Current reports

Current Report No. 5 of 18 March 2008 on the proposed distribution of the net profit for 2007 and dividend payment.

Legal basis: § 39 section 1 item 7 of the Ordinance of the Minister of Finance on current and periodical information provided by issuers of securities dated 19 October 2005 (Journal of Laws, No. 209, item 1744)

On 18 March 2008 the Management Board of Bank Handlowy w Warszawie S.A. took a resolution on the distribution of the net profit for 2007. The Management Board of the Bank proposed to appropriate the amount of PLN 687,269,496.00 for dividend payment.
On the basis of this proposed distribution of the net profit, the dividend per ordinary share will amount to PLN 5.26.

The Bank’s Management Board proposed to set the dividend date for 4 July 2008 and the date of the dividend payment for 29 August 2008.

The above proposal of the Management Board will be presented to the Supervisory Board for consideration and then to the Annual General Meeting of Shareholders for approval.

The period recommended by the Bank between the dividend date (the Day D) and the dividend payment date (the Day W) is longer than the maximum period of 15 working days provided for in the Code of Best Practice for WSE Listed Companies (the Code), which came into force on 1 January 2008.
Detailed grounds for setting a longer period are as follows:

Due to the current organization of the process of dividends payment established in the “Detailed Rules of Operation of the National Depository for Securities” (the “Rules”), in order to ensure the correct reconciliation of tax due on revenue from dividends, the gap between the Day D (rights) and the Day W (payment) should be minimum two months.

The Bank (issuer), acting as a tax payer of corporate income tax due on dividends paid, receives from other participants, i.e. the National Depository for Securities and Brokerage Houses, information on shareholders and their rights to dividend as well as tax certificates for shareholders having their seats outside of Poland (in case of applying a preferential tax rate). In particular the process includes:

1. According to the Rules, the National Depository for Securities informs the issuer ( the Bank) about the amount to be transferred to the account of the National Depository for Securities and provides the list of participants (Brokerage Houses), acting as agents in paying dividends to legal persons;
2. Participants (Brokerage Houses) provide the issuer (the Bank) with the list of the shareholders having the right to dividend and the information on the dividend amount. All the above information is provided to the Bank in paper form only, by registered mail.
3. The Bank, acting as a payer of corporate income tax on gains from dividends, is responsible for the correctness of tax reconciliation. Due to the above the Bank verifies and clarifies all the information provided to it. In particular, the right to a preferential tax rate (resulting from Double Tax Treaty) and tax relief are required to be verified. As the result of the verification process, the tax rate applied may be changed and the Brokerage Houses may be required to provide the corrected data (lack of the right to a preferential tax rate or tax relief).
4. All information in the process, either from the National Depository for Securities or Brokerage Houses, is provided in paper form only. Due to the above, reconciliation of the dividend by the Bank requires verification of documents in paper form and input of the data to the dedicated system.
   Due to the above, in order to enable the Bank, acting as the payer, to ensure the correct reconciliation of tax due on revenue from dividends, the recommended gap between the Day D and the Day W should be two months.