Consolidated financial quarterly report of FFiL Śnieżka S.A. for Q3 2016

Consolidated financial quarterly report of FFiL Śnieżka S.A. for Q3 2016 The Śnieżka Capital Group ("Group") comprises Fabryka Farb i Lakierów Śnieżka SA ("parent company", "Company") and its subsidiaries. The interim condensed consolidated financial statements of the Group cover the 3-month period ended 30 September 2016 and include comparative data for the 3-month period ended 30 September 2015. The statement of comprehensive income includes data for 3-month period ended 30 September 2016 it was not subject to the auditor's review or audit. The parent company is entered in the register of entrepreneurs of the National Court Register maintained by the District Court in Rzeszów, 12th Commercial Division of the National Court Register, under KRS no. 0000060537. The parent company was assigned statistical number (REGON) 690527477. The duration of the parent entity and the Group entities is unspecified. The Group's business focus consists of: manufacture of paints, varnishes, adhesives, solvents, etc. wholesale and retail. The Group s direct parent is Fabryka Farb i Lakierów Śnieżka SA. These interim condensed financial statements of the Group for the 3-month period ended 30 September 2016 were approved for publication by the Management Board on 2 November 2016. These interim condensed consolidated financial statements have been drawn up in conformity with the International Financial Reporting Standards ("IFRS") approved by the EU. As at the day when these statements were approved for publication, in consideration of the IFRS implementation process taking place in the EU and the Group's business, and with regard to the accounting principles applied by the Group, the International Financial Reporting Standards differ from the International Financial Reporting Standards approved by the EU. The IFRS approved by the UE include standards and interpretations approved by the International Accounting Standards Board (IASB) and the Committee for International Financial Reporting Interpretations ("IFRIC"). These interim condensed consolidated financial statements are presented in the Polish zloty ( PLN ), and all figures are in thousand PLN, unless specified otherwise. These interim condensed consolidated financial statements have been prepared on the assumption that the Group will continue as a going concern in the foreseeable future. The condensed consolidated financial statements do not include all information and disclosures required in the annual consolidated financial statements and should be read in conjunction with the Group s consolidated financial statements for the year ended on 31 December 2015, which was published on 21 April 2016. p. 1

EUR exchange rates used for translations in the statements: Individual items of the income statement have been translated according to the average EUR exchange rate applicable in the period, and the rate was: over 9 months of 2016: 4,3688 over 9 months of 2015: 4,1585 The individual items of the balance sheet have been converted according to the EUR exchange rate at the end of the period: as at 30 September 2016: 4,3120 as at 30 September 2015: 4,2386 Selected financial data of the Śnieżka Capital Group 9-month period ended on 30 September 2016 (not audited) in thousand PLN 9-month period ended on 30 September 2015 (not audited) 9-month period ended on 30 September 2016 (not audited) in thousand EUR 9-month period ended on 30 September 2015 (not audited) I. Net revenue from sales of products, goods and materials 481 810 458 303 110 284 110 209 II. Profit (loss) on operating activities 59 394 61 411 13 595 14 768 III. Gross profit/(loss) 58 234 52 922 13 330 12 726 IV. Net profit (loss) 49 033 44 880 11 223 10 792 - Net profit (loss) attributable to shareholders of the parent company 48 149 44 241 11 021 10 639 - Net profit (loss) attributable to non-controlling shares 884 639 202 154 V. Comprehensive income for the period 46 787 36 662 10 709 8 816 - Comprehensive income for the period, attributable to shareholders of the parent company 46 228 37 226 10 581 8 952 - Comprehensive income for the period, attributable to non-controlling shares 559 (564) 128 (136) VI. Net cash flows from operating activities 43 272 44 439 9 905 10 686 VII. Net cash flows from investing activities (17 550) (11 542) (4 017) (2 776) VIII. Net cash flow from financial activities (12 965) (28 871) (2 968) (6 943) IX. Total net cash flows 12 757 4 026 2 920 968 X. Total assets 411 813 392 354 95 504 92 567 XI. Liabilities and provisions for liabilities 198 058 187 891 45 932 44 329 XII. Non-current liabilities 2 930 1 515 679 357 XIII. Current liabilities 195 128 186 376 45 252 43 971 XIV. Equity 213 755 204 463 49 572 48 238 - Equity attributable to shareholders of the parent company 209 437 200 129 48 571 47 216 - Equity attributable to non-controlling shares 4 318 4 334 1 001 1 023 XV. Share capital 12 618 12 618 2 926 2 977 XVI. Number of shares 12 617 778 12 617 778 12 617 778 12 617 778 XVII. Earnings (loss) per ordinary share (in PLN / EUR) 3,89 3,56 0,89 0,86 - Earnings (loss) per ordinary share, attributable to shareholders of the parent company 3,82 3,51 0,87 0,84 XVIII. Diluted earnings (loss) per ordinary share (in PLN / EUR) 3,89 3,56 0,89 0,86 - Diluted earnings (loss) per ordinary share, attributable to shareholders of the parent company 3,82 3,51 0,87 0,84 XIX. Book value per share (in PLN / EUR) 16,94 16,20 3,93 3,82 XX. Diluted book value per share (in PLN / EUR) 16,94 16,20 3,93 3,82 XXI. Declared or paid dividend per share (in PLN / EUR) 3,15 3,10 0,73 0,73 p. 2

