Fabrity Holding S.A

Management Reports • Oct 17, 2019

Information of the Company's Management Board inresponse to investors' questions regarding the project of obtaining alicense EMI electronic money institutions

The Management Board of Aforti Holding S.A. with itsregistered office in Warsaw (hereinafter: "the Company", "the Issuer"),in connection with numerous questions from Shareholders and Investorsaddressed to the Company regarding the project to obtain an EMI (E-MoneyInstitution) electronic money institution license by the Issuer'ssubsidiary: Aforti, UAB with its registered office in Lithuania(hereinafter: "Aforti, UAB", "Subsidiary"), wanting to maintain theprinciple of equal access to information for all Investors, herebyprovides answers regarding the current status of the above. project.

Aforti, UAB was established and registered in Julythis year. Also in July 2019, the Subsidiary submitted an applicationfor the licensing of an EMI (E-Money Institution) electronic moneyinstitution to the Lithuanian financial market supervision institution.The issuer informed about these events in current ESPI reports: No.16/2019 of 16.07.2019 and 17/2019 of 7/26/2019.

Then in September, the Subsidiary responded to thequestions to the application, received from Lietuvos Bankas (Bank ofLithuania) - the institution supervising the Lithuanian financialmarket. An important event in this period was also the appointment ofthe new board of Aforti, UAB. It was headed by Mr. Piotr Królikowski,who has over 20 years of professional experience in banking andfinancial services. He started his professional career at Bank AustriaCreditanstalt (Polska) S.A., continued at Svenska Handelsbanken AB, BankMillennium S.A., Deutsche Bank PBC S.A. He was also the Vice Presidentof the Management Board at Bank BPH and a Member of the SupervisoryBoard at BPH Asset Management. He also worked for such institutions asDeloitte, Provident Polska and SGB Bank S.A.

The following were also appointed to the new board:Mr Mateusz Niemczyk and Mr Paweł Opoka, who are also members of theIssuer's management board.

The necessity to change the first management of theSubsidiary was related to the results of activities checking the mannerin which the team performed its duties (hereinafter: "Associates"). As aresult of this verification, significant irregularities were found, inparticular in respect of compliance with the Aforti Group corporategovernance and improper conduct of the entrusted project related to theprocedure for obtaining an EMI electronic money license, including byconcealing relevant information related to the operations of theSubsidiary, which in the opinion of the Issuer's Management Board can beregarded as acting to the detriment of the Issuer being the soleshareholder of the Subsidiary, to the detriment of the indicatedSubsidiary, as well as the entire Capital Group of the Issuer byreducing its reputation. In connection with the discovery of the aboveirregularities, the Issuer's Management Board on 27.08.2019 decided toterminate, by agreement of the parties, contracts concluded withAssociates.

Due to the negative actions of former Associates, theManagement Board addressed to these persons a request for the return offunds improperly collected by them in the amount of approx. 500thousand. zlotys. It should also be mentioned that former Associatesexposed the Subsidiary to a potential loss in the estimated amount ofapproximately PLN 140,000. euro. In the event of further actions of itsformer Associates that will harm the good name of the Company, theManagement Board will consider bringing the case to court.

Further work related to the preparation for launchingoperations of Aforti, UAB is being carried out according to theschedule. Currently, in Lithuania, recruitment is underway for fivenewly created positions in the area of: contact with the regulator andsupervisory authorities of the Lithuanian financial market, monitoringof counteracting money laundering transactions (AML), IT system securitymanagement, compliance and management of the compliance area, as well assupport for employed managers. The Management Board of Aforti, UAB alsobegan negotiations related to the selection of a registered office thatmeets the conditions relevant to the planned operations of theSubsidiary. Work is also underway to adapt the IT infrastructure ownedby the Aforti Group to the requirements of the EMI license. The processof appropriate adaptation of IT systems and programs, selection ofsuppliers and extension of the programming base is underway.

At the same time, talks are underway to meet thecapital requirements related to EMI.

This is related to the main purpose of the EGMconvened by the Issuer's Management Board, which will take place onOctober 22 this year. which is the planned issue of the Issuer's shares.

The Issuer's Management Board would like to emphasizethat the process of obtaining an EMI institution license is currentlycarried out by a qualified and experienced team. With the change of themanagement of the Subsidiary, the implementation of the project gainedthe right pace.

In the opinion of the Company's Management Board, thepublication of this announcement will allow investors and Shareholdersof the Company to obtain a more complete picture of the project. Thisshould also translate into a better understanding by the Company'sStakeholders of the processes necessary for the entry of the AfortiGroup into further foreign markets, in accordance with the adopteddevelopment strategy of the Group.

Legal basis: Article 17 para. 1 MAR - confidentialinformation