DIRECTORS’ REPORT ON THE OPERATIONS OF
TOYA S.A.
IN 2022
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
2
Contents
1. DESCRIPTION OF THE COMPANY ........................................................................................................................ 5
1.1 TOYA S.A. – general information ....................................................................................................................... 5
1.2 The Company’s Management Board and Supervisory Board ............................................................................ 5
1.3 Share capital ...................................................................................................................................................... 6
1.4 Own shares ........................................................................................................................................................ 6
1.5 Shareholders ...................................................................................................................................................... 6
1.6 Shares held by managers and supervisors ........................................................................................................ 7
1.7 Agreements that may lead to changes in the structure of shares held by the current shareholders ................ 7
1.8 Total value of remuneration, rewards and benefits paid or due to managers and supervisors ........................ 8
1.9 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 ........................ 9
2. CHANGES IN THE BASIC GROUP MANAGEMENT METHODS ................................................................................ 9
3. THE MOST SIGNIFICANT EVENTS OF 2022 AND SIGNIFICANT ACHIEVEMENTS OR FAILURES .............................. 9
3.1 Registration of increase in the share capital of a subsidiary and contribution to the share capital of Yato
Tools (Jiaxing) Co. Ltd. .................................................................................................................................................... 9
3.2 Appointment of a Member of the Management Board .................................................................................... 9
3.3 Annex to a significant contract.......................................................................................................................... 9
3.4 Transactions in major blocks of shares ............................................................................................................. 9
3.5 Annex to a significant agreement ..................................................................................................................... 9
3.6 Annex to a significant agreement ................................................................................................................... 10
3.7 Transactions in major blocks of shares ........................................................................................................... 10
3.8 Annex to a significant agreement ................................................................................................................... 10
3.9 Annex to a significant agreement ................................................................................................................... 10
3.10 Resolutions adopted by the Extraordinary General Meeting of Shareholders on 28 June 2022 ..................... 10
3.11 Transaction in major blocks of shares ............................................................................................................. 10
3.12 Annex to the overdraft agreement .................................................................................................................. 11
3.13 Transaction in major blocks of shares ............................................................................................................. 11
3.14 Annex to the overdraft agreement .................................................................................................................. 11
3.15 Contributions to the share capital of Yato Tools (Jiaxing) Co. Ltd. .................................................................. 11
3.16 Impact of the war between Ukraine and Russia on the Company's operations .............................................. 11
4. INFORMATION ON THE ISSUER’S ORGANISATIONAL AND EQUITY RELATIONSHIP WITH OTHER ENTITIES AND
IDENTIFICATION OF THE ISSUER’S MAJOR DOMESTIC AND FOREIGN INVESTMENTS (SECURITIES, FINANCIAL
INSTRUMENTS, INTANGIBLE ASSETS AND INVESTMENT PROPERTIES) INCLUDING CAPITAL INVESTMENTS EXCEPT
FOR THE GROUP OF RELATED PARTIES AND THE DESCRIPTION OF FINANCING METHODS ........................................12
4.1 Equity links ...................................................................................................................................................... 12
4.2 Other significant links ...................................................................................................................................... 12
4.3 Major domestic and foreign investments ........................................................................................................ 12
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
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5. MAJOR R&D ACHIEVEMENTS ............................................................................................................................12
6. OVERVIEW OF KEY ECONOMIC AND FINANCIAL FIGURES AND DESCRIPTION OF FACTORS AND EVENTS,
ESPECIALLY UNTYPICAL, AFFECTING THE COMPANY’S OPERATIONS IN 2022 .............................................................13
7. 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 IN THE
NEXT FINANCIAL YEAR ...............................................................................................................................................17
8. DIFFERENCES BETWEEN THE FINANCIAL RESULTS INDICATED IN THE ANNUAL REPORT AND EARLIER
FORECASTS ................................................................................................................................................................18
9. DESCRIPTION OF MAJOR RISK FACTORS AND THREATS, SPECIFYING THE EXTENT TO WHICH THE ISSUER IS
EXPOSED TO THEM ....................................................................................................................................................19
9.1 Financial risks .................................................................................................................................................. 19
9.2 Non-financial risks ........................................................................................................................................... 19
9.3 External and internal factors crucial for the Company’s development and analysis of the Company’s
development perspectives ............................................................................................................................................ 19
10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT ....................................................................................21
10.1 Financial instruments in the scope of the risk of price change, credit and liquidity risks ................................ 21
10.2 Objectives and methods of financial risk management .................................................................................. 21
11. ASSESSMENT OF FINANCIAL RESOURCES MANAGEMENT AND THE ABILITY TO COVER LIABILITIES ...............21
12. ASSESSMENT OF THE ABILITY TO CARRY OUT INVESTMENT OBJECTIVES ......................................................22
13. MAIN COMMODITY GROUPS ........................................................................................................................22
13.1 Commodity groups .......................................................................................................................................... 22
