Consolidated Quarterly Report of the Grupa Azoty Zakłady Chemiczne Police Group

Consolidated quarterly report of the Grupa Azoty Zakłady Chemiczne Police Group

for Q1 2021

Contents I. FINANCIAL HIGHLIGHTS ...... 4 Consolidated financial highlights ...... 5 Separate financial highlights ...... 6 II. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31ST 2021 PREPARED IN ACCORDANCE WITH IAS 34 INTERIM FINANCIAL REPORTING AS ENDORSED BY THE EUROPEAN UNION ...... 7 Interim condensed consolidated statement of profit or loss and other comprehensive income ...... 8 Interim condensed consolidated statement of financial position ...... 10 Interim condensed consolidated statement of changes in equity ...... 12 Interim condensed consolidated statement of cash flows ...... 14 1. The Group ...... 16 1.1. Organisation of the Grupa Azoty Zakłady Chemiczne Police Group ...... 16 1.2. Composition of the Group ...... 16 1.3. Composition of the Parent’s Management Board and Supervisory Board ...... 17 2. Significant events in the three months ended March 31st 2021 and until the authorisation date ...... 19 2.1 Fulfilment of conditions for the financial close by Grupa Azoty Polyolefins S.A...... 19 2.2 Impact of COVID-19 pandemic on the Company’s and Group’s business...... 19 3. Policies applied in the preparation of the interim condensed consolidated financial statements...... 19 3.1. Statement of compliance and general policies ...... 19 3.2. Accounting policies and computation methods ...... 20 4. Selected supplementary and explanatory notes ...... 21 4.1. Explanatory notes ...... 21 4.2. Related parties ...... 31 4.3. Events after the reporting period that could affect financial results in the future ...... 33 4.4. Dividends ...... 33 4.5. Seasonality of operations ...... 33 III. INTERIM CONDENSED SEPARATE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31ST 2021 PREPARED IN ACCORDANCE WITH IAS 34 INTERIM FINANCIAL REPORTING AS ENDORSED BY THE EUROPEAN UNION ...... 34 Interim condensed separate statement of profit or loss and other comprehensive income ...... 35 Interim condensed separate statement of financial position ...... 36 Interim condensed separate statement of cash flows ...... 39 Notes to the interim condensed separate financial statements ...... 41 1. Overview of the Company ...... 41 1.1. Organisation of the Company ...... 41 2. Significant events in the three months ended March 31st 2021 and until the authorisation date ...... 41 3. Policies applied in the preparation of the interim financial statements ...... 41 3.1. Statement of compliance and general basis of preparation ...... 41 3.2. Accounting policies and computation methods ...... 42 4. Selected supplementary and explanatory notes ...... 42 IV. MANAGEMENT’S DISCUSSION AND ANALYSIS ...... 43 1. General information about the Group ...... 44 1.1. Organisation and structure ...... 44 2. Financial condition and assets ...... 47 2.1. Assessment of factors and one-off events with a material impact on operations and financial performance ...... 47 2.2. Market overview ...... 47 2.3. Key financial and economic data...... 51 2.3.1. Consolidated financial results ...... 51 2.3.2. Segments’ financial results ...... 53 2.3.3. Operating expenses...... 54 2.3.4. Structure of assets, equity and liabilities ...... 55 2.3.5. Financial ratios ...... 57 2.4. Financial liquidity ...... 59 2.5. Borrowings ...... 59

2.6. Key projects ...... 61 2.7. Factors which will affect performance over at least the next reporting period ...... 64 3. Other information ...... 66 3.1. Significant events ...... 66 3.2. Significant agreements ...... 66 3.3. Sureties and guarantees ...... 67 3.4. Shareholding structure ...... 69 3.5. Parent shares held by management and supervisory personnel ...... 69 3.6. Composition of the Management Board and the Supervisory Board ...... 69 3.7. Awards and distinctions ...... 74 4. Other information ...... 74

I. FINANCIAL HIGHLIGHTS

Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed consolidated financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise) Financial highlights

Consolidated financial highlights

(PLN ‘000) (EUR ‘000) for the period for the period for the period for the period Jan 1 − Jan 1− Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 Mar 31 2021 Mar 31 2020 unaudited unaudited unaudited unaudited Revenue 718,146 648,224 157,071 147,448 Operating profit 27,052 9,163 5,917 2,084 Profit before tax 20,660 29,555 4,519 6,723 Net profit 15,043 22,570 3,290 5,134 Comprehensive income for period 15,059 22,608 3,294 5,143 Number of shares 124,175,768 124,175,768 124,175,768 124,175,768 Earnings per ordinary share 0.12 0.11 0.03 0.03

Net cash from operating activities 68,148 (48,691) 14,905 (11,075) Net cash from investing activities (47,535) (471,889) (10,397) (107,338) Net cash from financing activities (34,532) 338,036 (7,553) 76,891 Total net cash flows (13,919) (182,544) (3,044) (41,522) Cash and cash equivalents at beginning of period 64,332 445,295 14,071 101,289 Cash and cash equivalents at end of period 50,287 263,449 10,999 59,925 as at as at as at as at Mar 31 2021 Dec 31 2020 Mar 31 2021 Dec 31 2020 unaudited audited unaudited audited Non-current assets 2,643,820 2,659,146 567,307 576,221 Current assets 818,941 749,717 175,727 162,459 Non-current liabilities 743,182 766,719 159,471 166,143 Current liabilities 960,231 897,855 206,045 194,560 Equity 1,759,348 1,744,289 377,518 377,977 Share capital 1,241,758 1,241,758 266,455 269,082 Non-controlling interests 46 45 10 10

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Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed separate financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise) Financial highlights

Separate financial highlights

(PLN ‘000) (EUR ‘000) for the period for the period for the period for the period Jan 1 − Jan 1− Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 Mar 31 2021 Mar 31 2020 unaudited unaudited unaudited unaudited Revenue 711,579 644,694 155,635 146,645 Operating profit 28,991 15,072 6,341 3,428 Profit before tax 48,351 1,483 10,575 337 Net profit 42,268 868 9,245 197 Comprehensive income for period 42,268 868 9,245 197 Number of shares 124,175,768 124,175,768 124,175,768 124,175,768 Earnings per ordinary share 0.34 0.01 0.07 0.00

Net cash from operating activities 54,166 20,695 11,847 4,707 Net cash from investing activities (45,298) (28,633) (9,907) (6,513) Net cash from financing activities (32,330) 206,746 (7,071) 47,027 Total net cash flows (23,462) 198,808 (5,132) 45,222 Cash and cash equivalents at beginning of period 44,289 39,399 9,687 8,962 Cash and cash equivalents at end of period 20,674 238,842 4,522 54,328 as at as at as at as at Mar 31 2021 Dec 31 2020 Mar 31 2021 Dec 31 2020 unaudited audited unaudited audited Non-current assets 2,682,817 2,681,719 575,675 581,113 Current assets 787,671 730,584 169,017 158,313 Non-current liabilities 697,076 728,848 149,577 157,937 Current liabilities 946,869 899,180 203,178 194,847 Equity 1,826,543 1,784,275 391,937 386,642 Share capital 1,241,758 1,241,758 266,455 269,082

The selected items of the statement of profit or loss and other comprehensive income, statement of financial position and statement of cash flows were translated into the euro using the method described below: • Items of assets and equity and liabilities in the statement of financial position were translated at the exchange rate effective for the last day of the reporting period: the exchange rate as at December 31st 2020 was EUR 1 = PLN 4.6148 (table No. 255/A/NBP/2020). the exchange rate as at March 31st 2021 was EUR 1 = PLN 4.6603 (table No. 062/A/NBP/2021), • Items of the statement of profit or loss and other comprehensive income and the statement of cash flows were translated at the arithmetic mean of the EUR/PLN rates quoted by the National Bank of Poland as effective for the last day of each month in the reporting period: in the period January 1st–March 31st 2020, the average exchange rate was EUR 1 = PLN 4.3963, in the period January 1st–March 31st 2021, the average exchange rate was EUR 1 = PLN 4.5721. The translation was made using the exchange rates specified above by dividing amounts expressed in thousands of the złoty by the exchange rate.

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II. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31ST 2021 PREPARED IN ACCORDANCE WITH IAS 34 INTERIM FINANCIAL REPORTING AS ENDORSED BY THE EUROPEAN UNION

Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed consolidated financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise)

Interim condensed consolidated statement of profit or loss and other comprehensive income for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited Profit or loss Revenue 718,146 648,224 Cost of sales (628,241) (563,548) Gross profit 89,905 84,676 Selling and distribution expenses (31,749) (30,583) Administrative expenses (38,215) (45,110) Other income 7,961 1,622 Other expenses (850) (1,442) Operating profit 27,052 9,163 Finance income* 22,056 36,579 Finance costs* (2,986) (19,721) Net finance income (costs) 19,070 16,858 Share of profit of equity-accounted investees (25,462) 3,534 Profit before tax 20,660 29,555 Income tax (5,617) (6,985) Net profit 15,043 22,570 * Compared with the originally reported information (for the first quarter of 2020), a presentation change was made in comparative data by presenting the revaluation of investments without netting off; the change had no effect on net finance income.

Notes to the interim condensed consolidated financial statements are an integral part thereof.

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Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed consolidated financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise)

Interim condensed consolidated statement of profit or loss and other comprehensive income (continued) for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited Other comprehensive income Items that will be reclassified to profit or loss Exchange differences on translating foreign operations 16 38 Total other comprehensive income 16 38 Comprehensive income for period 15,059 22,608 Net profit (loss) attributable to: Owners of the parent 15,042 13,850 Non-controlling interests 1 8,720 Comprehensive income for period attributable to: Owners of the parent 15,058 13,888 Non-controlling interests 1 8,720 Earnings per share Basic (PLN) 0.12 0.11 Diluted (PLN) 0.12 0.12

Notes to the interim condensed consolidated financial statements are an integral part thereof.

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Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed consolidated financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise)

Interim condensed consolidated statement of financial position as at as at Mar 31 2021 Dec 31 2020 unaudited audited Assets Non-current assets Property, plant and equipment 1,458,085 1,466,398 Right-of-use assets 66,830 67,315 Investment property 34,533 34,682 Intangible assets 16,660 16,495 Shares 523 523 Equity-accounted investees 580,048 605,510 Other financial assets 471,263 445,612 Other receivables 160 470 Deferred tax assets 15,718 22,141 Total non-current assets 2,643,820 2,659,146 Current assets Inventories 277,790 357,897 Property rights 172,581 115,773 Current tax assets 743 - Trade and other receivables 317,540 211,715 Cash and cash equivalents 50,287 64,332 Total current assets 818,941 749,717 Total assets 3,462,761 3,408,863

Notes to the interim condensed consolidated financial statements are an integral part thereof.

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Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed consolidated financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise)

Interim condensed consolidated statement of financial position (continued) as at as at Mar 31 2021 Dec 31 2020 unaudited audited Equity and liabilities Equity Share capital 1,241,758 1,241,758 Share premium 4,639 4,639 Translation reserve 60 44 Revaluation capital reserve 9,548 9,548 Retained earnings 503,297 488,255

Equity attributable to owners of the parent 1,759,302 1,744,244 Non-controlling interests 46 45 Total equity 1,759,348 1,744,289 Liabilities Borrowings 419,515 447,223 Lease liabilities 60,023 71,317 Other financial liabilities 29,628 21,469 Employee benefit obligations 84,973 84,973 Trade and other payables 12,539 4,788 Provisions 118,208 118,208 Grants 18,296 18,741 Total non-current liabilities 743,182 766,719 Borrowings 195,345 58,376 Derivative financial instruments 1,925 948 Lease liabilities 6,368 7,203 Other financial liabilities 117,841 140,143 Employee benefit obligations 14,540 14,580 Current tax liabilities 1 4,829 Trade and other payables 618,162 665,712 Provisions 4,190 4,194 Grants 1,859 1,870 Total current liabilities 960,231 897,855 Total liabilities 1,703,413 1,664,574 Total equity and liabilities 3,462,761 3,408,863

Notes to the interim condensed consolidated financial statements are an integral part thereof.

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Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed consolidated financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise)

Interim condensed consolidated statement of changes in equity for the three months ended Mar 31 2021

Equity Share Revaluation Retained attributable to Non-controlling Share capital Translation reserve Total equity premium capital reserve earnings owners of the interests parent Balance as at Jan 1 2021 1,241,758 4,639 44 9,548 488,255 1,744,244 45 1,744,289 Profit or loss and other comprehensive income Net profit - - - - 15,042 15,042 1 15,043 Other comprehensive income - - 16 - - 16 - 16 Comprehensive income for period - - 16 - 15,042 15,058 1 15,059 Other ------503,29 1,759,30 1,759,34 Balance as at Mar 31 2021 (unaudited) 1,241,758 4,639 60 9,548 7 2 46 8

Notes to the interim condensed consolidated financial statements are an integral part thereof.

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Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed consolidated financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise)

Interim condensed consolidated statement of changes in equity (continued) for the three months ended Mar 31 2020 Equity attributable to Retained owners of the Non-controlling Share capital Share premium Translation reserve earnings parent interests Total equity As at Jan 1 2020 750,000 - 12 383,741 1,133,753 203,373 1,337,126 Profit or loss and other comprehensive income Net profit - - - 13,850 13,850 8,720 22,570 Other comprehensive income - - 38 - 38 - 38 Comprehensive income for period - - 38 13,850 13,888 8,720 22,608 Transactions with owners, recognised directly in equity Issue of ordinary shares 491,758 4,639 - - 496,397 - 496,397 Other - - - (606) (606) - (606) Balance as at Mar 31 2020 (unaudited) 1,241,758 4,639 50 396,985 1,643,432 212,093 1,855,525

Notes to the interim condensed consolidated financial statements are an integral part thereof.

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Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed consolidated financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise)

Interim condensed consolidated statement of cash flows for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited Cash flows from operating activities Profit before tax 20,660 29,555 Adjustments for: Amortisation and depreciation 34,159 33,593 (Gain) on investing activities (1,014) (1,335)

Share of (profit)/loss of equity-accounted investees 25,462 (3,534) Interest, foreign exchange gains/(losses), estimated loss on credit suretyships (6,153) 11,006 Net change in fair value of financial assets at fair value through profit or loss (11,900) (32,978)

Increase in trade and other receivables (109,113) (186,015) (Increase)/Decrease in inventories and property rights 23,299 (40,011)

Decrease in trade and other payables (22,652) (30,075) Decrease in provisions* (43) (23) Decrease in employee benefit obligations* - (81) Increase/(Decrease) in grants* (456) 71,686 Reverse factoring adjustment 116,625 100,575 Other adjustments (518) (524) Income taxes refunded (paid) (208) (530) Net cash from operating activities 68,148 (48,691) * In the consolidated report for the first quarter of 2020, disclosed in the net amount under a single item.

Notes to the interim condensed consolidated financial statements are an integral part thereof.

Grupa Azoty Zakłady Chemiczne Police Group Page 14 of 76 Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed consolidated financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise)

Interim condensed consolidated statement of cash flows (continued) for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited Cash flows from investing activities Proceeds from sale of property, plant and equipment, intangible assets and investment property 1,196 231 Payments for acquisition of property, plant and equipment, intangible assets and investment property (46,768) (449,725) Acquisition of financial assets (1,604) - Outflows on lease of investment property (334) (269) Outflows on purchase of derivative instruments* - (22,128) Other cash provided by/(used in) investing activities (25) 2 Net cash from investing activities (47,535) (471,889) Cash flows from financing activities Net proceeds from issue of share capital** - 500,861 Proceeds from borrowings 124,252 172,358 Repayment of borrowings (14,838) (144,324) Interest paid (5,256) (6,178) Payment of lease liabilities (2,025) (953) Payments under reverse factoring (137,321) (184,523) Other cash provided by financing activities 656 795 Net cash from financing activities (34,532) 338,036 Total net cash flows (13,919) (182,544)

Cash and cash equivalents at beginning of period 64,332 445,295 Effect of exchange rate movements on cash held (126) 698 Cash and cash equivalents at end of period, including: 50,287 263,449 restricted cash 727 56,759

* Option premium paid by Grupa Azoty Polyolefins S.A. for transactions hedging future cash flows related to the Polimery Police project. ** Proceeds from issue of shares by Grupa Azoty Zakłady Chemiczne Police S.A. (the Parent).

Notes to the interim condensed consolidated financial statements are an integral part thereof.

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Notes to the interim condensed consolidated financial statements

1. The Group

1.1. Organisation of the Grupa Azoty Zakłady Chemiczne Police Group The Grupa Azoty Zakłady Chemiczne Police Group (the “Grupa Azoty POLICE Group” or the “Group”) comprises Grupa Azoty Zakłady Chemiczne Police Spółka Akcyjna (the “Parent”) and its subsidiaries. The Parent’s principal place of business is located in Police and its registered office address is ul. Kuźnicka 1, 72-010 Police, Poland.

The Parent is incorporated in Poland as a joint stock company (spółka akcyjna).

The principal places of business of the Grupa Azoty POLICE Group companies are the cities/towns of their respective registered offices. The Parent was established on December 14th 1995 by Notarial Deed Rep. A No. 20142, following transformation of the state enterprise into a state-stock company (commercialisation). The Parent is registered with the District Court for Szczecin-Centrum in Szczecin, 13th Commercial Division of the National Court Register, under No. KRS 0000015501. The Parent has been assigned REGON (industry identification) No. 810822270 and NIP (tax identification) No. 851-02-05-573, as well as BDO (Database on Products and Packaging, and on Waste Management) No. 000016847. The Parent and the other companies comprising the Grupa Azoty Zakłady Chemiczne Police Group (the “Grupa Azoty POLICE Group” or the “Group”) were established for indefinite time. The Parent’s principal business includes in particular: • manufacture and sale of chemical fertilizers, • manufacture and sale of titanium white and other chemicals, • generation, transmission and distribution of electricity. The Grupa Azoty Zakłady Chemiczne Police Group is part of the Grupa Azoty Group, whose parent is Grupa Azoty S.A.

1.2. Composition of the Group As at March 31st 2021, the Grupa Azoty Zakłady Chemiczne Police Group comprised Grupa Azoty Zakłady Chemiczne Police S.A. and: • five subsidiaries (in which Grupa Azoty Zakłady Chemiczne Police S.A. held equity interests above 50%), including one company in liquidation, • three associates (in which the Parent held equity interests of less than 50% but more than 20%), including one company in liquidation bankruptcy, • one related entity (in which the Parent held an equity interest below 20%).

