Supervisory Board and Supervisory Board Committees

The Audit Committee of the Supervisory Board of Grupa KĘTY S.A. operates in compliance with its By-law, abiding by the internal regulations of Grupa KĘTY S.A., and also follows the requirements of the legal regulations, particularly the Act on Statutory Auditors, Audit Firms and Public Supervision (Journal of Laws of 2022, item 1302, as amended – hereinafter referred to as the Act) and Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014. The Audit Committee consists of members appointed by the Supervisory Board. In exercising its competencies and duties, the Committee also follows the ‘Recommendations for the functioning of the audit committees’ issued by the Office of the Polish Financial Supervision Authority.

In accordance with the Act and the By-law of the Audit Committee of the Supervisory Board of Grupa KĘTY S.A., the Audit Committee consists of at least three members, with the majority of the Audit Committee Members, including its Chairman, being independent members. The Audit Committee Members possess knowledge and qualifications in accounting or auditing financial statements.

The Audit Committee membership has been changing along with the changes in the Supervisory Board membership owing to the resignation of the Company Supervisory Board Member on 10 February 2022, and following the resolution of the Extraordinary General Meeting of the Company of 17 March 2022.

In the period from 1 January to 10 February 2022, the Audit Committee of the Company Supervisory Board was composed of:

• Mr Piotr Kaczmarek – Chairman of the Audit Committee,
• Mr Wojciech Golak – Member of the Audit Committee,
• Mr Paweł Niedziółka – Member of the Audit Committee,
• Mr Przemysław Rasz – Member of the Audit Committee,
• Mr Piotr Stępniak – Member of the Audit Committee,
• Ms Agnieszka Zalewska – Member of the Audit Committee.

Owing to the resignation from the function of the Company Supervisory Board Member filed by Ms Agnieszka Zalewska on 10 February 2022, which automatically resulted in her resignation from the Audit Committee membership, in the period from 10

February to 17 March 2022 the Audit Committee consisted of:

• Mr Piotr Kaczmarek – Chairman of the Audit Committee,
• Mr Wojciech Golak – Member of the Audit Committee,
• Mr Paweł Niedziółka – Member of the Audit Committee,
• Mr Przemysław Rasz – Member of the Audit Committee,
• Mr Piotr Stępniak – Member of the Audit Committee.

Further, on 18 March 2022, the Company Supervisory Board in its membership approved by resolution of the Extraordinary General Meeting of the Company on 17 March 2022, passed a resolution appointing Ms Anna Włoszek Member of the Audit Committee of the Supervisory Board. Therefore, in the period from 18 March to 31 December 2022, the Audit Committee consisted of:

• Mr Piotr Kaczmarek – Chairman of the Audit Committee,
• Mr Wojciech Golak – Member of the Audit Committee,
• Mr Paweł Niedziółka – Member of the Audit Committee,
• Mr Przemysław Rasz – Member of the Audit Committee,
• Mr Piotr Stępniak – Member of the Audit Committee,
• Ms Anna Włoszek – Member of the Audit Committee.

In the period from 31 December 2022 to the date of this Statement, the membership of the Audit Committee has not changed.
The independence of the particular Members of the Audit Committee, as well as their knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, have been described below.

Mr Piotr Kaczmarek – Chairman of the Audit Committee

Mr Piotr Kaczmarek fulfils the statutory independence criteria and possesses knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

Mr Piotr Kaczmarek is highly experienced in seating at Audit Committees of stock-listed companies, including as Chairman of the Audit Committees (Robyg S.A., Grupa Kęty S.A., Ferro S.A., Harper Hygienics S.A, Erbud S.A., VRG S.A.). He has also worked for more than a decade as a financial analyst, and was awarded the CFA (Chartered Financial Analyst) title and a securities broker licence.
Since 2017, Mr Piotr Kaczmarek has acted as a Member of the Supervisory Board of Grupa KĘTY S.A., which contributed to extending his knowledge of the sector in which the Company operates.

