Auditor’s opinion on the audit of annual consolidated financial statements 2024

For the Shareholders of PKP Cargo Spółka Akcyjna under restructuring

ul. Abpa Antoniego Baraniaka 88 E 61-131 Poznań

Poland

T +48 61 62 51 100

F +48 61 62 51 101

https://www.GrantThornton.pl

Grounds for the opinion

We have been engaged to audit the annual consolidated financial statements of the Group the parent company of which is PKP CARGO Spółka Akcyjna under restructuring (Parent Company) with its registered office in Warsaw at ul. Grójecka 17, which comprise the consolidated statement of financial position prepared as at 31 December 2024, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flows for the financial year ended on that date, and notes to the consolidated financial statements containing information on significant accounting policies and other explanatory information.

We are not expressing an opinion on the accompanying annual consolidated financial statements. Due to the significance of the matters described in the "Grounds for the refusal to issue an opinion" section, we have been unable to obtain sufficient and appropriate audit evidence to provide a basis for an audit opinion on the annual consolidated financial statements in question.

Our refusal to issue an opinion is consistent with the additional report for the Audit Committee issued on the date of this audit report.

Grounds for the refusal to issue an opinion

In note 1.3 "Going concern assumption, restructuring measures," the Parent Company's management (i.e. the Restructuring Administrator) presented selected information explaining the following circumstances and the resulting significant uncertainty regarding:

• recording of negative financial results, chiefly due to a decrease in revenues from contracts with customers (as a result of a lower freight volume),

• consequences of the ongoing war in Ukraine and the energy crisis in Europe (along with higher energy prices), exerting a significant impact on businesses and resulting in relatively low freight volumes,

• activities of the Parent Company in 2022-2023 focused on moving coal from seaports to energy industry customers, which limited its ability to compete in the most profitable freight categories and resulted in the loss of some customers,

• high inflation that persisted in 2023, which caused an increase in prices for purchased commodities, materials and services, while putting strong upward pressure on raising employee wages,

  
  
  Audit - Taxes - Outsourcing - Consulting services

  Member of Grant Thornton International Ltd

  Grant Thornton Polska Prosta Spółka Akcyjna [simple joint-stock company]. Audit Firm no. 4055.

  Management Board: Tomasz Wróblewski - President, Dariusz Bednarski - Vice-President, Jan Letkiewicz - Vice-President. Address of the registered office: 61-131 Poznań, ul. Abpa Antoniego Baraniaka 88 E. NIP: 782-25-45-999, REGON: 302021882.

  Bank account: 31 1090 1476 0000 0001 3554 7340. District Court for Poznań - Nowe Miasto and Wilda in Poznań, 8th Commercial Division, KRS no. 0001002477

• pursuit of an expansionary investment policy resulting from large capital expenditures, predominantly in the rolling stock area,

• significant decline in demand for the services provided by the Group, which exerted into a negative impact on its financial and liquidity standing and its ability to settle its current liabilities, including in the form of failure to meet the conditions specified in the loan agreements entered into by the Parent Company as at 31 December 2024.

  At the same time, on 27 June 2024, the Parent Company filed a petition for the opening of remedial proceedings, following which, on 25 July 2024, it received a decision on the opening of restructuring proceedings. As at the date of preparation of the consolidated financial statements, the Parent Company is in the process of preparing a Restructuring Plan. On 28 February 2025, the Restructuring Administrator obtained approval from the Judge-Commissioner to extend the deadline for submitting the Restructuring Plan until 30 June 2025.

  During the conduct of our audit procedures, we failed to obtain sufficient and appropriate evidence to provide a basis for stating whether the going concern assumption adopted by the Group when preparing the consolidated financial statements is valid and whether the accounting estimates regarding, among others, liabilities and impairment losses are correct. Most importantly:

• We have not received sufficient and appropriate audit evidence to confirm the stance adopted by the Parent Company's management that the remedial proceedings will be accepted by the court and the Parent Company's creditors.

• We were unable to obtain what we would consider sufficient and appropriate audit evidence in relation to the information presented in the financial statements that current cash flow projections indicate that the Group will have sufficient funds generated from current operations to cover the its current liabilities maturing within the upcoming 12 months. As at the date of the audit report, we have not received a restructuring plan or, in particular, long-term financial forecasts from the Parent Company, because according to the statement by the Parent Company's management, work on these documents is in progress. The deadline for submitting the aforementioned document to the court had already been postponed in the past. The lack of documentation related to these areas prevents us from assessing the likelihood that the restructuring plan will be completed within the next two months and that liquidity will be maintained. The liquidity models that have been presented contain assumptions for which we have not obtained sufficient and appropriate audit evidence. This situation also prevents us from assessing whether the assumptions and plans envisaged by the Parent Company will be implemented in accordance with its expectations.

In connection with these matters, which exert a material and extensive impact on the consolidated financial statements, we have been unable to verify the going concern assumption adopted by the Parent Company's management and whether any adjustments might be considered necessary in relation to recognized and unrecognized liabilities, provisions and impairment losses as well as other components of the consolidated statement of profit or loss and comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows.

Key audit matters

Other than the matters described in the "Grounds for the refusal to issue an opinion" section, there are no other key audit matters, including the most significant assessed risks of material misstatement, that are required to be reported in our audit report.

Responsibility of the Parent Company's management and Supervisory Board for the annual consolidated

financial statements

The Parent Company's management is responsible for the preparation of the annual consolidated financial statements which gives a true and fair view, in all material respects, of the Group's financial standing, financial performance and cash flows in compliance with International Accounting Standards, International Financial Reporting Standards and related interpretations published in the form of European Commission regulations, adopted accounting principles (policies) and applicable laws as well as the Articles of Association. The Parent Company's management is responsible for internal control as it determines is necessary to enable the preparation of the annual consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the annual consolidated financial statements, the Parent Company's management is responsible for assessing the Group's ability to continue as a going concern, disclosing, where applicable, matters related to going concern and for adopting the going concern basis of accounting, except where the Parent Company's management either intends to liquidate or discontinue operations, or there is no realistic alternative to the liquidation or discontinuation of operations.

Pursuant to the Accounting Act of 29 September 1994 (Accounting Act), the Parent Company's management and Members of the Parent Company's Supervisory Board are required to ensure that the annual consolidated financial statements comply with the requirements of the Accounting Act. Members of the Parent Company's Supervisory Board are responsible for overseeing the Group's financial reporting process.

Auditor's responsibility for the audit of the consolidated annual financial statements

We are responsible for auditing the annual consolidated financial statements in accordance with:

• Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Oversight (Act on Statutory Auditors),

• National Auditing Standards as adopted by resolutions of the National Council of Auditors and the Polish Agency for Audit Oversight (NAS), and

• Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC (Regulation 537/2014).

However, due to the matters described in the "Grounds for the refusal to issue an opinion" section of our report, we

have been unable to express an opinion on the annual consolidated financial statements in question.

The scope of our audit has not included an assurance on the Group's future viability or the efficiency or effectiveness of the management of the Parent Company's affairs now or in the future.

We are independent of the Group companies within the meaning of the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), adopted by resolution of the National Council of Auditors as the professional ethics rules for certified auditors and with other ethical requirements applicable to the audit of financial statements in Poland. In particular, during the audit, the key auditor and the audit firm remained independent of the Group companies in compliance with the independence requirements set out in the Act on Statutory Auditors and Regulation 537/2014.

Moreover, we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.

Report on other requirements of the law and regulations

Activity report, corporate governance statement

Responsibility of the Parent Company's management and Supervisory Board

The Parent Company's management is responsible for preparing the activity report and the corporate governance statement, which is a separate part of the report, in compliance with the Accounting Act and other applicable laws. Moreover, the Company's management and Members of the Parent Company's Supervisory Board are required to ensure that the activity report fulfills the requirements of the Accounting Act.

Responsibilities of the auditor

We are not expressing any form of assurance under National Auditing Standards regarding the activity report or the corporate governance statement, which is a separate part thereof. Our responsibility in accordance with the requirements of the Act on Statutory Auditors is to express an opinion on whether the activity report, to the extent unrelated to sustainability reporting, has been prepared in accordance with the regulations and whether it is consistent with the information contained in the annual consolidated financial statements, and to make a statement as to whether, in the light of our knowledge of the Group and its environment obtained during our audit, we have identified any material misstatements in the activity report with an indication of the nature of each such material misstatement. Moreover, we are required to express an opinion on whether the Group has included the required information in its corporate governance statement.

Opinion on the activity report

In our opinion, the activity report has been prepared in compliance with the applicable regulations, specifically in compliance with the provisions of Article 55(2a) of the Accounting Act and §71 of the Regulation of the Minister of Finance of 29 March 2018 on the Current and Periodic Information Transmitted by Securities Issuers and the Conditions for Recognizing the Information Required by the Regulations of a Non-Member State as Equivalent (Regulation on Current and Periodic Information) and is consistent with the information contained in the attached annual consolidated financial statements. Furthermore, we declare that, based on our knowledge of the Group and its environment obtained during our audit of the annual consolidated financial statements, we have not identified any material misstatements in the activity report, except for the possible consequences of the issues described in the

"Grounds for the refusal to issue an opinion" section.

Opinion on the corporate governance statement

In our opinion, the Group's corporate governance statement contains the information specified in §70(6)(5) of the Regulation on Current and Periodic Information. The information specified in §70(6)(5)(c)-(f), (h) and (i) of the Regulation on Current and Periodic Information contained in the corporate governance statement is consistent with the applicable regulations and the information contained in the annual financial statements.

Information on sustainability reporting and its assurance

The Group's sustainability reporting, presented as a separate part of the Group's activity report and presented in section 10 of this report, is subject to a separate assurance engagement carried out by our audit firm and a different key auditor than the one who has audited the financial statements.

Opinion on the compliance of the consolidated financial statements prepared in a single electronic reporting format with the requirements of the regulation on regulatory technical standards on the specification of a single electronic reporting format

In connection with the audit of the annual consolidated financial statements, we have been engaged to perform an assurance service whereby reasonable assurance would be provided with respect to an opinion on whether the Group's annual consolidated financial statements as at and for the year ended 31 December 2024, prepared in a single electronic reporting format contained in the file named esef_pkpcargosa-2024-12-31-0-pl.zip (consolidated financial statements in ESEF format) have been marked up in accordance with the requirements set out in 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 (ESEF Regulation).

Identification of the criteria and description of the engagement

The consolidated financial statements in ESEF format have been prepared by the Parent Company's management in order to comply with the marking up requirements and technical requirements for the specifications of the single electronic reporting format set out in the ESEF Regulation. The subject matter of our assurance service is verification of the compliance of the marking up of the consolidated financial statements in ESEF format with the requirements of the ESEF Regulation, because the requirements set out in these regulations constitute, in our opinion, the appropriate criteria for us to express our opinion.

Responsibility of the Entity's management and Supervisory Board

The Parent Company's management is responsible for preparing the consolidated financial statements in ESEF format in compliance with the marking up requirements and technical requirements for the specifications of the single electronic reporting format set out in the ESEF Regulation. This responsibility includes the selection and application of proper XBRL markups using the taxonomy specified in the said regulations.

The responsibility of the Parent Company's management also includes designing, implementing and maintaining an internal control system to ensure that the consolidated financial statements in ESEF format are prepared without material misstatements in compliance with the requirements of the ESEF Regulation.

Members of the Parent Company's Supervisory Board are responsible for supervising the financial reporting process,

including the preparation of financial statements in accordance with the format required by the applicable laws.

Responsibilities of the auditor

Our objective has been to express an opinion, based on the assurance service provided, while providing reasonable assurance that the consolidated financial statements in ESEF format have been marked up in accordance with the requirements of the ESEF Regulation.

We have carried out the service in accordance with National Standard for Assurance Services Other than Audits and Reviews 3001PL Audit of Financial Statements Prepared in a Single Electronic Reporting Format, which was adopted by a resolution of the National Council of Auditors (KSUA 3001PL) and, where applicable, in accordance with National Standard for Assurance Services Other than Audits and Reviews 3000 (Z) in the wording adopted in International Standard on Assurance Services 3000 (revised) Assurance Engagements other than Audits or Reviews of Historical Financial Information, as adopted by a resolution of the National Council of Auditors (KSUA 3000 (Z)).

The standard requires the certified auditor to plan and perform procedures in a manner enabling them to obtain reasonable assurance that the consolidated financial statements in ESEF format have been prepared in accordance with the specified criteria. Reasonable assurance is a high level of assurance, but does not guarantee that a service