INDEPENDENT AUDITOR’S REPORT ON THE AUDIT
To the Shareholders Meeting and Supervisory Board of mBank S.A.
Audit report on the annual consolidated financial statements
Opinion
We have audited the annual consolidated financial statements of mBank Group (the ‘Group‘), for which the holding company is mBank S.A. (the ‘Bank‘) located in Warsaw at ul. Prosta 18, containing: the consolidated income statement and the consolidated statement of comprehensive income for the period from 1 January 2020 to 31 December 2020, the consolidated statement of financial position as at 31 December 2020, the consolidated statement of changes in equity, the consolidated statement of cash flows for the period from 1 January 2020 to 31 December 2020 and explanatory notes to the consolidated financial statements, including a summary of significant accounting policies (the ‘consolidated financial statements’).
In our opinion, the consolidated financial statements:
- give a true and fair view of the consolidated financial position of the Group as at 31 December 2020 and its consolidated financial performance and its consolidated cash flows for the period from 1 January 2020 to 31 December 2020 in accordance with required applicable rules of International Accounting Standards, International Financial Reporting Standards approved by the European Union and the adopted accounting policies,
- are in respect of the form and content in accordance with legal regulations governing the Group and the Bank’s Statute.
The opinion is consistent with the additional report to the Audit Committee of the Supervisory Board of the Bank (the ‘Audit Committee’) issued on 24 February 2021.
Basis for opinion
We conducted our audit in accordance with the National Standards on Auditing in the version of International Auditing Standards as adopted by the National Council of Statutory Auditors (the ‘NAS’) and pursuant to the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Oversight (the ‘Act on Statutory Auditors’) and the 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 ‘Regulation 537/2014’). Our responsibilities under those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial statements’ section of our report.
We are independent of the Group in accordance with the International Ethics Standards Board of Accountants’ (IESBA) International Code of Ethics for Professional Accountants (including International Independence Standards) (the ‘IESBA Code’), adopted by the National Council of Statutory Auditors and other ethical responsibilities in accordance with required applicable rules of the audit of financial statements in Poland. We have fulfilled our other ethical responsibilities in accordance
with these requirements and the IESBA Code. While conducting the audit, the key certified auditor and the audit firm remained independent of the Group in accordance with the independence requirements set out in the Act on Statutory Auditors and the Regulation 537/2014. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of matter
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 include the most significant assessed risks of material misstatement, including the assessed risks of material misstatement due to fraud. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we have summarized our reaction to these risks and in cases where we deemed it necessary, we presented the most important observations related to these types of risks. We do not provide a separate opinion on these matters.
Key audit matter |
How the matter was addressed in our audit |
Provisions for legal claims and contingent liabilities concerning mortgage loans indexed to Swiss Franc |
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The Bank granted mortgage loans indexed to Swiss Franc (‘CHF-loans’). The net book value of those loans amounted to PLN 13.6 billion as of 31 December 2020. The value of repaid loans amounted to PLN 6.8 billon as at 31 December 2020. The Bank is the defendant in numerous lawsuits, concerning CHF loans, both active and fully repaid. As described in Note 32 of the consolidated financial statements claims relate to judgment of partial invalidity of loan agreements, i.e. in respect of valorization clauses, or judgment of invalidity of loan agreements as a whole. As at 31 December 2020 the Bank recognized a provision for legal claims and future legal claims concerning CHF-loans in line with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” amounting to PLN 1 453 million. The Bank’s Management Board’s judgements concerning assumptions made for the purpose of estimate of provision for legal claims as well as for potential legal claims are subject to uncertainties with regard to (i) number of claims that will be filed in the future (ii) future verdicts (both as to content of the verdict and its value) and may vary in the future. So far there is no dominant jurisprudence neither in terms of abusive nature of contractual terms introducing the indexation mechanism, nor as to the possible consequences of determining their abusiveness and the Bank’s Management in forming their assumptions was supported by the legal opinion prepared by the external legal advisor. Due to the significance of CHF-loans portfolio, and significance of the Bank’s Management Board's judgments and estimates and complexity, sensitivity and subjectivity of these judgments and estimates regarding the provisions for legal claims and potential legal claims, as well as the uncertainty resulting from the future developments of the legal framework, we consider recognition and valuation of this provision as a key audit matter. This uncertainty is connected among others, with the resolution of the Supreme Court, that is to be issued on 25 March 2021, regarding the key issues as to the further development of jurisprudence concerning CHF loans, and its impact on the probabilities assigned to future rulings, as well as other circumstances as described in Note 32 to the consolidated financial statements.
