DIRECTORS’ REPORT ON THE OPERATIONS OF
TOYA S.A. CAPITAL GROUP
IN 2022
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
2
Contents
1. PROFILE OF THE PARENT COMPANY ................................................................................................................... 5
1.1. General Information – the Parent Company ..................................................................................................... 5
1.2. Organisation of TOYA S.A. Capital Group .......................................................................................................... 5
1.3. The Parent Company’s Management Board and Supervisory Board ................................................................ 6
1.4. Share capital ...................................................................................................................................................... 6
1.5. Own shares ........................................................................................................................................................ 7
1.6. Shareholders ...................................................................................................................................................... 7
1.7. Shares held by managers and supervisors ........................................................................................................ 8
1.7.1. Shares held by members of the Parent Company’s Management Board ..................................................... 8
1.7.2. Shares held by members of the Parent Company’s Supervisory Board ......................................................... 8
1.8. Information about the employee share ownership plan control system ........................................................... 8
1.9. Agreements that may lead to changes in the structure of shares held by the current shareholders ................ 8
1.10. Total value of remuneration, rewards and benefits paid or due to managers and supervisors ........................ 9
1.11. Agreements concluded by and between the Issuer and persons performing management functions,
providing for compensation in the event of their resignation or dismissal from the occupied position ...................... 10
2. CHANGES IN THE BASIC GROUP MANAGEMENT METHODS ...............................................................................10
3. DESCRIPTION OF THE MOST IMPORTANT EVENTS IN 2022 AND SIGNIFICANT ACHIEVEMENTS OR FAILURES ....10
3.1 Registration of increase in the share capital of a subsidiary and contribution to the share capital of Yato
Tools (Jiaxing) Co. Ltd. .................................................................................................................................................. 10
3.2 Appointment of a Member of the Management Board .................................................................................. 10
3.3 Annex to a significant contract........................................................................................................................ 10
3.4 Transactions in major blocks of shares ........................................................................................................... 10
3.5 Annex to a significant agreement ................................................................................................................... 10
3.6 Annex to a significant agreement ................................................................................................................... 11
3.7 Transactions in major blocks of shares ........................................................................................................... 11
3.8 Annex to a significant agreement ................................................................................................................... 11
3.9 Annex to a significant agreement ................................................................................................................... 11
3.10 Resolutions adopted by the Extraordinary General Meeting of Shareholders on 28 June 2022 ..................... 11
3.11 Transaction in major blocks of shares ............................................................................................................. 12
3.12 Annex to the overdraft agreement .................................................................................................................. 12
3.13 Transaction in major blocks of shares ............................................................................................................. 12
3.14 Annex to the overdraft agreement .................................................................................................................. 12
3.15 Contributions to the share capital of Yato Tools (Jiaxing) Co. Ltd. .................................................................. 12
3.16 Impact of the war between Ukraine and Russia on the Group's operations ................................................... 12
4. INFORMATION ON THE ISSUER’S ORGANISATIONAL AND EQUITY RELATIONSHIP WITH OTHER ENTITIES AND
IDENTIFICATION OF THE ISSUER’S MAJOR DOMESTIC AND FOREIGN INVESTMENTS .................................................13
4.1 Equity links ...................................................................................................................................................... 13
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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4.2 Other significant links ...................................................................................................................................... 13
4.3 Description of the structure of main capital deposits or capital investments made by the Issuer’s Capital
Group during the financial year .................................................................................................................................... 13
5. DESCRIPTION OF THE ANTICIPATED DEVELOPMENT OF THE ISSUER’S CAPITAL GROUP ....................................13
6. MAJOR R&D ACHIEVEMENTS ............................................................................................................................13
7. OVERVIEW OF KEY ECONOMIC AND FINANCIAL FIGURES AND DESCRIPTION OF FACTORS AND EVENTS,
ESPECIALLY UNTYPICAL, AFFECTING THE GROUP’S OPERATIONS IN 2022 ..................................................................14
8. INFORMATION ABOUT THE DEVELOPMENT STRATEGY ADOPTED BY THE ISSUER AND ITS GROUP AND ACTIONS
TAKEN TO IMPLEMENT THIS STRATEGY, AND A DESCRIPTION OF THE ISSUER’S DEVELOPMENT PROSPECTS AT LEAST
IN THE NEXT FINANCIAL YEAR....................................................................................................................................19
9. EXPLANATION OF DIFFERENCES BETWEEN THE FINANCIAL RESULTS INDICATED IN THE ANNUAL REPORT AND
EARLIER FORECASTS ..................................................................................................................................................20
10. DESCRIPTION OF MAJOR RISK FACTORS AND THREATS, SPECIFYING THE EXTENT TO WHICH THE ISSUER IS
EXPOSED TO THEM ....................................................................................................................................................20
10.1 Financial risks .................................................................................................................................................. 20
10.2 Non-financial risks ........................................................................................................................................... 20
10.3 External and internal factors crucial for the Group’s development and analysis of the Group’s development
perspectives .................................................................................................................................................................. 20
11. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT ....................................................................................22
11.1 Financial instruments in the scope of the risk of price change, credit and liquidity risks ................................ 22
11.2 Objectives and methods of financial risk management .................................................................................. 22
12. ASSESSMENT OF FINANCIAL RESOURCES MANAGEMENT AND THE ABILITY TO COVER LIABILITIES ...............23
13. ASSESSMENT OF THE ABILITY TO CARRY OUT INVESTMENT OBJECTIVES ......................................................23
14. MAIN COMMODITY GROUPS ........................................................................................................................23
14.1 Commodity groups .......................................................................................................................................... 23
14.2 Sales according to product groups .................................................................................................................. 25
15. MAIN SELLING MARKETS ...............................................................................................................................26
15.1 Sales structure ................................................................................................................................................. 26
15.2 Suppliers .......................................................................................................................................................... 30
16. CONCLUDED AGREEMENTS IMPORTANT TO THE GROUP’S OPERATIONS ......................................................31
17. THE ENTITY AUDITING THE FINANCIAL STATEMENTS ....................................................................................31
18. RELATED PARTY TRANSACTIONS ...................................................................................................................32
19. LOANS AND BORROWINGS ...........................................................................................................................32
20. EXTENDED LOANS AND BORROWINGS ..........................................................................................................34
21. THE NATURE, PURPOSE AND VALUE OF SIGNIFICANT OFF-BALANCE SHEET ITEMS .......................................34
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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22. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE ...............................................................................34
22.1 Change in the composition of the Audit Committee ....................................................................................... 34
23. STATEMENT ON THE APPLICATION OF CORPORATE GOVERNANCE PRINCIPLES ............................................36
23.1 Indication of the set of corporate governance rules governing the Parent Company and the place where the
set is publicly available and any information about the Company's corporate governance practices that go beyond
the requirements provided for by national law, together with the presentation of information on its corporate
governance practices .................................................................................................................................................... 36
23.2 An indication to the extent that the Parent Company departed from the provisions of the set of principles of
corporate governance, with an indication of those provisions and the reasons for the withdrawal ........................... 36
23.3 Description of basic features of internal control and risk management systems applied in the Company with
respect to the process of preparing the financial statements - in relation to the Group ............................................. 40
23.4 Shareholders who hold, directly or indirectly, major blocks of shares, the number of shares held by such
entities, their percentage share in the share capital, the number of votes resulting from them and their percentage
share in the total number of votes at the general meeting.......................................................................................... 40
23.5 Indication of the owners of any securities, which provide special control rights, together with the description
of the rights .................................................................................................................................................................. 41
23.6 Restrictions on voting rights, such as limitation of the voting rights of holders of a given percentage or
number of votes, time limits on the exercising of voting rights, or provisions under which, with the company’s
cooperation, equity rights attaching to securities are separated from the holding of the securities .......................... 41
23.7 Limitations in transferring the ownership right to the issuer’s securities ....................................................... 41
23.8 Description of principles concerning appointment and dismissal of managers and their entitlements, in
particular the right to decide on issuance or redemption of shares ............................................................................. 41
23.9 Principles of introducing amendments to the articles of association .............................................................. 42
23.10 The functioning of the General Shareholders’ Meeting, its basic entitlements, the rights of shareholders
and the manner of exercising these rights and entitlements, and in particular the rules set forth by the Bylaws of the
General Meeting of Shareholders provided such bylaws have been adopted, unless such information is determined
directly by the provisions of law ................................................................................................................................... 42
23.11 Composition and the changes that occurred in the course of the last accounting year and the description
of managing, supervisory and administrative bodies` as well as committees’ operation, and with respect to the Audit
Committee or Supervisory Board or other supervisory or controlling body performing the function of the Audit
Committee, providing also information on: ................................................................................................................. 49
23.12 Description of diversity policy applied for administrative bodies, managing and supervising the Issuer as
regards the aspects such as, for example, age, gender or education and experience, aims of this policy, ways of its
realization and results in the particular reporting period (and in case the Company does not apply such policy,
explanation of the reasons for such decision) .............................................................................................................. 54
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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1. PROFILE OF THE PARENT COMPANY
1.1. General Information – the Parent Company
TOYA S.A. (the “Company” or the “Parent Company”) is a joint stock company established under the Commercial
Companies Code. The Parent Company has its registered office in Wrocław at ul. Sołtysowicka 13/15.
TOYA S.A. was formed on the basis of a Notarial Deed drawn up on 17 November 1999. Pursuant to a decision of 3
December 1999, the Parent Company was entered in the Commercial Register maintained by the District Court for
Wrocław-Fabryczna, 6th Commercial Division, with the reference number RHB 9053. By virtue of a decision of 4
December 2001, the District Court for Wrocław-Fabryczna, 6th Commercial Division of the National Court Register,
decided to enter the Parent Company in the Register of Entrepreneurs, with the reference number KRS 0000066712.
The entry in the Register took place on 5 December 2001.
The duration of the Parent Company is unlimited.
As at the date of submission of the annual report, the Parent Company has 1 branch located outside the registered
office, in Nadarzyn.
The core business activities of TOYA S.A. include import and distribution of industrial goods, including
primarily hand and power tools for professional and DIY use. The Group distributes goods manufactured and supplied
mainly by companies located in China. For many years, the Group has been implementing its strategy of expanding
onto international markets. It focuses primarily on Central, Southern and Eastern Europe (Romania, Ukraine, Baltic
countries, Hungary, Belarus, Moldova, the Czech Republic, Bulgaria, Russia and Germany).
Since 12 August 2011, the Parent Company’s shares have been listed on the Warsaw Stock Exchange.
1.2. Organisation of TOYA S.A. Capital Group
As at 31 December 2022, the Group comprised the following entities:
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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Characteristics of entities comprising the Capital Group (as at 31 December 2022 and as at the date of publication
of the report on operations of the Capital Group):
Entity name
Registered
office
Business profile
Type of equity link
% of shares
and votes
held
Link
establishm
ent date
Method of
Consolidation as at
the end of the
reporting period
TOYA S.A.
Wrocław,
Poland
Distribution of tools and
power tools
Parent Company
Not applicable
Not
applicable
Not applicable –
Parent Company in the
Group
Toya Romania S.A.
Bucharest,
Romania
Distribution of tools and
power tools
Subsidiary
99.99
November
2003
Full consolidation
method
Yato Tools
(Shanghai) Co., Ltd.
Shanghai,
China
Distribution of tools and
power tools
Subsidiary
100.00
January
2013
Full consolidation
method
Yato Tools (Jiaxing)
Co., Ltd.
Baibu,
China
Distribution of tools and
power tools
Subsidiary
100.00
December
2019
Full consolidation
method
1.3. The Parent Company’s Management Board and Supervisory Board
In the period from 1 January 2022 to 26 January 2022, the Management Board was composed of the following
members:
• Grzegorz Pinkosz President of the Management Board;
• Maciej Lubnauer Vice-President of the Management Board.
On 27 January 2022, the Supervisory Board appointed Mr. Robert Borys to act as the Vice-President of the
Management Board. From that date and until the date of approval of this report for publication, the Management
Board was composed of the following members:
• Grzegorz Pinkosz President of the Management Board;
• Maciej Lubnauer Vice-President of the Management Board;
• Robert Borys Vice-President of the Management Board.
In the period from 1 January 2022 to 31 December 2022 and until the date of approval of this report for publication,
the Supervisory Board of the Parent Company was composed of the following members:
• Piotr Mondalski President of the Supervisory Board;
• Jan Szmidt Vice-President of the Supervisory Board;
• Dariusz Górka Member of the Supervisory Board;
• Michał Kobus Member of the Supervisory Board;
• Grzegorz Maciąg Member of the Supervisory Board;
• Wojciech Bartłomiej Papierak Member of the Supervisory Board;
• Beata Szmidt Member of the Supervisory Board.
1.4. Share capital
As at 31 December 2022, the share capital of the Parent Company amounted to PLN 7,504,222.60 and comprises
75,042,226 shares with a par value of PLN 0.1 each. In 2022, there were no changes in share capital.
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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1.5. Own shares
The Parent Company does not hold any own shares.
1.6. Shareholders
According to information provided to TOYA S.A. by its shareholders, the Parent Company’s ownership structure as of
31 December 2022 was as follows:
Name
Status
Number of
shares
Type of shares
Par value per
share (PLN)
Par value of the
shares (PLN)
Structure (%)
Jan Szmidt
natural person
28,284,304
ordinary bearer
0.1
2,828,430.40
37.69%
Romuald Szałagan
natural person
9,652,290
ordinary bearer
0.1
965,229.00
12.86%
Generali OFE
legal person
5,001,147
ordinary bearer
0.1
500,114.70
6.66%
Other – share below 5%
not applicable
32,104,485
ordinary bearer
0.1
3 210,448.50
42.79%
TOTAL
75,042,226
7,504,222.60
100.00%
According to information provided to TOYA S.A. by its shareholders, shareholders holding directly or indirectly at least
5% of the total number of votes as at 31 December 2022 were:
Number of shares
Share (%)
Number of votes
Share in the total number of votes at
the General Meeting of
Shareholders (%)
Jan Szmidt
natural person
28,284,304
ordinary bearer
37.69%
Romuald Szałagan
natural person
9,652,290
ordinary bearer
12.86%
Generali OFE
legal person
5,001,147
ordinary bearer
6.66%
The following changes in the ownership structure of significant blocks of TOYA S.A. shares took place between the
date of submission of the previous quarterly report (i.e. from 7 November 2022) and 31 December 2022:
Status according to the information
available on 7 November 2022
Increases / decreases
Status according to the information
available on
31 December 2022
Jan Szmidt
28,170,647
113,657
28,284,304
Romuald Szałagan
9,652,290
9,652,290
Generali OFE
5,001,147
5,001,147
TOTAL
42,824,084
113,657
42,937,741
After the end of 2022, there were no changes in significant blocks of shares.
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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1.7. Shares held by managers and supervisors
1.7.1. Shares held by members of the Parent Company’s Management Board
The number of shares and votes in the share capital of the Company held by members of the Management Board as at
the day of submission of this report is reflected in the following table:
Number of shares
Par value of the shares
(PLN)
Number of votes
Share (%)
Grzegorz Pinkosz
146,812
14,681.20
146,812
0.20%
Maciej Lubnauer
61,831
6,183.10
61,831
0.08%
Robert Borys
8,528
852.80
8,528
0.01%
TOTAL members of the
Management Board
217,171
21,717
217,171
0.29%
1.7.2. Shares held by members of the Parent Company’s Supervisory Board
The number of shares and votes in the share capital of the Company held by members of the Supervisory Board as at
the day of submission of this report is reflected in the following table.
Number of shares
Par value of the
shares (PLN)
Number of votes
Share (%)
Jan Szmidt
28,284,304
2,828,430.40
28,284,304
37.69%
Beata Szmidt
3,239,253
323,925.3
3,239,253
4.32%
Grzegorz Maciąg
5,275
527.5
5,275
0.01%
TOTAL members of the
Supervisory Board
31,528,832
3,152,883
31,528,832
42.02%
1.8. Information about the employee share ownership plan control system
In 2022, there were no employee share ownership plans at the Parent Company or the Group.
1.9. Agreements that may lead to changes in the structure of shares held by the current shareholders
The Parent Company has no knowledge of any agreements that may lead to future changes in the structure of shares
held by the current shareholders.
