Supervisory Board and Supervisory Board Committees

Mr Piotr Stępniak is a graduate of the University of Guelph, Canada, where he obtained the Bachelor of Arts degree in 1992. In 1995 he completed the course of Executive Master of Business Administration (EMBA) at the ESC Rouen in France, and Master of Science in Management (MSM) at the Purdue University in the USA. Mr Stępniak gained knowledge and experience in management working successively in the following companies: 1985–1992 Air Canada–Toronto, Canada; 1992–1997 PepsiCola lnt’l; 1998 Bank Handlowy S.A. in Warsaw; 1999–2000 Development Director at ARMARK, Toronto, Canada; 2000–2001 Marketing Director and 2001–2005 Vice President of the Management Board of Lukas S.A. and Lukas Bank S.A.; 2005–2008 President of the Management Board of Getin Holding S.A.

For many years, Mr Stępniak has also sat at Supervisory Boards of a number of companies. In the years 2003‑2004 at Europejski Fundusz Leasingowy S.A., in 2003–2007 at TU Europa S.A., in 2005–2006 at Getin Leasing S.A., and in 2005–2008 at Powszechny Dom Kredytowy we Wrocławiu S.A., Carcade Sp. z o.o.  (Russia), Fiolet S.A, and Open Finance S.A. In the years 2007–2008 he was Member of the Supervisory Board of Prikarpattya Bank (Ukraine), in 2008–2009 of Fudusz Mikro Sp. z o.o., and in 2008–2018 of Skarbiec Asset Management Holding S.A.

Currently, he is Member of the Supervisory Boards of: Kruk S.A., Moovena Ubezpieczenia Sp. z o.o., Nest Bank S.A., BFF Polska S.A., Asseco Business Solutions S.A., Grupa KĘTY S.A., Fenville Investments sp. z o.o., Vehis Sp. z o.o., VRG S.A., and W.Kruk S.A.

Mr Piotr Kaczmarek is a graduate of Adam Mickiewicz University in Poznań, was awarded the CFA (Chartered Financial Analyst) title and a securities broker licence. Since the beginning of his professional career Mr Kaczmarek has dealt with the capital market. He has 19 years of experience in analysing and measuring financial instruments.

He managed the portfolios of two largest pension funds in Poland: ING OFE and Aviva OFE. He is a co-author of the first model of ‘Corporate Governance Principles’ on the pension funds market. Initially, Mr Kaczmarek worked as a securities broker at the BMT S.A. brokerage house (1994–1995), and Bank Handlowy in Warsaw (1997–1998), and subsequently as a capital market dealer at Bank Amerykański w Polsce S.A. (1999-2000). In the years 2000–2008 he was connected with ING Nationale-Nederlanden Polska PTE S.A., where he acted as a shares analyst, shares portfolio manager and Investment Director for Shares, respectively. In 2006 he was appointed member of the Society Management Board and took the position of the Investment Department Director. In 2009-2010 he was Manager at Skarbiec TFI S.A. From 2011 to May 2016 he worked at Aviva PTE BZWBK S.A., holding the position of a senior analyst and afterwards the shares portfolio manager.

Since 2016, he has sat at Supervisory Boards and Audit Committees of both stock-listed companies (Grupa Kęty S.A., Robyg S.A., Harper Hygienics S.A., Erbud S.A., Ferro S.A., Develia S.A., Vrg S.A., and Śnieżka S.A.) and private ones (W. Kruk S.A., Novaservis spol. s.r.o.).

Mr Paweł Niedziółka graduated from the SGH Warsaw School of Economics in 1998 with a major in finance and banking. In 2000, he was awarded a PhD in Economics at the College of Management and Finance of the SGH Warsaw School of Economics, and in 2010 he became Assistant Professor. Currently, he heads the Financial Risk Management Department at the Institute of Banking of the SGH Warsaw School of Economics as an Associate Professor. He is a member of the Polish Association of Finance and Banking, and the Committee on Financial Sciences of the Polish Academy of Sciences, the second prize winner in the contest of the President of the National Bank of Poland for the best post-doctoral thesis and the winner of other prizes for his scientific and educational work. He is the author of about 160 scientific publications and expert opinions for litigation purposes, as well as a lecturer at bachelor’s, master’s, postgraduate and PhD courses.

Mr Niedziółka has been acting as an expert at the Polish Agency for Enterprise Development (PARP), representing the Polish Banks Association, and a tutor for bank employees and candidates for statutory auditors. He manages the Structural Financing Team at Bank Millennium S.A. (previously, he was associated with Credit Lyonnais Bank Polska and Bankgesellschaft Berlin). He was an independent Member of the Supervisory Board of Grupa Kęty S.A. in the years 2014–2020, and in the years 2017–2020 Deputy Chairman of the Supervisory Board and Chairman of the Nomination and Remuneration Committee. Since 2014 he has been an independent Member of the Supervisory Board of Grupa KĘTY S.A., and in the years 2017–2020 he was Deputy Chairman of the Supervisory Board and Chairman of the Nomination and Remuneration Committee of Grupa KĘTY S.A.

Mr Przemysław Rasz is a graduate of a dual programme by the Poznań University of Technology (MSc Eng. in Chemical and Food Industry) and the University of Economics in Poznań (Management), where he obtained his degree in 1988. In 1998 he took a post-graduate course in Company Value Management at the SGH Warsaw School of Economics in Warsaw.

