Changes in IFRS effective in 2021 and 2022

1 Changes in ifrs effective in 2021 and 202226 October2021 Audit & Assurance Central Europe 2 Changes in ifrs effective in 2021 and 2022 Changes in ifrs effective in 2021 and 2022 SpeakersAleksandaRytko Senior managerCE ifrs Technical DeskE-mail: tel: +48 664 199181 Marcin Samolik Senior managerCE ifrs Technical tel: +48 618 824257 Krzysztof Supera Senior manager CE ifrs Technical +48 662 155548So aPlach Senior managerCE ifrs Technical DeskE-mail: +420 737 235 531 Central Europe 3 Changes in ifrs effective in 2021 and 2022(as at 25. 10. 2021) ifrs Changes effective from 1 January 2021 and laterInterest Rate Benchmark Reform Phase 21 January 20211 January 20221 January 2023 Amendments to IAS 37 Provisions, ContingentLiabilites, ContingentAssetsOnerous Contracts Cost of Fulfilling a ContractAmendments to ifrs 16 Leasing -Covid-19 Related Rent ConcessionsAmendments to ifrs 4 Insurance contracts -deferral of ifrs 9 Annual Improvements 2018 2020 Not endorsedin the EUEndorsed in the EUAmendments to IAS 1 Classification of Liabilities as CurrentAmendments to ifrs 3 Business CombinationsReference to the Conceptual Framework1 April 2021 ifrs 17 Insurance Contracts Amendments to IAS 16 Property.

2 Plant and Equipment-Proceeds before Intended UseAmendments to IAS 1 Disclosure of Accounting policiesAmendments to IAS 8 Definition of Accounting EstimatesAmendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single TransactionIFRS changeseffectivefrom 1 January 2021 IBOR reform ifrs 9, IAS 39, ifrs 7, ifrs 16, ifrs 4 Krzysztof Supera Senior ManagerCE ifrs Technical DeskAudit & AssuranceDeloitte Central Europe 6 Changes in ifrs effective in 2021 and 2022 Changes in ifrs related to IBOR reform Phase 2 (2021) Changes in ifrs related to IBOR reform Phase 1 (2020) and Phase 2 (2021) ifrs 9, ifrs 7, ifrs 16, ifrs 4, IAS 39 For around 50 years IBOR rates (interbank offered rates) have been basis for determination of time value of moneyin numerous transactions worldwide (loans, borrowings, derivatives, leases, insurance contracts).

3 Currently, the reform of the interest rate market is being conducted. IBOR rates will be replaced with alternative reference rates, which will be based on executed transactions instead of declarations of market participants(panelists). Starting from the beginning of 2022 some significant LIBOR rateswill cease to be published ( CHF LIBOR, GBP LIBOR, EUR LIBOR). Contracts based on variable interestrates have to be amended( Changes in interest rate calculation, fallback clauses, spread between IBOR and new rates).Amendments to ifrs being response to the Changes in financial markets have been introduced in two phases: Phase 1amendments provide temporary exceptions for specific hedge accounting requirements impacted by uncertainties arising from the reform before an existing interest rate benchmark (IBOR) is replaced with an alternative benchmark interest rate.

4 These amendments apply to annual reporting periods beginning on or after 1 January 2020. Phase 2 amendments relate to issues that could affect financial reporting when an IBOR is replaced with an alternative benchmark interest rate. The amendments are relevant for many entities and in particular those with financial assets, financial liabilities or lease liabilities that are subject to the interest rate benchmark reform and those that apply the hedge accounting requirements in ifrs 9 or IAS 39 to hedging relationships that are affected by the reform. The Phase 2 amendments apply to annual reporting periods beginning on or after 1 January funds Central Europe 7 Changes in ifrs effective in 2021 and 2022 IBOR reform landscape (selected rates)CountryNew reference rateReference rate full name (administrator)Index being replacedEnd dateEU* STR Euro Short Term Rate(ECB) Overnight Financing Rate(SIX)CHF Overnight Index Average(Bank of England)GBPLIBOR **USASOFRS ecured Overnight Financing Rate(FED)USD LIBOR (1W, 2M) (other)**JapanTONAT okyo Overnight Average(Bank of Japan)JPY (1W, 2M) (other)**EUR LIBOR is permanently terminated as at **Some LIBOR benchmarks will be available after but they will loose their representativeness.

