- data has been verified, full text of the Independent Assurance Report

In line with our CSR Strategy and with a focus on filling positions within the LOTOS Group in a manner that reflects our business needs, we take every care to communicate with potential candidates by providing good access to information, for example during employment fairs, through cooperation with universities and technical colleges, provision of apprenticeships, and grant programmes. The LOTOS Group carries out its recruitment processes in a transparent and objective manner, taking advantage of the latest candidate evaluation methods. We create opportunities for horizontal and vertical promotion by offering possibilities in a priority internal recruitment process. This takes the form of successively endorsed adaptation programme across the LOTOS Group’s companies, promoting behaviour consistent with our values and enabling new employees to function better and get to know the company faster.

We take every care to raise our employee’s qualifications, providing them with training opportunities, and recurring and newly-created development programmes organised within the LOTOS Academy. In 2012, we implemented the Key Position Succession Planning Programme to ensure the continuity of management, and also to prepare employees with the greatest potential for new, more difficult tasks in the future. We also partially finance English language courses and university studies. The management and their staff plan and implement their career and development objectives together, and in most of our companies, this process is supported by a Periodic Employee Evaluation Programme, prepared and improved with this purpose in mind.

The remuneration system in the LOTOS Group ensures salaries adequate to an employee’s position and duties. Additionally, employees receive an annual bonus based on the financial results of the entire LOTOS Group. Employees implementing special tasks and objectives, assigned to them individually, can also receive incentive awards, and those who are the most involved and distinguished at work are given special awards by the CEO.

We guarantee all our employees an attractive working environment and career development opportunities, plus a good social package, regardless of their gender and age. We have a culture of knowledge sharing that ensures that the development of our employees influences the development of the entire organization. We also maintain good relationships with our pensioned staff, offering them medical care and an active life within the LOTOS Group’s Senior Employees and Pensioners Clubs.

We improve our organizational culture with our adopted values, not only in our programmes and activities, but also by promoting these values in our internal training. We place great emphasis on their importance and assess the level of their adherence during the periodic employee evaluations, and describe and promote them through the LOTOS Group’s Code of Ethics.

An important role in this process is played by our internal communication system. One of the key objectives of the LOTOS Group’s social responsibility strategy is the fostering of organizational culture based on open, multidirectional communication, including development of a consultation system within the LOTOS Group. As part of this objective, we ensure that as far as it is legally possible, employees have the opportunity to discuss any essential operational changes planned in the company, a minimum of 30 days prior to their introduction. Employee representatives are also involved in negotiating and introducing changes which may have an impact on operations in the organization. A notification period for any essential operational changes is defined by binding legal regulations, but it is our good practice to organise regular meetings with the Employee Council and trade unions representatives in the company.

Employment relations

The LOTOS Group provides all employees of indefinite, fixed, full or part-time employment with the opportunity to take advantage of the same additional benefits package guaranteed by the Collective Bargaining Agreements for Grupa LOTOS employees, and by the Rules of Participation in the Company Social Benefits Fund. 95.2% of Grupa LOTOS employees are included in the Collective Bargaining Agreements. The remaining employees are part of the top management whose terms and conditions of employment are agreed individually with the Company’s Board, in consideration of the latest binding legal regulations of employment law. All the companies comprising the LOTOS Group have their own Collective Bargaining Agreements or remuneration policies, whose regulations are identical with the Collective Bargaining Agreements for Grupa LOTOS employees, and the percentage of employees covered by these documents is 99.5% to 99.9%.

Every employee can take advantage of additional medical care from private healthcare institutions and dental care. All parental leave for mothers and fathers and additional maternity leave is provided for, in accordance with legal regulations.

Maternal leave and extended maternity leave in Grupa LOTOS

Year	Persons who have gone on maternity or extended maternity leave /1/		Persons who have returned from maternity or extended maternity leave /2/		Persons whose employment was terminated up to 12 months following their return to work /point of reference 1/
	Women	Men	Women	Men	Women	Men
2010	17	2	22	2	2	1
2011	14	-	13	-	2	-
2012	19	2	14	2	-	-

The company offers other social support in the form of loans, allowances, and partial financing of holidays for employees and their children. Additionally, employees who retire due to disability or old age receive retirement severance pay on terms more favourable than those provided for by the Polish Labour Law. Old age and disability pensioners also have access to additional medical care provided by private healthcare establishments and dental care at their former employer’s cost.

