IAlbatros : Condensed consolidated report for 1 half of 2016

Condensed consolidated semi-annual report of iAlbatros Group S.A. (formely SMT S.A.) for the first half of 2016 r.

Table of Contents

LETTER FROM THE PRESIDENT OF THE MANAGEMENT BOARD 3

1. CONSOLIDATED FINANCIAL HIGHLIGHTS OF iALBATROS GROUP S.A 5

   1. Consolidated financial highlights of iAlbatros Group S.A. for the first half of 2016..........................…5

2. SEPARATE FINANCIAL HIGHLIGHTS OF iALBATROS GROUP S.A. FOR THE I HALF OF 2016 9

   Additional notes 13

3. ISSUER MANAGEMENT REPORT ON OPERATIONS AFTER I HALF OF 2016 15

4. GENERAL INFORMATION ON THE iALBATROS GROUP S.A. 16

5. Description of the Issuer's Capital Group organisation with the indication of entities subject to consolidation 16

6. Companies of the iAlbatros Group S.A. Group consolidated as at 30 June 2016 18

7. Consolidated companies forming the iAlbatros Group S.A. Group - companies owned by the Issuer as at 30 June 2016 18

8. General information on the Issuer and iAlbatros Group S.A. Group Companies 18

9. Shareholders holding, directly or indirectly, 5% or more of the total number of votes at the General Meeting of the Issuer as at the date of the report, including information on the number of shares held by those shareholders, their interests in the Company's share capital, the resulting number of votes at the General Meeting and their share in the total vote at the General Meeting, and any changes in the ownership structure of significant holdings of Issuer's shares after the publication of the previous quarterly report……………………………………………………………………………………………………….22

11. Number of Issuer's shares or rights to Issuer's shares held by members of the Issuer's Management and Supervisory Boards as at the date of release of this report, separately for each person, including changes in their holdings which occurred after the date of the previous report. 23

12. Description of material achievements or failures of the Issuer in the first quarter of 2016 and indication of relevant major events 24

1. Significiant and material commercial agreements 24

2. Other significant events in the growth of the Capital Group 24

3. Events, which occurred after the date of the quarterly financial statements and which are not included in this report, and which may significantly influence future financial results of the Issuer . .29

13. MANAGEMENT BOARD STATEMENTS ON ADOPTED ACCOUNTING PRINCIPLES 31

14. STATEMENT OF THE MANAGEMENT BOARD CONCERNING THE IMPARTIALITY OF THE STATUTORY AUDITOR 32

15. LETTER FROM THE PRESIDENT OF THE MANAGEMENT BOARD Dear Shareholders,

    Watching the operations of our Group on a daily basis I have noticed that it integrates all the factors which are crucial for attaining the ambitious goals pursued by our leading business project, iAlbatros. I strongly believe that owing to those factors our project will be an unquestionable success. They include, in particular, a hand-picked team of managers, employees who are focused on our business goals, a clear roadmap for our future development and globally innovative IT solutions that define the product offered by the Group. Equipped with such resources, we pursue the Company's vision and goals in our daily work, striving to become even better at delivering solutions that are already gaining recognition in the business travel market. This is reflected by our growing base of Clients representing the business and public sectors.

    The measures we have taken when reorganising the Group's structure and selecting the right team are yielding satisfactory results: we are expanding our presence in Poland and, more importantly, abroad, in West European countries. Today, we can proudly say that we are a significant player on the business travel market in France. This year, we have consolidated even further our position in that country by singing new big contracts,

    e.g. with the leading French travel agency Havas Voyages. The agreement concerns the existing range of hotel services enriched with completely new functionalities - the option to book airline and train tickets, hire a car or order a taxi. All this integrated within our new application, Maya, which is referred to as a self-booking tool in the industry parlance. We are convinced that this product has a very strong selling potential.

    When we published our report for the first quarter of 2016, the Group's sales revenue in the business travel segment amounted to PLN 41.5 million. In this report, we continue to deliver good news. The segment's revenue for the first half-year amounted to PLN 110.0 million and was practically at the same level as the result for the entire 2015 (which totalled PLN 110.7 million). These figures prove that in financial terms, the Group is evolving in the right direction, in line with the assumptions made by the Management Board in January 2016 when it published its financial forecasts.

    The fleet management segment, in which the Group is represented by the company Satis GPS, has also seen the expected improvement in figures as a consequence of systematic expansion of the market and initiating cooperation with new partners. Satis GPS closed the half-year with revenue of PLN 3.8 million.

    Owing to the satisfying financial results on current operations coupled with last year's sale of two subsidiaries, SMT Software Services S.A. and Codemedia S.A., we have been able to share our profits with our shareholders.

    In August, we announced an offer to subscribe for shares in our Company, allocating PLN 40 million for that purpose.

    Having analysed the data contained in the report and based on current information received daily from my partners and Clients, as well as friends who are well-wishers of the Company, I know that we are heading in the right direction and that our market activity has drawn a positive response from our stakeholders and, most importantly, from our Clients. I would like to express my thanks for these achievements to all those who have worked for our success.

    I strongly encourage you to read this report. We would like to present to you the concepts behind the key business areas within our Group, the solutions on the basis of which we are implementing our long-term goals, the global players that have trusted our products, our prospects for further growth in the short- and long-term perspective as well as the financial results we have been able to generate.

    We thank you for your trust.

    Moncef Khanfir

    The President of the Management Board

    Warsaw, 16th September 2016