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as of 30 September 2016 30 September 2016 (unaudited) 31 December 2015 Non-current assets 172 763 168 055 Property, plant and equipment 149 670 147 559 Investment property 11 159 11 569 Goodwill - - Intangible assets 1 112 1 489 Investments in associates measured with equity method 2 024 1 833 Financial assets held for sale - - Other (long-term) financial assets 331 331 Long-term receivables 1 044 1 325 Deferred income tax assets 7 423 3 949 Current assets 239 050 155 216 Inventories 66 492 71 971 Trade and other receivables 147 963 69 975 Income tax receivables - 1 061 Derivative financial instruments - - Other financial assets - - Other non-financial assets 1 150 1 152 Cash and cash equivalents 23 445 11 057 Non-current assets classified as held for sale - - TOTAL ASSETS 411 813 323 271 EQUITY & LIABILITIES Equity (attributable to shareholders of the parent company) 209 437 204 118 Share capital 12 618 12 618 Share premium - - Equity shares - - Foreign exchange differences on translation of a foreign undertaking (37 862) (35 874) Other reserve capitals 85 85 Supplementary capital 131 244 117 927 Revaluation reserve 36 36 Retained earnings / Uncovered losses 103 316 109 326 Equity of non-controlling shareholders 4 318 3 957 Total equity 213 755 208 075 Non-current liabilities 2 930 5 561 Interest-bearing loans and borrowings 1 338 1 338 Provisions 1 356 1 336 Other liabilities - - Deferred income tax provisions 236 2 887 Current liabilities 195 128 109 635 Trade and other liabilities 91 001 50 559 Current portion of interest-bearing loans and borrowings 85 742 55 559 Other financial liabilities - - Income tax liabilities 9 889 2 145 Accruals 6 527 530 Provisions Liabilities related to non-current assets classified as 1 969 842 held for sale - - Total liabilities 198 058 115 196 TOTAL EQUITY & LIABILITIES 411 813 323 271 p. 3

INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the period ended on 30 September 2016 Continuing operations 3-month period ended on 30 September 2016 (not audited) 9-month period ended on 30 September 2016 (not audited) 3-month period ended on 30 September 2015 (not audited) 9-month period ended on 30 September 2015 (not audited) Revenue from sales of products 164 640 443 893 154 773 420 550 Revenue from sales of goods 12 219 32 596 12 549 32 891 Revenue from sales of materials 1 868 5 321 1 700 4 862 Sales revenue 178 727 481 810 169 022 458 303 Cost of goods sold 108 060 292 837 104 510 284 719 Gross profit/(loss) on sales 70 667 188 973 64 512 173 584 Other operating revenue 333 809 157 1 095 Selling costs 27 650 80 843 22 994 67 662 General administrative expenses 15 966 46 892 13 951 42 784 Other operating costs 544 2 653 376 2 822 Profit/(loss) on operating activities 26 840 59 394 27 348 61 411 Financial revenue 72 542 85 375 Financial costs 982 2 095 1 582 9 104 Share in profit of the associate 129 393 78 240 Loss on hyperinflation - - - - Gross profit/(loss) 26 059 58 234 25 929 52 922 Income tax 4 243 9 201 4 198 8 042 Net profit/(loss) on continuing operations 21 816 49 033 21 731 44 880 Discontinued operations Profit/(loss) on discontinued operations - - - - Net profit/(loss) for the period 21 816 49 033 21 731 44 880 Other comprehensive income Items subject to reclassification to profit/(loss) in the following reporting periods: Foreign exchange gains/losses on translation of foreign undertakings (2 157) (2 314) (1 156) (8 488) Items not subject to reclassification to profit/loss in the following reporting periods: Actuarial gains/losses - 68-270 Other net comprehensive income (2 157) (2 246) (1 156) (8 218) COMPREHENSIVE INCOME FOR THE PERIOD 19 659 46 787 20 575 36 662 Profit/(loss) attributable to: 21 816 49 033 21 731 44 880 Shareholders of the parent company 21 372 48 149 21 421 44 241 Non-controlling shareholders 444 884 310 639 Comprehensive income attributable to: 19 659 46 787 20 575 36 662 Shareholders of the parent company 19 555 46 228 20 414 37 226 Non-controlling shareholders 104 559 161 (564) Profit (loss) per share: - basic, from profit for the period attributable to the shareholders of the parent company - basic, from profit on continued operations for the period attributable to the shareholders of the parent company - diluted, from profit for the period attributable to the shareholders of the parent company - diluted, from profit on continued operations for the period attributable to the shareholders of the parent company 1,69 3,82 1,70 3,51 1,69 3,82 1,70 3,51 1,69 3,82 1,70 3,51 1,69 3,82 1,70 3,51 p. 4

