BSC Drukarnia Opakowań S.A. Capital Group

Transcription

1 BSC Drukarnia Opakowań S.A. Capital Group CONSOLIDATED QUARTERLY FINANCIAL STATEMENT FOR III QUARTER OF 2017

2 Contents: The consolidated quarterly report contains the following elements: Page A. Selected consolidated and separate financial data 3 B. Semiannual condensed consolidated financial statement of BSC Drukarnia Opakowań S.A. Capital Group for 9 months of C. Semiannual condensed separate financial statement of BSC Drukarnia Opakowań S.A. for 9 months of D. The Board s report on the activity of BSC Drukarnia Opakowań S.A. Capital Group for 9 months of Janusz Schwark Arkadiusz Czysz Andrzej Baranowski President of the Board Vice-president of the Board Vice-president of the Board Poznań,

3 A. SELECTED FINANCIAL DATA 1. Selected consolidated financial data. PLN EUR SELECTED FINANCIAL DATA data from to data from to data from to data from to Net revenues from sales Profit (loss) from sales Profit (loss) from operating activity Profit (loss) before taxation Net profit (loss) Net profit (loss) attributable to shareholders Net cash flow from operating activity Net cash flow from investment activity Net cash flow from financial activity Total net cash flow Total assets/ liabilities Non-current assets Current assets Equity attributable to shareholders Total liabilities Long-term liabilities Short-term liabilities Number of shares (in thousands) Profit (loss) per one ordinary share (in PLN/ EUR) Book value per one share (in PLN/ EUR) Applied for the conversion of EUR exchange rate Average exchange rate of the period Exchange rate of the last day of the reporting period

4 Changes in significant items of the comprehensive income statement and financial standing statement Selected consolidated financial data III Q 2017 III Q 2016 Change in thousands PLN Dynamics Revenue from sales of products, services, commodities % and materials EBITDA % Profit from operating activity (EBIT) % Profit before taxation % Net profit % Long-term liabilities % Short-term liabilities % Equity attributable to shareholders of the parent entity % Share capital % Number of shares % Profit per 1 ordinary share % In III quarter of 2017 compared to III quarter of 2016 the Group s sales decreased by approximately 9%, mainly because of the already limited sales to the customer Mondelez, resulting from losing the tender in 2016, which the Issuer informed about in their current report no 19/2016 dated The Group s results decreased similarly by 7-9%, which with the decrease in sales and at the same time the increase in prices of carton and labour costs and with the increase in production capacities in the year 2017 is the effect of improvement of customers structure (greater participation of sales to better margin customers). The Group s liabilities decreased by over PLN 2 million mainly as a result of repayment of credit instalments. Financial ratios Margins III Q 2017 III Q 2016 Change in percentage point Operating margin 14.85% 14.74% 0.10% EBITDA margin 20.82% 20.34% 0.48% Gross profit margin 15.13% 14.76% 0.37% Net profit margin 12.31% 12.34% -0.02% 4

5 In III quarter of 2017 compared to the year 2016 the Group margins slightly improved on each level. Ratios III Q 2017 III Q 2016 Dynamics Liquidity ratio I % Liquidity ratio II % Debt ratio 15.91% 17.65% -9.8% Net working capital (thousands PLN) % The Group still maintains very high liquidity ratios. 2. Selected separate financial data 5

6 PLN EUR SELECTED FINANACIAL DATA data from to data from to data from to data from to Net revenues from sales Profit (loss) from sales Profit (loss) from operating activity Profit (loss) before taxation Net profit (loss) Net profit (loss) attributable to shareholders Net cash flow from operating activity Net cash flow from investment activity Net cash flow from financial activity Total net cash flow Total assets/ liabilities Non-current assets Current assets Equity attributable to shareholders Total liabilities Long-term liabilities Short-term liabilities Number of shares (in thousands) Profit (loss) per one ordinary share (in PLN/ EUR) Book value per one share (in PLN/ EUR) Applied for the conversion of EUR exchange rate Average exchange rate of the period Exchange rate of the last day of the reporting period

7 B. CONDENSED CONSOLIDATED SEMI-ANNUAL FINANCIAL STATEMENT OF BSC DRUKARNIA OPAKOWAŃ S.A. CAPITAL GROUP FOR III QUARTER OF 2017 CONDENSED CONSOLIDATED SEMI-ANNUAL FINANCIAL STATEMENT OF COMPREHENSIVE INCOME III quarter of III quarters III quarter of III quarters of 2017 of Notes (from to (from to (from to (from to ) ) ) ) Continued activity Revenues from sales Including sales of goods Other operating revenues Total operating revenues Change in the balance of products Consumption of materials Payroll and benefits External services Depreciation Other expenses Value of goods and materials sold Total operating expenses Profit (loss) from operating activity Financial revenues Financial costs Profit (loss) before taxation Income tax Net profit (loss) from continued activity Discontinued activity Net loss from discontinued activity Net profit (loss) Attributable to: Shareholders of the parent entity Non-controlling shares

