Talvivaara Mining Co Ahtium's Auditor's Report For The Financial Period 1 January - 31 December 2017

 
TIDMAHT 
 
   Stock Exchange Release 
 
   Ahtium Plc 
 
   2 March 2018 
 
   Ahtium's Auditor's Report for the financial period 1 January - 31 
December 2017 
 
   The Auditor's report for the financial period 1 January - 31 December 
2017 to the Annual General Meeting of Ahtium 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 Ahtium Plc (former Talvivaara Mining 
Company Plc) 
 
   Report on the Audit of the Financial Statements 
 
   Opinion 
 
   In our opinion 
 
 
   -- the consolidated financial statements give a true and fair view of the 
      group's financial position and financial performance and cash flows in 
      accordance with International Financial Reporting Standards (IFRS) as 
      adopted by the EU 
 
   -- the financial statements give a true and fair view of the parent 
      company's financial performance and financial position in accordance with 
      the laws and regulations governing the preparation of the financial 
      statements in Finland and comply with statutory requirements. 
 
 
 
   Our opinion is consistent with the additional report to the Audit 
Committee. 
 
   What we have audited 
 
   We have audited the financial statements of Ahtium Plc (business 
identity code 1847894-2) for the period 1 January - 31 December 2017. 
The financial statements comprise: 
 
 
   -- the consolidated balance sheet, income statement, statement of changes in 
      equity, statement of cash flows and notes, including a summary of 
      significant accounting policies 
 
   -- the parent company's balance sheet, income statement, statement of 
      changes in equity, statement of cash flows and notes. 
 
   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. 
 
   To the best of our knowledge and belief, the non-audit services that we 
have provided to the parent company and to the group companies are in 
accordance with the applicable law and regulations in Finland and we 
have not provided non-audit services that are prohibited under Article 
5(1) of Regulation (EU) No 537/2014. The non-audit services that we have 
provided are disclosed in note 18 to the Financial Statements. 
 
   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 section "Statement of changes in equity" which 
describes changes in the Company's equity during the financial period 
and the amount of the equity as at 31 December 2017. Our opinion is not 
qualified in respect of this matter. 
 
   Our Audit Approach 
 
   Overview 
 
 
   -- Overall group materiality is EUR 0.1 million, which represents 1 % of 
      borrowings 
 
   -- Group audit scope includes the parent company 
 
   -- Key audit matter: 
 
          -- 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: EUR 0.1 million 
 
   How we determined it: 1 % of borrowings 
 
   Rationale for the materiality benchmark applied: We chose borrowings as 
the benchmark because, in our view, in the absence of business 
operations and in the circumstances of the group, it is a relevant 
measure for the readers of the financial statements. 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 
 
   Cash flow forecasting process 
 
   Refer to the balance sheet and statement of cash flows 
 
   As at 31 December 2017, the group's cash and cash equivalents amounted 
to EUR 0,4 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 forecast-ing process, as 
accurate and timely cash forecasts are vital to the group's future. 
 
   There are no significant risks of material misstatements referred to in 
Article 10(2c) of Regulation (EU) No 537/2014 with respect to the 
consolidated financial statements or the parent company financial 
statements. 
 
   How our audit addressed the key audit matter 
 
   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. 
 
   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 
 
   Appointment 
 
   We were first appointed as auditors by the annual general meeting on 9 
September 2003. Our appointment represents a total period of 
uninterrupted engagement of 15 years. 
 
   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 and to disclosure "Events after the review period" 
which states that the group's cash and cash equivalents amount 
approximately euro 0.1 million as at 27 February 2018. 
 
   Helsinki 2 March 2018 
 
   PricewaterhouseCoopers Oy 
 
   Authorised Public Accountants 
 
   Juha Wahlroos 
 
   Authorised Public Accountant (KHT) 
 
   Enquiries 
 
   Ahtium Plc Tel [phone] 
 
   Pekka Perä, CEO 
 
   Pekka Erkinheimo, Deputy CEO 
 
   Ahtium Auditors Report: http://hugin.info/136227/R/2173155/837759.pdf 
 
   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: Ahtium Oyj via Globenewswire 
 
 
  http://www.talvivaara.com 
 

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March 02, 2018 03:40 ET (08:40 GMT)

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