Kemična industrija Celje, d. d.
Kidričeva 26, SI-3001 Celje, Slovenia
Annual Report
of Cinkarna Celje d.d.
for 2025
April 2026
1
Index
1 Analysis of the Company’s development, business performance, and position .......................... 4
1.1 Concise overview of performance and alternative performance measures ......................................... 4
1.2 Letter from the Management Board ............................................................................................. 5
1.3 Report of the Supervisory Board.................................................................................................. 8
1.4 Internal audit report ................................................................................................................ 11
1.5 Highlighted events ................................................................................................................... 12
1.6 Company profile ...................................................................................................................... 15
1.6.1 Organisational structure ........................................................................................................ 15
2 Company management ............................................................................................................ 16
2.1 Corporate Governance Statement .............................................................................................. 16
2.2 Risk management ................................................................................................................... 19
2.3 Functioning of the General Meeting and shareholders' rights ......................................................... 26
3 Strategic directions and future development ........................................................................... 27
3.1 Strategic objectives and directions ............................................................................................ 27
3.2 Plans for 2026 ........................................................................................................................ 27
3.3 Completed and planned investments.......................................................................................... 28
3.3.1 Completed investments ......................................................................................................... 28
3.3.2 Planned investments ............................................................................................................. 29
3.4 Research and development ....................................................................................................... 29
4 Operations ............................................................................................................................... 31
4.1 Operating result ...................................................................................................................... 33
4.2 Expenses and costs ................................................................................................................. 33
4.3 Assets and resources ............................................................................................................... 34
4.4 Shares and dividends ............................................................................................................... 37
5 Sustainability Statement .......................................................................................................... 39
5.1 ESRS 2 General disclosures ...................................................................................................... 39
5.1.1 [BP] Basis for preparation ...................................................................................................... 39
5.1.1.1 [BP-1] General basis for preparation of sustainability statements ................................. 39
5.1.1.2 [BP-2] Disclosures in relation to special circumstances ................................................ 40
5.1.2 [GOV] Governance ................................................................................................................ 43
5.1.2.1 [GOV-1] Role of administrative, management and supervisory bodies ........................... 43
5.1.2.2 [GOV-2] Information provided to the administrative, management and supervisory bodies
of the Company and sustainability matters considered by those bodies .......................................... 49
5.1.2.3 [GOV-3] Integration of sustainability-related performance into incentive schemes .......... 50
5.1.2.4 [GOV-4] Due diligence statement ............................................................................. 51
5.1.2.5 [GOV-5] Risk management and internal controls for sustainability reporting .................. 51
5.1.3 [SBM] Strategy..................................................................................................................... 52
5.1.3.1 [SBM-1] Strategy, business model and value chain ..................................................... 52
5.1.3.2 [SBM-2] Interests and views of stakeholders ............................................................. 62
5.1.3.3 [SBM-3] Material impacts, risks and opportunities and their interaction with the strategy
and business model ................................................................................................................. 64
5.1.4 [IRO] Impact, risk and opportunity management ...................................................................... 72
5.1.4.1 [IRO-1] Description of the process to identify and assess material impacts, risks and
opportunities .......................................................................................................................... 72
5.1.4.2 [IRO-2] Disclosure requirements in ESRS covered by the Company’s Sustainability
Statement 73
[GOV-1] Role of administrative, management, and supervisory bodies; p. 42–46 ............................ 78
[GOV-4] Due diligence statement; p. 49–50 ............................................................................... 78
[SBM-1] Strategy, business model and value chain; p. 51 ............................................................ 78
5.2 [E] Environmental information .................................................................................................. 83
5.2.1 Report on environmentally sustainable economic activities and investments – ESRS 2 ................... 83
5.2.1.1 Proportion of turnover derived from products or services associated with taxonomy-aligned
economic activities – disclosure for 2025.................................................................................... 85
5.2.1.2 Proportion of capital expenditure in products or services related to taxonomy-eligible
economic activities .................................................................................................................. 86
5.2.1.3 Proportion of capital expenditure related to products or services associated with taxonomy-
eligible economic activities – disclosure for 2025 ......................................................................... 88
5.2.1.4 Proportion of investments in working capital related to products or services associated with
economic activities eligible under the taxonomy .......................................................................... 89
5.2.1.5 Proportion of investments in working capital related to products or services associated with
taxonomy-eligible economic activities – disclosure for 2025 .......................................................... 91
2
5.2.1.6 Summary tables of material contributions by activity .................................................. 92
5.2.1.7 Information referred to in Article 8 (6) and (7) on disclosure of nuclear energy and gas-
related activities (Annex XII of Commission Delegated Regulation EU 2022/1214). ......................... 93
5.2.2 [E1] Climate change .............................................................................................................. 96
5.2.2.1 [GOV-3] Integration of sustainability-related performance in incentive schemes ............. 96
5.2.2.2 [SBM-3] Material impacts, risks and opportunities and their interaction with strategy and
business model ....................................................................................................................... 96
5.2.2.3 [IRO-1] Description of the processes to identify and assess material climate-related
impacts, risks, and opportunities ............................................................................................. 101
5.2.2.4 [E1-1] Transition Plan for climate change mitigation ................................................. 105
5.2.2.5 [E1-2] Policies related to climate change mitigation and adaptation ............................ 109
5.2.2.6 [E1-3] Actions and resources related to climate change policies ................................. 111
5.2.2.7 [E1-4] Climate change mitigation and adaptation objectives ...................................... 114
5.2.2.8 [E1-5] Energy consumption and mix ....................................................................... 121
5.2.2.9 [E1-6] Gross Scopes 1, 2, 3 and total GHG emissions ............................................... 123
5.2.2.10 [E1-7] GHG removal and GHG reduction projects financed with carbon credits ......... 129
5.2.2.11 [E1-8] Internal carbon pricing ............................................................................ 129
5.2.2.12 [E1-9] Anticipated financial effects from material physical and transition risks and
potential climate-related opportunities ..................................................................................... 129
5.2.3 [E2] Pollution ..................................................................................................................... 136
5.2.3.1 [E2 IRO-1] Description of the process to identify and assess material pollution-related
impacts, risks and opportunities .............................................................................................. 136
5.2.3.2 [E2-1] Policies related to pollution .......................................................................... 139
5.2.3.3 [E2-2] Actions and resources related to pollution ...................................................... 141
5.2.3.4 [E2-3] Targets related to pollution .......................................................................... 143
5.2.3.5 [E2-4] Pollution of air, water and groundwater ......................................................... 146
5.2.3.6 [E2-5] Substances of concern and substances of very high concern ............................ 150
5.2.3.7 [E2-6] Anticipated financial effects from material pollution-related risks and opportunities
152
5.2.4 [E3] Water resources .......................................................................................................... 154
5.2.4.1 [IRO-1] Description of the process to identify and assess material impacts, risks, and
opportunities related to water resources .................................................................................. 154
5.2.4.2 [E3-1] Water resource policies ............................................................................... 155
5.2.4.3 [E3-2] Actions and resources related to water resources ........................................... 156
5.2.4.4 [E3-3] Targets related to water resources ............................................................... 156
5.2.4.5 [E3-4] Water consumption ..................................................................................... 157
5.2.5 [E5] Resource use and circular economy ................................................................................ 159
5.2.5.1 [IRO-1] Description of the process to identify and assess material impacts, risks and
opportunities related to resource use and circular economy ........................................................ 159
5.2.5.2 [E5-1] Policies related to circular economy .............................................................. 160
5.2.5.3 [E5-2] Actions and resources related to resource use and circular economy ................. 161
5.2.5.4 [E5-3] Targets related to resource use and circular economy ..................................... 162
5.2.5.5 [E5-4] Resource inflows ........................................................................................ 163
5.2.5.6 [E5-5] Resource outflows ...................................................................................... 163
5.3 [S] Social information ............................................................................................................ 166
5.3.1 [S1] Own workforce ............................................................................................................ 166
5.3.1.1 [SBM-3] Material impacts, risks and opportunities .................................................... 166
5.3.1.2 [S1-1] Policies related to own workforce ................................................................. 168
5.3.1.3 [S1–2] Processes for engaging with own workers and workers' representatives about
impacts 171
5.3.1.4 [S1–3] Processes to remediate negative impacts and channels for own workers to raise
concerns 172
5.3.1.5 [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 173
5.3.1.6 [S1–5] Targets related to managing material negative impacts, advancing positive
impacts, and managing material risks and opportunities ............................................................ 177
5.3.1.7 [S1–6] Characteristics of the Company's employees ................................................. 178
5.3.1.8 [S1–7] Characteristics of non-employee workers in the Company’s own workforce ....... 179
5.3.1.9 [S1–8] Collective bargaining coverage and social dialogue ......................................... 179
5.3.1.10 [S1–9] Diversity metrics ................................................................................... 180
5.3.1.11 [S1–10] Adequate wages .................................................................................. 180
5.3.1.12 [S1–11] Social protection .................................................................................. 181
5.3.1.13 [S1–12] Persons with disabilities ........................................................................ 181
5.3.1.14 [S1–13] Training and skills development metrics .................................................. 182
5.3.1.15 [S1–14] Health and safety metrics ..................................................................... 182
5.3.1.16 [S1–15] Work-life balance metrics ...................................................................... 184
5.3.1.17 [S1–16] Remuneration metrics (pay gap and total remuneration) .......................... 184
5.3.1.18 [S1–17] Incidents, complaints and severe human rights impacts............................ 185
5.3.2 [S3] Affected communities ................................................................................................... 186
3
5.3.2.1 [S3-SBM3] Material impacts, risks and opportunities and their interaction with strategy and
business model ..................................................................................................................... 186
5.3.2.2 [IRO - 1] Description of processes to identify and assess material impacts, risks and
opportunities related to S3 ..................................................................................................... 187
5.3.2.3 [S3-1] Policies related to affected communities ........................................................ 188
5.3.2.4 [S3-2] Processes for engaging with affected communities about impacts ..................... 190
5.3.2.5 [S3-3] Processes to remediate negative impacts and channels for affected communities to
raise concerns ...................................................................................................................... 190
5.3.2.6 [S3-4] Taking action on material impacts on affected communities, and approaches to
managing material risks and pursuing material opportunities related to affected communities, and
effectiveness of those actions ................................................................................................. 191
5.3.2.7 [S3-5] Targets related to managing material negative impacts, advancing positive impacts,
and managing material risks and opportunities ......................................................................... 194
5.4 [G1] Business conduct ........................................................................................................... 197
5.4.1 [IRO-1] Description of the processes to identify and assess material impacts, risks and opportunities
197
5.4.2 [G1-1] Business conduct policies and corporate culture ........................................................... 198
5.4.3 [G1-2] Management of relationships with suppliers ................................................................... 200
5.4.4 [G1-3] Prevention and detection of corruption or bribery ......................................................... 202
5.4.5 [G1-4] Confirmed incidents of corruption or bribery ................................................................ 202
5.4.6 [G1-6] Payment practices .................................................................................................... 203
6 Accounting report ...................................................................................................................204
6.1 Financial statements .............................................................................................................. 204
6.1.1 Statement of financial position of the Company ...................................................................... 204
6.1.2 Income statement for the period from 1 January to 31 December ............................................. 206
6.1.3 Statement of other comprehensive income for the period from 1 January to 31 December ........... 207
6.1.4 Statement of changes in equity and determination of distributable profit ................................... 208
6.1.5 Cash flow statement............................................................................................................ 209
6.1.6 Notes to the financial statements .......................................................................................... 210
6.1.7 Significant events after the reporting period ........................................................................... 260
6.1.8 Statement by members of the management and persons responsible for drawing up the annual report
........................................................................................................................................ 261
7 Independent auditor's report ..................................................................................................262
7.1.1 Opinion.............................................................................................................................. 262
4
1 Analysis of the Company’s development, business
performance, and position
1.1 Concise overview of performance and alternative performance
measures
Cinkarna Celje, d. d., (hereinafter the “Company”) uses, among other metrics, alternative
performance measures (APMs) as defined by ESMA to demonstrate its past business performance.
The selected performance metrics reveal the Company’s business performance and efficiency
considering the cyclical nature of the pigment industry.
Table 1: Concise overview of performance and alternative performance measures
OPERATIONS (in EUR 000)
2025
2023
2022
Turnover
198,801,28
176,464,29
227,153,12
Operating profit (EBIT)
1
22,226,71
12,722,75
53,175,64
Operating profit + depreciation and amortisation (EBITDA)
2
36,097,93
25,078,12
65,326,33
Net operating result
19,469,55
12,653,41
43,396,47
Non-current assets (end of period)
121,392,52
114,522,70
108,559,53
Current assets (end of period)
139,844,09
145,392,97
142,388,47
Equity (end of period)
216,755,09
221,230,46
209,010,15
Non-current liabilities (end of period)
17,427,34
18,844,14
18,831,72
Current liabilities (end of period)
27,054,18
19,841,07
23,106,14
Investments
19,525,40
19,825,30
10,546,50
INDICATORS
EBIT as a percentage of turnover
11.18
7.21
23.41
EBITDA as a percentage of turnover
18.16
14.21
28.76
Net profit as a percentage of turnover (ROS)
9.79
7.17
19.10
Return on equity (ROE)
3
9.10
5.88
21.74
Return on assets (ROA)
4
7.31
4.95
17.61
Value added per employee
5
106,613
80,305
131,431
NUMBER OF EMPLOYEES
End of year/period
726
742
775
Average end of year/period
724
754
776
SHARE INFORMATION *
Total number of shares
8,079,770
8,079,770
8,079,770
Number of own shares
299,874
264,650
264,650
Number of shareholders
3,199
2,651
2,321
Earnings per share in EUR
6
2.41
1.57
5.37
Dividend yield
7
5 %
n/a.
10 %
Gross dividend per share in EUR
1.80
n/a
8
3.19
Share price at end of period in EUR
31.50
20.50
23.00
Book value per share in EUR
9
26.83
27.38
25.87
Market capitalisation in EUR 000 (end of period)
254,513
165,635
185,835
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 Company.
6
Net profit/average number of shares in issue.
7
Amount of dividend/share value (at the date of the resolution).
8
In 2023, no dividends were paid due to the energy aid granted to the Company in accordance with the ZPGOPEK.
9
Capital at end of period/total number of shares in issue.
5
1.2 Letter from the Management Board
With a continuous history of more than 150 years in business, the Company is a modern, forward-
looking chemical enterprise that has entered this new era in excellent shape, with ambitious goals
for sustainable operations. As part of the chemical industry, which is a vital component of the
European and Slovenian economies, we are aware of our opportunities, responsibilities, and
challenges in the context of the green, low-carbon, and circular transformation of European industry
and the dynamic nature of the pigment industry.
During the period under review, we generated sales revenue of EUR 198.8 million. The total value of
exports reached EUR 185.0 million during this period, which is on par with the level seen in 2024. In
2025, market conditions were challenging and quite unpredictable, primarily due to reduced
competitiveness in markets outside the EU, which was reflected in lower sales volumes and,
consequently, slightly lower sales, despite higher selling prices. Pressure in EU markets intensified
further because some of our Western competitors (who are otherwise globally dispersed) shifted
their focus more toward the European market, as they, like us, were less competitive in unprotected
markets. Although anti-dumping measures on imports of Chinese TiO₂ remained in effect throughout
the year, they have so far failed to provide the expected protection against price pressure. Chinese
producers have absorbed the bulk of the tariffs and adjusted their output prices, while continuing to
actively seek ways into the European market. Given the persistent excess capacity in the industry
(primarily of Chinese origin) and more subdued demand, this continued to put pressure on selling
prices and margins; furthermore, the situation was exacerbated by rising sulphur costs, which
negatively impacted manufacturers’ cost structures.
Net profit amounted to EUR 19.5 million, representing 84.3% of the net profit achieved in 2024,
when it reached EUR 23.1 million. Operating profit before depreciation and amortisation (EBITDA)
reached EUR 36.1 million, representing 18.2% of total revenue. Compared to the previous year,
EBITDA is down by 8.8%.
Titanium dioxide pigment remains at the core of Company’s business, and we focus on continuously
improving its quality and developing sustainable applications. Despite our role as a smaller
manufacturer that follows market trends, we exceeded expectations by effectively capitalising on
opportunities. Our strategy is guided by a focus on profitable markets, high-quality customers, and
long-term partnerships.
Economic sentiment indicators in the euro area in the last quarter point to a gradual continuation of
economic growth, as both the composite PMI and the economic sentiment indicator reached their
highest levels since mid-2023, with improved confidence across all sectors and among consumers.
Nevertheless, the ECB expects slightly lower euro area GDP growth this year, around 1.2%, after
growth last year was temporarily supported by a surge in exports ahead of the introduction of higher
tariffs. The main driver of growth remains private consumption, supported by higher real wages and
high employment, along with investment and increased infrastructure and defence spending,
particularly in Germany. In Slovenia, economic activity last year was driven primarily by construction
and household consumption amid weak industry and exports, while manufacturing output remained
lower year-on-year, and exports lost market share in the EU market, indicating persistent pressures
on competitiveness. These pressures intensified in 2025 due to rising labour costs, particularly in
construction and manufacturing, although the deterioration in price competitiveness indicators
slowed toward the end of the year. Taken together, this means that the recovery remains fragile and
uneven, with high risks related to trade tensions, geopolitics, and financial markets, while positive
surprises could come primarily from larger public investment cycles and reforms to boost
productivity.
6
In this macroeconomic environment, the TiO2 industry ended the fourth quarter of 2025 on a
subdued note. In Europe, Q4 contracts declined for the second consecutive quarter, despite a
competitor’s insolvency and capacity outages, as weak demand from the construction and coatings
sectors and customers’ inventory reductions at year-end prevented market rebalancing. Supply
remained more than sufficient, partly due to the redirection of volumes from less profitable, non-
tariff markets to protected EU markets, which further intensified price pressure. Similar dynamics
were also present in the U.S., where Q4 contracts fell for the fifth consecutive time. In Asia, the
market was characterised by highly competitive Chinese supply, low spot prices, and excess capacity,
with attempts to raise prices at the end of the year being primarily cost-driven due to rising acid
prices, but without clear support from end markets, particularly amid the continued contraction of
real estate investment in China.
Western manufacturers faced further margin compression under these conditions, so in Q4 and as
they transitioned into 2026, they focused primarily on maintaining positive cash flow, high capacity
utilisation, and cost discipline. Additional pressures stem from hybrid mixtures with reduced TiO₂
content that remain below the thresholds for tariff restrictions, calling into question the long-term
effectiveness of protective measures and increasing competitive pressure on the European market.
The start of the first quarter of 2026 is thus marked by cautious stabilisation at low levels, with
isolated forecasts of moderate price adjustments, the implementation of which depends heavily on
an actual improvement in demand. In the short term, seasonal inventory replenishment is primarily
expected, while any recovery in the TiO₂ market will be slow, uneven, and closely linked to
developments in the construction sector, coatings, and the broader industrial cycle, requiring careful
management of working capital and capacity in the coming months as well.
In the area of employee relations and human capital management, we continued to optimise our
organisational structure in 2025 with the aim of ensuring the smooth operation of the Company and
creating conditions for safe, healthy, and productive work for our employees. We adhere to the
principles of a balanced and motivating compensation policy and ensure an appropriate level of
employee satisfaction and engagement, while simultaneously controlling labour costs. We are
implementing IT support for the systematic development of competencies and the improvement of
the organisational climate, and together with our social partners, we prepared a draft for the overhaul
of the competency and pay model, which will enable greater transparency and the long-term
sustainability of the remuneration system.
In 2025, we allocated EUR 19.5 million for investments, the purchase of fixed assets, and
replacement equipment, making our investment decisions in a selective and prudent manner. We
invested primarily in programmes and projects with clear growth potential, as well as in production
investments that contribute to reducing operating costs, ensuring profitable production volumes,
improving product quality, ensuring regulatory compliance, and enhancing energy efficiency. Thus,
despite challenging market conditions, investment activity was focused on long-term competitiveness
and business stability.
Our development activities largely followed the established five-year strategy, while adapting to new
market conditions as they arose. We carried out development activities in a targeted manner, based
on identified opportunities, our own expertise, and taking into account trends and customer
expectations, with an emphasis on areas where we can create higher added value.
In the area of spatial and environmental risks, we implemented several interrelated projects designed
to comprehensively manage long-term risks and ensure a stable business environment. Among the
more significant ones are the alternative water supply project, the harmonisation of spatial planning
documents for the red gypsum filling facilities at Za Travnik and Bukovžlak, and projects to ensure
the stability of barrier structures.
7
In planning and implementing all activities, we consistently adhere to the principles of sustainable
development and the circular economy. As part of ensuring the sustainable development of titanium
dioxide production, we continued projects for comprehensive water management and waste acid
treatment, and further focused on the recovery of red gypsum. At the same time, we initiated and
implemented new activities in the areas of carbon footprint reduction, renewable energy use, and
material reuse, with a clear goal of long-term cost and environmental sustainability.
The following sections of the report provide a detailed overview of the results by business segment,
as well as a comprehensive presentation of the Company's financial position and operations.
Management Board of Cinkarna Celje, d. d.
8
1.3 Report of the Supervisory Board
In 2025, the Supervisory Board exercised active and responsible oversight of the Company's
operations and the Management Board's activities within the scope of its authority. In doing so, it
focused primarily on ensuring long-term business stability, managing key operational and
environmental risks, and addressing issues of succession planning and the development of the
Company's management structure. Particular attention was paid to monitoring day-to-day
operations, investment decisions, and the preparation and approval of business plans.
The Supervisory Board assessed 2025 as a challenging year in terms of content, yet a stable one. It
understood its role not only as formal oversight, but also as an active and constructive dialogue with
management, with the aim of identifying risks in a timely manner, clarifying open issues, and
supporting management in decisions important for the Company's long-term development.
In 2025, the Supervisory Board held six meetings, including five regular and one extraordinary
meeting. At these meetings, the members of the Supervisory Board reviewed the materials and
explanations provided by the Management Board and, where necessary, sought additional
information and opinions, including from external experts.
At the end of 2025, the Supervisory Board consisted of Chairman Tomaž Berločnik and members
Melita Malgaj, Boštjan Furlan, Dubravka Derossi Uršič, Aleš Stevanovič, and Matej Pompe, the latter
two of whom were employee representatives. The composition of the Supervisory Board enabled the
effective performance of supervisory functions and the professional consideration of key issues
regarding the Company's operations and development.
In 2025, there was a change among the employee representatives on the Supervisory Board.
Following the expiration of the term of the previous member, Jože Koštomaj, Matej Pompe, who was
appointed by the Works Council, assumed the role of Supervisory Board Member as employee
representative.
In 2025, the Supervisory Board regularly monitored the Company's operations, with a focus on
financial performance, investment activities, and the implementation of business plans. The
Management Board kept the Supervisory Board promptly and comprehensively informed of
developments in key business indicators and any deviations from planned targets, enabling the
Supervisory Board to address and respond to issues in a timely manner.
Special attention was paid to managing the key risks faced by the Company. The Supervisory Board
reviewed in detail the risk of a shortage of process water and possible solutions, and also monitored
other significant operational, market, and environmental risks. The review of risks was conducted in
conjunction with the Company's sustainability strategy, with the Supervisory Board emphasising the
importance of the long-term stability and resilience of the business model.
In 2025, the Supervisory Board monitored the implementation of the Company's medium-term
strategy and discussed key development directions for future periods. Particular emphasis was placed
on strengthening the Company's competitive position, increasing market share, and growing the
physical volume of business, while maintaining financial stability.
A significant portion of the discussions was devoted to development and research activities and the
implementation of investments. The Supervisory Board actively monitored the progress of key
development tasks and investment projects, paying particular attention to their substantive
justification, alignment with development goals, and implementation within approved financial
frameworks and timelines.
9
The Supervisory Board reviewed and approved the 2026 business plan and concluded that the set
goals are realistic, financially sustainable, and consistent with the Company's strategic direction. It
also believes that, with a conservative financial approach, a stable business model, and targeted
development investments, the Company is creating a solid foundation for further growth and
adaptation to future challenges in the business environment. The focus will therefore continue to be
on improving or strengthening the competitive position, increasing market share, and expanding the
physical volume of business. In parallel with this, the possibility of further diversifying the product
portfolio will be explored.
In 2025, the Supervisory Board adopted a new Remuneration Policy, which established the principles,
criteria, and procedures for determining the remuneration of the Management Board and the
Supervisory Board. The policy emphasises the link between remuneration and responsibilities,
performance, sustainable business practices, and the Company's long-term development.
The Supervisory Board reappointed the President of the Management Board for a new full term and
appointed a member of the Management Board—the Technical Director—for a term ending on 31
March 2027, taking into account the fact that she will retire upon the expiration of her term. In this
context, the Supervisory Board encouraged the President of the Management Board to initiate
procedures in a timely manner to ensure an appropriate succession and a smooth transfer of
knowledge, experience, and responsibilities.
In the second half of 2025, the Supervisory Board was regularly briefed on the progress of the
recruitment process and monitored the onboarding of a potential candidate for the Management
Board, confirming the candidate’s continued onboarding.
Upon the expiration of the term of office of Management Board Member, Employee Director, Filip
Koželnik, who decided not to seek re-election upon the expiration of his term, the Works Council, in
accordance with its statutory powers, proposed Nika Veronovski to the Supervisory Board as a
member of the Management Board, Employee Director, whom the Supervisory Board appointed to
the Management Board.
Within the scope of its authority, the Supervisory Board reviewed and approved the Internal Audit
work plan for 2026. It reviewed the annual report on the work of this department and, during its
review of the semi-annual reports, familiarised itself with the operations of the internal audit function,
its key findings, the recommendations issued, and the implementation of those recommendations.
By approving the internal audit strategy, it confirmed the strategic objectives for its development for
the 2026–2028 period.
In 2025, the Supervisory Board monitored the integration of sustainability considerations into the
Company's operations and reviewed the implementation of the sustainability strategy and key
initiatives in the areas of the environment, social responsibility, and governance, including the DMA.
It paid particular attention to environmental issues related to the nature of the Company's activities,
the management of environmental risks, and compliance with applicable regulatory requirements. In
doing so, the Supervisory Board reviewed progress in the area of sustainability reporting and
measures aimed at reducing environmental impacts, the efficient use of resources, and responsible
conduct toward employees, the local community, and other stakeholders. It treated sustainability
issues as an integral part of business decision-making and the Company’s long-term stability.
In 2025, the Audit Committee of the Supervisory Board fulfilled its role as the Supervisory Board’s
central expert body in the areas of financial reporting, internal controls, internal audit, and
cooperation with the independent auditor. It operated with an appropriate composition that ensured
the necessary expertise and independence, and held six meetings in 2025.
10
The Audit Committee regularly reviewed the Company's interim operating results and paid particular
attention to financial and accounting data, the quality of financial reporting, and the content of
interim and annual business reports, while also keeping abreast of the Company's key risks and their
management. In doing so, it also monitored the operations of the internal audit function, reviewed
its reports on completed internal audits, monitored the implementation of recommendations, and
reviewed periodic reports on the work of the internal audit function. It collaborated with the head of
Internal Audit in developing the internal audit function’s strategy, thereby supporting the Supervisory
Board in setting expectations regarding its further development.
Within the scope of its responsibilities, the Audit Committee reviewed the results of the statutory
audit of the financial statements, the sustainability statement, the auditor’s report, and the letter to
management, and assessed the independence and impartiality of the external auditor. In addition to
the statutory audit, the auditor also performed a review of the compliance of the financial statements
in electronic form (ESEF) and a review of the report on the remuneration of management and
supervisory bodies.
Based on its review of the auditor’s report, the Audit Committee took note of the findings that the
2025 Annual Report of Cinkarna Celje, d. d., has been prepared in accordance with the requirements
of the Companies Act and International Financial Reporting Standards, and that the financial
statements present fairly, in all material respects, the financial position, results of operations, and
cash flows of the Company. Based on a review of the auditor’s independent limited assurance report
on the sustainability statement, the Audit Committee also took note of the findings that the
Sustainability Statement has been prepared in all material respects in accordance with Articles 70c
and 70d of the Companies Act (ZGD-1) and that the sustainability report complies with the
requirements of the European Sustainability Reporting Standards (ESRS).
Based on its review of the Audit Committee’s reports, the Supervisory Board, within the scope of its
authority, examined the Company’s Annual Report and the proposal for the appropriation of retained
earnings; and, after reviewing the relevant supporting documents and additional explanations, it
assessed their compliance with applicable legal requirements. It also reviewed the auditor’s report.
Following its final review of the Annual Report, the Supervisory Board has no comments.
At its regular meeting on 14 April 2026, the Supervisory Board approved the Annual Report of
Cinkarna Celje, d. d., for 2025.
Chairman of the Supervisory Board
Tomaž Berločnik
11
1.4 Internal audit report
Internal audit services are performed by the Internal Audit Department, which is an independent
organisational unit that reports functionally to the Supervisory Board and organisationally to the
Company's Management Board. Its role, scope of work, types of services, and authority are defined in
the Internal Audit Charter, which was revised upon the adoption of the Global Internal Audit Standards.
The purpose of internal auditing is to strengthen the Company's ability to create, protect, and preserve
value by providing independent, unbiased assurance. By adhering to professional standards and
systematically evaluating the internal control system, it assists the Company in improving control
procedures and management processes, thereby helping it achieve its objectives.
In 2025, the Internal Audit Department carried out its work in accordance with the approved annual
plan. Seven regular internal audits were conducted, with the last one completed in the following year.
The audits covered areas within the production business units and company-wide processes. In
accordance with the plan, an audit was conducted in collaboration with an external expert to assess
the Company's compliance with the Information Security Act (ZInfV-1). Recommendations were issued
for identified opportunities for improvement, ranked according to risk level, and their implementation
was subsequently monitored and verified on a regular basis. Information on the implementation of
internal audit recommendations is included in regular periodic reports on the department’s
operations, intended for the Management Board, the Audit Committee, and the Supervisory Board.
Improvements were also implemented in the area of the internal audit function. Among the most
significant was the preparation and adoption of a strategy for the 2026–2028 period, which, with its
defined vision, objectives, initiatives, and key activities, guides the operations of the internal audit
function and its continuous improvement. Activities from the quality assurance and improvement
programme, which includes internal and external assessments, also serve as a foundation for further
development. As part of internal activities, a self-assessment of compliance with the requirements of
the Global Internal Audit Standards was conducted in early 2025, and the work plan for 2026 includes
the implementation of an external independent quality assessment.
Mag. Mateja Rupnik,
Head of the Internal Audit Department
12
1.5 Highlighted events
Cinkarna Celje d.d. in Antwerp to improve conditions for European industry
In February, the Company participated in an event in Antwerp with the President of the European
Commission. At the event, 400 business leaders, including the President of the Management Board,
Aleš Skok, discussed immediate measures with President Ursula von der Leyen ahead of the March
European Council meeting. The focal point of the event was, of course, the so-called Clean Industrial
Deal, an industrial agreement aimed at strengthening the EU’s competitiveness and supporting
decarbonisation, particularly in energy-intensive industries. The goal is to create a more competitive,
sustainable, and resilient European industry.
The 17th competition for primary and secondary schools completed
As part of Company’s 17th competition, young people explored how the Company reduces its
environmental impact in various ways and increases its responsibility toward the environment in
which it operates. More than 430 primary and high school students from 24 schools in the region
participated. At Company, we are thrilled every year by the many young people who combine
creativity and chemistry. The students created numerous board games on the theme of sustainability
measures. Over 100 contest participants attended this year’s closing event.
Successfully completed Open House Day
In June, we successfully held an Open House Day at our locations in Celje and Mozirje. The event
gave numerous visitors a glimpse into the Company's more than 150-year history, modern
technology, sustainable practices, and, above all, the work of the people who contribute daily to the
Company's development and success. Visitors were able to tour modern production processes and
learn about our truly exceptional efforts in the area of sustainability, as this year we will allocate
nearly 20 million EUR in investments primarily toward production modernisation, sustainable
development, and the development of a circular economy. The event was thus an excellent
opportunity for dialogue between the Company and the local community, which is crucial for our
continued joint development and success.
Successful completion of a civil protection and rescue exercise as part of a regional drill
In May, the Company conducted a challenging civil protection and rescue exercise as part of the
regional drill “Earthquake in the Western Styria Region.” Company’s firefighters , together with civil
protection and rescue units, carried out PIRS procedures (identify, isolate, rescue, and remediate).
The purpose of such exercises is to test rapid response, coordinated action, and effective
communication among all participants. The exercise involved 100 personnel from the Company's Fire
Department, the Celje Professional Fire Department, the Radiological, Chemical, and Biological
Protection Unit, Emergency Medical Services, the Slovenske Konjice Volunteer Fire Department, the
Štore Volunteer Fire Department, and the Rogaška Slatina Volunteer Fire Department. The exercise
confirmed the high level of professional competence of all participating units and good cooperation
with protection and rescue services, which is crucial for mitigating the consequences of accidents at
chemical plants.
At the Abrafati trade fair in Brazil
We made our debut as exhibitors at this year’s Abrafati Show in São Paulo, Brazil. This marks an
important strategic step for Cinkarna Celje’s entry into the South American market. The Abrafati fair
is considered the premier event for the paint and coatings industry in Latin America, bringing together
leading raw material manufacturers, experts, researchers, and distributors. By participating in the
fair, we presented our most important product, titanium dioxide (TiO₂), to industry professionals.
We emphasised its key importance in the coatings, paints, and other materials industries, where
quality, stability, and sustainability aspects are increasingly at the forefront. The fair featured a
diverse mix of technological solutions and technical content presented during the accompanying
13
congress. Our presence at the Abrafati Show thus strengthened our brand recognition, confirmed the
importance of TiO₂ in the global market, and enabled us to build our position in Latin America with
even greater confidence through direct contact.
EcoVadis gold certification for sustainable business practices
In August, we received the prestigious Gold Medal in the EcoVadis assessment, placing our Company
among the top 5% of globally assessed companies in the field of sustainable business. The
methodology is based on international sustainability standards and covers more than 200
procurement categories and over 175 countries. The EcoVadis assessment is based on 21 indicators
across four areas: environmental impact, business ethics, respect for labour and human rights, and
sustainable procurement. The significance of this prestigious award: EcoVadis is the most trusted
global assessor of corporate sustainability. Since 2007, more than 150,000 companies in global
supply chains have been assessed for responsible performance in the aforementioned areas.
EcoVadis awards recognise not only short-term achievements but also long-term and comprehensive
sustainability strategies, supported by transparent reporting and continuous improvements.
Cinkarna Celje, d. d., ranks among the top 1.5% of companies in Slovenia for the 8th
consecutive year
For the eighth consecutive year, we have been awarded the AAA Platinum Credit Excellence
Certificate. This highest credit rating confirms that our company ranks among the top 1.5% of the
most reliable, credible, and financially stable companies in Slovenia. Maintaining Platinum Excellence
over the long term demonstrates our consistent adherence to the highest standards and is a
recognition awarded only to companies with a long-standing above-average credit rating. It serves
as an additional assurance to our customers, partners, and employees that we operate successfully,
responsibly, and with an eye toward the future. Companies with Platinum Credit Excellence perform
exceptionally well and meet strict criteria for achieving a low probability of adverse events occurring
in the next twelve months.
European Court of Justice ruling overturning the classification of TiO
2
as a hazardous
substance
During the summer, Company received a ruling from the European Court of Justice upholding the
decision of the Titanium Dioxide Manufacturers Association (TDMA) and removing certain forms of
TiO2 from the list of hazardous substances. The decision of the court of appeal is final.
This ruling primarily means that TiO2 will be removed from the list of hazardous substances in the
EU once the regulatory process is completed. At Company, we welcome this decision, which is based
on extensive scientific evidence. This evidence unequivocally confirms that the use of TiO
2
is safe for
humans.
The European Court of Justice’s ruling will thus simplify regulatory requirements and enable a more
stable regulatory environment for the industry. Only a stable regulatory environment creates the
right conditions for sound business planning, openness to development, and innovation.
Collaboration with regulators, coupled with support for scientific research, remains among our top
priorities. Only through joint efforts to ensure the safe, responsible, and efficient use of raw materials
such as TiO
2
—which is crucial for many industries—can we ensure sustainable development while
simultaneously fostering the competitiveness and innovation of European industry.
The Company remains committed to both adhering to the highest environmental and safety
standards and to comprehensive sustainable development. Such science-based decisions lay an
additional foundation for a more stable and responsible future in the long term.
14
The 18th competition for elementary and secondary schools announced
For the 2025/2026 school year competition, we are looking for a hero or heroine who uses clean
energy, recycled power, and imagination to protect our planet, people, and businesses—and how this
superhero or superheroine is already helping Company and the environment today. This year’s
contest offers plenty of creative opportunities for self-expression, as children and young people can
choose between the art or literary category.
The power of community: Social responsibility and support for the local community
We believe that sustainable success is closely linked to social responsibility and active support for
the community in which we operate. Sponsorships, donations, and partnerships with local
organisations and associations are a key part of our social responsibility strategy. We realise that by
joining forces, we can help create better conditions for sports, culture, education, and other initiatives
in our community. We are proud of the many collaborations that contribute to talent development,
the strengthening of social bonds, and the sustainable development of the local environment. Many
such partnerships enhance the visibility of the municipalities and the region where we operate and
confirm that the combined efforts of the Company and the local community create a story that
resonates throughout Slovenia and beyond.
Cinkarna Celje, d. d., has a new Employee Director
In November, the Company's Supervisory Board appointed Dr. Nika Veronovski as a member of the
Management Board, Employee Director, following a proposal by the Works Council. The new member
of the Management, Employee Director, Dr. Nika Veronovski, has been employed at Company for
over 15 years. She holds a Ph.D. in environmental engineering. As an expert, she has many years
of experience in the field of surface modifications, the development and characterisation of new
materials, and their applications. In her work, she also focuses on optimising production processes
and improving the final properties of titanium dioxide (TiO₂) pigment, which is the Company's main
product. Dr. Nika Veronovski succeeded Filip Koželnik in this position; he remains with Company and
will focus his expertise on investor relations and further strengthening trust with stakeholders.
Strengthening dialogue with the local community: A successful Community Council
meeting
In December, we held a meeting of the Community Council, a new advisory body designed to foster
an even more constructive dialogue with the local community. The Community Council was
established in early 2025, and its work began in the autumn of 2025 with an introductory coordination
meeting, where the foundations for cooperation were laid. The main purpose of the Community
Council’s establishment and operation is to facilitate regular dialogue with key stakeholders from the
City of Celje and the municipalities of Štore and Šentjur, with the aim of promoting the coexistence
of the economy with local communities, mutual understanding, and the creation of added value
through the search for feasible solutions to improve the quality of life in the region. The members of
the council were briefed on the Company's activities, its plans, and its sustainable development
strategy. The Company transparently presented all its sustainability measures, efforts to reduce
environmental impacts, investments in the local community, and support for youth, sports, and
socially responsible projects. Special emphasis was also placed on past activities related to
cooperation and communication with local communities. The meetings and activities of the
Community Council represent an important step toward an even more transparent dialogue with
residents. This form of dialogue provides direct insight into the Company's operations and contributes
to the sustainable development of the local community. Council members highlighted the Company's
positive progress in the areas of sustainability, cooperation with the local community, and social
responsibility. The Community Council will continue to serve as a forum for regular and open dialogue
aimed at strengthening cooperation and jointly seeking solutions for sustainable development, while
also ensuring long-term and structured dialogue with local communities and fostering mutual trust
and understanding.
15
1.6 Company profile
Company, 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, Company
now operates in the chemical processing industry.
Table 2: Basic company identification information
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
Telex
info@cinkarna.si
E-mail
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 ten
specialised departments. As of the beginning of 2025, the Environmental Protection Department and
the Occupational Safety and Health Department were merged into the Department of Safety, Health
and the Environment.
16
2 Company management
2.1 Corporate Governance Statement
G1-1: 7
Company is organised as a joint-stock company with its registered office in Celje. The Company has
a two-tier management system consisting of the Management Board and the Supervisory Board. The
Management Board manages the Company for the benefit of the Company, independently and on its
own responsibility. The Management Board represents the Company and is accountable to the
General Meeting and the Supervisory Board.
G1-1: 7-8
Information on the composition and functioning of the management and supervisory bodies and their
committees is presented in the section [GOV-1] Role of administrative, management, and
supervisory bodies.
G1‑2:12, 13, 14
In its operations, the Company applies the Slovenian Code of Corporate Governance for Public Joint-
Stock Companies, which was adopted in December 2021 by the Ljubljana Stock Exchange and the
Slovenian Association of Supervisors. In accordance with a business decision by the Company’s
Management Board, the Company complies with the Code, with the exception of the explained
deviations. Due to the specific nature of the Company's management, the legal framework (ZGD-1,
ZTFI-1, Market Abuse Regulation (MAR), etc.) is strictly adhered to in areas that deviate from the
Code. Below, we provide an overview and explanations of deviations from individual provisions of
the Code.
G1‑1:9
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.
G1-1:10
Item 6 – The Supervisory Board, in cooperation with the Management Board, drafted the
Remuneration Policy for Management and Supervisory Bodies in accordance with relevant legislation
and best practice recommendations in this area, and submitted it to the General Meeting for approval.
The General Meeting approved the document.
G1-1:11
Item 10.1 – The Company has concentrated ownership, with the two largest shareholders holding
more than 20 percent of the voting rights. Furthermore, the majority of shareholders are from
Slovenia.
G1‑1:9–10
Item 16 – During the reporting period, the Supervisory Board and the Audit Committee of the
Supervisory Board did not carry out a formal evaluation of their performance. The year 2025 was
the first full year of operation of the Supervisory Board in its composition following the most recent
change in membership; therefore, a formal evaluation was planned for the next reporting period.
The Supervisory Board and the Audit Committee plan to conduct the evaluation in 2026, taking into
account the applicable recommendations and appropriate methodology for assessing the
effectiveness of supervisory boards.
G1‑6:31-32
Item 26 – The Company does not yet have established procedures in place regarding transactions
with related parties to assess whether a transaction is conducted in the ordinary course of the
Company’s business and under arm’s-length terms. Although the Company did not record any
transactions with related parties during the reporting period, it does maintain a list of related parties.
G1‑2:15
Item 30 – The Company does not have a defined corporate communication strategy as an integral
part of its Governance Policy. The Company’s Management Board and specialised departments are
17
responsible for corporate communication and business transparency. Public disclosures (SEOnet and
the Company's website) comply with legal requirements and contain information that enables
securities investors to assess the situation and evaluate the impact of a business event on the price
of the security.
The diversity policy is publicly available on the website and is outlined in Section G1 of the
Sustainability Statement, along with other codes and policies that the Company adheres to in its
operations.
To manage the risks that affect the achievement of our objectives, a system of operational and
supervisory internal controls has been established at all levels and in all areas of business. These are
the objectives:
• operational efficiency and effectiveness,
• reliability of financial reporting,
• compliance with legal regulations and internal rules.
Control activities and responsible parties are documented in internal documents (job descriptions,
authorisations, organisational regulations, rules, and procedures).
The Company ensures the following:
• Accounting data verification, which involves assessing the accuracy of accounting data and
correcting any identified discrepancies. Implementation is the responsibility of the Accounting
Department and the Finance Department;
• Verification of the reliability of accounting data, which is performed through an inventory of
assets and liabilities. The inventory is conducted by a permanent inventory commission in
accordance with the annual inventory schedule. For specific types of inventories or
extraordinary inventories, the Company’s Management Board may also appoint special
inventory commissions;
• Assessing deviations of actual figures from planned ones, which may indicate shortcomings
in implementation as well as in goal planning. These activities are carried out within the
Accounting Department;
• Internal control over the implementation of prescribed procedures in the areas of
procurement, storage, and consumption of materials, as well as in the areas of production,
storage, and sale of products (control of the use and approval of prescribed documentation,
analysis of potential deviations, and proposal of measures). These activities are carried out
within the Accounting Department and by the Management Board;
• Internal controls within the computer-based information system, relating to management,
infrastructure, security, procurement, development, and maintenance of software support,
are provided by the IT Department. Controls within individual applications and controls at
the user level of software solutions ensure the completeness and accuracy of data capture
and processing;
• The internal control system is also supplemented by a system for conducting assessments in
accordance with acquired ISO standards;
• Internal process audits, conducted by qualified internal auditors to verify whether activities
are carried out in accordance with management system requirements and whether the
management system is appropriate and effective for achieving the set objectives. External
audits are performed by a selected certification body;
• Audit of the annual financial statements, conducted by an external audit firm;
• Annual review of the functioning of operational and supervisory internal controls based on a
decision by the Company’s Management Board. The Management Board defines, by
resolution, the responsible party, the areas of supervision, and the timeline for conducting
the review.
18
We established the Internal Audit Department in 2016. Based on the adopted charter, work
methodology, professional rules, and annual work plan, it has been operational since 2017. Its
purpose is to verify and assess, within the scope of internal audit engagements, the adequacy and
effectiveness of the internal control system in achieving the Company’s significant objectives.
Deviations identified in individual internal control mechanisms are analysed by responsible personnel
and Company management, who then take measures to eliminate or prevent the causes of risks that
have led to, or could lead to, deviations from the Company's established rules and objectives.
Risk management is discussed in more detail in the following chapter.
19
2.2 Risk management
The risk management process is a key process and the foundation of the Integrated Management
System (IMS). Risk management within the Company is carried out systematically in accordance
with the Policy on the Management of Impacts, Risks, and Opportunities, which defines the
organisation, responsibilities, methodology, and the manner of implementing and monitoring
measures.
The risk management system includes risk identification, risk assessment and classification,
implementation of measures, monitoring, and reporting. Based on monitoring and analysis of the
external and internal environment, we obtain input data for identifying key risks and opportunities,
which is crucial for our operational, tactical, and strategic planning in line with sustainable
development goals.
From the perspective of reporting in accordance with the CSRD, we added an assessment of
sustainability impacts, along with the associated risks and opportunities, to our existing risk
management approach. We identified the method for assessing sustainability impacts, risks, and
opportunities through the Double Materiality Assessment (DMA) process.
At the end of 2024, following the model of European reporting standards—where the identification of
impacts is focused on predefined sustainability themes, sub-themes, and sub-sub-themes—we
implemented this approach in the area of risk assessment as well.
At the Committee for the Management of Impacts, Risks, and Opportunities, we identified key areas
of financial impact on the Company, which we clearly describe using themes, sub-themes, and sub-
sub-themes. Along with these changes, we made a major change to risk assessment in the area of
work items, where we evaluate a group of key raw materials and energy sources during risk
assessment.
The management levels for individual risks and opportunities remain the same and depend on the
degree of financial impact on the Company.
We manage impacts, risks, and opportunities through implementation objectives or tasks, the
execution of which we track via reports and/or minutes. We monitor impacts, risks, and opportunities
on an ongoing basis, and conduct a thorough review within the Committee once a quarter. This is
followed by reporting to the Management Board’s Broader Professional College. We inform the
Management Board and the Supervisory Board of key impacts, risks, and opportunities on a quarterly
basis.
We also communicate with the external public regarding the Company's operational risks and their
management, specifically in interim and annual reports, i.e., every three months. The reports are
publicly available on the SEO-net portal and on the Company's website www.cinkarna.si.
Overview of key risks–the residual risk described below is updated and defined based on the status
and expectations as at the reporting date.
20
Figure 1: Schematic representation of the VTP management and identification process
We identified key residual risks in the following areas:
1. Work items
2. Digital transformation
3. Human resources
4. Overall equipment effectiveness (OEE)
5. Products
6. Water resources
7. Safety
8. Regulatory compliance
9. Financial risks
1 Work items
In the area of raw material procurement, we face three types of risks. A loss of production and,
consequently, planned revenue can result from a failure to deliver work items by strategic suppliers,
as well as from unforeseen delays in delivery times throughout the entire supply chain. Price
increases also pose a risk in cases where demand exceeds supply.
21
We ensure timely planning of requirements and ordering of raw materials, factor in time buffers
based on experience, and increase minimum stock levels as needed. For all strategic raw materials,
we continuously update the business case and checklist in response to market changes, raw material
prices, the Company's business needs, and other external factors.
We identify, test, and introduce new sources of raw materials into our production. We also evaluate
alternative raw material sources by compiling catalogues of verified alternative raw materials and
suppliers. We build long-term, stable partnerships in a targeted manner. We maintain regular contact
even with suppliers with whom we do not currently do business, but who represent a high-quality
potential alternative.
We manage risks by implementing appropriate contractual safeguards.
Recently, as the volume of liquid sulphur on the market has decreased, prices for both liquid and
solid sulphur have risen significantly. We manage price and volume risks to the extent possible by
expanding our supplier base.
2 Digital transformation
Digitisation allows us to reduce the risks of production volume losses, excessive maintenance costs,
and errors in manual data entry; it also helps us cut administrative costs and better manage security
risks.
We mitigate this risk by implementing several operational objectives that increase the level of
digitisation and streamline business processes (upgrading modules in the Power BI business analytics
platform and in Moja Cinkarna, the document management system, migrating Oracle Forms
applications, implementing the mSign system, an AI agent for knowledge transfer, and updating the
maintenance information system and the Spekter production information system).
Within this risk, we also address automation and cybersecurity as sub-themes, which relate to
potential disruptions in the operation of information systems, unauthorised access to data, loss or
disclosure of confidential information, cyberattacks, and the failure or malfunction of automated
processes, which could negatively impact business continuity, data security, financial results,
regulatory compliance, and the Company's reputation. We mitigate this risk through a virtual backup
environment, the implementation of security tools, and regular updates of critical hardware and
software.
3 Human resources
On the one hand, the Company is facing a wave of retirements, and on the other, a shortage of
qualified personnel in the labour market. The rate of sick leave poses an additional risk.
Given the large number of retirements, ensuring adequate succession planning and the risk of new
hires lacking the necessary skills pose a challenge, as it takes a considerable amount of time to
develop those skills.
We have an established staffing system in which a training programme and mentor are assigned to
each position.
We are identifying all specific and general skills within the Company, revamping the onboarding
process for new employees, and assessing the existing skills of current employees.
22
We developed and approved a new competency model. In it, we precisely described the competencies
required for all job positions. Based on this, we are conducting systematic training through the
Leadership Academy for Level B-1 and for all employees via the Smart Arena training platform.
We are implementing a comprehensive project on knowledge transfer in the key titanium dioxide
production.
We identified key positions within the Company, defined potential successors, and determined the
timeframe for necessary replacements and the additional competencies required.
For the most promising candidates, we implement the Leadership Academy development programme
and individual coaching sessions.
In addition to traditional recruitment methods, we use social media-based recruitment solutions when
seeking new employees. We increased our cooperation with staffing agencies and, in specific cases,
entered into contracts with external service providers.
We offer staff scholarships. We actively participate in career fairs. We deepened our cooperation with
secondary schools. We offer secondary school and college students opportunities for mandatory
internships and student work. We provide students with opportunities to complete their bachelor’s,
master’s, and doctoral theses within the Company.
We are continuously implementing organisational changes and adapting flexibly to new
circumstances.
By introducing team-based task management and communicating with employees, we strive to
increase employee engagement. We systematically address safety issues during daily meetings and
eliminate the causes of injuries. We ensure employee versatility to the extent possible.
4 Overall equipment effectiveness (OEE)
At the Company, we prepare annual and strategic plans based on achieving maximum equipment
utilisation. Breakdowns, unplanned maintenance, and limited storage capacity pose a risk of failing
to meet our desired goals.
We significantly reduced the risks associated with titanium dioxide production in the flue gas cleaning
process through the successful commissioning of the fourth electrostatic precipitator. This was
followed at the end of the year by the refurbishment of one of the older electrostatic precipitators,
and the replacement of another will be carried out early next year. During the year, we faced reduced
overall equipment efficiency in the areas of vacuum cooling, calcination, and gel washing. We
managed this risk by conducting a root cause analysis, adopting a systematic approach to resolution,
and implementing preventive maintenance and systematic monitoring of critical points.
At Kemija Celje, the risk stems from the possibility of equipment failure when the production line is
operating at high capacity. We manage this risk by focusing on operations that place less strain on
the line, by using larger packaging, and by outsourcing packaging to subcontractors.
At Polimeri, the sandblasting machine posed a risk to availability, but we successfully replaced it in
2025.
At Kemija Mozirje, we successfully mitigated the risk of production downtime due to equipment failure
through expanded preventive maintenance and by maintaining a stock of key spare parts.
