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Metalurško-kemična industrija Celje, d. d.
Kidričeva 26, SI-3001 Celje, Slovenia
Annual Report
of Cinkarna Celje, d. d.,
for 2022
March 2023

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1
Index
Highlights of the report ........................................................................................................................... 6
Report of the Management Board ........................................................................................................ 12
Report of the Supervisory Board of Cinkarna Celje d.d......................................................................... 15
Report of the Audit Committee of the Supervisory Board on its work in 2022 and verification of the
Annual Report of Cinkarna Celje d.d. for 2021 .................................................................................. 16
Internal audit report .............................................................................................................................. 19
Important events ................................................................................................................................... 20
Presentation of Cinkarna Celje d.d. ....................................................................................................... 21
Our activities ..................................................................................................................................... 22
Market presence ............................................................................................................................... 24
Organisational structure.................................................................................................................... 25
Corporate Governance Statement ........................................................................................................ 26
Remuneration of members of management and supervisory bodies .............................................. 27
Corporate governance code for listed companies ............................................................................ 28
Code of ethics and conduct ............................................................................................................... 29
Diversity policy .................................................................................................................................. 29
Respecting human rights ................................................................................................................... 30
Policy on prohibition of sexual and other harassment and ill-treatment in the workplace ............. 30
Combating corruption and bribery .................................................................................................... 30
Internal control and risk management system in relation to the financial reporting process ......... 30
Information on the functioning of the Company's General Meeting, including its powers,
shareholders' rights and their exercise ............................................................................................. 31
Identification and management of impacts ...................................................................................... 32
Statement of non-financial performance .............................................................................................. 35
Report on environmentally sustainable economic activities and investments of Cinkarna Celje d.d.
for 2021 and 2022 ............................................................................................................................. 37
Proportion of revenue from products or services related to economic activities aligned with the
taxonomy .................................................................................................................................. 37
Proportion of investment in fixed assets in products or services related to economic activities
aligned with the taxonomy ............................................................................................................ 39
Proportion of investments in working capital in products or services related to economic
activities aligned with the taxonomy ............................................................................................ 40
Strategic orientations ............................................................................................................................ 42
Plan for 2023 ..................................................................................................................................... 42
Investments made and planned ........................................................................................................ 43
Analysis of results and performance ..................................................................................................... 47
Sales ................................................................................................................................................... 47
Operating result ................................................................................................................................ 50

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Shares – value and turnover.............................................................................................................. 50
Dividends ........................................................................................................................................... 51
Expenditure and costs ....................................................................................................................... 51
Assets and resources ......................................................................................................................... 53
Risk management and opportunities .................................................................................................... 56
Corporate risks identified in 2022 ..................................................................................................... 61
Integrated management system ........................................................................................................... 72
Internal audits ................................................................................................................................... 72
External audits ................................................................................................................................... 73
Financial and legal due diligence ....................................................................................................... 74
Information security .......................................................................................................................... 74
Sustainable development ...................................................................................................................... 76
About the sustainability report ......................................................................................................... 76
Areas of priority sustainability activities of Cinkarna Celje in relation to the United Nations
Sustainable Development Goals by 2030 .......................................................................................... 77
Objective in the field of sustainable development in 2022 .............................................................. 80
The chemical industry – a key sector for the green transition .......................................................... 80
Sustainability challenges and opportunities for the titanium dioxide industry ................................ 82
Greener production of chemicals .................................................................................................. 83
Responsible Care ........................................................................................................................... 83
Ecological footprint of TiO
2
products ............................................................................................ 83
Environmental footprint of paints and coatings containing TiO
2
.................................................. 84
REACH Regulation .......................................................................................................................... 84
Health safety of titanium dioxide .................................................................................................. 84
Sustainable use .............................................................................................................................. 85
Titanium dioxide as a catalyst for the transition to a green economy .......................................... 85
Membership in associations .............................................................................................................. 86
Stakeholder relations ........................................................................................................................ 86
Stakeholder involvement .............................................................................................................. 87
Materiality matrix .......................................................................................................................... 89
Employee relations ............................................................................................................................ 92
Collective agreements ................................................................................................................... 95
Remuneration and freedom of association ................................................................................... 96
Supplementary pension insurance and other bonuses ................................................................. 96
Protection of personal data ........................................................................................................... 96

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Employee training and competence development ....................................................................... 96
Moja Cinkarna app ........................................................................................................................ 98
Cinkarnar internal newsletter ....................................................................................................... 98
Open door of the Works Director's office ..................................................................................... 98
Employee engagement and satisfaction survey ............................................................................ 98
Health and safety at work ................................................................................................................. 99
Injuries at work ............................................................................................................................ 101
Absenteeism ................................................................................................................................ 102
COVID-19 ................................................................................................................................. 103
Workplace risk assessment ......................................................................................................... 103
Employee involvement ................................................................................................................ 103
Health promotion at work ........................................................................................................... 104
CC um for many improvements .................................................................................................. 104
Supplier relations ............................................................................................................................ 105
Supplier evaluation ...................................................................................................................... 105
Customer relations .......................................................................................................................... 107
High value-added products ......................................................................................................... 107
Labelling ................................................................................................................................ 108
Customer satisfaction survey ...................................................................................................... 109
Relations with the local community ................................................................................................ 110
Sponsorships and donations ....................................................................................................... 110
Cooperation with schools ............................................................................................................ 111
Open Door Day ............................................................................................................................ 111
Volunteering among employees ................................................................................................. 112
Communicating with the public .................................................................................................. 112
Receiving and resolving complaints from the public .................................................................. 113
Our approach to the environment .................................................................................................. 114
Quality assurance, environmental, health and safety policy ...................................................... 115
Major accident prevention and reduction policy ........................................................................ 115
Environmental communication, issues and complaints .............................................................. 115
Objectives and measures ............................................................................................................ 115
Compliance and standards .......................................................................................................... 116
Environmental monitoring .......................................................................................................... 116
Responsible Care Programme ..................................................................................................... 116

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Environmental due diligence ....................................................................................................... 116
Ecovadis sustainability rating ...................................................................................................... 116
HACCP system management ....................................................................................................... 116
Raw materials management ........................................................................................................... 117
Use of raw materials .................................................................................................................... 117
Packaging materials ..................................................................................................................... 118
Recycled input materials ............................................................................................................. 119
Reused materials ......................................................................................................................... 120
By-product production ................................................................................................................ 121
Waste management ........................................................................................................................ 122
Energy management ....................................................................................................................... 124
Energy consumption .................................................................................................................... 125
Investing in renewable energy .................................................................................................... 129
Project: Heat balance of titanium dioxide production ................................................................ 130
Investing for decarbonisation...................................................................................................... 130
Emissions to air ................................................................................................................................ 131
The Company's carbon footprint ................................................................................................. 131
Carbon footprint of the carrier product ...................................................................................... 132
Monitoring emissions to air ........................................................................................................ 133
Project: Sulphur smelting treatment plant ................................................................................. 135
Water management ........................................................................................................................ 136
Caring for water sources ............................................................................................................. 136
Integrated Water Management project ...................................................................................... 137
Wastewater management ........................................................................................................... 137
Impact of wastewater on the natural environment .................................................................... 138
Biodiversity ...................................................................................................................................... 139
Impact on biodiversity ................................................................................................................. 140
Old riverbed revitalisation project .............................................................................................. 140
Financial report ................................................................................................................................... 142
Financial statements ....................................................................................................................... 142
Condensed statement of financial position ................................................................................ 142
Income statement for the period from 1 January to 31 December ............................................ 144
Statement of other comprehensive income for the period from 1 January to 31 December .... 145
Statement of changes in equity and determination of distributable profit ................................ 146

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Cash flow statement .................................................................................................................... 148
Notes to the financial statements ............................................................................................... 149
Significant events after the end of the financial period ...................................................................... 206
Independent auditor's report .............................................................................................................. 207
General Meeting/capital structure...................................................................................................... 213
Statement by members of the management and persons responsible for drawing up the annual
report ................................................................................................................................................... 214
Company culture ................................................................................................................................. 215
Reporting indicators according to GRI standards ................................................................................ 216

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Introduction
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Highlights of the report
Our business is based on quality and accountability
The net profit in 2022 was EUR 43,396,465, an increase of 31% on the previous year.
18% higher sales in 2022.
The production and marketing of titanium dioxide pigment accounts for 80% of total sales.
As a share of value sales by market, sales in the EU market account for the majority, around 83%.
We provide personal and professional development opportunities for our employees
775 employees in 2022, a decrease of 2.3% compared to 2021.
155 useful suggestions from employees to improve operational and technological processes.
Employee health and safety at work are our priorities
In 2022, we allocated 15% more funds to occupational health and safety measures than in the
previous year.
The number of workplace injuries is decreasing, at 0.9 injuries per 100 employees in 2022, a
decrease of 0.3 workplace injuries per 100 employees compared to the previous year.
6.9% fewer occupational injuries per 1,000 employees than the five-year average for the chemical
industry and 0.7% fewer than the national average (NIJZ data for 2017-2022).
We invest in the local environment and foster creativity
Sponsorships and donations amounted to EUR 755,725, an increase of around 16% compared to
2021.
95% of sponsorship and donations go to sports clubs and associations.
For 15 years, we have been raising awareness among young people in the region about the
importance of chemistry for society and the natural environment through competitions.
We carefully manage all identified environmental impacts
We have been part of the Responsible Care Programme for 24 years.
We have installed two solar power plants with a total capacity of 1.5 MWp on the roofs of our
buildings in Celje.
11% of the total amount of water used to produce titanium dioxide is recycled or reused.
We produced 2.9% more white gypsum by-product than the previous year.

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Social footprint of Cinkarne Celje, d. d.
Cinkarna Celje, d. d.
2022 (in EUR)
Excise duty*
104,787
URE, SPTE and OVE contributions
430,286
Membership fees
48,490
VAT, customs, import duties
18,835,899
Levies on receipts of natural persons
12,222,524
Corporate income tax
8,789,599
Environmental levies**
101,373
Building land use tax (NUSZ), water levies
868,320
Transhipment taxes
773,243
Donations and sponsorships
755,725
Total
42,930,246
* Excise duty figures for the 2018-2022 period are estimated on the basis of the volume supply of EE.
** Environmental levies also include a CO
2
tax.

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A concise overview of performance and alternative performance measures
Cinkarna Celje d.d. also uses Alternative Performance Measures (APM) as defined by ESMA to show the historical
performance. In 2021, we revised the reported indicators in line with the reasonableness of the interpretation
given the practice in the titanium dioxide industry and the absence of debt in the statement of financial position.
The selected performance measures reveal the performance and efficiency of the Company's operations in light
of the cyclicality of the pigment industry.
Operations in EUR 000
2022
2020
2018
Turnover
227,153.12
172,386.90
163,960.90
Operating profit (EBIT)
1
53,175.64
22,534.40
36,408.50
Operating profit plus depreciation and
amortisation (EBITDA)
2
65,326.33
32,467.20
48,580.70
Net operating result
43,396.47
18,950.70
30,558.20
Non-current assets (end of period)
108,559.53
110,888.70
107,594.10
Current assets (end of period)
142,388.47
100,251.70
106,067.40
Equity (end of period)
209,010.15
174,820.90
173,925.50
Non-current liabilities (end of period)
18,831.72
20,876.40
27,763.30
Current liabilities (end of period)
23,106.14
15,442.00
11,407.40
Investments
10,546.50
12,233.00
22,608.30
Indicators
EBIT as a percentage of turnover
0.23
0.13
0.22
EBITDA as a percentage of turnover
0.29
0.19
0.30
Net profit as a percentage of turnover
(ROS)
19.11
10.99
18.64
Return on equity (ROE)
3
21.74
12.50
21.70
Return on assets (ROA)
4
17.61
9.00
14.10
Value added per employee
5
131,431
78,729
90,150
Number of employees
1
The difference between operating income and operating expenses.
2
The difference between operating income and operating expenses, plus depreciation and amortisation. Reflects operating
performance.
3
Net profit/average equity for the year. The indicator reflects the efficiency of the company in generating net profit in
relation to capital. Return on equity is also an indicator of management's performance in maximising the value of the
company for its owners.
4
Net profit/average balance for the year. The indicator reflects the efficiency of the company in generating net profit in
relation to assets. Return on assets is also an indicator of management's performance in using assets efficiently to generate
profits.
5
Operating profit plus depreciation, amortisation and labour costs divided by the average number of employees after
accrued hours. A productivity indicator reflecting the average new value created per employee at Cinkarna.

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Operations in EUR 000
2022
2020
2018
End of year/period
775
824
908
Average end of year/period
776
838
905
Share information*
Total number of shares
8,079,770
8,079,770
8,146,260
Number of own shares
264,650
219,510
21,490
Number of shareholders
2,321
1,920
2,078
Earnings per share in EUR
6
5.37
2.35
3.78
Dividend yield
7
10 %
11 %
13 %
Gross dividend per share in EUR
3.19
1.70
2.65
Share price at end of period in EUR
23.00
17.80
18.10
Book value per share in EUR
8
25.87
21.64
21.35
Market capitalisation in EUR 000 (end
of period)
185,834.71
143,819.91
147,447.30
* Share split recalculated for previous periods.
6
Net profit/average number of shares in issue.
7
Amount of dividend/share value (at the date of the resolution).
8
Capital at end of period/total number of shares in issue.

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Titanium dioxide as an accelerator of the green transition
In 2022, we produced 64,366 tonnes of pigmented titanium dioxide (RC), our main product, an increase
of 1% compared to the previous year.
Environmental and health benefits of titanium dioxide

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Helps create transparent solar cells
• Producing the first transparent solar cells by combining the unique properties of titanium
dioxide (TiO
2
) and nickel oxide (NiO).
• Integration into windows, vehicles, mobile phone screens and other everyday products.
• TiO
2
is an ideal semiconductor for solar cells because it absorbs invisible ultraviolet light while
still transmitting visible light.
Enabling innovation in green hydrogen technology
• TiO
2
enables a new method of hydrogen production for fuel, called photocatalysis, based on
the use of sunlight.
• TiO
2
could enable the production of electrodes that can absorb up to 50% of sunlight, making
the production of green hydrogen more efficient.
Benefits for the circular economy
• Efficiency: high standards of gloss, colour strength and opacity can be achieved with fewer
resources by using TiO
2
.
• Resistance and protection: TiO
2
protects materials from degradation by UV radiation and
weathering, so products last longer and less waste is generated over time.

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Report of the Management Board
Cinkarna Celje d.d., a modern and forward-looking chemical company, has celebrated 150 years of
continuous operation in very good shape, with ambitious sustainability goals. As part of the chemical
industry, which is a vital building block of the European and Slovenian economy, we are aware of our
opportunities, responsibilities and challenges in the context of the green, low-carbon and circular
transformation of European industry.
The green transition is not new to us, as key milestones in our distinguished history testify to a growing
awareness of the shared responsibility of all stakeholders for the success of our economic
performance, an attentiveness to the social environment and a growing sensitivity to the impact on
the natural environment. Through the consistent implementation of a sustainable development
strategy, which is embedded in the company's vision, mission and development plan, we are
continuously striving for improvements in all areas of our operations. In complex circumstances, we
seek innovative solutions and implement them in a successful business model to achieve a balance
between economic performance, social responsibility and environmental protection, with a focus on
the circular economy and decarbonisation.
The Board and staff are aware that our way forward, based on the principles of sustainable
development, must be geared towards strengthening our economic performance and ensuring
corporate responsibility, as well as integrating and achieving the objectives of all our stakeholders.
With this strategic stance, we aim to identify risks of all kinds, including climate risks, early on, while
boldly spreading the wings of opportunity.
The 2022 financial year was marked by two different half-years. The first continued the favourable
market trends and high level of demand of the previous year. The second half of the year, however,
witnessed the impact of increased energy risks, the downturn in the Chinese property market and the
consequent decline in pigment sales in that market, as well as increased export pressure from Asian
pigments to European markets. The second half of the year saw a significant cooling in demand from
European customers across all sales segments due to inflationary pressures on the industry and the
end consumer. Due to weaker demand and high prices in the energy markets, several competing
European producers temporarily reduced or stopped production.
In this environment, we maintained maximum production levels and managed to generate sales
revenue of EUR 227.2 million in the 2022 financial year, an increase of 18% compared to 2021. The
sales increase was mainly driven by higher average selling prices for titanium dioxide pigment and
maximum capacity utilisation. The total value of exports reached EUR 208.4 million in the period
considered, an increase of 19% compared to the same period of the previous year. Net profit
amounted to EUR 43.4 million, 31% higher than the EUR 33.2 million achieved in the corresponding
period of the previous year. Operating profit plus depreciation and amortisation, or EBITDA, amounted
to EUR 65.3 million, representing 29% of sales. EBITDA is up 27% compared to the previous year. We
consider that the operating results achieved are objectively good and exceed the forecasts for the
period.
We are pleased that our good work is delivering the expected returns to our shareholders and
partnership to the wider community.
We have earmarked EUR 10.5 million for investments, the purchase of fixed assets and replacement
equipment, and environmental investments, which represents 70% of the planned budget for 2022.
The under-performance is mainly due to changed circumstances requiring interruption of works and
additional preparation of documentation, longer procedures for selecting the most advantageous

