Powszechny Zaklad Ubezpiecze? Spólka Akcyjna : PZU SA Supervisory Board Report for 2025

About this update from Powszechny Zaklad Ubezpieczen Spolka Akcyjna

Attachment to Resolution No. URN/81/2026 adopted by the PZU SA Supervisory Board on 20 May 2026 PZU SA SUPERVISORY BOARD'S REPORT FOR 2025 Composition of the PZU SA Supervisory Board As of 1 January 2025, the Supervisory Board of PZU SA ("the Supervisory Board") was composed on: Marcin Kubicza - Chairman of the Supervisory Board, Małgorzata Kurzynoga - Vice Chairman of the Supervisory Board, Anna Machnikowska - Secretary of the Supervisory Board, Michał Bernaczyk - Member of the Supervisory Board; Anita Elżanowska - Member of the Supervisory Board; Filip Gorczyca - Member of the Supervisory Board; Michał Jonczynski - Member of the Supervisory Board; Andrzej Kaleta - Member of the Supervisory Board; Wojciech Olejniczak - Member of the Supervisory Board; Adam Uszpolewicz - Member of the Supervisory Board. On 10 January 2025, the Extraordinary Shareholder Meeting of PZU SA dismissed Wojciech Olejniczak from the Supervisory Board. On 21 January 2025, the Extraordinary Shareholder Meeting of PZU SA appointed Andrzej Klesyk to the Supervisory Board. In light of the above, the Supervisory Board was composed as follows: Marcin Kubicza - Chairman of the Supervisory Board, Małgorzata Kurzynoga - Vice Chairman of the Supervisory Board, Anna Machnikowska - Secretary of the Supervisory Board, Michał Bernaczyk - Member of the Supervisory Board; Anita Elżanowska - Member of the Supervisory Board; Filip Gorczyca - Member of the Supervisory Board; Michał Jonczynski - Member of the Supervisory Board; Andrzej Kaleta - Member of the Supervisory Board; Andrzej Klesyk - Member of the Supervisory Board; Adam Uszpolewicz - Member of the Supervisory Board. On 27 January 2025, the Supervisory Board delegated the Supervisory Board Member Andrzej Klesyk to temporarily perform the function of the President of the Management Board until the appointment of the President of the PZU SA Management Board, but for a period not exceeding 3 months. On 28 February 2025, Andrzej Klesyk tendered his resignation from the Supervisory Board, effective 2 March 2025. In light of the above the Supervisory Board was composed as follows: Marcin Kubicza - Chairman of the Supervisory Board, Małgorzata Kurzynoga - Vice Chairman of the Supervisory Board, Anna Machnikowska - Secretary of the Supervisory Board, Michał Bernaczyk - Member of the Supervisory Board; Anita Elżanowska - Member of the Supervisory Board; Filip Gorczyca - Member of the Supervisory Board; Michał Jonczynski - Member of the Supervisory Board; Andrzej Kaleta - Member of the Supervisory Board; Adam Uszpolewicz - Member of the Supervisory Board. On 25 June 2025, the Ordinary Shareholder Meeting of PZU SA dismissed Michał Bernaczyk from the Supervisory Board and appointed Maciej Szwarc and Beata Stelmach as its members. In light of the above, the Supervisory Board was composed as follows: Marcin Kubicza - Chairman of the Supervisory Board, Małgorzata Kurzynoga - Vice Chairman of the Supervisory Board, Anna Machnikowska - Secretary of the Supervisory Board, Anita Elżanowska - Member of the Supervisory Board; Filip Gorczyca - Member of the Supervisory Board; Michał Jonczynski - Member of the Supervisory Board; Andrzej Kaleta - Member of the Supervisory Board; Beata Stelmach - Member of the Supervisory Board, Maciej Szwarc - Member of the Supervisory Board, Adam Uszpolewicz - Member of the Supervisory Board. On 22 October 2025, by a written statement of the shareholder of PZU SA - the State Treasury, Kazimierz Karolczak was appointed to the Supervisory Board. In light of the above, the Supervisory Board was composed as follows: Marcin Kubicza - Chairman of the Supervisory Board, Małgorzata Kurzynoga - Vice Chairman of the Supervisory Board, Anna Machnikowska - Secretary of the Supervisory Board, Anita Elżanowska - Member of the Supervisory Board; Filip Gorczyca - Member of the Supervisory Board; Michał Jonczynski - Member of the Supervisory Board; Andrzej Kaleta - Member of the Supervisory Board; Kazimierz Karolczak - Member of the Supervisory Board, Beata Stelmach - Member of the Supervisory Board, Maciej Szwarc - Member of the Supervisory Board, Adam Uszpolewicz - Member of the Supervisory Board. On 3 November 2025, Filip Gorczyca submitted his resignation from the Supervisory Board effective 3 November 2025. In light of the above the Supervisory Board was composed as follows: Marcin Kubicza - Chairman of the Supervisory Board, Małgorzata Kurzynoga - Vice Chairman of the Supervisory Board, Anna Machnikowska - Secretary of the Supervisory Board, Anita Elżanowska - Member of the Supervisory Board; Michał Jonczynski - Member of the Supervisory Board; Andrzej Kaleta - Member of the Supervisory Board; Kazimierz Karolczak - Member of the Supervisory Board, Beata Stelmach - Member of the Supervisory Board, Maciej Szwarc - Member of the Supervisory Board, Adam Uszpolewicz - Member of the Supervisory Board. On 23 December 2025, the Extraordinary Shareholder Meeting of PZU SA appointed Jarosław Antonik to the Supervisory Board. In light of the above, the Supervisory Board was composed as follows: Marcin Kubicza - Chairman of the Supervisory Board, Małgorzata Kurzynoga - Vice Chairman of the Supervisory Board, Anna Machnikowska - Secretary of the Supervisory Board, Jaroslaw Antonik - Member of the Supervisory Board, Anita Elżanowska - Member of the Supervisory Board; Michał Jonczynski - Member of the Supervisory Board; Andrzej Kaleta - Member of the Supervisory Board; Kazimierz Karolczak - Member of the Supervisory Board, Beata Stelmach - Member of the Supervisory Board, Maciej Szwarc - Member of the Supervisory Board, Adam Uszpolewicz - Member of the Supervisory Board. The independence criteria set out in § 20(8) of the Articles of Association of PZU SA, as defined in the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Supervision ("UoBR"), were met in 2025 by: Marcin Kubicza, Małgorzata Kurzynoga, Anna Machnikowska, Jarosław Antonik, Filip Gorczyca, Michał Jonczyński, Andrzej Kaleta, Kazimierz Karolczak, Andrzej Klesyk, Wojciech Olejniczak, Maciej Szwarc, and Adam Uszpolewicz. The independence criteria specified in the Best Practices of WSE-Listed Companies 2021 (WSE BP 2021) were met in 2025 by the following individuals: Małgorzata Kurzynoga, Anna Machnikowska, Jarosław Antonik, Michał Bernaczyk, Filip Gorczyca, Michał Jonczynski, Andrzej Kaleta, Kazimierz Karolczak, Andrzej Klesyk, Wojciech Olejniczak, Maciej Szwarc, Adam Uszpolewicz. Those persons in 2025 had no actual and material relations with any shareholder holding at least 5% of the total vote in the Company. As of 31 December 2025, the composition of the Supervisory Board has remained unchanged. Activities of the PZU SA Supervisory Board During the reporting period, the legal basis for the activity of the PZU SA Supervisory Board (the "Company") was as follows: The Commercial Company Code, the Insurance and Reinsurance Activity Act and other generally applicable laws, as well as the Company's Articles of Association and the Rules and Regulations of the Supervisory Board. Fulfilling the provisions of the Articles of Association and Rules and Regulations, the Supervisory Board held properly convened and prepared meetings, with high attendance. During the financial year, the Supervisory Board held seventeen meetings on the following dates: 17, 20-21 January 2025, 27 and 29 January 2025, 7 February 2025, 27 February 2025, 26 March 2025, 2 April 2025, 24 April 2025, 24 and 26 May 2025, 1 June 2025, 24-26 June 2025, 3 July 2025, 7 August 2025, 27 August 2025, 19 September 2025, 24 September 2025, 19 November 2025, 18 and 23 December 2025. Relevant decisions were made by the Supervisory Board in the form of resolutions and opinions submitted to the Company's Management Board and the Shareholder Meeting of PZU SA. During the reporting period, the Supervisory Board adopted one hundred and sixty-six resolutions, including twenty-one in writing or by means of direct communication at a distance (the list of resolutions is attached as Attachment 1 to this report). Most of the Supervisory Board's resolutions - with the exception of resolutions numbered: URN/12/2025, URN/13/2025, URN/14/2025, URN/16/2025, URN/17/2025, URN/46/2025, URN/74/2025, URN/76/2025, URN/79/2025, URN/82/2025, URN/86/2025, URN/87/2025, URN/91/2025, URN/92/2025, URN/95/2025, URN/98/2025, URN/102/2025, URN/117/2025, URN/118/2025, URN/123/2025, URN/128/2025, URN/131/2025, URN/137/2025, URN/145/2025, URN/149/2025, were passed unanimously. The Supervisory Board passed its resolutions while maintaining the quorum required by law. The agendas prepared by the Chairman of the Supervisory Board included all topics that the Supervisory Board should deal with in accordance with its competencies, and included additional issues that the PZU SA Management Board ("Management Board") or members of the Supervisory Board considered important. The majority of Supervisory Board Members were present at all meetings. Absences of individual members from the Board meetings were mainly due to important business obligations. Following the adoption of the resolution of the Extraordinary Shareholder Meeting of PZU SA on the principles of shaping the remuneration of members of the Supervisory Board of Powszechny Zakład Ubezpieczeń Spółka Akcyjna No. 5/2017 of 8 February 2017, adoption of resolutions excusing absences was not required. A summary of attendance at meetings of the Supervisory Board is attached as Attachment No. 2 to this report. Supervisory Board meetings were held in hybrid form - with the possibility of participation by means of remote communication. Members of the Management Board, PZU Group Directors, Managing Directors and Head Office Directors were invited to the meetings of the PZU SA Supervisory Board in 2025, in accordance with § 27(1) of the Rules and Regulations of the PZU SA Supervisory Board, and they provided comprehensive explanations and submitted all documents regarding the Company's operations. Moreover, representatives of the auditor -PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp.k. ("PwC") - also participated in meetings of the Supervisory Board. Regardless of the meetings, the Supervisory Board was kept informed of the key aspects of the Company's operations via e-mail (Supervisory Board Members were sent current and periodic reports as a result of PZU SA's operation as a company listed on the Warsaw Stock Exchange). The Supervisory Board's cooperation with the Management Board of PZU SA was proper and directed at increasing the Company's value and concern for safeguarding its interests. The information and materials provided by the Management Board were prepared in a clear and reliable manner, to the extent consistent with the requirements set by the Supervisory Board. The most important issues dealt with by the Supervisory Board of PZU SA In the financial year ended 31 December 2025, the Supervisory Board dealt with all issues that, according to the Company's Articles of Association, are within the competence of the Supervisory Board. Within the scope of its activities, the Supervisory Board actively supported the Management Board in the implementation of the Company's strategic goals, considered the Management Board's proposals on issues requiring, in accordance with the Company's Articles of Association, the approval of the Supervisory Board, and reviewed other issues presented by the Management Board. Important issues dealt with by the Supervisory Board in 2025: a systematic assessment of the financial and economic situation of PZU SA and the PZU Group, market position and major strategic initiatives and intentions for 2025, ongoing monitoring of the implementation of the financial plan of PZU SA and PZU Group for 2025, monitoring the implementation of the PZU Group Strategy for 2025, 2027, carrying out the primary assessment of the individual suitability of candidates for Management Board President and the assessment of the collective suitability of the PZU SA Management Board, making changes to the Management Board -conducting qualification proceedings for the President of the Management Board of PZU SA, conducting the initial individual suitability assessment of persons nominated for Members of the Supervisory Board of PZU