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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1.10. Total value of remuneration, rewards and benefits paid or due to managers and supervisors
Remuneration of Members of the Management Board (in PLN ‘000):
Name and surname
Position
Gross basic
salary (fixed and
variable)
Additional
benefits and
granted benefits
Cost of pension
programs (PPK)
Total (PLN ‘000)
ROK 2022
Grzegorz Pinkosz
President of the Management Board
1,386
6
-
1,392
Maciej Lubnauer
Vice-President of the Management Board
1,284
6
-
1,290
Robert Borys
Vice-President of the Management Board
479
6
-
485
ROK 2021
Grzegorz Pinkosz
President of the Management Board
1,261
6
-
1,267
Maciej Lubnauer
Vice-President of the Management Board
1,225
6
-
1,230
Remuneration of Members of the Supervisory Board (in PLN ‘000):
Name and surname
Position
Fixed remuneration
for performing the
function
Cost of pension
programs (PPK)
Total (PLN ‘000)
2022
Piotr Mondalski
President of the Supervisory Board
180
-
180
Jan Szmidt
Vice-President of the Supervisory Board
48
-
48
Beata Szmidt
Member of the Supervisory Board
48
-
48
Dariusz Górka
Member of the Supervisory Board
120
2
122
Grzegorz Maciąg
Member of the Supervisory Board
120
2
122
Michał Kobus
Member of the Supervisory Board
48
1
49
Wojciech Papierak
Member of the Supervisory Board
48
1
49
2021
Piotr Mondalski
President of the Supervisory Board
180
-
180
Jan Szmidt
Vice-President of the Supervisory Board
48
-
48
Beata Szmidt
Member of the Supervisory Board
48
-
48
Dariusz Górka
Member of the Supervisory Board
120
2
122
Grzegorz Maciąg
Member of the Supervisory Board
120
2
122
Michał Kobus
Member of the Supervisory Board
48
1
49
Wojciech Papierak
Member of the Supervisory Board
48
1
49
Remunerations presented in this note include gross remunerations actually paid in 2022 (including variable salary for
the previous periods covered by provisions as at 31 December 2021) as well as non-cash benefits and costs incurred
by the employer under the PPK pension program. Remunerations do not include unpaid variable salary for the year
2022 (covered by provisions as at 31 December 2022).
There are no liabilities under the pensions or similar benefits for former managers, supervisors or former members of
administrative bodies and the liabilities that are incurred in relations to such pensions at the Company.
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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1.11. Agreements concluded by and between the Issuer and persons performing management functions,
providing for compensation in the event of their resignation or dismissal from the occupied position
As at 31 December 2022, no agreements have been concluded between the Parent Company and its management
staff providing for compensation in case of resignation or dismissal of a member of management staff from his/her
position.
2. CHANGES IN THE BASIC GROUP MANAGEMENT METHODS
In 2022, there were no significant changes in the company's management methods.
3. DESCRIPTION OF THE MOST IMPORTANT EVENTS IN 2022 AND SIGNIFICANT ACHIEVEMENTS OR
FAILURES
3.1 Registration of increase in the share capital of a subsidiary and contribution to the share capital of Yato Tools
(Jiaxing) Co. Ltd.
On 17 January 2022, an increase in the share capital of the subsidiary - Yato Tools (Jiaxing) Co., Ltd. - from the amount
of USD 8,000 thousand up to the amount of USD 12,500 thousand - was registered in the Chinese register of
entrepreneurs. After acquiring additional shares, the Company holds 100% of shares in the subsidiary with a total
nominal value of USD 12,500 thousand.
3.2 Appointment of a Member of the Management Board
On 27 January 2022, the Supervisory Board appointed Mr. Robert Borys to the position of the Vice-President of the
Management Board.
3.3 Annex to a significant contract
On 16 February 2022, TOYA S.A. concluded the Annex no. 1 to the Non-Revolving Credit Agreement no.
WAR/8833/20/327/CB of 14 September 2020 with BNP Paribas Bank Polska Spółka Akcyjna with its registered office in
Warsaw. The loan amount was increased to the amount of PLN 40,000 thousand and the repayment period was
extended to 31 March 2024.
3.4 Transactions in major blocks of shares
On 31 March 2022, the shareholder Norges Bank concluded transactions which resulted in a reduction of its share in
the share capital of TOYA S.A. up to 3,745,158 shares, which constituted 4.99% of share in the Company’s share
capital.
3.5 Annex to a significant agreement
TOYA S.A. announces that on 12 April 2022, it concluded annex no. 4 to Overdraft Agreement no. 09/030/19/Z/VV
with mBank S.A. with its registered office in Warsaw.
Pursuant to this annex, the amount of credit to be used increased to PLN 60,000 thousand.
The remaining terms of the Agreement do not differ from those commonly used for this type of agreements.
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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3.6 Annex to a significant agreement
On 12 April 2022 TOYA S.A. and Bank Handlowy S.A., with its registered office in Warsaw, concluded annex no. 19 to
the Overdraft Agreement no. BDK/KR-RB/000054601/0641/10.
Pursuant to this annex, the amount of credit to be used was increased to PLN 50,000 thousand and an additional
collateral for repayment of credit granted in the form of a registered pledge on the Company’s current assets in the
amount of PLN 10,000 thousand was established. The remaining terms and conditions of the Agreement do not differ
from those commonly used for this type of agreements.
3.7 Transactions in major blocks of shares
On 4 May 2022, the Company received a notification from the shareholder Norges Bank about the transaction, which
resulted in an increase in the shareholder’s share in the share capital of TOYA S.A. up to 3,836,056 shares, which
constituted 5.11% of share in the Company’s share capital.
3.8 Annex to a significant agreement
On 26 May 2022 TOYA S.A. and Bank Handlowy S.A. with its registered office in Warsaw concluded annex no. 20 to the
Overdraft Agreement no. BDK/KR-RB/000054601/0641/10.
Pursuant to this annex, the amount of credit to be used was increased to PLN 70,000 thousand and the amount of
additional security of credit repayment in the form of a registered pledge on the Company’s current assets was
increased to PLN 30,000 thousand.
The remaining conditions of the Agreement do not differ from those commonly used for this type of agreements.
3.9 Annex to a significant agreement
On 21 June 2022 TOYA S.A. concluded Annex no. 2 to the non-revolving credit agreement no. WAR/8833/20/327/CB
of 14 September 2020 with BNP Paribas Bank Polska Spółka Akcyjna with its registered office in Warsaw. Pursuant to
the Annex:
(a) credit duration shall end on 30 September 2024. The repayment of the principal shall be made in equal capital
instalments after the date on which the period for disbursement of the credit has expired;
b) credit disbursement period shall be extended until 31 December 2022;
c) grace period for repayment of the credit has been established until 31 December 2022.
Other terms and conditions of the Agreement remain unchanged and do not deviate from the conditions generally
applied in such agreements.
3.10 Resolutions adopted by the Extraordinary General Meeting of Shareholders on 28 June 2022
On 28 June 2022, the General Meeting of Shareholders of Toya S.A. approved the financial statements of TOYA S.A. for
2021 and consolidated financial statements of TOYA S.A. Group for 2021, and also decided to transfer the profit of
TOYA S.A. for 2021 in the amount of PLN 63,243 thousand to reserve capital.
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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3.11 Transaction in major blocks of shares
On 4 July 2022, the Company received a notification from the shareholder Norges Bank about the transaction, which
resulted in a decrease in the shareholder’s share in capital of TOYA S.A. to 3,336,531 shares, which accounted for
4.45% of the share capital.
3.12 Annex to the overdraft agreement
On 30 September 2022, TOYA S.A. concluded an annex to the Overdraft Agreement No. WAR/8833/20/326/CB with
BNP Paribas Bank Polska Spółka Akcyjna with its registered office in Warsaw. The subject of the annex is to extend the
period of credit provision until 15 November 2023.
Other terms and conditions of the Agreement do not deviate from those commonly applied to this type of agreement.
3.13 Transaction in major blocks of shares
On 21 November 2022, the Company received two notifications from the Vice-President of the Supervisory Board, Mr.
Jan Szmidt, about the transaction, which resulted in a total increase in the shareholder’s share in the share capital of
TOYA S.A. by 113,657 shares, to the total amount of 28,284,304 shares, which constitutes 37.69% of the share capital.
3.14 Annex to the overdraft agreement
On 15 December 2022 TOYA S.A. and Bank Handlowy S.A. with its registered office in Warsaw concluded Annex no. 21
to the Overdraft Agreement no. BDK/KR-RB/000054601/0641/10. Under this annex, the final repayment date of the
loan was set at 15 December 2023.
The other terms and conditions of the Agreement do not differ from those commonly used for this type of
agreements.
3.15 Contributions to the share capital of Yato Tools (Jiaxing) Co. Ltd.
In 2022, the Company made contributions to the share capital of Yato Tools (Jiaxing) Co. Ltd. in the total amount of
PLN 19,769 thousand:
• PLN 3,983 thousand (USD 1,000 thousand) on 21 January;
• PLN 6,166 thousand (USD 1,300 thousand) on 23 August;
• PLN 9,620 thousand (USD 2,200 thousand) on 23 December.
As at 31 December 2022, all contributions to the capital of Yato Tools (Jiaxing) Co. were made. Ltd. The total value of
shares according to the exchange rate as at the date of registration of the share capital increase amounted to PLN
17,819 thousand.
3.16 Impact of the war between Ukraine and Russia on the Group's operations
The Group has been present on the markets of Eastern Europe for a long time, in particular in Ukraine, Belarus and
Russia. Despite its long presence on these markets, the Group did not have any assets there, and transactions with
local clients were of a short-term nature. The Russian-Ukrainian conflict, which began with military operations on 24
February 2022, disrupted trade relations on these markets, which in turn resulted in a temporary freezing of relations
with some customers. It should be emphasized that the Group complies with all sanctions imposed by the European
Union, Poland and the governments of other countries, on entities, persons and goods indicated in the relevant legal
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
13
acts. The Group has implemented appropriate procedures in this regard. However, the implemented procedures and
the need to verify and comply with all economic sanctions slow down trade with customers from these markets,
which is beyond the Group's control. This may have an impact on trading with customers present in these markets in
the coming quarters.
4. INFORMATION ON THE ISSUER’S ORGANISATIONAL AND EQUITY RELATIONSHIP WITH OTHER
ENTITIES AND IDENTIFICATION OF THE ISSUER’S MAJOR DOMESTIC AND FOREIGN INVESTMENTS
4.1 Equity links
The organisational structure of the Capital Group was described in item 1.2. Apart from that, there are no other equity
links between companies from Toya S.A. Group and other entities.
4.2 Other significant links
As at the date of publication of the report on operations, the Parent Company had personal links with the following
entities (this summary includes entities with whom the Parent Company has concluded transactions in 2022):
• Toya Development Sp. z o.o. S.K. in liquidation – entity related through key management personnel of
the Company;
• Toyota Katowice Sp. z .o. o. - entity related through key management personnel of the Company.
Details on transactions with related entities are included in note 31 of the standalone financial statements and in note
32 of the consolidated financial statements.
4.3 Description of the structure of main capital deposits or capital investments made by the Issuer’s Capital
Group during the financial year
Beside capital investments described in point 1.2, the Group does not have any other capital investments. In 2022, a
payment was made to the share capital of Yato Tools (Jiaxing) Co. Ltd., subsidiary established in 2019, in the amount
of USD 4,800 thousand (PLN 19,769 thousand). Apart from that, no deposits or capital investments were made within
the Capital Group.
5. DESCRIPTION OF THE ANTICIPATED DEVELOPMENT OF THE ISSUER’S CAPITAL GROUP
Policy related to the Capital Group’s development directions was disclosed in point 8.
6. MAJOR R&D ACHIEVEMENTS
The Group offers a wide portfolio of products and considers development and further improvement of its products as
one of the key elements in building its competitive advantage on the market. Development activities are mainly
focused on the analysis of the design trends on the market, analysis of potential of the brand’s design as well as
conceptual and design works for selected product groups and have been carried out for several years by the Product
Development Centre – organisational unit of the Parent Company, in cooperation with subsidiaries. R&D activities are
financed from the Parent Company’s own funds.
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14
7. OVERVIEW OF KEY ECONOMIC AND FINANCIAL FIGURES AND DESCRIPTION OF FACTORS AND EVENTS,
ESPECIALLY UNTYPICAL, AFFECTING THE GROUP’S OPERATIONS IN 2022
Revenue and profitability of TOYA S.A. GROUP (PLN ‘000).
For 12 months ended 31 December
2022
2021
Sales revenue
762,590
686,737
Gross sales profit
242,665
231,407
Operating profit
97,644
98,881
Profit before tax
88,349
97,313
Net profit
70,220
77,395
In 2022, sales revenues amounted to PLN 762,590 thousand and were higher than the revenues achieved in 2021 by
PLN 75,853 thousand, i.e. by 11%. The largest increase in sales, by PLN 42,089 thousand. was recorded in the
wholesale channel (of which PLN 32,159 thousand relates to the increase in the Parent Company). The greatest
growth dynamics was recorded by the Group in the other sales channel (mainly online sales in Poland), where
revenues increased by 24% as compared to 2021. One of the main reasons for the high sales dynamics in these
channels was the high availability of goods in the TOYA S.A. offer, expansion of the customer portfolio and good
matching the commercial offer.
Gross profit on sales increased in 2022 by PLN 11,258 thousand. i.e. by 4.9% as compared to 2021. The lower gross
profit on sales growth rate as compared to the increase in sales revenue was caused, on one hand, by higher costs of
purchasing goods resulting from the level of the USD/PLN exchange rate and prices of transport services, and on the
other hand, by pricing policy focused on maintaining competitiveness.
Operating profit in 2022 in the amount of PLN 97,644 thousand. was lower than that achieved in 2021 by PLN 1,237
thousand, i.e. by 1.2%. This was mainly due to higher costs of utilities (electricity and gas), higher costs of transport to
customers, higher costs of storage at external logistics operators and higher fees related to the organization of waste
recovery. In addition, in 2022, the Group returned to participating in fairs and meetings with business partners, which
did not occur in 2021, due to the ongoing COVID pandemic, as a result of which the costs of business travel increased
as compared to 2021. At the same time, the Group recorded a surplus of foreign exchange gains over losses in the
amount of PLN 2,967 thousand, as compared to the surplus of negative differences over positive differences in the
amount of PLN 2,763 thousand last year.
In order to raise the necessary working capital, the Group uses mainly short-term bank loans. Given the significant
impact of financial costs associated with these loans on the financial result, the Group negotiates the terms of loan
agreements on a yearly basis, so as to maximally reduce the corresponding costs. Nevertheless, a significant increase
in base interest rates on the financial market in Poland in 2022 had a negative impact on bank interest costs, which
amounted to PLN 8,154 thousand. compared to PLN 460 thousand in 2021.
Profitability ratios.
For 12 months ended 31 December
2022
2021
Sales profit margin
31.8%
33.7%
Operating profit margin
12.8%
14.4%
Pre-tax profit margin
11.6%
14.2%
Net profit margin
9.2%
11.3%
Key:
Sales profit margin – the ratio of gross profit to sales revenue
Operating profit margin – the ratio of operating profit to sales revenue
Pre-tax profit margin — the ratio of pre-tax profit to sales revenue
Net profit margin — the ratio of net profit to sales revenue
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
15
For the TOYA S.A. Group, sales profit margin is the basic indicator of the Group's market competitiveness and has a
decisive impact on its financial situation. The analysis of this ratio for 2022 shows that the sales profit in this period
decreased by 1.9 percentage points as compared to 2021, which was caused by higher costs of purchasing goods due
to the increase in the USD/PLN exchange rate, increase in transport costs and a pricing policy focused on maintaining
the competitiveness of the Group's offer on the market.
Margin at the level of operating profit, profit before tax and net profit also slightly decreased as compared to the
previous year. The main negative impact on the profitability ratios was the increase in costs of utilities, storage and
financial costs as a result of high interest rates on the financial market.
Cash flows of the Group (PLN ‘000)
For 12 months ended 31 December
2022
2021
Cash flows from operating activities
55,508
(1,547)
Cash flows from investment activities
(20,722)
(28,843)
Cash flows from financial activities
(33,744)
32,909
Net change in cash before foreign exchange differences
1,042
2,519
Cash and cash equivalents at the beginning of the period
38,855
33,961
Effect of translation of cash and cash equivalents
(1,061)
2,375
Cash and cash equivalents at the end of the period
38,836
38,855
In 2022, the Group showed positive cash flows from operating activities, which amounted to PLN 55,508 thousand. In
response to the uncertain market situation resulting from external factors such as inflation or the ongoing conflict
abroad, the Group decided to optimize the level of inventories, however maintaining high ratios of customer order
fulfilment. Inventories decreased by PLN 28,090 thousand and short-term trade receivables and other receivables
decreased by PLN 3,350 thousand.
In 2022, the Group continued its investment in the construction of a new warehouse in China. The investment is led by
Yato (Jiaxing) Co. Ltd. Capital expenditures incurred by this entity in 2022 amounted to PLN 15,297 thousand. Other
expenses for the purchase of tangible fixed assets include the purchase of IT equipment, devices and display racks.
In 2022, the Group generated negative cash flows from financing activities in the amount of PLN 33,744 thousand. The
main reason was a decrease in debt due to bank loans in the amount of PLN 14,786 thousand and interest paid on
bank loans in the amount of PLN 7,819 thousand.
The liquidity of TOYA S.A. Capital Group during the analysed period remained at the right level. The Group’s net
working capital was positive, covering the demand arising from the volume of sales revenue. The ability to cover
short-term liabilities was correct.