In 1989 he joined Izolacja Zduńska Wola, where he worked for the subsequent 28 years. In 1994 he was appointed Member of the Company Management Board and in 1996 was a leader of a team responsible for the company IPO at the Warsaw Stock Exchange. In 1999, after the control stake of the company had been acquired by the Danish Icopal a.s., a global leader in roof waterproofing materials, he became President of the Polish subsidiary and two years later Member of the Icopal Global Board in charge of innovation and business development. Under the leadership of Mr Rasz, Icopal Poland experienced a period of consistent and profitable growth marked by strategic acquisitions, green field investments, restructuring, as well as new products and systems implementation. That firmly established the company as an unquestioned leader in Poland and the region. In that time, the company developed close ties with Universities of Technology, which resulted in several successful innovative waterproofing products and solutions. Within his corporate capacity, he was co-creator of a strong and uniform global structure, which originated from a merger of a series of acquired companies. In 2007 Icopal was taken over by the Investcorp Private Equity Fund, and in 2008 Mr Przemysław Rasz became directly responsible for the CEE region, which he led until 2016, when the company was sold to Standard Industry, a US‑based strategic investor. He played an important role in the take-over process, including as a trustee of a group of key executives and minority shareholders during the negotiations. For the further two years he was Vice President of the Global Executive Board of the Icopal Group based in London. After the acquisition of Brass Monier, he managed the merged organisation of Icopal and Brass Monier (BMI) in Poland until 2018.

Within his social and business capacity, Mr Rasz served: two terms as a Member of the Board of Construction Materials by the Minister/Chief Building Supervision Inspector; two terms as a Member of the Scientific Council of Building Technology Institute in Warsaw; two terms as a Member of the Building Design Chamber in Warsaw; four terms as a Deputy Chair of the Board of the Polish Chamber of Commerce and Industry for the Construction Business; and two terms as the Chairman of the Construction Committee of the National Chamber of Commerce in Warsaw. Since 2019 he has focused on advisory and supervisory activities. In the years 2019 and 2020, until the time of COVID-19 related limitations, he was Chairman of the Board of Directors at Worthhouse Inc., a US subsidiary of the Budmat Group. He is an independent Member of the Supervisory Board of Grupa KĘTY S.A. Privately, he is a devoted owner of the R&R Gallery, Poland’s largest gallery of silver and lighting in Łódź.

Mr Wojciech Golak is a Legal Counsel, a graduate in Law from the Cardinal Wyszyński University in Warsaw, Faculty of Law and Administration. He also completed a post-graduate course in Banking run by the SGH Warsaw School of Economics and the University of Warsaw, the Centre for American Law of the University of Warsaw, as well as the University of Florida, Levin College of Law. At the moment, he is a participant of the Koźmiński University PhD Programme in Law, where he has been writing his doctoral thesis devoted to restructuring proceedings financing.

Starting in 2016, Mr Golak has been running his own Law Firm. In the years 2007–2015 he cooperated with the Polish Branch of the Belgian Brokerage House KBC Securities N.V. as a lawyer, legal counsel, representative and receiver, respectively, whereas in the years 2005–2007 he acted as a lawyer at the M. Furtek i Wspólnicy Law Firm.

In the years 2016–2022 he was an independent Member of the Supervisory Board of ROBYG S.A., where he used to sit at the Remuneration Committee and the Audit Committee. Since 2022 he has been Member of the Management Board of Inventry sp. z o.o., and since 2023 Member of the Management Board of Bluu Poland sp. z o.o. and CEO of Sales Masters sp. z o.o. Mr Golak is a independent Member of the Supervisory Board of Grupa KĘTY S.A.

Anna Włoszek graduated from the University of Silesia in Katowice, Faculty of Law and Administration, in 2006. Further, she took a post-graduate course in accounting at the Katowice University of Economics, Faculty of Finance and Management. At the Kraków University of Technology, Polish-American School of Business, she obtained the title of Executive Master of Business Administration. Since the beginning of her career, she has occupied managerial positions at business companies and specialised in public procurement orders. Starting from 2019, she has been President of the Management Board of Agencja Rozwoju Małopolski Zachodniej S.A. Within her social and business capacity, Anna Włoszek has engaged in the operations of institutions in the Małopolska Region. Mr Golak is a independent Member of the Supervisory Board of Grupa KĘTY S.A.

 

• evaluation of financial statements the Company and the Capital Group, and the reports of the Management Board on the operations of the Company and the Capital Group;
• assessment of the Management Board motions concerning profit distribution or loss coverage;
• drafting and submission to the General Meeting of a written annual report for the preceding year (Report of the Supervisory Board);
• appointment and dismissal of the Management Board Members and determination of their remuneration in accordance with the Remuneration Policy binding at the Company;
• suspending the individual or all Management Board Members in their duties because of important reasons;
• delegating Members of the Supervisory Board to temporarily perform the duties of the Management Board Members who are incapable of discharging their duties;
• approval of the Management Board By-law;
• approval of Consolidated Budgets, Company Budgets, and Strategy of the Capital Group;
• selection of an audit firm to carry out the audit of the Company financial statements;
• selection of the Supervisory Board adviser;
• determination of the value of remuneration of the Supervisory Board Members delegated to temporary performance of duties of a Management Board Member, in accordance with the Remuneration Policy binding at the Company;
• presentation to the General Meeting of recommendations and requests regarding amendments to the Remuneration Policy binding at the Company, within the meaning of the Act of 29 July 2005 on Public Offering and Conditions Governing the Introduction of Financial Instruments to Organised Trading, and on Public Companies, plus introduction of more detail into the Remuneration Policy binding at the Company, upon approval by the General Meeting;
• preparing the annual Remuneration Report, as required by the Act of 29 July 2005 on Public Offering and Conditions Governing the Introduction of Financial Instruments to Organised Trading, and on Public Companies.

