BSC DRUKARNIA OPAKOWAŃ S.A. GROUP Consolidated financial statement for I quarter of BSC Drukarnia Opakowań S.A. Group

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1 BSC Drukarnia Opakowań S.A. Group CONSOLIDATED QUARTERLY FINANCIAL STATEMENT FOR I QUARTER OF

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. Group for 3 months of C. Semiannual condensed separate financial statement of BSC Drukarnia Opakowań S.A. for 3 months of D. Board s report on the activity of BSC Drukarnia Opakowań S.A. Group for 3 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 thousands PLN thousands 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 BSC 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 2. Changes in significant items of the comprehensive income statement and financial standing statement Selected consolidated financial data (in thousands PLN) IQ2018 IQ2017 Change in thousand s 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 %, compared to I quarter of 2017 appeared to be worse, mainly because of high base. In I quarter of 2017 the Group still fully realised the contract for Mondelez Group that is mainly the reason for lower revenues in the year In the Group s revenue decreased by 5% but the Group s results, such as EBITDA, operating profit and net profit decreased respectively by 8%, 10% and 10%. The Group s liabilities remained on the similar level. 3. Financial ratios Change in percentage point 14.22% 14.88% -0.66% Margins I Q 2018 I Q 2017 Margin on operational level Operational result x 100 / revenue from sales EBITDA margin ( Operational result + amortization) x 100 / revenue from sales Gross profit margin Gross result x 100 / revenue from sales Net profit margin Net result x 100 / revenue from sales 19.90% 20.51% -0.61% 14.55% 14.99% -0.44% 11.73% 12.30% -0.57% In compared to the year 2017 the Group s margins decreased. However, they slightly improved compared to the whole year

5 Ratios I Q 2018 I Q 2017 Dynamics Liquidity ratio I % Current assets / short-term liabilities Liquidity ratio II (current assets inventory) / short-term liabilities % Debt ratio short-term and long-term liabilities / assets sum Net working capital 15.76% 17.09% -7.8% % The Group still maintains relatively high liquidity ratios. 5

6 4. Selected separate financial data SELECTED FINANCIAL DATA data from to thousands PLN data from to data from to thousands EUR data from to Net revenues from sales Profit (loss) from sales Profit (loss) from operating activity Profit (loss) before taxation Net profit (loss) 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. GROUP FOR I QUARTER OF 2018 CONDENSED CONSOLIDATED SEMI-ANNUAL FINANCIAL STATEMENT OF COMPREHENSIVE INCOME Notes (from to ) I quarter of 2017 (from to ) Continued activity Revenues from sales including sales of goods Other operating revenues Change in the balance of products Consumption of materials Payroll and benefits External services Depreciation Change in the balance of products 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 shareholders 1 21 Other comprehensive (net) income Total comprehensive income Attributable to: Shareholders of the parent entity Non-controlling shareholders

8 CONDENSED CONSOLIDATED SEMI-ANNUAL STATEMENT OF FINANCIAL STANDING Notes as at as at Non-current assets Tangible non-current assets Intangible assets Deferred tax assets Other assets - - Total non-current assets Current assets Inventory Trade receivables Income tax receivables Other receivables Financial assets Monetary assets Other assets Total current assets Assets classified as held for sale - - Total assets

9 CONDENSED CONSOLIDATED SEMI-ANNUAL STATEMENT OF FINANCIAL STANDING Notes as at as at Equity Share capital Supplementary capital Effect of increasing involvement in subsidiary entity Retained profits Capital attributable to shareholders of the parent entity Capital attributable to non-controlling shareholders 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 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 (from to ) I quarter of 2017 (from to ) Net cash from operating activity 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 - 20 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 19 - Outflows for purchase of non-current assets and intangible assets Loans granted - - Loans repaid - - Outflows for purchase of securities 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 - - Interest Net cash from financial activity Increasing /(decreasing) net cash and cash equivalents Opening cash balance and cash equivalents Closing cash balance and cash equivalents

11 CONDENSED CONSOLIDATED SEMI-ANNUAL STATEMENT OF CHANGES IN EQUITY as at as at 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 Supplementary capital Adjustments Net financial result Change of non-controlling share structure 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

12 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 reporting period the personnel of the parent entity s Board was as follows: Janusz Schwark - the 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 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, Frank Ohle, Krzysztof Kaczmarczyk, Jarosław Wesołek In the analyzed period there were no changes in the personnel of the Supervisory Board of the parent entity. As at the date of drawing up the consolidated financial statement, the structure of the parent entity s shareholding was as follows: Number of shares Total nominal value of shares (in thousands PLN ) Participation in share capital Number of votes Participation in votes at the General Meeting of Shareholders Colorpack GmbH % % ALTUS TFI S.A % % JS Holding Sp. z o.o % % Green Place S.A % % 12

13 PKO BP Bankowy Otwarty Fundusz Emerytalny % % Others % % Total % % 2. Information on the Group BSC Drukarnia Opakowań S.A. the 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 as at 31 March 2018: 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 principles. 3. Information on principles applied while drawing up the condensed consolidated semi-annual financial statement Declaration of conformity and general principles for drawing up the statement This condensed consolidated semi-annual financial statement is prepared in accordance with the requirements of IAS 34 Interim financial reporting and 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 and presents the Group s financial standing as at 31 March 2018 and 31 December 2017, the result of their activity and cash flows for the period of 3 months ended 31 March 2018 and 31 March The duration of the parent entity and the entities belonging to the Group is unspecified. 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. This condensed consolidated semi-annual financial statement, with the exception of the financial statement of cash flows, was drawn, in accordance with the principle of accrual based accounting. Accounting principles and amendments to the International Financial Reporting Standards 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 13

14 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 financial statement for the year Functional currency and reporting currency 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 Group. The financial data was reported in thousands zlotys, unless it was reported with higher accuracy in certain situations. 4. Revenue from operating activity 4.1. Territorial structure 2018 (from to ) 2017 (from to ) - domestic export Total net revenues from sales of goods and services Including goods Revenue from sales according to branches of business 2018 (from to (from to ) Packaging, printing services and goods Packaging for cosmetics branch Packaging for food branch Packaging for pharmaceutical branch Packaging for other branches Goods Other not connected with main business activity Lease Construction services - - Hotel services Total net revenues from sales of goods and services Other operating revenues (from to ) I quarter of 2017 (from to ) Profit from disposal of non-financial fixed assets 19 - Subsidies Other operating revenues, including: sales of scrap and other utility waste settlement of revenues concerning fixed assets

15 - cutting tools lease discounts for non-current assets logistic services compensations and bonuses received other operating revenues Other operating revenues, in total 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 their purchase and settled for the period of depreciation (amortization) of fixed assets. 6. Costs of operating activity 6.1. Other costs (from to ) I quarter of 2017 (from to ) Amortisation 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 amortization-liquidation of buildings and structures 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 first quarter of 2018 they constituted respectively 61% and 18% 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 (from to ) I quarter of 2017 (from to ) Financial revenues interest

16 -exchange rate differences Profit from bargain purchase - - Financial costs interest exchange rate differences - - Net financial revenues (costs) The interests from deposits and exchange gains constitute financial revenues. Financial costs include most of all the cost of interest from bank credits. Exchange differences concerning operating activity adjust revenues from sales and operating expenses. 8. Current income tax and deferred income tax (from to ) I quarter of 2017 (from to ) 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 as at 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. 9. Profit per one share (from to ) I quarter of 2017 (from to ) 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

17 10. Operating segments Until the year 2014 the Board of the parent entity recognized the following segments: Card board 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 - construction - hotel services - 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 as at as at Fixed assets Tangible assets Intangible assets Long-term investments 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

18 Longterm liabilities Short-term liabilities Total payables Total liabilities Report revenues and costs according to segments without consolidation adjustments Cardboard packaging and labels as at in thousands PLN Other segments Construction Hotel services Lease as at in thousands PLN as at in thousands PLN as at in thousands PLN Profit (loss) from sales Other operational revenues Other operational costs Profit (loss) from sales Other operational revenues Financial revenues Financial costs Gross profit Income tax Net profit (loss) * Tangible fixed assets of tangible fixed assets As as As as Tangible fixed assets Fixed assets - lands - buildings and structures - technical devices and machines - means of transport - other fixed assets Fixed assets under construction Ownership structure of tangible fixed assets 18

19 As as As as Own Used on the basis of lease, tenancy agreement, lease agreement Total Assets pledged as collateral Value of collateral of liabilities Collateral form As at As at Printing hall Mortgage Warehouse building Mortgage Office building Mortgage 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 as at as at Materials Production in progress Finished produce Goods Total inventory Trade receivables and other receivables of trade receivables and other receivables as at As at 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

