This document is a free translation of the Polish
original. Terminology current
in Anglo-Saxon countries has been used where practicable for the purposes
of this translation in order to aid understanding. The binding Polish original
should be referred to in matters of interpretation.
Independent Auditor's Report
To the General Shareholders’ Meeting and Supervisory Board of Bank Polska Kasa Opieki S.A.
Report on the Audit of the Annual Consolidated Financial Statements
Opinion
We have audited the accompanying annual consolidated financial statements of Bank Polska Kasa Opieki S.A. Group (the “Group”), whose parent entity is Bank Polska Kasa Opieki S.A. (the „Parent Entity”), which comprise:
— the consolidated statement of financial position as at 31 December 2020;
and, for the period from 1 January to 31 December 2020:
— the consolidated statement of profit or loss;
— the consolidated statement of comprehensive income;
— the consolidated statement of changes in equity;
— the consolidated statement of cash flows;
and
— notes comprising a summary of significant accounting policies and other explanatory information;
(the “consolidated financial statements”).
In our opinion, the accompanying consolidated financial statements of the Group:
— give a true and fair view of the consolidated financial position of the Group as at 31 December 2020 and of its consolidated financial performance and its consolidated cash flows for the financial year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union and the adopted accounting policy;
— comply, in all material respects, with regard to form and content, with applicable laws and the provisions of the Parent Entity's articles of association.
Our audit opinion on the consolidated financial statements is consistent with our report to the Audit Committee dated 25 February 2021.
Basis for Opinion
We conducted our audit in accordance with:
— International Standards on Auditing as adopted by the National Council of Statutory Auditors as National Standards on Auditing (the “NSA”) by the resolution no. 3430/52a/2019 dated 21 March 2019 and the resolution no. 1107/15a/2020 dated 8 September 2020; and
— the act on statutory auditors, audit firms and public oversight dated 11 May 2017 (the “Act on statutory auditors”); and
— regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC (the “EU Regulation”); and
— other applicable laws.
Our responsibilities under those regulations are further described in the Auditor’s Responsibility for the audit of the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence and Ethics
We are independent of the Group in accordance with International Ethics Standards Board for Accountants International Code of Ethics for Professional Accountants (including International Independence Standards) (“IESBA Code”) as adopted by the resolution of the National Council of Statutory Auditors, together with the ethical requirements that are relevant to our audit of the consolidated financial statements in Poland and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. During our audit the key statutory auditor and the audit firm remained independent of the Group in accordance with requirements of the Act on statutory auditors and the EU Regulation.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. They are the most significant assessed risks of material misstatements, including those due to fraud, described below and we performed appropriate audit procedures to address these matters. Key audit matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon we have summarised our response to those risks. We do not provide a separate opinion on these matters. We have determined the following key audit matters:
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Allowances for expected credit losses for loans and advances to customers and provisions for undrawn credit facilities and guarantees issued |
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The book value of loans and advances to customers (excluding measured at fair value through profit and loss) amounted to PLN 142.301 million as at 31 December 2020 and PLN 140.671 million as at 31 December 2019. Allowances for expected credit losses as at 31 December 2020 amounted to PLN 7.264 million in comparison to PLN 6.490 million as at 31 December 2019. Provisions for undrawn credit facilities and guarantees issued amounted to PLN 383 million as at 31 December 2020 and PLN 291 million as at 31 December 2019. Net result on allowances for expected credit losses in 2020 amounted to PLN -1.578 million, and in 2019 PLN -696 million. The items listed above were presented in the consolidated financial statements in Note 15 “Net allowances for expected credit losses”, in Note 26 “Loans and advances to customers (in this receivables from financial leases)” and in Note 6.2 “Credit risk”. |
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Key audit matter |
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Our response |
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Loans and advances to customers are measured at amortized cost or in fair value through other comprehensive income, subject to allowances for expected credit losses. The procedures to estimate allowances comprise two major phases – identification of significant increase in credit risk or impairment triggers and measurement of expected credit losses.