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Structure of the Grupa Azoty Zakłady Chemiczne Police Group as at March 31st 2021

Organisational and equity ties As at March 31st 2021, the Company’s percentage shares in the total voting rights at its subsidiaries and associates were equal to its respective equity interests in these companies (with the exception of PROZAP Sp. z o.o.).

1.3. Composition of the Parent’s Management Board and Supervisory Board

Composition of the Parent’s Management Board as at January 1st 2021: • Wojciech Wardacki, Ph.D. – President of the Management Board of the eighth joint term of office, appointed by Supervisory Board Resolution No. 223/VII/18 of May 30th 2018; on the Management Board since April 7th 2016; • Tomasz Panas – Vice President of the Management Board of the eighth joint term of office, appointed by Supervisory Board Resolution No. 225/VII/18 of May 30th 2018; on the Management Board since April 7th 2016; • Mariusz Kądziołka – Vice President of the Management Board of the eighth joint term of office, appointed by Supervisory Board Resolution No. 102/VIII/20 of May 28th 2020, on the Management Board since July 3rd 2020. • Anna Tarocińska – Member of the Management Board of the eighth joint term of office, elected by the Parent’s employees and appointed by Supervisory Board Resolution No. 226/VII/18 of May 30th 2018; on the Management Board since March 3rd 2017. On July 20th 2020, the Supervisory Board suspended Anna Tarocińska as Member of the Management Board; see Current Report No. 44/2020 of July 20th 2020.

On April 30th 2021, the eighth term of office of the Management Board expired and the Supervisory Board appointed a new Management Board of the ninth term of office.

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As at the date of authorisation of these interim condensed consolidated financial statements for issue, the composition of the Management Board of the new ninth term of office was as follows: • Mariusz Grab – President of the Management Board of the ninth joint term of office, appointed by Supervisory Board Resolution No. 216/VIII/21 of April 30th 2021, • Michał Siewierski – Vice President of the Management Board of the ninth joint term of office, appointed by Supervisory Board Resolution No. 217/VIII/21 of April 30th 2021, • Anna Tarocińska – Member of the Management Board of the ninth joint term of office, elected by the Parent’s employees and appointed by Supervisory Board Resolution No. 215/VIII/21 of April 30th 2021.

Composition of the Supervisory Board of the Parent as at January 1st 2021: • Mirosław Kozłowski – Chairman of the Supervisory Board of the eighth joint term of office – Representative of the Ministry of State Treasury, appointed on June 25th 2019 (appointed as Chairman on August 24th 2020); • Paweł Bakun – Deputy Chairman of the Supervisory Board of the eighth joint term of office, appointed by Resolution No. 5 of the Parent’s Extraordinary General Meeting of August 24th 2020; • Bożena Licht – Secretary of the Supervisory Board of the eighth joint term of office, appointed to the Supervisory Board by Resolution No. 19 of the Parent’s Annual General Meeting of June 25th 2019 (appointed Secretary on July 2nd 2019); • Agnieszka Dąbrowska − Member of the Supervisory Board of the eighth joint term of office, appointed by Resolution No. 20 of the Parent’s Annual General Meeting of June 25th 2019; • Iwona Wojnowska − Member of the Supervisory Board of the eighth joint term of office, elected by the Parent’s employees and appointed by Resolution No. 21 of the Parent’s Annual General Meeting of June 25th 2019; • Andrzej Rogowski − Member of the Supervisory Board of the eighth joint term of office, elected by the Parent’s employees and appointed by Resolution No. 22 of the Parent’s Annual General Meeting of June 25th 2019.

As at the date of authorisation of these interim condensed consolidated financial statements for issue, the composition of the Supervisory Board was as follows: • Krzysztof Kozłowski – Chairman of the Supervisory Board of the eighth joint term of office, appointed to the Supervisory Board on April 10th 2021, as notified by the Minister of State Assets (appointed Chairman on May 11th 2021); • Paweł Bakun – Deputy Chairman of the Supervisory Board of the eighth joint term of office, appointed by Resolution No. 5 of the Extraordinary General Meeting of August 24th 2020 (appointed Deputy Chairman on the same day); • Bożena Licht – Secretary of the Supervisory Board of the eighth joint term of office, appointed to the Supervisory Board by Resolution No. 19 of the Parent’s Annual General Meeting of June 25th 2019 (appointed Secretary on July 2nd 2019); • Agnieszka Dąbrowska − Member of the Supervisory Board of the eighth joint term of office, appointed by Resolution No. 20 of the Parent’s Annual General Meeting of June 25th 2019; • Iwona Wojnowska − Member of the Supervisory Board of the eighth joint term of office, elected by the employees and appointed by Resolution No. 21 of the Parent’s Annual General Meeting of June 25th 2019; • Andrzej Rogowski − Member of the Supervisory Board of the eighth joint term of office, elected by the employees and appointed by Resolution No. 22 of the Parent’s Annual General Meeting of June 25th 2019.

Composition of the Audit Committee as at January 1st 2021: • Paweł Bakun – Chairman of the Audit Committee, appointed by Supervisory Board Resolution No. 122/VIII/20 of August 24th 2020; • Agnieszka Dąbrowska – Member of the Audit Committee, appointed by Supervisory Board Resolution No. 4/VIII/19 of July 2nd 2019; • Mirosław Kozłowski – Member of the Audit Committee, appointed by Supervisory Board Resolution No. 5/VIII/19 of July 2nd 2019; • Andrzej Rogowski – Member of the Audit Committee, appointed by Supervisory Board Resolution No. 6/VIII/19 of July 2nd 2019.

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As at the date of authorisation of these interim condensed consolidated financial statements for issue, the composition of the Audit Committee was as follows: • Paweł Bakun – Chairman of the Audit Committee, appointed by Supervisory Board Resolution No. 122/VIII/20 of August 24th 2020; • Agnieszka Dąbrowska – Member of the Audit Committee, appointed by Supervisory Board Resolution No. 4/VIII/19 of July 2nd 2019; • Andrzej Rogowski – Member of the Audit Committee, appointed by Supervisory Board Resolution No. 6/VIII/19 of July 2nd 2019.

2. Significant events in the three months ended March 31st 2021 and until the authorisation date

2.1 Fulfilment of conditions for the financial close by Grupa Azoty Polyolefins S.A. On February 25th 2021, the Company’s associate Grupa Azoty Polyolefins S.A. was notified by Bank Polska Kasa Opieki S.A., as the Facility Agent, of the receipt (in form and content satisfactory to the Lenders) of all necessary documents and/or information constituting conditions precedent to Financial Close under the Credit Facilities Agreement (as defined in Current Report No. 37/2020 of May 31st 2020), as amended. Therefore, the Financial Close was achieved, which enabled Grupa Azoty Polyolefins S.A. to apply for disbursement of funds under the credit facilities. The first payment under the PLN-denominated VAT credit facility was made in March 2021, while the EUR- and USD-denominated term loans were disbursed in April 2021 (an event after the reporting date). For information on the Financial Close, see Current Report No. 2/2021 of February 25th 2021.

2.2 Impact of COVID-19 pandemic on the Company’s and Group’s business In the three months ended March 31st 2021, the Group did not report any material adverse effects of the COVID-19 pandemic on its financial results. For a detailed description, see Section 2.1 of the ‘Management’s discussion and analysis’ in this consolidated quarterly report.

3. Policies applied in the preparation of the interim condensed consolidated financial statements

3.1. Statement of compliance and general policies These interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as endorsed by the European Union, and in accordance with the Minister of Finance's Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated April 20th 2018 (Dz.U. of 2018, item 757). These interim condensed consolidated financial statements of the Group present the Group’s statement of financial position as at March 31st 2021 and December 31st 2020 and the statement of profit or loss and other comprehensive income for the three months ended March 31st 2021 and March 31st 2020. The statement of cash flows and the statement of changes in equity are presented for the three months ended March 31st 2021 and March 31st 2020. These interim condensed consolidated financial statements of the Grupa Azoty POLICE Group for the three months ended March 31st 2021 were authorised for issue by the Parent’s Management Board on May 12th 2021. These interim condensed consolidated financial statements do not include all the information and disclosures required to be given or made in full-year financial statements and should be read in conjunction with the Group’s consolidated financial statements for the year ended December 31st 2020, authorised for issue on April 13th 2021. The interim profit/loss may not fully reflect the realisable profit/loss for the full financial year. All figures in these interim condensed consolidated financial statements are presented in thousands of złoty.

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These interim condensed consolidated financial statements were prepared under the assumption that the Group companies would continue as going concerns in the foreseeable future, with the exception of the subsidiary in liquidation (Grupa Azoty Africa S.A. w likwidacji). As at the date of authorisation of these interim condensed consolidated financial statements, no circumstances were identified which would indicate that the Group companies may be unable to continue as going concerns, with the exception of the subsidiary mentioned above.

3.2. Accounting policies and computation methods a) Applied accounting policies, changes in International Financial Reporting Standards The accounting policies applied to prepare these interim condensed financial statements are consistent with the policies applied to draw up the Parent’s full-year consolidated financial statements for the year ended December 31st 2020, except for the application of new or amended standards and interpretations effective for annual periods beginning on or after January 1st 2021. The amendments to the IFRSs presented below have been applied in these interim condensed financial statements in accordance with their effective dates. However, they had no material effect on the presented financial information: • Interest Rate Benchmark Reform Phase II – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 The amendments to these standards were issued on August 27th 2020 to complement the first phase of reporting amendments resulting from the reform of interbank reference rates of September 2019. The amendments are effective for annual periods beginning on or after January 1st 2021. Phase II amendments address issues that might affect financial reporting, e.g. relating to valuation of financial instruments and lease liabilities, when an existing interest rate benchmark is replaced with a new benchmark (i.e. replacement issues). The Group will apply the amended standards as of January 1st 2021. As at the date of these financial statements, it is not possible to reliably estimate the effects of the application of the amended standards. b) New standards and interpretations which have been issued but are not yet effective The following standards and interpretations have been issued by the International Accounting Standards Board, but are not yet effective: • IFRS 17 Insurance Contracts (issued on May 18th 2017 and amended on June 25th 2020) – effective for annual periods beginning on or after January 1st 2023. Early application is permitted as long as IFRS 15 and IFRS 9 are also applied. The standard supersedes earlier regulations on insurance contracts (IFRS 4). On June 25th 2020, IFRS 4 was also amended to defer the effective date of IFRS 9 Financial Instruments for insurers until January 1st 2023. The Group will apply the new standard as of January 1st 2023. As at the date of these financial statements, it is not possible to reliably estimate the effects of the application of the new standard. • Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (issued on January 23rd 2020 and modified in July 2020) – effective for periods beginning on or after January 1st 2023. The amendment redefines the criteria for classifying liabilities as current. The amendment may affect the presentation of liabilities and their reclassification between current and non-current. The Group will apply the amended standard as of January 1st 2023. As at the date of these financial statements, it is not possible to reliably estimate the effects of the application of the new standard. • Amendments to IFRS 3, IAS 16, IAS 37 and Annual Improvements to IFRS Standards 2018–2020. The amendments were issued on May 14th 2020, and are effective for annual periods beginning on or after January 1st 2022. One of the amendments prohibits deducting from the cost of property, plant and equipment ofany proceeds from selling items produced while the entity is developing/preparing the asset for its intended use. The Group will apply the amended standards as of January 1st 2022. As at the date of these financial statements, it is not possible to reliably estimate the effects of the application of the amended standards. • Amendments to IAS 1 Disclosure of Accounting Policies and IAS 8 Definition of Accounting Estimates. The amendments were issued on February 12th 2021, and are effective for annual periods beginning on or after January 1st 2023. The purpose of these amendments is to place

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greater emphasis on the disclosure of material accounting policies and to clarify how companies should distinguish between changes in accounting policies and changes in accounting estimates. The Group will apply the amended standards as of January 1st 2023. As at the date of these financial statements, it is not possible to reliably estimate the effects of the application of the amended standards. The IFRSs as endorsed by the EU do not differ materially from the regulation International Accounting Standards Board (IASB), save for the following standards, interpretations and amendments thereto, which were not yet adopted by EU Member States as at the date of authorisation of these financial statements for issue: • IFRS 17 Insurance Contracts issued on May 18th 2017, as amended on June 25th 2020, • Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities as current and non-current, issued on January 23rd 2020, as amended on July 15th 2020, • Amendments to IFRS 3, IAS 16, IAS 37 and Annual Improvements to IFRS Standards 2018–2020, issued on May 14th 2020, • Amendments to IAS 1 Disclosure Initiative and IAS 8 Definition of Accounting Estimates, issued on February 12th 2021. The Group will apply the amended standards as of their effective dates. As at the date of these financial statements, it is not possible to reliably estimate the effects of the application of the amended standards. c) Judgements and estimates The preparation of interim condensed consolidated financial statements requires the Management Board to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and underlying assumptions are based on historical experience and other factors reasonable in the circumstances and are the basis for determining the carrying amounts of assets and liabilities that do not result directly from other sources. Actual results may differ from these estimates. Estimates and the underlying assumptions are reviewed on an ongoing basis. Changes to accounting estimates are recognised in the period in which the estimates are revised or in current and any future periods affected. The key judgements and estimates made by the Management Board in preparing these interim condensed consolidated financial statements were the same as those made in preparing the consolidated financial statements for the financial year ended December 31st 2020.

4. Selected supplementary and explanatory notes 4.1. Explanatory notes Business segment reporting Operating segments The Group identifies operating segments based on internal reports. The operating results of each segment are reviewed on a regular basis by the Parent’s chief operating decision maker, who decides about the allocation of resources to different segments and analyses their results. Separate financial information prepared for each segment is available.

The Group identifies the following operating segments: • Fertilizers Segment (the Fertilizers Business Unit and the Nitro Business Unit), • Pigments Segment (the Pigments Business Unit), • Polymers Segment (Grupa Azoty Polyolefins S.A. implementing the Polimery Police project), and Other Activities, which include power generation, port services, wastewater disposal, waste storage, laboratory services, property rental, and other activities which cannot be allocated to any of the segments specified above. As a result of the issue of shares and changes in the shareholding structure of Grupa Azoty Polyolefins S.A., since November 2020 the Parent’s interest in that company’s share capital has been 34.41%. Therefore, only data for the full consolidation period is presented under the Polymers Segment. Subsidiaries are presented under Other Activities.

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Under the operating segments' data, the Group presents administrative, selling and distribution expenses and other income and expenses allocated to each segment. Performance of each of the segments is discussed in the note ‘Operating segments’. Each segment’s performance is measured based on its revenue, EBIT and EBITDA. The Group’s financing (including finance costs and finance income) and income tax are monitored at the level of individual Group companies and are not allocated to the segments. Intersegment sales and transfers within the Parent are accounted for based on production costs. Geographical areas The Group identifies the following geographical areas of its operations (countries or regions): • Poland • Germany • Other EU countries • South American countries • Other countries. If information is presented by geographical areas, revenue is determined based on the country of destination, i.e. the country where the product will be sold (irrespective of the location of the wholesaler, whose operations frequently have a global reach). Assets allocated to a geographical area are identified on the basis of their geographical location.

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Operating segments Revenue, expenses and financial result of operating segments for the three months ended March 31st 2021 (unaudited) Other Fertilizers Pigments Polymers Activities Total External revenue 602,743 95,853 - 19,550 718,146 Intersegment revenue 81,242 (822) - 262,094 342,514 Total revenue 683,985 95,031 - 281,644 1,060,660 Operating expenses, including (-): (672,673) (85,063) - (282,983) (1,040,719) Selling and distribution expenses (-) (29,341) (2,408) - - (31,749) Administrative expenses (-) (28,574) (4,614) - (5,027) (38,215) Other income 555 75 - 7,331 7,961 Other expenses (-) (84) (89) - (677) (850) Segment’s EBIT* 11,783 9,954 - 5,315 27,052 Finance income x x x x 22,056 Finance costs (-) x x x x (2,986)

Share of profit of equity-accounted investees x x x x (25,462) Profit/(loss) before tax x x x x 20,660 Income tax x x x x (5,617) Net profit/(loss) x x x x 15,043 EBIT* 11,783 9,954 - 5,315 27,052 Amortisation and depreciation 26,240 6,276 - 1,643 34,159 EBITDA** 38,023 16,230 - 6,958 61,211

* EBIT is calculated as operating profit/(loss) as disclosed in the statement of profit or loss. ** EBITDA is calculated as operating profit (loss) before depreciation and amortisation (this metric is not defined in the IFRSs and the method of its calculation may vary from company to company).

