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CERTIFIED TRANSLATION FROM POLISH

Annual Environmental & Social Report

1. Information about the Company Company Name: Grupa Azoty S.A. Company Address: ul. Kwiatkowskiego 8, 33-101 Tarnów, Poland Country: Poland Town/Location: Tarnów Company authorised representative: Piotr Skóra I certify that the data contained in this report completely and accurately represents the Company’s operations during the reporting period.

Signature: Piotr Skóra Title: Company Treasurer Date: April 8th 2020 Contact Details: Telephone: (+48) 14 637-48-52 Mobile:785 780 952 Email: [email protected]

Please provide key data on the Company performance, as well as production levels at each plant. For each of the 7 large plants please provide:

Item Cumulative

[PLN ‘000] 2018 2019

Revenue 1,825,771 1,987,039 Profit/(loss) on sales 60,049 99,937 EBIT 47,761 89,227 EBITDA 159,971 223,755 Net profit/(loss) 171,064 58,249

* In the reporting period the presentation of financial statements was changed to improve disclosures regarding the effect of certain transactions on the Company's assets and financial position. The comparative data was appropriately restated.

Key performance indicators in terms of energy consumption, emissions, use of natural resources, and carbon dioxide emissions;

See Section 4 and Section 5.

Number of staff employed and any change in employment over past 3 years

As at Dec 31 2017 As at Dec 31 2018 As at Dec 31 2019 Number of direct employees: 2,148 2,200 2,192 Number of contracted workers: - - -

Provide information on permits and each subsidiary’s compliance status with IPPC/IED (Integrated Pollution Prevention and Control Directive/Industrial Emissions Directive)

Currently, Grupa Azoty S.A. operates pursuant to the following decisions:

Integrated permits: • Decision by the Marshal of the Kraków Province dated June 20th 2012 Ref. No. SR-II- 1.7222.1.1.2012, granting an integrated (IPPC) permit to Zakłady Azotowe w Tarnowie-Mościcach for the Hydrogen Unit, valid for an indefinite term (permit amended by Decision of December 3rd 2014 Ref. No. SR-II-1.7222.2.13.2014); • Decision by the Governor of the Kraków Province dated February 16th 2007 Ref. No. ŚR.XIV.JI.6663-6-05, granting an integrated (IPPC) permit to Zakłady Azotowe w Tarnowie- Mościcach for the Park Infrastruktura Complex, valid for an indefinite term (permit amended by Decision of July 29th 2011 Ref. No. SR-II-1.7222.1.3.2011, Decision of September 11th 2012 Ref. No. SR-II-1.7222.1.7.2012, Decision of December 3rd 2014 Ref. No. SR-II-1.7222.2.17.2014, Decision of December 31st 2015 Ref. No. SR-II-1.7222.2.1.2015, and Decision of March 10th 2017 Ref. No. SR-II.7222.2.9.2016); • Decision by the Governor of the Kraków Province dated April 17th 2007 Ref. No. ŚR.XI.JI.6663-3- 06, granting an integrated (IPPC) permit to Zakłady Azotowe w Tarnowie - Mościcach for the POM Manufacturing and Compounding Complex, valid for an indefinite term (permit amended by Decision of July 29th 2011 Ref. No. SR-II-1.7222.1.1.2011 and Decision of December 3rd 2014 Ref. No. SR-II-1.7222.2.14.2014); • Decision by the Governor of the Kraków Province dated July 29th 2011 Ref. No. SW.II.1.AJ.7673- 10/09, granting an integrated (IPPC) permit to Zakłady Azotowe w Tarnowie - Mościcach for the Technical Grade Nitric Acid Unit, Calcium Ammonium Nitrate and Ammonium Nitrate Unit, Nitrogen Fertilizer Granulation Unit, and Dolomite Milling Unit, valid for an indefinite term (permit amended by Decision of December 3rd 2014 Ref. No. SR-II-1.7222.2.15.2014, Decision of August 16th 2016 Ref. No. SR-II.7222.2.8.2016, Decision of July 21st 2017 Ref. No. SR- II.7222.2.27.2016, and Decision of January 18th 2018 Ref. No. SR-II.7222.2.34.2017); • Decision by the Governor of the Kraków Province dated July 17th 2007 Ref. No. ŚR.XIV.JI.6663-2- 06, granting an integrated (IPPC) permit to Zakłady Azotowe w Tarnowie - Mościcach for the Caprolactam and Polyamide Manufacturing Complex (permit amended by Decision of March 16th 2009 Ref. No. SW.II.1.JI.7673-6/08, with respect to the Natural Polyamide Unit), amended in its entirety by Decision by the Marshal of the Kraków Province dated December 1st 2010 Ref. No. SW.II.1.AJ.7673-11/08 (permit amended by Decision of July 29th 2011 Ref. No. SR-II- 1.7222.1.2.2011, Decision of February 16th 2012 Ref. No. SR-II-1.7222.1.2.2012, and Decision of June 20th 2012 Ref. No. SR-II-1.7222.1.5.2012), Decision of October 21st 2013 Ref. No. SR-II- 1.7222.1.3.2013. - [Sulfuric acid production], Decision of December 3rd 2014 Ref. No. SR-II- 1.7222.2.16.2014 - [Sulfuric acid production], and Decision of January 23rd 2018 Ref. No. SR.II.7222.2.12.2017), valid for an indefinite term; • Decision by the Marshal of the Kraków Province dated June 28th 2018, Ref. No. SR- II.7222.13.4.2016, granting an integrated (IPPC) permit to Grupa Azoty S.A. for its Iron- Chromium Catalyst Plant II, valid for an indefinite term; • Decision by the Marshal of the Kraków Province dated July 1st 2015 Ref. No. SR-IV-1.7222.1.2015, granting an integrated (IPPC) permit to Grupa Azoty S.A. for the Central Wastewater Treatment Plant, amended by Decision Ref. No. SR-II.7222.1.7.2018.MM of April 20th 2018 and valid for an indefinite term; Air emissions • Decision by the Governor of the Kraków Province dated December 29th 2014, Ref. No. SR-II- 1.7221.2.2014, granting a permit for release of gases and dusts into the air to Grupa Azoty S.A., valid until December 28th 2024; • Notification of Grupa Azoty S.A.'s EC II CHP Plant Water Treatment Unit and Modified Plastics Facility to the Marshal of the Kraków Province Ref. No. TB/JK/1034/2014, dated November 24th 2014; EU ETS • Decision by the Marshal of the Kraków Province dated April 28th 2017, Ref. No. SR- II.7225.1.21.2016, granting permission to participate in the European Union Emissions Trading Scheme for the CHP plant located on the premises of Grupa Azoty S.A., including a Monitoring Plan, amended by Decision by the Marshal of the Kraków Province dated September 16th 2019, Ref. No. SR-II.7225.2.3.2019.AJ, including a Monitoring Plan, valid for an indefinite term; • Decision by the Marshal of the Kraków Province dated November 24th 2017, Ref. No. SR- II.7225.1.7.2016, granting permission to participate in the European Union Emissions Trading Scheme with respect to greenhouse gas emissions from the units manufacturing nitric acid, ammonia and bulk organic chemicals by way of cracking, reforming, oxidation or similar processes, with a daily production capacity of over 100 Mg, including a Monitoring Plan, amended by Decision by the Marshal of the Kraków Province Ref. No. SR-II.7225.3.12.2018.AJ, dated June 13th 2019, including a Monitoring Plan, valid for an indefinite term; Water and wastewater • Decision by the Mayor of Tarnów Ref. No. WGK.B-III.6210/16/02/03 dated January 13th 2003, granting a permit for collective water supply and collective wastewater discharge, valid for an indefinite term; • Decision by the Governor of the Kraków Province dated December 30th 2014 Ref. No. SR-IV- 1.7322.1.28.2014.MG, granting a permit for special use of water – abstraction of groundwater from an intake point located in Tarnów-Mościce, valid until December 31st 2034; • Decision by the Governor of the Kraków Province dated December 29th 2005 Ref. No. ŚR.XIV.MGą.6811-31-05, granting a permit for special use of water – abstraction of surface water from the Dunajec river, valid until December 31st 2025, amended by Decision Ref. No. KR.RUZ.4211.180.2018.IT dated November 16th 2018; • Decision by the Regional Water Management Authority of Kraków Ref. No. KR.RUZ.421.1.102.2019.AS dated July 1st 2019, granting a permit for discharge of wastewater containing substances particularly harmful to the water environment into the sewerage system of Zakład Oczyszczania Ścieków T.W. Sp. z o.o., valid until July 1st 2023; • Decision by the Marshal of the Kraków Province dated December 15th 2017 Ref. No. SR- IV.7322.1.259.2017.MG, granting a permit for discharge of wastewater into surface waters, valid until December 31st 2021; • Decision Ref. No. SR-IV.1.7328.1.2013.MG, establishing a protected zone for water intake points; Waste • Decision by the Marshal of the Kraków Province dated January 20th 2016 Ref. No. SR-III- 1.7244.4.9.2015.AG permitting Grupa Azoty S.A. to collect and process waste, valid until January 19th 2026; Other • Resolution of the Provincial Assembly of the Kraków Province of October 25th 2010, No. LI/833/10, establishing Industrial Zone at ZAT S.A. (Official Journal of the Province of Kraków, No. 580/2010, item 4475).

Reporting period: 2019

I. Inspection Report No. TAR 138/2019. Inspection at the Sulfuric Acid and Hydroxylamine Sulfate Department of the Plastics Business Segment, after the Kraków Provincial Inspectorate for Environmental Protection, Branch Office in Tarnów, was notified on June 3rd 2019 by a resident of Tarnów of a ‘cloud of yellow gases’ floating over Grupa Azoty S.A. facilities. Following the inspection, a requirement notice was issued including two decisions to be implemented. 1. In the event of an industrial accident, immediately notify the Kraków Province Commander-in-Chief of the State Fire Service and the Kraków Provincial Inspector for Environmental Protection, in accordance with Art. 264.1 of the Act of April 27th 2001 – the Environmental Protection Law (Dz.U. of 2018, item 799, as amended) 2. Submit to the Kraków Provincial Inspectorate for Environmental Protection, Branch Office in Tarnów, an account of the industrial accident that occurred on June 3rd 2019 at the Sulfuric Acid Plant and of the organisational and technical measures taken to prevent recurrence, including a schedule for their implementation, in accordance with Art. 264.2 and Art. 264.3 of the Act of April 27th 2001 – the Environmental Protection Law (Dz.U. of 2018, item 799, as amended) The post-inspection decisions were implemented, of which the Provincial Inspectorate for Environmental Protection was informed by letter No. NBO/542/2019 of July 2nd 2019.

II. Inspection Report No. TAR 180/2019. Inspection at the Sulfuric Acid Unit (Sulfuric Acid and Hydroxylamine Sulfate Department), Plastics Business Segment, Production Unit in Tarnów, due to oleum pipeline (DN-80) damage during repairs – leakage into a concrete tray (rail tanker loading station). Following the inspection, a requirement notice was issued including three decisions to be implemented. 1. Submit to the Kraków Provincial Inspectorate for Environmental Protection, Branch Office in Tarnów, a report on the findings of the Accident Investigation Committee set up to establish the causes and consequences of the industrial accident of July 25th 2019 – oleum leakage from a vent pipe of the Sulfuric Acid Unit storage facilities at the Sulfuric Acid and Hydroxylamine Sulfate Department. 2. Submit to the Kraków Provincial Inspectorate for Environmental Protection, Branch Office in Tarnów, information on the release volume (including an estimate of the amount of SO3 evaporated from the leaking oleum), the direct causes of the incident, the value of damage to property, and the measures taken to prevent recurrence, in order to enable an examination of the incident pursuant to Art. 264.2 and Art. 264. 3 of the Act of April 27th 2001 – the Environmental Protection Law (Dz.U. of 2019, item 1396) and the Regulation of the Minister of Environment of December 30th 2002 on major accidents requiring notification to the Chief Inspector for Environmental Protection (Dz.U. of 2003, No. 5, item 58), as amended by the Regulation of the Minister of Environment of May 18th 2016 amending the regulation on major accidents requiring notification to the Chief Inspector for Environmental Protection (Dz.U. of 2016, item 799). 3. If any of the persons responsible for the operation (supervision) of the unit at which the accident occurred are found to have committed any infringements, carry out internal disciplinary procedures or other procedures provided for by law, and notify the Kraków Provincial Inspector for Environmental Protection of the results of such procedures and measures taken. The post-inspection decisions were implemented, of which the Provincial Inspectorate for Environmental Protection was informed by letter No. NBP/AG/155/2019 of August 30th 2019.

III. Inspection report No. TAR 267/2019. A joint inspection by the Provincial Inspectorate for Environmental Protection and the State Fire Service of the technical grade nitric acid, concentrated nitric acid and mixed acid storage facilities at the Acid Department of the Fertilizers Business Unit. The inspection also covered the surface water and groundwater intake point, and the ECII CHP Plant located on the premises of the Energy Business Unit – with respect to the sulfur content in heavy fuel oil combusted at the plant. Following the inspection, a requirement notice was issued including one decision to be implemented. 1. Submit to the Kraków Provincial Inspectorate for Environmental Protection, Branch Office in Tarnów, a schedule of repairs of the tray placed beneath the technical grade nitric acid storage tanks (KB) or alternative capital projects/organisational measures aimed at minimising the risk associated with the plant’s operation, in accordance with the provisions of the Grupa Azoty S.A. Safety Report (Process Risk Analysis – Concentrated and Technical Grade Nitric Acid Units), the BAT reference document on the Best Available Techniques for Emissions from Storage, and Art. 145.3 of the Act of April 27th 2001 – the Environmental Protection Law (Dz.U. of 2019, item 1396, as amended). In response to the requirement notice, a schedule of remedial actions and organisational measures was submitted by letter Ref. No. NBP/LSz/53/2020 of January 21st 2020 to ensure proper technical operation of the facilities and to minimise the environmental impacts: 1. The KB nitric acid storage facility will no longer store technical grade nitric acid in three out of its five tanks. Two tanks will remain in service: VS-4 and VS-3, which for the time being cannot be retired due to their functions and process links with existing installations.  Scheduled completion: February 1st 2020 – completed 2. The VS-4 tank will serve as a temporary container for acidic leachate from the plant until another tank is prepared. 3. The VS-3 tank will be used to temporarily hold technical grade nitric acid only for the purpose of its loading or unloading at the rail tanker station. In other periods, the tank will remain empty. With the existing process links, it is impossible to use the reloading station without the tank. The station is a buffer in case of any disruptions in fertilizer production, affecting the fertilizer line’s capacity. 4. In order to discontinue the use of the VS-4 tank for acidic leachate from the manufacturing areas and other auxiliary facilities, another tank complete with a tray will be repaired. Location of the tank – at the E-68 component of the Mixed Acid Unit.  Scheduled completion of the repair work: Q2 2021. 5. The VS-3 tank will be retired once a supply pipeline connecting the rail tanker reloading station with the new technical grade acid storage facility is installed.  Scheduled completion: Q3 2020. As a result, it will be possible to decommission and physically retire the F-59b component of the KB technical grade nitric acid storage facility, thereby reducing the necessary repair expenditure. How many inspections did you Number: Please provide details of these visits, including receive from the health and safety County number and nature of any violations found: authorities during the reporting State In 2019, 18 inspections were carried out period? Sanitary by the National Sanitary Inspectorate (PIS), Inspector – ending in post-inspection reports. 18 State Fire The inspections covered: Service – 3 a) occupational health conditions – 11, b) sanitary and technical condition of the facilities – 11, c) compliance with the regulatory regime applicable to hazardous substances – 11, d) verification of the implementation of County Sanitary Inspector decisions – 2, e) placement of industrial units in service – 1, f) occupational risk assessment.

Four decisions were issued, concerning: 1. measurements in the work environment 2. occupational risk assessment 3. safety data sheets 4. hygienic and sanitary facilities All decisions with deadlines in 2019 were implemented.

In 2019, the State Fire Service carried out three inspections. 1. Report on the findings of inspection and examination activities carried out by the Municipal Command of the State Fire Service in Tarnów by order of the Province Commander-in-Chief of the State Fire Service in Kraków in connection with a ‘cloud of yellow gases’ hovering above Grupa Azoty S.A. Report findings: as a result of the analysis, it was determined that the incident did not have the characteristics of a major accident within the meaning of the Environmental Protection Law. No decision was issued.

2. Report on the findings of inspection and examination activities carried out by the Municipal Command of the State Fire Service in Tarnów in connection with the oleum pipeline (DN-80) damage during repairs – leakage into a concrete tray (rail tanker loading station). Report findings: as a result of the analysis, it was determined that the incident did not have the characteristics of a major accident within the meaning of the Environmental Protection Law. No decision was issued.

3. Report on the findings of inspection and examination activities carried out by the Provincial Command of the State Fire Service in Kraków and Municipal Command of the State Fire Service in Tarnów – joint inspection with the Provincial Inspectorate for Environmental Protection of the technical grade nitric acid, concentrated nitric acid and mixed acid storage facilities at the Fertilizers Business Unit. Scope of inspection activities: to determine compliance with safety requirements at an upper-tier establishment. The inspection was held between November 14th 2019 and November 29th 2019. No non-compliances with respect to fire safety were identified. No decision was issued. How many inspections did you Number: 2 Please provide details of these visits, including receive from the labour authorities number and nature of any violations found: during the reporting period? In 2019, the National Labour Inspectorate (PIP) carried out two documented inspections at Grupa Azoty S.A:

I. Inspection Report No. 070213-53-K0007- Pt/18/19 The purpose of the inspection was to assess compliance with the occupational health and safety regulations of the labour law in connection with an accident at work sustained by an employee of GRUPA AZOTY PROREM Sp. z o.o., who had been injured on December 4th 2018 on the premises of K116 K-67 Z Pump House at the Ammonium Sulfate Department. The inspection resulted in the issue of one improvement notice and one order:

Order No. 070213-53-K007-Nk01/18/19 with four decisions to be implemented: • Install guards to secure the moving parts of AST61A belt conveyor in building K116 K-67 Z Pump House – Ammonium Sulfate Department to a height of 2.5 from ground level. • Install guards to secure the moving parts of AST61B belt conveyor in building K116 K-67 Z Pump House – Ammonium Sulfate Department to a height of 2.5 from ground level. • Install guards to secure the moving parts of AST64A belt conveyor in building K116 K-67 Z Pump House – Ammonium Sulfate Department to a height of 2.5 from ground level. • Install guards to secure the moving parts of AST64B belt conveyor in building K116 K-67 Z Pump House – Ammonium Sulfate Department to a height of 2.5 from ground level. The decisions were implemented. The National Labour Inspectorate was notified of their implementation on March 14th 2019.

Improvement notice No. 070213-53-K007- Ws01/18/19 with one decision to be implemented: 1. Always confirm in the induction training sheet that an employee was covered by induction training in occupational health and safety, i.e. the general OHS training and OHS training, stating the dates of all training sessions. The decisions contained in the order and the improvement notice were implemented. The National Labour Inspectorate was notified by letter TB/LSz/277/2019 of March 14th 2019.

II. Inspection Report No. 070170-53-K037- Pt/19 Inspection of a ‘lower tier’ or ‘upper tier’ establishment. The main part of the inspection was carried out in the Plastics Business Segment, Tarnów Production Unit, Cyclohexanone Department, where it covered the old phenol storage system (K-35 component), the new phenol storage system (K-50A) and the phenol rail tanker unloading station. The inspection was carried out between November 11th and December 6th 2019. The inspection resulted in the issuance of one improvement notice and one order:

Order No. 070213-53-K007-Nk01/18/19 with four decisions to be implemented: 1. Update the occupational risk assessment at seven workstations: KPC-1, KPC-2, KPC-3, KPC-4, KPC-5, KPC-6, KPC-7 at the Cyclohexanone Department of Grupa Azoty Spółka Akcyjna. Deadline – March 31st 2020 2. Provide anti-corrosion protection on the surfaces of two service platforms for hydraulic seals of the 101A and 101B tanks at the Cyclohexanone Department of Grupa Azoty Spółka Akcyjna. Deadline – June 30th 2020 3. Repair the inner trestle posts between the old phenol storage facility (K-35 component) and the intersection of routes E and 7, including perforated components, and protect them against corrosion, at the Cyclohexanone Department of Grupa Azoty Spółka Akcyjna. Deadline – December 31st 2020 4. Place the EX sign (explosion danger warning) at the points of entry into explosive atmospheres of the Cyclohexanone Department of Grupa Azoty Spółka Akcyjna for: - outlet of the PSV-211.4 storage tank breather valve at the new phenol storage facility, K-50A component, – phenol rail tanker unloading station and cyclohexanone or cyclohexanol handling station, – two tanker truck stations: the cyclohexanone or cyclohexanol handling station, and the still bottoms loading station. Deadline for taking remedial action – February 29th 2020

Improvement notice No. 070170-53-K037- Ws01/18/19 with five decisions to be implemented: 1. Develop an on-the-job training agenda in the event of any changes to technical and organisational conditions, with topics and duration determined by the scope and type of changes to the job concerned. 2. Update/supplement the JOB INSTRUCTIONS (Instructions code: KPC-1) for an organic storage and reloading station operator (i.e. KPC-7 operator), covering: - detailed description of pre-work and after- work routines, and safe work rules and methods, falling within the defined scope of operator activities (p. 34 of the Instructions), relating to work at heights, with potential direct exposure to process chemicals:  tank car interior cleanliness check,  tank car level check during its filling or emptying,  sampling,  opening or closing a hatch, cap or valve, - identifying the place and time (i.e. on a fixed service platform, before the mobile platform is lowered onto a tank car) when the employee wearing a harness belt must attach himself to a fall arrest device, including an indication of relevant steps to taken after an operation on the upper tank car service level is completed. 3. Identify the causes of an accident at work in the accident investigation report, duly reflecting thorough examination of its circumstances. 4. Present conclusions and adequate preventive measures to be taken to address the duly established causes of an accident. 5. Consider reducing to 20 km/h the speed limit on the access road (with two-way traffic) from the east side to the stations, including the phenol rail tanker and tanker truck unloading stations, to improve the traffic safety from passing vehicles. The National Labour Inspectorate (PIP) was notified by letter NBP/LSz/31/2020 of January 13th 2020 how the decisions communicated in the improvement notice had been implemented.

In 2019, the National Labour Inspectorate’s Senior Labour Inspector issued Decision No. 070150-566-Ds.-159/19 dated November 15th 2019 changing the deadline for implementation of the decision communicated in Order No. 070170-5317-K0038-Nk02/18 dated November 23rd 2018: 1. Provide anti-corrosion protection on the surfaces of steel structures of trestle bridges of the methanol unloading station and the methanol storage and distribution facility, on pumps, nozzles, nitrogen pipelines, as well as on the surfaces of the structure of the pump service valve platform at the methanol storage and distribution facility. Previous deadline for implementing the decision: September 30th 2019. Current deadline: May 31st 2020. Have these visits resulted in any Yes [ ] If Yes, please describe, including status of penalties, fines and/or corrective No [X] implementing corrective actions to address any action plans? violations found:

No fines were imposed on the Company as a result of these inspections, but corrective measures following from the aforementioned decisions, orders and improvement notices were taken. Has the Company engaged any Yes [X] If Yes, please state for which types of work and contractors for project-related work No [ ] how the Company monitored contractors’ in the reporting period? compliance with the EBRD Performance Requirements and the Environmental and Social Action Plan:

The Company hires contractors to perform repair and maintenance work. A special procedure governs the performance of such work, including relevant permits. OHS inspections at construction sites are carried out on an ongoing basis. Were any of the violations stated Yes [X] If Yes, please provide details, including how the above the responsibility of No [ ] Company is ensuring that corrective actions are contractors? implemented by the contractor? A few violations of safety rules and procedures were identified, consisting mainly in incorrect work routines, poor scaffolding, absence of safety devices or failure to use personal protective equipment (hard hats, gas masks). In each case, work was halted until the violations were removed. Have any operations been reduced, Yes [X] If Yes, please describe: temporarily suspended or closed down No [ ] Construction work was suspended for a due to environmental, health, safety short time, pending removal of or labour reasons? violations. Please describe any environment or social programmes, initiatives or sub-projects undertaken during the reporting period to improve the Company's environmental or social performance and/or management systems:

Major environmental projects carried out in 2019 by Grupa Azoty S.A. included the collection of slag from the ECII CHP plant boilers. The project will enable the use of slag to produce building materials, helping reduce the amount of landfilled boiler bottom waste. In 2019, a number of projects were pursued by Grupa Azoty S.A. to reduce the consumption of energy carriers in production processes and make more efficient use of available resources. The main projects in this area included projects to make comprehensive use of reaction heat from selective phenol hydrogenation, construct a turbine generator using steam from the Sulfuric Acid Plant and the Dual-Pressure Nitric Acid Unit and a 4 MPa steam pipeline from the Sulfuric Acid Plant to the Dual- Pressure Nitric Acid Unit, as well as to alter the pumping system of the first heating segment. Other important environmental projects at Grupa Azoty S.A. involved bringing the company’s heat and power generation activities in line with the more stringent environmental requirements resulting from BAT conclusions.

In the OHS area, the Safety Days were held, this time under the ‘SAFE REPAIRS’ motto. During a conference held on the occasion, experts from safety-related institutions and companies delivered presentations about the safety systems used during repair work and relevant procedures in place at Grupa Azoty S.A. The outdoor part of the event included a protective equipment show and a competition between five teams representing the Departmental Emergency Response Groups. Some employees were rewarded for their outstanding contribution to safety.

Please indicate the level of associated expenditure (capital expenditure and operating expenditure), and whether this relates to the requirements of the Environmental and Social Action Plan, or to any other initiative:

The expenditure incurred by Grupa Azoty S.A. in 2019 on its environmental projects was PLN 6,428 thousand.

3. Status of the Environmental and Social Action Plan Please provide information on the status of each item in the Environmental and Social Action Plan (ESAP) agreed with EBRD. If the ESAP was updated during the reporting period, please attach a copy of the new plan.

See attachments for information on the implementation of ESAP.

4. Environmental Monitoring Data for each of the key subsidiaries

The information required in this section can be extracted from a CSR report, or a full CSR report can be attached.

Please provide the name and contact Krzysztof Chmura, details for your environmental manager: Telephone: (+48) 14 637-36-67 Parameter2 Amount3 Unit Compliance Status4 Comments5 Wastewater Total wastewater 4,396 ‘000 m3 Compliant Biochemical 12,811 kg Compliant Oxygen Demand (BOD5) Chemical Oxygen 65,698 kg Compliant Demand (COD) Suspended solids 8,409 kg Compliant Phosphorus 1,072 kg Compliant Nitrates 51,556 kg Compliant Heavy metals 496 kg Compliant [Other] Air Per each Mg/2019 emissions major point source CHP Plant: NE/EPK/3 194 NE/EPK/1 170 NE/EPK/2 10 SO2 Sulfuric Acid Compliant Plant NK/KPH/175 100 Hydroxylamine sulfate NK/KPH/185 43 CHP Plant: NE/EPK/3 166 NE/EPK/1 109 Dual pressure nitric acid Compliant NA/PN-1/20 201 Synthesis Gas Unit Nitrogen oxides NA/PN-2/77 123 (NO ) in NO X 2 Hydroxylamin equivalent e sulfate NK/KPH/185 585 Ammonium nitrite Non-compliant

NK/KPH/163 647 NK/KPH/164 608 NK/KPH/165 706 NK/KPH/169 2009 CHP Plant: NE/EPK/1 12 Fertilizers NA/PN-3/47 12 NA/PN-3/48 9 NA/PN-3/49 9 NA/PN-3/51 7 Particulates NA/PN-3/105 21 Compliant NA/PN-3/106 6 NA/PN-3/112 8 NA/PN-3/139 6 NA/PN-3/140 20 NA/PN-3/29- 46 40 CHP Plant 496,125 Production 459,828 units in ETS CO2 Compliant Production 35,254 units outside ETS Other parameters Noise emissions 45 – night dB Non-compliant Measuremen 55 – day ts taken around the Company premises showed nigh-time exceedance at one location. Excessive noise emissions come from the area of Methane Decompositi on Plant V. Thorough noise tests were carried out, and the Company has taken measures to reduce noise emissions. [Other] Total waste 54,139.14 including: 10 01 15 Bottom ash 15,817.6 Compliant Recovery / and slag Storage 10 01 02 Fly ash 32,819.24 Compliant Recovery

17 04 05 Iron and steel 2,002.46 Compliant Recovery

17 06 04 Insulation 126.58 Compliant Disposal materials 13 02 08 * Other engine, 80.98 Compliant Recovery gear and lubricating oils 19 08 14 Sludge from 1,120.0 Compliant Recovery non-biological treatment of wastewater 19 08 12 Sludge from 1,151.18 Compliant Recovery biological treatment of wastewater 07 02 13 Waste plastic 188.46 Compliant Recovery 17 02 01 Wood 0 15 01 03 Wooden 199.16 Compliant Recovery packaging 15 01 02 Plastic 117.461 Compliant Recovery packaging Please provide details of the types and amounts of solid wastes generated by the project. Indicate where wastes are classified as hazardous. Indicate the final re-use, recycle or disposal method for each waste type.

5. Resource Usage and Product Output

Measurement Parameter Amount Comments6 Unit Fuels used Liquid fuels Mg Consumption at the Power Business 875.94 Unit (mazut) Gas fuels m3 Consumption at the Power Business 38,993 Unit (methane for the EC II CHP plant) Crude oil 0 Natural gas 236,407,263 m3 Hard coal 226,510 Mg Lignite 0 Electricity 448,640.76 MWh ZAT consumption excluding auxiliary consumption by EC2 (EC2 auxiliary consumption: 50,172.589 MWh) Heat purchased 0 from external sources Feedstocks and raw materials used Ammonia 332,958 Mg Dolomite 65,858 Mg Benzene 0.00 Mg ** 1,702.54 Mg of methanol – Grupa Phenol 88,816 Mg Azoty S.A. did not purchase this Technical-grade Mg amount of methanol, it was entrusted methanol 12,239.4+1,702.54* to it for processing into formalin Liquid sulfur 123,173 Mg (under a relevant contract) Product output Caprolactam 101,743 Mg Polyamide 118,954 Mg Ammonia 225,947 Mg Technical-grade Mg nitric acid 344,485 Total fertilizers 1,072,183 Mg

6. Human Resources management Please provide the name and contact details for Krzysztof Pabian your Human Resources manager: (+48) 14 637 3131 Recruited in this Terminated in this Total reporting period reporting period Number of direct employees: 2,192 138 141 Number of contracted - - - workers: Were there any collective Yes [ ] If Yes, please describe the redundancy plan, redundancies during the reporting No [X] including reasons for redundancies, number of period? workers involved, how they were selected, consultation undertaken, and measures to mitigate the effects of redundancy: Are any redundancies to the Yes [ ] If Yes, please describe the redundancy plan, workforce planned for the next No [X] including reasons for redundancies, number of year? workers involved, and selection and consultation process: Were there any changes in trade Yes [ ] If Yes, please provide details, and summarise union representation at Company No [X] engagement with trade unions during reporting plants during the reporting period: period? Were there any other worker Yes [ ] If Yes, please provide details and summarise representatives (e.g. in the No [X] engagement with them during the reporting period: absence of a trade union)? Were there any changes in the Yes [X] If Yes, please provide details: status of Collective Agreements? No [ ] - the incentive bonus rules were amended Have employees raised any Yes [ ] If Yes, please state how many, split by gender, grievances with the project during No [X] summarise the issues raised in grievances by male the reporting period? and female staff and explain how the Company has addressed them:

Have employees raised any Yes [ ] If Yes, please state how many, split by gender, complaints about harassment or No [X] summarise the issues raised by male and female bullying during the reporting staff and explain how the Company has addressed period? them: No cases of harassment or bullying were reported in 2019.

Have there been any strikes or Yes [ ] If Yes, please summarise nature of, and reasons for, other collective disputes related No [X] disputes and explain how they were resolved: to labour and working conditions at the Company in the reporting period? Have there been any court cases Yes [X] If Yes, please summarise the issues contested related to labour issues during the No [ ] and outcome: reporting period? In 2019, eight court proceedings were in progress, including: • Proceedings involving an accident at work – value of the claim: PLN 315,392.00. A final judgment was passed awarding an equitable relief of PLN 10,000 from GRUPA AZOTY S.A.to the employee, while the remaining part of the claim was dismissed. • Proceedings involving a claim for payment under a non-compete obligation after the termination of employment (still pending) – value of the claim: PLN 210,000.00. • Conciliation procedure concerning payment of PLN 313,314.00 in remuneration (still pending). • Three cases involving terminated employment contracts, of which two claims were dismissed by final judgments, and one claimant withdrew the action waiving their claim, whereupon the court discontinued the proceedings. • Proceedings involving payment of remuneration for overtime work (still pending) – value of the claim: PLN 37,827.00. • Proceedings involving payment of damages by an employee to GRUPA AZOTY S.A.(still pending) – value of the claim: PLN 38,427.83. Have there been any changes to Yes [X] If Yes, please give details, including of any new the following policies or terms No [ ] initiatives: and conditions during the reporting period in any of the January 2019 – a raise in base pay and allowances for following areas: work in a continuous system, and amendment to the  Trade union recognition rules of calculating contributions to the  Collective Agreements Occupational Pension Scheme.  Non-discrimination and equal opportunities for all September 2019 – an amendment to the Collective  Equal pay for equal work Bargaining Agreement concerning the incentive  Gender equality bonus rules.  Bullying and harassment, including sexual harassment  Employment of young workers under 18  Wages and salaries (for regular and overtime hours)  Overtime  Working hours  Flexible working / work-life balance  Grievance mechanism for workers  Health & safety

7. Occupational Health and Safety Data Please provide the name and Andrzej Grobecki contact details for your Health (+48) 14 637 4081 and Safety manager: Direct Contracted Direct Contracted employees workers employees workers Number of man- 3,660,200 - Number of 0 - hours worked in fatalities 7: this reporting period: Budget spent on PLN 2,653 Number of 0 - OHS in this period thousand disabling (total amount and injuries: currency): OHS training 294 training - Number of Lost 15 - provided in this sessions – 4,469 Time Incidents period in person- person-days (including days: vehicular): Number of lost 711 - Number of cases 0 - workdays of occupational resulting from disease: incidents: Number of sick 20,978 - days: Causes of accidents at work (inattention, poor concentration, lack of clear guidelines on how to perform work / bad organisation of work, unidentified risk, lack of full control of the process, improper support, technical issues): Accident types: • Accidents during transport/movement, including traffic accidents – 9 • Technical, technological and mechanical hazards – 2 • Hazardous substances (chemical and thermal burns) – 3 • Fall from a height – 1 Please provide details of any fatalities or major accidents that have not previously been reported to EBRD, including total compensation paid due to occupational injury or illness (amount and currency): There were no such accidents. Please summarise any emergency prevention and response training that has been provided for Company personnel during the reporting period:

Grupa Azoty S.A. employees receive emergency prevention and response training as a part of periodic OHS training. The Company Fire Brigade also runs emergency prevention and response training as part of employee induction and periodic training programmes, as well as drills under the Internal Rescue Operation Plan. Please summarise any emergency response exercises or drills that have been carried out during the reporting period:

The Company operates an Internal Rescue Operation Plan (as required by the Environmental Protection Law). In 2019, on-site exercises specified in the Internal Rescue Operation Plan were carried out in accordance with the approved schedule: 36 sessions at high-risk facilities, evacuation exercises at 8 facilities, 32 on-site improvement drills. The total number of exercises conducted by the Company Fire Brigade at GRUPA AZOTY S.A.was 62.

8. Stakeholder Engagement Please provide the name and contact details Piotr Pawlina for your external relations or community Head of the Communication Office engagement manager: Email: [email protected]

Please provide information on the implementation of the Stakeholder Engagement Plan agreed with EBRD and summarise interaction with stakeholders during the reporting period, including:  meetings or other initiatives to engage with members of the public or public organisations during the reporting period  information on environmental protection, social policy and safety matters provided to the local community and other stakeholders during the reporting period:  coverage in the media:  interaction with any environmental or other community groups. Please describe any changes to the Stakeholder Engagement Plan agreed with EBRD:

Grupa Azoty S.A. maintains ongoing contact with the local community, keeping it informed of current developments in its operations. Grupa Azoty S.A. communicates with its stakeholders in various ways, including:  Press briefings and/or press releases and/or study visits by journalists at the Group’s major project sites. These measures are intended to maximise the Group’s media coverage, keeping local communities up to date with Grupa Azoty S.A.’s activities (through countrywide, local and trade media).  Also, through additional publications commissioned as sponsored articles, the Company informed the public of important matters/projects related to: investment in its key business areas, including Polimery Police, its flagship business growth project, as well as research, development and innovation activities, including in new business segments. Furthermore, the Company representatives are open to give interviews and never leave journalists’ questions unanswered.  Running an intranet site and the grupaazoty.com website. A new website was set up in 2019 at the same address: grupaazoty.com, with refreshed design, updated content, pictures etc. The website content includes all material information on Grupa Azoty, its product portfolio, management systems etc. The intranet site, on the other hand, is continually adapted to meet employee needs, with new sections added. The content is updated on a daily basis, and so are the event calendar and photo gallery.  Publishing the Magazine Grupa Azoty corporate bulletin, including information on and interviews concerning Grupa Azoty S.A.; information on and interviews concerning the Company’s environment and connected with CSR policy, culture, sports, employees, and other matters. The bulletin is addressed to both Grupa Azoty's and the Group's employees and external institutions. Tarnowskie Azoty is an informative, educational and entertaining publication, covering current affairs at the parent and subsidiaries. It is distributed mainly within the Group, but is also sent out to partner institutions, members of Parliament from the Tarnów region, representatives of the town and county authorities, and certain retired employees. In 2019, one issue of the bulletin was published;Internal broadcasting system, airing programmes three times a day on each business day (Monday through Friday) at the following times: 6.45-7.30; 10.00-10.15; 14.45-15.10. The broadcasts cover the most important information on Grupa Azoty S.A. and its environment. In 2019, the system aired the Company’s programmes and announcements, trade union and employee announcements, thematic programmes about Grupa Azoty’s activities (e.g. the Grupa Azoty on the Peaks project, Chemist’s Day 2019), and some cyclical programmes, such as Dobry początek dnia or Co w kulturze.

Information delivered to representatives of the local community and other stakeholders in the reporting period included information on environmental protection, social policy, support to the local community (education, culture, sports), support of local development, and safety-related matters.

Grupa Azoty S.A. is a co-organiser and/or partner of conferences on environmental protection and safety. In 2019, it helped organise the ‘Environmental Development Trends in the Chemical Sector’ conference, the Polish Chemical Industry Congress, and other events.In addition, Grupa Azoty S.A. is a partner of the Safe Chemicals Programme run by the Polish Chamber of Chemical Industry. The conferences provided a platform for meeting chemical safety experts, sharing experience and developing solutions that can be used at the Grupa Azoty S.A.plants.

