Ciech S.A.

Legal Proceedings Report • Dec 2, 2021

The Management Board of CIECH S.A. (the "Company"or "Issuer") herewith informs that on 2_#160;December2021, the attorney of a subsidiary of the Issuer - CIECH Sarzyna S.A.(the "Subsidiary") received the decision of the Head of thePodkarpackie Province Tax Office in Rzeszów of 19 November 2021 (the "Decision"and the "Authority" respectively) issued as a result of taxproceedings against the Subsidiary in the scope of auditing corporateincome tax settlements for 2015.

In the Decision, the Authority challenged the rightto settle the tax loss on participation in a partnership, an indirectsubsidiary of the Issuer (the "Partnership") and the rightto charge the fee for the trademark. While taking the activitieschallenged by the Authority, the Subsidiary used the services ofprofessional advisers.

The Subsidiary and its advisers do not agree withthis approach. The Subsidiary intends to take procedural steps to defendthe tax consequences of its 2015 operations.

The Decision for the amount of the tax liability ofPLN 6.4 million is neither final nor enforceable. Nevertheless, theSubsidiary will consider the legitimacy of the payment of the amountspecified in the Decision, and additionally late payment interest,which, as at the date of publication of this report, amount toapproximately PLN 2,9 million, a total of approximately PLN 9,3 million(the "Tax Liability"), although it does not agree with theDecision. The Authority acknowledged the Subsidiary's arguments andrefrained from questioning interest on loans received as a tax expense.

As far as the right to settle the loss for a share inthe Partnership, tax disputes are also pending in the Subsidiary for2016 and in other subsidiaries of the Issuer, as advised by the Issuerin 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, and theinformation on recognising a provision (the "Provision")and the write-down on the asset in connection with this matter wasprovided by the Issuer in its current report number 4/2019 of27.06.2019. The Issuer informs that the Provision covers PLN 7.4 millionof the Tax Liability, of which the Provision for the tax is PLN 5.1million.

The description of the audit in the scope of theright to settle the loss due to the participation of five subsidiariesin the Partnership was presented in point 2.13 of the consolidatedreport of the CIECH Group for the three quarters of 2021 and waspresented in periodic reports published by the Company in previousreporting periods.

Legal basis:Article 17.1 of the Regulation of the European Parliament and of theCouncil (EU) No. 596/2014 of 16 April 2014 on Market Abuse (the MarketAbuse Regulation) and repealing Directive 2003/6/EC of the EuropeanParliament and of the Council and Commission Directives 2003/124/EC,2003/125/EC and 2004/72/EC (Official Journal of the European Union L No.173, p. 1).