Ciech S.A.

Legal Proceedings Report • Nov 17, 2022

The ManagementBoard of CIECH S.A. (the "Company" or_#160;"Issuer")herewith informs that on_#160;17 November 2022, the attorney of a_#160;subsidiaryof the Issuer - CIECH Sarzyna S.A. (the "Subsidiary")received the decision of the Head of the Podkarpackie Province TaxOffice in Rzeszów of 4 November 2022 (the "Decision"and the "Authority" respectively) issued as_#160;a_#160;result of taxproceedings against the Subsidiary in the scope of auditing corporateincome tax settlements for 2016.

In the Decision,the Authority questioned the settlements between Algete Sp. z o.o. andCiech Sarzyna S.A. regarding Chwastox trademark, the right to tax losson the sale of shares in Ciech Cerium Sp. z o.o. Sp. K and the right tosettle the tax loss incurred in 2015 in connection with the Decision ofthe Head of the Podkarpackie Province Tax Office in Rzeszów issued on 19November 2021, about which the Company informed in the current reportnumber 37/2021 of 02.12.2021. While taking the activities challengedby_#160;the Authority, the Subsidiary used the services of professionaladvisers.

The Subsidiaryand its advisers do_#160;not agree with this Decision. The Subsidiary intendsto_#160;take procedural steps to_#160;defend the tax consequences of its 2016operations.

The Decision forthe amount of the tax liability of PLN 4.7 million is neither final norenforceable. Nevertheless, the Subsidiary will consider the legitimacyof the payment of the amount specified in the Decision, and additionallylate payment interest, which, as_#160;at the date of publication of thisreport, amount to_#160;approximately PLN 2.3 million, a_#160;total ofapproximately PLN 7.0 million (the "Tax Liability"),although it does not agree with the Decision.

As far as_#160;theright to_#160;settle the loss for a_#160;share in the Partnership which wasquestioned in 2015, tax disputes are also pending in the Subsidiary andin other subsidiaries of the Issuer for the year 2015, as_#160;advised by_#160;theIssuer in its current reports numbers: 22/2019 of 6.06.2019, 38/2019 of9.09.2019, 49/2019 of 11.12.2019 and 12/2020 of 13.03.2020, 37/2021 of02.12.2021 and 22/2022 of 01.06.2022, and the information on_#160;recognizinga_#160;provision (the "Provision") and the write-downon_#160;the asset in connection with this matter was provided by_#160;the Issuerin its current report number 4/2019 of 27.06.2019. The Issuer informsthat the Provision covers PLN 5.3 million of the Tax Liability, of whichthe Provision for the tax is PLN 3.6 million.

The descriptionof the audit in the scope of the right to_#160;settle the loss due to_#160;theparticipation of five subsidiaries in the Partnership was presented inpoint 2.13 of the consolidated report of the CIECH Group for the firsthalf of 2022 and was presented in periodic reports published by_#160;theCompany in previous reporting periods._#160;

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Legal basis:_#160;Article17.1 of the Regulation of the European Parliament and of the Council(EU) No. 596/2014 of 16 April 2014 on_#160;Market Abuse (the Market AbuseRegulation) and repealing Directive 2003/6/EC of the European Parliamentand of the Council and Commission Directives 2003/124/EC, 2003/125/ECand 2004/72/EC (Official Journal of the European Union L No. 173, p. 1).