Annual Financial Report for 2025

ANNUAL REPORT

of TAURON Polska Energia S.A. for 2025

Dear Shareholders,

As we are reflecting on 2025, the first year of implementing TAURON Group's Strategy, we can say with undisguised satisfaction: #WeDeliver on our commitments. This motto not only captures TAURON Group's operating philosophy and sets it apart on the market, but above all builds its reputation and the trust of the Stakeholders, as evidenced, among other things, by the Company's stock market valuation. The strategy we have adopted is delivering results, as demonstrated by the financial performance achieved in 2025. 2025 brought favorable market conditions, creating a solid foundation for growth. It was a beneficial period for Poland's energy transition, for the capital market and for TAURON as well. Stabilized inflation, economic growth, interest rate cuts and the National Recovery Plan (NRP) funds stimulated investments, while the GDP topped one trillion dollars for the first time, placing Poland among the world's top 20 largest economies. The energy sector entered a new stage of transition - in June 2025, RES generated more electricity than the coal fired sources. The Warsaw Stock Exchange enjoyed a bull market, and the share prices of the energy companies, including TAURON, reached record highs. The financial results we have delivered are the best evidence of the effectiveness of the first year of the implementation of our Strategy. The Group achieved its highest ever EBITDA of PLN 7.5 billion, posting a 16 percent increase year on year. The key drivers of this growth were the Distribution segment (64 percent), the Generation segment (13 percent) and the Supply and Wholesale Trading segment (9 percent). The net profit for 2025 came in at PLN 3.3 billion, a result nearly six times better than in 2024, attributable, among other things, to the strong EBITDA performance in 2025 and the booking of asset impairment charges in the amount of PLN 1.5 billion in 2024. The Group's financial position is very strong, as confirmed by the low level of the net debt to EBITDA covenant, a key metric for the lenders, and the upgrading of the outlook on the ratings assigned by Fitch from stable to positive.

Ambitious investment projects require a solid capital base. PLN 6.6 billion raised in 2025 for the expansion purposes, including PLN 4.9 billion in the preferential financing from the NRP funds, combined with the funds allocated at the end of 2024, provided an impressive combined pool of money worth nearly PLN 16 billion for the construction and modernization of the distribution grids. This was supplemented by PLN 700 million to support the digital transformation and the construction of the photovoltaic farms and hydrogen production facilities, PLN 450 million in project finance for the wind energy projects, and PLN 538 million in grants for the construction of 11 energy storage facilities, enabling us, in the very first year of the implementation of our Strategy, to already secure close to 20 percent (i.e. PLN 18 billion) of the 20 - 30 percent of the preferential source financing announced in the Strategy.

The results achieved are tangibly shoring up the expansion of our RES portfolio, the energy storage segment and the just transition efforts. In 2025, we commissioned 187 MW of installed capacity in wind and photovoltaic farms, delivered TAURON Group's first installation in which a photovoltaic plant shared a grid connection with a wind farm - PV Postomino, and following the commissioning of the photovoltaic farm in Bałków, we topped 1 GW of installed RES capacity. In addition, 15 battery energy storage systems with a total capacity of nearly 560 MW (2 383 MWh) are currently under construction. Just transition and corporate social responsibility are the values that form our DNA and underpin our ESG strategy. We remember those who built the foundations of our Group. The sites where the conventional hard coal fired power plants are currently operated will be transformed into the modern hubs, while a smart power

grid will cover the south of the country. In 2025, the hard coal fired units at the Jaworzno, Łagisza, Łaziska and Siersza power plants won the supplementary capacity market auction for 2026, enabling their profitable operation for another year and opening the prospect of the continued operation in the subsequent years. In parallel, we are developing a new generation of the peaking gas fired units - we have obtained the grid connection conditions for 1.4 GW of the OCGT units capacity, and for the planned 600 MW unit in Jaworzno we have secured a 15 year capacity contract with a total value of PLN 3.7 billion. In the district heating line of business, we completed the construction of 216 MWt of the gas fired peaking and back up units, constituting an important element of the decarbonization process for this segment, and we commenced the construction of the additional units with a capacity of 30 MWt in gas cogeneration. We are an important element of the national power system security, underpinning the functioning of the economy. Our investment portfolio encompasses a wide array of further projects including, among other things, renewable energy sources, modernization of the distribution grids, transition of the district heating, energy storage, gas fired units and hydrogen production.

Our key growth driver continues to be the distribution segment. In 2025, we allocated PLN 3.8 billion to the investment projects carried out in this line of business, which accounted for nearly 70 percent of the Group's total capital expenditures. These funds were directed, first and foremost, towards the modernization of the grid assets (PLN 1.4 billion), the grid connections of the new customers (PLN 1.6 billion) and the digitization of the infrastructure (PLN 700 million). By the end of last year, the number of the customers connected to the distribution grid had grown by 60 000, to clock in at 6.05 million. Nearly 43 percent of our customers had remote readout meters installed, surpassing the 2025 target set by the energy law by 8 percentage points. Thanks to the eLicznik app, TAURON Dystrybucja's customers were able to monitor their electricity consumption in real time and thus better manage their energy bills. In 2025, 50 percent of the grid connection conditions were issued online, and the customer centric direction we have set will be continued in the years ahead. The business core of TAURON Group is the group of 6 million customers connected to our distribution grid. Our goal is to become the most customer focused energy company in Poland. In response to the customer expectations, in 2025 we introduced a wide range of products and services - including a new invoice, already available to more than 50 percent of the customers - simplified both in terms of its substantive content as well as its visual layout. An effect of this solution's implementation was a reduction of the customer billing queries by as much as 20 percent. We are the national trail blazers in the introduction of a dynamic distribution tariff, which enables our customers to actively manage their electricity consumption. We are developing remote contact channels, already used by 50 percent of our customers. In the first half of last year, we had launched an electronic document delivery service, reducing paper circulation in the dealings with the external and internal customers, and as a consequence generating savings of PLN 5 million. By the end of 2025, 2.85 million customers had been using the Mój Tauron (My Tauron) ecosystem, which moves the processes to an online format. In addition to the offering based on the tariff approved by the President of the ERO, we have products with price guarantees of up to 9 years, enabling us to provide the full flexibility to our customers. We are introducing modern dynamic and time of use (TOU) based tariffs ("Tanie godziny" - "Cheap Hours"), already used by more than 30 000 of our customers. We are working intensely to reduce the energy bill amounts, with our energy advisor supporting the customers by identifying the most cost effective tariff for them. In 2025, more than 550 000 households had already taken advantage of the advisory services with respect to selecting the most favorable tariff. We are offering comprehensive energy solutions for businesses, tailored to the scale of their operations - starting from the standard fixed term contracts up to the advanced products based on the power exchange quotations. As part of intensifying our support for the development of the zero carbon transport, we commissioned 198 electric vehicle charging stations, which have so far been used by more than 30 000 customers. We are actively supporting the local content participation in our supply chain. Currently, approximately 70 percent of the value of the purchase orders across the Group, and up to 90 percent in the Distribution segment,

goes to the domestic suppliers and contractors, which translates into a tangible support for the Polish economy and the development of the industry competences. At the same time, we are creating favorable conditions for the local contractors and actively supporting the development of the domestic technologies, including the solutions for RES and the digitization of the grid infrastructure. The important elements of this approach include our investment projects such as the Miejska Górka wind farm, with a capacity of 191 MW. i.e. a project that provides a material stimulus for the development of the local companies participating in the construction, maintenance and supply processes.

We are steadfastly shoring up our growth and creating value for the Shareholders. In 2025, we recorded an impressive, more than twofold increase in TAURON's market capitalization, with the share price reaching successive all time highs throughout the year. A tangible result of the improvement of the company's market position is the inclusion of TAURON shares in the WIG20 stock market index following this year's review of the composition of the stock index portfolios. This is a significant step that reinforces TAURON's position among the largest and most liquid companies listed on the Warsaw Stock Exchange, while also elevating interest in the Group among the world's largest international investors. We would like to thank you for the trust that you have placed in us and for your support in achieving our strategic objectives. We have a year of intense work behind us, which has yielded excellent results and a series of the new projects. In 2026, we will continue to focus on implementing the projects with a high growth and return on investment potential for the Shareholders, maintaining the balance between the financial performance and the principles of sustainable development, corporate social responsibility and a just transition, while taking care of the security and development of our regions and country.

Respectfully yours,

Grzegorz Lot President of the Management Board of TAURON Polska Energia S.A.

Selected financial data

TAURON Polska Energia S.A.

in PLN million in EUR million

The above financial data was converted according to the following principles:

• individual items of the statement of financial position - at the average exchange rate of NBP announced as of December 31, 2025 - PLN/EUR 4.2267 (as of December 31, 2024 - PLN/EUR 4.2730),

• individual items of the statement of comprehensive income and the statement of cash flows - at the exchange rate that is an arithmetic mean of the average exchange rates of NBP announced as of the last day of each month of the financial year running from January 1, 2025 to December 31, 2025 - PLN/EUR 4.2372 (for the period from January 1, 2024 to December 31, 2024 - PLN/EUR 4.3042).

Rozporządzenie zakłada udzielanie przez NFOŚiGW pomocy

publicznej ze środków Funduszu Modernizacyjnego na: Rozporządzenie stanowiło podstawę do ubiegania

1. budowę niezależnych magazynów energii elektrycznej 7 marca 2025 r. się o pomoc publiczną na o mocy nie mniejszej niż 2 MW oraz pojemności nie rozporządzenie inwestycje w rozwój

mniejszej niż 4 MWh podłączonych do linii zostało opublikowane magazynów energii. Segment OZE

przesyłowych lub dystrybucyjnych, niezależnie od w Dzienniku Ustaw. Spółki Grupy TAURON Grupa wysokości napięcia, podpisały z NFOŚiGW TAURON

Rozporządzenie umowy o dofinansowanie

2. budowę przyłącza do sieci i infrastruktury weszło w życie. na blisko 538 mln PLN dla towarzyszącej, bateryjnych magazynów

3. konfigurację i adaptację magazynów. energii.

Projekt ustawy o zmianie ustawy o efektywności energetycznej oraz niektórych innych ustaw (UC77)

Projekt ustawy zakłada wdrożenie środków służących kompleksowemu wspieraniu efektywności energetycznej w całej

gospodarce, aby osiągnąć cele w zakresie efektywności 30 września 2025 r. Ustawa ma wpływ na Grupę energetycznej na 2030 r. wynikające z dyrektywy Parlamentu projekt został TAURON, w tym w Segment Europejskiego i Rady (UE) 2023/1791 z dnia 13 września 2023 r. przekazany do szczególności na Segment Sprzedaż w sprawie efektywności energetycznej oraz zmieniającej uzgodnień

rozporządzenie (UE) 2023/955 oraz dalszą poprawę międzyresortowych, Sprzedaży, w zakresie

efektywności energetycznej po roku 2030. Projektowana opiniowania realizacji obowiązku Grupa regulacja m.in. zmienia zapisy dotyczące warunków, które i konsultacji umorzenia tzw. białych TAURON podmiot zobowiązany musi spełnić, aby móc zrealizować publicznych. certyfikatów.

obowiązek umorzenia tzw. białych certyfikatów, uiszczając opłatę

zastępczą.

Projekt rozporządzenia Rady Ministrów zmieniającego rozporządzenie w sprawie przedsięwzięć mogących znacząco oddziaływać na środowisko (RD239)

20 listopada 2025 r. Projekt rozporządzenia ma

Projektowana zmiana dotyczy zniesienia obowiązku uzyskania projekt został wpływ na realizację Segment OZE

decyzji o środowiskowych uwarunkowaniach w związku przekazany do rozważanych przez Grupę

z modernizacją farm wiatrowych (repowering) zlokalizowanych uzgodnień TAURON inwestycji w Grupa

poza formami ochrony przyrody, której celem jest zwiększenie międzyresortowych,

łącznej mocy nominalnej elektrowni o nie więcej niż 30 %. opiniowania i zakresie repoweringu farm TAURON

konsultacji publicznych. wiatrowych.

Projekt ustawy o zmianie niektórych ustaw w celu dokonania deregulacji w zakresie energetyki (UDER92)

biomasa 98 61 161%

pozostałe 69 32 216%

EBIT 661 -1 046 -

amortyzacja i odpisy -287 -1 792 16%

EBITDA 948 746 127%

W 2025 r. przychody ze sprzedaży Segmentu Wytwarzanie były o 2% tj. o 145 mln PLN niższe w porównaniu z 2024 rokiem. Spadek ten wynikał przede wszystkim z niższych przychodów ze sprzedaży energii elektrycznej,

będących efektem rynkowego spadku cen. Został on częściowo zrekompensowany wyższymi przychodami z rynku mocy, wynikającymi z aktualizacji cen w umowach wieloletnich.

Independent Auditor's report

on the audit of the annual standalone financial statements of TAURON Polska Energia S.A. for 2025

Translation note:

This version of our report is a translation from the original, which was prepared in Polish. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions, the original language version of our report takes precedence over this translation.

Independent Statutory Auditor's Report

To the General Shareholders' Meeting and the Supervisory Board of TAURON Polska Energia S.A.

Report on the audit of separate financial statements Our opinion

In our opinion section, the annual separate financial statements:

• give a true and fair view of the separate financial position of TAURON Polska Energia S.A. (the "Company") as at 31 December 2025 and the Company's separate financial performance and separate cash flows for the year then ended in accordance with the applicable International Financial Reporting Standards as adopted by the European Union and the adopted accounting policies;

• comply in terms of form and content with the laws applicable to the Company and the Company's

  articles of association;

• have been prepared on the basis of properly maintained books of accounts in accordance with the

  provisions of Chapter 2 of the Accounting Act of 29 September 1994 (the "Accounting Act").

  Our opinion is consistent with our additional report to the Audit Committee of the Company issued on the date of this report.

  What we have audited

  We have audited the annual separate financial statements of TAURON Polska Energia S.A. which comprise:

• the separate statement of financial position as at 31 December 2025;

• the separate statement of comprehensive income for the financial year then ended;

• the separate statement of changes in equity for the financial year then ended;

• the separate statement of cash flows for the financial year then ended, and

• material accounting policy information and other explanatory information.

Basis for opinion

We conducted our audit in accordance with the National Standards on Auditing in the wording of the International Standards on Auditing as adopted by the resolutions of the National Council of Statutory Auditors and the resolution of the Council of the Polish Agency for Audit Oversight ("NSA") and pursuant to the act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Oversight (the "Act

on Statutory Auditors") and the Regulation (EU) No. 537/2014 of 16 April 2014 on specific requirements regarding the statutory audit of public interest entities and repealing Commission Decision 2005/909/EC (the "EU Regulation"). Our responsibilities under NSA are further described in the Auditor's responsibilities for the audit of the separate financial statements section.

PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt Sp.k., KTW II, Aleja Roździeńskiego 1B, 40-202 Katowice, Poland

https://www.pwc.pl

PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp.k. with registered office at ul. Polna 11, 00-633 Warsaw, entered into National Court Register by the District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS No 0000750050, Tax ID No (NIP) 5260210228.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Company in accordance with the ethical requirements of the EU Regulation that are relevant to audits of financial statements of public interest entities, the ethical requirements

of the Act on Statutory auditors that are relevant to audits of financial statements in Poland and "the Handbook of the International code of ethics for professional accountants (including International independence standards) (the "Code of ethics") as adopted by resolution of the National Council of Statutory Auditors as applicable to audits of financial statements of public interest entities. We have also fulfilled our other ethical responsibilities in accordance with ethical requirements of the EU Regulation, ethical requirements of the Act on Statutory Auditors and the Code of ethics. During the audit, the key statutory auditor and the audit firm remained independent of the Company in accordance with the independence requirements set out in the Act on Statutory Auditors and in the EU Regulation.

Our audit approach

Overview

Materiality The overall materiality threshold adopted for our audit was set at PLN 120 million. The benchmark used to determine materiality was 0.5% of total assets. Overall materiality calculated with reference to total assets exceeded the overall materiality level applied in the audit of the consolidated financial statements of the TAURON Polska Energia S.A. Group; therefore, materiality for the audit of the separate financial statements was set at a lower level in the context of the audit of the consolidated financial statements.

Key audit

matters Impairment of shares and loans granted.

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the separate financial statements. In particular, we considered where the Company's management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the separate financial statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the industry in which the Company operates.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the separate financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken

on the basis of the separate financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the separate financial statements as a whole, as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit

and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, if any, both individually and in aggregate on the separate financial statements as a whole.

Overall materiality PLN 120 million

How we determined it 0.5% of total assets, adjusted to reflect the lower materiality level

determined in the context of the audit of the consolidated financial statements

Rationale for the materiality benchmark applied

We selected the Company's total assets as the benchmark for determining materiality, as in our view this measure is appropriate for assessing the activities of a holding company.

We set materiality at 0.5%, as based on our professional judgement this level falls within an acceptable range of quantitative materiality thresholds.

The materiality calculated for the audit of the separate financial statements was adjusted to reflect the lower materiality level determined in the context of the audit of the consolidated financial statements.

We agreed with the Audit Committee of the Company that we would report to them misstatements of the separate financial statements identified during our audit above PLN 6 million, as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the separate financial statements of the current period. These matters were addressed in the context of our audit of the separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter How our audit addressed the key audit matter

Impairment of shares and loans granted

As at 31 December 2025, the Company held investments in subsidiaries and jointly controlled entities, as well as investments in other entities, with a total gross carrying amount of PLN 26,422 million (Note 20), and loans granted to subsidiaries measured at amortized cost with a total gross carrying amount of PLN 8,537 million (Note 21). The carrying amount of investments in subsidiaries, jointly controlled entities and other entities, together with loans granted to subsidiaries measured at amortized cost, amounted to PLN 25,581 million, representing 83% of the Company's total assets.

In accordance with IAS 36 "Impairment of Assets", the Company's Management performs, at the end of each reporting period, an assessment of indicators of impairment and, where such indicators exist, impairment tests are carried out as at the reporting date. In accordance with IFRS 9 "Financial Instruments", the Company's Management also estimates, at the end of each reporting period, expected credit losses in respect of loans granted to subsidiaries measured at amortized cost.

In Note 11 to the separate financial statements, "Impairment of financial assets", the Company presented disclosures relating to impairment tests performed on investments in subsidiaries and joint ventures, as well as on intragroup loans. These tests take into account the specific characteristics of individual business segments, including the gradual phase-out of conventional generation units, the modernisation and decarbonisation of heat generation assets, and the development of the renewable energy portfolio, in particular wind farms. The note also discloses the results of the impairment tests, the key assumptions applied in determining value in use, and a sensitivity analysis of the calculations to reasonably possible changes in the main assumptions used in determining the recoverable amounts of shares, equity investments in subsidiaries and intragroup loans.

As a result of the impairment tests performed as at 31 December 2025, impairment losses recognised in prior periods on shares in TAURON Ciepło Sp. z o.o. were reversed in the amount of PLN 189 million, and the valuation of the loan granted to TAURON Wytwarzanie Sp. z o.o. was increased by PLN 203 million.

The determination of recoverable amounts and the estimation of expected credit losses involve the adoption of a number of assumptions and the exercise of significant judgement by the Company's Management, including assumptions relating to the adopted strategy of the TAURON Polska Energia Capital Group, financial

Our audit procedures included, in particular:

• obtaining an understanding of and evaluating the process for identifying indicators of impairment of financial assets;

• verifying the mathematical accuracy and methodological consistency (with the involvement of PwC internal valuation specialists) of the discounted cash flow models prepared by the Company's Management for the determination of recoverable amounts, as well as the models used to estimate expected credit losses;

• critically assessing the assumptions adopted and estimates made by the Company's Management in determining the recoverable amounts of investments in subsidiaries and expected credit losses on loans granted, including, among others:

  • the forecast period for future cash flows and the assumed levels of revenues, operating margins and capital expenditures necessary to maintain operations at their current level;

  • the discount rates applied (based on the weighted average cost of capital);

  • the terminal growth rate applied beyond the forecast period, where used in the calculation of recoverable amounts;

• evaluating the sensitivity analyses performed by Management with respect to the key assumptions that may affect the valuation outcomes;

• assessing the appropriateness and completeness of the disclosures related to impairment testing included in the separate financial statements.

plans and cash flow forecasts for future periods, as well

as macroeconomic and market assumptions (primarily relating to electricity prices, fuel prices, CO₂ emission allowance prices, support schemes for renewable energy sources and the capacity market).

Given the significance of the above balances in the separate financial statements, as well as the sensitivity of the results of the impairment tests and valuations to the assumptions applied, this matter was subject to our enhanced audit procedures and was considered a key audit matter in the audit of the separate financial statements.

Responsibility of the Management and Supervisory Board of the Company for the separate financial statements

The Management Board of the Company is responsible for the preparation, based on the properly maintained books of accounts of the annual separate financial statements that give a true and fair view of the Company's financial position and financial performance, in accordance with International Financial Reporting Standards as adopted by the European Union, the adopted accounting policies, the applicable laws and the Company's Articles of Association, and for such internal control as the

Company's Management Board determines is necessary to enable the preparation of separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the separate financial statements, the Company's Management Board is responsible

for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Company's Management Board either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Company's Management Board and members of the Supervisory Board are obliged to ensure that

the separate financial statements comply with the requirements specified in the Accounting Act. Members of the Supervisory Board are responsible for overseeing the financial reporting process.

Auditor's responsibility for the audit of the separate financial statements

Our objectives are to obtain reasonable assurance about whether the separate financial statements

as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the NSA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence economic decisions

of users taken on the basis of these separate financial statements.

The scope of the audit does not include an assurance on the Company's future profitability nor the efficiency and effectiveness of conducting its affairs by the Company's Management Board, now or in future.

As part of an audit in accordance with NSA, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control;

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting

  estimates and related disclosures made by the Company's Management Board;

• conclude on the appropriateness of the Company's Management Board's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue

  as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern;

• evaluate the overall presentation, structure and content of the separate financial statements, including the disclosures, and whether the separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  We communicate with the Audit Committee of the Company regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

  We also provide the Audit Committee of the Company with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

  From the matters communicated to the Audit Committee of the Company, we determine those matters that were of most significance in the audit of the separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

  Other information, including the report on operations

  Other information comprises:

• the Report of the Management Board on the operations of TAURON Polska Energia S.A. and TAURON Capital Group for 2025 ("the Report on the operations") together with the corporate governance statement and the sustainability statement which are separate parts of the Report on the operations,

• the consolidated report on payments to the public administration,

• other documents included in the Annual Report for the financial year ended 31 December 2025

  (together "Other Information").

  Responsibility of the Management and Supervisory Board of the Company

  The Management Board of the Company is responsible for the preparation of the Other Information in accordance with the law.

  The Company's Management Board and the members of the Supervisory Board are obliged to ensure that the Report on the operations, including its separate parts, and the consolidated report on payments to the public administration comply with the requirements of the Accounting Act.

  Statutory auditor's responsibility

  Our opinion on the separate financial statements does not cover the Other Information.

  In connection with our audit of the separate financial statements, our responsibility under NSA is to read the Other Information and, in doing so, consider whether the Other Information is materially inconsistent with the information in the separate financial statements, our knowledge obtained in our audit, or otherwise appears to be materially misstated. If, based on the work performed, we identified a material misstatement in the Other Information, we are obliged to inform about it in our audit report.

  In accordance with the requirements of the Act on Statutory Auditors, we are also obliged to issue

  an opinion on whether the Report on the operations, to the extent not related to sustainability reporting, has been prepared in accordance with the requirements of Article 49 of the Accounting Act and para.

  72 of the Regulation of the Minister of Finance dated 6 June 2025 on current and periodical information submitted by issuers of securities and conditions for considering as equivalent the information required under the legislation of a non-Member State ("Regulation on current information") is consistent with information included in separate financial statements and to issue a statement as to whether, in the light of the knowledge about the Company and its environment obtained during the audit, any material misstatements have been identified in the Report on the operations to the extent not related to sustainability reporting, and an indication of what any such material misstatement is.

  Moreover, we are obliged to issue an opinion on whether the Company provided the required information in its corporate governance statement.

  Statement on the Other information

  We declare that, based on the knowledge of the Company and its environment obtained during our audit:

• we have nothing to report regarding identification of material misstatements in the Other information;

• we have not identified any material misstatements in the Report on the operations, to the extent not related to sustainability reporting.

  Opinion on the Report on the operations, to the extent not related to sustainability reporting

  Based on the work we carried out during our audit, in our opinion, the Report on the operations, to the extent not related to sustainability reporting:

• has been prepared in accordance with the requirements of Article 49 of the Accounting Act and para. 72 of the Regulation on current information;

• is consistent with the information in the separate financial statements.

Opinion on the corporate governance statement

In our opinion, in its corporate governance statement, the Company included information set out in para.

72.7 (5) of the Regulation on current information. In addition, in our opinion, information specified in paragraph 72.7 (5)(c)-(f), (h) and (i) of the said Regulation included in the corporate governance statement are consistent with the applicable provisions of the law and with information included in the separate financial statements.

Report on other legal and regulatory requirements Opinion on the requirements of Article 44 of the Energy Law

The Management Board of the Company is responsible for preparing regulatory financial information in accordance with the requirements of Article 44 of the act of 10 April 1997 - Energy Law ("Energy Law").

In accordance with Article 44 of the Energy Law, we are obliged to audit regulatory financial information and to issue an opinion required by the Energy Law.

Regulatory financial information has been presented in Note 47 to the separate financial statements. Our audit did not cover an evaluation as to whether the information required to be disclosed under the Energy Law is sufficient to ensure equal treatment of consumers and to eliminate cross-subsidization between segments.

In our opinion, the relevant items of the separate statement of financial position as at 31 December 2025 and statement of comprehensive income for the year then ended prepared separately for each of the operating segments included in the regulatory financial information (explanatory note no. 47) comply, in all material respects, with the requirements referred to in Article 44(2) of the Energy Law, in terms of ensuring the equal treatment of users and elimination of cross-subsidization between segments.

Statement on the provision of non-audit services

To the best of our knowledge and belief, we declare that the non-audit services that we provided to the Company and its controlled entities within the European Union are in accordance with the applicable laws and regulations in Poland and that we have not provided non-audit services that are prohibited under Article 5(1) of the EU regulation and Article 136 of the Act on Statutory Auditors.

The non-audit services which we have provided to the Company and its controlled entities during the period from the beginning of the audited period to the date of issuing this report are disclosed in the Report on the operations.

Appointment

We have been appointed to audit the annual separate financial statements of the Company by the Resolution of the Supervisory Board of the Company of 21 October 2024. The separate financial statements of the Company were audited by us for the first time.

The Key Statutory Auditor responsible for the audit on behalf of PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp.k., a company entered on the list of audit firms with the number 144., is Borys Malinowski.

Original report is signed in Polish

Borys Malinowski Key Statutory Auditor

No. in the registry 12798 Katowice, 30 March 2026

TAURON Polska Energia S.A.

Separate financial statements compliant with International Financial Reporting Standards approved by the European Union

for the year ended 31 December 2025

Table of Contents

SEPARATE STATEMENT OF COMPREHENSIVE INCOME 4

SEPARATE STATEMENT OF FINANCIAL POSITION 5

SEPARATE STATEMENT OF CHANGES IN EQUITY 6

SEPARATE STATEMENT OF CASH FLOWS 7

INFORMATION ON TAURON POLSKA ENERGIA S.A. AND BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS 8

General Information on TAURON Polska Energia S.A 8

Shares in related parties and joint ventures 9

Statement of compliance 11

Going concern 11

Functional currency and presentation currency 11

Accounting principles (policy) and material values based on professional judgement and estimates 11

Standards published and amendments to accounting standards which have not entered into force yet 12

Changes in accounting policies applied and presentation as well as restatement of comparable data 15

Climate change and its impact on the financial statements and the accounting principles applied 15

Information on operating segments 19

IMPAIRMENT IN VALUE OF FINANCIAL ASSETS 20

Impairment in value of financial assets 20

EXPLANATORY NOTES TO THE SEPARATE STATEMENT OF COMPREHENSIVE INCOME 25

Sales revenue 25

Costs by type 26

Employee benefit expenses 27

Financial revenues and costs 28

Income tax 29

Earnings/(loss) per share 30

EXPLANATORY NOTES TO THE SEPARATE STATEMENT OF FINANCIAL POSITION 30

Investment real estate 30

Right-of-use assets 30

Shares 31

Loans granted 33

Derivatives 36

Other financial assets 37

Other non-financial assets 38

Deferred income tax 38

Inventories 39

Receivables from customers 40

Cash and cash equivalents 41

Equity 41

Debt liabilities 43

Other financial liabilities 47

Liabilities to suppliers 48

Income tax liabilities and Tax Capital Group 48

Other current non-financial liabilities 49

Other provisions, accruals and governmental subsidies 49

EXPLANATORY NOTE TO THE SEPARATE STATEMENT OF CASH FLOWS 50

Significant items of the statement of cash flows 50

FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT 52

Financial instruments 52

Objectives and principles of financial risk management 59

Operational risk 69

OTHER INFORMATION 70

Contingent liabilities 70

Collaterals for repayment of liabilities 73

Investment liabilities 74

Related party disclosures 74

Finance and capital management 75

Employment structure 76

Fee of the certified auditor or the entity authorized to audit financial statements 76

Structure of financial statements broken down by business activity type in line with Article 44 of the Energy Law 76

Other material information 79

Events after the balance sheet date 80

‌SEPARATE STATEMENT OF COMPREHENSIVE INCOME

Note Year ended

31 December 2025

Year ended

31 December 2024

(restated figures)

‌SEPARATE STATEMENT OF FINANCIAL POSITION

ASSETS

Non-current assets

Note As at

31 December 2025

As at

31 December 2024

‌SEPARATE STATEMENT OF CHANGES IN EQUITY

Issued

Reserve

Revaluation reserve on

Retained earnings/

Note

capital

capital

valuation of

hedging instruments

(Accumulated losses)

Total

‌SEPARATE STATEMENT OF CASH FLOWS

Note Year ended

Net increase/(decrease) in cash and cash equivalents

(117)

(330)

31 December 2025

Year ended

31 December 2024

‌INFORMATION ON TAURON POLSKA ENERGIA S.A. AND BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

‌

General Information on TAURON Polska Energia S.A.

These financial Separate statements have been prepared by TAURON Polska Energia Spółka Akcyjna (the "Company") with shares publicly traded. The Company was established by a Notarial Deed on 6 December 2006 under the name Energetyka Południe S.A. The change of its name to TAURON Polska Energia S.A. was registered by the District Court on 16 November 2007.

Basic information about the Company

TAURON Polska Energia S.A. is the parent company of the TAURON Polska Energia S.A. Capital Group. ("The Group, TAURON Group").

The Company has prepared the separate financial statements covering the year ended 31 December 2025 and including comparative figures for the year ended 31 December 2024. These separate financial statements were approved for publication by the Management Board on 30 March 2026.

The Company has also prepared consolidated financial statements for the year ended 31 December 2025, approved for publication by the Management Board on 30 March 2026.

Composition of the Management Board

As at 1 January 2025, the composition of the Management Board was as follows:

• Grzegorz Lot - President of the Management Board,

• Piotr Gołębiowski - Vice President of the Management Board,

• Michał Orłowski - Vice-President of the Management Board,

• Krzysztof Surma - Vice President of the Management Board.

  On 17 December 2025, the Supervisory Board of the Company adopted a resolution dismissing Mr Piotr Gołębiowski from the Management Board of the Company and from his position as Vice President of the Management Board, with effect from 17 December 2025. On the same day, the Supervisory Board adopted a resolution on delegating a Member of the Supervisory Board, Mr Krzysztof Zawadzki, to temporarily perform the duties of a Member of the Management Board of the Company, assigning him the duties of Vice President of the Management Board for Trade from 1 January 2026 for a period not exceeding three months from the date of the assignment.

  After the balance sheet date, on 24 March 2026, the Company's Supervisory Board appointed, as of 25 March 2026, Mr. Krzysztof Zawadzki to the Company's Management Board and entrusted him with the function of Vice President of the Management Board for Trade.

  As at the date of approval of these separate financial statements for publication, the Management Board consisted of:

• Grzegorz Lot - President of the Management Board,

• Michał Orłowski - Vice President of the Management Board,

• Krzysztof Surma - Vice President of the Management Board,

• Krzysztof Zawadzki - Vice President of the Management Board.

‌

Shares in related parties and joint ventures

As at 31 December 2025, TAURON Polska Energia S.A. held direct and indirect interest in the following key jointly-controlled companies in the Heat segment:

1 Ownership of the shares is subject to the arbitration proceedings referred to in Note 40 of these separate financial statements.

2 On 9 August 2024, TAMEH Czech s.r.o. was declared bankrupt by liquidation which translated into the loss of joint control over the above company on that date within the meaning of IFRS.

‌Statement of compliance

These separate financial statements have been prepared in compliance with the requirements of the International Financial

Reporting Standards ("IFRS") approved by the European Union ("EU").

The IFRS comprise standards and interpretations approved by the International Accounting Standards Board ("IASB") as

well as the International Financial Reporting Interpretations Committee.

‌

Going concern

These separate financial statements have been prepared with the assumption of continuation of activities by the Company as a going concern in the foreseeable future, i.e. in the period not shorter than one year following the balance sheet day. As at the date of approval of these separate financial statements for publication, no circumstances had been identified which would indicate a risk to the Company's ability to continue as a going concern.

The Company identifies and actively manages liquidity risk, understood as the possibility of losing or limiting the capacity to settle current expenses. Despite the existence of an excess of current liabilities over current assets (the so-called negative working capital), the Company has full capacity to settle its liabilities when they fall due. As at the balance sheet day the Company has available guaranteed lending facilities of PLN 6 190 million, which are described in more detail in Note 38.2 of these separate financial statements. The Company manages its liquidity in a conscious manner and uses available funding when specific liquidity needs arise, thereby optimising the cost of fund raising.

In the area of liquidity, financing and securing the continuity of operating activities, the Management Board, having analysed the financial position of the Company does not identify any risk to the continuity of operations as a going concern in the foreseeable future, i.e. within a period not shorter than 1 year from the balance sheet day.

‌

Functional currency and presentation currency

Polish zloty is the functional currency of the Company and the presentation currency of these separate financial statements. These separate financial statements are presented in Polish zloty ("PLN") while all figures are provided in PLN million ("PLN million"), unless indicated otherwise.

‌

Accounting principles (policy) and material values based on professional judgement and estimates

The significant accounting principles are presented in individual notes to these separate financial statements.

When applying the accounting policy, the professional judgement of the management, along with accounting estimates, have been of key importance, affecting the figures disclosed in these financial statements and in the additional explanatory notes. The assumptions underlying these estimates are based on the Management Board's best knowledge of current and future actions and events in individual areas. In the period covered by these separate financial statements, no significant changes occurred in the estimates or estimation methods applied, which could affect the current or future periods, other than those described hereinafter in these separate financial statements.

Climate issues are an integral component of the models used in the estimation process, in particular with regard to the impairment tests carried out on shares in subsidiaries and the valuation of loans to subsidiaries and joint ventures. The impact of climate issues on these separate financial statements is presented in Note 9.

The uncertainty in estimates carries the risk of significant adjustment to the carrying amounts of assets and liabilities. Items of the financial statements that involve a significant risk of material adjustment to the carrying amounts of assets and liabilities, information on the estimates and judgements made by management, including the key assumptions made and sensitivity analyses for changes in these assumptions are described in the individual notes to these separate financial statements.

The most significant estimates are presented in the table below.

Main elements subject to

Impact of key estimates on the separate

Item

Shares Note 11, 20

Originated loans Note 21

Financial derivatives Note 22

Debt liabilities Note 30

estimates and judgement

• Assessment of impairment premises

• Assumptions of impairment tests

• Measurement to fair value

• Classification of loans in categories under IFRS 9

  Financial Instruments

• Estimate of expected credit losses of loans measured at amortised cost

• Measured to fair value of loans classified as measured at a fair value

• Assessment of the preferential nature of the loans granted

• Classification of loans as long-term or short-term

• Measurement to fair value

• Judgement on the applicability of the exemption from the requirements of IFRS 9 Financial Instruments for instruments entered into to hedge own needs

• Assessment of the preferential nature of the loan

• Measurement of the carrying amount of preferential borrowings and loans

• Classification of the liability as long-term or short-term

  financial statements in the year ended 31 December 2025

  • As a result of the impairment tests carried out as at the balance sheet date of shares, a partial reversal of impairment losses on shares in TAURON Ciepło Sp. z o.o. was carried out, which increased the Company's financial income by the amount of PLN 189 million.

Additionally, the Company applies significant estimates as regards the contingent liabilities recognised, in particular as regards litigation the Company is a party to (Note 40).

‌

Standards published and amendments to accounting standards which have not entered into force yet

The Company did not choose earlier application of any standards or amendments to standards, which were published but have not entered into force by 31 December 2025.

• Standards and amendments to standards issued by the International Accounting Standards Board which have been endorsed by the European Union but have not yet entered into force

  Standard

  Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Contracts Referencing Nature-dependent Electricity

  Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Amendments to the Classification and Measurement of Financial Instruments

  Date of entry into force in the EU (annual periods starting on or after that date)

  1 January 2026

  1 January 2026

  Amendments to various standards, Annual Improvements to IFRS (IFRS 1 First-time Adoption of International Financial Reporting Standards; IFRS 7 Financial Instruments: Disclosures; IFRS 9 Financial Instruments; IFRS 10 Consolidated Financial Statements; IAS 7 Statement of Cash Flows)

  1 January 2026

  IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027

  IFRS 18 Presentation and Disclosure in Financial Statements

  IFRS 18 Presentation and Disclosure in Financial Statements ("IFRS 18") will replace the current IAS 1 Presentation of Financial Statements. The main requirements introduced by IFRS 18 relate to:

  • change in the structure of the statement of comprehensive income. IFRS 18 requires the classification of items of income and expenses within the statement of comprehensive income into five categories, in particular the newly introduced operating, investing and financing categories. At the same time, IFRS 18 requires the mandatory presentation of new subtotals in the statement of comprehensive income, allowing the presentation of the result by category of activity, i.e. operating result, including income and expenses classified in operating activities, and result before financing and taxation, including operating result and income and expenses classified in investing activities;

  • making disclosures of management-defined performance measures (MPMs), defining an MPM as a sub-item constituting the difference between revenue and expenses that an entity uses in communications published outside the financial statements and used to communicate to users of the financial statements management's view of certain aspects of the entity's operations as a whole; and

  • principles of aggregation and disaggregation of information in the financial statements, in particular specifying that the aggregation of assets, liabilities income, expenses and cash flows to items should be based on common characteristics and disaggregation based on characteristics that are not common.

    The Company continues its work and analysis to assess the impact of IFRS 18 on its separate financial statements and the accounting policies applied by the Company. In particular, the work comprises the assignment of individual revenue and expense headings to categories of activity under IFRS 18, the development of a new format for the statement of comprehensive income and statement of cash flows tailored to the Company's specific circumstances, the development of a new format for the notes tailored to the requirements of IFRS 18, and the analysis of the information presented publicly by the Company with a view to identifying and defining MPM targets. Bearing in mind that the Company is the parent company of the TAURON Group, with significant capital exposure in the form of shares, stocks and loans granted to subsidiaries, the ongoing work includes analyses with a view to identifying, within the Company's operations, the so-called special core activity as defined in IFRS 18 in the form of investment in assets. For entities with the specific principal activity of investing in assets, IFRS 18 requires certain income (in particular dividends) and expenses to be classified in the operating category, which in entities without such activities would be recognised in the investing or financing category.

    On the basis of the work carried out to date, the Company identifies that some of the income and expenses classified prior to the effective date of IFRS 18 as income and expenses from financing activities may ultimately be classified as operating activities, in particular items related to interest and exchange rate differences arising from activities related to the sale of products and services.

    Amendments to other standards

    Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures concerning Contracts Referencing Nature-dependent Electricity clarify and simplify the use of the exemption from the fair value measurement for power purchase agreements dependent on natural factors ('"PPA"). In particular, it was clarified, that an entity is entitled to use the exemption from fair value measurement relating to contracts entered into for own use if the entity has been and expects to be a net purchaser of electricity over the term of the contract, i.e. if it buys enough electricity to offset any sales of unused energy. At the same time, the above-mentioned amendments extended the disclosure obligations to renewable energy agreements. Based on the analyses conducted to date, the Company, as a party to PPAs, assesses that the foregoing changes will not have a significant impact on the accounting principles applied to date with regard to the recognition of the effects of the concluded agreements and, at the same time, may translate into the need to make additional disclosures in the separate financial statements with regard to the aforementioned agreements.

    Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures - Amendments to the Classification and Measurement of Financial Instruments, in particular, clarify the recognition and derecognition dates for certain financial assets and liabilities, add guidance for assessing whether a financial asset meets the criteria for the SPPI test (Solely Payments of Principal and Interest), and expand and update disclosure obligations for instruments whose contractual terms may change cash flows and equity instruments measured at fair value through other comprehensive income. On the basis of the analyses carried out to date, the Company assesses that the above changes will not have a material impact on the accounting policies applied to date.

    Amendments to various standards Annual Improvements to IFRS are clarifying and explanatory in nature and will not have a material impact on the accounting policies applied so far.