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As part of our audit procedures, we critically assessed the accounting policy for the recognition of impairment losses on loans and advances to customers in terms of compliance with the requirements of applicable financial reporting standards, and we also critically analyzed the control environment with particular emphasis on the automated controls in the IT systems. Audit procedures conducted with the support of our internal financial risk management and IT specialists included i.a.:
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The impairment triggers and triggers indicating significant increase in credit risk are identified mainly on the basis of payment delinquencies, economic and financial standing of the debtor and current probability of default level as compared to the date of initial recognition of a given exposure, while allowances for expected credit losses are estimated individually for specific loans and advances to customers and collectively for homogenous loan portfolios using statistical methods on the basis of risk parameters. Significant assumptions for the portfolio method are risk parameters such as probability of default (PD), loss given default (LGD), exposure at default (EAD) or criteria/ allocation thresholds to risk categories (stages), which are determined for homogenous groups of loan exposures based on historical data taking into account forward looking information on expected macroeconomic conditions. Allowances represent estimate of credit losses expected to be incurred on loans and advances to customers at the reporting date over a 12-month horizon or the lifetime of the exposure. As required by the applicable accounting standard, the measurement of expected credit losses includes forecasts of future economic conditions. Making assumptions about expected macroeconomic scenarios and the likelihood of their occurrence requires Management to use a significant dose of judgment. The main risk area comprises the failure to identify existing impairment triggers and significant increase in credit risk, the application of inappropriate data to calculate the parameters of statistical model, which include the use of inappropriate macroeconomic assumptions, which may not adequately reflect the expected credit losses existing as at a given reporting date. For loans that are assessed on an individual basis there is a risk of applying inappropriate assumptions regarding recovery scenarios and valuation of collateral.
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· critical assessment of the design and implementation of relevant internal controls (including general IT system controls) applied in the process of the credit exposures classification into stages and estimating allowances for expected credit losses (including monitoring of collateral values) as well as testing the effectiveness of these controls; · critical analysis of the methodology for estimating risk parameters and the allowances for expected credit losses on both individual and portfolio basis in terms of compliance with the requirements of the relevant accounting standard and best market practice; · analysis of the structure and dynamics of the loan portfolio including quality ratios and provision coverage in order to identify groups of loans with underestimated allowances for expected credit losses; · taking into account the results of historical assessment of the model validity performed by the Group, a critical assessment of significant assumptions and input data used in the estimation of expected credit losses models for individual key credit risk parameters, such as in particular transfer logic between stages, probability of default (PD), exposure at default (EAD) or loss given default (LGD); · critical assessment of temporary qualitative changes to model aiming to include the impact of the COVID-19 pandemic on expected credit losses, including: loss parameters in the context of assumed macroeconomic scenarios and the appropriateness of the treatment of granted borrower consents from the perspective of allocation to risk categories (stages); |
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Moreover, there is a risk of errors and risk of fraud occurring during the allowances calculation process. A relatively small change in significant assumptions and model parameters such as data and methods, could have a significant impact on the Group's expected credit loss estimate. Due to the COVID-19 pandemic and its impact on the macroeconomic environment, the uncertainty in the estimation of expected credit losses increased significantly compared to previous years. The increased uncertainty caused by the sudden negative change in the macroeconomic situation required the Parent Entity's Management Board to apply temporary qualitative changes to the existing credit risk models, which were developed based on the analysis of observed loss parameters in the past supplemented with management overlays. These changes were necessary as the models used in the Group, due to their design and the scope of data they were built upon, could not fully reflect the impact of a sudden change in the economic environment on expected credit losses. Determining such temporary changes to the model requires the Parent Entity’s Management Board to apply a significant level of judgment. We considered this area to be a key audit matter because estimating the allowances for expected credit losses involves significant inherent risks of error and fraud as well as uncertainty and requires Parent Entity’s Management Board to use significant judgment and, considering the size of the loan portfolio, has a material impact on the consolidated financial statements.
