Letter from the Chairman of the Supervisory Board

Dear Sir or Madam,

It past two years this June since I was appointed to the Supervisory Board of the Warsaw Stock Exchange. I have been Chairman of the Board since July 2018. This was a busy time for the Company and its Supervisory Board. In 2018, the Exchange Supervisory Board actively supported the Management Board by a close analysis of its activity and took part in key decisions.

New responsibilities and challenges we faced in 2018 and those we face now will set the course for the Exchange in many years to come. The strategy update #GPW2022, approved by the Management Board and the Supervisory Board, is a cornerstone. I believe that the priority strategic initiatives defined by the Exchange Management Board will provide the expected results, contributing to the value and position of GPW both locally and internationally. On the international level, Poland was promoted from Emerging Markets to Developed Markets by the global rating agency FTSE Russell in 2018.

The Exchange Supervisory Board focused in 2018 both on key projects of special long-term relevance, as well as people. The Exchange Supervisory Board decided on 12 June 2018 to appoint new members, Izabela Olszewska and Piotr Borowski, to the GPW Management Board, acknowledging the contribution of long-time Exchange employees to corporate value creation. It is important to note that the Exchange Management Board was appointed very efficiently. I believe that a strong management team comprised of highly qualified managers is a key to success in business.

The challenges faced by the Exchange Supervisory Board include regulatory issues. In 2018, the Exchange Supervisory Board supervised the implementation of new regulations including MiFID 2, MiFIR and GDPR. This is an issue of special relevance for the entire GPW Group. The capital market is broadly regulated by national and EU law and may be subject to stricter supervision.

The Exchange Supervisory Board was responsible for the selection of an audit firm in 2018 in accordance with the applicable regulations. The Exchange Supervisory Board decided that BDO PL sp. z o.o. s.k. will audit the separate financial statements of GPW and the consolidated financial statements of the GPW Group for 2018-2020.

In 2018, the Exchange Supervisory Board focused on safety of the regulated market. The official list of circumstances which the Exchange may consider to be in conflict with the public nature of trading on the exchange took effect in January 2019 based on a joint position of the Exchange Supervisory Board and the GPW Management Board. The new criteria of admission of shares to trading on the regulated market were imposed with a view to greater safety of trading on the markets operated by GPW.

We face many challenges and we realise that capital markets operate under difficult conditions. The GPW Management Board is working to diversify our business with all the active and planned strategic initiatives. We are optimistic about Employee Capital Plans, which will have a positive impact on the capital market by driving demand for shares and bonds listed on the Warsaw Stock Exchange. A strong base of domestic investors will attract even more foreign investors to Poland. The Exchange Management Board focuses on making GPW more attractive to investors by introducing new tick sizes for all shares listed on GPW in 2019, ensuring more precise buy and ask prices of securities, a more precise valuation of companies and smoother trading, as well as harmonisation with MiFID 2 and the standards of trading on developed markets. I expect that the updated strategy #GPW2020 and prudent initiatives of the Management Board supported by the Exchange Supervisory Board will ensure further growth of the GPW Group.

I wish to thank the GPW Management Board and the Members of the Exchange Supervisory Board for their hard work and successful efforts in 2018. I wish in particular to thank Exchange employees. The Exchange is not just a regular company for them. Their work is their mission, which may require a sacrifice but always provides much professional satisfaction. I thank the shareholders of the Exchange for their confidence throughout the year.

Yours sincerely,
Jakub Modrzejewski, Prezes Rady Nadzorczej