Membership in associations Grupa Azoty S.A.is a member of several dozen business, chemical industry and scientific associations and institutions. In 2019, these included:

1. Związek Pracodawców Business & Science Poland (Business & Science Poland Union of Employers) 2. Polska Izba Przemysłu Chemicznego (Polish Chamber of Chemical Industry − PIPC) 3. Fertilizers Europe 4. IFA (International Fertilizer Industry Association) 5. European Phosphate Fertilizer Alliance (AEEP) 6. Izba Energetyki Przemysłowej i Odbiorców Energii (Polish Chamber of Industrial Power and Energy Consumers) 7. Konsorcjum Bezpieczeństwo Gospodarcze Polski (Polish Economic Security Consortium) 8. Stowarzyszenie Emitentów Giełdowych (Polish Association of Listed Companies) 9. EPCA (European Petrochemical Association)

10. Stowarzyszenie Eksporterów Polskich (Association of Polish Exporters) 11. Instytut Audytorów Wewnętrznych Polska (Institute of Internal Auditors Poland) 12. Internationaler Controller Verein – Akademia Controllingu Sp. z o.o.) 13. Transparency Register 14. System pomocy w transporcie materiałów niebezpiecznych SPOT (SPOT System of Assistance in Hazardous Material Transport) 15. Forum Liderów Bezpiecznej Pracy (Forum of Safe Work Leaders) 16. Związek Przedsiębiorców i Pracodawców (Association of Entrepreneurs and Employers) 17. Towarowa Giełda Energii S.A. (Polish Power Exchange) 18. Towarzystwo Obrotu Energią (Energy Trading Association) 19. Naczelna Organizacja Techniczna – Federacja Stowarzyszeń Naukowych-Technicznych (Polish Federation of Engineering Associations NOT), Tarnów Division 20. Polish-Brazilian Chamber of Commerce 21. Stowarzyszenie Elektryków Polskich (Association of Polish Electrical Engineers), Management Board of the Tarnów Division 22. Izba Przemysłowo – Handlowa w Tarnowie (Tarnów Chamber of Commerce and Industry) 23. Polskie Forum ISO 9000 (Polish ISO 9000 Forum) 24. Stowarzyszenie Inżynierów i Techników Przemysłu Chemicznego (Polish Association of Chemical Engineers) 25. Klub Polskich Laboratoriów Badawczych POLLAB (POLLAB Club of Polish Research Laboratories) 26. Stowarzyszenie Księgowych w Polsce (the Accountants Association in Poland) 27. Stowarzyszenie Polskich Skarbników Korporacyjnych (Association of Polish Corporate Treasurers) 28. Polska Izba Rzeczników Patentowych (Polish Chamber of Patent Attorneys) 29. Komitet Chemii Polskiej Akademii Nauk (Chemistry Committee of the Polish Academy of Sciences) 30. Centrum Zaawansowanych Technologii przy Instytucie Chemii Przemysłowej (Advanced Technology Centre at the Industrial Chemistry Institute) 31. Stowarzyszenie Inspektorów Ochrony Danych (Data Protection Officers’ Association) – SABI 32. Zachodniopomorski Klaster Chemiczny „Zielona Chemia” (‘Green Chemistry’ West Pomerania Chemical Cluster) 33. CEFIC (European Chemical Industry Council) 34. ISSA (International Security Systems Association) 35. Klub Sportowy Azoty-Puławy (Azoty-Puławy Sports Club) 36. Lubelski Klaster Biotechnologiczny „LKBio” (‘LKBio’ Lublin Biotechnology Cluster) 37. Puławskie Centrum Przedsiębiorczości (Puławy Entrepreneurship Centre) 38. Polska Izba Odzysku i Recyklingu Opakowań (Polish Chamber of Packaging Recovery and Recycling) 39. Rada Gospodarki Wodnej Regionu Wodnego Dolnej Odry i Przymorza Zachodniego (Council for Water Management in the Lower Oder and Western Coast Water Region) 40. ECPI (European Plasticizers) 41. EPL 42. Krajowa Sieć Informatyczna Europejskiej Agencji Bezpieczeństwa i Zdrowia w Pracy (National IT Network of the European Agency for Safety and Health at Work) 43. Staszowska Izba Gospodarcza (Staszów Chamber of Commerce) 44. Staropolska Izba Przemysłowo - Handlowa (Staropolska Chamber of Industry and Commerce) 45. HTRI (Heat Transfer Research INC.) 46. Izba Gospodarcza Gazownictwa (Chamber of the Natural Gas Industry) 47. Stowarzyszenie Doradców ds. Bezpieczeństwa Przewozu Towarów Niebezpiecznych Koleją (Association of Advisers for Safe Transport of Dangerous Goods by Rail) 48. Izba Gospodarcza Transportu Lądowego (Land Transport Commercial Chamber) 49. GCU Bureau Sprl (General Contract of Use for Wagons) 50. VPI – Verband der Guterwagenhalter in Deutschland E.V. 51. Stowarzyszenie Inżynierów i Techników Przemysłu Chemicznego (Polish Association of Chemical Engineers) 52. Polskie Stowarzyszenie Myjni Cystern (Polish Tank Cleaning Association) 53. Zachodniopomorska Okręgowa Izba Inżynierów Budownictwa (West Pomeranian Regional Chamber of Civil Engineers)

Grupa Azoty S.A. carries out a number of community-oriented projects to engage with its stakeholders.Key such projects in 2019 included:

Chemist’s Day 2019 – In June 2019, the Company employees together with their families, as well as residents of Tarnów, were invited to the Doors Open Day at Grupa Azoty S.A. (held as part of the Chemist’s Day). Those who attended could choose from a variety of cultural, sports and recreation activities. The games, plays and competitions attracted numerous guests of all ages. The Day’s celebrations ended with a concert featuring star performers. Admission to the event was free. How many complaints or grievances did the project receive from members of the public or civil society organisations during the reporting period? Please split by stakeholder group. Summarise any issues raised in the complaints or grievances and explain how they were resolved:

In the period under review, no complaints were raised by the local community.

9. Community Development Please summarise any social or community development / investment initiatives undertaken by the Company during the reporting period, and any associated expenditure:

In 2019, Grupa Azoty S.A.’s expenditure on CSR projects benefiting the local community amounted to ca. PLN 1,700,000. Through these activities, which include educational, cultural and sports projects, the Company supports the local community and the region, thus building and promoting its perception as a valued and respected partner. Thanks to such efforts, the Company also builds stronger and lasting relations with its immediate social environment.

Development of the region In 2019, Grupa Azoty S.A. participated in numerous initiatives for the development of the region and its community, supporting such institutions as:  PTTK (Polish Tourist Association) Branch at Grupa Azoty S.A. in Tarnów-Mościce  KANON Association,  Naczelna Organizacja Techniczna Federacja Stowarzyszeń Naukowych-Technicznych (Polish Federation of Science and Engineering Associations NOT), Tarnów Council  Stowarzyszenie Inżynierów i Techników Przemysłu Chemicznego (Polish Association of Chemical Engineers)  Ignacy Mościcki Foundation of Tarnów  Towarzystwo Przyjaciół Mościc (Society of the Friends of Mościce).

Development of education

Grupa Azoty S.A. has a long-standing commitment to promoting the local community development, which is delivered through various educational activities, campaigns and programmes designed to support children and young people in pursuing their interests, improving their skills and acquiring new knowledge in such fields as environmental protection. Last year, Grupa Azoty S.A. worked in partnership with schools from the Tarnów region, including:  Technical School Complex of Tarnów  Sports School Complex of Tarnów

Grupa Azoty S.A. intends to continue that cooperation on a long-term basis. To this end, it has signed an agreement with the Ignacy Mościcki Technical School Complex, under which the Company is to employ up to ten students yearly, provide apprenticeship opportunities, help prepare classes and organise educational field trips, and offer support in applying for EU funds.

Grupa Azoty S.A. also actively collaborates with scientific institutions and academic centres. For decades, the Company has not only supported research into industrial technologies and techniques, but has also been actively involved in the organisation of educational projects linking students with industry. The institutions with which Grupa Azoty S.A. currently cooperates include:

• State Higher Vocational School in Tarnów • Kraków University of Technology • AGH University of Science and Technology of Kraków • Jagiellonian University of Kraków • Wrocław University of Technology • University of Wrocław • University of Agiculture in Kraków • West Pomeranian University of Technology in Szczecin • Warsaw University of Technology • Silesian University of Technology • University of Gdańsk. • Maritime University of Szczecin • University of Szczecin • Catholic University of Lublin

Development of sports Driven by the belief that universal access to sports – through respect for human dignity and the spirit of fair play – is not only a foundation of proper education of children and youth but also eliminates the threats posed by contemporary social ills, Grupa Azoty S.A. undertakes initiatives supporting stakeholders who are active in this area.

To build the strength of its brand, Grupa Azoty S.A. supports the best Polish athletes. Without forgetting about the needs of the local community – it supports not only professional, but also amateur sports people and organisations,which in 2019 included:  Grupa Azoty PWSZ Tarnów Club (volleyball)  Stowarzyszenie Piłki Ręcznej Tarnów (handball)  Interschool Students’ Sports Club 1811 (basketball)  Miejsko-Ludowy Klub Sportowy (sports club) Dąbrovia (archery)  Football Academy at the Jutrzenka Popular Sports Club.

Development of culture Believing that culture is an invaluable social phenomenon and an integral system within the process of education, which stimulates imagination, sensitivity and creativity of successive generations and plays a significant role in shaping both individual and national identity, Grupa Azoty S.A.undertook the following initiatives:  organisation of cultural events and workshops promoting respect for the national and cultural identity,  support of cultural projects and programmes promoting both the region and national culture. To this end, in 2019 Grupa Azoty supported a number of entities, including:  Mościce Arts Centre  ArtContest Artistic Association of Tarnów (Grupa Azoty International Jazz Contest)  BWA City Art Gallery of Tarnów  Paderewski Centre in Kąśna Dolna  Tarnów Regional Museum.

Protection of life and health The Company is aware of the need to undertake initiatives for human health and life, help the suffering, sick and terminally ill, as well as those deprived of opportunities for development and unable to function on their own in society. For this reason, in 2018 Grupa Azoty S.A. focused on organisations which care for the development of others, providing support to:  Ich Lepsze Jutro Association  Centre for Children with Special Educational Needs of Dwudniaki  START Sporting Association for People with Disabilities of Tarnów  The Kraków Province Burn Treatment, Plastic Surgery and Replantation of Extremities Centre with the Hyperbaric Therapy Centre at the Ludwik Rydygier Specialist Hospital in Kraków  Club of Polish Red Cross Honorary Blood Donors at Grupa Azoty S.A.

In 2019, the amount donated by the Company was PLN 303,500.00.

ENVIRONMENTAL AND SOCIAL ACTION PLAN

Table 0.1 Wisła Project, Grupa Azoty Poland – Environmental, Social, Health and Safety (ESHS) matters, Updated (Alchemist Project) Action Plan:

GRUPA AZOTY S.A.

No. Action Environmental risks, Legislative Requirement/ Scheduled Target and Comments liabilities/benefits requirements/B Resources completion – evaluation criteria est practice action to be for implementation completed by progress end of year 0. General − Management, Environmental, and OHS matters – management at the corporate level of Grupa Azoty 0.1 Develop and implement a new EHS performance monitoring, Best practice, Internal Ongoing; Conduct operations The resulting management structure, maintaining minimum EHS risk the Bank's resources Please provide in line with Polish new structure including EHS matters, as part at corporate level Performance update in the and EU will be of the merger of the Grupa Requirements annual report. requirements and presented in an Azoty and Puławy Groups (“PRs” or follow the Bank's appropriate “Performance PRs (particularly 1, internal Requirements”) 2, 3 and 10) executive order (1, 2, 3 and 10) of the Group management Information: Grupa Azoty S.A. pursues a Corporate Management Policy which guarantees that the Company's strategic goals are achieved in reliance on an integrated management system, consistent with international standards. The operating priorities: high quality and care for technical safety and the environment, are all efficiently monitored and facilitate effective management of the Company. The Integrated Management System is structured around the following principles assuming giving priority to customers, reducing environmental losses and mitigating the risk of hazards, and continuous improvement. The management systems are based on the concept of continuous improvement by:  policy-making;  action planning to implement the policy;  creating conditions for the implementation of planned actions;  verifying the action outcomes;  improvement based on periodic performance assessments. The Corporate Management Policy sets out plans and principles for the Company’s operations at large, providing a framework for setting and reviewing strategic goals in quality, environmental protection, workplace health and safety, and food safety.

The Grupa Azoty Group is an international corporation integrating European chemical sector companies, with its own research, development, logistics and technical facilities. The parent of the Group, responsible for its strategy and corporate governance, is Grupa Azoty S.A. Corporate governance at the Grupa Azoty Group is guaranteed by the exercise of powers of the corporate governing bodies of Grupa Azoty S.A.: the General Meeting, the Supervisory Board, and the Management Board. The Grupa Azoty Group consolidation process has created potential for further gains. In order to ensure more effective management of the Group, a system of management by business segments has been implemented. In line with the model’s assumptions, functions offering the strongest synergies are centralised and main processes are managed at the Group level, with the identities of Grupa Azoty Group companies preserved. At present, Grupa Azoty has a management model based on a process-based division of responsibilities and remits within the Group’s Management Board. The current management model ensures delivery of the Grupa Azoty Group’s Strategy, achievement of synergies, as well as efficient and effective decision making by the Grupa Azoty Management Board, while preserving the identities of the subsidiaries. The pillars of the current management framework are process leaders (individual members of the Grupa Azoty Management Board responsible for their respective processes), defined decision paths, decision-making transparency, and an incentive scheme, which ensure direct delivery and communication of the developed strategy and strategic objectives. Members of the Grupa Azoty Management Board are process leaders with uniform decision-making powers to prepare organisational and HR decisions (appointments and target setting), which are then approved by the Grupa Azoty Management Board or the management boards of subsidiaries. The President of the Management Board of Grupa Azoty S.A. exercises overall supervision of the Group at the corporate level. In its management of the Group and supervision of the business segments and support functions, the Grupa Azoty Management Board is supported by the Grupa Azoty Council, standing advisory and consultative committees, process and project steering committees, as well as Corporate Departments and Offices, and tiered decision-making positions. In accordance with the management model implemented at the Grupa Azoty Group, the main corporate processes are managed at the Group level, while the organisational units of the Corporate Centre, The model adopted for the Grupa Azoty Group’s structure and governance, known as cross-management, envisages an interdependent management system based on a vertical and horizontal (process-based) organisational structure configuration, consisting of 21 main corporate processes identified at the Group.

The functioning of the management model of the Grupa Azoty Management Board and of the subsidiaries’ management boards is further reinforced by the following principles adopted at the Group:  the Grupa Azoty Group management model provides for preserving the subsidiaries' identities, locations and legal autonomy;  the Grupa Azoty Group management model provides for centralising functions offering the strongest synergies, economies of scale, and specialisation;  the Grupa Azoty Group management model is a 'joint operation model' relying on the following basic principles:  the Grupa Azoty Group operates as a single entity based on its four key companies;  members of the Grupa Azoty Management Board – the leaders of main corporate processes – ensure joint operation to achieve strategic and financial objectives of the Grupa Azoty Group by driving the effects of business processes at the Group;  at the Grupa Azoty Group, opinions of the management boards of Group subsidiaries are taken into account when making decisions with a material effect on the subsidiaries' financial performance; if no agreement can be reached between a process leader and the subsidiaries’ management boards, the decision is made by the Grupa Azoty Management Board;  all activities and decisions at the Group are transparent to all parties involved.

Below is presented a description of the actions and initiatives related to the implemented management model, which are taken or conducted as part of the consolidation process with respect to a number of organisational, formal and legal aspects.

Formal and legal aspects:  Preparation and implementation of Internal Audit Standards for Grupa Azoty and Grupa Azoty S.A. Internal Audit Rules;  Preparation and implementation of the Financial (Currency and Interest Rate) Risk Management Policy for the Grupa Azoty Group;  Preparation and implementation of the Strategy of Technical Maintenance and Asset Life Cycle Management at Grupa Azoty;

 Preparation and implementation of a joint model for managing CO2 emission allowances at the Grupa Azoty Group;  Preparation and implementation of the Framework Procedure for Disposal of Perpetual Usufruct Rights, Ownership Rights to Real Property, or Interests in Such Rights, at the Grupa Azoty Group Companies;  Preparation and implementation of the Financing and Liquidity Management Policy for Grupa Azoty;  Preparation and implementation of a procedure to be followed in the event of an inspection by the Polish Office of Competition and Consumer Protection (UOKiK) or the European Commission at Grupa Azoty;  Preparation and implementation of the Uniform Procurement Regulations at the Grupa Azoty Group;  Preparation and implementation of a document drafting policy for related-party transactions at the Grupa Azoty Group;  Preparation and implementation of guidelines on submitting investment plans and preparing investment projects at the Grupa Azoty Group Companies;  Preparation and implementation of methodology assumptions for project efficiency analysis at Grupa Azoty;  Preparation and implementation of guidelines for the allocation of umbrella facility sublimits between Grupa Azoty Group companies;  Preparation and implementation of the credit risk management instruction at the Grupa Azoty Group;  Preparation and implementation of the Information Policy at Grupa Azoty;  Preparation and implementation of the Vehicle Fleet Management Rules at the Grupa Azoty Group;  Preparation and implementation of document forms relating to the processing of personal data in accordance with the applicable laws (e.g. GDPR);  Preparation and implementation of compliance management related policies, i.e. the Anti-Corruption Code, the Conflict of Interest Policy and the Whistleblowing Policy;  Preparation and implementation of the Grupa Azoty Register of Corporate Risks and List of Key Risks.

Organisational aspects:  Establishment of the Corporate Risk Management Office and Personal Data Protection Office within the organisational structure;  Establishment of the positions of Compliance Management Manager and Management Board Assignee for MIFID II within the organisational structure;  Establishment of the standing Finance Committee at Grupa Azoty;  Establishment of the Procurement Committee at Grupa Azoty;  Increase in the number of members of the Risk Management Process Steering Committee and expansion of the concept for implementing the enterprise risk management process at other Companies (Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A., Gdańskie Zakłady Nawozów Fosforowych Fosfory Sp. z o.o., Zakłady Azotowe Chorzów S.A.);  Establishment of the Corporate Energy Team at the Grupa Azoty Group;  Establishment of the Personal Data Protection Team at the Grupa Azoty Group;  Establishment of the Explosives Precursors Corporate Team at the Grupa Azoty Group;  Establishment of the ICT Steering Committee;  Establishment of the Security Steering Committee and the Information Security and Protection Team at the Grupa Azoty Group;  Establishment of project structures for the ‘Implementation of General Data Protection Regulation (GDPR) at the Grupa Azoty Group’ project;  Establishment of the AGRO Task Team;  Establishment of the Ammonium Nitrate Anti-dumping Team;  Establishment of the Team for the Implementation of MIFID II at Grupa Azoty Group Companies;  Establishment of the Ammonia Management Team.

0.2 As part of new EHS Following completion of the EBRD PR 1 and Internal Completed Regular management structure – merger, the Company will best practice resources certification of maintain and further develop maintain EHS management EHS existing EHS management systems and develop such management systems (such as ISO 14001, systems throughout Grupa systems OHSAS 18001, etc.); by 2015 Azoty, both at the Group and develop and implement subsidiary levels. Objective: energy management systems obtain ISO 51001 for the Group in line with ISO The Company will also address certification in 51001. energy efficiency at the 2015 Group and subsidiary levels, The target is to achieve a 10% and implement an energy energy intensity reduction by management system to 2016 compared with 2012, reduce energy intensity with a long-term objective of through BAT (Best Available a 15% reduction. Technology) implementation and to reduce carbon dioxide emissions. Information: Grupa Azoty Group Companies have implemented and maintain management systems based on international standards. In addition to quality, environmental, and OHS management systems, some of them have in place an energy management system, food safety management system and laboratory quality management systems. The companies covered by this report have implemented and maintain management systems and hold certificates issued by the relevant certification bodies, confirming compliance with the requirements of the standards listed below, in particular the specified EHS standards: Grupa Azoty S.A.  ISO 9001:2015  ISO 14001:2015  BS OHSAS 18001:2007  ISO 22000:2005  ISO 50001:2011  Product Stewardship certificate  PN-EN ISO/IEC 17025: Grupa Azoty ZAK S.A.  Integrated Management System Certificate PN-EN ISO 9001:2015-10,PN-N-18001:2004 and ISO PN-EN 14001:2015- 09  BS OHSAS 18001:2007 Management System Certificate  Product Stewardship certificate  Responsible Care Framework Management System Certificate ISO 9001:2015-10 and PN-ENISO 14001:2015-09 – IQNET certificate for OHSAS 18001:2007 Grupa Azoty Z.Ch. POLICE S.A.  ISO 9001:2015  ISO 14001:2015  BS OHSAS 18001:2007  ISO 22000:2005  ISO 50001:2011  PN-EN ISO/IEC 17025:2005  Product Stewardship certificate

Grupa Azoty Z.A. PUŁAWY S.A.  ISO 9001:2015  ISO 14001:2015  ISO PN-N 18001:2004  ISO 22000:2005, FSSC 22000  ISO 50001:2011  Product Stewardship certificate  Responsible Care Framework Management System  INCLUDING THE PN-EN ISO/IEC 17025:2005 accreditation certificate for (valid until December 11th 2020), the EC Fertilizer Conformity Certificate (PULAN® ammonium nitrate, RSM® 32N urea ammonium nitrate solution, PULREA® urea) (valid until May 11th 2020, and the Q- mark product certificate (RSM® 32N urea ammonium nitrate solution, PULAN® ammonium nitrate, PULREA® urea) (valid until April 3rd 2022)

Zakłady Azotowe Chorzów S.A.  ISO 9001:2015  ISO 14001:2015  HACCP Food Safety Management System

GZNF Fosfory S.A.  ISO 9001:2015  PN-EN ISO/IEC 17025:2005

Grupa Azoty JRCh Sp. z o.o. – PN-EN ISO 9001:2015-10, PN-N-18001:2004 and PN-EN ISO 14001:2015-09

Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A.  ISO 9001:2015  IATF 16949:2016  ISO 14001:2015  BS OHSAS 18001:2007  ISO 50001:2011

In 2019, external audits were carried out at Grupa Azoty Group Companies by the relevant certification bodies. The audit findings were positive, supporting extension of the validity of the respective certificates. 0.3 As part of EHS management, EHS performance monitoring, Best practice, Internal Ongoing; to be Annual financial The result/new the Company will develop its maintaining minimum EHS risk Bank's PRs resources completed by report with clear system presented in own procedure for assessing at corporate level the end of estimation of an appropriate EHS provisions and contingent 2015. potential internal executive liabilities to enable: The system will then be extraordinary order of the Group a) their initial assessment, audited and reviewed by an threat to the management and independent financial auditor. environment b) annual verification of their If necessary, the procedure In pursuit of this amounts in accordance with will be updated to enable an objective, the IFRS. appropriate assessment of Management Board environmental liabilities and will rely on IFRS and The initial assessment will be contingent liabilities. EU Guidelines made in 2013 in the consolidated statement of Technical, financial and legal profit or loss and in updated departments of the Company financial statements will be involved. Appropriate accounting for the provisions legal advice will also need to and contingent liabilities. be obtained.

The system will be verified by The consultant believes that an independent qualified the current provision for soil auditor as part of a financial and groundwater clean-up is audit. insufficient and should be increased (in particular for costs of mercury clean-up in Tarnów, as well as demolition work). An initial assessment by Environ is that a provision of EUR 10m should be recognised in the full-year financial statements for costs related to the Wisła landfill site as well as for additional contingent liabilities related to mercury clean-up in Tarnów. However, this needs to be verified. Information: At least once a year, a review of provisions recognised in the financial statements is performed on the basis of information from technical staff. In 2019, the decommissioning method for the closed Mercury Electrolysis Plant was updated. The decommissioning process will consist in demolition of the existing facilities as well as collection and disposal of the resulting waste. The site remediation concept also changed, and the site is no longer intended for remediation. The provision was estimated at the level of costs necessary to carry out the work described above. In making the estimation, it was assumed that the work would be carried out in 2021-2022, with the design and preparatory work scheduled for 2020. As at the end of 2019: 1. Discounted amount of the provision for demolition of mercury electrolysis facilities was PLN 32,123 thousand, 2. Discounted amount of the provision for asbestos disposal was PLN 656 thousand. The provisions were presented in the separate financial statements for 2019, in Note 27 – Provisions as the line item ‘Provision for environmental protection liabilities’ and was verified by the Auditor − Ernst & Young sp. z o.o. sp. komandytowa 0.4 The Company will maintain The technical basis for any IFRS, EBRD, EU External Recognition of Summary in annual adequate provisions and provision or contingent directive consultant/audi provisions and report Information contingent liabilities in the liability will be the subject of requirements tor regular in annual report full-year financial statements a full technical review by a remeasureme for reasonably anticipated suitably qualified independent nt of costs. The provisions and technical advisor in 2015. The provisions and contingent liabilities will be scope of work is to be agreed contingent audited and updated as part upon with the Financial liabilities of a financial audit every Auditor. three years to ensure that adequate provisions are As part of the financial audit, maintained and that an independent auditor will environmental, health and approve the relevant safety liabilities are correctly provision. assessed, quantified and reflected in the financial The purpose of the provisions statements. is to:  ensure that all regulatory The provisions need to be requirements, including independently reviewed by periodic orders or technical advisers every three demands by years. Such review, including environmental a technical opinion on the authorities, are complied provisions and contingent with; liabilities, will take place  ensure availability of a every three years, or in the provision for liabilities event of a material change to related to the landfill site accounting assumptions, or as closure and after-care required by accounting costs; advisers. and  ensure that all other legal requirements or requirements necessary to manage potential environmental liabilities are complied with. Information: The Company maintains an appropriate level of provisions, which is reviewed every year by the Financial Auditor. A review of the provisions for 2019 was performed by the Auditor − Ernst & Young sp. z o.o. sp. komandytowa in the course of the ongoing accounting audit. 0.5 In the event of a site closure For each such site, the IFRS Internal 2013 onwards Annual report for Please provide a or sale, the Company will Company: resources/accou the shareholders summary in the undertake an environmental  will maintain a financial nting/consultant 2016 annual assessment to identify its mechanism to implement report. environmental or social a remediation plan in case liabilities prior to the of contamination, as well closure/sale. This will as a plan for closure or include, if needed, after-care of the site, retrenchment plans to ensure including a landfill site, or compliance with the EBRD restructuring or Performance Requirement 2, retrenchment, to the as well as development and extent that, in the event implementation of of its sale, the liability remediation plans based on a and costs are not borne by site-specific risk assessment the buyer, in a manner to limit the risk to the which will ensure that any environment and humans related liabilities do not from contamination that is or revert to the Company, its may be present at, or that shareholders or its parent, may originate from, the site and or result from the Company’s  will agree on the financial activities. mechanism with the parent prior to the closure or sale. Information: The Company does not plan to close or sell a site in the near future. When individual installations are decommissioned or disposed of, an environmental assessment is carried out. The financial statements for 2019 was audited by the Auditor, Ernst & Young sp. z o.o. sp. komandytowa. 0.6 Develop a new Corporate Social impact monitoring, Best practice, Internal Ongoing; Information in the To be updated Social Responsibility (CSR) maintaining minimum CSR in Bank's PRs (PR resources annual report. every year programme for the entire accordance with the GRI 1, 2, 4 and 10) Grupa Azoty Group (Global Reporting Initiative) Information: Grupa Azoty S.A. carried out the following Corporate Social Responsibility projects:  In 2019, the Company chose not to adopt a Sustainable Development Strategy for 2018-2022. At the same time, it pursues the UN Sustainable Development Goals relevant to the chemical industry, which will be taken into account when working on the Strategy at a later time.  Integrated Report for 2018;  Grupa Azoty’s participation in the UN Global Compact in 2019 – a corporate social responsibility initiative announced by the UN Secretary- General. The Integrated Report covers the four largest companies of the Grupa Azoty Group: Grupa Azoty S.A., Grupa Azoty PUŁAWY, Grupa Azoty POLICE and Grupa Azoty KĘDZIERZYN. The Grupa Azoty Group’s Sustainable Development activities are aligned with the UN SDGs relevant to the chemical industry, which will also be included in a future concept for the Group’s Sustainable Development Strategy.

PILLAR 1: Product and production Our ambition: We guarantee efficient, innovative and environmentally friendly production by: Ensuring high product quality Investing in research and looking for innovative technological solutions, extending the product value chain (chemicals and plastics) Enhancing the environmental efficiency and cost efficiency of the processes (reduction of energy consumption, emissions, water consumption) Ensuring safety of production, transport and storage Ensuring staff safety Promoting the development of a closed-loop economy

PILLAR 2: People and relationships Our ambition: We enhance our positive impact on the social and economic environment by: Supporting the development of sustainable agriculture and precision farming, education of farmers Improving customer relations Supporting social and economic development of the cities and regions where our main plants are located Sponsorship, community engagement and social dialogue Developing the intellectual capital of our present and future employees, who represent our immediate social environment in the locations of our main plants

PILLAR 3: Good governance Our ambition: We strive for operational excellence and manage our risks through: Organisational governance and compliance Building a coherent organisational culture based on values and ethics Enhancing employee engagement and innovativeness Supply chain responsibility management Ensuring cyber-security Participation in ESG (Environmental, Social and Governance) criteria reviews and ESG initiatives Monitoring of key indicators and integrated reporting in accordance with the world’s most recognised standards and guidelines. 0.7 Provide the Bank with a Update of the road map for Legislative Internal BAT Information in the As part of the report on the status of maintaining compliance with requirements resources assessment in annual report on annual report implementation of IED the Industrial Emissions and best 2015 progress status. for 2016, the (Industrial Emissions Directive by all Grupa Azoty practice Company will Directive) and EU ETS Group production plants. In 2015, provide the provide updated requirements by Grupa Azoty Bank with an information on as part of annual reports A schedule for an independent executive summary steps taken to submitted to EBRD. audit of IED BAT compliance of the BAT ensure will be developed in 2015, assessment and ESAP continuous The report also includes taking into account implementation. compliance with information on the status of compliance post 2016. BAT, and will projects in progress and identify the projects planned to ensure Provide information in the specific BAT compliance after 2016. annual report on any material requirements to instances of non-compliance, be implemented accidents/incidents, or within four investment needs as agreed years of with regulators. adoption of the new Best Available Techniques Reference Document (“BREF”) Information: Key pro-environmental projects completed in 2017 at Grupa Azoty S.A. included the construction of flue gas deNOx and desulfurisation units. The projects were undertaken to ensure compliance of the Company's industrial combustion sources with the requirements laid down in the Minister of Environment's Regulation on emission standards for installations of April 22nd 2011 and the Industrial Emissions Directive. As a result, the amount of pollutants released into the environment by the combustion sources will be reduced, improving air quality. Construction of the flue gas desulfurisation and NOx removal units was co-financed under the Norwegian Financial Mechanism 2009–2014. Capital expenditure on the flue gas desulfurisation and particulates extraction project totalled PLN 40,723 thousand (which includes expenditure until 2019). Capital expenditure on the flue gas deNOx project totalled PLN 43,581 thousand (which includes expenditure until 2019). In 2019, GRUPA AZOTY S.A.initiated projects designed to bring the Company’s heat and power generation activities in line with the more stringent environmental requirements arising from BAT conclusions (Commission Implementing Decision 2017/1442/EU of July 31st 2017 establishing best available techniques (BAT) for large combustion plants). The projects will include upgrades of the K1 gas-fired boiler and FGD unit on the K5 boiler. 0.8 Ensure that Grupa Azoty has Ensure ongoing compliance Legal Internal Ongoing Provide update on valid IPPC/IED permits and is with IPPC and IED. requirements resources status in the annual in compliance with Polish and report submitted to EU requirements. the Bank. Information: Currently, Grupa Azoty S.A. operates pursuant to the following decisions: Integrated permits:  Decision by the Marshal of the Kraków Province dated June 20th 2012 Ref. No. SR-II-1.7222.1.1.2012, granting an integrated (IPPC) permit to Zakłady Azotowe w Tarnowie-Mościcach for the Hydrogen Unit, valid for an indefinite term (permit amended by Decision of December 3rd 2014 Ref. No. SR-II-1.7222.2.13.2014);  Decision by the Governor of the Kraków Province dated February 16th 2007 Ref. No. ŚR.XIV.JI.6663-6-05, granting an integrated (IPPC) permit to Zakłady Azotowe w Tarnowie-Mościcach for the Park Infrastruktura Complex, valid for an indefinite term (permit amended by Decision of July 29th 2011 Ref. No. SR-II-1.7222.1.3.2011, Decision of September 11th 2012 Ref. No. SR-II-1.7222.1.7.2012, Decision of December 3rd 2014 Ref. No. SR-II-1.7222.2.17.2014, Decision of December 31st 2015 Ref. No. SR-II-1.7222.2.1.2015, and Decision of March 10th 2017 Ref. No. SR-II.7222.2.9.2016);  Decision by the Governor of the Kraków Province dated April 17th 2007 Ref. No. ŚR.XI.JI.6663-3-06, granting an integrated (IPPC) permit to Zakłady Azotowe w Tarnowie - Mościcach for the POM Manufacturing and Compounding Complex, valid for an indefinite term (permit amended by Decision of July 29th 2011 Ref. No. SR-II-1.7222.1.1.2011 and Decision of December 3rd 2014 Ref. No. SR-II-1.7222.2.14.2014);  Decision by the Governor of the Kraków Province dated July 29th 2011 Ref. No. SW.II.1.AJ.7673-10/09, granting an integrated (IPPC) permit to Zakłady Azotowe w Tarnowie - Mościcach for the Technical Grade Nitric Acid Unit, Calcium Ammonium Nitrate and Ammonium Nitrate Unit, Nitrogen Fertilizer Granulation Unit, and Dolomite Milling Unit, valid for an indefinite term (permit amended by Decision of December 3rd 2014 Ref. No. SR-II-1.7222.2.15.2014, Decision of August 16th 2016 Ref. No. SR-II.7222.2.8.2016, Decision of July 21st 2017 Ref. No. SR- II.7222.2.27.2016, and Decision of January 18th 2018 Ref. No. SR-II.7222.2.34.2017);  Decision by the Governor of the Kraków Province dated July 17th 2007 Ref. No. ŚR.XIV.JI.6663-2-06, granting an integrated (IPPC) permit to Zakłady Azotowe w Tarnowie - Mościcach for the Caprolactam and Polyamide Manufacturing Complex (permit amended by Decision of March 16th 2009 Ref. No. SW.II.1.JI.7673-6/08, with respect to the Natural Polyamide Unit), amended in its entirety by Decision by the Marshal of the Kraków Province dated December 1st 2010 Ref. No. SW.II.1.AJ.7673-11/08 (permit amended by Decision of July 29th 2011 Ref. No. SR-II- 1.7222.1.2.2011, Decision of February 16th 2012 Ref. No. SR-II-1.7222.1.2.2012, and Decision of June 20th 2012 Ref. No. SR-II- 1.7222.1.5.2012), Decision of October 21st 2013 Ref. No. SR-II-1.7222.1.3.2013. - [Sulfuric acid production], Decision of December 3rd 2014 Ref. No. SR-II-1.7222.2.16.2014 - [Sulfuric acid production], and Decision of January 23rd 2018 Ref. No. SR.II.7222.2.12.2017), valid for an indefinite term;  Decision by the Marshal of the Kraków Province dated June 28th 2018, Ref. No. SR-II.7222.13.4.2016, granting an integrated (IPPC) permit to Grupa Azoty S.A. for its Iron-Chromium Catalyst Plant II, valid for an indefinite term;  Decision by the Marshal of the Kraków Province dated July 1st 2015 Ref. No. SR-IV-1.7222.1.2015, granting an integrated (IPPC) permit to Grupa Azoty S.A. for the Central Wastewater Treatment Plant, amended by Decision Ref. No. SR-II.7222.1.7.2018.MM of April 20th 2018 and valid for an indefinite term; Air emissions  Decision by the Governor of the Kraków Province dated December 29th 2014, Ref. No. SR-II-1.7221.2.2014, granting a permit for release of gases and dusts into the air to Grupa Azoty S.A., valid until December 28th 2024;  Notification of Grupa Azoty S.A.'s EC II CHP Plant Water Treatment Unit and Modified Plastics Facility to the Marshal of the Kraków Province Ref. No. TB/JK/1034/2014, dated November 24th 2014; EU ETS  Decision by the Marshal of the Kraków Province dated April 28th 2017, Ref. No. SR-II.7225.1.21.2016, granting permission to participate in the European Union Emissions Trading Scheme for the CHP plant located on the premises of Grupa Azoty S.A., including a Monitoring Plan, amended by Decision by the Marshal of the Kraków Province dated September 16th 2019, Ref. No. SR-II.7225.2.3.2019.AJ, including a Monitoring Plan, valid for an indefinite term;  Decision by the Marshal of the Kraków Province dated November 24th 2017, Ref. No. SR-II.7225.1.7.2016, granting permission to participate in the European Union Emissions Trading Scheme with respect to greenhouse gas emissions from the units manufacturing nitric acid, ammonia and bulk organic chemicals by way of cracking, reforming, oxidation or similar processes, with a daily production capacity of over 100 Mg, including a Monitoring Plan, amended by Decision by the Marshal of the Kraków Province Ref. No. SR-II.7225.3.12.2018.AJ, dated June 13th 2019, including a Monitoring Plan, valid for an indefinite term; Water and wastewater  Decision by the Mayor of Tarnów Ref. No. WGK.B-III.6210/16/02/03 dated January 13th 2003, granting a permit for collective water supply and collective wastewater discharge, valid for an indefinite term;  Decision by the Governor of the Kraków Province dated December 30th 2014 Ref. No. SR-IV-1.7322.1.28.2014.MG, granting a permit for special use of water – abstraction of groundwater from an intake point located in Tarnów-Mościce, valid until December 31st 2034;  Decision by the Governor of the Kraków Province dated December 29th 2005 Ref. No. ŚR.XIV.MGą.6811-31-05, granting a permit for special use of water – abstraction of surface water from the Dunajec river, valid until December 31st 2025, amended by Decision Ref. No. KR.RUZ.4211.180.2018.IT dated November 16th 2018;  Decision by the Regional Water Management Authority of Kraków Ref. No. KR.RUZ.421.1.102.2019.AS dated July 1st 2019, granting a permit for discharge of wastewater containing substances particularly harmful to the water environment into the sewerage system of Zakład Oczyszczania Ścieków T.W. Sp. z o.o., valid until July 1st 2023;  Decision by the Marshal of the Kraków Province dated December 15th 2017 Ref. No. SR-IV.7322.1.259.2017.MG, granting a permit for discharge of wastewater into surface waters, valid until December 31st 2021;  Decision Ref. No. SR-IV.1.7328.1.2013.MG, establishing a protected zone for water intake points; Waste  Decision by the Marshal of the Kraków Province dated January 20th 2016 Ref. No. SR-III-1.7244.4.9.2015.AG permitting Grupa Azoty S.A. to collect and process waste, valid until January 19th 2026; Other  Resolution of the Provincial Assembly of the Kraków Province of October 25th 2010, No. LI/833/10, establishing Industrial Zone at ZAT S.A. (Official Journal of the Province of Kraków, No. 580/2010, item 4475). 0.9 Develop and implement a The corporate (and site- Best practice, 2013−2016; SEP to be NTS is to be a corporate (Grupa Azoty) specific) SEP will outline the EBRD PRs thereafter to amended/updat separate document Stakeholder Engagement Plan Company's public be reviewed ed every three in accordance with (SEP) in line with EBRD PR 10. communication policy and every two years or earlier, the Environmental commitments, including the years as part as needed. Impact Assessment For any new investment grievance mechanism, of EHS audits directive (“EIA project where an indication of contact persons Please provide a directive”), and Environmental Impact and project information copy of the NTS include information Assessment (EIA) is required availability. (link to web on the project, by Polish authorities, publish site) in the impacts and risk online a Non-Technical annual report mitigation actions, Summary (NTS) of SEP for all and as a presented in a projects covered by Annex 1 summary of SEP concise and as defined in the EIA directive associated with meaningful way. Ensure that the EIA process is the EIA process. carried out in accordance with EU and Polish requirements. Information: On its website, Grupa Azoty regularly publishes its Integrated Report, addressing a range of aspects, including safety and environmental protection (for the most recent report visit http://raport.grupaazoty.com/). 0. Regular ESHS audits (every Review status of operations Best practice As part of BAT Report for the Report for the 10 three years) to review the assessment in Management Bank as part of progress in ESAP 2015 Board and 2016 report implementation and status of EBRD compliance with EU environmental standards. The first report will be part of BAT assessment. Information: In line with the Strategy, the Company focuses on consistent alignment of product quality and range to customer requirements, product improvement with the use of innovative technologies, and reduction of product costs through modernisation of key production lines. To ensure lasting and effective customer relations and become the first-choice supplier, the Company makes every effort to offer top quality products. The pursuit of strategic objectives is based on management systems consistent with the highest international standards. Also, pursuant to environmental protection laws, the Company holds valid integrated (IPPC) permits to operate all its production units, which define the Company's obligations under applicable laws. BAT assessments for individual units were made in the applications for amendments to the integrated (IPPC) permits for existing IPPC installations and will be made in the applications for integrated (IPPC) permits for new installations. The analysis confirmed compliance of Grupa Azoty S.A.'s existing installations with BAT.. For information on EHS audits, see Section 1.1. 0.1 Develop contaminated land Compliance with the Legislative As soon as Soil or Regular 1 management plan - this regulations and remediation requirement possible groundwater monitoring should include identification programmes. surveys or results for each and cataloguing of monitoring contaminated contaminated sites, control results site. measures and remediation Identification plan. should cover areas around production plants. Information: Grupa Azoty S.A. carried out surveys to find out if there are any contaminated areas within its premises. The surveys enabled the Company to make a catalogue of contaminated sites. Local soil contamination with mercury was found at the decommissioned Mercury Electrolysis Unit – spreading of the contamination is monitored by means of piezometers located within the contaminated area. No contamination of groundwater was detected. In 2015, a Baseline Report was prepared covering the Company's premises, which is submitted to the Marshal Office together with applications for integrated permits. In accordance with the integrated (IPPC) permits, a systematic soil and groundwater contamination risk assessment is conducted every year for facilities covered by the permits. 1. Site Specific Environmental, Health and Safety Management System No. Action Environmental risks, Legislative Requirement/ Scheduled Target and Comments liabilities/benefits requirements/B Resources completion – evaluation criteria est practice action to be for implementation completed by progress end of year 1.1 Introduce newly developed In order to maintain Compliance Management In the course EHS management Cover each Environmental, Health and comprehensive management with EBRD and time or of 2013-2014 system has a clear plant with the Safety Management Systems systems at the Company, it is PR 1. consultant structure defining existing EHS at all Grupa Azoty production necessary to implement the Compliance fees responsibilities and management plants. newly developed EHS systems with standards formalised operating systems at all production plants. of the leading procedures. Maintaining effective and companies (ZA comprehensive environmental Tarnów and ZA and social management Puławy). systems is the best way to ensure a dynamic and continuous improvement of EHS performance at the Company. It allows the organisation to identify, avoid, minimise and mitigate potential EHS risks and impacts. The EHS management system must cover activities undertaken by contractors and other third parties (plant engineering and maintenance staff) as well as other plant staff. The system should include an EHS training programme for all employees and contractors. Information: On a site-specific basis, i.e. Grupa Azoty S.A.

Grupa Azoty S.A. pursues a Corporate Management Policy which guarantees that the Company's strategic goals are achieved in reliance on an integrated management system, consistent with international standards. Grupa Azoty S.A. holds the following management system certificates related to the indicated areas:  environmental management system certificate confirming the system's conformity with the ISO 14001:2015 standard  quality management system certificate confirming the system's conformity with the ISO 9001:2015 standard  occupational health and safety management system certificate confirming the system's conformity with the BS OHSAS 18001:2007 standard ;  food safety management system certificate confirming the system's conformity with the ISO 22000:2005  energy management system certificate confirming the system's conformity with the ISO 50001:2011 standard;  Product Stewardship certificate;  accreditation certificate for the research laboratory confirming conformity with the PN-EN ISO/IEC 17025:2005 standard

The implemented systems are continually improved. The Company adopts improvement programmes for a given year, covering, among other things, various issues that determine improvement in the EHS area. The manner of proceeding in this respect is described in a management systems procedure, which has been put in place. The Company has also implemented a procedure for identification of environmental aspects and selection of material aspects. Another procedure in place at the Company is the Environmental Monitoring and Measurements. The following procedures apply with respect to OHS management: the Occupational Risk Management, and the Monitoring of Occupational Health and Safety. These tools describe the rules of identifying, assessing and managing environmental and OHS issues with a view to minimising related risks. The procedures and other internal regulations adopted by the Company take into account the activities of employees, contractors and other third parties, as well as their training. 1.2 Provide annual reports on EHS Aspects to be included in the Best Internal Annually, Expand existing Provide annual performance to EBRD and annual report: practice/compli resources published in shareholder reports on other shareholders.  general information on ance with EBRD the first reporting Environmental, the project status within PRs quarter of a system. Social, Health and A general (brief) summary of the Group; year Safety (ESHS) environmental and social  information on the overall performance to the matters to be provided on the environmental First report in EBRD and other website. performance and 2014. shareholders. compliance; For every new project that  summary of KPIs covering A general (brief) requires an EIA under Polish energy intensity and summary of law and is subject to Annex 1 carbon dioxide emissions environmental and to the EIA directive, a Non- for each subdivision; social matters to be Technical Summary (NTS) to  summary of any areas of provided on the be provided on the Internet. material non-compliance website. with environmental regulations, or material breach of the relevant permit levels;  information on any material fines or other material charges or pending court cases related to ESHS matters;  general information on ESAP implementation;  summary of any material legislative changes related to environmental or social aspects. Information: The EHS report was prepared in 2018. EHS information is included in the report for EBRD and in the account of ESAP implementation. Grupa Azoty was working to prepare its integrated report for 2018. The report, drawn up in accordance with the Global Reporting Initiative Standards, will be subject to external audits. The GRI report will be available on the Company's website. Non-Technical Summaries concerning new implemented projects requiring an EIA are posted on the Grupa Azoty website. 1.3 Set up a procedure to process Early identification of Best practice Operational Ongoing Management reports Set up a complaints and grievances to problems and public and compliance costs of on application of the procedure to enable meaningful public grievances to ensure timely with EBRD and information grievance procedure process consultation and information implementation of solutions. PR 10 office. complaints and process, in particular with requirements. grievances to regard to historical enable environmental impact (e.g. meaningful the Wiślinka landfill site in public Gdańsk). The potential consultation and environmental and social risks information are treated as a significant process issue requiring much attention. Information: Grupa Azoty S.A. has developed and implemented a procedure for handling complaints and grievances in the form of Instruction No. I-705/4. 2. Actions required to maintain compliance with EHS requirements of national law and EU environmental standards - GRUPA AZOTY S.A. No. Action Environmental risks, Legislative Requirement/ Scheduled Target and Comments liabilities/benefits requirements/B Resources completion – evaluation criteria est practice action to be for implementation completed by progress end of year 2.1 Monitoring of environmental Record consumption of raw Legislative Internal Ongoing/ad-hoc and Statement of Achieve impacts of all operated materials, fuels and energy, obligation, best resources periodic reports compliance environmental production facilities. air emissions, water practice/intern in the annual impact level in consumption, and amounts of al resources report line with the Reference to BAT generated waste Regularly design, requirements. evaluate operational environmental efficiency to minimise guarantees and resource consumption and standards, waste generation. identify potential improvements. Submit report to the Bank. Information: The Company records consumption of raw materials, fuels and energy, air emissions, water consumption, and amounts of generated waste. Data describing the scale of environmental impacts is entered in the Company's Environmental Pollution Data Bank. This IT system is used to prepare Reports for the Marshal Office of Kraków and ad-hoc reports for the Company's internal needs and for external institutions. Furthermore, reports are prepared for the National Database on Emissions of Greenhouse Gases and Other Substances, and the National Pollution Release and Transfer Register. As part of reviews of the integrated (IPPC) permits held by Grupa Azoty S.A., the Company’s compliance with BAT requirements is assessed. In 2019 , an assessment was performed to check the conformity of the Company's environmental impacts with the integrated (IPPC) permits held. 2.2 Complete planned The Sulfuric Acid Plant Best practice Internal Ongoing/ad-hoc and Provide investment projects, such as is being upgraded and Legal resources periodic reports update on the Sulfuric Acid Plant the project will help requirements BAT upgrade, to maintain maintain BAT /BAT compliance compliance with BAT. compliance as part of 2015 BAT assessment Information: The upgrade of the Sulfuric Acid Plant was completed in December 2013. The purpose of the project was to achieve improved environmental performance and increased steam output, while ensuring BAT compliance. Capital expenditure on the project totalled PLN 64,646 thousand. 2.3 Complete the planned Reduce environmental impact Legislative Investment By 2016/2017 Obtain a relevant modernisation of energy in line with IED requirements requirements, needs permit generation installations to (Annex V of IED). The best ensure compliance post 2016. investment project will management Update information The action will require include a deNOx unit, an FGD practices, on the project in the application of relevant unit, and a more efficient Bank's PRs annual report, derogations agreed upon with particulates extraction selected technology Polish and EU authorities. system, in connection with and target emission BAT requirements. levels. Target emission levels: 3 200 mg/m for SO2 As part of the energy audit Publish NTS of the 200 mg/m3 for NOx and BAT assessment, other project and provide 20 mg/m3 for PM. carbon reduction measures copy/web link to the will be considered. Bank as part of the The Company to provide annual report. information on the derogations and their relevance to the annual report. Information: Key pro-environmental projects completed in 2017 at Grupa Azoty S.A. included the construction of flue gas deNOx and desulfurisation units. The projects were undertaken to ensure compliance of the Company's industrial combustion sources with the requirements laid down in the Minister of Environment's Regulation on emission standards for installations of March 1st 2018 and the Industrial Emissions Directive of July 31st 2017. As a result, the amount of pollutants released into the environment by the combustion sources will be reduced, improving air quality. Construction of the flue gas desulfurisation and NOx removal units was co-financed under the Norwegian Financial Mechanism 2009–2014. Capital expenditure on the flue gas desulfurisation and particulates extraction project totalled PLN 40,723 thousand (which includes expenditure until 2019). Capital expenditure on the flue gas deNOx project totalled PLN 43,581 thousand (which includes expenditure until 2019). In 2019, GRUPA AZOTY S.A.initiated projects designed to bring the Company’s heat and power generation activities in line with the more stringent environmental requirements arising from BAT conclusions (Commission Implementing Decision 2017/1442/EU of July 31st 2017 establishing best available techniques (BAT) for large combustion plants). The projects will include upgrades of the K1 gas-fired boiler and FGD unit on the K5 boiler. 2.4 Prepare a plan (including Reduce environmental impact Legislative Investment 2015 - 2020 as Obtain integrated Information on . budget) and - if necessary - and ensure compliance with requirements, needs, internal required by (IPPC) permit and the progress upgrade the wastewater IED requirements. best and external competent achieve compliance status should be treatment plant to ensure management authorities provided in long-term compliance with practices, annual reports Polish and EU environmental Bank's PRs starting from standards 2015 Information: Grupa Azoty prepared an upgrade plan for its wastewater treatment plant. Possible time of implementation of the project has been defined as 2020- 2021. Due to changes in the composition and amount of wastewater in recent years, the plan is to be updated in 2019/2020, for instance to continue the work scope optimisation and update the project schedule. 2.5 Prepare a plan (including Reduce negative Legislative Internal 2015 - 2018 Report on soil and budget) and conduct soil and environmental impact in line requirements, resources and groundwater groundwater surveys. with IED requirements. This best external condition will enable an assessment of management support baseline conditions and practices, identification of potential Bank's PRs impact receptors. Information: In 2015, a Baseline Report was prepared covering the Company's premises, which was submitted in 2016 to the Marshal of the Kraków Province. In accordance with the integrated (IPPC) permits, a systematic soil and groundwater contamination risk assessment is conducted every year for facilities covered by the permits.

CERTIFIED TRANSLATION FROM POLISH

Annual Environmental & Social Report

1. Information about the Company Company Name: Grupa Azoty Zakłady Azotowe Puławy S.A. Company Address: Aleja Tysiąclecia Państwa Polskiego 13 Country: Poland Town/Location: Puławy Company authorised representative: Andrzej Skwarek I certify that the data contained in this report completely and accurately represents the Company’s operations during the reporting period. Signature: Andrzej Skwarek

Title: Member of the Management Board Date: 8th April,2020 Contact Details: Telephone: (+48) 81 565 22 60 Email: [email protected]

Please provide key data on the Company performance, as well as production levels at each plant. For each of the 7 large plants please provide:

Item Cumulative 2017 2018 2019 [PLN ‘000] performance performance performance Revenue 3,060,088 3,107,307 3,137,472 Profit/(loss) on sales 350,210 96,237 396,617 EBIT 351,287 91,646 394,471 EBITDA 528,062 286,713 621,415 Net profit/(loss) 284,082 84,161 283,848

Key performance indicators in terms of energy consumption, emissions, use of natural resources, and carbon dioxide emissions; Number of staff employed and any change in employment over past 3 years

As at Dec 31 2017 As at As at Dec 31 2018 Dec 31 2019 Number of direct employees: 3,498 3,486 3,487 Number of contracted workers: 53 22 31

Provide information on permits and each subsidiary’s compliance status with IPPC/IED (Integrated Pollution Prevention and Control Directive/Industrial Emissions Directive)

Environmental decisions held by Grupa Azoty Zakłady Azotowe Puławy S.A.

A. Integrated permit

 Decision of the Provincial Office of Lublin No. PZ 7/2004 Ref. No. ŚiR.V.6618/31-5/04, granting to Zakłady Azotowe Puławy S.A. of Puławy an integrated (IPPC) permit to operate chemical industry installations to manufacture, using chemical processes, organic and inorganic chemicals and artificial fertilizers, a fuel combustion plant with a rated capacity of no less than 50 MW, a landfill intended for wastes other than hazardous and inactive waste, an ammonia storage and distribution tank, and a wastewater treatment installation.

Amending decisions:  Decision No. PZ 12/2007 of December 12th 2007, Ref. No. ŚiR.V.6618/14-12/2006/2007, issued by the Governor of the Lublin Province  Decision No. PZ 8/2008 of November 25th 2008, Ref. No. RŚ.IŁ.0722/12/08, issued by the Marshal of the Lublin Province  Decision No. PZ 21/2010 of July 27th 2010, Ref. No. RŚ.V.MJ.7624/52/08, issued by the Marshal of the Lublin Province  Decision No. PZ 16/2011 of August 9th 2011, Ref. No. RŚ.V.IŁ.7624/52/08, issued by the Marshal of the Lublin Province  Decision No. PZ22/2012 of November 28th 2012, Ref. No. RŚ.V.IŁ.7624/52/08, issued by the Marshal of the Lublin Province  Decision No. PZ23/2014 of October 23rd 2014, Ref. No. RŚ-V.7222.46.2014.ILU, issued by the Marshal of the Lublin Province  Decision No. PZ45/2014 of November 28th 2014, Ref. No. RŚ-V.7222.46.2014.ILU, issued by the Marshal of the Lublin Province  Decision No. PZ7/2015 of April 8th 2015, Ref. No. RŚ-V.7222.46.2014.ILU, issued by the Marshal of the Lublin Province  Decision No. PZ15/2015 of June 24th 2015, Ref. No. RŚ-V.7222.46.2014.ILU, issued by the Marshal of the Lublin Province  Decision No. PZ6/2016 of February 26th 2016, Ref. No. RŚ-V.7222.46.2014.MCHW, issued by the Marshal of the Lublin Province  Decision No. PZ 15/2017 of July 11th 2017, Ref. No. RŚ-V.7222.46.2014.MCHW, issued by the Marshal of the Lublin Province  Decision No. PZ 30/2017 of December 18th 2017, Ref. No. RŚ-V.7222.46.2014.ILU, issued by the Marshal of the Lublin Province  Decision No. PZ 14/2018 of April 24th 2018, Ref. No. RŚ-V.7222.46.2014.ILU, issued by the Marshal of the Lublin Province  Decision No. PZ 23/2019 of November 6th 2019, Ref. No. RŚ-V.7222.46.2014.ILU, issued by the Marshal of the Lublin Province  Decision No. PZ 4/2020 of February 11th 2020, Ref. No. RŚ-V.7222.46.2014.ILU, issued by the Marshal of the Lublin Province.

B. Integrated permit  Decision No. PZ22/2018 of July 11th 2018, Ref. No. RŚ-V.7222.2.2018.ILU, issued by the Marshal of the Lublin Province to operate chemical industry installations to manufacture, using chemical or biological processes, straight or compound fertilizers based on phosphorus, nitrogen or potassium.

Validity period – indefinite

B. Decision permitting participation in the EU emissions trading scheme – installation: CHP Plant

 Decision of August 9th 2016, Ref. No. RŚ-V.7225.8.2016.ARA , issued by the Marshal of the Lublin Province as amended by:  Decision of March 21st 2017, Ref. No: RŚ-V.7225.8.2016.MCHW, issued by the Marshal of the Lublin Province  Decision of February 7th 2018, Ref. No: RŚ-V.7225.8.2016.AGK, issued by the Marshal of the Lublin Province  Decision of April 18th 2019, Ref. No: RŚ-V.7225.8.2016.AGK, issued by the Marshal of the Lublin Province

C. Decision granting permit for greenhouse gas emissions by process installations

 Decision of August 9th 2016, Ref. No: RŚ-V.7225.7.2016.ARA, issued by the Marshal of the Lublin Province, as amended by:  Decision of March 21st 2017, Ref. No: RŚ-V.7225.7.2016.MCHW, issued by the Marshal of the Lublin Province  Decision of February 8th 2018, Ref. No: RŚ-V.7225.7.2016.AGK, issued by the Marshal of the Lublin Province  Decision of April 5th 2019, Ref. No: RŚ-V.7225.7.2016.AGK, issued by the Marshal of the Lublin Province.

D. Sector permits  Decision approving the landfill site operation manual dated December 17th 2014, Ref. No: RŚ-V.7241.34.2014.LG, issued by the Marshal of the Lublin Province.

E. Safety report

Safety report approved by the Commander-in-Chief of the State Fire Service in the Lublin Province by way of Decision No. WZ-5517/47-2/03 of November 12th 2003. Amending decisions:  Decision Ref. No. WZ-5517/23-3/10 of November 3rd 2010,  Amendments to the Safety Report of 2013 were approved by Decision Ref. No. WZ.5586.4.2013 of May 16th 2013. On December 4th 2019, further versions of the Safety Report were submitted to the Inspectorate of Environmental Protection for the Lublin Province and the Lublin Province Commander-in-Chief of the State Fire Service. By letter Ref. No. WI.7060.1.57.2019.RG of January 15th 2020, the Inspectorate of Environmental Protection for the Lublin Province endorsed the Safety Report submitted by Grupa Azoty Zakłady Azotowe Puławy S.A. Until this date, the procedure to approve the Safety Report by the Lublin Province Commander-in-Chief of the State Fire Service has not been completed.

Reporting period: 2019

2. General Is the project materially compliant Yes [X] If No, please provide details of any material with all relevant EBRD Performance No [ ] non-compliances: Requirements (taking account of agreed action plans, exemptions or derogations)? Is the project materially compliant Yes [X] If No, please provide details of any material with all applicable environmental and No [ ] non-compliances: social laws and regulations? Have there been any accidents or Yes [ ] If Yes, please describe, including details of incidents that have caused damage to No [X] actions to remedy and prevent the environment, brought about reoccurrence: injuries or fatalities, affected project labour or local communities, affected cultural property, or created liabilities for the Company? Have there been any changes to Yes [X] If Yes, please describe: environment, social, labour or health No [ ] The Waste Act has introduced the and safety laws or regulations that requirement to conduct video surveillance have materially affected the of waste landfill sites – with respect to GA Company? Puławy, a visual monitoring system needs to be installed on one of the landfill cells. How many inspections did you receive Number: 4 Please provide details of these visits, from the environmental authorities including number and nature of any during the reporting period? violations found: Inspections by the Provincial Inspectorate of Environmental Protection 1/ On June 4th – June 24th 2019 – Inspection of compliance with the obligations arising from participation in the greenhouse gas emissions trading scheme and of compliance with environmental protection requirements by the operators of facilities requiring an integrated (IPPC) permit. No irregularities were identified in the environmental area and no post-inspection recommendations were issued. 2/ On September 4th – October 31st 2019 – Inspection of compliance with waste management regulations by waste producers. 3/ On September 12th – October 11th 2019 – Inspection of compliance with waste management regulations by waste collectors and processors, processing waste in places posing fire hazards. 4/ On December 3rd 2019 – Inspection concerning prevention of major accidents.

No irregularities were identified in the environmental area and no post-inspection recommendations were issued.

How many inspections did you Number: 15 Please provide details of these visits, receive from the health and safety inspections including number and nature of any authorities during the reporting during the 2019 violations found: Following the inspections, period? calendar year. no decisions were issued.

How many inspections did you Number: 2 Please provide details of these visits, receive from the labour authorities inspections including number and nature of any during the reporting period? during the violations found: calendar year Following the inspections, one order 2019 comprising three recommendations and one improvement notice containing one recommendation were issued. The order’s recommendations were, inter alia, to undertake a documented review of the technical condition of the coverings of floor process ducts, equip the floor panels installed over the service and process ducts in the E-101 building with elements stabilising them in position and equip the floor panels installed over the service and process ducts in the E-101 building selected for lifting, where necessary to provide the required access to ducts, with handholds enabling them to be safely lifted and put back in place. The recommendation in the improvement notice was to supplement the job instructions for a controller and operator of chemical processes at the liquid ammonia cylinder filling unit with information on the rules for filling cylinders with a water holding capacity of 108 litres. All the recommendations formulated in the improvement notice and in the order have been or are being carried out. Have these visits resulted in any Yes [ ] If Yes, please describe, including status of penalties, fines and/or corrective No [X] implementing corrective actions to address action plans? any violations found: In connection with a decision issued by the Sanitary Inspector of Puławy, a fine was imposed on the Company as a result of the inspection. No other penalties were imposed. In connection with the National Labour Inspectorate’s order to undertake a documented review of the technical condition of the coverings of floor process ducts, task teams had been set up which carried out the review at all units where such locations exist. The inspection was notified in writing to the National Labour Inspectorate (PIP). Has the Company engaged any Yes [ ] If Yes, please state for which types of work, contractors for project-related work No [X] and how the Company has monitored the in the reporting period? compliance of contractors with EBRD Performance Requirements and the Environmental and Social Action Plan:

Yes [X] If Yes, please provide details, including how No [ ] the Company is ensuring that corrective actions are implemented by the contractor? During inspections, recommendations are Were any violations found as a result issued – such recommendations are of these actions that were the presented in inspection reports or given responsibility of external contractors orally. Compliance with the engaged by the Company? recommendations is checked during subsequent inspections. In the event of serious non-compliances, work is interrupted until the problem is remedied. Have any operations been reduced, Yes [ ] If Yes, please describe: temporarily suspended or closed down No [X] due to environmental, health, safety or labour reasons? Please describe any environment or social programmes, initiatives or sub-projects undertaken during the reporting period to improve the Company's environmental or social performance and/or management systems: See Section 9. Please indicate the level of associated expenditure (capital expenditure and operating expenditure), and whether this relates to the requirements of the Environmental and Social Action Plan, or to any other initiative: See Section 9.

4. Environmental Monitoring Data for each of the key subsidiaries The information required in this section can be extracted from a CSR report, or a full CSR report can be attached.

Please provide the name and contact details for Marek Kuba – Chief Environmental your environmental manager: Protection Officer, Email: [email protected] Telephone: (+48) 81 565 21 27 Parameter2 Amount3 Unit Compliance Status4 Comments5 Wastewater Total wastewater 75,006 ‘000 m3 Biochemical Oxygen 0.15 Compliant with mg/dm3 Demand (BOD5) Integrated Permit Chemical Oxygen 29.3 Compliant with mg/dm3 Demand (COD) Integrated Permit Suspended solids 21.6 Compliant with mg/dm3 Integrated Permit Phosphorus 0.23 Compliant with mg/dm3 Integrated Permit Nitrates 7.9 Compliant with mg/dm3 Integrated Permit Heavy metals Zinc 0.0598 mg/dm3 Compliant with Integrated Permit Nickel 0.0022 mg/dm3 Compliant with Integrated Permit Lead 0.0035 mg/dm3 Compliant with Integrated Permit Chromium 0.0010 mg/dm3 Compliant with Integrated Permit Copper 0.0180 mg/dm3 Compliant with Integrated Permit Arsenic 0.00 mg/dm3 Compliant with Integrated Permit [Other] Per each major Air emissions Mg/year point source

SO2 1,029.06 Mg/year Compliant with Integrated Permit

Nitrogen oxides (NOX) 2,155.89 Mg/year Compliant with Integrated Permit Ammonium nitrate 349.44 Mg/year Compliant with dust Integrated Permit Urea dust 26.17 Mg/year Compliant with Integrated Permit Ammonium sulfate 7.60 Mg/year Compliant with dust Integrated Permit Melamine dust 11.73 Mg/year Compliant with Integrated Permit Particulate matter 136.91 Mg/year Compliant with from fuel combustion Integrated Permit

CO2 1,847,877.88 Mg/year Compliant with Integrated Permit Other parameters Noise emissions Night-time Compliant with measurement – 43 dB Integrated Permit Daytime measurement – 49 dB [Other] Solid waste Please provide details of the types and amounts of solid wastes generated by the project. Indicate where wastes are classified as hazardous. Indicate the final re-use, recycle or disposal method for each waste type. 2019 Permitted in Integrated Permit Waste type Generated [Mg] [Mg] Hazardous waste 435.804 Compliant with Integrated Permit Non-hazardous waste 74,390.16 Compliant with Integrated Permit Total 74,825.96 Compliant with Integrated Permit

[Mg]

Self-management of waste − total, 6,667.26 including: - Recovery 30.54 - Storage 6,636.72

Waste transferred to external companies holding appropriate permits for waste 80,238.86 collection/recovery/disposal, including:

- waste generated in this reporting 68,100.97 year Waste stored at year end as a proportion of waste generated during this reporting year, 57.73 including: - Hazardous 28.532 - Non-hazardous 29.20

5. Resource Usage and Product Output Measureme Parameter Amount Comments6 nt Unit Fuels used Crude oil - Natural gas 967,756 Tm3 Jointly as feedstock and fuel Hard coal 672,560 t Lignite - Grid electricity Energy purchased for own needs and for MWh 984,183 resale Heat purchased - from external sources Feedstocks and raw materials used Benzene in 62,430 t processing Polyethylene 2,050 kg Sulfur 38,578 t Product output Ammonium nitrate 1,013,147 t Caprolactam 64,773 t Urea 1,146,976 t Melamine 91,185 t

6. Human Resources management Please provide the name and contact details for Renata Kubiś, Head of HR Administration, your Human Resources manager: Telephone: (+48) 81-565-37-55 Email: [email protected] Recruited in this Terminated in this Total reporting period reporting period Number of direct 3,487 110 111 employees: Number of contracted 31 workers: Were there any collective Yes [ ] If Yes, please describe the redundancy plan, redundancies during the reporting No [X] including reasons for redundancies, number of period? workers involved, how they were selected, consultation undertaken, and measures to mitigate the effects of redundancy: Are any redundancies to the Yes [ ] If Yes, please describe the redundancy plan, workforce planned for the next No [X] including reasons for redundancies, number of year? workers involved, and selection and consultation process: Were there any changes in trade Yes [x] If Yes, please provide details, and summarise union representation at Company No [ ] engagement with trade unions during reporting plants during the reporting period: period? December 28th 2018 – Chairman of the ZZIT Trade Union of Engineers and Technicians terminated his contract of employment due to retirement. Were there any other worker Yes [X] If Yes, please provide details and summarise representatives (e.g. in the No [ ] engagement with them during the reporting period: absence of a trade union)? There is a Works Council at the Company, which operates as a consultation body pursuant to the Act on the Provision of Information to Employees. Were there any changes in the Yes [X] If Yes, please provide details: Certain provisions status of Collective Agreements? No [ ] concerning working time were transferred from the Work Rules to the Company Collective Agreement by way of Supplement No. 31, and changes were introduced by Supplement No. 32 to clarify the rules of implementing the pay scale. Have employees raised any Yes [ ] If Yes, please state how many, split by gender, grievances with the project during No [ x] summarise the issues raised in grievances by male the reporting period? and female staff and explain how the Company has addressed them: Have employees raised any Yes [ ] If Yes, please state how many, split by gender, complaints about harassment or No [X] summarise the issues raised by male and female bullying during the reporting staff and explain how the Company has addressed period? them:

Have there been any strikes or Yes[x] If Yes, please summarise nature of, and reasons for, other collective disputes related No [ ] disputes and explain how they were resolved: to labour and working conditions at the Company in the reporting 1. On September 17th 2018, an agreement was period? signed ending a collective dispute initiated in 2017. The dispute concerned: I. ‘refraining from all steps aimed to separate any business units from the Company’; II. ‘desisting from breaches of mutual agreements, i.e. the Consolidation Agreement and the Social Agreement’; III. ‘removal from the Management Board of Zakłady Azotowe Puławy of Krzysztof Homenda, Vice President of the Management Board, due to his having lost credibility and trust with employees’. 2. On December 12th 2018, a collective dispute was opened; Trade Union demanded ‘payment of Christmas bonuses to employees of … PLN 1,500 per employee’; The Company’s Management Board decided to pay bonuses of PLN 500 per employee; a record of disagreements was signed following mediation; the dispute is pending.

7. Occupational Health and Safety Data Please provide the name and Marcin Kopron – Head of Occupational Health and Safety, Email: contact details for your Health [email protected] and Safety manager: Tel. (+48) 81 565 2053 Direct Contracted Direct Contracted employees workers employees workers Number of man- 5,456 thousand 6,314 thousand Number of 0 0 hours worked in fatalities 7: this reporting period: Budget spent on PLN 11,855,513 Number of 0 0 OHS in this period disabling (total amount and injuries: currency): OHS training Training – blue In 2019, 1,683 Number of Lost 26 0 provided in this collar staff 2,051 employees of Time Incidents period in person- participants/ external (including days: 183 training contractors vehicular): sessions in 2018 working on ZAP Training – premises were managerial staff trained 310 participants / participants/ 10 123 training training sessions sessions in 2019 Training – administration and office staff 89 participants/ 7 training sessions Number of lost 793 0 Number of cases 0 0 workdays of occupational resulting from disease: incidents: Number of sick 36,080 186 days: Accident causes (falling, heavy loads, struck by object, contact with energy source etc.): Injuries in transport, contact with chemical substances and sources of heat, mechanical injuries, loss of balance

Please summarise any emergency prevention and response training that has been provided for Company personnel during the reporting period: In 2019:  328 persons participated in periodic training for chemical rescue teams,  18 persons completed training for candidates for chemical rescue team members,  177 employees of Grupa Azoty Puławy participated in training for operators of equipment isolating the respiratory tract (air systems),  2 persons completed a course of study at the State Fire Service Officer Candidates School in Kraków,  2 persons completed a course of study at the State Fire Service Central School in Warsaw,  3 persons continued their education at the State Fire Service Central School in Warsaw.  Emergency procedures are also discussed during OHS training sessions.

Moreover, as part of OHS training, training on the use of gas masks, first aid, evacuation procedure in case of an alarm signalling a chemical threat, and the rules of safe movement was provided to 2,600 employees. Please summarise any emergency response exercises or drills that have been carried out during the reporting period: In 2019, the following drills were performed:  16 tactical and emergency drills of the Company Fire Brigade at the facilities of Grupa Azoty Puławy,  10 drills on Grupa Azoty Puławy's premises together with fire brigades of the Puławy County Command of the State Fire Service,  750 chemical rescue drills with the participation of departmental chemical rescue teams and firefighters of the Company Fire Brigade,  twice during the year, loud tests of sirens on Grupa Azoty Puławy’s premises, on the last Mondays of March and September.

Moreover, emergency response exercises and drills are carried out pursuant to Order No. 27 of the Governor of the Lublin Province – Head of the Provincial Civil Defence, dated March 26th 2014, amending the Order on Preparation and Ensuring the Operability of the Provincial Detection and Alarm System and the Provincial Early Warning System in the Lublin Province. In order to check the technical condition of the alarm equipment, alarm sirens are tested. In 2019, alarm sirens were sounded in March, June, August, September and December. In the other months, at 12 noon on each Thursday of the month, a silent test of the sirens was performed (as part of the Provincial Early Warning System drill).

8. Stakeholder Engagement Please provide the name and contact details Marek Sieprawski, Head of Corporate for your external relations or community Communication (Press Officer), Email: engagement manager: [email protected] Mobile phone: (+48) 81 565 37 16

Please provide information on the implementation of the Stakeholder Engagement Plan agreed with EBRD and summarise interaction with stakeholders during the reporting period, including:

 meetings or other initiatives to engage with members of the public or public organisations during the reporting period  information on environmental protection, social policy and safety matters provided to the local community and other stakeholders during the reporting period:  coverage in the media:  interaction with any environmental or other community groups.

Please describe any changes to the Stakeholder Engagement Plan agreed with EBRD:

 Meetings or other initiatives to engage with members of the public or public organisations during the reporting period  organisational meetings related to the ‘Tree for a Bottle’ campaign with local partners (the Puławy County Council and Zakład Usług Komunalnych (Municipal Services Company)), visits at schools as part of the campaign, media coverage of school visits and a finale on the Company premises, with the participation of representatives of all organisers, as well as the winning school and pupils;  meetings with representatives of sports clubs operating in the Company’s region as part of the Sports Academy initiative;  partnership with the Puławy Science and Technology Park in connection with educational events for children and youth, including the Young Chemist’s Day and the Lublin Science Festival;  publication and distribution of the 'PULS' newsletter presenting all key areas of the Company’s and the Grupa Azoty Group’s operations;  content-related and financial support for environmental, patriotic and CSR inserts released by local press;  support for the Puławy hospice in the ‘Fields of Hope’ campaign;  performance of the patronage agreement with the Technical School Complex in Puławy, under which Grupa Azoty PUŁAWY undertook to hire at least ten of each year’s school leavers;  continued partnership with the Puławy Branch of the Maria Curie Skłodowska University;  cooperation with the ‘Responsible Care’ Programme Secretariat with respect to initiatives undertaken by member companies;  cooperation with the Honorary Blood Donors Club at Grupa Azoty PUŁAWY with respect to blood donation sessions and registration of potential marrow donors;  engagement with the County Command of the State Fire Service and Voluntary Fire Brigades under the ‘Safety is Our Common Goal’ programme.

 Information on environmental protection, social policy and safety matters provided to the local community and other stakeholders during the reporting period:

 information on the Company’s sponsorship and charitable giving activities;  interviews with a representative of the Company’s Management Board concerning various aspects of the Company’s operations;  summary of the results of the blood donation drive run by the ‘Gift of Life’ Honorary Blood Donors Club at Grupa Azoty PUŁAWY;  summary of the results of the ‘Tree for a Bottle’ environmental education campaign;  information on the purchase of alarm systems for selected Voluntary Fire Brigades;  information on projects carried out as part of the ‘Employee Volunteering Programme’ competition;  ‘There Is Chemistry between Us’ information campaign highlighting the Company’s role as a corporate citizen and its business importance for the local community. 

 Coverage in the media:

  financially stable company, delivering performance better than in 2018;  company engaged in the region’s life;  company looking for novel solutions based on research and development;  company undertaking large-scale projects to ensure its development and further optimal operation;  Grupa Azoty PUŁAWY as socially responsible company.

 Interaction with environmental or other community groups; participation in meetings of the standing team for economy, innovation and entrepreneurship development within the Provincial Social Dialogue Council concerned with the Company’s standing after its consolidation within the Grupa Azoty Group.  Dialogue with the Company’s external stakeholders in accordance with international standard AA1000. A dialogue session was held at the end of February 2018 by independent moderators from the Deloitte team. The dialogue session was held to review the relevance of the Company’s CSR and sustainable development efforts to its stakeholders, as well as their expectations as to the contents of the Company’s Integrated Report. Conclusions from the dialogue session were taken into account in formulating the Grupa Azoty Group’s Sustainable Development Strategy for 2018-2022.

 A questionnaire for employees of Grupa Azoty PUŁAWY concerning their assessment of and expectations as to initiatives undertaken by the Company in the area of corporate social responsibility and sustainable development.

 Release of the Grupa Azoty Group’s Integrated Report for 2016/2017, prepared in accordance with the GRI and IIRC standards, reviewed externally by an independent audit firm.

How many complaints or grievances did the project receive from members of the public or civil society organisations during the reporting period? Please split by stakeholder group. Summarise any issues raised in the complaints or grievances and explain how they were resolved:

No complaints were made with respect to the projects.

9. Community Development Please summarise any social or community development / investment initiatives undertaken by the Company during the reporting period, and any associated expenditure:

'Tree for a Bottle' campaign in 2019 In 2019, as part of the international Responsible Care Programme, the fifteenth ‘Tree for a Bottle’ campaign was held among elementary school children of the Puławy County. The campaign is addressed to elementary school and preschool children, who play in groups trying to collect as many empty plastic bottles as possible. The bottles collected by children are recycled, while trees planted on the premises of the participating educational institutions remain as reminders of the campaign. The best participating groups receive financial and non-financial prizes. The partners of the campaign are: Zakład Usług Komunalnych (Municipal Services Company) of Puławy (responsible for accepting and recycling the collected PET bottles) and the Puławy County Council (supervising the participating educational institutions). In 2019, children from Puławy County schools and kindergartens managed to collect 1,401,216 bottles and plant 571 trees in exchange. 3,029 children and teenagers from 19 schools and 16 kindergartens participated in the campaign. Besides the pupils themselves, their entire families and local communities became involved in the bottle collection. The cost of the project in 2019 was PLN 70,699.12. ‘Grupa Azoty PUŁAWY Sports Academy’ – a social outreach through sports programme established in 2017 for children practising football. The idea behind it is to partner with sports clubs and teams present in the area of our Company’s operations. The teams take part in sports events under the common logo of the Sports Academy and Grupa Azoty PUŁAWY. Sports outfits were given to members of each club that has joined the Academy. The following sports clubs have joined to date: Wisła Puławy, UKS Wisełka 1, Powiślak Końskowola, KS Góra Puławska, KS Hetman Gołąb, KS Drzewce, Orły Kazimierz, Serokomla Janowiec, Wawel Wąwolnica, Garbarnia Kurów, Żyrzyniak Żyrzyn, and Ludowy Klub Sportowy Wilki. In 2019, another U14 tournament was held as part of the Chemist’s Day celebrations. The cost of the project in 2019 was PLN 89.7 thousand.

‘Safety is Our Common Goal’ – a programme run jointly with the County Command of the State Fire Service in Puławy and Management Board of the Puławy County Unit of the Voluntary Fire Brigades Association of Poland. It is intended as a long-term cooperative project to improve the level of protection of human lives, health and property against fires and natural disasters. Every year, programme objectives are jointly selected. The objective selected for 2019/2020 was to equip Voluntary Fire Brigades of the Puławy County with integrated alarm and civil protection systems. The cost of the project in 2019 was PLN 203 thousand.

‘Employee Volunteering Programme’ – a grant competition for the Company’s employees. The judging panel select 10 winning projects, which receive grants of up to PLN 5,000. The main criterion in evaluating submitted projects is the contribution of employees’ own work. Winning volunteer teams (consisting of at least three employees) have five months to implement their projects. In 2019, the third edition of the ‘Employee Volunteering Programme’ was carried out. It involved more than 80 volunteers who carried out 10 projects in such areas as social, environmental, educational, health and life protection matters. Projects implemented during the third edition of the ‘Employee Volunteering Programme’: 1. Revitalisation of the Kurówka river

In the most recent edition of the competition, Grupa Azoty PUŁAWY’s community of anglers embarked on revitalising the Kurówka river, flowing in the immediate vicinity of the Company’s plant. Volunteers cleaned the river and improved natural spawning sites to restore the population of fish and other aquatic organisms. Beneficiary: Polish Angling Association, Lublin Region

2. Refurbishment of the speech therapy and psychological support room at Municipal Kindergarten No. 7 in Puławy

Grupa Azoty PUŁAWY volunteers thoroughly refurbished a former doctor’s consulting room, converting it in a friendly and safe therapeutic room. As part of the refurbishment work, screed was applied to the floor, the old doors and door frames were replaced, the room was painted, covered in wallpaper, and equipped with new furniture and with therapeutic aids. Beneficiary: Municipal Kindergarten No. 7 in Puławy

3. ‘It is Great to Help’

An extension of the activities of the ‘Steps by Step’ Foundation, the project has improved the conditions of therapeutic work among children and young people. Volunteers made the necessary alterations, provided the speech therapy room with new furniture and prepared aids for those undergoing therapy. Beneficiary: ‘Step by Step’ Development Support Foundation of Puławy

4. Refurbishment of the Voluntary Fire Brigade’s garage in Rogów

After work, employees of the Ammonium Nitrate and UAN Department are volunteer firefighters in Rogów. In the first edition of the ‘Employee Volunteering Programme’, they laid a new roof on the Volunteer Fire Brigade’s garage. In 2019, it was time to refurbish the premises to adapt them to the needs of a modern fire protection unit. Beneficiary: Volunteer Fire Brigade in Rogów

5. Renovation of a memorial in Parchatka

Residents of the village of Parchatka could see their environment change over a couple of months, as two teams of volunteers implemented their projects in that locality. One volunteer team restored the monument commemorating Parchatka residents murdered by German occupants in 1942 (Memorial of the Bloody Wednesday Victims). Beneficiary: Association for the Development of the Village of Parchatka

6. Beach volleyball court in Parchatka

Thanks to Grupa Azoty PUŁAWY volunteers, residents of Parchatka can spend their leisure actively playing beach volleyball. The volleyball court construction was a greenfield project: the volunteers cleared and levelled the site, dug a hole and filled it with crushed stone, put up posts and nets, fitted the posts with guards and set the court line. To mark the completion of the work, a match was played with local residents. Beneficiary: Village of Parchatka

7. Little Actors with Big Hearts

Little Actors with Big Hearts are preschool children from Kindergarten No. 18 in Puławy. Working with the children, volunteers prepared the stage design, sewed curtains and costumes. A mobile theatre was created to enable the little actors to give charitable off-site performances. Beneficiary: Municipal Kindergarten No. 18 in Puławy

8. ‘Angry Young Athletes’

For the first time, Grupy Azoty PUŁAWY volunteers established cooperation with the Youth Fostering Centre of Puławy. They organised the Barbell Bench Press Championship for charges of the Youth Fostering Centres all over Poland. The ‘Angry Young Athletes’ is an ambitious and responsible project aimed at developing personality, overcoming weaknesses, relaxing tension and building self-esteem in contestants. Beneficiary: Youth Fostering Centre of Puławy

9. PL(j)ogging, or clean running routes

Among Grupa Azoty PUŁAWY volunteers, there are also running, jogging or walking amateurs, who invited the residents of Puławy to join them in sports and pro-environmental activities. From spring to autumn in Puławy, it was hardly possible not to spot volunteers in yellow T- shirts running and walking around the surrounding forests, filling enormous bags with garbage. Beneficiary: BezMiar Foundation of Puławy

10. Resting place on ‘Rosy Tourist Route’

Amateurs of walking and cycling excursions along the ‘Rosy Tourist Route’ can take a rest at a resting place in the Stocki Forest within the Kazimierz Landscape Park, constructed by Grupa Azoty Puławy volunteers. It consists of a wooden shelter, fire pit and bicycle rack. Beneficiary: Końskowola Municipality

ENVIRONMENTAL AND SOCIAL ACTION PLAN

Table 0.1 Wisła Project, Grupa Azoty Poland – Environmental, Social, Health and Safety (ESHS) matters, Updated (Alchemist Project) Action Plan:

GRUPA AZOTY ZAKŁADY AZOTOWE PUŁAWY S.A. No Action Environmental risks, Legislative Requirement/Resources Scheduled Target and Comments liabilities/benefits requirements/Be completion – action evaluation st practice to be completed by criteria for end of year implementation progress 3. Actions required to achieve compliance with national EHS legal requirements and EU environmental standards – ZA Puławy 3.1 Continue the upgrade of Reduce environmental Legislative Investment needs 2020 Ensure that the In December 2015, the energy generation units impact as required by BAT requirements, project is updated second stage of

to ensure future conclusions for LCPs. best management in the annual construction of deNOx compliance with the BAT practices, Bank's report, selected units on steam

conclusions. PRs technology and generators 4 and 5 was

As part of the BAT emission targets. completed. The Having completed stage assessment and energy selective non-catalytic 1 of the upgrade, ZA management systems, reduction (SNCR) Puławy achieved 3 further potential for Publish NTS of the method allowed the 200mg/m for SO2 and reducing carbon dioxide project and Company to reduce 20 mg/m3 for PM. emissions is assessed. provide copy/web NOx emissions from

Plans for stage 2 of the link to the Bank as steam generators 4

upgrade of energy part of the annual and 5 to 200 mg/m3. generation units to report. Three steam Stage 2 of the ensure compliance with generators are subject upgrade of energy the BAT conclusions for to derogations. In Q4 generation units LCPs include upgrades of 2016, a decision was the Flue Gas 2021 made to construct a Desulfurisation (FGD) catalytic deNOx system Unit and of steam for steam generator 2. generator 2. ‘Upgrade of OP-215 steam generator 2 to

60 No Action Environmental risks, Legislative Requirement/Resources Scheduled Target and Comments liabilities/benefits requirements/Be completion – action evaluation st practice to be completed by criteria for end of year implementation progress reduce CO emissions’ project  Progress of work on steam generator 2

 - basic engineering design approved;

 - design documentation prepared;

 - disassembly of steam generator 2 commenced;

 - delivery and assembly of key equipment (including SCR) contracted.

In 2019, work was continued to upgrade steam generator 2 and the FGD Unit.

3.2 Upgrade the WWTP/ Reduce environmental Legislative Investment needs 2015-21, as required Obtain a permit to In November 2017, a

61 No Action Environmental risks, Legislative Requirement/Resources Scheduled Target and Comments liabilities/benefits requirements/Be completion – action evaluation st practice to be completed by criteria for end of year implementation progress construct a new WWTP impact as required by IED; requirements, by relevant operate the new study was prepared best management authorities facility Ensure covering the practices, Bank's progress update in management and PRs the annual report. discharge of all wastewater streams generated on the Company premises. The concept will serve as the basis for selecting a contractor to design and construct the Central Biological Wastewater Treatment Plant. In 2018, a contractor was selected to perform specific tasks for the ‘Design and construction of the Central Biological Wastewater Treatment Plant’ project and an invitation to tender was issued to select a contractor for the ‘Design and construction of the Central Biological Wastewater Treatment Plant‘ project. In 2019, work was

62 No Action Environmental risks, Legislative Requirement/Resources Scheduled Target and Comments liabilities/benefits requirements/Be completion – action evaluation st practice to be completed by criteria for end of year implementation progress continued to select a contractor for the design and construction of a central biological industrial wastewater treatment plant. As part of the work, laboratory and pilot tests were launched on discharged wastewater streams to select an appropriate treatment technology. Once completed, the project will enable the Company to meet the requirements defined in the BAT conclusions for common wastewater treatment systems.

3.3 Prepare a plan (including Reduce environmental Legislative Internal and external Ongoing Report on soil and In 2017, an addendum budget) and conduct soil impact as required by IED. requirements, groundwater to the baseline report and groundwater This will enable assessment best management status was drawn up. The surveys. of baseline conditions and practices, Bank's study involved a identification of potential PRs comparison of

receptors (both human and historical soil ecological). contamination data gathered through

63 No Action Environmental risks, Legislative Requirement/Resources Scheduled Target and Comments liabilities/benefits requirements/Be completion – action evaluation st practice to be completed by criteria for end of year implementation progress 2013-2014 surveys against currently applicable limits set down in the 2016 regulations. No soil contamination was identified on the Company premises. In our opinion, the existing methodology should be used to confirm the absence of historical liabilities.

3.4 Review nitrate pollution This will enable appropriate Best practice Own resources Ongoing Provide report A decrease of nitrate data covering wooded assessment of potential (Report on the concentration in areas near the plant. environmental issues historical impact of groundwater was Summarise it in a report related to historical off-site emissions, recorded.Report on that assesses historical, nitrate pollution. remedial actions the historical impact of present and future and current emissions, remedial impacts and determines monitoring was actions and current whether the existing submitted in monitoring was monitoring February 2016) submitted in February arrangements are 2016. adequate. Ongoing monitoring is required.

64 No Action Environmental risks, Legislative Requirement/Resources Scheduled Target and Comments liabilities/benefits requirements/Be completion – action evaluation st practice to be completed by criteria for end of year implementation progress

65 CERTIFIED TRANSLATION FROM POLISH

Annual Environmental & Social Report

1. Information about the Company Company Name: Grupa Azoty Zakłady Chemiczne Police S.A. Company Address: ul. Kuźnicka 1, 72-010 Police Country: Poland, Szczecin Province Town/Location: Police Company authorised representative: I certify that the data contained in this report completely and accurately represents the Company’s operations during the reporting period. Signature: Jarosław Konopacki Title: Head of Plant Safety Department Date: April 8th 2020 Contact Details: Telephone: (+48) 91 317 13 68; Mobile: (+ 48) 887 744 415 Email: [email protected]

Please provide key data on the Company performance, as well as production levels at each plant. For each of the 7 large plants please provide: Key performance indicators in terms of energy consumption, emissions, use of natural resources, and carbon dioxide emissions;

Item Cumulative 2018 2019 [PLN ‘000] performance performance *Revenue 2,411,461 2,419,091 Profit/(loss) on sales 31,437 68,138 EBIT 26,710 68,652 EBITDA 139,788 194,253 Net profit/(loss) 29,532 60,487

Number of staff employed and any change in employment over past 3 years

As at Dec 31 2017 As at Dec 31 2018 As at Dec 31 2019 Number of direct employees: 2,519 2,553 2,560 Number of contracted workers: 0 0 0

Provide information on permits and each subsidiary’s compliance status with IPPC/IED (Integrated Pollution Prevention and Control Directive/Industrial Emissions Directive)

Grupa Azoty Zakłady Chemiczne Police S.A. monitors changes in environmental protection regulations on an ongoing basis and takes measures to ensure continuous compliance. The Company takes part in public consultations announced by competent public administration authorities, voicing its comments on draft legislation. In accordance with the integrated permit, the Company fulfils the obligation to assess the risk of soil, land and groundwater contamination with substances used in technological processes. The assessment takes into account technical and organisational actions, as well as measures taken to prevent soil, land and groundwater contamination.

INTEGRATED PERMIT

Grupa Azoty Zakłady Chemiczne Police S.A.’s production and auxiliary units are operated based on the integrated (IPPC) permit issued by way of a decision of the Marshal of the Szczecin Province dated January 9th 2014. The permit was issued for an indefinite period. The validity of the integrated permit is monitored on an ongoing basis, as a result of which three decisions amending the integrated permit were issued on the following days:

 WOŚ.II.7222.1.31.2018.MG on February 8th 2019  WOŚ.II.7222.1.3.2019.MG on June 18th 2019  WOŚ.II.7222.1.10.2019.MG on November 26th 2019. The purpose of the first amendment:  was to agree on an additional method for managing waste code No. 06 11 83 (iron sulfate (II) waste), which would consist in mixing the sulfate waste extracted from the sulfate landfill with crude sulfate (a by-product) and subsequently centrifuging the mixture to reduce the excessive moisture content and market the product;

 address the need to submit a fire protection plan containing fire protection solutions for the Company’s process units, facilities and waste storage sites;  remove, at the Company’s request, the option to store certain types of waste within a separate phosphogypsum cell of the Miscellaneous Waste Landfill site.

The second amending decision was related to adapting the EC II CHP plant to the best available techniques (BAT) conclusions for large combustion plants and granting a temporary derogation from the average annual emission limits for SO2, NOx and particulates, as determined in the BAT conclusions until December 31st 2027. The decision defined the scope and method of monitoring air pollutant emissions from production processes, compliant with the monitoring requirements set out in the BAT conclusions.

The Company was required to continuously measure the emissions of NH3, NOx, CO, SO2 and particulate matter and to periodically measure the emissions of gaseous chlorides, expressed as HCl and HF (once every three months), as well as metals and metalloids other than mercury (As, Cd, Co, Cr, Cu, Mn, Ni, Pb, Sb, Se, Tl, V, Zn) (once a year).

The most recent amendment to the 2019 integrated permit reflected:  changes in the ammonia and urea production capacities;  changes resulting from amendments to the Waste Act and introduction of new provisions to the permit, specifying the maximum weight of each type of waste and maximum aggregate weight of all types of waste that may be stored simultaneously and that may be stored over a year; the maximum weight of waste that could be stored simultaneously, total capacity (expressed in Mg) of the waste storage sites;  agreement reached on the form and amount of security for claims – a security deposit of no less that PLN 152,068.00. 2018 saw the introduction of changes to waste management laws relevant to the company, which required it to file new applications for the grant of a by-product status to iron sulfate, hydrolytic acid, ash, slag and phosphogypsum. The term of the tacit consent by the Marshal’s Office recognising the reported waste (iron sulfate, hydrolytic acid, ash and slag) as by-products expired on February 28th 2019. On February 28th 2019, the Company received three decisions issued by the Marshal of the Szczecin

67 Province, recognising the following wastes as by-products:  hydrolytic acid – decision by the Marshal of the Szczecin Province No. WOŚ-I.7245.1.37- 4.2018. AK;

 slag, bottom ash, boiler dust and coal fly ash – decision by the Marshal of the Szczecin Province No. WOŚ-I.7245.1.40-6.2018. AK;  iron sulfate – decision by the Marshal of the Szczecin Province No. WOŚ-I.7245.1.39-4.2018. AK.

Reporting period: 2019 2. General Is the project materially compliant Yes [X] If No, please provide details of any material with all relevant EBRD Performance No [ ] non-compliances: Requirements (taking account of agreed action plans, exemptions or derogations)? Is the project materially compliant Yes [X] If No, please provide details of any material with all applicable environmental No [ ] non-compliances: and social laws and regulations? Have there been any accidents or Yes [ ] If Yes, please describe, including details of incidents that have caused damage No [X] actions to remedy and prevent reoccurrence: to the environment, brought about (no severe injuries or fatalities, affected project accidents) labour or local communities, affected cultural property, or created liabilities for the company? Have there been any changes to Yes [X] If Yes, please describe: environment, social, labour or health No [ ] On September 16th 2019, a Regulation and safety laws or regulations that of the Environment Minister was announced have materially affected the Company? concerning video surveillance systems for waste storage or landfill sites. The Company was an active participant of consultations on the draft regulation and amendments to the Waste Act. Its proposal to exempt phosphogypsum, ash and slag from the monitoring requirement was granted. The obligation to comply with the Waste Act in respect of the iron sulfate II landfill site was maintained in its entirety. The cost of a video surveillance system compliant with the Environment Minister’s Regulation is expected to reach approximately PLN 8–10m.

68 How many inspections did you Number: Please provide details of these visits, receive from the environmental including number and nature of any violations authorities during the reporting Provincial found: period? Inspectorate for Provincial Inspectorate for Environmental Environmental Protection (WIOŚ) Protection The first inspection was carried out by the (WIOŚ) – 2 WIOŚ of Szczecin on January 21st 2019 to February 22nd 2019. Its main purpose was to express an opinion in the procedure to grant the by-product status to four types of waste, conducted by the Marshal of the Szczecin Province. The other inspection concerned process safety and was carried out by two institutions: the Provincial Inspectorate for Environmental Protection (WIOŚ) and the State Fire Service. The inspection was conducted between May 29th 2019 and June 26th 2019 and covered the hydrofluoric acid storage site and the process units using hydrofluoric acid. In its course, a joint visual inspection was carried out of the storage site for hydrofluoric acid and routes of its delivery to the black part of the titanium white production plant and its feeding into the process plant.

No violations were found in either inspection.

How many inspections did you Number: Please provide details of these visits, receive from the health and safety including number and nature of any violations authorities during the reporting found: period? State Fire Service – 1 Following an inspection held to check compliance with fire safety regulations and National safety requirements in an upper-tier Sanitary establishment (June 10th−14th 2019), an Inspectorate administrative decision of the County (PIS) – 0 Command of the State Fire Service was issued, ordering the following actions to be taken:

1. Update the Fire and Technical Safety Manual for facilities 403A, B, C, D, E1, F, M, 409, 409B (Pigments BU).

2. Ensure the gravity ventilation unit at facility 403D is fully operational. The decision was complied with on time. Other violations were remedied during the inspection or the related administrative proceedings.

69 How many inspections did you Number: Please provide details of these visits, receive from the labour authorities including number and nature of any violations during the reporting period? National Labour found: Inspectorate (PIP) – 1 Order No. 140242-53-K014-Nk01/19 of April 23rd 2019 8 injunctive orders – fully implemented

Improvement notice No. 140242-53-K014- Ws01/19 of April 23rd 2019 2 prescriptions – implemented Have these visits resulted in any Yes [x] If Yes, please describe, including status of penalties, fines and/or corrective No [ ] implementing corrective actions to address action plans? any violations found:

On July 29th 2019, the Company received Decision by the Provincial Inspectorate for Environmental Protection No. 31/2019 imposing a fine of PLN 46,215.0 for failure to meet the standards for particulate matter emissions from spray dryer units of the titanium dioxide production plant in the period from March to June 2016. By a letter to the Provincial Inspectorate for Environmental Protection dated August 13th 2009, the Company requested that the fine payment be deferred and that the costs incurred to implement projects designed to remove the reasons for imposing it be fully offset against the fine amount. In response to the request, the Provincial Inspectorate for Environmental Protection of Szczecin, by a letter of September 10th 2019, notified the Company of the expected date of closing the case (December 30th 2019). In a letter of December 17th 2019, the Szczecin Provincial Inspectorate for Environmental Protection specified March 27th 2020 as the new expected date of resolving the case, citing the need to carry out relevant inspections and measurements and to analyse the material collected in the case.

70 Has the Company engaged any Yes[x] If Yes, please state for which types of work, contractors for project-related work No [ ] and how the Company has monitored the in the reporting period? compliance of contractors with EBRD Performance Requirements and the Environmental and Social Action Plan: Contractors were engaged, inter alia, for:  Taking samples and measuring concentrations of soluble forms of heavy metals: zinc, lead, nickel, chromium and antimony in water from the piezometers of the monitoring network of the iron sulfate landfill site. The contractor holds accreditation No. AB 283 from the Polish Centre for Accreditation.  Taking geodetic measurements of the landfill sites. The contractor holds the relevant professional licences and certifications required to carry out the work. Yes [ ] If Yes, please provide details, including how Were any of the violations stated No [X] the Company is ensuring that corrective above the responsibility of actions are implemented by the contractor? contractors?

Have any operations been reduced, Yes [ ] If Yes, please describe: temporarily suspended or closed No [X] down due to environmental, health, safety or labour reasons?

71 Please describe any environment or social programmes, initiatives or sub-projects undertaken during the reporting period to improve the Company's environmental or social performance and/or management systems:

1. Health and safety at work improvement measures have been set out in the ‘Working conditions improvement plan 2019’, and included, among other things, refurbishment of offices and staff amenities, purchase of additional office equipment, and improvement of the technical condition of, and provision of access routes to, machinery and equipment. 43 projects worth a total of PLN 4,615.6 thousand were completed. The plan resulted in improved working conditions for 769 employees. 2. In recognition of its dedication to ensuring safety, the Company has received awards, including: Gold Card of Safe Work Leader (Złota Karta Lidera Bezpiecznej Pracy) 3. In 2019, the Company continued to operate programmes aimed at improving safety at work, including: • Regular safety briefings with rank-and-file staff, based on ‘5 minutes for safety’ instruction materials developed by the OHS and Accident Prevention Office, • ‘Protect Your Eyes’ campaign, • Quarterly safety meetings held to engage management in OHS matters. 4. Under the BSC programme, the Company also monitors and updates its occupational and environmental safety indicators. The investment projects carried out in 2019 included:  Replacement of the 311Y fertilizer drying facility at the PN-2 fertilizer plant (2019 project expenditure: PLN 75 thousand; total project expenditure: PLN 1,090 thousand).  Alteration of the phosphate rock storage facility (fc. 200) (2019 project expenditure: PLN 1,265 thousand; total project expenditure: PLN 6,042 thousand).  Manufacture and replacement of the 17/18E601A and 17/18E601B heat exchangers (2019 project expenditure: PLN 1,777 thousand; total project expenditure: PLN 14,582 thousand) – when the ammonia synthesis unit is started up, the heat exchangers are used to pre-heat the ammonia synthesis reactor before the start-up heater is switched on. Project completed in 2019.

 Upgrade of the post-calcination gas distribution system (2019 project expenditure: PLN 35 thousand; total project expenditure: PLN 1,576 thousand) – the purpose of the project is to build a post-calcination gas recirculation system. It will return hot post-calcination gases to the calcining furnace as secondary air, which will reduce the amount of fuel consumed by the calcining furnace burner, as well as the amount of post-calcination gases leaving the calcination unit.

 Upgrade of rotary air heaters on Op230 boilers 1 and 2 (2019 expenditure: PLN 3,247 thousand; total expenditure: PLN 6,456 thousand). Project completed in 2019.

 Renovation of flooring and installation of a sewerage system on level 0 in fc. 517 (2019 expenditure: PLN 3,646 thousand; total expenditure: PLN 3,793 thousand).

 Making production of demineralised water independent of variable salinity of the Oder River and increasing the capacity to produce special waters in water preparation units (2019 expenditure: PLN 1,049 thousand). The project commenced in 2019 and is planned for completion in 2022.

 Renovation of M-BAG warehouse facilities, roads and yards (2019 expenditure: PLN 2,287 thousand). The project commenced in 2019 and is planned for completion in 2021.

In 2019, the total amount of capital expenditure on the above investment projects was PLN 13,381 thousand72 .

In 2019, the total amount of capital expenditure on the above investment projects was PLN 13,381 thousand.

A copy of the Environmental and Social Action Plan is attached as Appendix 1 to this Report.

4. Environmental Monitoring Data for each of the key subsidiaries The information required in this section can be extracted from a CSR report, or a full CSR report can be attached.

Please provide the name and contact details for Magdalena Rabe your environmental manager: [email protected] Parameter2 Amount3 Unit Compliance Status4 Comments5 Wastewater Treated industrial compliant with the integrated 31,700,786.00 m3/year wastewater permit Treated municipal compliant with the integrated 1,390,361.00 m3/year wastewater permit compliant with the integrated Total wastewater 33,091,147.00 m3/year permit Spent cooling water compliant with the integrated 90,088,863.00 m3/year and stormwater permit

Biochemical Oxygen 105.61 Mg/year compliant Demand (BOD5)

Chemical Oxygen compliant with the integrated 255.84 Mg/year Demand (COD) permit compliant with the integrated Suspended solids 233.47 Mg/year permit

compliant with the integrated Ammoniacal 104.47 Mg/year permit nitrogen compliant with the integrated Total phosphorus 5.63 Mg/year permit compliant with the integrated Total iron 9.94 Mg/year permit compliant with the integrated Fluorides 533.13 Mg/year permit compliant with the integrated Titanium 0.03 Mg/year permit Air Per each major Mg emissions point source compliant with the integrated SO ammonia production 2.24 2 permit

73 titanium white compliant with the integrated 81.65 production permit mineral fertilizers compliant with the integrated 1.32 production permit sulfuric acid compliant with the integrated 1,771.72 production permit fuel combustion *356.42 compliant with the integrated (capacity above 50 **480.59 permit MW) compliant with the integrated ammonia production 86.24 permit titanium white compliant with the integrated 8.53 production permit mineral fertilizers compliant with the integrated Nitrogen oxides 13.35 production permit (NO ) X sulfuric acid compliant with the integrated 79.60 production permit fuel combustion *409.56 Not compliant with the integrated (capacity above 50 **474.02 permit MW) titanium white compliant with the integrated 27.59 production permit phosphoric acid compliant with the integrated 29.40 production permit mineral fertilizers compliant with the integrated 140.55 Particulate production permit compliant with the integrated urea production 56.84 permit fuel combustion *28.11 compliant with the integrated (capacity above 50 **28.87 permit MW) ammonia production 322,075.998 unit urea production unit 10,638.486 titanium white 27,283.237 production unit mineral fertilizers 38,718.891 production unit

CO2 sulfuric acid 1,418.661 production unit

dried iron sulfate 2,252.960 production unit EC I 0.00 (CHP Plant I) EC II 593,415.106 (CHP Plant II) Other parameters Noise emissions According to 2019 meter readings, noise emissions are within permitted levels and comply with the integrated permit. Frequency of measurements (once every two years). [Other] Solid waste Please provide details of the types and amounts of solid wastes generated by the project. Indicate where wastes are classified as hazardous. Indicate the final re-use, recycle or disposal method for each waste type. * emission loads determined based on continuous pollutant emissions monitoring. ** emission loads determined in relation to TNP. Information on waste generated in 2019 Solid waste generated by Grupa Azoty POLICE Ite Weight of waste Waste code Waste type m generated [Mg]

74 Solid salts and solutions other than those mentioned 1. 06 03 14 in 06 03 11 30.830 and 06 03 13 Sludges from onsite effluent treatment other than 2. 06 05 03 409,360.000 those mentioned in 06 05 02 Phosphogypsum mixed with slag, bottom ash and 3. 06 09 81 boiler dust (excluding boiler dust mentioned in 10 01 2,065,387.401 04) 4. 06 11 83 Waste iron sulfate 100,462.820 5. 07 02 99 Wastes not otherwise specified 19.000 6. 15 01 01 Paper and cardboard packaging 12.770 7. 15 01 02 Plastic packaging 232.883 8. 15 01 03 Wooden packaging 488.141 9. 15 01 07 Glass packaging 0.075 Packaging containing residues of or contaminated by 10. 15 01 10* dangerous substances (i.e. Toxicity Class I: very toxic 8.112 and Class II: toxic crop protection chemicals) Discarded equipment containing hazardous 11. 16 02 13* components(5) other than those mentioned in 16 02 09 0.530 to 16 02 12 Discarded equipment other than that mentioned in 16 12. 16 02 14 02 09 3.115 to 16 02 13 Components removed from discarded equipment 13. 16 02 16 16.101 other than those mentioned in 16 02 15 14. 16 06 01* Lead batteries 0.500 15. 16 06 04 Alkaline batteries (except 16 06 03) 0.010 Concrete waste and rubble from demolition and 16. 17 01 01 70.440 repair Mixture of concrete, bricks, tiles and ceramics other 17. 17 01 07 6.280 than those mentioned in 17 01 06 18. 17 04 02 Aluminium 19.920 19. 17 04 03 Lead 0.910 20. 17 04 05 Iron and steel 1,215.631 21. 17 04 11 Cables other than those mentioned in 17 04 10 1.023 Soil and stones other than those mentioned 22. 17 05 04 25.760 in 17 05 03 23. 19 09 02 Sludges from water clarification 2,565.000

Solid waste (generated) managed as part of recovery process at Grupa Azoty POLICE Recovery Ite /disposal Waste code Waste type Weight [Mg] m operatio n Solid salts and solutions other than those mentioned 1. 06 03 14 in 06 03 11 30.830 R5 and 06 03 13 Sludges from onsite effluent treatment other than 2. 06 05 03 409,360.0 R5 those mentioned in 06 05 02 3. 06 11 83 Waste iron sulfate 894.540 R5 Mixture of concrete, bricks, tiles and ceramics other 4. 17 01 07 6.280 R5 than those mentioned in 17 01 06 Soil and stones other than those mentioned 5. 17 05 04 25.760 R5 in 17 05 03 6. 19 09 02 Sludges from water clarification 2,565.000 R5 Solid waste (generated) managed as part of disposal process at Grupa Azoty POLICE

75 Recovery No /disposal Waste code Waste type Weight [Mg] . operatio n Phosphogypsum mixed with slag, bottom ash and 1. 06 09 81 boiler dust (excluding boiler dust mentioned in 10 01 2,065,387.401 D5 04) 2. 06 11 83 Waste iron sulfate - 26,531.209 D5 Concrete waste and rubble from demolition and 3. 17 01 01 70.440 D5 repair Solid waste (generated) transferred to external operators for recovery (R) or disposal (D) Recovery No /disposal Waste code Waste type Weight [Mg] . operatio n 1. 06 11 83 Waste iron sulfate 101,931.720 R 2. 07 02 99 Wastes not otherwise specified 19.000 R 3. 15 01 01 Paper and cardboard packaging 12.770 R 4. 15 01 02 Plastic packaging 232.883 R 409.245 R 5. 15 01 03 Wooden packaging Handed over 80.300 to natural persons Packaging containing residues of or contaminated by 6. 15 01 10* dangerous substances (i.e. Toxicity Class I: very toxic 8.112 R and Class II: toxic crop protection chemicals) Discarded equipment containing hazardous 7. 16 02 13* components(5) other than those mentioned in 16 02 09 0.530 D to 16 02 12 Discarded equipment other than that mentioned in 16 8. 16 02 14 02 09 3.060 R to 16 02 13 9. 16 06 01* Lead batteries 0.500 R 10. 16 06 04 Alkaline batteries (except 16 06 03) 0.065 R 11. 17 04 02 Aluminium 20.120 R 12. 17 04 03 Lead 0.910 R 13. 17 04 05 Iron and steel 1,340.017 R 14. 17 04 11 Cables other than those mentioned in 17 04 10 1.063 R Solid waste collected from external operators for management as part of recovery or disposal processes at Grupa Azoty POLICE Recovery No /disposal Waste code Waste type Weight [Mg] . operatio n Bottom ash, slag and boiler dust (excluding boiler dust 1. 10 01 01 891.000 R5 mentioned in 10 01 04) 2. 12 01 01 Ferrous metal filings and turnings 2,955.560 R4 3. 12 01 99 Wastes not otherwise specified 601.800 R4 Concrete waste and rubble from demolition and 28,046.420 R5 4. 17 01 01 repair 62.400 D5 Mixture of concrete, bricks, tiles and ceramics other 36.58 R5 5. 17 01 07 than those mentioned in 17 01 06 266.760 D5 6. 17 02 02 Glass 1.560 D5 7. 17 04 05 Iron and steel 102.220 R4 Insulation materials other than those mentioned in 17 8. 17 06 04 93.100 D5 06 01 and 17 06 03 * -hazardous waste

76 5. Resource Usage and Product Output Measurement Parameter Amount Comments Unit Fuels used Crude oil not applicable - Natural gas 3,423,694.2 MWh Hard coal 267,789.85 Mg Lignite not applicable - Grid electricity 285,307.03 MWh Heat purchased from external 393,513.60 GJ sources Used feedstocks and raw materials Phosphate rock 930,104.46 Mg Sulfur 223,806.55 Mg Sulfuric acid from 307,487.58 Mg external sources Ilmenite 74,516.31 Mg Slag 9,377.91 Mg Potassium chloride 384,223.39 Mg Potassium sulfate 1,676.09 Mg Ammonium sulfate from external Mg sources 40,519.72 Magnesite 27,437.66 Mg Product output NPK fertilizers 888,901.10 Mg Contains 964 tonnes of PK 10-25 fertilizer NP fertilizers 156,082.06 Mg NS fertilizers 18,519.64 Mg Sulfuric acid 678,950.00 Mg Phosphoric acid 356,750.12 Mg Ammonia 297,944.40 Mg Urea 289,877.00 Mg NoxyTM(AdBlue) 158,860.00 Mg Titanium white 33,336.61 Mg

6. Human Resources management Please provide the name and contact details for Agata Sobocińska your Human Resources manager: [email protected] Recruited in this Terminated in this Total reporting period reporting period Number of direct employees: 2,560 155 148 Number of contracted workers: 0 0 0 Were there any collective Yes [ ] If Yes, please describe the redundancy plan, redundancies during the reporting No [X] including reasons for redundancies, number of period? workers involved, how they were selected, consultation undertaken, and measures to mitigate the effects of redundancy: Are any redundancies to the Yes [ ] If Yes, please describe the redundancy plan, workforce planned for the next No [X] including reasons for redundancies, number of year? workers involved, and selection and consultation process:

77 Were there any changes in trade Yes [ ] If Yes, please provide details, and summarise union representation at Company No [X] engagement with trade unions during reporting plants during the reporting period: period? Were there any other worker Yes [ ] If Yes, please provide details and summarise representatives (e.g. in the No [X] engagement with them during the reporting period: absence of a trade union)? Were there any changes in the Yes [ ] If Yes, please provide details: status of Collective Agreements? No [X] Have employees raised any Yes [ ] If Yes, please state how many, split by gender, grievances with the project during No [X] summarise the issues raised in grievances by male the reporting period? and female staff and explain how the Company has addressed them:

 Flexible working / work-life

balance  Grievance mechanism for workers  Health & safety

7. Occupational Health and Safety Data Please provide the name and Barbara Hryniewicka contact details for your Health [email protected] and Safety manager: Direct Contracted Direct Contracted employees workers employees workers Number of man- hours worked in Number of 4,742,123 0 0 0 this reporting fatalities 7: period: Budget spent on Number of OHS in this period PLN 4,615,671 0 disabling 0 0 (total amount and injuries: currency): OHS training Number of Lost provided in this Time Incidents 15,248 0 27 0 period in person- (including days: vehicular): Number of lost Number of cases workdays 757 0 of occupational 0 0 resulting from disease: incidents: Number of sick 48,307 0 days: Accident causes (falling, heavy loads, struck by object, contact with energy source etc.): Tripping, slipping, and other similar incidents during movement: 11 Operation of machines and equipment: 4 Operation of manual tools: 5 Load handling: 1 Thermal burn: 1 Chemical burn: 2 Other: 3 Please provide details of any fatalities or major accidents that have not previously been reported to EBRD, including total compensation paid due to occupational injury or illness (amount and currency): not applicable Please summarise any emergency prevention and response training that has been provided for Company personnel during the reporting period:

The Company provides scheduled OHS and fire prevention training to employees in line with the following approved training programmes:  General induction training – new employees.  Position-specific training  Periodic and supplementary training. The training includes existing risks related to chemicals used, emergency procedures and crisis response.  Training for subcontractors on OHS rules applicable on the Company premises. During training, contractors learn about risks specific to the plant's operations and to locations where they will be providing services, as well as response procedures to follow were such risks to materialise.

79 Please summarise any emergency response exercises or drills that have been carried out during the reporting period:

 26 on-site emergency drills were arranged and carried out, including eight chemical rescue, five technical rescue, four water rescue, four fire rescue and five radiation hazard drills.

 Additionally, participation in anti-terrorist drills at the Water Transport Department  Participation in tabletop exercises organised by the County Command of the State Fire Service in Police: organisation and conduct of rescue and fire fighting operations in the event of a major industrial accident occurring in and outside of an upper-tier establishment.  Participation in exercises organised by Grupa Azoty Koltar.

8. Stakeholder Engagement Please provide the name and contact details Paweł Piwowarczyk for your external relations or community [email protected] engagement manager: Please provide information on the implementation of the Stakeholder Engagement Plan agreed with EBRD and summarise interaction with stakeholders during the reporting period, including:  meetings or other initiatives to engage with members of the public or public organisations during the reporting period  information on environmental protection, social policy and safety matters provided to the local community and other stakeholders during the reporting period:  coverage in the media:  interaction with any environmental or other community groups. Please describe any changes to the Stakeholder Engagement Plan agreed with EBRD: Grupa Azoty Police stays in touch with the local community and keeps it informed about its operations and affairs. The Company communicated with its stakeholders through:  Press articles published in the Kurier Szczeciński daily and Tygodnik Policki weekly. The published materials contain information about important events/investments/projects related to transport, energy, production, as well as promotional activities undertaken by the Company.  Ongoing cooperation with the TV Police channel, which includes production of a TV programme called ‘News from Grupa Azoty Zakłady Chemiczne Police S.A.’, broadcast every two weeks. Programmes about the Company, including current and archival productions, are available at www.tvpolice.pl.  Wieści Polickie (News from Police) and Police i okolice (Police and its surroundings) websites, where video footage and press releases are posted covering important events for the Company.

 Press conferences during which Company representatives communicate the most important information concerning Grupa Azoty Police.  Company radio, which broadcasts the most important information and announcements concerning the Grupa Azoty Group and Grupa Azoty Police.

 Intranet, i.e. the Company’s internal computer network through which its communicates with the employees. Apart from current announcements, a range of other information is also available over the Intranet, including the Company’s Articles of Association, regulations and other by-laws, the book of processes and procedures, etc.  Facebook – the Company uses the tool to communicate with its employees, the local community, as well as other people who follow the Company’s activities, including customers. On Facebook, the Company posts notices and photo galleries of various events.

80 How many complaints or grievances did the project receive from members of the public or civil society organisations during the reporting period? Please split by stakeholder group. Summarise any issues raised in the complaints or grievances and explain how they were resolved:

 In the reporting period, no complaints or grievances related to the project were notified to Grupa Azoty Police.

9. Community Development

81 Please summarise any social or community development / investment initiatives undertaken by the Company during the reporting period, and any associated expenditure:

Another integral element of the Company’s strategy is to support the development of local communities. These efforts are undertaken in line with a CSR and sponsorship plan, which covers promotion and advertising agreements and donations. Partnerships are established with local and regional clubs, associations and foundations. Support is also offered to private individuals. The Company builds its community friendly image by supporting various initiatives, including: • professional and amateur sports, • cultural initiatives, including mass cultural events, • educational institutions for children and youth, • research programmes, • regional environmental initiatives, • social campaigns. Image-building activities with a countrywide and international reach, which boost the perception of the entire Grupa Azoty Group, are carried out by the Group’s corporate department in Tarnów. Cultural initiatives The Company became the Main Partner of Maggie Piu’s painting exhibition. The opening of the exhibition took place at the Mieczysław Karłowicz Philharmonic in Szczecin. The event was enlivened by a performance given by the Philharmonic’s musicians. As part of cooperation with the Szczecin Radio station, the Company became a Partner of two concerts organised as part of the Blackout series and the audiobook “Na przedpolu Jałty. Wspomnienia z tajnej służby w dyplomacji” (“In the forefield of Jalta. Memories from diplomatic secret service”), based on a book by Jerzy Kurcyusz, which was broadcast on the radio. Support of sports The professional sports teams with whom the Company continued cooperation in 2019 included Pogoń Szczecin, a premiership football team, and the Chemik Police female volleyball team, whose players won the Polish Cup in 2019 and played in the CEV European Champions League Women. The Company also continued its cooperation with Marcin Lewandowski, a multiple European indoor champion and the 2019 World Championship bronze medal winner in the 1,500-metre run. Grupa Azoty Police became the Main Partner of the West Pomeranian Fencing Association, which in 2019 organised the Polish Senior Cup in épée fencing, the Northern Poland Cup for children and youth in foil and épée fencing. To meet the local community’s expectations, the Company also supported amateur clubs whose members are local residents. The cooperation covered:  agreement with the Chemik Police Football Club, which plays in the third league. The club also runs the Police Youth Football Academy, where it trains the youngest residents of Police, often children of Grupa Azoty Police employees. In 2019, the Academy joined the elite football academies certified by the Polish Football Association and received the brown certificate;  ‘Champion’ Students’ Sports Club for table tennis players of various ages;  Sport events, including the ‘Wild Weekend’, an extreme running event, the Santa Run, and the Janusz Korczak Run.

Activities promoting national traditions and patriotic attitudes An important component of social and sponsorship activities is the support of initiatives cultivating and fostering Polish traditions and national identity and strengthening national, civic and cultural awareness. Therefore, for another year in a row the Company continued its partnership with the Foundation for Polish Values, which supports compatriots living in the former Eastern Borderlands. Health promotion initiatives The Polish Association of Voluntary Blood Donors – the Henri Dunant Voluntary Blood Donors Club of Police, supported by Grupa Azoty Police, is active in the County of Police, promoting the idea of voluntary blood donation. Several blood donation sessions were carried out on the Company’s premises. In 2019, the Association, operating under the Company’s patronage, celebrated its 45th anniversary.

82 Initiatives for education of children and the youth Once again, the Company awarded scholarships to the most talented students of the Chemical Technology Secondary School at the Ignacy Łukasiewicz School Complex in Police – the class which Grupa Azoty Police has under its auspices. In December 2019, the Company signed a patronage agreement and a deed of understanding with the Electricity and Electronics School Complex of Szczecin. As part of this cooperation, Grupa Azoty Police will award grants for the best students as well as provide internships and organise industry training for teachers. The Company also took patronage of classes for future mechatronics and automation technicians. The Company also sponsored awards in the ‘Passion – Profession – Vocation’ Talents 2019 competition held as part of the European Vocational Skills Week: ‘Discover your Talent!’.

