Giełda Papierów Wartościowych w Warszawie S.A. Group (Warsaw Stock Exchange Group)

Interim Report H1 2018

Warsaw, 27 July 2018

I.	SELECTED MARKET DATA 3
II.	SELECTED FINANCIAL DATA6
III.	INFORMATION ABOUT THE GPW GROUP9
	1. INFORMATION ABOUT THE GROUP 9 1.1. Background information about the Group 9 1.2. Organisation of the Group and the effect of changes in its structure 10 1.3. Ownership 10 2. MAIN RISKS AND THREATS RELATED TO THE REMAINING MONTHS OF 2018 12 Risk factors related to the sector of the Group's business activity 12 Risk factors related to geopolitics and the global economic conditions 12 Risk factors relating to laws and regulations 12 Risk factors related to the business activity of the Group 14
IV.	FINANCIAL POSITION AND ASSETS 16
	1. SUMMARY OF RESULTS 16 2. PRESENTATION OF THE FINANCIALS 19 REVENUE 19 FINANCIAL MARKET 22 COMMODITY MARKET 27 OPERATING EXPENSES 30 FINANCIAL INCOME AND EXPENSES 34 SHARE OF PROFIT OF ASSOCIATES 35 INCOME TAX 36
V.	ATYPICAL FACTORS AND EVENTS 37
VI.	GROUP'S ASSETS AND LIABILITIES STRUCTURE 39 ASSETS 39 EQUITY AND LIABILITIES 40 CASH FLOWS 41 CAPITAL EXPENDITURE 42
VII.	RATIO ANALYSIS 43
	VIII. SEASONALITY AND CYCLICALITY OF OPERATIONS 45
IX.	OTHER INFORMATION 47
X.	APPENDICES52
	Condensed Consolidated Interim Financial Statements for the six-month period ended 30 June 2018 and the auditor's review report 52 Condensed Separate Interim Financial Statements for the six-month period ended 30 June 2018 and the auditor's review report 52

I. Selected market data¹

Capitalisation of domestic companies -Main Market (PLN bn)

Session turnover on the Main Market equities (PLN bn)

Number of companies - Main Market domestic foreign

Value of secondary offerings Main Market and NewConnect² (PLN bn) Number of new listings - Main Market transfers from NewConnect new companies on the Main Market

¹ All trading value and volume statistics presented in this Report are single-counted, unless indicated otherwise.

2 Including offerings of dual-listed companies.

³ Play Communications S.A. completed an IPO worth PLN 4.4 billion in Q3 2017.

Turnover volume - futures contracts (mn contracts)

Catalyst - value of listed non-treasury bond issues (PLN bn)⁴

404 407 408 403 403 0 100 200 300 400 500 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018

Number of companies - NewConnect

4 As of January 2018, the value of non-Treasury bonds is presented according to the new classification of bonds under MiFID II. The 2017 figures are restated under the new classification.

Turnover volume - gas (spot + forward; TWh)

Turnover volume - electricity (spot + forward; TWh)

Volume of redeemed certificates of origin of electricity from RES (TWh)

Volume of issued certificates of origin of electricity from RES (TWh)

II. Selected financial data

Operating expenses (PLN mn)

Sales revenue (PLN mn)

Operating profit (PLN mn)

EBITDA (PLN mn)

Net profit (PLN mn)

Net profit margin and EBITDA margin

Table 1: Selected data in the consolidated statement of comprehensive income under IFRS, unaudited

	Six-month period ended 30 June
	2018	2017	2018	2017
		PLN'000		EUR'000 [1]
Sales revenue	172,583	178,669	40,884	41,839
Financial market	96,635	108,123	22,892	25,319
Trading	63,000	74,812	14,924	17,519
Listing	11,759	12,412	2,786	2,907
Information services and revenue from calculation of reference rates	21,876	20,899	5,182	4,894
Commodity market	75,446	69,885	17,873	16,365
Trading	37,384	33,223	8,856	7,780
Register of certificates of origin	16,049	16,897	3,802	3,957
Clearing	21,783	19,594	5,160	4,588
Information services	230	171	54	40
Other revenue	502	661	119	155
Operating expenses	88,353	84,280	20,930	19,736
Other income	1,137	361	269	85
Impairment losses	1,851	-	438	-
Other expenses	2,495	5,282	591	1,237
Operating profit	81,021	89,468	19,193	20,951
Financial income	50,058	2,932	11,858	686
Financial expenses	4,332	10,048	1,026	2,353
Share of profit of associates	5,218	4,540	1,236	1,063
Profit before income tax	131,965	86,892	31,262	20,347
Income tax expense	24,362	17,200	5,771	4,028
Profit for the period	107,603	69,692	25,490	16,320
Basic / Diluted earnings per share[2] (PLN, EUR)	2.56	1.66	0.61	0.39
EBITDA[3]	96,938	102,885	22,964	24,093

[1] Based on the half-year average EUR/PLN exchange rate published by the National Bank of Poland (1 EUR = 4.2213 PLN in H1 2018 and 1 EUR = 4.2704 PLN in H1 2017)

[2] Based on total net profit

[3] EBITDA = operating profit + depreciation and amortisation

Source: Condensed Consolidated Interim Financial Statements, Company

Note: For some items, the sum of the amounts in the columns or lines of the tables presented in this Report may not be exactly equal to the sum presented for such columns or lines due to rounding off. Some percentages presented in the tables in this Report have also been rounded off and the sums in such tables may not be exactly equal to 100%. Percentage changes between comparable periods were calculated on the basis of the original amounts (not rounded off).

Table 2: Selected data in the consolidated statement of financial position under IFRS, unaudited

	As at
	30 June 2018	31 December 2017		30 June 2018 31 December 2017
		PLN'000		EUR'000 [1]
Non-current assets	578,568	596,354	132,650	142,980
Property, plant and equipment	108,245	110,784	24,818	26,561
Intangible assets	262,542	267,991	60,194	64,253
Investment in associates	199,929	207,389	45,838	49,723
Deferred tax assets	1,800	3,803	413	912
Available-for-sale financial assets	-	271	-	65
Financial assets measured at fair value through other comprehensive income	204	-	47	-
Prepayments	5,848	6,116	1,341	1,466
Current assets	693,410	550,699	158,981	132,034
Corporate income tax receivable	71	71	16	17
Trade and other receivables	68,509	64,096	15,707	15,367
Contract assets	1,946	-	446	-
Financial assets measured at amortised cost	110,840	-	25,413	-
Cash and cash equivalents	511,984	486,476	117,384	116,636
Other current assets	60	56	14	13
TOTAL ASSETS	1,271,978	1,147,053	291,631	275,013
Equity attributable to the shareholders of the parent entity	825,916	810,908	189,361	194,420
Non-controlling interests	583	573	134	137
Non-current liabilities	256,484	259,951	58,805	62,325
Current liabilities	188,995	75,621	43,331	18,131
TOTAL EQUITY AND LIABILITIES	1,271,978	1,147,053	291,631	275,013

[1] Based on the average EUR/PLN exchange rate of the National Bank of Poland as at 30.06.2018 (1 EUR = 4.3616 PLN) and 31.12.2017 (1 EUR = 4.1709 PLN).

Source: Condensed Consolidated Interim Financial Statements, Company

III. Information about the GPW Group

1. Information about the Group

1.1. Background information about the Group

The parent entity of the Giełda Papierów Wartościowych w Warszawie S.A. Group ("the Group", "the GPW Group") is Giełda Papierów Wartościowych w Warszawie Spółka Akcyjna ("the Warsaw Stock Exchange", "the Exchange", "GPW", "the Company" or "the parent entity") with its registered office in Warsaw, ul. Książęca 4.

The Warsaw Stock Exchange is a leading financial instruments exchange in Central and Eastern Europe (CEE)⁵ . FTSE Russell announced the upgrade of Poland from Emerging Markets to Developed Markets on 29 September 2017. The decision takes effect in September 2018. Poland has all the features of a developed market, including secure trading and post-trade services, as well as an advanced infrastructure. The decision was largely driven by the functioning and status of the Warsaw Stock Exchange. GPW uses a state-of-the-art trading system and its listed companies meet the highest standards of corporate governance and disclosure requirements. The markets operated by GPW list stocks and bonds of more than a thousand local and international issuers. The Exchange also offers trade in derivatives and structured products, as well as information services. Over 25 years of experience, high safety of trading, operational excellence and a broad range of products make GPW one of the most recognised Polish financial institutions in the world.

The GPW Group conducts activity in the following segments:

organising trade in financial instruments and conducting activities related to such trade;
organising an alternative trading system;
operating the wholesale Treasury bond market Treasury Bondspot Poland;
operating a commodity exchange;
operating a register of certificates of origin;
providing the services of trade operator and entity responsible for balancing;
operating a clearing house and settlement institution which performs the functions of an exchange clearing house for transactions in exchange commodities;
organising reference rate WIBID and WIBOR fixings;
conducting activities in capital market education, promotion and information.

Basic information about the parent entity:

Name and legal status:	Giełda Papierów Wartościowych w Warszawie Spółka
	Akcyjna
Abbreviated name:	Giełda Papierów Wartościowych w Warszawie S.A.
Registered office and address:	ul. Książęca 4, 00-498 Warszawa, Poland
Telephone number:	+48 (22) 628 32 32
Telefax number:	+48 (22) 628 17 54, +48 (22) 537 77 90
Website:	www.gpw.pl
E-mail:	[email protected]
KRS (registry number):	0000082312
REGON (statistical number):	012021984
NIP (tax identification number):	526-02-50-972

⁵ CEE – Central and Eastern Europe: Czech Republic, Hungary, Poland, Austria, Bulgaria, Romania, Slovakia, Slovenia.

1.2. Organisation of the Group and the effect of changes in its structure

As at 30 June 2018, the parent entity and four consolidated subsidiaries comprised the Giełda Papierów Wartościowych w Warszawie S.A. Group. GPW held shares in two associates. GPW sold the shares of the associate Aquis Exchange Limited in June 2018.

Figure 1 GPW Group and associates

Source: Company

The subsidiaries are consolidated using full consolidation as of the date of taking control while the associates are consolidated using equity accounting.

GPW holds 19.98% of InfoStrefa S.A. (formerly Instytut Rynku Kapitałowego WSE Research S.A.), 10% of the Ukrainian stock exchange INNEX PJSC and 1.3% of the Romanian stock exchange S.C. SIBEX – Sibiu Stock Exchange S.A. GPW has a permanent representative in London.

The Group does not hold any branches or establishments.

1.3. Ownership

As at the date of publication of this Report, the share capital of the Warsaw Stock Exchange was divided into 41,972,000 shares including 14,779,470 Series A preferred registered shares (one share gives two votes) and 27,192,530 Series B ordinary bearer shares.

As at the date of publication of this Report, according to the Company's best knowledge, the State Treasury holds 14,688,470 Series A preferred registered shares, which represent 35.00% of total shares and give 29,376,940 votes, which represents 51.76% of the total vote. The total number of votes from Series A and B shares is 56,751,470.

According to the Company's best knowledge, as at the date of publication of this Report, no shareholders other than the State Treasury held directly or indirectly at least 5% of the total vote in the parent entity. The ownership structure of material blocks of shares (i.e., more than 5%) did not change since the publication of the previous periodic report.

The table below presents GPW shares and allotment certificates held by the Company's and the Group's supervising and managing persons.

Table 3: GPW shares, allotment certificates and bonds held by the Company's and the Group's managing and supervising persons as at 30 June 2018.

	Number of shares held	Number of allotment certificates held	Number of bonds held
Exchange Management Board
Marek Dietl	-	-	-
Jacek Fotek	-	-	-
Dariusz Kułakowski	25	-	-
Exchange Supervisory Board
Jakub Modrzejewski	-	-	-
Krzysztof Kaczmarczyk	-	-	-
Bogusław Bartczak	-	-	-
Filip Paszke	-	-	-
Piotr Prażmo	-	-	-
Eugeniusz Szumiejko	-	-	-
Janusz Krawczyk	-	-	-

Source: Company

As at 30 June 2018, there were 25 shares held by the Company's and the Group's managing and supervising persons, all of which were held by GPW Management Board Member Dariusz Kułakowski.

2. Main risks and threats related to the remaining months of 2018

The operation of the Warsaw Stock Exchange and the GPW Group companies is exposed to external risks related to the market conditions, the legal and regulatory environment, as well as internal risks related to operating activities.

The risk factors presented below may impact the operation of GPW in the remaining months of 2018, however the order in which they are presented does not reflect their relative importance for the Group.

Risk factors related to the sector of the Group's business activity

The Group faces competition from other exchanges and alternative trading platforms; their entry to the Polish market may adversely impact the activity of the Group and its subsidiaries, their financial position and results of operations

The global exchange industry is strongly competitive. In the European Union, competition in the trade and post-trade sectors is amplified by legal amendments designed to harmonise legislation of the EU member states and integrate their financial markets. The GPW Group may face competition of multilateral trading facilities (MTF) and other venues of exchange and OTC trade. Their activity on the Polish market could take away part of the trading volumes handled by the platforms operated by the Group and exert additional pressures on the level of transaction fees.

Risk factors related to geopolitics and the global economic conditions

Adverse developments affecting the global economy may negatively affect the Group's business, financial condition and results of operations

The Group's business depends on conditions on the global financial markets. Economic trends in the global economy, especially in Europe and the USA, as well as the geopolitical situation in neighbouring countries impact investors' perception of risks and their activity on financial and commodity markets. As global investors evaluate geographic regions from the perspective of potential investment, their perception of Poland and GPW may decline in spite of a relatively stronger macroeconomic situation compared to other countries of the region. Less active trading by international investors on the markets operated by the GPW Group could make the markets less attractive to other market participants.

Risk factors relating to laws and regulations

Risk associated with amendments and interpretations of tax regulations

The Polish tax system is not stable. Tax regulations are frequently amended, often to the disadvantage of taxpayers. The interpretations of regulations also change frequently. Such changes may impose higher tax rates, introduce new specific legal instruments, extend the scope of taxation, and even impose new levies. Tax changes may result from the mandatory implementation of new solutions under EU law following the adoption of new or amended tax regulations. Frequent amendments of corporate tax regulations and different interpretations of tax regulations issued by different tax authorities may have an adverse impact on the GPW Group and affect its business and financial position.

The GPW Group operates in a highly regulated industry and regulatory changes may have an adverse effect on the Group's business, financial position and results of operations

The GPW Group companies operate primarily in Poland but they must comply with both national law and EU legislation. The legal system and regulatory environment can be subject to significant unanticipated changes and Polish laws and regulations may be subject to conflicting official interpretations. The capital market and the commodity market are widely subject to government regulation and increasingly strict supervision. Regulatory change may affect GPW and its subsidiaries as well as existing and prospective customers of the GPW Group's services.

The European exchange industry including the Company will be largely impacted by MiFID II and its implementing regulations

MiFID II took effect in January 2018. MiFID II modifies the detailed requirements for the provision of investment services, the organisational requirements for investment firms and trading systems, providers of market data services, and access rights of supervision authorities.

There can be no guarantee that the cost to the Company in the implementation and application of MiFID II will have no material adverse impact on the activity of the Group, its financial position and results of operations.

Amendment of regulations reducing the activity of open-ended pension funds or replacing them with other collective investment undertakings which are less active as investors, and reducing or eliminating cash flows from and to open-ended pension funds, could reduce or eliminate their investment activity on GPW

Open-ended pension funds are an important group of participants in the markets operated by the Group. As at the end of June 2018, open-ended pension funds held shares representing 21.3% of the capitalisation of domestic companies and 43.0% of shares traded on the Main Market (among shareholders holding less than 5% of the shares of a public company or classified as financial investors). Open-ended pension funds generated 4.2% of trade in shares on the GPW Main Market in Q1 2018 and ca. 4.3% of trade in shares in Q2 2018. They could also augment the risk of a large surplus of shares listed on GPW and curb the interest of other investors in such shares.

As a consequence, this could cause a decrease of trade in financial instruments including shares on GPW, a reduction of the number and value of issues of shares and bonds admitted and introduced to trading on GPW, and consequently a reduction of the Group's revenue and profit.

In July 2016, the Government published a proposal of a further reform of the pension system involving the nationalisation of a part of savings in open-ended pension funds and a transfer of 25% of liquid assets (cash, foreign stocks, bonds) to a Demographic Reserve Fund. The remaining 75% of the assets (Polish stocks) would remain in open-ended pension funds, which would eventually be transformed into investment funds. The details of the pension reform framework are still unknown. The reform was originally expected to take effect in 2018 but the deadline has been postponed.

Amendments of Polish energy laws concerning the obligation of selling electricity and natural gas on the public market could have an adverse impact on the business of the Polish Power Exchange, its financial position and results of operations

The Energy Law requires energy companies which generate electricity to sell at least 30% of electricity produced within a year among others on commodity exchanges. Energy companies trading in gas fuels are required to sell at least 55% of high-methane natural gas introduced to the transmission grid within the year on an exchange. Amendments to or cancellation of these requirements could reduce the activity of certain participants of the Polish Power Exchange, restrict the liquidity of trade in electricity and natural gas and the attractiveness of the commodity market for other participants.

Furthermore, the Energy Law requires energy companies which generate electricity and are entitled to compensation (to cover stranded costs) for early termination of long-term power and electricity contracts⁶ to sell the remaining amount of generated electricity (not covered by the 30 percent obligation) in a way that ensures equal public access to energy in an open tender on a market

⁶ Pursuant to the Act of 29 June 2007 on the terms of coverage of the cost of producers incurred due to early termination of long-term power and electricity contracts.

organised by the operator of a regulated market in Poland or on commodity exchanges. The number of entities subject to the obligation decreases with time, which could reduce their activity on the Polish Power Exchange, the liquidity of trade in electricity, and the attractiveness of the commodity market for other participants.

The Renewable Energy Sources Act, effective as of May 2015, could have an adverse impact on the business of the Polish Power Exchange, its financial position and results of operations

The Renewable Energy Sources Act of 20 February 2015 implements a new support scheme for the production of energy from renewable energy sources (RES) based on auctions, effective as of 2016. The existing system of green certificates of origin will expire on or before 31 December 2035. The support scheme may be phased out even earlier as certificates of origin are available within 15 years after the first day of power generation in an installation (confirmed with an issued certificate of origin). For RES installations which were the first to produce energy eligible for green certificates of origin (in 2005), the period of 15 years under the Act will expire in 2020, after which the existing support scheme will be gradually phased out over the years. Furthermore, the Act allows market players eligible for support under certificates of origin to move to the auction system earlier than after 15 years. Consequently, some of them may move to the auction system early (before 2020), which could affect the results of the TGE Group.

Furthermore, the Renewable Energy Sources Act limits the group of entities eligible for support under green certificates (by excluding large hydropower installations over 5 MW) and imposes restrictions on the issuance of certificates of origin for multi-fuel combustion plants.

These modifications and other provisions of the Renewable Energy Sources Act of 20 February 2015 and its implementing regulations could affect the activity of participants of the Property Rights Market and the Register of Certificates of Origin operated by the Polish Power Exchange and thus affect the results of the TGE Group.

Risk factors related to the business activity of the Group

The Company cannot control regulatory fees which represent a significant share of the Group's expenses

According to IFRIC 21, an entity recognises a liability for fees due to PFSA at the date of the obligating event. The obligating event is the fact of carrying out a business subject to fees due to PFSA as at 1 January of each year. Consequently, the estimated amount of the annual fees due to PFSA will be charged to the accounts of the GPW Group of the first quarter of each year.

However, the amount of the liability is not yet known at the time when it is recognised and charged because the Chairperson of the Polish Financial Supervision Authority publishes the rates and the indicators necessary to calculate the fees in a public communique promulgated in the Official Journal of the Polish Financial Supervision Authority by 31 August of each calendar year. On that basis, the entities obliged to pay the fee will calculate the final amount of the annual fee due for the year and pay the fee by 30 September of the calendar year.

Consequently, the final amount of the fees due to the Polish Financial Supervision Authority may differ from the amount estimated by the GPW Group companies at the time of recognition.

The changes to the model of financing supervision on the Polish capital market resulted in a reduction of exchange fees as of the beginning of 2016 in order to offset the cost of supervision paid by other market participants as of 2016. The market could exert more pressures to reduce the

exchange fees even further, which could reduce the revenue of the Group and have an adverse impact on the financial position of the Group and its financial results.

Risk of the take-over of the functions of fixing organiser

The GPW Group acting through its subsidiary GPW Benchmark decided to take over the responsibility for the WIBID and WIBOR reference rates from the Financial Markets Association ACI Polska as of 30 June 2017 and thus opened up to a new activity benefiting the financial market. GPW Benchmark now performs the functions of the organiser of WIBID and WIBOR reference rates fixings and the functions of the calculation agent previously performed by Thomson Reuters.

GPW Benchmark S.A. will apply for authorisation as an administrator of reference rates according to the requirements of Regulation 2016/2011. All costs related to the take-over of the function of organiser and harmonisation with the requirements of Regulation 2016/2011 will be financed with the Group's own funds and contributions of participating banks paid under applicable agreements. There is a potential risk that the authorisation for GPW Benchmark S.A. to operate as an administrator may be refused. GPW Benchmark S.A. is steadily working to mitigate that risk. The key objective of GPW Benchmark S.A. is to be authorised as the administrator of the WIBID and WIBOR reference rates within the time limit imposed by the Regulation. GPW Benchmark S.A. is developing competences in the provision of indices and reference rates in compliance with Regulation 2016/2011.

Potential disputes or reservations concerning the performance of the functions of fixing organiser by a Group company could have an adverse impact on its perception by market participants and entail third-party liability of the Group. Once the status of administrator is granted in connection with the application of Regulation 2016/2011 as of the beginning of 2018, any breach of the administrator's obligations could lead to civil, administrative or criminal liability.

IV. FINANCIAL POSITION AND ASSETS

1. Summary of results

The GPW Group generated EBITDA⁷ of PLN 96,9 million in H1 2018, a decrease of PLN 5.9 million compared to PLN 102.9 million in H1 2017.

The GPW Group generated an operating profit of PLN 81.0 million in H1 2018 compared to PLN 89.5 million in H1 2017. The decrease of the operating profit by PLN 8.4 million year on year was mainly a result of a decrease of revenue by PLN 6.1 million and an increase of operating expenses by PLN 4.1 million. The decrease of the revenue by PLN 6.1 million was due to a decrease of the revenue from the financial market by PLN 11.5 million combined with an increase of the revenue from the commodity market by PLN 5.6 million. The decrease of the revenue from the financial market was mainly driven by a decrease of revenue from trading in equities and equity-related instruments. The increase of operating expenses was mainly driven by an increase of depreciation and amortisation charges by PLN 2.5 million and an increase of salaries and other employee costs by PLN 3.5 million.

The net profit of the Group stood at PLN 107.6 million in H1 2018, an increase of 54.4% (PLN 37.9 million) compared to the net profit of the Group at PLN 69.7 million in H1 2017. The increase of the net profit was driven by an increase of net financial income by PLN 47.1 million, largely due to the sale of the associate Aquis and lower financial expenses in view of additional interest costs of TGE in H1 2017 charged by the tax office due to a correction of VAT following a change of the VAT policy applicable to services provided by TGE. Such costs added to the financial expenses of H1 2017.

GPW's EBITDA stood at PLN 46.7 million in H1 2018, a decrease of PLN 9.8 million compared to PLN 56.5 million in H1 2017. GPW's operating profit stood at PLN 36.5 million in H1 2018 compared to PLN 46.7 million in H1 2017. The decrease of GPW's operating profit year on year was driven by a decrease of revenue by PLN 9.0 million (8.6%) and an increase of operating expenses by PLN 2.4 million (4.4%) year on year.

GPW's net profit was PLN 122.2 million in H1 2018 compared to PLN 36.4 million in H1 2017. The increase of GPW's net profit by PLN 85.8 million year on year in H1 2018 was driven mainly by an increase of financial income including a dividend of PLN 69.3 million paid by TGE and gains of PLN 32.2 million on the sale of the associate Aquis.

TGE's EBITDA stood at PLN 33.8 million in H1 2018 compared to PLN 31.3 million in H1 2017. Its operating profit was PLN 29.6 million in H1 2018 compared to PLN 28.9 million in H1 2017. The increase of the operating profit by PLN 0.7 million was mainly driven by a decrease of other operating expenses by PLN 0.5 million year on year. The net profit stood at PLN 39.4 million in H1 2018 compared to PLN 38.6 million in H1 2017. The increase of the net profit in H1 2018 was driven by an increase of the operating profit as well as an increase of net financial income by PLN 0.5 million year on year. The increase of the net financial income was due to a decrease of financial expenses by PLN 5.1 million. In H1 2017, TGE recognised additional interest charged by the tax office due to a correction of VAT for 2011-2016.

IRGiT's EBITDA stood at PLN 16.2 million in H1 2018 compared to PLN 13.9 million in H1 2017. Its operating profit was PLN 15.2 million in H1 2018 compared to PLN 13.0 million in H1 2017. The increase of the operating profit in H1 2018 was driven by an increase of revenue by 11.1%, i.e., PLN 2.4 million, which was higher than the increase of operating expenses by 2.4%, i.e., PLN 0.2 million. The net profit stood at PLN 12.8 million in H1 2018 compared to PLN 10.8 million in H1 2017.

⁷ Operating profit before depreciation and amortisation.

BondSpot's EBITDA stood at PLN 0.7 million in H1 2018 compared to PLN 2.1 million in H1 2017. BondSpot's operating profit was PLN 0.2 million in H1 2018 compared to PLN 1.8 million in H1 2017. Its net profit stood at PLN 0.3 million in H1 2018 compared to PLN 1.5 million in H1 2017. The decrease of the net profit and the operating profit was driven by a decrease of revenue by 14.5%, i.e., PLN 1.0 million combined with an increase of operating expenses by 7.7%, i.e., PLN 0.4 million year on year in H1 2018.

Detailed information on changes in revenues and expenses is presented in the sections below.

Table 4: Consolidated statement of comprehensive income of GPW Group by quarter in 2018 and 2017 and by six-month period in 2018 and 2017

		2018		2017			2018	2017
PLN'000	Q2	Q1	Q4	Q3	Q2	Q1	H1	H1
Sales revenue	86,647	85,936	92,169	81,119	87,635	91,034	172,583	178,669
Financial market	47,063	49,572	51,875	48,851	52,500	55,623	96,635	108,123
Trading	30,103	32,897	34,621	31,903	35,966	38,846	63,000	74,812
Listing	5,835	5,924	6,278	6,278	6,065	6,347	11,759	12,412
Information services	11,126	10,750	10,976	10,670	10,469	10,430	21,876	20,899
Commodity market	39,233	36,213	40,215	31,989	34,770	35,115	75,446	69,885
Trading	19,646	17,738	20,170	16,699	17,643	15,580	37,384	33,223
Register of certificates of origin	8,923	7,126	7,963	5,768	7,783	9,114	16,049	16,897
Clearing	10,532	11,251	11,990	9,435	9,258	10,336	21,783	19,594
Information services	132	98	92	87	86	85	230	171
Other revenue	351	151	79	279	365	296	502	661
Operating expenses	39,993	48,360	48,978	32,505	37,765	46,515	88,353	84,280
Depreciation and amortisation	8,093	7,825	7,566	7,342	7,024	6,393	15,917	13,417
Salaries	13,218	13,630	14,122	12,239	11,897	12,506	26,848	24,403
Other employee costs	3,415	3,780	3,070	2,867	3,002	3,142	7,195	6,144
Rent and maintenance fees	1,945	2,506	2,098	2,187	2,613	2,607	4,451	5,220
Fees and charges	244	9,268	233	(5,524)	229	11,615	9,512	11,844
incl. PFSA fees	5	9,023	3	(5,781)	-	11,357	9,028	11,357
External service charges	11,507	9,923	20,347	12,183	11,650	9,014	21,430	20,664
Other operating expenses	1,571	1,430	1,544	1,209	1,350	1,238	3,000	2,588
Other income	293	844	1,767	1,731	31	330	1,137	361
Impairment losses	375	1,476	-	-	-	-	1,851	-
Other expenses	295	2,200	559	308	868	4,414	2,495	5,282
Operating profit	46,277	34,744	44,398	50,037	49,033	40,435	81,021	89,468
Financial income	48,191	1,867	1,284	1,334	1,538	1,394	50,058	2,932
Financial expenses	2,124	2,208	2,438	(1,339)	2,497	7,551	4,332	10,048
Share of profit of associates	4,472	746	1,910	3,609	3,045	1,495	5,218	4,540
Profit before income tax	96,816	35,149	45,154	56,319	51,119	35,773	131,965	86,892
Income tax expense	17,705	6,657	5,754	9,320	9,173	8,027	24,362	17,200
Profit for the period	79,111	28,492	39,400	46,999	41,946	27,746	107,603	69,692

*As of 1 January 2018, on the application of IFRS 9, the Group reports a line of impairment losses of receivables while comparative data have not been restated (exception under 7.2.15 of IFRS 9).

Table 5: Consolidated statement of financial position of GPW Group by quarter in 2017 and 2018

		2018
PLN'000	Q2	Q1	Q4	Q3	Q2	Q1
Non-current assets	578,568	580,697	596,354	594,774	597,220	597,334
Property, plant and equipment	108,245	108,691	110,784	112,036	113,777	116,716
Intangible assets	262,542	265,140	267,991	268,916	271,380	272,490
Investment in associates	199,929	195,986	207,389	205,221	201,590	198,577
Deferred tax assets	1,800	4,472	3,803	1,796	3,349	3,261
Available-for-sale financial assets	-	-	271	280	278	278
Financial assets measured at fair value through other comprehensive income	204	197	-	-	-	-
Non-current prepayments	5,848	6,211	6,116	6,525	6,846	6,012
Current assets	693,410	612,539	550,699	513,493	615,476	592,548
Inventories	60	54	56	54	53	60
Corporate income tax receivable	71	71	71	95	71	559
Trade and other receivables	68,509	87,399	64,096	63,768	89,069	165,243
Contract assets	1,946	-	-	-	-	-
Financial assets measured at amortised cost	110,840	82,707	-	-	-	-
Assets held for sale	-	12,151	-	-	-	-
Cash and cash equivalents	511,984	430,157	486,476	449,576	526,283	426,686
Total assets	1,271,978	1,193,236	1,147,053	1,108,267	1,212,696	1,189,882
Equity	826,499	839,941	811,481	771,612	724,591	772,849
Share capital	63,865	63,865	63,865	63,865	63,865	63,865
Other reserves	1,194	1,349	1,347	1,128	1,106	1,035
Retained earnings	760,857	774,146	745,696	706,058	659,085	707,399
Non-controlling interests	583	581	573	561	535	550
Non-current liabilities	256,484	255,482	259,951	260,449	258,780	258,516
Liabilities under bond issue	243,767	243,670	243,573	243,475	243,378	243,281
Employee benefits payable	1,239	1,454	1,454	1,468	1,838	2,274
Finance lease liabilities	-	-	-	-	-	17
Accruals and deferred income	5,313	5,452	5,592	5,996	6,064	6,132
Deferred income tax liability	3,941	2,682	7,108	7,286	5,276	4,588
Other liabilities	2,224	2,224	2,224	2,224	2,224	2,224
Current liabilities	188,995	97,813	75,621	76,206	229,325	158,517
Liabilities under bond issue	1,899	2,070	1,938	2,100	1,896	2,069
Trade payables	18,775	23,849	21,303	6,169	3,496	6,199
Employee benefits payable	10,525	8,141	12,958	10,515	8,060	5,812
Finance lease liabilities	-	15	31	48	64	62
Corporate income tax payable Source: Condensed Consolidated Interim Financial Statements, Company	8,688	1,636	6,012	4,587	7,597	13,188
Credits and loans	-	-	-	20,021	59,958	59,798
Performance obligations	22,375	33,037	-	-	-	-
Accruals and deferred income *	563	559	7,386	15,641	37,194	41,722
Provisions for other liabilities and charges	68	67	210	191	318	317
Source: Condensed Consolidated Interim Financial Statements, Company Other current liabilities	126,102	28,439	25,783	16,934	110,742	29,350
Total equity and liabilities	1,271,978	1,193,236	1,147,053	1,108,267	1,212,696	1,189,882

* As of 2018, deferred income is presented under performance obligations.

2. Presentation of the financials

REVENUE

The Group has three revenue-generating segments:

financial market,
commodity market,
other revenues.

Revenues from the financial market include revenues from:

trading,
listing,
information services.

Trading revenue includes fees paid by market participants in respect of:

transactions on markets of equities and equity-related instruments,
transactions in derivative financial instruments,
transactions in debt instruments,
transactions in other cash market instruments,
other fees paid by market participants.

Revenues from transactions in equities and equity-related securities are the Group's main source of trading revenues and its main source of sales revenues in general.

Revenues from transactions in derivative financial instruments are the second biggest source of trading revenues on the financial market after revenues from transactions in equities. Transactions in WIG20 index futures account for the majority of revenues from transactions in derivatives.

Revenues from other fees paid by market participants include mainly fees for services providing access to the trading system.

Revenues from transactions in debt instruments were the third largest source of trading revenues on the financial market in H1 2018. Revenues from transactions in debt instruments are generated by the Catalyst market as well as the Treasury BondSpot Poland market operated by BondSpot S.A., a subsidiary of GPW.

Revenues from transactions in other cash market instruments include fees for trading in structured products, investment certificates and ETF (Exchange Traded Fund) units.

Listing revenues include two elements:

one-off fees paid for introduction of shares and other instruments to trading on the exchange,
periodic listing fees.

Revenues from information services mainly include fees paid by data vendors for real-time market data as well as historical and statistical data. Real-time data fees include fixed annual fees and monthly fees based on the data vendor's number of subscribers and the scope of data feeds used by a subscriber. Revenue from real-time data fees includes revenue from WIBOR and WIBID reference rates.

Revenues of the Group in the commodity market segment include revenues of TGE and IRGiT as well as revenues of InfoEngine from its activity as a trade operator and the entity responsible for balancing.

Revenue on the commodity market includes the following:

trading,
operation of the Register of Certificates of Origin,
clearing,
information services.

Trading revenue on the commodity market includes:

revenue from trading in electricity (spot and forward),
revenue from trading in natural gas (spot and forward),
revenue from trading in property rights,
other fees paid by market participants (members).

Other fees paid by market participants include TGE fees as well as revenues of InfoEngine as a trade operator and the entity responsible for balancing.

Revenues of the sub-segment "clearing" include revenues of the company IRGiT, which clears and settles exchange transactions concluded on TGE, manages the resources of the clearing guarantee system and determines the amount of credits and debits of IRGiT members resulting from their transactions.

The Group's other revenues include revenues of GPW and the TGE Group, among others, from office space lease, colocation and promotion activities.

The Group's sales revenues amounted to PLN 172.6 million in H1 2018, a decrease of 3.4% (PLN 6.1 million) compared to PLN 178.7 million in H1 2017.

The decrease in sales revenues year on year in H1 2018 was driven by a decrease in revenues from the financial market segment by PLN 11.5 million or 10.6%, mainly from transactions in equities and equity-related instruments (down by PLN 10.2 million). Listing revenue also decreased by PLN 0.7 million or 5.3%. The revenue from information services and the calculation of reference rates increased by PLN 1.0 million year on year. The revenues from the commodity market increased by PLN 5.6 million or 8.0% year on year. The increase of the revenue from the commodity market was mainly driven by an increase of the revenue from trade in electricity by PLN 3.6 million or 94.5%, an increase of the revenue from trading in property rights to certificates of origin by PLN 0.3 million and an increase of the revenue from other fees paid by market participants by PLN 0.4 million year on year in H1 2018. The revenue from clearing increased by PLN 2.2 million. The revenue from the operation of the register of certificates of origin decreased by PLN 0.8 million year on year in H1 2018.

The revenue of GPW was PLN 95.4 million in H1 2018, a decrease of 8.6% or PLN 9.0 million year on year. The revenue of TGE stood at PLN 51.6 million in H1 2018 compared to PLN 48.8 million in H1 2017, representing an increase of PLN 2.8 million or 5.8% year on year in H1 2018. The revenue of IRGiT was PLN 23.6 million in H1 2018, an increase of PLN 2.4 million or 11.1% year on year. The revenue of BondSpot decreased and stood at PLN 5.7 million in H1 2018 compared to PLN 6.7 million in H1 2017.

The revenue of the GPW Group by segment is presented below.

Table 6: Consolidated revenues of GPW Group and revenue structure in the six-month periods ended 30 June 2017 and 30 June 2018

		Six-month period ended		Change (H1 2018	Change (%) (H1 2018
PLN'000, %	30 June 2018	%	30 June 2017	%	v s H1 2017)	v s H1 2017)
Financial market	96,635	56%	108,123	61%	(11,488)	-10.6%
Trading revenue	63,000	37%	74,812	42%	(11,812)	-15.8%
Equities and equity-related instruments	47,800	28%	57,985	32%	(10,185)	-17.6%
Derivative instruments	6,227	4%	6,589	4%	(362)	-5.5%
Other fees paid by market participants	3,644	2%	3,835	2%	(191)	-5.0%
Debt instruments	5,140	3%	6,192	3%	(1,052)	-17.0%
Other cash instruments	189	0%	211	0%	(22)	-10.4%
Listing revenue	11,759	7%	12,412	7%	(653)	-5.3%
Listing fees	10,111	6%	10,101	6%	10	0.1%
Introduction fees, other fees	1,648	1%	2,311	1%	(663)	-28.7%
Information services and revenue from calculation of reference rates	21,876	13%	20,899	12%	977	4.7%
Real-time information and revenue from calculation of reference rates	20,088	12%	19,350	11%	738	3.8%
Indices and historical and statistical information	1,788	1%	1,549	1%	239	15.4%
Commodity market	75,446	44%	69,885	39%	5,561	8.0%
Trading revenue	37,384	22%	33,223	19%	4,161	12.5%
Electricity	7,442	4%	3,826	2%	3,616	94.5%
Spot	1,408	1%	1,379	1%	29	2.1%
Forward	6,034	3%	2,447	1%	3,587	146.6%
Gas	4,209	2%	4,391	2%	(182)	-4.1%
Spot	1,560	1%	1,496	1%	64	4.3%
Forward	2,649	2%	2,895	2%	(246)	-8.5%
Property rights in certificates of origin	20,145	12%	19,798	11%	347	1.8%
Other fees paid by market participants	5,588	3%	5,208	3%	380	7.3%
Register of certificates of origin	16,049	9%	16,897	9%	(848)	-5.0%
Clearing	21,783	13%	19,594	11%	2,189	11.2%
Information services	230	0%	171	0%	59	34.5%
Other revenue *	502	0%	661	0%	(159)	-24.1%
Total	172,583	100%	178,669	100%	(6,086)	-3.4%

* Other revenues include the financial market and the commodity market.

Source: Condensed Consolidated Interim Financial Statements, Company

The Group earns revenue both from domestic and foreign clients. The table below presents revenue by geographic segment.

Table 7: Consolidated revenues of the Group by geographical segment in the six-month periods ended 30 June 2017 and 30 June 2018

			Six-month period ended		Change	Change (%)
PLN'000, %	30 June 2018	%	30 June 2017	%	(H1 2018 v s H1 2017)	(H1 2018 v s H1 2017)
Revenue from foreign customers	44,091	26%	42,203	24%	1,888	4.5%
Revenue from local customers	128,492	74%	136,466	76%	(7,974)	-5.8%
Total	172,583	100%	178,669	100%	(6,086)	-3.4%

Source: Condensed Consolidated Interim Financial Statements, Company

FINANCIAL MARKET

TRADING

The revenues of the Group from trading on the financial market stood at PLN 63.0 million in H1 2018 compared to PLN 74.8 million in H1 2017.

Equities and equity-related instruments

Revenues from trading in equities and equity-related instruments amounted to PLN 47.8 million in H1 2018 and decreased by 17.6% or PLN 10.2 million year on year compared to PLN 58.0 million in H1 2017.

The decrease of the revenues from trading in equities was driven by a decrease of the value of trade on the Main Market. The total value of trade on the Main Market was PLN 104.9 billion in H1 2018, a decrease of 25.5% year on year (including a decrease of trade on the electronic order book by 18.6% and a decrease of the value of block trades by 79.9%).

However, it should be noted that 2017 was a record year in terms of the value of trade on the stock market, where the average monthly turnover was PLN 19.7 billion. The monthly turnover dropped to ca. PLN 17 billion in H1 2018 but remained higher than PLN 16.95 billion in 2015 and PLN 15.77 billion 2016. The drivers of the decrease of turnover year on year included:

changes of market conditions and drop of GPW's main indices. WIG20 gained more than 26% in 2017 but lost more than 12% year to date in 2018. Market conditions do not favour investments in stocks so investors opt for other asset classes which can generate positive returns:
less active trading by domestic institutional investors: investment funds and pension funds;
changes driven by MiFID II, including unbundling, which precipitate an increase of the market share of foreign brokers.

Table 8: Data for the markets in equities and equity-related instruments

		Six-month period ended	Change (H1 2018	Change (%) (H1 2018
		30 June 2018 30 June 2017	v s H1 2017)	v s H1 2017)
Financial market, trading revenue: equities and equity-related instruments (PLN million)	47.8	58.0	(10.2)	-17.6%
Main Market:
Value of trading (PLN billion)	104.9	140.9	(35.9)	-25.5%
Volume of trading (billions of shares)	5.6	8.0	(2.5)	-30.9%
NewConnect:
Value of trading (PLN billion)	0.6	0.9	(0.2)	-25.1%
Volume of trading (billions of shares)	0.9	1.6	(0.7)	-44.9%

Source: Condensed Consolidated Interim Financial Statements, Company

Derivatives

Revenues of the Group from transactions in derivatives on the financial market amounted to PLN 6.2 million in H1 2018 compared to PLN 6.6 million in H1 2017, representing a decrease of PLN 0.4 million or 5.5%.

The total volume of trade in derivatives was stable year on year in H1 2018. The volume of trade in WIG20 futures, which account for the major part of the revenues from transactions in derivatives, decreased by 9.9% year on year in H1 2018. The volume of trade in currency futures increased by 97.8% from PLN 0.5 million to 1.1 million contracts, which levelled off the total volume of trade. However, fees on currency futures are the lowest among all fees on futures; hence, their impact on revenue is much smaller.

Table 9: Data for the derivatives market

		Six-month period ended	Change (H1 2018	Change (%) (H1 2018
		30 June 2018 30 June 2017	v s H1 2017)	v s H1 2017)
Financial market, trading revenue: derivatives (PLN million)	6.2	6.6	(0.4)	-5.5%
Volume of trading in derivatives (millions of contracts):	4.2	4.2	(0.0)	0.0%
incl.: Volume of trading in WIG20 futures (millions of contracts)	2.3	2.5	(0.3)	-9.9%

Source: Condensed Consolidated Interim Financial Statements, Company

Other fees paid by market participants

Revenues of the Group from other fees paid by market participants stood at PLN 3.6 million, a decrease of 5.0% or PLN 0.2 million year on year. The fees mainly include fees for access to and use of the trading system (among others, licence fees, connection fees and maintenance fees).

Debt instruments

Revenues of the Group from transactions in debt instruments stood at PLN 5.1 million in H1 2018 compared to PLN 6.2 million in H1 2017. The majority of the Group's revenues from the debt instruments segment is generated by Treasury BondSpot Poland (TBSP).

The year-on-year decrease of the revenues on TBSP in H1 2018 was driven by a decrease of the value of transactions on TBS Poland, including both cash and conditional trades.

The value of trade in Polish Treasury securities on TBSP was PLN 188.2 billion in H1 2018, a decrease of 27.9% year on year. The decrease of the value of trade was reported in both market

segments. Conditional transactions stood at PLN 116.3 billion in H1 2018, a decrease of 22.4% year on year. Cash transactions stood at PLN 71.9 billion in H1 2018, a decrease of 35.2% year on year.

The decrease in turnover in H1 2018 was mainly driven by market conditions impacting the local interest rate market, which affected the yields and prices on the local Treasury bond market. Those conditions included relatively low inflation readings and the plans of the Polish Monetary Policy Council (RPP) to keep the rates unchanged by the end of 2020, a strong public budget, limited supply of bonds at auctions held by the Ministry of Finance, and no impact of changes in the structure of Treasury securities holders with a dropping share of foreign investors, which was offset by a growing share of local banks due among other things to tax incentives (Treasury securities reduce the value of assets in the calculation of the bank tax).

The value of trading on Catalyst was PLN 1.6 billion in H1 2018, representing an increase of 20.3% year on year. Revenues from Catalyst have a small share in the Group's total revenues from transactions in debt instruments.

Table 10: Data for the debt instruments market

		Six-month period ended Change (H1 2018		Change (%) (H1 2018
	30 June 2018	30 June 2017	v s H1 2017)	v s H1 2017)
Financial market, trading revenue: debt instruments (PLN million)	5.1	6.2	(1.1)	-17.0%
Catalyst:
Value of trading (PLN billion)	1.6	1.3	0.3	20.3%
incl.: Value of trading in non-Treasury instruments (PLN billion)	1.2	0.8	0.4	47.5%
Treasury BondSpot Poland, value of trading:
Conditional transactions (PLN billion)	116.3	149.9	(33.7)	-22.4%
Cash transactions (PLN billion)	71.9	111.0	(39.1)	-35.2%

Source: Condensed Consolidated Interim Financial Statements, Company

Other cash market instruments

Revenues from transactions in other cash market instruments stood at PLN 189.0 thousand in H1 2018 compared to PLN 211 thousand in H1 2017, a decrease of 10.4%. The revenues include fees for trading in structured products, investment certificates, and ETF units.

LISTING

Listing revenues on the financial market amounted to PLN 11.8 million in H1 2018 compared to PLN 12.4 million in H1 2017.

Revenues from listing fees were stable year on year and amounted to PLN 10.1 million in H1 2018. The main driver of revenues from listing fees is the number of issuers listed on the GPW markets and their capitalisation at the year's end.

Revenues from fees for introduction and other fees decreased and amounted to PLN 1.6 million in H1 2018 compared to PLN 2.3 million in H1 2017. The revenues are driven mainly by the number and value of new listings of shares and bonds on the GPW markets. The value of IPOs and SPOs decreased significantly year on year in H1 2018. The value of IPOs dropped from PLN 2.3 billion to PLN 0.3 billion. The value of SPOs dropped from PLN 58.3 billion to PLN 1.2 billion. The SPO of UniCredit worth PLN 55.9 billion in H1 2017 largely contributed to the high value of SPOs in H1 2017.

Listing revenues on the GPW Main Market decreased by 7.2% year on year in H1 2018. The table below presents the key financial and operating figures. Five companies were newly listed on the

Main Market and 14 companies were delisted in H1 2018. The capitalisation of the delisted companies was PLN 15.3 billion, adding to the decrease of trading in H1 2018.

Table 11: Data for the GPW Main Market

		Six-month period ended	Change	Change (%)
	30 June 2018	30 June 2017	(H1 2018 v s H1 2017)	(H1 2018 v s H1 2017)
Main Market
Listing revenue (PLN million)	9.4	10.2	(0.7)	-7.2%
Total capitalisation of listed companies (PLN billion)	1,229.2	1,316.5	(87.3)	-6.6%
including: Capitalisation of listed domestic companies	569.3	645.0	(75.7)	-11.7%
including: Capitalisation of listed foreign companies	659.8	671.5	(11.6)	-1.7%
Total number of listed companies	473	483	(10.0)	-2.1%
including: Number of listed domestic companies	424	432	(8.0)	-1.9%
including: Number of listed foreign companies	49	51	(2.0)	-3.9%
Value of offerings (IPO and SPO) (PLN billion) *	1.5	60.7	(59.2)	-97.6%
Number of new listings (in the period)	5	6	(1.0)	-16.7%
Capitalisation of new listings (PLN billion)	1.4	5.3	(3.9)	-73.8%
Number of delistings	14	10	4.0	40.0%
Capitalisation of delistings** (PLN billion)	15.3	4.1	11.2	275.1%

* including SPO of UniCredit S.p.A. at PLN 55.9 billion in Q1 2017

** based on market capitalisation at the time of delisting

Source: Company

Listing revenues from NewConnect were stable year on year and stood at PLN 1.1 million in H1 2018. The table below presents the key financial and operating figures.

Table 12: Data for NewConnect

		Six-month period ended	Change (H1 2018	Change (%) (H1 2018
		30 June 2018 30 June 2017	v s H1 2017)	v s H1 2017)
NewConnect
Listing revenue (PLN million)	1.1	1.1	0.0	0.0%
Total capitalisation of listed companies (PLN billion)	8.7	10.3	-1.6	-15.4%
including: Capitalisation of listed domestic companies	8.5	9.9	-1.4	-14.2%
including: Capitalisation of listed foreign companies	0.2	0.4	-0.2	-46.6%
Total number of listed companies	403	404	- 1	-0.2%
including: Number of listed domestic companies	397	396	1	0.3%
including: Number of listed foreign companies	6	8	- 2	-25.0%
Value of offerings (IPO and SPO) (PLN billion)	0.1	0.1	0.0	4.1%
Number of new listings (in the period)	8	5	3	60.0%
Capitalisation of new listings (PLN billion)	0.3	0.2	0.2	87.7%
Number of delistings*	13	7	6	85.7%
Capitalisation of delistings** (PLN billion)	0.3	0.6	-0.3	-51.3%

* includes companies which transferred to the Main Market

Source: Company

Listing revenues from Catalyst stood at PLN 1.3 million in H1 2018 and increased moderately year on year. The table below presents the key financial and operating figures.

Table 13: Data for Catalyst

		Six-month period ended	Change (H1 2018	Change (%) (H1 2018
	30 June 2018 30 June 2017		v s H1 2017)	v s H1 2017)
Catalyst
Listing revenue (PLN million)	1.3	1.2	0.1	5.8%
Number of issuers	152	169	(17)	-10.1%
Number of issued instruments	588	592	(4)	-0.7%
including: non-Treasury instruments	539	551	(12)	-2.2%
Value of issued instruments (PLN billion)	775.0	744.6	30.4	4.1%
including: non-Treasury instruments	80.1	83.3	-3.2	-3.9%

Source: Company

INFORMATION SERVICES

Revenues from information services including the financial market and the commodity market amounted to PLN 22.1 million in H1 2018 compared to PLN 21.1 million in H1 2017.

Table 14: Data for information services

	Six-month period ended		Change (H1 2018	Change (%) (H1 2018
	30 June 2018 30 June 2017		v s H1 2017)	v s H1 2017)
Revenues from information services and WIBID and WIBOR reference rate services * (PLN million)	22.1	21.1	1.0	4.9%
Number of data vendors	73	52	21	40.4%
Number of subscribers ('000 subscribers)	252.6	232.0	20.6	8.9%

* revenues from information services contein financial market data and commodity market data

Source: Condensed Consolidated Interim Financial Statements, Company

The increase of the revenue from information services in 2018 was driven by:

start of the sale of WIBID/WIBOR data (as of 1 July 2017);
acquisition of new customers of GPW Group data (data vendors, non-display data users);
increase in the number of TGE and BondSpot data subscribers;
introduction (as of 1 January 2018) of fees for the distribution of delayed data from GPW and for the use of GPW data by Service Facilitators who co-operate with data vendors in the distribution of data to subscribers.