Liquidity ratios
31.12.2022
31.12.2021
Current ratio
2.63
1.90
Quick ratio
0.79
0.54
Key:
Current ratio – the ratio of current assets to short-term liabilities
Quick ratio – the ratio of current assets less inventories to short-term liabilities
The value of the current ratio increased to 2.63 as at 31 December 2022 in relation to 1.9 as at 31 December 2021. A
higher level of the current ratio indicates a lower growth rate of liabilities in relation to the growth rate of the working
capital.
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
16
The value of the quick ratio increased to 0.79 as at 31 December 2022 in relation to 0.54 as at 31 December 2021. It is
notable that both these ratios have still reached a very good level.
The structure of assets of TOYA S.A. Capital Group (PLN ‘000)
31.12.2022
31.12.2021
Non-current assets, including:
104,590
85,540
Property, plant and equipment
64,672
45,090
Intangible assets
4,610
3,899
Right-of-use assets
29,725
31,188
Current assets, including:
486,208
516,820
Inventory
341,166
369,256
Trade and other receivables
105,359
108,709
% asset structure of TOYA S.A. Capital Group
31.12.2022
31.12.2021
Non-current assets / Assets
18%
14%
Property, plant and equipment / Assets
11%
7%
Intangible assets / Assets
1%
1%
Right-of-use assets / Assets
5%
5%
Current assets / Assets
82%
86%
Inventory / Assets
58%
61%
Trade and other receivables / Assets
18%
18%
The structure of equity and liabilities of TOYA S.A. Capital Group (PLN ‘000)
31.12.2022
31.12.2021
Equity
370,694
300,678
Long-term liabilities
35,530
29,513
Short-term liabilities, including:
184,574
272,169
Short-term trade and other liabilities
95,619
156,068
% equity and liability structure of TOYA S.A. Capital Group
31.12.2022
31.12.2021
Equity / Equity and liabilities
63%
50%
Short-term liabilities / Equity and liabilities
31%
45%
Long-term liabilities / Equity and liabilities
6%
5%
Short-term liabilities / Liabilities
84%
90%
Long-term liabilities / Liabilities
16%
10%
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
17
Ratios of return on equity, assets and current assets
For 12 months ended 31 December
2022
2021
Return on assets (ROA)
12%
13%
Return on equity (ROE)
19%
26%
Return on current assets
14%
15%
Key:
Return on assets (ROA) – the ratio of net profit to total assets as at the end of the period
Equity ratio (ROE) – the ratio of net profit to equity as at the end of the period
Return on current assets – the ratio of net profit to current assets as at the end of the period
As at 31 December 2022, the Group’s property, plant and equipment constitute 11% of total assets used in
the Group’s operations. Property, plant and equipment comprise primarily a newly constructed warehouse in China
and land, buildings and structures necessary for the Parent Company’s commercial activity.
As at 31 December 2022, right-of-use assets constituted 5% of the total balance sheet amount, consistent with the
previous year. This item consists mainly of the right of perpetual usufruct of land in Poland and China, rented office
and warehouse space in all companies in the Group as well as cars, forklifts and servers under lease.
The structure of current assets used in the operations of TOYA S.A. Capital Group, which as at 31 December 2022
constitute 82% of total assets, includes primarily inventories and trade and other receivables, which is typical to the
business activity conducted by TOYA S.A. and its Capital Group. Both these items constitute in total 92% of current
assets as at 31 December 2022.
Equity structure and debt ratios
31.12.2022
31.12.2021
Total debt ratio
37%
50%
Equity debt ratio
60%
100%
Long-term debt ratio
6%
5%
Short-term debt ratio
31%
45%
The ratio of coverage of non-current assets with equity
and long-term liabilities
379%
369%
Key:
Total debt ratio – the ratio of long- and short-term liabilities to total equity and liabilities
Equity debt ratio – the ratio of long- and short-term liabilities to equity
Long-term debt ratio – the ratio of long-term liabilities to total equity and liabilities
Short-term debt ratio – the ratio of short-term liabilities to total equity and liabilities
The ratio of coverage of non-current assets with equity and long-term liabilities – the ratio of total equity and long-term
liabilities to non-current assets
As at 31 December 2022, the main item in the Group’s equity was retained earnings totalling PLN 316,714 thousand.
The Group’s share capital as at 31 December 2022 amounted to PLN 7,504 thousand.
The main sources of financing operating activities, in particular current assets, include equity and short-term financing
– primarily from bank loans. As at 31 December 2022, the Group financed 62.7% of its operations from equity. As at
this date, the Group’s short-term liabilities due to loans amounted to PLN 65,024 thousand and long-term liabilities
due to loans amounted to PLN 17,143 thousand. The long-term debt ratio as at 31 December 2022 amounted to 6%.
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
18
0
50
100
150
200
250
2018 2019 2020 2021 2022
PLN mln
Quarterly sales in years 2018-2022
Group management effectiveness ratios
For 12 months ended 31 December
2022
2021
Inventories turnover period (days)
161
194
Receivables inflow period (days)
50
57
Liabilities repayment period (days)
45
82
Key:
Inventories turnover period (days) – the ratio of inventories as at the end of the period, multiplied by 360 days, to revenue
from sales
Receivables inflow period (days) – the ratio of short-term trade and other receivables as at the end of the period, multiplied by
360 days, to revenue from sales
Liabilities repayment period (days) – the ratio of trade and other liabilities as at the end of the period, multiplied by 360 days,
to revenue from sales
In 2022, the liabilities repayment period was shorter than the receivables inflow period. This means that the Group
granted longer trade credit to recipients than it received from suppliers itself. It implies higher demand for financing
of working capital. The inventory turnover period in 2022 decreased to 161 days, mainly as a result of lower purchases
of goods, mainly at the end of 2022.
SEASONALITY
The Group's offer includes seasonal products. However, due to their limited value, a wide range of other products that
are in demand throughout the year, and due to the geographic diversity of the subsidiaries, there is no seasonality.
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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8. INFORMATION ABOUT THE DEVELOPMENT STRATEGY ADOPTED BY THE ISSUER AND ITS GROUP AND
ACTIONS TAKEN TO IMPLEMENT THIS STRATEGY, AND A DESCRIPTION OF THE ISSUER’S
DEVELOPMENT PROSPECTS AT LEAST IN THE NEXT FINANCIAL YEAR
The Group attaches great importance to the quality of customer service, as it is crucial for maintaining a competitive
advantage on the market. One of its most important elements is ensuring full availability of the product offer for each
customer. By supporting these goals, the Group constantly improves logistics processes, maintains good relations with
suppliers, taking into account the need to minimize delivery costs. The Group intends to strengthen its market
position and look for new, attractive expansion opportunities.
The most important activities that the Group will undertake in order to implement this program are:
• Developing the capital group
The Capital Group is subject to continuous developments. Very positive results achieved by the subsidiaries in
2022 prove not only that the support mechanisms implemented to date brings the expected results, but also
that having the appropriate organizational and financial support enables the subsidiaries to continue further
intensive development.
The subsidiary Yato Tools (Jiaxing) with headquarters in the economic zone in Baibu Town, a town in the
Zhejiang Province of the People's Republic of China, is in the process of building the Group's central
warehouse in China. This warehouse will enable the Group to optimize the supply chain, by building a buffer
between independent suppliers and the Group's customers, which will increase the efficiency of supply chain
management. This is the Group's response to a clearly noticeable global trend related to e-commerce, which
is growing faster and faster, at the expense of other sales channels, which increases the pressure on the
speed and flexibility of deliveries. This will be an element of increasing the competitive advantage on the
market and building shareholder value.
The warehouse was operationally launched in July 2022. Currently, the warehouse is being equipped with
modern warehouse automation and the necessary infrastructure, which will allow it to become fully
operational in the next few months.
The Parent Company is carrying out analytical work aimed to optimize logistics processes on local markets.
• Developing the export channel
The war between Russia, Belarus and Ukraine has an impact on sales in the export channel. Sales to
customers based in these countries accounted for approximately 9.2% of the Group's total sales. The Group is
closely monitoring the developments in these countries. The detailed position of the Group on the war
conflict can be found in note 3.16.
Regardless of the situation referred to above, the Group will strengthen its position on the other markets
where it is present. This applies to markets where the Group has traditionally been present for many years,
such as Hungary but also the Balkans, where the Group has so far been less visible.
The group will also gain strength outside Europe, in African and Asian markets and in South and Central
America. In these markets, the Chinese subsidiary Yato Tools (Jiaxing) will develop sales and attract new
customers.
The development of logistics processes based on a newly built warehouse mentioned above, equipped with
modern infrastructure will support the foreign expansion of this company.
• Effective products management
The good financial results of the Group and its continuous development would not be possible without the
continuous development of the products offer, that it is very well suited to the expectations of customers.
This process is carried out, among others, by a team of Product Managers who have extensive knowledge
about the product, techniques of shaping its image, who know the habits of customers and emerging trends.
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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This development is supported by modern IT technology as well as systems and devices supporting product
management. This process will be continued in the coming quarters.
• Capital investments
The Group continues to monitor the market in search of an attractive acquisition target, which would be an
added value for the Group.
The situation associated with the occurrence of the COVID-19 pandemic in Poland, Europe and other regions of the
world may have an impact on the development of the Group's operations and financial results in the near future, may
limit or even prevent intensive development of the Group. Due to the very dynamic development of the pandemic, its
nature and geographical diversity of the Group companies, the impact on financial results cannot be reliably estimated
as at the date of publication of the financial statements.
9. EXPLANATION OF DIFFERENCES BETWEEN THE FINANCIAL RESULTS INDICATED IN THE ANNUAL
REPORT AND EARLIER FORECASTS
The Parent Company’s Management Board did not publish forecasts of the Group’s performance for 2022.
10. DESCRIPTION OF MAJOR RISK FACTORS AND THREATS, SPECIFYING THE EXTENT TO WHICH THE
ISSUER IS EXPOSED TO THEM
10.1 Financial risks
The main financial risks include:
• foreign exchange risk,
• interest rate risk,
• liquidity risk.
The aforementioned financial risks and risk management are discussed in item 11.
10.2 Non-financial risks
The main non-financial risks include:
• the risk of changes in the macroeconomic situation, especially changes in the GDP growth rate, inflation level,
the situation in industrial, automotive, household and gardening, infrastructural and housing construction,
construction and assembly segments, the level of investments in enterprises, interest rate policy, budget
standing or the society’s income situation,
• competition risk,
• risk associated with changes in legislation and taxation;
• risk of disruption of the supply chain.
The above risks have been described in item 10.3.
10.3 External and internal factors crucial for the Group’s development and analysis of the Group’s development
perspectives
Macroeconomic situation
The Group is present in the markets in different parts of the world, although most of its customers operate in Poland.
Because of the link between the Polish economy with the global economy system and because of the extensive
activities carried out outside the local market, the global economic situation has an impact on the volume of sales to
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
21
the Group’s customers. The destabilisation of the political situation in some of the local regions may temporarily
reduce the Group’s expansion in foreign markets and force it to look for new customers.
European markets constitute one of the largest areas of the TOYA Group operations, therefore internal problems of
the European Union could have a significant adverse effect on economy. This could further result in a reduced
purchasing power of the European societies and creation of trade barriers, which could be additionally deepened by
the devaluation of local currencies in relation to the most important global currencies. However the impact of these
factors is difficult to estimate, as future economic and regulatory situation may differ from the Management Board’s
expectations. The Group’s management is carefully monitoring the developments and adjusts its strategic
assumptions to minimise the threats.
The situation on the Asian market, associated with the current GDP growth of local countries, also affects the financial
standing of the entire Group due to the fact that the Group buys goods mainly from manufacturers operating in this
region. This is related to the prices of purchased goods, terms of trade, the terms of order, as well as the logistics
system between Asia and Europe.
The Group’s Parent Company is a Polish entity, and most of its business activities are conducted in Poland. Therefore,
the government's economic policies, the Polish tax system, unemployment rate and the decisions taken by the
National Bank of Poland and the Monetary Policy Council are additional factors affecting the development of the
entire Capital Group.
Competition
The Polish market for distribution of industrial goods, which is the Group’s main field of operation, is relatively highly
dispersed in spite of the presence of several market leaders. Entities currently competing with the Group continue to
take actions to intensify their development through aggressive pricing policy aimed at current, target or potential
customers. Such actions may have a negative impact on the Group’s financial standing, because further expansion of
the market may be slowed down, become difficult or even impossible. The Group shall be monitoring the market and
its environment, taking various measures in order to maintain and develop competitive advantage.
Changes in currency markets
The Group’s strict link with foreign suppliers and settlements made primarily in USD make the Group’s financial results
sensitive to changes in FX rates. The Group carefully monitors the currency situation in global markets and the trends
occurring therein, and updates the prices of its goods on a periodical basis. Therefore, the margins can be subject to
periodical fluctuations.
It should, however, be stressed that due to the fact that a substantial part of the Group’s sales revenue is earned
through the export channel based on prices set in foreign currencies, the Group is, to a certain extent, secured against
sudden movements in exchange rates. However, this security is not complete and not sufficient, as a result of which
FX fluctuations may have negative impact on the Company’s financial performance.
Interest rate movements
The Group makes use of external capital funding. An increase in interest rates on the financial market could have
negative influence on the servicing costs of funding and could decrease the Group’s profitability since the Parent
Company enters into loan agreements with floating interest rates in PLN.
To minimise this risk, the Parent Company runs simulations of various scenarios in order to choose the optimal
funding sources, taking into consideration refinancing, roll-over of the existing positions, alternative financing and
mid-term tendencies on the debt market.
Interpretation and application of legal regulations
Changes in legislation and diverse interpretations of the law impede the Group’s operations. Changes in legislation, in
particular in tax, customs, labour and social insurance law and introduction of new burdens, may have negative
consequences for the Company’s activity. Frequent changes in the interpretation of the tax law and lack of uniform
practices of fiscal authorities and courts in the application of tax legislation, are particularly burdensome. This may
involve the risk of third-party claims and proceedings of various state authorities. Moreover, because of their
complexity and inconsistent taxation practices, interpretations are often the subject of disputes with tax authorities.
The Parent Company exercises due care to ensure that these transactions are compliant with legislation – in particular
with the tax law. In spite of that, the risk of third-party claims, possible disputes with tax authorities or proceedings of
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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various state authorities cannot be ruled out. Such claims, disputes or proceedings, as well as cases when fiscal
authorities or courts and the Parent Company adopt different interpretations of tax regulations and different tax
qualification of events and transactions in which the Parent Company participated, may have adverse impact on the
Group’s financial performance.
However, it should be noted that the Group takes measures to mitigate the effects of changes in law. The Parent
Company uses external services of renowned law and tax firms, which facilitate its current operations.
Supply chain
The Group purchases goods from suppliers located in various parts of the world, mainly in Asia. Purchased goods are
transported by sea. Such a supply chain exposes the Group to the risk that any adverse events concerning i.e. means
of production and transport, labour, infrastructure, natural events and phenomena, can disrupt the supply chain. The
Group reduces this risk by cooperating with many contractors who are additionally based in various regions in many
countries. However, in case of event with extensive geographical outreach, the above strategy may not be sufficient.
11. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
11.1 Financial instruments in the scope of the risk of price change, credit and liquidity risks
The purchase prices of goods sold by the Group fluctuate, in particular due to changing manufacturing costs of
purchased goods (incl. prices of raw materials) borne by their manufacturers (the Group’s suppliers). Moreover, the
purchase price of goods depends on the exchange rate of USD to PLN and CNY to PLN. The above factors affect the
level of applied margins. To minimise the negative impact that fluctuations in goods purchase prices have on the
financial result, the Group negotiates contracts with relatively high values and chooses manufacturers offering
competitive prices and trade conditions. The Group does not use financial instruments to hedge against the risk of
changes in goods purchase prices as a result of FX rate fluctuations.
The customer credit risk is not material due to high dispersion of customers. To reduce the risk of overdue receivables
from customers, the Group periodically examines their creditworthiness and systematically monitors (internally and
externally) due balances. Credit limits for individual counterparties are set by the Management Board. Customers
systematically exceeding payment dates are subject to an appropriate debt collection procedure and have a limited
possibility of purchasing goods from the Group. To minimise the risk, the Parent Company also concludes agreements
to insure its receivables with one of the leading financial institutions.
Due to the specific nature of its operations, the Group requires working capital to secure settlements with suppliers
before receiving payments from customers of goods in exchange for advantageous purchase conditions. The
necessary capital is provided, among others, by concluding short-term loan agreements for the financing of current
assets. In order to diversify its lenders, the Parent Company uses services of several banks which have high credibility
ratings. Interest rate on loans is based on WIBOR rate. The Group does not employ instruments to hedge against the
risk of movements in interest rates.
The Parent Company has good relationships with banks and has had no problems renewing its loans thus far.
Therefore, the Parent Company’s Management Board believes that the risk resulting from short term debt is not
significant.
In the view of the Parent Company’s Management Board, the Group's liquidity is secured for the foreseeable future.
