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Corporate Social Responsibility

REPORT 2016

2016

Corporate Social

Responsibility

REPORT

CORPORATE SOCIAL RESPONSIBILITY | 20164

Principles of Corporate Responsibility 4

Foreword 5

About AB “Achema” 6

Company’s Governance 6

Company’s Activity 6

Financial Indicators 8

Company’s Investments 9

Production 12

Social Responsibility of AB “Achema” 14

Personnel 15

Protection of Human Rights 15

Implementation of Occupational Health and Safety Policy 18

Environment Protection 19

Environmental Management 19

Monitoring of the Environmental Quality 21

Energy Saving, Air Pollution, and Reduction of the Causes of Climate Change 22

Water Protection 23

Waste Treatment 24

Public and Market Information 25

Public 26

Partnerships with and Sponsorship of Local Communities 26

Science and Research 27

Youth 28

Health 28

Volunteering and Campaigns 28

Membership in Organizations 29

Anti-corruption and Transparency 29

Achievements and Evaluations of Responsible Activity

30

Certificates 30

Awards 30

CORPORATE SOCIAL RESPONSIBILITY | 2016 3

The Global Compact relies on ten principles.

Human rights

Principle 1: businesses should support and respect the protection of internationally proclaimed human rights.

Principle 2: make sure that they are not complicit in human rights abuses.

Rights of Employees

Principle 3: businesses should uphold the freedom of associations and the effective recognition of the right to collective bargaining.

Principle 4: the elimination of all forms of forced and compulsory work.

Principle 5: the effective abolition of child labor.

Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

Principle 7: businesses should support a precautionary approach to environmental challenges.

Principle 8: undertake initiatives to promote greater environmental responsibility.

Principle 9: encourage the development and diffusion of environmental-friendly technologies.

Anti-corruption

Principle 10: businesses should work against corruption in all its forms, including extortion and bribery.

Principles of Corporate ResponsibilitySince 2005, “Achema Group”, the owner of AB “Achema”, has been the participant of the United Nations Global Com-pact – the initiative unifying the socially responsible companies. All companies belonging to the Group are bound by the Group’s undertakings; therefore, the principles of the Global Compact are the main guidelines of the responsible activity of AB “Achema” underlying the implementation of corporate responsibility in the fields of human rights, employee rights, environment protection, and fight with corruption.

About the Global Compact

The United Nations Global Compact is the best known voluntary initiative of corporate responsibility involving the companies, organizations, trade unions, and public and civil society organizations from 165 countries around the world

The Global Compact relies on the principles of human rights, labor force, and environment protection which are laid down in the following international documents:

• the Universal Declaration of Human Rights;

• the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work;

• the Rio Declaration on Environment and Development;

• the United Nations Convention against Corruption.


Corporate Social Responsibility (CSR) are the keywords followed by the plant of nitrogen fertilizers that has been operating in Jonava Region for over 50 years in its organization, maintaining of relations with the public, employees, clients, and social partners.

The main and probably the most important principles of social responsibility include environment protection, rights of employees, and relations with the public and these prin-ciples have been the motif, aim, and constantly improved process of the activities of AB “Achema” for many years already. Although we have intuitively installed many other principles of the CRS and the progress and achievements are reflected by various CRS awards and social responsibility audits conducted by the partners, the time has come for the systemic attitude to what we have, what we live for, what principles and assumptions of activity we are relying on.

This first Corporate Social Responsibility Report of AB “Ache-ma” reveals the fields of activity and provisions on the basis of which responsible corporate business culture and practice is developed.

In its everyday business environment, AB “Achema” volun-tarily seeks to achieve more as regards social, environmen-tal, and product-related responsibility than it is actually stipulated by the laws: we ensure the interests of socially sensitive groups, social responsibility, cooperate with social partners, and undertake projects that contribute to the improvement of the environment protection.

In a modern industrial world, mineral fertilizers became one of the most demanded agricultural products contributing to the increase of the land-use productivity and meeting of the increasing need for food products. AB “Achema” produces and exports fertilizers to many countries of Central and Western Europe, Scandinavia, and the Baltic Region.

One of the main goals and challenges of the representa-tives of chemical industry is the environment protection. Having invested millions, we reduced the pollution by 6-8 times over a decade. Global climate change and constantly tighter requirements to the European countries to reduce the greenhouse emissions forced us to look for new solu-tions that increase the energy efficiency and work in a way that the investment to technologies and modernization of facilities would become a constant process.

Respectfully,

Director General

Ramūnas Miliauskas

Social Responsibility

as the Basis for Activity and Attitude to Business


About AB “Achema”

AB “Achema”, the largest producer of nitrogen fertilizers and other industrial chemical products in the country and the largest plant of such type in the Baltic States, was established in 1965.

Company’s Governance

The company’s management bodies are composed by the management board the composition of which is approved by the general meeting of shareholders. The management board appoints the General Director and approves the organizational structure of the management and the company.

Corporate management and delegation of responsibilities is classified into such functional areas as technique, pro-duction, economy and finances, commerce, personnel and general matters, and construction.

Company’s Activity

The purposes of Company’s activities include the following:

to be a reliable partner and the main supplier of nitrogen fertilizers in the agricultural sector of Lithuania, Scandina-via, Eastern and Central European countries, to develop sus-tainable, effective and safe production, conduct responsible governance of the company, and create new products with high added value.

Company’s vision

is to be a business leader in the area of high-quality fertilizers and chemical products based on the advantageous technologies and sustainable production in Lithuania and foreign markets.

In its activities, the company follows the ap-proved business strategy for 2016-2020.


Develop sustainable, effective and safe

production.

Be a reliable partner and the main supplier of nitrogen fertilisers in the agricultural

sector of Lithuania, Scandinavia, Eastern and Central European countries.

