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Kemična industrija Celje, d. d.
Kidričeva 26, SI-3001 Celje, Slovenia
Annual Report
of Cinkarna Celje, d. d.
for 2024
April 2025
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Table of Contents
1. Analysis of the development and performance of the Company's operations and position ......... 3
1.1 Concise overview of performance and alternative performance measures .............................................. 3
1.2 Letter from the Management Board .................................................................................................. 4
1.3 Report of the Supervisory Board ...................................................................................................... 6
1.4 Internal audit report ....................................................................................................................... 9
1.5 Highlighted events ....................................................................................................................... 10
1.6 Presentation of the Company ......................................................................................................... 11
1.6.1 Organisational structure ........................................................................................................... 11
2. Corporate governance .............................................................................................................. 12
2.1 Corporate governance statement ................................................................................................... 12
2.2 Risk management ........................................................................................................................ 15
2.3 Functioning of the General Meeting and shareholders' rights .............................................................. 22
3. Strategic orientations and future development ........................................................................ 22
3.1 Strategic objectives and orientations .............................................................................................. 22
3.2 Plans for 2025 ............................................................................................................................. 23
3.3 Investments made and planned ..................................................................................................... 24
3.3.1 Investments made .................................................................................................................. 24
3.3.2 Investments planned ............................................................................................................... 25
3.4 Research and development ............................................................................................................ 26
4. Operations ............................................................................................................................... 27
4.1 Sales analysis .............................................................................................................................. 27
4.2 Operating result ........................................................................................................................... 29
4.3 Expenses and costs ...................................................................................................................... 30
4.4 Assets and resources .................................................................................................................... 30
4.5 Shares and dividends .................................................................................................................... 33
5. Sustainability statement .......................................................................................................... 36
5.1 ESRS 2 General disclosures ........................................................................................................... 36
5.1.1 Basis for preparation ............................................................................................................... 36
5.1.2 [GOV] Governance .................................................................................................................. 40
5.1.3 [SBM] Strategy ....................................................................................................................... 49
5.1.4 [IRO] Impact, risk and opportunity management ........................................................................ 68
5.2 [E] Environmental information ....................................................................................................... 74
5.2.1 Report on environmentally sustainable economic activities and investments – ESRS 2 .................. 74
5.3 [E-1] Climate change .................................................................................................................... 85
5.3.1 [E2] Pollution ........................................................................................................................ 114
5.3.2 [E3] Water resources ............................................................................................................. 128
5.3.3 [E5] Resource use and circular economy .................................................................................. 132
5.4 [S] Social information ................................................................................................................. 137
5.4.1 [S1] Own workforce ............................................................................................................... 137
5.4.2 [S3] Affected communities ..................................................................................................... 156
5.5. [G1] Business conduct ................................................................................................................ 165
6 Financial report .......................................................................................................................171
6.1 Financial statements ................................................................................................................... 171
6.1.1 Statement of financial position of the Company ......................................................................... 171
6.1.2 Income statement for the period from 1 January to 31 December ............................................... 173
6.1.3 Statement of other comprehensive income for the period from 1 January to 31 December ............. 174
6.1.4 Statement of changes in equity and determination of distributable profit ...................................... 175
6.1.5 Cash flow statement .............................................................................................................. 176
6.1.6 Notes to the financial statements ............................................................................................ 177
6.1.7 Significant events after the end of the financial period ............................................................... 235
6.1.8 Statement by members of the management and persons responsible for drawing up the annual report
236
6.1.9 Auditors opinion .................................................................................................................... 237
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1. Analysis of the development and performance of the
Company's operations and position
1.1 Concise overview of performance and alternative performance
measures
Cinkarna Celje, d. d., also uses Alternative Performance Measures (APMs) as defined by ESMA to
show the past performance of the company. The selected performance measures reveal the
performance and efficiency of the Company's business in the context of the cyclical nature of the
pigment industry.
OPERATIONS (in EUR 000)
2024
2023
2022
Turnover
200,285
176,464
227,153
Operating profit (EBIT)
1
26,664
12,723
53,176
Operating profit + depreciation and amortisation (EBITDA)
2
39,565
25,078
65,326
Net operating result
23,087
12,653
43,396
Non-current assets (end of period)
116,964
114,523
108,560
Current assets (end of period)
154,391
145,393
142,388
Equity (end of period)
211,036
221,230
209,010
Non-current liabilities (end of period)
18,925
18,844
18,832
Current liabilities (end of period)
41,393
19,841
23,106
Investments
14,302
19,825
10,547
INDICATORS
EBIT as a percentage of turnover
13.31
7.21
23.41
EBITDA as a percentage of turnover
19.75
14.21
28.76
Net profit as a percentage of turnover (ROS)
11.53
7.17
19.11
Return on equity (ROE)
3
v %
10.68
5.88
21.74
Return on assets (ROA)
4
v %
8.69
4.95
17.61
Value added per employee
5
107,471
80,305
131,431
NUMBER OF EMPLOYEES
End of year/period
718
742
775
Average end of year/period
725
754
776
SHARE INFORMATION *
Total number of shares
8,079,770
8,079,770
8,079,770
Number of own shares
298,384
264,650
264,650
Number of shareholders
2,871
2,651
2,321
Net earnings per share in EUR
6
2.86
1.57
5.37
Dividend yield
7
17 %
0 %
10 %
Gross dividend per share in EUR
4.10
0
9
3.19
Share price at end of period in EUR
27.70
20.50
23.00
Book value per share in EUR
8
26.12
27.38
25.87
Market capitalisation in EUR 000 (end of period)
223.809,63
165.635,29
185.834,71
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.
6
Net profit/average number of shares in issue.
7
Amount of dividend/share value (at the date of the General Meeting resolution).
8
Capital at end of period/total number of shares in issue.
9
In 2023, no dividend payments were made due to the energy aid granted to the company in accordance with ZPGOPEK.

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1.2 Letter from the Management Board
Cinkarna Celje, d. d., a modern and forward-looking chemical company, has entered its 150th year
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 the European industry and the dynamism of the pigment industry.
Sales increased by 13% in 2024, mainly driven by higher volumes sold for titanium dioxide pigment.
Demand improved in the second quarter, mainly due to the announcement of the introduction of
temporary anti-dumping measures, which encouraged European customers to review their sourcing
strategies. The temporary measures, which had been in place since the middle of last year, were
replaced by permanent ones at the beginning of this year. These differ in methodology, as the tariffs
are now set as absolute amounts instead of relative (% of the import price). In addition, the type of
pigment used in printing inks has been excluded from the measures. The impact of these changes
on the market situation will become more apparent in the coming quarters.
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 is an indispensable raw material in the modern world, and we are
committed to further developing and continuously improving the quality of titanium dioxide pigment
and exploring its use in sustainable applications.
The results achieved are exceeding the forecasts for the period. As a relatively small pigment
producer, we face market conditions and changes as a typical follower, but of course we try to make
the most of the market's potential, both in terms of level and time dynamics, within the given
framework.
We are committed to a long-term business strategy based primarily on an active marketing approach
to find and develop the most profitable customers and markets, to increase market share in the
highest quality markets, and to build long-term partnerships with key customers.
Sentiment indicators point to weak economic activity in the euro area, having declined in the fourth
quarter of 2024. The German institutions do not expect a significant recovery of the German economy
in 2025. Changes in the economic outlook will continue to depend strongly on inflation trends, the
labour market and the geopolitical situation.
The macroeconomic situation, in the context of our markets, especially the EU, and of our carrier
products, means that we are facing weak demand. Despite attempts by some producers to raise
selling prices, buyer resistance remains strong as the market remains well supplied. In key sectors
such as construction, decorative coatings and automotive, no recovery is expected for the time being
and uncertainty remains due to macroeconomic and geopolitical risks. In parallel, the impact of
certain exemptions in anti-dumping on demand for other pigment types will become clearer in the
coming quarters.
Net profit reached EUR 23.1 million, 82% higher than the EUR 12.7 million achieved in 2023.
Operating profit plus depreciation and amortisation, or EBITDA, reached EUR 39.6 million, accounting
for 19.8% of sales. EBITDA is 58% higher compared to the previous year.
In the area of employee relations and human resources management, we are focusing on optimising
the organisational structure, with the aim of ensuring the smooth operation of the Company and, as
a result, the conditions for maximum safety and health for our employees. We follow the principle of
a positive and motivating remuneration policy and ensure an appropriate level of employee
satisfaction and motivation. At the same time, we are introducing IT support to develop competences

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and improve the organisational climate. At the end of the year, we presented a project to the social
partners to renew the competency and pay model. The aim of the latter is a modern system that will
be co-designed by employees and will provide the basis for the Company's future growth.
In 2024, we allocated EUR 14.3 million for investments, purchase of fixed assets and replacement
equipment. We are investing in programmes that show growth potential. Our investments in
production are primarily aimed at reducing operating costs, ensuring profitable volumes of volume
production, achieving higher quality, regulatory compliance, and energy sustainability.
Our development activity follows a five-year strategy. Development activities were carried out in
response to perceived opportunities in areas of our expertise, trends and customer expectations. We
have a number of interlinked projects underway to comprehensively manage spatial and
environmental risks. The most important of these are the alternative water supply project, the
harmonisation of zoning acts at the Za Travnikom red gypsum filling plant, the remediation of the
Bukovžlak Non-hazardous Waste Disposal Site (ONOB) and ensuring the stability of barrier bodies.
All our activities are planned and implemented in line with the principles of sustainable development
and the circular economy. In the context of ensuring the sustainable development of titanium dioxide
production, we continued with our multi-year development project on integrated water management
and waste reduction. We also set up and implemented new activities in the areas of carbon footprint
reduction, use of renewable energy sources and re-use of materials. At the end of the year, we
adopted a sustainability strategy.
The following sections of the report provide more detailed information by business area, as well as
an overview of the Company's financial position and performance.
Management Board of Cinkarna Celje, d. d.

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1.3 Report of the Supervisory Board
In 2024, the Supervisory Board met and took decisions at 10 meetings, of which 5 were ordinary, 3
extraordinary and 2 correspondence meetings. 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 diligently fulfilled and exercised our powers,
duties and responsibilities. We considered the materials submitted, the presentations made, the
specific clarifications and explanations provided, and organised and conducted interviews with
individual external experts. We 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 acted diligently in its work, in accordance with the law and in
accordance with the best conscience and knowledge of the individual, thereby adequately
safeguarding the interests of the Company and its shareholders.
The Supervisory Board devoted time and attention to reviewing current operations, investments,
business plans and regular internal audit activities. The Management Board briefed the Supervisory
Board members in detail on the risk of shortage of process water and possible solutions as well as
all other significant risks faced by the company. Attention was also paid to the sustainability strategy.
At the end of 2024, the Supervisory Board was composed of the following members: the President
Tomaž Berločnik and the members Melita Malgaj, Boštjan Furlan, Dubravka Derossi Uršič, Aleš
Stevanovič and Jože Koštomaj, the latter appointed by the Works Council. The new Supervisory
Board replaced the previous Supervisory Board, in which Luka Gaberščik and Mario Gobbo completed
their term of office, Mitja Svoljšak resigned and David Kastelic was recalled by the General Meeting.
In 2023, the previous composition of the Supervisory Board was involved in the preparation and
adoption of the development strategy until 2028. The key focus of this strategy is to refocus the
Company on the core business of titanium dioxide and to change the sales portfolio of this core
product in the direction of increasing quality, optical performance and product development for more
demanding customer applications. Since the mid-year change of half of the Board, the Board has
provided an overview of the implementation of the current strategy and the status of each activity
in the implementation of the strategy.
In November 2024, we discussed and adopted our business plan for 2025, based on relatively
pessimistic macroeconomic forecasts and with traditional conservatism. The sales plan amounts to
more than EUR 206.3 million and the planned net profit to EUR 15.3 million. The planned drop in the
latter is mainly due to market pressures towards lower average selling prices. The Supervisory Board
considered that the plan is appropriately formulated and that it adequately reflects the situation in
the business environment as well as the competitive situation and the Company's potential for
generating results.
The focus will therefore continue to be on improving or raising the competitive position, increasing
market shares and increasing the physical volume of business. In parallel, the possibility of further
diversification of the product portfolio will be explored.
The Supervisory Board reviewed a comparative analysis of Cinkarna Celje, d. d., and its competitors
during its sessions.
Extensive training for supervisors was also provided at the end of the year, including presentations
on the areas covered by individual directors and managers, as well as in-depth training on titanium
dioxide technology and the industry.
In line with ESRB and CSRD requirements and the growing expectations for sustainability and
stakeholder impact management, the Management Board presented the Sustainability Strategy until
2030, which was approved by the Supervisory Board.

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With all members of the Management Board reaching the end of their term of office in 2025, the
Supervisory Board implemented the appropriate procedures and took the necessary measures to
ensure the smooth and stable continuity of the management of the Company and to enable it to
continue to operate efficiently in the future.
As a result of protectionist measures, the Company actively pursued new opportunities in industries
and markets, with investments totalling EUR 14.3 million, mainly in the production of titanium dioxide
pigment to improve product quality, ensure the planned volume production and reduce
environmental impact. The Company traditionally follows a conservative financial management
strategy, operating without long-term borrowings or external financial resources, and is therefore
financially stable and sound with growth potential.
The Supervisory Board considers that the actions taken by the Management Board were also
successful in implementing the investment plans and targeted development work. The efficient
operation, sustainability and stability of the system provide an answer to its long-term prospects.
The main lines of business and development of the Company, as set out in the medium-term strategy,
were implemented to a high standard at the most important points.
In the opinion of the Supervisory Board, the present Annual Report, which contains the statutory
financial statements, disclosures, explanatory notes and the management report and Sustainability
statement, contains the most important information and indicators as well as adequate explanations
of individual events and facts, and therefore, on the proposal of the Audit Committee of the
Supervisory Board, the Supervisory Board approves the Annual Report of Cinkarna Celje, d. d. for
2024.
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.
In 2024, the Audit Committee of the Supervisory Board of Cinkarna Celje, d. d., composed of Melita
Malgaj – Chairperson (formerly David Kastelic), Jože Koštomaj – Member, and Gregor Korošec –
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 Karmen Fujs, Head of Accounting, were also present at the meetings to
present documents and to answer or clarify questions from members. Two of the meetings were
attended by two certified auditors, Sanja Košir Nikašinović and Lidija Šinkovec, from Ernst & Young,
d.o.o. The Head of the Internal Audit Department, Mateja Rupnik, was also present at the meetings.
At all its meetings, the Audit Committee took note of the interim results of the year and focused on
financial and accounting data. It carefully considered the content of the Company's interim and
annual financial statements and made suggestions 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 the actions implemented on its
recommendations, while at the same time cooperating constructively, suggesting improvements and
guiding the work of the Internal Audit Department.
In accordance with its responsibilities, the Audit Committee was active in the regular audit procedures
of Cinkarna Celje, d. d. in 2024.The main activities were:
• It met with the auditors and familiarised itself with the progress of the final audit of the
2023 financial statements of Cinkarna Celje, d. d.;

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• It took note of the findings of the audit of the 2023 financial statements of Cinkarna Celje,
d. d., and the auditor's opinion;
• It noted the management letter on the findings of the audit of the financial statements of
Cinkarna Celje, d. d., for the year ended 31 December 2023.
The Audited Annual Report 2024 of Cinkarna Celje, d. d., was received and considered by the Audit
Committee at its meeting earlier this year. The Audit Committee concluded that the Annual Report
2024 of Cinkarna Celje, d. d., was prepared in accordance with International Accounting Standards
and the provisions of the Companies Act.
Based on the positive opinion in the auditor's report, additional explanations provided by the auditor
and the professional services of Cinkarna Celje, d. d., and on the information and disclosures in the
Annual Report of Cinkarna Celje, d. d., for 2024, the Audit Committee assesses that the Annual
Report 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 2024, and its profit or loss and cash flows for the year then ended in
accordance with International Financial Reporting Standards.
The Audit Committee considers that the auditor acted impartially and independently and in
accordance with the Auditing Act. The auditor will provide the Company with the service of reviewing
the European Single Electronic Format (ESEF) report and will also review the Remuneration Report
of the Company's management and supervisory bodies.
The Audit Committee reported to the Supervisory Board on the outcome of the statutory audit and
explained that the statutory audit contributed to the integrity of the financial reporting. The Audit
Committee has no comments on the Annual Report 2024 of Cinkarna Celje, d. d., 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 2024 of Cinkarna Celje, d. d., in accordance with the law.
The Supervisory Board approved the annual report at its regular meeting on April 15, 2025. At the
same time, the Supervisory Board approved the proposal for the use of accumulated profit.
President of the Supervisory Board
Tomaž Berločnik

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1.4 Internal audit report
Internal audit services are provided by the Internal Audit Department, which is an independent
organisational unit, functionally responsible to the Supervisory Board and organisationally
responsible to the Management Board. Its role, scope of work, types of services and mandate are
defined in the Internal Audit Charter, which was renewed at the end of 2024.
The objective of internal auditing is to strengthen Cinkarna Celje, d. d.'s ability to create, protect and
preserve value by providing independent, impartial assurance based on risk assessment,
recommendations, advice, suggestions and projections. The Internal Audit Department assists the
Company in achieving its objectives by carrying out activities in areas of key risk and where it can
contribute to the improvement of the Company's corporate governance, risk management and
control processes. In its work, it complies with the Global Internal Audit Standards and other rules
included in the hierarchy of internal audit rules.
In 2024, the work of the Internal Audit Department was based on the approved annual plan, which
was adjusted during the year in response to recent changes in the material risks. Eight internal audits
were carried out, the last of which was completed in the following year. The areas covered were
within the manufacturing business units and processes at company level. Recommendations were
made for the identified improvement opportunities, grouped by risk level, the implementation of
which was regularly monitored. The implementation of the internal audit recommendations helps to
improve the internal control systems in place and their functioning. Improvements were also made
in the area of the internal audit function, primarily in 2024 to adapt to the requirements of the Global
Internal Audit Standards. Reporting to those responsible for the audited activity, the Management
Board, the Audit Committee, and the Supervisory Board was carried out in accordance with the
established reporting relationships. The periodic reports to the Management Board, the Audit
Committee and the Supervisory Board also included information on the implementation of internal
audit recommendations and the execution of other activities.
The development of the internal audit function is planned and implemented through a quality
assurance and improvement programme and regular training. Internal audit activities were carried
out in 2024 and provided the basis for further improvement of the function. The last external quality
audit of the Internal Audit Department of Cinkarna Celje, d. d., was carried out in 2022.
Mag. Mateja Rupnik,
Head of the Internal Audit Department

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1.5 Highlighted events
Cinkarna Celje has the first commercial private 5G network in Slovenia
With a private 5G mobile network, the Company digitised and optimised its warehouse operations.
In the warehouses, it is possible to track materials with barcode scanners and to integrate a sensor
with direct connectivity to the 5G network. In the future, Cinkarna Celje, d. d., will also use the
private mobile network as a platform for digitising other segments of the business where this brings
business benefits.
Part of the success story of ŽKK Cinkarna Celje
As a general sponsor, we are part of the success story of the Women's Basketball Club Cinkarna
Celje (ŽKK CC), which celebrates its 30th anniversary this year. The club marked the anniversary by
opening a permanent exhibition on 20 November 2024 in the home hall of the Celje-Center
Gymnasium. The exhibition shows the rich history of women's basketball in Celje and the "Hall of
Fame" and is open to all visitors to the club's matches. The exhibition is the result of our cooperation
with the club and the Municipality of Celje.
17th competition announced
In the 17th Primary and Secondary School Competition, young people, with the help of CC Detective,
will explore activities that reduce our impact on the environment in different ways and increase our
responsibility towards the environment in which we work.
Cinkarna at the TiO
2
World Summit
The annual TiO
2
World Summit, the industry's largest conference, took place this year in Vienna on
8 and 9 October. For more than 25 years, the event has been the central meeting point for the
titanium dioxide (TiO
2
) and pigments industry, bringing together experts, manufacturers and other
industry stakeholders from around the world. Over the two days, the conference offered a wide range
of interesting topics including presentations, networking and discussions focusing on industry trends,
innovation, supply and demand, sustainable development goals (ESG) and advances in the use of
TiO
2
and pigments.
ISO 50001 – Energy Management System Certificate
Cinkarna was awarded the prestigious ISO 50001 - Energy Management System Certificate. The
internationally recognised ISO 50001 standard is an established standard for energy management
and ensures that the Company systematically increases its energy efficiency, effectively manages
potential energy savings and implements appropriate energy management measures. This
internationally recognised standard is key to systematically improving energy efficiency and reducing
the environmental footprint.
Closure of the 16th competition
The 16th Wonderful World of Water competition was created to educate young people about the
importance of water for our existence and for any production. At the end of the competition, the
winning schools were announced at the Technopark, having contributed the most original solutions,
gadgets, teaching materials or research exhibits to explore any phenomenon or form of water. This
year, the prizes were awarded to the following primary schools: Kompole, Rečica ob Savinji, Fran
Kranjc, VIZ II Rogaška Slatina, Planina pri Sevnici, Sedraž, Polzela, Fran Roš Celje, Letonje Brothers
Šmartno ob Paki, Gymnasium Celje - Center, Secondary School of Horticulture and Visual Arts,
Gymnasium Slovenske Konjice, and a special prize was awarded to the students of the Environmental
Engineering Technician at the Velenje School Centre.
Most Outstanding Employer 2023 in the Chemical Industry
Cinkarna Celje, d. d., was awarded the prestigious title of the most outstanding employer in the
chemical industry for 2023, according to a survey by MojeDelo.com, the largest job portal in Slovenia.

