Ciech S.A.

Related Party Transaction • Mar 30, 2018

Contents of thereport:

With reference tocurrent report no. 20/2017 of 30 November 2017 (the "CurrentReport"), concerning, among others, confirmation of acceptance byCIECH Soda Polska Spółka Akcyjna with its registered office inInowrocław (the "Subsidiary"), of an offer by PolskaGrupa Górnicza S.A. with its registered office in Katowice ("PGG")for the supply of power coal (the "Product"), containingsignificant terms and conditions of a new contract for 2018 and thefollowing years, the Management Board of CIECH S.A. (the "Issuer")herewith informs that on 30 March 2018, as a result of furthernegotiations, the Subsidiary signed a contract for the sale of theProduct (the "Agreement") withPGG.

The subject matter ofthe Contract is the sale of the Product to the Subsidiary by PGG as perFCA PGG's mine stations, according to Incoterms 2010.

The contract wasconcluded for an indefinite period. The contract will terminate if thefixed quality parameters of the Product change and if the Parties failto agree on the new quality parameters of the Product on or before 30September of the year preceding the next annual delivery period.

The agreement providesfor the determination of the price of the Product for 2018, while insubsequent years, the price will be determined according to a priceformula. The price of the Product depends on its calorific value.

The Parties providedfor the possibility to reduce the volume of the Product supplies in theannual delivery period if a relevant request is submitted by eitherParty, and the possibility to increase the volume of supplies in theannual delivery period if a relevant request is submitted by theSubsidiary and if PGG confirms its ability to increase supplies.

The estimated value ofthe Contract in the period of 5 years may amount to approximately PLN340,000,000.

The contract providesfor contractual penalties reserved for the Subsidiary and PGG in theevent of failure to collect or failure to deliver, respectively, of theminimum quantity of the Product fixed in the Contract less productionallowance. The amount of contractual penalties was fixed at 10% of thevalue of uncollected or undelivered Product to the minimum amount ofProduct determined for the relevant year of Contract duration.

Either Party may claimcompensation, on general terms, in excess of the contractual penaltiesspecified in the Contract if the contractual penalties do not cover thedamage incurred.

Either Party has theright to terminate the Contract without a cause by giving notice to theother Party with a two-year notice period, effective as of the end ofthe calendar year in which the notice period expires.

The remaining terms andconditions of the Contract do not differ from the terms commonly appliedin business to this type of contracts.

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)(the "MAR").