Report on the Activities of the Supervisory Board of Bank Ochrony Środowiska S.A

Report on the activities of the Supervisory Board of Bank Ochrony Środowiska S.A. in 2020

Warsaw, May 2021

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne Contents:

1. Members of the Supervisory Board in 2020 page 3

2. Number of Supervisory Board meetings held in 2020 page 4

3. Activity and members of Supervisory Board Committees page 5

3.1. Internal Audit Committee page 5

3.2. Remuneration and Nomination Committee page 8

3.3. Ecology Committee page 10

3.4. Risk Committee page 12

3.5. Strategy and Development Committee page 15

4. Self-assessment of the work of the Supervisory Board in page 16 2020 page 19 5. Information on the fulfilment of independence criteria by members of the Supervisory Board

6. Information on the fulfilment of criteria set out in Art. 129.1 page 20 and 129.5 of the Act of 11 May 2017 on Auditors, Audit Companies and Public Supervision by members of the Supervisory Board

7. Report of the Supervisory Board on the assessment of 2020 statements of the Bank and the Capital Group of BOŚ S.A. in page 21 terms of their conformity to books, documents and facts, as well as the Management Board’s request on the coverage of loss recognised as at the end of 2020

Appendixes: 1) Appendix No. 1 - Assessment of the situation of the Bank in 2020, including the assessment of internal control systems, risk management, compliance and internal audit functions; 2) Appendix No. 2 - Report on the application of the Remuneration Policy in 2020, including a decision-making body’s draft assessment whether the Remuneration Policy is in favour of the Bank’s development and security 3) Appendix No. 3 - Assessment of the reasonability of the Bank’s sponsoring, charity or other similar policies or information on the lack of such a policy 4) Appendix No. 4 - Assessment of the application of the “Principles of Corporate Governance for Supervised Institutions” issued by the Polish Financial Supervision Authority on 22 July 2014 by Bank Ochrony Środowiska S.A. and the manner in which Bank Ochrony Środowiska S.A. fulfils its information obligations regarding the application of principles of corporate governance set out in the Rules of Giełda Papierów Wartościowych w Warszawie S.A. and in regulations on current and periodic information provided in 2020 by issuers of securities 2

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne

During the reporting period, the Supervisory Board of Bank Ochrony Środowiska S.A. supervised the Bank’s operations in accordance with legal requirements and the Articles of Association of Bank Ochrony Środowiska S.A.

1. Members of the Supervisory Board in 2020

Members of the Supervisory Board as at 1 January 2020: 1) Wojciech Piotr Wardacki, Chairman of the Supervisory Board 2) Katarzyna Danuta Lewandowska, Vice-chairwoman of the Supervisory Board 3) Andrzej Grzegorz Matysiak, Secretary of the Supervisory Board Members: 4) Iwona Beata Duda 5) Janina Kazimiera Goss 6) Ireneusz Purgacz 7) Radosław Paweł Rasała 8) Piotr Sadownik 9) Paweł Sałek 10) Emil Stanisław Ślązak

During the year, the composition of the Supervisory Board changed as follows: 1. Ms Iwona Beata Duda filed her resignation as member of the Supervisory Board of BOŚ S.A. as of 12 May 2020. 2. Ms Katarzyna Danuta Lewandowska filed her resignation as member of the Supervisory Board of BOŚ S.A. as of 15 June 2020. 3. On 16 June 2020 and then on 15 September 2020 the Supervisory Board delegated Mr Emil Stanisław Ślązak, Member of the Supervisory Board, to temporarily act as a President of the Management Board for the period from 18 June 2020 to 16 September 2020, at the latest, and then for the period from 17 September 2020 to 16 December 2020, at the latest. During the period Mr Emil Stanisław Ślązak, Member of the Supervisory Board, was delegated to act as the President of the Management Board, ended on 9 November 2020, i.e. as of the appointment of Mr Wojciech Józef Hann as the Vice-president of the Management Board of the Bank, who became responsible for the management of the Management Board’s work. 4. On 5 August 2020: 1) the Supervisory Board appointed Mr Ireneusz Purgacz as the Vice- chairman of the Supervisory Board; 2) the Extraordinary Meeting of Shareholders of BOŚ S.A. (called to be held on 5 August 2020 and then continued, after a break, on 17 and 25 August 2020): − dismissed Mr Radosław Paweł Rasała from the Supervisory Board as of 5 August 2020; − appointed Mr Przemysław Bednarski as a member of the Supervisory Board as of 5 August 2020; − appointed Mr Piotr Adam Wróbel as a member of the Supervisory Board as of 5 August 2020;

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − appointed Mr Marcin Adam Jastrzębski as a member of the Supervisory Board as of 25 August 2020; 5. Mr Przemysław Bednarski filed his resignation as member of the Supervisory Board of BOŚ S.A. as of 17 October 2020. 6. The Extraordinary Meeting of Shareholders of BOŚ S.A. (called to be held on 14 October 2020 and then continued, after a break, on 19 October 2020): - dismissed Mr Andrzej Grzegorz Matysiak from the Supervisory Board as of 19 October 2020; - appointed the following members of the Supervisory Board as of 19 October 2020: o Mr Leszek Banaszak; o Mr Robert Krzysztof Czarnecki; o Ms Marzena Koczut. 7. On 28 October 2020, the Supervisory Board appointed Mr Paweł Sałek as Secretary of the Supervisory Board. 8. On 5 November 2020, Mr Piotr Sadownik submitted his resignation as member of the Supervisory Board as of the end of the meeting of the Supervisory Board held on 6 November 2020. 9. On 16 December 2020 the Supervisory Board decided to delegate Ms Marzena Koczut, Member of the Supervisory Board, to temporarily perform duties of a member of the Management Board from 21 December 2020 till the end of the Management Board member qualification process, however at the latest till 21 March 2021.

In connection with the above changes, as at 31 December 2020, the composition of the Supervisory Board was as follows: 1) Wojciech Piotr Wardacki, Chairman of the Supervisory Board 2) Ireneusz Purgacz, Vice-chairman of the Supervisory Board 3) Paweł Sałek, Secretary of the Supervisory Board Members: 4) Leszek Banaszak 5) Robert Krzysztof Czarnecki 6) Janina Goss 7) Marcin Adam Jastrzębski 8) Marzena Koczut (as of 21 December 2020, delegated to temporarily perform duties of a member of the Management Board) 9) Emil Stanisław Ślązak 10) Piotr Adam Wróbel

Events after the balance sheet date: On 10 February 2021, Ms Marzena Koczut resigned from the post of a member of the Supervisory Board of Bank Ochrony Środowiska S.A. as she was appointed as the Vice-president of the Management Board of the Bank.

2. Number of Supervisory Board meetings in 2020

While fulfilling obligations connected with ongoing supervision over the Bank’s activities, in 2020 the Supervisory Board met 14 times, including two-day meetings (i.e. 17 meetings in total), on:

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − 22 January − 4 March − 13 May − 21-28 May (2 days) − 16 June − 29 July − 5 August − 9 -15 September (2 days) − 14-19 October (2 days) − 28 October − 6 November − 25 November − 9 December − 16 December.

Given the state of epidemic, some of Supervisory Board meetings were held in a hybrid way by the use of means of direct remote communication.

In addition, in 2020, the Supervisory Board voted on resolutions outside the meeting 6 times on: 23 March – 1 April 22 – 24 June 13 – 17 August 9 – 14 September 16 – 18 November 23 – 28 December.

3. Activity and members of Supervisory Board Committees

3.1. Internal Audit Committee (IAC)

The Committee operated on the basis of the Rules entitled “Organisation and duties of the Internal Audit Committee” adopted by the Supervisory Board and an annual action plan of the Internal Audit Committee.

Members of the Internal Audit Committee in 2020: − Wojciech Piotr Wardacki, Chairman of the Committee − Emil Stanisław Ślązak1, Vice-chairman of the Committee − Iwona Beata Duda, Member of the Committee (till 12 May 2020) − Katarzyna Danuta Lewandowska, Member of the Committee (till 15 June 2020) − Ireneusz Purgacz, Member of the Committee − Przemysław Bednarski, Member of the Committee (from 5 August to 17 October 2020) − Leszek Banaszak, Member of the Committee (since 6 November 2020).

1 in the period from 18 June to o 15 September and from 17 September to 8 November 2020 Mr E. Ślązak was delegated to temporarily fulfil the obligations of the President of the Management Board of the Bank. 5

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne In 2020 the Internal Audit Committee met on a need-to-meet basis (however at least once a quarter), depending mainly on progress in the fulfilment of the Committee’s action plan and the Bank’s ongoing needs. In 2020 the Committee met 13 times, which was documented in the minutes of the meeting. All Committee meetings in 2020 were held off-line. The 2020 action plan of the Internal Audit Committee was fully implemented. The Committee meetings were attended by the President of the Management Board (in the period from 18 June to 8 November 2020, a member of the Supervisory Board delegated to act as the President of the Management Board), the Head of the Internal Audit Department, the Head of the Compliance Department or persons acting on their behalf, as well as the Head of the Accounting Department, if issues discussed were related to accounting and financial reporting. In addition: − five Committee meetings were attended by representatives of the Auditor, i.e. Mazars Audyt Sp. z o.o.; − three meetings held in May 2020, where AML issues were discussed2, were attended by all members of the Supervisory Board.

In 2020, the Internal Audit Committee issued opinions, requests and recommendations whose purpose was to improve the Bank’s security and reduce the Bank’s risks. Actions arising from the Internal Audit Committee’s recommendations were to be taken by the Management Board and the Head of the Internal Audit Department. The recommendations issued by the Internal Audit Committee in 2020 were met.

In 2020, the Committee carried out its duties set out in legal regulations and recommendations of the Polish Financial Supervision Authority, where duties and competencies of the Committee are defined, on an ongoing basis. In particular, as part of the supervision of reporting and financial auditing, the Committee: − regularly cooperated with the auditor in charge of the audit of financial statements of the Bank and the Capital Group; − reviewed 2019 financial statements of the Bank and the Group and the Management Board’s reports on the activities of the Capital Group in 2019 prepared together with the Management Board’s report on the Bank’s activities, as well as the Bank’s Capital Group’s qualitative and quantitative information on capital adequacy as at 31 December 2019, and recommended that those documents should be accepted by the Supervisory Board; − reviewed the content of statements stemming from the Regulation of the Minister for Finance of 29 February 2018 on current and periodic information published by issuers of securities and conditions for recognising as equivalent information required by the laws of a non-Member State and recommended that those statements should be accepted by the Supervisory Board, including:

2 AML – anti-money laundering 6

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne 1) the Supervisory Board’s statement made in accordance with Art. 70.1.7 and 71.1.7 of the Regulation (the selection of an audit company); 2) the Supervisory Board’s statement made in accordance with Art. 70.1.8 and 71.1.8 of the Regulation (the Internal Audit Committee); 3) the Supervisory Board’s statement made in accordance with Art. 70.1.14 and 71.1.12 of the Regulation (the evaluation of the Bank’s statements).

In addition, among others, the Internal Audit Committee: − reviewed and accepted: o the Information on risks connected with the application of the Bank’s accounting principles and organisation in 2020; o the Internal Audit Committee’s action plan; o the Information on the publication of “Best Practices for Public- Interest Entities Concerning the Rules for Appointment, Composition, and Operations of the Audit Committee” by the Polish Financial Supervision Authority on 24.12.2019; − reviewed and published recommendations concerning the acceptance of, among others, the following documents by the Supervisory Board: o the Information on the implementation of the “Strategy of the Internal Audit Department for the years 2016-2020”, the Information on results of the self-assessment of the Internal Audit Department in 2019, and the Information on the implementation of the Programme of assurance and improvement of work quality by the Internal Audit Department in the years 2019-2021; o the update of the “Annual plan of internal audits for 2020 and the long-term plan for the years 2020-2022”, as well as the “Annual plan of internal audits for 2021 and the long-term plan for the years 2021- 2023”; o the Rules of the Compliance Section in BOŚ S.A., the Action Plan of the Compliance Section of Bank Ochrony Środowiska S.A. in 2020, as well as the annual report of the Compliance Section concerning the performance of its compliance obligations; o the Compliance Policy of Bank Ochrony Środowiska S.A.; o cyclical (quarterly) information on results of internal audits and external inspections conducted at the Bank, as well as quarterly reports on the verification of the implementation of recommendations given after such audits and inspections of the Bank; o cyclical (quarterly) information on compliance risk at Bank Ochrony Środowiska; o the Rules of Internal Control at Bank Ochrony Środowiska S.A.; o the Rules entitled “Organisation and duties of the Internal Audit Committee”; o the annual information on compliance of the Bank’s operations with the provisions of law providing for the performance of activities referred to in Art. 70.2 of the Financial Instruments Trading Act; o cyclical reports on the implementation of the recommendations made by the Polish Financial Supervision Authority as a result of

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne audits and inspections conducted of the Bank, including those given after the BION evaluation3, as well as information on the implementation of the Polish Financial Supervision Authority’s recommendations concerning AML by the Bank; o the Information Policy, which provides for principles of disclosure of qualitative and quantitative information on capital adequacy by Bank Ochrony Środowiska S.A.; o the Compliance Section’s information on the outcome of explanatory proceedings concerning the violation of law and the Bank’s ethical (whistleblowing) procedures and standards; − prepared recommendations for the Supervisory Board concerning the evaluation of the internal audit system of BOŚ S.A. in 2020 on the basis of materials and information obtained from the Management Board, the Internal Audit Department and the Compliance Department. In the scale from 1 to 4 (where 1 is the best score), the effectiveness of the internal audit system was assessed at 3: “Adequate and effective with reservations”. The Supervisory Board accepted the evaluation as recommended by the Committee. The evaluation is justified in Appendix No. 1 hereto.