13.2 Sales according to product groups .................................................................................................................. 24
14. MAIN SELLING MARKETS ...............................................................................................................................24
14.1 Sales structure ................................................................................................................................................. 24
14.2 Suppliers .......................................................................................................................................................... 26
15. CONCLUDED AGREEMENTS IMPORTANT TO THE COMPANY’S OPERATIONS .................................................27
16. THE ENTITY AUDITING THE FINANCIAL STATEMENTS ....................................................................................27
17. RELATED PARTY TRANSACTIONS ...................................................................................................................28
18. DISPUTES ......................................................................................................................................................28
19. LOANS AND BORROWINGS ...........................................................................................................................28
20. EXTENDED LOANS AND BORROWINGS ..........................................................................................................30
21. GUARANTEES AND SURETIES GRANTED ........................................................................................................30
22. CONTINGENT LIABILITIES AND ASSETS ..........................................................................................................30
23. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE ...............................................................................30
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
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23.1 Change in the composition of the Audit Committee of TOYA S.A. ................................................................... 30
24. STATEMENT ON THE APPLICATION OF CORPORATE GOVERNANCE PRINCIPLES ............................................32
24.1 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 .................................................................................................................................................... 32
24.2 An indication to the extent that the 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 ........................... 32
24.3 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 ...................................................................................... 36
24.4 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.......................................................................................... 36
24.5 Indication of the owners of any securities, which provide special control rights, together with the description
of the rights .................................................................................................................................................................. 37
24.6 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 .......................... 37
24.7 Limitations in transferring the ownership right to the issuer’s securities ....................................................... 37
24.8 Description of principles concerning appointment and dismissal of managers and their entitlements, in
particular the right to decide on issuance or redemption of shares ............................................................................. 37
24.9 Principles of introducing amendments to the articles of association .............................................................. 38
24.10 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 ................................................................................................................................... 38
24.11 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: ................................................................................................................. 44
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
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1. DESCRIPTION OF THE COMPANY
1.1 TOYA S.A. – general information
TOYA S.A. (hereinafter referred to as the “Company”) is a joint-stock company, established on the basis
of the Commercial Companies Code. The 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 court decision
of 3 December 1999, the Company was entered in the Commercial Register maintained by the District Court for
Wrocław-Fabryczna, 6th Commercial Division, under entry No 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
Company in the Register of Entrepreneurs, with the reference number KRS 0000066712. The entry in the Register took
place on 5 December 2001.
The Company is a successor of the civil law partnership “TOYA IMPORT-EKSPORT” with its registered office in Wrocław,
which began to operate in August 1990. The partners, given the scale of the business and its rapid development, decided
to establish a joint-stock company and transfer the business of the civil partnership to the new company.
Duration of the Company is unlimited.
As at the date of submission of the annual report, TOYA S.A. has 1 branch located outside its 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 Company distributes goods manufactured and supplied
mainly by companies located in China. For many years, the Company has been implementing its strategy of expanding
into 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 Company’s shares have been listed on the Warsaw Stock Exchange.
1.2 The 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.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
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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 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.
1.3 Share capital
As at 31 December 2022, the share capital amounted to PLN 7,504,222.60 and comprises 75,042,226 shares
with a par value of PLN 0.1 each.
1.4 Own shares
The Company does not hold any own shares.
1.5 Shareholders
According to information provided to TOYA S.A. by its shareholders, the 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:
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
7
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.
1.6 Shares held by managers and supervisors
1.6.1 Shares held by members of the 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%
1.6.2 Shares held by members of the 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
323,925.30
3,239,253
4.32%
Grzegorz Maciąg
5,275
527.50
5,275
0.01%
TOTAL members of the
Supervisory Board
31,528,832
3,152,883.20
31,528,832
42.02%
1.6.3 Information about the employee share ownership plan control system
In 2022, there were no employee share ownership plans at the Company.
1.7 Agreements that may lead to changes in the structure of shares held by the current shareholders
The Company has no knowledge of any agreements that may lead to future changes in the structure of shares held by
the current shareholders.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
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1.8 Total value of remuneration, rewards and benefits paid or due to managers and supervisors
Remuneration of the 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)
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
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 the 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.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
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1.9 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 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
There were no significant changes in the methods of managing the Company in 2022.
3. THE MOST SIGNIFICANT EVENTS OF 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.
TOYA S.A.
Directors’ report on the Company’s operations 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 S.A. 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.
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.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
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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 Company's operations
The Company 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 Company 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 Company 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 acts. The Company 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
Company’s control. This may have an impact on trading with customers present in these markets in the coming quarters.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
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4. INFORMATION ON THE ISSUER’S ORGANISATIONAL AND EQUITY RELATIONSHIP WITH OTHER
ENTITIES AND IDENTIFICATION OF THE ISSUER’S MAJOR DOMESTIC AND FOREIGN
INVESTMENTS (SECURITIES, FINANCIAL INSTRUMENTS, INTANGIBLE ASSETS AND
INVESTMENT PROPERTIES) INCLUDING CAPITAL INVESTMENTS EXCEPT FOR THE GROUP OF
RELATED PARTIES AND THE DESCRIPTION OF FINANCING METHODS
4.1 Equity links
The table below presents the main information on the Company and its equity links as at the date of publication of the
report on operations:
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
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
4.2 Other significant links
As at the date of publication of the report on operations, the Company had personal links with the following entities
(this summary includes entities with whom the 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 financial statements.
4.3 Major domestic and foreign investments
Beside capital investments described in point 4.1, the Company does not have any other capital investments, including
in securities, financial instruments, intangible assets and investment properties.
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 4,500 thousand (PLN 19,769 thousand). Apart from that, no deposits or capital investments were made
within the Capital Group.
5. MAJOR R&D ACHIEVEMENTS
The Company 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. The Product Development Department
- an organizational unit of the Company, has been analysing market trends, analysing their growth potential and
conceptual work for specific groups of tools for many years. These works are financed from the Company's own funds.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
13
6. OVERVIEW OF KEY ECONOMIC AND FINANCIAL FIGURES AND DESCRIPTION OF FACTORS AND EVENTS,
ESPECIALLY UNTYPICAL, AFFECTING THE COMPANY’S OPERATIONS IN 2022
Revenue and profitability of TOYA S.A. (PLN ‘000).
For 12 months ended 31 December
2022
2021
Sales revenue
594,310
543,098
Gross sales profit
159,789
159,449
Operating profit
66,421
79,401
Profit before tax
57,547
78,391
Net profit
46,069
63,242
In 2022, sales revenues amounted to PLN 594,310 thousand and were higher than the revenues achieved in 2021 by
PLN 51,212 thousand. i.e. by 9.4%. An increase was caused by a higher sales volume in almost all distribution channels.
The largest increase in sales, by PLN 32,159 thousand, was recorded in the wholesale channel. The Company recorded
the greatest growth dynamics in the other sales channel (mainly online sales), where revenues increased by 24.9% 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 adapting of the commercial offer to current
customer requirements.
Gross profit on sales increased by PLN 340 thousand in 2022, 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 66,421 thousand was lower than that achieved in 2021 by PLN 12,980
thousand, i.e. by 16.3%. 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 Company 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 Company recorded a surplus of foreign exchange gains over losses in the
amount of PLN 1,023 thousand, as compared to PLN 137 thousand in the prior year.
In order to raise the necessary working capital, the Company uses mainly short-term bank loans. Given the significant
impact of financial costs associated with these loans on the financial result, the Company 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 in 2022 had a negative impact on bank interest costs, which amounted to PLN 8,154 thousand.
compared to PLN 461 thousand in 2021.
The net profit in 2022 amounted to PLN 46,069 thousand and was by PLN 17,173 thousand (i.e. by 27.2%) lower than in
2021.
Profitability ratios of TOYA S.A.
For 12 months ended 31 December
2022
2021
Sales profit margin
26.9%
29.4%
Operating profit margin
11.2%
14.6%
Pre-tax profit margin
9.7%
14.4%
Net profit margin
7.8%
11.6%
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
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
14
For the TOYA S.A., sales profit margin is the basic indicator of the Company'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 2.5 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 Company's offer on the market.
Margin at the level of operating profit, profit before tax and net profit also decreased in 2022 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 TOYA S.A. (PLN ‘000)
For 12 months ended 31 December
2022
2021
Cash flows from operating activities
54,148
(13,764)
Cash flows from investment activities
(23,503)
(21,883)
Cash flows from financial activities
(30,488)
36,292
Change in net cash
157
645
Cash and cash equivalents at the beginning of the period
1,229
584
Cash and cash equivalents at the end of the period
1,386
1,229
In 2022, the Company showed positive cash flows from operating activities, which amounted to PLN 54,148 thousand.
