Disclaimers

General information

Cyfrowy Polsat S.A. (the "Company", "Cyfrowy Polsat"), with its registered office in Warsaw, 4a Łubinowa Street, is entered in the Register of Entrepreneurs of the National Court Register kept by the District Court for the City of Warsaw, XIV Economic Department of the National Court Register, under the number KRS 0000010078. The Company is the parent company of Cyfrowy Polsat S.A. Capital Group ( “Polsat Plus Group”).

This constitutes the report of Cyfrowy Polsat Capital Group S.A. (the “Report”) prepared as required by Article 60 section 1 and Article 70 of the Ordinance of the Minister of Finance of March 29, 2018 regarding current and periodic information to be submitted by issuers of securities, and the conditions for recognizing equivalence of information required under non-member states regulations.

Presentation of financial data and other information

References to the Company or Cyfrowy Polsat contained in this Management Board’s report on the activities of Cyfrowy Polsat S.A. apply to Cyfrowy Polsat S.A., while all references to the Group or Polsat Plus Group apply to Cyfrowy Polsat S.A. and its consolidated subsidiaries. Expressions such as "we," "us," "our" and similar apply generally to the Company, unless it is clear from the context that they apply only to the Group. A glossary of terms used in this document is presented at the end of this Report.

This Report contains financial statements and financial information relating to the Company. In particular, this Report contains our financial statements for the financial year ended December 31, 2023, prepared in accordance with International Financial Reporting Standards as approved for use in the European Union ("IFRS") and are presented in millions of zlotys. The financial statements attached to this Report have been audited by an independent auditor.

Certain financial data contained in this Report have been subject to rounding adjustments. Accordingly, certain numbers presented as the sum may not conform exactly to the arithmetical sum of their components.

Forward-looking statements

This Report contains forward looking statements relating to future expectations, understood as all statements (other than statements of historical facts) regarding our financial results, business strategy, plans and objectives pertaining to our future operations (including development plans related to our products and services). These statements are expressed, without limitation, through words such as "may," "will," "expect," "anticipate," "believe," "estimate" and similar words used in this Report. Such forward-looking statements do not constitute a guarantee of future performance and involve risks and uncertainties which may affect the fulfilment of these expectations, as by their nature they are subject to many factors, risks and uncertainties. Accordingly, actual results may differ materially from those expressed or implied by the forward looking statements. Even if our financial results, business strategy, plans and objectives pertaining to our future operations are consistent with the forward-looking statements included herein, this does not necessarily mean that these statements will be true for subsequent periods. These forward-looking statements express our position only as at the date of this Report.

The cautionary statements set out above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We expressly disclaim any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained herein in order to reflect any change in our expectations, change of circumstances on which any such statement is based or any event that occurred after the date of this Report.

In this Report, we disclose important factors which may impact our future operating activities and financial results that could cause our actual results to differ materially from our expectations.

Industry and market data

In this Report, we set out information relating to our business and the markets in which we and our competitors operate. The information regarding the market, its size, the market share, the market position, the growth rates and other industry data relating to our business and markets in which we operate consists of data and reports compiled by various third-party entities, including other operators present on the Polish market, and our internal estimates. We believe that industry publications, surveys and forecasts we use are reliable but we have not independently verified them and cannot guarantee their accuracy or completeness.

Moreover, in numerous cases we have made statements in this Report regarding our industry and our position in the industry based on our own experience and our examination of market conditions. We cannot guarantee that any of these assumptions properly reflect our market position. Our internal surveys have not been verified by any independent sources.

Financial data overview

The following tables set out selected consolidated financial data for the twelve-month periods ended December 31, 2023 and December 31, 2022. This information should be read in conjunction with the financial statements for the twelve-month period ended December 31, 2023 (including notes thereto) constituting part of this Report and the information included in item 4 of this Report – Operating and financial review.

Selected financial data:

●	from the income statement and the cash flow statement for the twelve-month periods ended December 31, 2023 and December 31, 2022 have been converted into euro at a rate of PLN 4.5430 per EUR 1.00 (average exchange rate in the period from January 1, 2023 to December 29, 2023 announced by the NBP);
●	from the balance sheet data as at December 31, 2023 and December 31, 2022 have been converted into euro at a rate of PLN 4.3480 per EUR 1.00 (average exchange rate on December 29, 2023 published by the NBP).

Such recalculations shall not be viewed as a representation that such zloty amounts actually represent such euro amounts, or could be or could have been converted into euro at the rates indicated or at any other rate.

Income statement

	for the twelve-month period ended December 31
	2023		2022
	mln PLN	mln EUR	mln PLN	mln EUR
Revenue	2,245.3	494.2	2,382.5	524.4
Operating costs	(2,064.1)	(454.3)	(2,042.1)	(449.5)
Other operating income/(cost), net	(9.6)	(2.1)	2.7	0.6
Profit from operating activities	171.6	37.8	343.1	75.5
Gain on investment activities, net	891.1	196.1	1,188.7	261.6
Finance costs, net	(404.9)	(89.1)	(241.9)	(53.2)
Gross profit for the period	657.8	144.8	1,289.9	283.9
Income tax	(18.2)	(4.0)	(41.3)	(9.1)
Net profit for the period	639.6	140.8	1,248.6	274.8
Basic and diluted earnings per share (not in millions)	1.16	0.26	2.24	0.49
Weighted number of issued shares (not in millions)	550,703,531		557,758,269
EBITDA(1)	348.7	76.8	517.4	113.9
EBITDA margin	15.5%	15.5%	21.7%	21.7%

(1)

We define EBITDA as net profit/(loss), as determined in accordance with IFRS, before depreciation and amortization, impairment charges and reversals on property, plant and equipment and intangible assets, net value of disposed property, plant and equipment and intangible assets, revenue obtained from interest, finance costs, positive/(negative) exchange rate differences and income taxes. The reconciling item between EBITDA and reported operating profit/ (loss) is depreciation and amortization expense and impairment charges and reversals on property, plant and equipment and intangible assets and net value of disposed property, plant and equipment and intangible assets.

Cash flow statement

	for the twelve-month period ended December 31
	2023		2022
	mPLN	mEUR	mPLN	mEUR
Net cash from operating activities	241.4	53.1	(383.3)	(84.4)
Net cash used in investing activities	(1,282.0)	(282.2)	(73.3)	(16.1)
Incl. capital expenditures(1)	(61.6)	(13.6)	(125.0)	(27.5)
Net cash used in financing activities	2,803.5	617.1	(1,357.5)	(298.8)
Net increase/(decrease) in cash and cash equivalents	1,762.9	388.0	(1,814.1)	(399.3)

(1)	Capital expenditures represent payments for our investments in property, plant and equipment and intangible assets. Excludes expenditures on purchase of reception equipment leased to our customers, which are reflected in the cash flow from operating activities.

Balance sheet

	December 31, 2023		December 31, 2022
	mPLN	mEUR	mPLN	mEUR
Cash and cash equivalents(1)	1,883.6	433.2	120.7	27.8
Assets	19,732.9	4,538.4	15,658.3	3,601.3
Non-current liabilities, incl.:	6,116.3	1,406.7	3,022.7	695.2
Non-current financial liabilities(2)	6,017.3	1,383.9	2,961.9	681.2
Current liabilities, incl.:	1,506.7	346.5	1,141.4	262.5
Current financial liabilities(2)	583.5	134.2	430.0	98.9
Equity	12,109.9	2,785.2	11,494.2	2,643.6
Share capital	25.6	5.9	25.6	5.9

(1)	Includes Cash and cash equivalents, deposits and restricted cash.
(2)	Includes Loans and borrowings, Issued bonds and Lease liabilities.

1. Our strategy

1.1. Who we are

Cyfrowy Polsat S.A. (the "Company", "Cyfrowy Polsat") is a joint stock company registered in Poland, whose shares are listed on the Warsaw Stock Exchange. The Company's registered office is located in Warsaw, at 4a Łubinowa Street. Cyfrowy Polsat is the parent company of Polsat Plus Group - the largest provider of integrated media and telecommunications services in Poland.

The table below shows the interests held by the Company in subsidiaries, associates and other entities as of certain dates.

Company	Registered office	Activity	Share in voting rights (%) as at
Company	Registered office	Activity	December 31, 2023	December 31, 2022
Polkomtel Sp. z o.o.	Konstruktorska 4, 02-673 Warsaw	telecommunication activity	100%	100%
Telewizja Polsat Sp. z o.o.	Ostrobramska 77, 04-175 Warsaw	television broadcasting and production	100%	100%
Netia S.A.	Poleczki 13, 02-822 Warsaw	telecommunication activity	100%	100%
Asseco Poland S.A.	Olchowa 14, 35-322 Rzeszów	software activities	10,13%	22,95%
PAK-Polska Czysta Energia Sp. z o.o.	Kazimierska 45, 62-510 Konin	holding activities	50,50%	40,41%
Port Praski Sp. z o.o.	Krowia 6, 03-711 Warsaw	implementation of construction projects	66,94%	66,94%
Pantanomo Limited	3 Krinou 5th floor, 4103 Limassol, Cyprus	property management, holding activities	32%	-
Interphone Service Sp. z o.o.(1)	Inwestorów 8, 39-300 Mielec	production of set-top boxes	99%	99%
Vindix S.A	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	debt collection services	100%	100%
Teleaudio Dwa Sp. z o.o. Sp.k.(1)	Al. Stanów Zjednoczonych 61, 04-028 Warsaw	call center and premium-rate services	99%	99%
Plus Finanse Sp. z o.o.	Konstruktorska 4, 02-673 Warsaw	other monetary intermediation	100%	100%
Plus Pay Sp. z o.o. (1)	Konstruktorska 4, 02-673 Warsaw	monetary intermediation	1%	1%
Esoleo Sp. z o.o.	Al. Wyścigowa 6, 02-681 Warsaw	technical services	51,25%	51,25%
CPSPV1 Sp. z o.o.	Łubinowa 4a, 03-878 Warsaw	technical services	-	100%
CPSPV2 Sp. z o.o.	Łubinowa 4a, 03-878 Warsaw	technical services	-	100%
Orsen Holding Ltd.	Level 2 West, Mercury Tower, Elia Zammit Street, St. Jian’s STJ 3155, Malta	holding activities	100%	100%
Orsen Ltd.(1)	Level 2 West, Mercury Tower, Elia Zammit Street, St. Jian’s STJ 3155, Malta	holding activities	0,2%	0,2%
MESE Sp. z o.o.	Al. Stanów Zjednoczonych 61A, 04-028 Warsaw	movie and TV production	-	10%
Netshare Media Group Sp. z o.o.	Ostrobramska 77, 04-175 Warsaw	advertising activities	100%	100%
BCAST Sp. z o.o.	Rakowiecka 41/21, 02-521 Warsaw	telecommunication activity	70,02%	70,02%
INFO-TV-FM Sp. z o.o.(1)	Łubinowa 4a, 03-878 Warsaw	radio and television activities	73,5%	73,5%
Stork 5 Sp. z o.o.	Łubinowa 4a, 03-878 Warsaw	holding activities	100%	100%
Polsat Media Sp. z o.o. (dawniej Polsat Media Biuro Reklamy Sp. z o.o. Sp. k.)(2)	Ostrobramska 77, 04-175 Warsaw	advertising activities	37,75%	37,75%
Karpacka Telewizja Kablowa Sp. z o.o.	Warszawska 220, 26-600 Radom	dormant	99%	99%
Polskie Badania Internetu Sp. z o.o.(3)	Al. Jerozolimskie 65/79, 00-697 Warsaw	web portals activities	4,76%	4,76%
Exion Hydrogen Polskie Elektrolizery Sp. z o.o.	Ku Ujściu 19, 80-701 Gdańsk	production of electrical equipment	10%	10%

(1)	The Company owns directly and indirectly 100% of shares.
(2)	The company was established as a result of the transformation from Polsat Media Biuro Reklamy Sp. z o.o. Sp. k. on January 2, 2023.
(3)	Shares in associates include shares in Polskie Badania Internetu Sp. z o.o.

1.2. Strategy 2023+

As an integral part of the Group, the Company implements the Strategy 2023+ of Polsat Plus Group, adopted on December 20, 2021, and does not have its own business strategy at the unit level.

We are a Polish company and we offer high quality commodities for a reasonable price to the inhabitants of Poland. For everyone. Everywhere.

We believe that high-speed and reliable Internet within easy reach means freedom for everyone and everywhere. We believe in locally produced, unique content available wherever, whenever and on whatever device you want. We believe that the transition towards clean and affordable energy, in particular energy produced from renewable sources, is what our country needs and that it creates new development opportunities for our Group.

We want to create and deliver high quality commodities: high-speed and reliable connectivity, the most attractive and unique content and entertainment, clean and affordable energy and other services and commodities for the home and for individual and business customers, using state-of-the-art technologies to provide top quality services that meet the changing needs and expectations of our customers, so as to maintain the highest possible level of their satisfaction. Concurrently, in line with the concept of ESG, we want to create the value of our Company in a sustainable manner taking into account and addressing environmental, social, responsible and transparent business issues, to the benefit of local society and all our Stakeholders.

The superior goal of our strategy is the permanent, long-term growth of the value of Cyfrowy Polsat for its Shareholders. We intend to achieve this goal by implementing the key elements of our operating strategy based on three pillars and supported by an effective financial policy.

PILLAR I - CONNECTIVITY		PILLAR II - CONTENT	PILLAR III – CLEAN ENERGY
High-speed and reliable connectivity is critical to our work, education and entertainment. Easy communication with friends and family		Attractive content and excellent user experience ensure entertainment wherever, whenever and on whatever device you want	Affordable, clean energy is essential to the daily functioning and further development of the Polish society and economy
●	growth of revenue from services provided to individual and business customers through the consistent building of our customer base value by maximizing the number of users of our services as well as the number of services offered to each customer and simultaneously increasing average revenue per user (ARPU) and maintaining a high level of customer satisfaction		●	building a position on the clean, energy market, in particular from the sun, wind, biomass, thermal waste treatment and building a complete value chain of a hydrogen-based economy, which creates opportunities to build a new stream of revenues for Polsat Plus Group and will bring tangible social benefits in the form of greenhouse gas emissions reduction
●	growth of revenue from produced and purchased video content by expanding its distribution, including a search for new channels of exploitation of rights, maintaining the audience shares of channels produced by us
●	use of opportunities arising from the advancing technological changes and market opportunities in order to expand the scope of our products and services		●	analysis of additional development opportunities in other prospective directions such as off-shore wind farms or nuclear technologies
●	effective management of the cost base of our integrated capital group by exploiting its inherent synergies and economies of scale
●	effective management of the Group’s finances, including its capital resources

Growth of revenue from services provided to individual and business customers through the consistent building of our customer base value by maximizing the number of users of our services as well as the number of services offered to each customer and simultaneously increasing average revenue per user (ARPU) and maintaining a high level of customer satisfaction

Our goal is to effectively build revenue from the sale of products, services and commodities to our customers. By actively predicting new trends and reacting to the occurring market changes, we will continue to create products that will satisfy the evolving needs of our customers.

The factor that will have a positive impact on revenue is the possibility of cross-selling our existing and future products and services to the customer base of Polsat Plus Group. We create a unique portfolio of products and services which is targeted at customer bases of companies composing our Group. Properly addressed, both through the sale of additional single products or a multiplay offer, this potential may gradually increase the number of services per individual user, thus increasing revenue per customer and at the same time favorably impacting the level of satisfaction of our customers.

The integrated services market in Poland is still developing, especially outside big cities and therefore it has substantial growth potential. We intend to continue expanding our portfolio of products and services, relying both on own projects, as well as on strategic alliances or acquisitions. We trust that a comprehensive and unique offer of combined services (television offered in diversified access technologies including a model based on online applications, mobile Internet based in particular on the cutting-edge 5G technology, high-speed fixed broadband with high throughputs and voice services) and the possibility of up-selling additional services (e.g. clean energy from renewable sources, premium content services, entertainment services as well as other services or solutions for the home), when provided via diversified distribution platforms, will be decisive from the point of view of our competitive edge. It will also enable us to retain our existing customer base and offer an opportunity to acquire new customers on the pay TV, telecommunication and energy markets as well as in the area of other services for the home and for individual and business customers.

Growth of revenue from produced and purchased video content by expanding its distribution, including a search for new channels of exploitation of rights and maintaining the audience shares of the channels that we produce

The channels we produce and broadcast enjoy strong, well-established positions on the Polish TV and high ratings in their respective target groups. Our goal is to maintain our audience share at a stable level and consistently enhance our viewer profile. We believe that by making sensible investments in programming and wider distribution of our own content we will be able to gradually improve our viewer profile. This in turn will have a positive effect on the pricing of advertising airtime that we offer.

The second crucial element in building the segment's value is the widest possible distribution of produced and purchased TV content, both in terms of the customer groups it reaches (FTA, pay TV and online access) and the technologies they use (terrestrial, satellite, Internet, mobile). We want to invest in development and build the market position of our content brands, which will then be distributed via a number of channels adjusted to the evolving needs of our customers. These efforts, in our opinion, will not only allow us to maximize benefits of the wide-scale distribution of our video content, but will also ensure a higher level of satisfaction among our customers and viewers, who will have more freedom to decide what, where and when to watch.

Use of opportunities arising from the advancing technological changes and market opportunities in order to expand the scope of our products and services

We seek to offer wide accessibility to our products and services to each of our existing and potential new customers. Therefore, beside the continuous development of technologies which have built the scale of our company in the past, we pay attention to the development of new products which are meant to facilitate the availability of our content and the services we offer. For everyone. Everywhere.

The intertwining of the telecommunication and media worlds, in particular the wide availability of high speed mobile transfer technologies as well as the constantly improving quality of fixed-broadband connections, allows us to develop equipment and technologies which break the limitations with regard to accessibility or ownership of certain telecommunication infrastructure. The OTT (over-the-top) technologies are expanding distribution markets for content producers and we intend to actively leverage on that. We invest in new technologies, equipment and applications, and we pursue opportunities to enter into strategic alliances or acquisitions, with a view to facilitating access to the content we produce for our customers. We also intend to leverage on the changes on the Polish content market and take advantage of the opportunities presented by the evolving needs and expectations of Polish consumers, as well as changes in the ways of media consumption triggered by cutting-edge data transmission technologies in order to offer our customers an extensive range of services adjusted to their needs and expectations. By developing our content and telecommunication offer and expanding it to include complementary products and services, we seek to acquire new customers, build ARPU and improve customer satisfaction and loyalty.

An effective combination of telecommunication and content products provides new opportunities for distribution of content. Thanks to this combination, attractive content and a wide range of our services can be delivered through a variety of reliable distribution channels – via satellite (DTH), digital terrestrial television (DVB-T), Internet television (OTT), Internet platforms, applications and portals (video online), mobile (LTE and 5G) and fixed-line (IPTV) technologies – to all consumer devices from TV sets through PCs and tablets to smartphones.

Modern technology advancement is also a critical factor contributing to the transition in our country towards clean, zero and low-emission energy. We want to be an active participant of this transition. We intend to take advantage of emerging market opportunities and invest in technological innovations because we believe that they are essential in order to accelerate the energy transition and decarbonization in Poland. We set ourselves ambitious goals with respect to the construction of zero and low-emission sources of electric energy that on the one hand constitute an opportunity to continue the development of our business in the mid and long-term, and on the other support the sustainable development of the Polish society and economy.

Concurrently, we will analyze in detail emerging market and investment opportunities, such as investments in unique real estate or prospective business projects that have potential to generate high rates of return in the mid-term. We believe that such projects present an attractive opportunity to invest available funds.

Building a position on the clean energy market, in particular from the sun, wind, biomass, thermal waste treatment and building a complete value chain of a hydrogen-based economy, which creates opportunities to build a new stream of revenues for Polsat Plus Group and will bring tangible social benefits in the form of greenhouse gas emissions reduction

With a view to strengthening our unique offer of integrated services we have decided to establish a new, third strategic pillar based on clean energy. We believe that the transition towards clean, zero and low-emission energy in Poland is a perfect moment to enter this prospective market by new players and creates new development possibilities for Polsat Plus Group. We believe that investments in the development of clean, renewable energy sources constitute a practical implementation of the ESG concept and can bring our Group, our Stakeholders and the local society tangible economic and social benefits, in particular in the form of greenhouse gas emissions reduction. According to our estimates, our current investment plan, consisting in the installation of ca. 1000 MW of clean power generation capacity in the years 2022-2026, will contribute to the reduction of greenhouse gas emissions by over 2 million tons of CO2 equivalent annually.

We want to build a new stream of revenue from the sale of clean energy to business and individual customers. We expect that demand for clean energy in Poland will exhibit a strong, upward trend in the following years. This trend will be supported by a set of factors, including the consistent regulatory policy implemented at the European Union level and directed at achieving climate neutrality by 2050, the changing geopolitical situation and increasing demand for energy resulting from Poland’s economic growth. In order to build and successively strengthen our position on the energy market in Poland we intend to invest in projects related to the production of energy from photovoltaics, biomass, wind farms and thermal waste treatment. We also want to invest in the future by building a complete value chain of a hydrogen-based economy, which may contribute significantly to the reduction of harmful substance emissions (including CO2). Furthermore, we want to actively analyze the possibilities of investing in other prospective sources of energy such as nuclear technologies.

In the years 2022-2026 we plan to invest approximately PLN 5 billion in order to achieve ca. 1000 MW of clean power generation capacity and approximately PLN 0.5 billion in the construction of the value chain of an economy based on the fuel of the future - hydrogen.

Effective management of the cost base of our capital group by exploiting its inherent synergies and economies of scale

We are convinced that building a closely integrated group that combines connectivity, content and energy services offers an opportunity for tangible synergies and for securing significant competitive advantages. We implement numerous projects aimed at simplifying the Group’s structure by integrating relevant teams and harmonizing business processes and IT systems in the entire Group, which enables us to achieve tangible cost synergies. On a continuous basis we pursue optimization efforts aimed at adapting our cost base to current market conditions and our Group’s situation.

We believe that our engagement in the clean energy sector will also generate sizeable synergies and in the mid- and long-term will support operating in-line with a sustainable business-model. In particular, access to clean energy at lower prices will allow us to further optimize the costs of our operating activities and will also help us strengthen our relationships with B2B and B2C customers interested in purchasing clean energy, which will have a positive impact on the results of our strategy.

Effective management of the Group’s finances, including its capital resources

The financial policy and capital resources management policy that we adopted define the method of using funds generated from our operations. To guarantee the continuity and stability of the Group’s operations the generated free cash flow is used in the first place for financing current operations and for investments indispensable for the development of the Group. Simultaneously, we continually exploit arising development possibilities and investment opportunities, which allow us to make our products and services more attractive, provide new methods of their distribution or create additional value for our Shareholders.

Our capital resources management policy assumes maintaining a balance between leveraging on emerging market and investment opportunities and regular dividend payouts to Shareholders of the Company in accordance with the applicable dividend policy of the Company. Concurrently, we intend to maintain the indebtedness of Polsat Plus Group at a safe level, ensuring an optimal structure of financing of our operating activities through the use of debt financing. When formulating the financing structure the Management Board will take into account in particular the expectations of the Shareholders of the Company expressed in the Articles of Association of the Company.

1.3. Our ESG strategy

Along with the announcement of the Strategy 2023+, we have also structured our sustainable growth strategy which includes ESG (environmental, social responsibility and corporate governance) factors.

We take responsibility for preventing further climate changes and actively undertake steps to improve air quality in Poland
E (Environmental)	●	New investments – by producing over 2 TWh of green energy per year we will contribute to the reduction of CO2 emissions in Poland by more than 2 million tons yearly.
	●	Renewable energy sources – we use energy solely from low or zero emission sources(1).
	●	Car Fleet – we successively increase the share of low-emission vehicles in the car fleet of Polsat Plus Group (approx. 12% in 2023).
	●	Circular economy – set-top boxes used by our customers, are coming back to the market after they are returned and refurbished while other equipment is being recycled.
We are an active member of local society and – at the same time – we stimulate Poland’s economic and social development through our investments in digitization
S (Social)	●	Counteracting digital divide – broadest reach of modern, fast 5G Internet from Plus.
	●	Polsat Foundation – we are a key partner of the Foundation which during over 25 years has helped to finance medical treatment and rehabilitation for suffering children.
	●	Responsible employer – we ensure friendly and safe working environment as well as equality and diversity to all our employees.
	●	Protection and safety of children – safety is DNA of our operations, therefore we take care of safety of the children and youth (among others, safety in the network and television content).
We develop our business in a transparent and sustainable manner to the benefit of all our stakeholders
G (Governance)	●	Codes of Ethics – implemented codes of business conduct as well as internal procedures and systems guarantee the highest standard of integrity.
	●	Transparency – we ensure high quality financial and ESG reporting in combination with regular, transparent and direct communication with all our stakeholders.
	●	Cybersecurity – while being aware of challenges in this area, we aim at the best possible data security and protection for our customers and employees, as confirmed by ISO 27001 certificate.
	●	Experience, trust, reputation – our companies’ Management Boards are served by individuals with many years of work experience in the Group.

The next step in developing our ESG strategy, was the adoption, in November 2022, of a framework document linking Polsat Plus Group's external financing with its long-term sustainability goals (“Polsat Plus Group Sustainability-Linked Financing Framework”). This document presents our sustainability strategy and especially the environmental measurable goals of our business plan and our ambition to fight against climate change and improve air quality in Poland by taking actions and making investments to help accelerate Poland’s transition towards green energy. Moreover, by incorporating sustainability-linked instruments in our funding policy, we aim to strengthen our commitment to drive the effort to fight global warming. To showcase the central role in the transition towards a sustainable economy, we use this Framework to issue debt instruments in sustainability-linked format across both loans and bonds (for more details on sustainability-linked financing please see item 4.3. – External financing).

Our Sustainability-Linked Financing Framework underwent an external evaluation, documented by a publicly available Second-Party Opinion conducted by Sustainalytics.

Below we present the key performance indicators and quantified long-term sustainability performance targets that the Group will strive to achieve, along with their expert assessment in terms of relevancy and the level of ambition set:

KPI	Strength of KPI	SPT	Ambitiousnessof SPT
Absolute scope 1 and 2 GHG emissions (tCO2)	Very Strong	Reduce absolute scope 1 and 2 GHG emissions by 75% by 2025 and 80% by 2030 relative to a 2019 baseline	Highly Ambitious
Renewable energy generation (GWh)	Adequate	Increase renewable energy generation to 800 GWh by 2025 and to 1,600 GWh by 2030 relative to a 2021 baseline	Ambitious
Green hydrogen production (tonnes)	Adequate	Increase green hydrogen production to 1,500 tonnes a year by 2025 and 3,000 tonnes a year by 2030 relative to a 2021 baseline	Ambitious
Share of zero-emissions energy in total energy mix (%)	Strong	Increase the share of zero-emissions energy in the total energy mix to 25% by 2025, 30% by 2026 and 50% by 2030 relative to a 2019 baseline	Ambitious

The full document is available at:

https://grupapolsatplus.pl/sites/default/files/polsat_group_sustainability_linked_financing_framework_1.pdf

1.4. Development prospects

We are the parent company of the largest media and telecommunications group in Poland. We have gathered under one roof all the key assets which allow us to offer customers a unique portfolio of products and services. In line with our strategy, we focus on marketing and sales activities aimed at cross-selling standalone products and services to our customer base and at selling our bundled services offer. We see our future development path in this strategy. We think that along with the development of modern fixed-line and nationwide radio infrastructures, connectivity will continue to shape not only the telecommunications market but also the content distribution market. We believe that broadband Internet access services that Polsat Plus Group offers in 5G and advanced fixed-line technologies will allow us to grow our customer base, with an emphasis on the integrated services customer base.

We develop our portfolio of integrated services. The Polish bundled services market is characterized by a relatively low level of development. According to research conducted by the European Commission, saturation with bundled services in Poland is still significantly lower compared to the average saturation in the European Union. Concurrently, our customers are increasingly interested in bundled services, a trend reflected in the very good sales results of our bundled services offer. We are convinced that our combination of pay TV and telecommunication services, including in particular broadband Internet access in both high quality 5G as well as fiber optic technologies, will allow us to benefit from the growth potential of the Polish bundled services market. By increasing the number of services sold to each customer we are able to generate growth of average revenue per customer (ARPU) and effectively increase our customers’ loyalty.

We address our convergent offering to new target groups. Furthermore, we use our infrastructure to expand the reach of services provided by Polsat Plus Group in fixed-line technologies. We develop new TV products, such as, for example, television in IPTV and OTT technologies, which, in our opinion, will become an attractive alternative to offers of cable operators. We are of the opinion that assets owned by Polsat Plus Group, such as a widespread sales network and own advertising channels, shall allow us to achieve satisfying sales results on our fixed-line services while maintaining high cost efficiency of operations.

We consistently strive to strengthen our position as the aggregator and distributor of content. We believe that as a Group we have a unique, hard to duplicate and at the same time highly attractive programing offer. Currently, the attractive content and wide range of Polsat Plus Group’s services are delivered through a variety of reliable distribution channels – via satellite (DTH), digital terrestrial television (DVB-T2), LTE and 5G mobile technologies and fixed-line technologies (FTTH, HFC, ETTH, xDSL, OTT, IPTV) – to all consumer devices, from TV sets and PCs to tablets and smartphones. We closely study the evolution of our customers’ expectations and work to satisfy their growing needs. We focus on building the IPTV and OTT pay TV offers as we believe it represents a significant step in Polsat Plus Group’s continued development on the pay TV market. The services live up to customers’ expectations by offering an access to a wide range of the unique content in flexible tariff plans and short subscription periods.

