienced hours. They were acquainted with For the children of employees of PJSC 40 years in a single rhythm production workers, company modern TOAZ with great pleasure, TOAZ, the only in Togliatti departmental Success comes to those who never employees who participated in saw how their favorite factory has Tulip kindergarten, which is fully stop moving forward. Having passed the construction and start-up of changed and renewed. The excursion financially supported by the Company, the way from a construction site to an plants, in the repair of equipment. ended in the factory museum, where was created. The kindergarten has been industry leader, Togliattiazot has been Particular attention was paid to those the veterans were presented with gifts operating since October 1993 and is proving this for 40 years. The team employees who work at TOAZ for in memory of the meeting. 300 former the only kindergarten with a swimming of chemists draws energy from new most of their lives. employees of Togliattiazot, who pool in the Shlyuzovy microdistrict. endeavors and sees each day as a new More than 160 employees of the stood at the origins of the enterprise, TOAZ fully provides the pupils of the opportunity to become better. The enterprise were awarded honorary built it and launched production, kindergarten with toys, textile products, chemistry of movement - this topic filled titles and awards of the Ministry of were invited to the White Hall of the furniture, and regularly carries out the life of the enterprise in 2019, not only Industry and Trade of the Russian Togliattiazot Community center to rennovation of the building and internal in the anniversary year, but also in the Federation, the Governor and the celebrate the Chemist Day and the premises. In the Tulip kindergarten, in year of records and high production Ministries of Industry and Trade, 40th anniversary of the enterprise. addition to preschool teachers, there indicators. Economic Development and Representatives of the PJSC TOAZ are focused specialists: music teachers, In 2019, as part of the program of Investments of Samara Region, the administration and the Trade Union physical instructor, art teacher, teachers- celebrating the 40th anniversary of PJSC Russian Trade Union of Chemical committee of the enterprise came to logopedists. Among teaching personnel, TOAZ, a large number of events were Industry Workers, the Samara congratulate the veterans. It is worth 50% of employees are people with held for employees and their families, Regional Duma, the Duma and the noting the special atmosphere that higher education, having the highest residents of the city and region. City Administration of Togliatti, prevails at veteran meetings, and and first professional categories. In 2019, as well as corporate awards. The the Chemist Day is no exception. 176 children of the Company employees General factory community “Honoured Chemist” badge of the People who have worked shoulder spent time under the watchful attention work days Ministry of Industry and Trade of to shoulder for decades cannot do and supervision. The initiative to hold community the Russian Federation was awarded otherwise, so each event turns out For the second year, PJSC TOAZ work days dedicated to the 40th to the remote control console to be incredibly soulful and leaves has been implementing a housing anniversary of TOAZ united all operator of ammonia production pleasant memories for a long time. program for employees. The apartment employees. The leaders, together with workshop No. 7, Alexander Filatov, This Chemist Day will be especially house consisting of 726 apartments their teams, cleaned the territory of who has worked at TOAZ for over remembered by the veterans of the constructed by the Company is located their enterprise. The environmental 33 years. 20 employees who made enterprise, this is because a popular in the Central District of Togliatti at campaign was also supported by the a significant personal contribution performer, a baritone from Moscow, 7 Novopromyshlennaya Street. By Company`s administration. Despite to the development of the chemical Vladislav Kosarev, sang especially the decision of housing committee, the tight work schedule, each of the industry and the achievement for them, and his talent and diverse • Future Heroes of TOAZ SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 4 HUMAN CAPITAL ASSETS AND FORMATION OF A PROFESSIONAL TEAM 65

Sails of Hope mound in the Zhigulevsky game has become not only fun, but Medical services Mountains, a tent city of the TOAZ also a great way of team building, and programs to promote In June 2019, Togliatti hosted the employees grew up, and the demonstrating the importance of Sails of Hope regatta, organized by organizers gave all the necessary teamwork. a healthy lifestyle PJSC TOAZ. The company is hosting equipment to the participants. The Promoting a healthy lifestyle and a sailing competition for the first participants also received special Chemistry in paints caring for the health of employees is an time. eco-packages with raincoats, a essential component of the personnel Over 200 sportsmen from corporate bracelet and token-coins The competition for amateur policy of PJSC TOAZ. On the territory Togliatti, Samara, Taganrog, Syzran, for hot meals and bottled water. The artists and professionals, students of the enterprise, there is a polyclinic Novosibirsk and other cities took tour program included not only the of art schools and studios in the city with a team of narrow-profile medical part in the regatta, which lasted for rest on the banks of the Volga, but of Togliatti and Samara region, was specialists. three days. The competition was also the ascent of the Molodetsky organized jointly with the Spiritual The employees` health protection held in six categories: five categories mound under the supervision of Heritage Foundation named after program provides for qualified for adults (on cruisers and yachts) a guide, tourist multidiscipline S.F. Zhilkin. The purpose of the medical care and is aimed at reducing and one for children. The regatta competition among family teams, competition, announced in March morbidity, organizing preventive work ended with a high-profile award a wall newspaper competition, 2019, is to draw attention to the to improve the health and treatment of ceremony. a talent competition, a creative activities of Togliattiazot and its employees, and eliminating occupational workshop, a quest game: no one significance for Togliatti. In the diseases. The polyclinic has procedure, was bored. The guests of the tourist summer, as part of the competition, vaccination, physiotherapeutic rooms, a “Togliatti is a city with a rich rally did not forget about the priority an open air was held on the territory gym, a speleochamber, an aromatherapy sailing history. In the 80s of the of Togliattiazot, i.e. environmental of the factory: teachers and students room. On the basis of the day patient last century, there was already policy, becoming participants in the of the Institute of Fine and Applied facility there is an ozone therapy room. an annual regatta for the prizes campaign to clean up the territory. Arts of TSU and art schools of the General physicians, an ophthalmologist, of Togliattiazot. Our regatta is city worked at the production site an otolaryngologist, a dentist receive a wonderful revival of those Autoquest for a week. patients daily. Consultations with a good old traditions. And it Based on the results of the surgeon, an ophthalmologist, a urologist, As part of the series of was important for us to do this competition, a collection of works an endocrinologist, a neurologist, a corporate events dedicated to the exactly in the anniversary year, of art dedicated to the celebration pulmonologist, a gynecologist are 40th anniversary of Togliattiazot, the year of the 40th anniversary of the anniversary of PJSC TOAZ carried out twice a week. Women in October, for the first time, a • Nadezhda health resort of the factory”. was formed. The best works of the undergo a mandatory mammographic corporate autoquest was held for the participants were presented at the examination at Nadezhda health resort. underwent a course of treatment on of the Trade Union Committee, in Tatiana Efremova Company`s employees. exhibition, which opened at the end For the early detection of cancer in men, preferential vouchers at Nadezhda the sports day of labor collectives, Deputy General Director – 17 teams of three to four people HR Director of CJSC Corporation of November at the Togliattiazot an examination is carried out for the health resort. in mini-football tournaments and in in each attended the competition. Togliattiazot Community Center. presence of a cancer-specific marker. In the formation of a healthy darts competitions. The autoquest of Togliattiazot had The enterprise has a free voluntary lifestyle, the basic direction is the Separately, it is worth noting six tasks that required participants Day in museum with TOAZ health insurance program. In 2019, 4 stimulation to engage in physical the victory of the joint team of to show not only speed, but also Togliattiazot employees at the Himfest Family tourist rally In December, the Togliatti Museum 195 employees were provided with VHI, culture and sports. For employees creativity and observation. Each team sports festival in Moscow, confined It has already become a good of Local Lore hosted the quest “A Big 80% of which (3 361 people) used the of PJSC TOAZ and their children, was given tasks in a different order, to the Chemist Day, in which more tradition for Togliattiazot employees Journey with TOAZ”, which brought services under the program. As part of there is a 30% discount on visits to solving which the participants moved than 300 chemical workers from all to get together on vacation with together almost 400 employees with the 40th anniversary of Togliattiazot, 400 the gym and swimming pool in the along the route. Car enthusiasts- over the country took part. Also, the whole family, and the family their families. Everyone plunged into VHI policies were also awarded to family sports complex of the Togliattiazot chemists solved the ciphered places of the factory teams and individual tourist rally has become part of the history of their native land with members. In 2019, 140 million rubles Community Center. In 2019, 715 the city, solved logical tasks and were sportsmen took part in the industrial the anniversary events, bringing pleasure. The family quest in the were allocated for medical support and people used this service. Twice a acquainted with the Komsomolsky sports contest of chemists of Samara together more than 250 TOAZ museum became the final point in a rehabilitation of employees. day, the factory radio broadcasts and Central districts of the city. region, in the big sports festival employees with their families. series of festive events dedicated to the an industrial gymnastics complex The winning teams were awarded “Race of Heroes - Future Heroes of At the foot of the Molodetsky 40th anniversary of Togliattiazot. developed by the specialists of cups and automobilist kits. The In 2019, Nadezhda health Nadezhda health resort. TOAZ”, in the Togliattiazot regatta, resort celebrated the 20th Sports events such as paintball, in the carp fishing tournament, in the “The Museum of Local Lore anniversary of its work basketball, volleyball, multidiscipline Samarskaya Luka marathon, set new is a long-standing partner of the competition, carp fishing, bike ride, records for the number of participants enterprise which we cooperate Today Nadezhda health resort competitions “Mom, Dad and I is a at the volleyball tournament. with. This year Togliattiazot consists of two nine-storey buildings, sports family!” are held annually for For the fifth year in a row, the helped the museum to open the a cinema hall, a dining room and employees. For sports activities, the Company has been organizing a “Operator Room” exposition, a restaurant. The institution can enterprise has organized hockey, corporate “military tactical games” which presented equipment, simultaneously accept up to 250 football (which celebrated its 40th tournament for its employees. This samples of the Company`s guests. Every year 500-600 employees anniversary in 2019), volleyball and year, a lasertag competition was held, products, and a model of a urea of Togliattiazot together with their basketball teams. 4 769 tickets were in which almost 100 people, divided plant. Therefore, today at one families improve their health here. purchased for cultural and sports into 12 teams, took part. of the stations “Big Chemistry” Nadezhda health resort is the events in 2019. The Togliattiazot team, with the children of chemists will see in winner of many prestigious awards, The reporting period was the support of the Trade Union committee miniature how urea is produced. including gold and silver medals of year of TOAZ sports achievements of the enterprise, became a participant This year TOAZ has organized the Russian forum Zdravnitsa, the as an active sports life in 2019 in the Russian multisport project, the many family events, and the Crystal Dolphin and Crystal Drop included 25 internal and external extreme race “Steel Temper”, which quest in the museum is no festivals. The departmental health events, in which 1 379 people took was held in Togliatti for the third exception. A day off with family resort Nadezhda has a rate of “3 part. For the first time TOAZ held a time. It is aimed at popularizing and colleagues reflects our stars” according to the international corporate basketball championship, physical culture and sports; also this corporate culture and traditions”. classification. an autoquest and backgammon is a new form of exciting and active In 2019, 556 employees, members competitions. In addition, the factory recreation, bordering on extreme Natalia Denisova of their families, members of the employees played billiards, took part sports. Our sportsmen were among Deputy HR Director council of veterans of TOAZ (533 in the Russian Ski Track of Russia the first to overcome five kilometers PJSC TOAZ • Sails of Hope regatta employees in 2018) rested and and sports festival, in the chess tournament and 15 difficult obstacles. SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 4 HUMAN CAPITAL ASSETS AND FORMATION OF A PROFESSIONAL TEAM 67