8 Other comprehensive (net) income Total comprehensive income Attributable to: Shareholders of the parent entity Non-controlling shares CONDENSED CONSOLIDATED SEMI-ANNUAL STATEMENT OF FINANCIAL STANDING Non-current assets Notes Tangible non-current assets 11 Intangible assets Deferred tax assets Other assets Total non-current assets Current assets Inventory 12 Trade receivables 13 Income tax receivables Other receivables Financial assets Monetary assets Other assets Total current assets Assets classified as held for sale Total assets CONDENSED CONSOLIDATED SEMI-ANNUAL STATEMENT OF FINANCIAL STANDING Notes Equity 8

9 Share capital Supplementary capital Effect of increasing involvement in subsidiary entity Retained profits Capital attributable to shareholders of the parent entity Capital attributable to noncontrolling shares Total equity Long-term liabilities Credits and loans Other financial liabilities Provision for deferred income tax Provision for retirement Other provisions Other liabilities - - Future revenues - subsidies Total long-term liabilities Short-term liabilities Credits and loans Other financial liabilities 210 Trade liabilities Income tax liabilities Other liabilities Other provisions Future revenues - subsidies Total short-term liabilities Liabilities directly connected with non-current assets held for sale Total payables Total liabilities

10 CONDENSED CONSOLIDATED SEMI-ANNUAL STATEMENT OF CASH FLOWS Net cash from operating activity III quarters of 2017 (from to ) III quarters of 2016 (from to ) Gross profit Depreciation Interest Currency conversion differences Result of investment activity Trade and other receivables change in the balance Inventory- change in the balance Other assets - change in the balance 7-50 Trade and other liabilities - change in the balance Provisions - change in the balance Other accruals change in the balance Income tax - paid Net cash flows from operating activity Cash flows from investment activity Interest Inflows from sales of investments Inflows from sales of non-current and intangible assets Outflows for purchase of non-current assets and intangible assets Loans granted -2-6 Outflows for purchase of shares Net cash from investment activity Cash flows from financial activity Dividend paid and other payments to shareholders Net inflows from issuance of shares - - Repayment of bank credits and loans Payment of liabilities from financial leases Raising bank credits

11 Outflows for the purchase of securities Interest Net cash from financial activity Increase /(decrease) in net cash and cash equivalents Opening cash balance and cash equivalents Change in cash balance from conversion differences Closing cash balance and cash equivalents CONDENSED CONSOLIDATED SEMI-ANNUAL STATEMENT OF CHANGES IN EQUITY Share capital Opening balance Increase in capital - Closing balance Supplementary capital Opening balance Distribution of retained profit Issuance of shares - - Closing balance Effect of increasing involvement in subsidiary entity Opening balance Increasing involvement in subsidiary entity Closing balance Retained profit Opening balance Payment of dividend

12 Supplementary capital Adjustments Net financial result Change in the structure of non controlling share Closing balance Capital attributable to non-controlling shares Opening balance Change in the structure of non-controlling share Result attributable to non-controlling shares Closing balance Total equity Opening balance Closing balance

13 SELECTED COMMENTARY 1. Basic information on the parent company BSC Drukarnia Opakowań Spółka Akcyjna ( the company, the parent entity, the parent company, the issuer ) runs their business activity as a joint-stock company set up by the notarial deed on 1 July1999 before the notary Piotr Kowanda (Rep. No: A 8000/1999) in Poznań. The registered office of the parent company is Poznań, ulica Żmigrodzka 37. The company is registered in Poland and at present entered in the register of entrepreneurs, run by the District Court in Poznań at the number KRS The parent company was given the CRO Certificate (REGON) number: and received the Tax Identification Number (NIP) The basic fields of the parent entity s business activity are: Printing activity, Supporting graphic activity, Activity related to packing. In the period from to the personnel of the parent entity s Board was as follows: Janusz Schwark - President of the Board, Andrzej Baranowski - Financial Vice-President of the Board, Arkadiusz Czysz - Commercial Vice-President of the Board. In the analyzed period there were no changes in the personnel of the parent entity s Board. In the reporting period the personnel of the parent entity s Supervisory Board was as follows: Hans Christian Bestehorn, Stephan Bestehorn, Andrzej Borowiński, Michael Mehring, Marek Dietl (to 10 January 2017), Frank Ohle (since 10 January 2017), Krzysztof Kaczmarczyk (since 10 January 2017). In the analyzed period some changes were made in the personnel of the parent entity s Supervisory Board. On 10 January 2017 the Extraordinary General Meeting made the following changes in the personnel of the Supervisory Board: As of 10 January 2017 Marek Dietl was dismissed, As of 10 January 2017 Frank Ohle was appointed, As of 10 January 2017 Krzysztof Kaczmarczyk was appointed. Moreover, on 20 October 2017 the General Meeting appointed Jarosław Wesołek as another member of the Supervisory Board. As at the date of drawing up the consolidated financial statement, the structure of the parent entity s shareholding was as follows: 13

