Table of contents. Opinion of the expert auditor. Opinion of Regional Accounting Chamber in Warsaw

CITY OF WARSAW

Table of contents Opinion of the expert auditor 6-15 Opinion of Regional Accounting Chamber in Warsaw 16-28 International rating 29 Financial information 32-39 Budget income and expenditure of the City of Warsaw in 8 according to budgetary classification 32 Budget income of the City of Warsaw in 6-8 as by sources 33 Income and revenues of the City of Warsaw in 6-8 34 Expenditure and disbursements of the City of Warsaw in 6-8 35 Liabilities of the City of Warsaw in 6-8 36 Level of debt liabilities of the City of Warsaw in 6-8 concerning budget and statutory values of debt limits 37 2 Balance sheet as of 31 December 8 of performance of the City of Warsaw budget - ASSETS - LIABILITIES 38-39 38 39

D ear Sirs, Being guided by the best practices in respect of management of finances, we submit, herewith, the Annual Report, presenting the budget and balance situation of the Capital City of Warsaw according to the state on the 31st day of December 8, at your disposal. Synthetic form of the Report and its substantial content are aimed at presenting the picture of financial condition of the City, to the addressees of the publication, especially to financial institution, investors and supervising organs; the discussed financial situation has been confirmed by the opinion of the authorized auditor, the opinion of Regional Court of Auditors and the evaluation, issued by the International Rating Agency. We remain, Dear Sirs, Yours sincerely The Treasurer of the Capital City of Warsaw Mirosław Czekaj The Mayor of the Capital City of Warsaw Hanna Gronkiewicz - Waltz 3

A of uthorities the City of Warsaw in 8 Mayor of Warsaw Deputy Mayor of Warsaw - Hanna Gronkiewicz-Waltz - Jacek Wojciechowicz Deputy Mayor of Warsaw - Jarosław Kochaniak Deputy Mayor of Warsaw - Andrzej Jakubiak Deputy Mayor of Warsaw - Włodzimierz Paszyński Secretary of Warsaw - Jarosław Maćkowiak (od 1.1.8) Treasurer of Warsaw - Mirosław Czekaj WARSAW CITY COUNCIL Chairwoman of the Warsaw City Council - Ewa Malinowska-Grupińska Deputy Chairwoman of the Warsaw City Council - Ligia Krajewska Deputy Chairwoman of the Warsaw City Council - Olga Johann Deputy Chairman of the Warsaw City Council - Marek Rojszyk Adam Cieciura Zbigniew Cierpisz Jacek Cieślikowski Paweł Czekalski Magdalena Czerwosz Bartosz Dominiak Dariusz Figura Andrzej Golimont Michał Grodzki Jolanta Gruszka Marcin Hoffman Marcin Jastrzębski Lech Jaworski Piotr Kalbarczyk Mirosława Kątna Marcin Kierwiński Dariusz Klimaszewski Małgorzata Kobus Jarosław Krajewski Mieczysław Król 4 Agnieszka Kuncewicz

Adam Kwiatkowski Paweł Lech Dorota Lutomirska Maria Łukaszewicz Maciej Maciejowski Marek Makuch Waldemar Marszałek Ewa Masny Piotr Mazurek Katarzyna Munio Jakub Opara Anna Pabisiak Paulina Piechna-Więckiewicz Mariola Rabczon Wojciech Rzewuski Joanna Sasak Aleksandra Sheybel-Rostek Wojciech Starzyński Tomasz Sybilski Jarosław Szostakowski Maria Szreder Edmund Świderski Paweł Terlecki Zofia Trębicka Paweł Turowski Sebastian Wierzbicki Stanisław Wojtera Maciej Wyszyński Małgorzata Zakrzewska Małgorzata Załęcka Barbara Zawadzka Dorota Zbińkowska Tomasz Zdzikot Alicja Żebrowska Małgorzata Żuber-Zielicz 5

O pinion of the expert auditor 6

Opinion of the expert auditor - page 2 7

O pinion of the expert auditor - translation 1

Opinion of the expert auditor - translation - page 2 11

O pinion of Regional Accounting Chamber in Warsaw 16

Opinion of Regional Accounting Chamber in Warsaw - page 2 17

O pinion of Regional Accounting Chamber in Warsaw - translation 2

Opinion of Regional Accounting Chamber in Warsaw - translation - page 2 21

Rof the City of Warsaw ating evaluation INTERNATIONAL RATING AGENCY MOODY S INVESTOR SERVICE published on 15th day of December 8 The International Rating for the Capital City of Warsaw Evaluation of rating: A2 WITH A STABLE PERSPECTIVE Key premises for rating on the level: stable A2, as granted by Moody s agency: positive economic-social indicators, good indices of current activities during the recent years, low indices of indebtedness and service of debt. The rating evaluation considers formal requirements, being satisfied by the City, the possibility of generating the stable incomes from the taxes, and capacity of controlling the increase of expenses. The rating considers also a trend of changes under the financial situation of the City and the increase of indebtedness, resulting from the implementation of a very ambitious programme of investing in infrastructure. The complete analysis of credit potential of Warsaw is available after logging in, on the website of rating agency www.modys.com. 29