Program for social support the market average, came into force. receive preferential tickets to the participants. of the retired In addition, the fund operates a system health resort for only 10% of the total The active work of the youth of internal control, risk management, cost; health groups are organized. In council in 2019 was also reflected One of the important areas of social and each action of a non-state pension 2019, financial assistance was provided in the results of participation of policy of PJSC TOAZ is the provision fund is accompanied by strict multi- to pensioners in the amount of 6 011 representatives of the enterprise in of support to employees of retirement level control. 000 rubles. various kinds of competitions: PJSC age. According to the Regulations on Since 1993, employees of the The quarterly celebration of TOAZ team took first place in the non-state pension provision, which is Company have had the opportunity anniversary heroes has become Russian competition Himfest, first in force in Togliattiazot, an employee to receive an increase in state pension tradition of PJSC TOAZ, where 326 place in the city festival Intellect-63”, who has worked at the enterprise for at payments through the non-state people participated. Every year, a second place in the regional the least 10 years and has no violations of pension fund Togliattiazot, then meeting of veterans is held at TOAZ competition Practical School of labor and production discipline, upon is was called Titan. The clients of Community center, which is timed Teamwork in Management, the dismissal due to retirement, has the non-state pension fund Titan were to coincide with the celebration of TOAZ Club for the Lightheaded and right to a monthly non-state pension in employees of not only TOAZ, but the Day of Elderly People, to which Quick-witted team entered the final the amount of at least 10 percent from also other organizations of the city. 300 former TOAZ employees were of the Club for the Lightheaded and earnings prior to dismissal. The non- In September 2018, Togliattiazot invited, and honouring the veterans Quick-witted of Labor League of state pension is paid for five years, its transferred an agreement on non-state and home front workers of the Great Samara Region. amount, taking into account the labor pension provision for its employees Patriotic War in honour of Victory Day. TOAZ in the reporting year contribution of a particular employee, from Titan with all obligations to Veterans of the Great Patriotic War are became a finalist of the Russian HR- can be increased. another non-state pension fund given monthly financial assistance to brand competition, with the Youth Non-state pension is one of the called JSC Vnesheconomfond. This purchase medicines. Council project. most stable options for pension is a large fund, the capital of which • United young team of the enterprise provision, since it is built on a is more than a billion rubles, and contractual basis and has security Vnesheconombank is the main client The youth council guarantees. The pension program of the non-state pension fund. The The Youth Council is involved in of Togliattiazot works as follows: fund has been operating since 1992 engaging of young personnel in the the non-state pension fund forms and is one of the leaders in this active production and social activities pension reserves at the expense of segment of the economy. of the enterprise. Its main task is to the employer`s contributions, keeps In 2019, 69 employees received adapt new employees and participate a personalized record of liabilities for payments upon dismissal (more than 8 in activities to attract new personnel. each of the pension accounts. In this million rubles), 24 870 thousand rubles As of December 2019, the youth case, the fund cannot dispose of clients` was sent to non-state pension fund. council consisted of 209 TOAZ funds at its own discretion. By law, it The interests of former employees employees (52 people joined the is obliged to place pension reserves are represented by the Veteran Council. youth council in the reporting year). on the market on the principles of As of 2019, 1400 people are members In 2018, 190 employees joined the repayment, liquidity, diversification of the Veteran Council. Preferential association. and reliability, in accordance with the payments such as quarterly financial A youth policy development placement rules established by law. assistance (in the reporting period, it program of PJSC TOAZ for 2020- In 2018, a rule that allows the Central increased by 15% and amounted to 2022 and performance targets of Bank to force non-state pension funds 1150 rubles), and New Year’s gifts the youth council for 2020 were to accrue additional income to clients if are provided for them, as well as developed. The youth council it is established that the fund, as a result participation in various holiday events. organized and participated in of its actions, receives a yield below Members of the Veteran Council 35 events with a total of 10 335

• Youth Council visiting the departmental kindergarten Tulip The Trade Union has been organizing weekend travel employees. It is worth noting that trips. Workers of the enterprise visit TOAZ is the only company in the city 93% of the Company`s employees tourist places of Samara region and that organizes such a sporting event are members of the Trade Union. neighbouring regions. In total, 14 for employees. One of the main tasks of the Trade such trips were organized in 2019, The own library is the pride of the Union committee is the preparation, 419 people participated. For the period Trade Union. It is considered to be conclusion and monitoring of from 2017 to 2019, 1395 people took part one of the best in Togliatti in terms implementation of the Collective in excursion trips: of collection of books. In 2019, 7119 Bargaining Agreement. In addition, one people visited it, 13197 books were of the most important task of the Trade • PJSC TOAZ employees - 879 borrowed. 314 new editions were Union is to monitor the conformity people; purchased for the library. with labour protection requirements, • Family members - 268 people; In the framework of the traditional safety rules and standards, industrial • Council of Veterans - 240 people; holiday organized by the Trade Union, health. There are 43 public health and • CJSC Corporation Togliattiazot a First-Grader Day, 215 children of safety inspectors at TOAZ. The health employees - 8 people. the Company’s employees were and safety inspectors of Togliattiazot congratulated and given memorable multiple times received winner’s The sporting life was intense: gifts in 2019. certificates and awards in competitions 492 employees took part in 14 In the reporting year, 2019 factory for the title of the best health and safety events. The Trade Union сommittee employees received financial assistance inspector of Samara Region. traditionally arranged for corporate in the amount of 8 016 000 rubles. Since 2016, the Trade Union, delivery of “Fit for labour and defence” Moreover, the Trade Union allocated 31 • Veteran of the factory on excursion at his native enterprise together with the administration, physical training standards for TOAZ interest-free loans to the people in need. ECOLOGY, ENVIRONMENTAL PROTECTION AND PERSONNEL SAFETY ECOLOGY, 69 5.1 ENVIRONMENTAL POLICY ENVIRONMENTAL PROTECTION OF THE COMPANY AND PERSONNEL SAFETY

PJSC TOAZ pays great attention risks in the field of industrial safety 5.1 to issues of environmental protection and labour protection. ENVIRONMENTAL POLICY in the region. One of the main OF THE COMPANY conditions for this activity is strict Organizational structure of observance and implementation of environmental requirements of the HSE management Russian legislation. The management Management of Health, Safety and of the enterprise considers it its Environment (HSE) is implemented 5.2 duty to maintain a favourable at all organizational levels of the ENVIRONMENTAL environmental situation and safe enterprise. In the managing company, IMPACT living conditions in the region of responsibility for strategic decisions 5 presence. in this area is assigned to the Deputy The Company implements General Director - Production • Carrying out research on the territory of the environmental programs in three Director and his deputy in the field of enterprise main areas: environmental protection and labour 5.3 protection. responsible and sensitive attitude of ENERGY • Air basin protection; In addition, in 2019, the enterprise the team towards the preservation of the region`s natural resources allows EFFICIENCY • Water basin protection; had departments of labor protection, • Reduction of the negative impact environmental protection under the us to proceed towards improving of production waste. control of the HSE Chief Specialist, the quality of life of employees, their which carried out internal inspections families and the city as a whole. Effective environmental policy is of the Company for compliance with 5.4 the key to sustainable development the requirements of the legislation of Key achievements ECOLOGICAL of the Company and successful the Russian Federation in the field of for 2019 reflect consecutive engagement with stakeholders as labor and environmental protection. ACTIVITIES advancement in the part of their commitments. The production control department implemetation The environmental principles monitors compliance with industrial of PJSC TOAZ are based on the safety requirements. of the tasks assigned: following principles of the Company: Goals and tasks in the field More than 5.5 • Sustainable development; of environmental protection INDUSTRIAL SAFETY, • Rational nature management; 254 MILLION RUBLES HEALTH AND LABOUR • Integrated environmental The strategic goal of PJSC is allocated PROTECTION management. TOAZ is a constant reduction of the for implementation negative impact on the environment of environmental protection Togliattiazot strictly complies with at all stages of the production cycle. actions and projects the requirements of the legislation of For each essential aspect, the most the Russian Federation in the field of important tasks are the following: 10 HECTARES environmental protection, industrial of seedlings planted for reforestation safety and labour protection, also • Reduction of harmful emissions into of the woods burned down in 2020 taking into account the requirements the atmosphere; of international standards. • Reduction of wastewater discharges To ensure the most efficient use into water bodies and improving the More than of natural resources, TOAZ invests quality of wastewater discharged; 6 000 in the introduction of innovative • Reduction in the volume of fry is released technologies and methods for production waste and an increase into the Volga ensuring environmental and in the percent of recovered waste; industrial safety. • Compensation of environmental More than The Company widely practices the impact due to implementation of use of internal regulatory documents environmental initiatives to restore 200 MILLION RUBLES and procedures governing activities natural resources and improve the is allocated in the field of ecology and ensuring quality of the environment. for labour safety the health of employees. The fundamental principles are reflected Implementation of PJSC TOAZ Injury index LTIFR was in PJSC TOAZ policy in the field of development strategy until 2025 industrial and environmental safety, and the modernization programs are 0.58 health and labour protection. aimed at creating a modern enterprise Every year, the Company where the work of the Company`s implements a number of measures employees is aimed at the careful 0 aimed at reducing the negative impact use of natural resources and solving professional diseases on the environment and at preventing urgent environmental problems. The were identified SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 5 ECOLOGY, ENVIRONMENTAL PROTECTION AND PERSONNEL SAFETY 71

5.2 ENVIRONMENTAL IMPACT 5.3 ENERGY EFFICIENCY

The enterprise takes measures the improvement of the biological services, is used as fertilizer when In the course of its work, PJSC over energy consumption. In the environment due to energy saving. to reduce the total amount of air wastewater treatment process; restoring the fertile soil layer on the TOAZ focuses on indicators of context of rapid growth of resources The Company implements emissions, wastewater discharges • Water sumps and underground burned out forest lands of the region. efficient energy consumption. The cost, this objective is of particular programs for replacement and and solid waste disposal. water supply and sewerage All events held in 2019 are Company uses the following types of importance. modernization of equipment, In 2019, the emission of networks were repaired, which is aimed at reduction of discharges, energy resources in its activity: natural The starting point for energy increasing the efficiency of its use, pollutants into the atmospheric air aimed at excluding contamination pollutant emissions, decrease of gas, as the raw material and energy efficiency projects at TOAZ was entry reducing indirect losses, as well at the enterprise, taking into account of groundwater and soil, including waste generation, its ecologically safe source for production of ammonia into force of the Federal law dd. as organizational activities aimed all structural divisions, amounted to excluding the infiltration of storm storage and use. and urea, electric and thermal energy. 23.11.2009, no. 261-FZ “On energy at involving personnel in resource about 11 thousand tons. water into the soil. Togliattiazot in its activities Production facilities consume saving and improvement of energy saving. To monitor the quality of depends on the availability of water significant resources, which affect efficiency”. In 2012, an energy Audit atmospheric air at the factory`s In addition, the following resources. That is why improving the the prime cost of production. was conducted at the enterprise. production site and in the sanitary activities for control over the state of ecological state of the Volga river is Therefore, one of the strategic Implementing the proposals of SHARE OF ENERGY INTENSITY protection zone, the enterprise uses water bodies are implemented at the one of the most important aspects goals of the Company is to increase specialized organizations, the OF PRODUCTS, 2019 its own unique accredited sanitary- enterprise: of the enterprise`s environmental competitiveness through more company resumed the technical re- industrial laboratory, which, in activities. The key role in ensuring efficient operational activities, also by equipping of the plants in order to 2019 accordance with approved schedule, • Monitoring of wastewater at the this task is assigned to the wastewater reduction of production costs. increase efficiency and reduce energy conducts daily air sampling at sources discharge to the Saratov water treatment facilities of PJSC TOAZ, Every year, PJSC TOAZ costs. Ensuring energy supply control of polluting emissions, as well as reservoir; which not only treat the company`s implements a number of activities allows the Company to guarantee third-party accredited laboratory FSBI • Mixed flow biotesting; own wastewaters, but also serve the aimed at reduction of energy uninterrupted operation, improve “CLATM VFD”. During 2019, more • Virological analyses; facilities of the Northern industrial consumed, increase of energy energy efficiency indicators, and than 1800 air samples were taken. • Microbiological research at hub and household customers of the efficiency and strengthening control reduce the negative impact on the To reduce emissions of pollutants dissipating discharge with a Komsomolsky district of Togliatti. into the atmosphere, dust and gas hygienic assessment of the results Due to the ongoing modernization recovery units are used. with involvement of specialized of treatment facilities, TOAZ has managed to reduce wastewater IN 2019 THE ENTERPRISE’S CONSUMPTION discharge by 1.2% over the past five OF ENERGY RESOURCES WAS AS FOLLOWS: years - from 20 753 thousand m3 in 2015 to 20 502 thousand m3 in 2019. To reduce water consumption, Resources UOM Quantity Togliattiazot uses circulation water Energy consumption supply system for ammonia plants, in which water undergoes special Natural gas `000 m3 3 789 147, 94 for ammonia prouction treatment with reagents that restore its characteristics for further use. In Energy consumption addition, the factory provides water Electrical power `000 kWh 533 437, 531 recycling systems, in which water for urea prouction is used repeatedly without special Heat power Gcal 162 099,52 preparation. The functioning of these Energy consumption technological systems can significantly Diesel fuel t. 1 676 reduce the consumption of water for UFC prouction resources from natural sources. In addition to caring about water Motor petrol t. 207 quality, the enterprise is actively implementing a program for the reproduction of the Volga`s biological • Wastewater treatment facilities resources. In total, since 2008, within the framework of systematic work, ENERGY RESOURCES Extensive revamping work is organizations. the enterprise has released almost 273 In 2019, a number of measures • Work continues on the CONSUMPTION carried out at the existing wastewater The whole range of activities thousand carp and sterlet fry. aimed at reducing of energy implementation of a variable treatment facilities. carried out in 2019 at the wastewater The environmental activities of consumption and increasing of frequency drive (VFD) for energy- In 2019, in order to improve treatment facilities of PJSC TOAZ is PJSC TOAZ are aimed at improving energy efficiency of production intensive electric motors. the quality of wastewater, the aimed at reducing the negative impact the reliability of equipment operation processes were performed, including: 4000 following activities were taken at the on the water bodies of the region. through a modernization program, The plans for energy saving for wastewater treatment facilities, which At the site of the enterprise, there improving the system of environmental • Replacement of 6 kV air circuit 2020 include the following actions: allowed reducing the negative impact is a landfill for waste disposal and monitoring and control over the state breakers with vacuum ones at 3000 on the environment: sludge lagoons for temporary storage of atmospheric air, water and soil, and substations of ammonia and urea • Implementation of frequency of sludge. Hydraulic structures comply reducing the technogenic impact on plants; regulation of electric drives; 2000 • The replacement of germicidal with all regulatory requirements the environment. • Replacement of power transformer • Replacement of oil high-voltage lights for ultraviolet disinfection of the legislation of the Russian Thus, last year TOAZ has significantly at MSDS-2, 2Т, TRDN-80 MVA; bushing at SS-110 kV; was carried out at the installations Federation. Monitoring of hydraulic increased the share of waste recycling. • Replacement of 0.4 kV automatic • Inspection of oil facilities of 110 1000 of the UDV‑1000/360‑D23 structures is carried out annually At the end of 2019, it reached a level of circuit breakers at substations of kV cable lines; type, which made it possible to with the involvement of specialized 75%, having increased by almost 4 times ammonia plants; • Replacement of gravel coating of 0 efficiently perform the disinfection organizations. compared to 2015 (19.2% of waste was • Replacement of street mercury arc oil receivers of power transformers 2016 2017 2018 2019 of waste water; The activated sludge formed at the recycled). lamps with LED ones for lighting at substations and main step-down • Aeration systems in aerobic wastewater treatment facilities, after Moreover, PJSC TOAZ initiates process units of ammonia and urea substations; Natural gas, million m3 stabilizers (items 5, 8) were passing through analytical control and supports numerous environmental plants. 860 lamps were replaced at • Putting into operation of the Electric power, million kWh replaced, which contributed to carried out by the federal supervision actions. urea production plants; “Telemechanics” system. Heat power, `000 Gcal SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 5 ECOLOGY, ENVIRONMENTAL PROTECTION AND PERSONNEL SAFETY 73