3.2. Remuneration and Nomination Committee (RNC)

The Remuneration and Nomination Committee (former Remuneration Committee) has been operating in the Bank since 2012. The Remuneration and Nomination Committee is responsible in particular for: − supporting the Supervisory Board in the development and implementation of the remuneration policy applicable to the Bank’s management staff, as well as in the assessment of suitability of candidates for Management Board members and of Management Board members, as well as the collective assessment of suitability of the Management Board; − supporting the Supervisory Board in the assessment of suitability of candidates for members of the Internal Audit Committee and of members of the Internal Audit Committee, as well as the collective assessment of suitability of the Internal Audit Committee; − supporting the Meeting of Shareholders in the assessment of suitability of candidates for members of the Supervisory Board and of members of the Supervisory Board, as well as the collective assessment of suitability of the Supervisory Board, and in the development of the applicable assessment policy.

Members of the Remuneration and Nomination Committee in 2020: − Piotr Sadownik, Chairman (till 14 October 2020) and then Member of the Committee (till 6 November 2020) − Ireneusz Purgacz, Vice-chairman (till 14 October 2020) and then Chairman of the Committee (since 14 October 2020) − Piotr Adam Wróbel, Vice-chairman of the Committee (since 14 October 2020)

3 BION - a supervisory evaluation conducted by the Polish Financial Supervision Authority by the use of the Methodology of Supervisory Review and Assessment of Commercial, Associating and Cooperative Banks

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − Przemysław Bednarski, Member of the Committee (from 14 to 17 October 2020) − Janina Kazimiera Goss, Member of the Committee − Robert Krzysztof Czarnecki, Member of the Committee (since 28 October 2020)

The Committee met on a need-to-meet basis, depending mainly on progress in the fulfilment of the Committee’s action plan and the Bank’s needs. In 2020 the Committee met 16 times off-line. In addition, the Committee made decisions outside the meeting four times, which was documented in the minutes.

Subjects discussed during the Committee’s meetings focused in particular on the following issues: − the qualification of candidates for members of the Management Board; − the assessment of suitability of members of the Supervisory Board and members of the Management Board based on Art. 22aa of the Banking Law and the Guidelines of the European Banking Authority and the European Securities and Markets Authority of 21 March 2018 on suitability assessments of members of the management body and key function holders; − variable remuneration for the Bank’s management staff having an important impact on the Bank’s risk profile, within the meaning of the Regulation of the Minister of Development and Finance of 6 March 2017 on the risk management system and internal control system, remuneration policy and detailed procedure for measuring internal capital in banks, including the suggestion of goals for particular Management Board members.

In the reporting period the Committee issued opinions, requests and recommendations concerning the remuneration policy and the suitability assessment policy. The responsibility for the implementation of actions arising from the opinions, requests and recommendations lied with the Meeting of Shareholders or the Supervisory Board or the Management Board of the Bank. All opinions, requests and recommendations issued in 2020 were taken into consideration and implemented.

In 2020, the Committee in particular: − issued its opinion on: the “Policy of the assessment of suitability of candidates for members of the Supervisory Board, members of the Supervisory Board and the Supervisory Board of Bank Ochrony Środowiska S.A.” and the “Remuneration Policy for Members of the Supervisory Board and the Management Board of Bank Ochrony Środowiska S.A.”; − developed: o a proposal concerning the primary assessment of individual suitability of candidates for members of the Supervisory Board and the assessment of collective suitability of the Supervisory Board (for the Meeting of Shareholders); o a proposal concerning the assessment of suitability of candidates for members of the Internal Audit Committee and the assessment of collective suitability of the Internal Audit Committee (for the Supervisory Board);

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − reviewed and issued recommendations for the Supervisory Board with regard to, among others: o the “Policy of the assessment of suitability of candidates for members of the Management Board, members of the Management Board and the Management Board of Bank Ochrony Środowiska S.A.”; o principles, methodology and deadlines applicable to the qualification of candidates for the President of the Management Board, the Vice- president being the first deputy to the President of the Management Board; Vice-president of the Management Board and a Member of the Management Board of Bank Ochrony Środowiska S.A., as well as the performance of the first stage of qualification procedures applicable to individual functions in the Management Board, including the presentation of a proposal of the primary and secondary assessment of individual suitability of candidates for particular functions in the Management Board of the Bank and the assessment of collective suitability of the Management Board of the Bank; o conditions of management services, including an amount of fixed remuneration payable to newly appointed Members of the Management Board of the Bank; o the assessment of 2019 management goals, goals of the supervised area and individual goals of particular Members of the Management Board, as well as the definition of an amount, if any, and payment of variable remuneration for 2019, the definition of an amount payable in the following years, and the definition and payment of the first tranche of deferred variable remuneration for 2018, if any; o management goals, goals of the supervised area and individual goals of particular Members of the Management Board for 2020; − published its opinion on: o the updated of the Remuneration Policy for the Management Staff of Bank Ochrony Środowiska S.A. and a draft management service agreement (in order to incorporate the position of the Office of the Polish Financial Supervision Authority on a conservative approach to the payment of variable remuneration); draft changes in the List of the Management Staff of BOŚ S.A. that has an impact on the Bank’s risk profile (Risk Takers); and published its opinion on the suggested amount of variable remuneration for such persons in 2019; o results of the analysis of the significance of impact of individual subsidiaries on the Bank’s risk profile as at 30.06.2020 in accordance with the Remuneration Policy for the Management Staff of the Capital Group of BOŚ S.A.; − in accordance with the “Principles of Corporate Governance for Supervised Institutions” issued by the Polish Financial Supervision Authority”, prepared the “Assessment of the Application of the Remuneration Policy of BOŚ S.A. in 2020” for the Supervisory Board, including a decision-making body’s draft assessment whether the Remuneration Policy of BOŚ S.A. is in favour of the Bank’s development and security. The information on the assessment is attached hereto as Appendix No. 2.

3.3. Ecology Committee (EC)

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne The Ecology Committee was established by the Supervisory Board to support the Supervisory Board’s actions connected with the development of the Bank’s pro-environmental activities. Key responsibilities of the Ecology Committee are set out in the Rules adopted by the Supervisory Board and include: − commenting and preparing recommendations (for the Supervisory Board) on quarterly information on the Bank’s pro-environmental activities and initiatives, as well as goals of pro-environmental project funding by the Bank; − supporting the Bank’s cooperation with the National and Voivodship Environmental Protection and Water Management Funds and other environment protection organisations; − preparing recommendations and opinions on the development of the offer of pro-environmental bank products for the Supervisory Board and the Management Board of the Bank.

Members of the Ecology Committee in 2020: − Andrzej Grzegorz Matysiak, Chairman of the Committee (till 19 October 2020) − Paweł Sałek, Vice-chairman (till 28 October 2020) and then Chairman of the Committee (since 28 October 2020) − Marzena Koczut, Vice-chairwoman of the Committee (from 28 October to 21 December 2020) − Janina Kazimiera Goss, Member of the Committee − Radosław Paweł Rasała, Member of the Committee (till 5 August 2020) − Przemysław Bednarski, Member of the Committee (from 5 August to 17 October 2020) − Marcin Adam Jastrzębski, Member of the Committee (since 9 September 2020).

The Committee met on a need-to-meet basis, depending mainly on progress in the fulfilment of the Committee’s action plan. In 2020 the Committee met 4 times, which was documented in the minutes of the meeting.

Apart from Committee members, the meetings were attended by representatives of the Management Board of the Bank and representatives of the management staff, including in particular the Main Ecologist of the Bank and employees of the ecology area.

In 2020, the issues discussed during the meetings of the Committee included in particular quarterly reports on the Bank’s pro-environmental activities, including co-operation with the National and Voivodship Environmental Protection and Water Management Funds. The Ecology Committee regularly reviewed such reports and recommended that the Supervisory Board should accept them.

The most important issues connected with the development of the Bank’s pro- environmental activity, which were discussed during the meetings of the Committee, included, without limitation: 1) the activation of cooperation with the National Environmental Protection and Water Management Fund (NFOŚiGW) and Voivodship Environmental Protection and Water Management Funds (WFOŚiGW), including:

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − the Bank’s participation in the implementation of the Government’s Clean Air Programme, as well as other programmes offered by the Fund, like e-mobility, My Electricity, My Water (the Ecology Committee pointed out, among others, that the Bank’s cooperation with the National Fund should be based on programmes providing for the combination of financial resources of the Bank and the Fund and indicated possible forms of support for entities of poorer financial standing through solutions based on capital and guarantees provided by the National Environmental Protection and Water Management Fund); − the agreement on and implementation of a consistent complementary operating strategy of the National Environmental Protection and Water Management Fund, Voivodship Environmental Protection and Water Management Funds and BOŚ for the purpose of the effective use of the Bank in the transmission of financial resources allocated to pro-environmental projects; − the necessity to reactivate the Bank’s cooperation with Voivodship Environmental Protection and Water Management Funds. It was pointed out that the fact that the Bank did not offer preferential loans for the Voivodship Funds, the development of local pro-environmental projects was more difficult; 2) the presentation of a document entitled “Proposed development goals of cooperation in joint project funding”, which indicates key areas of pro- environmental activities (renewable energy sources, heat engineering and actions aimed at adaptation to climate changes in the field of water management), to Members of the Ecology Committee. Those actions were included in the newly prepared product package called “Climate+” for retail customers; 3) the presentation of results of the implementation of the “BOŚmy Zieloni” project in 2019/2020, including the preparation of the environmental competence development programme and environmental e-learning for all employees, the acquisition of a “Green Office” certificate for the Bank’s Head Office, the establishment of the ECO Library, the organisation of a game to develop a pro-environmental approach among employees; 4) strengthening the ecology area in the Bank’s structure. At a request made by the Ecology Committee, the Management Board decided to establish a separate Ecology and Climate Division. The Division is responsible, in particular, for defining directions of the Bank’s environmental activities in accordance with the principle of sustainable development, promoting pro- environmental knowledge and actions on the basis of reliable data, acquiring funding and cooperating with entities donating funds for environmental protection, as well as supporting business through direct cooperation with customers; 5) improving lending procedures for photovoltaics. The Bank’s system approach to PV installation loans for retail customers, financing auction projects of up to 1 MW and so-called umbrella financing were positively assessed.

3.4. Risk Committee (RC)

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne The Risk Committee supports the Supervisory Board in overseeing the risk area by taking actions stipulated in the Banking Law, the Articles of Association of the Bank and the Supervisory Board’s resolutions.

Members of the Committee in 2020: − Emil Stanisław Ślązak4, Chairman of the Committee, − Iwona Beata Duda, Vice-chairwoman of the Committee (till 12 May 2020) − Andrzej Grzegorz Matysiak, Vice-chairman of the Committee (from 16 June to 19 October 2020) − Leszek Banaszak, Vice-chairman of the Committee (since 28 October 2020) − Katarzyna Danuta Lewandowska, Member of the Committee (till 15 June 2020) − Marzena Koczut, Member of the Committee (from 28 October to 21 December 2020) − Marcin Adam Jastrzębski, Member of the Committee (from 9 September to 28 October 2020) − Radosław Paweł Rasała, Member of the Committee (till 5 August 2020) − Wojciech Piotr Wardacki, Member of the Committee − Piotr Adam Wróbel, Member of the Committee (since 5 August 2020).

In 2020 the Risk Committee met on a need-to-meet basis, depending mainly on progress in the fulfilment of the Committee’s action plan and the Bank’s needs.

In 2020 the Risk Committee met 9 times, which was documented in the minutes of the meeting.

The Committee meetings were attended by: 1) Members of the Management Board of the Bank, 2) Head of business units of the Bank’s Head Office in the Risk Division and, as necessary, Heads of business units of the Bank’s Head Office in other divisions, 3) Head of the Internal Audit Department and Head of the Compliance Department or their substitutes.

The Risk Committee is mainly responsible for supporting the Bank’s Supervisory Board in overseeing the risk area. To fulfil its major duties, the Committee in particular: 1) comments, on an overall basis, on the Bank’s current and future readiness take risks, including: a) the acceptance of periodical reports/information prepared by the Management Board on key events having an impact on the Bank’s risks and on significant changes in the risk management process and system; b) the acceptance of periodical statements/reports/information prepared by the Management Board on the level of risks, an increased risk exposure, methods of risk identification and monitoring, as well as actions taken to reduce risks;

4 in the period from 18 June to 15 September and from 17 September to 8 November 2020, Mr E. Ślązak was delegated to temporarily act as the President of the Management Board of the Bank. 13

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne 2) comments on the Bank’s risk management strategy prepared by the Management Board and on information on the implementation of that strategy, as presented by the Management Board; 3) supports the Supervisory Board in supervising the implementation of the risk management strategy in the Bank’s operations by senior management; 4) verifies whether the prices of liabilities and assets offered to customers fully reflect the Bank’s business model and risk strategy, and - should the prices fail to duly reflect the types of risk in accordance with those model and strategy, presents the Management Board of the Bank with proposals aiming to ensure that the prices of liabilities and assets are adequate to those risks.

