2005

ANNUAL REPORT

ROKITA

I N T E R A C T I V E D O C U M E N T

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C O N T E N T S

1

L E T T E R O F T H E C H A I R M A N O F T H E M A N A G E M E N T B O A R D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

C O M PA N Y ’ S G O V E R N I N G B O D I E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

O W N E R S H I P S T R U C T U R E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Y E A R I N A N U T S H E L L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

F I N A N C I A L R E S U L T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

T R A D E O F F E R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

P R O D U C T I O N A N D S A L E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 0

D E V E L O P M E N T S T R A T E G Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2

M A J O R I N V E S T M E N T C O M P L E T E D . . . . . . . . . . . . . . . . . . . . . . . . . 1 3

M A J O R I N V E S T M E N T P L A N N E D . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4

S P E C I A L E C O N O M I C Z O N E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5

E N V I R O N M E N T P R O T E C T I O N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6

F I N A N C I A L S T A T E M E N T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 9

P C C R O K I T A C A P I T A L G R O U P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2

P C C R O K I T A G R O U P I N F I G U R E S . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3

E N E R G E T Y K A - R O K I T A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 4

K O S M E T - R O K I T A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 5

R O K I T A - A G R O . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 6

R E M A I N I N G C O M PA N I E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 7

PCC Rokita in Figures [PLN thousand]

2001 2002 2003 2004 2005

Sales 466 393 406 540 464 762 619 185 620 530

Gross Profit 15 329 705 12 143 16 561 34 016

Profit (loss) on Sales 16 028 - 656 9 653 11 510 33 937

Gross Profit (loss) on Sales 66 137 46 925 59 789 65 185 93 156

ROA [%] 3,85 0,78 3,09 3,71 7,03

ROE [%] 6,48 1,30 4,71 5,94 11,62

Equity 190 726 191 967 199 305 211 891 241 416

Total Assets 321 009 317 567 304 118 338 982 398 797

Capital Expenditures 10 080 13 552 14 547 22 701 70 464

Employment [persons] 954 872 836 783 712

G O V E R N I N G B O D I E S

O R G A N I Z A T I O N A L S T R U C T U R E

M A N A G E M E N T B O A R D

Miros∏aw KrutinChairman and CEO

Jaros∏aw MazurMember of the Management Board, Financial Director

Wies∏aw KlimkowskiMember of the Management Board, Director of Investor Supervision and GroupDevelopment

S U P E R V I S O R Y B O A R D

Piotr Jan Maciejewski Chairman of the Supervisory Board

Marzena AmbroziakDeputy Chairman of the Supervisory Board

Mariusz Dopiera∏aSecretary of the Supervisory Board

Alfred PelzerMember of the Supervisory Board

Ryszard K∏eczek Member of the Supervisory Board

Dariusz KrupaMember of the Supervisory Board

2

C H A I R M A N ’ S L E T T E R

Ladies and Gentlemen,

In 2005 Rokita changed it’s name to PCC Rokitato underline our membership of the PCC Group.

PCC Rokita Group earned almost PLN 43 millionin 2005 with PCC Rokita earning a gross profitof PLN 34 million. This means that, compared to2004, Group and Company profit doubled.These record results were achieved by a strongdemand for polyols, chlorine and alkalissupported by increased and stable productionwhich counteracted increases in raw materialprices.

In 2005 PLN 70 million was spent on invest-ments and modernisation. Among other proj-ects, construction of a new polyols plant wascompleted as one of our most important invest-ment projects. Other projects were aimed atincreased production of flame retardants,improved efficiency of the electrolysis plant aswell as new storage facilities for propyleneoxide, ethylene oxide, phosphorus trichloride,phosphorus oxychloride. Another major projectwas to modernise the water treatment plant.

We were also successful in including the area ofthe plant within the Wa∏brzych SpecialEconomic Zone. This now allows us to get pref-erential Company Tax status and proves that thedynamic development of PCC Rokita and itsambitious investment plans have been noticedand appreciated outside the company. Obviously,this will be a strong motivation for further devel-opment.

I now invite you to read the report.

Miros∏aw Krutin

Chairman and CEO

3

Management Board

Speciality ChemicalsBusiness Unit

Chlorine Business Unit

Chlorine

Soda lye

Caustic soda

Chlorobeznenes

Polyols for flexible foam

Polyols for rigid foam

Other polyols

Surfactants

Plasticizers and flame retardants

Construction chemicals

Polyols Business Unit

O W N E R S H I P S T R U C T U R E

5

Business activities of PCC AG are based on three divisions:

• energy, chemical, coal and coke raw material trading

• chemical production

• logistics and transportation

The Group, headquartered in Duisburg, Germany,was set up in 1993 and has operating units orrepresentative offices in over 10 Europeancountries plus China and the USA.

A key principle of the PCC Group is to allow theindividual companies to operate in an inde-pendent and entrepreneurial manner whilstproviding the necessary operational and organ-isational support. This allows companies to„grow the business“ and build synergies wher-ever it makes sense. This is especially relevant inthe key areas of production, logistics, energyand common sales development.

As much centralized control as necessary, as much entrepreneurial freedom as possible.

Waldemar Preussner, Chairman of PCC AG

4

AG

AG

T R A D E

• PCC GmbH, D, Duisburg

• PCC Energie GmbH, D, Duisburg

• C&C GmbH, D, Duisburg (60%)

• PCC OY, FN, Helsinki

• PCC S.A., PL, Gliwice

• PCC Energy S.A., PL, Chorzów

• MORAVA-CHEM spol. s.r.o.,CZ, Cieszyn

• PCC Capital GmbH, D, Duisburg

P R O D U C T I O N

• Synteza S.A.,PL, K´dzierzyn-Koêle

• Weglopochodne Sp. z o.o.,PL, K´dzierzyn-Koêle

• PCC Rokita S.A., PL, Brzeg Dolny (89,99%)

• Kosmet-Rokita Sp. z o.o.,PL, Brzeg Dolny

• Rokita Agro S.A.,PL, Brzeg Dolny (88,66%)

• Energetyka Rokita Sp. z o.o., PL, Brzeg Dolny

• PCC Chemax Inc.,USA, Piedmont S.C.

L O G I S T I C S

• PCC Cargo GmbH, D, Duisburg

• PCC Cargo S.A., PL, Chorzów

• PCC Spedkol Sp. z o.o.,PL, K´dzierzyn-Koêle

• PCC Rail Morawa spol. s.r.o., CZ, Cieszyn

• PCC Rail Containers Sp. z o.o., PL, Jaworzno

• PCC Rail Szczakowa S.A.,PL, Jaworzno (97,55%)

• PCC Rail Coaltran Sp. z o.o., PL, Warsaw

• Euro-Line GmbH, D, Duisburg (50%)

• PCC Kolchem Sp. z o.o.,PL, Brzeg Dolny

• PCC Autochem Sp. z o.o., PL, Brzeg Dolny

O W N E R S H I P S T R U C T U R E

Remaining

10%

P C C A G90%

* Only material companies and participations. Shareholdings 100 percent unless stated otherwise.

PCC in Figures [EUR million]

2001 2002 2003 2004 2005

Sales 390,9 354,0 486,5 684,3 817,0

Gross (margin) 37,9 10,3 68,3 87,1 104,3

EBT 17,8 -10,1 11,6 17,5 10,3

ROCE [%] 83,6 -26,2 25,7 18,0 10,5

ROE [%] 87,6 -100,3 38,1 22,0 6,4

Group equity 15,5 5,3 42,0 74,3 93,8

Investments 1,7 12,5 40,3 44,8 49,6

Employment [persons] 650 650 2602 2771 2632

F I N A N C I A L R E S U L T S

In 2005 the situation of the Company was verygood with significantly improved results andfinancial ratios. The Company generated a grossprofit of PLN 34 million on gross sales of PLN620,5 million giving a gross margin of 5,5%.Looking at comparable figures for 2004, salesincreased by 15% and gross profit by over130%.

This improvement was bought about mainly bythe following:

• Very strong demand for chloroalkali products (soda lye, caustic soda, chlorine)

• Constant high demand for polyols

• Improved sales of phosphorus derivatives

• Optimisation of production processes

In 2005, the company started a major investmentplan which is reflected in the balance sheet:

• Assets increased by over 17.6% comparedto 2004 (4% increase in current assets / 27% increase in fixed assets)

• Increase in total company liabilities by 24% compared to the end of 2004

Due to the significant increase in investments,credits and loans increased by PLN 10 millioncompared to 2004 and in May 2005, the Companyissued short-term bonds for a total value of PLN30 million.

7

2 0 0 5 I N A N U T S H E L L

PCC Rokita’s new name underlining membershipof the international PCC Group.

Completed investment projects:

• Additional Polyether production line

• Increasing flame retardant production • Increased storage facilities for propylene

and ethylene oxide• Development of storage facilities for

phosphorus, phosphorus trichloride and phosphorus oxychloride

• Modernisation phase 1 of the waste-water treatment plant

Including the PCC Rokita site within theWa∏brzych Special Economic Zone.

Signature of a long-term contract with PKNORLEN for ethylene oxide delivery, which isstrategically the most important raw materialused in PCC Rokita.

Purchase of a modern fire-fighting and rescuevehicle significantly strengthening the opera-tional scope of the Internal Rescue Team.

Further improvement in the visual appearanceof the site by the clean-up and demolition ofover 130 buildings which are no longer used.

Co-financing from the European Social Fund foremployee training packages.