23
5 Products
In both the titanium dioxide and masterbatch sectors, sales volumes in our traditional markets are
changing noticeably due to the deteriorating economic situation in Europe and the influx of low-cost
Chinese pigments, as well as the imposition of tariffs on masterbatches. As a countermeasure, we
are increasing pigment sales to Scandinavian markets, expanding our sales network in the U.S., and
exploring opportunities for expansion into the Indian and Brazilian markets. In the masterbatch
sector, we are increasing sales in the segment of more demanding applications.
We are also implementing cost optimisation.
6 Water resources
This is a risk associated with climate change that could have a negative impact on the Company's
operations due to restrictions on water supply during periods of drought.
The Company recognises the potential shortage of water for titanium dioxide production as both a
significant risk due to drought and an opportunity to adhere to sustainable business principles.
The solution involving the use of wastewater from the Celje Municipal Wastewater Treatment Plant
(KČN) has proven to be the most suitable and, above all, the most sustainable. This source is
quantitatively sufficient in the long term, but requires additional treatment. Its use consequently
improves both the biological and hydromorphological status of the watercourse.
Pilot tests of one type of technology at the wastewater treatment plant site have been completed
and serve as the basis for equipment planning; in 2026, we will conduct pilot tests of an alternative
technology. In cooperation with the City of Celje, the process of preparing the Detailed Spatial Plan
(OPPN) for the installation of the pipeline is underway. At the same time, we are also preparing the
project documentation for the construction of the pipeline.
Through various measures, we have already partially increased the use of internal water recycling
systems and ensured the availability of a short-term emergency power supply, thereby preventing
the need to halt production.
7 Safety
Heavy rainfall (floods, landslides) or an earthquake pose a risk of negatively impacting the Company's
operations due to damage to retaining structures, which could result in partial collapse and a
subsequent flood wave.
Regular technical observation and monitoring are conducted at the high embankments (Bukovžlak
and Za Travnik).
Based on the results of our observations, we implement systematic and long-term maintenance
measures to ensure the stability of the barrier structures; where necessary, we take measures to
address the consequences of adverse weather conditions. One such incident was a landslide triggered
by heavy rainfall in August 2023 on the lower western section of the high embankment barrier at Za
Travnik. We are monitoring the landslide through measurements. We carried out an emergency
remediation, which will be followed by a comprehensive remediation, for which an environmental
provision has been established. A prerequisite for the remediation was the relocation of the cable
line, which we successfully completed in 2025.
24
An incident involving an industrial accident poses a potential risk of negatively impacting the
Company's operations. At the end of the year, a railway accident occurred in our area during ore
unloading; however, thanks to proper work organisation, it did not result in any production downtime
or negative environmental impacts.
We manage risk through systematic assessments of the impacts on the environment and employees,
periodic fire risk assessments, and the classification of jobs based on risk assessments.
In the area of mitigating environmental impacts, we are systematically implementing European
environmental standards by applying the principles of the Responsible Conduct Programme and
aligning our operations with the requirements of the IED and SEVESO Directives.
We conduct internal assessments of the adequacy of the implementation of the measures required
by the SEVESO permit and address any identified deficiencies.
In terms of fire safety, we have our own fire brigade, and the Company is also adequately insured
against fire.
We have a professional service dedicated to workplace accidents that ensures compliance with
occupational health and safety rules and measures. We conduct regular training and education
programmes for our employees. The Company is insured for liability.
We enter into written agreements with external contractors and provide them with training. We
employ a permanent coordinator for occupational safety and health. We introduced work instructions
for performing maintenance tasks with a focus on fire prevention, accident prevention, and improving
cleanliness in the workplace.
8 Regulatory compliance
The Company fills the Za Travnik waste disposal facility with waste red gypsum from titanium dioxide
production. The existing zoning plan (ZN) and building permit allow for filling up to an elevation of
300 metres above sea level, which, according to the latest projections, will be reached in 5–6 years.
Due to new circumstances and insights that have emerged during the construction process, the
project cannot be carried out as originally planned in certain areas, or doing so could result in the
collapse of the planned structures. Another negative aspect is the planned inadequate drainage,
which would lead to the site being partially flooded again by rainwater.
In response to the new circumstances and findings described above, the designer, with the technical
support of the Department of Geotechnics at the Faculty of Civil Engineering, University of Ljubljana,
has prepared a revised version of the Za Travnik project. This revision calls for increased quantities
of red gypsum and a different method of backfilling. The projected volumes have already been
included in the environmental permit, and the Ministry of the Environment and Spatial Planning
(MOPE) has issued a decision stating that the planned change does not require a new environmental
impact assessment. However, an amendment to the zoning plan and the building permit is required.
We have submitted the proposal to amend the zoning plan to all three municipalities concerned. A
resolution to initiate the amendment of the zoning plan must be adopted by all three municipalities.
At this time, one of the municipalities is not in favour of this.
According to the provisions of the Municipality of Šentjur’s decree, the Company should have ceased
filling operations by October 27, 2023. Due to the separation of white gypsum and significant
subsidence, which the backfilling project did not anticipate, the stated deadline was not achievable
25
in practice. We have been informing representatives of the Municipality of Šentjur and the Blagovna
Local Community about this since 2017, but they have insisted on the need to adhere to the stated
date. We obtained a legal opinion regarding the validity of such a decree. It concludes that the decree
is inconsistent with applicable legislation; therefore, we submitted a request to the Ministry of Natural
Resources and Spatial Planning (MNVP) to review the legality of the Decree on Amendments and
Supplements to the ZN Za Travnik Decree. The Ministry of Natural Resources and Spatial Planning
partially referred the complaint to the Ministry of the Environment, Energy, and Climate (MOPE) for
review; the latter concurred with the legal opinion and called on the Municipality of Šentjur to bring
the decree into compliance with applicable legislation within 90 days. Since it failed to do so, the
Government initiated a constitutional review procedure at the proposal of MOPE.
With the aim of promoting sustainable development and the circular economy, as well as extending
the available disposal time, the Company is also developing processes to reduce the volume of red
gypsum. We are continuing to take steps toward the adoption of a new, appropriate zoning plan for
the disposal of gypsum at a different location.
In the distant past, waste was also disposed of at the Bukovžlak Non-Hazardous Waste Landfill
(ONOB) site, from which rainwater and groundwater leach heavy metals. While we successfully
collect some of this leachate and send it to the Company for treatment, some of it escapes into the
environment. To minimise this impact, the Company is carrying out extensive remediation of this
area, for which it has also established an environmental provision. The remediation includes
reinforcing the embankment, restoring the drainage system and the deep pipeline (all three already
completed), the construction of channels for the drainage of backwater, the restoration of the C1
drainage system beneath the high-fill Bukovžlak embankment, the installation of a sealing curtain
and a minimised permeable cover, and the construction of a diversion embankment. Work on the
restoration of the C1 drainage system began in 2025, and in 2026 we will begin construction of the
sealing curtain.
In the field of chemicals, a series of compliance requirements has been established in accordance
with various laws and regulations around the world (REACH, registration of copper-based
preparations). Assessments of potential harm and the resulting withdrawal of products from the
market are underway (TMP, PFAS). Requirements regarding the use of plastics—both for food contact
and microplastics—are becoming stricter.
This legislation also affects our products. We are managing this risk through various approaches. We
are carrying out the necessary registration procedures and seeking alternatives for products whose
use may be restricted or even banned.
9 Financial risks
Credit risk: A potential risk arises from the possibility of increased expenses due to non-payment by
customers for whom we have not secured receivables, which accounts for approximately 5% of
receivables. As a safeguard, we implement internal credit controls for individual customers, for whom
we have set individual credit limits based on their ability to pay.
Liquidity risk: Failure to receive payments within the agreed timeframes due to customers’ insolvency
or poor payment discipline can lead to liquidity problems. We manage this risk by ensuring a stable
cash flow. The Company’s operations are traditionally conservative, with a high level of cash holdings.
Liquidity management includes, among other things, planning expected cash obligations and
covering them on a daily, weekly, monthly, and annual basis, continuously monitoring customers’
solvency, and regularly collecting past-due receivables. We regularly obtain up-to-date information
for more accurate cash flow planning. Cash flow is prepared in detail, thoughtfully, and accurately
on a weekly, monthly, and annual basis.
26
Currency risk: A loss of revenue and higher costs due to the euro/dollar exchange rate when
purchasing materials and raw materials in U.S. dollars (titanium-bearing raw materials, some copper
compounds) is the third potential financial risk. To mitigate this risk, we continuously monitor trends
and forecasts regarding the dynamics of the EUR/USD exchange rate. We primarily mitigate the
short-term risk of unfavourable changes in the dollar exchange rate through the standardised and
consistent use of financial instruments (dollar forward contracts). We also regularly obtain more
precise data for forward foreign exchange purchases.
2.3 Functioning of the General Meeting and shareholders' rights
The General Meeting is convened by the Management Board on its own initiative, at the request of
the Supervisory Board, or at the request of shareholders representing one-twentieth of the share
capital. The General Meeting reviews the annual report and makes binding decisions at the meeting
by a majority of the votes cast, in particular regarding:
• the appropriation of retained earnings,
• the appointment of members of the Supervisory Board,
• the discharge of members of the Management Board and Supervisory Board,
• the appointment of an auditor, etc.
It decides by a three-quarters majority, in particular, on the following matters:
• amendments to the Articles of Association,
• measures to increase or decrease the share capital,
• changes in the Company's legal form and its dissolution, as well as other cases where so
provided by law or the Articles of Association.
Shareholders may attend the General Meeting and exercise their voting rights only if they have
notified the Management Board of their intention to attend the General Meeting in writing no later
than the end of the fourth day prior to the date of the General Meeting. At the meeting, the number
of votes of each shareholder is determined by the shares held by the shareholder as recorded in the
share register as at the end of the seventh day prior to the date of the meeting. Shareholders may
exercise their rights attached to the shares either directly at the meeting or through proxies. The
proxy must be submitted in writing and filed with the Company. In principle, one General Meeting is
held per year.
On 21 May 2025, the 29th Annual General Meeting of Shareholders of the Company was held at the
Company's headquarters, where the shareholders:
• approved the Rules of Procedure for the General Meeting of Shareholders and an amendment
to the Articles of Association,
• adopted and approved the Remuneration Policy for Management and Supervisory Bodies,
• reviewed the Management Board’s annual report for the 2024 financial year, the auditor’s
report and its approval, and the report on the remuneration of members of the Management
Board and the Supervisory Board in 2024,
• adopted a resolution on the appropriation of retained earnings for 2024,
• granted discharge to the Management Board and the Supervisory Board for 2024,
• have been informed of the appointment of a member of the Supervisory Board, Matej
Pompeta, employee representative, for a five-year term of office that began on 18 June 2025.
In accordance with the law, the employee representative on the Supervisory Board is elected
by the Works Council of the company, which elected Matej Pompeta.
27
3 Strategic directions and future development
3.1 Strategic objectives and directions
The Company's strategy will continue to focus on ensuring the highest possible levels of production
volume and sales, as well as on utilising the potential of the most profitable pigment markets. The
Company's future development is based on the following four pillars:
• energy transition,
• digitisation,
• sustainable development,
• capacity expansion.
Sales efforts will continue to focus primarily on European markets. The Company's presence in
existing markets will be strengthened in the key strategic business area of titanium dioxide, as well
as in related areas and programmes of Kemija Mozirje (masterbatches, powder coatings), Kemija
Celje, and Polimeri.
Going forward, the Company will continue to strive for productive cooperation with its employees,
business partners, and the local community in order to maintain its successful operations and ensure
adequate returns for its owners. We plan to continue optimising our workforce structure through
redeployment and the recruitment of new, young, and technically skilled staff.
We will also continue to invest in development, training, and further improvements to the work
environment for our employees. In the coming years, we will continue the investment cycle necessary
for stable day-to-day operations and growth. We will continue to seek and implement additional ways
to reduce any potential adverse environmental impacts, while the Company will comply with all
environmental laws and regulations. However, stricter regulations in this area could pose an
additional risk.
The dividend policy will remain stable. Fifty percent of net income will be paid out as dividends.
In the new five-year strategic period from 2024 to 2028, which anticipates the peak of the cycle in
2028, the strategic objectives are as follows:
• average sales revenue of EUR 228.9 million,
• average EBITDA of EUR 36.9 million,
• average net profit of EUR 16.8 million.
Other components and directions are explained in more detail in the Sustainability Statement.
3.2 Plans for 2026
The plan for 2026 is based on an analysis of current market conditions, macroeconomic forecasts,
and specific factors within the titanium dioxide industry. Key priorities include optimising production,
adapting sales strategies, and investing in sustainable development and energy efficiency.
In 2026, we expect approximately EUR 194.3 million in sales revenue, which is in line with industry
trends and expected market cycles. Net income is projected to reach EUR 8.0 million, representing
a lower profit compared to 2025. The main reasons for the lower profit next year are the lower
average selling price of the key product and higher purchase prices of raw materials for sulphuric
acid production.
28
As a result, operating profitability will also decline. The projected EBITDA margin would be 13%,
which translates to approximately EUR 24.8 million in EBITDA in 2026.
We remain conservative in our financial approach—we do not plan to seek external financing. The
volume of investments will exceed the average of previous years through the elimination of
bottlenecks, energy efficiency, and a reduction in environmental impact. The Company will propose
a dividend payout 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.
We will place special emphasis on development projects aimed at improving quality, sustainable
solutions, and the rational use of resources. The employee compensation policy will be aligned with
business results and economic conditions, with the goal of ensuring long-term stability and social
security for employees.
3.3 Completed and planned investments
3.3.1 Completed investments
In 2025, we spent EUR 19.5 million on investments, the purchase of fixed assets, and replacement
equipment, thereby achieving 98.4% of the plan.
Table 3: Overview of investments by sector
Completed I–XII 2025
(in EUR)
Investments
10,794,636
Fixed assets
1,594,352
Replacement equipment
7,136,410
Total
19,525,398
We set up a 5G network at our location in Celje. We implemented the Kadris 4 Cloud system, designed
to digitise HR, registration, and payroll processes.
In 2025, in accordance with the requirements of the baseline report, we began a gradual renovation
of surfaces and sewer systems where hazardous substances are transported or flow.
In the area of environmental provisions, we carried out work on the C1 drainage system, and at the
end of the year, preparatory work on the construction of the sealing curtain also began, albeit with
a delay due to the foreign contractor’s schedule. We utilised 61.8% of the planned funds.
Table 4: Overview of investments by strategic pillar
Pillar
Completed I–XII 2025
(in EUR)
Sustainability and energy transformation
6,715,328
Quality and expansion of production
5,265,076
Digitisation
595,862
Other
6,949,132
Total
19,525,398
29
3.3.2 Planned investments
Investment activity in 2026 will be carried out on a programme-by-programme basis, taking into
account each programme’s needs, capabilities, and long-term prospects, and in accordance with the
Company’s strategic plan. The total volume of investments in 2026 is planned to amount to EUR 17.2
million.
In line with the sustainability strategy, the majority of capital expenditures will be allocated to
renewable energy projects (steam turbine, battery storage systems, fleet electrification).
We will continue to make significant investments in ensuring maximum capacity and quality of
titanium dioxide pigment while reducing emissions and waste materials.
Investments will also take place at our Bukovžlak and Za Travnik sites. In Bukovžlak, we will continue
with the remediation of the non-hazardous waste landfill, and at Za Travnik, we will proceed with the
permanent remediation of the landslide that occurred during heavy rainfall in August 2023. We will
utilise the environmental provision made for these purposes.
3.4 Research and development
Hydrophilic & hydrophobic organic treatment of titanium dioxide
Due to the classification of TMP as reprotoxic, we had to find a suitable substitute raw material for
hydrophilic products that does not carry a hazard label and allows for the same dispersibility of the
pigment. With the appropriate substitute raw material, we achieved the expected result.
In the field of hydrophobic treatment, we identified and implemented an additive that, in addition to
ensuring adequate hydrophobic treatment, also reduces the total carbon content in wastewater by
50%, which is significant in terms of its impact on water emissions.
Development and improvement of pigment quality
Our goals are focused on improving specific parameters (opacity, gloss, dispersibility, viscosity),
which, when applied, result in a higher-quality pigment. The measures implemented have already
yielded improvements in individual products, and further optimisations are underway with the aim
of systematically achieving all target values.
Waste acid treatment
In accordance with our plans, we are implementing measures to reduce the amount of waste gypsum
generated.
Evaluation of red gypsum
We are exploring the potential uses of red gypsum in the production of construction materials. Based
on preliminary laboratory results, we have signed a contract with external contractors to conduct a
more detailed study in four areas of application, which will serve as the basis for determining the
technical and economic feasibility of implementation.
Wastewater treatment at the Tremerje WWTP
We have commissioned the construction of a pilot plant to test ultrafiltration using a different type
of membrane. On-site testing will begin in the spring of 2026.
Development of a process for obtaining copper sulphate solution from ash
As part of our search for ways to incorporate cheaper and secondary raw material sources, we
investigated the use of waste copper from ash. Currently, its use is limited to the production of a
single product, which generates sodium chloride as a difficult-to-manage byproduct. By developing
a dissolution process in a different solvent, we aim to enable broader use of this resource and improve
30
the environmental performance of the process. Laboratory tests to date have not yet achieved the
target yield, so further optimisation will be the focus of future activities.
31
4 Operations
Total sales reached EUR 198.8 million during the period under review, a 1% decrease compared to
sales in the corresponding period of 2024. Total sales to foreign markets decreased by 1% compared
to the corresponding period of the previous year. The decline in sales to foreign markets is
undoubtedly a result of weaker pigment sales to markets outside the EU.
Table 5: Sales by market
2025
2024
ΔPY%
Slovenia
13,822,459
13,684,845
+1
EU
163,927,291
162,234,825
+1
Third countries
16,427,125
19,080,093
-14
Third countries – dollar markets
4,624,406
5,285,650
-13
TOTAL
198,801,281
200,285,413
-1
Sales to the EU market in 2025 were 1% higher than in the previous year, with both higher sales
volumes of pigments and slightly more favourable sales prices contributing to this growth. Sales on
the domestic market were also 1% higher compared to 2024, primarily due to significantly better
sales of BU Polimeri linked to major projects in the regional pharmaceutical industry. Total sales to
third-country markets, meanwhile, were 14% lower; however, due to price uncompetitiveness in
certain Middle Eastern regions, we successfully redirected a portion of the volumes to the North
American market, particularly the U.S. In the medium term, we plan to strengthen marketing
activities in these markets, which present an opportunity for greater geographic diversification and
revenue stabilisation. The scope and sustainability of this strategy will largely depend on the further
development of global trade relations and protectionist measures.
During the period under review, the share of exports in total sales reached 93.0%, which is 0.1
percentage points lower than in the same period last year. The key product, titanium dioxide pigment,
remains the driver of exports and the foundation for further expansion into foreign markets, where
we are striving to consolidate our presence primarily in stable, regulatory-protected, and long-term
promising markets.
The sales structure by individual market adapts to operational and macroeconomic conditions on a
quarterly basis, while in the long term it is guided by risk diversification, profitability criteria,
alignment with the marketing strategy, and assessments of political and economic stability. The
strengthening of anti-dumping protection in the EU further reinforces the strategic focus on safer
and long-term sustainable markets with higher added value, where the Company sees the greatest
potential for stable operations. At the same time, marketing activities are also directed toward
countries that are introducing or announcing the introduction of protective measures against the
dumping practices of price-aggressive competitors, such as Brazil and India, as such markets may
present an opportunity in the future to increase the competitiveness of European manufacturers.
Table 6: Sales by business segment
2025
2024
ΔPY%
Titanium dioxide
168,872,162
168,728,022
+0,1
- of which TiO
2
pigment
165,284,697
165,044,453
+0,1
Varnishes, masters and printing inks
14,663,429
16,140,315
-9
Agro programme
10,117,320
11,150,638
-9
Polymers
4,590,585
3,379,268
+36
Other
557,786
887,171
-37
TOTAL
198,801,281
200,285,413
-1
32
During the period under review, sales of the core product, titanium dioxide pigment, reached EUR
168.9 million, representing a 0.1% increase compared to the same period last year. A more
favourable price environment on European markets contributed significantly to this result in the first
half of the year, as demand in the first quarter strengthened faster than seasonal expectations. In
the second quarter, the first signs of a slowdown in market activity began to emerge, while the
cooling of demand was more pronounced in the third quarter, which affected sales dynamics and
confirmed the gradual deterioration of conditions in the remainder of the year. Under these
circumstances, we adapted our sales activities to conditions in individual markets and partially offset
lost market share in the Middle East by shifting our focus toward the North American market and
markets where protectionist trends and additional regulatory measures against Chinese imports are
creating more favourable conditions for Western manufacturers.
Within the TiO2 division’s programmes, special mention should be made of the waste generated
during TiO2 production, CEGIPS, of which 153,800 tonnes were sold in 2025. This sales volume is
particularly significant, as it reduces the amount of gypsum that is dry-filled at the Za Travnik gypsum
disposal facility. This directly contributes to extending the facility’s service life.
During the period under review, we recorded a 9% decline in sales in the varnishes and masters
product line, primarily due to the challenging market conditions in this segment. Demand in this part
of the supply chain remains under pressure due to weak industrial activity and customers’ reluctance
to build up inventories.
Sales of the agro programme, which includes copper fungicides, Pepelin, copperas, and Humovit,
fell by 9% during the period under review compared to the same period in 2024. This result was
influenced by lower sales volumes, although it is important to note that the transactions concluded
had higher added value. We are managing to maintain Humovit sales at the level of previous years,
but they remain primarily tied to the domestic and nearby markets. Due to additional transportation
costs, the product has a harder time penetrating more distant markets, which limits its geographic
reach and underscores the importance of optimising distribution at the local level.
During the period under review, the relative proportions among the business units adjusted once
again. With the exception of BU Titanov dioksid and BU Polimeri, the share of the remaining units
decreased. BU Polimeri remains closely linked to the investment dynamics of the pharmaceutical and
petrochemical sectors in the region, which confirms its strategic focus on contract manufacturing
with a high degree of technical flexibility and a focus on specific customer needs. This model enables
differentiation and the strengthening of long-term partnerships, but is at the same time sensitive to
fluctuations in the industry’s investment cycles.
Adjustments to our business models are leading to a restructuring of the scope and focus of individual
business units, which has already resulted in a reduction in their number. In this context, we expect
further growth in the relative importance of our core titanium dioxide production programme, which
will be further strengthened in the coming periods as a key source of value creation within our
business structure.
In accordance with Regulation (EC) No. 1893/2006, which establishes the statistical classification of
economic activities in the European Union (NACE), our activities fall under Section 20.2 –
Manufacture of pesticides and other agrochemical products. The Company is engaged in the
manufacture of chemicals, which includes the production of copper fungicides used in agriculture to
protect plants against fungal diseases. Sales are reported under the item Agro Programme. In
accordance with the EU NACE classification of economic activities, the Company is classified under C
20 – Manufacture of chemicals and chemical products, specifically under 20.12 – Manufacture of dyes
and pigments. Based on Delegated Regulation (EU) 2022/1288, which supplements the EU Low
33
Carbon Benchmark Regulation (EU BMR), the chemical and pigment manufacturing sector is classified
as a high-carbon industry.
4.1 Operating result
Table 7: Operating result
2025
2024
ΔPY%
Operating income
210,021,191
204,135,737
+3
Operating expenses
187,794,486
177,471,493
+6
OPERATING RESULT
22,226,705
26,664,244
-17
Financial income
1,355,916
1,986,327
-32
Financial expenses
266,140
123,439
+116
OPERATING RESULT BEFORE TAX
23,316,482
28,527,133
-18
Income tax
3,846,936
5,439,882
-29
NET OPERATING RESULT
19,469,546
23,087,250
-16
In 2025, the operating result amounted to EUR 22.2 million. This figure represents 83% of the
operating result for the same period in 2024, when it stood at EUR 26.7 million. Although the
Company's performance was weaker than last year's, it still exceeded the targets set in the business
plan. This exceeding of the planned result was mainly influenced by strong sales of the flagship
product. Operating profit before depreciation and amortisation, or EBITDA, reached EUR 36.1 million,
representing 18.2% of total sales. Compared to the previous year, EBITDA is 8.8% lower.
After adjusting for the impact of financial income and expenses, the operating result before tax
for 2025 amounted to EUR 23.3 million; in the same period last year, the result before tax was EUR
28.5 million. The result before tax represents 82% of the previous year’s result.
In 2025, similar to 2024, a positive financing balance was achieved, amounting to EUR 1.1 million
(in 2024, the positive financing balance was EUR 1.9 million). The resulting financing balance stems
from a positive balance of investment and interest income and expenses amounting to EUR 1.4
million and a negative balance of exchange rate differences (forward contracts) and interest
amounting to EUR 0.3 million, achieved through the use of hedging instruments to manage the
volatile movements of the USD/EUR currency pair when purchasing titanium-bearing ores. The
positive balance from investments reflects the effective use and placement of surplus funds in
profitable investments.
Net operating result for the accounting period amounts to EUR 19.5 million, which is 16% lower
than the figure recorded in the same period of 2024, when it stood at EUR 23.1 million. Taking into
account developments in the global economy, the titanium dioxide pigment market, and, above all,
the results of competitors in the titanium dioxide industry, we assess the result as good and above
expectations. Net operating result includes operating result before tax and calculated income tax of
EUR 3.9 million (the effective tax rate is 16.5%).
4.2 Expenses and costs
Within the overall cost structure, material costs account for the largest share, namely 61.7%. In the
breakdown of raw material, packaging, and energy consumption, certain deviations are noticeable
compared to the corresponding period in 2024, with the increase in energy costs being the most
pronounced in relative terms. This must also be interpreted in the context of lower production.
34
Purchase prices for titanium-bearing raw materials remained roughly at the previous year’s levels
during the period under review, or were even slightly lower in some cases, while prices for sulphur,
a key input material for acid production, rose. Although production volume was slightly lower than
in 2024, the total cost of raw materials nevertheless increased by 3%, primarily due to higher prices
for certain auxiliary chemicals and other purchased inputs.
Raw materials and supplies continue to dominate the structure of production costs, accounting for
82.8%, followed by energy at 15.7% and packaging at 1.6%. The structure of labour costs is
disclosed in Note 22 to the Financial statements, Operating expenses. Gross salaries were determined
in accordance with the provisions of the collective agreement, taking into account agreements
between the trade unions and the Management Board. Commuting and meals during work are in
accordance with applicable regulations. Labour costs include supplementary pension insurance,
performance-based payments, severance pay, other employee benefits, costs for solidarity support,
anniversary awards, and other items.
