Financial data of Asseco Poland S.A. for the period of 6 months ended 30 June 2021
Financial data of Asseco Poland S.A. for the period of 6 months ended 30 June 2021
FINANCIAL HIGHLIGHTS ...... 4 INTERIM CONDENSED FINANCIAL STATEMENTS OF ASSECO POLAND S.A. FOR THE PERIOD OF 6 MONTHS ENDED 30 JUNE 2021 ...... 5 INTERIM STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME ...... 6 INTERIM STATEMENT OF FINANCIAL POSITION ...... 7 INTERIM STATEMENT OF CHANGES IN EQUITY ...... 9 INTERIM STATEMENT OF CASH FLOWS ...... 10 EXPLANATORY NOTES TO THE INTERIM CONDENSED FINANCIAL STATEMENTS ...... 12 1. GENERAL INFORMATION ...... 12 2. BASIS FOR THE PREPARATION OF INTERIM CONDENSED FINANCIAL STATEMENTS ...... 13 2.1. Basis for preparation...... 13 2.2. Impact of the COVID-19 pandemic on the Company’s business operations ...... 13 2.3. Compliance statement ...... 14 2.4. Functional currency and presentation currency ...... 14 2.5. Professional judgement and estimates...... 14 2.6. Accounting policies applied ...... 15 2.7. New standards and interpretations published but not in force yet ...... 16 2.8. Changes in the presentation methods applied ...... 17 2.9. Corrections of material errors ...... 17 2.10. Restatement of comparable data ...... 17 3. INFORMATION ON OPERATING SEGMENTS ...... 18 4. EXPLANATORY NOTES TO THE STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME ...... 20 4.1 Structure of operating revenues ...... 20 4.2 Structure of operating costs ...... 22 4.3 Financial income and expenses ...... 23 4.4 Corporate income tax ...... 24 4.5 Earnings per share ...... 25 4.6 Information on dividends paid out ...... 25 5. EXPLANATORY NOTES TO THE STATEMENT OF FINANCIAL POSITION ...... 26 5.1. Property, plant and equipment ...... 26 5.2. Intangible assets ...... 26 5.3. Right-of-use assets ...... 26 5.4. Goodwill ...... 27 5.5. Investments in subsidiaries and associates ...... 28 5.6. Impairment tests...... 29 5.7. Other assets ...... 31 5.8. Prepayments and accrued income ...... 33 5.9. Receivables and contract assets ...... 33 5.10. Cash and cash equivalents ...... 35 5.11. Impairment losses on inventories ...... 35 5.12. Lease liabilities ...... 35 5.13. Other financial liabilities ...... 36 5.14. Bank loans and debt securities issued ...... 37 5.15. Trade payables, state budget liabilities and other liabilities ...... 37 5.16. Contract liabilities ...... 38 5.17. Provisions ...... 39 5.18. Accruals and deferred income ...... 39 5.19. Related party transactions ...... 40
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 2
6. EXPLANATORY NOTES TO THE STATEMENT OF CASH FLOWS...... 41 6.1st Cash flows – operating activities ...... 41 6.2nd Cash flows – investing activities ...... 41 6.3rd Cash flows – financing activities ...... 42 7. OTHER EXPLANATORY NOTES ...... 43 7.1st Off-balance-sheet liabilities ...... 43 7.2nd Seasonal and cyclical business ...... 43 7.3rd Employment ...... 44 7.4th Significant events after the reporting period ...... 44 7.5th Significant events related to prior years ...... 44 APPROVAL FOR PUBLICATION BY THE MANAGEMENT BOARD ...... 45
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 3
Financial Highlights Asseco Poland S.A. The following table presents the selected financial data of Asseco Poland S.A.
6 months ended 6 months ended 6 months ended 6 months ended
30 June 2021 30 June 2020 30 June 2021 30 June 2020 mPLN mPLN mEUR mEUR Operating revenues 529.7 435.7 116.5 98.1 Operating profit 103.1 65.4 22.7 14.7 Pre-tax profit 271.5 192.6 59.7 43.4 Net profit for the reporting period 249.3 177.6 54.8 40.0 Net cash provided by (used in) operating activities 85.6 59.7 18.8 13.4 Net cash provided by (used in) investing activities 146.9 113.2 32.3 25.5 Net cash provided by (used in) financing activities (262.4) (262.4) (57.7) (59.1) Cash and short-term deposits 134.9 164.8 29.8 35.7 (comparable data as at 31 December 2020) Earnings per ordinary share (in PLN/EUR) 3.00 2.14 0.66 0.48
The selected financial data disclosed in these interim condensed financial statements have been translated into euros (EUR) in the following way:
▪ Items of the interim condensed 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 June 2021: EUR 1 = PLN 4.5472 o for the period from 1 January 2020 to 30 June 2020: EUR 1 = PLN 4.4413
▪ The Company’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 June 2021: EUR 1 = PLN 4.5208 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 Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 4
Interim Condensed Financial Statements of Asseco Poland S.A. for the period of 6 months ended 30 June 2021
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 5
Interim Statement of Profit and Loss and Other Comprehensive Income Asseco Poland S.A.
3 months ended 6 months ended 3 months ended 6 months ended 30 June 2021 30 June 2021 30 June 2020 30 June 2020 STATEMENT OF PROFIT AND LOSS Note (restated)* (restated)* mPLN mPLN mPLN mPLN
Operating revenues 4.1 268.1 529.7 229.1 435.7
Cost of sales 4.2 (179.1) (361.2) (162.6) (307.5)
Gross profit on sales 89.0 168.5 66.5 128.2
Selling costs 4.2 (9.5) (21.1) (10.8) (20.6)
General and administrative expenses 4.2 (23.2) (46.6) (21.7) (42.6)
Net profit on sales 56.3 100.8 34.0 65.0
Other operating income 1.0 2.9 0.4 1.5
Other operating expenses (0.2) (0.6) (0.3) (1.1)
Operating profit 57.1 103.1 34.1 65.4
Financial income 4.3 57.2 177.8 22.1 131.6
Financial expenses 4.3 (7.4) (9.4) 1.9 (4.4)
Pre-tax profit 106.9 271.5 58.1 192.6
Corporate income tax 4.4 (12.7) (22.2) (9.4) (15.0)
Net profit 94.2 249.3 48.7 177.6
Earnings per share (in PLN):
basic earnings per share 4.5 1.14 3.00 0.59 2.14
diluted earnings per share 4.5 1.14 3.00 0.59 2.14
3 months ended 6 months ended 3 months ended 6 months ended 30 June 2021 30 June 2021 30 June 2020 30 June 2020 OTHER COMPREHENSIVE INCOME: Note
mPLN mPLN mPLN mPLN Net profit 94.2 249.3 48.7 177.6
Total other comprehensive income - - - - TOTAL COMPREHENSIVE INCOME FOR THE 94.2 249.3 48.7 177.6 REPORTING PERIOD * The restatement has been disclosed in detail in explanatory note 2.10 to these interim condensed financial statements.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 6
Interim Statement of Financial Position Asseco Poland S.A.
30 June 2021 31 December 2020 ASSETS Note mPLN mPLN
Non-current assets
Property, plant and equipment 5.1 305.4 310.5
Intangible assets 5.2 2,207.5 2,208.8
of which goodwill from business combinations 5.4 1,936.9 1,936.9
Right-of-use assets 5.3 86.5 90.2
Investment property 0.3 0.3
Investments in subsidiaries and associates 5.5 2,070.8 2,069.2
Other receivables and trade receivables 5.9 51.3 57.0
Prepayments and accrued income 5.8 35.2 40.9
Other assets 5.7 25.4 25.9
4,782.4 4,802.8
Current assets
Inventories 5.11 2.8 1.4
Trade receivables 5.9 163.7 220.6
Contract assets 5.9 137.5 112.0
Corporate income tax receivable 0.4 2.3
Other receivables 5.9 18.6 24.1
Prepayments and accrued income 5.8 38.0 39.9
Other assets 5.7 3.1 2.2
Cash and short-term deposits 5.10 134.9 164.8
499.0 567.3
TOTAL ASSETS 5,281.4 5,370.1
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 7
Interim Statement of Financial Position Asseco Poland S.A.
30 June 2021 31 December 2020 EQUITY AND LIABILITIES Note
mPLN mPLN
TOTAL EQUITY
Share capital 83.0 83.0
Share premium 4,180.1 4,180.1
Retained earnings 630.3 639.1
4,893.4 4,902.2
Non-current liabilities Lease liabilities 5.12 59.6 63.2
Other financial liabilities 5.13 3.4 3.8
Deferred tax liabilities 27.9 21.8
Contract liabilities 5.16 36.2 46.9
Other liabilities 5.15 0.4 0.3
Provisions 5.17 4.0 3.8
Accruals and deferred income 5.18 50.3 51.8
181.8 191.6
Current liabilities Lease liabilities 5.12 8.8 8.8
Other financial liabilities 5.13 2.3 2.3
Trade payables 5.15 53.6 84.1
Contract liabilities 5.16 71.3 98.9
Other liabilities 5.15 15.3 35.3
Provisions 5.17 2.3 5.7
Accruals and deferred income 5.18 52.6 41.2
206.2 276.3
TOTAL LIABILITIES 388.0 467.9
TOTAL EQUITY AND LIABILITIES 5,281.4 5,370.1
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 8
Interim Statement of Changes in Equity Asseco Poland S.A.
Share Retained Note Share capital Total equity premium earnings
mPLN mPLN mPLN mPLN As at 1 January 2021 83.0 4,180.1 639.1 4,902.2
Net profit - - 249.3 249.3
Total comprehensive income for the reporting period - - 249.3 249.3
Dividend for the year 2020 4.6 - - (258.1) (258.1)
As at 30 June 2021 83.0 4,180.1 630.3 4,893.4
As at 1 January 2020 83.0 4,180.1 629.3 4,892.4
Net profit - - 177.6 177.6
Total comprehensive income for the reporting period - - 177.6 177.6
Dividend for the year 2019 4.6 - - (249.8) (249.8)
As at 30 June 2020 83.0 4,180.1 557.1 4,820.2
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 9
Interim Statement of Cash Flows Asseco Poland S.A. 6 months ended 6 months ended 30 June 2021 30 June 2020 Note
mPLN mPLN Cash flows – operating activities
Pre-tax profit 271.5 192.6 Total adjustments: (173.2) (115.6) Depreciation and amortization 27.7 31.7 Changes in working capital 6.1 (32.1) (23.3) Interest income/expenses 0.7 0.3 Gain/loss on foreign currency translation differences (0.3) (0.4) Dividend income 4.3 (158.5) (127.9) Other financial (income) expenses (9.7) 2.0 (Gain) loss on investing activities (1.7) 2.0 Other adjustments 0.7 - Cash generated from operating activities 98.3 77.0 (Corporate income tax paid) (12.7) (17.3) Net cash provided by (used in) operating activities 85.6 59.7 Cash flows – investing activities Inflows: Disposal of property, plant and equipment, and intangible assets 6.2 9.4 1.0 Disposal of investments in related entities 6.2 4.9 25.0 Loans collected 6.2 8.0 2.4 Dividends received 158.0 128.6 Interest received 0.4 1.2 Outflows: Acquisition of property, plant and equipment, and intangible assets 6.2 (14.5) (24.9) Expenditures for development projects in progress 6.2 (9.4) (9.8) Acquisition of shares in related entities 6.2 (9.4) (9.3) Loans granted 6.2 (0.5) (1.0)
Net cash provided by (used in) investing activities 146.9 113.2 Cash flows – financing activities Inflows:
Grants received 2.8 5.6 Outflows: Dividends paid out 6.3 (258.1) (249.8) Payments of lease liabilities (4.4) (16.6) Interest paid (2.7) (1.6) Net cash provided by (used in) financing activities (262.4) (262.4)
Net change in cash and cash equivalents (29.9) (89.5) Net foreign currency translation differences - 0.2 Cash and cash equivalents as at 1 January 164.8 168.7 Cash and cash equivalents as at 30 June 5.10 134.9 79.4
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 10
Explanatory Notes to the Interim Condensed
Financial Statements of Asseco Poland S.A.
