Capital Park S.A. — Governance Information 2023

Jun 2, 2023

APPENDIX NO. 2 TO THE RESOLUTION OF THE SUPERVISORY BOARD OF THE COMPANY

2 roku dla Zwyczajnego Walnego Zgromadzenia Capital Park S.A. w Warszawie

Report on the Supervisory Board's operations in 2022, to be presented to the Annual General Meeting of Capital Park S.A. of Warsaw

I.

2 Warszawie (dalej: e osoby:

Carey FLAHERTY Kimberly ADAMEK Katarzyna ISHIKAWA Steffen Meinshausen Jonathan

13.01.2022 r. - 13.01.2022 r. -

Jonathan

2

Komitet Audytu

• mitetu Audytu);
• 2

• 3) Jonathan . 1

• 2 ;

• 3) Jonathan . Komitet Inwestycyjny

• 1)

• 2)
• 3) Steffen Meinshausen

13.01.2022 r.

13.01.2022 r.

i umiej tno ci w zakresie rachunkowo ci.

• 1)
• 2)
• 3)
• 4) monitorowanie wykon
• 5)
• 6) rekomendowanie Radzie Nadzorczej firmy audytorskiej uprawnionej do przeprowadzenia

a ponadto:

• a) przedstawianie Radzie Nadzorczej opinii na ich temat;
• b)

W 2022 roku rewidentach, firmach audytorskich oraz nadzorze publicznym.

W 2022 4 posiedzenia.

Europejskiej (2005/162/WE) z dnia 15 .

W 2022 1 . Do

• a) przez
• b) oraz
• c)
• d)
• e)
• f)

(a) Za uznania.

co najmniej zie Nadzorczej.

• a)
• b)
• c)
• d)
• e)
• f)

W 2022 zgodnie z zakresem kompetencji.

w Rady Nadzorczej.

W 2022 4 posiedzenia. W 2022 18

Rada Nadzorcza w roku 2022 i oraz weryfikacji i

W ramach swoich 1 rupy 1 29 czerwca 2022 zadysponowania zyskiem 1.

Ra

2

Nadzorczej.

2

II. 2 informacyjnych

• 1) finansowych do zorganizowanego systemu obrotu oraz o r. poz. 623 z zm.);
• 2)
• 3)
• 4) isji 2003/124/WE, 2003/125/WE i 2004/72/WE.

W 2022 4

W 2022 o opublikowanych 17 rapor ych informacje

-

• transakcji
• lata 2022, 2023, 2024,
• zawrcia aneksu do umowy kredytowej p
• za 2022 r.
• r.
• poczet dywidendy za 2022 r.

2022

i jej struktur.

informacyjnychi pozytywnie ocenia ich

III. Ocena

W 2022 roku DPSN

1/2021 z dnia 29 Informacji o stanie stosowania internetowej www.capitalpark.pl, 17 z wszystkich 66 zasad Dobrych Praktyk 2021. Informacja o DPSN2021

korporacyjnego w 2022 r.

Rada Nadzorcza nie stosowania

. Rada Nadzorcza pozytywnie ocenia .

IV. 2 roku

2 2.11.3. 2021 ortowania

. w dniu 23.03.2023 r. oceny sprawozdania 2:

Rada 2 rok oraz 2022 rok:

• 1.
• 1. 2022 rok.

Rada Nadzorcza stwierdz 2 roku rzetelnie przedstawia stanem faktycznym.

2 rok.

23.03.2023 oceny sprawozdania 2:

2 rok przedstawionymi przez audytora PricewaterhouseCoopers Polska Sp. z o.o. Audyt Sp. k. wynikami 2

2022.

2:

Rada Nadzorcza w uchwale z dnia 23.03.2023 2 PricewaterhouseCoopers Polska Sp. z o.o. Audyt Sp. k. wynikami przeprowadzonego badania i 2 rok:

• 1.
• 1. jest zgodne z informacjami zawartymi w skonsolidowanym sprawozdaniu finansowym Grupy 2 rok.

Rad 2022 anem faktycznym.