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Revenue, expenses and financial result of operating segments for the three months ended March 31st 2020 (unaudited) Other Fertilizers Pigments Polymers Activities Total External revenue 540,926 93,728 100 13,470 648,224 Intersegment revenue 62,519 (539) 40 248,092 310,112 Total revenue 603,445 93,189 140 261,562 958,336 Operating expenses, including (-): (600,147) (81,709) (4,539) (262,958) (949,353) Selling and distribution expenses (-) (28,150) (2,433) - - (30,583) Administrative expenses (-) (30,867) (5,105) (4,457) (4,681) (45,110) Other income 335 92 201 994 1,622 Other expenses (-) (421) (7) (11) (1,003) (1,442) Segment’s EBIT* 3,212 11,565 (4,209) (1,405) 9,163 Finance income x x x x 36,579 Finance costs (-) x x x x (19,721) Share of profit of equity-accounted investees x x x x 3,534 Profit before tax x x x x 29,555 Income tax x x x x (6,985) Net profit x x x x 22,570 EBIT* 3,212 11,565 (4,209) (1,405) 9,163 Amortisation and depreciation 25,600 6,370 111 1,512 33,593 EBITDA** 28,812 17,935 (4,098) 107 42,756

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Operating segments’ assets and liabilities as at March 31st 2021

Fertilizers Pigments Polymers Other Activities Total Segment’s assets 1,785,388 405,478 - 129,387 2,320,253 Unallocated assets x x x x 561,937 Investments in subordinated entities - - - 580,571 580,571 Total assets 1,785,388 405,478 - 709,958 3,462,761 Segment’s liabilities 785,541 115,739 - 122,219 1,023,499 Unallocated liabilities x x x x 679,914 Total liabilities 785,541 115,739 - 122,219 1,703,413

Operating segments’ assets and liabilities as at December 31st 2020

Fertilizers Pigments Polymers Other Activities Total Segment’s assets 1,745,417 386,884 - 114,640 2,246,941 Unallocated assets x x x x 555,889 Investments in subordinated entities - - - 606,033 606,033 Total assets 1,745,417 386,884 - 720,673 3,408,863 Segment’s liabilities 875,636 117,559 - 113,089 1,106,284 Unallocated liabilities x x x x 558,290 Total liabilities 875,636 117,559 - 113,089 1,664,574

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Other segmental information for the three months ended March 31st 2021 Other Fertilizers Pigments Polymers Activities Total Expenditure on property, plant and equipment 22,145 3,104 - (1,734) 23,515 Expenditure on intangible assets 604 125 - 11 740 Total expenditure 22,749 3,229 - (1,723) 24,255 Segment’s depreciation and amortisation 26,240 6,276 - 1,643 34,159 Total depreciation and amortisation 26,240 6,276 - 1,643 34,159

Other segmental information for the three months ended March 31st 2020 Other Fertilizers Pigments Polymers Activities Total Expenditure on property, plant and equipment 23,445 6,642 41,184 580 71,851 Expenditure on intangible assets - - 117 257 374 Total expenditure 23,445 6,642 41,301 837 72,225 Segment’s depreciation and amortisation 25,600 6,370 111 1,512 33,593 Total depreciation and amortisation 25,600 6,370 111 1,512 33,593

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Geographical areas Revenue for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited Poland 449,749 380,763 Germany 84,830 94,489 Other EU countries 137,421 146,608 South America 1,303 - Other countries 44,843 26,364 Total 718,146 648,224 No single customer accounted for more than 10% of the Group’s revenue in the first quarter of 2021 or first quarter of 2020.

Note 1. Property, plant and equipment, right-of-use assets and intangible assets as at as at

Mar 31 2021 Dec 31 2020 unaudited audited Property, plant and equipment

Land 1,947 1,918 Buildings and structures 491,160 496,000 Plant and equipment 779,846 799,652 Vehicles 7,976 8,293 Other property, plant and equipment 12,878 12,937 Property, plant and equipment under construction 164,278 147,598 1,458,085 1,466,398 Right-of-use assets 66,830 67,315 Intangible assets 16,660 16,495

Impairment test As at March 31st 2021, at least one of the triggers referred to in paragraph 12d of IAS 36 Impairment of Assets occurred – the carrying amount of the Parent’s net assets was higher than its market capitalisation. It was also determined that as at March 31st 2021, relative to the date of the most recent asset impairment test, performed as at December 31st 2020, there were no such material and permanent changes in the Parent’s internal or external position that could lead to significant changes in the estimated recoverable amounts of individual CGUs, which would in turn make it necessary to revise impairment losses. It was found that the key assumptions of projected future cash flows had not changed significantly. In the first quarter of 2021, the COVID-19 pandemic caused no major disruption to the Parent’s operations. Grupa Azoty Polyolefins S.A., responsible for the implementation of the strategic capex project Polimery Police, monitors the projected profitability of its investment using a financial model for the project developed in cooperation with reputable advisory firms. The key assumptions for the financial model, including technological assumptions and market forecasts, are based on independent studies, such as technical documentation provided by reputable engineering companies (including technology licensors) and reports prepared by market advisers. Grupa Azoty Polyolefins S.A. reviews the need to update the key model assumptions and parameters on an ongoing basis. February 25th 2021 saw the financial closing, for the purpose of which the Company provided an updated financial model to the financing institutions. The scope of the updates was primarily related to the effect of transactions hedging the currency and interest rate risks.

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Based on the updated, positive findings of the economic feasibility study resulting from the financial model referred to above, which Grupa Azoty Polyolefins S.A. uses as a recoverable amount estimate for the purposes of asset impairment testing, the determination that assets of the Polimery Police project were not impaired was upheld as at March 31st 2021.

Note 2. Financing structure Carrying amount as at as at Mar 31 2021 Dec 31 2020 unaudited audited Bank borrowings 123,571 59,211 Non-bank borrowings 491,289 446,388 614,860 505,599 including recognised as Long-term 419,515 447,223 Short-term 195,345 58,376 614,860 505,599

The increase in current liabilities under borrowings in the first quarter of 2021 was attributable to repayment of deferred liabilities under reverse factoring.

Note 3. Derivatives under Grupa Azoty Polyolefins shareholder agreement The value of the right and obligation to repurchase Grupa Azoty Polyolefins shares from non- controlling shareholders, i.e. the call and put options as at March 31st 2021 was as follows:

Grupa Azoty Total Parent’s share Instrument S.A.’s share valuation (53%) (47%)

Call option (financial asset) 111,066 58,865 52,201 Put option (financial liability) 35,062 18,583 16,479

The effect of measurement of the financial instruments referred to above on the Parent’s profit before tax in the three months ended March 31st 2021 was PLN 12,877 thousand.

For detailed information on the transactions, see Note 30.5 on derivative financial instruments in the consolidated financial statements of the Grupa Azoty POLICE Group for the 12 months ended December 31st 2020.

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Note 4. Contingent liabilities, contingent assets, sureties and guarantees As at March 31st 2021, the Group did not identify any reportable contingent liabilities or contingent assets. As at March 31st 2021, the Parent granted sureties with respect to the following credit facility agreements and contracts:

As at Mar 31 As at Dec 31 Type/ Details Date 2021 2020 Issuer (PLN ‘000) (PLN ‘000) Surety for syndicated credit Revolving credit facility Jun 29 2018 1,200,000 1,200,000 facility agreement Surety for PKO BP credit facility Overdraft facility Jun 29 2018 124,000 124,000 (overdraft) agreement Surety for PKO BP credit facility Multi-purpose credit facility Jun 29 2018 96,000 96,000 (MPCF) agreement

Guarantee for EIB credit facility Credit facility agreement May 28 2015 220,000 220,000

Guarantee for EBRD credit Credit facility agreement May 28 2015 60,000 60,000 facility

Guarantee for EIB credit facility Credit facility agreement Jan 25 2018 270,297* 267,658*

Guarantee for EBRD credit Credit facility agreement Jul 26 2018 200,000 200,000 facility

*Surety amount: EUR 58,000 thousand. 2,170,297 2,167,658

As at March 31st 2021, none of the subsidiaries had any sureties issued to other entities.

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Guarantees provided to the Parent by Bank PKO BP S.A. under credit limits: As at Mar 31 As at Dec 31 Beneficiary Details Issue date 2021 2020 (PLN ‘000) (PLN ‘000)

Guarantor’s obligation as general security in STATE TREASURY Mar 20 2018 1,000 1,000 customs transactions (...)

Payment guarantee for electricity Nov 15 2017 PSE S.A. 1,300 1,300 transmission contract (annex)

PGE S.A. Performance bond in open tender contract Feb 21 2019 - 94

Guarantor’s obligation as general security in May 13 STATE TREASURY 250 250 customs transactions (...) temporary storage 2019 STATE TREASURY (Chief Inspectorate of Performance bond for iron sulfate (waste) Jul 29 2019 1,182 1,182 Environmental supply contract Protection) STATE TREASURY (Chief Inspectorate of Performance bond for iron sulfate (waste) Jul 29 2019 1,697 1,697 Environmental supply contract Protection) STATE TREASURY (Chief Inspectorate of Performance bond for iron sulfate (waste) Nov 25 2019 3,444 3,444 Environmental supply contract Protection)

PGE S.A. Performance bond in open tender contract Mar 25 2020 31 31

PGE S.A. Performance bond in open tender contract Mar 25 2020 42 42

STATE TREASURY (Chief Inspectorate of Performance bond for iron sulfate (waste) Dec 20 2020 2,362 2,362 Environmental supply contract (annex) Protection) STATE TREASURY (Chief Inspectorate of Performance bond for iron sulfate (waste) Dec 20 2020 3,464 3,464 Environmental supply contract (annex) Protection)

Payment guarantee for electricity PSE S.A. Nov 6 2020 1,500 1,500 transmission contract

STATE TREASURY (Chief Inspectorate of Performance bond for iron sulfate (waste) Mar 18 2021 5,132 - Environmental supply contract Protection)

PGE S.A. Performance bond in open tender contract Mar 31 2021 65 -

PGE S.A. Performance bond in open tender contract Mar 31 2021 92 -

21,561 16,366

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Moreover, in connection with the Credit Facilities Agreement, the Parent and Grupa Azoty S.A. entered into a support loan provision guarantee agreement with Grupa Azoty Polyolefins S.A. and Bank Polska Kasa Opieki S.A. (acting as the facility agent and security agent) for up to EUR 105m in the form of a subordinated loan, the main objective of which is to cover a potential liquidity deficit, construction cost overruns, operating costs and debt service costs in the operation phase.

Note 5. Accounting estimates and assumptions Changes in impairment loss on property, plant and equipment for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited At beginning of period 199,733 212,468 Used (-) (47) (53) At end of period 199,686 212,415 Changes in inventory write-downs for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited At beginning of period 8,834 8,755 Recognised 107 13 Reversed (-) - (13) Used (-) (102) (44) At end of period 8,839 8,711

Changes in impairment loss on receivables for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited At beginning of period 22,272 32,032 Recognised 18 285 Reversed (-) (47) (109) Used (-) (17) (1) At end of period 22,226 32,207

4.2. Related parties Material related-party transactions: a) Material related-party transactions executed by the Group on non-arm’s length terms In the three months ended March 31st 2021, the Group did not execute any related-party transactions on non-arm’s length terms. b) Transactions with members of the Management Board and the Supervisory Board or with their spouses, siblings, ascendants, descendants, or other persons closely related to them In the three months ended March 31st 2021, the Group did not grant any advances, loans, guarantees or sureties to management or supervisory personnel or persons closely related to them, nor did it enter into any agreements with them to provide any services to the Group. c) Material related-party transactions executed by the Group

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Transactions with the following entities are considered related-party transactions of the Grupa Azoty Police Group: companies of the Grupa Azoty Group, companies of the Grupa Azoty ZAK Group, companies of the Grupa Azoty PUŁAWY Group, companies of the Grupa Azoty PKCh Group, and with the associated and non-consolidated companies of the Grupa Azoty Police Group.

The most important transactions executed by the Grupa Azoty POLICE Group with its related parties in the period January–March 2021 were the following: • sale of liquid ammonia and iron sulfate to Grupa Azoty S.A. for PLN 31,607 thousand, • sale of urea and fertilizers to Agrochem Puławy Sp. z o.o. for PLN 7,099 thousand, • sale of liquid ammonia to Grupa Azoty Zakłady Azotowe Kędzierzyn for PLN 9,234 thousand, • sale of plots of land and capital expenditure on a railway track upgrade to Grupa Azoty Polyolefins S.A. for a total of PLN 6,513 thousand, • sale of liquid ammonia to Grupa Azoty Zakłady Azotowe Puławy S.A. for PLN 1,567 thousand, • sale of fertilizers to Compo Expert Hellas for PLN 12,578 thousand and purchase of services for PLN 865 thousand, • purchase of marketing and IT services from Grupa Azoty S.A. for PLN 3,620 thousand, • purchase from Grupa Azoty Zakłady Azotowe Puławy S.A. of ammonium sulfate and ammonia for PLN 7,386 thousand and marketing services for PLN 821 thousand, • purchase of liquid sulfur from Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. for PLN 10,988 thousand, • purchase from Grupa Azoty Koltar Sp. z o.o. of railway transport handling services for PLN 2,438 thousand and investment services for PLN 603 thousand. Further: a) In accordance with the intragroup financing agreement of April 23rd 2015, Grupa Azoty S.A. advanced the following loans to the Parent: • on September 14th 2015, a PLN 60,000 thousand loan to finance the share capital of the subsidiary Grupa Azoty Polyolefins S.A. As at March 31st 2021, the amount outstanding under the agreement was PLN 45,000 thousand, • on July 6th 2020, a PLN 298,000 thousand loan to finance the Polimery Police project. As at March 31st 2021, the amount outstanding under the agreement was PLN 298,000 thousand, • on June 1st 2020, a PLN 51,420 thousand loan to refinance the special-purpose loan from the National Fund for Environment and Water Management of Warsaw. As at March 31st 2021, the amount outstanding under the agreement was PLN 41,387 thousand. b) The Parent granted the following loans to Supra Agrochemia Sp. z o.o.: • On March 14th 2014, a PLN 3,600 thousand loan to finance the subsidiary’s capital expenditure. As at March 31st 2021, the amount outstanding under the loan was PLN 3,600 thousand. The loan is to be repaid by December 31st 2021. • On December 31st 2014, a PLN 10,000 thousand loan to finance the subsidiary’s capital expenditure. As at March 31st 2021, the amount outstanding under the loan was PLN 10,000 thousand. The loan is to be repaid by December 31st 2021. • On June 28th 2018, a PLN 1,000 thousand loan to secure the funding required to complete a share disposal process. As at March 31st 2021, the amount outstanding under the loan was PLN 1,000 thousand. The loan is to be repaid by December 31st 2021. • On March 30th 2020, a PLN 468 thousand loan to pay charges for perpetual usufruct rights to land for 2020. As at March 31st 2021, the amount outstanding under the loan was PLN 468 thousand. The loan is to be repaid by December 31st 2021.

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4.3. Events after the reporting period that could affect financial results in the future There were no reportable events subsequent to the end of the reporting period that could potentially affect the Group's future financial performance.

4.4. Dividends On April 26th 2021, the Annual General Meeting of KEMIPOL Sp. z o.o. passed a resolution to distribute dividend from the profit generated in 2020. Grupa Azoty Zakłady Chemiczne Police S.A. is to receive PLN 14,212 thousand. The dividend will be paid by July 31st 2021.

4.5. Seasonality of operations Seasonality of the Parent's operations is seen mainly on the markets for mineral fertilizers and pigments. The Group’s subsidiaries are not affected by seasonality. Mineral fertilizers market The end of the first quarter and beginning of the second quarter of each year (March and April) as well as the third quarter of each year (August and September) are periods of increased activity in the agricultural sector, when demand for mineral fertilizers is high. On the Group's key markets (Poland and Europe), the periods of fertilizer purchases are the same. The seasonality of the fertilizers market is mitigated by various distribution and commercial efforts (including exports outside Europe), which ensure stable and continuous sale of fertilizers. Titanium white market In the Parent’s key markets (Poland and Europe), spring and summer (the second and third quarters) are the time of increased demand for titanium white, driven by stronger demand for paints and varnishes in the construction industry. Sales of titanium white usually decline during the winter season – in the fourth and first quarters of each year. Titanium white remains a seasonal product, but given its widespread application, demand for this product chiefly depends on general market conditions. Chemicals For other chemicals manufactured by the Parent (urea, AdBlue, Fespol), seasonality virtually does not occur or may occur to a limited extent and its effect on the Parent’s performance is insignificant.

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III. INTERIM CONDENSED SEPARATE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31ST 2021 PREPARED IN ACCORDANCE WITH IAS 34 INTERIM FINANCIAL REPORTING AS ENDORSED BY THE EUROPEAN UNION

Grupa Azoty Zakłady Chemiczne Police S.A. Interim condensed separate financial statements for the three months ended March 31st 2021 (all amounts in PLN ‘000 unless indicated otherwise)

Interim condensed separate statement of profit or loss and other comprehensive income for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited Profit or loss Revenue 711,579 644,694 Cost of sales (624,264) (562,654) Gross profit 87,315 82,040 Selling and distribution expenses (31,749) (30,583) Administrative expenses (33,188) (35,972) Other income 8,338 1,631 Other expenses (1,725) (2,044) Operating profit 28,991 15,072 Finance income 22,112 2,592 Finance costs (2,752) (16,181) Net finance income (costs) 19,360 (13,589) Profit before tax 48,351 1,483 Income tax (6,083) (615) Net profit 42,268 868 Comprehensive income for period 42,268 868 Earnings per share 0.34 0.01 0.34 0.01

Notes to the interim condensed separate financial statements form an integral part of the statements.

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Interim condensed separate statement of financial position as at as at

Mar 31 2021 Dec 31 2020 unaudited audited Assets Non-current assets Property, plant and equipment 1,477,651 1,486,053 Right-of-use assets 53,347 54,455 Investment property 27,810 27,810 Intangible assets 16,510 16,319 Shares 641,088 641,088 Other financial assets 463,231 445,612 Other receivables 160 470 Deferred tax assets 3,020 9,912 Total non-current assets 2,682,817 2,681,719 Current assets Inventories 275,212 355,514 Property rights 172,581 115,773 Other financial assets 15,915 15,815 Current tax assets 743 - Trade and other receivables 302,546 199,193 Cash and cash equivalents 20,674 44,289 Total current assets 787,671 730,584 Total assets 3,470,488 3,412,303

Notes to the interim condensed separate financial statements form an integral part of the statements.

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Interim condensed separate statement of financial position (continued) as at as at Mar 31 2021 Dec 31 2020 unaudited audited Equity and liabilities Equity Share capital 1,241,758 1,241,758 Share premium 4,639 4,639 Retained earnings 580,146 537,878 Total equity 1,826,543 1,784,275 Liabilities Borrowings 419,515 447,223 Lease liabilities 48,155 48,925 Other financial liabilities 18,583 21,469 Employee benefit obligations 71,503 71,503 Trade and other payables 3,018 2,981 Provisions 118,006 118,006 Grants 18,296 18,741 Total non-current liabilities 697,076 728,848 Borrowings 195,345 57,395 Derivative financial instruments 1,925 948 Lease liabilities 3,568 4,324 Other financial liabilities 117,841 140,143 Employee benefit obligations 11,991 11,991 Current tax liabilities - 4,623 Trade and other payables 610,925 674,471 Provisions 3,415 3,415 Grants 1,859 1,870 Total current liabilities 946,869 899,180 Total liabilities 1,643,945 1,628,028 Total equity and liabilities 3,470,488 3,412,303

Notes to the interim condensed separate financial statements form an integral part of the statements.

