PGE Polska Grupa Energetyczna S.A.

Legal Proceedings Report • Nov 10, 2016

Verdict of the Supreme Court in case of the settlement of value ofannual adjustment of the stranded costs (so-called LTC compensations)for 2009 for ZEDO

The Management Board of PGE Polska Grupa Energetyczna S.A. ("PGE")discloses that on November 10, 2016 the Supreme Court, as a result ofexamination of a cassation appeal by the President of the EnergyRegulatory Office (the "ERO President") against the verdict of the Courtof Appeal of January 17, 2013, issued a verdict in case of thesettlement of value of annual adjustment of the stranded costs(so-called LTC compensations) for 2009 for PGE GiEK S.A. Branch ZEDO.

In its verdict the Supreme Court set the amount of annual adjustment ofLTC compensations for approximately PLN 50.8 million.

As a result of the above verdict, PGE GiEK will return approximately PLN66.2 million to Zarządca Rozliczeń S.A. (company responsible for LTCsettlements).

The verdict has no impact on the consolidated revenues of the currentperiod.

The above verdict of the Supreme Court ends the dispute between PGE GiEKS.A. and the ERO President in that particular case.