Research and development:

• completion of laboratory work on new technologies for production of polyethersfor soft and hyper soft foams and continuation of laboratory work on polyethers for HR foams

• Development of production technology for a new flame retardant (Roflam F)

• Development of production technology for a new range of isopropylphenol based plasticizers

• Development of production technology for a range of new surfactants (Rokanol NL8P4, Rokanol NL8 and Rokanol NL6)

62002

0

100

200

300

400

500

600

700

800

900

2003 2004 2005

Sales in years 2002-2005 [PLN million]

PCC Rokita PCC Rokita Group

20020

5

10

15

20

25

30

35

40

45

2003 2004 2005

Gross profit in years 2002-2005 [PLN million]

PCC Rokita PCC Rokita Group

9

T R A D E O F F E R

PCC Rokita is one of the leading chemicalcompanies in Poland and the largest in theDolny Âlàsk region (Lower Silesia). The Compa-ny manufactures and sells over 400 chemicals,mainly on foreign markets. Main groups ofproducts are polyols (additives forpolyurethanes), surface active agents (forhousehold chemistry and cosmetic industry),organic phosphorus compounds (plasticizersand flame retardants for plastics) as well aschlorine and alkalis.

Main products - Polyols Business Unit

P O L Y O L S

Polyols for flexible foam Raw material for production of flexible foam used mainly in the furniture industry (mattresses, foam cushions) and in the production of foam films, self-adhesive laminates, acoustic insulation and filtration elements.

Polyols for rigid foam Raw material for production of rigid foam used for strengthening and filling various constructions (e.g. glue objects, door and window frames) or as component of heat and acoustic insulation.

Other polyols Used in production of adhesives, varnishes, polyutherane elastomers, as sealing oils and greasing agent for compressors and in production of hydraulic fluids.

Main products - Chlorine Business Unit

C H L O R I N E , C H L O R I N E D E R I V A T I V E S , A L K A L I S

Liquid chlorine Used in the chemical industry for chlorination and synthesis; in the cellulose and paper making industry as a whitening agent.

Soda lye Widely used in the chemical, paper-production, household chemicals and textile industries.

Caustic soda Raw material used in many industries, as an agent for degreasing in the metal industry; for washing bottles and equipment in the food industry.

Chlorobenzenes Raw materials for chemical synthesis, as pesticides and solvents.

Main products - Specialty Chemicals Business Unit

S U R F A C T A N T S

Non-ionic Based on nonylphenol, alcohols and fatty acids - used in production of various types of washing and cleaning liquids and other special agents.

Anionic Based on alkylbenzene and etoxylated fatty alcohols - used in production of washing powders, fluid detergent, liquid soap and shampoo.

Other product groups

Plasticizers and flame retardants Phosphorus derivatives plasticizers and flame retardants for plastics.

Construction chemicals Plasticizers, fluxing, aeration improving and concrete binding delaying agents.8

T R A D E O F F E R

P R O D U C T I O N A N D S A L E S

In 2005, the Chlorine Business Unit increasedsales by PLN 30 million as a result of a very highdemand for electrolysis products (chlorine, sodalye, caustic soda).

Sales of the Specialty Chemicals Business Unitincreased by PLN 13 million. This was mainly asa result of increased sales of phosphorus deriv-atives, while at the same time, sales of surfac-tants remained unchanged.

High demand and price increases enabled thePolyols Business Unit to grow by PLN 24 million.An additional PLN 20 million sales growth camefrom reseller activities. These activities will nolonger be necessary when the additional pro-duction capacity released in the new Polyolsproduction line goes live in the first quarter of2006.

In 2005 exports sales amounted to PLN 250 million which is 40% of thetotal company turnover. Compared to 2004 exports increased by 42%.

Main exported products of PCC Rokita are: caustic soda, polyols, flameretardants, chlorobenzenes and lye soda.

PCC Rokita sells its products on all continents, however, the mostimportant export destination is Europe (specifically Germany).

1 1

P R O D U C T I O N A N D S A L E S

E X P O R TAs a result of capital investments and produc-tion optimisation, in 2005 production increasedby over 8% compared to the previous year.

Most important groups of products are: polyols, surface active agents and alkalis.They amount to almost 75% of the total sales.