Explanatory Notes to the Interim Condensed Financial Statements 1. General information
General information on the Parent Company
Name Asseco Poland S.A. Registered seat Rzeszów, 14 Olchowa St. National Court Register number 0000033391 Statistical ID number (REGON) 010334578 Tax Identification Number (NIP) 522-000-37-82 Core business Production of software
Asseco Poland S.A. (the “Company”, “Issuer”, “Asseco”) with registered office at 14 Olchowa St., Rzeszów, Poland, was established on 18 January 1989. On 4 January 2007, the Issuer changed its corporate name from Softbank S.A. to Asseco Poland S.A. The period of the Company’s operations is indefinite. Since 1998, the Company’s shares have been listed on the main market of the Warsaw Stock Exchange S.A. Asseco Poland S.A. is one of the largest IT companies listed on the Warsaw Stock Exchange. The Company is also a major player in the European software producers market. Asseco Poland S.A. focuses on the production and development of proprietary software, dedicated for each sector of the economy. As one of the very few companies in Poland, Asseco Poland develops and implements integrated core banking systems that are operated by over half of domestic banks. Furthermore, Asseco offers software solutions for the insurance industry and implements dedicated systems for the public administration, among others for the Polish Social Insurance Institution (ZUS) or the Ministry of Finance. Asseco implements numerous IT projects for the energy industry, telecommunications, healthcare, local governments, agriculture, uniformed services, as well as for international organizations and institutions. As a leader of Asseco Group, Asseco Poland S.A. is actively engaged in mergers and acquisitions both in the Polish and foreign markets, seeking to strengthen its position across Europe and worldwide. The Company is expanding its investment spectrum for software houses, with an eye to gain insight into their local markets and customers, as well as access to innovative and unique IT solutions.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 12
2. Basis for the preparation of interim condensed financial statements
2.1. Basis for preparation These interim condensed financial statements have been prepared in accordance with the historical cost convention, except for financial assets carried at fair value through profit or loss or through other comprehensive income, financial assets carried at amortized cost, financial liabilities carried at fair value through profit or loss, as well as investment property measured at fair value. These interim condensed financial statements have been prepared on a going-concern basis, assuming the Company will continue its business activities in the foreseeable future. Till the date of preparing these financial statements, we have not observed any circumstances that would threaten the Company’s ability to continue as a going concern. These interim condensed financial statements do not include all information and disclosures required for annual financial statements and therefore they should be read together with the financial statements of Asseco Poland S.A. for the year ended 31 December 2020 which were published on 23 March 2021. 2.2. Impact of the COVID-19 pandemic on the Company’s business operations As at the date of publication of these financial statements, based on the current analysis of risks and in particular those arising from the COVID-19 pandemic prevailing in Poland and worldwide, the Management Board concluded that the Company’s ability to continue as a going concern over a period not shorter than 12 months from 30 June 2021 is not threatened. The Company is continuously monitoring how the situation caused by the COVID-19 pandemic affects its operations. Within its core business during the first half of 2021, the Company has not recorded any material direct impact of the pandemic on its overall financial position and economic results. However, the epidemiological situation affected the organizational aspect of the Company’s operations, because for the sake of our employees and customers, a large number of the Company’s employees performed their work on a remote basis that was enabled in 2020 in order to ensure business continuity and continued provision of IT services to our customers. At the time of publication of this report, the Company operates on an ongoing basis and fulfils its contractual obligations within the deadlines specified in contracts. Due to the existing circumstances, the Company is trying to minimize the possible negative effects of the pandemic on its future financial results, among others, by reducing certain costs and expenses. At the same time, the Company monitors the current situation in individual sectors of the economy, trying to take advantage of business opportunities in the market of IT products and services which are also created by the pandemic. As described in explanatory note 5.6, after a due analysis, the Company has found no significant risk of impairment of assets, and especially goodwill. We have also observed no significant changes in the collection of receivables, which is why the calculation of expected credit losses remained virtually unchanged, despite the Company applied an increased parameter that reflects generally higher business risk. The Company has sufficient financial resources to continue its business operations, including the settlement of current liabilities. The Company has not experienced a negative impact of the pandemic on its financial liquidity and fulfilled its obligations on a timely basis. The Company decided not to use any state aid funds provided as part of the anti-crisis shield, neither did it apply for deferral of any tax payment deadlines (although it used the statutory extended deadlines for submitting tax declarations), and it did not amend any of its lease contracts. For obvious reasons, the Company cannot exclude the possibility that in the long run an undoubtedly negative impact of the pandemic on the overall economic situation in Poland and in the world may also have an adverse effect on the operations or financial results of the Company in the future; however, it is now impossible to determine to what extent or scale this could occur.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 13
2.3. Compliance statement These interim condensed financial statements have been prepared in conformity with the requirements set forth in the International Accounting Standard 34 ‘Interim Financial Reporting’ as endorsed by the European Union (IAS 34). The scope of these interim condensed financial statements, being a part of the quarterly report, is in accordance with the Regulation of the Minister of Finance of 29 March 2018 regarding current and periodic information to be published by issuers of securities and conditions for recognizing as equivalent the information required by laws of non-EU member states (consolidated text: Journal of Laws of 2018, item 757) (“Regulation”), and covers the semi-annual reporting period from 1 January to 30 June 2021 and the comparable period from 1 January to 30 June 2020 in case of the statement of profit and loss and the statement of cash flows, as well as the financial data as at 30 June 2021 and the comparable data as at 31 December 2020 in case of the statement of financial position. The cumulative data presented for the period of 6 months ended 30 June 2021 as well as for the comparable period have been reviewed by a certified auditor. Whereas, the quarterly data disclosed for the period from 1 April to 30 June 2021 and for the corresponding period of 2020 have not been subject to such a review. These data have been calculated as the difference between the semi-annual cumulative data and the data presented in the quarterly condensed consolidated financial statements of Asseco Group for the interim period ended 31 March 2021 which were published on 26 May 2021.
2.4. Functional currency and presentation currency The presentation currency of these interim condensed financial statements is the Polish zloty (PLN), and all figures are presented in millions of PLN (mPLN), unless stated otherwise. Any inaccuracies in totals, amounting to PLN 0.1 million, are due to the adopted rounding of numbers. The Polish zloty is also the functional currency applied by Asseco Poland S.A. Transactions denominated in currencies other than Polish zloty are, at the time of initial recognition, translated to Polish zlotys using the exchange rate effective on the transaction date. At the reporting date: ▪ monetary items denominated in a foreign currency are translated at the closing exchange rate, this is at the mid exchange rate of that currency as quoted by the National Bank of Poland on the reporting date; ▪ non-monetary items carried at historical cost denominated in a foreign currency are translated using the exchange rate effective on the transaction date; ▪ non-monetary items carried at fair value denominated in a foreign currency are translated using the exchange rate effective on the fair value measurement date. For valuation purposes, we have adopted the following exchange rates of euro and US dollar (and analogically the exchange rates of other currencies as quoted by the National Bank of Poland): ▪ exchange rate effective on 30 June 2021: EUR 1 = PLN 4.5208 ▪ exchange rate effective on 30 June 2020: EUR 1 = PLN 4.4660 ▪ exchange rate effective on 30 June 2021: USD 1 = PLN 3.8035 ▪ exchange rate effective on 30 June 2020: USD 1 = PLN 3.9806 2.5. Professional judgement and estimates Preparation of financial statements in accordance with IFRS requires making estimates and assumptions which have an impact on the data disclosed in such financial statements. Although the adopted assumptions and estimates have been based on the Company’s management best knowledge on the current activities and occurrences, the actual results may differ from those anticipated.
Presented below are the main areas which, in the process of applying our accounting policies, were subject not only to accounting estimates but also to the management’s professional judgement, and whose estimates, if changed, could significantly affect the Company’s future results.
In addition, the Company discloses changes to estimates and professional judgement presented in previous reporting periods that have a significant impact on the current period.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 14
i. Estimates In the period of 6 months ended 30 June 2021, our approach to making estimates was not subject to any substantial modification. In relevant notes to these interim condensed financial statements, the Company has disclosed possible changes to estimates presented in previous reporting periods that have a significant impact on the current interim period.
The table below presents certain items of these interim condensed financial statements that are at significant risk of material adjustment to the carrying values of assets and liabilities.
Significant accounting policies Item described in the financial Estimates and assumptions statements for the year 2020 At each reporting date, the Company determines if there are any objective Property, plant and Note 5.1 indications of impairment of a given component of property, plant and equipment, intangible Note 5.2 equipment, intangible assets and right-of-use assets. In addition, assets and right-of-use Note 5.3 at the end of each financial year, the Company verifies the periods of assets useful life of property, plant and equipment, and intangible assets. Goodwill is tested for impairment on an annual basis as well as at each reporting date when there is a justified indication to do so. Conducting Goodwill Note 5.4 an impairment test each time requires making many assumptions and exercising professional judgment. As required by IFRS 9 ‘Financial Instruments’, the Company classifies and Financial assets – Note 5.7 measures loans granted at each reporting date, as well as estimates Loans granted the amount of impairment losses. The Company estimates the amount of expected credit losses on Receivables and Note 5.9 receivables and assets from contracts with customers in accordance with contract assets the new requirements of IFRS 9 ‘Financial Instruments’. The Company makes an assessment of realizability of deferred income tax Deferred tax assets Note 4.4 assets at each reporting date. The Company estimates the amount of provisions created based on the adopted assumptions, methodology and appropriate calculation methods. A provision should be recognized when the Company has Provisions Note 5.17 a present obligation arising from past events, the settlement of which is probable to require an outflow of resources embodying economic benefits from the Company.
2.6. Accounting policies applied Significant accounting policies applied by the Company in these interim condensed financial statements are consistent with those explained in the Company’s annual financial statements for the year 2020, except for the application of new presentation methods as described in explanatory note 2.8 and the adoption of new or amended standards and interpretations effective for annual periods beginning on or after 1 January 2021. New standards or amendments effective from 1 January 2021: ▪ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16: ‘Interest Rate Benchmark Reform – Phase 2’; ▪ Amendments to IFRS 4 ‘Insurance Contracts’ – ‘Extension of the Temporary Exemption from Applying IFRS 9 Financial Instruments’.
The amended standards and interpretations that became effective starting from 2021 have had no significant impact of the interim condensed financial statements of the Company.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 15
2.7. New standards and interpretations published but not in force yet The following standards and interpretations were issued by the International Accounting Standards Board (IASB) and International Financial Reporting Interpretations Committee (IFRIC), but have not yet come into force: ▪ IFRS 14 ‘Regulatory Deferral Accounts’ (issued on 30 January 2014) – the European Commission has decided not to initiate the process of endorsement of this standard until the release of its final version – not yet endorsed by the EU till the date of approval of these financial statements – effective for annual periods beginning on or after 1 January 2016; ▪ Amendments to IFRS 10 and IAS 28 ‘Sale or Contribution of Assets Between an Investor and its Associate or Joint Venture’ (issued on 11 September 2014) – work for the endorsement of these amendments has been postponed by the EU – the effective date of these amendments has been deferred indefinitely by the IASB; ▪ IFRS 17 ‘Insurance Contracts’ (issued on 18 May 2017) and amendments to IFRS 17 (issued on 25 June 2020) – not yet endorsed by the EU till the date of approval of these financial statements – effective for annual periods beginning on or after 1 January 2023; ▪ Amendments to IAS 1 ‘Presentation of Financial Statements – Classification of Liabilities as Current or Non-Current’ and ‘Classification of Liabilities as Current or Non-current – Deferral of Effective Date’ (issued on 23 January 2020 and 15 July 2020, respectively) – not yet endorsed by the EU till the date of approval of these financial statements – effective for annual periods beginning on or after 1 January 2023; ▪ Amendments to IFRS 3 ‘Reference to the Conceptual Framework’ (issued on 14 May 2020) – effective for annual periods beginning on or after 1 January 2022; ▪ Amendments to IAS 16 ‘Property, Plant and Equipment – Proceeds before Intended Use’ (issued on 14 May 2020) – effective for annual periods beginning on or after 1 January 2022; ▪ Amendments to IAS 37 ‘Onerous Contracts – Cost of Fulfilling a Contract’ (issued on 14 May 2020) – effective for annual periods beginning on or after 1 January 2022; ▪ Annual Improvements to IFRSs: 2018-2020 Cycle (issued on 14 May 2020) – effective for annual periods beginning on or after 1 January 2022; ▪ Amendments to IAS 1 and IFRS Practice Statement 2 ‘Disclosure of Accounting Policies’ (issued on 12 February 2021) – not yet endorsed by the EU till the date of approval of these financial statements – effective for annual periods beginning on or after 1 January 2023; ▪ Amendments to IAS 8 ‘Definition of Accounting Estimates’ (issued on 12 February 2021) – not yet endorsed by the EU till the date of approval of these financial statements – effective for annual periods beginning on or after 1 January 2023; ▪ Amendments to IFRS 16 ‘Covid-19-Related Rent Concessions beyond 30 June 2021’ (issued on 31 March 2021) – not yet endorsed by the EU till the date of approval of these financial statements – effective for annual periods beginning on or after 1 April 2021; ▪ Amendments to IAS 12 ‘Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction’ (issued on 6 May 2021) – not yet endorsed by the EU till the date of approval of these financial statements – effective for annual periods beginning on or after 1 January 2023. The actual dates of adopting these standards in the European Union may differ from those set forth in the standards and they shall be announced once they are approved for application by the European Union. The Company did not decide on early adoption of any standard, interpretation or amendment which has been published but has not yet become effective. The Company is currently conducting an analysis of how the above-mentioned amendments are going to impact its financial statements.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 16
2.8. Changes in the presentation methods applied Since 1 January 2021, income from letting of property and related expenses have been disclosed by the Company within its core operating activities instead of in other operating activities, as a result on letting of property. This change is intended to ensure coherent presentation of rental income, regardless of rented assets. Except for the modification described above, the applied methods of presentation were not subject to any changes during the reporting period. 2.9. Corrections of material errors In the reporting period, no events occurred that would require making corrections of any misstatements. 2.10. Restatement of comparable data As described in explanatory note 2.8, in 2021 the Company has modified the presentation of result on letting of property. The table below presents impact of the said changes on the comparable data contained in the statement of profit and loss:
Changes in the 6 months ended 6 months ended STATEMENT OF PROFIT AND LOSS presentation methods 30 June 2020 30 June 2020 applied (restated)
mPLN mPLN mPLN Operating revenues 430.4 5.3 435.7 Cost of sales (302.9) (4.6) (307.5) Gross profit on sales 127.5 0.7 128.2 Selling costs (20.6) - (20.6) General and administrative expenses (42.6) - (42.6) Net profit on sales 64.3 0.7 65.0 Other operating income 2.2 (0.7) 1.5 Other operating expenses (1.1) - (1.1) Operating profit 65.4 - 65.4 Financial income 131.6 - 131.6 Financial expenses (4.4) - (4.4) Pre-tax profit 192.6 - 192.6 Corporate income tax (15.0) - (15.0) Net profit 177.6 - 177.6
Earnings per share (in PLN):
basic earnings per share 2.14 - 2.14 diluted earnings per share 2.14 - 2.14
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 17
3. Information on operating segments
According to IFRS 8, an operating segment is a separable component of the Company’s business for which separate financial information is available and regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. The Company has identified the following reportable segments (a reportable segment is an operating segment that is required for disclosure under IFRS 8): Banking and Finance – this segment offers comprehensive baking systems, capital market systems (for brokerage houses, banks, firms and institutions engaged in investing activities) as well as highly specialized solutions and IT services for the commercial insurance sector. During the period of 6 months ended 30 June 2021, the segment’s major clients included: Bank PKO BP S.A., Bank PEKAO S.A., SGB-Bank S.A., Bank Ochrony Środowiska S.A., and Bank Gospodarstwa Krajowego. Revenues from none of the above-mentioned clients exceeded the threshold of 10% of operating revenues generated by the Company in the period of 6 months ended 30 June 2021. Public Administration – within this segment Asseco Poland S.A. carries out projects including the design, development, implementation and operation of dedicated IT systems. During the period of 6 months ended 30 June 2021, the segment’s major clients included: Social Insurance Institution (ZUS), Agency for Restructuring and Modernization of Agriculture (ARiMR), National Healthcare Fund (NFZ), Ministry of Justice, and Frontex – European Agency for the Management of Operational Cooperation at the External Borders of the EU Member States. Only revenues obtained from the Social Insurance Institution exceeded the threshold of 10% of operating revenues generated by the Company in the period of 6 months ended 30 June 2021. General Business – this segment is engaged in the provision of dedicated IT solutions for large and medium-sized industrial enterprises (energy industry, gas industry, and telecommunications). The core business areas of this segment include the sale of proprietary software (in particular billing systems) as well as information technology services such as IT consulting, systems integration and implementation, and related support services. During the period of 6 months ended 30 June 2021, the segment’s major clients included: Polsat Plus Group, Tauron Group, Enea Group, and PGNiG Group. Revenues from none of the above-mentioned clients exceeded the threshold of 10% of operating revenues generated by the Company in the period of 6 months ended 30 June 2021. None of the Company’s operating segments needed to be combined with another operating segment in order to be identified as a reportable segment. The results achieved by individual segments are regularly monitored by the management in order to decide on allocation of resources among operating segments as well as to assess their performance and effects of such allocation. Operating profit (loss) is the main measure in evaluation of the segment’s performance. The column ‘Other’ includes revenues and costs related to the operations of the Group. Financing activities (including financial expenses and income) as well as income taxes are monitored at the whole company level and therefore they are not allocated to individual operating segments. The Management also does not analyze cash flows in a breakdown to segments. The transfer prices applied in transactions conducted between our operating segments are determined on an arm’s length basis just as in case of transactions with unrelated parties. The table below presents the key financial information reviewed by the chief operating decision maker in the Company. Apart from goodwill and intangible assets recognized in business combinations, assets and liabilities of Asseco Poland S.A. are not essentially allocated to individual segments and are not subject to review by the Company’s Management in this perspective. Whereas, net operating assets are allocated to the identified segments for the purpose of carrying out impairment tests, however, such allocation is made using the allocation key based on an average 3-year operating profit margin.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 18
Public General Business Banking and Other Total Eliminations Total Administration segment Finance segment Period of 6 months ended 30 June 2021 segment mPLN mPLN mPLN mPLN mPLN mPLN mPLN Sales to external customers 159.6 268.4 92.8 8.9 529.7 - 529.7
Inter-segment settlements (0.3) (0.8) 1.3 (0.2) - - -
Net profit on sales of reportable segment 32.0 65.7 11.9 (8.8) 100.8 - 100.8
Depreciation and amortization (8.6) (14.1) (3.0) (2.0) (27.7) - (27.7) Average number of employees, recalculated into full-time salaried 873 991 285 45 2,194 - 2,194 jobs Intangible assets recognized in business combinations 1.5 34.9 - - 36.4 n/a 36.4 allocated to the segment Goodwill from business combinations allocated to the segment 896.8 859.1 181.0 n/a 1,936.9 n/a 1,936.9
Public General Business Banking and Other Total Eliminations Total Administration segment Finance segment (restated) (restated) Period of 6 months ended 30 June 2020 (restated) segment mPLN mPLN mPLN mPLN mPLN mPLN mPLN Sales to external customers 153.8 211.0 60.8 10.1 435.7 - 435.7
Inter-segment settlements (0.5) (0.6) 1.8 (0.6) 0.1 (0.1) -
Net profit on sales of reportable segment 40.3 25.2 11.8 (12.3) 65.0 - 65.0
Depreciation and amortization (8.8) (14.8) (3.1) (7.1) (33.8) - (33.8) Average number of employees, recalculated into full-time salaried 909 945 280 31 2,165 - 2,165 jobs Intangible assets recognized in business combinations 3.2 38.1 - - 41.3 n/a 41.3 allocated to the segment Goodwill from business combinations allocated to the segment 896.8 859.1 181.0 n/a 1,936.9 n/a 1,936.9
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 19
4. Explanatory notes to the statement of profit and loss and other comprehensive income
4.1 Structure of operating revenues Operating revenues generated during the periods of 3 and 6 months ended 30 June 2021 and in the comparable periods were as follows:
3 months ended 6 months ended 3 months ended 6 months ended 30 June 2021 30 June 2021 30 June 2020 30 June 2020 (restated) (restated) mPLN mPLN mPLN mPLN Operating revenues by type of products Proprietary software and services 252.9 488.6 207.3 398.9 Third-party software and services 14.6 40.3 13.9 26.7 Hardware and infrastructure 0.6 0.8 7.9 10.1 Total operating revenues 268.1 529.7 229.1 435.7
i. Segment revenues in a breakdown by type of products
Sales revenues of individual segments generated by type of products during the periods of 3 and 6 months ended 30 June 2021 and in the comparable periods were as follows:
Banking and Public General Business Other Total Finance Administration
mPLN mPLN mPLN mPLN mPLN 3 months ended 30 June 2021 Proprietary software and services 82.8 126.2 39.1 4.8 252.9 Third-party software and services 1.0 10.1 3.3 0.2 14.6 Hardware and infrastructure - 0.6 - - 0.6 Total sales revenues 83.8 136.9 42.4 5.0 268.1 6 months ended 30 June 2021 Proprietary software and services 157.7 247.4 74.8 8.7 488.6 Third-party software and services 1.8 20.3 18.0 0.2 40.3 Hardware and infrastructure 0.1 0.7 - - 0.8 Total sales revenues 159.6 268.4 92.8 8.9 529.7
3 months ended 30 June 2020
(restated) Proprietary software and services 73.3 98.8 30.4 4.8 207.3 Third-party software and services 1.0 10.5 2.4 - 13.9 Hardware and infrastructure - 2.0 5.9 - 7.9 Total sales revenues 74.3 111.3 38.7 4.8 229.1 6 months ended 30 June 2020
(restated) Proprietary software and services 151.6 186.0 51.3 10.0 398.9 Third-party software and services 2.1 21.5 3.0 0.1 26.7 Hardware and infrastructure 0.1 3.5 6.5 - 10.1 Total sales revenues 153.8 211.0 60.8 10.1 435.7
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 20
ii. Revenues from contracts with customers by the method of recognition in the statement of profit and loss
3 months ended 30 6 months ended 3 months ended 30 6 months ended June 2021 30 June 2021 June 2020 30 June 2020 (restated) (restated) mPLN mPLN mPLN mPLN Revenues from contracts with customers
recognized in accordance with IFRS 15: From goods and services transferred 9.0 28.9 13.4 22.4 at a specific point in time, of which: Banking and Finance segment 1.0 3.7 0.8 3.2 Public Administration segment 5.9 10.1 4.2 9.8 General Business segment 2.1 15.1 8.4 9.4 Others segment - - - - From goods and services transferred 257.3 497.2 213.2 408.0 over the passage of time, of which: Banking and Finance segment 82.8 155.9 73.5 150.6 Public Administration segment 131.0 258.3 107.1 201.2 General Business segment 40.3 77.7 30.3 51.4 Others segment 3.2 5.3 2.3 4.8 Revenues from operating leases recognized 1.8 3.6 2.5 5.3 in accordance with IFRS 16 Total operating revenues 268.1 529.7 229.1 435.7
iii. Operating revenues in a breakdown by countries in which they were generated
3 months ended 30 6 months ended 3 months ended 30 6 months ended June 2021 30 June 2021 June 2020 30 June 2020
(restated) (restated) mPLN mPLN mPLN mPLN Poland 261.4 517.3 224.5 425.8 Foreign countries, including: 6.7 12.4 4.6 9.9 Germany 3.4 6.4 2.3 5.1 Slovakia 1.3 2.3 0.8 1.6 Austria 0.6 1.3 0.3 0.7 Gibraltar 0.3 0.7 0.4 0.7 Belgium - 0.1 0.6 1.3 Other 1.1 1.6 0.2 0.5 Total 268.1 529.7 229.1 435.7
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 21
4.2 Structure of operating costs The table below presents operating costs incurred in the periods of 3 and 6 months ended 30 June 2021 and in the comparable periods.
3 months ended 6 months ended 3 months ended 6 months ended Operating costs 30 June 2021 30 June 2021 30 June 2020 30 June 2020 (restated) (restated) mPLN mPLN mPLN mPLN Cost of goods, materials and third-party services (14.0) (39.2) (20.0) (34.2) sold Employee benefits (108.5) (216.9) (98.3) (188.6) Depreciation and amortization (20.1) (27.7) (16.7) (33.8) Third-party services (58.9) (114.2) (45.3) (83.9) Other (10.3) (30.9) (14.8) (30.2) Total (211.8) (428.9) (195.1) (370.7) Cost of sales (178.3) (360.8) (162.4) (307.1) Selling costs (9.5) (21.1) (10.8) (20.6) General and administrative expenses (23.2) (46.6) (21.7) (42.6) (Recognition)/Reversal of allowances for trade (0.8) (0.4) (0.2) (0.4) receivables Total (211.8) (428.9) (195.1) (370.7)
In the period of 6 months ended 30 June 2021, other operating costs included primarily maintenance of property and company cars in the amount of PLN 25.2 million, as well as business trips in the amount of PLN 0.3 million. Whereas, in the comparable period other operating costs included primarily maintenance of property and company cars in the amount of PLN 19.3 million, as well as business trips in the amount of PLN 1.3 million.
i. Costs of employee benefits
3 months ended 6 months ended 3 months ended 6 months ended 30 June 2021 30 June 2021 30 June 2020 30 June 2020 mPLN mPLN mPLN mPLN Salaries (88.2) (176.1) (79.9) (152.5) Social insurance contributions (7.9) (16.2) (7.4) (14.1) Costs of pension benefits (10.3) (20.4) (8.4) (17.3) Other post-employment benefits (0.4) (0.7) (0.8) (1.0) Other costs of employee benefits (1.7) (3.5) (1.8) (3.7) Total costs of employee benefits (108.5) (216.9) (98.3) (188.6)
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 22
4.3 Financial income and expenses Financial income earned during the periods of 3 and 6 months ended 30 June 2021 and in the comparable periods was as follows:
3 months ended 6 months ended 3 months ended 6 months ended Financial income 30 June 2021 30 June 2021 30 June 2020 30 June 2020 mPLN mPLN mPLN mPLN Interest income on investments in debt securities and bank deposits carried 0.4 0.7 0.4 1.6 at amortized cost Other interest income - - 0.1 0.1 Positive foreign currency translation differences (0.2) 0.6 (1.5) 2.0 Dividends received and receivable 39.0 158.5 23.1 127.9 Gain on sale of shares in subsidiaries 0.9 0.9 - - Net gain on exercise and/or valuation 0.2 0.2 - - of derivative instruments Reversal of impairment losses on financial 7.3 7.3 - - instruments Reversal of allowance for expected credit losses 9.6 9.6 - - on dividends receivable Total 57.2 177.8 22.1 131.6
Positive and negative foreign currency translation differences are presented in net amounts (reflecting the excess of positive differences over negative differences or otherwise).
The reversal of allowance for expected credit losses on dividends receivable resulted from collecting past-due dividends in the amount of RUB 191.2 million (PLN 9.6 million). This has been described in explanatory note 8.4 to the interim condensed consolidated financial statements of Asseco Group for the period of 3 months ended 31 March 2021. On 17 May 2021, Asseco International, a.s. sold 49% of shares in the company R-Style Softlab Ltd. Part of this shares sale transaction was the payment of past-due dividends by R-Style to Asseco Poland S.A. From 2017, the whole amount of such dividends was written-down due to expected credit losses.
The reversal of impairment losses on financial instruments was a consequence of the repayment of a loan that was formerly granted to Gdyński Klub Koszykówki Arka S.A. (basketball club). The loan was repaid by Gdyński Klub Koszykówki Arka in the second quarter of 2021, following an increase in the share capital of this entity that was financed by Asseco Poland S.A. Concurrently, the total value of our investment in Gdyński Klub Koszykówki Arka was written down which eliminated the positive impact of the above-mentioned loan repayment on the results of Asseco Poland in the period reported.
Financial expenses incurred during the periods of 3 and 6 months ended 30 June 2021 and in the comparable periods were as follows:
3 months ended 6 months ended 3 months ended 6 months ended
Financial expenses 30 June 2021 30 June 2021 30 June 2020 30 June 2020 mPLN mPLN mPLN mPLN Interest expenses on bank loans, debt securities (0.1) (0.1) - - and trade payables Interest expenses on leases (0.6) (1.2) (0.8) (1.6) Other interest expenses (0.2) (0.5) (0.3) (0.6) Impairment loss on investments (7.5) (7.5) - - Loss on exercise and/or valuation of derivative 1.2 - 3.0 (2.1) instruments Other financial expenses (0.2) (0.1) - (0.1) Total (7.4) (9.4) 1.9 (4.4)
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 23
4.4 Corporate income tax The main charges on pre-tax profit resulting from corporate income tax (current and deferred portions):
3 months ended 6 months ended 3 months ended 6 months ended 30 June 2021 30 June 2021 30 June 2020 30 June 2020 mPLN mPLN mPLN mPLN Current income tax and prior years’ adjustments (9.4) (16.1) (6.3) (9.0) Deferred income tax (3.3) (6.1) (3.1) (6.0) Income tax expense as disclosed in the statement of (12.7) (22.2) (9.4) (15.0) profit and loss On 15 July 2016, Poland’s Tax Code was amended to include the provisions of General Anti-Abuse Rule (GAAR). GAAR is intended to prevent the creation and use of artificial legal arrangements aiming to avoid payment of taxes in Poland. GAAR defines tax avoidance as an action carried out for the essential purpose of obtaining a tax benefit that under the circumstances is inconsistent with the object and purpose of relevant tax provisions. According to GAAR, an action shall not result in achieving a tax advantage if it is conducted on a non-genuine basis. The occurrence of (i) an unjustified division of operations, (ii) involvement of intermediaries without an economic or commercial reason, (iii) mutually cancelling or offsetting elements, as well as (iv) any other actions of similar nature may be considered to indicate the undertaking of artificial actions that are subject to GAAR provisions. These regulations require much greater judgment when assessing the tax effects of each transaction. The general anti-abuse rule shall apply to transactions conducted after its entry into force as well as to transactions that were carried out prior to its entry into force but brought tax benefits after that time or still continue to bring such benefits. The implementation of the above-mentioned regulations has enabled the Polish tax control authorities to put into question the legal arrangements and agreements undertaken by taxpayers, including the restructuring or reorganization of a group of companies. Regulations pertaining to the value added tax, corporate income tax, personal income tax or social security are frequently amended, thereby depriving taxpayers of a possibility to refer to well established court decisions and precedents. The current regulations in force are not always unambiguous, which may cause additional discrepancies in their interpretation. Tax treatments are subject to control by the taxation authorities. Should any irregularities in tax settlements be detected, a taxpayer is obliged to pay the outstanding amounts along with the statutory interest thereon. Payment of tax arrears does not always release a taxpayer from penal and fiscal liability. Due to such circumstances, tax treatments are subject to a relatively high risk. Settlement of tax liabilities may come under control in a period of five years, counting from the end of the year in which relevant tax returns were filed. In effect, the amounts of taxes payable disclosed in the financial statements may be later changed, after they are finally determined by the taxation authorities. Presented below is the reconciliation of corporate income tax payable on pre-tax profit at the statutory tax rate, with corporate income tax computed at the effective tax rate.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 24
3 months 6 months 3 months 6 months ended ended ended ended 30 June 2021 30 June 2021 30 June 2020 30 June 2020
mPLN mPLN mPLN mPLN Pre-tax profit from continuing operations 106.9 271.5 58.1 192.6 Statutory corporate income tax rate 19% 19% 19% 19% Corporate income tax computed at the statutory tax rate 20.3 51.6 11.0 36.6 Dividends received from subsidiaries and associates (7.4) (28.3) (4.4) (24.3) Expenses related to tax-exempt dividend income 1.1 2.3 3.0 3.0 IP Box – difference resulting from the application of a (2.0) (4.1) - (0.2) different tax rate R&D tax reliefs (including prior year adjustments) (0.2) (0.6) (0.5) (1.0) CIT (difference between corporate income tax recognized - - 0.2 0.2 and the CIT-8 tax filing) Provision for controlled foreign corporations (CFC) - - 0.1 0.1 Exceeding the limit of expenditures for intangible assets - 0.9 0.9 Reversal of a write-down on deferred tax assets - - (0.6) (0.6) Other permanent differences 0.9 1.3 (0.3) 0.3 Corporate income tax computed at the effective tax rate 12.7 22.2 9.4 15.0 Effective rate of corporate income tax 11.9% 8.2% 16.2% 7.8%
4.5 Earnings per share Both during the reporting period and the comparable period, there were no instruments that could potentially dilute basic earnings per share, hence our basic earnings per share and diluted earnings per share are equal. The table below presents net profits and numbers of shares used for the calculation of earnings per share.
