ANNUAL REPORT ON PERFORMANCE OF GETIN HOLDING S.A. FOR YEAR 2014

Transcription

1 ANNUAL REPORT ON PERFORMANCE OF GETIN HOLDING S.A. FOR YEAR 2014 Wrocław, February 23 rd, 2015

2 Contents 1. Rules for drawing up financial statements in Getin Holding S.A General information Information on the Company's operations, main products, goods, services and markets Material events that occurred in 2014 and upon its end up to completion of the financial statement, that had a considerable effect on the Group s operations and financial performance and foreseeable growth and expected financial standing of the Company Main achievements in R&D Acquisition of own shares Financial instruments Risk factors and threats to the Company's growth Assessment of unusual events and factors that affected the Company's performance for 2014, the specifying the extent to which they affected the Company's performance Information on the Company's organizational and capital connections and determination of the major domestic and foreign investments of the Capital Group (securities, financial instruments, intangible assets and real property), including the capital investments made outside its group of related entities as well as method of their financing Information about substantial transactions concluded by the company or its subsidiary with related entities on terms other than at arm's length Information on conclusion of agreements significant to the Company's operations, including agreements concluded between its shareholders, insurance or cooperation agreements Loans granted, in particular loans granted to the company related entities Information on guarantees and sureties granted and received, in particular guarantees and sureties granted to the company related entities Loan and credit facility agreements concluded and terminated in List of pending legal or arbitration proceedings before court or arbitration court or proceedings before public administration authorities Description of the way the Company used proceeds from issuance of securities Explanation of the differences between the financial results disclosed in the annual report and the published financial forecasts Financial resources management Changes in the core principles of the Company and Capital Group management Characteristics of the external and internal factors significant to the Company growth and description of the Company growth opportunities together with evaluation of probability of accomplishment of its investment plans, including capital investment, as compared to the Company's resources, including possible changes in the structure of financing this growth Total number and nominal value of all the Company s shares held by members of the managing and supervisory board members of Getin Holding as of Information on the agreement being known to the Company (including the ones concluded after the balance sheet date) which may result in future changes to the proportions of the shares held by the current shareholders and bond holders Agreements concluded by the Company with its managers providing for compensations in case of their resignation or dismissal without presenting material grounds or their recalling or dismissal in consequence of the Company's merger or take-over Remuneration, rewards, benefits, including motivation payments and the Company s capital related bonuses disbursed or due to the members of the Management Board or Supervisory Board and Information of the remuneration of the members of Company s Management Board or Supervisory Board arising from holding positions in subsidiaries governing bodies Information on share incentive plan control system Information on conclusion of an agreement with an entity authorised to audit financial reports

3 1. Rules for drawing up financial statements in Getin Holding S.A. The annual report of Getin Holding Capital Group for the reporting period starting ending comprises the following: Financial statement of Getin Holding for the period from to and as of , including balance sheet, profit and loss account, statement of changes in equity, cash flow account and explanatory notes to the financial statement. Comparative financial data as of and , and for the 12-month period ended on Management Board s report on the performance of Getin Holding in the period from to Statements made by the Management Board in compliance with Art. 91 (5)(4) of the Decree of the Minister of Finance dated on current and periodic information published by issuers of securities and on conditions under which such information may be recognized as being equivalent to information required by the regulations of law of a state which is not a member state General information. Getin Holding S.A. ul. Gwiaździsta Wrocław NIP Share capital PLN 731,289,368 REGON (fully paid up) The company's main object is operating financial holdings. The entire Getin Holding Capital Group is controlled by dr. Leszek Czarnecki. Getin Holding Capital Group (hereinafter referred to as "Getin Holding Capital Group", "Getin Holding Group", the "Capital Group" or the "Group") comprises Getin Holding S.A., the parent company (hereinafter referred to as "Getin Holding" or the "Company") and its subsidiaries. 2. Information on the Company's operations, main products, goods, services and markets. Getin Holding is a financial holding investing in the financial sector companies in Poland and abroad. The Company's investments are long-term by nature. The Company actively influences the strategy and management of the controlled companies so as to ensure growth of the value of the assets held, their security and to utilize potential synergy opportunities emerging within Getin Holding Capital Group. In 2014, the core operations of Getin Holding Group comprised: segment of banking services in Poland; segment of banking services in Ukraine; segment of banking services in Belarus; segment of banking services in Romania; segment of banking and lease services in Russia; segment of financial services in Poland.

