Annual Report for 2025

Cyfrowy Polsat S.A.

Warsaw, April 29, 2026

Letter of the Chairman of the Supervisory Board of Cyfrowy Polsat S.A. Letter of the President of the Management Board of Cyfrowy Polsat S.A. Financial Statements for the year ended December 31, 2025

Report of the independent auditor on the audit of the financial statements for the year ended December 31, 2025

Report of the Management Board on the activities of Cyfrowy Polsat S.A. and Cyfrowy Polsat S.A. Capital Group for the financial year ended December 31, 2025

Independent statutory auditor's limited assurance report on sustainability reporting for the financial year ended December 31, 2025

Statement of the Management Board Statement of the Supervisory Board

Ladies and Gentlemen,

The report presented to you summarises the activities of Polsat Plus Group in 2025. It was a demanding period, shaped both by macroeconomic factors and by internal challenges, which had a material impact on the conditions under which the Group conducted its business.

Despite the unfavourable macroeconomic environment, the Group consistently pursued initiatives aimed at maintaining operational and financial efficiency across its key areas of activity: telecommunications, content production and distribution, and green energy. In 2025, particular emphasis was placed on responsible financial management, which is of key importance in the context of preparations for the future refinancing of debt. Consistent cost control is also one of the Management Board's primary objectives this year.

The year 2025 can clearly be described with one word: "continuity". The Group focused on the implementation of the Strategy 2023+ and the objectives arising from it. A significant proportion of these

objectives were achieved, which opens the way for the Management Board to present new strategic assumptions and future development directions for the Group as early as 2026.

At the end of 2025, important changes were also made to the corporate bodies of the companies within the Group. A new President of the Management Board took office at the turn of the year, and the first effects of his actions are expected to become visible gradually over the course of the current year. As Chairman of the Supervisory Board, I am pleased to note the initiatives undertaken to date which, in line with the Management Board's declarations, translated into an improvement in operational and financial results in the first quarter of 2026.

Polsat Plus Group operates, among others, in the media and telecommunications sectors, which are driven by the dynamic development of modern technologies. Their effective, flexible and responsible implementation and use will be one of the key factors influencing the Group's competitiveness and long-term development. For the Group's future, the completion of the investment cycle related to the implementation of the objectives of the Strategy 2023+ in the area of clean energy production is also of significance.

At the same time, the Supervisory Board declares its full readiness and commitment to supporting the Management Board and the employees of Polsat Plus Group in the development and implementation of a new strategy as well as in the further development of corporate governance policies and the strengthening of the Group's organisational culture. I would like to emphasise that the involvement of employees and management in shaping the new strategy will be a significant factor determining the effectiveness of its implementation in the future.

On behalf of the Supervisory Board of Cyfrowy Polsat, I would like to express my gratitude to the Group's employees for their commitment and professionalism, to our customers for their trust and for using the Group's services and products, and to our shareholders and investors for their confidence and long-term support.

Yours faithfully, Daniel Kaczorowski

Chairman of the Supervisory Board, Cyfrowy Polsat S.A.

Ladies and Gentlemen,

I am pleased to present to you Polsat Plus Group's annual report for 2025, which also includes the sustainability report.

The past year was a period of numerous challenges and a difficult macroeconomic environment. The Group continued the implementation of its Strategy 2023+ across its core business segments: telecommunications, media and green energy.

The Group worked on strengthening the foundations of its business, including the bundled services offering. Activities focused, among others, on the process of selecting and combining services such as fibre broadband, television, mobile internet, mobile subscriptions and streaming services. An increasing number of customers are using Plus's 5G network, which now covers 26 million people, representing 70% of the country's population. Polsat Box continued to enhance its range of TV services delivered via the internet, a distribution channel that is gaining importance year by year.

In the media segment, we delivered very strong results in both television and online markets. Thanks to an attractive programme schedule and a strong portfolio of sports broadcasting rights, TV Polsat channels were the audience ratings leader, and our TV advertising revenues increased. At the same time, Polsat-Interia Group was the largest online publisher in Poland.

We are finalising our strategic investments in the green energy segment. In total, we have 485 MW of installed generation capacity in renewable energy sources, including wind, solar and biomass.

Despite the challenging macroeconomic environment, we achieved stable financial results. Group revenues exceeded PLN 14.3 billion, while adjusted EBITDA amounted to over PLN 3.1 billion. Our priority going forward will be even more effective cash flow management and stricter cost control.

Already in the first quarter of 2026, with viewers seeking modern ways of accessing entertainment in mind, we significantly expanded the offering of our Polsat Box Go streaming service. It now provides access to nearly 200 TV channels, including a comprehensive selection of sports and news channels, as well as a wide range of films, series and programmes. As a result, it offers a unique combination of traditional television, a rich VOD library and the convenience associated with streaming services.

In March 2026, we introduced a new offer for Plus and Polsat Box customers, who will be the only ones on the market to have access to five of the world's leading streaming services. In addition to Disney+, HBO Max and SkyShowtime, Apple TV and Amazon Prime have joined the offer. In this way, Plus and Polsat Box have become a unique and the largest aggregator of global streaming services on the Polish market, available at an attractive price.

The year 2026 began with changes in the Group's organisation, as well as in its supervisory and management bodies. I am fully aware of market expectations regarding the announcement of a new strategy and future plans for the Group, which we intend to present to the market in a comprehensive manner in autumn this year. This does not mean, however, that we are waiting until then. Immediately after taking over leadership of the Management Board, we launched initiatives that are already delivering positive cost, sales and, consequently, financial effects. My objective is to manage the Group in such a way that after reviewing every part of our business - a process that is currently under way - we can determine which areas require only

minor adjustments, which need more significant changes in approach and which will be fundamental to building value and shaping the future of the entire Polsat Plus Group.

The results achieved by our Group are the outcome of the hard work of the entire team. I would like to sincerely thank all employees for their full commitment, professionalism and sense of responsibility in their day-to-day work. I would also like to thank our shareholders and financial partners for their trust. I greatly appreciate and thank our customers and viewers for their loyalty. Their everyday choice of our services and programmes motivates us to continue our efforts and to further improve our offering.

Yours faithfully,

Piotr Żak

President of the Management Board, Cyfrowy Polsat S.A.

‌This document is a conversion to pdf format of the official financial statements issued in xhtml format.

