Grupa Azoty S A : Ad. 12 Consolidated report on payments to governments 2023

	Consolidated report of the Grupa Azoty Group on payments to governments
	for the 12 months ended 31 December 2023
	(all amounts in PLN '000 unless indicated otherwise)
Contents
1.	General information	3
1.1. Basis of accounting	3
1.2. Description of the Group	3
1.3. Upstream operations	3
2.	Payments to governments by country	4
3.	Payments to governments by project	6
4.	Policies followed in the preparation of this report on payments to governments	7
4.1. Key preparation policies	7
4.2. Key presentation policies	7

Grupa Azoty Group

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Consolidated report of the Grupa Azoty Group on payments to governments for the 12 months ended 31 December 2023 (all amounts in PLN '000 unless indicated otherwise)

1. General information

1.1. Basis of accounting

This consolidated report on payments to governments has been prepared in accordance with Section 6a of the Accounting Act of 29 September 1994 (the "Act") (Dz.U. of 2023, item 120, as amended), and presents payments to governments made by the Grupa Azoty Group with regard to the upstream sector.

To satisfy the requirements of Art. 63e-Art. 63k of the Act, the Grupa Azoty Group prepares a consolidated report on payments to governments including information on:

• Total amount of payments made to governments in a given country, broken down into payments made at appropriate government levels;
• Total amount of payments made to governments in a given country, at appropriate government levels, broken down into payment categories set out in Art. 63e.6 of the Accounting Act,
• Where payments have been assigned by the entity to a specific project − total amount of payments for each project, broken down into payment categories set out in Art. 63e.6 of the Accounting Act.

Grupa Azoty S.A. (the "Parent"), as the parent of the Grupa Azoty Group (the "Group"), is obliged to issue a consolidated report on payments to governments as at 31 December 2023, including data of the Group companies operating in the upstream sector.

Payments to governments presented in this report are related to the exploration for, appraisal and production of sulfur in Poland.

1.2. Description of the Group

Group Azoty S.A. was entered in the Register of Businesses in the National Court Register (entry No. KRS 0000075450) on 28 December 2001, pursuant to a ruling of the District Court for Kraków-Śródmieście in Kraków, 12th Commercial Division of the National Court Register, dated 28 December 2001. The Parent's REGON number for public statistics purposes is 850002268.

The Grupa Azoty Group is one of Central Europe's major chemical groups with a strong presence on the market of mineral fertilizers, engineering plastics, OXO products, and other chemicals.

1.3. Upstream operations

In 2023, the Grupa Azoty Group included one company operating in the upstream sector: Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A., with its registered office in Grzybów, Kielce Province. Grupa Azoty Kopalnie i Zakłady Chemiczne Siarki Siarkopol S.A. is Poland's largest producers of liquid sulfur.

Sulfur is produced at the Osiek Sulfur Mine, based on a closed-loop system for heat and formation water. On the premises of the Osiek Sulfur Mine, there is a sulfur granulation and pastillation unit enabling transformation of liquid sulfur into granules (sized 0.5mm-6.3mm) and pastilles. The key purpose of the granulation and pastillation processes is to facilitate and reduce the cost of long-haul transport (by sea). The Osiek Sulfur Mine is the only operational sulfur mine in the world. Sulfur is typically obtained through refining crude oil and natural gas. This product is economically competitive to sulfur extracted using the underground melting method as the costs of its production are charged to the main product - oil or gas, and sulfur is treated as a by-product or waste.

Grupa Azoty Group

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2. Payments to governments by country

Payments by country in 2023

POLAND:

Central and local authorities:

Pierwszy Mazowiecki Urząd Skarbowy (First Mazovian Revenue

Office)

County councils

Urząd Marszałkowski (Marshal Office)

Regionalna Dyrekcja Lasów Państwowych w Radomiu (Regional Directorate for State Forests in Radom)

Izba Celna w Nowym Targu (Customs Chamber in Nowy Targ) Narodowy Fundusz Ochrony Środowiska i Gospodarki Wodnej (National Fund for Environmental Protection and Water Management)

Ministry of Climate and Environmental Protection

Entities supervised or controlled by the authorities: Municipality and town municipal offices

TOTAL

Consolidated report of the Grupa Azoty Group on payments to governments for the 12 months ended 31 December 2023 (all amounts in PLN '000 unless indicated otherwise)

	Taxes levied on income, production or						Licence fees, rental fees,
	profits, excluding taxes levied on			Royalties			entry fees, and other		Total
	consumption, such as value added taxes,					considerations for
	personal income taxes or sales taxes						licences or concessions
556	-		-		556
-		-		190	190
-		398	-		398
-		488	-		488
87	-		-		87
-		332	-		332
-		-		323	323
-		498	9,615	10,113
	643			1,716			10,128		12,487

Grupa Azoty Group

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Payments by country in 2022

POLAND:

Central and local authorities:

Pierwszy Mazowiecki Urząd Skarbowy (First Mazovian Revenue

Office)

County councils

Urząd Marszałkowski (Marshal Office)

Regionalna Dyrekcja Lasów Państwowych w Radomiu (Regional Directorate for State Forests in Radom)

Izba Celna w Nowym Targu (Customs Chamber in Nowy Targ) Narodowy Fundusz Ochrony Środowiska i Gospodarki Wodnej (National Fund for Environmental Protection and Water Management)

