mda asseco poland fy2016 · letter . report on operations of asseco poland s.a. for the year ended...

Asseco Poland S.A. Annual Report

Annual Report for the year ended December 31, 2016

937 mPLN

in sales revenues for 2016

352 mPLN

in net profit for 2016

2,576

highly committed employees

27 mPLN

of income tax paid in Poland in 2016

6th

largest software vendor in Europe

6

największy dostawca oprogramowania

250 mPLN

paid out in dividends for 2015

Report on Operations of Asseco Poland S.A. for the year ended December 31, 2016

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President’s Letter


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PRESIDENT’S LETTER

Dear Shareholders,

It is my pleasure to present to you the report on

business operations of Asseco Poland for the year

2016. It was a challenging year, during which we

worked on implementing our long-term strategy aimed

at creating new value and on further developing the

Company.

After a period of strong growth of the Company

through acquisitions, the previous year was marked by

organizing our structure in Poland and reorganizing our

operations. As part of these steps, we have separated

the infrastructure and general business divisions from

Asseco Poland and transferred them to two companies

from Asseco Group: Asseco Data Systems

and DahliaMatic. After the changes, Asseco Poland will

focus on supplying proprietary software and services to

the financial sector, large companies and the central

administration.

In the previous year, we continued cooperation with

majority of our key customers and were developing

our flagship products for the financial and general

business sectors. In the banking sector, we continued

cooperation with the largest commercial banks in

Poland, implemented our flagship banking system

def3000 for further customers from the cooperative

banking sector and launched the omnichannel mobile

platform for Asseco CBP banking in Raiffeisen Polbank.

We believe that our modern products implemented in

the Polish banking sector will allow us to effectively

compete in the foreign financial markets in the near

future.

In spite of difficult environment in 2016, our

operations in the public institutions sector fared well

thanks to our effective strategy of long-term

cooperation with our key customers. We extended a

contract for the maintenance of the largest IT system

in Poland – the Comprehensive Information System

(CIS) in the Social Insurance Institution (ZUS) – until the

middle of 2018. We also continued cooperation with

other partners, such as the Ministry of Finance or the

Agricultural Social Insurance Fund (KRUS). In the field

of defense and security, we continued preparations for

the process of modernization and digitalization of the

Polish Army, initiated by the Ministry of National

Defense. We extended our competences and

implemented systems for our existing customers, such

as the European Space Agency.

In the general business sector, after the period of

implementation works in the previous years, our

specialists focused on maintaining systems in the

largest companies in the energy sector. We also

continued works on developing the billing system in

Ethiopia. We successfully completed the migration of 3

million customers of Orange operator to a new system

and began a cooperation on centralizing the system of

Polkomtel mobile operator with the systems of

Cyfrowy Polsat.

On behalf of myself and the whole management team,

I would like to cordially thank all the people who

contributed to the continued process of building of

a powerful and modern IT company of Asseco Poland.

With best regards,

Adam Góral

President of the Management Board Asseco Poland S.A


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Management Report on Operations of Asseco Poland S.A.


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MANAGEMENT REPORT ON OPERATIONS OF ASSECO POLAND S.A. for the year ended December 31, 2016

PRESIDENT’S LETTER ............................................................ BŁĄD! NIE ZDEFINIOWANO ZAKŁADKI.

GENERAL INFORMATION ON ASSECO POLAND S.A. ...................................................................... 8

COMPANY’S AUTHORITIES .............................................................................................................................. 9 Management Board...................................................................................................... Błąd! Nie zdefiniowano zakładki. Supervisory Board .......................................................................................................................................................... 11 Awards and accolades .................................................................................................................................................... 12

INFORMATION TECHNOLOGY MARKET AND ITS FUTURE OUTLOOK ........................................................................... 13

STRATEGY AND DIRECTIONS OF DEVELOPMENT ................................................................................................... 15 Target markets ............................................................................................................................................................... 16 Product portfolio ............................................................................................................................................................ 18

FINANCIAL INFORMATION ............................................................................................................................. 19 Reorganization of Asseco Poland S.A. ............................................................................................................................ 19 Financial results .............................................................................................................................................................. 20 Cash flow ........................................................................................................................................................................ 23 Statement of financial position .................................................................................... Błąd! Nie zdefiniowano zakładki. Non-recurring events with impact on our financial performance.................................................................................. 25 Opinion on feasibility of investment plans ..................................................................................................................... 26 Asseco Poland S.A. in the capital market ....................................................................................................................... 26 Shareholder structure .................................................................................................................................................... 27 Remuneration policy report ........................................................................................................................................... 28 Discussion of significant risk factors and threats ........................................................................................................... 30

OTHER INFORMATION ............................................................................................................... 33 Explanation of differences between the financial results disclosed in the annual report and previous financial forecasts for the year. .................................................................................................................................................... 33 Opinion on feasibility of the Management Board financial forecasts for 2016 ............................................................. 33 Changes in the Company management policies ............................................................................................................ 33 Remuneration of the management and supervisory personnel .................................................................................... 33 Description of the Company’s sponsoring and charity policy ........................................................................................ 33 Agreements concluded by Asseco Poland S.A. with its management personnel providing for payment of compensations if such persons resign or are dismissed from their positions................................................................ 33 Information on the agreements known to the Issuer which may result in future changes of the equity interests held by the existing shareholders and bondholders .............................................................................................................. 33 Organizational and equity relationships......................................................................................................................... 33 Related party transactions ............................................................................................................................................. 33 Bank loans, borrowings, sureties and guarantees .......................................................................................................... 33 Loans granted during the financial year ......................................................................................................................... 34 Off-balance-sheet items ................................................................................................................................................. 34 Utilization of proceeds from issuance of shares ............................................................................................................ 34 Monitoring of employee stock option plans .................................................................................................................. 34 Significant agreements concluded by the Company ...................................................................................................... 34 Information on judicial proceedings where the value in dispute exceeds 10% of the amount of equity ...................... 34 Information on adhering to the corporate governance standards ................................................................................ 34 Agreement with the entity authorized to audit financial statements............................................................................ 34 Remuneration of the entity authorized to audit financial statements .......................................................................... 34


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MANAGEMENT REPORT ON OPERATIONS OF ASSECO POLAND S.A.

for the year ended December 31, 2016

This Management Report on Operations has been approved for publication by the Management Board of Asseco Poland S.A. on March 16, 2017.

Management Board:

Adam Góral President of the Management Board

Przemysław Borzestowski Vice President of the Management Board

Tadeusz Dyrga Vice President of the Management Board

Krzysztof Groyecki Vice President of the Management Board

Rafał Kozłowski Vice President of the Management Board

Marek Panek Vice President of the Management Board

Paweł Piwowar Vice President of the Management Board

Zbigniew Pomianek Vice President of the Management Board

Przemysław Sęczkowski Vice President of the Management Board

Robert Smułkowski Vice President of the Management Board


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GENERAL INFORMATION ON ASSECO POLAND S.A.

Asseco Poland S.A.

Asseco Poland S.A. (the “Company”, “Asseco”) is the largest Polish information technology company listed on the Warsaw Stock Exchange (WSE ticker: ACP).With a market capitalization amounting to about PLN 4.5 billion (about EUR 1.0 billion), the Company is included in the prestigious WIG20 index. It is also the largest company listed in the IT industry index WIG-Informatyka.

Asseco Poland plays a key role in Asseco Group and is a unique combination of a software house and a service provider.The Company is a producer of state-of-the-art software that supports mission-critical business processes of enterprises in all key sectors of the Polish economy.Asseco’s software applications are used by more than half of Polish banks, the largest insurance, energy and telecommunications companies, miscellaneous healthcare institutions, local and central public administration bodies, as well as by the uniformed services.

Over the twenty years of persistent implementation of our development strategy, which focuses on gaining expertise and development of proprietary software, we have become a leader in the Polish information technology market and accumulated the necessary potential to build a global company.


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Company’s authorities

MANAGEMENT BOARD

Adam Góral

President of the Management Board

responsible for the development vision and strategy of Asseco Group.

Przemysław Borzestowski

Vice President of the Management Board

responsible for Public Administration Division, Capital Market Division, and Office for Protection of Non-Public Information.

Tadeusz Dyrga


responsible for Social Insurance Division, Healthcare Systems Division, and Systems Maintenance Division.

Krzysztof Groyecki


responsible for Healthcare Division.

Rafał Kozłowski


Chief Financial Officer responsible for Finance Division of Asseco Group, and Logistics Department.

Marek Panek


responsible for Development Division of Asseco Group, and EU Projects Office.

Paweł Piwowar


responsible for Energy and Gas Industry Division, Telecommunications and Media Division, and Enterprises Division.


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Zbigniew Pomianek


responsible for Commercial Banks Division, Cooperative Banks Division, Business Intelligence Division, Compliance Department, and Maintenance and Development of Back-Office Systems Department.

Przemysław Sęczkowski


responsible for Public and Investor Relations Department, and Marketing Department.

Robert Smułkowski


responsible for PKO Bank Division.

