PKO Bank Polski S.A.

Audit Report / Information • Mar 7, 2024

TRANSLATORS’ EXPLANATORY NOTE The English content of this report is a free translation of the registered auditor’s report of the below- mentioned Polish Company. In Poland statutory accounts as well as the auditor’s report should be prepared and presented in Polish and in accordance with Polish legislation and the accounting principles and practices generally adopted in Poland. The accompanying translation has not been reclassified or adjusted in any way to conform to the accounting principles generally accepted in countries other than Poland, but certain terminology current in Anglo-Saxon countries has been adopted to the extent practicable. In the event of any discrepancies in interpreting the terminology, the Polish language version is binding. PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k. , ul. Polna 11, 00-633 Warsaw, Poland, T: +48 (22) 746 4000, F:+48 (22) 742 4040 , www.pwc.pl PricewaterhouseCoopers Polska Spółka z ograniczoną odpowiedzialnością Audyt sp. k. is entered into the National Court Register maintained by the District Court for the Capital City of Warsaw, under KRS number 0000750050, NIP 526-021-02-28. The seat of the Company is in Warsaw at Polna 11 str. Independent Registered Auditor’s Report To the General Shareholders’ Meeting and the Supervisory Board of Powszechna Kasa Oszczędności Bank Polski S.A Report on the audit of consolidated financial statements Our opinion In our opinion the accompanying annual consolidated financial statements: • give a true and fair view of the consolidated financial position of the Powszechna Kasa Oszczędności Bank Polski S.A. Group (the “Parent Company”) and its subsidiaries (together the “Group”) as at 31 December 2023 and the Group’s consolidated financial performance and the consolidated cash flows for the year then ended in accordance with the applicable International Financial Reporting Standards as adopted by the European Union and the adopted accounting policies; • comply in terms of form and content with the laws applicable to the Group and the Parent Company’s Articles of Association. Our opinion is consistent with our additional report to the Audit Committee issued on the date of this report. What we have audited We have audited the annual consolidated financial statements of the Powszechna Kasa Oszczędności Bank Polski S.A. Group which comprise: • the consolidated statement of financial position as at 31 December 2023; and the following prepared for the financial year then ended: • the consolidated income statement; • the consolidated statement of comprehensive income; • the consolidated statement of changes in equity; • the consolidated statement of cash flows, and • the additional notes to consolidated financial statements, comprising significant accounting policy information and other explanatory information. Basis for opinion We conducted our audit in accordance with the National Standards on Auditing as adopted by the resolution of the National Council of Statutory Auditors and the resolution of the Council of the Polish Audit Supervision Agency (“NSA”) and pursuant to the Law of 11 May 2017 on Registered Auditors, Registered Audit Companies and Public Oversight (the “Law on Registered Auditors”) and the Regulation (EU) No. 537/2014 of 16 April 2014 on specific requirements regarding the statutory audit of public-interest entities (the “EU Regulation”). Our responsibilities under NSA are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) as adopted by resolution of the National Council of Statutory Auditors and other ethical requirements that are relevant to our audit of the consolidated financial statements in Poland. We have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. During the audit, the key registered auditor and the registered audit firm remained independent of the Group in accordance with the independence requirements set out in the Act on Registered Auditors and in the EU Regulation. Our audit approach Overview • The overall materiality threshold adopted for the purposes of our audit was set at PLN 463 million. We adopted overall materiality based on the value of 5% of the profit before tax adjusted for tax on financial institutions. For reasons of prudence, we have adjusted the overall materiality so that it does not exceed approximately 1% of the Group's net assets. • We have audited the separate financial statements of the Parent Company and consolidation packages of subsidiaries that have a significant impact on the consolidated financial statements. • Estimating the cost of legal risk related to the portfolio of mortgage loans in Swiss francs (CHF) • Estimating the value of expected credit losses in the portfolio of loans and advances to customers Materiality Group scoping Key audit matters 3 As part of designing our audit, we determined materiality and assessed the risks of mat erial misstatement in the consolidated financial statements. In particular, we considered where the Parent Company’s Management Board made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates. Materiality The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the consolidated financial statements as a whole, as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, if any, both individually and in aggregate on the consolidated financial statements as a whole. Overall Group materiality PLN 463 million How we determined it 5% of the profit before tax adjusted for the tax on financial