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supplier, pilot tests of various installations, delays in the preparation of project documentation and
administrative procedures. The main focus of the funding was on the production of titanium dioxide
pigment to improve product quality, ensure the planned volume production and reduce environmental
impacts.
Focusing on our core titanium dioxide pigment programme and rationalising our portfolio of strategic
business areas are key building blocks of our business performance. Titanium dioxide pigment is our
most important product and an indispensable raw material in the modern world, and we are
committed to further developing and continuously improving its quality and exploring its use in
sustainable applications. These have many opportunities in the perspective of the transition to a green
economy.
Cinkarna Celje d.d. is a relatively small pigment producer, so we face market conditions and changes
as a typical follower, but of course we try to make the most of the market's potential in terms of level
and time dynamics within the given framework.
What does our view of the future suggest?
The macroeconomic environment remains challenging. Economic growth in the euro area is expected
to slow significantly in 2023, affected by high inflation, tighter financing conditions and lower
consumer confidence. In the context of markets and Cinkarna's carrier products, this situation means
that pigment consumers are facing weaker demand and sentiment, with high costs and inflation being
the key drivers. In addition to European pigment supply, very cheap volumes are emerging from Asia.
This reverses the trend of pigment selling prices in Europe. The difference between the selling price in
China and in Europe is at a historically high level.
Based on our assessment of current market conditions, we estimate that downward pressure on prices
will continue in the coming quarters. In parallel, the prices of some key raw materials are at high levels
or are only moderately valued, which will result in further downward pressure on profit margins.
Increased energy prices will also have an impact. Based on these facts, we have also prepared our plan
for 2023, taking into account the weaker performance and increased capital expenditure in the energy
and sustainability transformation.
Sales in the other business units are above the level of the previous comparable period, mainly in the
metallurgy and coatings segment, where they are higher than in the same period of the previous year
due to higher raw material input costs.
In 2023, Cinkarna Celje d.d. will prepare a new business strategy for a five-year period. It will also
integrate our strategic vision and objectives for the Environment, Society and Governance (ESG) area,
further underlining our commitment to the continuous transformation of the company towards
sustainability.
Our business strategy will be based primarily on an active marketing approach to find and develop the
most profitable customers and markets, increase market share in the highest quality markets and build
long-term partnerships with key customers. We will invest in developments and programmes that
show the potential for responsible and green growth.
We recognise that employees are the most important foundation for long-term business success. We
will continue to pay particular attention to optimising our human resources management and
organisational structure to ensure an appropriate level of employee satisfaction and motivation, and
above all to maximise the safety and health of our employees. We are implementing IT support for the
development of competences, including in terms of sustainability, digitalisation and innovation, and
improving the organisational climate. In agreement with the representative trade unions and

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employee representatives, we will continue to provide employees with work and personal growth, and
remuneration that adequately reflects the company's performance or the quality of its results.
By taking further sustainable steps, we will reduce the material, energy and carbon footprint of our
activities, which in turn means rationalising costs in the long term. We will build on our multi-year
continuous commitment to responsible energy use with a strategic decarbonisation target and plan in
2023. We will reduce our organisational carbon footprint (Scope 1 and Scope 2), which we calculated
last year, in the long term through, among other things, energy efficiency programmes and increasing
the use of renewable energy sources, and we are therefore building solar power plants on our own
facilities in phases.
In the context of making titanium dioxide production as sustainable as possible, we will continue our
multi-year development project on integrated water management and circular economy projects with
the aim of reducing waste. Improvements in the operation or upgrading of waste water treatment
plants and the implementation of measures to reduce emissions in the working environment will
continue to be a constant feature of our activities. We will continue with projects that comprehensively
manage spatial and environmental risks. The most important of these will continue to be the
alternative water supply projects, the harmonisation of the zoning acts at the Za Travnikom red
gypsum filling plant, the rehabilitation of the Bukovžlak Non-Hazardous Waste Disposal Site (ONOB),
and ensuring the stability of dams.
We will also strategically build on our integrated ESG (Environment, Society, Governance) efforts in
the value chain and in cooperation with the local environment.
The rich and at times dramatic history of Cinkarna Celje recounts a telling story of the exceptional
ability of its leaders to identify challenges in time and to courageously find the right answers to difficult
circumstances. The current management of the company, together with all its employees, is also
capable of bold visions and decisive sustainable steps - for a green company, a green wider society and
a promising future for the present generation and all future generations. The management of Cinkarna
Celje d.d. is personally and collectively committed to this. Our efforts, achievements and challenges
are disclosed in this report, and we are confident that in the future, in cooperation with our
stakeholders, we will meet and exceed many of the goals that we are currently still seeking answers
to. This visionary optimism has become part of our DNA over the years.
Management Board of Cinkarna Celje d.d.

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Report of the Supervisory Board of Cinkarna Celje d.d.
In 2022, the Supervisory Board met and took decisions at seven meetings, five of which were ordinary,
one correspondence and one extraordinary. Attendance at meetings was generally full. Within the
legal framework established by laws, regulations, the Company's Articles of Association and relevant
codes, as well as the approach of a prudent steward, we have diligently fulfilled and exercised our
powers, duties and responsibilities. We have considered the materials submitted, the presentations
made, the specific clarifications and explanations provided, and have organised and conducted
interviews with individual external experts. We have sought to further clarify and examine specific
topics through constructive suggestions, questions and requests for additional data, analyses and
reports. In our opinion, the Supervisory Board has acted diligently in its work, in accordance with the
law and with the best of its individual conscience and knowledge, thereby adequately safeguarding the
interests of the Company and its shareholders.
At the end of 2022, the Supervisory Board of Cinkarna Celje d.d. was composed of Dr. Mario Gobbo -
President, Luka Gaberščik, univ. dipl. in law – Deputy President, Mag. David Kastelic, Mitja Svoljšak,
Dušan Mestinšek, dipl. in electrical engineering, and Jože Koštomaj, mechanical engineer, the latter
two as workers' representatives.
The Supervisory Board has devoted time and attention to reviewing current operations, investments,
business plans and regular internal audit activities. Other topics to be highlighted include the
discussion on the implementation of the development strategy, environmental issues, occupational
health and safety issues and energy reporting. The Supervisory Board was kept informed of the
development and progress of environmental projects. The Management Board briefed the Supervisory
Board members in detail on the risk of shortage of process water and possible solutions. Attention was
also paid to monitoring the implementation of the Company's Strategic Plan for 2019-2023, adopted
in 2018.
In 2022, the implementation rate is 70% of the planned value. The under-performance is mainly due
to the occurrence of changed circumstances requiring interruption of works and additional preparation
of documentation, longer procedures for selecting the most advantageous supplier, pilot tests of
various installations, delays in the preparation of project documentation and administrative
procedures. The total value of investments thus amounted to EUR 10.5 million. The main part of the
funds was earmarked for the production of titanium dioxide pigment to improve product quality,
ensure the planned volume production and reduce environmental impacts.
In November, we discussed and adopted our business plan for 2023, based on relatively pessimistic
macroeconomic forecasts and with traditional conservatism. The sales plan amounts to more than EUR
200.6 million and the net profit is planned at EUR 5.9 million. The planned drop in the latter is mainly
due to market pressures towards lower average selling prices and higher purchase prices. The
Supervisory Board considered that the plan was appropriately formulated and that it adequately
reflected both the situation in the business environment and the Company's competitive position and
potential for generating results.
Thanks to the efforts of the employees and the Management Board of the company in extraordinary
circumstances, the results achieved in 2022 are very good and are among the best in the history of
Cinkarna Celje d.d., and at the same time they are above average in the competition of the best
Slovenian industrial companies. International industry comparisons also show once again that the
results achieved are among the very top of the leading global companies in the titanium dioxide
pigment industry. The Company's operating profitability exceeded the operating results of most
competing titanium dioxide pigment producers. Therefore, we consider the reported net profit of EUR

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43.4 million and total sales of EUR 227.2 million to be outstanding achievements. The Company has
traditionally followed a conservative financial management strategy, operating without long-term
borrowings or external financing, and is therefore financially stable and sound.
The strong performance in 2022 is therefore due to still relatively high average prices or margins. We
have also closely monitored progress on physical volume indicators. Particular emphasis will therefore
be placed on improving or raising the competitive position, increasing market shares and increasing
physical volumes. In parallel, the possibility of further diversification of the product portfolio will be
explored.
The Supervisory Board considers that the actions taken by the Management Board have also been
successful in implementing investment plans and targeted development work. A high level of financial
stability has been maintained despite the payment of high dividends. The efficient operation,
sustainability and stability of the system provide an answer to its long-term prospects. The main
directions of the Company's operations and development, as set out in the medium-term strategy,
have been qualitatively fulfilled in the most important points. In 2018, the Supervisory Board was
involved in the preparation and adoption of the development strategy until 2023. The key focus of this
strategy is the Company's focus on the core business of titanium dioxide and the change in the sales
portfolio of this core product towards increasing quality, optical properties and product development
for more demanding customer applications. The Supervisory Board actively supports a business policy
focused on reducing risks and uncertainties and ensuring a stable financial position of the Company.
Together with the Management Board, we pay attention to the requirements and ensure compliance
also with the continuous progress in the environmental and employee health protection areas.
In the opinion of the Supervisory Board, the present Annual Report, which contains the statutory
financial statements, disclosures, explanatory notes and the management report, contains the most
important information and indicators as well as adequate explanations of individual events and facts,
and therefore the Supervisory Board, on the proposal of the Audit Committee of the Supervisory
Board, approves the Annual Report of Cinkarna Celje d.d. for 2022.
The Supervisory Board has also read the independent auditor's report and considers that it adequately
presents the statutory audit of the financial statements and notes and accepts the auditor's opinion
that the financial report is consistent with the audited financial statements. This sufficiently satisfies
the requirement that the information given about the Company's financial position during the period
under review be true and fair.
Report of the Audit Committee of the Supervisory Board on its work in 2022 and verification
of the Annual Report of Cinkarna Celje d.d. for 2021
The Audit Committee of the Supervisory Board of Cinkarna Celje d.d. in 2022, consisting of Mag. David
Kastelic – Chairman, Jože Koštomaj, mechanical engineer – Member, and Gregor Korošec, univ. dipl. in
economics – Independent External Expert, held five regular meetings. The Audit Committee members
focused on their regular and ongoing tasks and commitments.
Members of the Audit Committee were present at all meetings. Aleš Skok, President of the
Management Board, and Mag. Karmen Fujs, Head of the Accounting Department, who presented
documents and answered or clarified questions from the members were also present. Two meetings
were attended by two certified auditors, Sanja Košir Nikašinović and Lidija Šinkovec, from Ernst &
Young, d.o.o. Jure Vezjak, Head of the Internal Audit Department, was also present at the meetings.

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At all meetings, the Audit Committee was informed about the interim results of Cinkarna Celje d.d. and
paid particular attention to financial and accounting data. It paid close attention to the content of the
Company's interim and annual financial statements and made proposals and recommendations for
corrections. As already mentioned, it also reviewed and examined on an ongoing basis the reports of
the Internal Audit Department, which included, inter alia, reporting on the status of action taken on its
recommendations, while at the same time cooperating constructively, suggesting improvements and
guiding the work of the Internal Audit Department.
The Audit Committee again reviewed the system for identifying, evaluating and managing risks in the
operations of Cinkarna Celje d.d. The system is properly integrated into the Company's business
processes in 2022. This has significantly improved its responsiveness and, above all, it represents a
desirable tool for the active management of the Company. The risk management system, which is
integrated into the integrated management system, is based on the regular updating of a risk
catalogue, in which risks are systematically classified according to the assessment of the probability of
occurrence of each type of risk and the amount of potential damage. The system also includes a set of
actions aimed at managing these risks. The Audit Commission assessed the system as satisfactory.
In accordance with its responsibilities, the Audit Committee was active in 2022 in the regular audit
procedures of Cinkarna Celje d.d. The activities were mainly:
− meeting with the auditors and taking note of the progress of the final audit of the 2021
financial statements of Cinkarna Celje d.d.;
− taking note of the findings of the audit of Cinkarna Celje d.d.'s financial statements for 2021
and the auditor's opinion;
− taking note of the letter to management on the findings of the audit of Cinkarna Celje d.d.'s
financial statements for the year ended 31 December 2021.
The meetings and activities in 2022 were aimed at taking note of the final audit of the Company's
financial statements for 2021, reviewing the Annual Report of Cinkarna Celje d.d. and reviewing the
annual report of the Internal Audit Department, as well as taking note of the periodic reports for the
2022 financial year. In 2022, the Internal Audit Department performed all internal audit tasks
successfully and in accordance with the plan, and reported to the Audit Committee on an ongoing basis
on the performance of those tasks.
The Audit Committee received and considered the final Annual Report of Cinkarna Celje d.d. for 2022
at its meeting. The Audit Committee concluded that the Annual Report of Cinkarna Celje d.d. for 2022
was prepared on time and in all material respects in accordance with International Accounting
Standards and the provisions of the Companies Act.
The business section of the Annual Report of Cinkarna Celje d.d. provides a concise overview of the
Company's operations in recent years. The analysis of results and operations provides a detailed
overview of the Company's assets and operating result, with full explanations of sales, operating result,
expenses and costs, assets and resources.
The Company's development is based on people, investment, development activity, quality assurance
and the successful implementation of its strategic plan for the next period up to and including 2023.
The Annual Report also contains a statement of non-financial performance, which, as required by the
amended Companies Act, includes the required information on social responsibility, the environment,
human resources, and anti-corruption and anti-bribery.

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The financial statements of Cinkarna Celje d.d. for 2022, together with the accounting policies and
notes thereto, have been audited by Ernst & Young d.o.o. and approved by the General Meeting of
Shareholders of the Company at its 23rd Ordinary Session on 4 June 2019. The auditor has issued a
positive opinion on the financial statements of Cinkarna Celje d.d. for 2022 and has also confirmed that
the information in the financial statements is consistent with the accompanying financial statements.
In its opinion, the auditor highlighted the key audit matters disclosed in the accounting part of the
report, namely Note 13 - Other provisions to the financial statements, where it is disclosed that the
Company has environmental provisions of EUR 14.8 million as at 31 December 2022, which were
established on the basis of the projects developed, the reports prepared and the estimates made by
the external consultants and the management regarding the costs to be incurred for the rehabilitation
of the landfills and the coverage of future liabilities.
Based on the positive opinion in the auditor's report, additional explanations provided by the auditor
and the departments of Cinkarna Celje d.d., and the information and disclosures in the Annual Report
of Cinkarna Celje d.d., the Audit Committee is of the opinion that the Annual Report for 2022 has been
prepared in accordance with the requirements of the Companies Act (ZGD-1) and that the financial
statements present fairly, in all material respects, the financial position of Cinkarna Celje d.d. as at 31
December 2022 and its operating result and cash flows for the year then ended in accordance with
International Financial Reporting Standards as adopted by the EU.
The Audit Committee considers that the auditor has acted impartially and independently and in
accordance with the Auditing Act. The statutory auditor and the audit firm will provide the Company
with a review of the ESEF Report. The Report on the Remuneration of the Company's Management
and Supervisory Bodies will also be reviewed by them.
The Audit Committee has no comments on the Annual Report of Cinkarna Celje d.d. for 2022 that
would in any way delay it in proposing to the Supervisory Board that it adopt a decision on the approval
of the Annual Report of Cinkarna Celje d.d. for 2022 in accordance with Article 282 of the Companies
Act (ZGD-1).
President of the Supervisory Board
Mario Gobbo

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Internal audit report
Internal auditing at Cinkarna Celje d.d. is performed by the Internal Audit Department, headed by the
Head of the Internal Audit Department. The Department is an independent organisational unit,
organisationally accountable to the Management Board and functionally to the Audit Committee and
the Supervisory Board of the Company, respectively. It operates in accordance with the International
Standards for the Professional Practice of Internal Auditing (hereinafter referred to as the Standards)
and other rules included in the International Framework for the Professional Practice of Internal
Auditing and the Hierarchy of Internal Auditing Rules.
Its role is to provide independent and impartial assurance and advice designed to add value and
improve the performance of the Company. It helps the Company to achieve its objectives by
systematically and methodically assessing and improving the effectiveness of risk management,
control processes and corporate governance. It acts in accordance with the Charter and is guided by
the principles of integrity, expertise, professional due diligence, impartiality and independence.
It undertakes activities in areas where key risks to the Company arise or may arise and where it can
contribute to the improvement of the business and the enhancement of the Company's operational
security and business benefits, where the business is exposed to risks and weaknesses that threaten
its continued existence and development, or where there are opportunities for fraud, error, evasion
or conflict, with the aim of making the Company's operations more efficient, economical and effective.
It carried out its activities in 2022 in accordance with the approved annual work plan. All but one of
the eight planned internal audits were carried out, as were other internal audit activities such as
periodic follow-up of recommendations, internal audit planning, work methodology activities and
others. The results of the audits and other activities were regularly reported by the Head of the Internal
Audit Department to the Auditees-in-Charge and the Management Board, and periodically to the Audit
Committee and the Supervisory Board of the Company.
In 2022, the Internal Audit Department successfully completed an external quality audit of its work
against the Standards.
Head of the Internal Audit Department
Jure Vezjak
Qualified Internal Auditor and CIA (Certified Internal Auditor)