During the period of 12 months ended December 31, 2016, the Company’s Management Board was composed of the following persons:

Management Board Period of service

Adam Góral 01.01.2016 – 31.12.2016

Przemysław Borzestowski 01.01.2016 – 31.12.2016

Andrzej Dopierała 01.01.2016 – 30.06.2016

Krzysztof Groyecki 01.06.2016 – 31.12.2016

Tadeusz Dyrga 01.01.2016 – 31.12.2016

Rafał Kozłowski 01.01.2016 – 31.12.2016

Marek Panek 01.01.2016 – 31.12.2016

Paweł Piwowar 01.01.2016 – 31.12.2016

Zbigniew Pomianek 01.01.2016 – 31.12.2016

Włodzimierz Serwiński 01.01.2016 – 31.03.2016

Przemysław Sęczkowski 01.01.2016 – 31.12.2016

Robert Smułkowski 01.01.2016 – 31.12.2016


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SUPERVISORY BOARD

Jacek Duch

Chairman of the Supervisory Board

Adam Noga

Vice Chairman of the Supervisory Board

Piotr Augustyniak

Member of the Supervisory Board

Dariusz Brzeski


Artur Kucharski


During the period of 12 months ended December 31, 2016, the Company’s Supervisory Board was composed of the following persons:

Supervisory Board Period of service

Jacek Duch 01.01.2016 – 31.12.2016

Adam Noga 01.01.2016 – 31.12.2016

Piotr Augustyniak 01.01.2016 – 31.12.2016

Dariusz Brzeski 01.01.2016 – 31.12.2016

Artur Kucharski 01.01.2016 – 31.12.2016

Dariusz Stolarczyk 01.01.2016 – 28.04.2016


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Awards and accolades

Asseco has been listed in the Top 5 in 19 categories of the Computerworld TOP 200 report. Asseco has proved to be the best in 8 categories, thereby improving the result from the previous year. Asseco has maintained its leading position in the ranking of IT companies with the largest R&D expenditures. The company continues to be the largest provider of IT solutions and services for the Public Administration and Healthcare sectors. In addition, Asseco has been listed as the number 1 among providers of IT maintenance services, suppliers of customer-tailored software and providers of IT services for large companies and corporations. In turn, Asseco Group has become a leader among the largest IT capital groups.

Asseco has won in the main IT@Bank ranking, prepared by Miesięcznik Finansowy Bank.The company has topped the "Efficiency" category and

has taken second place in the "Position of Companies in the Cooperative Banking Sector" category. Asseco has maintained leading positions in several categories of the ranking for the consecutive year.

Asseco Customer Banking Platform solution has been awarded the title and the recommendation of the "Hit of 2016" in the technology competition organized by Gazeta Bankowa.In addition, in the

"Leader of 2015" ranking, in the category of energy, fuel and chemicals, Tauron Obsługa Klienta has taken second place for the centralization of billing systems for mass clients. Under that project, the company, in cooperation with Asseco Poland, has implemented the Asseco Utility Management Solutions system.

Book of Lists – Book of Lists – No. 1 in the category of “Software Producer”. Our victory in the annual ranking of

the Book of Lists compiled by Warsaw Business Journal. This report contains information on 1600+ companies from various business sectors, including consulting, advertising, telecommunications, information technology, and real estate.

Asseco has received the title of the "Pearl of the Polish Economy" in the category of Large Pearls, which included

companies with revenues over PLN 1 billion. The company has received the title from the Polish Market magazine and the Department of Support and Decision Analysis of the Warsaw School of Economics. The company has taken third place in the ranking of Polish

companies.

Asseco has been awarded in the “Polish Company – International Champion” competition. Asseco has been again awarded in the

“Polish Company – International Champion” competition, in the “Investor" category. Among the winners there were companies which carry out extensive export activities and are successful on foreign markets. The competition is organized by PwC and Puls Biznesu, with the honorary patronage of the Ministry of Development and the Ministry of Foreign Affairs.

Asseco has been awarded the title od the best company in the 2nd edition of the "CEE Capital MarketsAwards"

competition. The choice has been made by the jury which included, among others, investors, bankers and journalists. They have appreciated the role of the company as a leader in dynamic changes in the capital markets in the region of Central and Eastern Europe. The competition has included companies from Poland, Romania, Ukraine, Hungary, the Czech Republic, Lithuania, Estonia, Bulgaria, Croatia, Germany and Slovenia.


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IT MARKET AND ITS OUTLOOK

Development prospects of the global IT market

According to Gartner’s forecasts, in 2017, the global IT industry will grow by 2.7% to reach the total value of USD 3,464 billion.Concurrently, according to these same experts, in 2016 the market recorded adecline by 0.6%, which was caused primarily by lower sales of hardware and communication services. It is worth noting that according to Gartner, the growth of the IT market in the EMEA region – Europe, Middle East and Africa – reached 0.6% in 2016 and will accelerate to 1.9% in 2017.

IT Market in Poland

According to the latest report prepared by PMR, published in September 2016, the Polish information and communication technologies market is growing at the stable rate of 4-5% per year, boosted by Poland’s GDP growth, which, despite slight slowdown to 2.8% in 2016 from 3.6% in 2015, is still higher than in other European countries.

According to PMR, the Polish IT market should grow by 4.1% in 2016 versus 4.2% in 2015. Software and IT services will be the growth engine in the market, but the situation will be more difficult in the computer hardware market, where a drop in the sales of PCs and peripherals is forecast. That will force many distributors to change their strategies and enter new product segments. The value of the whole market is estimated at PLN 34 billion.

Situation in the public administration segment

According to estimates of market research companies, the public administration remains one of the leading recipients of services from the IT industry. Therefore, the situation in this sector has a significant impact on the situation in the whole services and software market. 2016 did not bring the expected increase in orders from the public administration, which, as the PMR’s study indicates, is one of the key challenges for the development of some companies in the sector. Currently, in line with market expectations, an increase in public orders related to the absorption of EU funds is expected in the second half of 2017.

Situation in the financial and general business segments

The economic growth contributes to increasing spending on software and IT services by the general business sector. This trend is clearly visible among smaller and mid-sized companies whose IT needs grow along with the scale of their operations and drive demand for ERP solutions.

Among banks and financial institutions, the spending on technology is determined by intense fight for the customer and competition, in which modern solutions play a very important role. This phenomenon, supporting the demand for IT services, is partially offset by the need for cost savings and a conservative financial policy of these institutions.

According to market research, cloud and SaaS solutions, although still representing small part of the IT market, will grow particularly dynamically in the near term. These solutions are particularly attractive to small and mid-sized companies, which can gain access to more advanced solutions with relatively lower costs. The growing importance of products from that market area will be one of the factors enhancing the need for the expansion of data centers - another rapidly growing sector of the IT market in Poland.

Company’s market position

The Polish IT sector is a competitive and diversified market consisting of both local and leading global companies. Asseco Poland S.A. is one of the largest IT companies in Poland and the largest company in the country focused on the sales of proprietary software and services, and not computer hardware.

According to the latest available estimates of COMPUTERWORLD TOP200, Asseco Poland ranked 12th in the category of the “Largest IT companies operating in Poland”. However, it is worth noting that all companies which have ranked higher than Asseco Poland are producers of computer hardware or companies whose share of hardware in sales exceeds 60%.

IT companies with highest net profit in 2015

Net profit (in millions of PLN)

CD Projekt 336.2

Asseco Poland 257.1

ABC Data 60.3

Comarch 57.7

AB 54.3

Ericpol 51.3

Asseco Business Solutions 33.5

Source: COMPUTERWORLD TOP200 2016, Ranking of IT and telecom companies by net profit generated in 2015.

Concurrently, Asseco is the second-largest capital group and the second-largest IT company in Poland in terms of net profit. Asseco is also the biggest R&D spender in this market. It is also worth noting that another company from the Asseco Group - Asseco Business Solutions – holds 7th position in the rank in terms of profitability.


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Asseco Poland's leading market position is confirmed by the next table, which presents the positions taken by the Company in the COMPUTERWORLD TOP200 ranking that compares leading companies operating in the Polish market by type of business. Asseco Poland is a clear leader in the category of customer-tailored software and IT services for the business sector.

Ranking Ranking position

Producers of customer-tailored software 1

Providers of IT maintenance services 1

Providers of IT services 1

Providers of system integration services 5

Source: COMPUTERWORLD TOP200 2016, Ranking of IT and telecom companies by sales revenues generated in 2015.

In terms of sectors, Asseco Poland is the leader or one of the leading suppliers in the key segments of its business. A drop to 8th position in the ranking of financial institutions is a result of the sales of the insurance competence center to Israeli subsidiary Sapiens in July 2015. Positions in individual segments are presented below:

Ranking of providers of software and services to the sector of

Ranking position

Public administration 1

Healthcare 1

Large companies and corporations 2

Banking 3

Energy industry 2

Financial institutions 8

Telecommunications 5

Source: COMPUTERWORLD TOP200 2016, Ranking of IT and telecom companies by sales revenues generated in 2015.


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Strategy and directions of development Mission

Our mission is to build a reliable and profitable, global information technology company providing high quality software and services.

Values of Asseco Poland – our Source Code

Asseco Poland has come up with its own “source code” that lists the common values shared by Asseco employees. These values have been devised by all of our employees and are recorded in a formal document, which is effective across our organization.

Commitment

We are fully committed to each and every project and the success of our Clients is our greatest satisfaction.

Respect

We require trust, honesty and mutual respect both from ourselves and from others.

Quality

We always maintain high quality standards in all of our activities.

Professionalism

We continually upgrade our qualifications and are willing to share experience.

Effectiveness

We are ambitious and consistent in striving to achieve our goals.

Responsibility

We take full responsibility for our work and environment in which we operate.

Strategy

The foundation of the strategy of Asseco Poland SA is providing proprietary software and IT services to business customers and public administration. The strategy of Asseco Poland is based on two pillars.The first is organic growth which is achieved through proprietary software and services, whereas the second one involves expansion through acquisitions. In 2017, the Company will continue its present approach.

Organic growth

The strategy of organic growth of Asseco Poland S.A.is based on providing proprietary software and services to clients in Poland and abroad. Asseco strategy relies on sector-specific business expertise, which is supported by technological competence. In addition, Asseco leverages on the vast experience of its

international affiliated companies to create a comprehensive portfolio of products satisfying the highest needs of its customers.