COMMODITY MARKET

Revenues on the commodity market include mainly the revenues of the TGE Group.

Revenues of the TGE Group are driven mainly by the volume of transactions in electricity, natural gas and property rights, the volume of certificates of origin issued and cancelled by members of the Register of Certificates of Origin, as well as revenues from clearing and settlement of transactions in exchange-traded commodities in the clearing sub-segment operated by IRGiT.

Revenues of the GPW Group on the commodity market stood at PLN 75.4 million in H1 2018 compared to PLN 69.9 million in H1 2017.

The year-on-year increase of revenues on the commodity market in H1 2018 was mainly driven by an increase in revenues from trade in electricity, which stood at PLN 7.4 million compared to PLN 3.8 million in H1 2017, representing an increase of 94.5% or PLN 3.6 million. Revenues from trading in property rights in certificates of origin increased by PLN 0.3 million while revenues from other fees paid by market participants increased by 0.4 million. Revenues from clearing on the commodity market increased by a high 11.2% or PLN 2.2 million. Revenues from transactions in gas decreased by 4.1% and revenues from the operation of the register of certificates of origin decreased by 5.0% year on year in H1 2018.

Revenue from information services on the commodity market includes information services sold via GPW's channels. Revenue from information services on the commodity market stood at PLN 230 thousand in H1 2018.

TRADING

Revenues of the GPW Group from trading on the commodity market stood at PLN 37.4 million in H1 2018, including PLN 1.4 million of revenues from spot transactions in electricity, PLN 6.0 million of revenues from forward transactions in electricity, PLN 1.6 million of revenues from spot transactions in gas, PLN 2.6 million of revenues from forward transactions in gas, PLN 20.1 million of revenues from transactions in property rights in certificates of origin of electricity, and PLN 5.6 million of other fees paid by market participants. Revenues from trading increased by 12.5% or PLN 4.2 million year on year in H1 2018.

The Group's revenues from trade in electricity amounted to PLN 7.4 million in H1 2018 compared to PLN 3.8 million in H1 2017. The total volume of trading on the energy markets operated by TGE amounted to 95.3 TWh in H1 2018 compared to 46.9 TWh in H1 2017.

The year-on-year increase of the revenues from trade in electricity was driven by a much higher volume of forward transactions. The volume of forward transactions increased by 139.8% year on year. The (six-month) volume of forward transactions in electricity on TGE was the highest since January 2016.

The market in electricity is sensitive to changes in the legal and international environment. The increase in trade on the electricity market was driven by the amendment of the obligation to sell electricity on the exchange under the Energy Law, which took effect in December 2017. The amendment raised the mandatory volume of sale on a commodity exchange to not less than 30% of electricity produced during the year, as compared to 15% in 2017. In addition, gas prices for industrial clients were deregulated in October 2017. This has a positive effect on TGE as wholesale market organiser because its role in the process of setting prices for industrial clients grew.

The Market in Financial Instruments Directive (MiFID II) took effect in January 2018. MiFID II gives a new status to such derivatives and imposes new obligations on organisers and participants in trade in such instruments. The uncertainty around MiFID II and doubts about its impact on the energy market probably impacted the volume of trade on the commodity exchange in 2017. TGE implemented the Act on MiFID II in January 2018. Therefore, greater stability and clarity of market

regulation could encourage companies to trade on the forward market, which could drive the volume of trade in 2018.

The Group's revenues from trade in gas amounted to PLN 4.2 million in H1 2018 compared to PLN 4.4 million in H1 2017. The volume of trade in natural gas on TGE was 51.8 TWh in H1 2018 compared to 54.3 TWh in H1 2017. The volume of trade on the Day-ahead and Intraday Market in gas was 14.5 TWh in H1 2018 compared to 14.7 TWh in H1 2017. The volume of trade on the Commodity Forward Instruments Market was 37.3 TWh in H1 2018, a decrease of 5.9% year on year.

The Group's revenue from the operation of trading in property rights stood at PLN 20.1 million in H1 2018 compared to PLN 19.8 million in H1 2017. The volume of trading in property rights stood at 35.5 TWh in H1 2018, an increase of 3.5% year on year. Changes in revenue from trading in property rights are not proportionate to changes in the volume of trade due to different fees for different types of property rights. Furthermore, the revenue from trade in property rights to energy efficiency (white certificates) increased sharply and stood at PLN 3.2 million in H1 2018 compared to PLN 2.6 million in H1 2017. The volume of trade in property rights to energy efficiency was 191,482 toe, an increase of 30.1% year on year.

Revenues of the Group from other fees paid by commodity market participants amounted to PLN 5.6 million in H1 2018 compared to PLN 5.2 million in H1 2017. Other fees paid by commodity market participants included fees paid by TGE market participants at PLN 3.1 million, revenues of InfoEngine from the activity of trade operator at PLN 1.0 million, and revenues of IRGiT at PLN 1.5 million including participation fees, fees for participation in TGE markets, and other fees.

Other fees paid by market participants are driven mainly by revenues from fixed market participation fees, fees for cancellation of transactions, fees for position transfers, fees for trade reporting in the RRM (Registered Reporting Mechanism), fees for access to the system, and fees for management of the resources of the guarantee fund. Other fees paid by market participants depend mainly on the activity of IRGiT members, in particular the number of transactions, the number of new clients of brokerage houses, and the number of new users accessing the clearing system.

In TGE, the revenue from exchange fees had the biggest share of all these. The main contribution to the revenue from other fees paid by commodity market participants was that of annual fees, accounting for 66,2% of revenue from other fees. Revenue from annual fees stood at PLN 2.0 million in H1 2018, an increase of 8.1% year on year. The Exchange Commodity Market had 74 members as at 30 June 2018, four more than a year earlier.

Table 15: Data for the commodity market

		Six-month period ended	Change (H1 2018	Change (%) (H1 2018
	30 June 2018 30 June 2017		v s H1 2017)	v s H1 2017)
Commodity market - trading revenue (PLN million)	37.4	33.2	4.2	12.5%
Volume of trading in electricity
Spot transactions (TWh)	13.7	12.9	0.8	6.5%
Forward transactions (TWh)	81.6	34.0	47.6	139.8%
Volume of trading in gas
Spot transactions (TWh)	14.5	14.7	(0.2)	-1.0%
Forward transactions (TWh)	37.3	39.6	(2.3)	-5.9%
Volume of trading in property rights (TGE) (TWh)	35.5	34.3	1.2	3.5%

Source: Condensed Consolidated Interim Financial Statements, Company

REGISTER OF CERTIFICATES OF ORIGIN

Revenues from the operation of the Register of Certificates of Origin amounted to PLN 16.0 million in H1 2018 compared to PLN 16.9 million in H1 2017. The year-on-year decrease of the revenues was mainly driven by a decrease of revenues from cancellations of property rights, especially green certificates of origin, from PLN 12.5 million to PLN 10.7 million in 2018.

Table 16: Data for the Register of Certificates of Origin

	Six-month period ended		Change (H1 2018	Change (%) (H1 2018
	30 June 2018	30 June 2017	v s H1 2017)	v s H1 2017)
Commodity market - revenue from operation of the Register of Certificates of Origin of electricity (PLN million)	16.0	16.9	(0.8)	-5.0%
Issued property rights (TWh)	33.3	29.9	3.4	11.5%
Cancelled property rights (TWh)	17.7	31.0	(13.4)	-43.1%

Source: Condensed Consolidated Interim Financial Statements, Company

CLEARING

The Group earns revenue from the clearing activities of IRGiT, which is a subsidiary of TGE. The revenue stood at PLN 21.8 million in H1 2018 compared to PLN 19.6 million in H1 2017. The revenue increased by 11.2% or PLN 2.2 million year on year in H1 2018 due to an increase of the volumes of transactions on the commodity exchange.

OTHER REVENUES

The Group's other revenues amounted to PLN 0.5 million in H1 2018 compared to PLN 0.7 million in H1 2017. The Group's other revenues include mainly revenues from office space lease, colocation and sponsorship, which mainly affected the decrease in other revenues.

OPERATING EXPENSES

The total operating expenses of the GPW Group amounted to PLN 88.4 million in H1 2018, representing an increase of 4.8% or PLN 4.1 million year on year. The increase of operating expenses was driven by an increase of depreciation and amortisation charges by PLN 2.5 million, mainly due to the implementation of TGE's trading systems X-Stream and Sapri, an increase of salaries and other employee costs by 11.4% or PLN 3.5 million, an increase of external service charges by 3.7% or PLN 0.8 million, and an increase of other operating expenses by PLN 0.4 million. Fees and charges decreased year on year in H1 2018 due to lower provisions for the annual fee due to PFSA, which stood at PLN 9.0 million in H1 2018 compared to PLN 11.4 million in H1 2017.

Separate operating expenses of GPW amounted to PLN 56.4 million in H1 2018, representing an increase of PLN 2.4 million (4.4%) year on year. The increase of the operating expenses over that period was mainly driven by an increase of salaries and other employee costs, an increase of depreciation and amortisation charges and an increase of external service charges, combined with a decrease of fees and charges.

Operating expenses of TGE amounted to PLN 21.9 million in H1 2018 compared to PLN 19.2 million in H1 2017. The year-on-year increase of the operating expenses in H1 2018 was mainly driven by an increase of depreciation and amortisation charges by 79.4% or PLN 1.9 million, an increase of rent and other maintenance fees by PLN 0.6 million and an increase of external service charges by PLN 0.6 million.

Operating expenses of IRGiT stood at PLN 8.3 million in H1 2018, representing an increase of PLN 0.2 million year on year.

Operating expenses of BondSpot stood at PLN 5.3 million in H1 2018 compared to PLN 4.9 million in H1 2017, representing an increase of 7.7% or PLN 0.4 million. The increase was mainly driven by an increase of external service charges by PLN 0.4 million.

Table 17: Consolidated operating expenses of the Group and structure of operating expenses in the six-month periods ended 30 June 2017 and 30 June 2018

			Six-month period ended		Change (H1 2018	Change (%) (H1 2018
PLN'000, %	30 June 2018	% 30 June 2017 %				v s H1 2017)
Depreciation and amortisation	15,917	18%	13,417	16%	2,500	18.6%
Salaries	26,848	30%	24,403	29%	2,445	10.0%
Other employee costs	7,195	8%	6,144	7%	1,051	17.1%
Rent and other maintenance fees	4,451	5%	5,220	6%	(769)	-14.7%
Fees and charges	9,512	11%	11,844	14%	(2,332)	-19.7%
including: PFSA fees	9,028	10%	11,357	13%	(2,329)	-20.5%
External service charges	21,430	24%	20,664	25%	766	3.7%
Other operating expenses	3,000	3%	2,588	3%	412	15.9%
Total	88,353	100%	84,280	100%	4,073	4.8%

Source: Condensed Consolidated Interim Financial Statements, Company

The table above presents changes in the structure of expenses by semi-annual periods in 2018 and 2017 and changes between H1 2018 and H1 2017.

Table 18: Separate operating expenses of GPW and structure of operating expenses in selected periods of 2017 and 2018

			Six-month period ended	Change (H1 2018	Change (%) (H1 2018
PLN'000, %	30 June 2018	%	30 June 2017	%	v s H1 2017)	v s H1 2017)
Depreciation and amortisation	10,163	18%	9,712	18%	451	4.6%
Salaries	15,759	28%	14,012	26%	1,747	12.5%
Other employee costs	4,787	8%	3,986	7%	801	20.1%
Rent and other maintenance fees	3,767	7%	3,719	7%	48	1.3%
Fees and charges	5,168	9%	6,622	12%	(1,454)	-22.0%
including: PFSA fees	4,806	9%	6,260	12%	(1,454)	-23.2%
External service charges	14,558	26%	13,995	26%	563	4.0%
Other operating expenses	2,200	4%	1,985	4%	215	10.8%
Total	56,402	100%	54,031	100%	2,371	4.4%

Source: Company

The comments below concerning operating expenses items are based on consolidated figures of the GPW Group.

Depreciation and amortisation

Depreciation and amortisation charges stood at PLN 15.9 million in H1 2018 compared to PLN 13.4 million in H1 2017. The increase in depreciation and amortisation charges year on year in H1 2018 was driven by an increase of depreciation and amortisation charges in GPW by PLN 0.5 million, an increase of depreciation and amortisation charges in TGE by PLN 1.9 million and an increase of depreciation and amortisation charges in BondSpot by PLN 0.1 million. The depreciation and amortisation charges in the subsidiaries IRGiT and GPW Benchmark were stable year on year. The high increase of depreciation and amortisation charges in TGE was driven by the implementation of the new trading system X-Stream in May 2017 and the Sapri system in November 2017.

Salaries and other employee costs

Salaries and other employee costs amounted to PLN 34.0 million in H1 2018 compared to PLN 30.5 million in H1 2017, representing an increase of 11.4% or PLN 3.5 million.

The increase of salaries and other employee costs in the GPW Group year on year in H1 2018 was driven by an increase of salaries and other employee costs in GPW by PLN 2.5 million, GPW Benchmark by PLN 0.5 million, IRGiT by PLN 0.3 million, IAiR by PLN 0.2 million, and TGE by PLN 0.1 million.

The increase of salaries and other employee costs in GPW year on year in H1 2018 was driven by an increase of salaries by PLN 1.3 million, an increase of supplementary remuneration by PLN 0.5 million and an increase of other employee costs, including social security costs, by PLN 0.7 million. The increase of salaries was driven by an upgrade of remuneration in H2 2017 and a gradual increase in the headcount necessary to restore part of the Company's human resources reduced during the restructuring in 2016. The increase of supplementary remuneration was driven by shortterm contracts in the development of the strategy.

The increase of salaries in GPW Benchmark by PLN 0.5 million was due to the fact that the company did not yet organise reference rate fixings in H1 2017. This business was launched on 30 June 2017, i.e., in practice, as of Q3 2017, and the company hired expert staff. The increase of salaries in IRGiT was driven by an increase of gross salaries by PLN 0.1 million and an increase of annual bonuses by PLN 0.1 million; the increase of social security costs by PLN 0.1 million was due to the increase of salaries. The increase of remuneration in IRGiT was driven by an increase of the

headcount. IAiR launched its operation in H2 2017, as well. The changes of salaries in other companies were due to absenteeism in 2017, which implies a lower reference base for H1 2018.

The headcount of the Group was 329 FTEs as at 30 June 2018.

Table 19: Employment in GPW Group

		As at
# FTEs	30 June 2018	31 December 2017	30 June 2017
GPW	195	189	179
Subsidiaries	134	139	135
Total	329	328	314

Source: Company

Rent and other maintenance fees

Rent and other maintenance fees amounted to PLN 4.5 million in H1 2018 compared to PLN 5.2 million in H1 2017. The decrease of the cost was driven by completed relocation of all companies of the GPW Group to a shared head office in order to optimise the cost of rent of the leased office space. Following the integration, GPW's subsidiaries use office space owned by GPW. The physical integration of the GPW Group was completed in Q1 2018.

Fees and charges

Fees and charges stood at PLN 9.5 million in H1 2018 compared to PLN 11.8 million in H1 2017. The main component of fees and charges are fees paid to the Polish Financial Supervision Authority (PFSA) for capital market supervision (PLN 9.0 million in H1 2018). Following the change of the system of financing the cost of market supervision and of the range of entities participating in the financing as of the beginning of 2016, the full estimated amount of the annual PFSA fee is recognised early in the year. It should be noted, however, that the fee may vary year to year depending on a range of factors. The exact, final amount of the annual fee may only be calculated after the Chairperson of the Polish Financial Supervision Authority publishes the fees and the indicators necessary to calculate the fees in a public communique promulgated in the Official Journal of the Polish Financial Supervision Authority by 31 August of each calendar year. The calculated fee is to be paid by 30 September of the calendar year.

The final PFSA fee calculated in 2017 was PLN 5.6 million in the GPW Group.

External service charges

External service charges amounted to PLN 21.4 million in H1 2018 compared to PLN 20.7 million in H1 2017, representing an increase of 3.7% or PLN 0.8 million.

Table 20: Consolidated external service charges of the Group and structure of external service charges in the six-month periods ended 30 June 2017 and 30 June 2018

		Six-month period ended	Change (H1 2018	Change (%) (H1 2018
PLN'000, %	30 June 2018	%	30 June 2017	%	v s H1 2017)	v s H1 2017)
IT cost:	11,603	54%	11,431	55%	172	1.5%
IT infrastructure maintenance	8,103	38%	7,337	36%	766	10.4%
TBSP maintenance service	741	3%	520	3%	221	42.5%
Data transmission lines	2,604	12%	2,727	13%	(123)	-4.5%
Software modification	155	1%	847	4%	(692)	-81.7%
Office and office equipment maintenance:	1,443	7%	1,611	8%	(167)	-10.4%
Repair and maintenance of installations	276	1%	457	2%	(182)	-39.7%
Security	712	3%	676	3%	36	5.4%
Cleaning	264	1%	286	1%	(23)	-8.0%
Phone and mobile phone services	192	1%	191	1%	1	0.4%
International (energy) market services	888	4%	999	5%	(111)	-11.1%
Leasing, rental and maintenance of vehicles	329	2%	340	2%	(11)	-3.3%
Transportation services	59	0%	67	0%	(8)	-12.3%
Promotion, education, market development	2,453	11%	2,503	12%	(50)	-2.0%
Market liquidity support	445	2%	363	2%	82	22.6%
Advisory (including: audit, legal services, business consulting)	3,057	14%	1,981	10%	1,076	54.3%
Information services	154	1%	331	2%	(177)	-53.4%
Training	313	1%	222	1%	91	41.1%
Mail fees	36	0%	56	0%	(20)	-35.7%
Bank fees	62	0%	61	0%	1	1.6%
Translation	237	1%	205	1%	32	15.6%
Other	350	2%	494	2%	(143)	-29.0%
Total	21,430	100%	20,664	100%	766	3.7%

Source: Condensed Consolidated Interim Financial Statements

The increase of external service charges year on year in H1 2018 was mainly driven by an increase of the following cost items:

1/ infrastructure maintenance – an increase of PLN 0.8 million due to the cost of IT hardware and software maintenance services. The increase of the Group's IT infrastructure maintenance costs was driven by an increase in TGE by PLN 1.2 million or ca. 79.1% due to the commissioning of two new systems, X-Stream and Sapri, in 2017. The cost of system licences and support in H1 2017 was low because X-Stream was rolled out in May 2017 and Sapri in November 2017. The maintenance cost of both systems in 2018 was charged throughout the year,

2/ TBSP market maintenance – an increase of PLN 0.2 million due to a change of maintenance fees of the trading system TradeImpact in 2018,

3/ market liquidity support – an increase of PLN 0.1 million in market making. As of the beginning of 2018, GPW aligned all market maker agreements with the MiFID II requirements, discontinued bilateral agreements with market makers and launched programmes open to all market makers. In addition, the SuperAnimator TOP7 programme was extended to include all WIG20 companies; under the programme, market makers ranking in the top 3 by value of turnover in a given month are eligible to use specific fee reductions,

4/ advisory – an increase of PLN 1.1 million, mainly driven by costs and support in the strategy update and the review of the valuation of the associate Aquis,

5/ training – an increase of PLN 0.1 million driven by higher spending of the training budget in H1 2018 compared to H1 2018.

Other operating expenses

Other operating expenses amounted to PLN 3.0 million in H1 2018 compared to PLN 2.6 million in H1 2017, representing an increase of PLN 0.4 million or 15.9%. Other operating expenses in H1 2018 included the cost of material and energy consumption at PLN 1.6 million, industry organisation membership fees at PLN 0.3 million, insurance at PLN 0.2 million, business travel at PLN 0.7 million and conference participation at PLN 0.2 million. The cost of business travel reported the highest increase year on year in H1 2018 by 78.2% or PLN 0.3 million, mainly due to the cost of international travel. The increase in the cost of business travel follows from a focus on the development of relations with counterparties and investors and from GPW's efforts to identify new opportunities of development.

OTHER INCOME AND EXPENSES

Other income of the Group amounted to PLN 1.1 million in H1 2018 compared to PLN 0.4 million in H1 2017. Other income includes damages received, gains on the sale of property, plant and equipment, medical services reinvoiced to employees (PLN 0.2 million), an annual correction of input VAT at PLN 0.4 million, as well as other income at PLN 0.4 million including mainly TGE's revenue from PSE in respect of the PCR (Price Coupling of Regions) project at PLN 0.3 million.

Other expenses of the Group amounted to PLN 4.3 million in H1 2018 compared to PLN 5.3 million in H1 2017, representing a decrease of PLN 0.9 million. Other expenses include donations paid, losses on the sale of property, plant and equipment, revaluation write-downs of receivables, and provisions against damages. Donations stood at PLN 1.6 million in H1 2018 compared to PLN 3.4 million in H1 2017. Donations included GPW's donation of PLN 1.5 million to the Polish National Foundation, PLN 136 thousand to the GPW Foundation, and PLN 1 thousand to Caritas.

As of 1 January 2018, following alignment with IFRS 9, the Group recognises a separate profit and loss account line: impairment losses on receivables, without a restatement of comparative figures (exemption under IFRS 9 7.2.15). Impairment losses on receivables are measured on the basis of expected credit loss in the lifetime of debt; the detailed description of the valuation of expected credit loss is presented in the financial section of the report for the six-month period ended 30 June 2018. The expected credit loss charged to the Group's results was PLN 1.9 million in H1 2018 vs. PLN 0.6 million in H1 2017.

FINANCIAL INCOME AND EXPENSES

Financial income of the Group amounted to PLN 50.1 million in H1 2018 compared to PLN 2.9 million in H1 2017, representing an increase of PLN 47.1 million. The high financial income in H1 2018 was driven by GPW's sale of the stake in the associate Aquis.

O 8 June 2018, in connection with an IPO, shares of the associate Aquis Exchange Limited were allocated. GPW held 20.31% of votes and economic rights. As a result, GPW sold Aquis shares at GBP 2.69 per share on 14 June 2018. The value of the sale of GPW's stake in Aquis is GBP 12,396,327 gross. The sale of the stake is shown in GPW's accounts at the FX rate of GBP/PLN 4.8582. The financial income on the transaction recognised in the consolidated accounts is PLN 45.4 million.

In addition, financial income includes mainly interest on bank deposits and positive FX differences. Income from interest on bank deposits and current accounts stood at PLN 2.9 million in H1 2018,

an increase of PLN 0.1 million year on year. The Group earned an income from Treasury bonds held at PLN 0.4 million.

Financial expenses of the Group amounted to PLN 4.3 million in H1 2018 compared to PLN 10.0 million in H1 2017, representing a decrease of PLN 5.7 million.

The decrease of financial expenses year on year in H1 2018 was due to the recognition of PLN 4.6 million of interest on outstanding VAT in TGE for 2011-2016 in H1 2017.

Interest cost of GPW's issued bonds (including the cost of the issue recognised over time) was the biggest item of financial expenses and stood at PLN 3.8 million in H1 2018 compared to PLN 3.7 million in H1 2017.

The series C bonds are fixed-rate bonds at an interest rate of 3.19% p.a. The series D and E bonds are floating-rate bonds whose interest rate is equal to WIBOR 6M plus a margin. The margin on the series D and E bonds is 0.95%. Interest on the bonds is paid semi-annually. The series D and E bonds are due for redemption on 31 January 2022.

The interest rate on the series D and E bonds was 2.76% in H1 2018 and in 2017.

In addition, TGE recognised interest on a bank loan taken to pay the outstanding tax in 2017. The interest stood at PLN 0.5 million in H1 2017. There was no such interest cost in H1 2018.

SHARE OF PROFIT OF ASSOCIATES

The Group's share of profit of associates stood at PLN 5.2 million in H1 2018 compared to PLN 4.5 million in H1 2017. The increase was driven mainly by a higher profit of KDPW Group (PLN 5.9 million) and a lower loss of the associate Aquis (PLN 0.9 million loss in Q1 2018).

The Group's share of the KDPW Group profit was PLN 5.9 million in H1 2018 compared to PLN 5.5 million in H1 2017.

The share in the net profit of Centrum Giełdowe was PLN 0.3 million in H1 2018 compared to PLN 0.6 million in H1 2017.

Aquis Exchange Limited became an associate on GPW's acquisition of the second tranche of shares in February 2014. GPW held 22.99% of shares and 20.31% of economic and voting rights as at 31 December 2017.

The Group's share of the loss of Aquis Exchange Ltd was PLN 0.9 million in H1 2018. The loss was recognised in Q1 2018. GPW sold its stake in Aquis in Q2 2018 and the gains on the sale were recognised in financial income.

Table 21: Profit / (Loss) of associates

	Six-month period ended
PLN'000	30 June 2018	30 June 2017	v s H1 2017)	v s H1 2017)
KDPW S.A. Group	17,601	16,473	1,128	6.9%
Centrum Giełdowe S.A.	1,106	2,570	(1,464)	-57.0%
Aquis Exchange Ltd	(4,548)	(7,822)	3,274	-41.9%
Total	14,160	11,221	2,939	26.2%

Source: Company

Table 22: GPW's share of profit / (loss) of associates

		Six-month period ended		Change (%) (H1 2018
PLN'000	30 June 2018	30 June 2017	v s H1 2017)	v s H1 2017)
KDPW S.A. Group	5,867	5,492	375	6.8%
Centrum Giełdowe S.A.	274	637	(363)	-56.9%
Aquis Exchange Ltd	(924)	(1,589)	665	-41.9%
Total	5,218	4,540	678	14.9%

Source: Company

INCOME TAX

Income tax of the Group was PLN 24.4 million in H1 2018 compared to PLN 17.2 million in H1 2017. The effective income tax rate in the periods under review was 18.5% and 19.8%, respectively, as compared to the standard Polish corporate income tax rate of 19%.