14 Number of shares Total nominal value of shares Participation in share capital Number of votes Colorpack GmbH % ALTUS TFI S.A % JS Holding Sp. z o.o % Green Place S.A % PKO BP Bankowy Otwarty Fundusz Emerytalny % Aviva Investors Poland TFI S.A % OTHERS % Total % Information on the Capital Group BSC Drukarnia Opakowań S.A. the Capital Group ( the Group ) consists of the parent company BSC Drukarnia Opakowań S.A. and the subsidiaries: BSC Pharmacenter sp. z o.o., POSBAU S.A. Budownictwo Uprzemysłowione and POSBAU Nieruchomości sp. z o.o. In May 2015, on the basis of concluded agreements, the parent company took control over companies POSBAU S.A. and POSBAU Nieruchomości sp. z o.o. Basic information concerning subsidiaries 30 September 2017: Company name Office Object of business activity Participation in share capital BSC Pharmacenter sp. z o.o. Poznań Printing % POSBAU S.A. Budownictwo Uprzemysłowione Poznań Lease/construction 93.29% POSBAU Nieruchomości sp. z o.o. Poznań Lease 93.29% Consolidatio n method Full consolidation Full consolidation Full consolidation The financial statements of the subsidiaries were drawn up for the same reporting period as the financial statement of the parent company, applying consistent accounting principle. The annual statements of comprehensive income and the cash flows statement of the companies POSBAU S.A. Budownictwo Uprzemysłowione and POSBAU Nieruchomości sp. z o.o. were included in the consolidation starting with the date of acquiring control of these companies. As at the date of publishing the statement, the Parent Entity s participation in the share capital of POSBAU amounts to 93.29% Continuation of business activity This condensed consolidated semi-annual financial statement was drawn up with the assumption of continuing the business activity by the Group in the foreseeable future. As at the date of approving this consolidated financial statement there are no circumstances stated which indicate any threat to the continuation of the Group s business activity. Functional currency and reporting currency This condensed consolidated semi-annual financial statement was drawn up according to the principle of historical cost. This condensed consolidated semi-annual financial statement was drawn up in the Polish zloty (PLN). The Polish zloty is the functional and reporting currency of the Capital Group. The financial data was reported in thousands zlotys, unless it was reported with higher accuracy in certain situations. 14

15 The platform of International Financial Reporting Standards applied 2.1. Declaration of conformity and general principles for drawing up the statement This condensed consolidated semi-annual financial statement is drawn up in accordance with the International Financial Reporting Standards ( IFRS ) and particularly in accordance with the International Accounting Standard no 34 and IFRS interpretations related to them approved by the EU announced in the form of ordinance of the European Committee and in the scope which is not regulated in the Standards in accordance with the requirements of the Accounting Act and executive orders issued on its basis, and also the order of the Minister of Finance dated 19 February 2009 on current and periodic information delivered by issuers of securities and conditions for recognizing information required by the law of a non-member state as equivalent (Journal of Laws of 2009, No.33, item 259, as amended). As at the date of approving this statement for publishing, taking into account the ongoing process of introducing the IFRS standards in the EU and the Group s business activity, as far as the scope of the accounting principles applied by the Group is concerned, there are no differences between the IFRS standards which have come into effect and the IFRS standards approved by the EU. The IFRS standards include standards and interpretations accepted by the International Accounting Standards Board ( IASB ) and the International Financial Reporting Interpretations Committee ( IFRIC ). The lifespan of the parent entity and the entities belonging to the Group is unlimited. 3. Declarations of the Board 3.1. Concerning the reliability of drawing up the consolidated financial statement In accordance with the requirements of the Order, the Board of the Parent Entity declares that to the best of their knowledge this consolidated financial statement and comparable data were drawn up in accordance with the binding accountancy principles and that they truly, accurately and clearly reflect the property and financial standing of the Capital Group and their financial result Adopted accountancy principles and amendments to the International Financial Reporting Standards (IFRS) In this condensed consolidated semi-annual financial statement, the accounting principles applied by the Group and significant judgements and main estimations of uncertainty made by the Board of the parent company were the same as the ones described in the selected commentary in the consolidated financial statement for the year The group intends to apply the amendments to IFRS which were published but not effective until the date of publishing this condensed consolidated semi-annual financial statement, in accordance with their effective date. The estimation of the influence of the new IFRS on the future consolidated financial statement was demonstrated in the separate financial statement for the year Revenue from operating activity 4.2. Territorial structure III quarter of 2017 (from to ) III quarters of 2017 (from to ) III quarter of 2016 (from to ) III quarters of 2016 (from to ) Total net revenues from sales of goods and services outside the country

