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30 June 2005

Netia's announcement with regard to the corporate governance rules adopted by the Warsaw Stock Exchange

WARSAW, Poland - June 30, 2005 - Netia SA ("Netia") (WSE: NET), Poland's largest alternative provider of fixed-line telecommunications services, today announced its position regarding the corporate governance rules adopted by the Supervisory and Management Boards of the Warsaw Stock Exchange ("WSE") in the form of "Best Practices in Public Companies in 2005". The below announcement is the same as the announcement published by the Company on March 2, 2004.

Announcement regarding the corporate governance

Netia's management board fully accepts and shares the ideas on which the WSE's Best Corporate Practices are based. In the management board's opinion, the general concepts and objectives presented therein are worthy of full approval and support, both ethically and in the interest of good commercial practices. Netia's management board acts in the spirit of those ideas, which are important factors in all of Netia's corporate decisions. The management board also appreciates the long-term effort of WSE's Committee and the Best Practices Board to implement the best practices in corporate governance and believes that their hard work will foster positive attitudes in the operations of both companies and investors.

However, in the Netia management board's opinion, codifying those ideas in the terms of the Best Corporate Practices results in a shift from rules that previously functioned as ethical principles to those that assume the form of quasi-legal standards: a written collection of instructions and prohibitions relating to specific actions by corporate governing bodies. The now institutional character of relevant ideas connected with the duty to publicly inform of acceptance or breach, if any, thereof, imposes the duty of exercising the highest diligence in taking decisions as to their implementation in the form of the company's formal operating rules.

Netia's management board believes that it is difficult to make simple "yes" or "no" declarations with regards to its intention to comply with certain principles contained in the Best Corporate Practices. No alternative way of presenting the company's position with respect to specific rules has been allowed.

The generality of the proposed Best Corporate Practices (fully understandable in case of ethical principles, but difficult to accept in case of norms imposing specific duties or forming specific prohibitions) allows for numerous interpretations with regards to specific factual circumstances. Such generality may result in ambiguities whether specific actions or omissions on the part of the company's governing bodies are a violation of a specific practices or not and, consequently, if there is an obligation to inform of a violation of a previously adopted practice.

It should be noted further that apart from the management board and its members, also other company's bodies and members thereof (e.g. the supervisory board and members thereof) as well as third parties with no formal relations with the company (e.g. chairman of a general meeting) are the addressees of the majority of the Best Corporate Practices. By accepting those practices the management board would consciously assume an obligation the compliance with which is beyond its control. Furthermore, without having information on breaches of those practices (as they apply to actions of the company's other governing bodies or individual members thereof), if any, the management board could not comply with its obligation to advise the public of any such breaches.

Consequently, although Netia's management board fully accepts the idea and the objectives of the Best Corporate Practices, and follows the spirit thereof in its daily operations, it cannot implement, as discussed above, some of those practices in the form of institutionalised rules of the company's operations.

Netia's detailed position regarding corporate governance rules, accepted by Netia's Supervisory Board, is presented in the attachment (, 109kB).