77. Events after the reporting period

1. On 9 January 2016, PKO Towarzystwo Ubezpieczeń SA launched the first offer of property insurance for individual clients of PKO Bank Polski SA, who are credit card holders. The proposed insurance provides protection in case of loss of income sources or hospital treatment of the insured person resulting from an accident. On 13 February 2016, the company began selling insurance against loss of income for cash loans borrowers in PKO Bank Polski SA, and on 15 February 2016, the sale of real estate insurance, chattels, LI in private life, assistance and loss of income for the clients of PKO Bank Polski SA and PKO Bank Hipoteczny SA, taking out mortgages.
2. On 18 January 2016, PKO Bank Polski SA took part in debt collection activities (transfer of ownership of the collateral) another batch of FERRUM SA shares, increasing its stake in the share capital and votes at the general meeting of the company from 20.97% to 22.14%
3. On 20 January 2016 the Extraordinary General Meeting of PKO Towarzystwo Ubezpieczeń SA passed a resolution to increase the Company’s share capital through the subscription by PKO Bank Polski SA, 5000 shares with carrying value of PLN 1000 each and issue price of PLN 4 400 each ie. For a total amount equal to 22 000 thousand PLN. The above mentioned increase requires the approval of the Financial Supervisory Authority (amendment of the statue) and registration in the National Court Register.
4. On 26 January 2016 and 25 February 2016, PKO Bank Hipoteczny SA finalized the subsequent transfers of mortgage loans from PKO Bank Polski SA for a total amount of PLN 756 744 thousand.
5. On 29 January 2016, the Management Board accepted the conditions of the Bank’s participation in the transaction of acquisition of Visa Europe Limited by Visa Inc. (“the Transaction”) presented to the Bank by Visa Europe Limited, according to which the total initially estimated share of the Bank in proceeds of the Transaction (excluding the potential deferred payment of “earn-out”) is expected to amount EUR 88 875 079 which is equivalent to PLN 394 649 788 (according to the NBP average exchange rate of 29 January 2016), including EUR 66 167 319 in cash which is equivalent to PLN 293 815 980 (translated using the NBP average exchange rate of 29 January 2016) and EUR 22 707 761 in shares of Visa Inc., which is the equivalent of PLN 100 833 813 (translated using the NBP average exchange rate of 29 January 2016) (the amount after rounding), provided that above mentioned amounts are not final and may change due to the objection submitted by the Bank to the proposed method of determining the Bank’s participation in the settlement of the Transaction or if any objections of remaining members of Visa Europe Limited, costs of the Transaction, as well as in the cases indicated in the documentation relating to the Transaction (the so-called “leakage”). The amounts due to the Bank should settled by 30 June 2016.
   In accordance with the Transaction framework, it is expected to has possible additional deferred payment of “earn-out” payable in cash after sixteen quarters from the date of the Transaction settlement is expected, but its real value is currently not yet possible to determine.
   The transaction depends on the receiving of applicable regulatory approvals, and its finalization is expected in the second quarter of 2016 years.
6. On 29 January 2016, the Bank concluded a guarantee agreement with the contractor (“Guarantor”) providing unfunded credit protection in respect of the portfolio of selected corporate credit claims of the Bank, in accordance with CRR Regulation (respectively the “Guarantee” and “Guarantee Agreement”). The value of the debt portfolio of the Bank covered by the Guarantee (Guarantee Amount) amounts PLN 5 034 581 thousand. The maximum duration of the warranty is 36 months, the Bank is entitled to terminate the guarantee before the expiry of its validity period. Guarantee Agreement foresees penalties, that may be due to the Guarantor from PKO Bank Polski in case of infringement of the obligations of PKO Bank Polski under the Guarantee Agreement. The total maximum value of these contractual penalties can not exceed the amount of PLN 24 000 thousand. The agreement does not preclude the possibility of pursuing the claim that exceeds the amount of contractual penalties.
