ON THE ROAD TO SUSTAINABILITY

ACTIVITIES CARRIED OUT

1

In 2023, the Board of Directors decided to start systematic activities related to the issue of sustainability. It was decided to select a professional consulting firm to support the company on the road to transformation.

2

To date, the following activities have been carried out:
* Review offers to select a professional advisor,
* Selection of a consultant to implement the initial activities: PwC Advisory Sp. z o.o. Sp. k. (PwC has experienced ESG specialists and supports organizations in maturity analysis, ESG strategy development, as well as in the area of sustainability reporting).

3

As a result of the implementation of the signed contract, the work was carried out:
* high-level analysis of the Company’s current level of ESG maturity to obtain preliminary information on the Company’s ESG area:
– to learn about the prospects for POLON-ALFA S.A.’s development in the coming years,
– Learning about the company’s main motivations related to the ESG area (requirements of customers, investors, etc.),
– verify where sustainability currently stands in the organization and what mechanisms are in place to manage this area,
– Defining a timeframe for ESG activities,
* Preliminary identification of gaps in the ESG area,
* Workshop for key POLON-ALFA S.A. staff. (16 people) on sustainable development (ESG), aimed at:
– Increased awareness and systematization of knowledge in the area of sustainable development for management and key employees of POLON-ALFA S.A.,
– Discussing methodologies for strategy building, goal setting and KPIs in the context of current socio-environmental challenges,
– An overview of market best practices and solutions for ESG implementation.

4

In December 2023, another contract was signed with a professional consultant to conduct an analysis of the current state regarding the ESG area at POLON-ALFA S.A. A full summary of the Company’s current ESG status was performed, identifying gaps, risks and opportunities, and an ESG action plan and proposal for next steps was created.

NEXT STEPS

1

The year 2024 will be a period of forming new functions in the organization and beginning preparations for performing dedicated activities, related to sustainability and collecting data required for future reporting.

2

Establishment of the POLON-ALFA S.A. ESG Committee.
The committee will have a consultative and advisory function to the Board of Directors, and will also oversee our ESG activities and provide a platform for internal dialogue on sustainability.
Scope of ESG committee activities:
* Participate in the preparation and implementation of the ESG strategy or equivalent document,
* Exercise oversight over the implementation of strategic goals and key ESG activities,
* Controlling and monitoring the implementation of implemented ESG policies and commitments,
* Fostering discussion and exchange of ideas on ESG, strengthening the commitment of employees and associates,
* Shaping the company’s organizational culture in accordance with the adopted ESG principles and policies.

3

Development of POLON-ALFA S.A.’s sustainable development strategy (ESG). (or equivalent document)
* Assess the materiality and ESG risks associated with POLON-ALFA S.A.’s operations;
* Defining the organization’s ambitions and capabilities and setting strategic ESG goals;
* Selection of KPIs (from Key Performance Indicators) – key performance indicators that determine the effectiveness of individual activities;
– Begin systematic implementation of strategy objectives
– Establishing an ESG reporting team – preparing the organization to start reporting.

4

2026 – the Company’s first ESG report, in accordance with applicable regulations and guidelines (for 2025)