Income tax paid by the Group was PLN 22.8 million in H1 2018 compared to PLN 31.4 million in H1 2017. The lower amount of income tax paid was due to the final payment in Q1 2017 of the income tax for 2016, paid during the year as withholding tax, which increased the amount of tax paid in Q1 2017.

On 28 September 2016, the following companies: Giełda Papierów Wartościowych w Warszawie S.A., Towarowa Giełda Energii S.A., BondSpot S.A. and GPW Centrum Usług S.A., entered into a notarised agreement creating the GPW Tax Group ("GPW TG" or "TG") for a period of three tax years from 1 January 2017 to 31 December 2019.

The companies participating in TG are not treated individually but collectively as one corporate income taxpayer under the Corporate Income Tax Act. Such taxpayer's income is determined as the surplus of the sum of incomes of the companies participating in TG over the sum of their losses.

While income taxes of the companies participating in TG are no longer paid individually, the companies are still required to individually pay other taxes including VAT and local taxes.

V. Atypical factors and events

GPW as the organiser of WIBID and WIBOR reference rate fixings

The GPW Group acting through its subsidiary GPW Benchmark expanded its services as of 30 June 2017 following the take-over of the function of organiser and calculation agent of WIBID and WIBOR reference rate fixings from the Financial Markets Association ACI Polska. The new WIBID and WIBOR reference rate documentation implemented in February 2018 complies with the requirements of Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds.

The decision of GPW to take over the functions of the organiser of reference rate fixings followed a proposal extended by the Association ACI Polska to GPW. In view of Regulation (EU) 2016/1011, ACI Polska decided that it was unable to comply with the requirements of the Regulation and approached GPW with a proposal to transfer the functions of the organiser of WIBID and WIBOR fixings.

On 1 May 2018, GPW Benchmark S.A. introduced the Agreement for Use of WIBID and WIBOR Reference Rates under which the rates shall be used in financial instruments and contracts under the Regulation exclusively on the terms of the Agreement.

The take-over of the responsibilities for WIBID and WIBOR takes place in phases including: starting the organisation of fixings, which took place on 30 June 2017; aligning the documentation, completed with the implementation of the model agreement as of 1 May 2018; review of the reference rate calculation methodology; and obtaining the authorisation to perform the functions of administrator.GPW's decision to take over the organisation of WIBID and WIBOR rate fixings is an important step in its history. While GPW previously focused on trade in capital and commodity market instruments, it now expands to financial market services.

GPW takes over the organisation of reference rate fixings in collaboration with the banks participating in the fixings. This is particularly relevant in view of the role of the banks in the process and the scope of use of reference rates in the banks' business.

Sale of an associate

On 19 February 2018, the Management Board of GPW decided to start negotiations of boundary conditions of a potential sale of shares of the associate Aquis Exchange ("Aquis"), taken up by GPW under an agreement of 19 August 2013, which authorised GPW to acquire a 30% stake in Aquis. The transaction price was GBP 5 million. In 2016, the associate completed several issues of shares without the participation of GPW. GPW held 20.31% of voting and economic rights as at 31 December 2017 and as at the date of the sale.

On 23 March 2018, the Management Board of GPW approved the boundary conditions of a potential sale expecting that the value of the stake in Aquis would be no less than GBP 11,475,000. However, the final value of the transaction depended on market conditions and an IPO of Aquis.

On 23 March 2018, the GPW Supervisory Board passed a resolution approving the sale of the stake in the associate Aquis Exchange. On 23 April 2018, the Extraordinary General Meeting of GPW approved the sale of 384,025 shares of associate Aquis.

On 8 June 2018, in connection with an IPO, shares of the associate Aquis Exchange Limited were allocated. GPW held 20.31% of voting and economic rights in the associate Aquis Exchange Limited. In preparation for the IPO, Aquis allocated shares in order to reduce the par value per share as required to bring the IPO in line with the standards of trading in shares of public companies. As a

result, the number of shares held by GPW increased from 384,025 shares to 4,608,300 shares. GPW sold Aquis shares at GBP 2.69 per share on 14 June 2018. The value of the sale of GPW's stake in Aquis was GBP 12,396,327. The gains on the sale of the shares of the associate Aquis at PLN 45,395 thousand are shown under financial income in the statement of comprehensive income as at 30 June 2018.

VI. Group's assets and liabilities structure

The balance-sheet total of the Group was PLN 1,272.0 million as at 30 June 2018, representing an increase compared to PLN 1,212.7 million as at 30 June 2017.

ASSETS

The Group's non-current assets stood at PLN 578.6 million representing 45% of total assets as at 30 June 2018 compared to PLN 596.4 million or 52% of total assets as at 31 December 2017 and PLN 597.2 million or 49% of total assets as at 30 June 2017. The decrease in the share of noncurrent assets in total assets was due to the sale of the stake in the associate Aquis in June 2018. Those assets were reclassified from investments in associates to assets held for sale as at the end of Q1 2018. The reclassification was triggered by the sale of the stake in the UK company initiated in February 2018. The Aquis assets had been sold as at 30 June 2018.

The Group's current assets stood at PLN 693.4 million representing 55% of total assets as at 30 June 2018 compared to PLN 550.7 million or 48% of total assets as at 31 December 2017 and PLN 615.5 million or 51% of total assets as at 30 June 2017.

Current assets increased by 25.9% year to date as at 30 June 2018. The increase of the assets as at 30 June 2018 was mainly driven by an increase of cash following the sale of the stake in the associate Aquis at a gain as well as additional cash flows from operating activities.

Trade receivables as at 30 June 2018 increased moderately compared to 31 December 2017 but decreased compared to 30 June 2017. The increase in the GPW Group's receivables was driven by the recognition of VAT receivables of PLN 17.7 million in IRGiT. The high amount due from the Tax Office results from a surplus of purchase transactions of foreign entities over intra-Community sale transactions. As a result, the input VAT is greater than the VAT refund due. IRGiT has no control of VAT reported as input or refund because this depends solely on the type of cleared transactions on TGE.

The decrease of receivables year on year in H1 2018 was driven by the payment of receivables under correction invoices issued by TGE following a change of its VAT policy applicable to certain services provided by TGE. The receivables in respect of corrected VAT stood at PLN 69.7 million.

As at 30 June 2018, the GPW Group recognised PLN 110.8 million of financial assets measured at amortised cost, including financial instruments purchased by GPW. On 17 January 2018, 12 February 2018 and 22 June 2018, the Company purchased corporate bonds in a total nominal amount of PLN 73 million. The purchase of the debt added PLN 72.2 million to its assets (as at 30 June 2018), which represents the discounted value of the bonds equal to the purchase price in those transactions. The bonds are due for redemption on 17 July 2018, 10 August 2018 and 21 December 2018, respectively.

On 29 March 2018, GPW purchased 38 thousand certificates of deposit at an issue price of PLN 1 thousand per certificate; the purchase price was PLN 38.0 million; the interest period is from the date of purchase to 1 October 2018. The end date of the interest period is the date of interest payment in an amount equal to WIBOR as at 27 March 2018 plus negotiated interest. These transactions diversify the sources of GPW's financial income to generate income greater than what is available from bank deposits. The Company invests in investment grade bank debt, which mitigates the risk of issuer's default.

The increase of cash and cash equivalents year to date, which was however smaller than the gains on the sale of the stake in Aquis combined with the generated cash flows, was due to the purchase of debt described above.

IFRS 9 Financial Instruments effective as of 1 January 2018 changes the existing classification of financial assets. Under the new standard, financial assets held by the Group, i.e., minority interest in Sibex and Innex, are presented as financial assets measured at fair value through other comprehensive income. The GPW Group recognised PLN 204 thousand as updated value of shares of Sibex as at 30 June 2018.

Table 23: Consolidated statement of financial position of the Group at the end of selected periods (assets)

	As at
PLN'000	30 June 2018	%	31 December 2017	%	30 June 2017	%
Non-current assets	578,568	45%	596,354	52%	597,220	49%
Property, plant and equipment	108,245	9%	110,784	10%	113,777	9%
Intangible assets	262,542	21%	267,991	23%	271,380	22%
Investment in associates	199,929	16%	207,389	18%	201,590	17%
Deferred tax assets	1,800	0%	3,803	0%	3,349	0%
Available-for-sale financial assets	-	0%	271	0%	278	0%
Financial assets measured at fair value through other comprehensive income	204	0%	-	0%	-	0%
Non-current prepayments	5,848	0%	6,116	1%	6,846	1%
Current assets	693,410	55%	550,699	48%	615,476	51%
Inventory	60	0%	56	0%	53	0%
Corporate income tax receivables	71	0%	71	0%	71	0%
Trade and other receivables	68,509	5%	64,096	6%	89,069	7%
Contract assets	1,946	0%	-	0%	-	0%
Financial assets measured at amortised cost	110,840	9%	-	0%	-	0%
Cash and cash equivalents	511,984	40%	486,476	42%	526,283	43%
Total assets	1,271,978	100%	1,147,053	100%	1,212,696	100%

Source: Condensed Consolidated Interim Financial Statements

EQUITY AND LIABILITIES

The equity of the Group stood at PLN 826.5 million representing 65% of the Group's total equity and liabilities as at 30 June 2018 compared to PLN 811.5 million or 71% of total equity and liabilities as at 31 December 2017 and PLN 724.6 million or 60% of the total equity and liabilities as at 30 June 2017.

Non-current liabilities of the Group stood at PLN 256.5 million representing 20% of the Group's total equity and liabilities as at 30 June 2018 compared to PLN 260.0 million or 23% of total equity and liabilities as at 31 December 2017 and PLN 258.8 million or 21% of the total equity and liabilities as at 30 June 2017. The Group's non-current liabilities include GPW's liabilities under outstanding bonds. The decrease of non-current liabilities year to date in H1 2018 was due to a reduction of provisions against deferred income tax by 44.6%.

Current liabilities of the Group stood at PLN 189.0 million representing 15% of the Group's total equity and liabilities as at 30 June 2018 compared to PLN 75,6 million or 7% of total equity and liabilities as at 31 December 2017 and PLN 229.3 million or 19% of the total equity and liabilities as at 30 June 2017.

Current liabilities as at 30 June 2018 increased year to date, mainly due to the recognition of dividend payment due to the GPW shareholders under other current liabilities. The dividend amount is PLN 92.3 million. Furthermore, other current liabilities included TGE's VAT liability at PLN 24.5 million.

Table 24: Consolidated statement of financial position of the Group at the end of selected periods (equity and liabilities)

	As at
PLN'000	30 June 2018	%	31 December 2017	%	30 June 2017	%
Equity	826,499	65%	811,481	71%	724,591	60%
Share capital	63,865	5%	63,865	6%	63,865	5%
Other reserves	1,194	0%	1,347	0%	1,106	0%
Retained earnings	760,857	60%	745,696	65%	659,085	54%
Non-controlling interests	583	0%	573	0%	535	0%
Non-current liabilities	256,484	20%	259,951	23%	258,780	21%
Liabilities under bond issue	243,767	19%	243,573	21%	243,378	20%
Employee benefits payable	1,239	0%	1,454	0%	1,838	0%
Accruals and deferred income	5,313	0%	5,592	0%	6,064	1%
Deferred income tax liability	3,941	0%	7,108	1%	5,276	0%
Other liabilities	2,224	0%	2,224	0%	2,224	0%
Current liabilities	188,995	15%	75,621	7%	229,325	19%
Liabilities under bond issue	1,899	0%	1,938	0%	1,896	0%
Trade payables *	18,775	1%	21,303	2%	3,496	0%
Employee benefits payable	10,525	1%	12,958	1%	8,060	1%
Finance lease liabilities	-	0%	31	0%	64	0%
Deferred income tax liability	8,688	1%	6,012	1%	7,597	1%
Credits and loans	-	0%	-	0%	59,958	5%
Performance obligations	22,375	2%	-	0%	-	0%
Accruals and deferred income *	563	0%	7,386	1%	37,194	3%
Provisions for other liabilities and charges	68	0%	210	0%	318	0%
Other current liabilities	126,102	10%	25,783	2%	110,742	9%
Total equity and liabilities	1,271,978	100%	1,147,053	100%	1,212,696	100%

Source: Condensed Consolidated Interim Financial Statements

CASH FLOWS

The Group generated positive cash flows from operating activities at PLN 87.3 million in H1 2018 compared to positive cash flows of PLN 34.9 million in H1 2017. The high increase of the positive cash flows from operating activities in H1 2018 was mainly driven by the net profit combined with an increase of receivables and a decrease of income tax paid.

The cash flows from investing activities were negative at PLN 57.9 million in H1 2018 compared to negative cash flows of PLN 9.9 million in H1 2017. The negative cash flows were driven by investments in certificates of deposit at PLN 110.2 million, investments in property, plant and equipment and intangible assets at PLN 8.6 million and the sale of assets (Aquis) at PLN 57.5 million.

The cash flows from financing activities were negative at PLN 3.7 million in H1 2018 compared to positive cash flows of PLN 54.7 million in H1 2017. The negative cash flows from financing activities in H1 2018 were driven by the payment of interest on bonds at PLN 3.7 million. The positive cash flows in H1 2017 were mainly driven by a loan taken by TGE to pay outstanding tax liabilities.

Table 25: Consolidated cash flows

	Cash flows for the six-month period ended
PLN'000	30 June 2018	30 June 2017
Cash flows from operating activities	87,319	34,910
Cash flows from investing activities	(57,861)	(9,930)
Cash flows from financing activities	(3,686)	54,720
Net increase / (decrease) in cash	25,772	79,700
Impact of change of fx rates on cash balances in foreign currencies	(264)	(231)
Cash and cash equivalents - opening balance	486,476	446,814
Cash and cash equivalents - closing balance	511,984	526,283

Source: Condensed Consolidated Interim Financial Statements

CAPITAL EXPENDITURE

The Group's total capital expenditure in H1 2018 amounted to PLN 8.6 million including expenditure for property, plant and equipment at PLN 4.1 million and expenditure for intangible assets at PLN 4.5 million. The Group's total capital expenditure in H1 2017 amounted to PLN 13.3 million including expenditure for property, plant and equipment at PLN 5.3 million and expenditure for intangible assets at PLN 8.0 million.

Contracted investment commitments for property, plant and equipment were PLN 640 thousand as at 30 June 2018, including mainly restructuring of GPW offices and addition of cables to the server room. Contracted investment commitments for intangible assets were PLN 1,171 thousand, including mainly the GPW trading surveillance system and the TGE market surveillance system.

Contracted investment commitments for property, plant and equipment were PLN 1,226 thousand as at 31 December 2017, including mainly the acquisition of CISCO switches in TGE. Contracted investment commitments for intangible assets were PLN 1,979 thousand, including mainly the trading surveillance system and the acquisition of Microsoft licences for the GPW Group.

Contracted investment commitments for property, plant and equipment were PLN 502 thousand as at 30 June 2017, including mainly restructuring of GPW offices. Contracted investment commitments for intangible assets were PLN 103 thousand, including mainly the implementation of the financial and accounting system AX 2012 with new modules, consolidation and budgeting, as well as a document flow system in GPW.

VII. Ratio analysis

DEBT AND FINANCING RATIOS

In the period covered by the financial statements, the debt of the Group posed no threat to its going concern and capacity to meet liabilities on time. The ratio of net debt to EBITDA remained negative in the periods under review as liquid assets of the GPW Group exceeded interest-bearing liabilities (negative net debt). The debt to equity ratio decreased year on year in H1 2018 due to an increase of the equity and a decrease of debt of the Group. TGE held a loan of PLN 60 million taken to pay its tax liabilities in H1 2017. The loan was fully repaid in 2017.

LIQUIDITY RATIOS

The current liquidity ratio was 3.7 as at 30 June 2018. The year-on-year increase of the ratio was due to a decrease of current liabilities, including mainly outstanding VAT for 2011-2016. The current liquidity ratio remained safe.

The coverage ratio of interest costs under the bond issue was stable year on year in H1 2018. The Group generated cash flows from operating activities which were several times higher than necessary to cover current liabilities under the bond issue.

PROFITABILITY RATIOS

The profitability ratios at operating profit level decreased moderately year on year, as shown in the table below, due to a decrease of operating profit. However, the profitability ratios at net profit level improved year on year as a result of a higher net profit.

Table 26: Key financial indicators of GPW Group

		As at - For the six-month period ended
		30 June 2018	30 June 2017
Debt and financing ratios
Net debt / EBITDA (for a period of 12 months)	1), 2)	(1.3)	(1.1)
Debt to equity	3)	29.7%	42.1%
Liquidity ratios
Current liquidity	4)	3.7	2.7
Coverage of interest on bonds	5)	26.8	29.0
Return ratios
EBITDA margin	6)	56.2%	57.6%
Operating profit margin	7)	46.9%	50.1%
Net profit margin	8)	62.3%	39.0%
Cost / income	9)	51.2%	47.2%
ROE	10)	25.0%	20.4%
ROA	11)	15.6%	11.9%

1) Net debt = interest-bearing liabilities less liquid assets of GPW Group (as at balance-sheet date)

2) EBITDA = GPW Group operating profit + depreciation and amortisation (for a period of 12 months; net of the share of profit of associates)

3) Debt to equity = interest-bearing liabilities / equity (as at balance-sheet date)

4) Current liquidity = current assets / current liabilities (as at balance-sheet date)

5) Coverage of interest on bonds = EBITDA / interest on bonds (interest paid and accrued for a period of 6 months)

6) EBITDA margin = EBITDA / GPW Group revenue (for a period of 6 months)

7) Operating profit margin = GPW Group operating profit / GPW Group revenue (for a period of 6 months)

8) Net profit margin = GPW Group net profit / GPW Group revenue (for a period of 6 months)

9) Cost / income = GPW Group operating expenses / GPW Group revenue (for a period of 6 months)

10) ROE = GPW Group net profit (for a period of 12 months) / Average equity at the beginning and at the end of the last 12 month period

11) ROA = GPW Group net profit (for a period of 12 months) / Average total assets at the beginning and at the end of the last 12 month period

Source: Company

VIII. SEASONALITY AND CYCLICALITY OF OPERATIONS

Share prices and the value of trading are significantly influenced by local, regional and global trends impacting the capital markets, which determines the number and size of new issues of financial instruments and the activity of investors on GPW. As a result, the revenue of the Group is cyclical.

Trading in certificates of origin on TGE is subject to some seasonality. The volume of trade in property rights on the property rights market operated by TGE and the activity of participants of the register of certificates of origin are largely determined by the obligation imposed on energy companies which sell electricity to final consumers and have to cancel a certain quantity of certificates of origin in relation to the volume of electricity sold in the year. The percentage of certificates of origin which must be cancelled is fixed for every year in regulations of the Minister of the Economy.

According to the Energy Law, the obligation has to be performed until 30 June. As a result, trading in the first half of the year is relatively higher than in the second half of the year.

The issuance of certificates of origin also intensifies in Q1 and in Q4 of each year. Certificates of origin are subject to mandatory cancellation within time limits set in the energy market regulations.

Trading in energy on the Commodity Forward Instruments Market operated by TGE is not distributed evenly over the year. It is seasonal in that trading is relatively low in the first half of the year compared to the second half of the year. This is because the supply side is awaiting information about the costs of electricity generation (including the cost of fuel) in the first half of the year. The demand side, in turn, needs time to determine its demand for the next year based on the demand of its clients.

SYSTEM OF FINANCING CAPITAL MARKET SUPERVISION

The Act of 12 June 2015 amending the Capital Market Supervision Act and certain other Acts largely extended the list of entities required to finance supervision (by adding, among others, banks, insurers, investment funds, public companies, brokerage houses and foreign investment firms) and changed the amount of contributions of entities. The Act was signed into law by the President of Poland on 31 July 2015 and promulgated in the Journal of Laws on 31 August 2015. A Regulation of the Minister of Finance effective as of 1 January 2016 determines among others the calculation method as well as the terms and conditions of the payment of fees by relevant entities. As a result, the cost of fees paid by the GPW Group was reduced significantly. The fee to PFSA was reduced to PLN 9.1 million in 2016, compared to PLN 22.0 million in 2015; the fee for the Group was PLN 5.6 million in 2017.

Following an amendment of regulations governing fees paid to cover the cost of supervision of the capital market and in view of the provisions of an interpretation of the International Financial Reporting Interpretations Committee (IFRIC 21), the GPW Group has decided to change the timing of recognition of liabilities in respect of fees due to PFSA and of charging the fees to costs. Until the end of 2015, GPW recognised 1/12 of the annual fee due to PFSA in each month of the year. According to IFRIC 21, the entity should recognise liabilities in respect of fees due to PFSA at the date of the obligating event. The obligating event is the business subject to the fees due to PFSA carried out as at the 1 January of each year. Consequently, the total estimated amount of the annual fees due to PFSA will be charged to the results of the GPW Group's results in the first quarter of each year.

The Chairperson of the Polish Financial Supervision Authority publishes the fees and the indicators necessary to calculate the fees in a public communique promulgated in the Official Journal of the Polish Financial Supervision Authority by 31 August of each calendar year. On that basis, the entities obliged to pay the fee will calculate the final amount of the annual fee due for the year and pay the fee by 30 September of the calendar year.

In connection with the aforementioned changes related to supervision fees paid to PFSA and the method of their calculation, the amounts of the fees may change from year to year, as demonstrated by the amount of the fees paid in 2016 and 2017. The Group's fee due to PFSA stood at PLN 9.1 million in 2016 and PLN 5.6 million in 2017, impacting the year's financials of the Group. In 2018, the provisions set up in Q1 for the market supervision fee due from the GPW Group stood at PLN 9.0 million. The final amount of the fee will be determined in August 2018.

IX. Other information

CONTINGENT LIABILITIES AND ASSETS

The GPW Group had no contingent liabilities or assets as at 30 June 2018.

PENDING LITIGATION

According to the Company's best knowledge, there is no litigation pending against the parent entity or other companies of the Group before a court, an arbitration body or a public administration body concerning liabilities or debt with a value of at least 10% of the Company's equity.

RELATED PARTY TRANSACTIONS

In H1 2018, GPW and the associates of GPW did not make any significant transactions on terms other than at arm's length.

In June 2017, TGE granted to InfoEngine a PLN 835 thousand loan maturing on 30 June 2022. The interest rate on the loan is 3.3%.

GUARANTIES AND SURETIES GRANTED

As at 30 June 2018, the subsidiary TGE hold a bank guarantee of EUR 7.8 million issued to Nord Pool by a bank in respect of payments between TGE and Nord Pool in Market Coupling for the period from 1 July 2017 to 30 June 2018. In June 2018, a new bank guarantee was issued for TGE in favour of Nord Pool at EUR 3.6 million valid from 1 July 2018 to 30 June 2019 and another guarantee of EUR 3.6 million valid from 1 December 2018 to 30 April 2019.

The Group granted and accepted no other guarantees and sureties in H1 2018.

FEASIBILITY OF PREVIOUSLY PUBLISHED FORECASTS

The Group did not publish any forecasts of 2018 results.

DIVIDEND PAYMENT

On 19 June 2018, the Ordinary General Meeting of GPW passed a resolution to distribute GPW's profit for 2017, including a payment of dividend in the total amount of PLN 92,338 thousand. The dividend per share is PLN 2.20. The dividend record date is 19 July 2018 and the dividend payment date is 2 August 2018.

The liability in respect of the dividend payment is presented in the Company's other current liabilities as at 30 June 2018. The dividend due to the State Treasury is PLN 32,315 thousand.

On 10 May 2018, the Ordinary General Meeting of Centrum Giełdowe S.A. decided to allocate PLN 1,501 thousand from profits to the dividend. The dividend due to GPW was PLN 372 thousand. The dividend was paid on 30 May 2018.

On 29 June 2018, the Ordinary General Meeting of Towarowa Giełda Energii S.A. decided to allocate PLN 69,325 thousand from profits to the dividend. The full dividend was due to GPW. The dividend was paid on 19 July 2018. GPW recognised receivables in respect of the dividend at PLN 69,325 thousand under trade and other receivables as at 30 June 2018.

On 6 July 2018, the Ordinary General Meeting of Krajowy Depozyt Papierów Wartościowych S.A. decided not to pay the dividend from the profits of 2017.

On 29 June 2018, the Ordinary General Meeting of BondSpot S.A. decided not to pay the dividend from the profits of 2017.

EVENTS AFTER THE BALANCE-SHEET DATE WHICH COULD SIGNIFICANTLY IMPACT THE FUTURE FINANCIAL RESULTS OF THE ISSUER

In July 2018, the Warsaw Stock Exchange (GPW), the Polish Development Fund (PFR), Biuro Informacji Kredytowej (BIK) and Instytut Analiz i Ratingu (IAiR) signed an investment agreement which provides for a partnership between GPW, PFR and BIK to develop a recognisable, strong local rating agency based on IAiR. GPW, PFR and BIK expect that the shareholder structure of Instytut Analiz i Ratingu should correspond to the equal equity investment of each of them in IAiR (1/3 each). The planned equity injection will enable the entity to launch full-fledged operation until it breaks even.

The investment agreement signed by GPW, PFR, BIK and IAiR follows an agreement signed on 28 November 2017 concerning co-operation in the development of Instytut Analiz i Ratingu in order to compile and provide credit risk ratings of entities, including mainly issuers of bonds.

The main objective of the joint rating agency will be to build a rating culture in Poland by providing services to a broad group of clients, including mainly small and medium-sized enterprises.

There were no other events after the balance-sheet date which could significantly impact the future financial results of the issuer.

FACTORS WHICH WILL IMPACT THE RESULTS AT LEAST IN THE NEXT QUARTER

On 5 October 2015, the multilateral trading facility (MTF) Turquoise in London started to offer trade in Polish shares participating in WIG30. It cannot be ruled out that some investors will trade in shares of Polish companies on Turquoise.
The Act of 20 February 2015 on renewable energy sources introduces as of 2016 a new system of support for the production of energy from renewable energy sources (RES) based on auctions. Under the Act, entities previously benefiting from support in the form of certificates of origin may switch to the auction system, which would have an adverse impact on volumes on the Property Rights Market and in the Register of Certificates of Origin. In addition, the Act narrows down the group of entities eligible for support in the form of green certificates (excluding large hydropower installations above 5 MW) and imposes restrictions on the issuance of certificates of origin for multi-fuel combustion plants, which may largely limit the number of property rights to green certificates of origin issued by the Register. Furthermore, the Energy Law requires energy companies which produce electricity and are entitled to compensation (to cover stranded costs) for early termination of long-term power and electricity sale contracts to "publicly" sell generated electricity. The number of entities subject to the formal obligation diminishes over time.
Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation or GDPR) took effect on 25 May 2018 and replaced the existing Personal Data Protection Act of 29 August 1997. The new regulations apply to all entities which process personal data in the EU. GDPR introduces a number of changes and extends the scope of obligations of data controllers and processors. The implementation of GDPR in the GPW Group will put in place uniform and coherent solutions including joint data controlling, data retention, and modified security of systems used to process personal data. GDPR introduces the obligation of reporting to the supervisory authority and personal data owners in the event of any data protection violations with 72 hours of identification of the event. In the case of non-compliance with the data disclosure prohibition, personal data controllers may be subject to penalties up to EUR 20 million or 4% of the annual global turnover of the business concerned in the financial year preceding the violation.
On 29 September 2017, the rating agency FTSE Russell announced the promotion of Poland from Emerging Markets to Developed Markets as of September 2018. The new positioning of the Polish capital market could drive additional interest of investors and bring additional capital to the Polish exchange.
Preparation of the Commodity Forward Instruments Market for transformation into an OTF (Organised Trading Facility) under MiFiD II. On 29 December 2017, the Commodity Forward Instruments Market implemented the principle of discretion, which is a special feature of OTFs under MiFID II. The principle of discretion implemented by TGE allows for improvement of market liquidity in less liquid instruments. The principle of discretion allows TGE to retain the turnover of the Commodity Forward Instruments Market and to access OTC trade in the future. Following the introduction of the Act implementing MiFID II (amendment of the Act on Trading in Financial Instruments, known as UC 86), TGE has 12 months to apply to PFSA for a licence to operate an Organised Trading Facility into which the Commodity Forward Instruments Market will be transformed.
The objective of integration of the European market as a coherent harmonised internal market (Internal Electricity Market – IEM) is to enable all market players to participate in cross-border trade in electricity. The target market coupling (MC) solution for day-ahead markets is the Price Coupling of Regions (PCR) developed by Western European exchanges while the Cross-border Intra-day model (XBID) is the MC solution for the intraday market. On 15 November 2017, TGE started production on the European day-ahead market in the

PCR model, which means that TGE became a PCR operator/co-ordinator exchange. TGE is an authorised active market broker as one of five exchanges including TGE, EPEX SPOT, OMIE, GME, NORD POOL. As a result, TGE can launch as a NEMO on the markets with no NEMO monopoly, which presents an opportunity for TGE to expand to foreign markets. At the same time, other NEMOs may launch on the Polish electricity market. Two NEMOs are expected to start operation competitive to TGE on the Polish spot electricity market in October 2018.

The GPW Group presented the updated strategy #GPW2022. Under the strategy, the GPW Management Board acting with the approval of the Exchange Supervisory Board presented 14 strategic initiatives as a roadmap to the improvement of the GPW Group's international position. The key objectives of the strategy #GPW2022 updated by the GPW Management Board are to develop new platforms matching buyers and sellers on the trading floor in Warsaw and to support the Polish economy more than ever before in order to allow Poland to catch up with the world's most advanced economies. The document is a continuation of the previous strategic objectives. The presentation of the initiatives comprised by the strategy #GPW2022 is available on GPW's website at https://www.gpw.pl/pl-spolkastrategia-i-misja

OTHER MATERIAL INFORMATION

Changes on the Management Board of the Company

On 3 April 2018, Michał Cieciórski, Vice-President of the GPW Management Board, resigned his function as of 23 April 2018.

On 23 April 2018, acting at the request of the Treasury of the Republic of Poland, a shareholder representing 35.00% of the share capital of the Company, the Extraordinary General Meeting of the Warsaw Stock Exchange resolved to appoint Marek Dietl as President of the GPW Management Board of the new term of office.

On 12 June 2018, the GPW Supervisory Board decided to appoint Members of the Management Board of the Warsaw Stock Exchange of the new term of office including:

Jacek Fotek as Vice-President of the GPW Management Board,
Izabela Olszewska as Member of the GPW Management Board,
Piotr Borowski as Member of the GPW Management Board,
Dariusz Kułakowski as Member of the GPW Management Board.

The decision appointing Izabela Olszewska and Piotr Borowski was effective subject to the approval of the Polish Financial Supervision Authority for the changes to the Exchange Management Board. On 13 July 2018, the Polish Financial Supervision Authority approved the changes to the Management Board of the Warsaw Stock Exchange and the appointment of Izabela Olszewska and Piotr Borowski to the Exchange Management Board of the new term of office as its Members as of 1 August 2018.

The appointment of Jacek Fotek and Dariusz Kułakowski to the GPW Management Board took effect on 26 July 2018, the start date of the new term of office of the GPW Management Board.

On 19 June 2018, the Ordinary General Meeting of the Warsaw Stock Exchange elected Janusz Krawczyk as a new Member of the Supervisory Board of the Warsaw Stock Exchange,

On 19 June 2018, GPW was notified of the resignation of Wojciech Nagel as Chairman of the Exchange Supervisory Board as of 19 June 2018 due to his plans to accept new professional engagements.

On 16 July 2018, the Exchange Supervisory Board appointed Jakub Modrzejewski, former Deputy Chairman of the Exchange Supervisory Board, as Chairman of the Exchange Supervisory Board, and appointed Janusz Krawczyk as Deputy Chairman of the Exchange Supervisory Board.

In June 2018, Marek Dietl, President of the GPW Management Board, was elected a Member of the Board of the Federation of European Securities Exchanges (FESE). FESE represents public regulated markets. FESE has 33 full members in 27 countries as well as observer members.

In the opinion of the Company, in H1 2018, there were no significant events or circumstances, other than those presented in this Report, which would be material to an evaluation of the Company's or the Group's position with regard to its human resources, assets, financial position, financial results and capacity to meet obligations.

X. Appendices

Condensed Consolidated Interim Financial Statements for the six-month period ended 30 June 2018 and the auditor's review report

Condensed Separate Interim Financial Statements for the six-month period ended 30 June 2018 and the auditor's review report

Condensed Consolidated Interim Financial Statements of the Giełda Papierów Wartościowych w Warszawie S.A. Group

for the six-month period ended 30 June 2018

July 2018

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 4
CONSOLIDATED STATEMENT OF CASH FLOWS 5
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 8
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS 10
1. GENERAL 10
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS 11
3. PROPERTY, PLANT AND EQUIPMENT 17
4. INTANGIBLE ASSETS 17
5. INVESTMENT IN ASSOCIATES 18
6. TRADE AND OTHER RECEIVABLES 19
7. OTHER FINANCIAL ASSETS MEASURED AT AMORTISED COST 19
8. CHANGE OF ESTIMATES 20
9. CASH AND CASH EQUIVALENTS 20
10. BOND ISSUE LIABILITIES 21
11. CONTRACT ASSETS AND CONTRACT LIABILITIES 22
12. ACCRUALS AND DEFERRED INCOME 22
13. OTHER CURRENT LIABILITIES 23
14. INCOME TAX 23
15. RELATED PARTY TRANSACTIONS 24
16. DIVIDEND 26
17. SEASONALITY 26
18. SEGMENT REPORTING 27
19. EFFECT OF THE INITIAL APPLICATION OF NEW STANDARDS 32
20. EVENTS AFTER THE BALANCE SHEET DATE 34

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		As at
	Note	30 June 2018 (unaudited)	31 December 2017
Non-current assets		578 568	596 354
Property, plant and equipment	3	108 245	110 784
Intangible assets	4	262 542	267 991
Investment in associates	5	199 929	207 389
Deferred tax assets		1 800	3 803
Available-for-sale financial assets		-	271
Financial assets measured at fair value through other comprehensive income		204	-
Non-current prepayments		5 848	6 116
Current assets		693 410	550 699
Inventories		60	56
Corporate income tax receivable		71	71
Trade and other receivables	6	68 509	64 096
Contract assets	11	1 946	-
Trade and other receivables	7	110 840	-
Cash and cash equivalents	9	511 984	486 476
TOTAL ASSETS		1 271 978	1 147 053

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

		As at
	Note	30 June 2018 (unaudited)	31 December 2017
Equity		826 499	811 481
Equity of the shareholders of the parent entity		825 916	810 908
Share capital		63 865	63 865
Other reserves		1 194	1 347
Retained earnings		760 857	745 696
Non-controlling interests		583	573
Non-current liabilities		256 484	259 951
Liabilities on bonds issue	10	243 767	243 573
Employee benefits payable	8	1 239	1 454
Accruals and deferred income	12	5 313	5 592
Deferred tax liability		3 941	7 108
Other non-current liabilities		2 224	2 224
Current liabilities		188 995	75 621
Liabilities on bonds issue	10	1 899	1 938
Trade payables		18 775	21 303
Employee benefits payable	8	10 525	12 958
Finance lease liabilities		-	31
Corporate income tax payable		8 688	6 012
Contract liabilities	11	22 375	-
Accruals and deferred income	12	563	7 386
Provisions for other liabilities and charges	8	68	210
Other current liabilities	13	126 102	25 783
TOTAL EQUITY AND LIABILITIES		1 271 978	1 147 053

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	Note	Three-month period ended 30 June		Six-month period ended 30 June
		2018 (unaudited)	2017 (unaudited)	2018 (unaudited)	2017 (unaudited)
Revenue		86 647	87 635	172 583	178 669
Operating expenses		(39 993)	(37 765)	(88 353)	(84 280)
Other income		293	31	1 137	361
Impairment losses on receivables		(375)	-	(1 851)	-
Other expenses		(295)	(868)	(2 495)	(5 282)
Operating profit		46 277	49 033	81 021	89 468
Financial income	5	- 48 191	- 1 538	- 50 058	- 2 932
Financial expenses		(2 124)	(2 497)	(4 332)	(10 048)
Share of profit of associates	5	4 472	3 045	5 218	4 540
Profit before income tax		96 816	51 119	131 965	86 892
Income tax expense	14	- (17 705)	- (9 173)	- (24 362)	- (17 200)
Profit for the period		79 111	41 946	107 603	69 692
Gains/(losses) on valuation of available-for-sale financial assets of associates		(156)	71	(154)	(78)
Items that may be reclassified to profit or loss		(156)	71	(154)	(78)
Other comprehensive income after tax		(156)	71	(154)	(78)
Total comprehensive income		78 955	42 017	107 449	69 614
Profit for the period attributable to shareholders of the parent entity		79 110	41 925	107 593	69 646
Profit for the period attributable to non-controlling interests		1	21	10	46
Total profit for the period		79 111	41 946	107 603	69 692
Comprehensive income attributable to shareholders of the parent entity		78 954	41 996	107 439	69 568
Comprehensive income attributable to non-controlling interests		1	21	10	46
Total comprehensive income		78 955 -	42 017 -	107 449 -	69 614 -
Basic/Diluted earnings per share (PLN)		1,88	1,03	2,56	1,66

CONSOLIDATED STATEMENT OF CASH FLOWS

		Six-month period ended 30 June
	Note	2018 (unaudited)	2017 (unaudited)
Cash flows from operating activities:		87 319	34 910
Cash generated from operation before tax		110 155	80 810
Net profit of the period		107 603	69 692
Adjustments:		2 552	11 119
Income tax	14	24 362	17 200
Depreciation of property, plant and equipment	3	8 185	6 553
Amortisation of intangible assets	4	7 732	6 864
Foreign exchange (gains)/losses		264	231
(Profit)/Loss on sale of property, plant and equipment and intangible assets		41	4
Net (profit)/loss on sale of investments	5	(45 395)	-
Financial (income)/expense of available-for-sale financial assets		-	11
Financial (income)/expense on financial assets measured at amortised cost through other comprehensive income		67	-
Financial (income)/expense on other financial assets measured at amortised cost		(603)	-
Income from interest on deposits		(2 903)	(2 788)
Interest on issued bonds		3 811	3 486
Bank loan expense		-	655
Share of (profit)/loss of associates	5	(5 218)	(4 540)
Other		119	4 602

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

		Six-month period ended 30 June
	2018 (unaudited)	2017 (unaudited)
Cash flows from operating activities - continued
Change in assets and liabilities:	12 090	(21 160)
Change in prepayments	268	(1 832)
(Increase)/Decrease of inventories	(4)	4
(Increase)/Decrease of trade and other receivables	(4 672)	24 193
(Increase)/Decrease of contract assets	(1 946)	-
Increase/(Decrease) of trade payables	(2 528)	(2 891)
Increase/(Decrease) of employee benefits payable	(2 648)	(48)
Increase/(Decrease) of contract liabilities	22 375	-
Increase/(Decrease) of accruals and deferred income	(7 102)	29 914
Increase/(Decrease) of other liabilities (excluding investment liabilities and dividend payable)	8 489	(70 485)
Net change in provisions for other liabilities and charges	(142)	(15)
Interest on tax payable (paid)/refunded	(66)	(14 492)
Income tax (paid)/refunded	(22 770)	(31 408)

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

Note	ended 30 June	Six-month period
	2018 (unaudited)	2017 (unaudited)
Cash flows from investing activities:	(57 861)	(9 930)
Purchase of property, plant and equipment and advances for property, plant and equipment	(4 135)	(5 302)
Purchase of intangible assets and advances for intangible assets	(4 485)	(7 996)
Proceeds from sale of property, plant and equipment and intangible assets	175	478
Sale of available-for-sale financial assets	57 546	-
Purchase of other financial assets measured at amortised 7 cost	(110 237)	-
Interest received	2 903	2 788
Dividends received	372	102
Cash flows from financing activities:	(3 686)	54 720
Interest paid	(3 655)	(3 998)
Paid interest on loans and advances	-	(397)
Loans and advances received	-	59 700
Proceeds from bond issue	-	119 929
Redemption of bonds issued	-	(120 484)
Payment of finance lease liabilities	(31)	(30)
Net (decrease)/increase in cash and cash equivalents	25 772	79 700
Impact of fx rates on cash balance in currencies	(264)	(231)
Cash and cash equivalents - opening balance	486 476	446 814
Cash and cash equivalents - closing balance	511 984	526 283

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
		Attributable to the shareholders of	the parent	ent ity	Non
	Share capital	Other reserves	Retained earnings	Total	controlling interests	Total equity
As at 31 December 2017	63 865	1 347	745 696	810 908	573	811 481
Adjustment on initial application of IFRS 9	-	-	(210)	(210)	-	(210)
As at 1 January 2018 (restated)	63 865	1 347	745 486	810 698	573	811 271
Dividends	-	-	(92 338)	(92 338)	-	(92 338)
Transactions with owners recognised directly in equity	-	-	(92 338)	(92 338)	-	(92 338)
Profit for the six-month period ended 30 June 2018	-	-	107 593	107 593	10	107 603
Other comprehensive income	-	(154)	-	(154)	-	(154)
Total comprehensive income for the six-month period ended 30 June 2018 (unaudited)	-	(154)	107 593	107 439	10	107 449
Other changes in equity	-	1	116	117	-	117
As at 30 June 2018 (unaudited)	63 865	1 194	760 857	825 916	583	826 499

		Attributable to the shareholders of the parent ent ity Non
	Share capital	Other reserves	Retained earnings	Total	controlling interests	Total equity
As at 31 December 2016	63 865	1 184	679 678	744 727	525	745 252
Dividends	-	-	(90 239)	(90 239)	(35)	(90 274)
Transactions with owners recognised directly in equity	-	-	(90 239)	(90 239)	(35)	(90 274)
Profit for the year ended 31 December 2017	-	-	156 008	156 008	83	156 091
Other comprehensive income	-	163	-	163	-	163
Total comprehensive income for the year ended 31 December 2017	-	163	156 008	156 171	83	156 254
Other changes in equity	-	-	249	249	-	249
As at 31 December 2017	63 865	1 347	745 696	810 908	573	811 481

	Attributable to the shareholders of the parent ent ity				Non
	Share capital	Other reserves	Retained earnings	Total	controlling interests	Total equity
As at 31 December 2016	63 865	1 184	679 678	744 727	525	745 252
Dividends	-	-	(90 239)	(90 239)	(36)	(90 275)
Transactions with owners recognised directly in equity	-	-	(90 239)	(90 239)	(36)	(90 275)
Profit for the six-month period ended 30 June 2017	-	-	69 646	69 646	46	69 692
Other comprehensive income	-	(78)	-	(78)	-	(78)
Total comprehensive income for the six-month period ended 30 June 2017 (unaudited)	-	(78)	69 646	69 568	46	69 614
As at 30 June 2017 (unaudited)	63 865	1 106	659 085	724 056	535	724 591

Notes to the Condensed Interim Financial Statements

1. General

1.1. Legal status and scope of operations of the entity

The parent entity of the Giełda Papierów Wartościowych w Warszawie S.A. Group ("the Group") is Giełda Papierów Wartościowych w Warszawie Spółka Akcyjna ("Warsaw Stock Exchange", "the Exchange", "GPW", "the Company" or "parent entity") with its registered office in Warsaw, ul. Książęca 4. The Company was established by Notarial Deed on 12 April 1991 and registered in the Commercial Court in Warsaw on 25 April 1991, entry no. KRS 0000082312, Tax Identification Number 526-025-09-72, Regon 012021984. GPW has been listed on GPW's Main Market since 9 November 2010.

The core activities of the Group include organising exchange trading in financial instruments and activities related to such trading. At the same time, the Group pursues activities in education, promotion and information concerning the capital market and organises an alternative trading system. The Group operates the following markets:

GPW Main Market (trade in equities, other equity-related financial instruments and other cash markets instruments as well as derivatives);
NewConnect (trade in equities and other equity-related financial instruments of small and mediumsized enterprises);
Catalyst (trade in corporate, municipal, co-operative, Treasury and mortgage bonds operated by GPW and BondSpot);
Treasury BondSpot Poland (wholesale trade in Treasury bonds operated by BondSpot).

The Group also organises and operates trade on the markets operated by Towarowa Giełda Energii S.A. ("the Polish Power Exchange", "TGE") and InfoEngine S.A.:

Energy Markets (trade in electricity on the Intra-Day Market, Day-Ahead Market, Commodity Forward Instruments Market, Electricity Auctions),
Gas Market (trade in natural gas with physical delivery on the Intra-Day and Day-Ahead Market and the Commodity Forward Instruments Market),
Property Rights Market (trade in property rights in certificates of origin of electricity),
CO² Emission Allowances Market (trade in CO² emission allowances),
OTC (Over-the-Counter) commodity trade platform (complements the offer with OTC commodity trade in electricity, energy biomass and property rights in certificates of origin).

On 23 February 2015, TGE received a decision of the Minister of Finance authorising TGE to operate an exchange and start trade on the Financial Instruments Market. The Financial Instruments Market opened on 4 November 2015.

On 30 June 2017, the GPW Group (through its subsidiary GPW Benchmark S.A.) started the business of calculating and publishing WIBID and WIBOR reference rates, which are used by financial institutions as benchmarks in credit and deposit agreements and bond issues.

The GPW Group also operates:

Clearing House and Settlement System (performing the functions of an exchange settlement system for transactions in exchange-traded commodities),
Trade Operator and Balancing Entity services both types of services are offered by InfoEngine S.A., balancing involves the submission of power sale contracts for execution and clearing of nonbalancing with the grid operator (differences between actual power production or consumption and power sale contracts accepted for execution).

GPW also has a consultant in London whose mission is to support acquisition on the London market, in particular the acquisition of new investors and Exchange Members.

1.2. Approval of the financial statements

The Condensed Consolidated Interim Financial Statements were authorised for issuance by the Management Board of the parent entity on 27 July 2018.

1.3. Composition and activity of the Group

The Warsaw Stock Exchange and its following subsidiaries:

Towarowa Giełda Energii S.A. ("TGE") the parent entity of the Towarowa Giełda Energii S.A. Group ("TGE Group"),
BondSpot S.A. ("BondSpot"),
GPW Benchmark S.A. ("GPWB"), formerly GPW Centrum Usług S.A.,
Instytut Analiz i Ratingu S.A. ("IAiR")

comprise the Warsaw Stock Exchange Group.

The following are the associates over which the Group exerts significant influence:

Krajowy Depozyt Papierów Wartościowych S.A. ("KDPW"), the parent entity of the KDPW S.A. Group ("KDPW Group"),
Centrum Giełdowe S.A. ("CG").

2. Basis of preparation of the financial statements

These Condensed Consolidated Interim Financial Statements of the Giełda Papierów Wartościowych w Warszawie S.A. Group have been prepared according to the International Accounting Standard 34 "Interim Financial Reporting" approved by the European Union. These financial statements do not contain all the information required for complete financial statements prepared under the EU IFRS.

In the opinion of the Management Board of the parent entity, in the notes to the Condensed Consolidated Interim Financial Statements of the Giełda Papierów Wartościowych w Warszawie S.A. Group ("Group"), GPW included all material information necessary for the proper assessment of the assets and the financial position of the Group as at 30 June 2018 and its financial results in the period from 1 January 2018 to 30 June 2018.

These Condensed Consolidated Interim Financial Statements have been prepared on the assumption that the Group will continue as a going concern in the foreseeable future. As at the date of preparation of these Condensed Consolidated Interim Financial Statements, in the opinion of the Management Board of the parent entity, there are no circumstances indicating any threats to the Group's ability to continue operations.

The Group has prepared the Condensed Consolidated Interim Financial Statements in accordance with the same accounting policies as those described in the Financial Statements for the year ended 31 December 2017 other than for changes resulting from the application of new standards as described below. The Condensed Consolidated Interim Financial Statements for the six-month period ended 30 June 2018 should be read in conjunction with the Consolidated Financial Statements for the year ended 31 December 2017.

The following amendments of existing standards adopted by the European Union are effective for the financial statements of the Group for the financial year started on 1 January 2018:

1) IFRS 9 Financial Instruments;
2) IFRS 15 Revenue from Contracts with Customers;
3) Improvements to IFRS (2014 2016);
4) Amendments to IFRS 2 Share-based Payment;
5) IFRIC 22 Foreign Currency Transactions and Advance Consideration;
6) Amendments to IAS 40 Investment Property.

Following the implementation of those standards, the Group's accounting policy described in Notes 2.8 and 2.21 in the financial statements for the year ended 31 December 2017 has been updated as follows:

2.8 Financial assets

2.8.1. Classification and valuation of financial assets

The Group's financial assets are classified into one of three categories:

financial assets measured at amortised cost;
financial assets measured at fair value through profit or loss; or
financial assets measured at fair value through other comprehensive income (OCI).

The assets are classified into those categories on initial recognition. Classification depends on:

the business model of asset portfolio management; and
the contractual terms of the financial asset.

2.8.1.1 Financial assets measured at amortised cost

A financial asset is classified as "Financial assets measured at amortised cost" if the following two conditions are met:

the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal outstanding.

"Financial assets measured at amortised cost" other than trade receivables are measured on initial recognition at fair value plus directly attributable transaction costs. Trade receivables with no significant financing component are measured on initial recognition at transaction price. "Financial assets measured at amortised cost" are subsequently measured at amortised cost according to the effective interest rate method net of impairment.

Interest on financial assets classified as "Financial assets measured at amortised cost" is measured using the effective interest rate method and recognised in the profit or loss of the period as part of financial income.

"Financial assets measured at amortised cost" include:

cash and cash equivalents,
trade receivables,
other receivables, and
other financial assets measured at amortised cost (including corporate bonds and certificates of deposit held to maturity).

2.8.1.2 Financial assets measured at fair value through other comprehensive income

A financial asset is classified as "Financial assets measured at fair value through other comprehensive income" if the following two conditions are met:

the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and to sell financial assets; and
its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal outstanding.

"Financial assets measured at fair value through other comprehensive income" comprise shares in entities over which a Group company does not exercise control or exert significant influence. They are disclosed as non-current assets unless the Group intends to sell them within 12 months after the balance sheet date.

"Financial assets measured at fair value through other comprehensive income" are initially recognised at fair value plus directly attributable transaction costs. After initial recognition, they are measured at fair value and any effect of change in the fair value (other than impairment losses and FX differences) is recognised in other comprehensive income and presented in equity as reserves. On derecognition, the cumulative profit or loss recognised in equity is taken to the profit or loss of the period.

