Raport

KPMG Audyt spółka z ograniczoną odpowiedzialnością sp.k.

ul. Inflancka 4A, 00-189 Warsaw, Poland

tel. +48 (22) 528 11 00, fax +48 (22) 528 10 09, kpmg@kpmg.pl

KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k., a Polish limited

partnership and a member firm of the KPMG global organization of independent

member firms affiliated with KPMG International Limited, a private English company

limited by guarantee.

Company registered at the District Court

for the capital city of Warsaw in Warsaw,

12th Commercial Division of the National

Business Register.

KRS 0000339379

NIP: 527-26-15-362

REGON: 142078130

This document is a free translation of the Polish original. Terminology current

in Anglo-Saxon countries has been used where practicable for the purposes

of this translation in order to aid understanding. The binding Polish original

should be referred to in matters of interpretation.

Independent Auditor's

Report

To the General Shareholders’ Meeting and Supervisory Board

of Toya S.A.

Report on the Audit of the Annual Consolidated Financial Statements

Opinion

We have audited the accompanying annual consolidated financial statements of Toya S.A. Group (the

“Group”), whose parent entity is Toya S.A. (the „Parent Entity”), which comprise:

• the consolidated statement of financial position as at 31 December 2022;

and, for the period from 1 January to 31 December 2022:

• the consolidated statement of profit or loss and other comprehensive income;

• the consolidated statement of changes in equity;

• the consolidated statement of cash flows;

and

• accounting policy and other explanatory notes;

(the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements of the Group:

• give a true and fair view of the consolidated financial position of the Group as at 31 December

2022 and of its consolidated financial performance and its consolidated cash flows for the financial

year then ended in accordance with International Financial Reporting Standards, as adopted by

the European Union (“IFRS EU”) and the adopted accounting policy;

• comply, in all material respects, with regard to form and content, with applicable laws and the

provisions of the Parent Entity's articles of association.

Our audit opinion on the consolidated financial statements is consistent with our report to the Audit

Committee dated 21 March 2023.

Basis for Opinion

We conducted our audit in accordance with:

• International Standards on Auditing as adopted by the National Council of Statutory Auditors as

National Standards on Auditing (the “NSA”); and

• the act on statutory auditors, audit firms and public oversight dated 11 May 2017 (the “Act on

statutory auditors”); and

• regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on

specific requirements regarding statutory audit of public-interest entities and repealing

Commission Decision 2005/909/EC (the “EU Regulation”); and

• other applicable laws.

Our responsibilities under those standards and regulations are further described in the Auditor’s

Responsibility for the Audit of the Consolidated Financial Statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our opinion.

Independence and Ethics

We are independent of the Group in accordance with International Ethics Standards Board for

Accountants International Code of Ethics for Professional Accountants (including International

Independence Standards) (“IESBA Code”) as adopted by the resolution of the National Council of

Statutory Auditors („NCSA”), together with the ethical requirements that are relevant to our audit of the

consolidated financial statements in Poland and we have fulfilled our other ethical responsibilities in

accordance with these requirements and the IESBA Code. During our audit the key statutory auditor

and the audit firm remained independent of the Group in accordance with requirements of the Act on

statutory auditors and the EU Regulation.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in

our audit of the consolidated financial statements of the current period. They are the most significant

assessed risks of material misstatements, including those due to fraud. Key audit matters were

addressed in the context of our audit of the consolidated financial statements as a whole, and in

forming our opinion thereon we have summarised our response to those risks. We do not provide

a separate opinion on these matters. We have determined the following key audit matters:

Revenue recognition

Revenue for the year 2022: PLN 762 590 thousand (for the year 2021: PLN 686 737 thousand).

Refer to disclosures in the separate financial statements: Note 3.23 „Revenue recognition”, Note 23

„Operating segments” and Note 24 „Sales revenue”.

Key audit matter Our response

In the year ended 31 December 2022, the

Group’s sale of goods accounted for total

revenue in the consolidated financial statements.