Conduct responsible governance of the com-

pany

Develop new products with high added value.

AB “Achema” is a business leader in the area of high-quality fertilisers and chemical products based on the advantageous technologies and sustainable production in the European Union and Scandinavian countries.


Financial indicators

Thousand euros 2007 2008 2009 2010 2011 2012 2013 2014 2015

Authorised capital 73,192 73,192 73,192 73,192 73,192 73,192 73,192 73,192 73,189

Assets 186,695 295,971 245,871 262,379 264,286 286,574 263,506 328,486 417,516

Fixed assets 122,457 208,899 208,284 193,752 149,660 145,511 154,421 170,027 187,701

Income 418,210 598,251 284,041 319,710 627,851 673,184 510,720 530,498 562,583

Production sales, million tons 2.61 2.32 1.94 1.76 2.59 2.69 2.15 2.39 2.59

Turnover 418.21 598.25 284.04 319.71 627.85 673.18 510.72 530.50 562.58

France, 19%

Lithuania, 18%

United Kingdom, 15%

Germany, 8%

Belgium, 6%.

Poland, 6%

CAN, %

Ammonium nitrate, %

CAN and NS, %

Urea, %

UMFR, %

KFD, %

Other products, %

Country of delivery

Product

Canada, 4%

Denmark, 3%

United States of America, 3%

Czech Republic, 3%

Sweden, 3%

Latvia, 2%

Estonia, 2%


Company’s Investments

In 2015, the company invested 26.3 million euros in the modernization of plant’s infrastructure and development of new products.

During the period from 2010 to 2014, the sum of approx. 1.1 million euros was allocated on average each year to realize the environmental aims. The investments to environment

protection are planned in the company by 2020. These in-vestments contribute to the minimization of environmental impact, rational use of resources, and increase in the efficiency of production.

One of the largest environmental investments of the plant is modernization of the system of treatment of air, vapor, and gas emissions used in the production of ammonium nitrate. The sum of over 0.5 million euros was invested in this system in 2014-2015. Other important environmental investments are related to ammonia produc-tion facilities. A new boiler-utilization unit installed in the ammonia production department reduced the number of unplanned idle time in one of the ammonia production facilities and this will allow us to reduce the costs of natural gas and ambient air pollution. Value of project was over 0.6 million euros. The nitric acid production aggregate was also renovated and this modernization reduced the pollution of water used in the cooling cycle with chemical products. In total, the sum of over 0.25 million euros was invested in this project in 2015.

At all operational levels, the Company is oriented to strict observance of the requirements of the laws of the Republic of Lithuania regulating its area of activity, undertakes to increase the production effective-ness, to save natural resources and reduce the generation of waste and pollutants.

In 2000, AB “Achema” installed environment protection management system (EPMS) which is in compliance with the requirements of the International ISO 14000:2004/LST EN ISO 14001:2005 environment protection standard. ISO 14001 standard certifies that the EPMS installed in the company is verified according to the best practice standard and meets its requirements, as well as demonstrates that the company controls and reduces the environmental impact on the performed activities. ISO 9001, OHSAS 18001 and “Product Stewardship” standards introduced in the company reveal the company’s aim for further development of responsible and sustainable business culture and practice inside the organization and the environment.

AB “Achema” exports over 80% of its production to the European markets and is well-aware that a modern and techno-logically advantageous company not only invests to innovations, but also brings together and maintains the best specialists and takes care of the community and environment.


Production of AB “Achema” consists of over 40 different products. The main raw-material used in the production of ammonia and fertilizers is natural gas. The production of other products includes 75 chemical substances and 18 auxiliary chemical substances not included in the composi-tion of production.

The main activities performed in 2015 were production and sale of fertilizers (urea, ammonium nitrate, urea ammoni-um nitrate solution (UANS), potassium ammonium nitrate (PAN)) and other chemical products (ammonium, nitric acid, “AdBlue”, CO

2, urea formaldehyde resins, etc.) and gas

products for metal processing, transport and food industry.

The Company has a license to distribute and supply natural gas, produce, supply, distribute and import electricity, and supply heat.

Since 2013, AB “Achema” has been among 500 largest payers of taxes and other contributions to the State Tax Inspectorate. The company is also among three exporters (legal persons) who managed to sell the highest volumes of goods and services outside Lithuania in 2015.

Company’s sales income for 2015 – 562,583 thousand euros.

Amount of taxes paid to state and “Sodra” budgets – 12,209 thousand euros.

The share of environmental taxes – 312 thousand euros.

The production volumes amounted to 2,569 thousand tons in 2015, i.e. by 6% more than in 2014.


Nitric acid

CAN

Ammonia

Urea

Ammonium nitrate

Calcium ammonium nitrate

UFR

Formalin

Urea solution “AdBlue”

Carbonic acid

Aluminium sulphate 1 000 t/year

1 650

1 336

1 010

785

561

450

83

67

64

44

12

Production Capacities of Departments


Production

Ammonia is the most important raw-material for the production of fertilizers. It is obtained from natural gas and air. Some of gas is incinerated to obtain heat and chemical reactions, the other share is purified and turned into liquid and gaseous ammonia via multi-level conversion. Capacity – 1,010 thousand tons per year.

Nitrogen acid is a product mostly used as a composite part of other products. The subject matter of the production pro-cess consists of catalytic oxidation of gaseous ammonia with oxygen to produce nitrogen monoxide which in the course of further process turns to nitrogen dioxide after binding with oxygen. The final product is obtained after cooling the ob-tained nitrogen oxides and absorbing them with chemically treated water. Capacity – 1,650 thousand tons per year.

Urea – granular, bulky fertilizers produced of liquid ammo-nia and carbon dioxide. Urea is also used as an ingredient in the production of other products. Capacity – 785 thou-sand tons per year.