Dividends from equity instruments classified as "Financial assets measured at fair value through other comprehensive income" are disclosed in the profit or loss of the period as part of financial income when a Group company acquires the rights to the respective payments. Changes in the value of equity instruments classified as "Financial assets measured at fair value through other comprehensive income" are disclosed as other comprehensive income.

The fair value of equity instruments listed on an active market derives from the current price. Fair value is determined based on listed prices. If the market for a financial asset is not active (also in respect of non-listed securities), the Group determines the fair value using valuation techniques. These include the use of recent arm's length transactions, reference to transactions in other virtually identical instruments, discounted cash flow analysis, using market information to the maximum extent and relying on information from the Group to the minimum extent.

Fair value hierarchy

The Group classifies the valuation of fair value on the basis of a fair value hierarchy which reflects the significance of valuation input data. The fair value hierarchy includes the following levels:

(unadjusted) trading prices on active markets for identical assets or liabilities (level 1);
input data other than trading prices at level 1, which can be identified or observed for an asset or liability, directly (as prices) or indirectly (calculations based on prices) (level 2); and
input data for an asset or liability not based on observable market data (non-observable data) (level 3).

2.8.2. Impairment of financial assets

At each balance sheet date, the Group recognises impairment (expected credit loss) of financial assets. If there has been a significant increase in credit risk of a financial asset since initial recognition, the Group recognises expected credit loss of the financial asset as an allowance equal to lifetime expected credit losses.

If the credit risk of a financial asset has not increased significantly since initial recognition, the financial asset will attract a loss allowance equal to 12-month expected credit loss.

The Group's impairment allowance for financial assets measured at amortised cost other than trade receivables is equal to the 12-month expected credit loss in view of the low credit risk of such financial instruments. The Group considers cash and cash equivalents, other receivables and other financial assets measured at amortised cost to carry low credit risk because it only accepts entities, including banks and financial institutions, of a high rating and stable market position, i.e., rated above Baa2 by Moody's.

As receivables of the Group have no significant financing component, impairment is measured as an allowance equal to lifetime expected credit losses.

The Group measures expected credit loss of financial assets taking into account:

an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
the time value of money;
reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions

As at the end of each reporting year, based on historical collection of debt from counterparties, the Group performs a statistical analysis of trade receivables by category of clients as follows:

Exchange Members,
issuers, and
other clients.

In the next step, the Group performs a portfolio analysis and calculates for each category of clients a matrix of allowances by age group based on lifetime expected credit losses. The allowance for debt which is not overdue as at the balance sheet date for a group of clients in a time bracket (overdue) is equal to:

value of trade receivables at the balance sheet date, times
client's probability of default.

The expected credit loss (or released allowance) required to adjust the expected credit loss allowance as at the reporting date to the amount that should be recognised is presented in the Group's statement of comprehensive income as gains or losses on impairment.

The expected credit loss allowance for financial assets classified as "Financial assets measured at amortised cost" is shown as a reduction of the gross carrying amount of the financial asset in the statement of financial position.

The expected credit loss allowance for financial assets classified as "Financial assets measured at fair value through other comprehensive income" is shown in other comprehensive income; it does not reduce the carrying amount of the financial asset in the statement of financial position.

The Group decided to implement the standard without a restatement of comparative data (exemption under IFRS 9 7.2.15). Adjustments necessary to implement IFRS 9 are applied as of 1 January 2018 in equity (retained earnings).

2.21 Revenue

2.21.1 Sales revenue

Sales revenue is recognised at transaction price when (or as) the entity transfers control of goods or services to a customer. All bundled goods or services that can be separated under the contract with the customer are recognised separately. Any discounts and rebates of the transaction price are, as a rule, allocated to individual components of bundled products or services. Depending on whether certain criteria are met, revenue is recognised:

over time, in a manner that depicts the entity's performance; or
at a point in time, when control of the goods or services is transferred to the customer.

The Group analyses potential collectability of debt when entering into a contract. If, at the time of entering into a contract, the entity is not likely to receive the amount due for future performance of a commitment, no revenue is recognised until the doubt about the collectability of debt is clarified.

Furthermore, under IFRS 15, costs incurred to acquire the customer and secure the contract are recognised by the Group over time within the period when the benefits flow from the contract.

According to IFRS 15 C3 (b), the GPW Management Board decided to implement the Standard retrospectively with the cumulative effect of initial application at initial application date, i.e., 1 January 2018, through equity according to C7-C8 of the Standard. The analysis did not identify any adjustment of equity on initial application.

According to the simplification allowed by the Standard for retrospective application with the cumulative effect of initial application through equity, the Management Board of the parent entity decided to use the simplification under C7 A (b), i.e., not to apply retrospective restatement of contracts which changed before the date of initial application (1 January 2018).

Sales revenue consists of three main business segments (lines):

Financial market,
Commodity market,
Other (sales) revenue.

Sales revenue from the financial market consists of:

Revenue from trading

Trading revenue consists of the fees collected from Exchange Members on the basis of the Exchange Rules and the Alternative Trading System Rules. Trading fees are the main revenue item in this category. Trading fees depend on the value of transactions, the number of executed orders and the volume of trade and type of traded instruments.

In addition to trading fees, flat-rate fees are charged for access to and use of the IT systems of the Exchange.

Trading revenue on the financial market also includes the revenue of BondSpot from trading on the debt instrument markets operated by BondSpot.

Trading revenue is recognised in the month when the service is provided.

Revenue from issuers

Revenue from issuers comprises the revenue collected from issuers on the basis of the Exchange Rules and the Alternative Trading System Rules. Annual and quarterly fees for the listing of securities are the main revenue item in this category; they are recognised over time on a straight-line basis in the period when the service is provided by the Group. Annual and quarterly fees collected from customers which relate to future periods are presented in the interim financial statements under "Contract liabilities".

In addition, fees for admission to trading as well as other fees are collected from issuers and recognised on an up-front basis when the service is provided.

The Group's listing revenue also includes the revenue of BondSpot from issuers of instruments listed on the debt instrument markets operated by BondSpot. Such revenue is recognised in the month when the service is provided.

Revenue from information services

index licenses and calculations. The sale of stock exchange information is based on separate agreements signed with exchange data vendors, exchange members and other organisations, mainly financial institutions. The Group's revenue from information services also includes the revenue from BondSpot information services. Such revenue is recognised in the month of the sale.

Revenue from the commodity market includes mainly fees charged by TGE under the Towarowa Giełda Energii S.A. Market Rules, by IRGiT under the Exchange Clearing House Rules (mainly for clearing of transactions made on TGE), and by InfoEngine from its activity as trade operator and as technical trade operator.

Revenue from the commodity market includes:

Revenue from trading

Trading revenue consists of fixed fees collected from TGE members for participation in markets and transaction fees on the markets operated by TGE including the Day-Ahead and Intra-Day Market, the Gas Market, the Property Rights Market, the Commodity Forward Instruments Market, the Emission Allowances Market.

Revenue from fixed fees is recognised over time on a straight-line basis in the period when TGE provides the service. Fixed fees collected from clients which relate to future periods are presented in the interim financial statements under "Contract liabilities".

Revenue from operation of the Register of Certificates of Origin and the Register of Guarantees of Origin

The Group's revenue from the operation of the Registers includes fees for services provided to Register members including entry of certificates, issuance of rights, increase or reduction of the balances of rights, cancellation of certificates, entry of guarantees, notification of transfer of guarantees to the end consumer, acceptance of a sale offer, review of an application.

Revenue from the operation of the Registers is recognised in the month when the service is provided.

Revenue from clearing

Clearing revenue is the revenue of IRGiT including:

revenue from fixed fees collected from IRGiT members, which is recognised over time on a straight-line basis in the period when IRGiT provides the service. Fixed fees collected from clients which relate to future periods are presented in the interim financial statements under "Contract liabilities".
revenue from clearing and settlement of exchange transactions on the markets operated by TGE, recognised in the month when the service is provided.
Revenue from information services

Revenue from information services on the commodity market is earned by the parent entity based on separate agreements signed with exchange data vendors, exchange members and other organisations, mainly financial institutions. Such revenue is recognised in the month of the sale.

Other sales revenue is earned on other services provided by the Group including lease of office space and services for the Polish Financial Supervision Authority including provision of an IT application supporting the use of data as well as technical and substantive support. Such revenue is recognised in the month when the service is provided.

The following new standards will apply to the financial statements of the Group for periods starting on or after 1 January 2019:

1) IFRS 16 Leases the estimated impact of the new standard on the financial statements of the Group is presented in Note 2.1.2 of the Consolidated Financial Statements for the year ended 31 December 2017;
2) IFRIC 23 Uncertainty over Income Tax Treatments;
3) Amendments to IFRS 9 Financial Instruments;
4) Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures;
5) Improvements to IFRS 2015-2017.

The critical accounting estimates and judgements used by the Management Board of the parent entity in the application of the Group's accounting policy and the key sources of uncertainty were the same as those used in the Consolidated Financial Statements as at 31 December 2017.

3. Property, plant and equipment

Table 1: Change of the net carrying value of property, plant and equipment by category

	Period of
	Six months ended 30 June 2018 (unaudited)	Twelve months ended 31 December 2017
Net carrying value - opening balance	110 784	119 130
Additions	5 862	7 135
Disposals	(216)	(40)
Depreciation charge	(8 185)	(15 441)
Net carrying value - closing balance	108 245	110 784

Contracted investment commitments for property, plant and equipment were PLN 640 thousand as at 30 June 2018, including mainly restructuring of GPW offices and addition of cables to the server room.

Contracted investments for plant, property and equipment were PLN 1,226 thousand as at 31 December 2017 including the acquisition of CISCO switches in TGE.

4. Intangible assets

Table 2: Change of the net carrying value of intangible assets by category

	Period of
	Six months ended 30 June 2018 (unaudited)	Twelve months ended 31 December 2017
Net carrying value - opening balance	267 991	273 815
Additions	2 283	9 191
Disposals	-	(737)
Amortisation charge	(7 732)	(14 278)
Net carrying value - closing balance	262 542	267 991

Contracted investment commitments for intangible assets amounted to PLN 1,171 thousand as at 30 June 2018 and related mainly to GPW's trading surveillance system and TGE's market surveillance system.

Contracted investments in intangible assets were PLN 1,979 thousand as at 31 December 2017 including mainly the trade surveillance system and the acquisition of Microsoft licences for the GPW Group.

5. Investment in associates

Table 3: Carrying value of investment in associates

	As at
	30 June 2018 (unaudited)	31 December 2017
KDPW S.A. Group	183 028	177 315
Centrum Giełdowe S.A.	16 901	16 999
Aquis Exchange Limited	-	13 075
Total	199 929	207 389

Table 4: Change of the value of investment in associates

	As at/Period of
	Six months ended 30 June 2018 (unaudited)	Twelve months ended 31 December 2017
Opening balance	207 389	197 231
Reclassification to available-for-sale assets	(12 151)	-
Dividends	(372)	(102)
Share of profit (after tax)	5 218	10 059
Share of profit after tax	4 980	10 414
Other additions to/(reductions of) profit	238	(355)
Share in other comprehensive income	(155)	201
Closing balance	199 929	207 389

Sale of a stake in Aquis Stock Exchange

In connection with the planned sale of shares of the company Aquis Exchange Limited, the GPW Management Board reclassified the investment in the associate Aquis at PLN 12,151 thousand to available-for-sale assets as at 31 March 2018. The par value of Aquis shares was reduced during the IPO. As a result, the number of shares held by GPW increased from 384,025 shares as at 31 December 2017 to 4,608,300 shares. GPW sold Aquis shares at GBP 2.69 per share on 14 June 2018. The net receipts on the sale were PLN 57,546 thousand (net of the transaction cost at PLN 2,677 thousand). The carrying value of the asset was PLN 12,151 thousand as at the date of the sale. The gains on the sale of the shares at PLN 45,395 thousand are shown under financial income in the statement of comprehensive income.

6. Trade and other receivables

Table 5: Trade and other receivables

	As at
	30 June 2018 (unaudited)	31 December 2017
Gross trade receivables	44 793	49 161
Impairment allowances for receivables	(4 628)	(2 529)
Total trade receivables	40 165	46 632
Current prepayments	8 054	4 141
Other receivables and advance payments	2 055	389
Receivables in respect of tax settlements	18 235	12 934
incl.: VAT	17 680	12 899
Total other receivables	28 344	17 464
Total trade and other receivables	68 509	64 096

7. Other financial assets measured at amortised cost

According to its policy of investing free cash, as at 30 June 2018, the Group held the following current financial assets:

zero-coupon corporate bonds in a total nominal amount of PLN 73,000 thousand maturing on 17 July 2018, 10 August 2018 and 21 December 2018, acquired for a total price of PLN 72,237 thousand, shown at PLN 72,663 thousand as at 30 June 2018;
certificates of deposit: 38,000 instruments with a principal amount of PLN 1 thousand per certificate, maturing on 1 October 2018, bearing interest at WIBOR 6M as at 27 March 2018 plus 0.05%, shown at PLN 38,177 thousand as at 30 June 2018.

These transactions diversify the sources of financial income to generate income greater than what is available from bank deposits in compliance with the requirements of GPW's investment policy: to invest in secured or investment grade corporate debt at arm's length. The transactions are made at arm's length at the time of the contract. Consequently, the fair value of those instruments is not materially different from their carrying amount as at 30 June 2018.

8. Change of estimates

In the period from 1 January 2018 to 30 June 2018, impairment losses for assets were adjusted as follows:

Table 6: Change of estimates

	[PLN'000]
Impairment allowance as at 31 December 2017	2 529
Adjustment on initial application of IFRS 9*	259
Impairment allowance as at 1 January 2018	2 788
Initial impairment allowances	2 078
Receivables written off during the period as uncollectible	(108)
Reversal of impairment allowances	(130)
Impairment allowance as at 30 June 2018	4 628
* The Group implemented I FRS 9 as of 1 January 2018. The Group us ed the s	implification and did not res tate the

comparative data (I FRS 9 7.2.15). For more information on the application of I FRS 9, s ee Note 19.

Furthermore, in the period from 1 January 2018 to 30 June 2018, there were the following changes in estimates relating to provisions:

provisions against employee benefits (mainly annual bonuses) were reduced by PLN 2,648 thousand (usage of PLN 8,120 thousand, provision additions of PLN 5,666 thousand, releases of PLN 194 thousand);
provisions against litigation and other provisions were reduced by PLN 142 thousand (usage of PLN 75 thousand, releases of PLN 115 thousand, provision additions of PLN 48 thousand).

9. Cash and cash equivalents

Table 7: Cash and cash equivalents

	As at
	30 June 2018 (unaudited)	31 December 2017
Cash	1	1
Current accounts	29 845	40 361
Bank deposits	482 138	446 114
Total cash and cash equivalents	511 984	486 476

Cash and cash equivalents include cash in hand, on-demand bank deposits, other current investments with original maturities up to 1 year, which are highly liquid and easily convertible into a specific amount of cash and not exposed to a significant change of fair value. Bank deposits include bank deposits at PLN 10 million which are restricted cash and an additional tool of risk management in IRGiT.

10. Bond issue liabilities

Table 8: Bond issue liabilities

	As at
	30 June 2018 (unaudited)	31 December 2017
Liabilities under bond issue - non-current:	243 767	243 573
Series C bonds	124 176	124 050
Series D and E bonds	119 591	119 523
Liabilities under bond issue - current:	1 899	1 938
Series C bonds	671	682
Series D and E bonds	1 228	1 256
Total liabilities under bond issue	245 666	245 511

Series C bonds

On 6 October 2015, GPW issued 1,250,000 series C bearer bonds in a total nominal amount of PLN 125,000 thousand. The nominal amount and the issue price was PLN 100 per bond. The series C bonds bear interest at a fixed rate of 3.19 percent per annum. Interest on the bonds is paid semi-annually. The bonds are due for redemption on 6 October 2022 against the payment of the nominal value to the bond holders.

The series C bonds were introduced to the alternative trading system on Catalyst.

Series D and E bonds

On 13 October 2016, the GPW Management Board passed a resolution to issue 1,200,000 unsecured bearer bonds with a nominal value of PLN 100 per bond and a total nominal value of PLN 120,000 thousand. The bonds were issued in January 2017 in two series: series D bonds with a total nominal value of PLN 60,000 thousand and series E bonds with a total nominal value of PLN 60,000 thousand. The issue price of series D bonds addressed to institutional investors was PLN 100 per bond. The issue price of series E bonds addressed to individual investors was from PLN 99.88 to PLN 99.96 (depending on the date of subscription).

The bonds bear interest at a floating rate equal to WIBOR 6M plus a margin of 95 basis points. The interest on the bonds is paid semi-annually. The bonds are due for redemption on 31 January 2022.

The series D and E bonds were introduced to trading on the regulated market Catalyst operated by GPW and in the alternative trading system Catalyst operated by BondSpot.

As at 30 June 2018, the fair value of series C bonds is PLN 128,225 thousand and the fair value of series D and E bonds is PLN 122,160 thousand.

11. Contract assets and contract liabilities

Table 9: Contract assets and contract liabilities

	As at
	30 June 2018 (unaudited)	1 January 2018* (res tated)
Information services and revenue from the calculation of reference rates	1 808	868
Financial market	1 808	868
Other revenue	138	127
Total contract assets	1 946	995
Trading	326	-
Listing	9 475	-
Information services and revenue from the calculation of reference rates	9 555	2 200
Financial market	19 356	2 200
Trading	2 789	2 912
Clearing	-	1 694
Commodity market	2 789	4 606
Other revenue	230	21
Total contract liabilities	22 375	6 827

cumulative ef fect of initial application at 1 January 2018.

Assets in relation to services on the financial market include information services and income from the calculation of reference rates. Those were presented as trade receivables and other receivables as at 31 December 2017. For more information on the initial application of IFRS 15, see Note 19.

Trade receivables are shown in Note 6.

Current contract liabilities relating to services provided on the financial and commodity market include annual and quarterly fees charged from market participants. Those were presented as deferred income as at 31 December 2017. For more information on the initial application of IFRS 15, see Note 19.

Contract liabilities stood at PLN 6,827 thousand as at 1 January 2018, of which PLN 2,567 thousand was recognised as income in the six months ended 30 June 2018.

12. Accruals and deferred income

Non-current deferred income includes a subsidy for assets received by TGE in the PCR project at a carrying amount of PLN 5,872 thousand as at 30 June 2018, including PLN 5,313 thousand presented as non-current and PLN thousand presented as current (for details on the recognition of the subsidy, see Note 18 to the Consolidated Financial Statements of the GPW Group for the year ended 31 December 2017). As at 31 December 2017, the carrying amount of the subsidy was PLN 6,151 thousand, including PLN 5,592 thousand presented as non-current and PLN 559 thousand presented as current.

13. Other current liabilities

Other current liabilities as at 30 June 2018 include mainly GPW's liabilities in respect of the dividend payment at PLN 92,498 thousand, TGE's liabilities in respect of the VAT of the current period (PLN 24,454 thousand), as well as liabilities in respect of margins securing purchase/sale of electricity on the balancing market of InfoEngine (PLN 1,636 thousand). As at 31 December 2017, other current liabilities included TGE's current VAT liabilities at PLN 17,065 thousand, as well as liabilities of InfoEngine in respect of margins securing purchase/sale of electricity on the balancing market at PLN 591 thousand.

14. Income tax

Table 10: Income tax by current and deferred tax

	Six-month period ended 30 June
	2018	2017
Current income tax	25 433	23 141
Deferred tax	(1 071)	(5 941)
Total income tax	24 362	17 200

As required by the Polish tax regulations, the tax rate applicable in 2018 and 2017 is 19%.

Table 11: Reconciliation of the theoretical amount of tax arising from profit before tax and the statutory tax rate with the income tax expense presented in the statement of comprehensive income

	Six-month period ended 30 June
	2018	2017
Profit before income tax	131 965	86 892
Income tax rate	19%	19%
Income tax at the statutory tax rate	25 073	16 509
Tax effect:	(711)	691
Non-tax-deductible expenses	498	1 534
Tax losses of subsidiaries not recognised in deferred tax	62	22
Non-taxable share of profit of associates	(991)	(863)
Other adjustments	(280)	(2)
Total income tax	24 362	17 200

15. Related party transactions

Related parties of the Group include its associates (KDPW S.A. Group, Centrum Giełdowe S.A.) and the State Treasury as the parent entity (holding 35.00% of the share capital and 51.76% of the total number of voting rights as at 30 June 2018), entities controlled and jointly controlled by the State Treasury and entities on which the State Treasury has significant influence. Furthermore, related parties include the key management personnel of the Group.

15.1. Information about transactions with companies which are related parties of the State Treasury

Companies with a stake held by the State Treasury

The Group keeps no records which would clearly identify and aggregate transactions with all entities which are related parties of the State Treasury.

Companies with a stake held by the State Treasury, with which the parent entity enters into transactions, include issuers (from which GPW charges introduction and listing fees) and Exchange Members (from which GPW charges fees for access to trade on the exchange market, fees for access to the GPW IT systems, and fees for trade in financial instruments).

Companies with a stake held by the State Treasury, with which TGE and IRGiT enter into transactions, include members of the markets operated by TGE and members of the Clearing House. Fees are charged from such entities for participation and for trade on the markets operated by TGE, for issuance and cancellation of property rights in certificates of origin, and for clearing.

All trade transactions with entities with a stake held by the State Treasury are concluded in the normal course of business and are carried out on an arm's length basis.

Polish Financial Supervision Authority

The Act of 12 June 2015 amending the Capital Market Supervision Act and certain other Acts has largely extended the list of entities required to finance supervision (to include among others banks, insurers, investment fund companies, public companies, brokers and foreign investment firms) and changed the amount of contributions of entities.

The Regulation of the Minister of Finance which determines among others the calculation method as well as the terms and conditions of the payment of fees by relevant entities to the Polish Financial Supervision Authority took effect as of 1 January 2016. According to the Regulation, the Chairperson of the Polish Financial Supervision Authority publishes the rates and the indicators necessary to calculate the fees in a public communique promulgated in the Official Journal of the Polish Financial Supervision Authority by 31 August of each calendar year. On that basis, the entities obliged to pay the fee will calculate the final amount of the annual fee due for the year and pay the fee by 30 September of the calendar year.

In the six-month period ended 30 June 2018, the operating expenses of the GPW Group included an estimated amount of the annual fee at PLN 9,028 thousand. The fee charged to the expenses of the GPW Group in the six-month period ended 30 June 2017 was PLN 11,357 thousand.

15.2. Transactions with associates

Table 12: Transactions of GPW Group companies with associates

	As at 30 June 2018 (unaudited)		Six-month period ended 30 June 2018 (unaudited)
	Receivables Liabilities *	Sales revenue	Operating expenses
Grupa KDPW S.A.	30	3	23	53
Centrum Giełdowe S.A.	-	16	-	852
Total	30	19	23	905
* I ncluding trade and other payables

Table 13: Transactions of GPW Group companies with associates

	As at 31 December 2017 (unaudited)		Six-month period ended 30 June 2017 (unaudited)
	Receivables	Liabilities	Sales revenue	Operating expenses
Grupa KDPW S.A.	-	-	-	32
Centrum Giełdowe S.A.	-	247	-	586
Aquis Exchange Limited	9	20	10	-
Total	9	267	10	618

During the first six months of 2018 and 2017, there were no write-offs or material impairment allowances created for receivables from associates.

As owner and lessee of office space in the Centrum Giełdowe building, GPW pays rent and operating expenses, including for joint property, to the building manager, Centrum Giełdowe S.A.

In 2018 and 2017, GPW also concluded transactions with the Książęca 4 Street Housing Cooperative of which it is a member. The expenses amounted to PLN 2,035 thousand in the first six months of 2018 and PLN 2,046 thousand in the first six months of 2017.

15.3. Information on remuneration and benefits of the key management personnel (amounts paid and provisions)

The management personnel of the Group includes the Exchange Management Board and the Exchange Supervisory Board. The data presented in the table below are for all (current and former) members of the Exchange Management Board and the Exchange Supervisory Board who were in office in 2017 and 2018, respectively.

The table does not present social security contributions paid by the employer.

Table 14: Remuneration and benefits to the key management personnel of the Group

	Six-month period ended 30 June (unaudited)
	2018*	2017**
Base salary	708	1 195
Holiday leave equivalent	-	177
Variable remuneration under the new remuneration cap law (provision)	722	-
Bonus - bonus bank	(74)	(245)
Bonus - one-off payment	(56)	(40)
Bonus - phantom shares	(35)	(184)
Other benefits	-	25
Benefits after termination	160	-
Total remuneration of the Exchange Management Board	1 425	930
Remuneration of the Exchange Supervisory Board	292	232
Total remuneration of the key management personnel	1 717	1 162
* Negative bonus amounts in 2018 repres ent releas e of provis ions for bonus es of	the Exchange Management Board for

2017 at PLN 186 thous and (including one-of f payment of PLN 56 thous and, bonus bank of PLN 74 thous and, phantom s hares of PLN 56 thous and). ** Negative bonus amounts in 2017 repres ent releas e of provis ions for bonus es of the Exchange Management Board for

2016 at PLN 981 thous and (including one-of f payment of PLN 299 thous and, bonus bank of PLN 398 thous and, phantom s hares of PLN 284 thous and).

16. Dividend

On 19 June 2018, the Ordinary General Meeting of GPW passed a resolution to distribute the Company's profit for 2017, including a payment of dividend in the total amount of PLN 92,498 thousand. The dividend per share is PLN 2.20. The dividend record date is 19 July 2018 and the dividend payment date is 2 August 2018.