The LOTOS Group provides its employees with the opportunity to join various pension plans. Currently, 12 of our companies take advantage of the group’s unit-linked life insurance cover, which was prepared and introduced in 2001 especially for LOTOS Group employees and is paid for by the employer. Employees join the programme on a voluntary basis.

Saving with the Pillar 3 retirement savings scheme is an essential aspect of responsible planning for one’s financial future, and we make every effort to secure our employees’ future. Regular payments made by the employer towards the unit-linked scheme protect the money invested against market fluctuations. At present, individual employee accounts are credited with premiums paid by the employer. These premiums may essentially increase the employees' savings levels, and money saved in this way will certainly prove helpful at retirement time. Employees can also make their own contributions. The employer pays a premium of PLN 250 to every employee who joins the programme, of which PLN 8.98 is an insurance cover and PLN 241.02 – an investment component.

Participation in the scheme is voluntary and available to insurable employees under 70 years of age, employed under contract. Employees who have previously terminated their insurance coverage are not eligible to participate in the scheme.

Grupa LOTOS	2010	2011	2012
PLN ’000
Premiums under unit-linked insurance policies (Pillar 3 of the Polish pension system)	3,800	3,465	3,519
LOTOS Group	2010	2011	2012
PLN '000
Premiums under unit-linked insurance policies (Pillar 3 of the Polish pension system)	10,174	10,339	11,182

Premiums paid by the employer are accumulated in individual employee accounts and their value is expressed in Polish złoty. Investment returns are a percentage of the accumulated capital. This transparent and easy to understand fund structure offers clear information on the cash value of each individual account.

As at the end of 2012, 87.7% of Grupa LOTOS employees and 79.7% of the LOTOS Group employees were covered by the group insurance. Two companies are taking advantage of separate insurance. 81% of LOTOS Petrobaltic employees are included in the insurance, and 64.4% in LOTOS Paliwa.

The LOTOS Group has a transparent remuneration system in place, whose key components are base salary, annual bonus and quarterly incentive bonus. Base salary is determined on the basis of national payroll reports compiled by professional HR consultancies. Employees' base salary across the LOTOS Group has risen 5% since July 2012.

We make every effort to ensure that the remuneration paid is market-competitive and attractive to employees. For each position, a market median has been set as a target against which the remuneration should be benchmarked. If performance targets set by the Board (such as financial criteria defined in the budget) are met, employees are entitled to an annual bonus equal to 10% of their annual salary. The special awards granted by the CEO in recognition of outstanding effort and commitment are another component of the incentive system, and to reward long service and experience, length-of-service awards are granted to employees in keeping with the rules laid down in the Collective Bargaining Agreement. These awards are payable to all employees across the LOTOS Group.

The base salary of employees who decide to retire within two years prior to their acquisition of pension rights can be raised by 8.5%. Moreover, retiring employees are entitled to a one-off cash severance payment, whose amount depends on their length of service. This payment can range from an amount equal to an employee’s monthly pay when their length of service is up to 15 years, to 500% of the base amount if the employee has worked for 35 years, and is applicable to all employees across the LOTOS Group.

For the past 30 years, a Senior Employees and Pensioners Club has been operating in Grupa LOTOS, associating almost 600 former LOTOS Group employees. The Club's activities are financially supported by the Board of Grupa LOTOS. Twice a year, the Club organises various trips around Poland and to other regions of Europe, giving the pensioners an opportunity to visit new places and at the same time promoting a healthy lifestyle. These visits to Polish and European regions are also designed to promote the LOTOS brand. The Club's management organises home visits for sick pensioners and allowance holders, providing them with the necessary support when required. Every year, at Christmas, the Board of Grupa LOTOS also organises annual meetings with its pensioners.

Training and education

Our training policy is closely linked with the LOTOS Group’s strategy and corporate management strategy in the area of HR management. Our training activities are designed to raise the various competencies of our employees, identify talent across the organization, disseminate expert knowledge and foster increased involvement and job satisfaction. The LOTOS Group training policy is distinguished by long-term, consistently implemented development plans.

We provide adequate conditions for effective development and practical application of the knowledge and skill required of all employees throughout their employment. Goals and objectives defined in the short- and long-term development plans of the LOTOS Group are reflected in their personal development plans, agreed with the employees on an annual basis during their periodic evaluations.