• Standards and amendments to standards issued by the International Accounting Standards Board which have not been endorsed by the European Union and have not entered into force yet

Standard

Date of entry into force by standard, not approved by the EU (annual periods starting on or after that date)

IFRS 14 Regulatory Deferral Accounts 1 January 2016*

Amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture as amended

IFRS 19 Subsidiaries without Public Accountability: Disclosures and amendments to IFRS 19 Subsidiaries without Public Accountability: Disclosures

Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary Presentation Currency

the date of entry into force of the amendments has been postponed

1 January 2027

1 January 2027

* The European Commission decided to refrain from launching the process of endorsement of this interim standard for use in the territory of the EU until the publication of the final version of IFRS 14 Regulatory Deferral Accounts.

The dates of entry into force are the dates resulting from the content of the standards promulgated by the International Accounting Standards Board. The application dates of the standards in the European Union may differ from the application dates implied by the content of the standards and are announced at the time of the approval for application by the European Union.

IFRS 14 Regulatory Deferral Accounts

The International Accounting Standards Board is working on the standard aimed to determine a model for the accounting treatment of assets and liabilities associated with regulated activities. The new standard, if issued, will replace IFRS 14 Regulatory Deferral Accounts. According to the draft standard, the standard is intended to apply to entities that are party to a contract specifying regulated rates that the entity charges to its customers for goods and services provided, and when part of the total consideration for goods and services provided in a given period is charged to customers through regulated rates in another period (so-called time differences arise). As at the date of approval of these separate financial statements for publication, the final version of the standard has not been issued. The International Accounting Standards Board plans to publish the new IFRS 14 Regulatory Deferral Accounts in the second quarter of 2026. The Company assesses that the entry into force of the regulated activities standard, as the Company has no such activities, will have no impact on the Company's separate financial statements.

Other standards and amendments to standards

IFRS 19 Subsidiaries without Public Accountability: Disclosures applies to group subsidiaries that do not have public accountability and have a parent company that prepares consolidated financial statements available for public use that comply with IFRS. IFRS 19 Subsidiaries without Public Accountability: Disclosures provides such entities with the opportunity to reduce the disclosure requirements of IFRS. Based on the analyses of IFRS 19 Subsidiaries without Public Accountability: Disclosures has no impact on the separate financial statements of the Company which, due to its status as a public company, will not apply this standard.

The amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary Presentation Currency clarify the criteria for assessing when a currency is no longer considered to be convertible due to the level of inflation and specify the presentation and disclosures in the event of non-convertibility. Based on the analyses performed to date, the Company assesses that the amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Translation to a Hyperinflationary Presentation Currency will have no impact on the Company's separate financial statements.

Due to the deferral of the effective date of the amendments to IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures , the Company will assess the impact of the final amendments to the above standards on the Company's accounting policies once the effective date of the amendments has been determined.

‌Changes in accounting policies applied and presentation as well as restatement of comparable data

Changes in the applied accounting principles and presentation

The accounting principles (policy) adopted for the preparation of these separate financial statements are consistent with those used for the preparation of the annual separate financial statements of TAURON Polska Energia S.A. for the year ended 31 December 2024, except for the amendments to the accounting policy described below regarding hedging instruments subject to hedge accounting. Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability, which entered into force on 1 January 2025, did not affect the Company's accounting policy. In addition, the Company changed the method of presenting the result on derivative instruments in the separate statement of comprehensive income, described below.

Change in the accounting policy in the scope of hedging instruments subject to hedge accounting

On 1 October 2025, the Company changed its accounting policy regarding the recognition of hedging instruments covered by hedge accounting. Until the amendment date, i.e. in the comparable period and in the 9-month period ended 30 September 2025, the Company continued to apply the accounting for hedging instruments covered by hedge accounting in accordance with IAS 39 Financial Instruments: Recognition and Measurement. From 1 October 2025, upon the commencement of hedge accounting for FX forward transactions hedging currency risk for EUR purchases of CO2 emission allowances, the Company applies the accounting rules for hedging instruments subject to hedge accounting in accordance with IFRS 9 Financial Instruments. The change in the accounting policy to the above extent is a prospective change and does not require a restatement of comparable data.

Change in the method of presenting the result on derivative instruments in the separate statement of comprehensive income

Starting from the interim condensed separate financial statements for the six-month period ended 30 June 2025, the Company decided to change the presentation of the result on derivative instruments in the separate statement of comprehensive income. Before the change, the Company presented the result on derivative instruments under the item Other financial income and costs. After the change, the Company presents the result on derivative instruments in the separate statement of comprehensive income as a separate item. In the Company's opinion, the changed presentation allows for a more clear presentation of the level and characteristics of the financial revenues and costs generated by the Company in the separate statement of comprehensive income.

31 December 2024 of gain/(loss) on

(approved figures) derivative instruments

31 December 2024

(restated figures)

Year ended

Change of presentation

Year ended

‌Climate change and its impact on the financial statements and the accounting principles applied

Risks and opportunities associated with climate change and the energy transition process

Progressing climate changes, the continuing energy transition process and the resulting changes in the business and regulatory environment have a significant impact on the operations of TAURON Polska Energia S.A. and TAURON Group. TAURON Group is one of the largest energy companies in Poland. Recognising the bidirectional impact, i.e. the impact of the Group's activities on the environment, climate change and the surrounding area, and the impact of climate change and the surrounding area on the Group's activities, managing the risks and opportunities associated with this impact is an important element of strategic management, with sustainable development goals forming an integral part of the Group's strategy.

The Company identifies the following risks related to climate change:

• physical risks resulting from the physical effects of climate change, in particular in the form of extreme weather events;

• risks related to the energy transition, including in particular regulatory and legal, technological, market, image, social and financing risks.

TAURON Group operates in a sector significantly affected by the regulatory environment. In particular, activities aimed at combating climate change translate into a changing legal environment of the Group, including EU and national legislation gradually increasing environmental protection requirements imposed on enterprises and introducing limitations for fossil fuels. The above changes translate into an increase in operating costs, particularly in the area of electricity and heat generation from conventional sources.

The transition to a low-carbon and climate-resilient economy requires significant investment. The transition to new technologies and the replacement of existing products and services with lower-emission alternatives will require significant investment.

Climate change issues also have an increasing impact on the ability of entities to raise funding for their activities and the types of funding offered by financial institutions as well as their terms and conditions linked to energy transition goals, or the availability of support, among others, in the form of grants or preferential loans. Climate issues also affect the ability to attract new customers and investors. Customer attitudes and expectations are changing, which is reflected in the products and services offered by the Company and the Group, in particular by offering products from renewable or zero-carbon generation sources.

The occurrence of extreme weather events such as hydrological droughts, heat waves, floods and hurricanes has a negative impact on the ability to generate revenue and economic benefits from the Group's assets, particularly in the Distribution and Renewable Energy Sources segment.

However, the ongoing energy transition process also provides new opportunities, including the development of new products oriented to changing customer demand, new technologies contribute to cost efficiency, investment in Group assets increases resilience to weather events, preventing potential losses in the event of their occurrence. The above changes should consequently have a positive impact on the image of the Group and the electricity sector as a whole.

The issues identified above may affect the balance sheet valuation of the Company's shareholdings and loans to subsidiaries. TAURON Polska Energia S.A., as the parent company of TAURON Group, holding shares in subsidiaries in the electricity sector, including companies engaged in the generation of electricity from conventional sources, and providing financing to these companies, is exposed to risks and is a beneficiary of emerging opportunities related to changes in the Company's environment as a consequence of climate change and the efforts made to counteract these changes.

Implementation of the TAURON Group's Strategy in the context of climate issues

In 2024, the Strategy of TAURON Group for 2025-2035 was adopted by the Company Management Board. The strategy responds to the challenges resulting from the current and projected situation in the market and the electricity sector, in particular related to the transformation of the power industry and new solutions supporting this transformation. The Group's strategy aims to counteract the risks, but also to take advantage of the opportunities associated with climate change. The Group's business priorities identified in the Strategy mainly address the challenges of the Group's transformation aimed to address climate change and include, in particular: profitable capacity growth in RES and energy storage, decarbonisation and increasing heat efficiency as well as a fair transition of conventional power generation. As part of the above priorities, the Group plans to increase its installed RES capacity and energy storage to 3.4 GW in 2030 and 6.1 GW in 2035. At the same time, the Group plans to move away from the use of coal for heat generation and to decommission coal-fired units by 2030 (with the exception of the 910 MW unit in Jaworzno) in order to achieve climate neutrality in 2040.

Impact of climate issues on the financial statements of TAURON Polska Energia S.A., including values based on professional judgement and estimates recognised in the financial statements

The climate issues affect the estimates and assumptions adopted in the Company's estimation process and the professional judgement of the management, consequently translating into the figures reported in these separate financial statements. The climate issues represent an integral component of the models used in the estimation process and the assumptions made about the future. Most significantly, climate issues translate into the area of valuation of the Company's exposure to subsidiaries, through the estimates and judgements adopted as part of the impairment tests carried out on financial assets.

The Company believes that climate issues had the most significant impact on the separate financial statements for the year ended 31 December 2025 in the following scope.

Issue Description of impact

Assumptions adopted in the tests, including the impact of regulatory issues

The Company took into account, as part of the assumptions underlying the estimation of future cash flows in the impairment tests performed, current as well as planned regulatory changes aimed at achieving the climate targets set by the European Union, including in particular the updated draft of the National Energy and Climate Plan (NECP) published in 2025 until 2030 with a perspective until 2040, assuming the base scenario adopted for the calculation of price paths (WEM "with existing measures" - with current activities) reduction of greenhouse gas emissions from the energy sector at the level of approximately 43% in 2030 and 61% in 2040 compared to 1990.

In addition, the assumptions take into account the long-term directions of climate policy, including the EU target of reducing net greenhouse gas emissions by 90% by 2040, the "REPowerEU" package, the reform of the EU ETS allowance trading market and the reform of the market stability reserve included in the "FIT for 55" package, Directive (EU) 2023/2413 of the European Parliament and of the Council on the promotion of energy from renewable sources, assuming a gradual increase in the share of renewable energy in the European Union in the heating and cooling sector by 2030 and Directive (EU) 2023/1791 of the European Parliament and of the Council on energy efficiency, obliging Member States to achieve certain levels of savings in energy consumption by 2030.