In 2020, the Committee among others: 1) reviewed and issued recommendations for the Supervisory Board with regard to materials and documents concerning risk management at the Bank, including in particular recommendations on: − quarterly “Bank Risks” reports; − regulations on the management of particular types of risks, including in particular: − Bank risk management strategy of BOŚ S.A.; − Credit risk management policy of BOŚ S.A.; − Concentration risk management policy of BOŚ S.A.; − Liquidity risk management policy of BOŚ S.A.; − Market risk in trade book management policy of BOŚ S.A.; − Interest rate risk in banking book management policy of BOŚ S.A.; − Total internal quantity limits of financial risks at BOŚ S.A.; − Long-term plan for acquiring and maintaining stable external financing of BOŚ S.A. in the years 2020-2021 − Liquidity Strategy of BOŚ S.A. in the years 2020-2021; − Operating risk management policy of BOŚ S.A.; − Risk of models management policy of BOŚ S.A.; − Exposure-in-default management policy of BOŚ S.A. and Operating plan for the management of exposures that are in default or are restructured at BOŚ S.A., including the Self-assessment for the purpose of the development of a policy applicable to the management of exposures that are in default or are restructured at BOŚ S.A. as at 30.09.2020; 2) reviewed and issued recommendations for the Supervisory Board with regard to issued concerning capital adequacy and internal capital, including in particular: − Report on the ICAAP review in the Capital Group of BOŚ S.A. for 2020; − Capital and ICAAP management policy of BOŚ S.A.; − Capital plan for 2020; 3) reviewed and issued recommendations for the Supervisory Board with regard to results of the review of the assessment of adequacy of ILAAP liquidity resources; 4) reviewed the information on: − actions implemented at the Bank under the Contingency plan applicable to credit risk in case of negative changes in macroeconomic factors caused by the COVID-19 epidemic;

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − actions taken in relation to customers from the wind farm portfolio; − key credit exposures that have an impact on results due to impairment loss; − selected credit exposures that are managed by the Restructuring and Debt Collection Department; 5) based on materials and information obtained from the Management Board of the Bank, prepared recommendations for the Supervisory Board concerning the evaluation of the assessment of the risk management system of BOŚ S.A. in 2020. In the scale of 1 to 4 (where 1 is the best score), the system was assessed at 3: adequate and effective with reservations (the score is one level lower than in 2019). The Supervisory Board accepted the assessment as recommended by the Committee. The assessment is justified in Appendix No. 1 hereto.

3.5. Strategy and Development Committee (SDC)

The Strategy and Development Committee of the Bank was established on the basis of the Resolution No. 64/2020 of the Supervisory Board of 6 November 2020.

The Committee supports the Supervisory Board and the Management Board in defining the directions of the Bank’s further development and for that purpose: − monitors a schedule of preparations of the Bank’s operating strategies; − monitors the implementation of Bank’s operating strategies; − presents the Supervisory Board with the Committee’s opinion on desired changes in directions of further strategic development of the Bank and the Capital Group; − comments on the following information presented to the Supervisory Board: o the operating strategy of the Bank and the Capital Group; o the achievement of strategic objectives, as part of the annual reporting process; o premises for updates in the Bank’s operating strategy; − at the Supervisory Board’s request, performs other duties that support supervision over the Bank’s operating strategy.

Members of the Committee in 2020: − Marcin Adam Jastrzębski, Chairman of the Committee − Robert Krzysztof Czarnecki, Vice-chairman of the Committee − Marzena Koczut, Member of the Committee (till 21 December 2020) − Piotr Adam Wróbel, Member of the Committee.

In 2020 the Strategy and Development Committee met twice and as a result of those meetings: − draft rules for the Committee were developed, including the definition of the character and role of the Committee, as well as the scope of responsibilities and operating methodology. The rules were adopted by the Supervisory Board; − The Committee members were familiarised in detail with:

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne o strategic planning rules applicable at the Bank, which describe a strategy preparation process (including long-term business goals and financial aspirations), as well as a strategy implementation and monitoring process; o the Bank’s experience in the development of the Strategy and IT tools and software used to support the implementation of the Strategy; o a process of preparation to updates in the existing “Framework Development Strategy of Bank Ochrony Środowiska S.A. for the years 2016-2020” for the following period.

Apart from Committee members, the meetings were attended by the President of the Management Board and the Vice President – First Deputy of the President of the Management Board.

4. Self-assessment of the work of the Supervisory Board of Bank Ochrony Środowiska S.A. in 2020

Pursuant to the “Best Practice for GPW Listed Companies”, the Supervisory Board presents the assessment of its work in 2020 to the Meeting of Shareholders.

In 2020, the Supervisory Board met 14 times, including 3 two-day meetings, i.e. 17 times in total, and voted 6 times outside the meeting, as a result of which the requested resolutions were passed.

The number of Supervisory Board meetings significantly exceeded the applicable minimum stemming both from § 19.2 of the Articles of Association of the Bank (“Supervisory Board meetings shall be convened by its chairman as necessary but no less frequently than once in a quarter”), as well as Art. 389 § 3 of the Commercial Companies Code (“The supervisory board shall be convened as necessary, however no less frequently than three times in a financial year”).

In 2020 the Supervisory Board focused on issues stipulated in the Supervisory Board’s framework action plan and issues arising from the Bank’s ongoing operations.

The Supervisory Board performed its duties on a timely basis and with due diligence. The Supervisory Board made decisions subject to a prior detailed review of and hearing out the Management Board’s arguments.

To ensure the versatility and diversity of that body, persons appointed as Members of the Supervisory Board represented/represent various education and skills and have high qualifications and rich professional experience.

Each of Members of the Supervisory Board was interested in the Bank’s situation on an ongoing basis, which resulted, not only, from their functions, but their education, experience and interests, as well. Some important observations and opinions were reflected in the minutes of the Supervisory Board meetings.

All Members of the Supervisory Board performed their functions in an active manner, showing the necessary level of involvement in work of the whole

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne Supervisory Board. The Members of the Supervisory Board spend the necessary amount of time to perform their duties arising from their membership to the supervisory authority, including committees of the Supervisory Board (each Member of the Supervisory Board took/takes part in at least one Committee).

As a rule, all Members of the Supervisory Board took part in the Supervisory Board meetings. Rare cases of absence were always excused.

Thanks to the activeness and involvement of particular Members, the whole Supervisory Board, as a collective supervisory authority, was able to duly perform its duties.

The Supervisory Board duly fulfilled its code and statutory obligations connected with permanent supervision over the Bank. That included, in particular, an ongoing monitoring of: − progress in the implementation of the Resolution Programme and the Bank’s present financial standing. That major issue of the Bank was discussed at each meeting. The Supervisory Board reviewed cyclical (monthly) information on financial results recorded by the Bank, both in comparison with the Resolution Programme, as well as results recorded by other banks in the same sector. The Supervisory Board pointed out in particular that the Bank should take more active and effective actions aiming at the growth of the Bank’s revenues, including the growth of balances and scale of its lending business; − progress in the implementation of actions connected with the improvement of the Bank’s operating profitability and the implementation of audit AML recommendations of the Polish Financial Supervision Authority (approval of monthly AML reports prepared by the Polish Financial Supervision Authority); − the Bank’s involvement in wind farm funding (as a result of the Bank’s involvement in that sector, the concentration risk increased and the Bank had to recognised additional write-offs and recorded a decrease in its financial result as at the end of 2016). As expected by the Supervisory Board, the Management Board cyclically presented information on the wind farm portfolio and the situation of individual farms, as well as information concerning risk management in that area, at the Supervisory Board meetings. The actions taken by the Bank improve the structure of the wind farm portfolio, reduce the balance of such loans and the share of the wind farm portfolio in the Bank’s total credit portfolio; − the quality of management of particular bank risks. The above detailed information was reviewed both by the Supervisory Board and the Risk Committee on a cyclical (quarterly) basis; − results of internal controls and audits, as well as results of internal controls. Related reports were cyclically reviewed both by the Supervisory Board and the Internal Audit Committee; − the Bank’s pro-environmental activity, including environmental projects funding, in particular in cooperation with the National and Voivodship Environmental Protection and Water Management Funds, as the implementation of BOŚ S.A.’s statutory mission. The detailed reports were

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne cyclically reviewed both by the Supervisory Board and the Ecology Committee.

Apart from the regular assessment of the Bank’s situation after the end of consecutive months and quarters, including the above actions, the most important issues handled by the Supervisory Board in 2020 included: − actions taken to establish the Management Board of the new term, including, in particular, necessary qualification procedures and a request filed with the Polish Financial Supervision Authority to obtain a consent for the appointment of the President of the Management Board; − the review and adoption of resolutions on issues coming within the sole responsibilities of the Supervisory Board, including in particular: − the definition of management goals, goals of supervised areas and individual goals of particular Members of the Management Board; − the development of the consolidated text of the Articles of Association of the Bank; − the adoption of the “Policy of the assessment of suitability of candidates for members of the Management Board, members of the Management Board and the Management Board of Bank Ochrony Środowiska S.A.”; − the review and evaluation of financial statements of the Bank and the Capital Group of BOŚ S.A. for 2019 and the Management Board’s reports on the activities of the Bank and the Capital Group of BOŚ S.A. in 2019, as well as the review of and opinion on materials addressed to the Annual Meeting of Shareholders of BOŚ S.A., which was held on 17 June 2020; − the review and approval of a number of documents submitted to the Supervisory Board by the Management Board, including in particular: − The bank risk management strategy of BOŚ S.A. and policies applicable to the management of particular types of risks, including: “Concentration Risk Management Policy”, “Credit Risk Management Policy”, “Liquidity Risk Management Policy”, Market Risk in Trade Book Management Policy”, Interest Rate Risk in Bank Book Management Policy”, “Total internal quantity limits of financial risks at BOŚ S.A.”; − “Liquidity Strategy of BOŚ S.A. in the years 2020-2021” and “Long-term plan for acquiring and maintaining stable external financing of BOŚ S.A. in the years 2020-2021”; − “Capital Plan for 2020”; − “Information Policy - Principles of disclosure of qualitative and quantitative information on capital adequacy by Bank Ochrony Środowiska S.A.”; − “Capital and ICAAP Management Policy of Bank Ochrony Środowiska S.A.”; − “Exposure-in-default Management Policy of BOŚ S.A.”; − “Operating Risk Management Policy of BOŚ S.A.”; − “Risk of Models Management Policy of BOŚ S.A.”; − “Investment Strategy of BOŚ S.A.”; − “Compliance Policy of BOŚ S.A.”.

In addition, in accordance with requirements stemming from the Commercial Companies Code and the Principles of Corporate Governance for Supervised Institutions” published by the Polish Financial Supervision Authority, the Best Practice of GPW Listed Companies and the State-owned Property Management Act, the Supervisory Board:

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − assessed the Bank’s situation in 2020, including the assessment of internal control systems, risk management, compliance management and internal audit functions (Appendix No. 1 hereto); − assessed the application of the Remuneration Policy in 2020, including a decision-making body’s draft assessment whether the Remuneration Policy, in order to identify whether the Remuneration Policy of BOŚ S.A. is in favour of the development and security of the Bank’s operations (Appendix No. 2 hereto); − assess the reasonability of the Bank’s sponsoring, charity or other similar policies (Appendix No. 3 hereto); − assessed the application of the “Principles of Corporate Governance for Supervised Institutions” issued by the Polish Financial Supervision Authority on 22 July 2014 by Bank Ochrony Środowiska S.A. by the Bank and the manner in which Bank Ochrony Środowiska S.A. fulfils its information obligations regarding the application of principles of corporate governance set out in the Rules of Giełda Papierów Wartościowych w Warszawie S.A. and in regulations on current and periodic information provided in 2020 by issuers of securities (Appendix No. 4 hereto); − reviewed and commented on the report on expenses for representation, legal, marketing, PR, social communication, and management consultancy services in 2020, which was presented to the Annual Meeting of Shareholders by the Management Board of the Bank; − assessed the Management Board’s reports on the activities of the Capital Group of BOŚ S.A. in 2020, which was prepared together with the Management Board’s report on the activities of the Bank, as well as financial statements of the Bank and the Capital Group of BOŚ S.A. in 2020 in terms of their compliance with books, documents and facts. For that purpose the Supervisory Board made a statement which was published on 29 April 2021, together with the Annual Report of the Bank and the Capital Group for 2020.

5. Information on the fulfilment of independence criteria by Members of the Supervisory Board in 2020

Members of the Supervisory Board of BOŚ S.A. in 2020: − Leszek Banaszak (since 19 October 2020) − Przemysław Bednarski (from 5 August to 17 October 2020) − Robert Krzysztof Czarnecki (since 19 October 2020) − Iwona Beata Duda (till 12 May 2020) − Janina Kazimiera Goss − Marcin Adam Jastrzębski (since 25 August 2020) − Marzena Koczut5 (from 19 October to 21 December 2020); − Katarzyna Danuta Lewandowska (till 15 June 2020) − Andrzej Grzegorz Matysiak (till 19 October 2020) − Ireneusz Purgacz − Radosław Paweł Rasała (till 5 August 2020) − Piotr Sadownik (till 6 November 2020) − Paweł Sałek − Emil Stanisław Ślązak6

5 as of 21.12.2020 Ms M. Koczut was delegated to temporarily act as a Member of the Management Board. 19

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − Wojciech Piotr Wardacki − Piotr Adam Wróbel (since 5 August 2020).