Mr Wojciech Golak – Member of the Audit Committee

Mr Wojciech Golak fulfils the statutory independence criteria and possesses knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

In the period from 2018 to 2022, Mr Wojciech Golak acted as a Member of the Audit Committee of ROBYG S.A. He completed a post-graduate course in banking run by the Collegium of Management and Finance of the SGH Warsaw School of Economics. He also acted as a representative and receiver of KBC Securities N.V. (joint stock company) Branch in Poland.

Mr Wojciech Golak has been acting as a Member of the Supervisory Board of Grupa KĘTY S.A. since 2020, which contributed to extending his knowledge of the sector in which the Company operates.

Mr Paweł Niedziółka – Member of the Committee

Mr Paweł Niedziółka fulfils the statutory independence criteria and possesses knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

Mr Paweł Niedziółka has 25 years of experience in analyses and risk management with regard to financing business companies and structuring of bank financing. He heads the Financial Risk Management Department at the Institute of Banking of the SGH Warsaw School of Economics, and manages the Structural Financing Team at Bank Millennium S.A. (previously, he was associated with Credit Lyonnais Bank Polska and Bankgesellschaft Berlin).

Mr Paweł Niedziółka has been acting as a Member of the Supervisory Board of Grupa Kęty S.A. since 2014, being at the same time a Member of the Audit Committee and the Nomination and Remuneration Committee, which contributed to extending his knowledge of the sector in which the Company operates.

Mr Piotr Stępniak – Member of the Audit Committee

Mr Piotr Stępniak fulfils the statutory independence criteria and possesses knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

He also sat at Supervisory Boards of a number of companies, including those listed at the stock exchange. He possesses theoretical expertise in accounting or financial audit within the meaning of Article 129.1 sentence two of the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Supervision. He studied accounting and obtained the degree of a Master of Science in Management (MSM) at the Purdue University in the USA. Moreover, he has a Double Major B.A. degree in Management and Economics with Financial Accounting and an EMBA degree (Executive Master in Business Administration).

Mr Piotr Stępniak has been acting as a Member of the Supervisory Board of Grupa KĘTY S.A. since 2017, which contributed to extending his knowledge of the sector in which the Company operates.

Mr Przemysław Rasz – Member of the Audit Committee

Mr Przemysław Rasz fulfils the statutory independence criteria and possesses knowledge in accounting and auditing financial statements, as well as the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

Mr Przemysław Rasz has many years of experience of working at the supervisory bodies of Polish and foreign commercial and production companies, including as the owner’s representative. For more than twenty years, he has worked in Polish, European and American civil engineering companies dealing with production, trade and contract performance. He has also managed companies of the construction sector.

Mr Przemysław Rasz has been acting as a Member of the Supervisory Board of Grupa KĘTY S.A. since 2020, which contributed to extending his knowledge of the sector in which the Company operates.

Ms Anna Włoszek – Member of the Audit Committee

Ms Anna Włoszek fulfils the statutory independence criteria and but does not possesses knowledge in accounting and auditing financial statements, or the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

Since the beginning of her career, Ms Anna Włoszek has occupied managerial positions at business companies and specialised in public procurement orders. Since 2019, she has been the President of the Management Board of Agencja Rozwoju Małopolski Zachodniej S.A.

Based on the declaration submitted, Ms Anna Włoszek does not possess knowledge in accounting or auditing financial statements, nor the sector of Grupa KĘTY S.A. operation, as referred to in the Act on Statutory Auditors […].

Detailed information about the particular members of the Audit Committee of the Supervisory Board of Grupa KĘTY S.A., including their qualifications and experience, is presented on the corporate website.