Ministry of Climate and Environmental Protection

Entities supervised or controlled by the authorities: Municipality and town municipal offices

TOTAL

Consolidated report of the Grupa Azoty Group on payments to governments for the 12 months ended 31 December 2023 (all amounts in PLN '000 unless indicated otherwise)

	Taxes levied on income, production or						Licence fees, rental fees,
	profits, excluding taxes levied on			Royalties			entry fees, and other		Total
	consumption, such as value added taxes,					considerations for
	personal income taxes or sales taxes						licences or concessions
7,173	-		-		7,173
-		-		158	158
-		225	-		225
-		318	-		318
110	-		-		110
-		320	-		320
-		-		345	345
-		481	8,686	9,167
	7,283			1,344			9,189		17,816

Grupa Azoty Group

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Consolidated report of the Grupa Azoty Group on payments to governments for the 12 months ended 31 December 2023 (all amounts in PLN '000 unless indicated otherwise)

3. Payments to governments by project

Payments by project in 2023

			Taxes levied on income, production or profits,				Licence fees, rental fees, entry
			excluding taxes levied on consumption, such as
				Royalties		fees, and other considerations for		Total
			value added taxes, personal income taxes or sales
						licences or concessions
			taxes
Payments at project level
Sulfur Mining Project	344	830	323	1,497
Total projects	344	830	323	1,497
Payments at entity level
Payments at
Grupa Azoty KiZCh Siarkopol S.A.1)	299	886	9,805	10,990
Total payments at entity level	299	886	9,805	10,988
TOTAL			643		1,716		10,128		12,487

1. The largest item of taxes levied (PLN 212 thousand) is value added tax; the largest item of fees is property tax (PLN 9,581 thousand) and royalties (PLN 830 thousand).

Payments by project in 2022

			Taxes levied on income, production or profits,				Licence fees, rental fees, entry
			excluding taxes levied on consumption, such as
				Royalties		fees, and other considerations for		Total
			value added taxes, personal income taxes or sales
						licences or concessions
			taxes
Payments at project level
Sulfur Mining Project	317	801	345	1,463
Total projects	317	801	345	1,463
Payments at entity level
Payments at
Grupa Azoty KiZCh Siarkopol S.A.1)	6,966	543	8,844	16,353
Total payments at entity level	6,966	543	8,844	16,353
TOTAL			7,283		1,344		9,189		17,816

1. The largest item of taxes levied (PLN 6,428 thousand) is corporate income tax; the largest item of fees is property tax (PLN 8,653 thousand) and royalties (PLN 801 thousand).

Grupa Azoty Group

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Consolidated report of the Grupa Azoty Group on payments to governments for the 12 months ended 31 December 2023 (all amounts in PLN '000 unless indicated otherwise)

4. Policies followed in the preparation of this report on payments to governments

4.1. Key preparation policies

This consolidated report on payments to governments has been prepared on a cash basis. In 2023, no in-kind payments were made.

The data contained in this consolidated report on payments to governments is presented in the Polish zloty, rounded to the nearest thousand. The Polish złoty is the Group's functional currency.

4.2. Key presentation policies

The following presentation policies have been applied in the preparation of this consolidated report on payments to governments:

Payments

Amounts paid to governments - appropriate tax authorities of the Republic of Poland, related to the exploration for, discovery, development and production of sulfur (upstream operations).

Governments

Government means any national, regional and local authority, including entities supervised or controlled by such authorities (including state-owned companies).

Projects

A project is defined as operational activities carried out in a distinct exploration area under a licence obtained for that area, which form the basis for payment liabilities to a government in a given country.

Payments are disclosed at project level, except where it is impossible to assign them to a given project - in such cases payments are disclosed at entity level.

Identified payment categories

1. Taxes levied on income, production or profits of the companies, excluding taxes levied on consumption, such as value added taxes, personal income taxes or sales taxes.
   This payment category includes also excise tax on electricity consumption and interest accrued from the date of classifying amounts spent on acquisition or production of assets as tax-deductible expenses until the date on which the period of their use exceeds one year.
2. Royalties.
   This item includes emission charges, annual charges, and environmental charges.
3. Licence fees, rental fees, entry fees, and other considerations for licences or concessions.
   This category includes also payments related to tax on means of transport used in upstream operations and paid property taxes.

Grupa Azoty Group

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Consolidated report of the Grupa Azoty Group on payments to governments for the 12 months ended 31 December 2023 (all amounts in PLN '000 unless indicated otherwise)

Signatures of members of the Management Board

Signed with qualified electronic signature	Signed with qualified electronic signature
_____________________	_____________________
Adam Leszkiewicz	Paweł Bielski
President of the Management Board	Vice President of the Management Board
Signed with qualified electronic signature	Signed with qualified electronic signature
_____________________	_____________________
Andrzej Dawidowski	Hubert Kamola
Vice President of the Management Board	Vice President of the Management Board
Signed with qualified electronic signature	Signed with qualified electronic signature
_____________________	_____________________
Krzysztof Kołodziejczyk	Andrzej Skolmowski
Vice President of the Management Board	Vice President of the Management Board
Signed with qualified electronic signature
_____________________
Zbigniew Paprocki
Member of the Management Board Director
General
Tarnów, 29 April 2024

Grupa Azoty Group

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