   On 29 February 2016 the Bank concluded a guarantee agreement with the contractor (“Guarantor”) providing unfunded credit protection in respect of the portfolio of selected corporate credit claims of the Bank, in accordance with CRR Regulation (respectively the “Guarantee” and “Guarantee Agreement”). The value of the debt portfolio of the Bank covered by the Guarantee (Guarantee Amount) amounts PLN 1 203 771 thousand. The maximum duration of the warranty is 36 months, the Bank is entitled to terminate the guarantee before the expiry of its validity period. Guarantee Agreement foresees penalties, that may be due to the Guarantor from PKO Bank Polski in case of infringement of the obligations of PKO Bank Polski under the Guarantee Agreement. The total maximum amount of these penalties cannot exceed the amount of PLN 26 000 thousand. The agreement does not preclude the possibility of pursuing the claim that exceeds the amount of contractual penalties.
   For the period of last 12 months the total involvement of the Bank due to the agreements concluded by the Bank with the Contractor and its subordinated entities amounts to PLN 6 238 352 thousand. The Gurantee Agreements are the most substantial part of the agreements concluded by the Bank with the Contractor or its subordinated liabilities during last 12 months.
7. On 29 January 2016, the Board of Powszechna Kasa Oszczednosci Banku Polskiego Spolki Akcyjnej pursuant to art. 399 § 1 and in connection with the submitted by a shareholder pursuant to art. 400 § 1 of the Commercial Companies Code requesting to convene the Extraordinary General Meeting of PKO Bank Polski SA, announced the convening of the Extraordinary General Meeting of PKO Bank Polski on 25 February 2016 at 10.00 in Warsaw at ul. Puławska 15.
   On 25 February 2016 the Extraordinary General Meeting of the Bank on the basis of art. 385 § 1 of the Commercial Companies Code, dismissed from the Supervisory Board: Jerzy Góra, Mirosław Czekaj, Piotr Marczak, Marek Mroczkowski, Krzysztof Kilan and Zofia Dzik. In addition, the Extraordinary General Meeting of the Bank on the basis of art. 385 § of the Commercial Companies Code, appointed to the Supervisory Board: Mirosław Barszcz, Adam Budnikowski, Wojciech Jasiński, Andrzej Kisielewicz, Janusz Ostaszewski, Piotr Sadownik and Agnieszka Winnik-Kalemba. Treasury of the State, as the Eligible Shareholder pursuant to § 12 paragraph. 1 of the Bank Statue appointed Piotr Sadownik as a Chairman of the Supervisory Board and Agnieszka Winnik – Kalemba on the Vice-President of the Supervisory Board. In addition it adopted the proposed amendments to the Statue of Bank. (see Current Report No. 11/2016).
8. On 29 January 2016 the National Court Register recorded a decrease of the share capital of PKO BP Finat Sp. z o.o. from the amount of PLN 107 302 500 to PLN 32 202 500 through the cancellation of PLN 750 000 shares with a nominal value of PLN 100 each, belonging to the sole shareholder – PKO Bank Polski SA.
9. On 1 February 2016 the Act of 15 January 2016 on tax on certain financial institutions (Journal of Law of 2016 item 68) entered into force. Taxes are covered by domestic banks, branches of foreign banks, branches of credit institutions, cooperative credit unions (SKOK), national insurance companies, national reinsurance companies, branches of foreign insurance companies and foreign reinsurance companies, main branches of foreign insurance companies and foreign reinsurance companies, as well as lending institutions. The tax base represents the excess of the total assets of the entity (over PLN 4 billion in the case of banks, more than PLN 2 billion for insurance companies) resulting from the trial balance at the end of each month. Banks and credit unions are entitled to a reduction of the tax base, for the value of own funds, and the value of Treasury securities. In addition, banks will reduce the tax base by the value of the assets acquired from the NBP as collateral refinancing loan by the NBP. The tax rate for all taxpayers amounts to 0.0366%, and the tax is paid per month to the 25th day of the month following the month to which it relates. The tax for the first time will be paid for February 2016. The projected tax burden of the Group in respect of that tax for the year 2016 will amount monthly around PLN 77-82 million. The tax paid will not be deductible in CIT.
10. On 3 February 2016, the Extraordinary General Meeting of Shareholders of Qualia Hotel Management Sp. z o.o. and Qualia – Rezydencja Flotylla Sp. z o.o. and shareholders of a limited liability company – Pomeranka Sp. K. made resolutions concerning merger of the above mentioned companies. The merger will be accomplished through the transfer of all assets of the company Qualia-Residence Flotylla Sp z o.o. and Qualia Sp. z o.o. – Pomeranka Sp. k (as the acquired companies) to the company Qualia Hotel Management Sp. z o.o. (the acquiring company). The above mentioned merger was registered with the National Court Register on 29 February 2016.

Signatures of all Members of the Management Board of the Bank

Signature of person responsible for maintaining the books of account

01.03.2016

Danuta Szymańska

Director of the Accounting Division

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(signature)