Asseco Poland S A : Consolidated financial report for Q1-Q3 2021

Financial data of Asseco Group

for the period of 9 months ended 30 September 2021

Present in

60 countries

29,148

highly committed

employees

PLN 10,846 million

in order backlog* for 2021

*refers to proprietary software and services

PLN 10,293 million

in sales revenues

PLN 362.2 million

of net profit for Shareholders of the Parent Company

PLN 7.7 billion

in market capitalization

Asseco Group
Financial data for the period of 9 months ended 30 September 2021
(in millions of PLN)	2

Asseco Group

Financial data for the period of 9 months ended 30 September 2021

FINANCIAL HIGHLIGHTS.........................................................................................................................................	5
A. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF ASSECO GROUP FOR THE PERIOD
OF 9 MONTHS ENDED 30 SEPTEMBER 2021 ..........................................................................................................	6
INTERIM CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME........................................	7
INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION.......................................................................................	8
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .....................................................................................	10
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS...............................................................................................	12
EXPLANATORY NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS .............................................	15
1. GENERAL INFORMATION ..........................................................................................................................................	15
2. BASIS FOR THE PREPARATION OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS .................	16
2.1.	Basis for preparation..........................................................................................................................	16
2.2.	Impact of the COVID-19 pandemic on the Group's business operations ..........................................	16
2.3.	Compliance statement.......................................................................................................................	17
2.4.	Functional currency and presentation currency................................................................................	17
2.5.	Professional judgement and estimates..............................................................................................	17
2.6.	Accounting policies applied ...............................................................................................................	18
2.7.	New standards and interpretations published but not in force yet ..................................................	19
2.8.	Changes in the presentation methods applied..................................................................................	20
2.9.	Corrections of material errors ...........................................................................................................	20
2.10.	Restatement of comparable data ......................................................................................................	20
3. ORGANIZATION AND CHANGES IN THE STRUCTURE OF ASSECO GROUP, INCLUDING THE ENTITIES SUBJECT
TO CONSOLIDATION .............................................................................................................................................	23
4. INFORMATION ON OPERATING SEGMENTS ............................................................................................................	32
5. EXPLANATORY NOTES TO THE CONSOLIDATED STATEMENT OF PROFIT AND LOSS ............................................	35
5.1.	Structure of operating revenues........................................................................................................	35
5.2.	Structure of operating costs ..............................................................................................................	37
5.3.	Financial income and expenses .........................................................................................................	38
5.4.	Corporate income tax ........................................................................................................................	39
5.5.	Earnings per share .............................................................................................................................	39
5.6.	Information on dividends paid out ....................................................................................................	40
6. EXPLANATORY NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION ......................................	41
6.1.	Property, plant and equipment .........................................................................................................	41
6.2.	Intangible assets ................................................................................................................................	41
6.3.	Right-of-use assets.............................................................................................................................	42
6.4.	Goodwill.............................................................................................................................................	42
6.5.	Associates and joint ventures ............................................................................................................	48
6.6.	Entities with significant non-controlling interests .............................................................................	49
6.7.	Receivables and contract assets ........................................................................................................	51
6.8.	Prepayments and accrued income ....................................................................................................	52
6.9.	Other financial assets.........................................................................................................................	52
6.10.	Inventories .........................................................................................................................................	54
6.11.	Cash and cash equivalents .................................................................................................................	54
6.12.	Bank loans, borrowings and debt securities ......................................................................................	55
6.13.	Lease liabilities ...................................................................................................................................	58
6.14.	Other financial liabilities ....................................................................................................................	58
6.15.	Trade payables, state budget liabilities and other liabilities .............................................................	59
6.16.	Contract liabilities ..............................................................................................................................	60
6.17.	Provisions...........................................................................................................................................	60
6.18.	Accruals and deferred income ...........................................................................................................	61
Asseco Group
Financial data for the period of 9 months ended 30 September 2021
(in millions of PLN)	3

6.19.	Related party transactions.................................................................................................................	61
7. EXPLANATORY NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS ...................................................	63
7.1.	Cash flows - operating activities .......................................................................................................	63
7.2.	Cash flows - investing activities.........................................................................................................	63
7.3.	Cash flows - financing activities ........................................................................................................	64
8. OTHER EXPLANATORY NOTES ................................................................................................................................	65
8.1.	Off-balance-sheet liabilities ...............................................................................................................	65
8.2.	Seasonal and cyclical business ...........................................................................................................	67
8.3.	Employment.......................................................................................................................................	67
8.4.	Significant events after the reporting period ....................................................................................	68
8.5.	Significant events related to prior years............................................................................................	68
B. COMMENTARY AND SUPPLEMENTARY INFORMATION TO THE QUARTERLY REPORT OF ASSECO GROUP ....	69
1. SELECTED FINANCIAL DATA FOR THE PERIOD OF 3 MONTHS ENDED 30 SEPTEMBER 2021 (NON-IFRS) ...............	70
2. SUMMARY AND ANALYSIS OF FINANCIAL RESULTS OF ASSECO GROUP FOR THE PERIOD OF 9 MONTHS
ENDED 30 SEPTEMBER 2021 ...................................................................................................................................	71
3. MAJOR FACTORS AND EVENTS WITH IMPACT ON OUR FINANCIAL PERFORMANCE .............................................	76
3.1	Asseco Poland segment .....................................................................................................................	76
3.2	Asseco International segment ...........................................................................................................	86
3.3	Formula Systems segment .................................................................................................................	90
4. NON-RECURRING EVENTS WITH IMPACT ON OUR FINANCIAL PERFORMANCE .....................................................	92
5. CORPORATE OFFICERS OF ASSECO POLAND S.A....................................................................................................	93
6. SHAREHOLDERS STRUCTURE OF ASSECO POLAND S.A. ........................................................................................	94
7. OTHER INFORMATION..............................................................................................................................................	95
7.1.	Issuance, redemption and repayment of non-equity and equity securities......................................	95
7.2.	Effects of changes in the organizational structure ............................................................................	95

7.3. Information on pending legal proceedings concerning liabilities or receivables of Asseco Poland

	or its subsidiaries ...............................................................................................................................	95
7.4.	Related party transactions.................................................................................................................	95
7.5. Bank loans, borrowings, sureties, guarantees and off-balance-sheet liabilities................................	95
7.6.	Changes in the Group management policies .....................................................................................	95

7.7. Agreements concluded by Asseco Group with its management personnel providing

for payment of compensations if such persons resign or are dismissed from their positions ..........

95

7.8. 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 .........................................	95
7.9.	Opinion on feasibility of the Management's financial forecasts for 2021.........................................	95
7.10.	Information on monitoring of employee stock option plans.............................................................	95

7.11. Factors which in the Management's opinion will affect the Group's financial performance

at least in the next quarter ................................................................................................................	95
7.12. Other factors significant for the assessment of human resources, assets and financial position .....	96
C. INTERIM CONDENSED FINANCIAL STATEMENTS OF ASSECO POLAND S.A. FOR THE PERIOD
OF 9 MONTHS ENDED 30 SEPTEMBER 2021 ........................................................................................................	97
STANDALONE INTERIM STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME ........................................	98
STANDALONE INTERIM STATEMENT OF FINANCIAL POSITION .......................................................................................	99
STANDALONE INTERIM STATEMENT OF CHANGES IN EQUITY......................................................................................	101
STANDALONE INTERIM STATEMENT OF CASH FLOWS ...............................................................................................	102
APPROVAL FOR PUBLICATION BY THE MANAGEMENT BOARD ..............................................................................	103

Asseco Group
Financial data for the period of 9 months ended 30 September 2021
(in millions of PLN)	4

Financial Highlights

Asseco Group

The following table presents the selected financial data of Asseco Group.

				9 months ended		9 months ended			9 months ended		9 months ended
				30 Sept. 2021		30 Sept. 2020			30 Sept. 2021		30 Sept. 2020
				mPLN		mPLN			mEUR		mEUR
	Operating revenues	10,293.1		8,708.8		2,258.0		1,960.6
	Operating profit	1,045.0		852.5		229.2		191.9
	Pre-tax profit before share of profits of associates	978.8		767.3		214.7		172.7
	and joint ventures
	Net profit for the reporting period	766.4		595.5		168.1		134.1
	Net profit attributable to Shareholders			362.2		267.5			79.5		60.2
	of the Parent Company
	Net cash provided by (used in) operating activities	821.3	1,120.2	180.2	252.2
	Net cash provided by (used in) investing activities	(474.7)	(303.7)	(104.1)	(68.4)
	Net cash provided by (used in) financing activities	(625.4)	(603.1)	(137.2)	(135.8)
	Cash and short-term deposits	2,714.5		2,896.0		585.9		627.5
	(comparable data as at 31 December 2020)
	Basic earnings per ordinary share attributable	4.36	3.22	0.96	0.72
	to Shareholders of the Parent Company (in PLN/EUR)
	Diluted earnings per ordinary share attributable	4.36	3.22	0.96	0.72
	to Shareholders of the Parent Company (in PLN/EUR)

The selected financial data disclosed in these interim condensed consolidated financial statements have been translated into euros (EUR) in the following way:

• Items of the interim condensed consolidated statement of profit and loss and statement of cash flows have been translated into EUR at the arithmetic average of mid exchange rates as published by the National Bank of Poland and in effect on the last day of each month in the period reported. These exchange rates were respectively:
  o for the period from 1 January 2021 to 30 September 2021: EUR 1 = PLN 4.5585
  o for the period from 1 January 2020 to 30 September 2020: EUR 1 = PLN 4.4420
• The Group's cash and cash equivalents as at the end of the reporting period and the comparable period of the previous year have been translated into EUR at daily mid exchange rates as published by the National Bank of Poland. These exchange rates were respectively:
  o exchange rate effective on 30 September 2021: EUR 1 = PLN 4.6329
  o exchange rate effective on 31 December 2020: EUR 1 = PLN 4.6148

All figures in this report are presented in millions of Polish zlotys (PLN), unless stated otherwise.

Asseco Group
Financial data for the period of 9 months ended 30 September 2021
(in millions of PLN)	5