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Important events
Silver Innovation Award for BU Kemija Celje
In June 2022, we received a silver award from the Celje Regional Chamber of Commerce for our
innovation entitled Development of an industrial production process for the active pharmaceutical
ingredient tribasic copper sulphate, developed by employees Dr. Andrej Lubej, Mag. Peter Bastl and
Stjepan Zagorščak. It is a breakthrough innovation, a novelty on a global scale and based on an original
process. Tribasic copper sulphate is a product with a high long-term prospect and could become one
of Cinkarna Celje's leading products with appropriate investment in both the production process and
market development. The production of the active substance generates significantly fewer unwanted
by-products and the product itself is more environmentally friendly, as it is classified as a milder
hazardous chemical compared to other copper-based active substances. Cinkarna Celje's strategy
foresees diversification of production through new programmes and by modernising and increasing
the competitiveness of existing programmes. The innovation, with its potential, relevance for the
business unit and innovative implementation, is fully in line with the Company's strategy.
Cinkarna Celje's firefighters helped to extinguish the fire in the Kras region
In July 2022, when a large fire broke out in the Kras region, several members of Cinkarna Celje's
professional firefighting unit helped to extinguish the blaze. On their return, the Company's
management thanked them for their selfless help and expressed their support for their mission.
Ministers Tanja Fajon and Matjaž Han visited Cinkarna
In September 2022, Cinkarna Celje was visited by the Minister of the Economy Matjaž Han, the Minister
of Foreign Affairs Tanja Fajon and the State Secretary of the Government Office for Development and
European Cohesion Policy, Mag. Marko Koprivc. The management of Cinkarna Celje addressed them
with an initiative to consider incentives for energy-intensive companies, which are becoming less
competitive with foreign producers due to the burden of more expensive raw materials and energy.
The Company still has a lot of potential for development, but the State will have to step in to help it by
speeding up procedures, providing incentives and funding for sustainable development.
Receiving a plaque from the Slovenian Chemical Society
The Slovenian Chemical Society celebrated its 70th anniversary in 2021. Due to the health situation of
the COVID-19 epidemic, a festive meeting was organised in September 2022 as part of the traditional
Slovenian Chemistry Days in Portorož. The ceremony was also attended by Aleš Skok, President of the
Management Board of Cinkarna Celje, who received a plaque on behalf of the Company – a sign of
good cooperation with the chemists' trade union.
Receipt of the fourth Platinum Certificate of Credit Excellence
In 2022, we were awarded our fourth Platinum Certificate of Credit Excellence. It ranks us among the
most trustworthy business entities and demonstrates our commitment to good business practices. The
certificate indicates a low probability of bankruptcy, delisting from the commercial register or inclusion
in the list of tax defaulters. The basis for the Business Excellence rating is financial statements that
predict above-average safety and soundness over the next year.
Award for the new cinkarna.si website
In 2022, we redesigned our website www.cinkarna.si, which was entered in the international Web
Excellence Award competition and won the Web Excellence Award in March 2023 in the category of
corporate & B2B websites, entitled: Moving corporate image towards sustainability. The Web
Excellence Award is an annual international competition that promotes excellence and sets standards
in the field of online communication. The competition, now in its eighth year, attracted agencies from
39 countries and 47 US states, submitting more than 1,200 entries in various categories. The prize is
awarded by the Web Academy of Digital Arts and Media.

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Presentation of Cinkarna Celje d.d.
With its almost 150 years of continuous operation, Cinkarna Celje d.d. is one of the most resilient
companies in the Slovenian economy. Until 1968, the Company's defining activity was metallurgy, but
with the launch of the production of titanium dioxide pigment in 1973 and its subsequent expansion,
Cinkarna Celje d.d. is now a chemical-processing company.
Company
Cinkarna, metalurško-kemična industrija Celje, d. d.
Short name
Cinkarna Celje d.d.
Headquarters
Kidričeva ulica 26, 3000 Celje
Telephone - Central Office
+386 3 427 60 00
Telex
36517 METKEM SI
E-mail
info@cinkarna.si
Website
www.cinkarna.si
Person responsible
Aleš Skok, President of the Management Board
Dislocated business unit
Kemija Mozirje
Headquarters
Ljubija 11, 3330 Mozirje
Telephone
03 837 09 00
Mission
Through the professional and socially responsible application of chemical processes, we produce a
wide range of products essential to our daily lives. We provide work and personal growth for our
employees and expected returns for our shareholders.
Vision
The Company aims for growth and efficiency gains in existing and new technologically demanding, high
value-added products. We will achieve our objectives while respecting the principles of sustainable
development and the circular economy.
Values
• Partnership and trust
• Honesty and respect
• Creativity and development orientation
• Commitment to sustainable development and the circular economy
• Belonging and working together to achieve common goals

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Our activities
Cinkarna Celje d.d. is a company with a broad production and sales programme. The different sales
sub-programmes can be grouped into sales groups, which group together products with similar utility.
In recent years, we have discontinued a number of product-sales programmes which did not meet the
profitability or performance criteria.
Our main activities are:
− Production of titanium dioxide (TiO
2
);
− Production of sulphuric acid;
− Zinc processing, including zinc alloys, anodes and zinc wire;
− Production of agricultural products, including plant protection products and growing media;
− Production of masterbatches and powder varnishes;
− A group of fluorinated polymers and elastomers which have properties useful for the transport
of aggressive media and the protection of process and mechanical equipment;
− Semi-finished products of titanium dioxide pigment production: titanyl sulphate, metatitanic
acid and sodium titanate;
− By-products of titanium dioxide pigment production: white gypsum – CEGIPS (intended for the
cement industry and agricultural applications) and red gypsum – RCGIPS (intended for filling
in low-rise construction, low-rise embankment construction and the production of capping
layers).
The main product and sales group is the titanium dioxide pigment, which combines the sales of
different pigment types. This group also includes ultra-fine forms of titanium dioxide, which are high
value-added products since, depending on their crystalline form, they can act as photocatalysts or UV
absorbers. They are integrated into high-technology products (self-cleaning systems, UV-stabilising
materials, etc.). The production and marketing of titanium dioxide pigments account for 80% of our
total sales.
Plant protection products are a very important sales group and one of the pillars of the Company's
future development. We see this as an opportunity to address the global challenges of ensuring
sufficient and safe food. The flagship products of this group are copper fungicides of different
formulations and different active substances used (copper hydroxide, copper oxychloridin, tribasic
copper sulphate). In the area of plant protection products, we pursue a strategy focusing on product
quality and environmentally safe use.
The powder coatings and masterbatches group represents a vertical extension of the core titanium
dioxide pigment production and is becoming an increasingly important sales group for the Company.
Powder varnishes are sold primarily for anti-corrosion and decorative purposes in the manufacture of
household appliances, heating elements and other metal finishes. Masterbatches are intended for
incorporation into plastics to improve their performance properties.
The other areas are the production of PTFE (polytetrafluoroethylene) products, half for internal
consumption and maintenance, the other half for marketing, mainly in the plant protection and
chemical industries. The production of sulphuric acid is mainly for internal use, with any surplus sold
on the market. As a by-product of the production of TiO
2
pigment, we produce CEGIPS, the so-called
white gypsum, which is sold on the cement and plasterboard markets.

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Chart: Share of value sales by product group in 2022
Paints (including decorative paints) and varnishes comprise the largest value sales chain of Cinkarna
Celje d.d. Together they account for more than 60% of sales. This is followed by plastics and the
incorporation of titanium dioxide pigment in other building materials. Other industries are less well
represented in terms of sales. Paints and varnishes, plastics and building materials account for the
majority of titanium dioxide sales.
Chart: 2022 sales by segment
In the context of the Environmental Permit, we have reviewed the options for achieving the titanium
dioxide production volumes in 2021. We have projected emissions trends for different expansion
volumes and prepared a review of the bottlenecks to achieving a capacity of 71,000 tonnes. The
assessment of the realistic options and the feasibility of further production expansion was also carried
over to 2022 and continued in 2023 due to missing data from the external environment.

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Market presence
We operate mainly in the European market, where we generate the majority of our revenues. To a
lesser extent, we are also present in offset markets, mainly in the US dollar currency area. In terms of
geographical location, we identify the EU Member States as the most important markets, followed by
Slovenia, the so-called third world countries and the markets of the former Yugoslavia. Germany is our
largest sales market, accounting for around one third of our sales, followed by France, Italy, Slovenia,
Turkey and the Netherlands.
The countries where we have the largest presence are Germany, Slovenia, Italy, France, Turkey,
Belgium, the Netherlands, Austria, Poland, Greece, Croatia, Algeria, Serbia, Hungary, Spain, Portugal,
Sweden, the Czech Republic, Ukraine and Romania.
As a share of value sales by market, sales to the EU market account for the majority, around 83.5%.
Sales to third countries account for 16.5%.
Chart: Share of value sales by market in 2022

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Organisational structure
The organisational structure comprises the Company's Management Board, six business units and ten
professional departments.
BU Titanov dioksid: Tomi Gominšek, Director
BU Metalurgija: Miran Špegel, Director
BU Kemija Celje: Andrej Lubej, Director
BU Kemija Mozirje: Irena Vačovnik, Director
BU Polimeri: Roman Deželak, Director
BU Vzdrževanje in energetika: Boštjan Podkrajšek, Director
Joint professional departments:
− Finance: Dejana Starčević, Area Coordinator
− Marketing: Irena Franko Knez, Director
− Human Resources and General Services: Marko Cvetko, Head of Department
− Occupational Safety and Health Department: Otmar Slapnik, Head of Department
− Legal Department: Gregor Gajšek, Head of Department
− Quality Department: Ksenija Gradišek, Head of Department
− Environmental Protection Department: Bernarda Podgoršek Kovač, Head of Department
− Accounting Department: Karmen Fujs, Head of Department
− IT Department: Boris Špoljar, Head of Department
− Internal Audit Deperment: Jure Vezjak, Head of Department

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Corporate Governance Statement
Cinkarna, metallurško-kemična industrija Celje, d. d., is organised as a joint-stock company with its
registered office in Celje. The Company has a two-tier management system - with a Management
Board and a Supervisory Board. The Company is managed by the Management Board for the benefit
of the Company, independently and on its own responsibility. The Management Board represents and
acts for the Company and is accountable to the General Meeting and the Supervisory Board.
The Management Board is the collective body of the Company. It is composed of a President and up
to three members. The President of the Management Board is the Chief Executive Officer, and one of
the members of the Management Board is a Works Director. Within the framework of the general
rights and obligations which all members of the Company's Management Board have under the law
and the Company's Articles of Association, the Works Director represents and acts for the interests of
the employees with regard to personnel and social matters. The conditions and procedure for the
appointment and dismissal of the Works Director and his/her powers are laid down in accordance with
the Law on Workers' Participation in Management (ZSDU).
The President of the Management Board has a deputy, who is one of the members of the Management
Board, but is not a Works Director. The President of the Management Board is appointed by the
Supervisory Board. The members of the Management Board are appointed by the Supervisory Board
on a proposal from the President of the Management Board, with the exception of the Works Director,
who is nominated by the Works Council. The term of office of the President and of the members of the
Management Board is up to five years, with the possibility of reappointment. The members of the
Management Board adopt decisions by resolutions adopted by a majority of the votes cast. In addition
to the statutory conditions, the President or a member of the Management Board must have at least
a university degree and at least five years' professional experience. The President of the Management
Board is also a member of the Management Board and is not a senior manager in the Group. This is an
independent position in Cinkarna Celje d.d.
The Company's Management Board has the following responsibilities:
− prepares information on company matters, technical material and resolutions within the
competence of the General Meeting,
− convenes the General Meeting,
− implements the decisions taken by the General Meeting.
The Management Board reports to the Supervisory Board on:
− the profitability of the Company,
− planned business policy and transactions that have a significant impact on the profitability or
solvency of the Company, and other matters in accordance with the law and if so requested
by the Supervisory Board.
Members of the Management Board of Cinkarna Celje d.d. as at 31 December 2022:
− Aleš Skok, President of the Management Board,
− Nikolaja Podgoršek - Selič, Member of the Management Board – Technical Director,
− Filip Koželnik, Member of the Management Board – Works Director.
All board members are from Slovenia, the Technical Director and the Works Director are from the local
area where the Company is based, which represents 2/3 of the board.
The Supervisory Board is composed of six members. All members of the Supervisory Board have the
same rights and duties. Two members of the Supervisory Board are representatives of the Company's
employees, elected by the Works Council and notified to the General Meeting of Shareholders. A
member of the Supervisory Board cannot be a person who is a member of the Management Board, a

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member of the Supervisory Board of three other companies, a member of the Management Board of
a subsidiary, a proxy or business agent of the Company, an employee of a competing company where
there is a conflict of interest, or a member of the Management Board of another capital company on
whose supervisory board a member of the Management Board of Cinkarna Celje d.d. is a member.
The Supervisory Board is appointed by the General Meeting of Shareholders by a simple majority of
the votes cast by the shareholders present, except for two members appointed by the Works Council.
The powers of the Supervisory Board are laid down by law. The detailed arrangements, modalities and
conditions for the work of the Supervisory Board are governed by the Rules of Procedure of the
Supervisory Board. The Management Board must obtain the Supervisory Board's approval for the
establishment of business policy, the adoption of plans, the creation and co-creation of companies,
the increase and transfer of the Company's founder's deposits in companies, the purchase and transfer
of the Company's shares and interests in companies, the granting of proxies, etc.
Meetings of the Supervisory Board are convened by the President of the Supervisory Board on his/her
own initiative or on the initiative of any member of the Supervisory Board or on the initiative of the
Company's Management Board. The Supervisory Board takes decisions at its meetings. A quorum is
present if at least half of the members are present at the meeting. The Supervisory Board normally
meets five times a year.
Members of the Supervisory Board of Cinkarna Celje d.d. as at 31 December 2022:
− Mario Gobbo, President, representative of capital,
− Luka Gaberščik, Deputy President,
− David Kastelic, representative of capital,
− Mitja Svoljšak, representative of capital,
− Dušan Mestinšek, employee representative,
− Jože Koštomaj, employee representative.
In 2022, the representation of women on the Management Board was one-third. There were no
women on the Supervisory Board. The composition of both the Management Board and the
Supervisory Board aims at heterogeneity in terms of professional profile, gender and age.
The Management Board has appointed an Ethical Business Conduct Committee, composed of Filip
Koželnik, Marko Cvetko and Gregor Gajšek.
The Supervisory Board has an Audit Committee, composed of David Kastelic (Chairman), Jože Koštomaj
and Gregor Korošec (external member), and a Human Resources Committee, composed of Mario
Gobbo (Chairman), Dušan Mestinšek, Luka Gaberščik and Mitja Svoljšak.
The Audit Committee prepares proposals for resolutions, positions and opinions within the
competence of the Supervisory Board in connection with the annual and management reports, reports
and opinions of the external auditors, as well as the preparation of the Supervisory Board's reports to
the General Meeting of Shareholders. The Supervisory Board is required to keep the Supervisory Board
informed of its work and activities and to submit reports on its meetings.
The Human Resources Committee prepares proposals for resolutions, positions and opinions within
the competence of the Supervisory Board, in particular with regard to the preparation of proposals on
criteria and candidates for membership of the Company's Management Board, membership of
Supervisory Board committees and support for the establishment and implementation of the
remuneration system for the Company's Management Board.
Remuneration of members of management and supervisory bodies
The remuneration of the members of the management bodies is defined in individual employment
contracts, which are drawn up taking into account the remuneration policy, legislative constraints, best

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practice guidelines and the definitions in the Statutes. The variable part of the remuneration of the
members of the Management Board is determined in accordance with the rules adopted by the
Supervisory Board of the Company. The final amount of the variable remuneration of the members of
the Management Board is approved in accordance with the rules. The remuneration and allowances
of the members of the Supervisory Board are determined by a resolution of the General Meeting of
Shareholders.
Corporate governance code for listed companies
The Company applies the Corporate Governance Code for Listed Companies adopted by the Ljubljana
Stock Exchange and the Slovenian Association of Supervisors in 2021. In accordance with the business
decision of the Company's Management Board, the Company adopts the Code in the form set out in
the notes. Due to the specificities of the governance of a particular company, the legal basis (ZGD-1,
ZTFI-1, MAR, etc.) is strictly followed in areas deviating from the Code. Below we provide an overview
and explanations of deviations from the individual provisions of the Code.
Point 4 – The Company does not have a specific Diversity Policy document. The Diversity Policy section
outlines the framework guidelines.
Point 5.7 – The Governance Statement has been assessed by the external auditor as part of the regular
audit. No additional external adequacy assessment has been carried out.
Point 6 – The Supervisory Board, in cooperation with the Management Board, developed the
Remuneration Policy for Management and Supervisory Bodies in accordance with the relevant
legislation and best practice recommendations in this area and submitted it to the General Meeting
for approval. The document was not approved by the General Meeting. For more information, see
Remuneration of members of the management and supervisory bodies.
Point 7 – The Company does not have a specific Sustainable Operations Policy document, as
sustainable operations are disclosed in the context of the present report and the Quality Assurance,
Environmental, Health and Safety Policy.
Point 10.1 – The Company has concentrated ownership, where the two largest shareholders hold more
than 20% of the voting rights. The majority of shareholders are also from Slovenia. For the reasons
mentioned herein, we do not allow participation in the General Meeting by electronic means.
Point 16 – The evaluation of the work of the Supervisory Board is carried out by the members
themselves, following the methodology and the Manual for the Evaluation of the Effectiveness of
Supervisory Boards prepared by the Association of Supervisors of Slovenia. The evaluation process was
carried out in a professional and objective manner and therefore there was no need for external expert
support and no external audit of the Supervisory Board's work was carried out in cooperation with a
specialised institution or other experts.
Point 20.5 – The function of Secretary of the Supervisory Board is performed by a person employed by
the Company who receives no additional remuneration for performing this function.
Point 26 – The Company does not yet have pre-established procedures in relation to related party
transactions to assess whether a transaction is one that will be entered into in the ordinary course of
the Company's business and on arm's length terms. The Company did not record any related party
transactions during the reporting period.
Point 30 - The Company does not have a defined corporate communication strategy as an integral part
of the Corporate Governance Policy. The Company's communication or transparency is the
responsibility of the Company's management and professional departments. Public announcements
(SEOnet and the Company's websites) comply with legal requirements and contain information that

