Policies

JSW Group's Code of Ethics is a tool that contributes to shaping the desired conduct and sets out standards of conduct at JSW Group for employees, co-workers, superiors and customers as well as partners and local communities, in business relations and in related areas. The values and standards contained therein can also be invoked by third persons, with no working relation with the Group. This especially applies in situations where the actions of the Group or its representatives would cause objections on ethical or legal grounds.

The Code of Ethics is intended to indicate the most important rules and standards of conduct that is acceptable and approved by JSW Group, and to provide information on how to act in circumstances under which a given decision or situation may raise ethical dilemmas. The Code of Ethics contains the most vital elements of ethics, anti-corruption and anti-discrimination policy and rules for respecting diversity and tolerance for other people. It also shows how to report violations and irregularities or failures to abide by obligations mandated by law, threats to occupational health and safety, the health of customers and third parties, unfair competition practices, the safety of natural environment or the commitment to act in a way that minimises negative impact on the environment and local surroundings, as well as promotes respect for all materials, commodities and energy.

Employees who are responsible for contacts with suppliers are required to select suppliers based on objective evaluation criteria for their offerings and the quality of their services, ensure that all offers are compared and contemplated fairly and impartially, prefer cooperation with suppliers who credibly perform their obligations, act in an ethical manner, respect rules regarding environmental protection, occupational health and safety and human rights, and avoid working with suppliers who do otherwise, as well as to disclose all information they have that can have an impact on cooperation between a Group company and a given supplier.

JSW Group's supply chain encompasses thousands of suppliers and counterparties. From January 2018, an ethics clause was introduced in contracts with counterparties, which extends the reach of JSW's ethics regulations onto its supply chain. The wording of these contracts was updated to reflect this. The new provisions state that a counterparty or its sub-contractors and all other persons involved in performing the contract have read JSW Group's Code of Ethics and will respect the standards contained therein. Since 2018, over 1200 counterparties have signed the clause.

In a globalising world, compliance with ethical, social or environmental requirements is not a challenge but a standard that has an ever greater impact on our ability to operate. Starting with the Company's mission - to be a European leader and operate on the global market - we feel obligated to shape responsible conduct and decision-making processes in a manner that incorporates sustainable development.

JSW Group's management approach to widely-defined matters such as environmental protection, relations with local communities, respecting traditions and cultural heritage, occupational health and safety, as well as to human rights and preventing discrimination, is embedded in our Strategy for years 2020-2030, which also addresses JSW Group's subsidiaries and contains our key commitments with regard to the aforementioned issues. They are binding for both management and all other employees at the Group as well as persons cooperating with Group companies regardless of the position, job tenure and place of employment.

As regards human rights and countering discrimination, JSW Group’s management approach is based on a profound belief that every person has inalienable dignity, which comes with a set of inalienable rights. This personalistic philosophy of action is reflected in the Universal Declaration of Human Rights (adopted and ratified in a resolution of the General Assembly of the United Nations on 10 December 1948) and in other fundamental documents, importantly including a convention of the International Labor Organization.

Given the above, Jastrzębska Spółka Węglowa and its subsidiaries are committed to respecting the human rights specified in the Universal Declaration of Human Rights, with a particular emphasis on the fact that all human beings are born free and equal in their dignity and rights (art. 1 of the Universal Declaration of Human Rights) and that there is no acceptance for any form of distinction or discrimination and in consequence everyone is given equal opportunities regardless of race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status (art. 2 of the Universal Declaration of Human Rights).

Despite the fact that JSW's diversity policy does not have the form of a single document, it is manifested in the Group's Code of Ethics, which contains rules for respecting diversity and tolerance.

The Company's activities in the labour area ensure equal opportunities for every employee in access to promotions or personal development. The Company's management are prohibited from discriminating on the basis of: race, social status, ethnic origin, religion, mental illness, disability, gender, sexual orientation, political association or membership, age or marital status. Values such as freedom of opinion, conscience and religion as well as freedom of expression and free speech are guaranteed for every employee.

We believe that the widely-defined respect for people, workplace, surroundings and relations based on transparent rules have a profound impact on how effective our business is and that they strengthen the Company's position in the eyes of our employees and all other stakeholder groups.

We are aware of the necessity to ensure diversity in terms of gender, education, age and experience in relation to all of the Company's employees.

Diversity at JSW and Group companies also applies to key managers and executives. Selection processes take into account elements such as: education, professional experience and competences, and in no way discriminate against candidates with respect to the elements of our diversity policy referred to in this rule.