The Supervisory Board, in accordance with: − the “Best Practice for GPW Listed Companies” (based on which the Supervisory Board assesses whether there are any relationships or circumstances that are likely to have an impact on a given Supervisory Board Member meeting the independence criteria”), as adopted by the Bank; − the European Commission Recommendation on the role of non-executive directors or directors being members of a supervisory board of listed companies and commissions of the supervisory board (based on which the Supervisory Board should identify whether Supervisory Board Members are independent); − the Rules of the Supervisory Board of BOŚ S.A.; assessed whether there are any relationships or circumstances that are likely to have an impact on particular Supervisory Board members meeting the defined independence criteria.

Based on statements made by Members of the Supervisory Board and the assessment, the Supervisory Board identified the independence status of Supervisory Board Members and decided that as at 31 December 2020 the following Members of the Supervisory Board: − met the independence criteria: Wojciech Piotr Wardacki, Ireneusz Purgacz, Paweł Sałek, Leszek Banaszak, Janina Kazimiera Goss, Marcin Adam Jastrzębski, Emil Stanisław Ślązak, − did not meet the independence criteria due to professional relationships with a shareholder holding at least 5% of the total number of votes held by the shareholders of BOŚ S.A.: Robert Krzysztof Czarnecki, Marzena Koczut, Andrzej Grzegorz Matysiak, Piotr Adam Wróbel.

The independence criteria set out in the Act of 11 May 2017 on Auditors, Audit Firms and Public Supervision were met by all Supervisory Board members who were also members of the Internal Audit Committee.

6. Information on the fulfilment of criteria set out in Art. 129.1 and 129.5 of the Act of 11 May 2017 on Auditors, Audit Companies and Public Supervision (Journal of Laws No. 2020.1415) by members of the Supervisory Board

The Act of 11 May 2017 on Auditors, Audit Companies and Public Supervision enforced detailed requirements applicable to those members of the Supervisory Board that are also members of the Internal Audit Committee:

1) under Art. 129.1 of the Act, at least one member of the Internal Audit Committee must have knowledge and skills in accounting or an audit of financial statements.

6 in the period from 18 June to 15 September and from 17 September to 8 November 2020, Mr E. Ślązak was delegated to temporarily act as the President of the Management Board of the Bank.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne Based on statements made by members of the Internal Audit Committee, the Supervisory Board confirms that the Bank meets the above requirement;

2) under Art. 129.5 of the Act, members of the Internal Audit Committee must have knowledge and skills in banking, provided that the condition is deemed to be met if at least one member of the Internal Audit Committee has knowledge and skills in banking or individual members have knowledge and skills in banking to the defined extent. Based on statements made by members of the Internal Audit Committee, the Supervisory Board confirms that the Bank meets the above requirement.

7. Supervisory Board’s report on the assessment of: − 2020 statements of the Bank and the Capital Group of BOŚ S.A. in terms of their conformity to books, documents and facts; − the Management Board’s request on the coverage of the Bank’s loss recognised as at the end of 2020.

Pursuant to Article 382 § 3 of the Commercial Companies Code and § 43.1 and 43.2 of the Articles of Association of the Bank, the Supervisory Board of Bank Ochrony Środowiska S.A. assessed the following statements in terms of their conformity to books, documents and facts: 1) annual consolidated financial statements of the Capital Group of Bank Ochrony Środowiska S.A. for the year ended on 31 December 2020 (consolidated financial statements); 2) annual financial statements of Bank Ochrony Środowiska S.A. for the year ended on 31 December 2020 (individual financial statements); 3) the Management Board’s report on the activities of the Capital Group of Bank Ochrony Środowiska S.A. in 2020, which was prepared together with the Management Board’s report on the activities of Bank Ochrony Środowiska S.A.

The Supervisory Board confirmed that those statements were in conformity to the books, documents and facts. The Supervisory based the assessment on: − the content and data disclosed in the statements presented to the Supervisory Board by the Management Board; − the auditor’s report on the audit of consolidated financial statements and individual financial statements, as well as on the basis of an additional report of the audit company prepared for the Internal Audit Committee; − meetings with representatives of the audit company, including the key auditor; − the Internal Audit Committee’s positive recommendations concerning the audited financial statements referred to in Sections 1 and 2 above.

The consolidated financial statements and individual financial statements were also confirmed as accurate by the authorised independent auditor (unqualified auditor report).

The Supervisory Board’s statement on the assessment was published in the annual report on 29 April 2021 in accordance with § 70.1.14 and § 71.1.12 of Regulation of the Minister for Finance dated 29 March 2018 on current and

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne periodic information published by issuers of securities and conditions for recognising as equivalent information required by the laws of a non-Member State and § 20.11.9 of the Articles of Association of Bank Ochrony Środowiska S.A.

In addition, the Supervisory Board issued its positive opinion on the Management Board’s request concerning the coverage of the Bank’s loss of 2020 amounting to PLN 310,297,835.40 (three hundred ten million two hundred ninety seven thousand and eight hundred thirty five zloty and forty grosz) upon the prior review of the request at the meeting on 26 May 2021. As requested by the Management Board, the loss recorded in 2020 will be covered with resources coming from the statutory capital reserve.

The Supervisory Board issued a positive opinion on the draft resolution of the Meeting of Shareholders concerning the above issue and recommended that the Meeting of Shareholders should adopt that resolution.

********

The Supervisory Board hereby requests the Meeting of Shareholders to approve this report.

For the Supervisory Board of Bank Ochrony Środowiska S.A. Chairman of the Supervisory Board

Dr Wojciech Wardacki

Warsaw, ... May 2021

Appendix No. 1 to the Report on the activities of the Supervisory Board of Bank Ochrony Środowiska S.A. in 2020

Assessment of the situation of the Bank in 2020, including the assessment of internal control systems, risk management, compliance and internal audit functions.

The Supervisory prepared the assessment on the basis of principles of corporate governance set out in the “Best Practice of GPW Listed Companies 2016”.

The Supervisory Board assessed the Bank’s situation in 2020 on the basis of:

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − present information on the Bank’s economic and financial standing, which was reviewed during the year at the Supervisory Board meetings; − the compliance section’s reports and the internal audit section’s reports on results of audits and controls, as well as on the basis of other materials and reports concerning the Bank’s operations, including, in particular, those concerning risk management; − the analysis of the Management Board’s report on the activities of the Capital Group of Bank Ochrony Środowiska S.A. in 2020, which was prepared together with the Management Board’s report on the Bank’s activities; − the analysis of annual financial statements of BOŚ S.A. for the year ended on 31 December 2020 and annual consolidated financial statements of the Capital Group of BOŚ S.A. for the year ended 31 December 2020; − the independent auditor report on the audit of the aforementioned 2020 financial statements and the auditor’s information on the course and outcome of the audit.

1. Brief assessment of the situation of the Bank in 2020

Having assessed the situation of the Bank and the Capital Group of BOŚ S.A. in 2020, the Supervisory Board hereby turns your attention to the following facts: 1) in 2020 the Group of BOŚ S.A. recorded a net loss of PLN 306.9 million in comparison with a net profit of PLN 72.0 million in 2019 and, in turn, the Bank recorded a net loss of PLN 310.3 million in comparison with a profit of PLN 72.1 million in 2019. The reduction in the financial result was mainly caused by the establishment of provisions for legal risks related to FX mortgage loans. In connection with an increase in the number of litigations, the cost of legal risk in 2020 amounted PLN 353 million in comparison with PLN 21.2 million in 2019 (total provision for risk connected with FX-based mortgage loans was, as at the end of 2020, PLN 399 million, including PLN 376 million as a provision for litigations and claims connected with legal risk, and PLN 23 million as additional impairments due to an expected credit loss). The provision covers the cost connected with scenarios for solving the problem of mortgage loans expressed in foreign currencies, including agreements with customers and unfavourable court judgements. The Bank’s results were also reduced by the COVID-19 pandemic, which had a negative impact on the financial results of the Bank and the Group, in particular due to: − a significant decrease in interest rates, which contributed to a decrease in interest revenues of the Group of BOŚ S.A. by PLN 49 million in comparison with 2019 and interest revenues of the Bank by PLN 46 million (i.e. by approximately 11%). Interest and similar revenues decreased by over 17% in comparison with 2019 and interest costs decreased by around 30%. The decrease in interest revenues and costs occurred mainly as a result of the decision of the Monetary Policy Council to reduce interest rates; − an additional impairment of loans, which was recognised under the Group’s financial result (mainly due to higher impairment in the corporate customer division); in that item the Group recorded -163.8

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne million zloty and the Bank recorded -165.7 million zloty in comparison with -100.8 million zloty in 2019; 2) general and administration expenses of the Group increased by PLN 15 million in comparison with 2019 (i.e. by 4.2%). Such an increase of those expenses was recorded mainly in the Brokerage House of BOŚ S.A. and was connected with an increase in remunerations in connection with the greatest ever results of the Company. General and administrative costs of the Bank did not change significantly in comparison with 2019. The Bank recorded an increase in the cost of employee benefits by PLN 2 million (i.e. by 1.7%), mainly due to provisions for annual leaves that were not used due to the pandemic. In addition, the Bank’s tangible costs increased by 8.5% (up to PLN 81.3 million), which was mainly caused by the indexation of service agreements, the relocation of a server room, as well as costs of a regulatory and business ALM review, and an increase in the costs of legal services. A contribution to the Bank Guarantee Fund, including a contribution to the compulsory restructuring fund, was PLN 35.4 million and was by PLN 4.4 million below the level of 2019; 3) key profitability and operational efficiency ratios of the Bank deteriorated in 2020 in comparison with 2019; ROE dropped from 3.8% to -15.3%%, ROA dropped from 0.4% to -1.6%, and a costs/income ratio was 60% and increased in relation to 2019 by 5.1 pp (mainly due to a drop in interest revenues). Interest margin on total assets decreased to 1.9% in comparison with 2.3% in 2019, which mainly resulted from a reduction of market interest rates; 4) as at the end of December 2020, receivables subject to impairment constituted 12.9% of the whole portfolio measured at amortised cost (2019: 12.2%); 5) BOŚ S.A.’s share in the sector of commercial banks as at the end of 2020 did not change in comparison with the previous year and was as follows: − 0.9% of the balance-sheet total; − 1.2% of deposits of the non-financial sector; − 0.9% of loans and borrowings; 6) in April 2020, Fitch Ratings Ltd. confirmed the rating and changed the Bank’s perspective from stable to negative and reduced the rating of subordinated bonds to BB from BB+. In November 2020, the Agency confirmed the rating and maintained the Bank’s perspective.

The Supervisory Board points out that:

1) despite of the unfavourable conditions, including the establishment of significant provisions for risk connected with FX-based mortgage loans, as at the end of 2020 the capital adequacy of the BOŚ Group was above the level recommended by the Polish Financial Supervision Authority, the Tier 1 capital ratio was 13.09% (2019: 14.19%), and the TCR was 14.86% (2019: 16.39%). For the Bank, those ratios were as follows: Tier I: 13.17% (2019: 14.3%), TCR: 14.98% (2019: 16.58%), while minimum capital ratios recommended by the Polish Financial Supervision Authority are 8.88% for Tier capital and 11.01% for TCR; The above means that both the Bank and the Capital Group companies maintained their safety indicators at a level exceeding the minimum 24

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne regulatory levels and did not record a significant impact of the COVID-19 pandemic on their liquidity and capital adequacy; 2) Operating in 2020 in the conditions of the COVID-19 pandemic, the Capital Group of the Bank maintained its full operating capacity and, in comparison with the end of 2019, recorded: − an increase in its balance-sheet total by almost 11% (the Bank recorded an increase in the balance sheet total by 10.4%); − the greatest ever profit on commissions (around PLN 135 million, which means an increase by almost 37%); the profit mainly resulted from the growth of commissions on brokerage services, greater revenues from commissions on loans and guarantees, and smaller payment card fees; − an increase in revenues from financial instruments measured at fair value through profit or loss by over 65%; − an increase in revenues from investment securities by 628%; − an improvement in FX revenues by almost 60%; − an increase in the balance of pro-environmental loans by 4.8%; − an increase in liabilities to customers by 11.2%; − the stabilisation of LCR at a safe level (an increase by 27 pp to 158%); 3) in 2020, the Bank continued the development of its activities in the pro- environmental project financing market. As at the end of 2020, loans granted for actions aimed at environmental protection and supporting sustainable development constituted 36.3% of total loans granted by the Bank (2019: 34.5%). As at 31 December 2020, pro-environmental loans amounted PLN 4.7 billion, i.e. by 4.8% more than in 2019; 4) risks resulting from the Bank’s exposure to wind farm financing was further decreased. Major factors that contributed to risk reduction include a systematic decrease in the balance of that portfolio and a systematically decreasing share of that portfolio in the total credit portfolio; the Bank’s total exposure in wind farm financing was, as at the end of December 2020, slightly over PLN 1.4 billion (2019: PLN 1.5 billion); 5) during the pandemic, the Bank substantially accelerated its digital transformation. Those actions included, without limitation: the growth of the role of electronic distribution channels; the Bank’s new website; the implementation of a new mobile application; the implementation of automation of repetitive business processes at the Bank (Robotic Process Automation); the implementation of an original calculator of photovoltaic installations and an environmental effect counter, which presents, on an ongoing basis, benefits earned from pro-environmental investments that are financially supported by the Bank; enabling Bank customers to use immediate Express Elixir transfers; the commencement of R&D work related to ePUAP and BLIK; and many other initiatives; 6) selected products of the Bank, which were created to meet customer needs, were awarded in 2020: − in January, February and March 2020, ECOdeposit Plus offered by BOŚ was ranked at the top of the ranking of 12-month deposits up to PLN 10,000, organised by Bankier.pl, and in April 2020 this deposit was ranked 1st; − in June 2020, the Ecoloan offered by BOŚ (“Otwarci na przyszłość”) was ranked 1st in the ranking of the best cash loans operated by rankomat.pl,