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The survey involved candidates on the labour market who evaluated the reputation of Slovenian
employers in relation to factors such as what motivates them in their career path and what they
expect from their employer. We are constantly striving for improvements in the HR field and follow
the highest standards in the workplace, and this prestigious title confirms our activities and
commitment to our employees.
Distributors' Day
In March, we organised our first "Distributors' Day" event for our titanium dioxide distributors in the
form of a seminar, thus setting a new starting point for future cooperation. We were very pleased to
welcome the arrival of titanium dioxide distributors from all over Europe at our site for the 2-day
seminar. The "Distributors' Day" organised in the form of a seminar is an important milestone in our
cooperation path. Over the two days, we presented new developments and guided the participants
through our production, while exchanging invaluable knowledge and experience. The event was a
great success, after all it is about a personal approach to cooperation and communication, which is
all the more important today in the age of virtual approaches.
American Coatings Show 2024
From 30 April to 2 May 2024, we exhibited at the American Coatings Show in Indianapolis, USA.
1.6 Presentation of the Company
Cinkarna Celje, d. d., with its 150-year tradition of continuous operation, 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. now operates in the chemical processing industry.
Company
Cinkarna, kemična industrija Celje, d. d.
Short name
Cinkarna Celje, d. d.
Headquarters
Kidričeva ulica 26, 3000 Celje, Slovenia
Telephone – Central Office
+386 3 427 60 00
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
Ownership
+386 3 837 09 00
Presented in the financial report
1.6.1 Organisational structure
The organisational structure comprises the Management Board, five business units and eleven
professional services. From 2024, the organisational structure no longer includes BU Metalurgija. As
of 2024, the Environmental Protection Department and the Occupational Health and Safety
Department were merged into the Department of Safety, Health and Environment.

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BU Titanov dioksid (Titanium Dioxide): Tomi Gominšek, Director
BU Kemija Celje (Chemistry Celje): Andrej Lubej, Director
BU Kemija Mozirje (Chemistry Celje): Irena Vačovnik, Director
BU Polimeri (Polymers): Roman Deželak, Director
BU Vzdrževanje in energetika (Maintenance and Energy): Boštjan Podkrajšek, Director
Joint professional services (departments):
• Finance: Dejana Starčević, Head of Finance
• Marketing: Irena Franko Knez, Director
• Procurement & Logistics: Dejan Skok, 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 Department: Mateja Rupnik, Head of Department
2. Corporate governance
2.1 Corporate governance statement
Cinkarna, 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.

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Information on the composition and functioning of the management and supervisory bodies and their
committees is provided in section [GOV-1] Role of the administrative, management and supervisory
bodies.
The Company applies the Slovenian Code of Corporate Governance for Public Joint-Stock Companies,
which was adopted by the Ljubljana Stock Exchange and the Slovenian Association of Supervisors in
December 2021. In accordance with the business decision of the Company's Management Board, the
Company complies with the Code, with the exception of the explained deviations. Due to the specifics
of the Company's corporate governance, the legal basis (ZGD-1, ZTFI-1, MAR- Market abuse
regulation, etc.) is strictly observed in areas deviating from the Code. Below we provide an overview
and explanations of deviations from the individual provisions of the Code.
Item 5.6 – The compliance of the components of the Governance Statement with the provisions of
ZGD-1 was verified by the external auditor as part of the regular audit. No additional external
compliance audit was carried out.
Item 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. A new Remuneration Policy
is being prepared. For more information, see Remuneration of members of the management and
supervisory bodies.
Item 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 from Slovenia.
Item 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.
Item 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.
Item 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 services. Public announcements
(SEOnet and the Company's websites) comply with legal requirements and contain information that
enables an investor in securities to assess the situation and to evaluate the impact of a business
event on the price of securities.
The Diversity Policy is publicly available on the website and is presented in section G1 of the
Sustainability Statement, as well as other codes and policies that the Company complies with in its
operations.
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 effectiveness,

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• the reliability of financial reporting,
• compliance with legal and internal regulations.
The control activities and the responsible persons are recorded in internal documents (job
descriptions, authorisations, organisational regulations, policies, rules of procedure).
The Company provides the following:
• Accounting data control, which involves assessing the accuracy of accounting data and
correcting identified irregularities. Implementation is the responsibility of the Accounting
Department and the Finance Department;
• verification of the reliability of the accounting data, carried out by means of an inventory of
assets and debts. The inventory is carried out by a permanent inventory committee in
accordance with the annual inventory schedule. Special inventory committees may also be
appointed by the Company's Management Board for specific types of inventories or
extraordinary inventories;
• assessing deviations of the magnitude of what has been achieved from what was planned,
which can show shortcomings in implementation, as well as in the planning of objectives.
The activities are carried out within the Accounting Department;
• internal control of the implementation of the prescribed procedures for the purchase, storage
and use of materials and for the production, storage and sale of products (checking the use
and approval of the prescribed documentation, analysing any discrepancies and proposing
measures). The activities are carried out in the Accounting Department and by the Company's
management;
• internal controls in the computerised information system relating to management,
infrastructure, security, purchasing, 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 of audits against acquired ISO
standards;
• internal audits of process performance, carried out by qualified internal auditors, to check
that activities are being carried out in accordance with the requirements of the management
systems 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 body;
• audit of the annual accounts by an external audit firm;
• once a year, a review of the functioning of operational and supervisory internal controls,
based on a decision of the Company's Management Board. The Management Board
determines by resolution the responsible person, the areas of control and the timetable for
carrying out the review.
The Internal Audit Department was set up in 2016. It has been operating since 2017 on the basis of
an adopted charter, a working methodology, professional rules and annual work plan. Its purpose is
to review and assess the adequacy and effectiveness of the system of internal controls in achieving
the Company's significant objectives by carrying out internal audit engagements.
Deviations identified in the various forms of internal control are analysed by the persons responsible
and the management of the Company and, on this basis, action is taken to eliminate or prevent the
causes of risks that have caused or could cause deviations from the rules and objectives of the
Company.
Risk management is discussed in more detail in the next section.

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2.2 Risk management
The risk management process is a key process and the foundation of the Integrated Management
System (IMS). Risks are managed through the Rules on the Management of Impacts, Risks and
Opportunities at Cinkarna Celje, d. d. The Rules define in detail the organisation, responsibilities and
methodology used.
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.
In light of the 2024 CSRD reporting, we are adding to our existing way of addressing risks an
assessment of sustainability impacts with the risks and opportunities arising from them. We outline
how we assess the sustainability impacts and risks we have identified through the Dual Materiality
Assessment (DMA) process on the page (reference to the page describing the DMA process).
Impacts, risks and opportunities are managed through performance targets or objectives, which are
tracked through reports and/or protocols. Impacts, risks and opportunities are monitored on a
continuous basis and due diligence is carried out by the Committee on a quarterly basis. This is
followed by reporting to the Management Board's Broader Professional College. Key impacts, risks
and opportunities are reported to the Management Board and the Supervisory Board on a quarterly
basis.
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 the SEOnet portal
and on the Company's website www.cinkarna.si.
The overview of key risks below is updated and defined to the situation and expectations at the cut-
off date for reporting in 2024 (31 December 2024).

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Schematic representation of business and sustainability risk management at Cinkarna Celje, d. d.

Operational risks

Sustainability risks
Area
Availability of resources
(material, human, financial)
Production

Sustainable areas




Subject
Projects
Compliance

Environment
Social
Governance




Input
channels
Stakeholders

Due diligence
(ongoing)

DMA
(annual)

Shareholders
(ongoing)


Key residual operational risks (severity/likelihood)
Key residual sustainability risks (severity/likelihood)


1
Storage and production capacity
16
1
Waste - red gypsum
19
2
Digitisation
17
2
Process water
20
3
Subjects of work
17
3
Breach of barrier
20
4
Cyber attacks
17
4
Pollution
20
5
Staff availability
18
5
Legislative compliance - products
21
6
Financial risks
18
6
Competences
21


7
Industrial accidents
21

1
Storage and production capacity

The Company prepares its annual and strategic plans based on achieving maximum utilisation of its
facilities. Breakdowns and unplanned maintenance, as well as limited storage capacity, pose a risk
of not reaching the desired target. In 2024, the risk of equipment breakdowns is mainly in the
treatment process of flue gases from titanium dioxide calcination and the risk of breakdowns in the
masterbatch production lines.

The risk in titanium dioxide production is being managed by temporary rehabilitation at the most
critical filter. We procured key spare parts for another. The installation of an additional electrostatic
precipitator is underway, which will allow a gradual and complete overhaul of all the old filters after
commissioning. We are also reducing the risk of breakdowns by introducing lean manufacturing

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(planned and autonomous maintenance, targeted improvement) and by implementing projects to
eliminate technological bottlenecks.

At BU Kemija Mozirje, we carry out extended preventive maintenance and ensure a stock of major
spare parts. A feasibility study was carried out for the installation of an additional line.

2
Digitisation

Untapped opportunities in digitisation and additional costs due to failure in digital transformation or
lack of digital security. Falling behind modern technologies can lead to increased uncompetitiveness.
Digitisation can reduce the risks of lost volume production, increased maintenance costs, manual
data entry errors, reduced administrative costs and better management of security risks.

The risk is being mitigated by implementing several implementation objectives that increase the level
of digitisation and computerise and simplify business processes (upgrading modules in the Power BI
business analytics and in Moja Cinkarna, the document system, migration of Oracle Forms,
modernisation of the maintenance information system and the Spekter production information
system).

3
Subjects of work

In the area of raw material procurement, we face two types of risks. A shortfall in production and
consequently in planned revenues can lead to a shortfall in the supply of work items from monopoly
suppliers, as well as to unforeseen extensions of delivery times throughout the supply chain.

We manage risk by using appropriate contractual protection.

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 search for, test and introduce new sources of raw materials into production. We also evaluate
alternative raw material sources by producing catalogues of verified alternative raw materials and
suppliers. We build long-term and stable partnerships in a targeted manner. We monitor and analyse
the state of international markets ourselves and with the help of market specialists.

We also maintain regular contact with suppliers that we do not deal with operationally, but which
represent a high quality potential alternative.

We place orders on time, make bookings with suppliers, and look for alternative suppliers and
alternative testing procedures.
We ensure timely planning of requirements and procurement of raw materials, take into account
experienced lead times and increase minimum stocks where necessary. For all strategic raw
materials, we continuously update the business case and checklist according to changes in the
market, raw material prices, the Company's business needs and other external factors.

4
Cyber attacks

Production failure due to a cyber attack on the workstation and/or the server system for the
management system by malware with the intent to extort or steal data.

We have put in place additional systems to monitor and ensure information security. Regular security
checks are carried out. With the help of an external expert, we carried out an internal audit in this

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area. We are putting the opportunities identified into practice. We regularly monitor potential new
threats and raise awareness among our employees.

In 2024, we recorded no major cyber incidents, as a result of our ongoing efforts to improve the
safety and security of our information systems. Our cyber security strategy includes several key
activities to mitigate risks and ensure secure operations.

Hardware and software protection: We regularly update our hardware and software to ensure
protection against the latest threats.

User awareness: We conduct regular training and testing of our employees to raise their awareness
of cyber threats and the correct way to deal with incidents. Our efforts also include internal
communication on the importance of data security and protection.

Phishing test: We conducted a phishing test to check the responsiveness and preparedness of our
employees to potential phishing attacks. The results of the test allowed us to further improve our
security measures and training.

Systems security review: We carried out a security review of systems with a higher risk of intrusion
and took action on the recommendations made. This further strengthened our security infrastructure
and reduced the risk of potential cyber attacks.

Risk monitoring and assessment: We regularly monitor and assess the level of risk in our IT systems.

5
Staff availability

The Company is facing a wave of retirements on the one hand and a shortage of staff on the labour
market on the other. The percentage of sickness absenteeism is an additional risk.

In addition to traditional recruitment methods, we use social recruitment solutions to find new
employees. We increased our cooperation with labour placement agencies and contracted external
service providers on a case-by-case basis.

We offer scholarships. We actively participate in career fairs. We have deepened our cooperation with
secondary schools. We provide students with compulsory internships and student work. We provide
students with the opportunity to work on their bachelor's, master's and doctoral theses in the
Company.

We are continuously implementing organisational change and adapting agilely to new circumstances.

We are working to increase employee engagement by introducing team-based problem solving and
communication with employees. We systematically address safety issues in daily meetings and tackle
the causes of injuries. Where possible, we ensure employee polyvalence.

6
Financial risks

Credit risk: The potential risk is the possibility of an increase in expenses due to non-payment by
customers whose receivables are not secured, which represents approximately 5% of the receivables.
As a safeguard against securing receivables with an external institution, we apply internal credit
control for each customer, for whom we have set an individual credit limit, based on their ability to
pay.


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Liquidity risk: Failure to pay within agreed deadlines due to customer insolvency or indiscipline can
lead to liquidity problems. The risk is managed by ensuring a stable cash flow. We regularly obtain
up-to-date information for more accurate cash flow planning, which is elaborated in a detailed, well
thought-out and precise way on a daily, monthly and annual basis. The Company's business has
traditionally been conservative with high levels of cash. Liquidity management includes, inter alia,
planning for and meeting expected cash commitments on a daily, weekly, monthly and annual basis,
ongoing monitoring of customer solvency, and regular collection of overdue receivables.
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) is the third potential financial risk. In order to avoid the realisation of this risk, we
continuously monitor the evolution and forecasts of 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 forwards). We also regularly obtain
more accurate data for forward exchange rate purchases.
1
Waste – red gypsum
The Company fills waste red gypsum from titanium dioxide production into the Za Travnikom waste
disposal plant. The existing zoning plan (ZN) and the building permit allow filling up to 300 m nm,
which will be achieved in 6-7 years.
Due to the new circumstances and lessons learnt during the infilling process, the implementation as
conceived by the project is not possible in certain parts or could lead to the demolition of the planned
structures. Another negative point is the planned inadequate drainage, which would lead to a partial
re-flooding of the site with rainwater.
The project designer, together with the expert support of the UL FGG Department of Geotechnics,
prepared an amendment to the project. The new design provides for increased quantities of red
gypsum and a different form of backfill. The planned volumes have already been registered in the
environmental permit and the MOPE has issued a decision that the planned modification does not
require a reassessment of the environmental impact. However, amendments to the zoning plan and
the building permit are required.
We have submitted an initiative to all three municipalities concerned to amend the ZN. The conditions
for the signing of the contract between the municipalities are being coordinated and will be followed
by the submission of the rezoning petition to the MOPE.
According to the decree of the Municipality of Šentjur, Cinkarna Celje, d. d., should have ceased
filling on 27 October 2023. This deadline is not achievable in practice due to the leaching of white
gypsum and the large settlements not foreseen in the filling project. Representatives of the
Municipality of Šentjur and KS Blagovna have been informed about this since 2017, but they have
insisted on understanding the need to respect this date. We have obtained a legal opinion on the
validity of such a decree. This concludes that the decree is incompatible with the legislation in force,
and we have therefore sent a petition to the Ministry of Natural Resources and Spatial Planning
(MNVP) for a review of the legality of the Decree on Amendments and Additions to the ZN Za
Travnikom Decree. The Ministry of Natural Resources and Spatial Planning referred the application
to the Ministry of the Environment, Energy and Climate (MOPE) for consideration, which agreed with
the legal opinion and requested the Municipality of Šentjur to bring the decree into line with the
applicable legislation within 90 days. As the municipality failed to do so, the Government initiated a
constitutional review procedure on the basis of a proposal from the MOPE.

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With the aim of sustainable development and a circular economy, and to extend the time available
for disposal, the Company is also developing processes to reduce the amount of red gypsum and is
looking at other options for filling in different locations.
2
Process water
This is a risk related to climate change, which can have a negative impact on the Company's business
due to water supply constraints during dry periods.
The Company identifies the potential lack of water to power production as a significant risk of drought
and an opportunity to pursue sustainable business principles.
The most appropriate and, above all, sustainable solution was to use wastewater from the Celje
Central Wastewater Treatment Plant (CČN). This source is sufficient in terms of quantity and
sustainability, but needs additional treatment. Its use results in an improvement of both the biological
and hydromorphological status of the watercourse.
Pilot trials at the CČP site have been completed and form the basis for the design of the equipment,
and alternative technologies are still being tested. In cooperation with the Municipality of Celje, the
process of preparing the OPPN documentation for the installation of the pipeline is underway. At the
same time, the project documentation for the construction of the pipeline is being prepared.
3
Breach of barrier
Heavy precipitation (floods, landslides) or an earthquake pose the risk of a negative impact on the
Company's operations due to damage to the barrier structures, which could result in a partial collapse
and a subsequent flood wave.
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 observations, systematic and long-term maintenance measures are taken
to ensure the stability of the barriers or, where necessary, to remedy the consequences of adverse
weather conditions.
One of these is the triggering of a landslide after heavy rainfall in August on the lower western part
of the high embanked barrier Za Travnikom. The landslide is being monitored by measurements. We
carried out urgent remediation work, which will be followed by full rehabilitation, for which an
environmental provision has been made.
4
Pollution
The Bukovžlak Non-hazardous Waste Disposal Site (ONOB) has also been the site of waste leaching
heavy metals from rainwater and groundwater in the distant past. While this leachate is being partly
successfully captured and sent to the company for treatment, it is partly leaking into the
environment. In order to minimise this impact, the Company is carrying out extensive remediation
of the area, for which it has also set up an environmental provision. The rehabilitation includes
reinforcement of the barrier body, rehabilitation of the drainage and deep pipelines (all three have
already been carried out), the construction of canals for the discharge of backwash water, the
rehabilitation of the C1 drainage under the Bukovžlak high embankment barrier, the construction of
a sealing curtain, and a minimised permeable cover and a diversion embankment.

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5
Legislative compliance – products
In the field of chemicals, there are a number of compliance requirements with different legislations
in countries around the world (REACH, registration of Cu preparations). There are ongoing checks on
the potential harmfulness and consequent withdrawal of products from the market (TMP, PFAS).
There are increasing requirements on the use of plastics, both food contact plastics and microplastics.
This legislation also affects our products. We manage risk through different approaches. We are
carrying out the necessary registration procedures and looking for substitutes for products whose
use may be restricted or even banned.
6
Competences
In addition to the high number of retirements, the risk is posed by a lack of a well-developed
succession policy and inadequate competences of new recruits, which take a long time to acquire.
We have set up a recruitment system that includes a training programme and a mentor for each
post.
We are taking stock of all specific and general skills in the Company, revamping the system for
onboarding new recruits and verifying existing skills for employees.
We have developed and validated a new competency model.
We are implementing a major Knowledge Transfer project in the key production of titanium dioxide.
We have inventoried the key positions in the Company, identified possible successors and defined
the time to replacement and the additional competences needed.
For the most promising candidates, we run a leadership development programme, the Leadership
Academy, as well as provide individual coaching sessions.
7
Industrial accidents
An industrial accident poses a potential risk of a negative impact on the Company's business.
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 introduced European
environmental standards by implementing the principles of the Responsible Care Programme and
harmonised our operations with the requirements of the IED and SEVESO Directives.
We carry out internal audits of the adequacy of the implementation of the measures required by the
SEVESO permit and remedy the deficiencies identified.
In the area of fire safety, we have our own fire brigade and the Company is adequately covered by
fire insurance.
In the area of accidents at work, a professional service is organised to monitor compliance with
health and safety rules and measures. Regular training and education for employees is provided. The
Company is insured against liability for damages.