SA, evaluation of the financial statements of PZU SA for the year ended 31 December 2024 and recommendation to the Ordinary Shareholder Meeting of PZU SA to approve them, evaluation of the report of the Management Board on the activities of the PZU Group and PZU SA in 2024, including sustainability reporting for the same period, and recommendation to the Ordinary Shareholder Meeting of PZU SA to approve it, evaluation of the Management Board's proposal on the distribution of net profit of PZU SA for the year ended 31 December 2024 and recommendation to the Ordinary Shareholder Meeting of PZU SA to approve it, evaluation of the consolidated financial statements of the PZU SA Group for the year ended 31 December 2024 and recommendation to the Ordinary Shareholder Meeting of PZU SA to approve them, approval of the PZU SA Solvency and financial condition report (SFCR) as at and for the financial year ended 31 December 2024, approval of PZU Group Solvency and financial condition report (SFCR) as at and for the financial year ended 31 December 2024, amending a policy for the selection of an audit firm to perform the audit, amending a policy for the provision of permitted services by the audit firm performing the audit, by related parties thereof, and by a member of the audit firm of permitted non-audit services, amending a procedure for the selection of an audit firm, examining and issuing an opinion on the PZU SA Management Board's report on representation expenditures and expenditures for legal, marketing, public relations and public communication services and management consulting services for the year 2024, establishing Management Objectives for the Company's Management Board Members for the year 2025, approval of the report on compensation of the PZU SA Management Board Members and Supervisory Board Members for 2024, approval of the PZU Group's risk management strategy, adoption of the report of PZU SA Supervisory Board for 2024, ongoing monitoring of the implementation of strategic projects, ongoing monitoring of risks, including the level of actuarial risk, market risk, credit risk, operational risk, model risk and compliance risk, monitoring the status of implementation of the Strategy in the area of risk management, ongoing monitoring of investment activities, monitoring of ongoing acquisition projects along with making appropriate decisions, deciding on the consolidated text of the Articles of Association of PZU SA, amendment to the Supervisory Board Rules and Regulations; amendment to the Rules of Procedure of the Audit Committee of the Supervisory Board of PZU SA, amendment to the Rules and Regulations of the PZU SA Management Board, giving an opinion on the PZU SA Management Board's proposal to the Shareholder Meeting on the Policy on gender balance in the Management and Supervisory Boards; giving an opinion on the Policy implementing in the PZU Group the provisions of Directive (EU) 2022/2381 of the European Parliament and of the Council of 23 February 2022, known as "Women on Boards", in connection with the changes in the composition of the Supervisory Board -approval of the proposal for the individual suitability assessment of candidates for Supervisory Board Members, in connection with the changes in the composition of the Supervisory Board -supplementing the composition of the Nomination and Compensation Committee, Strategy Committee and Audit Committee (along with the assessment of the individual suitability of candidates for Audit Committee members and the suitability collective assessment of the Audit Committee), ongoing monitoring of the Committees' activities: Audit Committee, Nomination and Compensation Committee, and Strategy Committee of the PZU SA Supervisory Board, monitoring of the work related to the audit of selected areas of PZU SA and PZU Życie SA operations. During the reporting period, as part of ongoing risk monitoring, key developments in the Company's regulatory environment were presented to the Supervisory Board, resulting in analysis and discussion of challenges and risks in PZU SA's regulatory environment. The Supervisory Board dealt with the analysis of material changes and the need to implement new responsibilities in the legal and regulatory environment of PZU SA. The Supervisory Board, in order to properly carry out supervisory activities in the Company, has established permanent committees of an advisory and consultative nature. In 2025, there were three permanent Committees within the Supervisory Board: Audit Committee, Nomination and Compensation Committee, Strategy Committee. Audit Committee The Audit Committee was appointed by resolution of the Supervisory Board of PZU SA on 3 June 2008 in order to increase the effectiveness of the Supervisory Board's performance of supervisory activities in monitoring the Company's financial reporting process, the Company's auditing activities, and the effectiveness of the Company's internal control systems, internal audit, and risk management system. Moreover, the scope of the Audit Committee's activities may include other matters entrusted to it by the Company's Supervisory Board. The obligation to establish an Audit Committee in PZU SA as a public interest entity, results from the UoBR. The Audit Committee includes at least three Members. The majority of Members, including the Chairman, meet the independence criteria set forth in the UoBR. At least one member of the Audit Committee has knowledge and skills in in accounting or auditing. Detailed tasks and rules for the appointment and functioning of the Audit Committee are defined by: the of the Audit Committee are set in the Articles of Association of PZU SA, the Rules and Regulations of the Supervisory Board of PZU SA, the Rules and Regulations of the Audit Committee of the Supervisory Board of PZU SA, and a resolution of the Supervisory Board determining the composition of the Audit Committee, which, in selecting the Members of the Audit Committee, takes into account the competence and experience of the candidates with respect to the matters assigned to the Committee. As of 1 January 2025, the Audit Committee of the Supervisory Board of PZU SA operated in the following composition: Adam Uszpolewicz - Chairman of the Committee, Filip Gorczyca - Committee Member, Michal Jonczynski - Committee Member, Andrzej Kaleta - Committee Member. All Audit Committee Members met the criteria for independence within the meaning of Article 129(3) of the UoBR. Adam Uszpolewicz, Filip Gorczyca and Michał Jonczynski held qualifications in accounting or auditing financial statements. Adam Uszpolewicz and Michał Jonczynski had knowledge and skills in the industry in which the Company operates. None of the Audit Committee of the Supervisory Board Members had in 2025 actual and material relations with any shareholder holding at least 5% of the total vote in the Company. On 3 July 2025, Michał Janczyński resigned from his position as a Member of the Audit Committee of the Supervisory Board of PZU SA. At the same time, the Supervisory Board appointed Maciej Szwarc as a Member of the Audit Committee of the Supervisory Board of PZU SA. Accordingly, as of 3 July 2025, the composition of the Audit Committee of the Supervisory Board of PZU SA was as follows: Adam Uszpolewicz - Chairman of the Committee, Filip Gorczyca - Committee Member, Andrzej Kaleta - Committee Member, Maciej Szwarc - Committee Member, All Audit Committee Members met the criteria for independence within the meaning of Article 129(3) of the UoBR. Adam Uszpolewicz, Filip Gorczyca and Maciej Szwarc held qualifications in accounting or auditing financial statements. Adam Uszpolewicz and Maciej Szwarc had knowledge and skills in the industry in which the Company operates. None of the Audit Committee of the Supervisory Board Members had in 2025 actual and material relations with any shareholder holding at least 5% of the total vote in the Company. On 3 November 2025, Filip Gorczyca resigned from his position as a Member of the Supervisory Board. Accordingly, as of 4 November 2025, the composition of the Audit Committee of the Supervisory Board of PZU SA was as follows: Adam Uszpolewicz - Chairman of the Committee, Andrzej Kaleta - Committee Member, Maciej Szwarc - Committee Member, As of 31 December 2025, the composition of the Audit Committee of the Supervisory Board of PZU SA has remained unchanged. During the reporting period, i.e. from 1 January 2025 to 31 December 2025, the Audit Committee held fifteen meetings on the following dates: 24 February 2025, 24 March 2025, 26 March 2025, 1 April 2025, 2 April 2025, 12 May 2025, 14 May 2025, 24 June 2025, 26 August 2025, 27 August 2025, 24 September 2025, 5 November 2025, 17 November 2025, 19 November 2025, 18 December 2025. The decisions of the Audit Committee of the Supervisory Board of PZU SA were expressed in the form of resolutions, opinions and recommendations, which were each time forwarded to the Supervisory Board. The report of the Audit Committee of the Supervisory Board of PZU SA on its activities in 2025 is attached as Attachment No. 3 to this report. Nomination and Compensation Committee In accordance with the Articles of Association of PZU SA, since the Company's shares were listed on a regulated market within the meaning of the Act of 29 July 2005 on Trading in Financial Instruments, the Supervisory Board could appoint a Nomination and Compensation Committee, which was established on 12 May 2010. The Nomination and Compensation Committee is an advisory and consultative body to the Supervisory Board as regards the development of the management structure, including organizational solutions, the remuneration principles and the selection of properly qualified staff. As of 1 January 2025, the Nomination and Compensation Committee of the PZU SA Supervisory Board operated in the following composition: Małgorzata Kurzynoga - Chairman of the Committee, Michał Bernaczyk - Member of the Committee; Wojciech Olejniczak - Member of the Committee; Michal Jonczynski - Committee Member. On 10 January 2025, the Extraordinary Shareholder Meeting of PZU SA dismissed Wojciech Olejniczak from the Supervisory Board. In light of the above, the Nomination and Compensation Committee was composed as follows: Małgorzata Kurzynoga - Chairman of the Committee, Michał Bernaczyk - Member of the Committee; Michal Jonczynski - Committee Member. On 25 June 2025, the Ordinary Shareholder Meeting of PZU SA dismissed Michał Bernaczyk from the Supervisory Board and appointed Beata Stelmach and Maciej Szwarc as its members. On 3 July 2025, the Supervisory Board completed the composition of the Nomination and Compensation Committee of the Supervisory Board of PZU SA, appointing Beata Stelmach to its composition. In light of the above, the Nomination and Compensation Committee was composed as follows: Małgorzata Kurzynoga - Chairman of the Committee, Michal Jonczynski - Committee Member, Beata Stelmach - Member of the Committee . On 22 October 2025, by a written statement of the shareholder of PZU SA - the State Treasury, Kazimierz Karolczak was appointed to the Supervisory Board. On 19 November 2025, the Supervisory Board appointed Kazimierz Karolczak to the Nomination and Compensation Committee of the Supervisory Board of PZU SA. In light of the above, the Nomination and Compensation Committee was composed as follows: Małgorzata Kurzynoga - Chairman of the Committee, Michal Jonczynski - Committee Member, Kazimierz Karolczak - Member of the Committee, Beata Stelmach - Member of the Committee . As of 31 December 2025, the composition of the Nomination and Compensation Committee of the Supervisory Board of PZU SA has remained unchanged. During the financial year, the Nomination and Compensation Committee held fourteen meetings on the following dates: 13 January 2025, 17, 20-21 January 2025, 27 and 29 January 2025, 17 and 27 February 2025, 26 March 2025, 14 and 26 May 2025, 24-26 June 2025, 3 July 2025, 7 August 2025, 27 August 2025, 5, 9 and 19 September 2025, 24 September 2025, 19 November 2025, 18 and 23 December 2025. In 2025, the decisions of the Nomination and Compensation Committee of the Supervisory Board of PZU SA were expressed in the form of opinions and recommendations, which were forwarded each time to the Supervisory Board of the Company. Strategy Committee The Strategy Committee's task is to provide an opinion on all documents