In response to the uncertain market situation resulting from external factors such as inflation or the ongoing conflict
abroad, the Company decided to optimize the level of inventories, however maintaining high ratios of customer order
fulfilment. Inventories decreased by PLN 37,690 thousand. At the same time, short-term trade and other receivables
increased by PLN 26,584 thousand as a result of the high level of sales in December 2022, as compared to December
2021.
In 2022, the Company did not make any significant investment in non-current assets. Cash outflows during that period
were mainly connected with the purchase of exhibition shelves and investments in IT equipment. In addition, the
Company made a contribution to the share capital of Yato Tools (Jiaxing) Co. Ltd., in the amount of PLN 19,769 thousand,
which is the equivalent of USD 4,500 thousand.
In 2022, the Company generated negative cash flows from financing activities in the amount of PLN 30,488 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
3.02
2.18
Quick ratio
0.61
0.24
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 3.02 as at 31 December 2022 in relation to 2.18 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.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
15
The value of the quick ratio increased to 0.61 as at 31 December 2022 in relation to 0.24 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. (PLN ‘000)
31.12.2022
31.12.2021
Non-current assets, including:
107,113
89,523
Property, plant and equipment
17,715
17,419
Intangible assets
3,776
3,189
Right-of-use assets
12,865
14,121
Investments in subsidiaries
70,803
52,984
Current assets, including:
310,289
320,391
Inventory
247,870
285,560
Trade and other receivables
60,186
33,602
% asset structure of TOYA S.A.
31.12.2022
31.12.2021
Non-current assets / Assets
26%
22%
Property, plant and equipment / Assets
4%
4%
Intangible assets / Assets
1%
1%
Right-of-use assets / Assets
3%
3%
Investments in subsidiaries / Assets
17%
13%
Current assets / Assets
74%
78%
Inventory / Assets
59%
70%
Trade and other receivables / Assets
14%
8%
The structure of equity and liabilities of TOYA S.A. (PLN ‘000)
31.12.2022
31.12.2021
Equity
291,541
245,336
Long-term liabilities
23,235
17,411
Short-term liabilities, including:
102,626
147,167
Short term trade and other liabilities
22,664
38,805
% equity and liability structure of TOYA S.A.
31.12.2022
31.12.2021
Equity / Equity and liabilities
70%
60%
Short-term liabilities / Equity and liabilities
25%
36%
Long-term liabilities / Equity and liabilities
6%
4%
Short-term liabilities / Liabilities
82%
89%
Long-term liabilities / Liabilities
18%
11%
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
16
Ratios of return on equity, assets and current assets of TOYA S.A.
For 12 months ended 31 December
2022
2021
Return on assets (ROA)
11%
15%
Return on equity (ROE)
16%
26%
Return on current assets
15%
20%
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 Company’s property, plant and equipment constitute 4% of total assets used in
the Company’s operations. Property, plant and equipment comprise primarily land, buildings and structures necessary
for the Company’s commercial activity. There were no material changes in their structure during the analysed period.
As at 31 December 2022, right-of-use assets constituted 3% of the total balance sheet amount, consistent with 2021.
This item consists mainly of the right of perpetual usufruct of land rented office and warehouse space as well as cars,
forklifts and servers under lease.
As at 31 December 2022, investments in subsidiaries include shares in Toya Romania S.A. in the amount of PLN 1,885
thousand, Yato Tools (Shanghai) Co. Ltd. in the amount of PLN 20,746 thousand and Yato Tools (Jiaxing) Co. Ltd. in the
amount of PLN 48,172 thousand. During the current year, there were no changes in the structure of subsidiaries.
The structure of current assets used in the operations of TOYA S.A. Capital, which as at 31 December 2022 constitute
74% 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 99% of current assets as at
31 December 2022 and 2021.
TOYA S.A. conducts efficient warehouse management by adjusting the stock levels to the customers’ demand. Striving
to optimize storage costs, the Company reduced the level of inventories, the share of which in the balance sheet total
amount decreased from 70% to 59%.
Equity structure and debt ratios of TOYA S.A.
31.12.2022
31.12.2021
Total debt ratio
30%
40%
Equity debt ratio
43%
67%
Long-term debt ratio
6%
4%
Short-term debt ratio
25%
36%
The ratio of coverage of non-current assets with equity and long-term liabilities
294%
293%
Key:
Total debt ratio – the ratio of long- and short-term liabilities to total equity and liabilities
Debt to equity 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 retained earnings totalling PLN 248,104 thousand were the main item in the equity of TOYA
S.A. The Company’s share capital as at 31 December 2022 amounted to PLN 7,504 thousand.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
17
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, TOYA S.A. financed 70% of its operations from equity (60% as at
31 December 2021). As at this date, the Company’s short-term and long-term liabilities due to bank loans amounted to
PLN 82,167 thousand. The long-term debt ratio as at 31 December 2022 amounted to 5.6%.
