PGE Polska Grupa Energetyczna S.A.

Audit Report / Information • Aug 10, 2016

PGE Polska Grupa Energetyczna S.A.

Report on review of the condensed interim consolidated financial statements For the period from 1 January 2016 to 30 June 2016

9 August 2016 The report contains 2 pages

KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. ul. Inflancka 4A 00-189 Warszawa Poland

Telefon +48 22 528 11 00 +48 22 528 10 09 Fax E-mail kpmg@kpmg.pl Internet www.kpmg.pl

This document is a free translation of the Polish original. Terminology current in Anglo-Saxon countries has been used where practicable for the purposes of this translation in order to aid understanding. The binding Polish original should be referred to in matters of interpretation

INDEPENDENT AUDITORS' REPORT ON REVIEW OF THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF THE PGE POLSKA GRUPA ENERGETYCZNA S.A. GROUP FOR THE PERIOD FROM 1 JANUARY 2016 TO 30 JUNE 2016

To the Shareholders of PGE Polska Grupa Energetyczna S.A.

Introduction

$\sim$

We have reviewed the accompanying 30 June 2016 condensed interim consolidated financial statements of the PGE Polska Grupa Energetyczna S.A. Group ("the Group"), with its parent company's registered office in Warsaw, ul. Mysia 2 ("the condensed interim consolidated financial statements"), which comprise:

• the consolidated statement of financial position as at 30 June 2016,
• the consolidated statement of comprehensive income for the six-month period ended 30 June $\bullet$ 2016,
• the consolidated statement of changes in equity for the six- month period ended 30 June 2016,
• the consolidated statement of cash flows for the six-month period ended 30 June 2016, and $\bullet$
• notes to the interim consolidated financial statements.

Management of the parent company is responsible for the preparation and presentation of these condensed consolidated interim financial statements in accordance with the IAS 34 Interim Financial Reporting as adopted by the European Union. Our responsibility is to express a conclusion on these condensed interim consolidated financial statements, based on our review.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity as adopted by the National Council of Certified Auditors as the National Standard on Assurance 2410. A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with National Standards on Assurance or International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

KPMG Audyt Spółka z ograniczoną
odpowiedzialnością sp.k., a Polish limited liability partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative ("KPMG International"), a Swiss entity

$\mathbf{1}$ KPMG Audyt Spółka z ograniczoną odpowiedzialnością
sp.k. jest polską spółką komandytową i członkiem sieci KPMG składającej się z niezależnych spółek
członkowskich stowarzyszonych z KPMG International
Cooperative ("KPMG International"), podmiotem prawa szwajcarskiego.

Spółka zarejestrowana w Sadzie Reionowym dla m.st. Warszawy
w Warszawie, XII Wydział Gospodarczy Krajowego Rejestru Sądowego.

KRS 0000339379 NIP 527-261-53-62 REGON 142078130

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim consolidated financial statements as at 30 June 2016 are not prepared, in all material respects, in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.

Emphasis of matter

Without qualifying our conclusion, we draw attention to note 24.1 to the condensed interim consolidated financial statements which describes that the estimates of compensations related to early termination of long-term agreements for the sale of electric power and energy and recognition of related revenues and settlements were based on the PGE Polska Grupa Energetyczna S.A. Group's own interpretations of the Act dated 29 June 2007, on rules of covering producer's costs related to early termination of long-term agreements for the sales of electric power and energy (Official Journal, No. 130, item 905, year 2007 with amendments) (the "LTC Act"), the expectations on the final outcome of the disputes with the President of the Energy Regulatory Office and on a number of significant assumptions. As described in note 2.4 to the accompanying condensed interim consolidated financial statements, the final outcome of the disputes with the President of the Energy Regulatory Office with respect to the interpretation of the LTC Act, as described in note 24.1 to the condensed interim consolidated financial statements, and potential changes in adopted assumptions, may significantly impact the estimates and as a consequence may lead to significant changes in the financial position and performance of the Group. As of the date of the condensed interim consolidated financial statements, the ultimate outcome of the disputes with the President of the Energy Regulatory Office cannot be determined.

On behalf of KPMG Audyt Spółka z ograniczoną odpowiedzialnościa sp.k. registration number 3546 ul. Inflancka 4A 00-189 Warsaw

Signed on the Polish original

. . . . . . . . . . . . . . . . . . . . Marta Zemka Key Certified Auditor Registration No. 10427 Limited Liability Partner with power of attorney

9 August 2016