Ze Pak SaGPW: ZEP

Management Board’s Report from ZE PAK SA and ZE PAK SA Capital Group’s Operations in 2023 (download)

Jul 11, 2024 at 11:14 AM UTC · Issued by Ze Pak SA

ZE PAK SA CAPITAL GROUP

MANAGEMENT BOARD'S REPORT ON ZE PAK SA's

AND ZE PAK SA CAPITAL GROUP'S ACTIVITIES IN 2023

This is a translation of the document issued originally in Polish language.

The Polish original should be referred to in matters of interpretation.

30/4/2024

	ZE PAK SA CAPITAL GROUP
	MANAGEMENT BOARD'S REPORT ON THE CAPITAL GROUP'S ACTIVITIES IN 2023
TABLE OF CONTENTS:
1.	SELECTED CONSOLIDATED FINANCIAL DATA	4
2.	DESCRIPTION OF THE COMPANY AND OF THE CAPITAL GROUP	6
	2.1. Basic information on the Company and Capital Group	6

2.2. Basic principles and changes related to the ZE PAK SA Capital Group and Company management

rules

2.3. Described structure of main capital deposits or main capital investments made within the Capital

Group

2.4. Characteristics of the main products, goods and services, and the main outlet markets and supply

sources	11
3. DESCRIPTION OF ACTIVITIES	13

3.1. Significant events in the accounting year, as well as events after the balance sheet date affecting

		current and future activities	13
	3.2. Important agreements concluded in the financial year	16
	3.3. Execution of the investment programme	19
	3.4.	Risk management	20
	3.5. Described use of emission proceeds	21
4.	MAIN BUSINESS RISK FACTORS	21
5.	DESCRIPTION OF THE FINANCIAL AND ASSET STANDING	29
	5.1. Principles of preparing a financial statement	29
	5.2. Characteristics of basic economic and financial quantities	30
	5.3. Significant off-balance sheet items	40
	5.4.	Projected financial standing	40
	5.5. Specification of factors affecting current and future financial results	41
	5.6. Unusual factors and events affecting achieved financial results	43
6.	FINANCIAL ASSET MANAGEMENT	44
	6.1. Assessment of financial asset management	44
	6.2. Assessment of investment plan implementation	44
7.	SIGNIFICANT DEVELOPMENT FACTORS AND PROSPECTS	45
8.	SHAREHOLDING STRUCTURE SPECIFICATION	47
	8.1.	Shareholding structure	47
	8.2. Acquisition of own shares	47

8.3. Stocks and shares of entities of the ZE PAK SA Capital Group held by management and supervisory

persons	47
8.4. Employee shares programme control system	48
9. DECLARATION OF COMPLIANCE WITH CORPORATE GOVERNANCE RULES	48
9.1. Set of applied corporate governance rules	48
9.2. Set of waived DPSN 2021 principles	49
9.3. Changes in the status of applying the DPSN 2021 principles implemented in the financial year	50

9.4. Description of the main features of internal inspection and risk management systems applied in relation

	to the preparation of financial and consolidated financial statements	51
9.5.	Shareholders holding significant blocks of shares	53
9.6.	Holders of stocks providing special control rights	53
9.7.	Restrictions on exercising the voting right	53
9.8.	Restrictions on the transfer of the ownership right of stocks	53
9.9.	Rules of the appointment and dismissal of management and supervisory personnel	54
9.10.	Personal composition, its changes and a description of the activity of management and supervisory
	bodies	56
9.11.	Operation procedure of the General Meeting, its key powers and a description of shareholders' rights
	and how to exercise them	58
9.12.	Description of rules regarding amendments to the Company's Articles of Association	59
		2

	ZE PAK SA CAPITAL GROUP
	MANAGEMENT BOARD'S REPORT ON THE CAPITAL GROUP'S ACTIVITIES IN 2023
9.13. Information on the remuneration system and the remuneration amount for management and
	supervisory personnel	59
10. DECLARATION REGARDING THE DIVERSITY POLICY	61
11. COMPANY MANAGEMENT BOARD'S NON-FINANCIAL INFORMATION STATEMENT FOR 2023
FOR THE CAPITAL GROUP	62
11.1. Dual materiality analysis - redefining report content scope	63
11.2.	Business model description	64
11.3.	Social issues	78
11.4.	Employee issues	85
11.5.	Environmental issues	97
11.6. Issue of respecting human rights	123
11.7. Issues related to counteracting corruption	125
11.8.	Other GRI content	127
11.9.	Taxonomy	130
12. OTHER INFORMATION	184
12.1.	Significant legal proceedings	184
12.2. Major achievements in the field of research and development	185
12.3. Information on selecting an auditing company to examine the annual consolidated financial statement....	186
12.4. Information on financial statement audit	186
12.5.	Financial projections	186
12.6.	List of tables	186

ZE PAK SA CAPITAL GROUP

MANAGEMENT BOARD'S REPORT ON THE CAPITAL GROUP'S ACTIVITIES IN 2023

1. SELECTED CONSOLIDATED FINANCIAL DATA

	PLN thousand	PLN thousand	EUR thousand	EUR thousand
Selected	12 months of 2023	12 months of 2022	12 months of 2023	12 months of 2022
consolidated financial data	period	period	period	period
	from 1/1/2023	from 1/1/2022	from 1/1/2023	from 1/1/2022
	until 31/12/2023	until 31/12/2022	until 31/12/2023	until 31/12/2022

Sales revenues

Profit/loss on operating activities Gross profit/loss

Net profit/loss on continuing operations Net profit/loss on discontinued operations

Net profit/loss for the financial year

Net profit for the parent company's shareholders

Comprehensive income

Net cash from operating activities Net cash from investment activities Net cash from financial activities

Net change in cash and cash equivalent Net profit per share from continuing operations (in PLN/EUR per share) Net profit per share (in PLN/EUR per auction)

Weighted average number of shares

3 105 807	2 740 990	685 851	584 645
689 469	274 409	152 254	58 531
682 361	276 245	150 685	58 922
558 327	184 872	123 295	39 433
164 332	30 508	36 289	6 507
722 659	215 380	159 584	45 940
745 110	215 380	164 542	45 940
719 465	215 989	158 878	46 070
(321 804)	503 256	(71 064)	107 343
(488 697)	(651 176)	(107 918)	(138 894)
(1 009)	1 104 000	(223)	235 480
(811 510)	956 080	(179 205)	203 929
10.99	3.64	2.43	0.78
14.66	4.00	3.24	0.85
50 823 547	50 823 547	50 823 547	50 823 547

	as at	as at	as at	as at
	31/12/2023	31/12/2022	31/12/2023	31/12/2022
Total assets	3 589 708	4 539 455	825 600	967 921
Fixed assets	1 592 159	1 978 515	366 182	421 867
Current assets	1 997 549	2 560 940	459 418	546 054
Total equity	1 911 513	1 214 499	439 630	258 961
Basic capital	101 647	101 647	23 378	21 674
Equity allocated to parent company
shareholders	1 911 513	723 696	439 630	154 309
Total liabilities	1 678 195	3 324 956	385 969	708 961
Long-term liabilities	579 396	1 199 141	133 256	255 686
Short-term liabilities	1 098 799	2 125 815	252 714	453 275
Book value per share
(in PLN/EUR per share)	37.61	23.90	8.65	5.10
Weighted average number of shares	50 823 547	50 823 547	50 823 547	50 823 547

ZE PAK SA CAPITAL GROUP

MANAGEMENT BOARD'S REPORT ON THE CAPITAL GROUP'S ACTIVITIES IN 2023

	PLN thousand	PLN thousand	EUR thousand	EUR thousand
Selected	12 months of 2023	12 months of 2022	12 months of 2023	12 months of 2022
financial data of ZE PAK SA	period	period	period	period
	from 1/1/2023	from 1/1/2022	from 1/1/2023	from 1/1/2022
	until 31/12/2023	until 31/12/2022	until 31/12/2023	until 31/12/2022
Net revenues from the sale of products,
goods and materials	3 215 623	2 789 734	710 101	595 042
Profit/loss on operating activities	654 232	618 875	144 473	132 004
Gross profit/loss	664 472	632 253	146 734	134 858
Net profit/loss	584 412	543 577	129 055	115 943
Net cash from operating activities	(815 175)	636 661	(180 014)	135 798
Net cash from investment activities	(187 256)	143 594	(41 351)	30 628
Net cash from financial activities	(268)	30 119	(59)	6 424
Total net cash flows	(1 002 699)	810 374	(221 425)	172 850
Net profit per share
(in PLN/EUR per share)	11.50	10.70	2.54	2.28
Weighted average number of shares	50 823 547	50 823 547	50 823 547	50 823 547
	as at	as at	as at	as at
	31/12/2023	31/12/2022	31/12/2023	31/12/2022
Total assets	2 842 621	2 785 039	653 777	593 838
Fixed assets	1 883 371	778 403	433 158	165 974
Current assets	959 250	2 006 636	220 619	427 863
Equity	1 992 833	1 408 414	458 333	300 308
Basic capital	101 647	101 647	23 378	21 674
Liabilities and provisions for liabilities	849 788	1 376 625	195 443	293 530
Long-term liabilities	129	129	30	28
Short-term liabilities	142 809	106 685	32 845	22 748
Book value per share
(in PLN/EUR per share)	39.21	27.71	9.02	5.91
Weighted average number of shares	50 823 547	50 823 547	50 823 547	50 823 547