of a strategic nature submitted to the Supervisory Board by the Management Board of PZU SA (in particular, the Company's development strategy) and to make recommendations to the Supervisory Board on planned investments with a significant impact on the Company's assets. As of 1 January 2025, the Strategy Committee of the Supervisory Board of PZU SA operated in the following composition: Andrzej Kaleta - Committee Chairman, Anita Elżanowska - Member of the Committee, Filip Gorczyca - Member of the Committee, Anna Machnikowska - Member of the Committee. On 21 January 2025, the Extraordinary Shareholder Meeting of PZU SA appointed Andrzej Klesyk to the Supervisory Board. On 27 January 2025, the Supervisory Board appointed Andrzej Klesyk to the Strategy Committee of the Supervisory Board of PZU SA. In light of the above, the Strategy Committee was composed as follows: Andrzej Kaleta - Committee Chairman, Anita Elżanowska - Member of the Committee, Filip Gorczyca - Member of the Committee, Andrzej Klesyk - Member of the Committee, Anna Machnikowska - Member of the Committee. On 28 February 2025, Andrzej Klesyk tendered his resignation from the Supervisory Board, effective 2 March 2025. In light of the above the Strategy Committee was composed as follows: Andrzej Kaleta - Committee Chairman, Anita Elżanowska - Member of the Committee, Filip Gorczyca - Member of the Committee, Anna Machnikowska - Member of the Committee. On 25 June 2025, the Ordinary Shareholder Meeting of PZU SA dismissed Michał Bernaczyk from the Supervisory Board and appointed Beata Stelmach and Maciej Szwarc as its members. On 3 July 2025, the Supervisory Board completed the composition of the Strategy Committee of the Supervisory Board of PZU SA, appointing Maciej Szwarc to its composition. In light of the above, the Strategy Committee was composed as follows: Andrzej Kaleta - Committee Chairman, Anita Elżanowska - Member of the Committee, Filip Gorczyca - Member of the Committee, Anna Machnikowska - Member of the Committee, Maciej Szwarc - Committee Member, On 3 November 2025, Filip Gorczyca submitted his resignation from the Supervisory Board effective 3 November 2025. In light of the above the Strategy Committee was composed as follows: Andrzej Kaleta - Committee Chairman, Anita Elżanowska - Member of the Committee, Anna Machnikowska - Member of the Committee, Maciej Szwarc - Committee Member, As of 31 December 2025, the composition of the Strategy Committee of the Supervisory Board of PZU SA has remained unchanged. During the financial year, the Strategy Committee held three meetings on the following dates: 26 June 2025, 27 August 2025, 19 November 2025. In 2025, the decisions of the Strategy Committee of the Supervisory Board of PZU SA were expressed in the form of opinions and recommendations, which were forwarded each time to the Supervisory Board of the Company. Information on the implementation of resolutions of the PZU SA Shareholder Meeting Acting on the basis of § 3(4) of Resolution No. 4/2017 of the PZU SA Extraordinary Shareholder Meeting of 8 February 2017 on the principles of shaping the remuneration of the members of the Management Board of Powszechny Zakład Ubezpieczeń Spółka Akcyjna (as amended), the Supervisory Board, by resolution No.: URN/43/2025 of 26 March 2025 concerning the establishment of Management Objectives for the Members of the Management Board of PZU SA for 2025 further detailed the management objectives for the Company's Management Board Members, and also defined the weightings of individual objectives as well as objective and measurable criteria (indicators) for their implementation and assessment (KPIs). Acting on the basis of § 3(1)(1)(a), § 4(2)(2) and § 17(1) and 17(3)(2) of the Rules for assessment of suitability of the PZU SA Supervisory Board and Audit Committee, adopted by Resolution No. 33 of the Ordinary Shareholder Meeting of PZU SA ("OSM of PZU SA") dated 16 June 2021 (as amended), (the "Rules"), the Supervisory Board, through resolutions No. URN/10/2025 dated 20 January 2025 and No. URN/86/2025 dated 24 June 2025 and URN/88/2025 dated 25 June 2025, approved the proposals for positive initial assessment of individual suitability of candidates for members of the Supervisory Board of PZU SA, and submitted to the Shareholder Meeting of PZU SA reports including the proposals for initial assessment of individual suitability of candidates for members of the Supervisory Board of PZU SA adopted through resolutions No.: URN/11/2025 dated 20 January 2025, URN/87/2025 dated 24 June 2025, and URN/89/2025 dated 25 June 2025. Acting on the basis of § 3(1)(2)(b), § 4(2)(1) and § 17(1) and 17(3)(1) of the Rules, prior to supplementing the composition of the Audit Committee, the Supervisory Board, by resolution No. URN/93/2025 dated 3 July 2025, made a positive assessment of the individual suitability of a candidate for a member of the Audit Committee of the Supervisory Board of PZU SA, and by Resolution No. URN/94/2025 dated 3 July 2025, made a positive collective assessment of the suitability of the Audit Committee of the Supervisory Board of PZU SA. The Supervisory Board, acting on the basis of § 3(1)(1)(a), § 4(2)(2) and § 17(1)(3)(2) and (5) of the Rules, by resolutions from No. URN/52/2025 to URN/60/2025 dated 26 May 2025, approved the proposal for positive secondary assessment of the individual suitability of PZU SA Supervisory Board Members, and presented a report to the Shareholder Meeting of PZU SA including the proposals for assessing the suitability of the PZU SA Supervisory Board adopted by Resolution No. URN/67/2025 of 26 May 2025. In addition, acting on the basis of § 3(1)(2)(a), § 4(2)(1) and § 17(1) and (3)(1) of the Rules, the Supervisory Board, by resolutions from No. URN/61/2025 to URN/64/2025 of 20 May 2025, made a positive secondary assessment of the individual suitability of the members of the Audit Committee of the Supervisory Board of PZU SA. The Supervisory Board concludes that all the duties imposed on it by the resolutions of the 2025 Shareholder Meeting of PZU SA have been properly and timely implemented. Implementation of reporting and disclosure obligations The Supervisory Board states that all reporting and disclosure obligations imposed by law on the Supervisory Board were carried out in 2025 in a timely manner. Evaluation of the Financial Statements of PZU SA for the year ended 31 December 2025, the Consolidated Financial Statements of the PZU Group for the year ended 31 December 2025, the Management Board's report on the activity of the PZU Group and PZU SA for the financial year ended 31 December 2025 and the Management Board's proposal on the distribution of net profit of PZU SA for the year ended 31 December 2025. Evaluation of the Financial Statements of PZU SA for the year ended 31 December 2025, the Consolidated Financial Statements of the PZU Group for the year ended 31 December 2025 and the Management Board's report on the activity of the PZU Group and PZU SA for the financial year ended 31 December 2025. Pursuant to Article 382 § 3 of the Commercial Company Code, the specific duties of the Supervisory Board include evaluating the Management Board's report on the Company's activity and the financial statements for the past financial year in terms of their conformity with the books and documents, as well as with the facts, and the Management Board's proposal for the distribution of profit, and submitting an annual written report on the results of this evaluation to the Shareholder Meeting. Pursuant to Article 55(2a) of the Act of 29 September 1994 on accounting ("Accounting Act") and § 73(6) of the Decree of the Regulation of the Minister of Finance of 29 March 2018 on current and periodic information provided by securities issuers and on conditions under which information required by the legislation of a non-Member State ("Regulation on current and periodic information"), in the case of an annual report and a consolidated annual report, the reports of the management board or managing person on the activities of the issuer and on the activities of the group may be prepared in the form of a single document. Pursuant to Article 63x(1) of the Accounting Act, the parent company of a large group is required to present in a separate section of the report on the activity of the group with the information necessary to understand the group's impact on sustainability issues and to understand how sustainability issues affect the group's development, performance and position. The group's sustainability reporting is subject to sustainability reporting attestation by a statutory auditor authorized to attest sustainability reporting (pursuant to Article 64(7) of the Accounting Act). The Supervisory Board, acting on the basis of the Company's Articles of Association and the Supervisory Board Rules and Regulations, by resolution No. URN/143/2022 of 24 August 2022, selected PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt Sp.k. as the audit firm responsible for carrying out audits and reviews of financial statements, as well as audits of solvency and financial condition reports of PZU SA and the Grupa PZU for a five-year financial period covering 2024-2028, with an option to extend the agreement for two additional financial years, 2029-2030. On 7 November 2025, the Supervisory Board, acting on the basis of the Company's Articles of Association and the Supervisory Board Rules and Regulations, after reviewing the recommendation of the Audit Committee of the Supervisory Board of PZU SA, adopted resolution No. URN/143/2025 selecting PKF Consult spółka z ograniczoną odpowiedzialnością sp.k. ("PKF") as the audit firm responsible for providing assurance of the sustainability reporting of the Grupa PZU for 2025. The Management Board of PZU SA is responsible for the preparation, based on properly maintained accounting records, of the financial statements of PZU SA, which present a true and fair view of the Company's financial position and financial performance in accordance with the Accounting Act, adopted accounting policies, and applicable legal and statutory requirements, as well as for internal control systems deemed necessary by the Management Board to enable the preparation of financial statements free from material misstatement due to fraud or error. The Management Board of the parent company is responsible for the preparation of the consolidated financial statements of the PZU Group, which present a true and fair view of the Group's financial position and financial performance in accordance with International Financial Reporting Standards as adopted by the European Union ("EU IFRS"), adopted accounting policies, and applicable laws and statutes, as well as for internal controls considered necessary to enable the preparation of consolidated financial statements free from material misstatement due to fraud or error. The Management Board of PZU SA is also responsible for the preparation of the Management Report on the activities of the PZU SA Group and PZU SA, including the corporate governance statement and the sustainability statement, which are separate parts of the Management Report. The Management Board of PZU SA is responsible for the preparation of the sustainability reporting in accordance with Chapter 6c of the Accounting Act, including the European Sustainability Reporting Standards (ESRS), and in accordance with Article 8 of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 establishing a framework to facilitate sustainable investment (EU L 198, 22 June 2020, p. 13, as amended). The sustainability reporting constitutes a separate part of the Management Report on the activities of the PZU SA Group and PZU SA for the financial year ended 31 December 2025, included in Chapter 8. The Management Board of the Company is responsible for designing and conducting the materiality assessment process in accordance with the European Sustainability Reporting Standards (ESRS) to identify the information included in the Group Sustainability Reporting in accordance with the ESRS, for disclosing this process in the Management Board Report on the Operations of the PZU Group and PZU SA, and for preparing the Group Sustainability Reporting in accordance with Chapter 6c of the Accounting Act. The Supervisory Board, together with the Management Board, are obligated, in accordance with Article 4a of the Accounting