3 months ended 6 months ended 3 months ended 6 months ended 30 June 2021 30 June 2021 30 June 2020 30 June 2020 Weighted average number of ordinary shares outstanding, used for calculation of basic earnings 83,000,303 83,000,303 83,000,303 83,000,303 per share Net profit attributable to shareholders of the Company for the reporting period 94.2 249.3 48.7 177.6 (in millions of PLN) Earnings per share for the reporting period 1.14 3.00 0.59 2.14 (in PLN)
4.6 Information on dividends paid out On 20 May 2021, the General Meeting of Shareholders of Asseco Poland S.A. resolved that the net profit for the financial year 2020, which equalled PLN 265.6 million, should be distributed as follows: the amount of PLN 258.1 million was allocated for distribution among the Company’s Shareholders through the payment of a dividend amounting to PLN 3.11 per share, while the remaining portion of the net profit in the amount of PLN 7.5 million was allocated to the reserve capital. The dividend record date was set for 4 June 2021; whereas, the dividend payment was scheduled for 18 June 2021. On 27 April 2020, Asseco Poland S.A. held its Annual General Meeting of Shareholders which resolved that the whole amount of net profit for the financial year 2019, which equalled PLN 206.8 million, shall be distributed among Shareholders in the form of a dividend payment. Additionally, the GMS decided to increase such dividend payment by distributing a portion of prior years’ retained earnings in the amount of PLN 43.0 million. This means that the total amount allocated to dividend payment reached PLN 249.8 million or PLN 3.01 per share. The dividend record date was set for 5 June 2020; whereas, the dividend payment was scheduled for 17 June 2020.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 25
5. Explanatory notes to the statement of financial position 5.1. Property, plant and equipment Changes in the net book value of property, plant and equipment that took place during the period of 6 months ended 30 June 2021 and in the comparable period are presented below:
6 months ended 6 months ended
30 June 2021 30 June 2020 mPLN mPLN Net book value of property, plant and equipment as at 1 January 310.5 284.6 Additions, of which: 9.1 19.6 Purchases and modernization 9.1 19.6 Reductions, of which: (13.6) (12.5) Depreciation charges for the reporting period (11.4) (12.1) Disposal and liquidation (2.2) (0.4) Change in presentation (0.5) - Increase of impairment losses (0.1) - Net book value of property, plant and equipment as at 30 June 305.4 291.7
5.2. Intangible assets Changes in the net book value of intangible assets that took place during the period of 6 months ended 30 June 2021 and in the comparable period are presented below:
6 months ended 6 months ended
30 June 2021 30 June 2020 mPLN mPLN Net book value of intangible assets as at 1 January 2,208.8 2,216.1 Additions, of which: 11.6 12.0 Purchases and modernization 1.9 1.8 Costs of development projects in progress 9.7 10.2 Reductions, of which: (12.7) (13.5) Amortization charges for the reporting period (12.5) (13.5) Disposal and liquidation (0.2) - Change in presentation (0.2) - Net book value of intangible assets as at 30 June 2,207.5 2,214.6
5.3. Right-of-use assets Changes in the net book value of right-of-use assets that took place during the period of 6 months ended 30 June 2021 and in the comparable period are presented below:
6 months ended 6 months ended 30 June 2021 30 June 2020 mPLN mPLN
Net book value of right-of-use assets as at 1 January 90.2 87.0
Additions, of which: 1.2 10.7
Conclusion of new lease contracts 0.9 8.0
Modification of existing contracts (lease extension, interest rate change) 0.3 2.7
Reductions, of which: (4.9) (7.6)
Depreciation charges for the reporting period (4.8) (7.6)
Modification of existing contracts (lease shortening, interest rate change) (0.1) -
Net book value of right-of-use assets as at 30 June 86.5 90.1
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 26
5.4. Goodwill The largest portion of intangible assets is constituted by goodwill recognized from business combinations that were carried out in previous years. As at 30 June 2021 and in the comparable period, goodwill arising from business combinations amounted to PLN 1,936.9 million. Goodwill is allocated to the following operating segments which are treated as cash-generating units:
30 June 2021 31 December 2020
mPLN mPLN Goodwill allocated to the Banking and Finance segment 896.8 896.8 Goodwill allocated to the Public Administration segment 859.1 859.1 Goodwill allocated to the General Business segment 181.0 181.0 Goodwill presented in intangible assets 1,936.9 1,936.9
Goodwill is tested for impairment whenever there are indications of impairment, but at least once a year. The assessment of circumstances and indications that may require performing an impairment test as at 30 June 2021 has been described in explanatory note 5.6 to these interim condensed financial statements of Asseco Poland S.A.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 27
5.5. Investments in subsidiaries and associates The structure of Asseco Poland’s investments in subsidiaries and associates is presented in the chart below:
Asseco Poland S.A.
Asseco International, a.s. Asseco Data Systems S.A. Asseco Services Sp. z o.o. Slovakia Poland Poland 100/100 (100/100) 100/100 (100/100) 100/100 (100/100)
Formula Systems (1985) Ltd ZUI Novum Sp. z o.o. IMX tow * Israel Poland Ukraine 25.60/25.60 (25.60/25.60) 51.08/51.08 (51.08/51.08) 100/100 (100/100)
DahliaMatic Sp. z o.o. KKI-BCI Sp. z o.o. * Poland Poland 100/100 (100/100) 100/100 (100/100)
Podkarp. Fund. Nieruchomości Sp. z o.o. Postdata S.A. Poland Poland 100/100 (100/100) 49/49 (49/49)
Gdyński Klub Koszykówki Arka SA** NEXTBANK SOFTWARE Sp. z o.o. Poland Poland 89.17/89.17 (36.78/36.78) 60.8/60.8 (60.8/60.8)
GSTN Consulting Sp. z o.o. adesso banking solutions GmbH Poland 50/50 (50/50) 100/100 (100/100) Germany
ComCERT S.A. CodeConnexion Ltd * Poland Sri Lanka 100/100 (100/100) 45/45 (45/45)
Asseco Innovation Fund Sp. z o.o. Poland 100/100 (100/100) * company in liquidation Asseco Cloud Sp. z o.o. subsidiary company Poland associated company 100/100 (0/0) joint venture
Kraj. Operator Chmury Med. Sp. z o.o. Poland 100/100 voting rights / equity interest as at 30 June 2021 (in %) 100/100 (0/0) (100/100) voting rights / equity interest as at 31 December 2020 (in %)
** Asseco Poland S.A. holds 74.10% of shares in Gdyński Klub Koszykówki Arka SA, while the remaining 15.07% of shares are held by Podkarp. Fund. Nieruchomości Sp. z o.o.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 28
The Company’s equity investments held as at 30 June 2021 and in the comparable period are disclosed in the table below:
30 June 2021 31 December 2020
mPLN mPLN Investments in companies quoted in an active market Formula Systems (1985), Ltd 249.2 249.2 Investments in non-listed companies Asseco International, a.s. 1,178.7 1,178.7 Asseco Data Systems S.A. 414.6 414.6 Podkarpacki Fundusz Nieruchomości Sp. z o.o. 89.2 89.2 DahliaMatic Sp. z o.o. 73.6 73.6 GSTN Consulting Sp. z o.o. 33.8 33.8 Nextbank Software Sp. z o.o. (associated company) 17.3 17.3 ComCERT S.A. 5.0 5.0 ZUI Novum Sp. z o.o. 3.9 3.9 Asseco Innovation Fund Sp. z o.o. 1.9 1.4 Postdata S.A. (associated company) 1.0 1.0 Krajowy Operator Chmury Medycznej Sp. z o.o. 1.0 - Asseco Services Sp. z o.o. 0.6 0.6 adesso banking solutions GmbH (jointly controlled entity) 0.9 0.9 Asseco Cloud Sp. z o.o. 0.1 - 2,070.8 2,069.2
During the period of 6 months ended 30 June 2021, Asseco Poland’s investments in subsidiaries and associates changed as follows: ▪ Establishing of a new company Asseco Cloud Sp. z o.o. On 5 May 2021, we registered a new company called Asseco Cloud Sp. z o.o. The newly founded company is a 100% owned subsidiary of Asseco Poland S.A. This newly created entity will combine selected departments and divisions of Asseco Data Systems S.A. and Asseco Poland S.A.
▪ Establishing of a new company Krajowy Operator Chmury Medycznej Sp. z o.o. On 6 May 2021, we registered a new company called Krajowy Operator Chmury Medycznej Sp. z o.o. (National Medical Cloud Operator). The newly founded company is a 100% owned subsidiary of Asseco Poland S.A. The equity interest held by Asseco Poland S.A. in this new company will be ultimately limited to 50% and it will operate as a jointly controlled entity of Asseco Poland S.A. ▪ Increasing the share capital of Gdyński Klub Koszykówki Arka S.A. On 15 April 2021, the General Meeting of Shareholders of GKK Arka S.A. adopted a resolution to increase the share capital of this company. As a result, the company issued 84,101 new shares that were acquired by Asseco Poland S.A. and Podkarpacki Fundusz Nieruchomości Sp. z o.o. The share capital increase was registered on 2 June 2021. Following that transaction, Asseco Poland S.A. holds 74.1% of shares in that entity. Concurrently, the total value of our investment in Gdyński Klub Koszykówki Arka was written down.
