REDEMPTION OF FIZ INVESTMENT CERTIFICATES
Decisions were made during 2020 to redeem a portion of the investment certificates held by JSW: investment certificates worth a total of PLN 1,398.8 million were redeemed. The monies obtained from the redemption of FIZ certificates are used for the Group’s current operations and for investment activity. The specifics of the various redemption amounts are presented in detail in Note 7.7. of the consolidated financial statements of the JSW Group for the financial year ended 31 December 2020.
CERTIFICATES AWARDED TO JSW IT SYSTEMS
On 20 January 2020, JSW IT Systems was awarded the status of authorized Asix Platform Integrator (IPA GOLD). The status confirms that JSW IT Systems has a high level of competence for development of SCADA class applications based on solutions of Askom Sp. z o.o.
UPDATEDD JSW STRATEGY
On 12 February 2020, the JSW Supervisory Board approved the updated JSW Strategy including the Group’s Subsidiaries until 2030. The Strategy for 2020-2030 has set new directions and undertakings, which support the Group’s efforts to grow the shareholder value of the company and the entire Group, as depicted in Section 3 of this report.
JSW COMBATING THE CORONAVIRUS
On 10 March 2020, the JSW Management Board adopted a resolution to take actions preventing the spreading of the coronavirus. The President of the JSW Management Board appointed a crisis management team. Vice-President of the Management Board for Technical and Operational Matters Artur Dyczko became the head of the team. The crisis management team takes a number of preventive measures and measures strengthening the safety of employees aimed at preventing the spread of the coronavirus. The detailed description of the actions taken is provided in Section 1.5 of this report.
NEW CONCESSIONS FOR JSW
JSW received new coal mining concessions which will guarantee the Company’s continuous operation until 2051. The new concessions cover the Pniówek, Szczygłowice, Jas-Mos 1 and Bzie-Dębina 1 Zachód coal deposits. Moreover, the periods of validity of the mining concessions for the Budryk and Knurów deposits have been extended.
FIRE IN THE ZOFIÓWKA SECTION
On 30 March 2020, an endogenous fire broke out in the Zofiówka Section in the D-2 longwall area at level 900 meters. When the fire started, seven miners were in the threatened area. They withdrew from the danger zone by themselves. The rescue campaign was conducted with the participation of representatives of the Central Mining Rescue Station (CSRG) and under the supervision of the Regional Mining Authority (OUG) in Rybnik.
WIRELESS COMMUNICATION SYSTEM
JSW has purchased a state-of-the-art wireless communication system for mine rescue workers. The system will enable rescue workers to be in continuous voice contact with the operation control center during rescue campaigns. In addition to voice communication, the system also transmits data on the battery status, signal strength, etc. The locations of all rescue workers are updated in real time and are displayed on a computer screen. Five teams, the chief rescue worker and the control center may all be connected to the base station. The decision to commence work on the roll-out of a modern communication system was made after the disaster in the Zofiówka Section in May 2018 in which five miners died as a result of the strong tremor.
COOPERATION BETWEEN PGNIG AND JSW ON THE GEO-METHANE PROJECT
Polskie Górnictwo Naftowe i Gazownictwo and JSW have signed an agreement on pre-mining capture of methane from hard coal deposits. The works will be conducted in the KWK Budryk Coal Mine. Rock mass methane drainage is one of strategic technical processes: it is the most effective method of combating the methane hazard. Furthermore, capture of gas from the mine methane drainage system improves energy efficiency and reduces greenhouse gas emissions.
DEVELOPMENT OF DEGRADED AREAS
JSW Innowacje signed a cooperation agreement with Węglokoks S.A. and Katowicka Specjalna Strefa Ekonomiczna S.A. [Katowice Special Business Zone]. One of the key objectives of the agreement is to establish a specialized entity that will deal with the comprehensive development of areas degraded by industry. The establishment of the operator was envisaged in the Program for Silesia developed by the Polish government.
JSW IS BETTING ON EDUCATION
JSW has signed an educational cooperation agreement with the authorities of the Pawłowice municipality. Pursuant to provisions of the agreement, JSW is to provide vocational training in the form of practical courses and apprenticeship in the drift and the training workshop of the KWK Pniówek Coal Mine. The best graduates of the Mining and Electrical Engineering School at the Jan Paweł II High Schools Complex in Pawłowice will be employed by JSW. At present, JSW supports students training mining professions and specialties in schools in Czerwionka-Leszczyny, Pawłowice, Rybnik, Ornontowice, Jastrzębie-Zdrój and Knurów.
MICROSOFT SOFTWARE ASSET MANAGEMENT CERTIFICATE
The Group has received a Certificate confirming the implementation of software management processes – Software Asset Management in the scope of Microsoft software. Software Asset Management (SAM) is a collection of tested IT solutions which bring together people, processes and technologies to optimize software utilization within the entire organization.