The activities of Asseco Poland S.A. focus on providing a wide range of proprietary IT solutions and services. The Company specializes in implementing the largest and most complex IT projects in Poland, offering comprehensive solutions to all sectors of the economy, and also selling standardized products to smaller entities. The Company builds long-term trust-based relationships with customers, becoming their strategic business partner.

One of the elements of organic growth is increasing integration of departments with similar or identical competences. That allows the Company to increase efficiency and improve its offer to customers. In 2016, these processes were manifested in integrating the infrastructure operations in subsidiary Asseco Data Systems and transferring departments implementing third-party solutions to company DahliaMatic.

Apart from operating activity, Asseco Poland S.A., as the owner controlling other companies in Asseco Group, plays a key role in the Group. Asseco sets strategic directions of development of the Group, monitors and supervises their implementation, sets internal policies for the Group's functioning and regulates the relationships between entities which are part of the federation.

Expansion through acquisitions

Asseco Poland S.A. has been pursuing successful acquisition policy in Poland and abroad for many years, ranking among the most experienced companies in this field in Poland. Since 2004, the Company has concluded over 60 purchase transactions, repeatedly increasing the scale of its operations and geographic reach.

Above all, the company is interested in profitable entities with committed and highly-specialized employees willing to further develop themselves by connecting to a unique federation model of Asseco or integrating with Asseco Poland S.A.. The purpose of acquisitions of Asseco is to increase competence in key sectors of activity, enter new geographic markets, or strengthen the position of the entire Asseco Group in the countries where it has been already active.


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Target markets

Asseco Poland is specialized in the development of proprietary IT solutions for all sectors of the economy.Asseco’s product portfolio can be divided into three main sectors: banking and finance, public administration and general business. Each of these sectors comprises a wide range of institutions that use proprietary IT systems, infrastructure as well as third-party software delivered by Asseco Poland.

▪ Banking and Finance

Production of banking software is one of the key businesses of Asseco Poland. The Company continues to improve and further develop its IT solutions tailored to meet the banking sector’s growing expectations from information technology.

Asseco’s flagship product for the banking sector is the comprehensive IT suite called def3000 which is used by over a dozen financial institutions in Poland.In addition, we offer dozens of specialized ready-to-implement solutions, requiring only some adaptation to specific operations of a particular institution.In order to meet the market expectations, Asseco Poland has also developed modern e-banking and omnichannel solutions (Asseco Customer Banking Platform) as well as cloud products.

Apart from the above-mentioned products and services provided for the banking sector, Asseco also offers comprehensive solutions supporting the operations of brokerage houses and capital market participants. The flagship product offered in this area is Promak. After the reorganization carried out in 2015 and 2016, other companies from the Asseco Group offer specialized software to other segments of the financial sector - Israeli company Sapiens, which is a competence center for the insurance sector, and

Asseco Data Systems, which offers software to lease and factoring businesses.

▪ Public Institutions

Asseco Poland is the largest IT provider for the public administration sector in the country. It supplies the largest and most complex projects at the central level, as well as smaller solutions at the local level and in the healthcare sector.

Central level - Asseco Poland develops and implements software solutions for the public administration in the areas that, due to their nature, cannot be supported by ready-made tools. These are mostly complex systems with powerful functionality suitable for processing of large data volumes. Thelargest information technology project in Poland – the Comprehensive Information System of the Social Insurance Institution (ZUS) – has been implemented by Asseco. Furthermore, Asseco developed the Central Register of Vehicles and Drivers for the Ministry of the Interior and Administration, Information System for the National Border Guard, as well as IT solutions for the Agency for Restructuring and Modernization of Agriculture.

As the only IT company of Central and Eastern Europe, we executed over 50 prestigious projects for the EU and NATO agencies, including the EU border protection system for the Frontex agency. Experience gained during the implementation of projects for international institutions allowed the Company to move from the position of a service provider to the position of a supplier of solutions and products.

Over the past two years, the Company has invested in the development of innovative solutions in the areas of: unmanned platforms, examination and data

Banking and Finance

PLN 316.7 m34%

Public Administration

PLN 426.1m45%

General BusinessPLN 184 m

20%

OtherPLN 10 m

1%

2016

Banking and Finane

PLN 305 m28%


PLN 472.4 m43%

General BusinessPLN 216.2 m

20%

OtherPLN 98.2 m

9%

2015


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analysis, command support systems, satellite solutions and cybersecurity. These investments are a response to the needs of both the Ministry of Defense of the Republic of Poland as well as foreign customers. These activities have been closely connected with the plans to increase the country's defense budget and update the Plan of Technical Modernization of the Polish army.

Local Governments – In cooperation with other companies from Asseco Group, Asseco Poland provides proprietary IT solutions for all levels of local administration bodies. A significant advantage of our software is that it can be easily integrated with specialized tools such as digital maps or metropolitan networks.

Healthcare – Asseco is an undisputed leader in the market of IT solutions for all types of medical facilities. Our solutions are used by hundreds of major hospitals and clinics across Poland. Asseco’s services include professional consulting on the design, implementation and maintenance of information systems for health insurance companies, and the provision of comprehensive solutions for hospitals and clinics. Asseco delivers patient service solutions, contract settlement systems as well as facility management solutions.

In this sector, Asseco’s flagship product is AMMS (Asseco Medical Management Solution), a comprehensive package of information systems designed to help manage large and medium-sized hospitals, polyclinics, medical centers, outpatient clinics and emergency departments.

▪ General Business

Asseco Poland offers comprehensive proprietary solutions that are capable of handling multi-million customer databases and are customized for the specific needs of telecommunication, media, energy, gas and utility enterprises. Over a 20-year long presence of our solutions in this sector resulted in strategic partnerships with many major enterprises which appreciate the in-depth professional knowledge and experience of our specialists and the flexibility of our solutions.

Our product portfolio dedicated to the Telco&Utilities sector includes billing systems, fraud detection systems, sales and CRM applications, portal applications, data warehouses, BI tools, and many more.The product portfolio is supplemented with technical infrastructure and asset management systems, and GIS/NIS solutions.

Asseco Poland has, for many years, been one of the key providers of billing systems to Orange Poland. Our software solutions are also used by other mobile operators, such as T-Mobile and Polkomtel, as well as media companies. Moreover, our solutions are utilized by major energy holdings operating in Poland, such as Tauron and Enea.


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Product portfolio

Asseco Poland is focused on providing customers with proprietary solutions in the form of software and services. Third-party software and IT equipment are provided only when necessary. As a result, the Company offers its customers top-class solutions tailored to their needs.

▪ Dedicated solutions

Asseco Poland is the most experienced Polish IT company when it comes to the execution of large-scale and complex IT projects, implemented to individual customer needs. A good example of Asseco’s competence in this area is the IT project implemented for the Social Insurance Institution (ZUS), the largest in the history of our country.The Comprehensive Information System handles more than 24 million unique accounts, 2 trillion contributions and is used by over 30 thousand users on a daily basis.The Comprehensive Information System of ZUS won the main prize in the “eEurope Awards for eGovernment – 2005” competition, which was organized by the European Institute of Public Administration (EIPA), working under the auspices of the European Commission. The ZUS’s CIS was awarded for the creation of optimum environment for successful implementation of a public administration project.

▪ Comprehensive solutions for business sectors

We offer comprehensive IT packages that are customized to individual needs of large and mid-sized companies virtually from every sector of the economy. In this category, our product portfolio includes comprehensive systems dedicated to the banking sector (Asseco def3000), power industry (AUMS), healthcare (AMMS), as well as for brokerage houses (Promak). In recent years, Asseco's software has won recognitions and awards from local and

international institutions from the sector. The AUMS system has won recognition from the renowned research company Gartner which placed it in its prestigious “Magic Quadrant” report for two years in a row (2014 and 2015). In addition, Asseco's banking software def3000/TR won similar recognition in 2014.

▪ Standard software packages

We also provide standard software packages for thousands of small and mid-sized companies.With no need for customer-tailored products and at an affordable cost, firms can use Asseco’s out-of-the-box software to support their routine enterprise management functions. A good example of a standard software package is mMedica – software dedicated to outpatient clinics and small hospitals.

▪ Cloud computing solutions

Small and mid-sized enterprises can use our IT solutions available over the Internet. With a minimum of effort and cost and maximum benefits, our customers may take advantage of our knowledge and experience without investing large sums of money in IT infrastructure or a team of IT experts. Major clients for cloud-based e-banking systems delivered by Asseco Poland are cooperative banks operating in Poland.

Proprietary software and

servicesPLN 872.5 m

93%

HardwarePLN 15.2 m PLN

2%

Third-party software

PLN 44.7 m5%

OtherPLN 4.4 m

2016

Proprietary software and

servicesPLN 941.3 m

86%

HardwarePLN 75.7 m PLN

7%

Third-party software

PLN 71.5 m7%

OtherPLN 3.3 m 2015


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FINANCIAL INFORMATION

Reorganization of Asseco Poland S.A.

The results of Asseco Poland were affected by the reorganization of its business in Poland in 2016. The process was connected with the merger with Infovide-Matrix (Regulatory FillingNo. 4,8,10,22/2016).

The company's objective was to create competence centers by consolidating organizational units of similar or identical business areas. As part of these changes, divisions dealing with implementation of third-party software (SAP, Oracle, Microsoft) have been transferred from Asseco Poland and Infovide-Matrix to DahliaMatic. Divisions responsible for the banking, energy and telecommunications sector have joined Asseco Poland, while the infrastructure division has been transferred to Asseco Data Systems.