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enables an investor in securities to assess the situation and to evaluate the impact of a business event
on the price of a security.
Code of ethics and conduct
The fundamental principles and rules of conduct and behaviour of the management and all employees
of the Company are set out in the Code of Ethics and Conduct. It includes a standard of performance,
management and leadership that contributes to the creation of a corporate culture and excellence.
The Code commits the Company to the highest standards of business and ethical conduct and to the
development of a culture of ethical behaviour based on ethical criteria that are binding on members
of the Management Board and senior executives, as well as on all other employees. Any breach of the
ethical criteria is sanctioned accordingly. In case of ambiguity regarding the Code, doubts as to proper
conduct, open questions and possible borderline cases, employees may seek clarification of the Code
from the management or from a person authorised by the management.
The Company is committed to ethical conduct in all aspects of its business. Employees are required to
conduct their work in an ethical and professional manner, in accordance with the Code and the
Company's values, and in compliance with applicable laws, rules, regulations and the Company's
internal acts. Employees are obliged to refrain from any conduct that materially or morally damages
the business interests and reputation of the Company.
All employees who know of or have received information about violations or actions that may lead to
violations of the Code of Ethics and Conduct are required to report such information to their supervisor
or anonymously by providing the information:
− to razkritja@cinkarna.si,
− in writing to the Management Board,
− in the mailboxes provided for this purpose.
The Management Board promptly forwards the information received on misconduct to a standing
group of at least three members, i.e. the Ethical Conduct Committee, for review and appropriate
consideration.
Diversity policy
The sum total of the individual differences, life experiences, knowledge, ingenuity, innovation, self-
expression, unique skills and talents that our employees bring to their work is an important part not
only of our culture, but also of our corporate reputation and achievements. We accept and encourage
differences among our employees based on age, colour, disability, ethnicity, marital or family status,
gender identity or expression, language, national origin, physical or mental ability, political affiliation,
race, religion, sexual orientation, socio-economic status and other characteristics that make our
employees unique. All employees have a duty to treat others with dignity and respect at all times.
Employees are expected to be inclusive while at work, in or out of their job functions, and at all
company-sponsored events.
A diversity policy for the management and supervisory bodies has been developed but has not yet
been adopted. The aim is to optimise the effectiveness of these bodies, thereby enhancing the
development, competitive advantages and corporate reputation of the Company.
The diversity policy in the management and supervisory bodies is implemented through an appropriate
recruitment and selection process, with the involvement of the Human Resources or Nomination
Committee. The Company's bodies comply with and implement it in accordance with the applicable
legislation under the Labour Relations Act (ZDR-1) and with the principles and provisions of the Codes,
which specify the content and make recommendations in this area.

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Any individual who expresses an interest and meets the criteria laid down by law, the Company's
Articles of Association and the Corporate Governance Code is eligible to apply for membership. The
following aspects of the diversity policy are taken into account in the composition of the Supervisory
Board and the Management Board: gender, age, education and professional experience.
Once adopted, the policy will be published on the Company's website and on the SEOnet portal.
Respecting human rights
We respect human rights as set out in internationally recognised principles and guidelines. We are
committed to tolerance, mutual respect and basic human rights. We reject any form of ill-treatment,
harassment or discrimination. We act ethically and professionally and in accordance with the values of
the Company. We expect this commitment from our management, employees and business partners.
The Company did not experience any cases of human rights violations, nor did we record any cases of
discrimination in 2022.
Policy on prohibition of sexual and other harassment and ill-treatment in the workplace
The Company's Management Board has adopted Rules on the Prohibition of Sexual and Other
Harassment and Ill-Treatment in the Workplace. Accordingly, an Internal Representative is designated
to receive reports, provide assistance and information. The Representative is a trusted person to whom
a person/victim who has suffered sexual or other harassment and ill-treatment in the workplace may
turn for advice, support and information on measures to protect against sexual and other harassment
and ill-treatment.
Combating corruption and bribery
In performing their duties, exercising their rights and obligations and taking business decisions and
actions on behalf of Cinkarna Celje d.d., employees are obliged to consider the best interests of the
Company before their own interests or the interests of third parties. Donations and sponsorships are
made in accordance with the Company's mission, vision and values, mainly in the sports and cultural
fields.
We seek and develop competitive advantages by increasing our own productivity and efficiency, never
through unethical or illegal activities. We compete in the marketplace in a fair and honest way.
Appropriate and expected conduct is further defined in the Code of Ethics and Conduct. A mechanism
is in place to disclose or report possible improper practices and cases of corruption, which have not
been identified to date.
Internal control and risk management system in relation to the financial reporting process
We have a system of operational and supervisory internal controls in place at all levels and in all areas
of our business to manage the risks affecting our ability to achieve our objectives. These are targets
for:
− efficiency and business performance,
− reliability of financial reporting,
− compliance with legal and internal regulations.
The control activities and the persons responsible are set out in internal documents (job descriptions,
authorisations, organisational regulations, internal rules, rules of procedure).
At the Company, we ensure the following:

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− Accounting control of data, which involves assessing the accuracy of accounting data and
correcting any irregularities identified. Implementation is the responsibility of the Accounting
Department and the Finance Department;
− Verification of the reliability of accounting data, carried out by means of an inventory of assets
and debts. The inventory is carried out by a permanent inventory commission in accordance
with the annual inventory schedule. The head of the inventory and the members of the
inventory commission are organised in the Accounting Department. Special inventory
committees may also be appointed by the Company's Management Board for specific types of
inventories or extraordinary inventories;
− Assessing deviations between the magnitude of what has been achieved and what was
planned, which can show shortcomings in implementation, as well as in the planning of
objectives. These activities are carried out within the Accounting Department;
− Internal control over the implementation of the prescribed procedures in the areas of
procurement, storage and consumption of materials and production, storage and sale of
products (control of the use and approval of the prescribed documentation, analysis of any
discrepancies and proposal of measures). These activities are carried out within the
Accounting Department and the management of the Company;
− Internal controls in the computerised information system relating to the management,
infrastructure, security, procurement, development and maintenance of software support are
provided by the IT Department. The completeness and accuracy of data capture and
processing is ensured by application-specific controls or by controls at the users of the
software solutions;
− The system of internal controls is complemented by a system for carrying out assessments
based on:
• ISO 9001 – Quality Management Systems,
• ISO 14001 – Environmental Management Systems and the EMAS regulation for BU
Kemija Mozirje,
• ISO 45001 – Occupational Health and Safety Systems;
− Internal audits of processes, carried out by qualified internal auditors, in order to verify that
activities are performed in accordance with the requirements of the management system and
that the management system in place is adequate and effective to achieve the objectives set.
External audits are carried out by a selected certification company;
− Audit of the annual accounts by an external audit firm;
− Once a year, based on a decision of the Management Board, a review of the functioning of the
operational and supervisory internal controls. The Management Board determines by
resolution the responsible party, the areas of control and the timetable for the control.
The Internal Audit Department was set up in 2016. Based on an adopted core charter, rules of
procedure and plan, it has been fully operational since 2017.
Deviations identified in each form of internal control are analysed by the persons responsible and the
management of the Company and, on that basis, action is taken to eliminate or prevent the causes of
risks that have caused or could cause deviations from the rules and objectives set by the Company.
Information on the functioning of the Company's General Meeting, including its powers,
shareholders' rights and their exercise
The General Meeting is convened by the Management Board of the Company on its own initiative, at
the request of the Supervisory Board or of the shareholders of the Company representing one
twentieth of the share capital. The General Meeting takes note of the annual report and validly decides
at the meeting by a majority of the votes cast, in particular on the following:

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− use of balance sheet profits,
− appointment of the members of the Supervisory Board,
− discharge of the members of the Company's Management Board and Supervisory Board,
− appointment of the auditor, etc.
It decides, in particular, by a three-quarters majority on the following matters:
− amendments to the Articles of Association,
− measures to increase or reduce share capital,
− changes in the Company's status and dissolution, and in any other case provided for by law or
by the Articles of Association.
Shareholders may attend the General Meeting and exercise their voting rights only if they have notified
the Company's Management Board in writing of their attendance at the General Meeting not later
than the end of the fourth day before the General Meeting. At the General Meeting, the number of
votes of each shareholder is determined by the votes of the shares which, according to the share
register, are held by that shareholder as at the end of the seventh day preceding the date of the
General Meeting. Shareholders may exercise the rights attached to their shares directly at the General
Meeting or by proxy. The proxy must be given in writing and lodged with the Company. As a general
rule, one General Meeting is held per year.
Identification and management of impacts
The mission and vision of Cinkarna Celje d.d. is based on sustainable development, which means that
we strategically identify and manage all significant impacts on the environment, society and the
economy, while at the same time identifying and managing all significant impacts that the wider
society has on the Company (environmental-climate, social and economic-political aspects). Due to the
complexity of the impacts, which are dynamically changing, we have identified the key material
impacts according to the three pillars of Environment, Society and Governance (ESG), and ranked them
in order of importance in an inter-stakeholder dialogue with representatives of the stakeholder groups.
More on this is revealed in the Matrix of Importance section.

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Figure: Demonstration of the interdependence of impacts between Cinkarna Celje d.d. and key
stakeholders in the context of sustainable management (Environment, Society, Governance – ESG)
The commitment to sustainability is set out in the Quality Assurance, Environmental, Health and Safety
Policy, which is approved by the CEO, the Code of Ethics and Conduct, and the Integrated Management
System Rules of Procedure, which are prepared by the responsible departments and approved by the
Management Board.
The highest governance body is involved in compliance monitoring and in the processes of identifying
and managing Cinkarna Celje's impacts on the economy, the environment and people in the context
of risk management systems, framework and performance targets, and in communicating the results
of audits, inspections and assessments.
Top management delegates responsibility for managing impacts to the responsible persons in each
department in the Company, either by means of a job description sheet or by delegation of authority.
Identified non-conformities from audits, inspections and assessments are addressed in the relevant
organisational units or processes. The implementation of the correction is monitored by the highest
authority through a reporting system of performance targets, review of the realisation of investments,
projects, measures and the correction of non-conformities. The highest governance body
communicates directly with stakeholders or authorises the responsible departments to do so.
The effectiveness of the organisation's processes is reported to the highest governance body:
− once a year at the annual management review,
− four times a year to the wider College of the Management Board,
− once a year at the meeting of internal auditors of integrated management systems,
− once a year at a meeting with external auditors of integrated management systems,
− at project management team meetings,
− through internal audit reports,
− through records of business units and departments.

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At Cinkarna Celje d.d., we follow and comply with all legal obligations under national and European
legislation. During the reporting period, there were no cases of fines or other sanctions for non-
compliance with legal obligations. As a rule, cases of non-compliance are detected by chance
discoveries and audits by the Internal Audit Department. Appropriate action is taken depending on the
findings.
President of the Management Board
Aleš Skok, univ. dipl. in chemical engineering technology, MBA – USA
Management of the Company
Member of the Management Board – Deputy Chairman of the Management Board – Technical Director
Nikolaja Podgoršek Selič, univ. dipl. in chemical engineering, spec.
Member of the Management Board – Works Director
Filip Koželnik, Master of Business Studies

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Statement of non-financial performance
Responsible management, which takes into account and pursues the objectives of sustainable
development in the areas of corporate performance, social responsibility and respect for the natural
environment, is at the heart of our strategic choices. In 2022, we embarked on an even bolder and
more comprehensive journey to align our business with environmental, social and governance (ESG)
considerations, which will also underpin our strategy for the next five-year period 2024-2028. We
recognise that identifying and effectively managing climate-related risks is a key consideration for our
short- and long-term performance and an important aspect of our relationship with our stakeholders.
We are therefore progressively integrating sustainability considerations more comprehensively into
our strategy and all our processes, depending on their importance.
The highest governance bodies are actively involved in setting and implementing sustainability policies
and are responsible for ensuring that sustainability drives development and is part of the Company's
vision and mission. The responsibilities of the highest governance body are set out in the Corporate
Governance Statement. Governance is based on an ethical approach towards employees, external
stakeholders and competitors, and on recognising the impact on the social and natural environment.
Sustainability due diligence is an ongoing practice at Cinkarna Celje as part of the management and
control systems that identify, prevent, mitigate and address actual and potential negative impacts on
the environment and people (including human rights) associated with our operations. These include
negative impacts directly related to our own activities as well as (potentially) negative impacts of our
products or services through business relationships.
Our sustainability due diligence responds to changes in the Company's activities, business
relationships, operations, purchasing and sales. Our processes are based on the international
instruments of the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for
Multinational Enterprises.
In the report, we disclose the following aspects of the sustainability due diligence:
− All risk areas (under Risk and Opportunity Management)
− Audits - internal and external, financial and legal due diligence (under Integrated
Management System)
− Employee engagement and satisfaction due diligence (under Employee Relations)
− Supplier due diligence, ISO 14000 compliant (under Supplier Relations)
− Customer satisfaction due diligence (under Customer Relations)
− Environmental due diligence (under Our Approach to the Environment)
Our own expectations and those of external stakeholders were tested in 2022 using a materiality
matrix. We prioritised 12 environmental indicators and 18 corporate and governance indicators. In this
way, we identified which areas are most important to us and our stakeholders. We present the
stakeholders and the materiality matrix in more detail in the Stakeholder Relations section.
Our employees are also important stakeholders, and we are committed to providing the right
conditions for their personal and professional development, health, safety and well-being at work.
Recruitment and staffing is based on the principle of non-discrimination and equal opportunities. We
ensure regular professional development and encourage innovation among our employees. We are
aware of the high age structure of our employees and we strive to attract new young and technically
qualified staff, including through a mentoring system and the awarding of scholarships. We respect
the right of employees to freedom of association within the Company's representative trade unions.
We report on our relations with our employees in the Employee Relations section.

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We operate in the chemical industry, which is subject to certain occupational health and safety risks,
so we regularly invest in safety equipment, improve technological processes and update technologies,
educate our employees and introduce activities to prevent workplace accidents. We are ISO 45001 –
Occupational Health and Safety certified and have a system in place to assess workplace risks according
to their incidence and intensity. Our overarching goal is zero injuries at work. We encourage our
employees to lead a healthy lifestyle. As part of our health promotion programme, we offer them
various activations such as various sports activities, preventive health check-ups, training, etc. More
on our approach in this area is defined in the Occupational Health and Safety section.
We operate in a global market and are part of global supply chains. We evaluate our key suppliers
annually. The assessment includes checking whether the supplier is certified to ISO 14001 -
Environmental Management Systems, or whether and how it manages emissions to air and water, raw
material and energy efficiency, packaging waste, and excessive noise. In the future, we will also include
other sustainability indicators in the assessment, taking into account the Environmental, Social and
Governance (ESG) domains, which will be set out in the Supplier Sustainability Code of Conduct. Our
key supplier groups and how we assess our supply chain are set out in the Supplier Relations section.
Our business is mainly focused on the European market, where we have identified an opportunity to
develop high-quality products with higher added value. We are aware that market demands are
increasing and require greater flexibility, so we are developing new solutions in our flagship product
titanium dioxide pigment and other supporting programmes such as copper fungicides, polymers and
metallurgy. We are also launching a new substrate, Humovit EKO. Our customer relations, new product
development and complaint handling are described in the Customer Relations section.
We recognise the importance of developing the local environment in which we operate, which is why
we invest in sport, culture and practical training for young people. We participate in socially
responsible activities in the local environment and support the most vulnerable groups. We
communicate regularly with the external professional and general public and build good neighbourly
relations, including through participation in various events, open days, press conferences and other
socially responsible actions. We regularly work with schools to raise awareness among young people
about the role of the chemical industry in tackling climate change and the low carbon transition. We
explain how we work with the local community in the Local Community Relations section.
We strive to reduce our negative impacts and increase our contribution to society and the natural
environment, which is why we invest in the best available technologies, renewable energy, efficient
energy management, responsible waste management and innovative solutions for the reuse of waste
materials, as described in the section Our Approach to the Environment. We support and carry out
research to protect water resources, soils and natural habitats, and to conserve and restore
biodiversity. We regularly monitor emissions to air and control emissions below the permitted limit.
We also demonstrate our responsible attitude towards the environment by participating in the
Responsible Care Programme for the Chemical Industry, which is our voluntary commitment to ensure
continuous improvements in environmental protection, health and safety at work, often beyond the
regulatory requirements. Environmental and other risks are managed through an established ISO 9001
quality system, ISO 14001 environmental management system and ISO 45001 occupational health and
safety system, and we are registered in the Environmental Management and Audit Scheme (EMAS) at
the business unit Kemija Mozirje. We also regularly comply with legislative requirements in the
environmental field.