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Interim statement of changes in equity for the three months ended March 31st 2021 Share Retained Share capital premium earnings Total equity Balance as at Jan 1 2021 1,241,758 4,639 537,878 1,784,275 Profit or loss and other comprehensive income Net profit - - 42,268 42,268 Comprehensive income for period - - 42,268 42,268 Balance as at Mar 31 2021 (unaudited) 1,241,758 4,639 580,146 1,826,543

for the three months ended Mar 31 2020 Share Retained Share capital premium earnings Total equity As at Jan 1 2020 750,000 - 458,154 1,208,154 Profit or loss and other comprehensive income Net profit - - 868 868 Comprehensive income for period - - 868 868 Transactions with owners, recognised directly in equity Issue of ordinary shares 491,758 4,639 - 496,397 Balance as at Mar 31 2020 (unaudited) 1,241,758 4,639 459,022 1,705,419

Notes to the interim condensed separate financial statements form an integral part of the statements.

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Interim condensed separate statement of cash flows for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited Cash flows from operating activities Profit before tax 48,351 1,483 Adjustments for: Amortisation and depreciation 34,068 33,314 Gain on investing activities (1,346) (474) Interest, foreign exchange gains/(losses), estimated loss on credit suretyships (6,444) 11,072 (Gain)/loss on change in fair value of financial assets at fair value through profit or loss (11,900) 1,051

Increase in trade and other receivables (106,334) (87,955) (Increase)/Decrease in inventories and property rights 23,494 (38,425)

Decrease in trade and other payables (41,374) (71,104) Increase/(Decrease) in grants* (456) 71,686 Reverse factoring adjustment 116,625 100,575 Other adjustments (518) - Income tax refunded/(paid) - (528) Net cash from operating activities 54,166 20,695

* The name of the item was changed relative to the report for the first quarter of 2020.

Notes to the interim condensed separate financial statements form an integral part of the statements.

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Interim condensed separate statement of cash flows (continued) for the period for the period Jan 1 − Jan 1− Mar 31 2021 Mar 31 2020 unaudited unaudited Cash flows from investing activities Proceeds from sale of property, plant and equipment, intangible assets and investment property 1,192 43 Payments for acquisition of property, plant and equipment, intangible assets and investment property (46,502) (28,620) Inflow from lease of investment property 12 449 Loans advanced - (468) Other cash used in investing activities - (37) Net cash from investing activities (45,298) (28,633) Cash flows from financing activities Net share capital issue proceeds - 500,861 Proceeds from borrowings 124,252 40,085 Repayment of borrowings (13,857) (144,324) Interest paid (4,829) (5,685) Payment of lease liabilities (1,231) (463) Payments under reverse factoring (137,321) (184,523) Other cash provided by financing activities 656 795 Net cash from financing activities (32,330) 206,746 Total net cash flows (23,462) 198,808 Cash and cash equivalents at beginning of period 44,289 39,399 Effect of exchange rate movements on cash held (153) 635 Cash and cash equivalents at end of period, including: 20,674 238,842 restricted cash 727 56,759

Notes to the interim condensed separate financial statements form an integral part of the statements.

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Notes to the interim condensed separate financial statements 1. Overview of the Company

1.1. Organisation of the Company Grupa Azoty Zakłady Chemiczne Police Spółka Akcyjna of Police, with its registered address at ul. Kuźnicka 1, Police, Poland (the “Company”), was established on December 14th 1995 on the basis of Notarial Deed Rep. No A 20142, following transformation of the state enterprise into a state-stock company (commercialisation). The Company operates as a joint-stock company in Poland. Its principal place of business is Police. It is registered with the District Court for Szczecin-Centrum in Szczecin, 13th Commercial Division of the National Court Register, under No. KRS 0000015501. The Company has been assigned REGON (industry identification) No. 810822270 and NIP (tax identification) No. 851-02-05-573, as well as BDO (Database on Products and Packaging, and on Waste Management) No. 000016847. The Company has been established for an indefinite term. The Company's principal business includes in particular: • manufacture and sale of chemical fertilizers, • manufacture and sale of titanium white and other chemicals, • generation, transmission and distribution of electricity.

2. Significant events in the three months ended March 31st 2021 and until the authorisation date For information on significant events in the three months ended March 31st 2021, see Section 2 in Part II of the interim condensed consolidated financial statements.

3. Policies applied in the preparation of the interim financial statements

3.1. Statement of compliance and general basis of preparation These interim condensed separate financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as endorsed by the European Union, and in accordance with the Minister of Finance's Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated April 20th 2018 (Dz.U. of 2018, item 757). These interim condensed separate financial statements of the Company present the Company’s statement of financial position as at March 31st 2021 and December 31st 2020 and the statement of profit or loss and other comprehensive income for the three months ended March 31st 2021 and March 31st 2020. The statement of cash flows and the statement of changes in equity are presented for the three months ended March 31st 2021 and March 31st 2020. These interim condensed separate financial statements of Grupa Azoty Zakłady Chemiczne Police S.A. for the three months ended March 31st 2021 were authorised for issue by the Company’s Management Board on May 12th 2021. The Company has also prepared interim condensed consolidated financial statements for the three months ended March 31st 2021, which were authorised for issue by the Management Board on May 12th 2021. These interim financial statements do not include all the information and disclosures required to be given or made in full-year financial statements and should be read in conjunction with the Company’s separate financial statements for the year ended December 31st 2020, authorised for issue on April 13th 2021. The interim profit/loss may not fully reflect the realisable profit/loss for the full financial year. All figures in these interim financial statements are presented in thousands of złoty.

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These interim financial statements were prepared on the assumption that the Company would continue to operate as a going concern in the foreseeable future. As at the date of authorisation of these financial statements, no circumstances were identified which would indicate that the Company may be unable to continue as a going concern.

4. Selected supplementary and explanatory notes In the opinion of the Management Board of Grupa Azoty Zakłady Chemiczne Police Spółka Akcyjna, notes to the interim condensed consolidated financial statements of the Grupa Azoty Zakłady Chemiczne Police Group contain all relevant information required to properly assess the Company’s assets and financial position in the presented period.

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IV. MANAGEMENT’S DISCUSSION AND ANALYSIS OF GRUPA AZOTY ZAKŁADY CHEMICZNE POLICE S.A.’S PERFORMANCE IN Q1 2021

Grupa Azoty Zakłady Chemiczne Police Group

Grupa Azoty Zakłady Chemiczne Police Group Management’s discussion and analysis: Q1 2021 (all amounts in PLN '000 unless indicated otherwise)

1. General information about the Group 1.1. Organisation and structure As at March 31st 2021, the Grupa Azoty Zakłady Chemiczne Police Group comprised Grupa Azoty Zakłady Chemiczne Police S.A. (the “Parent”, the “Company”) and: • five subsidiaries (in which Grupa Azoty Zakłady Chemiczne Police S.A. held equity interests above 50%), including one company in liquidation, • three associates (in which the Parent held equity interests of less than 50% but more than 20%), including one company in liquidation bankruptcy, • one related entity (in which the Parent held an equity interest below 20%).

The Parent – Grupa Azoty Zakłady Chemiczne Police S.A. The Company has for decades been a leading European manufacturer of fertilizers and one of the largest Polish chemical companies. The Company’s advantages include a strong position in the market for compound mineral fertilizers, a titanium white unit of a type unique in Poland, as well as the large scale of ammonia, phosphoric acid and sulfuric acid production. The Group’s most significant segment is the Fertilizers Segment, which manufactures: • compound fertilizers (Polifoska® and Polidap®); the distinctive features of those complex products include chemical uniformity of fertilizer grains, high assimilability, and high concentration of pure nutrients in the final product, • nitrogen fertilizers (urea) and nitrogen-sulfur fertilizers (Polifoska® 21), used as all-purpose fertilizers for general application. Application of fertilizers manufactured by the Company has a positive effect on the development of the plant root system and the way plants use mineral nutrients and water, leading to improved biological and economic efficiency of fertilization. This segment also produces nitrogen-based chemicals, including ammonia and urea solutions: 32.5% – NOXy® (AdBlue®), and 40% – Pulnox®. NOXy® (AdBlue®) is used in the automotive industry to reduce nitrogen oxide emissions from diesel engines. A steady rise in the consumption of NOXy® is expected in Europe in the coming years given the increasingly stringent regulations aimed at reducing atmospheric emissions of exhaust fumes. Pulnox® is also used as a reducing agent in vehicle

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Grupa Azoty Zakłady Chemiczne Police Group Management’s discussion and analysis: Q1 2021 (all amounts in PLN '000 unless indicated otherwise)

emissions control technologies. It is widely used in large energy facilities which generate harmful substances, including nitrogen and sulfur oxides, when burning fossil fuels. The Company’s Pigments Segment produces mainly titanium dioxide-based pigments, marketed under the TYTANPOL® brand. Titanium white is used, among others, in the production of paints and varnishes, printing inks, plastics, as well as paper and laminates. The consistently high product quality and professional advice on product use have been recognised − the Unit has received many awards and honours. The Pigments Segment also manufactures iron sulfate (a by-product of titanium white), which finds its applications in the cement industry, in the production of ferric coagulants for water and sewage treatment, in the manufacture of ferric pigments and in wood finishing. Internationally, the Company is appreciated not only for its fertilizer production and sales volumes, but also for contributing to the progress of the chemical industry and global agriculture. The Group is committed to CSR, engaging in projects that support local communities and regional development. Liaising with local authorities, Grupa Azoty Zakłady Chemiczne Police S.A. supports vocational education, with a particular focus on professions useful to the Company. The Company has also established links with higher education institutions. Table 1. Parent’s equity interests in subordinated entities at March 31st 2021 Registered % of shares Entity Share capital office/address held by the Parent Grupa Azoty Police Serwis ul. Kuźnicka 1, 9,618 100.00% Sp. z o.o. 72-010 Police, Poland Supra Agrochemia ul. Monopolowa 6, 19,721 100.00% Sp. z o.o. 51-501 Wrocław, Poland Grupa Azoty Transtech ul. Kuźnicka 1, 9,783 100.00% Sp. z o.o. 72-010 Police, Poland Grupa Azoty Africa S.A. Route de Ngor Villa No. XOF 132,000 99.99% w likwidacji (in liquidation) 12, Dakar, Senegal thousand Zarząd Morskiego Portu ul. Kuźnicka 1, 32,642 99.91% Police Sp. z o.o. 72-010 Police, Poland ul. Kuźnicka 1, Grupa Azoty Polyolefins S.A. 922,968 34.41% (formerly PDH Polska S.A.) 72-010 Police, Poland budchem Sp. z o.o. ul. Moczyńskiego 8/10, w upadłości likwidacyjnej (in 1,201 48.96% 70-101 Szczecin liquidation bankruptcy) ul. Kuźnicka 6, Kemipol Sp. z o.o. 3,445 33.99% 72-010 Police, Poland Al. Tysiąclecia Państwa PROZAP Sp. z o.o. Polskiego 13 891 7.35% 24-110 Puławy

Group subsidiaries:

Grupa Azoty POLICE Serwis Sp. z o.o. The company was registered on March 15th 2002 under No. 0000099823 under the name of Remech Grupa Remontowo-Inwestycyjna Sp. z o.o. In 2015, it acquired Automatika sp. z o.o. and changed its name to Grupa Azoty Police Serwis Sp. z o.o. The company’s business includes overhauls and project execution in the mechanical and construction industries (construction of systems and apparatuses, including those made of plastics, maintenance services, workshop services, treatment of metals, and technical supervision services), project execution and technical and engineering services in the areas of automation and power engineering, repairs of control and instrumentation equipment and power generation plant and equipment, plant engineering in automatics and power generation, including plant engineering in process control and visualisation systems.

Supra Agrochemia Sp. z o.o. The subsidiary was registered in the Commercial Register on December 29th 2000 And later re- registered in the National Court Register under No. 00000138374 by the District Court for Wrocław-

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Grupa Azoty Zakłady Chemiczne Police Group Management’s discussion and analysis: Q1 2021 (all amounts in PLN '000 unless indicated otherwise)

Fabryczna of Wrocław, 6th Commercial Division of the National Court Register. Its business comprises revitalising post-industrial sites owned by the company and preparing them for the purposes of redevelopment projects.

Grupa Azoty Transtech Sp. z o.o. The subsidiary was registered on April 2nd 2001 under No. 00003660 by the District Court of Szczecin, 13th Commercial Division of the National Court Register. The company provides transport services (minibus transport and goods transport on lorries with load capacity of up to 24 tonnes – dump cars and open load lorries meeting the ADR requirements), plant and equipment services (mobile cranes with lifting capacity of up to 65 tonnes, diggers, loaders, bulldozers, and special-use vehicles for waste disposal in containers, sanding vehicle, low-floor units), workshop services (repair of battery-electric trucks, stackers, passenger cars, delivery vans, lorries, loaders, diggers, bulldozers and mobile cranes), as well as periodic check-ups.

Grupa Azoty Africa S.A. w likwidacji (in liquidation) The company has been in liquidation since May 12th 2017.

Zarząd Morskiego Portu Police Sp. z o.o. The subsidiary was registered on December 13th 2004 under No. 0000223709 by the District Court of Szczecin, 13th Commercial Division of the National Court Register. The Municipality of Police holds a minority interest in the company. The company’s business comprises sea port operation, port construction, property management, research work, sea and inland shipping, and coastal water transportation services. The subsidiary is a port authority within the meaning of the Act on Sea Ports and Harbours.

Associates and related entities:

Grupa Azoty Polyolefins S.A. The subsidiary was registered on September 24th 2015 under No. 0000577195 under the name of PDH POLSKA S.A. by the District Court for Szczecin-Centrum of Szczecin, 13th Commercial Division of the National Court Register. The company’s purpose is to construct a PDH unit for propylene production with related infrastructure, auxiliary systems and inter-unit connections, and extension of the Police sea port facilities to include a handling terminal for chemicals that would provide the required logistics infrastructure for receiving and storing the raw material (the “Polimery Police” project). On October 8th 2019, the company’s name was changed to Grupa Azoty Polyolefins S.A. Until November 2020 it was a subsidiary of the Company, now it is an associate.

Budchem Sp. z o.o. w upadłości likwidacyjnej (in liquidation bankruptcy) The company was registered in the Commercial Register on October 14th 1999 and later re- registered in the National Court Register under No. 0000135223 by the District Court of Szczecin, 13th Commercial Division of the National Court Register. The majority shareholder is WB Technika Sp. z o.o. The company is in liquidation bankruptcy and does not trade.

Kemipol Sp. z o.o. The company was registered in the Commercial Register on December 18th 1990 and later re- registered in the National Court Register under No. 0000119127 by the District Court of Szczecin, 13th Commercial Division of the National Court Register. The majority shareholder is Kemira Kemi AB from Sweden. The remaining shares are held by the Company and Bank Ochrony Środowiska S.A. The company’s business consists in the production of coagulants for water purification and wastewater treatment. Services related to designing the process of chemical treatment of drinking, industrial and waste water, selection and supply of chemical dosing equipment, optimisation of the water treatment process, and restoration of lakes.

PROZAP Sp. z o.o. A multi-disciplinary specialised engineering design practice with a proven track record in designing new and upgrading existing units for the production of fertilizers and other chemicals. The company offers a full range of services: from developing the concept, through feasibility studies and technology transfer, to design, procurement, start-up, commissioning, supervision, personnel

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Grupa Azoty Zakłady Chemiczne Police Group Management’s discussion and analysis: Q1 2021 (all amounts in PLN '000 unless indicated otherwise)

training, and preparation of as-built documentation. The company has experience in project execution as a PMC and EPC, and turn-key contractor.

Organisational and equity ties As at March 31st 2021, the Company's share in total voting rights at its subsidiaries and associates was equal to its respective equity interests in these companies (with the exception of PROZAP Sp. z o.o.).

2. Financial condition and assets 2.1. Assessment of factors and one-off events with a material impact on operations and financial performance

Impact of COVID-19 pandemic on the Company’s and Group’s business In the three months ended March 31st 2021, none of the Group segments recorded any major decline in sales volumes. There were no major disruptions in the supply chains of raw materials or products. In the three months to March 31st 2021, the Company was not affected by such increase in employee absence rates due to ill health that would disrupt its business continuity, nor did it record any production cuts associated with the epidemic emergency. In the reporting period, no material adverse effect of the coronavirus pandemic on the Fertilizers Segment’s business or on sales of compound fertilizers and nitrogen products was seen. In the Pigments Segment, demand for titanium white remained high. No major problems were observed in the areas of supply of raw materials for production, logistics and customer service. Nevertheless, at the outbreak of the pandemic, the Company identified potential risk areas that could materially affect its future financial performance. These risks include: • Disruptions in the raw material/feedstock supply and product sale chains owing to transport issues. • Disruption of sale processes in individual business segments. • Disruptions in the continuity of production processes due to potentially reduced availability of staff resources. • Potential temporary disruptions in the timely delivery of capital and maintenance projects at the Company or other entities of its Group, possible delays in the lead times of materials and equipment, or actions by government bodies issuing decisions in administrative processes. • Potential threat to the liquidity of some customers suffering from payment backlogs. • Exchange rate fluctuations. All the above risks remain relevant, but until the date of this information the Company still did not record any significant impact of the pandemic on its key trade or production areas. The Company’s Management Board is keeping track of the developments around the COVID-19 pandemic and its unfolding impact on the Company’s business; procedures have been put in place to ensure immediate response by the relevant services, and individual areas of the Company have effectively adapted their operations to the changed environment. Plans for the second quarter of 2021 are to vaccinate the Company’s willing employees against COVID-19 as part of the national vaccination campaign. The scale of the future economic consequences of the COVID-19 pandemic is not fully known as the threat concerns all markets, the internal as well as global environment, and involves factors that remain beyond the Company’s control and are subject to dynamic change.

2.2. Market overview Agricultural market – Poland In the first quarter, the prices of agricultural produce followed an upward trend. The largest increase over the quarter was recorded for milling rye (16.0%), while the lowest growth was seen in the case of milling wheat (5.4%). In the same period of 2020, there were both price increases (the largest one for feed wheat: up 4.9%) and decreases (as in the case of milling rye: down 1.9%).

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Grupa Azoty Zakłady Chemiczne Police Group Management’s discussion and analysis: Q1 2021 (all amounts in PLN '000 unless indicated otherwise)

At the beginning of the first quarter, field work was still impeded by difficult weather conditions and then by ponding water. Due to low temperatures, the growth of winter crops was delayed by three to four weeks according to estimates. Where possible, appropriate fertilizers were applied and sowing of spring grains (oats) started. As regards the other grains, farmers waited for higher temperatures to start sowing. Despite the apparent delay, the condition of winter grains was assessed as good. Due to the growing prices of agricultural produce, farmers were selling their stocks.

