LABL Multi-Color Corp.

NOTES TO FINANCIAL STATEMENTS

December 31, 2018 and 2017

NOTE A – DESCRIPTION OF PLAN

Multi-Color 401(k) Savings Plan (the “Plan”) is a defined contribution profit sharing plan. The following summary of the Plan is provided for informational purposes only, and reference should be made to the Plan document for a more complete description. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).

On October 31, 2017, the Company completed its acquisition pursuant to the Sale and Purchase Agreement (as amended) with Constantia Flexibles Germany GmbH, Constantia Flexibles International GmbH, Constantia Flexibles Group GmbH and GPC Holdings B.V. (collectively, “Constantia Flexibles”), acquiring 100% of the Labels Division of Constantia Flexibles (“Constantia Labels”). Certain participant account balances held under the Constantia Flexibles America Company 401(k) Plan (the “Constantia Plan”) were rolled-over into the Plan at the election of the individual participants during the year ended December 31, 2018 and are included in Rollover contributions on the Statement of Changes in Net Assets Available for Benefits. Total rollover contributions from the Constantia Plan were $4,859,418, including loans receivable from participants of $373,618. Applicable Constantia Labels employees could elect to begin participating in the Plan effective November 1, 2017.

Employees are eligible to participate in the Plan after completing one month of service. Upon becoming eligible to participate in the Plan, employees are automatically enrolled at a 3% participation rate. Employees may elect a different percentage or waive participation in the Plan either before the first contributions are withheld or at any time thereafter. The contributions are invested in the Plan’s default investment option if the employee does not make a different investment election. The default investment option is the American Balanced Fund.

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NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting

The accompanying financial statements are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

2. Use of Estimates

In preparing financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets, liabilities and changes in net assets available for benefits, and disclosures of contingent assets and liabilities. Actual results could differ from those estimates.

3. Investment Valuations and Income Recognition

The Plan’s investments are stated at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between market participants at the measurement date. See Note G for discussion of fair value measurements.

Purchases and sales of investments are recorded on a trade-date basis. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend income. Net depreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

4. Payment of Benefits

Benefits are recorded when paid.

5. Notes Receivable from Participants

Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Delinquent participant loans are reclassified as distributions. Interest rates ranged from 4.25% - 9.00% on participant loans outstanding as of December 31, 2018 and ranged from 4.25% - 5.50% on participant loans outstanding as of December 31, 2017. No allowance for credit losses has been recorded as of December 31, 2018 or 2017.

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6. Expenses of the Plan

The Company provides certain administrative services at no cost to the Plan. If not paid by the Company, other administrative and investment expenses are paid by the Plan. The Company paid audit related expenses on behalf of the Plan for the year ended December 31, 2018.

7. Subsequent Events

The Plan evaluated subsequent events through the date the financial statements were issued and identified that no material subsequent events had occurred through this date requiring revision or disclosure in the financial statements.

NOTE C – RISKS AND UNCERTAINTIES

Participants direct their account balances to be invested into one or more different investment options. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.

NOTE D – PLAN TERMINATION

Although the Company has not expressed any intent to do so, the Company has the right to terminate the Plan at any time subject to provisions of ERISA. In the event of Plan termination, participants will become fully vested in their accounts.

NOTE E – TAX STATUS

The prototype plan document utilized by the Plan, obtained an opinion letter dated March 31, 2014 in which the Internal Revenue Service (IRS) stated that the prototype plan, as then designed, was in compliance with the applicable requirements of the IRC. The Plan has been amended since the opinion letter, however, the Plan administrator believes that the Plan is currently designed and is being operated in compliance with the applicable requirements of the IRC.

Accounting principles generally accepted in the United States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability if the organization has taken an uncertain tax position that more likely than not would not be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2018 and 2017, there are no uncertain positions taken or expected to be taken. The Plan is subject to routine audits by taxing jurisdictions and is currently under audit for the Plan year ended December 31, 2016.

NOTE F – RELATED PARTY AND PARTY-IN-INTEREST TRANSACTIONS

Certain Plan investments held during the years ended December 31, 2018 and 2017 include shares of the Company’s common stock and a stable value fund managed by PNC Bank, N.A. (the “Administrator”), or an affiliate thereof, and therefore, these transactions qualify as party-in-interest transactions. The Plan paid the Administrator $223,657 in net administrative expenses, including trustee fees, during the year ended December 31, 2018. The Plan did not pay any fees during the year ended December 31, 2018 for investment management services.

NOTE G – FAIR VALUE MEASUREMENTS

The Plan defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. To increase consistency and comparability in fair value measurements, the Plan uses a fair value estimating three-level hierarchy that prioritizes the use of observable inputs. The three levels are:

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The determination of where an asset or liability falls in the hierarchy requires significant judgment. Assets measured at fair value for the Plan are as follows:

Mutual funds/Multi-Color Corporation common stock/money market fund – Valued at the closing price reported on the active market on which the security is traded.

PNC Stable Value Fund – Valued at net asset value (“NAV”) based on the fair value of the fund’s underlying investments plus the contract value of the fully benefit-responsive wrapper contracts, using information reported by the Administrator. This NAV represents the Plan’s fair value since this is the amount at which the Plan transacts with the fund. As a practical expedient, the Plan measured and presented its investment in the PNC Stable Value Fund at NAV as reported by the Administrator as of December 31, 2018 and 2017. The PNC Stable Value Fund allows for daily redemption and investments in the PNC Stable Value Fund and does not have a holding period. There are no unfunded commitments for investments in the PNC Stable Value Fund. The PNC Stable Value Fund seeks to preserve principal investment while earning interest income.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

Certain events limit the ability of the Plan to transact at contract value with the PNC Stable Value Fund. Such events include the following: (1) amendments to the Plan documents (including complete or partial Plan termination or merger with another plan), (2) election by the employer to withdraw from a collective trust fund in order to switch to a different investment provider, (3) bankruptcy of the Plan sponsor or other Plan sponsor events (for example, divestitures or spin-offs of a subsidiary) that cause a significant withdrawal from the Plan; or (4) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. The Plan administrator does not believe that any events which would limit the Plan’s ability to transact at contract value with participants are probable of occurring.

Investments measured at fair value at December 31, 2018 are categorized as follows:

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Investments measured at fair value at December 31, 2017 are categorized as follows:

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