Notice on the intention to recognise provisions and write-offs in the annual financial statements for 2017

Current Reports - 21/03/2018

The Management Board of Orzeł Biały S.A. (“The Company”) announces that it decided on 21.03.2018, pursuant to Resolution No. 23/2018, to include provisions and write-offs in the Company’s separate financial statements and in the consolidated financial statements of Orzeł Biały Group which, including the revaluation of investment property, will have a significant impact on the 2017 financial result.

In the course of the data aggregation process for the twelve months ended December 31, 2017, there were reasons which arose for allowances for:

  1. provisions for land clean-up costs by the amount of approx. PLN 0.4 million of created reserves net (i.e. the value of the surplus of created provisions over their reversal) will be charged to the operating result;
  2. provisions for other liabilities by the amount of approx. PLN 0.7 million of provisions created net (i.e. the value of the surplus of created provisions over their reversal) will be charged to the operating result;
  3. a write-down revaluating inventories by the amount of approx. PLN 1 million of reversed write-offs net (i.e. the value of the excess of provision reversed over provisions created) will positively affect the operating result;
  4. write-down of bad debt provision by the amount of approx. PLN 1.1 million of net write-downs (i.e. the value of the surplus of created provisions over their reversal) will be charged to the operating result;

In addition, there were premises for revaluation of investment property by approximately PLN 1.1 million. The one-off accounting operation regarding the reduction of investment property value will reduce the separate and consolidated financial result of Orzeł Biały and Orzeł Biały Group, respectively, at the operating level.

The Company estimates that, after tax, the operations described above will reduce the net financial result of the Issuer and of Orzeł Biały Group by approximately PLN 2 million.

The Company reserves that the separate financial report of Orzeł Biały S.A. and the consolidated financial statement of Orzeł Biały Group are being reviewed by a certified auditor and, therefore, the above amounts may change. The final results will be presented in the annual report for 2017, which will be published on April 10, 2018.

Legal basis: Art. 17, Act 1 MAR

14.19

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