4.3 Assets and resources
Table 8: Assets and resources
31 December 2025
31 December 2024
ASSETS
Intangible assets
2,142,639
2,408,779
Tangible fixed assets
116,232,009
111,699,615
Financial assets at fair value through other comprehensive income
1,709,631
1,287,325
Other non-current assets
115,376
105,470
Deferred tax assets
1,192,860
1,462,488
Total non-current (long-term) assets
121,392,516
116,963,678
Current assets
Inventories
54,460,671
58,969,428
Financial receivables
38,456,959
47,214,859
Trade receivables
26,096,057
30,243,586
Income tax receivable
1,283,140
0
Cash and cash equivalents
19,122,785
17,731,407
Other current assets
424,474
230,760
Total current assets
139,844,086
154,390,040
Total assets
261,236,601
271,353,718
The share of non-current (long-term) assets in the total asset structure increased by 3.4
percentage points compared to the end of 2024, reaching 46.5%. Tangible fixed assets remain the
largest category of non-current assets (96%). Their value increased by 4% compared to the end of
2024, based on the difference between the amount invested in tangible fixed assets and the actual
depreciation charged in 2025. Long-term financial investments in electricity companies were revalued
to fair value at the end of 2025 and were therefore reported as 33% higher compared to the previous
year. Deferred tax assets decreased by 18% in 2025 due to a reduction in a specific portion of long-
term environmental provisions related to remediation procedures. Other non-current assets consist
of emission allowances obtained free of charge from the state. Their balance as at 31 December 2025
is EUR 9,900 higher than the balance as at 31 December 2024 as a result of the balance between
the acquisition of allowances for 2025, and the transfer to ARSO for CO
2
emissions for 2024 and the
anticipated transfer for CO
2
emissions for 2025.
The share of current assets in the total assets structure decreased by 3.4 percentage points
compared to the end of the previous year, amounting to 53.5%. Within the structure of current
35
assets, the most significant categories by value are inventories (39%), financial receivables (27%),
trade receivables together with other current assets and income tax receivables (20%), and cash
and cash equivalents (14%).
Inventories decreased by 8% compared to the end of 2024, with the value of raw material
inventories (including advances) decreasing by 24% and the value of work-in-progress inventories
decreasing by 4%. However, the total value of the Company's finished goods and merchandise
inventories increased by 33% (all compared to the end of 2024). The most significant reason for the
increase in finished goods inventory is the lower volume of pigment sales relative to its production
in 2025, specifically in the fourth quarter of 2025.
Current financial receivables as at 31 December 2025 consist mainly of investments in short-
term treasury bills intended to ensure the efficient use of cash, and decreased by 19% compared to
the balance at the end of 2024.
Current trade receivables include current trade receivables from customers and current trade
receivables from others (primarily from the government for input VAT) as well as receivables related
to income tax. Compared to the balance at the end of 2024, trade receivables decreased by 14%.
Receivables from customers decreased by 15% due to lower sales, while other current receivables
remained at the same level as at the end of 2024. Income tax receivables in the amount of EUR 1.3
million relate to the difference between overpaid income tax prepayments for 2025 and the actual
income tax assessed for 2025. An overview of trade receivables by due date indicates that the aging
structure of receivables remains sound and is secured by an external institution or another form of
collateral.
Cash (and cash equivalents) account for 14% of total current assets; the amount of cash increased
by 8% compared to the last day of the previous year. A portion of the cash, amounting to EUR 7
million, consists of short-term bank deposits.
Other current assets consist of prepaid expenses and deliveries of goods over which the Company
will acquire ownership rights in 2026. The value increased by 84%.
Table 9: Capital and liabilities
31.12.2025
31.12.2024
CAPITAL AND LIABILITIES
Called-up capital
20,229,770
20,229,770
Capital reserves
44,284,976
44,284,976
Profit reserves
125,036,192
125,078,814
Fair value reserve
-1,354,842
-1,650,342
Retained earnings
28,558,990
23,093,258
Total capital
216,755,086
211,036,476
Provisions for employee benefits
3,819,086
3,748,722
Other provisions
12,746,394
14,302,270
Long-term deferred income
861,858
873,579
Total non-current liabilities
17,427,338
18,924,572
Financial liabilities
60,832
29,915
Operating liabilities
24,885,606
36,124,537
Income tax liabilities
0
4,019,469
Other current liabilities
2,107,739
1,218,750
Total current liabilities
27,054,177
41,392,670
Total capital and liabilities
261,236,601
271,353,718
36
The value of capital in the structure of liabilities to sources of funds as at 31 December 2025
accounts for 83%, which is 5.2 percentage points higher than at the end of 2024. The amount of
capital increased by 3% compared to the end of 2024. The increase (EUR 5.7 million) relates to the
balance between the net profit for 2025 in the amount of EUR 19.5 million, expenditures for the
purchase of treasury shares in the amount of EUR 42,622, and the payment of dividends based on
the resolution of the 29th Annual General Meeting of Shareholders held on 21 May 2025 in the
amount of EUR 14 million. As at 31 December 2025, the Company holds 299,874 treasury shares
(3.7% of all shares). In accordance with the resolution of the 28th Annual General Meeting of
Shareholders of the Company dated 19 June 2024, the Company acquired 1,490 treasury shares in
2025 with a value of EUR 42,622. There were no other significant changes in capital except for a
change in fair value reserves due to the revaluation of investments and actuarial gains in the amount
of EUR 0.3 million.
Of the total capital, the share capital amounts to EUR 20.2 million, consisting of 8,079,770 ordinary
freely transferable shares following the 1:10 stock split effective from 15 August 2022 (of which
299,874 are treasury shares held in the treasury stock account) . The book value of a share as at 31
December 2025 amounts to EUR 26.8 (an increase of 2.7% from the beginning of the year, when it
stood at EUR 26.1).
Provisions and deferred income account for 6.7% of liabilities to sources of funds. Provisions for
pensions and similar obligations were established as of 1 January 2006 (severance pay and long-
service awards) and are adjusted annually based on actuarial calculations. Other provisions were
established during the ownership transfer process in connection with environmental provisions, and
additional provisions were established for the remediation of the Bukovžlak solid waste landfill and
the Za Travnik landfill. At the end of 2025, similar to the end of 2024, we re-evaluated the amount
of provisions and adjusted them accordingly based on actual market conditions and the reasons for
their existence. The amount of environmental provisions decreased by 11% at the end of 2025 to
cover the costs of remediation projects. Non-current deferred income decreased by 1% due to the
amortisation of acquired assets for the co-financing of electric vehicles and solar power plants
purchased in 2024 and 2025.
Financial and trade payables decreased by 35% compared to the balance at the end of the
previous year due to a reduction in current liabilities arising from the settlement of payables to
suppliers, employees, and the government for income tax. Liabilities to suppliers thus decreased by
32% for the aforementioned reason. Other current trade payables decreased by 28% due to lower
liabilities to employees and government institutions. There are no liabilities for income tax for the
2025 fiscal year, as the advance payments made during 2025 fully cover and exceed the calculated
tax liability for 2025 (the surplus is recognised among income tax receivables in the amount of EUR
1.3 million). All financial and operating liabilities are current. The Company's gross gearing ratio is
10.4%, a decrease of 4.9% compared to the balance as at 31 December 2024.
Current financial liabilities as at 31 December 2025 amount to EUR 61,000; at the end of 2024,
they amounted to EUR 30,000. The Company's financial gearing ratio is therefore 0.2 ‰ (at the end
of 2024, it was 0.1 ‰).
Current trade payables decreased by 31% during the period under review. Current trade payables
to suppliers amounted to EUR 21.2 million as at 31 December 2025 and decreased by 32% compared
to the end of 2024 due to the settlement of payables to suppliers of strategic raw materials. Other
trade payables decreased by 28% (or EUR 1.5 million), and primarily include EUR 1.6 million in
liabilities for the payment of net salaries to employees and other net payments arising from
employment relationships, EUR 2.1 million in liabilities for contributions and taxes on personal
income, as well as liabilities for VAT and to other institutions.
37
Other current liabilities increased by 73% during the period under review. They primarily include
accrued liabilities for annual leave and other labour costs, prepaid environmental contributions and
taxes, and VAT on advances paid.
4.4 Shares and dividends
The share capital of the Company 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
299,874 shares (or 3.7% of the total issue). The number of shareholders at the end of the period
was 3,146. The ownership structure at the end of the period is shown in the table below.
Table 10: Share ownership structure of the Company
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.
424,458
5.25
TR5 d.o.o
364,943
4.52
Treasury shares
299,874
3.71
KRITNI SKLAD PRVEGA POKOJNINSKEGA SKLADA
166,450
2.06
RAIFFEISEN BANK AUSTRIA D.D. – FID
157,340
1.95
NLB Skladi - Slovenija mešani
107,972
1.34
Intercapital securites Ltd – fid.
83,151
1.03
Zagrebačka banka d.d. – fid.
69,380
0.86
Privredna banka Zagreb d.d. – fid.
65,985
0.82
Generali Jugovzhodna Evropa
56,000
0.69
Internal shareholders – FO
52,849
0.65
External shareholders – FO
1,992,379
24.66
Others
634,819
7.85
Figure 2: Movement in the number of shareholders at the end of the year/period
The CICG shares of the Company 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.
1.500
1.700
1.900
2.100
2.300
2.500
2.700
2.900
3.100
3.300
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Number of shareholders
38
Table 11: Movement in the market value of the shares (share price on the last day of the month) and the value of turnover
Uniform share price
Turnover
2024
2025
2025
JAN
23.6
27.8
924,972
FEB
20.9
30.4
4,362,905
MAR
21.5
31.3
1,077,570
APR
21.8
31.6
1,737,393
MAY
21.6
34.8
2,128,891
JUN
22.3
34.5
1,366,093
JUL
23.8
33.0
2,049,975
AUG
24.5
34.6
1,602,298
SEP
28.5
35.1
703,312
OCT
28.7
33.8
1,626,639
NOV
27.0
32.5
1,275,315
DEC
27.7
31.5
1,350,897
The share price of the Company listed on the main market of the Ljubljana Stock Exchange (under
the code CICG) fluctuated between EUR 27.5 per share and EUR 36.0 per share during the period
under review. From the last trading day of 2024 to the last trading day of the period under review,
the share price increased by 14%.
Figure 3: Monthly trends in Company's stock price (right axis) and trading volume (left axis)
0
5
10
15
20
25
30
35
40
0
2.000.000
4.000.000
6.000.000
JAN FEB MAR APR MAJ JUN JUL AVG SEP OKT NOV DEC
Stock market trading Share price
39
5 Sustainability Statement
5.1 ESRS 2 General disclosures
5.1.1 [BP] Basis for preparation
5.1.1.1 [BP-1] General basis for preparation of sustainability
statements
Company is once again preparing its Sustainability Statement this year with the support of the
sustainability team, which consists of representatives from key business areas. The team’s operations
have been further strengthened compared to last year, as the Company has welcomed a new
employee dedicated exclusively to sustainability, enabling more systematic development and
coordination of sustainability activities. In preparing the statement, the Company continues to
collaborate with an external expert consultant who provides methodological support and ensures
compliance with regulatory requirements. This year marks the second time the statement has been
prepared in accordance with the Corporate Sustainability Reporting Directive (CSRD) and the
European Sustainability Reporting Standards (ESRS). Compared to the first publication, individual
disclosures have been supplemented and enhanced, in line with the experience gained during the
first year of reporting and the development of internal processes for managing sustainability issues.
This statement is based on data from the parent company, as the Company has no subsidiaries or
other affiliated companies and therefore does not constitute a group. The Company applies the same
scope of consolidation as in its financial statements.
In 2025, we conducted our regular annual review of the double materiality assessment (DMA) to
verify the relevance and consistency of the impacts, risks, and opportunities identified in 2024. The
review was conducted in accordance with the Company’s Policy on the Management of Impacts,
Risks, and Opportunities and enables regular verification of the relevance of the identified topics in
light of the situation, strategy, and stakeholder expectations. The methodology and assessment
criteria remain unchanged. For the base year, we used 2021 for certain indicators and maintain this
in this statement.
Scope of the value chain
The Company analysed and assessed the significance of impacts, risks, and opportunities in the
upstream and downstream parts of the value chain within the framework of the DMA and the
definition of the business model. Several value chains were identified, with the TiO₂ chain being
determined as the most significant. In the process of identifying material topics, the Company did
not identify any material topics arising from the upstream or downstream parts of the value chain.
In its 2025 reporting, the Company did not exercise the right to omit material information relating
to intellectual property, expertise, experience, or innovation outcomes. Nor was the exemption from
disclosing anticipated events or matters subject to ongoing negotiations applied.
40
5.1.1.2 [BP-2] Disclosures in relation to special circumstances
5.1.1.2.1 Time horizon
For the purposes of sustainability reporting, the Company defined the following time horizons:
• short-term period: 2025;
• medium-term period: 1 January 2026 – 31 December 2028, in line with the strategic
planning period, during which key sustainability measures are already planned;
• long-term period: 1 January 2029 – 31 December 2030, in accordance with the timeframes
set out in the Company's sustainability strategy.
5.1.1.2.2 Value chain
a. Definition of metrics
The Company monitors Scope 3 greenhouse gas emissions, specifically at the first level of the upper
and lower parts of the value chain (suppliers, customers, transportation). Particular emphasis is
placed on emissions related to raw material extraction and the logistics of finished products. Data on
the carbon footprint of key suppliers was obtained, and for transportation, the modes of transport
and distances travelled were analysed.
b. Basis for preparation
Emissions estimates are based on:
• emission factors from expert databases, when suppliers do not provide specific data;
• data on transport routes, modes of transport, and distances travelled;
• currently, the Company does not yet track direct data on water or energy consumption in
the broader value chain.
c. Level of accuracy
The reliability and accuracy of emissions data in the value chain depend directly on the quality of the
information received from suppliers and on the availability of appropriate standardised emission
factors. For transport, we can estimate impacts with relative accuracy when data on distances
travelled and modes of transport used are available. For emissions from raw materials, however, we
mostly rely on indirect data from existing databases.
d. Measures to improve accuracy
The Company intends to improve the reliability and accuracy of emissions estimates in the value
chain through the following measures:
• continued systematic collection of carbon footprint data from key raw material suppliers where
such data is not yet available;
• refining models for calculating transport emissions by incorporating additional information on
fuels used and transport energy efficiency;
• exploring the possibility of incorporating additional parameters (e.g., more detailed data on raw
material production processes) to improve the accuracy of future calculations;
• actively participating in sector-specific initiatives that provide access to more accurate average
data specific to the titanium dioxide industry.
41
5.1.1.2.3 Sources of uncertainty in estimates and results
The Company notes that certain quantitative metrics and financial figures included in this statement
are subject to a higher degree of uncertainty. This applies in particular to estimates of Scope 3
greenhouse gas emissions, assessments of social impacts on the local environment, and assessments
of impacts on water resources.
a. Metrics with greater uncertainty
The highest level of measurement uncertainty is found in the following areas:
• GHG emissions in Scope 3, particularly those resulting from transportation and the use of
raw materials;
• assessments of social impacts on local communities and the evaluation of social impacts;
• assessment of water use and impacts;
• indirect financial projections related to future regulations and market changes.
b. Main sources of uncertainty
The following factors primarily contribute to measurement uncertainty:
• dependence on future developments (e.g., changes in legislation and market conditions,
including potential bans on certain substances);
• the use of average or generic emission factors when specific data from suppliers are not
available;
• incomplete or partial data from upstream and downstream parts of the value chain;
• differences in data collection and estimation methodologies (e.g., the use of estimated
transport distances and industry averages);
• variability in data related to local environmental conditions.
c. Assumptions and expert judgments used
In evaluating the metrics, we used the following key assumptions:
• that the average emission factors from the databases are representative for the emissions
calculations in Scope 3;
• that publicly available data sources provide a sufficiently reliable basis for assessing
environmental and social impacts;
• that existing market and regulatory conditions will not change significantly in the short term;
• that the Company's internal data represent the best source for preparing the calculations.
Since the mix of primary energy sources for electricity generation in 2025 will not be published until
June 2026, we used data on the mix of primary energy sources for 2024 to estimate the breakdown
of electricity consumption in 2025.
We also note that certain quantitative metrics for determining emissions of substances into the air,
water, and soil are subject to a higher degree of measurement uncertainty. This applies in particular
to emission metrics based on measurements conducted at low frequencies (once every three or five
years, or once a year). These are measurements taken under specific operating conditions, and it is
assumed that the values (concentrations) measured in this way are representative of the entire year;
therefore, certain metrics are partly the result of estimation. Water discharge volumes are partially
monitored through measurement and are subject to measurement uncertainty of the meters; they
are partially estimated based on water consumption (consumption measurement). Regarding data
on waste generation (circular economy), a significant source of uncertainty is primarily the method
of processing and disposal of collected waste, as the uncertainty stems from data provided by waste
collectors after collection, over which we have only limited influence.
42
For certain data points, the best available data is used, but there is a degree of measurement
uncertainty associated with measurements, calculations, conversions, and the collection and
assessment of data within the value chain. Social impact is estimated due to the variability of
conditions and data quality. Therefore, publicly available data, among other sources, was also used
to assess impacts and risks. This is an ongoing process that will be refined and improved.
5.1.1.2.4 Changes in methodology
For category S1-14 in Table 96, the Company reported the number of days lost due to work-related
injuries for 2024 based on the number of lost workdays. For 2025, the Company is changing its
reporting metric in accordance with S1-14 AR95 and is presenting the data on the number of lost
days due to injuries for 2024 and 2025 in accordance with the metric change.
5.1.1.2.5 Reporting errors in prior periods
Two errors were identified in the annual report for the 2024 reporting period, which we are correcting
in this statement.
In the 2024 reporting year, the projected Scope 3 emissions (in t CO₂ equivalent) for 2028 and 2030
were calculated incorrectly because the wrong conversion factor was used relative to the base year
2021. In this year’s report, these figures have been corrected and are correctly presented in Table
40 in Section E1-4.
In Section E2-5, the presentation of quantities of substances of concern (SoC), substances of very
high concern (SVHC), and the corresponding revenue from these products for the reporting year
2024, as these quantities were incorrectly reported in last year’s report due to a manual calculation.
The error occurred because the system for data collection had not yet been established; therefore,
this section lists the relevant corrections and the difference for the year 2024.
5.1.1.2.6 Disclosures required under other legislation
The statement includes the Report on Environmentally Sustainable Economic Activities and
Investments of the Company for 2025, in accordance with Regulation (EU) 2020/852 establishing a
framework to promote sustainable investment and its amendment 2021/2139.
5.1.1.2.7 Inclusion by reference
Some disclosures in the Sustainability Statement are included by reference. In such cases, the
relevant disclosure includes a reference to a section within the Sustainability Statement or to the
accounting section of the Annual Report.
We assess financial significance as part of our risk and opportunity identification process. We have a
system in place that is described in the Rules on the Management of Impacts, Risks, and
Opportunities at the Company, and presented in more detail in the Annual Report in section [IRO]
Table 12: List of disclosures by reference
Incorporation of sustainability-related performance
into incentive schemes
GOV-3
Financial statements, Chapter 6 – Related-party
transactions in the financial section of the report
Expected financial effects of material physical and
transition risks and potential opportunities related to
climate
E1-9
Note 25: Impact of climate change on financial
statements
Report on environmentally sustainable economic
activities and investments – ESRS 2
ESRS 2
Statement of financial position and income
statement in the financial section of the report
43
5.1.1.2.8 Use of phased disclosure
The Company has exercised the option of phased disclosure for 2024 and 2025 in relation to E3-5
Expected financial impacts of material risks and opportunities related to water resources and E5 -6
Expected financial impacts of significant risks and opportunities related to resource use and the
circular economy.
5.1.2 [GOV] Governance
5.1.2.1 [GOV-1] Role of administrative, management and supervisory
bodies
The Company has a two-tier management system consisting of the Management Board and the
Supervisory Board. The Management Board manages the Company’s operations in the Company’s
best interests, independently and on its own responsibility; it represents and acts on behalf of the
Company and is accountable to both the General Meeting and the Supervisory Board. It is a collective
body composed of a President and up to three members. The position of President or Member of the
Management Board may be held by a person who, in addition to meeting the statutory requirements,
also meets the requirement of at least a university degree and at least five years of work experience.
The President of the Management Board is also the Company’s Chief Executive Officer.
Table 13: Composition of the Management Board in the 2025 financial year
Full name
Function
Area of
responsibi-
lity in MB
First
appoint-
ment to
position
End of
function
Gender
Citizenship
Year
of
birth
Education/
professional
profile
Membership
on
supervisory
bodies of
non-
affiliated
companies
Aleš Skok
President
IT, finance,
sales,
procurement,
legal
1/7/2020
1/7/2030
M
Slovenian
1967
BSc. Chem.
Eng., MBA -
USA
/
Nikolaja
Podgoršek
Selič
Member –
Technical
Director
development,
sustainability,
technology,
occupational
safety and
health
30/6/2005
(first term)
1/7/2020
(current
term)
31/1/2027
F
Slovenian
1962
BSc. Chem.
Eng., Spec.
/
Filip
Koželnik
Member –
Employee
Director
HR and
social issues
5/11/2020
5/11/2025
M
Slovenian
1992
MSc
(Business
Studies)
/
Nika
Veronovski
Member –
Employee
Director
HR and
social issues
10/11/2025
10/11/2030
F
Slovenian
1979
Doctor of
Science in
Environmental
Engineering
/
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.
NIKOLAJA SELIČ PODGORŠEK − A university-trained chemical engineer and specialist in industrial
process control technology, she began her career at Cinkarna Celje, d. d., in the titanium dioxide
production division. In her early years, as a process engineer, she designed and implemented new
and updated production processes and participated in the introduction of process automation. She
then led the product and technology development department and managed several investment
44
projects aimed at expanding and modernising titanium dioxide production. For the past 21 years, as
a member of the Management Board and Technical Director, she has overseen the areas of
production, maintenance and energy, development, quality, occupational safety and health, and the
environment.
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 later took on responsibility for strategic analysis, investor
relations, and economic feasibility studies. As a member of the Management Board and employee
representative, he helped shape the Company's strategic, financial, and organisational direction and
represented the interests of the employees.
NIKA VERONOVSKI – She holds a Ph.D. in Environmental Engineering and has extensive research,
development, and industrial experience in the fields of pigmental TiO₂, surface chemistry,
dispersions, and nanomaterials. For more than fifteen years, she has been working at the Company,
where she leads demanding strategic and development projects related to new product development,
production process optimisation, the introduction of innovative technologies, and technical support
for customers. She has extensive experience leading research groups, collaborating with domestic
and international research institutions, industry, and end-users, as well as dealing with regulatory
issues. Her work is complemented by patent applications, numerous professional and scientific
publications, and mentoring undergraduate and master’s theses. On the Management Board, in
addition to representing the interests of the Company and all stakeholders, she advocates for
employees’ interests 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.
45
Table 14: Composition of the Supervisory Board and Committees in the 2025 financial year
Full name
Function
First appointment to
position
End of
function/
term
Representative
of capital/
employees
Attendance
at SB
meetings
in relation
to the 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
during the
year
Membership
on
supervisory
bodies in
other
companies
Tomaž
Berločnik
SB Chairman
from
23/7/2024, SB
Member from
19/6/2024-
23/7/2024
19/6/2024 − Member
23/7/2024 −
Chairman
19/6/2029
Representative
of capital
6/6
M
Slovenian
1968
BSc (Mech. Eng.)
and Master of
Business
Administration
(MBA)
YES
NO
/
Melita
Malgaj
SB Deputy
Chair from
23/7/2024 SB
Member from
19/6/2024
19/6/2024 − Member
23/7/2024 − Deputy
Chair
19/6/2029
Representative
of capital
6/6
F
Slovenian
1971
BSc (Economy)
YES
NO
Slovenske
železnice
d. o. o.
Jože
Koštomaj
SB Member
18/6/2020
17/6/2025
Representative
of employees
1/3
M
Slovenian
1968
Mechanical
Engineer
YES
NO
/
Aleš
Stevanovič
SB Member
18/6/2015 (first term)
8/3/2023 (current
term)
7/3/2028
Representative
of employees
6/6
M
Slovenian
1966
Chemical Technician
YES
NO
/
Boštjan
Furlan
SB Member
19/6/2024
19/6/2029
Representative
of capital
5/6
M
Slovenian
1972
Mechanical
Engineer
YES
NO
Krka d. d.
Dubravka
Derossi
Uršič
SB Member
24/12/2024
23/12/2029
Representative
of capital
6/6
F
Slovenian
1975
Master of Business
Administration
YES
NO
/
Matej
Pompe
SB Member
18/6/2025
17/6/2030
Representative
of employees
3/3
M
Slovenian
1987
BSc (Economy)
YES
NO
/
Table 15: External members of Committees
Full name
Gender
Citizenship
Education/professional profile
Year of birth
Membership on supervisory bodies in other companies
Gregor Korošec
M
Slovenian
BSc (Economy)
1971
Chairman of the AJPES Council
46
Experience and educational background of the members of the Supervisory Board
Mag. TOMAŽ BERLOČNIK − He has more than 20 years of experience in managing and overseeing
large companies and is best known as the former CEO of Petrol d. d., for which he was named
Manager of the Year in Slovenia by the Managers' Association of Slovenia in 2019. He also has many
years of experience as a member of supervisory boards, including at Elan d. d., Petrol d. d., Droga
Kolinska d. o. o., Slovenske železnice d. d., Telekom Slovenije d. d., and Geoplin d. o. o. He is
currently pursuing a mission to improve the quality of the living environment through investments
in renewable energy sources via Alfi Renewables d. o. o., serving as a partner and chairman of the
Investment Committee of the Fund, which invests in solar and wind energy in Southeast Europe.
MELITA MALGAJ − She has more than 30 years of experience in corporate governance, the sale of
equity investments, corporate restructuring, legal reorganisations, and the management of complex
projects. She also has extensive experience in corporate oversight and management, having served
on supervisory boards since 1997. In the past, she served as a member of the Management Board
of PDP d. d., and was a member of the supervisory boards of Banka Celje d. d. and Abanka d. d. As
part of Abanka’s Supervisory Board, she also served as a member of the Audit Committee and as
Chair of the Appointments Committee. She is employed at Slovenski državni holding d. d., where
she serves as Director of the Economic Sector. She is currently also a member of the Supervisory
Board of Slovenske železnice d. o. o., and Chair of the Supervisory Board’s Audit Committee.
