2011 Consolidated Annual Report Azoty Tarn贸w Capital Group
Managing a modern company is the art of finding innovative solutions and changing set ways of operating. As in sculpture – the art of setting a measured width, height and length in a fixed space, this is a process of sustainable value creation in three areas: economic, social and environmental. Irrespective of whether the result of our work is a miniature or a giant statue, its significance depends on the precision of the design and the courage and consistency of execution.
Tarnów, 6 March 2012
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Dear Shareholders,
It is with pleasure that I present you with the annual report for 2011 on the operations and financial results of the Azoty Tarnów Capital Group. This document is more than the publication of financial data. It is an expression of our commitment to partnership with capital market participants and business partners. I hope that the figures in this publication will showcase stable growth in Group revenue and profit, along with our decisions and operating processes which have led to the creation of a strong chemicals group which successfully competes in European and global markets. Of symbolic significance is the fact that the publication date for this report falls on the 85th anniversary of the Polish government’s historic decision to construct the State Nitrate Factory in Tarnów. Thanks to the corporate development and consolidation processes completed in 2011, which this report presents in detail, Azoty Tarnów has created the largest chemicals group in Poland and has become a significant business partner in CEE markets. The financial results generated by Azoty Tarnów Capital Group companies in 2011 were impressive, both against the backdrop of current economic conditions and historically for Azoty Tarnów. The consolidation of ZAK S.A.,on-going since 2010, and Z.Ch. “Police” S.A., which joined the Group in 2011, are also large-scale and undoubted in their significance. The effects of consolidation are visible in the statement of financial position for 2011 and our position in specific markets. I am convinced that this will have a positive impact on further development of the Company and Group and will be beneficial to the Polish chemicals industry. Due to identified and quantified synergies we are already strengthening our investment and growth potential, which is necessary for the further consistent implementation of the Azoty Tarnów Capital Group strategy. I hope that the financial results generated by the Azoty Tarnów Capital Group in 2011 will bring satisfaction for all our business partners, whom on behalf of the Management Board and Supervisory Board of Azoty Tarnów I thank for their trust and partnership. Your trust is after all one of the most important pillars for the development and success of our Group in the particularly demanding chemicals market.
Jerzy Marciniak President of the Management Board | Managing Director
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The form given to a stone figure is the quintessence of all of the numerous shapes the sculptor has discarded. They all could have been beautiful, but not all at once. For this reason art does not just require imagination but also needs decisions to be taken bringing order to a myriad of ideas.
a year of transformation redefining Poland’s chemicals industry
A year of transformation
2011 was a landmark year in the 85-year history of Azoty Tarnów, which due to capital and corporate transformations is currently the largest chemicals group in Poland and a significant business partner throughout the CEE region. The impressive economic effects are confirmation of Azoty Tarnów’s personnel, technological, organisational and operational competences on the global chemicals market. The synergy in cooperation between Group companies, achieved thanks to the consolidation implemented in 2011, makes and will continue to make a deciding contribution to the Group’s further effectiveness in a modern and demanding market. The acquisition by Azoty Tarnów of a controlling interest in ZAK S.A. in November 2010 was the crucial first step in consolidating Poland’s chemicals sector. In 2011 the Company set out on its mission to build the strongest chemicals group. 2011 was a year of change in which the intended objective was achieved. On 19 August 2011 Azoty Tarnów acquired a 66% stake in Z.Ch. “Police” S.A. On 13 October 2011 the State Treasury of Poland and Azoty Tarnów entered into an agreement on sale of 40.86% of shares in ZAK S.A., resulting in the acquisition by Azoty Tarnów of 93.48% of votes at the company’s general meeting. The acquisition of corporate control over Z.Ch. “Police” S.A. and ZAK S.A. constituted implementation of the Azoty Tarnów Capital Group’s strategic development plan – achieving a strong market position as one of the leading manufacturers of mineral fertilisers in the European Union, a key European player in the manufacture of engineering plastics and also a significant manufacturer of oxo alcohols, plasticisers and titanium white.
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A year of transformation
Expansion of the Group’s potential through the acquisition of Polish chemicals companies was possible due to a variety of factors including the success of the public offering of series C shares in Zakłady Azotowe w Tarnowie-Mościcach S.A., which proved of great interest among investors and was proof of market participants’ trust in the Company and testament to the positive assessment of the Azoty Tarnów Capital Group’s issue objectives and development plans. An equally significant element in the development and strengthening of the Group’s potential last year was the successful implementation of a restructuring and consolidation programme enabling full use of anticipated synergy effects within the Group both in terms of manufacturing and operational capacity and market activity. The consolidation of service, automation and minor chemical manufacturing companies was commenced as per programme assumptions, which enabled better use of capacities and better organisation of the Group’s service, operations, repair and engineering subsidiaries. A further step in increasing the efficiency of companies providing services for the Group will be the planned development of logistics. At the same time Azoty Tarnów disposed of shares in Oknotar sp. z o.o., Zbach sp. z o.o. and Wiezat sp. z o.o. last year, together with its 100% stake in Elzat sp. z o.o. The direct effect of these transactions, effective consolidation and organisational restructuring implemented over the last year are the Group’s impressive consolidated financial results generated during the period ended 31 December 2011. Expanded through the addition of subsidiaries ZAK S.A. and Z.Ch. “Police” S.A., the Azoty Tarnów Capital Group achieved significant growth in the volume and value of sales in the fertiliser, plastics, oxo alcohol and titanium white segments. Due to greater use of production capacities, the period 1 January to 31 December 2011 saw the level of consolidated net operating profit reach PLN 563 556 000 and the Azoty Tarnów Capital Group’s net profit in 2011 amounted to PLN 498 941 000. The excellent financial results achieved in 2011 were also due to favourable conditions in the chemical and fertiliser markets in which the Group operates. The first significant growth connected with economies of scale was recorded as early as the fourth quarter of 2010, and the acquisition of Z.Ch. “Police” S.A. in the third quarter of 2011 intensified this growth even further. Increasing demand in each operating segment translated into higher price levels for products sold. Exchange rates also had an impact on the generation of good sales results. It should be noted that the increase in sales levels and the Group’s good operating results were already visible in the results for the third quarter of 2011, and thus in the period falling immediately after consolidation.
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The work of the Management Board and Supervisory Board, which act in accordance with the principles of corporate governance, is a guarantee of consistent implementation of the Group’s strategic plans. The Azoty Tarnów Capital Group is managed with emphasis on sustainable development. The integrated approach to social, environmental and economic considerations is aimed at developing business culture in a responsible way. The operational nature of chemicals sector companies means that environmental initiatives constitute an important area of the Group’s operations. Azoty Tarnów is amongst an elite group of companies listed on the Warsaw Stock Exchange since 19 November 2009 in the RESPECT Index – CEE’s first stock market index for socially responsible companies. The development of the Group and its operations in 2011 have also met with positive opinions among industry representatives and independent observers dealing with key events for the Polish economy and financial markets. In last year’s “500” ranking by daily newspaper “Rzeczpospolita”, Azoty Tarnów was ranked 15th among Polish companies recording the highest improvement in net result. In addition, the “500 Largest Polish Companies” ranking by weekly news magazine “Polityka” saw the Azoty Tarnów Capital Group advance 22 places on its position last year, while in the “100 Largest Polish Exporters” category it had advanced 7 places in comparison to the ranking published in 2010. The stable position of the Group, its competitiveness and innovation have been recognised by numerous awards: “Leader in Restructuring”, “Pearl of the Polish Economy”, “Leader in Polish Export 2011”, “Most Interesting of the Best 2011”, “Creator of 21st Century Solutions”, “Ambassador of the Polish Economy 2011”, “Innovative Product 2011”, “IT Leader 2011” and “Outstanding Exporter of the Year”.
Composition of the Group’s supervisory and management authorities
Changes in the composition and structure of the Management Board in 2011
Management Board
Composition of the Management Board as at 1 January 2011:
In connection with the Azoty Tarnów Capital Group’s expansion and the necessity to develop new corporate governance principles, the organisational structure and areas of oversight have been redefined. The Management Board’s competences cover the management of all Group affairs which are not reserved by law or the provisions of the Articles of Association to the competences of the Parent’s other authorities. The Management Board operates pursuant to the provisions of law, in particular the Polish Commercial Companies Code, and the provisions of the Articles of Association and the Management Board Regulations.
Jerzy Marciniak Andrzej Skolmowski Witold Szczypiński Franciszek Bernat
President of the Management Board, Managing Director
Krzysztof Jałosiński
Vice-President of the Management Board
responsible for the strategy and development
of the Azoty Tarnów Capital Group
Andrzej Skolmowski
Vice-President of the Management Board
responsible for finance and trade
at the Azoty Tarnów Capital Group
Witold Szczypiński
Vice-President of the Management Board
responsible for production and safety
at the Azoty Tarnów Capital Group
Artur Kopeć
Member of the Management Board**
elected by employees of the Parent
elected by employees of the Parent
On 18 March 2011 the Company’s Supervisory Board adopted a resolution on appointment of Azoty Tarnów Management Board for a new three-year term, with the following composition:
Composition of the Management Board of Zakłady Azotowe w Tarnowie-Mościcach S.A. as at 6 March 2012:
Jerzy Marciniak
President of the Management Board, Managing Director Vice-President of the Management Board Vice-President of the Management Board Member of the Management Board
Jerzy Marciniak Andrzej Skolmowski Witold Szczypiński Franciszek Bernat
President of the Management Board, Managing Director Vice-President of the Management Board Vice-President of the Management Board Member of the Management Board*
elected by employees of the Parent
* On 10 May 2011 the Supervisory Board adopted a resolution on appointing Franciszek Bernat as Member of the Parent’s Management Board elected by company employees. The elections took place on 14-23 March 2011 (first round) and 4-13 April 2011 (second round). On 14 June 2011, during the Ordinary General Meeting, the Company’s Management Board was granted a vote of approval for their work in 2010. After the Management Board had been granted a vote of approval for 2010, a new term of the Company’s Management Board began on 15 June 2011, with the following composition:
Jerzy Marciniak Andrzej Skolmowski Witold Szczypiński Franciszek Bernat
President of the Management Board, Managing Director Vice-President of the Management Board Member of the Management Board Member of the Management Board
elected by employees of the Parent
On 20 October 2011 the Supervisory Board dismissed Members of the Management Board’s 8th term, while the subsequent resolution of the same date specified the number of Members of the Management Board for the 9th term as 5 persons and appointed the President of the Management Board and other Members of the Management Board for the 9th term, entrusting them with duties connected with management of the Azoty Tarnów Capital Group. During the period 20 October 2011 to 17 February 2012, the composition of the Management Board was as follows:
** In elections for the Member of the Management Board of Azoty Tarnów elected by employees, which took place on 19-29 December 2011 (first round) and 5-13 January 2012 (second round), employees elected Artur Kopeć. On 17 February 2012 the Supervisory Board of Azoty Tarnów confirmed the validity of these elections and appointed Artur Kopeć as Member of the Management Board.
Jerzy Marciniak Krzysztof Jałosiński
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President of the Management Board, Managing Director Vice-President of the Management Board
responsible for the strategy and development
of the Azoty Tarnów Capital Group
Andrzej Skolmowski
Vice-President of the Management Board
responsible for finance and trade
at the Azoty Tarnów Capital Group
Witold Szczypiński
Vice-President of the Management Board
responsible for production and safety
at the Azoty Tarnów Capital Group
Supervisory Board
Changes in the composition of the Supervisory Board in 2011:
Composition of the Supervisory Board as at 6 March 2012:
Composition of the Azoty Tarnów Supervisory Board as at 1 January 2011:
Monika Kacprzyk-Wojdyga
Chairperson of the Supervisory Board
Ewa Lis
Vice-Chairperson
Jan Wais
Secretary
Tomasz Klikowicz
Member
Artur Kucharski
Member
Marek Mroczkowski
Member
Marzena Piszczek Ewa Lis Jan Wais Agnieszka Doroszkiewicz Jacek Lewandowski Jacek Obłękowski Mirosław Potulski Tomasz Klikowicz Zbigniew Paprocki
Jacek Obłękowski
Member
Zbigniew Paprocki
Member
Ryszard Trepczyński
Member
Chairperson of the Supervisory Board Vice-Chairperson Secretary Member** Member*** Member Member*** Member** Member**
** Agnieszka Doroszkiewicz resigned as Member of the Supervisory Board on 14 June 2011 without providing a reason for her resignation. *** Mirosław Potulski and Jacek Lewandowski resigned as Members of the Supervisory Board on 18 October 2011 without providing reasons for their resignations. On the same day, the following persons were appointed to the Supervisory Board pursuant to resolutions of the Parent’s General Meeting: Artur Kucharski, Marek Mroczkowski and Ryszard Trepczyński. The resolutions came into force on the date of their adoption.
Audit Committee
Composition of the Supervisory Board as at 14 November 2011:
On 4 January 2011 the Supervisory Board appointed an Audit Committee to streamline the Board’s operations and strengthen its control over the Parent and Group. The Committee constitutes an advisory body working jointly within the structure of the Supervisory Board.
Composition of the Audit Committee as at 6 March 2012:
Marek Mroczkowski* Tomasz Klikowicz Jacek Obłękowski * Marek Mroczkowski was appointed to the Audit Committee on 9 November 2011 pursuant to a Supervisory Board resolution in order to replace Agnieszka Doroszkiewicz, who resigned from the Supervisory Board on 14 June 2011.
As part of the Supervisory Board, the main objective of the Audit Committee is to assist the Board in performing financial supervision of the Group and to provide the Board with reliable information and opinions enabling appropriate decisions to be taken concerning financial reporting, internal control and risk management. In accordance with the principles of Best Practice for Audit Committees in Poland, the performance of tasks reserved for the Audit Committee does not exempt the remaining members of the Supervisory Board from liability for their decisions or the Group’s financial reporting.
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Marzena Piszczek Ewa Lis Jan Wais Tomasz Klikowicz Artur Kucharski Marek Mroczkowski Jacek Obłękowski Zbigniew Paprocki Ryszard Trepczyński
Chairperson of the Supervisory Board**** Deputy Chairperson Secretary Member Member Member Member Member Member
**** Marzena Piszczek resigned as Member of the Supervisory Board on 13 January 2012. Marzena Piszczek, who was also Chairperson of the Supervisory Board, did not provide a reason for her resignation. On 13 January 2012 the Extraordinary General Meeting of the Company appointed Monika Kacprzyk-Wojdyga as Member of the Supervisory Board, simultaneously entrusting her with the function of Chairperson of the Supervisory Board. The resolution came into force on the date of its adoption.
Shareholding structure of Zakłady Azotowe w Tarnowie-Mościcach S.A., Group Parent
Shareholding structure as at 1 January 2011
Number of shares
% share
Number of votes
1 349 000
3.45%
1 349 000
19 200 000
49.08%
19 200 000
PGNiG SA
4 000 001
10.23%
4 000 001
Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK
3 000 000
7.67%
3 000 000
Other
11 567 420
29.57%
11 567 420
Total
39 116 421
100.00%
39 116 421
Number of shares
% share
Number of votes
20 549 000
52.53%
20 549 000
3 000 000
7.67%
3 000 000
Other
15 567 421
39.80%
15 567 421
Total
39 116 421
100.00%
39 116 421
Shareholder State Treasury of Poland Nafta Polska SA (w likwidacji)
Shareholding structure as at 15 April 2011
Shareholder State Treasury of Poland Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK
Shareholding structure as at 12 August 2011
Number of shares
% share
Number of votes
20 549 000
32.05%
20 549 000
ING Otwarty Fundusz Emerytalny
5 891 212
9.19%
5 891 212
Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK
5 384 685
8.40%
5 384 685
Other
32 290 547
50.36%
32 290 547
Total
64 115 444
100.00%
64 115 444
Shareholder State Treasury of Poland
* Total number of shares and rights to shares
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An Ordinary General Meeting of Nafta Polska S.A. (w likwidacji) took place on 1 April 2011, during which a resolution on distribution of its assets was adopted. Pursuant to a share transfer agreement entered into on 7 April 2011 with Nafta Polska S.A. (w likwidacji), the State Treasury of Poland as sole shareholder acquired 19 200 000 bearer shares. On 15 April 2011 the Parent’s Management Board received information from Polskie Górnictwo Naftowe i Gazownictwo S.A. concerning a transaction for disposal of shares held in the Parent. On 12 August 2011 an increase in the Parent’s share capital from PLN 195 582 105 to PLN 320 577 220 through the issue of 24 999 023 ordinary series C bearer shares at a nominal value of PLN 5 each was registered.
Shareholding structure of Zakłady Azotowe w Tarnowie-Mościcach S.A., Group Parent
Shareholding structure as at 23 September 2011
Number of shares
% share
Number of votes
20 549 000
32.05%
20 549 000
ING Otwarty Fundusz Emerytalny
6 730 751
10.50%
6 730 751
Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK
5 384 685
8.40%
5 384 685
Other
31 451 008
49.05%
31 451 008
Total
64 115 444
100.00%
64 115 444
Number of shares
% share
Number of votes
20 549 000
32.05%
20 549 000
ING Otwarty Fundusz Emerytalny
6 730 751
10.50%
6 730 751
Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK
5 384 685
8.40%
5 384 685
PZU SA (including PZU Życie SA)
3 374 200
5.26%
3 374 200
Other
28 076 808
43.79%
28 076 808
Total
64 115 444
100.00%
64 115 444
Number of shares
% share
Number of votes
20 549 000
32.05%
20 549 000
ING Otwarty Fundusz Emerytalny
8 284 242
12.92%
8 284 242
Aviva Otwarty Fundusz Emerytalny Aviva BZ WBK
5 384 685
8.40%
5 384 685
PZU SA (including PZU Życie SA)
3 374 200
5.26%
3 374 200
Shareholder State Treasury of Poland
Shareholding structure as at 31 October 2011
Shareholder State Treasury of Poland
Shareholding structure as at 29 December 2011 and 6 March 2012
Shareholder State Treasury of Poland
Generali Otwarty Fundusz Emerytalny
3 245 554
5.06%
3 245 554
Other
23 277 763
36.31%
23 277 763
Total
64 115 444
100.00%
64 115 444
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On 30 August 2011 series C shares were admitted through a standard procedure to trading on the main Warsaw Stock Exchange market (no. 1115/2011). On 26 September 2011 the Parent’s Management Board received a notification from ING Otwarty Fundusz Emerytalny on purchase of shares in Azoty Tarnów. On 31 October 2011 the Parent’s Management Board received a notification from Powszechny Zakład Ubezpieczeń S.A. dated 28 October 2011 that, as a result of exchanging 2 388 626 rights to ordinary shares in the Parent, on 30 August 2011 Powszechny Zakład Ubezpieczeń S.A. together with subsidiary PZU Życie S.A. had exceeded 5% of total votes at the Parent’s General Meeting.
On 29 December 2011 the Parent’s Management Board received a notification from Warsaw-based Generali Otwarty Fundusz Emerytalny that it held over 5% of total votes at the General Meeting as a result of clearing a transaction for purchase of shares in Azoty Tarnów on 27 December 2011. The number of shares held by Generali OFE before the change in shareholding amounted to 3 195 554, constituting 4.98% of share capital and 4.98% of votes at the General Meeting. These shares carried 3 195 554 votes at the General Meeting of Shareholders. The number of shares held by Generali OFE after the change in shareholding amounted to 3 245 554, constituting 5.06% of current share capital and 5.06% of votes at the General Meeting of Shareholders. These shares carried 3 245 554 votes at the General Meeting of Shareholders.
Presentation of the Group
The Azoty Tarnów Capital Group is one of the key players in the chemicals sector and focusses on engineering plastics, nitrate and multi-component fertilisers, oxo alcohols and plasticisers. Due to the effective implementation of its development strategy, the Azoty Tarnów Capital Group ranks fifth in Europe in the production of polyamides. It is also the only Polish manufacturer of polyoxymethylene (POM) and a leading EU-based manufacturer of mineral fertilisers. The Azoty Tarnów Capital Group generates the highest revenues of any Polish chemicals sector company. The Group is also the largest gas customer in Poland. 9 322 persons were employed within the Group in 2011.
Our goal is to consistently strive to become the leader in the European chemicals industry and generate outstanding financial results while at the same time building lasting relationships with market participants and fulfilling obligations under the principle of sustainable development.
Core business of the Group
Core business of the Group companies
FERTILISERS Poland: No. 1 in calcium ammonium nitrate fertilisers No. 2 in total nitrate fertilisers No. 1 in sulphate fertilisers Europe: No. 2 in multi-component fertilisers* No. 3 in mineral fertilisers**
Azoty Tarnów POLYAMIDE (PA6) No. 1 in Poland No. 5* in Europe POLYOXYMETHYLENE (POM) No. 1 in Poland NITRATE FERTILISERS No. 1 in Poland in the production of fertilisers with sulphide content. * Among integrated manufacturers
PLASTICISERS No. 1 in Poland No. 4 in Europe OXO ALCOHOLS No. 1 in Poland No. 7 in Europe POLYAMIDE (PA6) No. 1 in Poland No. 5*** in Europe POLYOXYMETHYLENE (POM) No. 1 in Poland TITANIUM WHITE No. 1 in Poland No. 11 in Europe
The rankings relate to the Azoty Tarnów Capital Group’s production capacity * Total multi-component fertilisers (ammonium phosphate, NPK, PK) ** Multi-component fertilisers + nitrate fertilisers *** Among integrated manufacturers
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Z. Ch. “Police” S.A. NPK FERTILISERS No. 1 in Poland in the production of phosphorous and multi-component fertilisers No. 3 in Europe UREA No. 2 in Poland TITANIUM WHITE No. 1 in Poland No. 11 in Europe ZAK S.A. NITRATE FERTILIERS No. 3 in Poland No. 5 in Europe in the production of calcium ammonium nitrate OXO ALCOHOLS No. 1 in Poland No. 7 in Europe PLASTICISERS No. 1 in Poland No. 4 in Europe
Group structure Automatika sp. z o.o.
Z. Ch. Police S.A.
66% interest
Koncept sp. z o.o. Remech sp. z o.o. Supra sp. z o.o. Transtech sp. z o.o. Interpark Police S.A.
Hotel Centralny sp. z o.o.
ZAK S.A.
93.48% interest
Autozak sp. z o.o.
Hotel ORW Azoty sp. z o.o.
As at 6 March 2012, the Azoty Tarnów Capital Group comprised: Zakłady Azotowe w Tarnowie-Mościcach S.A. (Azoty Tarnów) – Parent with 5 subsidiaries: ZAK S.A. with 5 subsidiaries
ZAKSA S.A. CTL Chemkol sp. z o.o.
Z.Ch. “Police” S.A. with 8 subsidiaries ATT Polymers GmbH
Biprozat sp. z o.o.
Polskie Konsorcjum Chemiczne sp. z o.o. with 9 subsidiaries
JRCh sp. z o.o.
Przedsiębiorstwo Transportu Kolejowego “KOLTAR” sp. z o.o.,
PKCH sp. z o.o.
PROREM sp. z o.o.
63.27% interest
Group Parent
Zakłady Azotowe w Tarnowie-Mościcach S.A.
Azoty Tarnów Capital Group
Zarząd Morskiego Portu Police sp. z o.o.
2011 was a year of significant changes in the Group structure. In implementing the plans contained in the Issue Prospectus of 2008, on 1 July 2011 Azoty Tarnów sold 100% of shares in subsidiary ELZAT sp. z o.o. Transactions for acquisition by Azoty Tarnów of 66% of shares in Z.Ch. “Police” S.A. and a further block of shares in ZAK S.A. were executed. In connection with the organic and inorganic growth of Azoty Tarnów, entities not directly connected with the Group’s core operations were transferred as a contribution to Polskie Konsorcjum Chemiczne sp. z o.o.
ZWRI sp. z o.o. Automatyka sp. z o.o. Aster ZAK sp. z o.o. ZAK Serwis sp. z o.o. Rekom sp. z o.o. CHEMZAK sp. z o.o.
Koltar sp. z o.o.
100% interest
ATT Polymers Gmbh 100% interest
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and 1 associate Navitrans sp. z o.o. (26.4% interest).
Events impacting on the Group 1 April
15 June
7 July
The Ordinary General Meeting of Nafta Polska S.A. (w likwidacji) adopted a resolution on distribution of its assets, as a result of which the sole shareholder in Nafta Polska S.A. (w likwidacji), the State Treasury of Poland, acquired 19 200 000 bearer shares in Azoty Tarnów at a nominal value of PLN 5 each, with total nominal value of PLN 96 000 000, on 7 April 2011.
With the intermediation of PKO BP S.A. Oddział – Dom Maklerski PKO BP in Warsaw, Azoty Tarnów announced a tender offer for sale of 49 500 000 shares in Z.Ch. “Police” S.A., carrying 66% of votes at the general meeting of Z.Ch. “Police” S.A.
Disclosure of information by the Ministry of the State Treasury that it would answer Azoty Tarnów’s tender offer for shares in Z.Ch. “Police” S.A. The Ministry also decided to sell pre-emptive rights to the new issue shares in Azoty Tarnów.
28 June
12 July
The Polish Financial Supervision Authority (Komisja Nadzoru Finansowego) approved the Azoty Tarnów issue prospectus drafted in connection with the issue of 29 337 315 series C shares with pre-emptive rights through a public offering, together with application for the admission and introduction of 39 116 421 pre-emptive rights to the offered shares, 29 337 315 rights to the offered shares and 29 337 315 offered shares on the Warsaw Stock Exchange main market.
The Ministry of the Treasury published a communique concerning successful completion of the book-building process for the 20 549 000 pre-emptive rights to new issue shares in Azoty Tarnów held by the State Treasury.
28 July
14 June Azoty Tarnów entered into a bridging loan agreement with PKO BP S.A. The aim of the loan was to finance and provide collateral for the tender offer for sale of shares in Zakłady Chemiczne “Police” S.A.
The National Depository for Securities (Krajowy Depozyt Papierów Wartościowych S.A. – KDPW) informed the Parent that during the subscription period (11-21 July 2011) for exercise of pre-emptive rights a total of 2 961 primary subscriptions had been submitted for 24 587 195 series C shares. At the same time 419 additional subscriptions were submitted for 52 092 197 series C shares. 1 August 24 999 023 series C shares were allocated to investors. 5 August
14 July The Ministry of the Treasury announced the execution of a lock-up agreement on shares in Azoty Tarnów. The agreement was entered into with DM PKO BP S.A. and IPOPEMA Securities S.A. as managers of the public offering of series C shares.
1 July Sale by Azoty Tarnów of its 100% stake in subsidiary Elzat sp. z o.o.
18 July The President of Poland’s Office for Competition and Consumer Protection (Urząd Ochrony Konkurencji i Konsumentów) issued unconditional consent for concentration, consisting of the acquisition by Azoty Tarnów of control over Z.Ch. “Police” S.A.
4 July The Management Board of Azoty Tarnów established the issue price for the offered shares at PLN 24.10 per offered share with a nominal value of PLN 5 each. The final number of offered shares was 24 999 023.
19 July Germany’s competition regulator (Budeskartellamt) issued unconditional consent for concentration, i.e. acquisition by Azoty Tarnów of control over Z.Ch. “Police” S.A.
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The Management Board of KDPW accepted 24 999 023 rights to ordinary series C bearer shares in Azoty Tarnów into the securities depository at a nominal value of PLN 5 each. 10 August The Warsaw Stock Exchange (Giełda Papierów Wartościowych w Warszawie) admitted 24 999 023 rights to ordinary series C bearer shares to regular trading on the main market. 17 August Under the tender offer for sale of shares in Zakłady Chemiczne “Police” S.A., carrying 66% of total votes, subscriptions submitted up to 16 August 2011 amounted to 56 191 155 shares in Z.Ch. “Police”, carrying a total of 56 191 155 votes at the general meeting and constituting 74.92% of total votes at the general meeting of Z.Ch. “Police” S.A.
Figures 18 August
12 October
Azoty Tarnów made full repayment of the PLN 400 million bridging loan granted by PKO BP S.A., which was incurred in order to refinance and provide collateral for the tender offer for sale of shares in Z.Ch. “Police” S.A.
The Polish cabinet expressed its consent to the non-public disposal of 23 293 330 shares in ZAK S.A. at a nominal value of PLN 5 each, constituting 40.86% of the company’s share capital through their sale to Azoty Tarnów by the State Treasury at a price of PLN 8.59 each, i.e. PLN 200 089 704.70.
19 August Azoty Tarnów executed a transaction for acquisition of 49 500 000 ordinary bearer shares in Z.Ch. “Police” at a nominal value of PLN 10 each, constituting 66% of the share capital of Z.Ch. “Police” S.A.
13 October
25 August
20 October
The Warsaw Stock Exchange established 29 August 2011 as the last day of listing for the rights to series C shares.
The Extraordinary General Meeting of shareholders in subsidiary PKCh sp. z o.o. increased the company’s share capital by PLN 85 530 550 from its previous level of PLN 100 000 to PLN 85 630 550. The shares were acquired by current shareholders.
28 August Azoty Tarnów made full repayment of the PLN 100 million bridging loan granted by PKO BP S.A., which had been incurred in order to co-finance acquisition through a private placement of 30 million new series B shares in ZAK S.A.
Total revenue from sales
PLN 5.338 billion EBIT
PLN 581 million
Azoty Tarnów executed an agreement with the State Treasury of Poland for the sale of 23 293 330 ordinary series “AA” bearer shares in ZAK S.A.
EBITDA
PLN 770 million Net profit
PLN 499 million Net profit per ordinary share
PLN 9.45
Net profit per ordinary share Azoty Tarnów
PLN 4.26
Net profit per ordinary share Z.Ch. “Police” S.A.
PLN 4.28
28 September Negotiations took place between the Minister of the State Treasury and Azoty Tarnów concerning the sale price for shares in ZAK S.A., as a result of which it was established that the total price for a block of 23 293 330 shares in ZAK S.A., constituting 40.86% of share capital, was PLN 200 089 704.70, i.e. the equivalent of PLN 8.59 per share.
Group employment level as at the end of 2011
9 322 persons
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Art is an abstract notion, like the flow of capital through the phases of production and sales. We can however examine the geometry and properties of the materials used. In this way we discover a synergy linking a mix of various resources and parts to create one unified whole. If we are astute, we begin to see the difference between an ordinary object and a work of art.
the power of synergy Azoty Tarn贸w Capital Group companies
Azoty Tarnów Our greatest capital is the experience and know-how of our employees and the trust of business partners and investors. These are the sources of the impressive financial results generated at the Azoty Tarnów Capital Group. These are deciding factors in the success of the company’s development strategy in the global chemicals market.
Core significance and role within the Group As the Parent of the Azoty Tarnów Capital Group, Zakłady Azotowe w TarnowieMościcach S.A. is one of the largest Polish chemicals enterprises. The company is one of the oldest chemicals companies in Poland and one of the largest industrial enterprises in Lesser Poland. The company plays a significant role in the material, social and economic development of the entire region. Azoty Tarnów is the largest manufacturing facility, employer, investor and taxpayer in the region, which means that the company is not just seen by the local community as an industrial facility but as a partner in dealing with a multitude of social issues. The decision to construct the factory was taken on the initiative of Polish President Ignacy Mościcki on 12 March 1927 and its implementation was one of the largest Polish economic investments in the inter-war period. Conducting
uninterrupted operations for 85 years, the company has achieved a stable position in the domestic and global chemicals markets – it is a recognised brand name for products and technologies present on markets in 41 countries worldwide. As one of the first Polish companies to do so, the company implements the recommendations of the UN Framework Convention on Climate Change (1997, the Kyoto Protocol) through a Polish-Japanese joint implementation project to reduce greenhouse gas emissions (Emission Reduction Units). Furthermore, Azoty Tarnów applies original and modern technologies to protect the environment and remove chemical hazards.
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Azoty Tarnów A reliable capital markets participant The company debuted on the Warsaw Stock Exchange on 30 June 2008. Shares in the company are listed on the WSE primary market in a continuous trading system and are included in the WIG, mWIG40 (up to 16 December 2011 sWIG80), industry-specific WIG-Chemia and RESPECT Indexes. Beginning from the company’s IPO, internal procedures are in force regulating the drafting, approval, publication and recipients of separate and consolidated periodic reports, alongside a consolidated information policy. Acting in accordance with the highest standards for capital market communications and corporate governance, Zakłady Azotowe w TarnowieMościcach S.A. observes the principles of “Best Practices for Companies Listed on the WSE”, amended through the Resolution of the Stock Exchange Council of 19 October 2011, and abides by the principles of corporate governance contained in the Organisational Regulations of 22 July 2008. Since 2009 the company has been a participant in the elite RESPECT Index – the CEE region’s first stock market index representing companies operating in accordance with the principles of corporate social responsibility. After passing a three-stage verification process conducted by auditors from the WSE, SEG and Deloitte, on 31 January 2012 the company received a certificate for the fourth time confirming the presence of Zakłady Azotowe w Tarnowie-Mościcach S.A. in the exclusive group of 23 WSE issuers included in the RESPECT Index. In 2011 the company also continued its participation in the “10 for 10” programme of the Association of Private Investors, aimed at creating and optimising the highest standards in communication between listed companies and investors. Supervised by the programme organiser, the company’s activities have been and are performed with observance of the best standards in financial communication on international markets and the 10-year experience of the Association of Private Investors in this field resulting from the expectations and suggestions of investors themselves.
The total number of shares in Azoty Tarnów as at 12 August 2011 was 39 116 421 bearer shares: 24 000 000 series AA shares at a nominal value of PLN 5 each, 15 116 421 series B shares at a nominal value of PLN 5 each. In connection with an amendment made to the company’s articles of association on 12 August 2011 concerning an increase of share capital within authorised capital, an increase in the Parent’s share capital from PLN 195 582 105 to PLN 320 577 220 through the issue of 24 999 023 ordinary series C bearer shares of a nominal value of PLN 5 each was registered. The current total number of shares is
64 115 444 19
Use of proceeds from the share issue As at the date of publishing the consolidated financial statements for 2011, Azoty Tarnów was using funds from the public offering, held in fixed-term deposits adapted to the anticipated deadline for achievement of issue objectives. PLN 846 469 000 for financing a part of expenditures under achievement of issue objectives, including: PLN 38 000 000 for investment tasks implemented under “Optimisation of the Product Portfolio and the Nitrate Fertiliser Sales System” – full amount planned in the issue prospectus, PLN 93 525 000 for tasks implemented under “Modernisation of the Caprolactam Plant together with Construction of a New Hydrogen Facility”, PLN 23 525 000 for “Intensification of the Modified Plastics Plant” PLN 19 921 000 for increasing polyamide production capacity, the “Polyamide II Plant” (including the acquisition of ATT Polymers GmbH), PLN 569 250 000 for acquisition of 66% of shares in Z.Ch. “Police” S.A., PLN 102 248 000 for acquisition of 40.86% of shares in ZAK S.A. from the State Treasury, PLN 15 980 000 to cover the net costs of the equity issue. In 2011 the funds were primarily used to implement the objectives of the last share issue, i.e. financing acquisition of a majority stake in Z.Ch. “Police” S.A. and the remaining shares in ZAK S.A. held by the State Treasury. The remainder was used to implement objectives from the preceding share issue, i.e. “Modernisation of the Caprolactam Plant together with Construction of a New Hydrogen Facility” and “Intensification of the Modified Plastics Plant”. Objectives from the last share issue were fully completed in 2011 in accordance with the objectives outlined in the issue prospectus, and proceeds were used as designated.
Azoty Tarnów Operational areas and specialisation Zakłady Azotowe w Tarnowie-Mościcach S.A. is an integrated manufacturer of engineering plastics and raw materials for their production (caprolactam), together with mineral fertilisers manufactured using traditional milling and modern mechanical technology. The company is an experienced manufacturer and supplier of highly specialised catalysers used in the chemicals industry. It is also one of Poland’s largest exporters of chemical products. Areas of company operations: Manufacture and trade in the following product groups: caprolactam (a semi-finished product for manufacture of polyamide 6; ammonium sulphate is produced as a by-product), sold in liquid and crystal form, engineering plastics: polyamide 6, polyoxymethylene, modified plastics, mineral fertilisers: calcium ammonium nitrate, ammonium nitrate, saletrosan, ammonium sulphates. The generation, transmission and distribution of electricity. The generation and distribution of heat. The drawing and treatment of water.
The company’s main area of operations is production, associated services and trade in engineering plastics and raw materials for their synthesis. In this field the company is a highly-regarded manufacturer and supplier of engineering plastics marketed as Tarnamid®. The company sells 12 types of Tarnamid® tailored to specific customer requirements. The product portfolio also includes a range of modified Tarnamid A (PA66) construction plastic variants in granulated form. The second group of plastics manufactured by the company are natural, coloured and modified acetal copolymer (polyoxymethylene, POM), marketed under the registered trademark Tarnoform® (POM). The company also markets various types in accordance with customer demand, mainly in the motor, household appliance, electro-technology, construction, furniture production, machine part, sports equipment and accessories industries. Azoty Tarnów also manufactures Tarnodur A (PBT) – modified varieties of engineering plastics in granulated form manufactured on the basis of thermoplastic polyesters: polybutylene terephthalate (PBT) and Tarnoprop C and H (PPC, PPH) – modified variants in granulated form manufactured on the basis of ethylene-propylene co- and homopolymers. The company is one of the largest manufacturers of nitrate fertilisers in Poland, producing these using two types of granulation. Depending on the technology used, specific types of fertilisers are distinguished as “standard” (milling – smaller, varied granules) and “macro” (mechanical granulation – uniform). The following products are included in the company’s fertiliser range: Saletrosan® 26 macro, calcium ammonium nitrate 27 standard, calcium ammonium nitrate 27 macro, calcium ammonium nitrate with boron 27 + B standard, calcium ammonium nitrate with boron 27 + B macro, ammonium nitrate 32 macro, ammonium nitrate 30 macro, ammonium sulphate AS 21 and urea and ammonium nitrate solution (UAN). A significant area of the company’s operations is the manufacture of chemicals for the chemicals industry. These products are processed further mainly in the form of the raw materials needed for the manufacture of plastics (caprolactam), finished goods (e.g. carbon dioxide used to carbonate sparkling drinks) and are also used as elements in the operation of industrial installations (e.g. liquid ammonia is used as a coolant in refrigeration installations). The company provides the following services: laboratory services: environmental analysis (physical and chemical analysis of water, sewage, wastewater, soil and waste), testing of plastics, testing of packaging materials made from plastics, physical and chemical analysis of organic and non-organic products, analysis of foodstuffs, physical and chemical analysis for the requirements of the REACH system. services covering the production, transmission and distribution of electricity and heat. The operations of Zakłady Azotowe w Tarnowie-Mościcach S.A. organisational units in the drawing and treatment of water are also essential to ensure the efficiency of technological processes within core operational areas.
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Azoty Tarnów
Calendar of the most significant awards and distinctions
20 January Azoty Tarnów was selected winner in the Pillars of the Polish Economy ranking 2010 and was recognised as a key company in its region with high significance for the local community. This distinction was awarded by “Puls Biznesu” and the “TNS Pentor” Research Institute.
for a project covering the construction and technology of a mechanical nitrate fertiliser granulation unit.
16 June As recognition for achievements in the development of exports and the strengthening of Poland’s image internationally, the Association of Polish Exporters presented Azoty Tarnów with its third consecutive medal and named the Group “Leader in Polish Export 2011”.
14 March During Poland’s largest agricultural fair – Agrotech 2011 – the Azoty Tarnów Capital Group was presented with a gold medal for ammonium nitrate fertilisers.
25 January
14 July 19 April
For the second time Azoty Tarnów was included in the elite group of listed companies comprising the RESPECT Index. 10 February Azoty Tarnów was honoured with the title “Most Interesting of the Best Implementations in Industry” for the innovative IT sourcing project implemented in cooperation with Hewlett-Packard Polska.
In meeting the high requirements and criteria of the RESPECT Index, for the third time Azoty Tarnów found itself in this elite group of listed companies.
Saletrosan® 26 macro, a standard fertiliser manufactured at Azoty Tarnów, received a Diamond Statuette from farmers during the “Polish Fertilisers” awards organised by the magazine “Zielony Sztandar”. Azoty Tarnów was also presented with the award for “Company of the Year” funded by Waldemar Pawlak, Deputy Prime Minister and Minister of the Economy.
29 September Azoty Tarnów received an award for “IT Leader 2011” in a prestigious competition organised by Computerworld within the “industry” category as a company making the smartest and most effective use of ICT solutions in its business operations.
16 May 24 February Azoty Tarnów Capital Group companies received prestigious awards during the Expochem 2011 4th International Chemicals Industry Fair and Conference. Azoty Tarnamid received the Grand Prix award in the “chemical product” category for flame retardant, halogenfree Tarnamid, ZAK S.A. was awarded the Grand Prix for AdBlue® in the “environmental protection” category and Biprozat sp. z o.o. received an award in the “chemical technologies” category
For the third time Azoty Tarnów was named “Ambassador of the Polish Economy”, this time in the category “Creator of 21st Century Solutions”. The awards are organised by Business Centre Club under the patronage of Poland’s Ministry of Foreign Affairs.
7 November The organisers of the 2nd SITPChem “Leader in Restructuring” awards decided to present the statuette to Azoty Tarnów in the chemicals company category.
7 June 24 November The Azoty Tarnów Capital Group received an award in the fertilisers category for “Ammonium Sulphur Base” during the “Polskie Zboża” agricultural fair.
During the 7th edition of “Outstanding Exporter of the Year 2011” Azoty Tarnów was presented with an award for “Export Hit of 2011” in the large
21
chemicals corporation category. The polyamide natural Tarnamid - PA6 - also emerged as a hit in Polish export. At the same time the company was named “Outstanding Exporter of the Year” and was awarded the Association of Polish Exporters Cup. 28 November Azoty Tarnów was named “Pearl of the Polish Economy” in a ranking by economicsfocussed magazine “Polish Market”.
Zakłady Chemiczne “Police” S.A.
In 2011 the Z.Ch. “Police” S.A. Group comprised 8 subsidiaries and 2 companies with a Z.Ch. “Police” S.A. minority interest, including:
Importance and role within the Group For over 40 years Z.Ch. “Police” S.A. has been one of Europe’s leading fertiliser manufacturers and one of the largest Polish exporters. The company plays a key role in the economic and social life of West Pomerania. It is one of the few European chemicals companies with dedicated port infrastructure located in its immediate surroundings. This port infrastructure includes two docks for loading loose materials and an ammonia and sulphuric acid loading station. From a freight loading viewpoint, Port Police holds fourth place amongst Polish ports. Another of the company’s attributes is its proximity to Germany, which alongside Poland is the primary sales market for Z.Ch. “Police” S.A.
6 companies in which Z.Ch. “Police” S.A. holds a 100% interest which were formed through carving out operations not directly connected with the manufacturing process implemented by the issuer: Automatika Sp. z o.o., Centrum Sp. z o.o., Koncept Sp. z o.o., Remech Sp. z o.o., Transtech Sp. z o.o. and Supra Sp. z o.o. (w likwidacji).
The company’s shares have been listed on the Warsaw Stock Exchange since 14 July 2005. Its primary operations within the Azoty Tarnów Capital Group are focussed in three product areas: multicomponent mineral fertilisers, titanium white and chemicals.
2 companies with a majority interest held by Z.Ch. “Police” S.A., created with the Municipality of Police as main co-shareholder in order to manage non-essential assets and to use held by the shareholders (Infrapark Police S.A.) for investment purposes as well as the management and infrastructural
development of the Police Sea Port (Zarząd Morskiego Portu Police Sp. z o.o.).
2 companies in which Z.Ch. “Police” S.A. holds a minority interest are Budchem Sp. z o.o. and Kemipol Sp. z o.o. Automatika sp. z o.o.
100%
Centrum sp. z o.o.
100%
Koncept sp. z o.o.
100%
Remech sp. z o.o.
100%
Supra sp. z o.o. (w likwidacji)
100%
Transtech sp. z o.o.
100%
Zarząd Morskiego Portu Police sp. z o.o.
90%
Infrapark Police S.A.
54.43%
budchem sp. z o.o.
48.96%
Kemipol sp. z o.o.
33.99%
Centrum Sp. z o.o. was acquired by Automatika Sp. z o.o. in 2012.
Thanks to a strong reputation and the highest product quality, we are increasing the Group’s value in global chemicals markets. We are one of only a handful of European chemicals companies which have their own port infrastructure. The stable economic situation of the Azoty Tarnów Capital Group is an opportunity for further development of highly specialised technologies and the continuation of restructuring processes increasing our company’s effectiveness. 22
Zakłady Chemiczne “Police” S.A.
Company Management and Supervisory Boards with changes made in 2011 Composition of the Management Board as at 1 January 2011:
Jacek Głowacki Ireneusz Marciniak Janusz Motyliński
Vice-President of the Management Board, Commercial Director, acting President of the Management Board Vice-President of the Management Board, Restructuring Director Vice-President of the Management Board, Organisation and Management Director
On 19 January 2011 the company’s Supervisory Board appointed Krzysztof Jałosiński as President of the Management Board effective as of 1 February 2011 and Wojciech Naruć as Vice-President of the Management Board effective as of 24 January 2011.
SHAREHOLDER
Composition of the Management Board as at 31 December 2011:
Krzysztof Jałosiński Jacek Głowacki Ireneusz Marciniak Janusz Motyliński Wojciech Naruć
Shareholders holding more than 5% of votes at the General Meeting As at 31 December 2011
President of the Management Board, Managing Director Vice-President of the Management Board for Trade Vice-President of the Management Board for Infrastructure Vice-President of the Management Board for Quality and Safety Vice-President of the Management Board for Finance
On 30 January 2012 Vice-President of the Management Board for Trade Jacek Głowacki resigned from the board, and from that date the composition of Z.Ch. “Police” S.A.’s Management Board has been as follows:
Krzysztof Jałosiński
President of the Management Board, Managing Director
Ireneusz Marciniak
Vice-President of the Management Board for Infrastructure
Janusz Motyliński
Vice-President of the Management Board
for Quality and Safety
Wojciech Naruć
Vice-President of the Management Board for Finance
No. of shares
Share in capital
No. of votes
49 500 000
66.000%
49 500 000
Agencja Rozwoju Przemysłu S.A.
6 607 966
8.811%
6 607 966
State Treasury of Poland
5 305 689
7.074%
5 305 689
13 586 345
18.115%
13 586 345
2010
2011
Zakłady Azotowe w TarnowieMościcach S.A.
Other shareholders
Z.Ch. “Police” S.A. share prices in 2011 Share price statistics Since IPO
Supervisory Board as at 1 January 2011:
Highest
25.34
7.70
Marek Mroczkowski Marcin Likierski Wiesław Markwas Jerzy Majchrzak Szymon Ruta Anna Tarocińska
Lowest
4.20
4.60
7.60
Average
10.04
5.98
11.36
92 351
113 141
Chairperson of the Supervisory Board Deputy Chairperson of the Supervisory Board Secretary Member Member Member
Average trading volume
On 17 October 2011 Chairperson of the Supervisory Board of Z.Ch. “Police” S.A. Marek Mroczkowski tendered his resignation. On 19 October 2011 Szymon Ruta resigned as Member of the Supervisory Board of Z.Ch. “Police” S.A. On 20 October 2011, pursuant to resolutions of the Extraordinary General Meeting of Z.Ch. “Police” S.A., Jerzy Góra and Jerzy Marciniak were appointed to the 5th joint term of the Supervisory Board. On 8 November 2011 Jerzy Marciniak was elected Chairperson of the Supervisory Board. Supervisory Board as at 31 December 2011 and 6 March 2012:
Jerzy Marciniak
Chairperson of the Supervisory Board
Marcin Likierski
Deputy Chairperson of the Supervisory Board
Wiesław Markwas
Secretary
Anna Tarocińska
Member
Jerzy Majchrzak
Member
Jerzy Góra
Member
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122 546
15.30
Despite the weak economic situation on the Warsaw Stock Exchange in 2011, shares in Z.Ch. “Police” S.A. generated an annual rate-of-return of 33%. Both the average closing price and average session volume were not merely higher than in 2010 but higher than historical averages since their listing commenced. The company observes the principles of “Best Practices for Companies Listed on the WSE”, amended through the Resolution of the Stock Exchange Council of 19 October 2011, with the exception of Principle no. 2 of Part II of the “Best Practices”, in accordance with which the company should ensure that a version of its website is available in English, at least to the extent indicated in Part II, point 1. The company has a website in English, but it is not organisationally prepared to maintain this to the extent specified in the content of the principle. The company’s objective is to create the organisational conditions ensuring full implementation of this principle.
Zakłady Chemiczne “Police” S.A. Operational areas and specialisation The core operating area of Z.Ch. “Police” S.A. is the manufacture of chemical products at three Business Units: Fertilisers, Nitro and Pigments.
Fertilisers Business Unit The Fertilisers Business Unit is the largest unit within Zakłady Chemiczne “Police” S.A., both with regard to revenues and production volumes. Production installations manufacture over a million tonnes of multi-component NP, NPK and NS fertilisers, together with phosphoric and sulphuric acid. Considering this product range, it is the largest manufacturer in Poland and only of the largest in Europe. The Fertilisers Business Unit has been supplying farmers in Poland, Europe, South America and Africa for 42 years. The standard Fertilisers Business Unit products are fertilisers sold under the trade name POLIFOSKA®. This is the leading brand in the Polish multi-component fertilisers market. In Poland POLIFOSKA® is a synonym for multi-component fertilisers and boasts in excess of a 40% market share. It is associated with high market quality fertilisers which bring multitude benefits to users. Product marketed under this brand have a high concentration of pure components, the fertiliser granules are chemically uniform, they feature a high level of assimilability, optimal granulation and application properties, beneficial prices of pure components, wide range of NPK fertilisers, a developed distribution network and after-sales support, marketing and sales.
Nitro Business Unit The Nitro Business Unit is one of the leading manufacturers of ammonia and urea in Poland. Products are allocated to the Polish market and for export. Urea is sold in the agricultural segment and for application in technical processes. A significant aspect of operations is the manufacture and sale of AdBlue® - a urea solution used in the automotive industry to reduce nitrogen oxide in diesel engines. Stable development in the European market for AdBlue® is forecast over the coming years. The range of products on offer at the Nitro Business Unit is supplemented by ammonia solution. Manufacture of the above products takes place at a modernised manufacturing facility with observance of particular care for workplace safety and environmental protection.
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Pigments Business Unit Core operations at the Pigments Business Unit cover the manufacture and sale of titanium white and associated semi-finished products: iron (II) sulphate and post-hydrolytic acid (a by-product of titanium white production). The unit holds a leading position in the domestic titanium white market and has a well-developed export sales network. Titanium dioxide pigments are sold under the trade name TYTANPOL® and are manufactured on the basis of modern technology which fulfils rigorous environmental requirements. Due to their universality, effectiveness, permanence, application safety and lack of toxic properties, they are widely used to provide products with exceptional decorative and protective properties. Titanium white has a range of uses including the production of paints and varnishes, printer ink, plastics, paper and laminates. The company’s continuously high quality and professional application advisory have been recognised with awards and distinctions (including Europrodukt 2004, European Medal 2004 and a “Highest Quality Guarantee” certificate 2007).
A source of essential support for the company’s operations is the Energy Centre, which produces technical steam, electricity and compressed air. The company also maintains an acid waste treatment centre and landfill site.
Zakłady Chemiczne “Police” S.A.
Calendar of significant events
January 2011 Execution of an agreement for purchase of phosphorite with Compagniedes Phosphates de Gafsa Tunisia (seller) and an agreement with Eramet Titanium & Iron AS Norway for purchase of titanium slag. February 2011 Execution of an annex to the multi-purpose loan agreement with PKO Bank Polski of 30 January 2007. Pursuant to this annex, the credit limit period was extended to 31 December 2012. March 2011 During the Agrotech Fair in Kielce Z.Ch. “Police” S.A. was awarded a cup in the “export” category. June 2011 Implementation of an electronic invoicing process. The procedure covers the areas of sales, accounting, IT, legal support and control at the company. It additionally ensures the authenticity and integrity of documents through introducing an electronic signature giving a further guarantee of document origin. July 2011 Implementation of the Balanced Scorecard (BSC) as a new means of designating and implementing the company’s strategic objectives. The system
enables monitoring and assessment of the degree to which the company’s, business units’ and support centres’ objectives are met. It enables an increase in the company’s market value through the effective implementation of long-term plans; start-up of the Zakłady Chemiczne “Police” S.A. Facebook page. August 2011 Execution of a new collective labour agreement. Port Police obtains confirmation of a certificate on conformity of protection at Port Police with international regulations on the protection of maritime traffic and sea ports. September 2011 The company regulates its PLN 82.6 million in liabilities towards Polskie Górnictwo Naftowe i Gazownictwo S.A. arising at the end of 2009 for gas supplies. The payment of liabilities from current funds was possible due to a significant improvement in the company’s finances, the introduction of a restructuring programme within the company and the entry of Zakłady Chemiczne “Police” S.A. into the Azoty Tarnów Capital Group. Recommencement of the second ammonia production line. A return to full production capacity at the ammonia installation was another significant event in stabilising operations at Z.Ch. “Police” S.A.
October 2011
December 2011
The execution of an agreement with Gaz System S.A. on provision of gas fuel transmission services. The company also executed an agreement for supply of natural gas by the German energy company E.On Ruhrgas; introduction of a new organisational structure consisting of the division into three principle areas – Corporate Centre, Core Business and Support. The company’s new model takes into consideration the latest trends in development of management systems and also fulfils the utility criterion; within implementation of the “Zakłady Chemiczne “Police” S.A. Restructuring Plan”, under outsourcing of corporate support, IT services were transferred to Hewlett-Packard Polska sp. z o.o. Recertification of the Workplace Health and Safety System in accordance with the requirements of BS OHSAS 18001 and PN-N 18001.
The company repaid a loan granted by Agencja Rozwoju Przemysłu S.A. under a public assistance approved by the European Union (PLN 150 million). The ARP loan was repaid from funds obtained under a PLN 141.1 million loan granted to the Azoty Tarnów Capital Group by PKO Bank Polski and from the company’s own funds. This meant that the company ceased to be covered by public assistance. New Bonus Regulations were signed and introduced, aimed at supporting implementation of strategies for the company, Business Units and support centres. The new bonus system entered into force on 1 January 2012. The idea behind the new bonus system, based on the BSC, is to ensure the achievement of the company’s business success through employees’ appropriate concentration on the most significant strategic objectives, where they have the highest level of impact.
November 2011 Zakłady Chemiczne “Police” S.A. was awarded the distinction “Outstanding Exporter of 2011”, granted each year by the Association of Polish Exporters; the company was named “Great Pearl of the Polish Economy” by the Institute of Economics at the Polish Academy of Sciences in cooperation with Oficyna Wydawnicza “Rynek Polski” Sp. z o.o., publisher of monthly magazine “Polish Market”.
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ZAK S.A. Importance and role within the Capital Group the international organisation Fertilizers Europe. Within the Azoty Tarnów Capital Group, ZAK S.A. fulfils a significant role as a supplier of ammonia and nitric acid – key raw materials for the manufacture of fertilisers. It is a specialist manufacturer of plasticisers for plastics, particularly PVC, and raw materials for their manufacture, oxo alcohols and phthalic anhydride.
For over 60 years ZAK S.A. has been a leading Polish manufacturer of nitrogen fertilisers and chemicals. The company was formed on the basis of a government decree of 1 January 1949. It developed and, as the first company in Poland to do so, implemented key chemical products such as urea, phthalic and maleic anhydride and oxo alcohols in industrial
ZAK S.A. is the parent of a group, which as at 1 January 2011 comprised 9 subsidiaries, including 7 consolidated companies in which the company holds a 100% interest. This group mainly covers companies separated from the ZAK S.A. organisational structure conducting auxiliary and service operations within the company. The company holds 25% of shares in Polskie Konsorcjum Chemiczne sp. z o.o., a company established in 2009 for the implementation of consolidation objectives within the Polish chemicals industry and which currently plays the key role of consolidator within the Azoty Tarnów Capital Group.
production. ZAK S.A. experts played an active role in setting up subsequent chemical plants in Poland, participated in the development of Best Available Techniques for the chemicals industry and developed European legislation connected with the REACH legislative package. Due to the implementation of new reporting standards, in 2011 the company joined
Through a resolution of the Extraordinary General Meeting of ZAK S.A. of 19 October 2011,
26
subsidiaries ASTER ZAK sp. z o.o., REKOM sp. z o.o., ZAK SERWIS sp. z o.o. and Chemzak sp. z o.o., with a total market value of PLN 29 643 550, were transferred as a contribution in kind to the increased share capital of Polskie Konsorcjum Chemiczne sp. z o.o. In addition, amounts constituting the equivalent of the dividend for 2010 due from subsidiaries REKOM sp. z o.o. and ZAK SERWIS SP. z o.o., totalling PLN 1 785 700, were contributed. In exchange for the cash and in-kind contributions, ZAK S.A. acquired 628 585 new shares in Polskie Konsorcjum Chemiczne sp. z o.o., valued at PLN 50 each, constituting a 36.73% stake in the increased share capital of Polskie Konsorcjum Chemiczne sp. z o.o. In connection with consolidation activities within the Azoty Tarnów Capital Group, the ZAK S.A.