ANNOUNCEMENT OF FORCE MAJEURE IN JSW
On 2 April 2020, the JSW Management Board adopted a resolution on the occurrence of force majeure in JSW and notified its business partners of its occurrence and the consequences for some of the liabilities stemming from the concluded commercial agreements. The foregoing decision was made in connection with the spread of the SARS-CoV-2 virus and the related restrictions and measures taken by the governments of countries and businesses around the world. The state of force majeure was called off on 9 July 2020.
PRAIRIE MINING LIMITED PROJECT
On 12 May 2020, JSW decided to end the talks regarding potential cooperation with Prairie Mining Limited (“PDZ”). Talks between JSW and PDZ were held starting from 28 March 2018. Among the key factors influencing the decision to end the talks between JSW and PDZ and the reason for JSW being no longer interested in potential cooperation were the reduction of JSW’s investment activity connected with the spread of SARS-CoV-2 coronavirus and the adverse change of the market conditions.
JSW’S CALL TO SUBMIT SHARE DOCUMENTS
In connection with Article 16 of the Act of 30 August 2019 Amending the Commercial Company Code and Certain Other Acts (Journal of Laws of 2019, Item 1798, as amended in Journal of Laws of 2020, Item 875), the JSW Management Board called on all shareholders holding the share documents of JSW in material (hardcopy) form to submit them to the JSW share deposit operated by the PKO Bank Polski Brokerage House in the Customer Service Office in Jastrzębie-Zdrój, Al. Józefa Piłsudskiego 31, Jastrzębie-Zdrój (44-335) or the Head Office in Warsaw, ul. Puławska 15, Warsaw (02-515), no later than by 1 March 2021, to be converted into electronic form. In accordance with the introduced amendments of the regulations, the force and effect of the share documents in material form issued by JSW expires by law as of 1 March 2021.
Distribution of profit for 2019
On 30 June 2020, the Ordinary Shareholder Meeting of JSW made a decision on the distribution of net profit for the financial year ended 31 December 2019 in the amount of PLN 330.4 million. With this distribution, it made an allocation to cover the net loss incurred on the first application date of IFRS 16 Leases in the amount of PLN 37.6 million and to cover the net loss incurred in Other comprehensive income in the amount of PLN 33.5 million. The Shareholder Meeting decided to allocate the remaining portion of the 2019 financial result in the amount of PLN 259.3 million, to supplementary capital.
COMBUSTION OF METHANE IN KWK BUDRYK
On 2 July 2020, in KWK Budryk, there was a short methane fire in longwall Cz–2, seam 405/1, level 1290 m. Three persons suffered minor injuries and were transported to hospitals in Knurów and Ruda Śląska. 94 persons were evacuated from the site, without the use of emergency escape apparatuses.
SECURING FINANCING UNDER THE GOVERNMENTAL PROGRAM ENTITLED “THE POLISH DEVELOPMENT FUND’S FINANCIAL SHIELD FOR LARGE COMPANIES”
The downturn brought on by the pandemic led to lower revenue, temporary production constraints, liquidity deterioration in the industry and in the entire supply chain, which directly contributes to extending the period of collecting trade receivables from clients, the level of trade receivables and the cash balance. Accordingly, JSW took efforts to mitigate the impact exerted by the past and future effects of COVID-19 on JSW’s liquidity, among others by taking advantage of the solutions available on the market to support working capital management. On 15 July 2020 JSW submitted an application to secure funding under the anti-crisis shield in the maximum amount of PLN 1,750.00 million. On 17 November 2020, the JSW Management Board reported that the Polish Development Fund (“PFR”) had granted to JSW financial support in the form of a liquidity loan of PLN 1.0 billion, and on 15 December 2020 it reported that PFR had awarded JSW financial support under the Polish Development Fund’s Financial Shield for Large Companies in the form of a preferential loan of PLN 173.6 million. The disbursement of the foregoing loans took place in December 2020. In addition, on 23 December 2020, a loan agreement was signed between JSW KOKS and PFR. Under the agreement, a preferential loan in the amount of PLN 24.9 million was granted to JSW KOKS under the government program entitled “The Polish Development Fund’s Financial Shield for Large Companies”.
SUBMISSION OF AN APPLICATION FOR CO-FUNDING OF SALARIES OF JSW’S EMPLOYEES FROM FGŚP
On 30 July 2020, JSW submitted an application to the Voivodeship Labor Office in Katowice for co-funding of employee salaries from the Guaranteed Employee Benefit Fund (FGŚP) for the maximum period of 3 months in the amount of PLN 166.9 million. The application was accepted by the Voivodeship Labor Office on 4 August 2020. The entire amount was credited to JSW’s bank account (the first tranche of PLN 55.6 million was received in August and the second and third tranches of PLN 111.3 million were received in September). On 30 October 2020, JSW settled the received support and repaid the amount of PLN 6.5 million. The total amount of the support received is PLN 160.4 million.
