Letter from the Chairman of the Audit Committee

Dear Shareholders,

I am pleased to attach my report on the activities of the Audit Committee over the past 12 months.

In recent years there have been important changes to the legal environment in Poland relating to auditing standards and regulations including Regulation No. 537/2014 of the European Parliament and of the Council of 16 April 2014 and the new Polish Act on Auditors of 11 May 2017, which have influenced the Orange Polska Audit Committee in terms of its activities and composition. Thus in 2018 the Audit Committee was composed of five members, of whom three are independent members.

A significant part of the work of the Audit Committee in 2018 related to the implementation of International Financial Reporting Standard 16 (Leases). The standard allows for different approaches to its implementation and it is clear that at least in the first years of the application of the standard the market practice will differ somewhat across industries and jurisdictions. The Audit Committee thoroughly reviewed the manner of implementation proposed by Management and discussed with the Management as well as with the auditor the choices which were made and reasons behind them. The Audit Committee is satisfied that the Company has implemented the standard in an appropriate way. Also the Audit Committee monitored the consequences of adoption the IFRS 9 (financial instruments) and IFRS 15 (Revenue from contracts with customers).

One of the main responsibilities of the Audit Committee is to ensure proper financial reporting by the Company and Group. As part of this, we review all significant accounting judgements and estimates proposed by Management. In addition to IFRS 16 mentioned above, the most significant areas of judgement were those regarding presentation of financial figures and disclosures related to two important transactions that the Company entered into i.e. the second contest of the Digital Poland Operational Programme and the agreement on telecommunications access to the Orange Polska’s fibre network with T-Mobile. The Audit Committee also reviewed the impairment analysis results.

The Audit Committee has also been involved in reviewing internal control and compliance, the risk management processes and the external audit of the company and Group financial statements. In particular, the Committee works to ensure the independence of both the external auditor and internal audit team, and had private meetings with the external auditor and the head of the company’s internal audit team to give them an opportunity to discuss any issues which may have arisen in their work with Management. Last, but not least, the independent members of the Audit Committee reviewed and, when necessary, challenged the terms of significant transactions with related parties including, in particular, the majority shareholder, Orange S.A.

A more detailed summary of the activities of the Audit Committee is presented in the Audit Committee’s agenda for 2018.