FERTILIZERS

COMPOUND FERTILIZERS

NPK fertilizers In Central and Eastern Europe, including Poland, demand for NPK fertilizers in the first quarter of 2021 was limited due to their high market prices mirroring global trends. In Ukraine, demand was slightly higher. Demand in Ireland was assessed as medium, and in the other regions of Northern and Western Europe – as poor. Significant demand for compound fertilizers in the first quarter was recorded in Russia. During the period, around 680 thousand tonnes of various NPK fertilizers were supplied domestically in Russia, three times more than in the previous quarter. The prices followed an upward trend. Over the quarter, they increased by 10%–16% in the case of three popular NPK fertilizer quotations. Over the same period of 2020, the prices were also growing, but at a lower rate.

DAP In Central and Eastern Europe, including Poland, demand for DAP in the first quarter of 2021 was subdued, due primarily to its high market prices and adverse weather conditions. In the first quarter, the prices of phosphate fertilizers in Russia were on the rise following the global market. The weather conditions and ice accumulation at ports increased the cost of freight from Russia. Trade in phosphate fertilizers in the US was active despite high prices caused by limited availability of DAP/MAP. In China, demand was rising until mid-quarter, to weaken thereafter. As the domestic demand was decreasing, exports to India, Thailand, Vietnam, Pakistan and Brazil were on the rise.

Figure 1. Prices of NPK, DAP [FOB Baltic, USD/t] 600 500 400 300 200 100 0

DAP NPK

RAW MATERIALS FOR THE PRODUCTION OF COMPOUND FERTILIZERS

Phosphate rock Throughout the first quarter of 2021 the prices of phosphate fertilizers on global markets followed an upward trend. The slow price increase for DAP and MAP fertilizers, started in the third quarter of 2020, accelerated strongly after the US announced the imposition of countervailing duties on fertilizers imported from Russia and Morocco in 2021. This information caused major turmoil on the US market, where strong demand coupled with limited supply pushed DAP and MAP prices in the first quarter up to levels not seen since 2012. The strong price growth was seen across almost all fertilizers markets, pushing up the prices of raw materials for the production of these fertilizers, i.e. phosphoric acid and phosphate rock. The phosphate rock market remained relatively stable in the three months ended March 31st 2021, with growth rates of several up to a dozen or so USD per tonne. No supply issues were reported by the producers, and there were no factors on the demand

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Grupa Azoty Zakłady Chemiczne Police Group Management’s discussion and analysis: Q1 2021 (all amounts in PLN '000 unless indicated otherwise)

side that could lead to a further increase in prices. In the first quarter of 2021, the phosphate rock price benchmarks grew on average by approximately 6% and 10% relative to the fourth quarter and the first quarter of 2020, respectively.

Potassium chloride The potassium chloride market followed an upward trend in the three months ended March 31st 2021. Supportive conditions on the fertilizers market, limited supply and high demand led to a strong increase in its prices on spot markets, especially on NOLA in the US and on the Brazilian market. Both these markets saw significant price hikes, with the prices rising by several dozen USD per tonne in the first quarter, approaching the benchmark prices from the beginning of 2019. The price growth in the spot markets translated into higher prices of potassium chloride sold to China and India. India was the first country to have signed a new contract in 2021, with the Belarusian supplier BPC, providing for the price of USD 247 per tonne (CFR), up by approximately 12% on 2020. This information was received sceptically by the other producers of potassium chloride; who stressed that prices should reflect the actual situation on the fertilizers market, which means they should be higher than those initially agreed with BPC. Subsequent contracts with India already had a price of USD 280 per tonne (CFR). China has signed contracts for the supply of potassium chloride at an initial price of USD 247 per tonne (CFR). The situation is unusual, as never before have there been such wide differences in contract prices between China and India.

Sulfur In the three months ended March 31st 2021, the prices of prilled sulfur rose significantly. Their growth was driven, on the one hand, by favourable conditions on the phosphate fertilizers markets and high demand for sulfur for phosphoric acid production, and, on the other hand, by limited supply of sulfur due to the petrochemical industry operating at reduced capacities owing to the pandemic, overhauls and shutdowns. Compared with the first quarter of 2020, a significant price rebound was seen across all pricing bases. On the other hand, the liquid sulfur market in Europe saw much lower growth. The average price of liquid sulfur on the Benelux Delivered basis moved up by approximately 27% year on year in the first quarter of 2021. At the same time, liquid sulfur prices on the US Tampa basis rose 100%, which was due to strongly limited supply and high demand.

NITROGEN PRODUCTS

Ammonia In the first quarter, the prices of ammonia followed an upward trend. The highest growth was seen based on Tampa (65%) and the lowest – based on Yuzhna (15.5%). The market was driven by reduced output. Strong demand for ammonia imports from China caused by natural gas price reductions, as well as the limited availability of exports in key production regions were among the factors driving up prices. At the same time, the average prices of natural gas, being the main feedstock used for ammonia production, increased significantly relative to the first quarter of 2020. Figure2. Ammonia and natural gas prices 500 30 400 25 20 300 15 200 USD/t 10

100 5 EUR/MWh 0 0

Amoniak Gaz

Urea In the first quarter, the Yuzhny and Baltic Sea prices of urea followed an upward trend, having risen by 16% and 28%, respectively. In the period, the key development on the fertilizer markets in

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Europe was an increase in urea prices internationally, especially of urea from North Africa. Each new purchase campaign from India in February or March was supporting prices. The strong growth trend continued also due to limited availability of exports from China. Figure 3. Urea prices [USD/t] 400

300

200

100

Mocznik

Other nitrogen products The Company’s line of RedNOX® products (designed to reduce nitric oxide emissions in the automotive and industrial industries) includes the following: NOXY® (32.5% urea solution, AdBlue®); Likam® (ammonia water); Pulnox® (40% technical-grade urea solution). The Rednox market shows a strong growth trend in a longer term both in Poland and Europe. EU regulations on reducing exhaust emissions are very stringent and these products enable meeting EU standards in this respect. In the first quarter, as a result of the coronavirus pandemic, demand for AdBlue in Europe fell, which, however, did not materially affect the Company’s sales volumes of NOXy (AdBlue). It is also expected that the gradual abolition of restrictions in the second quarter of 2021 should bolster demand.

KEY FEEDSTOCK FOR NITROGEN PRODUCTS

Natural gas In the first three months of 2021, natural gas prices were approximately 80% higher year on year. The main drivers of gas prices were low stocks held in European storage facilities, caused by much lower LNG supplies to Europe (as Asia remained a more profitable market for liquefied gas suppliers), as well as temperatures below the long-term average, especially in the first two months of the year. In addition, strong increases were seen in the prices of other energy commodities – crude oil and coal, as well as of CO2 emission allowances, which topped the psychological limit of EUR 40 per tonne, increasing the profitability of gas-fired power generation. In the first quarter of 2021, due to economic and legal reasons, natural gas was purchased from PGNiG. Figure 4. Market prices of natural gas [EUR/MWh] 30 25 20 15 10 5 0

Gaz

PIGMENTS

Titanium white In the three months ended March 31st 2021, the price of titanium white manufactured in Europe increased 0.3% year on year. The European prices rose at the beginning of 2021, and then remained stable until the end of the quarter.

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European contract prices went up in the first quarter of the year in the wake of the strong Chinese market, high sea transport costs, increased demand, as well as higher costs of titanium-bearing feedstocks. The demand for TiO2 remains extremely high, driven by residential renovation projects. The availability of Chinese titanium white in Europe is limited, and imports from Asia have become hardly profitable for European buyers for pricing and logistics reasons, including mainly high freight costs. Customers are finding it difficult to purchase the product outside contracts. Delivery times for West European and American products are between five and eight weeks, while for Asian products they are up to three months. There was no significant impact of the Suez Canal blocking by a container ship on the TiO2 market. In 2020, the construction market shrank by approximately 6%, but is expected to rebound significantly in 2021, with annual growth forecast at approximately 7%.

Figure 5. Market prices of titanium white [EUR/t] 3 000

2 500

2 000

1 500

Biel tytanowa

Other products Iron sulfate is a by-product of titanium white and steel production. In 2020, demand for the product rose on the back of a very good market situation. At the beginning of 2021 (from January to mid- February), producers using iron sulfate accepted very small volumes of the product (due mainly to production stoppages at cement units), but since mid-February this has changed completely, with accepted volumes reaching high levels. Despite the continuing epidemic, it is not significantly affecting the market sales of iron sulfate.

RAW MATERIALS FOR MANUFACTURE OF PIGMENTS

Ilmenite and titanium slag Ilmenite prices have continued at high levels since the beginning of 2021 and are expected to grow further. The dynamic rebound of the Chinese economy after the pandemic-caused crisis, started already in the second half of 2020, caused a sharp growth in the prices of titanium-bearing feedstocks on that market. According to estimates, the price of ilmenite in China in the first quarter of 2021 was 75% higher than in the first quarter of 2020, with the titanium slag price rising 32%. The price hikes made Chinese producers of titanium white increase imports, which triggered a price growth globally, although it is less sharp. The global price of ilmenite is estimated to have increased by approximately 12% at the end of the fourth quarter of 2020 and in January 2021. The price of titanium slag used in the sulfate-based production of titanium white is showing greater stability with a slight downward trend, which may, however, be offset by the already mentioned increased demand from the Chinese market.

2.3. Key financial and economic data 2.3.1. Consolidated financial results In the Company’s opinion, the most important events and achievements of the Group in the first quarter of 2021 included: • Continuity of production and sales maintained – no material impact of the COVID-19 pandemic on the Company’s operations; • EBITDA margin higher than in the first quarter of 2020;

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• Strong upward trend in the prices of compound fertilizers and nitrogen products; • Higher sales volumes of compound fertilizers. In the reporting period, the financial results of the Group were strongly correlated with the Parent’s market environment. In the first quarter of 2021, the Company’s operating results improved year on year. Consolidated EBITDA came in at PLN 61,211 thousand, having increased by PLN 18,455 thousand. The Group’s net profit reached PLN 15,043 thousand, a decrease of PLN 7,527 thousand year on year. Revenue increased markedly, by almost 11% year on year, while cost of sales grew more than 11%, resulting in a gross profit of PLN 89,905 thousand, a level higher than the year before. In the first quarter of 2021, the Company’s operations were affected by the dynamic price movements on the fertilizer and nitrogen product markets. Relative to the first quarter of 2020, the selling prices of compound fertilizers, urea and ammonia increased significantly. At the same time, the prices of certain raw materials used for their production, notably natural gas, also increased. Therefore, the positive effect of the increase in selling prices was significantly offset by an increase in production costs, due mainly to the soaring prices of natural gas. The market also saw considerable increases in the prices of CO2 emission allowances, but since the Company had largely secured EUAs for 2021 through the purchases it had made in previous years, the impact of this factor was significantly limited compared with the market. In the Pigments Segment, the higher selling prices of titanium white were largely offset by the adverse effect of the rising gas prices and several other minor factors. Demand for titanium white remained high. With respect to financing activities, profit or loss for the first quarter of 2021 was favourably affected by, among other factors, the measurement of derivative instruments under the Grupa Azoty Polyolefins S.A. shareholder agreement. Following recognition in the separate and consolidated financial statements for 2020 of financial assets under a derivative instrument (CALL option) and a financial liability under a derivative instrument (PUT option) related to shares in GA Polyolefins, the Company remeasured the items as at the next reporting date (the aggregate effect of both items on profit or loss for the first quarter of 2021 was PLN 12,876 thousand). A significant item affecting consolidated net profit/loss for the first quarter of 2021 was the loss on shares in equity-accounted investees (PLN -25,462 thousand), attributable mainly to GA Polyolefins and due principally to the measurement of its financial instruments serving as cash flow hedges for the Polimery Police project, executed in accordance with the requirements of the credit facilities agreement and resulting from the financing received in USD and payments made in EUR, mainly to the general contractor, as those instruments cannot be covered by hedge accounting. Since November 2020, following the registration of the share capital increase at Grupa Azoty Polyolefins S.A., the Company’s interest in the share capital of GA Polyolefins has been 34.41%. Since December 2020, the company’s profit/loss has been consolidated in the Group’s financial statements under the equity method, and the share of its profit or loss has been recognised in the statement of profit or loss under ‘share of profit of equity-accounted investees’.

Table 2. Consolidated financial data Item Q1 2021 Q1 2020 change % change Revenue 718,146 648,224 69,922 10.8 Cost of sales 628,241 563,548 64,693 11.5 Gross profit 89,905 84,676 5,229 6.2 Selling and distribution expenses 31,749 30,583 1,166 3.8 Administrative expenses 38,215 45,110 -6,895 -15.3 Net profit on sales 19,941 8,983 10,958 122.0 Other income (expenses) 7,111 180 6,931 3,850.6 EBIT 27,052 9,163 17,889 195.2 Finance income (costs) 19,070 16,858 2,212 13.1 Share of profit (loss) of equity-accounted -25,462 3,534 -28,996 -820.5

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investees Profit before tax 20,660 29,555 -8,895 -30.1 Income tax 5,617 6,985 -1,368 -19.6 Net profit (loss) 15,043 22,570 -7,527 -33.3 EBITDA 61,211 42,756 18,455 43.2

2.3.2. Segments’ financial results In the first quarter of 2021, the year-on-year changes in the Group’s operating results were primarily driven by the market situation in the Fertilizers Segment.

Table 3. EBIT by segment in Q1 2021 Other Item Fertilizers Pigments Activities Revenue from external sales 602,743 95,853 19,550 Share [%] 84% 13% 3% EBIT 11,783 9,954 5,315

The shares of individual segments in total revenue changed slightly year on year – the share of the Pigments Segment went down by 1pp, while the share of the Fertilizers Segment rose by 1pp.

FERTILIZERS In the three months to March 31st 2021, the Company posted EBIT of PLN 11,783 thousand in the Fertilizers Segment, which was materially higher than in the corresponding period of the previous year. The Segment’s revenue was PLN 602,743 thousand, up 11% year on year. Sales of compound fertilizers accounted for more than 65% of the Fertilizers Segment’s total revenue. On average, domestic sales of fertilizer and ammonia accounted for 64% of the Segment’s total sales in the reporting period. Figure 6. Consolidated revenue of the Fertilizers Segment

700 000 700 000 600 000 600 000 500 000 500 000 400 000 400 000 300 000 300 000 200 000 200 000 100 000 100 000 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 0

1Q 1Q 2020 2021 2014 2015 2016 2017 2018 2019 2020 2021

The year-on-year growth was mainly driven by the higher average selling prices of main products and higher sales volumes of compound fertilizers. At the same time, the Segment’s operations were adversely affected mainly by the increase in natural gas prices relative to the first quarter of 2020 (up by approximately 74%). It was partially offset by, among other things, a 17% decrease in potassium chloride prices, but the impact of the increase in gas prices on the performance was much stronger.

PIGMENTS In the three months to March 31st 2021, the Pigments Segment posted EBIT of PLN 9,954 thousand, down by PLN 1,611 thousand on the corresponding period of the previous year.

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The year-on-year increase in the Segment’s revenue was attributable to the higher average selling prices of titanium white, in line with global trends. The sales volume of titanium white was also higher than in the same period of the year before. The Segment’s performance was negatively affected by such factors as the higher prices of natural gas and lower sales volumes of iron sulfate from the landfill site. In the reporting period, the Pigments Segment’s revenue came in at PLN 95,853 thousand, accounting for 13% of the Group’s total. Approximately 59% of the revenue from sale of titanium white was generated on foreign markets. Figure 7. Consolidated revenue of the Pigments Segment

120 000 120 000 100 000 100 000 80 000 80 000 60 000 60 000 40 000 40 000 20 000 20 000 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 0

1Q 1Q 2020 2021 2014 2015 2016 2017 2018 2019 2020 2021

POLYMERS Since November 2020, following the registration of the share capital increase at Grupa Azoty Polyolefins S.A., the Company’s interest in the share capital of GA Polyolefins is 34.41%. The Company lost control of Grupa Azoty Polyolefins S.A. on November 16th 2020. Accordingly, Grupa Azoty Polyolefins ceased to be consolidated, as a result of which in its consolidated financial statements the Company has discontinued the presentation of financial data of the Polymers Segment since the first quarter of 2020; only historical data covering the full consolidation period is presented. Since December 2020, the company’s profit/loss has been consolidated in the Group’s financial statements under the equity method, and the share of its profit or loss has been recognised in the statement of profit or loss under ‘share of profit of equity-accounted investees’. For more detailed information, see the Group’s consolidated financial statements for 2020. OTHER ACTIVITIES Revenue recognised under Other Activities accounts for approximately 3% of the Group’s total sales. Other Activities delivered a positive EBIT of PLN 5,315 thousand.

2.3.3. Operating expenses The Group’s operating expenses amounted to PLN 679,675 thousand in the first quarter of 2021, having increased by PLN 86,695 thousand (or 15%) year on year. The year-on-year increase in the raw materials and consumables used in the reporting period was mainly attributable to the increase in the price of natural gas. In addition, there was an increase in the production volumes of compound fertilizers and nitrogen products. The higher cost of services was attributable to a higher cost of transport services related to cost of sales and driven by increased sales volumes of compound fertilizers. In the first quarter of 2021, salaries and wages, including surcharges, remained practically unchanged year on year.