All employees, irrespective of age or the time of their planned retirement, are offered the opportunity to attend training designed to help them acquire and enhance their knowledge and professional qualifications, and develop general skill sets. This is facilitated by our training and development procedures and internal training and development system. We also co-fund our employees' secondary and university-level graduate and post-graduate studies, training leave and paid leave from work for travel to external training facilities, their participation in qualification improvement programmes, co-financing of foreign language classes, and provision of support in the preparation of graduation theses etc.

In 2004, we established the LOTOS Academy, whose goal is to build a modern, efficient, competitive organization.

Our training and development programmes are supported by distinguished authorities, and members of the LOTOS Academy Scientific Council include such well-known figures as Prof. Jerzy Hausner, Prof. Witold Orłowski, Prof. Janusz Rachoń, Prof. Wojciech Rybowski, Prof. Edmund Wittbrodt, Dr. Mirosław Gronicki and Dr. Jan Szomburg.

The LOTOS Academy is a comprehensive employee development system, highly valued in the world of science and business. It's main feature is its accessibility, because the training it provides is available to all employees of the LOTOS Group. Moreover, employee development is carried out in a continuous and coherent manner, linked with the Periodic System of Employee Evaluations, career paths, development programmes for individual professional groups, and relevant succession plans. At the same time, our long-term programme is flexible, which allows us to respond to changes in the company's business environment and to new requirements for employees' qualifications.

In 2012, we introduced the following projects within the LOTOS Academy, under the banner "On the Road to Perfection":

The LOTOS Group Succession Programme

which guarantees the implementation of the our business strategy, ensuring the continuity of management processes in key positions, clearly defining promotion paths  and reducing the risk of choosing the wrong candidate for promotion.

The LOTOS Kolej Managers Academy Development Programme,

the main goal of which is to ensure the implementation of the Company's strategy by accelerating the development and training of key employees. The implementation of this programme will enable LOTOS Kolej to identify and make better use of the potential of its employees, increase their productivity and provide an incentive to develop the competences essential from the point of view their employer, to better prepare them for assuming key positions with the company and to meet their promotion needs.

The LOTOS Academy training schedule,

which facilitates the development of employees' individual competencies through participation in training sessions, courses and workshops that cover issues arising from analysis of the results of the periodic employee evaluations and our business development needs. LOTOS Group employees have participated in many training courses, including:

• Communication and cooperation of project teams,
• Interpersonal relationship techniques,
• Project management in the organization,
• Time management skills,
• Coping with stress, assertiveness and conflict resolution,
• Team building skills,
• Presentation and public speaking skills,
• Ethical principles in the LOTOS Group,
• IT training at various advancement levels.

The STL® Training Programme - Situational Team Leadership.

The model is known as the Team Productivity Process and is an approach to effective operational patterns for teams, reviewed and tested by a team of researchers from the Ken Blanchard Companies. Its main objective was to increase the productivity of work teams through development of the leadership competences of management staff.

Internal training projects - Knowledge sharing in the LOTOS Academy:

• Adaptation training; Senior colleagues share information regarding the organization itself, its processes and the processing technologies of crude oil and other products generated in the refinery.
• Basic training for production workers; Within the certification process of production knowledge, wherein our internal coaches share their knowledge of the techniques and technology necessary for working as an operator.
• Internal knowledge-sharing workshops; LOTOS Group training on issues related to various aspect of our operations.

In 2013 we will continue several of our development programmes, including:

• The LOTOS Group Succession Programme; aimed at developing successors to key positions in a number of ways, such as by identifying objectives and tasks which are carried out under the supervision of a Guardian/Coach, selection of ways and means for development within the allocated development voucher, and presentation of the results of the coaching.
• The LOTOS Kolej Managers Academy development programme; for the general development and management training of two participating groups, management and specialist. Within individual development paths, participants have an opportunity to complete their professional qualifications with university courses and improve their knowledge of foreign languages.
• Situational Team Leadership management staff training; a programme designed to increase the productivity of work teams by developing the leadership competences of the management staff.
• Seminars for management staff; these involve presentations of modern company and HR management tools and methods.
• The LOTOS Academy Training Schedule and knowledge-sharing within internal training projects. The themes covered during the training sessions are determined on the basis of analysis of the results of the periodic employee evaluations, employees' development plans in individual organizational cells, as well as corporate business development requirements.