16 4.3. Revenue from sales according to branches of business III quarter of 2017 (from to ) III quarter of 2017 (from to ) III quarter of 2016 (from to ) III quarter of 2016 (from to ) A. Packaging, printing services and goods Packaging for cosmetics branch Packaging for food branch Packaging for pharmaceutical branch Packaging for other branches Goods B. Other not connected with main business activity Lease Construction services Hotel services Total net revenues from sales of goods and services (A+B) Other operating revenues Profit from disposal of nonfinancial fixed assets III quarter of 2017 (from to ) III quarters of 2017 (from to ) III quarter of 2016 (from to ) III quarters of 2016 (from to ) Subsidies Other operating revenues, including: - sales of scrap and other utility waste - settlement of revenues concerning fixed assets cutting tools lease logistic services compensations and bonuses received other operating revenues Other operating revenues, in total

17 The basic item of other operating revenues are revenues from sales of scrap paper. Besides, the Group receives subsidies to remuneration of the handicapped and subsidies granted for the purchase of fixed assets and settled for the period of their depreciation (amortization. 6. Costs of operating activity 6.2. Other costs III quarter of 2017 (from to ) III quarters of 2017 (from to ) III quarter of 2016 (from to ) III quarters of 2016 (from to ) Amortization Use of materials and energy External services Taxes and fees Remuneration Social insurance and other benefits Other costs by nature Total costs by nature Loss from sales of non-financial fixed assets Revaluation of non-financial assets Other operating costs, including: - involuntary shortage and liquidation - compensations, cash bonuses and other other operating costs Cost of sales of goods Change in product balance Operating expenses, in total Costs of material and energy consumption and labor cost dominate in the structure of the nature expenses of the Group because of the production character of the business run. In the three quarters of 2017 they constituted respectively 62% and 19% of the costs by nature in total. Among the other operating costs there are expenses and losses not connected directly with the Group s operating activity. The category includes most of all involuntary shortage and liquidations. 7. Revenue and financial costs 17

18 III quarter of 2017 (from to ) III quarters of 2017 (from to ) III quarter of 2016 (from to ) III quarters of 2016 (from to ) Financial revenues interest exchange rate differences other Financial costs interest exchange rate differences Net financial revenues (costs) Interests from deposits constituted the most significant financial revenues. Exchange rate differences concerning operating activity adjust revenues from sales and operating expenses. 8. Current income tax and deferred income tax III quarters of 2017 (from do ) III quarters of 2016 (from do ) Current income tax: Current income tax liabilities Adjustments concerning current tax from past years - - Deferred income tax: Tax liability demonstrated in comprehensive income statement The most essential items that the Group generates deferred tax provisions and assets from are: Non-current assets different depreciation rates, Exchange rate differences gains, losses, Provisions for employee benefits, Allowance for uncollectible accounts, Fair value of non-current assets the date of taking over control. Over the period of the semi-annual condensed consolidated financial statement the Group did not generate deferred tax whose effects would be recognized directly in equity. 18

19 9. Profit per one share III quarters of 2017 (from do ) III quarters of 2016 (from do ) Net profit/ net revenue Number of shares Basic profit per share from continued activity from discontinued activity - Diluted net profit Diluted number of shares Diluted profit per share from continued activity from discontinued activity Operational segments Until the year 2014 the Board of the parent entity recognized the following segments: Cardboard packaging (manufacturing cardboard packaging of solid board), Labels and paper leaflets and packaging printing service. After taking over the company POSBAU S.A. and POSBAU Nieruchomości sp. z o o. in the year 2015, the Board as the body responsible for making operational decisions isolated two operational segments in the Group s business activity: cardboard packaging and labels other o construction o hotel services o lease of utility rooms The above presented division is connected with assigning risks for individual types of activity and the possibility to anticipate unfavourable phenomena in individual segments by active management involving resources allocation and monitoring the results of the business activity Report balance items in segments without consolidation adjustments Cardboard packaging and labels Other Fixed assets Tangible assets Intangible assets Long-term investments

