1. 1 The Israel Business Conference, December 2010 POLAND of Opportunities Polish Privatisation Programme POLAND of Opportunities Polish Privatisation Programme

2. Location: Central Europe Capital: Warsaw Population: 38.1 million Currency: złoty (PLN) Member of the European Union since 2004 Size: 8 th largest economy in the EU, 21 st largest economy globally (c,d) GDP growth (Q3 of 2010): 4.2 % (a) Unemployment rate (Q3 of 2010): 11.5 % (a) Inflation rate (Q3 of 2010): 2.2 (a) FDI inflow (Jan.-Sept. 2010): EUR 5.3 bn (b) 2 Poland in a snapshot Source: (a) Polish Central Statistical Office (b) National Bank of Poland (c) Eurostat (b) IMF GDP growth in Q3 2010 in selected EU countries (a) (c)

3. September 2009 3 During the crisis year 2009 Poland was the only country in EU to avoid recession Poland – attractive direction for investors  In the City of London Corporation “2010 World Financial Centers” ranking, in the category ‘regional financial centre’ Warsaw ranked higher than cities such as Moscow, Budapest and Athens.  WSE ranks 1st in the CEE region in terms of the number of listed foreign issuers (28).  Warsaw is the sole city in the region which was listed in the TOP 20 most favourable locations for investors (U.N. World Investment Prospectus Survey 2010.12); it also ranked 2nd in the 2009 European Cities Monitor (Cushman&Wakefield) ranking.

4. 4 Media about Polish Privatisation (1) ‘ The country has become the EU’s largest building site, thanks in large part to the €67 bn in structural funds flowing into Poland during the 2007-2013 budget cyckle. The signs of activity are visible everywhere, from the south-easten border with Ukraine, site of the future A4 highway linking the region to Germany, to the outskirts of Warsaw, where a new bridge is being thrown across the Vistula River ’ Financial Times, Buoyant future hangs in the balance, November 2010 ‘Last year, Poland’s decision to cut its income – tax rate, and the resultant economic stimulus, helped it become the only European Union country to dodge recession. But it also sowed the seeds of a ballonooning deficit.’ The Wall Street Journal, Poland’s Treasury seeks to Rebrand Warsaw, October 2010

5. September 2009 5 ‘Die Aktienverkäufe in Warschau und die weiter steigende Kurse waren nur möglich, weil in Polen ein Aktienfieber unter den Privatanleger augebrochen ist und gleichzeitig internationale Anleger das Land entdeckt haben. Dies geschah, nachdem Polen im Jahr 2009 ein einziges Land in Europa ein nennenswertes Wirtschaftswachstum von 1,7 Prozent aufweisen konnte. Analysten erwarten auch für das kommende Jahr eine Fortsetzung mit Wachstumsraten von möglicherweise mehr als 4 Prozent’’ Frankfurter Allgemeine Zeitung,Polen sieht sich als China Europas, November 2010 ‘Poland has been one of the bright spot in European ECM in 2010, with the country seemingly able to withstand to volatile secondary markets that have let to many deals being cancelled across the rest of EMEA’ International Financing Review, Poland pays up, November 2010 Media about Polish Privatisation (2 )

6. 66 Upcoming events in Poland – the chance of success EU funds inflow Euro 2012 tournament Infrastructure spending EUR adoption Goverment stimulus ► Accelerates spending and investment decisions ► Huge spending plans until 2012:9 (expressways, highways,trains) for roads EUR 30 bn (b) for rail EUR 7.5 bn (c) ► Increased currency stability ► Balanced guarantee-based package worth EUR 22.7 bn ► EUR 67 bn (a) up to 2013 Source: a) National Cohesion Strategy, p. 116 b) Ministry of Infrastructure – the Programme for National Roads Construction 2008-2012 c) Ministry of Infrastructure – Master Plan for the Polish Rail Transport until 2030 – Scenario 3 (optimistic) PLN/EUR: PLN 4.02 as of 2nd December, 2010

