In connection with current report No 42/2018 of 4 september 2018 and with regard to Resolution No.19 of 25 May 2017 in connection with Resolution No.26 of 6 June 2018 of the Annual General Meeting of Shareholders of IMS S.A., the Board of Directors of IMS S.A.  (“Company”, “Issuer”) informs that today the Supervisory Board of the Company issued a positive opinion on the price (consideration) and the number of acquired shares under the 4th Tranche of the Buy-back Programme.

Due to the afore, today the Board of Directors of the Company set the price (consideration) under the 4th Tranche of the Buy-back Programme at PLN 3.20 (say: three zloty 20/100) per share and the number of acquired shares at 300,000 (say: three hundred thousand).

The Board of Directors of IMS S.A. submits the following attachments:
– the Invitation to submit bids to dispose of shares together with an up-to-date schedule of execution of the 2nd Tranche of the Own Share Buy-back,
– a model form for an offer to dispose of shares,
– a model agreement to dispose of shares.

The Board of Directors of IMS S.A. (“Company”) informs that on 4 September 2018 pursuant to Article 69(1)(2)(a) of “The Act of 29 July 2005 on public offer and the conditions for introducing financial instruments to the organised trading system and on public companies” it received a notification from the funds managed by Trigon TFI S.A. represented by Trigon Towarzystwo Funduszy Inwestycyjnych S.A. (the Investment Funds Company) on the change in the current total shareholding of the investment funds managed by Trigon TFI S.A. in the total number of votes in IMS S.A. consisting in the drop below the 5% threshold of votes in the Company.

The transactions to acquire IMS S.A. shares cleared on 30 August this year resulted in the decrease of the shareholding of Trigon TFI from 6.79 % (2,273,490 IMS S.A. shares) to 1.46% (488,660 IMS S.A. shares) of the share capital of IMS S.A.

The Board of Directors of IMS S.A. (“Company”) informs that on 4 September 2018 pursuant to Article 69(1) in connection with Article 87(1)(2)(a) and 87(3)(b) of “The Act of 29 July 2005 on public offer and the conditions for introducing financial instruments to the organised trading system and on public companies” it received a notification from funds managed by OPERA Towarzystwo Funduszy Inwestycyjnych S.A. (the Investment Funds Company) and clients for whom the Investment Funds Company renders the service consisting in the management of a portfolio including one or more financial instruments represented by OPERA Towarzystwo Funduszy Inwestycyjnych S.A. on holding in total 4,233,164 shares of the Company which constitutes 12.64% of votes in the general meeting of the Company.

The transactions to acquire IMS S.A. shares cleared on 31 August this year resulted in the increase of the shareholding of OPERA TFI from 7.73% (2,454,700 IMS S.A. shares) to 12.64% (4,233,164 IMS S.A. shares) of the share capital of IMS S.A.

The Board of Directors of IMS S.A. (“Company”, “Issuer”) submits attached the schedule for the 4th Tranche of Own Shares Buy-back Programme. Under the 4th Tranche, the acquisition of own shares will take place by concluding transactions outside the organised trade as a result of presenting to shareholders an Invitation to submit Bids to Dispose of Shares.

At the same time, the Board of Directors informs that on 4 September this year it adopted the resolution on the proposed price (consideration) and the number of shares acquired under the 4th Tranche of the Buy-back Programme. The proposed number of shares which would be the subject matter of the Company’s acquisition is 300,000 (say: three hundred thousand) and the proposed price (consideration) is PLN 3.20 (say: three zloty 20/100) per share. The above mentioned proposal will receive an opinion from the Supervisory Board of the Company.

The shares which would be the subject matter of the acquisition under the 4th Tranche of the Buy-back give right to 300,000 votes, constitute 0.90% of the share capital of the Company and give right to 0.90% of all votes in the General Meeting.