JOŽE KOŠTOMAJ − He has more than 25 years of experience in various departments at Cinkarna
Celje, d. d., most of which was spent in the Metalurgija business unit, where he also served as Deputy
Director. He currently serves as the head of the central warehouse.
ALEŠ STEVANOVIČ − He has been employed at Cinkarna Celje, d. d., for 38 years, working in the
quality department. He has also been actively involved in various forms of employee representation
for decades—as a union representative, a member of the Works Council, and now in his second term
as an employee representative on the Supervisory Board.
BOŠTJAN FURLAN − He is a member of the Hella/Forvia Board of Directors and Managing Director of
Hella Saturnus Slovenia, an expert in corporate restructuring, business transformation, and
production processes, with many years of experience in the automotive industry. He is currently also
a member of the Supervisory Board of Krka d. d.
DUBRAVKA DEROSSI URŠIČ − She is the Executive Director of the Sales and Operational Marketing
Division at Modra zavarovalnica d. d., with many years of management experience in sales,
marketing, financial services, and product development, complemented by her understanding of risk
management and corporate governance.
MATEJ POMPE – He is employed at Cinkarna Celje, d. d., in the Kemija Celje business unit. He serves
as the head of operational planning, where he oversees the organisation of work and ensures the
smooth flow of work processes. In addition to his regular job duties, he is also active in the area of
corporate governance, serving as Chairman of the Works Council. In this role, he contributes to
dialogue between employees and management and to strengthening cooperation within the
Company.
GREGOR KOROŠEC − He has many years of experience in the field of external and internal auditing.
He initially worked at the auditing firm PricewaterhouseCoopers as an external auditor, and
subsequently headed the Internal Audit Department at Merkur zavarovalnica for several years. Later,
at the same insurance company, he managed various insurance departments and developed
expertise in financial supervision, risk management, and organisational leadership, and subsequently
headed the Insurance and Capital Markets Sector at the Ministry of Finance. For several years, he
47
also served as an external independent member of the Audit Committee at Unior. He is currently
employed in the Internal Audit Department of the Ministry of Finance.
The Supervisory Board has a four-member Audit Committee, which exercises its powers in
accordance with the law (ZGD-1) and the Rules of Procedure of the Audit Committee.
Table 16: Current membership at the end of the reporting period
Name and
Surname
Function
Date of appointment
Attendance at committee
meetings in relation to
total number of meetings
(during the term)
Melita Malgaj
Chair of the Committee
23/7/2024
6/6
Boštjan Furlan
Member and Deputy Chair
of the Committee
23/7/2024 (Member)
26/11/2024 (Deputy Chair)
6/6
Aleš Stevanovič
Member of the Committee
23/7/2024
6/6
Gregor Korošec
External Independent
Member
4/11/2015
6/6
From 23 July 2024 onwards, the Supervisory Board no longer has a separately established HR
Committee. Instead, the duties of the HR 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 Employee
Representative were from the local community where the company is headquartered, accounting for
two-thirds of the Management Board. Following the appointment of a new Employee Representative,
the proportion of Management Board members from the local community has decreased to one-third.
Representation of women:
• On the Management Board, women accounted for 1/3 of the membership until 5 November
2025, and 2/3 after 10 November 2025;
• On the Supervisory Board: women accounted for 1/3 of the membership.
Representation of employee representatives:
• 1/3 on the Management Board,
• 1/3 on the Supervisory Board,
• 1/4 on the Audit Committee.
The share of independent members of the Supervisory Board in 2025 amounted to 100%.
Independence is assessed in accordance with the Slovenian Corporate Governance Code for Public
Joint-Stock Companies, adopted by the Ljubljana Stock Exchange and the Slovenian Directors’
Association.
During the reporting period, the Company did not record any other categories of diversity among the
members of the Management Board and the Supervisory Board. In forming the Management Board,
as well as the Supervisory Board and its committees, the Company strives for diversity in terms of
professional background, gender, and age.
The responsibilities of individual bodies and individuals regarding impacts, risks, and opportunities
are defined within the scope of the Company's authority and set forth in relevant internal policies,
regulations, and codes. The roles and responsibilities of the Company's Management Board and
Supervisory Board are defined in accordance with established corporate governance principles and
ensure the effective management of the Company's operations, including the management of risks,
opportunities, and impacts. A formal definition of the roles and responsibilities of these bodies
specifically regarding sustainability issues has not yet been established; however, sustainability
48
issues are addressed in accordance with existing corporate governance principles and are integrated
into regular supervisory and management processes.
The Management Board bears primary responsibility for the direct oversight of identified significant
impacts, risks, and opportunities. Within the scope of its mandate, the Management Board ensures
appropriate mechanisms for managing these risks and monitoring their potential effects on the
Company's operations. It also regularly assesses risks and identifies opportunities, taking into
account the sustainability, operational, and financial aspects of operations. It reports all relevant
findings, measures taken, and potential impacts to the Supervisory Board as part of regular periodic
reporting (at least once per quarter) on the Company's operations. This establishes an effective
oversight framework that enables transparent risk management and monitoring of sustainability
impacts, in accordance with internal policies and stakeholder expectations.
The Supervisory Board is responsible for overseeing the effectiveness of risk management based on
reports from the Management Board and for assessing whether the Management Board’s measures
are appropriate and consistent with the Company’s strategic objectives. Progress regarding
significant impacts, risks, and opportunities is monitored through periodic reports at meetings of the
Supervisory Board and the Audit Committee.
To manage impacts, risks, and opportunities, the Company has established a group of internal
experts responsible for identifying, analysing, and evaluating impacts, risks, and opportunities in
collaboration with the owners (executive directors and heads of organisational units). The group
reports quarterly to the broader expert committees of the Management Board. Senior management
(the Management Board) is responsible for approving significant impacts, risks, and opportunities
(DMA) and for governance:
• sets the strategy and objectives for managing impacts, risks, and opportunities;
• oversees the impact, risk, and opportunity management process and proposes changes to
improve the process’s effectiveness and efficiency;
• delegates authority and responsibilities at appropriate levels of the organisation;
• provides the necessary resources for the operation of the process and the implementation of
measures;
• proposes and, where necessary, leads measures to manage significant impacts, high
corporate risks, and significant opportunities;
• informs the Supervisory Board of significant impacts, risks, and opportunities. The
Supervisory Board and the Audit Committee of the Supervisory Board oversee the
effectiveness and efficiency of the comprehensive system for managing impacts, risks, and
opportunities, as well as the integrity of information regarding significant impacts, risks, and
opportunities provided by the Company and approved by them.
The Management Board is responsible for the operational implementation of the Company's
strategies and for managing risks associated with its operations. Its responsibilities include:
• developing and implementing strategies for managing ESG risks, including targets for
reducing negative impacts on the environment and society;
• monitoring business compliance with legal and regulatory requirements and aligning internal
policies with ESRS standards;
• ensuring the effective implementation of business ethics and human rights policies
throughout the entire value chain;
• managing the sustainability reporting process and communicating key findings and results
to stakeholders.
The Supervisory Board plays a key role in ensuring independent oversight of the Management Board’s
operations, approving the Company’s strategy and monitoring its implementation, as well as in
49
making strategic decisions related to the Company’s business operations, risk management, and
ensuring the Company’s sustainable development.
The Management Board confirms that the annual Sustainability Statement has been prepared in
accordance with the requirements of the CSRD, including the ESRS standards and the Regulation
establishing a framework to facilitate sustainable investment (EU Taxonomy). The statement includes
a list of material sustainability issues addressed during the reporting period, enabling accurate and
transparent reporting on the Company’s sustainability performance.
Oversight of the management of sustainability impacts, risks, and opportunities is carried out by the
Supervisory Board and the Audit Committee. The Audit Committee oversees financial and
sustainability reporting and monitors the effectiveness of internal controls and risk management
systems, reporting on these matters to the Supervisory Board. As the governing body, the
Supervisory Board approves the Company's sustainability strategy, the DMA, and the full
Sustainability Statement as part of the approval of the comprehensive annual report.
In light of the introduction of sustainability reporting, the Company’s Management Board and
Supervisory Board will further develop their competencies through both internal training and by
engaging external experts when necessary. During the reporting period, members of the
Management Board and Supervisory Board were personally responsible for assessing their existing
competencies and identifying any knowledge gaps. During this period, members of the Management
Board collectively completed 55 hours of various training sessions covering multiple aspects of
environmental, social, and governance (ESG) topics. As part of the reporting and training sessions
organised by the Company, members of the Supervisory Board received a detailed presentation of
the DMA analysis, which was presented at the meeting on 4 March 2025 and subsequently during
the renewal of the Company’s DMA for 2025 at the meeting on 11 December 2025.
The Company recognises that the skills and expertise of the members of the Management Board and
the Supervisory Board play a key role in identifying the significant impacts, risks, and opportunities
that sustainability reporting presents for both the Company and its broader stakeholders. The
diversity of skills and experience among 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 the Company's long-term sustainable growth and
competitive advantage.
5.1.2.2 [GOV-2] Information provided to the administrative,
management and supervisory bodies of the Company and
sustainability matters considered by those bodies
When overseeing the Company's strategy and making decisions regarding significant transactions
and risk management policies, the Management Board and the Supervisory Board take into account
the impacts, opportunities, and risks associated with sustainability aspects of business operations.
During the reporting period, the Management Board regularly informed the Supervisory Board of all
relevant sustainability matters and identified impacts, risks, and opportunities at regular Supervisory
Board meetings as part of its reporting on business operations and risk management. The
Management Board assessed material IROs in accordance with the preparation of the DMA.
Table 22 (Significant impacts, risks, and opportunities (IRO) according to ESRS standards and their
impact on the business model) presents a list of significant impacts, risks, and opportunities that
were addressed by the Management Board and the Supervisory Board during the reporting period.
50
Special emphasis was placed on developing the Company's sustainability strategy. This topic was
discussed and presented during the reporting period at the regular meetings held on 4 March 2025
and 10 November 2025, during which the Management Board presented and highlighted the key
impacts, opportunities, and risks arising from the strategic directions and provided explanations
regarding potential trade-offs between sustainability goals and other business priorities within the
DMA framework.
Based on the information presented at the meeting on 4 March 2025, the members of the Supervisory
Board approved the DMA for 2024, and at the meeting on 11 December 2025, they also approved
the DMA for 2025.
When assessing impacts, risks, and opportunities, and when deciding on strategy and key business
decisions, the Management Board and the Supervisory Board also take into account any trade-offs
between achieving sustainability goals, financial performance, and the long-term viability of the
business model.
The Company has currently established a structured approach to addressing sustainability issues,
including the development of appropriate internal controls, processes, and responsibilities related to
the management of identified impacts, risks, and opportunities (IROs). As part of these efforts, the
Management Board plans to provide regular reporting on sustainability topics, which will also be
incorporated into the annual disclosure update process under the DMA approach, in accordance with
the requirements of the ESRS regulation.
5.1.2.3 [GOV-3] Integration of sustainability-related performance into
incentive schemes
The remuneration system for members of the Management Board is partially linked to the
achievement of sustainability goals, which are incorporated into the variable component of their
remuneration. One of the key factors in determining this component is employee satisfaction, which
accounts for 10% of the total variable portion of remuneration within the overall remuneration
structure.
In addition, the variable portion of the Management Board's remuneration also depends on the
successful implementation of five strategic projects, which the Supervisory Board must first approve
as part of the annual plan. Each project has a clearly defined objective, the achievement of which
serves as the criterion for assessing performance. It is important that at least one of these projects
is directly related to sustainability issues. The combined impact of this component on the variable
portion of the Management Board's remuneration amounts to 20% of the total. The Management
Board's remuneration is presented in more detail in the financial statements, Chapter 6. Related-
party transactions – information on groups of persons, in the financial section of the report.
During the reporting period, the Company had a valid, approved remuneration policy for members
of the Management Board and the Supervisory Board, which was approved by the General Meeting
on 21 May 2025.
The remuneration policy was developed in line with shareholder expectations, with the Supervisory
Board taking into account their initiatives and recommendations to standardise and increase the
transparency of remuneration. The policy aims to align rewards with the Company's sustainability-
oriented strategy, which includes accountability for environmental, social, and governance goals. By
establishing a clear link between compensation and sustainability goals, the Company aims to ensure
long-term value for all stakeholders and create an enabling environment that will guide managers
toward sustainable achievements.
51
During the reporting period, remuneration linked to sustainability goals was established for members
of the Management Board.
5.1.2.4 [GOV-4] Due diligence statement
The due diligence process is established through internal guidelines on the management of impacts,
risks, and opportunities, and enables the identification and consideration of actual and potential
impacts on the environment and human rights. Its findings are incorporated into the DMA, as it
provides key input for determining material topics for reporting.
The due diligence process involves identifying and assessing impacts, risks, and opportunities;
determining mitigation measures; monitoring effectiveness; and providing regular reporting. Due
diligence is conducted every three years or whenever there are significant changes in the business
environment, operations, or legislation. In the intervening years, the sustainability team conducts a
regular annual review to verify the relevance of key impacts, risks, and opportunities and, if
necessary, initiates a comprehensive due diligence process.
A comprehensive due diligence review was conducted in 2024, followed by an annual review in 2025,
which confirmed the validity of the existing findings and did not require a repeat of the comprehensive
review. Additions and changes to the procedure are recorded in Section IRO-1, which describes the
disclosure of the dual materiality assessment.
Table 17 provides references to sections in our Sustainability Statement where we provide
information about our due diligence process. These references and their corresponding topics are
cited throughout the report in the relevant sections.
Table 17: Main references to key elements of due diligence
Key elements of due diligence
Tags in the 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
5.1.2.5 [GOV-5] Risk management and internal controls for
sustainability reporting
The risk management process for sustainability reporting involves a broad range of employees at
various levels and across different business functions. Risks are addressed by committees responsible
for managing impacts, risks, and opportunities, as well as at quarterly expert panels, ensuring a
systematic approach. A Sustainability Team is appointed to prepare the report, consisting of
individuals responsible for specific areas of sustainability. The control environment is based on the
organisational structure, clearly defined roles and responsibilities, commitment to legal
requirements, and continuous training. Key control activities include data validation prior to inclusion
in the report, approval procedures at the responsible person level, and IT controls to ensure data
52
integrity. The procedures are formalised in the Policy on the Management of Impacts, Risks, and
Opportunities.
A uniform methodology is used for risk management, in accordance with the SIST EN ISO 9000,
14001, 45001, 31000, and 50001 standards. Risks are assessed based on current and potential
financial impacts and the effectiveness of measures, and are classified into the following levels: low,
medium, and high. To date, the main identified risks have been related to the integrity, accuracy,
and availability of data, particularly in the value chain, as well as to inadequate IT support. Measures
have been introduced to manage these risks, such as the development of an application solution for
data collection, risk discussions in collegial bodies, and internal auditing.
As part of the preparation of this report, an internal audit was conducted to review the sustainability
reporting process, which assessed the adequacy of controls and procedures and provided
recommendations for improvements. In addition, comments from external auditors obtained during
the initial review of compliance with ESRS requirements were taken into account. The findings of the
internal and external audits are being incorporated into process improvements, which will be
supported by a comprehensive risk assessment plan that calls for the development of a methodology,
the conduct of an analysis, and the incorporation of findings by the end of the next reporting period.
The Sustainability Team reports quarterly to the Management Board on the reporting process and
related risks, and the Management Board informs the Supervisory Board and the Audit Committee
as part of its regular reports. Information on the implementation of internal audit recommendations
is included in regular periodic reports intended for the Management Board, the Audit Committee, and
the Supervisory Board.
5.1.3 [SBM] Strategy
5.1.3.1 [SBM-1] Strategy, business model and value chain
The Company strives to become an efficient, sustainability-focused enterprise in the chemical
industry, committed by 2030 to reducing our environmental impact, managing resources responsibly,
and strengthening social responsibility and transparency. By reducing greenhouse gas emissions and
managing energy efficiently, we will contribute to a low-carbon future, and by expanding our product
portfolio, we will influence the development of the circular economy and waste management.
The Company primarily operates in the ESRS sector of the chemical industry, in accordance with the
Standard Classification of Activities (SKD 2025), specifically within activity C/20 – Manufacture of
chemicals and chemical products. This sector encompasses the Company's core activities, which
include the production of titanium dioxide (TiO₂) pigment and the production of copper fungicides,
formulations, and specialty chemicals, which form the core of the Company's business model.
During the reporting period, the Company’s total revenue amounted to EUR 212,572,607, while net
sales revenue amounted to EUR 198,801,821, in accordance with the financial statements for the
reporting period. The volume of revenue generated reflects the size and complexity of the business
and provides an important framework for understanding the significant impacts, risks, and
opportunities related to the workforce.
In addition to the primary ESRS sector, the Company, given the nature of its activities, products,
and value chains, is also linked to the following additional significant ESRS sectors, in which it carries
out significant activities and generates impacts, risks, and opportunities:
53
• ESRS plastics and polymer materials sector, related to activities involving masterbatches,
powder coatings, technical polymer products, and specialty polymer materials (net sales
revenue in 2025 amounted to EUR 14,663,429);
• ESRS mineral and construction materials sector, related to the use and processing of
inorganic materials and the properties of pigments and other mineral components in
production processes (net sales revenue in 2025 amounted to EUR 10,117,320).
The definition of sectors is based on the Company's business model, product structure, and the
classification of activities according to SKD 2025. Since the official ESRS sector classification has not
yet been adopted, the Company uses a working, descriptive classification of ESRS sectors to provide
a clear overview of the areas in which the Company generates significant impacts, risks, and
opportunities.
Increased production volumes will drive business growth, enabling the development of opportunity
portfolios that reduce waste and pollution, despite the expansion.
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 manufacturer of titanium dioxide and a wide range of other products (sulphuric acid, white
gypsum, powder coatings, masterbatches, copper-based plant protection products, growing media,
and fluid handling systems—polymers) the Company contributes to economic growth by creating
quality jobs and ensuring stability in the chemical industry. Our presence in the markets of the
European Union, the Balkans, and the Middle East enables sustainable growth, while we collaborate
with key industry 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
54
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 (Scopes
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.
The Company presents its key production programmes and revenue structure in Section 4,
Operations, where Tables 5 and 6 provide an overview of sales by market and by individual business
segment. Market presence is described in more detail in the sales analysis (EU markets, domestic
market, and third-country markets). Data on the number of employees is disclosed in the basic
overview in the financial section (table Number of employees), while comprehensive information on
employees is presented in the section Own Workforce (ESRS S1).
The Company emphasises that directly adhering to a scenario that limits global warming to 1.5 °C is
currently not feasible due to the nature of production. The production of key chemicals, such as
titanium dioxide, requires energy-intensive processes. The appropriate technology that would enable
fundamental changes in production processes is difficult to access or still in the development phase.
Furthermore, infrastructure at the national level is not sufficiently prepared to support the transition
to low-carbon processes on the scale that would be necessary to achieve the 1.5 °C target.
Furthermore, achieving such a goal would require significant changes in the availability of renewable
energy sources, the supply chain, and supporting technologies, which are part of the broader industry
and beyond the Company's direct control. The Company therefore focuses on gradually reducing the
carbon intensity of its processes and incorporating sustainable technologies wherever possible,
thereby contributing to emissions reduction and supporting the long-term transition to a low-carbon
economy.
Various sales sub-programmes can be grouped into sales groups based on their content, within which
products with similar applications are combined. In recent years, we have discontinued several
production and sales programmes that did not meet profitability or performance criteria.
Our major production and sales programmes are:
• production of titanium dioxide (TiO
2
);
• production of sulphuric acid;
• production of agricultural products, including plant protection products and growing media;
• production of masterbatches and powder coatings;
• group of fluorinated polymers and elastomers, which, due to their properties, are suitable
for transporting aggressive media and protecting process and mechanical equipment;
• intermediates in 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 (in a ratio of 47 percent to 53 percent, calculated on a dry matter basis
of the aforementioned by-products).
The core production and sales group is titanium dioxide pigment, which encompasses the sale of
various types of pigment. This group also includes ultra-fine forms of titanium dioxide, which are
high-value-added products, as they can act as photocatalysts or UV absorbers depending on their
crystal structure. They are incorporated into technologically advanced products (self-cleaning
55
systems, materials with UV stabilisers, etc.). The production and marketing of titanium dioxide
pigment account for 83 percent of our total turnover.
In accordance with Annex I of Regulation (EC) No. 1893/2006, the sales group for plant protection
products falls under activity 20.2: Manufacture of pesticides and other agrochemical products.
Compared to the main production and sales group, this accounts for a very small market share of
the Company's total turnover (5.09% of total sales in 2025). The core products of this group are
copper fungicides in various formulations and containing different active ingredients (copper
hydroxide, copper oxychloride, tribasic copper sulphate). In the field of plant protection products,
we pursue a strategy emphasising product quality and their environmentally safe use.
The powder coatings and masterbatch group represents a vertical extension of our core titanium
dioxide pigment production and is becoming an increasingly important sales segment for the
Company. We sell powder coatings primarily for anti-corrosion and decorative purposes in the
production of household appliances, heating elements, and other metal accessories. Masterbatches
are intended for mixing into plastic compounds to improve their functional properties.
Other areas include the production of PTFE (polytetrafluoroethylene) products, half of which are
intended for internal use and maintenance, while the other half is sold primarily to the plant
protection and chemical industries. Sulphuric acid production is primarily intended for internal use;
any surpluses are sold on the market. CEGIPS, also known as white gypsum, is sold to the cement
industry, gypsum board manufacturers, and for agricultural use. The by-product RCGIPS is entirely
used for dry backfilling at the Za Travnik waste disposal facility. Depending on its properties, it can
be used for backfilling in low-rise construction, the construction of low embankments, and the
creation of cover layers.
We operate primarily in the European market, where we generate the majority of our revenue. To a
lesser extent, we are also present in compensation markets, primarily in the U.S. dollar currency
area. Based on geographic location, we identify EU member states (excluding Slovenia) as our most
important markets, followed by the domestic market (Slovenia) and third countries.
The countries where we have the strongest presence (Figure 4) and where our share of sales exceeds
1% are: Germany (28%), Italy (13%), France (11%), Poland (5%), Slovenia (7%), Turkey (4%),
the Netherlands (2%), Austria (4%), Sweden (3%), Denmark (3%), Croatia (2%), Greece (2%), the
U.S. (2%), Hungary (2%), Belgium (1%), Spain (1%), the Czech Republic (1%), Romania (1%),
and Serbia (1%). In terms of the share of sales value by market, sales to the EU market account for
the majority.
All production facilities and support services are located in Slovenia, where we employed 726 people
at the end of the year. All of the Company's employees are based in Slovenia (100%). The Company
has no employees in other geographic regions.
56
Figure 4: Countries where we have the strongest presence
Table 18: 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.
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.
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
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.
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.
57
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).
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 of critical importance to the Company, as it accounts for the largest share
of our revenue and has the strictest sustainability requirements. Due to the requirements of the EU
Green Deal, the REACH regulation, and other environmental standards, we are adapting our strategy
to remain competitive and meet the expectations of our customers and regulators.
Currently, our most important product is titanium dioxide, which serves as a key raw material in
numerous industries. Of particular note is the paint and coatings sector, which is our largest market
and also the one where sustainability requirements are most pronounced.
The Company is exploring ways to optimise production processes, improve energy efficiency, and
increase raw material utilisation in the production of titanium dioxide. For more information, see
section [SBM-1] Strategy, business model and value chain.
Our operations are based on compliance with best available techniques, sustainable investments,
and the optimisation of production processes to reduce our environmental impact and ensure safe
and healthy working conditions for our employees. We focus on continuous quality improvement,
innovation, and efficient resource management, which enables us to remain competitive in global
markets.
In the upper part of the value chain, we work closely with key suppliers of raw materials and products
for TiO2 (titanium-bearing ore, sulphur), paints and coatings (epoxy resins, pigments), agricultural
products (copper), and for process equipment (PTFE, metals). These raw materials are delivered via
rail, sea, or road transport.
58
In the upper part of the value chain, we identify:
• suppliers/distributors of direct and indirect materials/services,
• warehousing and transportation to the Company.
We use road, rail, and intermodal transport to deliver to customers in the paint, plastics, and paper
industries, as well as other sectors (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 main sources of data for analysing business models and value chains include company websites,
internal databases, global publications in specific fields and industry categories, visits to trade fairs
and conferences, various associations and organisations, annual reports from suppliers and
customers, direct communication with stakeholders, and financial data. In addition, we use various
analytical tools to extract information from publicly available sources, as well as publications and
analyses related to specific fields of work.
First, we defined the value chains and the methodology for identifying key stakeholders, which
include both suppliers and customers. We then identified communication channels that enabled the
effective collection and gathering of data on partners. We analysed stakeholder transactions based
on accounting data and collected and reviewed stakeholder information, focusing on key
sustainability attributes. Following the data analysis, we defined the scope of the value chain,
conducted a due diligence review, and identified common sustainability themes, sustainability
commitments, and measures that we will consider in our future collaboration with stakeholders. In
2024 and 2025, we conducted a due diligence review, during which we reviewed the annual reports
of suppliers and customers, established direct communication with stakeholders, and analysed
information obtained from company websites and other sources. As part of this, we are preparing a
survey questionnaire to gather additional information on stakeholders’ sustainability practices.
In 2025, we conducted and analysed the responses to a survey among key suppliers and partners in
the upper part of the value chain.
We provide customers in the key segments of paints, coatings, and chemicals with improved product
performance and sustainable alternatives, which also helps them achieve their own sustainability goals.
Through transparent reporting and a focus on sustainability risks, we ensure greater business
predictability for investors. Investments in sustainable technologies, such as the production of low-
temperature coatings, the use of recycled materials and biopolymers, and energy optimisation,
enhance the long-term resilience of business models to changes in legislation and market demands.
For other stakeholders, such as employees, local communities, and suppliers, we create a safe and
inclusive work and local environment. Reducing our environmental footprint has a positive impact on
local communities, while long-term partnerships with suppliers ensure supply chain stability.
The company identifies several value chains, namely:
• TiO₂ value chain,
• masterbatches value chain,
• powder coatings value chain,
• Agro value chain, and
• polymers value chain.