Average annual number of training hours per person, by Grupa LOTOS employment category

Employment category	2010	2011	2012
Senior management	61.2	40.0	41.9
Lower management	60.3	38.0	42.8
Back-office staff	29.6	30.7	25.8
Production staff	12.6	13.2	17.7

Average annual number of training hours in Grupa LOTOS in 2012, by sex

Sex	Number of employees	Number of training hours	Average number of training hours
Women	417	11,096	26.6
Men	932	21,936	23.5

In LOTOS Group companies operating the Periodic Employee Evaluations System, on average 91.75%  of all employees were evaluated in 2012, regardless of their sex, which means 4,000 employees. The lowest evaluation ratios were noted in LOTOS Oil (80%) and LOTOS Asfalt (85%), which had undergone organizational changes the year before. Consequently, their employees had been working for less than six months at the time of evaluation, which is below the minimum for the Periodic Employee Evaluations System to be subject to evaluation or to evaluate employees. Across the LOTOS Group though, the majority of eligible employees were actually evaluated, resulting in a higher than expected percentage of evaluated employees. This confirms the universality of the process across the LOTOS Group, regardless of employee age or sex.

In 2012, the Periodic Employee Evaluation System covered employees of Grupa LOTOS and the following subsidiaries: LOTOS Paliwa, LOTOS Asfalt, LOTOS Oil, LOTOS Tank, LOTOS Kolej, LOTOS Ochrona, LOTOS Straż, LOTOS Lab, LOTOS Serwis and LOTOS Petrobaltic. In the remaining companies, employee evaluations will be introduced together with the SAP HCM system in 2014.

Occupational Safety and Health

In line with the LOTOS Group's business and CSR strategies, safety at work and employee health protection are our priorities, with respect to both our employees and the employees of our cooperating partners. Particular attention is paid to efforts aimed at maintaining high safety standards, minimising risks and reducing accident rates. Our primary safety rule states that no work is important or urgent enough to disregard safety. A consistent and strategic approach to safety has helped Grupa LOTOS earn the reputation of an employer with a safe, well-equipped and well-organised workplace.

Ensuring a safe working environment is one of the cornerstones of our corporate culture, as reflected in the Code of Ethics we implemented in 2013.

The LOTOS Group spares no effort to ensure that:

• Workplaces are properly organised,
• Environmental surveys are performed on an ongoing basis,
• The best possible precautions are applied as regards technical processes and people’s health,
• The threat identification and man-machine-environment risk assessment system is enhanced on an ongoing basis,
• Performing consulting, oversight and inspection tasks,
• Hands-on training sessions and workshops are held to advance our employees' professional skills,
• Cooperation is maintained with governmental authorities, national organisations, and research and academic institutions,
• We exchange experience with our partners from chemical industry plants in Poland,
• Employee awareness and commitment are raised to achieve a culture of safe work.

Placing a heavy emphasis on our employees’ involvement in building a strong occupational safety culture at all levels of the organization is a multi-year process that determines the direction of our tasks for years to come. Workplace safety awareness is raised by:

• Training and other development initiatives,
• Education on OSH-related matters, fire safety and health protection,
• Encouraging staff’s involvement in developing and implementing the corporate OSH policy,
• Organisation of awareness campaigns and attractive knowledge testing competitions.

We place equally strong emphasis on the safety of external contractors' employees performing services at LOTOS Group facilities, as well as visitors.

Our agreements with contractors contain clauses which require that they respect the applicable regulations and occupational safety rules, as well as the fire protection and physical safety requirements and standards at our sites. In this way, the contractors' undertaking to protect the rights of their employees becomes a prerequisite condition to be satisfied in the performance of the agreement. Such clauses are a part of all agreements executed by Grupa LOTOS with contractors performing work at the refinery.

In addition, during regular OSH inspections and audits we check whether the OSH regulations are being adhered to by the contractors, and thus whether human rights are being observed in relations between employees, employers and the LOTOS Group. Inspection activities are an essential part of risk management, identification and monitoring, and the on-site inspections also have a bearing on our further cooperation with that contractor. This is also reflected in the annual assessment of contractors, where safety at work, protection of health, and respect for human rights are some of the key criteria.

Through close cooperation with our contractors and numerous other initiatives, the LOTOS Group contributes, directly and indirectly, to the raising of work safety standards for our contractors and their sub-contractors. Thanks to the strict requirement to comply with national OSH regulations and internal standards at our facilities:

• Contractors, obliged to meet work safety standards beyond the mandatory, are more likely to fulfil applicable legal requirements,
• Contractors have to apply the necessary group and individual protective measures, which includes providing their employees with personal protective equipment, such as workwear appropriate to the identified hazards,
• Contractors cooperate with their subcontractors, for whom they are as responsible at LOTOS Group sites as they are for their own employees,
• Internal OSH training, the sharing of work safety standards with contractors and discussions held during LOTOS Group OSH inspections result in heightened awareness of and improved ability to correctly identify threats and employ safe, appropriate working methods.

After their work with the LOTOS Group has been concluded, many of our contractors’ employees demonstrate increased awareness and commitment, are more considerate and alert to potential hazards at work, and take more care to ensure workplace safety. This transfer of requirements and expertise results in lower accident rates, which means measurable financial benefits for the contractors, such as lower social security contributions or a reduction in the cost of post-accident compensation paid to employees.

A challenge we intend to meet in the coming years is raising awareness of how important it is to demonstrate personal commitment to compliance with adopted OSH standards, in particular in the case of the middle management's interactions with subordinate employees, who watch their behaviour. Increasing the commitment of the management staff and other employees is a priority, as this is one of the key determinants of the accident rate in each company.

One of the objectives of the CSR strategy is to help promote best OSH practices currently applied by Grupa LOTOS at other LOTOS Group companies and the LOTOS and LOTOS Optima service station chains. Promoting certain behaviour patterns and creating the proper attitude among the employees of our contractors will be a part of the process.

The OSH teams at the LOTOS Group companies work closely together to implement the goals and targets of the CSR strategy that are oriented towards improving safety at work, adopting uniform standards across the LOTOS Group and sharing expertise and experience.

A number of initiatives were undertaken in 2012 in pursuit of the key objective of our CSR strategy in the area of occupational safety and health improvement. These included:

• Introduction of a system of quarterly OSH goals the LOTOS Group companies;
• Cross-checking of workplace safety standards;
• Introduction of a new way of reporting hazards with the ‘Report hazards to LOTOS Group employees’ banner on our Intranet pages. Hazard reporting is highly valuable, as the greater the number of identified threats, the greater the chances of their elimination, which means a lower likelihood of workplace accidents;
• Definition of corporate OSH and fire safety standards specifically for contractors;
• Celebration of another Occupational Safety and Health Day;
• Implementation of the Working Conditions Improvement Plan 2012 for Grupa LOTOS;
• Drafting of educational materials concerning accidents at work and proper oversight of OSH documentation, which is particularly important in employee management;
• Training sessions and workshops for Grupa LOTOS management, designed to remind them of their OSH responsibilities and duties,
• Knowledge testing competitions relating to workplace safety and promotion of health, as well as proper oversight of OSH documentation, which is particularly important in employee management;
• In addition, The Safest Production Plant of the Grupa LOTOS and The Safest Company of the LOTOS Group were singled out.

In 2012, there was a slight increase in the number of accidents at work and the Lost Time Injury Frequency (LTIF) at the LOTOS Group, relative to 2011.

Grupa LOTOS	2010	2011	2012
Number of employees	1,315	1,318	1,323
Accidents at work, including:	9	5	13 1/
Women 2/	-	-	2
Men 2/	-	-	11
Post-accident absenteeism (calendar days) 3/, including:	287	168	253
Women 2/			28
Men 2/			225
Occupational diseases	None	None	None
Lost Time Injury Frequency (LTIF) 4/ (per 1 million hours worked)	3.4	2.1	4.3
Lost Day Incident Rate (LDR) 5/ (per 200,000 hours worked)	0.7	0.42	0.9
LOTOS Group 6/	2010	2011	2012
Number of employees 7/	4,946	5,004	4,795
Accidents at work, including:	56	31	34 8/
Women 2/	-	-	5
Men 2/	-	-	29
Post-accident absenteeism (calendar days) 3/, including:	2,502	1,558	1,651 9/
Women 2/	-	-	196
Men 2/	-	-	1,455
Occupational diseases	None	None	None
Lost Time Injury Frequency (LTIF) 4/ (per 1 million hours worked)	5.9	3.3	3.3
Lost Day Incident Rate (LDR) 5/ (per 200,000 hours worked)	1.2	0.7	0.7

Last year, three business partners of Grupa LOTOS were invilved in accidents. There were no fatal accidents in 2012.