institutions. For reasons of prudence, we adjusted the overall materiality so that it does not exceed approximately 1% of the Group's net assets. Rationale for the materiality benchmark applied We chose profit before tax as the benchmark because, in our view, it is the benchmark against which the performance of the Group is most commonly measured by users, and is a generally accepted benchmark. We adjusted this value by the tax on financial institutions, which has the nature of a special tax burden. In order to calculate the materiality as above, we adopted the levels of 5% (of profit before tax adjusted for tax on financial institutions) and 1% (of net assets), respectively, because based on our professional judgement they are within the range of acceptable quantitative materiality thresholds. We agreed with the Audit Committee of the Parent Company that we would report to them misstatements of the consolidated financial statements identified during our audit above PLN 22 million, as well as misstatements below that amount that, in our view, warranted repo rting for qualitative reasons. 4 Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. They include the most significant identified risks of material misstatements, including the identified risks of material misstatement resulting from fraud. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon. We do not provide a separate opinion on these matters. Key audit matter How our audit addressed the key audit matter Estimating the costs of legal risk related to the portfolio of mortgage loans in Swiss francs (CHF) As at the balance sheet date, the Group had a portfolio of mortgage loans denominated in and indexed to CHF in the total amount of PLN 13,096 million before the adjustment to contractual cash flows due to the legal risk. As described in Note 26 Cost of legal risks of mortgage loans in convertible currencies to the consolidated financial statements, the contracts on the basis of which these loans were granted, contain clauses questioned by customers in courts due to abusiveness. At the moment, the jurisprudence of courts is not uniform, but a negative trend for banks is observed in relation to court judgments, which affects both the increase in the level of the estimated probability of unfavourable settlements of disputes and the increase in the number of court cases brought by the banks’ clients. As described in Note 26, from 4 October 2021 the Group concludes voluntary settlements with customers and by 31 December 2023, 36,822 settlements were signed. Settlements concluded with customers result in the cancellation of the customers' debt under the CHF loan as if their loans from the beginning were loans in PLN at the WIBOR reference rate increased by a negotiated margin based on the margin level used historically for such loans. As at the balance sheet date, the Group estimated the costs to cover the above- mentioned legal risk, both for the active portfolio and for loans repaid before the balance sheet date. In the consolidated financial statements the Group recognised the estimate if these costs, for the active portfolio pursuant to paragraph B5.4.6 of IFRS 9 Financial As part of our audit, we assessed whether the accounting approach applied by the Group complies with IFRS 9 and IAS 37. We focused on assessing the Group's approach to estimating the cost of legal risk of CHF mortgage loans, as well as the scope of disclosures included in the consolidated financial statements. Our procedures were aimed mainly at a critical assessment of the model and individual assumptions adopted by the Parent Company’s Management that had a significant impact on the level of the gross book value adjustment of the portfolio and recognized provisions. In particular, we have carried out the procedures listed below: • we assessed the design and implementation of monitoring and internal controls as part of legal risk management and in the process of estimating the adjustments to the gross book value of the portfolio and the provisions recognized; • we interviewed the Parent Company’s Management and specialists involved in the estimation of the adjustments and provisions, including the Group's lawyers, on the assumptions made based on historical observations, as well as information and events after the balance sheet date; • in cooperation with our legal experts, we analysed the documentation and opinions of external law firms obtained by the Group for the purposes of assessing the risk of considering clauses in the Group's agreements as abusive and the likelihood of 5 Instruments (“IFRS 9”), by adjusting the gross carrying amount of the portfolio by reducing contractual cash flows from CHF-denominated or indexed mortgage loans, and in cases where expected loss is higher than gross carrying amount of the loan, for repaid loans and for statutory interest by recognising provisions in accordance with the requirements of IAS 37 Provisions, Contingent Liabilities and Contingent Assets (“IAS 37”). The level of reduction in the gross carrying value of the active portfolio estimated as at December 31, 2023 was PLN 8,306 million, while the level of provisions created was PLN 3,001 million. The costs of legal risk of mortgage loans in CHF were estimated using a statistical method that takes into account the impact of customer characteristics, as the sum of the products of: • the likelihood of the client accepting the settlement and the amount of the Group's loss under the settlement, and • the