Financial Statements

for the year ended 31 December 2025

Prepared in accordance

with International Financial Reporting Standards as adopted by the European Union

Table of contents

Approval of the Financial Statements 4

Income Statement 5

Statement of Comprehensive Income 6

Balance Sheet 7

Cash Flow Statement 9

Statement of Changes in Equity 11

Notes to the Financial Statements 13

General information 13

1. The Company 13

2. Composition of the Management Board of the Company 13

3. Composition of the Supervisory Board of the Company 13

   Principles applied in the preparation of financial statements 14

4. Basis of preparation of the financial statements 14

5. Accounting policies 15

6. Determination of fair values 29

7. Approval of the Financial Statements and identification of the Consolidated Financial Statements 30

   Explanatory notes 30

8. Revenue 30

9. Operating costs 30

10. Finance income 31

11. Finance costs 32

12. Income tax 32

13. EBITDA (unaudited) 35

14. Basic and diluted earnings per share 35

15. Property, plant and equipment 36

16. Impairment test on goodwill allocated to the "B2C and B2B" cash-generating unit 38

17. Other intangible assets 39

18. Right-of-use assets 41

19. Investment property 42

20. Shares in subsidiaries, associates and other 43

21. Deferred distribution fees 47

22. Loans granted 47

23. Other non-current assets 48

24. Contract assets and liabilities 48

25. Inventories 49

26. Trade and other receivables 49

27. Other current assets 50

28. Cash and cash equivalents 50

29. Equity 51

30. Hedge valuation reserve 55

31. Loans and borrowings 56

32. Issued bonds 59

33. Lease liabilities 60

34. Company as a lessor 60

35. Other non-current liabilities and provisions 61

36. Trade and other payables 61

    Other notes 63

37. Financial instruments 63

38. Capital management 82

39. Barter transactions 83

40. Transactions with related parties 83

41. Litigations 85

42. Other disclosures 87

43. Remuneration of the Management Board 88

44. The Supervisory Board remuneration 89

45. Important agreements and events 91

46. Events subsequent to the reporting date 92

47. Judgments, financial estimates and assumptions 92

    Financial results for the 3 months ended 31 December 2025 and 31 December 2024 97

48. Income Statement 97

49. Statement of Comprehensive Income 97

50. Revenue 98

51. Operating costs 98

52. Finance income 99

53. Finance costs 99

‌Approval of the Financial Statements

On 28 April 2026 the Management Board of Cyfrowy Polsat S.A. approved the financial statements of the Cyfrowy Polsat S.A. prepared in accordance with International Financial Reporting Standards as adopted by the European Union, which include:

Income Statement for the period

from 1 January 2025 to 31 December 2025 showing a net loss for the period of: PLN 550.3

Statement of Comprehensive Income for the period

from 1 January 2025 to 31 December 2025 showing a total comprehensive loss for the period of:

PLN 562.3

Balance Sheet as at

31 December 2025 showing total assets and total equity and liabilities of: PLN 19,610.4

Cash Flow Statement for the period

from 1 January 2025 to 31 December 2025 showing a net increase in cash and cash equivalents amounting to:

PLN 1,037.8

Statement of Changes in Equity for the period

from 1 January 2025 to 31 December 2025 showing a decrease in equity of: PLN 562.3

Notes to the Financial Statements

The financial statements have been prepared in PLN million unless otherwise indicated.

Piotr

Żak

President of the Management Board

Maciej

Stec

Vice-President of the Management Board

Andrzej

Abramczuk Member of the Management Board

Bartłomiej

Drywa

Member of the Management Board

Jacek

Felczykowski Member of the Management Board

Agnieszka

Odorowicz Member of the Management Board

Katarzyna

Ostap-Tomann Member of the Management Board

Agnieszka

Szatan

Chief Accountant

Warsaw, 28 April 2026

‌Income Statement

Cost of debt collection services and bad debt allowance and receivables written off

(8.6) (9.4)

PLN)

‌Statement of Comprehensive Income

for the year ended Note 31 December 2025 31 December 2024

Items that may not be reclassified subsequently to profit or loss:

Net profit/(loss) for the period (550.3) 405.8

Items that may be reclassified subsequently to profit or loss:

Actuarial gain/(loss) (0.2) -

Valuation of hedging instruments 30 (11.8) (0.2)

Other comprehensive income/(loss), net of tax

(12.0) (0.2)

Total comprehensive income/(loss) for the period

(562.3)

405.6

‌Balance Sheet - Assets

Shares in subsidiaries, associates and other, includes:

20 11,491.4 12,117.4

Balance Sheet - Equity and Liabilities

includes:

for the year ended Note 31 December 2025 31 December 2024

Net decrease/increase in cash and cash equivalents

1,037.8

(522.9)

Cash and cash equivalents at the beginning of period

Effect of exchange rate fluctuations on cash and cash equivalents

1,352.1 1,883.6

1.6 (8.6)

Cash and cash equivalents at the end of period 2,391.5 1,352.1

(1) Includes the change in the fair value of shares of Asseco Poland S.A. and the loss on disposal of shares

(2) Includes payment for costs related to the new financing

‌Statement of Changes in Equity

for the year ended 31 December 2025

(1) In accordance with the provisions of the Commercial Companies Code, joint-stock companies are required to transfer at least 8% of their annual net profits to reserve capital until its amount reaches one third of the amount of their share capital. The capital excluded from distribution amounts to PLN 8.5 as at 31 December 2025.

Statement of Changes in Equity

for the year ended 31 December 2024

(1) In accordance with the provisions of the Commercial Companies Code, joint-stock companies are required to transfer at least 8% of their annual net profits to reserve capital until its amount reaches one third of the amount of their share capital. The capital excluded from distribution amounts to PLN 8.5 as at 31 December 2024.

‌Notes to the Financial Statements

‌General information

1. ‌The Company

   Cyfrowy Polsat S.A. ('the Company', 'Cyfrowy Polsat') was incorporated in Poland as a joint stock company. The Company's shares are traded on the Warsaw Stock Exchange. The Company's registered head office is located at 4a Łubinowa Street in Warsaw.

   The Company operates in Poland as a provider of a paid digital satellite platform under the name of 'Polsat Box' and paid digital terrestrial television as well as telecommunication services provider.

   The Company was incorporated under the Notary Deed dated 30 October 1996.

   The Company is the Parent Company of Cyfrowy Polsat S.A. Capital Group (the 'Group'). As at 31 December 2025 the Group encompasses the Company, Polkomtel Sp. z o.o. and its subsidiaries, Telewizja Polsat Sp. z o.o. and its subsidiaries and joint ventures, Netia S.A. and its subsidiaries, INFO-TV-FM Sp. z o.o., Interphone Service Sp. z o.o., Teleaudio Dwa Sp. z

   o.o. Sp. k., Netshare Media Group Sp. z o.o., Orsen Holding Limited and its subsidiaries, Esoleo Sp. z o.o. and its subsidiaries, Stork 5 Sp. z o.o. and its subsidiary, BCAST Sp. z o.o., Plus Finanse Sp. z o.o., Archiplex Sp. z o.o., Vindix S.A. and its subsidiaries, Port Praski Sp. z o.o. and its subsidiaries and PAK-Polska Czysta Energia Sp. z o.o. and its subsidiaries.