Act, to ensure that the aforementioned reports meet the requirements stipulated by the said Act, the implementing regulations issued thereunder and other applicable laws. Members of the Supervisory Board are responsible for overseeing the financial reporting process. The Supervisory Board is responsible for overseeing the Group's Sustainability Reporting process. The Audit Committee of the Supervisory Board, in accordance with the UoBR, is required to: monitor the financial reporting process, including to audit the annual financial statements of PZU SA and the consolidated financial statements of the PZU Group; monitor the Group's sustainability reporting process, including attestation of PZU SA Group's sustainability reporting; monitor the performance of auditing activities and the independence of the statutory auditor and audit firm. PwC and PKF submitted the required UoBR statement of independence. The Financial Statements of PZU SA for the year ended 31 December 2025, the Consolidated Financial Statements of PZU Group for the year ended 31 December 2025, the Management Board's report on the PZU Group and PZU SA's activity for the year ended 31 December 2025 including the PZU Group's sustainability reporting were evaluated by the Audit Committee of the PZU SA Supervisory Board at a meeting held on 25 February 2026, and discussed with the Management Board and the Company's statutory auditor at a meeting of the Supervisory Board on 25 February 2026. In its report, the statutory auditor ensured that the audit of the financial statements was designed and conducted in such a way as to provide reasonable assurance that the financial statements of PZU SA and the consolidated financial statements of the PZU Group as a whole are free from material misstatement due to fraud or error. Key issues covered by the audit: uncertainty related to the valuation of the provision for outstanding claims and benefits in respect of incurred but not reported claims. valuation of insurance contract liabilities for remaining coverage (LRC) for the group and individually continued insurance segment, estimating the value of expected credit losses in the portfolio of loans receivable from clients. The evidence obtained during the audit provides a sufficient and adequate basis for an opinion. In the opinion of the independent statutory auditor, the audited standalone financial statements of PZU SA: present a true and fair view of the Company's assets and financial position as of 31 December 2025 and its financial performance and cash flows for the financial year ended on that date in accordance with the applicable provisions of the Accounting Act and the adopted accounting principles (policy), comply in form and content with the Company's applicable laws and the Company's Articles of Association, have been prepared on the basis of properly maintained accounting books, in accordance with the provisions of Chapter 2 of the Accounting Act. The independent statutory auditor's report on the audit of the standalone financial statements of PZU SA of 25 February 2026 contains an unqualified opinion. In addition, the statutory auditor stated that the audit opinion on the financial statements is consistent with the supplementary report to the Audit Committee, which was prepared by PWC. On 25 February 2026, the Audit Committee of the Supervisory Board of PZU SA positively assessed the report referred to above. At the same time, in the opinion of the independent statutory auditor, the audited consolidated financial statements of the PZU Group: present a true and fair view of the consolidated asset and financial position of PSA SA and its subsidiaries ("PZU Group) as of 31 December 2025 and consolidated financial performance and consolidated cash flows for the year then ended, in accordance with EU IFRS and the adopted accounting principles (policies), comply in form and content, with the Group's applicable laws and the parent company's Articles of Association. In addition, according to the statutory auditor, the consolidated financial statements of the PZU Group prepared in the uniform electronic reporting format (in ESEF format) in the file named pzu-2025-12-31-0-pl.zip ("consolidated financial statements in ESEF format") were labeled, in all material respects, accordance with the requirements set forth in Article 4 of the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on consolidated financial statements the specification of a single electronic reporting format. The statutory auditor also ensured that the Management Board's report on the PZU Group and PZU SA's activity for the financial year ended 31 December 2025 to the extent not relevant to sustainability reporting: has been prepared in accordance with the requirements of Article 49 of the Accounting Act, Section 70 of the Regulation on current and periodic information, and Article 54(2) of the Regulation of the Minister of Finance of 12 April 2016 on specific accounting policies of insurance and reinsurance undertakings. was consistent with the information contained in the financial statements and the consolidated financial statements. In addition, the statutory auditor stated that in light of the knowledge of the Company and the Company's Group and its environment obtained during the audit of the financial statements and the consolidated financial statements, no material misstatements were found in the activity report. At the same time, the statutory auditor confirmed that the corporate governance statement, which constitutes a separate part of the Management Report of the Group and the Company, includes the information specified in § 72(7)(5) of the Regulation on current and periodic information. In addition, the information specified in § 72(7)(5)(c-f), (h) and of this Regulation contained in the corporate governance statement is consistent with the applicable regulations and the information contained in the financial statements and consolidated financial statements. PKF, as the audit firm, performed an assurance engagement on sustainability reporting providing limited assurance regarding the sustainability reporting of the PZU Group. Based on the attestation procedures performed and the evidence obtained, the PKF's statutory auditor concluded that nothing came to his attention that would lead him to believe that: the Group's sustainability reporting does not comply, in all material respects, with the requirements of Chapter 6c of the Accounting Act, including the European Sustainability Reporting Standards ("ESRS"); the materiality assessment process carried out by the Company to identify information included in the Group Sustainability Reporting ("Materiality Assessment Process") does not comply, in all material respects, with the ESRS; the Group's sustainability reporting does not comply, in all material respects, with the reporting requirements of Article 8 of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 ("Taxonomy Regulation"). The Supervisory Board after reviewing the documents submitted by the Management Board: Financial statements of Powszechny Zakład Ubezpieczeń Spółka Akcyjna for the year ended 31 December 2025, prepared in accordance with Polish accounting standards, including: balance sheet prepared as of 31 December 2025, closing on the assets and liabilities side with a balance sheet total of PLN 60,914,698 thousand, non-life insurance technical account for the period from 1 January to 31 December 2025, indicating a technical result to be transferred to the general profit and loss account in the amount of PLN 1,639,653 thousand, general profit and loss account for the period from 1 January 1 to 31 December 2025, indicating a net profit of PLN 5,062,318 thousand, statement of changes in equity showing an increase in equity during the financial year ending 31 December 2025 by the amount of PLN 3,712,166 thousand, cash flow statement showing a decrease in cash during the financial year ending 31 December 2025 by the amount of PLN 22,808 thousand, additional notes to the Financial statements for the year ended 31 December 2025; Report of the independent statutory auditor on the audit of the annual financial statements of 25 February 2026; Consolidated financial statements of Powszechny Zakład Ubezpieczeń Group for the year ended 31 December 2025, prepared in accordance with International Financial Reporting Standards, including: the consolidated statement of financial position as of 31 December 2025, which shows a total of PLN 535,483 million on the assets and capitals and liabilities side, Consolidated profit and loss account for the period from 1 January 1 to 31 December 2025, showing a net profit of PLN 13,987 million, consolidated statement of comprehensive income for the period from 1 January to 31 December 2025, showing a comprehensive income of PLN 15,920 million, consolidated statement of changes in equity for the period from 1 January to 31 December 2025, showing an increase in equity in the amount of PLN 7,396 million, consolidated cash flow statement for the period from 1 January to 31 December 2025, showing an increase in cash in the amount of PLN 1,106 million, supplementary information and notes; Report of the independent statutory auditor on the audit of the annual consolidated financial statements of 25 February 2026; Management Board's report on the activity of the PZU Group and PZU SA for the financial year ended 31 December 2025, including sustainability reporting; statement of the independent statutory auditor on the attestation of sustainability reporting dated 25 February 2026; made a positive assessment of the abovementioned documents. In view of the above, the Supervisory Board decided to submit its assessment to the Ordinary Shareholder Meeting of PZU SA. The Supervisory Board, in accordance with § 18(1) of the Articles of Association of Powszechny Zakład Ubezpieczeń Spółka Akcyjna and Article 395 § 2(1) and Article 395 § 5 of the Commercial Company Code, recommends that the Shareholder Meeting of PZU SA approve: Financial statements of Powszechny Zakład Ubezpieczeń Spółka Akcyjna for the year ended 31 December 2025, Consolidated financial statements of Powszechny Zakład Ubezpieczeń Spółka Akcyjna Group for the year ended 31 December 2025; Management Board's report on the activity of the PZU Group and PZU SA for the financial year ended 31 December 2025; Evaluation of the Management Board's proposal on the distribution of net profit of PZU SA for the year ended 31 December 2025 The Supervisory Board positively evaluates the proposal of the Management Board of PZU SA to the Ordinary Shareholder Meeting of PZU SA regarding the distribution of net profit of PZU SA for the year ended 31 December 2025, increased by the amount transferred from the supplementary capital created from the net profit for the year ended 31 December 2024, as presented in Resolution No. UZ/91/2026 of the PZU SA Management Board of 13 May 2026 on the adoption of the motion to the Ordinary Shareholder Meeting of PZU SA on the distribution of PZU SA net profit for the year ended 31 December 2025, increased by the amount transferred from the supplementary capital created from the net profit for the year ended 31 December 2024, and recommends the distribution of net profit for the year ended 31 December 2025 in the amount of PLN 5,062,317,928.62, increased by the amount of PLN 1,089,021,441.01 transferred from the supplementary capital created from the net profit for the year ended 31 December 2024, i.e. a total of PLN 6,151,339,369.63, as follows: to designate the amount of PLN 4,144,910,400, i.e. PLN 4.80 (four zlotys 80 gr) per share, for the payment of dividends; to designate the amount of PLN 8,478,000.00 for the Company Social Benefit Fund; to designate the amount of PLN 1,997,950,969,63 for supplementary capital. The Supervisory Board positively assesses the Management Board's proposal to the Ordinary General Meeting of PZU SA that the dividend record date be set for 17 September 2026 and the dividend payment date for 8 October 2026. Concise evaluation of the Company's situation on a consolidated basis, taking into account the adequacy and effectiveness of the Company's systems for internal control, risk management, ensuring compliance with standards or applicable practices, and internal audit In 2025, net profit attributable to the shareholders of the PZU Group's parent company