As a result, Asseco Poland remains a competence center in the Polish part of the Group for large and mid-sized businesses, the financial sector and the

public administration (health care and central level). Asseco Data Systems focuses on infrastructure solutions and local administration, and DahliaMatic is responsible for the implementation of third-party solutions.

Since the infrastructure division of Asseco Poland was a separate operating segment of significant relevance to the Company, the comparative data have been changed due to the recognition of discontinued operations. In the period ended July 1, 2016, the revenues of the infrastructure division amounted to PLN 64.1 million, while in 2015, they amounted to PLN 221.2 million. The detailed impact of this change on the presented financial results is described in paragraphs II.8 and IV of the financial statement of Asseco Poland for the period of 12 months ended December 31, 2016

.

Infrastructure Division Infrastruktury

Banking

Energy

Telecommunication

SAP

Implementation Center

Business Division (SAP, Oracle, Microsoft)


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Financial results

In 2016, the Company recorded lower sales revenues than in 2015. That was mainly a result of slowdown in the settlement of the tenders in the public administration and healthcare sectors, as well as lower scale of activity in the energy sector after the end of the implementation contract for Tauron Polska Energia in 2015.

A drop in the sales of proprietary software and services - a key parameter from the point of view of the Company's strategy - was smaller than a decrease in the total sales revenues and reached 7.3%.

Presented below are the operating results for the year ended December 31, 2016 as well as for the comparable period of the previous year:

mPLN 12 months ended Dec. 31, 2016(audited)

12 months ended Dec. 31, 2015 (audited)

Change

Revenues 936.8 1,091.8 (14.2%)

Proprietary software and services 872.5 941.3 (7.3%)

Gross profit/(loss) on sales 314.6 293.8 7.1%

Selling costs (44.2) (49.0) (9.8%)

General and administrative expenses

(81.0) (74.8) 8.3%

Other operating activities 1.6 7.2 (77.8%)

Operating profit 191.0 177.2 7.8%

EBITDA 243.4 230.1 5.8%

Net profit 353.4 254.4 38.90%

EBITDA = EBIT + depreciation and amortization

▪ Revenues

The revenues of Asseco Poland are well diversified between three key segments of the Company’s activity – the public administration, the banking and finance sector and the general business sector. In spite of the drop in the sales revenues, the public administration sector accounted for 45% of the Company’s sales revenues. A significant drop of sales – to 1% in 2016 – was recorded in the category of other operating activities.

In whole 2016, the sales revenues of Asseco Poland dropped by 14.2% on annual basis to PLN 936.8 million.

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Key operation data of Asseco Poland 2010-2016

Revenues Proprietary software and services EBIT

Banking and Finance

34%


45%

General Business20%

Other1%

20162016


21


Asseco Poland is the most experienced Polish provider of IT solutions and services for the central administration.

The results in this segment in 2016 were mainly affected by a delay in expected rebound in the announcements of new tenders related to the absorption of the EU funds.

In the case of Asseco Poland, a drop in revenues generated by these tenders was offset by a significant share of long-term contracts with existing clients in the portfolio - both for the maintenance of information systems implemented in recent years and for development of key solutions. As a result, the segment's revenues decreased by 9.8% to PLN 426.1 million in 2016.

In 2016, we continued to work for the Social Insurance Institution (ZUS) in the scope of maintenance and upgrading of their Comprehensive Information System (CIS). In September 2016, Asseco Poland and ZUS extended the contract for the maintenance of the system by the end of June 2018. In addition, Asseco Poland signed several other contracts for the maintenance and upgrading the systems for existing customers: the Agency for Restructuring and Modernization of Agriculture (ARiMR) and the Agricultural Social Insurance Fund (KRUS).

In the healthcare segment, where the slowdown in the announcements of new tenders was particularly significant, the Company focused on providing services to existing customers, as well as adding new functionalities and developing AMMS software.

While preparing for the challenges associated with the modernization and computerization of the Polish Army, Asseco Poland continued to expand its competences in the security sector. The company signed a contract with the European Space Agency to develop new tools supporting the functioning of the European satellite system, developed a strategy for the transfer of IT systems for one of the NATO's agencies and began cooperating with the Naval Academy.

Banking and Finance

Asseco Poland is the national leader in the development of software for financial institutions. More than half of Polish banks use IT solutions produced by Asseco. The Company is furthermore one of the leading providers of IT systems for the capital market.The revenues generated by our

Banking and Finance segment increased in 2016 by 3.8% to PLN 316.7 million.

In 2016, we continued our long-lasting cooperation with PKO BP, which is the largest bank in the region. In addition, Asseco managed to strengthen its leading position as a provider of software for the cooperative banking sector. The def3000 core banking systems have been implemented for cooperative banks in Aleksandrów and Krasnystaw.

Changing trends in the banking sector affect the IT needs of financial institutions, increasing their demand for omnichannel and mobile solutions. In 2016, Asseco Poland successfully implemented the Asseco Customer Banking Platform system for the individual clients of Raiffeisen Polbank and the customers of cooperative banks affiliated with Spółdzielcza Grupa Bankowa. The system corresponds to the latest trends in the retail banking sector.

The company is also one of the major developers of software for capital markets. In 2016, it worked on the implementation of PROMAK Powiernik and Portfel systems in leading Polish brokerage houses. At the same time, it worked on extending the functionalities of PROMAK software, which, among others, adapted it to the regulatory requirements of MiFID II. The new regulation will apply to all capital market participants from 2018.

General Business

After a period of implementation and consolidation of the billing systems in two energy companies - Enea and Tauron - Asseco's specialists continued the cooperation with the clients and worked on the development of the AUMS system. Also, the system was being implemented in the Network Information Security Agency (INSA) in Ethiopia. The smaller scope of implementation works affected the revenues in the segment, which dropped by 14.9% to PLN 184 million in the entire year.

In the area of telecommunication and media, the process of the centralization of the systems of mobile operator Polkomtel and Cyfrowy Polsat began. The project is being implemented in the cooperation with the Chinese company Huawei. In 2016, works were completed regarding the transfer of 3 million customers of Orange Polska to a new billing system. Also, other projects were continued for that operator. In addition, the Company continued works for T-Mobile operator which had begun earlier.


22

▪ Profitability

Presented below are the key profitability results for the year ended December 31, 2016 as well as for the comparable period of the previous year:

Dec. 31, 2016

(audited) Dec. 31, 2015

(audited) Change

Gross profit margin 33.6% 26.9% 6.7 pp

EBITDA margin 26.1% 21.2% 4.9 pp

Operating profit margin 20.4% 16.2% 4.2 pp

Net profit margin 37.6% 23.5% 14.1 pp

In 2016, all of our key profitability ratios improved in comparison with 2015. In spite of lower revenues, gross profit increased by 7.1% toPLN 314.6 million in that period. Profitability improved thanks to the change of the sales’ structure after the reorganization of Asseco Group in Poland and separation and transfer of the infrastructure and general business division from Asseco Poland to Asseco Data Systems and DahliaMatic.As a result, the share of Asseco Poland’s proprietary software and services’ sales increased – it is characterized by higher profitability than the sales of third-party software and hardware. That translated into higher gross profit margin, which increased by 6.7 percentage point to 33.6%. The improvement in gross profit also translated into higher EBITDA, which increased by 5.5% toPLN 244.2 million in the reported period. Higher profit with lower revenues resulted in an increase in margin. In addition, due to delays in the announcements of new tenders in the public administration segment, higher share of revenues was generated by long-term maintenance contracts, characterized by higher profitability than implementation contracts.As a result, EBITDA margin for that segment improved. In turn, total EBITDA margin increased by 4.9 percentage point to 26.1% in 2016. With stable amortization level in the Company, the improvement in EBITDA was the main factor behind higher EBIT, which increased in 2016 by 7.8% to PLN 191 million versus 2015. The operating result in 2016 was negatively affected by a write-down in the amount of PLN 6.5 million for the impairment of trade receivables from KT Corporation, which constitutes half of the disputed amount. However, the amount of the write-down was

significantly lower than the amounts of one-offs which affected the operating results in 2015. The net profit and margin of Asseco Poland are largely dependent on the level of dividends received from the subsidiaries. These dividends are financial revenue of the Company. In 2016, the revenues from dividends reached PLN 209.3 million and were significantly higher than similar revenues in 2015. These factors resulted in a dynamic improvement in net profit to PLN 353.4 million and a significant improvement in net profit margin to 37.6%. Quarterly financial results The tables below present our financial results for the individual quarters of 2016 as well as for the comparable periods of 2015:

mPLN Q1'16 Q2'16 Q3'16 Q4'16

Revenues 213.0 239.5 233.0 251.3

of which proprietary software and services

198.6 221.7 232.8 219.4

Margin IV 42.8 46.9 50.3 49.3

EBIT 43.6 47.1 50.7 49.6

Net profit 183.1 74.0 45.2 49.8

Depreciation and amortization

(13.6) (13.2) (13.3) (12.3)

CFO 19.3 (13.0) 73.3 69.6

CAPEX (incl. R&D) (5.2) (4.8) (7.0) (7.3)

Margin IV = net profit on sales CFO = net cash provided by (used in) operating activities CAPEX = expenditures for purchases of property, plant and equipment and intangible assets + expenditures for R&D projects

mPLN Q1'15 Q2'15 Q3'15 Q4'15

Revenues 235.9 264.9 246.5 344.5

of which proprietary software and services

220.7 238.9 263.7 218.0

Margin IV 51.6 50.0 63.4 10.2

EBIT 51.9 56.6 60.3 8.4

Net profit 124.8 80.9 48.1 3.3

Depreciation and amortization

(13.4) (13.6) (13.5) (12.4)

CFO 51.9 24.8 72.9 127.1

CAPEX (incl. R&D) (9.1) (11.3) (13.1) (6.6)

Margin IV = net profit on sales CFO = net cash provided by (used in) operating activities CAPEX = expenditures for purchases of property, plant and equipment and intangible assets + expenditures for R&D projects


23

Cash flow

In 2016, cash flows from operating activities (CFO) were lower than in 2015 due to delays in payments from Asseco Poland's business partners.

