PGE Polska Grupa Energetyczna S.A.

Legal Proceedings Report • Apr 15, 2016

The verdict of the Court of Appeal regarding the settlement of value ofannual adjustment of the stranded costs (so-called LTC compensations)for 2010 for PGE GiEK S.A. Branch Elektrownia Opole

The Management Board of PGE Polska Grupa Energetyczna S.A. ("PGE")discloses that on April 14, 2016 the Court of Appeal in Warsaw issued averdict in which it allowed the appeal of PGE GiEK S.A. dismissed theappeal of the President of the Energy Regulatory Office (the "EROPresident") against a judgement of the Regional Court in Warsaw - theCourt of Competition and Consumer Protection (the "CCCP") of August 14,2014, regarding the settlement of value of annual adjustment of thestranded costs for 2010 for PGE GiEK S.A. Branch Elektrownia Opole dueas a result of the termination of long-term contracts of sale ofcapacity and electricity (so-called "LTC compensations").

The judgement is final and binding. However the ERO President isentitled to file a cassation appeal with the Supreme Court.

The Management Board of PGE expects that the verdict will have apositive impact of approximately PLN 173 million in Q1 2016 on EBIT ofConventional Generation business line.

Legal ground: Art. 56 section 1 point 1 of the Act on public offering,conditions governing the introduction of financial instruments toorganised trading, and public companies (Dziennik Ustaw 2013, item 1382,as amended).