59
Based on the established criteria, we identify the TiO
2
value chain as the most significant, both in the
upstream (raw materials and products for TiO
2
) and downstream segments of the value chain (paints,
varnishes, and coatings; plastics, paper). Below, we present the key characteristics of the upstream
and downstream segments of all identified value chains and the matrix relationship between the
upstream and downstream segments of the value chains and the production and sales programmes.
Table 19: 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
Masterbatches value
chain
Powder coatings 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
Polymers 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
Figure 5: Value chain of Cinkarna Celje, d. d.
60
5.1.3.1.1 Description of the TiO₂ value chain
1. 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.
Figure 6: Detailed view of the TiO
2
production process and value chain
2. 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.
3. 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
61
on sustainability necessitates supplier adherence to environmental standards, compelling process
adjustments. Global TiO₂ demand is approximately 7 million tonnes per year.
Description of the masterbatches value chain
Description of the upstream part of the masterbatches 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
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 masterbatches 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.
5.1.3.1.2 Description of the powder coatings value chain
1. Description of the upstream part of the powder coatings 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.
2. Description of the downstream powder coatings 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.
5.1.3.1.3 Description of the Agro value chain
1. Description of the upstream part of the Agro value chain
The main raw material is waste copper and other copper products, such as copper ash. There are
sufficient suppliers and adequate quantities on the market, and regular procurement and appropriate
hedging are key to managing price risks.
2. 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
62
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.
5.1.3.2 [SBM-2] Interests and views of stakeholders
In the context of responsible management of impacts, risks, and opportunities, it is essential to
identify the material issues and interests of all key stakeholder groups. Issues are considered
material if they 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.
The key stakeholders identified are owners and supervisors, employees, suppliers, customers, the
local community, and other interested parties (users of the Sustainability Statement and affected
stakeholders).
We communicate with stakeholders using various communication tools to ensure transparency of the
Company's operations, identify impacts, risks, and opportunities, and involve stakeholders in the
Company's activities in both the local and global environments. Table 20 presents our key
stakeholders, the method and the purpose of their engagement. We disseminate information through
the channels presented in accordance with established procedures and rules, with most information
prepared on a regular basis (annually, quarterly, monthly, etc.) or as needed.
Table 20: 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
• Company’s 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
• Periodic (quarterly) reporting
and annual reports
• Verification of the accuracy of
published and publicly disclosed
information
63
• Business strategy and annual
business plans
• Sustainability topics
• Governance and regulatory
compliance
• Contacts and meetings with
investors and presentations at
stock exchange conferences
• 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
• Stakeholder confidence in publicly
disclosed information
• 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
• Supplier surveys
• 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
• Management of environmental
impacts, including the
remediation of past burdens
• 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 sports,
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
Nature is considered a silent stakeholder of the Company for several reasons related to the
Company’s operations, which involve the chemical processing industry—an industry that uses
chemicals, relies on natural resources, manages waste, and has an impact on the environment.
Including nature as a silent stakeholder means that the Company takes into account the
environmental impacts of its activities and strives to reduce negative effects and continuously
improve environmental practices. In doing so, we rely on the results of conducted monitoring of
pollution and the state of the environment (such as emissions of substances into the air, outdoor air
quality, emissions of substances into water and surface water quality, noise emissions, waste
management, soil and groundwater quality, and other reports detailing the environmental status in
the Company's vicinity) as well as other scientific references in this field (such as national and
European standards for pollution monitoring, BAT (Best Available Techniques), reference documents
(BREFs) for the chemical industry under the EU IPPC Directive, ecotoxicological studies, and others).
Through all these measures, we strive to reduce negative impacts on the environment and
continuously improve our environmental practices.
Employees responsible for specific areas of expertise collaborate with individual stakeholder groups
as part of their duties. Stakeholder perspectives are considered as part of the due diligence process.
64
The results of stakeholder engagement are taken into account when identifying significant impacts,
risks, and opportunities, as well as when formulating and updating the Company's sustainability
goals, measures, and internal policies. We pay attention to all factors that could affect the
achievement of our strategy and sustainability commitments, compliance with policies, and our
business model (see section SBM-1 Strategy, business model and value chain for more details).
Based on stakeholder engagement to date, the Company has not made any significant changes to
its strategy or business model, as current information and stakeholder feedback do not indicate a
need to alter key strategic foundations. Nevertheless, stakeholder interests and views are already
reflected in the adjustment of strategic priorities, objectives, and methods of strategy
implementation, particularly in the areas of employee safety, environmental management,
compliance, product development, and sustainable investments. Should future due diligence cycles
reveal a need for changes, these would be implemented within the framework of an established
internal procedure, which includes: a comprehensive due diligence review (DMA), an assessment of
specialised areas, an evaluation of impacts on stakeholders, and approval of changes at the level of
the Management Board and the Supervisory Board. This approach ensures that any changes to the
strategy or business model would be implemented transparently and with the appropriate
involvement of key stakeholders.
The interests and views of stakeholders are systematically addressed as part of the due diligence
process, which is conducted periodically—typically every three years—in accordance with the internal
Policy on the Management of Impacts, Risks and Opportunities. The next comprehensive due
diligence review is therefore planned for the period 2027–2028. The results of this review will serve
as the basis for any further adjustments to the strategy, business model, sustainability strategy, and
related internal policies of the Company. Planned future activities may contribute to deepening
engagement with stakeholders and the gradual development of relationships; however, we do not
currently anticipate changes that would significantly alter the nature of these relationships or the
manner of stakeholder engagement.
The Management Board reviews the information received at a Management Board meeting or via
written communication, depending on the urgency and nature of the matter. If necessary, the
Management Board also informs the Supervisory Board of key sustainability issues.
The Management Board and the Supervisory Board are regularly informed of stakeholders’ findings,
interests, and views through due diligence, reports from specialised departments, and regular
sustainability reporting, which enables the timely incorporation of this information into decision-
making processes.
5.1.3.3 [SBM-3] Material impacts, risks and opportunities and their
interaction with the strategy and business model
In 2025, we conducted the regular annual review of the double materiality assessment (DMA) matrix,
during which we reviewed the 2024 assessments of impacts, risks, and opportunities (IRO). We
conducted the double materiality assessment (DMA) review to ensure its up-to-date status and
compliance with the provisions of the Company's Policy on the Management of Impacts, Risks, and
Opportunities. The annual review enables the Company to regularly verify the relevance of the
identified impacts, risks, and opportunities in light of current conditions, strategic directions, and
stakeholder expectations. The methodology and assessment criteria remain unchanged. In this
document, we present the results of the DMA review for 2025, comparing them with the previous
year and providing an up-to-date presentation of the DMA.
65
The methodology and evaluation criteria remain unchanged from 2024. During the dual materiality
assessment process, we identified material impacts, risks, and opportunities (IROs) from the six
thematic standards of the ESRS. The process is described in section IRO-1.
All material non-financial information stems from sub-themes and sub-sub-themes within the ESRS
framework. For specific topics related to our material non-financial information, we provide
disclosures tailored to the specific nature of the Company.
Significant impacts, risks, and opportunities (IROs) are presented in the report either individually or
in aggregate form when individual impacts, risks, or opportunities stem from the same activities, are
of a comparable nature, and have similar effects on people, the environment, or the Company’s
operations. The aggregation of IROs was used to ensure the transparency and comprehensibility of
disclosures and does not result in the concealment or downplaying of the significance of individual
impacts, risks, or opportunities. Where IROs have been aggregated, their key aspects are further
explained within the framework of individual ESRS thematic standards.
Below is the consolidated list of all significant impacts, risks, and opportunities (IROs) that we
identified as part of the 2024 DMA, along with all changes identified during the annual review in
2025. During the assessment review process, changes were identified in four sustainability areas
(ESRS E1, ESRS E5, ESRS S1, and ESRS S3). A detailed review of significant IROs for each individual
topic, including the links between our IROs on people and the environment, is presented under each
individual thematic standard. We defined the same time periods (short-term, medium-term, and
long-term) as those specified in the strategy addressing material IROs.
Figure 7: Graphical representation of the double materiality matrix
66
Table 21: Identified impacts, risks, and opportunities
ESRS
standard
Impact
code
Short description of the impact
E1
E1NV-1
Use of river water and impact on the adaptive capacity of the aquatic ecosystem
E1
E1NV-2
CO2 emissions from non-renewable sources and processes (Scopes 1 and 2)
E1
E1NV-3
CO2 emissions in the upstream and downstream value chain (Scope 3)
E1
E1NV-4
Use of energy from fossil fuels
E2
E2NV-1
Emissions to air: SO2, H2S, other gases
E2
E2NV-2
Pollution that may occur during transport (spills, noise, dust)
E2
E2NV-3
Other CO2 emissions (process sources)
E2
E2NV-4
Emissions to air – particulate matter (dust)
E2
E2NV-5
Emissions to air – noise
E2
E2NV-6
Emissions to rivers – sulphate
E2
E2NV-7
Emissions to groundwater in areas with historical contamination.
E2
E2NV-8
Soil contamination resulting from historical contamination
E2
E2NV-9
Impact on organisms in watercourses due to historical contamination, water abstraction, and
wastewater discharge
E2
E2NV-10
Use of substances of concern (SoC) at the Company
E2
E2NV-11
Use of substances of very high concern (SVHC) at the Company
E2
E2NV-12
Microplastics (Production of masterbatches)
E3
E3NV-1
Drinking water consumption
E3
E3NV-2
Water consumption (extraction) from the river (lowering of water levels)
E3
E3NV-3
Discharges into rivers – sulphate
E4
E4NV-1
Impact of Company operations on biodiversity loss due to climate change (CO2, excessive
temperature, lower water levels)
E4
E4NV-2
Land use change within existing industrial areas (changes in landfilling)
E4
E4NV-3
Depletion of natural resources (ilmenite, limestone)
E4
E4NV-4
Spread of invasive plants
E4
E4NV-5
Impact on surface waters due to sulphate emissions
E4
E4NV-6
Impact on the status of species in the Natura 2000 area
E4
E4NV-7
Impact on species extinction at the global level
E4
E4NV-8
Impact on soil degradation due to gypsum disposal, impact of groundwater on soil
E4
E4NV-9
Impact of land development
E4
E4NV-10
Maintenance of barriers and green areas on Company premises, alternative water use
E5
E5PV-1
Use of copper from fishing nets
E5
E5NV-2
Natural resources (ilmenite, limestone)
E5
E5PV-2
White gypsum (CEGIPS) – by-product that reduces waste volume
E5
E5PV-3
TiO2 from 23% acid
E5
E5NV-1
Waste (red gypsum, packaging, waste rags, oils, rubber scraps, and other hazardous and
non-hazardous waste)
S1
S1PV-1
Job creation, including for professionals in the local community
S1
S1PV-2
Ensuring a 40-hour workweek, % of shift work, flexible working hours.
S1
S1PV-3
Ensuring decent income for employees
S1
S1PV-4
Ensuring job security for employees
S1
S1NV-1
Ensuring social dialogue (remuneration policy agreement with the union, employee
representatives on supervisory bodies, employee director)
S1
S1NV-2
Cooperation with social partners
S1
S1NV-3
Coordination with social partners
S1
S1PV-5
Right to disconnect, maternity leave, paternity leave
S1
S1NV-4
Care for health and safety
S1
S1NV-5
Ensuring employee job satisfaction
S1
S1PV-6
Gender equality
S1
S1PV-7
Development of employee competencies
S1
S1PV-8
Management of employees with disabilities
S1
S1PV-9
Protection of employees in cases of workplace violence
S1
S1NV-6
Consequences of diversity violations
S1
S1NV-7
Consequences of personal data protection violations
S2
S2PV-1
Providing jobs to suppliers
S2
S2NV-1
Consequences of human rights violations and child labour exploitation
S3
S3NV-1
The Company’s social impact on the quality of life in the local community
S3
S3NV-2
Impact of historical burdens on the quality of food produced
S3
S3NV-3
Consequences of a flood wave in the event of barrier failure
S3
S3NV-4
Consequences of an industrial accident
S3
S3NV-5
Impacts on the local community (air and water emissions, noise, dust, waste)
S3
S3PV-1
Participation in the education system (competitions, internships, field trips,
bachelor’s/master’s/doctoral theses, scholarships).
S3
S3PV-2
Established channels for dialogue with affected communities (Advisory Board, complaint
resolution, Open House Day)
S3
S3PV-3
Support for local sports, cultural, and other activities in the local community
G1
G1PV-1
Employee satisfaction level via a satisfaction survey
G1
G1PV-2
Whistleblower protection and established mechanisms in accordance with the ZZPri
G1
G1PV-3
Supplier relationship management, including the Company’s payment practices
G1
G1PV-4
Number of reported and investigated cases
Based on the material impacts, risks, and opportunities identified, we have adapted our strategies
with a focus on reducing emissions, optimising energy efficiency, and improving the circular
67
economy. The identified social impacts have led to the strengthening of occupational safety
measures, social security for employees, and engagement with affected communities. For more
details, see section [SBM-1] Strategy, business model and value chain.
Adapting the Company's strategy and business model in response to identified material impacts,
risks, and opportunities requires adjustments and the allocation of resources. The Company has
assessed and incorporated into its 2024–2028 business strategy the current financial effects of the
Company’s material risks and opportunities on its financial position, financial performance, and cash
flows, as well as material risks and opportunities where there is a risk that they will result in a
significant adjustment to the carrying amounts of assets and liabilities disclosed in the related
financial statements in the next reporting period, as disclosed in Section 6. Notes to the Financial
Statements, Item 25 Impact of climate change on the financial statements in the financial section of
the report. The Company also disclosed in this section and in section [E-1] the expected financial
effects of the Company's material risks and opportunities on its financial position, financial
performance, and cash flows in the short, medium, and long term, including the reasonably expected
time frames for these effects. This includes the short-, medium-, and long-term changes in financial
position, financial performance, and cash flows that the Company expects as a result of its strategy
for managing risks and opportunities. In doing so, the Company took into account its five-year
investment plans for fixed assets, assuming that no divestitures, early withdrawals of assets, or other
forms of corporate restructuring are planned. The Company plans to finance its investments and
strategy implementation using its own resources.
The resilience of the Company’s strategy and business model with regard to its ability to address
material impacts, risks, and opportunities during the reporting period has not yet been the subject
of a comprehensive resilience analysis in accordance with ESRS requirements. Therefore, the
Company does not disclose the results of a resilience analysis in this report.
The Company plans to conduct a comprehensive resilience analysis in accordance with ESRS
requirements by the end of 2027. The analysis will include a qualitative and, where appropriate,
quantitative assessment of resilience, a description of the methodology used, scenarios, and time
horizons (short-term, medium-term, long-term), as defined by ESRS 1. The results will be included
in future sustainability reports.
The material impacts, risks, and opportunities presented in this section are addressed within the
framework of the ESRS thematic standards (E, S, and G) in accordance with the results of the double
materiality process. In 2025, as part of the regular annual DMA review, the Company updated certain
descriptions of material impacts, risks, and opportunities, primarily in the areas of ESRS E1, E5, S1,
and S3, while the assessment methodology remained unchanged.
68
Table 22: Material impacts, risks, and opportunities (IRO) according to ESRS standards and their impact on the business mode
ESRS
standards
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
Use of river water and impact on the adaptive capacity of the aquatic ecosystem
Negative
impact
(physical)
Short-term
Own
activity
During periods of drought, the availability of water for industrial purposes is
reduced, which can constrain production processes and lead to a reduction in
capacity.
Mitigation: Measures are being implemented to optimise water consumption,
close water loops, and increase the water efficiency of production.
Reduced production capacity due to limited water supply for technological
purposes during periods of drought.
Risk (physical)
Short-term
Own
activity
CO2 emissions from non-renewable sources and processes (Scopes 1 and 2)
Negative
impact
(transitional)
Long-term
Own
activity
The Company’s entire operations fall within a sector with a high climate impact,
which requires systematic measures to reduce greenhouse gas emissions and
transition to sustainable production processes.
Mitigation: Investing in renewable energy sources and energy efficiency.
CO2 emissions in the upstream and downstream value chain (Scope 3)
Negative
impact
(transitional)
Long-term
Own
activity
Use of energy from fossil fuels
Negative
impact
(transitional)
Short-term
Own
activity
E2 - Pollution
Emissions to air SO2, H2S, other gases
Negative
impact
Long-term
Own
activity
The Company's production processes result in emissions of substances into the
air and water. It uses substances of concern and very high concern, which also
impact health and the environment.
Mitigation: Through already implemented BAT-compliant treatment techniques
and the implementation of systematic measures, it prevents and reduces
environmental pollution. Through additional investments, it aims to further reduce
impacts, implement mitigation measures, avoid or reduce the use of the
aforementioned hazardous substances, and mitigate risks that may arise from
changes.
Other CO2 emissions (process sources)
Negative
impact
Short-term
Own
activity
Emissions to air – particulate matter (dust)
Negative
impact
Long-term
Own
activity
Emissions to rivers – sulphate
Negative
impact
Long-term
Own
activity
Emissions to groundwater in areas with historical contamination.
Negative
impact
Medium-
term
Own
activity
Due to groundwater monitoring findings indicating that the Bukovžlak non-
hazardous waste landfill (ONOB) is causing changes in groundwater conditions,
the Company is facing a requirement to remediate the ONOB; implementing
remediation measures will represent a significant financial burden for the
Company and may substantially impact the planning of future resources and
operational priorities
Risk
Medium-
term
Own
activity
Use of substances of concern (SoC) in the Company
Negative
impact
Long-term
Own
activity
Use of substances of very high concern (SVHC) in the Company
Negative
impact
Long-term
Own
activity
E3 – Water and
marine
resources
Water consumption (extraction) from the river (lowering of water levels)
Negative
impact
Long-term
Own
activity
Production processes require large amounts of water, which is drawn from
watercourses.
Mitigation: Investing in securing alternative water sources and reducing impacts
and risks.
Reduced production capacity due to limited water supply for process purposes
during periods of drought
Risk
Long-term
Own
activity
Discharges into rivers – sulphate
Negative
impact
Long-term
Own
activity
69
E5 – Circular
economy
Waste (red gypsum, packaging, scrap cloth, oils, rubber scraps, and other
hazardous and non-hazardous waste)
Negative
impact
Long-term
Own
activity
The production of titanium dioxide generates waste (red gypsum).
Mitigation: Measures are being implemented to reduce waste generation and
mitigate the risk of disposal difficulties.
The inability to dispose of red gypsum can cause serious disruptions to the
Company’s ongoing operations
Risk
Short-term
Own
activity
TiO2 from 23% acid
Positive impact
Medium-
term
Own
activity
From the 23% sulphuric acid that has previously constituted a waste stream in
the titanium dioxide production process, we can separate and recover TiO₂ as a
new product. This not only reduces the amount of waste disposed of (red
gypsum), but also creates added value, as the recovered TiO₂ is no longer a
waste product, but a commercially viable product with the same value as TiO₂
from regular production.
Reduction in waste volume and a product with a lower full cost
Opportunity
Long-term
Own
activity
S1 – Own
workforce
Ensuring job security for employees
Positive impact
Long-term
Own
activity
We place particular emphasis on social security and related benefits, ensuring
stable employment with minimal risk of layoffs and competitive salaries. In the
event of a downturn, this could lead to the loss of key employees.
Mitigation: Entering into permanent employment contracts with employees,
ensuring a good working environment, and maintaining a stable remuneration
policy.
Care for safety and health
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 can
negatively impact the health and safety of employees, including potential
fatalities.
Mitigation: Continuous improvement of the occupational health and safety
management system.
Ensuring employee job satisfaction
Negative
impact
Long-term
Own
activity
The level of job satisfaction at the Company is a key factor influencing employee
motivation, productivity, and the long-term sustainability of the business model. If
this level declines, it could lead to increased employee turnover, as well as lower
productivity and innovation among employees.
Mitigation: Monitoring satisfaction, improving working conditions, providing
training, fair compensation, communication, and support for work-life balance.
An incomplete succession policy and inadequately developed employee
competencies can lead to reduced engagement and poorer organisational
readiness for personnel changes
Risk
Long-term
Own
activity
Due to demographic trends and an open labour market, employee turnover has
increased in recent years, as the Company has hired a large number of new staff;
this can negatively impact business continuity, productivity, and the Company’s
ability to adapt to market and technological changes due to a lack of skills.
Mitigation: Systematic succession planning, implementation of employee
education and training, and knowledge transfer.
S3 – Affected
communities
The Company’s social impact on the quality of life in the local community
Negative
impact
Own
activity
Land-use planning restrictions can result in additional environmental costs and
affect the long-term sustainability of the Company's operations.
Mitigation: Active collaboration with local communities and authorities to find
solutions for the sustainable disposal of red gypsum. Develop alternative plans
for its processing or storage in accordance with environmental regulations.
The inability to remove red gypsum, due to the local community’s refusal to
approve the spatial plan, could cause serious disruptions to the Company’s
operations
Risk
Medium-
term
Own
activity
70
Increased costs due to the remediation of historical environmental burdens
Risk
Medium-
term
Own
activity
The costs of remediating past contamination affect the Company's financial
performance and require strategic resource planning.
Mitigation: Phased remediation in accordance with national environmental
standards.
Heavy precipitation, such as intense downpours, flooding, and landslides, can
cause serious disruptions to business operations; such weather conditions
increase the risk of damage and threaten the stability of the Bukovžlak and Za
Travnik barriers
Risk
Long-term
Own
activity
Extreme weather events can cause property damage and increase the costs of
protecting and maintaining flood control structures.
Mitigation: Regular maintenance and monitoring.
Event - industrial accident
Risk
Long-term
Own
activity
The risk of accidents requires continuous improvements to safety measures,
investments in technology, and stricter oversight mechanisms.
Mitigation: Conducting regular safety inspections and employee training.
Implementing state-of-the-art safety technologies and accident prevention
systems. Improving emergency response plans and collaborating with local
emergency services.
Impacts on the local community (emissions to air and water, noise, dust, waste)
Negative
impact
Long-term
Own
activity
An increase in the burden on the local community has been observed regarding
emissions to air and water, as well as noise, dust, and waste management, which
is also reflected in a higher number of complaints from residents (from 4 in 2024
to 23 in 2025).
Mitigation: Additional measures are being implemented to reduce emissions and
odours, enhance monitoring of the situation, and improve communication with the
local community.
Participation in the education system (competitions, internships, field trips,
bachelor’s, master’s and doctoral theses, scholarships)
Positive impact
Long-term
Own
activity
Strengthening ties with educational institutions enables the recruitment of new
staff and enhances the Company's reputation in the local community.
Mitigation: Expanding cooperation programmes with educational institutions,
increasing the number of scholarships, and providing additional opportunities for
practical training for students. Increasing the promotion of technical professions
among young people.
Established channels for dialogue with affected communities (Advisory Board,
complaint resolution, Open House Day)
Positive impact
Short-term
Own
activity
Active public engagement reduces conflicts and increases the Company’s social
acceptability.
Mitigation: Expanding the scope of cooperation and involving the local community
in decision-making processes. Increasing transparency in providing information
about the Company’s impact on the environment and the local population.
Support for local sports, cultural, and other activities in the local community
Positive impact
Long-term
Own
activity
It helps improve the Company’s reputation and strengthen ties with the local
community.
Mitigation: Further promote sustainable and long-term cooperation with local
organisations.
G1 – Business
conduct
Whistleblower protection and established mechanisms in accordance with the
ZZPri
Positive impact
Long-term
Own
activity
The whistleblower protection mechanisms put in place have a positive impact on
the Company's business model, as they increase transparency and integrity in
business operations, reduce operational and legal risks, and strengthen the trust
of employees and stakeholders. In doing so, the Company creates a safe and
ethical work environment and strengthens its long-term business stability.
71
Supplier relationship management, including the Company's payment practices
Positive impact
Long-term
Own
activity
Managing relationships with partners in the value chain is one of the key
business processes for achieving the Company's goals, ensuring a stable, high-
quality, and reliable supply of raw materials, products, and services, and thereby
enhancing the resilience of the supply chain to risks and ensuring the continuity
of the production process.
Number of reported and investigated cases
Positive impact
Long-term
Own
activity
Through established mechanisms, the Company monitors this area in a
transparent and accountable manner. In doing so, it strengthens business
integrity, builds stakeholder trust, and ensures compliance with legislation and
internal policies.
72
5.1.4 [IRO] Impact, risk and opportunity management
5.1.4.1 [IRO-1] Description of the process to identify and assess
material impacts, risks and opportunities
The Company uses a comprehensive and structured process to identify and assess significant
impacts, risks, and opportunities (IROs), based on the principle of double materiality and covering
the entire Company, all locations, and the entire value chain. The process enables a comprehensive
consideration of impacts on people and the environment as well as on the Company itself, taking
into account the current regulatory framework, stakeholder requirements, strategic directions, and
changes in the business and broader environment.
When identifying and assessing material sustainability topics, the Company uses a structured
protocol that incorporates the ESRS requirements, the results of internal analyses, workshops with
experts—including members of the sustainability team—and insights from stakeholder consultations
conducted during the initial materiality assessment. In addition, available research, analyses of the
legislative, economic, market, and operational environments, and the results of internal and external
oversight procedures are utilised.
As a result of the baseline assessment, 64 sustainability issues were identified and classified, and
evaluated using a uniform methodology. On this basis, 36 material IROs were confirmed,
representing key areas for reporting and management.
The assessment methodology is based on criteria for evaluating negative and positive impacts, with
negative impacts assessed in terms of magnitude, scope, and irreversibility, and positive impacts in
terms of magnitude and scope. Additionally, the probability of an impact occurring is evaluated on a
continuous scale (0–1). Based on the combined assessment of severity and probability, the
materiality of each sustainability issue is determined, with issues that reach or exceed a specified
threshold on a nine-point scale being considered significant. The methodology is documented,
consistent, and comparable over the years.
Impacts are classified as actual and potential, negative and positive, and, based on their time
horizon, as short-term, medium-term, and long-term. In its assessment, the Company takes into
account the interests of all relevant stakeholders identified based on analyses of impacts on people
and nature, past events, and data collected from consultations, surveys, and interviews. The process
enables the identification of impacts arising from the Company's own operations as well as those
resulting from business relationships within the value chain.
