Datawalk S.A. — Audit Report / Information 2022

Apr 13, 2023

Raport An independent member of UHY international Helping you prosper DATA WALK S.A.. A. CA S.A. INDEPENDENT STATUTORY AUDITOR’S REPORT ON THE AUDIT OF THE ANNUAL SEPARATE FINANCIAL STATEMENT 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 separate financial statement Opinion We have audited the annual separate financial statements of DataWalk S.A. (the ‘Company’), which comprise the separate statement of financial position as at December, 31 2022 and the separate statement of comprehensive income, separate statement of changes in equity and separate statement of cash flows for the year then ended, and notes to the separate financial statement, including a summary of significant accounting policies (the ‘separate financial statement’). In our opinion, the accompanying separate financial statement: • give a true and fair view of the separate financial position of the Company as at December 31, 2022 and its separate financial performance and its separate 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). • is in respect of the form and content in accordance with legal regulations governing the Company and the Company’s Statute; • has been prepared based of properly maintained accounting records in accordance with the chapter 2 of the Accounting Act dated September 29, 1994 (“the Accounting Act” – i.e. Journal of Laws of 2023, item 120 as amended). This opinion is consistent with the additional report to the Audit Committee issued on 13.04.2023. 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 separate financial statement section of our report. We are independent of the Company 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 Company 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 Company does not generate revenues at a level that would allow it to cover its operating costs. In the Management Board's opinion, the Company'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 decrease in the rate of acquiring customers and revenues, increasing each time the need for financing, the financial situation of the Company will significantly deviate from the assumptions, which may have a negative impact on the Company'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 separate 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 separate 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 The Company is working on the development of information technology relating to a business asset understood as the DataWalk platform. In the separate financial statements, the Company reports costs of completed development work of TPLN 17,083 and costs of development work in progress of TPLN 2,447, representing a total of 22.65% 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 separate financial statements, and with regard to accounting policy are described in the notes to the separate financial statements. The issue was considered to be a key audit matter due to the scale of the work in progress, its impact on the Company's operations and the materiality of the amounts involved, as well as the fact that the manner of their recognition in the separate 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 compliance of the Company's accounting policy with IAS 38, - detailed reliability testing of the correct allocation of development expenditures, - assessment of the prepared impairment test in terms of mathematical correctness, reasonableness of the key parameters adopted by the Company, compliance of the financial projections with the approved financial plan and sensitivity of the test to changes in the assumed level of cash flows and discount rate, - discussion with the Company's Management Board and other authorised persons of the key assumptions included in the impairment test, - analysis of the disclosures included in the separate financial statements in relation to completed development work and development expenditure in progress. 5 Helping you prosper Sales revenue The procedures we carried out at the stage of getting to know the entity 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 separate financial statements, and regarding accounting policies are described in the notes to the separate financial statements. The issue was considered a key audit matter due to the materiality of the amounts and the fact that the manner in which revenue is recognised and disclosed in the separate financial statements requires significant estimates and management judgement. Our procedures for addressing the key risks identified included: • 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. The assurance testing performed, combined with the assessment of the internal control environment, provided us with sufficient and appropriate audit evidence necessary to address the revenue recognition risks described. Responsibility of the Company’s Management and members Supervisory Board for the separate financial statement The Company’s Management is responsible for the preparation the separate financial statements that give a true and fair view of the separate financial position and the separate 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 Company’s Statute, and is also responsible for such internal control as determined is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error. In preparing the separate financial statements, the Company's Management 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 Company's Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. 6 Helping you prosper The Company’s Management and members of the Supervisory Board are required to ensure that the separate financial statements meets the requirements of the Accounting Act. The members of the Supervisory Board are responsible for overseeing the Company's financial reporting process. Auditor’s responsibility for audit of the separate financial statement Our objectives are to obtain reasonable assurance about whether the separate financial statement 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 separate financial statement. The scope of the audit does not include assurance as to the future profitability of the Company nor effectiveness of conducting business matters now and in the future by the 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 separate 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 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, • conclude on the appropriateness of the 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 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 independent auditor’s report to the related disclosures in the separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to 7 Helping you prosper the date of our independent 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 separate financial statements, including the disclosures, and whether the separate 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 to 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 the Audit Committee, we determine those matters that were of most significance in the audit of the separate 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 Company Activity Report The Other information comprise Company Activity Report as at December 31, 2022 (the “Company Activity Report”) together with the representation on the corporate governance, which are 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 Company’s Management and Supervisory Board The Company’s Management is responsible for preparing the Other Information in accordance with the law. The Company’s Management and members of the Supervisory Board are required are required to ensure that the Company Activity Report along with separate element meets the requirements of the Accounting Act. 8 Helping you prosper Auditor's responsibility Our audit opinion on the separate financial statement does not include the Other Information. In connection with the audit of the separate 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 separate financial statement 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 separate financial statements. Moreover, we are required to issue an opinion on whether the Company has included the required 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 Company's Supervisory Board. Opinion on the Company Activity Report Based on the work performed during our audit, in our opinion, the Company 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 separate financial statement. Moreover, based on our knowledge of the Company and its environment obtained during our audit, we have not identified material misstatements in the in the Company Activity Report. 9 Helping you prosper Opinion on the corporate governance representation In our opinion, the representation on application of corporate governance, the Company 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 separate financial statements. Report on other legal and regulatory requirements 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 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 non-audit services that we provided to the Company and its subsidiaries during the period under review are listed in the "Auditor's provision of permitted non-audit services" note of the Company's Directors' Report. Selection of the audit firm We were appointed to audit the separate financial statements of the Company initially based on the resolution of Supervisory Board from 04 March 2023. The separate financial statements of the Company have been audited by us uninterruptedly starting from the financial year ended on 31 December 2015, i.e. for the past 8 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. 10 Helping you prosper 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 company’s internal purposes. In case of any discrepancies between the Polish and English version, the Polish version shall prevail. Wroclaw, 13.04.2023.