Ciech S.A.

Management Reports • Nov 25, 2019

Subject:Adoptionof the CIECH Group Reorganisation Concept

Text of the report:

In reference to Current ReportNo. 34/2018 of 5 December 2018, in which CIECH S.A. ("CIECH"or the "Company") informed on the adoption of the CIECHGroup's Strategy for 2019-2021 (the "Strategy"),Current Report No. 8/2019 of 19 March 2019, in which the Company advisedon the initiation of a detailed review of options in terms of changes inthe corporate and organisational structure and the structure of assetsof the CIECH Group - the Company herewith informs that on 25 November2019, the Management Board of the Company (the "Management Board")adopted a resolution on the adoption of the reorganisation concept ofthe CIECH Group (the "Reorganisation Concept").

The Reorganisation Conceptprovides for the division of competences within the CIECH Group amongindividual business areas - business units (the "BUs") andthe Company. The adoption of the Reorganisation Concept is to serve therealisation of the key goal under the Strategy, i.e. the creation of aneffective and diversified chemical holding generating long-term positivevalue for shareholders, as well as improvement of business anddecision-making processes and improving the transparency of theoperation of the CIECH Group. As part of the implementation of theReorganisation Concept, activities have been envisaged which are aimedat separating independent entities within the CIECH Group that willconstitute BUs or will be part of the individual CIECH Group BUs:

1.BU Soda;

2.BU Salt;

3.BU Agro;

4.BU Resins;

5.BU Silicates;

6.BU Packaging;

7.BU Foams.

CIECH is to operate as theentity managing the CIECH Group, responsible, among others, for buildingthe long-term and sustainable value of the CIECH Group for allshareholders, defining the strategy of the CIECH Group, includingindividual BUs, setting goals for the BUs as well as monitoring andaccounting for their achievement, providing specified services to BUs,and building and maintaining the desired organisational culture withinthe CIECH Group.

The purpose of the plannedactivities is to create such a structure of the CIECH Group in whicheach BU will operate as a separate company or a sub-holding company. BUswill be responsible for the implementation of their strategy and theirfinancial results. All companies and sub-holding companies forming BUswill ultimately depend on the Issuer. In accordance with the assumptionsof the Reorganisation Concept, there will be integration, consolidationand placing of the operational activity of the BU within such a BU. Thiswill result, among others, in revenues and expenses from the BU'sactivities generated in such a BU.

In order to achieve the above,the adopted Reorganisation Concept involves a number of corporateactivities, as a result of which the target structure of the CIECH Groupis to be achieved through the division of companies or transfer ofassets within the CIECH Group (i.e. contributions in kind, sale andliquidation of some companies, if applicable). The Management Board ofthe Company does not rule out changing the reorganisation method withregard to activities arising from the Reorganisation Concept, dependingon the progress in obtaining necessary approvals or any other legal orbusiness issues. In addition, further simplification of the CIECH Groupstructure is planned through mergers or liquidations of othersubsidiaries of the Issuer with less significance for the Group.

Given the complexity of thisprocess, the need to obtain numerous administrative approvals anddecisions, and the need to implement intra-group processes, such asdivisions, capital increases requiring registration by competent courts,etc., at this stage, the planned date of the completion of the processof implementing the Reorganisation Concept is the end of 2022.

The Reorganisation Concept hasbeen prepared in consultation with renowned tax and legal advisors inorder to ensure that its implementation is carried out, to the largestextent, in a transparent and safe manner, from both a legal and a taxpoint of view, and in particular, taking into account the legalenvironment, including applicable laws and their current interpretationas presented by tax authorities or administrative courts.