Datawalk S.A. — Audit Report / Information 2022

Apr 13, 2023

Raport An independent member of UHY international Helping you prosper DATA WALK CAPITAL GROUP. ECA S.A. INDEPENDENT STATUTORY AUDITOR’S REPORT ON THE AUDIT OF THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2022 (UNAUTHORISED TRANSLATION FROM THE POLISH LANGUAGE) 13.04.2023 2 Helping you prosper INDEPENDENT STATUTORY AUDITOR’S REPORT For the General Meeting and Supervisory Board of DataWalk S.A. Report on the Audit on the annual consolidated financial statements Opinion We have audited the annual consolidated financial statements of DATAWALK Capital Group (the ‘Group’), in which the parent company is DataWalk S.A. (the ‘Parent Company’) which comprise the consolidated statement of financial position as at December, 31 2022 and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statement, including a summary of significant accounting policies (the ‘consolidated financial statement’). In our opinion, the accompanying consolidated financial statements: • give a true and fair view of the consolidated financial position of the Group as at December 31, 2022 and its consolidated financial performance and its consolidated cash flows for the financial year then ended in accordance with required applicable rules of International Financial Reporting Standards approved by the European Union (IFRSs) and applied accounting principles (policy). • are in respect of the form and content in accordance with legal regulations governing the Group and the Parent Company’s Statute. This opinion is consistent with the additional report to the Audit Committee issued on 13 April 2023. 3 Helping you prosper Basis for opinion We conducted our audit in accordance with the National Auditing Standards in the version of the International Auditing Standards adopted by Resolution No. 3430/52a/2019 of the National Council of Statutory Auditors of March 21, 2019 on national auditing standards and other documents, as amended (“NAS”), as well as pursuant to the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Supervision (“Act on Statutory Auditors” – Journal of Laws of 2022, item 1302, as amended) and EU Regulation No. 537/2014 of April 16, 2014 on specific requirements regarding statutory audit of public interest entities (“EU Regulation” – Official Journal of the European Union UE L158 z 27.05.2014, p. 77, as amended). Our responsibilities under those standards is further described in the Auditor’s responsibility for the audit of the consolidated financial statements section of our report. We are independent of the Group companies in accordance with the International Ethics Standards Board for Accountants (including International Standards of Independence) of the Code of Ethics for Professional Accountants (the ‘IESBA Code”) adopted by resolution of the National Council of Statutory Auditors No. 3431/52a/2019 of March 25, 2019 on the principles of professional ethics of statutory auditors as amended, and with other ethical requirements that are relevant to our 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 in the EU Regulation. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Emphasis of Matter We draw attention to the information contained in the Management Report on the activities of the DataWalk Group and DataWalk S.A. in the chapter "Description of significant risks and threats", in which the Management Board informs about the possibility of, among other things, liquidity and financial performance risks. The Group does not generate revenues at a level that would allow it to cover its operating costs. In the opinion of the parent company's Management Board, the Group's development to date is close to the original assumptions. It cannot be ruled out that due to the occurrence of unforeseen costs or an unforeseen reduction in the rate of acquiring customers and revenues, increasing the need for financing each time, the Group's financial situation will significantly deviate from the assumptions, which may have a negative impact on the Group's operations, development prospects, financial position or results. 4 Helping you prosper 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 include the most significant assessed risks of material misstatement, including 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 have summarised 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 Matters How the matter was addressed in our audit Development work In the consolidated financial statements, the Group recognises costs of completed development work of TPLN 17,083 and costs of development work in progress of TPLN 2,447, representing a total of 17.66% of the balance sheet total as at 31.12.2022. Details of the capitalisation of development expenditures and development expenditures in progress (including information on the results of the impairment test performed) are described in Notes 2.1, 2.2, 2.3, 2.4 to the consolidated financial statements, and with regard to accounting policy are described in the notes to the consolidated financial statements. The issue was considered to be a key audit matter due to the scale of the work carried out, its impact on the Group's operations and the materiality of the amounts involved, as well as the fact that the manner in which they are recognised in the consolidated financial statements requires significant management judgement. Our procedures for the identified key issues of the audit included, but were not limited to: • understanding and assessing the process for identifying, accepting and classifying development expenditure as an intangible asset, • verification of the Group's accounting policy compliance with IAS 38, • detailed assurance testing of the correct allocation of development expenditure, • assessment of the prepared impairment test in terms of mathematical correctness, reasonableness of the key parameters adopted by the Group, compliance of the financial projections with the approved financial plan and sensitivity of the test to a change in the assumed level of cash flows and the discount rate, • discussion with the Parent Company's Management Board and other authorised persons of the key assumptions included in the impairment test, • analysis of the disclosures included in the consolidated financial statements in relation to completed development work and development expenditure in progress. Sales revenue Our procedures for addressing the key risks identified included: 5 Helping you prosper The procedures we carried out at the stage of getting to know the Group and the analysis of the data resulted in us assigning risks to the recognition and recognition of sales revenue. The risk of incorrect revenue recognition may arise in particular from fraudulent recognition of revenue from the sale of products and services in the wrong period. Disclosures regarding details of revenue items are presented in Notes 24.1, 24.2, 24.3 and 24.4 to the consolidated financial statements, and regarding accounting policies are described in the notes to the consolidated financial statements. The issue was considered to be a key audit matter due to the materiality of the amounts and the