1 0

2002150 000

170 000

190 000

210 000

230 000

250 000

270 000

2003 2004 2005

Production [tons]

Sales by groups of products

Polyols

Surfactants

Alkalis

Chlorine

Monochlorobenzene

Flame retardants and Plasticizers

Other products and services

Main target export market

Germany43%

CzechRepublic9%

Italy4%

Others44,4%

ChlorineBusiness

Unit

Polyols Business

Unit

Specialty Chemicals

Business Unit

Other sales0

50 000

100 000

150 000

200 000

250 000 2002

Sales by production and trade business units in years 2002-2005 [PLN thousand]

2003

2004

2005

0

20 000

40 000

60 000

80 000

100 000

120 0002002

Exports by production and trade business units in years 2002-2005 [PLN thousand]

2003

2004

2005

ChlorineBusiness

Unit

Polyols Business

Unit

Specialty Chemicals

Business Unit

39%9%

9%

5%

17%

18%

4%

D E V E L O P M E N T S T R A T E G Y

M A J O R I N V E S T M E N T S C O M P L E T E D

Polyols - third production line

This most significant 2005 investment is aimedat increasing production of Polyols (raw materi-als for production of polyurethane foam used inthe furniture industry). Original capacity wasinsufficient to meet a high and sustained marketdemand. As a result, the decision was taken todouble existing production capacity. Construc-tion of a new Polyols plant with a capacity of30,000 tons/year ended in April 2006.

Increase of flame retardants production

An enhanced range of phosphorus derivatives isamong the most promising new groups of prod-ucts made by PCC Rokita. These are mainlyflame retardants and plasticizers (plastics addi-tives) and sales of these products are constant-ly increasing mainly on the EU, Asian and theUS markets. Over the last few years PCC Rokitahas taken significant steps to develop this rangeof products through a project aimed at increas-ing production capacity of phosphorus flameretardants (by 60%) was completed. A newinvestment aimed at increasing the productioncapacity by a further 65% is currently underimplementation.

Development of propylene and ethyleneoxide storage facilities

Storage facilities for propylene oxide weretripled and for ethylene oxide were doubled dueto increased demand for raw materials causedby the development of the new polyols plant.The investment also included construction of anoxides absorption installation in order to reducesignificantly atmospheric emissions.

Development of storage facilities for phosphorus, PCl3, POCl3

The development of the flame retardants plantand increased demand for raw materials, result-ed in the need to increase storage capacity forphosphorous by 150 tons and for phosphorustrichloride and phosphorus oxychloride by 250tons. At the same time two independent gasabsorption units were installed as well as areserve system resulting in further significantreductions in atmospheric emissions.

Modernisation of the waste-water treatment plant

This investment was aimed at modernising thewaste-water treatment facilities in line withEuropean Union Requirements. A secondaryreason was to reduce waste water emissionsinto the river Odra. Construction work was com-pleted on the first phase of this multi-phasedproject and modernisation of the biologicaltreatment process was commenced.

1 3

D E V E L O P M E N T S T R A T E G Y

The company’s development strategy is based on many investments in new technologies. Thisis aimed at increasing production of products with significant growth potential, developing newgenerations of the existing product range and at improving product range quality parameters.

Investment plans 2005-2010 - Key investments:

• New sulfonation plant [30,000 tons/year]• New polyols plant - third production line [30,000 tons/year]• Increase in production capacity of flame retardants plant [increase by 65%]• New polyols plant - additional production lines [60,000 tons/year]• New etoxylates plant [20,000 ÷ 40,000 tons/year]• New polimeric polyols installation [15,000 tons/year]• Pilot installations for flame retardants and plasticizers of a new generation• New isopropylophenol plant [7,000 tons/year]• New flame retardants and plasticizers plant [20,000 tons/year]• Modernisation of the propylene oxide plant • Development of raw material and finished product storage facilities• Modernisation of the waste-water treatment plant • New electrolysis facilities [120,000 tons/year]

Over the next 3 years PCC Rokita plans to investa total of over PLN 280 million.

1 22004

0

20

40

60

80

100

120

140

160

180

2006 2007

Capital expenditure levels in 2004-2007 [PLN million]

2005

S P E C I A L E C O N O M I C Z O N E

PCC Rokita conducts its business activities in the Brzeg Dolny Subzone of the Wa∏brzych Special Economic Zone allowing preferential Company Tax status.

Important events

August 2005 The Government of Poland resolved to set up the Brzeg Dolny Subzone as a part of the Wa∏brzych Special Economic Zone.

November 2005 PCC Rokita obtained a permit for conducting business activities in the Brzeg Dolny Subzone and undertook to invest a minimum of EUR 40 million

January 2006 PCC Rokita officially started its activities as part of the Special Economic Zone

Advantages

The company is able to reduce it’s Corporation Tax by 50% of the amount it invests physically within the boundaries of the Special Economic Zone.

1 5

D E V E L O P M E N T S T R A T E G Y

M A J O R I N V E S T M E N T S P L A N N E D

Surfactants

Surfactants, basic products used for householdcleaning materials and cosmetics, are a majorstrategic development area for PCC Rokita. Abig development of this product group willrequire much more production capacity and, asa result, plans are in place to construct a newsulphonation plant. This will increase produc-tion capacity of anionic surfactants from 10,000to 40,000 tons/year. Connected to this is plantwill be a new non-ionic surfactants plant (non-ionic surfactants - etoxylates are the main rawmaterial used in production of anionic surfac-tants). This plant will have a planned capacity of20,000 tons per year and the possibility ofextension up to 40.000 tons per year.

