The Management Board of Mostostal Warszawa S.A. ("Company") has analysed the possibility of enforcing the receivables from construction works performed for Gamma Inwestycje S.A. (formerly: Gamma Inwestycje Sp. z o.o., and earlier Zielona Italia Sp. z o.o.) and assets from the execution of the construction contract for this employer. Significant risks associated with inability to fulfil these economic benefits were identified and the Management Board on 27 March 2020 decided to make an adjustment to the financial statements consisting of recognizing an impairment loss of PLN 40 million against the results of previous years, after taking into account the impact of deferred tax assets.

The above adjustment will decrease the Company's equity by PLN 40 million by adjusting the balance sheet item Retained earnings/(Uncovered losses). It will not affect the financial result for 2019.

At the same time, the Company maintains its position as to the legitimacy of the receivables in question and claims related to the execution of the construction contract. The Management Board will continue to pursue all legal actions to recover them.

The Company reserves the right that the above amount is an estimated and may change during the audit of the financial statements by a certified auditor. The final amount of the write-down will be presented in the annual financial statements of the Company.