ENVIRONMENT ACTIVITIES actively supports the program of the All activities performed in 5.4 Administration of the city of Togliatti 2019 are aimed at reduction of on liquidation of unauthorized disposal discharges, emissions of pollutants, ЗАТРАТЫ НА ОХРАНУ areas. In 2019 due to the enterprise environmentally safe storage and use PJSC TOAZ strategy is to minimize Total expenditure and in- EXPENDITURES FOR ENVIRONMENT 116.6 tons of garbage were collected of wastes, as well as increase of the ОКРУЖАЮЩЕЙ СРЕДЫ, from the city territory. For the period level of environmental responsibility of the negative impact on environment. vestments in health, safety МЛНPROTECTION, РУБЛЕЙ MILLION RUBLES Therefore, at the initiative and support from 2016 to 2019 – about 600 tons. employees. of the enterprise, a large number of & environmental protection 260 PJSC TOAZ took part in In 2020, the work in this direction various environmental activities are PJSC TOAZ annually invests environmental actions for rehabilitation is planned to be continued. carried out annually in the region in development of the HSE of urban forest park area affected in 195 including the ones organized by system in order to maintain the large-scale fires of 2010. Together with volunteers, TOAZ employees planted the public organization “Social & necessary level of industrial and • Release of fry into the water area of the​​ Ecological Union”, which the Company environmental safety. Saratov reservoir seedlings on 10 hectares of forest 130 land using the funds allocated by has close cooperation with. PJSC In 2019, more than 254 Landscaping, cleaning, TOAZ takes part in solving issues of million rubles was allocated to the the enterprise. Since 2014, TOAZ has preservation of environment together implementation of the environmental 65 electronic document flow restored 40 hectares of forest. with public organizations, residents and protection activities and projects to PJSC TOAZ annually conducts PJSC TOAZ annually carries out collection of waste paper and batteries. administration of the city and the region. protect the environment. 0 landscaping: planting of trees, shrubs 2017 2018 2019 and flowers. This helps to filter and In 2019, 10.7 tons of waste paper were collected. reduce concentration of dust in the air. “PJSC TOAZ takes care of In summer, grass is mowed on Besides the care about the water quality, the enterprise actively the ecology of Togliatti. We are DYNAMICS OF COSTS FOR ENVIRONMENTAL PROTECTION MEASURES: a regular basis in order to comply renewing production facilities with fire safety. Grass after mowing performs the program on reproduction of the biological resources of the and treatment facilities, thereby is ground into mulch and used as providing leadership not only Expenditures for environment protection, Dynamics, a fertilizer. In winter, the snow is Volga. In the water area of the Saratov 2017 2018 2019 Reservoir, more than 6 thousand of fry in production, but also in `000 RUB. 2018-2019 removed with the help of special reducing environmental impact. equipment. of valuable fish species were released in 2019. Totally, for the period since We actively participate in In 2016 the enterprise introduced campaigns aimed at preserving Air protection and climate change 55 386 56 202 53 392 -5% an electronic document management 2008 within the framework of the system work, the enterprise released nature – we plant a forest, mitigation system: electronic signatures and eliminate landfills. Togliattiazot electronic keys. This has significantly almost 273 thousand of carp and sterlet fry. treats in a responsible way 152 600 157 918 170 473 7,95% reduced the amount of paper used, the environment, because the Waste water collection and treatment which, accordingly, contributes to The implementation of all these environmental measures allows to future of us and our children resource saving. directly depends on the state of 16 884 9 555 10 994 15,06% reduce the negative impact of PJSC Production and consumption TOAZ on the environment, as well the environment.” waste management Environmental projects as contributes to the sustainable Dmitry Mezheedov Togliattiazot annually participates development of the Company, General Director Other directions of activities in the 21 880 18 315 19 230 5% in city community work days increases credibility of the Company in of CJSC Corporation Togliattiazot sphere of environment protection* on cleaning up the territory and the region.

Total 246 732 241 990 254 089 5%

INDUSTRIAL SAFETY, HEALTH More than 742 million rubles was the amount of investments allocat- *The costs for other activities in 5.5 ed for environmental protection over the past three years; the field of environmental protection AND LABOUR PROTECTION Expenditures for wastewater collection and treatment increased by include: 7.95%; The most important condition liquidation of accidents; the enterprise in order to prevent • comprehensive surveys, including for sustainable development of the • Control over compliance of the emergencies and incidents at Production and consumption waste management expenditures in- Company is to ensure a high level of employees working conditions hazardous production facilities, as creased by 15.06%. engineering and ecological, engineering and geological, safety culture and production culture. with the standards established by well as localization and elimination engineering and geodetic, In a chemical enterprise, there are the legislation and the Collective of consequences of such accidents. as well as engineering and always increased production risks. Bargaining Agreement. More than 200 million rubles was hydrometeorological as part of The system of their reduction is one allocated for occupational safety in the Utilization of Sludge from the of the most important elements of 2019. Sludge Collector project; successful and safe activity of the In accordance with the Federal The Company has all the • artificial reproduction of biological Company. law “On industrial safety of hazardous necessary licenses for all activities resources in order to compensate for The work in this area includes as production facilities”, Rules of performed. Relevant documentation damage: release to the Volga river of follows: organization and implementation of has been developed for hazardous carp fry (6 586 fishes). production control over compliance production facilities, they are insured • Ensuring through the use of with industrial safety requirements and operated in accordance with advanced technologies of such at a hazardous production facility, the requirements of industrial safety a level of safety of production the Company has developed the legislation. facilities at which the risk of Industrial Safety Management Production control is an accidents is minimal; System. integral part of the industrial safety • Reduction of the likelihood of The System is a complex of management system which carried errors leading to accidents by interrelated organizational and out through a set of measures aimed • Enterprise employees participate in action of forest rehabilitation improving the personnel skills; technical measures, guidelines at ensuring the safe operation of in Togliatti • Trainings on localization and and instructions for employees of hazardous production facilities, as SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 5 ECOLOGY, ENVIRONMENTAL PROTECTION AND PERSONNEL SAFETY 75

well as prevention of accidents at operation, by means of controlling of the production safety system. and had been provided with sent for re-certification. For employees whose work these facilities and preparedness the risks of thermal, baric and toxic Ensuring compliance with the all necessary documentation. For two years, the factory is associated with harmful and for localization of emergencies and damaging factors. HSE requirements is within the In total, in 2019, 32 people certification Commission for dangerous working conditions, the incidents, as well as elimination Activities of PJSC TOAZ in the framework of complex and thematic were trained and received the industrial safety has been working periodic medical examinations are of their consequences. Data on field of occupational health and inspections, as well as within the appropriate certificates. In 2019, at the enterprise on a permanent conducted, and based on the results, organization of the production industrial safety are regulated by the control of hazardous production the commissioners conducted basis. The Commission consists of if necessary, treatment in Nadezhda control in terms of observance of following basic documents: facilities. Control measures are 1527 inspections on occupational about 20 specialists and managers Health Resort is prescribed. industrial safety requirements are performed by specialists of the health in the company’s divisions. in relevant areas. In 2019, 3024 employees of presented in the form of electronic • PJSC TOAZ Policy in the field occupational health, production The Commission ceased its the factory underwent preventive document to the Federal executive of industrial and environmental control departments, by senior line Special assessment of working activities in November 1, 2019 in examination. In addition, each authorities in the field of industrial safety, occupational health and managers. accordance with the decree of employee of the Company on safety annually before the 1st of safety; A separate role in this area is conditions the Government of the Russian favorable terms has an opportunity April of a corresponding calendar • Fundamental safety rules; assumed by the activities of the Monitoring and detection of Federation dated 25.10.2019 to recreate and undergo preventive year. • Behavioral Safety Audits standard; Trade Union Committee on HSE, violations of occupational health No. 1365 “On preparation and treatment in the health resort. The The necessary and sufficient • Regulation on industrial control participating both in joint inspections requirements and elimination of certification in the field of industrial enterprise strongly recommends level of professional training of over compliance with the industrial of compliance with the rules of HSE their causes are important activities safety, according to issues of safety undergoing annual preventive the personnel is provided by safety requirements at hazardous and in protecting of the interests of of PJSC TOAZ. of hydraulic structures, safety in the treatment (including with the professional selection and timely production facilities of PJSC TOAZ; employees on various issues in this According to Federal law of electric power industry” (together possibility of a partial separation maintenance of personnel, as well • Instructions and rules of area. The rights of employees in 28.12.2013 No. 426-FZ “On special with “Regulation on certification in from the work) to the heads of as professional development of occupational health and industrial the field of ensuring safe working assessment of working conditions” the field of industrial safety, safety process and repair workshops employees. Due to release of new safety for specific professions and conditions are provided for in the and Federal law of 28.12.2013 of hydraulic structures, safety in the whose work is connected Federal rules and regulations in the types of work. Collective Bargaining Agreement No. 421-FZ “On amendments electric power industry”). with considerable tension and field of industrial safety, managers containing the relevant section. to certain legislative acts of the psychological and emotional stress. and specialists of PJSC TOAZ receive The recommendations for The Trade Union Committee Russian Federation in connection PJSC TOAZ in 2019 continued training and are certified on safety workplace safety are set out in the holds regular meetings to settle with adoption of the Federal law Personnel health implementation of the voluntary to the extent corresponding to their Collective Bargaining Agreement (see issues in the field of occupational “On special assessment of working and occupational health insurance program, and for official duties. Operational personnel Chapter 4). health. Annual reports on inspections conditions”, the classifier of injury rate the fourth year in a row provided To settle the issues of occupational is trained in accordance with the for compliance with safe working potentially hazardous and harmful The labour team is one of the all personnel with 100% coverage professional training programs for health and industrial safety, a special conditions are sent to the Regional working conditions has appeared of the cost of the voluntary health department has been created, i.e. the main values and one of the most workers of the main professions, Committee of the Trade Union of in the methods of the special important factors in the social policy insurance policy at the Company’s as per qualification requirements Occupational Health Commissioners chemical industry workers. assessment of working conditions. expense. Also, for three years Department. It operates as per the of PJSC TOAZ, therefore the ensuring for each category of a particular Besides that, the occupational In particular, in the new classifier of industrial safety, establishment of already there is a following benefit: profession in compliance with the “Regulation on the occupational health commissioners being the number of factors of harmful 70% of the cost of dental services health commissioners of PJSC a comfortable working environment, established training duration. the permanent members of the working conditions was reduced by protection of health and expanding provided in the medical unit of the Monitoring and detection of TOAZ”, which was developed and Russian Trade Union of Workers a third. enterprise is paid by Togliattiazot. approved in 2008 in accordance of opportunities for recreation of violations of occupational health of Chemical Industries, regularly At Togliattiazot, there is an employees is one of the Company`s The Company is actively requirements and elimination of their with Art. 370 of the Labour Code of control observance by the employer, assessment of working conditions working towards promotion of the Russian Federation, Art. 20 of top priorities. causes are important activities. At the officials and employees of HSE rules. as per indicators of harmfulness The main activities of the healthy lifestyle programs among enterprise, the work is conducted on the Federal law of 10.01.1996 No. Occupational health commissioners and danger of the production employees. On a regular basis there 10-FZ “On Trade Unions, their rights enterprise in the field of preservation assessment of working conditions also represent interests of employees environment, severity and intensity of health of employees are: are sports events: tournaments in as per indicators of harmfulness and guarantees of activity” and the in labour disputes, and advise of the working process. Based on volleyball, paintball, basketball, Charter of the Russian Trade Union and danger of the production employees on occupational health the results of a special assessment • Prevention of occupational diseases; carp fishing, multi-discipline of employees of chemical industries. environment, severity and intensity issues. of working conditions, the measures • Reduction of overall sick rate; competitions, bike rides, etc. Also When choosing contractors, of the working process. Based on Occupational health commission- are developed and implemented • Improving of availability and quality on a regular basis there are sports their readiness to comply with the the results of a special assessment ers perform the following duties: to bring working conditions in of health care. teams in football, basketball, of working conditions, the measures requirements of PJSC TOAZ in the field compliance with the requirements volleyball and hockey. The Youth are developed and implemented of health, safety and environmental • Control over observance by of state regulations, assessment of Council and the Trade Union play to bring working conditions in protection is considered. All the the employer and workshop occupational risks and informing an important role in promoting a compliance with the requirements necessary requirements in terms of employees of occupational health on the working conditions at the 100% of employees are pro- healthy lifestyle. of state regulations, assessment of occupational health and industrial regulations; workplaces of employees in harmful vided with voluntary health Thanks to the effective occupational risks and informing safety are included in the annexes to • Participation in work of working conditions is performed. insurance policies organization of the personnel health employees, working in harmful the contracts for works and services. commissions on occupational management system, no cases of working conditions, on the working The Company’s specialists monitor health under the chairmanship of occupational diseases have been compliance with these requirements. Industrial safety conditions at the workplaces is the workshop manager; The labour team is provided registered in PJSC TOAZ since 2003. For violation of the obligations, commission performed. • Participation in development of with modern types of treatment. In 2019 there were 4 accidents there are penalties or termination Employees of the enterprise are measures to improve the culture PJSC TOAZ certifies the The health of employees is closely with causing of temporary disability of the contract. Application of these fully provided with the certified of production; managers and specialists of the monitored by qualified doctors. On (mild severity). This is not more sanctions leads to an increase of work clothing, special footwear, • Participation in provision of first aid; enterprise in the field of industrial the territory of the enterprise there than in other previous years (except responsibility of contractors in the means of personal protection as • Informing employees of their safety upon appointment to a new is own medical unit No.7 and round- for 2017, in which the risks were field of HSE when performing work well as medical and preventive food. division about the state of position or transfer to another the-clock health post, the material managed most effectively: there on the territory of PJSC TOAZ. Effective methods of industrial safety the working conditions and work in the scope corresponding base of which allows not only to were no cases of disability). The based on the best world practices occupational health; to their official duties. Certification carry out medical examination, accidents in 2019 were related are successfully implemented. Control over compliance • Monitoring of equipment, areas may be primary, periodic or but also conduct prevention and to human factors. In this regard, with the requirements of workshops, fire-fighting extraordinary, and it shall be carried treatment. additional innovative methods Regulation of occupational of occupational health equipment, personal protective out according to the approved have been developed and are equipment. schedule. Responsible persons for being implemented to minimize health and industrial safety and industrial safety the certification to be performed are 25.3 million rubles was allo- the risk of dangerous actions and Production facilities of hazard The control measures to comply In 2019, at the enterprise the heads of divisions, directorates, an “operator error” for personnel class I and II are located at the with the rules and requirements there were 43 occupational health departments and workshops. cated to the voluntary health working in conditions of increased enterprise, that is why it is necessary of occupational health and and safety commissioners, who Factory employees who have not insurance program situational tension. The case- to ensure their safe continuous industrial safety is an integral part were trained, had certificates passed the test of knowledge are study on conscious safety for key SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 5 ECOLOGY, ENVIRONMENTAL PROTECTION AND PERSONNEL SAFETY 77