Phosphorus derivatives

Phosphorus derivatives (flame retardants andplasticizers) are used in the plastics industry andhave very good growth potential. As a result,production capacity was recently increased byover 65% through modernisation of existingfacilities. An investment project is under way tofurther increase capacity by an additional 60%.Preparations for further investment phases areunder way which will be aimed at extending theproduct range and construction of a large phos-phorus derivatives plant.

Polyols

Polyols, raw materials used in production ofpolyurethane foam, are the third major strategicdevelopment area for PCC Rokita. Forecast forthe polyols market (closely connected with thefurniture market) assumes a constant develop-ment which will necessitate increasing produc-tion capacity and product range. Current invest-ments have increased production capacity to60,000 tons/year and preparations are startedfor a further investment to double this capacity.

1 4

E N V I R O N M E N T A L P R O T E C T I O N

NFOSiGW provides co-financing for the "Lutynia" project

In response to concerns about the condition ofthe river Odra, PCC Rokita started a project: to"Direct Lutynia into the PCC Rokita Waste-waterTreatment Plant". As this is an environmentalproject, the Company decided to apply for co-financing from relevant EU programs and theinvestment obtained co-financing from theNational Fund for Environmental Protection andWater Management. Completion of the projectis estimated for the end of 2006.

Waste Selection and Collection

In November 2005, the Company introduced apaper recycling system and containers for usedpaper are distributed on the Company with spe-cialised containers for newspapers and otheroffice materials. The Company will carry onthese activities which are aimed at increasingemployee awareness of ecological issues.

To find out more please visit our eco-link on:www.pcc.rokita.pl.

1 7

E N V I R O N M E N T A L P R O T E C T I O N

PCC Rokita conducts its business activities tak-ing into consideration the natural environmentand to support a strategy of sustainable devel-opment. The wide range of activities carried outby PCC Rokita in this area can be divided intolong-term (e.g. modernisation of the waste-water treatment plant, implementation of wastemanagement systems) and short-term projects(e.g. regulation and redirection of the Lutyniastream, implementation of procedures for theIPPC - Integrated Pollution Prevention and Con-trol Permit, construction of a Recyclable andWaste Materials Warehouse).

Waste-Water Treatment Plant

Modernisation of the Central Waste-WaterTreatment Plant of PCC Rokita has been carriedout since 2002. The objective of this investmentis optimisation of waste treatment parametersand implementation of new technologiesenabling the Company to meet both current andfuture environment protection standards.

First phase of the modernisation was completedin 2005. Its effects are :

• Improved effectiveness of treatment processes.

• Application of “state of art“ chemical processes for waste neutralisation.

• Improved waste eradication in discharge water.

• Reduced energy consumption.

1 6

20030

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

2004 2005

Average amount of energy usedfor waste treatment [kW/m3]

0%

10%

20%

30%

40%

50%

20052004

Reduction of Total Chemical Oxygen Demand (TCOD) industrialwastes of PCC Rokita

F I N A N C I A L S T A T E M E N T S

1 9

Profit and loss account [PLN thousand]