• disposing of and putting into use the Company assets of the value exceeding PLN 50,000,000 (say: fifty million zlotys), except for disposing of and putting into use any assets for the benefit of the companies of the Capital Group or within the ordinary course of business;
• activities, as a result of which the Financial Debt Limit of the Capital Group will be exceeded jointly for more than PLN 50,000,000 (say: fifty million zlotys) or further increase of the excess level;
• activities, as a result of which the Off-balance-sheet Debt of the Capital Group will be exceeded jointly for more than PLN 50,000,000 (say: fifty million zlotys) or further increase of the excess level;
• taking out cash liabilities in the value exceeding PLN 1,000,000 (say: one million zlotys), under the agreements on providing advisory services to the Company, except for taking out liabilities under advisory agreements signed with the companies of the Capital Group;
• taking out cash liabilities in the value exceeding PLN 12,500,000 (say: twelve and a half million zlotys), in relation to activities which have not been listed in this § 14.3, except for liabilities provided for in the Company budget and liabilities taken out within the Company ordinary course of business;
• creating and joining companies, and taking up or acquiring interest or shares;
• disposing of the interest or shares vested in the Company of the value exceeding PLN 10,000,000 (say: ten million zlotys), including by encumbering them, except for managing for the benefit of the companies within the Capital Group;
• granting finance by the Company based on lending agreements or other activities of similar nature for the amount exceeding PLN 1,000,000 (say: one million zlotys) to companies from outside of the Capital Group, except for the cases specified in the approved Company Budget, and except for finance granted within the ordinary course of business;
• exercising the right of vote on shares or interest of the Company in key companies in the matters related to granting a consent for:
  • disposing of and putting into use the Company assets of the value exceeding PLN 20,000,000 (say: twenty million zlotys), except for disposing of and putting into use any assets for the benefit of the companies of the Capital Group or within the ordinary course of business of a Key Company;
  • activities, as a result of which the Financial Debt Limit of the Capital Group will be exceeded jointly for more than PLN 50,000,000 (say: fifty million zlotys) or further increase of the excess level;
  • activities, as a result of which the Off-balance-sheet Debt of the Capital Group will be exceeded jointly for more than PLN 50,000,000 (say: fifty million zlotys) or further increase of the excess level;
  • creating and joining companies, and taking up or acquiring interest or shares;
  • disposing of the interest or shares vested in the Company of the value exceeding PLN 10,000,000 (say: ten million zlotys), including by encumbering them, except for managing for the benefit of the companies within the Capital Group;

• conclusion of an agreement with a member of the Supervisory Board;
• conclusion of a major agreement with a shareholder of the Company who holds at least 5% (say: five percent) of the total number of votes in the General Meeting;
• opening or closing a branch.

The Audit Committee of the Supervisory Board of Grupa KĘTY S.A. was appointed by way of Resolution of the Supervisory Board on 23 September 2004, and it operates in compliance with its By-law, abiding by the internal regulations of Grupa KĘTY S.A., and also follows the requirements of the legal regulations, particularly the Act on Statutory Auditors, Audit Firms and Public Supervision (Journal of Laws of 2022, item 1302, as amended) – hereinafter referred to as the Act) and Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014. The Audit Committee consists of members appointed by the Supervisory Board. In exercising its competencies and duties, the Committee also follows the ‘Recommendations for the functioning of the audit committees’ issued by the Office of the Polish Financial Supervision Authority.

In accordance with the Act and the By-law of the Audit Committee of the Supervisory Board of Grupa KĘTY S.A., the Audit Committee consists of at least three members, with the majority of the Audit Committee Members, including its Chairman, being independent members. The Audit Committee Members possess knowledge and qualifications in accounting or auditing financial statements.

1) In the period from 1 January 2023 to 31 December 2023, the Audit Committee was composed of:

• Mr Piotr Kaczmarek – Chairman of the Audit Committee,
• Mr Wojciech Golak,
• Mr Paweł Niedziółka,
• Mr Przemysław Rasz,
• Mr Piotr Stępniak,
• Ms Anna Włoszek.

To the date of preparing this report, the membership of the Audit Committee has not changed.

The independence of the particular Members of the Audit Committee, as well as their knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, have been described below.

Mr Piotr Kaczmarek – Chairman of the Audit Committee

Mr Piotr Kaczmarek fulfils the statutory independence criteria and possesses knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

Mr Piotr Kaczmarek is highly experienced in seating at Audit Committees of stock-listed companies, including as Chairman of the Audit Committees (Robyg S.A., Grupa KĘTY S.A., Ferro S.A., Harper Hygienics S.A, Erbud S.A., VRG S.A., Śnieżka S.A., Develia S.A.). He has also worked for more than a decade as a financial analyst, and was awarded the CFA (Chartered Financial Analyst) title and a securities broker licence.

Since 2017, Mr Piotr Kaczmarek has acted as a Member of the Supervisory Board of Grupa KĘTY S.A., which contributed to extending his knowledge of the sector in which the Company operates.