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne and a mortgage loan offered by BOŚ was ranked 1st in the ranking of mortgage loans with 30% own contribution operated by money.pl; − in July 2020, the ECOdeposit was ranked among the top three six-month deposits in the ranking of bankier.pl; − in September 2020, the BOŚ 500+ Electronic Savings Account was first in the bankier.pl ranking of the best savings accounts for the amounts of PLN 50,000 and PLN 200,000; the Bank and the Brokerage House, which is one of Capital Group companies, also obtained many awards in 2020 for their activities: − The Bank: o in March 2020, received an award in the Financial Brand of the Year competition organised by “Gazeta Finansowa”. It was also featured in the list of 100 largest financial institutions in Poland; o in May 2020, the Jury of the 13th Nationwide Social Responsibility Leaders Programme awarded Bank Ochrony Środowiska the title of Laureate of the Green Company 2020 Programme; o in June 2020, obtained the title of the best commercial bank in the category of a Small and Medium-sized Bank in the competition organised by “Gazeta Bankowa” and was awarded with the White Leaf for its CSR Policy (it is awarded to companies that declare to implement the most important management categories recommended by the ISO 26000 standard and perfect their activities in this regard to effectively manage their impact on the environment);

− The Brokerage House of BOŚ S.A.: o in February 2020, was recognised as the best Brokerage House of 2019 by votes cast by investors in the 17th edition of the nation-wide Investor Study carried out by the Association of Private Investors; o in March 2020, was recognised as the Best Brokerage House of 2019 by Gazeta Giełdy “Parkiet” and obtained the “Bull and Bear” award in the Brokerage House of the Year category; o received the Capital Market Leader award for the highest activity on the market of futures contracts in 2019 and the Platinum Megawatt award for the highest activity on the market of white certificates in 2019, awarded by the Polish Power Exchange; o was awarded the Financial Brand of the Year award in the category of: A Brokerage House for its 25-year contribution to the development of the capital market in Poland – for being aware of customer needs, exceeding customer expectations and building market confidence by creating clear, legible and pro-customer operating mechanisms. In addition, the editorial staff of Home&Market magazine awarded the Financial Order 2019 to the Brokerage House of BOŚ for Individual Pension Accounts/Individual Pension Security Account kept under the brokerage account in the category of: Investment Product. It is also necessary to note that in January 2020, for the third time in a row, economists working for Bank Ochrony Środowiska S.A. won in the competition organised by the editorial staff at “Parkiet” Gazeta Giełdy i Inwestorów for the best forecast of macroeconomic and market ratios in 2019. This is an unprecedented achievement in the entire history of the

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne competition. The “Parkiet” ranking has been organised since 2005 and is the most prestigious competition for economists and analysts from domestic financial institutions. It is attended by over 20 analytical teams from Polish and foreign financial institutions; 7) in 2020 the Bank introduced a number of special solutions and products for businesses affected by the difficult situation related to the COVID-19 pandemic and participated in actions aimed at providing support and aid to entrepreneurs and natural persons. The Bank deepened its cooperation in that field with Bank Gospodarstwa Krajowego by supplementing its offer with, among others: − the Liquidity Guarantee addressed to medium-sized and large enterprises and a modified COSME guarantee offered to SMEs; − an extended de minimis guarantee scheme under the government programme entitled “Support for Entrepreneurship with Bank Gospodarstwa Krajowego Sureties and Guarantees”; − an extended Biznesmax guarantee under the programme carried out by the use of funds coming from the Guarantee Fund of the Operational Programme for Smart Development, which is aimed at increasing access to ongoing funding and enabling further development of SMEs. In addition, on the basis of the agreement on the supply of services under the “PFR Crisis Prevention Shield” with Polski Fundusz Rozwoju S.A. (PFR), the Bank offered its customers the option to use funds under the aid scheme launched by PFR. The scheme was aimed at enterprises that suffered due to the COVID-19 pandemic. The Bank enabled both retail and corporate customers from all sectors to suspend the repayment of principal instalments for credit products (excluding stock-exchange loans) without additional documents, and retail customers were allowed to suspend their agreements under the Shield 4.0 (so-called grace period). Moreover, in particular, the Bank: − waived fees and commissions for activities carried out by the Bank in connection with the mitigation of negative effects of the COVID-19 pandemic; − introduced a special mode for handling loans, borrowings, credit cards and factoring transactions of customers in connection with the mitigation of negative effects of the COVID-19 pandemic and assigned aid activities with the status of a non-legislative moratorium (within the meaning of the European Banking Authority’s Guidelines). As part of the solutions, the Bank gave customers the option to suspend the repayment of instalments for up to 6 months and automatically renew the limit under a simplified procedure for up to 6 months; − as regards credit cards, implemented the option to postpone the repayment date of the “Minimum Amount Due” by 3 months; − implemented solutions enabling customers to handle urgent matters electronically in BOŚBank24 and iBOSS24 electronic banking systems; − introduced the option of the acceptance of documents signed with a safe electronic signature from customers; − increased the limit of proximity card payments to PLN 100;

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne 8) in connection with the COVID-19 pandemic, the Bank introduced a number of solutions in order to maintain the continuity of operations and limit epidemiological risk for both employees and customers. The purpose of those actions was to minimise the impact of the pandemic on the Bank’s operations without prejudice to the top safety standard. In particular, the Bank: − introduced a restriction limiting the number of customers within its facilities as per guidelines issued by the General Sanitary Inspectorate and separated customers from customer service staff with the use of transparent partitions walls, provided customers with disposable gloves and ensured cyclical ATM disinfection; − provided relevant support to its employees, for example by changing the work organisation to enable a significant group of employees to perform their duties on a remote basis.

Based on the assessment of the Bank’s situation in 2020, the Supervisory Board: − points out that, given the aforementioned unpredictable circumstances and events, the Bank did not manage to meet all assumptions of and complete the Recovery Programme as scheduled. As recommended by the Polish Financial Supervision Authority, the Bank prepared a new recovery plan, i.e. the Group Recovery Plan, which, when approved by the Polish Financial Supervision Authority, will be systematically monitored by the Supervisory Board. The Supervisory Board stated that the Bank had been obliged to prepare the Group Recovery Plan because of its failure to meet certain assumptions of the Recovery Programme and significant changes in its macroeconomic environment caused by the COVID-19 pandemic, whose consequences and impact on the Bank’s economic and financial standing should be adequately reflected in recovery actions taken by the Bank; − has been consistently paying attention to areas where the Bank has reserves. In particular: − it is necessary to intensify sales actions and, as a consequence, increase the Bank’s revenues and credit balance, as well as actions aimed at the growth of the number of customers and the improvement of customer service quality; − it is necessary to improve the effectiveness of the Bank’s operations, which is measured, among others, with such ratios like ROE, ROA and C/I.

Moreover, the Supervisory Board: − is satisfied that the Bank, based on its mission, takes active actions, in cooperation with other entities of the ecology financing system in Poland, to strengthen the market position of pro-environmental project funding and aims at increasing a goodwill of the Bank as an entity of the ecology financing system in Poland. Those aspects will be incorporated into the new Bank’s Strategy, whose preparation is in progress. The Strategy will provide for the Bank’s further organic development in the area connected with financing projects that are aimed at protecting the natural environment, because it will strengthen an ecology-based business model and underline the Bank’s role in green transformation. The Supervisory Board points out

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne that it is still reasonable to deepen and narrow the Bank’s cooperation with its strategic shareholder; − points out if legal risk connected with FX mortgage credit exposure materialises, this will have an important impact on the Bank’s situation. More information and data will be available after the announcement of the Supreme Court’s judgements and the Bank’s final decisions concerning its participation in the Programme of Agreements, which was defined by the Chairman of the Polish Financial Supervision Authority; − is of the opinion that in 2021 and subsequent years both the Bank and the whole economy will be getting out of and fighting negative consequences of the crisis caused by the pandemic. The economic growth in Poland is expected to be recovered gradually, although, given the pandemic in progress, the return to the permanent growth path is highly uncertain.

2. Assessment of internal control systems, risk management, compliance and internal audit function.

The purpose of those systems is to ensure effective and efficient operations of the Bank and compliance with all legal regulations in all aspects of the Bank’s activity.

The Supervisory Board, including the Internal Audit Committee and the Risk Committee, supervised the operation and effectiveness of those systems at the Bank.

2.1 Assessment of the internal control system of the Bank and the Capital Group of BOŚ S.A.

The purpose of the internal control system is to ensure the Bank’s effective and efficient operation, reliable financial reporting, the Bank’s compliance with risk management rules, legal regulations, internal regulations and market standards. The internal control system is made of: – a control function which ensures compliance with the control mechanisms relating to, in particular, the risk management at the Bank; the function incorporates posts, groups of people or business units responsible for the performance of tasks assigned to that function; – a compliance unit, whose task is to identify, assess, control and monitor the risk of compliance of the Bank’s activities with legal regulations, internal regulations and market standards, and to present reports in that scope; – an independent internal audit unit, whose task is to independently and objectively test and assess the adequacy and effectiveness of the risk management and internal control system, excluding the internal audit unit. The internal control system comprises all areas of the Bank’s activity, processes, operations, transactions and other activities existing within business centres, branches and the Head Office, as well as all levels of the organisational structure within the Bank’s model of three defence lines.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne The internal control system is supervised by the Supervisory Board, which assesses the adequacy and effectiveness of that system in particular on the basis of: – internal tools specified in the Management Information System, i.e.: periodic reports and information prepared by the internal audit unit and the compliance unit, periodic information on bank risks, other periodic information prepared by business units of the Head Office (e.g. on the Bank’s security or the adequacy, functionality and security of the IT system); – external tools based mainly on the regulatory KNF BION assessment7, auditor reports and opinions prepared during the audit of financial statements of the Bank and the Capital Group of BOŚ S.A., and other reports on control and supervisory actions taken in relation to the Bank.

The Supervisory Board’s decisions are based on opinions prepared by the Internal Audit Committee, which in particular: – monitors the adequacy and effectiveness of the internal control system, the internal audit unit and the compliance unit; – directly supervises the activities of the internal audit unit.

As a result of its supervision activity, taking into consideration the Internal Audit Committee’s recommendation, the Supervisory Board assessed the effectiveness and adequacy of the internal control system of BOŚ S.A. and the Capital Group of the Bank in 2020 at 3: “Adequate and effective with reservations” (in the scale from 1 to 4, where 1 is the best score). The score is one level lower than in 2019.

The assessment of the adequacy and effectiveness of the internal control system takes into account and is based on such elements like: − the Bank’s risk management system and internal control system, which operates at three independent levels (three defence lines); − a methodology applied by the Bank to identify and evaluate control mechanisms in the Bank’s key processes; − the review of the Risk Map of the Internal Audit Department, which indicated that only one of 115 processes incorporated into the Risk Map (0.8%) had inadequate and ineffective control mechanisms, over 11% of other processes had adequate and effective control mechanisms, and other 88% of processes had adequate and effective control mechanisms, however with certain shortages or reservations; − results of problem-related inspections conducted by the Office of the Polish Financial Supervision Authority to assess the quality of assets, credit risk management and to verify recommendations issued after the 2017 comprehensive inspection, as well as to verify the fulfilment of obligations stipulated in the Act on counteracting money laundering and terrorism financing;

7 a supervisory evaluation conducted by the Polish Financial Supervision Authority by the use of the Methodology of Supervisory Review and Assessment of Commercial, Associating and Cooperative Banks 30

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − administrative penalties imposed by the Polish Financial Supervision Authority and the General Inspector of Financial Information in connection with irregularities in the fulfilment of AML obligations by the Bank; − results of planned and non-planned audits conducted at the Bank and the Bank’s subsidiaries, where risk areas were identified. Given the inefficiencies, in 2020 recommendations were issued and actions were taken to mitigate the identified risk factors; − the assessment of the adequacy and effectiveness of the internal control system in the audited processes during the audits; – an updated list of key processes and the control function matrix - the definition of control mechanisms in key processes and independent tests of such processes; – results of vertical and horizontal control mechanism tests conducted by the Compliance Department and results of compliance tests conducted at the Bank’s outlets, after which recommendations were issued to improve the operation of control mechanisms in the internal control system; – the assessment of compliance risk in cyclical information and reports of the Compliance Department on compliance risk management at the Bank and the Capital Group of BOŚ S.A.; – results of the annual monitoring of the internal audit unit, i.e. the self- assessment of the Internal Audit Department for 2020, which has an impact on the Work Quality Assurance and Improvement Programme of the Internal Audit Department and the assessment of the implementation of the Internal Audit Department’s Strategy for the years 2016-2020 coherent with the Framework Development Strategy of BOŚ S.A.; – the progress in the implementation of recommendations given by: • the Internal Audit Committee - as part of supervision; • the Internal Audit Department - as part of internal audits; • supervisory and control authorities after internal inspections; – a supervisory BION evaluation, including recommendations issued after the evaluation;

– external ratings of the Bank, in particular those granted by Fitch Ratings Ltd., which confirmed the ratings, changed the perspective for the Bank from stable to negative, and lowered the rating of subordinated bonds to BB from BB+. During the audits conducted in 2020, no critical irregularities were identified. The internal control system was assessed worse than previously mainly due to the results of problem-related inspections conducted at the Bank by the Office of the Polish Financial Supervision Authority.