TOYA S.A. management effectiveness ratios
For 12 months ended 31 December
2022
2021
Inventories turnover period (days)
150
189
Receivables inflow period (days)
36
22
Liabilities repayment period (days)
14
26
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 credit terms
the Company extended to its customers were longer than those received from its suppliers. It implies higher demand
for financing of working capital. In addition, in 2022, the inventories turnover period decreased to 150 days as compared
to 2021, primarily as a result of lower volume of purchases made in 2022, as compared to 2021. It should be noted that
the Company conducts activity associated with selection of offer appropriately to the customer’s needs, increasing the
efficiency of the entire sales group as well as continuous improvement of logistics processes.
Seasonality
The Company’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.
7. 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 IN THE NEXT FINANCIAL YEAR
Toya S.A. – the Parent Company of 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 Company will undertake in order to implement the program are:
• Developing the capital group
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 its registered office in the economic zone in Baibu Town, a town located
in the Zhejiang province of the People's Republic of China, will enable the Company to reorganize the supply
chain by launching the Group's central warehouse in China. This will ensure a better adjustment of stock levels
to rapidly changing demand and will improve the availability of the product offer for each customer.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
18
• Developing the export channel
Romania is the largest export market for the Company. The Company sells products there to its subsidiary, Toya
Romania, which, after developing logistics processes in recent years, is strengthening its position on the local
market. Sales to this subsidiary will remain at a high level in the coming quarters.
The military conflict between Russia, Belarus and Ukraine has an impact on sales to customers on these
markets. It accounted for almost 9% of the total sales of the Company. Toya S.A. is closely following
developments in these countries. The Company's detailed position on the war conflict can be found in point
3.16.
Regardless of the situation referred to above, the Company will strengthen its position on other markets where
it is present. This applies to markets where the Company has traditionally been present for many years, e.g.
the Hungarian market, but also in the Balkans, where the Company has been less visible so far.
The foreign expansion of this entity will be supported by the development of logistics processes in the Capital
Group, based on a newly built warehouse in China, equipped with modern infrastructure.
• Effective products management
The good financial results of the Company 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. 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.
• Development of logistics processes
Toya S.A. conducts analytical work aimed at optimizing logistics processes on the local market. In particular, it
consists in equipping currently used warehouses with modern warehouse automation supporting storage
processes. This process will continue.
• Capital investments
The Company systematically supports the development of subsidiaries. In December 2022, the Company paid
the last capital tranche for Yato Tools (Jiaxing), completing the capital payment process for this subsidiary in
the amount of USD 12.5 million.
The Company continues to monitor the market in search of an attractive acquisition target from outside the
Toya S.A. Capital Group, which would be an added value for the Company.
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 Company's operations and financial results in the near future,
may limit or even prevent intensive development of the Company. Due to the very dynamic development of the
pandemic, its nature, geographical diversity of the Group companies as well as the consequences that cannot be
predicted today, the impact on the Company's financial results is impossible to estimate as at the date of publication of
the financial statements.
8. DIFFERENCES BETWEEN THE FINANCIAL RESULTS INDICATED IN THE ANNUAL REPORT AND EARLIER
FORECASTS
The Company’s Management Board did not publish forecasts of the Company’s performance for 2022.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
19
9. DESCRIPTION OF MAJOR RISK FACTORS AND THREATS, SPECIFYING THE EXTENT TO WHICH THE ISSUER
IS EXPOSED TO THEM
9.1 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 10.
9.2 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 9.3.
9.3 External and internal factors crucial for the Company’s development and analysis of the Company’s
development perspectives
Macroeconomic situation
The Company is present in the markets in different parts of Europe, 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 the
Company’s customers. The destabilisation of the political situation in some of the local regions may temporarily reduce
the Company’s expansion in foreign markets and force it to look for new customers.
European markets constitute one of the largest areas of the Company’s 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
Company’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 Company due to the fact that the Company 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.
Most of the Company’s 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 Company.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
20
Competition
The Polish market for distribution of industrial goods, which is the Company’s main field of operation, is relatively highly
dispersed in spite of the presence of several market leaders. Entities currently competing with the Company 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 Company’s financial standing, because further expansion
of the market may be slowed down, become difficult or even impossible. The Company shall be monitoring the market
and its environment, taking various measures in order to maintain and develop competitive advantage.
