Independent auditors’ report
To the Shareholders of RESBUD SE
Report on the Audit of the Consolidated Financial Statements
Disclaimer of Opinion
We were engaged to audit the consolidated financial statements of RESBUD SE and its subsidiaries (the
Group), which comprise the consolidated statement of financial position as at 31 December 2021, and
the consolidated statement of profit or loss and other comprehensive income, consolidated statement of
cash flows and consolidated statement of changes in equity for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies.
We do not express an opinion on the accompanying consolidated financial statements of the Group.
Because of the significance of the matters described in the Basis for Disclaimer of Opinion section of our
report, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an
audit opinion on these consolidated financial statements.
Basis for Disclaimer of Opinion
The Group’s management has not maintained an adequate system of internal controls over financial
reporting and such internal controls over financial reporting were not operating effectively. We have
identified multiple indications that the accompanying consolidated financial statements do not comply
with International Financial Reporting Standards as adopted in the European Union.
These indications include, but are not limited to, the following:
a. Monitoring, controlling, reconciling and eliminating intra-group transactions and intra-group account
balances at group level has not been appropriately documented.
b. Invalid or inappropriate disclosures are made in the consolidated financial statements and mandatory
disclosure information is omitted from the consolidated financial statements.
c.
Related party transactions are not monitored and evaluated for appropriate recording and
presentation.
d. Subsequent events are not monitored and evaluated for appropriate recording and presentation,
and the notes describing subsequent events and their impact (including the impact of the 2022
Russian invasion of Ukraine) are omitted.
e. Risks with more than remote likelihood of occurrence giving substantial doubt to the ability to
continue as a going concern are not evaluated by management.
Having regard to the number, size, and gravity of the deficiencies in the financial reporting process,
potential adjustments cannot be confined to a defined financial statement caption or specific disclosure.
Accordingly, the possible effects on the consolidated financial statements could be both material and
pervasive.
Due to these matters, we were unable to determine whether any adjustments might have been found
necessary in respect of the financial position of the Group as at 31 December 2021, or its financial
performance and its cash flows for the year then ended.
The consolidated statement of financial position includes items of goodwill in the amount of EUR 31,279
thousand. We were unable to obtain sufficient appropriate audit evidence to assess the accuracy of
measurement and the validity of presentation of goodwill in the consolidated statement of financial
position as at 31 December 2021. Management conducted the impairment test as described in Note 16
to the consolidated financial statements.
As a result of the test management did not identify any impairment. The result of the impairment test is
dependent on several significant management assumptions and estimations. The estimates used by
management in the cash flow projections for upcoming years are not supported by current sales volumes
nor any other information we have obtained during the audit. Therefore, we were unable to obtain
sufficient appropriate audit evidence regarding the key assumptions applied. Consequently, we were
unable to determine whether any adjustments were necessary in respect of the accompanying
consolidated statement of financial position, the consolidated statement of profit or loss and other
comprehensive income, and consolidated statement of changes in equity.
The consolidated statement of financial position as at 31 December 2021 includes short-term financial
assets with a carrying amount of EUR 3,983 thousand which includes debt instruments from the Swiss
company Vasilina SEK AG in the amount of EUR 461 thousand. Due to the fact that we were unable to
obtain sufficient reliable audit evidence to support management’s assumptions used in the estimation of
future cash flows from the investment, we are unable to express our opinion on the recoverability of the
investment in the consolidated statement of financial position, and related adjustments in the consolidated
statement of profit or loss and other comprehensive income. We were also not able to satisfy ourselves
as to the amount by which the recoverable amount of the investment is lower than its carrying amount
and the amount in which an impairment loss should have been recognised by alternative means.
Accordingly, we are unable to conclude whether and to what extent the Group’s consolidated
comprehensive income for the reporting period may be overstated and the Group’s consolidated assets
and equity as at 31 December 2021 may be overstated for the above reason.
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. These matters were addressed in the
context of the audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, we do not provide a separate opinion on these matters.
Because of the significance of the matters described in the Basis for Disclaimer of Opinion section of our
report, we do not report on key audit matters.
Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with International Financial Reporting Standards as adopted in the European
Union and for such internal control as management 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, management 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 management either intends to liquidate the Group or
to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our responsibility is to conduct an audit of the Group’s consolidated financial statements in accordance
with International Standards on Auditing and to issue an auditor’s report. However, because of the matters
described in the Basis for Disclaimer of Opinion section of our report, we were not able to obtain sufficient
appropriate audit evidence to provide a basis for an audit opinion on these consolidated financial
statements.
We are independent of the Group in accordance with the Code of Ethics for Professional Accountants
(Estonia) (including Independence Standards), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other Requirements of the Auditors' Report in Accordance with Regulation (EU) No 537/2014 of
the European Parliament and of the Council
We were appointed by those charged with governance on 12 October 2021 to audit the consolidated
financial statements of RESBUD SE for the year ended 31 December 2021. Our total uninterrupted period
of engagement is one year, covering the period ended 31 December 2021.
We confirm that:
– Our audit opinion is consistent with the additional report presented to the Audit Committee of the
Group.
– We have not provided to the Group the prohibited non-audit services (NASs) referred to in Article 5(1)
of EU Regulation (EU) No 537/2014. We also remained independent of the audited entity in conducting
the audit.
Tallinn, 6 October 2022
/digitally signed/
Indrek Alliksaar
Certified Public Accountant
Licence No. 446
KPMG Baltics OÜ
Licence No. 17
Narva mnt 5,
Tallinn, 10117
Estonia
Tel +372 626 8700
www.kpmg.ee