2.2. Assessment of the internal audit function 31

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne

In the opinion of the Supervisory Board, the internal audit function is performed efficiently and effectively and comprises all units and subsidiaries of the Bank. The above opinion is based on the following circumstances: − an independent external assessment of the internal audit unit in 2017, which confirmed that the Internal Audit Department operates in compliance with regulatory requirements (H Recommendation of the Polish Financial Supervision Authority, Regulation of the Minister of Development and Finance of 6 March 2017 on risk management system and internal audit system, remuneration policy and detailed method of estimating internal capital in banks, and the International Standards for the Professional Practice of Internal Auditing IIA (in accordance with the Recommendation H, the operation of an internal audit unit should be subject to an independent assessment by an external entity at least once every five years. The next assessment of the Internal Audit Department will be conducted in 2022); − results of the annual monitoring of the internal audit unit’s operation, i.e.: • the self-assessment of the Internal Audit Department for 2020 - the self- assessment is prepared cyclically on a yearly basis and is an important element of the internal audit work quality assurance and improvement programme; • the assessment of the implementation of the Internal Audit Department’s Strategy for the years 2016-2020, which is coherent with the Framework Development Strategy of BOŚ S.A. The Internal Audit Department’s Strategy approved by the Supervisory Board covered five years from 2016 to 2020. In 2020, the Internal Audit Department completed its duties stemming from the Strategic Plan for the above period. In 2021, after the update of the Bank’s Strategy (which, as recommended by the Polish Financial Supervision Authority, should be updated by 30.06.2021), a new Strategy of the Internal Audit Department for the following years will be developed. The self-assessment made in 2020 confirmed that the activities of the Internal Audit Department were fully adjusted to the International Standards for the Professional Practice of Internal Auditing and the Recommendation H of the Polish Financial Supervision Authority and did not reveal any gaps that would have to be adjusted at the Internal Audit Department; − the Bank’s internal auditors have relevant qualifications and are adequately remunerated. For the purpose of professional improvement, the Supervisory Board indicated that the number of professional certificates issued to auditors by renown international organisations had to be increased; − annual audit planning is based on comprehensive risk assessment and clearly defines goals and the scope of audit work. In accordance with the Bank’s internal audit methodology, the annual audit plan of 2020 took into account both expectations of the Supervisory Board and the Management Board, as well as requirements of the Polish Financial Supervision Authority. The annual audit plan of 2020 included all important issues and enabled the independent and objective assessment of the adequacy and effectiveness of risk management and internal control systems, including the identification of irregularities and inefficiencies in audited processes and the assessment

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne of risks for individual processes/issues. Post-audit recommendations were monitored and the status of their implementation was regularly reported to competent authorities: the Management Board, the Internal Audit Committee and the Supervisory Board. As at the end of 2020, there were no recommendations which had not been implemented; − the internal audit division has relevant authorisations and organisational structure that enable it to perform its duties independently. The internal audit function allows for a full and free access to any and all information. The internal audit is an integral and independent element of the internal control system of the Bank and is located at the third level (i.e. the third defence line) of that system. The Internal Audit Department is directly reporting to the President of the Management Board and the content of its operations is supervised by the Internal Audit Committee. The scope and methods of audit tasks, the choice of samples, opinions, as well as risk assessments and the assessment of the adequacy and effectiveness of risk management and internal control systems are determined on the basis of autonomous decisions made by the Internal Audit Department. The head of the Internal Audit Department is independent thanks to a direct contact with members of the Management Board and Supervisory Board of the Bank. In addition, the head of the Internal Audit Department attends all meetings of the Management Board, the Internal Audit Committee and the Supervisory Board if the meeting discusses issues related to the internal control system. The Head of the Internal Audit Department has the right to take part, as an observer, in meetings of the Bank’s committees; − in 2020, employees of the Internal Audit Department did not perform any actions other than those stemming from assurance or advisory activities (i.e. they did not carry out any operating activities). In addition, for recent 12 months, the auditors had not been employed in units which they audited, which means that there was no conflict of interest.

2.3. Assessment of compliance risk

In the opinion of the Supervisory Board, the compliance risk is managed efficiently and effectively at all units and subsidiaries of the Bank. The Bank ensure the compliance of its operations with laws, internal regulations and market standards through: 1) a control function (the application of control mechanisms and the monitoring of compliance with such mechanisms), and 2) compliance risk management, which includes the identification, assessment, control and monitoring of compliance risk, as well as reporting to that extent to the Management Board and the Supervisory Board. The compliance risk is understood as risk connected with effects of non- compliance with laws, internal regulations and market standards. In 2020 the compliance risk was managed by the Compliance Bureau and, starting from 1 November 2020, by the Compliance Department, which is a separate independent unit in charge of compliance, which directly reports to the President of the Management Board and is responsible for the fulfilment of its obligations in the internal control system and the performance of compliance

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne risk management duties. The compliance unit has relevant authorisations, including a full and free access to any and all information and an organisational structure, which allow for the performance of its duties in an independent way. The head of the compliance unit regularly attends Management Board meetings to have an insight in the operation of the Bank’s management authorities and present his or her opinions, as well as the meetings of the Internal Audit Committee and the Supervisory Board. Key principles for ensuring compliance at the Bank under the control function and compliance risk management are defined in the Compliance Policy of Bank Ochrony Środowiska S.A., which was developed by the Management Board and approved by the Supervisory Board, and implementing regulations to that Policy, including: 1) Rules for Managing Compliance Risk at Bank Ochrony Środowiska S.A.; 2) Rules of Internal Control at Bank Ochrony Środowiska S.A. The purpose of compliance risk management at the Bank is to: 1) identify, assess and control the possibility of negative effects resulting from non-compliance with the law, internal regulations and market standards, especially legal sanctions, financial losses or reputation loss which may be a consequence of non-compliance with the law, internal regulations and market standards; 2) maintain the Bank’s image as an institution operating in compliance with the law, fair, reliable, environmentally-friendly, credible and responsible in business. As at 31.12.2020, the Bank’s key compliance areas included: 1) counteracting money laundering and financing of terrorism; 2) information protection; 3) implementing and monitoring compliance with ethical standards; 4) accepting or giving benefits and gifts; 5) conducting advertising and marketing activities; 6) offering products; 7) customer complaints; 8) managing conflicts of interest. The compliance risk is monitored by the Bank in a systematic way. Information on events taking place in the compliance risk area are identified and collected at the Bank by the use of a dedicated application. The information on compliance risk management at the Bank is delivered to the Management Board, the Internal Audit Committee and the Supervisory Board on a cyclical and timely basis. In 2020, the Bank focused mainly on counteracting the compliance risk connected with counteracting money laundering and terrorism financing. The overall level of the Bank’s compliance risk in 2020 increased, which was mainly caused by irregularities identified during the inspection conducted by the Polish Financial Supervision Authority and the Chief Financial Information Inspector, as a result of which financial penalties were imposed on the Bank. In 2020 the Bank took actions to adjust its activities to new regulations and standards. The compliance unit took part in those actions as a consultant in the following areas:

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne − the adjustment of the Bank to the EBA Outsourcing Guidelines of 25.02.2019 (the deadline was extended till the end of June 2020); − the settlement of the cost of consumer loans that are repaid before the final repayment date, in accordance with the ruling of the CJEU of 11 September 2019 (so-called “CJEU’s small ruling”).

In addition, in 2020, the compliance unit reviewed the following internal regulations of the Bank: − the Compliance Policy of Bank Ochrony Środowiska S.A.; − Rules for Compliance Risk Management; − Code of conduct in the case of external inspections and audits at BOŚ S.A., BION assessments performed by the Polish Financial Supervision Authority, and external letters from regulatory or inspection authorities; − Rules of the Compliance Bureau/Compliance Department of BOŚ S.A.; − Procedures of anonymous reporting of violations of law and procedures and ethical standards of Bank Ochrony Środowiska S.A.; − Internal Control Rules; − Methodology of identification and assessment of control mechanisms in key processes, approval of criteria for the separation of key processes, and approval of the List of Key Processes and the Control Function Matrix. As a result of the review conducted in the previous year, in 2020 the Bank enforced new internal regulations, including: − the Compliance Policy of Bank Ochrony Środowiska S.A.; − Compliance Risk Management Rules of Bank Ochrony Środowiska S.A.; − Rules of the Compliance Department of BOŚ S.A.; − Procedures of anonymous reporting of violations of law and procedures and ethical standards of Bank Ochrony Środowiska S.A. In 2020, the compliance unit reviewed key processes referred to in the Management Board’s resolution on the enforcement of the “Methodology of identification and assessment of control mechanisms in key processes” twice. During the review, criteria for the separation of key processes and a model control function matrix were modified. In addition, in accordance with the Management Board’s resolution, the Compliance Department, together with business units of the Head Office, updated the control function matrix. As a result of joint actions taken by the compliance unit and other business units of the Head Office, the following documents were adopted by the Management Board: - an updated list of key processes; - a revised Control Function Matrix. Internal decisions made by the Head of the Compliance Department to define the internal control organisation at the Compliance Department were also reviewed and updated. The Department also updated internal regulations on counteracting money laundering and terrorist financing. As of 31 December 2020 the “Methodology of counteracting money laundering and terrorist financing at Bank Ochrony Środowiska S.A.” was enforced and

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne superseded previous internal regulations on counteracting money laundering and terrorist financing at Bank Ochrony Środowiska S.A., i.e. “Rules of counteracting money laundering and terrorist financing at Bank Ochrony Środowiska S.A.” and the “Procedure of counteracting money laundering and terrorist financing at Bank Ochrony Środowiska S.A.”. At the same time, as at 31 December 2020, the Bank identified the following events as events generating a potential compliance risk: 1) the Polish Financial Supervision Authority charging the Bank in March 2020 for a financial penalty of PLN 1,200,000 due to the violation of the Act on Counteracting Money Laundering and Terrorism Financing of 1 March 2018 as a result of the Bank’s failure to apply relevant financial security measures. In June 2020, the Bank appealed against that decision and on 4 September 2020 requested the Polish Financial Supervision Authority to perform mediation. As at this information date, the Polish Financial Supervision Authority did not respond to the Bank’s request; 2) results of the Polish Financial Supervision Authority’s inspection on BOŚ S.A.’s compliance with selected obligations stemming from the Act on Counteracting Money Laundering and Terrorism Financing of 1 March 2018, which was conducted at the Bank from 14.11.2019 to 24.01.2020. As a result of the inspection, the Polish Financial Supervision Authority made recommendations, which are implemented by the Bank in accordance with the schedule approved by the Supervisory Board. In accordance with the recommendation made by the Office of the Polish Financial Supervision Authority, the Management Board presented the Polish Financial Supervision Authority with monthly reports on the performance of actions specified in the Schedule, subject to the prior approval of those reports by the Supervisory Board; 3) the General Inspector of Financial Information imposing in July 2020 a financial penalty of PLN 4,500,000 for the Bank’s non-compliance with the obligation to apply financial security measures, as referred to in the Act on Counteracting Money Laundering and Terrorism Financing, and non- compliance with the obligation to document financial security measures applied by the Bank. As a result of the Bank’s appeal, the Minister of Finance, Funds and Regional Policy reduced the penalty to PLN 3,700,000. The Bank appealed against the Minister’s decision to the Voivodship Administration Court.

In addition, in September 2020, the compliance unit identified a compliance risk in the PSD2 area at the legislative and operational level as a result of a method applied by the Bank to authorise electronic banking transactions. The Bank met the requirements on 28.12.2020.

2.4. Assessment of the risk management system of Bank Ochrony Środowiska S.A.

The Bank’s risk management system meets regulatory requirements defined, in particular, in the Regulation of the Minister of Development and Finance of 6 March 2017 on the risk management system and internal control system,

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne remuneration policy and detailed procedure for measuring internal capital in banks. The goals and principles of that system are defined in the “Bank risk management strategy of Bank Ochrony Środowiska S.A.”.

The Supervisory Board supervises and assesses the adequacy and effectiveness of the risk management system in particular by: − approving and monitoring compliance with the acceptable general level of risk specified by the Management Board of the Bank; − approving and monitoring compliance with the risk management strategy adopted by the Management Board of the Bank; − supervising the development, adoption, and implementation of the policies and procedures on the basis of which the risk management system is supposed to function at the Bank, including relevant contingency plans; − defining principles for reporting and delivering management information about types and amount of risks in the Bank’s activity to the Supervisory Board; − the annual assessment of the adequacy and effectiveness of risk management.

In 2020, the Supervisory Board, together with the Risk Committee, supervised the operation and effectiveness and assessed the adequacy of the risk management system in particular by use of: − internal sources, including: o reports and information referred to in the management information system; o a principle of acceptance of risk appetite and tolerance and key system solutions incorporated into policies providing for the management of individual risks, as stemming from regulatory recommendations; − external tools, including: o results of the BION regulatory assessment; o results of inspections and recommendations made after the comprehensive inspection and problem-related inspections conducted at the Bank by external authorities, including in particular: the Office of the Polish Financial Supervision Authority; o auditor reports and opinions prepared during the audit of financial statements of the Bank and the Capital Group of BOŚ S.A.; o the rating of the Bank awarded by Fitch Ratings Ltd.