Donation policy Giving donations is part of the adopted social and sponsorship activities plan. The causes for which donations may be given are defined in detail in the Donation Rules. Initiatives in this area are usually connected with the promotion of sports and healthy lifestyle, social welfare, holidays for children and youths, arts and culture, as well as religious cult. The initiatives undertaken by the Company in 2019 include the following: • covering the cost of travel of Brownies, Cub Scouts, Guides and Scouts of the 28th ‘Fire’ Group to summer camps; • support for ‘Łarpia Sail Festival’; • financing the awards in a chemical competition for students of elementary and junior high schools in the Szczecin Province; • support for the Passion of Christ Mystery play; • support for a Company employee, a successful weightlifter; • support for the 10th Procession of the Magi in Szczecin. Donations are granted mainly to applicants from the Province of Szczecin and, in justified cases, also from other regions. Each application is examined on a case-by-case basis. Corporate social responsibility Bearing in mind that the employees are the company’s main pillar, the Management Board once again organised an official meeting for the employees who retired in 2019. The initiative was an excellent opportunity to thank long-standing employees for their commitment and dedication to achieving goals. In December 2019, Grupa Azoty Police signed agreements with the West Pomeranian Business School and the WSB University in Poznań – the Faculty of Economics in Szczecin. The cooperation with the universities allows Company employees to take up studies on favourable financial terms. The Company organised workshops on job interviews, writing CVs and self-presentation before the camera for students of the West Pomeranian University of Technology. The Company positively responded to students’ needs by providing them with selected information which was used in a number of dissertations. More students were given the opportunity to visit the plant. The Company arranged internships and work placements which attracted students from the region. As part of its CSR activities, the Company bought educational materials for three elementary schools. Grupa Azoty Police now has 17 practical vocational training instructors. Experts from various departments of the Company, who will be supervising student internships, have completed teacher training courses. The Company became involved in the organisation of the Children’s Day family event. The event, whose main organiser is the Board of Housing Estate No. 6 in Police, is dedicated to the residents of Police. It is attended by the Company employees and their families. The Company became Partner of the ‘Radio Szczecin on holidays in Rewal’ event. The promotional event was addressed to all those taking holidays at the seaside. In 2019, Grupa Azoty Police took patronage of the 11th Conference ‘Wasteless Technologies and Waste Management in Industry and Agriculture’ organised by the West Pomeranian University of Technology. The Company also supported the ‘Every bird has its own birdhouse’ environmental initiative, organised by the local Environmental Association ‘Łarpia’. Financial support was again granted also to the ‘Ostoja’ Teetotal Association.

In 2019, social development expenditure totalled PLN 16,106,004 (arising under or related to permanent contracts with sports clubs, schools and cultural organisations, and advertising agreements connected with local initiatives, donations). 83

ENVIRONMENTAL AND SOCIAL ACTION PLAN

GRUPA AZOTY ZAKŁADY CHEMICZNE POLICE S.A.

5. Actions required to maintain compliance with EHS requirements of national law and EU environmental standards − GRUPA AZOTY ZAKŁADY CHEMICZNE POLICE S.A.

No. Action Environmental risks, Legislative Requireme Scheduled Target and Comments liabilities/benefits requirements/ nt/Resourc completion – evaluation Best practice es action to be criteria for completed by implementation end of year progress 5.1 Complete the planned Reduce negative environmental impact Legislative Investment 2018 Obtain a relevant Provide update modernisation of energy in line with IED requirements. requirement needs permit for the in the 2017 generation installations to s, best new facilities annual report. ensure compliance with Asses further methods of reducing managemen Annex V to IED. energy intensity and carbon emissions t practices, Update from energy installations as part of the Bank's PRs information on Target emission levels: project and future BAT assessment. the project in the 3 200 mg/m for SO2 annual report, 200 mg/m3 for NOx selected 20 mg/m3 for PM. technology and target emission levels.

Publish NTS of the project and provide copy/web link to the Bank as part of the annual report.

84 In May 2018, a flue gas treatment system built to ensure compliance of the EC II CHP plant with the requirements of the Industrial Emissions Directive was commissioned for regular operation. The flue gas treatment system is now in operation, and the NOx, SO2 and PM concentrations do not exceed the limits set down in the IED. Capex on the flue gas treatment project amounted to PLN 252,005 thousand.

5.2 Monitor environmental Reduce negative environmental impact Legislative Internal Ongoing Summary of the impacts of landfill sites and of landfill sites. Develop long-term requirements, resources action plan in the continue planned technical action to further monitor and reduce best and annual report development. impact of the landfill site as part of management investment BAT assessment in 2015. practices, s Bank's PRs Information: The environmental impact of landfill sites (Section 5.2) was monitored in accordance with: Decision by the Marshal of the Szczecin Province approving the iron sulfate landfill operation manual (Ref. No. WOŚ.II.7241.62.2.2013.BK, dated January 9th 2014), and Decision by the Marshal of the Szczecin Province approving the phosphogypsum landfill operation manual (Ref. No. WOŚ.II.7241.3.1.2019.AM, dated August 14th 2019).

5.3 Complete modernisation of Reduce negative environmental impact Legislative Internal Completed on Summary in the heating oil storage depot – of the HFO (heavy fuel oil) storage requirements, funds August 29th 2014 annual report execution stage areas. HFO storage must be best modernised. management practices, Bank's PRs Information: The following work was completed: installation of oil-tight bunds for F3 and F4 storage tanks (light fuel oil), installation of oil-tight bunds for F5 and F6 storage tanks (heavy fuel oil), construction of stormwater drainage system, installation of I&C system for measuring oil levels in the tanks, as well as testing of tank truck earthing continuity during oil unloading. The project was completed. Expenditure incurred: PLN 1,355,850

5.4 Prepare a plan (including Reduce negative environmental impact Legislative Internal 2015 Report on soil and budget) and conduct soil in line with IED requirements, resources groundwater and groundwater best and condition assessment. management external practices, support Bank's PRs

85 Information:

The Company regularly assesses the risk of soil, ground and groundwater contamination with hazardous substances from the Company's units and installations (in compliance with the integrated permit granted by Decision of the Marshal of the Szczecin Province Ref. No. WOŚ.II.7222.13.9.2013.MG, as amended, dated January 9th 2014). The assessment takes into account actions, procedures and measures taken to prevent contaminants from entering the ground. The ‘Assessment of the risk of soil, ground and groundwater contamination’ is performed in line with Scheme No. SP-O-P06-01, using dedicated software. The related monitoring covers procedures aimed at removing the consequences of incidents and preventive measures taken to minimise the risk of occurrence of similar incidents in the future.

86 CERTIFIED TRANSLATION FROM POLISH

Annual Environmental & Social Report

1. Information about the Company Company Name: Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. Company Address: 47-220 Kędzierzyn-Koźle; ul. Mostowa 30 A; skr. poczt. 163 Country: Poland Town/Location: Kędzierzyn-Koźle Company authorised representative: Sławomir Lipkowski

I certify that the data contained in this report completely and accurately represents the Company’s operations during the reporting period. Signature: Sławomir Lipkowski

Title: President of the Management Board – Chief Executive Officer Date: 8th April 2020 Contact Details: Telephone: (+48) 77 481 26 59 Mobile: (+48) 785 787 777 Email: [email protected]

Please provide key data on the Company performance, as well as production levels at each plant. For each of the 7 large plants please provide:

Item Cumulative 2018 2019 [PLN ‘000] performance performance Revenue 1,963,179 1,834,609

Profit/(loss) on sales 14,526 161,565 EBIT 16,988 161,389 EBITDA 133,738 290,376 Net profit/(loss) 15,594 126,083

Key performance indicators in terms of energy consumption, emissions, use of natural resources, and carbon dioxide emissions;

See Section 4 and Section 5.

Number of staff employed and any change in employment over past 3 years

As at Dec 31 2017 As at Dec 31 2018 As at Dec 31 2019 Number of direct employees: 1,577 1,570 1,547 Number of contracted workers: - - - Other information in Section 6.

87 Provide information on permits and each subsidiary’s compliance status with IPPC/IED (Integrated Pollution Prevention and Control Directive/Industrial Emissions Directive)

Grupa Azoty ZAK S.A. operates in full compliance with applicable legal requirements. In 2019, Grupa Azoty ZAK S.A. continued to work on achieving a clear legal status with respect to environmental protection standards to ensure that its operations are conducted in compliance with the law. A number of decisions were obtained, including:  an updated permit for greenhouse gas emissions from chemical installations,  a decision declaring expiry of the permit to collect and process waste. Other proceedings are pending or were closed in 2020.

Below are presented environmental decisions currently held by Grupa Azoty ZAK S.A. (as at December 31st 2019):

Integrated permits: I. Oxoplast Business Unit's installations 1. Environmental decision ŚR.III-MJ-6610-1-34/06 of December 29th 2006 − integrated permit for the Oxoplast Business Unit's installations, as amended by: Environmental order ŚR-III-MW-6610-1/16/07 of May 14th 2007 Environmental decision ŚR.III-MW-6610-1/19/07 of May 28th 2007 Environmental decision DOŚ.III.TŁ.7636-31/09 of December 10th 2009 Environmental decision DOŚ.7222.62.2011.MJ of January 21st 2013 Environmental decision DOŚ.7222.48.2013.MK of February 21st 2014 Environmental decision DOŚ.7222.9.2014.MJ Z of August 22nd 2014 Environmental decision DOŚ.7222.86.2014.MJ of March 16th 2015 Environmental decision DOŚ.7222.66.2015.HM of July 12th 2016 Environmental decision DOŚ.7222.59.2017.HM of September 4th 2018.

II. Fertilizer Business Unit's installations 1. Environmental decision ŚR.III-MJ-6610-1-28/06 of December 29th 2006 − integrated permit for the Fertilizers Business Unit's installations, as amended by: Environmental order ŚR.III-MW-6610-1/16/07 of May 14th 2007 Environmental order DOŚ.III-MJP-7636-21/08 of June 10th 2008 Environmental decision DOŚ.III.MWo-7636-47/08 of March 26th 2009 Environmental order DOŚ.III-MJP-7636-24/09 of June 17th 2009 Environmental decision DOŚ.III-MJ-7636-50/09 of December 22nd 2009 Environmental decision DOŚ.III-MJ-7636-51/09 of October 13th 2010 Environmental decision DOŚ.MWi.7636-45/10 of December 23rd 2010 Environmental decision DOŚ.7222.48.2011.MJ of October 15th 2012 Environmental decision DOŚ.7222.36.2014.MJ of October 27th 2014 Environmental decision DOŚ.7222.106.2014.HM of March 30th 2015 Environmental decision DOŚ.7222.61.2015.MSu of May 4th 2016 Environmental decision DOŚ.7222.55.2017.HM of January 31st 2018.

III. Power Business Unit's and Infrastructure Unit's installations 1. Environmental decision ŚR.III-MJ-6610-1-29/05 of June 30th 2006 − integrated permit for the Power Business Unit's and Infrastructure Unit's installations, as amended by: Environmental decision DOŚ.III.MWo.7636-46/08 of December 31st 2008 Environmental decision DOŚ.Aku.7636-39/10 of June 11th 2010 Environmental decision DOŚ.7222.36.2013.MJ of January 31st 2014 Environmental decision DOŚ.7222.39.2014.JZ of November 27th 2014 Environmental decision DOŚ.7222.84.2014.BG of March 17th 2015 Environmental decision DOŚ.7222.65.2015.MJ of December 29th 2015 Environmental decision DOŚ-III.7222.21.2016.BG of February 28th 2017 Environmental order DOŚ-III.7222.21.2016.BG of March 8th 2017 Environmental decision DOŚ-III.7222.69.2017.JW of December 15th 2017 2. Environmental decision DOŚ.7222.12.2015.AK of June 30th 2015− integrated permit for the wastewater treatment facility, as amended by: Environmental decision DOŚ.7222.42.2016.NG of October 24th 2016

88 Environmental decision DOŚ-III.7222.79.2017.AK of March 30th 2018.

IV. Water-law permit 1. Environmental decision ŚR.III-MJP-6811-179/05 of March 14th 2006 − water-law permit for water withdrawal, as amended by: Environmental decision ŚR.II-MJP-6811-13/07 of May 21st 2007 Environmental decision GL.RUZ.421.148.2018.TS of September 25th 2018 2. Environmental decision ŚR.III-MK-6811/19/02 of May 16th 2002 – decision establishing a direct protection zone for wells drawing water from Tertiary and Quaternary formations. V. Waste collection and recycling 1. Environmental decision ŚR.6233.8.5.2018 of February 6th 2019 declaring expiry of the permit to collect and process waste. VI. Ash and slag landfill 1. Environmental decision DOŚ.III.7241.2.9.2013.MK of February 26th 2014 – decision approving the ash and slag landfill operation manual. VII. Greenhouse gas emissions 1. Environmental permit DOŚ-III.7225.25.2016.BG of January 23rd 2017 − permit for greenhouse gas emissions from the TKIV and TKV nitric acid production installations and from the ammonia, synthesis gas, aldehyde and alcohol production installations, as amended by: DOŚ-III.7225.1.2018.NG of March 21st 2018, DOŚ-III.7225.7.2019.MWr of July 22nd 2019, Environmental order DOŚ-III.7225.7.2019.MWr of August 12th 2019 2. Environmental decision DOŚ-III.7225.20.2016.BG of November 25th 2016 – permit for greenhouse gas emissions from the fuel combustion installations with a rated thermal power of 395 MWt, as amended by: Environmental decision DOŚ-III.7225.16.2017.BG of November 24th 2017. VIII. Remediation 1. Environmental decision WOOŚ.511.1.2.2016.ER.10 of May 8th 2017 concerning a remediation plan for historical land surface contamination at the site of the Central Mechanical and Biological Wastewater Treatment Facility (area between the sewage sludge landfill and pond 3), 2. Environmental decision WOOŚ.511.1.6.2016.ER.7 of May 26th 2017 concerning a remediation plan for historical land surface contamination at the site of the former Copper-Based Syngas Cleaning Unit II (Field E-5), as amended by decision WOOŚ.515.13.ER.4 of August 8th 2018, 3. Environmental decision WOŚ.511.1.7.2016.ER.6 of August 1st 2017 concerning a remediation plan for historical land surface contamination at the site of the former semi-hard wax and chromopol unit, as amended by decision WOOŚ.515.21.2018.ER.3 of December 6th 2018, 4. Environmental decision WOOŚ.511.1.2018.MO.6 of July 27th 2018, agreeing the conditions of remedial activities for the unit 861 area.

Reporting period: 2019

89 Have there been any changes to Yes [X] If Yes, please describe: environment, social, labour or health No [ ]  Commission Delegated Regulation (EU) and safety laws or regulations that 2019/331 of December 19th 2018 have materially affected the determining transitional Union-wide rules Company? for harmonised free allocation of emission allowances pursuant to Article 10a of Directive 2003/87/EC of the European Parliament and of the Council (OJ L 59/8, 27.2.2019)  Commission Implementing Regulation (EU) 2019/1842 of October 31st 2019 laying down rules for the application of Directive 2003/87/EC of the European Parliament and of the Council as regards further arrangements for the adjustments to free allocation of emission allowances due to activity level changes (OJ L 282/20, 4.11.2019)  Act Amending the Act on Trading in Greenhouse Gas Emissions Allowances and Certain Other Acts of July 4th 2019 (Dz.U. of August 9th 2019, item 1501)  Act on the Compensation Scheme for Energy-Intensive Sectors and Subsectors of July 19th 2019 (Dz.U. of August 14th 2019, item 1532)  Act Amending the Waste Act and Certain Other Acts of July 4th 2019 (Dz.U. of July 29th 2019, item 1403).

90 How many inspections did you receive Number: 5 Please provide details of these visits, from the environmental authorities including number and nature of any during the reporting period? violations found: In 2019, five inspections related to environmental matters were carried out, including three inspections by the Provincial Inspectorate for Environmental Protection of Opole, one by the Kędzierzyn-Koźle County Head, and one by the County Commander-in-Chief of the State Fire Service. Inspections by the Provincial Inspectorate for Environmental Protection: a) inspection concerning the prevention of major accidents, held in connection with the fire that took place on April 20th 2019 at the plant’s wastewater treatment plant (on April 30th − May 10th 2019), b) comprehensive inspection held on November 22nd − December 30th 2019 with respect to the Oxoplast and Power Business Units, which covered all environmental components, c) investment project inspection related to the completion and delivery of the ‘Construction of Special Esters I unit’ project at the Oxoplast Business Unit’s Esters Department (held on July 18th – August 9th 2019). The inspection held by a representative of the County Head was related to a review of waste storage sites in connection with a request filed by Grupa Azoty ZAK S.A. concerning expiry of the final decision by the Opole Province Marshal dated April 19th 2016, ref. DOŚ-IV.7244.4.12.2015.DP – a permit to collect and process waste. The inspection held by the State Fire Service involved checks and reconnaissance activities related to fire prevention at the Power Business Unit’s waste storage sites. No requirement notices were issued following these inspections, but the Provincial Inspectorate for Environmental Protection (WIOŚ) identified three violations in the course of its comprehensive inspection and issued an instruction to be followed by the subject entity (as a sanction).

91 How many inspections did you Number: Please provide details of these visits, receive from the health and safety 2 including number and nature of any authorities during the reporting violations found: period? On October 10th − November 28th 2019, the National Labour Inspectorate (PIP) carried out an inspection at the Nitric Acid Department to check compliance with the occupational health and safety regulations. During the inspection, guidance was issued regarding ten occupational health and safety issues and two labour protection issues, in addition to two oral decisions, which were implemented in the course of the inspection. On February 6th – February 13th 2019, the County Sanitary and Epidemiological Station held an inspection which covered the following areas:  occupational health and safety conditions as well as harmful agents and nuisances in the work environment,  the use of category 2 and 3 precursors,  biological agents in the work environment,  the use of biocidal products,  carcinogenic and mutagenic agents in the work environment,  the use of chemical substances and mixtures. No objections or reservations were raised regarding the subject matter of the inspection.

How many inspections did you Number: Please provide details of these visits, receive from the labour authorities 1 including number and nature of any during the reporting period? violations found: On October 10th − November 28th 2019, the National Labour Inspectorate (PIP) carried out an inspection at the Nitric Acid Department to check compliance with the occupational health and safety regulations. During the inspection, guidance was issued regarding ten occupational health and safety issues and two labour protection issues, in addition to two oral decisions, which were implemented in the course of the inspection. One improvement notice and six injunctive decisions were issued following the inspection.

92 Have these visits resulted in any Yes [X] If Yes, please describe, including status of penalties, fines and/or corrective No [ ] implementing corrective actions to address action plans? any violations found: During the inspection held on October 10th – November 28th 2019 by the National Labour Inspectorate at the Nitric Acid Department, guidance was issued regarding ten occupational health and safety issues and two labour protection issues, in addition to two oral decisions, which were implemented in the course of the inspection. One improvement notice and six injunctive decisions were issued following the inspection. No objections or reservations were raised following the inspection held on February 6th – February 13th 2019 by the County Sanitary and Epidemiological Station. Has the Company engaged any Yes [X] If Yes, please state for which types of work, contractors for project-related work No [ ] and how the Company has monitored the in the reporting period? compliance of contractors with EBRD Performance Requirements and the Environmental and Social Action Plan:

The Company engaged external contractors for the following types of work: - development of project documentation, - demolition work, - construction and repair work, - collection of waste generated by the plant (including complete oil and lubrication service of plant and equipment). The work of subcontractors was monitored through: - ongoing supervision of work, - ongoing OHS inspections, - subcontractor/contractor audits, - waste transfer notes, - work acceptance reports. Were any violations found as a result Yes [ ] If Yes, please provide details, including how of these actions that were the No [X] the Company is ensuring that corrective responsibility of external contractors actions are implemented by the contractor? engaged by the Company? Have any operations been reduced, Yes [ ] If Yes, please describe: temporarily suspended or closed down No [X] due to environmental, health, safety or labour reasons?

93 Please describe any environment or social programmes, initiatives or sub-projects undertaken during the reporting period to improve the Company's environmental or social performance and/or management systems: On April 2nd – April 4th 2019, Grupa Azoty ZAK S.A. successfully passed the 2nd surveillance audit of its environmental protection management system confirming the system’s compliance with the ISO 14001:2015 standard. The audit was carried out jointly for the entire Integrated Management System (IMS) by auditors of an external certification body (Polskie Centrum Badań i Certyfikacji S.A.), checking compliance of the IMS with the requirements of the following standards: ISO 9001:2015, PN-N-18001:2004, OHSAS 18001:2007 and ISO 14001:2015. The audit was completed with positive results, as confirmed by a decision to uphold the certification and by issuing the updated IMS Certificate to the Company (valid until February 13th 2020).

In 2019, the Company engaged in activities designed to achieve specific objectives of the environmental protection management system, as well as tasks undertaken under the ‘Responsible Care®’ Programme, the most important of which were:

1) Completed demolition of buildings and structures and scrapping of process systems, equipment and piping of a non-operational phthalic anhydride unit – during the unit’s decommissioning, removal of asbestos for disposal. 2) Filing applications for updates of the integrated permits for the Power Business Unit’s fuel combustion installation and the Oxoplast Business Unit’s installations to align them with the BAT conclusions. 3) Filing two applications to the National Centre for Emissions Balancing and Management (KOBiZE) for free allocation of greenhouse gas emission allowances for the new trading period, namely 2021–2025. 4) Measuring diffuse VOC emissions into the air and applying for an update to the integrated permit for the wastewater treatment plant; preparing a risk assessment for toxic impurities in the treated industrial wastewater and its submission to the Opole Province Marshal – as required by the BAT conclusions. 5) Commencing work on the construction of a peak-load/reserve boiler house with a 100 Mg/h steam generator – following the decision to abandon milestone two of the Company’s CHP plant upgrade project and upcoming expiry of the derogation period for the old boilers. 6) Improvement of staff safety at a number of units through proper OHS and fire prevention measures. 7) Implementation of nine health promotion projects for employees and their children. 8) Participation in the ‘Catch the Hare’ (for employees) and ‘Catch the Hare – Junior’ (for children of employees) nature photography contest.

Expenditure on the implementation of the planned activities was as follows: - expenditure on specific environmental protection objectives in 2019 – approximately PLN 1.76m, - expenditure on activities undertaken as part of the ‘Responsible Care®’ Programme in 2019 – approximately PLN 1.99m.

The table is attached hereto.

94 4. Environmental Monitoring Data for each of the key subsidiaries The information required in this section can be extracted from a CSR report, or a full CSR report can be attached.

Please provide the name and contact details Joanna Maj – Head of Environmental Protection for your environmental manager: Telephone: (+48) 77 481-21-03 Mobile: (+48) 695-380-998 Email: [email protected] Parameter2 Amount3 Unit Compliance Status4 Comments5 Wastewater Total wastewater 5,120.1 ‘000 m3 Compliant Aggregate wastewater stream Biochemical 48.4 Mg Compliant Same as above Oxygen Demand (BOD5) Chemical Oxygen 353.1 Mg Compliant Same as above Demand (COD) Suspended solids 150.2 Mg Non-compliant Same as above Periodic exceedances of permitted suspended solid levels are due to the combined effect of reduced volumes of effluents discharged and climate warming, which causes algal bloom contamination in the last wastewater treatment unit. The Company has taken measures to address the problem. Phosphorus 2.0 Mg Compliant Same as above Nitrate nitrogen 40.4 Mg Compliant Same as above Heavy metals 1.052 Mg Compliant Same as above [Other] Ammoniacal 5.3 Mg Compliant Same as above nitrogen Total nitrogen 70.0 Mg Compliant Same as above Air emissions

SO2 730.4 Mg Emissions (mainly from the CHP plant) Nitrogen oxides 705.1 Mg Aggregate emissions from (NOX) the CHP plant and chemical units Particulates 143.6 Mg Same as above

CO2 896,058.9 Mg Same as above Other parameters Noise emissions Periodic noise pollution surveys carried out in 2019 revealed no exceedance of the permissible night and day noise levels at the border of the areas subject to regulation. [Other] Total solid waste 85,910.9 Mg Compliant Volume of waste generated including: in the reporting period 06 13 02* 8.42 Mg Compliant Urea, aldehyde and alcohol activated carbon post-production waste 07 01 08* 1,646.06 Mg Compliant Aldehyde and alcohol post- other still bottoms production waste and reaction residues

95 07 01 10* 209.54 Mg Compliant Ester post-production waste filter cakes 07 01 11* 28.88 Mg Compliant Sludges from the treatment sludges from on- of aldehyde, alcohols, and site effluent urea post-production treatment wastewater 10 01 01 5,583.60 Mg Compliant Waste from the Company's slag, bottom ash CHP plant 10 01 02 33,455.98 Mg Compliant Waste from the Company's fly ash CHP plant 10 01 80 ash and 35,479.13 Mg Compliant Waste from the Company's slag mixtures CHP plant 10 01 82 4,415.94 Mg Compliant Waste from the Company's mixtures of ash CHP plant and desulfurisation waste

15 01 01 paper 1.65 Mg Compliant Aggregate waste stream packaging 15 01 02 plastic 23.24 Mg Compliant Aggregate waste stream packaging 15 01 03 wooden 43.47 Mg Compliant Aggregate waste stream packaging 15 01 04 metal 23.81 Mg Compliant Aggregate waste stream packaging

15 01 07 glass 0.52 Mg Compliant Aggregate waste stream packaging 15 01 10* 3.07 Mg Compliant Aggregate waste stream hazardous materials packaging

15 02 02* 5.50 Mg Compliant Aggregate waste stream absorbents, wiping cloths 15 02 03 23.73 Mg Compliant Aggregate waste stream absorbents, filter materials 16 02 14 4.97 Mg Compliant Aggregate waste stream discarded equipment 16 07 09* 2.54 Mg Compliant Waste from the fertilizers waste from tank production line cleaning 16 08 01 spent 0.14 Mg Compliant Nitric acid post-production catalysts waste containing precious metals 16 08 02* 0 Mg Compliant Aldehyde and alcohol as spent catalysts well as ammonia post- production waste 16 08 07* 0 Mg Compliant Aldehyde and alcohol as spent catalysts well as ammonia post- production waste 17 02 01 13.66 Mg Compliant Aggregate waste stream wood 17 02 03 10.64 Mg Compliant Aggregate waste stream plastics

96 17 04 02 5.12 Mg Compliant Aggregate waste stream aluminium 17 04 05 1,585.64 Mg Compliant Aggregate waste stream iron and steel 17 04 07 50.28 Mg Compliant Aggregate waste stream mixed metals 17 04 11 31.14 Mg Compliant Aggregate waste stream cables 17 09 04 3.12 Mg Compliant Aggregate waste stream mixed construction and repair waste 19 08 01 1.18 Mg Compliant Waste from treatment of screenings aggregate wastewater stream 19 08 02 waste 3.00 Mg Compliant Waste from treatment of from desanding aggregate wastewater stream 19 08 10* – oils 7.12 Mg Compliant Waste from treatment of from wastewater aggregate wastewater treatment plants stream 19 08 11* - sludges 2,241.14 Mg Compliant Waste from treatment of from biological aggregate wastewater treatment of stream industrial wastewater 19 08 13* - sludges 614.52 Mg Compliant Waste from treatment of from non-biological aggregate wastewater treatment of stream industrial wastewater 19 09 01 – solid 149.16 Mg Compliant Waste from water waste from treatment primary filtration and screenings

Please provide details of the types and amounts of solid wastes generated by the project. Indicate where wastes are classified as hazardous. Indicate the final re-use, recycle or disposal method for each waste type.

During project execution, waste was generated by contractors, with the following types and quantities handed over to licensed external waste collectors for subsequent processing:  concrete waste and rubble from demolition and repair work (waste code 17 01 01) – 787.00 Mg,  bricks (waste code 17 01 02) – 4,024.00 Mg,  mixtures of concrete, bricks, tiles and ceramics (waste code 17 01 07) – 1,615.00 Mg,  construction materials containing asbestos (waste code 17 06 05) – 0.04 Mg – handed over to a waste collector for disposal.

5. Resource Usage and Product Output Measureme Parameter Amount Comments6 nt Unit Fuels used Crude oil - Natural gas 4,227,734 MWh For ammonia production Hard coal Mg Coal parameters: calorific value 212,027 – 20,739 kJ/kg, sulfur content – 0.42%, ash content – 27.15%. Lignite -

97 Grid electricity MWh Total volume of electricity purchased for Grupa Azoty ZAK S.A. – both for in-house 652,666 needs as an end user and for resale as part of the electricity trading business. Heat purchased from GJ external sources 114,290 Used feedstocks and raw materials Propylene 97,248 Mg For alcohol and aldehyde production Ammonia 4,589 Mg For nitric acid production Terephthalic acid 18,945 Mg For Oxoviflex plasticizer production Oxygen 243,157 ‘000 m3 Figure covers all plant operations Nitrogen 280,771 ‘000 m3 Figure covers all plant operations Dolomite 97,970 Mg Dolomite powder production unit Product output Anhydrous ammonia 423,530 Mg Gaseous carbon dioxide 248,271 Mg Technical-grade nitric acid 509,236 Mg Ammonium nitrate Mg 568,594 solution Miksal 2,513 Mg Anhydrite powder 3,883 Mg Dolomite powder 95,634 Mg ZAKsan® 296,615 Mg Total Salmags, including: 317,843 Mg Salmag® 278,890 Mg Salmag z magnezem® 13 (Salmag with magnesium) Salmag z borem® (Salmag Mg 22,223 with boron) Salmag z siarką® (Salmag Mg 16,717 with sulfur) 28% UAN 21,385 Mg 30% UAN 21,861 Mg 32% UAN 87,306 Mg Total urea, including: 195,670 Mg - Urea-based lyes 195,670 Mg 46% granulated urea 92,481 Mg ® 33% PULNOx 141 Mg ® 40% PULNOx 36,947 Mg ® 45% PULNOx 4,391 Mg NOXy® (AdBlue®) 132,694 Mg LIKAM® 10,356 Mg Hydrogen (from the ‘000 m3 925,268 Synthesis Gas Unit) Hydrogen from the ‘000 m3 26,357 purification unit Isobutyl aldehyde 2,240 Mg n-butyl aldehyde 2,046 Mg Total OXO alcohols, Mg 140,616 including: 2-Ethylhexanol 103,693 Mg Isobutanol 9,139 Mg n-butanol 27,784 Mg Octanol F 3,898 Mg OxoviflexTM 43,903 Mg Mix of plasticizers 0 Mg Adoflex® 542 Mg

98 Oxovilen® 191 Mg OXO synthesis gas 101,496 ‘000 m3 Compressed hydrogen 28,708 ‘000 m3 Instrument air 76,383 ‘000 m3 Heat 4,403,800 GJ Electricity 139,647 MWh

6. Human Resources management Please provide the name and contact details for Monika Ptaszyńska, Head of HR Policy Office your Human Resources manager: Telephone: (+48) 77 481-31-52 Mobile: (+48) 723-186-834 Email: [email protected] Hired in this Terminated in this Total reporting period reporting period Number of direct employees: 1,547 83 106 Number of contracted workers: - - - Were there any collective Yes [ ] If Yes, please describe the redundancy plan, redundancies during the reporting No [X] including reasons for redundancies, number of period? workers involved, how they were selected, consultation undertaken, and measures to mitigate the effects of redundancy: Are any redundancies to the Yes [ ] If Yes, please describe the redundancy plan, workforce planned for the next No [X] including reasons for redundancies, number of year? workers involved, and selection and consultation process:

Were there any changes in trade Yes [ ] If Yes, please provide details, and summarise union representation at Company No [X] engagement with trade unions during the reporting plants during the reporting period: period? Were there any other worker Yes [ ] If Yes, please provide details and summarise representatives (e.g. in the No [X] engagement with them during the reporting period: absence of a trade union)? Were there any changes in the Yes [ ] If Yes, please provide details: status of Collective Agreements? No [X]

Have employees raised any Yes [ ] If Yes, please state how many, split by gender, grievances with the project during No [X] summarise the issues raised in grievances by male the reporting period? and female staff and explain how the Company has addressed them: Have employees raised any Yes [ ] If Yes, please state how many, split by gender, complaints about harassment or No [X] summarise the issues raised by male and female bullying during the reporting staff and explain how the Company has addressed period? them: Have there been any strikes or Yes [ ] If Yes, please summarise nature of, and reasons for, other collective disputes related No [X] the disputes and explain how they were resolved: to labour and working conditions at the Company in the reporting period? Have there been any court cases Yes [X] If Yes, please summarise the issues contested related to labour issues during the No [ ] and outcome: reporting period? Actions for compensation: 2 – pending, Actions for reinstatement to employment: 6 – pending.

99 Have there been any changes to Yes [X] If Yes, please give details, including of any new the following policies or terms No [ ] initiatives: and conditions during the reporting period in any of the In 2019, four supplements to the Collective following areas: Bargaining Agreement were signed.  Trade union recognition These supplements concerned:  Collective Agreements  change in percentage value defined in the Base  Non-discrimination and equal Pay and Shift Allowance Table, opportunities for all  changes in percentage salary ranges for trade  Equal pay for equal work union chairs, persons sitting on  Gender equality the Trade Unions Board, and person holding the  Bullying and harassment, position of Social Labour Inspector at the including sexual harassment Company,  Employment of young  change in base contribution to the Company workers under 18 Social Benefits Fund.  Wages and salaries (for regular and overtime hours)  Overtime  Working hours  Flexible working / work-life balance  Grievance mechanism for workers  Health & safety

7. Occupational Health and Safety Data Please provide the name and Marcin Trochimowicz, Head of Occupational Health & Safety contact details for your Health Telephone: (+48) 77 481-22-53 and Safety manager: Mobile: (+48) 695-380-826 [email protected] Direct Contracted Direct Contracted employees workers employees workers Number of man- hours worked in Number of 2,541,186 0 0 0 this reporting fatalities 7: period: Budget spent on Number of OHS in this period PLN 2,039.21 0 disabling 0 0 (total amount and thousand injuries: currency): OHS training Number of Lost provided in this Time Incidents 1,221 0 7 0 period in person- (including days: vehicular): Number of lost Number of cases workdays 426 of occupational 0 0 resulting from disease: incidents: Number of sick 28,463 days:

100 Accident causes (falling, heavy loads, struck by object, contact with energy source etc.):

Fall in a passageway (3), impact by a pump handle (1), contact with a corrosive medium (1), abdominal injury (1), fall from height (1) Please provide details of any fatalities or major accidents that have not previously been reported to EBRD, including total compensation paid due to occupational injury or illness (amount and currency):

None Please summarise any emergency prevention and response training that has been provided for Company personnel during the reporting period:

Employees of Grupa Azoty ZAK S.A. receive emergency prevention and response training during periodic OHS instructions in compliance with the P-03/C ‘Training’ procedure. The Chemical Rescue Division also addresses these topics while training Grupa Azoty ZAK S.A.’s Departmental Chemical Rescuers Team (100 people).

Please summarise any emergency response exercises or drills that have been carried out during the reporting period:

In 2019, the Chemical Rescue Division organised and provided a series of 12 emergency response exercises at Grupa Azoty ZAK S.A., on the premises of the Departments/Units exposed to the highest risk of a serious incident. The drills were attended by employees from each Department, the Rescue Unit, the Departmental Chemical Rescuers Team, GWARANT (a security services provider), Falck Medycyna (a healthcare provider), and Company Shift Dispatchers. In 2019, drills were conducted at the Ammonia, Compressor and Ester Departments.

Additionally, at noon on the first Tuesday of each month a Company Shift Dispatcher announces a second degree drill alarm. On a daily basis, Company Shift Dispatchers also run operating tests of the emergency channel (the most important means of communication during rescue operations at Grupa Azoty ZAK S.A.).

8. Stakeholder Engagement Please provide the name and contact details Jerzy Naszkiewicz for your external relations or community Head of the Communication Office, engagement manager: Telephone: (+48) 77 481 24 83 Email: [email protected]

101 Please provide information on the implementation of the Stakeholder Engagement Plan agreed with EBRD and summarise interaction with stakeholders during the reporting period, including:  meetings or other initiatives to engage with members of the public or public organisations during the reporting period  information on environmental protection, social policy and safety matters provided to the local community and other stakeholders during the reporting period:  coverage in the media:  interaction with any environmental or other community groups. Please describe any changes to the Stakeholder Engagement Plan agreed with EBRD:

The Company takes care to ensure clarity and consistency in communicating with its market environment, local community and the media. All material events and activities are announced by the Company through the media by maintaining contacts with the press, issuing press releases and getting coverage in the media. The Company has in place a coherent visual identity system and advertising design ensuring that it is easily recognisable in advertising and promotional materials, as well as in contacts with the media and stakeholders.

In its dialogue with stakeholder groups, the Company relies on a mix of available communications tools:

- Employees: corporate bulletin, intranet, email, internal memos and letters, directives and team bonding events; - Employees and persons from outside the Company: social media (FB, Google+, Twitter, Youtube); - Social dialogue forum: meetings of the Company Management Board and HR Manager with trade unions and social labour inspectors; - Retired employees: semi-annual meetings of the Seniors Club with the Company Management Board; - Media: events, press releases, promotional and advertising publications; information published in the media tab of the Company website; - Local community: local media (press articles and releases, radio programmes etc.), social media; - Customers and suppliers: meetings with customers, advertising brochures, Customer Service Office, regular contacts of sales managers and directors with customers, fertilizer and Oxoplast product websites.

The Company maintains a central register of key stakeholders.

No complaints or grievances were received in 2019.

9. Community Development Please summarise any social or community development / investment initiatives undertaken by the Company during the reporting period, and any associated expenditure:

Policy for social and sponsorship activities: In 2019, Grupa Azoty ZAK S.A. was involved in CSR advertising activities in the following areas:

102

 Social responsibility and sponsorship initiatives for culture  Social responsibility and sponsorship initiatives for amateur sports  Social responsibility and sponsorship initiatives for the chemical industry  Grupa Azoty ZAK S.A. scholarship programmes  Collaboration with educational institutions  Research and development programmes, regional development initiatives  Other CSR programmes conducted by Grupa Azoty ZAK S.A. for the benefit of the local community in Kędzierzyn-Koźle In 2019, Grupa Azoty ZAK S.A. spent PLN 554,798.83 on CSR activities benefiting the local community.

Charitable giving policy The donation policy of the Grupa Azoty Group sets forth the rules of making donations and applies to all Group companies. Through donations, the Group seeks to actively respond to the needs of foundations, associations, schools, non-profit organisations and individuals in difficult circumstances.In particular, the Group supports projects contributing to the enhancement of medical care, social and educational development of children and youth, as well as other initiatives benefiting local communities. All donations are granted in line with the Group-wide donation policy as well the adopted Donation Granting Rules.

Pursuant to the donation policy applicable at Grupa Azoty ZAK S.A. and the Donation Granting Rules, in 2019 Grupa Azoty ZAK S.A. made donations for the following purposes:  providing social assistance, mainly to families and individuals in difficult circumstances, and promoting equal opportunities for such families and individuals,  activities aimed at social and professional integration and reintegration of individuals at risk of social exclusion,  charitable causes,  cultivating and fostering Polish traditions and national identity, strengthening of national, civic and cultural awareness,  activities supporting national/ethnic minorities and regional languages,  health protection and promotion,  activities benefiting persons with disabilities,  support for people at retirement age,  activities supporting the development of local groups and communities,  science, higher education, schooling, and education systems,  activities for children and youth, including holidays for children and youth,  culture, arts, and protection of cultural property and national heritage,  supporting and promoting physical education,  environment protection, animal welfare and protection of natural heritage,  public safety and order,  national defence and activities of the Armed Forces of the Republic of Poland,  rescue operations and civil protection,  provision of assistance to victims of natural disasters, military conflicts and wars in Poland and abroad,  support for European integration and fostering international contacts and cooperation,  promotion and organisation of volunteering projects,  assistance provided to the Polish diaspora and to Poles residing abroad,  support for veterans and victims of political repression,  supporting families, motherhood and parenthood, promotion and protection of children’s rights,

 preventing addictions and social pathologies,  religion.

In total, in 2019 Grupa Azoty ZAK S.A. donated PLN 390,000.00 to the causes listed above.