PRESTIGIOUS DISTINCTION FOR JSW
JSW has joined a group of science institutions as a representative of the mining and coke sector in the work in the Polish Committee for Standardization. JSW has become a member of the Technical Committees on natural solid fuels, coke and processed solid fuels and hydrocarbons and refined coal products. Recognition of mutual standards for testing solid fuels is also crucial for determining the quality of the Group’s products.
COKING COAL – CRITICAL RAW MATERIAL
Coking coal, next to iron ore, is the key raw material for the steel industry. On 3 September 2020, the European Commission listed coking coal in the list of Critical Raw Materials for the EU. The economic significance and the risk associated with deliveries of a raw material are the key parameters used to determine the critical importance of the raw materials for the European Union. In European Union countries coking coal deposits are nearly exhausted therefore the Community satisfies most of its demand for the raw material from third country imports. Every year EU steel mills consume 37 million tons of coke, whose production requires 53 million tons of coking coal. Only 17 million tons comes from European Union countries, including as much as 11.6 million tons from Poland, while the rest is imported from Australia, US, Canada and Mozambique. In the European Union JSW is the largest producer satisfying nearly 20% of the annual demand of the European steel industry. The coal produced in JSW contributes to reduction of European Union’s dependence on the imports of this raw material from third countries.
JSW RECOGNIZED AS A “CLIMATE AWARE COMPANY”
In the second edition of the “Corporate Climate Crisis Awareness Study” for WSE-listed companies organized by the Reporting Standards Foundation, Stock Exchange Issuers Association and Bureau Veritas Polska, six listed companies received the title of “Climate-Aware Companies”. JSW was one of them. JSW was given the title of a “Climate-Aware Company” after scoring more than 70% of all points.
SUPPORT OF STATE INSTITUTIONS IN COMBATING THE SARS-COV-2 EPIDEMIC
In 2020, the Management Board of the JSW Foundation and the JSW Management Board allocated approx. PLN 7.2 million to combat the coronavirus. A description of the actions taken by the JSW Foundation is presented in Section 1.5.1. of this report. The JSW Management Board of JSW, with the approval of the Supervisory Board, has decided to provide support for state institutions in the fight with the coronavirus epidemic. The donation financed, among others, the purchase of protective overalls, medical facemasks, gloves and disinfection agents and equipment. JSW Innowacje also joined the efforts to combat coronavirus through production of face shields.
JSW FOR THE UN
JSW has joined the Partnership for Sustainable Development Goals (SDGs). As a result JSW has joined the group of Polish companies and institutions which have signed an official declaration of commitment to attainment of UN’s global goals.
THE BEST ANNUAL REPORT
On 15 October 2020, the final gala of the “The Best Annual Report 2019” competition organized by the Institute of Accountancy and Taxes was held in Warsaw. The purpose of the contest is to promote annual reports with the highest utility for shareholders and investors. JSW received a distinction for its integrated report.
JSW AMONG NATIONAL CHAMPIONS
JSW was one of the winners of the “National Champions” ranking, next to PKN Orlen, KGHM Polska Miedź and PGNiG. The third edition of the ranking of the largest Polish companies in four categories: economy, industry, foreign operations and innovation, was prepared by Polityka Insight.
JSW’S ACCESSION TO ERMA
JSW has acceded to the European Raw Materials Alliance (ERMA). This is the aftermath of the September decision of the European Commission which listed coking coal in the List of Critical Raw Materials. ERMA’s objectives include strengthening the role of critical raw materials, creating jobs and supporting investments and innovations in the area of raw materials.
SUPPORT FROM KSSE S.A. AS PART OF PUBLIC AID
In February 2020 JSW KOKS submitted a letter of intent with Katowicka Specjalna Strefa Ekonomiczna S.A. [Katowice Special Economic Zone S.A.] requesting an assessment of the possibilities of obtaining support as part of public aid in connection with the scheduled execution of the task “Modernization of batter no. 4 in the Przyjaźń Coking Plant”. On 30 December 2020 KSSE S.A. issued a decision on providing support in the form of tax relief that will encompass an income tax exemption after the project is completed for the coke sales revenues from the new battery up to the amount of the granted limit. According to the regional aid map for 2014-2020 (Regulation issued by the Council of Ministers of 30 June 2014 § 3) concerning projects executed in the Silesian Voivodship, the value of extended public aid may be up to 25% of qualified expenses. The estimated value of the tax relief taking into account the aid from other sources may amount to EUR 13,985,890.59.