Integrated Report of Grupa Azoty 2016-2017

[IR - Corporate governance]

Our Group builds its value operating as a single entity. This strategic objective is supported by our management model based on centralisation of the functions which generate the greatest synergies and management of key business processes at the Group level, while maintaining the separate legal identity of the Group companies.

Parent and subsidiaries of Grupa Azoty S.A. as at December 31st 2017

Key information about the Group companies:

Grupa Azoty S.A. – the parent of the Grupa Azoty Group Manufacture of, trade in and services related to nitrogen fertilizers, engineering plastics and intermediates Registered office: Tarnów	Grupa Azoty Puławy Manufacture of nitrogen fertilizers Manufacture of melamine Manufacture of caprolactam Registered office: Puławy	Grupa Azoty Kędzierzyn Manufacture of nitrogen fertilizers Manufacture of OXO alcohols and plasticizers Registered office: Kędzierzyn-Koźle
Grupa Azoty Police Manufacture of nitrogen fertilizers Manufacture of compound fertilizers Manufacture of titanium white Registered office: Police	Grupa Azoty ATT Polymers Manufacture of polyamide 6 (PA 6) Registered office: Guben (Niemcy)	Grupa Azoty Polskie Konsorcjum Chemiczne End-to-end design services for investment projects in the chemical industry Registered office: Tarnów
Grupa Azoty Koltar Railway transport services Repair of rail car chassis and tanks used in the transport of hazardous materials Registered office: Tarnów	Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol Production and processing of sulfur Production of liquid, prilled, insoluble, milled, granulated and flaked sulfur Registered office: Grzybów	Grupa Azoty Compounding The company’s business model is based on a portfolio of specialised engineering plastics manufactured through the compounding of plastics with the use of innovative technological solutions Registered office: Tarnów

[102-18]

Structure of the Grupa Azoty Group on December 31, 2017

[102-5]

Shareholding structure of Grupa Azoty S.A.

Shareholding structure of Grupa Azoty Police

Shareholding structure of Grupa Azoty Puławy

Shareholding structure of Grupa Azoty Kędzierzyn

[102-18] The Management Board of Grupa Azoty S.A. operates as the Management Board of the Grupa Azoty Group. President of the Management Board exercises overall supervision of the Group. Key areas of its activity include:

finance,
strategy and development,
investments,
production integration,
plastics and organic synthesis,
supply chain management,
social dialogue,
technical safety and environmental protection.

Corporate management is the responsibility of the Grupa Azoty S.A. corporate departments.

In 2016–2017, the Management Board and the Supervisory Board of Grupa Azoty S.A. were composed of persons holding university degrees in law, economics, chemical engineering and technology, as well as environmental engineering. Most of their members also completed post-graduate programmes in corporate management, polymer chemistry and technology, management control, MBA programmes, as well as specialist courses or trainings, including in:

power engineering,
transport of hazardous materials,
project management,
disclosure requirements applicable to WSE-listed companies,
asset management strategy,
risk management,
corporate governance.

Management Board of Grupa Azoty Group for 31 Decemner 2017:

WojciechWardacki,
President of the Management Board

WitoldSzczypiński,
Vice President of the Management Board, Director General

production integration at the Agro Fertilizers and Plastics segments

Grzegorz Kądzielawski,
Vice President of the Management Board

infrastructure
R&D programmes

Paweł Łapiński,
Vice President of the Management Board

finance
IT
investor relations
M&A
tender procedures
procurement

Józef Rojek,
Vice President of the Management Board,

investments
logistics
strategic energy commodities

Artur Kopeć,
member of the Management Board

production assets
technical safety
environmental protection
critical infrastructure
social dialogue

The current composition of the Management Board and the biographical notes and information on the professional experience of its members are available on the Grupa Azoty Group’s corporate website.

Grupa Azoty Council

The Management Board is advised by the Grupa Azoty Council, a permanent body whose main tasks include advising, issuing opinions and initiating management improvement measures and changes in functional and business areas (in particular in the strategic development and marketing plans). The Council issues opinions on proposed planning assumptions for the Group companies’ budgets and assumptions for long-term plans. It also serves as a platform enhancing communication, cooperation and information sharing at the Group.

The Grupa Azoty Council consists of the Presidents and members of the Management Boards of all of the Group consolidated companies and the Managing Director of the parent.

Supervisory Board

The Supervisory Board is responsible for ongoing supervision of the Grupa Azoty S.A.’s operations. In 2017, the Supervisory Board held 46 meetings and 16 voting procedures using means of remote communication.

The composition of the Supervisory Board and the biographical notes and information on the professional experience of its members are available on the Grupa Azoty Group’s website.

The Supervisory Board is advised by the Strategy and Development Committee, the Nomination and Remuneration Committee, and the Audit Committee. The responsibilities of the Audit Committee include:

monitoring of the financial reporting process,
monitoring of the effectiveness of internal controls,
monitoring of financial audit activities,
monitoring of the independence of the auditors and the audit firm responsible for auditing the company’s financial statements.

Our business – who we are, how we operate

Overview of the Group

Table of contents

Our business – who we are, how we operate

Mission and business model