The Group follows a rigorous liquidity risk management policy, which focuses on maintaining an adequate level of
cash and securing the ability to use the credit facilities. The Parent Company monitors the level of short-term liabilities
and current assets, as well as current cash flows of the Company and the Group.
11.2 Objectives and methods of financial risk management
Due to the strong link with the foreign suppliers, the Group is sensitive to changes in FX rates and hence requires
increased expenditure on purchase of goods abroad. On the other hand, a part of the Group’s sales revenue comes
from export activity based on prices set in foreign currencies, as a result of which the Group is partly subject to natural
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
23
hedging. There is a risk, however, that future FX fluctuations may have a temporary negative effect on the Group’s
financial performance.
12. ASSESSMENT OF FINANCIAL RESOURCES MANAGEMENT AND THE ABILITY TO COVER LIABILITIES
50% of the Group’s activity is financed from external capital. Loan agreements require the Parent Company to
maintain its capitalisation ratios at an agreed level throughout the lending period. If this requirement is not met, the
bank has the right to terminate the agreements.
The Parent Company enjoys good relationships with banks and financial institutions and so far it has had no problems
renewing its loans on advantageous terms. The Group continues dynamic development of its activity, maintains a high
level of liquidity and pursues a conservative debt policy. That is why the Management Board considers the Company’s
ability to cover liabilities to be high.
At the moment, there are no events which may, according to the Management Board, have a negative effect on the
Group’s ability to cover its liabilities.
13. ASSESSMENT OF THE ABILITY TO CARRY OUT INVESTMENT OBJECTIVES
In the opinion of the Parent Company’s Management Board, there are no threats to implementation of investment
objectives. The activities planned for the nearest period have been described in item 8. In addition to funds generated
from operating activities, the Group has secured external financing in the form of credit limits in accordance with the
agreements described in point 19.
14. MAIN COMMODITY GROUPS
14.1 Commodity groups
The Company offers a wide range of goods sold under its own brands:
• YATO (battery, electric, diesel, pneumatic and hand tools, safety products),
• VOREL (hand workshop and construction tools),
• LUND (power tools),
• STHOR (power tools),
• FALA (bathroom furnishings),
• FLO (hand and fuel-powered gardening tools, gardening power tools),
TOYA S.A. is also the general distributor of the Italian brand GAV (pneumatic tools).
The Group’s most recognisable and leading brand, which also generates the highest sales growth, is YATO. Since 2012,
YATO has had the largest share in the Group’s sales. It offers a wide range of professional hand and pneumatic tools
intended for work in industrial and servicing conditions. YATO’s products include both general-purpose and specialist
tools.
The YATO brand sells primarily workshop, construction and gardening tools, such as spanners, sockets, impact sockets,
torque wrenches and torque multipliers, screwdrivers and screwdriver bits, pliers and pipe wrenches, electrician tools,
hammers, chisels, punches and axes, clamps, vices and supports, cutting and forming tools, hydraulic tools, fastening
tools, construction tools, measuring tools, pneumatic tools, special automotive tools and equipment. In 2015, the
YATO brand was expanded with the line of power tools that combines excellent technical parameters with product
quality. The products were selected taking into account their use in modern construction and automotive industry, as
well as market trends in the supported sales channels. The broad selection of products includes tools dedicated to
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
24
installers from the electrical, hydraulic and HVAC industries, as well as professional car workshops that are
traditionally related to the YATO brand. In 2017, the offer was further extended by products for professional
gastronomy – pots, pans, jugs, containers and utensils, but also by specialized equipment for mechanical food
processing (slicers, mixers, mincers), thermal processing (grills, cookers, burners) and large appliances such as
refrigerated display cabinets and tables.
YATO products are made from high-quality steel alloys, using modern technologies of thermal and chemical
treatment. YATO products combine innovative designs with ergonomics. The Company continuously improves the
quality of its products and expands their range, launching several hundred new products each year.
As a result, YATO enjoys good reputation in the market, both in terms of quality and offered prices.
Revenue from sales of YATO branded products accounted for 75% of the Group’s revenue in 2022 (74% in 2021).
VOREL is the brand which used to have the highest share in the sales of the Group’s products for approx. 10 years.
This brand’s product range includes hand workshop and construction tools intended primarily for DIY enthusiasts and
households. VOREL’s product range includes, among others, spanners, sockets, accessories and sets, screwdrivers and
screwdriver bits, pliers and pipe wrenches, electrician tools, hammers, chisels, punches and axes, clamps and vices,
cutting tools, hydraulic tools, fastening tools, construction tools, measuring tools, pneumatic tools, special automotive
tools and equipment, power tools and accessories, welding equipment, safes, padlocks, locks, tool bags, boxes,
trolleys, safety products, electric products.
Revenue from sales of VOREL branded products accounted for 13% of the Group's revenue in 2022 (14% in 2021).
LUND is a brand established in mid-2010, under which the Group sells power tools. Its product offer includes a broad
range of power tools useful in basic renovation, finishing and decoration works. LUND is a brand dedicated to DIY
enthusiasts, for household and domestic workshop use. The product range of LUND includes: impact drills, cordless
drills, angle grinders, multi-sanders, orbital sanders, polishers, jigsaws, circular saws, cutters, hot air guns and
submersible pumps.
Revenue from sales of LUND branded products accounted for 4% of the Group’s revenue in 2022 (3% in 2021).
Under the brand STHOR, the Group sells modern common use power tools. The brand’s product range is addressed to
DIY enthusiasts and households which do not use tools professionally. The tools offered include: impact drills, cordless
tools, rotary hammers, grinders, jigsaws, circular saws, planers, soldering guns and decoration tools.
Revenue from sales of STHOR branded products accounted for 3% of the Group’s revenue in 2022 (3% in 2021).
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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Under FALA brand, the Group also sells bathroom fittings. The product range covers basic types of items, such as:
faucets, bathroom and shower sets, shower hoses, pop-up wasters, shower heads, shower rails, bathroom scales,
toilet seats and baby toilet seats as well as bathroom accessories.
Revenue from sales of FALA branded products accounted for 2% of the Group’s revenue in 2022 and 2021.
FLO is a brand which includes a wide range of garden hand, electric and gasoline tools. Products offered under this
brand are nearly all the tools required for gardening works, such as garden hand tools, electric garden tools, gasoline
garden tools, gasoline and electric garden accessories as well as other garden accessories.
Revenue from sales of FLO branded products accounted for 2% of the Group’s revenue in 2022 (2% in 2021).
14.2 Sales according to product groups
The most profitable brand is YATO. Every year, the Group records an increase in the sales volume of this brand in the
domestic and foreign market.
Revenues from sales in the Capital Group's core business, broken down by brand and its profitability for each financial
year, are shown in the table below:
The structure and volume of sales revenue from core (trading) operations of the Capital Group, by brand:
for 12 months ended 31 December
2022
Share
2021
Share
PLN ‘000
%
PLN ‘000
%
YATO
573,319
75%
510,220
74%
VOREL
102,777
13%
98,543
15%
LUND
27,182
4%
20,793
3%
STHOR
19,064
3%
19,438
3%
FALA
17,748
2%
15,553
2%
FLO
15,624
2%
14,930
2%
Other
6,876
1%
7,260
1%
TOTAL
762,590
100%
686,737
100%
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
26
15. MAIN SELLING MARKETS
15.1 Sales structure
The main distribution channels of TOYA S.A. Capital Group include:
a) local markets (Poland, Romania and China):
• wholesale market, i.e. distributors, wholesalers and stores;
• retail networks; and
• retail sales - mainly online sales, including through your own online store,
b) export.
The largest portion of sales is generated by TOYA S.A. Capital Group through the wholesale distribution channel in
Poland, Romania and China (48% share of the segment “Wholesale market” in sales revenue for 2022, profitability in
2022 amounted to 31%). The Group’s distribution channel with the second highest share in sales is the segment
“Export”. In 2022, its share in sales amounted to 35% with 31% profitability. Share of distribution through retail chains
on local markets (Poland and Romania) in sales revenue in 2022 reached the level of 10% with 30% profitability. Share
of sales of on-line and stationary stores increased in 2022 to the level of 7%, with 46% profitability.
Outside Poland, the goods are launched through the subsidiaries Toya Romania S.A., YATO Tools (Shanghai) and YATO
Tools (Jiaxing), as well as authorised distributors and sales representatives. Such diversified sales network provides
access to a broad market, professional service as well as optimised availability of the entire range of products sold by
the Group.
Revenues of the Capital Group, broken down by distribution channels and their profitability, are shown in the tables
below.
The structure and volume of sales revenue of the Capital Group, broken down by segments which are distribution
channels
for 12 months ended 31 December
2022
Share
2021
Share
PLN ‘000
%
PLN ‘000
%
Wholesale market (*)
368,988
48%
326,899
48%
Export
266,367
35%
241,889
35%
Retail networks (*)
76,353
10%
76,976
11%
Retail sales (*)
50,882
7%
40,973
6%
Total
762,590
100%
686,737
100%
(*) sales on local markets in Poland, Romania and China
Sales profitability of segments which are the Capital Group’s distribution channels
for 12 months ended 31 December [%]
2022
2021
Wholesale market
31%
35%
Export
31%
31%
Retail networks
30%
32%
Retail sales
46%
47%
Average
32%
34%
Key:
Segment’s sales profitability ratio – the ratio of segment’s profit before tax to revenue from sales of good for certain segment (based on
segment’s financial information as disclosed in the financial statements)
Average – average weighted by sales for all the segments
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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15.1.1 Wholesale market – sales in Poland
TOYA S.A. has been present in Poland for more than 30 years. During this time, it has been systematically
strengthening its market position. The highest sales in Poland take place through traditional distribution channels, i.e.
through distributors, wholesalers and stores. In 2022, TOYA S.A. cooperated with multiple authorised distributors, and
this network will be constantly developed. The Group also cooperates with a few dozen wholesale customers in all
regions, meeting the rising demand for its products, in order to increase its margins and to promote its own brands.
The Group employs several dozen sales representatives – assistants of partners on the wholesale market – and is
planning further development of this distribution channel.
The structure and volume of the Company’s sales revenue on wholesale market in Poland
for 12 months ended 31 December
2022
% share
2021
% share
Authorised distributors
201,347
78%
176,478
78%
Wholesalers and stores
58,310
22%
51,020
22%
Total
259,657
100%
227,498
100%
15.1.2 Retail networks – sales in Poland
Domestic sale to retail networks constitutes approx. 8% of the Group’s sales revenue. TOYA S.A. cooperates with
several large networks in Poland. The Parent Company sells industrial goods on the basis of its customers’ orders for
specific quantities of products to be delivered on specific dates. Upon acceptance, these orders give rise to typical
contractual obligations. In this channel, the Company cooperates with customers with established market positions
that are reliable and financially transparent and have a sound payment history.
15.1.3 The Group’s export sales and foreign activity
TOYA S.A.
For many years, the Parent Company has operated in international markets, focusing primarily on Central, Southern
and Eastern Europe
The structure and volume of revenue from the Parent Company’s export sales, broken down by countries (*).
for 12 months ended 31 December
2022
% share
2021
% share
Ukraine
26,128
16%
26,919
17%
Baltic countries
22,399
14%
22,145
14%
Hungary
21,096
13%
17,213
11%
Belarus
18,419
11%
17,673
11%
Moldova
11,825
7%
9,151
6%
Czech Republic
11,193
7%
13,434
8%
Bulgaria
9,348
6%
10,212
6%
Russia
7,335
4%
7,116
4%
Greece
7,016
4%
4,604
3%
Germany
6,641
4%
9,073
6%
Other
23,114
14%
21,277
14%
Total
164,514
100%
158,817
100%
(*) does not include sales to subsidiary TOYA Romania, which amounted to PLN 54,092 thousand (PLN 48,120 thousand in 2021)
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
28
Toya Romania S.A.
Apart from the export sales described above, direct sales in Romania are carried out by the subsidiary established in
2003 – Toya Romania S.A. – whose business includes sales of hand and power tools in Romania. The product range,
offered brands and distribution channels (other than export) are identical to those of the Polish company. Sales of
Toya Romania are presented in the wholesalers and stores segment.
The development concept of Toya Romania S.A. assumes, among other things, further use of the synergy effect within
the Group, in particular optimisation of goods purchase costs, based on common supply sources and logistics centres.
Moreover, the Romanian company plans to strengthen its position on the local market through further expansion of
the network of on-site sales representatives, whose main task is to win customers on the traditional market from
among specialist retail stores and institutional customers. Marketing activities focus on increasing the share of the
high-margin YATO brand in the revenue structure, which will considerably increase the company’s profitability when
using the shortened distribution channel.
The structure and volume of sales revenue of Toya Romania S.A., broken down by distribution channels
for 12 months ended 31 December
2022
% share
2021
% share
Wholesalers and stores
79,814
91%
69,532
91%
Retail networks
7,256
8%
5,913
8%
Retail sales
842
1%
467
1%
Total
87,912
100%
75,911
100%
Yato Tools (Shanghai) Co., Ltd.
Yato Tools, with its registered office in Shanghai, has been operating from the second half of 2008 as a jointly-
controlled entity, and since 2 January 2013 as a subsidiary under full consolidation method.
During this time, the company’s operations focused on development of the distribution network in individual
provinces of the PRC, finding and training sales staff as well as preparing for expansion onto global markets. Recent
years allowed for completion of the initial stage and development of a distribution network in the main provinces of
the PRC as well as creation of a structure which enables consolidation and export of YATO products directly to
customers/distributors in Southern and Eastern Asia, Africa, Australia and the Middle East. Yato Tools is also one of
the main suppliers of goods for TOYA S.A. and TOYA Romania S.A.
So far, the distribution network in the Chinese market covers 31 out of 34 autonomic administrative units
(23 provinces, 5 autonomic regions, 4 separated cities and 2 special regions), handled by one or more distributors
depending on the local conditions, the population density and traditional forms of trade.
At present, the retail network of Yato Tools covers an area with total population of 1,350 million out of the total of 1.4
billion of the country’s population. This means a considerable development potential for the retail network on the
local market – not only through the already existent representatives, but also through the development of a network
of distributors specialised in distribution of other products offered by the Company, including special automotive tools
and gardening power tools and tools. In addition, Yato Tools is developing sales in the internet sales channel, not only
through its own on-line store, but also through existing large specialised on-line stores.
Export activity of Yato Tools commenced in the second quarter of 2010 as the next step in the company's
development. In 2022, the company traded with several dozen customers from Africa, Asia, Australia and South and
Central America. The highest turnover this year was recorded by customers from the United Arab Emirates and
Guatemala.
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
29
The structure and volume of sales revenue of Yato Tools (Shanghai), broken down by distribution channels (*)
for 12 months ended 31 December
2022
% share
2021
% share
Distributors/ Wholesalers
5,787
28%
11,567
42%
Export
12,216
59%
13,300
48%
Other
2,781
13%
2,846
10%
Total
20,784
100%
27,713
100%
(*) the table does not include intra-group sales (from Yato Shanghai to the Parent Company and Yato Tools (Jiaxing)) which amounted to
PLN 119,363 thousand in 2022 (in 2021: PLN 93,882 thousand) translated from CNY to PLN at the average exchange rate of the National Bank of
Poland.
The structure and volume of revenue from the Yato Tools (Shanghai) export sales
for 12 months ended 31 December
2022
% share
2021
% share
United Arab Emirates
4,577
37%
4,233
32%
Russia
3,709
30%
835
6%
Belarus
2,030
17%
851
6%
Uzbekistan
704
6%
724
5%
Fiji and Caribbean
517
4%
640
5%
Guatemala
483
4%
1,760
13%
Ukraine
-
0%
1,033
8%
Panama
-
0%
933
7%
Greece
-
0%
692
5%
Yemen
-
0%
472
4%
Chile
-
0%
376
3%
Vietnam
-
0%
216
2%
Other
196
2%
535
4%
TOTAL
12,216
100%
13,300
100%
Yato Tools (Jiaxing) Co., Ltd.
Yato Tools (Jiaxing) Co. Ltd. was established in 2019 and is located in Baibu Town, a town in the Zhejiang Province of
the People's Republic of China. In 2020, the company started operating activities.
The structure and volume of sales revenue of YATO Tools (Jiaxing), broken down by distribution channels (*)
for 12 months ended 31 December
2022
% share
2021
% share
Distributors/ Wholesalers
23,718
21%
18,334
21%
Export
89,643
79%
69,781
79%
Other
320
0%
29
0%
Total
113,681
100%
88,144
100%
(*) the table does not include intra-group sales (from Yato Jiaxing to the Parent Company, Toya Romania S.A. and Yato Shanghai) which amounted
to PLN 226,825 thousand in 2022 (2021: PLN 295,680 thousand) translated from CNY to PLN at the average exchange rate of the National Bank of
Poland.