2 rok.

apital Park S.A. za 2022 PricewaterhouseCoopers Polska Sp. z o.o. Audyt Sp.k. wynikami przeprowadzonego badania i za rok 2022 faktycznym.

2 rok.

Przedstawiciele firmy audytorskiej uczestniczyli w posiedzeniu Rady Nadzorczej oraz Komitetu Audytu w dniu 21 marca 2023 r. W trakcie posiedzenia przedstawiciele firmy audytorskiej przedstawili wyniki badania za 2022 r. oraz udzielali

2 stycznia 2022 roku do 31 grudnia 2022 inwestycyjne.

w 2022 roku:

2 roku Grupa

Kluczowe zdarzenia w 2022 roku:

• owany wielofunkcyjny projekt
• kredytu budowlanego w Banku Pekao S.A. oraz Europejskim Banku Inwestycyjnym (EIB) zgodnie z harmonogramem i stopniem zaawansowania budowy Fabryki Norblina Bank Pekao SA i EIB na kredyt inwestycyjny udzielony ArtN sp. z
• 66,5 mln EUR.

. ytorium

Ekonomiczne skutki konfliktu w Ukrainie

• o
• o bardziej
• o procentowe,
• o

oczej i tarcia handlowe.

• o
• o
• o pogorszeni inwestycyjnych,

• o perspektywie

• o zdywersyfikowana baza formacie mixed-use,

• o
• o finansowania,
• o
• o

a celu minimalizacje aktualnym konfliktem zbrojnym.

• 1)
• 2)
• 3)
• 4)
• 5)

• 6)

• 7) Ryzyka utraty motywacji (s

• 8)
• 9)
• 10) Ubezpieczenia;
• 11) inwestycyjnych (w trakcie realizacji);
• 12) -line);
• 13)
• 14)
• 15)
• 16)
• 17)
• 18)
• 19) Monitoringu rozwoju;
• 20)

W odniesieniu do 2022

2

1)

• finansowych do zorganizowaneg r. poz. 523 ze zm.);
• 2) uzn
• 3)
• 4) ego i Rady i dyrektywy Komisji 2003/124/WE, 2003/125/WE i 2004/72/WE.

2 pa

V.

na zawodowych itp.

Zestawienie zawiera w 2022 roku

• 1. w zakresie wspierania kultury:
  2. Fabryki Norblina

022 roku ;

• 1. w zakresie wspierania instytucji charytatywnych:

  - warszawskich hoteli

  - Pomocy 2022

;

• 3.
  -
  -
  -
  -
  -

56 775,96 .

elemen

Rada Nadzorcza pozytywnie oceni

VI. 1 KSH:

r., stosownie do art. 382(2) KSH (doradca rady nadzorczej).

VII. ______________________________ Report on the Supervisory Board's operations in 2022, to be presented to the Annual General

Meeting of Capital Park S.A. of Warsaw

I. The operations of the Supervisory Board and its Committees:

As at 31 December 2022, the Supervisory Board of Company") was composed of the following persons:

Carey FLAHERTY - Chairman of the Supervisory Board Kimberly ADAMEK Supervisory Board Member - Supervisory Board Member Katarzyna ISHIKAWA - Supervisory Board Member Steffen MEINSHAUSEN - Supervisory Board Member - Supervisory Board Member

In 2022 there were following changes on the Supervisory Board

• On January 13th 2022, Derek Jackobson was removed,
• On January 13, 2022, Steffen Meinshausen was appointed.

In accordance with the statements submitted to the Supervisory Board, two members of the Supervisory Supervisory Board, there are no circumstances which could impair the fulfillment of criteria of independence of these persons and therefore, in the opinion of the Supervisory Board, the criterion of independence has been met.

The following committees operated as part of the Company's Supervisory Board during financial year 2022:

Audit Committee

2) Kimberly Adamek (Audit Committee member);

).

Remuneration Committee

1) Kimberly Adamek (Remuneration Committee member);

3

Investment Committee

1) Carey Flaherty (Chairman of the Investment Committee);

2) Kimberly Adamek (Investment Committee member);

4) Steffen Meinshausen (Investment Committee member).