5.6. Impairment tests
Both as at 30 June 2021 and during the period of 6 months ended 30 June 2021, the stock market capitalization of Asseco Poland S.A. remained higher than the book value of the Company’s net assets.
Ref. 1 Assets employed in operating activities As described in explanatory note 5.4 to these interim condensed financial statements, goodwill arising from business combinations has been allocated to the Company’s operating segments. The value of individual
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 29
cash-generating units has been subsequently increased by net operating assets, which are used by such units to generate cash flows. In accordance with the guidelines of the International Financial Reporting Standards, the Company’s Management analyzed the indications for impairment testing, including in particular the prevailing global COVID-19 pandemic, and reviewed the execution of budgets by individual operating segments identified within the Company. Both the Banking and Finance segment and the Public Administration segment fulfilled their budgets for the period of 6 months ended 30 June 2021, while the General Business segment, despite missing its budget for the first half of 2021, is expected to achieve stronger financial results for the full year 2021 than in 2020. In addition, during the review of forecasts for the coming years, we have found no significant deviations that could derail the achievement of planned business goals, and missing the semi-annual budget was primarily due to postponing the performance of ongoing projects which poses no risk for their completion. With regard to the above, the Management concluded that the assumptions made in the impairment tests carried out as at 31 December 2020 remain realistic, and therefore there are no indications of possible impairment.
Ref. 2 Assets related to investing activities In the case of cash-generating units constituted by companies quoted in an active market, factors indicating potential impairment may include: low market capitalization of a given cash-generating unit (i.e. excess of its book value over its market value). Our companies or groups of companies quoted in an active market include: Asseco Business Solutions S.A., Asseco South Eastern Europe S.A., as well as Formula Systems (1985) Ltd and its subsidiary subgroups. The table below compares the market values of our capital investments against their book values as at 30 June 2021 as well as at the date of the last annual impairment test, this is as at 31 December 2020:
Formula Systems (1985), Asseco South Eastern Asseco Business Ltd Europe S.A. Solutions S.A.
mPLN mPLN mPLN 30 June 2021
book value 249.2 268.8* 69.0*
fair value 1,328.8 1,063.2 563.4 excess (+) / deficit (-) of fair value over 1,079.6 794.4 494.4 carrying value
31 December 2020 book value 249.2 268.8* 69.0*
fair value 1,223.7 1,104.9 534.3 excess (+) / deficit (-) of fair value over 974.5 836.1 465.3 carrying value * As at 30 June 2021, our investments in Asseco South Eastern Europe and in Asseco Business Solutions S.A. both constituted indirect subsidiaries of Asseco Poland S.A. This means that the values of investments in these companies are presented as part of Asseco Poland’s investment in Asseco International that maintains control over the above-mentioned companies. The fair value of our investment in Formula Systems (1985), Ltd. is much higher than its carrying value, hence it was deemed unnecessary to perform any additional interim impairment test. Concurrently, we have concluded that our investment in Asseco International, a.s. does not have to be tested for impairment as at the reporting date, because it comprises the groups of Asseco South Eastern Europe and Asseco Business Solutions whose market capitalizations are substantially higher than their historical carrying values, and the actual budget execution by other of its major subsidiaries is good. As at 30 June 2021, the Company’s Management has found indications of impairment only for our investments in non-public companies that failed to execute their budgets for the first half of 2021. As a consequence, the Company considered it is necessary to conduct impairment tests for our investments in DahliaMatic Sp. z o.o., Asseco Spain S.A., and Asseco PST. The appropriate tests were carried out and, as a result, we found no need to recognize any impairment losses on these investments.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 30
Analysis of sensitivity Additionally, the Company carried out a sensitivity analysis in relation to the impairment test performed for our investing activity assets. Such sensitivity analysis examined the impact of changes in: a. discount rate applied for the residual period, i.e. for cash flows generated after 2025; b. compound annual growth rate of free cash flows over the period of forecast, i.e. in the years 2021-2025; as factors with influence on the recoverable amount of a cash-generating unit, assuming other factors remain unchanged. The objective of such sensitivity analysis was to find out how much the selected parameters applied in the model could be changed so that the estimated value in use of each cash-generating unit equalled its carrying value. The results of the conducted analysis are presented in the table below:
Book value of Incremental annual Discount rate investmen growth rate of free cash for the residual period t flows (FCFF)
applied in incremental
the model % mPLN % % DahliaMatic Sp. z o.o. 73.6 11.4% 13.4% 14.8%
Asseco Spain S.A.* 77.3 8.2% 13.5% 11.5%
Asseco PST (formerly Exictos)* 103.4 8.2% ∞ (25.1%) ∞ means that the incremental discount rate for the residual period is greater than 100%. * As at 30 June 2021, the investments in Asseco Spain S.A. (a direct subsidiary of Asseco Western Europe S.A.) and in Asseco PST constituted indirect subsidiaries of Asseco Poland S.A. This means that the values of investments in these companies are presented as part of Asseco Poland’s investment in Asseco International that maintains direct control over the above-mentioned companies.
5.7. Other assets i. Other financial assets Both as at 30 June 2021 and 31 December 2020, apart from receivables and cash and cash equivalents described in other notes, the Company also held other financial assets as presented in the table below.
30 June 2021 31 Dec. 2020 Long-term Short-term Long-term Short-term
mPLN mPLN mPLN mPLN Financial assets carried at amortized 14.9 0.4 15.1 0.5 cost, of which: Loans granted to related parties 12.5 0.1 12.5 0.1 Loans granted to unrelated parties 1.8 - 1.8 Loans granted to employees 0.6 0.3 0.8 0.4 Financial assets carried at fair value 1.7 0.9 2.0 0.5 through profit or loss, of which: Forward contracts 0.3 0.9 0.6 0.5 Shares in companies quoted in an active market (except for 1.4 - 1.4 - subsidiaries and associates) Financial assets carried at fair value through other comprehensive 8.8 - 8.8 - income, of which: Shares in non-listed companies (except for subsidiaries and 8.8 - 8.8 - associates) Total 25.4 1.3 25.9 1.0
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 31
Changes in the fair value measurement of financial instruments carried at fair value, and changes in the classification of financial instruments In the period of 6 months ended 30 June 2021, the Company did not change its methods for measuring the fair value of financial instruments carried at fair value, did not transfer any instruments between individual levels of the fair value hierarchy, nor did it reclassify any financial instruments. Both as at 30 June 2021 and 31 December 2020, the fair values of financial assets were not significantly different from their book values.
Level 1i) Level 2 ii) Level 3iii) Carrying value As at 30 June 2021 mPLN mPLN mPLN mPLN Financial assets carried at fair value through profit or loss Currency forward contracts 1.2 - 1.2 - Shares in companies listed on regulated markets 1.4 1.4 - - Total 2.6 1.4 1.2 - Financial assets carried at fair value through other comprehensive income Shares in companies not listed on regulated markets 8.8 - - 8.8 Total 8.8 - - 8.8 i. fair value determined on the basis of quoted prices offered in active markets for identical assets; ii. fair value determined using calculation models based on inputs that are observable, either directly or indirectly, in active markets; iii. fair value determined using calculation models based on inputs that are not observable, neither directly or indirectly, in active markets.
Level 1i) Level 2 ii) Level 3iii) Carrying value As at 31 December 2020 mPLN mPLN mPLN mPLN Financial assets carried at fair value through profit or loss Currency forward contracts 1.1 - 1.1 - Shares in companies listed on regulated markets 1.4 1.4 - - Total 2.5 1.4 1.1 - Financial assets carried at fair value through other comprehensive income Shares in companies not listed on regulated markets 8.8 - - 8.8 Total 8.8 - - 8.8 i. fair value determined on the basis of quoted prices offered in active markets for identical assets; ii. fair value determined using calculation models based on inputs that are observable, either directly or indirectly, in active markets; iii. fair value determined using calculation models based on inputs that are not observable, neither directly or indirectly, in active markets.
ii. Non-financial assets
The balance of other assets as at 30 June 2021 and as at 31 December 2020 comprised:
30 June 2021 31 December 2020 mPLN mPLN Trade advance payments 1.8 1.2
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 32
5.8. Prepayments and accrued income As at 30 June 2021 and 31 December 2020, prepayments and accrued income included the following items:
30 June 2021 31 Dec. 2020 Long-term Short-term Long-term Short-term mPLN mPLN mPLN mPLN Prepaid services, of which: 15.2 27.3 21.3 30.3 maintenance services and license fees 14.0 19.9 20.0 24.9 rents - 0.1 - 0.1 insurances 0.1 0.9 0.1 0.6 other services 1.1 6.4 1.2 4.7 Costs of contracts with customers 19.8 8.1 19.4 8.5 Other prepayments and accrued income 0.2 2.6 0.2 1.1 Total 35.2 38.0 40.9 39.9 As at 30 June 2021 and at the end of the comparable period, prepayments and accrued income included primarily the costs of performing projects from which revenues will be recognized in future periods, and which qualify for capitalization in accordance with IFRS 15, as well as the costs of maintenance services and license fees that will be successively expensed in future periods.
5.9. Receivables and contract assets The table below presents receivables and assets from contracts with customers as at 30 June 2021 as well as at 31 December 2020.
30 June 2021 31 Dec. 2020
Long-term Short-term Long-term Short-term
mPLN mPLN mPLN mPLN Trade receivables 11.9 177.0 12.6 235.7 From related parties, of which: 11.0 32.1 11.4 77.7 Invoiced receivables 11.0 19.6 11.4 51.7 from subsidiaries - 0.4 - 0.6 from associates - 0.6 - 1.5 from other related parties 11.0 18.6 11.4 49.6 Uninvoiced receivables - 12.5 - 26.0 from subsidiaries - 2.9 - 4.7 from associates - 0.3 - 0.3 from other related parties - 9.3 - 21.0 From other entities, of which: 0.9 144.9 1.2 158.0 Invoiced receivables 0.2 75.2 0.3 101.7 Uninvoiced receivables 0.7 69.7 0.9 56.3 Allowances for expected credit losses (-) - (13.3) - (15.1) Total trade receivables 11.9 163.7 12.6 220.6
As at 30 June 2021, there were no substantial changes in the ageing structure of receivables, or in the percentage of receivables covered by allowances for expected credit losses in individual age ranges in comparison with such data disclosed in the financial statements of Asseco Poland for the year ended 31 December 2020.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 33
The table below presents assets from contracts with customers as at 30 June 2021 as well as at 31 December 2020:
30 June 2021 31 Dec. 2020
Long-term Short-term Long-term Short-term
mPLN mPLN mPLN mPLN Contract assets from related parties, of which: - 26.8 - 8.5 Contract assets - 26.8 - 8.5 from subsidiaries - 0.6 - 0.6 from associates - 0.2 - 0.1 from other related parties - 26.0 - 7.8 from other entities - 110.7 - 103.5 Contract assets - 110.7 - 103.5 Total contract assets - 137.5 - 112.0
Assets from contracts with customers result from the excess of the percentage of completion of comprehensive IT projects over invoices issued.