fact that the manner in which revenue is recognised and recognised in the consolidated financial statements requires significant estimates and management judgement. • reviewing the accounting policies in the revenue recognition section and assessing the compliance of these policies with IFRS 15, • understanding of the sales process and the correctness of the design and implementation of the internal control system in this area, • analytical procedures consisting in particular of the analysis of monthly data and trends, • detailed plausibility checks on sales recognised during the year based on a selected sample, • verification of a sample of transactions from December 2022/January 2023 and independent assessment of the correctness of revenue recognition to the source documents for the transactions, • confirmation of receivables balances on a selected sample of counterparties as at the balance sheet date, • analysis of unusual transactions and revenue adjustments made after the balance sheet date Responsibility of the Parent Company’s Management and members Supervisory Board for the consolidated financial statements The Parent Company’s Management is responsible for the preparation the consolidated financial statements that give a true and fair view of the consolidated financial position and the consolidated financial performance in accordance with required applicable rules of International Financial Reporting Standards approved by the European Union, the adopted accounting policies, other applicable laws, as well as the Parent Company’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 Parent Company's Management is responsible for assessing the Group's (the Parent 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 Parent Company's Management either intends to liquidate the Group (the Parent Company and significant components) or to cease operations, or has no realistic alternative but to do so. 6 Helping you prosper The Parent Company’s Management and members of the Parent Company’s Supervisory Board are required to ensure that the consolidated financial statements meets the requirements of the Accounting Act. The members of the Parent Company’s Supervisory Board are responsible for overseeing the Group's financial reporting process. Auditor’s responsibility for audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements s 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 NAS 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 the audit does not include assurance as to the future profitability of the Group nor effectiveness of conducting business matters now and in the future by the Parent Company’s Management. As part of an audit in accordance with NAS, we exercise professional judgment and maintain professional scepticism throughout the audit 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 Parent Company’s Management, • conclude on the appropriateness of the Parent Company’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 7 Helping you prosper 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 of the Parent Company 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 to the Audit Committee of the Parent Company 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 the Audit Committee, we determine those matters that were of most significance in the audit of the consolidated 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 Group Activity Report The Other information comprise Group Activity Report as at December 31, 2022 (the “Group Activity Report”) together with the representation on the corporate governance, which is separate elements of this Report, and the Annual Report for the financial year ended December 31, 2022 (“Annual Report”) (together with “Other Information”). Responsibility of the Parent Company’s Management and Supervisory Board The Parent Company’s Management is responsible for preparing the Other Information in accordance with the law. 8 Helping you prosper The Parent Company’s Management and members of the Parent Company’s Supervisory Board are required are required to ensure that the Group Activity Report along with separate elements meets the requirements of the Accounting Act. Auditor's responsibility Our audit opinion on the consolidated financial statements does not include the Other Information. In connection with the audit of the consolidated financial statements, our responsibility is to read the Other Information and, in doing so, to consider whether the Other Information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the audit or otherwise appears materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement in this Other Information, we are required required to report that fact in independent auditor’s report. Our responsibility in accordance with the Act on Statutory Auditors is also to issue an opinion on whether the Other Information was prepared in accordance with relevant laws and that it is consistent with the information contained in the consolidated financial statements. Moreover, we are required to issue an opinion on whether the Group has included the required information in the representation on application of corporate governance. We obtained the Other Information before the date of this audit report and the Annual Report will be available after that date. In the event that we identify a material misstatement in the Annual Report, we are required to inform the Parent Company's Supervisory Board. Opinion on the Group Activity Report Based on the work performed during our audit, in our opinion, the Group Activity Report: • has been prepared in accordance with Article 49 of the Accounting Act and section 70 of the Decree of the Minister of Finance of March 29, 2018 on current and periodic information published by issuers of securities and conditions for recognising as equivalent information required by the laws of non-EU member state (‘Decree on current and periodic information’ – Journal of Laws of 2018, item 757 as amended); • is consistent with the information contained in the consolidated financial statement. Moreover, based on our knowledge of the Group and its environment obtained during our audit, we have not identified material misstatements in the in the Group Activity Report. 