• Fire brigade on the territory of the enterprise employees of all workshops, and of possible accident conse- authorizing emergency rescue and especially, for repair workshops has quences other urgent work in emergency been strengthened. situations. According to the integrated Industrial safety also includes For more than 15 years now, the indicator of performance in the protection from fires and man- Company has had its own part-time field of occupational health, i.e. made disasters, reduction of risks emergency response unit consisting the international indicator of injury of their occurrence and ability of the Company`s employees and frequency LTIFR, PJSC TOAZ to respond quickly and mitigate engineering and technical workers. demonstrates performance which emergencies, as well as improving It has been established in accordance is better than the average for of response skills of the Company’s with the Federal law No. 116-FZ of petrochemical domestic enterprises employees in emergency situations, 21.07.1997 “On industrial safety of and many foreign ones. since TOAZ operates hazardous hazardous production facilities”. LTIFR [Injuries per million hours production facilities of classes I and The total number is 116 people. worked] is defined as: (number of II. The emergency rescue units are injuries with temporary disability) Primary emergency rescue work equipped with operational vehicles х (1 million of man-hours) / (total at the enterprise is performed by and emergency rescue means to the working time worked by personnel a special professional division, i.e. full extent, in accordance with the for the year) and in 2019 it was 0.58. departmental Gas Rescue Unit. This Regulations, the Charter and the list professional division is certified by of the technical equipping. Twice Fire safety and readiness for the Interdepartmental Commission a year at PJSC TOAZ there are on certification of emergency rescue trainings on evacuation from high localization and elimination formations and has a Certificate occupancy buildings.

INDICATORS OF INDUSTRIAL INJURIES AND OCCUPATIONAL DISEASES

Level of occupational injuries, diseases, 2017 2018 2019 total number of fatal accidents

Number of fatal accidents 0 1 0 among the workforce

0 0 0 Total number of occupational diseases among the workforce during the reporting period

Total number of injuries among employees 0 5 4 of the company

International indicator of lost time injury 0 0,66 0,58 frequency rate LTIFR • Tactical exercises of Togliattiazot fire department DEVELOPMENT OF THE REGION OF PRESENCE.CHARITY DEVELOPMENT OF THE REGION 79 OF PRESENCE. CHARITY

6.1 COMPANY POLICY ON DEVELOPMENT OF THE REGION 6.1 COMPANY POLICY ON DEVELOPMENT OF THE REGION heavily in the social infrastructure of ernment authorities and the public. the region, providing a favorable en- The main directions of social invest- More than 15.5 million vironment for the implementation of ments of the enterprise are deter- rubles was allocated in 2019 its long-term development strategy. mined taking into account the needs to charity and sponsorship PJSC TOAZ pays special atten- and expectations of stakeholders 6.2 tion to programs that contribute to and, first of all, the state and society. ENVIRONMENTAL programs. development of the urban environ- Togliattiazot is a city-forming en- INITIATIVES ment, the realization of potential of terprise and a major taxpayer. The 6 local communities, solving of acute Company promotes employment in social problems, support of socially the city. For TOAZ, Togliatti is a native unprotected segments of the popu- city where employees of the enter- lation, preservation of historical her- 6.3 prise and members of their families itage, development of culture and SOCIAL PROJECTS, live. Social programs of Togliattiazot education, support of sports and CHARITY are aimed at promoting sustainable promotion of a healthy lifestyle and, development of the region of pres- of course, taking care of the ecology The Company transferred ence, improving the quality of life of of the native land. the Company`s employees and local The Company develops mech- over 3.8 billion rubles communities, and preserving the anisms for multilateral cooperation, to the budget of Samara environment. The enterprise invests strengthening partnerships with gov- region in 2019.

COMPANY CONTRIBUTION TO SUSTAINABLE DEVELOPMENT OF THE REGION OF PRESENCE

Economic aspect Fulfillment of tax obligations and increasing of the economic potential of the region by providing orders for contractors and suppliers of the Company, maintaining the level of employment among the population.

Environmental aspect Improving of the environmental situation by increasing the environmental efficiency of production and modernization, as well as implementation of environmental programs.

Social aspect Development of sociocultural environment through implementation of cultural and sports programs, promotion of educational activities, and support for vulnerable sections of the population.

The growth of tax payments Industry and Trade of Samara industry, including chemistry. At Region (minprom.samregion.ru) the end of 2019, the growth of over the reporting period and Samarastat (samarastat.gks. the industrial production index in compared to the previous ru/folder/34255), at the end of Togliatti amounted to 99.4%. year amounted to 8.6%. 2019, the industrial production In the production of chemicals and index in Samara Region in chemical products, the production The Samara economy in 2019, the manufacturing industries index in 2019 was 103.3%. The which has reduced the main amounted to 101%, compared to growth in production in the indicators over the past several last year, products were shipped industry is due to an increase years, returned to the growth zone to the amount of 1 trillion 107.9 in the volume of manufactured and has serious potential for its billion rubles, which is 4.7% and sold products at the leading continuation. Regional industry higher than the level of 2018. enterprises of the industry, as also demonstrates good growth The increase in production took well as the implementation of opportunities. place in industries that make up investment projects aimed at According to the Ministry of about 35.5% of the manufacturing ensuring future development, SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 6 DEVELOPMENT OF THE REGION OF PRESENCE.CHARITY 81 reducing the consumption of The growth in living standards has ENVIRONMENTAL INITIATIVES raw materials, heat and energy positively influenced development of 6.2 resources, reducing the impact of the consumer segment of the regional production on the environment, as economy. The levels of employment well as maintaining the company’s and unemployment have developed of the event in 2019 exceeded all students in creative practical activities market position in an increasingly better than the average Russian and expectations. France, Azerbaijan, for the security and protection competitive environment. regional average values. TOAZ allocated more than Austria, Turkmenistan, Kazakhstan of forests, its natural resources, The production of ammonia was The trend of growth of off-budget 250 million rubles to the and South Africa - «Samarskaya Luka» vocational guidance of students, increased in 2019 (106.4% compared investments of large and medium- environment in 2019. has once again confirmed the status fostering love and respect for the to the same period in 2018) and sized enterprises has been preserved. of the international race. Among the forestry profession. Since 2016, mineral fertilizers (108.4%) in general. Among the important growth factors is participants were TOAZ employees. TOAZ has been providing assistance The positive dynamics of real the construction of Urea Plant No.3 by Taking care of the region’s Restoring the biodiversity of the in organizing competitions for young incomes of the population resumed. PJSC TOAZ. • City environmental laboratory ecology is one of the priorities Volga basin, Togliattiazot traditionally foresters of the region. of PJSC TOAZ. Togliattiazot does released a brood of fry into the river One of the largest and most its best to preserve a favorable water area. More than 6 000 fish fry significant events for improving the Togliattiazot is interested in creating a favorable social environment in the region of presence in order environment. Seeking to increase of valuable species have replenished environmental situation in the city to implement its long-term development strategy. The Company not only makes a positive impact on production, the Company works the number of river inhabitants. was participation of TOAZ, together to reduce the negative impact Togliattiazot continued cooperation with other industrial enterprises of the life in the city through the creation of new jobs, tax payments or improving the quality of life of its with the Socio-Ecological Union of region, in financing the acquisition of employees and their families, but also invests heavily in social infrastructure of Togliatti. on the environment, uses natural resources rationally, and takes care the city of Togliatti in 2019, assisting in a mobile environmental laboratory of maintaining biodiversity. the implementation of environmental (MEL). The charity fund for the activities of the organization. This development of the city “Dobry Thanks to Togliattiazot, 116.6 year, the form of TOAZ cooperation Gorod” (“Good City”) became the tons of garbage were re- with this environmental organization operator of the project. The purchase PJSC TOAZ ACTIVELY PARTICIPATES IN LIFE OF THE CITY AND THE REGION IN GENERAL has changed: work on the basis of of a laboratory is just an intermediate moved from the city in 2019. a permanent valid contract. During point in the big work to create a the reporting period, a number of comfortable ecological environment PJSC TOAZ develops a system DEVELOPING THE joint environmental activities were in Togliatti. A high-precision mobile of constructive interaction on CITY AND THE carried out, most of which were complex will allow to quickly collect environmental issues with a wide REGION directly attended by the enterprise’s data on the state of atmospheric range of stakeholders, cooperates employees: air. There are no analogues of such with government authorities and equipment in the Volga region today. • Togliattiazot is the local communities, and actively • The first ecological urban Forum; The high degree of automation of organizer of a professional participates in the city initiatives. • Eco-festival “Klumba TLT” the MEL and the system for checking development program for TOAZ annually provides support (“Flowerbed TLT”); the reliability of the readings of the people of pre-retirement in the implementation of various • Eco-campaigns to clean up the control and measuring instruments age “Chemistry of environmental programs. The territories “Musora NET” (“Garbage will speed up the data collection Experience” Company engages its employees in NO”), “Ecodvor” (“Eco-yard”), process and exclude subjective environmental activities, including • Togliattiazot is a partner “Chistye berega” (“Clean riverbanks”), factors for assessing the state of on a volunteer basis. Togliattiazot of Togliatti Philharmonia “Sdelaem 2019” (“Let`s do it 2019”); atmospheric air. In general, using the organizes community work days and Togliatti Local History • Family holidays “Izbushka TLT” equipment of the mobile complex, it to clean up the territory of the Museum (“TLT Hut”), “Prazdnik po-sosedski will be possible to identify more than enterprise, to clean up the banks of Ecologiya dvora” (“Neighborly Party: 50 substances. An important factor is • Togliattiazot is the the Volga, to eliminate unauthorized Yard Ecology”); the fact that later the city ecological organizer of the lecture landfills, participates in landscaping • Patrolling urban forests during the laboratory can be equipped with the educational project and improvement of the city areas, in fire-hazardous period of the year, etc. latest equipment for more accurate “Intellectual Club sports activities of an ecological focus. diagnostics. The cost of the MEL was “Chemistry of the Word” As part of its environmental Togliattiazot supported the XXIII 21.780 million rubles. The complex activities, the Company took part • Togliattiazot is the regional meeting of school forestries will be serviced by specialists from in an environmental campaign to organizer of “Impulse” “Druziya Lesa” (“Friends of the Togliatti State University who have • Togliattiazot employees take part in an environmental campaign restore urban forests damaged by scholarship for talented forest”), which was organized by undergone specialized training. The large-scale fires in 2010. Forest young musicians, actors, GKU SO “The Samara forestry”. The laboratory presentation took place planting has already become a good artists SUPPORTING SPORTS: HELPING SOCIALLY SAVING NATURE OF purpose of the event is to involve on February 14, 2020. tradition for the employees of PJSC • Togliattiazot is the VULNERABLE GROUPS: THE NATIVE AREA: TOAZ. 2019 was no exception: a organizer of a grant • Togliattiazot is the official total of 10 hectares of seedlings were program for social sponsor of Samara Region • Togliattiazot is the • Togliattiazot is a partner planted. initiatives “Chemistry of Basketball Federation organizer of a grant of “Our Forest” program For the fourth year in a row, the Good” • Togliattiazot is a sponsor of program for persons • Togliattiazot is a partner “Zhemchuzhina” (“Pearl”) who have adopted of the city program Togliattiazot has sponsored the • Togliattiazot is an active Synchronized Figure Skating children left without for the elimination ecological marathon “Samarskaya supporter of event tourism Team parental care of unauthorized Luka”. The main goal of the race (sponsorship of the • Togliattiazot is an official • Togliattiazot provides landfills is to attract public attention to the festival of classical music sponsor of the home games support for • Togliattiazot is problems of preserving the natural “Classics Open Fest” and of the “Lada” hockey team orphanages implementing complex Samarskaya Luka and the summer session of the in the 2019/2020 season in the city of Togliatti a program for the to promote a healthy lifestyle. A Volga Youth Symphony • Togliattiazot is a sponsor • Togliattiazot is the reproduction of the Volga special feature of the marathon is Orchestra, etc.) of the Volga Martial Arts organizer of charity bioresources its track, running through the most • Togliattiazot provides Academy performances to help • Togliattiazot is an organizer picturesque places of the Samarskaya support of shelters for • Togliattiazot is a sponsor of children’s social and a participant of Luka National Park with a view to the homeless animals in the Invincible Power Martial institutions environmental volunteer Great Volga River. 1000 participants Togliatti Arts Games in Togliatti events from 7 countries, 22 regions of Russia and 76 cities - the geography • Restoration of forests damaged by fires of 2010 SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 6 DEVELOPMENT OF THE REGION OF PRESENCE.CHARITY 83 6.3 SOCIAL PROJECTS, CHARITY 6.3.2 EXTERNAL PROJECTS