2. ‌Composition of the Management Board of the Company

   • Piotr Żak President of the Management Board (since 23 December 2025),

   • Mirosław Błaszczyk President of the Management Board

     (until 21 July 2025),

   • Maciej Stec Vice-President of the Management Board,

   • Andrzej Abramczuk Member of the Management Board

     (since 29 December 2025),

     President of the Management Board

     (since 22 July 2025 until 23 December 2025),

   • Bartłomiej Drywa Member of the Management Board (since 29 December 2025),

   • Jacek Felczykowski Member of the Management Board,

   • Aneta Jaskólska Member of the Management Board (until 1 April 2026),

   • Agnieszka Odorowicz Member of the Management Board,

   • Katarzyna Ostap-Tomann Member of the Management Board.

3. ‌Composition of the Supervisory Board of the Company

   • Daniel Kaczorowski Chairman of the Supervisory Board (since 22 July 2025),

   • Zygmunt Solorz Chairman of the Supervisory Board (until 21 July 2025),

   • Aleksandra Żak Vice-Chairman of the Supervisory Board

     (since 29 December 2025),

   • Tobias Solorz Vice-Chairman of the Supervisory Board

     (since 29 December 2025),

   • Justyna Kulka Vice-Chairman of the Supervisory Board

     (until 30 October 2025),

   • Marek Grzybowski Member of the Supervisory Board,

   • Alojzy Nowak Member of the Supervisory Board,

   • Józef Birka Member of the Supervisory Board (until 29 December 2025),

   • Jarosław Grzesiak Member of the Supervisory Board (since 29 December 2025),

   • Piotr Muszyński Member of the Supervisory Board (since 29 December 2025),

   • Marta Poślad Member of the Supervisory Board (since 29 December 2025),

   • Tomasz Szeląg Member of the Supervisory Board.

     ‌Principles applied in the preparation of financial statements

4. ‌Basis of preparation of the financial statements

   Statement of compliance

   These financial statements for the year ended 31 December 2025 have been prepared in accordance with the International Financial Reporting Standards as adopted by the EU (IFRS EU). The Company applied the same accounting policies in the preparation of the financial data for the year ended 31 December 2025 and the financial statements for 2024, presented in the annual report, except for the change in accounting policies relating to hedge accounting as described below and for the EU-endorsed standards and interpretations which are effective for the reporting periods beginning on or after 1 January 2025.

   During the year ended 31 December 2025 the following became effective:

   1. Amendments to IAS 21: The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability.

   Amendments and interpretations that apply for the first time in 2025 do not have a material impact on the financial statements of the Company.

   Standards published but not yet effective:

   1. Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments -Disclosures: Classification and Measurement of Financial Instruments,

   2. Annual Improvements (Volume 11) - includes clarifications, simplifications, corrections and changes of IFRS standards: IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 7 Financial Instruments - Disclosures, IFRS 9 Financial Instruments, IFRS 10 Consolidated Financial Statements, IAS 7 Statement of Cash Flows,

   3. Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments -Disclosures - Contracts Referencing Nature-dependent Electricity - changes in assessment of own use, hedge accounting and disclosure requirements,

   4. IFRS 18 Presentation and Disclosure in Financial Statements,

   5. IFRS 19 Subsidiaries without Public Accountability: Disclosures,

   6. Amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures.

   7. Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Translation to the presentation currency in hyperinflationary conditions.

   The Company has not early adopted the new or amended standards in preparing these financial statements.

   Change in accounting policy - application of IFRS 9 "Financial Instruments" in the area of hedge accounting

   As of 1 January 2025, the Company has changed its accounting policies for recognizing and presentation hedging transactions, changing from the principles set out in IAS 39 "Financial

   Instruments: Recognition and Measurement" ("IAS 39") to the hedge accounting model in accordance with IFRS 9 "Financial Instruments" ("IFRS 9").

   Until 31 December 2024, the Company, pursuant to the transitional provisions of IFRS 9, continued to apply the hedge accounting principles consistent with IAS 39, despite the earlier implementation of the remaining requirements of IFRS 9.

   In accordance with the transitional provisions of IFRS 9, the amendment was applied prospectively from 1 January 2025. The Company did not restate comparative data for earlier periods. The impact of the change in accounting policies on the financial statements as of 1 January 2025 was immaterial and did not require adjustments to the opening balances or recognition of the effects of the transition in the equity.

5. ‌Accounting policies

   The accounting policies set out below have been applied by the Company consistently to all periods presented in the financial statements.

   1. Basis of measurement

      The financial statements have been prepared on a historical cost basis, except for derivative financial instruments, which are valued at fair value.

   2. Going concern assumption

      These financial statements have been prepared assuming that the Company will continue as a going concern in the foreseeable future, not shorter than 12 months from 31 December 2025.

   3. Functional currency and presentation currency

      The financial data in the financial statements is presented in Polish zloty, rounded to million. The functional currency of the Company is the Polish zloty.

   4. Judgments and estimates

      The preparation of financial statements in conformity with EU IFRS requires the Management Board to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenues and costs. Estimates and underlying assumptions are based on historical data and other factors considered as reliable under the circumstances, and their results provide grounds for an assessment of the carrying amounts of assets and liabilities which cannot be based directly on any other sources. Actual results may differ from those estimates.

      The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Information about critical estimates and judgements in applying accounting policies is included in note 47.

   5. Comparative financial information

      Comparative data or data presented in previously published financial statements has not been updated.

   6. Foreign currency

      Transactions in foreign currencies are translated to Polish zloty at exchange rates effective on a day preceding the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with the balance sheet date into Polish zloty at the average exchange rate quoted by the National Bank of Poland ("NBP") for that date. The foreign exchange differences arising on translation of transactions denominated in foreign

      currencies and from the balance sheet valuation of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the average NBP exchange rate in effect at the date of the valuation. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated at the average NBP foreign exchange rate in effect at the date the fair value was determined.

   7. Financial instruments

      Non-derivative financial instruments

      Financial assets

      Financial assets are classified in the following measurement categories depending on the business model in which assets are managed and their cash flow characteristics:

      • assets measured at amortised cost - if the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows, and the contractual terms of this financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding;

      • financial asset measured at fair value through other comprehensive income - if the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of this financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding;

      • assets measured at fair value through profit or loss - all other financial assets.

        Financial assets at initial recognition are measured at fair value plus, in the case of financial assets not measured at fair value through profit or loss, directly attributable transaction costs. Trade receivables that do not have a significant financial component are initially measured at their transaction price.

        Financial assets measured at amortised cost

        Financial assets measured at amortised cost include trade and other receivables, loans granted and cash and cash equivalents. Interest income from these financial assets is calculated using the effective interest rate method and is presented within Finance income.

