Annual Report for the year ended December 31, 2015 Play Holdings 2 S.à r.l. February 1 , 2016 TABLE OF CONTENTS INTRODUCTION ....................................................................................................................................................... iii INDUSTRY, MARKET AND SUBSCRIBER DATA ........................................................................................................... iv DEFINITIONS........................................................................................................................................................... ix PRESENTATION OF FINANCIAL INFORMATION ....................................................................................................... xiii FORWARD-LOOKING STATEMENTS ......................................................................................................................... xv RECENT DEVELOPMENTS ........................................................................................................................................ 1 CONSOLIDATED FINANCIAL AND OTHER INFORMATION ........................................................................................... 2 RISK FACTORS ...................................................................................................................................................... 11 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS OF DECEMBER 31, 2015 ................................................................................................................................ 44 BUSINESS ............................................................................................................................................................. 85 MANAGEMENT .................................................................................................................................................... 111 PRINCIPAL SHAREHOLDERS ................................................................................................................................. 117 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS ......................................................................... 119 DESCRIPTION OF CERTAIN FINANCING ARRANGEMENTS ...................................................................................... 120 ANNEX A BRIEF DESCRIPTION OF THE MATERIAL DIFFERENCES IN THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS BETWEEN THE PIK NOTES ISSUER AND THE PARENT ............................................................. 1 ANNEX B GLOSSARY OF TECHNICAL TERMS ............................................................................................................ 1 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS ............................................................................................... 1 ii INTRODUCTION Play Holdings 2 S.à r.l. This is the Report of Play Holdings 2 S.à r.l. (the “ Parent ”), 5, rue Guillaume Kroll, L -1882 Luxembourg, Grand Duchy of Lu xembourg, the parent company of P4 Sp. z o.o. (“ Play ”, „ P4 ” or the “ Company ”). The Parent is a guarantor of the following notes: 1 (a) €725,000,000 5 /4% Fixed Rate Senior Secured Notes due 2019 and PLN 130,000,000 Floating Rate Senior Secured Notes due 201 9 issued by Play Finance 2 S.A. (the “ Senior Secured Notes ”); and 1 (b) €270,000,000 6 /2% Senior Notes due 2019 issued by Play Finance 1 S.A. (the “ Senior Notes ”). The following Report is a report as required by Section 4.03 of the indenture that governs the Senior Secured Notes and Section 4.03 of the indenture that governs the Senior Notes. Play Topco S.A. The Parent is a wholly owned subsidiary of Play Topco S.A. (“ PIK Notes Issuer ”), 5, rue Guillaume Kroll, L -1882 Luxembourg, 3 1 Grand Duchy of Luxembourg, issuer of €415,000,000 7 /4% / 8 /2% Senior PIK Toggle Notes due 2020 (the “ Senior PIK Toggle Notes ”). The Parent is not a guarantor of the Senior PIK Toggle Notes. The following Report is a report as required by Section 4.03 of the indenture that governs the Senior PIK Toggle Notes. A brief description of the material differences in the financial condition and results of operations between the PIK Notes Issuer and the Parent and a statement of the PIK Notes Issuer ’s total debt, EBITDA and cash interest expense on a consolidated basis, as required by Section 4.03(a)(2)(e) of the indenture that governs the Senior PIK Toggle Notes is included in Annex A to this report. iii INDUSTRY, MARKET AND SUBSCRIBER DATA This Report includes market share and industry data that we obtained from various third-party sources, including reports publicly made available by other mobile network operators, discussions with subscribers as well as data based on our internal estimates. The third-party providers of market and industry data relating to our business include inter alia: • The Statistical Office of the European Communities (“ Eurostat ”); unless otherwise indicated, historical GDP, historical real GDP growth rate and harmonized unemployment and inflation rate refer to data retrieved from Eurostat website. Real GDP growth rate forecast refers to the Autumn 2015 European Economic Forecast , published on November 5, 2015; • The Central Statistical Office of Poland (the “ CSO ”), Poland’s chief government executive agency charged w ith collecting and publishing statistics related to Poland’s economy, population and society, at both national and local levels; • The Polish Office of Electronic Communications (the “ UKE ”), the Poli sh regulatory authority for the telecommunications and postal services markets focusing on, among other things, stimulating competition, consumer protection, developing new offerings and technologies, reducing prices and increasing availability of services in Poland; • The National Bank of Poland (the “ NBP ”), th e central bank of Poland; • The European Commission (the “ EC ”), the EU’s executive body, which publishes the Digital Agenda Scoreboard; unless otherwise indicated, the EC’s data should be read as references to the EC’s thematic portal, European Commission Information Society, and; • SMARTSCOPE S.C. (“ Smartscope ”), the company , which provides with marketing research, customer satisfaction research, organisational culture and employee satisfaction research and research projects for cultural and public institutions. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable. We believe that these industry publications, surveys and forecasts are reliable, but we have not independently verified them, or make any representation or warranty as to or their accuracy or completeness. To the extent these industry publications, surveys and forecasts are accurate and complete, we believe we have correctly extracted and reproduced the information from such sources. Additionally, industry publications and such reports generally state that the information contained therein has been obtained from sources believed to be reliable but that the accuracy and completeness of such information is not guaranteed and in some instances state that they do not assume liability for such information. We cannot therefore assure you of the accuracy and completeness of such information and we have not independently verified such information. In addition, in many cases, statements in this Report regarding our industry and our position in the industry are based on our experience, discussions with subscribers and our own investigation of market conditions, including, with respect to mobile market revenue, number of reported subscribers, number of net additions, churn, mobile data usage per subscriber, percentage of market share, contract/prepaid subscriber mix, offerings, number of retail outlets, numbers ported-in, EBITDA margins and ARPU, the review of information made publicly available by other mobile network operators. Comparisons between our reported financial or operational information and that of other mobile network operators (“ MNOs ”) using this information may not fully reflect the actual market share or position in the market, as such information may not be defined consistently or reported for all mobile network operators as we define or report such information in this Report. While we are not aware of any misstatements regarding the industry data presented herein, our estimates involve certain assumptions, risks and uncertainties and are subject to change based on various factors, including those discussed under the heading “Risk Factors” in the Offering Memorandum of the Initial Notes dated January 24, 2014 and Additional Notes dated March 12, 2015 and updated due to the best knowledge as at the day of this Report. We cannot assure you that any of these statements are accurate or correctly reflect our position in the industry, and none of our internal surveys or information has been verified by any independent sources, and we cannot guarantee their accuracy. iv Key Performance Indicators The subscriber data included in this Report, including ARPU, ARPU outbound, unit SAC, unit SRC, reported subscribers (including contract subscribers and prepaid subscribers), net additions (including contract net additions and prepaid net additions), churn (including contract churn and prepaid churn) and data traffic (collectively, key performance indicators (“ KPIs ”)) are derived from management estimates, are not part of our financial statements or financial accounting records and have