Current Report No.: 38/2019

Date of preparation: 09.09.2019

Abbreviated name of the Issuer: CIECH S.A.

Legal basis: Art. 17. 1 of the MAR – inside information

Subject: Information on the decision of the Director of the Tax Administration Chamber in Bydgoszcz

Contents of the Report:

The Management Board of CIECH S.A. (the “Company” or “Issuer”) herewith informs that on 9 September 2019, the legal representative of subsidiaries of the Issuer - CIECH Soda Polska S.A., CIECH Cargo sp. z o.o., CIECH Pianki sp. z o.o. (hereinafter jointly the “Subsidiaries”) – received the decisions of the Director of the Tax Administration Chamber in Bydgoszcz (the “2^nd Instance Authority”) dated 27 August 2019. Following the appeals lodged by the Subsidiaries, the authority upheld three decisions of the Head of the Kujawsko-Pomorskie Tax Office in Bydgoszcz (the “1^st Instance Authority”) dated 23 May 2019, according to which the total amount of the tax arrears of the Subsidiaries due to corporate income tax for 2015 is PLN 8.2 million (the “Tax”). As at the date of publication of this report, the total amount of default interest is approx. PLN 2.3 million (the “Interest”). 

The Company informed about the decision of the 1^st Instance Authority in its Current Report No. 22/2019 of 6 June 2019. In consideration of the Tax and Interest accrued until 31 December 2018, the Company created relevant provisions in the consolidated financial statements of the CIECH Group, as notified by the Company in its Current Report No. 24/2019 of 27 June 2019. 

The Subsidiaries and their advisers disagree with the approach expressed in the decisions of the 2^nd Instance Authority. The Subsidiaries intend to take further procedural measures in order to defend the tax consequences of their 2015 operations and lodge a complaint with the competent Regional Administrative Court.

The decisions of the 2^nd Instance Authority are enforceable. Accordingly, the Subsidiaries are required to pay both the Tax and the Interest. 

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).

Signatures of the persons representing the Company: