ANNUAL REPORT OF CYFROWY POLSAT S.A. FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2012

Place and date of publication : Warsaw, March 12, 2013

Content of the annual report:

Letter of the President of the Management Board

Management Board’s report on the activities of Cyfrowy Polsat S.A. in the financial year ended December 31, 2012

Management Board’s representations

Opinion of the independent auditor

Financial Statements for the year ended December 31, 2012

Interim Condensed Financial Statements for the 3 and 12 months ended December 31, 2012 (unaudited)

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Ladies and Gentlemen, It is my great pleasure to present to you the 2012 Annual Report of the Cyfrowy Polsat. This past year, we pursued both organic growth and strategic acquisitions, while progressing a number of projects that helped us consistently implement Group growth strategy. We focused our entire effort on solidifying our leading position in multimedia entertainment in Poland and in the market for pay television and television broadcasting, as well as on persistently expanding our capabilities in telecommunications and online services. That we turned yet another year of our operations into a success was confirmed by the Group's operating and financial results. Subscriptions to pay television rose to 3.57 million, with the number of broadband internet and mobile telephony users increasing to 150 and 145 thousand, respectively. We are also very satisfied with the Company's financial performance. In 2012, our total revenue grew by 9.3%, to PLN x billion, with net profit standing at PLN 530 million. To ensure an increasingly high level of customer satisfaction, we regularly expanded our pay TV services to include new channels and products. Effectively bundling our products and services we give our subscribers even more value for money. We provided viewers with access to pay-per-view sporting events, contributing to the increased popularity of the service on the domestic market. Building on the success of our VOD Home Video Rental and catch-up TV services, our Online Entertainment zone was significantly expanded to offer viewers a one-stop-shop for programme re-runs, online channels, and ipla, HBO GO and FilmBox live services. We launched a cross-promotion programme with the Plus mobile network, as part of which we cross-sell services to multiply benefits for subscribers of both operators. In 2012, we also achieved expected synergies in the areas of technology, marketing, products and back-office between Cyfrowy Polsat and Telewizja Polsat. It was also the year that our new TV Mobilna, PPV, VOD, Multiroom HD and ipla services gained in importance. In the past year, Cyfrowy Polsat also managed to considerably bolster its presence in the market for online services. We acquired a 100% interest in the companies that run ipla, Poland's leading online video service. Ipla provides linear access to tens of TV channels, HD live broadcasts, and the largest TV-on-demand library in Poland, containing thousands of TV series episodes, programmes and major sporting events. Ipla television services are brought to users of PCs, smartphones, tablets, Smart TV-supporting television sets, pay TV, set-top boxes and consoles, via dedicated applications. According to the latest research, ipla has an average of 2.3 million active users. Another advance towards growth in the online segment was the launch of muzo, a digital music streaming service. Soon, muzo library will comprise five million audio tracks appealing to the music tastes of nearly 90% of Poland's population. The current muzo offering features the most popular tracks across all music genres, which have been licensed from EMI, Magic Records, SONY Music, Universal Music, and other music publishers. To ensure that our services can be delivered through any new technology and device, we launched the DVB-T-based TV Mobilna. We paved the way for its launch a year earlier when we acquired INFO-TV-FM, a company allocated frequencies that are appropriate to support