Mabion S A : Condensed interim financial statements for the period of 3 months ended 31 March 2024

Mabion S.A. Condensed interim financial statements for the period of 3 months ended 31 March 2024

MABION S.A. Condensed interim financial statements

for the period of 3 months ended 31 March 2024

Konstantynów Łódzki, 14 May 2024

The accompanying translation has not been reclassified or adjusted in any way to conform to the accounting principles generally accepted in countries other than Poland. In case of any discrepancies between Polish version and English translation, Polish version shall prevail.

Translation from the original Polish version.

Mabion S.A. Condensed interim financial statements for the period of 3 months ended 31 March 2024

CONDENSED INTERIM STATEMENT

OF COMPREHENSIVE INCOME

			1 January 2024	1 January 2023
	in PLN thousand, unless otherwise indicated	Notes	- 31 March 2024	- 31 March 2023
			(not audited)	(not audited)
	Income from sales	7	32,222	38,156
	Income from settling the purchase of materials	7	859	228
	Lease income	7	893	1,161
	Total income	7	33,974	39,545
	Cost of sales	7	(6,665)	(8,858)
	Own cost of purchased materials	7	(883)	(228)
	Total costs	7	(7,548)	(9,087)
	Gross profit on sales		26,426	30,459
	Research and development costs	9	(490)	(2,090)
	General administration costs	8	(12,024)	(10,424)
	Other operating income	10	116	164
	Other operating costs	10	(491)	(73)
	Operating profit		13,537	18,036
	Financial income	11	5,455	219
	Financial costs	11	(1,452)	(1,785)
	Gross profit		17,541	16,470
	Income tax		-	-
	NET PROFIT		17,541	16,470
	Other comprehensive income		-	-
	TOTAL COMPREHENSIVE INCOME		17,541	16,470
	Basic and diluted profit per one share (in PLN per 1 share)		1.06	1.02

The explanatory notes presented on pages 5 to 20 are an integral part of these condensed interim financial statements.

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Mabion S.A. Condensed interim financial statements for the period of 3 months ended 31 March 2024

CONDENSED INTERIM STATEMENT

OF FINANCIAL POSITION

in PLN thousand	Notes	31 March 2024	31 December	2023	31 March 2023
(not audited)	(not audited)
Intangible assets		436	493		684
Property, plant and equipment	12	117,199	112,358		89,104
Long-term receivables	14	273	268		225
Deferred tax asset		4,685	4,685		13,310
Total fixed assets		122,593	117,804		103,323
Inventories	13	7,283	6,843		8,200
Trade receivables	14	27,485	25,518		7,856
Other receivables	14	4,841	7,141		1,532
Prepayments and accrued income	15	2,953	3,132		8,217
Cash and cash equivalents		48,763	47,817		69,465
Total current assets		91,325	90,450		95,271
TOTAL ASSETS		213,918	208,254		198,594
Share capital	16	1,616	1,616		1,616
Share premium		237,443	237,443		237,443
Supplementary capital		23,192	23,192		-
Accumulated losses		(126,934)	(144,474)		(146,082)
Total equity		135,317	117,776		92,977
Deferred income from grants	17	31,746	31,802		31,115
Loans and borrowings	20	186	225		335
Long-term liabilities	22	406	406		-
Lease	20	2,653	2,723		3,603
Total long-term liabilities		34,991	35,156		35,053
Repayable advances on distribution rights	18	1,673	1,691		1,819
Trade liabilities	22	4,394	7,941		9,694
Other liabilities	22	4,752	3,439		9,017
Accrued and prepaid costs	23	7,980	7,627		5,513
Loans and borrowings	20	19,747	31,303		132
Deferred income from grants	17	225	224		228
Other deferred income	17	49	56		64
Liabilities arising from the implementation of agreements	18	3,173	1,465		41,320
Lease prepayments	18	73	34		945
Lease	21	1,544	1,543		1,832
Total short-term liabilities		43,610	55,323		70,564
TOTAL LIABILITIES		78,601	90,478		105,617
TOTAL LIABILITIES AND EQUITY		213,918	208,254		198,594

The explanatory notes presented on pages 5 to 20 are an integral part of these condensed interim financial statements.

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Mabion S.A. Condensed interim financial statements for the period of 3 months ended 31 March 2024

CONDENSED INTERIM

CASH FLOW STATEMENT

			1.01.2024	1.01.2023-
	in PLN thousand	Notes	- 31.03.2024	31.03.2023
			(not audited)	(not audited)
	Net profit		17,541	16,470
	Adjustments for items:
	Depreciation and amortisation	8	1,962	1,790
	Interest income	11	(274)	(193)
	Interest costs	11	1,369	201
	Income from grants	10	(56)	(57)
	Realised foreign exchange differences		191	-
	Loss (profit) from investing activities		(44)	-
	Loan measurement		274	-
	Lease payment measurement		(602)	(629)
	Unrealised loan interest		1,920	-
	Change in assets and liabilities:
	Change in inventories	13	(440)	277
	Change in trade and other receivables	14	332	4,879
	Change in prepayments and accrued income	15	179	(2,418)
	Change in trade and other liabilities	22	2,061	(3,193)
	Change in deferred income	17	(6)	(5)
	Change in repayable advances on distribution rights	19	(18)	(5)
	Change in other financial liabilities		723	442
	Change in capital and reserves		-	-
	Cash flows from operating activities		25,112	17,559
	Proceeds from grants		-	-
	Interest received	11	274	193
	Interest paid	11	(1,369)	(201)
	Net cash flows from operating activities		24,017	17,551
	Disposal of property, plant and equipment		44	-
	Acquisition of property, plant and equipment and intangible assets	12	(8,687)	(1,120)
	Net cash flows from investing activities		(8,643)	(1,120)
	Proceeds from borrowings		-	-
	Repayment of borrowings	20	(35)	(47)
	Repayment of bank loans		(13,176)	-
	Interest paid		(768)	-
	Repayment of lease principal	21	(449)	(557)
	Net cash flows from financing activities		(14,428)	(604)
	Net increase/(decrease) in cash and cash equivalents		947	15,825
	Cash and cash equivalents - opening balance		47,817	53,638
	Cash and cash equivalents - closing balance		48,763	69,465

The explanatory notes presented on pages 5 to 20 are an integral part of these condensed interim financial statements.

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Mabion S.A. Condensed interim financial statements for the period of 3 months ended 31 March 2024

CONDENSED INTERIM

STATEMENT OF CHANGES IN EQUITY

		Issued but	Share	Supplementary	Cumulative
in PLN thousand	Share capital	unregistered	Total equity
premium	capital	losses
		share capital
As at 1 January 2023	1,616	-	237,443	-	(162,552)	76,506
Net profit / total comprehensive income	-	-	-	-	41,269	41,269
Measurement of the incentive scheme based on	-	-	-	-	-	-
shares
Transfer of result to the share capital	-	-	-	23,192	(23,192)	-
Closure of the share-based incentive scheme	-	-	-	-	-	-
As at 31 December 2023	1,616	0	237,443	23,192	(144,475)	117,776
As at 1 January 2024	1,616	0	237,443	23,192	(144,475)	117,776
Net profit / total comprehensive income	-	-	-	-	17,541	17,541
As at 31 March 2024 (not audited)	1,616	0	237,443	23,192	(126,934)	135,316

The explanatory notes presented on pages 5 to 20 are an integral part of these condensed interim financial statements.

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Mabion S.A. Condensed interim financial statements for the period of 3 months ended 31 March 2024

ADDITIONAL INFORMATION

1. Company

Mabion S.A. (Mabion or Company) was established on 30 May 2007 as a limited liability company. The legal form of the Company changed on 29 October 2009 as a result of the transformation of the limited liability company into a joint-stock company established in accordance with the law of the Republic of Poland. Currently, Mabion is entered on the Register of Entrepreneurs of the National Court Register kept by the District Court for Łódź-Śródmieście in Łódź, 20th Commercial Division of the National Court Register with KRS number 0000340462. The Company was assigned tax identification number NIP 7752561383 and statistical identification number REGON 100343056. The Company's registered office is Konstantynów Łódzki, ul. gen. Mariana Langiewicza 60.

The Company's shares are listed on the Warsaw Stock Exchange.

The most important accounting policies that have been applied in these financial statements are presented in Note 4. The same policies were applied in each financial year, unless explicitly stated otherwise.

The interim financial statements have been drawn up in accordance with the historical cost principle, except for certain assets and liabilities and equity measured at fair value pursuant to the IFRS.

Significant accounting estimates and judgments of the management are presented in Note 4.

These financial statements were authorised for publication by the Company's Management Board on 14 May 2024.

