Grupa Azoty Zakłady Chemiczne Police Group

Transcription

1 Grupa Azoty Zakłady Chemiczne Police Group Opinion and Report of the Independent Auditor Financial year ended December 31st KPMG Audyt Sp. z o.o. is a Polish limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved.

2 KPMG Audyt Sp. z o.o ul. Inflancka 4A Warszawa, Polska Telephone: +48 (22) Fax: +48 (22) kpmg@kpmg.pl OPINION OF THE INDEPENDENT AUDITOR To the General Meeting of Grupa Azoty Zakłady Chemiczne Police S.A. Opinion on the consolidated financial statements We have audited the accompanying consolidated financial statements of the Group, whose parent is Grupa Azoty Zakłady Chemiczne Police S.A. with registered office at ul. Kuźnicka 1, Police, Poland (the Group ), which comprise the consolidated statement of financial position as at December 31st 2016, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity, and the consolidated statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Responsibility of the Management Board and the Supervisory Board for the consolidated financial statements The Management Board of the parent is responsible for the preparation of the consolidated financial statements so as to give a true and fair view in accordance with the International Financial Reporting Standards endorsed by the European Union and other applicable regulations. The parent s Management Board is also responsible for such internal control as the Management Board determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Pursuant to the Accountancy Act of September 29th 1994 (Dz.U. of 2016, item 1047, as amended) (the Accountancy Act ), the parent s Management Board and members of the Supervisory Board are required to ensure that the consolidated financial statements are in compliance with the requirements set forth in the Accountancy Act. Auditor s responsibility Our responsibility is to express an opinion on the consolidated financial statements based on our audit. We conducted our audit in accordance with section 7 of the Accountancy Act and the Polish Financial Auditing Standards compliant with the International Standards on Auditing, adopted by the National Council of Statutory Auditors by resolution of February 10th Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. 1 KPMG Audyt Sp. z o.o. is a Polish limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in Poland. KPMG Audyt Sp. z o.o., a Polish limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in Poland. Company registered in the District Court for the capital city of Warsaw, 12th Commercial Division of the National Court Register. KRS Share capital: PLN 125,000 Tax Identification Number (NIP): Industry Identification Number (REGON):

3 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The choice of procedures depends on our judgement, including the assessment of risks of material misstatement in the consolidated financial statements, whether due to fraud or error. In making the risk assessment, we consider internal control relevant to the entity s preparation of consolidated financial statements that give a true and fair view 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 entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the parent s Management Board, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the attached Consolidated Financial Statements of the Grupa Azoty Zakłady Chemiczne Police Group: give a true and fair view of the Group s assets and financial position as at December 31st 2016 as well as of its financial performance and cash flows for the financial year then ended, in accordance with the International Financial Reporting Standards endorsed by the European Union; and comply, in all material respects, with the laws applicable to the Group and affecting the form and content of consolidated financial statements. Explanatory notes Without qualifying our opinion, we would like to draw attention to Section 1.1 of the Notes to the consolidated financial statements. The parent s Management Board decided to replace the consolidated financial statements for the year ended December 31st 2016, dated March 20th 2017, with the consolidated financial statements dated April 26th 2017, owing to an adjustment to accounting for the acquisition of shares in African Investment Group S.A. Accordingly, this opinion nullifies the opinion dated March 20th 2017 on the consolidated financial statements of March 20th Comparative data Without qualifying our opinion, we would like to draw attention to Section of the Notes to the consolidated financial statements, which presents adjustments to the comparative data disclosed in the consolidated financial statements as at December 31st 2015 and for the financial year then ended, and as at January 1st In our audit of the consolidated financial statements, we performed audit procedures with respect to documents submitted to us by the Group, which were the basis for the adjustments. The documents, unknown to us during our audits for 2014 and 2015, contained information on the conditions and circumstances existing as at the date of the acquisition of a subsidiary and were available as the date of the final accounting for the acquisition of the subsidiary, presented in the consolidated financial statements prepared as at December 31st 2014 and for the financial year then ended. 2

4 Report on other legal and regulatory requirements Directors Report on the Group s operations The Management Board of the parent is responsible for the Directors Report on the Group s operations. Our opinion on the consolidated financial statements does not extend to the Directors Report on the Group s operations As required under the Accountancy Act and the Minister of Finance s Regulation on current and periodic information to be published by issuers of securities and conditions for recognition as equivalent of information whose disclosure is required under the laws of a non-member state, dated February 19th 2009 (Dz.U. of 2014, Item 133, as amended), we confirm that the Directors Report on the operations of the parent and the Group includes the information required by Art. 49 of the Accountancy Act and by the Regulation and that such information, in all material respects, is consistent with the consolidated financial statements. In addition, in the light of our knowledge of the Group and its environment obtained during our audit of the consolidated financial statements, we found the Directors Report to be free from any material misstatement. As required under the Accountancy Act and the Regulation, we confirm that the Statement of compliance with corporate governance principles, which is a separate part of the Directors Report on the operations of the parent and of the Grupa Azoty Zakłady Chemiczne Police Group, includes information required by Section (a, b, j and k) of the Regulation. We also confirm that, in all material aspects, the information included in the Statement of compliance with corporate governance principles, as required by Section (c, d, e, f, h and ) of the Regulation: was prepared in accordance with applicable laws and regulations; and is consistent with the consolidated financial statements. On behalf of KPMG Audyt Sp. z o.o. Reg. No. 458 ul. Inflancka 4A Warsaw, Poland [illegible signature] Monika Bartosiewicz Lead Auditor Reg. No Partner, Attorney April 26th

5 Grupa Azoty Zakłady Chemiczne Police Group Opinion and Report of the Independent Auditor Financial year ended December 31st KPMG Audyt Sp. z o.o. is a Polish limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved.

6 Contents 1. General Identification of the Group Name of the Group Registered office of the parent Registration of the parent in the business register of the National Court Register Management of the parent Identification of the lead auditor and the audit firm qualified to audit financial statements Identification of the lead auditor Identification of the audit firm Prior period consolidated financial statements Scope of the audit and responsibilities of the auditor 5 2. Financial analysis of the Group Summary analysis of the consolidated financial statements Consolidated statement of financial position Consolidated statement of profit or loss and other comprehensive income Selected financial ratios 9 3. Detailed report Accounting principles Basis of preparation Consolidation method Goodwill on consolidation Consolidation of equity and calculation of non-controlling interests Consolidation eliminations 11 2

7 1. General 1.1. Identification of the Group Name of the Group Grupa Azoty Zakłady Chemiczne Police Group Registered office of the parent ul. Kuźnicka Police, Poland Registration of the parent in the business register of the National Court Register Registry Court: District Court for Szczecin-Centrum in Szczecin, 13th Commercial Division of the National Court Register Date: May 29th 2011 Entry number: KRS Share capital as at the end of the reporting period: PLN 750,000, Management of the parent The Management Board is responsible for management of the parent. As at December 31st 2016, the Management Board of the parent was composed of: Wojciech Piotr Wardacki President of the Management Board, Włodzimierz Zasadzki Vice President of the Management Board, Tomasz Grzegorz Panas Vice President of the Management Board. In the period under review, the following changes were made to the composition of the parent s Management Board: - By Resolution No. 201A/I/16 of April 7th 2016, the Supervisory Board removed from office Krzysztof Jałosiński, President of the Management Board, - By Resolution No. 202A/I/16 of April 7th 2016, the Supervisory Board removed from office Wojciech Naruć, Vice President of the Management Board, - By Resolution No. 203A/I/16 of April 7th 2016, the Supervisory Board removed from office Anna Podolak, Vice President of the Management Board, - By Resolution No. 206A/I/16 of April 7th 2016, the Supervisory Board appointed Wojciech Wardacki as President of the Management Board, - By Resolution No. 207A/I/16 of April 7th 2016, the Supervisory Board appointed Tomasz Grzegorz Panas as Vice President of the Management Board, - By Resolution No. 208A/I/16 of April 7th 2016, the Supervisory Board appointed Anna Zarzycka-Rzepecka as Vice President of the Management Board. - By Resolution No. 232A/I/16 of June 27th 2016, the Supervisory Board removed from office Anna Zarzycka-Rzepecka, Vice President of the Management Board. 3

8 - By Resolution No. 233A/I/16 of June 27th 2016, the Supervisory Board appointed Artur Rzempała as Vice President of the Management Board, - By Resolution No. 6A/II/16 of July 15th 2016, the Supervisory Board removed from office Artur Rzempała, Vice President of the Management Board, - By Resolution No. 7A/II/16 of July 15th 2016, the Supervisory Board appointed Włodzimierz Zasadzki as Vice President of the Management Board, - By Resolution No. 34A/II/16 of November 14th 2016, the Supervisory Board removed from office Rafał Kuźmiczonek, Vice President of the Management Board, - By Resolution No. 56A/II/17 of March 3rd 2017, the Supervisory Board appointed Anna Tarocińska as Member of the Management Board Identification of the lead auditor and audit firm qualified to audit financial statements Identification of the lead auditor Full name: Monika Bartoszewicz Registration number: Identification of the audit firm Name: KPMG Audyt Sp. z o.o. Registered office: ul. Inflancka 4A, Warsaw, Poland National Court Register entry number: KRS Registry Court: District Court for the Capital City of Warsaw in Warsaw, 12th Commercial Division of the National Court Register Share capital: PLN 125,000 Tax Identification Number (NIP): KPMG Audyt Sp. z o.o. is entered in the register of audit firms maintained by the National Council of Statutory Auditors (Krajowa Rada Biegłych Rewidentów) under Reg. No Prior period consolidated financial statements The consolidated financial statements prepared at December 31st 2015 and for the financial year then ended were audited by KPMG Audyt Sp. z o.o. The auditor issued an unmodified opinion. The consolidated financial statements were approved by the Annual General Meeting of the parent on June 30th The consolidated financial statements were filed with the Registry Court on July 18th

9 1.4. Scope of the audit and responsibilities of the auditor The consolidated financial statements were audited under an agreement of June 23rd 2015 executed pursuant to the Supervisory Board s resolution of April 1st 2015 on the appointment of the auditor. We conducted our audit in accordance with Section 7 of the Accountancy Act of September 29th 1994 (Dz. U. of 2016, item 1047, as amended) (the Accountancy Act ) and the Polish Financial Auditing Standards compliant with the International Standards on Auditing and adopted by the National Council of Statutory Auditors by resolution of February 10th We audited the consolidated financial statements at the Group entities in the periods November 28th to December 2nd 2016, January 23rd to January 27th 2016, and January 30th to February 3rd The Management Board of the parent is responsible for the preparation of the consolidated financial statements so as to give a true and fair view in accordance with the International Financial Reporting Standards endorsed by the European Union and other applicable regulations. The Management Board of the parent is responsible for the Directors Report on the Group s operations. Our responsibility is to express an opinion and to prepare a report on the audit of the consolidated financial statements based on our audit. On the date of this report, the parent s Management Board made a statement that the attached financial statements give a true and fair view and that no events occurred which could have a material bearing on the data presented in the audited consolidated financial statements but were not disclosed in the statements. In the course of the audit of the consolidated financial statements, all required statements, explanations and information were provided to us by the Management Board of the parent on our request, and all documents and information necessary to express our opinion and prepare the report were made available to us. The scope of work planned and performed was not limited in any way. The method and scope of our audit are detailed in working documentation prepared by us and retained at the offices of the audit firm. The lead auditor and the audit firm meet the criteria of independence of the audited Group s entities, as defined in the Code of Ethics for Professional Accountants of the International Federation of Accountants adopted by the National Council of Statutory Auditors by resolution of June 13th 2011 ( IESBA Code ), and meet the impartiality and independence criteria defined in Art and Art of the Act on Qualified Auditors and their Self-Government, Entities Qualified to Audit Financial Statements and Public Supervision, dated May 7th 2009 (Dz.U. of 2016, item 1000, as amended) as well as other ethical requirements arising from the Act and the IESBA Code. 5

10 2. Financial analysis of the Group 2.1. Summary analysis of the consolidated financial statements Consolidated statement of financial position ASSETS Dec PLN 000 % of total assets Dec * PLN 000 Non-current assets Property, plant and equipment 1,293, ,059, Perpetual usufruct of land Intangible assets 97, , Investment property Investments in subordinated entities 28, , Other financial assets Deferred tax assets 49, , Other receivables Total non-current assets 1,483, ,242, Current assets Inventories 234, , Property rights 37, , Other financial assets 10, Derivatives Trade and other receivables 194, , Cash and cash equivalents 95, , Total current assets 575, , % of total assets TOTAL ASSETS 2,059, ,901, EQUITY AND LIABILITIES Dec Dec * PLN 000 PLN 000 % of equity and liabilities Equity Share capital 750, , Translation reserve (2387) 0.1 (1815) 0.1 Retained earnings, including profit for the period 348, , Equity attributable to owners of the parent 1,095, ,011, Non-controlling interests (21,540) 1.0 (7839) 0.4 % of equity and liabilities Total equity 1,074, ,003, Non-current liabilities Borrowings 290, , Other financial liabilities Employee benefit obligations 65, , Grants 17, , Provisions 42, , Trade and other payables Total non-current liabilities 421, ,

11 Current liabilities Borrowings 74, , Other financial liabilities Employee benefit obligations Current tax expense Trade and other payables 457, , Provisions Grants Total current liabilities 564, , Total liabilities 985, , TOTAL EQUITY AND LIABILITIES 2,059, ,901, * restated 7

