Stock Exchange
Release
Talvivaara Mining Company Plc
21 March 2017
Talvivaara's
Auditor's Report for the financial period 1 January - 31 December
2016
The Auditor's report for the year
ended 31 December 2016 to the Annual General Meeting of Talvivaara
Mining Company Plc is the following:
The following document is an
English translation of the Finnish auditor's report.
Auditor's
Report
To the Annual General Meeting of
Talvivaara Mining Company Plc
Report on the
Audit of the Financial Statements
Opinion
In our opinion the financial statements give a true and fair view
of the group's and the parent company's financial position and
financial performance and cash flows in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the EU and comply with statutory requirements.
What we have
audited
We have audited the financial statements of Talvivaara Mining
Company Plc (business identity code 1847894-2, in Corporate
Reorganisation Proceedings) for the year ended 31 December 2016.
The financial statements comprise the group's and the parent
company's balance sheet, income statement, statement of cash flows,
statement of changes in equity and notes, including a summary of
significant accounting policies.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in
Finland. Our responsibilities under good auditing practice 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 parent company and of the group companies
in accordance with the ethical requirements that are applicable in
Finland and are relevant to our audit, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements.
Emphasis of Matter
We draw attention to note 2 in the financial statements, which
describes the basis of preparation of the financial statements on a
non-going concern basis, as well as the uncertainties relating to
the Company's ability to revise its reporting basis and to regain
its status as a going concern and to note 6, which illustrates the
parent company's adjusted equity and liabilities if the
restructuring programme is confirmed. Our opinion is not qualified
in respect of this matter.
Our Audit Approach
Overview
Materiality
- Overall group materiality is €
0.1 million, which represents 1 % of other operating income
Group
scoping
- Group audit scope includes the
parent company
Key audit
matters
- - Cash flow forecasting
process
As part of designing our audit, we
determined materiality and assessed the risks of material
misstatement in 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.
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 group materiality for the
consolidated financial statements 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
on the financial statements as a whole.
| Overall group materiality |
€ 0.1 million |
| How we determined it |
1 % of other operating income |
| Rationale for the materiality benchmark
applied |
We chose other operating income as the benchmark because, in
our view, in the absence of business operations and in the
circumstances of the group, it represents relevant way to measure
the performance of the group. We chose 1% which is within the range
of acceptable quantitative materiality thresholds in auditing
standards. |
How we tailored
our group audit scope
We tailored the scope of our audit, taking into account the
circumstances and operations of the group.
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.
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.
Key audit
matter in the audit of the group and the parent company
|
How our audit addressed the key audit matter |
Cash flow forecasting process
Refer to the balance sheet and statement of cash
flows
As at 31 December 2016, the group's cash and cash equivalents
amounted to € 3.8 million. The parent company does not currently
have any income generating business and is financing its operations
from its cash reserves. If the necessary cash flow is not secured,
the parent company may have to file for bankruptcy.
Our audit procedures focused on the cash flow forecasting process,
as accurate and timely cash forecasts are vital to the group's
future. |
We reviewed management's cash flow forecasting process and
tested the key assumptions as follows:
* We made inquiries with management on their intention of funding
and financing new businesses.
* We analysed management's monthly cash flow forecasts and compared
them with the actuals.
* We tested mathematical accuracy of the monthly cash flow
forecasts.
|
Responsibilities of the Board of Directors and the Managing
Director for the Financial
Statements
The Board of Directors and the Managing Director are responsible
for the preparation of financial statements that give a true and
fair view in accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU and comply with statutory
requirements. The Board of Directors and the Managing Director are
also responsible for such internal control as they determine is
necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or
error.
In preparing the financial
statements, the Board of Directors and the Managing Director are
responsible for assessing the parent company's and the group's
ability to continue as going concern, disclosing, as applicable,
matters relating to going concern and using the going concern basis
of accounting. The financial statements are prepared using the
going concern basis of accounting unless there is an intention to
liquidate the parent company or the group or cease operations, or
there is no realistic alternative but to do so. When the financial
statements are not prepared on a going concern basis, that fact
shall be disclosed in the financial statements, together with the
basis on which the financial statements have been prepared and the
reason why the entity is not regarded as going concern.
Auditor's Responsibilities for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance on whether the
financial statements 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 good auditing practice 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 financial
statements.
As part of an audit in accordance
good auditing practice, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
-
Identify and assess the risks of material
misstatement of the 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 the 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 parent company's
or the group's internal control.
-
Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting estimates and
related disclosures made by management.
-
Conclude on the appropriateness of the Board of
Directors' and the Managing Director's use of the basis of
accounting on which the financial statements have been
prepared.
-
Evaluate the overall presentation, structure and
content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying
transactions and events so that the financial statements give a
true and fair view.
-
Obtain sufficient appropriate audit evidence
regarding the financial information of the entities or business
activities within the group to express an opinion on the
consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We
remain solely responsible for our audit opinion.
We communicate with those charged
with governance 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 those charged with
governance 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,
related safeguards.
From the matters communicated with
those charged with governance, 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 Reporting
Requirements
Other Information
The Board of Directors and the Managing Director are responsible
for the other information. The other information comprises
information included in the report of the Board of Directors.
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
information included in the report of the Board of Directors and,
in doing so, consider whether the information included in the
report of the Board of Directors is materially inconsistent with
the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated. Our responsibility
also includes considering whether the report of the Board of
Directors has been prepared in accordance with the applicable laws
and regulations.
In our opinion, the information in
the report of the Board of Directors is consistent with the
information in the information in the financial statements and the
report of the Board of Directors has been prepared in accordance
with the applicable laws and regulations.
If, based on the work we have
performed, we conclude that there is a material misstatement of the
information included in the report of the Board of Directors, we
are required to report that fact. We have nothing to report in this
regard.
Other Matter
We also draw attention to the disclosure "Risk management and key
risks" in the report of the Board of Directors, which describes the
parent company's near term risk factors that relate to the
continuance of the business operations.
Helsinki 21 March 2017
PricewaterhouseCoopers Oy
Authorised Public Accountants
Juha Wahlroos
Authorised Public Accountant (KHT)
Enquiries
Talvivaara Mining Company Plc Tel +358
20 712 9800
Pekka Perä, CEO
Pekka Erkinheimo, Deputy CEO
Talvivaara Auditors
Report
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Talvivaaran Kaivososakeyhtiö Oyj via
Globenewswire
Talvivaara (LSE:TALV)
Historical Stock Chart
From Nov 2024 to Dec 2024
Talvivaara (LSE:TALV)
Historical Stock Chart
From Dec 2023 to Dec 2024