        Financial assets measured at fair value through profit or loss

        Financial assets measured at fair value through profit or loss include derivative instruments not designated as hedging instruments and equity instruments for which the Company made such choice (shares of Asseco Poland S.A.). Financial assets classified to this category are measured at fair value and the subsequent changes in their fair value are recognized in profit or loss. The subsequent changes in their fair value of derivative instruments not designated as hedging instruments are presented in Finance income or Finance costs depending on the economic substance of hedged transaction.

        A financial asset is derecognised when the contractual rights to receive cash flows from the asset have expired or the Company has transferred substantially all the risks and rewards of the asset.

        Financial liabilities

        Financial liabilities include financial liabilities measured at amortised cost and financial liabilities measured at fair value through profit or loss.

        Financial liabilities are recognised initially at fair value and, in the case of financial liabilities which are not measured at fair value through profit or loss, net of directly attributable transaction costs.

        Financial liabilities measured at amortised cost

        Financial liabilities measured at amortised cost include loans and borrowings, issued bonds, trade and other payables and lease liabilities. Interest expense related to these financial liabilities is calculated using the effective interest rate method and is presented in Finance costs.

        Financial liabilities measured at fair value through profit or loss

        Financial liabilities measured at fair value through profit or loss include derivative instruments not designated as hedging instruments. Financial liabilities classified to this category are measured at fair value and the subsequent changes in their fair value are recognized in profit or loss. The subsequent changes in their fair value of derivative instruments not designated as hedging instruments are presented in Finance Income or Finance costs depending on the economic substance of hedged transaction.

        A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the profit or loss. In case of early repayment, the difference between the carrying amount of the repaid liability and the carrying amount of the new liability is recognized in profit or loss.

        Accounting policies related to gains and losses on investment activities and finance costs are presented in 5t.

        Derivative financial instruments

        Hedge accounting

        The Company may use derivative financial instruments such as forward currency contracts, interest rate swaps and cross-currency interest rate swaps to hedge its foreign currency and interest rate risks.

        For the purpose of hedge accounting, the Company's hedges are classified as fair value hedges and cash flow hedges when hedging exposure to change in the fair value and variability in cash flows that is either attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction.

        At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the effectiveness of changes in the hedging instrument's fair value in offsetting the exposure to changes in cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

        The Company assesses the existence of an economic relationship quantitatively through a prospective effectiveness test for relationships involving IRS and CIRS instruments

        designated for hedge accounting. The Company designates a hypothetical derivative that reflects the parameters and changes in the value of the hedged item. Based on the selected method, the Company expects that changes in the values of the hedging instrument and the hedged item will move in opposite directions, resulting in an offsetting effect.

        Hedge ratio for the Company's hedging relationships is 1:1 due to the match between the notional value of the hedging instruments and the risk exposure designated for hedge accounting.

        For cash flow hedges the effective portion of the gain or loss on the hedging instrument is recognized directly as other comprehensive income in the hedge valuation reserve, while any ineffective portion is recognized immediately in the profit or loss.

        The amounts recognized within other comprehensive income are transferred from equity to the income statement when the hedged transaction affects profit or loss, such as when the related gain or loss is recognized in Finance income or costs or when a forecasted sale occurs.

        Gains and losses from the settlement of derivative instruments that are designated as, and are effective hedging instruments, are presented in the same position as the impact of the hedged item. The derivative instrument is divided into a current portion and a non-current portion only if a reliable allocation can be made.

   8. Equity

      Ordinary shares

      Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity.

      Preferred shares

      Preference share capital is classified as equity, if it is non-redeemable, or redeemable only at the Company's option, and any dividends are discretionary. Dividends thereon are recognized as distributions within equity.

      Costs attributable to the issue and public offer of shares

      Costs attributable to a new issue of shares are recognized in equity while costs attributable to a public offering of existing shares are recognized directly in finance costs. These costs relating to both new issue and sale of existing shares are recognized on a pro-rata basis in equity and finance costs.

      Share premium

      Share premium includes the excess of issue value over the nominal value of shares issued decreased by share issuance-related consulting costs.

      Retained earnings

      Retained earnings include net result, reserve capital and effect of merger with the Company. Effect of merger is calculated as the difference between assets and liabilities of the merged entity.

      In accordance with the provisions of article 396 of the Commercial Companies Code, joint-stock companies are required to transfer at least 8% of their annual net profits to reserve capital until its amount reaches one third of the amount of their share capital. This capital is excluded from distribution, however, it can be utilised to cover accumulated losses.

   9. Property, plant and equipment

      Property, plant and equipment owned by the Company

      Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.

      Cost includes purchase price of the asset and other expenditure that is directly attributable to the acquisition and bringing the asset to a working condition for its intended use, including initial delivery as well as handling and storage costs. The cost of purchased assets is reduced by the amounts of vendor discounts, rebates and other similar reductions received.

      The cost of self-constructed assets and assets under construction includes all costs incurred for their construction, installation, adoption, and improvement as well as borrowing costs incurred until the date they are accepted for use (or until the reporting date for an asset not yet accepted for use). The above cost also may include, if necessary, the estimated cost of dismantling and removing the asset and restoring the site. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

      When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

      Investment property

      Investment property is defined as a property (land, building, or both) held by the Company to earn rentals or for capital appreciation or both.

      Investment property is measured initially at cost.

      Once recognized all investment property held by the Company are measured using the cost model as set out in IAS 16. This means that the assets are recognized at cost model as presented above in point Property Plant and Equipment owned by the Company.

      Investment property is removed from the balance sheet on disposal or when it is permanently withdrawn from use and no further economic benefits are expected from its disposal.

      Subsequent costs

      Subsequent cost of replacing a component of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the component will flow to the Company and the amount of the cost can be measured reliably. Replaced item is derecognised. Other property, plant and equipment related costs are recognized in profit and loss as incurred.

      Depreciation

      Depreciation is based on the cost of an asset less its residual value. Significant components of individual assets are assessed and if a component has a useful life that is different from the remainder of that asset, that component is depreciated separately.

      Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

      Land is not depreciated.

      The estimated useful lives for property, plant and equipment are as follows:

      Reception equipment	2 or 3 or 5	years
      Buildings and structures	2-61	years
      Technical equipment and machinery	2-22	years
      Vehicles	2-10	years
      Other	2-26	years

      Depreciation methods, useful lives and residual values of material assets are reviewed at each financial year-end and adjusted if appropriate.

      Leased assets

      Assets used by the Company under lease, tenancy, rental or similar contracts which meet lease definition, are classified separately in the balance sheet as right-of-use assets.

      Equipment that is provided to customers under operating lease agreements are recognized within non-current assets (Reception equipment in the balance sheet and depreciated as described in point related to depreciation). The set-top boxes are depreciation over a period that exceeds the period the lease agreements are entered into.