103 ENVIRONMENTAL AND SOCIAL ACTION PLAN

Table 0.1 Wisła Project, Grupa Azoty Poland – Environmental, Social, Health and Safety (ESHS) matters, Updated (Alchemist Project) Action Plan:

GRUPA AZOTY ZAKŁADY AZOTOWE KĘDZIERZYN S.A.

4. Actions required to maintain compliance with EHS requirements of national law and EU environmental standards - Zakłady Azotowe Kędzierzyn No. Action Environmental risks, liabilities/benefits Legislative Requirement Scheduled Target and Comments requirements/B /Resources completion – evaluation criteria est practice action to be for implementation completed by end progress of year 4.1 Complete the planned Reduce negative environmental impact in Legislative Investment 2015/2016 – Obtain a relevant Milestone 1 – construction of energy line with IED requirements. requirements, needs milestone 1 permit for the new completed generation installations to ensure best 2017-2021 – facility compliance with IED post 2016, The Company is planning to install new management milestone 2 Milestone 2 – taking into account the coal-fired boilers to replace old units. All practices, 2019-2023 – new Update information abandoned and derogations agreed upon with new units must comply with IED. Bank's PRs concept on the project in replaced with a competent authorities. the annual report, new concept selected technology (with a new Target emission levels: and target emission completion 3 200 mg/m for SO2 levels. date) 200 mg/m3 for NOx 20 mg/ni3 for PM. Publish NTS of the project and provide copy/web link to the Bank as part of the annual report.

104 Information: Two milestones have been scheduled for the project on a preliminary basis, including:  2014–2016: execution of milestone 1, i.e. construction of a coal-fired boiler house with a capacity of 140 Mg/h, installation of a 25 MWe pass- out and condensing turbine, and construction of a control centre building. This milestone was completed in 2017.  Originally, the following was planned for 2017−2021: execution of milestone 2 of the CHP project, as per the 2013 Feasibility Study, involving the construction of a second coal-fired boiler with a capacity of 140 Mg/h and a gas and oil-fired boiler house with a capacity of 2 x 70 mg/h. Milestone 2 was ultimately abandoned on the Steering Committee’s recommendation to modify the ‘New CHP Plant at Grupa Azoty ZAK S.A. – milestone 2’ project under the Management Board’s Resolution No. 294/18 of October 11th 2018. In the first quarter of 2019, accompanying reports were drawn up for the ‘Innovative management of heat from ammonia production processes as an alternative to heat generation in coal-fired boilers’ concept. By official instruction No. 6/19 of March 6th 2019, a team was established to introduce and implement the New Concept. In April 2019, the team decided to select the gas-fired peak-load/reserve boiler house system configuration based on two new boilers with a capacity of 100t/h and 50t/h, respectively, for further preparatory work. The reserve boiler house functioning as a peak-load source will operate in conjunction with steam generators at the existing ZAK CHP plant. In the event of downtime of coal-fired boilers at the existing ZAK CHP plant, the peak-load/reserve boiler house will operate as a stand-alone reserve steam generator. On June 17th 2019, the Group’s Development Committee approved the new project for innovative management of heat from ammonia production processes as an alternative to heat generation in coal-fired boilers. On October 24th 2019, the Contract Award Committee was established in connection with the procurement procedure for the construction of a peak-load/reserve boiler house in accordance with the recommended concept.

4.2 Complete restoration of the old Reduce negative environmental impact Legal Internal Ongoing waste landfill site and continue requirements/b resources monitoring of waste landfilling est and external conditions. management support practice Information: All landfill sites within Grupa Azoty ZAK S.A. premises, including inactive and restored sites, are monitored to ensure compliance with permits held.

4.3 Prepare a plan and potential Reduce negative environmental impact Best Internal Action plan and Prepare a plan and budget for removal of management resources potential budget potential budget for redundant/not operated practice and external to be decided in removal of installations/buildings and support 2013 and redundant/not structures updated in 2018 operated installations/buildings and structures

105 Information: Grupa Azoty Zakłady Azotowe Kędzierzyn S.A. is engaged in ongoing demolition of buildings, structures and systems which have been retired from service and are redundant for the Company’s purposes. Expenditure incurred in 2019 on demolition of disused facilities comprised: - demolition expenditure – PLN 1,439,000.00, - pre-demolition expenditure (site clearance, disconnection of utilities, etc.): PLN 31,312.00. Total: PLN 1,470,312.00

106 CERTIFIED TRANSLATION FROM POLISH

Annual Environmental & Social Report

1. Information about the Company Company Name: Grupa Azoty Jednostka Ratownictwa Chemicznego Sp. z o.o. Company Address: ul. Kwiatkowskiego 8, 33-101 Tarnów Country: Poland Town/Location: Tarnów Company authorised representative: I certify that the data contained in this report completely and accurately represents the Company’s operations during the reporting period. Signature: Leszek Gniadek

Title: President of the Management Board Date: 8th April 2020 Contact Details: Telephone: (+48) 14 637-27-30 Mobile: Email: [email protected]

Please provide key data on the Company performance, as well as production levels at each plant. For each of the 7 large plants please provide:

Grupa Azoty Jednostka Ratownictwa Chemicznego Sp. z o.o. Item

2018 2019 [PLN ‘000] performance performance*

Revenue 45,123 52,906 Profit/(loss) on sales 2,600 4,322 EBIT 2,460 4,111 EBITDA 5,220 8,545 Net profit/(loss) 1,934 2,167

Data from the Company’s separate financial statements * Financial data not yet audited by the Qualified Auditor.

Key performance indicators in terms of energy consumption, emissions, use of natural resources, and carbon dioxide emissions; Number of staff employed and any change in employment over past 3 years

As at Dec 31 2017 As at Dec 31 2018 As at Dec 31 2019 Number of direct employees: 249 245 259 Number of contracted workers: 2 2 2

Provide information on permits and each subsidiary’s compliance status with IPPC/IED (Integrated Pollution Prevention and Control Directive/Industrial Emissions Directive)

- Decision by the Governor of the Opole Province dated December 13th 2006, No. ŚR.III.AS-6610-1- 30/06, as amended, granting an integrated (IPPC) permit to operate installations manufacturing, with the use of chemical processes, organic chemistry products and semi-finished products, i.e. WAXES, MELAMINE RESIN, and VARIOUS ORGANIC PRODUCTS,

107

- Decision by the Governor of the Kraków Province dated April 27th 2007, No. ŚR.XI.AJ.6663-11-06, as amended, granting an integrated (IPPC) permit for the ‘Czajki I and II’ landfill site,

- Decision by the Governor of the Kraków Province dated April 25th 2007, No. ŚR.XI.AJ.6663-6-06, as amended, granting an integrated (IPPC) permit for the ‘Za Rzeką Biała’ landfill site,

- Decision by the Marshal of the Kraków Province dated August 5th 2013, No. SR-III- 1.7222.1.2013.AG , as amended, granting an integrated (IPPC) permit for the asbestos-containing waste landfill site in the AB-1-1 sector,

- Decision by the Governor of the Kraków Province dated May 24th 2007, No. ŚR.XI.AJ.6663-10-06, as amended, granting an integrated (IPPC) permit for the ‘AN II’ landfill site.

- Decision by the Marshal of the Kraków Province dated June 5th 2019, No. SR-III.7222.25.2018.AG, granting an integrated (IPPC) permit for installations – landfill cell sector for code 17 06 05 * hazardous waste – construction materials containing asbestos, over a part of land plot No. 25/54, cadastral district No. 203, located within the ‘Za Rzeką Biała’ landfill site.

Reporting period:2019

108 Have there been any changes to Yes If Yes, please describe: environment, social, labour or health [X] and safety laws or regulations that No [ ] ENVIRONMENTAL PROTECTION have materially affected the - Environmental Protection Law of April 27th Company? 2001 (Dz.U. of 2019, item 1396, as amended), - Waste Act of December 14th 2012 (Dz.U. of 2019, item 701, as amended), - Act on Cleaning and Waste Management in Municipalities, dated September 13th 1996 (Dz.U. of 2019, item 2010, as amended), - Act Amending the Waste Act and Certain Other Acts, dated July 4th 2019 (Dz.U. of 2019, item 1403), - Act Amending the Act on Cleaning and Waste Management in Municipalities and Certain Other Acts, dated July 19th 2019 (Dz.U. of 2019, item 1579), - Act Amending the Act on Disclosure of Information on the Environment and its Protection, on Public Participation in Environmental Protection and on Environmental Impact Assessments and Certain Other Acts, dated July 19th 2019 (Dz. U. of 2019, item 1712), - Minister of the Environment’s Regulation on the amounts of security for claims, dated February 7th 2019 (Dz.U. of 2019, item 256), - Minister of the Environment’s Regulation on the video monitoring of waste storage facilities and landfill sites (Dz.U. of 2019, item 1755), - Minister of Marine Economy and Inland Navigation’s Regulation on substances particularly harmful to the water environment whose introduction in a stream of industrial wastewater into sewerage systems requires a water-law permit, dated June 28th 2019 (Dz. U. of 2019, item122 0), - Minister of Marine Economy and Inland Navigation’s Regulation on permitted amounts of pollutants which may be discharged in a stream of industrial wastewater, dated July 8th 2019 (Dz. U. of 2019, item 1300), - Minister of Marine Economy and Inland Navigation’s Regulation Council of Minister’s Regulation on projects with a potentially significant environmental impact, dated September 10th 2019 (Dz. U. of 2019, item 1839), - Minister of the Environment’s Public Notice of August 30th 2019 on the rates of environmental fees for 2020 (M. P. 2019, item 866). How many inspections did you receive Number: 5 Please provide details of these visits, including from the environmental authorities number and nature of any violations found: during the reporting period?

109 1) Inspection by the Provincial Inspectorate for Environmental Protection of Kraków – Tarnów Branch, carried out on February 5th–8th 2019. The inspection was attended by a representative of the Marshal of the Kraków Province. Type of installations (operations) inspected: - ‘Czajki I and II’ landfill site intended for wastes other than hazardous and inert waste. Purpose of the inspection: - To check compliance with the regulatory obligations and administrative decisions applicable to landfill operators, including compliance with the prohibition on landfilling of biodegradable waste and with the Minister of Economy’s Regulation on permitting waste for landfilling, dated July 16th 2015 (Dz.U. of 2015, item 1277).

No violations or irregularities were identified.

2) Inspection by the Provincial Inspectorate for Environmental Protection of Kraków – Tarnów Branch, carried out on April 11th–15th 2019. The inspection was attended by a representative of the Marshal of the Kraków Province. Type of installations (operations) inspected: - ‘Za Rzeką Biała’ landfill site intended for wastes other than hazardous and inert waste – inspection preceding the issuance of an integrated (IPPC) permit with respect to a new landfill installation for code 17 06 05 * hazardous waste. Purpose of the inspection: - To check compliance with the regulatory obligations and administrative decisions applicable to landfill operators, including compliance with the prohibition on landfilling of biodegradable waste and with the Minister of Economy’s Regulation on permitting waste for landfilling, dated July 16th 2015 (Dz.U. of 2015, item 1277).

No violations or irregularities were identified.

3) Inspection by the Provincial Inspectorate for Environmental Protection of Kraków – Tarnów Branch, carried out on May 30th–July 5th 2019. Type of installations (operations) inspected: - ‘Za Rzeką Biała’ landfill site intended for wastes other than hazardous and inert waste, - ‘Czajki I and II’ landfill site intended for wastes other than hazardous and inert waste, - Chemical Wastewater Treatment Plant.

110

Purpose of the inspection: - Inspection of: - compliance with the regulatory obligations and administrative decisions applicable to landfill operators, including compliance with the prohibition on landfilling of biodegradable waste and with the Minister of Economy’s Regulation on permitting waste for landfilling, dated July 16th 2015 (Dz.U. of 2015, item 1277), - compliance with the regulations on management of asbestos waste removed from roof coverings, installations or other facilities and structures, in accordance with the waste management regulations, - compliance with the regulations on introduction into sewerage systems owned by other entities of industrial wastewater containing substances particularly harmful to the water environment, - concerning prevention of major accidents, -concerning payment of environmental fees.

The following irregularities and violations were identified: - failure to analyse waste in accordance with the Procedure for Waste Disposal through the Chemical Wastewater Treatment Plant and with Section 6.4. of the Marshal of the Kraków Province’s decision of March 18th 2014, No. SR- III-1.7244.2.3.2013.AG, as amended, granting a permit for waste processing.

4) Inspection by the Provincial Inspectorate for Environmental Protection of Kraków – Tarnów Branch, carried out on September 3rd–18th 2019. The inspection was attended by a representative of the Marshal of the Kraków Province.

Type of installations (operations) inspected: - ‘Za Rzeką Biała’ landfill site intended for wastes other than hazardous and inert waste, - Chemical Wastewater Treatment Plant. Purpose of the inspection: - Inspection of: - compliance with the regulatory obligations and administrative decisions applicable to landfill operators, including compliance with the prohibition on landfilling of biodegradable waste and with the Minister of Economy’s Regulation on permitting waste for landfilling, dated July 16th 2015 (Dz. U. of 2015, item 1277), - compliance with waste management regulations by waste collectors and processors, processing waste in places posing fire hazards,

111 - compliance with the conditions regarding water abstraction volumes, as specified in relevant water-law permits, - compliance with the conditions regarding the quality and quantity of wastewater introduced into water or into the ground, as specified in relevant water-law permits and integrated (IPPC) permits, - compliance with environmental protection regulations with respect to emissions of gases and particulate matter into the air, - compliance with environmental protection requirements by operators of facilities requiring an integrated (IPPC) permit.

No violations or irregularities were identified.

5) Inspection by the State Fire Service – Municipal Command of the State Fire Service in Tarnów, carried out on September 16th 2019. Type of installations (operations) inspected: - ‘Za Rzeką Biała’ landfill site intended for wastes other than hazardous and inert waste – D- 1 sector, sorting line. Purpose of the inspection: - Inspection of compliance with fire regulations, - Assessment of compliance with the fire protection regulations at waste collection, processing and generation sites or with the fire protection conditions defined when issuing a permit for waste collection and processing, and a permit for waste generation.

The following irregularities and violations were identified: - no update of the fire safety instructions for the ‘Za Rzeką Biała’ landfill site (it was still being updated during the inspection).

112 How many inspections did you Number: 2 Please provide details of these visits, including receive from the health number and nature of any violations found: and safety authorities during the reporting period? In the period under review, the County Sanitary Inspectorate carried out inspections to assess the sanitary and technical condition of facilities, health conditions in the work environment, including exposure to asbestos, exposure of staff to harmful agents, records of occupationally exposed workers. Report on carcinogens and mutagens. Inspection dates: April 2nd 2019; November 13th 2019. Following the inspections, no orders were issued.

113 How many inspections did you Number: 3 Please provide details of these visits, including receive from the labour authorities number and nature of any violations found: during the reporting period?

In the period under review, the National Labour Inspectorate (PIP) carried out two inspections in connection with work related to removal of roofing materials from outbuildings. No injunctive decisions were issued. Inspection dates: September 27th, 30th 2019; October 17th, 28th 2019;

Following a severe accident which took place on June 1st 2019, a post-accident investigation was conducted, the accident report covers inspections of: June 1st, 3rd;July 10th;August 1st, 7th, 12th, 27th; September 10th, 11th, 18th, 23rd, 24th, 26th, 28th 2019; the report contained orders to:  Mark the edge of the road for trolleys at the Chemical Treatment Plant,  Secure a process sump at the Chemical Treatment Plant,  Withdraw a working platform from use due to its poor technical condition.

114

Have these visits resulted in any Yes [X] If Yes, please describe, including status of penalties, fines and/or corrective No [ ] implementing corrective actions to address any action plans? violations found:

1. Following an inspection carried out on September 16th 2019 by the State Fire Service – Municipal Command of the State Fire Service in Tarnów, in connection with the identified failure to update the fire safety instructions for the ‘Za Rzeką Biała’ landfill site, administrative proceedings were launched to order remedying of the violation.

Steps were duly taken to remedy the infringement. By a letter of November 6th 2019, Ref. No. RZ/2618/ZS/269/2019, the Company submitted updated fire safety instructions for the ‘Za Rzeką Biała’ landfill site to the Municipal Command of the State Fire Service in Tarnów.

115 Has the Company engaged any Yes [ ] If Yes, please state for which types of work, and contractors for project-related work No [X] how the Company has monitored the compliance in the reporting period? of contractors with EBRD Performance Requirements and the Environmental and Social Action Plan:

Were any violations found as a result Yes [ ] If Yes, please provide details, including how the of these actions that were the No [X] Company is ensuring that corrective actions are responsibility of external contractors implemented by the contractor? engaged by the Company? Have any operations been reduced, Yes [ ] If Yes, please describe: temporarily suspended or closed down No [X] due to environmental, health, safety or labour reasons? Please describe any environment or social programmes, initiatives or sub-projects undertaken during the reporting period to improve the Company's environmental or social performance and/or management systems: - Please indicate the level of associated expenditure (capital expenditure and operating expenditure), and whether this relates to the requirements of the Environmental and Social Action Plan, or to any other initiative: -

4. Environmental Monitoring Data for each of the key subsidiaries The information required in this section can be extracted from a CSR report, or a full CSR report can be attached. Please provide the name and contact Dagmara Dalida details for your environmental Email: [email protected] manager: Tel.: (+48) 698 930 317; 14/637 27 30 extension 26 Parameter2 Amount3 Unit Compliance Status4 Comments5 Wastewater Decision by the Director of the Decision granting a Regional Water Management water-law permit Authority in Kraków dated August 2nd for special use 2018, No. of water – : KR.RUZ.4211.31.2018.AS discharge of , as amended. wastewater from the ‘Za Rzeką Biała’ landfill site (Outlet II) to the Biała river. Total wastewater 19,520 m3 Biochemical 34.74 kg Oxygen Demand (BOD5) Chemical Oxygen 882.30 kg Demand (COD) Suspended solids 154.20 kg Phosphorus - - Total nitrogen 52.50 kg Heavy metals 0.156 kg [Other]

116 Air Per each Mg/Nm3 - Notification concerning Paint shop – emissions major gas cylinder certification chamber, point made by letter Ref. No. source RZ/3528/ZS/267 of October 30th 2014,

- Notification concerning Chemical Wastewater Treatment Plant, SO2 storage, tanker unloading/cylinder and container loading installations, made by letter Ref. No.: RZ/4096/ZS/160/2012 dated September 12th 2012,

- Decision by the Governor of the Opole Province dated December 13th 2006 (No. ŚR.III.AS- 6610-1-30/06, as amended) − integrated (IPPC) permit for installations manufacturing, with the use of chemical processes, organic chemistry products or semi-finished products, i.e. WAXES, MELAMINE RESIN and VARIOUS ORGANIC PRODUCTS in Kędzierzyn- Koźle.

SO2 0.0904 Mg Nitrogen oxides 0.02047 Mg (NOX) Total PM 0.0409708 Mg

CO2 174.2245 Mg Carbon monoxide 0.3484755 Mg (CO) Other parameters Mg Non-methane 0.0799 Mg volatile organic compounds (NMVOCs) Ammonia 0.0807 Mg Particulate matter 0.00067 Mg PM10 Particulate matter 0.00020 Mg PM2.5 Ethylene glycol 0.000041 Mg Formaldehyde 0.000621 Mg Methanol 0.000128 Mg Methane 75.994 Mg Furfuryl alcohol 0.000122 Mg [Other] - - Solid waste Please provide details of the types and amounts of solid wastes generated by the project. Indicate where wastes are classified as hazardous. Indicate the final re-use, recycle or disposal method for each waste type.

117 Types and amounts of waste generated in 2019 (aggregate data)

Weight of waste generated Waste No. Waste type [Mg] code Weight Disposal method of waste Animal-tissue waste classified as material of specific Transferred 1. 02 02 81 and high risk, including waste from 0.20 to a third manufacture of meat and bone fodders other party than those mentioned in 02 02 80 Solid salts and solutions other than those 2. 06 03 14 20.40 Same as above mentioned in 06 03 11 and 06 03 13 3. 06 07 04* Solutions and acids 0.500 D9 4. 06 10 02* Wastes containing hazardous substances 19.54 D9 Bottom ash, slag 5. 10 01 15 and boiler dust from co-incineration other 9,013.64 R3, R5 than those mentioned in 10 01 14 Transferred Paper and 6. 15 01 01 0.32 to a third cardboard packaging party 7. 15 01 02 Plastic packaging 9.28 Same as above 8. 15 01 03 Wooden packaging 0.14 Same as above 9. 15 01 04 Metallic packaging 3.76 Same as above 10. 15 01 05 Composite packaging 12.200 Same as above Packaging containing residues of or 11. 15 01 10* 3.373 Same as above contaminated by hazardous substances absorbents, filter materials (including oil filters not otherwise specified), wiping cloths, 12. 15 02 02* 0.007 Stored protective clothing contaminated by dangerous substances (e.g. PCB) Transferred 13. 16 01 03 End-of-life tyres 2.800 to a third party Discarded equipment containing hazardous 14. 16 02 13* components other than those mentioned 0.008 Same as above in 16 02 09 to 16 02 12 Discarded equipment other than that 15. 16 02 14 0.193 Same as above mentioned in 16 02 09 to 16 02 13 Components removed from disused equipment 16. 16 02 16 0.007 Same as above other than those mentioned in 16 02 15 Laboratory chemicals (e.g. chemical reagents) consisting of or containing 0.046 17. 16 05 06* dangerous substances, including mixtures of D9

laboratory chemicals 18. 16 07 09* Wastes containing hazardous substances 16.500 Storage 19. 16 07 99 Wastes not otherwise specified 8.200 D9 Transferred 20. 17 04 05 Iron and steel 11.147 to a third party Mixture of concrete, bricks, tiles and ceramics 21. 17 01 07 16.08 R5 other than those mentioned in 17 01 06 Transferred Insulation materials other than those 22. 17 06 04 0.940 to a third mentioned in 17 06 01 and 17 06 03 party

118 23. 17 06 05* Construction materials containing asbestos 97.43 D5 Other wastes containing viable pathogenic microorganisms or their toxins, as well as other entities capable of transferring their genetic material, which are known or Transferred 24. 18 02 02* 2.194 reasonably believed to cause disease in people to a third or other living organisms party

Stabilised wastes other than those mentioned 25. 19 03 05 222.08 D5 in 19 03 04 Stabilised sludge from treatment of municipal 26. 19 08 05 9,682.28 R3,R5 wastewater Sludges from non-biological treatment of industrial wastewater other than those 27. 19 08 14 61.60 D5 mentioned in 19 08 13 Other wastes (including mixtures of materials) from mechanical treatment of wastes other 28. 19 12 12 than those mentioned in 19 12 11 78.16 D5

*hazardous waste

5. Resource Usage and Product Output Measu Parameter Amount remen Comments6 t Unit Fuels used Crude oil - - Natural gas 10,552 m3 Hard coal 2 Mg Lignite - - Grid electricity 2,067,228 kWh Heat purchased from external 4,331 GJ sources Feedstocks and raw materials used Paraffin ltp 56/25 2 Mg Polyethylene 0.115 Mg

Urea 53.27 Mg Nafol 1.785 Mg Nansa 14.42 Mg Rosulfan (Sodium Lauryl Sulfate) 21 Mg Irgamet 0.088 Mg Butyl glycol 13.545 Mg Phosphoric acid 0.02 Mg Triethanolamine 1.15 Mg Monoethylene glycol 13.18 Mg Lauric acid 0.65 Mg ABS paste 1.92 Hydrogen peroxide 11.175 Mg Disodium versenate 0.0549 Mg Ammonia water 49.618 Mg Soda lye 14.97 Mg Premelange 0.665 Mg Nitric acid 60% 11.768 Mg Premix arvo 0.661 Mg

119 Sodium hydroxide 0.06 Mg Aluminium sulfate 0.54 Mg Yellow dextrin 10.2 Mg Kaolin 12.1 Mg H-40 hardener 6.24 Mg Formalin 2.32 Mg Petrolatum 4.182 Mg N-100 base oil 3.876 Mg T rofamin 1.53 Mg T 190 walloxen 0.204 Mg 09 wax 0.102 Mg P1801 stearic acid 0.306 Mg Topcoat paint 80 kg Primer 20 kg Solvent 20 kg Petroleum ether 15 kg Hardener 8 kg

Product output DE-EMIS 259.5 Mg PROTEKTOL SAT 175 Mg BASO 960E 16.31 Mg ARVONITRASEPT 13.18 Mg H-50 HARDENER 20.28 Mg H-55 HARDENER 20.44 Mg IXONOL-5 6.3 Mg PP-0 wax 2.11 Mg Casting resin 19.78 Mg Anti-caking agent 10.24 Mg

6. Human Resources management

Please provide the name and contact details for Katarzyna Kokoszka, your Human Resources manager: HR Officer [email protected] Recruited in this Terminated in this Total reporting period reporting period Number of direct employees: 259 24 10

Number of contracted 0 0 workers: 2 Were there any collective Yes [ ] If Yes, please describe the redundancy plan, redundancies during the reporting No [X] including reasons for redundancies, number of period? workers involved, how they were selected, consultation undertaken, and measures to mitigate the effects of redundancy: Are any redundancies to the Yes [ ] If Yes, please describe the redundancy plan, workforce planned for the next No [X] including reasons for redundancies, number of year? workers involved, and selection and consultation process: Were there any changes in trade Yes [ ] If Yes, please provide details, and summarise union representation at Company No [X] engagement with trade unions during reporting plants during the reporting period: period?

120 Were there any other worker Yes [ ] If Yes, please provide details representatives (e.g. in the No [X] and summarise engagement with them during absence of a trade union)? reporting period: Were there any changes in the Yes [ ] If Yes, please provide details: status of Collective Agreements? No [X] Have employees raised any Yes [ ] If Yes, please state how many, split by gender, grievances with the project during No [X] summarise the issues raised in grievances by male the reporting period? and female staff and explain how the Company has addressed them: Have employees raised any Yes [ ] If Yes, please state how many, split by gender, complaints about harassment or No [X] summarise the issues raised by male and female bullying during the reporting staff and explain how the Company has addressed period? them: Have there been any strikes or Yes [ ] If Yes, please summarise nature of, and reasons for, other collective disputes related No [X] disputes and explain how they were resolved: to labour and working conditions at the Company in the reporting period? Have there been any court cases Yes [ ] If Yes, please summarise the issues contested related to labour issues during the No [X] and outcome: reporting period? Have there been any changes to Yes [X] If Yes, please give details, including of any new the following policies or terms No [ ] initiatives: and conditions during the reporting period in any of the following areas: - An agreement on pay rates for 2019, dated April  Trade union recognition 2nd 2019 – the agreement provided for a PLN 250 on  Collective Agreements average gross increase in base pay per employee  Non-discrimination and equal starting from April 1st 2019. opportunities for all  Equal pay for equal work  Gender equality  Bullying and harassment, including sexual harassment  Employment of young workers under 18  Wages and salaries (for regular and overtime hours)  Overtime  Working hours  Flexible working / work-life balance  Grievance mechanism for workers  Health & safety

7. Occupational Health and Safety Data Please provide the name and Edyta Bączek contact details for your Health email: [email protected] and Safety manager: Tel.: (+48) 887 706 555; /14/ 63 72 730 extension 43 Direct Contracted Direct Contracted employees workers employees workers

121 Number of man- hours worked in 418,500 0 Fatalities7: 0 0 this reporting period: Budget spent on Number of OHS in this period 0 disabling 1 0 (total amount and PLN 399,074 injuries: currency): OHS training Number of Lost provided in this Time Incidents 151 0 2 0 period in person- (including days: vehicular): Number of lost Number of cases workdays 196 0 of occupational 0 0 resulting from disease: incidents: Number of sick 0 0 days: Accident causes (falling, heavy loads, struck by object, contact with energy source etc.): 1.Leg injury due a misstep/loss of balance – 1 accident. 2. Permanent injury to both hands, sustained while handling a hazardous substance, severe accident. Please provide details of any fatalities or major accidents that have not previously been reported to EBRD, including total compensation paid due to occupational injury or illness (amount and currency): On June 1st 2019, an accident took place classified as severe. As a result of the accident, both hands of the affected employee were permanently injured. The accident happened during removal of chemical substance remains. In 2019, the Company did not pay any compensation.

Please summarise any emergency prevention and response training that has been provided for company personnel during the reporting period: The training was carried out by staff managers as part of monthly scheduled job re-training sessions.

Please summarise any emergency response exercises or drills that have been carried out during the reporting period: Industrial accident simulation performed on November 7th 2018 related to a leakage from a sulfuric acid storage and distribution tank, causing risk of eye injuries, skin burns, respiratory burn injuries and environmental contamination. Measures taken: The coordination of the chemical rescue unit with the Company Fire Brigade in case of an uncontrolled escape of class 8 hazardous material from a storage tank was checked. Personal protective equipment was used – gas masks, compressed air breathing apparatus, protective glasses, and acid-resistant clothing; and a protection zone was designated. Measures were also implemented in accordance with the sulfuric acid data sheet (SDS). The measures taken were assessed as effective.

8. Stakeholder Engagement Please provide the name and contact details for your external relations or community engagement manager: Please provide information on the implementation of the Stakeholder Engagement Plan agreed with EBRD and summarise interaction with stakeholders during the reporting period, including:  meetings or other initiatives to engage with members of the public or public organisations during the reporting period  information on environmental protection, social policy and safety matters provided to the local community and other stakeholders during the reporting period:  coverage in the media:  interaction with any environmental or other community groups. Please describe any changes to the Stakeholder Engagement Plan agreed with EBRD:

122 How many complaints or grievances did the project receive from members of the public or civil society organisations during the reporting period? Please split by stakeholder group. Summarise any issues raised in the complaints or grievances and explain how they were resolved:

9. Community Development Please summarise any social or community development / investment initiatives undertaken by the company during the reporting period, and any associated expenditure:

123 ENVIRONMENTAL AND SOCIAL ACTION PLAN

Table 0.1 Wisła Project, Grupa Azoty Poland – Environmental, Social, Health and Safety (ESHS) matters, Updated (Alchemist Project) Action Plan:

GRUPA AZOTY JRCH SP. Z O.O.

8. Actions required to maintain compliance with EHS requirements of national law and EU environmental standards − JRCh Jednostka Ratownictwa Chemicznego (Tarnów/Kędzierzyn) No. Action Environmental risks, liabilities/benefits Legislative Requirement Scheduled Target and Comments requirements/B /Resources completion – evaluation criteria est practice action to be for implementation completed by end progress of year 8.1 Monitoring environmental Record consumption of raw materials, fuels Legislative Internal Ongoing/ad-hoc Summary in the impacts of the operating and energy, air emissions, water obligation, best resources and periodic annual report for production unit (Chemzak in consumption, and amounts of generated practice/interna reports the Bank Kędzierzyn) waste l resources Reference to BAT requirements. Regularly evaluate operational efficiency to minimise resource consumption and waste generation Information: Consumption of raw materials, fuels and energy, air emissions, water consumption, and amount of generated waste are recorded. The process units are regularly evaluated for efficiency to minimise raw material consumption and waste generation. The environmental impact of the process units is monitored in accordance with the integrated (IPPC) permit.

Requirements: - Decision by the Governor of the Opole Province dated December 13th 2006 (No. ŚR.III.AS-6610-1-30/06, as amended) − integrated (IPPC) permit for installations manufacturing, with the use of chemical processes, organic chemistry products or semi-finished products, i.e. WAXES, MELAMINE RESIN and VARIOUS ORGANIC PRODUCTS, located in Kędzierzyn-Koźle at ul. Mostowa 30H Decision valid for an indefinite term. - Decision by the Marshal of the Opole Province dated December 20th 2012 (No. DOŚ.7222.64.2012.HM) on change of the manager of the Company operating the above units from Chemzak Sp. z o.o. to GA JRCh Sp. z o.o., - Decision by the Marshal of the Opole Province dated May 10th 2016 (No. DOŚ-III.7322.21.2016.Aka) granting a water-law permit for introduction of industrial wastewater from the installations manufacturing, with the use of chemical processes, organic chemistry products or semi-finished products, i.e. WAXES, MELAMINE RESIN and VARIOUS ORGANIC PRODUCTS, into sewerage systems of Grupa Azoty S.A. Kędzierzyn – Koźle. Effective until May 9th 2020.

124 8.2 Monitor environmental impact Reduce negative environmental impact Legislative Internal Ongoing Summary in the of non-hazardous waste landfill requirements, resources annual report for sites and prepare a programme best and the Bank of their management investments closure and restoration (‘Czajki I practices, II’, ‘Za Rzeką Biała’) Bank's PRs

125 Information: Reduce negative environmental impact: - on air quality:  maintaining transport roads clean,  proper organisation of extraction work,  sprinkling transport roads with water during periods of high temperatures to suppress dust. - on noise pollution:  limiting transport vehicle traffic and machine operation at the landfill site to a necessary minimum,  using only equipment in good working order,  carrying out extraction activities during daytime only. - on groundwater:  maintaining sludge supernatant pumping house in continuous working order,  maintaining drains, culverts, perimeter trenches, and drainage systems in good condition. The environmental impact monitoring of the ‘Czajki I and II’ and ‘Za Rzeką Biała’ landfill sites is carried out in accordance with the integrated (IPPC) permits. Remediation of: - separated section of the Czajki I western cell within the ‘Czajki I and II’ landfill site, - AB-2 sector of the ‘Za Rzeką Biała’ landfill site. Requirements: - Decision by the Governor of the Kraków Province dated April 27th 2007, No. ŚR.XI.AJ.6663-11-06, as amended, granting an integrated (IPPC) permit for the ‘Czajki I and II’ landfill site. Decision valid for an indefinite term. - Decision by the Marshal of the Kraków Province dated December 23rd 2016, No. SR-III-1.7241.42.2016.AG, as amended, approving the operation manual for the ‘Czajki I and II’ landfill site.

- Decision by the Governor of the Kraków Province dated April 25th 2007, No. ŚR.XI.AJ.6663-6-06, as amended, granting an integrated (IPPC) permit for the ‘Za Rzeką Biała’ landfill site. Decision valid for an indefinite term. - Decision by the Marshal of the Kraków Province dated August 20th 2018, No. SR-III.7241.29.2018.AG, approving the operation manual for the ‘Za Rzeką Biała’ landfill site. - Decision by the Marshal of the Kraków Province dated December 18th 2013, No. SR-IV.1.7322.1.32.2013.MG, granting a water-law permit for discharge of rainwater and meltwater into Rów Chyszowski. Permit effective until December 31st 2023. - Decision by the Director of the Regional Water Management Authority in Kraków dated August 2nd 2018, No. KR.RUZ.4211.31.2018.AS, as amended, granting a water-law permit for special use of water – discharge of wastewater from the ‘Za Rzeką Biała’ landfill site (Outlet II) to the Biała river, - Decision by the Director of the Regional Water Management Authority in Kraków dated July 15th 2019, No. KR.RUZ.421.1.95.2019.AS, granting a water-law permit to discharge groundwater drained from the Klikowa district through a ditch outlet (Outlet II) to the Biała river. Permit valid for a period of 10 years from the date on which the decision became final.

126 8.3 Monitor environmental impact Reduce negative environmental impact Legislative Internal Final closure Summary in the of the old hazardous waste requirements, resources and annual report for landfill site Design document/(technical and financial) best and implementati the Bank and prepare a programme for its concept for planned restoration with a management investments on of the restoration (‘AN II’ landfill) future monitoring programme practices, restoration Bank's PRs programme: Information: The environmental impact monitoring of the ‘AN II’ landfill site is carried out in accordance with the integrated (IPPC) permit. Requirement: - Decision by the Governor of the Kraków Province dated May 24th 2007, No. ŚR.XI.AJ.6663-10-06, as amended, granting an integrated (IPPC) permit for the ‘AN II’ hazardous waste landfill site. Decision valid for an indefinite term. - Decision by the Marshal of the Kraków Province dated February 10th 2015, No. SR-III-1.7241.21.2014.AG, as amended, approving the operation manual for the ‘AN II’ landfill site.

127 CERTIFIED TRANSLATION FROM POLISH

Annual Environmental & Social Report

1. Information about the Company Company Name: Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. Company Address: Grzybów 28-200 Staszów Country: Poland Town/Location: Staszów, Kielce Province Company authorised representative: Zbigniew Snopkiewicz I certify that the data contained in this report completely and accurately represents the Company’s operations during the reporting period. Signature: Zbigniew Snopkiewicz Title: Member of the Management Board Date:8 th April 2020 Contact Details: Telephone: (+48) 15 86 49 208 Mobile: (+48) 723 440 006 Email: [email protected]

Please provide key data on the Company performance, as well as production levels at each plant. For each of the 7 large plants please provide:

Item Cumulative

[PLN ‘000] 2018 2019

Revenue 304,431 236, 018 Profit/(loss) on -25, 348 sales 28,011

EBIT 28,792 - 33,101

EBITDA 49,347 -11,438

Net profit/(loss) 35,015 -35,290

Key performance indicators in terms of energy consumption, emissions, use of natural resources, and carbon dioxide emissions;

Number of staff employed and any change in employment over past 3 years

As at Dec 31 As at Dec 31 As at Dec 31 2017 2018 2019 Number of direct employees: 777 797 848 Number of contracted workers: - - -

Provide information on permits and each subsidiary’s compliance status with IPPC/IED (Integrated Pollution Prevention and Control Directive/Industrial Emissions Directive)

128

Reporting period: 2019

2. General Is the project materially compliant Yes [ ] If No, please provide details of any material with all relevant EBRD Performance No [ ] non-compliances: Requirements (taking account of agreed action plans, exemptions or Not applicable derogations)? Is the project materially compliant Yes [ ] If No, please provide details of any material with all applicable environmental and No [ ] non-compliances: social laws and regulations? Not applicable Have there been any accidents or Yes [ ] If Yes, please describe, including details of incidents that have caused damage to No [X] actions to remedy and prevent reoccurrence: the environment, brought about injuries or fatalities, affected project labour or local communities, affected cultural property, or created liabilities for the Company? Have there been any changes to Yes [ ] If Yes, please describe: environment, social, labour or health No [X] and safety laws or regulations that have materially affected the Company? How many inspections did you receive Number: Please provide details of these visits, including from the environmental authorities number and nature of any violations found: during the reporting period? No inspections were carried out in 2019.

How many inspections did you Number: 1. In 2019, inspectors of the National receive from the health and safety 9 Labour Inspectorate (PIP) carried out authorities during the reporting one inspection period? at the Company, resulting in the issuance of five improvement notices (which the Company has complied with). 2. In 2019, inspectors of the National Sanitary Inspectorate (PIS) carried out three inspections, as a result of which no Decision was issued. 3. In 2019, inspectors of the Regional Mining Authority carried out four inspections, as a result of which no Decision was issued. 4. In 2019, inspectors of the State Mining Authority carried out one inspection, as a result of which no Decision was issued.

How many inspections did you Number: receive from the labour authorities 0 during the reporting period? Have these visits resulted in any Yes [ ] penalties, fines and/or corrective No [ x] action plans?

129 Has the Company engaged any Yes [ ] contractors for project-related work No [ ] in the reporting period? Yes [ ] If Yes, please provide details, including how the Were any of the violations stated No [ x] Company is ensuring that corrective actions are above the responsibility of implemented by the contractor? contractors? Not applicable

Have any operations been reduced, Yes [ ] If Yes, please describe: temporarily suspended or closed down No [ x] due to environmental, health, safety or labour reasons? Please describe any environment or social programmes, initiatives or sub-projects undertaken during the reporting period to improve the Company's environmental or social performance and/or management systems:

Environmental initiative or sub-project: In 2018, Grupa Azoty Siarkopol S.A. implemented and obtained a certificate for its Management System compliant with PN-EN ISO 14001:2015 and PN-EN ISO 9001:2015 standards. The Certificates are valid until August 8th 2021. Social initiative:

CSR and sponsorship activities are frequently used by businesses as a means of promotion and support for local communities. Promoting the brand, building a positive image and undertaking initiatives directed at the Company’s major stakeholders are among key objectives pursued through CSR and sponsorship initiatives. These activities, carried out in a transparent manner and with the aim of delivering tangible promotional and image-building benefits, help both the sponsor and the sponsored party build value and convey a positive image. In 2019, an image-building strategy was implemented in connection with the Company’s plans to build a new sulfur mine in the Połaniec Municipality. The image-building initiatives consisted in public consultation, tours of and open-door days at the Osiek sulfur mine and presentation of the draft social agreement to the residents of the Połaniec Municipality.