Mr Wojciech Golak – Member of the Audit Committee

Mr Wojciech Golak fulfils the statutory independence criteria and possesses knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

In the period from 2018 to 2022, Mr Wojciech Golak acted as a Member of the Audit Committee of ROBYG S.A. He completed a post-graduate course in banking run by the Collegium of Management and Finance of the SGH Warsaw School of Economics. He also acted as a representative and receiver of KBC Securities N.V. (joint stock company) Branch in Poland.

Mr Wojciech Golak has been acting as a Member of the Supervisory Board of Grupa KĘTY S.A. since 2020, which contributed to extending his knowledge of the sector in which the Company operates.

Mr Paweł Niedziółka – Member of the Committee

Mr Paweł Niedziółka fulfils the statutory independence criteria and possesses knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

Mr Paweł Niedziółka has 25 years of experience in risk analysis and management with regard to financing business companies, financial assessment of investment projects, structuring of bank financing, and cooperation with financial institutions and auditors. He heads the Financial Risk Management Department at the Institute of Banking of the SGH Warsaw School of Economics, and manages the Structural Financing Team at Bank Millennium S.A. (previously, he was associated with Credit Lyonnais Bank Polska and Bankgesellschaft Berlin). Mr Paweł Niedziółka has been acting as an expert at the Polish Agency for Enterprise Development (PARP), where he has assessed dozens of investment projects. He has also prepared several expert opinions for courts, mainly related to corporate loans valuation. Moreover, he is an author of scientific publications and textbooks devoted to investment projects assessment.

Mr Paweł Niedziółka has been acting as a Member of the Supervisory Board of Grupa Kęty S.A. since 2014, being at the same time a Member of the Audit Committee and the Nomination and Remuneration Committee, which contributed to extending his knowledge of the sector in which the Company operates.

Mr Piotr Stępniak – Member of the Audit Committee

Mr Piotr Stępniak fulfils the statutory independence criteria and possesses knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

He also sat at Supervisory Boards of a number of companies, including those listed at the stock exchange. He possesses theoretical expertise in accounting or financial audit within the meaning of Article 129.1 sentence two of the Act on Statutory Auditors, Audit Firms and Public Supervision. He studied accounting and obtained the degree of a Master of Science in Management (MSM) at the Purdue University in the USA. Moreover, he has a Double Major B.A. degree in Management and Economics with Financial Accounting and an Executive Master in Business Administration degree.

Mr Piotr Stępniak has been acting as a Member of the Supervisory Board of Grupa KĘTY S.A. since 2017, which contributed to extending his knowledge of the sector in which the Company operates.

Mr Przemysław Rasz – Member of the Audit Committee

Mr Przemysław Rasz fulfils the statutory independence criteria and possesses knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

Mr Przemysław Rasz has many years of experience of working at the supervisory bodies of Polish and foreign commercial and production companies, including as the owner’s representative. For more than twenty years, he has worked in Polish, European and American civil engineering companies dealing with production, trade and contract performance. He has also managed companies of the construction sector.

Mr Przemysław Rasz has been acting as a Member of the Supervisory Board of Grupa KĘTY S.A. since 2020, which contributed to extending his knowledge of the sector in which the Company operates.

Ms Anna Włoszek – Member of the Audit Committee

Ms Anna Włoszek fulfils the statutory independence criteria, possesses knowledge in the sector of Grupa KĘTY S.A. operation, and does not possess knowledge in accounting or auditing financial statements, as referred to in the Act on Statutory Auditors […].

Since the beginning of her career, Ms Anna Włoszek has occupied managerial positions at business companies and specialised in public procurement orders. Starting from 2019, she has been President of the Management Board of Agencja Rozwoju Małopolski Zachodniej S.A.

Mr Anna Włoszek has been acting as a Member of the Supervisory Board of Grupa KĘTY S.A. since 2022, which contributed to extending her knowledge of the sector in which the Company operates.

Information about the particular members of the Audit Committee of the Supervisory Board of Grupa KĘTY S.A., including their qualifications and experience, is also presented on the corporate website: https://grupakety.com/en/about-grupa-kety/about-us/company-governing-bodies/.

2) The principles of appointing the Audit Committee have been provided in § 10 of the  By-law of the Supervisory Board, available on the corporate website at: https://grupakety.com/en/investor-relations/corporate-governance/corporate-documents/.

The principles of operation and the detailed duties of the Audit Committee are determined in the By-law of the Audit Committee of the Supervisory Board of Grupa KĘTY S.A., available on the corporate website at: https://grupakety.com/en/investor-relations/corporate-governance/corporate-documents/.

The Audit Committee consists of at least three Members appointed by the Supervisory Board for its term of office from among its Members. The Committee Members appointed by the Supervisory Board elect one of them as the Chairman of the Committee. The Committee members receive monthly remuneration for the work on the Committee, in compliance with the Remuneration Policy. At least one Committee Member possesses knowledge and qualifications in accounting or auditing financial statements. Most of the Audit Committee Members, including the Chairman of the Committee, fulfil the independence criteria specified in Article 129.3 of the Act of 11 May 2017 on Statutory Auditors, Audit Companies and Public Supervision, as well as in ‘The Best Practice for GPW Listed Companies 2021’. The Audit Committee Members possess knowledge and qualifications related to the industry in which the Company operates. This condition is deemed fulfilled if at least one Committee Member has the knowledge and qualifications related to that industry, or individual Members – within certain areas – have the knowledge and qualifications related to that industry. A Committee Member may be dismissed from the Committee at any time by virtue of a Supervisory Board resolution.

The Committee meetings are opened and chaired by the Committee Chairman or in his absence by another Member of the Committee indicated by the Chairman. The Committee decisions are made in the form of resolutions. The resolutions are passed with an absolute majority of votes. In the event of an equal number of votes for and against a resolution, decisive is the vote of the Chairman, and in his absence – of the other person chairing the Committee meeting, as specified in § 9.1 of the Committee By-law. For the validity of the Committee resolutions proper invitation of all the Committee Members to the Committee meeting is required, or consent to holding a meeting of the Committee without formal convening, in accordance with § 8.7 of the Committee By-law, as well as the presence of at least half of the Committee Members at the Committee meeting. The Committee resolutions do not bound the Supervisory Board.

3) The tasks of the Audit Committee include supporting the Supervisory Board in the performance of its control and supervisory duties, as well as performance of tasks specified in the generally biding laws, and specifically as regards:

a) monitoring of the financial reporting process, which includes but is not limited to:

• verification of financial statements as to the correctness and completeness of the information provided therein;
• providing opinions on the principles of preparing financial statements and the accounting policy at the Company;
• analysing the reports on the audit of financial statements;

b) monitoring the effectiveness of internal control systems, risk management systems and internal audit, also with regard to financial reporting, which includes but is not limited to:

• assessment of the effectiveness of the particular elements of the systems, including those related to financial reporting and safety of the applied information technologies, and presenting recommendations in that regard to the Supervisory Board;
• analysis of the detected irregularities in the internal control systems and presentation of recommendations in that regard to the Supervisory Board;
• examining reports and recommendations issued by the external regulatory or control authorities, applicable to the compliance of the Company activities with the legal regulations as well as schedules of removing the irregularities detected;

c) monitoring the performance of financial audit activities, in particular carrying out of audits by an audit firm, taking into account any findings and conclusions of the Polish Agency of Audit Supervision arising from the audits carried out at an audit firm, which includes but is not limited to:

• recommending to the Supervisory Board the selection of an audit firm to carry out the audit or review of the Company financial statements;
• providing opinions on the proposed terms of contract with an audit firm with regard to carrying out the audit or review, including the value and limit of remuneration;
• assessing the type and scope of services ordered with an audit firm and the remuneration paid on that account, or other considerations for the benefit of the audit firm, with regard to the risk of a conflict of interest occurrence;
• presenting to the Supervisory Board the conclusions and recommendations resulting from the report on the audit of the financial statements of the Company prepared by an audit firm;
• expressing opinions regarding the activities undertaken by the Company Management Board in relation to the reservations to the financial statements reported by an audit firm or otherwise reported comments with regard to the correctness of the financial statements or the accounting principles of the Company;
• assessing and providing opinions with regard to the information provided by the audit firm performing the financial audit activities at the Company in reference to major issues related to the activities, including major irregularities in the internal audit system at the Company as refers to the financial reporting;

d) controlling and monitoring the independence of the statutory auditor and the audit firm;

e) informing the Supervisory Board about the audit results and explaining how the audit contributed to the fairness of the Company financial reporting, and about the role of the Committee in the auditing process;

f) assessing the independence of the statutory auditor and giving consent to the provision by them of the permitted non-audit services to the Company;

g) developing a policy of selection of an audit firm to carry out the audit of the Company financial statements;

h) developing a policy on the provision of the permitted non-audit services by the audit firm to carry out the audit, the entities related to that audit firm or a member of the audit firm’s network;

i) determining of the procedure of selection of an audit firm to carry out the audit of the Company financial statements;

j) presenting recommendations to the Supervisory Board with regard to the selection of an audit firm;

k) presenting recommendations to ensure the integrity of the Company financial reporting process;

l) preparing opinions within the competencies of the Supervisory Board, subject that the generally binding laws and the internal regulations of the Company permit that;

m) performing other tasks resulting from the generally binding laws or tasks entrusted by the Supervisory Board (which may by way of resolution entrust the Committee with the performance of activities other than those specified above, subject that it does not prejudice the generally binding laws).

4) As regards the Audit Committee, the majority of its members, including the Chairman must fulfil the criteria of independence set out in Article 129.3 of the Act on Statutory Auditors, and at least one member of the Audit Committee must possess knowledge and skills in accounting or auditing financial statements.

The Audit Committee Members must also have knowledge and qualifications related to the industry in which the Company operates. The condition is deemed to be fulfilled if at least one Committee Member has the knowledge and qualifications related to that industry, or individual Members – within certain areas – have the knowledge and qualifications related to that industry.

The following Members of the Audit Committee met or still meet the independence criteria referred to in Article 129.3 of the Act on Statutory Auditors: Mr Wojciech Golak, Mr Piotr Kaczmarek, Mr Paweł Niedziółka, Mr Przemysław Rasz, Mr Piotr Stępniak, and Ms Anna Włoszek.

The following Audit Committee Members possess knowledge and skills in accounting or auditing financial statements: Mr Wojciech Golak, Mr Piotr Kaczmarek, Mr Paweł Niedziółka, Mr Przemysław Rasz, Mr Piotr Stępniak. The knowledge and skills in the above scope were acquired by the Audit Committee Members by way of graduating from university courses in economics and related fields, post-graduate courses, speciality training and professional experience related to the fulfilment of functions in governing and supervisory bodies of capital companies (which also included acting as a Chairman or Member of at the Audit Committees of the bodies). All Members of the Audit Committee Members have knowledge and qualifications in the industry in which the Company operates: Mr Wojciech Golak, Mr Piotr Kaczmarek, Mr Paweł Niedziółka, Mr Przemysław Rasz, Mr Piotr Stępniak, and Ms Anna Włoszek.