Autozak sp. z o.o. Hotel Centralny sp. z o.o. Hotel ORW Azoty sp. z o.o. Chemkol sp. z o.o. ZAKSA S.A.
100% 100% 100% 51% 50%
Company Management and Supervisory Boards with changes made in 2011
ZAK S.A.
Composition of the Management Board as at 1 January 2011:
Krzysztof Jałosiński Wiesław Skwarko Sabina Nowosielska Mirosław Ptasiński
President of the Management Board, Managing Director Vice-President of the Management Board, Restructuring and Services Director Member of the Management Board, Trade and Marketing Director Member of the Management Board, Chief Financial Officer
Composition of the Management Board 1 February – 28 March 2011:
Jerzy Marciniak Wiesław Skwarko Sabina Nowosielska Mirosław Ptasiński
President of the Management Board, Managing Director Vice-President of the Management Board Member of the Management Board Member of the Management Board, Chief Financial Officer
Composition of the Management Board 29 March – 31 December 2011 and as at 6 March 2012:
Jerzy Marciniak
President of the Management Board, Managing Director
ZAK S.A. shareholding structure as at 1 January 2011:
52.62% Zakłady Azotowe w Tarnowie-Mościcach S.A. 37.91% Nafta Polska S.A. (w likwidacji) 2.95%
State Treasury of Poland
6.52%
entitled employees, their inheritors and persons who acquired shares from entitled employees or their inheritors
ZAK S.A. shareholding structure between 8 April 2011 and 12 October 2011: On 8 April 2011, pursuant to a share transfer agreement of 7 April 2011 executed between Nafta Polska S.A. (w likwidacji) and the State Treasury of Poland, 37.91% of bearer shares in ZAK S.A. were transferred to the State Treasury of Poland. An ordinary general meeting of Nafta Polska S.A. (w likwidacji) took place on 1 April 2011, during which the company’s liquidation statements were approved and a resolution was adopted on division of the company’s assets. As a result of the division, ZAK S.A.’s shareholding structure was as follows:
Wiesław Skwarko
Vice-President of the Management Board
Sabina Nowosielska
Member of the Management Board
52.62% Zakłady Azotowe w Tarnowie-Mościcach S.A.
Mirosław Ptasiński
Member of the Management Board, Chief Financial Officer
40.86% State Treasury of Poland
Krzysztof Zuzański
Member of the Management Board*
6.52%
* On 12 January 2012 the Supervisory Board dismissed Krzysztof Zuzański from the position of Member of the Management Board. On the same day Member of the Management Board Adam Leszkiewicz was conditionally appointed. On 21 February 2012, after fulfilling conditions, Adam Leszkiewicz took up a position as Member of the Management Board of ZAK S.A..
ZAK S.A. shareholding structure from 13 October 2011 to 31 December 2011: 93.48% Zakłady Azotowe w Tarnowie-Mościcach S.A.
Composition of the Supervisory Board as at 1 January 2011:
Jerzy Marciniak Małgorzata Słomko Sebastian Bogusławski Wojciech Kura Andrzej Skolmowski Janusz Skórski Mirosław Sotel Anna Wyroba Monika Zrajewska
6.52%
Chairperson of the Supervisory Board Deputy Chairperson of the Supervisory Board Member Member Member Member Member Member Member
Chairperson of the Management Board Deputy Chairperson of the Supervisory Board Member Member Member Member Member Member
Between 1 January 2011 and 31 December 2011 the composition of the Supervisory Board changed six times. Composition of the Supervisory Board as at 6 March 2012:
Andrzej Skolmowski
Chairperson of the Management Board
Jerzy Koziara
Deputy Chairperson of the Supervisory Board
Wojciech Lubiewa-Wieleżyński
Member
Mirosław Potulski
Member
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entitled employees, their inheritors and persons who acquired shares from entitled employees or their inheritors
On 13 October 2011 the Ministry of the Treasury and Azoty Tarnów executed an agreement concerning sale of 40.86% of shares in ZAK S.A. for PLN 200 089 704.70. The sale of this block of shares to Azoty Tarnów enabled the full consolidation of both companies. After acquisition of the above shares, Zakłady Azotowe w Tarnowie-Mościcach S.A. held the right to 93.48% of votes at the company’s general meeting.
Composition of the Supervisory Board as at 31 December 2011:
Andrzej Skolmowski Jerzy Koziara Wojciech Kura Wojciech Lubiewa-Wieleżyński Mirosław Potulski Janusz Skórski Mirosław Sotel Anna Wyroba
entitled employees, their inheritors and persons who acquired shares from entitled employees or their inheritors
Through consolidating with the Azoty Tarnów Capital Group, we have joined a group of companies fully benefitting from the capital raising opportunities created by Azoty Tarnów’s presence on the Warsaw Stock Exchange. Contributing to the generation by the Group of outstanding financial results and profits for its shareholders, we are one of the leaders in the process of modernising and strengthening competition within the Polish chemicals industry.
ZAK S.A. Operational areas and specialisation The company’s primary activity is the manufacture of fertilisers and nitrogen compounds, organic and non-organic chemicals and other chemical products. ZAK S.A. is the sole manufacturer of oxo alcohols and plasticisers for plastics in the Polish market. The company is a significant manufacturer of nitrogen fertilisers for agriculture, horticulture and fruit farming, known by their trademarks: Salmag® (a mixture of ammonium nitrate with calcium carbonate and magnesium carbonate), Salmag z borem® (a mixture of ammonium nitrate with boric acid, calcium carbonate and magnesium carbonate), Salmag® with sulphur (a mixture of ammonium nitrate with calcium sulphate – a macro-component needed in the nutrition of crops), Kędzierzyńska Saletra Amonowa® (a nitrogen fertiliser with rapid and long-lasting effect, enriched with magnesium and calcium), Calcium ammonium nitrate (a universal mechanically granulated mixture of ammonium nitrate with calcium carbonate and magnesium carbonate), 46% granulated urea (the most concentrated fertiliser available in the market). Within the chemicals sector ZAK S.A. manufactures: Nitric acid, Isobutyl aldehyde, n-Butanal, Anhydrous ammonia, Ammonium hydroxide, Maleic anhydride, Urea reagent, Crystal urea, Technical urea solution, Compressed hydrogen. Within this group the company is also a manufacturer of AdBlue®, an additive used for selective reduction of nitrogen oxide in diesel engines equipped with SCR systems. The comprehensive range of products manufactured by ZAK S.A. is aimed at the following sectors: agriculture, construction, chemical processing and the plastics industry. The company manufactures the following plasticisers: Oxoplast® O (dioctyl phthalate – DEHP) – used in the manufacture of PVC, Oxoplast® IB (diisobutyl phthalate – DIBP) – used to soften plastics, Oxoplast® PH (di(2-propyl heptyl) phthalate – DPHP) – used in the processing of plastics and in the paint and varnish industry, Oxoplast® OT (di(2-ethylhexyl) terephthalate – DEHT) – used in the processing of plastics as a plasticiser, as well as in the paint and varnish industry.
The OXO alcohols manufactured by ZAK S.A. are used in the production of plasticisers, amino resins and varnishes. They are also used as a semi-finished product for organic synthesis, an additive to oils, a raw material for the manufacture of solvents and co-solvents and also for the manufacture of components for the production of coating agents. The OXO alcohols manufactured by the company include: 2-ehylohexanol (2-EH) is used in the textile and refining industries and for paints and dyes, Izobutanol is used as a semi-finished product for organic syntheses, for the manufacture of solvents, herbicides and coating agents, n-Butanol is used in the manufacture of amino resins and varnishes and as a semi-finished product for organic syntheses, Octyl alcohol F (a mixture of 2-ethylhexanol and high-molecular compounds) is used as a flotation agent. In order to strengthen its market position, the company cooperates with numerous research institutes and engineering companies. In 2011 the company commenced new initiatives and continued work from previous periods in two primary fields: improvement of chemical and technical processes concerning: more effective use of purge gas from the ammonia synthesis installation, research on the impact of dolomite contaminants on the quality of granulated fertilisers, concept for improvement in the oxo installation through technological changes in the trimer assembly, change in the raw material base (from benzene to butane) at the maleic anhydride acid facility. rollout of new products and the construction of new installations relating to: the modernisation of industrial power technology at ZAK S.A., a concept for the modernisation of the urea installation, the commencement of urea and ammonium nitrate solution (UAN) production at ZAK S.A., the production of a new DEHT di(2-ethylhexyl) terephthalate product using the existing installation, a concept for hydrogenating currently manufactured FDO to DIOCH, a concept for commencing manufacture of specialty esters at ZAK S.A.
In continuing its development activities, the company intends to implement integrated initiatives for maximisation of the sale of fertilisers and oxo alcohols. In order to achieve this goal, in 2012 the company plans to implement a new product, Oxoplast® OT, to regular production and regular supply in the domestic market.
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ZAK S.A. Calendar of significant events January 2011 Audit re-certifying compliance with the requirements of standards ISO 9001:2008, PN- N-18001:2004, OHSAS 18001:2007 and ISO 14001:2004; accession to the Fertilizers Europe organisation, implementation of the reporting mechanism resulting from membership. Commencement of an advance process control system for the oxo alcohol installation; ZAK S.A. was awarded with a “Golden Wreath for Skills and Competences” in the “Profitable Investment” category, awarded by the Governor of Opole and the Opole Chamber of Commerce. February 2011 ZAK S.A.’s AdBlue® was commended at the EXPOCHEM 2011 Fair, earning the Grand Prix award in the “environmental protection” category. March 2011 Handover of the TKV nitric acid installation, and as a result increase in the production capacity of nitric acid and an improvement in consumption ratios for ammonia and energy in the production of nitric acid. April 2011 Consolidation of business within the Group relating to IT processes; through the decision of the organisers of
the Responsible Employer Programme – HR Leader 2011, ZAK S.A. was named “Responsible Employer of 2011”; Kędzierzyńska Saletra Amonowa® was presented with the most significant distinction during the Polish Fertilisers awards organised by the editorial team at “Zielony Sztandar” under the patronage of the Minister for Rural Development and Agriculture; the company received the award “Opole Brand” in the specialist product category for large companies for Adblue® - an environmentally friendly product.
August 2011
December 2011
Celebrations marking 25 years of the Oxoplast Business Unit.
Start-up of a new neutralisation unit at the Limestone Ammonium Nitrate Department.
Sabina Nowosielska, Member of the Management Board of ZAK S.A. was recognised in the ranking of “100 Women in Business”, sponsored by magazine “Puls Biznesu”. She was commended as one of the most entrepreneurial women in Polish business.
October 2011
September 2011
Commencement of the manufacture and sale of the new Oxoplast® OT. In recognition of its long-term participation in perfecting the Polish system of technical safety, ZAK S.A. received an award from the Technical Supervision Authority to mark 100 years of Polish Technical Supervision.
May 2011 Development of a concept for the construction of a nitrateurea solution installation at ZAK S.A. Development of a project for the production of di(2-ethylhexyl) terephthalate (DEHT). Completion of operations at the TK I nitrate acid installation, meaning a drop in NOx emissions and ratios for the consumption of ammonia and electricity in the production of nitric acid, with simultaneous ending of the production of sodium nitrate.
November 2011 ZAK S.A. was amongst the winners in the economic ranking “Pearls of the Polish Economy”. In the 9th edition of these awards the company received two distinctions: “Great Pearl” and “Pearl of the Industry and Services Sector”.
July 2011 Commencement of construction on a new electricity billing system at ZAK S.A., enabling payment settlement for actual electricity used by consumers connected to the 6kV network (construction completed in December 2011).
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ATT Polymers GmbH Company Management and Supervisory Boards with changes made in 2011 ATT Polymers GmbH, headquartered in Guben, Germany, is one of the leading manufacturers of polyamide 6 (PA6) in Western Europe, supplying modern products for customers from industries including floor coverings, packaging, automotive, household appliances, electronics, construction, machines, etc. The company entered the Group on 27 January 2010 through the acquisition of 100% of shares in the company trading as Unylon Polymers GmbH by Azoty Tarnów from UNYLON AG. Acquisition of the company was part of the development strategy of Zakłady Azotowe w Tarnowie-Mościcach S.A. and constituted implementation of one of the strategic issue objectives defined in the 2008 issue prospectus. The acquisition of ATT Polymers enabled Azoty Tarnów to implement vertical integration in the supply of a key raw material – caprolactam. The company executes monthly agreements with Azoty Tarnów for purchase of caprolactam. In 2011, the total sales value of this raw material was PLN 338 535.
The consolidation and integration of companies enabled a significant increase in the scale of the Group’s operations and the effectiveness of its manufacturing, sales and distribution of engineering plastics. In 2011 the company’s sales constituted 99.8% of Group revenues in the PA6 engineering plastic segment. Due to technical cooperation with the Parent resulting from consolidation, ATT Polymers was able to market products on the highmolecular market including polyamide 6, modified with the addition of a nucleating agent and internal lubricant (the product is marketed as alphalon® 36 LN), intended for the manufacture of food packaging. The company has 5 polymerisation lines with PA6 production capacity of up to 47 000 tonnes per year. In 2011 a feasibility study was developed for intensifying the production capacity of polyamide installations. The decision on the company’s implementation of this investment was rescheduled for 2013.
The company’s Management Board, appointed in connection with the company’s consolidation with Azoty Tarnów, was formed through a decision of the general meeting on 12 February 2010 and on 1 January 2011 comprised: Krzysztof Pieńkowski
Geschäftsführer
Gerd Trommer
Geschäftsführer
The company’s Supervisory Board was appointed through a decision of the general meeting of shareholders of 12 February 2010 and during the period from 1 January 2010 comprises:
Andrzej Skolmowski
Chairperson of the Supervisory Board
Małgorzata Malec
Member
Witold Szczypiński
Member
Our operations are focussed on the market for modern technologies using engineering plastics. Through being a part of the Azoty Tarnów Capital Group we possess unique technical competences and stable sources of supply for raw materials.
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ATT Polymers GmbH Operational areas and specialisation The company’s field of operations is the manufacture and trade in plastics (polymers), their intermediate products and derivative products.
The company is a manufacturer of granulated polyamide 6 (PA6), manufactured through the hydrolytic polymerisation of caprolactam under the trade name alphalon®. This is a high quality engineering thermoplastic which is one of the leading engineering plastics from the viewpoint of its wide range of beneficial physical properties. Due to their unique features, the company’s semi-finished products are used amongst other applications: for the manufacture of carpet fibres and others, for the production of fishing lines, bristles, threads, for packaging, particularly in the food industry – single- and multi-layer plastic packaging, in the automotive industry – engine parts, internal and external car fittings and automotive electrical installations, rod casings, in electronics – casings for distribution boxes, plugs, connectors, snap-ons, sockets, switches, in machine building – machine parts, in construction and the furniture industry – furniture parts, screws, wall anchors, chair parts, rollers, door handles, handgrips, for the manufacture of sports equipment – fishing tackle and lines, ski parts, snowboards, skateboards, rollerblades, helmets, bicycles, in household goods – parts for fridges, freezers, dryers, washing machines, kitchen appliances, driers, parts for power tools, etc., for the manufacture of semi-finished products – bars, boards, pipes, cases, for the manufacture of small-diameter pressure cables and Peschel hoses.
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Polskie Konsorcjum Chemiczne sp. z o.o. Polskie Konsorcjum Chemiczne sp. z o.o., headquartered in Tarnów, fulfils a significant role of integrator and consolidator of Azoty Tarnów Capital Group companies, conducting non-manufacturing operations in the fields of design, preparation and implementation of investments, repair, services and maintaining the operability of industrial and technological production lines. Azoty Tarnów decided to use Polskie Konsorcjum Chemiczne as a consolidator and entity managing subsidiaries, performing operations in areas connected with supporting core business. On 20 October 2011 the Extraordinary General Meeting of PKCh sp. z o.o. increased the company’s share capital from its previous level of PLN 100 000 to PLN 85 530 550 through the creation of 1 710 611 shares of a nominal value of PLN 50 each. After the increase, the company’s share capital amounted to PLN 85 630 550. Azoty Tarnów and ZAK S.A. made cash contributions in return for equity. Azoty
Tarnów took up 1 082 026 shares, which together with its previous shareholding constitutes a 63.27% stake in the company’s increased capital. In turn ZAK S.A. took up 628 585 shares, which together with its previous interest constitutes a 36.73% stake in the company’s increased share capital. The consolidation implemented on 20 October 2011 led to results including an increase in efficiency and the elimination of internal competition, which led to strengthening of the comprehensive business portfolio and the bargaining power of subsidiaries. This enables the further specialisation of subsidiaries. A policy is currently under development to define the company’s growth directions and work is on-going on the company’s future operational strategy. Soon consolidation within the company will also include subsidiaries of Zakłady Chemiczne “Police” S.A. conducting operations in a field convergent with the company’s group.
Company Management and Supervisory Boards The Management Board composition of Polskie Konsorcjum Chemiczne was subject to change on 20 October 2011 in accordance with resolutions adopted by the Extraordinary General Meeting. The former President of the Management Board, Jerzy Koziara, tendered his resignation. On the same day a new Management Board was appointed with the following composition: Jerzy Woliński
President of the Management Board
Krzysztof Nowosielski Member of the Management Board
(from 8 November 2010)
Katarzyna Piekarska
Member of the Management Board
On 20 October 2011 a Supervisory Board was also appointed, comprising: Witold Szczypiński
Chairperson of the Supervisory Board
Mirosław Ptasiński
Member
Andrzej Skolmowski
Member
Wiesław Skwarko
Member
Rafał Smoła
Member
In implementing the consolidation and optimisation of non-manufacturing Azoty Tarnów companies, we are successfully increasing Group performance. We are creating new market growth opportunities and enhancing the competences of subsidiaries.
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Polskie Konsorcjum Chemiczne sp. z o.o. PKCh Sp. z o.o. shareholding structure as at the date of drafting the report – 31 December 2011:
Company
Share value
Interest
Azoty Tarnów
54 176 300.00 zł
63.27%
ZAK S.A.