During 2022, the following changes occurred to the composition of the Investment Committee:

1) Derek Jacobson was removed effective 13-01-2022;

2) Steffen Meinshausen was appointed with effect from 13-01-2022.

The Audit Committee has been appointed under Article 128 of Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Supervision. Most of the Members of the Audit Committee, including the Chairman of the Audit Committee, are independent of the Company. The members of the Audit Committee have knowledge and skills in the industry in which the Company operates. The Audit Committee is composed of two members having knowledge and skills in accounting.

The tasks of the Audit Committee include in particular:

1) supervising the organizational unit handling the internal audit;

2) monitoring the financial reporting process;

3) monitoring the effectiveness of the internal control, internal audit and risk management systems;

4) monitoring performance of financial audit activities;

5) monitoring the independence of the statutory auditor and the audit firm authorized to audit financial statements, in particular in case that services other than financial audit are provided to the Company;

6) recommending to the Supervisory Board an auditors firm authorized to audit financial statements and to perform the financial audit of the Company;

and also:

(a) reviewing the Company's financial statements and providing the Supervisory Board with an opinion on them;

b) reviewing transactions with related entities.

In 2022, the members of the Audit Committee met the criteria of independence within the meaning of Article 129(3) and (4) of the Act on Statutory Auditors, Audit Firms and Public Supervision.

In 2022, the Audit Committee held 4 meetings.

With respect to the tasks and operation of the Remuneration Committee, Appendix I to the European Commission Recommendation (2005/162/EC) of 15 February 2005 on the role of non-executive directors applies.

In 2022, the Remuneration Committee passed 1 resolution.

The duties of the Investment Committee are to consult and consider, in particular the following:

• (a) proposed investments and acquisitions of the assets of the Company's Group, in particular the proposed budgets and projects and any documentation prepared in connection with the Board's assessment of a proposed project;
• b) ongoing investments of the Company's Capital Group, including information on the progress of construction works and/or lease, rental or disposal of real estate;
• (c) all financial and legal documentation related to the investment projects of the Capital Group of the Company, including, in particular, loan agreements with banks, investment agreements, property development agreements, and lease/tenancy agreements;
• (d) selection of individuals for senior executive positions, including department heads;
• (e) overseeing the capital expenditures of the Company's Capital Group;
• (f) preparing monthly management reports on the Company.

The Investment Committee shall meet with the Management Board Members at least once a month and as needed, shall receive for consideration at least the materials referred to in (a) - (f), and shall have the right to request a meeting with the Management Board Members at its discretion. In addition, the Management Board shall meet with the Investment Committee Members as needed, and the Board and the Investment Committee shall have the right to request a joint meeting at their discretion.

The Investment Committee shall receive monthly management reports and draft reports on all material events that have occurred in the Company's business at least one week in advance of their submission to the Management Board. In addition, the Investment Committee shall receive draft business plans of the Company or any amendments to such business plans at least one week in advance of their submission to the Supervisory Board.

The Investment Committee shall consider draft terms and conditions of all transactions and legal actions, including in particular:

• (a) entering into or amending agreements or contracts;
• (b) making unilateral declarations;
• (c) incurring liabilities;

(d) disposing of and acquiring assets;

(e) incurring costs or committing to incur costs; or

(f) other significant acts,

with value exceeding EUR 1,000,000.00 (one million euro) exclusive of VAT, calculated in the

In 2022, the Investment Committee took actions in accordance with the scope of their competence.

The Company's Supervisory Board conducts its operations on the basis of the applicable laws, including in particular the Commercial Companies Code, and in accordance with the provisions of the Company's Articles of Association. The manner of operation of the Company's Supervisory Board has been specified by the provisions of the Company's Articles of Association and the Rules of Procedure of the Supervisory Board.

In 2022, the Supervisory Board held 4 meetings and adopted 18 resolutions.

In 2022, the Supervisory Board fulfilled its basic tasks in accordance with the requirements stipulated in the Commercial Companies Code i.e. exercised ongoing supervision over the Company's activity, in particular monitored and assessed the current financial results of the Company and the cost structure, of financing for subsidiaries, agreements with Members of the Management Board of the Company, and also analysed the ways the Company's strategy was being implemented.