Ammonium nitrate (niter) refers to granular bulky ferti-lizers received by neutralizing nitrogen acid with gaseous ammonia and by adding magnesium nitrate as a stabilizing additive to improve physical properties of the product. Capacity – 561 thousand tons per year.

Urea ammonium nitrate solution (UANS) means liquid fertilizers produced in certain proportion by mixing urea

and ammonium nitrate solutions (melts) and diluting them with chemically treated water. The obtained mix is cooled. Capacity – 1,336 thousand tons per year.

Calcium ammonium nitrate (CAN) is a granular bulky ferti-lizer. CAN is produced by grinding dolomite and mixing with ammonia nitrate solution. The mix is granulated, dried, sieved, cooled, and conditioned. Capacity – 450 thousand tons per year.

“AdBlue” is a liquid additive used in the fuel of diesel engines the production of which is based on the dilution of urea solution with salt-free water. Capacity – 64 thousand tons per year.

Formalin is produced of a mix of air, water and methanol in contact apparatus where formaldehyde is produced under high temperature and catalyzers. It is later absorbed with water and results in the formation of formalin. This product is also used as an ingredient in the production of other products. Capacity – 66.5 thousand tons per year.

Urea formaldehyde resins (UFR) and urea melamine formaldehyde resins (UMFR) are produced of formalin, melamine, and urea in two stages. At the first stage, the resins are obtained by polycondensation reaction method, whereas during the second stage, their concentration is increased by using vacuum evaporation. Capacity – 82.5 thousand tons per year.


Production of nonconcen-

trated nitric acid

Production of urea ammo-

nium nitrate

Production of calcium

ammonium nitrate

Production of urea

Production ammonium

nitrate

Production of Urea formal-

dehyde resin

Nitric acid

Ammonia

Urea

Production of ammonium

Urea

FormalinCO2

Air

AirMethanol

Natural gas


Social Responsibility of AB “Achema”

This report is a first complex public presentation of the principles and activities of social responsibility of AB “Achema”. The report contains brief information and gives examples on how the company implements the principles of social activity in its everyday practices.

The company is ready to keep its concerned groups – share-holders, employees, trade unions, clients, suppliers and service providers, associations, and international investors – regularly informed about its activities and progress in the field of social responsibility.

The report presents information on how AB “Achema” im-plements and observes the principles of Global Compact.

The main challenges

The Company’s responsibility is implemented through regu-lar activities performed in this field.

Protection of the environment. In all of its activities, AB “Achema” uses innovative means, the best available production technologies and processes that help to reduce the environmental impact, encourage the rational manage-ment and use of resources, reduce the costs and generated waste and plan the development in view of the aspects of possible environmental impact. The company is particularly focused on the modernization of facilities and regularly improves its technologies in order to minimize the impacts.

Employees. “To keep people” is one of the principal priorities of the company, because without them even the most modern equipment will be useless. Therefore, to be attractive and the best place of employment in the region is one of the principles of company’s activity. Approx. 17% of the local residents of employable age work at the company and its branches. We continue traditions and work with families. The knowledge and experience are passed simply to the dynasties: from grandparents – to parents, children and grandchildren.

Safety. Ensuring of safety at work is one of the top priorities of the company. To ensure health and safety at work, the company implements occupational health and safety management system which is regularly improved. The regular emergency training is conducted. We take care of the education of our consumers as regards safe and responsible behavior when using our production.

Public responsibility. AB “Achema” considers its social economic impact and support, as well as relations with communities it operates in to be the important priority of its responsible activities.

1. Environment protection (precautionary measures, responsible activities and action plan, internal and external control, new technologies).

2. Relations with employees (protec-tion of human rights, quality of the work place, equal opportunities).

3. Responsible activity on the market (product liability, relations with clients, quality assurance, participation in the activity of associations).

4. Relations with communities (partnership, cooperation, support).


Trade unionsThere are 2 trade unions in AB “Achema” and their activity is unified and coordinated by the joint administration of trade unions.

In 2015, the company allocated 52 thousand euros to ensure and maintain the activity of trade unions.

The trade unions unify 44% of company’s employees. Each quarter, the meetings of employ-ees, representatives of the trade union and the management are organized in the company’s units. Trade unions are constantly seeking to improve the conditions of employees and annually seek to improve the collective agreement to the benefit of the employees.

Personnel

Approx. 17% of the residents of employable age living in Jonava Region are the employees of the company and its branches. By creating and preserving jobs, the company contributes to the decrease of unemployment rate in the region (2013 – 13.9%, 2014 – 12.1%, 2015 – 10%). 10 new job positions were created in 2015.

In 2015, the average number of employees was 1,441. The index of staff turnover was 5%.

Approx. 47% of employees of AB “Achema” have worked for the company from 5 to 15 years. 18% of employees have worked for over 15 years, 15% – for over 30 years.

Protection of Human Rights

In all of its activities, AB “Achema” relies on the EU require-ments, the laws of the Republic of Lithuania and the good practices of the foreign countries in the field of protection of human rights and ensures that its activities are not contrib-uting to the violations of human rights and speaks against any kinds of violations with regard to human rights.

In 2015, no discrimination or other incidents related to the violations of human rights have been found in the company.

The company implements fair and transparent wage policy, observes the laws regulating overtime and duration of working time, speaks against any type of discrimination (in respect of employees or recruits) and forced labor or child labor, respects the employees’ right to rest, promotes the balance between work and family matters.

AB “Achema” forms flexible work conditions (work sched-ules, duration of work, etc.) in view of the needs of employ-ees. The work schedule may be changed according to the request of the employee.

Additional Benefits

The company implements a programme of additional promotion and motivation of employees. All employees are covered by voluntary health insurance, the sports activities of employees are financed, collective events and festivals are organized, incentives are paid in case of anniversaries, company’s veterans are honored and encouraged, the ben-efits are paid in case of death, a possibility to acquire the products produced in the company for the cost-price is pro-vided, leisure time of children is considered – the summer leisure time of the children of employees in the camps is supported, a possibility for the employees to study, enhance qualification, work on probation is formed, etc.