Position 2004 2005

Net sales 619 185 620 530

Cost of sold products and materials 554 000 586 593

Profit/ loss on sales 11 510 33 937

Other operating revenue 11 481 6 888

Other operating cost 4 021 9 653

Profit/ loss on operating activities 18 970 31 172

Financial revenue 2 956 8 194

Financial cost 5 364 5 350

Profit/ loss on economic activities 16 561 34 016

Gross result 16 561 34 016

Income tax 3 207 5 971

Net result 12 586 28 046

LIABILITIES As at 31.12.2004 As at 31.12.2005

A. EQUITY 211 891,2 241 415,5

I. Share capital 15 295,1 15 295,1

II. Unpaid share capital - -

III. Own shares - -

IV. Supplementary capital 136 852,4 151 902,8

V. Revaluation capital 49 198,9 48 212,6

VI. Other reserves - -

VII. Retained earnings (accumulated losses) -2 041,0 - 2041,0

VIII. Net profit (loss) for the year 12 585,8 28 045,9

IX. Distribution of net profit during the year - -

B. LIABILITIES AND PROVISIONS FOR LIABILITIES 127 091,2 157 381,2

I. Provisions for liabilities 14 621,1 15 709,8

II. Long-term liabilities 4 637,1 13 863,1

III. Short-term liabilities 107 119,8 127 096,1

IV. Accruals and deferred income 713,2 712,3

TOTAL LIABILITIES 338 982,5 398 796,7

ASSETS As at 31.12.2004 As at 31.12.2005

A. FIXED ASSETS 197 496,5 251 654,0

I. Intangible fixed assets 320,6 1 404,2

II. Tangible fixed assets 144 206,8 170 440,3

III. Long-term receivables 0,0 0,0

IV. Long-term investments 49 564,8 75 879,9

V. Long-term accruals 3 404,4 3 929,7

B. CURRENT ASSETS 141 486,0 147 142,6

I. Stocks 38 747,2 38 325,1

II. Short-term receivables 85 272,6 86 365,8

III. Short-term investments 12 485,9 8 024,4

IV. Short-term accruals 4 980,3 14 427,4

TOTAL ASSETS 338 982,5 398 796,7

R E P O R T O F T H E I N D E P E N D E N T A U D I T O R

Independent Auditor’s Opinion for the Shareholders’Meeting of PCC Rokita SA

We have audited the financial statements of PCC Rokita SAwith registered office in Brzeg Dolny, ul Sienkiewicza 4,comprising:

• introduction to the financial statements

• balance sheet prepared as at 31.12.2005, showing total assets and total liabilities of 398 796 704,53 PLN

• profit and loss account for the reporting period from01.01.2005 to 31.12.2005, showing a net profit of28 045 888,19 PLN

• cash flow statement for the reporting period from 01.01.2005 to 31.12.2005, showing an increase in cash of 38 452,33 PLN

• statement of changes in equity (own funds) for the reporting period from 01.01.2005 to 31.12.2005, showing an increase in net equity of 29 524 249,80 PLN

• additional information and explanations

The preparation of the financial statements is the responsibilityof the Company’s management board.

Our task was to audit the financial statements and to issuean opinion as to their objectivity, correctness and clarity andto verify the correctness of the accounting records whichprovided the basis for the preparation of the financial state-ments.

The audit was carried out pursuant to the provisions of:

1) Chapter 7 of the Accounting Law dated September 29, 1994 (Journal of Laws 2002, No. 76, item 694, as further amended)

2) Auditing standards, issued by the Polish Chamber of Auditors

The audit was planned and carried out in such a manner asto obtain rational certainty, allowing us to issue an opinionon the financial statements.

In particular, the audit comprised checking of the appropri-ateness of the accounting principles (policy) and significantestimates used by the Company, principally by applyingsampling of the accounting records from which amountsand information contained in the financial statements ariseas well as an overall evaluation of the presented financialstatements.

We consider that the audit provides a sufficient basis toform an objective audit opinion.

In our opinion, the financial statements comprising numericaldata and commentary:

a) present in an objective and clear manner all the information which is material to the assessment of the audited Company’s net asset and financial position as at 31.12.2005, and the financial result for the reporting period from 01.01.2005 to 31.12.2005,

b) in all material aspects have been prepared in compliance with the accounting principles (policy) specified in the above mentioned law and on the basis of properly maintained accounting records

c) comply with legal regulations and with the provisions of the Company’s Articles of Association, to the extent that these affect the content of the financial statements

Having no reservations as to the correctness and reliabilityof the audited financial statements, we would like to informyou that the Company:

• for corporate income tax purposes (determination of tax basis), treated as tax-allowable costs the effectsof increased depreciation charges (3 124 K.PLN) onfixed assets which as at 01.01.2005 were accountedfor as subject to quick technical progress and on buildings and infrastructure utilised in unfavourableconditions, this depreciation having not been shownin the company’s 2005 costs nor in fixed assets’ valuation as per the balance sheet

• accounted for as sales of products and semi-products in the amount of 18 973 K.PLN, invoiced as at 31.12.2005 to a subsidiary, after that on 31.12.2005, the company purchased these stocks disclosing them in the financial statements as materials and goods for resale, with gross revenues from the sale of 1 191 K.PLN

The report on the Company’s activity is complete in theunderstanding of art. 49 item. 2 of the Law on Accountingand the information contained therein, arising from theaudited financial statements, is consistent with the state-ments.

Registered auditorMarian Porembaregistered as authorised auditor under number 7883/1623

Registered auditorZbigniew Za∏uskiregistered as authorised auditor under number 5470/5872

Andrzej Wojciech KinastRegistered auditor no. 90003President of the Management Board

Grant Thornton Sp. z o.o.An entity registered as an authorised auditor under number 220

Warsaw, 14.03.2006

2 1

F I N A N C I A L S T A T E M E N T S

2 0

Balance sheet [PLN thousand]

PCC Rokita Group in Figures [PLN thousand]

2 3

P C C R O K I T A C A P I T A L G R O U P

Shares of affiliated and associated companies owned by PCC RokitaAs at 31.12.2005

Scope Share in equity owned SupplementaryCompany’s name Seat of business by PCC Rokita capital