The 4th Tranche of Own Shares Buy-back is conducted based on Resolution No.19 of 25 May 2017 in connection with Resolution No.26 of 6 June 2018 of the Annual General Meeting of Shareholders of IMS S.A. and Resolution No.1 of 29 June 2018 of the Board of Directors of IMS S.A.

The Board of Directors of IMS S.A. (“Company”, “Issuer”) informs that it signed today an agreement specifying the terms sheet for the transaction regarding the acquisition of 100% shares of APR Sp. z o.o with the registered office in Katowice (“APR”). The parties to the term sheet are: IMS S.A. as the purchaser and three natural persons holding together 100% shares in APR as sellers and the APR Company itself.

APR is a company operating for several years in the audiomarketing sector, whose business model is based on provision of music services to points of sale. APR has ca. 3,000 locations to which it provides subscription audio services at home and abroad. After the acquisition, the Issuer’s Capital Group shall hold in total ca. 17,000 subscription locations. For the Issuer, the acquisition of APR shall be a major step aimed at the consolidation of the sensory marketing market in Poland and further strengthening of the Issuer’s position as the market leader in Poland. Adding APR to the IMS Capital Group is also of key importance in view of considerable strengthening of the position of the Issuer’s Capital Group in the budget audiomarketing segment where the Issuer started to operate as of the beginning of this year and where most of the competitors operate. The Board of Directors of the Issuer sees numerous synergies resulting from the acquisition of APR. The synergies include foremost the opportunity to launch for the part of of APR clients a wide portfolio of services of IMS Group – aromamarketing, Digital Signage, audio advertising services, event services (income synergies). There are also significant opportunities regarding cost savings (cost synergies).

The acquisition of 100% of shares of APR shall be carried out in the earn-out model. An extremely significant portion of the payment for the benefit of previous owners of APR (being at the same time the only members of the board of this company) depends on profits generated by APR for IMS Capital Group. The key provisions of the term sheet are as follows:

1. By 5 November 2018 (the set deadline for conclusion of the final investment agreement) the Issuer shall pay to the previous owners of APR on the account of the acquisition of all Shares (representing 100% of share capital of the Company) – the total price of PLN 3,750,000.00 gross, i.e. PLN 1,250,000.00 gross for each of the previous owners of APR. The parties consensually allow clearing the whole or the portion of the above mentioned amount by means of IMS shares.
2. An additional payment for shares depends on the net profit generated in the period from 01.07.2019 to 30.06.2020, i.e. in the period when APR is in the structure of IMS Group. The payment ranges from PLN 1,550,000.00 gross, i.e. PLN 516,666.67 gross for each previous owner of APR if the profit of at least PLN 700,000.00 is generated to PLN 4,800,000.00 gross, i.e. PLN 1,600,000.00 gross for each of the previous owners of APR if the profit of at least PLN 1,600,000.00 is generated.

For the purpose of the calculations indicated in paragraph 2 above, to specify the net profit, calculated in line with IFRS, all cost synergies after the acquisition of APR shares by IMS and a portion of the profit resulting from the sales of products and services of the previous IMS Group, i.e. the sales of advertising services as well as event, aromamarketing and Digital Signage services, are included.  The portion of the net profit resulting from revenue from sales of products and services of the previous IMS Group may not exceed 20% of the net profit generated from previous activity of APR.

The Board of Directors of the Issuer estimates that the sum of payments mentioned in paragraphs 1 and 2 above will amount in total to ca. 5-8 times the net profit generated by APR for the IMS Group in the period from 01.07.2019 to 30.06.2020.

