Current Report No.: 22/2022

Date of preparation: 01.06.2022

Abbreviated name of the Issuer: CIECH S.A.

Subject: Information on the decision of the Head of the Lubusz Province Tax Office in Gorzów Wielkopolski, Branch Office in Zielona Góra.

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

Text of the report:

The Management Board of CIECH S.A. (the “Company” or “Issuer”) herewith informs that on 1 June 2022, the attorney of a subsidiary of the Issuer - CIECH Vitrosilicon S.A. (the “Subsidiary”) received the decision of the Head of the Lubusz Province Tax Office in Gorzów Wielkopolski Branch Office in Zielona Góra of 31 May 2022 (the “Decision” and the “Authority” respectively) issued as a result of tax proceedings against the Subsidiary in the scope of auditing corporate income tax settlements for 2015.

In the Decision, the Authority challenged the right to settle the tax loss on participation in a partnership, an indirect subsidiary of the Issuer (the “Partnership”) and the right to charge the fee for the trademark. While taking the activities challenged by the Authority, the Subsidiary used the services of professional advisers.

The Subsidiary and its advisers do not agree with this approach. The Subsidiary intends to take procedural steps to defend the tax consequences of its 2015 operations.

The Decision for the amount of the tax liability of PLN 2,7 million is neither final nor enforceable. Nevertheless, the Subsidiary will consider the legitimacy of the payment of the amount specified in the Decision, and additionally late payment interest, which, as at the date of publication of this report, amount to approximately PLN 1,4 million, a total of approximately PLN 4,1 million (the “Tax Liability”), although it does not agree with the Decision. 

As far as the right to settle the loss for a share in the Partnership, tax disputes are also pending in the Subsidiary for 2016 and in other subsidiaries of the Issuer, as advised by the Issuer in its current reports numbers: 22/2019 of 6.06.2019, 38/2019 of 9.09.2019, 49/2019 of 11.12.2019, 12/2020 of 13.03.2020 and 37/2021 of 2.12.2021, and the information on recognising a provision (the “Provision”) and the write-down on the asset in connection with this matter was provided by the Issuer in its current report number 4/2019 of 27.06.2019. The Issuer informs that the entire amount of the Tax Liability was covered by the Provision.

The description of the audit in the scope of the right to settle the loss due to the participation of five subsidiaries in the Partnership was presented in point 3.12 of the consolidated report of the CIECH Group for the first quarter of 2022 and was presented in periodic reports published by the Company in previous reporting periods. 

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 Company’s representatives:

Mirosław Skowron – Member of the Management Board

Kamil Majczak – Member of the Management Board