Our capitals

Defined risks:

• Risk associated with trade unions and collective disputes,
• Corporate social responsibility risk,
• PR, media image, brand and reputation.

Results:

• Granted 233 donations,
• 13 projects authored by JSW Foundation,
• Expenditures on rectifying mining damages in local communities: PLN 99.7 million,
• Taxes and fees: PLN 211.6 million,
• Donations for charity purposes: PLN 13.2 million,
• regular direct meetings with local authority representatives,
• member of associations:
  
  • Silesian Scholarship Fund,
  • Miner Family Foundation,
  • Polish Mining Chamber of Industry and Commerce,
  • Hydrogen Europe – Europejskie Stowarzyszenie Wodoru i Ogniw Paliwowych,
  • Critical Raw Materials Alliance  (CRM Alliance),
  • Polish Committee for World Mining Congress.

Impact of social capital on other capitals:

1. financial capital - building lasting and dialogue-based social relations with all stakeholder groups is of significance because our surroundings' acceptance of JSW Group's operations and investments is important. Using financial capital, JSW Group supports social and local initiatives, including through JSW Foundation and sponsoring and promotional activities.
   
   
2. production capital - mining has a strong impact on the surrounding region. JSW Group is a key employer and payer of taxes and other fees related to concessions and deposit exploitation. These funds go to local budgets, making development and investments possible.
   
   
3. intellectual capital - one dimension of JSW Group's cooperation with local communities is the increasingly extensive work with local authorities in the towns and municipalities where its companies operate on mining education. From JSW Group's point of view, this is a solution that secures an influx of young personnel and thus counteracts the generational gap risk. This cooperation is intended to raise the quality of education for young people by offering internships and support for various types of educational projects, which results in potential for the Company's development and ensures optimal conditions for JSW Group's effective and efficient operations. Aside from JSW, other JSW Group subsidiaries are undertaking such cooperation, including CLP-B, JSK and JSU.
   
   
4. human capital - JSW Group is committed to building partner relations with local community representatives, local authorities as well as customers and suppliers. Our employees - our largest stakeholder group - have considerable influence over the development of the social surroundings, including through direct engagement in local initiatives and trade union membership  
   
   
5. natural capital - considering the nature of JSW Group's operations, our employees are involved in their own programs and social initiatives and activities in order to promote the right attitudes for protecting the natural environment and combating climate changes, which should contribute to reducing negative impact and the excessive exploitation of natural capital. 

Defined risks:

• risk associated with particulate matter and gas emissions,
• risk associated with environmental protection regulations,
• risk associated with improper handling of hazardous substances and materials,
• risk associated with mining damages on the surface,
• risk associated with the use of alternative energy sources/fuels in the energy industry,
• risk associated with the cost of energy in the long term,
• risk associated with adapting JSW's activities to EU's climate policy,
• risk associated with increasing the share of renewables and other coloured certificates,
• waste and by-product management risk,
• risk associated with threats to the water environment.

Results:

• processed approx. 1.6 million m³ of brine and produced approx. 67.6 thousand tonnes of high-quality food salt,
• PLN 98.7 million spent on investments in environmental protection,
• 16ha of land subject to rehabilitation,
• 4.3 million m³ of recovered water,
• protection of rivers at a 150-km section thanks to the "Olza" retention and discharge collector system,
• more than 1 billion m³ of coke oven gas used for energy generation purposes,
• more than 24 million m³ of gas from mine methane drainage used for energy generation purposes.

Impact of natural capital on other capitals:

1. financial capital - JSW Group's operations contribute to the degradation of the natural environment, including land deformation, which may lead to damage of public and private property. Moreover, the specific nature of our business involves high environmental costs, which include: investments, emission allowances, environmental protection expenses, fees for use of environment and water services.
   
   
2. production capital - the resource base is expected to be developed within the concession deposits at all of the mines. The effective extraction of coking coal requires the use and availability of appropriate equipment and use of the latest technologies that ensure safety for miners. JSW Group is working with PGNiG on project Geo-Metan, which is aimed at capturing methane from the deposit prior to coal extraction, leading to not only an environmental effect in the from of maximal economic capture of methane but also enhanced employee safety.
   