PJSC TOAZ provides gratuitous approved by the decision of the charitable foundations, state, municipal Volga Martial Arts Academy, project financial assistance to state Board of Directors. budgetary organizations, local self- “For Children of Togliatti - Decent PJSC TOAZ finances not only educational institutions of Togliatti The bulk of the Company`s its own social assets, but also government bodies can take part in Conditions for Sports and Recreation” and socially vulnerable groups, cooperation in the social sphere falls the competition. • Autonomous Non-Profit Organization organizes human health care events, on non-profit organizations (NPO) allocates significant funds During the first stage of the “Hippotherapy Center “Zhivoy Mir” and supports cultural and sport of various types. Social NPO partners and efforts into implemen- competition, the organizers received (Living World)”, the project “Towards events. are selected, first of all, according to tation of programs aimed at 54 applications. Only 23 of them a sports dream under the sound of Supporting socially vulnerable the importance and value of their improving the standard of were allowed for defense the council hooves” categories of citizens is an important activities for society. living in the region of pres- of experts. During face-to-face • Municipal Children and Youth Public task for the Company, which 6 presentations, participants were able Non-Profit Organization of the city of observes the principles of sustainable ence. to describe in detail their ideas, present Togliatti “Ecological Commonwealth” development. Togliattiazot implementation details and answer (Municipal Children and Youth systematically provides charitable questions from the jury. Following the Public Non-Profit Organization assistance to those who especially Over the past three years, City and regional results of the public «defense», it was “Eco-Commonwealth”), the project need it: adults and children with Togliattiazot has allocated decided to support 15 projects. “Traveling Ecological Laboratory disabilities, children from low- development The largest grants in the amount “Ekokeyslab” more than 29 million rubles In 2019, the Company implemented income families, orphans. of 400 thousand rubles were received • Municipal Budgetary Institution for PJSC TOAZ has a Regulation on for charity. 2. 2. 2. a number of projects aimed at the by the projects of Municipal Budget Supplementary Education School development and improvement of sponsorship and charitable activities Institution of Culture of the city of of Art “Lyceum of Arts”, the project urban space: Togliatti “Togliatti Museum of Local “Electronic educational publication Lore” – “Childhood of Stavropol- “Local Lore Leaflet” • At the request of the administration Togliatti”, of Municipal Budget • Municipal Budget Educational of the city of Togliatti, landscaping Institution of Culture City Museum Institution of Supplementary Education of the road ring in the Komsomolsk Complex “Heritage” (ecomuseum) – Humanitarian Center for Intellectual district was carried out; “Local Lore “grafting” or Where the Development “MetaLAB”, the project • The development of a project for Motherland begins” and of Volga “Free Educational Space of Natural improvement of the staircase on the Region Association of Territorial and Science Laboratories” embankment of the Komsomolsky Ecological Development “Master district of the city of Togliatti; Plan” – “Laboratory of Modern • Improvement of the territory of the Technologies”. Komsomolsky district of the city of Other nominees for the “Chemistry Togliatti for the New Year: holiday of the Good” program, which PJSC decorations were made and installed TOAZ supported in the implementation on the road ring; of socially significant initiatives, were: • Provided support for development of a project for improvement of the park named after S.F. Zhilkin in the • Municipal Budget Institution of Culture Avtozavodsky district of the city of of the city of Togliatti “Togliatti Art Togliatti; Museum”, project of the exhibition • Provided support for development “Formula of Water” of a sports ground project in the • State Public Institutions of Samara Komsomolsky district of the city of Region “Togliatti social shelter Togliatti. Dolphin”, the project “Fairy tale with your own hands” In 2019, PJSC TOAZ supported • State Public Institutions of Samara the activities of the Para`DOX Region “Assistance Center For Children • “Safe City” project within grant program youth television studio of the city of Left Without Parental Care “Unity” “Chemistry of the Good” Zhigulevsk. This year has become (correctional)”, the project “Workshop a special one for the creative team; for the production of hand-made “We were pleasantly • “Togliattiazot Community Center” they celebrated the 10th anniversary souvenirs Academy of Needlework” surprised by the large number of the television studio. Togliattiazot • State Public Institutions of Samara of applications, which indicates presented the Para`DOX team with Region “Assistance Center For Children the high activity of Togliatti SOCIAL AND NON-PROFILE OBJECTS a modern professional video camera. Left Without Parental Care “Unity” residents. When choosing the 6.3.1 The youth television studio, within the (correctional)”, a project for theatrical winners, we tried to cover all framework of partnership relations, activities “Dobrotushki” aspects of the social life of For many years, the structure • The City Day celebrations, Komsomolsky district was involved in the coverage of many • Administration of the Lunacharsky our city, but the projects that of the Company includes three • The Victory Day celebration, of Togliatti; TOAZ events. rural settlement of the Stavropolsky received the largest grants infrastructure facilities which • An open dance floor for • Entertaining and municipal district of Samara region, the concern all residents of Togliatti, positively affect the social situation elderly people, educational activities Competition of social initia- project “Miracles of the Weaving and each of us, help us get to know both at the enterprise and in the • Music concerts; for schoolchildren Embroidery Box” tives “Chemistry of the Good” our city better or develop new entire region. These are Nadezhda • Free lectures on science and art “Vacations with TOAZ”; • Municipal Budget Educational modern skills. It would be nice health resort, Togliattiazot community (frequency - 2 lectures • Entertaining and educational Since 2019, Togliattiazot has Institution of Supplementary Education to see as many such initiatives center and Tulip kindergarten. per month) activities for children of school been implementing the “Chemistry “Edelweiss”, the project “Artists 2.0” as possible.” A veteran choir, various crafts as part of a cultural and preschool age “To school of the Good” program, which aims • Municipal Budget Educational groups and sports sections work in and educational project with TOAZ”; to support significant initiatives Institution of Supplementary Education Togliattiazot community center, also Intellectual Club, “Chemistry • New Year, Christmas and aimed at solving urgent problems of “Planet”, the project “Safe City Express Yulia Petrenko in 2019 a number of social events free of the Word”; Maslenitsa celebrations, the region, developing its social and Laboratory” Deputy General Director, of charge for visiting were organized • Children’s yard events “Summer gift fairs, cultural environment. Non-profit, non- • Non-State Educational Institution Director on Public Relations among which are as follows: with TOAZ” for residents of the • Chemist Day, and more. governmental and public organizations, of Supplementary Education the SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 6 DEVELOPMENT OF THE REGION OF PRESENCE.CHARITY 85

Medicine The social policy of the enterprise includes support for the city medical institutions and development of affordable medicine in the region. In 2019, the traditional Donor days were held on the territory of PJSC TOAZ. They are held with the participation of a mobile team from the Togliatti blood transfusion station. It is worth noting that the first Donor day in 2019 in Togliattiazot set a record for activity, 125 factory employees visited medical unit No. 7, 32 of which donated blood for the first time.

