Ladies and Gentlemen,
The year 2014 was very busy and eventful for the entire PGNiG Group. The ongoing deregulation of the gas market has brought with it increased competition, and the record-low oil prices affected the condition and revenues of the entire upstream industry.

Against this backdrop, the fact that in 2014 the PGNiG Group posted a net profit of over PLN 2.8bn, (up 47% on 2013) is all the more noteworthy. This exceptional result is largely attributable to disciplined management of the Group and the consistent steps that have been taken towards the further restructuring of the Group companies. The PGNiG Group’s performance confirms that its remedial programmes, including efficiency improvement measures, are taking it in the right direction.

I have the pleasure of being Chairperson of the PGNiG Supervisory Board, which monitored the economic and financial standing of both the Company and the PGNiG Group, and also cooperated with the Management Board, supporting it in key decisions. In 2014, the Supervisory Board held 14 meetings and passed more than 100 resolutions.

Without question, one of the crucial decisions made in 2014 was the adoption by the Management Board, and then the approval by the Supervisory Board, of the new PGNiG Group Strategy for 2014-2022, awaited by the market and our shareholders.

The PGNiG Group’s objective is to remain the leader in the hydrocarbon exploration and production sector, and the main supplier of natural gas, while also offering heat and electricity in a deregulated gas market.

The priorities will include maintaining the value of retail sale and wholesale, maximising cash flows from transmission infrastructure, gas storage and generation, as well as strengthening the exploration and production business. These areas are seen as drivers of the Group’s further growth.

PGNiG’s strategy will help it achieve its main objectives, including:

• EBITDA growth to PLN 7bn in 2022;
• capital expenditure of PLN 40–50bn by the end of 2022;
• maintaining domestic hydrocarbon production at current levels;
• increasing crude oil and gas production abroad through the acquisition of exploration and production assets;
• developing new areas of operation by expanding the value chain;
• significantly increasing the PGNiG Group’s internal operational efficiency.

PGNiG will also continue its efforts to improve the Group’s cost effectiveness and organisational efficiency. Improved efficiency and focus on segments of key importance to PGNiG’s future will enhance the Group’s ability to finance new projects and its competitive position on the market.

I believe that the consistent implementation of these objectives will deliver benefits to all stakeholders of the PGNiG Group. The Supervisory Board will most certainly support the Management Board in that effort.

Yours faithfully,

Wojciech Chmielewski
Chairperson of the Supervisory Board