AS EKSPRESS GRUPP CONSOLIDATED ANNUAL REPORT 2018 TABLE OF CONTENTS TABLE OF CONTENTS ........................................................................... 2 GENERAL MEETING OF SHAREHOLDERS .............................53 Note 11. Other receivables and investments .....................89 GENERAL INFORMATION ..................................................................... 3 SUPERVISORY BOARD .................................................................. 54 Note 12. Business combinations and Management Board’s confirmation MANAGEMENT BOARD ..................................................................55 business combinations involving entities of the consolidated annual report ............................................... 3 SUPERVISORY AND MANAGEMENT under commmon control .............................................................89 STATEMENT OF THE CHAIRMAN BOARDS OF SUBSIDIARIES .........................................................56 Note 13. Joint ventures ...................................................................91 OF THE MANAGEMENT BOARD .......................................................4 AUDIT COMMITTEE ..........................................................................57 Note 14. Associates .........................................................................94 BRIEF OVERVIEW OF THE GROUP ...................................................7 SELECTION AND PAY OF AUDITORS .......................................57 Note 15. Property, plant and equipment ............................95 GROUP’S KEY BUSINESSES ................................................................ 8 CONFLICT OF INTEREST AND Note 16. Intangible assets ...........................................................96 OUR BRANDS ............................................................................................ 9 TREATMENT OF INSIDE INFORMATION ..................................57 Note 17. Trade and other payables ........................................99 OUR CHAIN OF ACTIVITY .................................................................. 10 OTHER INFORMATION....................................................................58 Note 18. Bank loans and borrowings .................................100 RESPONSIBILITY OF A STATEMENT OF CONFORMITY TO Note 19. Finance lease .................................................................101 MEDIA GROUP IN THE SOCIETY ......................................................11 THE RECOMMENDATIONS OF THE Note 20. Operating lease ..........................................................101 DIGITAL MEDIA COMPANY ................................................................16 CORPORATE GOVERNANCE CODE .......................................59 Note 21. Segment reporting .....................................................102 KEY EVENTS AND DEVELOPMENTS IN 2018 ...............................18 CONSOLIDATED FINANCIAL STATEMENTS .............................. 60 Note 22. Sales revenue .............................................................. 104 MEDIA DISTINCTIONS AND AWARDS IN 2018 ..........................21 Consolidated balance sheet................................................... 60 Note 23. Cost of sales .................................................................105 MANAGEMENT REPORT .....................................................................23 Consolidated statement of Note 24. Marketing expenses .................................................105 BUSINESS OPERATIONS ....................................................................24 comprehensive income .................................................................61 Note 25. Administrative expenses ........................................106 FINANCIAL INDICATORS AND RATIOS – Consolidated statement of changes in equity ..............62 Note 26. Expenses by type .......................................................106 joint ventures consolidated 50% line-by-line ..................24 CONSOLIDATED CASH FLOW STATEMENT .........................63 Note 27. Other income ................................................................106 SEGMENT OVERVIEW .....................................................................25 NOTES TO THE CONSOLIDATED Note 28. Share option plans ....................................................106 MEDIA SEGMENT ..........................................................................27 FINANCIAL STATEMENTS .............................................................. 64 Note 29. Equity ................................................................................107 PRINTING SERVICES SEGMENT............................................ 30 Note 1. General information ...................................................... 64 Note 30. Contingent assets and liabilities .......................107 FINANCIAL INDICATORS AND RATIOS ....................................31 Note 2. Accounting policies adopted Note 31. Related party transactions ...................................108 CUSTOMER EXPERIENCE AND SATISFACTION ...................... 34 in the preparation of the financial statements ...............65 Note 32. Subsequent events ....................................................110 EMPLOYEES ..............................................................................................37 Note 3. Critical accounting estimates Note 33. Financial information DEVELOPMENT OF THE and judgements ............................................................................. 80 about the Parent Company ......................................................111 SOCIETY AND THE SECTOR .............................................................41 Note 4. Financial risk management .......................................81 Independent auditor’s report ......................................................113 ENVIRONMENTAL MANAGEMENT ................................................. 45 Note 5. Cash and bank ................................................................86 PROPOSAL FOR PROFIT CONSOLIDATED ANNUAL REPORT 2018 REPORT ANNUAL CONSOLIDATED SHARES AND SHAREHOLDERS Note 6. Trade and other receivables ....................................86 ALLOCATION FOR THE YEAR 2018 ..............................................118 OF AS EKSPRESS GRUPP ...................................................................47 Note 7. Trade receivables ............................................................86 DECLARATION OF THE MANAGEMENT REPORT OF THE CORPORATE GOVERNANCE CODE ........52 Note 8. Corporate income tax and deferred tax...........87 BOARD AND SUPERVISORY BOARD ..........................................119 CORPORATE GOVERNANCE AND STRUCTURE ................52 Note 9. Other short-term receivables ...................................88 KEY FINANCIAL INDICATORS IN 2014-2018 ............................120 GROUP’S LEGAL STRUCTURE ....................................................52 Note 10. Inventories.........................................................................88 AS EKSPRESS GRUPP 2 GENERAL MANAGEMENT BOARD’S INFORMATION CONFIRMATION OF THE Beginning of reporting period 1 January 2018 CONSOLIDATED ANNUAL REPORT End of reporting period 31 December 2018 The Management Board confirms that the management knowledge a true and fair view of the assets, liabilities, Company name AS Ekspress Grupp report of AS Ekspress Grupp disclosed on pages 4 to 59 financial position and results of the issuer and its group Registration number 10004677 presents a true and fair view of the business develop- companies in accordance with International Financial Address Parda 6, 10151 Tallinn Phone +372 669 8381 ments, results and financial position of the Parent Reporting Standards (IFRS) as adopted by the European Fax +372 669 8180 Company and its group companies. The Management Commission and include a description of major risks and E-mail [email protected] Board confirms that the consolidated financial state- uncertainties. Internet homepage www.egrupp.ee ments disclosed on pages 60 to 112 give to the best of its Main field of activity Publishing and related services (5814) Management Board Mari-Liis Rüütsalu Signe Kukin Kaspar Hanni AS EKSPRESS GRUPP Supervisory Board Ahto Pärl Hans H. Luik Harri Helmer Roschier Indrek Kasela Peeter Saks Aleksandras Česnavičius 2018 REPORT ANNUAL CONSOLIDATED Auditor KPMG Baltics OÜ The Annual Report consists of the Management Board’s confirmation of the annual report, state- ment of the chairman of the Management Board, management report, report of corporate gover- Mari-Liis Rüütsalu Signe Kukin Kaspar Hanni nance code, consolidated financial statements, Chairman of the Management Board Member of the Management Board Member of the Management Board independent auditor’s report, proposal for profit signed digitally signed digitally signed digitally allocation, and declaration of the Management 28.03.2019 28.03.2019 28.03.2019 Board and Supervisory Board. The document comprises 121 pages. 3 STATEMENT OF THE CHAIRMAN OF THE MANAGEMENT BOARD Pillars of our activities In 2018, Estonia ranked 12th according the World Press Freedom Index (Latvia ranked 24th and Lithuania 36th), ahead of such countries as Iceland, Germany and Canada. 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