Disclosures concerning the Bank’s Management Board’s judgment regarding estimates concerning the abovementioned provisions, including the sensitivity analysis concerning key assumptions, are included in Note 4 of the consolidated financial statements. Information concerning significant legal proceedings as well as other circumstances that may impact estimation of the abovementioned provisions are disclosed in Note 32 of the consolidated financial statements.
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As part of our audit procedures, while assessing whether the accounting estimate and the related disclosures in the consolidated financial statements are reasonable, we performed among others the following procedures: · We analyzed the methodology selected by the Bank to calculate the provision including assumptions and data used, as to the estimate of possible outcomes of legal claims connected with CHF loans granted by the Bank as well as number of claims; · We familiarized ourselves with list of legal claims, in which the Bank is a party and the Bank’s lawyers’ assessment of their outcomes, including obtaining independent confirmations on claims handled from external law firms; · We familiarized ourselves with the Bank’s external legal opinions, including an assessment of the assumptions used and analysis concerning competence and objectivity of external experts engaged by the Bank. As part of the above work, we were supported by our legal specialists; · We assessed consistency with available data, external legal opinions presented by the Bank and discussed among other with the Bank’s Management Board and the Bank’s CHF-loans Department: - assumptions used for the purpose of the calculation of population of borrowers, who will file a lawsuit against the Bank including time distribution of these lawsuits, as well as expected volume of loans of those borrowers, - probability of final loss for each of considered solution, - distribution of expected verdicts, which will be ruled by the courts, - loss incurred by the Bank in case of loss in court for specific verdict. We were supported by our credit risk modelling specialists when analyzing the assumptions relating to the population of borrowers that would file a claim against the Bank; · We assessed the choice of point estimate made by the Management in the context of existing legal documentation and sensitivity of the calculation to changes in key assumptions; · We familiarized ourselves with minutes of meetings of the Bank’s bodies, claims and complaints’ registers and correspondence with regulators concerning CHF-loans and assessed their impact on value of the provision as well as scope of disclosures regarding the provision for legal claims connected with CHF-loans; · We familiarized ourselves with the documentation discussed by the Management Board and Supervisory Board’s Risk Committee relating to the potential impact of other alternative solution, as well as following calculations made by the Bank concerning the above solution on the Group’s capital and financial situation; · We have discussed with the Bank’s Management its approach to other alternative solution as well as lack of recognition of this solution in the provisions calculation as at balance sheet date; · We also analyzed judgements / verdicts after the balance sheet date as well as inflow of lawsuits after balance sheet date in context of assumptions made in the methodology; · We analyzed market benchmarks regarding the share of the costs resulting from legal claims connected with the CHF loans to the value of the portfolio of these loans; · We have discussed with the Supervisory Board’s Audit Committee Members the assumptions made for the purpose of point estimate as well as the potential subjectivity risk that could impact Bank’s Management’s estimate as to the level of the provision. In addition, we made an assessment of disclosures regarding estimate of provisions and contingent liabilities included in the consolidated financial statements, in terms of completeness and adequacy. |
Impairment allowances for expected credit losses |
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Loans and advances to customers valued at amortized cost as at 31 December 2020 amounted to PLN 108.1 billion and accounted for 60.0% of the Group’s total assets. The abovementioned amount included the gross book value of loans and advances in the amount of PLN 111.8 billion less expected credit losses in the amount of PLN 3.6 billion. In accordance with IFRS 9 ‘Financial Instruments’ (‘IFRS 9’) the Management Board of the Bank should determine the loss allowance for a given financial instrument at an amount equal to 12-month expected credit losses or at an amount equal to lifetime expected credit losses depending on classification of individual exposures to stages. Determining the amount and the moment of recognizing impairment allowance for expected credit loss requires significant judgment and significant and complex estimates such as: - classification of financial assets to appropriate stages in accordance with IFRS 9, - interpretation of requirements and assumptions made in the area of structure of models calculating credit risk parameters and provision for expected credit losses, - completeness and adequacy of data applied for calculation of provision for expected credit losses, - assumptions made, including applied in estimation of possible macro-economic scenarios, - valuation of individually assessed loans and advances, including assessment of many scenarios and collaterals valuation, - correctness and adequacy of disclosures in the consolidated financial statements. In 2020, due to deterioration of economic situation related to the COVID-19 pandemic, additional steps have been taken by the Group to include this information in the models used to determine the expected credit losses as well as in the process of significant increase in credit risk (‘SICR’) determination. Due to the significance of loans and advances to customers valued at amortized cost in relation to total assets, and the significance of the Management Board's judgments and estimates and complexity of these judgments and estimates regarding the expected credit losses, we consider Impairment allowances for loans and advances to customers the key audit matter. Information on the methodology of classification and valuation of loans and advances to customers, as well as related judgement and estimates are described in Notes 2.7, 2.9 and 3.3 to the consolidated financial statements, whereas information on value of loans and advances to customers and the value of impairment allowances are described in Notes 15 and 23 to the consolidated financial statements. Specific disclosures regarding COVID-19 outbreak and its impact on expected credit losses are described in Note 4 to the consolidated financial statements. |
As part of the audit procedures, we analyzed the Group’s process of expected credit loss calculation, as well as related processes: loan granting process, process of monitoring of economic and financial standing of borrowers and identification of impairment triggers, as well as the process of provision calculation for expected credit losses. As part of the process analysis we inquired as to any changes implemented in the processes due to COVID-19 pandemic and credit moratoria granting by the Group. Based on the above processes we analyzed design and functioning of control mechanisms, as well as performed tests of adequacy and reliability of data used in these processes. In addition we familiarized ourselves with the accounting policies and methodologies concerning estimation of risk parameters and creation of collective impairment allowances for expected credit losses, as well as policies governing credit moratoria granting, in context of their compliance with requirements of IFRS 9, and compared them with the market approach. We have carried out an analysis of the indicators of a significant increase in credit risk and classification into risk stages, so-called ‘staging’. We assessed the models, assumptions and completeness of data used by the Group for the purposes of creating impairment allowances for expected credit losses, including assumptions underlying the moment of loss identification, probability of default and loss as a result of default, macroeconomic assumptions, as well as the changes in models and verification of historical models (so called back-testing). We analyzed changes in the models as well as SICR determination which were implemented as a response to impact of COVID-19 outbreak. We analyzed collective historical loss allowances through comparison with factual losses realized on individual homogeneous portfolios in the past. When carrying out the above procedures, we engaged our internal specialists in the field of credit risk modeling. We analyzed individually assessed by the Group exposures on a selected sample. For selected exposures, both from sectors, which, in the Group’s view, are particularly vulnerable to the negative effects of the pandemic and sectors less vulnerable to the negative effects of the pandemic, we assessed reasonableness of recovery amounts estimated by the Management Board, including the potential COVID-19 impact on the recoverable amount of collateral, based on available financial and market data. For selected exposures we analyzed impact of COVID-19 outbreak on the economic and financial situation of borrowers, inquired as to extensiveness of payment moratoria and fulfillment of the terms of loan agreements in order to identify potential SICR or impairment triggers. We conducted analytical procedures regarding the structure and dynamics of balance of loans and advances in order to identify and explain significant changes or to explain lack of expected changes. Regarding IT systems, in which both the credit risk parameters and the calculation of the provisions for expected credit losses were calculated in the reporting period, our analysis of control mechanisms effectiveness was carried out in cooperation with specialists in the field of IT systems. In addition, we made an assessment of disclosures regarding impairment allowances for loans and advances to customers included in the consolidated financial statements in terms of compliance with International Financial Reporting Standards. |
Responsibilities of the Bank’s Management and members of the Supervisory Board for the financial statements
The Bank’s Management is responsible for the preparation, based on properly maintained accounting records, the consolidated financial statements that give a true and fair view of the financial position and the financial performance in accordance with required applicable rules of International Accounting Standards, International Financial Reporting Standards approved by the European Union, the adopted accounting policies and other applicable laws, as well as the Bank’s Statute, and is also responsible for such internal control as determined is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Bank’s Management is responsible for assessing the Group’s (the holding company and significant components’) 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 Bank’s Management either intends to liquidate the Group (the holding company or significant components) or to cease operations, or has no realistic alternative but to do so.