As a result of its supervision activities, taking into consideration the Risk Committee’s recommendation, the Supervisory Board assessed the effectiveness and adequacy of the risk management system of BOŚ S.A. in 2020 at 3: “Adequate and effective with reservations” (in the scale from 1 to 4, where 1 is the best score). The score is one level lower than in 2019.

The above rating was mainly based on:

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne – findings resulting from the problem-related inspection conducted at the Bank by the Office of the Polish Financial Supervision Authority in the period from 19.05.2020 to 12.08.2020, including: o the assessment of the quality of assets and credit risk management as at 31.03.2020; o the verification of the implementation of recommendations after the comprehensive inspection conducted at the Bank as at 30.06.2017; – results of the BION assessment made by the Office of the Polish Financial Supervision Authority as at 30.06.2020; – the Bank’s ratings and perspectives granted by Fitch Ratings Ltd in April and November 2020; – administrative penalties imposed by the Polish Financial Supervision Authority and the General Inspector of Financial Information in connection with irregularities in the fulfilment of AML obligations by the Bank.

Other risk management elements that were incorporated into the assessment of risk management in 2020 included in particular: – defining new levels of a minimum requirement for own funds and eligible liabilities (MREL). The MREL is: (1) a percentage of the total risk exposure and (2) a percentage of a total exposure measure. The target MREL for the Bank is 12.75% of total risk exposure and 4.5% of total exposure measure. The Bank must meet the MREL by 01.01.2024 and in the meantime it must meet interim limits; – defining an additional (smaller) capital requirement for the risk of mortgaged FX loans; – legal and regulatory risk generated by the portfolio of loans and borrowings in foreign currencies; – an emergency plan for credit risk aimed at mitigating the negative impact of the COVID-19 pandemic on the quality of the credit portfolio. The Bank implemented special principles for customer financing and monitoring and adjusted those principles to the present market and epidemic situation, mitigated increased risks resulting from uncertain business conditions by, among others, limiting financing for sectors that had suffered because of the pandemic in particular or reducing the LtV (loan to value: a relation between the value of a loan to be repaid and the value of a real property which has been mortgaged to secure the loan) for loans mortgaged with commercial real properties. During the pandemic the Bank modified the limitations based on the market situation. The Bank introduced a limit on exposure to credit transactions with regard to which special financing rules had been applied in connection with the outbreak of the COVID-19 pandemic; – contingency plans with regard to liquidity risk. Due to the COVID-19 pandemic, as a result of which excessive cash withdrawals from banks were recorded and an obligation to report liquidity ratios on a daily basis to the Polish Financial Supervision Authority was enforced at the initial stage, the Bank paid special attention to monitoring warning signals or signals preceding the occurrence of emergency situations, if any. In 2020, given the Bank’s liquidity, it was not necessary to launch a contingency plan; – the development of the Group Recovery Plan in accordance with the Polish Financial Supervision Authority’s decision of 14 July 2020;

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne – a comprehensive review of credit exposures in terms of an accurate classification of such credit exposures and an adequacy of impairment losses and provisions for expected credit losses. As a result of the review, the Bank reclassified certain exposures and updated impairments; – an operational risk recorded by the Bank due to a high level of potential and actual losses resulting from operational risk events connected, in particular, with: (1) obtaining credit products under false pretences based on falsified documents submitted by applicants in the automated processing system; (2) establishing a provision of court proceedings relating to customer claims made against the Bank due to mortgaged FX loans; (3) establishing a provision for two administrative penalties imposed on the Bank by the Polish Financial Supervision Authority and the Chief Inspector of Financial Information in the area of counteracting money laundering and terrorism financing.

In addition, during the assessment of the Bank’s risk management system, the Supervisory Board took into consideration the fact that: – the system is made of an extensive set of internal regulations that comply with external regulations adopted by the Management Board and approved by the Supervisory Board in accordance with the Articles of Association of the Bank. The major document that describes the Bank’s risk management system is the “Bank Risk Management Strategy of Bank Ochrony Środowiska S.A.”. The document defines in particular an appetite for key risks of the Bank and tolerance applicable to capital adequacy. Detailed management methods in relation to individual risks are defined in dedicated regulations. In 2020, similarly to previous years, those regulations were cyclically reviewed and adjusted to the risk profile and risk appetite of the Bank, as well as changes in the Bank’s regulatory and business environment; – to ensure that the goals of the risk management system are achieved, relevant roles, obligations and rights of authorities and particular business units participating in risk management, as well as mutual interactions between those entities were defined (the Bank applies a model of three lines of defence against risks and roles of individual units of the Bank at each defence line were defined). In particular, liability was defined for particular authorities of the Bank, including: the Supervisory Board, the Risk Committee and the Management Board, a Member of the Management Board in charge of those business units of the Head Office that are responsible for the identification and measurement of key risks, as well as relevant committees of the Bank’s Head Office, including in particular: the Assets and Liabilities Committee (and the ALCO Committee for Liquidity and Market Risk, which supports the ALCO Committee), the Operational Risk Committee, the Credit Risk Management Committee and the Credit Committee of the Head Office; – the risk management process at the Bank was supported by a set of quantitative internal risk limits. That set includes internal limits that reduce risk and are adjusted to the scale and complexity of the Bank’s operations. The internal limits are reviewed on a yearly basis and are adjusted to the risk appetite/tolerance accepted by the Supervisory Board. In 2020, the Bank did not exceed the risk standards and limits approved by the Supervisory Board, including risk appetite/tolerance standards and regulatory standards; – the Bank had a formal model risk management process in place. In 2020, the Model Validation Bureau validated five periodical key credit risk models and, 39

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne at a request of the ALCO, validated one non-key financial risk model on an ad- hoc basis. The validations reflected a low or moderate post-validation level of risk of those models. As at the end of 2020, the aggregated risk of all key models was identified as moderate and coming within the model risk tolerance adopted by the Management Board in accordance with the Model Risk Management Policy of BOŚ S.A. Upon each validation, recommendations were issued. They are implemented on an ongoing basis by relevant units and are monitored by the Model Validation Bureau. As at the end of 2020, all recommendations were implemented as scheduled; – the Bank, as a parent company, supervised the management risk system of the Capital Group of BOŚ S.A. To develop a single risk management system of the Capital Group, the Bank aims at implementing risk management mechanisms modelled after the Bank’s solutions in the Bank’s subsidiaries.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne

Appendix No. 2 to the Report on the activities of the Supervisory Board of Bank Ochrony Środowiska S.A. in 2020

Warsaw, 30 March 2021

Report on the application of the Remuneration Policy in 2020, including a decision-making body’s draft assessment whether the Remuneration Policy of BOŚ S.A. is in favour of the Bank’s development and security

Pursuant to the Principles of Corporate Governance for Supervised Institutions, adopted under the Resolution No. 218/2014 of the Polish Financial Supervision Authority of 22 July 2014, the Supervisory Board of the Bank assessed the application of the Remuneration Policy at BOŚ S.A. in 2020.

During the assessment, the Supervisory Board took into consideration the following facts, in particular:

1. The Bank has the Remuneration Policy, which defines the form, structure and method of the determination of remuneration payable to members of the Company’s authorities and to key managers. 2. The remuneration of the Members of the Supervisory Board and the Management Board of BOŚ S.A. is determined adequately to the function performed and the scale of the Bank’s activities.

3. In the incentive systems offered to Members of the Management Board and key managers of BOŚ S.A., variable remuneration is dependent on the Company’s long-term financial standing and the long-term growth of the Bank’s shareholder value.

4. To connect the remuneration payable to Members of the Management Board and key managers with its long-term business and financial goals, the Bank enforces the Regulation of the Minister of Development and Finance of 6 March 2017 on the risk management system and the internal control system, the remuneration policy, and the detailed manner of internal capital assessment at banks, including, without limitation:

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne a. the payment of a part of variable remuneration in the form of shares of BOŚ S.A.; b. the deferral of a part of variable remuneration in the form of 3 equal yearly tranches and the payment dependent on the Bank’s financial results earned during the latest 3 years of its operation.

5. At the Bank there is the Remuneration and Nomination Committee, made of Members of the Supervisory Board of the Bank.

6. The remuneration payable to Members of the Supervisory Board is not dependent on options or other derivatives or any other variable components of the remuneration.

7. In 2020, the remuneration of Members of the Supervisory Board and the Management Board met the requirements of the Act of 9 June 2016 on principles of remunerating persons managing certain companies and was adjusted to the Bank’s financial standing. That complied with the requirement set out in Art. 28.2 of the Principles of Corporate Governance for Supervised Institutions, based on which the remuneration policy should be take into account the institution’s financial standing. The consequences of the above were as follows:

a. the remuneration paid to the Chairman of the Supervisory Board of BOŚ S.A. in 2020 is one of two smallest remunerations paid in 2019 to chairmen of boards of banks in the peer group*), b. the remuneration paid to Members of the Supervisory Board of BOŚ S.A. in 2020 comes within 20% of the smallest remuneration paid in 2019 to members of supervisory boards of banks in the peer group*), c. the remuneration paid to the President of the Management Board of BOŚ S.A. in 2020 was the smallest remuneration paid in 2019 to presidents of the management board of banks in the peer group*) d. an average remuneration paid in 2019 to Members of the Management Board of BOŚ S.A. was the smallest remuneration paid in 2019 to members of the management board of banks in the peer group*)8,

Due to the lack of data, we analysed the remuneration paid in 2019 to members of management and supervisory authorities of banks in the peer group.

8. The basic remuneration paid in 2020 to top management of BOŚ S.A. constitutes around 60% of an average basic remuneration paid in 2020 to top management in the banking sector and the total remuneration constitutes around 57%. A 12% decrease in the competitiveness of basic remuneration in comparison with 2019 was recorded.

*) As at 31 December 2019, the peer group, as defined by the Polish Financial Supervision Authority, was made of BOŚ S.A. and: PKO BP, PEKAO S.A., Bank Handlowy, ING Bank Śląski, Santander, mBank, Millenium, Deutsche Bank, BGŻ Paribas, Getin Noble, Alior, Idea Bank.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne 9. In the annual financial statements and the report on the activities of the Management Board, Bank Ochrony Środowiska S.A. presents the most important information about the manner of remuneration of Members of the Supervisory Board, Members of the Management Board and other key managers.

10. Bank Ochrony Środowiska S.A. regularly reports the status of its remuneration policy to Members of the Supervisory Board and Members of the Management Board both in terms of key managers and employees performing particular functions, which enables the assessment of the Bank’s remuneration policy in terms of the achievement of the policy goals, including in particular the long-term growth of shareholder value and the stability of the Bank’s operations.

11. An average monthly remuneration paid in 2020 to employees of BOŚ S.A. (excluding the Management Board and the Supervisory Board) constitutes 87% of an average monthly gross remuneration in the insurance and financial sector in the 1st - 3rd quarter of 2020 (based on the data provided by the Polish Statistical Office).

Total remuneration offered to employees of BOŚ S.A. in the sales network constitutes 69% of an average monthly gross remuneration in the insurance and financial sector in the 1st - 3rd quarter of 2020 (based on the data provided by the Polish Statistical Office).

The above data are considered adequate in the context of the Bank’s lower effectiveness in comparison with the sector and due to the fact that the Bank implements the Recovery Programme. Together with the growth of its financial ratios, the Bank will aim at adjusting total remuneration levels to market rates by developing its variable remuneration system in order to be able to attract and maintain staff having qualifications required to implement the Bank’s Strategy and goals.

12. In 2020, given the position presented by the Office of the Polish Financial Supervision Authority on its conservative approach to the payment of variable remuneration, the Remuneration Policy was supplemented with regulations taking into account the prudent approach to the payment of variable remuneration components in specific situations, like a crisis or events with negative effects to the economy, which are likely to have an impact on the financial market, the Bank’s capital base and/or the Bank’s financial results.

13. Heads of the internal audit unit, compliance unit, legal unit, business units responsible for risk management at the second tier, HR units obtain variable remuneration for the achievement of goals arising from the performance of their functions and their variable remuneration is not dependent on financial results achieved in the operating areas of the Bank which they control.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne Decision-making body’s draft assessment whether the Remuneration Policy of BOŚ S.A. is in favour of the Bank’s development and security.

The Meeting of Shareholders of the Bank, based on the Resolution No. 218/2014 of the Polish Financial Supervision Authority of 22 July 2014 on the Principles of Corporate Governance for Supervised Institutions, as well as: − taking into consideration a prudent and stable management of risks, capitals and liquidity, as well as a special care of the long-term interest of Bank Ochrony Środowiska S.A. and the Bank’s shareholders; − taking into consideration the results of the assessment of the application of the Remuneration Policy at BOŚ S.A. in 2020, as made by the Supervisory Board, which confirm that the Remuneration Policy is transparent and complies with regulations, hereby certifies that, in the opinion of the decision-making body, the Remuneration Policy of BOŚ is in favour of the development and safety of the Bank’s operation.

Appendix No. 3 to the Report on the activities of the Supervisory Board of Bank Ochrony Środowiska S.A. in 2020

Assessment of the reasonability of the Bank’s sponsoring, charity or other similar policies or information on the lack of such a policy.