20 13.2. Age structure of trade receivables as at as at Current Overdue from 1 to 30 days from 31 to 60 days from 61 to 90 days from 91 to 180 dni Over 180 days Gross trade receivables Allowance for uncollectible accounts Net trade receivables Change in the balance of allowance for uncollectible accounts as at as at Opening balance 137 Increase arising from: allowance for main uncollectible accounts allowance for uncollectible accounts recognized in financial costs Decrease arising from: Usage of allowance for uncollectible accounts - termination of allowance for uncollectible accounts Closing balance, in total

21 13.4. Currency structure of short-term net receivables as at as at Receivables in Polish currency Receivables in foreign currencies (in currencies and after conversion into PLN) EURO after conversion into PLN USD after conversion into PLN CZK after conversion into PLN GBP after conversion into PLN Total Financial assets of financial assets as at as at Marketable financial assets - - Financial assets measured at fair value through profit and loss - - Financial assets held for sale - - Financial assets held to maturity corporate bonds, deposits loans - 2 Total corporate bonds, deposits: Date of purchase Date of buyout Value Profitability Bonds on secondary market (PKO Leasing S.A.) Bonds on secondary market (PKO Leasing S.A.) Bonds on secondary market (PKO Leasing S.A.) Bonds on secondary market (PKO Leasing S.A.) % % % % Bonds on secondary market (PKO Leasing S.A.) % Total

22 Cash of cash as at as at Cash in hand and at bank Other cash - - Total Credits and loans granted of credits and loans granted as at as at 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 as at as at Trade liabilities including investment purchase liability Other liabilities remuneration liabilities income tax liabilities other taxes and benefits liabilities other liabilities dividend due - - Total liabilities, including: long-term short-term

23 16.2. Age structure of trade liabilities as at as at 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 as at as at 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 Trade liabilities, in total Provisions of provisions Retirement compensation provisions Other provisions Deferred tax provisions Total Balance of provisions as at Short-term provisions Long-term provisions Balance of provisions as at Short-term provisions Long-term provisions Balance of provisions as at Short-term provisions Long-term provisions Future revenues - subsidies 23

24 18.1. of revenues accruals as at as at Long-term ZFRON subsidies - - EU subsidies Short-term ZFRON subsidies EU subsidies - 9 Other - - 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. 19. 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 as at the end of the : as at as at Debt Cash and cash equivalents Net debt - - Equity Net debt to equity ratio - - * This item includes equivalents in the form of bonds purchased at the amount of PLN thousand Categories of financial instruments as at as at Financial assets Held-to-maturity investments Receivables and loans (including cash and cash equivalents) Recognized in the statement of financial standing as: Financial assets Trade receivables Other receivables Cash and cash equivalents Financial liabilities Depreciated cost 24

25 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 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 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 Group s activity in two ways. On one hand high rate of Polish zloty in comparison to the rate of euro allows cheaper purchase of cardboard in foreign paper mills. On the other hand, it affects the Group s revenues in a negative way. Sales of packaging on foreign markets is currently approximately 15% (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. Currently, in EUR the Issuer operationally is marginally exposed to the increase in the exchange rate of EUR. Investment purchases are made mostly 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. 20. Remuneration of executive management members 25

26 Remuneration of members of the Board and other members of the executive management in the financial year was as follows: as at as at Managing Board Supervisory Board Total Merger of business entitites In May 2015 the Parent Entity by acquiring 2,749 shares of POSBAU S.A. Budownictwo Uprzemysłowione (hereinafter referred to as POSBAU S.A.) constituting 55.07% of that company s share capital, took control over POSBAU Group including the parent entity POSBAU S.A. and its subsidiary POSBAU Nieruchomości sp. z o.o. By 31 March 2018 BSC Drukarnia Opakowań S.A. had increased their participation in the share capital of Posbau Group to 93%. 22. Events after balance sheet date 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. 23. Financial statement approval The condensed consolidated semi-annual financial statement was approved for publication by the Board of the parent entity on 15 May

27 C. CONDENSED SEMI-ANNUAL SEPARATE FINANCIAL STATEMENT OF BSC DRUKARNIA OPAKOWAŃ S.A. SEPARATE STATEMENT OF COMPREHENSIVE INCOME I quarter I quarter Notes Continued activity Revenues from sales including foods 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) - - Attributable to: Other comprehensive (net) income - - Total comprehensive income