2. Our business

We are the leading pay TV provider in the country. We offer a complete package of multimedia services designed for the entire family: pay TV via satellite, terrestrial and online (IPTV and OTT). Additionally, Cyfrowy Polsat is the parent company of Polsat Plus Group - the largest provider of integrated media and telecommunications services in Poland.

Our mission is to create and deliver the most attractive TV and online content, telecommunications products and other services for the home as well as for individual and business customers, using state-of-the-art technologies, to provide top quality multiplay services that match the changing needs of our customers while maintaining the highest possible level of their satisfaction. We are guided by the principle “For everyone. Everywhere” and we aim to satisfy every customer’s needs with our products and services accessible at any time and on any device regardless of the method of service provisioning.

2.1. Our products and services

Our pay TV offering. We are the largest pay TV provider in Poland. We provide pay TV services under the ‘Polsat Box’ and ‘Polsat Box Go’ brands. In order to meet the changing trends in television content consumption, we provide our customers with TV services in such technologies as satellite (DTH), Internet (IPTV and OTT) and terrestrial (in DVB-T2 HEVC standard). In addition, we provide additional services aimed at building customer value such as our OTT platform Polsat Box Go, access to the Disney+ platform, VOD/PPV, online video and music services, catch-up TV, Multiroom HD services and paid premium content channels.

Our programming strategy is to offer a wide range of channels that appeal to the whole family at attractive prices. Our customers have access to over 160 TV channels which focus on diverse topics: general, sports, movie, lifestyle, education, music, news/information and children’s channels. Our contract pay TV services consist of four basic packages, which vary in the number of available channels and additional services depending on the subscription amount, and are offered for a fixed period of time, usually 24 months. We also offer the opportunity to purchase 12 add-on packages, including 9 premium content packages, which are available for a fixed or indefinite period of time, providing flexibility in customizing the offering.

Premium content is an important element that builds the value of our pay TV offer, and this is one of the reasons why we have introduced sports and film TV packages to our offer, such as Polsat Sport Premium, Eleven Sports, Canal+ Sports 3 and 4, HBO with HBO Max service and FilmBox with HBO Max service. A differentiator of our TV offer is access to the Disney+ platform under a subscription agreement, which Polsat Plus Group offers to its customers as the only operator of pay TV and telecommunication services in Poland. The full current offer of pay TV services is available at polsatbox.pl.

As part of our pay TV offer we offer our customers the opportunity to rent high-quality set-top boxes. We view subsidizing of set-top boxes as a tool supporting customer acquisition. We operate on the principle that the higher the price of the package the lower the price of the set-top box and the higher set-top box subsidy incurred by us. All new set-top boxes rented by us are produced in-house at the Group’s manufacturing plant in Mielec.

Online video. In addition to the basic and add-on packages, our offer also includes access to the Polsat Box Go service and app, which offers paid content from the Group and third party producers and broadcasters (including an extensive library of VOD content and more than 130 online channels). Polsat Box Go offers several hundreds of hours each month of live coverage of the largest national and global sports events, exclusive full seasons of the latest Polish premium series, the latest movies, news and entertainment programs, Ukrainian language channels and channels broadcast in 4K quality, and access to Disney+ in one of the packages.

Polsat Box Go provides users with content in two models. The first one is single access, in which the customer pays a fixed amount for access to a specific content. The second model includes access to packages of materials and/or channels in return for a monthly access fee. Thanks to the www.polsatboxgo.pl website and dedicated applications the content of Polsat Box Go is available on a wide array of consumer devices. Due to the flexibility of the offer, Polsat Box Go subscriptions are recognized as prepaid services.

Multiplay strategy. Bundling of services is one of the strongest trends on the Polish media and telecommunications market. In keeping with the rapidly changing market environment and our customers’ preferences, who seek media and telecommunications services at affordable prices from a single operator, with a single contract, a single bill, and a single fee, we consistently pursue our multiplay strategy, which allows us to easily and flexibly bundle our pay TV services with other products and services offered by our Group, in particular mobile telephony services offered by Polkomtel and broadband Internet access services offered by Polkomtel (mobile and fixed Internet) and Netia (fixed Internet). Currently, almost 100% of Poles are covered by our subsidiary’s LTE Plus Internet service and almost 97% by LTE Plus Advanced Internet. Moreover, over 23 million people are within the footprint of our 5G Plus network with transmission speed of up to 600 Mbps while already 6 million people are covered by our 5G Ultra Plus network offering transmission speed of up to 1 Gbps. With the planned aggregation of existing radio resources with the 3600 MHz band acquired in the 5G auction at the end of 2023, we plan to increase the maximum technological speed to as much as 2 Gbps. What is more, over 6 million Polish households are currently within range of our fibre-optic Internet service, which is available over both Netia's extensive nationwide fixed line infrastructure and in wholesale access via other operators' fiber broadband networks.

The successful implementation of a multiplay strategy helps to maintain high levels of customer loyalty, thereby reducing churn and increasing the average revenue per customer.

Other services. We also provide signal broadcast services to television and radio broadcasters. These services include the provision of transponder bandwidth, broadcasting and encoding the signal and its distribution to networks of other operators, including cable operators.

How do we provide pay TV and online video services? We have signed a long-term contract with Eutelsat S.A. regarding the use of capacity on eight transponders on Hot Bird satellites. Our broadcasting center located in Warsaw enables us to transmit TV channels in SD, HD and 4K quality. We also have a backup broadcasting center located in Radom, which guarantees broadcasting continuity. Access to TV channels offered in our DTH pay TV packages is secured by a conditional access system that we lease from the company Nagravision SA. Moreover, we cooperate with another provider of a conditional access system - Irdeto B.V. Beside securing digital content transmitted using DVB-T2 technology, the Irdeto system also provides security of the satellite system (DHT) and IPTV. Furthermore, Irdeto provides us with specialized and complete monitoring of the Internet enabling the collection and analysis of occurrences that may infringe copyrights of entities in our Group.

Our modern streaming platform Polsat Box Go, whose applications were built using modern UX/UI (User Experience and User Interface) trends, is adapted to the most important operating systems and a wide range of consumer devices. We have developed unique technological competences in encoding and streaming audiovisual content on the Internet, as well as optimizing distribution of this type of signal. We apply proprietary solutions, which enable us to provide services optimally adjusted to the limitations of Internet infrastructure in Poland and the capacities of external systems with which our applications are integrated. We use our own servers and our own CDN (Content Distribution Network) infrastructure.

Retail sales channels. Retail customers can purchase our services and products through our stationary sales network, which consisted of 846 physical points of sale throughout the country as of December 31, 2003. These points of sales offer both pay TV under the Polsat Box brand as well as other services offered by the Polsat Plus Group companies.

In the digital era, online sales channels play an increasingly important role in the commercial area, ranging from the presentation of a rich offer to the possibility of conducting the full purchase process and after-sales service on-line. We maintain a commercial website, www.polsatbox.pl, with detailed information about the various products and services we offer, as well as news and promotions.

Another sales channel is the call center. Our call centers are available to our present and potential customers 24 hours a day, seven days a week, and are responsible for providing comprehensive and professional customer service, as well as informing customers about our services and placing subscriptions.

Customer relations management. In a highly competitive market, the quality of customer service is an important factor that often determines the choice of a particular operator. We consistently improve the quality of our customer service using the latest technologies. We use an advanced customer relationship management system that allows us to process and document all customer requests in a comprehensive, timely and efficient manner.

The core of the Group’s customer service is the customer service call center. This system comprises eight separate call centers integrated through an intelligent call routing system ensuring a twenty-four hour, seven-day a week phone service. Within the Group we have approximately 1,650 operator stands as well as approximately 920 back-office stands which handle written and electronic requests (including technical requests). We actively develop alternative forms of contact through social media, chat and web forums.

We also provide customer service using advanced self-service solutions to manage subscriber accounts. These solutions are offered in a form of online services and a mobile application iPolsatBox. These tools include, among others, constant and free-of-charge access to up-to-date information on billing, current offers, current usage, they allow to purchase additional packages and services, effect online payments and modify contact details. Moreover, our services include a technical support section, FAQs, an online contact form and an online communication channel.

Customer retention is one of our key business areas. Our goal in this area is to minimize value and volume churn, thereby effectively securing revenues from the customer base. Through a comprehensive set of analytical tools, we are able to verify and learn about the needs of our customers. This allows us to effectively use this knowledge in dedicated retention activities, which we initiate already during the contract term (proactive retention process).The reactive retention process is initiated by the customer declaring their desire to stop using our services. As part of this process, a specialized team of consultants contacts the customer and presents new, attractive terms of further cooperation.

All processes implemented are based on value creation and the consistent re-selling of further services to customers. This is possible thanks to the broad product portfolio offered by the Group companies. The implementation of our maintenance offers is possible in any sales channel - whether online, via the telephone channel with home delivery or at any point of sale.

2.2. Competitive environment and key market trends

2.2.1. Pay TV market in Poland

Market value and growth dynamics

The Polish pay TV market is a mature market characterized by a high degree of penetration estimated by PMR at ca. 60% of households. On the other hand, pay TV operators actively increase the loyalty of their subscriber bases, mainly through service packaging, i.e. by combining pay TV with telecommunication services (Internet, phone), or developing and offering to customers their own online video services as a complementary service to the core offering. This trend leads to an increasingly strong interpenetration of pay TV and telecommunication markets.

Both in terms of the number of subscribers and value, the situation on the Polish pay TV market is stable. According to PMR estimates, in 2022 the market value was stable YoY and amounted to PLN 6.3 billion, with a stable customer base at the level of approximately 10 million subscribers. At the same time ARPU from pay TV services in Poland continues to be among the lowest in Europe (ca. PLN 51 in 2022). In this context the strategy of competing for customers with the merit and quality of the offered content rather than with price is one of the key trends affecting the value of the pay TV market. Operators expand their offers by adding premium packages and proposing attractive film or sports content, which leads to higher ARPU from a stable base. Also the dynamically growing IPTV segment, and the systematically increasing penetration of customer base with VOD services, are the factors influencing the value of pay TV market.

The market for VOD and OTT video-on-demand services is growing rapidly in Poland. PMR estimates that the household penetration of paid VOD services in 2022 stood at around 51%. It is worth noting that there is a trend of coexistence of traditional pay TV and VOD services in Poland, as a result of which the growing penetration of VOD services does not translate into a decrease in the percentage of households using pay TV. Due to the tendency in the Polish market to share accounts and subscribe to more than one service at a time, the number of VOD users is more meaningful from a market value perspective. According to PMR estimates, VOD services in Poland were already used by more than 14 million users in 2022, with less than 70% of users paying for content. The value of the market for all VOD services in Poland in 2022 was almost PLN 2 billion (+26% YoY), with almost 90% of this value generated by paid VOD services.

Competitive environment

Pay TV services in Poland are offered by satellite platform operators (DTH), cable TV operators as well as by IPTV providers. According to our estimates, sector data and PMR forecasts, in 2022 operators of satellite TV platforms had the dominant share, both in terms of the number of subscribers and revenue, on the pay TV market – approximately 49% in terms of subscriber base, followed by digital cable TV operators with approximately 33%. IPTV is the pay TV market segment which demonstrates the strongest growth and its market share increased to ca. 17%. At the same time, paid VOD services are becoming an increasingly important part of the pay TV market in Poland.

Pay TV services provided by operators of satellite platforms and cable TV are in principle substitutes. At the same time competition between the two technologies of access to pay TV services is restricted due to different geographical reach of each of these services. DTH operators are able to provide their services to both, the customers who live in cities as well as to those living in less densely populated and rural areas without incurring significant additional costs, whereas cable TV operators concentrate on the inhabitants of densely inhabited areas where highly developed fixed-line network infrastructure already exists or in locations where the establishment of such infrastructure involves a relatively low cost per customer. Since cable infrastructure in Polish towns with up to 20 thousand inhabitants, as well as in suburban and rural areas which are inhabited by more than half of Poland’s population, is poorly developed, hence these areas are not attractive for cable TV operators and they remain the natural target markets for DTH.

DTH operators. According to our estimates and PMR forecasts, the subscriber base of the DTH market in Poland remains under moderate pressure and in 2022 was just under 5.0 million (-3% YoY). DTH platforms are losing users in favor of the more advanced technologically IPTV offers, especially in areas with access to high quality broadband infrastructure.

Three DTH platforms operate in Poland: Polsat Box (until August 2021 it operated under the Cyfrowy Polsat brand), Canal+ (operating until September 2019 under the nc+ brand) and Orange, while the market is practically divided between the first two. Orange does not offer pay TV as a standalone service but only as an add-on to its integrated offer. Based on own and PMR forecasts, we estimate that at the end of 2022 the share held in the Polish pay TV market by our platform Polsat Box, in terms of the number of subscribers, was approximately 31%.

In less populated rural and suburban areas, where cable and broadband infrastructure is underdeveloped, digital terrestrial TV with around 30 channels aired in the DVB-T standard until June 2022 and from June 2022 also in DVB-T2/HEVC standard, presents a real alternative to satellite pay TV services. PMR estimates that the percentage of households that rely exclusively on free-to-air terrestrial TV is around 30% and will remain at that level for the next few years. However, it is worth noting that the pay TV offer surpasses alternative solutions, such as digital terrestrial TV, in terms of the quality of the programming offer. Dedicated and premium content, exclusive content available only from a given operator, live programs, or coverage of attractive sports events remain the key distinctive features.

Cable TV operators. The Polish cable TV market is strongly fragmented, with nearly 300 companies operating on it, according to UKE. The four dominating players, however, are: Play (after taking over UPC), Vectra Group, Inea and Toya. PMR estimates that in 2022 the combined share held in the Polish cable TV market by these three operators amounted to 87% in terms of the number of subscribers.

The Polish cable operator market is undergoing a process of consolidation, which increases the chances of building a strong convergent offering and leveraging the potential of customer bases. In recent years, the Polish market has seen three transactions that are significant in terms of size. In 2018, Polsat Plus Group took control of Netia, 2020 saw the consolidation of Poland's second and third largest cable operators, i.e. Vectra and Multimedia Poland, and 2022 the completion of mobile operator Play's acquisition of control of UPC.

Digital television through the IP protocol (IPTV). The leading IPTV providers in Poland are Orange Polska and Netia, a company belonging to Polsat Plus Group. The remaining part of the IPTV market is fragmented between Vectra Group and local Internet service providers (ISPs). The predominant model of sale of IPTV services on the market relies on bundling of the service, especially with broadband Internet access.

The value of the IPTV market reached nearly PLN 790 million in 2022 (+11% YoY), with the number of subscribers reaching about 1.7 million (+13% YoY). IPTV is the most rapidly growing segment of the pay TV market, among others due to the improving quality of broadband connections, fiber optic networks in particular, following infrastructural investments. In spite of the high growth dynamics, IPTV market still encounters barriers, mainly due to technological obstacles which result from still restricted coverage of advanced infrastructure capable of offering sufficient data throughputs for providing IPTV services, especially outside big cities.

IPTV development enhances competition between IPTV operators and cable TV operators, especially in big cities where high quality broadband infrastructure exists, including fiber optic links. In less populated areas, on which DTH operators focus their activities, the influence of the expansion of IPTV is less pronounced due to the underdeveloped infrastructure for broadband Internet access. At the same time it is worth stressing that the effect of outflow of DTH and cable TV subscribers is to some extent compensated for by the migration of these customers to the IPTV standard, as a result of which the total pay TV subscriber base in Poland remains stable.

Video on demand. The popularity of streaming services offering video-on-demand content is growing in Poland. The development of OTT and VOD services in Poland is positively influenced by the progressive improvement of the quality of broadband connections and, consequently, the speed of data transmission as well as by the changing preferences of consumers who want to access their favorite content anytime, on any device, anywhere. The dynamic growth of the paid sVOD market is also influenced by the increasing range of content available exclusively on a given platform.

The Polish VOD market is dynamic and highly fragmented. Several dozen online services operate on the market, including those offered by TV broadcasters, DTH satellite platform operators, cable TV networks or telecommunication operators as well as by global players. According to PMR estimates, in 2022 Netflix remained the undisputed leader in terms of subscriptions, followed by Player and Viaplay platforms on the podium. However, it should be noted that after a strong debut in 2021, Viaplay, which based its content offering on numerous sports rights, announced its exit from all markets outside Scandinavia, including Poland, already in July 2023 due to financial problems. Other major players in the Polish market include HBO Max and Disney+, Polsat Box Go and CDA.

VOD services are available in free (aVOD) or paid models, mainly based on a monthly subscription purchased directly from the platform operator (sVOD) and sales in the so-called operator channel, i.e. VOD subscriptions are purchased and paid for as part of the telecommunications bill. PMR estimates the number of paid VOD subscribers at around 6.5 million, of which almost 74% are direct sales. In Poland, there is a growing trend among sVOD users to subscribe to more than one service at a time. The number of sVOD subscriptions per household is steadily increasing, reaching 2.2 in 2022.

In Poland, a major challenge in the sVOD market is the phenomenon of account sharing, i.e. the use of a single subscription by several households, which limits the ability of platform operators to monetize content. According to PMR estimates, as many as 40% of the 5.8 million households with access to sVOD services in 2022 were using someone else's subscription. The first operator to combat this phenomenon is Netflix, which restricted subscription sharing options at the end of May 2023.

Despite dynamic growth in recent years, OTT and VOD services in Poland exert limited substitution pressure on the pay TV market. PMR's research shows that VOD is more of a complementary service to traditional pay TV. An important factor contributing to this trend is the popularity of the distribution of VOD services in the operator channel. The majority of the most popular VOD services are available from telecom and pay TV operators. In addition, pay TV operators are effectively competing with global VOD players by developing their own VOD platforms and offering Polish-language content better suited for local audiences, premium content or exclusive sports broadcasts. Bundling of services is also important, especially the bundling of TV services with Internet access, which has a positive effect on the loyalty of pay TV users.

Development forecasts for the pay TV market

According to PMR forecasts, in the years 2023-2028 the pay TV market in Poland will be slowly growing (CAGR of 1.2%), with a slight erosion of the subscriber base (CAGR 2023-2028 of -0.6%). At the same time, the number of households using paid access to VOD services is expected to continue to grow rapidly (CAGR of +5.0%). The market should remain under the influence of three major trends: high market penetration of pay TV services, dynamic growth of IPTV technology and limited competition from free-to-air terrestrial TV and VOD services.

According to PMR, in the years 2023-2028 satellite platforms will remain the biggest segment of the pay TV market in Poland, reaching market share of ca. 39% in terms of subscriber numbers at the end of the forecast period, with a 47% market share by value. Cable TV operators will remain the second major segment, with a market share of approximately 32% at the end of the forecast period and a 30% market share by value. Thanks to the highest growth dynamics IPTV services will systematically gain importance, on the back of the dynamic development of broadband Internet access networks, including fiber optic networks. According to PMR by the end of 2028 IPTV operators will have a market share of around 29% in terms of the number of subscribers and ca. 23% market share by value.

The number of VOD users in Poland will continue to grow in the coming years, mainly due to the growth of subscriptions in the paid model. PMR estimates that the number of VOD users in Poland will exceed 19 million by 2028, of which more than 80% will be users of paid VOD services, especially sVOD. As a result, the value of the market for paid VOD services in Poland will grow at an average annual rate of around 12% between 2023 and 2028, with the growth rate of this segment gradually slowing down over time as a result of increasing saturation and market competitiveness.

Pay TV operators will aim to increase their competitiveness by proposing unique offers to their customers. Bundled offers containing telecommunication and content services combined with sales of equipment (tablets, smartphones, laptops, TV sets) and supplementary services as well as an extended offer of exclusive content are of key importance for the enhancement of customer loyalty and own customer base retention. Access to broadband Internet, including fiber optic access, is a particularly important element, which at the time of the pandemic became key from the point of view of maintaining customer loyalty. In this context, infrastructure investments aimed at increasing the coverage and quality of broadband networks are becoming increasingly important. Offering premium content will continue to be crucial, as, on the one hand, it will attract subscribers looking for unique, high quality content, and on the other it will support ARPU growth.

A clearly visible trend in the Polish pay TV market in 2022-2023 was the modification of price lists by all major players, dictated, among other factors, by persistent inflationary pressures. The increases concerned both TV packages and additional fees, such as the rental of a set-top box or the use of services based on another operator's infrastructure. The increase in pay TV prices in Poland will have a positive impact on the value of the market, but may also lead to a higher incidence of cord-cutting and migration of customers to terrestrial TV or VOD platforms.

State-of-the-art technologies will continue to gain in importance at a fast pace as they enable operators to provide personalized content (such as content on demand) via the Internet, to mobile devices in particular. Substitution pressure from independent providers of OTT and VOD services present on the market (e.g., Netflix, CDA, HBO MAX or Amazon Prime) will still continue to be limited in Poland. Moreover, pay TV providers will compete with the offers of the above mentioned services by developing their own VOD platforms, which are complementary to traditional TV services, and by introducing mobile solutions. We think that in upcoming years VOD services will supplement and extend the offers available on the market instead of substituting linear TV.

It can be expected that the Polish pay TV market will continue to see consolidation trends, both within the sector as well as between cable TV and telecommunication operators, which can be exemplified by the finalized in 2022 acquisition of UPC cable TV by P4, telecommunication operator.

2.2.2. Bundled services market in Poland

Market value and development forecasts

Service bundling has been one of the strongest trends on Polish media and telecommunications market for several years. Operators develop their offers of bundled services in response to the changing preferences of customers, who seek media and telecommunications services from one provider at affordable prices, under one contract, with one subscription fee and one invoice. At the same time, given the high level of saturation of the pay TV and mobile telephony markets, bundling of services plays a key role in retaining existing customers. Offering bundled services allows operators to increase customer loyalty and, consequently, reduce churn rates. It also contributes to the growth of average revenue per customer.

The Polish multi-play services market has been growing systematically both by volume and value. According to PMR’s estimates, the number of services sold in packages in the years 2013-2022 recorded an average annual growth rate of 9%, increasing to 36.4 million at the end of 2022, while the total number of subscribers (both individual and business) using bundled services was estimated at over 11 million, of which 8.5 million were households. According to PMR estimates, in 2022 the value of the bundled services’ market in Poland grew at the pace of 6% year-on-year, and reached PLN 13.3 billion. Service bundling is a strong tool supporting increase of the customer base’s loyalty and customer value building. This is confirmed by the ARPU from bundled services which continued on an upward trend and amounted to PLN 97.6 at the end of 2022 (+1.9% YoY).

PMR projects that the market for integrated services will continue to grow in the coming years, both in terms of volume and value. This is due to the fact that the bundling of services has become a strategic objective for players in the telecommunications and pay TV markets. PMR expects the number of subscribers of bundled services to grow at a much slower rate in the coming years (CAGR 2022-2028 of +1.1%). The growth rate of the value of the bundled services market will gradually slow down, and the forecast average annual growth rate of the market in value terms in 2022-2028 will be 2.3%. Growth will be driven by continued ARPU growth path and increasing household penetration of integrated services. A factor supporting further growth of the bundled services market will be an increase in the quality of services stimulated by the development of fiber optic networks and the expansion of 5G networks.


Source: PMR Report on bundled telecommunication services in Poland, 2023

In subsequent years, the development of the Polish market of bundled services will be influenced not only by the low level of saturation of this market with services but also by the systematic roll out of fixed-line infrastructure and improving quality of network access, in particular higher throughput. The increased demand for higher-bandwidth Internet connections initiated during the pandemic period has solidified in the market, partly as a result of many companies maintaining remote or hybrid work, and will be further supported by EU funds flowing into Poland under the National Recovery and Resilience Plan. This creates the potential for reselling additional services to the retail market as part of a bundle. In particular, the prospects for offering IPTV/OTT pay TV services and video-on-demand content are improving.

Operators’ strategies based on combining telecommunication and media services with services from outside the telecommunications sector are also an important factor. The bundled offers of leading operators on the Polish market comprise, among others, additional services, such as the sale of electricity, as well as financial and insurance products. Consolidation trends, observed on the media and telecommunications market, may also affect the development of the bundled services market, enriching the convergent offers available to customers.

Market structure

Bundled services in Poland are provided primarily by cable TV operators and telecommunications service providers. According to PMR, at the end of 2022 over three quarters of the bundled services market, in terms of the number of subscribers, was held by four major players – Polsat Plus Group, Play-UPC partnership, Orange and T-Mobile. According to PMR estimates, Polsat Plus Group was the leader in this market, with a 27.9% share at the end of 2022.

When analyzing the structure of bundled services in Poland, one should bear in mind that the majority of operators provide multiplay services on the basis of wholesale agreements with other operators since they themselves do not have the relevant infrastructure or supporting business services to be able to create a complete portfolio of convergent services. For example, T-Mobile provides fixed-line broadband Internet access using, among others, the infrastructure of Orange Polska. Cable TV operators, in turn, offer mobile voice services in an MVNO model and acquire the entire content for their TV services from third party TV production companies. Our important competitive advantage on this market comes from the fact that within Polsat Plus Group we have all the assets which are required to be able to offer customers a fully convergent offer of telecommunication and TV services, enriched with unique content which we produce ourselves.

Both fixed-line telecommunication and cable TV operators offer their bundled services mainly in large and medium sized cities, mainly due to the geographical limitations of their landline access infrastructure. The multi-play services market in Poland is, in turn, relatively underdeveloped in less urbanized areas and therefore has the potential to grow rapidly in the suburbs, small towns and rural areas. In addition to the low penetration rate of multi-play services in less densely populated areas, Internet services provided by cable operators typically suffer in quality of service due to the limitations of the existing infrastructure. This creates an opportunity for satellite pay TV providers, such as Polsat Box, who are not bound by geographic reach, to become the leading providers of high quality multi-play services to consumers in suburbs, small towns and rural areas in Poland.

3. Significant investments, agreements and events

Issuance of sustainability-linked bonds

As part of the Bond Issuance Program of November 29, 2022 with the total maximum nominal value of PLN 4 billion, the Company issued:

(i)	2,670,000 unsecured, PLN-denominated series D bearer bonds with the nominal value of PLN 1,000 each and the aggregate nominal value of PLN 2,670.0 million on January 11, 2023;
(ii)	820,000 unsecured, PLN-denominated series E bearer bonds with the nominal value of PLN 1,000 each and the aggregate nominal value of PLN 820.0 million on September 28, 2023;
(iii)	400,000 unsecured, PLN-denominated series F bearer bonds with the nominal value of PLN 1,000 each and the aggregate nominal value of PLN 400.0 million on December 21, 2023, (jointly the “Bonds”).

All three series of the Bonds mature on January 11, 2030. The Series D and E Bonds have been assimilated and are listed in the Alternative Trading System operated by the WSE on the Catalyst market in the continuous trading system under the ISIN code PLCFRPT00070 and the abbreviated name CPS0130. The Series F Bonds have been allotted to one investor, i.e., PFR Fundusz Inwestycyjny Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych with its registered office in Warsaw and are not listed on any market.

The issuance of the Bonds is the largest corporate bond issuance by a private company in the history of the Polish capital market and, at the same time, the first Polish issuance of sustainability-linked bonds fully compliant with ICMA (International Capital Market Association) standards. The Bonds are linked to the sustainability goals described in Polsat Plus Group's Sustainability-Linked Financing Framework, thus linking the margin to the achievement of the ESG targets. The Group made a commitment to bondholders to gradually migrate to zero-emission sources of electricity used for own purposes.

Proceeds from the issuance of the Bonds will be used to support the implementation of Strategy 2023+, in particular the planned construction of 1,000 MW of installed low- and zero-emission clean electricity generation capacity and the full value chain of an economy based on green hydrogen, which will ultimately contribute to the reduction of CO2 emissions in the Polish economy by approximately 2 million tons per year.

Part of the funds raised in the Bonds issue were used for the redemption of 776,202 Series B Bonds with the total nominal value of PLN 776.2 million and 911,947 Series C Bonds with the total nominal value of PLN 911.9 million in 2023. On January 5, 2024, the Company repurchased all outstanding Series B and C Bonds (for details see item 4.3. – External financing).

Conclusion of significant financial agreements

On April 28, 2023, Cyfrowy Polsat and Polkomtel, as the borrowers, along with the following subsidiaries: Telewizja Polsat Sp. z o.o., Netia S.A., Polsat Media Sp. z o.o., Muzo.fm Sp. z o.o. and Polsat Media Biuro Reklamy Sp. z o.o., concluded the Senior Facilities Agreement with a consortium of Polish and foreign financial institutions. The concluded loan agreements are linked to the sustainability goals which Polsat Plus Group is pursuing through its Strategy 2023+: investments in zero-emission power generation capacity, production of green energy and transition of the Group companies to use solely clean, green energy in their operations.

The facilities agreement provides for a PLN term facility loan to be granted to the Company and Polkomtel up to a maximum amount of PLN 7,255.0 million, a EUR term facility loan up to a maximum amount of EUR 506.0 million and a revolving facility loan up to a maximum amount of the equivalent of PLN 1,000.0 million (“Senior Facilities Agreement”, “SFA”). The loan was disbursed on May 16, 2023. The share of the PLN and EUR term loan facility attributable to the Company amounts to PLN 679.5 million and EUR 356 million, respectively.