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS for the period ended on 30 September 2016 Cash flows from operating activities 9-month period ended on 30 September 2016 (not audited) 9-month period ended on 30 September 2015 (not audited) Profit before tax 58 234 52 922 Adjustments: 15 406 19 649 Depreciation of property, plant and equipment and amortisation of intangible assets 13 649 13 405 (Profit) loss on investment activities (278) (57) (Profit) loss related to financing activities and foreign exchange differences 298 4 211 Share in (profit) loss of associates (393) (240) Net interest and dividends 2 130 2 330 Cash from operating activities before changes in working capital 73 640 72 571 Change in inventories 4 811 (222) Change in receivables (67 966) (60 478) Change in liabilities 32 418 33 209 Change in provisions 1 242 4 352 Change in prepayments and accruals 6 231 1 839 Cash generated by operating activities 50 376 51 271 Income tax paid (7 104) (6 832) Net cash from operating activities 43 272 44 439 Cash flow from investing activities Outflows on acquisition of intangible assets - (18) Expenses related to acquisition of property, plant and equipment (17 912) (11 959) Inflows from sales of property, plant and equipment 362 435 Net cash used in investing activities (17 550) (11 542) Cash flows from financing activities Inflows from loans and borrowings taken out 86 099 63 780 Repayment of loans and borrowings (56 095) (50 463) Repayment of liabilities under finance lease - (123) Other inflows - 165 Interest (1 964) (2 622) Dividends and founders certificates paid (41 005) (39 608) Net cash from financing activities (12 965) (28 871) Net increase (decrease) in cash and cash equivalents 12 757 4 026 Cash and cash equivalents at the beginning of the period 11 057 13 424 Foreign exchange gains/losses on translation of foreign undertakings (369) (556) Cash and cash equivalents at the end of the period 23 445 16 894 p. 5

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the period ended on 30 September 2016 Share capital Foreign exchange differences on translation of a foreign undertaking Attributable to shareholders of the parent company Revaluation reserve Supplementary capital Other reserve capitals Retained earnings / Uncovered losses Total Equity of noncontrolling shareholders As of 1 January 2016 12 618 (35 874) 36 117 927 85 109 326 204 118 3 957 208 075 Net profit/(loss) for the period - - - - - 48 149 48 149 884 49 033 Other net comprehensive income for the period - (1 988) - - - 68 (1 920) (326) (2 246) Change in supplementary capital due to distribution of profit - - - 13 317 - (13 317) - - - Founders' certificates paid - - - - - (1 164) (1 164) - (1 164) Payment of dividend - - - - - (39 746) (39 746) (197) (39 943) As of 30 September 2016 (not audited) 12 618 (37 862) 36 131244 85 103 316 209 437 4 318 213 755 As of 1 January 2015 12 618 (26 486) 36 123 901 85 92 357 202 511 4 898 207 409 Net profit/(loss) for the period - - - - - 44 241 44 241 639 44 880 Other net comprehensive income for the period - (7 285) - - - 270 (7 015) (1 203) (8 218) Change in supplementary capital due to distribution of profit - - - 8 995 - (8 995) - - - Founders' certificates paid - - - - - (493) (493) - (493) Payment of dividend - - - (14 969) - (24 146) (39 115) - (39 115) As of 30 September 2015 (not audited) 12 618 (33 771) 36 117 927 85 103 234 200 129 4 334 204 463 Total equity p. 6

Selected separate financial data of FFiL Śnieżka S.A. 9-month period ended on 30 September 2016 in thousand PLN 9-month period ended on 30 September 2015 9-month period ended on 30 September 2016 in thousand EUR 9-month period ended on 30 September 2015 not audited not audited not audited not audited I. Net revenue from sales of products, goods and materials 437 478 415 728 100 137 97 511 II. Profit (loss) on operating activities 38 863 42 039 8 896 7 645 III. Gross profit/(loss) 38 336 34 352 8 775 6 951 IV. Net profit (loss) 31 082 27 704 7 115 5 580 V. Comprehensive income for the period 31 140 27 962 7 128 6 689 VI. Net cash flows from operating activities 25 926 29 958 5 934 8 434 VII. Net cash flows from investing activities (15 039) (10 999) (3 442) (2 471) VIII. Net cash flow from financial activities 3 203 (21 787) 733 (7 168) IX. Total net cash flows 14 090 (2 828) 3 225 (1 205) X. Total assets 394 330 368 129 91 449 88 136 XI. Liabilities and provisions for liabilities 254 357 249 074 58 988 57 086 XII. Non-current liabilities 62 893 70 099 14 586 14 973 XIII. Current liabilities 191 464 178 975 44 403 42 113 XIV. Equity 139 973 119 055 32 461 31 050 XV. Share capital 12 618 12 618 2 926 3 022 XVI. Number of shares 12 617 778 12 617 778 12 617 778 12 617 778 XVII. Earnings (loss) per ordinary share (in PLN / EUR) 2,46 2,20 0,56 0,53 XVIII. Diluted earnings (loss) per ordinary share (in PLN / EUR) 2,46 2,20 0,56 0,53 XIX. Book value per share (in PLN / EUR) 11,09 9,44 2,57 2,26 XX. Diluted book value per share (in PLN / EUR) 11,09 9,44 2,57 2,26 XXI. Declared or paid dividend per share (in PLN / EUR) 3,15 3,10 0,72 0,74 p. 7

INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION as of 30 September 2016 30 September 2016 (unaudited) 31 December 2015 ASSETS Non-current assets 171135 165 580 Property, plant and equipment 135 069 132 064 Investment property 11 159 11 569 Intangible assets 1 039 1 376 Financial assets held for sale 358 358 Interests, shares and other long-term assets 18 888 18 888 Long-term receivables 1 044 1 325 Deferred income tax assets 3 578 - Current assets 223 195 140 706 Inventories 56 234 64 382 Trade and other receivables 143 600 66 537 Income tax receivables - - Derivative financial instruments - - Other financial assets - 450 Other non-financial assets 864 930 Cash and cash equivalents 22 497 8 407 Non-current assets classified as held for sale - - TOTAL ASSETS 394 330 306 286 EQUITY & LIABILITIES Equity (attributable to shareholders of the parent company) 139 973 149 744 Share capital 12 618 12 618 Share premium - - Equity shares - - Other reserve capitals - - Revaluation reserve - - Supplementary capital 97 418 88 594 Retained earnings / Uncovered losses 29 937 48 532 Non-current liabilities 62 893 51 834 Interest-bearing loans and borrowings 61 608 47 808 Provisions 1 285 1 262 Other liabilities - - Deferred income tax provisions - 2 764 Accruals - - Current liabilities 191 464 104 708 Trade and other liabilities 93 205 50 049 Current portion of interest-bearing loans and borrowings 84 938 51 614 Derivative financial instruments - - Income tax liabilities 5 462 2 229 Accruals 6 221 278 Provisions 1 638 538 Liabilities directly related to non-current assets classified as held for sale - - Total liabilities 254 357 156 542 TOTAL EQUITY & LIABILITIES 394 330 306 286 p. 8

INTERIM CONDENSED STATEMENT OF COMPREHENSIVE INCOME for the period ended on 30 September 2016 Continuing operations 3-month period ended on 30 September 2016 (not audited) 9-month period ended on 30 September 2016 (not audited) 3-month period ended on 30 September 2015 (not audited) 9-month period ended on 30 June 2015 (not audited) Revenue from sales of products 143 656 392 242 133 670 371 171 Revenue from sales of goods 11 825 31 594 11 671 31 565 Revenue from sales of materials 4 223 13 642 4 548 12 992 Sales revenue 159 704 437 478 149 889 415 728 Cost of goods sold 97 423 269 183 93 077 261 573 Gross profit/(loss) on sales 62 281 168 295 56 812 154 155 Other operating revenue 273 618 141 1 009 Selling costs 29 654 86 770 24 831 73 497 General administrative expenses 13 982 40 831 12 064 37 005 Other operating costs 518 2 449 337 2 623 Profit/(loss) on operating activities 18 400 38 863 19 721 42 039 Financial revenue 1 020 2 215 395 585 Financial costs 1 200 2 742 1 420 8 272 Gross profit/(loss) 18 220 38 336 18 696 34 352 Income tax 3 336 7 254 3 558 6 648 Net profit/(loss) on continuing operations 14 884 31 082 15 138 27 704 Discontinued operations Profit/(loss) on discontinued operations - - - - Net profit/(loss) for the period 14 884 31 082 15 138 27 704 Other comprehensive income Items subject to reclassification to profit /(loss) in subsequent reporting periods: Foreign exchange gains/losses on translation of foreign undertakings Items not subject to reclassification to profit /(loss) in subsequent reporting periods: - - - - - - - - - - - - Actuarial gains/losses - 58-258 Other net comprehensive income _ 58 _ 258 COMPREHENSIVE INCOME FOR THE PERIOD 14 884 31 140 15 138 27 962 Profit (loss) per share: - basic from profit for the reporting period 1,18 2,46 1,20 2,20 - basic from profit on continuing operations for the reporting period 1,18 2,46 1,20 2,20 - diluted from profit for the reporting period 1,18 2,46 1,20 2,20 - diluted, from profit on continued operations for the reporting period 1,18 2,46 1,20 2,20 p. 9

INTERIM CONDENSED STATEMENT OF CASH FLOWS for the period ended on 30 September 2016 9-month period ended on 30 September 2016 9-month period ended on 30 September 2015 Cash flows from operating activities (not audited) (not audited) Profit before tax 38 335 34 352 Adjustments: 14 287 19 384 Depreciation/amortisation of fixed and intangible assets 12 833 12 530 (Profit) loss on investment activities (323) (45) Foreign exchange gains/losses 298 4 349 Net interest and dividends 1 479 2 550 Cash from operating activities before changes in working capital 52 622 53 736 Change in inventories 8 148 1 883 Change in receivables (76 364) (62 286) Change in liabilities 40 464 36 740 Change in provisions 1 181 4 286 Change in prepayments and accruals 6 008 1 677 Cash generated by operating activities 32 059 36 036 Income tax paid (6 133) (6 078) Net cash from operating activities 25 926 29 958 Cash flow from investing activities Outflows on acquisition of property, plant and equipment and intangible assets (16 752) (11 424) Inflows from sales of property, plant and equipment 309 401 Received repayments of borrowings granted 450 - Interest received 8 24 Dividends received 946 - Net cash used in investing activities (15 039) (10 999) Cash flows from financing activities Inflows from loans and borrowings taken out 93 352 68 225 Repayment of loans and borrowings (46 684) (47 272) Repayment of liabilities under finance lease - (123) Interest (2 555) (3 043) Other outflows / inflows - 34 Dividends and founders certificates paid (40 910) (39 608) Net cash from financing activities 3 203 (21 787) Net increase (decrease) in cash and cash equivalents 14 090 (2 828) Cash and cash equivalents at the beginning of the period 8 407 12 843 Cash and cash equivalents at the end of the period 22 497 10 015 p. 10

INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY for the period ended on 30 September 2016 Share capital Supplementary capital Retained earnings / uncovered losses Total equity As of 1 January 2016 12 618 88 594 48 532 149 744 Net profit/(loss) for the period - - 31 082 31 082 Reclassification for supplementary capital from distribution of profit - 8 824 (8 824) - Other net comprehensive income for the period - - 58 58 Founders' certificates paid - - (1 165) (1 165) Payment of dividend - - (39 746) (39 746) As of 30 September 2016 (not audited) 12 618 97 418 29 937 139 973 As of 1 January 2015 12 618 103 563 14 520 130 701 Net profit/(loss) for the period - - 27 704 27 704 Other net comprehensive income for the period - - 258 258 Founders' certificates paid - - (493) (493) Payment of dividend - (14 969) (24 146) (39 115) As of 30 September 2015 (not audited) 12 618 88 594 17 843 119 055 p. 11

Notes to the consolidated quarterly report for Q3 2016 Organisation of the Capital Group of the Issuer and its consolidated entities Graphic presentation of the organisational structure of the Issuer s group of related parties and information on the types of relations in the group, as of 30 September 2016: Fabryka Farb i Lakierów Śnieżka SA Śnieżka-Ukraina Sp. z o.o. in Yavoriv 82.52% of shares Śnieżka BelPol Wspólna Sp. z o.o. in Zhodino near Minska 99.00% shares Sniezka EastTrade Sp. z o.o. in Moscow 100% of shares TM Investment Sp. z o.o. in Brzeźnica 100% of shares Plastbud Sp. z o.o. in Pustków 10.07% of shares p. 12

List of Group members that are consolidated or accounted for using the equity method NAME REGISTERED OFFICE BUSINESS FOCUS Śnieżka-Ukraine Sp. z o.o. Yavoriv, Privokzalna 1A Ukraine manufacture of paints, varnishes, solvents, adhesives, fillers, etc.; wholesale and retail sale of construction materials Śnieżka BelPol Wspólna Sp. z o.o. Zhodino, Dorozhnaya 3/1 Belarus manufacture of fillers and impregnating agents TM Investment Sp. z o.o. Brzeźnica ul. Dębicka 44 trademark management Plastbud Sp. z o.o. Pustków 164 b manufacture and sale of paints and varnishes APPLIED CONSOLIDATION AND MEASUREMENT METHODS: Śnieżka-Ukraine Sp. z o.o. Śnieżka-BelPol Wspólna Sp. z o.o. TM Investment Sp. z o.o. Plastbud Sp. z o.o. Full consolidation method Full consolidation method Full consolidation method Equity method Śnieżka EastTrade Sp. z o.o. with its registered office in Moscow the company is involved in the promotion of Śnieżka products, and in advertising and marketing activities. As of 30 September 2016, the company is not consolidated as the scale of its activities is insignificant. 1. Effects of changes in the business unit s structure, including resulting from business combinations, acquisitions or sales of entities in the Issuer s Capital Group, long-term investments, de-mergers, restructuring and discontinuation. In the third quarter of 2016, there were no changes in the structure of the business entity caused by amalgamation, acquisition or sale of entities in the issuer s capital group. There were also no changes due to long-term investments, demergers, restructuring or discontinuation of activity. 2. Position of the Management Board concerning the possibility of meeting previously published profit/loss forecasts for a given year, in the light of the results presented in the quarterly report compared to the forecasted profit/loss. The Management Board of FFiL Śnieżka S.A. did not prepare any profit/loss forecast for 2016. 3. Shareholders holding, directly or indirectly, through their subsidiaries, at least 5% of the total votes at the Issuer s general meeting as at the quarterly report submission date, including the number of shares held by such entities, their percentage share in the share capital, the number of resulting votes and their percentage share in the total votes at the general meeting and specification of changes in the ownership structure of substantial stakes of the Issuer s shares in the period following the publication of the previous quarterly report. Parties (shareholders) holding, directly and indirectly, at least 5% of the Company s share capital and at least 5% of the overall number of votes at the Company's General Meeting, with the total number of shares of 12, 617, 778 and the total number of votes of 14,617,778 as at the issue date of this report: p. 13

Shareholder Number of shares held Jerzy Pater* 2 541 667 of which directly 166 667 Stanisław Cymbor** 2 541 667 of which directly 166 667 directly Piotr Mikrut Rafał Mikrut Share in the share capital (%) 20,14 1,32 20,14 1,32 Number of votes 3 208 335 833 335 3 208 335 833 335 Share in the total number votes at the General Meeting of Shareholders (%) 21,95 5,70 21,95 5,70 1 254 166 9,94 1 787 498 12,23 directly 1 254 167 9,94 1 254 167 8,58 AMPLICO OFE 1 250 000 9,91 1 250 000 8,55 Aviva OFE Aviva BZ WBK 781 669 6,19 781 669 5,35 * Jerzy Pater holds the Issuer s shares indirectly via PPHU Elżbieta i Jerzy Pater Sp. z o.o. (PPHU Elżbieta i Jerzy Pater Sp. z o.o. holds 2,375,000 shares of the Issuer, giving the holder 18.82% share in the share capital and 16.25% share in the total votes at the General Meeting of Shareholders). ** Stanisław Cymbor holds the Issuer s shares indirectly via PPHU Iwona i Stanisław Cymbor Sp. z o.o. (PPHU Iwona i Stanisław Cymbor Sp. z o.o. holds 2,375,000 shares of the Issuer, giving the holder 18.82% share in the share capital and 16.25% share in the total votes at the General Meeting of Shareholders). In Q3 2016 and until the date of submission of this report, no changes took place in the structure of shareholders holding at least 5% of the total votes at the General Meeting of Shareholders. 4. The Issuer's shares or rights thereto held by the Issuer s managers and supervisors as of the quarterly report submission date plus changes in their ownership, in the period following the publication of the previous quarterly report, for each person separately; Managers Piotr Mikrut 1,254,166 - no changes Witold Waśko Supervisors Stanisław Cymbor Stanisław Mikrut Jerzy Pater 198 no changes 2,541,667 no changes 33,333 no changes 2,541,667 no changes In the third quarter of 2016 and until the date of publication of this report, no changes took place in the structure of issuer shares held by managers and supervisors. 5. Identification of the proceedings pending before court, competent arbitration authority or public administration authority, including the information on: a) proceedings regarding liabilities or claims of the issuer or its subsidiary whose value is at least 10% of the issuer s equity, with the specification of: subject of proceedings, value of the subject of dispute, date of institution of proceedings, parties to the proceedings initiated and the issuer s position, b) two or more proceedings concerning liabilities and claims whose total amount equals at least 10% of the Issuer s equity respectively, with identification of the total value of the proceedings, separately for the liabilities and claims, and the Issuer's position concerning the case, and for major proceedings concerning liabilities and claims with identification of the p. 14