The Bank’s Management and the members of the Bank’s Supervisory Board are required to ensure that the consolidated financial statements meet the requirements of the Accounting Act dated 29 September 1994 (the ‘Accounting Act’). The members of the Bank’s Supervisory Board are responsible for overseeing the Bank’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 due to fraud or error, and to issue an independent auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not guarantee that an audit conducted in accordance with NAS will always detect material misstatement when it exists. Misstatements may arise as a result of fraud or error and are considered material if it can reasonably be expected that individually or in the aggregate, they could influence the economic decisions of the users taken on the basis of these consolidated financial statements.
In accordance with International Auditing Standard 320, section 5, the concept of materiality is applied by the auditor both in planning and performing the audit, and in evaluating the effect of identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the auditor’s report. Hence all auditor’s assertions and statements contained in the auditor’s report are made with the contemplation of the qualitative and quantitative materiality levels established in accordance with auditing standards and auditor’s professional judgment.
The scope of the audit does not include assurance on the future profitability of the Group nor effectiveness of conducting business matters now and in the future by the Bank’s Management.
Throughout the audit in accordance with NAS, we exercise professional judgment and maintain professional skepticism and 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 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 Bank’s Management,
- conclude on the appropriateness of the Bank’s Management’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 independent auditor’s report 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 independent auditor’s report, 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,
- we obtain sufficient appropriate audit evidence regarding the financial information of entities and business activities within the Group for the purpose of expressing an opinion on the consolidated financial statements. We are solely responsible for the direction, supervision and performance of the audit of the Group and we remain solely responsible for our audit opinion.
We communicate with the Audit Committee 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 with a statement that we have complied with relevant ethical requirements regarding independence, and communicate to 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 to Audit Committee, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report 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, including the Directors’ Report
The other information comprises the Management Board Report on Performance of mBank S.A. Group in 2020 (including Management Board Report on Performance of mBank S.A.) (‘Directors’ Report’) for the period from 1 January 2020 to 31 December 2020, the representation on the corporate governance and the representation on preparation of the statement on non-financial information, mentioned in article 55, section 2b of the Accounting Act as a separate element of the Directors’ Report (jointly ‘Other Information’).
Responsibilities of the Bank’s Management and members of the Supervisory Board
The Bank’s Management is responsible for the preparation the Other Information in accordance with the law.
The Bank’s Management and members of the Bank’s Supervisory Board are required to ensure that the Directors’ Report (with separate elements) meets the requirements of the Accounting Act.
Auditor’s responsibility
Our opinion on the consolidated financial statements does not include the Other Information. In connection with our audit of the consolidated financial statements, our responsibility is to read the Other Information and, in doing so, consider whether it is materially inconsistent with the consolidated financial statements or our knowledge obtained during 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 of this Other Information, we are required to report that fact in our independent auditor’s report. Our responsibility in accordance with the Act on Statutory Auditors is also to issue an opinion on whether the Directors’ Report was prepared in accordance with relevant laws and that it is consistent with the information contained in the consolidated financial statements.
In addition, we are required to inform whether the Bank has prepared the representation on non-financial information and to issue an opinion on whether the Bank has included the required information in the representation on application of corporate governance.
Opinion on the Directors’ Report
Based on the work performed during our audit, in our opinion, the Directors’ Report:
- has been prepared in accordance with the article 49 of the Accounting Act and paragraph 71 of the Decree of the Minister of Finance dated 29 March 2018 on current and periodic information published by issuers of securities and conditions for recognition as equivalent the information required by laws of non-EU member states (the ‘Decree on current and periodic information’), as well as article 111a paragraph 1-2 of the Act of 29 August 1997 Banking Law (the “Banking Law’),
- is consistent with the information contained in the consolidated financial statements.