3. If APR fails to generate in the period from 01.07.2019 to 30.06.2020 the net profit of at least PLN 700,000.00 calculated in line with rules specified above but at the same time higher than PLN 400,000.00, previous shareholders of APR shall pay for the benefit of IMS the total amount of PLN 300,000.00 (PLN 100,000.00 each of previous shareholders). If the profit generated in the above mentioned period is PLN 400,000.00 or lower, previous shareholders of APR shall pay for the benefit of IMS the total amount of PLN 750,000.00 (PLN 250,000.000 each of previous shareholders).  All the above mentioned sums are secured by notary statements of submission to enforcement.
4. So as to additionally motivate previous shareholders of APR to achieve the best possible financial results in the coming years, the Issuer shall make an additional payment for the earlier acquired Shares, for the periods specified as below, to be shared equally among previous shareholders of APR:

i.       01.07.2020-30.06.2021 – 25% of the net profit of APR for this period,

ii.        01.07.2021-30.06.2022 – 25% of the net profit of APR for this period,

iii.       01.07.2022-30.06.2023 – 25% of the net profit of APR for this period,

iv.       01.07.2023-30.06.2024 – 25% of the net profit of APR for this period,

The net profit means the net profit calculated in line with IFRS, without exclusions specified in paragraph 2 above.

5. The previous shareholders of APR being at the same time members of the board are guaranteed a seat on the board for the period of 5 years of the conclusion of the actual investment agreement. The remuneration of the above mentioned members of the board is established based on the regulations for remunerating members of the board in the Issuer’s subsidiaries. The Issuer has the right to appoint the majority of the board of APR.
6. If APR or any previous shareholders:

i. breaches the provisions regarding no competition,

ii. fails to finalise the actual investment agreement based on the term sheet conditions for any reason,

each of the previous shareholders of APR shall pay independently from the others for the benefit of the Issuer the contractual penalty of PLN 350,000.00. The total warranty penalty payable by all previous shareholders is PLN 1,050,000.00. The security to the claims mentioned above is notary statements of submission to enforcement. Additionally, the above mentioned claims are guaranteed in the total amount of PLN 1,050,000.00 by the APR company (a notary statement of submission to enforcement).

7. The conclusion by the Issuer of the final investment agreement shall depend on non indication of any irregularities in the due diligence audit, no significant unfavourable change in the operations of the APR company as at the moment of concluding the final investment agreement and the approval of the transaction by the Issuer’s appropriate corporate bodies. The Issuer may withdraw from the transaction without any consequences if the Board of the Company fails to obtain appropriate corporate consents (the consent of the Supervisory Board for the above mentioned transaction) or significant irregularities in the operations of the APR company are indicated in the ongoing due diligence audit or there are significant discrepancies between information and documents previously submitted to the Issuer and the current state of affairs. If the Issuer resigns for any other reason, it is obliged to pay the total warranty sum for the benefit of previous shareholders of APR in the amount of PLN 1,050,000.00 – PLN 350,000.00 for the benefit of each of the previous shareholders of APR.  The Issuer has not filed a statement of submission to enforcement.

Selected financial data of APR Sp. z o.o. (prepared in line with the Accounting Act , not reviewed by an auditor) for the last two completed financial years, i.e. 2017 and 2016 are as follows:

Year 2017

Revenue: PLN 2,342 thousand PLN

EBIT: PLN 455 thousand PLN

EBITDA: PLN 555 thousand PLN

Net profit: PLN 389 thousand PLN

Non-current assets: PLN 868 thousand PLN

Inventories: PLN 125 thousand PLN

Receivables: PLN 298 thousand PLN

Cash: PLN 129 thousand PLN

Equity: PLN 566 thousand PLN

Liabilities: PLN 879 thousand PLN

Year 2016

Revenue: PLN 1,078 thousand PLN

EBIT: PLN 69 thousand PLN

EBITDA: PLN 115 thousand PLN

Net profit: PLN 50 thousand PLN

Non-current assets: PLN 707 thousand PLN

Inventories: PLN 53 thousand PLN

Receivables: PLN 62 thousand PLN

Cash: PLN 56 thousand PLN

Equity: PLN 177 thousand PLN

Liabilities: PLN 707 thousand PLN

The Board of Directors of IMS S.A. (“Company”) submits the list of shareholders holding at least 5% of votes in the Extraordinary General Shareholder Meeting of the Company which took place on 31.07.2018, specifying the number of votes attributed to each of them on account of held shares and indicating their percentage share in the number of votes in this General Shareholder Meeting as well as in the total number of votes.

1) Dariusz Lichacz – number of held shares: 6,158,820, number of votes attached to the held shares: 6,158,820, which gave right to 27.69% votes in the Extraordinary General Shareholder Meeting and constitutes 18.38% of the total votes;

2) Michał Kornacki – number of held shares: 5,874,000, number of votes attached to the held shares: 5,874,000, which gave right to 26.41% votes in the Extraordinary General Shareholder Meeting and constitutes 17.53% of the total votes;

The Board of Directors of IMS S.A. (“Company”, “Issuer”) presents the text of the attached resolutions adopted on 31.07.2018 by the Extraordinary General Meeting of the Company (“EGM”).

To supplement this information, the Company informs that resolution No.5 includes amendments to the Articles of Association, whereas resolution No.6 – the consolidated text of the Articles of Association. The Board provides the attached list of previous and amended provisions of the Articles of Associations.

At the same time the Board of the Company informs that during the session of the EGM objections were raised against adopted Resolutions No. 4, 5 and 6 and recorded in the minutes of the meeting. No resolutions were voted and not adopted and during the EGM no item on the agenda was omitted from the examination.

During the session of the EGM the Board of Directors of the Company submitted a self-amendment to the draft resolution No. 4 (and consequently to draft resolution No. 5 and No. 6), consisting in the amendment in the draft of the total amount of the target capital from PLN 320,000.00 (i.e. the number of shares which may be issued – 16,000,000) to PLN 100,000 (i.e. the number of shares which may be issued – 5,000,000) and the proviso that:

1. the sole objective of the share issued as part of the Board’s authorisation to increase the share capital as part of the target capital is to finance merger and acquisition transactions, also by issuing IMS shares as payment for stocks, shares or organised part of enterprise of the taken-over (acquired) entity,
2. the issue price of the issued shares as part of the execution of the Board’s authorisation mentioned above (series B bearer shares) is each time established by the Board of Directors with the consent of the Supervisory Board, whereas this price may not be lower than the arithmetic mean of closing prices of stock exchange trading sessions in the regulated market operated by Giełda Papierów Wartościowych w Warszawie S.A. (the Warsaw Stock Exchange) in the period of three months preceding the conclusion of the preliminary or final investment agreement regarding the transaction specified in paragraph a) above.

Resolutions No. 4, 5 and 6 as amended were adopted by the EGM.

The objective of the Board of Directors of the Company, in line with the adopted and executed development strategy, is among other things growth by means of acquisitions. The Board is conducting talks with several entities interested in joining the IMS Capital Group. It is possible that if the talks are successful, transactions will be partly finalised by clearing them using Company’s shares. Apart from the terms and conditions specified in Resolution No. 4 the Board will aim at concluding M&A transactions while following the rules below:

1. financial parameters (e.g. the quotient of the transaction price and EBITDA or the quotient of the transaction price and the net profit) of the transactions are not lower than the financial parameters for IMS S.A.,
2. financial conditions of the transaction will include as far as possible the earn-out clause, providing the pay-out of a considerable portion of payment after previously specified date and after achieving financial objectives specified in the investment agreement,
3. the subject of the transactions will be entities from Issuer’s industry or complimentary to the business profile of the IMS Capital Group, whose inclusion in the composition of the group will lead to the increased efficiency of the conducted business activity, the improvement of the market position and competitive advantage.

Detailed legal basis:

• 19 paragraph 1 points 6-9 of the Regulations of the Minister of Finance of 29 March 2018 on current and periodic information published by issuers of securities and conditions for recognition as equivalent the information required by laws of non-EU member states.