4 In 2014, the Company pursued the strategy in keeping with its core operations, i.e. investment activity by making the following transactions in the reported period: Share acquisitions and disposals made by the Company On , Getin Holding concluded with Getin Noble Bank an agreement obliging to sell 858,334 ordinary registered shares in TU Europa, with the total face value of PLN 3.4 million (PLN 4 per one share), accounting for 9.08 % of the share capital of TU Europa and conferring 9.08% voting rights at general meetings of TU Europa, for the total price of PLN million (PLN 193 for each share). The transfer of the title in shares and payment for the shares were effected on through Noble Securities S.A. based in Warsaw. On , Getin Holding concluded with Carcade (Russia) (its subsidiary) a sale agreement under which it purchased from Carcade (Russia) 381,377,829 registered shares in Idea Bank (Russia) (including 834,551 preference and 380,543,278 ordinary shares) with the face value of RUB 1 each, accounting for % of the share capital of Idea Bank (Russia). The total purchase price for the shares in Idea Bank (Russia) was RUB million (PLN 57.5 million), i.e. RUB 1.75 (PLN 0.15) for each share. The title in the shares was transferred to Getin Holding on On , Dom Maklerski Noble Securities S.A. purchased on its own behalf, to the Issuer's account, outside the regulated market, 21,917,808 the Issuer's own shares for the price of PLN 3.65 per one share. The face value of the purchased shares totals PLN 21,917,808 and they account for 3% of the Issuer's share capital and confer the right to 21,917,808 votes at the Issuer's general meetings, which accounts for 3% of all votes at the Issuer's general meetings. On , in the performance of the agreement dated concluded between Getin Holding and Idea Bank (Poland), with the participation of and through Noble Securities, Getin Holding transferred to Idea Bank the title in 3,590,182 ordinary bearer shares in Open Finance, accounting for 6.60% of the share capital of Open Finance, and conferring the right to 6.60% votes at Open Finance general meetings, for the total price of PLN 45.6 million. The transfer of the title in shares was effected through Noble Securities. Pursuant to the agreement dated , the Issuer took up 2,872,591 K-series ordinary registered shares with the face value of PLN 2 each in the increased share capital of Idea Leasing (Poland). On , having satisfied all conditions set out in the conditional agreement dated , the Issuer purchased from VB-Leasing International GmbH a stake in the share capital of VB Leasing Poland, and a stake in the share capital of VB Leasing Romania IFN. As a result of the purchase of the stake in VBL RO, the Issuer took indirect control over VBL Broker de Asigurare SRL, a subsidiary company of VB Leasing Romania based in Bucharest. The price for the Shares in VB Leasing Poland totalled PLN million, while the price for shares in VBL RO totalled RON 55.1 million (PLN 52.3 million). After the balance sheet date, due to the fact that the bank account of VB Leasing Poland S.A. was credited with the refund of goods and services tax returned to VB Leasing Poland S.A. by relevant tax authorities, the Issuer paid VB- Leasing International Holding GmbH PLN 1,309, for the shares in VB Leasing Poland. Hence, the final price for the shares in VB Leasing Poland S.A. as at the date hereof amounts to PLN million, which the Issuer reported in Current Report No. 04/2015 dated Simultaneously, on , the Issuer completed transactions of sale of a stake in VB Leasing Poland to Idea Leasing and sale of a stake in VB Leasing Romania to Idea Investment (Romania) for the price of PLN million. The Issuer sold its stake in VB leasing Poland to Idea Leasing (Poland) for the price of PLN million plus surcharge of PLN 1.3 million. The Issuer explains that the price was increased by PLN 1.3 million after the balance sheet date due to the fact that the bank account of VB Leasing Polska S.A. was credited with the refund of goods and services tax returned to VB Leasing Poland S.A. by relevant tax authorities, the Issuer concluded an agreement with Idea Leasing (Poland) under which Idea Leasing (Poland) paid the Issuer PLN 1.3 million surcharge on shares in VB Leasing Polska S.A., which the Issuer reported in Current Report No. 04/2015 dated The acquisition of VBL PL has considerably enhanced the position of Idea Bank Group in the lease sector, and it will allow to make the next step in the development of a complex offer for business clients of Idea Bank. Consolidation of the Romanian lease company into Getin Holding Group will reinforce the Issuer's position in

5 the Romanian market and will allow for building foundations for a strong capital group concentrated round Romanian International Bank. Share acquisitions and disposals made by the Company's subsidiaries Idea Bank Group (Poland) In 2014, Idea Bank (Poland) acquired the following shares:. On , pursuant to the agreement concluded with Getin Holding, it acquired 3,590,182 shares (6.60% of the share capital and votes at general meetings) in Open Finance for the total price of PLN 45.6 million. On , pursuant to the agreement concluded with LC Corp B.V., it acquired 1,000,000 shares (1.84% of the share capital and votes at general meetings) in Open Finance for the total price of PLN 12.7 million. Having closed that transaction, Idea Bank (Poland) held an 8.44% stake in the share capital and 8.44% votes at general meetings of the company. On , it acquired, under the agreement concluded with dr. Leszek Czarnecki, 2,000,000 shares (3.68% stake in share capital and votes at general meetings, respectively) in Open Finance for the price of PLN 25.4 million. Having closed that transaction, Idea Bank (Poland) holds a 12.12% stake in the share capital and 12.12% votes at general meetings of the company. In 2014, Idea Leasing (Poland) acquired the following shares: On , it acquired 500 shares in Idea Leasing Sp. z o. o. SKA based in Wrocław with the face value of PLN 100 each, and the total face value of PLN 50,000, accounting for interest in Idea Leasing Sp. z o. o. SKA, which since has held 99.99% interest in Idea Leasing S.A. Sp. k. as the limited partner. On , it acquired 100 shares in Idea Leasing spółka z ograniczoną odpowiedzialnością based in Wrocław with the face value of PLN 50 each, and the total face value of PLN 5,000, accounting for shares in the company. On , it acquired 804,080 shares in VB Leasing Poland S.A. based in Wrocław with the face value of PLN 10 each, and the total value of PLN 8,040,800, accounting for interest in the company. On , it took up a 0.05% stake in Idea Leasing spółka akcyjna komandytowa, as the general partner. On the same date VB Leasing Poland took up a 0.05% stake as the general partner. The sole shareholder in the company is Idea Leasing sp. z o. o. S.K.A. In 2014, Idea Expert S.A. acquired the following shares: On , it acquired shares in GetBack S.A., a company based in Wrocław, i.e. 20 million shares with the face value of PLN 0.20 each, accounting for of all voting rights at general meetings of GetBack, and of its share capital. On , it acquired shares in Idea Money S.A., a company based in Warsaw, i.e. 434,990 shares with the face value of PLN 10 each, accounting for of all voting rights at general meetings of Idea Money, and of its share capital.

6 In 2014, GetBack S.A. acquired the following shares: On , it acquired from Romanian International Bank a stake in RIB Recovery Srl (presently getback Recovery Srl), for EUR 5 thousand (equivalent of PLN 21 thousand ). On , it acquired a stake in GetBack Investments Sp. z o.o. with the value of PLN 100 thousand. On , it acquired series 1 investment certificates of the Open Finance FIZAN fund for their face value in return for cash contribution of PLN 200 thousand. As at , GetBack was the sole investor in the fund. On , there was filed a request to redeem easydebt NSFIZ investment certificates for the total amount of PLN 10.1 million. Hence, the company took up easydebt NSFIZ investment certificates. On , it acquired from Open Finance FIZAN a stake in Bakura Sp. z o.o. S.K.A. for the total price of PLN 56 thousand. The shares in Bakura sp. z o. o. S.K.A. were purchased by Open Finance FIZAN on from Abbey Art Fund FIZAN. On , it acquired from Open Finance FIZAN a stake in Bakura Sp. z o.o. for the total price of PLN 6 thousand. The shares in Bakura sp. z o.o. were purchased by Open Finance FIZAN on from Raiffeisen Bank Polska S.A. On , it took up 53,333 C-series investment certificates of Omega Wierzytelności NSFIZ fund for the total price of PLN 65,440 thousand. Since the company had held A-series certificate with the face value PLN 200 thousand. As at the company held 20% interest in the fund s assets. Furthermore, on , GetBack Investments sp. z o. o. concluded with Raiffeisen Bank Polska S.A. an agreement to assign rights and duties of the limited partner in Bakura Sp. z o.o. sp. k. Under the agreement GetBack Investments Sp. z o. o. assumed all rights and duties of the limited partner in Bakura Sp. z o. o. sp. k. acquiring a 99.91% stake in the company for the price of PLN million, decreased by PLN 3.4 million by virtue of an annex dated The purchase price finally totalled PLN million. On , shareholders in Bakura Sp. z o.o. sp. k. resolved that Bakura Sp. z o.o. sp. k. should redeem contributions of PLN 307,781 thousand made for the limited partner, i.e. GetBack Investments Sp. z o.o. Upon the redemption, the limited partner's contribution amounts to PLN 1 thousand, and the share in profit 99%. On spółka Bakura Sp. z o.o. S.K.A. acquired from GetBack Investments Sp. z o.o. the limited partner's rights to the 99% share in profit of Bakura Sp. z o.o. sp. k. for the total amount of PLN 1 thousand. Idea Bank (Ukraine) On , Gwarant Plus acquired 41,179,877 shares in Idea Bank (Ukraine). Consequently, Gwarant Plus's interest in the share capital increased from % to %. Getin International On , a corporate rights sale contract was concluded by Getin International (Poland) and Gwarant Plus, whereby Gwarant Plus purchased from Getin International 23.7% of its own shares, which account for % interst held by Getin International. On , the company acquired from Getin Holding S.A. one share in Romanian International Bank S.A. with the face value of RON 0.1, for the price of PLN 0.1. On , the company acquired from Mr. Radu Vasiliescu 1,060 shares in Idea Investment S.A. with the face value of RON 1, for the total price of PLN 1,060. On the same date the company purchased from Mr. Radu Vasiliescu 87 shares in Idea Leasing IFN for the total price of PLN 87.