probabilities of certain court settlements and the amount of loss for various scenarios of such settlements, taking into account the current and forecast number of court cases in the horizon in which the Group is exposed to such risk . Estimation of the costs of legal risk of mortgage loans in CHF is complex and requires a considerable degree of judgement with respect to the key assumptions: • the expected level of future settlements is based on the number of settlements concluded with clients so far and is characterised by a significant level of uncertainty due to the short observation period as well as changing external factors, which may affect future decisions of clients on joining the settlement program as well as future decisions of the Group to continue with the settlements program; • the forecast number of future lawsuits is based on historical observations regarding court cases and is characterised by considerable uncertainty due to the high dynamics of the number of cases brought to court by the Group's clients, both active and repaid loans, constituting the basis for estimation, as well as the uncertainty as to the individual scenarios of possible outcomes of lawsuits; • in cooperation with our legal experts and statistical modelling experts, we analysed the documentation of the model; • we analysed the results of the backtest of the model for estimating the costs of legal risk of mortgage loans in CHF; • substantive procedures: o we analysed the results of settlements program by the Group including update the economic assumptions for the settlement proposals adopted in the model ; o we obtained directly from the Group’s external legal experts their assessment of the expected scenarios of the resolutions of court cases together with an assessment of the probability of these resolutions; o we verified the method of calculating the value of potential losses for the scenarios assumed by the Group; o we checked the correctness and completeness of the input data being the basis for calculations in the Group ’s model (by performing tests of details on the completeness and accuracy of the input data); o we verified the mathematical accuracy of the model calculation; o we verified on a sample the correctness of the settlement with the clients and final judgments ; o we verified the recognition of the settlement result and final judgments in the books for the entire population. We also verified the adequacy and completeness of disclosures in the consolidated financial statements in accordance with applicable accounting standards . 6 the forecast of clients' inclination to file a case in court in the future; • the probabilities of resolutions in current and future court cases affecting the level of loss are subject to significant changes due to the lack of a uniform line of jurisprudence in previous court judgments; • the estimated period for charging statutory interest may change due to the uncertainty as to the date from which courts will award statutory interest due to customers. Due to the significant impact on the Group’s result, the complexity and uncertainty of the assumptions adopted to estimate the legal risk costs of CHF mortgage loans, as well as the significant value of the portfolio constituting the basis for estimating potential settlements as well as current and potential future claims against the Group, we considered this area a key audit matter. Note 26 Cost of legal risk of mortgage loans in convertible currencies , Note 35 Loans and advances to customers , Note 47 Legal claims and Note 6 1 Management of currency risk associated with mortgage loans for individuals in consolidated financial statements contain detailed information on the assumptions used to calculate the adjustment of the gross carrying amount of the portfolio of mortgage loans in CHF and provisions created, as well as the possible alternative results presented as part of the estimate sensitivity analysis. Estimating the expected credit losses for loans and advances to customers In accordance with the provisions of IFRS 9 the Parent Company’s Management is required to determine expected credit loss (“ECL”) that may occur over either a 12 month period or the remaining life of a financial asset, depending on the classification of individual assets into risk categories ("stages"), taking into account the impact of future macroeconomic conditions on the level of credit risk allowances. The Group’s loan portfolio consists of exposures assessed for expected credit losses: • on an individual basis for individually significant credit exposures; and on a portfolio basis with the use of statistical As part of our procedures we updated our understanding of the internal control environment in terms of recognizing and calculating expected credit losses, and we also checked the effectiveness of selected key control mechanisms implemented by the Group, in particular: • procedures in the area of entering customer data used for the calculation of expected credit losses; • the process of data flow between the Group's key IT systems and the ECL calculation tool; 7 models which estimate allowances for credit losses for each of the homogenous portfolios identified by the Group. Estimating the level of allowances for expected credit losses requires the application of a significant degree of judgement with regard to the identification of impaired loans and significant increase in credit risk (“SICR”), the assessment of the customer's credit quality, the value of