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· independent recalculation of selected risk parameters and allowances for expected credit losses for a selected sample of exposures, including selected methodology components designed to reflect the impact of the COVID-19 pandemic; · assessment of the adequacy of the allowance for losses expected over a 12-month horizon by referring to credit losses realized on individual homogeneous portfolios in the past; · analysis of the accuracy of allocation of loans and advances to customers to stages, taking into account qualitative and quantitative criteria; · for loans and advances to customers assessed individually on the basis of a selected sample including the impact of COVID-19 on the financial situation of borrowers – assessment of the appropriateness of identification of significant increase in credit risk and impairment triggers and for impaired assets – critical assessment of relevant assumptions adopted by the Group and independent recalculation of impairment allowances; · an assessment of the completeness and appropriateness of disclosures in the financial statements regarding significant judgments and estimates of expected credit losses, including uncertainty arising from the possible impact of the COVID-19 pandemic, as well as a sensitivity analysis of the level of expected credit losses relative to key assumptions used in the model. |
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Conduct risk, including litigations related to denominated and indexed loans to Swiss franc |
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The book value of loans granted in CHF to individuals amounted to PLN 2.421 million as at 31 December 2020 (PLN 2.841 million as at 31 December 2019). Due to the risk related to the current and potential legal claims with borrowers who have been granted in the past mortgage loans denominated or indexed to CHF, the book value of loan portfolio was reduced by PLN 345,1 million and a provision was recognized for loans repaid by customers that amounted to PLN 90,9 million as at 31 December 2020 (PLN 36,3 million and PLN 22,4 million as at 31 December 2019, accordingly) (Note 6.2 “Credit risk” and note 39 “Provisions”). |
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Key audit matter |
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Our response |
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The entities of the Group operating on regulated market are exposed to the risk of changes in law rulings and events (other than those arising from credit risk) that may result in lower than contractual cash inflows from financial contracts with customers or in an obligation or liability arising from past events, the settlement of which will require outflow of resources embodying economic benefits ("risk amount"). As at 31 December 2019, the above refers in particular to the impact of decision of the Court of Justice of the European Union ("CJEU") of 3 October 2019 (Case C- 260/18). Although this decision did not refer directly to the entities of the Group, they have resulted in consequences we refer to below.
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Our audit procedures included among others: · assessment of the accounting policy and the methodology for estimation of the financial effects of CJEU decision and legal claims; · assessment of the design, implementation and testing the operating effectiveness of internal controls with respect to identification, monitoring and estimate of risk resulting from disputes with clients; · analysis of the correspondence, reports and post-inspection recommendations received by the Group from the regulatory authorities; · assessment of the Group's internal analyses and reports with respect to compliance and conduct risks; · analysis of confirmations of legal claims received from external legal counsels representing the Group and their assessment of the financial impact resulting from these cases; |
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As a result of the decision, the number of court claims against the Group filed by the borrowers who were granted mortgage loans denominated or indexed to CHF ("CHF loans") in the past years increased. The Group assessed that this growth may continue for some time in the future, which in the absence of a single court ruling in this respect may result in lower expected cash inflows from CHF loans than those resulting from the contractual agreements. In order to determine an estimate of new expected cash inflows from the CHF loan portfolio, the Group made scenario analysis regarding future possible events, taking into account both litigation and customer settlements and making significant assumptions regarding the number of lawsuits, the probability of losing the case and the probability of possible verdicts of the courts, as well as estimating the size of possible settlements with customers. Estimates of risk arising from loans denominated or indexed to CHF are subject to a material uncertainty in respect of significant assumptions made. A relatively small change in significant assumptions may have a significant impact on the level of the Group's losses. For the above reasons, we consider making a reliable estimate of the amount of risk and appropriate disclosures in this respect in the Group's consolidated financial statements to be a key audit matter. |
