Additional information to the consolidated "extended" quarterly report of the BIOTON S.A. Group for the third quarter 2019 1 ADDITIONAL INFORMATION TO THE CONSOLIDATED 'EXTENDED' QUARTERLY REPORT OF THE BIOTON S.A. GROUP FOR THE 3rd QUARTER 2019 Pursuant to §66 of the Regulation of the Minister of Finance of 29 March, 2018 on current and periodic information published by issuers of securities and conditions for recognizing as equivalent information required by the laws of a non-member state (Journal of Laws of 2018 item 757 as amended) BIOTON S.A. ("Company") provides the following information: 1. Rules adopted when preparing the report. Since 1 January, 2005, the BIOTON S.A. Capital Group (The " Group ") has been maintaining the books according to International Financial Reporting Standards (" IFRS "), in the version approved by the European Union and in the scope not regulated by the above standards in accordance with the requirements of the Accounting Act (Journal of Laws of 2019, item 351) and implementing regulations issued on its basis and in accordance with the requirements set out in the Regulation of the Minister of Finance of 29 March, 2018 on current and periodic information published by issuers of securities and conditions for recognizing as equivalent information required by the laws of a non-member state (Journal of Laws of 2018, item 757 as amended). The financial data included in the report cover the accounting period from 01 July 2019 to 30 September 2019 and cumulative data for the period from 1 January, 2019 to 30 September, 2019 and [as at?] 30 September, 2019, comparative data for the period from 1 July, 2018 to 30 September, 2018 and as at 30 September, 2018 and 31 December, 2018. The financial data presented for the accounting period from 1 January, 2019 to 30 September, 2019, and comparative data for the period from 1 January, 2018 to 30 September, 2018, was not audited by an independent auditor. The comparative financial data as at 31 December, 2018 was audited by an independent certified auditor. The financial statements of the Group are based on the historical cost principle, except for the following financial instruments at fair value through profit or loss. According to the assessment of the Management Board of BIOTON SA, the financial statement of the Group is based on the Group's principle of continuation of operations. The Group has or will have sufficient resources to conduct operational, investment, and development activities. In the 9-month period of 2019, the Capital Group recorded sales revenues worth PLN 147.9 million compared to PLN 180.1 million for the previous year (the decrease in revenues is related to the sale of shares in the SciGen Group in mid-2018). In addition, the Group recognized capitalized expenditure on operating profit before tax regarding a development project related to the implementation of insulin analogues included in the results of 2018. The decision by the Parent company to the change in the recognition of these expenditures was dictated by (i) the auditor's reservation with regard to the summary of the interim consolidated financial statements of the Capital Group as at 30 June, 2018 and (ii) the recommendation, received on 25 February, 2019, of the Polish Financial Supervision Authority ("PFSA") indicating the need for a change of recognition of capitalized expenditure on development projects in the income statement until biosimilar drug registration is obtained and (iii) the PFSA announcement regarding the possibility of recognizing assets arising from development works by issuers of securities applying IFRS of 5 March, 2019. The Parent Company, since receiving the recommendation from the PFSA, has conducted a number of consultations, analyses, correspondence exchanges, and meetings with the PFSA to explain in detail all the conditions and risks associated with compliance with the PFSA's recommendations. Ultimately, the Management Board of the Parent Company decided to change the recognition of capitalized expenditure to intangible assets related to an analogue project in the costs for the period. On 16 July, 2019, the Management Board concluded a contract with Yifan Pharmaceutical Co., Limited ("Yifan"), the subject of which is mutual cooperation of the parties in the field of active substances, insulin analogues, and the final drug product (in a finished form) from their production to commercialization ("Contract"). The contract provides financing for the whole project because all the costs associated with the purchase and installation of the equipment needed to complete each stage of the Contract, purchase of raw materials and auxiliary substances necessary to manufacture products in the scope included, and relevant orders will be covered by Yifan. If the result of the work proves that the commercial production line is adapted
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Additional information to the consolidated "extended" quarterly report of the BIOTON S.A. Group for the third quarter 2019
1
ADDITIONAL INFORMATION
TO THE CONSOLIDATED 'EXTENDED' QUARTERLY REPORT OF THE
BIOTON S.A. GROUP
FOR THE 3rd QUARTER 2019
Pursuant to §66 of the Regulation of the Minister of Finance of 29 March, 2018 on current and periodic information published
by issuers of securities and conditions for recognizing as equivalent information required by the laws of a non-member state
(Journal of Laws of 2018 item 757 as amended) BIOTON
S.A. ("Company") provides the following information:
1. Rules adopted when preparing the report.
Since 1 January, 2005, the BIOTON S.A. Capital Group (The " Group ") has been maintaining the books according to
International Financial Reporting Standards (" IFRS "), in the version approved by the European Union and in the scope not
regulated by the above standards in accordance with the requirements of the Accounting Act (Journal of Laws of 2019, item
351) and implementing regulations issued on its basis and in accordance with the requirements set out in the Regulation of
the Minister of Finance of 29 March, 2018 on current and periodic information published by issuers of securities and
conditions for recognizing as equivalent information required by the laws of a non-member state (Journal of Laws of 2018,
item 757 as amended).
The financial data included in the report cover the accounting period from 01 July 2019 to 30 September 2019 and cumulative
data for the period from 1 January, 2019 to 30 September, 2019 and [as at?] 30 September, 2019, comparative data for the
period from 1 July, 2018 to 30 September, 2018 and as at 30 September, 2018 and 31 December, 2018. The financial data
presented for the accounting period from 1 January, 2019 to 30 September, 2019, and comparative data for the period from
1 January, 2018 to 30 September, 2018, was not audited by an independent auditor. The comparative financial data as at 31
December, 2018 was audited by an independent certified auditor.
The financial statements of the Group are based on the historical cost principle, except for the following financial instruments
at fair value through profit or loss.
According to the assessment of the Management Board of BIOTON SA, the financial statement of the Group is based on the
Group's principle of continuation of operations. The Group has or will have sufficient resources to conduct operational,
investment, and development activities.
In the 9-month period of 2019, the Capital Group recorded sales revenues worth PLN 147.9 million compared to PLN 180.1
million for the previous year (the decrease in revenues is related to the sale of shares in the SciGen Group in mid-2018). In
addition, the Group recognized capitalized expenditure on operating profit before tax regarding a development project
related to the implementation of insulin analogues included in the results of 2018. The decision by the Parent company to
the change in the recognition of these expenditures was dictated by (i) the auditor's reservation with regard to the summary
of the interim consolidated financial statements of the Capital Group as at 30 June, 2018 and (ii) the recommendation,
received on 25 February, 2019, of the Polish Financial Supervision Authority ("PFSA") indicating the need for a change of
recognition of capitalized expenditure on development projects in the income statement until biosimilar drug registration is
obtained and (iii) the PFSA announcement regarding the possibility of recognizing assets arising from development works by
issuers of securities applying IFRS of 5 March, 2019. The Parent Company, since receiving the recommendation from the PFSA,
has conducted a number of consultations, analyses, correspondence exchanges, and meetings with the PFSA to explain in
detail all the conditions and risks associated with compliance with the PFSA's recommendations. Ultimately, the Management
Board of the Parent Company decided to change the recognition of capitalized expenditure to intangible assets related to an
analogue project in the costs for the period.
On 16 July, 2019, the Management Board concluded a contract with Yifan Pharmaceutical Co., Limited ("Yifan"), the subject
of which is mutual cooperation of the parties in the field of active substances, insulin analogues, and the final drug product
(in a finished form) from their production to commercialization ("Contract"). The contract provides financing for the whole
project because all the costs associated with the purchase and installation of the equipment needed to complete each stage
of the Contract, purchase of raw materials and auxiliary substances necessary to manufacture products in the scope included,
and relevant orders will be covered by Yifan. If the result of the work proves that the commercial production line is adapted
Additional information to the consolidated "extended" quarterly report of the BIOTON S.A. Group for the third quarter 2019
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to the production of the drug product in finished form, Bioton will be granted the right to use Yifan intellectual property as
well as the 25-year right to manufacture, distribute, market, offer, and sell the product on the basis of exclusivity in the
territory of Poland as well as being granted priority rights for use in European countries under its own brand. Bioton will also
act as a producer of products around the world.