9 Helping you prosper Opinion on the corporate governance representation In our opinion, the representation on application of corporate governance, the Group has included stipulated in paragraph 70, section 6, point 5 of the Decree on current and periodic information. Furthermore, 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. Report on other legal and regulatory requirements 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 statement, 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 December 31, 2022 prepared in the single electronic reporting format including in the file named [DAT_2022-12-31_pl] (“consolidated financial statements in ESEF format”), was tagged in accordance with the regulations specified in Commission Delegated Regulation (EU) No 2019/815 of December 17, 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to regulatory technical standards on the specifications of a single electronic reporting format ( Official Journal of the European Union UE L 143 z 29.05.2019, p. 1, as amended) (the “ESEF Regulation”). Identification of criteria and description of the object of the service The consolidated Financial Statement in ESEF format were prepared by the Management Board of Parent Company in order to meet the tagging and technical requirements of the single electronic reporting format which are specified in the ESEF Regulation. The subject matter of our assurance engagement is the compliance verification of the consolidated financial statements in ESEF format against the requirements of the ESEF Regulations, while the requirements specified in these regulations represent, in our opinion, applicable criteria for us to express an opinion providing reasonable assurance. Responsibility of the Parent Company’s Management and Supervisory Board The Parent Company’s Management is responsible for preparing of the consolidated financial statements in ESEF format in accordance with the tagging and technical requirements of a single electronic reporting format which are specified in the ESEF Regulation. Such responsibility includes the selection and application of appropriate XBRL tags using the taxonomy specified in these regulations. 10 Helping you prosper Responsibility of the Parent company’s Management also includes designing, implementing and maintaining of such internal control as determined is necessary to enable the preparation of the consolidated financial statements in ESEF format, free from material non-compliance with the requirements of the ESEF Regulation. The members of the Parent Company’s Supervisory Board are responsible for overseeing the financial reporting process, which includes the preparation of financial statements in compliance with the form in accordance with the governing legal regulations. Auditor’s responsibility Our objective was to express an opinion, based on the performed assurance engagement, providing reasonable assurance, that the consolidated financial statements in ESEF format was tagged in accordance with the ESEF requirements. We have performed our assurance engagement in accordance with the National Standard for Assurance Engagements Other than Audit and Review 3001PL - “Audit of Financial Statements Prepared in Single Electronic Reporting Format” adopted by resolution of the National Council of Statutory Auditors No. 1975/32a/2021 dated December 17, 2021 (hereinafter: “NSAE 3001PL”) and, where applicable, in accordance with the National Standard on Assurance Engagements Other than Audit and Review 3000 (R) as set out in International Standard on Assurance Engagements 3000 (Revised) - “Assurance Engagements Other than Audits or Reviews of Historical Financial Information” adopted by Resolution of the National Council of Statutory Auditors No. 3436/52e/2019 of April 8, 2019, as amended (hereinafter: „NSAE 3000 (R)”). This standard requires the auditor to plan and perform procedures 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 NSAE 3001PL and, where appropriate, in accordance with NSAE 3000 (R), will always detect material misstatement when it exists. The selection of procedures depends on the auditor’s professional judgement, including the assessment of risk of material misstatement due to fraud or error. When performing risk assessments, 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 Parent Company’s internal control.. Summary of performed procedures Procedures that were designed and performed by us included among others: 11 Helping you prosper • obtaining an understanding of the process of preparation of the consolidated financial statements in ESEF format, including the Parent Company’s process of selection and application of XBRL tags and maintaining compliance with the ESEF Regulation,`including an understanding of the internal control system mechanisms associated with this process; • obtaining sufficient and appropriate evidence related to the operational effectiveness of controls, related to XBRL-tagging, when (if, where) as part of the risk assessment process we considered that procedures other than testing of controls would not provide sufficient audit evidence; • reconciliation of the tagged [on a selected sample] information included in the consolidated financial statements in ESEF format to the audited consolidated financial statement; • 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 specialistc IT tools, assessing the completeness of tagging the 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 Regulation 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 on the tagging compliance with the requirements of the ESEF Regulation. 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. As required by national quality control standards, the audit firm has designed, implemented and applied a quality management system, including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Opinion on compliance with the requirements of the ESEF Regulation The matters described above constitute the basis for our opinion which is why our opinion should be read in conjunction with these matters.. 12 Helping you prosper In our opinion, the consolidated financial statements in ESEF format was prepared in all material respect in accordance with the requirements of the ESEF Regulations. Representation on the provision of non-audit services To the best or our knowledge and belief, we declare that we have not provided services other than audits of the financial statements to the Parent Company and its subsidiaries, in particular we have not rendered services other than audits, which are prohibited based on article 5 item 1 of Regulation 537/2014 and article 136 of the Act on Statutory Auditors. The services other than audits of the financial statements that we provided to the Parent Company and its subsidiaries during the period under review are listed in note "Provision of permitted services by the Auditor that are not an audit of the Directors' Report on the activities of the DataWalk Group and DataWalk S.A.". Selection of the audit firm We were appointed to audit the consolidated financial statements of the Group initially based on the resolution of Parent Company’s Supervisory Board from 04 March 2022. 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 5 consecutive years. The engagement partner responsible for the audit resulting in this independent auditor’s report is Paweł Mróz ........................................................ no in the register: 12600 acting on behalf of UHY ECA Audyt Spółka z ograniczoną odpowiedzialnością Sp. k. of Warsaw, Poland, entered into the list of audit firms under entry No. 3115 on behalf of which the key auditor has audited the financial statements. This document is a foreign language version of the original Independent Auditor’s Report issued in Polish version and only the original version is binding. This document has been prepared for information purposes and could be used only for Group’s internal purposes. In case of any discrepancies between the Polish and English version, the Polish version shall prevail. Wroclaw, 13.04.2023