Auditors' Report To the Annual General Meeting of OEM International AB (publ), Corp. ID no. 556184-6691
Statement on the Annual Report and consolidated financial statements Opinion We have conducted an audit of the Annual Report and the consolidated financial statements of OEM International AB for the year 2021, with the exception of the Corporate Governance Statement on pages 34-37. The company's Annual Report and consolidated financial statements are presented on pages 27-85 of this document. In our opinion, the Annual Report has been prepared as required by the Swedish Annual Accounts Act and presents fairly, in all material respects, the financial position of the Parent Company at 31 December 2021, and its financial performance and its cash flows for the year, in accordance with the Swedish Annual Accounts Act. The consolidated financial statements have been prepared as required by the Swedish Annual Accounts Act and present fairly, in all material respects, the financial position of the Group at 31 December 2021, and its financial performance and cash flows for the year, in accordance with the International Financial Reporting Standards (IFRS), as approved by the European Union, and the Swedish Annual Accounts Act. Our opinion does not cover the Corporate Governance Statement on pages 34-37. The Directors' Report is consistent with the remainder of the Annual Report and the consolidated financial statements. We therefore recommend that the General Meeting of Shareholders adopt the income statement and the balance sheet of the Parent Company and the Group's statement of comprehensive income and statement of financial position. Our opinions in this statement on the Annual Report and the consolidated financial statements are consistent with the content of the additional report that has been presented to the Parent Company's Audit Committee in compliance with Article 11 of the EU Audit Regulation No. 537/2014. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (ISA) and generally accepted auditing standards in Sweden. Our responsibility under these standards is described in more detail in the section “Responsibilities of the auditors”. We are independent of the Parent Company and the Group in accordance with generally accepted auditing standards in Sweden and have otherwise fulfilled our professional responsibilities in compliance with these requirements and standards. This means that, to the best of our knowledge and belief, no prohibited non-audit services as referred to in Article 5.1 of the European Regulation on specific requirements regarding statutory audit of public interest entities (No. 537/2014) have been provided to the audited entity or, where applicable, to its Parent Company or its regulated entities within the EU. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Our audit approach The objective and scope of the audit We designed our audit by determining level of materiality and assessing the risks of material misstatement in the financial statements. In particular,
Materiality The scope and objective of our audit were influenced by our assessment of materiality. An audit is designed to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement. Misstatements can arise from fraud or error. They 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. Based on professional judgement, we set certain quantitative thresholds for materiality, including for the financial statements as a whole. These, together with qualitative considerations, helped us to determine the objectives and scope of our audit and the nature, timing and extent of our audit procedures, and to evaluate the effect of misstatements, both individually and in aggregate, on the financial statements as a whole. Key audit matters Key audit matters are those matters that, in our professional judgement, 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
Inventory valuation
Our audit included the following audit procedures. We initially examined whether the Group's principles for cost calculation are compliant with generally accepted accounting practice. We then asked the subsidiary auditors to confirm compliance with this at a local level too. We evaluated whether any local entity had made any substantial change when applying the relevant principles We also updated our understanding of how processes and systems affect the warehousing process in each company. With the help of data analyses, we have been able to collect and scrutinise a large volume of transactions in order to;
On 31 December 2021, the recognised value of inventories in the Group was SEK 737.5 million. Inventory valuation always requires the application of a number of estimates and judgements. Because of this and the fact that the carrying amount is 35.9% of total consolidated assets, we have identified inventory valuation as a matter of particular significance in the financial statements. In 2021, the price of several of the goods in which OEM trades increased in the economy. It is therefore important to ensure that the price increases are reflected correctly in the Group's recognised cost of inventories.
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we looked at areas where the Managing Director and the Board of Directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering forecasts about future events that are inherently uncertain. As in all audits, we also addressed the risk of override of internal controls by the Managing Director and the Board of Directors, including consideration of whether there was evidence of systematic non-conformances that have given rise to the risk of material misstatement due to fraud. We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates. OEM's operations are conducted in subsidiaries in 10 or more countries, mainly in Europe. The subsidiaries in Sweden and Finland jointly account for a significant percentage of the Group's operations. It was natural and necessary to perform an audit for these entities. The audit in Sweden was performed by the Group team and in Finland by a local PwC team. After consultation with OEM's Board and Group management, the Group audit in other countries included an additional 12 entities, where an audit was also performed with the assistance of PwC's network, with the exception of the UK where it was performed by a local audit firm. The Group team has reviewed the work which is performed by all entity auditors to ensure that sufficient auditing has been performed, and has also continually communicated to understand how the audit has been conducted. In addition to this, the Group team has examined the Group consolidation, the Group's Annual Report and has assessed a number of complex transactions and issues. All in all, this means that we are satisfied that sufficient audit work has been undertaken and particularly within the PwC network.
OEM 2021