The liabilities in respect of the dividend payment are presented at PLN 92,498 thousand in the Company's other current liabilities as at 30 June 2018. The dividend due to the State Treasury is PLN 32,315 thousand.

17. Seasonality

The activity of the Group shows no significant seasonality except for the revenue from the Commodity Market which shows seasonality during the year (the revenue of the first months of the year is higher than the revenue for the other quarters of the year).

18. Segment reporting

These Condensed Consolidated Interim Financial Statements disclose information on segments based on components of the entity which are monitored by managers to make operating decisions. Operating segments are components of the entity for which discrete financial information is available and whose operating results are reviewed regularly by the entity's chief operating decision maker to make decisions about resources to be allocated to the segment and assess the Group's performance.

For management purposes, the Group is divided into segments based on the type of services provided. The three main reporting segments are as follows:

1) Financial Market segment, which covers the activity of the Group including organising trade in financial instruments on the exchange as well as related activities. The Group also engages in capital market education, promotion and information activities and organises an alternative trading system.

The Financial Market includes three subsegments:

Trading (mainly revenue from trading fees which depends on turnover on the exchange, fees for access to and use of exchange systems);
Listing (revenue from annual securities listing fees and one-off fees, e.g., for introduction of securities to trading on the exchange);
Information services (mainly revenue from information services for data vendors, historical data, calculation and distribution of WIBOR and WIBID reference rates).

The Financial Market segment includes the companies GPW S.A., BondSpot S.A. and GPW Benchmark S.A.

2) Commodity Market segment, which covers the activity of the Group including organising trade in commodities as well as related activities. The Group provides clearing and settlement on the commodity market through the company Izba Rozliczeniowa Giełd Towarowych S.A. ("IRGiT") and offers exchange trade in commodities (electricity, gas) and operates the Register of Certificates of Origin of electricity through the company TGE. The GPW Group also earns revenues from the activity of a trade operator on the electricity market.

The Commodity Market includes the following sub-segments:

Trading (mainly revenue on the Energy Market from spot and forward transactions in electricity, revenue from spot and forward transactions in natural gas, revenue on the Property Rights Market from trade in certificates of origin of electricity);
Operation of the Register of Certificates of Origin of electricity (mainly revenue from issuance and cancellation of property rights in certificates of origin of electricity);
CO² Allowances Market (trade in certificates of origin of electricity);
Clearing (revenue from other fees paid by market participants (members));
Information services.

The Commodity Market segment includes the TGE Group.

3) The segment Other includes the company IAiR as well as revenue from GPW's services to GPW Group companies.

The accounting policies for the operating segments are the same as the accounting policies of the GPW Group.

The Management Board monitors separately the operating results of the segments to make decisions about resources to be allocated and assess the results of their allocation and performance. Each segment is assessed up to the level of net profit or loss.

Transaction prices of transactions between the operating segments are set at arm's length, as for transactions with non-related parties.

The Group's business segments focus their activities on the territory of Poland.

The tables below present a reconciliation of the data analysed by the Management Board of the parent entity with the data shown in these Condensed Consolidated Interim Financial Statements.

Table 15: Business segments: Statement of comprehensive income

	Six-month period ended 30 June 2018 (unaudited)
	Financial Market	Commodity Market	Other	Total segments	Exclusions and adjustments	Total segments and exclusions
Sales revenue:	97 711	75 556	4 940	178 207	(5 624)	172 583
To third parties	96 635	75 446	502	172 583	-	172 583
Sales between segments and intragroup transactions	1 076	110	4 438	5 624	(5 624)	-
Operating expenses:	(62 621)	(31 023)	(333)	(93 977)	5 624	(88 353)
including depreciation and amortisation	(10 725)	(5 192)	-	(15 917)	-	(15 917)
Profit/(Loss) on sales	35 090	44 533	4 607	84 230	-	84 230
Profit/(Loss) on other operations	(2 698)	(511)	-	(3 209)	-	(3 209)
Operating profit (loss)	32 392	44 022	4 607	81 021	-	81 021
Profit/(Loss) on financial operations:	99 186	16 057	5	115 248	(69 522)	45 726
interest income	1 544	1 367	5	2 916	(15)	2 901
dividend received	69 697	14 911	-	84 608	(84 608)	-
impairment of a subsidiary	(1 927)	-	-	(1 927)	1 927	-
gains/(losses) on dilution of investment in an associate	32 239	-	-	32 239	13 156	45 395
interest cost	(3 814)	(13)	-	(3 827)	18	(3 809)
Share of profit of associates	-	-	-	-	5 218	5 218
Profit before income tax	131 578	60 079	4 612	196 269	(64 304)	131 965
Income tax	(13 332)	(8 706)	-	(22 038)	(2 324)	(24 362)
Net profit	118 246	51 373	4 612	174 231	(66 628)	107 603

Table 16: Business segments: Statement of financial position

		As at 30 June 2018 (unaudited)
	Financial Market	Commodity Market	Other	Total segments	Exclusions and adjustments*	Total segments and exclusions
Total assets	898 421	406 173	2 305	1 306 899	(34 921)	1 271 978
Total liabilities	397 290	140 378	435	538 103	(92 624)	445 479
Net assets (assets - liabilities)	501 131	265 795	1 870	768 796	57 703	826 499
* Exclus ions and adjus tments include mainly an adjus tment of inves tments in as s ociates s hown at cos t in the Financial

Market s egment adjus ted to equity valuation (PLN 188 million) les s cons olidation adjus tments (PLN 130 million).

Table 17: Business segments: Statement of comprehensive income

	Six-month period ended 30 June 2017 (unaudited)
	Financial Market	Commodity Market	Other	Total segments	Exclusions and adjustments	Total segments and exclusions
Sales revenue:	108 607	69 714	3 829	182 150	(3 481)	178 669
To third parties	108 294	69 714	661	178 669	-	178 669
Sales between segments and intragroup transactions	313	-	3 168	3 481	(3 481)	-
Operating expenses:	(58 941)	(28 447)	(45)	(87 433)	3 153	(84 280)
including depreciation and amortisation	(10 100)	(3 317)	-	(13 417)	-	(13 417)
Profit/(Loss) on sales	- 49 666	- 41 267	- 3 784	- 94 717	- (328)	- 94 389
Profit/(Loss) on other operations	(3 667)	(785)	-	(4 452)	(469)	(4 921)
Operating profit (loss)	- 45 999	- 40 482	- 3 784	- 90 265	- (797)	- 89 468
Profit/(Loss) on financial operations:	(1 280)	15 397	14	14 131	(21 247)	(7 116)
interest income	2 133	687	14	2 834	(46)	2 788
dividend received	1 266	20 000	-	21 266	(21 266)	-
interest cost	(3 745)	(5 186)	-	(8 931)	65	(8 866)
Share of profit of associates	-	-	-	-	4 540	4 540
Profit before income tax	- 44 719	- 55 879	- 3 798	- 104 396	- (17 504)	- 86 892
Income tax	(9 321)	(7 879)	-	(17 200)	-	(17 200)
Net profit	- 35 398	- 48 000	- 3 798	- 87 196	- (17 504)	- 69 692

Table 18: Business segments: Statement of financial position

		As at 31 December 2017
	Financial Market	Commodity Market	Other	Total segments	Exclusions and adjustments*	Total segments and exclusions
Total assets	762 651	345 524	2 229	1 110 404	36 649	1 147 053
Total liabilities	291 501	47 531	31	339 063	(3 491)	335 572
Net assets (assets - liabilities)	471 150	297 993	2 198	771 341	40 140	811 481
* Exclus ions and adjus tments include mainly an adjus tment of inves tments in as s ociates s hown at cos t in the Financial

Market s egment adjus ted to equity valuation (PLN 170 million) les s cons olidation adjus tments (PLN 130 million).

Table 19: Business segments: Statement of comprehensive income

	Three-month period ended 30 June 2018 (unaudited)
	Financial Market	Commodity Market	Other	Total segments	Exclusions and adjustments	Total segments and exclusions
Sales revenue:	47 604	39 275	2 487	89 366	(2 719)	86 647
To third parties	47 063	39 233	351	86 647	-	86 647
Sales between segments and intragroup transactions	541	42	2 136	2 719	(2 719)	-
Operating expenses:	(29 518)	(12 986)	(216)	(42 719)	2 726	(39 993)
including depreciation and amortisation	(5 457)	(2 636)	-	(8 093)	-	(8 093)
Profit/(Loss) on sales	- 18 086	- 26 290	- 2 271	- 46 647	- 7	- 46 654
Profit/(Loss) on other operations	(379)	2	-	(377)	-	(377)
Operating profit (loss)	- 17 707	- 26 292	- 2 271	- 46 270	- 7	- 46 277
Profit/(Loss) on financial operations:	100 010	15 578	1	115 589	(69 522)	46 067
interest income	699	715	5	1 419	(8)	1 411
dividend received	69 697	14 911	-	84 608	(84 608)	-
gains/(losses) on dilution of investment in an associate	32 239	-	-	32 239	13 156	45 395
interest cost	(1 914)	(6)	-	(1 920)	11	(1 909)
Share of profit of associates	-	-	-	-	4 472	4 472
Profit before income tax	- 117 717	- 41 870	- 2 272	- 161 859	- (65 043)	- 96 816
Income tax	(9 961)	(5 244)	-	(15 205)	(2 500)	(17 705)
Net profit	107 756	36 626	2 272	146 654	(67 543)	79 111

Table 20: Business segments: Statement of comprehensive income

	Three-month period ended 30 June 2017 (unaudited)
	Financial Market	Commodity Market	Other	Total segments	Exclusions and adjustments	Total segments and exclusions
Sales revenue:	52 726	34 684	2 239	89 649	(2 014)	87 635
To third parties	52 586	34 684	365	87 635	-	87 635
Sales between segments and intragroup transactions	140	-	1 874	2 014	(2 014)	-
Operating expenses:	(26 957)	(12 517)	26	(39 448)	1 683	(37 765)
including depreciation and amortisation	(5 192)	(1 832)	-	(7 024)	-	(7 024)
Profit/(Loss) on sales	- 25 769	- 22 167	- 2 265	- 50 201	- (331)	- 49 870
Profit/(Loss) on other operations	(520)	152	-	(368)	(469)	(837)
Operating profit (loss)	- 25 249	- 22 319	- 2 265	- 49 833	- (800)	- 49 033
Profit/(Loss) on financial operations:	498	19 800	3	20 301	(21 260)	(959)
interest income	1 135	339	3	1 477	(46)	1 431
interest cost	(1 911)	(430)	-	(2 341)	65	(2 276)
Share of profit of associates	-	-	-	-	3 045	3 045
Profit before income tax	- 25 747	- 42 119	- 2 268	- 70 134	- (19 015)	- 51 119
Income tax	(4 890)	(4 274)	(9)	(9 173)	-	(9 173)
Net profit	- 20 857	- 37 845	- 2 259	- 60 961	- (19 015)	- 41 946

19. Effect of the initial application of new standards

Table 21: Impact of adjustments on selected items of the statement of comprehensive income as at 1 January 2018

		As at 31 December 2017 a)	Adjustment on initial application of IFRS 9 and IFRS 15	As at 1 January 2018 (res tated)
Non-current assets		596 354	49	596 403
Deferred tax assets	2)	3 803	49	3 852
Available-for-sale financial assets	1)	271	(271)	-
Financial assets measured at fair value through other comprehensive income	1)	-	271	271
Current assets		550 699	(259)	550 440
Trade and other receivables	2), 4)	64 096	(1 254)	62 842
Contract assets	4)	-	995	995
TOTAL ASSETS		1 147 053	(210)	1 146 843
Equity		811 481	(210)	811 271
Total equity of the parent entity		810 908	(210)	810 698
Retained earnings	2)	745 696	(210)	745 486
Current liabilities		75 621	-	75 621
Contract liabilities	3)	-	6 827	6 827
Accruals and deferred income	3)	7 386	(6 827)	559
TOTAL EQUITY AND LIABILITIES		1 147 053	(210)	1 146 843
a) The Group implemented I FRS 9 and I FRS 15 as	of	1 January 2018. The Management Board decided to us		e the s implification

under I FRS 9 7.2.15 and not to res tate comparative periods . I FRS 15 was implemented retros pectively with the cumulative ef fect of initial application at 1 January 2018. 1) I FRS 9 - reclas s ification according to new categories of financial as s ets

2) I FRS 9 - increas e of impairment allowances according to expected credit los s

3) I FRS 15 - change of the pres entation of liabilities in res pect of charged annual and quarterly fees under a new item: Contract liabilities 4) I FRS 15 - change of the pres entation of es timated receivables under a new item: Contract as s ets

Table 22: Impact of the application of IFRS 15 on selected items of the statement of comprehensive income as at 30 June 2018

	As at 30 June 2018 (after I FRS 15)*	Adjustment on application of IFRS 15	As at 30 June 2018 (before I FRS 15)
Current assets	693 410	-	693 410
Trade and other receivables	68 509	1 946	70 455
Contract assets	1 946	(1 946)	-
	00.sty.00	0	00.sty.00
Current liabilities	188 995	-	188 995
Contract liabilities	22 375	(22 375)	-
Accruals and deferred income	563	22 375	22 938
* No impact of the application of I FRS 15 on the Statement of comprehens ive income. No s ignificant impact on the Statement

of cas h flows (only a change of the pres entation under cas h flows from operating activities ).

Expected credit loss allowances are shown under impairment losses on trade receivables in the statement of comprehensive income as of 1 January 2018 (under other costs in previous years).

IFRS 9 Financial Instruments

Financial assets held by the Group, i.e., minority interest in Sibex, Innex and IRK (previously recognised as available-for-sale financial assets), are presented as of 1 January 2018 as financial assets measured at fair value through other comprehensive income because they are neither held for trading nor a conditional payment recognised by the acquiring entity in a business combination.

IFRS 9 introduces a fundamental change to the measurement of impairment of financial assets. Under the new Standard, entities recognise and measure impairment under the "expected credit loss" model replacing the "incurred loss" impairment model. The amendment mainly affects the estimation of write-offs of debt.

The Group performed a portfolio analysis and calculated, for each category of clients, a write-off matrix by age bracket on the basis of expected credit loss in the lifetime of debt. The Group concluded that default ratios estimated on the basis of historical data represent the probability of default of trade receivables in the future and consequently the ratios were not adjusted. The estimated ratios are as follows:

Exchange Members from 0.02% for debt not yet due to 12.32% for debt overdue from 181 to 365 days,
issuers from 2.19% for debt not yet due to 88.52% for debt overdue from 181 to 365 days,
other clients from 1.28% for debt not yet due to 54.28% for debt overdue from 181 to 365 days.

As a result of the analysis, the change of the approach to the recognition and measurement of impairment resulted in an increase of impairment write-offs by PLN 259 thousand and a decrease of equity by PLN 210 thousand including deferred tax assets as at the date of initial adoption of IFRS 9 (1 January 2018).

IFRS 15 Revenue from Contracts with Customers

The implementation of the Standard impacts the presentation of data concerning annual and quarterly fees charged from customers under contracts and regulations in interim consolidated financial statements. Such fees were previously presented as "Accruals and deferred income" but are now presented in accordance with IFRS 15 as "Contract liabilities". The Group decided to change the presentation of revenue earned from information services and the calculation of reference rates which has not yet been invoiced. Such revenue was previously presented under trade receivables and other receivables. However, in view of the fact that the Group satisfies its obligation to a customer before it receives the revenue and that the contractual right to the payment arises in subsequent periods, the Group presents them under "Contract assets".

20. Events after the balance sheet date

On 19 July 2018, the Warsaw Stock Exchange, the Polish Development Fund, Biuro Informacji Kredytowej and Instytut Analiz i Ratingu signed an investment agreement to develop a joint rating agency with a mission to fill a gap in the rating offer addressed mainly to small and medium-sized enterprises. GPW, PFR and BIK expect that the shareholder structure of IAiR should correspond to the equal equity investment of each of them in IAiR (1/3 each).

The Condensed Consolidated Interim Financial Statements are presented by the Management Board of the Warsaw Stock Exchange:

Marek Dietl – President of the Management Board ………………………………………

Jacek Fotek – Vice-President of the Management Board ………………………………………

Dariusz Kułakowski – Member of the Management Board ………………………………………

Signature of the person responsible for keeping the accounting records:

Sylwia Sawicka – Chief Accountant ………………………………………

Warsaw, 27 July 2018

Condensed Separate Interim Financial Statements of Giełda Papierów Wartościowych w Warszawie S.A.

for the six-month period ended on 30 June 2018

July 2018

Skonsolidowane sprawozdanie finansowe Grupy Kapitałowej Giełdy Papierów Wartościowych w Warszawie S.A. za rok zakończony 31 grudnia 2015 r. Condensed Separate Interim Financial Statements of Giełda Papierów Wartościowych w Warszawie S.A. for the six-month period ended 30 June 2018

(wszystkie kwoty wyrażone są w tys. zł, o ile nie podano inaczej) (all amounts in PLN'000 unless stated otherwise)

I.	SEPARATE STATEMENT OF FINANCIAL POSITION 2
II.	SEPARATE STATEMENT OF COMPREHENSIVE INCOME 4
III.	SEPARATE STATEMENT OF CASH FLOWS 5
IV.	SEPARATE STATEMENT OF CHANGES IN EQUITY 7
V.	NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS 9
	1. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 9
	2. PROPERTY, PLANT AND EQUIPMENT 13
	3. INTANGIBLE ASSETS 14
	4. INVESTMENT IN SUBSIDIARIES, ASSOCIATES AND OTHER ENTITIES 14
	5. CHANGE OF ESTIMATES 15
	6. CONTRACT ASSETS AND CONTRACT LIABILITIES 15
	7. INCOME TAX 16
	8. RELATED PARTY TRANSACTIONS 17
	9. DIVIDEND 17
	10. EFFECT OF THE INITIAL APPLICATION OF NEW STANDARDS 18
	11. EVENTS AFTER THE BALANCE SHEET DATE 20

I. SEPARATE STATEMENT OF FINANCIAL POSITION

		As at
	Note	30 June 2018 (unaudited)	31 December 2017
Non-current assets		429 365	462 760
Property, plant and equipment	2	95 510	96 269
Intangible assets	3	64 017	68 963
Investment in associates	4	11 652	36 959
Investment in subsidiaries	4	253 058	254 985
Available-for-sale financial assets		-	271
Financial assets measured at fair value through other comprehensive income		204	-
Non-current prepayments		4 924	5 313
Current assets		443 934	275 535
Inventories		60	56
Trade and other receivables	8.2.	99 723	26 272
Contract assets	6	1 818	-
Other financial assets measured at amortised cost		110 840	-
Cash and cash equivalents		231 493	249 207
TOTAL ASSETS		873 299	738 295

SEPARATE STATEMENT OF FINANCIAL POSITION (CONTINUED)

		As at
	Note	30 June 2018 (unaudited)	31 December 2017
Equity		480 559	450 887
Share capital		63 865	63 865
Other reserves		(125)	(125)
Retained earnings		416 819	387 147
Non-current liabilities		250 535	253 744
Liabilities on bonds issue		243 767	243 573
Employee benefits payable	5	669	883
Deferred tax liability		3 875	7 064
Other non-current liabilities		2 224	2 224
Current liabilities		142 205	33 664
Liabilities on bonds issue		1 899	1 938
Trade payables		9 766	11 954
Employee benefits payable	5	6 722	8 481
Corporate income tax payable		7 779	5 685
Contract liabilities	6	17 209	-
Accruals and deferred income		-	21
Provisions for other liabilities and charges	5	68	211
Other current liabilities	9	98 762	5 374
TOTAL EQUITY AND LIABILITIES		873 299	738 295

II. SEPARATE STATEMENT OF COMPREHENSIVE INCOME

	Note	Three-month period ended 30 June		Six-month period ended 30 June
		2018 (unaudited)	2017 (unaudited)	2018 (unaudited)	2017 (unaudited)
Revenue		46 570	50 900	95 446	104 452
Operating expenses		(26 454)	(24 557)	(56 402)	(54 031)
Other income		94	303	703	501
Impairment losses		(391)	-	(1 427)	-
Other expenses		(13)	(808)	(1 822)	(4 177)
Operating profit		19 806	25 838	36 498	46 745
Financial income	4	103 762	2 353	104 898	3 302
Financial expenses		(3 834)	(1 921)	(5 877)	(4 692)
Profit before income tax		119 734	26 270	135 519	45 355
Income tax expense	7	(9 940)	(4 718)	(13 299)	(8 966)
Profit for the period		109 794	21 552	122 220	36 389
Total comprehensive income		109 794	21 552	122 220	36 389

III. SEPARATE STATEMENT OF CASH FLOWS

		Six-month period ended 30 June
	Note	2018 (unaudited)	2017 (unaudited)
Cash flows from operating activities:		40 306	39 248
Cash generated from operation before tax		57 034	66 794
Net profit of the period		122 220	36 389
Adjustments:		(65 186)	30 405
Income tax		13 299	8 966
Depreciation of property, plant and equipment	2	5 125	4 673
Amortisation of intangible assets	3	5 038	5 039
Foreign exchange (gains)/losses (Profit)/Loss on sale of property, plant and		264 (108)	212 (13)
equipment and intangible assets
Net (profit)/loss on sale of investments	4	(32 239)	-
Gains on revaluation of investments in other entities		1 994	11
Financial (income)/expense on other financial assets measured at amortised cost		(603)	-
Financial income from dividends	8.2.	(69 697)	(1 266)
Income from interest on deposits		(1 430)	(2 031)
Income from interest on loans granted		-	(46)
Interest on issued bonds		3 811	3 486
Other		(8)	(140)
Change in assets and liabilities:		9 368	11 514
Change in prepayments		389	(2 083)
(Increase)/Decrease of inventories		(4)	8
(Increase)/Decrease of trade and other receivables (excluding dividend payable)		(2 027)	(6 574)
(Increase)/Decrease of contract assets		(1 818)	-
Increase/(Decrease) of trade payables		(2 188)	(1 573)
Increase/(Decrease) of employee benefits payable	5	(1 973)	(1 596)
Increase/(Decrease) of contract liabilities		17 188	22 193
Increase/(Decrease) of other liabilities (excluding investment liabilities and dividend payable)		(57)	1 139
Net change in provisions for other liabilities and charges		(143)	-
Advances from related parties in the Tax Group		3 151	-
Income tax (paid)/refunded		(19 879)	(27 546)

SEPARATE STATEMENT OF CASH FLOWS (CONTINUED)

		Six-month period ended 30 June
	Note	2018 (unaudited)	2017 (unaudited)
Cash flows from investing activities:		(54 100)	(13 265)
Purchase of property, plant and equipment and advances for property, plant and equipment		(2 814)	(4 037)
Purchase of intangible assets and advances for intangible assets		(517)	(1 835)
Proceeds from sale of property, plant and equipment and intangible assets		120	474
Sale of available-for-sale financial assets		57 546	-
Purchase of other financial assets measured at amortised cost		(110 237)	-
Loans granted		-	(10 000)
Interest received		1 430	2 031
Dividends received	8.2.	372	102
Cash flows from financing activities:		(3 655)	(4 553)
Interest paid		(3 655)	(3 998)
Proceeds from bond issue		-	119 929
Redemption of bonds issued		-	(120 484)
Net (decrease)/increase in cash and cash equivalents		(17 449)	21 430
Impact of fx rates on cash balance in currencies		(264)	(212)
Cash and cash equivalents - opening balance		249 207	267 789
Cash and cash equivalents - closing balance		231 493	289 007

IV. SEPARATE STATEMENT OF CHANGES IN EQUITY

	Share capital	Other reserves	Retained earnings	Total equity
As at 31 December 2017	63 865	(125)	387 147	450 887
Adjustment on initial application of IFRS 9	-	-	(210)	(210)
As at 1 January 2018 (restated)	63 865	(125)	386 937	450 677
Dividends	-	-	(92 338)	(92 338)
Transactions with owners recognised directly in equity	-	-	(92 338)	(92 338)
Profit for the six-month period ended 30 June 2018	-	-	122 220	122 220
Total comprehensive income for the six-month period ended 30 June 2018 (unaudited)	-	-	122 220	122 220
As at 30 June 2018 (unaudited)	63 865	(125)	416 819	480 559

	Share capital	Other reserves	Retained earnings	Total equity
As at 31 December 2016	63 865	(114)	408 351	472 102
Dividends	-	-	(90 239)	(90 239)
Transactions with owners recognised directly in equity	-	-	(90 239)	(90 239)
Profit for the year ended 31 December 2017	-	-	69 033	69 033
Other comprehensive income	-	(11)	-	(11)
Total comprehensive income for the year ended 31 December 2017	-	(11)	69 033	69 022
Other changes in equity	-	-	2	2
As at 31 December 2017	63 865	(125)	387 147	450 887

SEPARATE STATEMENT OF CHANGES IN EQUITY (CONTINUED)

	Share capital	Other reserves	Retained earnings	Total equity
As at 31 December 2016	63 865	(114)	408 351	472 102
Dividends	-	-	(90 239)	(90 239)
Transactions with owners recognised directly in equity	-	-	(90 239)	(90 239)
Profit for the six-month period ended 30 June 2017	-	-	36 389	36 389
Total comprehensive income for the six-month period ended 30 June 2017 (unaudited)	-	-	36 389	36 389
As at 30 June 2017 (unaudited)	63 865	(114)	354 501	418 252

V. NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS

1. Basis of preparation of the financial statements and summary of significant accounting policies

These Condensed Separate Interim Financial Statements of Giełda Papierów Wartościowych w Warszawie S.A. have been prepared according to the International Accounting Standard 34 "Interim Financial Reporting" approved by the European Union. These financial statements do not contain all the information required for complete financial statements prepared under the EU IFRS.