      Carrying amounts of reception equipment and other items of property, plant and equipment as well as right-of-use assets may be reduced by impairment losses whenever there is uncertainty as to those assets' revenue generating potential or their future use in the Company's operations. The accounting policies relating to impairment are presented in note 5m.

      Detailed accounting policies related to lease contracts are described in point 5u.

   10. Intangible assets

       Goodwill

       Goodwill is presented at purchase price less accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if possible impairment is indicated. Goodwill is allocated to acquirer's cash-generating units for the purpose of testing for impairment. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.

       Other intangible assets

       The Company capitalizes costs of IT software internally generated, including employee-related expenses, directly resulting from generating and preparing an asset to be capable of operating, if the Company is able to demonstrate: the technical feasibility of completing the intangible asset so that it will be available for use or sale; its intention to complete the intangible asset and use or sell it; its ability to use or sell the intangible asset; how the intangible asset will generate probable future economic benefits, the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; its ability to measure reliably the expenditure attributable to the intangible asset during its development.

       Other intangible assets acquired by the Company are stated at cost less accumulated amortization and impairment losses.

       Subsequent expenditure on existing intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in the profit or loss as incurred.

       Amortization is based on the cost of an asset less its residual value.

       Amortization is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

       The estimated useful lives for respective intangible assets groups are as follows:

       • Computer software: 2-15 years,

       • Other: 2-10 years.

   11. Shares in subsidiaries and associates

       Shares in subsidiaries and associates are measured at cost less impairment losses. Accounting principles relating to impairment testing are presented in note 5m.

       Subsidiaries are entities controlled by the Company. Associates are all entities over which the Company has significant influence but not control or joint control, over the financial and operating policies. This is generally the case where the Company holds between 20% and 50% of the voting rights.

   12. Inventories

       Inventories are measured at the lower of cost or net realizable value. Production cost of inventories is determined by using the weighted average cost of acquisition or production cost of inventory.

       The cost of inventories includes purchase price, costs relating directly to the acquisition and the costs related to preparing the inventory for use or sale.

       Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. In the case of set-top boxes, mobile phones, modems and tablets, which under the business model applied by the Company are sold below cost, the loss on the sale is recorded when transferred to the customer.

       The Company creates an allowance for slow-moving or obsolete inventories.

   13. Impairment of assets

       Financial assets measured at amortised cost

       The Company measures the loss allowance at an amount equal to lifetime expected credit losses for trade receivables, loans granted and contract assets. The trade receivables and loans receivables are assessed for impairment collectively in groups that share similar credit risk characteristics. The expected credit losses are estimated based on historical pattern for overdue receivables collection adjusted with currently available forward-looking information. The credit risk characteristics of contract assets correspond to the credit risk characteristics of trade receivables for a particular type of contract.

       The Company considers financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full.

       The Company considers a financial asset to be credit impaired when events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred, including significant financial difficulty of the debtor or a breach of contract, such as a default or past due event.

       A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

       Non-financial assets

       The carrying amounts of non-financial assets, other than inventories and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated.

       The recoverable amount of intangible assets which are not yet ready for use is assessed at each financial year-end.

       The Company considers on annual basis whether there are indicators that investments in subsidiaries suffered any impairment (i.a. value of net assets). If so, then the impairment test is performed and the recoverable amount of the investment is estimated based on value-in-use calculations.

       An impairment loss is recognized when the carrying amount of an asset or a cash-generating unit is greater than its recoverable amount. A cash-generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Impairment losses are recognized in the income statement. An impairment loss for a cash-generating unit is initially recognized as a decrease of goodwill assigned to this unit (group of units), then it proportionally reduces the carrying amount of other assets from this unit (group of units).

       The recoverable amount of an asset or a cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

       In the case of assets that do not generate independent cash flows, the value in use is estimated for the smallest identifiable cash-generating unit to which the asset belongs.

       An impairment loss for goodwill cannot be reversed. As for other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss other than that in respect of goodwill is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

   14. Employee benefits

       Defined contribution program

       The Company is obliged, under applicable regulations, to collect and remit the contribution to the state pension fund. These benefits, according to IAS 19 Employee Benefits represent state plans and are classified as defined contribution plans. Therefore, the Company's obligations for each period are estimated as the amount of contributions to be remitted for a given period.

       Defined benefit program - retirement benefits

       The Company is obliged to pay retirement benefits calculated in accordance with the relevant provisions of the Polish labour code. The minimum retirement benefit is as per the labour code provisions at the moment of payment.

       The calculation is carried out using the Projected Unit Credit Method. Employee rotation is estimated based on historical experience and forecasts of future employment levels.

       Changes in the value of the retirement benefit provision are recognized in the income statement. Actuarial gains and losses are recognized in the equity, in other comprehensive income in full in the period they originated.

       Short-term employee benefits

       Short-term employee benefit obligations are measured on an undiscounted basis and are recognized as an expense as the related service is provided.

       The Company recognizes a liability and charges the income statement for the amounts expected to be paid under short-term bonuses, if the Company has a legal or constructive

       obligation to make such payments as a result of past services provided by the employees and the obligation can be estimated reliably.

   15. Provisions

       A provision is recognized when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. Where the effect of the time value of money is material, the Company discounts the provision, using a pre-tax discount rate that reflects current market assessments of the time value of money and those risks specific to the component of the liability.

       Certain disclosures may not be included in these financial statements as they relate to sensitive information.

       Warranty provision

       A warranty provision is recognized when products or goods, for which the warranty was granted, are sold. The amount of the provision is based on historical warranty data and on a weighted average of all possible outflows connected with warranty claims against their associated probabilities.

   16. Contingent liabilities

       A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events, but its amount cannot be estimated reliably or it is not probable that there will be an outflow of resources embodying economic benefits.

       A contingent liability is disclosed in the financial statements unless the possibility of an outflow of resources embodying economic benefits is remote.

       Unless the possibility of any outflow in settlement is remote, the Company discloses for each class of contingent liability at the end of the reporting period a brief description of the nature of the contingent liability:

       • an estimate of its financial effect,

       • an indication of the uncertainties relating to the amount or timing of any outflow, and

       • the possibility of any reimbursement.

   17. Revenue

       Identifying a contract with a customer

       The Company applies contract-by-contract approach, meaning that the transaction price and separate performance obligations and rights arising under the contract are determined at the level of a distinct contract with a subscriber. The Company does not apply portfolio approach.

       Determination of the transaction price

       The estimation regarding transaction price is updated during contract period. If a contract is based on a variable consideration, the Company always recognizes the minimum value of consideration at the moment of concluding the contract. Contract length is assumed to be the nominal basic period resulting from the contract terms.