The facilities bear interest at a variable rate equal to WIBOR/EURIBOR for the relevant interest periods plus margin. The margin of the facilities depends on the level of the consolidated debt ratio (net debt to consolidated EBITDA) calculated jointly for certain entities from the Group in such a way that the lower the ratio, the lower the applicable margin, and also on the achievement by the Group of certain targets concerning green energy production and zero-carbon electricity consumption by specified entities from the Group.

The term of the facilities is 5 years from the date of execution of the facilities agreement and the final repayment date of each of these facilities is April 28, 2028.

The facilities were or will be utilized by the Company in particular:

(i)	to repay in full the indebtedness under the senior facilities agreement of September 21, 2015, as amended, which was made on May 16, 2023;
(ii)	to make funds available to companies implementing investment projects defined in the SFA; and
(iii)	to finance general corporate needs.

In accordance with the SFA, the Company and other entities from the Group established collateral securing the repayment of loans granted thereunder.

Detailed information on the concluded Senior Facilities Agreement and established collateral is described in item 4.3.2. – External financing – Significant financing agreements – of this Report.

Early repayment of loans

In connection with the conclusion of the Senior Facilities Agreement on April 28, 2023, the Company and Polkomtel executed an early repayment of the full amount of the term facility loan and the revolving facility loan granted under the senior facilities agreement of September 21, 2015, as amended by the amendment, restatement and consolidation deeds of March 2, 2018 and April 27, 2020.

The prepayment in the aggregate amount of PLN 8,843.7 million was made on May 16, 2023.

Changes in the Supervisory Board

On May 31, 2023, Mr. Marek Kapuściński resigned from membership in the Supervisory Board of the Company, effective immediately.

On June 29, 2023 the Annual General Meeting of the Company resolved to entrust Mr. Tobias Solorz and Mr. Piotr Żak with the functions of Vice-Chairmen of the Supervisory Board.

Distribution of profit for 2022

On June 29, 2023, the Annual General Meeting of Cyfrowy Polsat resolved to allocate the Company's net profit for the fiscal year 2022 in the amount of PLN 1,248.6 million in full to the reserve capital. The resolution of the Annual General Meeting was in accordance with the previous recommendation of the Company's Management Board of May 31, 2023, which was positively reviewed by the Supervisory Board on the same date.

The Company's Management Board decided not to recommend the dividend payout from the 2022 profit due to the capital-intensive strategic investments carried out by the Company as part of its Strategy 2023+, aimed at continuing the development of the Company's capital group over the long term in line with the overarching strategic goal of sustainably growing the Company's value for its shareholders. In particular, the funds retained in the Company will be employed for the timely implementation of currently ongoing projects involving, among others, the construction of wind farms in Miłosław, Kazimierz Biskupi, Człuchów and Przyrów with total installed capacity of 150 MW. As a result of the implementation of the above-mentioned projects, by the end of 2024, the estimated production capacity of energy from wind farms will exceed 430 GWh per year, which, on the one hand, will ensure that the Company and its capital group's internal needs for electricity are fully met, thereby offsetting the Company's exposure to fluctuations in energy prices, and on the other hand, will enable sales of clean energy to third parties.

At the same time, when making the decision not to pay the dividend, the Management Board took into account the Company's net debt ratio, which remains at an elevated level, i.a. as a result of the financing of strategic investments, as well as the unfavorable macroeconomic environment, in particular high inflationary pressure and persistently high interest rates that translate into rising debt service costs for the Company.

Acquisition of shares in PAK-Polska Czysta Energia

On July 3, 2023, in execution of the preliminary share purchase agreement with ZE PAK S.A. dated December 20, 2021, as amended, the Company acquired from ZE PAK S.A. for the amount of PLN 117.0 million 2,390,600 shares in PAK-PCE, representing approx. 10.1% of the share capital of PAK-PCE and entitling to exercise approx. 10.1% of votes at the shareholders' meeting of PAK-PCE. Furthermore, based on an annex to the preliminary share purchase agreement dated December 20, 2021 two subsidiaries of PAK-PCE, Przedsiębiorstwo Remontowe "PAK Serwis" sp. z o.o. and PCE-OZE 5 sp. z o.o., were transferred to ZE PAK and therefore were not subject of the transaction.

Following the above mentioned transaction and taking into account the shares previously acquired and subscribed for by the Company in PAK-PCE, as of the date of this Report the Company holds approx. 50.5% of shares in the share capital of PAK-PCE. In connection with the acquisition of a majority stake in PAK-PCE, as of July 3, 2023, the Group consolidates the financial results of PAK-PCE and its subsidiaries (PAK-PCE Group) using the full method.

Acquisition of shares in Pantanomo Limited

On July 3, 2023, the Company and Tobe Investments Group Limited entered into a share purchase agreement, pursuant to which the Company acquired from Tobe 4,705 shares in Pantanomo Limited, representing approx. 32% of Pantanomo's share capital. Pantanomo belongs to Port Praski capital group and its operating activities include, among others, real estate management.

The purchase price for the Pantanomo shares amounted to PLN 307.2 million and will be paid by the Company in instalments. The first instalment of PLN 107.2 million was paid in October 31, 2023, the second instalment of PLN 100.0 million will be paid by April 30, 2024, with the remainder of the price wil be paid by October 31, 2024.

Disposal of shares in Asseco Poland S.A.

On September 21, 2023, Cyfrowy Polsat sold 10,642,046 shares in Asseco Poland S.A. at a price of PLN 80.00 per share, for a total amount of PLN 851.4 million, in response to Asseco Poland S.A.'s invitation to submit offers for the sale of shares, published on September 6, 2023.

At present, Cyfrowy Polsat holds 8,405,327 shares in Asseco Poland S.A., representing 10.13% of its share capital and 10.13% of the total number of votes at the General Meeting.

Concluding financial PPA agreements

In March 2023, the Company entered into financial Power Purchase Agreements (financial PPAs) with PAK-PCE Fotowoltaika Sp. z o.o. and PAK-VOLT S.A. regarding electricity generated by the photovoltaic farm Brudzew. The contracts were concluded for a period of 15 years, with the possibility of termination in certain situations, and became effective in April 2023.

In April 2023, the Company entered into financial PPAs with Park Wiatrowy Palczyn1 Sp. z o.o. (Miłosław wind farm) and PAK-Volt S.A. regarding electricity generated by the Miłoslaw wind farm. The agreements were concluded for a period of 15 years and 6 months, starting from the first settlement in January 2024.

In November 2023, the Company entered into financial PPAs with Great Wind Sp. z o.o. (Człuchów wind farm) and PAK-Volt S.A. regarding electricity to be generated by the Człuchów wind farm. The agreements were concluded for a period of 15 years, with the possibility of termination in certain situations. The agreements will become effective in August 2024, however the parties allow for a potential postponement of this date to December 2024.

The Company committed in the financial PPA agreements to make financial settlements in order to ensure a fixed price for the sale or purchase of electricity (so-called contract for difference). The settlement price in the financial PPA agreements was established for the first year of the term and will be indexed in subsequent years by the inflation rate, subject to applicable legal regulations specifying the maximum sales price of electricity produced from renewable sources.

4. Operating and financial review

4.1. Operating review

The Company does not publish separate KPIs with respect to its core business. Key performance indicators (KPI) presented below present the operating results of Polsat Plus Group.

When assessing our operating results in the B2C area, we analyze contract services and prepaid services separately. In the case of contract services we consider the number of unique, active services provided in the contract model (RGUs), the number of customers, churn rate and average revenue per customer (ARPU). When analyzing prepaid services we consider the number of unique, active services provided in the prepaid model (prepaid RGUs) as well as average revenue per prepaid RGU. The number of reported RGUs of prepaid services of mobile telephony and internet access refers to the number of SIM cards which received or answered calls, sent or received SMS/MMS or used data transmission services within the last 90 days.

In turn, the B2B area is analyzed by us across two base dimensions. We focus on maintaining and building the scale of our customer base, expressed as the number of businesses serviced by us, as well as on measuring their value through ARPU.

	for the 3-month period ended December 31		change / %
	2023	2022	nominal	% / p.p.
Contract services for B2C customers
Total number of B2C RGUs (EOP) [thous.], incl.:	13,083	13,285	(202)	(1.5%)
Pay TV	4,843	5,049	(206)	(4.1%)
Mobile telephony	6,246	6,238	8	0.1%
Internet	1,994	1,998	(4)	(0.2%)
Number of B2C customers (EOP) [thous.]	5,795	5,934	(139)	(2.3%)
ARPU per B2C customer [PLN]	73.6	71.7	1.9	2.6%
ARPU per B2C customer (YTD) [PLN]	72.6	70.8	1.8	2.5%
Churn in B2C subsegment	7.6%	7.0%	-	0.6 p.p.
RGU saturation per one B2C customer	2.26	2.24	0.02 p.p.	0.9%
Prepaid services
Total number of RGUs (EOP) [thous.], incl.:	2,646	2,691	(45)	(1,7%)
Pay TV	98	82	16	19,5%
Mobile telephony	2,522	2,578	(56)	(2.2%)
Mobile Internet	26	31	(5)	(16.1%)
ARPU per prepaid RGU [PLN]	17.4	17.4	-	-
ARPU per prepaid RGU (YTD) [PLN]	17.4	17.5	0.1	0.6%
Contract services for B2B customers
Total number of B2B customers (EOP) [thous.]	68.8	69.1	(0.3)	(0.4%)
ARPU per B2B customer [PLN]	1,463	1,427	36.0	2.5%
ARPU per B2B customer (YTD) [PLN]	1,454	1,406	48.0	3.4%

Contract services for B2C customers

The total number of B2C customers to whom we provided contract services as at the end of 2023 was 5,795 thousand (-2.3% YoY). The erosion of the base was influenced by, among others, the declining popularity of the satellite technology as well as the continued process of merging contracts under one common contract for the household within our base. In line with our strategic assumptions, we avoid conducting an aggressive sales policy on individual products and focus on increasing customer loyalty, in particular through offering a wide portfolio of bundled services, as well as on increasing ARPU per contract customer.

The churn rate for our B2C customers amounted to 7.6% in the twelve-month period ended December 31, 2023 (+0.6 p.p. YoY). The continued low churn rate is primarily the effect of a high level of loyalty of our customers of bundled services, which results from the successful implementation of our multiplay strategy, as well as our actions aimed at fostering high customer satisfaction.

In line with the assumptions of our long-term strategy, we aim to maximize revenue per contract B2C customer through cross-selling, i.e., selling additional products and services to our customer base within the framework of our bundled services offer, and offering enhanced television and telecommunications packages (the more-for-more strategy). In the fourth quarter of 2023, average revenue per B2C customer increased to PLN 73.6 (+2.6% YoY) while in the full year 2023 it reached the level of PLN 72.6 (+2.5%). The growth of ARPU per B2C contract customer results, in particular, from the continuous building of customer value by bundling services. We believe that the growing popularity of 5G tariff plans, coupled with our more-for-more strategy, as well as continued expansion of our content offer will contribute to support customer value growth, reflected in the level of ARPU.

The number of contract services for B2C customers provided by us at the end of 2023 amounted to 13,083 thousand RGUs, i.e., 202 thousand less compared to the previous year (-1.5% YoY). The main reason for this decline was the decrease in the number of contract pay TV services by 206 thousand (-4.1% YoY) to the level of 4,843 thousand RGUs. The key drivers of this decline were a lower number of provided satellite TV services and the price repositioning and change in the strategy of offering our video online services (in 2021, we replaced the Ipla platform with the Polsat Box Go offer, which is differently positioned in terms of pricing). This decrease was partially compensated by an increasing number of TV services offered in online technologies (IPTV/OTT).

At the end of December 2023, the base of contract mobile telephony services for B2C customers remained stable YoY and amounted to 6,246 thousand.

At the end of 2023, the number of Internet access services provided to B2C customers in the contract model remained stable and amounted to 1,994 thousand. Within this service category, the share of fixed-line Internet access services is consistently increasing at the cost of declining mobile Internet RGUs. This is driven by the increasing popularity of data transmission packages in mobile telephony tariff plans (smartphones) which is associated with diminishing differences between the sizes of data packages offered in both product lines.

The saturation of our B2C customer base with integrated services, expressed in the ratio of contract services per customer, develops at a stable, high level and as at the end of December 2023 amounted to 2.26 contract services per customer. We believe that further saturation of our customer base with integrated services, including our flagship product smartDOM will positively influence the growth of the number of contract RGUs provided by us in the future and will support keeping the churn rate at a low level.

Our bundled services offer is based on a mechanism of offering attractive discounts on every additional product or service purchased from the Group’s portfolio and has a positive effect on the churn rate, RGU saturation per customer ratio and ARPU per contract B2C customer. At the end of December 2023, the number of customers using our bundled services remained strong year on year and amounted to 2,456 thousand, which translates to a 42.3% saturation of our contract customer base with multiplay services. This group of customers had 7,438 thousand RGUs as at the end of December 2023, up by 25 thousand (+0.3% YoY). Bearing in mind our strategic goal - the successive build-up of revenue per contract customer through cross-selling of additional products and services - our bundled services offer is perfectly in line with our strategy. Therefore, despite having reached a high level of our multiplay base, we will continue to further popularize this program among our customers.

Prepaid services

The number of prepaid services provided by us decreased by 45 thousand (-1.7% YoY) to 2,646 thousand as at 31 December 2023. The main reason behind the decline in the prepaid service base in the analyzed period was a decrease by 56 thousand (-2.2% YoY) in the number of prepaid mobile telephony RGUs, which amounted to 2,522 thousand services at the end of 2023, and the systematically declining number of prepaid mobile broadband Internet access services (-5 thousand, -16.1% YoY) at the end of 2023. This is primarily attributable to the growing popularity of data transmission in mobile tariffs (smartphones) due to the disappearing differences in the size of data packages offered in the two product lines. These decreases were partially offset by an increase by 16 thousand YoY in the number of provided prepaid pay TV services (+19.5%). The prepaid pay TV RGU base has been adjusted to exclude the promotional package Polsat Box Go Start offered at PLN 30 per year, which was launched in connection with the decision to close down the ad-based service Polsat Go.

In the fourth quarter of 2023, average monthly retail revenue per prepaid RGU remained unchanged YoY at PLN 17.4, while for the full year 2023 it stood at PLN 17.6 (+0.1% YoY).

Contract services for B2B customers

The total number of B2B customers as at the end of 2023 was 68.8 thousand (-0.4% YoY). The scale of our B2B customer base remains stable in the long term, proving the high efficiency of our efforts directed at fostering high satisfaction of our business customers. At the same time, we maintain a high level of ARPU from our B2B customers, which increased to PLN 1,463 (+2.5% YoY) per month in the fourth quarter of 2023 and PLN 1.454 (+3.4% YoY) per month in 2023.

The B2B area continues to be under strong competitive pressure, which translates into pricing levels for traditional telecommunication services. Building the value of our B2B base in founded in a natural way on additional services provided to our business customers. We strive to constantly expand our offering for business customers by new services which generate incremental revenue. The continued expansion of data center resources offered to business customers, cybersecurity solutions or cloud computing can serve as an example. In parallel, we seek to provide specialized IT solutions for specific sectors of the economy (finance and banking, real estate, hotels, energy production, etc.). We believe that thanks to a comprehensive telecommunication and IT services offering for our B2B customers we will be in a position to maintain their high level of satisfaction and therefore to secure our revenue in this market segment.

4.2. Review of the Group’s financial situation

4.2.1. Income statement analysis

[mPLN]	for the year ended December 31		change
[mPLN]	2023	2022	[mPLN]	[% / p.p.]
Revenue	2,245.3	2,382.5	(137.2)	(5.8%)
Operating costs	(2,064.1)	(2,042.1)	(22.0)	1.1%
Other operating income/(cost), net	(9.6)	2.7	(12.3)	n/d
Profit from operating activities	171.6	343.1	(171.5)	(50.0%)
Gain on investment activities, net	891.1	1,188.7	(297.6)	(25.0%)
Finance costs, net	(404.9)	(241.9)	(163.0)	67.4%
Gross profit for the period	657.8	1,289.9	(632.1)	(49.0%)
Income tax	(18.2)	(41.3)	23.1	(55.9%)
Net profit for the period	639.6	1,248.6	(609.0)	(48.8%)
EBITDA	348.7	517.4	(168.7)	(32.6%)
EBITDA margin	15.5%	21.7%	-	(6.2 p.p.)

Our total revenue decreased by PLN 137.2 million (-5.8% YoY) in the 2023. A decrease of retail revenue by PLN 133.8 million (-6.1%) YoY was the main driver behind a decrease of total revenue. This decrease was, among others, the result of the declining popularity of satellite TV among our customers. Furthermore, in 2023 we recorded a decrease in wholesale revenue by PLN 8.8 million (-10.4%) YoY, which was due in part to lower revenue from the sale of TV licenses, sublicenses and rights of use, mainly to the Group companies.

[mPLN]	for the year ended December 31		change
[mPLN]	2023	2022	[mPLN]	[%]
Retail revenue	2,048.8	2,182.6	(133.8)	(6.1%)
Wholesale revenue	76.0	84.8	(8.8)	(10.4%)
Sale of equipment	29.7	31.6	(1.9)	(6.0%)
Other revenue	90.8	83.5	7.3	8.7%
Revenue	2,245.3	2,382.5	(137.2)	(5.8%)

Our operating costs increased by PLN 22.0 million (+1.1%) YoY in 2023. In the period under review, we recorded an increase in distribution, marketing, customer relation management and retention costs by PLN 18.3 million (+6.5%) YoY, due primarily to higher distribution and logistics costs, as well as customer relation management and retention costs related to inflationary and regulatory pressure on salaries, especially in the call center area. Salaries and employee-related costs were higher by PLN 13.5 million (+9.0%) YoY, due in part to continued inflationary pressures on employee related costs and an increase in the number of FTEs at the Company to 966 (+6.9% YoY). Content costs increased by PLN 6.2 million (+0.7%) YoY, reflecting mainly our investment in expanding our TV programming offer and increasing its attractiveness for our customers. The above described increase in operating costs in 2023 was partially offset by lower costs of interconnection settlements, which decreased by PLN 22.6 million (-4.9%) YoY as a result of lower settlements for data transmission services with our subsidiary Polkomtel.

[mPLN]	for the year ended December 31		change
[mPLN]	2023	2022	[mPLN]	[%]
Content costs	856.7	850.5	6.2	0.7%
Technical costs and cost of settlements with telecommunication operators	440.8	463.4	(22.6)	(4.9%)
Distribution, marketing, customer relation management and retention costs	299.2	280.9	18.3	6.5%
Depreciation, amortization, impairment and liquidation	177.1	174.3	2.8	1.6%
Salaries and employee-related costs	163.1	149.6	13.5	9.0%
Cost of equipment sold	22.3	21.1	1.2	5.7%
Cost of debt collection services and bad debt allowance and receivables written off	6.7	3.3	3.4	103.0%
Other costs	98.2	99.0	(0.8)	(0.8%)
Operating costs	2,064.1	2,042.1	22.0	1.1%

In 2023, the Company recognized other operating income, net of PLN 9.6 million as compared to other operating income, net of PLN 2.7 million in 2022.

As a result of the above-described changes, the Company's EBITDA decreased by PLN 168.7 million(-32.6%) YoY to PLN 348.7 million in 2023, with EBITDA margin of 15.5% (-6.2 p.p. YoY).

Gain on investment activities, net amounted to PLN 891.1 million in 2023 and was lower by PLN 297.6 million (-25.0%) YoY. This decline was mainly driven by lower dividends received, the negative valuation related to foreign exchange differences, a lower share in profits of partnerships and the one-off recognition of estimated future losses on granted loans. This decrease was partially offset by the gain recognized on the sale of shares in Asseco Poland S.A. and higher interest income.

Finance costs, net increased by PLN 163.0 million (+67.4%) YoY as a result of an increase in the Group's debt service costs, resulting from the acquisition of an additional loan as part of the debt refinancing, the issuance of bonds and the continued high level of interest rates in 2023.

Net profit for 2023 amounted to PLN 639.6 million, recording a decrease by 48.8% YoY. This was primarily due to significantly higher debt service costs, lower gain on investment activities and inflationary pressure on costs and softening performance on the revenue side.

4.2.2. Balance sheet analysis

As at December 31, 2023, our balance sheet amounted to PLN 19,732.9 million and was higher by PLN 4,074.6 million (+26.0%) compared to the balance as at December 31, 2022.

Assets

[mPLN]	December 31 2023	December 31 2022	Change
[mPLN]	December 31 2023	December 31 2022	[mPLN]	[%]
Reception equipment	362.6	331.8	30.8	9.3%
Other property, plant and equipment	130.2	194.2	(64.0)	(33.0%)
Goodwill	197.0	197.0	-	-
Other intangible assets	127.7	110.6	17.1	15.5%
Right-of-use assets	21.5	15.8	5.7	36.1%
Investment property	94.3	36.8	57.5	156.3%
Shares in subsidiaries, associates and other, incl.	12,774.4	12,966.7	(192.3)	(1.5%)
shares in associates	0.1	1,708.0	(1,707.9)	(100.0%)
Non-current deferred distribution fees	19.5	17.7	1.8	10.2%
Non-current loans granted	3,584.2	573.6	3,010.6	524.9%
Other non-current assets, includes:	33.4	7.3	26.1	357.5%
derivative instruments	30.1	6.6	23.5	356.1%
Total non-current assets	17,344.8	14,451.5	2,893.3	20.0%
Contract assets	72.0	93.3	(21.3)	(22.8%)
Inventories	122.7	131.0	(8.3)	(6.3%)
Trade and other receivables	189.5	212.1	(22.6)	(10.7%)
Current loans granted	24.3	544.8	(520.5)	(95.5%)
Income tax receivable	7.2	-	7.2	n/a
Current deferred distribution fees	48.0	54.3	(6.3)	(11.6%)
Other current assets, includes:	40.8	50.6	(9.8)	(19.4%)
derivative instruments	15.9	16.5	(0.6)	(3.6%)
Cash and cash equivalents	1,883.6	120.7	1,762.9	n/a
Total current assets	2,388.1	1,206.8	1,181.3	97.9%
Total assets	19,732.9	15,658.3	4,074.6	26.0%

In 2023, the value of non-current assets increased by PLN 2,893.3 million (+20.0%) in 2023 and accounted for 87.9% of total assets as of December 31, 2023 compared to 92.3% at the end of 2022. The increase in the value of non-current assets was driven in particular by an increase of value of non-current loans granted by PLN 3,010.6 million (+524.9%), which were associated, among others, with the financing of strategic projects in the area of green energy. In parallel, the value of shares in subsidiaries, associates and others decreased by PLN 192.3 million (-1.5%) YoY, reflecting partly the disposal of ca. 13% stake in Asseco Poland S.A. held by the Company and was partially offset by the revaluation of the remaining block of approximately 10% of Asseco's shares at fair value and the acquisition of an additional 10.1% stake in PAK-PCE.

The value of current assets increased by PLN 1,181.3 million (+97.9%) over the year and as at the end of 2023 accounted for 12.1% of the total assets of the Company, compared to 7.7% at the end of 2022. The increase in cash and cash equivalents by PLN 1,762.9 million was the main driver behind this change, resulting mainly from the issuance of three series of bonds in 2023 with a total nominal value of PLN 3,890.0 million, the disposal of ca. 13% stake in Asseco Poland S.A. for PLN 851.4 million and the refinancing of bank loans. A factor partially offsetting the aforementioned increase of current assets was a PLN 520.5 million decrease in the balance of short-term loans granted to related companies, mainly for the development of renewable energy projects.

Equity and liabilities

[mPLN]	December 31 2023	December 31 2022	Change
[mPLN]	December 31 2023	December 31 2022	[mPLN]	[%]
Share capital	25.6	25.6	-	-
Share premium	7,174.0	7,174.0	-	-
Other reserves	2,909.6	2,933.5	(23.9)	(0.8%)
Retained earnings	4.855,4	4,215.8	639.6	15.2%
Treasury shares	(2,854.7)	(2,854.7)	-	-
Total equity	12,109.9	11,494.2	615.7	5.4%
Loans and borrowings	2,022.0	1,047.8	974.2	93.0%
Issued bonds	3,975.5	1,900.4	2,075.1	109.2%
Lease liabilities	19.8	13.7	6.1	44.5%
Deferred tax liabilities	40.3	58.7	(18.4)	(31.3%)
Other non-current liabilities and provisions. incl.:	58.7	2.1	56.6	n/d
derivative instruments	56.5	0.7	55.8	n/d
Total non-current liabilities	6,116.3	3,022.7	3,093.6	102.3%
Loans and borrowings	185.7	250.7	(65.0)	(25.9%)
Issued bonds	394.7	176.0	218.7	124.3%
Lease liabilities	3.1	3.3	(0.2)	(6.1%)
Contract liabilities	230.7	225.3	5.4	2.4%
Trade and other payables, incl.:	688.8	477.6	211.2	44.2%
derivative instruments	15.5	-	15.5	n/a
Income tax liability	-	4.9	(4.9)	(100.0%)
Deposits for equipment	3.7	3.6	0.1	2.8%
Total current liabilities	1,506.7	1,141.4	365.3	32.0%
Total liabilities	7,623.0	4,164.1	3,458.9	83.1%
Total equity and liabilities	19,732.9	15,658.3	4,074.6	26.0%

During 2023, equity increased by PLN 615.7 million (+5.4%), to PLN 12,109.9 million as at December 31, 2023, mainly as a result of profit generated in 2023 in the amount of PLN 639.6 million.

Total liabilities increased by PLN 3,458.9 million (+83.1%) and amounted to 7,623.0 million as at December 31, 2023, of which current liabilities amounted to PLN 1,506.7 million and non-current liabilities amounted to PLN 6,116.3 million, constituting 19.8% and 80.2% of total liabilities, respectively. Compared to the end of December 2022, the value of current liabilities increased by PLN 365.3 million (+32.0%) while non-current liabilities increased by PLN 3,093.6 million (+102.3%). The main factor driving the increase of the value of both current and non-current liabilities was the recognition of higher liabilities for bonds issued following the issuance in 2023 of three series of bonds with a total nominal value of PLN 3,890.0 million and the repurchase for redemption of Series B and C bonds with a total nominal value of PLN 1,688.1 million. In addition, as of the end of 2023, the Company recorded an increase of PLN 909.2 million (+70.0%) in liabilities from loans and borrowings as a result of the refinancing of bank liabilities in 2023 under the SFA dated September 21, 2015 and the conclusion of a new SFA dated April 28, 2023 providing for a PLN term loan of up to PLN 7,255.0 million, a EUR term loan of up to EUR 506.0 million and a revolving loan of up to the equivalent of PLN 1,000.0 million for the Company and Polkomtel.

Contractual liabilities related to purchases of non-current assets

Total amount of contractual liabilities resulting from agreements for property construction and improvements was PLN 14.6 million as at December 31, 2022 (PLN 19.2 million as at December 31, 2022).

Future contractual obligations

As at December 31, 2023 and December 31, 2022 the Group had future liabilities due for transponder capacity agreements. The table below presents future payments (total):

[mPLN]	December 31, 2023	December 31, 2022
within one year	112.8	121.7
between 1 to 5 years	112.8	243.4
Total	225.6	365.1

4.2.3. Cash flow analysis

The following table presents selected data from the cash flow statement for the twelve months ended December 31, 2023 and December 31, 2022.

[mPLN]	for the year ended December 31		Change
[mPLN]	2023	2022	[mPLN]	[% / p.p.]
Net cash from operating activities	241.4	(383.3)	624.7	n/d
Net cash used in investing activities, incl.	(1,282.0)	(73.3)	(1,208.7)	n/d
Capital expenditures	(61.6)	(125.0)	63.4	(50.7%)
Net cash received from /(used in) financing activities	2,803.5	(1,357.5)	4,161.0	306.5%
Net increase/(decrease) in cash and cash equivalents	1,762.9	(1,814.1)	3,577.0	197.2%
Cash and cash equivalents at the beginning of the period	120.7	1,934.8	(1,814.1)	(93.8%)
Cash and cash equivalents at the end of the period	1,883.6	120.7	1,762.9	n/a

Net cash received from operating activities amounted to PLN 241.4 million in 2023 as compared to PLN 383.3 million of net cash used in operating activities in 2022. This change was primarily impacted by a one-time tax payment in 2022 from the gain on sale of the shares of Polkomtel Infrastruktura in 2021. In parallel, net cash generated from operating activities in 2023 was under pressure from lower EBITDA and a higher value of working capital employed.

Net cash used in investing activities amounted to PLN 1,282.0 million in 2023 compared to PLN 73.3 million used in 2022. This change was primarily the result of the higher net value of loans granted in 2023, mainly to PAK-PCE for the development of green energy projects, and a lower value of dividends received. Capital expenditures on the purchase of property, plant and equipment, and intangible assets amounted to PLN 61.6 million in 2023 and decreased by PLN 63.4 million YoY. The decrease was primarily due to the completion of construction and commissioning of a recording studio in 2023.

Net cash received from financing activities amounted to PLN 2,803.5 million in 2023 compared to cash used in financing activities in 2022 in the amount of PLN 1,357.5 million. The positive balance of cash flows from financing activities was due, among others, to the issuance of successive series of bonds (D, E and F) and the refinancing of debt under the SFA dated September 15, 2015, as well as the lack of dividend payment in 2023 (for more information, see Section 4.3. – External financing).