The Board of Directors of IMS Spółka Akcyjna with its registered office in Warsaw (“the Company”) informs that in the period from 23.07.2018 to 27.07.2018 the Company acquired, through IPOPEMA Securities S.A., 13,769 (thirteen thousand seven hundred and sixty-nine) own shares at the average unit price of PLN 3.37. The total acquisition price, including the cost of acquisition, amounted to PLN 46,584.23.

In line with information communicated by IPOPEMA Securities S.A.:

• on 23.07.2018, 2,680 IMS S.A. shares were acquired constituting 0.0080% share in the share capital of the Company and 0.0080% votes in the General Shareholder Meeting. The average unit acquisition price was PLN 3.38;
• on 24.07.2018, 2,680 IMS S.A. shares were acquired constituting 0.0080% share in the share capital of the Company and 0.0080% votes in the General Shareholder Meeting. The average unit acquisition price was PLN 3.38;
• on 25.07.2018, 2,695 IMS S.A. shares were acquired constituting 0.0080% share in the share capital of the Company and 0.0080% votes in the General Shareholder Meeting. The average unit acquisition price was PLN 3.38;
• on 26.07.2018, 2,709 IMS S.A. shares were acquired constituting 0.0081% share in the share capital of the Company and 0.0081% votes in the General Shareholder Meeting. The average unit acquisition price was PLN 3.35;
• on 27.07.2018, 3,005 IMS S.A. shares were acquired constituting 0.0090% share in the share capital of the Company and 0.0090% votes in the General Shareholder Meeting. The average unit acquisition price was PLN 3.38.

The detailed list of transactions conducted in the period from 23.07.2018 to 27.07.2018 is included in the attachment to this report.

The nominal value of one share is PLN 0.02, and the total nominal value of shares acquired on the dates mentioned above was PLN 275.38. The acquired block of 13,769 shares constitutes 0.0411% of Company share capital and gives 13,769 votes constituting 0.0411 % votes in the General Shareholder Meeting of the Company.

At the same time, the Board of Directors of IMS S.A. in connection with the provisions of Resolution No.2 of the Board of Directors of IMS S.A. regarding the terms and conditions as well as the procedure to exercise Tranche 3 of the Company Own Shares Buy-back Programme communicated in current report No. 29/2018 of 29 June 2018 informs that on 27 July this year the purchase of own shares conducted as part of Tranche 3 of the Company Own Shares Buy-back Programme was completed (in line with the adopted schedule) and cleared pursuant to Resolution No.19 of the Annual General Meeting of Shareholders of IMS S.A. (“AGM”) of 25 May 2017 and Resolution No. 26 of the Annual General Meeting of the IMS S.A. (“AGM”) of 6 June 2018. Within this Tranche the Company acquired in total 74,898 shares of the total nominal value of PLN 1,497.96 constituting 0.22% of the share capital of the Issuer and giving right to 74,898 votes in the GM (0.22% of total votes). The average unit acquisition price was PLN 3.41 per share.

At present the Company holds in total 1,256,375 own shares, constituting 3.75% of Company share capital and giving 1,256,375 votes constituting 3.75% of votes in the General Shareholder Meeting of the Company.

The Issuer, pursuant to Article 364 paragraph 2 of the Commercial Companies Code, does not exercise its right to vote from shares held.

In line with Resolution No.26 of the AGM of 6 June 2018, the Company may still use for the purpose of own share acquisition the amount of PLN 4,793 thousand by 31 December 2019 at the latest.