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We enter into written agreements with external contractors and train them. We have a permanent
Health and Safety Coordinator. We have introduced work instructions for carrying out maintenance
operations in terms of fire prevention, accident prevention and improving the cleanliness of the
working environment.
2.3 Functioning of the General Meeting and shareholders' rights
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:
• 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 day of the
General Meeting. Shareholders may exercise the rights attaching to their shares directly at the
General Meeting or by proxy. Proxies must be given in writing and filed with the Company. As a
general rule, one general meeting per year shall be held.
3. Strategic orientations and future development
3.1 Strategic objectives and orientations
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. The
future development of the Company is based on the following four pillars:
• energy transformation,
• digitisation,
• sustainable development,
• raising capacities.
The sales focus will continue to be mainly on European markets. The Company's presence in existing
markets will be strengthened in the key strategic business area Titanium Dioxide, as well as in the
supporting areas and programmes of Kemija Mozirje (Masterbatches, Powder Varnishes), Kemija
Celje and Polimeri.
In the future, the Company will continue to strive to work closely with its employees, business
partners and the local community to continue its successful operations and to ensure adequate
returns for its owners. It is envisaged to continue optimising the human resources structure by
rehiring and recruiting new young and technically qualified staff.

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Investment in development, training and further improvement of the working environment for
employees will also continue. The investment cycle necessary for stable ongoing operations and
growth will continue in the coming years. We will continue to seek and implement additional ways to
reduce potential undesirable environmental impacts, while continuing to comply with all
environmental legislation and regulatory requirements. However, a tightening in this area could pose
additional risks.
The dividend policy will be stable. 50% of net profit will be paid as dividends.
The new five-year strategic period 2024-2028, which takes into account the 2028 cycle peak, has
the following strategic objectives:
• average turnover of EUR 228.9 million,
• average EBITDA of EUR 36.9 million,
• average net profit of EUR 16.8 million.
Other components and policies are explained in more detail in the Sustainability Statement.
3.2 Plans for 2025
The plan for 2025 is based on an analysis of current market conditions, macroeconomic forecasts
and specific factors in the titanium dioxide industry. Key focus areas include optimising production,
adapting sales strategies and investing in sustainability and energy efficiency.
In 2024, we successfully limited the impact of external factors on our business by taking swift action.
Increased demand for European pigment had an impact on sales price growth in the middle of the
year, which stabilised in the last quarter.
In 2025, we expect a slightly lower margin due to higher material costs, but the focus remains on
high capacity utilisation and a flexible sales strategy. We will continue to shift sales volumes to the
most profitable markets, in particular those with customs protection. We will also invest in increasing
production capacity and improving operational safety, with a strong focus on sustainability projects.
Based on forecasts, we expect stable or slightly lower average selling prices but higher volume sales.
We expect slightly higher energy prices, especially natural gas, and different trends in raw materials
– stabilising prices for titanium-bearing raw materials and rising prices for process chemicals. We
will continue our strategy of optimising our sourcing and negotiating with suppliers.
On the financial side, we remain conservative – no external funding is planned. Investment volumes
will be above the average of previous years, with a focus on removing bottlenecks, improving energy
efficiency and reducing environmental impacts. The company will propose the payment of dividends
in accordance with the company's dividend policy, namely 50% of the previous year's net profit,
which will be decided by the shareholders at the general meeting.
The planned turnover for 2025 is EUR 206.3 million and the net profit is EUR 15.3 million. The slightly
lower profit is due to higher prices for strategic raw materials and energy products and a slightly
lower average selling price of the carrier product, with an EBITDA margin of 16%. All estimates are
based on the results already realised in the first nine months of 2024 and assumptions on future
market trends known at the time of the 2025 plan.
Special emphasis will be placed on development projects to improve quality, sustainable solutions
and rational use of resources. The remuneration policy will be adapted to business performance and
economic conditions, with the aim of ensuring long-term stability and social security for employees.

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3.3 Investments made and planned
3.3.1 Investments made
In 2024, we committed EUR 14.3 million for investments, acquisition of fixed assets and replacement
equipment, and paid advances of EUR 1.7 million, for a total of EUR 16 million, representing 87.1%
of the plan.
Investments were made on a programme-by-programme basis, according to need, capacity and
potential, and in line with the five-year strategic plan.
Sustainability investments were targeted in different areas. With the aim of increasing energy
efficiency and self-sufficiency:
• we continued with the solar power plant project (1.3 MW SE built);
• we refurbished the substation to allow the connection of the solar plant;
• we implemented measures to reduce electricity consumption (replacement of lighting and
energy-wasting electric motors, installation of frequency converters);
• on the basis of a positive feasibility study, we commissioned the detailed engineering for the
cogeneration of electricity from the steam generated by sulphur incineration and the
necessary equipment to adapt the process to the production of sulphuric acid.
In the field of the circular economy:
• We started the process of preparing the project documentation for the installation of the 7th
CEGIPS centrifuge in the titanium dioxide production plant;
• In fungicide production, we purchased a filter press for the filtration of dissolved copper ash,
which allows us to use copper from the recycling process of fishing nets.
In order to prevent soil and water pollution:
• 20% of storm drains and asphalt surfaces where there is a risk of spills of hazardous
substances were rehabilitated;
• Oil interceptors were completely replaced;
• We relocated and renewed our gypsum pipeline on plot 115/1 of Teharje.
In order to reduce air emissions:
• One electrostatic precipitator for cleaning flue gases from calcination was renewed;
• We replaced some vehicles (cars, forklifts) with electric ones.
As measures to increase safety and reduce the risks of old burdens:
• We invested in measures to improve fire safety (gradual renewal of external and replacement
of internal hydrants with Euro hydrants, installation of AJP systems, fire doors);
• Drainage ribs on the eastern flank of the Za Travnikom high embankment barrier and
emergency measures to rehabilitate the landslide triggered during the heavy rainfall in
August 2023 were implemented;
• Maintenance and monitoring measures were implemented for all the barrier bodies.
In the area of health and safety measures:
• We started to implement the LOTO system and LEAN (safety pillar, 5S).
In addition to investing in sustainability, we continue to invest significantly in projects to address
bottlenecks. The largest share of our investments went to titanium dioxide production, where we
continued to prepare projects and permits and to implement pending and new investments. In BU

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Polymers, we purchased a laser for cutting sheet metal and carried out activities on the new blasting
plant project, which will be realised in 2025.
We upgraded the Spekter production information system in BU Titanium Dioxide and are building a
maintenance information system. To enhance information security, we are investing in a virtual
environment for servers and operating stations.
3.3.2 Investments planned
Investments in 2025 will be made on a programme-by-programme basis, according to need, capacity
and potential, and in line with the strategic plan. The total amount of planned investments in 2025
is EUR 19.8 million, which includes capitalised own products and services of EUR 1.7 million, but
excludes the planned activities for the reversal of environmental provisions of EUR 2.5 million. The
planned value of investments, including capitalised own products and excluding the planned funds
for the reversal of environmental provisions, is 8.3% higher than the 2024 plan, representing 9.6%
of planned sales in 2025 and 137% of depreciation.
58.1% of total investment will be for capital expenditure, 28.2% for the purchase of replacement
equipment, and 13.7% for the purchase of individual fixed assets.
88% of the investment will be in titanium dioxide production, for the following:
• implementation of the first phase of cogeneration of electricity from the steam generated by
burning sulphur;
• replacement of two electrostatic precipitators to clean the flue gases from the calcination
process;
• installation of a filter for filtering liquid sulphur;
• addition of lime to the smelting pits to reduce H
2
S emissions;
• development of a washing site for contaminated end-of-life equipment;
• implementation of some of the measures of the integrated water management project;
• increasing the white gypsum extraction capacity (project preparation, permitting, start of
construction of the plant);
• expansion of production (start-up of the gel spinning press, Surface Treatment 2 expansion
project).
Other investments include:
• start of investment in the purchase of a battery storage;
• phase one of the modernisation of the Scada energy system;
• preparation of project documentation for the installation of a new line of masterbatches on
site with a positive feasibility study;
• refurbishment of the internal railway tracks to enable a greater share of raw materials to be
supplied by rail.
BU Polimeri will purchase a new blasting machine for several blasting media.
We will replace some vehicles and forklifts with electric ones and electric motors with more efficient
ones. In line with the baseline report requirements, we will start a phased rehabilitation of the areas
and sewers where the relevant hazardous substances are transported/handled in 2025.
We will invest in measures to improve fire safety (refurbishment of external and replacement of
internal hydrants with Euro hydrants, installation of AJP systems, fire doors).

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26
In 2025, as in every year, we will allocate some resources to rehabilitation interventions in or on
buildings, which are required from the point of view of ensuring structural safety, minimum hygiene,
organisational changes, and the creation of a suitable working environment.
We will purchase some additional equipment for quality control (MB injection moulding machine,
Tidas - particle size measurement in TiO
2
products). We will continue a multi-year project to upgrade
the control and management of the processes with the most outdated software at the Titanium
Dioxide BU.
We will set up a 5G network at the Celje site, make some investments to improve the security of the
IT system, and prepare information for analytical purposes.
We will set up digital warehouse operations at Kemija Mozirje and, as a prerequisite for this, we will
reinforce the Wi-Fi system and purchase scanners.
Investments will also take place at our Bukovžlak and Za Travnikom sites. At Bukovžlak, we will start
the construction of a sealing curtain at the NE of the Bukovžlak Non-hazardous Waste Disposal Site
(ONOB) barrier and drainage C1. At the Bukovžlak high embankment barrier, activities are planned
on a drainage ditch with a gauging point and a dewatering facility. On the Za Travnikom high
embankment, the construction of a reinforcement embankment with drainage on the western flank
and the permanent rehabilitation of a landslide triggered during heavy rainfall in August 2023 will be
carried out. The environmental provision will be used for these purposes.
Table 1: Overview of investments by strategic pillar
Pillar
Amount in EUR
%
Sustainability and energy transition
9,757,700
49.2
Quality and production expansion
2,741,200
13.8
Digitisation
665,000
3.3
Other
6,673,300
33.7
Total
19,837,200
100
Financing is planned from our own resources.
3.4 Research and development
Development activities in 2024 were in most cases in line with our strategic sustainability objectives.
We optimised the formulation of the weather-resistant titanium dioxide and validated the process on
an industrial scale.
We looked for some alternatives to replace the organic additive TMP, which is classified with
suspected reprotoxicity.
The most extensive development work is taking place on the processing of acid waste, where the
main objective is to produce commercially interesting products instead of waste and to recycle part
of the titanium dioxide. We are also involved in the EU consortium project REMHub.
We completed testing on pilot plants to treat wastewater from a municipal wastewater treatment
plant to replace fresh river water. In parallel, we are gathering information on other possible
treatment technologies.
We developed a low-temperature Primer powder varnish.

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27
We produced white masterbatch in two grades for installation in stretch films for outdoor agricultural
applications.
4. Operations
4.1 Sales analysis
Total sales in 2024 amount to EUR 200.3 million and are 13% higher than the sales achieved in the
comparable period in 2023. Total sales to foreign markets are up 15% compared to the comparable
period in the previous year. The increase in sales to foreign markets is undoubtedly due to higher
pigment volumes. In absolute and relative terms, the most significant increase in sales is to the EU,
which is our most important market.
Table 2: Sales by market
2024
2023
ΔPY%
Slovenia
13,684,845
14,889,861
-8
EU
162,234,825
134,006,280
+21
Third countries
19,080,092
22,900,287
-17
Third countries – dollar markets
5,285,650
4,667,861
+13
TOTAL
200,285,413
176,464,289
+13
Sales to the EU market are 21% higher than in the previous year. The increase in sales was driven
by higher pigment volumes resulting from the anti-dumping measures imposed on the market
concerned and a significantly improved demand for copper fungicides. Sales on the domestic
market are down by 8% y-o-y in 2023. The latter is due to lower demand for powder varnishes and
the closure of BU Metallurgia. Sales to third countries are down by 17%, due to lower sales of
powder varnishes and reduced competitiveness in TiO
2
sales. In the dollar markets, we are
strengthening our market shares. In the next medium term, we intend to focus our marketing
activities more on these markets as they offer us good geographical diversification. The 13% increase
in sales is the result of accelerated activities in the US market.
The share of total exports in the Company's total sales in the year under review was 93.2%, an
increase of 1.6 percentage points compared to the previous year. The higher share of exports relates
to an increase in value sales to the key markets of Germany, Italy, France, Poland and the
Netherlands. The largest volume of exports was to Germany, where sales increased by 10%. Titanium
dioxide pigment continues to be a core part of our exports and remains a key product for the
Company, driving growth in foreign markets.
The sales structure by national market is adjusted quarterly according to the specific conditions
prevailing in each individual market. However, the long-term sales structure is influenced by key
factors such as the profitability of the markets, alignment with the Company's marketing strategy,
and the assessment of the political-economic security and reliability of the individual markets. Based
on the current data, it is observed that profitable markets remain stable, while the sales structure is
adjusted where political or economic risks create uncertainties. At the same time, anti-dumping
protection in certain markets, such as the EU, also reinforced the focus on more stable and more
competitive markets in the longer term, supporting the strategic shift towards delivering sustainable
growth in safer, higher-yielding markets.
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28
Table 3: Sales by business segment
2024
2023
ΔPY%
Titanium dioxide
168,728,022
146,042,369
+16
- of which TiO
2
pigment
165,044,453
143,356,887
+15
Zinc processing
0
5,637,539
-
Varnishes, masters and printing inks
16,140,315
16,579,785
-3
Agro programme
11,150,638
5,443,530
+105
Polymers
3,379,268
2,148,761
+57
Other
887,171
612,307
+45
TOTAL
200,285,413
176,464,289
+13
During the period under review, sales of the titanium dioxide pigment business reached EUR
168.7 million. The EUR 22.7 million increase in value sales is mainly due to higher volumes. The
challenging market situation, which continued from the previous year, was reversed in the second
quarter and resulted in improved demand. On the European market, a gradual pick-up in demand
was observed, driven by the culmination of expectations regarding the decision on anti-dumping
measures against pigment of Chinese origin. In addition to the traditional markets, we continued to
sell to some extent in the North American markets. The provisional measures in force since the
middle of last year were replaced by permanent measures at the beginning of this year.
Within the programmes of this business segment, special mention should be made of CEGIPS, where
157.6 thousand tonnes were sold, representing an increase of 22% compared to the previous period.
This result is particularly significant as it directly contributes to extending the life of the Za Travnikom
Waste Disposal Facility.
The zinc processing sales programme was discontinued at the end of 2023, in line with the strategy
to optimise the business portfolio. This decision allows us to focus resources and investments on
programmes with higher added value and more promising market opportunities, in line with the
Company's long-term objectives.
During the period under review, we recorded a 3% decline in sales of varnishes and masters. The
main reason for this decrease is the decline in sales of powder varnishes, which are subject to strong
competitive pricing pressure, mainly due to low activity in the home appliances, store and trade fair
equipment sectors.
Sales of the agro programme, which includes copper fungicides, Pepelin, copperas and Humovit,
increased by 105% in the period under review compared to the same period in 2023. This strong
sales growth is mainly due to restocking and the start of the new season, and the markedly weak
sales market conditions in 2023. Sales activity in 2023 was still influenced by the sale of old stocks
accumulated due to the drought in 2022. We are managing to maintain sales of Humovit at the level
of the comparable period in 2023, but we remain tied to the situation in the domestic and nearby
markets for this product. This is because the additional transport costs make it more difficult for
Humovit to enter more distant markets, which limits the geographical scope of sales and underlines
the importance of optimising distribution at local level.
During the period under review, the relative proportions between business units have again adjusted.
With the exception of BU Kemija Mozirje, where the sales share did not increase, the other business
units recorded an increase in sales share, while BU Metalurgija, which was discontinued at the
beginning of the year, is not included in this comparison.
BU Polimeri's share increased on account of major projects. The increased business volume of the
unit is closely linked to the investment activity of the pharmaceutical and petrochemical sectors in
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29
the region, confirming our strategic focus on contract manufacturing with a high degree of flexibility
and commitment to specific customer needs. While this business model is highly dependent on the
industry's investment cycles, it also allows us to differentiate ourselves and maintain long-term
partnerships.
Adjustments in business models entail a restructuring of the size and focus of individual business
units, which has already had the effect of reducing their number. In this context, we expect further
growth in the relative importance of our core programme – titanium dioxide production – which will
be further strengthened as a key source of value creation and revenue stability in the coming periods.
According to Regulation (EC) No 1893/2006, which establishes the statistical classification of
economic activities in the European Union (NACE), our activities fall under Division 20.2 -
Manufacture of pesticides and other agro-chemical products. The Company is active in the
manufacture of chemicals, which includes the production of copper fungicides used in agriculture to
protect plants against fungal diseases. Sales are shown under the item Agro programme. According
to the EU NACE classification of economic activities, Cinkarna Celje, d. d., is classified in C 20 -
Manufacture of chemicals and chemical products, more specifically in 20.12 - Manufacture of dyes
and pigments. On the basis of Delegated Regulation (EU) 2022/1288, which complements the EU
Low Carbon Benchmarks Regulation (EU BMR), the chemicals and pigments manufacturing sector is
classified as a high carbon sector.
4.2 Operating result
Table 4: Operating result
2024
2023
ΔPY%
Operating income
204,135,737
182,389,786
+12
Operating expenses
177,471,493
169,667,037
+5
OPERATING RESULT
26,664,244
12,722,749
+110
Financial income
1,986,327
1,226,598
+64
Financial expenses
123,439
-143,743
-
OPERATING RESULT BEFORE TAX
28,527,133
13,805,602
+107
Income tax
5,439,882
1,152,195
+372
NET OPERATING RESULT
23,087,250
12,653,407
+82
In 2024, an operating result of EUR 26.7 million was achieved, 110% higher than the 2023
operating result of EUR 12.7 million. The operational performance was significantly better than last
year and significantly exceeds the results of the business plan. This outperformance of the planned
result and the previous year's result is due to the significantly better volume sales of the carrier
product than forecast in the business plan. The operating result including depreciation and
amortisation, or EBITDA, amounted to EUR 39.6 million, representing 19.8% of the sales achieved.
Compared to the previous year, EBITDA is 58% higher.
After accounting for the impact of financial income and expenses, an operating result before tax
of EUR 28.5 million is reported in 2024, and a profit of EUR 13.8 million in 2023. The result before
tax exceeds the previous year's result by 107%.
In 2024, as in 2023, a positive financing balance of EUR 1.9 million is achieved (2023: positive
financing balance of EUR 1.1 million). The resulting financing balance is the result of a positive
exchange rate balance (forward purchases and sales of dollars) of EUR 0.3 million and a positive
balance of investment income and interest income and expenditure of EUR 1.6 million. The positive
exchange rate balance throughout the financial year represents the effective use of hedging
instruments to manage the volatile movement of the $/EUR currency pair in the purchase of titanium-
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30
bearing ores. The positive balance on investments represents the efficient use and deployment of
cash surpluses into profitable investments.
The net result for the period amounts to EUR 23.1 million and is 82% higher than the result for
2023 (EUR 12.7 million). Taking into account the developments in the international economy, the
titanium dioxide pigment market and, above all, the results of competitors in the titanium dioxide
industry, we summarise that the result is more than satisfactory and above expectations. The net
result comprises the profit before income taxes of EUR 5.4 million (effective tax rate of 19.1%).
4.3 Expenses and costs
The structure of consumption of raw materials, packaging and energy shows a greater variation
compared to 2023. In relative terms, the most important reduction is in the cost of energy products.
The price ratio is changing, due to higher input prices. The purchase prices of titanium-bearing raw
materials are at higher levels than in the previous year. The total cost of raw material consumption
is 13% higher. However, at the end of the period, raw materials/materials for production accounted
for the largest share of production costs (84.4%), followed by energy (14.1%) and packaging
(1.5%). Compared to the previous year, there is a marked change in the structure, with a 7.3
percentage point decrease in the share of energy and a 7.4 percentage point increase in the share
of costs of materials.
The structure of labour costs is disclosed in the Notes to the financial statements in section 5 Labour
costs. Gross salaries have been established according to the provisions of the collective agreement,
taking into account the agreements between the trade unions and the Management Board. Transport
to work and meals during work are in accordance with the applicable regulations. Labour costs include
supplementary pension insurance, performance-related payments, severance payments, other
employee benefits, solidarity grants, jubilee bonuses, and other items. The amount of the annual
leave allowance paid per employee for 2024 is EUR 2,000 gross.
4.4 Assets and resources
Table 5: Assets and resources
31 Dec 2024
31 Dec 2023
ASSETS
Intangible assets
2,408,779
1,585,108
Tangible fixed assets
111,699,615
109,855,569
Financial assets at fair value through other comprehensive income
1,287,325
1,558,531
Other non-current assets
105,470
84,444
Deferred tax assets
1,462,488
1,439,044
Total non-current (long-term) assets
116,963,678
114,522,696
Current assets
Inventories
58,969,428
53,841,480
Financial receivables
47,214,859
38,616,117
Trade receivables
30,243,586
31,545,008
Income tax receivable
0
5,493,528
Cash and cash equivalents
17,731,407
15,687,805
Other current assets
230,760
209,028
Total current assets
154,390,040
145,392,966
Total assets
271,353,718
259,915,662
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31
The share of non-current (long-term) assets in total assets decreased by 1 percentage point to
43.1% compared to the end of 2023. The largest category of non-current assets is tangible fixed
assets (96%), which increased by EUR 1.8 million, or 2%, in 2024, for the difference between the
amount invested in tangible fixed assets and the actual depreciation charged. Non-current financial
investments decreased by EUR 0.3 million in 2024, due to revaluation, and comprise shares and
interests in companies. Deferred tax assets increased by 2% due to higher provisioning than release
and utilisation. Other non-current assets represent emission allowances obtained free of charge from
the State. Their balance as at 31 December 2024 is EUR 21 thousand higher than the balance as at
31 December 2023 due to the positive balance between the acquisition of the 2024 allowances and
their surrender to ARSO for the 2023 CO
2
emissions.
The share of current assets in total assets increased by 1 structural point compared to the end of
the previous year, reaching 56.9%. The most important categories in the current assets structure by
value are inventories (38%), financial receivables (31%), trade receivables together with other
current assets and income tax receivables (20%), and cash (11%).
Inventories increased by 10% compared to the end-2023 situation, with a 22% increase in the
value of material inventories (including advances), a 38% increase in the value of work-in-progress
inventories, and a 16% decrease in the total value of the Company's finished goods and merchandise
inventories (all compared to the end-2023 situation). The most important reason for the decrease in
finished goods inventories is the higher volume sales of pigment than the production in 2024.
Current financial receivables as at 31 December 2024 are investments in treasury bills with
maturities of mainly up to one year in order to use cash efficiently.
Current trade receivables comprise current trade receivables from customers and current trade
receivables from others (mainly from the State for input VAT). Compared to the situation at the end
of 2023, trade receivables decreased by 4%. Trade receivables also decreased by 1%, while other
current receivables decreased by 23% on account of a decrease in receivables due from the State
for the receipt of the balance of the transfers under the ZPGOPEK act (EUR 1.5 million). A maturity
breakdown of trade receivables shows that the age structure of the receivables continues to be of
good quality and secured with an external institution or other form of collateral.
Cash (and cash equivalents) represent 11% of total current assets, with a 13% increase in cash
compared to the last day of the previous year due to strong performance. The remaining cash is
necessary to ensure the day-to-day running of the business.
Other current assets are prepaid expenses. Their value increased by 10%.
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32
Table 6: Capital and liabilities
31 Dec 2024
31 Dec 2023
CAPITAL AND LIABILITIES
Called-up capital
20,229,770
20,229,770
Capital reserves
44,284,976
44,284,976
Profit reserves
125,078,814
119,583,496
Fair value reserve
-1,650,342
-1,242,486
Retained earnings
23,093,258
38,374,703
Total capital
211,036,476
221,230,458
Provisions for employee benefits
3,748,722
3,843,523
Other provisions
14,302,270
14,233,199
Long-term deferred income
873,579
767,414
Total non-current liabilities
18,924,572
18,844,136
Financial liabilities
29,915
103,692
Operating liabilities
36,124,537
18,530,350
Income tax liabilities
4,019,469
0
Liabilities under contracts with customers
0
11,351
Other current liabilities
1,218,750
1,195,674
Total current liabilities
41,392,670
19,841,067
Total capital and liabilities
271,353,718
259,915,662
The value of capital in the structure of the liabilities to resources as at 31 December 2024 is 77.8%,
a decrease of 7.3 percentage points compared to the end of 2023. The amount of capital decreased
by 5% compared to the situation at the end of 2024. The decrease (EUR 10,2 million) relates to the
difference between the 2024 net profit of EUR 23.1 million and the dividend payment of EUR 25
million in February 2024, the dividend payment of EUR 7 million in June 2024, and the purchase of
own shares of EUR 0.8 million. As at 31 December 2024, the Company holds 298,384 treasury shares
(3.7% of total shares). In accordance with the resolution of the 28th Ordinary General Meeting of
Shareholders of Cinkarna Celje, d. d., of 19 June 2024, the Company acquired 33,734 treasury shares
worth EUR 0.8 million in 2024. Also, on the basis of the decision of the same General Meeting, the
Company transferred the profit carried forward in 2023 (50% of the net profit generated in 2023) to
other profit reserves, similar to the first 50% as at 31 December 2023, which will remain permanently
in the reserves and will never be shared. There were no other significant movements in capital.
In total capital, share capital amounts to EUR 20,229,770 and consists of 8,079,770 ordinary freely
transferable bulk shares after a split of 1:10 as at 15 August 2022 (of which 298,384 are treasury
shares subscribed in the treasury share pool). The book value per share as at 31 December 2024 is
EUR 26.1 (down 4.6% since the beginning of the year when it was EUR 27.4).
Provisions and deferred income account for 7% of the payables. Provisions for pensions and
similar liabilities were made as at 1 January 2006 (severance and jubilee bonuses) 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 + 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
provisions were examined in detail, verified and re-established, with only the provision for the
elimination of risks due to old burdens of EUR 6.4 million, which was fully eliminated in 2022. At the
end of 2024, similarly to the end of 2023, we re-examined the extent of the provisions and
made/reversed them accordingly in light of actual market conditions and the reasons for their
existence. The level of environmental provisions did not change significantly over the period due to
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33
the earmarked increase due to inflation and discounting to present value, and at the same time the
earmarked coverage of the costs of the above-mentioned remediation projects (increase of EUR 69
thousand). Non-current deferred income increased by 14% due to the funds still to be obtained for
the co-financing of the installation of the solar power plants in 2024.
Financial and trade payables increased by 95% compared to the end of the previous year due to
an increase in current trade payables to suppliers of strategic raw materials. Trade payables
increased by 111% for the above reason. Other current trade payables increased by 33% due to
higher payables to employees and government institutions. Income tax payable for the financial year
2024 as at 31 December 2024 amounts to EUR 4 million as the advance payments made during 2024
do not cover the tax liability for 2024. All financial and trade payables are current in nature. The
Company's gross gearing ratio is 15%, an increase of 0.7% compared to 31 December 2023.
Current financial liabilities as at 31 December 2024 amount to EUR 30 thousand, compared to
EUR 104 thousand at the end of 2023. The Company's gearing ratio is therefore 0.1‰ (0.4‰ at
the end of 2023).
Current trade payables increased by 95% over the period. Current trade payables to suppliers
amounted to EUR 31 million at the end of 2024, an increase of 111% compared to the end of 2023,
due to an increase in payables to suppliers of strategic raw materials. Other payables increased by
33% (or EUR 1.3 million), mainly consisting of EUR 2.5 million payables for net salaries and other
net employment benefits, EUR 2.6 million payables for contributions and taxes from and on
remuneration, and payables for VAT and to other institutions.
Other current liabilities increased by 2% over the period under review, mainly comprising accrued
liabilities for annual leave and other staff costs, accrued environmental contributions and taxes, and
VAT on advances made.
4.5 Shares and dividends
The share capital of Cinkarna Celje, d. d., amounting to EUR 20,229,770, is divided into 8,079,770
ordinary freely transferable bulk shares. The Company's treasury stock at the end of the period
comprised 298,384 shares (or 3.7% of the total issue). The number of shareholders at the end of
the period was 2,871. The ownership structure at the end of the period is shown in the table below.
Table 7: Share ownership structure of Cinkarna Celje d.d.
No. of shares
%
SDH, d.d.
1,974,540
24.44
Modra zavarovalnica, d.d.
1,629,630
20.17
OTP BANKA D.D. - fid.
388,417
4.81
TR5 d.o.o
364,943
4.52
Treasury shares
298,384
3.69
KRITNI SKLAD PRVEGA POKOJNINSKEGA SKLADA
167,050
2.07
RAIFFEISEN BANK AUSTRIA D.D. - FID
157,740
1.95
CITIBANK N.A. - fid.
102,000
1.26
Generali Jugovzhodna Evropa
75,700
0.94
Zagrebačka banka d.d. - fid.
69,560
0.86
Privredna banka Zagreb d.d. - fid.
65,985
0.82
Internal shareholders – FO
60,530
0.75
External shareholders – FO
1,959,667
24.25
Others
765,624
9.47
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34
Movement in the number of shareholders at the end of the year/period
The CICG shares of Cinkarna are traded on the over-the-counter market. The first day of trading was
6 March 1998. The single share price on that day was EUR 33.71. In August 2022, a share split was
carried out at a ratio of 1:10.
Table 8: Movement in the market value of the shares (single price on the last day of the month) and the value of turnover:
Single course
Turnover
2023
2024
2024
JAN
25.8
23.6
3,874,123
FEB
28.2
20.9
5,331,682
MAR
28.8
21.5
2,148,822
APR
27.8
21.8
1,079,058
MAY
24.4
21.6
1,080,289
JUN
24.8
22.3
1,793,351
JUL
24.8
23.8
9,995,320
AUG
23.2
24.5
1,820,420
SEP
22.6
28.5
3,712,825
OCT
23.9
28.7
1,610,799
NOV
22.0
27.0
2,049,682
DEC
20.5
27.7
1,414,968
The value of the share of Cinkarna Celje, d. d., listed in the first quotation of the Ljubljana Stock
Exchange (CICG), fluctuated between EUR 22.3/share and EUR 28.8/share during the period under
review. From the last trading day of 2023 to the last trading day of the period, the value of the share
is 33% higher and, taking into account the payment of dividends, the total gross return is 53%.
On 19 June 2024, the General Meeting of Shareholders of the Company voted for a resolution that
the balance sheet profit as at 31 December 2023 amounting to EUR 38,374,702.93, consisting of,
inter alia, the net profits generated before 2023 amounting to EUR 32,047,999.39 and the net profit
in 2023 amounting to EUR 6,326,703.54, be used as follows:
• An amount of EUR 6,326,703.54, representing the net profit for 2023, was allocated to other
profit reserves and constitutes a separate account within profit reserves which cannot be
paid to shareholders;
• A part of the balance sheet profit of EUR 7,033,608.00, arising from net profits generated
before 2023, was earmarked for payment to shareholders (EUR 0.90 gross per share);
• The remaining balance of the balance-sheet profit of EUR 25,014,391.39, arising from net
profits before 2023, was earmarked for the payment of dividends pursuant to the resolution
of the Extraordinary General Meeting of 13 February 2024 and was paid out.
The amount of all dividends paid in 2024 is 4.10 gross per share and represents, at the date of the
General Meeting's resolution, a dividend yield of 17%.
On 19 June 2024, the General Meeting of Shareholders granted the Company's Management Board
the authorisation to acquire treasury shares.
Dividends paid and the P/E ratio with the corresponding calculation are shown in the section Concise
overview of performance and alternative performance measures.
As a publicly listed company, we have a policy on capital markets. The objectives of this policy are:
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• Ensure that the capital market has an accurate picture of the earnings potential of the shares
by providing relevant, accurate, balanced and timely information to market participants.
• Ensure compliance with all relevant rules and regulations, including the rules of the Ljubljana
Stock Exchange for issuers of shares and applicable Slovenian and European legislation for
public companies.
• Ensure fair and transparent rules for trading in shares both for Cinkarna Celje, d. d., and for
persons deemed to be insiders.
• Ensure that Cinkarna Celje, d. d., is recognised on the capital markets as a fair, accessible,
reliable and responsible company.
• Maintain broad coverage by domestic and foreign securities analysts.
• To be professional, responsive and proactive in relations with investors and to maintain a
balance between expectations and actual performance.
The shares are covered by several domestic and international analysts. Further information on
analyst coverage is available on the Company's official website. All investment materials and contact
details for investors are available at cinkarna.si/en/investor-information.
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5. Sustainability statement
5.1 ESRS 2 General disclosures
5.1.1 Basis for preparation
[BP-1] General basis for the preparation of sustainability statements
Cinkarna Celje, d. d., established a sustainability team composed of employees from all key areas to
prepare the sustainability reporting statement. An external advisor was engaged to provide expert
support. This is the first time the statement has been prepared in accordance with the Corporate
Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards
(ESRS), and as such, there are no changes compared to previous statements. In 2024, we conducted
a Double Materiality Assessment (DMA) and identified sustainability issues that are relevant to our
operations, including a due diligence review of both the upstream and downstream parts of our value
chain. We introduced a structured approach to reporting under the ESRS through data collection and
the establishment of procedures for data analysis and control. In previous years, reporting was
carried out in line with the Global Reporting Initiative (GRI). For certain indicators, the base year
was set as 2021, and this continues to be used in the current report. However, there has been a
change in the emission factors used in the calculation of Scope 1 and Scope 2 greenhouse gas
emissions. To ensure the comparability of reported metrics, we restated the data for the base year
2021. This is explained in more detail in section BP-2 Disclosures related to specific circumstances,
through data collection and the establishment of procedures for data analysis and control.
The statement has been prepared on an individual basis, as the company is a single entity with no
affiliated or subsidiary companies.
Scope of the value chain
The company analysed and assessed the significance of impacts, risks and opportunities related to
both the upstream and downstream parts of the value chain, as part of the double materiality
assessment (DMA) and business model definition. In determining the scope of the value chain,
several value chains were identified. Based on specific criteria, the TiO₂ value chain was identified
as the most important, both in the upstream and downstream segments. In the process of identifying
material topics, the company did not identify any material topics arising from either the upstream or
downstream parts of the value chain.
For the 2024 reporting year, Cinkarna Celje, d. d., did not make use of the right to omit material
information relating to intellectual property, know-how, experience or innovation results.
The company also did not make use of the exemption from disclosing anticipated events or matters
that are subject to ongoing negotiations.
[BP-2] Disclosures related to specific circumstances
Time horizon
For reporting purposes, the company has defined the medium and long-term periods as follows:
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• Medium-term period: from 1 January 2026 to 31 December 2028. This definition takes into
account the timeframe of the business strategy planning, within which certain sustainability
measures have already been foreseen.
• Long-term period: from 1 January 2029 to 31 December 2030. This corresponds to the
planning period set out in the sustainability strategy.
Value chain
a. Definition of metrics
Cinkarna Celje, d. d., monitors greenhouse gas emissions within its value chain (Scope 3, first tier
in both the upstream and downstream parts of the value chain – suppliers and customers, including
transport), with a focus on emissions related to the sourcing of raw materials and the transport of
finished products. For key raw material suppliers, we requested data on their carbon footprint. In
relation to transport, we analysed the modes of transport and the distances travelled by our products
and raw materials in order to assess the emissions associated with logistics.
b. Basis for preparation
Emissions data is estimated based on two main sources:
• Emission factors from databases for individual raw materials, where direct supplier data is
not available.
• Transport data, where emissions associated with the logistics of our products have been
calculated based on the mode of transport (road, rail, maritime) and the distances travelled.
• Direct data on water or energy consumption across the broader value chain is not currently
monitored.
c. Level of accuracy
The accuracy of emission data within the value chain depends on the quality of the data received
from suppliers and the availability of standardised emission factors. For transport, we were able to
estimate impacts with a relatively high degree of accuracy, where information on distances and
modes of transport was available. For raw materials, we rely on indirect data from databases.
d. Measures to improve accuracy
Cinkarna Celje, d. d., plans to enhance the accuracy of assessing the impacts of the value chain with
the following measures:
Further collection of carbon footprint data from key raw material suppliers where this has not yet
been implemented.
Improvement of emission calculation models for transport, including consideration of fuel types and
transport efficiency.
Exploration of possibilities for incorporating additional parameters (e.g. more precise data on the
production processes of raw materials) to improve calculations in the future.
Participation in sectoral initiatives to obtain better average data specific to the titanium dioxide
industry.
Sources of uncertainty in estimates and results
Cinkarna Celje, d. d., notes that some of the quantitative metrics and monetary amounts disclosed
in this report are subject to a higher degree of measurement uncertainty. This is particularly true for
estimates of greenhouse gas emissions in Scope 3, estimates of social impacts on local communities,
and estimates of water impacts.
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a. Definition of metrics with high uncertainty
The highest measurement uncertainty is present in:
• GHG emissions from Scope 3 (particularly transport and raw materials),
• Valuation of social impacts,
• Water impacts,
• Indirect financial estimates for the coming years, related to regulations and market changes.
b. Sources of uncertainty
Reasons for measurement uncertainty include:
• Dependence on future events (e.g. market and regulatory shifts, such as bans on certain
substances),
• Use of average or generic emission factors when specific data from suppliers is unavailable,
• Incomplete availability of data from upstream and downstream parts of the value chain,
• Different methods of data collection (e.g. estimates of transport distances, industry
averages, etc.),
• Variability in data on local environmental conditions.
c. Assumptions, approximations and judgements
The following key assumptions were used to evaluate the metrics:
• That the average emission factors from databases are representative for Scope 3,
• That publicly available data provides a sufficient basis for assessing environmental and social
impacts,
• That current market and regulatory conditions remain relatively stable in the short term,
• That internal records data represents the best available basis for calculations.
Since the composition of primary energy sources for electricity production for 2024 will not be
published until June 2025, we have used the data on the composition of primary sources for 2023
for the distribution of electricity consumption in 2024.
We also note that some quantitative metrics for determining emissions of substances into the air and
water are subject to a higher degree of measurement uncertainty. This primarily concerns emission
metrics for substances determined based on measurements that are conducted less frequently (once
every three or five years or once a year). These measurements are made under certain operating
conditions, and it is assumed that such values (concentrations) remain constant throughout the year,
meaning that the determined metrics are partially based on estimation. The quantities of water
discharged are partly monitored through measurement and are subject to the measurement
uncertainty of the meters, and partly estimated based on water consumption (measured
consumption). In reporting data on waste generation (circular economy), the source of uncertainty
is greatest when presenting the methods of recycling and disposal of the waste delivered. The
uncertainty arises from the data provided by the waste receivers after collection, over which we have
limited control.
For certain data points, the best available data has been used, but there is some measurement
uncertainty related to the measurements, calculations, conversions, data collection and estimation
of data from the value chain. Social impact is estimated due to the variability of circumstances and
the quality of the data. Therefore, publicly available data has also been used in assessing impacts
and risks, among others. This is an ongoing process that will be further developed and improved.
Changes in the preparation or presentation of sustainability information
Emissions from Scope 1 and Scope 2 for the baseline year 2021 were initially calculated with the
help of another company, using different emission factor sources than those used for the emission
calculations for the reporting year. To ensure data comparability between 2021 and 2024, we
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recalculated Scope 1 and Scope 2 emissions for 2021 with the same contractor and accordingly
updated all initially reported data in the document, as well as the effects.
The initial carbon footprint calculation for 2021 also did not account for fugitive emissions, which we
appropriately considered in the recalculation.
Table 9: Scope 1 and Scope 2 emission calculations for 2021
Scope
Type of activity
Year 2021 (tonnes CO
2
eq.)
- FITMEDIA
Difference
Year 2021 (tonnes CO
2
eq.)
- SPHERA
Scope 1
Stationary sources (stationary combustion)
25,903
1,899
27,802
Mobile sources (mobile combustion)
2,962
-2,109
853
Neutralisation process (process emissions)
49,747
-2,000
47,747
Fugitive emissions
0
361
361
Scope 1 – total
78,612
151
78,763
Scope 2
Purchased electricity – location-based method
(all three sites of Cinkarna Celje, d. d.)
33,045
-5,030
28,015
Purchased electricity – market-based method
(all three sites of Cinkarna Celje, d. d.)
80,324
-23,265
57,059
Scope 2 - Total (location-based method)
33,045
-5,030
28,015
Scope 2 - Total (market-based method)
80,324
-23,265
57,059
Total
Scope 1 and Scope 2 (location-based method)
111,658
-4,880
106,778
Scope 1 and Scope 2 (market-based method)
158,897
-23,075
135,822
Table 10: Sources of emission factors for Scope 1 and Scope 2 emission calculations for 2021
Scope
2021
2021
Scope 1
Emission factors for GHG Inventories, April 2022
Sphera MLC Database; DEFRA Database
Scope 2
Jožef Stefan Institute (for 2020)
Sphera MLC Database (location-based method); AIB
Residual Mixes (market-based method)
Disclosures arising from other legislation
The statement includes the Report on environmentally sustainable economic activities and
investments of Cinkarna Celje, d. d., for 2024 in accordance with Regulation (EU) 2020/852 on the
establishment of a framework to facilitate sustainable investment, and its amendment 2021/2139.
Incorporation by reference: Some disclosures in sustainability statements are incorporated by
reference. In such cases, the relevant disclosure makes reference to a chapter within the
sustainability report or to the financial section of the Annual Report.
The assessment of financial materiality is carried out as part of the identification of risks
(opportunities). We have a system in place, which is described in the Rules on the management of
impacts, risks and opportunities at Cinkarna Celje, d. d., and is partly described in the sustainability
report and more extensively in the Annual Report (reference also to the description in the Financial
part of Annual Report).
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Table 11: List of disclosures by reference
Incorporation of sustainability-related performance
into incentive schemes
GOV-3
Financial report, chapter X. Transactions with
related parties in the financial section of the
report.
Expected financial effects of material physical and
transition risks and potential opportunities related to
climate
E1-9
Financial statements
Report on environmentally sustainable economic
activities and investments - ESRS 2
ESRS 2
Financial Statements
Use of disclosure requirements
The company has used the disclosure procedure option for 2024 related to E5-6 concerning the
potential financial effects from resource use and circular economy-related impacts, risks and
opportunities.
5.1.2 [GOV] Governance
[GOV-1] Role of administrative, management and supervisory bodies
The company has a two-tier management system - with a management board and a supervisory
board.
The company is managed by the management board in the best interests of the company,
independently and at its own responsibility. The management board represents and acts on behalf
of the company and is accountable to the general meeting and the supervisory board.
The management board is a collective body of the company. It is composed of the president and up
to three members.
The president or a member of the management board must meet two additional requirements beyond
the statutory ones: holding at least a higher education degree and having a minimum of five years
of professional experience. The president of the management board is also a member of the
management board and is the highest-ranking executive in the group.
Table 12: Composition of the Management Board in the financial year 2024
Full name
Function
Area of
responsibility on
the Management
Board
First
appointment to
the position
End of term
of office
Gender
Citizenship
Year of
birth
Education/professional
profile
Membership of
supervisory
bodies of non-
affiliated
companies
Aleš Skok
President of
the
Management
Board
IT, finance, sales,
procurement, legal
1/7/2020
1/7/2025
Male
Slovenian
1967
BSc. Chem. Eng., MBA
– USA
/
Nikolaja
Podgoršek
Selič
Member of the
Management
Board -
Technical
Director
development,
sustainability,
technology,
occupational health
and safety
30/6/2005 (first
term of office)
1/7/2020 (current
term of office)
1/7/2025
Female
Slovenian
1962
BSc. Chem. Eng., Spec.
/
Filip
Koželnik
Member of the
Management
Board –
Labour
Director
human resources
and social issues
5/11/2020
5/11/2025
Male
Slovenian
1992
MSc (Business Studies)
/
Experience and educational profile of the members of the Management Board
ALEŠ SKOK - He holds a Bachelor's degree in Chemical Engineering from the University of Ljubljana
and an MBA from the American University of MIT. He possesses extensive experience in the
international chemical industry and served on the management boards of joint-stock companies for
over ten years. He also held positions as president and member of numerous supervisory boards.
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NIKOLAJA SELIČ PODGORŠEK – She has been employed at Cinkarna Celje, d. d., for nearly 40 years,
beginning as a technologist and later becoming the head of development. For over 20 years, she has
served as Technical Director, responsible for production, maintenance (including energy
management), development, quality control, environmental protection and occupational health and
safety.
FILIP KOŽELNIK - He initially gained his experience in the financial industry and after completing his
postgraduate studies at the Faculty of Economics, he joined the Accounting Department of Cinkarna
Celje, d. d., as a senior planner analyst. He currently manages investor relations and in addition to
the interests of the company and all stakeholders, he represents the interests of employees regarding
human resources and social issues.
The company's Articles of Association and the Companies Act govern the Management Board's
reporting obligations to the Supervisory Board. The Articles of Association specify matters requiring
the Supervisory Board's consent.
The Supervisory Board comprises six members. Their appointment, duties and rights are defined by
the Articles of Association and the Companies Act (ZGD-1). The operating procedures and conditions
of the Supervisory Board are detailed in its Rules of Procedure.
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Table 13: Composition of the Supervisory Board and Committees in the financial year 2024
Full name
Function
End of term of
function/term of
office
Capital/workers’
representative
Attendance
at SB
meetings in
relation to
total number
of meetings
Gender
Citizenship
Year
of
birth
Education/
professional profile
Status of
independence
in the Statement
of
independence
Existence
of a
conflict of
interest in
the
financial
year
Membership
in supervisory
bodies of
other
companies
Tomaž
Berločnik
Chairman of the SB
from 23/7/2024,
Member of the SB
from 19/6/2024-
23/7/2024
19/6/2029
Capital
representative
4/4
Male
Slovenian
1968
BSc (Mech. Eng.)
and Master of
Business
Administration,
MBA
YES
NO
/
Melita
Malgaj
Deputy Chair of the
SB from 23/7/2024
Member of the SB
since 19/6/2024
19/6/2029
Capital
representative
4/4
Female
Slovenian
1971
BSc (Econ.)
YES
NO
Slovenske
železnice
d.o.o.
Jože
Koštomaj
Member of the SB
17/6/2025
Workers'
representative
10/10
Male
Slovenian
1968
Mechanical
Engineer
YES
NO
/
Aleš
Stevanovic
Member of the SB
7/3/2028
Workers'
representative
10/10
Male
Slovenian
1966
Chemical
technician
YES
NO
/
Boštjan
Furlan
Member of the SB
19/6/2029
Capital
representative
4/4
Male
Slovenian
1972
Mechanical
Engineer
YES
NO
/
Dubravka
Derossi
Uršič
Member of the SB
23/12/2029
Capital
representative
/
Female
Slovenian
1975
Master of Business
Administration
YES
NO
/
Mario
Gobbo
Chairman of the SB
until 23/7/2024,
Member of the SB
until 24/12/2024
23/12/2024
Capital
representative
9/10
Male
American
1953
MSc Biochemistry,
PhD Management
YES
NO
/
Mitja
Svoljšak
Member of the SB
28/2/2024
Capital
representative
2/2
Male
Slovenian
1974
BSc (Econ.)
YES
NO
/
David
Kastelic
Member of the SB
19/6/2024
Capital
representative
5/6
Male
Slovenian
1966
BSc (Mech. Eng.),
MSc (Econ.)
YES
NO
/
Luka
Gaberščik
Deputy Chair of the
SB until 4/6/2024
4/6/2024
Capital
representative
6/6
Male
Slovenian
1978
BSc (Law)
YES
NO
/
Table 14: External members of the Committees
Full name
Gender
Citizenship
Education/professional profile
Year of birth
Membership in supervisory bodies of other companies
Gregor Korošec
Male
Slovenian
BSc (Econ.)
1971
Chairman of the AJPES Council
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Experience and educational background of the members of the Supervisory Board
TOMAŽ BERLOČNIK – He is an experienced executive with a long-standing career in business. He is
best known for his role as the former President of the Management Board at Petrol d.d. In recognition
of his achievements, he was awarded the prestigious Primus Award, which honours outstanding
leadership in corporate communication and contributions to the development of the communications
profession. He also brings extensive experience in corporate governance, having served on the
supervisory boards of companies such as Elan, Slovenske železnice, Telekom Slovenije, and Petrol.
MELITA MALGAJ – She has over 30 years of experience in corporate governance, the sale of equity
investments, corporate restructuring, reorganisations and project management. She has a strong
track record in supervisory roles, having served on supervisory boards since 1997. Her previous
appointments include membership of the Management Board of PDP d.d., and the Supervisory Boards
of Banka Celje d.d. and Abanka d.d., where she also served on the Audit Committee and chaired the
Nomination Committee. She is employed at Slovenian Sovereign Holding (SDH), where she holds the
position of Director of the Economic Sector. She is also currently a member of the Supervisory Board
at Slovenske železnice (Slovenian Railways).
JOŽE KOŠTOMAJ - He has more than 25 years of experience in various areas of work at Cinkarna
Celje, d. d., most of which was at BU Metalurgija, where he also held the position of Deputy Director.
He is currently Head of the Central Warehouse.
ALEŠ STEVANOVIČ – He has worked at Cinkarna Celje, d. d. for 38 years in the Quality Department.
He has also been actively engaged in employee representation for several decades, serving as a
trade union representative, a member of the Works Council and is currently in his second term as
the employee representative on the Supervisory Board.
BOŠTJAN FURLAN – He is a member of the Management Board at Hella/Forvia and Managing Director
of Hella Saturnus Slovenia. He is a recognised expert in corporate restructuring and the
transformation of development and production processes, with extensive experience in the
automotive industry.
DUBRAVKA DEROSSI URŠIČ – She is the Executive Director of the Sales and Operational Marketing
Division at Modra zavarovalnica d.d. She brings strong expertise in finance, accounting and
investment policy.
MARIO GOBBO – He has over 30 years of experience across financial institutions, the pharmaceutical
and biotechnology sectors, telecommunications and the oil, gas and energy industries. He was a
long-serving Managing Director at Natexis Bleichroder and previously worked as a partner in Asian
healthcare funds. His career also includes roles as Head of Science at the International Finance
Corporation and positions at the World Bank Group, Lazard Brothers in London, Continental Illinois
National Bank, Swiss Bank Corporation International Ltd and other leading financial institutions.
MITJA SVOLJŠAK – He has over 20 years of experience in managing complex tasks and
responsibilities across various financial institutions, the Capital Assets Management Agency of the
Republic of Slovenia and Slovenian Sovereign Holding (SDH d.d.). He began his career as a
stockbroker and investment fund manager, later serving as Executive Director at the Capital Assets
Management Agency. Since 2012, he has held senior roles at SDH, including Head of Controlling and
Risk Management, Director of the Financial Management Department and Director of the Controlling,
Analysis and Reporting Department. He currently contributes to the development of corporate
governance and performance reporting as the Expert Director of the Financial Corporate Governance
Department.
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DAVID KASTELIC – He has several decades of experience in senior management positions in the
business sector. He began his career at Philip Morris and, in 1998, joined Zavarovalnica Maribor,
where he served as CEO from 2013. He has also held the position of Vice-Chairman of the Board of
Directors at both Maribor Football Club and HNK Rijeka, and served as the Honorary Consul of the
Federative Republic of Brazil in Maribor. Since 2022, he has been the Chairman of the Management
Board at GRAWE zavarovalnica d.d.
LUKA GABERŠČIK – A lawyer with several decades of professional legal experience, Mr Gaberščik
specialises in corporate governance, financial law, international trade, labour law and environmental
law. He began practising independently in 2008 and, two years later, founded the BGK Law Firm. He
has also served as a member of several supervisory boards.
GREGOR KOROŠEC – has many years of experience in the field of external and internal audit. Initially,
he was employed by the audit firm PricewaterhouseCoopers as an external auditor, and then for
several years he headed the Internal Audit Department at Merkur zavarovalnica. Later, he headed
various insurance departments in the same insurance company and developed competencies in the
field of financial supervision, risk management and organizational leadership, and then headed the
Insurance and Capital Market Sector at the Ministry of Finance. For several years, he also served as
an external independent member of the audit committee at Unior. He is currently employed by the
Internal Audit Department of the Ministry of Finance.
The Supervisory Board had a three-member Audit Committee until 23 July 2024, after which it
became a four-member committee. The Audit Committee exercises its responsibilities in accordance
with applicable legislation (ZGD-1) and the Rules of Procedure of the Audit Committee.
Table 15: Current membership at the end of the reporting period
Function
Date of appointment
Attendance at committee
meetings in relation to total
number of meetings (during
the term of office)
Melita Malgaj
Chair of the Committee
23/7/2024
2/2
Boštjan Furlan
Member and Deputy Chair of
the Committee
23/7/ 2024 (Member)
26/11/2024 (Deputy Chair)
2/2
Ales Stevanovič
Member of the Committee
23/7/2024
2/2
Gregor Korošec
External independent member
4/11/2015
4/5
David Kastelic
Chair of the Committee
19/6/2024
3/3
Jože Koštomaj
Member of the Commission
23/7/2024
3/3
From 23 July 2024 onwards, the Supervisory Board no longer has a separately established HR
Committee. Instead, the duties of the Personnel Committee are carried out by the Supervisory
Board as a whole.
All members of the Management Board are from Slovenia. The Technical Director and the Labour
Director come from the local area where the company is headquartered, representing two-thirds of
the Management Board's composition.
Women representation:
• 1/3 of the Management Board
• Supervisory Board: no women were represented on the Supervisory Board until 19 June
2024. From 20 June 2024 onwards, women representation was 1/6 and from 24 December
2024 onwards, it has been 1/3.
Employee representation:
• 1/3 of the Management Board,
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• 1/3 of the Supervisory Board
• On the Audit Committee, 1/4
Percentage of independent members:
• 1/7 of the total number of Supervisory Board members
• Based on the number of Audit Committee members, 1/4
The Company did not record any other categories of diversity among the members of the
Management Board and the Supervisory Board during the reporting period regarding the composition
of these bodies.
The composition of the Management Board, as well as that of the Supervisory Board and its
committees, is aimed at achieving diversity in terms of professional background, gender and age.
The responsibilities of individual bodies and persons regarding impacts, risks and opportunities are
defined within the company's scope of authority and are specified in related internal policies and
codes. The roles and responsibilities of Cinkarna Celje's Management Board and Supervisory Board
are defined in accordance with established principles of corporate governance, ensuring effective
management of the company's operations, including the control of risks, opportunities and impacts.
A formal definition of the roles and responsibilities of these bodies, specifically for sustainability
matters, has not yet been established. However, sustainability issues are addressed in accordance
with existing principles of corporate governance and are included in regular supervisory and
management processes.
The Management Board has the key responsibility for direct oversight of identified significant impacts,
risks and opportunities. During its term of office, the Management Board ensures appropriate
mechanisms for managing these risks and monitoring their potential effects on the company’s
operations.
The Management Board regularly assesses risks and identifies opportunities, considering the
sustainability, operational and financial aspects of the business. The Management Board reports on
all relevant findings, actions taken and any potential impacts to the Supervisory Board through
regular quarterly reporting on the company's performance. In this way, an effective oversight
framework is established, enabling transparent management of risks and monitoring of sustainability
impacts in line with internal policies and stakeholder expectations.
The Supervisory Board’s responsibility is to oversee, based on the Management Board's reports, the
effectiveness of risk management and assess whether the measures taken by the Management Board
are appropriate and aligned with the company’s strategic goals. Progress regarding significant
impacts, risks and opportunities is monitored through periodic reporting at Supervisory Board and
Audit Committee meetings.
The company has established a group of internal experts responsible for identifying, in collaboration
with the owners (directors and heads of organisational units), analysing and evaluating impacts, risks
and opportunities. This group reports quarterly at the extended meetings of the Management Board.
The senior management (Management Board) is responsible for confirming significant impacts, risks
and opportunities (DMA) and their management:
• setting the strategy and objectives for managing impacts, risks and opportunities,
• overseeing the impact, risk and opportunity management process and proposing changes to
improve process performance and efficiency,
• assigning authorities and responsibilities at appropriate organisational levels,
• providing the necessary resources for process operation and implementation of measures,
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• proposing and if necessary leading measures to manage significant impacts, high corporate
risks and significant opportunities,
• informing the Supervisory Board of significant impacts, risks and opportunities. The
Supervisory Board and its audit committee oversee the performance and effectiveness of the
comprehensive impact, risk and opportunity management system and the integrity of
information on significant impacts, risks and opportunities provided and confirmed by the
company.
The Management Board is responsible for the operational implementation of the company’s strategies
and the management of risks related to its operations. Its responsibilities include:
• developing and implementing strategies for managing impacts, risks, and opportunities,
including goals for reducing negative impacts on the environment and society,
• monitoring compliance with legal and regulatory requirements and aligning internal policies
with ESRS standards,
• ensuring the effective implementation of business ethics and human rights protection policies
across the value chain,
• leading the reporting process on sustainability and communicating key findings and results
to stakeholders.
The Supervisory Board plays a key role in ensuring independent oversight of the Management Board’s
activities, confirming strategies, overseeing their implementation and making strategic decisions
related to the company’s operations, risk management and ensuring the company’s sustainable
development.
The Management Board ensures that the annual sustainability statement is prepared in line with
CSRD requirements, including ESRS standards and the Regulation on the establishment of a
framework to facilitate sustainable investments (EU taxonomy). The statement details key
sustainability issues addressed during the reporting period, enabling accurate and transparent
reporting of the company's sustainability performance.
Oversight of sustainability impact, risk and opportunity management is conducted through the
Supervisory Board and Audit Committee. The Audit Committee oversees financial and sustainability
reporting and monitors the effectiveness of internal controls and risk management systems, reporting
this to the Supervisory Board. The Supervisory Board, in its supervisory capacity, confirms the
company’s sustainability strategy, DMA and the overall sustainability statement as part of the
approval of the comprehensive annual report.
To address the introduction of sustainability reporting, the Management Board and Supervisory Board
of Cinkarna Celje, d. d., will further develop their competencies through internal training and, where
necessary, by engaging external experts. During the reporting period, individual members of the
Management Board and Supervisory Board were responsible for assessing their existing
competencies and identifying potential knowledge gaps. Collectively, the Management Board
undertook 89 hours of training covering various environmental, social and governance (ESG) topics.
Members of the Supervisory Board participated in a workshop on the company’s sustainability
strategy, held on 23 October 2024.
The company acknowledges that the skills and knowledge of the Management Board and Supervisory
Board play a crucial role in identifying significant impacts, risks and opportunities that sustainability
reporting brings both for the company and for wider stakeholders. The diversity of skills and
experience of the members of both bodies enables a more comprehensive approach to strategic
decision-making, fosters innovation in adapting to new regulatory requirements and opens up
opportunities for long-term sustainable growth and the company’s competitive advantage.
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In the future, the company plans a comprehensive development of additional competencies for the
members of the Management Board and Supervisory Board in the area of sustainability management,
which will further strengthen their ability to shape effective strategies aligned with the company’s
environmental, social and governance goals.
[GOV-2] Information provided to the administrative, management and supervisory bodies
of the company and sustainability matters considered by those bodies
The Management Board and the Supervisory Board of Cinkarna Celje, d. d., take into account the
impacts, opportunities and risks related to the sustainability aspects of the business when overseeing
the company’s strategy and making decisions on significant transactions and risk management
policies. During the reporting period, the Management Board regularly informed the Supervisory
Board of all relevant sustainability matters and identified impacts, risks and opportunities during
regular Supervisory Board meetings as part of the company’s business and risk management
reporting. The Management Board assessed significant IROs in accordance with the preparation of
the DMA.
Special emphasis was placed on the development of the company's sustainability strategy. An
extraordinary meeting of the Supervisory Board was convened during the reporting period exclusively
to discuss this topic. During the meeting, the Management Board presented a draft sustainability
strategy, highlighted key impacts, opportunities and risks arising from the strategic directions, and
provided explanations regarding potential compromises between sustainability goals and other
business priorities. The members of the Supervisory Board actively participated in the discussion
with comments and questions, enabling a comprehensive debate on all relevant aspects.
Based on the discussion and suggestions provided, the Management Board prepared the final version
of the sustainability strategy, which was approved by the Supervisory Board at its next ordinary
meeting on 26 November 2024.
In assessing impacts, risks and opportunities and in making strategic and key business decisions,
the Management Board and the Supervisory Board will also consider potential trade-offs between
achieving sustainability objectives, financial performance and the long-term viability of the business
model.
The company is currently establishing a more structured approach to addressing sustainability
matters, including the development of appropriate internal controls, processes and defined
responsibilities related to the management of identified impacts, risks and opportunities (IROs).
As part of these efforts, the Management Board plans to report regularly on sustainability topics,
which will also form part of the annual update of disclosures under the Double Materiality Assessment
(DMA) approach, in line with regulatory requirements.
[GOV-3] Integration of sustainability-related performance into incentive schemes
The remuneration system for members of the Management Board is partly linked to the achievement
of sustainability objectives, which are incorporated into the variable component of remuneration.
One of the key elements in determining this component is employee satisfaction, which accounts for
10% of the total variable remuneration within the overall remuneration structure.
In addition, the variable part of the Management Board’s remuneration also depends on the
successful implementation of five strategic projects, which are pre-approved by the Supervisory
Board as part of the annual plan. Each project has a clearly defined objective, the achievement of
which serves as the benchmark for performance assessment. It is essential that at least one of these
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projects is directly related to sustainability themes. The overall impact of this element on the variable
component of the Management Board’s remuneration amounts to 20% of the total. Details of
Management Board remuneration are provided in section X, Related party transactions – Details of
groups of persons, in the financial section of the report.
The company's Supervisory Board plans to upgrade the Management Board's remuneration policy,
which will be more closely aligned with the achievement of sustainability goals and the bonuses and
incentives for management. This policy will enable the company to establish a transparent, ethical
and sustainability-oriented remuneration framework. In accordance with legislation, the General
Meeting will approve the remuneration policy whenever changes are made. At the time of reporting,
the company had not received approval for the Management Board's remuneration policy from the
General Meeting, although it had been submitted for approval.
The development of the new remuneration policy will be carried out in line with shareholder
expectations, with the Supervisory Board considering their initiatives and recommendations to
standardise and increase remuneration transparency. The aim of the new policy is to align rewards
with the company’s sustainability-driven strategy, which includes responsibility towards
environmental, social and governance goals. By establishing a clear link between remuneration and
sustainability objectives, the company seeks to ensure long-term value for all stakeholders and
create an environment that motivates managers to achieve sustainable results.
At the time of reporting, remuneration linked to sustainability goals had been defined at the level of
the Management Board members.
[GOV-4] Due diligence statement
The purpose of the due diligence process is to identify and address actual and potential impacts,
risks and opportunities in the areas of the environment and human rights. The company established
the process with an internal transcript and conducted an assessment in 2024, incorporating the
findings into the double materiality assessment. The table below provides links to sections within our
sustainability statement where we provide information about our due diligence process. These tags,
along with their corresponding topics, are referenced throughout the report in their respective
chapters.
Table 16: Main references to key elements of due diligence
Key elements of due diligence
Tags in sustainability statement
Integrating due diligence into the governance, strategy and
business model
ESRS 2 GOV-1, ESRS 2 GOV-2, ESRS 2 GOV-3, ESRS
SBM-3
Engaging with affected stakeholders at all key stages of due
diligence
ESRS 2 SBM-2, ESRS 2 IRO-1, S1-2, S3-2
Identification and assessment of adverse impacts
ESRS IRO-1, E1 IRO-1, E2 IRO-1, E3 IRO-1, E1, E2, E3,
E5, IRO-1, S1 SBM-3, S3 SBM-3
Monitoring measures to address these adverse impacts
E1-3, E2-2, E3-2, E5-2, S1-4, S3-4
Monitoring and communicating the effectiveness of these
efforts
E1-5, E1-6, E2-4, E2-5, E3-3, E3-4, E5-3, E5-4, E5-5, S1-4,
S1-9, S1-13, S1-14, S1-15, S1-16, S1-17, S3-4
[GOV-5] Risk management and internal controls for sustainability reporting
The sustainability reporting risk management process systematically involves a broad range of
employees across various levels and business functions, who contribute to the preparation of
sustainability information. Risks are addressed and confirmed by the impact, risk and opportunity
management committees, and mitigation measures are reviewed and monitored quarterly at senior
management meetings. The Internal Audit, as per its plan, audits the risk management process
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implementation, assessing its performance and effectiveness. This ensures a dynamic and responsive
risk management process, capable of adapting to sustainability-related challenges and opportunities.
The Management Board formulates and oversees the sustainability statement. A sustainability team,
comprising individuals responsible for specific sustainability areas, has been appointed to establish
the reporting process. The control environment, encompassing organisational structure, defined roles
and reporting responsibilities, emphasises legal compliance and continuous training. Existing data
collection procedures and controls are used for information included in regular reports. The
company’s Internal Audit Department also addresses sustainability reporting risks. External statutory
audits provide additional oversight. A unified methodology, detailed in the internal Rules on impact,
risk and opportunity management, governs all risk management activities. This methodology takes
into account the standards SIST EN ISO 9000, SIST EN ISO 14001, SIST EN ISO 45001 and SIST
EN ISO 31000. Risks are evaluated based on their current and potential financial impacts, mitigation
effectiveness and the success of measures during the evaluation period. Risk classification employs
uniform criteria, categorising risks as low, medium or high. So far, the main risks identified have
concerned the integrity, accuracy and availability of data, with availability primarily relating to data
within the value chain. These risks are mainly recognised and managed by those responsible for
preparing the required disclosures. The sustainability team regularly reviews risks associated with
the timely preparation of relevant disclosures. In response to identified shortcomings in IT support,
the team initiated the development of an application-based solution for collecting quantitative data
included in the sustainability statement. As part of its review of environmental matters, the internal
audit highlighted risks arising from the absence of clear procedures for data preparation and the
overall lack of robust IT support.
A comprehensive assessment of risks and the adequacy of internal controls related to sustainability
reporting has not yet been conducted, as this represents the company’s first report in the field. The
findings of the external auditor, following the initial review of compliance with ESRS requirements,
will be considered alongside the company’s own observations as key inputs for the future risk
assessment process. The integration of these findings into internal functions and procedures will form
an integral part of a comprehensive risk management system, which also encompasses sustainability
and its reporting. In this way, the integrated risk management system will support the continuous
improvement of internal controls in sustainability reporting.
The sustainability team provides quarterly updates to the Management Board on the reporting
process and related risks. The Management Board, in turn, informs the Supervisory Board and the
Audit Committee through its regular reporting. Both bodies are also kept informed about the
reporting process through engagement with the external auditor and reports from the Internal Audit
Department.
5.1.3 [SBM] Strategy
[SBM-1] Strategy, business model and value chain
Cinkarna Celje, d. d., is committed to becoming a leading, sustainable chemical industry company,
dedicated to reducing environmental impacts, responsibly managing resources and enhancing social
responsibility and transparency by 2030. We will contribute to a low-carbon future by lowering
greenhouse gas emissions and improving energy efficiency and we will support the circular economy
and responsible waste management by expanding our product portfolio.
Increased production volumes will drive business growth, enabling the development of opportunity
portfolios that reduce waste and pollution, despite the expansion.
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Our commitment is that, as we grow, we will:
• reduce our carbon footprint through greater use of renewable energy sources and improved
energy efficiency,
• increase water recycling and reduce dependency on natural resources,
• continuously reduce emissions into the air and water and manage waste responsibly,
• promote innovation in green technologies and develop products that support the
sustainable use of resources,
• ensure a safe, inclusive and supportive working environment where employees are
motivated to achieve the best results,
• provide social security for our employees,
• establish a consultative channel (Sosvet) with affected communities, using the information
gathered to enable co-decision-making in defining and implementing measures and report
on them transparently,
• support sports, cultural and other social activities in affected communities, participate in
safety-enhancing initiatives and contribute to infrastructure improvements,
• further develop our corporate governance and culture, including the introduction of a lean
production system,
• educate and raise awareness among employees so that everyone actively contributes to
the implementation of this strategy.
In particular, we will contribute to the following UN Global Sustainable Development Goals:
Goal 8: Decent work and economic growth
As a producer of titanium dioxide, Cinkarna Celje, d. d., contributes to economic growth by creating
quality jobs and ensuring stability in the chemical industry through a wide range of other products,
including sulphuric acid, white gypsum, powder coatings, masterbatches, copper-based plant
protection products, growth substrates and the production of liquid transfer systems - polymers. Our
presence in the European Union, Balkans and Middle East markets enables sustainable growth, while
we work with key industrial partners and suppliers to improve employment and safety standards.
Goal 12: Responsible consumption and production
Sustainable approaches in titanium dioxide production reduce our environmental footprint through
process optimisation and the circular economy. Our main sales sectors are printing inks, coatings
and plastics, where we strive to develop innovative and more environmentally friendly solutions. Our
key stakeholders are titanium dioxide pigment customers, regulatory bodies and suppliers, with
whom we work to ensure a responsible supply chain.
Goal 13: Climate action
We contribute to global climate goals by implementing strategies to reduce the carbon footprint of
production processes, including measures to reduce CO₂ emissions across the value chain (Scope 1,
2, and 3). These measures are primarily implemented in EU countries, where strict environmental
regulations apply. We collaborate with industry partners, research institutions and suppliers to
improve emissions data and implement low-carbon technologies.
Significant product groups are disclosed in the Activities and product groups section, with the
breakdown of revenues presented in the Sales analysis section. Significant markets and employee
numbers are provided in the Market presence section and employee data is detailed further in the
Own workforce section.
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Due to the nature of its production processes, direct alignment with the 1.5 °C global warming
limitation scenario is currently not feasible for Cinkarna Celje, d. d. The production of key chemicals
such as titanium dioxide involves energy-intensive procedures. Technologies that would enable
fundamental changes to these processes are either not yet widely available or remain in the
development stage.
At the national level, the existing infrastructure is not yet sufficiently developed to support the
transition to low-carbon processes at the scale required to meet the 1.5 °C target.
Achieving such a goal would also necessitate substantial changes in the availability of renewable
energy sources, in supply chains and in supporting technologies that form part of the broader industry
and lie beyond the company’s direct control.
Cinkarna Celje, d. d., is therefore focusing on the gradual reduction of the carbon intensity of its
processes and the integration of sustainable technologies wherever feasible. Through these efforts,
the company contributes to emission reductions and supports the long-term transition to a low-
carbon economy.
Various sales sub-programmes can be consolidated into sales groups that bring together products
with similar end uses. In recent years, we have discontinued certain production and sales
programmes that did not meet profitability or performance criteria.
Our major product and sales programmes are:
• titanium dioxide (TiO₂) production,
• production of sulphuric acid,
• production of products for agriculture, including plant protection products and growth
substrates,
• production of masterbatches and powder coatings,
• a group of fluorinated polymers and elastomers whose properties make them suitable for
transporting aggressive media and protecting process and hardware equipment,
• semi-finished products from titanium dioxide pigment production: titanyl sulphate,
metatitanic acid, and sodium titanate,
• by-products from titanium dioxide pigment production: white gypsum – CEGIPS and red
gypsum – RCGIPS (47% : 53% on a dry matter basis of these by-products).
The flagship production and sales group is titanium dioxide pigment, which combines the sale of
various pigment types. This group also includes ultra-fine forms of titanium dioxide, which are high-
value-added products. Depending on their crystal structure, these can function as photocatalysts or
UV absorbers. They are incorporated into highly technologically demanding products (self-cleaning
systems, UV-stabilised materials, etc.). The production and marketing of titanium dioxide pigment
account for 83 percent of our total sales.
The plant protection product sales group falls under activity 20.2, Manufacture of pesticides and
other agrochemical products, according to Annex I of Regulation (EC) No. 1893/2006. Compared to
the flagship production and sales group, this represents a very small market share of the company's
total sales (5.56% of total sales revenue in 2024). The main products in this group are copper
fungicides of various formulations and using different active substances (copper hydroxide, copper
oxychloride, tribasic copper sulphate). In the field of plant protection products, we pursue a strategy
with an emphasis on product quality and their environmentally safe use.
The powder coatings and masterbatches group represents a vertical upgrade of the basic production
of titanium dioxide pigment and is becoming an increasingly important sales group for the company.
Powder coatings are sold primarily for anti-corrosion and decorative purposes in the production of
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white goods, radiators and other metal products. Masterbatches are designed to be mixed into
plastics to improve their performance properties.
Other areas include the production of PTFE (polytetrafluoroethylene) products, half of which are for
internal consumption and maintenance, and the other half for marketing, primarily in the
phytopharmaceutical and chemical industries. Sulphuric acid production is mainly for internal use,
with any surplus sold on the market. CEGIPS, so-called white gypsum, is sold to the cement industry
and for the production of gypsum plasterboard, as well as for use in agriculture. The by-product
RCGIPS is entirely used for dry filling at the Za Travnik landfill. Depending on its properties, it can
also be used for backfilling in low-rise construction, the construction of low embankments, and the
production of covering layers.
At the beginning of 2024, we removed zinc processing from our portfolio, which included zinc alloys,
anodes and zinc wire.
We operate primarily in the European market, where we generate the majority of our revenue. We
also have a smaller presence in compensation markets, mainly in the US dollar currency area.
Geographically, we identify the most important markets as EU member states (excluding Slovenia),
followed by the domestic market (Slovenia) and third countries.
The countries where we have the largest presence, with a sales share of more than 1%, are: Germany
(28%), Italy (15%), France (12%), Poland (7%), Slovenia (7%), Turkey (5%), Netherlands (4%),
Austria (4%), Denmark (3%), Croatia (3%), Greece (3%), USA (2%), Sweden (2%), Czech Republic
(2%), Romania (1%), Serbia (1%).
In terms of market sales value share, the majority is represented by sales to the EU market
(excluding Slovenia).
All production units, along with support services, are located in Slovenia, where we employed 718
people at the end of the year.
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Table 17: Key elements of a sustainable strategy
Our vision: to become an efficient, sustainable company in the chemical industry
[E] Reducing our carbon
footprint and pollution
[S] Empowering the local
environment and employees
[G] Integrity through responsible
business
Our sustainability goals
E1 CLIMATE CHANGE
Reduce carbon footprint by 10%
by 2030.
Reduce Scope 3 CO₂e
emissions by 15% by 2030,
mainly in the raw materials and
materials supply chain and
logistics segments, especially in
the production of titanium
dioxide pigment.
Actions and activities:
Investing in solar power and
optimising energy use to reduce
fossil fuel consumption.
S1 OWN WORKFORCE AND
HEALTH AND SAFETY AT
WORK
Implement measures to improve
occupational safety and health
and move towards the target of
zero accidents at work by 2030
(compared to the base year of
2021).
S1 OWN WORKFORCE: EQUAL
TREATMENT AND EQUAL
OPPORTUNITIES
By 2030, increase the proportion
of engaged employees to 40%
and reduce the proportion of
actively disengaged employees
G1 BUSINESS CONDUCT:
SUPPLIER RELATIONSHIP
MANAGEMENT
Encourage value chain
participants to adhere to and
comply with the Code of
Conduct for Sustainable
Business.
G1 BUSINESS CONDUCT:
Introduce a lean production
system and sustainability training
for employees, to make them
aware of the objectives of the
sustainability strategy and to
actively involve them.
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Co-generation of electricity from
steam to improve energy
efficiency.
Energy efficiency.
Analysis of logistics routes to
optimise transport distances and
select low-carbon transport
solutions.
Assistance and cooperation at
various levels with our suppliers
to reduce category 1 by 22% by
2030.
E2 POLLUTION
Reducing specific sulphate
emissions by 15% by 2030
(compared to the base year of
2021).
A 15% reduction in specific
emissions of air pollutants (SOx,
H2S and dust) by 2030
(compared to the base year of
2021).
E3 WATER RESOURCES
By 2030, implement projects to
conserve water resources and
reduce water withdrawal from a
watercourse (compared to the
base year of 2021).
E5 RESOURCE USE AND THE
CIRCULAR ECONOMY
By 2030, reduce the amount of
red gypsum produced by 14%
(compared to the base year of
2021).
to 16% (compared to the base
year of 2021).
S1 OWN WORKFORCE:
WORKING CONDITIONS
Increase activity to promote
employment opportunities close
to home by 10% by 2030.
S3 AFFECTED COMMUNITIES:
ECONOMIC, SOCIAL AND
OTHER COMMUNITY RIGHTS
By 2030, establish a consultation
channel with affected
communities, participation in
youth education programmes,
support for sports, cultural and
other activities, investment in
infrastructure, ensuring a higher
level of security and participation
in charitable projects.
Programme
Our contribution to UN goals
We will work closely with our suppliers and partners to ensure that they share our commitment to
high ethical and sustainability principles, thereby ensuring a sustainable value chain focused on
reducing our environmental footprint and operating in a socially responsible way.
The European market is crucial for Cinkarna Celje, d. d., as it represents the largest share of our
revenues and has the most stringent sustainability requirements. In response to the demands of the
EU Green Deal, REACH and other environmental standards, we are adapting our strategy to remain
competitive and meet the expectations of both customers and regulators.
Currently, our most important product is titanium dioxide, which serves as a fundamental raw
material in numerous industries. The segment of paint and coating manufacturers is particularly
prominent, representing our largest market and the one where sustainability demands are most
pronounced.
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The company is exploring options for optimising production processes, improving energy efficiency
and increasing raw material yields in titanium dioxide production. More information can be found in
point [SBM-1] Strategy, business model and value chain.
Our operations are based on compliance with the best available techniques, sustainable investments
and the optimisation of production processes to minimise environmental impact and ensure safe and
healthy working conditions for employees. We are focused on continuous quality improvement,
innovation and efficient resource management, which enables us to compete in global markets.
In the upstream part of the value chain, we work closely with key suppliers of raw materials and
products for TiO2 (titanium-bearing ore, sulphur), for paints and coatings (epoxy resins, pigments),
for agro products (copper) and for process equipment (PTFE, metals). These raw materials are
delivered via rail, sea or road transport.
In the upstream part of the value chain, we identify:
• suppliers/distributors of direct and indirect materials/services,
• storage and transport to Cinkarna Celje, d. d.
We utilise road, rail and intermodal transport to deliver to customers in the paints, plastics, paper
and other sectors, including construction, agriculture, and metalworking.
In the downstream part of the value chain, we identify the following processes:
• storage,
• distribution and transport to customers,
• customers/distributors.
The primary data sources for analysing the business model and value chains include company
websites, internal databases, global publications for specific sectors and product categories, trade
fair and conference visits, various associations and organisations, supplier and customer annual
reports, direct stakeholder communication and financial data. Additionally, we utilise various
analytical tools, such as ChatGPT, to obtain information from publicly available sources and
publications and analyses related to our work areas.
We first defined the value chains and the methodology for identifying key stakeholders, including
both suppliers and customers. Next, we established communication channels that enabled the
effective collection and consolidation of data on our partners. We analysed stakeholder transactions
based on accounting data and gathered and reviewed information on stakeholders, with a focus on
key sustainability attributes. Following the data analysis, we defined the scope of the value chain,
conducted due diligence and identified common sustainability themes, commitments and measures
that will guide our future engagement with stakeholders.
In 2024, we carried out due diligence by reviewing the annual reports of suppliers and customers,
establishing direct communication with stakeholders and analysing information obtained from
company websites and other sources. As part of this process, we are preparing a questionnaire to
gather additional information on stakeholders’ sustainability practices.
In 2025, we plan to conduct a survey and carry out at least three due diligence assessments of
suppliers.
We support customers in key segments such as paints, coatings and chemicals by offering enhanced
product efficiency and sustainable alternatives, helping them achieve their own sustainability goals.
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For investors, our transparent reporting and focus on sustainability-related risks provide greater
business predictability. Investments in sustainable technologies—such as the production of low-
temperature coatings, the use of recycled materials and biopolymers, and energy optimisation—
strengthen the long-term resilience of our business model to regulatory and market changes.
For other stakeholders, including employees, local communities and suppliers, we foster a safe and
inclusive working and local environment. Reducing our environmental footprint has a positive impact
on surrounding communities, while long-term partnerships with suppliers help ensure a stable supply
chain.
The company recognises several value chains, namely:
• TiO₂ value chain,
• Masterbatch value chain,
• Powder coating value chain,
• Agro value chain, and
• Polymer value chain.
According to the established criteria, the TiO₂ value chain is identified as the most important, both
in the upstream segment (raw materials and products for TiO₂) and downstream segment (paints,
varnishes and coatings; plastics; paper). Below, we present the key characteristics of the upstream
and downstream segments of all identified value chains, as well as the matrix relationship between
upstream and downstream value chains and product-sales programmes.
Table 18: Relationship between upstream and downstream value chains including the production and sales programme
Upstream (work
items)
Value chain
Downstream
(activity)
Production and sales programme
Raw materials and
products for TiO
2
TiO
2
value chain
Paints, varnishes
and coatings
Plastics
Paper
Other
(construction)
• Titanium dioxide (TiO
2
) production
• Production of sulphuric acid
• 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 and red
gypsum - RCGIPS
Raw materials and
products for paints
Masterbatch value chain
Powder coating value
chain
Plastics
Other
(metalworking,
wood)
• Production of masterbatches and powder
varnishes
Raw materials and
products for Agro
Agro value chain
Other (agro)
• Production of products for agriculture, including
plant protection products and growth substrates
Raw materials and
products for
process equipment
Polymer value chain
Other (process
equipment)
• Group of fluorinated polymers and elastomers
whose properties make them useful for
transporting aggressive media and protecting
process and hardware equipment
Description of the TiO₂ value chain
Connection of the TiO₂ value chain with other products/value chains
TiO₂ pigment, an inorganic chemical valued for its optical properties, is essential in the paints,
coatings, plastics and paper industries. Our production process involves the complex splitting of
titanium-bearing ore using sulphuric acid, followed by filtration, calcination, and surface treatment
for specific industrial applications. A by-product is sold under the CEGIPS brand, and we integrate a
portion of the produced pigment into masterbatches and powder coatings at our BU Kemija Mozirje
plant.
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Figure 1: A more detailed view of the TiO
2
production process and value chain
Description of the upstream segment of the TiO₂ value chain
Key raw materials, particularly titanium-bearing ores, are sourced from a limited number of suppliers,
increasing dependency and supply risk. Energy-rich raw materials such as lime and stone meal are
procured locally due to high transport costs. Replacing natural gas with an alternative energy source
would entail significant costs related to production technology adaptation. Given the high daily
consumption and limited storage capacity, a constant and flexible supply is essential. Any supply
disruption could seriously impact production, including potential temporary shutdowns.
Description of the downstream segment of the TiO₂ value chain
TiO₂ customers, primarily industrial companies in the coatings, plastics, inks and paper sectors,
prioritise product compatibility, consistent quality and adaptable characteristics to align with their
formulations, production and regulatory frameworks. Reliable supply is crucial, with customers willing
to pay a premium for guaranteed availability, particularly in volatile markets. The increasing focus
on sustainability necessitates supplier adherence to environmental standards, compelling process
adjustments. Global TiO₂ demand is approximately 7 million tonnes per year.
Description of the masterbatch value chain
Description of the upstream part of the masterbatch value chain
The availability of suppliers is high for polymers, but limited for pigments, monobatches and
additives. Input materials represent a significant portion of the final product cost—up to two-thirds
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for white products, and even more for colour variants. TiO₂ pigment is one of the input raw materials
supplied from Celje to Mozirje. While the substitution of polymers is relatively straightforward,
replacing white pigments is conditional, and the substitution of pigments and monobatches is more
complex. The market for polymers and fillers is highly competitive, with Asian producers facing
constraints due to regulatory requirements, as well as the need for specific versions and shades.
Description of the downstream part of the masterbatch value chain
Customers are attracted by flexibility and adaptability to their specific requirements, particularly in
terms of quality, regulatory compliance and consistency. Standard products, such as white
masterbatches, are more sensitive to price than special products. In the case of white and colour
masterbatches, customers have greater influence over business decisions, as switching suppliers
involves additional testing costs.
Description of the powder coating value chain
Description of the upstream part of the powder coating value chain
Supplying small quantities of specific raw materials such as pigments and additives is challenging,
often involving long lead times and lower price competitiveness. Larger orders require storage and
carry the risk of price fluctuations by the time the materials are used. TiO₂ pigment is one of the
input raw materials supplied from Celje to Mozirje.
Description of the downstream powder coating value chain
Customers heavily influence business due to high competition among suppliers. Brand recognition
and strong customer relationships are crucial for maintaining profitable sales, as manufacturers offer
quality products at acceptable prices. Smaller customers are less price-sensitive, while larger
customers often seek lower prices and are willing to switch suppliers if they can achieve higher added
value. Close relationships between customers and suppliers are well-established, but customers
remain willing to switch suppliers for more favourable terms. Products are comparable among
suppliers and customers are aware of alternatives, which are usually less competitive due to poorer
functionality.
Description of the agro value chain
Description of the upstream part of the agro value chain
The main raw material is scrap copper and other copper products, such as copper ash. A steady
offtake and adequate hedging are essential for managing price volatility, despite the availability of
sufficient suppliers and volumes on the market.
Description of the downstream part of the agro value chain
Customers are price-conscious, as copper is a commodity with a constantly fluctuating market price,
which influences their perception of the value of products. To maintain loyalty, customers are offered
various incentives, such as shorter delivery times, discounts, introductory offers, quality
adjustments, extended payment terms and sample products. Although customers are aware of
alternatives, these are often of lower quality. Copper fungicides have a strong brand in the EU, as
Asian producers face quality issues. Despite the uniqueness of the products and the strong brand,
customers are generally loyal and not inclined to switch suppliers.
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[SBM-2] Interests and views of stakeholders
In the context of responsible impact, risk and opportunity management, it is crucial to identify
significant topics and interests of all key stakeholder groups. Significant are those topics that directly
or indirectly affect the company's ability to create, maintain or reduce environmental, social and
economic value for itself, its stakeholders and society at large. We reviewed our existing stakeholder
list, initially developed for GRI non-financial reporting in the 2022 and 2023 Annual Reports, during
dedicated workshops.
Our key stakeholders include owners and supervisors, employees, suppliers, customers, the local
community and other interested parties, such as sustainability report users and affected
stakeholders.
We engage with these stakeholders through various communication tools to ensure business
transparency, identify impacts, risks and opportunities, and facilitate stakeholder participation in our
local and global operations. The following table details our key stakeholders and the methods and
purposes of their engagement. Information is disseminated through these channels according to
established procedures and schedules, typically annually, quarterly, or monthly, or as needed.
Table 19: Key stakeholders and their relationship to the strategy and/or business model
Topics covered
Method of engagement
Purpose and outcome of
stakeholder engagement
EMPLOYEES
• Ensuring a safe working
environment
• Caring for the well-being of
employees
• Respect for labour and human
rights
• Cooperation with employee
representatives
• Training and skills
development
• Fair and equitable
remuneration
• Annual job satisfaction and
engagement surveys
• Developing performance and
competences
• Management communication
• Cinkarna Celje intranet
• Daily meetings with managers,
including the Minute for Safety
communication
• Whistleblowing platforms
(whistleblowers and
disclosures)
• CC UM system for submitting
useful proposals
• Improved safety and well-being of
employees
• Increased employee engagement
and satisfaction
• Optimising competences and
workforce planning
• Making the company more
attractive to new talent
• Improving two-way internal
communication between staff and
management
CUSTOMERS
• Terms of sale
• New product development
• Reliability and product quality
• Sustainability commitments
and customer requirements
• Product compliance
• Regular interviews with
customers
• Personal meetings and
customer visits
• Customer satisfaction analysis
• Distributors' Day
• Customer due diligence and
audits
• Sustainable customer codes
• Improving the technical and
sustainability parameters of
products through the improvement
process
• Meeting customer expectations
and requirements
• Building long-term relationships,
taking sustainability into account
• Keeping up to date with product
innovations
• Credible information about our
products
REGULATORS
Commission for the
Prevention of Corruption,
Securities Market Agency,
Audit Oversight Agency,
FURS, EU, national and
local authorities setting or
enforcing regulatory
requirements
• Whistleblower protection
• Political participation, lobbying
activity and lobbying
• Corruption and bribery
• Tax law and regulations
• Regulatory compliance
including compliance with
environmental permits
• Periodic reporting to the
regulator on various legal
requirements related to the
current state and events
subject to reporting
• Requirements for interpreting
the regulator’s requirements
and implementing legislation,
including interpretation of
regulations
• Transparency of operations in line
with legal requirements and
stakeholder expectations
• Implementing legal and regulatory
commitments at national or
supranational level
• Regulatory compliance
FINANCIAL
INSTITUTIONS AND
INVESTORS
• Financial and operational
performance
• Business strategy and annual
business plans
• Sustainability topics
• Periodic (quarterly) reporting
and Annual Reports
• Contacts and meetings with
investors and presentations at
stock exchange conferences
• Verification of the accuracy of
published and publicly disclosed
information
• Stakeholder confidence in publicly
disclosed information
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• Governance and regulatory
compliance
• Regular communication
between the investor
representative and investors
• Ongoing communication with
banks and other regulatory
authorities
• Completion of all types of dual
materiality assessment
surveys and questionnaires on
sustainability
• Co-creating key sustainability
topics
SUPPLIERS
• Overview of the purchasing,
quantity, quality, logistics,
sustainability conditions of
cooperation
• Review of the performance of
contracts, orders, deliveries,
complaints
• Addressing risks and
opportunities for process and
product improvement
• Informing key suppliers about
the code of sustainable
business practices
• Evaluating suppliers
• Carrying out in-depth analyses
of relevant subject areas of
work
• Regular discussions with
suppliers
• Supplier due diligence
• Review of available materials,
publications and supplier
reports
• Long-term cooperation with
partners
• Seeking opportunities and
addressing risks
• Implementing sustainability
commitments and ensuring
compliance with company
standards, including human rights
and environmental requirements
LOCAL COMMUNITIES
Members of local
communities, educational
institutions, interested
members of the public
• Managing environmental
impacts, including remediation
due to historical pollution
• Prevention and management
of industrial risks
• Participation in the education
system (competitions,
internships, excursions,
scholarships)
• Establishment of
communication channels with
local communities (social
advisory council, open days,
complaint handling)
• Participating in the sustainable
development of the region and
involving citizens in co-
determination
• Support for local sport, cultural
and social activities
• Company website and social
networks
• Complaints mechanisms to
monitor and resolve public
issues
• Surveys and focus groups to
gather feedback
• Dialogue with local
communities through
commissions, the Social
Council and municipal
meetings
• Sponsorships, open events
and cooperation with
educational and social
institutions
• Improving transparency and trust
between local communities and the
company
• Enhancing safety and sustainable
development in the local
environment
• Establishing a long-term dialogue
to monitor environmental impacts
• Better understanding of community
needs and adapting company
strategies based on feedback
• Actively contributing to the
development of the local
community through employment,
education and sponsorship
Given its chemical processing operations, which inherently involve chemical use, natural resource
consumption, waste management and environmental impact generation, Cinkarna Celje, d. d.
recognises nature as a critical, albeit silent, stakeholder. The inclusion of nature as a silent
stakeholder means that the company takes into account the impacts of its activities on the
environment and strives to reduce negative impacts and improve environmental practices. In doing
so, we consider the results of implemented monitoring of pollution and environmental conditions
(such as emissions of substances into the air, ambient air quality, emissions of substances into water
and surface water quality, noise emissions, waste management, soil and groundwater quality and
other reports that provide results on the state of the environment in the vicinity of the company)
and other scientific bases in this area (such as national and European standards for pollution
monitoring, BAT (Best Available Techniques) reference documents (BREF) for the chemical industry
under the EU IPPC Directive, ecotoxicological studies and others). We strive to reduce negative
impacts and improve environmental practices.
Employees covering individual professional areas collaborate with specific stakeholder groups as part
of their activities. Stakeholder views are addressed in the due diligence process. We are attentive to
all factors that could affect the achievement of the strategy and sustainability commitments,
compliance with policies and the business model (more details in chapter SBM-1 Strategy, business
model and value chain). The Management Board addresses the received information at a
Management Board meeting or a correspondence meeting, depending on the urgency and content of
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the matter. If necessary, the Management Board also informs the Supervisory Board about key
sustainability issues.
[SBM-3] Material impacts, risks and opportunities and their interaction with the strategy
and business model
In the process of developing the double materiality assessment, we identified the significant impacts,
risks and opportunities (IROs) based on the six ESRS thematic standards. The process is described
in point IRO-1.
All relevant IROs are derived from sub-topics and sub-sub topics within the ESRS. We have tailored
our disclosures to address specific topics related to the material IROs identified.
Below is a consolidated list of all material impacts, risks and opportunities (IROs) identified in the
2024 DMA. A more detailed overview of the material IROs for each topic, including the links between
our IROs on people and the environment, is provided under each individual topic standard. We have
aligned our timeframes—short, medium, and long term—with those set out in the strategy that
addresses the material IROs.
Table 20: Identified risks, opportunities, and impacts
ID
Impact
designation
Brief description
1
S1NV-2
Cooperation with the social partners
2
E2NV-12
Microplastics (Manufacture of masterbatches)
S2NV-1
Consequences of human rights violations and exploitation of child labour
3
E4NV-2
Change of land use within existing industrial areas (backfilling changes)
E4NV-7
Impact on species extinction at a global level
4
S1PV-6
Gender equality
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5
E4NV-3
Depletion of natural resources (ilmenite, limestone)
E4NV-4
Invasive plant proliferation
E5NV-2
Natural resources
(ilmenite, limestone)
S1PV-1
Providing jobs, including professionals in the local community
S1PV-3
Ensuring decent incomes for employees
S1PV-5
Right to disconnect, maternity leave, paternity leave
S1PV-9
Protecting employees in the event of workplace violence
S2PV-1
Providing jobs for suppliers
6
E4NV-6
Impact on the status of species in the Natura 2000 site
7
S1NV-3
Coordination with the social partners
S1NV-6
Consequences of violating diversity
S1NV-7
Consequences of violating data protection laws
S1PV-2
Ensuring a 40-hour workweek, % shift work, flexible working hours
S1PV-8
Managing disability in the workplace
8
E2NV-2
Pollution during transportation (spills, noise,
dust)
E4NV-10
Maintenance of barriers, green belts, alternative water use
E4NV-8
Impact on soil degradation due to gypsum filling, impact of groundwater on soil
E5PV-1
Use of copper from fishing nets
9
E2NV-11
Use of substances of very high concern (SVHC) in the company
S1NV-1
Ensuring social dialogue (agreement on pay policy with the trade union, workers' representatives on supervisory bodies, labour
director)
S1PV-4
Ensuring job security for employees
S3PV-1
Participation in the education system (competitions, internships, excursions, diplomas, master's degrees, scholarships).
S3PV-2
Channels for dialogue with affected communities established (advisory council, complaints resolution, open days)
10
G1PV-2
Whistleblower protection and mechanisms in place in accordance with the Reporting Persons Protection Act (ZZPri)
G1PV-3
Managing supplier relationships, including the company's payment practices
G1PV-4
Number of cases reported and investigated
11
E2NV-6
Discharges into rivers – sulphate
E3NV-3
Discharges into rivers – sulphate
S1NV-4
Care for safety and health
12
E3NV-1
Drinking water consumption
13
E4NV-5
Impact on surface water due to sulphate emissions
14
E2NV-5
Air emissions – noise
S3NV-5
Impacts on the local community (air and water emissions, noise, dust, waste)
15
E2NV-9
Impact on organisms in the watercourse due to historical pollution, water withdrawal and wastewater discharge
16
E2NV-1
Air emissions - SO
2
, H
2
S, other gases
E2NV-3
Other CO
2
emissions (process sources)
E2NV-4
Air emissions – solid particles (dust)
S3PV-3
Supporting local sport, cultural and other activities in the local community
17
E1NV-3
C0
2
emissions from non-renewable energy consumption – GHG emissions (Scope 1 and 2)
Other CO
2
emissions (except from non-renewable sources)
E1NV-4
C0
2
emissions from non-renewable energy use - GHG emissions (Scope 1 and 2)
18
G1PV-1
Employee satisfaction rate via satisfaction survey
19
E4NV-1
Impact of the company's activities on the loss of biodiversity due to climate change (CO
2
, high temperatures, low water levels)
20
E4NV-9
Impact of land sealing
21
E2NV-8
Soil contamination due to historical pollution
E5PV-2
White gypsum (CEGIPS) as a by-product reducing waste volume
22
E2NV-7
Discharges into groundwater in areas of historical pollution
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23
S3NV-2
Impact of historical contamination on the quality of produced food
24
S3NV-4
Consequences of industrial accidents
25
S1PV-7
Employee competence development
26
S1NV-5
Ensuring employee job satisfaction
27
E2NV-10
Use of substances of concern (SoC) in the company
28
S3NV-3
Consequences of flood waves in case of dam failure
29
E1NV-2
C0
2
emissions from non-renewable energy consumption – GHG emissions (Scope 1 and 2)
Other CO
2
emissions (except from non-renewable sources)
30
S3NV-1
Social impact of the company on the quality of life in the local community
31
E5NV-1
Waste (red gypsum, packaging, waste rags, oils, tyre chips and other hazardous and non-hazardous waste)
32
E1NV-1
C0
2
emissions from non-renewable energy consumption – GHG emissions (Scope 1 and 2)
Other CO
2
emissions (except from non-renewable sources)
E3NV-2
Water withdrawal from the river (lowering water levels)
Based on the identified material impacts, risks and opportunities, we have adjusted our strategies
with a focus on reducing emissions, optimising energy efficiency and improving the circular economy.
The identified social impacts have influenced the strengthening of measures for workplace safety,
employee social security and collaboration with affected communities (further details can be found
in section SBM-1: Strategy, business model and value chain).
During the reporting period, the company defined its material impacts, risks and opportunities
comprehensively for the first time in accordance with the requirements of ESRS and CSRD. As this
is the initial definition, no changes have been made compared to previous reports.
Adapting the strategy and business model of the company due to the identified material impacts,
risks and opportunities requires adjustments and the allocation of resources. The company has
assessed and included the current financial effects of the material risks and opportunities on its
financial position, performance and cash flows in the 2024-2028 business strategy. Additionally, it
has disclosed material risks and opportunities where there is a potential for material adjustments to
the carrying values of assets and liabilities, as presented in the related financial statements. This is
disclosed in section 6.1.6 Notes to the financial statements, point 25: Impact of climate change on
financial statements within the financial section of the Annual Report. Furthermore, the financial
effects of material risks and opportunities on the company’s financial position, performance and cash
flows over the short, medium and long-term periods, including reasonably expected timeframes for
these effects, are disclosed in this section and in section [E1]. This includes the short, medium, and
long-term changes to financial position, financial performance and cash flows that the company
anticipates as a result of its risk and opportunity management strategy. In this context, the company
has taken into account its five-year capital expenditure plans, noting that no asset disposals,
premature asset retirement or other forms of corporate restructuring are planned. The company
intends to finance its investments and strategic implementation through its own resources.
The company’s strategy and business model in relation to its ability to address material impacts and
risks and to capitalise on material opportunities were not considered as part of the resilience analysis,
as it has not yet been conducted.
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Table 21: Table of material impacts, risks and opportunities
ESRS standard
Material impacts,
risks and
opportunities
Impact, risk or
opportunity
Timeframe
Source
Description and impact on business model and/or strategy and
response
E1 - Climate
change
CO
2
emissions from
non-renewable sources
(Scope 1 and 2)
Negative impact
Short-term
Own activity
The company's entire activity is in a sector with a high climate impact,
which requires systematic measures to reduce greenhouse gas emissions
and switch to sustainable production processes. Investing in renewable
energy sources and energy efficiency.
Other CO
2
emissions
(process sources)
Negative impact
Short-term
Own activity
Reduced production
capacity due to limited
supply of process
water during dry
periods
Risk
Short-term
Own activity
Heavy precipitation due
to climate change
(floods, landslides) that
could impact dam
integrity
Risk
Long-term
Own activity
E2 - Pollution
SO
2
, H
2
S, other gases
released into the air
Negative impact
Long-term
Own activity
The company, through its production processes, causes emissions of
substances into the air and water. It uses substances that raise concerns
and pose significant risks, which also impact health and the environment.
Mitigation: Through already implemented cleaning techniques in
compliance with BAT and the systematic measures taken, the company
prevents and reduces environmental pollution. With further investments,
it aims to reduce impacts, implement measures to mitigate them, avoid or
reduce the use of the aforementioned hazardous substances, and
minimize risks that may arise from changes.
Air emissions – solid
particles (dust)
Negative impact
Long-term
Own activity
Other CO
2
emissions
(process
sources)
Negative impact
Short-term
Own activity
Discharges into rivers -
sulphate
Negative impact
Long-term
Own activity
Discharges into
groundwater in areas
of historical
contamination
Negative impact
Medium-term
Own activity
Use of substances of
concern (SoC)
Negative impact
Long-term
Own activity
Use of substances of
very high concern
(SVHC)
Negative impact
Long-term
Own activity
Risk of changes in
legislation regarding
Risk
Long-term
Own business and value
chain
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the production and use
of our products.
E3 - Water
resources
Withdrawal of water
from the river
Negative impact
Long-term
Own activity
The production processes require large quantities of water, which is
withdrawn from the watercourse.
Mitigation: Investments in providing an alternative water source and
reducing impacts and risks.
Discharges into the
river - sulphate
Negative impact
Long-term
Own activity
Negative impact on the
company's business
due to limited supply of
process water during
dry periods
Risk
Long-term
Own activity
E5 - Circular
economy
Waste: filling of red
gypsum
Negative impact
Long-term
Own activity
The titanium dioxide production process produces waste (red gypsum).
Mitigation: Measures are implemented to minimise waste generation and
reduce the risk of non-disposal.
Negative impacts on
the company's
business due to the
inability to remove red
gypsum
Risk
Long-term
Own activity
S1 - Own
workforce