   
3. intellectual capital - out of respect for natural resources, JSW Group seeks out technological solutions to limit its negative impact on the environment, including by using coal derivative substances such as coke oven gas, which will in the future be used by the Group to produce a clean fuel - hydrogen.
   
   
4. human capital - through initiatives focusing on training and education in environmental protection and climate as well as through research, development and innovation efforts, JSW Group strives to reduce the impact of its operations on the natural environment.
   
   
5. social capital - considering the fact that the Group's operations may be burdensome not only for the environment but also for its closest surroundings, JSW Group is actively engaged in dialogue with local communities.

Defined risks:

• Risk associated with JSW/JSW Group growth and development strategy through mergers and acquisitions,
• Risk associated with identification of strategic objectives,
• Risk associated with evaluating potential investments and strategic transactions,
• Risk associated with project structure and implementation,
• Risk associated with implementing development projects.

Results:

• PLN 110 million spent by JSW Group on the research and development area,
• 63 projects covered by Methodology for Program and Project Management, worth PLN 4.1 billion,
• net book value of intangible assets: PLN 95.2 million,
• 215 people trained as part of the Project Management Academy,
• member of International Project Management Association Polska (IPMA).

Impact of intellectual capital on other capitals:

1. financial capital - in accordance with the financial plan included in the strategy, JSW Group will provide annual funding for the R+D+I area's objectives, which will be allocated to projects that are deemed as top priority. In 2020, JSW Group spent PLN 110 million on research and development. To maximise effects and increase scale in the innovation area, the Group is also using external financing from institutions such as: EU funds (Silesian Voivodship's Regional Operational Program), National Centre for Research and Science Development.
   
   
2. production capital - using modern IT tools to obtain better knowledge, optimise production costs and increase safety is JSW Group's response to the emergence and development of industry 4.0 in global mining. Using the latest technologies is the right direction that will not only ensure JSW Group's optimal development but also set trends for the entire mining industry. Rationally introduced innovative solutions will help us in developing our core business.
   
   
3. human capital - the Group makes every effort to ensure that all employees possess the knowledge necessary to perform their tasks and that, by developing skills, they represent a high level of of motivation, effectiveness and use of their potential so that the tasks they perform support our business objectives not just today but also in the future. Employees have an opportunity to raise their professional qualifications by attending post-graduate studies, industry conferences, seminars or symposiums as well as training organised by external entities and by participating in training and courses organised by the employer.
   
   
4. natural capital - the Group continued its integrated environmental protection activities, focusing on exercising continuous oversight and monitoring as well as concern for maximally reducing the scale of pollution into the environment as well as all steps essential to optimally manage space and natural environment resources. The applied solutions and technologies contribute to the transformation towards a circular economy, which is an essential element in creating a low-emission, resource-efficient, innovative and competitive economy that can drive changes in the economic development model, as outlined by the European Commission. The directions defined in the Strategy in the area of using methane for generating electricity, organisational and product carbon footprint, management of post-industrial land, management of salted mining water and manufacture of products with the use of extractive waste for application in infrastructural investments constitute an element of a sustainable business model and will contribute to achieving circular economy priorities and counteracting climate changes.
   
   
5. social capital - another dimension of JSW Group's cooperation with local communities is the increasingly extensive work with local authorities in the towns and municipalities where its companies operate on mining education. From JSW Group's point of view, this is a solution that secures an influx of young personnel and thus counteracts the generational gap risk. This cooperation is intended to raise the quality of education for young people by offering internships and support for various types of educational projects, which results in potential for the Company's development and ensures optimal conditions for JSW Group's effective and efficient operations. Aside from JSW, other JSW Group subsidiaries are undertaking such cooperation, including CLP-B, JSK and JSU.

Defined risks:

• commodity prices,
• currency risk - changes in PLN exchange rate vs EUR and USD,
• interest rate risk,
• credit risk concerning financial receivables,
• liquidity risk and working capital management risk.

Results:

• Revenue from sales: PLN 6 989.4 million,
• Operating profit: PLN -1 734.3 million,
• EBITDA: PLN -638.4 million,
• EBITDA margin: -9.1%,
• Net result: PLN -1 537.4 million,
• Cash flows from operating activities: PLN 354.7 million,
• Member of associations:
  
  • The Accountants Association in Poland,
  • Institute of Internal Auditors,
  • Polish Association of Listed Companies,
  • Polish Corporate Treasurers Association.