Selected consolidated financial data has been converted using the following exchange rates:

data concerning the comprehensive income statement (income statement) and the cash flow report (cash flow statement) according to an exchange rate, which is the arithmetic mean of the average NBP exchange rates on each last working day of the month within the financial period, from 1 January 2023 to 31 December 2023, i.e., 4.5284 EUR/PLN, and from 1 January 2022 to 31 December 2022, i.e., 4.6883 EUR/PLN.
data on individual items of the financial standing statement (balance sheet) according to the average EUR/PLN exchange rate set by the National Bank of Poland (NBP) as at 29 December 2023, i.e., 4.3480 EUR/PLN, and as at 30 December 2022, i.e., 4.6899 EUR/PLN.

ZE PAK SA CAPITAL GROUP

MANAGEMENT BOARD'S REPORT ON THE CAPITAL GROUP'S ACTIVITIES IN 2023

2. DESCRIPTION OF THE COMPANY AND OF THE CAPITAL GROUP

2.1. Basic information on the Company and Capital Group

Basic information on the Company

ZE PAK Spółka Akcyjna (formerly Zespół Elektrowni Pątnów - Adamów - Konin Spółka Akcyjna, hereinafter also referred to as 'ZE PAK SA' or the 'Company') operates as a joint-stock company under the provisions of the Code of Commercial Companies and other generally applicable provisions of Polish law. The Company was established as result of transforming Zespół Elektrowni Pątnów - Adamów - Konin state-owned company with its registered office in Konin into a company wholly owned by the State Treasury under the business name of Zespół Elektrowni "Pątnów - Adamów - Konin" Spółka Akcyjna. The deed of transformation was signed on 29 December 1994 in the presence of a notary public Elżbieta Brudnicka from a Notarial Office in Warsaw. On 31 December 1994, the Company was entered into the commercial register section "B" by the District Court in Konin under number RHB 847. Based on the decision of the District Court in Poznań, 22nd Commercial Department of KRS dated 21 June 2011, the Company was entered into the Register of Entrepreneurs. Currently the Company is entered into the Register of Entrepreneurs kept by the District Court Poznań Nowe Miasto and Wilda in Poznań, IX Commercial Department, under the KRS number 0000021374. The Company was established for an unlimited period of time.

Name:	ZE PAK Spółka Akcyjna
Legal status:	joint-stock company
Short name:	ZE PAK SA
Registered office and address:	ul. Kazimierska 45, 62-510 Konin, Poland
Phone number:	+48 63 247 30 00
Fax number:	+48 63 247 30 30
Website:	www.zepak.com.pl
E-mail address:	zepak@zepak.com.pl
KRS (National Court Register):	0000021374
REGON (Business Registry No.):	310186795
NIP (Tax ID No.):	665-000-16-45

According to the Company's Articles of Association, the Company's core business is the generation and sale of electricity and the generation and sale of heat. The Company generates energy from conventional sources. The Company decided to gradually shut down its lignite power generation activities and to get involved in a number of projects focusing its future activities on low-carbon and carbon-neutral energy sources. The Company may operate in the Republic of Poland and abroad. It should be taken into account that both the Company and the Group are currently in the process of significant changes regarding the nature of future activities. Currently undertaken investment projects are being implemented through special purpose vehicles, also in cooperation with external partners. This method of the Group's activities will result in transforming the Company into a holding entity, accumulating shares in companies responsible for the implementation of separate projects.

Company's shares are listed on the regulated market operated by the Giełda Papierów Wartościowych SA in Warsaw (Warsaw Stock Exchange). Company's shares are dematerialised and marked by the Krajowy Depozyt Papierów Wartościowych SA (National Depository for Securities) with the securities code ISIN PLZEPAK00012.

In 2023, the share capital of ZE PAK S.A. remained unchanged. As at 31 December 2023, the Company's share capital amounted to PLN 101 647 094.00, broken down into 50 823 547 class A bearer shares with a face value of PLN 2.00 each, representing 50 823 547 votes at the Company's General Meeting, comprising 100% of the total votes at the Company's General Meeting.

The Company has no branches (establishments).

Basic information on the Capital Group

As at 31 December 2023, the ZE PAK SA Capital Group (also referred to hereafter as the 'Group', 'Capital Group', 'ZE PAK SA Group') comprises the parent company ZE PAK SA, 10 subsidiaries, 25 companies where ZE PAK SA holds shares and consolidates using the equity method and 4 jointly controlled companies. A detailed list of the companies that make up the ZE PAK SA Capital Group and the others where ZE PAK SA holds shares is presented in Table 1.

ZE PAK SA CAPITAL GROUP

MANAGEMENT BOARD'S REPORT ON THE CAPITAL GROUP'S ACTIVITIES IN 2023

The companies of greatest importance to the Group due to their scale of operations are ZE PAK SA, which is involved in the generation of electricity and heat, and PAK KWB Konin SA, which is involved in lignite mining. The Group's conventional generating assets comprise four lignite-powered units with a total capacity of 1 118 MW located at the Pątnów power plant, in central Poland, in the Wielkopolskie province. The Group's mining assets are concentrated within PAK KWB Konin SA.

The Group has been gradually reducing its lignite mining and lignite power generation activities for several years until the ultimate total cessation of these activities. The current baseline scenario projects continue coal-based operation until the end of 2025. The Company has the right to decide on the extension depending on external factors (power system demand, market situation, regulatory environment).

PAK CCGT sp. z o.o., i.e., a company that is a 100% subsidiary of ZE PAK, responsible for preparing and implementing a project covering the construction of a gas unit within the former coal-fired Adamów power plant is one of the prospective assets. The project to build a 600 MW class gas-fired unit in Q4 2023 has entered the implementation phase. The currently anticipated commissioning date is the end of Q1 2027.

It is also planned to use the assets of the Pątnów Power Plant for the needs of a potential nuclear power plant construction. The project is developed in cooperation with third-parties. The special purpose vehicle set up to implement this project is PGE PAK Energetyka Jądrowa SA, where the Company holds 50% of the shares.

The ZE PAK Group is cooperating with the Polsat Plus Group by jointly developing a structure of PAK Polska Czysta Energia sp. z o.o. ('PAK - PCE') subsidiaries, whose activities focus on renewable energy generation and the production and use of green hydrogen. Until 3 July 2023, ZE PAK held the majority of shares in PAK - PCE. Following a series of transactions under an agreement concluded by ZE PAK and Cyfrowy Polsat SA, on 3 July 2023, Cyfrowy Polsat SA acquired 50.5% of the shares in PAK - PCE, thereby taking control of PAK-PCE sp. z o.o. and its subsidiaries, while ZE PAK is a minority shareholder with 49.5% of the shares in PAK - PCE. The company has acquired a capital-strong partner that will be able to guarantee the implementation of a wide range of prospective investment projects in the field of renewable energy sources, as well as the production and use of green hydrogen. PAK - PCE's main generating assets in the RES area are two biomass units generating electricity and heat with a total capacity of 110 MW, located at the Konin Power Plant, an 83 MW photovoltaic farm located in Brudzew and two wind farms: Kazimierz Biskupi and Miłosław with a total capacity of 27 MW. At the same time, wind projects with a total expected capacity of around 270 MW are under development by further SPVs. In the area of hydrogen projects, the concept of building a comprehensive green hydrogen chain from the production of green hydrogen, through the construction of a network of hydrogen filling stations, to manufacturing hydrogen buses is being developed.

In addition to the companies from the main areas of the Group's activities, the Group also includes other companies, which are engaged, among others, in: carrying out construction and assembly works, maintenance works, services, production and trading activities for the purpose of satisfying their own needs as well as providing comprehensive services to the industry.

The vast majority of the sales revenue generated by the Group comes from the sale of electricity. The Group also generates revenues related to the Power Market mechanism, as a result of winning power market auctions (primary market) and by taking over power obligations from other entities (secondary market). This is supplemented by revenues from the sales of heat, as well as construction and renovation contracts. Revenues from the termination of long-term contracts for the sale of electricity are an additional source of sales revenues, depending on the level of generation costs and energy prices in the market and production volumes. The Group, by having lignite mines within its structure, provides the Pątnów power plant with access to continuous supplies of lignite for its house-load generation systems located in the direct vicinity of the mines. The vertically integrated Group allows for optimisation of lignite inventories and supplies while coordinating lignite extraction with its demand for this fuel. Reduced mining operations mean coal supplies from third-party vendors beginning to play an increasingly important role.