31 454 250.00 zł
36.73%
Operational areas and specialisation PKCh is responsible for functions in strategic planning, organisation and management of the operations of its subsidiaries.
Human and asset potential and their competences and experience allow subsidiaries of Polskie Konsorcjum Chemiczne to provide complex services in the following fields:
Azoty Tarnów Capital Group companies which are direct subsidiaries of Polskie Konsorcjum Chemiczne Sp. z o.o. (PKCh Sp. z o.o.) as at 31 December 2011:
Company
support for investment processes including design and engineering services for the chemicals, petrochemicals, construction and energy industries, along with environmental protection,
PKCH sp. z o.o.’s interest
ASTER ZAK sp. z o.o.
100%
Automatyka sp. z o.o.
72.17%
BIPROZAT sp. z o.o.
100%
CHEMZAK sp. z o.o.
100%
JRCh sp. z o.o.
100%
PROREM sp. z o.o.
100%
REKOM sp. z o.o.
100%
ZAK SERWIS sp. z o.o.
100%
ZWRI sp. z o.o.
100%
engineering and technical investment work in automation; design, contracting, support and industrial service of measurement and control systems; maintenance of computer control systems; process visualisation; thermal surveys and audit; technical consultancy; expertise, design work and training,
industrial design support including services connected with production maintenance; repair, diagnostics and modernisation of plant and machinery; the construction and repair of technological installations for the chemicals, petrochemicals and energy industries; installation, workshop and service works,
chemical rescue services and associated work, including hazardous operations; storage, segregation and recycling of waste; specialist laboratory services; small-scale chemical production; conducting specialist training courses; drafting environmental documentation.
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PTK KOLTAR sp. z o.o. Company Management and Supervisory Boards with changes made in 2011: Przedsiębiorstwo Transportu Kolejowego KOLTAR Sp. z o.o. is one of the subsidiaries entrusted with performing several significant elements of Azoty Tarnów’s operations in the field of rail freight forwarding. The company is one of few companies in Poland which hold the required authorisations to perform comprehensive repair of rolling stock bogies and cistern tanks adapted for the transport of hazardous materials according to international rail transport regulations for hazardous goods (RID) and is a licensed transporter of benzene, which has a positive impact on the security and timeliness of supplies, in addition taking full advantage of its own fleet of rolling stock. The Group demands a unified logistics policy guaranteeing security for the distribution of raw materials and products. Koltar is thus a significant element in this structure.
Koltar Sp. z o.o. provides Azoty Tarnów with services connected with rail transport, including internal site movements and as leaseholder manages the company’s rail infrastructure. The contract covers shunting services, lease of rolling stock and freight forwarding support as well as freight management services connected with the acceptance and delivery of the Parent’s parcels through licenced rail carriers. In accordance with the 2010 Strategy for Development of KOLTAR Sp. z o.o. 2010-2012, systematic development in licenced freight forwarding is anticipated, together with concentration of the company’s material investments on increasing the competitiveness of its services and effective market rivalry in the freight industry with potential competitors including PKP Cargo, DB, CTL and others. The second significant group of development tasks at Koltar is increasing and adapting the rolling stock fleet to Group needs.
Composition of the Management Board from 1 January 2011 to 15 June 2011:
Piotr Golemo Andrzej Ciuruś
President of the Management Board Vice-President
On 15 June 2011 a change occurred in connection with the end of the term on 1 September 2011. During this period Piotr Golemo acted as President of the Management Board Composition of the Management Board from 1 September 2011 to 31 December 2011 and on 6 March 2012:
Piotr Golemo
President of the Management Board
Jarosław Wrona
Vice-President
Composition of the Supervisory Board from 1 January 2011 to 15 June 2011:
Andrzej Skolmowski Tomasz Wałęga Józef Grajdura
Composition of the Supervisory Board from 1 January 2011 to 15 June 2011
Member Member
On 15 June 2011 a change occurred in connection with the end of the term. Up to 15 December 2011 the Supervisory Board comprised:
Andrzej Skóra Tomasz Wałęga Józef Grajdura
Chairperson of the Supervisory Board Member Member
Composition of the Supervisory Board from 15 December 2011 to 31 December and on 6 March 2011
Wiesław Skwarko
President of the Supervisory Board
Józef Grajdura
Member
Tomasz Wałęga
Member
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PTK KOLTAR sp. z o.o. Operational areas and specialisation The company is active in freight forwarding
Due to experience and an advanced management culture based on the highest standards of the Azoty Tarnów Capital Group, we are a valued service provider in the Polish rail market. We actively support the development of safety systems in the rail transport of chemical substances.
support connected with the handover and acceptance of rail freight, loading and unloading services, cleaning of cisterns and rolling stock and associated inspections, and maintenance of railway lines connected with supporting the Parent’s rail infrastructure and loading stations.
The operations of Koltar Sp. z o.o. within the Group include: licenced rail freight forwarding and logistics support for rail transport, transport of products, raw materials and goods and the provision of services related to freight forwarding, shunting services connected with transport of goods and materials, loading and unloading services, facilitating access to engines and lease of rolling stock, planned and emergency rolling stock maintenance, inspection of wagons and cisterns, completing documentation for rail infrastructure equipment and structures, cleaning cisterns after the transport of non-organic products, cleaning railway cisterns and wagons, painting rolling stock, maintenance and repair of rolling stock, construction, modernisation, repair and maintenance of railway lines connected with support, production of spare parts for rail and road transport equipment, capital and on-going repairs on excavators and bulldozers, repair, maintenance, handover and supervisory services, preparation of metal surfaces using modern techniques, sale of diesel, advisory, consultancy and expertise in rail transport, conducting training and vocational courses.
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The architecture of an enterprise is more than just its buildings and equipment. It is the art of creating attractive and inspiring places, where people work and want to return to.
responsibility for future generations in pursuit of sustainable development
Mission and strategic objectives of the Azoty Tarnów Capital Group development and operational logic Due to consolidation and changes in the principles for management and oversight of the Group as a whole and of its specific companies, in 2011 the Azoty Tarnów Capital Group became the largest chemicals group in Poland and generated impressive financial results. The Group’s goal is to become a leading European manufacturer of caprolactam and engineering plastics, with simultaneous strengthening of its competitive position in the agricultural sector. The Group’s development strategy provides for further active participation in consolidation of the chemicals industry in Poland and throughout Central and Eastern Europe. Group companies are also becoming more and more active in non-European markets. Planned investments include the execution by Azoty Tarnów of a letter of intent to establish a company in South East Asia. Its objective would be to transfer technology for the construction of a caprolactam plant to a selected local partner together with forming new beneficial business relationships.
Azoty Tarnów is consistent in the implementation of its issue objectives and Development Strategy 2007-2015, which is expressed primarily in its 2011 acquisition of 66% of shares in Z.Ch. “Police” S.A. and 40.86% of shares in ZAK S.A., together with the 2010 acquisition of a 52.62% stake in ZAK S.A. and a 100% stake in ATT Polymers GmbH. The Group’s inclusion of companies belonging to the largest chemicals sector enterprises in Poland enabled a significant increase in the scale of operations and the creation of a major business organisations in the region. A strong chemicals group with wide range of products was created as a result – a significant manufacturer of nitrate and multi-component fertilisers, caprolactam, engineering plastics (polyamide 6, polyoxymethylene, modified plastics), oxo alcohols, plasticisers and titanium white. Consolidation enabled an increase in the Group’s product range, increase in production capacities, broadening of sales markets, access to new distribution channels and security in supplies of some commodities, thus resulting in an increase in sales levels.
Full consolidation was possible due to the development of unified procedures and instructions for the entire Group, aimed at integrating and optimising both internal Group processes and those in its external business environment and ensuring appropriate information flows and information security. Of key significance is the fact that areas of potential synergy were identified and activities are on-going aimed at ensuring that full advantage is taken of its potential.
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Mission and strategic objectives of the Azoty Tarnów Capital Group development and operational logic The Group’s operations are tailored to changes and tendencies in the global chemicals market. In 2011 EU members recorded a 2% increase in chemicals industry manufacturing in relation to 2010. The rate of production growth in the polymers sector was close to the average (approx. 2%), while the petrochemicals sector recorded 1.5% growth. According to the majority of forecasts, 2012 should see a further rise in consumption, although at a level slower than in the preceding year and varying throughout geographical regions and sectors. It is expected that further strengthening of Asia (mainly China and India) in the position of leader in chemicals sector manufacturing will take place in 2012. Future fiscal and monetary policy is a factor capable of impacting on development of the sector in the euro zone. The Group’s growth directions have been outlined in the Parent’s Development Strategy 2007-2015, the Issue Prospectus and the strategy for the Group 2012-2020, currently under development. These anticipate the Group’s concentration in key growth areas: the advanced materials technology sector, in particular engineering plastics, the organic chemicals sector, in particular caprolactam, the agricultural products sector, in particular mineral fertilisers. These sectors will constitute the key areas for Group development. The Group’s objective is to become a leading European manufacturer of caprolactam and engineering plastics, with simultaneous strengthening of its competitive position in the agricultural sector. The Group’s implementation of strategic objectives will concentrate on taking advantage of chances in its operational environment and strengthening core competences having a key impact on its competitive position through the following initiatives: increasing the scale of operations in specific areas, decreasing sensitivity to changes in general economic cycles and natural gas and petrochemical commodity prices through extending product chains, lowering manufacturing costs through modernising key production lines, nurturing stable and effective relationships with commercial partners and optimising distribution channels, optimising organisational solutions, improving the effectiveness of key processes and unlocking intellectual capital, continuous tailoring product quality to customer requirements, moderate related diversification using synergy with elements of the current product portfolio.
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Increase in the value of Azoty Tarnów is possible both through organic growth as well as strategic alliances and mergers and acquisitions. The core objective of inorganic growth will be the development of an integrated structure which will provide the Group with lasting improvement in its competitive position and the conditions for stable growth. The Group Parent intends to continue playing an active role in the process of consolidating the chemicals sector in the region.
Development vectors stable growth in a global market
Research and development initiatives carried out by Group companies in 2011 were connected with the implementation of strategic assumptions.
Azoty Tarnów concentrated on the following areas: manufacture of engineering plastics, caprolactam and calcium ammonium nitrate fertilisers. Work also focussed on further product diversification and new product development. In the field of engineering plastics the company performed work on the development of technology for the manufacture of polytrioxane and new modified variants of engineering plastics. R&D work on caprolactam manufacture concentrated on improving its economic indicators, enabling further intensification at the Azoty Tarnów Caprolactam Plant and decreasing the plant’s environmental impact. R&D work in the field of fertilisers was connected with developing the product range.
In 2011 ZAK S.A. implemented new initiatives and continued to cooperate with research institutes and engineering companies in the following areas: improving chemical processes and technologies, including through more effective use of purge gas from the ammonia synthesis installation, research on the impact of dolomite contaminants on the quality of granulated fertilisers, improvement in the effectiveness of the oxo installation through technological changes in the trimer assembly, change in the raw material base (from benzene to butane) at the maleic anhydride acid facility, rollout of new products and the construction of new installations relating to the modernisation of industrial power technology at ZAK S.A., a concept for the modernisation of the urea installation, the commencement of urea and ammonium nitrate solution (UAN) production at ZAK S.A., the production of a new DEHT di(2-ethylhexyl) terephthalate product using the existing installation, a concept for hydrogenating currently manufactured FDO to DIOCH and a concept for commencing manufacture of specialty esters at ZAK S.A. The company’s development strategy over the coming years assumes maximum use of synergy between Azoty Tarnów Capital Group companies, using the development potential of ZAK S.A.’s assets and operational markets. The Research and Development Plan includes work on assessing the feasibility and economic viability of new investments, including new sources of raw materials providing security for operations at the oxo installation, modernisation and the removal of bottle-necks in fertiliser production lines and preparation for the production of a wide base of esters based on the raw materials available at ZAK S.A. – specialty esters.
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Development vectors stable growth in a global market
With regard to a visible improvement in its situation, Z.Ch. “Police” S.A. increased its R&D budget in 2011 to PLN 3 million (a thirteen fold increase on 2010). The company’s most significant research and development projects completed in 2011 include work on implementing an energy development strategy: technical assessment of combined heat and power plants EC1 and EC2 and preparation of a concept together with economic analysis of selected variants for modernisation of the CHP, a concept for phase two of production development and coke warehousing (enabling an increase in quality and growth in coke manufacturing by 24 000 tonnes annually). In the field of titanium white, a feasibility study was carried out at Z.Ch. “Police” S.A. concerning modernisation / expansion of the installation for decontamination of decomposition gases at the Pigments Business Unit. In the fertilisers segment, analysis was carried out on the capability to manufacture nitrophosphate fertilisers, covering the construction of a new installation and use of the ammonia produced at Police. A concept for the second phase in development of fertiliser loading logistics was also drafted, which provides for the construction of a logistics centre with warehouses for big-bag products and loading facilities for products on palettes, together with modern packing equipment. R&D work aimed at preparing specific manufacturing installations to the requirements of the Industrial Emissions Directive (integrated prevention of pollution and inspection) also commenced. The directive bases its guidelines on best available technology (BAT).
A wide range of products and technologies developed at the Group received distinctions at numerous industry events. Azoty Tarnów won the Grand Prix award at the EXPOCHEM 2011 4th International Chemicals Industry Fair and Conference for flame retardant, halogen-free Tarnamid®. At the AGROTECH 2011 agricultural fair the company was awarded a Gold Medal for ammonium nitrate fertilisers and the Group’s ammonium nitrate fertilisers received the main award in the “Innovative Product” category at the Polskie Zboża 2011 Agricultural Fair (possible due to the 2010 acquisition of control over ZAK S.A.). Saletrosan® 26 macro, the “standard” fertiliser manufactured at Azoty Tarnów, received a Diamond Statuette at Polish Fertilisers 2011.
Last year the Group received patent registration for original technological solutions: a cyclohexane oxidation reactor and means of oxidising cyclohexane (Polish Patent Office), means of obtaining sodium metholate (Polish Patent Office) and means of manufacturing cyclohexanol (Indian Patent Office).
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Production segments excellence and specialisation
FERTILISERS Nitrate fertilisers Calcium ammonium nitrate Saletrosan® Salmag® Kędzierzyńska Saletra Amonowa® Ammonium sulphate Urea NPK fertilisers PoliMAP® PoliDAP® Polifoska® PoliMAG® Chemicals Nitrates Ammonia Concentrated and technical nitric acid Other PLASTICS Semi-finished products for the manufacture of plastics Caprolactam Plastics Tarnamid® (PA6) Tarnamid® modyfikowany alphalon® (PA6) Tarnoform® (POM) Tarnoform® modyfikowany Chemicals C-non C-nol Other OXO Oxo alcohols 2-Etyloheksanol n-butanol izobutanol Plasticisers Oxoplast® O (DEHP) Oxoplast® IB (DIPB) Oxoplast® PH (DPHP) Chemicals n-Butanal Isobutyl aldehyde Maleic anhydride Other TITANIUM WHITE Universal titanium white Tytanpol® R-001 Tytanpol® R-003 Tytanpol® R-210 Specialist titanium white Tytanpol® R-002 Tytanpol® R-211 Tytanpol® RD 5 Tytanpol® R-310 Chemicals Iron (III) sulphate Iron (II) Sulphate Other
The Group is one of the largest chemicals sector enterprises in Poland and a significant player in the European market. The Group focuses on: mineral fertilisers, organic products, plastics and pigments. Operations currently concentrate on the following areas: Mineral fertilisers: Nitrate fertilisers Phosphate fertilisers Engineering plastics Oxo alcohols and plasticisers Pigments Chemicals A significant area of Group manufacturing operations covers chemicals (mainly constituting the basis for further manufacture). Fertilisers The most important segment at the Azoty Tarnów Capital Group is operations connected with the manufacture of mineral fertilisers. The Group is a significant manufacturer of mineral fertilisers in Poland, which are manufactured at three companies: Azoty Tarnów, ZAK S.A. and Z.Ch. “Police” S.A. With regard to the composition of mineral fertilisers manufactured, these can be divided into two groups. The first group is phosphate fertilisers – multi-component mineral fertilisers with established quality such as Polifoska®, PoliDAP®, PoliMAG® and PoliWAP®. The key feature distinguishing these products from those produced by other domestic manufacturers is the high concentration of pure components in the fertiliser mass and their high level of assimilability.
SERVICES PROVIDED BY GROUP COMPANIES
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The second group are nitrate fertilisers, among which the following have an established position: Kędzierzyńska Saletra Amonowa®, urea, Salmag® and calcium ammonium nitrate. Significant products among the nitrate fertilisers manufactured at the Group are fertilisers with sulphur, including Salmag® with sulphur, ammonium sulphate and the newest fertiliser, Saletrosan®. The benefit of the Group’s products is their manufacture through spontaneous chemical reactions and not using physical methods (mixing, milling), which guarantees homogenous granule composition and high quality. Engineering plastics Two Group companies manufacture engineering plastics: the Parent and ATT Polymers GmbH. The following plastics are manufactured, both in natural and modified form: Tarnamid®, alphalon™ – trade name of polyamide (PA6). These high quality polyamides are obtained through the polycondensation of aminocaprolactam. Natural, coloured and modified polyamides are used as engineering plastics, to manufacture technical and carpet fibres and film and in the automotive and household appliance industries. Tarnoform® – a natural, coloured and modified acetal copolymer (polyoxymethylene, POM). Tarnoform® is a high quality thermoplastic construction plastic obtained through the cationic polymerisation of trioxane. It is most frequently used to manufacture precision machine parts replacing steel, and also in the automotive industry. It is used to produce gear wheels, levers, bearings, coils, pipe connectors, bumpers, etc.
Aside from the production of granulates, plastic goods are also manufactured. The most significant of these are:
footwear, wallpaper, furniture, plastic wrapping, garden hose-pipes, roofing and tarpaulins and is also used in the automotive industry.