20 Other assets - - Deferred income tax assets Current assets Inventory Receivables Financial assets Short-term investments Other assets Unassigned assets - Total assets Equity Share capital Supplementary capital and other reserve capitals Profit from past years - - Net profit Liabilities and provisions for liabilities Long-term liabilities Short-term liabilities Unassigned liabilities - - Total liabilities Report revenues and costs according to segments without consolidation adjustments Cardboard packaging and labels Other segments Construction Hotel services Lease Revenue from sales Costs of operational activity Profit (loss) from sales Other operational revenues

21 Other operational costs Financial revenues Financial costs Gross profit Income tax Net profit (loss) Tangible fixed assets of tangible fixed assets Tangible fixed assets Fixed assets lands buildings and structures technical devices and machines means of transport other fixed assets 503 Fixed assets under construction Ownership structure of tangible fixed assets Own Used on the basis of lease, tenancy agreement, lease agreement Total Assets pledged as collateral Value of collateral of liabilities Printing hall Warehouse building Office building Collateral form Mortgage Mortgage Mortgage

22 Office building/ PWUG POSBAU Mortgage Impairment loss Over the period of the condensed consolidated financial statement there were no indications in the Group to make any allowance for uncollectible accounts on impairment losses of the owned fixed assets. 12. Inventory of inventory Materials Production in progress Finished produce Goods Total inventory Trade receivables and other receivables of trade receivables and other receivables Net trade receivables Allowance for trade uncollectible accounts Other receivables -including investment receivables - allowance for other uncollectible accounts Total receivables, including: - long-term - short -term Age structure of trade receivables Current

23 Overdue from 1 to 30 days from 31 to 60 days from 61 to 90 days from 91 to 180 days Over 180 days Gross trade receivables Allowance for uncollectible accounts Net trade receivables Change in the balance of allowance for uncollectible accounts Opening balance 78 Increase arising from: - - allowance for main uncollectible accounts allowance for uncollectible accounts charged to financial costs - - Decrease arising from: 56 - Usage of allowance for uncollectible accounts - - termination of allowance for uncollectible accounts Closing balance, in total Currency structure of short-term net receivables Receivables in Polish currency Receivables in foreign currencies (in currencies and after conversion into PLN) EURO after conversion into PLN GBP after conversion into PLN

24 - CZK after conversion into PLN Total Credits and loans granted of credits and loans granted Long-term credits and loans credits loans - - Short-term credits and loans credits loans - - Total Trade liabilities and other liabilities of trade liabilities and other liabilities Trade liabilities including investment purchase liability Other liabilities - remuneration liabilities - income tax liabilities - other taxes and benefits liabilities - other liabilities Total liabilities, including: - long-term - short-term

25 15.2. Age structure of trade liabilities Current Overdue from 1 to 30 days from 31 to 60 days from 61 to 90 days from 91 to 180 days Over 180 days Trade liabilities, in total Currency structure of trade liabilities Trade liabilities in Polish currency Trade liabilities in foreign currency EUR after conversion into PLN CZK after conversion into PLN USD after conversion into PLN - 53 Trade liabilities, in total Provisions of provisions Retirement compensation provisions Other provisions Deferred tax provisions Total Balance of provisions Short-term provisions Long-term provisions Balance of provisions Short-term provisions Long-term provisions

26 Balance of provisions Short-term provisions Long-term provisions Future revenues - subsidies of accrual settlements of revenues Long-term ZFRON subsidies EU subsidies Short-term ZFRON subsidies EU subsidies 9 61 Other receivables - - Total Accruals include most of all the subsidies granted for subsidy of fixed assets purchase from the Union funds. The subsidies granted are accounted for and recognized in profit and loss account within other operating revenues over the period of amortization of fixed assets which the individual subsidy concerns. 18. Financial instruments Capital risk management The Group manages capital risk in order to ensure that the entities belonging to them will be able to continue their activity at the same time maximizing profitability for shareholders thanks to optimization of the proportion between debt and equity. Leverage index the end of the III quarter of 2017: Debt Cash and cash equivalents* Net debt Equity Net debt to equity ratio % * In the year 2017 this item includes the equivalent in the form of bonds purchased at the amount of PLN thousand 26