7. 7 Privatisation Plan for the years 2008-2011 Unique investment opportunities

8. Privatisation Plan – key facts The Privatisation Plan for 2008-2011 fulfills Prime Minister Donald Tusk’s November 2007 inaugural commitment to increase the pace of privatisation Prepared by Minister of Treasury Aleksander Grad, the 4-year privatisation acceleration program was adopted by the Council of Ministers on April 22, 2008 One of the most ambitious privatisation plans in the world:  offers flexible, various privatisation procedures adapted to specific company characteristics  envisages privatisation of 802 state companies from over 30 business sectors and producing revenues of PLN 37 bn (USD 13.1 bn*). At the moment revenues have reached PLN 33.5 bn (USD 11.7 bn*) PLN/USD : average yearly exchange rate for 2008: PLN 2.41 and for 2009: PLN 3.12. For 2010 exchange rate set at PLN 2.97 * Calculation based on average exchange rate for 2008,2009 & 2010 What: When: 8

9. Privatisation Plan – key facts  bn (USD 13.1 bn*). At the moment revenues have reached PLN 33.5 bn (USD 11.7 bn*) Privatisation in figures (2010 YTD):  398 projects are being carried out  361 projects have been completed so far  privatisation revenues in 2010 PLN 26 bn (USD 8.75 bn) PLN/USD : average yearly exchange rate for 2008: PLN 2.41 and for 2009: PLN 3.12. For 2010 exchange rate set at PLN 2.97 * Calculation based on average exchange rate for 2008,2009 & 2010 Status: 9  Significant decrease of government presence in the economy  (The government‘s aim is to reach the level of 10% of public sector contribution to Polish economy) Result: > 75% Public sector contribution to Polish GDP (a)

10. 10 Privatisation plan - sector opportunities Privatisation is being implemented in accordance with the government’s plans and strategies for each sector Investment opportunities extend to a variety of companies:  selected for privatisation from over 30 sectors  located throughout the country  with different shareholding structures Wide variety of companies Power/EnergyChemicals Machines Transport Sea Transport/Ports Foods Animal and Plant Husbandry FurnitureMining - Coal CommerceTelecommunications Shipbuilding Electronics Electrical Engineering Freight and ForwardingRock Based Raw Materials Construction and MaterialsDistilleries Agriculture Agricultural Products Timber and Paper Clothing and Clothing Materials Printing and Publishing Health ResortsTourismPharmaceuticals Service CompaniesEnterprise AgenciesOthers FinancialMining -Lignite MetallurgyDefense Petroleum Metals

11. 11 Privatisation revenues Privatisation revenues are allocated to 1991-19961997-2006 2007-to date *According to Commercialisation and Privatisation Act PLN/USD: PLN 3.07 as of 2nd December, 2010

12. 12 Privatisation model - Trade sale

13. 13 Trade sale – overview Addressed to trade investors as well as financial investors  the bulk of privatisation projects concern the following industries transport (53), machines (34), construction (24), food-procesing (24) and chemicals (10)  most companies are intended for privatisation in the central part of Poland (15), and in the Silesia region (9)  since November 2007, most privatisation projects have been implemented through negotiations (29 projects), public auction (24), public tender (22)  public auction is the fastest privatisation procedure 13 PLN/USD: PLN 3.07 as of 2 nd December, 2010 Publicly announced offer Public tender Negotiations undertaken on the basis of a public invitation Admission of the bid submitted by an entity announcing the call Publicly announced auction Trade sale: privatisation procedures

14. 14 Trade investors taking part in Privatisation Plan Between April 2008 and October 2010 investors from 13 countries acquired shares in 30 companies for the total amount of over PLN 2 billion USA: 3 transactions totalling USD 0.06 million) CAN:: 1 transaction worth USD 6.5 million Source: a) Ministry of Treasury, transactions completed between 22 April 2008 and 31 August 2010 (excluding transactions concluded in the capital markets) PLN/USD: PLN 3.07 as of 2 nd December, 2010 ISR: 6 transactions worth (USD 25.7 million)