Changes in currency markets
The Company’s strict link with foreign suppliers and settlements made primarily in USD and CNY make the Company’s
financial results sensitive to changes in FX rates. The Management Board 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 Company’s sales revenue is earned
through the export channel based on prices set in foreign currencies, the Company 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 Company 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 Company’s profitability since the TOYA S.A.
entered into loan agreements with floating interest rates in PLN.
To minimise this risk, the 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 Company’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 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 various state
authorities cannot be ruled out. Such claims, disputes or proceedings, as well as cases when fiscal authorities or courts
and the Company adopt different interpretations of tax regulations and different tax qualification of events and
transactions in which TOYA S.A. participated, may have adverse impact on the Company’s financial performance.
However, it should be noted that the Company takes measures to mitigate the effects of changes in law. The Company
uses external services of renowned law and tax firms, which facilitate its current operations.
Supply chain
The Company 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
Company 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.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
21
10. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
10.1 Financial instruments in the scope of the risk of price change, credit and liquidity risks
The purchase prices of goods sold by the Company fluctuate, in particular due to changing manufacturing costs of
purchased items (incl. prices of raw materials) on the part of their manufacturers who are the Company’s suppliers.
Moreover, the purchase price of goods depends on the exchange rate of USD/PLN and CNY/PLN. The above factors
affect the level of applied margins. In order to minimise the negative impact that fluctuations of goods purchase prices
have on the financial result, the Company negotiates contracts with relatively high value and selects manufacturers who
offer competitive prices and trade conditions. The Company does not use financial instruments hedging 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 Company periodically examines their creditworthiness and systematically monitors (internally and
externally) due balances. Credit limits for individual counterparties are set by the Management Board. Customers who
systematically miss payment deadlines are subject to an appropriate debt collection procedure and to restrictions in
the purchase of goods from the Company. To minimise risk, the Company also concludes agreements to insure its
receivables with one of the leading financial institutions.
Due to the specific nature of its operations, the Company 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 Company uses services of several banks which have high credibility ratings. Interest rate on
loans is based on WIBOR rate. The Company does not use instruments hedging against the risk of movements in interest
rates.
The Company has good relationships with banks and has had no problems renewing its loans thus far. Therefore, the
Management Board believes that the risk resulting from short term debt is not significant.
In the view of the Management Board, the Company’s liquidity is secured for the foreseeable future. The Company
pursues 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 Company monitors the level of short-term liabilities and current
assets, as well as current cash flows of the Company.
10.2 Objectives and methods of financial risk management
Due to strict link with foreign suppliers, the Company 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 Company’s sales revenue comes from export
activity based on prices set in foreign currencies, as a result of which the Company is partly subject to natural hedging.
There is a risk, however, that future FX fluctuations may have a temporary negative effect on the Company’s financial
performance.
11. ASSESSMENT OF FINANCIAL RESOURCES MANAGEMENT AND THE ABILITY TO COVER LIABILITIES
30% of the Company’s activity is financed from external capital. Loan agreements require the Company to maintain its
capitalisation ratio at an agreed level throughout the lending period. If this requirement is not met, the bank has the
right to terminate the agreements.
The Company enjoys good relationships with banks and financial institutions and so far has had no problems renewing
its loans on advantageous terms. The Company continues to maintain 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
Company’s ability to cover its liabilities.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
22
12. ASSESSMENT OF THE ABILITY TO CARRY OUT INVESTMENT OBJECTIVES
In the opinion of the Management Board, there are no threats to the implementation of the Company’s investment
objectives. The activities planned for the next quarters have been described in item 7. Apart from funds generated by its
operations, the Company has secured external funding in the form of credit limits, pursuant to the agreements discussed
in item 19.
13. MAIN COMMODITY GROUPS
13.1 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).
The Company’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 Company’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 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 69% revenue of TOYA S.A. in 2022 (68% in 2021).
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
23
VOREL is the brand which used to have the highest share in the sales of the Company’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, garden tools.
Revenue from sales of VOREL branded products accounted for 16% of revenue of TOYA S.A. in 2022 (18% in 2021).
LUND is a brand established in mid-2010, under which the Company 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 revenue of TOYA S.A. in 2022 and 2021.
Under the brand STHOR, the Company 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 4% of revenue of TOYA S.A. in 2022 (3% in 2021).