In 2023, the Audit Committee held 8 meetings, in which 6 resolutions were passed. Additionally, outside of the meetings, in the voting ordered by the Chairman of the Committee through the means of direct remote communication, one resolution was passed.

The Audit Committee Members maintained standing contacts with the Company. Moreover, there were held meetings and consultations outside of the formal sessions. The Audit Committee meetings were attended – apart from the Committee Members – by the invited guests: the Management Board Member/Financial Director, Internal Audit Director, Compliance Director, President of the Management Board of Dekret Centrum Rachunkowe, the representatives of the E&Y audit firm, and the invited employees of the Company. In addition to plenary meetings, the Audit Committee Members also held consultations as part of the Committee’s ongoing work.

5) The main topics of the Audit Committee in 2023 included:

• detailed analysis of the draft separate and consolidated financial statements, as part of the public disclosure in the form of the Company interim reports, obtaining from the Management Board of additional information and explanations regarding the statements, and identification of the necessity for any correction, additional explanations or comments;
• monitoring the scope, course and methods of work of the audit form in relation to the audit of separate and consolidated financial statements of the Company, and audit of the financial statements of the selected subsidiaries of Grupa KĘTY S.A. for 2022, and also the review interim condensed separate and consolidated financial statements of the Company, and review of consolidation packages of the selected subsidiaries of Grupa KĘTY S.A. for the first half of 2023;
• monitoring the scope, course and methods of work of the audit firm in relation to the audit of the separate financial statements of Grupa KĘTY S.A. for the year ended 31 December 2022, and consolidated financial statements of the Capital Group of Grupa KĘTY S.A. for the year ended 31 December 2022, as well as audit of the financial statements of the selected subsidiaries of Grupa KĘTY S.A. for the year ended 31 December 2022, and also review of interim condensed separate and consolidated financial statements of the Company, and review of consolidation packages of the selected subsidiaries of Grupa KĘTY S.A. for the first half of 2023;
• confirmation of the independence of the audit firm, the audit team and the statutory auditors delegated to carry out the audit of the financial statements of the Company for 2022 and the report on the operations of the Company and the Capital Group of Grupa KĘTY S.A. in 2022, and review of interim condensed financial statements of the Company for 6 months ending 30 June 2023, and review of the report on the operations of the Capital Group in the first half of 2023;
• receipt from the audit firm of the independence declaration, as well as information on the possible circumstances which may result in an inability to carry out the audit of the Company financial statements;
• analysis the results of the audit of the financial statements of the Company for 2022, and issue based thereon of a recommendation for the Supervisory Board of the Company with regard to acceptance of a positive opinion on the audit of the aforesaid financial statements, and a recommendation regarding the request of the Supervisory Board to the Annual General Meeting to approve the statements;
• passing a resolution on amending and adoption of consolidated test of the ‘Policy of Grupa KĘTY S.A. with regard to the selection of and cooperation with an audit firm responsible for carrying out the statutory audit of financial statements’;
• analysis of the findings from an inspection carried out by an external company within the ordered ‘Fire safety’ audit task, as well as analysis of the report on the status of implementation of the recommendations issued within the ‘Fire safety audit at the Capital Group of Grupa KĘTY S.A.’;
• analysis of the results of the audit task entitled ‘Monitoring of recommendations from the external cyber security audit’;
• analysis of conclusions and recommendations of the audit entitled ‘Independent assessment of the internal audit function at Grupa KĘTY S.A.’;
• analysis of the report on monitoring the market of services provided by statutory auditors and audit firms in 2022;
• discussion on the letter of the auditor to the Management Board of Grupa KĘTY S.A. post the audit of the 2022 annual financial statements;
• passing of a resolution with regard to the opinion on the draft contents of the updated Internal Audit Rules and submission of the same to the Supervisory Board;
• acceptance of the information regarding major processes outsourced at Grupa KĘTY S.A.;
• monitoring the manner of the compliance function performance at the Capital Group of Grupa KĘTY S.A. in 2023;
• review of ESG reporting and practices of communication with investors;
• passing of resolutions concerning the work plan of the Audit Committee for the year 2024;
• cooperation and monitoring of the internal audit function within the Company organisational structure, and in particular:
  • issue of an opinion on the drafted ‘Annual Audit Plan for 2024’,
  • issue of opinion on the update of the Internal Audit Rules of Grupa KĘTY S.A.,
  • analysis of the annual Report on Internal Audit Activities in 2022 and semi-annual Report on Internal Audit Activities in 2023,
  • discussion of the post-audit conclusions and recommendations;

The detailed methods of the Audit Committee operation are determined in the Company Articles and the By-law of the Audit Committee of the Supervisory Board of Grupa KĘTY S.A., passed by the Supervisory Board, available on the corporate website at: https://grupakety.com/en/investor-relations/corporate-governance/corporate-documents/.

The Policy of Grupa KĘTY S.A. with regard to the selection of and cooperation with an audit firm responsible for carrying out the statutory audit of financial statements, and the Policy with regard to providing the permitted non-audit services by the audit firm carrying out the audit, the entities related to that audit firm or a member of the audit firm’s network

In accordance with the applicable law, Grupa KĘTY S.A. has its separate and consolidated financial statements reviewed and audited by an audit firm. The selection of an entity authorised to audit the Company financial statements should be carried out on the basis of the following principles.