1 ENERGETYKA - ROKITA Sp. z o.o. Brzeg Dolny Production of energy 99,9% 27 588 400

2 ROKITA - AGRO S.A. Brzeg Dolny Production 88,66% 24 027 000

3 KOSMET - ROKITA Sp. z o.o. Brzeg Dolny Production 99,9% 4 893 300

4 PCT S.A Brzeg Dolny Services 99,9% 6 000 000

5 PCC AUTOCHEM Sp. z o.o. Brzeg Dolny Transport 41,14% 3 398 500

6 BIZNESPARK ROKITA Sp. z o.o. Brzeg Dolny Services 99,95% 1 004 000

7 APAKOR - ROKITA Sp. z o.o. Brzeg Dolny Services, Production 97,71% 391 100

8 LABANALITYKA Sp. z o.o. Brzeg Dolny Services 99,81% 364 700

9 LABMATIC Sp. z o.o. Brzeg Dolny Services 99,53% 184 900

10 CWB "PARTNER" Sp. z o.o. Brzeg Dolny Services 97,5% 100 000

11 ENVOLT Sp. z o.o. Brzeg Dolny Services 99% 50 500

12 Ekologistyka Sp. z o. o. Brzeg Dolny Services, Production 99,99% 26 912

13 TECHNOCHEM Sp. z o.o. Brzeg Dolny Services 71,6% 25 000

2 2

P C C R O K I T A C A P I T A L G R O U P

2001 2002 2003 2004 2005

Sales 541 143 496 980 581 925 742 214 767 987

Gross profit 20 467 4 032 16 358 22 250 42 809

Profit (loss) on sales 35 637 11 697 23 415 16 319 44 678

Gross profit (loss) on sales 105 357 73 125 78 856 76 939 116 804

Equity 194 124 192 476 200 408 219 102 247 148

Total assets 366 764 360 978 349 490 405 263 467 675

Employment [persons] 2 124 2 055 2 112 1 955 1 840

P C C R O K I T A C A P I T A L G R O U P

Zak∏ad Chemii Gospodarczeji Samochodowej KOSMET-ROKITA Sp. z o.o.

The Company specialises in the production ofdetergents for households and individual con-sumer use, professional products for institution-al customers, brake fluids and car cosmetics.Most of the production is sold under privatelabels.

Significant events in 2005:

• Creation of new groups of products successfully implemented in: JMD, Carrefour, Auchan, Leclerc.

• Improved products for professional cleaning, laundry, hygiene, disinfectants and food industries

• Improved production and customer service procedures

• Improved internal processes (Introduction of Key Performance Indicators for Planning, Warehousing and Material demand)

Contact

phone: (071) 794 2923fax (071) 794 2879 www.kosmet.pl

2 5

P C C R O K I T A C A P I T A L G R O U P

Przedsi´biorstwo Energetyczne ENERGETYKA - ROKITA Sp. z o.o.

Energetyka - Rokita conducts business activitiesin the area of production and distribution ofelectric energy, production of demineralisedwater as well as production and distribution ofcompressed air.

Significant events in 2005:

• Modernisation of the compressed air station (second phase)

• Decreasing heat demand resulting in reduction of working time of the EC-2 steam boiler, and lowered electricity production

• Preparation of the Concept Design Phase for a new steam boiler (EC-3). Implementation of the project is planned for 2006-2008

Contact

phone: (071) 794 2015fax (071) 794 2277 e-mail: energetyka@energetyka.rokita.pl

2 42003

0,0

5 000,0

10 000,0

15 000,0

20 000,0

25 000,0

30 000,0

35 000,0

40 000,0

2004 2005

Sales [PLN million]

20030,0

10 000,0

20 000,0

30 000,0

40 000,0

50 000,0

60 000,0

2004 2005

Sales [PLN million]

APAKOR-ROKITA Sp. z o.o. Zak∏ad Budowy Aparatury

Scope of business:

• Construction and repair of containers, heat exchangers, mixers and reactors

• Steel constructions

• Coating Application and corrosion preservation including rubber and ebonitecoating of containers, pipeline components and fittings

Contact

phone: (071) 794 2506fax (071) 794 2020e-mail: zba@apakor-rokita.plwww.apakor-rokita.pl

BIZNESPARK ROKITA Spó∏ka z o.o.

Scope of business:

• Management of the PCC Rokita Industrial Site including renting, lease and sale of assets and real estate

• Supervision of Industrial Site administration and repairs

• Coating Application and corrosion preservation including rubber and ebonite coating of containers, pipeline components and fittings

Contact

phone: (071) 794 2060fax (071) 794 2090

PCC AUTOCHEM Sp. z o.o.

Scope of business:

• Bulk chemical Transport (including Hazardous Materials) internally and for export

• Expediting

• Specialised cleaning services for Tanker Truck Interiors and Containers

Contact

phone: (071) 794 2133, fax (071) 794 2381 e-mail: autochem@pcc.autochem.plwww.autochem.com.pl

Polskie CentrumTeleinformatyki S.A.