Under FALA brand, the Company 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 3% of revenue of TOYA S.A. 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 3% of revenue of TOYA S.A. in 2022 (2% in 2021).
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
24
13.2 Sales according to product groups
The most profitable brand is YATO. Every year, the Company records an increase in the sales volume of this brand on
the domestic market, and since 2012, TOYA S.A. has achieved the highest revenue from the sale of YATO brand.
Revenue from sales in the TOYA S.A.'s core business, broken down by brand and its profitability for each financial year,
are shown in the following table:
The structure and volume of sales revenue from core (trading) operations of the Company, broken down by brand
for 12 months ended 31 December
2022
% share
2021
% share
PLN ‘000
%
PLN ‘000
%
YATO
412,171
69%
369,830
68%
VOREL
97,976
16%
96,297
18%
LUND
26,698
4%
20,681
4%
STHOR
18,298
3%
19,182
3%
FALA
17,702
3%
15,493
3%
FLO
14,991
3%
14,622
2%
Other
6,474
2%
6,993
2%
TOTAL
594,310
100%
543,098
100%
14. MAIN SELLING MARKETS
14.1 Sales structure
The main distribution channels of TOYA S.A. are:
a) domestically:
• Wholesale market, i.e. distributors, wholesalers and stores;
• Retail networks;
• Retail sales - mainly online sales, including through your own online store;
b) export.
The largest part of sales is generated by TOYA S.A. through the domestic wholesale distribution channel (44% share of
the segment “Wholesale market” in sales revenue for 2022, with a profit margin of 25%). The Company’s distribution
channel with the second highest share in sales is the segment “Export”. In 2022, its share in sales amounted to 37%,
with a profit margin of 25%. Distribution through retail chains on the domestic market has the lowest share in sales
revenue, which in 2022 reached the level of 12%, with a profit margin of 29%. In 2022, the share of sales of the online
stores and via sales portals changed slightly, amounting to 8%, with a profitability of 41%.
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 Company.
Revenue of the Company, broken down by distribution channels and their profitability, is shown in the following tables.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
25
The structure and volume of sales revenue of the Company, broken down by segments which are distribution channels
for 12 months ended 31 December
2022
Share
2021
Share
PLN ‘000
%
PLN ‘000
%
Wholesale market
259,657
44%
227,498
42%
Export
218,606
37%
206,937
38%
Retail networks
69,097
11%
71,062
13%
Retail sales
46,950
8%
37,601
7%
Total
594,310
100%
543,098
100%
Sales profitability of segments which are the Company’s distribution channels
for 12 months ended 31 December [%]
2022
2021
Wholesale market
25%
32%
Export
25%
23%
Retail networks
29%
29%
Other
41%
44%
Average
27%
29%
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
14.1.1 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 current year, TOYA S.A. cooperated with multiple authorised distributors. This
network is constantly developing. The Company also cooperates with several 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 Company
employs a few 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
Distributors
201,347
78%
176,478
78%
Wholesalers and stores
58,310
22%
51,020
22%
Total
259,657
100%
227,498
100%
14.1.2 Retail networks – sales in Poland
Domestic sale to retail networks constitutes approx. 11% of the Company’s sales revenue. TOYA S.A. cooperates with
few large networks in Poland. The 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.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
26
In 2022 and 2021 there were no entities with which the Company’s turnover would constitute more than 10% of the
Company’s total revenue.
14.1.3 Export sales – TOYA S.A.
For many years, the Company has operated in international markets, focusing primarily on Central, Southern and
Eastern Europe – Romanian, Hungarian, Czech, German, Balkan and Russian, Ukrainian, Belarusian and Lithuanian
markets.
The structure and volume of revenue from the Company’s export sales, broken down by countries.
for 12 months ended 31 December
2022
% share
2021
% share
Romania
54,092
25%
48,120
23%
Ukraine
26,128
12%
26,919
13%
Baltic countries
22,399
10%
22,145
11%
Hungary
21,096
10%
17,213
8%
Belarus
18,419
9%
17,673
9%
Moldova
11,825
5%
9,151
5%
Czech Republic
11,193
5%
13,434
7%
Bulgaria
9,348
4%
10,212
5%
Russia
7,335
3%
7,116
3%
Greece
7,016
3%
4,604
2%
Germany
6,641
3%
9,073
4%
Other
23,114
11%
21,278
10%
Total
218,606
100%
206,937
100%
14.1.4 Retail networks – sales in Poland
In 2022, Toya S.A. continued the development of the www.toya24.pl and yatogastro.com online stores. Sales in this
channel are also conducted through popular online platforms. The share of sales revenues amounted to 8% with the
gross sales profitability of 41%. The increase compared to the previous year was over 14%. One of the main reasons for
such sales dynamics in this channel was the progressive change in the way consumers make purchases, who began to
prefer online shopping to a greater extent since the announcement of the state of the pandemic.
