Body of the report:

The Management Board of Jastrzębska Spółka Węglowa S.A. (“JSW”, “Company”) hereby reports that, pursuant to the provisions of the Act of 12 October 2017 on the Compensation Benefit Payable Due to the Loss of the Right to Free Coal, as at 19 December 2017 JSW has disbursed compensations to 34.9 thousand persons.

Accordingly, JSW intends to reverse a portion of the provision for potential litigations related to the payment of free coal allowance to JSW’s old-age and disability pensioners established by the Company in 2015, of which fact the Company informed the public in Current Report No. 48/2015. Out of the current provision of PLN 1.9 billion, approx. PLN 1.3 billion is intended to be reversed. The final amount of the reversed provision will be known after its estimation by an actuary and after the completion of an analysis of the risk of potential claims from current and former employees not covered by the operation of the said Act.

The reversal of the provision will have a favorable impact on JSW’s operating result in Q4 2017 but will not trigger any cash inflows to the Company’s bank account. The eventual change in the balance of the provisions referred to above will be presented in the Company’s annual report for 2017.

Legal basis: Article 17 Section 1 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on Market Abuse 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.