15. Pharmaceutics Examples of trade sale transactions (1) 15 PGE Zespół Elektrociepłowni Bydgoszcz (power plant) Transaction worth: PLN 959 013, 36 (USD 312 382.08)* PGE Elektrociepłownia Gorzów (power plant) Transaction worth: PLN 10 585 157, 37 (USD 3 447 933.99)* Energy Sold to a main shareholder PGE S.A. PLN/USD: PLN 3.07 as of 2nd December, 2010 Polfa Pabianice Sold to Zakład Farmaceutyczny Adamed Pharma (Polish pharmaceutical company) Real Estate Future opportunities in sectors: Health Resorts Chemicals Machines Road transport

16. Examples of trade sale transations (2) September 2009 16 Road transport PKS- passenger transportation companies 6 transactions totalling: PLN 77 million (USD 25 million)* Sold to Israeli trade investor- Mobilis (subsidiary of Egged) Egged, the leading public transport operator in Israel, established in January 1933, when four public transport companies were merged into on. Egged provides about 55% of public transport services throughout the country.

17. 17 Privatisation model – Capital market

18. 18 PLN/USD: PLN 3.07 as of 2nd December, 2010 Initial Public Offering ( IPO) Secondary Offering (Follow-on Offering) Accelerated Book- Building(ABB) Transactions on capital markets (main market) DateCompanyDeal typeSector Size USD m Apr 2010PZUIPOInsurance2,628 Nov 2004PKO BPIPOBanking2,476 Oct 2009PGEIPOEnergy1,944 Jun 2010TauronIPOEnergy1,372 Nov 2010PZUABBInsurance1,336 Oct 2010PGEABBEnergy1,297 Sep 2005PGNiGIPOOil & Gas874 Nov 1999PKN OrlenIPOOil & Gas801 Largest privatisations in Poland conducted through WSE (a) * since November 2007 till December 2010 Transactions on capital markets – overview Rights issue Note: Blue colour shading indicates privatisation processes concluded over the last two years.

19. 19 IPO of the leading thermal coal miner ($166m). Reopening of IPO market in Europe IPO of a leading energy group ($830m), despite challenging market conditions IPO of the largest Polish energy group ( $2.1bn). Ranked as the largest IPO in Europe for 2009. Rights issue of PKO BP, the largest Polish bank by assets ($1.6bn). Opening of rights issue market for financial institutions in Poland Nov-08 Jun-09 Nov-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Aug-10 Oct-10 Nov-10 ABB of the leading global copper producer: 10% of MoT shares ($723m) Offered to US investors Completion of privatisation through sale of 46.7% shares through ABB ($395m) Sale of 10% of shares of leading oil&gas company through ABB on WSE ($142m) ABB of a 42% stake sold by the MoT and state bank BGK ($119m) IPO of Poland’s leading insurance company ($2.7bn ). The largest IPO in Europe since 2007. Largest ever IPO in CEE region Second stage of privatisation. Sale of 16.05% MoT shares on the WSE through Fully Marketed Offer ($379m ) A 51.6% stake of the second largest utility company in Poland was floated on the WSE on 30 June ($1.3 bn) The remaining stake in TP S.A., a telecommunications company was sold on the WSE on 5 August 2010 ($292m*) *PLN/USD: PLN 2.83 as of 19 October, 2010 Sale of 10% of shares (almost $1.4 bn). The biggest ABB transaction in the history of capital markets in Poland IPO of the Warsaw Stock Exchange – leading European stock exchange. First listing- Nov. 9th. ($424 million) Key transactions on capital markets

20. 20 Privatisation - future opportunities on capital market PZU – insurance Poland's largest insurance group; leading company providing life and non-life insurance. The Company was floated on the Warsaw Stock Exchange in May 2010. It was the 2nd largest IPO in Europe in 2010 YTD PKO BP Bank the leader of the Polish banking sector. In addition to its core banking activity PKO BP offers specialised services, i.a. various financial products, leasing funds, investment fund units, electronic payment services – it was listed on the WSE in 2004 BGZ Bank one of the leading banks on the Polish market, providing services for the agriculture/farming and food processing sector, as well as for inhabitants of rural areas and small towns. IPO of the company is planned for 2011-2012 DIPSERVICE, TON AGRO – real estate lease of properties from companies’ portfolio, lease of office space in the Warsaw area; The companies also acquire properties and prepare them for commercial investment purposes.. It is expected that the new real estate holding, comprising i.a. these companies will make a debut on the WSE in 2011 LOTOS- petroleum concern activity in the field of crude oil extraction and processing as well as distribution and sale of wide range of petroleum products. The deadline for submitting written replies expires on 4 February 2011