       The time value of money is included in the transaction price if the contract contains a material financing factor. This factor is considered at the distinct contract level. The Company recognizes a significant financing factor only within installment sales. Identification of the discount causes a reduction in nominal sales revenues by the financing factor value and recognition of interest during the term of the contract. To calculate the significant financing

       factor the Company uses a discount rate that reflects the customer's credit risk at the moment of concluding the contract.

       The Company adopted the following hierarchy of methods for determining the fair price (unit price) of equipment (the preferred method is the method of prices obtained from the sale of similar goods):

       1. Price obtained from the sale of similar goods,

       2. Price based on accounting cost.

       Company adopted the following hierarchy of methods for determining the unit price of a service:

       1. Price obtained from the sale of similar goods,

       2. Residual approach (in the B2B area).

          Revenue recognition

          Revenues are recognized in the amount of transaction price for the sale of services and equipment, net of value of discounts, refunds and rebates, in the ordinary course of business. Revenue is recognized only when there is a high probability that the subscriber makes payment, the associated expenses can be reliably assessed and the revenue amount can be reliably measured. If there is a likelihood of granting rebates whose value can be precisely measured, such rebates decrease sales revenue upon their recognition.

          In order to properly recognize revenue, the Company assesses at the contract inception whether each separate performance obligation is satisfied over time or at a point in time.

          The Company's main sources of revenue are recognized as follows:

          • Retail revenue consists primarily of subscription fees paid by our pay digital television contract customers and our contract customers for telecommunication services. Retail revenue also includes received contractual penalties related to terminated agreements which are recognized when the contract is terminated and revenue from the rental of reception equipment. Revenue from above mentioned services is recognized as these services are provided.

            Revenue from the rental of reception equipment is recognized on a straight-line basis over the minimum base period of the subscription contract.

            Revenues from prepaid services are recognized in profit or loss once the prepaid credit is utilised or forfeited.

          • Wholesale revenue consists of revenue from the sale of broadcasting and signal transmission, advertising and sponsorship revenue, revenue from the sale of licenses, sublicenses and property rights.

            Wholesale revenue is recognized, net of any discount given, when the services are provided.

            Revenue from sale of equipment is measured at the fair value of the consideration received or receivable, in case of multi-element contracts after the allocation of the transaction price based on the standalone selling price, net of discounts, rebates and returns. Revenue from the sale of goods is recognized in profit or loss when the control has been transferred to the customer.

          • Other revenue is recognized, net of any discount given, when the relevant goods or service are provided.

            The Company's process for revenue recognition from multi-element contracts consists of:

          • assessment of all goods and services provided to the client under the contract and identifying separate performance obligations in that contract,

          • determining and allocating the transaction prices to separate performance obligations in the contract; the allocation is based on the reference to their relative standalone selling prices that could be obtained if the promised goods and services were sold individually in a separate transaction.

       Contract asset is the Company's right to remuneration in exchange for goods or services that the Company has transferred to a customer. It includes in particular corrections of consideration due according to the contract with customer regarding promotional offer that includes initial discounted periods.

       Contract liabilities is the Company's obligation to transfer services to a customer in exchange for remuneration the Company received (or the remuneration is due). It includes the correction of consideration due according to the contract with customer for the current or previous periods, allocated to obligations not completely fulfilled or partially unfulfilled.

   18. Distribution fees

       Commissions for distributors for registering new subscribers and for retention of existing subscribers are recognized during the minimum basic period of the subscription agreement and presented in the income statement in the Operating costs section in Distribution, marketing, customer relation management and retention costs.

       Turnover commissions for concluding a certain number of subscription contracts are recognized in the income statement as they are due.

       Commissions for distributors which will be settled within the period of 12 months after the balance sheet date are presented as current assets, however, the commissions, which will be settled after the 12-month period from the balance sheet date, are presented as non-current assets.

   19. Revenues and costs of barter transactions

       Revenues from barter transactions for dissimilar services or goods are recognized when the services are rendered or goods are delivered. Programming licenses, products or services are expensed or capitalized when received or used. The Company recognizes barter transactions based on the estimated fair value of the received programming licenses, products or services.

   20. Finance income and finance costs

       Finance income include interest receivable on funds invested by the Company, interest receivable on loans granted by the Company, dividends receivable, share in the profits of partnerships, gains from changes in the fair value of financial instruments measured through profit or loss, result on exchange rate differences and result on the sale of shares in subsidiaries and associates.

       Dividend income is recognized in the income statement when the Company acquires the right to receive it, except for interim dividends shown as other liabilities if it is probable that they will be required to be repaid based on the final distribution of the financial results of subsidiaries. Profits from partnership interests are recognized when the unconditional right to such profits is acquired. However, the share of losses is recognized in accordance with the partners' arrangements with respect to a specific company.

       Finance costs include interest payable on debt (including bank loans and bonds) and on lease liabilities, the result of realization and valuation of hedging instruments related to interest expense, costs of bank fees and commissions on debt, costs of guarantees resulting from

       signed credit and bond agreements, result on exchange rate differences and impairment losses on financial assets.

       Interest income and expense are determined using the effective interest rate.

       Foreign exchange gains and losses are reported net as finance income or expenses, depending on their total net position, except for foreign exchange differences on the valuation of loans, which are disclosed separately.

   21. Leasing

       Company as a lessor

       Agreements which meet the lease definition are classified as finance lease or operating lease. The main criterion is the extent to which the risks and rewards associated with the leased asset are transferred between the Company and the lessee.

       Similarly to agreements in which the Company acts as a lessee, the Company as a lessor also determines for each agreement: commencement date, lease term, lease payments and interest rate. At the commencement date lessor accounts for the finance lease by:

       • excluding carrying amount of the underlying asset,

       • recognizing net investment in the lease,

       • recognizing selling profit or loss in profit and loss statement (if applicable).

         For operating leases, the Company recognizes revenue in profit and loss statement on a straight line basis.

         Company as a lessee

         Assets

         Assets used under agreements which meet the lease definition are recognized as right-of-use assets and lease liabilities representing the Company's obligation to make payments for the underlying assets on the day when the leased assets are available for use by the Company.

         At the commencement date, the right-of-use assets are measured at cost and consist of the following:

       • the amount of the initial measurement of the lease liability,

       • any lease payments made at or before the commencement date, less any lease incentives received,

       • any initial direct cost incurred by the lessee,

       • an estimate of costs of dismantling, removing and restoring the underlying asset and/or the site where it is located.

         After the commencement date, the right-of-use assets are measured at cost less accumulated depreciation, accumulated impairment losses and adjusted for remeasurement of the lease liability resulting from reassessment or lease modification which does not require recognition of a separate lease component.

         Right-of-use assets are depreciated on a straight-line basis over the shorter of: the term of the lease agreement or the useful life of the underlying asset. If the Company is reasonably certain that ownership of the underlying asset will be transferred to the lessee by the end of the lease term - then the right-of-use asset shall be depreciated from the commencement date to the end of its useful life.