Through the person of the main shareholder, the Group is linked to other entities in which Zygmunt Solorz holds a significant interest, directly or indirectly.

ZE PAK SA CAPITAL GROUP

MANAGEMENT BOARD'S REPORT ON THE CAPITAL GROUP'S ACTIVITIES IN 2023

Figure 1: Diagram of ZE PAK SA subsidiaries as at 31 December 2023 and selected other companies where ZE PAK SA holds shares and are relevant to the Group's operations

	PAK Pątnów sp. z o.o.
	ZE PAK SA (100%)
	PAK KWB Konin SA
	ZE PAK SA (100%)
	PAK Górnictwo
	sp. z o.o.
SA	ZE PAK SA (100%)
Orsted Polska OF SPV 1
PAK
sp. z o.o.

	ZE PAK SA (60%)
ZE	Orsted Polska OF SPV 6
sp. z o.o.
	ZE PAK SA (60%)
	Przedsiębiorstwo Remontowe
	PAK SERWIS sp. z o.o.
	ZE PAK SA (100%)
	Horset sp.z o.o.
	ZE PAK SA (100%)
	PAK CCGT sp. z.o.o
	ZE PAK SA (100%)
	PAK ATOM SA
	ZE PAK SA (100%)

PAK-Polska Czysta Energia sp. z o.o. ZE PAK SA (49,5%)

PGE PAK Energia Jądrowa SA

ZE PAK SA (50%)

PCE-OZE 5 sp. z.o.o PAK CCGT sp. z o.o. (100%)

Table 1: List of companies where ZE PAK SA holds shares

				Group's share in
				capital, %
Unit	Registered office	Scope of activity	As at statement	As at	As at
publication date	31	31

				December	December
				2023	2022

ZE PAK SA subsidiaries

"PAK Kopalnia Węgla	62-540 Kleczew	Lignite extraction	100.00%	100.00%	100.00%
Brunatnego Konin" SA	ul. 600-lecia 9


"PAK Górnictwo" sp. z o.o.	62-510 Konin	Repair and maintenance of	100.00%	100.00%	100.00%
ul. Przemysłowa 158	machinery


Przedsiębiorstwo Remontowe	62-510 Konin	Renovation and construction	100.00%	100.00%	59.59%*
"PAK SERWIS" sp. z o.o.	ul. Przemysłowa 158	services


"PAK CCGT" sp. z o.o.	62-510 Konin	Electricity generation	100.00%	100.00%	100.00%
ul. Kazimierska 45

ZE PAK SA CAPITAL GROUP

MANAGEMENT BOARD'S REPORT ON THE CAPITAL GROUP'S ACTIVITIES IN 2023

"PCE-OZE 5" sp. z o.o.	62-510 Konin	Electricity generation	100.00%	100.00%	59.59%*
ul. Kazimierska 45


"PAK Pątnów" sp. z o.o.	62-510 Konin	Electricity generation	100.00%	100.00%	100.00%
ul. Kazimierska 45


"Ørsted Polska OF SPV 1"	00-801 Warsaw	Electricity generation - offshore	60.00%	60.00%	60.00%
sp. z o.o.	ul. Chmielna 73	wind power


"Ørsted Polska OF SPV 6"	00-801 Warsaw	Electricity generation - offshore	60.00%	60.00%	60.00%
sp. z o.o.	ul. Chmielna 73	wind power


"PAK ATOM" SA	62-510 Konin	Electricity generation	-	100.00%	100.00%
ul. Kazimierska 45


"Horset" sp. z o.o.	03057 Kiev/Ukraine		100.00%	100.00%	-
ul. Smoleńska 31/33


Companies where ZE PAK SA holds shares and consolidates using the equity method
"PAK - Polska Czysta Energia	62-510 Konin	Activities of central companies,	49.50%	49.50%	59.59%
" sp. z o.o.	ul. Kazimierska 45	excluding financial holdings

Jointly controlled companies

PGE PAK Energia Jądrowa SA

"Ørsted Polska OF SPV 8" sp. z o.o.

"Ørsted Polska OF SPV 9" sp. z o.o. (formerly "Mawzorino Investments" sp. z o.o.)

62-510 Konin

ul. Kazimierska 45

00-801 Warsaw ul. Chmielna 73

Electricity generation	50.00%	50.00%	-

Electricity generation - offshore	50.00%	50.00%	50.00%
wind power

Electricity generation - offshore	50.00%	50.00%	50.00%
wind power

"Ørsted Polska OF SPV 10"	00-801 Warsaw	Electricity generation - offshore	50.00%	50.00%	50.00%
sp. z o.o.	ul. Chmielna 73	wind power

Entities with partially or completely indirect share of ZE PAK SA via other ZE PAK SA Group companies
Description of Group structural changes

On 3 July 2023, the Company sold shares representing approximately 10.1% of the share capital of PAK - PCE and approximately 10.1% of the votes at the shareholders' meeting of PAK - PCE to Cyfrowy Polsat SA (CP), a company that is part of the Polsat Plus Group. Prior to closing the transaction, the shares of Przedsiębiorstwo Remontowe PAK Serwis sp. z o.o. and PCE - OZE 5 sp. z o.o. were transferred to the Company and were therefore not transacted. As a result of the transaction, the Company holds approximately 49.5% of the share in PAK - PCE, while CP holds approximately 50.5% of the share therein.

On 28 November 2023, the Extraordinary Shareholders' Meeting of ZE PAK SA approved the merger of ZE PAK SA with PAK-ATOM SA pursuant to Art. 492(1) cl. 1 of the Code of Commercial Companies, i.e., by transferring all assets of PAK-ATOM SA ('Acquired Company') to ZE PAK SA ('Acquiring Company').

As of 31 December 2023, share in the general number of votes held by the Group in subsidiaries is equal to the Group's share in capitals of these subsidiaries.

2.2. Basic principles and changes related to the ZE PAK SA Capital Group and Company management rules

Aiming at ordering key issues related to management of the Capital Group in which ZE PAK S.A. is the parent company and, at the same time, the owner of capital seeking a satisfactory return on the funds engaged, a Head Office operates within the organisational structure of the Company. The responsibilities of the Head Office include, among others, issues associated with corporate governance. The basic tasks of the Head Office as part of corporate governance include supervision over the activities of the ZE PAK SA Capital Group and other companies wherein ZE PAK SA holds shares or stocks. This unit coordinates the coherence of the activities by all Group entities and monitors their compliance with the applicable legislation, as well as the interests of the Capital Group as a whole.

In accordance with the policy implemented within the Group, its key subsidiaries, members of the ZE PAK SA Management Board may act as members of the management boards at these companies, while acting as the members of supervisory boards in other Group companies. In addition, to ensure the correct functioning of the corporate governance

ZE PAK SA CAPITAL GROUP

MANAGEMENT BOARD'S REPORT ON THE CAPITAL GROUP'S ACTIVITIES IN 2023

body, the Management Board of ZE PAK SA recommends to the Supervisory Board of ZE PAK SA, the candidatures of other management and supervisory board members of the Group companies.

The Company's organisational structure includes created organisational divisions that bring together the Company's organisational units (departments, offices, branches, etc.). Individual organisational divisions are managed by ZE PAK SA's Management Board members in accordance with the internal division of competences made by the Company's Supervisory Board. The members of the Management Board at ZE PAK SA cooperate and coordinate activities related to the Company's affairs and ensure the proper cooperation of the divisions and organisational units managed by them. The areas of the Company's activities managed by individual Management Board members are defined by the Company's organisational by-laws, which determine the organisation of the Company's as an enterprise.

Figure 2. Company's organizational structure with an internal division of competences

The ZE PAK SA Capital Group operates shared service centres in the following fields:

legal, services for the Groups' companies,
investments,
accounting, finances and controlling,
HR and payroll,
environmental protection,
logistics and procurement,
administration.

Shared services centres provide services in the field defined above under contracts concluded by ZE PAK SA with Group companies. The concentration of competences in particular areas is aimed at improving the quality of services provided and optimising the operating costs of the ZE PAK SA Capital Group.

There are significant changes ongoing in the Group's structure in relation to the transition process. The portfolio of renewable energy developers was being expanded within the Capital Group. In July 2023, ZE PAK signed a Promised Agreement with Cyfrowy Polsat SA (of the Polsat Plus Group) for the sale of shares in PAK-Polska Czysta Energia sp. z o.o., as a result of which Cyfrowy Polska ultimately holds 50.5% of the shares in PAK-Polska Czysta Energia Sp. z o.o., and ZE PAK S.A. holds 49.5% of the shares.

The nature of the new projects means that a number currently undertaken investment project initiatives will be implemented by special purpose vehicles, often in cooperation with third-party partners. This method of the Group's