The revenue from sales is one of the key

indicator for the assessment of Group’s

performance, the Management bonus system as

well as is of analysts and investors interest, that

significantly increase the risk of fraud through the

Our audit procedures in the area included,

among other things:

‒ assessing the Group’s revenue recognition

policy for compliance with relevant provisions

of the financial reporting standards;

‒ evaluating design and implementation of

internal control regarding the time of revenue

recognition and segregation of duties

recognition of non-existent sale transactions in

the consolidated financial statements.

Furthermore, part of the Group’s revenue from

sales require complex analysis in identifying the

time when performance obligation is satisfied,

therefore the appropriate time of revenue

recognition.

In the wake of the above factors, we have

considered revenue recognition to be associated

with a significant risk of material misstatement in

the consolidated financial statements. Therefore,

the area required our increased attention in the

audit and as such was determined to be a key

audit matter.

implemented in the revenue recognition

process in order to mitigate the risk of fraud

in the separate financial statements;

‒ analysis of significant credit notes issued

after the balance sheet date in terms of

revenue recognition correctness in audited

financial year;

‒ based on selected sample confirmation of

sale transactions to a source documentation

such as: invoices and transport documents

or confirmation of payment;

‒ assessing for reasonableness the amount of

sales throughout comparison of revenue

recognized in 2022 with the amount of sales

expected by us, based on the cashflow

analysis adjusted among others by change in

the balance of receivables;

‒ analysis of selected samples Group’s sale

transactions on the turn-of-the-year in terms

of revenue recognition in appropriate time

throughout verification of source

documentation such as sale invoices and

transportation evidence confirming delivery

of goods;

‒ examining appropriateness and

completeness of revenue recognition-related

disclosures in the financial statements

regarding to relevant information required by

the applicable financial reporting standards.

Responsibility of the Management Board and Supervisory Board of the Parent Entity for the

Consolidated Financial Statements

The Management Board of the Parent Entity is responsible for the preparation of consolidated

financial statements that give a true and fair view in accordance with IFRS EU, the adopted accounting

policy, the applicable laws and the provisions of the Parent Entity's articles of association and for such

internal control as the Management Board of the Parent Entity determines is necessary to enable the

preparation of consolidated financial statements that are free from material misstatement, whether due

to fraud or error.

In preparing the consolidated financial statements, the Management Board of the Parent Entity is

responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable,

matters related to going concern and using the going concern basis of accounting unless the

Management Board of the Parent Entity either intends to liquidate the Group or to cease operations, or

has no realistic alternative but to do so.

According to the accounting act dated 29 September 1994 (the “Accounting Act”), the Management

Board and members of the Supervisory Board of the Parent Entity are required to ensure that the

consolidated financial statements are in compliance with the requirements set forth in the Accounting

Act. Members of the Supervisory Board of the Parent Entity are responsible for overseeing the

Group’s financial reporting process.

Auditor’s Responsibility for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial

statements as a whole are free from material misstatement, whether due to fraud or error, and to issue

an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is

not a guarantee that an audit conducted in accordance with NSAs will always detect a material

misstatement when it exists. Misstatements can arise from fraud or error and are considered material

if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these consolidated financial statements.

The scope of audit does not include assurance on the future viability of the Group or on the efficiency

or effectiveness with which the Management Board of the Parent Entity has conducted or will conduct

the affairs of the Group.

As part of an audit in accordance with NSAs, we exercise professional judgment and maintain

professional scepticism throughout the audit. We also:

• identify and assess the risks of material misstatement of the consolidated financial statements,

whether due to fraud or error, design and perform audit procedures responsive to those risks, and

obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk

of not detecting a material misstatement resulting from fraud is higher than for one resulting from

error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the

override of internal control;

• obtain an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the Group's internal control;

• evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the Management Board of the Parent Entity;