At the same time, the balance sheet of the interim individual financial statement of BIOTON S.A. as at 30 June, 2019 prepared
by the Management Board and subject to review by the auditor showed the sum of:
(i) losses from previous years mainly caused by updating the value of non-financial assets of BIOTON S.A. made
in previous years (mainly non-cash), and
(ii) net loss from the current period, which was influenced by the revaluation of the investment in BIOLEK
estimated on the basis of the method of discounted possible future cash flows which, due to the situation in
the market for fodder additives in swine breeding around the world, and in particular the Chinese market,
resulted in the write-down amounting to PLN 173.5 million - see note 7.12 to the Individual financial statement
of BIOTON S.A.,
which together exceed the sum of (i) supplementary capital, (ii) reserve capital and (iii) one-third of the share capital, and in
view of the above, the Management Board, in accordance with applicable regulations, immediately convened an
extraordinary general meeting in order to adopt an appropriate resolution regarding the Company's going concern, which is
a formal requirement of the Code for commercial companies. At the same time, the Management Board notes that the value
of equity of Bioton S.A. as at 30 June, 2019 is over PLN 619.9 million. In the interim consolidated financial statement of Bioton
Capital Group, a write-down of the carrying amount of the license to sell products under an agreement with Beijing Smile
Feed Sci & Tech. Co., LTD to the utility value of the license has been included estimated on the basis of the method of
discounted possible future cash flows and the goodwill value of BIOLEK estimated based on the method of discounted possible
future cash flows which resulted in the total write-down amounted to PLN 100.7 million. It should be mentioned that the
amounts of the said write-downs are non-monetary and do not have an impact on the Group's cash flow statement. - see
note 5 to the interim individual financial statement of BIOTON S.A.
The Extraordinary General Meeting of Bioton S.A. adopted a resolution on further existence on 31 October, 2019.
The activities and plans of the Management Board are aimed at successive improvement of the operating results of the
Company and the Capital Group, mainly through actions aimed at developing export sales markets, reviewing the product
portfolio in the country and abroad, along with an assessment of their profitability at all levels of margins as well as the
introduction of process changes in organizational measures aimed at improving the efficiency of the working capital of the
Company and the Capital Group.
As at the date of publication, financial covenants as at the balance sheet date indicated in the loan agreement terms were
met or BIOTON S.A. received the approval of financial institutions for exceeding them, which resulted in the presentation of
values resulting from loan agreements in short-term liabilities; however, their repayment dates have not been changed and
include original dates resulting from loan agreements.
The measurement currency and the reporting currency of these financial statements is the Polish zloty, data is presented in
thousands of zlotys. The following principles were used to present selected financial data in EUR and the following PLN to
EUR conversion was applied:
• balance sheet data was converted according to the average NBP exchange rate announced for:
− 30.09.2019 with the exchange rate of EUR/PLN 4.3736,
− 30.06.2019 with the exchange rate of EUR/PLN 4.2520,
− 31.12.2018 with the exchange rate of EUR/PLN 4.3000,
− 30.09.2018 with the exchange rate of EUR/PLN 4.2714,
• data from the income statement and the cash flow statement has been converted at the standing exchange rate,
the arithmetic average of average rates for the day ending each month during this period as follows:
− for the third quarter of 2019 at the EUR/PLN exchange rate of 4.3497,
− for the third quarter of 2018 at the EUR/PLN exchange rate of 4.2815,
Additional information to the consolidated "extended" quarterly report of the BIOTON S.A. Group for the third quarter 2019
3
2. Information on revenues and results of the BIOTON S.A. Capital Group falling in individual industry segments.
Since 1 January, 2009, IFRS 8 "Operating Segments" has been in force, which replaced the existing IAS 14 "Segment reporting".