5 It means that the ratesmay be published but they will not be based on information provided by panels banks. Instead, these will be synthetic rates. Central Europe 8 Changes in ifrs effective in 2021 and 2022 IBOR reform Phase 2 Changes in contractual cash flows as a result of the IBOR reform IBOR rateEffective interest rate calculated based on contractual cash flows based on interest rate calculated based on contractual cash flows based on alternative interest basis for determining the contractual cash flowsNo recalculatationof gross carrying amount for the Changes resulting from IBOR of effective interest reference rate Central Europe 9 Changes in ifrs effective in 2021 and 2022 IBOR reform Phase 2 Changes in contractual cash flows as a result of the IBOR reform accounting impact Changes resulting from IBOR Changes (payment dates and amounts, currency, credit risk margin, SPPI related features, etc).

6 Practical expedient ( ifrs 9 ).Recalculation of effective interest the Changes result in derecognitionof financial in contractual cash flows of the financial instrumentApplication of ifrs 9 principles related to derecognitionof financial on modification ( ifrs 9 ) or Changes in expected cash flows ( ifrs 9 ).YESNO Central Europe 10 Changes in ifrs effective in 2021 and 2022 Measurement of financial assets and liabilities (including lease liabilities) Required Changes in valuation models driven by transition from IBOR to alternative interest rates fair value measurement. Accounting treatment of Changes in contractual cash flowsresulting from transition from IBOR to alternative interest rates amortized costmeasurement, effective interest rate recalculation, modification result on accompanying Changes in contract, potential impact on SPPI test (in particular: benchmark test).

7 Recalculation of discount rate in lease contractsresulting from transition from IBOR to alternative interest accounting Modification of designated hedge relationships (reflectedin hedge documentation). Practical solutions as a response to challenges resulting from transition from IBOR to alternative interest rates. Replacement of existing challenges Amendments of the contracts with financial institutions ( borrowings, leases, derivatives). Amendments of the intra-group contracts( loans, borrowings, derivatives). Amendments in contracts with customers. Changes in IT systems in order to capture Changes in EIR, discount rate, modification result, in ifrs related to IBOR reform key challengesThe challenges will materialize mostly after howeverthe uncertainties and how the transition from IBOR to alternative reference rates is managed must be disclosed in FS 2021!

8 Central Europe 11 Changes in ifrs effective in 2021 and 2022 IBOR reform Phase 2 disclosure requirementsThe nature and extent of risks to which the entity is exposed arising from financial instruments subject to interest rate benchmark the entity managesthe risksarising from financial instruments subject to interest rate benchmark entity s progress in completing the transitionto alternative benchmark the entity is managingthe transitionto alternative interest ratesand and the risks to which it is exposed arising from financial instruments because of the information about financial instruments that have yet to transition to an alternative benchmark rate as at the end of the reporting period, showing separately: -non-derivative financial assets; -non-derivative financial liabilities; information shall be disaggregated by significant interest rate benchmarksubject to interest rate benchmark 7:24I-24 JIFRS 4 Insurance Contracts Krzysztof Supera Senior ManagerCE ifrs Technical DeskAudit & AssuranceDeloitte Central Europe 13 Changes in ifrs effective in 2021 and 2022 Changes in ifrs effective in 2021 and 2022 Amendments to ifrs 4 ifrs 9 addresses the accounting for financial instruments and is effective for annual reportingperiods beginning on or after 1 January 2018.

9 However, for insurers meeting the eligibilitycriteria, ifrs 4 provides a temporary exemption which permits them to continue to applyIAS 39 Financial Instruments: Recognition and Measurement rather than implement ifrs 9. This temporary exemption was applicable to annual periods beginning before 1 January 2021. In June 2020 the IASB published an amendment to ifrs 4 to extend the temporary exemptionfrom applying ifrs 9 until annual periods beginning before 1 January 2023. This amendmentmaintains the alignment of the effective dates of ifrs 9 and ifrs Changes effective from 1 January2021 ifrs changeseffectivefrom 1 April2021 Marcin SamolikSenior ManagerCE ifrs Technical DeskAudit & AssuranceDeloitte Central Europe 15 Changes in ifrs effective in 2021 and 2022 Changes in ifrs effective in 2021 and 2022 ifrs 16 and COVID-19 Extension of practical expedientBackground In May 2020, the IASB issuedCovid-19-Related Rent Concessions (Amendment to ifrs 16).

10 The pronouncement amended ifrs 16 Leasesto provide lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modification. On issuance, the practical expedient was limited to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2021. Since lessors continue to grant COVID-19-related rent concessions to lessees and since the effects of the COVID-19 pandemic are ongoing and significant, the IASB decided to look into whether to extend the time period over which the practical expedient is available for (issued on 31 March 2021): Permits a lessee to apply the practical expedient regarding COVID-19-related rent concessions to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2022(rather than only payments originally due on or before 30 June 2021).