Scope of business:

• Outsourcing of IT systems

• Integrated IT services for Businesses including:

• Access management and administration of hardware infrastructure

• Administration of system, business and office software (SAP, Microsoft, Lotus)

• Data security and archiving• Internet and intranet• Complete IT “Help-Desk“

• Outsourcing of telecommunication systems

• User Base Support

• Design and Implementation of telecommunication systems

• Interfacing into Cellular Phone Networks

• LAN/WAN network installation and support

• Outsourcing of security systems

• CCTV systems

• Access control systems

• Theft protection systems

Contact

phone: (071) 794 2200 fax (071) 794 2500 e-mail: office@pct.plwww.pct.pl

2 7

P C C R O K I T A C A P I T A L G R O U P

ROKITA-AGRO S. A.

The Company manufactures, formulates andsells plant protection products. It manufacturesactive substances and formulates finished prod-ucts based on them. The Company’s productrange is aimed at agricultural institutions andorganisations trading in plant protection prod-ucts. The Company offers herbicides andgrowth regulators and 50% of turnover is fromexports.

The Company is focused on three strategic business units:

• 2,4 D synthesis

• CCC synthesis

• Formulation of plant protection products

Significant events in 2005:

• Implementation of investment projects aimed at increasing installed production capacity and adaptation to environment protection regulations

• Awards for research and technical development:

• "Z∏oty Orbital" for development and implementation of "state of the art" technology for the 2.4D Herbicide (a selective, hormonal herbicide) as part of a competition run by the magazine "Rynek Chemiczny".

• "Mistrz Techniki" for the same achievement in the competition run by "Rzeczpospolita"newspaper and the "NOT" Polish Engineering Society.

• First place in the competition “Polski Produkt Przysz∏oÊci (PolishProduct of the Future)“ under the auspices of the President of Poland runby the Polish Agency for Enterprise Development, granted in the category “technology of the future“ - reward for “ecologic technology for production of high quality 2,4 D herbicide“.

• Gold Medal with Distinction on the 54th

annual “Inventions, Scientific Research and New Technologies World Fair - Brussels EUREKA 2005“.

Contact

phone: (071) 794 2235,fax (071) 794 2150 e-mail: agro@rokita-agro.com.plwww.rokita-agro.com.pl

2 62002/03

0,0

20 000,0

40 000,0

60 000,0

80 000,0

100 000,0

120 000,0

140 000,0

2003/04 2004/05

Sales [PLN million]

C O M P A N Y

2 9

P C C R O K I T A C A P I T A L G R O U P

CENTRUM WSPIERANIA BIZNESU"PARTNER" Sp. z o.o.

Scope of business:Outsourcing of financial and human resources functions and consultancy:

• HR and payroll administration

• Financial consultancy

• Accounting support

• Financial services

• Debt collection

• Training organisation

• Public relations

Contact

phone: (071) 794 2212 fax (071) 794 2509

e-mail: cwbpartner@cwbpartner.com.plwww.cwbpartner.com.pl

Zak∏ad Us∏ugowo-SerwisowyLABMATIC Sp. z o.o.

Scope of business: Plant Maintenance including:

• Industrial automation services

• Electrical and Electronic• Maintenance of machine park

and technical installations

Contact

phone: (071) 794 2561 fax (071) 794 2882

e-mail: poczta@labmatic.com.plwww.labmatic.com.pl

Ekologistyka Sp. z o.o.

Ekologistyka conducts business activities mainlyin the area of waste management. These activi-ties were started on 1 January 2006 based onthe property provided by PCC Rokita - WasteMaterials Storage.

Contact

phone: (071) 794 3425fax (071) 794 2419

LABANALITYKA Sp. z o.o.

Scope of business:

• Research into chemical substances

• Control of chemical processes

• Research and measurement of environment protection and work hygiene

Contact

phone: (071) 794 3425 fax (071) 794 2419

e-mail: labanalityka@labanalityka.plwww.labanalityka.pl

TECHNOCHEM Sp. z o.o.Biuro Projektowo-In˝ynieryjne

Scope of business:

• Industrial design and Project Development in many branches of industry

• Development and implementation of technical processes in chemistry and related subjects

• Study, Feasibility and Concept Projects

• Technical and Project Costing Consulting

Contact

phone: (071) 319 0876 fax (071) 319 0878

2 8

Company PCC Rokita Spó∏ka Akcyjna

Seat 56-120 Brzeg Dolny, ul. Sienkiewicza 4

Contact phone +48 (071) 3192000fax +48 (071) 3192189www. pcc.rokita.pl e-mail: kontakt@pcc.rokita.pl

Regon 930613932

EKD 2414

NIP 917-000-00-15

Company’s legal form Public limited company has a legal personality and according to the Polish lawoperates on the basis of Trade Law and other relevant law regulations.

Entry to Trade Register The Company was registered by Regional Court of Wroc∏aw - Fabryczna, VI Economic Department of National CourtRegister under the following number: KRS 0000105885.