In the opinion of the Exchange Management Board, in the notes to the Condensed Separate Interim Financial Statements of Giełda Papierów Wartościowych w Warszawie S.A., GPW included all material information necessary for the proper assessment of the assets and the financial position of the Company as at 30 June 2018 and its financial results in the period from 1 January 2018 to 30 June 2018.

These Condensed Separate Interim Financial Statements have been prepared on the assumption that the Company will continue as a going concern in the foreseeable future. As at the date of preparation of these Condensed Separate Interim Financial Statements, in the opinion of the Exchange Management Board, there are no circumstances indicating any threats to Company's ability to continue operations.

The Company has prepared the Condensed Separate Interim Financial Statements in accordance with the same accounting policies as those described in the Financial Statements for the year ended 31 December 2017 other than for changes resulting from the application of new standards as described below. The Condensed Separate Interim Financial Statements for the six-month period ended 30 June 2018 should be read in conjunction with the Separate Financial Statements for the year ended 31 December 2017.

The following amendments of existing standards adopted by the European Union are effective for the financial statements of the Company for the financial year started on 1 January 2018:

1) IFRS 9 Financial Instruments;
2) IFRS 15 Revenue from Contracts with Customers;
3) Improvements to IFRS (2014 2016);
4) Amendments to IFRS 2 Share-based Payment;
5) IFRIC 22 Foreign Currency Transactions and Advance Consideration;
6) Amendments to IAS 40 Investment Property.

Following the implementation of those standards, the Company's accounting policy described in Notes 2.8 and 2.19 in the financial statements for the year ended 31 December 2017 has been updated as follows:

2.8 Financial assets

2.8.1. Classification and valuation of financial assets

The Company's financial assets are classified into one of three categories:

financial assets measured at amortised cost;
financial assets measured at fair value through profit or loss; or
financial assets measured at fair value through other comprehensive income (OCI).

The assets are classified into those categories on initial recognition. Classification depends on:

the business model of asset portfolio management; and
the contractual terms of the financial asset.

2.8.1.1 Financial assets measured at amortised cost

A financial asset is classified as "Financial assets measured at amortised cost" if the following two conditions are met:

the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal outstanding.

"Financial assets measured at amortised cost" include:

cash and cash equivalents,
trade receivables,
other receivables, and
other financial assets measured at amortised cost (including corporate bonds and certificates of deposit held to maturity).

2.8.1.2 Financial assets measured at fair value through other comprehensive income

A financial asset is classified as "Financial assets measured at fair value through other comprehensive income" if the following two conditions are met:

the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows and to sell financial assets; and
its contractual terms give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal outstanding.

"Financial assets measured at fair value through other comprehensive income" comprise shares in entities over which the Company does not exercise control or exert significant influence. They are disclosed as noncurrent assets unless the Company intends to sell them within 12 months after the balance sheet date.

The fair value of equity instruments listed on an active market derives from the current price. Fair value is determined based on listed prices. If the market for a financial asset is not active (also in respect of non-listed securities), the Company determines the fair value using valuation techniques. These include the use of recent arm's length transactions, reference to transactions in other virtually identical instruments, discounted cash flow analysis, using market information to the maximum extent and relying on information from the Company to the minimum extent.

Fair value hierarchy

The Company classifies the valuation of fair value on the basis of a fair value hierarchy which reflects the significance of valuation input data. The fair value hierarchy includes the following levels:

(unadjusted) trading prices on active markets for identical assets or liabilities (level 1);
input data other than trading prices at level 1, which can be identified or observed for an asset or liability, directly (as prices) or indirectly (calculations based on prices) (level 2); and
input data for an asset or liability not based on observable market data (non-observable data) (level 3).

2.8.2. Impairment of financial assets

At each balance sheet date, the Company recognises impairment (expected credit loss) of financial assets. If there has been a significant increase in credit risk of a financial asset since initial recognition, the Company recognises expected credit loss of the financial asset as an allowance equal to lifetime expected credit losses. If the credit risk of a financial asset has not increased significantly since initial recognition, the financial asset will attract a loss allowance equal to 12-month expected credit loss.

The Company's impairment allowance for financial assets measured at amortised cost other than trade receivables is equal to the 12-month expected credit loss in view of the low credit risk of such financial instruments. The Company considers cash and cash equivalents, other receivables and other financial assets measured at amortised cost to carry low credit risk because it only accepts entities, including banks and financial institutions, of a high rating and stable market position, i.e., rated above Baa2 by Moody's.

As receivables of the Company have no significant financing component, impairment is measured as an allowance equal to lifetime expected credit losses.

The Company measures expected credit loss of financial assets taking into account:

an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
the time value of money;
reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions

As at the end of each reporting year, based on historical collection of debt from counterparties, the Company performs a statistical analysis of trade receivables by category of clients as follows:

Exchange Members,
issuers, and
other clients.

In the next step, the Company performs a portfolio analysis and calculates for each category of clients a matrix of allowances by age group based on lifetime expected credit losses. The allowance for debt which is not overdue as at the balance sheet date for a group of clients in a time bracket (overdue) is equal to:

value of trade receivables at the balance sheet date, times
client's probability of default.

The expected credit loss (or released allowance) required to adjust the expected credit loss allowance as at the reporting date to the amount that should be recognised is presented in the Company's statement of comprehensive income as gains or losses on impairment.

The Company decided to implement the standard without a restatement of comparative data (exemption under IFRS 9 7.2.15). Adjustments necessary to implement IFRS 9 are applied as of 1 January 2018 in equity (retained earnings).

2.19 Revenue

2.19.1 Sales revenue

over time, in a manner that depicts the entity's performance; or
at a point in time, when control of the goods or services is transferred to the customer.

The Company analyses potential collectability of debt when entering into a contract. If, at the time of entering into a contract, the entity is not likely to receive the amount due for future performance of a commitment, no revenue is recognised until the doubt about the collectability of debt is clarified.

Furthermore, under IFRS 15, costs incurred to acquire the customer and secure the contract are recognised by the Company over time within the period when the benefits flow from the contract.

According to IFRS 15 C3 (b), the Exchange Management Board decided to implement the Standard retrospectively with the cumulative effect of initial application at initial application date, i.e., 1 January 2018, through equity according to C7-C8 of the Standard. The analysis did not identify any adjustment of equity on initial application.

According to the simplification allowed by the Standard for retrospective application with the cumulative effect of initial application through equity, the Exchange Management Board decided to use the simplification under C7 A (b), i.e., not to apply retrospective restatement of contracts which changed before the date of initial application (1 January 2018).

Sales revenue consists of two main categories:

Financial market,
Other (sales) revenue.

Sales revenue from the financial market consists of:

Revenue from trading

In addition to trading fees, flat-rate fees are charged for access to and use of the IT systems of the Exchange.

Trading revenue is recognised in the month when the service is provided.

Revenue from issuers

In addition, fees for admission to trading as well as other fees are collected from issuers and recognised on an up-front basis when the service is provided.

Revenue from information services

Revenue from information services of the parent entity consist of revenue earned on the sale of stock exchange information: real-time stock exchange data and statistical and historical data in the form of a statistical e-mail daily bulletin, electronic publications, calculation of indices, as well as other stock exchange index licenses and calculations. The sale of stock exchange information is based on separate agreements signed with exchange data vendors, exchange members and other organisations, mainly financial institutions. The Group's revenue from information services also includes the revenue from BondSpot information services. Such revenue is recognised in the month of the sale.

Other sales revenue is earned on other services provided by the Company including lease of office space and services for the Polish Financial Supervision Authority including provision of an IT application supporting the use of data as well as technical and substantive support. Such revenue is recognised in the month when the service is provided.

The following new standards will apply to the financial statements of the Company for periods starting on or after 1 January 2019:

1) IFRS 16 Leases the estimated impact of the new standard on the financial statements of the Company is presented in Note 2.1.2 of the Separate Financial Statements for the year ended 31 December 2017;
2) IFRIC 23 Uncertainty over Income Tax Treatments;
3) Amendments to IFRS 9 Financial Instruments;
4) Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures;
5) Improvements to IFRS 2015-2017.

The critical accounting estimates and judgements used by the Exchange Management Board in the application of the Group's accounting policy and the key sources of uncertainty were the same as those used in the Consolidated Financial Statements as at 31 December 2017.

2. Property, plant and equipment

Table 1: Change of the net carrying value of property, plant and equipment by category

	Period of
	Six months ended 30 June 2018 (unaudited)	Twelve months ended 31 December 2017
Net carrying value - opening balance	96 269	101 034
Additions	4 378	4 630
Disposals	(12)	-
Depreciation charge	(5 125)	(9 395)
Net carrying value - closing balance	95 510	96 269

Contracted investment commitments for property, plant and equipment were PLN 581 thousand as at 30 June 2018, including mainly restructuring of GPW offices.

Contracted investment commitments for property, plant and equipment were PLN 77 thousand as at 31 December 2017, including mainly restructuring of GPW offices.

3. Intangible assets

Table 2: Change of the net carrying value of intangible assets by category

	Period of
	Six months ended 30 June 2018 (unaudited)	Twelve months ended 31 December 2017
Net carrying value - opening balance	68 963	75 918
Additions	92	3 583
Disposals	-	(461)
Amortisation charge	(5 038)	(10 077)
Net carrying value - closing balance	64 017	68 963

Contracted investment commitments for intangible assets amounted to PLN 896 thousand as at 30 June 2018 and related mainly to the implementation of the new trading surveillance system and new functionalities of the trading system.

Contracted investment commitments for intangible assets amounted to PLN 1,203 thousand as at 31 December 2017 and related mainly to Microsoft licences and the trading surveillance system.

4. Investment in subsidiaries, associates and other entities

As at 30 June 2018, the Company held interest in the following subsidiaries:

Towarowa Giełda Energii S.A. ("Polish Power Exchange", "TGE"), the parent entity of the TGE Group;
BondSpot S.A. ("BondSpot");
GPW Benchmark S.A. ("GPW B", formerly GPW Centrum Usług S.A.);
Instytut Analiz i Ratingu S.A. ("IAiR").

The Company wrote off the investment in IAiR at PLN 1,927 thousand as at 30 June 2018, reducing the investment to PLN 2,173 thousand.

As at 31 December 2017 and as at 30 June 2018, the Company held interest in the following associates:

Krajowy Depozyt Papierów Wartościowych S.A., parent entity of the KDPW Group;
Centrum Giełdowe S.A.

The Company held a stake in the associate Aquis Exchange Limited as at 31 December 2017. The stake was sold in June 2018. The carrying value of the stake was PLN 25,307 thousand as at 31 December 2017 and as at the date of the sale. The shares were sold at GBP 2.69 per share on 14 June 2018. The net receipts on the sale were PLN 57,546 thousand (net of the transaction cost at PLN 2,677 thousand). The gains on the sale of the shares at PLN 32,239 thousand are shown under financial income in the statement of comprehensive income.

(wszystkie kwoty wyrażone są w tys. zł, o ile nie podano inaczej) (all amounts in PLN'000 unless stated otherwise)

5. Change of estimates

In the period from 1 January 2018 to 30 June 2018, impairment losses for assets were adjusted as follows:

Table 3: Change of estimates

	[PLN'000]
Impairment allowance as at 31 December 2017	2 224
Adjustment on initial application of IFRS 9*	259
Impairment allowance as at 1 January 2018	2 483
Initial impairment allowances	1 561
Receivables written off during the period as uncollectible	(108)
Reversal of impairment allowances	(26)
Impairment allowance as at 30 June 2018	3 910
* The Group implemented I FRS 9 as of 1 January 2018. The Group us ed the s implification and did not res	tate the

comparative data (I FRS 9 7.2.15). For more informationon the initial application of I FRS 9, s ee Note 10.

Furthermore, in the period from 1 January 2018 to 30 June 2018, there were the following changes in estimates relating to provisions:

provisions against employee benefits (mainly annual bonuses) were reduced by PLN 1,973 thousand (usage of PLN 5,044 thousand, releases of PLN 194 thousand, provision additions of PLN 3,265 thousand);
provisions against litigation and other provisions were reduced by PLN 143 thousand (usage of PLN 75 thousand, releases of PLN 115 thousand, provision additions of PLN 47 thousand).

6. Contract assets and contract liabilities

Table 4: Contract assets and contract liabilities

	As at
	30 June 2018 (unaudited)	1 January 2018* (res tated)
Information services and revenue from the calculation of reference rates	1 680	769
Financial market	1 680	769
Other revenue	138	127
Total contract assets	1 818	896
Trading	320	-
Listing	9 276	-
Information services and revenue from the calculation of reference rates	7 469	-
Financial market	17 065	-
Other revenue	144	21
Total contract liabilities	17 209	21

Current contract liabilities relating to services provided on the financial market include annual and quarterly fees charged from market participants. Those were presented as deferred income as at 31 December 2017. For more information on the initial application of IFRS 15, see Note 10.

Contract liabilities stood at PLN 21 thousand as at 1 January 2018, of which PLN 21 thousand was recognised as income in the six months ended 30 June 2018.

7. Income tax

Table 5: Income tax by current and deferred tax

	Six-month period ended 30 June
	2018	2017
Current income tax	16 439	13 368
Deferred tax	(3 140)	(4 402)
Total income tax	13 299	8 966

Table 6: Reconciliation of the theoretical amount of tax arising from profit before tax and the statutory tax rate with the income tax expense presented in the statement of comprehensive income

	Six-month period ended 30 June
	2018	2017
Profit before income tax	135 519	45 355
Income tax rate	19%	19%
Income tax at the statutory tax rate	25 749	8 617
Tax effect:	(12 450)	349
Non-tax-deductible expenses	792	589
Non-taxable income from dividends	(13 242)	(240)
Total income tax	13 299	8 966

As the Company Representing the Tax Group, Giełda Papierów Wartościowych w Warszawie S.A. is responsible for the calculation and payment of quarterly corporate income tax advances of the Tax Group pursuant to the Corporate Income Tax Act. As at 30 June 2018, GPW's receivables from its related parties participating in the TG in respect of income tax payable on their behalf was PLN 3,277 thousand, shown under trade receivables and other receivables in the statement of financial position.

8. Related party transactions

8.1. Information about transactions with entities which are related parties of the State Treasury

Polish Financial Supervision Authority

In the six-month period ended 30 June 2018, the operating expenses of GPW included an estimated amount of the annual fee at PLN 4,805 thousand. The fee charged to the expenses of GPW in the six-month period ended 30 June 2017 was PLN 6,260 thousand.

8.2. Transactions with subsidiaries and associates

On 10 May 2018, the Ordinary General Meeting of Centrum Giełdowe S.A. decided to allocate a part of the profit equal to PLN 1,501 thousand to a dividend payment. The dividend attributable to GPW is PLN 372 thousand. The dividend was paid on 30 May 2018.

On 6 July 2018, the Ordinary General Meeting of Krajowy Depozyt Papierów Wartościowych S.A. decided to pay no dividend from the 2017 profit.

On 29 June 2018, the Ordinary General Meeting of Towarowa Giełda Energii S.A. decided to allocate a part of the profit equal to PLN 69,325 thousand to a dividend payment. The entire dividend was attributable to GPW. The dividend was paid on 19 July 2018. GPW's receivables stood at PLN 69,325 thousand as at 30 June 2018, shown under trade receivables and other receivables.

9. Dividend

On 19 June 2018, the Ordinary General Meeting of GPW passed a resolution to distribute the Company's profit for 2017, including a payment of dividend in the total amount of PLN 92,338 thousand. The dividend per share is PLN 2.20. The dividend record date is 19 July 2018 and the dividend payment date is 2 August 2018.

The liability in respect of the dividend payment is presented at PLN 92,498 in the Company's other current liabilities as at 30 June 2018. The dividend due to the State Treasury is PLN 32,315 thousand.

10. Effect of the initial application of new standards

Table 7: Impact of adjustments on selected items of the statement of comprehensive income as at 1 January 2018

		As at 31 December 2017 a )	Adjustment on initial application of IFRS 9 and IFRS 15	As at 1 January 2018 (res tated)
Non-current assets		462 760	49	462 809
Deferred tax assets	2)	-	49	49
Available-for-sale financial assets	1)	271	(271)	-
Financial assets measured at fair value through other comprehensive income	1)	-	271	271
Current assets		275 535	(259)	275 276
Trade and other receivables	2), 4)	26 272	(1 155)	25 117
Contract assets	4)	-	896	896
TOTAL ASSETS		738 295	(210)	738 085
Equity		450 887	(210)	450 677
Retained earnings	2)	387 147	(210)	386 937
Non-current liabilities		253 744	-	253 744
Current liabilities		33 664	-	33 664
Contract liabilities	3)	-	21	21
Accruals and deferred income	3)	21	(21)	-
TOTAL EQUITY AND LIABILITIES		738 295	(210)	738 085

s implification under I FRS 9 7.2.15 and not to res tate comparative periods . I FRS 15 was implemented retros pectively with the cumulative ef fect of initial application at 1 January 2018. 1) I FRS 9 - reclas s ification according to new categories of financial as s ets

2) I FRS 9 - increas e of impairment allowances according to expected credit los s

Table 8: Impact of the application of IFRS 15 on selected items of the statement of comprehensive income as at 30 June 2018

	As at 30 June 2018 (after I FRS 15)*	Adjustment on application of IFRS 15	As at 30 June 2018 (before I FRS 15)
Current assets	443 934	-	443 934
Trade and other receivables	99 723	1 818	101 541
Contract assets	1 818	(1 818)	-
Current liabilities	142 265	-	142 265
Contract liabilities	17 209	(17 209)	-
Accruals and deferred income	-	17 209	17 209
* No impact of the application of I FRS 15 on the Statement of comprehens ive income. No s ignificant impact on the

Statement of cas h flows (only a change of the pres entation under cas h flows from operating activities ).

The expected credit loss allowance is shown in the statement of comprehensive income under "Impairment losses of trade receivables" as of 1 January 2018 (it was shown under "Other expenses" in previous years).

IFRS 9 Financial Instruments

Financial assets held by the Company, i.e., minority interest in Sibex, Innex and IRK (previously recognised as available-for-sale financial assets), are presented as of 1 January 2018 as financial assets measured at fair value through other comprehensive income because they are neither held for trading nor a conditional payment recognised by the acquiring entity in a business combination.

IFRS 9 introduces a fundamental change to the measurement of impairment of financial assets. Under the new Standard, entities will recognise and measure impairment under the "expected credit loss" model replacing the "incurred loss" impairment model. The amendment mainly affects the estimation of allowances for trade receivables.

The Company performed a portfolio analysis and calculated, for each category of clients, an allowance matrix by age bracket on the basis of lifetime expected credit losses. The Company concluded that default ratios estimated on the basis of historical data represent the probability of default of trade receivables in the future and consequently the ratios were not adjusted. The estimated ratios are as follows:

Exchange Members from 0.02% for debt not yet due to 12.32% for debt overdue from 181 to 365 days,
issuers from 2.19% for debt not yet due to 88.52% for debt overdue from 181 to 365 days,
other clients from 1.28% for debt not yet due to 54.28% for debt overdue from 181 to 365 days.

As a result of the analysis, the change of the approach to the recognition and measurement of impairment resulted in an increase of impairment allowances by PLN 259 thousand and a decrease of equity by PLN 210 thousand including deferred tax assets as at the date of initial application of IFRS 9 (1 January 2018).

IFRS 15 Revenue from Contracts with Customers

The implementation of the Standard impacts the presentation of data concerning annual and quarterly fees charged from customers under contracts and regulations in interim consolidated financial statements. Such fees were previously presented as "Accruals and deferred income" but are now presented in accordance with IFRS 15 as "Contract liabilities". The Company decided to change the presentation of revenue earned from information services and the calculation of reference rates which has not yet been invoiced. Such revenue was previously presented under trade receivables and other receivables. However, in view of the fact that the Company satisfies its obligation to a customer before it receives the revenue and that the contractual right to the payment arises in subsequent periods, GPW presents them under contract assets.

11. Events after the balance sheet date

The Condensed Separate Interim Financial Statements are presented by the Management Board of the Warsaw Stock Exchange:

Marek Dietl – President of the Management Board ………………………………………

Jacek Fotek – Vice-President of the Management Board ………………………………………

Dariusz Kułakowski – Member of the Management Board ………………………………………

Signature of the person responsible for keeping the accounting records:

Sylwia Sawicka – Chief Accountant ………………………………………

Warsaw, 27 July 2018

Management Board's Statement

The Management Board of the Warsaw Stock Exchange declares that the registered audit firm performing the audit of the Condensed Separate Financial Statements of the Warsaw Stock Exchange for the six-month period ended 30 June 2018 and the Condensed Consolidated Financial Statements of the Warsaw Stock Exchange Group for the six-month period ended 30 June 2018 has been appointed pursuant to the binding regulations. The audit firm and the certified auditors performing the audit meet the requirements necessary for issuing an objective and independent audit opinion on the separate and the consolidated financial statement, pursuant to the binding provisions of the law and professional standards.

Marek Dietl Jacek Fotek

President of the Management Board Vice-President of the Management Board

Dariusz Kułakowski Member of the Management Board

Warsaw, 27 th July 2018

Management Board's Statement

The Management Board of the Warsaw Stock Exchange declares to the best of its knowledge that:

The Condensed Separate Financial Statement of the Warsaw Stock Exchange for the six-month period ended 30 June 2018, including comparative information, have been prepared in accordance with the binding accounting policies and that these give a true, fair and clear view of the financial position and results of the Warsaw Stock Exchange,
The Condensed Consolidated Financial Statement of the Warsaw Stock Exchange Group for the six-month period ended 30 June 2018, including comparative information, have been prepared in accordance with the binding accounting policies and that these give a true, fair and clear view of the financial position and results of the Warsaw Stock Exchange Group,
The Consolidated report on the activities of the Warsaw Stock Exchange Group for the six-month period ended 30 June 2018 gives the true view of the Warsaw Stock Exchange Group development, achievements and situation, including the main threats and risks.

Marek Dietl Jacek Fotek

President of the Management Board Vice-President of the Management Board

Dariusz Kułakowski Member of the Management Board

Warsaw, 27 th July 2017

AI Terminal

GPW - Giełda Papierów Wartościowych w Warszawie S.A.

5624_rns_2018-07-31_55d468a3-71fb-425e-8c98-ac77fb68174d.pdf

Giełda Papierów Wartościowych w Warszawie S.A. Group (Warsaw Stock Exchange Group)

I. Selected market data1

II. Selected financial data

Operating profit (PLN mn)

Table 1: Selected data in the consolidated statement of comprehensive income under IFRS, unaudited

Table 2: Selected data in the consolidated statement of financial position under IFRS, unaudited

III. Information about the GPW Group

1. Information about the Group

1.1. Background information about the Group

Basic information about the parent entity:

1.2. Organisation of the Group and the effect of changes in its structure

Figure 1 GPW Group and associates

1.3. Ownership

2. Main risks and threats related to the remaining months of 2018

Risk factors related to the sector of the Group's business activity

Risk factors related to geopolitics and the global economic conditions

Risk factors relating to laws and regulations

Risk associated with amendments and interpretations of tax regulations

The European exchange industry including the Company will be largely impacted by MiFID II and its implementing regulations

The Renewable Energy Sources Act, effective as of May 2015, could have an adverse impact on the business of the Polish Power Exchange, its financial position and results of operations

Risk factors related to the business activity of the Group

The Company cannot control regulatory fees which represent a significant share of the Group's expenses

Risk of the take-over of the functions of fixing organiser

IV. FINANCIAL POSITION AND ASSETS

1. Summary of results

Table 5: Consolidated statement of financial position of GPW Group by quarter in 2017 and 2018

2. Presentation of the financials

REVENUE

Table 6: Consolidated revenues of GPW Group and revenue structure in the six-month periods ended 30 June 2017 and 30 June 2018

FINANCIAL MARKET

TRADING

Equities and equity-related instruments

Table 8: Data for the markets in equities and equity-related instruments

Derivatives

Table 9: Data for the derivatives market

Other fees paid by market participants

Debt instruments

Table 10: Data for the debt instruments market

Other cash market instruments

LISTING

Table 11: Data for the GPW Main Market

Source: Company

Table 12: Data for NewConnect

Table 13: Data for Catalyst

INFORMATION SERVICES

Table 14: Data for information services

COMMODITY MARKET

TRADING

Table 15: Data for the commodity market

REGISTER OF CERTIFICATES OF ORIGIN

Table 16: Data for the Register of Certificates of Origin

CLEARING

OTHER REVENUES

OPERATING EXPENSES

Table 18: Separate operating expenses of GPW and structure of operating expenses in selected periods of 2017 and 2018

Depreciation and amortisation

Salaries and other employee costs

Table 19: Employment in GPW Group

Rent and other maintenance fees

Fees and charges

External service charges

Table 20: Consolidated external service charges of the Group and structure of external service charges in the six-month periods ended 30 June 2017 and 30 June 2018

Other operating expenses

OTHER INCOME AND EXPENSES

FINANCIAL INCOME AND EXPENSES

SHARE OF PROFIT OF ASSOCIATES

Table 21: Profit / (Loss) of associates

Table 22: GPW's share of profit / (loss) of associates

INCOME TAX

V. Atypical factors and events

GPW as the organiser of WIBID and WIBOR reference rate fixings

Sale of an associate

VI. Group's assets and liabilities structure

ASSETS

Table 23: Consolidated statement of financial position of the Group at the end of selected periods (assets)

EQUITY AND LIABILITIES

CASH FLOWS

I. Selected market data¹