The Company manages risks and opportunities in accordance with the Policy on the Management of
Impacts, Risks, and Opportunities, which forms the foundation of the integrated management
system. The system comprehensively addresses both the Company’s impacts on people and the
environment, as well as the impacts of social, environmental, and other external conditions on the
Company’s operations. Sustainability risks, including environmental, social, and governance risks,
are integrated into a single risk register and are identified, assessed, and prioritised using the same
criteria as other strategic and operational risks. Risk assessment takes into account the likelihood of
occurrence, the potential financial impact, and existing or planned mitigation measures. The
materiality threshold for corporate risks is set at a minimum of 1% of the Company's annual revenue
plan. We distinguish between corporate risks, which have significant potential consequences for the
Company as a whole, and operational risks, which arise in specific parts of the organisation. This
approach enables a uniform, comparable, and transparent approach to sustainability risks within the
73
overall risk management system and their integration into decision-making processes at the
management level.
Opportunity management is based on the same principles as risk management, assessing their
potential positive impact on the Company's business operations, financial performance, or resilience.
The results of the assessment of impacts, risks, and opportunities are directly linked to decision-
making, strategic planning, goal-setting, and performance monitoring processes.
Responsibility for assessing and addressing impacts, risks, and opportunities is shared among the
sustainability team, functional units, the Management Board, and the Supervisory Board. The
procedures are documented and include established internal control mechanisms that ensure the
reliability, compliance, and transparency of the process. The results of the assessment are
incorporated into regular management procedures and form an integral part of planning and
performance management.
The Company regularly conducts an annual materiality review to verify whether the identified
impacts, risks, and opportunities remain relevant in light of current conditions, changes in the
business environment, regulatory requirements, and strategic directions. The annual review follows
the same methodology as the initial double materiality assessment and includes a review and
confirmation of existing assessments, including a review of changes in severity or likelihood.
Members of the sustainability team responsible for individual IROs are involved in the review process.
They verify the relevance of past findings and assessments and, where necessary, update the
identification of risks and opportunities. Data from stakeholder consultations conducted during the
initial assessment is re-evaluated; however, the annual review does not require new stakeholder
consultations unless justified by identified changes.
In 2025, the Company upgraded its IRO management protocol. The Policy on the Management of
Impacts, Risks, and Opportunities was updated, particularly with regard to terminological alignment
with ESRS requirements, additional definitions of responsibilities for individual functions, and
improvements in the traceability and documentation of assessments. The role of experts for
individual IROs was strengthened, a coordinated process for peer review of assessments was
introduced, internal verification of the consistency of assessments was reinforced, and a more
structured approach to maintaining records of changes was implemented. As part of the annual
review, changes were identified in the areas of ESRS E1, E5, S1, and S3, which were appropriately
documented in accordance with the protocol and utilised in subsequent management.
The process for managing impacts, risks, and opportunities is designed as a continuous mechanism
that is regularly updated in response to changes in business operations, legislation, and stakeholder
expectations. Through continuous improvement of its methodology, internal rules, and
implementation, the Company ensures compliance with ESRS standards, high-quality information,
and effective support for strategic management.
5.1.4.2 [IRO-2] Disclosure requirements in ESRS covered by the
Company’s Sustainability Statement
Based on the results of the double materiality assessment, which includes an evaluation of key
impacts, risks, and opportunities, the Company has identified the material sustainability topics
presented in the Sustainability Statement and incorporated into the adopted Sustainability Strategy.
The process of identifying and evaluating impacts, risks, and opportunities is described in detail in
section [IRO-1], which outlines the process for determining material impacts.
74
In determining material information for disclosure, the Company applied the criteria set forth in ESRS
1, particularly the relevance of the information to understanding the nature, scope, and severity of
impacts, as well as the likelihood and consequences of risks and opportunities. In assessing
materiality, the Company applied quantitative thresholds, particularly regarding the magnitude,
frequency, or financial impact of individual impacts, risks, and opportunities. Information is disclosed
at the level of a topic, subtopic, or sub-subtopic, depending on the nature of the specific matter.
Within each sustainability topic identified as material through the double materiality assessment, the
Company did not automatically include all disclosure requirements from the ESRS thematic
standards. For each individual disclosure requirement, an assessment was conducted of its relevance
in light of the Company's activities, actual impacts, risks, and opportunities, as well as the availability
of reliable information. The list of disclosure requirements that were assessed as relevant on this
basis and included in the Sustainability Statement is shown in Table 23. Disclosure requirements
within material topics that were not assessed as relevant or useful for understanding the Company's
material impacts, risks, and opportunities were not included. The reasons for this include, in
particular, irrelevance to the Company's activities, the absence of the impacts or risks in question,
or disproportionate nature relative to the actual scope and severity of the impacts.
Sustainability issues related to ESRS thematic standards, [E-4] Biodiversity and ecosystems, [S-2]
Workers in the value chain, and [S-4] Consumers and end users were not identified as material based
on the double materiality analysis conducted; therefore, the Company does not disclose them in the
2025 Annual Report. Additional explanations are provided in section [SBM-3] Material impacts, risks
and opportunities and their interaction with strategy and business model.
In addition to disclosures on sustainability topics identified as material through the double materiality
assessment in accordance with the ESRS, the Company also reports on specific data points related
to its workforce (S1-8, S1-9, S1-10, S1-12, S1-15, and S1-16) that, while not identified as material,
the Company voluntarily includes in the report in accordance with the principles of transparency and
responsible reporting.
In accordance with ESRS 2 [IRO-2], the Company also discloses data points derived from other
applicable EU legislation. An overview of these disclosure requirements, their relevance based on the
results of the dual materiality assessment, and references to the corresponding disclosures in the
report are presented in Table 24.
75
Table 23: 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
42
[BP-2] Disclosures in relation to specific circumstances
43 - 46
Governance
[GOV-1] Role of administrative, management and supervisory bodies
46 - 52
[GOV-2] Information provided to and sustainability matters addressed by the
undertaking’s administrative, management and supervisory bodies
52 – 53
[GOV-3] Integration of sustainability-related performance in incentive schemes
53 – 54
[GOV-4] Statement on due diligence
54
[GOV-5] Risk management and internal controls over sustainability reporting
54 – 55
Strategy
[SBM-1] Strategy, business model and value chain
55 – 65
[SBM-2] Interests and views of stakeholders
65 – 67
[SBM-3] Material impacts, risks and opportunities and their interaction with the strategy
and business model
67 – 74
Impact, risk and opportunity management
[IRO-1] Description of the processes to identify and assess material impacts, risks and
opportunities
75 – 76
[IRO-2] Disclosure requirements in ESRS covered by the Company’s Sustainability
Statement
76 – 85
[E - 1] Climate change
Climate change adaptation, mitigation and
energy
[E1-1] Transition plan for climate change mitigation
108 – 112
[E1-2] Policies related to climate change mitigation and adaptation
112 – 114
[E1-3] Actions and resources in relation to climate change policies
114 – 117
[E1-4] Targets related to climate change mitigation and adaptation
118 – 125
[E1-5] Energy consumption and mix
125 – 127
[E1-6] Gross Scopes 1, 2, 3 and total GHG emissions
127 – 133
[E1-7] GHG removals and GHG mitigation projects financed through carbon credits
133
[E1-8] Internal carbon pricing
133
[E1-9] Anticipated financial effects from material physical and transition risks and
potential climate-related opportunities
133 - 139
[E - 2] Pollution
Pollution of air, water, soil, use of
substances of concern and of very high
concern
[E2-1] Pollution-related policies
140 – 145
[E2-2] Pollution-related measures and sources
145 – 147
[E2-3] Pollution targets
147 – 150
[E2-4] Air, water and groundwater pollution
150 – 154
[E2-5] Substances of concern and substances of very high concern
154 – 157
[E2-6] Potential financial effects from pollution-related impacts, risks and opportunities
156 – 157
76
[E - 3] Water resources
Water
[E3-1] Policies related to water resources
159
[E3-2] Actions and resources related to water resources
160
[E3-3] Targets related to water resources
160 - 161
[E3-4] Water consumption
161 – 162
[E - 5] Resource use and circular economy
Waste
[E5-1] Policies related to circular economy
164 – 165
[E5-2] Actions and resources related to the circular economy
165 – 166
[E5-3] Targets related to the circular economy
166 – 167
[E5-4] Resource inflows
167
[E5-5] Resource outflows
167 – 169
[S - 1] Own workforce
Working conditions, equal treatment and
equal opportunities for all
[S1-1] Policies related to own workforce
172 – 175
[S1-2] Processes for engaging with own workers and workers’ representatives about
impacts
175 – 176
[S1-3] Processes to remediate negative impacts and channels for own workers to raise
concerns
176 – 177
[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
177 – 180
[S1-5] Targets related to managing material negative impacts, advancing positive
impacts and managing material risks and opportunities
181
[S1-6] Characteristics of the Company's employees
182
[S1-7] Characteristics of non-employee workers in the Company’s own workers
183
[S1-8] Collective bargaining coverage and social dialogue
183 - 184
[S1-9] Diversity metrics
184
[S1-10] Adequate wages
184 - 185
[S1-11] Social protection
185
[S1-12] Persons with disabilities
185 - 186
[S1-13] Training and skills development metrics
186
[S1-14] Health and safety metrics
186 - 187
[S1-15] Work-life balance metrics
188
[S1-16] Remuneration metrics (pay gap and total remuneration)
188
[S1-17] Incidents, complaints and severe human rights impacts
189
[S - 3] Affected communities
Economic, social and cultural rights of
communities
[S3-1] Policies related to affected communities
192 - 193
[S3-2] Processes for engaging with affected communities about impacts
194
77
[S3-3] Processes to remediate negative impacts and channels for affected communities
to raise concerns
194 – 195
[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
195 – 197
[S3-5] Targets related to managing material negative impacts, advancing positive
impacts and managing material risks and opportunities
198 – 200
[G - 1] Business conduct
Whistleblower protection, supplier
relationship management, corruption and
bribery
[G1-1] Business conduct policies and corporate culture
202 – 205
[G1-2] Management of relationships with suppliers
205 – 206
[G1-3] Prevention and detection of corruption or bribery
206
[G1-4] Confirmed incidents of corruption or bribery
206 - 2079
[G1-6] Payment practices
207
78
Table 24: List of ESRS data points derived from other EU legislation (Appendix B)
Disclosure
requirement
Paragraph
Sustainability Statement | Appendix
Reference
to SFDR
Reference
to Pillar 3
Reference to the
Benchmarks
Regulation
Reference to
EU climate
rules
Statement
Location in the report
ESRS 2 GOV-1
21 (d)
Gender representation on boards
X
X
YES – DMA material
[GOV-1] Role of administrative,
management, and supervisory bodies; p.
46- 52
ESRS 2 GOV-1
21 (e)
Proportion of independent board members
X
YES – DMA material
[GOV-1] Role of administrative,
management, and supervisory bodies; p.
50
ESRS 2 GOV-4
30
Due diligence statement
X
YES – DMA material
[GOV-4] Due diligence statement; p. 49–
54
ESRS 2 SBM-1
40 (d) i
Involvement in activities related to fossil fuels
X
X
X
Not relevant
ESRS 2 SBM-1
40 (d) ii
Involvement in activities related to chemical
production
X
X
YES – DMA material
[SBM-1] Strategy, business model and
value chain; p. 55 - 56
ESRS 2 SBM-1
40 (d) iii
Involvement in activities related to controversial
weapons
X
X
Not relevant
ESRS 2 SBM-1
40 (d) iV
Involvement in activities related to tobacco
cultivation and production
X
Not relevant
ESRS E1-1
14
Plan for transition to climate neutrality by 2050
X
YES – DMA material
[E1-1] Climate change mitigation
transition plan; p. 108 - 110
ESRS E1-1
16 (g)
Companies excluded from Paris Agreement-
aligned benchmarks
X
X
YES – DMA material
[E1-1] Climate change mitigation
transition plan; p. 110
ESRS E1-4
34
GHG emission reduction targets
X
X
X
YES – DMA material
[E1-4] Targets related to climate change
mitigation and adaptation; p. 118 - 122
ESRS E1-5
38
Fossil fuel energy consumption, broken down by
source (only sectors with high environmental
impact)
X
YES – DMA material
[E1-5] Energy consumption and mix; p.
125
ESRS E1-5
37
Energy consumption and energy mix
X
YES – DMA material
[E1-5] Energy consumption and mix; p.
125
ESRS E1-5
40-43
Energy intensity associated with activities in high-
impact climate sectors
X
YES – DMA material
[E1-5] Energy consumption and mix; p.
126
ESRS E1-6
44
Scope 1, 2, and 3 GHG emissions and total GHG
emissions
X
X
X
YES – DMA material
[E1-6] Gross Scopes 1, 2, 3, and total
greenhouse gas emissions; p. 127 - 130
79
ESRS E1-6
53-55
Intensity of gross GHG emissions
X
X
X
YES – DMA material
E1-6] Gross Scopes 1, 2, 3, and total
greenhouse gas emissions; p. 132
ESRS E1-7
56
GHG removals and carbon credits
X
Not relevant
ESRS E1-9
66
Exposure of the reference portfolio to climate-
related physical risks
X
YES – DMA material
[E1-9] Expected financial impacts due to
material physical and transition risks and
potential opportunities related to climate;
p. 133 - 139
ESRS E1-9
66 (a), 66 (c)
Breakdown of monetary amounts by acute and
chronic physical risks
Location of significant assets subject to material
physical risk
X
YES – DMA material
[E1-9] Expected financial impacts due to
material physical and transition risks and
potential opportunities related to climate;
p. 133 - 134
ESRS E1-9
67 (c)
Breakdown of the book value of its real estate
assets by energy class
X
Not relevant
ESRS E1-9
69
The portfolio’s exposure to climate-related
opportunities
X
YES – DMA material
[E1-9] Expected financial impacts due to
material physical and transition risks and
potential opportunities related to climate;
p. 133 - 134
ESRS E2-4
28
The quantity of each pollutant listed in Annex II to
the Regulation on the European Pollutant
Release and Transfer Register (European
Pollutant Release and Transfer Register)
released into the air, water, and soil
X
YES – DMA material
[E2-4] Air, water, and groundwater
pollution; p. 150 - 154
ESRS E3-1
9
Water and marine resources
X
YES – DMA material
[E3-1] Policies related to water resources;
p. 159 - 160
ESRS E3-1
13
Targeted policy
X
YES – DMA material
[E3-1] Policies related to water resources;
p. 159 - 160
ESRS E3-1
14
Sustainable oceans and seas
X
Not DMA material
ESRS E3-4
28 (c)
Total volume of recycled and reused water
X
YES – DMA material
[E3-4] Water extraction; p. 161
ESRS E3-4
29
Total water consumption in m³ per net revenue
from own operations
X
YES – DMA material
[E3-4] Water extraction; p. 161
ESRS 2- SBM 3 -
E4
16 (a) i
X
Not DMA material
ESRS 2- SBM 3 -
E4
16 (b)
X
Not DMA material
ESRS 2- SBM 3 -
E4
16 (c)
X
Not DMA material
80
ESRS E4-2
24 (b)
Sustainable practices or policies related to
land/agriculture
X
Not DMA material
ESRS E4-2
24 (c)
Sustainable practices or policies related to
oceans/seas
X
Not DMA material
ESRS E4-2
24 (d)
Policies to address deforestation
X
Not DMA material
ESRS E5-5
37 (d)
Non-recycled waste
X
YES – DMA material
[E5-5] Resource outflow; p. 167 - 169
ESRS E5-5
39
Hazardous waste and radioactive waste
X
YES – DMA material
[E5-5] Resource outflow; p. 167 - 169
ESRS 2- SBM3 -
S1
14 (f)
Risk of forced labour incidents
X
Not relevant
ESRS 2- SBM3 -
S1
14 (g)
Risk of child labour incidents
X
Not relevant
ESRS S1-1
20
Human rights policy commitments
X
YES – DMA material
[S1-1] Policies related to the own
workforce; p. 172 - 175
ESRS S1-1
21
Due diligence policies regarding issues covered
by the International Labour Organisation’s Core
Conventions 1 through 8
X
YES – DMA material
[S1-1] Policies related to the own
workforce; p. 175
ESRS S1-1
22
Procedures and measures to prevent human
trafficking
X
Not relevant
ESRS S1-1
23
Policy or management system to prevent
workplace accidents
X
YES – DMA material
[S1-1] Policies related to the own
workforce; p. 172 - 175
ESRS S1-3
32 (c)
Mechanisms for addressing complaints
X
YES – DMA material
[S1–3] Processes for addressing negative
impacts and channels for expressing
concerns of the workforce; p. 176 - 177
ESRS S1-14
88 (b) in (c)
Number of fatalities and the number and rate of
work-related accidents
X
X
YES – DMA material
[S1–14] Health and safety indicators; p.
186 - 187
ESRS S1-14
88 (e)
Number of days lost due to injuries, accidents,
fatalities, or illness
X
YES – DMA material
[S1–14] Health and safety indicators; p.
186 - 187
ESRS S1-16
97 (a)
Unadjusted pay gap
X
X
Not DMA material
[S1–16] Remuneration indicators (pay
gap and total remuneration); p. 188
ESRS S1-16
97 (b)
Excessive executive pay
X
Not DMA material
[S1–16] Remuneration indicators (pay
gap and total remuneration); p. 188
ESRS S1-17
103 (a)
Incidents of discrimination
X
YES – DMA material
[S1–17] Incidents, complaints, and
serious human rights impacts; p. 189
81
ESRS S1-17
104 (a)
Failure to comply with the UN Guiding Principles
on Business and Human Rights and the OECD
X
X
Not relevant
ESRS 2- SBM3 –
S2
11 (b)
High risk of child labour or forced labour in the
supply chain
X
Not DMA material
ESRS S2-1
17
Human rights policy commitments
X
Not DMA material
ESRS S2-1
18
Policies regarding workers in the value chain
X
Not DMA material
ESRS S2-1
19
Failure to comply with the UN Guiding Principles
on Business and Human Rights and the OECD
Guidelines
X
X
Not DMA material
ESRS S2-1
19
Due diligence policies regarding issues covered
by the International Labour Organisation’s Core
Conventions 1 to 8
X
Not DMA material
ESRS S2-4
36
Human rights issues and incidents related to
upstream and downstream parts of the value
chain
X
Not DMA material
ESRS S3-1
16
Human rights policy commitments
X
YES – DMA material
[S3-1] Policies regarding affected
communities; p. 192 - 193
ESRS S3-1
17
Failure to comply with the UN Guiding Principles
on Business and Human Rights, ILO principles,
and/or OECD Guidelines
X
X
YES – DMA material
[S3-1] Policies regarding affected
communities; p. 193
ESRS S3-4
36
Human rights issues and incidents
X
YES – DMA material
[S3-4] Actions taken regarding significant
impacts on affected communities and
approaches to managing significant risks
and capitalising on significant
opportunities related to affected
communities, as well as the effectiveness
of such actions; p. 195 - 197
ESRS S4-1
16
Policies regarding consumers and end users
X
Not DMA material
ESRS S4-1
17
Failure to comply with the UN Guiding Principles
on Business and Human Rights and the OECD
Guidelines
X
X
Not DMA material
ESRS S4-4
35
Human rights issues and incidents
X
Not DMA material
ESRS G1-1
10 (b)
United Nations Convention against Corruption
X
YES – DMA material
[G1-1] Business conduct policies and
corporate culture; p. 203
ESRS G1-1
10 (d)
Whistleblower protection
X
YES – DMA material
[G1-1] Business conduct policies and
corporate culture; p. 203 - 204
82
ESRS G1-4
24 (a)
Fines for violations of anti-corruption and anti-
bribery laws
X
X
YES – DMA material
[G1-4] Confirmed cases of corruption or
bribery; p. 206
ESRS G1-4
24 (b)
Anti-corruption and anti-bribery standards
X
YES
[G1-4] Confirmed cases of corruption or
bribery; p. 206
83
5.2 [E] Environmental information
5.2.1 Report on environmentally sustainable economic activities and
investments – ESRS 2
The Company discloses information on how and to what extent its activities are linked to 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 establishing a framework
to promote sustainable investment, Commission Delegated Regulation 2021/2139 of 4 June 2021,
and amending Regulation (EU) 2019/2088). Disclosure of information refers 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 laying down technical screening criteria to determine
the conditions under which an economic activity is considered to contribute significantly to the
sustainable use and protection of water and marine resources, the transition to a circular economy,
the prevention and control of pollution, or the protection and restoration of biodiversity and
ecosystems, and to determine whether that economic activity does not significantly harm any of the
other environmental objectives, and amending Commission Delegated Regulation (EU) 2021/2178
regarding specific public disclosures for these economic activities.
The EU taxonomy covers 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,
• conservation and restoration of biodiversity and ecosystems.
In 2025, we continued to work on our internal structures through training, familiarising ourselves
with and studying all applicable regulations and directives to make taxonomy reporting more effective
and reliable, while following evolving market practices and guidelines, including the EU Commission’s
frequently asked questions and answers.
Based on new information published in 2025, we have made adjustments to our investment reporting
on capital contributions, as detailed below. All activities are defined as taxonomically eligible but non-
aligned due to difficulties in obtaining appropriate evidence along the supply and sales chain. We will
strive to obtain the missing documentation and thereby change the status of those activities that we
can define as aligned with the taxonomy.
The Company's data is aggregated at the level of individual taxonomically defined activities, in
accordance with the relevant EU Regulations, including the NACE classification of economic activities.
The indicators are calculated based on the definitions in the Annex to Regulation 2020/852 – Key
Performance Indicators for Non-Financial Enterprises. Company-level data is obtained from financial
statements, while activity-level data is obtained from the information system. To avoid double
counting, we track revenue from the sale of products or services and OpeEx linked to specific
activities, operations, and tasks.
The proportion of revenue from products or services related to economic activities
acceptable under the taxonomy
The Company specialises in the production and marketing of titanium dioxide, an activity that has
not yet been assessed for its suitability or alignment with the taxonomy; consequently, it is not listed
84
among the activities that are considered acceptable under the taxonomy in terms of achieving climate
goals. This in no way implies that the Company does not conduct its operations with a high degree
of environmental responsibility and a commitment to decarbonisation. Nor does it mean that it has
no actual or potential significant impacts on the decarbonisation of the economy (particularly as an
enabling activity for the construction sector). The activities of the Company complement a wide range
of other products, such as: powder coatings, masterbatches, agricultural products, the manufacture
of chemical process equipment, and the production of sulphuric acid and gypsum as by-products,
through which the Company is also seeking opportunities for taxonomy-aligned revenues. An
important part of sustainable business operations is the removal of non-hazardous, recyclable, and
still-usable waste. This activity is also strongly reflected in the circular economy. For disclosures and
the presentation of indicators, we used the formats specified in EU Regulation 2023/2486.
In calculating the indicators shown in the tables, there was no duplication of economic activities, as
a review confirmed that they meet the criteria for making a significant contribution to a single
environmental objective. Each activity that generated taxonomically eligible revenue has separate
implementation obligations.
The proportion of revenue referred to in 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 intangible ones,
related to 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 includes revenue recognised in accordance with paragraph 82(a) of the International
Financial Reporting 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 that have been adapted to climate
change in accordance with Article 11(1)(a) of Regulation (EU) 2020/852 and Annex II to Delegated
Regulation (EU) 2021/2139, unless those activities:
• are considered enabling activities in accordance with Article 11(1)(b) of Regulation 2020/852
or
• are themselves aligned with the taxonomy.
Activities that are acceptable under the taxonomy, as shown in the table, and the share of revenue
from products or services related to economic activities linked to the taxonomy are:
• Collection and transport of non-hazardous waste 2.3.
• Hotels, vacation rentals, camping grounds, and similar accommodation 2.1.
• Energy production using photovoltaic technology 4.1.
We have added a circular economy activity related to the marketing of white gypsum—a byproduct
of titanium dioxide production that we successfully market—to Section 2.3 on the collection and
transport of non-hazardous waste. The activity we are additionally including in the report is “Providing
short-term tourist accommodation with or without related services.” Offering and providing
employees with the opportunity to use vacation facilities significantly impacts satisfaction, work
performance, commitment, and increased 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 impacts the calculation of
the percentage share of total revenue. This indicator is 34 percent higher than in the previous period.
All data is also presented in more detail in the financial disclosures, while the goals for future periods
are outlined in the business section of this report.
85
5.2.1.1 Proportion of turnover derived from products or services associated with taxonomy-aligned
economic activities – disclosure for 2025
Table 25: Proportion of turnover derived from products or services associated with taxonomy-aligned economic activities; see Income statement line 1
Financial year 2025
Year
Criteria for material contribution
Criteria for non-significant harm (h)
Economic activities
(1)
Labels
(a)(2)
Turnover (3)
Share of
turnover
in 2025
Climate change
mitigation (5)
Climate change
adaptation (6)
Water (7)
Pollution
(8)
Circular economy (9)
Biodiversity
(10)
Climate change
mitigation (11)
Climate change
adaptation (12)
Water (13)
Pollution
(14)
Circular economy (15)
Biodiversity (16)
Minimum protective
measures (17)
Share of
taxonomy-
aligned turnover
(A.1) or
taxonomy-eligible
(A.2), year N–1
(18)
Enabling
activity
category
(19)
Transitional
activity
category (20)
Text
Currency
%
YES;
NO; TNA
(b) (c)
YES;
NO; TNA
(b) (c)
YES;
NO; TNA
(b) (c)
YES;
NO; TNA
(b) (c)
YES;
NO; TNA
(b) (c)
YES;
NO; TNA
(b) (c)
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
%
O
P
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (aligned with the taxonomy)
Revenue from environmentally
sustainable activities (taxonomy-
aligned) (A.1)
%
%
%
%
%
%
%
NO
NO
NO
NO
NO
NO
NO
%
of which enabling
%
%
%
%
%
%
%
NO
NO
NO
NO
NO
NO
NO
%
of which enabling
%
%
NO
NO
NO
NO
NO
NO
NO
%
A.2 Taxonomy-eligible activities but are not environmentally sustainable (taxonomy-non-aligned activities or TNA) (g)
TA;
TNA (f)
TA; TNA
(f)
TA; TNA
(f)
TA;
TNA (f)
TA;
TNA (f)
TA;
TNA (f)
Collection and transport
of non-hazardous waste
KG2,3
1,798,351
0.90%
TNA
TNA
TNA
TNA
TNA
TNA
0.67%
Hotels, vacation rentals,
campgrounds, and
similar accommodation
BPS 2,1
356,618
0.18%
TNA
TNA
TNA
TNA
TNA
TNA
0.18%
Energy production using
photovoltaic technology
BPS 4,1
246,448
0.12%
TNA
TNA
TNA
TNA
TNA
TNA
0.06%
Turnover from taxonomy-eligible
activities that are not environmentally
sustainable (activities not aligned with
the taxonomy) (A.2)*
2,401,417
1.20%
%
%
%
%
%
%
0.91%
A. Turnover from taxonomy-eligible
activities (A.1 + A.2)
0,00
0%
%
%
%
%
%
%
0.00%
B. ACTIVITIES INELIGIBLE UNDER THE TAXONOMY
Turnover from activities ineligible
under the taxonomy
196,339,864
98.80%
TOTAL
198,801,281
100%
* The reason for the low share of revenues is the company’s dominant activity.