As part of its basic powers under the Commercial Companies Code and the Company's Articles of Association, the Supervisory Board assessed, inter alia, the Management Board's reports on the activities of the Company and the Company's Group in financial year 2021 and the financial statements 1 with respect to their consistency with the accounting books, documents and facts. As a result of such assessment, while also taking into recommended to the Ordinary General Meeting of Shareholders of the Company held on June 29, 2022 to approve these statements and the application of the Management Board concerning the disposal of profit of the Company for the financial year 2021.

The Supervisory Board assessed the situation of the Company and the manner in which the Company fulfilled its disclosure obligations in terms of compliance with the principles of corporate governance, as defined in the [WSE] stock exchange regulations and the regulations applicable to provision of the current and periodic information by issuers of securities. In their assessments, the Supervisory Board did not raise any objections.

The members of the Company's Supervisory Board performing their duties in 2022 had the required educational background and professional experience, in particular in the field of supervision of companies. Members of the Company's Supervisory Board also devoted the necessary amount of time to performing their functions in the Supervisory Board properly.

Members of the Supervisory Board do not raise any objections as to the performance of their tasks and the functioning of the Supervisory Board.

In view of the above, the activities of the Supervisory Board in 2022 may be assessed as compliant with the legal status in force.

II. Assessment of the method in which Capital Park S.A. fulfilled their information obligations in 2022

The Company fulfils its disclosure obligations based on the provisions of:

1) Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organised Trading, and Public Companies of 29 July 2005 (Journal of Laws of 2019, item 623, as amended);

2) Regulation of the Minister of Finance of 29 March 2018 on current and periodic information provided by issuers of securities and the conditions for recognising as equivalent the information required by the laws of a non-member state (Journal of Laws 2018, item 757);

3) Rules and Regulations of the Warsaw Stock Exchange in connection with the performance of the information obligation as provided in the "Good Practices of the WSE Listed Companies"; 4) Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation), also repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.

The Supervisory Board assesses that as part of fulfilling its disclosure obligations, the Company publishes current reports and, interim reports within the declared time limits the scopes and publication periods of which arise from the aforementioned regulations.

In 2022, the Company published the following 4 types of reports: annual, semi-annual and quarterly reports.

In 2022, the Company published 17 current reports, in which the Company provided material information concerning, among others:

• dates of publication of interim reports;
• changes in the panels of the Company's Supervisory Board;
• convocation of the Ordinary General Meeting of Shareholders of the Company, the resolutions proposed to and adopted at the General Meeting of Shareholders of the Company together with the voting results,
• information about transaction in shares in the Company,
• recommendation of the Management Board regarding the payment of dividend,
• adopting a resolution on the payment of dividends,
• selection of an audit firm to review and audit financial statements for the years 2022, 2023, 2024,
• conclusion of an annex to the loan agreement by a subsidiary
• preliminary decision of the Management Board of Capital Park S.A. about the intention to pay an advance on the dividend for 2022. - adoption by the Management Board of a conditional resolution on the payment of an interim
• dividend for 2022.
• adoption by the Company's Supervisory Board of a resolution on consent to the payment of an advance on the dividend for 2022.

In addition, the Company publishes reports with the scope and contents arising from the "Best Practices of the WSE Listed Companies" which the Company adheres to.

Following their due analysis, the Supervisory Board of the Company has assessed that the reports published by the Company in 2022 were consistent with the facts, and the explanations provided by the Management Board of the Company concerning the instances of departure from the application of the corporate governance principles were sufficient.

The Company maintains its own website through which information resulting from the application of the aforementioned rules and regulations as well as information on the Company's operations and its structures is published.

The Company's Supervisory Board has not raised any reservations regarding fulfilment, by the Company, of its information obligations and positively assessed the performance of the above obligations.

III. Assessment of the application of the corporate governance by the Company

In 2022, the Company was bound by a Practices of WSE Listed Companies 2021" ("DPSN2021") adopted by Resolution No. 13/1834/2021 of the Supervisory Board of the Warsaw Stock Exchange of 29 March 2021 is binding for the Company.

