Management of the Capital Group

The process of appointing the Supervisory Board is regulated in the Company’s Articles of Association and the Regulations of the Supervisory Board of Budimex SA. The President of the Management Board and, upon his or her request, the VicePresidents and the other members of the Management Board are appointed and dismissed by the Supervisory Board for a joint term of office of three years. The process of appointing the Supervisory Board is regulated in the Company’s Articles of Association and the Regulations of the Supervisory Board of Budimex SA. Members of the Supervisory Board of Budimex SA are appointed by the General Meeting for a joint term of office of 3 years. The Board elects from among its members a chairperson and, if necessary, vice-chairpersons and a secretary of the Board.

The Diversity Policy of the Supervisory Board of Budimex SA introduces a minimum level of representation of each gender in the selection process of 30 per cent of all candidates, if such persons are represented among the candidates to the Supervisory Board and their competences are at least equal to those of other candidates. When evaluating candidates for appointment to the Supervisory Board, the General Meeting undertakes to take into account only objective criteria, including diversity criteria, bearing in mind, however, that the primary task of the General Meeting is to ensure that the Board’s composition includes persons with the competencies, skills, knowledge and experience necessary to properly perform the supervisory function in a public company, including in the committees of the Supervisory Board.

The Diversity Policy of the Management Board of Budimex SA introduces a minimum level of representation of each gender in the recruitment process for positions in the Management Board of 30% of all people approaching the final stage of recruitment, if these people are represented in the pool of candidates applying for a given position, and their competences are at least equal to the competences of other candidates. When assessing candidates for appointment to the Management Board, the Supervisory Board undertakes to take into account only objective criteria, including diversity criteria, bearing in mind, however, that the primary task of the Supervisory Board is to ensure that the Management Board is composed of persons with the competences necessary to properly perform the functions of the management board in a public company. These criteria include skills, competences, knowledge, experience, independence and characteristics in line with the specificity of positions in the Management Board, taking into account the need to provide the Management Board with people with knowledge and experience in the broadly understood industry in which the Company operates, as well as in individual areas of company’s management, including finance and law, as well as experience in managing entities with a comparable scale of operations.

When appointing members of the Supervisory Board, the General Meeting takes into account in particular the need to ensure that the Board is composed of persons with knowledge and experience in the industry in which the Company operates, as well as in accounting or auditing.

The General Meeting attaches particular importance to ensuring at least the minimum required participation in the Supervisory Board of persons meeting the independence criteria set out in the Act on Statutory Auditors, Audit Firms, and Public Supervision and the regulations on corporate governance of listed companies.

The opinions of stakeholders are not taken into account in the nomination and election of members of management bodies, taking into account the rights of shareholders to propose candidates to the company’s Supervisory Board.

[GRI 2-9] [GRI 2-11]

On 14 December 2022, the Supervisory Board appointed the following persons to the Management Board of Budimex SA with effect from 1 January 2023:

In accordance with the company’s Articles of Association and the Regulations of the Management Board, the President of the Management Board is also the Company’s Chief Executive Officer and coordinates the work of the other members of the Management Board. Due to the combination of these two functions within one body, there is no potential conflict of interest.

In the course of 2022, the Ordinary General Meeting of Budimex SA appointed, on 19 May 2022, the Supervisory Board for a new eleventh term. As of the date of the Ordinary General Meeting of Budimex SA, Jose Carlos Garrido-Lestache Rodriguez ceased to serve as a member of the Supervisory Board, as a result of the expiry of the aforementioned person’s mandate as a member of the Board and in connection with the failure of the Ordinary General Meeting to appoint him to serve on the Supervisory Board for a new term. At the same time, on 19 May 2022, the Annual General Meeting appointed Mario Manuel Menendez Montoya to serve as a member of the Supervisory Board. Mario Mostoles Nieto resigned from his position on the Supervisory Board on 8 November 2022.