The effect, among others, the regulatory changes described are the ongoing transformation of the energy mix in Poland. It includes, in particular, a dynamic increase in the share of renewable energy sources and - playing an important balancing role - natural gas-fired generating units. Further increase in gas capacity, secured, among others, the results of last year's capacity market auctions, combined with the simultaneous withdrawal and decline in production from conventional coal sources, is a key factor shaping market energy prices. The changes in regulations aimed at climate protection and the resulting changes in the structure of electricity generation, included in the test assumptions, translated in particular into the levels of electricity prices, CO2 emission allowances and fuels estimated by the Company, as well as on the assumptions made regarding the volumes and structure of energy production by the Group's generating units in the long term, affecting the level of the recoverable value of its exposure to TAURON Wytwarzanie S.A., TAURON Ciepło Sp. z o.o. TAURON Ekoenergia Sp. z o.o. and TAURON Zielona Energia Sp. z o.o.

Impact of climate protection and climate change issues on the impairment tests performed on shares and the measurement of loans granted

Note 11

Verification of periods of economic usefulness taking into account the TAURON Group Strategy

The assumptions regarding the economic useful lives of assets adopted as of 31 December 2025 are in line with the assumptions included in the TAURON Group Strategy regarding the departure from energy generation from conventional sources and the Group's achievement of full climate neutrality by 2040. It was assumed that the coal-fired generating units would operate no longer than until 2030, with the exception of the 910 MW unit in Jaworzno, which was assumed to operate until 2040.

The planned economic useful lives of generating units in the Generation segment have been updated in relation to the assumptions adopted in the impairment tests prepared as at 31 December 2024. At the Jaworzno II Power Plant, the operation of unit 1 (Biomass) was shortened by three years until 2025, and the operation of unit 2 and 3 was extended by one and three years, respectively, until June 2028. In the case of 200MW class units, the analysis was carried out taking into account the operating horizon of the Derogation Capacity Market (until 2028), assuming support at a level guaranteeing further, economically justified operation. In the remaining power plants, the operating periods have not changed.

For all generating plants in the Heat segment, the operating period is assumed to be until 2054, with the assumption that the operation of units using coal fuel will end by 2029.

In the RES segment, as at 31 December 2025, the operating period for generating units was assumed to be:

• CGU Hydroelectric power plants - the useful life has been extended until 2080 compared to tests as at 31 December 2024;

• CGU Wind and photovoltaic power plants until 2057.

In the RES segment, existing support systems were taken into account (the certificate of origin system, the auction system, the FIT/FIP feed-in tariff system, the guarantee of origin system), of which the certificate of origin system is the most important.

The economic useful lives of the Group's assets, as one of the assumptions adopted in impairment tests, affect the level of the recoverable amount of exposure to subsidiaries.

Decarbonisation of the heat industry

Moreover, there was a significant impact on the impairment tests carried out as at the balance sheet date regarding the Company's exposure in TAURON Ciepło Sp. z o. o. the process of decarbonization and transformation of the heating sector in the Group had started in accordance with the strategy. Assumptions regarding decarbonisation influenced the inclusion in the forecasts of a gradual change in the fuel used by operating generating units from coal to gas or biomass and the adoption of the assumption of complete replacement of coal assets with low-emission assets by 2030 at the latest. At the same time, the projections assume a cogeneration bonus (in accordance with the Act of 14 December 2018 on the promotion of electricity from high-efficiency cogeneration), which is a subsidy to the electricity produced, fed into the network and sold from high-efficiency cogeneration for producers planning to operate new or significantly modernized installations.

Impairment tests for shares in subsidiaries conducted as at 31 December 2025 indicated the reversal of the write-down of shares in TAURON Ciepło Sp. z o.o. in the amount of PLN 189 million. The reversal of write-offs results primarily from a significant reduction in the discount rate, a higher heat transfer tariff, and the inclusion in the forecasts of flows from the operation of cogeneration engines and the gas boiler room at the heating plant in Zawiercie as part of the initiated energy transformation process.

The assumptions in the scope of impairment testing, including those relating to climate issues and the results of the tests performed, are described in detail in Note 11 of these separate financial statements.

Wind and photovoltaic farms

The TAURON Group's subsidiaries implement investment projects aimed at increasing the capacity generated from Renewable Energy Sources. In the year ended 31 December 2025, the following photovoltaic farms were commissioned by the Group companies:

• Bałków with a capacity of 54 MW (as part of TAURON Zielona Energia Sp. z o.o.),

• Postomino with a capacity of 90 MW (as part of AE Energy 7 Sp. z o.o.).

  Moreover, in the year ended 31 December 2025, companies of the Group implemented the construction of the following wind farms:

• Nowa Brzeźnica with a capacity of 19.6 MW (as part of Wind T4 sp. z o.o.),

• Sieradz with a capacity of 23.8 MW (as part of Wind T2 Sp. z o.o.),

• Miejska Górka with a capacity of 190 MW (as part of Finadvice Polska 1 Sp. z o.o.).

Implementation of investment in the RES Area and change in the mix of generation sources

Notes 2 and 21.1

By the date of approval for publication of these separate financial statements, the Nowa Brzeźnica and Sieradz wind farms had been put into operation. The planned commissioning of the Miejska Górka wind farm is scheduled for 2027. After the balance sheet date, a decision was made to implement the Ogrodzieniec Hybrid Installation with a capacity of 85 MW (including the construction of the Ogrodzieniec photovoltaic farm with a capacity of 85 MW and the construction of an energy storage facility with a capacity of 55 MW) and the Mysłowice photovoltaic farm with a capacity of 55 MW.

Additionally, TAURON Group companies are also developing a portfolio of their own projects.

Energy storage

TAURON Group companies are also developing energy storage projects. In the year ended 31 December 2025, TAURON BME4 Sp. z o.o., TAURON BME9 Sp. z o.o. and FF Park PV1 Sp. z o.o. implemented projects related to the construction of energy storage facilities with a total capacity of 24.4 MW. Projects implemented by TAURON BME4 Sp. z o.o. by the date of approval for publication of these separate financial statements have been put into operation, the remaining ones are also scheduled for commissioning in 2026.

By the date of approval for publication of these separate financial statements, further BME projects of the Group companies with a total capacity of approx. 542 MW had reached the implementation stage. Additionally, a portfolio of own projects is also being developed

Rożnów II Pumped Storage Power Plant

As part of the company TAURON Elektrownia Szczytowo-Pompowa Sp. z o.o. the planning stage for the construction of a pumped-storage power plant, which is to serve as a large-scale energy storage facility in the vicinity of the Rożnów Hydroelectric Power Plant, is continued. The power plant is to achieve a power of approximately 700 MW and an energy capacity of 3 GWh.

Company's share as a parent company in financing investments

The investment projects described above are, in principle, carried out by subsidiaries of TAURON Polska Energia S.A., which provides them with financing in the form of loans for the implementation of these investments as the parent company. In the year ended 31 December 2025, the Company granted loans with a total nominal value of PLN 1 093 million to companies in the Renewable Energy Sources segment for investment projects involving the construction of wind and photovoltaic farms. At the same time, companies of the Group also benefit from available sources of national and EU funding.

Investment projects to mitigate the negative impact of the Group's activities on climate are, in principle, implemented in the subsidiaries, but due to the centralised financial management policy, the Company is the main entity raising external funds for the Group, including for the purposes of achieving sustainability goals, excluding dedicated instruments such as project financing or environmental funds, which are raised directly by TAURON Group companies. The funds acquired by the Company are subsequently transferred to the companies essentially through intra-group loans.

National Recovery and Resilience Plan

In 2024 and 2025, the Company concluded the following loan agreements with Bank Gospodarstwa Krajowego with funds from the National Recovery and Resilience Plan, which are then transferred through intra-group loans to subsidiaries implementing investment projects:

Funding for the purpose of investment aimed at

Year of concluding the

Objective Group Company Contractual amount

Amount of funding

disbursed as at 31 December 2025

mitigating the negative

impact of the Group's

agreement

development and adaptation of

activities on climate

Note 30

2024

the electricity grid to the needs of energy transition and climate change

TAURON

Dystrybucja S.A.

15 867 1 428

2025 advanced digital transformation TAURON

310 231

2025

2025 construction of two photovoltaic

farms

Dystrybucja S.A.

TAURON Zielona Energia Sp. z o.o.

110 -

269 -

`

The Group's "green" product offering

Remuneration of key management personnel

Note 43.2

Sustainability indicators in financing agreements

The Company raises finance with the aim of investing funds to mitigate the negative impact of the TAURON Group's activities on climate. In accordance with the terms of some of the agreements, the Company allocates the funds raised for the implementation of investment in the area of distribution and renewable energy sources and reports to the banks on the level of certain sustainability indicators, i.e. the rate of increase in the capacity of RES or the rate of decarbonisation. The accuracy of the calculation of the sustainability indicators is confirmed by the relevant reports of an independent auditor and reported to the financial institutions. In addition, some of the financing agreements contain restrictions on the use of funds from these agreements to finance coal-fired generation activities. The Company carries out its activities in accordance with environmental, climate and social policies.

In the opinion of the Company, the Company's sustainability-linked financing, in respect of which failure to meet the level of sustainability indicators (emission reduction rate, RES capacity increase rate) may affect the margin level in financing agreements, does not contain embedded derivatives.

TAURON Group offers electricity to individual and business customers, consistently implementing a strategy focused on green transformation. The key product in the sale of electricity is the New Energy offer, which offers the sale of energy from 100% renewable sources. The Group's customers can use ecological energy under long-term contracts (5 years for business customers as well as 6 and 9 years for individual customers). The Group is also developing PPAs (Power Purchase Agreements) - long-term supply contracts for business customers based on renewable energy sources, which help stabilize costs and achieve the sustainable development goals of recipients. Other green products are also offered, such as Eco, allowing the purchase of electricity from renewable energy sources, which is confirmed by certificates issued by independent entities. The Group also offers modern tariff solutions, including dynamic tariffs and products related to energy exchange quotations, which support customers in optimizing energy consumption and costs.

Sales to end customers within the above products are performed by the subsidiaries, TAURON Sprzedaż Sp. z

o.o. and TAURON Sprzedaż GZE Sp. z o.o. TAURON Polska Energia S.A. buys and sells electricity to secure the sales needs of these entities.

Linking remuneration to sustainable development goals

The remuneration system for Members of the Company's Management Board is related to sustainable development issues. The current Remuneration Policy for Members of the Management Board and the Supervisory Board includes, among others, the primary objectives: linking remuneration principles with monitoring the implementation of adopted strategic plans and business goals, in particular related to the implementation of sustainable development goals, and contributing to the implementation of sustainable development goals, including limiting the negative impact on the natural environment and ensuring the stable development of the Company. Results related to sustainable development are included in the remuneration system for Members of the Company's Management Board in the variable part. Variable Remuneration depends on the achievement of conditional goals, financial goals and on the implementation of non-financial goals that are directly related to ESG goals.