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
30
The structure and volume of revenue from the YATO Tools (Jiaxing) export sales
for 12 months ended 31 December
2022
% share
2021
% share
Chile
14,498
16%
19,149
27%
Ukraine
10,371
12%
15,128
22%
Democratic Republic of Kongo
7,467
8%
3,408
5%
Turkmenistan
6,815
8%
413
1%
Guatemala
4,938
6%
2,690
4%
Panama
2,757
3%
1,779
3%
Libya
2,583
3%
1,127
2%
Iraq
2,538
3%
1,275
2%
Armenia
2,430
3%
1,447
2%
Russia
2,117
2%
-
0%
Cameroon
2,116
2%
-
0%
Malaysia
2,054
2%
3,008
4%
Georgia
1,866
2%
1,327
2%
India
1,859
2%
2,315
3%
Tanzania
1,523
2%
830
1%
Vietnam
1,412
2%
889
1%
Bangladesh
1,385
2%
1,370
2%
Gabon
1,128
1%
308
0%
Sudan
1,122
1%
-
0%
Other
18,664
20%
13,318
19%
Total
89,643
100%
69,781
100%
15.1.4 Retail sale - sale in all companies of the Group
The year 2022 marked a further dynamic growth of the on-line stores www.toya24.pl and yatogastro.pl. In addition,
sales in Poland are conducted through popular online platforms. The subsidiaries in Romania and China also sell
online, in total in the Group this sales channel accounts for 6% of total sales revenues.
The increase compared to the previous year was 14.5%. One of the main reasons for such sales dynamics in this
channel was the change in the way consumers make purchases, which has been progressing for several years, and
they began to prefer online shopping as a result of the declaration of a pandemic. It should be noted, however, that
the greatest changes could be observed in the first year of the pandemic.
The Group sees great potential and plans further dynamic development of this distribution channel in the perspective
of the coming periods.
15.2 Suppliers
The network of suppliers the Group cooperates with is highly diversified. For many years, the Group has cooperated
with more than several hundred foreign and several dozen domestic suppliers, which allowed it to establish durable
business contacts. Such a broad range of suppliers ensures high independence and even enables strengthening of the
Group’s negotiating position. This position is additionally improved by the presence of the subsidiary Yato Tools
(Shanghai) and Yato Tools (Jiaxing), both thanks to higher confidence of Asian manufacturers in a local partner as well
as larger volumes of orders. The Parent Company usually signs short-term agreements on delivery of specific products
or places one-off orders for products, which ensures flexibility in negotiations and allows the Company to match the
product offer to the changing customer expectations better.
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
31
16. CONCLUDED AGREEMENTS IMPORTANT TO THE GROUP’S OPERATIONS
The criterion for recognising agreements as important adopted by the Parent Company is agreement value exceeding
10% of the Parent Company’s equity. According to this criterion, in 2022 the Parent Company concluded annexes to
agreements with banks which were presented in item 19.
The table below includes insurance policies of the Parent Company.
No
Insurance period
Object of insurance
1a
1 July 2022 -30 June 2023
Insurance against all risks of physical loss or damage of tangible fixed assets and
properties
1b
1 July 2022 -30 June 2023
Insurance against all risks of physical loss or damage of tangible current assets
1c
1 July 2022 -30 June 2023
Insurance against all risks of physical loss or damage of electronic equipment
2
1 July 2022 -30 June 2023
Civil liability insurance due to owned property and conducted activity
3
5 October 2022 – 4 October 2023
Motor insurance of the vehicle fleet
4
20 September 2022 -19 September 2023
Civil liability insurance of members of companies’ bodies
5
13 July 2022 – 12 July 2023
Professional liability insurance of accountants and payroll service providers
6
1 March 2022 -28 February 2023
Insurance of the trade credit risk on certain agreements
7
1 March 2022 – 28 February 2023
Insurance of property in CARGO transport
8
1 January 2022 - 31 December 2022
Guarantee for the payment of customs fees
17. THE ENTITY AUDITING THE FINANCIAL STATEMENTS
The entity authorised to audit and review individual and consolidated statements is KPMG Audyt Spółka z ograniczoną
odpowiedzialnością sp.k. with its registered office in Warsaw, ul. Inflancka 4A.
The auditor was appointed by the Supervisory Board on 10 December 2019. The agreement on audit and review was
concluded on 2 July 2020, and then annexed in 2021-2023, and it covers semi-annual review and annual audit of the
individual and consolidated financial statements for years 2020-2022.
Remuneration of the entity authorized to conduct the audit is presented below (in PLN ‘000)
2022
2021
Audit of annual financial statements (individual and consolidated)
230
150
Review of mid-year financial statements (individual and consolidated)
70
70
Other attestation services
-
28
TOTAL
300
248
In 2021, KPMG Audyt Sp. z o.o. sp.k. provided an assurance service related to the remuneration report of the
Management Board and Supervisory Board. In 2022, the Group did not use other services of the appointed audit firm.
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
32
18. RELATED PARTY TRANSACTIONS
Related party transactions are entered into on the arm’s length basis in the course of the Group’s day-to-day
operations. These transactions have been presented in note 32 to the consolidated financial statements and note 31
of the stand-alone financial statements. In 2022 TOYA S.A. did not conclude any transactions with related entities
which were atypical or divergent from the arm’s length basis.
19. LOANS AND BORROWINGS
The list of bank loans has been presented in a table on the subsequent page.
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
33
Object and value of agreement
Name of the Bank / covering bonds
/ granting loans
Loan amount as
per agreement as
at 31 December
2022
Amount
outstanding as at
31 December
2022 (*)
Amount
outstanding as at
31 December
2021 (*)
Current interest rate
Date of expiry
1. Overdraft facility agreement No BDK/KR-
RB/000054601/0641/10 of 22 December 2010
Bank Handlowy w Warszawie S.A.
70,000
21,159
29,310
WIBOR 1 M + bank’s margin
15 December 2023
2. Overdraft credit facility agreement No 09/030/19/Z/VV
mBank S.A. with its registered office
in Warsaw
60,000
18,991
30,453
WIBOR 1 T + bank’s margin
30 March 2023
3. Overdraft credit facility agreement No
WAR/8833/20/326/CB
BNP Paribas Bank Polska S.A. with
its registered office in Warsaw
25,000
1,779
13,692
WIBOR 1 M + bank’s margin
15 November 2023
4. Non-revolving loan agreement no WAR/8833/20/327/CB
BNP Paribas Bank Polska S.A. with
its registered office in Warsaw
40,000
40,238(**)
23,498
WIBOR 3 M + bank’s margin
30 September 2024
Total liabilities, of which:
195,000
82,167
96,953
– short-term portion
177,857
65,024
86,904
– long-term portion
17,143
17,143
10,049
(*) the amount used is presented together with interest due and not repaid as at 31 December 2022 and 2021
(**) including PLN 40,000 thousand of the loan used and PLN 238 thousand of accrued and unpaid interest as at 31 December 2022
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
34
20. EXTENDED LOANS AND BORROWINGS
In 2022, the Group did not extend any borrowings or loans.
21. THE NATURE, PURPOSE AND VALUE OF SIGNIFICANT OFF-BALANCE SHEET ITEMS
As at 31 December 2021, the companies belonging to the Group were parties to the following guarantee agreements
in connection with their operations, granted by the following entities:
(*) after the end of the financial year, the guarantee was extended until 28 February 2023, for the amount of EUR 482,640.52.
On 12 June 2019, TOYA S.A. granted a guarantee of payment of liabilities arising from warehouse and office rental
agreement by Toya Romania S.A. to the landlord up to the amount of EUR 115 thousand. The lease agreement was
concluded on 8 February 2019 and covers a period of 10 years, with the option of changing this period. The warranty
expires 3 months after the date of termination of the lease.
22. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
22.1 Change in the composition of the Audit Committee
On 2 January 2023, the Supervisory Board made the following changes to the composition of the Audit Committee:
1. Supervisory Board dismissed from the Audit Committee of TOYA S.A. the following members:
• Mr. Piotr Mondalski
• Mr. Jan Szmidt
• Mr. Grzegorz Maciąg
2. Supervisory Board appointed to the Audit Committee of TOYA S.A. the following member:
• Mr. Wojciech Papierak
• Mr. Michał Kobus
At the same time, the Supervisory Board entrusted the function of the Chairman of the Audit Committee to Mr.
Wojciech Papierak.
No
Counterparty
Type of guarantee
Subject matter and value
Date of expiry
1
Bank Handlowy w
Warszawie S.A.
Guarantee of payment for the lease of
warehouses in Nadarzyn
Bank guarantee in the amount of EUR 439,133
28 February 2023 (*)
2
Sopockie
Towarzystwo
Ubezpieczeń
ERGO Hestia S.A.
Contract on granting a customs debt
guarantee
The security for repayment of custom debts,
taxes and other fees associated with goods
released into free circulation based on
customs declaration, in the amount of PLN
270,000
31 December 2023
3
BRD Groupe
Societe Generale
Guarantee of payment for warehouse
rental in Bucharest
Bank guarantee in the amount of EUR 246,355
29 July 2027
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35
After the above-mentioned changes, the Audit Committee of TOYA S.A. consists of the following persons:
1. Mr. Wojciech Papierak - Chairman of the Audit Committee
2. Mr. Michał Kobus – Member of the Audit Committee
3. Mr. Dariusz Górka – Member of the Audit Committee
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23. STATEMENT ON THE APPLICATION OF CORPORATE GOVERNANCE PRINCIPLES
In accordance with § 70 section 6 point 5) Regulation of the Minister of Finance dated 29 March 2018 on current and
periodic information published by issuers of securities and conditions for recognizing as equivalent information
required by laws of non-member state (Journal of Laws. Laws of 2020 item 622 as amended), the Management Board
hereby presents its corporate governance statement for 2022.
23.1 Indication of the set of corporate governance rules governing the Parent Company and the place where the
set is publicly available and any information about the Company's corporate governance practices that go
beyond the requirements provided for by national law, together with the presentation of information on
its corporate governance practices
From 1 July 2021, the Company applies the corporate governance principles set out in the "Best Practices of WSE
Listed Companies 2021", attached to the Resolution of the Stock Exchange Supervisory Board No. 13/1834/2021 of 29
March 2021, the content of which is publicly available on the website of the Warsaw Stock Exchange S.A. at the
address: https://www.gpw.pl/dobre-praktyki2021.
The text of the statements regarding each year with an indication of the extent to which the Company declared
compliance with the rules mentioned above, is available on the Company's website at: https://toya.pl/lad-
korporacyjny in the "Best practices" tab.
The Company does not apply any corporate governance practices that go beyond the requirements of local law.
23.2 An indication to the extent that the Parent Company departed from the provisions of the set of principles
of corporate governance, with an indication of those provisions and the reasons for the withdrawal
Pursuant to Article 29.3 of the Regulations of the Warsaw Stock Exchange S.A., the Management Board of the
Company presented "Information on the status of the Company's application of the recommendations and principles
contained in the Best Practices of WSE Listed Companies 2021" in the EBI report No. 1/2021 of 2 August 2021. In
reference to the content of this document, in 2022 the Company complied with the detailed rules contained in the
"Best Practices of WSE Listed Companies 2021", with the exception of the following:
1.3.1. Companies integrate ESG factors in their business strategy, including in particular environmental factors,
including measures and risks relating to climate change and sustainable development;
Explanation of the Company’s departure from the application of the principle: In its business strategy, the Issuer does
not include ESG factors, which include environmental factors, including measures and risks relating to climate change
and sustainable development. The Issuer is aware of the growing importance of non-financial reporting as well as ESG
issues, therefore, meeting the expectations of various stakeholder groups, it will consider taking steps to implement
and apply this principle.
1.3.2. Companies integrate ESG factors in their business strategy, including in particular social and employee factors,
including among others actions taken and planned to ensure equal treatment of women and men, decent working
conditions, respect for employees’ rights, dialogue with local communities, customer relations.
Explanation of the Company’s departure from the application of the principle: In its business strategy, the Issuer does
not include ESG factors, including social and employee factors, including among others actions taken and planned to
ensure equal treatment of women and men, decent working conditions, respect for employees’ rights, dialogue with
local communities, customer relations. The Issuer is aware of the growing importance of non-financial reporting as well
as ESG issues, therefore, meeting the expectations of various stakeholder groups, it will consider taking steps to
implement and apply this principle. The Issuer and the entire TOYA S.A. Capital Group pays particular attention to the
issues related to the core values to which this principle applies.
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1.4. To ensure quality communications with stakeholders, as a part of the business strategy, companies publish on
their website information concerning the framework of the strategy, measurable goals, including in particular long-
term goals, planned activities and their status, defined by measures, both financial and non-financial. ESG information
concerning the strategy should among others:
Explanation of the Company’s departure from the application of the principle: The Issuer presents its Strategy within
periodic reports. This information does not contain all the elements set out in this rule. If the Strategy document is
formally adopted and disclosed in accordance with applicable regulations, it will be made available to stakeholders on
the website. The Issuer is aware of the growing importance of non-financial reporting as well as ESG issues, therefore,
meeting the expectations of various stakeholder groups, it will consider taking steps to implement and apply this
principle.
1.4.1. explain how the decision-making processes of the company and its group members integrate climate change,
including the resulting risks;
Explanation of the Company’s departure from the application of the principle: The Issuer's current Strategy does not
take into account the ESG issues. The Issuer is aware of the growing importance of non-financial reporting as well as
ESG issues, therefore, meeting the expectations of various stakeholder groups, it will consider taking steps to
implement and apply this principle.
1.4.2. present the equal pay index for employees, defined as the percentage difference between the average monthly
pay (including bonuses, awards and other benefits) of women and men in the last year, and present information about
actions taken to eliminate any pay gaps, including a presentation of related risks and the time horizon of the equality
target.
Explanation of the Company’s departure from the application of the principle: The Strategy presented by the Issuer in
its periodic reports does not address the issues raised in this principle. The Issuer pursues an active policy in the field of
working conditions and employee pay, providing the Company with staff that contributes to the organic growth of the
organization.
1.5. Companies disclose at least on an annual basis the amounts expensed by the company and its group in support of
culture, sports, charities, the media, social organisations, trade unions, etc. If the company or its group pay such
expenses in the reporting year, the disclosure presents a list of such expenses.
Explanation of the Company’s departure from the application of the principle: The Issuer does not disclose the
expenses incurred by the Issuer and its group for supporting culture, sports, charities, media, social organizations,
trade unions, etc. The reason for this is the marginal scale of this type of expenses from the point of view of the
Company's financial situation.
1.6. Companies participating in the WIG20, mWIG40 or sWIG80 index hold on a quarterly basis and other companies
hold at least on an annual basis a meeting with investors to which they invite in particular shareholders, analysts,
industry experts and the media. At such meetings, the management board of the company presents and comments on
the strategy and its implementation, the financial results of the company and its group, and the key events impacting
the business of the company and its group, their results and outlook. At such meetings, the management board of the
company publicly provides answers and explanations to questions raised.
Explanation of the Company’s departure from the application of the principle: The Issuer enables investors, analysts,
shareholders and representatives of the media to ask questions and obtain explanations on topics of interest to these
persons, provided that the applicable law provides for such a possibility. The implementation of this principle takes
place in the form of direct meetings with the above-mentioned stakeholders or answers to questions in electronic form.
2.1. Companies should have in place a diversity policy applicable to the management board and the supervisory
board, approved by the supervisory board and the general meeting, respectively. The diversity policy defines diversity
goals and criteria, among others including gender, education, expertise, age, professional experience, and specifies
the target dates and the monitoring systems for such goals. With regard to gender diversity of corporate bodies, the
participation of the minority group in each body should be at least 30%.
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Explanation of the Company’s departure from the application of the principle: The Issuer does not have a diversity
policy towards the Management Board and the Supervisory Board adopted by the Supervisory Board or the General
Meeting, respectively. Nevertheless, the principle of diversity among its bodies is close to the Issuer and constitutes an
added value for the organization. The Issuer ensures that the bodies are composed of persons with the broadest
possible scope of competences and qualifications. The members of the Supervisory Board are elected by the General
Meeting, while the Management Board is appointed by the Supervisory Board. Despite the lack of a diversity policy, the
Issuer is deeply convinced that the General Meeting and the Supervisory Board, when selecting the Supervisory Board
and the Management Board, are guided primarily by the interests and needs of the Issuer to ensure a diverse pool of
talents necessary to meet the challenges faced by the Issuer. The above can be confirmed by the current composition
of the Supervisory Board and the Management Board, which ensures diversity in terms of education, specialist
knowledge and age.
2.2. Decisions to elect members of the management board or the supervisory board of companies should ensure that
the composition of those bodies is diverse by appointing persons ensuring diversity, among others in order to achieve
the target minimum participation of the minority group of at least 30% according to the goals of the established
diversity policy referred to in principle 2.1.
