Asseco Central Europe : 2017-02-24 / 2016 / Individual Annual Report - Asseco Central Europe, a.s.

CONTENTS

1. CHAIRMAN´S LETTER 4

2. MANAGEMENT REPORT 6

1. GENERAL INFORMATION 6

2. Organizational structure and nature of business operations 6

3. General information 6

4. SELECTED FINANCIAL DATA OF FINANCIAL STATEMENTS 7

5. COMPANY VALUES 8

6. Mission 8

7. Visions 8

8. The Company's strategic goals 9

9. Characteristics of factors relevant to development of the Company 9

10. Company management code 10

11. Code of conduct 10

12. COMPANY´S AUTHORITIES 11

13. Changes in the number of Asseco Central Europe shares owned by the members of the Board of Directors (BoD) and Supervisory Board (SB) 12

14. PRODUCT PORTFOLIO 12

15. SHAREHOLDER´ STRUCTURE OF ASSECO CENTRAL EUROPE, A. S. 20

16. PERSONNEL INFORMATION AND POLICY 20

17. Employment structure in the Asseco Central Europe 21

18. MARKET POSITION 21

19. Information technology market and future outlook 21

20. Position of the Company in the IT sector 23

21. NEW PROJECTS, PRODUCTS AND SERVICES 24

22. ANALYSIS OF FINANCIAL RESULTS OF THE ASSECO CENTRAL EUROPE, a. s. 32

23. DESCRIPTION OF SIGNIFICANT RISKS AND THREATS 33

24. SIGNIFICANT EVENTS AND ACHIEVEMENTS OF THE ASSECO CENTRAL EUROPE, A. S 37

25. ADDITIONAL INFORMATION 38

26. Indication of proceedings pending before courts and public administration 38

27. Information about seasonality 38

28. Information on dividends paid or declared 38

29. Information on changes in contingent liabilities or contingent assets 39

30. Related party transactions 39

31. Loans, loan agreements, sureties, guarantees and commitments 39

32. Opinion on feasibility of the Management´s financial forecast for 2014 39

33. Management of financial resources 39

34. Evaluation of feasibility of investment projects 39

35. Factors and events, particularly of unusual character, having an impact

    on financial results 39

36. Characteristics of the factors relevant to the development of the Company 40

37. Changes in the basic principles of management of the Company 40

38. All agreements between the Company and its management, providing compensation in case of their resignation or dismissal 40

39. Information on salaries, bonuses or benefits for managers and supervisors 40

40. Information about existing agreements that may result in future changes

    of the proportions of shares held by existing shareholders 41

41. Information about share based payment transactions 41

42. Agreement with the entity authorized to audit financial statements 41

43. Significant events after the balance sheet date 41

44. I. CHAIRMAN´S LETTER

    Dear shareholders and investors, valued customers, dear colleagues, dear readers,

    in 2015, we celebrated our 25th anniversary. Our Company was founded just after the Velvet Revolution and was called ASSET. It had big ambitions especially in the banking sector and it gradually met them and has became very successfully. The Company has undergone several milestones since then. In 2004, we laid the foundations for today's Asseco Group together with the Polish company Comp Rzeszów to create the sixth largest software house in Europe. In 2006, we were directly listed on the Warsaw Stock Exchange as the first Slovak company to do so and we have gradually expanded our business and investment activities in Central Europe to six countries.

    Looking back at the year 2015, I personally see it as a very successful year from a business perspective. Our financial performance in Slovakia was excellent and helped offset weaker results in the Czech Republic, especially in the public sector. The difficult situation accompanied by a price war brought about a significant pressure on the survival of many companies, but the achievements of late last year and early this year in this area give us hope of turning that situation around this year. In 2015, we managed to implement new types of services, mainly consulting services, and we started to engage in infrastructure and integration projects commercially. We have diversified the risk, we broadened our competence outside the IT industry and we will seek to use the lessons learned in the future. We believe that the new programming period in the state administration will bring out opportunities to develop these activities as well as increased demand for standard software projects.

    In 2014, we acquired the German-Austrian ERP Company and its subsidiaries in Switzerland and merged it with Slovak and Czech Asseco Solutions, thus creating one of the largest ERP producers in Central and Eastern Europe - "big" Asseco Solutions. The excellent results of the whole Asseco Solutions group in 2015, whether they are compared with the budget or with previous years, underpinned the reasoning and the right approach to the change in the management of product development in these companies, to intensify the care of existing customers, but also to greater efficiency and motivation of our employees.

    I am satisfied that the year 2015 was very successful also when it comes to our activities in Hungary. We consider the market development of hospital information systems in Hungary as the most successful in its history so far, namely in terms of revenues and profits. In addition to the successful implementation of a number of projects, the company continues the development of a new generation of our product MedWorkS which has the potential of being attractive to customers in Hungary as well as for new customers in markets in other countries. The second pillar of our Hungarian success - Solutions in Consumer Finance - was refreshed in 2014 and embarked on a journey of development of the CrediLogics product, gaining new customers.

    The headquarters of Asseco CE are closely involved in group-wide business activities, especially in the distant emerging markets. As part of our trade mission to the African nations of Togo and Nigeria, we are trying to present the utility solutions; in Kazakhstan, Belarus and markets of sub-Saharan Africa, we in turn offer solutions designed for the insurance sector and health care. In the CIS and SEE regions, we keep building up local partnerships and enter into business dealings with selected insurance companies. Regarding utilities, despite all the economic, cultural and social differences between Europe and Africa, we have demonstrated that software support to processes in the