Related party transactions have been presented in explanatory note 5.19 to these interim condensed financial statements. The Company has adopted a relevant policy that allows for selling products and services to verified customers only. In the Company’s Management opinion, as at 30 June 2021 there is no need to recognize an additional allowance for expected credit losses although, in accordance with the recommendations of supervisory authorities, the Company has inserted into its provisioning matrix an additional parameter that reflects generally higher business risk. The parameter taking into account the risk of repayment is calculated as the difference of the average monthly receivables collection ratios in the periods of 3 months from the end of March 2020 till March 2021 and in the periods of 3 months from the end of March 2019 till March 2020. However, due to the situation caused by the COVID-19 pandemic in Poland and worldwide, the Company has implemented a process of even stricter monitoring of its receivables and has intensified its standard debt collection procedures. The table below presents other receivables as at 30 June 2021 and as at 31 December 2020:
30 June 2021 31 Dec. 2020
Other receivables Long-term Short-term Long-term Short-term
mPLN mPLN mPLN mPLN Receivables from dividends - 7.3 - 9.6 Receivables from disposal of property, plant 0.6 0.1 0.7 5.3 and equipment Receivables from disposal of financial 36.5 8.0 41.5 7.5 instruments or capital investments Receivables from security deposits paid-in 2.3 1.8 2.1 5.9 Receivables from grants - 0.7 - 3.6 Receivables in court litigation - 0.4 - 0.6 Other receivables - 1.0 0.1 2.1 Allowances for expected credit losses - (0.7) - (10.5) on other receivables (-) Total other receivables 39.4 18.6 44.4 24.1
The decrease in allowances for expected credit losses resulted from the fact of collecting past-due dividends from R-Style Softlab in the amount of PLN 9.6 million, as described earlier.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 34
5.10. Cash and cash equivalents The table below presents cash and cash equivalents as at 30 June 2021 and 31 December 2020:
30 June 2021 31 Dec. 2020
mPLN mPLN Cash at bank accounts 86.9 138.3 Cash at split payment accounts 2.0 6.1 Short-term bank deposits 46.0 20.4 Total cash and cash equivalents as disclosed in the statement of 134.9 164.8 financial position and in the cash flow statement Interest earned on cash at bank is variable and depends on interest rates offered on bank deposits. Short-term bank deposits are made for varying periods of between one day and three months and earn interest at their respective fixed interest rates. 5.11. Impairment losses on inventories In the period of 6 months ended 30 June 2021 and in the comparable period, we did not recognize any significant impairment losses on inventories.
5.12. Lease liabilities As at 30 June 2021, assets used under lease contracts where the Company is a lessee, included: ▪ office buildings, ▪ cars, ▪ IT hardware.
The table below presents the amounts of lease liabilities as at 30 June 2021 as well as at 31 December 2020.
30 June 2021 31 Dec. 2020 Lease liabilities Long-term Short-term Long-term Short-term mPLN mPLN mPLN mPLN Leases of real estate 59.6 8.4 63.2 8.0 Leases of IT hardware - 0.4 - 0.8 Total 59.6 8.8 63.2 8.8
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 35
5.13. Other financial liabilities The table below presents other financial liabilities as at 30 June 2021 and as at 31 December 2020:
30 June 2021 31 December 2020
Long-term Short-term Long-term Short-term
mPLN mPLN mPLN mPLN Financial liabilities, of which:
Liabilities from the acquisition of shares - 2.3 0.3 2.2
Liabilities from forward contracts 3.4 - 3.5 0.1
3.4 2.3 3.8 2.3
As at 30 June 2021 as well as at 31 December 2020, the Company had the following financial liabilities measured at fair value:
Level 1i) Level 2 ii) Level 3iii) Carrying value
As at 30 June 2021
mPLN mPLN mPLN mPLN Financial liabilities Currency forward contracts 3.4 - 3.4 - Liabilities carried at amortized cost 2.3 - - 2.3 Total 5.7 - 3.4 2.3 As at 31 December 2020 Financial liabilities Currency forward contracts 3.6 - 3.6 - Liabilities carried at amortized cost 2.5 - - 2.5 Total 6.1 - 3.6 2.5
i. fair value determined on the basis of quoted prices offered in active markets for identical assets; ii. fair value determined using calculation models based on inputs that are observable, either directly or indirectly, in active markets; iii. fair value determined using calculation models based on inputs that are not observable, neither directly or indirectly, in active markets. The fair values of financial liabilities held by the Company both as at 30 June 2021 and 31 December 2020 did not significantly differ from their carrying values.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 36
5.14. Bank loans and debt securities issued Both as at 30 June 2021 and 31 December 2020, the Company had no debt under any bank loans, but it had available credit facilities which are presented in the table below:
30 June 2021 31 December 2020 Maximum debt Effective interest Repayment limit available rate % date Long- Short- Long- Short- term term term term Bank overdraft facilities - - - - 1M WIBOR + Bank overdraft facility 150.0 2021-11-30 - - - - margin 1M WIBOR + Bank overdraft facility 50.0 2022-06-30 - - - - margin 1M WIBOR + Bank overdraft facility 70.0 2022-10-31 - - - - margin Bank overdraft facility 200.0 fixed interest rate 2022-07-31 - - - - 1M WIBOR + Bank overdraft facility 70.0 2022-06-25 - - - - margin 540.0 TOTAL - - - -
As at 30 June 2021, total funds available to Asseco Poland S.A. under bank account overdraft facilities amounted to PLN 540.0 million, of which PLN 27.0 million were used as collateral for bank guarantees. As at 31 December 2020, total funds available to Asseco Poland S.A. under bank account overdraft facilities amounted to PLN 540.0 million, of which PLN 21.4 million were used as collateral for bank guarantees.
5.15. Trade payables, state budget liabilities and other liabilities The table below presents the structure of the Company’s trade payables outstanding as at 30 June 2021 and 31 December 2020:
30 June 2021 31 Dec. 2020 Long-term Short-term Long-term Short-term
mPLN mPLN mPLN mPLN
To related parties, of which: - 7.5 - 12.1 Invoiced payables - 3.3 - 4.6 to subsidiaries - 3.1 - 4.4 to other related parties - 0.2 - 0.2 Uninvoiced payables - 4.2 - 7.5 to subsidiaries - 2.9 - 7.4 to other related parties - 1.3 - 0.1 To other entities, of which: - 46.1 - 72.0 Invoiced payables - 28.2 - 52.0 Uninvoiced payables - 17.9 - 20.0 Total trade payables - 53.6 - 84.1
Trade payables are non-interest bearing. Related party transactions have been presented in explanatory note 5.19 to these interim condensed financial statements.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 37
As at 30 June 2021 and 31 December 2020, the Company had the following liabilities to the state budget and other liabilities:
30 June 2021 31 Dec. 2020
Long-term Short-term Long-term Short-term
mPLN mPLN mPLN mPLN Corporate income tax payable - - - - Other liabilities to the state and
local budgets Value added tax (VAT) - 0.3 - 11.2 Personal income tax (PIT) - 2.2 - 6.2 Social security contributions - 8.9 - 9.1 Other - 1.2 - 2.1 Total liabilities to the state and - 12.6 - 28.6 local budgets
Other liabilities Liabilities from purchases of tangible - 2.4 - 5.9 assets and intangible assets Other liabilities 0.4 0.3 0.3 0.8 Total other liabilities 0.4 2.7 0.3 6.7
5.16. Contract liabilities The table below presents the structure of the Company’s liabilities from contracts with customers as at 30 June 2021 and 31 December 2020:
30 June 2021 31 Dec. 2020
Long-term Short-term Long-term Short-term
mPLN mPLN mPLN mPLN Contract liabilities To related parties, of which: 0.1 1.8 0.1 1.3 Deferred income arising from 0.1 1.4 0.1 0.9 contracts with customers Liabilities arising from valuation of IT - 0.4 - 0.4 contracts due to subsidiaries To other entities, of which: 36.1 69.5 46.8 97.6 Deferred income arising from 36.1 47.0 46.8 56.8 contracts with customers Liabilities arising from valuation of - 22.5 - 40.8 IT contracts Total contract liabilities 36.2 71.3 46.9 98.9
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 38
5.17. Provisions Changes in the amount of provisions during the period of 6 months ended 30 June 2021 and in the comparable period are presented in the table below:
Post- Provision Provision Other employment for warranty Total for onerous provisions benefits repairs contracts
mPLN mPLN mPLN mPLN mPLN As at 1 January 2021 3.9 0.2 5.3 0.1 9.5 Provisions created (+) 0.3 - 1.0 - 1.3 Unwinding of discount (+) - - 0.2 - 0.2 Provisions utilized / reversed (-) - (0.1) (4.6) - (4.7) As at 30 June 2021, of which: 4.2 0.1 1.9 0.1 6.3 Short-term 0.5 0.1 1.6 0.1 2.3 Long-term 3.7 - 0.3 - 4.0
As at 1 January 2020 2.9 0.2 9.1 0.1 12.3 Provisions created (+) 0.7 0.1 3.1 - 3.9 Unwinding of discount (+) - - 0.2 - 0.2 Provisions utilized / reversed (-) - (0.1) (4.3) - (4.4) As at 30 June 2020, of which: 3.6 0.2 8.1 0.1 12.0 Short-term 0.4 0.2 7.7 0.1 8.4 Long-term 3.2 - 0.4 - 3.6
The provision for post-employment benefits relates entirely to retirement benefits which are to be potentially paid to the Company’s employees when they go into retirement. In compliance with the Labour Code provisions, Asseco Poland S.A. makes a severance payment in the amount of one-month average salary to each retiring employee. 5.18. Accruals and deferred income
30 June 2021 31 Dec. 2020 Long-term Short-term Long-term Short-term mPLN mPLN mPLN mPLN Accruals, of which: Accrual for unused holiday leaves - 26.5 - 18.2 Accrual for employee and management bonuses - 23.8 - 21.5 - 50.3 - 39.7 Deferred income, of which: Grants related to assets 50.3 2.3 51.8 1.5 50.3 2.3 51.8 1.5
The total amount of accruals comprises: accruals for unused holiday leaves as well as accruals for remunerations of the current period to be paid out in future periods which resulted from the bonus incentive schemes applied by the Company. The balance of deferred income comprises mainly grants related to assets. Grants related to assets represent subsidies received by the Company in connection with its development projects or projects related to the creation of IT competence centers.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 39
5.19. Related party transactions Revenues from related parties include sales of goods and IT services related to ongoing IT projects, as well as income from letting of own office space and from other activities. Transactions with management board members of other companies of the Group are associated with proceeds from the sale of shares. Purchases from related parties include purchases of goods and services related to ongoing IT projects, sponsorship activities, as well as purchases of consulting and telecommunication services.