Explanation of the Company’s departure from the application of the principle: The members of the Supervisory Board
are elected by the General Meeting, while the Management Board is appointed by the Supervisory Board. Despite the
lack of a diversity policy, the Issuer is deeply convinced that the General Meeting and the Supervisory Board, when
selecting the Supervisory Board and the Management Board, are guided primarily by the interests and needs of the
Issuer to ensure a diverse pool of talents necessary to meet the challenges faced by the Issuer. The above can be
confirmed by the current composition of the Supervisory Board and the Management Board, which ensures diversity in
terms of education, specialist knowledge and age.
2.7. A company’s management board members may sit on corporate bodies of companies other than members of its
group subject to the approval of the supervisory board.
Explanation of the Company’s departure from the application of the principle: A member of the Management Board
may not, without the consent of the General Meeting, deal with competitive interests or participate in a competitive
company as a partner in a civil partnership, partnership or as a member of a ruling body of a company, or participate
in another competitive legal person as a member of a ruling body. This prohibition also covers participation in a
competitive company, if a Management Board Member holds at least 10% of shares or stocks or the right to appoint at
least one Management Board Member. The prohibition does not apply to performing functions in entities belonging to
the capital group of the Company.
2.11.5. In addition to its responsibilities laid down in the legislation, the supervisory board prepares and presents an
annual report to the annual general meeting once per year. Such report includes at least the following:
assessment of the rationality of expenses referred to in principle 1.5;
Explanation of the Company’s departure from the application of the principle: The Issuer does not disclose the
expenses incurred by the Issuer and its group for supporting culture, sports, charities, media, social organizations,
trade unions, etc. The reason for this is the marginal scale of this type of expenses from the point of view of the
Company's financial situation.
2.11.6. In addition to its responsibilities laid down in the legislation, the supervisory board prepares and presents an
annual report to the annual general meeting once per year. Such report includes at least the following:
information regarding the degree of implementation of the diversity policy applicable to the management board and
the supervisory board, including the achievement of goals referred to in principle 2.1.
Explanation of the Company’s departure from the application of the principle: Due to the fact that the Issuer does not
have a diversity policy towards the Management Board and the Supervisory Board adopted by the Supervisory Board
or the General Meeting, respectively (for the entirety of the justification, see rule 2.1.), the annual report of the
Supervisory Board referred to in rule 2.11 does not contain the information referred to in rule 2.11.6.
3.3. Companies participating in the WIG20, mWIG40 or sWIG80 index appoint an internal auditor to head the internal
audit function in compliance with generally accepted international standards for the professional practice of internal
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39
auditing. In other companies which do not appoint an internal auditor who meets such requirements, the audit
committee (or the supervisory board if it performs the functions of the audit committee) assesses on an annual basis
whether such person should be appointed.
Explanation of the Company’s departure from the application of the principle: As at the date of publication of this
statement, the Issuer has not appointed an internal auditor to manage the internal audit function. The Issuer and the
Audit Committee assess on an ongoing basis the legitimacy of the organizational separation of internal audit and, if
there is a need for such separation, the Issuer will consider appointing such an auditor.
3.6. The head of internal audit reports organisationally to the president of the management board and functionally to
the chair of the audit committee or the chair of the supervisory board if the supervisory board performs the functions
of the audit committee.
Explanation of the Company’s departure from the application of the principle: The principle is not applied due to the
fact that the Company has not appointed a person to manage internal audit. The Issuer monitors the needs of
conducting an audit of individual areas of the Company's operations on an ongoing basis.
3.10. Companies participating in the WIG20, mWIG40 or sWIG80 index have the internal audit function reviewed at
least once every five years by an independent auditor appointed with the participation of the audit committee.
Explanation of the Company’s departure from the application of the principle: The principle is not applied as the Issuer
has not yet distinguished an internal audit unit and has not separated the position of the person managing the internal
audit function.
4.3. Companies provide a public real-life broadcast of the general meeting
Explanation of the Company’s departure from the application of the principle: The Issuer does not provide publicly
available real-time broadcasts of general meetings. The Issuer will monitor the demand of potential stakeholders for
access to real-time broadcasts of the general meeting
4.8. Draft resolutions of the general meeting on matters put on the agenda of the general meeting should be tabled by
shareholders no later than three days before the general meeting.
Explanation of the Company’s departure from the application of the principle: The issuer encourages shareholders to
submit draft resolutions of the general meeting on matters introduced to the agenda of the general meeting within a
time allowing them to be read, but the Company's internal regulations do not provide for the deadline referred to in
this rule.
4.9.1. If the general meeting is to appoint members of the supervisory board or members of the supervisory board for
a new term of office:
candidates for members of the supervisory board should be nominated with a notice necessary for shareholders
present at the general meeting to make an informed decision and in any case no later than three days before the
general meeting; the names of candidates and all related documents should be immediately published on the
company’s website.
Explanation of the Company’s departure from the application of the principle: The Issuer encourages shareholders to
propose candidates for the Supervisory Board in time allowing them to become acquainted with their professional
experience and competences, but the Company's internal regulations do not provide for a deadline for submitting
candidates. On the other hand, the rule is applied in the scope of immediate publication by the Issuer of the candidates
together with a complete set of materials concerning them on the Company's website, provided that the candidates
are submitted within the time limit specified in the rule in question.
4.14. Companies should strive to distribute their profits by paying out dividends. Companies may retain all their
earnings subject to any of the following criteria: a) the earnings are minimal and consequently the dividend would be
immaterial in relation to the value of the shares; b) the company reports uncovered losses from previous years and
the earnings are used to reduce such losses; c) the company can demonstrate that investment of the earnings will
generate tangible benefits for the shareholders; d) the company generates insufficient cash flows to pay out
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Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
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dividends; e) a dividend payment would substantially increase the risk to covenants under the company’s binding
credit facilities or terms of bond issue; f) retention of the company’s earnings follows recommendations of the
authority which supervises the company by virtue of its business activity.
Explanation of the Company’s departure from the application of the principle: The intention of the rule is close to the
Issuer. The Issuer's Management Board, in each application to the General Meeting as to the method of profit
distribution for a given financial year, presents, together with the justification, its recommendations, which may
include, inter alia, the current and projected financial situation of the Company and its capital group, further
development strategy, including investment plans. The issuer shall immediately disclose the information in question to
the public, and the above-mentioned application is assessed by the Supervisory Board. The final decision, taking into
account the essential needs of the Issuer, the catalogue of which may exceed the premises indicated in the principle, is
made by the Issuer's General Meeting.
23.3 Description of basic features of internal control and risk management systems applied in the Company with
respect to the process of preparing the financial statements - in relation to the Group
The Management Board of the Company is responsible for the internal control system in the Parent Company and its
effectiveness in the process of preparing financial statements and periodical reports developed and published in
accordance with the Regulation of the Minister of Finance of 29 March 2018 on current and periodical information
submitted by issuers of securities and on conditions for deeming as equivalent the information required under the
provisions of the law of a Non-Member State. The Company applies internal control systems with regard to accounting
and financial reporting to ensure reliable and transparent presentation of its financial and assets standing. The Parent
Company has in place documentation describing the adopted accounting principles, specifying the methods of assets
and liabilities valuation and determination of the financial result, as well as the manner of keeping the books of
account and the system for protection of data and data collections. The adopted accounting principles are applied on
a continuous basis by ensuring comparability of financial statements while using the rule of going concern and
prudent valuation. The Company’s and Group’s financial statements are audited by authorised entities selected by
way of resolution of the Supervisory Board. The statements are published in accordance with the applicable provisions
of the law.
The books of account are kept by the Company and its subsidiaries in the SAP R3 IT system. Access to information
resources of the IT system is restricted by appropriate rights of authorised employees solely in the scope of their
duties.
The Financial Director supervises the process of preparing the Company’s and Group’s financial statements and
periodical reports from the subject-matter point of view.
Organising work related to preparing annual and semi-annual financial statements is the competence of the
accounting and control department.
After its approval by the Financial Director and before its publication, the financial statements are verified by the
Company’s Management Board and Supervisory Board.
23.4 Shareholders who hold, directly or indirectly, major blocks of shares, the number of shares held by such
entities, their percentage share in the share capital, the number of votes resulting from them and their
percentage share in the total number of votes at the general meeting
The table below presents the ownership structure of shareholders who hold, directly or indirectly, major blocks of
shares of TOYA S.A., the number of shares held by such entities, their percentage share in the share capital, the
number of votes resulting from them and their percentage share in the total number of votes at the general meeting
as of 31 December 2022 (status according to the best of the Company's knowledge and to information provided to
Company by its shareholders):
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Prepared based on:
• Current Report No. 27/2022 of 21 November 2022 containing a Notification of a transaction on shares of
TOYA S.A. performed by a key management personnel.
• Current Report No. 28/2022 of 21 November 2022 containing a Notification of a transaction on shares of
TOYA S.A. performed by a key management personnel.
23.5 Indication of the owners of any securities, which provide special control rights, together with the
description of the rights
All shares in the Company are ordinary bearer shares which provide no special control rights. Apart from shares, the
Parent Company issued no other securities.
23.6 Restrictions on voting rights, such as limitation of the voting rights of holders of a given percentage or
number of votes, time limits on the exercising of voting rights, or provisions under which, with the
company’s cooperation, equity rights attaching to securities are separated from the holding of the
securities
Shares in the Company do not involve any restrictions with respect to exercising voting rights. Pursuant to the Articles
of Association of TOYA S.A., each share carries one vote at the General Shareholders’ Meeting.
23.7 Limitations in transferring the ownership right to the issuer’s securities
In 2022, there were no such limitations.
23.8 Description of principles concerning appointment and dismissal of managers and their entitlements, in
particular the right to decide on issuance or redemption of shares
Pursuant to the Articles of Association pf TOYA S.A., the Management Board comprises one to seven members,
including the President of the Management Board and, in the case of a Management Board comprising several
members, the Vice-President of the Management Board. The number of Management Board members for a given
term is specified by the Supervisory Board. Members of the Management Board are appointed for a joint, three-year
term of office, while mandates of the Management Board members expire no later than on the day of the General
Shareholders’ Meeting which approves the financial statements for the last full financial year of the term of office.
Members of the Management Board of TOYA S.A. are appointed and dismissed by the Supervisory Board.
Members of the Management Board can be dismissed at any time, without detriment to their claims from the work
relationship or a different legal relationship which is the basis for holding the office of a Management Board Member.
The Management Board’s competencies relate to all matters of the Company not restricted to the competencies of
the General Shareholders’ Meeting or the Supervisory Board.
The Management Board operates on the basis of the Regulations approved by the Supervisory Board, as specified in
the Articles of Association of TOYA S.A. The Regulations also specify detailed competencies of the Management Board.
Name
Number of
shares/Number of
votes
Percentage share in the share
capital/Percentage share in the total
number of votes at the general meeting
Jan Szmidt
28,284,304
37.69
Romuald Szałagan
9,652,290
12.86
Generali OFE
5,001,147
6.66
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The Management Board handles the affairs of the Company, manages its assets and represents the Company before
third parties
The following corporate documents, including a description of principles concerning appointment and dismissal of
managers and their entitlements, in particular the right to decide on issuance or redemption of shares, are available
on the website www.yato.pl in the tab: For investors - Materials for investors - Articles of Association, regulations:
• Articles of Association of TOYA S.A.,
• Regulations of the Management Board,
• Regulations of the Supervisory Board,
• Regulations of the General Shareholders’ Meeting.
23.9 Principles of introducing amendments to the articles of association
Amendments to the Articles of Association of the Company are introduced in accordance with the provisions of the
Commercial Companies Code. The resolutions amending the Articles of Association on the increase of the shareholders’
benefits or limiting the rights granted to individual shareholders require the consent of all affected shareholders.
23.10 The functioning of the General Shareholders’ Meeting, its basic entitlements, the rights of shareholders
and the manner of exercising these rights and entitlements, and in particular the rules set forth by the
Bylaws of the General Meeting of Shareholders provided such bylaws have been adopted, unless such
information is determined directly by the provisions of law
The General Shareholders’ Meetings of TOYA S.A. (the Parent Company) take place in accordance with the provisions of
the Commercial Companies Code, the Articles of Association of the Company as well as provisions of the Regulations,
while taking into account other generally applicable provisions of law. The General Shareholders’ Meetings may be
ordinary or extraordinary. Ordinary General Shareholders’ Meeting is convened by the Company’s Management Board
and should take place within 6 months of the end of each financial year. Extraordinary General Shareholders’ Meeting is
convened by the Management Board on its own initiative or at a written request of the Supervisory Board or at the
request of shareholders representing at least 1/20 of the share capital submitted to the Management Board in writing or
in electronic form. The request for convening the Meeting should determine issues to be discussed or it should include a
draft of resolution concerning proposed agenda. Convening the Extraordinary General Shareholders’ Meeting at the
request of the Supervisory Board should take place within two weeks from the date of submission of the request.
The Supervisory Board convenes the General Shareholders’ Meeting:
a) if the Company’s Management Board failed to convene the Ordinary General Shareholders’ Meeting within
the prescribed period,
b) if, despite the submission of a request by the Supervisory Board, the Company’s Management Board failed to
convene the General Shareholders’ Meeting in time, or
c) whenever it deems such meeting necessary.
An Extraordinary General Shareholders’ Meeting may be convened by shareholders representing at least half of the
Parent Company’s share capital or at least half of the total number of votes in the Company. The Management Board
is required to immediately announce the convening of the General Meeting in the manner provided for by the
provisions of law. Shareholders can participate in the General Shareholders’ Meeting and exercise the voting right in
person or through a proxy. Shareholders may participate in the General Shareholders’ Meeting using electronic
means of communication, on conditions specified in detail by the Management Board.
The General Meeting may adopt resolutions regardless of the number of shareholders present at the meeting or the
represented shares, unless otherwise provided in the provisions of law.
Resolutions of the General Shareholders’ Meeting are adopted by an absolute majority of votes, unless the provisions
of law or these Articles of Association provide otherwise. Resolutions of the General Shareholders’ Meeting are
adopted by the majority of ¾ votes cast with respect to the following issues:
a. amendments to the Articles of Association, including issue of new shares,
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b. issue of convertible bonds or bonds with pre-emptive rights to acquire shares,
c. merger of the Company with another company,
d. decrease of the share capital,
e. redemption of shares,
f. disposal of the Company’s enterprise or its organised part,
g. dissolution of the Company.
The resolutions amending the Articles of Association on the increase of the shareholders’ benefits or limiting
the rights granted to individual shareholders require the consent of all affected shareholders.
Resolutions of the General Shareholders’ Meeting are binding upon all bodies of the Company, as well as all
shareholders, including shareholders who are not present on the General Shareholders’ Meeting.
The competences of the General Meeting of Shareholders include adopting resolutions concerning the following
issues:
a) considering and approving the Management Board and Supervisory Board’s report and the financial statements,
b) adopting a resolution on the division of profits or covering of losses,
c) discharging members of the Company’s governing bodies from liability in the performance of their duties,
d) taking all decisions concerning claims for the remedy of damage caused in incorporating the Company or in
carrying out management or supervision,
e) disposing of or leasing the Company’s business or an organised part thereof and establishing a limited right in
rem thereon,
f) acquisition of own shares,
g) issue of convertible bonds or bonds with pre-emptive rights to acquire shares,
h) amendment to the Company’s Articles of Association, including concerning a share capital increase or decrease,
i) merger of the Company or transformation of the Company,
j) dissolution and liquidation of the Company,
k) determination of remuneration of the Supervisory Board members,
l) appointment and dismissal of the Supervisory Board members,
m) creation and liquidation of special funds,
n) approval of the regulations of the Supervisory Board,
o) redemption of shares.
Acquisition and disposal of real property, right of perpetual usufruct or share in a real property by the Company does
not require a consent of the General Shareholders’ Meeting.
Subject to cases specified in the Commercial Companies Code, if the General Shareholders’ Meeting was convened
correctly, it is valid and capable of adopting resolutions regardless of the number of shareholders or number of shares
represented at the meeting, unless otherwise provided in the provisions of law. The General Shareholders’ Meeting of
the Company is convened by an announcement published on the Company’s website and in a manner specified for
transmitting current information, according to generally applicable regulations. The announcement should be made at
least twenty six days before the date of the General Shareholders’ Meeting. The announcement about the General
Shareholders’ Meeting of the Company should include at least:
1) the date, time and place of the General Shareholders’ Meeting as well as a detailed agenda,
2) a precise description of procedures regarding participation in the General Meeting and executing the voting
right, in particular information about:
a) the shareholder’s right to demand specific issues to be included in the agenda,
b) the shareholder’s right to submit draft resolutions regarding issues on the General Shareholders’
Meeting’s agenda or issues which are to be included in the agenda before the date of the General
Shareholders’ Meeting,
c) the shareholder’s right to submit draft resolutions regarding issues on the General Shareholders’
Meeting’s agenda during the General Shareholders’ Meeting,
d) the manner of exercising the voting right via proxy, including, in particular, information about forms used
in voting through a proxy and the manner of notifying the Company about appointment of a proxy using
electronic means of communication,
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e) the possibility and the manner of participating in the General Shareholders’ Meeting using electronic
means of communication,
f) the manner of voicing opinions during the General Shareholders’ Meeting, using electronic means of
communication,
g) the manner of exercising the voting right by correspondence or using electronic means of communication,
h) the shareholder's right to ask questions regarding matters on the agenda of the general meeting.