• conclude on the appropriateness of the Management Board of the Parent Entity’s use of the going

concern basis of accounting and, based on the audit evidence obtained, whether a material

uncertainty exists related to events or conditions that may cast significant doubt on the Group’s

ability to continue as a going concern. If we conclude that a material uncertainty exists, we are

required to draw attention in our auditors’ report on the audit of the consolidated financial

statements to the related disclosures in the consolidated financial statements or, if such

disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit

evidence obtained up to the date of our auditors’ report on the audit of the consolidated financial

statements. However, future events or conditions may cause the Group to cease to continue as

a going concern;

• evaluate the overall presentation, structure and content of the consolidated financial statements,

including the disclosures, and whether the consolidated financial statements represent the

underlying transactions and events in a manner that achieves fair presentation.

• obtain sufficient appropriate audit evidence regarding the financial information of the entities or

business activities within the Group to express an opinion on the consolidated financial

statements. We are responsible for the direction, supervision and performance of the group audit.

We remain solely responsible for our audit opinion.

We communicate with the Audit Committee of the Parent Entity regarding, among other matters, the

planned scope and timing of the audit and significant audit findings, including any significant

deficiencies in internal control that we identify during our audit.

We provide the Audit Committee of the Parent Entity with a statement that we have complied with

relevant ethical requirements regarding independence, and communicate with them all relationships

and other matters that may reasonably be thought to bear on our independence, and where

applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the Audit Committee of the Parent Entity, we determine those

matters that were of most significance in the audit of the consolidated financial statements of the

current reporting period and are therefore the key audit matters. We describe these matters in our

auditors’ report on the audit of the consolidated financial statements unless law or regulation

precludes public disclosure about the matter or when, in extremely rare circumstances, we determine

that a matter should not be communicated in our report because the adverse consequences of doing

so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Information

The other information comprises:

• the letter of the President of the Management Board;

• the selected financial data;

• the Directors’ Report on the operations of TOYA S.A. Capital Group for the year ended 31

December 2022 (the “Report on activities”), including the corporate governance statement, which

is a separate part of the Report on activities;

• the statement of the Management Board regarding the preparation of the consolidated financial

statements and report on activities;

• the Management Board’s information regarding the appointment of the audit firm;

• the statement of the Supervisory Board regarding the Audit Committee; and

• the Supervisory Board’s assessment of the consolidated financial statements and the report on

activities;

(together the “other information”).

Responsibility of the Management Board and Supervisory Board

The Management Board of the Parent Entity is responsible for the other information in accordance

with applicable laws.

The Management Board and members of the Supervisory Board of the Parent Entity are required to

ensure that the report on activities, including each of its separate parts, is in compliance with the

requirements set forth in the Accounting Act.

Auditor’s Responsibility

Our opinion on the consolidated financial statements does not cover the other information.

In connection with our audit of the consolidated financial statements, our responsibility was to read the

other information and, in doing so, consider whether the other information is materially inconsistent

with the consolidated financial statements or our knowledge obtained in the audit, or otherwise

appears to be materially misstated. If, based on the work we have performed, we conclude that there

is a material misstatement in the other information, we are required to report that fact.

In accordance with the Act on statutory auditors our responsibility was to report if the report on

activities was prepared in accordance with applicable laws and the information given in the report on

activities is consistent with the consolidated financial statements.

Moreover, in accordance with the requirements of the Act on statutory auditors our responsibility was

to report whether the Group included in the statement on corporate governance the information

required by the applicable laws and regulations, and in relation to specific information indicated in

those laws or regulations, to determine whether it complies with the applicable laws and is consistent

with the consolidated financial statements.

Opinion on the Report on Activities

Based on the work undertaken in the course of our audit of the consolidated financial statements, in

our opinion, the accompanying report on activities, in all material respects:

• has been prepared in accordance with applicable laws, and

• is consistent with the consolidated financial statements.

Opinion on the Statement on Corporate Governance

In our opinion, the corporate governance statement, which is a separate part of the report on activities,

includes the information required by paragraph 70 subparagraph 6 point 5 of the Decree of the

Ministry of Finance dated 29 March 2018 on current and periodic information provided by issuers of

securities and the conditions for recognition as equivalent of information required by the laws of a non-

member state (the “decree”).