12 Consolidated statement of profit or loss and other comprehensive income Jan 1 Dec PLN 000 % of revenue Jan 1 Dec PLN 000 % of revenue Revenue 2,416, ,741, Cost of sales (1,997,325) 82.6 (2,252,587) 82.2 Gross profit 419, , Other income 14, , Selling and distribution expenses (116,092) 4.8 (97,560) 3.6 Administrative expenses (180,687) 7.5 (184,668) 6.7 Other expenses (38,357) 1.6 (19,727) 0.7 Operating profit 99, , Finance income Finance costs (17,301) 0.7 (18,496) 0.7 Net finance income/(costs) (14,571) 0.6 (16,696) 0.6 Share of profit of equity-accounted 11, , associates Profit before tax 96, , Income tax (26,883) 1.1 (1184) 1.5 Net profit for the year 69, , OTHER COMPREHENSIVE INCOME Remeasurement of defined benefit obligation (3320) 0.1 (1184) 0.0 Income tax on other comprehensive income Exchange differences on translating foreign operations (1108) 0.0 (339) 0.0 Total other comprehensive income (3821) 0.2 (1315) 0.0 Total profit or loss and other comprehensive income 65, , Net profit attributable to: Owners of the parent 87, ,455 Non-controlling interests (18,165) (7295) Total profit or loss and other comprehensive income attributable to: Owners of the parent 84, ,217 Non-controlling interests (18,658) (7372) Earnings per share Basic (PLN) Diluted (PLN) *restated 8

13 2.2. Selected financial ratios * 1. Net margin 2.9% 5.5% net profit x 100% revenue 2. Return on equity net profit x 100% 6.9% 17.7% equity - profit for the year 3. Average collection period average trade receivables (gross) x 365 days 26 days 26 days 4. Debt ratio liabilities x 100% 47.9% 47.2% total equity and liabilities 5. Liquidity ratio current assets current liabilities *restated Current assets do not include trade receivables due in more than 12 months. Current liabilities include short-term provisions for liabilities, current liabilities (excluding trade payables maturing in more than 12 months) and other short-term accruals. Revenue includes revenue from sale of products, merchandise and materials. Average trade receivables (gross) is an arithmetical mean of trade receivables at the beginning and end of the reporting period, before impairment losses. 9

14 3. Detailed report 3.1. Accounting policies The parent maintains current documentation describing the accounting policies applied by the Group and adopted by the parent s Management Board. The accounting policies are described in the notes to the consolidated financial statements to the extent required by the International Financial Reporting Standards endorsed by the European Union. Group companies apply the same accounting policies as the parent. The financial statements of the entities included in the consolidated financial statements were prepared as at the end of the same reporting period as the financial statements of the parent Basis of preparation The consolidated financial statements of the Grupa Azoty Zakłady Chemiczne Police Group were prepared in accordance with the International Financial Reporting Standards as endorsed by the European Union and other applicable regulations. The consolidated financial statements were prepared on the basis of the consolidation documentation prepared in accordance with the requirements of the Regulation of the Minister of Finance on detailed rules for the preparation of consolidated financial statements by entities other than banks, insurance companies and reinsurance companies, dated September 25th 2009 (Dz.U. of 2009, No. 169, item 1327, as amended) Consolidation method The consolidation method is described in Note 2.8 to the consolidated financial statements Goodwill on consolidation The method applied to calculate goodwill on consolidation is described in Note to the consolidated financial statements Consolidation of equity and calculation of non-controlling interests The share capital of the Group is the share capital of the parent. Other components of the Group s equity were calculated by adding the individual equity components of the subsidiaries included in the consolidated financial statements to the corresponding components of the parent s equity in the proportion reflecting the parent s share in the subsidiaries equity as at the end of the reporting period. Only those parts of the corresponding components of subsidiaries equity that arose after the parent obtained control of the subsidiary are included in the Group s equity. Non-controlling interests in the subsidiaries included in the consolidated financial statements were determined based on the non-controlling interests share in the subsidiaries equity as at the end of the reporting period. 10

15 3.6. Consolidation eliminations Intercompany balances within the Group were eliminated on consolidation. Sales between the Group entities and intercompany other income and expenses and intercompany finance income and costs were eliminated on consolidation. The consolidation eliminations were based on the accounting records of Grupa Azoty Zakłady Chemiczne Police S.A. and verified against the information received from the subsidiaries. On behalf of KPMG Audyt Sp. z o.o. Reg. No. 458 ul. Inflancka 4A Warsaw, Poland [illegible signature] Monika Bartosiewicz Lead Auditor Reg. No Partner, Attorney April 26th