• The entity authorised to audit the financial statements shall be selected in a tender procedure by the Supervisory Board of Grupa KĘTY S.A. The decision on the selection is taken in the form of a resolution of the Supervisory Board.
• When selecting a firm authorised to audit the financial statements, the Supervisory Board of Grupa KĘTY S.A. follows the binding Policy and Procedure of an audit firm selection.
• When selecting the entity authorised to audit the financial statements, the Supervisory Board of Grupa KĘTY S.A. focuses on the prior experience of the audit firm in auditing financial statements of companies with the profile of operation similar to those of the Grupa KĘTY S.A. Capital Group.
• The selection is made taking into account the principles of impartiality and independence of the audit firm as well as analysis of the projects carried out by the firm at the Company, going beyond the audit of the financial statements, in order to avoid a conflict of interest (preserving impartiality and independence).

The policy and procedure of Grupa KĘTY S.A. with regard to the selection of an audit firm to carry out the audit of statutory financial statements are available on the corporate website at: https://grupakety.com/en/investor-relations/corporate-governance/policies/.

Main assumptions of the policy on the provision of permitted non-audit services by the audit firm carrying out the audit, the entities related to that audit firm or a member of the audit firm’s network

1. The Company does not order any prohibited non-audit services in the following periods:
   • in the period from the commencement of the respective audited period to the issue of the audit report; and
   • in the reporting year directly preceding the period referred to in letter a), in reference to the services listed in Section 3 letter e).
2. The Company may order non-audit services, other than the prohibited non-audit services, subject to their approval by the Audit Committee and after carrying out of the respective assessment of threats and assuring independence in compliance with Article 22b of Directive 2006/43/EC.
3. Prohibited non-audit services are understood to be the services listed below, in accordance with the Regulation (EU) No 537/2014 of the European Parliament and of the Council:
   1. tax services relating to:
      • preparation of tax forms;
      • payroll tax;
      • customs duties;
      • identification of public subsidies and tax incentives unless support from the statutory auditor or the audit firm in respect of such services is required by law;
      • support regarding tax inspections by tax authorities unless support from the statutory auditor or the audit firm in respect of such inspections is required by law;
      • calculation of direct and indirect tax and deferred tax;
      • provision of tax advice;
   2. services that involve playing any part in the management or decision-making of the audited entity;
   3. bookkeeping and preparing accounting records and financial statements;
   4. payroll services;
   5. designing and implementing internal control or risk management procedures related to the preparation and/or control of financial information or designing and implementing financial information technology systems;
   6. valuation services, including valuations performed in connection with actuarial services or litigation support services;
   7. legal services, with respect to:
      • the provision of general counsel;
      • negotiating on behalf of the audited entity; and
      • acting in an advocacy role in the resolution of litigation;
   8. services related to the audited entity’s internal audit function;
   9. services linked to the financing, capital structure and allocation, and investment strategy of the audited entity, except providing assurance services in relation to the financial statements, such as the issuing of comfort letters in connection with prospectuses issued by the audited entity;
   10. promoting, dealing in, or underwriting shares in the audited entity;
   11. human resources services, with respect to:
       • management in a position to exert significant influence over the preparation of the accounting records or financial statements which are the subject of the statutory audit, where such services involve:
         • searching for or seeking out candidates for such position; or
         • undertaking reference checks of candidates for such positions;
       • structuring the organisation design; and
       • cost control.

The policy of Grupa KĘTY S.A. with regard to providing the permitted non-audit services by the audit firm carrying out the audit, by entities related to that audit firm and by a member of the audit firm’s network is available on the corporate website at: https://grupakety.com/en/investor-relations/corporate-governance/policies/.

 

The Remuneration Committee of Grupa KĘTY S.A. was established by way of Resolution of the Supervisory Board of 19 May 2005. The Supervisory Board of Grupa KĘTY S.A., by way of Resolution of 5 June 2019, changed the name of the Remuneration Committee into the Nomination and Remuneration Committee (‘N&RC’) and passed the Committee By-law. The main competencies of the Nomination and Remuneration Committee include the control and supervision of the system of remuneration of the Management Board of Grupa KĘTY S.A., presenting recommendations to the Supervisory Board in reference to a candidate or candidates to act as the Management Board Members, as well as instigation and carrying out recruitment procedures with the aim to find candidates to act as the Management Board Members.

Nomination and Remuneration Committee Membership:

1) In the period from 1 January 2023 to 31 December 2023, the Nomination and Remuneration Committee was composed of:

• Mr Piotr Stępniak – Chairman of the Nomination and Remuneration Committee
• Pan Wojciech Golak,
• Mr Piotr Kaczmarek,
• Mr Paweł Niedziółka,
• Mr Przemysław Rasz,
• Ms Anna Włoszek.

To the date of preparing this report, the membership of the Nomination and Remuneration Committee has not changed.

2) The basis for appointing the Nomination and Remuneration Committee have been provided in § 10 of the  By‑law of the Supervisory Board, available on the corporate website at: https://grupakety.com/en/investor-relations/corporate-governance/corporate-documents/.

3) The principles of operation and the detailed duties of the Nomination and Remuneration Committee are determined in the By-law of the Nomination and Remuneration Committee of the Supervisory Board of Grupa KĘTY S.A., available on the Company’s corporate website at: https://grupakety.com/en/investor-relations/corporate-governance/corporate-documents/.

