Current report no. 12/2018

Dissolving of the provisions related to the employee benefits(entitlements) by TAURON Wytwarzanie S.A.

Management Board of TAURON Polska Energia S.A. ("Issuer") informs thaton April 6, 2018, the Management Board of TAURON Wytwarzanie S.A.("TAURON Wytwarzanie", the Issuer's subsidiary) passed a resolutionbased on which it dissolved a provision in the amount of PLN 168 mln,related to the cash equivalent for the subsidized consumption ofelectricity by retirees, pensioners and other eligible persons that arenot employees (a positive impact on the Generation segment's EBIT in Q12018).

The resolution was passed based on the agreement reached between theManagement Board of TAURON Wytwarzanie with the workforce (social party)and an additional protocol to the Corporate Collective BargainingAgreement (Zakładowy Układ Zbiorowy Pracy) of TAURON Wytwarzanieregistered by the Chief Labor Inspectorate (Państwowa Inspekcja Pracy).

In addition, the Issuer informs that TAURON Wytwarzanie concludedagreements with the workforce to amend labor contracts, under whichservice anniversary awards will not be paid out. In connection with theabove TAURON Wytwarzanie paid out applicable damages to the personneland dissolved the provision, which, as a result, will increase theGeneration segment's EBIT by PLN 43 mln in Q1 2018.

Furthermore, TAURON Wytwarzanie dissolved a provision related to theCompany's Social Benefits (Entitlements) Fund (Zakładowy FunduszŚwiadczeń Socjalnych) for former employees in the amount of PLN 18 mln(a positive impact on the Generation segment's EBIT in Q1 2018).

The above presented impact of one-off events on TAURON Group's earningsis an estimate and may change.