Introduction

JSW Group applies the highest standards and best practices in transparency and corporate governance. It is aware of the need to implement solutions for management of ethics and responsibility in the supply chain. Implementing these solutions enhances credibility amongst both business partners and within the investor community, making the Group more stable and predictable in terms of business risk management.

JSW Group has internal documents that address relations between Group entities and set out basic rules for owners’ supervision. These are:

These documents constitute a set of rules for shaping and observing corporate governance, intended to deploy an effective business model and in effect maximise the Group’s value. Regulations created on the basis of code provisions concerning rules for cooperation in management areas and detailed implementation procedures by increasing the Group’s management efficiency and effectiveness make it possible to streamline the process of achieving its shared objective.

Works are currently in progress on implementing new management rules for Group companies, based on three complimentary pillars that function together without a hierarchical dependence.

JSW is a multi-site enterprise consisting of four hard coal mines organised into separate sites, a production support site and a management board office. Internal organisation of the Company’s sites is specified in separate organisational regulations and organisational schemes.

Organizational Chart as at 31 December 2018

Moreover, after the end of the reporting period, the Management Board made a decision to introduce an amendment to the JSW’s Rules and Regulations and Organization Chart involving, among others, establishment of the “Bzie-Dębina under development” Coal Mine. The Supervisory Board has issued a positive opinion on the Rules and Regulations and the JSW Chart incorporating these changes.

Introducing consistent risk management standards at the Group is aimed at maintaining risk within the set boundaries and ensuring that business objectives are achieved, while maintaining the Group’s security. The enterprise risk management process is inspired by solutions based on best practices, i.e. ISO31000, COSO II, FERMA as well as the specific nature of the Group. A uniform enterprise risk management system encompasses risk identification and assessment, development and implementation of risk response plans, monitoring and reporting on risk management performance.

This policy in the context of risk refers to social responsibility, which is a fundamental matter. Responsibility for internal and external environment is included in the Group’s decision making processes. This approach, taking into account the non-financial consequences of decisions, applies to enterprise risk management.

JSW’s internal audit function operates on the basis of JSW’s Internal Audit Regulations, adopted by JSW’s Management Board and Supervisory Board.  This sets out rules, authority and responsibility and ways to exercise the internal audit function at JSW. The Regulations also specify where the office responsible for implementing the function and internal audit tasks is placed within JSW’s organisational structure.

Certified management systems are implemented at JSW and a number of Group companies. The following certified integrated management systems are in place at JSW:

The system includes targets related to quality, environmental targets and tasks, general and detailed targets for occupational health and safety as well as targets, plans and precautions for information security. Appropriate financial, human and organisational resources are in place to maintain and continuously improve the Integrated Management System and pursue its targets.

The main objectives of the Integrated Management System include:

JSW’s internal control system operates on the basis of JSW’s Internal Control System Regulations. This is a set of regulations and rules constituting the basis for developing and using an internal control system at JSW in accordance with §31 1 of JSW’s Articles of Association.