This standard requires disclosure of information about segments on the basis of the components of the entity which are
monitored by the managers in terms of making operational decisions. Operating segments are the components of the entity
for which separate financial information is available on a regular basis, regularly assessed by persons making key decisions
regarding resource allocation and assessing the Group's activities.
For management purposes, the Group has been divided into operating segments based on capital groups and companies
included in the Group. The following reporting segments have been separated:
• BIOTON S.A. and BIOTON MARKETING AGENCY Sp. z o.o. (together BIOTON PL),
• SciGen Ltd Capital Group (the group was sold in the first half of 2018),
• Biopartners Holdings AG Capital Group (companies forming the group are under bankruptcy or in liquidation),
• BIOLEK Sp. z o.o.,
• BIOTON International GmbH.
The accounting policies of operating segments are the same as the accounting policies of the Group.
The Company's Management Board mainly monitors the operating results of the segments separately in order to make
decisions on resource allocation, impact assessment, and performance results. The assessment of individual segments is
made to the level of profit / loss on operating activities.
The Group's financing (including financial costs and revenues) and income tax are monitored at the Group level and are not
allocated.
The Group reports segments in geographical terms. The most important countries from the point of view of the Group’s operations are presented below:
• Poland,
• Australia,
• Singapore,
• Uruguay,
• Malta,
• China,
• Thailand,
• South Korea,
• Vietnam.
Additional information to the consolidated "extended" quarterly report of the BIOTON S.A. Group for the third quarter 2019
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Operating segments - the Group
For the period from 01.01.2019 to 31.09.2019
in thousand PLN
BIOTON
PL
BIOLEK
BIOTON International
GmbH
Reconciliation items
Total
Revenues Sales to external customers 147 311 688 147 999
Sales between segments 38 722 2 537 (41 259) Total segment revenues 186 033 3 225 (41 259) 147 999
Result Segment result 76 247 (1 193) 75 054
Other operational revenues 2 532 5 2 537
Other operational costs 4 317 117 316 121 633
Selling expenses 46 503 114 46 617
General administration costs 26 658 260 638 27 556
* Upfront adjustments have been included in connection with the application of IFRS 15 from 01.01.2018
1 The general and administrative expenses of the SciGen Ltd Capital Group include depreciation of the fair value of licenses resulting from the acquisition of the
Group Capital SciGen Ltd by the Group.. For the period from 01.01.2018 to 30.09.2018, the value of depreciation of fair values of licenses in the SciGen Capital
Group Ltd amounted to PLN 2,817 thousand PLN.
Additional information to the consolidated "extended" quarterly report of the BIOTON S.A. Group for the third quarter 2019
The Management Board of BIOTON S.A. with its registered office in Warsaw (the "Company") informs that on 22.07.2019
notifications were received by the Company regarding disclosure of possessions from: UniApek S.A. with its registered office
in Warsaw, Ms Wenjun Cui, and Dongren Investment Co., Ltd. of Ningbo Free Trade Zone (published in the current report
(18/2019) of 22.07.2019).
The Management Board of BIOTON S.A. with its registered office in Warsaw (the "Company") informs that on 28.08.2019
notifications were received by the Company regarding disclosure of possessions from: Wenjun Cui, Dongren Singapore PTE.
LTD. and Dongren Investment Co., Ltd. of Ningbo Free Trade Zone (published in the current report (20/2019) from
28.08.2019).
The Management Board of BIOTON S.A. with its registered office in Warsaw (the "Company") informs that on 29.08.2019
notifications were received by the Company regarding disclosure of possessions from: Jia Wei Wang (published in the current
report (21/2019) from 29.08.2019).
