• 1.3.2 “Companies integrate ESG factors in their business strategy, including in particular social and employee factors, including among others actions taken and planned to ensure equal treatment of women and men, decent working conditions, respect for employees’ rights, dialogue with local communities, customer relations”.

In its business Strategy, the company takes into account broadly understood social and employee factors. However, the Strategy does not cover issues related to the actions taken and planned to ensure equal treatment of women and men. The Company strives to ensure that the measures taken in employee affairs are based on equal treatment of both genders.

• 1.4.2 “To ensure quality communications with stakeholders, as a part of the business strategy, companies publish on their website information concerning the framework of the strategy, measurable goals, including in particular long-term goals, planned activities and their status, defined by measures, both financial and non-financial. ESG information concerning the strategy should among others present the equal pay index for employees, defined as the percentage difference between the average monthly pay (including bonuses, awards and other benefits) of women and men in the last year, and present information about actions taken to eliminate any pay gaps, including a presentation of related risks and the time horizon of the equality target”.

Currently, the company does not present information about actions taken or planned in order to ensure the wages equality with regard to gender. The equal pay ratio is presented in the Sustainability Statement.

• 2.1 “Companies should have in place a diversity policy applicable to the management board and the supervisory board, approved by the supervisory board and the general meeting, respectively. The diversity policy defines diversity goals and criteria, among others including gender, education, expertise, age, professional experience, and specifies the target dates and the monitoring systems for such goals. With regard to gender diversity of corporate bodies, the participation of the minority group in each body should be at least 30%”.

PGE Polska Grupa Energetyczna S.A. has not yet developed a diversity policy applicable to the company’s governing bodies. Recruitment process for the managerial positions includes such elements as proper education, professional experience, qualifications and competences of the candidates and does not disqualify any candidates in terms of elements of the diversity policy that are indicated in the principle. There was no gender diversity in the Management Board of the Company, while in the Supervisory Board the minority share was at the level of approx. 38% (as at December 31, 2024).

• 2.2 “Decisions to elect members of the management board or the supervisory board of companies should ensure that the composition of those bodies is diverse by appointing persons ensuring diversity, among others in order to achieve the target minimum participation of the minority group of at least 30% according to the goals of the established diversity policy referred to in principle 2.1”

PGE Polska Grupa Energetyczna S.A. has not yet developed a diversity policy applicable to the company’s governing bodies. Recruitment process for the managerial positions includes such elements as proper education, professional experience, qualifications and competences of the candidates and does not disqualify any candidates in terms of elements of the diversity policy that are indicated in the principle. In the Company’s view, the versatility of the Company’s bodies is ensured by the diversity of the members of the Management Board and the Supervisory Board in terms of education, expertise in various fields, and professional experience. There was no gender diversity in the Management Board of the Company, while in the Supervisory Board the minority share was at the level of approx. 38% (as at December 31, 2024).

• 2.11.6 “In addition to its responsibilities laid down in the legislation, the supervisory board prepares and presents an annual report to the annual general meeting once per year. Such report includes at least the following: information regarding the degree of implementation of the diversity policy applicable to the management board and the supervisory board, including the achievement of goals referred to in principle 2.1.”

The company has no formal diversity policy applicable to the Management Board and the Supervisory Board, therefore, it does not prepare a report with information on the degree of implementation of the diversity policy.

• 3.5 “Persons responsible for risk and compliance management report directly to the president or other member of the management board”.

In accordance with the current organisational structure, the person responsible for risk management reports to the Managing Director of Finance, who reports directly to the member of the Management Board. The lack of direct reporting of the Head of the Department in charge of risk management is due to the Company’s organisational structure and the consistent capture of risks together with financial issues. Regardless of subordination to the Managing Director of Finance as part of his responsibilities, the Director of the Risk and Insurance Department has direct contact with the Member of the Management Board in charge of Finance. In accordance with the current organisational structure, the person responsible for Compliance has the possibility to report directly to the President of the Management Board while organisationally they report to the Director of the Security Division, who reports directly to the President of the Management Board.

• 3.7 “Principles 3.4 to 3.6 apply also to members of the company’s group which are material to its activity if they appoint persons to perform such tasks”.

Principle is not applied in relation to principle 3.5 in case of persons responsible for risk management in some group’s companies, which are material to the group’s activity. At the other Group companies of significant importance to the Group’s business, the persons appointed for risk management and compliance tasks report to the Presidents or Members of the Management Board.

• 3.8 “The person responsible for internal audit or the management board if such function is not performed separately in the company reports to the supervisory board at least once per year with their assessment of the efficiency of the systems and functions referred to in principle 3.1 and tables a relevant report”.

Currently, information about assessment of the efficiency of the systems and functions referred to in principle 3.1 (internal control, risk management and compliance as well as internal audit), are presented to the Supervisory Board by the directors of particular departments and the President of the Management Board.

• 4.1 “Companies should enable their shareholders to participate in a general meeting by means of electronic communication (e-meeting) if justified by the expectations of shareholders notified to the company, provided that the company is in a position to provide the technical infrastructure necessary for such general meeting to proceed”.

The Management Board of PGE does not exclude adoption of the above-mentioned principle in future. In opinion of PGE’s Management Board, non-compliance with the above principle will not affect the reliability of the information policy and does not cause a risk of limitations or difficulties for shareholders to participate in general meetings. The Company provides real-life broadcast of the general meeting.

• 6.4 “As the supervisory board performs its responsibilities on a continuous basis, the remuneration of supervisory board members cannot depend on the number of meetings held. The remuneration of members of committees, in particular the audit committee, should take into account additional workload on the committee”.
• Remuneration of Members of the Supervisory Board of PGE S.A. was defined by Resolution No. 5 of the Extraordinary General Meeting of December 14, 2016 (as amended) on the rules for determining the remuneration of Members of the Supervisory Board, according to which the monthly remuneration of members of the Supervisory Board was set as a product of the average remuneration in the business sector exclusive of profit-based bonuses in the fourth quarter of the previous year as announced by the President of the Central Statistical Office of Poland and the following factor: 1.7 (for the chairperson of the Supervisory Board), 1.5 (for the other members of the Supervisory Board). The remuneration of Supervisory Board members does not depend on the number of meetings held, but the work in committees is not remunerated additionally. Paid to Members of the Supervisory Board of PGE S.A. the remuneration complies with the rules set out in the Act of June 9, 2016 on the rules for determining the remuneration of persons managing certain companies.

To ensure the application of uniform accounting principles in the PGE Capital Group, an EU IFRS-compliant accounting policy of the PGE Capital Group (Accounting Policy, Policy) has been developed.  Policy is binding for the companies using IFRS for preparation of their statutory financial statements and at preparation of the IFRS-compliant reporting packages for the consolidation. The accounting policy is updated in the event of changes in regulations or in the event of significant events which were not described previously. The Management Board of the parent company is responsible for developing and updating the Policy.

Before every reporting period the companies subject to consolidation receive detailed guidelines from PGE S.A. with regard to method and closing date of the accounting books, preparation and submitting the reporting packages and template updated for a given period.

The Company keeps accounting books in the integrated information system. The system ensures division of competencies, coherent entries in the books and control between the general ledger and subsidiary ledgers. The system can be modified to ensure adequacy of the technical solutions to the changing accounting principles and legal standards. The adopted IT solutions ensure access control and protection against unauthorized interference. The rules for archiving financial and accounting data are also implemented.

Consolidation of the financial statements is performer in the dedicated IT program. The program ensures consistency of reporting for the purposes of consolidation for all companies of the Capital Group, regardless of the accounting system used for statutory purposes. All companies of the Capital Group enter data in the same system.

Data for the consolidation program are partly entered automatically from accounting systems and the rest is completed manually. The functionality of the program ensures verification of internal data consistency, reconciliation of turnover, settlements and flows between the companies of the Capital Group and the automation of repeated consolidation adjustments. Ultimately, the program generates reports that are the basis for the preparation of consolidated financial statements.

There is also access control and rights to edit and approve financial data entered into the consolidation program.