Competences of the Audit Committee and information on the method of the Committee appointment and operation

The Audit Committee consists of at least three Members appointed by the Supervisory Board for its term of office from among its Members. The Committee Members appointed by the Supervisory Board elect one of them as the Chairman of the Committee. The Committee members receive monthly remuneration for the work on the Committee, in compliance with the Remuneration Policy. At least one Committee Member possesses knowledge and qualifications in accounting or auditing financial statements. Most of the Audit Committee Members, including the Chairman of the Committee, fulfil the independence criteria specified in Article 129.3 of the Act of 11 May 2017 on Statutory Auditors, Audit Companies and Public Supervision, as well as in ‘The Best Practice for GPW Listed Companies 2021’. The Audit Committee Members possess knowledge and qualifications related to the industry in which the Company operates. This condition is deemed fulfilled if at least one Committee Member has the knowledge and qualifications related to that industry, or individual Members – within certain areas – have the knowledge and qualifications related to that industry. A Committee Member may be dismissed from the Committee at any time by virtue of a Supervisory Board resolution.

The Committee meetings are opened and chaired by the Committee Chairman or in his absence by another Member of the Committee indicated by the Chairman. The Committee decisions are made in the form of resolutions. The resolutions are passed with an absolute majority of votes. In the event of an equal number of votes for and against a resolution, decisive is the vote of the Chairman, and in his absence – of the other person chairing the Committee meeting, as specified in § 9.1 of the Committee By-law. For the validity of the Committee resolutions proper invitation of all the Committee Members to the Committee meeting is required, or consent to holding a meeting of the Committee without formal convening, in accordance with § 8.7 of the Committee By-law, as well as the presence of at least half of the Committee Members at the Committee meeting. The Committee resolutions do not bind the Supervisory Board.

The tasks of the Committee include supporting the Supervisory Board in the performance of its control and supervisory duties, as well as performance of tasks specified in the generally biding laws, and specifically as regards:

• monitoring of the financial reporting process, which includes but is not limited to:
  • verification of financial statements as to the correctness and completeness of the information provided therein;
  • providing opinions on the principles of preparing financial statements and the accounting policy at the Company;
  • analysing the reports on the audit of financial statements;
• monitoring the effectiveness of internal control systems, risk management systems and internal audit, also with regard to financial reporting, which includes but is not limited to:
  • assessment of the effectiveness of the particular elements of the systems, including those related to financial reporting and safety of the applied information technologies, and presenting recommendations in that regard to the Supervisory Board;
  • analysis of the detected irregularities in the internal control systems and presentation of recommendations in that regard to the Supervisory Board;
  • examining reports and recommendations issued by the external regulatory or control authorities, applicable to the compliance of the Company activities with the legal regulations as well as schedules of removing the irregularities detected;
• monitoring the performance of financial audit activities, in particular carrying out of audits by an audit firm, taking into account any findings and conclusions of the Polish Agency of Audit Supervision arising from the audits carried out at an audit firm, which includes but is not limited to:
  • recommending to the Supervisory Board the selection of an audit firm to carry out the audit or review of the Company financial statements;
  • providing opinions on the proposed terms of contract with an audit firm with regard to carrying out the audit or review, including the value and limit of remuneration;
  • assessing the type and scope of services ordered with an audit firm and the remuneration paid on that account, or other considerations for the benefit of the audit firm, with regard to the risk of a conflict of interest occurrence;
  • presenting to the Supervisory Board the conclusions and recommendations resulting from the report on the audit of the financial statements of the Company prepared by an audit firm;
  • expressing opinions regarding the activities undertaken by the Company Management Board in relation to the reservations to the financial statements reported by an audit firm or otherwise reported comments with regard to the correctness of the financial statements or the accounting principles of the Company;
  • assessing and providing opinions with regard to the information provided by the audit firm performing the financial audit activities at the Company in reference to major issues related to the activities, including major irregularities in the internal audit system at the Company as refers to the financial reporting;
• controlling and monitoring the independence of the statutory auditor and the audit firm;
• informing the Supervisory Board about the audit results and explaining how the audit contributed to the fairness of the Company financial reporting, and about the role of the Committee in the auditing process;
• assessing the independence of the statutory auditor and giving consent to the provision by them of the permitted non-audit services to the Company;
• developing a policy of selection of the audit firm to carry out the audit of the Company financial statements;
• developing a policy on the provision of the permitted non-audit services by the audit firm to carry out the audit, the entities related to that audit firm or a member of the audit firm’s network;
• determining the procedure of selection of an audit firm to carry out the audit of the Company financial statements;
• presenting recommendations to the Supervisory Board with regard to the selection of an audit firm;
• presenting recommendations to ensure the integrity of the Company financial reporting process;
• preparing opinions within the competencies of the Supervisory Board, subject that the generally binding laws and the internal regulations of the Company permit that;
• performing other tasks resulting from the generally binding laws or tasks entrusted by the Supervisory Board pursuant to Section 2.
• By way of a resolution, the Supervisory Board may entrust the Committee with the performance of activities other than those specified in Section 1, subject that it does not prejudice the generally binding laws.