Table. Diversity at Group Companies' Management Boards and Supervisory Boards

In August 2019, JSW Group adopted a remuneration policy. The policy is aimed not only at furthering business strategy, long-term interests or the stability of the Group's subsidiaries but also at addressing issues such as remuneration for members of the management boards and supervisory boards of subsidiaries as well as Office Directors at JSW's Management Board Office and their Deputies, JSW Management Board Representatives, Directors of JSW's Facilities and their Deputies.

The document takes into account legal requirements concerning remuneration for persons discharging managerial and supervisory functions at companies with a State Treasury shareholder, including the Act of 9 June 2016 on rules for remunerating persons managing certain companies.

Support for activities intended to build an appropriate work culture, positive relations between employees and the notion of responsibility among the management for effective communication and good cooperation is a priority for JSW's management. Taking into account the Management Board's efforts to ensure that the Company's workplace is free of any sort of psychological violence on the part of superiors and other employees, JSW's Management Board adopted JSW's Anti-harassment policy in September 2019.

Actively combating harassment at the Company consists of preventive actions in the form of training for the management, promoting desired conduct, disseminating knowledge on harassment and providing employees with access to training in this area, as well as interventions intended to immediately stop harassment.

The policy defines harassment, contains guidelines for employees to counter harassment as well as instructions and a procedure for reporting undesirable conduct by harassment victims or persons who are aware of such incidents. The policy also contains proposed support activities if harassment occurs and information on liability and consequences for harassers.

In 2019, 3 cases of harassment at JSW Group were reported, including 1 at JSW, however none of the reported cases were confirmed in an investigation by the Anti-Harassment Committee.

In November 2019, JSW's Management Board passed a resolution to adopt JSW Group's Compliance Policy. The policy is a key document addressing the compliance function at the Group. It contains a division of responsibilities and competences by unit as well as methods and ways of examining submissions and conducting explanatory proceedings. The policy's main aim is to counteract and limit the effects of irregularities at the Group by streamlining management structures in this area of operations because a lack of compliance with the law and other regulations may have far-reaching negative consequences for the Company.

The Management Boards as well as employees and co-workers, within their scope of responsibilities and authorisations, are responsible for implementing the Policy and other regulations that are part of the Compliance System. At the level of specific Companies or Facilities, these responsibilities are performed by Compliance Coordinators together with Compliance Units, if so required. A Compliance Unit coordinates and supervises the Compliance System at JSW and Group level.

Introducing this policy will make it possible to ensure compliance, including observing commonly applicable customs and ethics rules as well as identifying and addressing of the risk of a lack of compliance and irregularities, ensuring transparency and openness in economic activities and effective cooperation between the Companies.

As of the writing of this report, one court case was in progress regarding anti-competitive behaviour and breaches of anti-trust laws. This is a case brought by Jastrzębska Spółka Węglowa and instigated in December 2019. The case concerns damages from Minova Ekochem S.A., A.Weber Sp. z o.o. and DSI Schaum Chemie Sp. z o.o. for JSW due to collusion on prices on the mining chemicals market in 2005-2011. The case is valued at PLN 118.7 million. In the case, JSW is being represented by the General Counsel to the Republic of Poland.

At the same time, JSW is unaware of any breaches by the Company of laws or regulations as regards the issues described in Disclosure 419-1 (Non-compliance with laws and regulations in the social and economic area).

JSW Group heavily emphasises corporate responsibility and the occurrence of abuses both within the Group and in its business environment. Adopted in November 2019, the Procedure for reporting irregularities is an element of the Compliance System, which is aimed at preventing irregularities - breaches of laws or operating standards and internal regulations adopted by the Company.

The objective of this Procedure is to introduce consistent rules for reporting irregularities regardless of their nature. This Procedure is not intended to report general work-related problems that do not constitute irregularities. These issues are resolved within the existing employment relations or other dedicated internal regulations.

Taking into account the nature and scale of JSW Group's operations, we have identified the most important areas potentially exposed to corruption, which include procurement processes, investment planning and the disclosure of inside information to unauthorised persons.

In order to prevent the occurrence of inappropriate conduct, in December 2019 JSW's Management Board passed a resolution adopting JSW Group's Anti-Corruption Policy. The Policy's aim is to ensure that JSW Group's operations are in compliance with the law, in particular with provisions pertaining to preventing corruption, and that the environment in which the companies operate is free of any sort of abuse.

The Policy sets out rules and obligations for employees related to counteracting corruption, contains an unequivocal condemnation of corruption and defines corruption.

Mechanisms have also been put in place intended to reduce the risk of any such abuses occurring, which is achieved by identifying operating areas at a higher risk of corruption or by defining alerts that can signal a higher risk of inappropriate conduct.