Moreover, based on our knowledge of the Group and its environment obtained during our audit, we have not identified material misstatements in the Directors’ Report.
Opinion on the corporate governance application representation
In our opinion, in the representation on application of corporate governance, the Group has included information stipulated in paragraph 70, section 6, point 5 of the Decree on current and periodic information.
Moreover, in our opinion, the information stipulated in paragraph 70, section 6, point 5 letter c-f, h and i of the Decree included in the representation on application of corporate governance is in accordance with applicable laws and information included in the consolidated financial statements.
Information on non-financial information
In accordance with the Act on Statutory Auditors, we confirm, that the Bank has prepared a statement on non-financial information mentioned in article 55, section 2b of the Accounting Act as a separate element of the Directors’ Report.
We have not performed any attestation procedures in respect to the statement on non-financial information and do not express any assurance in its respect.
Report on other legal and regulatory requirements
Banks are required to comply with the prudential requirements of the Banking Law, the resolution of the Polish National Bank’s Management Board, the resolution of Polish Financial Supervision Authority (‘PFSA’), recommendations of PFSA and Regulation of the European Parliament and the Council (EU) No. 575/2013 of 26 June 2013 on prudential requirements for credit institutions and investment firms, amending Regulation (EU) No 648/2012 (CRR) and issued on the basis of a Commission Regulation (EU), as well as the Act of 5 August 2015 on macro-prudential supervision over the financial system and on crisis management in the financial system (“the Act on macro-prudential supervision”) concerning:
· credit risk concentration,
· concentration of capital shares,
· qualification of loans and guarantees granted into risk groups,
· liquidity,
· minimum reserves,
· capital adequacy.
The Bank's Management Board is responsible for compliance with applicable prudential regulations, including in particular the correct determination of capital ratios by the Group. Our responsibility was, based on the conducted audit, to provide information whether the Group complied with the above described prudential regulations. Our responsibility was not to express an opinion on compliance with these regulations.
As part of the audit of the consolidated financial statements we have performed the procedures with regards to capital ratios and we have not identified any discrepancies in their calculation which would have an material impact on the consolidated financial statement as a whole. Therefore, we inform that the Bank’s Management Board has correctly calculated the capital requirements in compliance with the rules described above.
Opinion on the compliance of the consolidated financial statements prepared in the single electronic reporting format with the requirements of the regulation 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 an assurance engagement to obtain reasonable assurance in order to express an opinion on whether the consolidated financial statements of the Group for the year ended 31 December 2020 prepared in the single electronic reporting format included in the file named ‘Skonsolidowane Sprawozdanie Finansowe Grupy mBanku S.A. za 2020 rok.zip’ (‘consolidated financial statements in ESEF format’) were tagged in accordance with the regulations 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 (the ‘ESEF Regulations’) and meet the technical requirements of a single electronic reporting format which are specified in these regulations.
Identification of criteria and description of the subject matter
Responsibilities of the Bank’s Management and members of the Supervisory Board
The Bank’s Management is responsible for the preparation of the consolidated financial statements in ESEF format in accordance with the tagging requirements and technical requirements of a single electronic reporting format which are specified in the ESEF Regulations. Such responsibility includes the selection and application of appropriate XBRL tags using the taxonomy specified in these regulations.
The responsibility of Bank’s Management also includes the design, implementation and maintenance of such internal control as determined to be necessary to enable the preparation of the consolidated financial statements in ESEF format that are free from any material incompliance with the ESEF Regulations.
The members of the Bank’s Supervisory Board are responsible for overseeing the Bank’s financial reporting process, including the preparation of financial statements in compliance with the form in accordance with the governing legal regulations.
Auditor’s responsibility
We have performed our assurance engagement in accordance with the National Standard on Assurance Engagements Other than Audit and Review 3000 (R) in the form of the International Standard on Assurance Engagements 3000 (revised) – ‘Assurance Engagements Other than Audits or Reviews of Historical Financial Information’ (‘ISAE 3000 (R)’).
This standard, imposes an obligation on the auditor to plan and execute procedures in order to obtain reasonable assurance, that the consolidated financial statements in 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 ISAE 3000 (R) will always detect material misstatement when it exists.
The selection of procedures depends on the auditor’s professional judgment, including the assessment of risks of material misstatements due to error or fraud. When performing risk assessment and in order to design procedures to be performed the auditor takes into consideration the internal controls related with the preparation of the consolidated financial statements in ESEF format, which can provide the auditor with sufficient and appropriate evidence. The assessment of the internal controls was not performed for the purpose of expressing an opinion on the effectiveness of the Bank’s internal control.
Summary of performed procedures
Procedures that were designed and performed by us included among others:
- obtaining an understanding of the process of preparation of the consolidated financial statements in ESEF format including the Bank’s process of selection and application of XBRL tags and maintaining compliance with the ESEF Regulations,
- reconciling of the tagged information included in the consolidated financial statements in ESEF format to the audited consolidated financial statements,
- assessment of the compliance with the technical standards on the specification of a single electronic reporting format, including the use of the XTHML format, with the use of specialistic IT tools,
- assessment of the completeness of the tagging of information in the consolidated financial statements in ESEF format with XBRL tags,
- assessment whether the applied XBRL tags from the taxonomy specified by the ESEF regulations were applied appropriately and that extensions to the elements in the taxonomy specified in the ESEF Regulations were used when there were no suitable elements in the taxonomy specified in the ESEF Regulations,
- evaluating of the anchoring of the taxonomy extensions to the elements in the taxonomy specified by the ESEF Regulations.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the performed assurance engagement.
Ethical requirements, including independence
While performing the assurance engagement, the key certified auditor and the audit firm have complied with the independence and other ethical requirements as specified by the IESBA Code. The IESBA Code is based on the fundamental principles related to integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. We have also complied with other independence requirements and ethical responsibilities in accordance with required applicable rules of such assurance engagement in Poland.
Quality control requirements
The accounting firm applies national quality control standards in the form of International Quality Control Standard 1 – ‘Quality Control for Firms that Perform Audits and Reviews of Financial Statements and other Assurance and Related Services Engagements’ as adopted by a resolution of the National Council of Certified Auditors (‘IQCS’).
In accordance with IQCS, the audit firm 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.
Opinion
The matters described above constitute the basis for our opinion which is why our opinion should be read in conjunction with these matters.
In our opinion, the consolidated financial statements in ESEF format were prepared in all material respects in accordance with the requirements of the ESEF Regulations.
Representation on the provision of non-audit services
To the best of our knowledge and belief, we represent that services other than audits of the financial statements, which have been provided to the Group, are compliant with the laws and regulations applicable in Poland, and that we have not provided non-audit services, which are prohibited based on article 5 item 1 of Regulation 537/2014 and article 136 of the Act on Statutory Auditors. The non-audit services, which we have provided to the Group in the audited period, have been disclosed in the Directors’ report.
Appointment of the audit firm
We were appointed for the audit of the Group's consolidated financial statements initially based on the resolution of Shareholders Meeting dated 12 April 2018 and reappointed based on the resolution dated 27 March 2020. The consolidated financial statements of the Group have been audited by us uninterruptedly starting from the financial year ended on 31 December 2018, i.e. for the past three consecutive years.
Key Certified Auditor |
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Arkadiusz Krasowski |
Certified Auditor |
No. in the register: 10018 |
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on behalf of: |
Ernst & Young Audyt Polska spółka z ograniczoną odpowiedzialnością sp. k. |
Rondo ONZ 1, 00-124 Warsaw |
No. on the audit firms list: 130 |
Warsaw, 24 February 2021
ERNST & YOUNG IN POLAND IS A MEMBER OF ERNST & YOUNG GLOBAL
District Court for the City of Warsaw, Economic Dept. XII of the National Court Register, KRS: 0000481039
Tax Identification Number (NIP): 526-020-79-76