collaterals and expected recoveries. The Management monitors the correctness of performance of the models, by comparing the estimated results of the models to actual credit losses (‘back-testing procedures’) to ensure that the level of allowances for the expected credit losses for loans and advances to customers is adequate. In the models of expected credit losses the Group uses large volumes of data, therefore the completeness and reliability of data can significantly impact accuracy of the allowances for credit losses. T he Parent Company’s Management, as described in Note 24 Net allowances for expected credit losses to consolidated financial statements, recognised additional write-offs for the forecasted deterioration in quality of the loan portfolio in industries particularly affected by these changes. We determined that the level of allowance for expected credit losses in the portfolio of loans and advances is a key audit matter due to: • the significant judgement applied by the Parent Company’s Management when designing future macroeconomic scenarios and forecasting macroeconomic variables, adopting probability-weighting scenarios and applying expert judgement to reflect characteristics not already considered in the models; • a high degree of uncertainty in the estimates of expected credit losses; • complexity of audit procedures and audit evidence obtained due to the complexity of the calculations and the volume of data used to estimate the allowances for expected credit losses . • proc edures for timely and complete identification of significant increases in credit risk (stage 2) and impairment (stage 3). We also assessed whether the methodology used by the Group for estimating allowances for expected credit losses complies with the requirements of IFRS 9. In particular, we assessed the Group's approach to the application of the SICR criteria, default definition, probability of default ("PD"), loss given default (“LGD”) parameters and considering forward-looking information when calculating expected credit losses. In the case of individually insignificant loans and advances, which are assessed for impairment at the portfolio basis, we have performed among others the following procedures: • assessment of the Group's assumptions and expert adjustments used in the model; • critical analysis of key judgments and assumptions, including macroeconomic scenarios and assumed probabilities of occurrence of individual scenarios; • analysis of the model stability and its adaptation to the current conditions; • independent tests of credit risk parameters; • for selected loans and advances, we checked the classification into stages. We have engaged our in-house credit risk modelling specialists to carry out the above- mentioned procedures. As part of the work on individually analysed exposures, we performed the following procedures: • we applied our professional judgement in selecting the sample taking into account various risk criteria; • for selected loans and advances we checked the classification into stages; • for selected impaired loans and advances (stage 3), we tested the assumptions used in the calculation of the impairment allowances, in particular the forecasted scenarios and associated probabilities, as well as the timings and amounts of the expected cash flows, 8 Note 24 Net allowances for expected credit losses , Note 35 Loans and advances to customers and Note 53 the Credit risk management Note 54 Credit risk – financial information section of consolidated financial statements provide detailed information on the methods and models used and on the level of allowances for the expected credit losses for loans and advances to customers. including cash flows from repayments and collateral realisation. In addition, we performed the following procedures: • we reconciled selected inputs used to determine default parameters and to estimate expected credit losses; • we verified the assumptions adopted for the calculation of additional adjustments not included in the model, created to reflect the impact of macroeconomic factors on projected deterioration in the quality of the loan portfolio in selected industries; • we recalculated expected credit losses on a sample of credit exposures; • we performed analytical procedures for the coverage of the loan portfolio with expected credit losses and their changes and the transfer of exposure between stages; • we analysed the events after the balance sheet date to verify the need for adjustments to be made to the expected credit losses as at the balance sheet date; • we analysed the results of the Parent Company’s Management sensitivity analysis of the level of allowances for expected credit losses due to deterioration or improvement of risk parameters. We also verified the adequacy and completeness of disclosures in the consolidated financial statements in accordance with the applicable accounting standards . Responsibility of the Management and Supervisory Board for the consolidated financial statements The Management Board of the Parent Company is responsible for the preparation of the annual consolidated financial statements that give a true and fair view of the Group’s financial position and results of operations, in accordance with International Financial Reporting Standards as adopted by the European Union, the adopted accounting policies, the applicable laws and the Parent Company’s Articles of Association, and for such internal control as the Management Board determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the Parent Company’s Management Board is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the 9 Management Board either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. The Parent Company’s Management Board and members of the Supervisory Board are obliged to ensure that the consolidated financial statements comply with the requirements specified in the Accounting Act of 29 September 1994 (“the Accounting Law”). Members of the Supervisory Board are responsible for overseeing the financial reporting process. Auditor’s responsibility for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the NSA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence economic decisions of users taken on the basis of these consolidated financial statements. The scope of the audit does not include an assurance on the Company’s Group’s future profitability nor the efficiency and effectiveness of the Parent Company’s Management Board conducting its affairs, now or in future. As part of an audit in accordance with NSA, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control; • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Parent Company’s Management Board; • conclude on the appropriateness of the Parent Company’s Management Board’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern; • evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation; • obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. 10 We communicate with the Audit Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Other information, including the report on the operations Other information Other information comprises: • a PKO Bank Polski S.A. Group Directors’ Report for 2023 prepared jointly with the PKO Bank Polski S.A. Directors’ Report (“the Report on the operation s”) and the corporate governance statement and the statement on non-financial information referred to in Article 55(2b) of the Accounting Act which are separate parts of the Report on the operations, • other documents comprising the Annual Report for the financial year ended 31 December 2023 (“the Annual Report”), (together “Other Information”). Other information does not include the consolidated financial statements and our auditor’s report thereon. Responsibility of the Manageme nt and Supervisory Board The Management Board of the Parent Company is responsible for the preparation of the Other Information in accordance with the law. The Parent Company’s Management Board and the members of the Supervisory Board are obliged to ensure that the Report on the operations including its separate parts complies with the requirements of the Accounting Law. Registered auditor’s responsibility Our opinion on the consolidated financial statements does not cover the Other Information. In connection with our audit of the consolidated financial statements, our responsibility under NSA is to read the Other Information and, in doing so, consider whether the Other Information is materially inconsistent with the information in the consolidated financial statements, our knowledge obtained in our audit, or otherwise appears to be materially misstated. If, based on the work performed, we identified a material misstatement in the Other Information, we are obliged to inform about it in our audit report. In accordance with the requirements of the Law on the Registered Auditors, we are also obliged to issue an opinion on whether the Report on the operations has been prepared in accordance with the law and is consistent with information included in annual consolidated financial statements. 11 Moreover, we are obliged to issue an opinion on whether the Group provided the required information in its corporate governance statement and to inform whether the Group prepared a statement on non- financial information. In addition, we are required to audit the financial information included in ite m 4 o f the Report on the operations in accordance with the scope described in this audit report and the requirements of the Banking Law of 29 August 1997 (“the Banking Law”). Statement on the Other information We declare, based on the knowl edge of the Group and its environment obtained during our audit, that we have not identified any material misstatements in the Report on the operations and the remaining Other information. Opinion on the Report on the operations Based on the work we carried out during our audit, in our opinion, the Report on the operations: • has been prepared in accordance with the requirements of Article 49 of the Accounting Act and para. 71 of the Regulation of the Minister of Finance dated 29 March 2018 on current and periodical information submitted by issuers of securities and conditions for considering as equivalent the information required under the legislation of a non-Member State (“Regulation on current information”) and Article 111(1–2) of the Banking Law; • is consistent with the information in the consolidated financial statements. Opinion on the corporate governance statement In our opinion, in its corporate govern ance statement, the Group included information set out in para. 70.6 (5) of the Regulation on current information. In addition, in our opinion, information specified in paragraph 70.6 (5)(c)–(f), (h) and (i) of the said Regulation included in the corporate governance statement are consistent with the applicable provisions of the law and with information included in the consolidated financial statements. Information on non-financial information In