Gatgroup AUGA GROUP, AB
Total Page:16
File Type:pdf, Size:1020Kb
au gaTGroup AUGA GROUP, AB Independent Auditor’s Report, Consolidated Annual Report and Consolidated and Separate Financial Statements for the Year Ended 31 December 2019 AUGA GROUP AB Konstitucijos av. 21C, Quadrum North, LT-08130, Vilnius, Lithuania TABLE OF CONTENTS I. INDEPENDENT AUDITOR’S REPORT .................................................................................................. 3 II. CONSOLIDATED ANNUAL REPORT ...................................................................................................12 III. CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS ...............................................................39 Balance sheet ......................................................................................................................................39 Income statement and statement of other comprehensive income .............................................................40 Statement of changes in equity ..............................................................................................................41 Consolidated statement of cash flows .....................................................................................................43 Explanatory notes ................................................................................................................................44 ANNEX NO. 1. DISCLOSURE CONCERNING OF COMPLIANCE WITH THE GOVERNANCE CODE ANNEX NO. 2. SUSTAINABILITY REPORT 2 Independent auditor’s report To the shareholders of AUGA group AB Report on the audit of the separate and consolidated financial statements Our opinion In our opinion, the separate and consolidated financial statements give a true and fair view of the separate and consolidated financial position of AUGA group AB (“the Company”) and its subsidiaries (together “the Group”) as at 31 December 2019, and of their separate and consolidated financial performance and their separate and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union. Our opinion is consistent with our additional report to the Audit Committee dated 10 April 2020. What we have audited The Company’s and the Group’s separate and consolidated financial statements comprise: • the separate and consolidated balance sheet as at 31 December 2019; • the separate and consolidated income statement and statement of other comprehensive income for the year then ended; • the separate and consolidated statement of changes in equity for the year then ended; • the separate and consolidated statement of cash flows for the year then ended; and • the notes to the separate and consolidated financial statements, which include significant accounting policies and other explanatory information. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards 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 and the Group in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) and the Law of the Republic of Lithuania on the Audit of Financial Statements that are relevant to our audit of the separate and consolidated financial statements in the Republic of Lithuania. We have fulfilled our other ethical responsibilities in accordance with the IESBA Code and the Law of the Republic of Lithuania on the Audit of Financial Statements. To the best of our knowledge and belief, we declare that non-audit services that we have provided to the Company and the Group are in accordance with the applicable law and regulations in the Republic of Lithuania and that we have not provided non-audit services that are prohibited under Article 5(1) of Regulation (EU) No 537/2014 considering the exemptions of Regulation (EU) No 537/2014 endorsed in the Law of the Republic of Lithuania on the Audit of Financial Statements. PricewaterhouseCoopers UAB, J. Jasinskio g. 16B, 03163 Vilnius, Lithuania +370 (5) 239 2300, [email protected], www.pwc.lt Company code 111473315, is a private company registered with the Legal Entities’ Register of the Republic of Lithuania. The non-audit services that we have provided to the Company and the Group, in the period from 1 January 2019 to 31 December 2019, are disclosed in the Note 23 to the separate and consolidated financial statements. Our audit approach Overview • Overall Company materiality is EUR 603 thousand (2018: EUR 470 thousand), • Overall Group materiality is EUR 711 thousand (2018: EUR 548 thousand) Materiality • We conducted our audit work at 3 significant reporting units, all located in Lithuania. Group scoping • Our audit addressed substantially all of the Group’s revenues and assets. Key audit matters • Valuation of land • Valuation biological assets and agricultural produce • Completeness and accuracy of lease agreements and adoption of IFRS 16 As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the separate and consolidated financial statements (together “the financial statements”). In particular, we considered where management made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, 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 our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements 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 Company and Group materiality for the separate and consolidated financial statements as a whole as set out in the table below. These, 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, if any, both individually and in aggregate on the financial statements as a whole. Overall Company materiality EUR 603 thousand (2018: EUR 470 thousand) Overall Group materiality EUR 711 thousand (2018: EUR 548 thousand) How we determined it Overall Company materiality was determined as 0.7% of the Company’s net assets. Overall Group materiality was determined as 1% of the Group’s total revenue. Rationale for the materiality We chose net assets as the benchmark for overall Company benchmark applied materiality because, in our view, it is the most appropriate measure for the Company as a holding company with no external income. We chose total revenue as the benchmark for overall Group materiality because total revenue is one of the Group’s key performance indicators analysed by the management and communicated to the shareholders. Total revenue is also a more stable measure compared to profitability ratio, as it does not depend directly on such external factors as the EU’s farming subsidy policy. We chose to apply 0.7% of net assets to overall Company materiality and 1% of total revenue to overall Group materiality, which are within the range of acceptable quantitative materiality thresholds for these benchmarks. We agreed with the Audit Committee that we would report to them misstatements identified during our audit above EUR 60 thousand and EUR 36 thousand for the Company and the Group respectively, as well as misstatements below those amounts that, in our view, warranted reporting for qualitative reasons. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matter How our audit addressed the key audit matter Valuation of land (Refer to Note 2 Summary of significant Our procedures in relation to the valuation of land accounting policies; Note 4 Critical accounting by management’s valuation expert included as estimates and assumptions; Note 5 Property, follows: plant and equipment). • evaluation of the independent external valuers’ The carrying value of land as at 31 December competence, capabilities and objectivity; 2019 was EUR 60.6 million (including EUR • assessing the methodology that was used and 35.3 million right-of-use assets) (31 December the key assumptions for appropriateness based 2018: EUR 21.6 million) and gain from fair on our knowledge of the agricultural land market; value adjustments recognised in 2019 • checking the input data for accuracy and relevance; amounted to EUR 3.2 million (2018: EUR 1.4 • verifying the list of land