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· analysis of the legal opinion received by the Parent Company's Management Board from an external law firm dated 29 December 2020 which include assessment of the impact of the CJEU decision of 3 October 2019 on the Group in the light of other judgments of common courts made in Poland in similar cases after the CJEU decision date, taking into account the characteristics of the practices and loan agreements templates used by the Group for CHF loans as well as probability assessment of the possible scenarios defined by the Group in terms of future court decisions; · reasonableness assessment of significant assumptions such as probability of adopted scenarios, the number of expected lawsuits from customers, the probability of losing the case, the probability of possible settlements by the courts based on the trends observed to date in the Group and in the market; · assessment of the correctness of assumptions and estimation of financial consequences for the Group in case of application of a settlement scenario with customers; · sensitivity analysis of estimates to changes in significant assumptions and an assessment of whether the level of those assumptions indicates bias of the Parent Company's Management Board; · assessment of the completeness and adequacy of the disclosures required by the International Financial Reporting Standards, which are related to the estimates presented. |
Responsibility of the Management Board and Supervisory Board of the Parent Entity for the Consolidated Financial Statements
The Management Board of the Parent Entity is responsible for the preparation of consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards, as adopted by the European Union, the adopted accounting policy, the applicable laws and the provisions of the Parent Entity's articles of association and for such internal control as the Management Board of the Parent Entity determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Management Board of the
Parent Entity is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management Board of the Parent Entity either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
According to the accounting act dated 29 September 1994 (the “Accounting Act”), the Management Board and members of the Supervisory Board of the Parent Entity are required to ensure that the consolidated financial statements are in compliance with the requirements set forth in the Accounting Act. Members of the Supervisory Board of the Parent Entity are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with NSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
The scope of audit does not include assurance on the future viability of the Group or on the efficiency or effectiveness with which the Management Board of the Parent Entity has conducted or will conduct the affairs of the Group.
As part of an audit in accordance with NSAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
— identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
— obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control;
— evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management Board of the Parent Entity;
— conclude on the appropriateness of the Management Board of the Parent Entity’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report on the audit of the consolidated financial statements to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report on the audit of the consolidated financial statements. However, future events or conditions may cause the Group to cease to continue as a going concern;
— evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
— obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We
— remain solely responsible for our audit opinion.
We communicate with the Audit Committee of the Parent Entity regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We provide the Audit Committee of the Parent Entity with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Audit Committee of the Parent Entity, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current reporting period and are therefore the key audit matters. We describe these matters in our auditors’ report on the audit of the consolidated financial statements unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Information
The other information comprises:
— the letter of the President of the Management Board;
— the letter of the Chairwoman of the Supervisory Board;
— the selected consolidated financial data;
— the statement of the Supervisory Board regarding the Audit Committee; and
— the assessment of the Bank‘s Management Board’s reports on the activities of the Bank and the Group for 2020 and financial statements of the Bank and the Group for 2020;
(together the “Other information”).
Responsibility of the Management Board and Supervisory Board
The Management Board of the Parent Entity is responsible for the Other information in accordance with applicable laws.
The Management Board and members of the Supervisory Board of the Parent Entity are required to ensure that the Report on activities, including separate parts of the Report on activities, is in compliance with the requirements set forth in the Accounting Act.
Auditor’s Responsibility
Our opinion on the consolidated financial statements does not cover the Other information.
In connection with our audit of the consolidated financial statements, our responsibility was to read the Other information and, in doing so, consider whether the Other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement in the Other information, we are required to report that fact.
In accordance with the Act on statutory auditors our responsibility was to report if the Report on activities was prepared in accordance with applicable laws and the information given in the Report on activities is consistent with the consolidated financial statements.
Moreover, in accordance with the requirements of the Act on statutory auditors our responsibility was to report whether the Group included in the statement on corporate governance information required by the applicable laws and regulations, and in relation to specific information indicated in these laws
or regulations, to determine whether it complies with the applicable laws and whether it is consistent with the consolidated financial statements and to inform whether the Group prepared a statement on non-financial information.
Opinion on the Report on Activities
Based on the work undertaken in the course of our audit of the consolidated financial statements, in our opinion, the accompanying Report on activities, in all material respects:
— has been prepared in accordance with applicable laws, and
— is consistent with the consolidated financial statements.
Opinion on the Statement on Corporate Governance
In our opinion, the corporate governance statement, which is a separate part of the Report on activities, includes the information required by paragraph 70 subparagraph 6 point 5 of the Decree of the Ministry of Finance dated 29 March 2018 on current and periodic information provided by issuers of securities and the conditions for recognition as equivalent of information required by the laws of a non-member state (the “decree”).
Furthermore, in our opinion, the information identified in paragraph 70 subparagraph 6 point 5 letter c-f, h and letter i of the decree, included in the corporate governance statement, in all material respects:
— has been prepared in accordance with applicable laws; and
— is consistent with the consolidated financial statements.
Information about the Statement on Non-financial Information
In accordance with the requirements of the Act on statutory auditors, we report that the Group has prepared a statement on non-financial information referred to in art. 55 paragraph 2b of the Accounting Act as a separate part of the Report on activities.
We have not performed any assurance procedures in relation to the statement on non-financial information and, accordingly, we do not express any assurance conclusion thereon.
Statement on Other Information
Furthermore, based on our knowledge about the Group and its environment obtained in the audit of the consolidated financial statements, we have not identified material misstatements in the Report on activities and the Other information.
Report on Other Legal and Regulatory Requirements
Information on Compliance with Prudential Regulations
The Management Board of the Parent Entity is responsible for the Group’s compliance with the applicable prudential regulations defined in separate laws, in particular for the appropriate determination of the capital ratios.
Our responsibility was to inform in our auditor’s report whether the Group complies with the applicable prudential regulations defined in separate laws, in particular whether the Group appropriately determined the capital ratios presented in note 6.6 “Capital management”.
The audit objective was not to express an opinion on the Group’s compliance with the applicable prudential regulations and therefore we do not express such an opinion.
Based on our audit of the consolidated financial statements of the Group, we inform that we have not identified any instances of non-compliance, in the period from 1 January to 31 December 2020, of the Group with the applicable prudential regulations, defined in separate laws, in particular with respect to the determination of the capital ratios as at 31 December 2020, that could have a material impact on the consolidated financial statements.
Opinion on the compliance of the consolidated financial statements prepared in the single electronic reporting format with the requirements of the regulations on technical standards on the specification of a single electronic reporting format
As part of our audit of the consolidated financial statements we were engaged to perform a reasonable assurance engagement in order to express an opinion on whether the consolidated financial statements of the Group as at 31 December 2020 and for the year then ended prepared in the single electronic reporting format included in the reporting package named ‘Skonsolidowane_sprawozdanie_finansowe_Grupy_Banku_Pekao_31.12.2020.zip’ (the ‘consolidated financial statements in the ESEF format’) were tagged in accordance with the requirements specified in the Commission Delegated Regulation (EU) of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specification of a single electronic reporting format and other Commission Delegated Regulations (EU) with respect to updates of the taxonomy laid down in the regulatory technical standards for the single electronic reporting format, hereinafter jointly referred to as regulatory technical standards on ESEF (the ‘ESEF RTS’) and meet the technical conditions of a single electronic reporting format which are specified in these regulations.
Responsibility of the Management Board and Supervisory Board of the Parent Entity
The Management Board of the Parent Entity is responsible for the preparation of consolidated financial statements in the ESEF format in accordance with the tagging requirements and technical conditions of a single electronic reporting format which are specified in the ESEF RTS. Such responsibility includes the selection and application of appropriate XBRL tags using the taxonomy specified in the ESEF RTS.
This responsibility of the Management Board of the Parent Entity includes designing, implementing and maintaining internal control relevant to the preparation of the consolidated financial statements in the ESEF format that is free from material non-compliance with requirements specified in ESEF RTS, whether due to fraud or error.
Auditor’s Responsibility
Our objective is to issue an opinion about whether the consolidated financial statements in the ESEF format were tagged in accordance with the requirements specified in the ESEF RTS and meet the technical conditions of a single electronic reporting format specified in those regulations.