accordance with the requirements of the Act on the Registered Auditors, we confirm that the Group has prepared a statement on non-financial information referred to in Article 55(2b) of the Accounting Act as a separate section of the Report on the operations. We have not performed any assurance work relating to the statement on non-financial information and we do not provide any assurance with regard to it. Report on other legal and regulatory requirements Report on the compliance of the marking up of consolidated financial statements with the requirements of the European Single Electronic Format (“ESEF”) In connection with the audit of consolidated financial statements we have been engaged by the Parent Company’s Management Boar d as part of our audit engagement letter to conduct a reasonable assurance engagement to express an opinion whether the consolidated financial statements of the Group as at and for the year ended 31 December 2023 prepared in the single electronic format contained in the file named PL_Skonsolidowane_sprawozdanie_finansowe_GKPKOBPSA_31.12.2023.zip (the “consolidated financial statements in the ESEF format”) was marked up in accordance with the requirements in the article 4 of the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format (the “ESEF Regulation”). 12 Description of a subject matter and applicable criteria The consolidated financial statements in the ESEF format were prepared by the Parent Company’s Management Board to comply with the technical requirements regarding the specification of a single electronic reporting format and marking up, which are set out in the ESEF Regulation. The subject matter of our assurance engagement is the compliance of the consolidated financial statements in the ESEF format with the requirements of the ESEF Regulation and the requirements of this regulation, in our view, constitute appropriate criteria to form a reasonable assurance conclusion. Responsibility of the Management Board of the Parent Company and the Supervisory Board The Parent Company’s Management Board is responsible for the preparation of the consolidated financial statements in the ESEF format in accordance with the technical requirements regarding the specification of a single electronic reporting format which are set out in the ESEF Regulation. This responsibility includes the selection and application of appropriate markups in iXBRL using taxonomy specified in the ESEF Regulation. The responsibility of the Management Board also includes designing, implementing and maintaining internal controls relevant for the preparation of the consolidated financial statements in the ESEF format which are free from material non-compliance with the requirements of the ESEF Regulation and their marking-up in compliance with these requirements . Members of the Parent Company’s Supervisory Board are responsible for overseeing the financial reporting process, which also includes the preparation of the consolidated financial statements in accordance with the format that is compliant with legal requirements. Our responsibility Our objective was to express an opinion, based on the conducted reasonable assurance engagement, whether the consolidated financial statements prepared in the ESEF format were marked up, in all material respects, with the requirements of the ESEF Regulation. We conducted our engagement in accordance with the National Standard on Assurance Engagements other than Audit and Review 3001pl - audit of financial statements prepared in the single electronic reporting format (“KSUA 3001pl”) and where relevant with the National Standard on Assurance Engagements 3000 (R) in the wording of the International Standard on Assurance Services 3000 (Revised) - ‘Assurance Engagements other than Audits and Reviews of Historical Financial Information’ as issued by the National Council of Statutory Auditors (“KSUA 3000(R)”). These standards require that we comply with ethical requirements, plan and perform procedures to obtain reasonable assurance whether the consolidated financial statements in the ESEF format were marked up, in all material respects, in compliance with the specified criteria. Reasonable assurance is a high level of assurance, but it does not guarantee that the engagement performed in accordance with KSUA 3001pl and KSUA 3000 (R) will always detect the material misstatement (significant non-compliance with the requirements). The selection of the procedures depends on the auditor's judgement, including the auditor's assessment of the risk of material misstatements, whether due to fraud or error. In performing the assessments of this risk, the auditor shall consider the internal control related to the preparation of the consolidated financial statements in the ESEF format and its marking-up in order to plan appropriate procedures to provide the auditor with sufficient evidence appropriate to the circumstances. The assessment of the functioning of the internal control system was not carried out in order to express an opinion on the effectiveness of its operation. 