for the Shareholder Meeting and Supervisory Board of Fabryka Farb i Lakierów Śnieżka S.A.

Audit report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of the Fabryka Farb i Lakierów Śnieżka S.A. Group (hereinafter referred to as the “Group”) where the parent company is Fabryka Farb i Lakierów Śnieżka S.A. with its registered office in Warsaw at Aleja Jana Pawła II 23, which comprise the consolidated statement of financial position as of 31 December 2016, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows for the financial year from 1 January to 31 December 2016 and the related notes on the adopted accounting policies and other explanatory information.

Responsibility of Management Board and Supervisory Board members

The Parent Company’s Management Board is responsible for the preparation on the basis of properly kept consolidation documentation and fair presentation of the consolidated financial statements in accordance with the International Financial Reporting Standards approved by the European Union and other applicable provisions of law. The Parent Company’s Management Board is responsible for internal control as management determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

The Parent Company’s Management Board and Supervisory Board members are obliged to ensure that the consolidated financial statements satisfy the requirements set forth in the Accounting Act of 29 September 1994 (“Accounting Act”, Journal of Laws of 2016, Item 1047, as amended).

Auditor’s responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with provisions of Chapter 7 of the Accounting Act and in accordance with the International Auditing Standards adopted as the Polish Financial Auditing Standards by resolution of 10 February 2015 of the Polish Council of Statutory Auditors. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the accompanying consolidated financial statements:
a. present fairly and clearly the financial position of the Group as at 31 December 2016, its financial performance and its cash flows for the financial year from 1 January to 31 December 2016 in accordance with the International Accounting Standards, International Financial Reporting Standards approved by the European Union and the adopted accounting policies;
b. are consistent in their form and content with the provisions of law applicable to the Group, including the requirements of the Finance Minister’s Regulation of 19 February 2009 on the Current and Periodic Information Transmitted by Securities Issuers and the Conditions for Recognizing the Information Required by the Regulations of a Non-Member State as Equivalent (“Regulation” – Journal of Laws of 2014, Item 133, as amended);
c. have been prepared on the basis of correctly kept consolidation documentation.

Report on other requirements of the law and regulations

Opinion on the activity report
Our opinion on the audit of the consolidated financial statements does not cover the Group’s activity report.
The Parent Company’s Management Board is responsible for the preparation of an activity report in accordance with the Accounting Act and the Regulation. The Management Board and Supervisory Board members are additionally obligated to ensure that the activity report satisfies the requirements of the Accounting Act.
In conducting the audit of the consolidated financial statements, we were obligated to familiarize ourselves with the activity report and assess whether the information found in the activity report gives consideration to provisions of Article 49 of the Accounting Act and the Regulation and is consistent with the information in the attached consolidated financial statements. We were also obligated to assess, based on our knowledge of the Group and its environment acquired during the audit of the consolidated financial statements, whether the activity report is free from material misstatements.
We believe that information included in the Group’s activity report for the financial year from 1 January to 31 December 2016 gives consideration to provisions of Article 49 of the Accounting Act and the Regulation and is consistent with the information included in the audited consolidated financial statements.
Additionally, in light of knowledge about the Group and its environment obtained during our audit, we have found no material misstatements in the Group’s activity report.
In connection with our audit of the consolidated financial statements, we were also obligated to familiarize ourselves with the Group’s representation on the application of corporate governance principles, which constitutes a separate part of the activity report. We believe that the Group’s representation contained the information within the scope required by the Regulation and the

information identified in the Regulation is compliant with the applicable regulations and is consistent with information in the consolidated financial statements.
Person conducting the audit on behalf of PricewaterhouseCoopers Sp. z o.o., a company entered in the list of audit firms authorized to audit financial statements under number 144: