Grupa Azoty : Current Report No. 6/2016

The Management Board of Grupa Azoty S.A. (the 'Company') announces the expected effect of a one-off non-monetary event on the separate and consolidated financial statements of the Company for 2015.

On January 15th 2016, the Company's Management Board passed a resolution under which an impairment loss was recognised in the Company's accounting books as at December 31st 2015, relating to the assets of the plant producing cyclohexanone from benzene at the Plastics Business Unit. In accordance with the provisions of IAS 36, the Company's Management Board identified indications of a decrease in the recoverable amount of those assets below their respective carrying amounts.

The indications relate to change of the production technology for cyclohexanone (used to manufacture caprolactam) − the new technology is based on phenol as the only feedstock, and a significant deterioration of market conditions and the ability to generate cash inflows on sales of cyclohexanone manufactured from benzene.

Having considered these indications, the Management Board conducted an impairment test of property, plant and equipment and intangible assets. The test confirmed the validity of recognising an impairment loss of PLN 11.9m.

The effect of the impairment recognition on the separate and consolidated performance of Grupa Azoty S.A. is as follows:

a) effect on EBIT: PLN 11.9m

b) effect on net profit: PLN 9.7m.

Note: As the audit of the 2015 financial statements of Grupa Azoty S.A. has not been completed, the above amounts are not final and may be subject to change. The separate and consolidated annual reports of Grupa Azoty S.A. for 2015 will be published on March 11th 2016.

Legal basis: Art. 56.1.1 of the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies, dated July 29th 2005 (consolidated text: Dz. U. of 2013, item 1382, as amended).