Established in 1998, the company’s branch “Achema Health Center” forms favorable conditions for the employees to check their health and take care of it, guarantees the emergency first aid, employs high-level specialists providing first, second and third level medical services, conducts the


The company invested 181 thousand euros in the training of employees and enhancement of their qualifications in 2015. The employees are trained in “Achema” training center and various other educational establish-ments and organizations. In addition to the vocational training according to the requirements of the respective jobs, various courses, seminars, and conferences have been attended by 72 company’s employees, whereas the total number of hours of training of employees – 13,000 hours. In total, 1,889 people have been trained in the training center, 509 employees have been certified in “Achema” training center. The first-aid courses have been organized for 308 employees.

The total hours of training per one employee – 9 hours.

preventive healthcare. The medical personnel of the health center are specialized in the area of occupational health of employees working in the field of chemistry.

All employees without any exception are covered by voluntary health insurance. 1,442 employees were covered in 2015 and over 500 thousand euros was invested for insurance.

The employees having no disciplinary offences are paid bonuses in the amount of 100% of their wage stipulated in the employment contract for their excellent work in case of annual leave. In view of the company’s operating results, the incentives are paid at the decision of the management board at the end of the year – during Christmas period.

The company has also established a benefits fund and a charity fund which are used to help the employees in difficult times (according to the company’s established procedure).

A collective agreement is concluded between the company and collective of employees according to the discussed terms and conditions as regards wage, work and rest time, enhancement of qualifications of employees, provision of health and safety, other social guarantees, and other economic conditions. The aim of contract is to form more favorable conditions to employees than those stipulated by the laws of the Republic of Lithuania.

A particular attention is paid to the festivals of employees and annual organization of the Work Veterans Festival and Christmas get-together. The survey is made among the employees and the best employees are elected and the fol-lowing nominations are given: “The Best of the Year”, “The Most Rational of the Year”, “The Worker of the Year”, “The Specialist of the Year”, “The Manager of the Year”, “The Male Achema Employee of the Year”, “The Female Achema Employee of the Year”. The winners are awarded with lei-sure holiday packages. The employees who graduated from

the studies at higher schools in the course of the year are honored in the traditional “Day of Knowledge”.

Education. In 2015, 37% of company’s employees had a higher education.

Gender balance. The major part of company’s employees is composed of men – 73%, while women account for 27%. Due to the specifics of the activity – technological and potentially hazardous nature of work – the chemical sector is dominated by men, while women choose administrative work. We provide equal opportunities both for men and women to choose the nature of work and it is accentuated during the process of recruitment of employees where we do not present questions of discriminating nature.

Among the managerial positions, the gender balance among employees is also very similar, i.e. 92% of managers are men, 8% – women.

Remuneration system. The company’s remuneration sys-tem consists of the tariff part and variable part. Additional employee incentive and motivation means are established in the collective agreement valid in the company.

In 2015, the average wage of employees (specialists and workers) amounted to EUR 1,296 before tax.

The remuneration in the amount of at least 1.5 of the wage of employee is paid for overtime according to the provisions of the collective agreement.

The analysis and research of wage were performed in 2015 with an aim to find out the gaps of the system and the most productive parts and accents to be improved. The compari-son of the average wage with the average of the Lithuanian industry sector was also performed.

Education of competencies and career, integration of new employees. The opportunities of improvement are ensured and are accessible to each employee. The training of em-ployees is encouraged and supported – the studies of em-


ployees at higher schools are financed in accordance with the established procedure. In 2015, the company covered the tuition fees of six employees. Other studying employees are provided with paid educational leave according to the conditions stipulated in the collective agreement.

The acquisition of new skills is promoted in the company and the procedure of internship (practical training) is established. The trainer of theoretical and practical subjects is assigned to a new employee. The trainers are remunerated for training in accordance with the established procedure. All costs incurred when acquiring mandatory certificates are covered by AB “Achema”. A unit of student-interns has been established where specialists of 15 positions acquire new competencies. Theoretical knowledge and practical experience are provided according to the prepared training programmes.

The company organizes internal training and actively participates in various projects. AB “Achema” maintains close cooperation with Kaunas University of Technology and Jonava Polytechnic School.

The company provides opportunity to climb the career lad-der. The Personnel Department prepares and implements individual career plans, training and qualification enhance-ment plans.

Various trainings for general, professional, and management competencies have been organized to the employees of the managerial reserve, e.g. leadership, team-building, man-agement of changes, communication, project management, management of business processes, etc. – in total 400 hours.

Internal system of complaints. Pursuant to the procedure established by the rules of internal procedure, the boxes for the proposals, questions and complaints have been in-stalled in the units. Information on the purpose of boxes is provided in a prominent place on these boxes and a respon-sible person has been appointed for their administration. Proposals and complaints are registered and transferred to be solved by respective services. Confidentiality is guaran-

teed. The continuity of the system of complaints is ensured.

Information and involvement of employees. AB “Achema” publishes an internal newspaper where employees are provided with information on the received proposals, com-plaints and the decisions taken in their regard.

The complaints received by the employees are transferred to the managers, then to responsible services, while the implementation is monitored according to the “control card system” existing in the company. Ten complaints were received in 2015 and six of them were met.

The director general regularly accepts employees in per-sonal meetings. It is conducted according to the regulated description of procedure.

In 2015, 50 meetings took place in the departments, personal meetings of employees with director general, heads, and trade unions. The problems raised during such meetings are included in the operational plans.

When the company’s management solves the matters re-lated to the employees (working regime, changes of bonus systems, etc.), having a substantial effect on the economic and financial status of the employees and objects of the company’s collective agreements, the representatives of trade unions are invited to participate in the meetings of the management board.

In 2015, the proposal of employees to improve the conditions of the workers and install premises to change and have lunch was implemented. There were also proposals regarding the ventilation in the production preparation premises. The adaptation of the proposals of employees resulted in the solution of the problem without any additional investments.

Apprenticeship opportunities. The company forms condi-tions for the students of higher schools and professional schools to adapt theoretical knowledge and acquire practical skills. In 2015, 22 students of higher schools and 10 appren-tices of vocational establishments had apprenticeship in the company. Two students remained to work in the company.


Implementation of Occupational Health and Safety Policy

AB “Achema” pays particular attention to the aspects of occupational health and safety at workplaces and in-crease of responsibility of employees. The top level management is responsible for safe and healthy occupational environment, whereas the safety culture in the company is understood as an integral part of the organiza-tion’s culture. In addition to the establishment of the Occupational Health and Safety Committee in AB “Achema”, the trustees on the matters of health and safety are also appointed in each unit (departments). They are specially trained and supervise the observance of the occupational requirements.

AB “Achema” has implemented occupational health and safety management system BS OHSAS 18001. Occupa-tional health and safety management system is regularly improved and the necessary resources are allocated for the implementation of this policy. External audit has been carried out on 21-25 October 2015. No inadequacies and comments have been recorded during the audit. The Com-pany’s occupational safety and health management system meets the requirements of BS OHSAS 18001 standard.

Occupational safety is ensured and organized in the compa-ny and its branches not only pursuant to the laws, but also by annually revised Plan of Occupational Safety Preventive Means. The fields of activity indicated in this plan, the indicated risk factors, aims of occupational safety means, responsible persons and terms for the implementation of means, as well as controlling bodies.

In 2015, the report on Fertilizers Europe’s Product Steward-ship Program was prepared in the company stipulating the main risks and dangers for the occupational health and safety in the process of production. Implementation of the conclusions of report ensures the application of additional means in this field.

All company’s employees without any exception participate in occupational health and safety training programme and all of them receive personal protection means (including the com-pany’s administrative staff). In 2015, intensive OHS preventive programme was conducted which consisted of training, acqui-sition of skills and improvement, verification and control.

During 2015, two types of drills with and without the partici-pation of special services were carried out in the company. 11 drills were carried out with special services and participation of emergency specialists and ambulance specialists. 16 drills without participation of special services took place in 11 units. In total, 176 drills were carried out in order to teach how to act according to the emergency liquidation plans of units.

So-called “tabletop exercise” takes place each year upon the participation of the representatives of the municipality. Functional drill with participation of not only municipality representatives, but also special services under the subor-dination of the municipality was last organized in 2013. A specific situation from AB “Achema” emergency liquidation plan is tested during “tabletop exercise” and functional drills.

In order to ensure 24-hour medical assistance, medical unit of Achema Health Center operates in the company’s territory in or-der to ensure the necessary medical aid at any time of the day.

The collective agreement stipulates that by taking care of the health of employees the employee performs the meas-urements of air pollution, noise, vibration, temperature, etc. according to the approved schedules and the heads of the units are responsible for the familiarization of the employees with the results. In case of detection of any deviations, the corrective actions are taken.

Two accidents at work were recorded in 2015 and both resulted from the fault of the em-ployees. No fatal traumas of employees were recorded. All accidents were investigated and their cause was the result of the employees’ failure to follow the requirements of the occupational health and safety instructions.


Environment Protection

In 2015, more than half of company’s export consisted of export to France, Germany, United Kingdom, and Belgium. The part-ners of these countries apply high requirements to the production and pay attention to the environmental effects. The compa-ny ensures supervision of production of fertilizers during all stages of production and throughout the entire product lifecycle.

Environmental Management

In the field of environment protection, AB “Achema” gradual-ly follows international conventions and agreements, the re-quirements of the EU and national environmental legislation.

Prevention. AB “Achema” is constantly monitoring and evaluating its activities that may have environmental ef-fects. Each year, the environmental programme stipulating the environmental means for the reduction of environmen-tal effects is approved and performed and the funds for its realization are allocated.

Reliability and control of organic situation of AB “Achema”, a company producing chemical products, are the most important company’s priorities in the field of environmental protection. One of the principal aims of the company is the improvement of environmental situation and application of pollution prevention means in order to reduce the compa-ny’s impact on environment. A separate unit, Laboratory

Control Center (LCC), was established in the company to monitor the environmental effects. Environmental manage-ment system meeting the requirements of ISO14001 stand-ard was implemented in the company in 2000. Internal and external audits of Environmental Management System (AMS) are conducted at specified intervals.

The company has implemented Fertilizers Europe’s Product Stew-ardship Program to ensure the supervision of the production of fertilizers during all stages of production and liability for produc-tion on health, security, and environmental aspects throughout the entire lifecycle – from raw-materials to effective use.

The company includes all environmental requirements related to the activity in the field of environment protection in the register of legal requirements and transposed them to job de-scriptions, regulations, statutes, procedures, and Integrated Pol-lution Prevention and Control Permit No 2/15 of AB “Achema”.

In its everyday practices, the company seeks for the effective use of natural resources, reduction of the impact of pro-duction on people and environment, installation of modern, effective and safe production technologies, reduction of pollu-tion, installation of environmentally-friendly technologies, and grounding of the production of fertilizers and chemical products on the principles of sustainable development.

“Clean environment is essential for us and for future generations” is a principal statement of company’s environmental policy.


In 2015, no complains of environmental nature were received in AB “Achema” and no environmental offences were recorded during the inspections.

The internal audits of Environmental Management System (EMS) were performed in all units in 2015 – 33 audits in total. According to the internal audits, the compli-ance with the Environment Management Programme is ensured by 97.6%.