         The Company depreciates the right-of-use assets as follows:

       • office space and other premises: 3-13 years.

         Right-of-use assets are subject to impairment based on the accounting policies as presented in note 5m.

         Liabilities

         At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

       • fixed payments (including in-substance fixed payments), less any lease incentives receivable,

       • variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date,

       • the exercise price of purchase option if the lessee is reasonably certain to exercise that option,

       • payments of penalties for early terminating the lease (understood as any economic factors discouraging the Company from terminating the contract), if the lease term reflects that the lessee will exercise the option to terminate the lease,

       • amounts expected to be payable by the lessee under residual value guarantees.

         Lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. Otherwise the lessee's incremental borrowing rate is used.

         After the commencement date, the Company measures the lease liability by:

       • increasing the carrying amount to reflect interest expense on the lease liability;

       • reducing the carrying amount to reflect the lease payments made;

       • remeasuring the carrying amount to reflect any reassessment or lease modifications,

         e.g. change in the lease term or the amount of future lease payments.

         Interest expenses on lease liabilities are recognized in profit or loss over the term of the lease.

   22. Income tax

       Income tax expense/benefit for the year comprises current and deferred tax. Income tax is recognized in profit or loss except for items recognized directly in other comprehensive income.

       Current tax is the tax payable on the taxable income for the year, using tax rates enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

       Deferred tax is recognized using the balance sheet method, in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxes are measured based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, respectively, using tax rates enacted or substantively enacted at the balance sheet date.

       The Company does not recognize deferred tax liability for taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements when the Company is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.

       A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be partly or wholly realised. When not recognized deferred tax asset becomes recoverable, it is recognised to the extent that it has become probable that future taxable profits will allow the deferred tax assets to be recovered.

       The Company recognizes a deferred tax asset used to carry over unused tax losses to the extent that it is probable that the future taxable profits will be available and unused tax losses may be utilized. While assessing whether the future taxable profits available will be sufficient, the Company takes into account inter alia forecasted future tax revenues.

       Deferred tax assets and liabilities are offset by the Company as criteria for offsetting from IAS 12 are fulfilled.

   23. Earnings per share

       The Company presents basic and diluted earnings per share for its ordinary and preference shares. Basic earnings per share are calculated by dividing the period's profit or loss from continuing operations attributable to ordinary and preference shareholders of the Company by the weighted average number of ordinary and preference shares outstanding during the period. Diluted earnings per share are calculated by dividing the period's profit or loss from the continued operations attributable to ordinary and preference shareholders by the weighted average number of ordinary and preference shares adjusted for all potentially dilutive ordinary and preference shares.

   24. Segment reporting

       The Company operates in the individual and business customers segments which relates to the provision of services to the general public, including digital television transmission signal, mobile services, the Internet access services, the mobile TV services and the online TV services.

       The Company conducts its operating activities in Poland.

       Further information on segments is presented in the consolidated financial statements of the Group.

   25. Cash flow statement

       Cash and cash equivalents in the cash flow statement are equal to cash and cash equivalents presented in the balance sheet.

       The purchase of reception equipment provided to clients under operating lease contracts is classified in the cash flow statement in operating activities. The purchase and sales of reception equipment are classified in the cash flow statement in operating activities and presented as Net disposals/(additions) in reception equipment provided under operating lease.

       Purchases of property, plant and equipment or intangible assets are presented in their net amount (net of VAT).

   26. Business combinations among entities under common control

       In principle, the issues relating to acquisitions and business combinations are regulated by IFRS 3 "Business combinations". However, transactions under common control are excluded from the scope of this standard. The situation in which a given transaction or business phenomenon that require recognizing in financial statements prepared in accordance with IFRS are not regulated by the provisions of the individual standards is regulated by the provisions of IAS 8, points 10-12. These provisions put an entity which prepares its financial statements in accordance with IFRS under an obligation to determine an accounting policy and to use it on a consistent basis for similar transactions.

       The Company decided to apply the predecessor accounting method to account for the combination of entities that are under common control. This method is based on the assumption that the entities combining were, both before and after the transaction, controlled by the same shareholder and, therefore, the financial statements reflect the continuity of joint control.

       The predecessor accounting method guidelines for the merger of the parent company with its subsidiaries are as follow:

       • Assets and liabilities are not adjusted to reflect fair values as at the merger date. Instead, the acquirer recognizes in its financial statements assets and liabilities in the

         amount as recognized in the financial statements of the predecessor. "Predecessor values" are the carrying amounts of the merged subsidiary, which were recognized in the consolidated financial statements of the parent company. These amounts include the goodwill on acquisition of shares in a subsidiary recognized in the consolidated financial statements of the parent company.

       • Intercompany transactions and balances between the merging entities are eliminated.

       • Goodwill other than already recognized in the consolidated financial statements of the parent company is not recognized.

       • Share capital of the combined entity is the share capital of the acquiring entity. Share capital of a predecessor is eliminated.

       • Other elements of predecessor's equity are added to the relevant items of the acquiring company's equity. The difference between the value of net assets and payment is recognized in the Retained earnings.

   Pursuant to the predecessor accounting method, the Company recognizes in its financial statements the assets and liabilities of the acquired subsidiary at their carrying amounts as recognized in the consolidated financial statements of the Group.

   The Company recognized business combinations under common control prospectively from the date of the merger, i.e. standalone financial statements of the Company will include the assets, liabilities, income, costs and cash flows of acquired entities from the date of the legal merger. Comparative data will remain unchanged.

6. ‌Determination of fair values

   A number of accounting principles and disclosures require the determination of fair value for both financial and non-financial assets and liabilities. The methods for determining fair values are described below. In justified cases, further information on methods of fair value measurement is described in the appropriate notes specific to that asset or liability.

   Derivatives

   The fair value of derivatives is calculated based on their quoted closing bid price at the balance sheet date or, in the lack thereof, other inputs that are observable for the asset or liability, either directly (i. e. as prices) or indirectly (i. e. derived from prices). In the second case, the fair value of derivatives is estimated as the present value of future cash flows, discounted using the market interest rate at the reporting date. Information on the structure of Polish and Eurozone interest rates and Polish zloty exchange rate are used in order to estimate future cash flows and market interest rate.

   Non-derivative financial assets

   The fair value of non-derivative financial asset for disclosure purposes is estimated as the present value of future cash flows discounted using a market interest rate as at the balance sheet date. If instruments are quoted, the fair value is estimated based on market prices.

