TRANSLATORS’ EXPLANATORY NOTE
Version dated 21.03.2023
The
English
content
of
this
report
is
a
free
translation
of
the
registered
auditor’s
report
of
the
below-
mentioned
Polish
Company.
In
Poland
statutory
accounts
as
well
as
the
auditor’s
report
should
be
prepared
and
presented
in
Polish
and
in
accordance
with
Polish
legislation
and
the
accounting
principles
and
practices generally adopted in Poland.
The
accompanying
translation
has
not
been
reclassified
or
adjusted
in
any
way
to
conform
to
the
accounting
principles
generally
accepted
in
countries
other
than
Poland,
but
certain
terminology
current
in
Anglo-Saxon
countries
has
been
adopted
to
the
extent
practicable.
In
the
event
of
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discrepancies
in
interpreting
the
terminology, the Polish language version is binding.
PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k.
, ul.
Polna 11, 00-633 Warsaw, Poland, T: +48 (22) 746
4000, F:+48 (22) 742 4040 ,
PricewaterhouseCoopers Polska spółka z ograniczoną odpowiedzialnością Audyt sp. k.
is entered into the National Court Register maintained by
the District Court for the Capital City of Warsaw, under KRS number 0000741448, NIP 113-23-99-979. The seat of the Company is in Warsaw at
Polna 11.
Independent Registered Auditor’s Report
To the General Shareholders’ Meeting and the Supervisory Board
XTB S.A.
Report on the audit of financial statements
Our opinion
In our opinion, the attached annual financial statements of XTB S.A. (“the Company”):
●
give a true and fair view of the financial position of the Company as at 31 December 2022 and
financial performance and its cash flows for the year then ended in accordance with the applicable
International Financial Reporting Standards as adopted by the European Union and the adopted
accounting policies;
●
comply in terms of form and content with the laws applicable to the Company and the Company’s
Articles of Association;
●
have been prepared on the basis of properly maintained books of account in accordance with the
provisions of Chapter 2 of the Accounting Act of 29 September 1994 (“the Accounting Act” –
Consolidated text: Journal of Laws of 2021, item 217, as amended).
This opinion is consistent with our additional report to the Audit Committee, which we issued as of the
date of this report.
What we have audited
We have audited the annual financial statements of which comprise:
●
the statement of financial position as at 31 December 2022;
and the following prepared for the financial year from 1 January to 31 December 2022:
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the statement of comprehensive income;
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the statement of changes in equity;
●
the statement of cash flows, and
●
the notes comprising a description of the adopted accounting policies and other
explanations.
Basis for opinion
We conducted our audit in accordance with the National Auditing Standards in the wording of the
International Standards on Auditing adopted by a resolution by the National Council of Statutory
Auditors ("KSB") and in accordance with the provisions of the Act of May 11, 2017 on Statutory
Auditors, Audit Firms and Public Oversight ("Act on statutory auditors"), as well as EU Regulation No.
537/2014 of 16 April 2014 on detailed requirements for statutory audits of financial statements of
public-interest entities (the “EU Regulation”). Our responsibilities under NSA are further described in
the Auditor’s responsibilities for the audit of the 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
We are independent of the Company in accordance with the International Code of Ethics for
Professional Accountants (including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (IESBA Code) as adopted by resolution of the
National Council of Statutory Auditors and other ethical requirements that are relevant to our audit of
the financial statements in Poland. We have fulfilled our other ethical responsibilities in accordance
with these requirements and the IESBA Code. During the audit, the key registered auditor and the
registered audit firm remained independent of the Company in accordance with the independence
requirements set out in the Act on Registered Auditors and in the EU Regulation.
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we considered where the Company’s
Management Board made subjective judgements; for example, in respect of significant accounting
estimates that involved making assumptions and considering future events that are inherently
uncertain. We also addressed the risk of management override of internal controls, including among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Materiality
The scope of our audit was influenced by the adopted materiality level. Our audit was designed to
obtain reasonable assurance that the financial statements as a whole are free from material
misstatement. Misstatements may arise due to fraud or error.
They are considered material if, individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall materiality for the financial statements as a whole. These thresholds, together
with qualitative considerations, helped us to determine the scope of our audit and the nature, timing
and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in
aggregate on the financial statements as a whole.
PLN 46.400 thousand (14.320 thousand PLN in 2021)
approximately 5% of profit before tax
Rationale for the
materiality benchmark
applied
We have taken profit before tax as the basis for determining materiality
because we believe this measure is commonly used to evaluate the
Company's operations by users of financial statements and is a
generally accepted benchmark.
We applied materiality at 5% because, based on our professional
judgement, it is consistent with the level of quantitative materiality used
in the examination of profit-oriented entities in the brokerage industry.
We agreed with the Audit Committee that we would report to them misstatements identified during our
audit above PLN 2,320 thousand, as well as misstatements below that amount that, in our view,
warranted reporting for qualitative reasons.
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial statements of the current period. They include the most significant identified risks of
material misstatements, including the identified risks of material misstatement resulting from fraud. These
matters were addressed in the context of our audit of the financial statements as a whole, and in forming
In preparing the financial statements, the Company’s Management Board is responsible for assessing
the Company’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 either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so
process.
The Company’s Management Board are obliged to ensure that the financial statements comply with
the requirements specified in the Accounting Act. Members of the Supervisory Board are responsible
for overseeing the financial reporting
Auditor’s responsibility for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s 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 the NSA will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence economic decisions of users taken on the
basis of these financial statements.
The scope of the audit does not cover an assurance on the Company’s future profitability or the
efficiency and effectiveness of the Company’s Management Board conducting its affairs, now or in
future.
As part of an audit in accordance with the NSA, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
●
Identify and assess the risks of material misstatement of the 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 Company’s internal control.
●
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the Company’s Management Board.
●
Conclude on the appropriateness of the Company’s Management Board’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 Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the 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 auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.
●
Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
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 also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated to the 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 report on the operations
Other information
Other information includes:
●
"Report of the Management Board on the operations of the Group and the Company" for the
financial year ended December 31, 2022 ("Report on operations") along with a statement on the
application of corporate governance, which is a separate part of this Report on activities.
●
A separate report on non-financial information
●
Annual Report for the financial year ended December 31, 2022 ("Annual Report") (together "Other
Information")
Other information does not include the financial statements and our auditor’s report thereon.
We obtained the annual report before the date of this audit report, except for the Statements of the
Supervisory Board:
a) regarding the appointment, composition and functioning of the audit committee referred to in Art. 70
section 1 point 8 of the Regulation of the Minister of Finance of March 29, 2018 on current and
periodic information provided by issuers of securities and the conditions for recognizing as equivalent
information required by the law of a non-member state ("Regulation on current information")
b) in the scope of assessment, together with justification, regarding the report on the activity of the
issuer and the financial statement in terms of their compliance with the books, documents and the
facts referred to in Art. 70 sec. 1 point 14 of the Regulation on current information,
which will be available after that date.
Responsibility of the Management and Supervisory Board
The Management Board of the Company is responsible for preparing Other Information in accordance
with the law.
The Company’s Management Board is obliged to ensure that the Report on the operations
together
with the separate sections and the separate report on non-financial information complies with the
requirements of the Accounting Act.
Registered auditor’s responsibility
Our opinion on the audit of the financial statements does not cover Other Information.
In connection with our audit of the financial statements, our responsibility is to read Other Information
and, in doing so, consider whether it is materially inconsistent with the information in the financial
statements, our knowledge obtained in our audit, or otherwise appears to be materially misstated.
If, based on the work performed, we identified a material misstatement in Other Information, we are
obliged to inform about it in our audit report. In accordance with the requirements of the Act on the
Registered Auditors, we are also obliged to issue an opinion on whether the Report on the operations
has been prepared in accordance with the law and is consistent with information included in annual
financial statements.
Moreover, we are obliged to issue an opinion on whether the Parent Company provided the required
information in its corporate governance statement.
In addition, we are required to audit the financial information included in the Report on the operations
in accordance with the scope described in this audit report and the requirements of the Financial
Instruments Trading Act of July 29, 2005 (the "Trading Act").
Other Information Statement
We represent that in the light of the knowledge about the Group and its environment obtained during
our audit, we have not identified any significant misstatements in the Report on operations and other
information that we obtained before the date of this audit report.
In the event that we find a significant distortion in the Statements of the Supervisory Board:
a) with regard to the appointment, composition and operation of the audit committee referred to in Art.