In 2022, the Audit Committee held 8 meetings, in which 12 resolutions were passed. Additionally, outside of the meetings, in the voting ordered by the Chairman of the Audit Committee through the means of direct remote communication, one resolution was passed.

The Audit Committee Members maintained standing contacts with the Company. Moreover, there were held meetings and consultations outside of the formal sessions. The Audit Committee meetings were attended – apart from the Committee Members – by the invited guests: the Management Board Member in charge of Finance, Internal Audit Director, Compliance Director, President of the Management Board of Dekret Centrum Rachunkowe, the representatives of the E&Y audit firm, and the invited employees of the Company. In addition to plenary meetings, the Audit Committee Members also held consultations as part of the Committee’s ongoing work.

The main topics of the Audit Committee in 2022 included:

• detailed analysis of the draft separate and consolidated financial statements, as part of the public disclosure in the form of the Company interim reports, obtaining from the Management Board of additional information and explanations regarding the statements, and identification of the necessity for any correction, additional explanations or comments;
• monitoring the scope, course and methods of work of the audit form in relation to the audit of separate and consolidated financial statements of the Company, and audit of the financial statements of the selected subsidiaries of Grupa KĘTY S.A. for 2021, and also the review interim condensed separate and consolidated financial statements of the Company, and review of consolidation packages of the selected subsidiaries of Grupa KĘTY S.A. for the first half of 2022;
• monitoring the scope, course and methods of work of the audit form in relation to the audit of the separate financial statements of Grupa KĘTY S.A. for the year ended 31 December 2021, and consolidated financial statements of the Capital Group of Grupa KĘTY S.A. for the year ended 31 December 2021 (‘financial statements’), and audit of the financial statements of the selected subsidiaries of Grupa KĘTY S.A. for the year ended 2021, and also the review interim condensed separate and consolidated financial statements of the Company, and review of consolidation packages of the selected subsidiaries of Grupa KĘTY S.A. for the first half of 2022;
• confirmation of the independence of the audit firm, the audit team and the statutory auditors delegated to carry out the audit of the financial statements of the Company for 2021 and the report on the operations of the Company and the Capital Group of Grupa KĘTY S.A. in 2021, and review of interim condensed financial statements of the Company for 6 months ending 30 June 2022, and review of the report on the operations of the Capital Group in the first half of 2022; • analysis the results of the audit of the financial statements of the Company for 2021, and issue based thereon of a recommendation for the Supervisory Board of the Company with regard to acceptance of a positive opinion on the audit of the aforesaid financial statements, and a recommendation regarding the request of the Supervisory Board to the Annual General Meeting to approve the statements;
• following a positive assessment of the statutory auditor’s independence, consent (pursuant to Article 130.1.4 of the Act on Statutory Auditors) to the provision by the auditor of the permitted non-audit services to the Company, i.e. audit of the Report on the Remuneration of the Management Board and Supervisory Board Members of Grupa KĘTY S.A. for 2021 for the purposes of the General Meeting;
• consent to the audit by the audit firm of the Report on the Remuneration of the Management Board and Supervisory Board Members for the years 2022-2025, in compliance with the requirements of the Act on Public Offering for the purposes of the General Meeting;
