December 01, 2014

To our stakeholders:

I am pleased to confirm that AZOT, PJSC reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Konstantin Salenko
Director of Social Policy of AZOT, PJSC

AZOT PJSC, observes legal norms set in generally binding legal regulations, the labor code in particular and with the Universal Declaration of Human Rights in respect of freedom of thought, conscience and religion, freedom to hold opinions and manifest them, right to just and favorable conditions of work. Thereby AZOT PJSC complies with the prohibition of slavery and prohibition of cruel, inhuman or degrading treatment. Exceeding the limits of basic, generally applied human rights, AZOT PJSC implemented its Code of Ethics, which is a fundamental tool for eliminating any incidents of human rights.

AZOT PJSC developed new Code of Ethics and made internal feedback call center for the employees, which interaction helped to make a positive and constructive contribution to the reduction and elimination of human rights abuses within our sphere of influence.

Labor Union of AZOT PJSC, and Social Policy department have constantly monitoring relevant for the cases of human rights abuses under policy of AZOT PJSC’s Collective Compact and Declaration of Human Rights. No reports of AZOT PJSC being complicit in any human rights.

We recognize the right of employees to collective bargaining and freedom of association in line with International Labour Organization guidelines. We maintain constructive relationships with all representative unions and works councils that enjoy consultative or negotiating powers on issues of mutual interest. Almost all of our employees are members of trade union. Trade union representatives are present in our formal joint management worker Health and Safety Committees. They also serve on the board of our medical scheme and on the boards of retirement funds. We promote an employee relations culture that encourages employees to engage and voice their opinions. We maintain fair, open and constructive relationships with all employees. We regularly review and update our employee relations policies in line with business and legislative requirements.

We have achieved OHSAS 18001 certification and to invest significantly in our employees, specifically in world-class safety processes, employee wellness, training and development, labour practices and diversity. Safety is a strategic imperative for sustainable and competitive operations, and we continue to strive for operating environments that achieve zero harm. All employees have social secured under the government regulations and Collective Compact.

Labor Union of AZOT PJSC and HR department have constantly monitoring, collective bargaining and renewing relevant policy of AZOT PJSC’s Collective Compact focusing on safety, occupational illness, skills development and improvements jobs.

We one of the largest chemical plants in Ukraine that produce nitrogen fertilizers. Consumption of natural gas and water was significantly impact since first production of ammonia that was produced in 1965. Since that impact on environment continuously grew. The implementation of large investment project in 2015 will allow saving about 7.5 million m3 of natural gas per year and reduce impact on the nature. Our strategic response to environmental and societal issues is an integrated understanding of the resources and relationships – or capital stocks – that we depend on to create sustainable value for our shareholders and, in turn, our stakeholders. The strategic decisions we make in allocating resources to run our business and advance our growth projects take cognisance of our use of, and impacts on the ecological processes and natural resources – such as natural gas, air, electricity and water – that we need to produce nitrogen fertilizers to feed the world.

We have achieved ISO 14001 certification and implemented environment projects as result was reducing emissions of ammonium nitrate dust by 60 tons per year; carbons – by 1.1 tons per year; nitrogen dioxide – by 110 tons per year; and ammonia – by 5 tons per year. Natural gas consumption for production of one ton of ammonia was reduced from 1,077 to 1,029 m3 and for one ton of liquid ammonia reduced from 95.9 to 87.5 m3. Also following overhauls, the required energy for production of one ton of ammonia nitrate decreased from 30.71 kW in 2012 to 29.91 kW in 2013. The total water resources consumptions decreased on 10 percent in 2014.

Safety Environment department and Industrial-Sanitary laboratory of AZOT PJSC have constantly monitoring and collecting all data regarding producing impact on the environment area to avoid exceed pollution.

The AZOT’s Code of Ethics focuses is two-fold: firstly, to proactively advance an ethical culture in AZOT PJSC; and secondly, to deal with transgressions. The AZOT’s code of ethics addresses corruption, bribery, conflicts of interest, human rights and related subjects, and governs our approach to ethical behaviour and fair business practice. It describes the four fundamental AZOT’s ethical standards – responsibility, honesty, fairness and respect – that should inform the decisions of all employees in their day-to-day business activities. Starting from 2015, senior and middle management, as well as employees identified as being in “high risk” positions, are required to formally certify that they know and understand the code of ethics and its associated guidelines. Regular training will provided to ethics officers in all aspects of ethics management.

AZOT PJSC developed new Code of Ethics and made internal feedback call center for the employees, which interaction helped to build transparency on the work relations and the tender procedures within the Company are clear and transparent, in accordance with the applicable law provisions.

AZOT's call-center data collect for Secure Officer and HR department for relevant decision in personnel action.