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 Separate Financial Statements

Opinion

We have audited the accompanying annual separate financial statements of Toya S.A. (the “Entity”),

which comprise:

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

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

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

• the separate statement of changes in equity;

• the separate statement of cash flows;

and

• accounting policy and other explanatory notes;

(the “separate financial statements”).

In our opinion, the accompanying separate financial statements of the Entity:

• give a true and fair view of the unconsolidated financial position of the Entity as at 31 December

2022 and of its unconsolidated financial performance and its unconsolidated 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 Entity's articles of association;

• have been prepared, in all material respects, on the basis of properly maintained accounting

records in accordance with chapter 2 of the accounting act dated 29 September 1994 (the

“Accounting Act”).

Our audit opinion on the separate 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 Separate 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 Entity 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, together with the ethical requirements that are relevant to our audit of the separate

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 Entity 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 separate 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 separate 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 594 310 thousand (for the year 2021: PLN 543 098 thousand).

Refer to disclosures in the separate financial statements: Note 2.21 „Revenue recognition”, Note 22

„Operating segments” and Note 23 „Sales revenue”.

Key audit matter Our response

In the year ended 31 December 2022, the

Company’s sale of goods accounted for total

revenue in the financial statements.

The revenue from sales is one of the key

indicator for the assessment of Company’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 Company’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 of non-existent sale transactions in

the separate financial statements.

In the wake of the above factors, we have

considered revenue recognition to be associated

with a significant risk of material misstatement in

the separate financial statements. Therefore, the

area required our increased attention in the audit

and as such was determined to be a key audit

matter.

recognition and segregation of duties

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;

‒ obtaining confirmation of selected unpaid

sale invoices as at 31 December 2022

issued to third parties and regarding to

related parties – confirmation of all

outstanding balances as at 31 December

2022;

‒ 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 Company’s

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;

‒ 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 Entity for the

Separate Financial Statements

The Management Board of the Entity is responsible for the preparation, on the basis of properly

maintained accounting records, of separate 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 Entity's articles of association and for such internal control as the Management Board of the Entity

determines is necessary to enable the preparation of separate financial statements that are free from

material misstatement, whether due to fraud or error.

In preparing the separate financial statements, the Management Board of the Entity is responsible for

assessing the Entity'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 Entity either intends to liquidate the Entity or to cease operations, or has no realistic alternative but

to do so.

According to the Accounting Act, the Management Board and members of the Supervisory Board of

the Entity are required to ensure that the separate financial statements are in compliance with the

requirements set forth in the Accounting Act. Members of the Supervisory Board of the Entity are

responsible for overseeing the Entity’s financial reporting process.

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

Our objectives are to obtain reasonable assurance about whether the separate 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 separate financial statements.

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

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

affairs of the Entity.

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 separate 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 Entity'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 Entity;

• conclude on the appropriateness of the Management Board of the 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 Entity’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 separate financial statements

to the related disclosures in the separate 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 separate financial statements. However,

future events or conditions may cause the Entity to cease to continue as a going concern;

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

including the disclosures, and whether the separate financial statements represent the underlying

transactions and events in a manner that achieves fair presentation.

We communicate with the Audit Committee of the 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 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 Entity, we determine those matters

that were of most significance in the audit of the separate 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 separate 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. 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 separate 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 separate financial statements and the report on

activities;

(together the “other information”).

Responsibility of the Management Board and Supervisory Board

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

applicable laws.

The Management Board and members of the Supervisory Board of the 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 separate financial statements does not cover the other information.

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

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

with the separate 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 separate financial statements.

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

to report whether the Entity 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 separate financial statements.

Opinion on the Report on Activities

Based on the work undertaken in the course of our audit of the separate 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 separate 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 separate financial statements.

Statement on other Information

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

separate 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 separate financial statements of the

Entity 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.

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