Furthermore, in our opinion, the information identified in paragraph 70 subparagraph 6 point 5 letter c-

f, h and letter i of the decree, included in the corporate governance statement, in all material respects:

• has been prepared in accordance with applicable laws; and

• is consistent with the consolidated financial statements.

Statement on other Information

Furthermore, based on our knowledge about the Group and its environment obtained in the audit of

the consolidated financial statements, we have not identified material misstatements in the report on

activities and the other information.

Report on Other Legal and Regulatory Requirements

Statement on Services Other than Audit of the Financial Statements

To the best of our knowledge and belief, we did not provide prohibited non-audit services referred to in

Art. 5 paragraph 1 second subparagraph of the EU Regulation and Art. 136 of the act on statutory

auditors.

Appointment of the Audit Firm

We have been appointed for the first time to audit the annual consolidated financial statements of the

Group by resolution of the Supervisory Board dated 10 December 2019. Our period of total

uninterrupted engagement is 3 years, covering the periods ended 31 December 2020 to 31 December

2022.

Opinion on Compliance of the Consolidated Financial Statements Prepared in the Single

Electronic Reporting Format with the Requirements of the Regulatory Technical Standards

on the Specification of a Single Electronic Reporting Format

As part of our audit of the consolidated financial statements we were engaged to perform a reasonable

assurance engagement in order to express an opinion on whether the consolidated financial

statements of the Group as at 31 December 2022 and for the year then ended prepared in the single

electronic reporting format included in the reporting package named FILE NAME.zip (the “consolidated

financial statements in the ESEF format”) were tagged in accordance with the requirements specified

in the Commission Delegated Regulation (EU) of 17 December 2018 supplementing Directive

2004/109/EC of the European Parliament and of the Council with regard to regulatory technical

standards on the specification of a single electronic reporting format (the “ESEF Regulation”).

Defining the Criteria and Description of the Subject Matter of the Service

The consolidated financial statements in the ESEF format have been prepared by the Management

Board of the Parent Entity to meet the tagging requirements and technical requirements for the

specification of a single electronic reporting format, which are defined in the ESEF Regulation. The

subject of our assurance service is the compliance of the tagging of the consolidated financial

statements in the ESEF format with the requirements of the ESEF Regulation, and the requirements

set out in these regulations are, in our opinion, appropriate criteria for our opinion.

Responsibility of the Management Board and Supervisory Board of the Parent Entity

The Management Board of the Parent Entity is responsible for the preparation of consolidated

financial statements in the ESEF format in accordance with the tagging requirements and technical

conditions of a single electronic reporting format, which are specified in the ESEF Regulation. Such

responsibility includes the selection and application of appropriate XBRL tags using the taxonomy

specified in that regulation.

This responsibility of the Management Board of the Parent Entity includes designing, implementing

and maintaining internal control relevant to the preparation of the consolidated financial statements in

the ESEF format that is free from material non-compliance with requirements specified in the ESEF

Regulation, whether due to fraud or error.

The members of the Parent Entity’s Supervisory Board are responsible for overseeing the financial

reporting process, including the preparation of financial statements in the format required by applicable

law.

Auditor’s Responsibility

Our objective is to issue an opinion about whether the consolidated financial statements in the ESEF

format were tagged in accordance with the requirements specified in the ESEF Regulation.

We conducted our engagement in accordance with the National Standard on Assurance Services

Other than Audit or Review 3001PL “Audit of financial statements prepared in a single electronic

reporting format” as adopted by the NCSA (“NSAE 3001PL”) and where applicable, in accordance with

the International Standard on Assurance Engagements 3000 (Revised) “Assurance Engagements

Other than Audits or Reviews of Historical Financial Information” as adopted by the NCSA as the

National Standard on Assurance Engagement 3000 (Revised) (“NSAE 3000 (R)”). These standards

requires that the auditor plans and performs procedures to obtain reasonable assurance about

whether the consolidated financial statements in the ESEF format were prepared in accordance with

specified criteria.