subject of the proceedings, value in litigation, commencement date of the proceedings and parties to the proceedings. There are no proceedings whose value would equal at least 10% of the Issuer s equity. 6. Information on the conclusion by the Issuer or its subsidiary of one or more transactions with related parties, if they are material (individually or jointly) and if they are not arm's-length transactions, plus the specification of their amount; information on individual transactions may be grouped by type, except when separate information on individual transactions is necessary to understand their impact on the Issuer's assets, financial position and profit/loss, including the following: a) information on the entity with which the transaction was concluded, b) information on relations of the issuer or its subsidiary with a party to the transaction, c) information on the object of the transaction, d) any material terms and conditions of the transaction, with a particular emphasis on the financial terms and indication of specific terms agreed by the parties, which are characteristic for this agreement, in particular terms differing from those that are generally applied to such agreements, e) any other information on these transactions if they are required for understanding the issuer's property, financial position and financial performance, f) any changes in the transactions with related parties that were described in the last annual statements, if such changes could have a significant impact on the Issuer's assets, financial position and profit/loss - but: if relevant information was presented in the quarterly condensed financial statements, the obligation will be deemed fulfilled if it is indicated where such information is available In the third quarter of 2016, the issuer or its subsidiaries did not enter into any transactions with related entities, which would be material and were not arm's length transactions. Transactions between related parties are arm s-length transactions, i.e. their terms do not differ from transactions concluded on market terms. 7. Information on the Issuer s or its subsidiaries credit or loan guarantees or warranties granted jointly to a single entity or its subsidiary, if the total value of the existing guarantees or warranties is equivalent to at least 10% of the Issuer s equity capital, with the indication of: a) name of (company) entity to which sureties or guarantees were issued, b) total amount of loans or borrowings, which was guaranteed in whole or in a specific part, c) period of time for which sureties or guarantees were issued, d) financial conditions under which sureties or guarantees were issued with the indication of the remuneration of the issuer or its subsidiary for issuing of such sureties or guarantees, e) nature of links between the Issuer and the entity that took out loans or borrowings. As of 30 September 2016, no sureties or guarantees were issued by the parent company to one entity, exceeding 10% of the Issuer's equity. On 20 February 2015, the Issuer's subsidiary, i.e. TM Investment Sp. z o.o., granted to the Issuer, i.e. FFiL Śnieżka S.A., a surety for a loan raised with Bank Handlowy w Warszawie S.A. in the total amount of PLN 30 million. The surety was granted until 31 August 2017. The remuneration for TM Investment Sp. z o.o. for the surety granted in 2016 will amount to PLN 150 thousand. 8. Any other information that, in the Issuer's opinion, is significant in order to evaluate its human resources, assets, financial position and profit/loss and changes thereof, as well as any information considered significant in order to evaluate the Issuer s capacity to meet its obligations. In the third quarter of 2016, there were no changes in the issuer s structure that could influence its capacity to meet its obligations. p. 15