The non-financial targets set for the Management Board of the Company to be achieved in 2025 related to or supporting sustainability issues accounted for a total of 50% of the variable part and included specific nonfinancial targets:

• maintaining the Company's investment-grade rating, at least BBB minus

• development and optimal modernisation of the distribution network;

• TAURON Group's digital transformation;

• implementation of commenced investment in the construction of wind farms and photovoltaic farms;

• decarbonisation of District Heating - replacing coal-fired sources with modern low-carbon units;

• aiming for 100% zero-carbon energy in the volume of sales to end customers and implementing a new model for the allocation of RES energy to meet the Sales Area demand.

The remuneration of members of the Company's Supervisory Board is fixed and it is not dependent on sustainability issues.

The rules concerning remuneration of key managers and other employees of the Company are defined in the Regulations on Remuneration of Employees of TAURON Polska Energia S.A., adopted for application by the Management Board of the Company. The bonus system ensures that the activities of key managers are integrated around the achievement of goals aimed at achieving the Strategy that incorporates sustainable development goals as its integral part.

Detailed information in this regard is provided in the Management Board's Report on Activities of TAURON Polska Energia S.A. and TAURON Group for 2025 in Chapter 13 of the Sustainability Report of TAURON Group, (GOV-3) Inclusion of ESG-related results in the incentive scheme.

‌

Information on operating segments

The activity of the Company is mostly carried out on the territory of Poland. Revenues on sales from foreign entities in the years ended 31 December 2025 and 31 December 2024 are presented in the table below.

Year ended

31 December 2025

Year ended

31 December 2024

Poland 18 626 22 816

Total 18 795 22 849

Czech Republic 169 33

‌IMPAIRMENT IN VALUE OF FINANCIAL ASSETS

‌

Impairment in value of financial assets

As at 31 December 2025, an analysis of the premises which might indicate the impairment of shares in subsidiaries and joint ventures was carried out, as well as an analysis of the valuation of intra-group loans. As a result of the analysis, the following market events were identified that may affect the changes in the assumptions made in the impairment tests performed as at 31 December 2024, and thus may affect the impairment assessment:

• publication by the Ministry of Climate and Environment in December 2025 of a new draft of the National Energy and Climate Plan (NECP) until 2030 with a perspective until 2040, assuming deep electrification of the economy;

• progressing changes in the energy mix in Poland, primarily due to further increase in the share of RES in the generation subsector and an increase in installed capacity in natural gas-fired power plants translating into:

  − an increase in electricity generation by other renewable energy sources (professional hydroelectric power plants, other hydroelectric power plants and other renewable energy sources including photovoltaic) by 6.6% in 2025 compared to 2024 year;

  − an increase in the number of negative hours in the day-ahead market;

  − further increase in electricity production in gas-fired power plants by 13.9% in 2025 compared to 2024 resulting in the displacement of conventional coal-fired sources;

  − the average electricity price on the SPOT market (average of fixing I, fixing II and continuous quotations) increased from PLN 415.46/MWh in 2024 to PLN 441.94/MWh in 2025 (+6.4%);

  − a decrease in the volume-weighted average electricity price for the BASE futures contract (Y+1) from PLN 449.80/MWh in 2024 to PLN 430.51/MWh in 2025 (-4.3%);

• effective changes in the balancing market, where PSE S.A. joined the PICASSO platform as of 11 July 2025, which increased price volatility in the balancing market and the SPOT market;

• a decrease in the average coal price in the ARA ports from USD 114.65/Mg in 2024 to USD 105.40/Mg in 2025 (-8.1%);

• a decrease in the volume-weighted average gas price for the BASE (Y+1) forward contract from PLN 180.44/MWh in 2024 to PLN 165.03/MWh in 2025 (-8.5%), caused mainly by the predicted increase in LNG imports to Europe;

• regulatory changes in the scope of the green certificate redemption obligation set at a level of 9% for 2026-2028.

  As a result of the above changes, an adjustment in the forecasts occurred in relation to the assumptions in the impairment tests carried out as at 31 December 2024:

• a decline in forecast average BASE electricity prices in the period 2026-2045 relative to the assumptions adopted in the impairment tests at 31 December 2024;

• an increase in the projected CO2 prices in the period 2026-2045 for contracts on the EU ETS market compared to the assumptions adopted in the impairment tests as at 31 December 2024;

• maintaining the assumptions for average hard coal prices in deliveries in the period 2026-2045 at the same levels as in the impairment tests as at 31 December 2024;

• a decline in forecast average BASE gas prices in the period 2026-2045 relative to the assumptions adopted in the impairment tests at 31 December 2024.

  The revision of the above forecasts and the update of forecast energy price levels has translated into a decrease in the forecast modelled BASE margins for 2026-2045 for the 1000 MW class unit and the 200 MW class units.

  The prerequisites of impairment identified above demonstrated the need to carry out impairment tests for shares in the following companies: TAURON Ciepło Sp. z o.o., TAURON Ekoenergia Sp. z o.o. and TAURON Zielona Energia Sp. z o.o.

  The impairment indicators identified do not apply to other shares in subsidiaries and joint ventures.

  The shares in TAURON Wytwarzanie S.A. were written down to zero in previous reporting years and no indication of a reversal of the write-down is identified.

  Moreover, due to the lack of agreement on the effectiveness of the submission of declarations concerning the acceptance of offers to purchase shares in TAMEH HOLDING Sp. z o.o. and the ongoing arbitration proceedings in this matter, which is described in more detail in Note 40 of these separate financial statements, it was decided to verify the recoverable amount of the investment in shares in TAMEH HOLDING Sp. z o.o. as at 31 December 2025.

  The Shareholders' Agreement provides for the implementation of the business plan of the purpose vehicle TAMEH HOLDING Sp. z o.o. for a period of 15 years, i.e. until 2029. In accordance with the provisions of the agreement, TAMEH HOLDING Sp. z o.o. pays dividends to the shareholders on the basis of a dividend plan approved by the parties to the agreement.

  With regard to the impairment test of the shares in TAMEH HOLDING Sp. z o.o., a scenario analysis was carried out based on expected future dividend flows, which did not include the flows from TAMEH Czech s.r.o. due to the declaration of bankruptcy of the company by the Ostrava District Court. The following scenarios take into account the capacity of TAMEH HOLDING Sp. z o.o. to pay dividends. The analysis assumed the following scenarios built on the Company's best knowledge:

• a shareholders' approved dividend plan in the scope of activity of TAMEH POLSKA Sp. z o.o. for 2024-2029 and divestment of assets in 2030;

• adjusted dividend plan resulting from the gradual reduction of expenditure and operations of TAMEH POLSKA Sp. z

  o.o. leading to the liquidation of assets in 2030;

• shareholders' approved dividend plan in the scope of TAMEH POLSKA Sp. z o.o. activity in 2024-2029 and the

continuation of the company's activities thereafter.

All of the above-mentioned three scenarios, in the Company's judgement as at the day of approving these separate financial statements for publication, have the same probability of materialisation and thus the weighting assigned to them is equal to each other.

The recoverable amount of shares in subsidiaries and joint ventures is the value in use. The tests were carried out based on the current value of the estimated cash flows of the generating companies' operations on the basis of detailed projections covering the entire life of the companies. The use of forecasts longer than 5 years results from the fact that, over a longer period of detailed forecast, the Company is able to reflect as accurately as possible the life cycle of assets, particularly manufacturing assets, and take into account long-term cash flow estimates. The macroeconomic and sector-

oriented assumptions underlying the projections are updated as frequently as any indications for their modification are observed on the market. The projections also take into account changes in the regulatory environment known as at the date of the test.

Shares and intra-group loans account for approximately 91% of the balance sheet total as at the balance sheet day.

Key assumptions adopted in tests performed as at 31 December 2025

The assumptions for the capacity balance and the level of electricity demand and the price assumptions in terms of projected prices for electricity, CO2 emission allowances, coal, natural gas have been made on the basis of the best market knowledge and take into account current market conditions.

Category Description

For 2026, the forecast assumes maintaining coal prices at a level of the average PSCMI1 index price calculated for 2025. It results from the stable demand-supply situation in global coal markets, particularly at ARA ports. An

Coal

Electricity

CO2

Natural gas

Capacity market

average decline in coal prices by 2.0% was assumed in the years 2026-2045. For this period, an assumption was made about declining demand, due to decreasing electricity generation from conventional sources and the need to take into account global trends in domestic coal price paths.

The BASE electricity price forecast assumes an increase of 1.7% for 2026 compared to the average volume-weighted price of the reference BASE contract (Y+1) achieved in 2025. In the period 2026-2045, the average price of BASE will decrease at an average annual rate of 0.7%. The projected BASE price levels take into account the costs of generation from high-efficiency conventional sources, while the price decline is mainly affected by the change in the generation mix and the systematic increase in the share of RES sources in the energy mix.

The growth path for prices of CO2 emission allowances has been adopted in the entire forecast horizon. In the first three years, the forecast takes into account current market levels and price growth expectations in line with cyclical surveys of leading think tanks in the scope of their CO2 price forecasts. The forecast for 2026 assumes a 7% increase in the price of CO2 emission allowances compared to the average reference contract prices obtained in 2025.

In the period of 2026-2045, CO2 prices will increase by an average of 3.7% per year due to the maintenance of plans to meet ambitious climate goals of the European Union. CO2 emission limits for heat generation have been adopted in line with the regulation of the Council of Ministers and adjusted by the level of free allowances.

Due to the observed increase in LNG supply, the forecast assumes a 4.9% decline in prices in 2026 compared to the volume-weighted average price of the BASE (Y+1) reference contract obtained in 2025. An average annual decrease in gas prices of 1.0% has also been assumed for 2026-2045. Predicted gas prices in Europe will be mostly affected by filling the demand gap through stable gas flows from the Norwegian Continental Shelf and LNG supplies. Poland will import gas through the Baltic Pipe and two LNG terminals (the FSRU terminal in Gdańsk is scheduled for commissioning in the 2027/2028 timeframe), resulting in a high correlation of gas prices in Poland with the European indices.

It is assumed that payments for capacity will be maintained until 2028 for existing coal-fired units which do not meet the EPS 550 criterion (for which the unit emission performance exceeds 550 kg/MWh). For units which concluded long-term contracts by 31 December 2019 and do not meet the EPS 550 criterion, maintaining of payments until the end of the contract effectiveness period has been assumed.