The Supervisory Board is composed of experienced managers, engineers and academics (in the fields of law, economics, banking, auditing), who poses a significant advantage for the Company due to the potential expansion of the powers of the Management Board and the possibility of obtaining information and guidance from the Supervisory Board in specialised areas. Full details of the educational backgrounds and career paths of the members of the Supervisory Board are published on the Company’s website: https://www.budimex.pl/pl/o-budimex/wladze.

During 2022, the composition of the Audit Committee did not change. In connection with the appointment of the Supervisory Board for a new eleventh term of office by the Ordinary General Meeting of Budimex SA on 19 May 2022, the Supervisory Board on the same date established the existing composition of the Audit Committee. As far as the independence of the members of the Audit criteria are met, the provisions of Article 129 (3) of the Act of 11 May 2017 on statutory auditors, audit firms and public supervision, as well as the criteria of independence of the members of the Board within the meaning of ‘Good Practices of Companies Quoted at the Warsaw Stock Exchange 2021’. The independence status of a member of the Supervisory Board is determined by the company in accordance with the criteria determined in Operating Instruction no. IO-01- 07-02 on obtaining information from Supervisory Board members and publishing them on the basis of declarations submitted by members of the Board and on the basis of Article 129 (3) of the Act of 11 May 2017 on statutory auditors, audit firms and public supervision.

During 2022, the composition of the Investment Committee did not change. In connection with the appointment of the Supervisory Board for a new eleventh term by the Ordinary General Meeting of Budimex SA on 19 May 2022, the Supervisory Board on the same date determined the composition of the Investment Committee as before.

During 2022, the composition of the Remuneration Committee changed. In connection with the appointment on 19 May 2022 by the Ordinary General Meeting of Budimex SA of the Supervisory Board for a new, eleventh term, the Supervisory Board on the same day established the composition of the Remuneration Committee as before, i.e. a composition of four members (Dariusz Blocher, Igor Chalupec, Marek Michałowski, Mario Mostoles Nieto). However, due to the resignation from the Supervisory Board submitted on 8 November 2022 by Mario Mostoles Nieto, he also ceased to hold a position within the Remuneration Committee.

The remuneration policy implemented at Budimex SA meets all requirements under the law to ensure the company’s development.

The company’s adopted remuneration practices assume that diversity is ensured in the working environment and that the best qualified employees can be attracted and retained by means of a tailored package including base salary, bonuses and attractive additional benefits.

Remuneration for the CEO and Management Board members is determined by the Supervisory Board, taking into account the recommendations of the Remuneration Committee (REMCO). This committee recommends a remuneration policy for Management Board members. The policy is described in the Remuneration Policy adopted by the General Meeting of Shareholders. Based on this policy, the REMCO recommends individual terms and conditions within the remuneration packages for each Management Board Member to the Supervisory Board. The REMCO has a supervisory role with regard to the remuneration determination process.The Company publishes a remuneration report on the remuneration of persons in management and supervisory roles on an annual basis. This report goes to the General Meeting of Shareholders, where shareholders can comment on the remuneration policy.

At Budimex SA, comprehensive supervision of the implementation of ESG activities has been assigned to the entity of the Purchasing, Quality and Environmental Protection Office. However, the supervision of the sustainability issues is being performed, among others, by members of the Management Board through their participation in CSR Committee meetings.

Responsibility for the implementation of activities in specific ESG areas has been assigned to divisions representing key areas at Budimex, according to their competences:

The assessment of the effectiveness of activities in overseeing the management of the organisation’s impact on sustainability issues in 2022 was made on the basis of a review of the indicators of the current CSR Strategy 2021–2023.

n 2022, no communications on sustainable development in the Budimex Group were submitted to the Supervisory Board.