21. 21 Warsaw as a regional Financial Center of Central – Eastern Europe Warsaw

22. 22 Warsaw - Regional Financial Centre (a) Based on FT Global 500 (b) 2009 European Cities Monitor report by Cushman & Wakefield (c) OECD Factbook 2009 (d) National Bank of Poland (e) Ministry of Economy & PAIiIZ forecasts  Warsaw is Poland’s business capital and one of the largest and most important urban centers in Central and Eastern Europe  As stated in 2010 World Financial Centers ranking prepared by City of London Corporation, Warsaw has surpassed cities like Moscow, Budapest and Athens as a regional financial centre  Viewed as regional safe haven Poland maintained high level of FDI inflow, which in 2009 amounted to EUR 8.4bn (d), the highest in CEE. In H2 2010, the inflow of FDIs exceeded EUR 5.3bn (d). It is forecasted that the FDI inflow in the whole of 2010 will exceed EUR 10bn (e). Number of new companies to establish their presence in the cities within the next five years (b) Foreign direct investment (FDI) for the period of 1998-2007 (in USD billion*) (c) PLN/USD: PLN 3.07 as of 2 nd December, 2010  Owing among others to the privatisation activities of the Ministry of Treasury, the Warsaw Stock Exchange is doing well, and therefore the largest global financial institutions cannot afford not to have a local office in Warsaw. J.P. Morgan, HSBC, BNP Paribas, Credit Suisse, UBS, Deutsche Bank, Master Card, Citigroup, Nomura, ING, Merrill Lynch, Goldman Sachs, and Morgan Stanley.

23. 23 Foreign companies & foreign investors at Warsaw Stock Exchange ( a) Investors in stock exchange turnover H1 2010 - presentation  Warsaw Stock Exchange lists many companies from the CEE region, such as:  Kernel (Ukraine's largest vertically integrated agro-industrial company)  New World Resources (producer of coal, the largest hard coal mining company in the Czech Republic)  Astarta Holding (an agro-industrial holding and one of the leaders of the Ukrainian sugar sector)  CEZ (leader on the Central and Southeastern European electricity market)  Asseco Slovakia (co-founder of international Asseco Group, the fifth largest IT Group in Europe) Foreign companies Foreign investors Break-down of equity turnover at WSE (in %) (a)

24.  Currently WSE has 28 domestic & 20 foreign Exchange Members including Credit Suisse, Goldman Sachs, HSBC Bank, J.P Morgan, Merrill Lynch, Societe Generale, UBS, Citigroup, Deutsche Bank (a)  Poland becomes increasingly important for the foreign financial institutions as evidenced, among others, by the following initiatives:  In May 2010 Credit Suisse re-opened its brokerage office in Warsaw  Goldman Sachs plans to open its office in Warsaw in the second half of 2010 following the motion approval by FSA (Financial Services Authority)  Citigroup opened an investment banking office in May 2010  In May 2010 UBS announced plans to strengthen its presence in Poland by expanding investment banking operations  Morgan Stanley announced plans to open an office in Warsaw by the end of 2010 once regulatory approvals are secured. On 12 August 2010 Morgan Stanley became the latest member of the WSE 24 WSE is attractive for the world’s top tier international financial institutions (a) WSE internet portal, 28 September 2010 24 Global investment banks present in Warsaw:

25. 25 Investor Relations & Contact information Ministry of Treasury of the Republic of Poland Tel. (+48 22) 695 90 01 Tel. (+48 22) 695 90 02 Fax (+48 22) 629 98 38 E-mail: investor@msp.gov.pl This presentation contains only introductory information which does not constitute any invitation or offer to sell, invest or trade, nor does it constitute any invitation to place any offer to purchase, invest or trade the securities. The information presented herein is up to date as on 8December 2010. This presentation can be distributed only as a complete document. The Ministry of Treasury of the Republic of Poland does not recommend services of any organisation using this document as part of their informational and advertising activities. Investor Relations website Investor Relations Centre www.msp.gov.pl/en