Current Report No.: 2/2019

Creation of provisions for tax and interest obligations

Current Report No.: 2/2019

Date of preparation:

Abbreviated name of the Issuer: CIECH S.A.

Subject: Creation of provisions for tax and interest obligations

Legal basis: Art. 17.1 of the MAR – inside information


With reference to Current Report No. 36/2018 of 27 December 2018, the Management Board of CIECH S.A. (the "Company" or "Issuer") informs that today, based on its own assessment of the case, the advisor's opinion and the auditor's approach, it has completed the internal assessment of risks related to the decision of the Head of the Małopolskie Province Customs and Tax Office in Cracow (the "Office" or "Authority") dated 13 December 2018, issued following tax proceedings conducted against the Company with regard to the audit of corporate income tax for 2012.

As a result of such assessment, following the precautionary principle, the Management Board of the Issuer decided to create in the separate financial statements of CIECH SA a provision for income tax in the amount of PLN 43.7 million, and a provision for late payment interest, which as at the balance sheet date, i.e. 31 December 2018, amounted to PLN 23.5 million. The aforementioned provisions will also be recognised in the consolidated financial statements of the CIECH Group for 2018.

The created provisions will have an impact on the financial results of the Issuer and its Group.

At the same time, the Management Board would like to emphasise that the Company and its advisors do not agree with the approach expressed in the decision of the Authority. Accordingly, the Company has already taken procedural steps in order to defend the tax consequences of its operations in 2012, and on 10 January 2019, filed an appeal against the decision of the Authority.

Legal basis:
article 17.1 of the Regulation of the European Parliament and of the Council (EU) No. 596/2014 of 16 April 2014 on Market Abuse (the Market Abuse Regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (Official Journal of the European Union L No. 173, p. 1) (the “MAR”).

Signatures of the Company’s representatives:

Dawid Jakubowicz – President of the Management Board 

Mirosław Skowron – Member of the Management Board

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