As at the date of publication of the report, the composition of the Audit Committee was as follows:
- Artur Składanek – Chairman
- Janina Goss – Member
- Anna Kowalik – Member
- Mieczysław Sawaryn – Member
- Radosław Winiarski – Member
The Audit Committee operates on the basis of the Regulations of the Audit Committee of the Supervisory Board of PGE S.A., which meets the requirements of the Act of May 11, 2017 on Statutory Auditors, Audit Firms and Public Supervision (the Act on Statutory Auditors). The Company also has the following documents adopted by the Audit Committee:
- Policy and Procedure for the Selection of the Audit Firm to Conduct the Audit (Auditor Selection Policy).
- Policy on the provision of permitted non-audit services by the audit firm, by affiliates of the audit firm and by a member of the audit firm’s network (Service Provision Policy).
All members of the Audit Committee of the Supervisory Board of the 12th term of office have submitted a declaration for the record that they meet the requirements set out in the Act on Statutory Auditors regarding the Audit Committee.
In 2022 the Supervisory Board Audit Committee had the following members:
- meeting statutory independence criteria: Janina Goss, Grzegorz Kuczyński (until June 22, 2022), Mieczysław Sawaryn and Artur Składanek,
- having knowledge and skills in accounting or auditing financial statements due to their education and experience: Radosław Winiarski,
- having knowledge and skills in the industry in which the company operates due to their education and professional experience: Anna Kowalik and Artur Składanek.
Curricula vitae of the Members of the Audit Committee of the Supervisory Board containing details of their education and professional experience, confirming that they possess the requirements indicated above, are available above and on the PGE S.A. website.
The main task of the Audit Committee is assessment of the correctness and effectiveness of internal control at PGE S.A. and PGE Group and cooperation with the statutory auditors of the Company. The Audit Committee’s tasks include in particular defining the rules for selecting an audit firm to audit the Company’s financial statements and monitoring the Company’s financial reporting.
The Audit Committee at PGE S.A. held 10 meetings in 2022 with an attendance rate of 92%. At its meetings, the Audit Committee analysed, among other things, reports for 2021 i.e. the Company’s separate financial statements, the consolidated financial statements of the PGE Capital Group, and the Management Board’s report on the activities of the Company and the PGE Capital Group for the year 2021. The Audit Committee held also regular meetings with the representatives of the auditors – the company PKF Consult sp. z o.o. sp.k. in the scope of year 2022.
Furthermore, the Audit Committee analysed the Company’s separate financial statements for the first half of 2022, as well as the consolidated financial statements of the PGE Capital Group for the same period.
In 2022 the Audit Committee approved the compliance programme of PGE Group for the year 2022.
The Audit Committee issued its positive opinion on the audit plan of the PGE Capital Group for the year 2022.
The Audit Committee also analysed:
- the results of audits carried out at the Company and PGE Group,
- information on the consolidation of the internal audit area at PGE Group,
- information on the performance and functioning of the Audit Department of PGE S.A. following the consolidation of the audit are at PGE Group,
- information on the progress of on-going procedures for the selection of external legal and financial advisers
- report on services provided by the Auditor of PGE S.A. and entities related to the Auditor to PGE Group companies for 2021.
- information on the adoption of a recommendation to the Supervisory Board on the evaluation of transactions entered into by PGE S.A. and its subsidiaries with related parties on an arm’s length basis in the ordinary course of business.
Selection of the audit firm to carry out the audit
Pursuant to the Auditor Selection Policy, the selection of the auditing firm to audit the financial statements of the Company and the consolidated financial statements of PGE Group is made in compliance with the mandatory provisions of law and internal regulations, in particular:
- Act on Statutory Auditors, in particular art. 130 sec. 3 point 2 of this Act,
- Public Procurement Law (i.e.: Polish Journal of Laws 2019, item 1 843 as amended),
- PGE Group’s General Procurement Procedure,
- PGE S.A. Procurement Manual,
- Auditor Selection Policy,
- Guidelines for the selection and co-operation with the audit firm auditing the annual financial statements of the State-owned Company of September 2017.