7 Carcade Group On , Centr Carauto was established. Carcade holds 99% interest in the new company, and Carcade Service 1%. Romanian International Bank On , Idea Leasing IFN S.A. (Romania) was incorporated. Romanian International Bank holds 99.88% shares in the newly established company. On , Idea Investment S.A. (Romania) was incorporated. Romanian International Bank holds 99.99% shares in the newly established company. On , Idea Investment purchased from Getin Holding shares in VB Leasing Romania IFN. Changes in share capital Getin Holding On , the National Depository for Securities bearer 54,326 P-series ordinary registered shares in Getin Holding and introduced them to trading in the prime market. Consequently, as of , Getin Holding's share capital increased to PLN 731,289,368. Therefore the structure of the Issuer's capital changed and is as follows: 731,100,434 A-series ordinary bearer shares with the value of PLN 1 each; 188,934 P-series ordinary bearer shares with the value of PLN 1 each; Idea Bank (Poland) In the reporting period, the share capital of Idea Box S.A. was increased by PLN 0.5 million, i.e. to PLN 1.5 million. Idea Bank (Poland) took up 8,500 shares in the increased share capital. On , the general meeting of Idea Leasing (Poland) resolved to increase the company s share capital from PLN 19 million to PLN 23.5 million. Idea Bank (Poland) took up 4,500 shares with the face value of PLN 1,000 each in the increased share capital. On , the general meeting of Idea Bank (Poland) resolved to increase the bank's share capital by PLN 9.5 million by issuing 4,744,526 K-series ordinary registered shares. The capital increase was registered on On , the register court registered the increase in the share capital of Idea Bank (Poland) from PLN 96,936,060 to PLN 106,425,112 (issue of K-series shares). On , the register court registered the increase in the share capital of Idea Bank (Poland) from PLN 106,425,112 to PLN 135,622,194 (issue of L-series shares). Romanian International Bank On , the extraordinary general meeting of Romanian International Bank resolved to increase the bank s share capital from RON 78 million (PLN 74.2 million) to RON 83.4 million RON (PLN 79.3 million ) On , the extraordinary general meeting of Romanian International Bank resolved to increase the share capital from RON 83.4 million (PLN 79.3 million) to RON 123 million RON (PLN 117 million) On , after the balance sheet date, the extraordinary general meeting of Romanian International Bank resolved to increase the share capital from RON 123 million (PLN 117 million) to RON 137 million (PLN 130,2 million).