There is no expenditure associated with the requirements of the Environmental and Social Action Plan; the expenditure relates to the Company's own initiative.

Not applicable

130 4. Environmental Monitoring Data for each of the key subsidiaries The information required in this section can be extracted from a CSR report, or a full CSR report can be attached.

Please provide the name and contact Head of Environmental Protection details for your environmental Elżbieta Molas, telephone: (+48) 15 86-49-192 manager: [email protected]

Parameter2 Amount3 Unit Compliance Status4 Comments5 Wastewater Chemical Plant Total wastewater 74,974 m3/year compliant Biochemical 2,151 kg/year compliant Oxygen Demand (BOD5) Chemical Oxygen 4,666 kg/year compliant Demand (COD) Suspended solids 1,573 kg/year compliant Phosphorus no data monitoring of this parameter is not available required Nitrates no data monitoring of this parameter is not available required Heavy metals monitoring of this parameter is not required [Other]

Air Per each Mg/year emissions major point source Chemical Plant

SO2 30.599 compliant Nitrogen oxides 43.580 compliant (NOX) Particulates 0.641 compliant

CO2 7,572.62 compliant Other parameters CS2 0.493 compliant Toluene 1.231 Mining Facility particulates 0.187 compliant

Other H2S 0.002 compliant parameters

Noise Daytime dB Acceptable values in accordance with the Analysis of Equivalent level of 39.5±2.4 permit: noise sound A over time 44.0±2.5 daytime: 55 dB emission T Night- night-time: 45 dB measurement time s taken at the 39.0±2.0 Chemical 38.3±2.1 Plant in 2019 [Other] Solid waste

Hazardous solid Quantity generated consistent with the waste integrated permits for the Chemical Plant (major types) in Dobrów and the sector permit for the Osiek Sulfur Mine

131 06 13 02* Spent activated Recovery 1.300 Mg carbon (except 06 method: R3 07 02) 15 02 02* Absorbents, filter materials (including oil filters not otherwise Recovery specified), wiping 0.041 Mg method: R1 cloths, protective clothing contaminated by hazardous substances (e.g. PCB) 16 01 07* Recovery 0.015 Mg Oil filters method: R4 16 02 13* Discarded equipment containing Recovery hazardous 0.420 Mg method: R12 components5) other than those mentioned in 16 02 09 to 16 02 12 16 05 06* Laboratory chemicals Disposal consisting of or 0.069 Mg method: D14 containing hazardous substances 01 05 07 Barite-containing drilling muds and Recovery wastes other than 553.740 Mg method: D5 those mentioned in 01 05 05 and 01 05 06 03 01 05 Sawdust, shavings, cuttings, wood, Recovery particle board and 0.398 Mg method: R12 veneer other than those mentioned in 03 01 04 06 06 03 Recovery Wastes containing 1.000 Mg method: R3 sulfides 15 01 02 Recovery 2.060 Mg Plastic packaging method: R1

132 15 02 03 Absorbents, filter materials, wiping cloths and Recovery 0.612 Mg protective clothing method: R1 other than those mentioned in 15 02 02 16 01 19 Recovery 0.375 Mg Plastics method: R12 16 01 99 Wastes not 0.145 Mg Recovery otherwise specified method: R12 16 02 14 Discarded equipment other 0.132 Mg Recovery than that method: R12 mentioned in 16 02 09 to 16 02 13 17 04 02 0.328 Mg Recovery Aluminium method: R4 17 04 05 153.770 Mg Recovery Iron and steel method: R4 19 09 05 9.560 Mg Recovery Saturated or spent method: R1 ion exchange resins Please provide details of the types and amounts of solid wastes generated by the project. Indicate where wastes are classified as hazardous. Indicate the final re-use, recycle or disposal method for each waste type.

Important note: Relates to waste quantities generated in connection with the Plant's operation – not applicable to the project

5. Resource Usage and Product Output (2019) Measureme Parameter Amount Comments6 nt Unit Fuels used Crude oil Natural gas 46,673.598 MWh Hard coal Lignite Grid electricity 29,420.358 MWh Joint purchases (Dobrów + Grzybów + Osiek area) Heat purchased 596,993.055 MWh Heat in hot water, supplied from the from external Połaniec Power Plant sources Used feedstocks and raw materials Name 1 Name 2 Product output Product 1 555,470 Mg S Product 2 6,473.965 Mg SN

133 6. Human Resources management Please provide the name and contact details for your Human Resources manager: Wiesław Jerzy Anioł Recruited in this Terminated in this Telephone: (+48) 15 86-49-260 Total reporting period reporting period [email protected] Number of direct employees: 801 17 68

Number of contracted - - - workers: Were there any collective Yes [ ] If Yes, please describe the redundancy plan, redundancies during the No [ x] including reasons for redundancies, number of reporting period? workers involved, how they were selected, consultation undertaken, and measures to mitigate the effects of redundancy: Are any redundancies to the Yes [ ] If Yes, please describe the redundancy plan, workforce planned for the No [ x] including reasons for redundancies, number of next year? workers involved, and selection and consultation process: Were there any changes in Yes [ ] If Yes, please provide details, and summarise trade union representation at No [X] engagement with trade unions during the reporting Company plants during the period: reporting period?

Were there any other worker Yes [ ] If Yes, please provide details and summarise representatives (e.g. in the No [x ] engagement with them during the reporting period: absence of a trade union)? Were there any changes in the Yes [ ] If Yes, please provide details: status of Collective No [x ] Agreements? Have employees raised any Yes [ ] If Yes, please state how many, split by gender, grievances with the project No [ x] summarise the issues raised in grievances by male during the reporting period? and female staff and explain how the Company has addressed them: Have employees raised any Yes [ ] If Yes, please state how many, split by gender, complaints about harassment No [x ] summarise the issues raised by male and female or bullying during the staff and explain how the Company has addressed reporting period? them: Have there been any strikes or Yes [ ] If Yes, please summarise nature of, and reasons for, other collective disputes No [x ] the disputes and explain how they were resolved: related to labour and working conditions at the Company in the reporting period?

134 Have there been any court Yes [X] If Yes, please summarise the issues contested cases related to labour issues No [ ] and outcome: during the reporting period? 1. Action brought by employer for recognition as unlawful of the contract termination pursuant to Art. 52.1.1 of the Polish Labour Code, payment of compensation, and rectification of the work certificate. The case is closed. By its judgment of November 29th 2018, the District Court of Sandomierz dismissed the claim brought by employer, charging him with court costs. On February 5th 2019, the plaintiff appealed against the judgment. By its judgment of October 2nd 2019, the Regional Court of Kielce reversed the judgment appealed against by the plaintiff and awarded an amount of PLN 21,060 from the Company to employer as compensation for unlawful termination of his employment contract without notice, along with statutory interest accrued from March 2nd 2018 to the payment date, as well as PLN 180 and PLN 150 to cover attorney costs incurred, respectively, in the first instance and second instance proceedings. The Court also ordered to charge the Company with an amount of PLN 1,053 as reimbursement of the court costs from which the plaintiff was exempted. 2. Action brought against the Company by employer for an increase in pension. The case is pending. In his claim, served on the Company on March 21st 2019, its former employee entitled to a pension awarded to him from the Company in connection with an accident he had suffered at work, demanded that the pension be increased from PLN 2,000 to PLN 4,000, and that an amount of PLN 70,000.00 be additionally awarded for his benefit as compounded pension instalments for the period from February 2016 to December 2018.

The District Court of Sandomierz – following the defendant’s allegation that it was not a competent venue – issued a decision declaring its lack of competence and referred the case to the Regional Court of Kielce.

The case was referred to the Regional Court of Kielce as the competent court.

The date of the hearing was scheduled for March 6th 2020.

135

Have there been any changes Yes [ ] If Yes, please give details, including of any new to the following policies or No [x ] initiatives: terms and conditions during the reporting period in any of the following areas:  Trade union recognition  Collective Agreements  Non-discrimination and equal opportunities for all  Equal pay for equal work  Gender equality  Bullying and harassment, including sexual harassment  Employment of young workers under 18  Wages and salaries (for regular and overtime hours)  Overtime  Working hours  Flexible working / work- life balance  Grievance mechanism for workers  Health & safety

7. Occupational Health and Safety Data Please provide the name and Michał Markiewicz – Head of the OHS and Environmental contact details for your Health Protection Centre and Safety manager: Telephone No. (+48) 15 864 9420, Mobile (+48) 784 025 659 [email protected]

Direct Contracted Direct Contracted employees workers employees workers Number of man- 1,401.8 Number of 0 hours worked in thousand fatalities 7: this reporting period: Budget spent on PLN 1,146.0 Number of 0 OHS in this period disabling (total amount and injuries: currency): OHS training 71 training Number of Lost provided in this sessions Time Incidents 6 period in person- for 496 (including days: employees vehicular): Number of lost Number of cases workdays 170 of occupational resulting from disease: incidents: Number of sick days:

136 Accident causes (falling, heavy loads, struck by object, contact with energy source etc.): - burst of a metal-cutting disc used for grinding by the injured person, - lack of safe operation instructions for the operator of a battery-powered angle grinder, - improper passage, access path (a concrete slab defect resulting in a level difference between concrete slabs), - hitting the head against a wall while unprotected with a hard hat, - reckless haste at work, - taking a wrong access path to the duty staff room of the lime processing unit, - employee supervisor’s ignoring OHS non-conformance.

Please summarise any emergency prevention and response training that has been provided for Company personnel during the reporting period: None was provided.

Please summarise any emergency response exercises or drills that have been carried out during the reporting period: Mining rescuers designated by the employer are drilled every two months to ensure they are prepared to respond to an emergency (fire, explosion, hot substance spill). The chemical rescue team of the Chemical Plant were drilled once a quarter to improve their ability to respond to an emergency (fire, explosion, hazardous substance leakage/spill). All chemical rescuers also underwent test drills at the Grupa Azoty Rescue Education Centre. Moreover, every year State Fire Service officers perform inspection and examination activities at all of the Company's plants.

8. Stakeholder Engagement Please provide the name and contact details Not applicable for your external relations or community engagement manager: Please provide information on the implementation of the Stakeholder Engagement Plan agreed with EBRD and summarise interaction with stakeholders during the reporting period, including:  meetings or other initiatives to engage with members of the public or public organisations during the reporting period  information on environmental protection, social policy and safety matters provided to the local community and other stakeholders during the reporting period:  coverage in the media:  interaction with any environmental or other community groups. Please describe any changes to the Stakeholder Engagement Plan agreed with EBRD:

Grupa Azoty Siarkopol has no Stakeholder Engagement Plan.

There were no such issues.

137 9. Community Development Please summarise any social or community development / investment initiatives undertaken by the Company during the reporting period, and any associated expenditure:

 In 2019, the Company donated grants of PLN 92,550, e.g. to support the activities of Voluntary Fire Brigades, an association, a kindergarten and a school. Most of the financial assistance was extended to individuals in difficult circumstances.  In 2019, the Company allocated PLN 16,000 to sponsorship, including sponsorship of amateur (group and individual) sports, cultural activities and social campaigns.

138 ENVIRONMENTAL AND SOCIAL ACTION PLAN

Table 0.1 Wisła Project, Grupa Azoty Poland – Environmental, Social, Health and Safety (ESHS) matters, Updated (Alchemist Project) Action Plan:

GRUPA AZOTY KOPALNIE I ZAKŁADY CHEMICZNE SIARKI SIARKOPOL S.A.

6. Actions required to maintain compliance with EHS requirements of national law and EU environmental standards – GRUPA AZOTY KOPALNIE I ZAKŁADY CHEMICZNE SIARKI SIARKOPOL S.A. No. Action Environmental risks, liabilities/benefits Legislative Requireme Scheduled Target and Comments requirements/ nt/Resourc completion – evaluation Best practice es action to be criteria for completed by implementation end of year progress 9.1 Monitoring of Reduce negative environmental Legislative Internal Ongoing/ad-hoc Summary in the environmental impact with impact in line with IED requirement and and periodic annual report for respect to gas and s, best external reports the Bank particulates emissions into managemen the air and quality of t practices, discharged effluents, as Bank's PRs well as assessment of the condition of surface water in the area covered by facilities for which an Integrated Pollution Prevention and Control (IPPC) permit is required.

139 Information

In 2019, the Chemical Plant in Dobrów continued to implement integrated environmental protection measures, taking into account applicable legal requirements, environmental protection standards and safety.

Legal requirements: The Chemical Plant's facilities operate on the basis of the following integrated (IPPC) permit and notification:

1. Decision of the Marshal of the Kielce Province Ref. No. OWŚ-VII.7222.5.2017 of August 31st 2017, as amended by Decision Ref. No. OWŚ- VII.7222.26.2019 of December 23rd 2019, granting an integrated (IPPC) permit for facilities producing sulfur insoluble in carbon disulfide, located at the Chemical Plant in Dobrów, rural district of Tuczępy. 2. Notification of a sulfur mill with a capacity of up to 2 Mg/h, emissions from which do not require a permit but must be notified. Not. card number 000080/2017.

Soil, ground and groundwater protection at the Chemical Plant is achieved by: - tight sealing of processes. Processes at the Chemical Plant are conducted in sealed devices made of materials suitable for the type of process media used, - use of systems in which tanks may be drained by pumps (in case of emergency), with their content directed to the network or another tank, - ensuring good technical condition of underground infrastructure to prevent leakage from interceptors, - application of impermeable materials (equipment and devices are placed on a concrete surface, with any leakage drained to the industrial wastewater system), - use of devices to measure and monitor the level of liquids in tanks, connected to a lock-out system, - identification of wastewater and its analysis in terms of quality and volume, - minimum amount of water used in the process (stripping and returning water back to protective cushions), - cooling with water from the closed-loop cooling water system, - maintaining good condition of surface water intake points and other equipment used to supply water to the plant for process and other purposes, - rational waste management system, - appropriate procedures for all operations associated with the handling and transport of liquids, - regular inspections of the technical condition of plant and equipment.

140 Environmental parameters are monitored in accordance with the requirements set out in integrated (IPPC) permits: - monitoring of pollutant emission levels. Measurement of concentrations and emissions of sulfur dioxide (SO2), carbon disulfide (CS2) and toluene from the plant's emission source (twice a year) and of SO2, NO2 and particulates content in flue gas emissions from the plant’s CCGT unit (at least once a year) by an accredited laboratory. - monitoring of the amount and quality of surface water drawn from the Czarna Staszowska river, - surface water quality tests performed in the section starting in Oględów, in ducts located above and below the channel outlet, in terms of parameters specified in the applicable decision; frequency: once every two months, - industrial wastewater quality tests performed at the interceptor outlet to the open channel, in terms of pollution parameters specified in the applicable decision; frequency: once every two months, - regular measurements of noise generated by the plant during day- and night-time, so as to determine and analyse the impact of noise on the environment in the immediately surrounding area protected from noise, - monitoring and recording of waste, in accordance with law. Safety: The Chemical Plant has a Safety Report, approved by the Commander in Chief of the State Fire Service in the Kielce Province by Decision Ref. No. WZ- 5586.1.16.2015, of October 26th 2015. Under the Decision, the plant's operator is ready to roll out a programme to prevent and manage industrial accidents, in accordance with the Internal Rescue Operation Plan.

9.2 Monitor environmental Reduce negative environmental Legislative Internal Ongoing/ad-hoc Summary in the impacts of mining operations, impacts in accordance with IED, and requirement and and periodic annual report for restoration of mining sites, implement measures expected by the s, best external reports the Bank and reclamation of post- local community. managemen mining land for use, in t practices, accordance with applicable Bank's PRs legal decisions and public needs.

141 Information: In 2019, the Osiek Sulfur Mine continued to implement integrated environmental protection measures, taking into account applicable legal requirements, environmental protection standards, safety, and the local community’s needs. The monitoring of environmental impacts of the Osiek Sulfur Mine covers: surface protection, restoration of post-mining sites, waste management, water and wastewater management, protection of surface water and groundwater, and air pollution control. Measures taken to eliminate negative environmental impacts of mining activities on the ground's surface include: safety pillars and designation of mining protection areas, eruption prevention measures, and measurements of ground subsidence. Restoration of post-mining sites Given the terrain in the Osiek deposit area, which includes a low and high terrace, and the earlier ground subsidence, restoration models other than agriculture, afforestation and tree planting need to be determined. This applies in particular to the Vistula valley forming the lower terrace. The ‘Legal and environmental study for the restoration of the Osiek mining sites’, prepared in 2011 at our request by Stanisław Staszic's Scientific Association of Kraków (Stowarzyszenie Naukowe im. Stanisława Staszica w Krakowie), proposes an afforestation/tree planting/water restoration model for the lower terrace, with an option of creating natural water reservoirs in areas with a considerable degree of subsidence. This will be possible after full discontinuation of mining work in the high terrace. The mine currently holds the following decisions determining the possible land restoration models: - Decision No. G.II-6012/3/96 of July 5th 1996, determining the afforestation model for restoration of 16.30 hectares of land in the area of former A-1 and A-2 control rooms. - Decision No. G.III-6019/8/2003 of August 26th 2003, determining the afforestation model for restoration of 28.9668 hectares of land situated in Mikołajów and in Osiek - cadastral district No. 2 (formerly Osieczko), and the agricultural model for reclamation of 1.2210 hectares of land. - Decision No. OŚ.II-6019/4/2010 of April 6th 2010, determining the afforestation model for restoration of 20.50 hectares of land situated in Mikołajów and 10.3996 hectares in Osiek - cadastral district No. 2, and the tree planting model for restoration of land located in Mikołajów (89.04 hectares), in Osiek - cadastral district No. 2 (formerly Osieczko - 35.6894 hectares), and in the town of Osiek (1.46 hectares). - Decision No. OŚ.6122.8.2011.III.D of August 5th 2011, determining the tree planting model for restoration of 10.7138 hectares of land situated in Mikołajów.

- Decision No. OŚ.6122.6.2011.III.D of August 5th 2011, determining the agricultural model for reclamation of 7.91 hectares of land situated in Trzcianka. - Administrative ruling of the Staszów County Head No. OŚ.6122.8.2011.III.D of March 21st 2012 concerning correction of a calculation error in Decision No. OŚ.6122.8.2011.III.D of August 5th 2011. - Decision No. OŚ.6122.7.2013.III.D of the Staszów County Head of August 26th 2013, determining the tree planting model for restoration of plot No. 961 with an area of 0.0576 hectare, situated in cadastral district No. 2 in Osiek. - Decision No. OŚ.6122.4.2014.III.D of the Staszów County Council of March 12th 2014, determining the tree planting model for restoration of plot No. 1087 with an area of 0.4798 hectare, situated in cadastral district No. 2 in Osiek.

- Decision No. OŚ.6122.11.2014.III.D of the Staszów County Council of August 6th 2014, determining the tree planting model for restoration of a part of plot No. 731/2 with an area of 0.3677 hectare, situated in cadastral district No. 2 in Osiek. - Decision No. OŚ-IV4.6122.5.2017 of the Staszów County Council of May 19th 2017, determining the afforestation model for restoration of 3.3426 hectares of land situated in Mikołajów.

- Decision No. OŚ-IV4.6122.11.2017 of the Staszów County Council of November 23rd 2017, determining the afforestation model for restoration of 23.3248 hectares of land situated in Pliskowola and the agricultural model for reclamation of 24.3977 hectares of land situated in Pliskowola and 0.4300 hectare of land situated in Trzcianka.

Under the above decisions, a part of plot No. 1438 with an area of 8.0580 hectares situated in cadastral district No. 2 in Osiek (the area of former A-1 and A-2 control rooms) was restored; Decision No. OŚ.6122.8.2013.III.D of September 6th 2013 regarding completion of the restoration process was obtained from the Staszów County Head; agricultural reclamation of 7.1318 hectares of land situated in Trzcianka was performed; and Decision No. OŚ.6122.13.2013.III.D of January 9th 2014 regarding completion of the restoration process was obtained. 142

Under Decision No. OŚ.II.6019/4/2010 determining the restoration model, and Decision No. OŚ.6237.1.2011.IIIB approving the closure of the waste drilling mud landfill site located in Mikołajów, restoration of the site was performed based on the relevant technical documentation. By Decision No. OŚ.6122.14.2014.III.D of November 7th 2014, the Staszów County Head determined that restoration of the waste drilling mud landfill site had been completed. The landfill site is currently in the after-care phase and is subject to monitoring in accordance with the Landfill Regulation of the Minister of Environment (Dz.U.2013.523) in terms of the ground subsidence area as well as the level and quality of groundwater.

Under Decisions No. G.III-6019/8/2003 and OŚ.II.6019/4/2010 on land restoration models, restoration was performed on land located in Osiek (cadastral district No. 2) and Mikołajów, with a total area of 8.5055 hectares, including:  Region No. 2 with an area of 2.9015 hectares, located in the area of the former A-5 control room (restoration by afforestation),  Region No. 3 with an area of 5.6040 hectares located east of the A-7R control room, between the pre-main route No. 3 and pre-main pipeline No. R-IV, (restoration by afforestation of 5.3473 hectares and restoration by tree planting of 0.2567 hectare); and Decision No. OŚ.6122.15.2016.III.D of December 16th 2016 was obtained from the Staszów County Head determining that the land restoration process had been completed. Under the decisions on restoration models, i.e. OŚ.II-6019/4/2010 and OŚ.6122.8.2011.III.D, the land restoration process was carried out within Region No. 4, located in Mikołajów and Osiek (cadastral district No. 02), with a total area of 21.7444 hectares; whereupon the Staszów County Head’s Decision No. OŚ.6122.17.2016.III.D of May 19th 2017 and the Staszów County Head’s Ruling No. OŚ.IV4.6122.10.2017 of July 20th 2017 were obtained determining that the land restoration process had been completed.

Rational waste management Management of waste, including mining waste from the Osiek Sulfur Mine, is in line with the applicable laws and administrative decisions issued by the Marshal of the Kielce Province: - Waste generation permit covering waste generated by the Sulfur Mine, dated December 31st 2014, Ref. No. OWŚ-VII.7221.2.44.2014, as amended by Decisions OWŚ-VII.7221.2.23.2015 of August 13th 2015 and OWŚ-VII.7221.2.7.2017 of June 8th 2017. - Mining waste management programme, Decision No. OWŚ-VI.7240.1.1.2017 of March 27th 2017. - Permit No. OWŚ-VI.7240.6.1.2017 of August 3rd 2017 to operate a mining waste disposal facility. In compliance with the requirements of the Act on Mining Waste, Grupa Azoty Siarkopol reviewed its mining waste management programme. The adopted waste management, handling and storage methods have no adverse environmental impacts. The prescribed period for the storage of waste before its disposal is complied with. Waste is recorded in accordance with the Regulation of the Minister of Environment of December 12th 2014 on the form of waste records (Dz.U.2014.1973).

Annual results of the observations and their interpretation, together with attached maps, form the basis for a report on the impacts of mining activities on the rock mass and mining sites, drawn up by March 31st of the following year. If any impacts of mining activities on the quality of groundwater are identified, appropriate measures are taken to eliminate them. Such measures may include changes in the direction of extraction or use of protective barriers.

143 Surface water protection Protection of surface water in the area of the Osiek Sulfur Mine is based on: introduction of a closed-loop system for formation waters, eruption-free extraction of sulfur, introduction of a closed-loop system for sanitary and industrial wastewater, moving of watercourses and ditches outside the mining sites and changing their functions, regular testing of water quality in ditches and watercourses within the area of the mine. Following the introduction of a closed-loop system for formation waters, the mine does not discharge any wastewater to the environment. The quality parameters of surface waters are monitored once a month. The monitoring covers the following surface waters: the Wisła river and Ocieckie Lake, the watercourse from Pliskowola, the watercourse from Mikołajów, and the watercourse from Mucharzew and the Strzegomka river. Protection of groundwater Groundwater is protected based on a system of observations conducted in accordance with the 'Instruction for hydrogeological observations regarding the method, scope and frequency of observations, measurements and tests as well as their recording', approved by the Mine Operation Manager.

Air pollution control Air pollution control in the area of the Osiek Sulfur Mine is based on: - tight sealing of the decompression system and chemisorption installation for on-site sulfur tanks, - ongoing drainage of the area to prevent formation of pools which would emit hydrogen sulfide, - regular monitoring of H2S ambient concentrations. Measurements of H2S ambient concentrations in the area of the Osiek Sulfur Mine are performed at four points in Osiek, Osieczek, Pliskowola and Trzcianka. Since 2013, measurements of hydrogen sulfide ambient concentrations have been averaged for one-hour periods, in line with the regulations currently in effect. In the Decision of March 8th 2013, Ref. No. OWS VII.7221.1.12013, the Marshal of the Kielce Province repealed the earlier decision of the Governor of the Tarnobrzeg Province of March 12th 1993, Ref. No. OŚ-IIB-7644/7/93, with a later amendment of March 10th 1997, Ref. No. OŚ-II-7644/4/97/JM and the Kielce Province Governor’s decision of October 23rd 2003, Ref. No. ŚR.II.6610/1-3/03, imposing on Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. of Grzybów an obligation to monitor air pollutions within the site’s impact area.

Environmental standards and needs of local communities Having regard to Art. 144 of the Environmental Protection Law and the provisions of Par.165 and 166 of the Regulation of the Minister of Economy dated April 25th 2014 on specific requirements for the operation of mining facilities producing minerals through wells (Dz.U.2014.812), the Osiek Sulfur Mine continues to monitor the ambient concentrations of hydrogen sulfide in Osiek, Osieczko, Pliskowola and Trzcianka, regardless of the decision issued by the Marshal of the Kielce Province abolishing the obligation to conduct air pollution monitoring in the area of the mine. The monitoring has been conducted since 1994, having provided extensive amounts of comparative data, which has proved very useful in resolving disputes with local authorities and residents. If mining operations are commenced in a section of the Osieckie Lake, an additional point for measuring hydrogen sulfide ambient concentration will be set up in the village of Lipnik.

144 CERTIFIED TRANSLATION FROM POLISH

Annual Environmental & Social Report

1. Information about the Company Company Name: GZNF FOSFORY Sp. z o.o. Company Address: ul. Kujawska 2, 80-550 Gdańsk Country: Poland Town/Location: Gdańsk Company authorised representative: Karol Żyłko I certify that the data contained in this report completely and accurately represents the Company’s operations during the reporting period. Signature:Karol Żyłko date 8th April 2020

Title: Vice President, CTO Contact Details: Telephone: (+48) 58 34 38 270 Email: [email protected]

Please provide key data on the Company performance, as well as production levels at each plant. For each of the 7 large plants please provide:

Item Cumulative 2017 2018 2019 [PLN ‘000] performance performance performance

Revenue 222,342 244,228 250,594

Profit/(loss) on sales 1,761 5,882 18,063 EBIT 2,124 6,324 18,845 EBITDA 14,025 18,193 31,639 Net profit/(loss) 2,979 4,957 13,888

Key performance indicators in terms of energy consumption, emissions, use of natural resources, and carbon dioxide emissions;

Number of staff employed and any change in employment over past 3 years

As at As at Dec 31 As at Dec 31 Dec 31 2017 2018 2019 Number of direct employees: 305 289 307 Number of contracted workers: 0 0 0

Provide information on permits and each subsidiary’s compliance status with IPPC/IED (Integrated Pollution Prevention and Control Directive/Industrial Emissions Directive)

145

Reporting period: 2019

2. General Is the project materially compliant If No, please provide details of any material non- with all relevant EBRD Performance Yes [X] compliances: Requirements (taking account of agreed action plans, exemptions or derogations)? Is the project materially compliant If No, please provide details of any material non- with all applicable environmental Yes [X] compliances: and social laws and regulations? Have there been any accidents or If Yes, please describe, including details of incidents that have caused damage No [X] actions to remedy and prevent reoccurrence: to the environment, brought about injuries or fatalities, affected project labour or local communities, affected cultural property, or created liabilities for the Company? Have there been any changes to If YES, please describe: environment, social, labour or health No [X] and safety laws or regulations that have materially affected the Company? How many inspections did you Please provide details of these visits, including receive from the environmental Number: 1 number and nature of any violations found: authorities during the reporting In May 2019, the Gdańsk Provincial Inspectorate period? for Environmental Protection (WIOŚ) inspected the closed phosphogypsum landfill site in Wiślinka. During the inspection, no violations were found with regard to any environmental regulations or administrative decisions for the closed phosphogypsum landfill site in Wiślinka.

How many inspections did you Please provide details of these visits, including receive from the health and safety Number: 1 number and nature of any violations found: authorities during the reporting period? In 2019, an inspection was carried out by the Border Sanitary and Epidemiological Inspection Station of Gdynia. No violations were found.

How many inspections did you Please provide details of these visits, including receive from the labour authorities Number: 1 number and nature of any violations found: during the reporting period? Following an inspection by the National Labour Inspectorate (PIP), no violations were found. Have these visits resulted in any If Yes, please describe, including status of penalties, fines and/or corrective No [X] implementing corrective actions to address any action plans? violations found:

146 Has the Company engaged any If Yes, please state for which types of work, and contractors for project-related work No [X] how the Company has monitored the compliance in the reporting period? of contractors with EBRD Performance Requirements and the Environmental and Social Action Plan:

If Yes, please provide details, including how the Were any of the violations stated No [X] Company is ensuring that corrective actions are above the responsibility of implemented by the contractor? contractors?

Have any operations been reduced, If Yes, please describe: temporarily suspended or closed No [X] down due to environmental, health, safety or labour reasons? Please describe any environment or social programmes, initiatives or sub-projects undertaken during the reporting period to improve the Company's environmental or social performance and/or management systems:

There were no such programmes, initiatives or sub-projects.

Not applicable.

Please provide the name and contact details Environmental Protection and Chemical Safety for your environmental manager: Officer Lidia Wilczewska-Treder Telephone: (+48) 58 343 383 12 Mobile: (+48) 669 600 394 [email protected]

147 Compliance Status4 Permissible level specified in Integrated (IPPC) Permit DROŚ- SO.7222.45.2013/2014.BA of August 1st 2014, as amended by Decision DROŚ- SO.7222.60.2014.EŻ of December Parameter2 Amount3 Unit 4th 2014 and Decision DROŚ- Comments5 SO.7222.81.2017.EŻ of August 24th 2018 issued by the Marshal of the Gdańsk Province

Wastewater

Most of the 26,532,000 m3/year Total wastewater m3/year wastewater is 9,740,679 No exceedance of permissible cooling water. limits was found.

Biochemical Oxygen Demand (BOD5) ---- mg/l -

None Chemical Oxygen Demand (COD) ---- mg/l -

Suspended solids 35 mg/l

No exceedance of the permissible average 26.1 mg/l None single measurement or average maximum 34.4 annual limits was found. Phosphorus GZNF FOSFORY Sp. z o.o. does - - not monitor phosphate levels in None industrial wastewater. Nitrates GZNF FOSFORY Sp. z o.o. does - - not monitor nitrate levels in None industrial wastewater. Heavy metals GZNF FOSFORY Sp. z o.o. does - - not monitor heavy metal levels in None industrial wastewater. Petroleum 15 mg/l hydrocarbons No exceedance of the permissible mg/l None single or average annual limits average 0.06 was found. maximum 0.19 pH

minimum 7.1 - . None maximum 8.3

Temperature 35 °C

No exceedance of the permissible maximum 31.8 °C None single measurement limits was

found.

148

Air emissions

Type of Major point Mg/year substance source

SO 157.40 Mg/year 2 Manufacture of No exceedance of the permissible None fertilizers 19.09 limits was found. 156.50 Mg/year Manufacture of No exceedance of the permissible None sulfuric acid 95.16 limits was found. No permissible limits have been Boiler house None 0.14 defined. Nitrogen oxides 88.98 Mg/year Manufacture of (NO ) No exceedance of the permissible None X fertilizers 38.63 limits was found. 3.40 Mg/year Manufacture of No exceedance of the permissible None sulfuric acid 1.67 limits was found. No permissible limits have been Boiler house None 0.37 defined. Particulates 35.13 Mg/year Manufacture of 35.50 Mg/year None fertilizers 20.62 No exceedance of the permissible limits was found. Fertilizer No permissible limits have been None compaction 0.16 defined. No permissible limits have been Boiler house None 0.20 defined. CO 2 No permissible limits have been Boiler house None 131.87 defined. Fluorine 6.16 Mg/year Manufacture of No exceedance of the permissible None fertilizers 0.44 limits was found. CO 8.94 Mg/year Manufacture of No exceedance of the permissible None fertilizers 6.30 limits was found. No permissible limits have been None Boiler house 0.04 defined. Sulfuric acid Manufacture of 12.18 Mg/year

sulfuric acid No exceedance of the permissible None 4.65 limits was found.

149 Other parameters

Noise emissions Process 41-51 [dB] Dayti downtime 47-50 [dB] me Production 52-60 [dB] Permissible noise levels for run 53-61 [dB] residential areas. Noise emissions from the GZNF facilities have no None Night Process 40-50 [dB] impact on the neighbouring time downtime 46-51 [dB] residential areas. Production 51-60 [dB] run 52-61 [dB]

Solid waste Waste type Quantity of Waste code generated waste

[Mg]

Wastes not otherwise specified 06 01 99 3.580 None (here: waste sulfur)

None Rubber waste from production 07 02 80 unit overhaul 19.523

None Mineral-based non-chlorinated

engine, gear and lubricating 13 02 05* 1.240 oils

s found.

Plastic packaging 15 01 02 None 32.920

None Wiping cloths, oil filters, and

protective clothing 15 02 02* 1.060 contaminated by oil

None Absorbents, filter materials, 15 02 03 wiping cloths (filter cloths) 0.300

Discarded equipment No exceedance of the permissible limits wa None containing hazardous components other than those 16 02 13* mentioned in 16 02 09 to 16 02 0.035 12 (fluorescent lamps and computer monitors) Discarded equipment other than that mentioned in 16 02 09 to 16 02 13 (computers, 16 02 14 None copy machines, fax machines 2.680 and other discarded electrical devices)

150 Components removed from discarded equipment other 16 02 16 None

No than those mentioned in 16 02 0.820 was

found.

e limits

ce ofce the 15 (electronic waste) exceedan

permissibl Laboratory chemicals consisting of or containing

hazardous substances, 16 05 06* None 0.012 including mixtures of laboratory chemicals

Ni-Cd batteries 16 06 02* None 0.000 Leachate Aqueous liquid wastes other generated at the than those mentioned in 16 10 landfill site and 01 − leachate from the 16 10 02 undergoing phosphogypsum landfill site in 8,234.00 recovery (R5) at a Wiślinka, undergoing recovery fertilizer at a GZNF production unit production unit Linings and refractories from None non-metallurgical processes 16 11 06 other than those mentioned in 0.000 16 11 05 Mixture of concrete, bricks, None tiles and ceramics other than 17 01 07 14.800 those mentioned in 17 01 06 Plastics 17 02 03 41.620 None None Aluminium 17 04 02 0.000 Steel from discarded None 17 04 05 equipment 595.016

Mixed metals 17 04 07 27.120 None

Cables other than those 17 04 11 None mentioned in 17 04 10 0.020 Insulation materials other than those mentioned in 17 06 01 and 17 06 04 3.060 None 17 06 03 Mixed construction and 17 09 04 4.440 None demolition wastes Please provide details of the types and amounts of solid wastes generated by the project. Indicate where wastes are classified as hazardous. Indicate the final re-use, recycle or disposal method for each waste type.

151

5. Resource Usage and Product Output Measureme Parameter Amount Comments6 nt Unit Fuels used: - fuel oil RG3 5,839 Mg

- light fuel oil 83,925 L

Crude oil Natural gas Not applicable Hard coal Lignite Grid electricity (from external provider) 20,285,91 kWh 2 Heat purchased from external Not applicable sources Feedstocks and raw materials consumed: phosphate rock from Morocco 68−69 63,219 Mg

phosphate rock from Algeria 0 Mg phosphate rock from Senegal 10,007 Mg ammonium sulfate 3,301 Mg ammonium sulfate IOS 18,501 Mg zinc sulfate 73 Mg anhydrous sodium sulfate 0 Mg granulated potassium chloride 6,699 Mg fine potassium chloride 44,733 Mg phosphoric acid from external sources 100% P2O5 13,075 Mg sulfuric acid from external sources 4,368 Mg borax 236 Mg crystalline magnesite R 30 2,809 Mg crystalline magnesite R 40 0 Mg liquid sulfur 31,503 Mg soda lye 858 Mg

152 ascorbic acid 2 Mg Product output:

SULFURIC ACID 92,167 Mg

SODIUM BISULFITE 1,692 Mg ENHANCED SUPERPHOSPHATE ‘SUPER-FOS-DAR 40’ 51,665 Mg ENHANCED SUPERPHOSPHATE 30 13,326 Mg AMOFOSKA 4-16-18 13,798 Mg AMOFOSKA 5-10-25+B 26,586 Mg AMOFOSKA 4-12-12+4 29,593 Mg AMOFOSKA Corn 4-10-22 7,478 Mg AMOFOSKA 4-10-28 + 2Mg 0 Mg AMOFOSKA 4-12-20 8,046 Mg Granulated potassium chloride 5,632 Mg

AMOFOSKA 5-12-28 0 Mg AMOFOSKA 3.5-10-24 4,753 Mg AMOFOSKA 5-10-22 0 Mg HOLIST PK 15-30 18,187 Mg HOLIST PK 16-28 7,477 Mg HOLIST PK 12-36 0 Mg HOLIST NK 10-31 960 Mg

6. Human Resources management Please provide the name and contact details for Violetta Wuczyńska your Human Resources manager: Head of the HR and Organisational Department telephone: (+48) 58 34 38 250 mobile: (+48) 669 600 426 Email: [email protected] Recruited in this Terminated in this Total reporting period reporting period Number of direct employees: 307 60 40 Number of contracted workers: 0 0 0

153 Were there any collective If Yes, please describe the redundancy plan, redundancies during the reporting No [X] including reasons for redundancies, number of period? workers involved, how they were selected, consultation undertaken, and measures to mitigate the effects of redundancy: Are any redundancies to the If Yes, please describe the redundancy plan, workforce planned for the next No [X] including reasons for redundancies, number of year? workers involved, and selection and consultation process: Were there any changes in trade If Yes, please provide details, and summarise union representation at Company No [X] engagement with trade unions during reporting plants during the reporting period: period? Were there any other worker If Yes, please provide details and summarise representatives (e.g. in the Yes [X] engagement with them during the reporting period: absence of a trade union)? On December 17th–December 18th 2019, elections were held for members of the Works Council. Were there any changes in the If Yes, please provide details: status of Collective Agreements? No [X]

Have employees raised any If Yes, please state how many, split by gender, grievances with the project during No [X] summarise the issues raised in grievances by male the reporting period? and female staff and explain how the Company has addressed them: Have employees raised any If Yes, please state how many, split by gender, complaints about harassment or No [X] summarise the issues raised by male and female bullying during the reporting staff and explain how the Company has addressed period? them: Have there been any strikes or If Yes, please summarise nature of, and reasons for, other collective disputes related No [X] disputes and explain how they were resolved: to labour and working conditions at the Company in the reporting period? Have there been any court cases related to labour issues during the No [X] reporting period?