– polyamide coverings, used e.g. for packaging sliced meats,
Pigments
– polyamide 6, 11 and 12 and LDPE polythene pipes used as pneumatic and hydraulic tubing. Oxo alcohols and plasticisers Another significant area of the Azoty Tarnów Capital Group’s operations under organic products are oxo alcohols (2-ethylhexanol, isobutanol and n-butanol) and plasticisers (diisobutyl phthalate – Oxoplast® IB, dioctyl phthalate – Oxoplast® O, di(2-propyl heptyl) phthalate – Oxoplast® PH, and di(2-ethylhexyl) terephthalate – Oxoplast® OT. Within the Group these are manufactured by ZAK S.A., which is the only manufacturer of oxo alcohols in Poland and has one of the most technologically advanced oxo installations in Europe, which is integrated with other installations. They are used as additives to oils and as thinners in the manufacture of paints and varnishes and in other branches of industry. ZAK S.A. uses oxo alcohols for the manufacture of plasticisers, which can also be found in the company’s product range. ZAK S.A. is the only company in Poland with an Oxoplast® IB installation and boasts Poland’s largest Oxoplast® O production facility by production capacity. From the end of 2011 Oxoplast® OT (di(2-ethylhexyl) terephthalate), which has useful properties and is not classified as a substance harmful to health, has been manufactured and sold. Chemically, Oxoplast® products are categorised as the so-called higher phthalates. As plasticisers, they are widely used in the plastics industry, particularly for the plasticity of PVC, which is subsequently used for production of cable isolation, flooring,
The latest of the Group’s manufacturing segments is pigments, which are produced by Z.Ch. “Police” S.A., the only domestic manufacturer of titanium white. The production line’s 40 000 tonne per year capacity places the company amongst mid-sized manufacturers in Central Europe. Pigments are sold both in Poland and abroad under the registered trademark Tytanpol®. The range of pigments currently covers 9 rutile types. These are high quality pigments, the majority of which are used in products which are in contact with food. They are widely used in the coating, plastics and paper industries. Chemicals A significant area of the Group’s operations is the manufacture of chemicals for the chemicals industry. These products are subsequently processed chiefly in the form of raw materials required for the manufacture of fertilisers (ammonia, nitric acid), plastics (caprolactam), oxo alcohols and plasticisers (aldehydes, maleic anhydride, phthalic anhydride), finished products (e.g. carbon dioxide used to carbonate sparkling drinks), and are used as supplementary elements in the operation of industrial installations.
Since 2010 the Group also markets AdBlue®, a product manufactured by ZAK S.A. and Z.Ch. “Police” S.A. AdBlue® is a urea solution used for the selective reduction of nitrogen oxide in diesel engines fitted with SCR systems. In order to obtain semi-finished products for the manufacture of the company’s commercial products, sulphuric and phosphoric acid are manufactured on a large scale. Z.Ch. “Police” S.A. is the sole domestic supplier of deflourinated phosphoric acid of quality higher than fertiliser-grade, sodium flourosilicate and iron sulphate. The chemicals manufactured by Azoty Tarnów Capital Group companies are of high quality and fulfil all global standards and requirements for this type of product. Additional operations The Azoty Tarnów Capital Group sells electricity and heat to external customers. It also provides a wide range of services in environmental protection, administration, diagnostics and inspection services in research and management of joint facilities.
Sales markets the strength of stable relationships The Group has a strong position in Polish and international chemicals markets. Azoty Tarnów Capital Group products are sold primarily in the European Union, in particular Poland, Germany, the Czech Republic, Italy and Belgium.
European Union 39% Poland 48% Other Europe 6% Asia 5% South America 1% Other 1%
The products exported to the European Union are principally plastics, oxo alcohols and plasticisers. Primarily oxo alcohols and caprolactam are sold in Asian markets, while exports to South America are mainly fertilisers. In the domestic market the Group chiefly markets mineral fertilisers.
The catalysts manufactured at the Group are used for selected chemical syntheses for the production of ammonia, hydrogen and synthetic gas. The Group offers the following catalysts: – iron-chromium catalyst, – copper-zinc catalyst, – iron catalyst.
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Investments and achievement of objectives
The Parent’s significant investments completed in 2011 include:
consistency in action
The process of increasing the Group’s value is
modernisation of the Benfield potassium wash station within the V RM installation, intensification of the Modified Plastics Plant – phases I+II, modernisation and Intensification of the Caprolactam Plant to 101 300 tonnes/year, expansion of the 0.4 kV switching station for the requirements of the SHA Plant, adaptation of benzene loading stations to TDT requirements, modernisation of the fresh steam collector phases IV+V, modernisation of the Chemicals Centre, implementation of a computer control system and modernisation of on-site measurement equipment at the Ammonium Sulphate Plant, construction of a technical nitric acid railway cistern unloading station. The largest on-going investments include:
achieved through both organic and inorganic
adaptation of the electricity metering system to electricity market conditions, modernisation of power supply and the main electrical substations at the Parent, construction of an installation for comprehensive collection of ash from the boilers at power plant EC II, construction of a new Hydrogen Facility, means of implementing the Beckmann rearrangement process, modernisation of Sulphuric Acid Department, conversion of gate no. 6 from ul. Chemiczna and construction of a heavy goods vehicle parking area, launch of a Shared Services Centre for the Azoty Tarnów Capital Group - phase I, connecting CO2 and utilities to the Air Products CO2 purification and liquefaction installation, IT consolidation within the Azoty Tarnów Capital Group, adaptation of caprolactam loading equipment to TDT requirements, adaptation of sulphuric acid and oleum loading equipment to TDT requirements, adaptation of the loading station for liquid sulphur from railway cisterns to on the loading ramp to TDT requirements, adaptation of the loading station for phenol from cisterns on the loading ramp to TDT requirements, adaptation of the loading station for cyclohexanol, cyclohexanone, cyclohexane and frakol to TDT requirements.
growth. The aim of activities implemented under inorganic growth is to create a larger, integrated structure ensuring improvement in its competitive position and the conditions for stable growth.
The key events in 2011 which led to this situation were the acquisition of Z.Ch. “Police” S.A. and the acquisition of a further interest in ZAK S.A. Investment projects implementing the Azoty Tarnów development strategy were carried out in 2011 covering Zakłady Chemiczne w TarnowieMościcach S.A., Zakłady Chemiczne “Police” S.A. and ZAK S.A. Total capital expenditures incurred by the Parent in 2011 amounted to PLN 190 388 700, including PLN 2 756 000 in inventory for investment purposes. The largest new investment commenced in 2011 at Azoty Tarnów was the project “Modernisation of the Sulphuric Acid Manufacturing Facility”. The principal objective of the project is to maintain continuity of operations within the company’s main production line and ensure the safe and failure-free operation of the facility. Implementation of this project ensures the operational continuity of a key facility within the caprolactam production process. An additional effect of this project will be an increase in the facility’s production capacity, improvement of ecological ratios and growth in the production of steam. The largest tasks on-going at the Parent include the construction of a new Hydrogen Facility, modernisation and intensification of the Caprolactam Plant to 101 3 00 tonnes per year and intensification of the Modified Plastics Plant – phases I+II. The construction of a new Hydrogen Facility secures supplies of hydrogen for the manufacture of caprolactam and (together with the 5th Methane Decomposing Facility) enables the use of the full volume of natural gas with higher nitrogen content from new local sources, which in turn enables a reduction in consumption of more expensive mains gas.
In accordance with the Azoty Tarnów Development Strategy, the most significant investments planned for 2012 are connected with improving the Group’s competitive position in the Parent’s core operations and further implementation of issue objectives. The most important new tasks where implementation will commence in 2012 include projects connected with internal modernisation of the ammonia synthesis reactors, purchase and construction of a new technical hydrogen compressor for the phenol hydrogenation installation in the palladium catalyst and modernisation of the Cooling Station no. 6 refrigeration system. A significant group of new tasks are investments connected with exchange of the computer control and instrumentation systems in the Lactam Department and Ammonium Nitrate Plant.
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Investments and achievement of objectives
In 2011 ZAK S.A. incurred PLN 52 649 000 in capital expenditures. ZAK S.A.’s investment activity mainly focussed on continuing investment tasks already implemented and systematically exchanging machinery and equipment in order to maintain production potential and strengthen the competitiveness of its products. The highest share of capital expenditures at ZAK S.A. in 2011 constituted investments commenced in previous years:
consistency in action
increasing the production capacity of new TK V nitric acid, modernisation of the sealing system of circulator C-1015 at the ammonia synthesis installation, implementation of an APC system at the oxo facilities. New nitric acid – TK V is a strategic investment for ZAK S.A.’s operations. The aim of the project is to increase nitric acid production capacity and ensure the production of calcium ammonium nitrate fertilisers on the basis of modern and energy saving units with solutions ensuring the achievement of low emissions resulting from best available technology and the conditions specified in the integrated permit. The result of the project is a complex of new units including two main facilities: a TK V technical nitric acid unit with nominal production capacity of 900 Mg/d and an ammonium nitrate (neutralisation) facility with nominal production capacity of 1800 Mg/d. The investments commenced by ZAK S.A. in 2011 include preparation for projects such as the construction of a liquid phthalic anhydride autocistern loading system, electricity billing system and decreasing the energy consumption of oxo synthetic gas production. Capital expenditures planned for the implementation of development projects in the ZAK S.A. investment plan for 2012 are aimed primarily at: reduction in production costs: modernisation of urea, modernisation of production lines for the manufacture of synthetic gas for the oxo alcohol unit, modernisation of the gas compressor station for ammonia synthesis, modernisation of the calcium ammonium nitrate fertiliser storage facility; revenue growth: modernisation of power infrastructure, manufacture of UAN, manufacture of DEHT. Capital expenditures on implementation of the company’s principal development plans 2012-2016 mainly cover the items detailed above, including expenditures on the modernisation and intensification of the urea unit at ZAK S.A., with stipulation that the implementation of this investment will be conditional on the strategic solutions concerning urea adopted by the Azoty Tarnów Capital Group in 2012. Preparatory work currently underway at Zakłady Chemiczne “Police” S.A. and ZAK S.A. are specifying the optimum solution concerning urea within the Azoty Tarnów Capital Group. A target organisational solution will be specified in 2012, together with a technical concept for implementation of investments to modernise energy infrastructure.
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Investments and achievement of objectives consistency in action
In 2011 Z.Ch. “Police” S.A. incurred PLN 66 981 000 in expenditures on property, plant and equipment and PLN 1 414 000 on intangible assets (expenditures totalling PLN 68 395 000). The company implemented tasks connected with business development (growth and modernisation tasks), business retention (restructuring tasks) and mandatory investments (dictated by legal regulations). The largest share of capital expenditures was incurred in business development (approx. 48%). In 2011 the company completed 65 investment tasks, including: “Reconstruction of fertiliser storage facility 106 at Department PE-1” within the Logistics and Procurement Centre – total expenditure of PLN 4 961 000, “Reconstruction of four bucket conveyors at Department NPK II, lines A and B” – total expenditure of PLN 4 233 000, “Change in the reaction pulp run-off from the adiabatic evaporator in line D to the first reactor at PF3, facility 140” – total expenditure of PLN 3 458 000, “Modernisation of rail infrastructure at Police Chemia and Jasienica stations” – total expenditure of PLN 4 470 000, “Modernisation of power and control systems for the auxiliary furnace and industrial furnace during start-up and cooling at the sulphuric acid facility” within the Fertiliser Business Unit – total expenditure of PLN 2 247 000. In 2011 Z.Ch. “Police” S.A. commenced implementation of 14 new investment tasks, including a new investment project at the Nitro Business Unit – “Modernisation of ammonia loading ramps” (mandatory investment with budget of PLN 5 540 000). Under investments connected with business development the company incurred expenditures of PLN 14 409 000. Among the 27 tasks implemented in this area the most significant include: “Installation for neutralisation of iron II sulphate – MONOHYDRATE”, “Change in the reaction pulp run-off from the adiabatic evaporator in line D to the first reactor at PF3, facility 140”, “Modernisation of the first boiler cluster and steam superheater of boiler OU66”, and “Coalescing filter at the APM Department”. The company also implemented a wide range of initiatives connected with the start-up and implementation of investment processes within the Restructuring Plan, including modernisation of the urea installation, optimisation of ammonia production, construction of a logistics base and the dry separation of TiO2.
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Development of IT infrastructure comprehensive solutions and system integration 2011 saw further transformation in IT support for the company’s business processes. It was also the second year of cooperation with HP Polska
In the last quarter of 2011, Z.Ch. “Police” S.A. has joined intensive work on detailed consolidation of its IT infrastructure.
sp. z o.o. (Hewlett-Packard) in full IT outsourcing and the development of a strategic partnership.
The portfolio of application and infrastructure projects will ensure support for Group management processes through:
This strategic cooperation was significantly expanded as a result of the addition of ZAK S.A. and Z.Ch. “Police” S.A. to the Azoty Tarnów Capital Group. This is reflected in the update to the IT Strategy, which was redefined in the context of Group-wide requirements. From the beginning of 2011 work was continued on implementing projects under the initial contract with HP, covering investment management, management information optimisation and the development of a planning and budget module. The package of IT tools streamlining group work and electronic document flow was expanded. IT support is provided on a systematic basis for strategic initiatives adopted within the company (e.g. change in the means of distributing plastics). At the same time the IT infrastructure of new entities was reviewed and plans for its integration with Azoty Tarnów’s solutions were specified.
ZAK S.A.’s April 2011 inclusion in the Azoty Tarnów-HP outsourcing contract enabled the planning of shared IT resources, a significant step en route to consolidating the IT infrastructure of main companies in the Group. In the second half of the year, work commenced in the field of applications – solutions were created to develop new corporate business standards and consolidate companies within the Group. The completed infrastructure projects created an adequate environment for the requirements of new functionalities. The principal result of these activities is the start-up of a central SAP system for the Group, in which new organisational structures have been developed and new principles for management of fundamental data have been implemented. The central SAP system is a support environment for key business processes within the Azoty Tarnów Capital Group – SAP users in other locations have been given the opportunity to work on the central SAP system and have access to other systems using a 10GB/s broadband connection. This same method is used to create backup copies in the second location.
standardising business processes with use of the best solutions within the Group, the possibility to obtain rapid analysis and comprehensive reports, reliability, comparability, certainty and appropriate data quality, dedicated accessibility of management information, the capability to continuously and effectively generate operational synergy between Group companies.
The implemented IT initiatives have been recognised in external rankings, earning the 2011 distinction of “Most Interesting of the Best Implementations in Industry”, awarded by the editorial team of PTWP Group – publishers of the business monthly Nowy Przemysł and the website wnp.pl – for an innovative IT outsourcing project, and the title “IT Leader 2011” in the “industry” category, awarded in a prestigious competition organised by Computerworld – an authoritative IT web portal.
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Commodities and energy supply security and diversification
The strategic commodities used in the technological processes of Group companies are: natural gas, steam coal, ammonia, phenol, benzene, sulphur, propene, o-xylene, phosphorites, potassium salt, ilmenite, slag and electricity, the last of which is partly generated at the Group’s own power generation facilities. The Group development strategy assumes supplies of commodities based on a common procurement policy for Group companies. The stability and security of strategic commodities is guaranteed through contracts based on commercial price formulae together with quantitative guarantees. This strategy allows the Group to minimise negative market events and adapt the quantity of supplies to current production requirements. A factor differentiating Azoty Tarnów from other chemical companies in Poland is its lower sensitivity to limitations in the supply of gas from the national transmission network. This is possible due to the use of natural gas obtained from local sources. Natural gas The sole supplier of natural gas for the Group in 2011 was PGNiG S.A. Gas from the transmission network and from local sources was supplied pursuant to long-term agreements. Gas from local sources currently meets approx. 40% of Azoty Tarnów’s requirements. Gas prices are established based on the PGNiG S.A. Tariff for Gas Fuels approved by the President of the Energy Regulatory Office. In the assessment of the Energy Regulatory Office, the first date that gas prices may be deregulated for industrial customers is 1 January 2012. ZAK S.A. and Z.Ch. “Police” S.A. executed agreements on the supply of natural gas through a terminal at the Lasowo border crossing. This is the beginning of supply diversification.
Electricity As of 1 January 2011 Azoty Tarnów changed its electricity supplier, which allowed for a significant decrease in the purchase price. Two Polish companies sold and supplied electricity to Azoty Tarnów. Supplies of electricity for ZAK S.A. were also provided by two suppliers, which granted the Group beneficial financial conditions and diversification of supplies. Centralised procurement of coal and electricity within the Group led to significant cost reduction. The Group’s own CHP plants at Azoty Tarnów and ZAK S.A. also added to energy security.
Steam coal
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Supplies of steam coal at Azoty Tarnów were mainly sourced from two large domestic companies, and deliveries were balanced 55% - 38%. Some purchases were procured from spot contracts. Supplies of steam coal at ZAK S.A. were also provided by two suppliers, which granted the Group beneficial financial conditions and diversification of supplies. In the case of Z.Ch. “Police” S.A., 95.5% of coal supplies were sourced from one large domestic supplier, with the remaining 4.5% sourced from Russia.
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Ammonia
Commodities and energy
After the entry of Z.Ch. “Police” S.A. into the Azoty Tarnów Capital Group, the total internal Group production capacity of this commodity exceeded 1.1 million tonnes, guaranteeing ammonia balancing within the Group. The Azoty Tarnów strategy in this field was based on internal Group supplies (Z.Ch. “Police” S.A. and ZAK S.A.) and sale of surplus ammonia to external customers. This approach ensures a stable supply of ammonia for the Group’s own manufacturing needs.
supply security and diversification
Phenol Azoty Tarnów obtains phenol from two primary sources: Germany’s INEOS Phenol (the world’s largest manufacturer) and domestic sources, with all supplies based on long-term contracts. Despite a limitation in the supply of phenol in Europe in 2011 (a result of increased demand in China), stable business relationships meant that the Group achieved supplies of this commodity based on two current sources. To date a range of steps have been taken within the Group to diversify suppliers and optimise logistics, which in the future will allow for optimal security of supplies in this area.
Potassium salt Potassium salt is a commodity used by Z.Ch. “Police” S.A. The sources of supply in 2011 were direct manufacturers through agreements executed with 2 domestic importers.
Benzene In 2011 the benzene market was heavily dependent on the situation in Asian markets and the unstable implementation of production programmes among the largest manufacturers. The Group’s procurement policy in this field is based on supplies from domestic sources and from Central and Eastern Europe, with all purchases based on long-term contracts ensuring supply security. A wide range of steps were taken in 2011 to diversify suppliers and optimise logistics.
Ilmenite and titanium slag Ilmenite and titanium slag are raw materials used by subsidiary Z.Ch. “Police” S.A. for the manufacture of titanium white. In 2011 purchases were made from one supplier on the basis of long-term contracts.
Propene
Sulphur The Group’s long-term strategy assumes supplies of sulphur on the basis of long-term contracts, which amongst other factors enabled it to avoid price increases in 2011 (due to fixed quarterly prices). An additional benefit for the Azoty Tarnów Capital Group was the introduction from Q4 2011 of a common procurement policy with Z.Ch. “Police” S.A., i.e. optimisation of the procurement and supply logistics structure within the Group. The Azoty Tarnów Capital Group is currently the largest consumer of liquid sulphur in the Polish market.
Aside from o-xylene and liquid phthalic anhydride, propene is used by one of ZAK S.A.’s business units – JB Oxoplast. The main suppliers of propene in 2010 were companies delivering this commodity from Germany and Russia.
o-Xylene This is the second of the main commodities used by the Oxoplast Business Unit at ZAK S.A. In 2011 it was mainly provided by PKN Orlen S.A. and suppliers on the non-contract market.
Phosphorite Phosphorite is not currently produced in Poland due to the unprofitability of its extraction. In 2011 the sources for this commodity used for the production of phosphorous fertilisers at Z.Ch. “Police” S.A. were suppliers from Morocco, Syria and Tunisia. In addition, supplementary supplies of phosphorite were sourced from Algeria, Tonga and Egypt.