• passing of a resolution to recommend to the Company Supervisory Board the appointment of an audit firm to audit the financial statements and consolidated financial statements of Grupa KĘTY S.A. and the selected companies of Grupa KĘTY S.A. (Aluprof S.A., Alupol Packaging S.A., Alupol Films Sp. z o.o., and Alupol Packaging KĘTY Sp. z o.o.) for the years 2023-2025 as well as the reviews of interim condensed financial statements and consolidated financial statements of Grupa KĘTY S.A., and the reviews of the consolidation packages of the selected subsidiaries of Grupa KĘTY S.A. for the period of six months ending 30 June in the years 2023-2025 (the recommendation was made following a selection procedure organised by the Company, meeting the applicable criteria);
• repeal of the existing Grupa KĘTY S.A. policy of selection of an audit firm to carry out the statutory audit of financial statements, and recommendation to the Company Supervisory Board of the adoption of a new policy of Grupa KĘTY S.A. with regard to the selection of and cooperation with an audit firm responsible for carrying the statutory audit of financial statements, in consideration of the recommendations of the Polish Financial Supervision Authority concerning emergency procedures should the auditor lose the right to carry out the audit of the financial statements;
• passing of a resolution on amending the policy on the provision of the permitted non-audit services by the audit firm carrying out the audit, the entities related to that audit firm or a member of the audit firm’s network;
• analysis of the findings from an inspection by the Polish Agency of Audit Supervision, the declaration with regard to administrative of disciplinary proceedings, and consideration of EY’s declaration in that scope;
• analysis of the ‘Transparency Report of EY Audyt Polska for the year 2021’ and the ‘Annual Report of the Polish Agency for Audit Supervision for the year 2021’;
• monitoring the manner of the compliance function performance at the Capital Group of Grupa KĘTY S.A. in the second half of 2022;
• passing of resolutions concerning the work plan of the Audit Committee for the years 2022 and 2023;
• cooperation and monitoring of the internal audit function within the Company organisational structure, and in particular:
  • issue of an opinion on the drafted ‘Annual Audit Plan for 2023’ and ‘Long-term Audit Plan for years 2023-2025;
  • issue of opinion on the update of the Internal Audit Rules of Grupa KĘTY S.A.;
  • analysis of the annual and semi-annual Report on Internal Audit Activities;
  • discussion of the post-audit conclusions and recommendations;
  • current communication with regard to compliance with the Internal Audit Rules.

The detailed methods of the Audit Committee operation are determined in the Company Articles and the By-law of the Audit Committee of the Supervisory Board of Grupa KĘTY S.A., passed by the Supervisory Board, available on the corporate website.

Policy of selection of an audit firm to carry out the audit of the financial statements of Grupa KĘTY S.A., and Policy on the provision of permitted non-audit services by the audit firm carrying out the audit, the entities related to that audit firm or a member of the audit firm’s network

In accordance with the applicable law, Grupa KĘTY S.A. has its separate and consolidated financial statements reviewed and audited by an audit firm. The selection of an entity authorised to audit the Company financial statements should be carried out on the basis of the following principles.

• The entity authorised to audit financial statements shall be selected in a tender procedure by the Supervisory Board of Grupa KĘTY S.A., on the basis of a recommendation by the Audit Committee of the Supervisory Board. The decision on the selection is taken in the form of a resolution of the Supervisory Board.
• When selecting a firm authorised to audit the financial statements, the Supervisory Board of Grupa KĘTY S.A. follows the binding Policy and Procedure of an audit firm selection.
• When selecting the entity authorised to audit the financial statements, the Supervisory Board of Grupa KĘTY S.A. focuses on the prior experience of the audit firm in auditing financial statements of companies with the profile of operation similar to those of the Grupa KĘTY S.A. Capital Group.
• The selection is made taking into account the principles of impartiality and independence of the audit firm as well as analysis of the projects carried out by the firm at the Company, going beyond the audit of the financial statements, in order to avoid a conflict of interest (preserving impartiality and independence).

The policy and procedure of Grupa KĘTY S.A. with regard to the selection of an audit firm to carry out the audit of statutory financial statements are available on the corporate website.

Main assumptions of the policy on the provision of permitted non-audit services by the audit firm carrying out the audit, the entities related to that audit firm or a member of the audit firm’s network

1. The Company does not order any prohibited non-audit services in the following periods:
   1. in the period from the commencement of the respective audited period to the issue of the audit report; and
   2. in the reporting year directly preceding the period referred to in letter a), in reference to the services listed in Section 3 letter e).
2. The Company may order non-audit services, other than the prohibited non-audit services, subject to their approval by the Audit Committee and after carrying out of the respective assessment of threats and assuring independence in compliance with Article 22b of Directive 2006/43/EC.
3. Prohibited non-audit services are understood to be the services listed below, in accordance with the REGULATION (EU) No 537/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL:
   • tax services relating to:
   • preparation of tax forms;
   • payroll tax;
   • customs duties;
   • identification of public subsidies and tax incentives unless support from the statutory auditor or the audit firm in respect of such services is required by law;
   • support regarding tax inspections by tax authorities unless support from the statutory auditor or the audit firm in respect of such inspections is required by law;
   • calculation of direct and indirect tax and deferred tax;
   • provision of tax advice;
   • services that involve playing any part in the management or decision-making of the audited entity;
   • bookkeeping and preparing accounting records and financial statements;
   • payroll services;
   • designing and implementing internal control or risk management procedures related to the preparation and/or control of financial information or designing and implementing financial information technology systems;
   • valuation services, including valuations performed in connection with actuarial services or litigation support services;
   • legal services, with respect to:
   • the provision of general counsel;
   • negotiating on behalf of the audited entity; and
   • acting in an advocacy role in the resolution of litigation;
   • services related to the audited entity’s internal audit function;
   • services linked to the financing, capital structure and allocation, and investment strategy of the audited entity, except providing assurance services in relation to the financial statements, such as the issuing of comfort letters in connection with prospectuses issued by the audited entity;
   • promoting, dealing in, or underwriting shares in the audited entity;
   • human resources services, with respect to:
   • management in a position to exert significant influence over the preparation of the accounting records or financial statements which are the subject of the statutory audit, where such services involve:
     • searching for or seeking out candidates for such position; or
     • undertaking reference checks of candidates for such positions;
     • structuring the organisation design; and
     • cost control.

The policy of Grupa KĘTY S.A. with regard to providing the permitted non-audit services by the audit firm carrying out the audit, by entities related to that audit firm and by a member of the audit firm’s network is available on the corporate website.

The Remuneration Committee of Grupa KĘTY S.A. was established by way of Resolution of the Supervisory Board of 19 May 2005. The Supervisory Board of Grupa KĘTY S.A. by way of Resolution of 5 June 2019, the Supervisory Board changed the name of the Remuneration Committee into the Nomination and Remuneration Committee (‘N&RC’) and passed the Committee By-law. The main competencies of the the Nomination and Remuneration Committee include the control and supervision of the system of remuneration of the Management Board of Grupa KĘTY S.A. as well as instigation and carrying out recruitment procedures with the aim to find candidates to act as the Management Board Members;

The Nomination and Remuneration Committee membership has been changing along with the changes in the Supervisory Board membership owing to the resignation of the Company Supervisory Board Member on 10 February 2022, and following the resolution of the Extraordinary General Meeting of the Company of 17 March 2022.