8 3. Material events that occurred in 2014 and upon its end up to the completion of the financial statement that had material effect on the Group s operations and financial performance and foreseeable growth and expected financial standing of the Company. On , there were also satisfied all conditions precedent set out in conditional agreements to acquire receivables portfolios, of which the Issuer reported in Current Report No. 16/2014 dated , and hence in the performance of the said agreements: 1. Idea Bank (Poland) acquired from VBL PL a portfolio of lease and loan receivables to VBL PL for the price of PLN 1,587.6 million and EUR million (PLN 1,210.8 million), and 2. Romanian International Bank acquired from VBL RO a portfolio of lease and loan receivables to VBL RO for the price of EUR million (PLN million). The funds raised by VBL PL and VBL RO from Romanian International Bank from the sale of the receivables were earmarked by VBL PL and VBL RO for the repayment of the financing provided by VBLI Group entities that in case of VBL PL amounted to PLN 1,546.3 million, EUR million (PLN 1,209.9 million) and CHF thousand (PLN 3.5 million), and in case of VBL RO RON million (PLN million). Getin Holding reported the aforementioned transaction, including the conclusion of agreements and successive satisfaction of conditions precedent in the following current reports: No. 16/2014 of , No. 25/2104 of , 39/2014 of , No. 44/2014 of , 45/2014 of , No. 48/2014 of , No. 53/2014 of , No. 55/2014 of , No. 56/2014 of , No. 57/2014 of On , Getin Holding concluded with Idea Bank S.A. (Poland) a guarantee agreement due to Idea Bank's (Poland) depositing on in Romanian International Bank EUR 80 million (PLN 341 million) as an interbank deposit for the period from 3 to 18 months. As at the end of 2014, deposits of EUR 52 million (PLN million) were returned, which substantially decreased the Company's guarantee obligation. Detailed terms and conditions of the guarantee agreement are reported in section 14 hereof. On , Mr Rafał Juszczak handed his resignation from sitting in the Management Board and holding the function of Vice President of Getin Holding Management Board, effective as of , which was reported in Current Report number 1/2015 dated On , the Issuer executed an agreement with Getin Noble Bank with participation and through Noble Securities S.A., the brokerage house based in Warsaw S.A. ("Noble Securities"), to sell 3,712 shares in Getin Leasing S.A. based in Wrocław, accounting for a 49.28% stake in share capital and conferring 49.28% of all votes at general meetings of Getin Leasing. The price for one share in Getin Leasing is PLN 46, Under the agreement, the total contractual price is PLN million that is the price for shares plus PLN 7.8 million surcharge for deferring the price payment by Getin Noble Bank. The transfer of the title in the shares was effected through Noble Securities on the contractual date. The price shall also be paid through Noble Securities on 29 January In 2015, the Company intends to further strengthen its market position in the core areas of its operations. Getin Holding intends to reach growth through consistent development of the Group companies and through well thought out acquisitions of other companies rendering financial services for individuals and SMEs. The Company's plans admit limiting its presence in low potential markets with high risk levels while enhancing its presence in high potential markets in order to ensure sustainable growth for Getin Holding Capital Group. The growth strategy goals will be accomplished also through maximizing organic growth, utilizing the market growth and competitive advantage in target market segments, mainly in retail and SME banking. The Group aims at maximizing use of resources, among others through optimizing results generated by the Group companies and ensuring experienced and well motivated management and financial resources while paying close attention to risk management through enhanced organizational control and risk management systems. The Group's growth is based on multiplication of a proven business model in the international scale while being focused on financial markets.

9 In 2014, Getin Holding closed the largest transaction in its history, worth over PLN 3 billion, whose subject was the acquisition of Polish and Romanian branches of VB Leasing, as a result of consolidating the units into the Getin Holding structure. The transaction was also one of the largest transactions effected by Polish financial companies in recent years. One of the Company s strategic goals is building the strength of Idea Bank Group that provides comprehensive services to entrepreneurs. The acquisitions of Idea Money, getback, and VB Leasing Poland have enhanced its position in the financial market and generated the record net result.

10 As of , Getin Holding controls the following companies: Getin Holding Tax Care Debito NSFIZ Twoja Inicjatywa Fundacja Wspierania Przedsiębiorczości Debentures FIZAN Bakura sp. z o.o. General partner 1% 61.27% 51.27% Idea Bank (Poland) MW Trade Idea Expert Lion s House Property Solutions FIZAN LC Corp Sky Tower Ellisa Investments Carlise Investments Idea Leasing (Polska) 0,05% PDK Biznes Idea Money GetBack Veso Investments sp. z o.o % % Veso Investments sp. z o.o. SKA Development System Idea Leasing S.A. Sp. K. Bakura sp. z o.o. SKA GetBack Recovery GetBack Investments 90,91 % 20% 99% Easydebt NSFIZ Bakura sp. z o.o. Sp. K. Kancelaria Prawna GetBack Mariusz Brysik Omega Wierzytelności NSFIZ Open Finance FIZAN 99,99% 95,5% Belarusian Bank for Small Business (4.49% repurchased own stock) 0.01% Idea Bank (Belarus) 4.9% Idea Broker 4.9% Idea Leasing sp. z o.o. Idea Leasing sp. z o.o. SKA VB Leasing Polska 99.9% 0.05% Sky Tower Apartamenty 95.1% Getin International (Poland) 95.1% Idea Finance (Belarus) Getin International (Luxembourg) % Romanian International Bank 99.88% 0.1% Idea Leasing VBL Broker de Asigurare 99.99% Idea Investment VB Leasing Romania 0.01% % % Idea Bank (Ukraine) % Gwarant Plus (63.798% - re-purchased own stock) % Carcade Carcade Poland Idea Leasing (Ukraine) 0.001% % % IDEA Bank (Russia) 99% Carcade Service 1% Centr Karawto

11 4. Comments on the Company's financial performance for Comments to basic economic and financial parameters disclosed in the financial statement. INCOME STATEMENT Income from dividends Interest income from loans granted Result from sale / liquidation of investments Result on financial instruments at fair value Other financial income Other income Total income Operational costs (25 080) (19 757) Financial costs (27 930) (20 718) Other operating expenses (52) (127) Total expenses (53 062) (40 602) Profit before income tax Corporate income tax (24 846) Net profit (loss) In 2014, the Company executed corporate government over financial companies included in its investment portfolio. The Company closed the year 2014 with the net profit of PLN thousand. To the generated profit contributed: The amount of profit was mainly due to: Profit from the investment sale amounting PLN thousand (net: PLN thousand), which includes loss incurred on sale of 6.60% Open Finance S.A. shares for PLN thousand and profit incurred on sale of VB Leasing Polska S.A. and VB Leasing Romania IFN S.A. shares for PLN thousand. Profit incurred on sale of 9.08% TU Europa S.A. shares for PLN thousand (net: PLN thousand) Interest rates from the obligations, credits and loans amounting PLN thousand, included in the financial costs. 5. Main achievements in R&D. Not applicable to Getin Holding companies. 6. Acquisition of own shares On , Dom Maklerski Noble Securities S.A. acquired on its own behalf, to the Issuer's account, outside the regulated market, 21,917,808 of the Issuer's own shares for the price of PLN 3.65 per one share. The face value of the purchased shares totals PLN 21,917,808 and they account for 3% of the Issuer's share capital and confer the right to 21,917,808 votes at the Issuer's general meetings, which accounts for 3% of all votes at the Issuer's general meetings. The Issuer purchased the shares with a view to: sell them in the future;

12 use them in the future in case of acquisition of shares in other entities to exchange them for such shares; use them in incentive programmes; use them to secure future transactions. As a result of the transaction the Issuer holds 21,917,808 own shares, which accounts for 21,917,808 votes at the Issuer's general meetings. The legal basis for purchasing own stock was the document "Invitation to tender for shares of Getin Holding S.A" of the Issuer's Management Board dated , adopted pursuant to the authorisation granted by the Issuer's annual general meeting in resolution number 18 dated on authorising the Company to buy back the Company's own shares, specification of terms and conditions of the buyback, granting the Company's Management Board relevant authorisations, and making a reserve for the shares buyback. The sale offers accepted by the Issuer comprised more shares than the number of shares named by the Company in the invitation, therefore each sale offer was reduced by approximately 96.74% 7. Financial instruments Detailed information on financial instruments is reported in notes 28, 29, 32, 33, 36, 42 in explanatory notes to the Company's financial statement. 8. Risk factors and threats to the Company's growth. The risk factors affecting the Company are related mainly to management of investments in subsidiaries and concern value of such investments. The risk scale largely depends on the current economic and macroeconomic situation. Slump in national economies, where capital investments are being or will be made, may have adverse impact on return on such investments. Fluctuations in the economic situation in markets where the investments are being made currently are hardly foreseeable. The Company adapts its risk management mechanisms to the current economic situation. Due to the situation in Ukraine and symptoms of crisis in Russia and Belarus that had material impact on the way of running business in the eastern markets and the necessity of re-defining the strategy, in the face of plunging national currencies in Russia, Ukraine and Belarus, specifically in Q4 2014, as well as high inflation rates in those countries, Getin Holding focused on preventing effects of the adverse situation in the Eastern Europe. Precise credit risk management and enhancing payment discipline allowed for maintaining relevant regulatory and liquidity parameters and cost discipline, as well as maintaining stable level of deposits from clients in subsidiaries. In principle, Getin Holding, as a holding company, focuses on performance of its role as a business incubator for start-ups and innovative enterprises. Therefore, the risks factors and threats include risk related to launching new projects. Competition is another risk and threat factor that is permanently present in the market in which the Company operates. The Company's operations in Russian Federation, Ukraine and Belarus are additionally affected by political and macroeconomic risk specific for these countries. Financial risk management objectives and principles are reported in note 41 of the explanatory notes to the Company's financial statement and in note 7 to the Capital Group's consolidated financial statement. 9. Assessment of irregular events and factors that affected the Company's performance for 2014, with specification the extent to which they affected the Company's performance.

13 Besides the factors reported in section 4 hereof, there occurred no material irregular events or factors that materially affected the Group s financial results. 10. Information on the Company's organizational and capital connections and determination of the major domestic and foreign investments (securities, financial instruments, intangible assets and real property), including capital investments made outside its group of related entities as well as the method of their financing. The Company's organizational and capital connections are reported in 1.2. of the Management Board's Report on the Performance of Getin Holding Capital Group. Detailed information on capital changes is reported in sections 2 and hereof, as well as in 1.3. of the Management Board's Report on the Performance of Getin Holding Capital Group. In the reporting period the Company did not make any significant investments in intangible assets or real property. The Company financed all capital investments with own funds. 11. Information about substantial transactions concluded by the Company or its subsidiary with related entities on terms other than at arm's length. In 2014, neither the Company nor its subsidiaries concluded any transactions with related entities on terms other than at arm's length. Detailed information on transactions with related entities is reported in note 41 of the explanatory notes to the Company's financial statement. 12. Information on conclusion of agreements significant to the Company's operations, including agreements concluded between its shareholders, insurance or cooperation agreements. Besides the agreements disclosed in section 2 and 3 hereof, the Company concluded no other significant agreements. 13. Information on loans and credit facilities granted, in particular loans granted to the Company related entities. The following table presents information on loans and credit facilities granted in Release date Borrower Currency Getin Holding Contractual principal Interest rate Maturity date Idea Bank (Ukraine)* USD % Romanian International Bank EUR EURIBOR 6M+5% Idea Bank (Belarus)* EUR LIBOR 12M+6% Idea Bank (Belarus) EUR % *subordinated loan 14. Information on guarantees and sureties granted and received, in particular guarantees and sureties granted to the Company related entities. The following table presents information on guarantees and sureties granted in Issue date Principal Currency Value Getin Holding Termination date

