Ciech S.A.

Legal Proceedings Report • Aug 7, 2019

With reference to Current Report No. 26/2019 of 17July 2019, the Management Board of CIECH S.A. (hereinafter referred toas the "Issuer" or "CIECH") herewith informs that on 6 August 2019, thecommercial proxy of a subsidiary of the Issuer, Verbis ETA sp. z o.o.S.K.A. (hereinafter referred to as the "Subsidiary"),received an order (hereinafter referred to as the "Order")of the Head of the Third Tax Office for Warszawa-Śródmieście(hereinafter referred to as "Authority 1") to makethedecision of the Head of the Małopolskie Province Customs and Tax Officein Krakow (hereinafter referred to as the"Decision"and "Authority 2", respectively) immediately enforceable,which was issued in connection with the tax proceedings conductedagainst the Subsidiary by Authority 2 with respect to the settlement ofVAT for the fourth quarter of 2013.

The Issuer informed about pending tax proceedings andthe amount of potential tax liability in the consolidated statements ofthe CIECH Group. In the consolidated statements of the CIECH Group for2018, the proceedings are described in note 9.2, in the section "Auditsof tax settlements in the CIECH Group", with regard to VAT audits: "VATaudit for the fourth quarter of 2013 at VERBIS ETA Sp. z o.o. S.K.A.".

In the Decision, Authority 2 provided the Subsidiarywith the determination of the amount of the tax liability, i.e. PLN37,893,505.00. In consideration of the fact that on 24 January 2014, theSubsidiary paid 7,118,383.00, the disputed amount is PLN 30,775,122.00.The Subsidiary has a claim against the State Treasury for a VAT refundof PLN 30,775,122.00 (hereinafter referred to as a "Tax Claim").Thus, the tax liability specified in the Decision may be enforcedagainst the Tax Claim. The enforcement proceedings conducted byAuthority 1 also pertain to interest, which currently, i.e. today,amount to PLN 14,033,456.00.

The Subsidiary and its advisors disagree with theposition of Authority 1. Accordingly, the Subsidiary intends to submit acomplaint against the Order.

Legal basis: article 17.1 of the Regulation of theEuropean Parliament and of the Council (EU) No. 596/2014 of 16 April2014 on Market Abuse (the Market Abuse Regulation) and repealingDirective 2003/6/EC of the European Parliament and of the Council andCommission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OfficialJournal of the European Union L No. 173, p. 1).