Issuance of securities

In 2016, the parent did not issue, redeem or repay any debt or equity securities. The Company had spent the proceeds from Public Offerings by the end of 2013. The proceeds were used in line with the original issue objectives.

Key data on the shares of the Parent Company

Shareholder

Shareholding structure as at 28th June 2017

* company directly controlled by Norica Holding S.à r.l.

In the period from June 28th 2017 to the date July 19th, the parent was not officially notified of any changes in the large holdings of its shares.

Including:

• AA and B Series Shares - 39 116 421
• C Series Shares - 24 999 023
• D Series Shares - 35 080 040

From 28 June 2017 to 11.07.2017, the Parent Company did not receive official information about changes in the structure of significant blocks of shares.

The Parent Company is listed on the Warsaw Stock Exchange since June 30, 2008.

The share capital of the Parent Entity is PLN 495,977,420 and is divided into 99,195,484 shares with a nominal value of PLN 5 each. The Parent Company's shares, marked with the ATT ticker, are listed on the WSE main market in the continuous trading system and are included in the national indexes: WIG, WIG-Poland, WIG30, mWIG40 and the WIG-CHemia indices.

The Parent Company also includes foreign indexes:

•     MSCI Emerging Markets Index since February 2013. The index aggregates large and mid cap companies representing 23 Emerging Markets. The index currently consists of 832 participants,
•     FTSE Emerging Markets Index since March 2015. The FTSE Emerging Index is part of the FTSE Global Equity Index Series (GEIS), which aggregates large and mid-cap companies with advanced and emerging markets. FTSE indices are listed on the London Stock Exchange.

The Parent Company is present in indices dedicated to socially responsible companies:

•     Since 19 November 2009, it has been one of the listed companies listed on the Warsaw Stock Exchange, which is part of the RESPECT Index portfolio. The Parent Company has been recognized for its commitment to fulfilling its corporate social responsibility responsibilities as one of the highest standards of corporate governance, information governance and investor relations, as well as environmental, social and employee considerations. . In December 2016, for the tenth time, the Company received a certificate confirming presence in the elite group of issuers included in the RESPECT Index, the first in the CEE index of companies complying with the principles of responsible business,
•     In January 2017, the Parent Entity entered the FTSE4Good Emerging Index, which was preceded by a thorough review of FTSE Russell's environmental, social and corporate governance and corporate governance measures. The index was created in December 2016, broadening the group of companies reporting environmental events, corporate governance and socially responsible, to Emerging Markets.

Performance of Grupa Azoty shares

After the all-time high of PLN 113 seen in December 2015, in January 2016 the parent’s share price fell to approximately PLN 100. In mid-February 2016, the share price started to decline steadily, to the all-year low of PLN 51 in mid-November, marking a turning point in the year, following which the short-lived downward trend was reversed and the price started gradual recovery. At year-end, the parent’s shares traded at above PLN 62.

Grupa Azoty share price from January 1st 2016 to December 31st 2016

Source: GPWInfoStrefa, Grupa Azoty

Grupa Azoty share price from the IPO (June 30th 2008) to July 10, 2017

Recommendations

From 01st January 2016 to 19th July 2017 analysts of brokerage houses and investment banks covering the Parent issued 35 recommendations for the stock

Analyst recommendations for Grupa Azoty shares, published between January 1st 2016 and the 19^th July 2017

Investor relations

Acting in accordance with the highest standards of capital market communication and corporate governance, the parent provides all market participants, in particular current and prospective shareholders, with exhaustive and reliable information on events taking place at the parent and the Group. In its communication with investors, the parent goes above and beyond the statutory disclosure requirements and pursues an open information policy in response to the high expectations of capital market participants.

Upon the issue of periodic reports, the Group holds conferences at which the Management Board  presents and discuss financial results. As part of the consolidation process, such conferences are held jointly by all issuers from the Group, to present a coherent picture of the Group to the investors and analysts. Because of the shareholding structure and significant interest they attract, earnings conferences for capital market analysts are broadcast online in real time, in Polish and in English. Conference recordings and presentations are available on the parent’s website and on social networking sites.

In 2014, representatives of the Group also met with capital market participants during numerous one-on-one meetings and conferences, held both in Poland and abroad. They also attended industry conferences and conferences at which listed companies from Eastern and Central Europe were presented.

Keen to communicate with its retail investors as well, the Group holds open webchat sessions following release of its financial reports, where the shareholders are able to communicate directly with the Group’s representatives and ask questions. Presentations of financial results, addressed in particular to institutional investors, investor presentations, and chat logs are available on the parent’s website (the Investor Relations section).

Since its IPO, the Group has held annual meetings with retail investors during the Wall Street conference and the affiliated Targi Akcjonariat fair, both organised by the Polish Association of Retail Investors. In 2016, the Group was the main partner of the conference. In 2016, the Group representatives took part in Capital Market Games, a sports event addressed to minority investors, organised by the Polish Association of Retail Investors.

In response to the shareholders’ expectations, the parent makes every effort to ensure that the published information is disseminated as widely as possible. To this end, the Group publishes its key announcements also in social media. The corporate website is a key tool for communicating with the capital market, featuring the parent’s current and periodic reports, important information about AGMs and EGMs, analyst recommendations and financial results. The website, with its dedicated section for investors, was upgraded to provide more precise capital market information in a more user-friendly manner. The content and presentation quality of the IR section, as well as the use of the Internet to communicate with investors, were recognised multiple times by the jury of the Golden Website Award for Listed Companies, organised by the Polish Association of Listed Companies, achieving a high rank in the competition. The website already received the Golden Website Award in the past, during its 7th and 8th edition.

On its website www.grupaazoty.com, the parent maintains a FAQ section, containing answers to the most frequently asked questions.

The parent’s IR efforts were also recognised by investors, who praised its active participation in the Akcja Inwestor campaign in the popular Polish economic daily Puls Biznesu. Consequently, the parent has been honoured with the prestigious ‘Responds to Investors’ mark since August 2010.

Grupa Azoty S.A. participates in the ‘10 out of 10’ Programme organised by the Polish Association of Retail Investors. The goal of the Programme is to apply best practices in communication with retail investors, based on their needs and communication models used on foreign markets. By participating in the project, the parent promises that the Company will pursue a proactive policy of communication with retail investors and respect their rights. The parent also boasts the ‘2014 Capital Market Hero’ title in recognition of its active two-way communication with retail investors.

In November 2016, the parent was among the winners of ‘Business Sharks’ awards given to commemorate the 25th anniversary of the Warsaw Stock Exchange. The citation stated that “The Management Board and the Investor Relations Team of Grupa Azoty S.A. proved that in their daily business they do not forget to communicate with the media, shareholders, investors and analysts, contributing to the development of the Polish capital market and enhancing its prestige”.

On April 6th 2017, Grupa Azoty earned the prestigious title of ‘Transparent Company of the Year 2016’. The ranking is organised by the Accounting and Tax Institute and the Gazeta Giełdy i Inwestorów Parkiet daily to award companies included in the three main stock-exchange indices − WIG20, mWIG40, and sWIG80 − and selected based on the results of a survey covering financial reporting, investor relations, and corporate governance.

Special control powers of security holders

Pursuant to Art. 16.2 of the parent’s Articles of Association, the State Treasury of Poland, as a shareholder, has an individual right to appoint and remove one member of the Supervisory Board.

Furthermore, in accordance with Art. 43.1.3 and 43.1.4 of the parent’s Articles of Association, the General Meeting is convened by the Management Board:

• at the request of a shareholder or shareholders representing at least one-twentieth of the share capital, submitted in writing or in electronic form at least one month before the proposed date of the General Meeting,
• at the request of the State Treasury as a shareholder, irrespective of its interest in the Company’s share capital, submitted in writing at least one month before the proposed date of the General Meeting.

Pursuant to Art. 45.4 of the parent’s Articles of Association governing the placing of matters on the agenda of the next General Meeting by shareholders, a shareholder or shareholders representing at least one-twentieth of the Company’s share capital may request that certain matters be placed on the agenda of the next General Meeting. The same right is held by the State Treasury as the Company’s shareholder, irrespective of its interest in the share capital.

Pursuant to Art. 45.8 of the parent’s Articles of Association, prior to the date of the General Meeting, a shareholder or shareholders representing at least one-twentieth of the Company’s share capital may submit to the Company draft resolutions on the matters included or to be included in the agenda of the General Meeting, in writing or with the use of electronic means of communication. The Company promptly publishes such draft resolutions on its website.

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