Management Board’s opinion on planned merger of PGE Polska Grupa Energetyczna S.A. with PGE Electra S.A.

The Management Board of PGE Polska Grupa Energetyczna S.A. with the registered office in Warsaw (“PGE”, "Company"), acting pursuant to § 19 section 3 of the Regulation of the Minister of Finance of 19 February 2009 on current and periodical information to be released by issuers of securities and the conditions for recognizing as equivalent information required under the laws of a country which is not a Member State (Journal of Laws of 2009, no. 33, item 259, as amended), hereby submits its opinion on planned merger.The Management Board of PGE positively assesses planned merger of PGE with PGE Electra S.A., and indicates that this process is a consequence of the implementation of the Consolidation Program of PGE Capital Group approved by the Management Board of PGE in resolution no. 215/33/2009 dated May 29, 2009 with further amendments (“Consolidation Program”).During the course of work on the reorganisation of the Group a “Business Model of the PGE Capital Group” was approved by the resolution of the Management Board of PGE no. 309/40/2010 dated June 28, 2010. According to the model, besides conducting activities related to the management of the Capital Group (a corporate centre), PGE will also conduct operating activities in the area of wholesale trade. Thus PGE will be fulfilling the function of a strategic business unit responsible for the maximisation of the Group's profit.So far the Group's activities related to wholesale trade have been centralised within PGE Electra S.A., which, according to the previous practices of operation, has been the only contact point between the Group and the wholesale market for electricity and related products. The implementation of the new role of PGE in the area of wholesale electricity trade may be achieved by the Company's merger with PGE Electra S.A.It is assumed that the competencies of PGE Electra S.A. will be used in the development of the wholesale trade area within PGE.For this purpose, the process of a merger between PGE and PGE Electra S.A. has been initiated. The merger of the companies will be carried out under article 492 § 1 item 1 of the Commercial Companies Code (CCC) of September 15, 2000, article 515 § 1 of CCC and article 516 § 6 of CCC, i.e. by way of transferring all assets of the Company Being Acquired, i.e. PGE Electra S.A., to the Acquiring Company, i.e. PGE Polska Grupa Energetyczna S.A., without any increase in the share capital of the Acquiring Company and without any issue of new shares in the Acquiring Company in return for shares in the Company Being Acquired. PGE Electra S.A. is a company wholly owned by PGE, therefore – pursuant to article 516 § 6 of CCC - there is a possibility of using the so-called simplified merging procedure specified in article 516 of CCC.The Merger Plan contains all information required under article 499 § 1 items 1), 5) and 6) of CCC. In view of the fact that PGE holds 100% of shares in PGE Electra S.A. and the merger is to be conducted under the simplified procedure, the Merger Plan does not include information referred to in article 499 § 1 items 2-4 of CCC (i.e. a conversion parity, principles concerning the granting of merging shares to the shareholders of the Company Being Acquired or a day as of which merging shares authorise their holders to participate in the profit of the Acquiring Company).Besides, pursuant to article 516 § 6 of CCC in connection with article 516 § 5 of CCC, in the event of an acquiring company obtaining its wholly owned subsidiary, the application of articles 501-503 of CCC is excluded. In view of the above, the Management Board did not prepare a merger justification report referred to in article 501 of CCC and the Merger Plan was not audited by a certified auditor; consequently, an opinion referred to in article 503 of CCC was not prepared.At the same time, the Management Board once more informs that the Merger Plan of PGE with PGE Electra S.A. was announced in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy) issue no. 216/2010 (3574) of November 5, 2010 under item 13443, as well as published in the Company's current report no. 67/2010 of October 21, 2010.Legal ground: § 19 section 3 of the Regulation of the Minister of Finance dated February 19, 2009 on current and periodic information published by issuers of securities and on conditions under which such information may be recognized as being equivalent to information required by the regulations of law of a state which is not a member state (Journal of Laws of 2009, No. 33, item 259, as amended).