was PLN 6,699 million, compared to PLN 5,342 million in 2024 (up 25.4%). Net profit reached PLN 13,987 million, i.e. PLN 14,5% higher than in 2024, and profit before tax stood at PLN 17,842 million, compared to PLN 15,705 million the year before. Net of non-recurring events,1 net result rose by 11.8% compared to last year. Operating profit for 2025 amounted to PLN 17,847 million and was 13.7% higher compared to the result for 2024. Key contributors to operating profit included in particular: higher result in the mass non-life insurance segment (+ PLN 824 million), largely due to the ‌1 One-time events in 2025 include: revaluation of the provision for risk associated with foreign currency mortgage loans at Bank Pekao and Alior Bank; - recognition of provisions for consumer protection matters in Bank Pekao; remeasurement of deferred tax assets and liabilities in Bank Pekao and Alior Bank in connection with the increase in corporate income tax rates for banks from 2026 One-time events in 2024 include: - revaluation of the provision for risk associated growth in the insurance service result (+ PLN 798 million) both in non-motor and motor insurance. The increase in the segment revenue was connected with higher sales growth in non-motor insurance (mainly PZU Dom home insurance, and PZU Firma product offered to small and medium-sized enterprises) and motor insurance (increase in average premium). The lower net insurance service expenses by PLN 246 million y/y (-2.0 %) which together with an increase in the net insurance contract revenue by 4,3% y/y improved profitability by the combined ratio (COR) by 5.7 percentage p.p.; higher results in the banking segment (+ PLN 597 million), mainly due to an increase in net interest income from higher loan volumes and a stable interest margin at Bank Pekao, partially offset by increased operating with foreign currency mortgage loans at Bank Pekao; costs related to the modification of agreements for PLN mortgage loans granted to consumers due to their suspension of loan repayments (the so-called moratorium periods) effect related to the aforementioned number of mass damage caused by atmospheric events, mainly flooding; release of an impairment loss on assets arising from the acquisition of Alior Bank. expenses and higher legal risk costs related to foreign currency mortgage loans (at Alior Bank); an increase in operating profit in the investment segment (+ PLN 341 million), particularly as a result of higher investment profit on free funds including on the portfolio of debt instruments against last year's sale of historical tranches with lower yields and reinvestment at higher yields, equity instruments due to favorable market conditions as well as commercial real estate due to higher swap point income; an increase in operating profit in the corporate non-life insurance segment (+ PLN 326 million) with a higher y/y insurance services result (+ PLN 333 million), as a result of an increase in revenues (+ PLN 328 million) in , both motor and non-motor insurance and a lower level of insurance services expenses, which translated into an 8.3 p.p improvement in profitability as measured by the combined ratio (COR); higher result in the investment-linked life insurance segment (+PLN 103 million), mainly driven by changes in assumptions regarding partial surrenders and costs in the IKE product, leading to a decrease in the loss component, and in other personal lines (mainly due to higher sales of property, health, and motor third-party liability insurance), with a simultaneous increase in current-year claims liabilities resulting from portfolio growth; higher operating profit in the individual protection life insurance segment (+ PLN 55 million), mainly as a result of higher insurance revenues thanks to higher release of contractual margins and an increase in writing of premiums allocated to recovery of insurance acquisition cash flows, and expected claims and benefits as a result of developing the insurance portfolio; lower operating profit in the group and individually continued life insurance segment (- PLN 76 million), as a result of an increase in insurance service revenues through higher contractual margin release in all insurance groups and higher y/y insurance service costs through continued high utilization of health insurance benefits as well as higher claims cost in other group insurance. In the individual operating result items, the PZU Group posted: insurance revenues up by 5.0% - to PLN 30,882 million, (+1,310 million after reinsurance premium allocations), including: an increase in amortization of liability (LRC) as a consequence of higher sales growth, mainly non-motor insurance and to a lesser extent motor insurance in both non-life insurance segments as well as in the Baltics segment as a result of higher sales in non-life and other personal insurance including non-life and health insurance and MTPL insurance; higher contractual margin release, including mainly in the individual insurance segment (in bancassurance, and in Type J and term insurance), and in the group and individually continued insurance segments in all insurance groups; decrease in premiums written to cover expected claims and benefits as a result of an increase in individual insurance as a consequence of the development of the insurance portfolio and a decrease in group and individually continued insurance (due to lower utilization in health insurance). lower level of insurance service expenses , which amounted to PLN 24,957 million, i.e., 0.6% less than in 2024. Expenses adjusted for the amounts recoverable from reinsurers increased by PLN 24 million, and this resulted from: higher claims liabilities of the current year , mainly in the corporate insurance segment (in both non-motor and motor insurance), in group and individually continued insurance, and in the Baltics segment. the increases were partially offset by a decline in current year claims liabilities in the mass insurance segment (mainly in non-motor insurance - with an above-normal number of mass claims caused by weather events in 2024); release of higher y/y excess net claims reserves from previous years over the value of payouts, mostly in the non-life corporate insurance segment; excess depreciation over the creation of a loss component in the bulk life insurers on life insurance segment, mainly on the MTPL portfolio, and a decrease in the loss component in the investment life insurance segment as a result of a change in assumptions for partial redemptions and costs in the IKE product; higher administrative expenses attributable to insurance operations due to increased personnel costs (impact of salary increases), higher IT costs due to the development of the IT area and building competencies in the area of system maintenance; higher amortization of acquisition cash flow as a consequence of growing sales while commission expenses increased (impact of change in distribution of sales by channel). 4.4% higher investment income, exclusive of interest expenses, and 10.3% higher income after factoring in the interest expenses 2 (increase from PLN 19,965 million to PLN 22,024 million). Growth pertained to both investment results from banking and non-banking activities. The increase in earnings from banking operations was, in particular, related to higher interest income resulting from growth at Bank Pekao and decline at Alior Bank. At Bank Pekao, interest income was shaped by higher loan volumes and stable interest margins, despite lower interest rates. At Alior Bank, there was a relatively limited decline in interest income, despite the 2025 interest rate cut. In addition, the y/y change in the banks' interest income was positively affected by the effect of recognizing moratorium period costs of PLN 153 million at Bank Pekao and PLN 62 million at Alior Bank in 2024. At the same time, an increase in investment income was posted in investment activity, net of banking activity. 3 It was higher than in 2024, mainly as a result of: higher income from debt portfolios measured at fair value through other comprehensive income due to, i.a., the purchasing of high-yield instruments for the portfolio; higher performance of equity instruments, in particular, due to favorable market , conditions, stronger increases in the valuation of Private Equity funds as well as a gain from the sale of some of the stocks in the portfolio; higher swap point income, in particular, in the field of commercial real estate. ‌2 including: interest income calculated using the effective interest rate and equalized to them, other net investment income, result on derecognition of financial instruments and investments not measured at fair value through profit ‌ At the same time, the results generated in the investment activity on the asset portfolio that constitute investment insurance coverage was higher than in 2024, which has no impact on the PZU Group's total net result, as it is offset by the change in insurance financial income and expenses; an increase in commissions and fees to PLN 4,199 million in 2025, compared with PLN 3,842 million in 2024, mainly related to an increase in revenues from funds and investment fund companies, as a result of higher level of assets under management. There was also a higher result from brokerage commissions at banks, and an increase in margins on foreign currency transactions with customers; higher provision for legal risk related to foreign currency mortgages amounted to PLN 819 million versus PLN 729 million in 2024. The recognition of additional costs in 2025 results mainly from an update of the expected financial impact of court rulings and a forecast of future inflows of lawsuits from borrowers; an increase in Group's non-insurance operating expenses , from PLN 10,514 million in 2024 to PLN 11,206 million in 2025. The change was caused by the following factors: higher costs of third-party services, including in particular on banking operations; higher fees to the Bank Guarantee Fund by PLN 212 million, the total burden on banks in the first three quarters of 2025 increased to PLN 491 million; a decrease in the levy on financial institutions which totaled PLN 1,558 million in 2025 compared with PLN 1,566 million in 2024 (as a result of a change in the level of assets subject to taxation, not the tax rate); movement in the balance of other operating income and expenses - to PLN 891 million, compared with PLN 1,043 million in 2024. The change was mainly due to higher costs due to the creation of provisions for consumer protection issues at Bank Pekao in the amount of PLN 202 million. The increase in costs was partially offset by higher revenues from the sale of medical services. Drivers and atypical events affecting the results or loss, result from allowances for expected credit losses and net movement in fair value of assets and liabilities measured at fair value, interest. expense 3 Banking activity: data of Bank Pekao and Alior Bank In 2025, the PZU Group's result was burdened by non-recurring effects related to banking activities: legal risk costs of foreign currency mortgage loans at Bank Pekao of PLN 664 million, and Alior Bank of PLN 155 million; recognition of provisions for consumer protection issues at Pekao of PLN 202 million; revaluation of the level of deferred tax assets and deferred tax liabilities at Bank Pekao and Alior Bank (due to an increase in income tax rates for the banks, which will be 30% in 2026, 26% in 2027 and 23% from 2028) with an impact on net income of PLN 179 million and PLN 95 million, respectively. PZU SA In 2025, the issuer (PZU SA) recorded a technical result of PLN 1,640 million, compared to PLN 1,069 million in 2024, an increase by 53.4% (571 million y/y). Net profit was PLN 5,062 million, up 30.6% relative to PLN 3,877 million generated in the previous year. Disregarding the dividends received from PZU Życie SA, PZU SA's net profit was PLN 3,169 million, and was by PLN 974 million, i.e. 44.3 %, higher compared to 2024. As regards the individual net result items, PZU SA recorded: an increase in gross written premium to PLN 18,095 million, or 1.9% (PLN 338 million), more than in the previous year. The higher level of premium is the product of: - an increase in sales of insurance of damage caused by natural forces, other property damage and third-party liability (mainly PZU DOM, PZU Firma home insurance and the acquisition of several large contracts in reinsurance with TUW PZUW); - a decrease in premiums in motor insurance, both MTPL and Auto Casco. After the reinsurers' share and change in the provision for unearned premiums, net earned premium was PLN 16,130 million and was 6.7% higher than in 2024; higher level of claims and benefits - amounting to PLN 9,951 million, which means an increase by PLN 108 million, i.e., 1.1% compared to 2024. Significant increases in the level of claims and benefits were recorded in the Auto Casco motor insurance group and the provision of assistance. The increase was partially offset by a decrease in claims and benefits in the fire and other property damage insurance group (the effect of the occurrence in 2024 of numerous mass damages caused by forces of nature -heavy rainfall, inundation and flooding). an increase in the result from investment activities4 to PLN 4,566 million (by 21.4% y/y). The increase was mainly due to higher results from derivatives hedging the Private Equity portfolio (with the hedged assets recognized by the change in revaluation reserve) and the purchase of debt instruments for the portfolio at favorable yields in the market as well as higher dividends, in particular from PZU Życie SA and Alior Bank; higher by PLN 176 million, or 5.3%, compared to 2024, including acquisition expense, including reinsurance commissions, as a consequence of the growing insurance portfolio and different insurance portfolio structure and change in the mix of sales channels; a 4.5% increase in administrative expenses, from PLN 973 million in 2024 to PLN 1,017 million in 2025. Increase mainly as a consequence of higher personnel costs (impact of employee salary increases as a result of the increase in the minimum wage in the economy from January 2025). The increase was also driven by higher IT costs (the effect of ongoing projects), marketing and sponsorship costs (a larger scale of campaign activities than last year), as well as the implementation of consulting services and the indexation of rents and postage. Rating Since 2004, PZU SA and PZU Życie SA have been subject to regular reviews by the rating agency of S&P Global Ratings (S&P). The rating assigned to PZU SA and PZU Życie SA results from an analysis of financial data, competitive position, management and corporate strategy of both companies as well as the sovereign rating. It also includes a ratings outlook, or an assessment of the Company's future position in the event that specific circumstances occur. Recent rating/outlook changes: On 28 May 2024, the rating agency of S&P Global Ratings (S&P) raised the rating outlook of PZU SA from "stable" to "positive." The financial strength and credit ratings of PZU SA have remained at A- ‌4 investing activities include investment income, unrealized gains on investments, costs of investing activities, unrealized losses on investments and share in net profit (loss) of subsidiaries measured by equity method. since 21 January 2016. Recent rating/outlook confirmation: On 11 March 2026, the rating agency S&P Global Ratings confirmed PZU SA's financial strength rating and credit rating at A-. The outlook remained positive (unchanged). The financial strength and credit ratings of PZU have remained at A- since 21 January 2016. Capital Policy and Solvency Capital Policy The PZU Group's Capital and Dividend Policy adopted for 2025-2027 was in force in 2025. In keeping with the Policy, PZU Group endeavors to: manage capital effectively by optimizing the use of capital from the PZU Group's perspective; maximize the rate of return on equity for the parent company's shareholders, in particular, by maintaining the level of security and retaining capital resources for strategic growth objectives through the organic growth and acquisitions; ensure sufficient financial means to cover the PZU Group's liabilities towards its clients. The capital management policy rests on the following principles: manage the PZU Group's capital (including excess capital) at the level of PZU; maintain target solvency ratios of 200% for the PZU Group, 200% for PZU SA and 200% for PZU Życie SA (according to Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance, hereinafter referred to as the "Solvency II Directive") in the period until the date of entry into force of the amendments to the Solvency II Directive and at the level of 180% for the PZU Group, 200% for PZU and 200% for PZU Życie SA in the period after the entry into force of the amendments to the Solvency II Directive; maintain the PZU Group's financial leverage ratio at a level no higher than 25%; ensure funds for growth and acquisitions; maintain the financial conglomerate's surplus own funds above the pertinent requirements for solvency; PZU SA shall not issue any new shares for the duration of this Policy; it is assumed that certain temporary deviations in the actual solvency ratio above or below the target level may occasionally occur. The PZU SA and PZU Group's dividend policy rests on the following principles: The PZU Group endeavors to manage capital effectively and maximize the rate of return on equity for the parent company's shareholders, in particular by maintaining the level of security and retaining capital resources for strategic growth objectives through acquisitions; the dividend amount proposed by the parent company's Management Board which PZU SA pays for the respective financial year is determined on the basis of the PZU Group's consolidated financial result attributable to equity holders of the parent company, where: no more than 20% shall be allocated to the retained earnings (supplementary capital) for objectives relating to organic growth and innovations, as well as implementation of growth initiative; no less than 50% is subject to payment as an annual dividend; the remaining part will be paid in the form of annual dividend or will increase retained earnings (supplementary capital) if significant expenditures are incurred in connection with execution of the PZU Group Strategy, including in particular, mergers and acquisitions with the reservation that: according to the Management Board's plans and risk and solvency self-assessment of the parent company, the own funds of the parent company and the PZU Group following the declaration of payment or payment of a dividend will remain at a level that will ensure fulfillment of the conditions specified in the capital policy; the dividend determination takes into account the recommendations of the supervisory authority on dividends for all PZU Group companies. Solvency II As at the end of 3Q25, the estimated solvency ratio for the PZU Group (calculated according to the standard Solvency II equation) was 234%, a level above the average solvency ratio reported by insurance groups in Europe. As of the end of 2025, the audited solvency ratio "Solvency II" for PZU SA was 237%.5 The Supervisory Board assesses that the actions implemented by PZU SA allow the Company to continue its further development and achieve good financial results in the coming years. PZU SA has an internal control system (ICS) in place, adjusted to the scale of its operations and its organizational structure. Its purpose is to ensure the effectiveness and efficiency of operations within the organization, reliability of financial reporting and compliance of the Company's operations with the applicable laws and internal regulations. The ICS comprises supervision, overall administrative and accounting procedures, organizational structures, reporting systems, solutions implemented in IT systems, the compliance function and other control mechanisms contributing to the security and stability of the Company's operations by ensuring: efficiency and effectiveness of the operating activity; reliability of information communicated inside and outside the Company and assurance of availability and reliability of such information, in particular pertaining to financial statements; adequacy and effectiveness of risk controls (control operations should be commensurate with the level of risk involved in the operations and processes under control); responsible and transparent management of the Company; compliance of the Company's activity with internal regulations and the standards of conduct adopted by the Company. The following elements are distinguished within the ICS: control function aiming at ensuring compliance with control mechanisms concerning, in particular, risk management in the Company; - an independent compliance cell (Compliance Bureau - BCM) to carry out the compliance function; independent internal audit cell (Internal Audit Department - BAW) whose purpose is to carry out independent and objective assessment and evaluation of adequacy and effectiveness of the internal control system and other elements of the system of governance. The ICS is built on the basis of the said elements and is based on a model of three independent and complementary levels, i.e., three lines, where: the first line is comprised of activities of business processes owners, encompassing the operational management of risk associated with the Company's operations and processes carried out as part of those operations; the second line is comprised of activities of the Compliance Department and risk management by other specialized business units specified in internal regulations on risk management and dealing with risk identification, measurement, monitoring and reporting and controlling the limits; the third line is provided by activities of the Internal Audit Department. Supervision over the internal control system within the Company is exercised by: oversight exercised by the Supervisory Board; activities of the Management Board, including the establishment of an adequate and effective internal control system and periodic assessment of the functioning of the ICS; oversight exercised by the managers of functional divisions, specialist units and organizational cells in their subordinated organizational units/cells. The head of the respective organizational division/unit/cell is responsible for the deployment of an effective ICS in the supervised area of the Companies' activity, in particular for designing and ensuring efficient operation of control actions as integral components of operating processes. An element of the ICS adopted by PZU SA is the compliance function supervised by the Managing Director of Regulatory Affairs who is in charge of the Compliance Department. The appointment and dismissal of the person in charge of the Compliance Department must be consulted with the Audit Committee. The Managing Director of Regulatory Affairs has direct access to the Company's Management Board Members and Supervisory Board Members, and representatives of the Compliance Department participate in meetings of selected committees established within the Company's structure. The PZU Group's ICS has been developed at the level of the leading entity (i.e., PZU SA) and is applicable to all members of the PZU Group, in consideration of their distinct nature, ‌5 in accordance with the distribution of PZU SA's profit for 2025 assumed in own funds in PZU SA's Report on Solvency and Financial Condition as of and for the financial year ended 31 December 2025 proportionality and adequacy. With regard to regulated entities existing within banking groups, the internal control system has been designed at the level of each of these groups, taking into account the applicable sectoral regulations. As part of its cooperation with PZU Group entities, PZU SA analyzes information that it receives regularly from these entities concerning the organization of the internal control system, internal control conducted and evaluation of the internal control system, in order to improve unified standards for the operation of an effective internal control system. The appointment of the Audit Committee has served the purpose of increasing the effectiveness of supervisory activities performed by the Supervisory Board with regard to the monitoring of financial reporting processes. The Committee's tasks associated with monitoring the financial reporting process and the provision of advisory and evaluation services include, in particular: tentative evaluation of the Management Board's report on the activity of the Company and the Company's annual financial statements; tentative evaluation of the Management Board's report on the