The Bank’s sponsoring, charity or other similar policy is based on the Sponsoring Policy of Bank Ochrony Środowiska, which was positively commented upon by the Supervisory Board of the Bank on 12 July 2016. It supports the implementation of the Framework Development Strategy of Bank Ochrony Środowiska S.A. in the years 2016-2021 in terms of the development of a long- term value for shareholders, customers, partners, employees and community. Detailed principles for sponsoring activities are set out in the “Principles for marketing activities of Bank Ochrony Środowiska”. In addition, the Bank’s educational activities that are focused on those goals are carried out by the BOŚ Foundation.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne

In 2020, BOŚ’s sponsoring activities and other similar activities focused on supporting retail and corporate business through promotion of the Bank as an expert in environmental project financing, a business partner and a socially responsible bank, which is present wherever events that are important from the point of view of the Bank’s mission, interests of the Bank’s owners and values specified in the Framework Development Strategy of Bank Ochrony Środowiska S.A. in the years 2016-2021 take place. In particular, the sponsoring activities supported the development of the following three values: • liability - we would like to create a socially and environmentally responsible bank. We feel responsible for the development of solutions ensuring a permanent development and market advantage of the Bank and the satisfaction of the Bank’s stakeholders. We keep our promises and always meet our commitments. We act in an honest and reliable way; • involvement - based on our involvement, knowledge and work, we build an effective and efficient organisation for our Shareholders, Customers, Partners and Employees; • trust - we are a Polish bank that guarantees stability, protects customer values, and supports the economic and social development of the country.

While implementing the above goals, the Bank was involved, as a partner, in environmental, sectoral, cultural and sports actions and events.

No. Event Gross amount 1. Multimedia Climate Report prepared by the Clean Air 15000 Foundation 2. “Photovoltaic Market in Poland 2020” Report prepared by 3700 the Renewable Energy Institute 3. Renewable Energy Areopagus of the Professor K. Żmijewski 3690 Association for Effectiveness 4. Actions organised by Murator “Clean Air” and “Water - our 41890 Treasure” 5. Cycle of educational films “How the climate works”, 55350 together with the National Environmental Protection and Water Management Fund 6. Carer in the Animal Rehabilitation Centre of the Poleski 19680 National Park 7. Schuman Festival - Environmental Debate 3000 8. Song and Dance Group of the Warsaw University 3000 “Warszawianka” 9. Concert of Polish music “Polonia in musica” in Świątynia 4000 Opatrzności Bożej 10. Grunwald Museum 1230 11. Participation of sailor Piotr Kula in Finn class regatta 10000

The Bank was also involved in charity actions. No. Action Gross amount 1. Disinfection liquids and protective masks (used to fight 150000 COVID-19) donated to hospices and care homes through the Pope Association of Aid to the Church in Need

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne 2. Donation for the purchase of personal hygiene agents and 1500 cleaning agents for the Centre of Aid to the Homeless, Polish Social Aid Committee 3. Christmas Parcel Action, SOS Food Bank in Warsaw 4000

In 2020, the Bank allocated PLN 160,540 to sponsoring actions. The Bank also allocated PLN 155,500 to charity actions.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne Appendix No. 4 to the Report on the activities of the Supervisory Board of Bank Ochrony Środowiska S.A. in 2020

Opinion of the Supervisory Board of Bank Ochrony Środowiska S.A. on:

1) the application of the Principles of Corporate Governance for Supervised Institutions, issued by the Polish Financial Supervision Authority on 22 July 2014, by Bank Ochrony Środowiska S.A. and 2) the manner in which Bank Ochrony Środowiska S.A. fulfils its information obligations regarding the application of principles of corporate governance set out in the Rules of Giełda Papierów Wartościowych w Warszawie S.A. and in regulations on current and periodic information provided in 2020 by issuers of securities

To fulfil the obligations stemming from § 27 of the Principles of Corporate Governance for Supervised Institutions and the detailed principle II.Z.10.3 of the Best Practice of GPW Listed Companies 2016, as well as § 4.4 of the Rules of the Supervisory Board, the Supervisory Board analysed the application of the Principles of Corporate Governance for Supervised Institutions, as issued by the Polish Financial Supervision Authority on 22 July 2014, by Bank Ochrony Środowiska S.A. (“Bank”) in 2020 and the manner in which the Bank fulfils its information obligations regarding the application of principles of corporate governance set out in the Rules of Giełda Papierów Wartościowych w Warszawie S.A. (“Stock Exchange”) and in regulations on current and periodic information provided by issuers of securities. The results of the analysis are as follows:

1. Application of the Principles of Corporate Governance for Supervised Institutions, issued by the Polish Financial Supervision Authority on 22 July 2014, by Bank Ochrony Środowiska S.A.

Since 1 January 2015 the Bank has applied and complied with the Principles of Corporate Governance for Supervised Institutions (“Principles of Corporate Governance”) adopted under the Resolution No. 218/2014 of the Polish Financial Supervision Authority of 22 July 2014.

The Principles of Corporate Governance were adopted by individual authorities of the Bank: − the Management Board of BOŚ S.A. - Resolution No. 108/2018 of 8 May 2018 on the adoption of the Principles of Corporate Governance for Supervised Institutions issued by the Polish Financial Supervision Authority; − the Supervisory Board of BOŚ S.A. - Resolution No. 31/2018 of 16 May 2018 on the application of the Principles of Corporate Governance for Supervised Institutions, as issued by the Polish Financial Supervision Authority, by the Supervisory Board; − the Meeting of Shareholders of BOŚ S.A. - Resolution No. 28/2018 of the Annual Meeting of Shareholders of Bank Ochrony Środowiska S.A. of 19 June 2018 on adoption of the Principles of Corporate Governance for Supervised

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne Institutions, as issued by the Polish Financial Supervision Authority, at Bank Ochrony Środowiska S.A.

The information on the application of the Principles of Corporate Governance for Supervised Institutions, as issued by the Polish Financial Supervision Authority, by Bank Ochrony Środowiska S.A. Was published on the Bank’s website in the Investors Relations section. In 2020, the Bank applied all Principles of Corporate Governance, except one principle set out in § 8.4, i.e.: “Where it is justified by the number of shareholders, a supervised institution shall seek to facilitate the participation for all shareholders in the meeting of the decision-making body of the supervised institution, inter alia, by offering the possibility of active participation in the meeting of the decision-making body by electronic means.” The Bank analysed whether shareholders can attend meetings of shareholders by use of electronic means, given the example of the Annual Meeting of Shareholders in 2020. Taking into consideration the structure of shareholders, as well as logistic and technical problems, in 2020 the Management Board of the Bank maintained its waiver of § 8.4 of the Principles of Corporate Governance, which means that the Bank does not broadcast the meetings of shareholders in real time to enable the Shareholders to speak and vote outside the place of the meeting by use of electronic means. The Articles of Association of the Bank and the Rules of the Meetings of Shareholders do not provide for the Shareholders’ attendance at the meeting by use of electronic means. The Bank ensures that its information policy is transparent in terms of the course of the meeting by recording the meeting and publishing such audio recordings on the Bank’s website in the Meeting of Shareholders section. To date the Bank has not been informed by the shareholders about any violation of the principles, except of a statement made by the majority shareholder (National Environmental Protection and Water Management Fund) during the Annual Meeting of Shareholders in connection with the Resolution No. 35/2015 of the Annual Meeting of Shareholders of 10 June 2015, which reads that “conditions for support both in terms of financial liquidity and capitalisation, in the case of the National Environmental Protection and Water Management Fund, are defined in commonly applicable legal regulations, including in particular the Environmental Law and statutory acts on public finance. Actions stipulated in the Principles are dependent on those standards”.

To ensure that the Principles of Corporate Governance are complied with and applied correctly, the Bank established business units responsible for the implementation and enforcement of those principles.

The text of the Principles of Corporate Governance for Supervised Institutions is available on the Bank’s website www.bosbank.pl in the Investors Relations section.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne 2. Assessment of the manner in which Bank Ochrony Środowiska S.A. fulfils its information obligations regarding the application of principles of corporate governance set out in the Rules of Giełda Papierów Wartościowych w Warszawie S.A. and in regulations on current and periodic information provided by issuers of securities.

2.1 Application of the Best Practice of GPW Listed Companies 2016 with regard to information obligations stemming from the Rules of Giełda Papierów Wartościowych w Warszawie S.A. The Best Practice for GPW Listed Companies 2016 (“Best Practice”), which was issued on the basis of the Resolution of the Supervisory Board of the Stock Exchange No. 26/1413/2015 of 13 October 2015, have been applied and complied with at Bank Ochrony Środowiska S.A. since 1 January 2016. They have been adopted by: − the Management Board of BOŚ S.A. - Resolution No. 491/2015 of 29 December 2015 to the extent of the Management Board’s competences and obligations, i.e. the management of affairs and representation of the Bank, in accordance with applicable laws and the Articles of Association of the Bank; − the Supervisory Board of BOŚ S.A. - Resolution No. 6/2016 of 7 January 2016 to the extent of the Supervisory Board’s competences and obligations, in accordance with applicable laws and the Articles of Association of the Bank; − the Meeting of Shareholders of BOŚ S.A. - Resolution No. 20/2016 of the Annual Meeting of Shareholders of 23 June 2016 on principles of corporate governance set out in the “Best Practice for GPW Listed Companies 2016”. The Rules of Giełda Papierów Wartościowych w Warszawie S.A. (“Rules of the Stock Exchange”) set out information obligations concerning the application of the principles of corporate governance. § 29.3 of the Rules of the Stock Exchange stipulates that if a detailed corporate governance principle is not applied permanently or is violated incidentally, an issuer must publish a report on that issue on the official website and in the way in which current reports are delivered, via the Electronic Information Database in accordance with the rules set out in the Resolution of the Management Board of the Warsaw Stock Exchange No. 13/09/2015 of 17 December 2015. The Best Practice was adopted by the Management Board, the Supervisory Board and the Meeting of Shareholders, except for the Principles that were published by the Management Board of the Bank in the form of a current report on 24 June 2016 via the EID system and on the website. As regards the Principles applied by the shareholders, the Best Practice adopted by the Meeting of Shareholders of BOŚ S.A. were also published in the current report No. 36/2016 of 24 June 2016.

The Bank does not apply the following principles of corporate governance set out in the “Best Practice for GPW Listed Companies 2016” being in force since 1 January 2016 in a permanent way: 1) Principle I.Z.1.15 concerning a diversity policy applied towards the company’s governing bodies and key managers. Diversity principles related to employees (including key managers) are set out in the Work Rules of BOŚ S.A. and there is no such a solution applicable to the company’s governing bodies.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne 2) Principle IV.Z.2 concerning the real-time broadcast of the meeting of shareholders.

Explanations concerning the non-application of Principles I.Z.1.15 and IV.Z.2 and information on the application of recommendations and detailed principles by BOŚ S.A. in accordance with the Principle I.Z.1.13 are available on the Bank’s website www.bosbank.pl in the Investor Relations section.

To ensure that the Best Practice is complied with and applied correctly, the Bank established business units responsible for the implementation and application thereof.

The analysis of the application of the principles of corporate governance incorporated into the Best Practice in 2020 by the Bank confirms that the Bank met that obligation adequately.

2.2 Application of the Best Practice of GPW Listed Companies 2016 with regard to information obligations set out in regulation son current and periodic information provided by issuers of securities.

Pursuant to § 70.6.5 of the Regulation of the Minister for Finance of 29 March 2018 on current and periodic information published by issuers of securities and conditions for recognising as equivalent information required by the laws of a non-Member State (“Regulation”), the report on the issuer’s activities should contain a statement on the application of corporate governance as a separate part of the report. The Regulation also specifies what information should be incorporated into the statement on the application of corporate governance.

To fulfil the above obligations in 2021, the Bank incorporated the “Statement on the application of corporate governance”, including all elements set out in § 70.6.5 of the Regulation, into the Management Board’s report on the activities of the Capital Group of Bank Ochrony Środowiska S.A. in 2020, which was prepared together with the Management Board’s report on the activities of BOŚ S.A.

By making the statement on the application of corporate governance, the Bank also implemented the European Commission Recommendation 2014/208/EU of 9 April 2014 on the quality of corporate governance reporting (“comply or explain”).

In addition, in accordance with the detailed principle I.Z.1.12 of the Best Practice, the Bank’s statement on the application of corporate governance in 2020 was published on the Bank’s website.

Summary

The Supervisory Board is required to assess the manner in which the Bank fulfils its information obligations concerning the application of the Principles of Corporate Governance based on the Principle II.Z.10.3 of the Best Practice of GPW Listed Companies 2016”.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne During the assessment, the Bank was not found to violate the Principles in 2020 to the extent adopted by Bank Ochrony Środowiska S.A. Taking into consideration the results of the above analyses concerning the application of the Principles of Corporate Governance Principles for Supervised Institutions issued by the Polish Financial Supervision Authority on 22 July 2014 by the Bank and the manner in which Bank Ochrony Środowiska S.A. fulfils its information obligations regarding the application of the principles of corporate governance set out in the Rules of the Stock Exchange and in regulations on current and periodic information provided by issuers of securities, the Supervisory Board assesses the Bank’s activities in this area as adequate and compliant with the requirements.

KLAUZULA POUFNOSCI: BOŚ Wewnętrzne