In the period from 1 January to 10 February 2022, the Nomination and Remuneration Committee of the Supervisory Board was composed of:

• Mr Piotr Stępniak – Chairman of the Nomination and Remuneration Committee,
• Mr Wojciech Golak – Member of the Nomination and Remuneration Committee,
• Mr Piotr Kaczmarek – Member of the Nomination and Remuneration Committee,
• Mr Paweł Niedziółka – Member of the Nomination and Remuneration Committee,
• Mr Przemysław Rasz – Member of the Nomination and Remuneration Committee,
• Ms Agnieszka Zalewska – Member of the Nomination and Remuneration Committee.

Owing to the resignation from the function of the Company Supervisory Board Member filed by Ms Agnieszka Zalewska on 10 February 2022, which automatically resulted in her resignation from the Nomination and Remuneration Committee membership, in the period from 10 February to 17 March 2022 the Audit Committee consisted of:

• • Mr Piotr Stępniak – Chairman of the Nomination and Remuneration Committee,
• • Mr Wojciech Golak – Member of the Nomination and Remuneration Committee,
• • Mr Piotr Kaczmarek – Member of the Nomination and Remuneration Committee,
• • Mr Paweł Niedziółka – Member of the Nomination and Remuneration Committee,
• • Mr Przemysław Rasz – Member of the Nomination and Remuneration Committee.

Further, on 18 March 2022, the Company Supervisory Board in its membership approved by resolution of the Extraordinary General Meeting of the Company on 17 March 2022, passed a resolution appointing Ms Anna Włoszek Member of the Nomination and Remuneration Committee of the Supervisory Board. Therefore, in the period from 18 March to 31 December 2022, the Nomination and Remuneration Committee consisted of:

• Mr Piotr Stępniak – Chairman of the Nomination and Remuneration Committee,
• Mr Wojciech Golak – Member of the Nomination and Remuneration Committee,
• Mr Piotr Kaczmarek – Member of the Nomination and Remuneration Committee,
• Mr Paweł Niedziółka – Member of the Nomination and Remuneration Committee,
• Mr Przemysław Rasz – Member of the Nomination and Remuneration Committee,
• Ms Anna Włoszek – Member of the Nomination and Remuneration Committee.

In the period from 31 December 2022 to the date of this Statement, the membership of the Nomination and Remuneration Committee has not changed.

The tasks of the Committee include supporting the Supervisory Board in the performance of its control and supervisory duties, as well as performance of tasks specified in the generally biding laws, and specifically as regards:

1. as regards the Management Board Members nominations:
   1. carrying out recruitment procedures with the aim to find candidates to act as the Management Board members;
   2. presenting recommendations to the Supervisory Board in reference to the structure, size and membership of the Management Board.
2. as regards remuneration
   • analysing the Management Board members’ remuneration system, which includes analysing all components of the remuneration due and paid to the Management Board members, as well as carrying out a comparative analysis in reference to other entities operating on the market of similar scale and profile of operation (if available), and presenting recommendations in that regard to the Supervisory Board;
   • if the General Meeting authorises the Supervisory Board to specify the elements of the Remuneration Policy with more detail in accordance with the binding laws – presenting recommendations and proposals of the detailed scope to the Supervisory Board;
   • presenting recommendations and proposals to the Supervisory Board in reference to the data and information included in the annual report on remuneration prepared by the Supervisory Board in accordance with the applicable laws;
   • presenting recommendations and proposals to the Supervisory Board in reference to amending the Remuneration Policy or the principles of remuneration and the terms of employment specified for the particular Management Board members;
   • if the Company has implemented an incentive scheme (e.g. Management Options Plan) – carrying out an analysis and presenting recommendations and proposals to the Supervisory Board in reference to the scheme assumptions and terms.

In 2022, the Nomination and Remuneration Committee held 2 meetings, in which 2 resolutions were passed. Additionally, outside of the meetings, in the voting ordered by the Chairman of the Nomination and Remuneration Committee through the means of direct remote communication, 5 resolutions were passed. Moreover, the Nomination and Remuneration Committee held three meetings within the recruitment procedure for the possible extension of the membership of the Management Board, in which the potential candidates participated.