Reasonable assurance is a high level of assurance, but it is not guaranteed that the assurance

engagement conducted in accordance with NSAE 3001PL and where applicable, in accordance with

NSAE 3000 (R) will always detect material misstatement.

The procedures selected depend on the auditor’s judgment, including the assessment of the risks of

material misstatements, whether due to fraud or error. In making those risk assessments, the auditor

has considered internal controls relevant to the preparation of the consolidated financial statements in

the ESEF format in accordance with the specified criteria in order to design procedures that are

appropriate, which provide the auditor with sufficient and appropriate evidence under the

circumstances. The assessment of internal controls was not performed for the purpose of expressing

an opinion thereon.

Summary of the Work Performed

Our procedures planned and performed included, among others:

• obtaining an understanding of the process of preparing the consolidated financial statements in

the ESEF format, including selection and application of XBRL tags by the Parent Entity and

ensuring compliance with the ESEF Regulation, including an understanding of the mechanisms of

internal control relevant to this process,

• reconciling the tagged information included in the consolidated financial statements in the ESEF

format to the audited consolidated financial statements,

• assessing, by using a specialized IT tool, compliance with the regulatory technical standards

regarding the specification of a single electronic reporting format,

• assessing the completeness of tagging with respect to

- all numbers in a declared currency disclosed in the consolidated statement of financial

position, the consolidated statement of profit or loss and other comprehensive income, the

consolidated statement of changes in equity and the consolidated statement of cash flows in

the consolidated financial statements in the ESEF format

- notes comprising a summary of significant accounting policies and other explanatory

information on a sample of XBRL tags, in particular block tags, in accordance with the

mandatory elements of the core taxonomy contained in Annex II of ESEF Regulation,

• inspecting, on a sample basis, the block tagging to assess whether the regulatory technical

standards ‘requirement has been correctly applied to include the relevant data within the scope of

the digital tag, on a sample basis

• assessing whether the XBRL tags from the core taxonomy specified in the ESEF Regulation were

properly applied, and whether the taxonomy extensions were used in situations where the closest

core taxonomy element could misrepresent the accounting meaning of the disclosure,

• assessing the correctness of anchoring of the applied taxonomy extensions in the core taxonomy

specified in the ESEF Regulation,

• inspecting, on a sample basis, how the data is presented within the digital tag to assess whether

the presentation is reasonable within the boundaries of the technical capabilities connected with

block tagging.

Requirements of the Quality Control and Ethical Requirements, including Independence

The firm applies International Standard on Quality Management (PL) 1 “Quality Management for Firms

that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services

Engagement” as adopted by the Council of Polish Agency for Audit Oversight as National Standard on

Quality Control 1, which requires us to design, implement and operate a system of quality

management including policies or procedures regarding compliance with ethical requirements,

professional standards and applicable legal and regulatory requirements.

We have complied with the independence and other ethical requirements of the IESBA Code as

adopted by the resolution of the NCSA, which is founded on fundamental principles of integrity,

objectivity, professional competence and due care, confidentiality and professional behaviour as well

as other independence and ethical requirements, applicable to this assurance engagement in Poland.

Opinion on Compliance with the Requirements of ESEF Regulation

Our opinion has been formed on the basis of, and is subject to, the matters outlined above.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our

opinion on compliance with the requirements of the ESEF Regulation.

In our opinion, the consolidated financial statements in the ESEF format as at 31 December 2022 and

for the year then ended was tagged, in all material respects, in accordance with the requirements of

the ESEF Regulation.

On behalf of audit firm

KPMG Audyt Spółka z ograniczoną odpowiedzialnością sp.k.

Registration No. 3546

Signed on the Polish original

Wojciech Drzymała

Key Statutory Auditor

Registration No. 90095

Proxy

Wrocław, 23 March 2023