Termination of the agreement for audit and review of financial statements
Current Report No. 14/2019
Date: 13 May 2019
Legal basis: Article 56 par. 1 item 2 of the Act on Public Offerings – current and periodic information
The Management Board of Medicalgorithmics S.A. (“Company”) informs that on 13 May 2019 the Company terminated the agreement for audit and review of financial statements of 20 July 2018 (“Agreement”) between the Company and the audit firm – CSWP Audyt Spółka z ograniczoną odpowiedzialnością sp. k. with its registered office in Warsaw (“Audit Firm”), subject to a 30-day notice period.
The Agreement covered the following services:
- review of the Company’s financial statements and review of the consolidated financial statements of the Medicalgorithmics Capital Group (“Group”) for the first six months of 2018 – the service has been completed,
- audit of the Company’s financial statements and audit of the Group’s consolidated financial statements for 2018 – the service has been completed,
- review of the Company’s financial statements and review of the Group’s consolidated financial statements for the first six months of 2019 – the service has not been commenced,
- audit of the Company’s financial statements and audit of the Group’s consolidated financial statements for 2019 – the service has not been commenced,
The reason for the termination of the Agreement by the Company is the specificity and the increasing globalisation of the Medicalgorithmics Capital Group. The Group generates 99% of revenue in foreign markets, mainly in the USA. In January 2019 the Group’s structure was also changed due to the Company’s acquisition of a controlling stake in an Indian company Algotel Solutions Private Limited. This justifies the change of the Audit Firm to a global entity ensuring the maintenance of uniform audit standards for all entities in the Group.
Pursuant to Article 66 par. 4 of the Accounting Act of 29 September 1994 (consolidated text, Journal of Laws of 2019, item 351, as amended), § 20 par. 7 of the Company’s Articles of Association and § 1 section 9 of the Policy and Procedure for the Selection of the Audit Firm adopted by resolution No 1 of the Company’s Audit Committee of 20 October 2017, the entity to select and approve a change of the audit firm in the Company is the Supervisory Board. The Supervisory Board agreed to terminate the agreement with the Audit Firm by resolution No 9 of 9 May 2019.
The Management Board indicates that:
- the audit reports concerning the Company’s financial statements or consolidated financial statements contained no qualified opinions, adverse opinions or disclaimers of opinion,
- the review reports concerning the Company’s condensed financial statements or condensed consolidated financial statements contained no qualified conclusions, adverse conclusions or disclaimers of conclusion,
- no divergent opinions were presented by the managing persons and the statutory auditor who audited and reviewed the Company’s financial statements or consolidated financial statements on the interpretation and application of legal provisions or the Company’s Articles of Association regarding the subject matter and scope of the audit and review, during the term of the Agreement.
The Audit Firm’s letter addressed to the Polish Financial Supervision Authority containing an explanation of the reasons for termination of the Agreement will be submitted by the Company in a current report as soon as it becomes available.