2 Yifan Pharmaceutical Co., Ltd. is entitled indirectly through Dongren Singapore PTE LTD to 16,989,289 dematerialized shares of the Company representing 19.79% of the share capital of the Company. Yifan Pharmaceutical Co., Ltd. is the parent company of Dongren Singapore PTE LTD. 3 Yifan Pharmaceutical Co., Ltd. is indirectly vested through Perfect Trend Ventures Limited in 10,186,419 dematerialized shares of the Company representing 11.86% of the share capital of the Company. Yifan Pharmaceutical Co., Ltd. is the parent company of Perfect Trend Ventures Limited. 2 and 3 Yifan Pharmaceutical Co., Ltd. indirectly holds 27,175,708 shares of the Company, which constitute 31.65% of the share capital of the Company, and is entitled to 27.175.708 votes at the General Meetings of Shareholders of the Company, representing 31.65% of the total number of votes at the General Meetings of Shareholders of the Company. 4 Basolma Holding Ltd is the parent entity in relation to AIS Investment 2 Sp. z o.o.
5 Dongren Investment Co., Ltd. of Ningbo Free Trade Zone is vested indirectly through UniApek in 4,299,210 dematerialized shares of the Company, representing 5% of the share capital of the Company. Wenjun Cui is vested indirectly through Dongren Investment Co., Ltd. of Ningbo Free Trade Zone and UniApek S.A. in 4,293,210 dematerialized shares of the Company representing 5% of the share capital of the Company.
Additional information to the consolidated "extended" quarterly report of the BIOTON S.A. Group for the third quarter 2019
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The Management Board of BIOTON S.A. with its registered office in Warsaw (the "Company") informs that on 31.10.2019
notifications were received by the Company regarding disclosure of possessions from: Wenjun Cui, Yifan Pharmaceutical Co.,
Ltd and Dongren Investment Co., Ltd. of Ningbo Free Trade Zone (published in the current report (31/2019) of 31.10.2019)
The Management Board of BIOTON S.A. with its registered office in Warsaw (the "Company") informs that on 04.11.2019
notifications were received by the Company regarding disclosure of possessions from: Jia Wei Wang (published in the current
report (32/2019) from 04.11.2019).
24. Statement of the state of ownership of the Company's shares or rights to them by the managers and supervisors
of BIOTON S.A. as at the date of submitting the quarterly report, together with an indication of changes in
ownership during the period from submitting the last periodic report, separately for each person.
According to information available to BIOTON S.A., as at the date of submitting this report:
• supervisors of BIOTON S.A. do not hold any shares in the Company,
• persons managing and supervising BIOTON S.A. did not hold shares in the Company's related entities.
25. Proceedings pending before court, competent arbitration authority or authority public administration.
25.1. "Dobra Macierzysz Ośrodek" Real Estate
In matters relating to real estate, to which the Company has the right of perpetual usufruct and which were part of the former
"Dobra Macierzysz Ośrodek", hereinafter referred to as the "Real Estates", no administrative proceedings are pending
regarding the assessment of whether the above real estates were subject to the provisions of the decree of the Polish
Committee of National Liberation of 06.09.1944 on carrying out the agricultural reform (Journal of Laws of 1945, No. 3, item
13 as amended.). All proceedings ended with final judgments issued by administrative courts, which confirmed the arguments
of the heirs of former owners that the Real Estates were not subject to the provisions of the above Decree.
The last of the court and administrative cases conducted in the above scope, based on a complaint filed by the IBA with the
participation of BIOTON S.A., ended with final and legally binding decisions on 16.01.2018.
Currently, there is one administrative procedure pending before the Mazowieckie Governor, initiated at the request of the
heirs of former owners of the Real Estate of 14.04.2009 regarding the annulment of the decision of the Head of the Ożarów
Mazowiecki Commune of 15.04.1988 on the takeover of part of the Real Estate in the form of two plots with a total area of
78.87 ha, issued on the basis of the Act of 12 March 1958 on sales of state agricultural real estate and sorting out some
matters related to the agricultural reform and agricultural settlement ("Act of 1958").
In the Company's opinion, in the light of the current jurisprudence, and in particular in the light of the Constitutional Tribunal's
ruling of 20.02.1991, the probability of suffering damage by the Company as a result of recognition of possible claims of the
heirs of the former owners of the property "Dobra Macierzysz Ośrodek" by the relevant authorities seems small. In the
Company's opinion, the previous decisions in cases regarding whether the real estate from the "Dobra Macierzysz Ośrodek"
were subject to the provisions of the PKWN Decree, although they are not in line with the procedural position of the Company,
are not fundamental to the Company’s legal position, as the right to the real estate is derived by the Company from the
contract for the transfer of the perpetual usufruct right concluded with IBA.
Any possible consequences for the Company's situation may, however, be caused by the decision on invalidity of the decision
issued on the basis of the Act of 1958 by the Head of the Commune of Ożarów Mazowiecki of 15.04.1988 on the taking over
by the Treasurer of two plots with a total area of 78.87 ha and the decision of the Head of the Commune of Ożarów
Mazowiecki of 19.03.1990 on the transfer of plots of land with a total area of 77.83 ha to the management of IBA.
In the event of a possible decision of the Mazowieckie Voivodeship regarding annulment of the decision of the Head of the
Commune of Ożarów Mazowiecki of 15.04.1988 and of 19.03.1990, which was consistent with the position of the heirs, the
Company will be entitled to further appeal, including a complaint to the Provincial Administrative Court and a cassation
complaint. The very end of administrative proceedings, even incompatible with the Company's position, will not affect the
Company's property relations, which, if any, may change only after a final judgment of the heirs' claims by civil courts. In such
a situation, the Company, with respect to the plot no. 4/43, will be entitled to claim against IBA, which in the contract of
06.11.1997 stated that IBA will be charged by any third party claims.
Additional information to the consolidated "extended" quarterly report of the BIOTON S.A. Group for the third quarter 2019
18
25.2. Dispute with Hefei Life Science & Technology Park Investments & Development Co Ltd.
The company also informs that it is a party to the arbitration proceedings for payment of USD 1 500 000 with interest
submitted to the China International Economic and Trade Arbitration Commission ("CIETAC") by Hefei Life Science &
Technology Park Investments & Development Co Ltd. ("HLST") against the Company and SciGen Ltd. arising out of protracted
negotiations on the repayment of the net amount of mutual settlements between the parties. HLST also brought an action
to order the Company and SciGen Ltd. to pay the unpaid part of the license fee in the amount of USD 194 286, which was
paid by 30.06.2016. The existing dispute has its source in the agreement concluded on 21.10.2011 (with later annexes)
between the Company, SciGen Ltd., HLST, and Mr. Gao Xiaoming. Mutual settlements of the parties resulting from the said
agreement are recognized in the Company's financial statement starting from the year 2011. The company questioned the
basis for HLST's claim for the disputed amount. On 01.09.2017, the Company became aware of an arbitral award issued by
CIETAC. The Arbitration Court adjudged in favor of HLST the amount of USD 1 500 000 and the corresponding interest, as well
as payment of USD 146.80 as license fees for the third quarter of 2015 and USD 184 549.82 for interest on late payments
since the first quarter of 2013, within 15 business days from the date of entry into force of this judgment. In addition, the
court obliged the company to pay the claim fee and part of the arbitration fee.
The company verifies the legal possibilities of a possible appeal against the arbitration award and the grounds for obtaining
enforceability of the award by HLST also in Poland.
The company has taken legal steps for amicable settlement of the case.
25.3. Arbitration proceedings against LG Chem, Ltd.
On 25.05.2017, Biopartners GmbH with its registered office in Baar, Switzerland ("Biopartners"), in which the Company has -
through Biopartners Holdings AG, based in Baar, Switzerland - 100% of the shares, submitted an application for initiating
arbitration proceedings before the arbitration tribunal of the International Chamber of Commerce where it will demand
compensation from LG Chem, Ltd. based in Seoul, Korea ("LG Chem") for non-performance by LG Chem of the obligations
specified in the License and Development Agreement of 16.10.2001 (the "Agreement"). The agreement was terminated by
Biopartners by letter dated 23.05.2017. The Agreement defined, among others, the principles of cooperation between the
parties in the development and commercialization of an innovative endocrine product - prolonged-release growth hormone
('Valtropin SR'). On 05.08.2013, as a result of development works conducted on the basis of the Agreement for development
works and registration processes, a registration certificate enabling sales and distribution of Valtropin SR within the European
Union was obtained. Due to LG Chem's failure to deliver the ready to market product to Biopartners, Valtropin SR has not
been commercialized.
Due to the fact that the lack of delivery of the product by LG caused that the product was not marketed, the registration
certificate expired in November 2017. With the Annual report for 2015, the Company and the Capital Group informed about
making a revaluation write-down of the license granted by the Agreement to zero value. In the arbitration proceedings,
Biopartners claims from LG Chem compensation in an amount not lower than six million US dollars. The final value of the
damage suffered by Biopartners, and hence - the amount of compensation demanded from LG Chem - will be determined
during the arbitration proceedings. BioPartners prepared a Memorial of Claim, which was submitted on 04.01.2018 to the
Arbitration Tribunal of the International Chamber of Commerce.
On 28.02.2018, in accordance with the Schedule contained in International Procedural Order No. 2 of the International
Chamber of Commerce of 16.11.2017, LG Chem responded (Defense Memorial) to Biopartners’ Memorial of Claim. According
to the Schedule, Biopartners responded (Reply Memorial) to LG Chem and supported the testimony of witnesses on
07.06.2018. In early October, hearings of the Parties were held. On 03.01.2019, the Company received information that the
Arbitration Tribunal of the International Chamber of Commerce dismissed the claim for damages of Biopartners GmbH. In an
arbitration award, the Tribunal awarded Biopartners costs of USD 315 000 plus legal costs of USD 2 802 305 with interest of
5.33% from 02.01..2019. Biopartners did not appeal against the abovementioned arbitration award.
Biopartners GmbH (Switzerland), on 12.03.2019 and Biopartners Holdings AG on 13.03.2019 filed for bankruptcy. The
bankruptcy procedure began on 21.03.2019. The companies were entered in the commercial register as being 'in liquidation'.
The companies are not able to run a business and do not have access to bank accounts. It is estimated that the entire
bankruptcy proceedings will take about seven months for both companies, as the companies have no assets. Following the
termination of the bankruptcy proceedings, the companies will be deleted from the commercial register.
Additional information to the consolidated "extended" quarterly report of the BIOTON S.A. Group for the third quarter 2019
19
25.4 The claim for annulment of the resolution of the Ordinary General Meeting of Bioton S.A. of 11 June 2018 on
granting consent to the transaction of sale of SciGen Ltd
On 6 August, 2018 the Company received from District Court 16th Commercial Division in Warsaw a copy of a lawsuit (the
document was published in Current Report No. 23/2018) filed by AIS Investment 2 sp. z o.o. in Warsaw ("The Plaintiff") against
the Issuer to repeal Resolution No. 2 on the consent for the sale of SciGen Ltd based in Singapore and determining the basic
conditions for the transaction undertaken on 11 June, 2018 by Annual General Meeting of the Issuer (c.f. current report no.
12/2018 of 11 June 2018). The Issuer does not agree with the claim and requested its dismissal. On 3 December, 2018 and on
29 May, 2019, a hearing of witnesses was held. The next hearing was scheduled for 30 August 2019 and took place on 30
August, 2019. The next hearing is scheduled for 8 January 2020.
25.5 Application for appointment by the court of an auditor for special cases
On 29 October, 2018 the company received from the District Court 13th Commercial Department in Warsaw (published in
Current Report No. 30/2018), a copy of the application submitted by AIS Investment 2 sp. z o.o. in Warsaw and Basolma
Holding Limited ("Applicants") for the designation of an auditor to special cases, pursuant to art. 85, par. 1 of the Act on public
offering. The content of the application is in accordance with the draft resolution No. 2 being the subject of the Extraordinary
General Meeting on 26 September, 2018, which was not taken by the EGM (cf. current report No. 28/2018). Considering the
position of the EGM, the Issuer applied for refusal to appoint a special auditor. As at the date of submitting the report, no
hearing has been scheduled in this case. On 24 October, 2019, Bioton S.A. received an invalid decision of the Referendary of
the District Court for the capital city of Warsaw in Warsaw on the designation of Grant Thornton Polska Limited Liability
Company/Limited Partnership Company with its registered office in Poznań as a special auditor for Bioton S.A. Bioton S.A. has
lodged a complaint. On 18 November, 2019, the Company received a decision rejecting the complaint against the
referendary's decision regarding the appointment of special auditor. On 25 November, 2019, Bioton S.A. lodged a complaint
against the decision rejecting the complaint against the decision of the legal court referendary on appointing a special auditor.
26. Information on loan or borrowing sureties granted by BIOTON S.A. or its subsidiary, or guarantee granting - jointly
to one entity or a subsidiary of that entity, if the total value of existing sureties or guarantees constitutes the
equivalent of at least 10% of the Company's equity
In connection with the signing by BIOTON S.A. of a loan agreement with BANK OF CHINA (LUXEMBOURG) S.A. operating as
Bank Of China (Luxembourg) S.A. (Joint Stock Company)Branch in Poland of BIOLEK Sp. z o. o. and BIOTON MARKETING
AGENCY Sp. z o.o. granted BIOTON S.A. a surety in the amount of EUR 9 million. The sureties were granted until the day on
which all liabilities of BIOTON S.A. will be repaid or by 31 March 2026. In addition, the Companies BIOLEK Sp. z o.o. and
BIOTON MARKETING AGENCY Sp. z o.o. granted corporate guarantees as a collateral of the said loan. The guarantees granted
exceed 10% of the equity of BIOLEK Sp. z o.o. and BIOTON MARKETING AGENCY Sp. z o.o.
27. Other information relevant to the assessment of the personnel, property, financial situation, and financial result of
the Company and the Capital Group BIOTON S.A. and their changes as well as information that is relevant to
assessing the feasibility of meeting obligations by the company.
27.1. Loan and borrowing agreements
The company was financed in the third quarter of 2019 with short- and long-term bank debt and borrowing from the
shareholder Uniapek S.A. The liabilities of the Company and the Group resulting from loan agreements are repaid up to date.
The value of debt at Bank BOŚ S.A., HSBC Bank Polska S.A., and BANK OF CHINA (LUXEMBURG) S.A. under loan agreements
as at 30.09.2019 amounted to PLN 74.83 million in total. The value of the shareholder loan was PLN 28 million.
On 01.04.2019 the Company concluded with Bank BOŚ S.A. an annex to the factoring line agreement, extending the period
of validity until 31.03.2020, reducing the factoring limit to PLN 30 million, and changing the Company's selected contractual
obligations.
Additional information to the consolidated "extended" quarterly report of the BIOTON S.A. Group for the third quarter 2019
20
Before reclassification reclassification After reclassification
49 843 - 49 843
74 219 0 74 219
124 062 - 124 062
On 27.06.2019, the Company concluded with Bank BOŚ S.A. annex No. 21 to loan agreement No. 2/2007 extending the
period of the loan until 30.07.2019.
On 29.07.2019, the Company concluded with Bank BOŚ S.A. annex No. 22 to loan agreement No. 2/2007 changing the period
of the loan until 30.06.2020 and chosen financing conditions.
On 07.08.2019, the Company concluded an annex to the agreement with BANK OF CHINA (LUXEMBOURG) S.A. operating as
Bank Of China (Luxembourg) S.A. (Joint Stock Company) Branch in Poland, changing financing conditions.
See below an analysis of the age categories of loans and borrowings according to original dates arising from loan
agreements and their recognition in the consolidated balance sheet as at 30.09.2019 .
Analysis of age categories as at 30.09.2019 (loans and borrowings)
In thousands of zlotys up to 1 to 2 years from 2 to 5 years Over 5 years Total