In 2015, international company “DEKRA Certification” conducted external audit of en-vironmental management system and the validity of ISO14001 certificate was extended until 2018.

The main fields of environment protection of AB “Achema” are as follows:

• to reduce environmental pollution (it is planned to implement the mean of reduction of pollution of cir-culating water in the cooling cycle in the urea depart-ment; the mean planned to be introduced in nitric acid department will enable the company to reduce ambient air pollution with NOX);

• to improve the quality of environmental researches (the focus is on the modernization of the devices of environ-mental pollution and devices measuring its influence. New generation measurement devices ensure precision, reliability, and operational effectiveness of measure-ments);

• to reduce the likelihood of emergencies and emergency situations;

• to save natural and energy resources and raw-materials;

• to enhance the environmental qualification of employees.

In 2015, partial requirements to the suppliers regarding their environmental obligations, promotion to use second-ary raw-materials, etc. and business responsibilities were

performed. The agreements with suppliers contain require-ments with regard to the product, its packaging, labelling, safe transportation, as well as indication which documen-tation should be submitted (material safety sheets, product origin certificates or quality passports, certificates on the radiation tests – for natural origin products, etc.), delivery terms and liability in case of deviation from the require-ments established in the contracts. The selection of contrac-tors according to the established criteria is performed.

Together with sold production the buyers are provided with material safety sheets with complete information on the producer of sold chemical substance or preparation (sold product), composition of chemical material, chemical and physical properties, environment- and health-related hazards and health, as well as protection means, first-aid means, fire-safety means, emergency liquidation means, requirements for use and storage of chemical materials, and requirements for the management of waste.

External and internal training is conducted by integrating the topics of environment protection and the risk at work and occupational safety; 20 trainings (60 hours) were organized in 2015 and were attended by 200 employees.


The investment in the amount of 3.68 million euros was allocated to the improvement of environment protection in 2015.

1. The means implemented in the reduction of environ-mental pollution resulted in the effectiveness of CAN dust treatment in bag filter by 3%.

2. Laboratory control measuring devices enabling us to improve the quality of environmental tests were acquired for the improvement of monitoring of environmental pollution and influencing activities.

3. Special means have been allocated to reduce the risk of accidents and incidents that would enable the reduction of the number of emergency stops of units of production

of nitric acid, to reduce the likelihood of pollution of surface (rainwater) and groundwater waste.

4. Special means allowing the reduction of the use of vapor, electricity and natural gas have been imple-mented to save natural and energy resources.

5. The process condensate system was recon-structed in the ammonia production facility, the aerial coolers of synthesis department were expanded to enable us to reduce the costs of natural gas in the production of ammonia.

Monitoring of the Environmental Quality

AB “Achema” implements environmental monitoring programme. Over 30 emissions from stationary pollution sources are under constant control. The control of the impact on the ambient air outside the company’s territory is performed once a week according to AB “Achema” environ-ment monitoring programme for 2011-2015. The concen-tration of ammonia, nitrogen oxide, carbon monoxide, ammonia nitrates, CAN dust, urea, and other pollutants in the air is monitored.

According to the data of environmental monitoring of 2015, no deviations from permissible pollution levels have been detected. It should be noted that with the increase in the volumes of production the air pollution decreased.

As the production increased by 8% in 2015, the air pollution increased by only 1.2% as compared with 2014.

Ammonia

Particulate matter

Carbon monoxide

Nitrogen oxides

Other pollutants

33%

29%

20%

15%

3%

The main emissions of AB “Achema”, 2015


Pollution, 1 000 t/year Production, 1,000 t/year12

11

10

9

8

7

6

5

4

3

2

1

0

6

5

4

3

2

1

01990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Energy Saving, Air Pollution, and Reduction of the Causes of Climate Change

Due to investments in the modernization of production facilities, improvement of technologies, and reconstruction of cleaning equipment, the company’s pollution level has not been related to the increase of production over the last decades.

Since the start of the third period of trade in emissions in 2013 which will continue until 2020, the greenhouse gases emitted in the course of production of ammonia and nitric acid, i.e. CO

2 and N

2O, included in the EU Emissions Trading

System are subject to emission allowances (EA) in addition to combustion equipment.

The current EU policy on climate change has a considerable impact on AB “Achema”. As the environmental require-ments are constantly becoming tighter, our aim is to reduce the EA deficit by installing environmental technologies.

The company estimates and measures greenhouse emissions regularly. In 2015, 2,755,145 tons of CO

2 were generated from the activities

of AB “Achema”.


Name

Activ

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Susp

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(m

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Bich

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Hyd

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n co

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n (B

DS 7

) m

gO2/

l

Amm

oniu

m n

itrog

en (

mgN

/l)

Nitr

ites

(mgN

/l)

Nitr

ates

(m

gN/l

)

Tota

l nitr

ogen

(m

gN/l

)

Chlo

ride

s (m

g/l)

Sulp

hate

s (m

g/l)

Tota

l Pho

spor

us (

mgP

/l)

Oil

prod

ucts

(m

g/l)

Neris River water 500 m before the discharge pipe

8,2 15 27 2,6 0,21 0,025 0,85 1,2 15 22 0,051 0,16

Neris River water 500 m after the discharge pipe

8,3 16 28 2,8 0,21 0,026 0,86 1,2 16 23 0,050 0,15

Water Protection

To determine the effect of wastewater emitted to Neris River, the samples of the river water are taken at least once per month – 500 meters before the wastewater discharge pipe and 500 m after the discharge pipe.

A series of parameters is controlled. The measurement results of 2015 are provided in the table. The wastewater emitted to Neris River increased by approx. 2,332.8 thou-sand m3 due to the increased production volumes in 2015.

