Philip Morris ČR a.s.

Reference: page 26

PMCR is a joint-stock company with a dualistic structure: a Board of Directors (6 executive members) as governing body, a Supervisory Board (6 members) as controlling body, and an Audit Committee (3 members) overseeing financial reporting and internal controls. As two Audit Committee members also sit on the Supervisory Board, the two bodies total 7 members. PMSK is a limited liability company with a 4-member Executive Body. In total there are 10 executive members. Of non-executive members, 3 are independent and 4 are employees (42.9% independent). Across the 17 board members, gender split is 35.3% female and 64.7% male. Two Supervisory Board members are elected by employees. Heads of functions lead sustainability materiality analysis, define strategies and report to the boards, supported by a dedicated sustainability coordinator. The Company organizes trainings and workshops to ensure bodies possess sustainability expertise relevant to its material impacts, risks and opportunities.

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PMCR's Board of Directors and PMSK's Executive Body are ultimately responsible for decision-making and delivering on sustainability targets within their areas of responsibility. The Supervisory Board supervises the Board's performance including sustainability matters, while the Audit Committee oversees financial reporting and related internal controls. The Board of Directors meets at least twice a year to discuss financial and sustainability topics, and informs the Supervisory Board and Audit Committee at least twice a year. In 2024 the Board was specifically informed on the status and readiness of CSRD reporting preparation and on the outcome of the local sustainability materiality assessment, including detailed impacts, risks and opportunities and the effectiveness of policies, actions and targets. Impacts, risks and opportunities have become an integral part of regular updates. The Supervisory Board and Audit Committee were updated by the Board following the first IRO assessment and will be updated on changes annually.

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Since 2022, PMI's Sustainability Index represents 30% of PMI's long-term performance-based equity award (performance share units, PSUs). The 2022-24 cycle completed in 2024 and will impact executive remuneration for the first time in 2025. Sustainability is also factored into PMI's annual Incentive Compensation (IC) award; all Company body members who are PMI employees are covered, including the sustainability-related component. The Index comprises KPIs aligned with PMI's 2025 Roadmap, weighted by materiality results, scored annually against target ranges approved by PMI's Board. Currently 30% of PSUs is linked to Sustainability Index targets, and PSUs represent 40%-60% of total target equity award. One of five strategic initiatives under the 2024 IC award is sustainability-related (3% weight). Following these definitions, in 2024 2% of the Company boards' variable remuneration is dependent on sustainability-related targets. Schemes are approved by PMI's Compensation and Leadership Development Committee and Board.

Reference: page 29

Protecting and promoting stakeholder rights is paramount to PMI. As expressed in PMI's Human Rights Commitment, the Company works to respect human rights within its organization and across its value chain, identifying and addressing adverse impacts. As part of PMI, the Company is committed to business practices that respect internationally recognized human rights, upholding the UN Guiding Principles on Business and Human Rights and endorsing the OECD Guidelines for Multinational Enterprises and the OECD Due Diligence Guidance for Responsible Business Conduct. A mapping table cross-references the core elements of due diligence to sections of the Statement: embedding due diligence in governance, strategy and business model (GOV-2, GOV-3, SBM-3); engaging affected stakeholders (GOV-2, SBM-2, IRO-1, MDR-P); identifying and assessing adverse impacts (IRO-1, SBM-3); taking actions to address them (MDR-A); and tracking effectiveness and communicating (MDR-M, MDR-T). This is the Company's first sustainability statement.

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Building on a decade of voluntary sustainability reporting, in 2024 PMI instituted a risk management and internal control system covering all facets of the Statement, comprising control environment, risk assessment, control activities, information and communication, and monitoring. The system is orchestrated by PMI's Central Sustainability team with Risk & Assurance, Internal Controls, Legal and subject matter experts. Principal risks identified are that the Statement could be misleading, unstructured, selective, unsubstantiated, non-transparent, inconsistent or incoherent. Mitigations include entity-level controls over the materiality assessment and reporting process and activity-level controls over individual disclosures, leveraging the existing financial reporting controls framework, plus auditability principles. Findings are integrated into business processes via action plans, and the Company integrated sustainability reporting topics into its existing affiliate risk assessment with control owners assigned from local SMEs. Periodic reporting goes to PMI's Sustainability Committee, and locally to quarterly Risk Governance Committee meetings now extended to cover sustainability reporting controls.