Lower cash flows from operating activities were partially offset by positive cash flows from investing (CFI), which, in turn, were boosted by higher dividend revenues, lower expenditure on the purchase of shares in other companies and Asseco Western Europe's share buyback from Asseco Poland, aimed at share cancellation, conducted in May 2016.

The following table presents major lines of the separate statement of cash flows for the years 2016 and 2015.

Dec. 31, 2016 Dec. 31, 2015

CFO 149.2 276.7

CFI 113.6 (39.2)

CAPEX (24.3) (40.1)

M&A expenditures (124.0) (143.3)

Free cash flow 124.9 236.6

Dividend income 193.3 130.1

CFF (286.2) (280.9)

Dividend payment (249.8) (240.7)

Net change in cash and cash equivalents

(23.4) (43.4)

Cash conversion rate (FCF/EBIT Non-IFRS)

61.86% 119.49%

CFO = net cash provided by (used in) operating activities Free cash flow - CFO-CAPEX CFI = net cash provided by (used in) investing activities CAPEX = expenditures for purchases of property, plant and equipment and intangible assets + expenditures for R&D projects M&A expenditures = expenditures for company acquisitions CFF = net cash provided by (used in) financing activities

In 2016, the Company’s cash flows were also influenced by merger and acquisition (M&A) transactions, which mainly involved purchases of shares in Asseco Poland's subsidiaries:

▪ In December 2016, Asseco Poland bought from the European Bank for Reconstruction and Development (EBRD) 2,221,356 shares of Asseco South Eastern Europe for the total amount of PLN 21.09 million (Regulatory Filling No. 27/2016). As a result of the transaction, Asseco Poland holds 55.34% of the shares and votes at the general meeting of ASEE.

▪ Also in December 2016, as a result of a tender offer for shares of Asseco Central Europe, Asseco Poland purchased 1,242,480 shares of the company for the total amount of PLN 29.2 million (Regulatory Filling No. 25/2016). As a result of the

transaction, the stake of Asseco Poland in the share capital of ACE increased to 99.32%.

▪ In June 2016, as a result of exercising a put option, Asseco Poland purchased 30% of shares in R-Style Softlab for the total amount of PLN 46.1 million. As a result of the transaction, Asseco Poland's stake in R-Style has increased to 100%.

▪ In addition, in 2016, Asseco Poland increased its stake in Exictos (by 8%), UAB Asseco Lietuva (by 15.6%) and UAB Sintagma (by 15.6%).

In 2016, a dividend for 2015 was paid in the amount of PLN 249.8 million. It was slightly higher than PLN 240.7 million paid in 2015.

The lower level of the cash conversion rate (i.e. FCF/adjusted EBIT) in 2016 was a result of lower operating cash flows related to a delay in the payment for supplies and services by KT Corporation and higher level of operating profit. As a result, the rate dropped to 61.9% at the end of 2016 from 119.5% in the corresponding period in the previous year.


24

Balance sheet

In 2016, the total value of Asseco Poland’s assets slightly dropped to PLN 5.6 billion from PLN 5.63 billion in the previous year. The Company's assets consist primarily of non-current assets worth PLN 5.13 billion. Among fixed assets, the most important items are: goodwill from business combinations, amounting to PLN 2.01 billion as at December 31, 2016 and investments in subsidiaries and associates, which increased to PLN 2.4 billion at the end of the year. The investments in subsidiaries and associates largely involve securities of public companies listed in Poland or abroad. It is worth noting that in the case of the securities of Israeli holding company Formula Systems, consisting of Israeli companies of Asseco Group (Matrix IT, Magic Software and Sapiens International), the market valuation is significantly higher than the book value. A similar situation can be observed in the case of Asseco Business Solutions, which is controlled by Asseco Poland indirectly through Asseco Enterprise Solutions. The table below presents the market and book value of the publicly-listed investment assets of Asseco Poland.

*Indirectly through Asseco Enterprise Solutions

▪ Liquidity

In the analysis of liquidity, Asseco Poland S.A. uses the ratio of working capital, defined as the difference between current assets and current liabilities. It represents the amount of capital which is used to finance current assets. A drop in that ratio is a result of lower level of current assets as at December 31, 2016, which was mainly caused by a drop in trade receivablesat the end of the period to PLN 366 millionfrom PLN 508.3 million at the end of 2015, and lower level of cash. In turn,

working capital was positively affected by a reduction in current liabilities to the level of PLN 250.1 million at the end of the financial year, mainly resulting from lower trade payables. In spite of lower level of working capital at the end of 2016, the liquidity ratios improved thanks to a drop in current liabilities by PLN 116.4 million. The current liability ratio increased to 1.9 and the quick liability ratio went up to 1.8. As in the previous reporting periods, both ratios in 2016 are close to each other, which is a result of low level of inventories held by the Company (PLN 6.5 million at the end of 2016) and prepayments (PLN 8.8 million at the end of 2016). The table below presents the closing balances of working capital as at December 31, 2016 and at the end of the previous comparable period.

Dec. 31, 2016 Dec. 31, 2015

Working capital (in millions of PLN) 216.2 290.4

Current liquidity ratio 1.9 1.8

Quick liquidity ratio 1.8 1.7

Absolute liquidity ratio 0.1 0.1

Working capital = current assets - current liabilities Current liquidity ratio = current assets / current liabilities Quick liquidity ratio = (current assets - inventories – prepayments) / current liabilities Absolute liquidity ratio = (cash + short-term bank deposits) / current liabilities

In spite of a drop in current liabilities, the absolute liquidity ratio did not improve due to a lower level of cash and deposits at the end of 2016 versus December 31, 2015.

▪ Debt

As at December 31, 2016, the total value of Asseco Poland S.A.’s assets did not significantly change versus the end of the previous year and reached PLN 5.6 billion. Therefore, lower level of both non-current and current liabilities translated into a drop in debt ratios and a debt/equity ratio.

The below table presents debt ratios as at December 31, 2016 and at the previous reporting date.

December 31, 2016 December 31, 2015

Total debt ratio 8.7% 11.3%

Debt/equity ratio 3.4% 3.9%

Short-term debt ratio 4.5% 6.5%

Long-term debt ratio 4.3% 4.8%

Total debt ratio = (non-current liabilities + current liabilities) / assets Debt/equity ratio = (interest-bearing bank loans + debt securities + finance lease liabilities) / equity Short-term debt ratio = (current liabilities / assets) Long-term debt ratio = (non-current liabilities / assets)

507

292

427

69

507

266

1 130

359

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Market and book value of investment assets (in millions of PLN)

Book value Market value


25

The total debt ratio dropped to 8.7% thanks to lower level of liabilities which decreased by PLN 145.8 million in 2016. Non-current liabilities slightly dropped thanks to regular repayment of the non-current loans and finance lease liabilities. A reduction in these liabilities translated into a drop in non-current liabilities by PLN 29.4 million and the improvement in the long-term debt ratio, which reached 4.3% at the end of December 2016 versus 4.8% in the same period in the previous year.

Thanks to a significant reduction in the current liabilities, to the value close to the level of non-current liabilities, the short-term debt ratio significantly improved. In 2016, above all, a reduction was recorded in the trade payables, liabilities to the state and local budgets and other liabilities. As a result, the short-term debt ratio reached 4.5% at the end of 2016, two percentage points more than as at December 31, 2015.

Non-recurring events with impact on our financial performance

Non-recurring events with impact on the financial performance, assets and cash flow of Asseco Poland in the year 2016 and in the comparable period were as follows:

▪ Sales of the organized parts of the Company: "Pion SAP" (SAP Division - with a total value of PLN 13.8 million) and "Pion Przedsiębiorstw" (General Business Division - with a total value of PLN 28.2 million) to DahliaMatic Sp. z o.o. in exchange for 832 new shares of DahliaMatic with a nominal value of PLN 500 each.The transactions have been described in explanatory note V.10 under the supplementary information to the financial statements of Asseco Poland for the period of 12 months ended 31 December, 2016.

▪ Sales of the organized part of the Company: "Pion Infrastruktury" (Infrastructure Division - with a total value of PLN 188.1 million) to Asseco Data Systems S.A. in exchange for 3,657,777 ordinary registered shares with a nominal value of PLN 10 each, which were issued by Asseco Data Systems S.A. as part of the share capital increase.

▪ An increase of Asseco Poland’s engagement in Exictos, UAB Asseco Lietuva and UAB Sintagma through the purchase of their shares in 2016.The transactions have been

described in explanatory note V.10 under the supplementary information to the financial statements of Asseco Poland for the period of 12 months ended 31 December, 2016.

▪ Asseco Western Europe S.A.'s buy-back on May 25, 2016. Asseco Western Europe S.A. purchased from Asseco Poland S.A. 15,744,681 of its own shares for cancellation. The value of the transaction reached PLN 59.2 million.

▪ Acquisition of 30% of the shares of R-Style Softlab JSC (Regulatory Filling No. 21/2016) for the total value of USD 12.09 million. As a result of the transaction, Asseco Poland's stake in the company increased to 100%.