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Report on environmentally sustainable economic activities and investments of Cinkarna
Celje d.d. for 2021 and 2022
Cinkarna Celje d.d. discloses information on how and to what extent its activities are related to
economic activities that are considered environmentally sustainable in accordance with Articles 3 and
9 of the Taxonomy Regulation (Regulation (EU) 2020/852 of the European Parliament and of the
Council of 18 June 2020 establishing a framework for the promotion of sustainable investments and
amending Regulation (EU) 2019/2088).
Disclosure refers to Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing
Regulation (EU) 2020/852 of the European Parliament and of the Council by laying down technical
screening criteria for determining the conditions under which an economic activity is considered to
contribute significantly to mitigating or adapting to climate change, and for determining whether that
economic activity does not significantly impair any of the other environmental objectives.
Proportion of revenue from products or services related to economic activities aligned with the
taxonomy
Cinkarna Celje d.d. specialises in the production and marketing of titanium dioxide, an activity that has
not yet been assessed for suitability or compliance with the taxonomy, i.e. it is not listed among the
taxonomically acceptable activities in terms of meeting the climate objectives. This does not in any
way imply that the activity is not carried out with a high degree of environmental responsibility or
decarbonisation efforts, nor does it imply that it does not have actual or potential significant impacts
on the decarbonisation of the economy (in particular as an enabling activity for the construction
industry).
The activities of Cinkarna Celje d.d. are complemented by a wide range of other products such as:
powder varnishes, masterbatches, zinc wires and alloys, agricultural products, manufacture of
chemical process equipment and sulphuric acid, with which the Company also seeks opportunities for
taxonomically aligned revenues in terms of so-called enabling activities.

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Table: Proportion of revenue from products or services related to economic activities aligned with the
taxonomy – disclosure for Cinkarna Celje d.d. for 2021 and 2022
Economic
activity
NACE
Code
Description of
activity according to
the taxonomy
2021
2022
Revenue in
EUR
Revenue
as %
Revenue in
EUR
Revenue
as %
A) Activities aligned with the taxonomy
Waste
management
E38.11
Collection and
transport of source-
separated fractions
of non-hazardous
waste
62,492
0.03
81,123
0.04
Waste
management
E38.32,
F42.99
Material recovery
from non-hazardous
waste (copper
consumption and
recovery)
4,028,476
2.09
4,751,526
2.09
Total revenue from activities aligned to the
taxonomy
4,090,968
2.13
4,832,649
2.13
B) Activities unacceptable for the taxonomy
Revenue from activities not compatible for
the taxonomy
188,371,131
97.87
222,320,467
97.87
Total A + B
192,462,100
100.00
227,153,116
100.00
Net revenues of Cinkarna Celje d.d. amounted to EUR 227,153,116 in 2022 and EUR 192,462,100 in
2021, of which revenues from products or services related to economic activities aligned with the
taxonomy amounted to EUR 4,832,649 (EUR 4,090,968 in 2021), or 2.13%. In 2022, EUR 222,320,467
(2021: EUR 188,371,131) of revenue was from activities not compatible with the taxonomy,
representing 97.87 per cent.
The activity taxonomically aligned to the NACE classification E38.11. is the separate collection of scrap
metals, paper and plastics and sales to processors of Cinkarna Celje d.d., which generated revenues of
EUR 81,123 in 2022 and EUR 62,492 in 2021, or 0.04% of total revenues in 2022 and 0.03% of total
revenues in 2021. All separately collected and transported non-hazardous waste that is separated at
source is intended to be prepared for reuse or recycling.
From material recovery from non-hazardous waste (consumption and recovery of copper), under NACE
classification E38.32, F42.99, Cinkarna Celje d.d. generated revenues of EUR 4,751,526 or 2.09% of
total revenues in 2022, and revenues of EUR 4,028,476 or 2.09% of total revenues in 2021.
Zinc alloys are produced using scrap aluminium and scrap copper as alloying elements. Zamak residues
are used as recycled material in the production of zinc alloys.
We process waste copper, waste copper chloride and copper ash from the sludge from washing fishing
nets. The technological rejects from the production of masterbatches (cakes, spaghetti) are processed
into granules and added in a certain proportion to the input materials for the production of
masterbatches. The rejects from the production of powder varnishes (filter dust, larger particles) are
processed into chips and added in a certain proportion to the materials used in the production of
powder varnishes.

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An essential contribution to climate change mitigation is that the activity converts at least 50% (by
weight) of separately collected non-hazardous waste recovered into secondary raw materials that are
suitable for replacing untreated materials in production processes.
For the activity, we have reviewed the technical criteria set out in the delegated documents. The
activity does not cause significant harm to other environmental objectives.
Indicators are calculated on the basis of the definitions in Annex 1 Key Performance Indicators for Non-
Financial Enterprises of Commission Delegated Regulation (EU) 2021/2178 of 6 July 2021
supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by specifying
the content and presentation of the information to be disclosed by undertakings to which Article 19a
or 29a of Directive 2013/34/EU applies on their environmentally sustainable economic activities, as
well as the methodology for fulfilling the disclosure obligation.
The key performance indicator for revenue was calculated as the fraction of net revenue derived from
products or services, including intangible ones, related to economic activities aligned with the
taxonomy (numerator) divided by net revenue (denominator).
Revenue comprises revenue recognised in accordance with paragraph 82(a) of International
Accounting Standard (IAS) 1 as adopted by Commission Regulation (EC) No 1126/2008 (1).
Proportion of investment in fixed assets in products or services related to economic activities
aligned with the taxonomy
Table: Proportion of investments in fixed assets in products or services related to economic activities
aligned with the taxonomy – disclosure for Cinkarna Celje d.d. for 2021 and 2022
Economic
activity
NACE
Code
Investment
description
2021
2022
Investments
in fixed
assets in
EUR
Investments
in fixed
assets as %
Investments
in fixed
assets in
EUR
Investments
in fixed
assets as %
A) Investments in fixed assets aligned with the taxonomy
Energy
D35.11
and
F42.22
Energy
production
using
photovoltaic
technology
313,227
2.77
736,984
6.99
Total investments in fixed assets
aligned with the taxonomy
313,227
2.77
736,984
6.99
B) Investments in fixed assets not compatible with the taxonomy
Total investments in fixed assets not
compatible with the taxonomy
11,012,181
97.23
9,809,511
93.01
Total A + B
11,325,408
100.00
10,546,495
100.00
The total investments in the fixed assets of Cinkarna Celje d.d. amount to EUR 10,546,495 in 2022 and
EUR 11,325,408 in 2021. Investments of Cinkarna Celje d.d. in fixed assets, aligned with the taxonomy,
amounted to EUR 736,984 in 2022 and EUR 313,227 in 2021, representing 7% of total fixed asset
investments in 2022 and 2.77% in 2021. Investments in fixed assets not compatible with the taxonomy
amounted to EUR 9,809,511 in 2022 and EUR 11,012,181 in 2021, representing 93% of total
investments in fixed assets in 2022 and 97.23% in 2021.

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The taxonomically aligned activity is the production of electricity using photovoltaic technology (NACE
Revision 2 statistical classification of economic activities – D35.11 and F42.22).
We have reviewed the technical criteria for the activity. The activity makes a significant contribution
to climate change mitigation. We have assessed the activity from a climate change adaptation
perspective. We have assessed which physical climate risks listed in Appendix A, Section II of the
Commission Delegated Regulation (EU 2021/2139 of 4 July 2021) could affect the viability of the
economic activity during its expected lifetime. We have not identified any risks as material.
The PV power generation facility is not located on biodiversity site land (the location is on the roof of
a building in an industrial setting), and therefore no mitigation measures are required. The equipment
used is durable and potentially at least partially recyclable, thus meeting the objectives of the
transition to a circular economy.
The proportion of investments in fixed assets was calculated by including in the denominator the
increase in tangible and intangible assets during the financial year before depreciation and any
remeasurements, including those arising from revaluations and impairments, and excluding changes
in fair value. The denominator also includes increases in tangible and intangible assets arising from
business combinations. We have included in the numerator the part of fixed asset investments
included in the denominator that is related to assets or processes associated with economic activities
aligned with the taxonomy.
An investment in fixed assets that is aligned with the taxonomy expands the economic activity of the
enterprise aligned with the taxonomy.
Proportion of investments in working capital in products or services related to economic activities
aligned with the taxonomy
Table: Proportion of investments in working capital in products or services related to economic activities
aligned with the taxonomy – disclosure for Cinkarna Celje d.d. for 2021 and 2022
Economic
activity
NACE
code
Investment
description
2021
2022
Investments
in working
capital in
EUR
Investments
in working
capital as %
Investments
in working
capital in
EUR
Investments
in working
capital as %
A) Investments in working capital aligned with the taxonomy
Waste
manage-
ment
E38.32
and
F42.99
Material
recovery from
non-hazardous
waste (copper
consumption
and recovery)
2,695,769
1.72
3,733,945
1.89
Total investment in working capital
aligned with the taxonomy
2,695,769
1.72
3,733,945
1.89
B) Investments in working capital not compatible with the taxonomy
Total investments in working capital
not compatible with the taxonomy
154,322,944
98.28
194,349,114
98.11
Total A + B
157,018,713
100.00
198,083,059
100.00

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Cinkarna Celje d.d. invested EUR 198,083,059 in 2022 and EUR 157,018,713 in working capital in 2021,
of which EUR 3,733,945 in 2022 (EUR 2,695,769 in 2021) were taxonomy-aligned investments in
working capital, representing 1.89% (1.72% in 2021). The investments in working capital were related
to the activity of material recovery from non-hazardous waste (copper consumption and recovery),
which falls under NACE classification codes E38.32 and F42.99.
The proportion of investment in working capital is calculated as the numerator divided by the
denominator.
The denominator includes direct non-funded costs associated with the daily servicing of tangible fixed
assets by the Company or third party to which the activities are outsourced, which are necessary to
ensure the continuous and efficient operation of such assets.
The numerator is equal to the part of investments in working capital included in the denominator,
which is any of the following:
a) Related to the assets or processes associated with the economic activities aligned with the
taxonomy, including training and other human resource adaptation needs, and direct non-
investment costs representing research and development;
b) Part of a fixed asset investment plan to expand economic activities aligned with the taxonomy
or to enable economic activities acceptable to the taxonomy to become aligned with the
taxonomy within a predetermined timeframe;
c) Related to the purchase of output from economic activities aligned with the taxonomy and
individual measures that make the targeted activities low-carbon or lead to reductions in
greenhouse gas emissions, and individual measures for the renovation of buildings listed in
delegated acts adopted pursuant to Article 10(3), 11(3), 12(2), 13(2), 14(2) or 15(2) of
Regulation (EU) 2020/852, provided that such measures are put in place and implemented
within 18 months.
Management of the Company
President of the Management Board
Aleš Skok, univ. dipl. in chemical engineering technology, MBA – USA
Member of the Management Board – Deputy Chairman of the Management Board – Technical Director
Nikolaja Podgoršek Selič, univ. dipl. in chemical engineering, spec.
Member of the Management Board – Works Director
Filip Koželnik, Master of Business Studies

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Strategic orientations
Our five-year strategy for 2019-2023 expires in 2023. A new strategy for the five-year period 2024-
2028 is under preparation, which will be based on long-term sustainable values and orientations, in
line with circular economy models and the strategic objective of decarbonisation.
The Company will:
• Meet customers' needs comprehensively through the services provided by its business;
• Build partnerships with suppliers and customers;
• Continuously create value for its stakeholders;
• Maintain and develop a supportive environment for its employees; provide training and
development for its staff; and progressively improve its age structure by recruiting young,
professionally qualified staff;
• Create a partnership with the social environment, which is the basis for the long-term
development of both the Company and the social community as a whole;
• Strive for sustainability in its activities.
The strategic objectives are:
• Maintain its position as a reliable supplier in the field of titanium dioxide pigment sales;
• Remain a dynamic, flexible and customer-oriented company;
• Ensure comprehensive customer service;
• Introduce modern technologies for efficient energy use and environmentally sound production;
• Pursue operational excellence, quality, and customer and employee satisfaction.
Plan for 2023
In the next financial period, we intend to stick to our long-term business strategy, which is primarily
based on an active marketing approach to find and develop the most profitable buyers and markets,
to increase market shares in the highest quality markets and to build long-term partnerships with key
customers. We plan to adopt a more restrictive policy in the area of cost management of materials,
raw materials, energy and services. At the same time, we recognise that employees are an important
cornerstone of business success and we will continue to work with the representative trade unions
and employee representatives to ensure that employee remuneration also adequately reflects the
Company's performance and the quality of its results.
We focus on maximising production capacity, exploiting market potential to sell higher value-added
products, optimising production costs and implementing investment plans. Financial management is
traditionally conservative, the Company is financially stable, cash levels are high and allow for a smooth
and timely coverage of all liabilities.
The Company's strategy will continue to be focused on ensuring the highest possible levels of volume
production and sales and on exploiting the potential of the most profitable pigment markets. We will
allocate sales volumes to the most profitable markets with a high degree of flexibility. Traditionally,
we have followed the principles of a conservative financial policy and a sound cash position, conscious
of market volatility and the associated risks. At the same time, good performance, the existence of
cash surpluses and forecasts also imply appropriate and adequate rewards for our owners.
In terms of enabling sales growth, investments will be made mainly in the procurement of new
titanium dioxide production facilities and in maximising the availability of existing ones. Investments
will be made on a programme-by-programme basis according to need, capacity and prospectivity, and

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in line with the five-year strategic plan. We will invest primarily in projects to remove bottlenecks,
increase energy efficiency, reduce negative environmental impacts and improve safe and healthy
working conditions. The largest share of our investments will be in titanium dioxide production.
The Company will also focus on managing the purchasing process in the face of unpredictable business
cycles with significant changes in selling and purchase prices, which can have a significant impact on
the operating result and cash flow.
In the coming years, a new cycle of investment will be made, which we need for stable ongoing
operations. With the investment in expanding production capacity at the existing site, the production
volume of titanium dioxide pigment is approaching the regulatory ceiling and alternative options will
need to be sought in the future to further grow the business.
Investments made and planned
In 2022, we spent EUR 10.55 million on investments, the purchase of fixed assets and replacement
equipment, and environmental investments, representing just under 70% of the planned budget for
2022.
Investment realisation was 56%. We are behind plan due to a number of factors, the most important
of which are the search for an appropriate solution, the documentation procedures, the long delivery
times and a lack of human resources. Realisation for replacement equipment is 108%. Here we slightly
exceeded the plan, mainly due to the sharp increase in delivery times. In fact, stock-outs of materials
can seriously jeopardise our operations. The largest deviations from the plan were in the area of fixed
asset purchases, where we achieved a poor 43% realisation. The reasons for the underperformance
are similar to those for investments.
Investments made in 2022
As usual, in 2022, the largest share of the invested funds was earmarked for titanium dioxide
production to continue the activities of the multi-year project.
The third line of the second stage of neutralisation of waste acid has been successfully completed with
a technical inspection and an operating licence.
An additional sand mill for grinding the calcinate after wetting is supplied. Site preparation and
installation will be completed in 2023. The mill is planned to be commissioned in the second quarter.
We continued with the planned work to implement dust control measures in titanium dioxide
production.
An additional flocculant device has been installed to allow the addition of a different flocculant to
accelerate the settling of the suspensions on the white part and the final processing.
We continue to successfully build solar power plants. In the energy field, we have also invested in
optimising the steam pipeline and carried out activities to enable one of the calcination furnaces to
burn extra-light fuel oil (ELKO).
We also carried out investment work on the rehabilitation of individual facilities (TiO
2
operational
maintenance building – phase III, replacement of windows in the powder varnish production plant at
Kemija Mozirje).

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The main part of the funds planned for the use of environmental provisions (36%) was earmarked for
the rehabilitation of the Bukovžlak Non-hazardous Waste Landfill. A test field for the new C1 drainage
under the Bukovžlak high embankment barrier was carried out and an expert report on the
implementation was obtained, which is the basis for the design of the complete drainage line.
Plans for 2023
The total planned investment in 2023 is EUR 20,479,040, which includes capitalised own products and
services of EUR 1,401,325, but excludes the planned environmental decommitment activities of EUR 2
million. The planned value of investments, including capitalised own products and excluding the
planned environmental decommitment, is 44% higher than the 2022 plan, representing 10.2% of
planned sales in 2023 and 157% of depreciation.
69% of the total investment will be for capital expenditure, 24.6% for the purchase of replacement
equipment and 6.4% for the purchase of individual fixed assets.
Chart: Proportion of funding to planned investments in 2023
Investments will be made on a programme-by-programme basis, according to need, capacity and
prospectivity, and in line with the five-year strategic plan. With the aim of increasing energy efficiency
and self-sufficiency, a significant part of the investment funds will be earmarked for:
• Projects to build additional solar power plants, an electricity grid and transformer substations
to connect the solar power plants to the grid;
• Developing projects to cogenerate electricity from the steam produced by burning sulphur;
• Preparing the project, obtaining the building permit and ordering the equipment to install a
battery storage system;
• Better utilisation of steam peaks;
• Better use of waste heat;
• Implementing measures to reduce electricity consumption (replacing lighting and energy-
wasting electric motors, installing frequency converters, optimising the operation of
compressors for compressed air production).
As a precautionary measure against the foreseen possibility of a partial reduction of natural gas supply,
we will rehabilitate the extra-light fuel oil (ELKO) tank, carry out the necessary installations and equip
one calcination furnace with a burner that allows the consumption of ELKO in addition to natural gas.

