TOYA : Recommendation of the Management Board on the distribution of profit company for the year 2015

Subject:

Recommendation of the Management Board on the distribution of profit company for the year 2015

The Management Board of TOYA SA hereby informs that on 18 May 2016 it has adopted a Resolution No 3/05/2016 on a recommendation to the Annual General Meeting of the Company's shareholders to allocate the profit for the fiscal year 2015 to the supplementary capital. The above recommendation was also submitted to the Supervisory Board with the purpose of its assessment and in accordance with Art. 382 § 3 of the Commercial Companies Code, the Supervisory Board, adopted on 18 May 2016 a resolution No. 2/RN/2016 that positively assessed the recommendation of the Management Board.

The Management Board believes that the adoption of this decision is a necessary step which gives the Company the feasibility of further organic growth associated, among others, with continuous expansion of the range of assortment and growth through acquisition projects.

Some acquisition projects require rapid access to funding, without which the Company may have a difficult access to them or even be eliminated. Therefore, leaving the possibility of quick access to capital can facilitate the realization of these acquisition projects. The Management Board of the Company does not prejudge, however, this method of financing for such projects, only indicates that by the part of the providers offering interesting investments the Company can then be seen as a more reliable partner and investor.

The Company informed in the current report no 9/2016 dated 11 May 2016 on the readiness of the Company to enter into negotiations aimed at signing termsheet with MaxCom S.A. This investment will extend the operational capabilities of the Company, increases its potential range, and will contribute to achieving better financial results and will be another element of the further expansion of the Group TOYA. The Management Board does not preclude the taking similar action in the future, which will require significant capital contribution.

Notwithstanding the foregoing, the Company is rapidly increasing both the volume and range of product groups. In the opinion of the Management Board, a further increase of sales volume resulting from the expansion of the offer, will require significant capital resources from current assets of the Company. These funds will be used to finance the growth of receivables, the value of inventories and liabilities.

The costs of purchase of goods and an increase in inventory, in the opinion of the Board, are subject to significant foreign exchange risk at present. The unstable market situation, having a direct impact on exchange rates, translates directly to exchange rate risks and enforces the need to use the potential of the Group TOYA to actively manage their trade liabilities, which should limit the adverse impact of changes in the currency market on the results of the TOYA Group.

In the face of unstable macroeconomic environment, the Management Board recognizes the need to reach the goals to a greater extent based on the Company's own resources, while reducing credit exposure.

These assumptions will allow to minimize the financial risk while increasing operational efficiency of the Company.

The final decision on the distribution of profit for the financial year 2015 will take the Annual General Meeting of the Company's shareholders.

The report was prepared on the basis of: § 38 sec. 1 point 11 of the Decree of the Minister of Finance on current and periodic information published by issuers of securities and conditions for recognizing as equivalent information required by the laws of the state.

Grzegorz Pinkosz President of the management Board

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