14.2 Suppliers
The network of suppliers the Company cooperates with is highly diversified. For many years, the Company has
cooperated with more than several hundred foreign and several dozen domestic suppliers, which allowed it to establish
durable business contacts. This broad range of suppliers ensures high independence and even enables strengthening of
the Company’s negotiating position. This position is additionally improved by the presence of the subsidiaries Yato Tools
(Shanghai) Co. Ltd. and Yato Tools (Jiaxing) Co. Ltd., thanks to higher confidence of Asian manufacturers in a local partner
as well as larger volumes of orders. The 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 tailor the
product offer to the changing customer expectations.
The Company’s biggest suppliers are its subsidiaries - Yato Tools (Shanghai) Co. Ltd. and Yato Tools (Jiaxing) Co. Ltd.
Purchases from this entity represented 71% of all purchases of the Company in 2022 (74% in 2021).
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
27
15. CONCLUDED AGREEMENTS IMPORTANT TO THE COMPANY’S OPERATIONS
The criterion for recognising agreements as important adopted by the Company is agreement value exceeding 10% of
the Company’s equity. According to this criterion, in 2022 the Company concluded annexes to agreements with banks
which were presented in item 19.
The table below includes insurance policies of the 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
16. 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 Company did not use other services of the appointed audit
firm.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
28
17. RELATED PARTY TRANSACTIONS
Related party transactions are entered into on the arm’s length basis in the course of the Company’s day-to-day
operations. These transactions have been presented in note 31 to the financial statements.
In 2022 the Company did not conclude any transactions with related entities which were atypical or divergent from the
arm’s length basis.
18. DISPUTES
As of 31 December 2022, TOYA S.A. is not a party to any proceedings before courts, arbitration panels or public
authorities.
19. LOANS AND BORROWINGS
The list of bank loans has been presented in a table on the subsequent page.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
29
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.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
30
20. EXTENDED LOANS AND BORROWINGS
In 2022, the Company did not extend any borrowings or loans.
21. GUARANTEES AND SURETIES GRANTED
As at 31 December 2022, the Company was a party 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. CONTINGENT LIABILITIES AND ASSETS
The Company has no significant contingent assets and contingent liabilities.
23. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE
23.1 Change in the composition of the Audit Committee of TOYA S.A.
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
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
31
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
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
32
24. 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.
24.1 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.
24.2 An indication to the extent that the 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.
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
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
33
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%.
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,
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
34
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
auditing. In other companies which do not appoint an internal auditor who meets such requirements, the audit
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35
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 dividends; e) a dividend
payment would substantially increase the risk to covenants under the company’s binding credit facilities or terms of
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Directors’ report on the Company’s operations for 12 months ended 31 December 2022
36
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.
24.3 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
The Management Board of the Company is responsible for the internal control system in the 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 19 February 2009 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 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 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 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.
24.4 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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37
¹ 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.
24.5 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
Company issued no other securities.
24.6 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.
24.7 Limitations in transferring the ownership right to the issuer’s securities
In 2022, there were no such limitations.
24.8 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. The
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
28,284,304¹
37.69
Romuald Szałagan
9,652,290
12.86
Generali OFE
5,001,147
6.66
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Directors’ report on the Company’s operations for 12 months ended 31 December 2022
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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.
24.9 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.
24.10 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 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
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,
b. issue of convertible bonds or bonds with pre-emptive rights to acquire shares,
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39
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,
e) the possibility and the manner of participating in the General Shareholders’ Meeting using electronic means
of communication,
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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 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 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
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.
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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.
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,
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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 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.
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.
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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
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
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
44
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 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.
24.11 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:
24.11.1 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,
24.11.2 on individuals who have knowledge and skills in the industry in which the Company operates, including
the manner of acquiring the same,
24.11.3 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,
24.11.4 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,
24.11.5 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,
24.11.6 number of meetings of the Audit Committee or Supervisory Board or other supervisory or controlling
body held,
24.11.7 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.
TOYA S.A.
Directors’ report on the Company’s operations for 12 months ended 31 December 2022
45
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.
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,
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46
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;
• 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;
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Directors’ report on the Company’s operations for 12 months ended 31 December 2022
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− 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.
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;
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48
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;
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;
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Directors’ report on the Company’s operations for 12 months ended 31 December 2022
49
• 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
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.
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