Mabion is a Polish biopharmaceutical company that provides services as a contract development and manufacturing organisation (CDMO) in the scope of development, analytics, and manufacturing of biologic medicines.

In line with the strategy adopted in 2023, the Company's Management Board intends to continue the Company's development towards a fully CDMO with a biological profile. As a target, the Company will provide the full range of services typical of an integrated CDMO to clients who need support at various stages of their product development and commercialisation (from early-stage projects to commercial-scale manufacturing).

2. Basis of preparation

2.1. Basis of preparation

These condensed interim financial statements of Mabion S.A. for the three months ended 31 March 2024 have been drawn up in accordance with International Accounting Standard 34 "Interim Financial Reporting" as endorsed by the European Union ("IAS 34"). These statements are also drawn up in accordance with IAS 34 as issued by the International Accounting Standards Board due to the fact that there are no differences between the IFRS as adopted in the European Union and the IFRS as issued by the IASB insofar as they apply to the Company.

The condensed interim financial statements do not include all the information required in the full financial statements compliant with IFRS as adopted for application in the European Union ("IFRS") and should be read in conjunction with the audited financial statements of the Company for the financial year ended 31 December 2023, published on 16 April 2024.

These interim financial statements of Mabion S.A. for the period of 3 months ended 31 March 2024 have been prepared in accordance with the going concern principle (further information on the Company's assumptions concerning its ability to continue as a going concern is provided in Note 3).

2.2. Statement of compliance

These financial statements have been drawn up in accordance with the International Financial Reporting Standards ("IFRS") approved by the EU.

The scope of the interim financial statements is consistent with the Minister of Finance Regulation of 29 March 2018 on current and periodic reporting by issuers of securities and the rules of equal treatment of the information required by the laws of non- member states (consolidated text: Polish Journal of Laws 2018, item 757, "Regulation") and covers the quarterly reporting period from 1 January to 31 March 2024 and the comparative period from 1 January to 31 March 2023 for the profit and loss account and the statement of comprehensive income, the statement of changes in equity and the statement of cash flows, respectively, and the balance-sheet data as at 31 March 2024 and comparative data as at 31 December 2023 and 31 March 2023.

3. Going concern principle

In the current reporting period, the Company continued its work in the following areas:

• operating activities focusing was mainly on the implementation of its contract manufacturing Master Contract Manufacturing Agreement (Manufacturing Agreement or MCMA) with Novavax Inc. under which it manufactured or provided manufacturing readiness, in compliance with GMP (Good Manufacturing Practice) standard, for Novavax's COVID-19 vaccine antigen under the name of Nuvaxovid®,
• Intensification of sales activities to acquire new contracts and to continue the activities to position the Company as a fully integrated actor on the CDMO market, by expanding the Company's portfolio of competences and services,

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Mabion S.A. Condensed interim financial statements for the period of 3 months ended 31 March 2024

• development of the Company leading to increased competitiveness and attractiveness as a development and manufacturing partner with regard to biopharmaceutical products. Owing to these activities, the Company has acquired the ability to implement projects at various stages of development and at the commercial production stage.

Pursuant to the Company's Strategy for 2023-2027, the Management Board has started to transform the Company into a fully integrated CDMO, whereas the growth dynamics will mainly depend on the available new production and development capacity that the Company has developed or plans to develop, and on the acquisition of new clients and new contracts.

The Company is planning to finance its operating and investing activities with proceeds from sources such as the implementation of contracts and orders in the area of the Company's core business, i.e. CDMO, and also debt financing, grants, subsidies, targeted funds for new projects.

As at the date of these financial statements, the Company holds letters of support received from the key shareholders (Twiti Investments Limited, Glatton Sp. z o.o, Polfarmex S.A.), whose contents indicate that these shareholders are willing and able to continue their financial support for the Company's day-to-day operations in the near future covering a period of at least another 12 months from the date of signing of these financial statements, should the Company's financial situation so require, which, according to the Management Board's current knowledge, will not be the case.

The Company is taking all required steps to ensure an adequate level of income using the Company's ability to provide services and carry out manufacturing processes beyond the period of guaranteed income, i.e. beyond May 2024. The analyses conducted by the Company, which conservatively assume no income from new agreements (apart from that guaranteed from the agreement with Novavax) and take into account the necessary fixed costs of the Company's operation as well as the required capital expenditure, show that the Company is able to operate for the next 12 months without additional funds from external sources.

In the period of 3 months of 2024, the Company received payments under the agreement amounting to USD 9,693 thousand. After the balance-sheet date, the Company received further payments under agreements in progress in the amount of USD 3,540 thousand. Overall, payments received since the commencement of cooperation with Novavax up to the date of the financial statements amounted to USD 88,225 thousand and EUR 270 thousand. As at the date of these financial statements, there are no overdue receivables from Novavax.

In the Management Board's opinion, the activities aimed at further development of the cooperation with Novavax, obtaining new agreements as part of the CDMO service offer, acquiring debt financing, taking advantage of the funds available as part of the EU projects as well as the declared support of the shareholders should ensure an appropriate level of financing necessary for the Company to carry out its current activities and

increase its capacity to provide services in the medium- and long-term time horizon.

Following the analysis, no significant uncertainties have been identified as at the date of the financial statements that may cast serious doubt on the Company's ability to continue as a going concern. It cannot be excluded, however, that such doubts will arise in the future if the Company fails to achieve the desired results of its measures. Such a situation may occur because of a deterioration of the financial situation of the Company's current counterparty, Novavax, failure to obtain new agreements, or in the case of restriction of the Company's ability to obtain debt financing or funds from the issue of capital.

These financial statements have been drawn up in accordance with the going concern principle, which provides that the Company will continue to operate in the foreseeable future - not shorter than 12 months as of the date of drawing up the financial statements. Therefore, no adjustments have been made to the financial statements which might be necessary should the going concern assumption be unjustified.

4. Key accounting principles

4.1. Functional and presentation currency

The functional and presentation currency of the Company is Polish zloty. The financial statements are presented in thousands of Polish zloty, rounded to the nearest whole thousand, unless indicated otherwise.

Transactions denominated in other currencies than PLN are converted at initial recognition into PLN at the exchange rate applicable at the transaction date.

As at the balance-sheet date:

• cash items are converted using the closing rate, i.e. the average rate set for the currency in question by the National Bank of Poland at that date,
• non-cashitems measured at historical cost in a foreign currency are converted using the exchange rate at the date of the original transaction,
• non-cashitems measured at fair value in a foreign currency are converted using the exchange rate at the date on which the fair value was determined.

Foreign exchange gains and losses on the settlement of transactions in foreign currencies, as well as those resulting from the periodic conversion of cash assets and liabilities, are recognised in the financial result.

4.2. Standards applied for the first time

The material accounting principles applied by the Company in these interim financial statements were consistent with those described in the annual financial statements for 2023, except for new or revised standards and interpretations effective for annual

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Mabion S.A. Condensed interim financial statements for the period of 3 months ended 31 March 2024

periods beginning on or after 1 January 2024. New standards or amendments effective as of 1 January 2024 are as follows:

• Amendments to IFRS 16 Leases - Sale and leaseback obligations
• Amendments to IAS 1: Presentation of financial statements: Division of liabilities into short-term and long-term, Long- term liabilities with covenants.

The revised standards and interpretations which apply for the first time in 2024, have no material impact on these financial statements of the Company.

4.3. Professional judgement and estimation

Drawing up interim financial statements in accordance with IFRS involves estimates and assumptions that affect the amounts reported therein. While these assumptions and estimates are based on the best knowledge of the Company's management regarding current activities and events, the actual results may differ from those projected.

Below, fundamental assumptions concerning the future and other key sources of uncertainty as at the balance-sheet date, involving a significant risk of a material adjustment to the carrying amounts of assets and liabilities in the subsequent reporting period, are discussed. The Company has made assumptions and estimates regarding the future on the basis of its knowledge during the preparation of the separate financial statements. The assumptions and estimates made are subject to change as a result of future events due to market changes or changes beyond the Company's control. Such changes are reflected in the estimates or assumptions at the time of their occurrence.

4.3.1. Recognition of lease under the applicable agreement with Novavax

The existing agreement with Novavax has been identified as containing a lease and is accordingly recognised in the financial statements considering the fulfilment of the following conditions:

• There are identified assets that are used by the Company to manufacture for Novavax
• Novavax has assessed whether the Company's production facility is ready for contract manufacturing, and therefore the existing manufacturing assets have been approved by the counterparty.
• The equipment additionally purchased by the Company to implement the agreement had to be approved by Novavax.
• The Company does not hold any material right to substitute fixed assets earmarked for the implementation of an agreement with the counterparty, because it would not economically

benefit from exercising the right to substitute the asset (i.e. the economic benefits of substituting the asset would exceed the costs of substituting it). Moreover, in any case the replacement of the asset requires consent from the counterparty, so in reality the Company does not have a rationale or right to replace it.

• The premises of the factory building where manufacturing takes place is a physically separate part of the whole building and therefore also meets the criteria of an identified asset.
• Novavax has the right to derive substantially all of the economic benefits from the use of the identified asset over its useful life. The Company is bound by contractual restrictions on the use of fixed assets intended for implementing the contract manufacturing agreement for other purposes (including manufacturing for third parties or for the Company's own needs) without prior written consent of the counterparty. Novavax has the right to derive all of the economic benefits from the use of the identified assets over its useful life.
• Pursuant to the agreement in force, Novavax has the right to direct the use of the identified asset throughout its useful life by commissioning the production (i.e. it determines if and when these assets are used for production and determines the quantity of production).

For the CDMO contract product manufacturing agreements in place, the Company has accounted for the lease elements of the contract manufacturing agreements as operating leases. This is because the majority of production assets:

1. has an alternative use and the Company plans and has the ability to utilise it after completion of the agreement;
2. the lease term does not cover most of the economic useful life of the majority of the underlying assets;
3. the ownership of the majority of production assets is not transferred to the counterparty at the end of lease;
4. the contracting party does not have a possibility to purchase those assets;
5. the current amount of lease payments is materially lower than the fair value of the fixed assets provided by the Company. Moreover, fixed assets that are owned by the Company and used for contract manufacturing constitute a single lease, representing closely interrelated and interdependent manufacturing assets.

It was assumed that the lease period was the period of unconditional implementation of the contractual manufacturing agreement relating to the active substance. Termination of the agreement in this period involves substantial, wide-ranging financial consequences for the parties, which makes it reasonably certain that the agreement will not be terminated early.

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Mabion S.A. Condensed interim financial statements for the period of 3 months ended 31 March 2024

The fee for the lease under the agreement with Novavax was calculated on the basis of relative unit sales prices. The unit sales prices were determined on the basis of costs and the market margin, i.e. the amount of depreciation costs and the expected market margin for renting this type of fixed assets.

4.3.2. Income recognition estimates and classification of inventories under the agreement with Novavax

Income from contractual manufacturing services relating to active substances of medicinal products is recognised by the Company over time based on the progress of the service. The Company has selected the progress measurement method as in its opinion it best represents the entity's performance in providing the service.

The input-based method of measuring progress reflects the Company's performance to date in relation to the complete fulfilment of the performance obligation. Under the input-based method, the Company has excluded the effects of any inputs that, in accordance with the objective of measuring progress, do not reflect the Company's results in transferring control of the goods or services to the customer. The progress measure adjustment was taken into account in the agreement value estimation model with the assumption that the cost incurred is not commensurate with the entity's progress in fulfilling its performance obligation.

The Company has analysed whether in case of early termination for reasons other than non-performance it is entitled to receive a payment that at least compensates the Company for the performance to date.

Following the input-based method, raw materials purchased by the Company are recognised in the profit and loss account immediately upon purchase rather than when actually used in production. Consequently, the Company does not recognise purchases of raw materials acquired for the purpose of contract manufacturing in the balance-sheet under inventories. As regards the cost of raw material used, income is recognised up to the cost of such raw materials if all of the following criteria are met, i.e.:

• the raw material is not separate (i.e. a material service is needed for integration of the raw material with the manufacturing service provided by the Company);
• The contracting party acquires control of raw materials in advance of receiving the services related to the raw materials;
• the cost of the raw material transferred is significant in relation to the total expected cost of complete fulfilment of the performance obligation;
• The Company procures the raw material from a third party and is not significantly involved in the design and manufacture of the raw material.

Raw materials purchased by the Company for the purposes of contract manufacturing are immediately recognised in the profit and loss account as cost of sales because:

• the raw materials have no alternative use (i.e. the Company does not have the right to use the raw materials for purposes other than contract manufacturing, and other circumstances also indicate that control over the raw materials is transferred to the contracting party by the Company);
• contract manufacturing of an active substance meets the criteria for income recognition over time, thus costs incurred in relation to the fulfilment of the Company's performance obligation are recognised in the profit and loss account when incurred, including the raw material purchased specifically for the purpose of the agreement.

In the statement of financial position as at 31 March 2024, the Company did not capitalise the expenditure on the purchase of raw materials, but recognised this expenditure as a cost of meeting the performance obligation, due to the nature of the purchase and the nature of the agreement referred to above.

Income recognised using the input-based method reflects:

• the profit margin earned by the Company from the onset of manufacturing in line with the agreement in force and the incurring of manufacturing costs other than just the use of raw materials or
• activities conducted to confirm the effectiveness of the transfer of technology.

4.3.3. Deferred tax assets relating to income tax relief

The Company has built a fully-equippedScientific-Industrial Complex in the Łódź Special Economic Zone (LSEZ). Pursuant to the Act on Special Economic Zones, business activities carried out within a special economic zone under a permit are exempt from corporate income tax up to the limit resulting from the available public aid and incurred eligible costs. The basis for the exemption is the amount of incurred eligible costs, which must not exceed the maximum value specified in the permit granted by the LSEZ Board. Mabion is entitled to the exemption until

31 December 2026, the last year of operation of the LSEZ under applicable law. To retain the right to the exemption, the Company had to meet the investment sustainability criterion and the employment volume criterion until 31 December 2021. The investments covered by the permits issued in 2010 and 2012 were completed, and the Company's fulfilment of the conditions entitling it to the tax relief was positively verified during audits conducted by the LSEZ.

Deferred income tax assets for operations in the Special Economic Zone are recognised at initial value in the amount of the expected consumption of the public assistance pool, which is reduced by the relief utilised in the tax year. In the statement of comprehensive

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Mabion S.A. Condensed interim financial statements for the period of 3 months ended 31 March 2024

income as at the balance-sheet date, the asset is recognised at the value of the expected remaining public assistance. The asset is measured on the basis of a financial projection of the planned consumption of the public assistance pool granted in the form of income tax exemption. The financial projection assumptions are reviewed at each balance-sheet date.

The Company has historically realised significant negative temporary differences, resulting mainly from ongoing research and development work that may reduce the income tax base in the future.

The Company has generated deductible tax losses from non-zone activities in the last 5 years.

4.3.4. Depreciation of property, plant and equipment

Depreciation rates are based on the expected useful life of property, plant and equipment. Each year, the Company revises the assumed useful lives using current estimates. Useful lives are determined with reference to the estimated periods during which the Company intends to derive future economic benefits from the use of the relevant assets. If any, the Company also takes into account past experience with similar assets as well as anticipated future events that may affect the useful life of assets, such as changes in technology.

4.3.5. Accounting of costs of research and development work

The Company does not recognise any intangible asset arising from research work (or as a result of the research phase of an in- house project). Expenditure on research (or on the research phase of an in-house project) is recognised as costs as it is incurred. The Company does not meet the criteria for capitalisation of incurred expenses and therefore development outlays, as well as research expenditure, are recognised as an expense in profit or loss the moment they are incurred.

5. Impact of new and amended standards and interpretations on the Company's financial statements

The following standards and interpretations have been issued by the International Accounting Standards Board or the International Financial Reporting Interpretation Committee, but are not yet effective:

• IFRS 18 Presentation and Disclosure in Financial Statements (issued on 9 April 2024) - not endorsed by the EU until the date of approval of these financial statements - effective for annual periods beginning on or after 1 January 2027;
• Amendments to IAS 21: Effects of Changes in Foreign
  Exchange Rates: Lack of Exchangeability (issued on 15 August 2023) - not endorsed by the EU until the date of approval of these financial statements - effective for annual periods beginning on or after 1 January 2025;
• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier finance arrangements (issued on 25 May 2023) - not endorsed by the EU until the date of approval of these financial statements - effective for annual periods beginning on or after 1 January 2024.

The effective dates result from the content of the standards announced by the International Financial Reporting Council. The application dates of the standards in the European Union may differ from the application dates resulting from the content of the standards and are announced at the time of endorsement for application by the European Union.

The Company has not chosen to early adopt any standard, interpretation, or amendment that has been published but is not yet effective.

The analysis of the impact of the aforementioned amendments on the financial statements is under way at the Company.

6. Seasonal nature of Company's operations

In the period covered by these financial statements, the Company conducted its business activities only in Poland. All assets of the Company are located in Poland. The results of operations are analysed by the Management Board, which is also the main body responsible for operational decision-making, at the Company level, and therefore no more than one operating segment has been defined.

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