4.3. External financing

We maintain cash to fund the day-to-day requirements of our business. Our objective is to ensure cost-efficient access to various financing sources, including bank loans, bonds and other borrowings.

We believe that cash balances and cash generated from our current operations, as well as funds available under our revolving credit facilities should be sufficient to satisfy the future needs related to our operating activities, development of our services, service of our debt as well as for the execution of investment plans in the field of the Company’s current activity.

4.3.1. Indebtedness

The table below presents a summary of the financial debt of the Company as at December 31, 2023.

	Balance value as at December 31, 2023 [mPLN]	Coupon / interest / discount	Maturity date
Loans and borrowings liabilities	2,207.7	WIBOR + margin EURIBOR + margin	2028
Bond liabilities	4,370.2	Series B: WIBOR+2.00%(2) Series C: WIBOR+1.90%(2) Series D/E/F: WIBOR+3.85%(2)	Series B – 2026 Series C – 2027 Series D/E/F – 2030
Leasing and other liabilities	22.9
Gross debt	6,600.8	-	-
Cash and cash equivalents(1)	1,883.6	-	-
Net debt	4,717.2	-	-

(1)	This item comprises cash and cash equivalents.
(2)	Margin level depends on Net Debt/EBITDA LTM for the last reported period calculated at the Polsat Plus Group level.

Conclusion of the Senior Facilities Agreement

On April 28, 2023, the Company and Polkomtel, as the borrowers, concluded the Senior Facilities Agreement, which provided for a PLN term facility loan up to PLN 7,255.0 million, a EUR term facility loan up to EUR 506.0 million and a revolving facility loan up to a maximum amount of the equivalent of PLN 1,000.0 million. The loan was disbursed on May 16, 2023. The portion of the PLN Term Loan and the EUR Term Loan attributable to the Company amounts to PLN 679.5 million and EUR 356 million, respectively.

On May 16, 2023, Cyfrowy Polsat and Polkomtel made an early repayment of the entire term loan and revolving credit facility granted under the senior facilities agreement concluded on September 21, 2015, as amended by agreements dated March 2, 2018 and April 27, 2020, in the amount of PLN 8,843.7 million.

The Senior Facilities Agreement is linked to sustainability goals, set out by the Company in the Sustainability-Linked Financing Framework of Polsat Plus Group, which is compliant with the ICMA standard.

Bond issuance

Based on the resolution of November 29, 2022, the Company established a Bond Issuance Program with the total maximum nominal value of PLN 4,000 million under which the Company was able to incur financial indebtedness through the issuance of unsecured PLN bearer bonds of the Company and to undertake actions aimed at possible refinancing of the Company’s indebtedness under the Series B and Series C bonds. As part of the Bond Issuance Program, in 2023 the Company issued:

●	on January 11, 2023, 2,670,000 unsecured sustainability-linked Series D bearer bonds with the nominal value of PLN 1,000 each and the aggregate nominal value of PLN 2,670.0 million, maturing on January 11, 2030;
●	on September 28, 2023, 820,000 unsecured sustainability-linked Series E bearer bonds with the nominal value of PLN 1,000 each and the aggregate nominal value of PLN 820 million which were assimilated with the Series D Bonds, maturing on January 11, 2030;,
●	on December 21, 2023, 400,000 unsecured sustainability-linked Series F bearer bonds with the nominal value of PLN 1,000 each and the aggregate nominal value of PLN 400 million, maturing on January 11, 2030. All Series F Bonds were allotted to one investor, i.e., PFR Fundusz Inwestycyjny Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych.

As part of the ongoing refinancing process, during the period under review, the Company repurchased for redemption:

●	691,952 unsecured Series B bearer bonds with the aggregate nominal value of PLN 692.0 million and 835,991 unsecured Series C bearer bonds with the aggregate nominal value of PLN 836.0 million on January 11, 2023;
●	84.250 unsecured Series B bearer bonds with the aggregate nominal value of PLN 84.3 million and 75,956 unsecured Series C bearer bonds with the aggregate nominal value of PLN 76.0 million on September 28, 2023.

After the balance sheet date, on February 5, 2024 the Company repurchased for redemption 23,798 unsecured Series B bearer bonds with the aggregate nominal value of PLN 223.8 million and 88,053 unsecured Series C bearer bonds with the aggregate nominal value of PLN 88.1 million. In connection with the early redemption, all Series B Bonds and Series C Bonds were retired.

After the redemption of Series B and Series C Bonds, bonds listed in the Alternative Trading System operated by the WSE on the Catalyst market include 3,490,000 Series D and Series E bonds while Series F bonds are not listed.

Sustainable financing

In November 2022, we adopted Polsat Plus Group’s Sustainability-Linked Financing Framework linking Polsat Plus Group's external financing to its long-term sustainability goals. We use the financing framework for issuance of debt instruments linked to sustainable development, both in the form of loans and bonds. Currently, all of our external financing is sustainability linked.

In order to ensure transparency of the goals pursued, the Group has decided to develop and implement measurable KPIs, which are reported periodically. In addition, the reported achievement of environmental goals will be audited and certified by an independent expert annually. The SFA is linked to KPIs 2 and 4 outlined in the Framework, while the Bonds are linked to KPI 4. Below is the level of achievement of our quantified long-term environmental targets in 2023.

KPI	Target for 2025	Target for 2026	Target for 2030	Base year	Performance in 2023
#1: Reduction of absolute Scope 1 and 2 Greenhouse Gas (GHG) emissions (eqCO2 tons/year)	Reduction by 75%		Reduction by 80%	2019	95%
#2: Energy production from Renewable Energy Sources (GWh/year)(1)	800 GWh/year		1600 GWh/year	2021	665.2 GWh
#3: Production of green hydrogen (tons/year)	1500 tonnes/year		3000 tonnes/year	2021	0
#4: Share of zero-emission energy in the energy mix used by Polsat Plus Group (%)(2)	25%	30%(3)	50%	2019	5.6%

(1)	Applies to Polsat Plus Group companies with data for the entire year 2023 for companies in the green energy segment.
(2)	Applies to Cyfrowy Polsat S.A., Telewizja Polsat sp. z o.o., Polkomtel sp. z o.o. and Netia S.A.
(3)	Target applicable only to sustainability-lined Bonds Series D, E and F.

4.3.2. Significant financing agreements

Below we present information on significant financing agreements executed by the Company and the Group companies, which remain in force as at the date of approval of this Report.

Senior Facilities Agreement of April 28, 2023

On April 28, 2023, the Company and Polkomtel, as the borrowers, and Telewizja Polsat Sp. z o.o., Netia S.A., Polsat Media Sp. z o.o., Muzo.fm Sp. z o.o. and Polsat Media Biuro Reklamy Sp. z o.o., as the guarantors, concluded the unsubordinated Senior Facilities Agreement, sustainability linked financing, with a consortium of Polish and foreign financial institutions led by Powszechna Kasa Oszczędności Bank Polski S.A., Santander Bank Polska S.A., Bank Polska Kasa Opieki S.A., BNP Paribas Bank Polska S.A., ING Bank Śląski S.A., (Global Banking Coordinators) and Santander Bank Polska S.A. (ESG Senior Coordinator), ING Bank Śląski S.A. and BNP Paribas Bank Polska S.A. (ESG Junior Coordinators) and including SMBC Bank EU AG, Bank of China Limited, Luxembourg Branch, Société Générale Spółka Akcyjna Oddział w Polsce, Bank Gospodarstwa Krajowego, Bank Millennium S.A., PZU Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych BIS 1, mBank S.A., Credit Agricole Bank Polska S.A., Erste Group Bank AG, Credit Agricole Corporate and Investment Bank, Bank Ochrony Środowiska S.A., Alior Bank S.A., Powszechny Zakład Ubezpieczeń S.A., Powszechny Zakład Ubezpieczeń na Życie S.A., Industrial and Commercial Bank of China (Europe) S.A. (Spółka Akcyjna) Oddział w Polsce, Haitong Bank S.A. Spółka Akcyjna Oddział w Polsce as well as Santander Bank Polska S.A. acting as an Agent and Bank Polska Kasa Opieki S.A. acting as a Security Agent (the “Senior Facilities Agreement”, “SFA”).

The SFA governs the granting of a PLN term facility loan to the Company and Polkomtel up to a maximum amount of PLN 7,255.0 million, a EUR term facility loan up to a maximum amount of EUR 506.0 million (the “Term Facilities”) and a revolving facility loan up to a maximum amount of the equivalent of PLN 1,000.0 million (the “Revolving Facility”). The PLN and EUR portion of the Term Loan is PLN 679.5 million and EUR 356.0 million, respectively, for Cyfrowy Polsat and PLN 6,575.6 million and EUR 150.0 million, respectively, for Polkomtel.

The Term Facilities and the Revolving Facility have been or are being utilized by the Company in particular:

●	to repay in full the indebtedness under the senior facilities agreement of September 21, 2015, as amended;
●	to make funds available to companies implementing investment projects defined in the Senior Facilities Agreement. and
●	to finance general corporate needs of the Company’s capital group.

The Term Facilities and the Revolving Facility bear interest at a variable rate equal to WIBOR/EURIBOR for the relevant interest periods plus margin. The margin of the Term Facilities and the Revolving Facility depends on the level of the consolidated total debt ratio (net debt to consolidated EBITDA) calculated jointly for certain entities from the Company’s capital group in such a way that the lower the ratio, the lower the applicable margin, with the maximum margin level applicable when the debt ratio exceeds 4.50:1, and the minimum margin level when that ratio is equal to or less than 1.80:1. The margin of the Term Facilities and the Revolving Facility also depends on the achievement by the Company’s capital group of certain targets concerning green energy production and zero-carbon electricity consumption by certain entities from the Company’s capital group.

The term of the Term Facilities and the Revolving Facility is 5 years from the date of execution of the Senior Facilities Agreement and the final repayment date of each of these facilities is April 28, 2028. The PLN term facility will be repaid in quarterly installments of varying amounts. The EUR term facility will be repaid in one installment on the final repayment date.

In addition, pursuant to the terms of the Senior Facilities Agreement, the Company and other entities from its Group will have an option to take out additional facilities. The terms and conditions of such additional facilities will be determined each time in a separate additional facility accession deed and they will have to meet certain requirements that will depend on the debt ratio.

Pursuant to the Facilities Agreement, certain members of the Company’s capital group are to grant guarantees under the English law to each of the financing parties under the Senior Facilities Agreement and other finance documents executed in relation thereto (in the amount of the facility increased by all fees and receivables contemplated in the Senior Facilities Agreement or other finance documents executed in relation thereto). The guarantees secure:

(i)	the timely discharge of the obligations under the Senior Facilities Agreement and other finance documents executed in relation thereto;
(ii)	a payment of amounts due under the Senior Facilities Agreement and other finance documents executed in relation thereto and
(iii)	an indemnification of the financing parties referred to above against any liabilities, costs and losses that such financing parties may incur in relation to the unenforceability, ineffectiveness or unlawfulness of any obligation secured by the guarantee described above.

The period of the guarantees has not been specified. The guarantors will be remunerated at arm’s length for granting the guarantees.

The Facilities Agreement provides for the establishment of collateral by the Company and other entities from Polsat Plus Group securing the repayment of loans granted thereunder. In the event that the debt ratio is equal to or less than 3.30:1, the Company may request to release collateral established in connection with the Senior Facilities Agreement. The released collateral will have to be re-established, if the debt ratio is higher than 3.30:1. In addition, in the event that certain entities from the Group incur any secured debt, a corresponding pari passu collateral will be provided to the Security Agent (acting, inter alia, for the benefit of the lenders under the Senior Facilities Agreement).

In order to secure the repayment of claims under the Senior Facilities Agreement, the Company, other Group companies listed below, as guarantors, and the Security Agent, entered into and signed agreements and other documents providing for the establishment of the following collateral:

(i)	registered pledges over collections of movables and property rights of variable composition, included in the enterprises of the Company, Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Netia S.A., Polsat Media Biuro Reklamy sp. z o.o., Polsat Media sp. z o.o. and Muzo.fm sp. z o.o.;
(ii)	financial and registered pledges over all shares in Polkomtel sp. z o.o. and Telewizja Polsat sp. z o.o. held by the Company, as well as over all shares in Netia S.A. held by the Company, and all shares in Polsat Media Biuro Reklamy sp. z o.o. and Muzo.fm sp. z o.o. held by Telewizja Polsat sp. z o.o., and over all shares in Polsat Media sp. z o.o. held by the Company, Telewizja Polsat sp. z o.o. and Polsat Media Biuro Reklamy sp. z o.o., for which the applicable law is Polish law, together with powers of attorney to exercise corporate rights attached to the shares in the aforementioned companies;
(iii)	financial and registered pledges over the receivables related to the bank accounts of the Company, Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Netia S.A., Polsat Media Biuro Reklamy sp. z o.o., Polsat Media sp. z o.o. and Muzo.fm sp. z o.o., for which the applicable law is the Polish law;
(iv)	powers of attorney to the bank accounts of the Company, Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Netia S.A., Polsat Media Biuro Reklamy sp. z o.o., Polsat Media sp. z o.o. and Muzo.fm sp. z o.o., for which the applicable law is the Polish law;
(v)	registered pledges over the rights to the trademarks of the Company, Polkomtel sp. z o.o., Telewizji Polsat sp. z o.o., Netia S.A., Polsat Media sp. z o.o., for which the applicable law is Polish law;
(vi)	assignment of receivables for security under hedging agreements payable to the Company and Polkomtel sp. z o.o., for which the applicable law is English law;
(vii)	assignment of rights for security under insurance agreements for real properties and assets made by the Company, Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Netia S.A., Polsat Media Biuro Reklamy sp. z o.o., Polsat Media sp. z o.o. and Muzo.fm sp. z o.o.;
(viii)	statements of the Company, Polkomtel sp. z o.o., Telewizja Polsat sp. z o.o., Netia S.A., Polsat Media Biuro Reklamy sp. z o.o., Polsat Media sp. z o.o. and Muzo.fm sp. z o.o. on submission to enforcement under a notarial deed, for which the applicable law is Polish law;
(ix)	a joint contractual mortgage, governed by Polish law, over the following real properties owned by or in perpetual usufruct of the Company: (a) land property located in Warsaw, Targówek district, in the area of ul. Łubinowa, land and mortgage register No. WA3M/00104992/7, (b) land property located in Warsaw, Targówek district, in the area of ul. Łubinowa, land and mortgage register No. WA3M/00102149/9, (c) land property located in Warsaw, Targówek district, in the area of ul. Łubinowa, land and mortgage register No. WA3M/00103400/4, (d) land property located in Warsaw, Targówek district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00131411/9, (e) land property located in Warsaw, Praga Północ district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00100110/3, (f) land property located in Warsaw, Praga Północ district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00100109/3, (g) land property located in Warsaw, Praga Północ district, land and mortgage register No. WA3M/00102615/7, (h) land property located in Warsaw, Praga Północ district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00132063/1, (i) land property located in Warsaw, Targówek district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00101039/8, (j) land property located in Warsaw, Targówek district, in the area of ul. Zabraniecka, land and mortgage register No. WA3M/00136943/2, (k) land held in perpetual usufruct and a building constituting a separate property located in Warsaw, Targówek district, in the area of ul. Utrata, land and mortgage register No. WA3M/00186120/2;
(x)	a contractual mortgage, governed by Polish law, over land property located in Warsaw, Ursynów district, in the area of ul. Baletowa and Puławska, land and mortgage register No. WA5M/00478842/7, owned by Polkomtel;
(xi)	a joint contractual mortgage, governed by Polish law, over the following properties owned or co-owned by Netia S.A.: (a) land property located in Jawczyce, Ożarów Mazowiecki commune, land and mortgage register WA1P/00133706/7, (b) land property located in Kraków, Podgórze district, in the area of ul. Luciany Frassati-Gawrońskiej, land and mortgage register KR1P/00359665/5, (c) land property located in Warsaw, Ursynów district, in the area of ul. Poleczki, land and mortgage register WA2M/00142936/8, (d) land property located in Warsaw, Ursynów district, in the area of ul. Poleczki, land and mortgage register WA5M/00468204/0, (e) land property located in Warsaw, Ursynów district, in the area of ul. Tango, land and mortgage register WA2M/00138733/4.

Series D, E and F Bonds

On January 11, 2023, Cyfrowy Polsat issued 2,670,000 unsecured, sustainability-linked Series D bearer bonds with a nominal value of PLN 1,000.0 each and a total nominal value of PLN 2,670.0 million, maturing on January 11, 2030. On September 28, 2023, Cyfrowy Polsat issued 820,000 unsecured, sustainability-linked Series E bearer bonds with a nominal value of PLN 1,000.0 each and a total nominal value of PLN 820.0 million, which were assimilated with the Series D Bonds. On December 21, 2023, Cyfrowy Polsat issued 400,000 unsecured, sustainability-linked Series F bearer bonds with a nominal value of PLN 1,000.0 each and a total nominal value of PLN 400.0 million, maturing on January 11, 2030.

The purpose of the issuance of the Series D, E and F Bonds was not specified. Part of the proceeds from the both issues was used to refinance the debt under the Series B Bonds and the Series C Bonds. The Series D and E Bonds were issued by way of a public offering addressed to professional clients. All Series F Bonds were allotted to one investor, i.e., PFR Fundusz Inwestycyjny Fundusz Inwestycyjny Zamknięty Aktywów Niepublicznych in a private offer, exclusively addressed only to one person. Detailed terms and conditions of the issuances, redemption and payment of interest are specified in the Series D, E and F Bonds Terms.

The interest rate on the Series D, E and F Bonds is variable and depends on both financial indicators and a sustainability-linked KPI, i.e., the share of electric energy produced from zero-emissions sources in the total electric energy usage for own needs of the four main operating companies of Polsat Plus Group (Cyfrowy Polsat, Telewizja Polsat, Polkomtel and Netia). The sustainability-linked KPI will be tested for the year 2026.

The interest rate on the Series D, E and F Bonds is based on the WIBOR rate for six-month deposits denominated in PLN, increased by a margin whose value depends on the value of the Leverage Ratio (defined in the Series D, E and F Bonds Terms as the ratio of the net financial indebtedness to EBITDA) and on the value of the sustainability-linked KPI:

(i)	the margin amounts to 335 bps if the Leverage Ratio in the given period is less than or equal to 3.5:1,
(ii)	the margin amounts to 385 bps if the Leverage Ratio in the given period is greater than 3.5:1 but less than or equal to 4.5:1,
(iii)	the margin amounts to 435 bps if the Leverage Ratio in the given period is greater than 4.5:1.
(iv)	if the value of the sustainability-linked KPI for 2026 is below 30% or the Company fails to provide a settlement of the value of the sustainability-linked KPI as part of the first Compliance Certificate made available after the end of 2026, the interest rate will be permanently increased by 25 bps.

The coupon on Series D, E and F bonds is paid biannually on January 11 and July 11.

In accordance with the provisions of the Series D, E and F Bonds Terms, the Company may exercise at any time an early redemption of all or part of the Series D, E and F Bonds, however, the early redemption may not apply to Bonds that constitute less than 10% of the total nominal value of the Series D, E and F Bonds, or all unredeemed Series D, E and F Bonds in the event that their aggregate nominal value is less than the amount indicated above. An early redemption may be exercised based on the Series D, E and F Bonds’ nominal value together with the accrued interest and a possible premium for the early redemption.

If the early redemption, performed as a result of exercising the issuer’s right to early redemption by the Company, occurs:

(i)	before one year from the issuance date, the premium shall be equal to 3% of the nominal value of the Series D, E and F Bonds subject to the early redemption,
(ii)	before two years from the issuance date but after one year from the issuance date, the premium shall be equal to 1.5% of the nominal value of the Series D, E and F Bonds subject to the early redemption,
(iii)	before three years from the issuance date but after two years from the issuance date, the premium shall be equal to 0.75% of the nominal value of the Series D, E and F Bonds subject to the early redemption,
(iv)	before four years from the issuance date but after three years from the issuance date, the premium shall be equal to 0.5% of the nominal value of the Series D, E and F Bonds subject to the early redemption,
(v)	if the early redemption occurs after four years from the issuance date, the Series D, E and F Bonds shall be redeemed according to their nominal value,
(vi)	in each case the premium shall be increased by 0.25% p.a. for the period between the early redemption date and the redemption date in the event that the SPT is not satisfied or the SPT settlement is not submitted as part of the first Compliance Certificate after the end of 2026, if the early redemption date falls after the date on which the Compliance Certificate for 2026 was delivered or was to be delivered.

Additionally, pursuant to the Series D and E Bonds Terms, the Company and its subsidiaries are obliged to maintain required levels of certain financial ratios and are subject to restrictions, with respect to (but not limited to):

(i)	acquisition or taking up of shares in other companies,
(ii)	extending guarantees or granting sureties, accession to debt or release from liability,
(iii)	granting loans,
(iv)	disposing of assets,
(v)	payment of dividends or advance dividends, payment of the price for own shares, or returns of additional payment to shareholders,
(vi)	incurring of financial indebtedness, and
(vii)	entering into potential composition agreements with creditors which are regulated by the Restructuring Act or another regulation which could replace this law.

In the event of a breach of restrictions specified in the Series D, E and F Bonds Terms, bondholders are entitled to demand an early redemption of Series D, E and F Bonds held by those bondholders with the consent of the Meeting of Bondholders.

In the event of change of control, as defined in the Series D, E and F Bonds Terms, cessation of business activity or insolvency of the Company, i.a. by declaring bankruptcy or liquidation of the Company, culpable delay in payment of benefits under the Series D, E and F Bonds, withdrawal of all the Company's shares from trading on the regulated market operated by the WSE, or failure to convene the Bondholders' Meeting, bondholders are entitled to demand an early redemption of Series D, E and F Bonds held by those bondholders.

The Series D Bonds have been traded since January 20, 2023 and Series E Bonds since September 28, 2023 under the abbreviated name “CPS0130” in the continuous trading system called the Alternative Trading System, operated by the Warsaw Stock Exchange within the Catalyst market. The Series F Bonds are not listed on any market.

The Series D, E and F Bonds are issued under Polish law and any potential disputes related to the Series D, E and F Bonds shall be resolved in proceedings at the Polish common court having jurisdiction over the registered office of the Company.

4.3.3. Ratings

The table below presents a summary of ratings assigned to Polsat Plus Group as at the date of publication of this Report.

Rating agency	Rating / outlook	Previous rating / outlook	Rating / outlook date	Last review date
S&P Global Ratings	BB/ stable	BB+/ negative	21.12.2022	21.12.2022
Fitch Ratings	BB / stable	n/a	n/a	02.06.2023

Rating agency

Rating / outlook

Previous rating / outlook

Rating / outlook

date

Last review

date

S&P Global Ratings

BB/ stable

BB+/ negative

21.12.2022

Fitch Ratings

BB / stable

n/a

02.06.2023

Fitch Ratings. On June 2, 2023, Fitch Ratings (“Fitch”) assigned the Company a long-term issuer default rating (IDR) of ‘BB’ with stable perspective. In its press release Fitch stated that the rating reflects the Company’s fully integrated telecom and media profile, with strong market position in its segments of operations. At the same time, the rating takes into account the competitive market environment, adverse macro conditions and the diversification of the Company’s operations towards renewable energy and real estate. The new business segments will result in increased leverage and an evolving business risk profile of the Company over the rating horizon.

In parallel, Fitch assessed that the Company has adequate access to capital, as demonstrated by the recent refinancing of its senior facility agreement. In Fitch’s opinion, access to capital is key to continuing funding the Company’s investments in renewables and real estate.

S&P Global Ratings. On December 21, 2022 S&P downgraded the issuer credit rating of the Company from BB+ to BB, revising the rating outlook from negative to stable. In its justification, S&P underlined that the downward revision reflects in particular its expectation that S&P-adjusted net leverage of the Group will increase to about 4.0x EBITDA and remain on elevated levels in 2024, due to the investments in the new green energy business line. Moreover, S&P expects the Group to report negative free operating cash flow (FOCF) in 2023 as a result of high capital expenditure needs for the energy business. Additionally, S&P takes into account higher interest rates and refinancing risk on the Company’s Polish zloty debt maturing in September 2024, simultaneously recognizing the Company's demonstrated ability to raise debt with the recent PLN 2.7 billion bond issuance. S&P also recognizes the relatively long period until the maturity of the Company’s bank debt (2024). The stable outlook reflects S&P’s expectation that the Group’s revenue will expand 5-7% in the next 12 months while EBITDA margin will remain subdued at 26-27% amid high energy prices. S&P is of the opinion that the Group’s diversification into the energy business could have a positive impact on the Group’s condition in the long term. In parallel, S&P noted certain short-term execution risks associated with diversifying toward a brand-new industry, underlining that execution in achieving operational and financial goals will be key in the coming years.

S&P may raise the rating of the Group if S&P-adjusted leverage decreases to below 3.5x and FOCF to debt sustainably increases to above 5%, coupled with a successful refinancing of the Group’s debt due in September 2024. On the other hand, a downward revision of the rating could take place, if S&P-adjusted leverage increases to 4.5x or above, or if S&P expects FOCF to debt to remain negative while FOCF to debt in TMT business turns well below 5%, or if S&P sees heightened refinancing risk for debt coming due in September 2024, leading to a material liquidity deterioration.

The Company decided not to prolong the agreement and to terminate its cooperation with Moody's Investors Service rating agency. Accordingly, on July 20, 2023 Moody's withdrew the corporate rating assigned to the Company. The last rating assigned to the Company by Moody's on October 5, 2022 was a long-term rating of "Ba3" with a negative outlook.

5. Factors that may impact our results in subsequent periods

Impact of the military conflict on the territory of Ukraine on the Company’s current operations and expected results

In the opinion of the Management Board, despite the lack of direct exposure of the Company to the Ukrainian, Russian or Belarusian markets, the war started by the Russian Federation may have a long-lasting effect on the operational and financial results of the Company.

In particular, the war has an adverse effect on a number of macroeconomic indicators. Persistent inflation, high interest rates, slowdown in economic growth and disruptions in the supply of raw materials and fossil fuels are reflected in the increasing costs of our current operating activities and the significantly higher debt service costs of the Company.

The full impact of the war caused by the Russian Federation on the operational and financial activities of the Company cannot be predicted as of today and depends on many factors beyond the Company’s control.

Apart from macroeconomic and geopolitical factors, which affect virtually every branch of the Polish economy to a varying degree, the Company assesses its operating prospects as relatively stable.

Macroeconomic outlook in Poland

Macroeconomic trends in the Polish economy as well as global market conditions have thus far affected our operations and operating results, and are expected to continue affecting them in the future, in particular with respect to the level of expenditures on services that we provide as well as demand for end-user devices.

According to the estimates of the Polish Central Statistical Office (GUS), Poland's GDP grew by 0.2% in 2023. This is below market expectations and the lowest result since the country joined the EU. Private consumption data was particularly disappointing (-1.0% YoY). The pressures that led to the slower-than-expected recovery included persistently high inflation and interest rates.

According to the European Commission's February 2024 forecast, the current year is expected to be marked by a gradual economic recovery. The GDP recovery is expected to be driven by an increase in the purchasing power of money and household consumption, including a record increase in the minimum wage to PLN 4,242 as of January 1, 2024 and then to PLN 4,300 as of July 1, 2024 (vs. PLN 3,600 as of July 2023), and an increase in social transfers. Salaries are also expected to increase across other sectors, including public administration and education. Under these circumstances, one of the challenges for companies in the coming year may be pressure on wages. In addition, the inflow of EU funds under the National Recovery Program (KPO) is expected to significantly stimulate investment levels in the second half of the year. As a result of the above factors, the European Commission forecasts Poland's economic growth to reach 2.7% in 2024 and 3.2% in 2025, with continued elevated average annual inflation above the target of the National Bank of Poland.

Although the level of CPI gradually declined in 2023, the average annual inflation rate remained high at 11.4% (compared to 14.4% in 2022). Forecasts for the level of inflation in 2024 are subject to a high degree of uncertainty due to, among others, the government's anti-inflationary shields, which, according to announcements, are expected to expire during the year. Taking into account the factors described above, and given that the 0% VAT on food will expire in April and energy prices will be unfrozen in June, inflation is expected to pick up later in the year. According to the European Commission's forecasts, average annual inflation in Poland will reach 5.2 % in 2024 and 4.7 % in 2025, with Poland's CPI well above the EU average in these years.

Situation on the pay TV market in Poland

Our revenue depends on the number of our customers and their loyalty, the pricing of our services and the penetration rate of pay TV in Poland, which we consider to be a saturated market. The high level of competition and the dynamically evolving market environment (including consolidation processes on the cable TV market as well as the continued convergence of mobile and fixed-line services) impact offerings addressed to our new customers. In addition, due to high competition, we continuously invest in customer retention programs and building the loyalty of our customers.

We believe that at present our programming packages constitute an attractive value-for-money offer on the Polish pay TV market. Moreover, we invest in new, attractive and unique content. This gives us a chance to attract a significant portion of migrating customers to our platform. What is more, we offer pay TV services as part of our integrated offer, which has a positive impact of the level of loyalty of our customer base and contributes to maintaining a low churn rate.

