This document is a free translation of the Polish original. Terminology current

in Anglo-Saxon countries has been used where practicable for the purposes

of this translation in order to aid understanding. The binding Polish original

should be referred to in matters of interpretation.

Independent Auditor's Report

To the General Shareholders’ Meeting and Supervisory Board
of Mostostal Warszawa S.A.

Report on the Audit of the Annual Separate Financial Statements

Opinion

We have audited the accompanying annual separate financial statements of Mostostal Warszawa S.A. (the “Entity”), which comprise:

•      the separate statement of financial position as at 31 December 2023;

and, for the period from 1 January to 31 December 2023:

•      the separate statement of profit or loss;

•      the separate statement of comprehensive income;

•      the separate statement of changes in equity;

•      the separate statement of cash flows;

and

•      additional information and explanations to the separate financial statements comprising a summary of significant accounting policies and other explanatory information

(the “financial statements”).

In our opinion, the accompanying financial statements of the Entity:

•      give a true and fair view of the financial position of the Entity as at 31 December 2023 and of its financial performance and its cash flows for the financial year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union (“IFRS EU”) and the adopted accounting policy;

•      comply, in all material respects, with regard to form and content, with applicable laws and the provisions of the Entity's articles of association;

•      have been prepared, in all material respects, on the basis of properly maintained accounting records in accordance with chapter 2 of the accounting act dated 29 September 1994 (the “Accounting Act”).

Our audit opinion on the financial statements is consistent with our report to the Audit Committee dated 18 April 2024.

Basis for Opinion

We conducted our audit in accordance with:

•      International Standards on Auditing as adopted by the National Council of Statutory Auditors and the Council of Polish Agency for Audit Oversight as National Standards on Auditing (the “NSA”); and

•      the act on statutory auditors, audit firms and public oversight dated 11 May 2017 (the “Act on statutory auditors”); and

•      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 (the “EU Regulation”); and

•      other applicable laws.

Our responsibilities under those standards and regulations are further described in the Auditor’s Responsibility for the Audit of the Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and Ethics

We are independent of the Entity in accordance with International Ethics Standards Board for Accountants International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”) as adopted by the resolution of the National Council of Statutory Auditors, together with the ethical requirements that are relevant to our audit of the financial statements in Poland and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. During our audit the key statutory auditor and the audit firm remained independent of the Entity in accordance with requirements of the Act on statutory auditors and the EU Regulation.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. They are the most significant assessed risks of material misstatements, including those due to fraud. Key audit matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon we have summarised our response to those risks. We do not provide a separate opinion on these matters. We have determined the following key audit matters:

Accounting for revenue from construction contracts

Revenue from construction contracts for 2023: PLN 1,341,600 thousand Trade receivables and other receivables as at 31 December 2023: PLN 287,538 thousand Contract Assets as at 31 December 2023: PLN 191,313 thousand Non-current and current contract liabilities as at 31 December 2023: PLN 75,300 thousand and PLN 135,009 thousand, respectively Current liabilities - Other accruals as at 31 December 2023: PLN 150,699 thousand Reference to the separate financial statements: note 4.3.1 Critical judgements in applying accounting policies, note 4.3.2 Significant accounting estimates, note 4.20.1 Revenue from contracts with customers, note 6.1 Long-term construction contracts, note 20 Trade receivables and other receivables (non-current and current) and note 30 Other accruals.

Key audit matter

Our response

The Entity derives most of its revenues from construction contracts that are accounted for by applying the percentage-of-completion method. The Entity determines the stage of completion of its contracts based on the proportion of contract costs incurred from the beginning of the contract to the reporting date in relation to the currently budgeted total contract costs. The application of the POC method of accounting involves the use of significant judgment and estimates by the Management Board, including estimates of the stage of completion, total contract revenues and total contract costs. Significant judgment is also required in assessing whether circumstances exist which indicate that total contract costs will exceed total contract revenues which would result in the expected loss being recognized as an expense immediately. In addition, changes in circumstances in the course of contract performance may result in cost overruns with resulting claims and disputes with customers and/or subcontractors. Claims may also arise from customer- or subcontractor- caused delays, poor quality of services provided, errors in documentations or design and disputed variations in contract work. As a result, the Entity’s operation is exposed to the risk of arising numerous legal claims both in relation to subcontractors and customers, including claims that are subject to legal proceedings. The assessment of risk related to claims, including those subject to legal proceedings, based on which the Company may account for the claim as revenue, recognize liability or disclose contingent liability, is associated with inherent significant uncertainty. Due to the above factors, as well as the magnitude of the amounts involved, we considered this to be our key audit matter.

Our audit procedures included, among others: Assessing the appropriateness of the selection of accounting policies based on the requirements of IFRS 15, our understanding of the business and industry practice; -       Testing internal controls over contract accounting, including controls over budgeting, recognition and allocation, and estimation of work completion, as well as controls over monitoring litigation and other contract-related claims; -       Assessing the quality of the contract budgeting prepared by the Entity by comparing the final outcomes of completed contracts during the year to those estimated in the prior year, and to original estimates for those contracts; -       For a sample of contracts in progress as of December 31, 2023, selected using both quantitative and qualitative criteria, inquiring of the project managers and the head of the controlling department about the performance and percentage of completion of those contracts, including estimated costs to completion, the recognition of variation orders, the adequacy of provisions for probable contract liabilities and their assessment of potential contractual penalties for behind-schedule contracts, -       Reconciliation, on a sample basis, of the amounts of costs incurred to the source documentation; -       Reconciliation, on a sample basis, of costs to be incurred included in the budget to source documentation; -       Assessing, for a selected sample of projects, of contracts progress by conducting site visits and accompanying inquiries of the relevant contract managers; -       Assisted by our own legal specialists, assessing the Entity’s assumptions and estimates in respect of claims recognized in contract revenue, contract assets and liabilities or contingent liabilities disclosed by: -       Inspecting relevant correspondence, contract documentation, documentation related to legal proceeding such as lawsuits, responses to lawsuits, legal and expert opinions of Entity’s experts, court verdicts,

-       Assessing responses received to our enquiries to the lawyers representing the Entity about the status of ongoing litigations, actual or potential claims and disputes and projected outcome of the claims; inquiries to the Entity’s Management Board and legal department; -       Evaluating the accuracy and the completeness of the Entity’s disclosures in respect of contract accounting, including those relating to revenue recognition as well as significant legal proceedings, and contingent liabilities.

Responsibility of the Management Board and Supervisory Board of the Entity for the Financial Statements

The Management Board of the Entity is responsible for the preparation, on the basis of properly maintained accounting records, of financial statements that give a true and fair view in accordance with IFRS EU, the adopted accounting policy, the applicable laws and the provisions of the Entity's articles of association and for such internal control as the Management Board of the Entity determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Management Board of the Entity is responsible for assessing the Entity's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management Board of the Entity either intends to liquidate the Entity or to cease operations, or has no realistic alternative but to do so.

According to the Accounting Act, the Management Board and members of the Supervisory Board of the Entity are required to ensure that the financial statements are in compliance with the requirements set forth in the Accounting Act. Members of the Supervisory Board of the Entity are responsible for overseeing the Entity’s financial reporting process.

Auditor’s Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with NSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The scope of audit does not include assurance on the future viability of the Entity or on the efficiency or effectiveness with which the Management Board of the Entity has conducted or will conduct the affairs of the Entity.

As part of an audit in accordance with NSAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

•      identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,

as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

•      obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity's internal control;

•      evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management Board of the Entity;

•      conclude on the appropriateness of the Management Board of the Entity’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report on the audit of the financial statements to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report on the audit of the financial statements. However, future events or conditions may cause the Entity to cease to continue as a going concern;

•      evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the Audit Committee of the Entity regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We provide the Audit Committee of the Entity with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the Audit Committee of the Entity, we determine those matters that were of most significance in the audit of the financial statements of the current reporting period and are therefore the key audit matters. We describe these matters in our auditors’ report on the audit of the financial statements unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Information

The other information comprises:

•      the letter of the President of the Management Board;

•      the Management report on activities of the Entity for the year ended 31 December 2023 (the “report on activities”), including the corporate governance statement, the Management Board’s information regarding the appointment of the audit firm and the statement of the Management Board regarding the preparation of the financial statements and report on activities, which are a separate part of the report on activities;

•      the separate report on non-financial information referred to in art. 49b paragraph 9 of the Accounting Act;

•      the statement of the Supervisory Board regarding the Audit Committee; and

•      the Supervisory Board’s assessment of the financial statements and the report on activities;

(together the “other information”).

Responsibility of the Management Board and Supervisory Board

The Management Board of the Entity is responsible for the other information in accordance with applicable laws.

The Management Board and members of the Supervisory Board of the Entity are required to ensure that the report on activities, including the corporate governance statement and the report on non-financial information referred to in art. 49b paragraph 9 of the Accounting Act are in compliance with the requirements set forth in the Accounting Act.

Auditor’s Responsibility

Our opinion on the financial statements does not cover the other information.

In connection with our audit of the financial statements, our responsibility was to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement in the other information, we are required to report that fact.

In accordance with the Act on statutory auditors our responsibility was to report if the report on activities was prepared in accordance with applicable laws and the information given in the report on activities is consistent with the financial statements.

Moreover, in accordance with the requirements of the Act on statutory auditors our responsibility was to report whether the Entity included in the statement on corporate governance the information required by the applicable laws and regulations, and in relation to specific information indicated in those laws or regulations, to determine whether it complies with the applicable laws and is consistent with the financial statements and to inform whether the Entity prepared a separate report on non-financial information.

The letter of the President of the Management Board, the report on activities of the Entity including the corporate governance statement, the Management Board’s information regarding the appointment of the audit firm and the statement of the Management Board regarding the preparation of the financial statements and report on activities as well as the report on non-financial information about the Mostostal Warszawa Group were made available for us before the date of this auditor’s report and the statement of the Supervisory Board regarding the Audit Committee and the Supervisory Board’s assessment of the separate financial statements and the report on activities of Mostostal Warszawa S.A. are expected to be made available for us after this date. If we conclude that there is a material misstatement therein, we are required to communicate this matter to the Supervisory Board of the Entity.

Opinion on the Report on Activities

Based on the work undertaken in the course of our audit of the financial statements, in our opinion, the accompanying report on activities, in all material respects:

•      has been prepared in accordance with applicable laws, and

•      is consistent with the financial statements.

Opinion on the Statement on Corporate Governance

In our opinion, the corporate governance statement, which is a separate part of the report on activities, includes the information required by paragraph 70 subparagraph 6 point 5 of the Decree of the Ministry of Finance dated 29 March 2018 on current and periodic information provided by issuers of securities and the conditions for recognition as equivalent of information required by the laws of a non-member state (the “decree”).

Furthermore, in our opinion, the information identified in paragraph 70 subparagraph 6 point 5 letter c-f, h and letter i of the decree, included in the corporate governance statement, in all material respects:

•      has been prepared in accordance with applicable laws; and

•      is consistent with the financial statements.

Information about the Statement on Non-financial Information

In accordance with the requirements of the Act on statutory auditors, we report that the Entity has prepared a separate report on non-financial information referred to in art. 49b paragraph 9 of the Accounting Act.

We have not performed any assurance procedures in relation to the separate report on non-financial information and, accordingly, we do not express any assurance conclusion thereon.

Statement on other Information

Furthermore, based on our knowledge about the Entity and its environment obtained in the audit of the financial statements, we have not identified material misstatements in the report on activities and the other information.

Report on Other Legal and Regulatory Requirements

Statement on Services Other than Audit of the Financial Statements

To the best of our knowledge and belief, we did not provide prohibited non-audit services referred to in Art. 5 paragraph 1 second subparagraph of the EU Regulation and Art. 136 of the act on statutory auditors.

Services other than audit of the financial statements, which were provided to the Entity in the audited period are listed in point III.11 of the report on activities.

Appointment of the Audit Firm

We have been appointed for the first time to audit the annual financial statements of the Entity by resolution of the Supervisory Board dated 5 May 2017 and reappointed in the following years, including the resolution dated 31 May 2023, to audit the annual financial statements for the year ended 31 December 2023. Our period of total uninterrupted engagement is 7 years, covering the periods ended 31 December 2017 to 31 December 2023.

On behalf of audit firm

KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k.

Registration No. 3546

Signed on the Polish original

Agnieszka Rosiak

Key Statutory Auditor

Registration No. 11326

Proxy

Warsaw, 25 April 2024