Liquid phthalic anhydride This commodity is used in technological processes at ZAK S.A. In 2011 supplies were procured from 2 direct manufacturers in Slovenia and Austria.
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Corporate social responsibility equilibrium and partnership
The future of the Azoty Tarnów Capital Group is based on the principles of sustainable development and compliance with the highest standards. The organisational and technological growth of the Group takes into consideration the need for social development, conservation of natural resources and the environment and the creation of reliable and stable relationships with the local community. This is based on an integrated approach to social, environmental and economic considerations and is aimed at developing business culture in a responsible way. It enables the creation of an identity and the competitiveness of the Azoty Tarnów Capital Group at an international level.
Group companies are responsible and comprehensive in their approach to technological and economic development and take the needs of the local community into consideration.
In accordance with the highest standards for chemical companies around the world, the Group is particularly interested in safety and responsibility for its products and for environmental impact. For this reason Azoty Tarnów and its subsidiaries continuously undertake activities aimed at: limiting negative environmental impact, investing in research and development, seeking out innovative technological solutions, increasing the share of renewable resources in production processes, limiting energy use, investing in human capital, building open dialogue with local communities, improving employee safety and the safety of technological processes, perfecting management systems.
Group companies operate on the basis of the highest standards and integrated management systems in accordance with international norms. System compliance within specific companies is verified by external auditors and certificates are awarded. Depending on the scope of operations, subsidiaries implement standards which correspond to their field of responsibility. Systems in force within the Group include: Quality Management System in accordance with standard ISO 9001:2008, Environmental Management System in accordance with standard 14001:2004, Food Safety Management System in accordance with standard ISO 22000:2005, Workplace Health and Safety Management System in accordance with standards PN-N-18001:2004 and BS OHSAS 18001:2007, Quality Management System for the Automotive Industry ISO/TS 16949:2009, Responsible Care Framework Management System compliant with European Chemical Industry guidelines. An additional aspect strengthening management of issues surrounding sustainable development is the activity of several companies in the “Responsibility and Care” programme.
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Corporate social responsibility The Group’s largest companies are strategic in their approach to issues surrounding corporate social responsibility. Azoty Tarnów is aware of its impact on the local community and have developed and adopted a comprehensive, long-term “Strategy for the Sustainable Development of Azoty Tarnów 2011-2016”. The strategy was developed based on the company’s current best practices and research and analysis, both within in the company and among stakeholders, with the foundation being business strategy. This approach means that Azoty Tarnów can enhance the its economic value while creating added value for stakeholders.
The “Strategy for the Sustainable Development of Azoty Tarnów 2011-2016” is based on three core elements:
DIALOGUE AND BUILDING RELATIONSHIPS
Minimising environmental impact and creating sustainable products
Ensuring active dialogue with all stakeholder groups
Raising ecological awareness
Implementing an ethical code
Since 2009 Azoty Tarnów has consistently featured in the elite group of companies listed in the RESPECT Index – Central and Eastern Europe’s first stock market index for socially responsible companies, which in a global capital market emphasises their attractiveness to investors. Confirmation of the transparency of the index and the responsible behaviour of its participants comes from regular external audit of issuers’ CSR activities.
The company is implementing the 2009 corporate strategy using the Balanced Score Card (BSC) model. The essence of BSC is management of company assets based on the objectives outlined in the score card, specification of responsibility and the establishment of means to measure achievement of objectives. It is the basis of a results-based remuneration model. Corporate social responsibility is a core area of the company’s strategy. Objectives, responsibility and the measures assigned to each objective are communicated to employees and are a motivational element of the remuneration system. They also contain an aspect of corporate social responsibility.
CORE ELEMENTS OF THE AZOTY TARNÓW SUSTAINABLE DEVELOPMENT STRATEGY
SUSTAINABLE PRODUCTION
equilibrium and partnership
EMPLOYMENT
In 2011 Zakłady Chemiczne “Police” S.A. also initiated a project to implement a BSC as a new way of designating and achieving the company’s strategic objectives. The long-term strategy at Zakłady Chemiczne “Police” S.A. takes into consideration corporate social responsibility in the company’s operations. Z.Ch. “Police” S.A. is one of the first companies in West Pomerania to discern the responsibility which rests with it and for many years has supported initiatives connected with culture, sport, ecology and charity work, with simultaneous development of applied production technologies. ZAK S.A. also uses a BSC as a model solution for managing company assets.
Improving employee satisfaction
Increasing safety levels and employee satisfaction
Management of the company’s sustainable development takes place at strategic level, which is reflected in the personal involvement and supervision of the board president and managing director and, within their specific areas of competence, members of the board.
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A significant element in responsible management of the Group is the conscientious and diligent fulfilment of duties as an employer, and constructive dialogue and partnership with bodies representing employees, which is one of the core elements of stable corporate development. Responding to social needs in its local community, Group companies actively support activities and initiatives relating to environmental protection, culture, sport, education and the development of a civil society.
Environmental protection awareness and initiative
With regard to the nature of their operations, Group companies are subject to legal regulations including environmental protection law, water law, waste management law and other environmental protection legislation. Systems have been implemented within the Group covering environmental norms and management which ensure safety and the highest quality in production and investment operations and the reclamation of polluted land, and provide the appropriate conditions for the creation, storage, transport and distribution of substances to observe environmental protection requirements. Environmental aspects have been identified by the Group in all possible elements, such as: atmospheric emissions, discharge into water, waste management, pollution of the ground, use of raw materials and natural resources, other local environmental issues, impact on the general public. During their operations, Group companies generate waste, including hazardous waste, which is why waste management is governed by integrated and sector permits. Specific Group companies store waste in their own landfills or transfer it to specialist companies holding waste management permits. Furthermore, within their operations Group companies collect surface water and groundwater and dispose of sewage. With regard to environmental protection the companies use equipment and installations which protect water against pollution. Similarly in the case of atmospheric emissions of dust and gases from production installations, the companies act in accordance with the integrated and sector permits. Group companies hold all legally required decisions specifying the scope and means of using natural resources, where the obligation to obtain these is connected with the specifics of their operations. Thanks to implementation of the latest technological solutions, Azoty Tarnów takes active environmental protection measures which bring simultaneous balance sheet benefits. As one of the first Polish companies to do so, the company implements the recommendations of the United Nations Framework Convention on Climate Change (the Kyoto Protocol) through a Polish-Japanese joint implementation project to reduce greenhouse gas emissions (Emission Reduction Units). Commissioned in 2009, the recycling catalyser at the nitric acid installation has led to a 93% reduction in nitrogen oxide emissions, the largest reduction of this gas in the world. The company generates notable economic benefits on this account, with revenues over the 4-year period estimated at approx. PLN 135 million.
The most significant environmental tasks implemented in 2011 by ZAK S.A. include: reduction in greenhouse gas emissions, commissioning of the investment “new TK V nitric acid”, commencement of construction on a new liquid phthalic anhydride auto-cistern loading station, commencement of reclamation at a subsequent landfill site, i.e. the landfill at the Piskorzowiec treatment plant. In 2011 Z. Ch. “Police” S.A. completed the modernisation of power and control systems for the auxiliary furnace and industrial furnace during start-up and cooling at the sulphuric acid facility. This was connected with expansion of the control system and the installation of modern oil burners in the auxiliary and sulphur furnaces. The result is an increase in the technical safety of the installation and optimisation of the combustion process. The investment cost over PLN 2 million. All maintenance and investment work conducted within the Group are aimed at limiting energy use and reducing harmful emissions.
REACH system Commencing from 1 June 2008, the REACH Regulation imposes the obligation on all European manufacturers and importers of chemical substances to register such substances, and in the case of “high risk” substances to subsequently obtain a permit for their use. Group companies initially registered a total of 38 substances, including: 25 as products, 7 as transported intermediate products and 6 as isolated onsite intermediate products. The scope of registration corresponds to the current scope of the Group’s operations. In Q4 2011 the process of consolidation and closer cooperation between the REACH departments commenced at the Azoty Tarnów Capital Group’s three main facilities (Azoty Tarnów, ZAK S.A. and Z.Ch. “Police” S.A.). Irrespective of legally required activities, in 2011 Group companies actively participated in implementation of the Responsibility and Care programme, supporting ecological and educational initiatives such as Recycling Nature, Tree for a Bottle, the photo competition Catch a Hare and the Green Office Programme.
52 52
Employment credibility and the art of dialogue
Group companies constitute one of the largest industrial complexes and employers in Lesser Poland, Opole and West Pomerania. They ensure reliable and timely fulfilment of their obligations towards employees, investing in increasing and improving personnel qualifications, stimulating economic activity in their local communities, and positive impact on the development of entrepreneurship and the labour market. The most valuable capital is people with their involvement, competences and initiatives. For this reason Group companies feel responsible for employees, their families and other persons connected with the Group. A key element for every company is the guarantee of a safe and worthy working environment, and support for employee development and their career aspirations. Group companies cooperate with research and teaching centres in order to implement joint ventures linking industry with science and academia.
The number of personnel employed at the Group as at 31 December 2011 was 9 332 – a figure higher than that recorded in the previous year. The increase in employment within the Group results from the acquisition during 2011 of Z.Ch. “Police” S.A.
Number of Azoty Tarnów Capital Group employees As at 31.12.2011
Employee group
6 245
4 012
White-collar
3 077
2 087
Total
9 322
6 099
Number of personnel employed at Group companies (as at 31 December 2011) Azoty Tarnów
2061
Z.Ch “Police” S.A.
2493
ZAK S.A.
1585
Other subsidiaries
3183
On 2 August 2011 a collective labour agreement was concluded between the board of Z.Ch. “Police” S.A. and site trade union organisations which, after registration by the Regional Labour Inspectorate in Szczecin, entered into force on 1 September 2011. In 2011 the company continued its employment restructuring activities, which resulted in a drop in total personnel numbers. Redundancies were chiefly caused by group lay-offs, the nonextension of temporary contracts and retirements. On 30 May 2011 “Regulations for Group Redundancies” were signed by the company’s board of directors and site trade union organisations. Within this project group redundancies included 145 white-collar workers. In 2011 new Bonus Regulations were signed and introduced, aimed at supporting implementation of strategies for the company, Business Units and support centres. A new bonus system came into force on 1 January 2012. The idea behind the new system, based on the Balanced Score Card, is to ensure achievement of business success for the company through employees’ appropriate concentration on the most significant strategic objectives where they have the highest level of impact. In 2011 ZAK S.A. hired a total of 26 new employees (9 blue-collar and 17 white-collar workers). During the same period there were a total of 81 redundancies (38 blue-collar and 43 white-collar employees). There were no group redundancies and as an employer the company did not enter into collective disputes with trade unions.
As at 31.12. 2010
Blue-collar
Principles relating to salaries and bonuses for Azoty Tarnów Capital Group employees are governed by the collective labour agreement, which entered into force in 2002 and was revised in 2011. This agreement covers all company employees with the exception of board members, the chief financial officer and personnel employed on the basis of management contracts. A bonus system is in force within the company – the basis for earning a bonus is the company’s achievement of net profit during quarterly periods. There were no group redundancies at the Parent in 2011 and as an employer it did not have any collective disputes with trade unions.
53
We live in an era when too little is read to be wise and too much thought is given to profit to be beautiful. Few remember that profit is not the only aim of an investment, just as economics is not the science of greed. Economics is not based purely on mathematics but also on the greatest beauty – cold and severe, similar to the beauty of a sculpture.
the potential of consolidation financial statements
Selected consolidated financial data for the Azoty Tarnów Capital Group PLN (thousands)
EUR (thousands)
For the period from 01.01.2011 to 31.12.2011
For the period from 01.01.2010 to 31.12.2010
For the period from 01.01.2011 to 31.12.2011
For the period from 01.01.2010 to 31.12.2010
5 338 029
1 901 784
1 289 348
474 924
Profit on operating activities
581 327
422 206
140 414
105 436
Profit before tax
563 556
417 007
136 121
104 137
Revenue from sales
Net profit
498 941
400 758
120 514
100 079
Total comprehensive income
505 775
400 849
122 165
100 102
64 115 444
39 116 421
64 115 444
39 116 421
9.45
9.99
2.28
2.49
Number of shares Net profit per ordinary share
Net cash flows from operating activities
(167 125)
115 161
(40 367)
28 759
Net cash flows from investing activities
(338 520)
(63 996)
(81 766)
(15 981)
Net cash flows from financing activities
462 189
(16 393)
111 637
(4 094)
Total net cash flows
(43 456)
34 772
(10 496)
8 683
Cash at the beginning of period
279 450
246 485
67 498
61 554
Cash at the end of period
244 791
279 450
59 127
69 786
As at 31.12.2011
As at 31.12.2010
As at 31.12.2011
As at 31.12.2010
Non-current assets
3 308 229
2 272 354
749 010
573 783
Current assets
1 638 000
974 347
370 857
246 029
Non-current liabilities
639 017
366 989
144 679
92 667
Current liabilities
1 154 545
929 610
261 399
234 732
Equity
3 152 667
1 950 102
713 790
492 413
Share capital
320 577
195 582
72 581
49 386
Non-controlling interests
402 197
447 926
91 061
113 104
The selected entries in the statement of financial position, statement of comprehensive income and statement of cash flows are converted into EUR in accordance with the prevailing conversion method: – individual assets and liabilities in the statement of financial position are converted at the exchange rate prevailing at the end of the reporting period: rate as at 31 December 2010 EUR 1 = PLN 3.9603 (Table 255/A/NBP/2010) rate as at 30 December 2011 EUR 1 = PLN 4.4168 (Table 252/A/NBP/2011) – specific items in the statement of comprehensive income and the statement of cash flows were converted according to exchange rates constituting the arithmetical average of exchange rates published by the National Bank of Poland for EUR, in force as at the last day of each month within a given reporting period average exchange rate during the period 1 January - 31 December 2010 EUR 1 = PLN 4.0044 average exchange rate during the period 1 January - 31 December 2011 EUR 1 = PLN 4.1401 The conversion was made in accordance with the previously identified exchange rates by dividing the values expressed in thousands of PLN by the exchange rate.
56
Selected separate financial data for Azoty Tarnów PLN (thousands)
Revenue from sales
EUR (thousands)
For the period from 01.01.2011 to 31.12.2011
For the period from 01.01.2010 to 31.12.2010
For the period from 01.01.2011 to 31.12.2011
For the period from 01.01.2010 to 31.12.2010
1 916 717
1 549 753
462 964
387 013
Profit on operating activities
258 245
75 896
62 377
18 953
Profit before tax
259 621
77 138
62 709
19 263
Net profit
207 875
60 656
50 210
15 147
Total comprehensive income Number of shares Net profit per ordinary share
207 672
62 313
50 161
15 561
64 115 444
39 116 421
64 115 444
39 116 421
4.26
1.55
1.03
0.39
Net cash flows from operating activities
249 063
152 591
60 159
38 106
Net cash flows from investing activities
(943 721)
(224 423)
(227 946)
(56 044)
Net cash flows from financing activities
608 756
8 373
147 039
2 091
Total net cash flows
(85 902)
(63 459)
(20 749)
(15 847)
Cash at the beginning of period
172 191
235 650
41 591
58 848
86 289
172 191
20 842
43 000
As at 31.12.2011
As at 31.12.2010
As at 31.12.2011
As at 31.12.2010
Cash at the end of period
Non-current assets
1 973 543
1 061 987
446 826
268 158
Current assets
502 872
502 500
113 854
126 884
Non-current liabilities
149 906
130 660
33 940
32 992
Current liabilities
400 920
311 604
90 772
78 682
1 925 589
1 122 223
435 969
283 368
320 577
195 582
72 581
49 386
Equity Share capital
The selected entries in the statement of financial position, statement of comprehensive income and statement of cash flows are converted into EUR in accordance with the prevailing conversion method: – individual assets and liabilities in the statement of financial position are converted at the exchange rate prevailing at the end of the reporting period: rate as at 31 December 2010 EUR 1 = PLN 3.9603 (Table 255/A/NBP/2010) rate as at 30 December 2011 EUR 1 = PLN 4.4168 (Table 252/A/NBP/2011) – specific items in the statement of comprehensive income and the statement of cash flows were converted according to exchange rates constituting the arithmetical average of exchange rates published by the National Bank of Poland for EUR, in force as at the last day of each month within a given reporting period: average exchange rate during the period 1 January - 31 December 2010 EUR 1 = PLN 4.0044 average exchange rate during the period 1 January - 31 December 2011 EUR 1 = PLN 4.1401 The conversion was made in accordance with the previously identified exchange rates by dividing the values expressed in thousands of PLN by the exchange rate.
57
Selected separate financial data for Zakłady Chemiczne “Police” S.A.
PLN (thousands)
EUR (thousands)
For the period from 01.01.2011 to 31.12.2011
For the period from 01.01.2010 to 31.12.2010
For the period from 01.01.2011 to 31.12.2011
For the period from 01.01.2010 to 31.12.2010
2 753 660
2 018 224
665 119
504 002
Profit on operating activities
269 509
28 094
65 097
6 786
Profit before tax
252 425
11 174
60 971
2 699
Net profit
321 255
34 920
77 596
8 435
Total comprehensive income
321 255
34 920
77 596
8 435
75 000 000
75 000 000
75 000 000
75 000 000
4.28
0.47
1.03
0.11
Net cash flows from operating activities
125 984
(143 093)
30 430
(34 563)
Net cash flows from investing activities
(56 671)
(23 302)
(13 688)
(5 628)
Net cash flows from financing activities
(60 486)
167 812
(14 610)
40 533
Total net cash flows
8 827
1 417
2 132
342
Cash at the beginning of period
19 858
15 785
4 797
3 813
Cash at the end of period
31 967
19 858
7 721
4 797
As at 31.12.2011
As at 31.12.2010
As at 31.12.2011
As at 31.12.2010
Non-current assets
847 868
791 446
191 964
199 845
Current assets
646 922
474 632
146 468
119 847
Non-current liabilities
211 500
106 656
47 885
26 931
Current liabilities
408 137
605 524
92 405
152 898
Equity
875 153
553 898
198 142
139 863
Share capital
750 000
750 000
169 806
189 380
Revenue from sales
Number of shares Net profit per ordinary share
58
Selected separate financial data for ZAK S.A.