The control of industrial and domestic wastewater is also performed. In 2015, 462,437 thousand m3 of wastewater was discharged to the treatment facilities of UAB “Jonavos vandenys”, i.e. by 5% more than in 2014. The monitoring of groundwater is also performed. No significant changes were determined in the concentration of pollutants in 2015.


Waste Treatment

Special recycling dustbins were placed in the company’s units, as well as special containers for utilization of unused small electrical and electronic equipment and batteries. The contracts with specialized companies are concluded for safe management and utilization of waste generated in the production activity. The waste is managed and utilized according to the contracts concluded with UAB “Jonavos paslaugos”, UAB “Skaistuva”, UAB “Žalvaris“, UAB “EMP recycling“, etc.

The company’s units have assigned employees responsible for sorting, packaging, and labelling of waste generated in the units, submission of data for the accounting of waste, proper maintenance of the waste storage places. Every five years, these employees participate in special training and receive course com-pletion certificates according to the waste management programme prepared in Achema Training Center.

In 2015, 83.87% of haz-ardous waste and 88.4% of non-hazardous waste was delivered to the managers of waste.


Participation in Public Initiatives

Since the company’s activity is closely related to water protection and quality, AB “Achema” is actively partici-pating in educational project “Be Responsible – Protect the Baltic Sea”. Pursuant to this project, the Lithuanian farmers are trained on reliable and responsible use of fertilizers, are familiarized with the problems of protec-tion of the Baltic Sea, other objects that are useful in ensuring the sustainability. The project “Be responsible – Protect the Baltic Sea” is implemented by supporting the individual initiatives of companies and citizens of the Baltic Sea Action Summit that took place in Helsinki on 10 February 2010 (159 initiatives are currently realized in all countries of the Baltic Region and their number is constantly increasing).

The Company organizes constant meetings with elderships and the community. The information on the environmental monitoring data is provided during these meeting and they are attended by company’s manage-ment and environmental experts.

In order to draw attention to the environmental protec-tion and preservation culture, AB “Achema” together with the companies of the Group from all regions of the

country joins the massive annual social initiative “Let’s Do it!”.

The company provides publicly relevant information on its website www.achema.lt, in sections “Social Responsibility” and “Environment Protection”.


Public

In its strategic plan, AB “Achema” has stipulated that in its daily business practices it seeks more than it is actually stipulated by the legal acts for the social, environmental, and transparency fields, i.e. it ensures the interests of socially sensitive groups, social responsibility, cooperates with social partners, communities, undertakes projects that contribute to the improvement of the environment protection.

AB “Achema” is an integral part of Jonava and Kaunas Region communities which is not only willing to cooperate in realization of public cultural, social or educational projects, but also is a frequent initiator of such projects. Since 2010, the Company has maintained constant dialogue with Jonava District Municipality, Youth Public Organizations’ Union “Round Table” and other organizations. 2-3 meetings with active NGOs are organized each year.

By cooperating with these groups of interests, the company identifies the needs of the community and plans the projects

for the future. The cooperation conditions are defined by the annual plan of activities which stipulates all joint projects and activities with local community organizations, public authori-ties, seniors’ club, and foster home establishments.

Due to its impact to the community, AB “Achema” is constantly cooperating with the specialists of Jonava District Municipality and participates in planning processes and work groups. The Company submits proposals for its contribution to the improve-ment of the conditions of the local community.

Partnerships with and Sponsorship of Local Communities

AB “Achema” is the largest sponsor of the region. The support funds are first of all directed to the support of cultural, infra-structure, health, and social security projects in Jonava Region where the company is operating. The sum of over 170 thou-

sand euros has been allocated to the organizations of Jonava District. Consistent dialogues and regular partnership with lo-cal communities means a cooperation which creates mutual useful value. The company organizes quarterly meetings with

In 2015, the support fund increased by 18% as com-pared with 2014. Additional support was provided to 10 organizations.


elderships and communities during which they present the company’s issues and plans and also holds discussions with local residents. Four meetings were organized in 2015.

The company participates in discussions regarding municipality de-velopment solutions and actively contributes to the improvement of the urban environment. The sum of over 250 thousand euros was allocated to Jonava Municipality in 2015 (construction of the monument to the public space of the city and cycling route).

The main aim of AB “Achema” charity and support fund is to contribute to the solution of community’s challenges. In 2015, the sum of 17.7 thousand euros was allocated to this fund. The support is still allocated to the families and victims of the “Nitrogen” accident in 1989.

A particular focus is on the group of special needs – former “Ache-ma” employees. The company cooperates with the Chemistry

Veterans’ Club. In 2015, support was provided to nine trips of the members of Chemistry Veteran’s Club and co-organization of the exhibition of Jonava and the company. Furthermore, the chorus activity of veterans and organization of activities are supported.

In 2015, publication “Taurosta”, the first yearbook of the culture and history of Jonava Region, was prepared and pub-lished together with public organizations.

The goal is to coordinate the activities proposed by all concerned parties and the aims of the company. The fields and priorities of the funding of community projects are discussed annually. The results of cooperation are constantly published by the company and through regional media. Information is provided in the internal magazine, regional press, and other mass information means. The community’s proposals are discussed and, if ap-proved, are included in the company’s activity plans and budgets.

Science and Research

To develop innovations in its activity and attract competen-cies, AB “Achema” develops social partnership with educa-tions institutions. The plan of actions and programme of co-operation with educational institutions have been prepared.

Achema Group is one of the incorporators of KTU Business and Science Valley Santaka. Technical Director of AB “Ache-ma” is the member of the Board of Santaka Valley and the company contributed to the preparation of the cooperation programme.