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A significant part of the investment will also be devoted to the implementation of connections that
will allow the internal recycling of a large part of the process water.
While our investment focus has shifted to energy transformation in the current circumstances, we
continue to invest significantly in projects to address bottlenecks, reduce negative environmental
impacts and improve safe and healthy working conditions. The largest share of our investments will be
in titanium dioxide production, where we will continue to prepare projects and permits and partially
implement investments:
• Installation of an additional 12.10 C storage tank for the discharge of the solution from the
unloading towers;
• Modernisation of the storage and preparation of lime and calcite slurry;
• Installation of a central vessel for the third vacuum cooling line;
• Installation of a fifth sulphacide reactor for the treatment of calcination flue gases;
• Expansion of capacity in surface finishing 2.
To address the bottlenecks in titanium dioxide production, we continue to invest in:
• Pumping the solution from 12.01 A into the unloading towers;
• A third filter press for spinning metatitanic acid;
• The completion of the project to install a third sand mill for wet grinding of calcinate.
Some major investments are also foreseen in 2023 in the implementation of preventive measures to
reduce dust at BU Titanov dioksid.
We will upgrade the data transmission network for the production processes at BU Titanov dioksid and
upgrade the control and management of at least two processes with the most outdated software. The
upgrade of the production information system Spekter is underway. To enhance information security,
a virtual environment of PCS7 servers and operating stations is planned to be set up, thus enabling the
establishment of a redundancy system.
In the sulphuric acid production unit, absorption tower 1 and heat exchanger IT2 will need to be
replaced during the next overhaul.
At BU Kemija Celje, we will modernise the blowing system of reactors for the production of copper
preparations and set up automated addition of sodium hydroxide.
We are not planning any investments in BU Kemija Mozirje, but we will prepare a project to install a
new line for white masterbatches and purchase some fixed assets.
BU Polimeri will replace an obsolete CNC lathe with a new one.
Investments will also take place at our Bukovžlak and Za Travnikom sites. At Bukovžlak, the design and
construction of drainage C under the high embankment barrier and the sealing curtain on the NE
barrier of the Bukovžlak Non-hazardous Waste Landfill (ONOB) will be carried out. At the Bukovžlak
high embankment barrier, it is planned to design and start construction of a drainage ditch with a
gauging point and a dewatering facility, and at the Za Travnikom high embankment barrier, to design,
obtain permits and possibly to start implementation of the rehabilitation of the eastern and western
flanks. Environmental provisions will be used for these purposes.
The Ministry of the Environment is planning to rehabilitate plot 115/1 of Teharje, where our gypsum
pipeline runs, in the coming year. In order to avoid subsequent restrictions on rehabilitation in the

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event of a leak, we need to relocate our gypsum pipeline at the same time as the rehabilitation of plot
115/1.
In line with plans, actual needs and financial possibilities, we will also develop and implement new
projects during the year, as well as procure replacement and new individual items of fixed assets.
Major investments for the purchase of replacement equipment and fixed assets will include:
• Renewal of at least one processing tower;
• Replacement of the first of two filter presses for pigment wringing;
• Renewal and upgrade of the sand filters in the Water Treatment Plant.
We also invest every year in measures to improve fire safety. We will also purchase some additional
equipment for quality control.
We plan financing from our own resources.
A more detailed overview of the investments foreseen is contained in the Investment, Fixed Assets
and Replacement Equipment Plan for 2023.

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Analysis of results and performance
Sales
Total sales in 2022 are 18% higher than the comparable period in 2021, with total sales or net sales
revenue reaching EUR 227.2 million. One of the highest monthly sales in 2022 was achieved in May,
when sales amounted to EUR 23.6 million, an all-time monthly record.
Total sales to foreign markets increased by 18% compared to the previous year. The increase in sales
to foreign markets is undoubtedly due to higher pigment selling prices. In absolute and relative terms,
the most significant increase in sales is to EU markets.
Table: Sales by market in 2021-2022, in EUR
Marker
2021 (in EUR)
2022 (in EUR)
ΔPY %
Slovenia
17,355,361
18,781,919
+8
EU
142,500,353
173,950,706
+22
Ex-YU
4,383,469
4,959,791
+13
Third countries
24,693,293
27,117,372
+10
Third countries – dollar markets
3,529,624
2,343,328
–34
Total
192,462,100
227,153,116
+18
Chart: Share of sales by market in 2022
Sales to the EU market are 22% higher than in the previous year. The outperformance was mainly
driven by higher pigment sales prices and volumes, as well as higher exchange prices for metals, i.e.
copper and zinc, which consequently impact the sales price of the product groups zinc alloys and wires
and copper fungicides. One of the key markets is Germany, where we generate 29.7% of our export
sales and 27.2% of our total sales. The importance of the German market has decreased slightly
compared to the previous year due to the objective maturity of the market.
Sales to the markets of the former Yugoslavia increased by 13%, due to higher value sales of pigment,
zinc products and copper fungicides.

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Domestic sales are up 8% compared to the same period in 2021. Sales growth was driven by sales
growth in all business units except BU Polimeri.
Sales to third country markets are up 4% overall compared to the same period of the previous year.
Again, the main contributor was the higher selling price of pigment. We continue to maintain minimum
control market shares in the US dollar markets, as larger volumes would be unsustainable due to the
specific conditions, which are certainly less favourable than in the European markets.
Chart: Sales value by market in 2020-2022, in EUR
The share of total exports in the Company's total sales in the year under examination was 91.7%, an
increase of 0.7 percent compared to the previous year. The increased share of exports relates to an
increase in value sales to the key markets of Germany, Italy, France and Turkey. The main share is
achieved through exports of titanium dioxide pigment.
The structure of sales by national market varies quarterly according to the conditions prevailing in each
market. Roughly speaking, the structure is determined by the profitability of the markets, the
marketing strategy, and the political-economic security and reliability of the markets.
Table: Sales by production programme in 2021-2022, in EUR
Production programme
2021 (in EUR)
2022 (in EUR)
ΔPY %
Titanium dioxide
156,788,783
187,495,664
+20
Zinc processing
6,364,355
8,240,209
+29
Varnishes, masters and printing inks
17,687,588
18,516,808
+5
Agro programme
7,990,692
8,399,825
+5
Other
3,630,682
4,500,610
+24
Total
192,462,100
227,153,116
+18
During the period under review, sales of the titanium dioxide pigment flagship programme reached
EUR 187.5 million. The EUR 30.7 million increase in value sales is due to higher average selling prices.
Pigment contract prices in Europe have been rising steeply until 2021, reaching a series of quarterly
records. The upward trend in pigment selling prices has moderated or reversed at the half year. There
is no doubt that consumption is moderating due to inflation in Europe and changing consumer

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sentiment. In industry, reduced purchasing interest is expected, also influenced by the uncertainty of
natural gas supply, which increases concerns about the European industry's operational performance.
Amongst others, some competitors have announced or already reduced pigment production in Europe,
mainly global producers with a portfolio of plants around the world that have leased energy products
at significantly lower prices in America or Asia. The price of energy is correlated with the price of the
ancillary raw materials needed to produce the pigment.
The zinc processing sales programme combines the product groups zinc wire, anodes and alloys. The
performance is 29% higher than in the comparable period of the previous year. The increase in sales is
mainly attributable to higher zinc exchange prices.
During the period under review, there was a 5% increase in sales of the varnishes and masters
programme on a comparable basis, mainly due to higher selling prices of masterbatches and powder
varnishes. This is the result of higher input prices.
Sales of the agro programme, which includes sales of copper fungicides, Pepelin, Copperas and
Humovit, increased by 5% compared to the comparable period in 2021. The increase is due to higher
sales prices of copper fungicides. These are higher on account of higher copper exchange prices and
an improved sales structure. In 2022, we continued to produce the highly marketable active ingredient
tribasic copper sulphate (TBCS). Sales of Humovit are at the level of the comparable period in 2021.
We are dependent on local and nearby market conditions for our soil sales as the product does not
bear the additional cost of transport to enter distant markets.
The "other" programme includes sales of thermoplastics, polymers, elastomers, aggressive media
transport systems (STAM), sulphuric acid, CEGIPS, merchandise, services and sales of discontinued
products and product groups. The value sales of this group are 24 % higher on a comparable basis. The
value sales of STAM are at a similar level. The value sales of sulphuric acid are 34 % higher. In the case
of the programmes of this group or category, it is also worth highlighting CEGIPS, which is 72% higher.
164.4 thousand tonnes of CEGIPS were sold, which is important in the context of the life extension of
the Za Travnikom facility.
Over the period under review, it can be seen that the relative proportions have changed again. The
share of BU Titanov dioksid is higher by 1.3 percent. In line with the higher value sales of metallurgical
products, BU Metalurgija's share is 0.3 percent higher. The other BUs show a decrease in their shares.
BU Polimeri's share declined comparatively, as business volumes coincided with investment activity in
the regional pharmaceutical and petrochemical industries. It is therefore essentially a contract-based,
fully customised production of technological systems, which is directly dependent on the investment
cycles of the industry in the region.
There are changes in the sales structure by business units. In the short term, the substantive changes
result in a smaller number of business units and, in the longer term, an increase in the relative
importance of the core programme, i.e. titanium dioxide.

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Operating result
In 2022, an operating result of EUR 53.2 million was achieved, 33% above the 2021 operating result of
EUR 40 million. Operating performance was therefore better than last year, but significantly above the
level of the business plan. This outperformance was driven by good volume sales and an increase in
the selling prices of the underlying product. The operating result including depreciation and
amortisation, or EBITDA, amounted to EUR 65.3 million, representing 29% of the sales achieved.
Compared to the previous year, EBITDA is 27% higher.
After accounting for the impact of financial income and expenses, a pre-tax result of EUR 52.7 million
is reported in 2022, with a profit of EUR 40 million in 2021. The pre-tax result is up 32% on the previous
year. A negative financing balance of EUR 460.1 thousand is achieved in 2022 (2021: negative financing
balance of EUR 20.1 thousand). This financing balance is the result of a negative exchange rate balance
of EUR 457.6 thousand, a negative balance of investment income, and interest expense of EUR 2.5
thousand. The negative financing balance comes from the forward purchase and sale of dollars. The
negative balance nevertheless represents an effective use of hedging instruments throughout the
financial year to manage the volatile movement of the USD/EUR currency pair in the procurement of
titanium-bearing ores.
The net result for the period amounts to EUR 43.4 million and is 31% higher than the result for 2021
(EUR 33.2 million). Taking into account the developments in the international economy on the titanium
dioxide pigment market and, in particular, the results of our competitors in the titanium dioxide
industry, we consider the result to be above average and above expectations. The net result comprises
the profit before tax and income tax of EUR 8.8 million (effective tax rate of 16.7%).
Shares – value and turnover
The share capital of Cinkarna Celje d.d., amounting to EUR 20,229,769.66, is divided into 8,079,770
ordinary freely transferable bulk shares. The shareholder structure is disclosed in the section General
Meeting/Capital structure.
The shares of Cinkarna Celje d.d. are listed on the standard quotation of the Ljubljana Stock Exchange
under the designation CICG. The single quotation price on the first day of trading, i.e. 6 March 1998,
was EUR 33.71 per share, or EUR 3.37 taking into account the share split in 2022.
The total number of shareholders as at the last day of 2022 was 2,321 and the total number of shares
in issue was 8,079,770, comprising 7,815,120 voting shares and 264,650 treasury shares.
The value of Cinkarna Celje d.d.'s share, listed on the Ljubljana Stock Exchange's first quotation (CICG),
fluctuated between EUR 22.4/share and EUR 32.0/share in 2022.
The market capitalisation of the Company on the last trading day of 2022 was EUR 185.8 million. The
market capitalisation of the Company on the last trading day of 2021 was EUR 209.3 million.

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Table: CICG share price evolution in 2022 by month (single month-end price) and in 2019-2021
Year
2019
2020
2021
2022
Month
12
12
12
1
2
3
4
5
6
7
8
9
10
11
12
CICG
price
in EUR
18.75
17.80
25.90
26.50
24.40
27.80
28.80
29.80
27.40
28.40
27.80
23.60
23.00
26.00
23.00
The average cumulative monthly turnover of Cinkarna Celje d.d.'s shares in 2022 was EUR 1.9 million,
58% higher than the average monthly turnover of EUR 1.2 million in 2021. The total annual turnover
was EUR 22.5 million (EUR 14.2 million in 2021). The Company has a liquidity maintenance agreement
in place for the shares.
Table: Share price and cumulative monthly turnover outliers in 2020-2022, in EUR
Year
2020
2021
2022
Highest
Lowest
Highest
Lowest
Highest
Lowest
Share price in EUR/share
20.30
12.50
25.90
17.40
32.00
22.40
Cumulative monthly turnover in
EUR 000
3,317.1
495.4
1,966.4
701.1
3,381.2
1,231.5
Dividends
On 15 June 2022, the General Meeting of Shareholders of the Company voted in favour of the counter-
proposal of the shareholder, the Association of Small Shareholders of Slovenia, to use the balance
sheet profit for 2021, which amounted to EUR 25.0 million. In accordance with the approved and voted
proposal/agreement, the major part of the balance sheet profit amounting to EUR 24.9 million was
paid out in the form of dividends. The dividend per share amounted to EUR 31.89 gross or EUR 3.19
after the share split, which is 52% higher than the dividend in 2021 and represents a dividend yield of
11%. The remainder, i.e. EUR 0.1 million, was carried forward as a profit carried forward.
The General Meeting of Shareholders granted the Company's Management Board the authority to
acquire treasury shares for a period of 12 months from and including 18 June 2022. The treasury shares
on the last day of 2021 comprised 26,465 shares or 264,650 shares after the split. No repurchases were
made in 2022.
The dividends paid and the P/E ratio with the corresponding calculation are shown in the Condensed
Business and Alternative Performance Measures section.
Expenditure and costs
The analysis of expenditure and costs below relates mainly to the costs of materials, raw materials,
and energy and labour. The most significant impact on the Company's performance is the trend in the
costs of materials, raw materials and energy, as the Company is capital intensive. Labour costs are
mainly determined by constructive dialogue between the social partners and business performance.
The Company did not incur any interest costs in 2022 due to the full deleveraging and cancellation of
financial debts before the end of 2014. The most important factor in the volume and dynamics of costs
is the situation in the global and European economy. Uncertainties related to the energy market and
supply chains are increasing. Prices of key commodities in the so-called "commodities" markets (non-
ferrous metals, steel, energy, basic chemicals) are on an upward trend. The gradual rise in energy prices
has been contained to the best of our ability, but further increases are inevitable. Price levels for
titanium-bearing raw materials are at higher levels.

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The combination of the above macroeconomic situation and the situation in the titanium dioxide
pigment industry has led to a closing of the upstream price cuts, with further closures expected in the
coming quarters. The upward pressure on labour costs has increased due to the situation in Slovenia
and the understandable rise in employee expectations, but the Company's remuneration policy has
enabled us to remain within our business performance plans.
The structure of consumption of raw materials, packaging and energy shows a deviation from 2021.
This is due to the different dynamics of change of the individual categories of direct production costs.
In relative terms, the most significant increase is in energy costs, which have risen significantly by 67%
due to energy risks. Similarly, the increasing bargaining power of suppliers is up by 2%. The dynamics
of raw material costs corresponds to the dynamics of production volumes. Packaging costs are lower
due to the focus on the B2B segment and the associated bulk packaging.
At the end of the period, raw materials accounted for the largest share of production costs (84.6%),
followed by energy (13.9%) and packaging (1.5%). Compared to the previous year, there has been a
marked change in the structure, with an increase of 2.3 percent in the share of energy.
In line with the increase in efficiency and profitability of the titanium dioxide industry and Cinkarna
Celje d.d., we implemented a motivating remuneration policy in 2022 and, within the realistic
possibilities, followed the dynamics of the business results, which exceeded both last year's and the
planned results. The starting points for the formulation of the remuneration policy were the
agreements and guidelines of the social partners at national and company level.
In 2022, we paid employees a holiday allowance of EUR 1,923.92 gross/employee in March. Due to the
excellent performance, we paid a Christmas bonus to all employees up to the average salary of EUR
2,024.03 as at the date of the decision, together with a bonus of EUR 890/employee.
The company-wide labour costs achieved are 2% higher in 2022 compared to 2021, and the labour
costs per employee are 8% higher in 2022 compared to 2021.
In 2022, the amount of depreciation charged is 8% higher than in the previous year, as a result of the
level of investment in 2021, which is below the level of 2018, when the EUR 22.6 million invested
significantly exceeded the amount of depreciation charged in that year. We plan to invest a
comparable amount in 2023.
In 2022, the Company did not incur any interest expense as it had no financial debt (the last time the
Company recorded interest expense was in 2014 for bank borrowings). Interest expense is therefore
not a factor in the Company's performance and the Company is no longer exposed to risk in the context
of potential changes in interest rates. The minimal negative balance of exchange rate differences and
other financial expenses of EUR 460,1 thousand still represents the effectiveness of the use of hedging
instruments to manage the volatile movement of the USD/EUR currency pair in the purchase of
titanium-bearing ores.
Otherwise, we performed above average during the period under review. We generated a net profit
of EUR 43.4 million. Corporate income tax for 2022 was levied at EUR 8.8 million.

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Table: Operating expenses in 2021-2022, in EUR and %
Operating expenses
2022
2021
Value in EUR
Share in %
Value in EUR
Share in %
Cost of materials and services
151,383,601
76
111,491,064
71
Labour costs
29,483,416
15
28,888,986
18
Depreciation and amortisation
12,150,684
6
11,281,415
7
Other expenses
5,265,971
3
5,497,719
3
Total operating expenses
198,283,672
100
157,159,184
100
Assets and resources
The source of financing of the achieved volume of operations in 2022 consisted mainly of own funds
accumulated in the ordinary course of business and, to a lesser extent, of corporate debt. The financing
of the additions and upgrades of production and operating equipment and buildings and of
investments in progress was carried out exclusively using own funds accumulated in the ordinary
course of business. In the past year, we have not used bank resources. We have paid particular
attention to the management of net current or short-term assets, thereby ensuring a reliable, secure
and stable cash position or liquidity at all times.
Table: Funding in 2021-2022, in EUR and %
Assets
2022
2021
Value in EUR
Share in %
Value in EUR
Share in %
Non-current assets
108,559,530
43
110,511,613
46
Current assets:
142,388,473
57
131,373,196
54
– Stocks
72,754,823
29
40,298,476
17
– Trade receivables
24,290,543
10
31,172,903
13
– Cash
45,210,098
18
59,746,594
25
– Other current assets
133,009
0
155,223
0
Total assets
250,948,003
100
241,884,809
100
The share of non-current (long-term) assets in total assets decreased by 2.4 percent to 43.3% in 2022
compared to the end of 2021. The largest category of non-current assets is tangible fixed assets
(95.9%). They decreased in value by EUR 1.8 million or 2% in 2022 for the difference between the
amount invested in tangible fixed assets and the actual depreciation charged. Long-term investments
increased by EUR 0.3 million in 2022 due to the revaluation to fair value and comprise shares and
interests in companies. Deferred tax assets decreased by 36% due to the reversal and utilisation of
provisions and due to the tax-recognised valuation allowance on receivables created in previous years.
Other non-current assets consist of emission allowances obtained free of charge from the State. Their
value as at 31 December 2022 is EUR 15 thousand higher than the value as at 31 December 2021 due
to the positive balance between the acquisition of the allowances for 2022 and their surrender to ARSO
for CO
2
emissions for 2021.
The share of current assets in total assets increased by 2.4 percent compared to the end of the
previous year to 56.7%. The most important categories in the structure of current assets in terms of
value are stocks (51%), cash and cash equivalents (32%), and trade receivables together with other
current assets (17%).
Stocks increased by 81% compared to the end of 2021, with a 68% increase in the value of material
stocks (including advances), a 32% increase in work-in-progress stocks and a 122% increase in the total

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value of the Company's finished goods and merchandise stocks (all compared to the end of 2021). The
main reason for the increase in finished goods stocks is the reduced volume sales of pigment in the
last quarter of 2022.
Current financial receivables have no balance as at 31 December 2022.
Current trade receivables comprise current trade receivables from buyers and current trade
receivables from others (mainly from the State for input VAT). Compared to the situation at the end of
2021, receivables have decreased by 22%. Trade receivables decreased by 24%, while other current
receivables increased by 9%. The maturity breakdown of trade receivables later in the report shows
that the age structure of receivables continues to be of good quality and secured with an external
institution or other form of collateral.
Cash (and cash equivalents) represent 32% of total current assets, with a 24% decrease in cash
compared to the previous year due to the dividend payment of EUR 24.9 million at the end of June
2022 and the repayment of strategic purchase commitments at the end of December 2022. The
remaining value of cash is mainly due to the excellent performance of the full year.
Other current assets comprise prepaid expenses accrued. The value decreased by 14%.
Table: Capital and liabilities in 2021-2022, in EUR and %
Capital and liabilities
2022
2021
Value in EUR
Share in %
Value in EUR
Share in %
Capital
209,010,148
83
190,165,790
79
Non-current liabilities
18,831,718
8
23,273,002
10
Current financial liabilities
59,392
0
197,503
0
Current operating liabilities
19,518,145
8
23,242,724
10
Other current liabilities
3,528,600
1
5,005,790
2
Total capital and liabilities
250,948,003
100
241,884,809
100
The value of capital in the structure of liabilities to sources of funds as at 31 December 2022 represents
83.3%, an increase of 4.7 percent compared to the end of 2021. The amount of capital has increased
by 10% compared to the situation at the end of 2021. The increase (EUR 18.8 million) relates to the
difference between the net profit in 2022 of EUR 43.4 million and the payment of dividends on 24
December 2022. As at 31 December 2022, the Company holds 264,650 treasury shares after the split
of 1:10 on 15 August 2022 (no purchases of treasury shares were made by the Company in 2022).
There were no other significant movements in capital.
In total capital, the share capital amounts to EUR 20,229,769.66 and, as at 15 August 2022, consists of
8,079,770 ordinary freely transferable bulk shares (of which 264,650 are treasury shares, subscribed
in the treasury share pool), after a split of 1:10. The book value per share as at 31 December 2022
amounts to EUR 25.9 (up 10.2% since the beginning of the year, when it stood at EUR 23.5).
Provisions and deferred income account for 7.5% of the liabilities to sources of funds. Provisions for
pensions and similar liabilities were made as at 1 January 2006 (severance and jubilee payments) and
are adjusted annually on the basis of actuarial calculations. Other provisions were established in the
course of the ownership process under the environmental provision. In recent years, the following
additional environmental provisions have been made: EUR 5 million in 2010 for the rehabilitation of
the Bukovžlak solid waste landfill and EUR 7 million and EUR 5 million in 2011 for the rehabilitation of
the Za Travnikom landfill and the destruction of low-level radioactive waste. At the end of 2017, the

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provisions were reviewed in detail, verified and only the provision for the elimination of old burden
risks of EUR 6.4 million was re-established. At the end of 2022, similarly to the end of 2021, the extent
of the provisions was reviewed and the provisions were re-established or eliminated as appropriate in
light of the actual market conditions and the reasons for their existence. The volume of environmental
provisions decreased by 21% or EUR 4 million in the period under review, due to the earmarked
increase and at the same time the earmarked coverage of the costs of the remediation projects
mentioned above, as well as the necessary release of provisions for which the underlying basis for their
creation no longer existed, which occurred in 2022. Non-current deferred income increased by 70%
(obtaining funds for the co-financing of the installation of solar power plants).
Financial and operating liabilities decreased by 19% compared to the end of the previous year due to
a 16% decrease in operating liabilities. Trade payables decreased by 20% due to repayments to
suppliers and a 1% decrease in other current liabilities due to taxes and contributions from payables
to employees. The liability for income tax for the 2022 financial year as at 31 December 2022 is 39%
lower than the balance at the end of 2021 due to prepayments made in 2022. All financial and
operating liabilities are current. The Company's gross gearing ratio is 16.7%, a decrease of 4.7%
compared to the balance as at 31 December 2021.
Current financial liabilities as at 31 December 2022 amount to EUR 59 thousand, compared to EUR
198 thousand at the end of 2021. The Company's gearing ratio is therefore 0.24‰ (0.82‰ at the end
of 2021).
Current trade payables decreased by 16% over the period. Current trade payables to suppliers
amounted to EUR 14.9 million at the end of 2022, down 20% compared to the end of 2021, due to
repayments to suppliers of strategic raw materials. Other payables increased by 1% (or by EUR 67
thousand), mainly consisting of EUR 2.6 million payables for net salaries and other net employment
benefits, EUR 2 million payables for contributions and taxes from and on remuneration, and payables
for VAT and to other institutions.
Other current liabilities decreased by 1% in the period under review, mainly consisting of accrued
liabilities for annual leave and other labour costs, accrued environmental contributions and taxes, and
VAT on advances made.

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Risk management and opportunities
The risk management process is a key process and the cornerstone of the Integrated Management
System (IMS). Risks are managed through regulations, performance targets or objectives, the
implementation of which is tracked through protocols.
The risk management system includes risk identification, risk assessment and classification, action,
monitoring and reporting. Monitoring and analysis of the external and internal environment provides
input for the identification of key risks and opportunities, which is crucial for our operational, tactical
and strategic planning in line with the sustainable development goals.
Identification procedure
The key factors in identifying risks are the uncertainty and significant negative financial consequences
that must be perceived by the risk owners in the business unit.
There are two ways to identify risks:
− Bottom-up recognition is the responsibility and right of all employees in the company. Anyone
who identifies a risk to the business in the course of his or her work must immediately inform
his or her supervisor, who in turn informs the risk owner, who then enters the risk into the risk
database for each risk group.
− Top-down identification is carried out by risk owners on the basis of information they may
receive from the Management Board at the time of any major business decision, project or
material change that may have the effect of altering an existing risk or creating a new one.
The sources for identifying the risks that have occurred and are recorded in the codebook are:
− own observations of risks in the performance of regular work tasks and assignments,
− records and reports on operations,
− statistics and incident investigation reports,
− findings of internal and external audit and inspection services, auditors or assessors,
− analyses of the economic, political, legislative and operational environment,
− brainstorming with staff or external participants,
− business process studies and
− other sources.
We group individual risks into the following categories:
III. Sales and procurement risks
IV. Production risks
V. Financial risks
VI. Spatial and environmental risks
VII. Human resources and organisational risks
VIII. Support process risks

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Risk assessment and classification procedure
For each of the identified risks, we determine what its negative consequences are. The assessment of
risks is carried out by defining the frequency and impact in terms of financial consequences, which are
made up of three factors:
− incurrence or increase of costs,
− loss or reduction of revenue,
− mitigation of financial consequences.
The frequency (probability) of occurrence of risks is based on an assessment of the frequency with
which each adverse event/risk has occurred in the past or is expected to occur in the future. The impact
(financial consequences) of each event is quantified in monetary units according to how the individual
risk affects the Company's results or the amount of damage it may cause.
The basis for calculating the financial implications is the annual revenue plan for the Company and for
the individual organisational units.
The qualitative score is calculated using the following formula:
Risk assessment = frequency or likelihood of occurrence * (incurrence or increase of costs + loss or
reduction of revenue – mitigation of financial consequences)
The assessed risks are classified on the basis of a graduated risk scale, which is defined in terms of
value at two levels:
• Corporate risks are risks that, if they materialise, have a significant impact on the Company as
a whole or even threaten its existence. Their management is the responsibility of the
management of the business units and departments, the Management Board and the
Supervisory Board.
• Operational risks are risks that may affect the performance of individual units, but do not
represent a significant risk to the business as a whole. They are part of day-to-day operations
and work processes. They are managed at the level of one or more organisational units.
Identification of the level of risk (potential impact) – corporate risks
Level
Percentage of revenue at Company level of the annual plan in the current year
1 – Low
> 2.5 % < 5 %
2 – Medium
> 5 in < 10 %
3 – High
> 10 %
Note: The definition of corporate risks at company level represents the sum of the individual
assessments for a given risk at the level of business units (BU).
Identification of the level of risk (potential impact) – operational risks
Level
Percentage of revenue at the level of the business unit of the annual plan in the
current year
1 – Low
< 1 %
2 – Medium
> 1 in < 5 %
3 – High
> 10 %

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The process of identifying, assessing and ranking risks is carried out on a regular basis at the end of
each quarter of the year and, on an exceptional basis, immediately prior to the preparation of the
Company's business plan, whenever a major business decision, project or material change occurs that
may have the potential to change an existing risk or create a new one.
Adoption procedure, implementation of measures
The risks identified and classified in the Risk Register are managed through performance targets (POICs
for the current year) and objectives.
Monitoring and reporting
Risk owners report results in writing and verbally at the Management Board's quarterly Broader Expert
Colleges.
Responsibilities for the risk management system
The Management Board is directly responsible for the risk management system and its effective
functioning. The Board defines the process, oversees it and takes decisions on strategic development,
investments, divestments, portfolio of business lines, etc. The risk management system is managed by
key areas and is the responsibility of the team leaders for each risk group. Risks at the corporate level
are reviewed quarterly by the Risk Committee, which is composed of all team leaders and a member
of the Management Board. The Supervisory Board monitors and is informed of the performance and
findings of the risk management and internal control system in accordance with the provisions of the
Companies Act (ZGD-1). The external audit verifies the establishment, maintenance and operation of
the risk management and internal control system in accordance with the Auditing Act.
The successful operation of a risk and opportunity management system requires the coordinated
action of all stakeholders in the system to ensure the successful integration of risk management into
the Company's strategic, business and operational processes.
We also communicate to external audiences about the risks of our business and how we manage them
in our quarterly and annual reports. The reports are published publicly on SEOnet and on the
Company's website www.cinkarna.si.

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Diagram: Responsibilities in the risk management system of Cinkarna Celje d.d.
Here are the responsibilities and accountabilities at each level:
• Supervisory Board / Audit Committee of the Supervisory Board:
− monitors the effectiveness and efficiency of the overall risk management system,
− supervises risk-taking,
− monitors exposure to particular types of risk,
− monitors the management of key corporate or business risks.
• Management Board:
− sets the strategy and objectives for risk management,
− defines and monitors the risk management process,
− defines and delineates responsibilities and accountabilities in the risk management process,
− defines different responses for each type of risk under certain conditions.
• Risk Management Committee:
− defines the methodology and improvements in the assessment and ranking of risks, with the
aim of ensuring uniform criteria across the Company,
− reviews and defines revenue percentages for determining risk scores at company level and for
organisational units,
− reviews and defines corporate risks at company level,
− reviews and validates the results of the assessment and ranking of mainly corporate risks,
− informs the Management Board on corporate risk management,
− monitors the results of external and internal audits, inspections, assessments and evaluations.
Management Board
Risk Management Committee
Risk management team
Risk owners/organisational
units
Accounting Department
All company employees
Internal Audit
Supervisory Board /
Audit Committee
External audit
Governance,
control
Overview,
control
Management
Identification,
responsibility
Notification
Reporting
Reporting
Reporting

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The Risk Management Committee is composed of the Head of the Risk Management Committee and
the team leaders for each risk group, i.e. the members. The Head and the members of the Committee
are appointed by a resolution of the Company's Management Board.
• Risk management team:
Risk management teams are formed for all the risk groups that the Company manages. Each risk group
has a designated team leader who is part of the wider risk management team and has the following
responsibilities:
− Defines risk designations and generic risk descriptions at company level within the risk group
for which it is responsible;
− Enters the identified and approved risks in a specific group into the risk codebook, which is the
basis for risk owners to then define the relevant specific data in their organisational units;
− Monitors and reviews the risks arising in the risk pool from the organisational units identified
and defined by them into individual groups;
− Coordinates and convenes meetings to identify, define and prioritise individual risks. He/she
may also convene the Risk Management Committee in the case of significant risks;
− Communicates with risk owners on identified risks and changes;
− The team leader ensures, through professional oversight, that risks are appropriately recorded,
classified and managed in his/her team and verifies the appropriateness of the assessment of
individual risks, if they have been identified by different organisational units;
− The risk team leader proposes corporate risks to be defined in the system. The Risk
Management Committee reviews the proposals, agrees on them and aligns the risk type;
− Reports quarterly results to the Risk Management Committee on all corporate risks for the
team's risk group.
• Risk owners:
− Identify risks in their organisational unit process area and communicate this to the team leader
for the specific risk group;
− Define specific risk profiles in their organisational units based on the overall risk identified;
− Are responsible for risk management in their organisational units (they are responsible for the
appropriateness of entries, assessment and management of identified risk);
− Report on the identified risks to the team leader for each risk group over a three-month period
through performance targets or objectives.
Risk owners are Directors and Heads of Departments, or their deputies in their absence. They may also
be team members of individual risk groups.
• Internal Audit Department:
− Audits the risk management process and reports to the Management Board and the
supervisory body on its effectiveness and efficiency;
− Audits the effectiveness and efficiency of internal controls in business processes, focusing on
the management of key risks;
− Assesses the adequacy of reporting on key risks;
− Plans audit reviews based on the applicable risk assessment;
− Communicates to the Management Board, the supervisory body and the responsible auditors
the findings on the management of key risks in the context of the internal audit engagements
performed, and, subject to limitations in accordance with the rules of the internal audit
profession, may advise on the establishment and implementation of a risk management
process.

