10.1. Subsidiaries

Subsidiaries are entities (including entities which are not incorporated, such as general partnerships) controlled by the parent company, which means that the parent company has a direct or indirect impact on the financial and operating policy of the given entity in order to gain economic benefits from its operations. The definition of control provides that:

1. an investor controls an investee when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee,
2. therefore, an investor controls an investee if and only if the investor has all of the following elements:

• power over the investee,
• exposure, or rights, to variable returns from its involvement with the investee, and
• the ability to use its power over the investee to affect the amount of the investor’s returns;

3. to have power over an investee, an investor must have existing rights that give it the current ability to direct the relevant activities; for the purpose of assessing power, only substantive rights and rights that are not protective shall be considered,
4. determining whether an investor has power depends on a significant activity, the way decisions are made on significant activities and rights held by the investor and other entities in relation to the entity in which the investment was made.

The PKO Bank Polski SA Group does not meet the definition of “an investment entity”.