PLN (thousands)
EUR (thousands)
For the period from 01.01.2011 to 31.12.2011
For the period from 01.01.2010 to 31.12.2010
For the period from 01.01.2011 to 31.12.2011
For the period from 01.01.2010 to 31.12.2010
2 193 317
1 759 420
529 774
439 372
Profit on operating activities
253 178
56 857
61 153
14 199
Profit before tax
236 491
40 561
57 122
10 129
Net profit
191 539
30 317
46 264
7 571
Total comprehensive income
191 539
30 317
46 264
7 571
57 012 860
57 012 860
57 012 860
57 012 860
3.36
1.00
0.81
0.25
Revenue from sales
Number of shares Net profit per ordinary share
Net cash flows from operating activities
215 177
124 144
51 974
31 002
Net cash flows from investing activities
(169 708)
(250 888)
(40 991)
(62 653)
Net cash flows from financing activities
(60 099)
124 892
(14 516)
31 189
Total net cash flows
(14 630)
(1 852)
(3 534)
(462)
Cash at the beginning of period
59 392
61 861
14 346
15 448
Cash at the end of period
44 682
59 392
10 792
14 832
As at 31.12.2011
As at 31.12.2010
As at 31.12.2011
As at 31.12.2010
1 069 773
1 091 324
242 205
275 566
Current assets
451 910
369 301
102 316
93 251
Non-current liabilities
211 497
100 582
47 885
25 398
Current liabilities
301 800
543 196
68 330
137 160
1 008 386
816 847
228 307
206 259
285 064
285 064
64 541
71 980
Non-current assets
Equity Share capital
59
Consolidated statement of comprehensive income for the Azoty Tarnów Capital Group for the period ended 31 December 2011 /in PLN thousands/ Note
For the period from 1.1.2011 to 31.12.2011
Continuing operations
For the period from 1.1.2010 to 31.12.2010
Revenues
2
5 338 029
1 901 784
Cost of sales
3
(4 151 389)
(1 572 293)
Gross profit on sales
1 186 640
329 491
Distribution costs
3
(151 617)
(82 123)
Administrative expenses
3
(312 087)
(123 834)
Other operating revenues
4
34 000
391 040
Other operating costs
5
(175 609)
(92 368)
581 327
422 206
19 129
11 919
Profit on operating activities Finance income
6
Finance costs
7
Net finance income (costs) Profit (loss) on shares in associates measured under the equity method Profit (loss) before tax Income tax
8.1
Net profit (loss) on continuing operations
(39 750)
(17 282)
(20 621)
(5 363)
2 850
164
563 556
417 007
(64 615)
(16 249)
498 941
400 758
Discontinued operations Net profit (loss) on discontinued operations
9
Net profit (loss) Components of other comprehensive income
400 758
Valuation of hedging instruments Settlement of hedging instruments Deferred tax on other comprehensive income
498 941
8.3
Exchange differences from conversion of subsidiaries Total other comprehensive income Total comprehensive income
(1 124)
836
874
1 209
47
(388)
7 037
(1 566)
6 834
91
505 775
400 849
461 527
390 953
37 414
9 805
468 361
391 044
37 414
9 805
Net profit attributable to: Owners of the parent Non-controlling interests Total comprehensive income attributable to: Owners of the parent Non-controlling interests Earnings per share:
10
From continuing and discontinued operations:
Basic (PLN)
9.45
9.99
Diluted (PLN)
9.45
9.99
From continuing operations:
Basic (PLN)
9.45
9.99
Diluted (PLN)
9.45
9.99
60
Consolidated statement of changes in equity for the Azoty Tarnów Capital Group for the period ended 31 December 2011 /in PLN thousands/
Share capital
As at 1 January 2010
Share premium
Hedge accounting provision
Exchange differences on conversion of subsidiaries, associates and jointly controlled entities
Ratained earnings
Total equity attributable to owners of the parent
Equity attributable to non-controlling interests
Total equity
195 582
209 990
(3 088)
-
708 648
1 111 132
2 163
1 113 295
Total comprehensive income for the 12 months ended 31 December 2010
-
-
1 657
(1 566)
390 953
391 044
9 805
400 849
Dividend
-
-
-
-
-
-
(454)
(454)
Non-controlling interests resulting from acquisition of the ZAK S.A. Group
-
-
-
-
-
-
436 412
436 412
As at 31 December 2010
195 582
209 990
(1 431)
(1 566)
1 099 601
1 502 176
447 926
1 950 102
As at 1 January 2011
195 582
209 990
(1 431)
(1 566)
1 099 601
1 502 176
447 926
1 950 102
124 995
470 698
-
-
-
595 693
-
595 693
Total comprehensive income for the 12 months ended 31 December 2011
-
-
(203)
7 037
461 527
468 361
37 414
505 775
Non-controlling interests resulting from acquisition of the Z.Ch. “Police” S.A. Group
-
-
-
-
-
-
301 849
301 849
Changes connected with the increase of stake in the ZAK S.A. Group
-
-
-
-
184 474
184 474
(384 564)
(200 090)
Dividend
-
-
-
-
-
-
(265)
(265)
Other
-
-
-
-
(234)
(234)
(163)
(397)
320 577
680 688
(1 634)
5 471
1 745 368
2 750 470
402 197
3 152 667
Equity issues
As at 31 December 2011
61 61
Consolidated statement of financial position for the Azoty Tarnów Capital Group as at 31 December 2011 /in PLN thousands/
Assets
As at 31.12.2011
Note
As at 31.12.2010
Non-current assets Property, plant and equipment
11
2 747 478
2 038 415
Investment property
12
49 275
26 338
Intangible assets
13
283 000
182 954
Goodwill
13.1
9 124
-
Investments in subsidiaries, associates and jointly controlled entities
14.1
80 106
7 651
Available-for-sale investments
14.2
12 604
12 633
Other financial assets
14.3
565
737
Non-current receivables
17
1 201
3 501
Deferred income tax assets
8.5
124 266
-
Other assets
15
Total non-current assets
610
125
3 308 229
2 272 354
Current assets Inventory Other financial assets
16 14.3
653 171
269 787
253
1 908
Trade and other receivables
17
722 958
417 326
Cash and cash equivalents
18
244 791
279 450
15
16 702
5 751
125
125
Total current assets
1 638 000
974 347
Total assets
4 946 229
3 246 701
Other assets Available-for-sale current assets
11.1
62
Equity and liabilities
Note
As at 31.12.2011
Equity Share capital
As at 31.12.2010
20.1
320 577
195 582
Share premium
20.2
680 688
209 990
Provision for hedge valuations
20.3
(1 634)
(1 431)
5 471
(1 566)
1 745 368
1 099 601
461 527
390 953
2 750 470
1 502 176
402 197
447 926
3 152 667
1 950 102
Exchange differences from conversion of subsidiaries, associates and jointly controlled entities Retained earnings, including:
20.4
Current-period net profit Equity attributable to owners of the parent Equity attributable to non-controlling interests
20.5
Total equity
Liabilities
Liabilities due to borrowings
21
226 072
33 587
Provisions for employee benefits
22
124 932
71 235
Other non-current liabilities
25
790
251
Other provisions
23
118 951
129 288
Government grants
24
17 917
307
Deferred income
27
-
2
Provisions for deferred income tax
8.5
126 378
125 376
Financial liabilities
26
Total non-current liabilities
23 977
6 943
639 017
366 989
Liabilities due to borrowings
21
168 754
Provisions for employee benefits
22
28 247
8 176
2 179
2 763
Liabilities due to current income tax
281 699
Trade and other payables
25
754 181
591 233
Other provisions
23
133 142
39 803
Government grants
24
600
48
Deferred income
27
644
747
Financial liabilities
26
66 798
5 141
1 154 545
929 610
Total liabilities
1 793 562
1 296 599
Total liabilities and equity
4 946 229
3 246 701
Total current liabilities
63
Consolidated statement of cash flows for the Azoty Tarnów Capital Group for the period ended 31 December 2010 /in PLN thousands/
For the period from 01.01.2011 to 31.12.2011 Cash flows from operating activities Profit before tax
For the period from 01.01.2010 to 31.12.2010
563 556
417 007
Corrections
323 824
129 634
Depreciation / amortisation
188 864
92 328
Impairment loss (reversal)
52 683
34 098
Profit (loss) on investing activities
40 479
806
Profit (loss) on disposal of financial assets
(2 281)
(1 025)
Share of the net profit (loss) of associates accounted for using the equity method
(2 850)
(164)
Interest, exchange differences
11 493
4 616
(142)
(544)
35 578
(481)
887 380
546 641
Dividend received Profit (loss) on change in fair value of financial assets measured at fair value Profit (loss) on operating activities before changes in working capital
Change in trade and other receivables
(75 414)
43 417
Change in inventories
(80 016)
18 121
(148 843)
(924)
55 299
15 187
Other corrections
(718 594)
(491 681)
Cash generated from operating activities
(80 188)
130 761
19 696
404
Tax paid
(106 633)
(16 004)
Net cash from operating activities
(167 125)
115 161
Change in trade and other payables Change in inventory, accruals and gains
Interest paid
64
For the period form 01.01.2011 to 31.12.2011
For the period form 01.01.2010 to 31.12.2010
Sale of intangible assets, PP&E and investment properties
8 687
34 647
Purchase of intangible assets, PP&E and investment properties
(344 034)
(94 979)
142
546
(2 519)
(73)
Proceeds from sale of financial assets
4 006
1 825
Interest received
3 014
3 694
599
-
(7 965)
(9 606)
(450)
(50)
Cash flows from investing activities
Dividend received Expenditures on acquisition of financial assets
Grants Other investment proceeds (expenditures) Borrowings Net cash from investing activities
(338 520)
(63 996)
Net proceeds from issuing equity Dividend paid Proceeds from borrowings incurred Repayment of borrowings Interest paid Payment of liabilities under finance lease contracts Other financial income (costs)
594 278
-
(265)
(488)
877 807
155 457
(1 025 851)
(161 792)
(35 971)
(7 605)
(9 226)
(1 965)
61 417
-
Net cash from financing activities
462 189
(16 393)
Total net cash flows
(43 456)
34 772
Cash at the beginning of period
279 450
246 485
Effect of exchange differences Cash at the end of period
8 797
(1 807)
244 791
279 450
65
Azoty Tarnów Capital Group revenue from sales by segment /in PLN thousands/ Segment
2011
2010
Change %
Mineral fertilisers
2 586 223
696 796
271.2
Plastics
1 240 844
929 486
33.5
Oxo alcohols
1 063 644
136 143
681.3
Pigments
148 082
–
–
Other
299 236
139 359
114.7
5 338 029
1 901 784
180.7
Total revenue from sales
Azoty Tarnów Capital Group EBIT by segment /in PLN thousands/
Details Net revenue from sales % share Net profit on sales % share EBIT % share
Fertilisers
Plastics
Oxo alcohols
Pigments
Other
2 586 223
1 240 844
1 063 644
148 082
299 236
48.4
23.2
19.9
2.8
5.6
357 649
216 855
124 100
30 139
(5 807)
49.5
30.0
17.2
4.2
(0.8)
345 579
213 819
120 504
4 491
(103 066)
59.4
36.8
20.7
0.8
(17.7)
Sales results on Azoty Tarnów Capital Group products are primarily determined by the market situation in the fertilisers, plastics and oxo alcohol segments. In 2011 revenue from sales in the fertilisers segment amounted to PLN 586 223 000, a 271.2% increase on the previous year. The largest growth in revenue from sales was noted in the granulated urea product group at 46% and calcium ammonium nitrate fertilisers. 2011 also saw revenues in the plastics segment increase by 33.5% y/y to PLN 240 844 000. The largest increase in revenue from sales was recorded in the plastics product group – a 44.9% increase on the previous year. A drop in revenue from sales was noted only in the fertilisers segments (nitrates, decrease of 12.9%) and plastics (other, decrease of 14.1%). Higher revenue from sales was generated mainly as an effect of increase in the sales prices of the Group’s core products.
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The Azoty Tarnów Capital Group generated impressive financial results in 2011. Total Group revenues from the sale of products, goods for resale and materials demonstrated a 180.7% increase on the previous year to PLN 5 338 029 000. The highest level of sales was recorded in the “fertilisers” segment, which at PLN 586 223 000 constitutes 48.4% of total revenues.
Production levels at the Azoty Tarnów Capital Group by product range /in tonnes/ Level of production 2010
Level of production 2011
% change
2 116 118
961 333
120.1
Plastics and semi-finished products for their manufacture
154 038
148 917
3.4
Oxo alcohols
175 275
20 214*
767.1
47 208
6 893*
584.9
13 895**
–
–
1 187 050
126 886
835.5
Product range Mineral fertilisers
Plasticisers Pigments Base chemicals
* covers production volumes from November 2010 ** covers production volumes from August 2011
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Opinion of Independent Statutory Auditor deloitte audyt* To the Shareholders and Supervisory Board of Zakłady Azotowe w Tarnowie-Mościcach S.A.
We audited the accompanying consolidated financial statements of the Zakłady Azotowe w Tarnowie-Mościcach S.A. Group, for which the Parent is Zakłady Azotowe w Tarnowie-Mościcach S.A., having its registered office in Tarnów at ul. Kwiatkowskiego 8, consisting of the consolidated statement of financial position as at 31 December 2011, the consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows for the financial year 1 January 2011 to 31 December 2011 and notes to the financial statements, containing information on the adopted accounting policies and other explanatory information. The Management Board of the Parent is responsible for drawing up the financial statements and the report on Group operations in accordance with the binding provisions of law. The Management Board of the Parent and members of its Supervisory Board are required to ensure that the consolidated financial statements and the report on Group operations fulfil the requirements of the Accounting Act of 29 September 1994 (Polish Journal of Laws of 2009, no. 152, item 1223 as amended), hereinafter the “Polish Accounting Act”. Our objective was to audit and provide an opinion on the compliance of the consolidated financial statements with the accounting principles (policies) adopted by the Group and on whether they clearly and reliably present the Group’s financial situation, asset position and financial result in all significant aspects. We planned and carried out the audit of the financial statements in accordance with the following regulations: section 7 of the Polish Accounting Act, the national financial audit standards issued by the National Chamber of Statutory Auditors in Poland. We planned and carried out the audit of the consolidated financial statements in such manner as to gain the rational certainty necessary for us to express an opinion on the statements. In particular, the audit covered verification of the accounting principles (policies) applied by the Parent and subsidiaries, and examination, mainly on a test basis, of evidence supporting the figures and disclosures in the consolidated financial statements, together with an overview of the statements. We consider that the audit provided us with sufficient basis to issue an opinion.
In our opinion, the audited consolidated financial statements, in all significant aspects: – give an accurate and fair view of information significant for assessing the financial situation and asset position of the Group as at 31 December 2011, as well as its financial result for the financial year 1 January 2011 to 31 December 2011, – were drawn up in accordance with International Accounting Standards, International Financial Reporting Standards and associated interpretations published in the form of European Commission regulations, and where not governed by such standards then appropriate to the requirements of the Polish Accounting Act and secondary legislation issued on its basis, – are compliant with the provisions of law and of the company’s articles of association which impact the content of financial statements. While not raising reservations as to the completeness and accuracy of the audited financial statements, we emphasise the fact that these financial statements are separate financial statements and should primarily be used for statutory purposes. They cannot constitute the only basis for assessing the financial situation and asset position of the company being the Parent of the Group. Aside from its separate financial statements, the company also drafts consolidated financial statements of the Group for which it serves as Parent. The report on the company’s operations for 2011 is complete in the meaning of art. 49, sec. 2 of the Polish Accounting Act and the Ordinance of the Minister of Finance of 19 February 2009 concerning current and periodic information provided by issuers of securities and the conditions for recognising information required by the law of a non-member state as equivalent, and the information contained therein, as sourced from the audited consolidated financial statements, is compliant with such statements.
Marek Turczyński Lead Statutory Auditor conducting the audit Reg. no. 90144
Warsaw, 6 March 2012
* DELOITTE Audyt sp. z o.o., having its registered office in Warsaw, Al. Jana Pawła II 19, 00-854 Warsaw – an entity authorised to audit financial statements, entered onto the list of authorised entities, reg. no. 73, held by the National Chamber of Statutory Auditors.
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Zakłady Azotowe w Tarnowie-Mościcach S.A. ul. Eugeniusza Kwiatkowskiego 8, 33-101 Tarnów, Poland www.azoty.tarnow.pl NIP: 873-000-68-29 WSE symbol: ATT KRS: 0000075450 ISIN: PLZATRM00012 Investor relations tel. +4814 637 35 31 fax +4814 637 47 25 ir@azoty.tarnow.pl
Zakłady Chemiczne “Police” S.A. ul. Kuźnicka 1, 72-010 Police, Poland www.zchpolice.pl NIP: 851-02-05-573 WSE symbol: PCE KRS: 0000015501 ISIN: PLZCPLC00036 tel. +4891 317 24 36 relacjeinwestorskie@zchpolice.com
ZAK Spółka Akcyjna ul. Mostowa 30 A, skr. poczt. 163 47-220 Kędzierzyn-Koźle, Poland www.zak.eu NIP: 749-00-05-094 KRS: 0000008993 tel. +48 77 481 26 35 zak@zak.com.pl
Contents 3
Introduction by the President of the Board of Azoty Tarnów
5 8 10 12 13 14
A year of transformation | redefining Poland’s chemicals industry Composition of the Azoty Tarnów Capital Group supervision and management authorities Azoty Tarnów shareholding structure Presentation of the Group Group structure Events impacting on the Group
17 18 22 26 30 32 34
The power of synergy | Azoty Tarnów Capital Group companies Azoty Tarnów Zakłady Chemiczne “Police” S.A. ZAK S.A. ATT Polymers GmbH Polskie Konsorcjum Chemiczne Sp. z o.o. PTK KOLTAR Sp. z o.o.
36 38 40 42 44 47 48 50 52 53
Responsibility for future generations | in pursuit of sustainable growth Mission and strategic objectives of the Azoty Tarnów Capital Group Development vectors Production segments Investments and achievement of objectives Development of IT infrastructure Commodities and energy Corporate social responsibility Environmental protection Employment
55 56 57 58 59 60 61 62 64 66 66 67 69
The potential of consolidation | financial statements Selected consolidated financial data for the Azoty Tarnów Capital Group Selected separate financial data for Azoty Tarnów Selected separate financial data for Zakłady Chemiczne “Police” S.A. Selected separate financial data for ZAK S.A. Consolidated statement of comprehensive income for the Azoty Tarnów Capital Group Consolidated statement of changes in equity for the Azoty Tarnów Capital Group Consolidated statement of financial position for the Azoty Tarnów Capital Group Consolidated statement of cash flows for the Azoty Tarnów Capital Group Azoty Tarnów Capital Group revenue from sales by segment Azoty Tarnów Capital Group EBIT by segment Level of production at the Azoty Tarnów Capital Group Independent auditor’s opinion – DELOITTE AUDYT
Publishing | Graphic design © grupa tomami | www.tomami.pl
The report presents the sculptures of Zbigniew Wojkowski.
The report was drafted by Azoty Tarnów. Please send comments and queries to: redakcja@azoty.tarnow.pl
www.azoty.tarnow.pl
Zbigniew Wojkowski was born in 1962 and studied sculpture at the Academy of Fine Arts in Krakow. His work is on display at galleries in Poland, Germany, Sweden, Switzerland, the Netherlands and the US and can be found in numerous public and private collections. In 2004 he was the official representative of Poland at the Parliament of North Rhine-Westphalia in Düsseldorf to mark the country’s accession to the European Union. www.wojkowski.pl