▪ Acquisition of the shares of Asseco Central Europe on December 22, 2016 (Regulatory Filling No. 25/2016). As a result of a tender offer, Asseco Poland purchased 1,242,480 shares of the company, representing 5.82% in its share capital. As a result of the transaction, Asseco Poland's stake in the company increased to 99.32% from 93.51%.

▪ Acquisition of the shares of Asseco South Eastern Europe S.A. on December 22, 2016 (Regulatory Filling No. 27/2016). Asseco Poland bought from the European Bank for Reconstruction and Development (EBRD) 2,221,356 shares of Asseco South Eastern Europe, representing 4.28% in its share capital, for the total amount of PLN 21.1 million. As a result of the transaction, Asseco Poland's stake in the company increased to 55.34% from 51.06%.

▪ Write-down for the impairment of trade receivables from KT Corporation. As at December 31, 2016, the Company held trade receivables from KT Corporation amounting to PLN 88.9 million. The Company made a write-down amounting to PLN 6.5 million, which constitutes half of the disputed amount. The amount of the write down for this impairment was determined individually, regardless of the rules resulting from the Company's accounting policy.

▪ Sale of a business venture of Asseco Poland S.A. to its subsidiary Insseco Sp. z o.o., which has been described in explanatory note V.9 under the supplementary information to the financial statements of Asseco Poland for the year 2015.This transaction concerned certain assets, including copyrights as well as the rights and obligations arising from contracts


26

that have so far been executed by the Company for some clients in the commercial insurance industry.

▪ Acquisition by Asseco Poland of a 61.38% stake in Portugal-based Exictos SGPS for EUR 21.48 million. This transaction has been described in detail in explanatory note V.9 under the supplementary information to the consolidated financial statements of Asseco Group for the period of 12 months ended December 31, 2015.

▪ Decision to create an allowance for our trade receivables from Mostostal Warszawa, in the amount of PLN 7.7 million.

▪ Acquisition of 100% of shares in Infovide-Matrix S.A., a Polish IT company listed on the Warsaw Stock Exchange. This transaction has been described in our Regulatory Filling No.

28/2015 as well as in explanatory note V.9 under the supplementary information to the consolidated financial statements of Asseco Group for the period of 12 months ended December 31, 2015.

Opinion on feasibility of investment plans

Asseco Poland S.A. pays its trade payables, settles the state obligatory charges, and fulfils its investment obligations on a timely basis. We maintain loan facilities at various banks in order to diversify our sources of financing.The Company pays its liabilities from current operating revenues which may be supplemented with third party financing, in the form of short-term bank overdraft facilities, bank term loans, borrowings, or capital contributions.

Asseco Poland S.A. on the capital market

2016-01-04 2016-03-31 2016-06-30 2016-09-30 2016-12-31 Δ 12M

Asseco Poland S.A. (PLN) 55.50 60.59 52.51 55.71 53.96 -2.77%

WIG20 (points) 1,804.42 1,997.69 1,750.69 1,709.51 1,947.92 7.95%

WIG (points) 45,356.65 49,017.35 44,748.53 47,084.949 51,754.03 14.10%

WIG-Info (points) 1,586.45 1,772.31 1,714.45 2,032.44 2,155.40 35.86%

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27

Company’s stock information

Total number of shares 83,000,303

ISIN PLSOFTB00016

GPW ACP

Reuters ACPP.WA

Bloomberg ACP PW

In 2016, the share price of Asseco Poland followed the WIG20 index for most of the year and only in the last quarter it did not benefit from improving sentiment on the capital market. As a result, the share price of Asseco dropped by 2.8% during the year while the WIG20 index rose by 7.95% and the WIG index increased by 14.1%. The sector index WIG-Informatyka, in which Asseco Poland has a significant share, grew by 35.9%.

For most of the previous year, the Polish capital market was influenced mainly by political factors in the country and abroad. In Poland, the proposals for

changes to economic policy affected the share prices of the largest companies, especially in the banking and energy sector.

Globally, investors focused on the referendum on the exit of the Great Britain from the European Union - the decision of the country to leave the EU affected the emerging markets, including Poland. In the second half of the year, investors shifted their focus to the US presidential election. The nomination of Republican candidate Donald Trump has been positively received by investors and, together with rising prices of oil and commodities, has led to an increase in risk appetite. That has also positively affected the stock exchange in Warsaw.

The factor which had a stabilizing effect on the share price of Asseco Poland was the payment of a dividend in the amount of PLN 3.01 per share.

Shareholder structure

Major Shareholders as at December 31, 2016

As at the date of publication of this report, i.e. on March 16, 2017, the Shareholders who, either directly or through their subsidiaries, hold at least 5.0% of total voting rights are as follows:

Shareholders as at March 16, 2017

Number of shares held Percentage of total voting

rights

Aviva Open Pension Fund2) 9,384,498 11.31%

Adam Góral, President of the Management Board3)

8,083,000 9.74%

PZU Open Pension Fund1) 4,281,040 5.16%

NN Open Pension Fund4) 4,171,121 5.02%

Other shareholders 57,080,644 68.77%

83,000,303 100%

1) In accordance with the regulatory filling no. 38/2010 of June 2, 2010 2) In accordance with the regulatory filling no. 02/2012 of January 5, 2012 3) In accordance with the regulatory filling no. 51/2012 of December 15, 2012 4) In accordance with the regulatory filling no. 21/2015 of October 19, 2015

As at December 31, 2016, the Shareholders who, either directly or through their subsidiaries, held at least 5.0% of total voting rights were as follows:

Shareholders as at December 31, 2016

Number of shares held Percentage of total

voting rights



8,083,000 9.74%




83,000,303 100%

1) In accordance with the regulatory filling no. 38/2010 of June 2, 2010 2) In accordance with the regulatory filling no. 02/2012 of January 5, 2012 3) In accordance with the regulatory filling no. 51/2012 of December 15, 2012

Aviva Pension Fund holds 9,384,498 shares representing

11.31% of voting rightsAdam Góral holds 8,083,000 shares

representing 9.74% of voting rights

PZU Pension Fund holds 4,281,040 shares


Nationale-Nederlanden Pension Fund holds

4,171,121 shares representing 5.02% of

voting rights

Other shareholders hold 57,080,644 shares



28

4) In accordance with the regulatory filling no. 21/2015 of October 19, 2015

As at the publication date of the prior report, i.e. on November 17, 2016, the Shareholders who, either directly or through their subsidiaries, held at least 5.0% of total voting rights were as follows:

Shareholders as at November 17, 2016

Number of shares held Percentage of total voting

rights



8,083,000 9.74%




83,000,303 100%

1) In accordance with the regulatory filling no. 38/2010 of June 2, 2010 2) In accordance with the regulatory filling no. 02/2012 of January 5, 2012 3) In accordance with the regulatory filling no. 51/2012 of December 15, 2012 4) In accordance with the regulatory filling no. 21/2015 of October 19, 2015

Shares held by the management and supervisory personnel

The numbers of Asseco Poland shares held by its management and supervisory staff are presented in the table below:

March 16, 2017 Dec. 31, 2016

Jacek Duch – Chairman of the Supervisory Board

31,458 31,458 31,458

Adam Góral – President of the Management Board

8,083,000 8,083,000 8,083,000

Tadeusz Dyrga – Vice President of the Management Board

3,710 3,710 3,710

Robert Smułkowski – Vice President of the Management Board

2,212 2,212 2,212

The remaining members of the Supervisory Board and Management Board did not hold any shares in Asseco Poland S.A. in any of the above-mentioned periods.

Remuneration policy report

The objective of the Company’s remuneration policy is to support the strategy of achieving the target business results, while meeting the needs of employees within the Company’s financial capabilities.

The human resources policy is implemented in accordance with the provisions of law as well as internal procedures and standards adopted by the Company.

The policy guidelines take into account the processes of recruitment, retaining and development of employees.

The rules included in this policy are applied to all of the Company’s employees.

General rules for remuneration practices:

▪ the remuneration system should be adjusted to match the Company’s business strategy, objectives and long-term interests;

▪ an incentive system should be used in order to ensure adequate human resources;

▪ the amount of remuneration should depend on the type of work performed and qualifications required for the job, taking into account the quality of work performed;

▪ the remuneration system is based on the Company’s competence scheme which organizes the tasks and roles of employees, and also promotes the development of organizational culture oriented towards customers, quality, achievement of results, collaboration, and professional development;

▪ the remuneration system should be designed, implemented and supervised in compliance with the principles of effective finance and risk management of the Company.

The policy of remuneration payable to the members of the Company’s management body is based on the below listed principles; however, the amount of variable remuneration shall be subject to an upper limit:

▪ each of the Management Board Members is be paid a fixed remuneration in the gross amount of PLN 30,000 per month;

▪ variable remuneration of a Member of the Management Board depends on:

• the amount of margin IV achieved by the business units supervised directly by a particular Member of the Management Board;

• the amount of net profit earned by the Company’s capital group.

The table below presents the gross amounts of total and variable remuneration payable to the Members of the Management Board for performing their managerial duties at Asseco Poland S.A. during the year 2016:


29

Gross amount of remuneration for the period (in millions of PLN)

Variable remuneration

Total remuneration

Adam Góral 1.52 1.88

Przemysław Borzestowski 0.75 1.11

Andrzej Dopierała 0.03 0.20

Tadeusz Dyrga 1.43 1.79

Krzysztof Groyecki 0.26 0.47

Rafał Kozłowski 0.59 0.95

Marek Panek 0.86 1.21

Paweł Piwowar 1.34 1.70

Zbigniew Pomianek 1.77 2.13

Włodzimierz Serwiński 0.12 0.21

Przemysław Sęczkowski 0.74 1.10

Robert Smułkowski 0.78 1.14

Total 10.19 13.89

The total amount of remuneration payable to the Management Board Members is largely dependent on the Company’s financial performance. The remuneration model adopted by the Company is aimed to award the Management Board Members and other managerial staff depending on the actually achieved financial results, as well as to constantly motivate them to accomplish the business targets set for a given period.

The table below presents the gross amounts of remuneration payable to the Management Board Members for performing supervisory duties on the Supervisory Boards of Asseco Group companies:

mPLN ABS S.A. ADS S.A.

Formula Systems (1985)

Ltd.

Grupa ACE

SKG S.A.

ZUI Novum

Sp. z o.o.

Adam Góral 0.06 - - 0.05 - 0.05

Przemysław Borzestowski

- - - - 0.02 -

Rafał Kozłowski

- - 0.13 - - -

Marek Panek - - 0.13 0.04 - -

Zbigniew Pomianek

0.04 - - - -

0.04

Przemysław Sęczkowski

- - - 0.04

- -

Total: 0.1 0.82 0.26 0.13 0.02 0.09

As regards the package of additional employee benefits, Members of the Management Board and key managers, just like other employees, are subject to the labour law regulations.Moreover, the Company provides specialized medical care and subsidies to the employees’ participation in sports activities.

The Company believes that the applied remuneration policy supports the implementation of the Company’s

objectives and development strategy, particularly in terms of long-term shareholder value growth and the stability of its operations.Over the last year, the Company did not introduce any significant changes to its remuneration policy.

These remunerations were paid generally on a monthly basis, whereas in the case of Formula Systems Ltd. – on a quarterly basis.

The table below presents the gross amounts of fixed and variable remuneration payable for performing managerial duties at the Group’s subsidiary companies:

mPLN Asseco Western Europe S.A.

fixed variable

Rafał Kozłowski 0.17 0

Przemysław Sęczkowski 0.17 0.45

Total: 0.34 0.45

The policy of remuneration payable to the members of management bodies at the Group’s subsidiary companies is similar that applicable in the Parent Company:

▪ fixed remunerations are paid on a monthly basis;

▪ variable remunerations depend on:

• the amount of margin IV achieved by the business units of Asseco Data Systems Group;

• the amount of net profit earned by Asseco Western Europe Group.

The Management Board Members are not entitled to any other packages of additional benefits, also in terms of severance payments upon their dismissal.

Information on the full amount or remunerations paid to the Members of the Management Board and Supervisory Board of Asseco Poland S.A. is provided in explanatory note 35 to the financial statements of Asseco Group for the year ended December 31, 2016.


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Discussion of significant risk factors and threats

Asseco Poland S.A. constantly monitors major factors posing risk to its operations in order to identify, prevent and mitigate their possible effects. For this purpose, the Company has introduced a number of management systems as well as control procedures and internal audit. In particular, Asseco uses the following systems:

▪ quality management system;

▪ risk management system;

▪ business continuity management system;

▪ information security management system;

▪ system monitoring the compliance with the law and general standards, as well as the market standards adopted by the Company;

▪ internal control system.

The systems and smoothly functioning internal audit effectively reduce the negative impact of the following risk factors and threats to the Company's operations.

Risk related to intensified competition

Business operations of Asseco Poland are under the pressure of intense competition both from local players and international IT corporations. Competitors with global reach are getting continually stronger as they have got faster access to innovative technological solutions, but also to cheaper sources of funds which makes it possible to finance large contracts more efficiently.It is not certain whether the increasing competition will have no significant adverse impact on the Company’s operations, financial position, financial results and future development outlook.

Risk related to technological changes in the industry and development of new products

The IT sector is characterized by rapid development of new solutions and technologies, which shorten the lifecycle of products.Therefore, the future success of Asseco Poland will largely depend upon our capability to incorporate the latest technological solutions into our products and services.In order to maintain the competitive advantage in this market, it is necessary to conduct research work and to invest in new products.Asseco keeps on monitoring the present information technology trends and develops and upgrades its business offer accordingly.However, there is still a risk that the market will receive new products, which will cause our products and services

to become less attractive, and eventually not as profitable as expected. Additionally, it cannot be taken for granted that the new solutions which are, or will be, created or developed by Asseco will satisfy the technological requirements, and whether they will be accepted positively by their potential users.Such circumstances might have a significant adverse impact on the operations, financial position, financial results and prospective development of Asseco.

Risk related to market saturation

Technological saturation that begins to emerge in the Polish banks and private enterprises may prompt them to focus their strategies on smaller or mid-size IT projects that would address their current needs only.Such circumstances might have a significant adverse impact on the operations, financial position, financial results and prospective development of Asseco.

Risk related to consolidation and structural changes in the financial sector

The finance sector is the place of ongoing consolidation processes. There is a risk that consolidators of this sector will force the acquired financial institutions to use their global IT solutions, which may slow down the process of gaining new contracts or even result in termination of already concluded contracts. In addition, in the finance sector, there is a growing trend of establishing both IT and finance services companies (fintechs), whose solutions may be competitive for the products of the Company or may introduce alternative mechanisms of the functioning of finance companies, which may affect acquiring new contracts.

Such circumstances might have a significant adverse impact on the operations, financial position, financial results and prospective development of Asseco.

Risk related to carrying out of public tenders

Delays in finalization of the tendering procedures for delivery of IT infrastructure for the public administration may result in unstable revenues from this sector. If combined with unsatisfactory utilization of the EU funds granted for improving innovation at public offices, this might substantially reduce the local demand for IT services and thereby exert a negative impact on the operations, financial position, financial results and prospective development of Asseco.

Risk involved in gaining new contracts

It is characteristic of the IT business that most of contracts of Asseco Poland are awarded under tendering procedures.Therefore, it is not certain that


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the Company will be able to gain such new contracts that would ensure sufficiently high and satisfactory revenues in the future.These factors might have a significant adverse impact on the operations, financial position, financial results and prospective development of Asseco.

Risk related to the macroeconomic situation of Poland

Development of the IT services sector is closely correlated to the overall economic prosperity.The main factors affecting the financial results of Asseco Poland include the pace of GDP growth, value of public orders for IT solutions, level of capital expenditures made by enterprises, inflation rate, and foreign currency exchange rates versus the Polish zloty.

Risk of becoming dependent on the key customers

The implementation of contracts with key clients will heavily impact the level of sales revenues generated by Asseco Poland in the coming years. It cannot be precluded that a potential loss of any major client, deterioration in the financial terms for provision of services, or potential compensatory claims would have a significant adverse impact on the operations, financial position, financial results and prospective development of Asseco.

Risk of increasing cost of work

Salaries account for over 70% of the project implementation costs.Taking into account such high human resource requirements, an increase in salaries would squeeze the margins achieved on projects, and consequently have an unfavourable impact on the financial results of Asseco Poland S.A.

In order to manage the risk of higher cost of work, the Company takes a number of measures which can help reduce potential negative effects of rising salaries.Among other things, Asseco (i) employs people in many geographical regions aiming to diversify that risk, (ii) continually monitors the level of salaries in the market not to be taken by surprise, and (iii) tries to maintain an appropriate structure of employment within particular levels of competence.

Risk of changes in regulations and their interpretation

Frequent amendments, lack of cohesion and uniform interpretations of the provisions of law, concerning in particular the tax regulations, banking law, insurance law (inclusive of social insurance), public procurement law, personal data protection law, regulations pertaining to trading in securities and public offering, and commercial companies law, give rise to the

regulatory risk occurring in the environment in which Asseco Poland operates.The tax regulations and their interpretations are more than others prone to numerous changes.Practices of the internal revenue administration and the court judicature are not uniform in this domain.In the event the taxation authorities take a position that is different from our interpretation of tax regulations, the operations, financial position and financial results of Asseco may be exposed to negative consequences thereof.Such risk may be materializing especially due to potential doubts expressed by the taxation authorities over the transactions the Company conducts with its related parties.This might have a significant adverse impact on the operations, financial position, financial results and prospective development of Asseco.

Risk of losing the clients’ trust

Operations of Asseco Poland S.A. are to a large extent based on the customers’ trust. Implementation of an IT system, which has critical importance for the customer’s business, usually results in signing a long-term agreement with the system user. The quality of solutions and services provided to such clients determines their confidence in the Asseco brand.In the event the quality of delivered products and services was poor, our customers might lose their trust in Asseco, which might hurt our reputation in the market and make it impossible to continue successful business operations.

Risk of underestimation of the project cost

Most of Asseco’s profits are derived from the execution of complex information technology projects carried out under long-term agreements with a predefined remuneration. Implementation of such projects requires very good planning both in terms of the schedule of work and the resources needed to provide the promised scope of the contract.Here the Company follows complex procedures, which on one hand facilitate the process of preparation of reliable plans and on the other hand prevent the incurrence of unexpected costs.

In order to manage the risk of the project cost underestimation, Asseco Poland applies the methods (either based on the world recognized standards or proved by own experience) for estimation of the project costs, preparation of work schedules, and identification of risks that may hinder timely, professional or financial performance under a contract.

Risk of concluding a contract with a dishonest customer


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Asseco is exposed to the risk of defaulting contractors. This risk is connected firstly with the financial credibility and good will of customers to whom the Company provides IT solutions, and secondly with the financial credibility of contractors with whom supply transactions are concluded.

Hence, the risk control measures usually consist of monitoring the timely execution of bank transfers and, if needed, sending a reminder of outstanding payment. In addition, the Company uses processes for the initial and periodic verification of the operating process for external entities.In the case of smaller clients, it is quite helpful to monitor their industry press as well as to analyze previous experience gathered by ourselves and by our competitors, etc.