Taxes and charges grew mainly due to a higher cost of CO2 emission allowances. Table 4. Costs by nature of expense Item Q1 2021 Q1 2020 change % change Amortisation and depreciation 34,159 33,593 566 2 Raw materials and consumables used 444,612 371,039 73,573 20 Services 47,865 45,690 2,175 5 Wages and salaries, including surcharges, 94,399 95,136 -737 -1 and other benefits

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Taxes and charges 50,842 38,864 11,978 31 Other costs by nature of expense 7,798 8,658 -860 -10 Total 679,675 592,980 86,695 15

2.3.4. Structure of assets, equity and liabilities At the end of the first quarter of 2021, the Group’s assets rose slightly to PLN 3,462,761 thousand, by PLN 12,397 thousand on the end of the first quarter of 2020. As at March 31st 2021, non-current assets amounted to PLN 2,643,820 thousand, and current assets stood at PLN 818,941 thousand. Significant changes in the Group’s assets as at March 31st 2021 relative to March 31st 2020 involved mainly those items which were predominantly affected by the change in the consolidation method for Grupa Azoty Polyolefins S.A. in the consolidated financial statements (as a result of the loss of control of Grupa Azoty Polyolefins S.A. in 2020), including: • PLN 550,149 thousand increase in long-term equity-accounted investments, • PLN 123,413 thousand (8%) decrease in property, plant and equipment – the effect of the deconsolidation of GA Polyolefins, partly offset by placement in service of new investment projects at the Parent, • PLN 463,137 thousand decrease in other long-term receivables and PLN 60,431 thousand decrease in intangible assets, • no derivative financial instruments disclosed, compared with PLN 56,157 thousand as at the end of the first quarter of 2020, • PLN 27,585 thousand (8%) decrease in short-term trade and other receivables, due mainly to the deconsolidation of Grupa Azoty Polyolefins S.A., partially offset by an increase in other taxes, grants, customs duties and social security receivable and other receivables at the Parent. In addition, significant changes relative to the first quarter of 2020 include: • PLN 471,263 thousand increase in other financial assets in connection with a PLN 388,438 thousand subordinated loan granted by the Company to Grupa Azoty Polyolefins S.A. and related interest and commission fees, and PLN 58,866 thousand in connection with the measurement of derivative instruments – the call option over Grupa Azoty Polyolefins S.A. shares held by Hyundai; • PLN 213,162 thousand decrease in cash and cash equivalents held at banks, due mainly to a significant amount of cash held in the Parent’s bank accounts as at the end of the first quarter of 2020 (raised as a result of completion of the secondary offering of Company shares); • PLN 47,970 thousand decrease in the value of property rights held (mainly CO2 emission allowances) due to a delay in the European Commission’s approval of free allocation of allowances for 2021–2025, partially offset by higher amount of emission allowances purchased; • PLN 27,696 thousand increase in investment property following reclassification of non- current assets of Supra Agrochemia Sp. z o.o. to investment property at fair value; • no non-current assets held for sale recorded, compared with PLN 19,596 thousand in the same period of the previous year, following a change of presentation of Supra Agrochemia Sp. z o.o.’s non-current assets in the statement of financial position.

Table 5. Structure of assets Item Mar 31 2021 Mar 312020 change % change Non-current assets, including: 2,643,820 2,264,894 378,926 17 Property, plant and equipment 1,458,085 1,581,498 -123,413 -8 Right-of-use assets 66,830 72,152 -5,322 -7 Investment property 34,533 6,837 27,696 405 Intangible assets 16,660 77,091 -60,431 -78 Shares 523 523 0 0

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Item Mar 31 2021 Mar 312020 change % change Equity-accounted investees 580,048 29,899 550,149 1,840 Other financial assets 471,263 0 471,263 - Other receivables 160 463,297 -463,137 -100 Deferred tax assets 15,718 33,597 -17,879 -53 Current assets, including: 818,941 1,185,470 -366,529 -31 Inventories 277,790 273,652 4,138 2 Property rights 172,581 220,551 -47,970 -22 Derivative financial instruments 0 56,157 -56,157 -100 Current tax assets 743 6,940 -6,197 -89 Trade and other receivables 317,540 345,125 -27,585 -8 Cash and cash equivalents 50,287 263,449 -213,162 -81 Non-current assets held for sale 0 19,596 -19,596 -100 Total assets 3,462,761 3,450,364 12,397 0.4

Material changes in the Group’s equity and liabilities as at March 31st 2021 relative to March 31st 2020 include: • PLN 96,177 thousand (5%) decrease in equity following the deconsolidation of Grupa Azoty Polyolefins S.A., partly offset by an increase in retained earnings at the Parent; • PLN 298,225 thousand (67%) increase in non-current liabilities, including due to a PLN 266,238 thousand increase in borrowings, driven primarily by higher amounts of loans from related entities under the joint intragroup financing of the Polimery Police project, as well as a PLN 18,583 thousand increase in other financial liabilities on measurement of derivative instruments at the Parent – the put option for the sale of Grupa Azoty Polyolefins S.A. shares by Hyundai and KIND to the original investors; • PLN 189,651 thousand drop in current liabilities, due mainly to a PLN 287,243 thousand decrease in borrowings following the deconsolidation of Grupa Azoty Polyolefins S.A. The effect was partly reduced by, among other things, an increase in other financial liabilities (mainly reverse factoring) as well as trade and other payables at the Parent; • PLN 72,534 thousand decrease in short-term grants due to the delay in the European Commission’s approval of free allocation of CO2 emission allowances for 2021–2025 in the first quarter of the current year; • no liabilities directly related to assets held for sale, compared with PLN 11,802 thousand in the previous year, as a result of the change of presentation of Supra Agrochemia Sp. z o.o. in the statement of financial position.

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Table 6. Structure of equity and liabilities Mar 31 Item Mar 312020 change % change 2021 Equity 1,759,348 1,855,525 -96,177 -5 Non-current liabilities, including: 743,182 444,957 298,225 67 Borrowings 419,515 153,277 266,238 174 Other financial liabilities 29,628 0 29,628 - Lease liabilities 60,023 62,229 -2,206 -4 Employee benefit obligations 84,973 78,846 6,127 8 Other liabilities 12,539 12,831 -292 -2 Provisions 118,208 111,213 6,995 6 Grants 18,296 20,095 -1,799 -9 Deferred tax liability 0 6,466 -6,466 -100 Current liabilities, including: 960,231 1,149,882 -189,651 -16 Borrowings 195,345 482,588 -287,243 -60 Other financial liabilities 117,841 5,530 112,311 2,031 Derivative financial instruments 1,925 899 1,026 114 Lease liabilities 6,368 5,366 1,002 19 Employee benefit obligations 14,540 14,086 454 3 Current tax liabilities 1 1 0 0 Trade and other payables 618,162 551,014 67,148 12 Provisions 4,190 4,203 -13 -0.3 Grants 1,859 74,393 -72,534 -98 Liabilities directly related to assets held for 0 11,802 -11,802 -100 sale Total liabilities 1,703,413 1,594,839 108,574 7 Total equity and liabilities 3,462,761 3,450,364 12,397 0.4

2.3.5. Financial ratios Profitability In most cases, the Group’s profitability ratios were similar to or higher than the figures for the same period of the previous year. In the first quarter of 2021, EBIT and EBITDA margins were boosted by higher operating profit relative to the corresponding period of 2020. On the other hand, a 1pp decrease in net profit margin was due mainly to a material loss (recorded in the first quarter of 2021) on shares in equity-accounted investees, which was attributable largely to the measurement of GA Polyolefins’ financial instruments serving as cash flow hedges for the Polimery Police project, executed in accordance with the requirements of the credit facilities agreement and resulting from the financing received in USD and payments made in EUR, as those instruments cannot be covered by hedge accounting. Table 7. Profitability ratios Ratio Q1 2021 Q1 2020 Gross profit margin 13% 13% EBIT margin 4% 1% EBITDA margin 9% 7% Net profit margin 2% 3% ROA 0.4% 1% ROCE 1% 0.4% ROE 1% 1% Return on non-current assets 1% 1%

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Ratio formulas: Gross profit margin = gross profit (loss) / revenue (statement of comprehensive income by function) EBIT margin = EBIT / revenue EBITDA margin = EBITDA / revenue Net profit margin = net profit (loss) / revenue ROA (return on assets) = net profit (loss) / total assets Return on capital employed (ROCE) = EBIT / (total assets less current liabilities) Return on equity (ROE) = net profit (loss) / equity Return on non-current assets = net profit (loss) / non-current assets

Liquidity The Group’s liquidity ratios as at the end of the first quarter of 2021 were lower than those achieved in the corresponding period of 2020, due to various factors, including a material decrease in the Group’s cash and cash equivalents (significant amount of cash held in the Parent’s accounts as at the end of the first quarter of 2020, resulting from the completion of the secondary offering of Company shares, was gradually used during 2020 on the financing of the Polimery Police project). Table 8. Liquidity ratios Ratio Q1 2021 Q1 2020 Current ratio 0.9 1.0 Quick ratio 0.5 0.8 Cash ratio 0.1 0.2

Ratio formulas: Current ratio = current assets / current liabilities Quick ratio = (current assets - inventories - current prepayments and accrued income) / current liabilities Cash ratio = (cash + other financial assets) / current liabilities. Operating efficiency Relative to the corresponding period of the previous year, the Group’s inventory cycle and average collection period in the first quarter of 2021 were reduced by four and eight days, respectively, as a result of changes in the Company’s balance-sheet structure. The Group’s average payment period slightly lengthened, by one day. Table 9. Operating efficiency ratios Ratio Q1 2021 Q1 2020 Inventory cycle 40 44 Average collection period 40 48 Average payment period 89 88 Cash conversion cycle -9 4

Ratio formulas: Inventory turnover in days = (inventories * 90) / cost of sales Average collection period in days = (trade and other receivables * 90) / revenue Average payment period in days = (trade and other payables *90) / cost of sales Cash conversion cycle = inventory turnover in days + average collection period in days - average payment period in days

Debt The Group’s total debt ratio increased by 3pp year on year in the first quarter of 2021, as total liabilities grew faster than total assets (7% vs 0.4%, respectively). This was a result of, among other things, the deconsolidation of Grupa Azoty Polyolefins S.A., which significantly changed the Group’s balance-sheet structure. As a result of an increase in the Parent’s long-term financing (mainly as part of the intragroup financing) intended for the Polimery Police project, the long-term debt ratio increased by 8 pp, while the short-term debt ratio fell by 5 pp.

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Table 10. Debt ratios Ratio Q1 2021 Q1 2020 Total debt ratio 49% 46% Long-term debt ratio 21% 13% Short-term debt ratio 28% 33% Equity-to-debt ratio 103% 116%

Ratio formulas: Total debt ratio = current and non-current liabilities / total assets Long-term debt ratio = non-current liabilities / total assets Short-term debt ratio = current liabilities / total assets Equity-to-debt ratio = equity / current and non-current liabilities

2.4. Financial liquidity During the reporting period, the Group did not identify any threats to its financial liquidity. Financial liquidity is one of the key areas that are subject to continuous monitoring. The Group uses external financing sources to satisfy its liquidity needs and is able to obtain additional financing for its current and long-term corporate needs under an intragroup financing agreement signed by the Grupa Azoty Group companies. Loans are repaid using current cash flows, but a safe level of credit reserve is always maintained for use when necessary. The Parent identifies and manages the liquidity risk, and pursues an active cash flow (inventories, payables and receivables) management policy by using such tools as trade credit, prepayments in sale transactions, and longer payment deadlines in purchase transactions. In the first quarter of 2021, the insurance of trade receivables arising from sales of fertilizers, urea, titanium white and chemicals was continued. The insurance covers almost all of the Company’s trade receivables, including domestic and export trade receivables. A small percentage of limits granted internally within the Company are not submitted for insurance (mostly limits granted to associates and those secured by bank guarantees). Currency risk is mitigated mainly through natural hedging, that is the balancing of same-currency revenue and expenses arising from the purchase of key raw materials and feedstocks with sales of products for export. Additionally, a surplus in the euro is used to cover a deficit in the US dollar. The Company used forward contracts on the EUR/PLN and EUR/USD currency pairs to hedge against the currency risk. The Company additionally extended the range of its hedging instruments to include zero-cost collars with a symmetric risk profile. A zero-cost collar is a combination of two options: a put option and a call option with the same notional value and maturity date, with such clearing prices of the purchased and written option that the transaction is cost-free at the time of its execution. Under the Payment Service Agreement with Banco Santander S.A., executed together with the Key Subsidiaries, the Company has the ability to defer the payment of liabilities, which supports its liquidity management. In the reporting period, there were no events of default, relating to timely payment of liabilities or other covenants, which could result in debt acceleration.

2.5. Borrowings In the first quarter of 2021, the Group repaid all its borrowings when due, and there is no threat to the Group’s ability to continue servicing its debt.

Table 11. Parent’s liabilities under bank borrowings as at March 31st 2021 (currency unit ‘000)* Financing Name of financial institution/ amount Currency Debt type of liability

PKO BP S.A. 200,500 PLN 87,614 Overdraft facility with CPR

PKO BP S.A. 62,000 PLN (16,430**) Multi-purpose credit facility

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Grupa Azoty Zakłady Chemiczne Police Group Management’s discussion and analysis: Q1 2021 (all amounts in PLN '000 unless indicated otherwise)

BGK Overdraft Facility 100,000 PLN 72,306

Bank Gospodarstwa Krajowego 20,000 EUR 11,000 Non-revolving working capital facility BNP Paribas Polska S.A. Multi-Purpose Credit Facility (guarantees and letters of 240,000*** PLN 5,132 credit)

* The table presents principal amounts. ** Limit used as guarantees. *** Joint limit for Grupa Azoty Group companies.

Table 12. Parent’s liabilities under non-bank borrowings as at March 31st 2021 (currency unit ‘000)* Financing Name of financial institution/ amount Currency Debt type of liability

Grupa Azoty S.A. 60,000 PLN 45,000 Intragroup loan Grupa Azoty S.A. 51,420 PLN 41,387 Intragroup loan Grupa Azoty S.A. 298,000 PLN 298,000 Intragroup loan Provincial Fund for Environmental Protection and Water Management (WFOŚiGW) 90,000 PLN 19,642 Loan (EC-II) * The table presents principal amounts.

Table 13. Liabilities of Grupa Azoty Zakłady Chemiczne Police Group subsidiaries under borrowings as at March 31st 2021 (PLN '000)* Name of financial Financing Subsidiary institution/ amount Currency Debt type of liability

Grupa Azoty Police Serwis PKO BP S.A. 8,000 PLN 0 Sp. z o.o. Overdraft facility with CPR

Grupa Azoty Transtech PKO BP S.A. 400 PLN 0 Sp. z o.o. Overdraft facility with CPR

Zarząd Morskiego Portu Police PKO BP S.A. 100 PLN 0 Sp. z o.o. Overdraft facility with CPR

* The table presents principal amounts.

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2.6. Key projects In the first three months of 2021, the Group’s capital expenditure on property, plant and equipment and intangible assets reached PLN 24,255 thousand, including: • growth capex PLN 13,017 thousand, • maintenance capex PLN 6,581 thousand, • mandatory capex PLN 47 thousand, • purchase of finished goods PLN 2,379 thousand, • other (including major overhauls) PLN 2,231 thousand.

Figure 8. Structure of capital expenditure of the Group as at March 31st 2021 9% 10% Inwestycje związane z rozwojem biznesu

0,2% Inwestycje związane z utrzymaniem biznesu

Inwestycje 54% mandatowe 27% Zakup gotowych dóbr

pozostałe

KEY INVESTMENT PROJECT AT THE GROUP In the three months ended March 31st 2021, the associate Grupa Azoty Polyolefins S.A. continued to implement the Polimery Police project, comprising the construction of propylene and polypropylene units with auxiliary systems and associated infrastructure, as well as a port terminal with feedstock storage facilities (the “Project”). Hyundai Engineering Co., Ltd. (HEC), selected in the tender for the award of a lump-sum turn-key contract (EPC), is the general contractor for the Project. The start of its commercial operation is scheduled for the first quarter of 2023.

Progress of construction work The overall stage of completion of the EPC contract was approximately 57% as at April 15th 2021. The overall stage of completion is understood to encompass design, procurement and supply, delivery of long lead items of equipment, application for the necessary administrative permits and decisions, construction and assembly works. Handling and storage terminal (marine gas terminal, HST) In the reporting period, installation of the outer shell on an ethylene tank and propane tanks was completed. Preparatory work began to install straight and peripheral bottom plates on the bottoms of inner tanks. Assembly of dome and suspended roof structures of all tanks started. Installation of tank roof components necessary for pneumatic roof lifting commenced. Concurrently, hydraulic engineering work in the offshore part of the HST subproject (i.e. construction of the wharf and the dredging work) is underway. Piling work on the wharf was completed. Assembly of a part of pipe bridges was completed and pipeline laying and welding began. As at the date of this report, work was under way to construct the main terminal building, transformer station building, and a fire and cooling water pumping station building. On February 22nd 2021, Annex 1 was signed to the contract with Przedsiębiorstwo Robót Czerpalnych i Podwodnych Sp. z o.o. for the ‘Planning and performing of dredging work to increase depth from 10.5 to 12.5 metres as part of the Polimery Police project’, reducing the value and changing the scope of the contract.

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PDH and PP units with a logistics base In the three months ended March 31st 2021, the deliveries of equipment and apparatus to the construction site were continued. By the date of issue of this report, all propylene storage tanks, 110kV transformers necessary for the operation of the future power system, propylene production reactors and a propane-propylene splitter, one of the key equipment items at the PDH unit, had already been delivered. Deliveries will also be continued in the next reporting period. Blending silos and two PP reactors were placed on the support structures of the PP unit. Prefabrication of 30 storage silos began (by the date of this report, 30 silos were assembled out of 60 prepared for installation). The assembly of a heavy crane (Ring Crane) structure started. The crane will be used to mount in place a propane-propylene splitter, the key component of the PDH unit. The crane weight is approximately 754 tonnes and the counterweight is 1,600 tonnes. The operating radius is up to 60 metres. The height of the boom is 121 metres. In the first quarter of 2021, floor slabs were made for the storage silos building, PP electric substation building, and the PP automation systems building. In addition, construction work was carried out in the Logistics Infrastructure Administration building, and bases for the main roads at the PP unit were made. Installation and welding work on the underground and ground piping continues.

Financing of the project On January 29th 2021, Grupa Azoty Polyolefins S.A. made a representation on the establishment of mortgages over track properties acquired from the Company in January 2021, where the Project is being implemented, in favour of the Security Agent (Bank Polska Kasa Opieki S.A.). The mortgages supplement the security package under the Credit Facilities Agreement of May 31st 2020. On February 22nd 2021, a notarial deed was signed to establish an easement on the Parent’s properties in favour of Grupa Azoty Polyolefins S.A. Moreover, on February 25th 2021, the associate Grupa Azoty Polyolefins S.A. received confirmation from Bank Pekao S.A., acting as the Facility Agent, that the conditions precedent under the Credit Facilities Agreement had been fulfilled. Thus, the last stage of the process to raise debt financing for the Project was completed. On March 4th 2021, Grupa Azoty Polyolefins S.A. sold perpetual usufruct rights to land and ownership rights to real property located on the premises of the Police Maritime Port to Zarząd Morskiego Portu Police Sp. z o.o. (“ZMPP”). Together with the agreement referred to above, an additional agreement was concluded to maintain the security in rem over said real property established in favour of the financing institutions. In addition, a conditional lease contract with ZMPP concerning the abovementioned real property took effect. The transactions were required to be carried out under the Credit Facilities Agreement.