27 Date of purchase Date of buyout Value Profitability Secondary market bonds (PKO Leasing S.A.) % Secondary market bonds (PKO Leasing S.A.) % Secondary market bonds (PKO Leasing S.A.) % Total

28 18.2. Categories of financial instruments Financial assets Held-to-maturity investments - - Receivables and loans (including cash and cash equivalents) Recognized in the statement of financial standing as: Financial assets 2 6 Trade receivables Other receivables Cash and cash equivalents Financial liabilities Depreciated cost Demonstrated in the statement of financial standing as: Long-term bank credits and loans Trade and other liabilities Short-term bank credits and loans Other financial liabilities Objectives of financial risk management Bank credits are the main financial instruments used by the Group. The main objective of those instruments is gaining financial means for the Group s activity. The Group also owns financial assets, such as trade receivables, cash assets and short-term deposits which are generated directly in the course of the Group s activity. The main types of risks arising from the Group s financial instruments include the interest rate of cash flow risk, liquidity risk, currency risk and credit risk. The Board verifies and arranges the rules of management of each of the risk types the rules are briefly discussed below. Interest rate risk The Issuer s Capital Group is a party in credit agreements based on variable rates of WIBOR, LIBOR and EURIBOR. Because of that the Group is exposed to the interest rate risk. In the Issuer s Board s opinion, there is no need to provide protection in relation to that kind of risk. Credit risk The Group enters transactions only with renowned companies of good creditworthiness. All clients who intend to take advantage of commercial credits undergo the procedures of initial verification. Moreover, thanks to current monitoring of receivables balance, the Group s exposition to the risk of irrecoverable receivables is little. Still, some problems with individual clients may arise. But their participation in sales is so insignificant that it will not cause liquidity problems of the Issuer. It may only influence the financial result of the period. Liquidity risk The Group monitors the risk of lack of funds with the use of periodical liquidity planning. The tool 28

29 takes account of maturity dates of both investments and financial assets (for example receivables accounts, other financial assets) and forecasted cash flows from operating activity. The Group s objective is to maintain the balance between continuity and flexibility of financing by taking advantage of different sources of financing, such as credits in current account, financial lease agreement with purchase possibility. Currency risk Exchange rate influences the Capital Group s activity in two ways. On one hand high rate of Polish zloty in comparison with the rate of euro allows cheaper purchase of cardboard in foreign paper mills. On the other hand, it affects the Capital Group s revenues in a negative way. Sales of packaging on foreign markets is currently approximately 20% (mainly in EUR), it is worth mentioning, though, that some prices of packaging sold on the Polish market are established in EUR and sold in EUR. Practically, in EUR the Issuer operationally balances revenues and expenses. But investment purchases are mainly in EUR. Additionally, the Issuer took out mortgage credits in CHF, and on account of that, as far as their financial position is concerned, the Issuer is exposed to the risk of weakening of the Polish zloty against Swiss franc. The Issuer s Board uses the instruments of financial futures market in order to secure currency exchange rate. 19. Remuneration of members of executive management Remuneration of members of the Board and other members of executive management in the financial year was as follows: 9 months ended months ended Managing Board Supervisory Board Total At the same time each of the members of the Managing Board entered the Derivative Contract whose realization was connected with net profit gained by the Group: Payment of benefit from Derivative Contract Payment of benefit from Derivative Contract Managing Board Total Merger of business entitites No mergers of business entities occurred in the Group. 21. Events after balance sheet date 29

30 After the date of drawing up this financial statement, there occurred no other significant events which, in the Parent Entity Board s opinion, would require demonstrating in this condensed consolidated semi-annual financial statement. 22. Financial statement approval The condensed consolidated semi-annual financial statement was approved for publication by the Board of the parent entity on 14 November

31 C. CONDENSED SEMI-ANNUAL SEPARATE FINANCIAL STATEMENT OF BSC DRUKARNIA OPAKOWAŃ S.A. SEPARATE STATEMENT OF COMPREHENSIVE INCOME III quarter III quarters III quarter III quarters of of of of Notes Continued activity Revenues from sales including sales of goods and materials Other operating revenues Total revenues from operating activity Change in the balance of products Consumption of materials Payroll and benefits External services Depreciation Other costs Value of goods and materials sold Total operating expenses Profit (loss) on operating activities Financial revenues Financial expenses Profit (loss) before taxation Income tax Net profit (loss) from continued activity Discontinued activity Net loss from discontinued activity Net profit (loss) Other comprehensive (net) income Total comprehensive income

32 SEPARATE STATEMENT OF FINANCIAL STANDING in thousands PLN in thousands PLN Non-current assets Tangible non-current assets Intangible assets Deferred tax assets Investments in subsidiaries Other assets - - Total non-current assets Current assets Inventory Trade receivables Income tax receivables - - Other receivables Financial assets Cash Other assets Total current assets Assets classified as held for sale - - Total assets

33 SEPARATE STATEMENT OF FINANCIAL STANDING in thousands PLN in thousands PLN Equity Share capital Supplementary capital Retained profits Total equity Long-term liabilities Credits and loans Debt securities - - Other financial liabilities Provision for deferred income tax Provision for retirement benefits Other provisions - - Future revenues - subsidies Total long-term liabilities Short-term liabilities Credits and loans Other financial liabilities Trade liabilities Income tax liabilities Other liabilities Other provisions Future revenues - subsidies Total short-term liabilities Liabilities directly connected with non-current assets held for sale Total payables Total liabilities

34 SEPARATE STATEMENT OF CASH FLOW Net cash from operating activity III quarters of III quarters of Gross profit Depreciation Interest Currency conversion differences Result of investment activities Trade and other receivables change in the balance Inventory- change in the balance Other assets - change in the balance Trade and other liabilities - change in the balance Provisions - change in the balance Other accruals change in the balance Income tax - paid Net cash flow from operating activity Cash flow from investment activity Interest Inflows from sales of investments Inflows from sales of non-current and intangible assets Outflows for purchase of non-current assets and intangible assets Loans granted Outflows for purchase of bonds, shares Net cash from investment activity Cash flow from financial activity Dividend paid and other payments to shareholders Repayment of bank credits and loans Repayment of liabilities from financial leases Raising bank credits

35 Purchase of securities Interest Net cash from financial activity Increasing /(decreasing) net cash and cash equivalents Opening cash and cash equivalents balance Change in cash balance due to exchange differences Closing cash and cash equivalents balance SEPARATE STATEMENT OF CHANGES IN EQUITY in thousands PLN in thousands PLN Share capital Opening balance Increase in capital - Closing balance Supplementary capital Opening balance Distribution of retained profit Issuance of shares - Closing balance Retained profit Opening balance Payment of dividend Supplementary capital Net financial result Closing balance Total equity 35

36 Opening balance Closing balance SELECTED COMMENTARY According to the Issuer s Board, all significant commentary concerning the Issuer was presented in the selected commentary to the condensed consolidated semi-annual financial statement of the Issuer s Group, as required by IAS 34. Janusz Schwark Arkadiusz Czysz Andrzej Baranowski President of the Board Vice-President of the Board Vice-President of the Board Poznań

37 D. THE BOARD S REPORT ON THE ACTIVITY OF BSC DRUKARNIA OPAKOWAŃ S.A. CAPITAL GROUP FOR III QUARTERS OF Description of the issuer s capital group with presentation of entities to be consolidated and in the case of the issuer who is the parent entity which on the basis of binding regulations is not obliged or may not draw up consolidated financial statements with indication of the cause and legal basis of lack of consolidation. Grupa Kapitałowa BSC Drukarnia Opakowań S.A. obejmuje BSC Drukarnię Opakowań S.A. jako jednostkę BSC Drukarnia Opakowań S.A. Capital Group consists of BSC Drukarnia Opakowań S.A. as the parent entity and subsidiaries located in Poland. The basic object of business activity is printing. The structure of the Group 30 September 2017 was as presented below: BSC Drukarnia Opakowań S.A. (parent entity) BSC Pharmacenter sp. z o.o. (100% shares) POSBAU S.A. Budownictwo Uprzemysłowione (93.29% stocks) POSBAU Nieruchomości sp. z o.o. (100% shares) All the subsidiaries are consolidated by the method of full consolidation. As at the date of publishing the statement the Parent Entity s participation in the share capital of POSBAU amounts to 93.29%. 2. Indicating the effects of changes in the business entity s structure, also resulting from merging of business entities, acquisition or sales of entities of the issuer s capital group, long-term investments, division, restructuring and discontinuing of the activity. In May 2015 the Parent Entity by acquiring 2,749 shares of POSBAU S.A. Budownictwo Uprzemysłowione, constituting 55.07% of the share capital of that company, took control over POSBAU Group including the parent company POSBAU S.A. and their subsidiary POSBAU Nieruchomości sp. z o.o. At the end of the III quarter of 2017 the Parent Entity maintains the shareholding level of 93.29%. As at the date of publishing the statement the Parent Entity s participation in the share capital of POSBAU also amounts to 93.29% The change in the Group s structure is the part of realizing the strategy aiming at local expansion of the Group s production plant. POSBAU S.A. is the Group s direct neighbour holding properties as perpetual usufruct which are attractive from the point of view of the Group s further expansion. Some of the properties will be let or sold the Board will decide about it later having performed the market analysis. 3. The Board s position on the possibility of realizing formerly published result forecast for the definite year, in view of results presented in the semi-annual report compared to the forecasted results. 37