activity of the Company's group and the annual consolidated financial statements of the Company's group; tentative evaluation of all financial documents submitted to the Supervisory Board, in particular of the annual financial plan prepared by the Management Board and the report on its implementation; issuance of opinions on the core principles of the financial reporting and accounting system in place at the Company, including the criteria for the consolidation of results of individual entities from the Company's group; provision of the Supervisory Board with conclusions and recommendations concerning the rationale for any modification of the financial reporting system in place at the Company and the Company's group and information about material irregularities in such a system or risks associated with its organization and operation, known to the Committee. The Audit Committee presents recommendations regarding the selection of an audit firm to perform the audit and review of the financial statements to the Supervisory Board. The statutory auditor selected by the Supervisory Board upon a recommendation of the Audit Committee, reviews interim standalone and consolidated financial statements, audits annual standalone and consolidated financial statements and annual solvency and financial condition reports required by the Solvency II Directive (for PZU and the PZU Group). The internal control system and the risk management system are subject to evaluation, among other things, by internal audit, which operates under conditions that ensure objectivity and independence. The person managing internal audit reports organizationally directly to the President of the Management Board, and functionally to the Audit Committee of the Supervisory Board, and has the authority to communicate directly with the Chairman of the Supervisory Board and the Chairman of the Audit Committee, particularly with regard to identified material irregularities. A system of dual reporting on the results of actions taken is used: to the Management Board and the Audit Committee of the Supervisory Board. Acceptance of the draft audit plan and any amendment to it requires the prior opinion of the Audit Committee of the Supervisory Board. The appointment or dismissal of a person managing the audit in PZU SA requires the opinion of the Audit Committee. In addition, at PZU SA, internal audit is independent of operational functions. In fulfilling the expectations of the Polish Financial Supervision Authority set forth in the document "Good Practices for Public Interest Entities on the Principles of Appointment, Composition and Functioning of the Audit Committee" and the principles set forth in the "Best Practices of WSE Listed Companies 2021", a review of PZU SA's internal audit function is carried out by an independent auditor at least once every five years. The selection of the auditor performing the review is conducted with the participation of the Audit Committee of the Supervisory Board. An independent assessment of the internal audit function at PZU, carried out in 2025 by KPMG Advisory, and an analysis of coordination of the Group's internal audit at the PZU Group showed 100% compliance with the Global Internal Audit Standards, prepared by the Institute of Internal Auditors (IIA). The implementation of audits in PZU SA in 2024 was conducted on the basis of the Audit plan, positively reviewed by the Audit Committee of the Supervisory Board and subsequently adopted by a resolution of the PZU SA Management Board, prepared on the basis of an assessment of the risks present in specific areas of the Company's operations. The results of the audits, the recommendations issued and their implementation (covered by the Internal Audit Department's monitoring process) are periodically presented to the Company's Management Board and the Audit Committee of the Supervisory Board in Quarterly reports. In accordance with the adopted rules described in the Internal Audit Regulations, the Internal Audit Department prepares an annual report on its activities, which is submitted to the Company's Management Board by 31 March of the year following the year to which it relates, and then to the Audit Committee on dates that depend on the order and timing of meetings of the Audit Committee of the Supervisory Board. The Internal Audit Department has prepared an annual report on its activities in 2024, including information on the implementation of the audit plan and the status of the recommendations made, as well as an assessment of the internal control system and risk management system. The Internal Audit Department coordinates the functioning of internal audit in key PZU Group entities. As in previous years, based on cooperation agreements, internal audit obtains information on the adequacy and effectiveness of their implemented risk management and internal control systems. In 2024, the Company had a risk management system in place, adapted to the scale of operations and organizational structure. The risk management system was based on the following elements: split of duties and tasks performed by statutory bodies, committees, individual organizational units and cells in the risk management process; risk management process, including risk identification, measurement and assessment, monitoring and control methods, risk reporting and undertaking management actions. The split of duties and tasks in the risk management system is based on four decision-making levels. The first three levels include: the Supervisory Board, which supervises the risk management process and assesses its adequacy and effectiveness as part of its decision-making powers defined in the Company's Articles of Association and the Rules and Regulations of the Supervisory Board; the Management Board, which organizes the risk management system and ensures that it is operational, by adopting strategies and policies, setting the level of risk appetite, defining the risk profile as well as tolerance levels for the individual categories of risks; committees, which make decisions to mitigate individual risks to a level determined by the risk appetite. The committees adopt procedures and methodologies for mitigating the individual risks and accept individual risk limits. The fourth level relates to the operational level, where tasks related to the risk management process are divided among three lines: the first line - entails ongoing risk management at the entities' business unit and organizational unit level and decision-making as part of the risk management process. The management is responsible for the implementation of an effective risk management system in the supervised area of the Company's activity, in particular for designing and ensuring efficient operation of identification and monitoring actions as integral components of operating processes, ensuring appropriate response to existing risks; the second line - risk management by specialized units responsible for risk identification, measurement, monitoring and reporting, as well as for limits control; Within the second line of defense, the following play a special role in the process: Risk Department, Compliance Department, Security Department, Planning and Controlling Department, Actuarial Department, Reinsurance Department, Legal Department and HR Department; the third line - internal audit which conducts independent audits of the individual elements of the risk management system and internal control. This function is performed by the Internal Audit Department. The risk management process consists of the following steps: identification, measurement and assessment, monitoring and control, reporting, management action. The primary risk categories identified at the Company include: market risk, credit risk, concentration risk, actuarial risk, operational risk, model risk and compliance risk. Each risk deemed material is subject to measurement involving the definition of risk measures appropriate to the type and availability of data, and quantification of the risk using established measures or expert assessment included in the measurement of total risk. Risk management processes provide reports at decision-making levels appropriate to the type and materiality of the risk. In particular, in accordance with the applicable rules, reports are submitted to the Supervisory Board, the Company's Management Board and the PZU Group Risk Committee, the Investment Risk Committee, the Investment Committee and the Asset and Liability Management Committee. Management actions for specific risk categories are defined in internal regulations or adopted management standards for these risks. Depending on the type and characteristics of the risk, these activities may include, in particular: risk avoidance, risk transfer, risk mitigation, risk level acceptance, and tools to support these activities such as limits or a reinsurance program. Two levels are distinguished in the PZY Group risk management process: the PZU Group level - ensures that the PZU Group attains its business objectives in a safe manner appropriate to fit the scale of the risk involved. The PZU Group provides support for the implementation of a risk management system, including the introduction of compatible mechanisms, standards and organization of an efficient operation of the internal control system (with particular emphasis on the compliance function), the risk management system (in particular in the reinsurance area) and the security management system in the PZU Group, and monitors their ongoing application. The PZU Group's designated personnel cooperates with the management boards of companies and managers of such areas as finance, risk, actuarial services, reinsurance, investments and compliance on the basis of relevant mutual cooperation agreements. Moreover, in connection with the PZU Group obtaining the status of a financial conglomerate, a risk concentration management system was implemented to ensure that entities in the PZU Financial Conglomerate attain their business objectives in a manner ensuring financial stability at the level of both the entire conglomerate and individual entities. The system monitors appropriate risk concentration measures and their limits and threshold values. Risk measurement permits identification of the sources of concentration in individual risks at the level of both the financial conglomerate and individual regulated entities and supports an assessment of the impact of these concentrations on financial stability; the entity level - ensures that the PZU Group entity pursue its business objectives in a safe manner appropriate to the scale of the risk involved. Monitored at this level are the limits and risk categories specific to the company and, as part of the risk management system, mechanisms, standards and organization are implemented for the efficient operation of the internal control system (with particular emphasis on the compliance function), the risk management system (in particular in reinsurance area) and the security management system. PZU SA supervises the PZU Group's risk management system on the basis of mutual cooperation agreements concluded with PZU Group entities and the information provided on the basis of those agreements, and manages the PZU Group's risk in aggregate, in particular with regard to capital requirements. The agreements entered into and the scope of information to be provided take into consideration the specific legal nature of each entity, including limitations arising from banking secrecy rules. Risk management at the PZU Group level is ensured by an additional recommendation issued by PZU SA (as the parent company) regarding the organization of the risk management system in the subsidiaries indicated in PZU Group's risk management strategy. Additionally, guidelines regulating precisely the various risk management processes in PZU Group entities are in place. The management boards of PZU Group entities are responsible for fulfilling their own duties in accordance with the generally applicable provisions of national and international law. In particular, they are responsible for implementation of an adequate and effective risk management system. Supervision over the risk management systems in the various regulated entities is exercised by the supervisory boards to which PZU SA appoints its representatives. Furthermore, the Supervisory Board of PZU SA