Financial information of the City of Warsaw Budget income and expenditures of the City of Warsaw in 8 according to budget classification Budget income of the City of Warsaw in 6-8 as by sources Income and revenues of the City of Warsaw in 6-8 Expenditure and disbursements of the City of Warsaw in 6-8 Liabilities of the City of Warsaw in 6-8 Level of debt liabilities of the City of Warsaw in 6-8 as by sources against Budget item values and statutory debt limits Balance sheet as of 31.12.8 of budget implementation of the City of Warsaw - ASSETS - LIABILITIES 32 33 34 35 36 37 38 39 31

Budget income and expenditures of the City of Warsaw in 9 according to budget classification The amounts given below are in PLN thousand Agriculture and hunting Forestry Electricity, gas and water production and supply Trade Transport and communication Tourism The provision of housing Service activity Public administration Main authorities offices, control and protection of law as well as `judicature Public security and fire protection Income from legal persons, natural persons and other bodies without legal personality and expenditure connected with their collection Public debt service Various settlements Education and upbringing Higher education Health care Social service Other activities within the scope of social policy Educational foster care Municipal services management and environment protection Culture and national heritage protection Botanical gardens and zoos as well as nature and protected environment Physical education and sport INCOME 25 423 241 19 994 87 113 1 439 719 6 89 29 587 247 74 986 6 129 522 1 175 768 51 229 19 619 249 98 1 592 5 37 42 28 1 987 8 599 15 962 EXPENDITURE 51 7 579 5 613 26 2 95 125 4 813 1 11 322 64 394 892 982 247 256 897 3 833 131 685 782 312 2 117 57 2 8 251 195 589 255 87 148 227 114 258 122 533 576 5 433 249 437 32 DEFICIT SETTLEMENT IN PLN THOUSAND INCOME 1 256 993 EXPENDITURE 1 522 296 DEFICIT -265 33

udget income Bof the City of Warsaw in 6-8 as by sources The values below are provided in PLN thousand 6 7 8 I OWN RESOURCES Income on tax Fee receipts Property income Remaining income 1 295 537 1 658 798 1 46 882 23 916 218 748 256 164 1 342 563 1 24 22 1 14 699 1 116 764 1 185 12 1 38 216 TOTAL 3 958 78 4 266 886 4 183 961 II REMAINING INCOME Share in income of the state budget Subsidies Grants for own projects Funds from foreign and other sources Grants for requested tasks 3 277 929 85 99 153 557 62 352 255 955 4 59 75 954 984 5 19 17 543 314 92 4 325 828 1 62 956 55 83 322 162 287 529 Targeted subsidies implemented on the basis of agreements 16 9 17 65 18 754 TOTAL 4 616 792 5 54 956 6 73 32 TOTAL INCOME 8 575 572 9 771 842 1 256 993 33

Income and revenues of the City of Warsaw in 6-8 as by sources The values below are provided in PLN thousand 6 I TOTAL INCOME OF THE CITY BUDGET 8 575 572 Income from 8 33 527 own projects 3 958 78 share 3 277 929 subsidies 85 99 grants for own projects 153 557 funds from foreign and other sources 62 352 Targeted subsidies for implementation of requested tasks 255 955 Targeted subsidies implemented on the basis of agreements 16 9 7 9 771 842 9 439 272 4 266 886 4 59 75 954 984 5 19 17 543 314 92 17 65 8 1 256 993 9 95 71 4 183 961 4 325 828 1 62 956 55 83 322 162 287 529 18 754 II REVENUES OF THE CITY BUDGET 772 691 1 43 23 1 878 184 from privatisation 1 322 1 777 1 767 from contracted state loans and credits 1 414 from contracted foreign loans and credits 43 from other state accountings 769 955 1 41 426 1 446 417 III REVENUES OF STATE ENTERPRISES 24 648 231 18 267 688 IV OWN RESOURCES OF AUXILIARY ENTERPRISES 16 341 18 132 17 16 V OWN RESOURCES OF STATE ENTITIES 13 889 115 967 128 811 VI REVENUES OF FUNDS FOR SPECIFIC PURPOSE 59 141 64 88 61 588 34

xpenditure and disbursements Eof the City of Warsaw in 6-8 as by sources The values below are provided in PLN thousand 6 7 8 I TOTAL EXPENDITURE OF THE CITY BUDGET 8 86 11 9 97 978 1 522 296 Current expenses 6 85 134 7 386 333 8 425 763 remuneration and earnings-related contributions 2 236 694 2 391 6 2 676 279 subsidies 1 142 712 1 268 79 1 543 56 expenses for materials 3 355 57 3 614 46 4 74 749 debt service 115 671 111 96 122 827 sureties and guarantees 81 8 852 Capital expenses 1 235 967 1 711 645 2 96 533 shares in companies 11 6 8 9 5 subsidies / financial aid 7 796 4 42 7 99 investments 1 217 111 1 699 243 2 79 619 II REIMBURSEMENT OF THE CITY BUDGET 22 147 27 616 448 354 Redemption of securities (bonds) 4 7 5 5 Payment of contracted state loans and payments 214 451 219 88 398 88 Payment of contracted foreign loans and payments 5 696 46 18 43 974 III EXPENDITURE OF STATE ENTERPRISES 21 276 224 185 262 18 IV EXPENDITURE OF AUXILIARY ENTERPRISES 16 427 18 93 17 39 V EXPENDITURE FINANCED FROM OWN RESOURCES OF STATE ENTITIES 94 5 18 217 118 681 VI EXPENDITURE OF FUNDS FOR SPECIFIC PURPOSE 66 43 65 497 26 987 35