Risk of inability to effectively integrate the taken-over companies or to achieve the intended rates of return on acquisitions or investments

Asseco Poland implements the strategy of development, among others, through acquisitions of or capital investments in IT companies.Valuation of the future acquisitions or investments will depend on the market conditions as well as on other factors beyond the Asseco’s control.It cannot be entirely precluded that the investor company may be unable to accurately estimate the values of undertaken acquisitions or investments.There is also a risk that earnings generated by the acquired or investee companies fall short of the initial estimates which might prevent us from achieving the rates of return that were originally expected from such transactions.

Risk related to losing the key personnel

The Company’s operations and development outlook depend to a large extent on the knowledge, experience and professional qualifications of its employees, who implement the IT projects.A substantial demand for IT specialists and the competitors’ activities may induce the key personnel to leave our organization, and also make it quite difficult to recruit new employees with suitable knowledge, experience and professional qualifications.Still there is a risk that resignation by the key personnel would have a negative impact on the execution of IT contracts conducted by the Company, as well as on ensuring the required quality and range of services provided. This in turn might have a significant adverse impact on the operations, financial position, financial results and prospective development of Asseco Poland S.A.

Risk associated with cyber-security, including the issue of data leakage

In recent years, cyber security has become one of the major challenges which contemporary states and economies have to face. The scale of cybercrime has been growing at an unprecedented pace so far.

As a result of deliberate actions of third parties or dishonest employees, as well as mistakes or carelessness of our employees or contractors, confidential data of the Company or of our clients may be disclosed to unauthorized persons.Such circumstances might have an adverse impact on the perception of Asseco by our clients, and consequently on the Group’s operations, financial position, financial results and prospective development.

Risk of property damage

As a result of abuse or errors committed by employees of Asseco, the Company may suffer damage to its property.Such circumstances might have an adverse impact on the Group’s financial condition and business continuity, and consequently on the Company’s operations, financial position, financial results and prospective development.


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OTHER INFORMATION

Explanation of differences between the financial results disclosed in the annual report and previous financial forecasts for the year.

Asseco Poland S.A. did not publish any financial forecasts for the year 2016.

Opinion on feasibility of the ManagementBoard financial forecasts for 2016

The Management Board of Asseco Poland S.A. did not publish any financial forecasts for the year 2016 or for subsequent financial periods.

Changes in the Company management policies

During the year 2016, the Company’s management practices remained unchanged.

Remuneration of the management and supervisory personnel

The amounts of remuneration due to our management and supervisory staff have been disclosed in explanatory note 34 to the separate financial statements of Asseco Poland S.A. for the year ended December 31, 2016.

Description of the Company’s sponsoring and charity policy

Since 2006, Asseco Poland has been a major sponsor of the leading volleyball team Asseco Resovia Rzeszów. The Company also supports one of the best teams in the Polish basketball league, namely Asseco Gdynia. The Management of Asseco Poland is an active supporter, not only in financial terms, but also by devoting their time and expertise to assist the players and help the teams in building their strategies for development.

For the last two years, on the occasion of Christmas, Asseco Poland has provided one-time financial donations to institutions and foundations that had been selected by the company’s employees.These organizations operate in the regions where the divisions of Asseco Poland are based. The charity campaign “We Help” has been created on the initiative of the Management Board of Asseco Poland that decided to resign from buying any Christmas presents for the company’s clients.This way the company saved PLN 200,000 and allocated this money to a campaign, where our employees take part in an internal competition to come up with the best project of aid for various social institutions.

The company co-finances the organization of the Olympiad in Informatics as well as the international

contest called Asseco Programming Marathon24. In addition, Asseco Poland’s specialists give lectures in graduate and postgraduate programs at the Warsaw University of Life Sciences as well as at the University of Information Technology and Management in Rzeszów. Moreover, Asseco Poland has for years provided regular financial and material support to the following foundations: Cooperative Banking Development Foundation, Foundation “A kogo?” (Who cares?), Foundation “Mimo wszystko” (Despite everything), and TVN’s Foundation “Nie jesteś sam” (You are not alone).

Agreements concluded by Asseco Poland S.A. with its management personnel providing for payment of compensations if such persons resign or are dismissed from their positions

Asseco Poland S.A. did not conclude any agreements with their management officers that would provide for payment of compensations in the event such persons resign or are dismissed from their positions without substantial reason, or when they are dismissed as a result of a company merger by acquisition.

Information on the agreements known to the Issuer which may result in future changes of the equity interests held by the existing shareholders and bondholders

There are no agreements which may result in future changes of the equity interests held by the existing shareholders and bondholders.

Organizational and equity relationships

Asseco Poland S.A. is the parent company of Asseco Poland Group, and its equity relationships have been presented in explanatory note 10 to the annual financial statements of Asseco Poland S.A. for the year ended December 31, 2016.

Related party transactions

Related party transactions have been presented in explanatory note 26 to the annual financial statements of Asseco Poland S.A. for the year ended December 31, 2016. These transactions were carried out on an arm’s length basis.

Bank loans, borrowings, sureties and guarantees

Bank loans drawn, loans granted, as well as sureties and guarantees granted have been described in explanatory notes 21 and 28 to the annual financial statements of Asseco Poland S.A. for the year ended December 31, 2016.


34

Loans granted during the financial year

Information on loans granted by Asseco Poland S.A. has been presented in explanatory note 12 to the annual financial statements of Asseco Poland S.A. for the year ended December 31, 2016.

Off-balance-sheet items

The nature, purpose and value of significant off-balance-sheet items have been presented in explanatory notes 28 and 29 to the annual financial statements of Asseco Poland S.A. for the year ended December 31, 2016.

Utilization of proceeds from issuance of shares

In the period of 12 months ended December 31, 2016, Asseco Poland S.A. did not issue any new shares.

Monitoring of employee stock option plans

As at the date of preparation of this report, the Company did not run any share-based employee incentive scheme.

Significant agreements concluded by the Company

As the Company informed in the Regulatory Filling no. 24/2016, on October 10, 2016 it received a decision of the Management Board of the Social Insurance Institution (ZUS) about concluding an Annex to the Agreement for the provision of operational support and maintenance services for the Comprehensive Information System at ZUS. The company informed about the conclusion of the agreement in the Regulatory Filling no. 19/2013, on October 10, 2013.

The Annex has been concluded under a supplementary order within the meaning of art. 19 sect. 3 item 2 letter b of the Act of June 22, 2016 on amending the Public Procurement Law and certain other acts. The Annex value shall not exceed PLN 73 million net.

The signed Annex shall extend the effective period of the Agreement till June 30, 2018 or till the time when funds appropriated for the execution of work covered by the Annex are fully used.

Information on judicial proceedings where the value in dispute exceeds 10% of the amount of equity

At the publication date of this report, the Company was not a party to any proceedings pending before any court, arbitration authority or public administration authority, under which the value in dispute would exceed 10% of the Company’s equity.

Information on adhering to the corporate governance standards

Information on adhering to the corporate governance standards has been contained in the separate Report on compliance of Asseco Poland S.A. with the corporate governance standards in the year 2016.

Agreement with the entity authorized to audit financial statements

The agreement with the entity authorized to audit financial statements, namely Ernst & Young Audyt Polska Sp. z o.o. sp. k., to carry out audits of the separate and consolidated financial statements of Asseco Poland S.A. drawn up for the year ended December 31, 2016 was signed on July 30, 2016.

Remuneration of the entity authorized to audit financial statements

Information on remuneration due to the entity authorized to audit financial statements has been provided in explanatory note 33 to the annual financial statements of Asseco Poland S.A. for the year ended December 31, 2016.

This Management Report on Operations has been approved for publication by the Management Board of Asseco Poland S.A. on March 16, 2017.

Statements by the Management of Asseco Poland S.A. to the Annual Report

Statements made by the Management Board of Asseco Poland S.A. to the Annual Report for the year ended December 31, 2016

Statement made by the Management Board of Asseco Poland S.A. on the reliability of preparation of the annual financial statements of Asseco Poland S.A. for the year ended December 31, 2016

The Management Board of Asseco Poland S.A. hereby declares that, to the best of its knowledge, the annual financial statements of Asseco Poland S.A. for the year ended December 31, 2016 and comparable data contained therein have been prepared in compliance with the applicable accounting standards, namely the International Financial Reporting Standards as endorsed by the European Union.

Furthermore, the Management Board declares that the presented data give a true, reliable and fair view of the Company’s assets, financial position and financial performance.The report on operations of Asseco Poland S.A. provides a fair description of the development, achievements and economic position of the Company, inclusive of major risks and threats to its operations.











Statement made by the Management Board of Asseco Poland S.A. on the entity authorized to audit the annual financial statements of Asseco Poland S.A. for the year ended December 31, 2016

The Management Board of Asseco Poland S.A. hereby declares that the entity authorized to audit the annual financial statements of Asseco Poland S.A. for the year ended December 31, 2016, namely Ernst & Young Audyt Polska Sp. z o.o. Sp.k., seated in Warsaw, has been chosen in accordance with the provisions of the law in force.This entity as well as certified auditors, who audited these financial statements, satisfied the conditions for expressing an impartial and independent opinion on the audited annual financial statements, in line with the applicable regulations and professional standards.











Asseco Poland S.A.

14 Olchowa St.

35-322 Rzeszów, Poland

phone: +48 17 888 55 55

fax: +48 17 888 55 50

e-mail: [email protected]

inwestor.asseco.pl

mailto:[email protected]

mda asseco poland fy2016 · letter . report on operations of asseco poland s.a. for the year ended...

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