Asseco Central Europe : 2017-02-24 / 2016 / Konsolidovaná rocná správa 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 CONSOLIDATED FINANCIAL STATEMENTS 7

5. COMPANY VALUES 9

6. Mission 9

7. Visions 9

8. The Company's strategic goals 10

9. Characteristics of factors relevant to development of the Group 11

10. Company management code 11

11. Code of conduct 12

12. COMPANY´S AUTHORITIES 13

13. Changes in the number of Asseco Central Europe shares owned by the members of the Board of Directors (BoD) and Supervisory Board (SB) 14

14. THE ASSECO CENTRAL EUROPE GROUP 14

15. PRODUCT PORTFOLIO 20

16. SHAREHOLDER´ STRUCTURE OF ASSECO CENTRAL EUROPE, A. S. 29

17. PERSONNEL INFORMATION AND POLICY 29

18. Employment structure in the Asseco Central Europe Group 30

19. MARKET POSITION 31

20. Information technology market and future outlook 31

21. Position of the Company in the IT sector 32

22. NEW PROJECTS, PRODUCTS AND SERVICES 32

23. ANALYSIS OF FINANCIAL RESULTS OF THE ASSECO CENTRAL EUROPE GROUP 38

24. Information on the Asseco Central Europe Group 38

25. Information on subsidiaries 43

26. The Group's cash-flow generation 43

27. DESCRIPTION OF SIGNIFICANT RISKS AND THREATS 44

28. SIGNIFICANT EVENTS AND ACHIEVEMENTS OF THE ASSECO CENTRAL EUROPE GROUP 48

29. ADDITIONAL INFORMATION 51

30. Indication of proceedings pending before courts and public administration 51

31. Information about seasonality 51

32. Information on dividends paid or declared 52

33. Information on changes in contingent liabilities or contingent assets . 52 14.5 Related party transactions 52

35. Loans, loan agreements, sureties, guarantees and commitments 52

36. Opinion on feasibility of the Management´s financial forecast for 2016 52

37. Management of financial resources 52

38. Evaluation of feasibility of investment projects 52

39. Factors and events, particularly of unusual character, having an impact on financial results 53

40. Changes in principles of the Company and group management 53

41. All agreements between Asseco Central Europe, a. s. and its management, providing compensation in case of their resignation or dismissal 53

42. Information on salaries, bonuses or benefits for managers and supervisors 53

43. Information about existing agreements that may result in future changes of the proportions of shares held by existing shareholders 53

44. Information about share based payment transactions 53

45. Research and Development costs 53

46. Information about branch office abroad 54

47. Agreement with the entity authorized to audit financial statements ... 54

48. Significant events after the balance sheet date 54

I. CHAIRMAN´S LETTER

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

The year 2016 was the year of consolidation for us in Asseco Central Europe. We focused our activities on enhancement of the quality of our internal processes and deepening of relationships with our current customers. Thus, we strengthened both our position within the Asseco Group and the position in the local market and we expanded our business activities over new markets. By the beginning of the year, we succeeded in concluding the first significant commercial contract in the area of comprehensive insurance in Nigeria. We supplied our comprehensive information system StarINS to the Wapic Company. The LIDS solution for management of public lighting systems and information boards, which was implemented by our subsidiary company Asseco Berit Germany in cooperation with the Brno GIS&Utility division, won the tough competition in Vienna. We actively searched for new business partners and customers in so called emerging markets. We directed our business ambitions towards the countries such as Iran, Kazakhstan, and Portugal and by the end of the year, we started to focus on Vietnam.

Our financial results in Slovakia were satisfactory also due to the market situation. We stabilized the situation in the Czech Republic - it was rather complicated in past years especially in the area of public administration. We have been expanding our business activities in the region of Central Europe. In Slovakia, we have retained our first position in the ranking by the weekly magazine Trend in the category "Largest IT Suppliers to Private Financial Sector" and the second position in the category "The Fastest Growing Slovak IT Companies". The IBM Company granted the title "2015 IBM Analytics Solutions Partner" to us. In the Czech Republic, we received the prestigious prize "2015 CZECH Stability Award".

The strategy built on successful implementation of large projects, within which we adjusted our products to individual needs of clients, was successful in Českomoravská stavební spořitelna - the largest building savings bank in the Czech Republic and the second largest bank of this kind in Europe. In March, we successfully completed the program of fundamental generational change of IT systems of that bank. Currently, our solution is used as the main information system in four out of the five building savings banks in the Czech Republic and thanks to this fact, the solution of the Asseco Company became a standard for building savings banks in the Czech Republic.

The information systems for Všeobecná zdravotná poisťovňa (General Health Insurance Company) were prized during the ITAPA congress the last year. ADMIS - a solution for the Financial Directorate - has been the key information system in the environment of the Financial Directorate of the SR since its implementation in 2014. Our products were similarly successful also in the banking sector and as concerns the Registers in the Czech Republic, which play the fundamental role within the development of the key eGovernment system.

Also in 2016, subsidiary company Asseco Solutions, focusing on ERP solutions, confirmed its position as one of the largest ERP producers in Central and Eastern Europe. The company continues its strategy of expansion not only in the existing but also in new markets. It has expanded its activities in Italy and the region of Central America where the