Dynamic growth of non-linear distribution of content, delivered by video on demand and OTT (over-the-top) services is a global trend. This market is still underdeveloped in Poland as compared to Western Europe or the United States and in our opinion has significant growth prospects, especially in light of the improving quality of fixed broadband links. The launch of services by global players, such as Netflix, Amazon Prime, HBO, Disney+ or SkyShowtime, is proof that Poland is considered an attractive market. In addition, one of the consequences of the COVID-19 pandemic restrictions has been a deepening of pre-existing trends of consuming content at any time and on any device. In view of the above, we systematically develop our VOD and online television services and applications.

At the same time, in 2023, there has been a noticeable trend in Poland to increase prices for pay TV services, which is a natural consequence of the distinctly rising costs of purchasing and producing in-house content. Retail price increases apply to basically all technologies - from traditional satellite platforms and cable offerings, through IPTV offerings, to VOD and OTT platforms. In the future, this trend may translate favorably into ARPU growth while, at the same time, it may cause a part of customers to be inclined to limit their parallel use of more forms of access to paid content.

Growing importance of convergent services and consolidation trends on the telecommunication and pay TV markets

Convergence of services is one of the strongest trends both on the Polish media and telecommunications market and worldwide. Operators develop their bundled offerings in response to changing preferences of customers, who seek media and telecommunications services provided at competitive prices by a single operator under a single contract, a single invoice and a single fee. Given the high saturation of the pay TV and mobile telephony markets, bundled services play a very important role in maintaining the existing customer base.

In the wake of the increasing importance of convergence and bearing in mind the significant level of fragmentation of the broadband access market, it can be expected that the future shape of the Polish telecommunications and media market will be substantially impacted by consolidation trends which have been visible for a long time on more developed foreign markets, where mobile and fixed-line operators merge with content providers.

The acquisition of a controlling stake in the fixed-line operator Netia by Polsat Plus Group in 2018 can serve as an example of such consolidation in Poland. Thanks to this acquisition we combined within our Group all assets necessary to provide fully convergent services, which facilitates better adjustment of the offering to customers’ needs and more effective cost management.

Building an offer based on bundled services

Growing interest in bundled services, observed among our customers, provides us with the possibility to generate growth of average revenue per customer. We carefully follow the evolution of consumption patterns and our customers’ expectations and strive to meet their growing needs by combining our pay TV, broadband access and mobile telephony services into attractive packages, complementing them with products and services outside our core activity. We are aspiring that our services meet the needs of every customer and are available everywhere. That is why we constantly work on expanding our offering and enter new distribution markets for our services.

Our bundled services offers, addressed both to our individual and business customers, enable our customers to combine products in a flexible way and benefit from attractive discounts. The possibility of selling additional products and services (cross-selling) to Polsat Plus Group customer base has a positive impact both on our stream of revenue and the level of ARPU per contract customer, and contributes to maintaining high loyalty of customers, who use our bundled services.

Furthermore, we offer a broad range of complementary services to every basic service. We combine our traditional pay TV services provided in the satellite and Internet (OTT, IPTV) technologies with VOD, PPV, Multiroom and online video services. We propose optional value added services (VAS) to our Internet access and mobile telephony services.

Effective use of the potential in the area of provision of integrated services and value added services to our customers, both through up-selling of single products and value added services, as well as through the sale of bundled offers and cross-selling, may significantly increase the number of services used by each individual customer, thus increasing average revenue per customer (ARPU) and concurrently maintaining the churn ratio on a low level.

Entering the market for energy production from low- and zero-emission sources

The Polish energy sector is currently at the threshold of a transformation involving the need to replace coal in the national electricity generation mix with clean, renewable energy sources and building energy independence in view of geopolitical challenges. An important driving force behind the changes in the Polish energy sector is the growing awareness, both in Poland and at a global level, of the need to combat climate change as well as the consistent climate policy of the European Union, which, on the one hand, offers significant support for the development of renewable energy sources, and on the other hand, strongly limits the possibilities of financing investments based on conventional fuels. Geopolitical uncertainty caused by the war in Ukraine and Russia's aggressive energy policy are additional factors justifying the need for Poland to seek alternative energy sources.

We believe that Poland's energy transformation towards clean, zero- and low-emission energy constitutes an excellent moment for new players to enter this promising market and creates new development opportunities for Polsat Plus Group. We believe that solar and wind power plants as well as stable low-emission sources, such as biomass turbines, will dynamically gain importance. At the same time we believe that from the perspective of strengthening the energy independence of Europe and Poland a step into the future is already necessary, towards an economy and society based on green hydrogen. In our opinion, hydrogen technology will be important in reducing greenhouse gas emissions on a global scale due to its wide applications in industry, transport and power generation.

In December 2021, we expanded the strategy of Polsat Plus Group to include a new business pillar based on clean energy production. Between 2022 and 2026, we want to invest ca. PLN 5 billion to achieve about 1,000 MW of installed capacity enabling ca. 2 TWh of clean energy production from photovoltaics, biomass, wind farms or thermal waste treatment and ca. PLN 0.5 billion to build the full value chain of the economy based on green hydrogen.

As part of the implementation of Strategy 2023+ in the area of clean energy, on July 3, 2023, we acquired a majority stake in PAK-Polska Czysta Energia.

According to our estimates, our investment plan will contribute to the reduction of greenhouse gas emissions in the Polish economy by over 2 million tons of CO2 equivalent per year, while creating an additional recurring EBITDA stream for the Group of PLN 500-600 million per year by 2026 (estimates based on energy prices in 2021).

Development of the streaming platform

Our Internet services and application Polsat Box Go strengthens our position as an aggregator and distributor of content. We continue to develop our service using our experience in sales of pay TV, which helps us achieve synergies in terms of costs and revenues.

Mobile video traffic is the fastest growing segment of global mobile data traffic. Bearing this in mind, we believe that online television will be an increasingly significant element of our business in the future. Therefore, we pay attention to providing users of our video services with a wide variety of attractive content. In particular, the coronavirus epidemic and the accompanying lockdowns contributed to higher interest of customers in online television offer, especially with regard to sports events, film and series content as well as entertainment shows. We think that such a trend will continue in the future and that we will benefit from it thanks to investments in the development of this segment of our operations.

5.3. Financial factors

Interest rate fluctuations

Market interest rate fluctuations do not impact the Company’s revenue directly, but they affect our cash flows from operating activities through the amount of interest on current bank accounts and deposits, and also cash flows from financing activities through the costs of servicing debt. In particular, our liabilities under the SFA of April 28, 2023 and the issued bonds are calculated based on variable WIBOR/EURIBOR interest rates increased by a relevant margin.

From January to August 2023, the NBP kept the reference interest rate at 6.75%. After the September and October 2023 cuts, the reference rate level is 5.75%. In 2023, EURIBOR remained in an upward trend as a result of the successive tightening of monetary policy by the European Central Bank. The ECB's interest rates, which have remained high since last September (deposit rate at 4.00% and refinancing rate at 4.50%) will have an impact on the level of our interest expenses and, as a result, on our financial results.

We systematically analyze the Company’s interest rate risk, including a risk hedging scenario. We estimate the impact of specific interest rate fluctuations on our financial result. In order to reduce exposure to interest rate risk related to interest payments based on a floating rate, we actively apply hedging strategies based on derivative instruments, swaps (IRS and CIRS) in particular. As at December 31, 2023, transactions hedging the WIBOR interest rate changes, opened and entered into by the Group companies for future periods and maturing in different periods in the years 2024-2027, hedged around 27% of the Group's exposure in relation to the indebtedness under the PLN tranche of the SFA and the bonds issued while EURIBOR interest rate hedging transactions, maturing in 2026 and 2027, hedged about 20% of the exposure with respect to the Group's debt arising from the Euro-denominated tranche of the SFA.

Interest rate fluctuations may have a material effect (both positive and negative) on our results of operations, financial condition and prospects.

Exchange rates fluctuations

The Polish zloty (PLN) is our functional and reporting currency. The Company’s revenue is primarily denominated in PLN, whereas a portion of expenses and capital expenditures is denominated in foreign currencies.

Foreign exchange rate fluctuations have historically affected the level of our operating costs, finance costs, as well as the profit or loss on investing activities, and are expected to do so in the future. In particular, our exposure to foreign exchange rate fluctuations stems from our foreign currency payments made in different areas of our operations. These include, among others, payments for license fees, transponder capacity, purchase of content and equipment. The amount of the aforementioned equipment purchase exposure was reduced in the middle of last year as a result of the renegotiation of the terms and the switch to local currency payments.

The Company is exposed to foreign exchange risk in connection with the euro-denominated tranche of the SFA. Changes in the euro exchange rate against the zloty will result in an increase or decrease, respectively, in the zloty-denominated cash required to service interest payments on the euro-denominated tranche of the SFA, which will have a corresponding impact on the level of reported financial expenses.

Strong fluctuations in foreign exchange rates may also affect the amount of foreign exchange differences resulting from the recognition in the income statement of assets and liabilities denominated in foreign currencies, in particular the euro-denominated tranche of the SFA.

We have no control over how exchange rates change in the future, and consequently foreign exchange rate fluctuations will continue to affect (positively or negatively) our operations and financial results. Considering our open exposure to currency exchange risk, the Company has in place a market risk management policy and uses, inter alia, natural hedging and hedging transactions, in particular with regard to the currency risk arising from interest payments on the loan granted to the Group in EUR.

Valuation of financial Power Purchase Agreements

In recent years, the rise in market energy prices has enabled the development of renewable energy investments outside the support system, based on long-term power purchase agreements (PPAs). PPAs allow to purchase electricity directly from renewable energy producers (physical PPA) or to hedge the price of electricity against future energy prices on the Polish Power Exchange (financial PPA). A financial PPA is a financial derivative where the underlying price of electricity is settled through a contract for difference in which the parties agree on a strike price for electricity and a market reference price for the duration of the contract. Like other derivative instruments entered into by Group companies, financial PPAs are subject to periodic valuation at present value.

Due to the increasing volume of RES electricity generation by the Group's companies and the increasing use of financial PPAs by both electricity producers and consumers, the valuation of these contracts can have a significant impact on our results, in particular on gains on investment activities. The main factors influencing the valuation are the long duration of the financial PPAs (more than 10 years), changes in current and forecasted market electricity prices and fluctuations in market interest rates.

6. Risk factors

Cyfrowy Polsat is part of Polsat Plus Group, whose strategy is to build value primarily based on a convergent offer. A natural consequence of this strategy is a strong integration of operations of the Company and its subsidiaries, among others through integration of back-office functions within the Group or development of a common commercial offer for the Group, in order to achieve synergies in the form of increased efficiency and cost minimization. In view of the foregoing, we are of the opinion that an analysis of the risk and threat factors for the Company independently of the risk and threat factors for the Group may lead to erroneous conclusions about the Company.

The following is a list of risk factors and threats specific to the Company and its operations. These descriptions have been developed and expanded to include significant issues related to the operations of the entire Polsat Plus Group in chapter 6 of the Management Board report on the activities of Polsat Plus Group for the financial year ended December 31, 2023.

Risk factors related to our business and the sector in which we operate

●	The results of our operations in the telecommunications sector depend on the ability to effectively encourage the existing customers to use a wider range of our services, to win customers from competitive telecommunication operators, as well as the ability to reduce churn.
●	The performance of our pay TV depends on our customers' satisfaction, the acceptance of our programming content by viewers, as well as our ability to generate profit on acquired broadcasting rights.
●	We may be unable to attract or retain customers, if we fail to conclude or extend the license agreements under which we distribute key programs.
●	Our ability to increase sales of our services depends on the effectiveness of our sales network.
●	In our business, we depend on third-party providers for certain services, infrastructure or equipment. If these are delivered late or if they are not delivered at all our services may be delayed or even suspended.
●	We may be unable to keep pace with new technologies used on markets on which we operate.
●	We might be unable to maintain the good name of the major brands in our portfolio.
●	Goodwill and brand values may be impaired.
●	We may lose our management staff and key employees.
●	Disruptions to set-top box production may adversely affect our reputation and increase customer churn.
●	Broadcasting infrastructure, including information and telecommunications technology systems, may be vulnerable to circumstances beyond the Company control that may disrupt service provision.
●	We could become a party to labor disputes or experience growth of employment costs.
●	The administrative and court proceedings in which we are involved may result in unfavorable rulings.
●	Should any claims related to the infringement of third-party intellectual property rights be brought against us, we may be forced to incur substantial expenses to defend against those claims, to acquire a license for a third-party technology, or to redefine our business methods to eliminate the infringement.
●	Our own intellectual property rights and other means of protection may not adequately protect our business, and insufficient protection of our programming content, proprietary technologies and knowhow may cause profit erosion and customer churn.
●	We may not be able to reap the expected benefits of the past or future acquisitions and strategic alliances.

Risk factors associated with the Company’s financial profile

●	The servicing of our debt is very cash-intensive, and our debt servicing liabilities may impair our ability to finance our business operations.
●	We might be unable to refinance our existing debt, secure favorable refinancing terms, or raise capital to finance new projects.
●	We might be unable to repay our debts if control of the Company changes.

Risk factors associated with the market environment and economic situation

●	We are exposed to the effects of the regional or global economic slowdown and supply shocks being felt on the Polish market and affecting consumer spending in Poland.
●	We are exposed to the effects of the occurrence of extraordinary events such as a pandemic, epidemic or war.
●	Given the intense competition across all market segments in which we operate, there can be no assurance that in the future our customers will use our services rather than those of our competitors.
●	We face competition from entities offering alternative forms of entertainment and leisure.

Factors relating to market risks

When conducting its business operations, the Company is exposed to a number of financial risk factors, including:

●	credit risk,
●	liquidity risk,
●	market risk, including currency risk and interest rate risk.

The Company’s risk management policies are designed to reduce the impact of adverse conditions on the Company’s results. The Management Board is responsible for oversight and management of each of the risk factors that the Company is subjected to in its activities. Therefore, the Management Board has established an overall risk management framework as well as specific risk management policies with respect to market, credit and liquidity risks.

Detailed information about the Company’s exposure to each of the above risk factors, the Company’s objectives, policies and processes for measuring and managing risk were presented in Note 37 to the Company’s consolidated financial statements for the financial year ended December 31, 2023.

Risk factors associated with the legal and regulatory environment

●	The complexity, lack of clarity, and frequent amendments of Polish tax laws may lead to disputes with tax authorities.
●	The tax regime applicable to our operations and the sector in which we operate create numerous uncertainties.
●	Pending or future tax inspections, tax and customs inspections, tax proceedings and other reviews of the Company conducted by Polish tax authorities or local tax authorities abroad may result in additional tax liabilities in the countries where the Company conducted, conducts and will conduct its business (in particular in Poland).
●	We are exposed to changes of Polish law which may adversely affect labor costs.
●	There can be no assurance that in the competition and consumer protection authorities will not deem – despite our different assessment – the practices we use as limiting competition or violating the Polish consumer protection laws.
●	We may violate the acts of law and regulations governing our satellite TV distribution business, which are subject to periodic amendments.
●	No assurance can be given that we will not breach any personal data protection laws or regulations, or that we will not fail to meet requirements imposed by the President of the Personal Data Protection Office and we may incur pecuniary penalties for non-compliance with GDPR.

Risk factors associated with the Series D and E Bonds

Risk factors associated with the Series D and E Bonds have been described in detail in the Information Note on the issuance of Series D Bonds dated December 22, 2022 and the Information Note on the issuance of Series E Bonds dated September 14, 2023 which are available in Polish on the Polsat Plus Group corporate website.

Risk factors associated with climate

Climate-related risk factors, along with an analysis of climate scenarios and the resilience of the business models of each of Polsat Plus Group’s operating segment to climate risks are described in the "Sustainability Report of Polsat Plus Group 2023", which is available on the Polsat Plus Group corporate website.

7. Other significant information

7.1. Transactions concluded with related parties on conditions other than market conditions

Transactions with parties related to the Company in the financial year ended December 31, 2023 have been concluded exclusively on market conditions and are described in Note 40 of the financial statements for the financial year ended December 31, 2023.

7.2. Achievement of previously published forecasts

Pursuant to Article 35 (1a) and (1c) of the Bonds Act, the Company has presented, on its website under the link https://grupapolsatplus.pl/en/investor-relations/bonds, projections of the development of financial liabilities as of the last day of the fiscal year in which the bonds were issued and as of the last day of the following fiscal year, including the estimated value of financial liabilities and the estimated structure of financing, understood as the value and percentage share of liabilities from loans and borrowings, the issue of debt securities, and leasing in the total liabilities and equity of the Company's balance sheet and the consolidated balance sheet of the Group.

The following table compares the forecast with actual results based on the Company's standalone balance sheet.

	December 31, 2023 forecast	December 31, 2023 actual results
Value of financial liabilities (from loans and borrowings, issue of debt securities, and leasing)	PLN 6.6 billion	PLN 6.6 billion
Share in total liabilities and equity	33%	33%

The value of financial liabilities (from loans and borrowings, issuance of debt securities and leases) as at December 31, 2023 and the share of this value in the Company's total liabilities and equity do not deviate from the published estimates.

The Company did not publish forecasts for other financial results.

7.3. Information on loans granted

The following table provides information on the loans granted by the Company, together with the carrying value of these loans as of the balance sheet date. Margins on loans do not deviate from market conditions.

Borrower	Currency	Total loan amount (in millions in loan currency)	Maturity	Interest rate	Total carrying amount as of Dec. 31, 2023 [mPLN]1)
Polkomtel sp. z o.o.	PLN	1,650.0	31 Dec. 2028	WIBOR+margin	1,586.6
PAK Polska Czysta Energia sp. z o.o.	PLN	739.5	31 Dec. 2025	WIBOR+margin	874.3
PAK Polska Czysta Energia sp. z o.o.	EUR	684.2	31 Dec. 2025	EURIBOR+margin	375.1
Esoleo sp. z o.o.	PLN	97.9	various dates in 2024 - 2025	WIBOR+margin	100.4
Esoleo sp. z o.o.	EUR	37.5	various dates in 2024 - 2025	EURIBOR+margin	152.8
Netia S.A.	PLN	350.0	2025	WIBOR+margin	344.9
Pantanomo Ltd	EUR	24.0	30 Sep. 2026	EURIBOR+margin	96.7
Pozostałe	PLN	23.6	various dates in 2024-2031	WIBOR+margin	53.1
Pozostałe	EUR	26.6	various dates in 2026- 2031	EURIBOR+margin	24.6
Total					3,608.5
1) Converted into PLN at the exchange rate on the balance sheet date, includes accrued interest including VAT.

7.4. Information on sureties and guarantees granted by the Company

In connection with the implementation of investment projects in the green energy segment by its subsidiaries, the Company provided guarantees of a significant value for the execution of contracts for the implementation of individual wind farm projects, in particular contracts for the supply and installation of wind turbines concluded with Vestas Poland S.A. and Nordex Poland S.A. As of December 31, 2023, the total value of guarantees and warranties provided to the above companies for wind farm projects amounted to EUR 328.3 million, with maturity dates ranging from 2024 to 2026. The financial terms of the guarantees or sureties granted do not deviate from market conditions.

In addition, the Company issued corporate guarantees and warranties in EUR and USD, which guarantee the trade payables of its subsidiary Polkomtel sp. z o.o. to its suppliers. As of December 31, 2023, the total value of granted guarantees, converted into PLN at the exchange rate as of the balance sheet date, amounted to PLN 217.4 million. The guarantees expire between 2024 and 2026. The financial terms of the granted guarantees and warranties do not differ from market terms.

7.5. Material proceedings at the court, arbitration body or public authorities

Management believes that the provisions as at December 31, 2023 are sufficient to cover potential future outflows and the adverse outcome of the disputes will not have a significant negative impact on the Company’s financial situation. Information regarding the amount of provisions was not separately disclosed. as in the opinion of the Company’s Management such disclosure could prejudice the outcome of the pending cases.

Proceedings before the Office of Competition and Consumer Protection (UOKiK)

On December 30, 2016, the President of UOKiK issued a decision stating that the operations of the Company were allegedly infringing collective consumer interests by presenting promotional offers, which in the opinion of the authorities were impossible to conclude. Pursuant to the decision of the President of UOKiK, the Company was charged with a penalty in the amount of PLN 4.4 million. The Company appealed to SOKiK against the decision. On October 14, 2019, SOKiK dismissed the Company’s appeal. The Company appealed against the decision. On December 31, 2020, the Company appeal was dismissed. On January 14, 2021, the Company paid the penalty. The Company submitted a cassation appeal to the Supreme Court. On April 20, 2022, the Supreme Court accepted the Company's cassation appeal for consideration. At a closed session on May 25, 2023, the Company's cassation appeal was dismissed.

On December 19, 2019, the President of UOKiK issued a decision stating that the operations of the Company were allegedly infringing collective consumer interests by hindering access to ZDF and Das Erste channels during the Euro 2016 championship by removing these channels and incomplete and unreliable information to consumers in response to claims regarding unavailability of the above programs. Pursuant to the decision of the President of UOKiK the Company was charged with a penalty in the amount of PLN 34.9 million. The Company appealed against this decision to SOKiK. On February 14, 2022, First Instance Court dismissed the Company’s appeal in its entirety. The Company submitted a cassation appeal to the Court of Appeal in Warsaw. The appeal hearing took place on October 21, 2022. On November 21, 2022, the Court of Appeal in Warsaw repealed the appealed judgment in its entirety and referred the case to the Regional Court in Warsaw for examination and resolution. On July 24, 2023, Company's appeal was again dismissed. On September 6, 2023 the Company filed an appeal against the judgment. To date, a hearing date has not been set.

Other proceedings

On April 28, 2017, the Association of Polish Stage Artists (“ZASP”) filed a lawsuit against Cyfrowy Polsat for payment of PLN 20.3 million. The Company issued an objection in the writ-of-payment proceedings and filed for its dismissal entirely. On January 10, 2018, the Court issued a decision to refer the case to mediation proceedings. Mediation ended without a settlement. The hearing took place on May 8, 2019. Both parties have submitted an application for re-referral to the mediation proceedings for a period of three months. The court approved application and postponed the hearing without a deadline. Mediation ended without a settlement. On May 6, 2020, the Company received a letter from the Court, which included the mediator's position summarizing the course of mediation, with a request to refer to its content. On May 25, 2020, the Company submitted a response informing the Court about the settlement being impossible to reach by the parties. The hearing took place on October 20, 2021. At the end of March 2022 the Company received a letter extending the previous claim by the period from January 1, 2010 to December 31, 2020, thus the value of the lawsuit was increased by over PLN 120.0 million. The court set the hearing dates for December 15, 2023 and April 17, 2024. The hearing scheduled for December 15, 2023 has been canceled.

By lawsuit, delivered to the Company on 16 December 2019, the Association of Performing Artists (SAWP) filed two claims against the Company: information claim and claim for payment. The information claim relates to television programs rebroadcasted by the Company in the period from August 20, 2009 to August 20, 2019. In the claim for payment, SAWP claims PLN 153.3 million for the alleged violation of related rights to artistic performances of musical and verbal - musical works through their non-contractual cable rebroadcast. The Company filed for the dismissal entirely. The last hearing took place on March 16, 2022. The court set the hearing date for January 17, 2024. The hearing was adjourned without a date.

The initiation by the European Commission of the procedure based on Art. 108 sec. 2 of the European Union Treaty

In the beginning of October 2020, Cyfrowy Polsat and Sferia S.A. (Sferia), a company owned by Polsat Plus Group in 51% since February 29, 2016, received from the Ministry of Digital Affairs a copy of the European Commission’s decision dated September 21, 2020 regarding the initiation of the formal investigation procedure against the Republic of Poland concerning the alleged illegal state aid provided to Sferia. The alleged illegal state aid relates to granting in 2013 to Sferia the right to use a frequency block of 800 MHz range in place of the frequency 850 MHz range previously held by Sferia. According to the decision, the European Commission intends to investigate, whether the state aid was granted, and if so, whether it can be considered compatible with the internal market. On February 4, 2022, the European Commission began consultations on this matter and Cyfrowy Polsat and Sferia submitted their comments. Both companies believe that no illegal state aid was granted. In addition to the matters described above, there are also other proceedings, for which provisions have been made according to the best estimates of the Management Board as to potential future outflows of the economic benefits required for their settlement. Information regarding the amount of provisions was not separately disclosed, as in the opinion of the Group's Management, such disclosure could prejudice the outcome of the pending cases.

Decision of the Head of the Małopolska Tax Office in Cracow

On 15 February 2018 the Head of the Małopolska Tax Office in Cracow (“Tax Office”) issued the decision assessing the tax liability from uncollected withholding corporate income tax in 2012 in the amount of PLN 24.2 million increased by interest on tax arrears.

In the issued decision the Tax Office contested the Company’s right to an exemption from the obligation to withhold income tax on certain interest payments in 2012. The Company appealed against the decision of the Tax Authority on the basis of acquired opinions issued by renowned entities. The Company has not created any provisions encumbering its financial results.

On 10 July 2018 the Tax Office upheld the previous decision dated 15 February 2018. The Company does not agree with the decision of the Tax Office in question and appealed against it to the Voivodship Administrative Court in Cracow. The Voivodship Administrative Court in Cracow dismissed the complaint in the ruling as of 21 February 2019. The Company does not agree with this decision and filled a cassation complaint to the Supreme Administrative Court in Warsaw. The Supreme Administrative Court upheld the complaint and transferred the case to the Voivodship Administrative Court for re-examination in its decision on 17 August 2022. The Voivodship Administrative Court, at the hearing on 15 March 2023, revoked the decision of the Head of the Małopolska Tax Office in Kraków and referred the case for reconsideration by this authority. On 23 January 2024, the Company received the decision of the tax authority discontinuing the proceedings in the case.

The Tax Office control activities in the aforesaid matter were in progress in relation to 2013 and 2014.

The Head of the Małopolska Tax Office in Cracow issued a decision on 19 July 2019 in respect to the year 2013. The decision assessed the Company’s tax liability from uncollected withholding corporate income tax in 2013 in the amount of PLN 25.1 million increased by interest on tax arrears. The Company appealed against the decision, but on 14 February 2020 the Tax Authority maintained its position. The Company filed a complaint against the decision to the Administrative Court. On 15 October 2020, the Voivodship Administrative Court in Cracow dismissed the complaint. The Company, based on the opinions of reputable advisers, does not agree with the court's decision and filed a cassation appeal to the Supreme Administrative Court in Warsaw. The Supreme Administrative Court, at the hearing on 10 January 2024, dismissed the judgements of the first instance court and the decisions of the Head of the Małopolska Tax Office in Cracow issued in these cases in the second instance. Company is waiting for the above-mentioned actions of tax authority consuming the court's position and guidelines. The Company has not created any provisions encumbering its financial results.

The Head of the Małopolska Tax Office in Cracow issued a decision on 20 September 2019 in respect to the year 2014. The decision assessed the Company’s tax liability from uncollected withholding corporate income tax in 2014 in the amount of PLN 1.7 million increased by interest on tax arrears. The Company appealed against the decision of the Tax Authority. In a second instance decision issued on 8 June 2020, the Tax Authority fully maintained its position. The Company filed a complaint against the decision to the Administrative Court. On 20 October 2020, the Voivodship Administrative Court in Cracow dismissed the complaint. The Company, based on the opinions of reputable advisers, does not agree with the court's decision and filed a cassation appeal to the Supreme Administrative Court in Warsaw. The Supreme Administrative Court, at the hearing on 10 January 2024, dismissed the judgments of the first instance court and the decisions of the Head of the Małopolska Tax Office in Cracow issued in these cases in the second instance. Company is waiting for the above-mentioned actions of tax authority consuming the court's position and guidelines. The Company has not created any provisions encumbering its financial results.

7.6. Changes to the principle rules of management of our Company

There were no changes to the principle rules of management of our Company in the year 2023.

7.7. Information on seasonality

Revenue generated by the Company is not subject to material seasonal fluctuations.

7.8. Sales markets and dependence on the supplier and customer markets

All our services are offered in Poland. The share of any of our suppliers or customers does not exceed 10% of our operating revenue.

7.9. Disclosure of non-financial information

Concurrently with this Report, we published the “Sustainability Report of Polsat Plus Group for 2023,” which comprehensively addresses key non-financial issues pertaining to the Company ant its capital group and demonstrates how we aim to achieve our strategic goals in a sustainable and responsible manner. The publication complies with the Global Initiative Reporting Standard, in the Core option, as well as Article 49b items 2-8 of the Accounting Act. The report contains detailed information relating to environmental matters, social and employee-related matters, respect for human rights, anti-corruption and bribery matters with respect to both Polsat Plus Group and Cyfrowy Polsat as the parent company of the Group.

The “Sustainability Report of Polsat Plus Group for 2023” is available on Polsat Plus Group’s corporate website.

7.10. Climate issues

Recognizing the importance and magnitude of ongoing climate change, the Company conducted a scenario-based analysis of the climate risks associated with its operations and those of the Group as a whole. As a result, the physical risks associated with climate change and transition risks in the Group's various business areas were identified, as well as the sources of actual and potential future greenhouse gas emissions. The approach used in the analysis is consistent with the Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD, June 2017), i.e. the logic presented by the TCFD for analyzing climate risks at a qualitative level (including the division into physical and transition risks, as well as further categorization and characterization). The scenario analysis conducted allows us to better understand the current resilience of our business model to climate-related risks and to focus on developing appropriate mitigation measures. A full analysis of climate-related risk factors, along with an analysis of climate scenarios and the resilience of the business model of each of Polsat Plus Group's business segments to climate risks, is described in the "Sustainability Report of Polsat Plus Group 2023."