Impact of financial capital on other capitals:

1. production capital - in 2020, the Group focused on development and growth in productivity across all of its segments, generating the following revenue from sales:

With the funds raised and generated, JSW Group can conduct operating activities and invest in future projects. The Group's total expenditures in 2020, amounting to PLN 1 896 million, include PLN 1 633.1 million on tangible assets, PLN 247.8 on right-of-use assets and PLN 15.1 million on intangible assets. Investment expenditures in the respective segments were as follows:

2. intellectual capital - in accordance with the financial plan included in the strategy, JSW Group will provide annual funding for the R+D+I area's objectives, which will be allocated to projects that are deemed as top priority. In 2020, JSW Group spent PLN 110 million on research and development. To maximise effects and increase scale in the innovation area, the Group is also using external financing from institutions such as: EU funds (Silesian Voivodship's Regional Operational Programme), National Centre for Research and Science Development.
   

   Employees also have an opportunity to raise their professional qualifications by attending post-graduate studies, industry conferences, seminars or symposiums as well as training organised by external entities and by participating in training and courses organised by the employer.

3. human capital - as the largest employer, JSW is well-known in the region. JSW plays a key role in providing a safe and stable workplace to employees. As of 31 December 2020, the Group had 30 593 employees. Group companies have separate rules for remunerating employees. The level of remuneration at the Group's entities in 2020 ranged between PLN 4 183.94 and PLN 13 674.78.
   
   
4. natural capital - the mining industry contributes to the degradation of local natural environment through disrupting the landscape or emitting pollution. Striving to minimise its adverse impact on the natural environment, JSW Group spent 273.6 million on environmental protection.
   
   
5. social capital - JSW Group is very strongly embedded in the region where it operates. The mining industry is also a key employer and a key payer of taxes and other fees related to concessions and deposit exploitation. These funds go to local budgets, making development and investments possible. JSW Group is also a sponsor and patron of local sports teams or events of importance to the local community.

Defined risks:

• Risk of succession and placing key jobs,
• Risk associated with employee availability, allocation and development of human resources and subcontractor availability,
• Risk associated with assigning competences and the effectiveness of delegating responsibilities,
• Risk associated with work-related accidents.

Results:

• 10.21 hours of training per employee at JSW on average,
• total number of new hires at JSW Group - 1 438,
• total number of departures at JSW Group - 1 524,
• number of employees JSW Group who took parental leave - 304,
• number of employees returning to work after parental leave ended - 247, including 78 at JSW,
• 43 500 swabs and RT-PCR tests for the presence of SARS-CoV-2 among JSW miners and 25 000 igM/igG antibody tests among employees,
• refund of costs incurred by employees to purchase flu vaccines.

Impact of human capital on other capitals:

1. financial capital - as the largest employer, JSW is well-known in the region. JSW plays a key role in providing a safe and stable workplace to employees. As of 31 December 2020, the Group had 30 593 employees. Group companies have separate rules for remunerating employees. The level of remuneration at the Group's entities in 2020 ranged between PLN 4 183.94 and PLN 13 674.78.
   
   
2. production capital - mining is increasingly frequently faced with the generational gap challenge - a lack of human resources. The ever-greater digitalisation and automation in the extractive sector does not eliminate the necessity to hire qualified staff. To counter this problem, JSW Group is undertaking activities and projects, including agreements with schools offering mining education and the award of scholarships to the best students.
   
   
3. intellectual capital - the Group makes every effort to ensure that all employees possess the knowledge necessary to perform their tasks and that, by developing skills, they represent a high level of of motivation, effectiveness and use of their potential so that the tasks they perform support our business objectives not just today but also in the future. Employees have an opportunity to raise their professional qualifications by attending post-graduate studies, industry conferences, seminars or symposiums as well as training organised by external entities and by participating in training and courses organised by the employer.
   
   
4. natural capital - through initiatives focusing on training and education in environmental protection and climate as well as through research, development and innovation efforts, JSW Group strives to reduce the impact of its operations on the natural environment.
   
   
5. social capital - JSW Group is committed to building partner relations with local community representatives, local authorities as well as customers and suppliers. Our employees - our largest stakeholder group - have considerable influence over the development of the social surroundings, including through direct engagement in local initiatives and trade union membership.