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PMI, including PMCR and PMSK, is building a future on smoke-free products as a better choice than continued cigarette smoking, radically transforming its business to address the health impact of cigarette smoking. Its 2025 Roadmap comprises 11 headline goals connected to eight strategies. The Company commercializes both cigarettes and smoke-free products (heat-not-burn, e-vapor, oral) in the Czech Republic and Slovakia via wholesalers, retail and e-commerce. Employee headcount is 1,291 (1,119 Czech, 172 Slovak). All 2024 consolidated revenues of CZK 21,608 million are tied to the Tobacco Cultivation and Production sector. As of 2024, 60% of consolidated net revenues from product sales are tied to smoke-free products, contributing to PMI's group target of over two-thirds of net revenues from smoke-free by 2030. PMCR operates a manufacturing site in Kutná Hora producing for 40+ markets, with a new ZYN nicotine pouch capacity expected to start production in early 2026.

Reference: page 33

The Company regards stakeholder engagement as fundamental to creating shared and sustainable value, using both structured and ad hoc interactions guided by PMI's Code of Conduct. Identified key stakeholder groups include consumers, employees, supply chain and business partners, the finance community, regulators, the public health community, and civil society. Engagement occurs at regular intervals: employees via town halls, surveys and feedback sessions; suppliers via forums, visits and meetings; shareholders via annual meetings; and regulators and expert communities via forums and public consultations. Outcomes are integrated into business strategies, including product development feedback and policy formulation. During the materiality assessment the Company considered stakeholder interests and added "nature" as a silent key stakeholder. The Kutná Hora plant's historic former Cistercian monastery premises are opened to the public for cultural events. The Company plans a post-publication stakeholder dialogue. Bodies are kept informed within the GOV-2 framework.

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The Company's materiality assessment identified material impacts, risks and opportunities concentrated in upstream and downstream value chain activities, highly consistent with PMI's global IROs. Material topics with their applicable ESRS standards are: climate change (E1), biodiversity and ecosystems (E4), circular economy/resource use (E5), own workforce (S1), workers in the value chain (S2), consumers and end-users (S4, mostly entity-specific), and business conduct including illicit tobacco trade prevention (G1, mostly entity-specific). The highest-materiality IROs relate to consumers and end-users, specifically marketing and sales practices and product health impact. Identified risks include supply chain disruptions, costly regulatory compliance, obstacles communicating about smoke-free products, competitor activities, and illicit trade proliferation. Financial thresholds range from minor (under CZK 4 million) to severe (over CZK 100 million). This is the Company's first report, so no changes from prior periods are disclosed. PMI plans to refresh its global sustainability strategy in 2025.

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In 2024 PMI performed a sustainability materiality assessment (SMA) embedding double materiality, then cascaded it to the local Czech and Slovak level. Supported by an external consultant, PMI used a five-step approach: preparation (mapping the value chain into four steps and defining methodology and thresholds set by PMI's Sustainability Committee); listing potentially relevant sustainability matters; defining impacts, risks and opportunities; assessing them (inward risk/opportunity assessment via the Enterprise Risk Management framework considering severity and likelihood; outward impact assessment using scale, scope, irremediability and likelihood on a 4-point scale); and formulating the materiality overview. Risks with major/severe impact and likely/highly likely likelihood, and impacts scoring 3 or above, were deemed material. The global SMA was discussed and validated by PMI's Sustainability Committee and Board. The Company localized results through a structured review by local experts, validated by PMCR's Board of Directors and shared with the Supervisory Board, to be reassessed annually.

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The Company adhered to the ESRS disclosure requirements following the outcome of its materiality assessment, providing a Disclosure Requirements Index on page 24 as a navigation tool. Climate change (E1) was identified as material with all related disclosure requirements considered material in their entirety. Material topical standards are E1 (climate change), E4 (biodiversity and ecosystems), E5 (resource use and circular economy), S1 (own workforce), S2 (workers in the value chain), S4 (consumers and end-users), and G1 (business conduct). The Company did NOT identify material IROs for E2 (Pollution), E3 (Water and marine resources), or S3 (Affected communities); for E2 and E3 the assessment used the ENCORE tool and internal datasets and did not include consultations with affected communities. S4 and G1 disclosures consist mostly of entity-specific disclosures. As this is the Company's first sustainability statement, certain phase-in disclosure requirements per ESRS 1 Appendix C were excluded.