Detailed legal basis: Article 2 paragraph 2 and 3 of the COMMISSION DELEGATED REGULATION (EU) 2016/1052

The Board of Directors of IMS S.A. (“Company”, “Issuer”) informs that on 26 July 2018, acting pursuant to Resolution No. 19 of the Annual General Meeting (“AGM”) of 9 June 2016, Resolution No. 19 of the AGM of Shareholders of 25 May 2017 and Resolution No. 26 of the AGM of 6 June 2018, it sold the own shares in the number of 20,000 (representing 0.06% of the share capital and giving right to 20,000 votes representing 0.06% share in the Company’s total number of votes) acquired as part of earlier conducted own shares acquisition programmes. The purchaser of the shares is Aria spółka z ograniczoną odpowiedzialnością i Wspólnicy spółka komandytowa (limited partnership) with its registered office in Warsaw (“Aria”), an entity related to the member of the Supervisory Board of the Issuer, Mr Andrzej Chajec.

The sale price of one share of the Issuer was established at PLN 3.55 (the arithmetic mean of closing prices of 60 stock exchange trading sessions in the period from 25 April to 20 July 2018).  The value of all Issuer’s shares sold is PLN 71 thousand.

At the same time, the Board of the Company informs that today it acquired 14 shares (representing 6.8% of the share capital and giving right to 6.8% votes in the shareholders’ meeting) in Mood Factory Sp. z o.o.  (“Mood Factory”), a controlled by the Issuer and fast developing subsidiary in which the Issuer already holds 178 shares (representing 86.4% of the share capital and giving right to 86.4% of votes in the shareholders’ meeting).

The acquisition price of shares in Mood Factory was established at PLN 71 thousand. The Seller of Mood Factory shares is the Aria company. As a result of the conducted transaction the parties shall make a mutual deduction of the liability. After the transaction the Issuer shall hold 192 shares (representing 93.2% of the share capital and giving right to 93.2% of votes in the shareholders’ meeting) in Mood Factory Sp. z o.o.

Detailed legal basis:  Article 5 section 1 letter b) of the Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse

The Board of Directors of IMS Spółka Akcyjna with its registered office in Warsaw (“the Company”) informs that in the period from 16.07.2018 to 20.07.2018 the Company acquired, through IPOPEMA Securities S.A., 18,906 (eighteen thousand nine hundred and six) own shares at the average unit price of PLN 3.42. The total acquisition price, including the cost of acquisition, amounted to PLN 64,776.05.

In line with information communicated by IPOPEMA Securities S.A.:

• on 16.07.2018, 4,452 IMS S.A. shares were acquired constituting 0.0133% share in the share capital of the Company and 0.0133% votes in the General Shareholder Meeting. The average unit acquisition price was PLN 3.42;
• on 17.07.2018, 4,340 IMS S.A. shares were acquired constituting 0.0130% share in the share capital of the Company and 0.0130% votes in the General Shareholder Meeting. The average unit acquisition price was PLN 3.40;
• on 18.07.2018, 4,110 IMS S.A. shares were acquired constituting 0.0123% share in the share capital of the Company and 0.0123% votes in the General Shareholder Meeting. The average unit acquisition price was PLN 3.43;
• on 19.07.2018, 3,514 IMS S.A. shares were acquired constituting 0.0105% share in the share capital of the Company and 0.0105% votes in the General Shareholder Meeting. The average unit acquisition price was PLN 3.42;
• on 20.07.2018, 2,490 IMS S.A. shares were acquired constituting 0.0074% share in the share capital of the Company and 0.0074% votes in the General Shareholder Meeting. The average unit acquisition price was PLN 3.42.

The detailed list of transactions conducted in the period from 16.07.2018 to 20.07.2018 is included in the attachment to this report.

The nominal value of one share is PLN 0.02, and the total nominal value of shares acquired on the dates mentioned above was PLN 378.12. The acquired block of 18,906 shares constitutes 0.0564% of Company share capital and gives 18,906 votes constituting 0.0564 % votes in the General Shareholder Meeting of the Company.

At present the Company holds in total 1,262,606 own shares, constituting 3.77% of Company share capital and giving 1,262,606 votes constituting 3.77% of votes in the General Shareholder Meeting of the Company.

Detailed legal basis: Article 2 paragraph 2 and 3 of the COMMISSION DELEGATED REGULATION (EU) 2016/1052