Productive technology and knowledge exchange takes place with other educational establishments as well, e.g.:

• the traces of heavy metals are periodically detected in urea solution by Physical and Technology Research Center of State Research Institute;

• in the Agrochemical Research Center, the company’s wastewater and groundwater tests are performed, the

traces of metals and oil products are tested;

• Forest Institute of A. Stulginskis University periodically conducts research of AB “Achema” long-term impact on forest ecosystem;

• the Lithuanian Energy Institute performs the measure-ments of the flows of emissions in UKL units and also performed the modelling of distribution of air supplied to the ammonium nitrate granulation tower in 2015.

A constant discussion is held with educational establishments regarding the preparation of necessary employees.

Academic community is provided with conditions for prepa-ration of research, bachelor and master works and doctoral theses, whereas for the company it is a support to research, project and educational activity. The most advanced and mo-tivated students are provided with opportunities to plan and realize their expectations by joining the company’s activities.


Company’s employees participate in traditional campaigns “Let’s do that”, “Earth Hour”, and donation campaigns.

Youth

PI “Žalioji karta” patronized by AB “Achema” accepts 20 advanced students each year. For three years, they learn how to use computers, the art of communication, psychol-ogy, economics, law basics, and foreign languages and are provided with conditions to get ready for the European driver’s license. The students are prepared to hold seven practical tests.

To popularize engineering specialties and in view of the proposals, PI Children and Youth Overall Education Center organized the event for youth “Ro-botiada”. The company expects that this could be an ex-cellent place of preparation of young specialists. We have actively contributed to the national chemistry competition organized for the students of Jonava Old Town Gymnasium.

Health

To improve the health situation in the communities, a modern echoscope of the value of over 63 thousand euros was donated to PI Jonava Hospital. The services of Achema

Health Center are available to the local community as well – 40% of Jonava residents are treated here.

Volunteering and Campaigns

AB “Achema” also promotes vocational volunteering in pro-ject “What’s the Use of It?!”. We also organize target career development events.

In 2015, we organized 15 excursions to students and the company was visited by 528 students in total. The excursions to other companies and organizations are also organized according to the enquiries. A person is assigned for the organization of this activity.

We cooperate with Rukla Refugees Reception Center regarding the employment of refugees in the company and also provide consultations.


Membership in organizations

Organization Membership since

International Fertilizers Industry Association (IFA) 1989

Engineering Ecology Association (EEA) 1995

European Fertilizer Manufacturers Association (EFMA) 1997, member of the committee

“Fertilizers Europe” (previously – EFMA) 2003, true member

Lithuanian Association of Chemical Industry Enterprises (LACIE) 1997

Responsible Business Association of Lithuania (LBAL) 2015

The company is also an active participant of the Lithuanian Confederation of Industrialists, Kaunas Chamber of Commerce, Industry and Crafts, Jonava Branch.


Anti-corruption and Transparency

The company does not tolerate any forms of corruption. It speaks up for high ethical, fairness, and transparency standards. We seek to work fairly, transparently and develop reliable relations with clients, partners, suppliers, and institutions.

Procurements and Promotion of Local Suppliers

Public procurements are conducted by applying transpar-ent and open tendering system (low value procurement is conducted in the form of simplified tendering procedure, higher value procurement is transposed to publicly acces-sible public procurement system of Achema Group). The company has confirmed Procurement Methodologies (valid for all companies of the Group) for procurements and selec-tion of suppliers. In individual cases, the procurements are published in the press.

Procurement from local suppliers showed increase in 2015, thus, stimulating the development of small and medium businesses in the region.

The criteria of local suppliers have been discussed with the members of Jonava Branch of Kaunas Chamber of Commerce, Industry and Crafts, the proposals have been integrated in the procurement procedure of AB “Achema”. The number of local suppliers increased by 5% in 2015.


Achievements and Evaluations of Responsible Activity

We use international certificates in company’s activities in order to prove our obligations for sustainable growth and

ensuring of the quality of products and activities in the fields of environment, health, and security.

Awards

• In 2015, in the business awards organized by the Ministry of Economy of the Republic of Lithuania, AB “Achema” was recognized as the winner in the category “New Industrial Solutions” for its project (AB “Achema” air separation unit) increasing the competitiveness and export opportunities of Lithuania.

• For successfully implemented Air Separation Unit Con-struction Project, Achema Group awarded “Project of the Year” prize to AB “Achema”.

• In 2015, Kaunas Chamber of Commerce, Industry and Crafts awarded AB “Achema” for substantial contribution to the community matters.

• Knowledge Economy Forum recognized AB “Achema” as the most advantageous traditional production company in 2015.

• AB “Achema” constantly participates in the competition “Environmental Achievements” organized by the Ministry of Environment, Engineering Ecology Association, and other

institutions. The company received an award for the clear and measurable productive environmental policy, effective use of natural resources, modernization of production units by installing new emission treatment technology, and other improvements. In the Competition of Best Ecology Services (Ecologists) in the Companies of the Country sponsored by the Ministry of Environment of the Republic of Lithuania, AB “Achema” Laboratory Control Center was awarded as the best company’s ecology service in 2015.

• The Lithuanian Confederation of Industrialists recognized AB “Achema” as the Exporter of 2015 in the category of large companies.

• In the national responsible business awards (NAVA) which are annually organized by the Ministry of Social Security and Labor of the Republic of Lithuania, AB “Achema” received the most prestigious award – “Socially Responsible Company 2015”.

Certificates

Certificate Date of initial certification Validity until Certifying institution

Quality Management Standard ISO 9002 1998 m. 2018 09 14 “Dekra Certification”, Poland

Environmental Management System ISO 14001 2000 m. 2018 09 14 “Dekra Certification”, Poland

Occupational Health and Safety Management System BS OHSAS 18001

2007 m 2019 01 01 “Dekra Certification”, Poland

Fertilizers Europe Product Stewardship 2011 m. 2017 05 24 “Det Norske Veritas”, Belgium


Corporate Social Responsibility2016 report

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