70 section 1 item 8 of the Regulation on current information and
b) in the scope of the assessment with justification regarding the report on the issuer's activities and
financial statements in terms of their compliance with the books, documents and the facts referred to
in Art. 70 sec. 1 point 14 of the Regulation on current information,
we are obliged to inform the Parent Company's Supervisory Board about it.
Opinion on the Report on the operations
Based on the work we carried out during the audit, in our opinion, the Report on the operations:
●
has been prepared in accordance with the requirements of Art. 49 of the Accounting Act,
paragraph 70 of the Ordinance on current information and art. 110w sec. 1 of the Trading Act;
●
is consistent with the information in the financial statements.
Moreover, based on the knowledge of the Company and its environment obtained during our audit, we
have not identified any material misstatements in the Report on the operations and Other information.
Opinion on the corporate governance statement
In our opinion, in its corporate governance statement, the Company included information set out in
para. 70.6 (5) of the Regulation on current information In addition, in our opinion, information specified
in paragraph 70.6 (5)(c)–(f), (h) and (i) of the said Regulation included in the corporate governance
statement are consistent with the applicable provisions of the law and with information included in the
financial statements.
Information on non-financial information
In accordance with the requirements of the Chartered Accountants Act, we confirm that the Company
has included in the Directors' Report information about the preparation of a separate report on non-
financial information as referred to in Article 49b of the Accounting Act and that the Company has
prepared such a separate report.
We have not performed any assurance work on the separate non-financial information report and we
do not express any assurance thereon.
Report on other legal and regulatory requirements
I Information on compliance with prudential regulations
The Management Board of the Company is responsible for complying with the applicable prudential
regulations set out in separate legislation, and in particular, for the correct determination of the capital
ratios.
The capital ratios as at 31 December 2022 have been presented in Note 37 of the financial statements
and include the total capital requirement.
We are obliged to give information in our report on the audit of the financial statements as to whether
the Company has complied with the applicable prudential regulations set out in separate legislation,
and in particular, whether the Company has correctly determined its capital ratios. For the purposes of
the said information, the following legal acts are understood as
2021 Regulation (EU) 2019/2033 of
the European Parliament and of the Council of 27 November 2019 on prudential requirements for
investment firms and amending Regulations (EU) No 1093/2010, (EU) No 575/2013, (EU) No
600/2014 and (EU) No 806/2014 ("IFR"), the Act of 5 August 2015 on macroprudential supervision of
the financial system and crisis management in the financial system (the "Macroprudential Supervision
Act"), Regulation of the Minister of Development and Finance of April 25, 2017 on internal capital, risk
management system, supervisory assessment program and supervisory examination and evaluation,
as well as remuneration policy in a brokerage house, Regulation of the Minister of Development and
Finance of December 8, 2021. on the estimation of internal capital and liquid assets, the risk
management system, supervisory review and evaluation, as well as the remuneration policy in a
brokerage house and a small brokerage house.
It is not the purpose of an audit of the financial statements to present an opinion on compliance with
the applicable prudential regulations specified in the separate legislation specified above, and in
particular, on the correct determination of the capital ratios, and therefore, we do not express such an
opinion.
Based on the work performed by us, we inform you that we have not identified:
●
any cases of non-compliance by the Company with the applicable prudential regulations set
out in the separate legislation referred to above, in the period from 1 January to 31 December
2022;
●
any irregularities in the determination by the Company of the capital ratios as at 31 December
2022 in accordance with separate legislation referred to above,
which would have a material impact on the financial statements.
Statement on the provision of non-audit services
To the best of our knowledge and belief, we declare that the non-audit services we have provided to
the Company and its subsidiaries are in accordance with the laws and regulations applicable in Poland
and that we have not provided any non-audit services prohibited under Article 5(1) of the EU
regulation and Article 136 of the Act on Registered Auditors.
The non-audit services which we have provided to the Company and its subsidiaries in the audited
period are disclosed in the note 31 to the financial statements.
We were first appointed to audit the Company's annual financial statements by Board Resolution
45/2018 dated November 7, 2018 and again by resolution dated May 4, 2021. We have audited the
Company's financial statements continuously beginning with the fiscal year ended December 31,
2019, a period of four years.
The Key Registered Auditor responsible for the audit on behalf of PricewaterhouseCoopers Polska
spółka z ograniczoną odpowiedzialnością Audyt sp.k., a company entered on the list of Registered
Audit Companies with the number 144., is Agnieszka Accordi.