Sport • Medical personnel of medical unit No. 7 PJSC TOAZ in its activities has always focused on promotion of a • Assistance in organizing and participation of VIP-guests attracted the healthy lifestyle and sports not only conducting of the Invincible Power attention of a large number of spectators. among its employees, but also at the Martial Arts Games together with This year, for the first time, the city and regional levels. The Company the Council of Sports Federations competition was held in the “Elite” annually is engaged in organization of Association; group, where professional streetball internal sports competitions, and also • Organization of sports events jointly teams included in the TOP-35 rating of provides support in implementation with the Basketball Federation of the International Basketball Federation of sports initiatives at the city and Samara Region: “Zhiguli-Basket” played. It shall be noted that the this regional level: Festival, Samara Region Men`s Tournament has become a record in Basketball Championship, Samara terms of the number of participants. At • Organization of trips to the Region Mini-Basketball Championship, Samara Open-2019, Togliattiazot was international competitions of Togliattiazot Cup 3x3 Basketball represented by three teams. “Zhemchuzhina” (“Pearl”) Togliatti Tournament, Samara Open 2019 In addition, the Company acted as synchronized figure skating team Basketball Tournament. a partner of the Tournament. Member of State Autonomous Institution of of the Board of Directors of PJSC TOAZ Specialized Children and Youth Sports Vyacheslav Suslov greeted the basketball School of the Olympic Reserve No. 1; Samara Open‑2019 players and presented prizes to the • Organization of a trip to the 274 teams took part in the X youngest athletes. Mr. Suslov took part in competition for the pupils of the anniversary 3x3 Samara Open Basketball the “Star match”, which brought together • Gala concert of the Youth Symphony Orchestra of the Volga Region as part of the classical music festival “Classic OpenFest” “Freestyle” sports school; Tournament in memory of the honored the honoured guests of the Tournament. • Organization of a trip of the Togliatti trainer of Russia Yuri Tyulenev. Athletes educational project, regardless of its organizing interactive zones within Petersburg); team to the football competition competed for awards in 14 different status, is important for the enterprise: the framework of the construction of • Assistance was provided in organizing among veterans; categories. The prize fund of the Culture and Education art in any of its manifestations shall be the historical exposition “20th century: of the International Chemical Forum as • Sponsorship of the home games of the Tournament was 1 million rubles. The PJSC TOAZ supports projects in the accessible to people, while it needs Stavropol-Togliatti”; part of the Chemistry-2019 exhibition; “Lada” hockey team in the 2019/2020 guests of honor of the Tournament field of culture and art of international support. • Support was provided to the • Cooperation with the Russian season; were the world stars: Ivan Edeshko, and regional scale, participates in In 2019, Togliattiazot continued 2019/2020 season of the Togliatti Chemical Society named after Dmitry • Support for the organization of a Valdemaras Khomichus, Olga Arteshina, events which have an educational to implement its own projects and Philharmonic; Mendeleev: the work of the web- sports event - ecological marathon Sergei Panov, Igor Grachev, Sergei orientation, and also implements its supported a large number of cultural • Support was provided, together with portal Mendeleev.info, a platform for “Samarskaya Luka”; Chikalkin. The show-match with the own programs. Every cultural and and educational projects: the Togliatti Philharmonic Society, popularization of chemistry and its the Association “Youth Symphony history in Russia; • Implementation of the cultural and Orchestra of the Volga Region» in • Assistance was provided in publication educational project Intellectual Club organization of the festival “Classics of a collection of scientific papers “Chemistry of the Word” continues, OPEN FEST”; within the framework of the 2nd • Impulse scholarship program was • Assistance was provided All-Russian Scientific and Practical continued; in organizing the trip Conference “Innovations” and “Green • Competition and exhibition “Chemistry of the creative team of the Technologies”; in Paints” (together with The City Autonomous non-profit • Assistance was provided to the team Charitable Foundation “Togliatti organization “Ladiya Boys` of the Risk-Film studio in organizing Foundation”) was organized; Choir” to the festival (Syzran); of the shooting of the popular science • The Company`s own entertainment • Assistance was provided in organizing film “Brain. Evolution” and the wide and educational project “TOAZbuka” a trip for artists from the city of Togliatti release of the picture; (TOAZ alphabet) was implemented; with a theatrical performance “Either • Implementation of the Company’s • Assistance was provided to the people or dolls” at the VI Regional own educational program “Chemistry Municipal Autonomous Cultural National Folk Festival “Born in the of Experience” aimed at developing Institution of the city of Togliatti “Park Heart of Russia” (Samara); skills in people over 50; Complex of Equipment History named • Organization of a trip of the artists • Implementation of the Career after KG Sakharov” in organizing the of the Youth Drama Theater to the Guidance program aimed at attracting reconstruction of the exhibit; festival (Gubakha, Perm region); young specialists to the enterprise, • Assistance was organized to the • Organization of a trip of the “Variant” improving the quality of specialists • Participants of the ecological marathon “Samarskaya Luka” Togliatti Museum of Local Lore in theater artists to festivals (Riga, St. training in educational institutions. SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 6 DEVELOPMENT OF THE REGION OF PRESENCE.CHARITY 87

Cultural Education Project Regional Competition 70-80s of the last century and the and Exhibition “Chemistry “With this competition we creation, activity and role of PJSC Intellectual Club «Chemistry TOAZ in the development of the of the Word» in Paints” wanted to show the beauty of industrial production, working city. It is symbolic that this section, the creation of which was supported Since 2017, based on Togliattiazot In March 2019, PJSC TOAZ profession and «working man». community center, PJSC TOAZ has been together with the Spiritual Heritage by Togliattiazot with finances and This competition brought implementing the educational project Foundation named after S.F. Zhilkin exhibits, was opened in the year of Intellectual Club Chemistry of the Word», announced the “Chemistry in Paints” together artists of different ages, the 40th anniversary of the start of which has a popular science aim. In competition, timed to coincide with and with their works they let the production by the enterprise. 2019, the lecture cycle was continued. the 40th anniversary of the enterprise. citizens to learn more about the In the new section, all guests All artists of Samara region, students everyday work of Togliattiazot. of the museum can get acquainted THE SPEAKERS IN 2019 WERE of art schools and universities, When we conceived this with the history of the factory, amateur artists and children from 5 competition, there were doubts the construction and expansion • Literary critic, teacher, literary years old were invited to participate whether artists will take part of industrial capacities of which columnist for the Meduza website, in the competition. in it, and I am very glad that dates back to the 70-80s of the 20th century, and the role of the Galina Yuzefovich, To get acquainted with the everything worked out. Many history of the factory and its enterprise in development of the • Science journalist, editor-in-chief thanks to the artists who of the Neuronovosti.ru web-portal, modern achievements, a plein- city. An image of the «Operator’s participated in the competition. editor-in-chief of the Mendeleev. air was held for the artists on the room» of chemical production info web-portal, scientific editor territory of the enterprise. Artistic They managed to show our was created in the interactive of the Indicator.ru web-portal, works were performed in the genre company in such a way that space, where computers and their Aleksey Paevsky, • Awarding of the “Impulse” program scholarships “Industrial landscape” on the theme it inspires and fascinates! The components are presented, real “Togliattiazot Factory”: production, bright works of the contestants elements of the remote control of • Professor of Medical School at The lectures are very popular in music, visual and theatrical arts: factory buildings, the territory of a chemical unit, as well as samples Harvard University (USA), Professor among residents and visitors of the musicians, artists, actors, directors, provide an opportunity to the factory, working man, etc. of products of PJSC TOAZ. Among of the Moscow State University, city. Attending all lectures within the musical groups and musical projects see beauty in the ordinary. The techniques of execution are the interactive elements of the Vadim Gladyshev; framework of the “Chemistry of the in the field of culture and art. Beautiful paintings are the best “Painting” and “Graphics”. new exposition section, it is worth • Musician, journalist, Lyalya Word” is free. Laureates are paid a monthly gift for Togliattiazot on his 40th Out of 65 paintings sent to the highlighting the «Urea Production» Kandaurova, stipend for 10 months. The fund birthday”. competition, the expert council model, which in a simplified form • Journalist, publicist, philologist, for the scholarship program is chaired by a full member of the will acquaint museum visitors with Leonid Klein, “The idea of «Chemistry formed from the sale of tickets Petrovskaya Academy of Sciences Yulia Petrenko the technology of obtaining these • Researcher of the history of of the Word» as an intellectual for performances of performers architecture, Mikhail Solodilov club, at the events of which and Arts, Honoured Artist of Russia, Deputy General Director, products. As additional information, known in Russia and abroad, whose Director on Public Relations citizens will be able to gain Anatoly Rybkin, were selected 52 in the «Operator’s room» touch panels • Journalist, Pavel Poluichik, concerts are regularly organized new knowledge in various three nominations “Professionals”, contain videos about the production • Specialist in neuroeconomics, by TOAZ with the support of the fields of science and art, share “Amateurs”, “Children”. of other types of products at TOAZ, professor, Director of the Institute “Nebezrazlichno” (“Unindifferent”) impressions and exchange The winners of the competition As a result of the competition, a as well as information about the of Cognitive Neurosciences, Higher charity fund. opinions with each other, received cash prizes from 20 to 50 collection of works of art dedicated citizens, city events, eyewitness School of Economics, Vasily absolutely found support from Six cultural events were thousand rubles for professionals to the celebration of the 40th memories of various episodes Klyucharev, the public. Last season, the hall organized for Togliatti residents and from 10 to 20 thousand rubles anniversary of PJSC TOAZ was in the history of the city of the • Journalist and historian of popular of the Togliattiazot community as part of the “Impulse” program for amateurs. Participants in the formed. Also published a catalog of 70-80s, including the history of music, host of the program center was repeatedly full, and in 2019. In particular, a concert in “Children” nomination received works that have passed competitive the construction of Togliattiazot, «Walking on Sounds» on the Silver the audience met the guests honour of the virtuoso guitarist with interest and enthusiasm, memorable prizes. Also in each selection, presented at the exhibition. enterprise start-up, construction of Rain radio station and author of Ivan Smirnov, a performance by the who also liked the Togliatti nomination were awarded the urban facilities of the Komsomolsk the book of the same name, writer, “Otava Yo” group, performances by audience. Therefore, we audience sympathy prizes to the region. critic and translator, Lev Gankin, the Moscow city creative collective Creation of a new section continue to develop the participants of the competition. • Scientist, Doctor of Philology, Kirill - the “Nadezhda” musical theater, a of the exposition of the project, look for new topics Thanks to the competition and Babaev, and new lecturers, and we concert by poet Roman Mnatsakanov exhibition “Chemistry in Paints” Museum of Local Lore • Expert and style coach, hope that in the beginning and pianist Pavel Kupriyanov, “This exposition is unique PJSC TOAZ was able to show the In May 2019, a new section practicing consultant on external season Chemistry of the a performance by the “Russian not only for Togliatti, but entire city community the beauty of the exposition “20th century: transformations, Alexandra Badova, Word will continue to delight Acapella Band” cover group. for Russia as a whole. Thus, of industrial production, a working Stavropol-Togliatti” was opened for • Art photographer and teacher, Yuri Togliatti residents with new Togliatti residents have the Shalimov, discoveries.” profession and a “working man”, public at the Togliatti Museum of opportunity to get involved in • Candidate of Physical and hidden from the eyes of a common Local Lore. The section is devoted advanced museum technologies Yulia Petrenko man, but in this way bright and deep. to the history of the city in the Mathematical Sciences, “This year has been declared without leaving their hometown. Senior Researcher of the State Deputy General Director, Director on Public Relations the Year of Theater in Russia, I think that this alone is a Astronomical Institute named after we wanted to add this kind of sufficient reason to visit both the P.K.Sternberg of the Moscow State art to the project, so we invited new exposition and the entire University, Vladimir Surdin, the Moscow theater «Nadezhda». Museum of Local Lore.” • Psychologist, specialist in family Impulse Scholarship Program These are young guys, which and child-parent relations, coincides with the idea of the Alexander Kolmanovsky. In 2019, PJSC TOAZ, the “Nebezrazlichno” (“Unindifferent”) «Impulse» program, and perhaps Yulia Petrenko their arrival will be useful to some Deputy General Director, charity fund and the Togliatti Director on Public Relations Philharmonia continued to of our young actors. In general, implement the “Impulse” scholarship we believe that the program shall program. In the 2019-2020 academic expand and involve as many year, 7 talented young performers young talented guys as possible in The company has been became scholars of the program. its orbit in order to give impetus to supporting the Togliatti Museum The “Impulse” Scholarship their development” of Local Lore for more than three Program was launched in 2017. It years. Thus, in 2017, a joint video was originally conceived to support Yulia Petrenko competition “Welcome to my gifted young musicians. Now the Deputy General Director, Togliatti” was held, and in 2018 • Lecture by Pavel Poluichik as part of the program is being implemented to Director on Public Relations a photo competition “Togliatti. “Chemistry of the Word” project stimulate and support young talents • Plein-air participant at work Confession of love” was held. SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 6 DEVELOPMENT OF THE REGION OF PRESENCE.CHARITY 89

Entertainment and Educa- several city schools, as well as at the Mendeleev.info tional Project “TOAZbuka” specially organized celebration “To Partner Project (TOAZ alphabet) School with TOAZ”, held on the Day of Knowledge at the Togliattiazot In 2019, 150 years have PJSC TOAZ actively supported Community Center. Some of the passed since publication by the celebration of the beginning of books were donated to 4 libraries in Dmitry Mendeleev of one of the the academic year in educational Togliatti: to the Autograd library, to most important discoveries made institutions of Togliatti. The company the Central Library named after V.N. in Russia: the Periodic Table of has prepared a unique gift for first- Tatishchev, to the Central Children`s Chemical Elements. At the same graders. Especially for the beginning Library named after A.S. Pushkin, time, the Russian Chemical Society of the academic year, Togliattiazot to the library of PJSC TOAZ. Also named after Dmitry Mendeleev created “TOAZbuka”, which is a each pupil of the preparatory groups celebrates its anniversary this year. unique alphabet, reflecting the of the Tulip kindergarten received In connection with these events, specifics of the enterprise`s activities “TOAZbuka”. in 2018, PJSC TOAZ concluded are matched to each letter of the a Memorandum of Cooperation alphabet. Thanks to this book, and Interaction with the Russian children can not only learn the “TOAZbuka is a unique Chemical Society named after alphabet in a playful way, but also get gift from our Company to Dmitry Mendeleev. The main result acquainted with chemical science, all the little residents of of this document was establishment professions typical for chemical Togliatti. And for adults of the Mendeleev.info portal. This production, and the substances used too, because we hope website is one of the main platforms in it. “TOAZbuka” contains many that children will read this for popularizing chemistry and its color illustrations, as well as tasks alphabet and learn new history in Russia. that will keep children interested in things together with their The website publishes news of letters and the work of a chemical parents. We congratulate chemical science, articles about factory: coloring pages, stickers and children with the beginning great chemists, and materials on even a crossword puzzle. of the school year and wish the history of chemistry and, of About 1000 first copies of the school year will be filled course, about Dmitry Ivanovich “TOAZbuka” were received by the with bright and interesting Mendeleev himself. first-graders of the Komsomolsky discoveries, such as our The head of the portal is district of the city of Togliatti from the TOAZbuka.” Alexey Paevsky, a well-known hands of the deputy of the Togliatti scientific journalist, member of City Duma of the VII convocation, Yulia Petrenko the Russian Chemical Society the Director for Technical Policy of Deputy General Director, named after Dmitry Mendeleev, PJSC TOAZ Viktor Kazachkov during Director on Public Relations in the past – organic chemistry the beginning of school assemblys in engineer. • Participants of the lecture in the framework of the program “Chemistry of Experience”