9. Factors which, in the Issuer's opinion, will influence its financial performance for at least one quarter. In the Issuer s opinion, the major factors that will influence its financial performance in the coming quarter are prices of raw materials used in the manufacturing process, currency exchange rate variations and the sales dynamics of the Issuer s Capital Group companies. The consolidated profit/loss in the coming quarter will be most influenced by the results of the parent, FFiL Śnieżka SA, and its subsidiaries: Śnieżka Ukraina Sp. z o.o., with its registered office in Yavoriv, Śnieżka BelPol Wspólna Sp. z o.o. and TM Investment Sp. z o.o. The factors with a big impact on the results of the Śnieżka Capital Group in the coming quarters will be the devaluation of the Ukrainian hryvnia and the Belarusian ruble. Other information for the report for Q3 2016 1. Brief description of the issuer s significant achievements or failures in the period included in the report, plus a list of the most important related events Sales revenues of the Śnieżka Capital Group in Q3, 2016 amounted to PLN 178.7 million (growth rate of 5,7% compared with the corresponding period of the previous year), consolidated operating profit amounted to PLN 26,8 million (decrease by 1,9% y-o-y) and consolidated net profit to PLN 21,8 million (decrease by 0,4% y-o-y). Within three quarters of 2016 the Group achieved the best results on the Russian market (growth of sales by 21.9% y-o-y), Ukrainian market (growth of sales by 11.5% y-o-y) and Polish market, where the growth of sales within the three quarters of 2016 amounted to 5.9% as compared to the corresponding period in 2015. The biggest slump in sales, by 24.1% after conversion to the Polish zloty, was observed on the Belarusian market as a result of an economic crisis in that territory. 2. Description of factors and events, in particular of untypical nature, having a significant impact on the financial results achieved. The main factor affecting the financial performance of the Capital Group during the three quarters of 2016 consisted in increased sales in the Ukrainian and Polish market and considerably lower sales in the Belarusian market compared to Q1-Q3 2015. The realised net profit was affected by stable prices of raw materials and significantly lower financial costs compared to the corresponding period in 2015. Lower operating profit was caused by higher selling costs and higher general administrative expenses within the three quarters of 2016. 3. Notes on the seasonality or cyclicality of the Issuer s business in the presented period. The business of the Śnieżka Capital Group experiences seasonality, which consists in the considerable growth of demand, and consequently, of product sales in Q2 and Q3 of each financial year. In wintertime, however, the sales may drop by as much as 70% compared to summer months. Every year, Q3 is usually the best-in-year in terms of sales volume and profit. 4. Information on write-downs on inventories to net value to be received and reversal of these write-downs In Q3 2016 the amount of revaluation write-downs on inventories (in comparison with the end of the first half of 2016) increased by PLN 30 thousand and as of 30 September 2016 these write-downs amount to PLN 609 thousand. 5. Information on impairment losses on financial assets, property plant and equipment, intangible assets or any other assets and on reversal of such impairment losses. In comparison to 30 June 2016, as of 30 September 2016, there was an increase by PLN 42 thousand of the amount of write-downs on receivables (currently they amount to PLN 4,010 thousand). 6. Information on creation, increase, use and release of provisions. p. 16

Provisions created in the Śnieżka Capital Group relate to future employee benefits and, as of 30 September 2016, they amount to PLN 3,325 thousand in total (of which long-term provisions of PLN 1,356 thousand and short-term provisions of PLN 1,969 thousand). In Q3 2016, the amount of these provisions was reduced by a total of PLN 47 thousand, of which by PLN 4 thousand in the long-term part and by PLN 43 thousand in the short-term part. Other provisions were not created by the Group. 7. Information on deferred income tax provisions and assets. In the statement of financial position, the deferred income tax provision is compensated against the deferred income tax assets in each Group company. In Q3, 2016 deferred income tax assets increased by PLN 1,510 thousand compared to 30 June 2016 and currently amounts to PLN 7,423 thousand. Deferred income tax provisions remained unchanged and as of 30 September 2016 amounted to PLN 236 thousand. 8. Information on material purchase and sale transactions of property, plant and equipment. No material separate purchase and sale transactions of property, plant and equipment took place. Over three quarters of 2016 the Śnieżka Group purchased property, plant and equipment for the total amount of PLN 17,912 thousand, comprising investments in buildings and structures, purchase of machines and equipment, means of transport and other fixed assets. 9. Information on material liabilities due to purchase of property, plant and equipment. There are no material liabilities due to purchase of property, plant and equipment. 10. Information on material settlements due to court proceedings. There are no material settlements related to court proceedings. 11. Adjustments of errors from previous periods. None. 12. Information on changes in economic situation and conditions for pursuing business activity, which have a material impact on fair value of financial assets and liabilities of the company, notwithstanding the fact if these assets and liabilities are disclosed at their fair value or in adjusted purchase price (amortised cost). In the third quarter of 2016 the economic situation in Ukraine was still unsure in connection with a possible devaluation of the hryvnia and a political and economic crisis. The economic situation in Belarus was also difficult due to a decrease in the purchasing power of consumers and necessary increases in prices due to the devaluation of the Belarusian ruble over the past years. 13. Information on failure to repay a loan or a credit or infringement of material terms and conditions of a loan or credit agreement, in relation to which no correction measures were taken until the end of the reporting period. In the third quarter of 2016 there were no failures to repay a loan or a borrowing or infringements of material terms and conditions of a loan or borrowing agreement in relation to a parent company and subsidiaries of the Śnieżka Capital Group. 14. Information on the conclusion by the Issuer or its subsidiary of one or more transactions with related parties, if they are material (individually or jointly) and if they are not arm's-length transactions, plus the specification of their amount; information on individual transactions may be grouped by type, except when separate information on individual transactions is necessary to understand their impact on the Issuer's assets, financial position and profit/loss, including the following: p. 17

a) information on the entity with which the transaction was concluded, b) information on relations of the issuer or its subsidiary with a party to the transaction, c) information on the object of the transaction, d) any material terms and conditions of the transaction, with a particular emphasis on the financial terms and indication of specific terms agreed by the parties, which are characteristic for this agreement, in particular terms differing from those that are generally applied to such agreements, e) any other information on these transactions if they are required for understanding the issuer's property, financial position and financial performance, f) any changes in the transactions with related parties that were described in the last annual statements, if such changes could have a significant impact on the Issuer's assets, financial position and profit/loss; In the third quarter of 2016, the issuer or its subsidiaries did not enter into any transactions with related entities, which would be material and were not arm's length transactions. Transactions between related parties are arm s-length transactions, i.e. their terms do not differ from transactions concluded on market terms. 15. In case of financial instruments measured at fair value information on change of the way (method) of its determination. There were no changes in the way the value of financial instruments measured at fair value is determined. 16. Information on change in classification of financial assets due to change of objectives or use of these assets. There were no changes in the classification of financial assets due to change of objectives or use of these assets. 17. Information on issue, purchase and repayment of non-equity and capital securities. In the third quarter of 2016 no issue, redemption or repayment of non-equity and equity securities took place. 18. Information on paid (or declared) dividend, total and per share, divided into ordinary shares and preference shares. The dividend from the profit for the year 2015 in the amount of PLN 3.15 per share, i.e. a total amount of PLN 39,746 thousand, was paid on 1 July 2016. In the company the same amount of dividend per share is allocated for preference and ordinary shares. 19. Identification of events occurring after the date of the quarterly condensed financial statements, not included in these statements, and likely to significantly affect the future financial performance of the issuer. After the date for which the financial data for the third quarter of 2016 was compiled, no events occurred that could have a negative considerable impact on the issuer s future consolidated results. 20. Information on changes in contingent liabilities or contingent assets that have occurred since the end of the last financial year. p. 18

As of 30 September 2016, the Śnieżka Capital Group did not have any contingent liabilities or contingent assets. As compared to 31 December 2015, the balance of contingent liabilities and assets did not change. 21. Any other information which may significantly affect property, financial position and financial performance of the issuer. None. 22. Segment reporting. In order to give a more complete view of its performance over three quarters of 2016, the issuer presents the business operations of the Group broken down by geographical segments and segments according to criteria of products and services: Segment performance in 3 quarters of 2016: 9-month period ended on 30 September 2016 (not audited) Continuing operations Discontinued operations Exclusions Total activity Poland Ukraine Belarus Moldova Russia Other Total Segment revenue after exclusions 376 501 57 337 23 153 6 756 8 982 9 081 481 810 The Group did 481 810 Sales to external customers 376 501 57 337 23 153 6 756 8 982 9 081 481 810 not discontinue - 481 810 its operations Sales between segments (exclusions) 12 653 20 186 3 726 - - - 36 565 (36 565) - in the Total segment revenue without exclusions 389 154 77 523 26 879 6 756 8 982 9 081 518 375 presented 518 375 Segment costs after exclusions 301 997 41 019 15 566 4 380 5 406 7 269 375 637 period 375 637 Results after exclusions 74 504 16 318 7 587 2 376 3 576 1 812 106 173 106 173 Non-assigned costs 44 935 Other operating revenue 809 Other operating costs 2 653 Net loss on discontinued operations - Profit (loss) on operating activities 59 394 Financial revenue 542 Financial costs 2 095 Share in net profit (loss) of subordinates measured with the equity method 393 Profit (loss) before tax 58 234 income tax 9 201 Net profit (loss), of which for: 49 033 - shareholders of the parent company 48 149 - non-controlling shareholders 884 Sales structure in Śnieżka Group according to criteria of products and services in thousand PLN: Details 9 months of 2016 Decorative products 377 785 Construction chemistry products 56 629 Industrial products 5 826 Goods 32 596 Other revenues 3 653 Materials 5 321 Total sales 481 810 p. 19

Total assets of the operating segments did not change much compared to the segment assets disclosed in the statements for 2015. Segment performance in 3 quarters of 2015 9-month period ended on 30 September 2015 (not audited) Continuing operations Discontinued operations Poland Ukrain e Belarus Moldova Russia Other Total Exclusion s Total activity Segment revenue after exclusions 355 435 51 383 28 794 7 620 7 333 7 737 458 303 The Group did 458 303 Sales to external customers 355 435 51 383 28 794 7 620 7 333 7 737 458 303 not - 458 303 Sales between segments (exclusions) 12 623 18 471 2 944 - - - 34 038 discontinue its operations in (34 038) - Total segment revenue without exclusions 368 058 69 854 31 738 7 620 7 333 7 737 492 340 the presented period 492 340 Segment expenses after exclusions 268 546 37 495 17 706 4 817 4 572 5 672 338 809 338 809 Results after exclusions 86 888 13 888 11 088 2 803 2 761 2 065 119 494 119 494 Non-assigned costs 56 356 Other operating revenue 1 095 Other operating costs 2 822 Net loss on discontinued operations - Profit (loss) on operating activities 61 411 Financial revenue 375 Segment revenue after exclusions 9 104 Share in net profit (loss) of subordinates measured with the equity method 240 Loss on hyperinflation - Profit (loss) before tax 52 922 Income tax 8 042 Net profit (loss), of which for: 44 880 - shareholders of the parent company 44 241 - non-controlling shareholders 639 Sales structure in Śnieżka Group according to criteria of products and services in thousand PLN: Details 9 months of 2015 Decorative products 355 447 Construction chemistry products 56 058 Industrial products 6 267 Goods 32 891 Other revenues 2 778 Materials 4 862 Total sales 458 303 The above financials have been calculated and presented in line with International Financial Reporting Standard 8, i.e. income and costs have been allocated to geographical segments, excluding income relative to interest or dividends received from other segments, including associated companies as appropriate. The gross result of the segment is the difference between segment income and segment costs before adjustments for minority interest. p. 20