Ensuring social
dialogue
Negative impact
Short-term
Own activity
The company has two representative trade unions and a Works Council,
and there is a tradition of social dialogue. In the event of a reduction or
disruption of the social dialogue, we are exposed to potential conflicts that
could lead to a halt in production or a strike.
Mitigation: Ensuring continuous, respectful, and open social dialogue.
Ensuring job security
for employees
Positive impact
Long-term
Own activity
A special emphasis is placed on social security and associated benefits,
ensuring stable employment with minimal risk of layoffs and competitive
salaries. In the event of deterioration, this could lead to the loss of key
employees.
Mitigation: Offering permanent contracts to employees, ensuring a good
working environment, and maintaining a stable salary policy.
Ensuring safety and
health at work
Negative impact
Long-term
Own activity
As a company in the chemical industry, working with hazardous
substances and complex technological processes is an inevitable part of
production, which have a negative impact on the health and safety of
employees, including potential fatalities.
Mitigation: Continuous strengthening of the OSH management system.
Ensuring employee job
satisfaction
Negative impact
Long-term
Own activity
Employee job satisfaction at Cinkarna Celje is a key factor impacting
employee motivation, productivity and the long-term sustainability of the
business model. A decline in job satisfaction could lead to increased
staff turnover, reduced productivity and diminished employee innovation.
Mitigation: Monitoring employee satisfaction, improving working
conditions, implementing training programmes, ensuring fair
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remuneration, fostering clear communication and supporting work-life
balance.
Undeveloped
succession policy and
inadequate employee
competencies
Risk
Long-term
Own activity
Demographic trends and an open labour market have led to an increase
in turnover in recent years, as the company has recruited a large number
of new staff, which, due to a lack of skills, can have a negative impact on
business continuity, productivity and the company's adaptability to market
and technological changes.
Mitigation: Systematic succession planning, staff education and training
and knowledge transfer.
Staff shortages,
untimely replacement
and improper work
organisation
Risk
Long-term
Own activity
Identified risks can lead to disruptions in production, reduced operational
efficiency, increased strain on existing staff, further impacting team
performance, increasing turnover and reducing the long-term
sustainability of work processes.
Mitigation: Systematic human resources planning, timely replacement
of key staff and optimisation of work processes.
S3 - Affected
communities
Negative impact on the
company’s operations
due to the inability to
remove red gypsum
(local community does
not grant approval for
planning documents)
Risk
Medium-term
Own activity
Restrictions in spatial planning may lead to additional environmental costs
and affect the long-term sustainability of the company's operations.
Mitigation: Active collaboration with local communities and authorities to
find sustainable solutions for the disposal of red gypsum. Preparation of
alternative plans for its processing or storage in compliance with
environmental regulations.
Increased costs due to
the remediation of
historical contamination
Risk
Long-term
Own activity
The costs of remediating past pollution impact the company's financial
performance and require strategic resource planning.
Mitigation: Gradual remediation in accordance with national
environmental standards.
Negative impact on
business due to heavy
rainfall - floods,
landslides (impact on
the increased risk of
failure of the Bukovžlak
and Za Travnik dams)
Risk
Long-term
Own activity
Extreme weather events can cause material damage and increase the
costs of securing and maintaining dam structures.
Mitigation: Regular maintenance and monitoring
Event - industrial
accidents
Risk
Long-term
Own activity
The risk of accidents requires continuous improvements in safety
measures, investments in technology, and stricter monitoring
mechanisms.
Mitigation: Conducting regular safety inspections and employee
training. Introducing state-of-the-art safety technologies and accident
prevention systems. Improving emergency response plans and
collaborating with local emergency and rescue services.
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Participation in the
education system
(competitions,
internships, excursions,
diplomas, master's
degrees, scholarships).
Positive impact
Short-term
Own activity
Strengthening connections with educational institutions facilitates the
recruitment of new talent and enhances the company's reputation in the
local community.
Mitigation: Expanding collaboration programmes with educational
institutions, increasing the number of scholarships and providing
additional opportunities for student internships. Promoting technical
careers among young people.
Established channels
for dialogue with
affected communities
(Advisory council,
complaint resolution,
open days)
Positive impact
Short-term
Own activity
Active public involvement reduces conflict and increases the social
acceptability of the company.
Mitigation: Broadening the scope for local community participation and
involvement in decision-making processes. Increase transparency in the
provision of information on the company's impacts on the environment
and the local population.
Support for local
sports, cultural and
other activities in the
local community
Positive impact
Short-term
Own activity
It contributes to improving the company's reputation and strengthening
ties with the local community.
Mitigation: Further encouraging sustainable and long-term collaboration
with local organisations.
G1- Business
conduct
Whistleblower
protection and
mechanisms put in
place
Positive impact
Long-term
Own activity
The established whistleblower protection mechanisms positively impact
the company's business model, as they enhance transparency and
business integrity, reduce operational and legal risks and strengthen the
trust of employees and stakeholders. In doing so, the company fosters a
safe and ethical working environment and solidifies its long-term business
stability.
Managing supplier
relationships, including
payment practices
Positive impact
Long-term
Value chain
Managing relationships with partners in the value chain is one of the key
work processes to achieve the company's objectives, ensuring a stable,
quality and reliable supply of raw materials, products and services, and
thus the resilience of chains to risks and the continuity of the production
process.
Number of reported
and investigated cases
of corruption and
bribery
Positive impact
Long-term
Own activity
With the established mechanisms, the company transparently and clearly
monitors compliance. This strengthens business integrity, reinforces
stakeholder trust and ensures adherence to legislation and internal rules.
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5.1.4 [IRO] Impact, risk and opportunity management
[IRO-1] Description of the process to identify and assess material impacts, risks and
opportunities
The double materiality assessment (DMA) process was carried out in 2024. The DMA involves the
entire company across all locations and the value chain. In identifying and assessing its significant
impacts, risks and opportunities, the company took into account the understanding of the
organisational context in order to examine potential changes to the business model, legislative
requirements and the expectations of key stakeholders (as detailed in section SBM-1 Strategy,
business model and value chain).
To create the list of material sustainability issues that we assessed in our double materiality
assessment (DMA) process, we referred to the sustainability topics outlined in the ESRS 2 (AR) 16
requirements, internal analyses conducted during workshops with employees and the sustainability
team (experts in specific areas), and consultations with an external advisor.
In the assessment, we also considered legislative requirements, standards, available research and
trends in the areas of the environment, social issues, governance and the market, as well as analyses
of the economic, political, legislative and operational environment, findings from internal and external
audits, inspections and other sources. A total of 60 sustainability issues were identified.
Subsequently, the sustainability team developed criteria, classified and assessed these issues from
both the perspective of impacts on people and nature, and financial materiality. A total of 33 material
risks and opportunities (IROs) were identified and confirmed by the head of the sustainability team,
the Management Board, the Supervisory Board and the Audit Committee.
The identified impacts were categorised as actual or potential (negative or positive), and their
timeframe was determined as short, medium or long-term. We considered the interests of all
identified key stakeholders (internal and external) based on environmental/human rights impact
analyses, past events, reviews and interviews conducted in 2024 and partially in 2023. Surveys were
also conducted with key stakeholders, including affected parties around the company and all
significant stakeholders such as employees, owners, supervisors, suppliers, customers, the local
community and shareholders. Employee satisfaction and engagement survey results were also
considered. Our evaluation also took into account legislative requirements, standards, available
research and trends in environmental, social, governance and market areas.
For each identified negative and positive impact, we defined criteria and assessed the materiality of
the impact based on its severity. The severity of a negative impact was broken down into scope,
extent and irreversibility, while the severity of a positive impact was assessed based on scope and
extent. The criteria were designed to be as standardised and comparable as possible and were
documented. Each individual impact was assessed on three levels (low, medium, high). We also
assessed the likelihood of the impact occurring (from 0 to 1). Based on the assessments, we
calculated the severity of the impact and established a threshold (criteria) for its materiality. An
impact is considered material if the materiality score is 5 or more on a 9-point scale. By conducting
a thorough review, we performed an assessment of the impacts of the company's own operations
and the value chain (VC).
The company manages risks and opportunities in accordance with the Rules on impact, risk and
opportunity management at Cinkarna Celje, d. d. The impact, risk and opportunity management
process is a dynamic management process at all levels of the company, involving all employees. It
forms the basis of our integrated management system. This process ensures proper assessment of
the company’s impacts on people and the environment, the effects of social and environmental
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issues, events and uncertainties on the company, and the management of significant impacts and
effects (risks/opportunities). This is a recurring process encompassing:
• Identification/recognition of the company’s impacts on people and the environment and of
the effects of social and environmental issues, events and uncertainties on the company
which may affect the achievement of one or more of the company’s objectives (strategy and
corporate policies);
• Impact and effect analysis;
• Determination of the materiality of the company’s impacts on people and the environment;
• Risk assessment – negative financial effects on the company;
• Identification of opportunities – positive financial effects on the company;
• We pay attention to all factors that could affect the achievement of the strategy and
sustainability commitments, compliance with policies, legal and other requirements, the
company’s reputation, revenue, costs and resources, quality, etc.;
• The process is proportionate to the nature, scale and complexity of the impacts and effects
present in the company’s operations;
• The assessment is forward-looking and considers the assumption of the company’s long-term
operation;
• The assessment includes both current and potential short, medium and long-term impacts,
risks and opportunities;
• The results of the assessment are used as an integral part of management processes and
decision-making;
• The assessment process is documented;
• The adequacy of the assessment is regularly reviewed in light of changes in the business
environment and the company’s operations.
Based on the potential impact on the value of the company or its resilience, we address:
• Corporate risks – risks with significant negative consequences for the company. Their
management falls within the remit of the management of business units and departments,
the Management Board and the Supervisory Board. They are managed through
implementation objectives, development tasks or development projects;
• Operational risks – risks that may affect the functioning of individual units but do not pose a
significant risk to the company as a whole. They are part of day-to-day operations and the
execution of work processes. They are managed at the level of one or more organisational
units.
The assessment is based on the estimated frequency of occurrence – the number of events within a
given time period (estimated based on past frequency or future expectations), the financial impact
of the risk materialising on costs and revenues (quantified in EUR), and the mitigating effect on
financial consequences (e.g. insurance…, quantified in EUR). The materiality of the risk or its financial
impact on the company has been determined based on a set threshold, which is equal to or greater
than 1% of the revenue from the company’s annual sales plan for the current reporting year, and
represents the threshold for corporate risks.
All impacts, risks and opportunities that reached or exceeded the materiality threshold were identified
as significant sustainability topics. The completeness and relevance of these topics were also verified
through a stakeholder survey. In this way, we identified and defined the key sustainability topics
reported in this report. These have been taken into account in the preparation of the sustainability
strategy and are already partially reflected in the existing policies, which will also be further updated.
The company has taken measures and set objectives for this purpose.
The process of identifying impacts, risks and opportunities is a continuous process, carried out
regularly (through careful review), and is defined by the above-mentioned Rules. It will be further
developed and refined in the coming years.
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[IRO-2] Disclosure requirements in ESRS covered by the company’s sustainability
statement
Based on the results of the double materiality assessment (material impacts, risks and opportunities),
we have identified the key sustainability topics that are included in the Sustainability statement and
are also addressed by the adopted Sustainability strategy. The process of identifying and assessing
impacts, risks and opportunities is explained in more detail in section IRO-1 Description of the process
to identify and assess material impacts.
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Table 22: List of disclosure requirements in ESRS covered by the company's Sustainability statement
Standard and/or important topic
ESRS topic
Page
General disclosures
General disclosures
[BP-1] General basis for preparation of sustainability statements
36
[BP-2] Disclosures in relation to specific circumstances
36
Governance
[GOV-1] Role of administrative, management and supervisory bodies
40
[GOV-2] Information provided to and sustainability matters addressed
by the undertaking’s administrative, management and supervisory bodies
47
[GOV-3] Integration of sustainability-related performance in incentive
schemes
47
[GOV-4] Statement on due diligence
48
[GOV-5] Risk management and internal controls over sustainability reporting
48
Strategy
[SBM-1] Strategy, business model and value chain
49
[SBM-2] Interests and views of stakeholders
59
[SBM-3] Material impacts, risks and opportunities and their interaction with
the strategy and business model
61
Impact, risk and opportunity
management
[IRO-1] Description of the processes to identify and assess material impacts,
risks and opportunities
68
[IRO-2] Disclosure requirements in ESRS covered by the undertaking’s
sustainability statement
70
[E - 1] Climate change
Climate change adaptation,
mitigation and energy
[E1-1] Transition plan for climate change mitigation
92
[E1-2] Policies related to climate change mitigation and adaptation
96
[E1-3] Actions and resources in relation to climate change policies
97
[E1-4] Targets related to climate change mitigation and adaptation
101
[E1-5] Energy consumption and mix
104
[E1-6] Gross Scopes 1, 2, 3 and total GHG emissions
106
[E1-7] GHG removals and GHG mitigation projects financed through carbon
credits
110
[E1-8] Internal carbon pricing
110
[E1-9] Anticipated financial effects from material physical and transition risks
and potential climate-related opportunities
110
[E - 2] Pollution
Pollution of air, water, soil, use of
substances of concern and of high
concern
[E2-1] Pollution-related policies
117
[E2-2] Pollution-related measures and sources
119
[E2-3] Pollution targets
121
[E2-4] Air, water and groundwater pollution
123
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[E2-5] Substances of concern and substances of very high concern
126
[E2-6] Potential financial effects from pollution-related impacts, risks and
opportunities
127
[E - 3] Water resources
Water
[E3-1] Policies related to water resources
129
[E3-2] Actions and resources related to water resources
130
[E3-3] Targets related to water resources
130
[E3-4] Water consumption
131
[E3-5] Potential financial effects from water resources-related impacts, risks
and opportunities
131
[E - 5] Resource use and circular
economy
Waste
[E5-1] Policies related to circular economy
133
[E5-2] Actions and resources related to circular economy
134
[E5-3] Targets related to the circular economy
134
[E5-4] Resource inflows
135
[E5-5] Resource outflows
135
[S - 1] Own workforce
Working conditions, equal treatment
and equal opportunities for all
[S1-1] Policies related to own workforce
140
[S1-2] Processes for engaging with own workers and workers’
representatives about impacts
144
[S1-3] Processes to remediate negative impacts and channels for own
workers to raise concerns
144
[S1-4] Taking action on material impacts on own workforce and approaches
to mitigating material risks and pursuing material opportunities related to
own workforce and effectiveness of those actions
145
[S1-5] - Targets related to managing material
negative impacts, advancing positive impacts and managing material risks
and opportunities
149
[S1-6] Characteristics of the company's employees
149
[S1-7] Characteristics of non-employee workers in the company’s own
workforce
150
[S1-8] Collective bargaining coverage and social dialogue
151
[S1-9] Diversity metrics
151
[S1-10] Adequate wages
152
[S1-11] Social protection
152
[S1-12] Persons with disabilities
153
[S1-13] Training and skills development metrics
153
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[S1-14] Health and safety metrics
154
[S1-15] Work-life balance metrics
155
[S1-16] Compensation metrics (pay gap and total compensation)
155
[S1-17] Incidents, complaints and severe human rights impacts
155
[S - 3] Affected communities
Economic, social and cultural rights
of communities
[S3-1] Policies related to affected communities
158
[S3-2] Processes for engaging with affected communities about impacts
160
[S3-3] Processes to remediate negative impacts and channels for affected
communities to raise concerns
160
[S3-4] Taking action on material impacts on affected communities and
approaches to mitigating material risks and pursuing material opportunities
related to affected communities, and effectiveness of those actions
162
[S3-5] Targets related to managing material negative impacts, advancing
positive impacts and managing material risks and opportunities
164
[G - 1] Business conduct
Whistleblower protection, supplier
relationship management, corruption
and bribery
[IRO-1] Description of the processes to identify
and assess material impacts, risks and opportunities
165
[G1-1] Business conduct policies and corporate culture
166
[G1-2] Management of relationships with suppliers
168
[G1-3] Prevention and detection of corruption or bribery
169
[G1-4] Confirmed incidents of corruption or bribery
170
[G1-5] Political influence and lobbying activities
170
[G1-6] Payment practices
170
Based on the double materiality analysis conducted, we have determined that the sustainability matters of the thematic ESRS standards [E-4] Biodiversity
and ecosystems, [S-2] Workers in the value chain, and [S-4] Consumers and end-users are not material. Therefore, we are not disclosing them in the
company's 2024 Annual Report. Further information is provided in the section Material impacts, risks and opportunities and their interaction with the
strategy and business model [SBM-3].
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5.2 [E] Environmental information
5.2.1 Report on environmentally sustainable economic activities and investments
– ESRS 2
REPORT ON ENVIRONMENTALLY SUSTAINABLE ECONOMIC ACTIVITIES AND
INVESTMENTS OF CINKARNA CELJE d. d. FOR 2024
Cinkarna Celje, d. d., discloses information regarding how and to what extent its activities are
associated with economic activities, in accordance with Commission Delegated Regulation (EU)
2023/137, that are considered environmentally sustainable under Articles 3 and 9 of the Taxonomy
Regulation (Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June
2020 on the establishment of a framework to facilitate sustainable investment, Commission
Delegated Regulation 2021/2139 of 4 June 2021, and amending Regulation (EU) 2019/2088). The
disclosure of information relates to Commission Delegated Regulation (EU) 2023/2486 of 27 June
2023 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by
establishing the technical screening criteria for determining the conditions under which an economic
activity qualifies as contributing substantially to the sustainable use and protection of water and
marine resources, to the transition to a circular economy, to pollution prevention and control, or to
the protection and restoration of biodiversity and ecosystems and for determining whether that
economic activity causes no significant harm to any of the other environmental objectives and
amending Commission Delegated Regulation (EU) 2021/2178 as regards specific public disclosures
for those economic activities.
The EU Taxonomy addresses six areas of environmental objectives:
• climate change mitigation,
• climate change adaptation,
• sustainable use and protection of water and marine resources,
• transition to a circular economy,
• pollution prevention and control,
• protection and restoration of biodiversity and ecosystems.
In 2024, we refined our internal structures by training, familiarising and examining all prescribed
Regulations and Directives, enhancing the efficiency and reliability of taxonomy reporting. This
process was aligned with evolving market practices and guidance, including the European
Commission’s Frequently Asked Questions (FAQs).
Based on new information published in 2024, we adjusted our investment reporting related to capital
expenditures, as detailed below. All activities have been classified as taxonomy-eligible but not
taxonomy-aligned, due to challenges in obtaining appropriate evidence along the supply and sales
chain. We will seek to acquire the necessary documentation, thereby changing the status of activities
that can be classified as taxonomy aligned.
Cinkarna Celje, d. d.’s data is aggregated at the level of individual taxonomy-defined activities, in
accordance with relevant EU Regulations, including the NACE classification. Indicators are calculated
based on definitions in annex to Regulation 2020/852 – Key performance indicators of non-financial
undertakings. Company-level data derives from financial statements, and activity-level data from
the information system. To avoid double counting, we track revenues from the sale of products or
services and operating expenditures (OpEx) in relation to specific activities, operations and tasks.
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Proportion of turnover derived from products or services associated with taxonomy-
aligned economic activities
Cinkarna Celje, d. d., is specialised in the production and marketing of titanium dioxide, an activity
that has not yet been assessed in terms of its alignment with the taxonomy, meaning it is not listed
among the taxonomy-eligible activities for achieving climate goals. However, this does not imply that
its operations are conducted without a high degree of environmental responsibility and
decarbonisation efforts, nor that it lacks actual or potential significant contributions to the
decarbonisation of the economy (particularly as an enabling activity for the construction sector).
Cinkarna Celje, d. d.'s operations are complemented by a broad range of other products, including
powder coatings, masterbatches, agricultural products, chemical process equipment manufacturing,
and the production of sulphuric acid and gypsum as by-products, through which the company also
seeks opportunities for taxonomy-aligned revenues. This activity also has a strong impact on the
circular economy. For disclosures and the presentation of indicators, we used the formats specified
in EU Regulation 2023/2486.
In the calculation of the indicators presented in the tables, there has been no duplication of economic
activities, as, following a review, they meet the criteria for substantial contribution to a single
environmental objective. Each activity generating taxonomy-eligible revenue has distinct
implementation obligations.
The proportion of turnover under point (a) of Article 8(2) of Regulation (EU) 2020/852 is calculated
as the portion of net revenue derived from products or services, including intangibles, associated
with economic activities aligned with the taxonomy (numerator), divided by net revenue
(denominator), as defined in point (5) of Article 2 of Directive 2013/34/EU.
Revenue is recognised in accordance with Article 82(a) of the International Accounting Standard.
For the key performance indicators referred to in the first subparagraph, the portion of net revenue
derived from products and services related to economic activities adapted to climate change under
Article 11(1)(a) of Regulation (EU) 2020/852 and Annex II to Delegated Regulation (EU) 2021/2139
shall be excluded from the numerator, unless those activities:
a) are considered to be enabling activities in accordance with Article 11(1)(b) of Regulation
2020/852,
b) are themselves aligned with the taxonomy.
The taxonomy-eligible activities, which are shown in the table Proportion of turnover derived from
products or services associated with taxonomy-aligned economic activities are:
• Collection and transport of non-hazardous waste 2.3
• Hotels, holiday, camping grounds and similar accommodation 2.1
• Electricity generation using solar photovoltaic technology 4.1
In section 2.3, on the collection and transport of non-hazardous waste, we have added a circular
economy activity related to the marketing of white gypsum, which is produced as a by-product in
the production of titanium dioxide and is successfully marketed. The value is not comparable to last
year’s results, which included material recovery that does not meet all the criteria for taxonomy-
aligned activities, despite being a typical circular economy activity. Additionally, we have included
the activity Provision of short-term tourist accommodation with or without related services in the
report. Offering employees the opportunity to use holiday accommodation significantly impacts their
satisfaction, work capacity, engagement and loyalty to the company. Significant growth is reflected
in energy production using photovoltaic technology. The fact that we are investing relatively large
financial resources in the construction of solar power plants significantly influences the calculation of