Educational Program and recommendations from curators and project experts. The authors of “Chemistry of Experience” one of the presented business ideas In June 2019, graduation papers received an invitation on cooperation were defended and certificates were from the Zhiguli Valley Technopark. awarded to participants in the unique program “Chemistry of Experience” initiated by PJSC TOAZ. This “Launching the “Chemistry program was the first in the Russian of Experience” program, we Federation to develop personal and hoped for positive changes professional skills for people of pre- in the lives of people who retirement age, organized by a large will take part in it. And the industrial enterprise. 47 people aged enthusiasm with which, 45 and older took part in the pilot despite fatigue or household chores, the participants implementation of the “Chemistry of attended classes, that positive Experience” program. Classes were attitude, the communication held in the evening on weekdays that they received here is and weekends. Each participant already a worthy result. But it had the opportunity to attend 42 is important that they received hours of English classes, 30 hours knowledge that will help them of computer literacy, 28 hours of in their future professional or classes in the basics of management personal life. They were able to and entrepreneurship, as well as 7 combine new knowledge with the life experience that they master classes by invited experts in already had, we can see this different industries, open not only for from the projects presented. program participants, but also for all We are confident that the the citizens. Also for the participants, projects will be implemented there was an excursion to the Zhiguli • The process of defending graduate projects and we will follow them with of the program “Chemistry of Experience” Valley Technopark to get acquainted interest.” with business support events. portfolio, or a business case solution. At the end of the program, each Graduation works were evaluated Yulia Petrenko participant presented a project (an by a competent jury. All program Deputy General Director, individual or a group one): a business participants received certificates and Director on Public Relations • Children get acquainted with “TOAZbuka” plan for a possible business, a career memorable gifts, as well as reviews SUSTAINABLE DEVELOPMENT REPORT | CHAPTER 6 DEVELOPMENT OF THE REGION OF PRESENCE.CHARITY 91

Career Guidance Program Support for veterans Support of social and budg- “Easter Drops-2019” Festival of Children and Youth Crafts; The 9th of May is the day when etary institutions, socially The Career Guidance program • Assistance in organizing of the words of gratitude take on a special covers all aspects of the educational disadvantaged groups “Star of Bethlehem” Festival of meaning. process from school to production. PJSC TOAZ annually provides Children and Youth Crafts. Traditionally, a ceremonial event Its purpose is to attract young support to social and budgetary • Assistance to the Territorial Public in honour of the Victory Day in the specialists, improve their training in institutions of the city and region, Self-Government No. 1 of the Great Patriotic War, organized by specialized colleges and universities, 2019 was no exception: Komsomolsk region of the city Togliattiazot, was held at the TOAZ and form a labour pool from of Togliatti in the improvement community center. successful employees. Thanks to the • TOAZ own grant program for of residential courtyards, the The guests of honor of the program, even high school students those who have adopted children manufacture and installation of holiday, of course, became war who are keen on natural sciences left without parental care; benches; veterans and homefront workers. and dream of connecting their life • Support for the organization of • Assistance in organization of For the third year in a row, TOAZ, with chemical production can get the charity performance “Beautiful repair work in the premises of the as part of a festive event dedicated into the “golden hundred”. Women in Anger” to raise funds Temple of Queen Tamara of the to the Great Victory, the “Poetic It is worth noting that the to improve the material and city of Togliatti; Marathon” was held, where anyone Company has been implementing technical base of children’s social • The allocation of special could read poetry about the war certain areas of the program for institutions in the city of Togliatti; equipment and construction from the stage. In 2019, 30 people several years, but since 2019 it has • Assistance in organizing the materials for construction work at of different ages took part in this covered all age categories of Togliatti regional project “Samara Region is the Resurrection Monastery of the heartwarming event. residents. Therefore, in the spring Our Home”; city of Togliatti, Samara region, The evening ended with a TOAZ announced the creation • Assistance to the “This is an and the Syzran Eparchy of the rich concert program and bright of specialized engineering and honour” Union of Reserve Officers Russian Orthodox Church; fireworks. technical classes on the basis of city in organizing events dedicated to • The allocation of special schools No. 35 and No. 41. Education TOAZ has another wonderful • Engineering-technical students in a practical lesson the Defender of the Fatherland equipment for the construction tradition, on the eve of Victory in them goes in two directions Day and the Navy Day; work of the Non-profit result, 36 tenth graders who passed under the agreement amounted Day in the Great Patriotic War, – chemical-physical and physico- • Provision of tickets for New Year’s organization for the Development the competition began their studies to 305 thousand rubles). TSU is a in appreciation of and deep mathematical. The profile classes performances for children from of Education “Volga Orthodox in September 2019. Note that the university that is an industrial partner gratitude for the great feat, factory were formed within the framework large and low-income families, Institute named after Saint Alexy Company has repaired classrooms and of the factory. In September 2019, representatives come to visit the war of the innovative project of the children with disabilities; of Moscow”; will regularly equip them with modern TOAZ handed over a batch of new veterans and homefront workers enterprise “School as one of the • Provision of tickets to events • The allocation of special equipment. In the reporting year, equipment worth over 300 000 and congratulate them on the 9th of elements of the formation of human hosted by TOAZ Community equipment for the improvement more than 500 thousand rubles were rubles for the training laboratory. May. With flowers and gifts, TOAZ resources for the chemical industries Center (concerts, performances, of the territory of the Church allocated for this. The Institute of Chemistry and employees visit those who gave a of Samara region”, which became children`s entertainment of St. Spyridon Trimifuntsky in Environmental Engineering of TSU lot for the desired victory, but are the winner in the regional fair of programs) for social and Zelenovka village; social and pedagogical innovations. received a spectrophotometer, a unable to attend the festive event “We expect the first impact drying cabinet and an evaporator as a budgetary institutions; • Organization of an action The purpose is to develop students’ due to health reasons. • Assistance in organizing of the to collect aid for shelters for interest in the technical field, from engineering-technical gift from the enterprise for the Day of classes in seven years, when Knowledge. The equipment will be homeless animals in the city of engineering and design thinking, to Togliatti. develop skills in modeling technical their graduates, having finished used both in the process of preparing school and the chosen university, students for practical work in chemical processes, and also to motivate Since 2014, PJSC TOAZ has been graduates to make a conscious will come to Togliattiazot as well production, and in research activities. trained specialists. We hope that In total, Togliattiazot supported the implementing a grant program for choice of engineering-technical and persons who have adopted children working professions. other Togliatti schools will join our university in 2019 in the amount of project as well.” about 700 000 rubles. with disabilities. This is an initiative Considering the large number of the employees, the Trade Union of applicants wishing to get into Earlier (in 2018), within the Dmitry Mezheedov framework of the Career Guidance organization and the administration engineering classes, the selection General director of CJSC Corporation of the enterprise. The program for them was based on the results of Togliattiazot program, the Company donated more than a million rubles worth was also supported by the Board the State Final Examination and the of Directors of the Company. As technical portfolio competition. As a of instruments to the university, TOAZ initiative leads to the fact then a test stand was launched in part of the program, Togliattiazot that in-depth knowledge and skills the Laboratory of Machines and allocates funds to persons who in the profile chosen during school Apparatus for Chemical Production of have orphaned children; as well years end in a specific workplace. the Institute of Chemistry and Energy as children with disabilities and The second block of the Career of TSU to study heat exchange children left without parental care Guidance program is TOAZ`s processes. who were at the time of adoption in cooperation with universities and Not only local students are striving organizations for orphaned children. colleges. Within the framework of to undergo an industrial internship An important condition of the the new concept, each successful on the basis of Togliattiazot. In the program is the adoption of children student who cooperates with the summer of 2019, TOAZ accepted 119 in Samara region. UNIVERSITIES: SCHOOLS TOGLIATTI STATE enterprise can not only receive young people from different regions In 2019, 13 families received UNIVERSITY, IVANOVO HCTU, practical skills at the plant under the of the country for practice. This is financial support under this Program SAMARA STATE for a total amount of 1 480 000 rubles. TECHNICAL guidance of experienced mentors, useful not only for future chemical UNIVERSITY but also guaranteed employment at engineers, but also for the enterprise, PJSC TOAZ makes a significant the factory. since it allows its HR specialists and contribution to the socio-economic In addition, the best students engineers to see in action and select development of its region, implements SSUS: of Togliatti Chemical Engineering the best young specialists who not projects for environmental protection, TOGLIATTI ELECTROTECHNICAL Technical College and Togliatti State only have specialized education, provides support for projects in the TECHNICAL COLLEGE, TOGLIATTI CHEMICAL University receive material support but are also able to work on the field of culture, sports, education, etc. ENGINEERING TECHNICAL Thus, the Company shows a worthy COLLEGE from the enterprise in the form of latest equipment, which, as part of personalized TOAZ scholarships the modernization program, is more • Veterans of the Great Patriotic War at the Victory Day celebrations on the square of the example of social responsibility of (payment of scholarships in 2019 widely used in the factory. Togliattiazot Community Center. business. SUMMARY 93 SUMMARY

Public non-financial reporting can only be achieved with the are published annually as the has been developing around the joint efforts of the government, Sustainable Development Report. world for more than 20 years now. private and public sectors. It is This Sustainable Development Reports similar to this Sustainable important that developers of Report of PJSC TOAZ for the Development Report are published ratings in the sphere of sustainable period from 1 January 2019 to by most large national and development welcome any step of 31 December 2019 has been multinational companies. State and each company aimed at disclosing prepared in accordance with the municipal organizations in many and transparency of the reporting main version of compliance with countries follow the principles of in each area of the company’s requirements of the Sustainability transparency of the information activities. Reporting Guidelines of the provided. This is all owing to In the course of its activity, Global Reporting Initiative (GRI), the fact that the idea of long- PJSC TOAZ pursues not only to version G4. term profitability combined with maintain and increase the growth social justice and environmental rates of economic development, protection is becoming more and but also environmental protection more obvious and wide-spread. and minimization of its impact Development of Russian on the environment, care for the The contact person for questions regarding this business, its responsibility and Company’s employees, their health Report or its contents: openness is an important, if not to and wellbeing, development of the say a priority, task. The State policy region of presence and cultural Dmitry Masalitin, in the field of social and economic, environment. These principles Spokesman as well as environmental of corporate responsibility and Telephone: +7 (8482) 60-15-05 development sets goals which the results of their application E-mail: [email protected] 95 ABBREVIATIONS AND DESIGNATIONS

THE FOLLOWING ABBREVIATIONS AND DESIGNATIONS WERE USED IN THE REPORT:

NSPF Non-state pension fund EP Environmental protection GRI Global Reporting Initiative OH Occupational health IPDPO Intellectual property development and protection office TCD Technical control department WWTF Waste water treatment facility Report Sustainable development report of PJSC TOAZ for 2019 DGRT Departmental gas rescue team Reporting 01 January 2019 – 31 December 2019 WCC Water cooling cycle period HEI Higher education institution PJSC Public Joint Stock Company SPI SR State public institution of Samara region BSA Behavioural safety audit GOST National standard IS Industrial safety HS Hydraulic structures DGC Dust and gas collectors CC Community center EP Emergency plan VHI Voluntary health insurance DSWGLP Draft standards for wastes generation and limits on their placement RCC Remote control console FS Fire station CJSC Closed joint stock company RUIE Russian union of industrialists and entrepreneurs ISM Integrated management system RF Russian Federation ETP Engineering and technical personnel SRS Sanitary Regulations and Standards Sludge cake Activated sludge dehydrated to 60–85% humidity MM Mass media Company PJSC TOAZ, Togliattiazot, TOAZ СО2 Carbon dioxide EC Efficiency coefficient ISMS Industrial safety management system KPI Key performance indicators SHMO Specialized hydrometeorological observatory LDC Labour disputes commission TS Technical specification UFC Urea formaldehyde concentrate FZ Federal law VOC Volatile organic components WT Water treatment MW Minimum wage COD Chemical oxygen demand PHU Primary healthcare unit CFL Central factory laboratory EM The Ministry of the Russian Federation for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters ES Emergency situation VERT Volunteer emergency response team SER Safety expert review 97

DEFINITIONS

LTIFR Injury rate, calculated as the ratio of the total number of lost time injuries to the number of manhours worked multiplied by 1 million man-hours

Interested parties, Organizations or individuals whose interests are related to the activities of PJSC stakeholders TOAZ and who, in turn, affect the results of the Company’s operation KPI Key performance indicators are the indicators of the activities of a division (company), which help the company in achieving strategic and tactical (operational) goals Company, Public Joint Stock Company Togliattiazot enterprise Modernization Capital investment plan of PJSC TOAZ program GRI Guidelines Sustainability Reporting Guidelines of the Global Reporting Initiative

Essential topics / Aspects that reflect the economic, environmental, and social impact on organizations or essential issues that have a significant impact on evaluations and decisions of interested parties. Managing CJSC Corporation Togliattiazot company 99 STANDARD GRI G4 DISCLOSURES TABLE

INDICATOR REFERENCE /NOTE G4-13 Significant changes regarding No significant changes regarding organization’s size, organization’s size, structure, structure, ownership or its supply chain occurred over STRATEGY AND ANALYSIS ownership, or its supply chain the reporting period occurred over the reporting period G4-1 Statement of the most Address of the General Director of the Company senior decision-maker of the organization about the G4-14 Whether and how the The precautionary principle is the fundamental relevance of sustainability precautionary principle is principle that guides the Company in planning and to the organization and its addressed by the organization carrying out its activities, including the integration of strategy environmental aspects and safety issues.