4) The tasks of the Committee include supporting the Supervisory Board in the performance of its control and supervisory duties, as well as performance of tasks specified in the generally biding laws, and specifically as regards:

a) nominations of the Management Board Members:

• carrying out recruitment procedures with the aim to find candidates to act as the Management Board Members;
• presenting recommendations to the Supervisory Board in reference to a candidate or candidates to act as the Management Board Members;
• presenting recommendations to the Supervisory Board in reference to the structure, size and membership of the Management Board.

b) remuneration:

• analysing the Management Board Members’ remuneration system, which includes analysing all components of the remuneration due and paid to the Management Board Members, as well as carrying out a comparative analysis in reference to other entities operating on the market of similar scale and profile of operation (if available), and presenting recommendations in that regard to the Supervisory Board;
• if the General Meeting authorises the Supervisory Board to specify the elements of the Remuneration Policy with more detail in accordance with the binding laws – presenting recommendations and proposals of the detailed scope to the Supervisory Board;
• presenting recommendations and proposals to the Supervisory Board in reference to the data and information included in the annual report on remuneration prepared by the Supervisory Board in accordance with the applicable laws;
• presenting recommendations and proposals to the Supervisory Board in reference to amending the Remuneration Policy or the principles of remuneration and the terms of employment specified for the particular Management Board Members;
• if the Company has implemented an incentive scheme (e.g. Management Options Plan) – carrying out an analysis and presenting recommendations and proposals to the Supervisory Board in reference to the scheme assumptions and terms.

In 2023, the Nomination and Remuneration Committee held 6 meetings, in which 7 resolutions were passed. Additionally, outside of the meetings, in the voting ordered by the Chairman of the Nomination and Remuneration Committee through the means of direct remote communication, 5 resolutions were passed. Moreover, the Nomination and Remuneration Committee held four meetings within the recruitment procedure for the possible extension of the membership of the Management Board, in which the potential candidates participated. Within the same process there were held meetings with the representatives of a recruitment agency.

The Nomination and Remuneration Committee Members maintained standing contacts with the Company. The Nomination and Remuneration Committee meetings were attended – apart from the Committee Members – by the invited guests: the Management Board Member/Financial Director, the representatives of the recruitment companies, and other invited employees of the Company. In addition to plenary meetings, the Nomination and Remuneration Committee Members also held consultations as part of the Committee’s ongoing work.

5) The main topics of the Nomination and Remuneration Committee in 2023 included:

• discussion the 2023 bonus plan for the Management Board Members;
• update and amendment of the basic remuneration principles and determination of the incentive principles for the Management Board of Grupa KĘTY S.A. for 2023, including:
  • determination of financial criteria for the particular Management Board Members depending on the growth rate of EBITDA and net profit results of the particular operating segments, and/or consolidate results;
  • determination of bonus criteria for the Management Board Members on account of personal goals attainment;
  • determination of bonus criteria for the Management Board Members on account of non-financial goals attainment;

• verification of the calculation of the annual incentive for the Members of the Management Board of Grupa KĘTY S.A. for 2022 and submission of the related recommendation to the Supervisory Board;
• recommendation to the Supervisory Board of the adoption of the Report on Remuneration of the Management Board and Supervisory Board Members of Grupa KĘTY S.A. for the year 2022;
• recommendation to the Supervisory Board of the amendment to the Rules of the Management Options Plan Performance at Grupa KĘTY S.A. with its registered office in Kęty in the years 2020–2028, and recommendation to the Supervisory Board of the approval of the detailed terms of issue of N, O and P series bonds with the pre-emptive right to take up I series shares, as well as the contents of proposal to acquire the bonds;
• support of the Supervisory Board in the recruitment process for the function of the Vice President of the Management Board;
• recommendation to the Supervisory Board of appointment as at 1 January 2024 of Mr Roman Przybylski Member of the Company Management Board, acting as Vice President of the Management board, and positive assessment of the proposed employment conditions;
• acceptance of the report on the recruitment procedure for the position of the Director for Investments and Development, acting as Vice President of the Management Board of Grupa KĘTY S.A.

Competences of the Nomination and Remuneration Committee and information on the method of the Committee appointment and operation

The Committee consists of at least three Members appointed for the term of the Supervisory Board. The Committee Members are appointed by virtue of a resolution passed by the Supervisory Board, from among the Supervisory Board Members, and perform their functions until their resignation has been accepted or until their dismissal, in accordance with the appointment procedure. The Committee appoints a Chairman of the Committee from among the Committee Members, by way of a resolution. The Committee members receive monthly remuneration for the work on the Committee, in compliance with the Remuneration Policy.

The Committee meetings are opened and chaired by the Committee Chairman or in his absence by another Member of the Committee indicated by the Chairman. The Committee decisions are made in the form of resolutions. The resolutions are passed with an absolute majority of votes. In the event of an equal number of votes for and against a resolution, decisive is the vote of the Committee Chairman, and in his absence – of the other person chairing the Committee meeting, as specified in § 7.1 of the Committee By-law. For the validity of the Committee resolutions passed at the Committee meeting, proper invitation of all of the Committee members to the Committee meeting is required, or consent to holding a meeting of the Committee without formal convening, in accordance with § 6.7 of the Committee By-law, as well as presence of at least half of the Committee members at the meeting. The Committee resolutions do not bind the Supervisory Board.

The detailed methods of the Nomination and Remuneration Committee operation are determined in the Company Articles and the Nomination and Remuneration Committee By-law passed of the Supervisory Board, which are available on the corporate website at: https://grupakety.com/en/investor-relations/corporate-governance/corporate-documents/.