We conducted our engagement in accordance with International Standard on Assurance Engagements 3000 (revised), ‘Assurance Engagements Other Than Audits or Reviews of Historical Financial Information’ as adopted by the National Council of Statutory Auditors (‘NCSA’) by resolution no. 3436/52e/2019 dated 8 April 2019 as National Standard on Assurance Engagement 3000 (revised) (‘KSUA 3000 (Z)’). That standard requires that the auditor plan and perform procedures to obtain reasonable assurance about whether the consolidated financial statements in the ESEF format were prepared in accordance with specified criteria.
Reasonable assurance is a high level of assurance, but it is not guaranteed that the assurance engagement conducted in accordance with KSUA 3000 (Z) will always detect material non-compliance with requirements specified in the ESEF RTS.
The procedures selected depend on our judgment, including the assessment of the risks of material non-compliance with requirements specified in the ESEF RTS, whether due to fraud or error.
with the specified criteria in order to design procedures that are appropriate, which provide the auditor with sufficient and appropriate evidence under the circumstances. The assessment of internal controls was not performed for the purpose of expressing an opinion thereof. The procedures performed by the auditor also included assessing the appropriateness of the subject matter and the suitability of the criteria used under the circumstances.
Our procedures included, in particular:
· obtaining an understanding of the process of selection and application of XBRL tags by the Parent Entity and maintaining compliance with the ESEF RTS, including an understanding of the operation of internal control relevant to this process,
· assessing compliance with the technical conditions on the specification of a single electronic reporting format, including the use of the XHTML format,
· agreeing [on a selected sample] the tagged information included in the reporting package containing the consolidated financial statements in the ESEF format to the consolidated financial statements of the Group presented in human-readable format,
· evaluating the completeness of tagging of information in the consolidated financial statements in the ESEF format using XBRL tags,
· assessing whether the XBRL tags from the taxonomy specified in the ESEF RTS used by the Parent Entity were properly applied and that taxonomy extensions were used where the relevant elements have not been identified in the primary taxonomy specified in the ESEF RTS, including whether the applied taxonomy extensions were correctly anchored in the primary taxonomy specified in the ESEF RTS.
The firm applies International Standard on Quality Control 1 as adopted by National Council of Statutory Auditors by resolution no 2040/37a/2018 dated 3 March 2018 (with subsequent amendments) as national standard on quality control and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
We have complied with the independence and other ethical requirements of the IESBA Code which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior as well as other independence and ethical requirements, applicable to this assurance engagement in Poland.
Defining the criteria
The criteria for assessing compliance of the consolidated financial statements in the ESEF format are defined in the ESEF RTS.
Opinion
Our opinion has been formed on the basis of, and is subject to, the matters outlined above.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on assurance engagement.
In our opinion, the consolidated financial statements in the ESEF format as at 31 December 2020 and for the year then ended was prepared, in all material respects, in accordance with the requirements of the ESEF RTS.
Statement on Services Other than Audit of the Financial Statements
To the best of our knowledge and belief, we did not provide prohibited non-audit services
referred to in art. 5 paragraph 1 second subparagraph of the EU Regulation and art. 136 of the act on statutory auditors.
Services other than audit of the financial statements, which were provided to the Group and entities under the control of the Parent Entity in the audited period are listed in in point 10 of the Report on activities.
Appointment of the Audit Firm
We have been appointed for the first time to audit the annual consolidated financial statements of the Group by resolution of the General Shareholders’ Meeting dated 21 June 2018. Our period of total uninterrupted engagement is 3 years, covering the periods ended 31 December 2018 to 31 December 2020.
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On behalf of audit firm |
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KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k. |
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Registration No. 3546 |
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Signed on the Polish original |
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Marcin Podsiadły |
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Key Statutory Auditor |
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Registration No. 12774 |
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Limited Partner, Proxy |
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Warsaw, 25 February 2021 |
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