Other material events In the first quarter of 2021, Grupa Azoty Polyolefins S.A. purchased precious metals (platinum and palladium) necessary for the production of Oleflex and SHP catalysts.

KEY CAPEX PROJECTS OF THE PARENT In the first three months of 2021, the Company launched nine new capex projects with an aggregate budget of PLN 29,230 thousand and continued 39 projects commenced in previous years. Presented below are the selected and ongoing major investment projects.

Decoupling of demineralised water production from the level of salinity in the Oder river and increasing the units’ capacity to produce process waters The upgrade and expansion of the water treatment and demineralisation station will help protect the Group against periodic increases in salinity of the Oder river and enable using water from the river as the Company’s only source of supply. The project will also secure the supply of demineralised water to Grupa Azoty Polyolefins S.A. units.

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The desalination units have been launched, and work is currently under way on the last section of the filters. The second circulator was delivered to the contractor for upgrading. Prefabrication of the ion exchange line is in progress. Project budget: PLN 108,000 thousand, expected completion: 2022

Upgrade of the 220/110 kV GPZ Police substation to connect and supply electricity to the propane dehydrogenation and polypropylene production unit The upgrade of the transformer/switching station of the Main Point of Power Supply (GPZ) Police will secure the distribution of electricity for the purposes of the planned propane dehydrogenation and polypropylene production unit (Grupa Azoty Polyolefins S.A.). On-site assembly of autotransformer No. 2 was completed. The 110 kV fields supplying Grupa Azoty Polyolefins S.A.’s unit and 110 kV coupling bays were assembled. Currently, work is under way to modernise the control room of the Main Point of Power Supply (GPZ) and auxiliary service systems. The delivery of switching equipment is under way. Working plans and specifications for the unit as well as the design of the Control and Supervision System are being drawn up, work to alter the station infrastructure and on a new autotransformer station is under way, the control room of the Main Point of Power Supply (GPZ) is undergoing thermal modernisation, and the overpressure unit in the 220kV and 110kV transformer stations is being upgraded. Project budget: PLN 56,000 thousand, expected completion: 2022 Recycling of hydrogen originating from the propylene unit to be used at the ammonia unit The purpose of the project is to utilise a stream of pure hydrogen, a by-product of propane dehydrogenation (PDH), at the ammonia unit, and to ensure that the hydrogen stream can be delivered from the ammonia unit to start the PDH unit. Corporate approvals were obtained for the project. The tender process for the supply of burners and catalysts for the secondary reformer has already been closed. Bids were also received for the procurement and assembly of control and instrumentation equipment and fittings, as well as for the construction and delivery of F302 steam expanders. Project budget: PLN 30,000 thousand, expected completion: 2023

WA II tower replacement on Line 7 The replacement of the absorption tower is aimed at ensuring continuing operation of the sulfuric acid production plant and preventing an unexpected accident creating a risk of sulfuric acid leakage. A tower staircase was assembled. The assembly of the acid resistant brickwork, as well as of the tray and tower foundations, is still under way. The assembly of gas pipelines has begun. Project budget: PLN 16,350 thousand, expected completion: 2022

Extension of the logistics base: Stage 2 – Phase 2 The purpose of the project is to build a new warehouse for packaged fertilizers with an area of 4,000 square metres, which will store approximately 4,000 tonnes of products in 500 kg big-bags. The scope of the project includes the construction of a pre-picking area, which will increase the storage capacity of the base by approximately 5,000 tonnes. In total, the Company will be able to store 9,000 tonnes of fertilizers (over an area of 8,929 square metres). Corporate approvals were obtained for the project. Railway works were planned and agreed as part of the project. Project budget: PLN 15,000 thousand, expected completion: 2022

Facility 508 tray with a sedimentation tank and an acidic wastewater drain The existing tray under the phosphoric and sulfuric acid tanks is in a poor technical condition. The tanks are tilting as a result of the continuing settlement of the tray and tank footing under the weight of the materials. All the construction and assembly works on the facility were completed. Currently, an administrative body (the Police County Building Inspection Officer) is in the process of inspecting the construction work to certify its completion. Preparations for the pre-commissioning and commissioning runs of the new plant are under way.

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Project budget: PLN 11,050 thousand, expected completion: 2021

Construction of PULNOx technical-grade urea solution production, storage and loading facility The project will guarantee the availability of PULNOx solution for the existing and future customers of the Company. Higher output of the solution will also increase revenue. Work is under way to optimise the operation of the unit. Project budget: PLN 5,900 thousand, expected completion: 2021

2.7. Factors which will affect performance over at least the next reporting period A universal factor which may affect the Company’s performance in the next quarter is the economic situation caused by the pandemic. Presented below are also the anticipated market trends for the main products and raw materials.

Prices of raw materials and products

Compound fertilizers The rapid increase in the prices of phosphate fertilizers flattened out at the beginning of the second quarter, as did demand in Europe and the US, while demand in India, Pakistan and Bangladesh is expected to grow. Demand in these countries should support price increases in May (at least on some markets). In June, a small oversupply is expected.

Urea Another tender for the supply of urea is expected to be announced in India in April. There is still some demand for urea in southern Europe, but customers expect lower prices. Freight prices are on a downward trend, which will push CFR prices down.

Ammonia In May, after the shutdowns in Saudi Arabia will have ended, the availability of ammonia on the market will increase. The ammonia prices are expected to stabilise in the Black Sea and Baltic Sea regions in May.

Titanium white It is difficult to predict how demand will develop in the coming months since the buyers’ interest during the typically low-demand winter season was much higher than expected. Demand has been growing surprisingly well. If international freight rates and logistics improve, the European players may again become interested in supplies from Asia. From the buyers’ perspective, material factors include mainly depleted stocks on the European market (consumed as a result of the higher-than- expected demand during the usually slower winter months), the approaching peak of the coating season, and import-related challenges.

RAW MATERIALS

Natural gas Given the high demand and growth of LNG prices in Asia from mid-March, low stocks of gas in the EU’s storage facilities, and overhauls of the Norwegian gas infrastructure planned for May and most of June, the gas prices may be relatively high in the second quarter of 2021.

Phosphate rock Forecasts indicate that DAP prices should go down slightly in the second and third quarters, after sales are redirected, mainly to the Indian market. Given the nearing end of the fertilizer application season, DAP prices are under pressure in China and South East Asia, as well as in Europe and the US. In 2021, there may be periodic spikes in the DAP and MAP prices in response to supply problems, but generally the prices of phosphate fertilizers are forecast to fall by the end of the year. The significant growth in phosphoric acid prices from the beginning of 2021 may cause a rise of a few US dollars in the prices of phosphate rock before the second quarter of 2021 ends. As the phosphoric

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acid and DAP markets are strongly correlated, if the prices of phosphoric fertilizers drop by the end of this year as forecast, the prices of phosphoric acid may also go down.

Potassium chloride Based on forecasts for the following months of 2021, the prices in Brazil, Africa and South East Asia may continue to go up on the back of good crop forecasts, strong demand, and limited supply reported by potassium chloride producers. The US NOLA market, after intensive growth in the first quarter, should remain stable in the coming months, with no price growth expected. In real terms, the contract prices for China are relatively low compared with the spot markets, and some new price arrangements are possible here, but it is unlikely that the prices will reach the level agreed for India, that is USD 280 per tonne (CFR).

Sulfur Based on short-term forecasts for the prilled sulfur market, the prices in the second quarter should go down slightly because of very limited activity of the Chinese market (which is drawing on its own accumulated stocks). In the coming quarters, supply in the Middle East and the US should improve, which will also push down prices, but ultimately the prices of prilled sulfur are forecast to remain above USD 100 per tonne until the end of this year. For the European liquid sulfur market, a significant price rise is expected in the second quarter. Similarly to the prilled sulfur market, the market of liquid sulfur is projected to see a price reduction further on into the year, as the operating metrics of the European refineries have improved. In both cases, the demand-supply balance will largely depend on whether further restrictions related to the coronavirus pandemic are imposed. It can be concluded that the situation will improve in the summer as a result of people’s increased mobility (as the restrictions are lifted), the demand for fuels will increase, as will production volumes of refining sulfur.

Ilmenite and titanium slag In the first half of 2021, ilmenite prices are expected to continue on the upward trend, which may stop at the earliest in the second half of 2021, as the market saturates and oversupply occurs. The price of titanium slag remains relatively high, but due to lower interest in the product it may be subject to a downward correction.

MACROECONOMIC FACTORS

Exchange rates Current developments on the financial markets, related to the accelerating vaccination campaign and expectations of a strong economic recovery once the COVID-19 restrictions are lifted and the pandemic is brought under control, have resulted in increased exposure to market assets that are considered risky. In the medium term, this should drive an appreciation of the złoty from current levels. The Polish currency is fundamentally undervalued, but its deeper appreciation is not likely sooner than after the second quarter, once the local risk factors have ceased. In the Company’s opinion, the Polish złoty will remain weak throughout the second quarter, with a low risk of depreciation above the levels reported in March 2021. In the short term, the złoty may continue to be under the pressure of the National Bank of Poland’s position to keep the national currency weak and the Supreme Court’s pending judgment on CHF loans. The złoty’s weakening in relation to convertible currencies should be a moderately supportive factor, helping the Company deliver better-than-expected performance in respect of its foreign currency exposure in the second quarter of 2021. Risks may include market volatility, which may result in temporary losses on the measurement of hedging forward contracts entered into in previous periods.

Interest rates in Poland The Polish Monetary Policy Council is not expected to change the NBP’s interest rates this year. Neither the ECB nor the FED are expected to cut the interest rates until the end of the year as they focus on introducing unconventional quantitative easing instruments and supporting interbank liquidity. The main reference interest rate for the Company’s loans (1M WIBOR) should remain at approximately 0.20% throughout the current year. In conclusion, the Company expects that the currently low interest rates should remain unchanged until the end of 2021 with respect to the

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currencies used to finance its activities (PLN and EUR). This will help maintain the Company’s financing costs at historically low levels, allowing it to safely service its debt.

CO2 emission allowances

The prices of CO2 emission allowances remain on a strong upward trend, taking the form of a speculative bubble. A deeper price correction is only likely to result from sustained deterioration in the global investment sentiment. In the second quarter of 2021, further price increases are highly probable. Thanks to the purchase of emission allowances in previous years, the Company has largely secured the amount required for 2021. A sharp increase in the prices of emission allowances in the coming years will drive up the cost of energy generation and the cost of the Company’s products.

3. Other information 3.1. Significant events Closing of the financing of Polimery Police project On February 25th 2021, Grupa Azoty Polyolefins S.A. received confirmation from Bank Pekao S.A., acting as the Facility Agent, that the conditions precedent under the Credit Facilities Agreement had been fulfilled. As a result, Grupa Azoty Polyolefins S.A. may now, subject to specific conditions for the first drawdown on each Facility and additional conditions for each disbursement, which do not differ from standard terms and conditions applicable to similar financing arrangements, apply for disbursement of funds under the Credit Facilities to finance the Polimery Police project. Thus, the last stage of the process to raise debt financing for the project has been successfully completed.

Supporting the fight against COVID-19 In February 2021, Company donated to the Pomeranian Medical University in Szczecin PLN 100 thousand for the purchase of two laminar flow cabinets to be used to prevent and fight COVID-19. Since the onset of the pandemic, the Company has transferred donations with a total value of over PLN 1m to help fight the coronavirus.

Dividend from associate On April 26th 2021, the Annual General Meeting of KEMIPOL Sp. z o.o. passed a resolution to distribute dividend from the profit generated in 2020. The Company is to receive PLN 14,212 thousand. The dividend will be paid by July 31st 2021.

Important information about the carbon market

In the three months ended March 31st 2021, the prices of CO2 emission allowances (EUAs) on the exchange market ranged between EUR 31 and EUR 44, continuing in a strong upward trend started in the fourth quarter of 2020. Since March last year, when EUA prices hit their low, they have risen threefold, to historical highs, exceeding analysts’ forecasts. The immediate impulse to accelerate the upward trend was the approval, at the end of 2020, of more ambitious emission reduction targets for the European Union of at least 55% by 2030. A speculative bubble is growing on the market. The high prices of emission allowances are supported by growths in other energy commodity markets and equity markets, as well as the presence of hedge funds, which take long-term positions in the expectation of continuing price hikes.

The Company is purchasing allowances for 2021 and 2022–2023 based on a common model of CO2 emission allowance management applicable at the Grupa Azoty Group and an approved procurement plan. As at March 31st 2021, the Company’s requirements with respect to EUAs for 2021 were largely covered by purchases made in previous years.

3.2. Significant agreements No significant trade agreements were executed in the first quarter of 2021.

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Significant financing agreements In connection with the process carried out in the first quarter of 2021 by the Parent and the Grupa Azoty Group companies (the “Group Companies”) to optimise the financing of the Group Companies’ day-to-day operations by increasing the availability and level of financing under the umbrella Reverse Factoring and Factoring structures, on April 29th 2021 the Parent and the Group Companies entered into Reverse Factoring Agreements with CAIXA Bank S.A. and ING Commercial Finance Polska Sp. z o.o. The Group Companies also intend to enter into a Reverse Factoring Agreement with Pekao Faktoring Sp. z o.o. and a Factoring Agreement with Pekao Faktoring Sp. z o.o. and BNP Paribas Faktoring Sp. z o.o.1

3.3. Sureties and guarantees Guarantees Table 14. Guarantees provided by the Parent under bank credit limits as at March 31st 2021 Amount Amount Type/ Curren Beneficiary Details Date (currency (PLN ‘0 cy Issuer ) 00) Guarantor’s obligation as PKO BP S.A. STATE TREASURY general security in customs PLN Mar 20 2018 NA 1,000 transactions (...) Payment guarantee for Nov 15 2017 PKO BP S.A. PSE S.A. electricity transmission PLN NA 1,300 (annex) contract Guarantor’s obligation as general security in customs PKO BP S.A. STATE TREASURY PLN May 13 2019 NA 250 transactions (...) temporary storage STATE TREASURY (GIOŚ – Chief Performance bond for iron PKO BP S.A. Environmental sulfate (waste) supply PLN Jul 29 2019 NA 1,182 Protection contract Inspector) STATE TREASURY (GIOŚ – Chief Performance bond for iron PKO BP S.A. Environmental sulfate (waste) supply PLN Jul 29 2019 NA 1,697 Protection contract Inspector) STATE TREASURY (GIOŚ – Chief Performance bond for iron PKO BP S.A. Environmental sulfate (waste) supply PLN Nov 25 2019 NA 3,444 Protection contract Inspector) Performance bond in open PKO BP S.A. PGE S.A. PLN Mar 25 2020 NA 31 tender contract Performance bond in open PKO BP S.A. PGE S.A. PLN Mar 25 2020 NA 42 tender contract STATE TREASURY (GIOŚ – Chief Performance bond for iron Dec 20 2020 PKO BP S.A. Environmental sulfate (waste) supply PLN NA 2,362 Protection contract (annex) Inspector) STATE TREASURY Performance bond for iron Dec 20 2020 PKO BP S.A. (GIOŚ – Chief sulfate (waste) supply PLN NA 3,464 Environmental contract (annex) Protection

1 For details, see Current Report No. 12/2021 on Execution of a factoring agreement with ING Commercial Finance Polska S.A. and Current Report No. 13/2021 on Execution of a factoring agreement with CaixaBank S.A. Oddział w Polsce (Polish Branch) of April 29th 2021.

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Inspector) Payment guarantee for PKO BP S.A. PSE S.A. electricity transmission PLN Nov 6 2020 NA 1,500 contract STATE TREASURY (GIOŚ – Chief Performance bond for iron BNP Environmental sulfate (waste) supply PLN Mar 18 2021 NA 5,132 PARIBAS Protection contract Inspector) Performance bond in open PKO BP S.A. PGE S.A. PLN Mar 31 2021 NA 65 tender contract Performance bond in open PKO BP S.A. PGE S.A. PLN Mar 31 2021 NA 97 tender contract 21,561

As at March 31st 2021, the subsidiary Grupa Azoty Police Serwis Sp. z o.o., as the only Group company, had issued guarantees: two guarantees for a total amount of PLN 74 thousand. As at the reporting date, the total amount of guarantees provided to the Parent was PLN 8,309 thousand. As at March 31st 2021, the subsidiary Grupa Azoty Police Serwis Sp. z o.o. received guarantees for a total amount of PLN 7,865 thousand. Moreover, in connection with the Credit Facilities Agreement, the Parent and Grupa Azoty S.A. entered into a support loan provision guarantee agreement with Grupa Azoty POLYOLEFINS and Bank Polska Kasa Opieki S.A. (acting as the facility agent and security agent) for up to EUR 105m in the form of a subordinated loan, the main objective of which is to cover a potential liquidity deficit, construction cost overruns, operating costs and debt service costs in the operation phase.

Sureties Table 15. Sureties granted by the Parent with respect to credit facility agreements and contracts as at March 31st 2021 Amount Amount Type/ Currenc Beneficiary Details Date (curren (PLN ‘000 y Issuer cy) ) Surety for Revolving credit syndicated credit Grupa Azoty S.A. facility PLN Jun 29 2018 NA 1,200,000 facility agreement Surety for PKO BP Overdraft facility credit facility Grupa Azoty S.A. PLN Jun 29 2018 NA 124,000 agreement (overdraft) Multi-purpose Surety for PKO BP Grupa Azoty S.A. credit facility PLN Jun 29 2018 NA 96,000 credit facility (MPCF) agreement Guarantee for EIB Credit facility Grupa Azoty S.A. PLN May 28 2015 NA 220,000 credit facility agreement Guarantee for EBRD Credit facility Grupa Azoty S.A. PLN May 28 2015 NA 60,000 credit facility agreement Guarantee for EIB Credit facility Grupa Azoty S.A. EUR Jan 25 2018 58,000 270,297 credit facility agreement Guarantee for EBRD Credit facility Grupa Azoty S.A. PLN Jul 26 2018 NA 200,000 credit facility agreement 2,170,29 7

As at March 31st 2021, none of the subsidiaries had any sureties issued.

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3.4. Shareholding structure Below are listed shareholders holding directly, or indirectly through subsidiaries, at least 5% of total voting rights at the General Meeting as at the date of this report, along with information on the number of shares held by such entities, their respective ownership interests, the number of voting rights held, and their share in total voting rights at the General Meeting.

Table 16. Shareholding structure as at this report date % of total Number of Ownership Number of voting shares interest (%) voting rights Shareholder rights Grupa Azoty S.A. 78,051,500 62.86 78,051,500 62.86 Agencja Rozwoju Przemysłu S.A. 16,092,634 12.96 16,092,634 12.96 OFE PZU Złota Jesień 16,299,649 13.13 16,299,649 13.13 State Treasury 9,273,078 7.47 9,273,078 7.47 Other shareholders 4,458,907 3.58 4,458,907 3.58 124,175,768 100.00 124,175,768 100.00

The actual shareholding structure may differ from the presented one if there were no events obligating a shareholder to disclose its new shareholding or, even if such events did occur, a shareholder failed to provide the information.

3.5. Parent shares held by management and supervisory personnel As at the end of the reporting period (March 31st 2021) and the date of this report, no members of the Parent’s Supervisory Board held any shares in the Parent. Since the date of issue of the previous report, there have been no changes in the holdings of Parent shares by the supervisory personnel. Table 17. Parent shares held by management personnel Number of shares / voting rights As at As at the date of As at Jan 1 2021 Mar 31 2021 this report Wojciech Wardacki, - - - Ph.D.* Mariusz Kądziołka* - - - Tomasz Panas* - - - Anna Tarocińska** 1 1 1 Mariusz Grab*** - - - Michał Siewierski**** - - - * Removed from the Management Board of the eighth term of office by a Supervisory Board resolution of April 30th 2021. ** Member of the Management Board suspended from duties as Member of the Management Board of the eighth term of office since July 20th 2020. Appointed to the Management Board of the ninth term of office as a representative of employees by a Supervisory Board resolution of April 30th 2021. *** President of the Management Board, appointed by a Supervisory Board resolution of April 30th 2021. **** Vice President of the Management Board appointed by a Supervisory Board resolution of April 30th 2021.

Since the date of issue of the previous report, there have been no changes in the holdings of Parent shares by the management personnel.

3.6. Composition of the Management Board and the Supervisory Board Parent’s Management Board Composition of the Parent’s Management Board as at March 31st 2021: • Wojciech Wardacki – President of the Management Board of the eighth joint term of office,

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Grupa Azoty Zakłady Chemiczne Police Group Management’s discussion and analysis: Q1 2021 (all amounts in PLN '000 unless indicated otherwise)

appointed by Supervisory Board Resolution No. 223/VII/18 of May 30th 2018; • Mariusz Kądziołka – Vice President of the Management Board of the eighth joint term of office, appointed by Supervisory Board Resolution No. 102/VIII/20 of May 28th 2020; • Tomasz Panas – Vice President of the Management Board of the eighth joint term of office, appointed by Supervisory Board Resolution No. 225/VII/18 of May 30th 2018; • Anna Tarocińska – Member of the Management Board of the eighth joint term of office, elected by Parent employees and appointed by Supervisory Board Resolution No. 226/VII/18 of May 30th 2018.As of July 20th 2020, by way of Supervisory Board Resolution No. 112/VIII/20 Ms Anna Tarocińska was suspended from duties as Member of the Company’s Management Board. On April 30th 2021, all Members of the Management Board of the eighth term of office were removed by Supervisory Board resolutions; thus the eighth term of office of the Management Board expired and the Supervisory Board appointed a new Management Board of the ninth term of office. As at the date of authorisation of these interim condensed consolidated financial statements for issue, the composition of the Management Board of the new ninth term of office was as follows: • Mariusz Grab – President of the Management Board of the ninth joint term of office, appointed by Supervisory Board Resolution No. 216/VIII/21 of April 30th 2021, • Michał Siewierski – Vice President of the Management Board of the ninth joint term of office, appointed by Supervisory Board Resolution No. 217/VIII/21 of April 30th 2021, • Anna Tarocińska – Member of the Management Board of the ninth joint term of office, elected by Parent employees and appointed by Supervisory Board Resolution No. 215/VIII/21 of April 30th 2021.

Powers and responsibilities of the Parent's Management Board In accordance with the Commercial Companies Code and the Articles of Association, the Management Board is the Company's executive body responsible for managing its affairs and representing it in and out of court. The Management Board, headed by the President, manages the Company and represents it before third parties. All matters connected with the management of the Company’s affairs which are not reserved under the law or the Articles of Association for the General Meeting or the Supervisory Board, fall within the scope of powers and responsibilities of the Management Board. The Management Board operates in compliance with effective laws and is accountable for the management of the Company's affairs before the Supervisory Board and the General Meeting.

Division of powers and responsibilities within the Management Board Pursuant to Supervisory Board Resolution No. 26/VI/13 on approval of amendments to the Rules of Procedure for the Management Board of Grupa Azoty Zakłady Chemiczne Police S.A., the division of powers and responsibilities with regard to supervision of the Company’s organisational areas is each time determined and approved by the Company’s Management Board by way of a resolution and notified to the Supervisory Board. As at the issue date of this report, the division of powers and responsibilities among the Management Board members was governed by: • Management Board Resolution No. 1/IX/21 of May 4th 2021 on the division of powers and responsibilities among the Management Board Members with regard to the supervision of organisational areas and business processes; • Organisational Rules adopted by the Management Board by Resolution No. 9/VI/12 of July 6th 2012, as amended (most recently amended by Management Board Resolution No. 989/VIII/20 of August 7th 2020, approved by Supervisory Board Resolution No. 121/VIII/20 of August 14th 2020). Pursuant to Management Board Resolution No. 1/IX/21 of May 4th 2021, the powers and responsibilities are divided among the Company’s Management Board Members as follows: • Mariusz Grab, President of the Management Board, Chief Executive Officer: o Central Dispatch Division, o Internal Audit Division, o Communication and Investor Relations Office, o Security Office,

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o Technology Development Office, o Technical Department, o Nitro Business Unit, o Logistics Centre, o Strategic Procurement Department, o Human Resources and Management Department. • Michał Siewierski, Vice President of the Management Board: o Corporate Controlling Department, o Finance Department, o Controlling Department, o Corporate Agro Sales Department, o Tendering Department, o Pigments Business Unit, o Fertilizer Sales Department. • Anna Tarocińska, Member of the Management Board: o Fertilizers Business Unit, o Technical Safety Department, o Power Centre, o Infrastructure Centre, o Laboratory Analysis Centre. As regards the division of duties among the Management Board Members, the resolution also sets out their powers and responsibilities in the coordination of business processes. The Management Board Members oversee and coordinate the following business processes: • Mariusz Grab, President of the Management Board, Chief Executive Officer: o Strategic management, o Investment project management, o Availability of feedstocks and raw materials, o Logistics support, o Human Resources management. • Michał Siewierski, Vice President of the Management Board: o Financial management, o Financial controlling, o Comprehensive customer support. • Anna Tarocińska, Member of the Management Board: o Production asset management, o Technical and environmental safety. The President of the Management Board, assisted by the unit responsible for providing support to the Company’s governing bodies, performs ongoing supervision of the implementation of resolutions of the Parent's Management Board, Supervisory Board, and General Meeting. The President of the Management Board convenes Management Board meetings on his/her own initiative, or at the request of a member of the Management or Supervisory Board, sets the agenda and chairs the meetings. In the President’s absence, these activities are performed by a Management Board member designated by the President of the Management Board. In accordance with the Organisational Rules of Grupa Azoty Zakłady Chemiczne Police S.A., President of the Management Board – Chief Executive Officer exercises general supervision of the Company’s operations and is assisted by directors of departments, business units and centres, as well as by managers of other organisational units. Powers and responsibilities of the President of the Management Board - Chief Executive Officer include: • general supervision and coordination of Company’s activities, • promoting a good image of the Company as a corporate citizen, • managing the work of the Company’s Management Board and presiding over its meetings, • performing the Company's responsibilities as an employer within the bounds of the Polish Labour Code, • supervising the restructuring and privatisation processes at the Company and its

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subsidiaries, • supervising and coordinating business processes specified in the Management Board Rules of Procedure, and supervising organisational units that report directly to the President of the Management Board – Chief Executive Officer, • approving internal audit, business control and stocktaking plans, as well as making decisions on their implementation, and • representing the Company in and out of court, jointly with another Management Board member or proxy.

Supervisory Board The composition of the Parent’s Supervisory Board as at March 31st 2021 was as follows: • Mirosław Kozłowski – Representative of the State Treasury, Chairman of the Supervisory Board of the eighth joint term of office, appointed on June 25th 2019 (appointed Chairman on August 24th 2020); • Paweł Bakun – Deputy Chairman of the Supervisory Board of the eighth joint term of office, appointed by Resolution No. 5 of the Parent’s Extraordinary General Meeting of August 24th 2020 (appointed Deputy Chairman on the same date); • Bożena Licht − Secretary of the Supervisory Board of the eighth joint term of office, appointed by Resolution No. 19 of the Parent’s Annual General Meeting of June 25th 2019 (appointed Secretary on July 2nd 2019); • Agnieszka Dąbrowska − Member of the Supervisory Board of the eighth joint term of office, appointed by Resolution No. 20 of the Parent’s Annual General Meeting of June 25th 2019; • Iwona Wojnowska − Member of the Supervisory Board of the eighth joint term of office, elected by the employees and appointed by Resolution No. 21 of the Parent’s Annual General Meeting of June 25th 2019; • Andrzej Rogowski − Member of the Supervisory Board of the eighth joint term of office, elected by the employees and appointed by Resolution No. 22 of the Parent’s Annual General Meeting of June 25th 2019. After the end of the reporting period, the composition of the Company’s Supervisory Board has changed as follows: • On April 9th 2021, the Company was notified by the Minister of State Assets, acting in the exercise of the rights attached to shares held by the State Treasury, of the removal of Mirosław Kozłowski from the Supervisory Board, with effect from April 9th 2021, and on the appointment of Krzysztof Kozłowski to the Supervisory Board, with effect from April 10th 2021. • On May 11th 2021, by Resolution No. 5, the Extraordinary General Meeting appointed Krzysztof Kozłowski as Chairman of the Company’s Supervisory Board.

As at the date of authorisation of these interim condensed consolidated financial statements for issue, the composition of the Supervisory Board was as follows: • Krzysztof Kozłowski – Chairman of the Supervisory Board of the eighth joint term of office, appointed to the Supervisory Board on April 10th 2021, as notified by the Minister of State Assets; • Paweł Bakun – Deputy Chairman of the Supervisory Board of the eighth joint term of office, appointed by Resolution No. 5 of the Extraordinary General Meeting of August 24th 2020; • Bożena Licht − Secretary of the Supervisory Board of the eighth joint term of office, appointed by Resolution No. 19 of the Parent’s Annual General Meeting of June 25th 2019; • Agnieszka Dąbrowska − Member of the Supervisory Board of the eighth joint term of office, appointed by Resolution No. 20 of the Parent’s Annual General Meeting of June 25th 2019; • Andrzej Rogowski − Member of the Supervisory Board of the eighth joint term of office, elected by the employees and appointed by Resolution No. 22 of the Parent’s Annual General Meeting of June 25th 2019; • Iwona Wojnowska − Member of the Supervisory Board of the eighth joint term of office, elected by the employees and appointed by Resolution No. 21 of the Parent’s Annual General Meeting of June 25th 2019.

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The Supervisory Board operates on the basis of: • the Commercial Companies Code of September 15th 2000, • the Act on Commercialisation and Privatisation, • the Accounting Act, • the Act on Statutory Auditors, Audit Firms, and Public Oversight, • the Company’s Articles of Association, • the Rules of Procedure for the Supervisory Board of Grupa Azoty Zakłady Chemiczne Police S.A.

Audit Committee On November 23rd 2009, the Supervisory Board established an Audit Committee (Resolution No. 342/IV/09) to improve the effectiveness of the Board’s work and to strengthen control over the Parent and the Group. The Audit Committee is an advisory body acting collectively within the Supervisory Board. As at March 31st 2021, the composition of the Audit Committee was as follows: • Paweł Bakun – Chairman of the Audit Committee, appointed by Supervisory Board Resolution No. 122/VIII/20 of August 24th 2020; • Agnieszka Dąbrowska – Member of the Audit Committee, appointed by Supervisory Board Resolution No. 4/VIII/19 of July 2nd 2019; • Mirosław Kozłowski – Member of the Audit Committee, appointed by Supervisory Board Resolution No. 5/VIII/19 of July 2nd 2019; • Andrzej Rogowski – Member of the Audit Committee, appointed by Supervisory Board Resolution No. 6/VIII/19 of July 2nd 2019. On April 9th 2021, Mirosław Kozłowski ceased to serve on the Audit Committee following his removal from the Supervisory Board. As at the date of authorisation of the interim condensed consolidated financial statements for issue, the composition of the Audit Committee was as follows: • Paweł Bakun – Chairman of the Audit Committee, appointed by Supervisory Board Resolution No. 122/VIII/20 of August 24th 2020; • Agnieszka Dąbrowska – Member of the Audit Committee, appointed by Supervisory Board Resolution No. 4/VIII/19 of July 2nd 2019; • Andrzej Rogowski – Member of the Audit Committee, appointed by Supervisory Board Resolution No. 6/VIII/19 of July 2nd 2019. The Audit Committee's tasks include in particular: a) monitoring of: o the financial reporting process, o the effectiveness of internal control and risk management systems as well as internal audit systems in place at the Company, including effectiveness of the financial reporting process, o performance of financial audit, in particular an audit conducted by the audit firm, taking into account all recommendations and findings of the Audit Oversight Commission resulting from audits carried out at the audit firm; b) controlling and monitoring of the independence of the qualified auditor and the audit firm, in particular when the audit firm also provides services other than the audit of financial statements; c) informing the Supervisory Board of the audit findings and explaining how the audit contributed to the reliability of the Company’s financial reporting and what role the Audit Committee played in the audit; d) assessing the auditor’s independence and approving the provision of permitted non-audit services by the auditor; e) developing a policy for selecting an audit firm to conduct the audit; f) developing a policy for providing permitted non-audit services by the audit firm carrying out the audit, entities related to the audit firm or a member of the audit firm’s network; g) establishing an audit firm appointment procedure for the Company; h) giving recommendations to the Supervisory Board on the appointment of auditors or auditing firms in line with the procedures referred to in sections e and f;

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i) submitting recommendations to ensure the reliability of the financial reporting process at the Company. Detailed rules of operation of the Audit Committee are provided for in the Rules of Procedure for the Audit Committee approved by Resolution No. 159/VII/17 of the Company’s Supervisory Board of December 28th 2017.

3.7. Awards and distinctions The Central Institute for Labour Protection – National Research Institute awarded Grupa Azoty Police with the Gold Card of Safe Work Leader for 2021–2022 in recognition of its performance in terms of labour safety and working conditions improvements.

4. Other information Management Board’s position on the achievement of forecasts As no performance forecasts were published, the position of the Parent’s Management Board concerning achievement of such forecasts is not presented.

Parent’s branches (divisions) The Company does not operate any branches or divisions outside of its principal place of business.

Shares In the three months ended March 31st 2021, the Parent did not issue, redeem or repay any debt or equity securities. The Company had spent the proceeds from public offerings by the end of 2020. The proceeds were used in line with the original issue objectives. There are no agreements known to the Company which may cause future changes in the percentages of shares held by the existing shareholders and bondholders. The Company does not operate any employee share ownership plan.

Litigation The Company is not party in any material court, arbitration or administrative proceedings concerning liabilities or receivables referred to in the Minister of Finance’s Regulation on current and periodic information, dated March 29th 2018 (Dz.U. of 2018, item 757, published on April 20th 2018).

Events after the reporting date On May 5th 2021, the Company’s Management Board passed a resolution recommending that the Company’s entire net profit for the financial year 2020, of PLN 83,708,317.51, be allocated to the Company’s statutory reserve funds. Retaining the profit with the Company will ensure compliance with the requirements of the Commercial Companies Code with respect to statutory reserve funds, which, following an increase in the Company’s share capital through an additional issue of Company shares dedicated to the Polimery Police project (in January 2020, an increase in the Company’s share capital from PLN 750.0m to PLN 1,241.8m was registered), are PLN 10.8m below the level required under the Commercial Companies Code. Accordingly, at least PLN 6.7m of profit earned in 2020 should be contributed to statutory reserve funds. In 2020, the Company also carried out a process of financing the acquisition of shares in and the provision of subordinated loans to Grupa Azoty Polyolefins S.A., a special purpose vehicle implementing the Polimery Police project, which represented a major financial challenge for the Company with a scale not yet recorded in its operations. Polimery Police is the largest strategic investment project of the Grupa Azoty Group, under which in 2020 the Company contributed the key part of long-term capital (comprising equity and loans) of PLN 723m, of which over PLN 200m had been raised from sources increasing its debt. Therefore, retaining the profit will significantly improve the Company’s financial security and will allow it to smoothly implement its planned capital and maintenance projects, which must be regularly undertaken in the chemical industry.

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Grupa Azoty Zakłady Chemiczne Police Group Management’s discussion and analysis: Q1 2021 (all amounts in PLN '000 unless indicated otherwise)

In order to implement the resolution, the Management Board will request the Supervisory Board to assess the proposal and the General Meeting to allocate the 2020 net profit.2

2For details, see Current Report No. 15/2021 of May 5th 2021 on the Management Board’s recommendation regarding allocation of profit for 2020.

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Grupa Azoty Zakłady Chemiczne Police Group Management’s discussion and analysis: Q1 2021 (all amounts in PLN '000 unless indicated otherwise)

This consolidated quarterly report of the Grupa Azoty Zakłady Chemiczne Police Group for Q1 2021 contains 76 pages.

Signatures of Members of the Parent's Management Board

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Mariusz Grab Michał Siewierski President of the Management Board Vice President of the Management Board

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Anna Tarocińska Member of the Management Board

Police, May 12th 2021

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