In the due diligence processes in place at the Budimex Group, the Supervisory Board and Management Board perform a strategic and qualitative oversight function and monitor the effectiveness of the processes. In addition, the Management Board and the Supervisory Board are the final authority in the Group’s mechanisms for whistleblowing and dealing with irregularities. Issues related to the supervision of due diligence processes are the responsibility of the Director of the Legal and Organisational Division.

The Management Board is informed in regular communication about the results of conducted due diligence processes, including key risks, including nonfinancial risks, and cases of non-compliance with regulations and internal conduct guidelines.

n 2022, three CSR Committee meetings were carried out during which the Management Board and key managers were provided with information on all sustainability issues.

The Management Board comments on and makes recommendations for improvements to the due diligence processes during regular reviews that follow communication on ESG activities.

The Management Board of Budimex SA takes key decisions affecting the strategic directions of the Group in line with the principles of sustainable development. It is also the Management Board’s responsibility to approve strategic plans in this area.

In 2022, no violations of a critical nature were reported through Compliance communication channels.

In 2022, the Management Board of Budimex SA did not engage in direct dialogue with , while being promptly informed on matters of importance in this regard.

In 2022, work was carried out on the ESG strategy with regard to, inter alia, the governance pillar. As part of this work, the objectives and actions of the various parts of the strategy (ethics, conflict of interest management, cyber security, anti-corruption, internal audit, risk management system) were established, the areas in which the established actions are required, the scopes of these actions, the deadlines and the measures for evaluating their implementation were defined.

A communication framework for the strategy was also prepared. Compilation of the assumptions of a new code of ethics and a special procedure on conflict of interest was prepared, and training was held for all newly hired employees within the framework of the ‘Welcome to the Group’ programme and the ‘Selected elements of security management of Budimex SA’ training course for the Management Board of Budimex SA, the subject matter of which was, for example: employee abuse in the investment process, unfair competition in the construction industry, corruption, giving and accepting gifts, and issues concerning sponsorship, good anti-corruption practices (especially during the process of obtaining public orders), and the risk of collective entity liability. This training kicked off a series of training sessions that are to continue for individual employee groups.

Both the Supervisory Board and Management Board are successively expanding their knowledge, skills and experience in the field of ESG. Executives received relevant ESG training in 2022. The main training topics were:

The Diversity Policy has been in place at the Budimex Group since September 2016, and in November 2016 the organisation signed the Diversity Charter, thus joining the 150 companies in Poland that took part in the Responsible Business Forum initiative. In June 2021, the Group Policy in this area was updated. It defines the direction for the effective management of diversity in the Group. As one of the largest employers in Poland, Budimex Group is guided by the principles of respect for all people, their equal treatment, use of the employees’ potential and counteracting all forms of discrimination, believing that it brings measurable benefits and affects the development and innovation of the organisation, as well as the creation of a friendly social environment.

• active management of diversity within the existing HR management policy and creation of an open and diverse working environment,
• counteracting all forms of discrimination,
• ensuring equal opportunities in access to education and promotion,
• ensuring a fair and objective employee assessment,
• ensuring equal opportunities in access to information about ethical standards applicable in the Group,
• achieving the level of equal remuneration measured by the Gender Pay Gap indicator,
• maintaining the level of representation of women in the total number of the Budimex Group’s employees above the average level for the construction sector,
• maintaining the level of representation of women in senior management positions and among managers at the level at least equal to the level of representation of women in the total number of the Budimex Group’s employees,
• promoting diversity and education in cooperation with our stakeholders.

The Diversity Policy applies to the entire employment structure in the Group. Due to the significance of the influence of the top levels of the organisation on the rest of the staff resulting in observing the principles of diversity, on 21 Septembe2021,theManagement Board Diversity Policy was adopted in the Budimex Group. Its aim is to ensure the principles of equal treatment and diversity at the Group’s management level. This Policy sets out a trajectory of activities aimed at meeting best practices, includingBest Practice for Listed Companies 2021 in the scope of diversity. A Supervisory Board Diversity Policywas adopted in 2022.