154 Have there been any changes to If Yes, please give details, including of any new the following policies or terms No [X] initiatives: and conditions during the reporting period in any of the following areas:  Trade union recognition  Collective Agreements  Non-discrimination and equal opportunities for all  Equal pay for equal work  Gender equality  Bullying and harassment, including sexual harassment  Employment of young workers under 18  Wages and salaries (for regular and overtime hours)  Overtime  Working hours  Flexible working / work-life balance  Grievance mechanism for workers  Health & safety

7. Occupational Health and Safety Data Please provide the name and Tomasz Gardzioła contact details for your Health OHS Officer and Safety manager: Telephone: (+48) 669-600-416 Email: [email protected] Direct Contracted Direct Contracted employees workers employees workers Number of man- Number of

hours worked in fatalities 7: 508,249 - this reporting 0 0

period: Budget spent on Number of OHS in this period disabling (total amount and approx. PLN injuries: - currency): 338.9 thousand 0 0

OHS training Number of Lost provided in this Time Incidents - period in person- 215 (including 9 0 days: vehicular): Number of lost Number of cases workdays of occupational - resulting from 331 disease: 0 0 incidents: Sick time (hours): - 40,032

155 Accident causes (falling, heavy loads, struck by object, contact with energy source etc.): - fall from height - interrupted skin continuity - fall while moving - hand crushing – 1 accident (1 person) - interrupted skin continuity – 2 accidents (2 persons) - careless movement – 3 accidents (3 persons) - chemical burn – 1 collective accident (2 persons) - hot fluid scalding classified as thermal burn – 1 person

Please provide details of any fatalities or major accidents that have not previously been reported to EBRD, including total compensation paid due to occupational injury or illness (amount and currency): In 2019, there were no fatal or major accidents. Amount paid: PLN 1,300.00. Please summarise any emergency prevention and response training that has been provided for Company personnel during the reporting period: The GZNF health and safety function is not responsible for emergency management. Please summarise any emergency response exercises or drills that have been carried out during the reporting period: The GZNF health and safety function is not responsible for emergency management. In 2019, one fire evacuation drill was carried out at the PP Department – Packing Facility 4.

8. Stakeholder Engagement Please provide the name and contact details GZNF FOSFORY Sp. z o.o. does not employ an for your external relations or community external relations or community engagement engagement manager: manager. Tasks of the external relations or community engagement manager are performed by relevant units (OHS and Environmental Protection). Please provide information on the implementation of the Stakeholder Engagement Plan agreed with EBRD and summarise interaction with stakeholders during the reporting period, including:  meetings or other initiatives to engage with members of the public or public organisations during the reporting period  information on environmental protection, social policy and safety matters provided to the local community and other stakeholders during the reporting period:  coverage in the media:  interaction with any environmental or other community groups. Please describe any changes to the Stakeholder Engagement Plan agreed with EBRD: GZNF FOSFORY Sp. z o.o. has no CSR policy in place but, given its production activities, follows CSR objectives in its operations. How many complaints or grievances did the project receive from members of the public or civil society organisations during the reporting period? Please split by stakeholder group. Summarise any issues raised in the complaints or grievances and explain how they were resolved: No complaints were received.

9. Community Development Please summarise any social or community development / investment initiatives undertaken by the Company during the reporting period, and any associated expenditure: In 2019, GZNF FOSFORY was recovering phosphates from sewage sludge incineration ash classified as waste designated with code 19 01 14.

The initiative has reduced the volumes of waste transferred to the landfill site from the local sewage treatment plant.

156

GNZF FOSFORY Sp. z o.o.

ENVIRONMENTAL AND SOCIAL ACTION PLAN

7. Actions required to maintain compliance with EHS requirements of national law and EU environmental standards − GZNF Fosfory No. Action Environmental risks, liabilities/benefits Legislative Requireme Scheduled Target and Comments requirements/ nt/Resourc completion – evaluation Best practice es action to be criteria for completed by implementation end of year progress 7.1 Complete environmental risk Reduce negative environmental impact Legislative Internal End of 2013 - Risk assessment assessment for groundwater in line with IED and the Bank's PRs. requirements, resources prepare the and action plan. from historical landfill site. best and action plan and The landfill site is situated in a management external preliminary Summary of both Based on risk assessment and vulnerable location, which could result practices, the support budget. in the annual surveys, develop a plan for in contamination of deeper water Bank's PRs, EU report. long-term monitoring and reservoirs used by the Town. Environmental Contingent actions to reduce the risk of Liability liabilities/provis contaminating groundwater A comprehensive risk assessment must Directive ions in annual and water reservoirs. be performed, and the investment (ELD) financial projects must reduce impacts. General statements by Budget for the actions needs site restoration is needed and a landfill 2013. to be developed. site management system must be put in place. Risk assessment by 2017.

157 Note 1. The phosphogypsum landfill site in Wiślinka has been closed since December 31st 2009. It was closed pursuant to the Marshal of the Gdańsk s to Province's decision, and the process was carried out in accordance with closure plans providing for mechanised land restoration and in accordance 7.1 with a bioremediation plan. The closure was supervised by authorised technical experts and employees of the environmental protection department of the Marshal Office of the Gdańsk Province. The closed landfill site is supervised by environmental protection authorities and monitored on a continuous basis in accordance with applicable laws. 2. IED requirements do not apply to the phosphogypsum landfill site in Wiślinka, which was closed pursuant to the Marshal of the Gdańsk Province's decision. It has a closed site status, no new waste is received, and the site is subject to monitoring. 3. In April 2014, an environmental review of the closed phosphogypsum landfill site in Wiślinka was submitted to the Marshal Office and the Provincial Inspectorate for Environmental Protection (WIOŚ) of Gdańsk. According to the review, the impact of the landfill site on the environment is not significant. 4. Since August 2014, pursuant to Decision of August 1st 2014 Ref. No. DROŚ-SO.722.45.2013/2014.BA granting an integrated (IPPC) permit to the Company, leachate from the retention reservoir has been transferred to GZNF for recovery. 71,929 Mg of leachate had undergone recovery by the end of 2019, and thus approximately 836 Mg of phosphorus in P2O5 equivalent had been removed from the landfill site. Under the permit, 24,000 m3 of leachate may be transferred annually. The transfer and recovery of phosphate-containing leachate will accelerate the process of restoring the site to its original condition.

7.2 Set up a procedure to process Identification of problems and public Best practice Operational 2013 Management complaints and grievances to complaints in order to implement and costs of reports on enable meaningful public solutions designed to improve public compliance information application of the consultation and information perception of the Wiślinka landfill site with EBRD and office. grievance process with regard to PR10 procedure historical and current EHS requirements. Summary of impact of the Wiślinka landfill systems in the site in Gdańsk. annual report for the Bank Note The Company has a procedure in place for managing grievances and complaints in accordance with the ISO 9001 standard under the management s to system used by the Company. Grievances, complaints or other comments can be submitted using a contact form available from the Company's 7.2 website. Any important events are communicated by the Company on its website. Over the past few years, the Company has received no grievances or complaints with respect to its production facilities in Gdańsk or the closed phosphogypsum landfill site in Wiślinka. A series of articles on removal and recovery of phosphates-containing leachate and the role of the process in accelerating landfill restoration were also published to change public opinion on the Wiślinka landfill. One such article was ‘Innovative technology to enable Grupa Azoty to make fertilizers from waste’, posted athttps://chemia.wnp.pl/innowacyjna-technologia-pozwoli-grupie-azoty-produkowac-nawozy-z- odpadow,236125_1_0_0.html.

158 7.3 Prepare a plan (including Reduce negative environmental impact Legislative Internal 2016 /2017 Report on soil and budget) and conduct soil and in line with IED requirements, resources groundwater surface water assessment best and condition within the plot. management external practices, support Bank's PRs Note 1. The Company has set up a provision for restoration and securing of the closed phosphogypsum landfill site in Wiślinka. As at December 31st 2018, s to the provision was PLN 3,166,480.00. The maintenance, restoration and monitoring of the landfill site are financed solely with the Company's own 7.3 funds. 2. Surface water quality assessment The Company carries out surface water quality testing in accordance with the Monitoring Plan for the closed phosphogypsum landfill site in Wiślinka, as approved by the Marshal of the Gdańsk Province. Such tests are also carried out by the Provincial Inspector for Environmental Protection. 3. Soil and vegetation evaluation in the phosphogypsum landfill site's surrounding area Soil and vegetation quality testing was carried out within the protection zone of the phosphogypsum landfill site in Wiślinka and on agricultural land beyond that zone. The evaluation was carried out by independent specialist bodies:  Agricultural Academy of Wrocław and Wrocław University of Science and Technology,  National Agrochemical Station in Gdańsk. According to the evaluation, the landfill site poses no threats to the natural and agricultural environment of Wiślinka. 4. In 2014, the Company began removing leachate from the retention reservoir of the closed phosphogypsum landfill site in Wiślinka. As a result, the impact of the landfill site on the natural environment has been reduced, and the restoration process has been accelerated. 5. Soil condition assessment and groundwater surveys on GZNF FOSFORY’s land plots on which the principal activities covered by the Integrated Permit are carried out. In July 2017, the Environmental Research Laboratory of Przedsiębiorstwo Geologiczne Sp. z o.o. of Kielce, holding accreditation No. AB 1010 from the Polish Centre for Accreditation, carried out relevant tests of soil and groundwater samples. Based on the tests, a baseline report was drawn up, proposing that soil and ground contamination risk be assessed once every ten years, and that groundwater quality be tested once every five years. The Marshal Office approved the frequency of testing proposed in the baseline report through the provisions contained in Decision No. DROŚ-SO.7222.81.2017.EŻ of August 24th 2018.

159 CERTIFIED TRANSLATION FROM POLISH

Annual Environmental & Social Report

1. Information about the Company Company Name: Zakłady Azotowe Chorzów S.A. Company Address: ul. Narutowicza 15 Country: Poland Town/Location: 41-503 Chorzów Company authorised representative: 1)

I certify that the data contained in this report completely and accurately represents the Company’s operations during the reporting period.

Signature: Piotr Hetnar

Title: President of the Management Board Date: 8th April 2020 Piotr Hetnar Contact Details: Telephone: (+48) 32-736 20 01 Mobile phone: (+48) 533 927 438 Email: [email protected]

Please provide key data on the Company performance, as well as production levels at each plant. For each of the 7 large plants please provide:

Item Cumulative 2019 [PLN ‘000] 2018 performance

Revenue 49,745 37,219 Gross profit/(loss) -461 1,770 EBIT -22,471 -14,840 EBITDA -19,539 -12,345 Net profit/(loss) -22,876 -15,766

Key performance indicators in terms of energy consumption, emissions, use of natural resources, and carbon dioxide emissions:

Number of staff employed and any change in employment over past 3 years As at Dec 31 As at Dec 31 As at Dec 31 2017 2018 2019 Number of direct employees: 188 173 131 Number of contracted workers: - - -

Provide information on permits and each subsidiary’s compliance status with IPPC/IED (Integrated 160 Pollution Prevention and Control Directive/Industrial Emissions Directive)

No new decisions for IPPC installations operated by the Company were issued in 2019.

1. Integrated (IPPC) permits held by ZACH S.A.:

1.1. Integrated permit for the potassium nitrate and calcium nitrate production unit:  Decision by the Governor of the Katowice Province of May 7th 2007, No. ŚR – III – 6618/PZ/1478/21/06,  Decisions amending the integrated permit, i.e. Decision by the Marshal of the Katowice Province of March 31st 2010 No. 1162/OS/2010, Decision by the Marshal of the Katowice Province of June 7th 2011 No. 1684/OS/2011, Decision by the Marshal of the Katowice Province of November 26th 2014 No. 2587/OS/2014, Decision by the Marshal of the Katowice Province of May 13th 2015 No. 850/OS/2015, Decision by the Marshal of the Katowice Province of May 23rd 2017 No. 1567/OS/2017 (permit valid for unspecified period); 1.2. Integrated permit for the unit for processing of industrial-grade animal fats and vegetable oils into distilled fatty acids and stearin:  Decision by the Marshal of the Katowice Province of August 22nd 2013 No. 1848/OS/2013,  Decisions amending the integrated permit, i.e. Decision by the Marshal of the Katowice Province of December 2nd 2014 No. 2769/OS/2014, Decision by the Marshal of the Katowice Province of March 21st 2017 No. 904/OS/2017 (permit valid for unspecified period).

2. Other environmental decisions held by Zakłady Azotowe Chorzów S.A. of Chorzów: 2.1. Permit to conduct waste recovery operations outside of installations (slag, waste code: ex 10 01 01) – Decision by the Mayor of Chorzów of March 22nd 2017, No. 5/2017 (valid until March 31st 2027); 2.2. Decision by the Marshal of the Katowice Province of July 5th 2019 No. 1823/OS/2019 whereby a substance in the form of distillation residues of fatty acids from the processing of industrial-grade animal fats is considered a by-product which can be used as a fuel in the oil-fired boiler house (decision issued in 2019).

Reporting period: 2019

2. General Is the project materially Yes [X] If No, please provide details of any material non- compliant with all relevant EBRD No compliances: Performance Requirements (taking [ ] account of agreed action plans, exemptions or derogations)? Is the project materially compliant Yes [X] If No, please provide details of any material non- with all applicable environmental No compliances: and social laws and regulations? [ ] Have there been any accidents or Yes [ ] If Yes, please describe, including details of actions incidents that have caused damage No [X] to remedy and prevent reoccurrence: to the environment, brought about injuries or fatalities, affected project labour or local communities, affected cultural property, or created liabilities for the Company?

Have there been any changes to Yes [X] If Yes, please describe: environment, social, labour or No [ ] health and safety laws or regulations I. Environmental protection: that have materially affected the

161 Company? 1. Act Amending the Act on Cleaning and Waste Management in Municipalities and Certain Other Acts, dated July 19th 2019 (Dz.U. of 2019, item 1579); 2. Act Amending the Act on Disclosure of Information on the Environment and its Protection, on Public Participation in Environmental Protection and on Environmental Impact Assessments and Certain Other Acts, dated July 19th 2019 (Dz.U. of 2019, item 1712); 3. Act Amending the Waste Act and Certain Other Acts, dated July 4th 2019 (Dz.U. of 2019, item 1403); 4. Regulation of the Minister of Climate dated December 11th 2019 on lists containing information and data on the extent of use of the environment and on environmental fees due (Dz.U. of 2019, item 2443); 5. Regulation of the Council of Ministers dated September 10th 2019 on projects with a potentially significant environmental impact (Dz.U. of 2019, item 1839); 6. Regulation of the Minister of Environment dated May 8th 2019 amending the Regulation on standard registration form, standard data update form, and standard form used to delete entries from the register maintained as part of the Product, Packaging and Waste Management Database (Dz.U. of 2019, item 919); 7. Regulation of the Minister of Climate dated December 11th 2019 on the operation of the Product, Packaging and Waste Management Database (Dz.U. of 2019, item 2414); 8. Regulation of the Minister of Climate dated December 23rd 2019 on waste types and volumes exempt from the obligation to keep waste records (Dz.U. of 2019, item 2531).

II. Social policy and labour law:

1. Changes concerning the processing of personal data of employees and job candidates: The scope of personal data which may be requested by employers from job candidates and current employees was significantly limited. The processing of employees’ other data subject to their consent was also permitted, and rules were defined for the processing of biometric data. Methods by which the employer may verify an employee’s entitlement to benefits provided under the Company Social Benefits Fund were also specified. Pursuant to the new regulations, employers have to assess on an ongoing and regular basis which data of job candidates and employees are required, not only in the course of data collection, but for as long as such data is retained. 2. New rules for keeping staff records: At the beginning of 2019, employers had to reorganise their employee recordsdue to the introduction of an obligation to keep such records in 162 electronic form and, as a rule, to reduce the retention period to 10 years as of the end of the calendar year in which the employment relationship ceased. In addition, as of January 1st 2019, Section D was added to personal employee records, containing a copy of any Notice of Imposition of Penalty and other documents related to the employee’s liability for not following workplace rules or other liability under separate regulations. 3. New definition of discrimination: A new definition of employment discrimination, effective as of September 7th 2019, was a fundamental change, whereby the effects of discrimination and unequal treatment are now considered equivalent. The new rule is that any unequal treatment of employees, unless objectively justified, is considered a discriminatory practice and may give rise to claims for damages by the employee or job applicant concerned. 4. Reinstatement obligation: With respect to the procedural labour law, significant changes included the possibility for the court to impose an order to re-employ an employee who has filed a reinstatement claim against their former employer, even prior to the court’s decision becoming final. This legal mechanism is highly controversial, giving rise to many doubts among both lawyers and employers. 5. Changes facilitating enforcement of mobbing- related claims: Note should be also taken of the new provisions significantly facilitating the enforcement of claims related to workplace mobbing. Such claims may now be pursued not only by persons who have decided to leave employment on that account, but also by existing employees, provided they are able to demonstrate the damage suffered due to mobbing. 6. Employee Capital Plans: From the perspective of employers, the introduction of a mandatory Employee Capital Plans (PPK) scheme, effective as of July 1st 2019 for all employers with a headcount of at least 250, was a major organisational challenge. Under the PPK framework, almost all employees will be covered by a mandatory savings scheme to set aside money for their future retirement pensions based on contributions funded by both the employee and the employer. 7. New provisions regarding issuance of employment certificates: 2019 saw amendments to the provisions regarding the issuance of employment certificates.Under the new provisions, such certificates must now include information on the retention period of employee records and the possibility of their collection by the employee concerned. Moreover, former employees may apply to a court for an order requiring their employer to issue an employment certificate, or, if the employer has ceased to exist, the court may even issue such certificate itself for the non- 163 existent employer. 8. Extended protection of employees on account of maternity: An amendment to the Labour Code of September 7th 2019 introduced new mechanisms for employees taking care of children. It extended the group of persons covered by special employment protection guarantees and those who are entitled to special parental rights . In addition to a child’s mother, the amended provisions also apply to the father and to another immediate family member taking care of the child who became entitled to maternity leave, leave equivalent to maternity leave or parental leave, or who has ceased gainful employment to personally take care of the child.

Collective labour law 9. Right of association also for persons other than employees: With respect to the collective labour law, an amendment to the Act on Trade Unions which extended the right of association to include persons other than employees, should be considered a significant change. The amendment was effected by introducing a new definition of a person performing paid work, which includes not only employees but also self-employed individuals providing services under civil-law contracts. In addition, volunteers, trainees and other individuals who personally provide unpaid work were permitted to associate in trade unions in cases and on the conditions laid down in their respective statutes. 10. New rules for assessing the representativeness of trade unions: The said amendment to the Act on Trade Unions also raised the representativeness threshold for trade unions and modified the rules for verifying their membership numbers, which is a matter of importance when it comes to their respective powers in relations with the employer. The amendment introduced a measure intended to prevent attempts to artificially increase the number of members for the purposes of assessing the size of a trade union’s membership; namely, it may only include persons who had performed paid work for the employer for a period of at least six months prior to the commencement of relevant negotiations or arrangements, and the number of the trade union’s members may be questioned both by the employer and by any other trade union active employer

How many inspections did you Number: 2 Please provide details of these visits, including receive from the environmental number and nature of any violations found: authorities during the reporting period? 1. Inspection carried out in December 2019 by the Provincial Inspectorate for Environmental Protection in Katowiceregarding the sulfur content in heavy fuel oil combusted at the plant. 164 The inspection identified no violations. 2. Inspection carried out in the period June-July 2019 by the County Command of the State Fire Service in Chorzów to verify compliance with the safety requirements in respect of the threat of a major industrial accident. The inspection did identify certain violations relating to the occurrence of a so-called significant change on the premises of ZACH S.A. relative to the updated notification of the Plant as a lower-tier establishment (LTE) of May 2016, concerning the types and quantities of substances which could pose a threat of a major industrial accident, as provided for in the Environmental Protection Law.

How many inspections did you Number: 3 Please provide details of these visits, including receive from the health and safety number and nature of any violations found: authorities during the reporting period? 1. Inspection carried out in September 2019 by the National County Sanitary Inspectorate of Chorzów related to ongoing monitoring of the on-site occupational health conditions. Following the inspection, in October 2019 the said authority issued an injunctive decision requiring ZACH S.A. to implement the following orders within the prescribed time limits: a) by December 15th 2019: - include in the register those works which involve exposure to a carcinogenic chemical substance used as a chemical reagent in the laboratory, - include in the register those employees who are exposed to carcinogenic or mutagenic chemicals and persons who come into contact with the substances specified in the decision, - bring the restroom located near the place where NPK blends are produced into compliance with applicable requirements, and provide a hot water connection for the washbasin, - designate the locations where potassium carbonate and nitric acid tanks are stored both indoors and outdoors at the Inorganic Production Division (OPN), in accordance with applicable legal regulations. All the orders listed above were implemented within the time limit prescribed in the decision; b) by June 30th 2020: - reduce the concentration of silica at the locksmith’s workstation of the Plant Maintenance Department to below the TLV level, - carry out tests and measurements of agents harmful to human health at the operator’s workstation in the production of NPK blends, - bring a wall at the Railway Department to the required condition, - bring the ceiling in the repairs workshop of the Railway Department to the required condition, - bring a wall in the locker room of the Wastewater Treatment Department to the required condition, - bring the floor in the production unit of the 165 Inorganic Production Division (OPN) to the required condition, - bring the floor, walls and ceiling in the men’s locker room at the Inorganic Production Division (OPN) to the required condition, - bring the cabinets in the laboratory of the Inorganic Production Division (OPN) to the required condition, - keep carcinogenic substances in the laboratory of the Inorganic Production Division (OPN) in accordance with the applicable material safety data sheets. Implementation of the orders listed above is still under way.

2. Inspection carried out in September 2019 by the

National County Sanitary Inspectorate of Chorzów to assess compliance with the requirements related to the marketing of chemicals and their mixtures. The inspection identified no violations.

3. Inspection carried out in October 2019 by the National Labour Inspectorate of Katowice regarding i.a. occupational health and safety issues. Following the inspection, the National Labour Inspectorate of Katowice issued an injunctive decision and an improvement notice concerning i.a. OHS issues: a) injunctive decision: - install protective guards for movable elements of the machinery/devices specified in the decision – immediately enforceable (the orders were implemented), - designate the plant's process pipelines specified in the decision with identification marks – by December 8th 2019 (the orders were implemented), - protect the valve flanges in units specified in the decision against liquid splashes – immediately enforceable (the orders were implemented), - remove leakage in the K101 crystalliser – by November 30th 2019 (the order was implemented); b) improvement notice: - carry out tests and measurements of agents harmful to human health present in the working environment in a timely manner (the OHS staff were obligated to comply with that recommendation in the future), - specify the date of general OHS training in the induction training sheets (the OHS staff were obligated to comply with that recommendation in the future),

take organisational and technical measures to ensure that all pieces of shop-floor 166 equipment/machinery (e.g. engines and pumps) of the Inorganic Production Division are fitted with protective covers/shields fully protecting employees from coming into contact with any moving drive system parts (the said measures were taken, and the Head of the Technical Division was required to re-install existing covers/shields previously removed during building repairs. The recommendations set down in the notice will be fully implemented after the Technical Department has purchased missing covers/shields).

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How many inspections did you Yes [x] If Yes, please describe, including status of receive from the labour Number: implementing corrective actions to address any authorities during the reporting 1 violations found: period? No [ ] Inspection carried out in October 2019 by the National Labour Inspectorate of Katowice regarding legal protection of labour and occupational health and safety issues. Following the inspection, the National Labour Inspectorate of Katowice issued an injunctive decision and an improvement notice:

OCCUPATIONAL HEALTH AND SAFETY: a) injunctive decision: - install protective guards for movable elements of the machinery/devices specified in the decision – immediately enforceable (the orders were implemented), - designate the plant's process pipelines specified in the decision with identification marks – by December 8th 2019 (the orders were implemented), - protect the valve flanges in units specified in the decision against liquid splashes – immediately enforceable (the orders were implemented), - remove leakage in the K101 crystalliser – by November 30th 2019 (the order was implemented);

OHS AND LABOUR LAW: b) improvement notice:

OCCUPATIONAL HEALTH AND SAFETY: - carry out tests and measurements of agents harmful to human health present in the working environment in a timely manner (the OHS staff were obligated to comply with that recommendation in the future), - specify the date of general OHS training in the induction training sheets (the OHS staff were obligated to comply with that recommendation in the future), - take organisational and technical measures to ensure that all pieces of shop-floor equipment/machinery (e.g. engines and pumps) of the Inorganic Production Division are fitted with protective covers/shields fully protecting employees from coming into contact with any moving drive system parts (the said measures were taken, and the Head of the Technical Division was required to re-install existing covers/shields previously removed during building repairs. The recommendations set down in the notice will be fully implemented after the Technical Department has purchased missing covers/shields).

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LABOUR LAW: 1. Work Rules were updated with regard to the method of confirming arrival and presence at work, and stay on the premises. 2. Remuneration Rules were updated with regard to the manner of payment of remuneration for work. 3. HR Department prepared written job descriptions for those employees who had not received them. 4. Head of the HR Department was obligated to issue employment certificates to employees in a timely manner. 5. Head of the HR Department was obligated to make sure that employees acknowledge the receipt of employment certificates, specifying the date of receipt. 6. The Employer ensured an uninterrupted daily rest period to all employees, and the heads of all organisational units were obligated to strictly adhere to the 11-hours’ uninterrupted daily rest period guaranteed to all employees and to report any deviations from that rule identified in work schedules (a reminder instruction was issued to that effect). 7. Work Rules and the Rules of recording and accounting for working hours, and of recording instances of employees leaving the premises of Zakłady Azotowe Chorzów S.A. for business/private purposes were updated.

Have these visits resulted in Yes [ ] If Yes, please describe, including status of any penalties, fines and/or No [X] implementing corrective actions to address any corrective action plans? violations found:

Has the Company engaged any Yes [ ] If Yes, please state for which types of work, and contractors for project-related No [X] how the Company has monitored the compliance work in the reporting period? of contractors with EBRD Performance Requirements and the Environmental and Social Action Plan: Were any of the violations Yes [ ] If Yes, please provide details, including how the stated above the responsibility No [X] Company is ensuring that corrective actions are of contractors? implemented by the contractor?

Have any operations been Yes [ ] If Yes, please describe: reduced, temporarily No [X] suspended or closed down due to environmental, health, safety or labour reasons?

169 Please describe any environment or social programmes, initiatives or sub-projects undertaken during the reporting period to improve the Company's environmental or social performance and/or management systems:

2nd surveillance audit in accordance with PN-EN ISO 14001 was held by TUV NORD Polska Sp. z o.o., a certification body.

PLN 6,250.00 (expenditure related to the audit of the ISO 14001:2015-compliant system).

4. Environmental Monitoring Data for each of the key subsidiaries The information required in this section can be extracted from a CSR report, or a full CSR report can be attached.

Please provide the name and contact details for your environmental manager: Zakłady Azotowe Chorzów S.A. 1. General environmental protection area: Dominika Babraj Chief Environmental Protection Officer, Senior OHS Inspector Mobile: (+48) 605 347 505 email: [email protected];

2. Specific area relating to water and wastewater management: Patryk Jankowski Head of Water and Water Management Mobile: (+48) 506 286 598 email: [email protected]

Parameter2 Amount3 Unit Compliance Comments5 Status4 Wastewater Total wastewater 168 m3/d 535 m3/d Biochemical Oxygen Demand 7.7 mg O2/l 25 (BOD5) Chemical Oxygen Demand 37.5 mg O2/l 125 (COD) Suspended solids 23.8 mg/l 35 Phosphorus 1.35 mg/l 2 Nitrates 1.26 mg/l 30 N-NO3 Heavy metals [Other] 8.6 6.5-9 pH

mg/Nm3 Permissible Per each major point source Not applicable Air emissions given in emission Boilers 3 to the project mg/m u limit

170 3 3 K2 K3 K4 K5 mg/m u mg/m u 731.0 724.0 1,176.0 997.0 K2 = 850 K3 = 850 SO mg/m3 2 716.0 723.0 997.0 1,044.0 u K4 = 1,500 On an K5 = 1,300 O content Nitrogen oxides 328.0 350.0 287.0 296.0 2 mg/m3 400 in flue gas basis (NO ) 315.0 340.0 274.0 314.0 u X (K2 and K3 – 3%, 12.8 5.7 65.0 63.0 K2 = 50 K4 and K5 – 6%) K3 = 50 PM mg/m3 13.1 6.2 63.0 78.0 u K4 = 100 K5 = 100 136.0 82.0 153.0 137.0 --- CO mg/m3 --- 139.0 77.0 144.0 163.0 u 279,699. 325,376.0 302,078.0 264,885.0 ------0 CO mg/m3 2 278,300. u 324,189.0 302,065.0 266,441.0 0 n/a n/a p.o. p.o. ------BaP mg/m3 n/a n/a - u Other parameters 40.0 – 42.5 Noise does not Noise emissions LAeg [dBA] 45-55 exceed 39.9 – 40.5 permitted levels

Solid waste Please provide details of the types and amounts of solid wastes generated by the project. Indicate where wastes are classified as hazardous. Indicate the final re-use, recycle or disposal method for each waste type.

No. Waste code Waste type Weight of waste generated [Mg/year]

Solid salts and solutions other than those mentioned 1. 06 03 14 in 06 03 11 and 06 03 13 0.340

2. 06 10 02* Wastes containing hazardous substances 172.460 3. 06 10 99 Wastes not otherwise specified 310.990 Sludges from onsite effluent treatment other than 4. 07 06 12 those mentioned in 07 06 11 105.740

5. 07 06 80 Bleaching earth from oil refining 7.815 Bottom ash, slag and boiler dust (excluding boiler dust mentioned in 10 01 04) 6. 10 01 01 730.000

7. 10 01 04* Oil fly ash and boiler dust 0.026 8. 12 01 13 Welding wastes 0.002 Mineral-based non-chlorinated engine, gear and 9. 13 02 05* 0.040 lubricating oils 10. 15 01 01 Paper and cardboard packaging 1.005 11. 15 01 02 Plastic packaging 21.594 12. 15 01 03 Wooden packaging 0.615 Packaging containing residues of or contaminated 13. 15 01 10* 0.163 by hazardous substances Absorbents, filter materials (including oil filters not otherwise specified), wiping cloths, protective 14. 15 02 02* 0.764 clothing contaminated by dangerous substances (e.g. PCB) Absorbents, filter materials, wiping cloths and protective clothing other than those mentioned in 15. 15 02 03 0.830 15 02 02

16. 16 01 19 Plastics 6.3 171 80 Discarded equipment containing hazardous components(1) other than those mentioned in 16 02 17. 16 02 13* 0.021 09 to 16 02 12

Laboratory chemicals (e.g. chemical reagents) consisting of or containing dangerous substances, 18. 16 05 06* 1.254 including mixtures of laboratory chemicals

Spent catalysts containing transition metals or 19. 16 08 03 transition metal compounds other than those 0.806 mentioned in 16 08 02 Glass, plastic and wood containing or contaminated 20. 17 02 04* 4.060 with dangerous substances (e.g. wooden sleepers) 21. 17 04 05 Iron and steel 110.960

An asterisk (*) is used to denote hazardous waste. All waste is recovered or disposed of by external contractors. Furthermore, non-hazardous waste designated with code 10 01 01 is used for surface paving on ZACH S.A.’s premises, which is consistent with the terms of the permit held by the Company.

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5. Resource Usage and Product Output Measureme Parameter Amount Comments6 nt Unit Heavy fraction (boiler house) and Fuels used 43.86 Mg gasoline, diesel oil, LPG – total for all departments Crude oil ------Natural gas 0.0 thousand m3 --- Hard coal 4,825.66 Mg --- Lignite ------Grid electricity 2,769.49 MWh ---

Heat purchased from external sources ------

Feedstocks and raw materials used Nitric acid 6,009.730 Mg --- Potassium carbonate 5,840.040 Mg --- Animal fat 0.000 Mg --- Quick lime 726.508 Mg --- Hydrated lime 56.108 Mg --- Other feedstocks for crystalline NPK 143.476 Mg --- fertilizers Other feedstocks for 12.133 Mg --- liquid NPK fertilizers Product output Potassium nitrate 6,577.313 Mg --- Calcium nitrate 3,885.000 Mg --- Crystalline NPK 212.610 Mg --- fertilizers Liquid NPK fertilizers 51.318 Mg --- Stearin 0.000 Mg --- Glycerine 0.000 Mg ---

6. Human Resources management Please provide the name and contact details for Magdalena Czajkowska your Human Resources manager: Head of HR Department Mobile phone: (+48) 575 100 182 Email: [email protected] Recruited in this Terminated in this Total reporting period reporting period Number of direct employees: 131 6 51 Number of contracted - - - workers: If Yes, please describe the redundancy plan, Were there any collective Yes [ ] including reasons for redundancies, number of redundancies during the reporting No [X] workers involved, how they were selected, period? consultation undertaken, and measures to mitigate the effects of redundancy: If Yes, please describe the redundancy plan, Are any redundancies to the Yes [ ] including reasons for redundancies, number of workforce planned for the next No [X] workers involved, and selection and consultation year? process: If Yes, please provide details, and summarise Were there any changes in trade Yes [x] engagement with trade unions during reporting union representation at Company No [ ] period: plants during the reporting period? A new Trade Union Board was elected.

173 Were there any other worker If Yes, please provide details and summarise Yes [ ] representatives (e.g. in the absence engagement with them during the reporting No [X] of a trade union)? period: Were there any changes in the Yes [ ] If Yes, please provide details: status of Collective Agreements? No [X] If Yes, please state how many, split by gender, Have employees raised any Yes [ ] summarise the issues raised in grievances by grievances with the project during No [X] male and female staff and explain how the the reporting period? Company has addressed them: If Yes, please state how many, split by gender, Have employees raised any Yes [ ] summarise the issues raised by male and female complaints about harassment or No [X] staff and explain how the Company has addressed bullying during the reporting period? them: Have there been any strikes or other collective disputes related to labour Yes [ ] If Yes, please summarise nature of, and reasons and working conditions at the No [X] for, disputes and explain how they were resolved: Company in the reporting period? If Yes, please summarise the issues contested and outcome: Have there been any court cases Yes [x] 1. Ineffective dismissal of an employee – case related to labour issues during the No [ ] pending, reporting period? 2. Workplace bullying (mobbing) – case pending, 2nd instance.

Have there been any changes to the following policies or terms and conditions during the reporting period in any of the following areas:  Trade union recognition  Collective Agreements  Non-discrimination and equal opportunities for all  Equal pay for equal work  Gender equality If Yes, please give details, including of any new  Bullying and harassment, Yes [ ] initiatives: including sexual harassment No [X]  Employment of young workers under 18  Wages and salaries (for regular and overtime hours)  Overtime  Working hours  Flexible working / work-life balance  Grievance mechanism for workers  Health & safety

174 7. Occupational Health and Safety Data Please provide the name and Dominika Babraj contact details for your Health Chief Environmental Protection Officer, Senior and Safety manager: OHS Inspector Mobile: (+48) 605 347 505 email: [email protected]

Paweł Polak Chief OHS Officer Fire Prevention Officer Mobile: (+48) 533 330 256 email: [email protected]

Direct Contracted Direct Contracted employees workers employees workers Number of man- 235,640 hours hours worked in worked/ Number of 0 0 0 this reporting 131.79 per month fatalities 7: period: per person Budget spent on Number of OHS in this period PLN 455,037.90 0 disabling 0 0 (total amount and injuries: currency): OHS training Number of Lost provided in this 26 persons/ 10 Time Incidents 0 2 0 period in person- days (including days: vehicular): Number of lost Number of cases workdays 51 0 of occupational 0 0 resulting from disease: incidents: Number of sick 51 0 days: Accident causes (falling, heavy loads, struck by object, contact with energy source etc.):

 startled by an unexpected event,  work performed under artificial lighting,  work performed in a forced body position,  work performed at night,  noise coming from another shop floor location.

not applicable

Please summarise any emergency prevention and response training that has been provided for Company personnel during the reporting period:

Fire prevention training, including the Plant’s UTE/LTE status, in accordance with the training programme approved by the Employer.

Please summarise any emergency response exercises or drills that have been carried out during the reporting period:

In-house evacuation drills, including an alertsounded using an alarm siren and short text messages.

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8. Stakeholder Engagement

Please provide the name and contact details Joanna Gruszka for your external relations or community Chief QMS Officer engagement manager: Telephone: (+48) 32/73 62 000 Mobile phone: (+48) 533 929 490 Email: [email protected] Please provide information on the implementation of the Stakeholder Engagement Plan agreed with EBRD and summarise interaction with stakeholders during the reporting period, including:  meetings or other initiatives to engage with members of the public or public organisations during the reporting period  information on environmental protection, social policy and safety matters provided to the local community and other stakeholders during the reporting period:  coverage in the media:  interaction with any environmental or other community groups. Please describe any changes to the Stakeholder Engagement Plan agreed with EBRD:

Zakłady Azotowe Chorzów S.A. has no Stakeholder Engagement Plan.

There were no such issues.

9. Community Development Please summarise any social or community development / investment initiatives undertaken by the Company during the reporting period, and any associated expenditure:

The Company made donations to the State Fire Service in Chorzów and to the Technology Association/Foundation of Chorzów. ZACH S.A. has partnered with the Starochorzowska Health Foundation, from which it commissioned medical check-ups of employeesas part of preventive healthcare.

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ENVIRONMENTAL AND SOCIAL ACTION PLAN

Table 0.1 Wisła Project, Grupa Azoty Poland – Environmental, Social, Health and Safety (ESHS) matters, Updated (Alchemist Project) Action Plan:

ZAKŁADY AZOTOWE CHORZÓW S.A.

6. Actions required to maintain compliance with EHS requirements of national law and EU environmental standards – ZAKŁADY AZOTOWE CHORZÓW S.A. Scheduled completio Target and Legislative n – action Requirement/Resou evaluation criteria No. Action Environmental risks, liabilities/benefits requirements/Best to be Comments rces for implementation practice completed progress by end of year 0.1 Objective to achieve the same OHS and fire safety control of Requirements under Internal resources In Conduct business It is necessary to safety performance as individual areas with respect to the OHS and fire available for accordanc in accordance with secure adequate in 2018 potential risks affecting the pursuit of safety regulations, supervision, control e with the the applicable laws financial (when no accidents at work business objects. good practice, and documentation Company’s and regulations, as resources for the occurred). internal regulations. (not applicable to Restructuri well as established implementation material agents). ng Plan for standards and of specific 2017– practice adequate actions. 2027. to the business profile and adjacent infrastructure.

177 0.2 Maintain and further develop Fostering solid patterns and attitudes Legal requirements. Internal resources As Certification of --- the existing management confirmed by appropriately Best practice. available for needed. systems and systems. implemented and supervised supervision, control raising staff and documentation awareness – on an Improve OHS and fire safety management systems applicable in (not applicable to as needed basis. infrastructure. each area, i.e. OHS, fire safety and material agents). environmental protection.

0.4 Incur expenditure to perform the Securing adequate financial resources Requirements under Internal resources/ As Regular monitoring --- that will allow the Company to the applicable laws, specialised external needed. of implementation. Company’s OHS, fire safety and environmental obligations. perform its obligations, including the regulations, EU entities. pursuit of its business objects. directives and administrative decisions. 6.1 Prepare the Upper-Tier Update of legal compliance status Legal Internal resources 2018-2019 UTE --- Establishment documentation. concerning prevention of major requirements / specialised (ongoing) documentation industrial accidents. relating to external entities. approval process is prevention of currently under major industrial way before accidents under competent the authorities Environmental (Provincial Protection Law. Command of the State Fire Service in Katowice and Provincial Inspectorate for Environmental Protection in Katowice)

178 6.2 Prepare a fire protection plan Update of legal compliance status Legal Internal resources 2018-2019 In 2019, the --- for the storage of waste concerning storage of generated requirements (ongoing) Company obtained generated in connection with waste. under the Waste approval of its fire the operation of the potassium Act and the protection plan for nitrate and calcium nitrate unit Environmental storage of waste and the Company boiler house. Protection Law generated by the potassium nitrate and calcium nitrate production unit, issued by the Municipal Command of the State Fire Service in Chorzów. 6.3 Secure approval for the Upper- Update of legal compliance status Legal Internal resources 2019-2020 UTE Continuation of Tier Establishment concerning prevention of major requirements / specialised (ongoing) documentation work carried out documentation. industrial accidents. relating to external entities. approval process is in 2018-2019 prevention of currently under major industrial way before accidents under competent the authorities Environmental (Provincial Protection Law. Command of the State Fire Service in Katowice and Provincial Inspectorate for Environmental Protection in Katowice) ******************************************************************************************************************************************** I, Monika Szwagrzyk, sworn translator, hereby certify that, to the best of my knowledge, the above is a true and correct translation of the Polish document presented to me in electronic form.

Signed and sealed on this 22nd day of April 2020 in Kraków, Poland. Monika Szwagrzyk Sworn Translator

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