TRANSLATORS’ EXPLANATORY NOTE
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
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auditor’s
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in
Polish
and
in
accordance
with
Polish
legislation
and
the
accounting
principles
and
practices generally adopted in Poland.
The
accompanying
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the
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principles
generally
accepted
in
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countries
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adopted
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extent
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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 0000750050, NIP 526-021-02-28. The seat of the Company is in Warsaw at Polna 11 str.
Independent Registered Auditor’s Report
To the General Shareholders’ Meeting and the Supervisory Board of PKO Bank Hipoteczny S.A.
Report on the audit of annual financial statements
Our opinion
In our opinion, the accompanying annual financial statements:
•
give a true and fair view of the financial position of PKO Bank Hipoteczny S.A. (the “Bank”) as at
31 December 2023 and the Bank’s financial performance and the 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 Bank and the Bank’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”).
Our opinion is consistent with our additional report to the Audit Committee issued on the date of this
report.
We have audited the annual financial statements of PKO Bank Hipoteczny S.A. which comprise:
•
the statement of financial position as at 31 December 2023;
and the following prepared for the financial year ended on that date;
•
the statement of comprehensive income;
•
the statement of changes in equity;
•
the cash flows statement, and
•
the notes comprising a description of the significant adopted accounting policies and other
explanations
.
We conducted our audit in accordance with the
National Standards on Auditing in the wording of the
International Standards on Auditing as adopted by the resolution of the National Council of Statutory
Auditors (“NSA”) and pursuant to the Law of 11 May 2017 on Registered Auditors, Registered Audit
characteristics that not yet included in
models;
•
high degree of uncertainty associated with
an estimate of the allowance for the
expected credit losses;
•
comprehensiveness of audit procedures
and the evidence of the study due to the
level of complexity calculations and
amount of data used to estimate
allowances for expected credit losses.
Note 27 Expected credit losses, Note 26 Loans
and advances to customers and Note 45.2
Allowances for expected credit losses in the
financial statements includes detailed information
on the methods and models used and the level of
expected credit losses for loans and advances to
customers.
scenarios and adopted probability of
occurrence of individual scenarios;
•
analysis of model adaptation to the
current conditions;
•
independent tests of credit risk
parameters;
•
verification of the correctness of the
assignment credit exposure to stages
according to IFRS 9 on a selected sample
of contracts.
In addition, we have done the following
procedures:
•
we have reconciled selected inputs used
to determine default parameters and
estimate expected credit losses;
•
we have recalculated the expected credit
losses based on the assumptions adopted
by the Bank;
•
we have performed analytical procedures
in the scope of covering the loans portfolio
with expected credit losses and their
changes in 2023 and transferring
exposures between the stages during
2023;
•
we analysed the results of the analysis
prepared by the Bank’s Management
Board of the sensitivity of the level of
allowances for expected credit losses as a
result of deterioration or improvement risk
parameters.
We also assessed the completeness and
adequacy of disclosures in the financial
statements in accordance with the accounting
standards applicable to the Bank.
Responsibility of the Management and Supervisory Board for the financial
statements
The Management Board of the Bank is responsible for the preparation, based on the properly
maintained books of account of the annual financial statements that give a true and fair view of the
Bank’s financial position and results of operations, in accordance with International Financial
Reporting Standards as adopted by the European Union, the adopted accounting policies, the
applicable laws and the Bank’s Articles of Association, and for such internal control as the
Management Board determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
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, 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 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 comprises:
•
a PKO Bank Hipoteczny Directors’ Report for 2023 (“the Report on the operations”) and the
corporate governance statement which is separate part of the Report on the operations,
•
other documents comprising the Annual Report for the financial year ended 31 December
2023 (“the Annual Report”)
(together “Other information”).
Other information does not include the financial statements and our auditor’s report thereon.
Responsibility of the Management and Supervisory Board
The Management Board of the Bank is responsible for the preparation of the Other Information in
accordance with the law.
The Bank’s Management Board and the members of the Supervisory Board are obliged to ensure that
the Report on the operations of the Bank including its separate parts complies with the requirements
of the Accounting Act.
Registered auditor’s responsibility
Our opinion on the financial statements does not cover the Other Information.
In connection with our audit of the financial statements, our responsibility is to read the Other
Information and, in doing so, consider whether the Other Information 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 the
Other Information, we are obliged to inform about it in our audit report. In accordance with the
requirements of the Law 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, and
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 Banking Law of 29 August 1997 (“the Banking Law”).
Moreover, we are obliged to issue an opinion on whether the Bank provided the required information
in its corporate governance statement.
Statement on the Other information
We declare, based on the knowledge of the Bank and its environment obtained during our audit, that
we have not identified any material misstatements in the Report on the operations and the remaining
Other information.
Opinion on the Report on the operations
Based on the work we carried out during our audit, in our opinion, the Report on the operations of the
Bank:
•
has been prepared in accordance with the requirements of Article 49 of the Accounting Act and
para. 70 of the Regulation of the Minister of Finance dated 29 March 2018 on current and
periodical information submitted by issuers of securities and conditions for considering as
equivalent the information required under the legislation of a non-Member State (“Regulation on
current information”) and Article 111(1–2) of the Banking Law;
•
is consistent with the information in the financial statements.
Opinion on the corporate governance statement
In our opinion, in its corporate governance statement, the Bank 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.
Report on other legal and regulatory requirements
Information on compliance with prudential regulations
The Management Board of the Bank is responsible for complying with the applicable prudential
regulations set out in separate legislation, and in particular, for correct determination of the capital
ratios.
The capital ratios as at 31 December 2023 have been presented in Note 57 of the financial statements
and include Common Equity Tier 1 capital ratio, Tier 1 capital ratio and the total capital ratio.
We are obliged to inform in our report on the audit of the financial statements whether the Bank has
complied with the applicable prudential regulations set out in separate legislation, and in particular,
whether the Bank has correctly determined its capital ratios. For the purposes of the said information,
the following legal acts are understood as separate legislation: Regulation (EU) no. 575/2013 of the
European Parliament and of the Council of 26 June 2013 on prudential requirements for credit
institutions and investment firms and amending Regulation (EU) No 648/2012, as amended (“CRR”),
the Banking Law and the Act of 5 August 2015 on macro-prudential supervision over the financial
system and on crisis management in the financial system (“the Act on macro-prudential supervision”).
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 Bank with the applicable prudential regulations set out in
separate legislation referred to above, in the period from 1 January to 31 December 2023;
•
any irregularities in the determination by the Bank of the capital ratios as at 31 December 2023 in
accordance with the 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 Bank and Bank’s Parent Company are in accordance with the applicable laws and regulations 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 Law on Registered Auditors.
The non-audit services which we have provided to the Bank during the audited period are disclosed in
the Report on the Bank’s operations.
We were first appointed to audit the annual financial statements of the Bank by resolution of the
Supervisory Board dated 27 February 2019 and re-appointed by resolution dated 29 October 2021.
We have been auditing the Bank’s financial statements without interruption since the financial year
ended 31 December 2020, i.e. for four consecutive 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.
Agnieszka Accordi
Warsaw, 28 February 202
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