The LOTOS Group classifies accidents at work in accordance with Polish legislation. In addition, Grupa LOTOS also records and keeps statistics on incidents according to the European scale, i.e. dangerous occurrences (including dangerous states and incidents with potential to cause an injury), accidents resulting in an incapacity for work lasting more than one day (LTI – Lost Time Injury), based on which the LTIF (Lost Time Injury Frequency) rate is computed, and incidents requiring first-aid treatment. LOTOS Group companies follow the guidelines contained in the ILO’s (International Labour Organisation) Code of Practice on Recording and notification of occupational accidents and diseases.

The most frequent accident-related injuries in the LOTOS Group are injuries to upper and lower limbs. The largest number of accidents occur while walking or operating machinery and equipment. Employees involved in accidents report them promptly in order to eliminate similar occurrences in the future.

Absenteeism in Grupa LOTOS*

Description	Blue-collar jobs	White-collar jobs	Total
2012
total absenteeism	39.52	49.57	45.62
including: illness	9.2	9.57	9.42
2011
total absenteeism	36.45	47.17	43
including: illness	8.99	8.27	8.55
2010
total absenteeism	34.91	46.89	42.26
including: illness	8.79	8.25	8.46

^{* number of absent days/number of employees}

Employee consultations

Grupa LOTOS has a Health and Safety Committee, which serves as an advisory body to the employer. In accordance with the provisions of employment law it comprises representatives of employers and employees selected by the trade union operating in the company, as well as the occupational physician. At least once every quarter the Committee reviews working conditions, evaluates the status of occupational safety and advises on occupational diseases and the measures taken by the employer to prevent accidents at work. The Committee’s decisions are often reflected in our plans for improvement of working conditions.

In 2012, the Committee investigated the following areas:

• Design and construction of a new changing room for employees of some of the production facilities,
• Evaluation of planned OSH training procedures,
• Assessment of the suitability of Grupa LOTOS employees' workwear and footwear, as well as advising on the choice of personal protection measures,

The Health and Safety Committee operates from the employer's regulations, and according to which employee representatives – based on a separate procedure – participate in consultations on all the employer's undertakings in occupational safety.

In 2012, Social Labour Inspectors were elected in Grupa LOTOS.

In the documents on the implementation of the principle of freedom of collective bargaining in Grupa LOTOS, the health and safety provisions are included in the Collective Bargaining Agreement. Chapter V  contains the employer's declarations, confirming that the issues of occupational safety are of particular interest and concern to the Board of Grupa LOTOSDue to the mandatory nature of OSH provisions and specific risks related to the company's business activity, no negotiations can be entered into nor other agreements concluded in this respect.

The employer, following its duties listed in Section 10 of Polish Labour Law and other regulations, makes every effort, as far as possible, to ensure that the employees and their representatives participate in this area of the Company's activity. Consultations are held on all OSH measures also governed by the internal regulation changes of 2012. The key here is that these consultation procedures are treated separately from the work of the Health and Safety Committee. Consultations in this area are held at Grupa LOTOS twice a month, on average. Participating employee representatives are informed of their subject in advance; similarly they are given all reference materials well ahead of schedule. The 2012 changes to the regulation emphasise the right of all employees to approach the consultation team.

The second information and consultation channel operating at the Company is the Employee Council, which consists of seven members, elected for four-year terms, ending in 2014. Every month, the Council meets the employer's representatives, including the Grupa LOTOS Board, for discussion of issues crucial to the workforce. Because the members of the Council belong to the trade unions which are multi-employer organisations and involving most of the employers that comprise the LOTOS Group, the discussions held and information disseminated through these meetings are of a much broader character than just local Company operations.

Seven companies belonging to the LOTOS Group have Employee Committees, and each company with a headcount over 250 has set up its own Health and Safety Committee to facilitate employee participation in the area of occupational safety.

Preventive measures

One of the essential elements of safety at work is a responsible employee, fully aware of the possible dangers. Therefore, we place great emphasis on preventive and informative measures, providing our employees with education, training and preventive programmes whose purpose is to minimise the effects of ill health among company employees.