   Non-derivative financial liabilities

   Fair value, which is determined for disclosure purposes, is calculated based on liabilities' quoted closing bid price at the balance sheet date or, in the lack thereof, estimated on the present value of future principal and interest cash flows, discounted using the market interest rate at the reporting date. Market interest rate is estimated as interbank interest rate for a given currency zone (WIBOR, EURIBOR) plus a margin regarding the Company's credit risk. A market interest rate for a lease contract is estimated based on interest rates for similar lease contracts.

7. ‌Approval of the Financial Statements and identification of the Consolidated Financial Statements

These financial statements were approved for publication by the Management Board on 28 April 2026.

The Company as the Parent Company prepared consolidated financial statements for the year ended 31 December 2025 which were approved for publication by the Management Board on 28 April 2026.

Retail revenue mainly consists of pay-TV, telecommunication services, revenue from rental of reception equipment and contractual penalties related to terminated agreements.

‌9. Operating costs

for the year ended Note 31 December 2025 31 December 2024

a) Salaries and employee-related costs

for the year ended 31 December 2025 31 December 2024

Salaries 146.3 140.9

Social security contributions 24.3 23.1

Other employee-related costs 8.3 6.8

Total 178.9 170.8

Average headcount of non-production employees*

for the year ended 31 December 2025 31 December 2024

Employment contracts (full-time equivalents) 924 962

* excluding workers who did not perform work in the reporting period due to long-term absences

Foreign exchange differences on loans and borrowings

Cumulative catch-up resulting from the modification of cash flows as a result of the conversion/redemption of bonds

16.5 26.7

- 2.5

Cumulative catch-up resulting from the modification of cash flows as a result of prepayment of the loan

0.2 -

Other costs 12.9 40.5

Total 1,497.5 785.1

* includes the change in the value of shares of Asseco Poland S.A. and the loss on the disposal of shares

Financing costs

Net financing costs, i.e., costs directly related to the financing obtained, consisted of the following costs and revenues:

Foreign exchange differences on loans and borrowings

Cumulative catch-up resulting from the modification of cash flows as a result of the conversion/redemption of bonds

(16.5) (26.7)

- (2.5)

Change in deferred income tax in the income statement

(38.8) 27.1

Income tax expense in the income statement (21.0) 45.5

Income tax recognized in other comprehensive income

Income tax expense recognized in other comprehensive income - total

(2.8) -

Offsetting of deferred tax liabilities and deferred tax assets

(160.5) (166.3)

Deferred tax assets in the balance sheet - -

Offsetting of deferred tax liabilities and deferred tax assets

(160.5) (166.3)

Deferred tax liabilities in the balance sheet 25.8 67.4

The tax authorities may at any time inspect the books and records within 5 years from the end of the year when a tax declaration was submitted, and may impose additional tax assessments with penalty interest and penalties. Furthermore, on 15 July 2016 provisions of General Anti-Avoidance Rule (GAAR) were introduced, which aim at preventing establishing and using artificial legal arrangements with tax savings as its principal purpose. Frequent amendments in the tax laws and contradicting legal interpretations among the tax authorities result in uncertainties and lack of consistency in the tax system, which in fact lead to difficulties in the judgement of the tax consequences in the foreseeable future.

International Tax Reform - Global Minimum Tax Rate

In light of the obligation to incorporate the provisions of Council Directive (EU) 2022/2523 dated 14 December 2022, concerning the establishment of a global minimum tax rate for international corporate groups and large domestic groups within the European Union ('Directive'), which aims to mitigate competition regarding corporate income tax rates by instituting a global minimum tax rate, Poland has enacted the law dated 6 November 2024, regarding the taxation of equalization for components of international and domestic groups (hereinafter referred to as "the Law"). This Law took effect on 1 January 2025.

Pursuant to the Law, the tax may encompass components of international and domestic groups operating in Poland, whose revenues reported in the consolidated financial statements of the ultimate parent company amounted to no less than 750 EUR in at least two of the four tax years immediately preceding the relevant tax year.

Groups subject to the global equalization tax framework are mandated to compute the effective tax rate (ETR) on income derived from each jurisdiction in which they operate. Should this rate fall below 15%/16%/17% in the years 2024, 2025 and 2026-2027,respectively, there arises an obligation to remit the equalization tax.

The principles of Pillar 2 have introduced a transitional simplification for the years 2024-2027, stipulating that if a group meets at least one of three tests (termed "safe harbors") in a given country during a particular year, the equalization tax is deemed zero, and the group is only required to submit a simplified declaration.

Cyfrowy Polsat Capital Group joined international group under global equalization tax. Within the Cyfrowy Polsat Capital Group, a project has been initiated aimed at assessing the implications of the Law's provisions on the Company's obligations within the Capital Group, particularly regarding the potential application of the so-called transitional safe harbors, which facilitate simplified calculations of the equalization tax, as well as the administrative duties arising from the Law.

Calculations based on standalone financial statements were performed for the following jurisdictions included in Capital Group: Poland, Cyprus, Belgium, Malta, Ukraine, Switzerland and the United Kingdom. In 2024-2025 for all mentioned jurisdictions, excluding Cyprus, at least one of the tests allowing the use of transitional safe harbors has been met. The Group estimates the absence of any potential equalization tax for Cyprus companies and lack of its impact on the Company's consolidated financial statement.

The Group has implemented the mandatory exception concerning the recognition and disclosure of information regarding deferred tax assets and liabilities associated with income tax under Pillar 2, in accordance with the amendments to IAS 12 issued in May 2023.

1. ‌EBITDA (unaudited)

   EBITDA (earnings before interest, taxes, depreciation, amortization, impairment and liquidation, other finance income and costs) presents the Company's key measure of earnings performance. The level of EBITDA measures the Company's ability to generate cash from recurring operations, however it is neither a measure of liquidity nor cash level. The Company defines EBITDA as operating profit adjusted by depreciation, amortization, impairment and liquidation. EBITDA is not an IFRS EU measure, and as such can be calculated differently by other entities.

   		for the year ended
   	31 December 2025	31 December 2024
   Net profit/(loss) for the period	(550.3)	405.8
   Income tax (see note 12)	(21.0)	45.5
   Finance income (see note 10)	(755.8)	(1,074.3)
   Finance costs (see note 11)	1,497.5	785.1

   Depreciation, amortization, impairment and liquidation* (see note 9)

   201.4 202.1

   EBITDA (unaudited) 371.8 364.2

   * depreciation, amortization, impairment and liquidation comprise depreciation and impairment of property, plant and equipment, amortisation and impairment of intangible assets and right-of-use assets as well as net book value of disposed property, plant, equipment and intangible assets

2. ‌Basic and diluted earnings per share

As at the balance sheet date, the Company did not have financial instruments that could have a dilutive effect, therefore the Company's diluted earnings per share are equal to basic earnings per share.

Weighted average number of ordinary and preference shares in the year

550,703,531 550,703,531

Earnings per share in PLN (not in millions) (1.00) 0.74