14 Idea Bank (Ukraine) EUR Idea Bank (Ukraine) USD Romanian International Bank EUR Idea Investment (Romania) PLN Romanian International Bank Getin Noble Bank (Guarantor) EUR Getin Holding PLN Idea Bank (Russia) Getin Holding RUB , Loan and credit facility agreements concluded and terminated in The following table presents information on loans and credit facilities taken in Release date Lender Currency Contractual principal Interest rate Maturity date Getin International S.A. PLN WIBOR 6M+1% Getin International PLN S.a r.l WIBOR 6M+1% Getin International PLN S.a r.l WIBOR 6M+1% Getin International PLN S.a r.l WIBOR 6M+1% Getin International PLN S.a r.l WIBOR 6M+1% Getin International S.A. PLN WIBOR 6M+1% Getin International PLN S.a r.l WIBOR 6M+1% Getin International S.A. PLN WIBOR 6M+1% Getin Noble Bank S.A. PLN WIBOR 3M+2% Idea Bank S.A. PLN WIBOR 3M+4% Getin International S.A. PLN WIBOR 6M+1% Idea Bank S.A. PLN WIBOR 3M+2.6% Getin International S.A. PLN WIBOR 6M+1% Getin International PLN S.a r.l WIBOR 6M+1% List of pending legal or arbitration proceedings before court or relevant arbitration court or proceedings before public administration authorities. As of , there was no single proceeding concerning the Issuer's or its subsidiaries' liabilities or claims of value at least equal to 10% of the Company s equity. Neither were there pending any proceedings concerning the Company's or its subsidiaries' liabilities or claims of total value of at least 10% of the Issuer s equity.

15 17. Description of the way the Company used proceeds from issuance of securities. In the reporting period, the Company raised funds from 54,326 P-series shares issued within the Management Stock Option Programme, launched by Getin Holding in 2011 and carried out under the Management Stock Option Regulations approved by the Supervisory Board and published in Current Report number 57/2011 on The proceeds of PLN 54 thousand were earmarked for the Company s current operations. 18. Explanation of the differences between the financial results disclosed in the annual report and the published financial forecasts. The Company publishes no financial forecasts. 19. Financial resources management. In 2014, the Company managed its financial resources in a reasonable way. Funds were earmarked for capital investment in line with the Company's business profile. Any surplus funds were invested in bank deposits. 20. Changes in the core principles of the Company and Capital Group management. Besides the changes related to the Company spin-off reported in detail in section 3 hereof, no amendments were made to the principles of the Company or its Capital Group management. 21. Characteristics of external and internal factors significant to the Company growth and description of the Company growth opportunities together with evaluation of probability of accomplishment of its investment plans, including capital investment, as compared to the Company's resources, including possible changes in the structure of financing this growth. The Capital Group companies will be affected by macroeconomic factors, such as the GDP, inflation rate, interest and F/X rates, as well as the unemployment rate, household incomes, financial standing of companies and the company insolvency rate together with several other factors that have material impact on the demand of companies that are clients of the Group companies the Group's profit margin. It in turn materially affects financial and operational results of both the Company and of other Capital Group entities, as well as their financial standing and growth prospects. The Company's main goal is to maximize the return on investment while maintaining moderate investment risk level. Therefore the strategy adopted by Getin Holding assumes carrying out parallel activities aiming at the Group's growth by increasing effectiveness of the Capital Group companies and minimising their risk, as well as continuation of the investment policy. In the event when any attractive offers emerge in the market, the Company intends to continue its investment strategy both within and outside the Group. 22. Total number and face value of all the Company s shares held by members of the managing and supervisory board members of Getin Holding as of Number of shares held Person Position As of Increases Decreases As of Management Board members