The Company is taking steps to counter the negative effects of climate change, including investing in the development of green energy generation capacity from renewable sources such as the sun, wind and biomass, and building a complete value chain of a hydrogen-based economy. The measures we are taking are aimed at decarbonizing our business by systematically increasing the share of green energy in our own consumption, as well as reducing the emissions of our customers. We estimate that as a result of the current investment plan of approximately PLN 5 billion, which includes the installation of approximately 1,000 MW of clean energy production capacity, we will contribute to reducing greenhouse gas emissions in the Polish economy by more than 2 million tons of CO2 equivalent per year from 2026.

In November 2022, we adopted a framework document for linking Polsat Plus Group's external financing to its long-term sustainability goals (the "Polsat Plus Group Sustainability-Linked Financing Framework"). Currently, all of our external financing, both in the form of bank loans and bonds, is linked to the sustainability goals contained in this document (for more information on sustainable financing, see Section 4.3. - External financing).

7.11. Research and development

In 2023, the Company did not conduct work in the field of research and development.

7.12. Insurance agreements

We maintain insurance coverage for our Company and its operations, substantially against all risks and with sums insured at levels typical of pay TV providers and telecommunication operators operating in Poland.

The Company maintains automobile insurance, property insurance against fire and other casualty events with a loss of profits extension, business and property liability insurance (including product liability), professional liability insurance for broadcasting and telecommunications, loss of profit insurance, and directors and officers liability insurance for the Company, all of which are purchased at arm's length.

We believe that our insurance coverage is in line with the practice followed by other pay TV providers and telecommunication operators in Poland.

7.13. Business Contingency Plan

As a Group we have over 10 years of experience in business continuity. The Business Contingency Plan of Polkomtel was established in 2010 and is currently maintained in accordance with PN-EN ISO 22301:2020-04. The plan covers processes and critical services executed and provided by Polkomtel and Cyfrowy Polsat. The periodic conduction of the Business Impact Analysis is the key element of the Business Contingency Plan and includes an update of the list of processes and critical services which is approved by resolution of management boards of both companies. The latest update of the Business Contingency Plan was accepted on October 19, 2022. Within the current and periodic (once every two years) update of the Business Contingency Plan we examine threats and vulnerabilities in critical processes and services, and perform risk analysis aimed at identifying main threats and defining recommendations with respect to groups of resources, such as locations, human resources, external and internal service providers, office infrastructure, data stored in both an electronic and paper form, the technical and IT infrastructure.

Within the Business Contingency Plan we maintain a dedicated structure - the Crisis Management Centre – which is targeted to prevent crisis situations in the Group thanks to reacting to incidents which exceed the competences of individual managers running separate organizational units as well as coordinating all emergency and restoration actions of the organization in the crisis mode. The prepared Survival Strategy and alternative operating methods as well as periodic testing of essential elements of the Plan and ongoing training of new staff and crisis team members ensure business continuity of critical processes and services covered by the Business Contingency Plan of Polkomtel and Cyfrowy Polsat. The implementation of the Business Continuity Plan was confirmed as part of the PN-EN ISO/IEC 27001:2017-06 certification obtained in 2022.

7.14. Charity and sponsorship activities

We have been engaged in corporate social responsibility activities for many years. As a Group, we fulfill our social mission in five areas.

We undertake environmental activities with a view to sustainable development and a better quality of life for our stakeholders. The production of clean energy and green hydrogen, energy efficiency, green products or responsible waste management are our key areas of focus in terms of "green change". We also focus on environmental education, by being an active member of the Clean Poland Program Association and running ambitious TV and Internet projects with a wide reach.

In terms of safety, the Plus network has been working with rescue organizations (WOPR, MOPR, TOPR, GOPR) for more than 20 years, providing: mountain and water rescue numbers, the Integrated Rescue System and the Rescue mobile application. We also actively fight against TV piracy and train employees in cybersecurity.

We are consistently engaged in the promotion of sport and healthy lifestyle.

We provide social education by, among others, disseminating medical knowledge, knowledge about ecology or safety trough TV Polsat's programs, articles and podcasts on Interia, the magazine for Plus and Polsat Box subscribers and during various events. We are also actively combating digital exclusion through the development and popularization of modern Internet access technologies and the Plus network's ongoing cooperation with the Copernicus Science Center).

We support society mainly through cooperation with the Polsat Foundation, SMS Premium (charity) and volunteer initiatives of our employees.

The details of our charity and sponsoring activities are described in the “Sustainability Report of Polsat Plus Group 2023.”

7.15. Information on remuneration policy of Cyfrowy Polsat S.A.

On July 23, 2020, the Annual General Meeting adopted, based on a draft resolution proposed by the Company’s Management Board and taking into account the opinion of the Supervisory Board’s Remuneration Committee, the Remuneration Policy for the Management Board and Supervisory Board Members of Cyfrowy Polsat S.A. The full wording of the policy is publically available at the following address:

https://grupapolsat.pl/sites/default/files/remuneration_policy_for_mb_and_sb_20200723.pdf

The adopted policy aims to ensure sustained growth of the Company’s value, the achievement of which by the Management Board and the Supervisory Board requires, among others, setting up of a relevant structure of remuneration of the members of the Management Board and the Supervisory Board on account of their overall duties. This aim is accomplished by restricting the remuneration of these individuals to a fixed part, allowing them to perform their duties concerning the overall operations of the Company without focusing on the pursuit of selected specific goals only.

The Remuneration Policy for the Management Board and Supervisory Board Members of Cyfrowy Polsat S.A. is based on a general assumption that market volatility, the social and economic situation as well as the need for a flexible response to the emerging risks and business opportunities provide no justification for setting fixed goals. The required flexible response to the changing situation and to the emerging challenges is assured – in the case of Management Board Members – by potential bonuses that can be awarded to them. Such a solution offers flexibility in terms of assuring stable operations of the Company and pursuing its long-term interests.

The remuneration of Management Board Members consists of a fixed part, having the form of a base salary. Management Board Members may have the title to a bonus on the terms defined in the deed establishing their corporate relation or their employment relation. Subject to the terms set by the Supervisory Board in the deed establishing a corporate relation or an employment relation, the Management Board Members may be also covered by additional pension schemes.

In addition, Management Board Members may be entitled to additional benefits of permanent or periodic nature. These include in particular healthcare services for a Management Board Member or for the members of his/her family, right to use the elements of the Company’s property, and life insurance and D&O insurance.

Moreover, Management Board Members employed under an employment contract are entitled to the same rights as all other employees of the Company by virtue of the Labor Code regulations, as defined by Article 9 of the Labor Code. Remuneration and other benefits also include benefits on account of the Management Board’s activities in the Company’s subsidiaries.

The Supervisory Board, based on the recommendation issued by the Supervisory Board’s Remuneration Committee, is entitled to determine the amount of the base salary, the conditions for acquiring the right to a bonus as well as other components of the remuneration and benefits in the resolution serving as the basis for entering by a Management Board Member into a corporate relation or into an employment relation, and depending on the nature of the duties of a given Management Board Member as well as the conditions of his/her employment.

Supervisory Board Members receive fixed remuneration on account of the function performed on the basis of a corporate relation. The remuneration may differ depending on the function in the Supervisory Board, especially in connection with participation in the work of respective Supervisory Board committees. In justified cases a Supervisory Board Member may receive additional remuneration. The amount of the remuneration of the Supervisory Board members is determined by the General Meeting.

There were no changes to the Remuneration Policy since the date of its adoption. In parallel, the Remuneration Policy stipulates that it will be adopted by the General Meeting not less frequently than once every four years.

The shape of the Remuneration Policy as proposed by the Management Board and adopted by the General Meeting derives from the many years of remuneration practice developed within Polsat Plus Group and, given the Company’s proven track record of achieving long-term value growth for its Shareholders as well as the Group’s stable functioning, is evaluated as an effective tool for remunerating and motivating the Company’s Management Board and Supervisory Board Members.

Reports on the remuneration of the Management Board and the Supervisory Board Members of the Company are publically available on Polsat Plus Group’s website.

8. Cyfrowy Polsat on the capital market

8.1. Shares of Cyfrowy Polsat

Shares of Cyfrowy Polsat are listed on the Warsaw Stock Exchange since May 6, 2008. The share capital of the Company is PLN 25,581,840.64, divided into 639,546,016 shares. The total number of votes at the General Meeting is 818,963,517.

The table below presents the characteristics of the shares issued as of December 31, 2023:

Series	Number of shares	Type of shares	Number of votes at the General Meeting	Face value [PLN]
A	2,500,000	Preferred shares (2 votes per share)	5,000,000	100,000.0
B	2,500,000	Preferred shares (2 votes per share )	5,000,000	100,000.0
C	7,500,000	Preferred shares (2 votes per share )	15,000,000	300,000.0
D	166,917,501	Preferred shares (2 votes per share )	333,835,002	6,676,700.0
D	8,082,499	Ordinary shares, introduced to trading	8,082,499	323,300.0
E	75,000,000	Ordinary shares, introduced to trading	75,000,000	3,000,000.0
F	5,825,000	Ordinary shares, introduced to trading	5,825,000	233,000.0
H	80,027,836	Ordinary shares, introduced to trading	80,027,836	3,201,113.4
I	47,260,690	Ordinary shares, introduced to trading	47,260,690	1,890,427.6
J	243,932,490	Ordinary shares, introduced to trading	243,932,490	9,757,299.6
Total	639,546,016		818,963,517	25,581,840.6
including:	179,417,501	not traded	358,835,002	7,176,700.0
including:	460,128,515	traded	460,128,515	18,405,140,6

On April 20, 2011, the Company issued 80,027,836 Series H ordinary bearer shares with a nominal value of PLN 0.04 each. On May 30, 2011, the shares were registered with the National Depository for Securities (KDPW) under ISIN code PLCFRPT00013 and admitted to trading on the primary market. The issue of Series H shares served as one of the sources of financing for the acquisition of Telewizja Polsat.

On May 7, 2014, the Company issued 47,260,690 Series I shares and 243,932,490 Series J shares with a nominal value of PLN 0.04 each. On May 14, 2014, these shares were registered with KDPW under ISIN codes PLCFRPT00013 and PLCFRPT00021, respectively. The Series I Shares were admitted to trading on May 12, 2014 and the Series J Shares were admitted to trading on April 20, 2015. The Series I and J Shares were issued to finance the acquisition of Metelem Holding Company Limited, the indirect owner of Polkomtel Sp. z o.o.

As at 31 December 2023, 88,842,485 ordinary shares, representing 13.89% of the capital, were held by Cyfrowy Polsat as a result of the acquisition of treasury shares initiated by Resolution No. 7 of the Extraordinary General Meeting of Shareholders of November 16, 2021. Pursuant to Article 364(2) of the Commercial Companies Code, the Company does not exercise the participation rights from its own shares.

Basic data on traded shares

Date of first quotation		May 6, 2008
Component of indices		WIG, WIG20, WIG30, WIG-ESG, WIGtech
Macrosector		Technology
Market		main
Quotation system		continuous
International Securities Identification Number (ISIN)		PLCFRPT00013 (shares admitted and introduced to trading) PLCFRPT00062 (shares with preferential voting rights)
Cyfrowy Polsat’s identification codes		● WSE: CPS ● Reuters: CYFWF.PK ● Bloomberg: CPS:PW

8.2. Shares quotes

Performance of Cyfrowy Polsat shares in 2023

(1) Change December 29, 2023 vs December 30, 2022

(indexed; 100 = closing price on December 30, 2022)

Performance of Cyfrowy Polsat shares since the debut on the WSE in May 2008 until the end of 2023 compared to selected WSE indexes

(indexed; 100 = closing price on May 6, 2008)

(1) change December 29, 2023 vs. May 6, 2008

(2) change December 17, 2021 vs. May 6, 2008, index published until December 17, 2021

(2) change December 29, 2023 vs. June 24, 2019, 100 = closing price on June 24, 2019, index started to be published

Cyfrowy Polsat shares on the stock exchange in 2023

		2023	2022
Year-end price	PLN	12.33	17.61
High for the year	PLN	19.60	34.82
Low for the year	PLN	11.42	15.90
Average for the year	PLN	15.52	22.56

Average daily turnover	PLN ‘000	11,048	13,020
Average daily trading volume	shares	761,312	596,114

Number of shares (as at year-end)	shares	639,546,016	639,546,016
Listed shares	shares	460,128,515	460,128,515
Market capitalization (as at year-end)	PLN ‘000	7,885,602	11,262,405

Market capitalization of Cyfrowy Polsat since its debut on the WSE [billion PLN]

8.3. Analysts’ recommendations

Brokers covering the Company

Local

International

● Dom Maklerski BOŚ S.A.

● Biuro Maklerskie mBanku S.A.

● Dom Maklerski PKO BP S.A.

● Trigon Dom Maklerski S.A.

● IPOPEMA Securities S.A.

● Bank Pekao Biuro Maklerskie

● ERSTE Group Research

● Wood&Company

● Santander Biuro Maklerskie

Structure of recommendations as at April 9, 2024

Target price as at April 9, 2024 [PLN]

lowest		18.8
highest		9.9
average		14.2

Close dialogue with the capital market

The goal of our corporate strategy is to create sustainable value of the Company. We support this strategy through regular and open communication with all capital market participants.

In order to ensure current access to information we participate in conferences with investors and we organize numerous individual meetings. Moreover, every quarter, after the publication of our financial results, we organize meetings with investors and sell-side analysts with Members of the Company’s Management Board. Both are open events. In 2023, we held meetings with approximately 260 representatives of the capital market, including approx. 15 conferences, both face-to-face and online.

When communicating with the capital market we are guided by the main principle of transparency and equal access to information. Following this principle, we introduced the rule of limited communication before the publication of our financial results. Under this rule the representatives of the Company avoid discussions or meetings with analysts and investors two weeks prior to the publication of the quarterly results. This rule is meant to increase transparency and ensure equal access to information about the Company before the publication of our financial results.

To ensure proper fulfillment of the information obligations imposed by the relevant regulations, including the MAR Regulation, we have implemented, at the Group level, detailed internal rules which define, among others, the principles of analysis and identification of events occurring within our organization, the procedures to be followed upon obtaining any information which is subject to reporting as well as the deadlines for fulfillment of information disclosure requirements. We have also adopted an Individual Reporting Standard which supports the identification and classification of events as inside information.

In order to reach a wide audience we use modern tools to communicate with capital market representatives, such as a website dedicated to investors (http://www.grupapolsat.pl/en/investor-relations), a reliable and practical source of information about Polsat Plus Group, electronic newsletters, selected social media, periodic newsletters including both information on current events in Polsat Plus Group and latest market developments, as well as reminders of the most important events in the Company. In addition, we have been using online meeting tools to enable all interested investors and analysts to actively participate in the Company's events.

8.4. Dividend policy

On December 20, 2021, the Management Board of the Company adopted a dividend policy of the Company for the years 2022-2024.

The main goal of the strategy of the Group is the permanent growth of the value of the Company for its Shareholders. We intend to achieve this goal by implementing the major elements of our operational strategy which include:

●	growth of revenue from services provided to individual and business customers through the consistent building of our customer base value by maximizing the number of users of our services as well as the number of services offered to each customer and simultaneously increasing average revenue per user (ARPU) and maintaining a high level of customer satisfaction;
●	growth of revenue from produced and purchased video content by expanding its distribution and maintaining the audience shares of channels produced by us;
●	use of opportunities arising from the advancing technological changes and market opportunities in order to expand the scope of our products and services;
●	building a position on the clean, renewable energy market, in particular from the sun, wind, biomass, thermal waste treatment and building a complete value chain of a hydrogen-based economy, which creates opportunities to build a new stream of revenues for Polsat Plus Group and will bring tangible social benefits in the form of greenhouse gas emissions reduction;
●	effective management of the cost base of our integrated capital group by exploiting its inherent synergies and economies of scale, and
●	effective management of the Group’s finances, including its capital resources.

Predictable dividend payouts to Shareholders is one of the main goals underlying the capital resources management policy of the Company. At the same time, bearing in mind the goal to achieve and maintain a low level of indebtedness, designated by the General Meeting of Shareholders in the Articles of Association of the Company (the “Target Leverage Ratio”), the Management Board of the Company is obligated to formulate the financial policy of Polsat Plus Group in such a way, so as to meet the expected Target Leverage Ratio. In view of the above, the Management Board of the Company intends to present a proposal concerning dividend payout together with the Management Board’s recommendation to the General Meeting annually, subject to the observance of the following general principles:

●	the amount of a dividend paid out every year shall guarantee an attractive return on invested capital to the Company’s Shareholders;
●	the level of the obtained return shall be shaped in relation to the commonly available on the Polish market forms of safe investing of funds, in particular in relation to the level of bank deposits rates, while taking into account a risk premium associated with floating of Cyfrowy Polsat’s share prices on the Warsaw Stock Exchange;
●	the annually submitted proposal for distribution of the Company’s net profit for the previous financial year should allow for the continuation of gradual reduction of the net debt of Polsat Plus Group in order to achieve the Target Leverage Ratio.

In regard to the above, after having reviewed the investment plans of Polsat Plus Group and evaluated the possibilities of allocating the expected cash resources of the Group with an aim to pay out dividends to the Shareholders of the Company, in the years 2022-2024 the Management Board of the Company intends to recommend to the General Meeting dividend payout in the total amount of not less than PLN 3.00 per share in three installments as follows:

●	at least PLN 1.00 per share to be paid out from net profit generated in 2021;
●	at least PLN 1.00 per share to be paid out from net profit generated in 2022;
●	at least PLN 1.00 per share to be paid out from net profit generated in 2023.

Simultaneously, the Management Board underscores that every time when presenting a proposal for distribution of the profit for the previous year it will take into account the Group’s net profit, financial standing and liquidity, existing and future liabilities (including potential restrictions related to facility agreements and other financial documents), the assessment of the Group’s prospects in specific market and macroeconomic conditions, potential necessity of spending funds for the Group’s development, in particular through acquisitions and embarking on new projects within the framework of the Group’s strategy, one-off items, as well as valid legal regulations. The dividend policy will be subject to regular verification by the Company’s Management Board. The new dividend policy takes effect from January 1, 2022.

Distribution of net profit of Cyfrowy Polsat for 2022

Acting in accordance with resolution no. 27 of the Annual General Meeting, held on June 29, 2023, regarding profit distribution, net profit earned by the Company in the financial year ended December 31, 2022 in the amount of PLN 1,248.6 million was allocated in full to reserve capital.

The Company's Management Board recommendation not to pay the dividend from the 2022 profit was due to the capital-intensive strategic investments carried out by the Company as part of its Strategy 2023+, aimed at continuing the development of Polsat Plus Group over the long term in line with the overarching strategic goal of sustainably growing the Company's value for its shareholders.

At the same time, the Management Board took into account the Company's net debt ratio, which remains at an elevated level, as a result of the financing of strategic investments, as well as the unfavorable macroeconomic environment, in particular high inflationary pressure and persistently high interest rates that translate into rising debt service costs for the Company.

9. Corporate governance Statement

9.1. Principles of corporate governance which the Company issuer is subject to

As at December 31, 2023, Cyfrowy Polsat S.A. (the “Company”) was subject to corporate governance principles outlined in the “Best Practices of WSE Listed Companies in 2021” (“Best Practices 2021”), constituting an appendix to resolution No. 13/1834/2021 of the Council of WSE of March 29, 2021 (this document is available on the official website of the Warsaw Stock Exchange dedicated to the issues of the corporate governance of listed companies - https://www.gpw.pl/dobre-praktyki2021).

Application of principles outlined in the Best Practices 2021

The Management Board of the Company adopted the recommendations and principles specified in the Best Practices 2021. In 2023, the Company did not comply with principles set out in items 1.4., 1.4.1., 2.1., 2.2., 3.2., 3.6., 3.7., 3.9., 3.10., 4.1. and 4.9.1.

Below, the Company presents explanations regarding non-compliance or partial application of:

●	Principle 1.4. regarding the ensuring of quality communications with stakeholders, as a part of the business strategy, companies publish on their website information concerning the framework of the strategy, measurable goals, including in particular long-term goals, planned activities and their status, defined by measures, both financial and non-financial. The assumptions of the business strategy, along with the description of non-measurable and selected measurable goals, as well as the information on achieved results and the accomplishment of the strategic goals are published by the Company on its website as well as in Polsat Plus Group’s annual reports on the activities of the management board and in Polsat Plus Group’s sustainability reports. In connection with the publication of its new strategy in December 2021, the Company's Management Board formulated and published on the Group's corporate website measurable long-term strategic goals, both financial and operational, as well as non-financial, particularly related to the expected reduction of greenhouse gas emissions. In addition, in November 2022, the Company formulated and published additional key performance indicators and quantified long-tem sustainability performance targets relating specifically to environmental issues in Polsat Plus Group's Sustainability-Linked Financing Framework, a document that had undergone an independent expert review. The Company provides disclosures on planned and undertaken activities as well as progress in the achievement of its goals in Polsat Plus Group’s annual reports on the activities of the management board and in Polsat Plus Group’s sustainability reports.
●	Principle 1.4.1. stating that information concerning the ESG strategy should explain, among others, how the decision-making processes of the company and its group members integrate climate change, including the resulting risks. On December 20, 2021, the Company adopted and announced the assumptions of Polsat Plus Group's new strategy, including strategic assumptions in the area of ESG. The Management Board identified the unfavorable local energy mix as a key challenge for the Polish society and economy, as it impacts negatively both air quality (social aspect) and the cost of conducting business or living in Poland (economic aspect). Accordingly, as part of its new strategy, Polsat Plus Group is focused, among others, on developing new areas of activity, particularly the production and sales of energy from zero- and low-emission sources. In the opinion of the Company's Management Board, the implementation of Polsat Plus Group Strategy 2023+ has a chance to effectively combine ESG considerations with building a new revenue stream for Polsat Plus Group, with long-term benefits for the Company's stakeholders. In its sustainability reports, the Company publishes detailed information regarding the governance principles and the procedures covering the environmental issues that are valid in the Company as well as in the Company’s key subsidiaries, describes in detail the efforts of the entire group in the areas of conservation of natural environment and education of the public in this area as well as outlines climate-related risk analysis, taking into account the analysis of climate scenarios and the resilience of the business model of individual business segments to climate risks.
●	Principle 2.1. stating that companies should have in place a diversity policy applicable to the management board and the supervisory board, approved by the supervisory board and the general meeting, respectively. The diversity policy defines diversity goals and criteria, among others including gender, education, expertise, age, professional experience, and specifies the target dates and the monitoring systems for such goals. With regard to gender diversity of corporate bodies, the participation of the minority group in each body should be at least 30%. The Company has a Human Rights Protection Policy, which also includes an Equal Opportunity Policy, a Diversity Protection Policy, an Anti-Discrimination Policy, a Protection Against All Forms of Violence Policy, a Freedom of Association Policy, and a Safe Work Environment Policy. The Human Rights Protection Policy also operates in the companies belonging to the Company’s capital group. The provisions of the policy apply to all employees, including management board and supervisory board members. The Company would like to note that high degree of diversity is assured in the Management Board and the Supervisory Board in such areas as age, education, competence and professional experience. Moreover, in spite of the lack of a defined goal, the Management Board fulfills the diversity principle related to gender as women make up 50% of the Management Board. The Human Rights Protection Policy adopted by the Company and by the member companies of the Company’s capital group prohibits discrimination of any kind related to employment, direct or indirect, especially in respect of gender, age, sexual-orientation, experience, potential disability, nationality, ethnic and social origin, color of skin, language, parental status, religion, denomination or lack of denomination, political views as well as in respect of the location of the work of place, form of employment, trade union membership, or any other dimension of diversity as defined by valid law. The Human Rights Protection Policy and the policies operating under it do not define, however, the minimum goal for diversity in terms of gender, hence the Company does not apply principle 2.1.
●	Principle 2.2. stating that decisions to elect members of the management board or the supervisory board of companies should ensure that the composition of those bodies is diverse by appointing persons ensuring diversity, among others in order to achieve the target minimum participation of the minority group of at least 30% according to the goals of the established diversity policy referred to in principle 2.1. The provisions of the Group’s diversity policy apply to all of the Group’s employees, including Management Board and Supervisory Board Members. The Company’s goal is to assure diversity, including diversity in terms of gender, for higher ranking positions, nevertheless the persons who make decisions while selecting Management Board and Supervisory Board Members are above all guided by the candidates’ competencies, their professional experience and education.
●	Principle 3.2. stating that the companies’ organization includes units responsible for the tasks of individual systems and functions unless it is not reasonable due to the size of the company or the type of its activity. The Company effectively carries out the tasks listed in the principle 3.1, however dedicated organizational units responsible for managing risk and compliance issues have not been established in the Company’s organizational structure. Nonetheless, relevant internal processes and procedures have been implemented and operate in the Company, assuring efficient management of financial and operational risks as well as monitoring of compliance of the Company’s operations with applicable regulations. High-level managers, managing respective areas covered by specific procedures, are responsible for the efficiency and the proper functioning of these procedures. In spite of the lack of a separate compliance function, control of the Company's compliance in various areas with applicable legislation is executed through internal regulations and takes place at the level of individual organizational units which are responsible for a given area of operations in the capital group, including, in particular, within the finance, controlling, legal, administrative divisions. The Management Board verifies on an on-going basis the correctness of functioning of the internal processes in the areas of risk management and compliance of operations with applicable regulations, and takes action whenever necessary. The Supervisory Board, and in particular the Supervisory Board’s Audit Committee, monitors and assesses the effectiveness of functioning of the internal processes of operational and financial risk management, including the process of drafting of financial statements on the basis of the documents and reports presented by the Management Board and by the person responsible for internal audit as well as on the basis of other information obtained in the course of the Supervisory Board’s on-going activities.
●	Principle 3.6. stating that the head of internal audit reports organizationally to the president of the management board and functionally to the chair of the audit committee or the chair of the supervisory board if the supervisory board performs the functions of the audit committee. In accordance with the organizational structure adopted in the Company, the internal auditor reports directly to the Management Board Member responsible for finance – which is in line with IIA (The Institute of Internal Auditors) standards. The internal auditor functionally reports to the Chairman of the Audit Committee. In the opinion of the Company’s Management Board, the internal audit function present in the Company operates in an effective and independent manner.
●	Principle 3.7. stating that principles 3.4 to 3.6 (concerning, the linking of the remuneration of persons responsible for risk and compliance management and of the head of internal audit with the performance of delegated tasks rather than short-term results of the company, the direct reporting of persons responsible for risk and compliance management report to the president or other member of the management board and the direct reporting of the head of internal audit reports organizationally to the president of the management board and functionally to the chair of the audit committee or the chair of the supervisory board if the supervisory board performs the functions of the audit committee, respectively) apply also to members of the company’s group which are material to its activity if they appoint persons to perform such tasks. By analogy to the principles 3.4-3.6, the principle are applied partially by the Company. Principles 3.4. and 3.5. also apply to those members of the Company’s capital group who are essential from the point of view of the group’s operations. Principle 3.6, in turn, does not apply to the group’s essential companies since in the selected entities being members of the Company’s capital group the internal audit function is fulfilled by the same internal audit and control unit as the one which functions in the Company itself. In the face of the above, the person managing the internal audit function in selected companies having significant importance for the Group reports directly to the Management Board Member responsible for financial matters in the Company, which is in line with the IIA (The Institute of Internal Auditors) standards.
●	Principle 3.9. stating that the supervisory board monitors the efficiency of the systems and functions referred to in principle 3.1 among others on the basis of reports provided periodically by the persons responsible for the functions and the company’s management board, and makes annual assessment of the efficiency of such systems and functions according to principle 2.11.3. Where the company has an audit committee, the audit committee monitors the efficiency of the systems and functions referred to in principle 3.1, which however does not release the supervisory board from the annual assessment of the efficiency of such systems and functions. The Supervisory Board of the Company operates according to the Anglo-Saxon model, i.e., in addition to carrying out its duties under the Polish law, members of the Board (excluding independent members and members of the Audit Committee) simultaneously perform the role of Non-executive Directors. The Board has a wide range of competencies and a high degree of authority set in the Company's corporate documents, which in practice means that the Board is very close to the decision-making process and is well positioned to effectively monitor and evaluate the internal control, risk management and compliance systems, as well as the internal audit function. The Supervisory Board, and the Supervisory Board’s Audit Committee in particular, monitors and assesses the effectiveness of functioning of the internal processes of operational and financial risk management, including the process of drafting of financial statements, on the basis of the documents and reports presented by the Management Board and by the person responsible for internal audit as well as on the basis of other information obtained in the course of the Supervisory Board’s on-going activities. Risk assessment and mapping is conducted at both management and supervisory boards levels. Risks specific to each business area are identified, monitored, mitigated/managed at the level of: (a) the members of the Management Board responsible for the business area concerned based on internal processes and procedures, (b) the relevant committees (e.g. CAPEX), and if necessary (c) the members of the Management Board with the involvement of individual members of the Supervisory Board. In addition, the Supervisory Board as a whole reviews risks on a regular basis, focusing on key challenges.
●	Principle 3.10. stating that companies participating in the WIG20, mWIG40 or sWIG80 index have the internal audit function reviewed at least once every five years by an independent auditor appointed with the participation of the audit committee. The Supervisory Board, the Audit Committee specifically, monitors and assesses the efficiency of internal processes, which includes on-going monitoring of the efficiency of the internal audit function.
●	Principle 4.1. stating that companies should enable their shareholders to participate in a general meeting by means of electronic communication (e-meeting) if justified by the expectations of shareholders notified to the company, provided that the company is in a position to provide the technical infrastructure necessary for such general meeting to proceed. Neither Polish, nor foreign shareholders have so far notified the Company of the interest in or the need for organizing the general meetings in such a form. The Management Board, in turn, considers assuring efficient course of debates of general meetings as well as correctness of adoption of resolutions by general meetings a priority. The adopted practice of holding general meetings is intended to reduce the risk of occurrence of any organizational and technical problems during the meetings, potentially causing disruption of the efficient course of the general meetings, as well as the legal risks, especially the ones which could potentially result in the resolutions adopted by a general meeting being questioned due possible transmission delays, technical faults, both on the Company’s end as well as in the locations of the shareholders who participate remotely in the meetings.
●	Principle 4.9.1. stating that candidates for members of the supervisory board should be nominated with a notice necessary for shareholders present at the general meeting to make an informed decision and in any case no later than three days before the general meeting; the names of candidates and all related documents should be immediately published on the company’s website. The Company encourages its shareholders to propose their candidates at the times indicated in the principle 4.9.1, including by publishing the relevant information in the notices to convene the general meetings. However, due to the fact that the Company’s internal regulations do not provide for any other mode of appointing the supervisory board members than stipulated by the generally valid legal regulations, especially in terms of restricting the time during which the candidates for supervisory board members may be proposed, while the to-date practice of proposing of candidates for supervisory board members differed from the requirements of the principle 4.9.1, hence the Company may not assure that the principle will be applied in the future.

