Ciech S.A.

Legal Proceedings Report • Sep 22, 2020

The Management Board of CIECH S.A. (the "Company"or "Issuer") herewith informs that today the ProvincialAdministrative Court in Krakow (the "WSA") dismissed thecomplaint lodged by CIECH Soda Polska S.A. (the "Subsidiary"respectively) and upheld the decision of the Head of the MałopolskieProvince Customs and Tax Office in Krakow of 24 December 2019 (the "Decision").The ruling of the WSA is not final. The Decision was communicated by theIssuer in its Current Report No. 3/2020 of 7 January 2020.

The Subsidiary and its advisors do not agree with theposition expressed in the WSA ruling. The Subsidiary intends to takefurther procedural steps in order to defend the tax consequences of its2014 operations by lodging a complaint with the Supreme AdministrativeCourt (the "NSA").

The Management Board of the Subsidiary is in theprocess of analysing the WSA ruling in terms of the rationale forcreating a provision for the amount of interest paid (the "Interest")of PLN 10,034 thousand, which was recognised, at the time of itspayment, as receivables in the financial statements. The creation ofsuch provision, if any, would reduce the consolidated financial result,however, it would not involve the need to pay any additional amounts, asthe tax liability (the "Tax Liability"), along with theInterest, has already been paid.

·The Tax Liability of PLN 25,277thousand was settled by the Subsidiary on 24 August 2018, upon receiptof the result of the tax audit. Contrary to the WSA position, theSubsidiary's opinion is that the Tax Liability paid was settledcorrectly.

·The Tax Liability, along with theInterest, was repaid on 13 January 2020, in order to avoid compulsoryenforcement and the related expenses. The Issuer informed on there-payment in its Current Report No. 4/2020 of 10 January 2020.

·The Subsidiary ought to recover therepaid Tax Liability, along with the Interest, following the ruling ofthe Supreme Administrative Court (NSA), provided that the courtoverrules the Decision.

·However, should the NSA dismiss thecassation complaint of the Subsidiary and uphold the Decision, the TaxLiability will be refunded after the overpayment proceedings for July2018 have been completed.

The Issuer informed on the pending proceedings in:-its Current Reports Nos. 26/2019 of17 July 2019, 39/2019 of 11 September 2019, 3/2020 of 7 January 2020,and 4/2020 of 10 January 2020.

·-the consolidated statements of theCIECH Group. In the extended consolidated financial statements of theCIECH Group for the first quarter of 2020, these proceedings aredescribed in Note 2.13, in the section "Audits of tax settlements in theCIECH Group", in the paragraph "VAT audit for December 2014 atCeriumFinance Sp. z o.o."

Legal basis:Article17.1 of the Regulation of the European Parliament and of the Council(EU) No. 596/2014 of 16 April 2014 on 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).