G4-2 Research and development 1.6. Innovation development of the Company G4-15 Externally developed economic, The Company endorses the principles of sustainable results environmental and social charters, development. i.e. it considers economic, environmental principles, or other initiatives to and social factors in its activities. The Company ORGANIZATIONAL PROFILE which the organization subscribes promotes the initiatives to support the regions of or which it endorses presence, for detail see: Chapter 6. Development of the G4-3 Name of the organization Public Joint Stock Company Togliattiazot, PJSC TOAZ, region of presence. Charity Togliattiazot G4-16 Membership in associations (such Chamber of Commerce and Industry of the Russian G4-4 Primary brands, products and Core business line of PJSC TOAZ is production of as industry associations) and /or Federation services ammonia and mineral fertilizers: urea, UFC and national or international advocacy Russian Fertilizer Producers Association (RFPA) other chemical products. For detail see: organizations Russian Union of Commodity Producers 1.1. Company overview Russian Chemists Union 2.1. Types of products and production volumes Samara Region Employers’ Association Chamber of Commerce and Industry of Togliatti G4-5 Location of the organization’s 445045, Samara region, Togliatti, headquarters Povolzhskoe shosse, 32 IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES

G4-6 Number of countries where 2.7. Sales markets and transportation of products G4-17 All entities included in the PJSC TOAZ the organization operates, and organization’s consolidated The sustainable development report does not contain names of countries where either financial statements or equivalent information about any entities included in the the organization has significant documents organization’s consolidated financial statements or operations of that are specifically equivalent documents relevant to the sustainability topics covered in the report G4-18 Methods of defining the Report About the Report G4-7 Nature of ownership and legal PJSC, i.e. Public Joint Stock Company content and aspect boundaries form

G4-8 The markets served by the 2.7. Sales markets and transportation of products company G4-19 All the material Aspects identified About the Report in the process for defining report G4-9 The scale of the organization Key indicators and achievements in 2019 content Awards Company overview G4-20 Each material Aspect boundary About the Report Chapter 2. Production, safety and sales of products within the organization Chapter 3. Economic sustainability

G4-10 Total number of employees by 4.1. The Сompany staff and formation of a professional G4-21 Each material Aspect boundary About the Report employment type, employment team outside the organization contract, region and gender G4-22 Effect of any restatement of the About the Report G4-11 Percentage of total employees Collective Bargaining Agreement covers 100% of the information provided in the covered by collective bargaining Company’s personnel previous reports, and reasons for agreements 4.1. The Company staff and formation of a professional such restatements team G4-23 Significant changes from previous About the Report G4-12 Organization’s supply chain 2.1. Types of products and production volumes reporting periods in the Scope and 2.2. Ensuring supply of raw materials and equipment Aspect Boundaries. 2.7. Sales markets and transportation of products 101 STANDARD GRI G4 DISCLOSURES TABLE

STAKEHOLDER ENGAGEMENT CORPORATE GOVERNANCE

G4-24 A list of stakeholder groups 1.5. Stakeholder engagement G4-34 Corporate governance structure of the 1.2. Company governance structure engaged by the company organization, including committees of the highest governance body

G4-25 The basis for identification and 1.5. Stakeholder engagement selection of stakeholders with whom to engage G4-35 The process for delegating authority for Chapter 1. Strategy and vision of economic, environmental and social topics sustainable development from the highest governance body to senior executives and G4-26 Approach to stakeholder 1.5. Stakeholder engagement other employees. engagement, including frequency of engagement by type and by stakeholder group, and the engagement elements which were G4-36 Whether the organization has appointed an Chapter 1. Strategy and vision of undertaken specifically as part of executive-level position or positions with sustainable development the report preparation process responsibility for economic, environmental and social topics G4-27 Key topics and concerns that have 1.5. Stakeholder engagement been raised through stakeholder engagement, and how the organization has responded to G4-37 Processes for consultation between 1.5. Stakeholder engagement those key topics and concerns, stakeholders and the highest governance body including through its reporting on economic, environmental and social topics REPORT PROFILE

G4-28 Reporting period for information From 01.01.2019 till 31.12.2019 G4-39 Whether the Chair of the highest governance No provided body is also an executive officer G4-29 Date of most recent previous The previous sustainable development report for 2018 sustainable development report was placed in the public domain in 2019 G4-42 The highest governance body’s and senior The senior executives set goals https://toaz.ru/rus/invest/razvitie.phtml?prod=2 executives’ roles in the development, approval, and tasks in relation to economic, and updating of the organization’s purposes, environmental and social impacts, form the G4-30 Reporting cycle The Company prepares sustainable development values and mission statements, strategies, principles of engagement with internal and reports on an annual basis (annual reporting cycle) policies, and goals related external stakeholders, participate in their to economic, environmental and social impacts work G4-31 Contact person for questions Summary regarding the report or its contents G4-43 The measures taken to develop and enhance Publication of the Annual Report and the the highest governance body’s collective Sustainable development report of PJSC G4-32 “In accordance” with GRI option The report was prepared in accordance with the knowledge of TOAZ. chosen by the organization, GRI “core” version of compliance with the requirements of economic, environmental and social topics The economic, environmental and social Context Index for the chosen the Sustainability Reporting Guidelines of the Global issues of corporate governance are option Reporting Initiative version G4 discussed at the Board of directors. 1.5. Stakeholder engagement G4-33 The organization’s policy and An independent audit was not conducted on this current practice with regard to Sustainable Development Report for 2019. seeking external assurance for the Nevertheless, the Company is aware of the importance G4-48 The highest committee or position that General Director report of conducting professional external audits to increase formally reviews and approves the Deputy General Director the level of confidence in non-financial reporting and organization’s is considering the possibility of conducting them in the sustainability report and ensures that all future. material Aspects are covered 103 STANDARD GRI G4 DISCLOSURES TABLE

ETHICS AND INTEGRITY INDIRECT ECONOMIC IMPACT

G4-56 The organization’s values, principles, standards 1.3. Company’s strategic priorities G4-DMA Overview of management approaches Chapter 1. Strategy and vision of and norms of behavior such as codes of sustainable development conduct and codes of ethics Chapter 6. Development of the region of presence. Charity G4-58 The internal and external mechanisms for 1.5. Stakeholders engagement reporting concerns about unethical or unlawful Chapter 4. Human capital assets and behavior, and matters related to organizational formation of a professional team G4-EC7 Development and impact of infrastructure Chapter 6. Development of the region of integrity 5.5. Industrial safety, health and labour investments and services supported presence. Charity protection

SPECIFIC STANDARD DISCLOSURES G4-EC8 Significant indirect economic impacts, Chapter 6. Development of the region of including the extent of impacts presence. Charity G4-СПМ Overview of management approaches Chapter 1. Strategy and vision of sustainable development

CATEGORY: ECONOMIC CATEGORY: ENVIRONMENTAL ECONOMIC PERFORMANCE ENERGY G4-DMA Overview of management approaches Chapter 1. Strategy and vision of sustainable development G4-DMA Overview of management approaches 5.1. Environmental policy of the Company Chapter 3. Economic sustainability

G4-EC1 The generated and distributed direct economic Chapter 3. Economic sustainability value G4-EN3 Energy consumption within the organization 5.3 Energy efficiency

G4-EC3 Coverage of the organization’s retirement plans 4.4. Social support of employees, incentives and defined benefit plan obligations G4-EN6 Reduction of energy consumption 5.3. Energy efficiency

G4-EC4 Financial assistance received from government The Company received no financial assistance from government in the WATER reporting period G4-DMA Overview of management approaches 5.1. Environmental policy of the Company MARKET PRESENCE

G4-DMA Overview of management approaches 4.3. Remuneration system G4-EN8 Total water withdrawal by source 5.2. Environmental impact

G4-EC5 Ratios of standard entry level salary by Chapter 4. Human capital assets and gender compared to local minimum salary at formation of a professional team G4-EN9 Water sources significantly affected by 5.2. Environmental impact significant locations of operation withdrawal The company does not discriminate against its employees. Regardless of gender, the average salary level of an employee of the BIODIVERSITY Company entry level is the same. The ratio of standard entry level salary by G4-DMA Overview of management approaches 5.1. Environmental policy of the Company gender compared to local minimum salary 6.2. Environmental initiatives at significant locations of operation was 2,1.

G4-EC6 The proportion of senior management at The percentage of senior management at G4-EN13 Habitats protected or restored 5.4. Ecological activities significant locations of operation that are hired significant locations of operation that are 6.2. Environmental initiatives from the local community hired from the local community was 20% 105

EMISSIONS OCCUPATIONAL HEALTH AND SAFETY

G4-DMA Overview of management 5.1. Environmental policy of the Company G4-DMA Overview of management 4.1.The Сompany staff and formation of a professional approaches 5.2. Environmental impact approaches team 5.1. Environmental policy of the Company 5.5. Industrial safety, health and labour protection G4-EN15 Direct greenhouse gas emissions Greenhouse gas (С02), generated in the production (Scope 1) process, is used at other stages of the production cycle G4-LA5 Percentage of total workforce 4.4. Social support for employees, incentives represented in formal joint management-worker health and safety committees that G4-EN21 NOx, SOx , and other significant 5.2. Environmental impact help monitor and advise on air emissions occupational health and safety programs

EFFLUENTS AND WASTE G4-LA6 Type of injury, occupational 5.5. Industrial safety, health and labour protection diseases, lost days, and G4-DMA Overview of management 5.1. Environmental policy of the Company absenteeism, and total number of The indicator is disclosed without breakdown by approaches work-related fatalities, by region gender, as well as without data on employees of and by gender contractors

G4-EN22 Total water discharge by quality 5.2. Environmental impact G4-LA8 Health and safety topics covered 5.5. Industrial safety, health and labour protection and destination in formal agreements with trade unions

G4-EN23 Total weight of waste by type and 5.2. Environmental impact TRAINING AND EDUCATION disposal method G4-DMA Overview of management 4.1. The Сompany staff and formation of a professional approaches team G4-EN24 Total number and volume of Not a single spill occurred during the reporting period. 5.5. Industrial safety, health and labour protection significant spills G4-LA9 Average hours of training per year 4.3. Remuneration system COMPLIANCE per employee by gender, and by employee category G4-DMA Overview of management 5.1. Environmental policy of the Company approaches G4-LA10 Programs for skills management Chapter 4. Human capital assets and formation of a and lifelong learning that support professional team the continued employability of OVERALL employees and assists them in managing career endings G4-DMA Overview of management 5.1. Environmental policy of the Company approaches G4-LA11 Percentage of employees receiving 4.3. Remuneration system regular performance and career The indicator is disclosed without division by employee G4-EN31 Total environmental protection 5.1. Environmental policy of the Company development reviews, by gender category expenditures and investment by 5.2. Environmental impact and by employee category type

CATEGORY: SOCIAL LOCAL COMMUNITIES

PRACTICE OF LABOR RELATIONS AND DECENT WORK; EMPLOYMENT G4-DMA Overview of management Chapter 6. Development of the region of presence. approaches Charity G4-DMA Overview of management 1.4. Risk management in the field of sustainable approaches development G4-SO1 Percentage of operations with Chapter 6. Development of the region of presence. Chapter 4. Human capital assets and formation of a implemented local community Charity professional team engagement, impact assessments, and development programs G4-LA1 Total number and rates of new 4.1. The Сompany staff and formation of a professional employee hires and employee team turnover by age group, gender G4-SO2 Operations with significant actual Chapter 5. Ecology, environmental protection and and region or potential negative impacts on personnel safety local communities G4-LA2 Benefits provided to full-time 4.3. Remuneration system employees that are not provided 4.4. Social support for employees, incentives to temporary or part-time employees, by significant locations of operation