13 Quality management and ethical requirements We apply the provisions of the National Standard on Quality Control 1 in the wording of the International Standard on Quality Management (PL) 1 – “Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements” as issued by the International Auditing and Assurance Standards Board and adopted by the resolution of the Council of the Polish Audit Supervision Agency. This standard requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We comply with the independence and other ethical requirements of the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants as adopted by resolution of the National Council of Statutory Auditors, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Summary of the work performed Our planned and performed procedures were aimed at obtaining reasonable assurance whether the consolidated financial statements in the ESEF format were marked-up, in all material respects, in compliance with the applicable requirements. Our procedures included in particular: • obtaining an understanding of the process of preparation of the consolidated financial statements in the ESEF format, including the process of selection and application by the Group of the XBRL tags and ensuring the compliance with the ESEF Regulation, including understanding the mechanism of the internal control system related to this process; • reconciliation, on a selected sample, of the marked-up information contained in the consolidated financial statements in the ESEF format to the audited consolidated financial statements; • evaluating of compliance with the technical standards regarding the specification of a single electronic reporting format, including the use of XHTML , using a specialised IT tool and with the support of an IT expert assessment; • evaluating the completeness of marking up the consolidated financial statements in the ESEF format using the iXBRL tags; • evaluating the appropriateness of the use of XBRL tags selected from the taxonomy defined in the ESEF Regulation and whether the extension markups were used appropriately where no suitable element in taxonomy defined in the ESEF Regulation has been identified; • evaluating the appropriateness of anchoring of the extension elements to the ESEF taxonomy from the ESEF regulation . We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Conclusion In our opinion, based on the procedures performed, the consolidated financial statements in the ESEF format were marked-up, in all material respects, in compliance with the requirements of the ESEF Regulation. Information on compliance with prudential regulations The Management Board of the Parent Company is responsible for complying with the applicable prudential regulations set out in separate legislation, and in particular, for correct determination of the capital ratios. 14 The capital ratios as at 31 December 2023 have been presented in Note 68 of the consolidated financial statements and include Tier 1 common capital ratio, Tier 1 capital ratio and the total capital ratio. We are obliged to inform in our report on the audit of the consolidated financial statements whether the Group has complied with the applicable prudential regulations set out in separate legislation, and in particular, whether the Group has correctly determined its capital ratios. For the purposes of the said information, the following legal acts are understood as separate legislation: Regulation (EU) no. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012, as amended (“CRR”), the Banking Law and the Act of 5 August 2015 on macro-prudential supervision over the financial system and on crisis management in the financial system (“the Act on macro-prudential supervision”). It is not the purpose of an audit of the consolidated financial statements to present an opinion on compliance with the applicable prudential regulations specified in the separate legislation specified above, and in particular, on the correct determination of the capital ratios, and therefore, we do not express such an opinion. Based on the work performed by us, we inform you that we have not identified: • any cases of non-compliance by the Group with the applicable prudential regulations set out in separate legislation referred to above, in the period from 1 January t o 31 December 2023; • any irregularities in the determination by th e Group of the capital ratios as at 31 December 2023 in accordance with the separate legislation referred to above; which would have a material impact on the consolidated financial statements. Statement on the provision of non-audit services To the best of our knowledge and belief, we declare that the non-audit services we have provided to th e Parent Company, its parent company and its controlled entities within the European Union are in accordance with the applicable laws and regulations in Poland and that we have not provided any non-audit services prohibited under Article 5(1) of the EU regulation and Article 136 of the Law on Registered Auditors. The non-audit services which we have provided to the Parent Company and its controlled entities within the European Union during the audited period are dis closed in Note 76 of the consolidated financial statements. Appointment We were first appointed to audit the annual consolidated financial statements of the Group by resolution of the Supervisory Board dated 3 December 2018 and re-appointed by resolution dated 23 September 2021. We have been auditing the Group’s consolidated financial statements without interruption since the financial year ended 31 December 2020, i.e. for four consecutive years. The Key Registered Auditor responsible for the audit on behalf of PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k., a company entered on the list of Registered Audit Companies with the number 144, is Agnieszka Accordi. Agnieszka Accordi Key Registered Auditor No. in the registry 11665 Warsaw, 6 March 2024