In accordance with EBI Report 1/2021 of 29 July 2021 on the status of application of the 2021 Best Practices, which was also published on website: www.capitalpark.pl, the Company has not applied 17 out of all 66 principles of the 2021 Best Practices. Information on the status of application of the DPSN2021 was also included in the Company's annual report and consolidated annual report for 2021,

The Supervisory Board has reviewed the statement of the Company's Management Board on the application of the rules of corporate governance in 2022.

The Supervisory Board has not ascertained any violations in the application of the corporate governance rules by the Company within the scope declared by the Company.

The Supervisory Board has positively assessed the status of application of the corporate governance rules by the Company.

IV. Supervisory Board's Assessment of the standing of CAPITAL PARK S.A. in 2022

The assessment of CAPITAL PARK S.A.'s standing in 2022 was prepared in accordance with Rule No. 2.11.3 of the "Code of Best Practice for the WSE Listed Companies 2021", which provides the basis for the Supervisory Board to prepare an assessment of the Company's standing on a consolidated basis, including an assessment of its system of internal control, risk management, compliance and the internal audit function, together with information on the activities undertaken by the Supervisory Board in order to carry out the assessment; in particular the assessment covers all material mechanisms of control, in particular those concerning reporting and the operating activity and Art. 382.3(1) of the Commercial Companies Code.

On 23.03.2023, the Company s Supervisory Board adopted resolutions to accept the assessment of the Management Board s report on the Company s operating activity for the year 2022:

The Supervisory Board assessed the Management Board s report on the Company s operating activity for 2022 on the Company s operating activity for 2022:

1. has been prepared in compliance with Article 49 of the Accounting Act of 29 September 1994

2. was consistent with the information contained in the Company s non-consolidated financial statements for 2022.

The Supervisory Board concluded that the report on the Company's operating activity in 2022 fairly presented the business and financial situation of the Company and was consistent with the books of account and the documents as well as with the actual state of affairs.

In view of the above, the Supervisory Board positively assessed the Management Board's report on the Company's operating activity for 2022.

On 23.03.2023, the Supervisory Board of the Company adopted resolutions to accept the assessment of the Company's financial statements for 2022:

The Supervisory Board assessed the Company s financial statements for 2022 and took note of the Audyt Sp. k. and stated that the Company s 2022 financial statements were prepared in all material respects in compliance with the International Financial Reporting Standards and with the accounting books and records as well as with the facts.

As a result, the Supervisory Board has positively assessed the Company s financial statements for 2022.

Assessment of the report on the operating activity of the Capital Group of Capital Park S.A. for 2022:

In its resolution of 23.03.2023, the Supervisory Board assessed the report on the operating activity of the Capital Group of Capital Park S.A. for 2022 and reviewed the results of the audit presented by auditor PricewaterhouseCoopers Polska Sp. z o.o. Audyt Sp. k. and stated that the report on the operating activity of the Capital Group of Capital Park S.A. for 2022:

71 of the Regulation;

1. was consistent with the information contained in the consolidated financial statements of the Capital Group of Capital Park S.A. for 2022.

The Supervisory Board concluded that the report on the operating activity of the Capital Group of Capital Park S.A. in 2022 fairly presented the business and financial situation of the Capital Group of Capital Park S.A. and was compliant with the accounting books and records as well as the facts.

In view of the above, the Supervisory Board positively assessed the report on the operating activity of the Capital Group of Capital Park S.A. for 2022.

The Supervisory Board also assessed the consolidated financial statements of the Capital Group of Capital Park S.A. for 2022 and took note of the re PricewaterhouseCoopers Polska Sp. z o.o. Audyt Sp.k. and stated that the consolidated financial statements of the Capital Group of Capital Park S.A. for 2022 were prepared in all material respects in compliance with the International Financial Reporting Standards and with the accounting books and records and the facts.

In view of the above, the Supervisory Board has positively assessed the consolidated financial statements of the Capital Group of Capital Park S.A. for 2022.