positively assesses the report of the Management Board on the application of best practices in force in 2025, as defined by the Prime Minister and referred to in Article 7(3)(2) of the Act of 16 December 2016 on rules for managing state property, which was submitted - in accordance with the requirement implemented in § 27(2)(2) of the Articles of Association of PZU SA - together with the Management Board's Report on the activity of the PZU Group and PZU SA in 2025 . Assessment of the application of Corporate Governance Rules for Regulated Institutions On 22 July 2014, the Polish Financial Supervision Authority issued the Corporate Governance Rules for Regulated Institutions (the "Rules"), which are a set of guidelines (soft law standards) that should be applied by regulated entities as of 1 January 2015 within the framework of applicable law and taking into account the principle of proportionality. The Management Board and Supervisory Board of PZU SA declared their readiness to apply the Rules to the objectively broadest possible extent, taking into account the principle of proportionality and the principle of "comply or explain" arising from their content. The said declarations were confirmed by the Management Board and Supervisory Board by adopting appropriate resolutions. Information on the application of the Rules was presented by the Management Board and Supervisory Board during the OSM of PZU SA held on 30 June 2015. The OSM of PZU SA declared that the Shareholder Meeting, acting within its powers, would be guided by the Rules, subject to those from which the OSM of PZU SA had waived application. The detailed statement on PZU SA's compliance with the Rules, taking into account the rules partially complied with and those which do not apply to PZU SA due to the nature of its operations is available on the PZU SA's website. In particular, PZU SA pays attention to the following matters and activities. PZU SA has appropriate bylaws and internal regulations for its organization and organizational structure; PZU SA's organization enables the achievement of longterm strategic goals and independent monitoring of operational and strategic risks; the PZU SA organizational structure is commensurate with the scale of operations, the extent of realized functions and the scale and complexity of risks, and it effectively supports the achievement of the Company's strategic objectives as well as immediate business and operating goals; PZU SA conducts its activities taking into account the interests of all stakeholders, including providing equal access to information to all shareholders of the Company; all information is posted, among other things, on the PZU SA website in the Polish and English-language Investor Relations service; the service has a separate tab dedicated only to Shareholder Meetings, where draft resolutions with justifications are posted each time a Shareholder Meeting is announced ; PZU SA's Articles of Association clearly define the competencies of the Management Board, Supervisory Board and Shareholder Meeting, ensuring the separation of ownership and management functions; The Management Board is the only body authorized and responsible for managing the business of PZU SA, acting in the interests of PZU SA, in accordance with the Rules and Regulations of the PZU SA Management Board and guided by laws, recommendations of supervisory authorities and internal regulations, having the safety of the Company in its mind; the work of the Company's Management Board is directed by the President; the Members of the Management Board are jointly responsible for the decisions which are reserved for their remit, regardless of the internal division of responsibility for the respective areas of operations; the scopes of the areas supervised by individual Members of the Management Board are defined in a clear and unambiguous manner in the Order of the President of the PZU SA Management Board on organizational oversight performed in the Company by the Management Board Members; Management Board Members are not involved in social or profit-making activity which could lead to a conflict of interest with respect to PZU SA's operations, or adversely affect their reputation as a Management Board Member; the Supervisory Board is a supervising body at PZU, it exercises constant and continuous supervision over PZU SA's operations in all areas and may undertake necessary supervisory action in an ongoing manner; Supervisory Board Members are not involved in social or profit-making activity which could lead to a conflict of interest with respect to PZU SA's operations, or adversely affect their reputation as a Supervisory Board Member; the rules for compensating the Management Board and Supervisory Board members are regulated by the Compensation Policy for members of the PZU SA Management and Supervisory Boards, adopted by the Shareholder Meeting of PZU SA by Resolution 36/2020 of 26 May 2020 (as amended); the Supervisory Board prepared and presented to the Ordinary Shareholder Meeting of PZU SA on 25 June 2025 the Report on the Compensation Policy at PZU SA, which is part of the Supervisory Board Report for 2024; the compensation policy is not an incentive to take excessive risk within PZU's operations; the rules governing variable compensation aim to support proper and efficient risk management, discourage excessive risk-taking, and assist in the implementation of the PZU Group's Strategy; PZU SA has internal regulations which cover, among other things, issues related to ensuring compliance of marketing activities with the law, in particular with the laws on competition and consumer protection and on combating unfair competition; PZU endeavors to make communication with clients simple and understandable; the process and rules for handling complaints, including issues of timeliness and quality of processing of client requests, are defined in PZU SA's internal regulations; PZU SA has an internal control system adapted to the scale of operations and organizational structure, there is an organizationally and competently separated Compliance Department, which performs tasks in ensuring compliance of the insurance company's operations with the law and internal regulations, and there is an effective internal audit function, whose activities consist of systematic and orderly evaluation of the adequacy and effectiveness of the internal control system and other elements of the management system; PZU SA has an adequate and effective risk management system; the Audit Committee of the PZU SA Supervisory Board supervises and monitors the effectiveness of the internal control, internal audit and risk management systems at PZU SA within the framework of the decisions set forth in the PZU SA's Articles of Association and the Rules and Regulations of the PZU SA Supervisory Board. PZU SA partially complies with: the rule laid down in § 8(4) of the Rules, concerning the enabling of all shareholders to participate in the Shareholder Meeting, including by procuring the possibility of actively participating electronically in the meetings. Presently, PZU SA shareholders may follow the broadcast of the Shareholder Meeting, however PZU SA decided not to introduce the so-called e-Shareholder Meeting, because, in PZU's opinion, there are a number of factors of a technological and legal nature which may affect the proper conduct of the Shareholder Meeting; legal concerns include the possibility of identifying the shareholders and verifying their legitimacy; the risk of the occurrence of technical difficulties, e.g. with the Internet connection or possible external interference in the IT systems, may disrupt the work of the Shareholder Meeting and evince doubts concerning the efficacy of the resolutions adopted during its course; the materialization of the above risks may affect the proper application of this rule to its full extent; the rule laid down in § 21(2) of the Rules, stipulating that in the composition of the supervising body, there should be a separate function of a chairperson who directs the work of the supervising body, and the election of the chairperson of the supervising body should be based on experience and leadership skills, taking into account the criterion of independence. Pursuant to the Commercial Company Code and the Articles of Association of PZU SA, the Supervisory Board includes the function of the Chairman of the Supervisory Board; the composition of the Supervisory Board, including the function of the Chairman, is shaped in accordance with the independence criteria indicated in UoBR; moreover, according to § 20(8) of PZU SA's Articles of Association, at least two members of the Supervisory Board meet the independence criteria set forth in the Best Practices of WSE Listed Companies, adopted by the Board of Giełda Papierów Wartościowych w Warszawie S.A. (Warsaw Stock Exchange). In particular, the election of the Chairman of the Supervisory Board is made on the basis of the criterion of possessed knowledge, experience and skills, which confirm the competence necessary for the proper performance of supervisory duties; the application of the criterion of independence in the case of the Chairman, according to the explanation of the Polish Financial Supervision Authority of the principle in question, may raise doubts about potential conflicts with the provisions of the law on the rights of shareholders; the rule laid down in § 49(3) of the Rules, concerning the appointment and dismissal in a regulated institution of the person managing the internal audit cell and the person managing the compliance cell with the consent of the supervising body or the audit committee. PZU SA applies the rules laid down in § 14 of the Rules to their full extent, which means that the PZU SA Management Board is the sole body empowered to, and responsible for, managing the Company's activity; moreover, according to the labor law regulations, the managing body exercises labor law activities; on account of the foregoing, PZU SA has adopted a solution that anticipates that the selection and dismissal of the person managing the internal audit cell is accomplished while taking into account the opinion of the Audit Committee of the PZU SA Supervisory Board; the person managing the compliance cell is appointed and dismissed in an identical manner; in making these decisions, the Management Board obtains the Audit Committee's opinions. The PZU SA Shareholder Meeting has waived the following rules: the rule laid down in § 10(2) of the Rules reading as follows: "The implementation of personal rights or other special rights for shareholders of the regulated institution should be justified and serve the accomplishment of the regulated institution's material operating goals. The possession of such rights by shareholders should be reflected in the wording of the primary governing document of the regulated institution." The waiving of this rule is due to the unfinished process of the Company's privatization by the State Treasury; in practice, in accordance with the generally applicable law, including the Commercial Company Code, all shareholder rights are reflected in the Company's Articles of Association and are always justified; an example is § 20(7) of the Articles of Association, which grants the State Treasury the right to appoint and remove one member of the Supervisory Board. Leaving such a power to the State Treasury was justified during the period of the Company's privatization, with the Articles of Association stating that this power will expire when the Treasury ceases to be a shareholder of the Company. the rule laid down in § 12(1) of the Rules reading as follows: "Shareholders are responsible for recapitalizing without delay a regulated institution in a situation in which it is necessary to maintain the regulated institution's equity at the level required by the legal regulations or oversight regulations as well as when the security of the regulated institution so requires." The waiving of this rule is due to the unfinished process of the Company's privatization by the State Treasury; the decision to apply this rule should be made by the Company's shareholders, taking into account the provisions of generally applicable law, in particular Article 301 §§ 4 and 5 of the Commercial Company Code, according to which sharehol...

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