Ethics and combating corruption

The LOTOS Group operates in an ethical manner, observing standards in all areas of its activity. The Company has adopted a value system that has respect for the needs of society and the natural environment at its core.

Source: Company

The Ethics Program includes:

• Code of Ethics,
• Ethics Officer,
• code violation reporting channels,
• employee education,
• easy communication.

Those interested in contacting the Ethics Officer have such tools as:

• a face-to-face meeting at a time convenient to the employee, arranged in advance by telephone,
• phone call (phone number +48 58 308 89 20),
• sending an email to: → liniaetyki@grupaLOTOS.pl,
• completing a report form on the website: → www.lotos.pl,
• sending a letter with a report by regular mail.

The LOTOS Group operates in accordance with the Code of Best Practice of WSE Listed Companies. Respecting these principles makes it possible to build an ethical culture of the Company, which translates into shaping relationships with themarket environment and is an important element in building the market position.

By effectively managing the risk of potential fraud in the LOTOS Group, the possibility of its occurrence is minimized. If any risk arises, immediate action is taken to immediately explain the situation, reduce the harmful effects of its occurrence, return the organization to the desired situation and eliminate the recurrence of similar events in the future.

In 2021, no cases of corruption were identified in the LOTOS Group.

Stakeholders can report any instances of fraud or suspected irregularities and/or abuse through defined and shared communication channels.

Reports can be made through several channels:

• phone call or recorded message (phone number +48 504 181 048);
• sending an email to: zawiadomienia@grupalotos.pl;
• filling out a report form posted → on the website;
• sending a letter to the address: Head of the Internal Control Department, Grupa LOTOS S.A., ul. Elbląska 135, 80-718 Gdańsk, Poland.

Information received through the above channels is addressed directly to the Head of the Internal Control Department and is subject to clarification by way of an investigation or inspection. It is also possible to send notifications of suspected fraud to LOTOS Group employees via the intranet platform → www.lotostrada.pl in the sub-service „Fraud Prevention in the LOTOS Group”.

In the LOTOS Group there is no tolerance for any kind of abuse. Among other things, the LOTOS Group is a member of the United Nations Global Compact Call to Action on Anti-Corruption, a global initiative uniting businesses in the fight against all forms of corruption. The Anti-Fraud Policy and other anti-corruption internal regulations are known to all employees of LOTOS Group companies. Each newly hired employee, as part of their training, receives, among other things, information on these regulations and the liability resulting from non-compliance. Additionally, they are reminded repeatedly throughout the course of the employment relationship.

In 2021 the Compliance Department designed and delivered a training course entitled „Compliance in the LOTOS Group” for the management staff of subsidiary companies (over 150 participants took part). Key internal regulations and draft laws relevant to the compliance system were discussed. In the third quarter of 2021, the Compliance Department, in cooperationwith the Recruitment and Development Department, designed and implemented an e-learning training course coveringthe Principles of Granting Powers of Attorney at Grupa LOTOS S.A. The training was dedicated to over 700 employees of Grupa LOTOS S.A., including mandatory training for managers of organizational units. In the reporting period, the Compliance Department conducted extensive information and education activities based on articles published on the internal intranet.

In 2021, there was no case that warranted a dismissal of a LOTOS Group employee because of corruption.

LOTOS Group’s anti-corruption policies and procedures are contained on a publicly available website. The site contains values and principles associated with working with the LOTOS Group’s business partners (Code of Ethics, Anti-Fraud Policy).

In 2021, all LOTOS Group companies were assessed for the risk of corruption events.

Corruption risk is an element of fraud risk understood as a culpable action or omission that is in breach of laws or principles in place in the LOTOS Group, as a result of which a person who commits such an action obtains an unauthorized benefit, or which results in unjustified losses for the Company. Benefits and losses can be of financial, tangible or intangible nature.

Ethical conduct and compliance with the highest standards, in areas such as marketing communications, advertising, sales, and market presence, guaranteed safe and proper operations in 2021, and no legal action was taken against the Company for violations of the principles of free competition and monopolistic practices.

In the LOTOS Group (depending on the Company’s scope of activity and its needs) due diligence procedures are applied in accordance with prevailing standards and norms, within the framework of the implemented management systems:

• (1) Code of Ethics of the LOTOS Group – the document describes the ethical principles Grupa LOTOS S.A. follows in its relations with its suppliers, shareholders, competitors and other participants of the capital market.
• (2) LOTOS Group Anti-Fraud Policy – in order to ensure effective protection of the LOTOS Group’s reputation and assets and to consistently increase the value of Grupa Lotos S.A., as well as to maintain a high level of the organization’s resilienceto fraud, the policy sets out a structured approach to the issue of fraud prevention.
• (3) GLS.72.11.00.00. Principles of concluding transactions with related parties – the procedure is aimed at protecting the interests of Grupa LOTOS S.A. and its shareholders who are not related parties, including in particular minority shareholders.
• (4) GLS.74.07.00.00. Principles of business partner verification – the procedure aims at reducing the risk of irregularities/abuse in business transactions resulting from dishonesty, unreliability or non-compliance with the law by business partners willing to cooperate, or cooperating with LOTOS Group companies.
• (5) Procurement policy in the LOTOS Group – the policy aims at defining uniform rules in the area of planning, preparation and execution of procurement procedures i.e. equal treatment of bidders, competitiveness, transparency, impartiality etc.
• (6) GLS.74.02.00.00. Purchases of goods and services – the procedure defines the principles for planning and executing purchase procedures by Grupa LOTOS S.A.
• (7) GLS.72.02.00.00 Principles of concluding contracts by Grupa LOTOS S.A. – The procedure is aimed at ensuring uniform standards governing the preparation, conclusion, termination and archiving of contracts at Grupa LOTOS S.A., including the principle of recommending the use of CSR clauses in contracts with business partners.
• (8) GLS.72.01.00.00. Principles of sales of Grupa LOTOS S.A.’s products and purchase of petroleum products from domestic entities – the procedure is aimed at ensuring efficient and effective principles of sales of Grupa LOTOS S.A.’s products and purchase of petroleum products from domestic entities.

In the LOTOS Group (depending on the Company’s scope of activity and its needs) due diligence procedures are applied in accordance with prevailing standards and norms, within the framework of the implemented management systems:

• Best Practices for Companies Listed on the Warsaw Stock Exchange 2021;
• PN-EN ISO 9001:2015 – Quality Management Systems;
• PN-EN ISO 14001:2015 – Environmental Management Systems;
• PN-ISO 45001:2018 – Occupational Health and Safety Management Systems;
• PN-EN ISO 27001:2017 – Information Security Management Systems;
• PN-EN ISO 22301:2014 – Business Continuity Management Systems;
• PN-EN ISO 50001:2018 – Energy Management Systems;
• PN-ISO 31000:2018 – Risk Management;
• Internal Control System;
• AQAP 2110 – NATO requirements for quality assurance in design, development and production.

On 1 July 2021, the Code of Best Practice for WSE Listed Companies 2021 came into force(Best Practices of WSE Listed Companies 2021). The Investor Relations Department, in cooperation with the Compliance Department, has made arrangements within the organization for the application of the respective new and amended rules. Grupa LOTOS S.A. informed investors about the application of Best Practices of WSE Listed Companies 2021 within the required deadline.