Representatives of the audit firm participated in the meeting of the Supervisory Board and the Audit Committee on March, 21 2023. During the meeting, they presented the results of the audit for 2022 and answered questions from members of the Supervisory Board.

In year ended 31 December 2022, Capital Park S.A. carried out tasks related to its core business, i.e. financial holding activities. In the period from 1 January 2022 to 31 December 2022 the companies of the Capital Group of Capital Park S.A. continued the activities they had launched in the previous years and implemented newly launched investment projects

Events materially affecting the operating activity of the Capital Group of Capital Park S.A. in 2022

As of December 31, 2022, the Capital Group of Capital Park S.A. did not have any developers project underway.

Key events in 2022:

• The company paid dividends twice, i.e. on July 21, 2022, a dividend of PLN 46.5 million and on November 24, 2022, an advance payment towards the dividend for 2022 in the amount of PLN 60.7 million.
• In February 2022, the company entered into a joint venture agreement with Baytree Real Estate Opportunities Limited (BREOL) and sold to BREOL 74% of shares in the subsidiary Polski Hak sp. z o.o. As part of the joint venture, a multi-functional project (including residential buildings and -called Polski Hak. In April 2022, the final agreement for the purchase of two plots for this project was concluded.
• subsidiary CP Property 6 sp. z o.o. purchased a tenement house in Szczecin for a residential project in April 2022,
• subsidiary ArtN Sp. z o.o., the owner of the Fabryka Norblina investment, took out new tranches of a construction loan from Bank Pekao S.A. and the European Investment Bank (EIB) in accordance with the schedule and stage of construction of the Norblin Factory located in Warsaw. In addition, on December 30, 2022, ArtN sp. z o.o. concluded an agreement to convert the construction loan granted by Bank Pekao SA and EIB into an investment loan - the total loan amount is EUR 159.3 million. Vat credit (revolving credit) granted to ArtN sp. z o.o. up to max. PLN 35 million was repaid on December 16, 2022.
• loan until September 2027 and increasing the loan amount by EUR 13.7 million to EUR 66.5 million.
• Impact of the war in Ukraine on the Group's operations in 2022

Despite having a significant impact on the real estate market, the military conflict in Ukraine has not directly affected the operations, financial performance, or growth prospects of the Group to date. The Group has no properties in Ukraine or Russia. The Group has no business relationships with companies operating in the territory of the warring countries and does not source its funding from entities subject to sanctions. As of now, the Group does not have any ongoing construction projects, thus it does not have any direct exposure to potential labour shortages that might potentially be experienced by its contractors or trading partners. The Group monitors the situation

Whilst the conflict in Ukraine has not had a direct impact on the Group's business, it has occurred simultaneously with significant global economic instability. As a result, its repercussions may have an impact on the Group's future prospects.

Listed below are the actual and potential consequences of the conflict in Ukraine:

• o significant growth of commodity prices, including those of crude oil and natural gas, which may have an adverse impact on the construction, steel and chemical industries
• o increased global economic uncertainty, potentially leading to greater volatility of asset prices and exchange rates
• o rising borrowing costs and risk premiums, coupled with higher inflation and interest rates
• o high staff turnover and labour shortages leading to wage increases.

Also, supply chain bottlenecks caused by the pandemic continue to persist and are exacerbated by labour shortages and trade tensions.

particular, the real estate industry is exposed to the risk of:

• o reduced activity of tenants, resulting in suspension of or failure to enter into new lease contracts, in particular for retail and food court areas,
• o inability to start and therefore also to complete running projects on time and/or budget due to work stoppages faced by contractors, labour shortages, supply chain disruptions, and lengthening of the permitting process and other administrative procedures,
• o deterioration of the economic situation and uncertainty on the property market leading to temporary suspension/extension of the ongoing sale and investment processes,
• o stronger financial market volatility and rising interest rates that may put a damper on investment activity in the real estate market and limit access to finance in the longer term.

