Consolidated financial statements

General information about Grupa Azoty Group

As at 31 December 2016, Grupa Azoty S.A. Group (“Azoty Group”, the “Group”) comprises: Grupa Azoty S.A. and its subsidiaries and associates as presented in the Azoty Group’s chart on the next page.

The Parent Company was registered in the commercial register of the National Court Register under no. 0000075450 on 28 December 2001 based on the resolution of the District Court in Cracow-Śródmieście for Cracow, XII Commercial Department of the National Court Register. The Parent Company received a REGON identification number 850002268.

Since 22 April 2013, the Parent Company operates under the name Grupa Azoty Spółka Akcyjna (short version: Grupa Azoty S.A.).

The Group’s scope of business activities includes the following:

• processing of nitrogen products,
• production and sales of fertilizers,
• production and sales of plastics,
• production and sales of oxo alcohols,
• production and sales of titanium dioxide,
• production and sales of melamine,
• extracting and processing of sulphur products.

The Parent Company and companies forming Azoty Group were established for an indefinite period.

The consolidated financial statements were authorised for issue by the Parent Company’s Management Board on 26 April 2017.

Description of changes in the Group

Acquisition of shares in Grupa Azoty SIARKOPOL

In 2016, the Parent Company continued the buy-back of shares held by the employees of Grupa Azoty SIARKOPOL and their inheritors. Under the programme, the Group acquired 562 029 shares at PLN 68.45 per share, i.e. for a total of PLN 38 471 thousand. The acquired shares represent 10.22% of the company’s share capital and the Group’s interest in its equity increased from 88.20% to 98.42%.

Subsequent to the reporting date, the Parent Company acquired 17 466 shares in Grupa Azoty SIARKOPOL, representing 0.32% of the company’s share capital for PLN 1 139 thousand. Therefore, the Group’s interest in this entity currently amounts to 98.74%.

Increase in the share capital of PDH Polska S.A.

On 22 November 2016, the Extraordinary General Meeting of PDH Polska S.A. resolved to increase the share capital by issuing 6.8 million new shares with a nominal and issue price of PLN 10 each, i.e. by a total of PLN 68 million. The newly issued shares were subscribed in accordance with the agreement concluded on 5 December 2016 by and between Grupa Azoty POLICE (6.3 million shares) and the Parent Company (0.5 million shares). As a result of the issue, the Group’s interest in the company’s equity increased from 66.00% to 67.33%. The increase in the share capital was registered in the National Court Register on 2 February 2017.

Acquisition of shares in Zakłady Azotowe Chorzów S.A.

On 14 December 2016, realising an agreement signed with the State Treasury, Grupa Azoty PUŁAWY acquired 116 583 shares in Zakłady Azotowe Chorzów S.A. for PLN 2 531 thousand. The acquired shares represent 1.99% of the company’s share capital and the Group’s interest in its equity increased from 88.62% to 90.53%.

Increase in the share capital of Automatyka Sp. z o.o.

On 27 January 2016, an increase in the company’s share capital to PLN 4 654 thousand, i.e. by PLN 107 thousand, by issuing 214 new shares with a value of PLN 500 each, was registered in the National Court Register. All shares were subscribed by new shareholders (the company’s employees). Therefore the Group’s interest in the company’s equity decreased from 77.78% to 76.0%.

Liquidation of Navitrans Sp. z o.o. in liquidation

On 31 March 2016, the liquidation of Navitrans Sp. z o.o. in liquidation, with its registered office in Gdynia, was completed. On 31 March 2016, the residual value of PLN 35 thousand was paid to the Shareholders. On 30 June 2016, the company was removed from the National Court Register.

Agreement on the sale of shares in Remzap Sp. z o.o.

REMIN Sp. z o.o., with which Grupa Azoty PUŁAWY signed a conditional agreement on the sale of shares in REMZAP Sp. z o.o. on 10 December 2015 (amended by the appendix from 4 February 2016) did not fulfil the conditions precedent within the agreed deadline. Therefore, the agreement is considered no longer valid.

Redemption of shares in Remzap Sp. z o.o.

On 14 March 2016, 156 shares held by other shareholders, i.e. REMZAP Sp. z o.o.’s employees, were redeemed. The Group’s interest in the company’s equity remained unchanged (90.81%).

STATEMENT OF THE MANAGEMENT BOARD

The Management Board of Grupa Azoty S.A. presents consolidated financial statements for the 12 month period ended 31 December 2016, which consist of:

• Consolidated statement of profit or loss and other comprehensive income for the period from 01.01.2016 to 31.12.2016,
• Consolidated statement of financial position as at 31.12.2016,
• Consolidated statement of changes in equity for the period from 01.01.2016 to 31.12.2016,
• Consolidated statement of cash flows for the period from 01.01.2016 to 31.12.2016,
• Notes to the consolidated financial statements.

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and present fairly the financial position and financial performance of the Group.

Signatures of the Members of the Management Board
dr Wojciech Wardacki
President of the Management Board

Witold Szczypiński
Vice-President of the Management Board General Director

Tomasz Hinc
Vice-President of the Management Board

Paweł Łapiński
Vice-President of the Management Board

Józef Rojek
Vice-President of the Management Board

Artur Kopeć
Member of the Management Board

Person entrusted with maintaining accounting records

Ewa Gładysz
Head of the Corporate Finance Department
Tarnów, 26 April 2017

Consolidated statement of cash flows

* Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements. 

Consolidated statement of cash flows (continued)

* Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements. 

Consolidated statement of financial position

* Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements. 

Consolidated statement of financial position (continued)

* Financial information restated as presented in point 2.3 of the notes to the

Consolidated statement of changes in equity for the period ended 31 December 2016

* Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements. 

Consolidated statement of changes in equity (continued) for the period ended 31 December 2015

* Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements.

Consolidated statement of profit or loss and other comprehensive income

* Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements. 

Consolidated statement of profit or loss and other comprehensive income (continued)

* Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements.

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