All employees, regardless of their position or duties, participate in regular training sessions involving practical fire extinguishing exercises with the use of fire extinguishing equipment, and also in practising their first aid skills. In 2012, training in first aid for children was organised on a voluntary basis. There were also specialised courses on the principles of proper use of the AED defibrillators found in the Company's Gdańsk facility, and for the employees of the fuel terminals. AED training is held on the basis of training and practical instructions within the periodic training organised for the LOTOS Group employees.

Every year training sessions are also organised at the production installations for First Aid Rescue Team workers. Thanks to these regular practical exercises, employees can effectively help their colleagues in emergencies. Additionally, there are also regular exercises at Grupa LOTOS on the correct responses to emergencies and evacuation of danger areas.

In 2012, we organised the third Occupational Safety and Health at Work Day in Gdańsk, which featured cardiac screenings for employees. With specialist equipment on hand, we managed to test over 120 employees for circulatory system diseases, each of whom also had the opportunity to consult a doctor.

In 2012, all LOTOS Group employees were actively involved in monthly health and safety at work events, within the Occupational Safety and Health Promotion Schedule. Each month was dedicated to preventive actions based on a different theme, with additional presentation of health innovations, theme-based competitions and consultations with various specialists. The Schedule was realised simultaneously with other actions organised by the World Health Organisation (WHO), the United Nations (UN) and others, taking into account the requirements resulting from daily meetings with the company's employees.

Thanks to the support of Europacolon Polska, we also made available a book entitled A Zosia ma raka na smyczy (And Zosia's Cancer is on a Tight Leash), which presents issues related to the colon cancer, to all the LOTOS Group employees who expressed an interest. The book is designed for children aged five and over who are dealing with the illness of a loved one or who may come into contact with a colon cancer patient.

We systematically run educational promotions on cancer, diabetes, healthy lifestyles, first aid, physical activity, ergonomics in the office, organisation of the workplace, the safe use of chemicals and noise protection at work. With this purpose in mind, we have also published a number of brochures dedicated to the prevention of cancer, heart diseases, proper exercise and healthy eating.

Because managers in charge of other staff need to follow the current and binding legal regulations, in 2012 we conducted training for Grupa LOTOS management on OSH requirements pertaining to the internal regulations of the enterprise. The topics covered included the extent of tasks and duties in the OSH context, health protection (including proper supervision of OSH documentation), and good ergonomics in the workplace. We also organised another training cycle on involvement and responsibility in the area of health and safety, addressed specifically to management staff.

In taking every care of the health of our employees, the LOTOS Group provides them with access to a wide range of medical services. We work with a number of surgeries and clinics, and every employee holding a ‘Patient Card’ can take advantage of medical services available throughout the country. This additional medical cover is offered on a voluntary basis, but most of our employees choose to participate in the ‘Patient Card’ programme.

Another, equally important health-related issue is the provision of proper working conditions that that have minimal adverse effect on human health. To this end, we hold periodic inspections of permissible noise levels, light intensity and concentration of harmful chemical substances etc., to ensure that they meet the required standards. Some of the companies also undertake activities specific to their business profile.

In 2012, LOTOS Petrobaltic organised holidays for its employees at the sanatoria of various popular health resorts, such as Polanica Zdrój and Połczyn Zdrój, within the social fund. The company then covered the costs of the sanatorium treatment. These healthy holidays were also available to the employees' families at special reduced rates. Then, as a result of waning interest in this type of holiday, our cooperation with the sanatoria was terminated at the end of 2012 at the request of the workers’ trade unions, and the funds were allocated to increase co-financing of other forms of holidays. From 2010 to 2012, 72 LOTOS Petrobaltic employees and pensioners took advantage of sanatorium treatment.

Among the LOTOS Group's short-term OSH plans are:

• Preparation and supervision of renovation works called Spring 2013 in OSH and fire-prevention areas;,
• Pilot introduction of the Lockout-Tagout safety system, while certain works are carried out in the area of active production units,
• Implementation of a revised work permit system with the use of IT tools,
• Organisation of another Occupational Safety and Health at Work Day,
• Implementation of a system for self-control of work stations,
• Introduction of an electronic tool monitoring work safety systems across the LOTOS Group,
• Modification of the exercises for improved response to accidents at work, announcement of chemical alarms, evacuation of buildings, drilling on possible emergency scenarios and administering first aid.

