Eurocash S A : Supervisory Board report for 2021

ANNUAL WRITTEN REPORT OF THE SUPERVISORY BOARD OF

EUROCASH SPÓŁKA AKCYJNA FOR 2021

To the General Meeting

of Eurocash Spółka Akcyjna (the "Company")

The report covers the fiscal year from January 1st, 2021 through December 31st, 2021.

In 2021 the following persons were the members of the Supervisory Board of the Company:

 Dr. Hans Joachim Körber	Chairman of the Supervisory Board
 Mr. Francisco José Valente Hipólito dos Santos	Member of the Supervisory Board
	Mr. Renato Arie	Member of the Supervisory Board
	Mr. Jorge Mora	Member of the Supervisory Board
	Mr. Przemysław Budkowski	Member of the Supervisory Board

Supervisory Board Committees

The following internal committees operate under the auspices of the Supervisory Board:

1. the Audit Committee,
2. the Remunerations Committee,
3. the Nomination Committee.

Responsibilities of the Audit Committee include as follows:

1. monitoring:
2. 1. the financial reporting process;
   2. the effectiveness of the Company's internal control and risk management systems and internal audit, including in the scope of the financial reporting process; and
   3. financial revision, in particular the audit including all motions and findings of the Audit Supervision Commission (Polish: Komisja Nadzoru Audytowego) arising from the control in the audit firm;
3. supervising the submission of financial information by the Company in the periodical reports, forecasts, etc,
4. supervising the activities of external auditors of the Company,
5. presenting the recommendations to appoint an audit firm to the Supervisory Board in compliance with the adopted policy and procedure of the appointment, where audit firm cannot render its services for longer than 5 years; controlling and monitoring of the independence of the statutory auditor and the audit firm, in particular if the audit firm provides the Company with other services than audit,
6. supervising the relationship with the statutory auditor, including in particular:
7. 1. assessing the statutory auditor's independence, remuneration and any nonauditing work for the Company,

1. granting consent to render by the statutory auditor additional permitted services, other than audit

(iii)determining the involvement of the external auditor in respect of the contents and publication of financial reporting,

1. informing the Supervisory Board on results of the of the audit and how the audit contributed to the integrity of financial reporting and on the role of the Audit Committee in the audit process;
2. each year evaluating internal control system functioning and the significant risk management system functioning as well as evaluating its own functioning in a form of an annual report of its deliberations, findings and relationship with the external auditor (including in particular his independence) to be included as a part of the Supervisory Board's annual report to be presented at the Ordinary General Assembly;
3. preparing procedures of appointment of the audit firm by the Company
4. preparing the policy of appointment of the audit firm for an audit of the Company's yearly separate and consolidated financial statements;
5. preparing policy for rendering by the audit firm performing audit, its affiliated entities and members of its network of the permitted services other that the audit
6. submit recommendations to ensure the integrity of financial reporting by the Company.

The Audit Committee was composed of the following members: Mr. Jorge Mora (Chairman of the Audit Committee), Mr. Francisco José Valente Hipólito dos Santos (Member of the Audit Committee) and Mr. Przemysław Budkowski (Member of the Audit Committee).

Responsibilities of the Remunerations Committee include as follows:

1. reporting to the Supervisory Board of the existence of a remuneration policy for the Management Board, which is known to the Remunerations Committee in sufficient detail, including (a) the remuneration structure, (b) the amount of fixed remuneration,
   (c) the shares and/or options and/or other variable remuneration components and other forms of remuneration, as well as the performance criteria and the application thereof by Management Board Members,
2. each year, submitting a proposal for the Supervisory Board's approval for an appraisal concerning the compliance of the remuneration policy for the Management Board and application thereof with regard to the desired standards of corporate governance,
3. ensuring the disclosure to the Supervisory Board of the remuneration of the Management Board resulting from an implementation of the remuneration policy,
4. each year, submitting a self-assessment in the form of an annual report of its performance to be included as part of the Supervisory Board's annual report and to be presented at the Ordinary General Meeting of Shareholders.

The Remuneration Committee was composed of the following members: Mr. Renato Arie (Chairman of the Remuneration Committee), Mr. Francisco José Valente Hipólito dos Santos (Member of the Remuneration Committee) and Mr. Przemysław Budkowski (Member of the Remuneration Committee).

The responsibilities of the Nomination Committee shall include:

1. to identify and recommend (for the Supervisory Board's approval) the candidates for the Supervisory Board members appointed by the General Assembly in connection with

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existing or expected vacancy in the Supervisory Board (including the end of the Supervisory Board's term)

1. to opine on candidates for Supervisory Board members elected by the General Assembly proposed by the shareholders of the Company,
2. to identify and recommend candidates for the Management Board members appointed by the Supervisory Board, in connection with existing or expected vacancy in the Management Board (including the Management Board member's or President's end of the term);
3. each year evaluating its own functioning in a form an annual report of its activities to be included as a part of the Supervisory Board's annual report to be presented at the Ordinary General Assembly.

The Nomination Committee is composed of the following members: Dr. Hans Joachim Körber (Chairman of the Nomination Committee), Mr. Renato Arie (Member of the Nomination Committee) and Pan Jorge Mora (Member of the Nomination Committee).

1. Information on the Supervisory Board's activities.
   The Supervisory Board fulfilled its duties according to the Commercial Companies Code and the Company's Statute. In particular, the Supervisory Board was involved in the internal control and risk management systems of the Company, analyzed the Company's results and monitored the performance of the Management Board. Supervisory Board was involved in the process of taking the important decisions of the Company like, e.g., decisions related to agendas of the general meetings or approval of Company's budget for the year 2022.
   Pursuant to § 13.12 of the Company's Statute, in 2021 the Supervisory Board held 8 meetings: on following dates: March 10, March 31, April 27, May 12, July 01, August 25, November 22 - 23 and December 16.
2. Supervisory Board opinion on the Company's financial statements for 2021, including the financial statement for 2021, the Management Board's report on the Company's business activity in 2021

2.1 Opinion on the financial statement.

Pursuant to Art. 382 § 3 of the Commercial Companies Code, the Supervisory Board of the Company conducted the analysis of the separate financial statement of the Company for 2021, including the separate statement of the financial position as at December 31st, 2021, showing the total assets in the amount of PLN 6 670 551 766 (six billion six hundred seventy million five hundred fifty one thousand seven hundred and sixty six), the separate income statement for the period from January 1st, 2021, to December 31st, 2021, showing profit for the period in the amount of PLN 137 013 492 (one hundred thirty seven million thirteen thousand four hundred ninety two) and total comprehensive profit for the period in amount of PLN 168 312 853 (one hundred sixty eight million three hundred twelve thousand eight hundred fifty three), separate statement on changes in equity in the period from January 1st, 2021 to December 31st, 2021, representing the balance as at 31st December 2021 of 1 301 747 006 (one billion three hundred one million seven hundred forty seven thousand six) and the separate statement of cash flows for the period from January 1st, 2021, to December 31st, 2021, indicating an decrease of

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net cash in the amount of PLN 1 347 221 (one million three hundred and forty-seven thousand two hundred and twenty one).

The Supervisory Board is of the opinion that the submitted separate financial statement for 2021, including the statement of the financial position, the income statement, the statement of changes in equity and the statement of cash flows, truly and properly represent the result of the Company's business activity for the above fiscal year, as well as the property and financial standing of the Company as of December 31st, 2021.

According to the above, the Supervisory Board decided to recommend to the General Meeting the approval of the Company's separate financial statement for 2021.

2.2 Opinion on the Management Board's report on the Company's business activity in 2021.The financial statement of the Company is accompanied by a written Management Board's report on the Company's business activity in 2021.

The Supervisory Board is of the opinion that the presented report of the Management Board is true and comprehensive. After the analysis of the Management Board report, the Supervisory Board decided to recommend to the General Meeting approval of the Management Board report and acknowledged the fulfilment of duties by the members of the Management Board.

3. Supervisory Board opinion on the Company's Capital Group consolidated report for 2021, including the consolidated financial statement for 2021 and the Management Board's report on the Company's Capital Group business activity in 2021.

3.1 Opinion on the consolidated financial statement.

The Supervisory Board of the Company conducted the analysis of the consolidated financial statement of the Company's Capital Group for 2021, including the consolidated statement of the financial position as at December 31st, 2021, showing the total assets in the amount of PLN 8 487 298 751 (eight billion four hundred eighty seven million two hundred ninety eight thousand seven hundred fifty one), the consolidated income statement for the period from January 1st, 2021, to December 31st, 2021, showing the loss for the period in the amount of PLN 99 342 435 (ninety nine million three hundred and forty two thousand four hundred and thirty five) and total comprehensive loss for the period in the amount of PLN 66 993 000 (sixty six million nine hundred and ninety three thousand), consolidated statement of changes in equity in the period from January 1st, 2021 to December 31st, 2021, representing balance as at December 31st, 2021 thereof of PLN 786 596 177 (seven hundred eighty six million five hundred ninety six thousand one hundred seventy seven) and the consolidated statement of cash flows for the period from January 1st, 2021, to December 31st, 2021, indicating an increase of net cash in the amount of PLN 3 098 902 (three million ninety eight thousand nine hundred and two).

The Supervisory Board is of the opinion that the submitted consolidated financial statement for 2021, including the consolidated statement of the financial position, the consolidated income statement, the consolidated statement of changes in equity and the consolidated statement of cash flows, truly and properly represent the result of the

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Company's Capital Group business activity for the above fiscal year, as well as the property and financial standing of the Company's Capital Group as of December 31st, 2021.

According to the above, the Supervisory Board decided to recommend to the General Meeting the approval of the Company's Capital Group consolidated financial statement for 2021.

3.2 Opinion on the Management Board's report on the Company's Capital Group business activity in 2021.

The consolidated financial statement of the Company's Capital Group is accompanied by a written Management Board's report on the Company's Capital Group business activity in 2021.

The Supervisory Board is of the opinion that the presented report of the Management Board is true and comprehensive. After the analysis of the Management Board report, the Supervisory Board decided to recommend to the General Meeting approval of the Management Board report and acknowledged the fulfilment of duties by the members of the Management Board.

4. Report on Audit Committee's activities.

The Audit Committee has its responsibilities defined in § 10 of the "By-laws of the Supervisory Board". One of such responsibilities is to issue an annual report on its activities. In 2021 the Audit Committee held 4 meetings on March 10, March 31, August 25 and November 22.

During the meeting held on March 10, 2021, the Audit Committee discussed recommendation to the Supervisory Board of the positive assessment of the annual financial statement of the Company and of the Company's Capital Group for 2020. In the meeting participated the Company's auditors.

During the conference call held on August 25, 2021, the Audit Committee discussed recommendation to the Supervisory Board of the positive assessment of the half-yearly financial statement of the Company and of the Company's Capital Group. In the conference call participated the Company's auditors.

The Audit Committee also maintained ongoing contacts with the Company's auditor and the internal Audit Department in order to monitor the effectiveness of internal control systems and risk management systems as well as the functioning of internal audit, including financial reporting, the assessment of which is included in item 7 of the Report below.

Final remarks: The Audit Committee is of the opinion that it performed its responsibilities in 2021, and that the auditors, not having other commercial relations with the Company, can perform their duties in an independent manner.

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