Revenues Costs 6 months ended 6 months ended 6 months ended 6 months ended
30 June 2021 30 June 2020 30 June 2021 30 June 2021 mPLN mPLN mPLN mPLN Transactions with subsidiaries 68.0 39.2 20.2 32.8 Transactions with entities related through the Key Management Personnel and Members 1.1 0.8 0.1 0.1 of the Supervisory Board Transactions with Members of the Management Board and Commercial Proxies of Asseco Poland - - 0.4 0.3 S.A. Transactions with Members of the Supervisory - - 0.8 0.6 Board Total related party transactions 69.1 40.0 21.5 33.8
Trade receivables, other receivables Trade payables and other liabilities and contract assets as at as at 30 June 2021 31 Dec. 2020 30 June 2021 31 Dec. 2020 mPLN mPLN mPLN mPLN Transactions with subsidiaries 76.6 95.9 8.9 12.7 Transactions with associates 1.0 11.5 0.4 0.4 Transactions with the Group’s Key Management 41.5 47.3 - - Personnel Transactions with entities related through the Key Management Personnel and Members 0.4 0.4 0.2 0.5 of the Supervisory Board Transactions with Members of the Management Board and Supervisory Board and Commercial - - 0.2 0.2 Proxies of Asseco Poland S.A. Total related party transactions 119.5 155.1 9.7 13.8
The above tables, in the line ‘Transactions with other capital-related entities’, disclose the outstanding balances of receivables and payables between the Company and entities belonging to Polsat Plus Group which holds 22.95% of equity interest and voting rights at the Company’s General Meeting of Shareholders. As at 30 June 2021, total receivables from related parties comprised trade receivables and contract assets amounting to PLN 69.9 million, as well as other receivables amounting to PLN 49.6 million. As at 31 December 2020, total receivables from related parties comprised trade receivables and contract assets amounting to PLN 97.6 million, as well as other receivables amounting to PLN 57.5 million. As at 30 June 2021, total liabilities to related parties comprised trade payables and contract liabilities amounting to PLN 9.4 million, as well as other liabilities amounting to PLN 0.3 million. As at 31 December 2020, total liabilities to related parties comprised trade payables amounting to PLN 13.5 million, as well as other liabilities amounting to PLN 0.3 million.
30 June 2021 31 December 2020 Loans granted to related parties mPLN mPLN Podkarpacki Fundusz Nieruchomości Sp. z o.o. 12.6 12.6 Total 12.6 12.6
All transactions with related parties are carried out on an arm’s length basis.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 40
6. Explanatory notes to the statement of cash flows 6.1. Cash flows – operating activities The table below presents items included in the line ‘Changes in working capital’:
6 months ended 6 months ended 30 June 2021 30 June 2020
mPLN mPLN Change in inventories (1.4) 7.1 Change in receivables and contract assets 38.1 (18.5) Change in other non-financial assets (0.5) (0.7) Change in payables and contract liabilities (70.5) (24.3) Change in prepayments and accruals, including capitalized costs 5.4 13.5 of contracts with customers Change in provisions (3.2) (0.4) Total (32.1) (23.3)
6.2. Cash flows – investing activities In the period of 6 months ended 30 June 2021, the amount of cash flows from investing activities was affected primarily by the following proceeds and expenditures:
6 months ended 6 months ended
30 June 2021 30 June 2020 mPLN mPLN Disposal of property, plant and equipment 4.0 1.0 Disposal of intangible assets 5.4 - Acquisition of property, plant and equipment (11.4) (23.2) Acquisition of intangible assets (3.1) (1.7) Expenditures for development projects (9.4) (9.8)
The table below presents expenditures for the acquisition of shares in related entities as well as proceeds from the sale of shares in related entities during the period of 6 months ended 30 June 2021:
Expenditures for the Proceeds from the
acquisition of shares sale of shares Name of entity
mPLN mPLN Asseco Innovation Fund Sp. z o.o. (0.5) - ComCERT S.A. (0.3) - Asseco South Eastern Europe S.A. - 1.0 Asseco Central Europe, a.s. - 3.6 Formula Systems (1985), Ltd - 0.3 Gdyński Klub Koszykówki Arka S.A. (7.5)* - Asseco Cloud Sp. z o.o. (0.1) - Krajowy Operator Chmury Medycznej Sp. z o.o. (1.0) -
Total (9.4) 4.9 * Detailed information on this transaction is provided in explanatory notes 4.3 and 5.5 to these interim financial statements.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 41
The following table presents detailed cash flows relating to loans during the period of 6 months ended 30 June 2021:
Loans collected Loans granted Name of entity mPLN mPLN Gdyński Klub Koszykówki Arka S.A. 7.3 - Other entities (mainly loans for employees) 0.7 (0.5) Total 8.0 (0.5)
6.3. Cash flows – financing activities Dividends paid out represent the divided amounting to PLN 258.1 million that was distributed by the Company for the year 2020, which has been described in detail in explanatory note 4.6.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 42
7. Other explanatory notes 7.1. Off-balance-sheet liabilities The table below presents our contingent liabilities as at 30 June 2021 and 31 December 2020:
30 June 2021 31 Dec. 2020 Contingent liabilities mPLN mPLN Liabilities from guarantees of due performance of contracts Liabilities falling due within 3 months 19.6 25.4 Liabilities falling due within 3 to 12 months 13.0 22.5 Liabilities falling due within 1 to 5 years 82.6 87.1 Liabilities falling due after 5 years 3.7 3.2 Total 118.9 138.2
In the Management’s opinion, the probability of having to satisfy our liabilities from guarantees of due performance of contracts as presented in the table above is negligible; however, due to their amount, it was decided to make an appropriate disclosure in these interim condensed financial statements. None of the above-described guarantee obligations meet the definition of a financial guarantee under IFRS 9, and therefore they are not recognized as liabilities in the statement of financial position of the Company as at 30 June 2021 nor as at 31 December 2020. Disputes in litigation as at the end of the reporting period As at 30 June 2021, the Company was party to two court proceedings initiated by the same customer, in which the total value of the subject in dispute amounted to approx. PLN 13.3 million. The Company’s Management assessed the validity of claims brought in court and considered them to be groundless, and consequently assessed the risk of an outflow of economic benefits from the Company to be so small that there was no need to create any provision. In the said disputes, the plaintiff makes unjustified demands upon the Company to transfer proprietary software copyrights and extend the licenses granted. As at the reporting date, there was also another court dispute pending in which the plaintiff filed a claim for payment of PLN 17.1 million (the Company was sued jointly and severally with its subsidiary Asseco Data Systems S.A.). The Company’s Management assessed the validity of claims presented in the lawsuit and considered them to be completely groundless. Thus the Management determined there was no need to create any provision for such claims as at 30 June 2021. In addition, after the end of the reporting period, Asseco Poland S.A. along with Asseco Data Systems S.A. filed a counter-claim in this case for the payment of compensation for damages incurred as a result of the plaintiff’s unjustified withdrawal from the contract. In addition, in February 2021, the Company was served with a lawsuit from one of its customers for the payment of contractual penalties for exceeding the time limits specified in the maintenance contract. The amount in dispute is PLN 3.0 million. The Company’s Management Board has considered the customer’s claim to be unfounded. In the opinion of Company’s Management Board, the provisions for pending litigation that are recognized in this report have been created in a sufficient amount to cover possible risks arising from existing disputes.
7.2. Seasonal and cyclical business The Company’s operating revenues are subject to some seasonality in individual quarters of the year. The fourth quarter revenues tend to be somewhat higher than in the remaining periods, as bulk of such turnover is generated from the sale of IT services for large enterprises and public administration. Such entities often decide to make higher purchases of hardware and licenses in the last months of a year.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 43
7.3. Employment
Number of employees as at: 30 June 2021 31 Dec. 2020 Management Board 10 10 Production departments 1,894 1,912 Sales departments 90 85 Administration departments 334 340 Total 2,328 2,347
7.4. Significant events after the reporting period ▪ Consent to cooperate with Operator Chmury Krajowej (National Cloud Operator) On 15 July 2021, the Company obtained consent of the Office of Competition and Consumer Protection to establish a jointly controlled company together with the National Cloud Operator. The consent of the Polish antimonopoly authority enables signing the intended Investment Agreement with the National Cloud Operator that is going to acquire a 50% stake in the newly created company. Following that transaction, the National Cloud Operator company will no longer be treated as a subsidiary entity as in these financial statements, but as a joint venture. ▪ Signing a framework agreement with Polkomtel Sp. z o.o. On 29 July 2021, Asseco Poland S.A. signed with Polkomtel Sp. z o.o. a framework agreement specifying the scope and principles of cooperation between the two partners as part of a three-stage project involving the transformation of sales automation systems, as well as retail customer service and billing systems (B2C) of Polsat Plus Group. It should be also noted that cooperation under this project was initiated already in 2020, based on a bridging agreement concluded in March 2020. Subsequently, individual assignments were carried out on the basis of current orders under the terms of contracts concluded in previous years until the new general terms of cooperation were agreed upon in negotiations between the parties. As a result, after the end of the reporting period, the parties signed a framework agreement determining the general scope and principles of extending cooperation between the partners within the project. The framework agreement also regulated the work performed on the basis of the above-mentioned orders and set forth the detailed terms and conditions of cooperation in the first stage of the project. However, the said agreement stipulates that orders placed in the second and third stage of cooperation will be subject to separate negotiations between the parties (including their pricing) and will each time require corporate approvals in order to be carried out. The scope of work covered by the first stage is not significantly different from other activities performed by the Company as part of its business.
7.5. Significant events related to prior years Until the date of preparing these interim condensed financial statements for the period of 6 months ended 30 June 2021, we have not observed any significant events related to prior years, which have not but should have been included in these financial statements.
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 44
Approval for publication by the Management Board
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 45
These condensed financial statements of Asseco Poland S.A. for the period of 6 months ended 30 June 2021 have been approved for publication by the Management Board of Asseco Poland S.A. on 25 August 2021.
Management Board:
Adam Góral President of the Management Board
Andrzej Dopierała Vice President of the Management Board
Krzysztof Groyecki 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
Karolina Rzońca-Bajorek Vice President of the Management Board
Sławomir Szmytkowski Vice President of the Management Board
Artur Wiza Vice President of the Management Board
Gabriela Żukowicz Vice President of the Management Board
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 46
Person responsible for maintaining the accounting books:
Chief Accountant Renata Bojdo
Asseco Poland S.A. Interim Condensed Financial Statements for the period of 6 months ended 30 June 2021 (in millions of PLN) 47
Solutions for demanding business.
Asseco Poland S.A. 14 Olchowa St., 35-322 Rzeszów, Poland Phone: +48 17 888 55 55 Fax: +48 17 888 55 50 Email: [email protected] inwestor.asseco.pl
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