Ciech S.A.

Legal Proceedings Report • Sep 10, 2019

Text of the report:

The Management Board of CIECH S.A. (the "Company"or "Issuer") herewith informs that on 9 September 2019, thelegal representative of subsidiaries of the Issuer - CIECH Soda PolskaS.A., CIECH Cargo sp. z o.o., CIECH Pianki sp. z o.o. (hereinafterjointly the "Subsidiaries") - received the decisions of theDirector of the Tax Administration Chamber in Bydgoszcz (the "2ndInstance Authority") dated 27 August 2019. Following the appealslodged by the Subsidiaries, the authority upheld three decisions of theHead of the Kujawsko-Pomorskie Tax Office in Bydgoszcz(the"1stInstance Authority") dated 23 May 2019,according to which the total amount of the tax arrears of theSubsidiaries due to corporate income tax for 2015 is PLN 8.2 million(the "Tax"). As at the date of publication of this report,the total amount of default interest is approx. PLN 2.3 million (the "Interest").

The Company informed about the decision of the 1stInstance Authority in its Current Report No. 22/2019 of 6 June 2019. Inconsideration of the Tax and Interest accrued until 31 December 2018,the Company created relevant provisions in the consolidated financialstatements of the CIECH Group, as notified by the Company in its CurrentReport No. 24/2019 of 27 June 2019.

The Subsidiaries and their advisers disagree with theapproach expressed in the decisions of the 2ndInstanceAuthority. The Subsidiaries intend to take further procedural measuresin order to defend the tax consequences of their 2015 operations andlodge a complaint with the competent Regional Administrative Court.

The decisions of the 2ndInstanceAuthority are enforceable. Accordingly, the Subsidiaries are required topay both the Tax and the Interest.