The Group has a number of tools in place to minimise the impact of these developments on the

• o diversified portfolio of office, retail and mixed-use properties
• o long-term contracts the properties owned by the Group are leased at a rate of 97%, with a weighted average unexpired lease term (WAULT) of over six years
• o interest rate hedges entered into when borrowing funds
• o inflation-indexed rent escalation
• o natural hedging strategy of financing projects in the same currency as rents.

The Group assesses its position and takes steps to minimise the negative impact of the economic downturn on an ongoing and has not deteriorated. Capital Park as at December 31, 2022 held PLN 67m in free cash, which helps it to maintain a safe liquidity position despite the economic turbulence caused by the ongoing armed conflict.

The Capital Group of Capital Park S.A. has in place a system for internal control exercised by a separate organizational unit. In the process of preparing financial statements and consolidated financial statements, the internal control is implemented through: (i) internal procedures and risk management; (ii) regular assessment of the internal control procedures, (iii) regular assessment of the activities of the companies of the Group based on interim financial reports, (iv) a formalized system to set up budgets and financial plans and ongoing monitoring of their implementation, and (v) clearly defined responsibilities and competencies in the process of preparing and authorizing financial statements.

The system of internal control in place with the Company is characterized by a comprehensive approach and is based on an institutional control which is implemented by the controlling department and a functional control which is implemented within specificorganizational units of the Company. The management accounting tools and IT systems used in the Company enable recording and analysing of the accounting events in the books of account. The above justifies the assessment that the Company's financial statements are prepared in a reliable manner and contain all the essential data required to assess the Company's financial and business standing, which is also confirmed by the audito 's opinion. The Compan 's financial results during the financial year are subject to on-going analysis and periodic evaluation by the Supervisory Board and its Audit Committee.

The Company regularly evaluates the following key areas:

• 1) Financial Statements compliance with the Company's accounting policies;
• 2) Financial Statements correctness of the disclosures made;
• 3) Financial Statements reliability of the information provided;
• 4) Review and verification of the books of account for compliance with applicable tax laws;
• 5) Mandatory reports;
• 6) Liquidity risk;
• 7) Risk of loss of incentives (lease/rental sections and agencies);

8) Compliance of leases with the rules applicable: (i) in the market and (ii) in the Company;

9) High risk customers/tenants (new areas) (new tenants and retention of existing tenants); 10) Insurance;

11) Risk inherent in the investment project underway;

12) Infrastructure and protection of access to data and information (on-line);

13) Protection of access to hard-copy documents;

• 14) Going concern;
• 15) Compliance with the corporate governance rules;
• 16) Compliance with the Company's strategy;
• 17) Internal control;
• 18) Risk management;
• 20) Implementation of IT systems and internal accounting.

The Group's approach to risk management reflects its business model and draws on the experience and knowledge of its dedicated management team and associates.

The risk management system in place with the Company aims to identify and prevent or minimize the negative effects of the risks related to the Company's operations. The Company's Management Board is directly responsible for the effective management of these risks, while the Supervisory Board supervises the compliance of the Management Board's decisions regarding the business risks taken with the Company's development plans and strategy.

The Supervisory Board positively assesses the Company's significant risk management system in place and functioning in 2022.

In accordance with the Commercial Companies Code, the Supervisory Board exercised continuous supervision over the Company's activities. At all of its meetings in 2022, the Supervisory Board was taking note on an ongoing basis of the Company's financial results and current operating activities. The members of the Supervisory Board received from the Company's Management Board information on important matters concerning the Company's operations and risks connected with the conducted business activity and ways of managing them.

The Supervisory Board states that the cooperation with the Management Board of the Company was running smoothly. The Management Board presented information on important aspects concerning the Company's operations and provided information on the matters falling within the Supervisory Board's competence. In connection with the amendment to the Commercial Companies Code that entered into force on 13 October 2022, the Supervisory Board positively assesses the performance of the Management Board's obligations under Article 380(1) of the Commercial Companies Code and Article th October 2022 to 31st December 2022.

With regard to the compliance, the Company takes measures as required to ensure that its operating activity complies with the applicable legal regulations.

The Company's financial statements are prepared in accordance with the International Accounting Standards and International Financial Reporting Standards applied by the Company.