28 SEPARATE STATEMENT OF FINANCIAL STANDING Non-current assets as at as at Tangible non-current assets Intangible assets Investments in subsidiaries Financial assets - - Deferred tax assets Other assets - - Total non-current assets Current assets Inventory Trade receivables Income tax receivables - 91 Other receivables Financial assets Cash Other assets Total current assets Assets classified as held for sale - - Total assets

29 SEPARATE STATEMENT OF FINANCIAL STANDING as at as at 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

30 SEPARATE STATEMENT OF CASH FLOW Net cash from operating activity I quarter I quarter 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 Other adjustments - - Net cash flow from operating activity Cash flow from investment activity Interest Inflows from sales of investments 48 Inflows from sales of non-current and intangible assets - - Outflows for purchase of non-current assets and intangible assets Loans granted -150 Outflows for purchase of bonds, shares Net cash from investment activity Cash flow 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 - - Interest Net cash from financial activity Increasing /(decreasing) net cash and cash equivalents Opening cash balance and cash equivalents Change in cash balance due to exchange differences - - Closing cash balance and cash equivalents

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

32 D. THE BOARD S REPORT ON THE OPERATIONS OF FOR I QUARTER OF Description of the issuer s 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. BSC Drukarnia Opakowań S.A. 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 as at 31 March 2018 is 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) All the subsidiaries are consolidated by the method of full consolidation. 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 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. By the Parent Entity purchased another group of stocks, thus reaching % of the share capital of POSBAU S.A. In the Parent Entity did not increase their shareholding in POSBAU SA. 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 quarterly report compared to the forecasted results. The Board did not publish financial forecast for the year POSBAU Nieruchomości sp. z o.o. (100% shares) 4. 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 as at the day of delivering 32

33 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 Total nominal value of shares (in thousands PLN) % 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 % OTHERS % Since delivering the last quarterly report (annual statement for the year 2017) no changes have been made 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 as at 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. 6. Indication of proceedings taking place in the Court, the body competent to settle industrial disputes or public administration body. Currently there are no other proceedings before the governmental bodies, either judicial proceedings or conciliation held with the participation of the Issuer or the companies of the Issuer s Group which might affect 33

34 the financial standing of the Issuer or the companies of the Issuer s Group. 7. Information on concluding one or many transactions with related subjects 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 related subject, 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 subjects 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. No essential changes in appraised values occurred. 12. Concise description of the issuer s essential achievements and failures over the period of this report with a list of the most important events concerning them. In the presented period no such events took place. 13. Description of factors and events, especially of untypical character, having considerable influence on the financial results achieved. According to the Board of BSC Drukarnia Opakowań S.A. there were no untypical factors or events having considerable influence on the financial results achieved in. 14. Commentary concerning the seasonal and cyclical nature of the issuer s activity in the presented period. Seasonal and cyclical activity of the Group did not take place in the presented period. 15. Information concerning issuance, redemption and repayment of non-equity and equity securities. In the presented period such events did not take place. 16. Information concerning paid (or declared) dividend calculated in total and per share with division into ordinary and priority shares. On 03 April 2018 the Board of the Company passed a resolution concerning the Board s proposal of profit distribution for the financial year ending 31 December The Board decided to put forward to the Company s General Meeting the recommendation of payment of dividend for the financial year 2017 at the amount of PLN 9,807, that is PLN 1.00 for one share, at the same time recommending that the rest of the Company s net profit for the financial year ending 31 December 2017 at the amount of PLN 11,354, is allotted for the Company s supplementary capital. 34

35 17. Indicating events which took place after the date of as at which the condensed quarterly financial statement was drawn up, not included in this report and which may significantly influence the issuer s future financial results. No events took place in the Group after the date of as at which the condensed quarterly financial statement was drawn up which may significantly influence the issuer s future financial results. 18. Information concerning changes in contingent liabilities or contingent assets which have occurred since the end of the last financial year. Contingent liabilities arising from performance bond and retention bond of total value of PLN 410 thousand as at 31 March This item exists in the company POSBAU S.A. 19. The type and amount of items influencing the assets, liabilities, capital, net financial result or cash flows which are untypical in terms of their type, amount or frequency. In the presented period such events did not take place. Janusz Schwark Arkadiusz Czysz Andrzej Baranowski President of the Board Vice-President of the Board Vice-President of the Board Poznań