16 Number of shares held Person Position As of Increases Decreases As of Piotr Kaczmarek Radosław Boniecki Rafał Juszczak Izabela Lubczyńska František Babický President of the Management Board Vice President of the Management Board Vice President of the Management Board Member of the Management Board Member of the Management Board Supervisory Board members Leszek Czarnecki Chairman of the Supervisory Board ) ) ) ) Remigiusz Baliński Marek Grzegorzewicz Andrzej Błażejewski Longin Kula Vice-Chairman of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board Member of the Supervisory Board ) Shares held by Mr. Leszek Czarnecki directly. 2) Shares held by Mr. Leszek Czarnecki indirectly. 23. Information on agreements being known to the Company (including the ones concluded after the balance sheet date) which may result in future changes to the proportions of the shares held by the current shareholders and bond holders. N/A

17 24. Agreements concluded by the Company with its managers providing for compensations in case of their resignation or dismissal without presenting material grounds or their recalling or dismissal in consequence of the Company's merger or take-over. A managerial contract concluded by the Company and Mr. Piotr Kaczmarek holding the function of Management Board President since provides that in the event of Mr. Piotr Kaczmarek's recalling from the position of Management Board President before 31 December 2016 for cause other than circumstances set out in the contract that justify immediate termination of the contract, Mr. Piotr Kaczmarek shall be eligible to fixed remuneration for the period of 6 months following such termination date. A managerial contract concluded by the Company and Mr. Radosław Boniecki holding the function of the Management Board Vice-President since provides that in the event of the contract termination before the end of its term for reasons other than gross negligence of his duties, the Company shall pay Mr. Radosław Boniecki an additional remuneration amounting to the remuneration received and due for the period of full six months preceding such termination. A managerial contract concluded by the Company and Mr. Rafał Juszczak holding the function of the Management Board President from to , and since the function of the Management Board Vice-President provides that in the event of the contract termination before the end of its term for reasons other than gross negligence of his duties, the Company shall pay Mr. Rafał Juszczak an additional remuneration amounting to the remuneration received and due for the period of full six months preceding such termination.

18 25. Remuneration, bonuses, benefits, including incentives and the Company s capital related bonuses disbursed or due to the members of the Management Board or Supervisory Board and information on the remuneration of the members of Company s Management Board or Supervisory Board arising from holding positions in subsidiaries governing bodies. Short-term employee benefits for Management Board of Getin Holding S.A thous thous. Piotr Kaczmarek n/a Short-term employee benefits n/a Rafał Juszczak Short-term employee benefits Radosław Boniecki Short-term employee benefits share-based payments 27 Izabela Lubczyńska 540 n/a Short-term employee benefits 540 n/a Frantisek Babicky 619 n/a Short-term employee benefits 619 n/a Katarzyna Beuch n/a 123 Short-term employee benefits n/a 123 Robert Działak n/a 48 Short-term employee benefits n/a 48 Bartosz Chytła n/a 464 Short-term employee benefits n/a 464 Total Short-term employee benefits for the Supervisory Board of Getin Holding S.A thous thous. Leszek Czarnecki n/a 500 Short-term employee benefits n/a 0 Share-based payments n/a 500 Remigiusz Baliński Short-term employee benefits Share-based payments n/a 91 Marek Grzegorzewicz Short-term employee benefits Share-based payments n/a 7 Longin Kula Short-term employee benefits Share-based payments n/a 7 Andrzej Błażejewski Short-term employee benefits Share-based payments n/a 11 Total

19 Benefits for the Members of Management Board and Supervisory Board of Getin Holding S.A. due to holding their positions in the bodies of subsidiaries thous thous. Leszek Czarnecki n/a Remigiusz Baliński 362 n/a Marek Grzegorzewicz 6 n/a Rafał Juszczak 6 n/a Radosław Boniecki 608 n/a 26. Information on share incentive plan control system. In 2014, the Company closed the Management Stock Options Programme that allowed the Company's and its subsidiaries' management to subscribe for shares issued by the Company. Shares were awarded on conditions set forth in the programme regulations adopted by the Company's Supervisory Board. The programme was supervised by the Company's Management Board. The Issuer reported the end of the Management Stock Options Programme in Current Report No. 63/2014 dated Information on conclusion of an agreement with an entity authorised to audit financial reports. An agreement with Deloitte Polska Sp. z o.o. Sp. k. based in Warsaw concluded on for auditing and review of financial statements and consolidated financial statements of Getin Holding S.A. for The agreement was concluded for the time of auditing statements for Due remuneration Audit and review of financial statements and consolidated financial statements Other services Total

20 Piotr Kaczmarek President of the Management Board Radosław Boniecki Vice President of the Management Board. Rafał Juszczak Vice President of the Management Board. Izabela Lubczyńska Member of the Management Board František Babický Member of the Management Board Wrocław, dated February 23 rd, 2015