The Company fulfils its disclosure obligations in compliance with:

• 1) Act of 29 July 2005 on Public Offering and Conditions Governing the Introduction of Financial Instruments to Organised Trading and Public Companies (Journal of Laws of 2019, item 523, as amended);
• 2) Regulation of the Minister of Finance of 29 March 2018 on current and periodic information provided by issuers of securities and the conditions for recognising as equivalent the information required by the laws of a non-member state (Journal of Laws 2018, item 757);
• 3) Regulations of the Warsaw Stock Exchange in connection with the performance of information obligations concerning the Good Practices of Companies Listed on the WSE;

4) Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC.

In its operating activities, the Company adheres to the principle of compliance with applicable laws. Employees and consultants participate in trainings devoted to changes in the legal regulations and standards material for the significant areas of the Company's operations. The Supervisory Board does not raise any objections as to the Company's activities concerning the principle of compliance.

The Supervisory Board has familiarized itself with the market situation in the area of the Company's operations presented by the Management Board and does not raise any reservations with respect thereto.

In view of the above, the Supervisory Board states that in 2022 the Company, taking into account the prevailing economic conditions on the market, properly implemented the adopted development strategy.

V. Supervisory Board's assessment of the reasonableness of expenditures incurred by the Company and the Capital Group to support culture, sports, charity institutions, the media, social

organizations, trade unions, etc. The Management Board of the Company presented a breakdown of expenditures incurred by the Company and the Capital Group to support culture, sports, charity institutions, the media, social organizations, trade unions, etc.

The Supervisory Board took note of the statement of expenses and analyzed it. The statement contains information according to which, in 2022, Capital Park S.A. and the companies comprising its Capital Group included in their activities matters of culture, charitable institutions, social organizations, etc., allocating part of their revenues to the following initiatives:

• 1. in the field of supporting culture:
  2. covering costs of a scholarship program addressed to young and talented musicians under the name "Music Masterclass", which is a key project of the Norblin Factory Foundation

the total expenditures on the above-mentioned initiatives amounted to PLN 192,316.37 in 2022;

• 1. in the field of supporting charitable institutions:
  2. assistance to refugees from Ukraine and covering part of the costs of accommodation in one of the Warsaw hotels
  3. making a donation to the Teach For Poland Foundation, which works to eliminate educational inequalities and improve the quality of the education system
  4. covering part of the costs related to the organization of the final of the Great Orchestra of Christmas Charity 2022
  5. Foundation

total expenditures on the above-mentioned initiatives amounted to PLN 210,764.49 in 2022

• 1. in the field of supporting social organizations and other organizations:
  2. covering the costs of organization of a charity concert to support refugees from Ukraine
  3. covering the costs of gifts for insurgents and veterans in cooperation with the House of Support for Warsaw Insurgents

  4. making a

covering part of the costs connected with organization of sports events organized by the

total expenditures on the aforementioned initiatives amounted to PLN 56,775.96 in 2022.

In 2022, total expenditures on all the initiatives listed above amounted to: PLN 459,764.49.

According to the information provided by the Company's Management Board, the above expenses result from the implementation of the sustainable development policy adopted by the Company's capital group. One of the elements of the Group's sustainable development policy is its active involvement in activities for the benefit of the local community promoting culture and charity institutions.

The Supervisory Board positively evaluates the expenditures for the aforementioned purposes.

VI. Information on remuneration due from the Company for audits commissioned by the Supervisory Board in 2022 pursunat to article 3821 of the Commercial Companies Code:

In connection with the amendment to the Commercial Companies Code, which entered into force on 13 October 2022, pursuant to Article 382(2) of the Commercial Companies Code, the Supervisory Board may adopt a resolution on the examination at the expense of the company of a specific matter regarding the company's activities or its assets by an appointed adviser (advisor to the supervisory board).

In the period from 13th October 2022 to 31st December 2022, the Supervisory Board did not exercise the aforementioned right.

VII. Diversity Policy

Due to the fact that the Company does not have a Diversity Policy and does not apply rule 2.1 of DPSN2021, the Report does not include elements related to the implementation of the Diversity Policy