In line with the agreement reached by the European Council of 17 October 2023 regarding the reform of the energy market model, it was assumed that a derogation would be introduced regarding the validity of CO2 emission limits for units seeking support from the Capacity Market and consequently that the period of possible support for such units would be extended from June 2025 to the end of 2028. The projections assume revenues from the Capacity Market after 2025 as a consequence of extension of the support until the end of 2028. Revenues from this source relate to four 200 MW class units at the Łaziska Branch and two units at the Siersza Branch, as well as a unit at the Łagisza Branch in 2026-2028. In addition, revenues from the Capacity Market for units 2 and 3 at the Jaworzno II Branch are estimated for 2026-2028. Moreover, four 200 MW class units in the Jaworzno III Branch, for which no capacity contract was assumed, were assigned to the role of reserve units, which involves generating revenue for these blocks for reservations, the amount of which depends on the availability of the company's other units. The assumed average price over the extended period of 2027-2028 amounts to PLN 340.83/kW/year. For 2026, the capacity contracts were concluded in December 2025 at a price of PLN 346.37/kW/year and are included in line with reality in the assumptions made for that year.

For the extended operating period, it was assumed that the operation of the units would be determined by demand in the KSE (National Power System).

Economic lifetime of generating units

Regulatory system services

Certificates of energy origin

RES support

Support for cogeneration

The projected economic lives of the generation units in the Generation segment have been updated from the assumptions used in the impairment tests prepared as at 31 December 2024. In the Jaworzno II Power Plant, the operation of unit 1 (Biomass) was reduced by three years and the operation of units 2 and 3 was extended by one and three years, respectively. The update results from the current assessment of market, regulatory and technical conditions, as well as the planning assumptions made regarding the potential use of the assets. The assumptions made do not constitute a formal decision to permanently decommission the unit, nor do they exclude a possibility of future use of the assets. At the same time, in the case of units of the 200MW class (Jaworzno Power Plant, Łaziska Power Plant, Siersza Power Plant), the analysis was carried out taking into account the horizon of operation of the Derogation Capacity Market (until 2028), with the assumption of obtaining support at a level ensuring further economically justified operation. In the remaining power plants, the operating periods have not changed.

A list of the assumptions in the scope of the economic lives adopted for tests for the following generation units is presented below:

− Nowe Jaworzno Power Plant - unit 7 by 2040;

− Łagisza Power Plant - unit 10 by 2030;

− Jaworzno II Power Plant - unit 1 (Biomass) by 2025, unit 2 and 3 by June 2028;

− Jaworzno III Power Plant (units 1, 2, 3, 4, 5 and 6); Łaziska Power Plant (units 9, 10, 11 and 12); Siersza Power Plant (units 1 and 2) with an outlook until 2028, assuming that support from the Derogation Capacity Market is obtained at a level guaranteeing continued economically justified operation.

The revision of the assumptions regarding the period of operation of the units at Jaworzno II Power Plant is due in particular to the anticipated role of these assets in ensuring the supply of heat to SCE Jaworzno III Sp. z o.o. and process steam for the 910 MW unit at Jaworzno. In line with current planning assumptions, it was assumed that two units would continue to operate until a new dedicated source is in place. At the date of preparation of the financial statements, it is assumed that this source will be launched after the heating season in 2028.

As at 31 December 2025, the operating period has been assumed for the generating units in the RES segment:

− Hydroelectric power plants: due to the postponement of the commencement of operation of the Small Hydroelectric Power Plant in Rożnów, the useful life has been extended to 2080 in relation to the tests as at 31 December 2024;

− Wind and photovoltaic power plants until 2057 (the change compared to the tests as at 31 December 2024 results from the postponement of commissioning the entire FW Miejska Górka investment).

For all generating plants in the Heat segment, a period of operation until 2054 has been assumed, with operation of the units on coal fuel ending:

− in ZW Katowice, ZW Tychy, ZW Bielsko-Biała EC1, ECI Generation and ZW Local Heat Plant Area until

2029;

− in ZW Bielsko-Biała EC2 until 2026.

Polskie Sieci Elektroenergetyczne S.A. purchase balancing capacity separately to increase and decrease the capacity in the system. There are two modes of acquiring balancing capacity:

1. Basic (non-mandatory) mode - auction for balancing capacity on a daily basis in advance, participation by bidding for balancing capacity in aggregate form;

2. Supplementary mode (mandatory) - bidding for balancing capacity for each generating unit on day d-1; purchase of balancing capacity by PSE on day d as a supplement to the basic mode.

The Balancing Capacity volume was calculated based on the regulatory capacity of the generating units, assigned by the Transmission System Operator, taking into account their planned operating time (Balancing Capacity can only be provided by units in operation).

The price adopted for the calculation is derived from the price paths adopted in the Group.

The price path for certificates of energy origin and the obligatory redemption in the subsequent years have been adopted based on the provisions of the RES Act and the system balance forecast. Taking into account the percentage obligations contained in the RES regulations and the current quotation of certificates of origin, the forecast assumes an 8.3% increase in the price of green certificates in 2026 compared to 2025. In the period of 2026-2030, the forecast of green certificate prices is upward (by 11.4% per year, on average) due to the reduction in supply and the assumption of an increase in the obligation to consume systemic surplus of property rights. For blue certificates, a slight price increase of 0.2% was assumed for 2026 relative to the TGEozebio average volume-weighted index price created in 2025. Over the period 2026-2030, the price of blue certificates is forecast to decline by an average of 2.5% per year. The price of white certificates assumes a price increase by 2.4% in 2026 compared to the volume-weighted average price achieved in 2025. Over the period 2026-2030, the price of white certificates is forecast to grow at an average annual rate of 2.4%.

With regard to the RES Area, existing support systems (certificate of origin scheme, auction scheme, FIT/FIP feed-in tariff system, guarantee of origin scheme) are taken into account, of which the certificate of origin scheme is the most significant. Within this scheme, limited support periods for green energy have been taken into account in accordance with the assumptions of the Act on RES defining mechanisms of granting the support for electricity generated in sources of this type. The support period has been limited to 15 years from the date of the first injection of electricity eligible to receive the energy origin certificate to the grid.

The projections assume a cogeneration bonus (in accordance with the Act of 14 December 2018 on the promotion of electricity from high-efficiency cogeneration), which is a surcharge on the electricity generated, fed into the grid and sold from high-efficiency cogeneration, for generators planning to operate new or significantly modernised installations.

For ZW Bielsko-Biała EC2, support was assumed in accordance with the decision of the President of the Energy

Regulatory Office of 3 January 2024, on winning the auction for the co-generation bonus.

For the remaining generation units producing heat and electricity in co-generation, it was assumed that support would be obtained in future periods at a level not exceeding the prices currently obtained in the auctions won.

Wages An increase in wages was assumed, based on an increase in the minimum wage and the assumed inflation rate with effect for the following years of the financial forecast.

WACC

The weighted average cost of capital (WACC) during the projection period for individual CGUs has been adopted in the range of 6.55%-8.68% in nominal terms after tax, taking into account the risk-free rate corresponding to the six-month yield on IRS 10Y (at a level of 4.48%) and the risk premium for operations relevant for the power industry (5%). The growth rate used for extrapolation of projected cash flows going beyond the detailed planning period has been adopted at a level of 2.5% and corresponds to the estimated long-term inflation rate.

Results of impairment tests

The result of the impairment tests on shares in subsidiaries and joint ventures carried out as at 31 December 2025, in accordance with IAS 36 Impairment of Assets, indicated a reversal of the impairment loss on the shares in TAURON Ciepło Sp. z o.o.

Company

The recoverable amount of the exposure

(shares and loans) As at

31 December 2025

The amount of the recognized reversal of the write-down on shares

Year ended

31 December 2025

TAURON Ciepło Sp. z o.o. 2 420 189

Total 189

The level of WACC (weighted average cost of capital in nominal after-tax terms) adopted in the impairment tests of the shares as at 31 December 2025 in TAURON Ciepło Sp. z o.o. for the heat generation area was 8.68% and for the heat transmission area 6.75%.

The reversal of impairment losses on the shares held in TAURON Ciepło Sp. z o.o. is mainly due to a significant reduction in the level of the discount rate, a higher heat transmission tariff obtained (and thus higher projected rates), the inclusion in the projections of flows from the operation of cogeneration engines and the gas-fired boiler plant at the Zawiercie heat plant as part of the energy transformation process that has been initiated.

The impairment tests carried out as at 31 December 2025 on the shares in TAURON Ekoenergia Sp. z o.o., TAURON Zielona Energia Sp. z o.o. and TAMEH HOLDING Sp. z o.o. did not reveal any impairment of the shares in the entities.

Sensitivity analysis

The tables below present the estimated impact of a change in key factors on the recoverable amount of the tested shares in subsidiaries. For assets generating electricity from conventional sources, the key factor analysed is the Clean Dark Spread ("CDS") due to the fact that a change in electricity prices generally results from the changes in the price of coal and CO2 emission allowances. Analogically, for gas-fired generation assets, the key factor analysed is the Clean Spark Spread ("CSS").

The CDS/CSS is the amount of the first-step margin achieved by the coal/gas-fired power plants or CHP plants, calculated as a difference between the price of electricity and the model variable costs (fuel cost, CO2 cost) associated with coal-fired electricity generation.

The sensitivity analysis takes into account the change in the CDS/CSS structure due to the planned gradual decommissioning of 200 MW class units by 2028 and the replacement of coal-fired units with gas-fired units in the Heat segment in accordance with the assumptions adopted for the tests.

Parameter Change Impact on the recoverable value of shares in

TAURON Ciepło Sp. z o.o.

Change in heat prices in the forecast period Change in amount of cogeneration bonus Change of WACC (net)

For shares in entities in the RES segment for which no impairment has been identified, the sensitivity analysis is presented in the table below.

Parameter

Change of assumption aligning the recoverable amount with the carrying amount of shares in:

TAURON

Ekoenergia Sp. z o.o.

TAURON

Zielona Energia Sp. z o.o.

Change in electricity prices over the forecast period -3.5% -44.4%

Change of WACC (net) 1 p.p. 12.05 p.p.

Results of the analyses in the scope of measurement of the loans granted

The analyses carried out regarding the financing granted to subsidiaries, based on the future cash flows of the subsidiaries, also showed the justification for increasing the valuation of the loan granted by the Company to TAURON Wytwarzanie

S.A. by the amount of PLN 203 million, as described in more detail in Note 21.1 of these separate financial statements.

‌EXPLANATORY NOTES TO THE SEPARATE STATEMENT OF COMPREHENSIVE INCOME

‌

Sales revenue