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• Accounting Department:
− Provides the basic data for calculating revenue and cost shares at company level and by
organisational unit;
− The Head of the Accounting Department coordinates the definition of the revenue
percentages with the Risk Management Committee before the start of the planning process
(revenue percentages are defined for corporate and operational risks);
− The person responsible in the Accounting Department enters the relevant parameters and
values, which are the basis for the further calculation of the risk assessment.
• All company employees
Employees must be involved in identifying risks in their workplaces or in the Company and informing
their supervisors, who are obliged to take appropriate action.
Corporate risks identified in 2022
I. Sales and procurement risks
Risk name
General description at
company level
Risk management
Risk level
Energy sources
Price uncompetitiveness of our
products due to high energy
prices (natural gas and
electricity)
We conclude contracts, monitor trends
and carry out forward purchases of
energy products.
We negotiate PPAs - long-term power
purchase agreements.
We implement measures to increase
energy efficiency.
We systematically increase our own
electricity production from renewable
sources - solar power plants on buildings,
cogeneration of electricity from steam.
We are planning to install an EE battery
storage to balance consumption during
peak periods.
Low
Key buyers
Loss of market share and
revenue due to (price) non-
competitiveness with
customer expectations
compared to price-aggressive
competitors
We choose optimal marketing strategies,
appropriate sales channels, pre and post
sales service, competitive selling prices
and quality products, while increasing
productivity and reducing production
costs. We are also increasing our
customer portfolio in so-called spot
markets.
Low
Work items
Loss of revenue due to
unforeseen extensions of
delivery times throughout the
supply chain
We place orders on time, make supplier
reservations, look for alternative
suppliers and alternative testing
procedures.
We ensure timely planning of raw
material requirements and ordering,
adherence to the experience time
reserve and, where necessary, increase
Low

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I. Sales and procurement risks
Risk name
General description at
company level
Risk management
Risk level
minimum stock levels. We will develop a
"business case" and a "check list" for all
strategic raw materials.
Work items
Loss of production due to
failure to supply work items
from monopoly suppliers
We pursue the objective of adequate
protection by contract. In critical cases,
we provide larger stocks. We carry out
thorough market research on raw
materials and potential substitutes and
act on our findings in a timely manner.
We undertake accelerated procurement
and negotiation activities with existing
suppliers to secure the planned
quantities of PFA material. We are
expanding our supplier base with new
suppliers.
We are looking for alternatives to PFA.
We follow the announcements of
alternative technologies for the
processing of titanium bearing ores.
We are examining the feasibility and
advisability of introducing technological
changes to enable the production of
titanium dioxide from ilmenite alone.
We seek, test and introduce new sources
of raw materials for production.
Low
Legislative
compliance
Loss of revenue due to
proposed changes in
legislation for food contact
materials (packaging)
Through the supply chain, we obtain
information from customers on the
intended use of the product and the
requirement to meet the standard.
We carry out testing and analysis of
titanium migration from masterbatches
into model solutions.
We are looking for opportunities to offset
potential lost sales for incorporation in
food contact products with sales for
other applications (e.g. agro films,
automotive).
As a long term measure, we are looking at
the possibility of manufacturing the
product from suitable raw materials that
allow the obtaining of a
standard/certification (FDA).
Low

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I. Sales and procurement risks
Risk name
General description at
company level
Risk management
Risk level
Legislative
compliance
Revenue loss due to new
chemical sustainability
strategy
Within the Titanium Dioxide
Manufacturers Association (TDMA), we
follow the requirements of the new
legislation with a working group and
initiate the necessary/possible actions
both at the EU level and individually
within the Company.
Within the TDIC consortium, we are in the
process of updating the REACH dossiers
in line with the requirements of the
European Chemicals Agency (ECHA). To
this end, we are also carrying out a broad
scientific programme within TDMA,
which includes studies on the potential
impact of nano and pigmented forms of
titanium dioxide on human health.
Low
II. Production risks
Risk name
General description at
company level
Risk management
Risk level
Storage and
production
capacity
Shortfall in volumes due to
under-utilisation of production
capacity
We are taking measures to increase the
efficiency and availability of facilities.
We organise multi-shift working.
We are increasing our search for missing
staff.
We are adapting storage capacity
(additional silos and tanks) and logistics to
production needs.
Medium

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III. Financial risks
Risk name
General description at
company level
Risk management
Risk level
Credit risk
(payments by
buyers)
Loss of revenue due to non-
payment by buyers whose
receivables are not secured,
which represents about 2% of
receivables.
The Company applies internal credit
control for each individual buyer, who is
assigned an individual credit limit based
on payment discipline, credit rating and
good standing with the Company. The
credit risk monitoring and management
process was further enhanced in mid-2021
with the advent of receivables insurance
with an external institution where credit
limits are set, monitored and changed on
a daily basis.
In addition to the regular monitoring of
the credit limit for each buyer, the
payment discipline of the buyer and the
publication on Ajpes of proceedings under
the Act on Financial Management,
Insolvency and Compulsory Winding-up
Proceedings (ZFPPIPP) are monitored on a
daily basis.
Also, as the receivable becomes due, the
buyer is reminded of the due date of the
receivable by a reminder, firstly by
telephone and then in writing, and default
interest is charged from the due date until
the date of payment.
Updated information is obtained on a
regular basis for more accurate cash flow
planning.
Detailed, well thought out and accurate
cash flow.
Low
Liquidity risk
(payments by
buyers)
Loss of payments within
agreed deadlines due to
customer insolvency or
indiscipline, which may cause
liquidity problems for the
Company
Traditional payment discipline of a
company with no bank debts and stable
cash flows. The Company's business is
traditionally conservative with high cash
flow. Liquidity management comprises,
among other things, planning expected
cash commitments and covering them on
a daily, weekly, monthly and annual basis,
ongoing monitoring of the solvency of
buyers and regular collection of overdue
receivables.
Updated information is obtained on a
regular basis for more accurate cash flow
planning, which is elaborate, deliberate
and precise.
Low

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III. Financial risks
Risk name
General description at
company level
Risk management
Risk level
We have a detailed, well thought out and
accurately designed cash flow.
Currency risk
Loss of revenue and higher
costs due to the euro/dollar
exchange rate on the purchase
of materials and raw materials
in US dollars (titanium-bearing
raw materials, partly copper
compounds)
We continuously monitor the movements
and forecasts regarding the dynamics of
the EUR/USD currency pair. Basically, we
limit the short-term risk of adverse
changes in the dollar exchange rate
through the standardised and consistent
use of financial instruments (dollar
futures).
We regularly obtain more accurate data
for forward purchases of foreign
exchange.
Low
IV. Spatial and environmental risks
Risk name
General description at
company level
Risk management
Risk
level
Climate risks
Occurrence of acute or chronic
physical risks caused by
climate change (drought, heat
waves, storms, etc.)
For process water, we are increasing the use
of water from internal recycling, thereby
reducing the use of water from natural
sources such as the Hudinja River and the Za
Travnikom spring. For more information,
see the Integrated Water Management
Project section.
We are implementing a project to supply
production with an alternative source of
process water, namely to test the feasibility
of reusing waste water from the Celje
Central Wastewater Treatment Plant as a
source of process water.
We maintain facilities, address deficiencies,
identify and eliminate potential hazards by
upgrading fire safety and other safety
measures, maintaining existing flood
protection measures, inspecting the
condition of installations and optimising
processes.
High
Security
Negative impact on the
Company's business due to a
natural disaster (such as an
earthquake or major flood,
lightning strike, sleet, etc.)
We carry out activities in accordance with
the preventive actions set out in the
Register of Potential Hazards to the
Environment and Employees (Rules, OP,
compliance with storage instructions in the
flooded part of the site, ongoing cleaning of
shafts and maintenance of facilities, ND,
measurements, preventive and periodic
inspections, etc.).
Medium

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IV. Spatial and environmental risks
Risk name
General description at
company level
Risk management
Risk
level
When designing new buildings, we take into
account earthquake protection standards
and regulations. Existing ones are inspected
and maintained.
The Company is flood-proofed with a wall to
prevent water ingress in the event of
flooding. We have pump stations in place to
pump out any excess water.
We regularly inspect and maintain lightning
conductors and earthing systems.
Security
Negative impact on the
Company's operations due to
an industrial accident (fire,
explosion, spillage, etc.)
Risk is managed by systematically
evaluating the impact on the environment
and employees, periodic fire risk
assessments and by organising jobs
according to risk assessment.
In the area of environmental impact
reduction, we have systematically
implemented European environmental
standards by applying the principles of the
"Responsible Care Programme" and
harmonising our operations with the
requirements of the IED and the SEVESO
Directive.
We carry out internal assessments of the
adequacy of the implemented measures
required by the SEVESO permit and remedy
the identified shortcomings.
We update our Environmental Risk
Reduction Plan (ERRP) in light of changes.
We carry out our processes in accordance
with BAT (Best Available Techniques).
With regard to fire safety, we have our own
fire brigade and the Company is adequately
fire-protected.
In the area of accidents at work, we have a
professional service organised to monitor
compliance with health and safety rules and
measures. We provide regular training and
education for our employees. The Company
is insured against liability for damages.
We conclude written agreements with
external contractors and train them. We
have engaged a permanent Health and
Safety Coordinator. We have introduced
work instructions for carrying out
maintenance operations in terms of fire
Low

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IV. Spatial and environmental risks
Risk name
General description at
company level
Risk management
Risk
level
prevention, accident prevention and
improving the cleanliness of the working
environment.
Since 2009, we have ISO 14001
environmental management and ISO 45001
health and safety management systems in
place, certified and monitored by an
accredited institution.
Old burdens
Removing old environmental
burdens
The Bukovžlak Non-hazardous Waste
Disposal Site (ONOB) and the barrier bodies,
with their specific materials, are old
burdens. We have also created an
environmental provision for them and are
carrying out rehabilitation activities.
Technical observation and monitoring is
regularly carried out in the area of the high
embankment barriers (Bukovžlak and Za
Travnikom).
Based on the results of the monitoring,
systematic and long-term maintenance
measures are implemented to ensure the
stability of the barrier bodies.
Low
Legislative
compliance
Loss of production and
increase in costs due to non-
compliance with spatial
planning acts
We are in the process of confirming
amendments to the ZN documentation for
the red gypsum fill site at the Za Travnik
waste disposal facility.
We have submitted an amendment petition
to all three municipalities concerned. The
terms and conditions for the signing of the
contract between the municipalities are
being coordinated.
High
Legislative
compliance
Imposition of penalties in the
event of non-compliance with
the requirements of the Soil
Contamination Assessment
We are implementing the measures set out
in the findings of the Report on the Review
of Technical Measures to Prevent
Contamination of Soil and Groundwater.
We need to ensure that catch basins,
platforms, storage soils, drains, and
transport routes are fully sealed to prevent
contamination of soil and groundwater with
the hazardous substances concerned.
Low
Loss of reputation
Loss of reputation of the
Company due to various
factors (inadequate
communication, negative
environmental impacts, etc.)
The Company has processes in place by
department and designated individuals
responsible for investor relations,
environmental prevention, health and
safety, marketing, product sustainability
and recruitment.
We collect and consider stakeholder
feedback and address it in our enterprise
Low

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IV. Spatial and environmental risks
Risk name
General description at
company level
Risk management
Risk
level
risk management process. We behave in a
socially responsible way. We are developing
an ESG strategy.
V. Human resources and organisational risks
Risk name
General description at
company level
Risk management
Risk level
Competence and
availability of staff
Loss of production and
revenue due to incomplete
succession policies and
inadequate staff competences
We have a recruitment system in place -
each post has a job training programme and
a mentor.
As part of the 2023 performance targets, we
are establishing a system to inventory all
specific and generic skills in the Company
for all business units/services, a renewed
onboarding system for new hires, and a
verification of existing skills for employees
with a simultaneous revision of the
competency model.
Based on the revised competencies by job,
employees will be trained in areas with
competency gaps.
The training plan includes a number of
additional external training courses for
employees in the areas of planning, lean
production and IT.
We ensure that the active status of existing
approved engineers is maintained.
We have inventoried the key positions in
the Company, identified possible
successors, defined the time until the
necessary replacement and the additional
competences required.
For the most promising candidates, we run
a leadership development programme, the
Leadership Academy.
Low

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V. Human resources and organisational risks
Risk name
General description at
company level
Risk management
Risk level
Competence and
availability of staff
Loss of production and
revenue due to staff shortages,
untimely replacements and
inadequate organisation of
work
We strive to identify staffing and
recruitment needs in a timely manner, with
the aim of ensuring an appropriate
education, skills and age structure.
We continuously implement organisational
change and adapt agilely to new
circumstances.
In addition to traditional recruitment
methods, we use innovative recruitment
solutions via social networks to find new
employees.
We have staff scholarships available. We
have deepened our cooperation with
secondary schools. We provide students
with compulsory internships and student
work. We give students the opportunity to
work on their bachelor's, master's and
doctoral theses in the Company.
Low
Legislative
compliance
Imposing penalties on the
Company and the persons
responsible and compensation
for breaches of labour law
We regularly monitor changes in legislation
and implement them in our system.
We organise meetings with business units,
keep each other informed and take action
to correct any non-compliance.
We maintain an open dialogue with our
social partners.
Low
Corruption, theft,
fraud
Potential loss of credibility and
damage to the business
In making business decisions and in all
actions on behalf of the Company,
employees must consider the best interests
of the Company before their own interests
or those of third parties, subject to
competing only fairly and honestly.
We have a system in place to prevent
corruption in procurement.
The appropriate and expected conduct of
employees is set out in the Code of Ethics
and Conduct. A mechanism is in place to
disclose or report misconduct.
Low

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VI. Support process risks
Risk name
General description at
company level
Risk management
Risk level
Digitalisation
Loss of production and
competent workforce due to
slow digitalisation of control
and management processes
The implementation targets cover the
implementation of a new maintenance
information system and the introduction
of a predictive maintenance system.
We are continuously updating, upgrading
and integrating existing IT systems.
Low
Security
Outage due to failure of the
server system for the
management system
We are continuously upgrading critical
infrastructure.
Low
We also highlight and explain the following risks that the Company faces:
• Risks of cyber attacks
In response to the increased risk of cyber attacks, we have upgraded existing measures and put
in place a number of new measures to ensure cyber security. We are focusing on raising
awareness of information security among our employees (phishing test, dedicated training, etc.).
In 2022, we adopted an internal document on Information Security, which includes the following
key points to increase security:
− MFA – MFA On for all employees for access outside Cinkarna was implemented as part of
Microsoft's MFA On for All Users campaign, which increases the security of systems based
on Microsoft Cloud solutions;
− The upgrade of workstations to Windows 10 and Office 365 was completed in 2022, due
to the delay caused by the COVID-19 pandemic;
− Check Point Harmony Endpoint Protection must be installed on all workstations. The
measure is under implementation. In a phishing attack simulation we carried out in
December 2021, the protection proved its proactivity and level of protection, as it did not
let any malicious messages through from the start. In order to actually run the test on
users, we had to temporarily disable the system with a security exception, which is a
testament to its quality and reliability;
− We piloted CyberVision to monitor the performance of an industrial network. This gave us
a more detailed insight and guidance for improvements in the area of network
cybersecurity;
− We have implemented the Cisco ISE security mechanism, which will protect the internal
network of Cinkarna Celje against intrusions by external actors by connecting
unauthorised devices to our network.
In 2022, we did not record any hacking or attempted cyber attacks.
• Russia's invasion of Ukraine
Cinkarna Celje's exposure to the Ukrainian markets is insignificant as the Company has no sales to
Ukraine. However, indirect exposure is not negligible, as Ukraine is an important supplier of ores
to a number of titanium dioxide producers (Cinkarna Celje does not have any supplies from
Ukraine). A war situation may temporarily prevent or even stop the supply of ores, forcing their

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customers to find an alternative supplier, which may trigger an increase in the price of titanium-
bearing ores and increase the purchase price of Cinkarna Celje's main strategic raw material.
• Risks related to energy sources
Another important factor accounting for a significant share of Cinkarna Celje's costs is energy,
which means that the Company is more exposed to energy prices. Developments on the Russian
market could lead to an increase in the already increased prices of energy products or to the
extreme of interrupting the supply of the energy product natural gas, which would seriously
jeopardise the production and operations of Cinkarna Celje. In order to secure the supply of
electricity and natural gas for the coming years, we have concluded forward contracts with energy
suppliers for the bulk supply of energy products. The Company balances the purchases and sales
of long-term forward products of banded electricity on the German (EEX) or Hungarian (Hudex)
OTC market and the remaining balance of the purchases/sales difference (additional or excess
quantities) of electricity on the daily market (BSP), which is accounted for each hour of the day.
The Company dynamically adjusts its purchases/sales according to the expected electricity
consumption during the year by buying/selling long-term forward products (annual, quarterly,
monthly). The required electricity volumes are adjusted due to the active construction of its own
solar power plants (PS2 connection), the rationalisation of electricity use and the saving of
electricity consumption, which is also a policy of the European Commission and the Republic of
Slovenia.

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Integrated management system
An integral part of the management of Cinkarna Celje d.d. is an integrated management system
covering the basic elements of management and operations for all the Company's activities, in
accordance with the requirements of ISO 9001 – Quality Management System, ISO 14001 –
Environmental Management System, ISO 45001 – Occupational Health and Safety Management
System and, for the Mozirje site, the EMAS regulation. The compliance of the system's operation with
the requirements of the standards is verified on an annual basis by the certification body SIQ (Slovenian
Institute of Quality and Metrology). One non-compliance was identified and corrected in the year 2022.
Recommendations for improvement were made and followed. In accordance with the requirements
of the EMAS Directive, an environmental statement was drawn up for the business unit Kemija Mozirje.
Internal audits
According to the annual internal audit plan, eight audit areas were planned for 2022 (BU TiO
2
, BU
Metalurgija, BU Kemija Mozirje, BU Vzdrževanje in energetika, BU Marketing - Sales, BU Marketing -
Warehouse/Transport, Occupational Health and Safety, IT Department), as well as preliminary audits
(covering 12 organisational units). 24 auditors participated in both internal and preliminary audits. The
internal audits were carried out in the following areas. The internal audits checked compliance with
the requirements of the standards and legislation, and in the case of Kemija Mozirje, with the EMAS
Regulation. The auditors identified 12 non-conformities and made 44 recommendations, totalling 56
findings. The managers of the audited areas did not follow 12 recommendations. The overall
proportion of recommendations not followed amounts to one fifth or 21% of the total findings. For
each recommendation not followed, a detailed justification was provided by each business unit or
organisational unit. The implementation rate of the actions reviewed was 16% by the end of 2022.
As part of a preliminary audit, the implementation of outstanding actions from the 2021 internal audits
and the SIQ audit was reviewed, as well as the implementation of SIQ recommendations in 2022. By
the end of 2022, 80 outstanding non-conformities/recommendations from previous audits had been
reviewed. 45 non-conformities/recommendations have been implemented and 35 are under
implementation. The implementation rate is 56%.
A review of outstanding actions (first time or repeated) was carried out in February 2023 and the
annual audit report will be completed before the annual management review.