9.2. Internal control systems and risk management applied with respect to the process of preparing financial statements

The Management Board is responsible for internal control system in Polsat Plus Group and its effectiveness in the process of preparing financial statements and interim reports prepared and published in accordance with the provisions of the Ordinance of the Minister of Finance of March 29, 2018 regarding current and periodic information to be submitted by issuers of securities, and the conditions for recognizing equivalence of information required under non-member states regulations.

We draw on our employees' extensive experience in the identification, documentation, recording and controlling of economic operations, including numerous control procedures supported by modern information technologies used for recording, processing and presentation of operational and financial data.

In order to ensure the accuracy and reliability of the accounts of the parent and subsidiary companies, we apply accounting policies for Polsat Plus Group and various internal procedures relating to transaction control systems and processes resulting from the activities of the Company and the Group.

We keep our accounts in IT systems integrated with the underlying source systems and auxiliary books. We ensure data security through the use of access rights aligned with the needs and requirements of granted to authorized users. Systems operations are assured by the specialists with extended experience in this field. In addition, the system security is ensured by applying the appropriate solutions for physical security of the equipment. We have a complete IT system documentation in all its areas. In accordance with Article 10 of the Accounting Act of September 29, 1994, the accounting information systems documentation is periodically reviewed and updated upon approval by heads of units.

An important element of risk management, in relation to the financial reporting process, is ongoing internal control exercised by the Finance and Controlling Department. The Internal Audit Department conducts an independent verification of functioning of the internal control system and, as such, complements its efficient operation.

The Internal Audit functions on the basis of the Audit Charter adopted by the Management Board and the Audit Committee of the Supervisory Board. Its primary task is to test and evaluate controls for the reliability and consistency of financial data underlying the preparation of financial statements and management information.

The Controlling department functions on the basis of financial controlling system and business controlling system, and exercises control over both the current processes and the implementation of financial and operating plans, and preparation of financial statements and reports.

An important element of quality control and data review is the use of a management reporting system on a standalone and consolidated basis, as well as regular monthly analyses by the Management Board of financial and operational performance, and other key indicators. The monthly results analysis is carried out in relation to both the current financial and operating plan and the prior period results.

The budgetary control system is based on monthly and annual financial and operating plans and long-term business projections. Achieved financial and operating results are monitored regularly in relation to the financial and operating plans. During the year, we perform additional reviews of the financial and operating plans for the year if the need arises. The financial and operating plans are adopted by the Management Board and presented to the Supervisory Board.

One of the basic elements of control in the process of preparation of financial statements of the Company and the Group is the verification carried out by independent auditors. An auditor is chosen from a group of reputable firms, which guarantee a high standard of service and independence. The Supervisory Board of the Company chooses the Company’s auditor. In the subsidiaries, the auditor is chosen by either the supervisory board, the general meeting or the meeting of shareholders. The tasks of the independent auditor include, in particular: a review of semi-annual standalone and consolidated financial statements and audit of annual standalone and consolidated financial statements. The auditor's independence is fundamental to ensure the accuracy of the audit.

The Audit Committee, appointed within the Company's Supervisory Board, supervises the financial reporting process in the Company. The Audit Committee oversees the financial reporting process, in order to ensure sustainability, transparency and integrity of financial information. As at the date of publication of this Report, two out of three Members of the Audit Committee meet the requirements listed in article 129 item 3 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight (as amended).

Moreover, under article 4a of the Accounting Act of September 29, 1994, the duties of the Supervisory Board include ensuring that the financial statements and the report on activities meet the requirements of the law. The Supervisory Board carries out this duty using its competences under applicable law and the Articles of Association of the Company. This is yet another level of control exercised by an independent body to ensure the accuracy and reliability of the information presented in the standalone and consolidated financial statements.

9.3. Shareholding structure of Cyfrowy Polsat

9.3.1. Shareholders with qualifying holdings of shares of Cyfrowy Polsat

The table below presents shareholders of Cyfrowy Polsat S.A. holding at least 5% of votes at the General Meeting of the Company as at the date of publication of this Report, i.e. April 11, 2024.

Shareholder	Number of shares	% of shares	Number of votes	% of votes
Zygmunt Solorz, through:	396,802,022	62.04%	576,219,523	70.36%
TiVi Foundation, including through:	386,745,257	60.47%	566,162,758	69.13%
Reddev Investments Limited, including through:	386,745,247	60.47%	566,162,738	69.13%
Cyfrowy Polsat S.A.(1)	88,842,485	13.89%	88,842,485	10.85%
Tobias Solorz(2), including through:	10,056,765	1.57%	10,056,765	1.23%
ToBe Investments Group Limited	4,449,156	0.70%	4,449,156	0.54%
Others	242,743,994	37.96%	242,743,994	29.64%
Total	639,546,016	100%	818,963,517	100%

(1)	Own shares acquired under the buy-back program announced on November 16, 2021. Pursuant to Art. 364 Item 2 of the Commercial Companies Code, the Company does not exercise voting rights attached to own shares.
(2)	Person under the presumption of the existence of an agreement referred to in Art. 87 Section 1 Item 5 of the Act on Public Offering and Conditions Governing the Introduction of Financial Instruments to Organized Trading and Public Companies.

Changes in the structure of qualifying holdings of shares in the Company since the publication of the previous interim report

From the date of publication of the previous interim report, i.e. November 8, 2023 (report for the third quarter of 2023), until the date of publication of this Report, i.e. April 11, 2024, the Company received a notification concerning changes in the structure of ownership of significant blocks of Cyfrowy Polsat shares from Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A.

On January 5, 2024, the Company was informed that as a result of the disposal of the Company's shares in a transaction effected on the WSE on December 28, 2023, the funds managed by Nationale-Nederlanden Powszechne Towarzystwo Emerytalne S.A. decreased their total ownership of the Company's shares below 5% of votes at the Company's general meeting.

9.3.2. Securities with special controlling rights

Current shareholders do not have any rights in the General Meeting of the Company other than those resulting from holding the Company’s shares. As at December 31, 2023 the shares of the A through D series are preferred shares as to voting rights in the way that:

●	Series A shares totaling 2,500,000 have preferential voting rights entitling their holder to two votes per share;
●	Series B shares totaling 2,500,000 have preferential voting rights entitling their holder to two votes per share;
●	Series C shares totaling 7,500,000 have preferential voting rights entitling their holder to two votes per share;
●	Series D shares totaling 166,917,501 numbered 1-166,917,501 have preferential voting rights entitling their holder to two votes per share.

To the Company's best knowledge, as of the date of this Report, Reddev Investments Limited held 179,417,491 voting preferred shares and TiVi Foundation held 10 voting preferred shares.

8,082,499 D Series shares, numbered 166,917,502 - 175,000,000; 75,000,000 E Series shares; 5,825,000 F Series shares, 80,027,836 H Series shares, 47,260,690 I Series shares and 243,932,490 J Series shares are ordinary bearer shares.

Pursuant to Article 19 of the Company's Articles of Association, the Chairperson of the Supervisory Board shall be appointed and dismissed by TiVi Foundation with its registered office in Vaduz, Liechtenstein as a personal right vested in that shareholder. The remaining members of the Supervisory Board shall be appointed and dismissed by the General Shareholders Meeting.

Pursuant to Article 14 of the Company's Articles of Association, the President of the Management Board is appointed and dismissed by TiVi Foundation with its registered office in Vaduz, Liechtenstein, as a personal right of this shareholder. The other members of the Management Board are appointed and dismissed by the Supervisory Board of the Company.

9.3.3. Shares of Cyfrowy Polsat held by Management Board and Supervisory Board Members

To the Company’s best knowledge, Members of the Management Board of Cyfrowy Polsat did not hold any shares in the Company, directly or indirectly, as at the date of publication of this statement, i.e. April 11, 2024, nor as at the date of publication of the previous report, i.e., November 8, 2023 (report for the third quarter of 2023).

The table below presents the number of shares in Cyfrowy Polsat which, according to the Company’s best knowledge, were held, directly or indirectly, by Members of the Company’s Supervisory Board as at the date of publication of this statement, i.e. April 11, 2024, along with changes in holdings from the date of publication of the previous report, i.e. November 8, 2023 (report for the third quarter of 2023).

Name and surname / Function	Holding as at November 8, 2023	Acquisitions	Disposals	Holding as at April 11, 2024
Mr. Zygmunt Solorz(1) Chairman of the Supervisory Board	396,802,022	-	-	396,802,022
Mr. Tobias Solorz(2) Vice-Chairman of the Supervisory Board	10,056,765	-	-	10,056,765
Mr. Józef Birka(3) Member of the Supervisory Board	79,268	-	-	79,268
Mr. Tomasz Szeląg(4) Member of the Supervisory Board	75,000	25,000	-	100,000

(1)	Mr. Zygmunt Solorz holds the Company’s shares through the following companies: TiVi Foundation (the parent of Reddev Investments Limited, which in turn is the parent of Cyfrowy Polsat S.A.). Within the block of shares held by Mr. Zygmunt Solorz, 10,056,765 shares held indirectly and directly by Mr. Tobias Solorz were disclosed.
(2)	Person under the presumption of the existence of an agreement referred to in Art. 87 Section 1 Item 5 of the the Act on Public Offering and Conditions Governing the Introduction of Financial Instruments to Organized Trading and Public Companies. Mr. Tobias Solorz holds shares directly and indirectly through ToBe Investments Group Limited.
(3)	The disclosed shares were acquired by Ms. Ewa Birka, a person closely related to Mr. Józef Birka, a person discharging managerial responsibilities within the meaning of Article 19 of the Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse.
(4)	Mr. Tomasz Szeląg holds the Company’s shares indirectly, through Pigreto Ltd.

To the Company’s best knowledge the remaining Members of the Supervisory Board did not hold any shares of the Company, directly and indirectly, as at the date of publication of this Report, i.e. April 11, 2024, nor at the date of publication of the previous report, i.e. November 8, 2023 (report for the third quarter of 2023).

Changes in the ownership of the Company's shares by Management Board and Supervisory Board Members since the publication of the previous interim report

On February 2, 2024, the Company received a notification issued pursuant to Article 19 (1) of the MAR Regulation from Pigreto Limited, a person closely related to Tomasz Szeląg, notifying of a transaction whereby Pigreto Limited acquired 25,000 shares in the Company.

9.3.4. Limitations related to shares

As at the date of publication of this Report, i.e. on April 11, 2024, the Company held 88,842,485 ordinary treasury shares constituting 13.89% of the share capital of the Company and entitling to 88,842,485 votes at the General Meeting of the Company, representing 10.85% of the total number of votes at the General Meeting of the Company. The above mentioned shares were purchased under the own shares buyback program announced on November 16, 2021. Pursuant to Art. 364 Section 2 of the Code of Commercial Companies the Company does not exercise voting rights attached to the held treasury shares.

Except for the mentioned above limitations and the limitations regarding securities ownership rights transfer resulting from the general provisions of the law there are no other limitations, in particular contractual limitations, regarding our securities ownership rights transfer.

9.3.5. Information on material agreements, which can result in a change in the proportion of shares held by hitherto shareholders in the future

As at the date of publication of this Report, i.e. April 11, 2024, the Company did not have any information on agreements which can result in a change in the proportion of shares held by current shareholders in the future.

9.4. Rules of amending the Articles of Association of the Company

An amendment to the Articles of Association of the Company requires a resolution of the General Shareholders’ Meeting and a registry in the Court register. The general provisions of law, the Articles of Association and the Bylaws of the General Shareholders’ Meeting govern the procedure for adopting resolutions regarding amendments to the Articles of Association.

Pursuant to the provisions of the Articles of Association and taking into account the provisions of art. 417 § 4 of the Commercial Companies Code, an amendment to the Articles of Association may take place without a share buyback.

9.5. General Shareholders’ Meeting

The General Shareholders’ Meeting acts pursuant to the provisions of the Commercial Companies’ Code, the Articles of Association, and the Bylaws of General Shareholders’ Meeting adopted by Resolution 6 of the Extraordinary Shareholders’ Meeting dated December 4, 2007 and amended by Resolution 29 of the Extraordinary Shareholders’ Meeting dated April 23, 2009.

The General Shareholders’ Meeting adopts resolutions regarding, in particular, the following issues:

a)	review and approval of the Management Board’s Report and the report of the Supervisory Board as well as the financial statements of the Company for the preceding accounting year and the consolidated financial statements,
b)	decisions on the distribution of profits or on the manner of covering the losses,
c)	acknowledgement of the fulfilment of duties by the Supervisory Board Members and Management Board Members,
d)	establishment of the remuneration of Supervisory Board Members, subject to the provision of Article 18 sec. 3 c) of the Articles of Association, i.e., determining the amount of remuneration of Supervisory Board Members delegated to perform temporarily the tasks of a Management Board Member,
e)	amendment of the Articles of Association,
f)	modification of the scope of the Company’s operations,
g)	increase or decrease of the share capital,
h)	merger, division or transformation of the Company,
i)	dissolution and liquidation of the Company,
j)	Issuance of convertible bonds or senior bonds as well as issuance of subscription warrants,
k)	sale or lease of the enterprise, its organized part or property components constituting a significant part of the enterprise as well as establishment of limited rights in rem in the aforementioned scope,
l)	consent to any acquisition and sale of real property, perpetual usufruct right or interest in real property, as well as consent to establishing a limited right in rem on real property, perpetual usufruct right or interest in real property with a value exceeding the 0.2% ratio of the Company’s standalone EBITDA for the preceding financial year as stipulated in Article 1 sec. 3.19 of the Articles of Association,
m)	any and all issues connected with claims for remedying a loss caused upon the formation of the Company or in the course of its management or supervision.

As of January 1, 2025, the General Shareholders Meeting shall not be entitled to grant consent to the Company to incur any liability whatsoever if incurring it may result in the debt ratio, expressed as the ratio of the Group’s net debt to EBITDA, exceeding a threshold of 2.0x.

The General Meeting shall be attended by persons who are shareholders of the Company sixteen days prior to the date of the General Meeting (the day of registration for participation in the General Meeting). The date of registration for participation in the General Meeting is consistent for bearer shares and preferred shares holders. Pledgees and usufructuaries who are entitled to vote, have the right to participate in the General Meeting if establishment of a limited right on their behalf is registered on a securities account on the day of registration for participation in the General Meeting.

A shareholder, being a natural person, is entitled to participation in the General Shareholders’ Meeting and execution of voting rights in person, or through a proxy. A shareholder, being a legal entity, is entitled to participation in the General Shareholders’ Meeting and execution of voting rights through a person authorized to make representations of intent on its behalf, or through a proxy.

The power of attorney to attend the General Meeting and exercise voting rights requires a written or electronic form. The shareholder must notify the Company about electronically granting the power of attorney by providing information specifying the Shareholder and the Shareholder's proxy, including the name and surname or company (the name) and address (seat), and indicating the number of shares and votes, of which the proxy is authorized to exercise to the address: akcjonariusze@cyfrowypolsat.pl.

The General Meeting should be attended by Members of the Management Board and Supervisory Board - in the composition which allows for substantive answers to the questions posed during the General Meeting.

The General Meeting shall be opened by the Chairperson or, in his/her absence, the Deputy Chairperson of the Supervisory Board (if appointed). In their absence, the General Meeting shall be opened by the President of the Management Board or a person nominated by the President. Next, the General Meeting shall appoint the Chairperson of the Meeting from among persons authorised to participate in the General Meeting.

Each participant in the General Meeting is entitled to be elected the Chairman of the General Meeting, and also nominate one person as candidate to the position of Chairman of the General Meeting. Decisions shall not be made until Chairman of the General Meeting is elected.

The Chairman of the General Meeting directs proceedings in accordance with the agreed agenda, provisions of law, the Articles of Association and the Bylaws, and in particular: gives the floor to speakers, orders voting and announces the results thereof. The Chairman ensures efficient proceedings and respecting of the rights and interests of all Shareholders. The Chairman may decide on procedural matters.

After the drawing up and signing of the attendance list the Chairman determines that the Shareholders’ Meeting has been convened in a proper manner and is authorized to adopt resolutions; presents the agenda and orders the selection of the Ballot Committee.

The General Meeting may pass a motion regarding nonfeasance of voting over an item on the agenda, and also on adjourning the order of issues on the agenda. However, removing an item from the agenda, or its adjourning upon the request of shareholders, requires prior consent of all the shareholders present who have forwarded such a motion, supported by a majority of votes of the General Meeting. Motions regarding the aforementioned issues shall be justified in detail.

The Chairman, after opening an item on the agenda, may give the floor in order of application to speakers. In the event of a significant number of applications the Chairman may set a time limit or limit the number of speakers. The floor may be taken regarding items on the agenda and currently under discussion only. The Chairman may give the floor outside of the order of application to the Members of the Management Board or Supervisory Board, and also to the Company experts called by them.

The Meeting may not adopt resolutions regarding items that are not on the agenda unless all the share capital is represented in the General Meeting and none of the present in the Meeting raises any objections as to the adoption of a resolution.

Voting shall proceed in a manner adopted by the General Meeting using a computerized system of casting and counting votes, ensuring that votes are cast in the number corresponding to the number of shares held and - in case of a secret ballot - allowing to eliminate the possibility of detecting the manner of voting by individual shareholders.

Subject to mandatory provisions of law, the General Meeting shall be valid, if attended by shareholders representing jointly more than 50% of the total number of votes in the Company. The resolutions of the General Meeting shall be adopted by an absolute majority of votes cast, unless the provisions of the Commercial Companies’ Code or the provisions of Company’s Articles of Association provide for a greater majority.

The Chairman of the General Meeting closes the General Meeting upon exhausting its agenda.

9.6. Management Board of the Company

9.6.1. Rules regarding appointment and dismissal of the management

Pursuant to article 14 of the Articles of Association of the Company the Management Board consist of one or more members, including the President of the Management Board. The President of the Management Board is appointed and dismissed by TiVi Foundation with its registered office in Vaduz, Liechtenstein as a personal right vested in that shareholder. The remaining Management Board Members are appointed and dismissed by the Supervisory Board. The number of Management Board Members in any given term of office is determined by the Supervisory Board. The term of office of the Management Board is joint and lasts three years.

The Management Board of the Company shall consist in their majority of persons holding Polish citizenship. Prior to their appointment, the Company’s Management Board Members are required to submit a written statement that they have familiarized themselves with the Company’s Articles of Association, the Bylaws of the Management Board, the Bylaws of the Supervisory Board, the Company’s Organizational Regulations, Work Regulations and Employee Remuneration Rules, and that they undertake to strictly observe and apply them.

9.6.2. Composition of the Management Board

The following table sets forth the composition of the Company's Management Board as of December 31, 2023 and the responsibilities of its members. The composition of the Management Board remained unchanged in 2023.

Name and surname	Function	Tenure (in years)	Expiry of term	Responsibilities
Mirosław Błaszczyk	President of the Management Board	5	2025	sales and marketing strategy, HR, administration
Maciej Stec	Vice-President of the Management Board	10	2025	strategy and business development
Jacek Felczykowski	Member of the Management Board	5	2025	technology and network
Aneta Jaskólska	Member of the Management Board	14	2025	legal and corporate governance, customer relations, security and safety, including cybersecurity
Agnieszka Odorowicz	Member of the Management Board	8	2025	film production
Katarzyna Ostap-Tomann	Member of the Management Board	8	2025	finance, investor relations, internal audit and ESG

Biographies of the Company's Management Board Members are available on the Company's website at: https://grupapolsatplus.pl/en/corporate-governance/management-board/members.

9.6.3. Competences and Bylaws of the Management Board

In accordance with the Company’s Articles of Association, the Management Board conducts the business of the Company and represents it in external relations.

The following are entitled to submit statements on our behalf:

●	in the case of one person Management Board – the President of the Management Board acting together with a commercial proxy, and
●	in the case of a more numerous Management Board – the President of the Management Board, a Management Board Member, and the commercial proxy acting jointly.

The Management Board operates under legal regulations in force, the Company’s Articles of Association, the Bylaws of the Management Board, the Bylaws of the Supervisory Board, the Company’s Organizational Regulations, Work Regulations, and Employee Remuneration Rules as well as under the resolutions of the General Meeting of Shareholders.

The Management Board performs its obligations collectively whereas each of its members manages specific areas of the Company's operations within the division of tasks, in accordance with the descriptions above.

All issues related to our management, not restricted by the provisions of the law or the Articles of Association to the competence of the Supervisory Board or the General Meeting, are within the scope of competence of the Management Board.

Decisions regarding an issue or buyback of the Company’s shares are within the competence of the General Shareholders’ Meeting. The competences of the Board in respect to the above are limited to the execution of any resolutions adopted by the General Shareholders’ Meeting.

In accordance with the provisions of Art. 13 of the Company’s Articles of Association, as of January 1, 2025, the Company’s Management Board is obliged to manage the business of the Group in such a way that the debt ratio, calculated as the quotient of the Group’s net financial debt and EBITDA, never exceeds 2.0x. In the period until December 31, 2024, the Company’s Management Board shall be obligated to manage the business of the Group in such a way that a debt ratio not exceeding 2.0x is achieved by December 31, 2024 at the latest. The value of the Group’s debt ratio as at December 31, 2024 shall ensue upon the Company’s Management Board and the Company’s Supervisory Board approving the consolidated financial statements for the accounting year ended on December 31, 2024.

Members of the Management Board may attend the sessions of the Supervisory Board. Furthermore, Members of the Management Board may participate in the sessions of any General Meeting. They provide substantive answers to questions asked during the General Meeting in accordance with the binding laws.

The Management Board conducts the Company’s business on the basis of adopted resolutions.

The resolutions of the Management Board are adopted during Management Board’s meetings. In extraordinary cases, the resolutions of the Management Board may be adopted without holding a meeting either in writing or using means of distance communication. Management Board resolutions adopted at a Management Board meeting are passed by an absolute majority of votes. If the votes are distributed equally, the President of the Management Board has a casting vote. Management Board resolutions may only be adopted, if all Management Board Members have been duly notified of a Management Board meeting and if the meeting is attended by more than half of the Management Board Members.

Management Board resolutions may be adopted in writing or using means of distance communication, if the draft of the resolution has been effectively served to all Management Board Members and the Chairperson of the Supervisory Board, if all Management Board Members take part in the vote, and if an absolute majority of Management Board Members consent to the resolution. Immediately after a resolution is adopted, the President of the Management Board is obliged to deliver it to the Chairperson of the Supervisory Board in the adopted wording together with information on the result of the vote.

Management Board meetings may be attended by the Chairperson of the Supervisory Board and a Supervisory Board Member or Supervisory Board Members appointed by the Chairperson of the Supervisory Board in writing. The President of the Management Board is obliged to notify the Chairperson of the Supervisory Board in writing of the date and agenda of Management Board meetings. The aforementioned notification shall be served at least 72 hours prior to the appointed time of the meeting. In extraordinary cases, said notification may be served within a shorter time-limit upon the written consent of the Chairperson of the Supervisory Board. Management Board meetings may also be attended by the Company’s commercial proxy. The Company’s Management Board notifies the commercial proxy of the date and agenda of the meeting.

The Company’s Management Board is obliged to maintain the continuity of the commercial power of attorney; in particular, if the commercial power of attorney expires for any reason whatsoever, the Company’s Management Board shall be obliged to appoint another commercial proxy immediately. Granting a commercial power of attorney requires the consent of all Management Board Members, subject to the stipulation that it shall only be permitted to grant a commercial power of attorney obliging the commercial proxy to perform transactions jointly with the President of the Management Board and a Management Board Member. A commercial power of attorney may only be granted by the Company’s Management Board to candidates approved by the Supervisory Board. A commercial power of attorney can be revoked by any Management Board Member.

9.6.4. Remuneration of the Members of the Management Board

Rules for remuneration of Members of the Management Board are regulated by the Remuneration Policy for the Management Board and Supervisory Board Members. Information on the remuneration of Board Members in 2023 is included in the consolidated financial statements (Note 48) and the standalone financial statements (Note 43) for 2023.

9.6.5. Contracts with Members of the Management Board setting out severance packages payout

The Company has concluded managerial contracts with the following Members of the Management Board: Aneta Jaskólska, Agnieszka Odorowicz and Katarzyna Ostap-Tomann. These contracts do not provide for the payment of severance packages as a result of the resignation of the mentioned above Members of the Management Board or their dismissal from the position without a material cause, or in the case when their resignation or dismissal results from a merger by acquisition of the Company.

9.7. Supervisory Board of the Company

9.7.1. Rules regarding appointment and dismissal of the Supervisory Board

In accordance with Art. 19 of the Company’s Articles of Association, the Supervisory Board consists of five to nine members, including the Chairperson of the Supervisory Board. A Supervisory Board Member may be appointed Deputy Chairperson of the Supervisory Board by resolution of the General Shareholders Meeting. The Chairperson of the Supervisory Board is appointed and dismissed by TiVi Foundation with its registered office in Vaduz, Liechtenstein as a personal right vested in that shareholder. The remaining Members of the Supervisory Board are appointed and dismissed by the General Shareholders Meeting.

The Supervisory Board is appointed for a joint five-year term of office. The number of Supervisory Board Members in any given term of office shall be determined by the General Shareholders Meeting.

The Supervisory Board of the Company shall consist in their majority of persons holding Polish citizenship. Prior to their appointment, the Company’s Supervisory Board Members are required to submit a written statement that they have familiarized themselves with the Company’s Articles of Association, the Bylaws of the Management Board, the Bylaws of the Supervisory Board, the Company’s Organizational Regulations, Work Regulations, and Employee Remuneration Rules, and that they undertake to strictly observe and apply them.

The Supervisory Board consists of two Members meeting the criteria of an independent Member of the Supervisory Board as set out in article 129 item 3 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight which fulfills the principle 2.3. of the Best Practices 2021. A Supervisory Board Member is required to submit a statement to the Management and Supervisory Boards of the Company on his or her compliance with the independence criteria.

9.7.2. Composition of the Supervisory Board

The following table presents the composition of the Company's Supervisory Board as of December 31, 2023.

Name and surname	Function	First appointment	Appointment for current term	Expiry of term
Zygmunt Solorz	Chairman of the Supervisory Board	2008	2021	2026
Tobias Solorz	Vice-Chairman of the Supervisory Board	2021	2021	2026
Piotr Żak	Vice-Chairman of the Supervisory Board	2018	2021	2026
Józef Birka	Member of the Supervisory Board	2015	2021	2026
Jarosław Grzesiak	Member of the Supervisory Board	2021	2021	2026
Marek Grzybowski	Independent(1) Member of the Supervisory Board Chairman of the Audit Committee	2020	2021	2026
Alojzy Nowak	Independent(1) Member of the Supervisory Board Member of the Audit Committee	2021	2021	2026
Tomasz Szeląg	Member of the Supervisory Board Chairman of the Remuneration Committee Member of the Audit Committee	2016	2021	2026

(1)	conforms with the independence criteria listed article 129 item 3 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight and in principle 2.3. of the Best Practices 2021.

On May 31, 2023, Mr. Marek Kapuściński resigned from membership in the Supervisory Board of the Company, effective immediately.

On June 29, 2023 the Annual General Meeting of the Company resolved to entrust Mr. Tobias Solorz and Mr. Piotr Żak with the functions of Vice-Chairmen of the Supervisory Board of the Company.

Biographies of the Company's Supervisory Board Members are available on the Company's website at: https://grupapolsatplus.pl/en/corporate-governance/supervisory-board/members.

9.7.3. Competences and Bylaws of the Supervisory Board

The Supervisory Board acts pursuant to the Commercial Companies Code and also pursuant to the Articles of Association of the Company and the Bylaws of the Supervisory Board.