3) the date of registration of participation in the General Shareholders’ Meeting,
4) information on the right to participate in the General Shareholders’ Meeting only applying to persons who
are shareholders of the Company on the date of registering their participation in the General Shareholders’
Meeting,
5) information on where and how the person entitled to participate in the General Shareholders’ Meeting can
obtain the full text of documentation to be presented to the General Shareholders’ Meeting
6) draft resolutions,
7) address of the website on which information concerning the General Shareholders’ Meeting will be made
available.
The right to participate in the General Shareholders’ Meeting of the Company applies exclusively to persons who are
shareholders of the Company sixteen days before the date of the General Shareholders’ Meeting (the date of
registering participation in the General Shareholders’ Meeting). The General Meeting can be attended by shareholders
who submitted, to the entity keeping the securities account, a request for issue of a registered certificate of the right
to participate in the General Meeting not earlier than after the announcement on the General Meeting being
convened and not later than on the first business day following the date of registration for the General Meeting. The
Parent Company determines the list of shareholders entitled to participate in the General Meeting on the basis of the
list prepared by the entity maintaining the depository of securities, according to the provisions on trade in financial
instruments, submitted to the Parent Company not later than a week before the date of the General Meeting.
Shareholders can participate in the General Shareholders’ Meeting and exercise the voting right in person or through
a proxy. The power of attorney should be made in writing or in electronic form.
Upon arrival at the General Shareholders’ Meeting, each shareholder on the list of shareholders entitled to participate
in the General Shareholders’ Meeting reports their attendance (at the shareholder registration point) to the
shareholder service team and is entered onto the attendance list. Preparing the attendance list of the General
Meeting Participants involves the following tasks:
1) verification of identity of the shareholder or their proxy (if the shareholder is represented by a proxy, this fact
must be indicated on the attendance list),
2) providing the number of shares held by the reporting Participant,
3) specifying the number of votes to which the reporting Participant is entitled,
4) the Participant placing a signature on the attendance list,
5) issuing a voting card, voting instructions and other materials for the meeting to the Participant.
The attendance list is signed by the Chairperson of the General Shareholders’ Meeting (the Chairperson) immediately
after their election. The Chairperson is competent for resolving complaints regarding this list. The attendance list is
made available to the Participants of the General Shareholders’ Meeting throughout the time of the meeting and is
updated on a current basis.
Upon the request of shareholders holding a tenth of the share capital represented at the General Shareholders’
Meeting, the attendance list will be verified by a commission appointed for this purpose, comprising at least three
persons, including one chosen by the applicants. If the commission issues a decision that is disadvantageous to a
certain person, such a person can appeal to the General Shareholders’ Meeting, which resolves the issue by voting. If a
Participant leaves the room during the General Meeting, the Chairperson will correct the attendance list, making note
of the time when the Participant left the room and recalculates the number of votes and the percentage of
represented share capital. After doing calculations, the Chairperson declares whether the General Meeting has the
quorum required and the majority of votes required to adopt resolutions, in particular if votes are planned on
resolutions which require the qualified majority of votes.
If a Participant entitled to participate in the General Shareholders’ Meeting is late, he/she should be allowed to attend
the meeting. In such a case, the Chairperson orders a correction of the attendance list, marking the arrival time of the
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delayed Participant and the item of the agenda starting from which this person participates in the General
Shareholders’ Meeting, and once again calculates the number of votes and quorum represented since the arrival of
the latecomer.
Members of the Management Board and the Supervisory Board participate in the General Shareholders’ Meeting in
composition which allows them to provide factual answers to questions asked during the General Shareholders’
Meeting. If attendance of any of the participants of these bodies is impossible for important reasons, the participants
of the General Meeting are informed about these reasons.
Members of the Management Board and the Supervisory Board of the Company taking part in the General Meeting
should, within their competences and to the extent necessary to resolve issues on the agenda, provide the
Participants with explanations and information concerning the Company, subject to restrictions following from the
applicable regulations. In cases which require detailed, specialist knowledge of a given discipline, a Member of the
Management Board or the Supervisory Board can appoint a person from among the employees of the Company who
will provide such information or explanations. The registered auditor conducting the audit of the Company’s financial
statements is invited to the General Shareholders’ Meeting, in particular if the agenda includes an item of the
Company’s financial matters. The General Shareholders’ Meeting can be transmitted via the Internet. Information
about public transmission of the meeting will be published on the Company’s website right before the General
Shareholders’ Meeting.
The General Shareholders’ Meeting is opened by the President of the Supervisory Board or, if they are absent, the
Vice-President of the Supervisory Board or a person appointed by the President or the Vice-President of
the Supervisory Board, respectively. The person opening the meeting orders and conducts the election
of the Chairperson from among the persons entitled to vote. Until the abovementioned elections, the person opening
the General Shareholders’ Meeting has the Chairperson’s rights.
Every Participant of the General Shareholders’ Meeting is entitled to run for the Chairperson as well as to present one
candidature for this post. The candidate is entered on the list of candidates after stating that they accept
the candidature. The Chairperson of the General Meeting is elected in a secret ballot. The person opening the General
Meeting supervises the correct course of the ballot and announces its results.
The Chairperson ensures smooth course of the meeting and observance of the rights and interests of all shareholders.
The Chairperson should counter, in particular, abuse of Participants’ rights and ensure that the rights of minority
shareholders are respected. The Chairperson should not resign from their function without material reasons and
neither can they, without justified causes, delay the signature of the minutes of the General Shareholders’ Meeting.
Duties and rights of the Chairperson of the General Meeting, apart from those listed in the Regulations
of the General Meeting, include in particular:
1) declaring correctness of the manner in which the General Meeting was convened and the ability to adopt
resolutions,
2) presenting the announced agenda of the General Meeting,
3) giving floor and removing it from a Participant who voices their opinion clearly off-topic or violates
the principles of decent behaviour with their speech,
4) ordering ballots, supervising their correct course and announcing their results,
5) removing persons who are not entitled to participate in the General Shareholders’ Meeting or who interrupt
the meeting from the room,
6) ordering breaks in meetings, subject to the provisions of Regulations of the General Shareholders’ Meeting,
7) resolving doubts concerning regulations, if needed after obtaining the opinions of persons listed in
the Regulations of the General Shareholders’ Meeting,
8) concluding the General Shareholders’ Meeting after the meeting agenda has been exhausted.
The Chairperson is entitled to appoint a Secretariat of the General Meeting comprising 1-3 persons for cooperation
with the Chairperson during the General Meeting. The Chairperson of the General Meeting is entitled to consult the
notary public, lawyers and other independent consultants appointed by the Management Board of the Company to
service the General Meeting. The Chairperson informs the attendants about the presence of the abovementioned
persons at the General Shareholders’ Meeting.
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Every Participant of the General Shareholders’ Meeting is entitled to submit a motion regarding formal issues.
Motions regarding formal issues are motions regarding the manner of holding the meeting and voting, in particular
motions for:
1) postponement or closure of discussion,
2) breaks in the meeting,
3) the voting order of motions submitted under a given item of the agenda,
4) closure of the list of candidates upon elections.
Subject to paragraph 5 of the Regulations of the General Shareholders’ Meeting, motions regarding formal issues are
resolved by the Chairperson, and if any Participant objects to their decision – by voting.
The Chairperson may order a short break in the meeting, in particular in order to allow:
1) formulation of conclusions,
2) agreement upon the Participants’ positions,
3) obtaining opinions of persons referred to in § 6 paragraph 5 of the Regulations of the General Shareholders’
Meeting,
4) the Management Board and the Supervisory Board to assume their positions,
5) handling other cases which require such breaks, in particular if the General Shareholders’ Meeting lasts
longer than 2 hours.
The ordered breaks cannot be aimed at impeding users in exercising their rights. Should a break in the meeting cause
postponement of the General Shareholders’ Meeting at least until the following day, the General Shareholders’ Meeting
must adopt the relevant resolution with at least 2/3 of votes. In total, such breaks cannot be longer than 30 days.
Subject to the provisions of § 8 of the Regulations of the General Shareholders’ Meeting, every Participant should voice
their opinion only on matters covered by the adopted agenda which are currently being considered, in particular by
asking questions to the representatives of the Company. Motions concerning draft resolutions or amendments thereof
should be submitted, along with their justification, in writing to the Secretariat, or in the case of lack thereof, to the
Chairperson. When taking the floor or submitting a motion, the Participant should provide their full name and, if they are
not applying on their own behalf, also details of the shareholder they are representing.
The Chairperson gives the floor to Participants according to the order of applications and for the purpose of retorts –
after the list of persons speaking on a given issue on the agenda is exhausted. The Chairperson can give the floor to the
members of the Company’s Supervisory Board and Management Board out of turn. The Chairperson can limit the
speaking time of a Participant of the General Shareholders’ Meeting if the number of Participants who intend to take part
in the discussion is so large that the lack of time limits for their speeches could, taking into account the agenda, make it
impossible to conduct the General Shareholders’ Meeting efficiently. Restriction of the speaking time cannot cause a
restriction in the shareholders’ rights. The Participant can also voice their opinion by submitting a written statement,
question or motion. After the list of speakers has been exhausted, the Chairperson informs the General Shareholders’
Meeting about the content of such statements and organises explanations and, if needed, puts the submitted motions to
vote. If there are doubts regarding the motion under vote, before voting, the Participant can ask the Chairperson to read
the motion out. The Participant of the General Meeting who demanded an objection to be recorded in the minutes after
the General Meeting adopted a resolution against which they had voted can briefly motivate the objection.
The Parent Company publishes questions asked in relation with the General Meeting as well as provided answers on its
website, immediately after the end of the General Meeting.
Resolutions cannot be adopted with respect to issues not covered by the agenda unless the entire share capital is
represented at the General Meeting and none of the attendants objects to adoption of the resolution. The General
Shareholders’ Meeting can adopt, at any time, a resolution on convening an Extraordinary General Shareholders’
Meeting, resolutions regarding the announced agenda and resolutions of organisational nature, which include:
1) a resolution on changing the order of individual discussed items on the agenda,
2) a resolution on removing individual issues from the agenda,
3) a resolution on the method of voting,
4) a resolution on breaks in the meeting.
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A motion for a resolution on removing a specific issue from the agenda should be motivated.
A matter whose consideration is obligatory pursuant to applicable regulations cannot be removed from the agenda.
A resolution is deemed adopted if its adoption was voted for by shareholders representing the majority of votes
required according to the provisions of the Commercial Companies Code or the Articles of Association. If amendments
were suggested for a draft resolution, these suggestions, subject to § 8 paragraph 2 of the Regulations of the General
Shareholders’ Meeting, are put to vote in the order determined by the Chairperson and, subsequently, a vote is held
on the entire draft resolution, together with adopted improvements.
The Chairperson orders a secret ballot for elections and in the case of motions for dismissal of members of
the Company’s bodies, for holding them liable, as well as in the case of personnel issues. The Chairperson also orders a
secret ballot on other issues upon request of at least one Participant, except for votes on motions relating to formal
issues. Voting and counting votes are assisted by a company which counts votes using a computer technique or in a
different manner, specified in the voting instruction submitted by the Chairperson.
The Supervisory Board comprises between five and seven members, appointed for a joint term of office in a manner
specified in the Company’s Articles of Association. The number of members of the Supervisory Board for a given term is
determined by the General Shareholders’ Meeting.
The principles below apply to appointment of members of the Supervisory Board by the General Shareholders’ Meeting.
A candidate for an independent member of the Supervisory Board submits their agreement to be appointed member of
the supervisory board and a curriculum vitae, as well as a written declaration of meeting the independence criteria
referred to in the Company’s Articles of Association. Every Participant of the General Meeting is entitled to put forward
candidatures for a member of the Supervisory Board. The candidature put forward is accompanied by a justification and
a short curriculum vitae of the candidate, which covers in particular their education and hitherto work experience.
The candidate put forward is added to the list of candidates after declaring acceptance of the candidature and
compliance with the criteria, adopted by the Company, necessary to be recognised as an independent member of the
Supervisory Board, as well as submitting other declarations, if any, required by generally applicable provisions. A
candidate who is absent at the General Shareholders’ Meeting is entered onto the list of candidates after the person who
proposes them presents:
1) the candidate’s written agreement along with a declaration of compliance with the independence
requirements, or
2) a written declaration concerning the candidate being put forth with respect to consent to candidature and
compliance with the independence criteria and
3) the candidate’s other declarations required by the provisions of the law, submitted in the appropriate form.
Upon the request of the Chairperson or another Participant, the list of candidates for the Supervisory Board can be
closed by the Chairperson if the number of elected candidates is at least equal to the number of posts to be appointed in
the Supervisory Board. The list of proposed candidates for members of the Supervisory Board is prepared in alphabetic
order by the Secretariat of the General Shareholders’ Meeting.
Voting for the members of the Supervisory Board takes place separately for each candidate, in a secret ballot, according
to absolute majority of votes. A vote cast for a number of candidates exceeding the number of mandate posts is invalid.
The Supervisory Board comprises candidates who obtained the largest number and the absolute majority of votes; if
there is an equal number of votes for the last mandate post, another vote is held for these candidates, with the above
principles applying respectively. The provisions of this section also apply if the agenda of the General Shareholders’
Meeting covers changes in the composition of the Supervisory Board.
A special voting procedure is ordered by the Chairperson of the General Shareholders’ Meeting in the case of group
elections to the Supervisory Board. Upon the motion of shareholders representing at least one fifth
of the share capital, the Supervisory Board should be elected by way of voting in separate groups even if the Articles of
Association provide for a different manner of appointment of the Supervisory Board. During a group ballot, one share
corresponds to one vote. Groups of shareholders are created at the General Shareholders’ Meeting in order to elect
members of the Supervisory Board, provided that the number of created groups corresponds to the number of posts to
be appointed in the Supervisory Board. A shareholder can only be a member of one voting group. The minimum number
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of shares needed for creating a group is established by dividing the number of shares represented at the General
Shareholders’ Meeting by the number of mandates to be appointed in the Supervisory Board. The group of shareholders
is entitled to elect the number of members of the Supervisory Board equal to the number of times the shares
represented by it exceed the calculated minimum. Groups of shareholders can merge in order to make optimal use of
jointly held shares to elect members of the Supervisory Board. For each group, the Chairperson orders a separate
attendance list to be prepared. Each group holds a vote for the chairperson of the meeting of a given group, who will
ensure organisation of the ballot within the group, i.e. proposing candidates, holding ballots and minutes from the
group’s meeting being drawn up by the notary public. Each of the established groups is provided with a separate room to
hold the elections unless this is impossible for organisational reasons. In such a case, groups take turns and use a single
room. Each group holds the ballot before the notary public who draws up the minutes; the order is determined by the
Chairperson of the General Shareholders’ Meeting.
After holding a group ballot, the chairperson of the group delivers written results of secret ballots held in groups to
the Chairperson of the General Shareholders’ Meeting. The Chairperson of the General Shareholders’ Meeting
announces the composition of the Supervisory Board after collecting all results of group ballots.
Resolutions of the General Shareholders’ Meeting are recorded in the minutes by the notary public, otherwise being
null and void. The minutes are signed by the notary public and the Chairperson of the General Shareholders’ Meeting.
The minutes declare that the General Shareholders’ Meeting has been convened correctly and can adopt resolutions;
they also list the adopted resolutions and, next to each of them, the number of shares from which valid votes were
cast, the percentage of these shares in the share capital, the total number of valid votes, the number of votes for,
against and withheld as well as voiced objections. The minutes are supplemented by the attendance list with
signatures of the Participants. The Management Board of the Company enters the extract from the minutes to the
minutes book. The minutes book is also supplemented with evidence for convening the General Shareholders’
Meeting.
On its website, the Parent Company publishes the ballot results within a week of the conclusion of the General
Meeting. The ballot results will be available until the deadline for appealing against the resolution of the General
Shareholders’ Meeting.
General Shareholders’ Meetings can be recorded; in such cases, the recording of the meeting will be published on the
Company’s website immediately after conclusion of the General Shareholders’ Meeting.
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23.11 Composition and the changes that occurred in the course of the last accounting year and the description of
managing, supervisory and administrative bodies` as well as committees’ operation, and with respect to
the Audit Committee or Supervisory Board or other supervisory or controlling body performing the
function of the Audit Committee, providing also information on:
23.11.1 on individuals who meet the statutory independence criteria and who have knowledge and skills
in accounting or auditing of financial statements, including the manner of acquiring the same,
23.11.2 on individuals who have knowledge and skills in the industry in which the Company operates,
including the manner of acquiring the same,
23.11.3 whether the Company has been provided with any permitted non-audit services by the auditing
firm examining its financial statements, and whether the independence of this auditing firm has
been assessed and the consent for the provision of such services has been given,
23.11.4 main assumptions of the policy developed for the selection of an audit firm to carry out the audit
and the policy of providing any permitted non-audit services by the audit firm, any entities related
thereto and by the member of the auditing firm's chain,
23.11.5 whether the recommendation regarding the selection of an audit firm to carry out the audit met
the applicable conditions, and where the selection of the audit firm was not related to the
extension of the agreement for the auditing of financial statements – whether such
recommendation was prepared following the selection procedure organised by the Issuer and
whether it complied with the applicable criteria,
23.11.6 number of meetings of the Audit Committee or Supervisory Board or other supervisory or
controlling body held,
23.11.7 in case the functions of the Audit Committee are performed by the Supervisory Board or other
supervisory or controlling body - information on which statutory conditions allowing such
situation were met, along with necessary supporting data.
MANAGEMENT BOARD
The composition of the Company's Management Board as at 31 December 2022 was as follows:
• Grzegorz Pinkosz - President of the Management Board,
• Maciej Lubnauer - Vice-President of the Management Board,
• Robert Borys – Vice-President of the Management Board.
The Management Board operates on the basis of the Articles of Association of the Company, Regulations of the
Management Board and in accordance with adopted principles of corporate governance.
The Management Board handles the affairs of the Company. Led by the President of the Management Board,
it manages the Company and represents it before third parties. The manner of representation of the Company is
specified in the Articles of Association, according to which the persons authorised to make declarations of will and to
place signatures on behalf of the Company are the President of the Management Board individually or the Vice-
President of the Management Board jointly with a member of the Management Board.
Detailed principles of operation of the Management Board are specified in the Regulations of the Management Board,
published on the website www.yato.pl, in the tab: For investors - Materials for investors - Articles of Association,
regulations.
SUPERVISORY BOARD
The composition of the Company's Supervisory Board as at 31 December 2022 was as follows:
• Piotr Mondalski - President of the Supervisory Board and Independent Member of the Supervisory Board,
• Jan Szmidt - Vice-President of the Supervisory Board,
• Dariusz Górka - Independent Member of the Supervisory Board
• Grzegorz Maciąg - Independent Member of the Supervisory Board,
• Wojciech Papierak - Independent Member of the Supervisory Board,
• Michał Kobus - Independent Member of the Supervisory Board,
• Beata Szmidt - Member of the Supervisory Board.
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AUDIT COMMITTEE
The composition of the Audit Committee as at 31 December 2022 was as follows:
• Dariusz Górka – President of the Audit Committee and Independent Member of the Audit Committee,
• Grzegorz Maciąg – Independent Member of the Audit Committee,
• Jan Szmidt,
• Piotr Mondalski – Independent Member of the Audit Committee.
Dariusz Górka is the member of the Audit Committee who has qualification in the field of accounting or audit of the
financial statements. Dariusz Górka is, inter alia, graduate of Stern School of Business (New York, USA), where he had
obtained an MBA degree in finance and acquired knowledge and competencies in the area mentioned above. He
remains the member of Institute of Management Accountants (IMA) in Newark (New York, USA).
A member of the Audit Committee with knowledge and skills in the field of industry specializing in TOYA S.A. Is Jan
Szmidt. Jan Szmidt is the originator and co-founder of the Company and has been with the Company since its
inception. He has experience in business development area, proven by many successful accomplishments in the Polish
and international markets. He studied at Faculty of Civil Engineering and Faculty of Computer Science and
Management at Wrocław University of Science and Technology.
The main role of the Audit Committee is to advise and support the Supervisory Board in carrying out its control and
supervisory duties concerning the widely understood financial reporting, including:
1) monitoring:
a) the Company’s financial reporting process,
b) the effectiveness of internal control, risk management, compliance and internal audit systems, including
with respect to the financial reporting,
c) monitoring of performing of financial revisions, in particular performing of an audit by an audit
company, taking into account any conclusions (motions) and arrangements of the Audit Supervision
Committee stemming from an audit (inspection) performed at an audit company;
2) controlling and monitoring of independence and impartiality of the chartered accountant (certified auditor)
and the entity entitled to examine financial statements, in particular in case other services than an audit are
provided for the benefit of the Company;
3) informing the Supervisory Board of audit results and explaining as to who did the audit contribute to
trustworthiness of financial reporting in the Company, and also what was the role of the Audit Committee in
course of the audit;
4) performing the evaluation of independence of the certified auditor and expressing consent for performing by
him of permitted services not constituting the audit within the Company;
5) developing the policy for selecting the auditing company to perform the audit;
6) developing a policy of performing by the auditing company performing the audit, entities related with the
auditing company and members of the auditing company’s corporate network of permitted services no
constituting the audit;
7) defining the procedure for selecting the auditing company by the Company;
8) presenting to the Supervisory Board of recommendation, as required under Art. 16.2 Regulation (EU) No
537/2014 of the European Parliament and of the Council of 16 April 2016 on specific requirements regarding
statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC (i.e. Official
Journal of European Union L 158 of 2014, page 77), in line with policies referred to above in items 5 and 6;
9) presenting recommendations aimed at ensuring reliability of the financial reporting process within the
Company,
10) performing other activities vested with audit committees pursuant to Act of 11 May 2017 on certified
auditors, auditing companies and public oversight.
Main assumption of the Policy on appointing the Audit Firm to audit financial statements adopted by the Company are
as follows:
• selection of the audit firm conducting the statutory audit should be held in accordance with the Policy on
appointing the Audit Firm to audit financial statements adopted by the Company;
• the selection decisions are taken in the form of a resolution of the Supervisory Board, no later than by the
end of December of the year proceeding the year which will be subject to an audit, provided that selection of
the audit firm for 2018 was made by 30 March 2018;
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• Audit Committee is entrusted with conducting the selection procedures, in accordance with applicable
regulations and Policy on appointing the Audit Firm to audit financial statements;
• selection of the audit firm conducting the statutory audit is performed upon providing the recommendation
for selection by the Audit Committee to the Company’s Supervisory Board. When selection does not relate to
extension of an existing audit contract, the recommendation submitted by the Audit Committee should
contain at least two candidates, along with reasoning and indication of justified preferred option;
• in case of statutory audit, the first audit contract should be executed for a period not shorter than 2 years,
with an option to be extended by subsequent, at least 2-year period, considering obligations to rotate audit
firm and key certified auditor resulting from generally applicable legislations;
• while selecting the audit firm, principle regarding change of audit firm should be taken into consideration,
according to which the maximum duration of continuous engagements of statutory audits, carried out by the
same audit firm or an audit firm associated with that audit firm or any member of the network operating in
the Member State of the European Union of which the audit firms belong, may not exceed 5 years. In case of
key certified auditor, the maximum period during which the key certified auditor can provide statutory audit
services shall not be longer than 5 consecutive years. Key certified auditor may again perform the statutory
audit of the Company’s financial statement at least 3 years after the end of the last statutory audit;
• the following criteria are applied while selecting the audit firm to perform audit of the financial statements:
a) proposal submitted by audit firm does not qualify for rejection under Article 9 point 4 of the Policy on
appointing the Audit Firm;
b) audit firm has the ability to provide required audit procedures in foreign subsidiaries of TOYA S.A. Capital
Group;
c) audit firm has:
− knowledge and international connections which can be utilized in proper execution of the audit;
− experience in auditing financial statements of companies listed on the stock exchange, within the
meaning of Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to
Organized Trading and Public Companies of 29 July 2005, preparing their financial statements in
accordance with International Financial Reporting Standards;
− personnel resources consisting of, among others, individuals being members of international
association of finance, accounting and management professionals – ACCA;
− adequate expert knowledge and knowledge of the industry in which the Company operates;
d) audit firm provides the Company, the Supervisory Board and the Audit Committee current and direct
access to the key certified auditor;
e) audit firm uses common IT tools and has experience in auditing accounting records maintained in SAP
system;
f) audit firm has its head office, branch or offices in Wrocław;
g) during the duration of the audit contract, audit firm enables the Company to perform assessment of
significant matters subject to the audit;
h) audit firm submits a proposal containing elements referred to in Article 12 point 4 of the Policy on
appointing the Audit Firm;
i) price, however price offered by audit firm is not a decisive factor;
j) impartiality, objectivity, integrity and independence of the audit firm;
• in case any circumstances indicating possible influence of third parties on the auditor’s selection procedure
are detected or disclosed, an individual who is associated with these circumstances shall immediately refrain
from performing any activities related to the auditor selection procedure and inform the Audit Committee;
• the Management Board signs the agreement with audit firm appointed by the Supervisory Board
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Main assumption of the Policy on providing non-audit allowed services by audit firm performing the audit or an audit
firm associated with that audit firm or any member of the network operating in the Member State of the European
Union of which the audit firms belong are as follows:
• the policy is developed by the Audit Committee and is addressed to all entities of TOYA S.A. Capital Group;
• a statutory auditor or an audit firm carrying out the statutory audit of TOYA S.A. entity or Group, or any
member of the network to which the statutory auditor or the audit firm belongs, shall not directly or
indirectly provide to the audited entity, to its controlled undertakings within the Group any prohibited non-
audit services including:
a) tax services relating to:
− preparation of tax forms;
− payroll tax;
− customs duties;
− identification of public subsidies and tax incentives unless support from the statutory auditor or the
audit firm in respect of such services is required by law;
− support regarding tax inspections by tax authorities unless support from the statutory auditor or the
audit firm in respect of such inspections is required by law;
− calculation of direct and indirect tax and deferred tax;
− provision of tax advice;
b) services that involve playing any part in the management or decision-making of the audited entity;
c) bookkeeping and preparing accounting records and financial statements;
d) payroll services;
e) designing and implementing internal control or risk management procedures related to the preparation
and/or control of financial information or designing and implementing financial information technology
systems;
f) valuation services, including valuations performed in connection with actuarial services or litigation
support services;
g) legal services, with respect to:
− the provision of general counsel;
− negotiating on behalf of the audited entity; and
− acting in an advocacy role in the resolution of litigation;
− services related to the audited entity's internal audit function;
h) services linked to the financing, capital structure and allocation, and investment strategy of the audited
entity, except providing assurance services in relation to the financial statements, such as the issuing of
comfort letters in connection with prospectuses issued by the audited entity;
i) human resources services, with respect to:
− management in a position to exert significant influence over the preparation of the accounting
records or financial statements which are the subject of the statutory audit, where such services
involve:
o searching for or seeking out candidates for such position; or
o undertaking reference checks of candidates for such positions;
− structuring the organisation design; and
− cost control.
• statutory auditors and the audit firms shall be allowed to provide certain tax and valuation services when
such services are immaterial or have no direct effect, separately or in the aggregate, on the audited financial
statements. Where such services involve aggressive tax planning, they should not be considered as
immaterial. A statutory auditor or an audit firm should be able to provide non-audit services, in the scope not
related to the tax policies of the Company and/or the TOYA S.A. Group, which are not prohibited under the
existing laws and regulations and which include:
a) services performed in connection with the prospectuses issued by the audited entity, conducted in
accordance with the national standard of related services and consisting in conducting the agreed
procedures:
− of conducting due diligence procedures with regard to economic-financial condition;
− issuing letters certifying;
b) assurance services with regard to pro forma financial information, forecasts of results or estimated
results, published in the prospectus issued by the audited entity;
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c) examination of historical financial information to of the Prospectus mentioned in the Regulation of the
Commission (EC) No 809/2004 of 29 April 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 (EU
Journals of Laws L of 2004, no. 149, page 1 – repealed) – currently Regulation (EU) 2017/1129 of the
European Parliament and of the Council of 14 June 2017 on the prospectus to be published in connection
with the public offering of securities or admission to trading on a regulated market and repealing
Directive 2003/71/EC ( i.e., EU Journal of Laws L of 2017, No. 168, p. 12) and Commission Delegated
Regulation (EU) 2019/980 of 14 March 2019, supplementing Regulation (EU) 2017/1129 of the European
Parliament and of the Council, regarding the format, content, verification and approval of the prospectus
to be published in connection with the public offering of securities or their admission to trading on a
regulated market, and repealing Commission Regulation (EC) No 809/2004 (i.e. EU Journals of Laws L of
2019, No. 166, p. 26);
d) verification of consolidation packages;
e) confirmation of fulfilment of conditions of the concluded loan contracts on the basis of the analysis of
financial information coming from financial statements audited by a given audit firm;
f) assurance services in reporting concerning corporate governance, risk management and corporate social
responsibility;
g) services consisting in assessment of compliance of information revealed by financial institutions and
investment companies with the requirements with regard to disclosing information concerning capital
adequacy and variable remuneration;
h) certification concerning reports or other financial information for supervision bodies, the supervisory
board or other supervisory authority of the company, or owners, exceeding the scope of the statutory
audit, to help these authorities to perform their statutory duties;
• services other than audit services are provided in accordance with the independence requirements specified
for those services in professional ethics principles and standards of providing such services;
• entities providing non-audit services shall have a critical attitude and alertness towards conditions that may
indicate a possible distortion or behaviours contrary to binding regulations in the area of provided services;
• when the statutory auditor or the audit firm provides to the audited entity, its parent undertaking or its
controlled undertakings, for a period of three or more consecutive financial years, non-audit services other
than those referred to in point 3 of this Policy, the total fees for such services shall be limited to no more than
70 % of the average of the fees paid in the last three consecutive financial years for the statutory audit(s) of
the audited entity and, where applicable, of its parent undertaking, of its controlled undertakings and of the
consolidated financial statements of TOYA S.A. Capital Group of undertakings;
• providing permitted non-audit services is allowed only subject to the approval of the Audit Committee by the
mean of appropriate resolution. The Audit Committee may approve providing permitted non-audit services if
there is a justified need to use such services by one of the Company’s bodies, after it has properly assessed
threats to independence and the safeguards applied in accordance with Articles 69-73 of the Act of 11 May
2017 on Statutory Auditors, Audit Firms and Public Oversight
Due to the fact that selection of audit firm in 2022 did not concern the extension of the contract for the audit of the
financial statements, but the recommendation of the "TOYA" S.A. Audit Committee regarding the establishment of an
audit company auditing the financial statements of "TOYA" S.A. in the years 2020-2022, it met the applicable
conditions and was prepared following the selection procedure organized by the Company that met the applicable
criteria, consisting of:
• inviting any audit firms to submit proposals for the provision of the statutory audit service on the condition
that Article 17(3) of the Regulation (EU) no 537/2014 of the European Parliament and of the Council of 16
April 2016 on specific requirements regarding statutory audit of public-interest entities and repealing
Commission Decision 2005/909/EC;
• organization of the tender process does not in any way preclude the participation in the selection procedure
of firms which received less than 15 % of the total audit fees from public-interest entities in the Member
State concerned in the previous calendar year, included in the list of the audit firms, referred to in Article 91
of the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Oversight;
• the audited entity shall prepare tender documents for the attention of the invited audit firms. Those tender
documents shall allow them to understand the business of the audited entity and the type of statutory audit
that is to be carried out. The tender documents shall contain transparent and non-discriminatory selection
TOYA S.A. CAPITAL GROUP
Directors’ report on the operations of TOYA S.A. Group for 12 months ended 31 December 2022
54
criteria that shall be used by the audited entity to evaluate the proposals made by statutory auditors or audit
firms;
• the audited entity shall be free to determine the selection procedure and may conduct direct negotiations
with interested tenderers in the course of the procedure;
• the audited entity shall evaluate the proposals made by the audit firms in accordance with the selection
criteria predefined in the tender documents
• the Company shall prepare a report on the conclusions of the selection procedure, which shall be approved
by the resolution of the Audit Committee;
• the Company and the Audit Committee shall take into consideration any findings or conclusions of annual
report, referred to in article 90 point 5 of the Act of 11 May 2017 on Statutory Auditors, Audit Firms and
Public Oversight;
• At the request of the Financial Supervision Authority (KNF), the Company shall prove that the selection
procedure was conducted in accordance with the requirements referred to in Article 130 points 2 and 3 of
the Act of 11 May 2017 on Statutory Auditors, Audit Firms and Public Oversight.
During 2022, the Audit Committee held three meetings.
23.12 Description of diversity policy applied for administrative bodies, managing and supervising the Issuer as
regards the aspects such as, for example, age, gender or education and experience, aims of this policy,
ways of its realization and results in the particular reporting period (and in case the Company does not
apply such policy, explanation of the reasons for such decision)
The Company did not prepare and does not pursue a diversity policy. The position of the Company’s Management
Board is that the sole criterion for appointing persons to perform functions in the Company’s authorities and its key
management is the experience and competence of the candidates for performing the given functions. The Company
declares that it will consider developing a diversity policy in the future. The Company avoids discrimination on any
ground.
Management Board of Toya S.A.
Date
Name and surname
Position
Signature
23.03.2023
Grzegorz Pinkosz
President of the
Management Board
23.03.2023
Maciej Lubnauer
Vice-President of the
Management Board
23.03.2023
Robert Borys
Vice-President of the
Management Board