The first audit engagement will be with an audit firm for a period of not less than 2 years, renewable for successive periods of at least 2 years. The maximum duration of uninterrupted audit engagements with the same audit firm or an audit firm affiliated with that audit firm or any Member of a network operating in countries of the European Union to which those audit firms belong will not exceed 10 years, with the proviso that the key Auditor may not audit for more than 5 years and that the key Auditor may re-perform an audit after a period of at least 3 years has elapsed since the completion of the last audit.
The auditor auditing the non-consolidated financial statements of PGE S.A. and the consolidated financial statements of PGE Group for 2022-2024 is PKF Consult sp. z o.o. sp.k. (PKF Consult). PKF Consult was selected in a procurement procedure in the form of negotiations with an announcement.
In accordance with the Auditor Selection Policy, the following criteria and conditions of participation were taken into account in the tender process:
- Price for carrying out the audit and permitted additional services;
- Knowledge of the energy industry and the specifics of state-owned companies;
- Experience in auditing public entities;
- Composition and experience of the audit team;
- Size and organisational capacity to carry out the audit of PGE Group.
The criteria for selecting the audit firm and the method of evaluation of the bids were determined by the Supervisory Board, on the recommendation of the Audit Committee. The selection of the audit firm to carry out the audit of the financial statements is made by the Supervisory Board, following a recommendation by the Audit Committee. The selection of PKF Consult by the Supervisory Board was in line with the recommendation of the Audit Committee.
In accordance with the Service Provision Policy a statutory auditor or audit firm conducting a statutory audit at PGE S.A. or any of its network members may not provide any prohibited non-audit services directly or indirectly to PGE S.A. and PGE Group companies.
The aforesaid prohibited non-audit services include:
- services indicated in Regulation (EU) No 537/2014 of the European Parliament and of the Council of April 16, 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC (“Regulation no. 537/2014”) (in 5 section 1 of the Regulation no. 537/2014),
- other non-financial revision services.
Allowed non-audit services.
|The scope of the allowed service
||Indication whether the service was provided in 2022 or will be provided for 2022
|services: conducting economic and financial due diligence, issuing of comfort letters in connection with prospectuses issued by the audited entity, conducted in compliance with the national standard for related services and consisting of agreed procedures
|assurance services as regards pro forma financial information, earnings forecasts or estimated results published in a prospectus of the audited entity
|auditing of historic financial information for the prospectus referred to in Commission Regulation (EC) No 809/2004 of April 29, 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements
|verification of consolidation packages
|confirming compliance with conditions included in credit agreements based on analysis of financial information from financial statements audited by the audit firm
|assurance services concerning reporting on corporate governance, risk management and corporate social responsibility
|services consisting of evaluating the compliance of information disclosed by financial institutions and investments firms with information disclosure requirements concerning capital adequacy and variable pay components
|assurances concerning financial statements or other financial information intended for supervision authorities, supervisory board or other supervisory body of the company or owners, exceeding the scope of statutory audit and intended to help these entities in compliance with their statutory obligations
|review of standalone and consolidated financial statements
|open workshops, thematic conferences, industry meetings or other events that are open in nature and are not prepared for or adapted to the needs of PGE S.A., PGE Group companies or their employees
The Audit Committee approved the provision by the Auditor of the services indicated in the table above.
The provision of these services by an audit firm performing a statutory audit of PGE S.A. and by members of the network for PGE S.A. and PGE Group companies is possible only in as far as this is not linked to tax policy after the Audit Committee at PGE S.A.’s Supervisory Board carries out an assessment of independence threats and precautions as referred to in the Act on statutory auditors. In the case of the aforesaid open training sessions, thematic conferences, industry meetings and other events, the assessment of threats and safeguards for independence referred to in the Act on Statutory Auditors is carried out by the Audit Committee of PGE S.A. only if, in a given financial year, the value of these services, provided jointly by PGE S.A. and the PGE Group Companies to a statutory auditor or audit firm carrying out statutory audits of PGE S.A. or a member of the network to which the statutory auditor or audit firm belongs, reaches the limit set in the Policy.
The Services Provision Policy also specifies how a PGE Group company may request the Audit Committee of PGE S.A. to carry out the aforementioned assessment. The Audit Committee will take a written position within 14 calendar days of receiving a request to perform the assessment.