Pursuant to the Articles of Association of the Company, the Supervisory Board performs ongoing supervision of the Company’s operations in all its fields. In order to exercise supervision in the scope and under the terms stipulated in the Articles of Association, the Supervisory Board is entitled to review any documents of the Company, request reports and explanations from the Management Board, and review the status of the Company’s assets. The Supervisory Board performs its obligations collectively but may also delegate its members to perform specific supervisory activities independently. The Supervisory Board is entitled to establish committees in circumstances provided for under applicable law. The Supervisory Board is also be entitled to appoint other committees and determine the scope and terms of their operation.

The Chairperson of the Supervisory Board is authorized to perform individually supervisory tasks with regard to the manner of performing obligations by the Management Board stipulated under Article 13 sec. 1.3 of the Articles of Association as well as to the activity of the Management Board with respect to agreements, revenue, costs, and expenses.

The competences of the Supervisory Board include matters restricted by the Commercial Companies Code and provisions of the Company’s Articles of Association, in particular:

a)	reviewing the annual financial statements of the Company and the consolidated financial statements with respect to their consistency with both the books and documents and the facts; reviewing the annual Management Board Report on the Company’s operations and the assessment of the Management Board’s work, reviewing the Management Board’s motions with respect to distributing profits or covering losses, and submitting a written report on the results of the aforementioned reviews to the Annual Shareholders Meeting,
b)	drafting a report on the activities of the Supervisory Board, the assessment of the Company’s standing, the assessment of the manner of performing the information obligations by the Company, the assessment of the rationality of the policy pursued by the Company, including but not limited to the price policy, and the assessment of the internal control system and the system for managing significant risks for the Company, in each case in accordance with the terms of corporate governance adopted by the Company, and presenting them to the Annual Shareholders Meeting,
c)	delegating Supervisory Board Members to perform temporarily the tasks of a Management Board Member who has been revoked, has resigned or is unable to perform his/her duties for other reasons, for a period not longer than three months,
d)	determining the remuneration of Management Board Members,
e)	appointing a statutory auditor to audit the financial statements of the Company,
f)	granting consent to the payment of an advance towards the predicted dividend to the shareholders,
g)	approving the terms, plans and prices of acquisition or sale of goods and services by the Company in the scope stipulated under the Bylaws of the Management Board or a resolution of the Supervisory Board.

Moreover, the competences of the Supervisory Board include:

a)	reviewing and issuing opinions on issues that shall constitute the object of the resolutions of the General Shareholders Meeting,
b)	approving quarterly, annual, and multi-year plans for the Company’s operations drafted by the Management Board and monitoring their performance on an ongoing basis,
c)	determining the amount of remuneration of Supervisory Board Members delegated to perform temporarily the tasks of a Management Board Member,
d)	granting consent to the appointment and dismissal of supervisory board members of the following companies: Telewizja Polsat sp. z o.o. with its registered office in Warsaw, Polkomtel sp. z o.o. with its registered office in Warsaw, Netia S.A. with its registered office in Warsaw, and every company from the Group if that company’s EBITDA in the preceding 12 months exceeded 5% of the Group’s consolidated EBITDA, excluding supervisory board members of the above mentioned companies who are appointed and dismissed on the basis of personal rights granted to a partner or a shareholder of these companies,
e)	granting consent to the performance by the Company of any legal transaction that does or can result in the disposal in favor of or liability on any account towards a single entity in the value exceeding 0.2% of the Company’s standalone EBITDA in the previous accounting year,
f)	approving the selection of bidders in the procurement proceedings held by the Company and approving bids submitted by the Company in procurement proceedings,
g)	granting consent to any acquisition and sale of real property, perpetual usufruct right or interest in real property, as well as to establishing a limited right in rem on real property, perpetual usufruct right or interest in real property with a value up to the 0.2% ratio of the Company’s standalone EBITDA for the preceding accounting year,
h)	granting consent to hiring for the positions of director, deputy director, expert or consultant, irrespective of the basis for such employment, including in particular on the basis of employment relationship and other legal relationships. Modification and termination of the aforementioned employment shall also require the consent of the Supervisory Board.
i)	approving the Work Regulations and Employee Remuneration Rules,
j)	granting consent to the application for, modification or waiver of any license or permit stipulated under Article 6 sec. 2 of the Articles of Association, as well as to transferring or granting access to them to third parties,
k)	granting consent to the conclusion of any agreement on consultancy services by the Management Board,
l)	granting consent to the issue of bonds by the Company other than bonds convertible to shares or senior bonds,
m)	granting consent to any acquisition, sale, assumption or encumbrance of shares and stock in companies as well as any participation titles in entities and organizations other than companies,
n)	approving plans for merging or dividing the Company before they are passed and any plans for the reorganization of the Company.

In accordance with Article 18(4) of the Company's Articles of Association, as from January 1, 2025, the Company’s Supervisory Board shall not be entitled to grant consent to the Company to incur any liability whatsoever if incurring it may result in the debt ratio, expressed as the ratio of the Group’s net debt to EBITDA, exceeding a threshold of 2.0x.

The detailed terms of activity and operation of the Supervisory Board, including but not limited to the terms of operation of its respective committees, are determined in the Supervisory Board Regulations approved by the General Shareholders Meeting. Any amendment to the Supervisory Board Regulations shall require a resolution of the General Shareholders Meeting.

Supervisory Board meetings are convened by the Chairperson of the Supervisory Board. In the absence of the Chairperson, a Supervisory Board meeting shall be convened by the Deputy Chairperson of the Supervisory Board (if appointed) or, if no Deputy Chairperson has been appointed, the meeting is convened by a Supervisory Board Member so nominated in writing by the Chairperson. Supervisory Board meetings are convened ex officio upon the motion of the Management Board or at least two Supervisory Board Members. Supervisory Board meetings are chaired by the Chairperson of the Supervisory Board or, in the Chairperson’s absence, by the Deputy Chairperson (if appointed) or, if no Deputy Chairperson has been appointed, by a Supervisory Board member nominated by the Chairperson. Apart from Supervisory Board Members, Supervisory Board meetings may be attended by Management Board Members, the commercial proxy, and invited guests. The person chairing a Supervisory Board meeting is entitled to order persons other than Supervisory Board Members to leave the room where the meeting is held.

Supervisory Board resolutions shall be by two-thirds of cast votes. All Supervisory Board Members must be invited to a Supervisory Board meeting and more than 50% of Supervisory Board Members must attend the meeting for the Supervisory Board resolutions to be binding. Supervisory Board Members shall be entitled to participate in adopting Supervisory Board resolutions by casting their vote in writing through the agency of another Supervisory Board Member. Casting a vote in writing shall not apply to issues added to the agenda at the meeting of the Supervisory Board.

The resolutions of the Company’s Supervisory Board may be adopted without holding a meeting either in writing or using means of distant communication. Resolutions adopted in writing or using means of distant communication as well as electronically are passed, if the draft resolution has been effectively served to all Supervisory Board Members, if all Supervisory Board Members take part in the vote, and if at least two-thirds of Supervisory Board Members vote for the resolution. Resolutions may also be adopted electronically. An electronic vote shall be ordered by the Chairperson of the Supervisory Board. In the absence of the Chairperson, an electronic vote shall be ordered by the Deputy Chairperson of the Supervisory Board (if appointed) or, if no Deputy Chairperson has been appointed, by a Supervisory Board Member nominated by the Chairperson.

In 2023, the Supervisory Board’s resolutions were adopted at the meeting and in accordance with Article 21 item 4 of the Company’s Articles of Association and Article 5 item 4 of the Bylaws of the Supervisory Board, i.e., in writing or using means of direct remote communication. The table below presents the attendance of the Supervisory Board Members in the votes held in 2023.

Name of Supervisory Board Member	Attendance
Zygmunt Solorz	100%
Marek Kapuściński	100%
Józef Birka	100%
Jarosław Grzesiak	100%
Marek Grzybowski	100%
Alojzy Nowak	100%
Tobias Solorz	100%
Tomasz Szeląg	100%
Piotr Żak	99.96%

9.7.4. Committees of the Supervisory Board

Pursuant to the Bylaws of the Supervisory Board, the Supervisory Board may appoint permanent committees, in particular an Audit Committee, a Remuneration Committee, or a Strategic Committee, as well as ad hoc committees to investigate certain issues remaining in the competence of the Supervisory Board or acting as advisory and opinion bodies of the Supervisory Board.

The functioning of the Audit Committee is regulated by the Bylaws of the Audit Committee. The provisions of the Bylaws of the Supervisory Board apply to meetings, resolutions, and minutes of remaining committees of the Supervisory Board.

The aforesaid committees may be appointed by the Supervisory Board from among its Members by means of a resolution. The committee appoints, by means of a resolution, the Chairman of the particular committee from among its Members. The mandate of a Member of a particular committee expires upon expiry of the mandate of the Member of the Supervisory Board. The Supervisory Board may, by means of a resolution, resolve to dismiss a Member from the composition of a particular committee before the expiry of the mandate of the Member of the Supervisory Board. Dismissal from membership in a committee is not tantamount to dismissal from the Supervisory Board.

The first meeting of a committee is convened by the Chairman of the Supervisory Board or another Member of the Supervisory Board indicated by him or her. Meetings of the committees are convened as the need arises, ensuring thorough delivery of duties assigned to a particular committee. Minutes of committee's meetings and adopted resolutions are made available to the Members of the Supervisory Board that are not Members of the committee. The Chairman of a given committee chairs its proceedings. The Chairman also performs supervision over the preparation of the agenda, distribution of documents, and preparation of minutes of the meetings of the committee.

Pursuant to article 128 item 1 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight, the Company has an Audit Committee and, in addition, a Remuneration Committee.

As at December 31, 2023, the Audit Committee comprised the following Members of the Supervisory Board while the composition of the Audit Committee remained unchanged in 2023:

Name and surname	Function
Marek Grzybowski	Chairman of the Audit Committee, Independent Member of the Supervisory Board
Alojzy Nowak	Independent Member of the Supervisory Board
Tomasz Szeląg	Member of the Supervisory Board

The composition of the Audit Committee meets the requirements listed in article 128 item 1 and article 129 item 3 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight.

In 2023, the Audit Committee held 4 remote meetings at which resolutions were adopted using means of direct remote communication. The table below presents the attendance of the Audit Committee Members at meetings held in 2023.

Name of Audit Committee Member	Attendance
Marek Grzybowski	100%
Alojzy Nowak(1)	100%
Tomasz Szeląg	100%

In addition, the Company has a Remuneration Committee, which as of December 31, 2023 included Mr. Tomasz Szeląg, who served as the Chairman of the Remuneration Committee. In the period from January 1, 2023 to May 31, 2023, the Committee also included Mr. Marek Kapuscinski. On May 31, 2023, Mr. Marek Kapuściński resigned from membership in the Supervisory Board of the Company, effective immediately.

Audit Committee

In accordance with the Bylaws of the Audit Committee, the Committee consists of at least three Members, appointed for the term of office of the Supervisory Board. The Chairman of the Committee is appointed by the Company’s Supervisory Board. Most Members of the Committee, including its Chairman, are independent from the Company that is they meet the independence criteria set out in Article 129 item 2 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight.

Among the Members of the Audit Committee, the statutory independence criteria are met by Mr. Marek Grzybowski and Mr. Alojzy Nowak.

The independence of the indicated Members of the Supervisory Board has been verified by the Supervisory Board on the basis of statements submitted by them confirming that they meet the independence criteria set forth in Article 129 item 2 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight and, moreover, based on information gathered by the Company and sourced in the Company concerning the relations of the persons in question with the Company and other companies from Polsat Plus Group, in particular the capital structure and the composition of governing bodies of Polsat Plus Group and legal relations between the persons in question and the Company and the companies from Polsat Plus Group.

Members of the Audit Committee: Mr. Marek Grzybowski, Mr. Alojzy Nowak and Mr. Tomasz Szeląg, possess knowledge and skills in accounting and/or auditing financial statements which were obtained during studies, scientific career and/or extensive professional practice.

Furthermore, Mr. Tomasz Szeląg possesses knowledge and skills with regard to the sectors in which the Group operates, gained during many years of professional career on key managerial positions within Polsat Plus Group, among others, as Member of the Management Board responsible for finance in Cyfrowy Polsat.

Regulations of the Audit Committee apply to the meetings, resolutions and minutes of meetings of the Audit Committee.

Meetings of the Audit Committee are convened by the Chairman of the Audit Committee or a Member of the Audit Committee authorized by the Chairman and are held at least once a quarter, at dates determined by the Chairman of the Audit Committee. Additional meetings of the Audit Committee may be convened by the Chairman of the Audit Committee at the request of a Member of the Audit Committee, Chairman of the Supervisory Board or another Supervisory Board Member, as well as at the request of the Management Board.

The Audit Committee passes resolutions, if at least half of its Members are present at the meeting and all Members were properly invited. Resolutions are passed by an absolute majority of votes and in the case of an equal number of votes, the Chairman of the Audit Committee shall have a casting vote. Members of the Audit Committee may participate in the Committee’s meetings and vote in person, or by means of distant communication.

The work of the Audit Committee is managed by its Chairman who is responsible for preparing an agenda of each meeting or may appoint a Secretary of the Audit Committee whose tasks include in particular the preparation of an agenda of each meeting and organization of the distribution of documents for the Committee’s meetings. A notification of the meeting, including its agenda together with all required materials, must be delivered to the Members of the Audit Committee at least 7 days before the meeting and in extraordinary circumstances a Committee’s meeting may be convened at a shorter notice than the above mentioned deadline.

The Chairman of the Audit Committee may ask a relevant Management Board Member to prepare appropriate materials.

Minutes are taken of every meeting of the Audit Committee and are then signed by all Members who participated in a given meeting. Minutes of the Audit Committee meetings, including conclusions, instructions, opinions and recommendations are presented to the Supervisory Board at its next meeting as well as to the Management Board.

Members of the Supervisory Board who are not part of the Audit Committee may, at their own initiative, participate in the Committee’s meeting, however without a voting right. The Chairman of the Audit Committee may invite Members of the Supervisory Board, auditors, employees of the Company and other persons as experts.

The tasks of the Audit Committee include in particular monitoring of the financial reporting process, efficiency of internal control systems and risk management systems as well as internal audit and performing financial revision activities, in particular carrying out audits by an audit company.

Pursuant to the Audit Charter, the Internal Audit Director meets directly the Audit Committee. In addition, at the request of the Audit Committee he or she joins its sessions and presents additional/supplementary information.

The Audit Committee evaluates, controls and monitors independence of a certified auditor and audit company, in particular in the case when the audit company provides the Company with services other than auditing of financial documents in the Company. The Audit Committee grants consent to provision of such services by the audit company. The Audit Committee notifies the Company’s Supervisory Board about the results of audit and the role of the Committee in the auditing process as well as explains how this audit contributed to the reliability of financial reporting in the Company.

The tasks of the Audit Committee also include developing a policy of selection of an audit company to carry out the audit as well as developing a policy of provision by the selected audit company, its affiliated entities and members of the audit company’s network of permitted services which are not part of the audit.

Main assumptions underlying the selection of an auditor in Cyfrowy Polsat

●	In accordance with the Company’s Articles of Association, the Company’s Supervisory Board is the body selecting the auditing company (in the Company’s Articles of Association referred to as the chartered accountant) for carrying out the statutory audit, while the General Meeting of the Company is the body approving the Company’s financial statement.
●	The first contract with the auditing company for carrying out the statutory audit of financial statements is concluded by the Company for the period of 2 years, extendable for successive two- or three-year periods, with the reservation that the total period of the statutory audit may not exceed ten years and the key auditor may not conduct the statutory audit for more than five years. Termination of the contract with the auditing company is possible, if justified grounds to do so emerge.
●	The Audit Committee develops the policy for the selection of the auditing company and determines the procedure of selection of the auditor for performing the statutory audit. The auditor selection procedure is determined at the Audit Committee’s discretion. The Audit Committee may instruct the Company's Management Board or employees of the Company selected by it to carry out the selection procedure.
●	If an auditor for statutory audit is selected, the selection procedure must meet the following criteria:

		the auditor on its own, or as part of a chain of companies operating on the territory of the European Union, has not conducted statutory audits for the Company for a period of at least past 10 consecutive years, or of if such a company did conduct a statutory audit for the Company for a continuous period of 10 consecutive years in the past, then a period of at least 4 years has already elapsed since the last of such audits,
		the organization of the tender process does not exclude from the selection process companies which have obtained less than 15% of their total remuneration on account of auditing public interest units in the Republic of Poland during the past calendar year, which are found on the list of auditors published on the website of the Audit Oversight Committee (Komisja Nadzoru Audytowego) (a sub-page of www.mf.gov.pl).
		in the event that the selection of the auditing company is carried out during the year covered by the audit in question, neither the auditor, nor any member of the chain, of which the auditor is a member, has provided, either directly or indirectly to the Company or to its subsidiaries, any prohibited services, as defined by article 136 of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Oversight, during the current financial year, as well as any services related to the development and implementation of internal control procedures or risk management procedures associated with the development or control of financial information, or the development and implementation of any technological systems concerning financial information during the preceding year.

Major assumptions of the policy of provision to Cyfrowy Polsat of permitted services which are not audit services by the selected auditor, its related companies or members of the chain of which the auditor is a member

●	The Company shall not conclude, with the auditor, its related companies or the members of the chain of which the auditor is a member, any agreements for the provision of prohibited services, as defined in Article 5, section 1, paragraph 2 of the Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC.
●	Prior to contracting any work, being permitted services and not being an audit, the Audit Committee performs an assessment of the threats and safeguards related impartiality, mentioned in Articles 69-73 of the Act on Statutory Auditors, Audit Firms and Public Oversight. The Audit Committee also oversees compliance of the performed work with the valid law.
●	Permitted services include:

		services involving due diligence procedures related to the Company’s economic-and-financial standing;
		issuing comfort letters in connection with prospectuses issued by the audited entity, carried out in accordance with the national standard for related services and consisting of performance of agreed procedures;
		assurance services related to pro forma financial information, forecasts of results or estimated results which are included in the audited unit’s prospectus;
		audit of historical financial information to be included in the prospectus which is mentioned in the Commission Regulation (EC) No 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements;
		verification of consolidation packages;
		confirmation of fulfillment of the terms of facility agreements concluded by the Company based on the financial information coming from the financial statements examined by a given auditor;
		assurance services in the scope related to reporting on corporate governance, risk management and corporate social responsibility;
		services involving assessment of the compliance of the disclosures made by financial institutions and investment firms with the requirements related to disclosure of information concerning capital adequacy and variable components of remuneration;
		assurance concerning financial statements or other financial information intended for the supervisory authority, the supervisory board or any other supervising body of the company, or the owners whose scope exceeds the scope of the statutory audit and which are intended to assist these authorities in the fulfillment of their statutory duties.

The Audit Committee provides the Supervisory Board with a recommendation regarding the selection of audit company.

In the financial year 2018 the Audit Committee recommended to the Supervisory Board to appoint Ernst & Young Audyt Polska Spółka z ograniczoną odpowiedzialnością Sp. k., with its registered office in Warsaw, to audit the financial statements of the Company and the consolidated financial statements of the Company’s capital group for the years 2018 and 2019. The recommendation fulfilled the criteria set in the adopted policy of selection of an audit company and followed the selection procedure organized by the Company which met the binding criteria. The recommendation was accepted by the Supervisory Board.

Additionally, the Audit Committee presents recommendations to the Company’s Management Board aimed at ensuring the reliability of financial reporting in the Company.

9.7.5. Agreements with the entity certified to perform an audit of the financial statements

On July 6, 2018, the Company entered into an agreement with Ernst & Young Audyt Polska Spółka z ograniczoną odpowiedzialnością Sp. k., with registered office in Warsaw, for the performance of the audit of standalone financial statements of Cyfrowy Polsat S.A. and the consolidated financial statements of the Company’s capital group for the financial years ended December 31, 2018 and December 31, 2019.

On February 26, 2020, the Company’s Supervisory Board consented to extend the agreement and choose Ernst & Young Audyt Polska Spółka z ograniczoną odpowiedzialnością Sp. k., with its registered office in Warsaw, for the performance of the audit of standalone financial statements of Cyfrowy Polsat S.A. and the consolidated financial statements of Polsat Plus Group for the financial years ended December 31, 2020, December 31, 2021 and December 31, 2022.

On July 10, 2023, the Company’s Supervisory Board consented to extend the agreement and choose Ernst & Young Audyt Polska Spółka z ograniczoną odpowiedzialnością Sp. k., with its registered office in Warsaw, for the performance of the audit of standalone financial statements of Cyfrowy Polsat S.A. and the consolidated financial statements of Cyfrowy Polsat Group for the financial years ended December 31, 2023 and December 31, 2024.

The following summary presents a list of services provided by the certified auditor and remuneration for the services in the twelve month period ended on December 31, 2023 and December 31, 2022.

[mPLN]	for the year ended December 31
[mPLN]	2023	2022
Review of interim financial statements	0.2	0.1
Audit of financial statements for the year and other services	0.7	0.4
Total	0.9	0.5

In the financial year 2023, Ernst & Young Audyt Polska Spółka z ograniczoną odpowiedzialnością Sp. k. provided the following permitted services other than audit services: (i) the review of financial statements, (ii) the execution of agreed procedures with regard to verification of the fulfillment of conditions of concluded credit agreements, based on the analysis of the financial information from the audited consolidated financial statements of Cyfrowy Polsat Group, (iii) the verification of the correctness of the application of Sustainability KPIs in the certificates of compliance reported in accordance with the requirements of the concluded loan agreements, and (iv) the audit of the reports on remuneration of the Members of the Management Board and the Supervisory Board of the Company, after being granted consent from the Audit Committee.

9.7.6. Remuneration of the Members of the Supervisory Board

Rules for remuneration of Members of the Supervisory Board are regulated by the Remuneration Policy for the Management Board and Supervisory Board Members. Information regarding remuneration of Members of the Supervisory Board in 2023 is included in the consolidated financial statements (Note 49) and in the standalone financial statements (Note 44) of the Company for 2023.

9.8. Diversity policy applicable to administrative, managing and supervising bodies of the Company

Polsat Plus Group adopted the Diversity and Human Rights Policy which has the purpose of supporting the pursuit of the Group’s business goals. The policy enables the Group to respond in a better way to the employees’ expectations, make full use of their potential and at the same time help the companies who are part of the Group to adjust to the changes occurring on the labor market. We trust that diversity is one of the sources of our competitive advantage, and competing views, opinions, work styles, skills and experience generate new quality and enable companies to achieve better business results.

The basic principles of Polsat Plus Group’s Diversity Policy include respect for human rights and prohibition of any discrimination due to gender, age, sexual orientation, competence, experience, potential degree of disability, nationality, ethnic and social origin, color of skin, language, parental status, religion, confession or lack of any confession, political views, or any other dimensions of diversity which are defined by valid law.

Within the empowerment of these principles, we have developed separate documents which protect diversity and indicate the basic ethical rules. These include, among others, the following policies: Human Resources Policy, Anti-Mobbing Policy, Code of Ethics, Work Regulations, Remuneration Regulations or working time register. The Diversity Policy is implemented, among others, by including diversity-related issues in HR processes and tools, such as organization of training and staff development sessions and recruitment. We expect our leaders to have skills that allow for managing diversified teams and benefit from their diversity in order to fully leverage the potential of employees that make up those teams. An Ethics Officer has been appointed in the Group whose tasks include, among others, the prevention of discrimination and mobbing.

The provisions of Polsat Plus Group’s Diversity Policy apply to all employees, including Management Board Members and Supervisory Board Members. While our aim is to promote gender equality among top managerial positions, our policy is above all to appoint persons with appropriate competences, professional experience and education to the Management and Supervisory Boards of the Company. The diagrams below present the gender and age structures of the Members of the Management and Supervisory Boards of Cyfrowy Polsat.

Structure of the Management Board and the Supervisory Board with respect to gender in 2023

As at December 31, 2023 three men and three women sat on Cyfrowy Polsat’s Management Board while the Supervisory Board included eight men.

Members of the Management Board and the Supervisory Board have education in fields such as management and marketing, law, economy, finance, or technical education as well as rich and diverse professional experience.

Mirosław Błaszczyk President of the Management Board		Maciej Stec Vice President of the Management Board

Jacek Felczykowski Member of the Management Board		Aneta Jaskólska Member of the Management Board

Agnieszka Odorowicz Member of the Management Board		Katarzyna Ostap-Tomann Member of the Management Board

Warsaw, April 10, 2024

Glossary of technical terms

Term	Definition
2G	Second-generation cellular telecommunications networks commercially launched on the GSM standard in Europe.
3G	Third-generation cellular telecommunications networks that allow simultaneous use of voice and data services.
4G	Fourth-generation cellular telecommunications networks.
5G	Fifth-generation cellular telecommunications networks.
ARPU per B2C/B2B customer	Average monthly revenue per B2C/B2B Customer generated in a given settlement period.
ARPU per prepaid RGU	Average monthly revenue per prepaid RGU generated in a given settlement period.
Base transceiver station	(or: relay station / base station / BTS / transmitter / nodeB / eNodeB) – a device equipped with an antenna transceiver which connects a mobile terminal (e.g., mobile phone or mobile router) with a transmission part of a telecommunications network. A base station uses a single technology (2G, 3G or LTE) on a separate carrier (a frequency block from a separate bandwidth). A base station shall not be mistaken with a site.
Catch-up TV	Services providing access to view selected programming content for a certain period after it was broadcast. Cyfrowy Polsat provides such services from 2011.
Churn	Termination of the contract with B2C Customer by means of the termination notice, collections or other activities resulting in the situation that after termination of the contract the Customer does not have any active service provided in the contract model. Churn rate presents the relation of the number of customers for whom the last service has been deactivated (by means of the termination notice as well as deactivation as a result of collection activities or other reasons) within the last 12 months to the annual average number of customers in this 12-month period.
Convergent (integrated) services	A package of two or more services from our pay TV, mobile telecommunications and broadband Internet access offering, provided under a single contract and for a single subscription fee.
Customer	Natural person, legal entity or an organizational unit without legal personality who has at least one active service provided in a contract model. A customer is identified by a unique ID number (PESEL, NIP or REGON).
DTH	Satellite pay TV services provided by us in Poland from 2001.
DTT	Digital Terrestrial Television.
DVB-T	Digital Video Broadcasting – Terrestrial technology.
DVB-T2	Digital Video Broadcasting – Terrestrial Second Generation.
ERP	A family of IT systems supporting enterprise management or shared operation of a group of collaborating enterprises through data collection and enabling transactions on the collected data (enterprise resource planning).
FTR	A wholesale charge for call termination in another operator's fixed-line telecommunications network (Fixed Termination Rate).
GRP	A rating point defined as the overall number of persons viewing a given advertising spot over a specific time, expressed as a percentage share of the target group. In Poland, one GRP equals 0.2 million residents in the primary target group for advertisers aged 16-49 (Gross Rating Point).
HSPA/HSPA+	Radio data transmission technology for wireless networks, increasing the capacity of the UMTS network (High Speed Packet Access/High Speed Packet Access Plus). It also covers the HSPA+ Dual Carrier technology (Evolved High Speed Packet Access Dual Carrier). It supports transmission speeds of up to 42 Mbps for download and up to 5.7 Mbps for upload.
IPTV	Technology enabling transfer of a television signal over IP broadband networks (Internet Protocol Television).
LTE	Long Term Evolution - a standard for high-speed, wireless data transmission also referred to as 4G. Based on a carrier bandwidth limited to a maximum of 20MHz it supports data transmission speed of up to 150 Mbps (downlink, using MIMO 2x2 antennas).
LTE Advanced	Subsequence standard for high-speed, wireless data transmission of the fourth generation (4G). Through carrier aggregation from different bandwidths (a total of up to 100 MHz) it allows to significantly increase maximum data transmission speed up to 3 Gbps (downlink, using MIMO 8x8 antennas).
MIMO	Multiple Input Multiple Output, a method for multiplying the capacity of a wireless network using multiple transmit and receive antennas.
MTR	A wholesale charge for call termination in another operator's mobile telecommunications network (Mobile Termination Rate).
MUX, Multiplex	A package of TV and radio channels and additional services, simultaneously transmitted digitally to the user over a single frequency channel.
ODU-IDU	Outdoor Unit Indoor Unit, a proprietary solution of Polsat Plus Group based on a set comprising an external LTE modem (ODU) and an indoor WiFi router (IDU), which increases effective coverage and improve the quality of the LTE signal.
OTT (Over-The-Top)	A method of delivering content or television over the Internet without the direct involvement of an Internet access provider (known as an open network).
PPV	Services providing paid access to selected TV content (pay-per-view).
real users	An estimated number of persons who visit a website or open an Internet application at least once in a given month (Real Users).
RGU (Revenue Generating Unit)	Single, active and generating retail revenue service of pay TV in all types of access technology, mobile and fixed-line Internet Access or mobile telephony provided in contract or prepaid model.
Site	(or: mast/tower/roof construction) – a single steel construction located in a separated geographical region which allows to install one or a number of base stations in order to provide radio signal to mobile terminals of end-users within that region.
Usage definition (90-day for prepaid RGU)	Number of reported RGUs of prepaid services of mobile telephony and Internet access refers to the number of SIM cards which received or answered calls, sent or received SMS/MMS or used data transmission services within the last 90 days. In the case of free of charge Internet access services provided by Aero 2, the Internet prepaid RGUs were calculated based on only those SIM cards, which used data transmission services under paid packages within the last 90 days.