The Nomination and Remuneration Committee Members maintained standing contacts with the Company. The Nomination and Remuneration Committee meetings were attended – apart from the Committee Members – by the invited guests: the Management Board Member in charge of Finance, the representatives of the recruitment companies, and other invited employees of the Company. In addition to plenary meetings, the Nomination and Remuneration Committee Members also held consultations as part of the Committee’s ongoing work.

The main topics of the Nomination and Remuneration Committee in 2022 included:

• discussion of the proposal of the 2022 bonus plan for the Management Board Members, in the context of the methods of awarding management boards at international and Polish corporations of the aluminium sector;
• update of the basic remuneration and determination of the incentive principles for the Management Board of Grupa KĘTY S.A. for 2022, including:
  • determination of financial criteria for the particular Management Board Members depending on the growth rate of EBITDA and net profit of the Capital Group of Grupa KĘTY S.A.;
  • determination of bonus criteria for the Management Board on account of the performance of non-financial objective regarding the reduction of greenhouse gas emission as a function of production size, performance of projects for the local communities, reducing the Total Recordable Incident Rate (TRIR);
• verification of the calculation of the annual incentive for the Members of the Management Board of Grupa KĘTY S.A. for 2021 and submission of the related recommendation to the Supervisory Board;
• recommendation to the Supervisory Board of the approval of the Report on the Remuneration of the Management Board and Supervisory Board Members of Grupa KĘTY S.A. for 2021, and adoption of amendments to the Remuneration Policy of the Management Board and Supervisory Board Members of Grupa KĘTY S.A. as regards:
  • extension of the catalogue of the possible criteria on which the variable remuneration depends for the individual goals assigned to the Management Board Members;
  • possibility of granting a discretionary award to the Management Board Members;
  • update of the description of the incentive scheme for the Management Board members in compliance with the principles of the Management Options Plan for the years 2020–2028, as adopted by Resolution No. 27/20 of the Annual General Meeting of the Company on 20 August 2020;
  • granting to the Supervisory Board Members an additional monthly remuneration on account of the work on the Committees operating within the Supervisory Board;
• discussion of the competence and distribution of responsibility among the key persons at the Company, owing to the increased scale of operations on the international markets, which will serve building the competitive advantage.

Competences of the Nomination and Remuneration Committee and information on the method of the Committee appointment and operation

The Committee consists of at least three Members appointed for the term of the Supervisory Board. The Committee Members are appointed by virtue of a resolution passed by the Supervisory Board, from among the Supervisory Board Members, and perform their functions until their resignation has been accepted or until their dismissal, in accordance with the appointment procedure. The Committee appoints a Chairman of the Committee from among the Committee Members, by way of a resolution. The Committee members receive monthly remuneration for the work on the Committee, in compliance with the Remuneration Policy.

The Committee meetings are opened and chaired by the Committee Chairman or in his absence by another Member of the Committee indicated by the Chairman. The Committee decisions are made in the form of resolutions. The resolutions are passed with an absolute majority of votes. In the event of an equal number of votes for and against a resolution, decisive is the vote of the Committee Chairman, and in his absence – of the other person chairing the Committee meeting, as specified in § 7.1 of the Committee By-law. For the validity of the Committee resolutions passed at the Committee meeting, proper invitation of all of the Committee members to the Committee meeting is required, or consent to holding a meeting of the Committee without formal convening, in accordance with § 6.7 of the Committee By-law, as well as presence of at least half of the Committee members at the meeting. The Committee resolutions do not bind the Supervisory Board.

The detailed methods of the Nomination and Remuneration Committee operation are determined in the Company Articles and the Nomination and Remuneration Committee By-law passed of the Supervisory Board, which are available on the corporate website.