Long-term plans:

• Introduction of additional e-learning to increase the involvement of employees in occupational safety and health.
• Establishment of uniform safety standards across the LOTOS Group;
• Fostering occupational safety culture, based on the involvement of management and lower level employees, also involving subcontractors.
• Achieving the best production standards in the oil refining industry, through the implementation of measures designed to maintain the downward trend in LTIF.

Diversity and equal opportunities

The Code of Best Practice for WSE Listed Companies includes the recommendation that public companies ensure a balanced proportion of men and women on their management board and in supervisory functions in their companies, thus reinforcing the creativity and innovation of their business. As a listed company, Grupa LOTOS shares the belief that employment diversity can increase a company’s competitiveness and strengthen its development prospects. However, sex-based differentiation cannot always be a key factor in HR decision-making, especially in the sector occupied by the Company. In operating a refinery, and due to the nature of its activities, many of the Company’s employees are engineers and specialists in hydrocarbon production and processing. In Poland, as well as in other parts of the world, this segment is dominated by men, which fact is also confirmed by the prevalence of men among engineering students. This tendency is reflected in the Company’s employment structure too. Women, on the other hand, work in larger numbers in the back-office, whereas there are fewer employed in production and technology, despite the equal opportunity policy applied by the Company in its recruitment process.

While we make every effort to provide our employees with attractive salary packages, we also have to consider the specific nature of our job market and internal business conditions. In 2012, the ratio of minimum base salary paid to women and to men was 120% to the men's advantage, which is at least a better result than 2011, when the figure was 125%. 

• HR policy→
• Composition of the Board →
• Composition of the Supervisory Board →

Composition of Grupa LOTOS workforce, by sex and age
(as of December 31st 2012)

Employment category	Number of employees	Percentage of total employees	Percentage of total employees in the age category	Number /women/	Percentage of total women	Percent-age of total women in the age category	Number /men/	Percent-age of total men	Percentage of total men in the age category
Employees aged up to 30
Board	0	0	0	0	0	0	0	0	0
Senior management	0	0	0	0	0	0	0	0	0
Lower management	0	0	0	0	0	0	0	0	0
Back-office staff	68	5.04	39.08	44	10.55	100.00	24	2.58	18.46
Production staff	106	7.86	60.92	0	0.00	0.00	106	11.37	81.54
	174	12.90	100.00	44	10.55	100.00	130	13.95	100.00
Employees aged 30-50
Board	2	0.15	0.25	0	0.00	0.00	2	0.21	0.38
Senior management	27	2.00	3.41	4	0.96	1.54	23	2.47	4.32
Lower management	78	5.78	9.85	31	7.43	11.97	47	5.04	8.82
Back-office staff	385	28.54	48.61	224	53.72	86.49	161	17.27	30.21
Production staff	300	22.24	37.88	0	0.00	0.00	300	32.19	56.29
	792	58.71	100.00	259	62.11	100.00	533	57.19	100.00
Employees aged up to 50
Board	3	0.22	0.78	0	0.00	0.00	3	0.32	1.12
Senior management	15	1.11	3.92	3	0.72	2.63	12	1.29	4.46
Lower management	46	3.41	12.01	11	2.64	9.65	35	3.76	13.01
Back-office staff	175	12.90	45.43	99	23.74	86.84	76	8.15	28.25
Production staff	144	10.75	37.86	1	0.24	0.88	143	15.34	53.16
	383	28.39	100.00	114	27.34	100.00	269	28.86	100.00
	1,349	100.00	-	417	100.00	-	932	100.00	-

Base pay at Grupa LOTOS, by sex, as of December 31st 2012

Position	Women			Men			Ratio of men’s base salary to women’s base salary	Ratio of men's average pay to women's average pay
	Number of employees	Lowest monthly base salary	Average pay /actual pay/	Number of employees	Lowest monthly base salary	Average pay /actual pay/
Board	0	-	-	5	20,728	29,287	-	-
Senior management	7	17,000	29,116	35	13,717	28,310	81%	97%
Lower management	42	6,036	12,260	82	7,350	15,856	122%	129%
Back-office staff	367	2,500	6,507	261	3,300	9,729	132%	150%
Production staff	1	4,009	4,535	549	3,000	7,943	75%	175%
Total:	417	2,500	7,499	932	3,000	9,936	120%	132%