Internal control system

The financial statements are drawn up based on:

  • International Financial Reporting Standards, Accounting Act of September 29, 1994;
  • Articles of Association of Giełda Papierów Wartościowych w Warszawie S.A.;
  • “Accounting rules applied by Giełda Papierów Wartościowych w Warszawie S.A.” and rules applied by its subsidiaries;
  • internal accounting procedures.

The Company’s internal control system is a process developed to respond to identified risks in order to ensure an efficient and safe task implementation in compliance with the applicable regulations. The internal control system comprises:

  • control activities carried out by all employees with respect to the tasks entrusted to them;
  • functional control, performed as part of the duty of supervision over subordinated organizational units by the managerial staff;
  • institutional control, which is performed by the Audit and Control Section, a separate unit assessing the operation and effectiveness of the internal control system in other organizational units of the Company.

As regards reporting risk management, the Company regularly monitors changes in legal and external regulations on reporting activities and arranges for such changes to be implemented, e.g., by organizing employee training and using external advisory services. The Company’s internal regulations are also updated on an on-going basis with a view to adjusting them to changing regulations.

Compliance with internal and external regulations in the Company is ensured by the Financial Accounting Section which is responsible for preparation of financial statements under the supervision and guidance of the Chief Accounting Officer and the Economic and Financial Bureau Director. Electronic accounting records are maintained. Software installed in 2001 and upgraded in 2006 was in use until the end of July 2011. A new financial and accounting system was implemented in August 2011. These IT systems include mechanisms protecting data against loss, modification or concealment. This control is effected at the journal entry stage. Moreover, independent internal audits of financial and accounting processes are performed.

Consolidated financial statements are prepared by the Financial Accounting Section based on the consolidation packages provided by each subsidiary. The WSE Financial Accounting Section is responsible for the scope and rules of reporting in the consolidation packages and verifies whether the subsidiaries correctly fill the consolidation packages. Data to be included in the packages are prepared by the subsidiaries in accordance with the “Accounting Rules” set by the parent entity. The financial data registration, processing and presentation processes are handled by the subsidiaries in accordance with their individually developed rules and instructions.

The auditor verifies the correctness of the separate and consolidated financial statements on a quarterly basis. Financial statements for the first and third quarter, as well as semi-annual statements are reviewed by the auditor, whereas the annual financial statements are subject to the full audit.

The Company’s Management Board and Supervisory Board members must ensure that the financial statements and the report on the Company’s operations meet the requirements set in the Accounting Act of September 29, 1994. The authority which controls the financial reporting process within WSE is the Audit Committee nominated by the WSE Supervisory Board. The Committee is responsible for monitoring the financial reporting process, the financial review activities and the auditor’s independence. WSE’s auditor is chosen by the Supervisory Board following recommendations made by the Audit Committee from amongst renowned audit companies. Auditors for the subsidiaries are appointed under decisions of relevant supervisory boards. The Audit Committee also monitors the organizational unit responsible for the internal audit and verifies the effectiveness of the internal control systems. The Supervisory Board’s duties involve, among other things, assessing WSE’s Management Board report on the Company’s operations and the financial statements and submitting a written report with the results of the above assessment to the General Meeting.

In the Company’s opinion, the division of tasks related to the preparation of the financial statements in the Company, the review of the prepared financial statements by the auditor, and the monitoring of the process of preparing and reviewing the financial statements by the Audit Committee, as well as the assessment of the financial statements by the Supervisory Board ensure that the information presented in the financial statements is reliable and correct.

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