38 The Board did not publish financial forecast for the year Indication of shareholders holding directly or indirectly through subsidiary entities at least 5% of the total number of votes at the issuer s annual general meeting the day of delivering the quarterly report with indication of the number of shares held by the entities, their percentage share in the seed capital, the number of votes resulting from them and their percentage participation in the general number of votes at the annual general meeting and indication of changes in the structure of ownership of the issuer s large block of shares over the period since delivering the previous quarterly report. Number of shares % participation in share capital Number of votes at Annual General Meeting % participation in the number of votes at Annual General Meeting Colorpack GmbH % % ALTUS TFI S.A % % JS Holding Sp. z o.o % % Green Place S.A % % PKO BP Bankowy Otwarty Fundusz Emerytalny % % Aviva Investors Poland TFI S.A % % Since delivering the last quarterly report there have been no changes in the ownership structure of large block of the Issuer s shares. 5. Account of ownership of the Issuer s shares or allotment certificates by persons managing and supervising the Issuer the date of delivering the quarterly report with indication of the changes in ownership over the period since the last quarterly report, separately for each of the persons. Number of shares % participation in share capital Number of votes at Annual General Meeting % participation in the number of votes at Annual General Meeting Janusz Schwark through JS Holding S.A % % Arkadiusz Czysz through Green Place S.A % % Andrzej Baranowski % % The members of the Supervisory Board do not directly or indirectly hold the Issuer s shares. Since delivering the last quarterly report there were no changes in the ownership structure of the Issuer s shares held by the managing persons. 38

39 6. Indication of proceedings taking place in the Court, the body competent to settle industrial disputes or public administration body. Before the President of Energy Regulatory Office there are ongoing proceedings concerning imposing a fine on the Company as a result of the suspicion of violation of the obligation to comply with the restrictions, introduced on August 2015, concerning delivery and consumption of electricity, which, according to article 56 item 1 point 3a of the Act on Energy Law is subject to fine. The Issuer informed about initiating the above mentioned proceedings in their current report 15/2016 dated 12 July The Issuer submitted the relevant explanation presenting their opinion on this matter to the President of ERO at the indicated time and shall provide updated information concerning significant decisions taken in the above mentioned proceedings. The maximum amount of the fine resulting from the potential violation of the restrictions of energy consumption, in accordance with article 56 item 1 point 3a of the Act on Energy Law must not exceed 15% of the Company s revenue gained in the previous fiscal year. The President of ERO, while establishing the amount of the fine, takes harmfulness of the act, culpability and the entity s current behaviour and financial capabilities into consideration. At present no proceedings before the court, the bodies of arbitration proceedings or other than indicated above proceedings before the body of public administration take place against the Issuer or its subsidiaries which could affect the financial position. There are no proceedings concerning liabilities or receivables of the Issuer or the Issuer s subsidiary, the value of which constitutes at least 10% of the Issuer s equities. Moreover, there are no two or more proceedings concerning liabilities or receivables whose total value would constitute respectively at least 10% of the Issuer s equities. 7. Information on concluding one or many transactions with affiliated entities by the issuer or their subsidiary, if separately or together they are binding and were concluded on conditions other than market principles, except for transactions concluded by the issuer being bound by the fund with the affiliated entity, with indication of their value, still the information concerning individual transactions may be grouped in terms of type, except for the case when information on individual transactions are necessary for understanding their influence on the material and financial situation and the financial result of the issuer. Companies belonging to the Group of BSC Drukarnia Opakowań S.A. concluded transactions with affiliated entities only on market principles. 8. Information on guaranteeing one subject collectively or their subsidiary for a credit, loan or a warrantee by the issuer or the issuer s subsidiary if the total value of the existing guarantees constitutes the equivalent of at least 10% of the issuer s equity. The Group of BSC Drukarnia Opakowań S.A. did not guarantee credits, loans or warrantees exceeding 10% of the issuer s equity. 9. Other information which, according to the issuer is essential for evaluation of their personnel, material, financial situation or financial result and their changes and information which is essential for evaluation of the possibility of realizing liabilities by the issuer. In the presented period no such events occurred. 10. Indicating factors which, according to the issuer, will have influence on the results achieved by them within at least the next quarter. According to the Issuer s Board, no such essential factors occur. 11. Essential changes in appraised values. 39