The management of the particular companies are responsible for preparation of the reporting packages under consolidation. Management is responsible for the preparation and approval of the data. In addition, the reporting packages of significant subsidiaries are verified by the reporting team in the parent company and by an independent auditor. The reporting data of the subsidiaries are also analysed by the parent company in terms of deviations from financial plans and comparable periods.

Director of the Reporting and Tax Department of the Company is responsible for the preparation of stand-alone and consolidated financial statements. Statutory auditors perform an independent assessment of reliability and correct preparation of the financial statements of PGE S.A. and financial statements of companies subject to consolidation.

The preparation of financial statements in accordance with the ESEF requirements in XBRL format is carried out with the support of an external professional entity.

The auditor selection procedure and the policy of cooperation with the auditor ensure his independence from the Company and the Capital Group. In accordance with the policy adopted by the Audit Committee, updated in 2020, the maximum uninterrupted duration of engagements for audits of financial statements, carried out by the same audit firm or an audit firm associated with this audit firm or any member of the network operating in the European Union countries to which these audit firms, may not exceed 10 years, provided that the key statutory auditor may not audit the financial statements for a period longer than 5 years and that the key statutory auditor may re-audit the financial statements after at least 3 years from the end of the last auditing financial statements.

The PGE Group has implemented a multi-stage process of approving financial statements with the participation of Supervisory Boards of the companies under consolidation. Stand-alone and consolidated financial statements of PGE S.A. are evaluated by the Supervisory Board. The Audit Committee operates within the Supervisory Board and is responsible, among others, for: monitoring the independence of the statutory auditor, monitoring the effectiveness of internal control systems, reviewing interim and annual financial statements of the Company. In the case of companies with Supervisory Boards, the individual reports are assessed by the Supervisory Boards of these companies. The financial statements are approved by the General Meetings of the companies.

The Company has an internal audit that covers all areas of activity of the PGE Capital Group, excluding protection of classified information, which is regulated by the appropriate act. Internal audit operates on the basis of the Audit Regulations at PGE Group developed taking into account generally recognised international standards for the professional practice of internal auditing. PGE S.A. strives to implement the recommendations of the Warsaw Stock Exchange contained in the Best Practices (DPSN 2021), regarding the maintenance of an effective internal audit function, appropriate to the company’s size, type and scale of operations.

The audit function has been consolidated within PGE Group and is carried out by the Internal Audit Department, which carries out audit tasks for the Corporate Centre and individual PGE Group companies. The exceptions are Conventional Generation companies, where separate audit structures exist.

The internal audit function operates according to a plan. The Internal Audit Department prepares audit tasks and the resources required for their implementation in the Annual Audit Plan of the PGE Group, which is approved by the Management Board of PGE S.A. The Annual Audit Plan is based, among other things, on the Long-Term Audit Plan covering a four-year cycle, operational risk analysis results, and reported audit needs. In addition to planned audit tasks, ad hoc audit assignments are also carried out.

The Director of the Internal Audit Department reports directly to the President of the Management Board. Internal audit matters are also presented to the Audit Committee of the Supervisory Board through communication of the results of individual audit assignments and as part of cyclical reporting covering the entire functioning of the internal audit in PGE CG. The Audit Committee is a collegiate advisory and opinion-making body of the Supervisory Board, composed of its Members.

The internal structure of the Internal Audit Department includes separate organizational units dedicated to servicing individual operational segments of PGE Capital Group and performing activities from the Corporate Centre level. In order to maintain audit independence, the Audit Department in the organisational structure of PGE S.A. reports directly to the President of the Management Board. Both the directors and the internal auditors support the Company’s operational and reporting processes by participating in the performance of advisory tasks and by communicating to the substantive units of PGE S.A. important issues resulting from performed audit tasks.

One of the features of the internal control system at PGE Group is that it operates on the basis of on-going cooperation between the units responsible for audit, security and compliance. This cooperation is carried out in particular through on-going and immediate exchange of information. In addition, PGE S.A. has in place an Information Coordination System consisting of the coordination – by the unit competent for security – of investigations carried out in the area of security and crisis management by this unit and by the units competent for audit and compliance, in accordance with their jurisdiction, as well as by the organisational units competent for security and crisis management in PGE Capital Group companies.