Rules described in the Anti-Corruption Policy are applicable to all JSW Group companies. All Group companies have an obligation to implement the Policy in reference to members of the management boards, employees, co-workers, counterparties, proxies, representatives and subsidiaries with which they are in a direct relation (obligated entities). To prevent corruption, the companies apply internal procedures of an organisational and financial nature. They are intended to monitor and control the practices being applied in selecting counterparties, executing contracts, accounting and document storage. Each obligated entity is required to report irregularities and circumstances that may raise concerns, including suspicions of corruption. JSW's compliance unit presents an annual report to JSW's Management Board on implementing this policy.

The Anti-Corruption Policy introduced a dedicated line for reporting confirmed or potential irregularities.

At the same time, a dedicated educational and promotional campaign was developed to build trust, especially among employees and co-workers, and to support an ethical culture, promote appropriate norms of conduct and promote the channel for reporting abuses. To this end, a series of training sessions has been developed, which will be addressed to selected groups of people at certain JSW Group companies. The training sessions are narrowly profiled, with their content corresponding to specific organisational levels. In accordance with a schedule developed in December 2019, 337 people are expected to participate in the basic training programme, including the management boards and top executives from JSW Group companies.

No instances of corruption were identified at JSW Group in 2019 and the preceding year.

The main operational rule at JSW Group is an absolute compliance with the law, fair competition rules and good customs. Properly managing conflicts of interest is a part of our corporate culture, which is the responsibility of managers, employees and co-workers. In December 2019, JSW's Management Board passed a resolution to adopt JSW Group's Policy for managing conflicts of interest. The policy contains guidelines for resolving conflicts between the Company's interests and the personal interests of its employees and other obligated entities.

The introduction of this policy builds trust among employees and co-workers by defining conflicts of interest and situations that may lead to a conflict of interest. The policy also sets out methods for preventing and managing conflicts of interest and introduces rules intended to minimise the chances of a conflict materialising.

Every JSW Group company is required to implement this policy in respect of its management board members, employees, co-workers, proxies / representatives and subsidiaries with which they have a direct relation. The policy does not outline rules for resolving conflicts of interest between Companies. JSW Group's relevant internal regulations and the provisions of law apply in such cases.

The Company prioritises equality in hiring and strives to eliminate conflicts and prevent discrimination and abuse related to the hiring of relatives and persons related to employees. This especially applies to those people who serve in executive and managerial capacities or have a material influence over the Company's operations.

The provisions of this policy, adopted in 2019, apply to all employees and management board members and concern mutual relations between persons employed at a given Company. The policy supplements the Company's existing rules concerning hiring, bonuses, promotions, penalties, employee sanctions as well as commencing and ending cooperation.

The policy defines related persons and relatives, sets out rules for hiring and cooperating with related persons and relatives, relations between employees, the obligation to report irregularities and the consequences of failing to abide by the policy.

Every JSW Group company is required to implement this policy in respect of its employees with whom it has a direct relation.

JSW Group does not cooperate with entities whose business is even partially criminal or raises justified concerns. This especially applies to all forms of corruption, tax avoidance or the failure to pay public law liabilities as well as any other manifestations of criminal activity.

In the event that information or a justified suspicion regarding the legality of an activity or avoidance of tax or the failure to pay public law liabilities is disclosed in the course of cooperation, the Company intends to end cooperation with this Counterparty as soon as possible.

Prior to the decision on commencing cooperation with a Counterparty, taking into account its organisational and legal nature, the Company is required to undertake activities in order to verify the basic information with regard to it, including especially the fact that it exists and operates, and the validity of data provided by the counterparty or verification of the entity's status as an active payer of VAT. This counterparty verification process is documented.

The aim of enterprise risk management is to identify potential events and risks that may have an impact on the organisation, to maintain risk within set boundaries and to reasonably ensure that business objectives are achieved. This is a continuous process, subject to modifications in response to the changing economic environment, the Group's operations and the impact of specific risk on the Group's business objectives. Enterprise risk management is one of the tools used to support the achievement of strategic and operating objectives and to provide information on risks and risk management performance.

In accordance with the existing internal regulations, for identified risks a risk owner is designated, who is responsible for that risk, risk sheets are prepared, risk parameters are determined and mitigation activities and risk response plans are put in place. By taking responsibility for a risk, every risk owner manages the key risk factors within an ERM system. Identifying risks and implementing tools for limiting them make it possible to take effective preventive action in the face of a threat. Risk management is a process that methodically resolves issues related to threats to the organisation's operations, such as occurred in the past, are currently present and are the most likely to appear in the future.