Liabilities of the City of Warsaw in 6-8 Values below are provided in PLN 6 7 8 LIABILITIES OF THE CITY BUDGET 2 551 567 99 2 275 721 7 2 26 671 152 Credits and loans 2 528 775 525 2 257 77 467 2 248 123 519 Bonds 22 7 18 12 5 Liabilities due 91 574 14 233 47 633 2 528 775 525 2 257 77 467 2 248 123 519 22 7 91 574 18 14 233 12 5 47 633 LIABILITIES OF SPZOZ, FOR WHICH THE CITY IS THE FOUNDING ENTITY 15 37 12 157 868 16 161 413 224 Including liabilities due 4 254 141 4 891 829 57 128 926 LIABILITIES OF CULTURAL INSTITUTIONS, FOR WHICH THE CITY IS THE FOUNDING ENTITY 1 388 97 11 98 231 18 48 387 Including liabilities due 1 113 97 71 368 35 626 36

L evel of debt liabilities of the City of Warsaw in 6-8 as by sources against Budget item values and statutory debt limits Values below are provided in PLN thousand 6 7 8 8 575 572 8 86 11 489 471 772 691 1 414 1 322 769 955 22 147 22 147 2 551 568 2 528 776 22 7 92 335 818 115 671 22 147 9 771 842 9 97 978 673 864 1 43 23 1 777 1 41 426 27 616 265 916 4 7 2 275 722 2 257 78 18 14 385 698 111 96 265 916 4 7 3 986 1 256 993 1 522 296-265 33 1 878 184 43 1 767 1 446 417 448 354 442 854 5 5 2 26 671 2 248 123 12 5 48 58 38 122 827 442 854 5 5 8 857 5 145 343 29,8% 1 286 336 3,9% 5 863 15 23,3% 1 465 776 3,9% 6 154 196 22,% 1 538 549 5,7% Values below are provided in PLN 1 53 198 1 341 227 1 332 342 37

B alance sheet as of 31.12.8 of budget implementation of the City of Warsaw The amounts given below are in PLN I. FINANCIAL RESOURCES of the budget of support funds other as of 1.1.8 1 118 865 64 1 18 24 96 318 99 1 35 735 ASSETS as of 31.12.8 1 261 212 16 4 163 15 548 1 261 12 395 II. RECEIVABLES AND SETTLEMENTS Financial receivables: short-term (up to 12 months) long-term (over 12 months) Receivables from budgets Other receivables and settlements 455 113 692 384 638 76 7 475 616 131 267 787 121 83 858 9 463 929 III. OTHER ASSETS Prepayments and accrued income 5 7 5 7 ASSETS TOTAL 1 579 679 296 1 392 479 893 38

The amounts given below are in PLN I. LIABILITIES Financial liabilities short-term (up to 12 months) long-term (over 12 months) Liabilities against budgets Other liabilities LIABILITIES as of 1.1.8 2 291 45 237 2 275 77 467 7 54 532 2 268 22 935 5 665 476 1 77 294 as of 31.12.8 2 274 87 134 2 26 623 519 28 265 623 2 52 357 896 8 479 657 5 73 958 II. BUDGET NET ASSETS Budget surplus (+) Budget deficit (-) Non-implemented expenditure (-) Permanent expenses reserve Result on assistance funds (+,-) Result on non-cash operations (+,-) Assistance funds Resources from privatisation Accumulated surplus or deficit on budget resources (+,-) -781 558 532 658 888 19-47 731 586 47 731 586 62 719 551 5 152 151-59 249 76 1 776 666-1 45 846 14-962 781 366-339 22 534-133 413 919 133 413 919 27 132 739-3 264 435 3 366 373 1 767 83-832 76 592 III. OTHER LIABILITIES Prepayments and accrued income 69 787 591 69 787 591 8 454 125 8 454 125 LIABILITIES TOTAL 1 579 679 296 1 392 479 893 39

Free Infoline of the Office of the Capital City of Warsaw 8 7 7 47 Information Centre of the Office 6/8, Miodowa street -251 Warsaw (the hall situated on the right from the Main Entrance) Open: Monday: 8. a.m. 6. p.m. (18.) Tuesday Friday: 8. a.m. 5. p.m. (17.) General administrative department the main office: -95 Warsaw 3/5, Bankowy Square, room 17 (The Main Entrance, C, first floor) tel. 22 595 31 22 Open: Monday: 1. a.m. 6. p.m. (18.) Tuesday Friday: 8. a.m. 4. p.m. (16.) Internet service: www.um.warszawa.pl BIP: www.bip.warszawa.pl 4