86
5.2.1.2 Proportion of capital expenditure in products or services
related to taxonomy-eligible economic activities
The only taxonomy-eligible activities for investments in fixed assets for the 2025 financial year that
were identified are:
• transportation by motorcycles, passenger cars, and light commercial vehicles 6.5.
The activity included in the table Investments in fixed assets for products or services related to
economic activities aligned with the taxonomy is transportation by motorcycles, passenger cars, and
light commercial vehicles (6.5), which refers to the purchase of electric vehicles and accounts for
1.34% of total investments in fixed assets.
The share of investments in fixed assets referred to in point (b) of Article 8(2) of Regulation (EU)
2020/852 is calculated as the numerator divided by the denominator.
Denominator
The denominator includes increases in tangible and intangible assets during the relevant financial
year before depreciation and amortisation and all remeasurements, including those arising from
revaluations and impairments, for the relevant financial year, and excluding changes in fair value.
For non-financial entities that apply International Financial Reporting Standards (IFRS) as adopted
by Regulation (EC) No. 1126/2008, investments in fixed assets include costs that are recognised on
the basis of:
• IAS 16 Property, Plant, and Equipment, paragraph 73(e)(i) and (iii);
• IAS 38 Intangible Assets, paragraph 118(e)(i);
• IFRS 16 Leases, paragraph 53(h).
Leases that do not result in the recognition of a right-of-use asset are not considered investments in
fixed assets.
(1) Commission Regulation (EC) No 1126/2008 of 3 November 2008 adopting certain international
accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament
and of the Council (OJ L 320, 29 November 2008, p. 1), 10 December 2021 EN Official Journal of the
European Union L 443/17 1.1.2.2.
Numerator
All activities listed in the table fall under Category A, as deemed eligible according to the taxonomy.
In the calculation, the funds are allocated to investments in fixed assets, which are defined as the
denominator.
The numerator is equal to the portion of investments in fixed assets included in the denominator,
which is any of the following:
a) related to assets or processes associated with economic activities aligned with the taxonomy;
b) part of a plan to expand economic activities aligned with the taxonomy, or to enable them to
become economic activities eligible for the taxonomy (hereinafter: fixed asset investment
plan), under the conditions set out in the second subparagraph of this point 1.1.2.2;
c) related to the purchase of output from economic activities eligible under the taxonomy and
specific measures enabling the target activities to become low-carbon or to lead to reductions
in greenhouse gas emissions, in particular the activities referred to in points 7.3 to 7.6 of
87
Annex I to the Delegated Act on Climate, as well as other economic activities listed in the
delegated acts adopted pursuant to Articles 10(3), 11(3), 12(2), 13(2), 14(2), and 15(2) of
Regulation (EU) 2020/852, provided that such measures are introduced and begin to be
implemented within 18 months.
The plan for investments in fixed assets referred to in the first paragraph of this section 1.1.2.2
meets the following conditions:
a) the objective of the plan is to expand the Company's economic activities in line with the
taxonomy or to upgrade economic activities that are eligible for the taxonomy so that they
will be aligned with the taxonomy within five years;
b) the plan is disclosed at the consolidated level of economic activities and is approved by the
management body of non-financial undertakings, either directly or by delegation of authority.
If the relevant technical criteria for the review change before the completion of the fixed asset
investment plan, non-financial enterprises must either update the plan within two years to ensure
that the economic activities referred to in point (a) are aligned with the amended technical review
criteria upon completion of the plan, or recalculate the numerator of the key performance indicator
for fixed asset investments. Upon updating the plan, the period referred to in point (a) will restart.
The period referred to in point (a) of the second paragraph of this section 1.1.2.2 may exceed five
years only if a longer period is objectively justified by the specific characteristics of the economic
activity and the modernisation concerned, but it may not exceed 10 years. This justification should
be included in the fixed asset investment plan itself and in the accompanying information described
in detail in point 1.2.3 of this appendix.
If the plan for investments in fixed assets does not meet the conditions set forth in the second
paragraph of this section 1.1.2.2, the previously published key performance indicator relating to
investments in fixed assets is recalculated.
The numerator also includes the portion of investments in fixed assets intended to adapt economic
activities to climate change, in accordance with Annex II to the Delegated Act on Climate. The
numerator provides a breakdown for the portion of fixed asset investments allocated to a significant
contribution to climate change adaptation.
88
5.2.1.3 Proportion of capital expenditure related to products or services associated with taxonomy-eligible
economic activities – disclosure for 2025
Table 26: 5.2.1.3 Proportion of capital expenditure related to products or services associated with taxonomy-eligible economic activities. See the financial section of the report, section 2 Tangible
Fixed Assets, the entry in the table "Changes in property, plant, and equipment," under the column "Assets under construction."
Financial year 2025
Year
Criteria for material contribution
Criteria for non-significant harm (h)
Economic activities (1)
Labels (a)(2)
Investments in
fixed assets (3)
Share of
investments
in fixed
assets,
2025
Climate change mitigation
(5)
Climate change
adaptation (6)
Water (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change mitigation
(11)
Climate change
adaptation (12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum protective
measures (17)
Share of
taxonomy-
aligned
investments
in fixed
assets (A.1)
or
taxonomy-
eligible
(A.2), year
N–1 (18)
Enabling
activity
category
(19)
Transitional
activity
category
(20)
Text
Currency
%
YES;
NO;
TNA
(b) (c)
YES;
NO;
TNA
(b) (c)
YES;
NO;
TNA
(b) (c)
YES;
NO;
TNA
(b) (c)
YES;
NO;
TNA
(b) (c)
YES;
NO; TNA
(b) (c)
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
%
O
P
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (aligned with the taxonomy)
Investments in fixed assets related to
environmentally sustainable activities
(taxonomy-aligned) (A.1)
%
%
%
%
%
%
%
NO
NO
NO
NO
NO
NO
NO
%
of which enabling
%
%
%
%
%
%
%
NO
NO
NO
NO
NO
NO
NO
%
of which enabling
%
%
NO
NO
NO
NO
NO
NO
NO
%
A.2 Taxonomy-eligible activities but are not environmentally sustainable (taxonomy-non-aligned activities or TNA) (g)
TA;
TNA (f)
TA;
TNA (f)
TA;
TNA (f)
TA;
TNA (f)
TA;
TNA (f)
TA;
TNA (f)
Transport by motorcycle,
passenger car, and light
commercial vehicle
BPS 6.5
261,711
1.34%
TNA
TNA
TNA
TNA
TNA
TNA
1.16%
Investments in fixed assets in taxonomy-
eligible activities that are not
environmentally sustainable (activities not
aligned with the taxonomy) (A.2)
261,711
1.34%
%
%
%
%
%
%
8.92%
A. Investments in fixed assets related to
taxonomy-eligible activities (A.1 + A.2)
0.00
0%
%
%
%
%
%
%
0.00%
B. ACTIVITIES INELIGIBLE UNDER THE TAXONOMY
Investments in fixed assets related to
activities not eligible under the taxonomy
19,263,687
98.66%
TOTAL
19,525,398
100%
89
5.2.1.4 Proportion of investments in working capital related to
products or services associated with economic activities
eligible under the taxonomy
The proportion of investments in working capital related to taxonomy-eligible activities amounts to
0.23% of the total value. We identified the following activity:
2.1 Maintenance of vacation accommodation.
The proportion of investments in working capital referred to in point (b) of Article 8(2) of Regulation
(EU) 2020/852 is calculated as the numerator divided by the denominator.
Denominator
The denominator includes direct non-capitalised costs related to research and development, building
renovation measures, short-term leases, maintenance and repairs, and all other direct expenses
related to the day-to-day servicing of tangible fixed assets by the Company or a third party to whom
such activities are outsourced, which are necessary to ensure the uninterrupted and efficient
operation of such assets.
Non-financial corporations that apply generally accepted national accounting principles and do not
capitalise assets representing a right of use may include lease expenses in working capital, in addition
to the costs specified in the first subparagraph of point 1.1.3.1 of this appendix.
Numerator
The activity we identified in the OPEX table, which is aligned with the taxonomy, falls under Category
C and is defined as the denominator in the calculation formula.
The numerator is equal to the portion of investments in working capital included in the denominator,
which is any of the following:
a) related to assets or processes associated with economic activities aligned with the taxonomy,
including training and other human resource adaptation needs, as well as direct non-
capitalised costs representing research and development; L 443/18 EN Official Journal of the
European Union, 10 December 2021;
b) part of a plan for investments in fixed assets to expand economic activities aligned with the
taxonomy or to enable them to become economic activities eligible under the taxonomy,
aligned with the taxonomy within a predetermined timeframe, as specified in the second
paragraph of this section 1.1.3.2;
c) related to the purchase of output from economic activities, aligned with the taxonomy, and
specific measures enabling target activities to become low-carbon or to lead to reductions in
greenhouse gas emissions, as well as specific measures for the renovation of buildings set
out in the delegated acts adopted pursuant to Article 10(3), 11(3), 12(2), 13(2), 14(2), or
15(2) of Regulation (EU) 2020/852, provided that such measures are introduced and begin
to be implemented within 18 months.
The plan for investments in fixed assets referred to in the first paragraph of this section 1.1.3.2
meets the conditions set forth in section 1.1.2.2 of this appendix.
Research and development costs that have already been accounted for in key performance indicators
for investments in fixed assets are not considered investments in working capital.
90
The numerator also includes the portion of investments in working capital intended to adapt economic
activities to climate change, in accordance with Annex II to the Delegated Act on Climate. The
numerator provides a breakdown for the portion of investments in working capital allocated to a
significant contribution to climate change adaptation.
Where investments in working capital are not material to the business model of non-financial
enterprises, such enterprises:
a) are exempt from calculating the numerator of the key performance indicator for investments
in working capital in accordance with section 1.1.3.2 and disclose that this numerator is equal
to zero,
b) disclose the total value of the denominator for investments in working capital, calculated in
accordance with section 1.1.3.1,
c) explain that there are no significant investments in working capital in their business model.
91
5.2.1.5 Proportion of investments in working capital related to products or services associated with
taxonomy-eligible economic activities – disclosure for 2025
Table 27: Proportion of investments in working capital related to products or services associated with taxonomy-eligible economic activities. See the Income statement, "Service expenses" item
Financial year 2025
Year
Criteria for material contribution
Criteria for non-significant harm (h)
Economic activities
(1)
Labels
(a)(2)
Investments
in working
capital (3)
Share of
investments
in working
capital,
2025
Climate change mitigation
(5)
Climate change adaptation
(6)
Water (7)
Pollution (8)
Circular economy (9)
Biodiversity (10)
Climate change mitigation
(11)
Climate change adaptation
(12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum protective
measures (17)
Share of
taxonomy-
aligned
investments
in working
capital (A.1)
or
taxonomy-
eligible
(A.2), year
N–1 (18)
Enabling
activity
category
(19)
Transitional
activity
category
(20)
Text
Currency
%
YES;
NO; TNA
(b) (c)
YES;
NO;
TNA
(b) (c)
YES;
NO;
TNA
(b) (c)
YES;
NO;
TNA
(b) (c)
YES;
NO;
TNA
(b) (c)
YES;
NO;
TNA
(b) (c)
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
YES/-
NO
%
O
P
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities (aligned with the taxonomy)
Investments in working capital
for environmentally sustainable
activities (taxonomy-aligned) (A.1)
0
%
%
%
%
%
%
%
NO
NO
NO
NO
NO
NO
NO
%
of which enabling
0
%
%
%
%
%
%
%
NO
NO
NO
NO
NO
NO
NO
%
of which enabling
0
%
%
NO
NO
NO
NO
NO
NO
NO
%
A.2 Taxonomy-eligible activities but are not environmentally sustainable (taxonomy-non-aligned activities or TNA) (g)
TA; TNA
(f)
TA;
TNA
(f)
TA;
TNA
(f)
TA;
TNA
(f)
TA;
TNA (f)
TA;
TNA (f)
Maintenance of
vacation
accommodation
BR2.1
17,385
0.32%
TNA
TNA
TNA
TNA
TNA
TNA
0.64%
Investments in working capital in
taxonomy-eligible activities that
are not environmentally
sustainable (activities not
aligned with the taxonomy) (A.2)
17,385
0.32%
%
%
%
%
%
%
0.64%
A. Investments in working
capital in taxonomy-eligible
activities (A.1 + A.2)
0.00
0%
%
%
%
%
%
%
0.00%
B. ACTIVITIES INELIGIBLE FOR THE TAXONOMY
Investments in working capital
related to activities not eligible
under the taxonomy
5,397,152
99.68%
TOTAL
5,414,537
100%
92
5.2.1.6 Summary tables of material contributions by activity
Table 28: Proportion of revenue according to alignment with the EU taxonomy
Proportion of revenue/total revenue
Taxonomy-
aligned according
to objectives
Taxonomy-eligible
according to
objectives
BSP
%
0.30%
PPS
%
%
VMV
%
%
KG
%
0.90%
PNO
%
%
BRE
%
%
Table 29: Proportion of CapEx according to alignment with the EU taxonomy
Proportion of capital expenditure/total
capital expenditure (CapEx)
Taxonomy-aligned
according to
objectives
Taxonomy-
eligible according
to objectives
BSP
%
1.34%
PPS
%
%
VMV
%
%
KG
%
%
PNO
%
%
BRE
%
%
Table 30: Proportion of OpEx according to alignment with the EU taxonomy
Proportion of operating expenditure/total
operating expenditure (OpEx)
Taxonomy-aligned
according to
objectives
Taxonomy-
eligible according
to objectives
BSP
%
%
PPS
%
%
VMV
%
%
KG
%
%
PNO
%
%
BRE
%
0.32%
93
5.2.1.7 Information referred to in Article 8 (6) and (7) on disclosure of
nuclear energy and gas-related activities (Annex XII of
Commission Delegated Regulation EU 2022/1214).
Table 31: Overview of activities in the field of nuclear energy and natural gas
Activities in the field of nuclear energy and natural gas
Line
Activities in the field of nuclear energy
1
The Company carries out, funds or has exposures to research, development, demonstration and
deployment of innovative electricity generation facilities that produce energy from nuclear
processes with minimal waste from the fuel cycle.
NO
2
The Company carries out, funds or has exposures to the construction and safe operation of new
nuclear installations to produce electricity or process heat, including for the purposes of district
heating or industrial processes such as hydrogen production, as well as their safety upgrades,
using best available technologies.
NO
3
The Company carries out, funds or has exposures to the safe operation of existing nuclear
installations that produce electricity or process heat, including for the purposes of district heating
or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
NO
4
The Company carries out, funds or has exposures to the construction or operation of electricity
generation facilities that produce electricity using fossil gaseous fuels.
NO
5
The Company carries out, funds or has exposures to the construction, refurbishment, and operation
of combined heating/cooling and power generation facilities using fossil gaseous fuels.
NO
6
The Company carries out, funds or has exposures to the construction, refurbishment and operation
of heat generation facilities that produce heating/cooling using fossil gaseous fuels
NO
The report is consistent in both language and content with the structure and terminology of the
Company's Sustainability report, and supports a comprehensive presentation of the environmental,
social, and governance (ESG) aspects of its operations.
The disclosures in this report supplement information on the environmental pillar of sustainability
reporting and highlight the Company's systematic approach to managing environmental impacts,
resource efficiency, the transition to a low-carbon economy, and the development of circular business
models. Particular emphasis is placed on transparency, data comparability, and compliance with the
applicable European regulatory framework.
The Company will continue to enhance its internal processes, metrics, and data sources with the aim
of improving the quality of disclosures, increasing the proportion of taxonomically aligned activities,
and strengthening long-term resilience and sustainable value for all key stakeholders.
Assessment of the Company’s Alignment with the EU Taxonomy
1. Purpose and Methodology
In 2025, the Company performed an assessment of the alignment of its economic activities with
Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable
investment (EU Taxonomy).
The assessment was carried out in accordance with the methodology set out in the relevant
Taxonomy Delegated Acts and included the following steps:
1. identification of taxonomy-eligible economic activities,
2. assessment of compliance with the technical screening criteria for Substantial Contribution
(SC),
3. assessment of compliance with the Do No Significant Harm (DNSH) principle,
4. verification of compliance with Minimum Safeguards,
5. calculation of the shares of revenue, capital expenditure (CAPEX), and operating expenditure
(OPEX) related to taxonomy-aligned activities.
94
2. Identification of Taxonomy-Eligible Activities
Based on an analysis of the Company’s business model and activities, the following economic
activities falling within the scope of the EU Taxonomy were identified:
Table 32: Activities falling within the scope of the EU Taxonomy framework
Business activity
Taxonomy activity
Environmental objective
Production of inorganic chemicals and pigments
3.1 Manufacture of chemicals
Climate change mitigation
Energy efficiency improvements in production
7.3 Installation of energy-efficient equipment
Climate change mitigation
In-house energy generation (where applicable)
4.1 Electricity generation from renewable sources
Climate change mitigation
Environmental technology upgrades
1.4 Transition to low-carbon technologies
Climate change mitigation
Conclusion: A portion of the Company’s business activities is taxonomy-eligible under the EU
Taxonomy.
3. Assessment of Substantial Contribution
The Company assessed compliance with the technical screening criteria for Substantial Contribution,
primarily in relation to:
• reduction of greenhouse gas emissions (Scope 1 and Scope 2),
• improvements in energy efficiency of production processes,
• implementation of technological upgrades with a lower carbon footprint,
• optimisation of energy and raw material use.
Findings:
The core production activity currently does not fully meet all threshold values set out in the
Climate Delegated Act for the chemical industry.
Table 33: Review of compliance with threshold criteria under the EU Taxonomy for the core production activity
EU Taxonomy criterion
Status
Emission intensity (Scope 1 + 2)
󽆱 does not meet top 10% EU benchmark
Low-carbon / transitional technology
󽆱 not formally defined
Use of renewable energy
󽆱 insufficient impact on emissions profile
DNSH – pollution prevention
󷄧󼿒 generally fulfilled
Minimum safeguards
󷄧󼿒 fulfilled
However, specific capital investments (CAPEX) aimed at:
• improving energy efficiency,
• upgrading technology,
• reducing greenhouse gas emissions,
were assessed as meeting the Substantial Contribution criteria and therefore qualify as
taxonomy-aligned.
4. Assessment of the Do No Significant Harm (DNSH) Principle
The Company conducted an assessment of the impacts of its activities against all six environmental
objectives of the EU Taxonomy:
• climate change mitigation,
• climate change adaptation,
• sustainable use and protection of water and marine resources,
• transition to a circular economy,
95
• pollution prevention and control,
• protection and restoration of biodiversity and ecosystems.
Findings:
• activities are carried out in compliance with applicable environmental legislation and
integrated environmental permits,
• systems are in place for emissions monitoring and for the management of hazardous
substances and waste,
• no significant adverse impacts were identified that would constitute a breach of DNSH
criteria.
5. Minimum Safeguards
The Company meets the requirements of the minimum safeguards, as it:
• complies with the fundamental conventions of the International Labour Organization (ILO),
• follows OECD Guidelines and United Nations principles,
• has an occupational health and safety management system in place,
• complies with labour and employment legislation,
• has not identified any serious human rights violations or significant corruption risks.
6. Summary of Alignment and Taxonomy Indicators
Based on the assessment performed, the Company concludes:
• taxonomy-eligible activities: present,
• taxonomy-aligned activities: limited in scope, primarily at the CAPEX level,
• operating activities (revenues): currently largely not taxonomy-aligned, with a clearly
defined transition pathway.
Indicative summary:
In 2025, the Company realised a limited share of taxonomy-aligned CAPEX related to energy
efficiency improvements and enhanced environmental performance of production. The majority of
revenues were not generated from taxonomy-aligned activities. The Company has identified further
investment projects aimed at gradually improving alignment with the EU Taxonomy.
7. Improvement Plan
The Company plans to:
• continue investments in low-carbon and transitional technologies,
• further reduce CO₂ emissions per unit of product,
• strengthen the systematic monitoring of taxonomy indicators,
• gradually increase the share of taxonomy-aligned CAPEX.
96
5.2.2 [E1] Climate change
5.2.2.1 [GOV-3] Integration of sustainability-related performance in
incentive schemes
The remuneration system for the members of the Management Board is partly linked to the
achievement of the sustainability objectives and is detailed in section GOV-3.
The variable component of Management Board remuneration also depends on the successful
implementation of strategic projects, with at least one project directly related to sustainability topics,
although not necessarily climate-related or assessed against a greenhouse gas (GHG) reduction
target. The overall impact on remuneration in this case amounts to 20% of the total.
5.2.2.2 [SBM-3] Material impacts, risks and opportunities and their
interaction with strategy and business model
This section provides an overview of the key impacts, risks and opportunities. These are detailed in
subsequent chapters. This section also provides a summary and basic rationale for their materiality.
Table 34: Impacts, risks and opportunities (IRO), climate change
Material impacts, risks and/or
opportunities
Definition
Location/value
chain
Time period
Own activity
Downstream part
of the value chain
Upstream part of
the value chain
Short-term
Medium
-term
Long-term
Use of river water and its impact
on the adaptive capacity of the
aquatic ecosystem
Actual negative impact
x
x
Reduced production capacity due
to limited water supply for
industrial purposes during
periods of drought
Risk
x
x
CO
2
emissions from non-
renewable sources (Scopes 1
and 2)
Actual negative impact
x
x
CO
2
emissions in the upstream
and downstream value chains
(Scope 3)
Actual negative impact
x
x
x
Use of energy from fossil fuels
Actual negative impact
x
x
CO2 emissions from non-renewable sources (Scopes 1 and 2): Emissions from the combustion
of fossil fuels account for the largest share of the Company's total GHG emissions and are associated
with regulatory risks and costs. Due to the use of energy from non-renewable sources—natural gas,
extra-light fuel oil, propane, and process emissions—and the use of electricity from non-renewable
sources in the manufacturing industry in Slovenia, the Company accounted for 4% of total emissions.
CO
2
emissions in the upstream and downstream value chains (Scope 3): As part of its
operations, the Company also generates indirect CO₂ emissions in the upstream and downstream
supply chains (Scope 3), which arise primarily from the procurement of raw materials, transportation,
waste management, and the use of sold products. These emissions account for 63% of the
97
Company's total emissions and thus represent a significant portion of the Company's overall carbon
footprint. These emissions result from the activities of external suppliers and the subsequent use of
products in customers' industrial processes.
Use of energy from fossil fuels: The Company has a material negative impact on the environment
due to its high consumption of energy from fossil fuels, which contributes to greenhouse gas
emissions and, consequently, to climate change. Despite a gradual increase in the share of energy
from renewable sources (RES) and nuclear sources, the majority of total consumption still comes
from fossil fuels. This poses a risk due to higher costs of emission allowances; there is a possibility
of stricter emissions legislation, which could lead to a reduction in competitiveness and a negative
impact on investments in sustainable projects.
Use of river water and its impact on the adaptive capacity of the aquatic ecosystem: The
Company uses water from the Hudinja river for its production processes. Long-term water use under
conditions of climate instability may affect the ecosystem’s natural ability to regenerate. Changes in
flow rates, temperature, and the chemical composition of the water may reduce the resilience of the
aquatic environment, posing an additional environmental risk. Due to climate change and longer
periods of drought, there is a short-term risk to the ability to draw water from the Hudinja river,
which could affect production capacity—a physical risk. Due to heavy rainfall, there is a long-term
physical risk that could lead to the collapse of the barrier at the Za Travnik gypsum disposal facility—
physical risk.
The resilience analysis focuses on the Company's own operations at the Celje and Mozirje sites and
covers all relevant physical and transitional climate risks. It was conducted in accordance with
internal methodologies and international expert recommendations (TCFD, IPCC SSP scenarios) and
includes a quantitative assessment of probability, impact, vulnerability, and resilience.
The climate resilience analysis began in 2025 and was completed in early 2026. The results are
included in the 2025 report. A new analysis will be conducted by the end of 2027, along with the
development of a transition plan.
The analysis included all key processes and locations that account for a significant portion of the
Company's environmental footprint and impact its strategic, financial, and operational stability. The
scope covers major production facilities, energy systems, critical process infrastructure, and internal
logistics flows. Key direct suppliers (Tier 1) of raw materials and energy sources were also taken into
account, as well as the largest customers, who, due to their scale and geographic dispersion, are
important for assessing overall climate risks in the value chain.
Despite the broad coverage, certain parts of the value chain were not included, either due to limited
data availability or because their impact is not material to the final assessment of resilience. The
following are therefore excluded from the analysis:
• indirect suppliers (Tier 2 and Tier 3) for whom sufficiently accurate data on locations or risk
exposure is not available;
• suppliers from regions where climate data does not allow for sufficient geographic resolution;
• smaller customers and distribution partners with immaterial financial impact;
• transit logistics routes with incomplete geolocation data;
• auxiliary administrative and minor infrastructure buildings that have no impact on business
continuity.
At the level of the broader value chain, risks were not assessed for locations where adequate climate
data or supplier data on energy mix, emissions, and other inputs necessary for assessing transition
risks were not available.
98
Despite these limitations, the analysis covers the processes, locations, and parts of the value chain
that account for the largest portion of the Company's environmental footprint and the bulk of its
financial and operational risks.
The analysis is based on a combination of global and regional climate projections, sectoral and
macroeconomic assumptions, and internal data on infrastructure and processes. For physical risks,
IPCC AR6/CMIP6 datasets were used where geolocation resolution of 5–10 km was available.
Transition risks are based on assumptions regarding carbon prices, the energy mix, technological
progress, and the consistency of the regulatory environment.
Three representative climate scenarios were selected for the impact assessment:
• SSP1-1.9 – ambitious global decarbonisation pathway: very rapid tightening of global
policies, high carbon price signals, accelerated decarbonisation of electricity and industry,
widespread electrification, strong consumer demand for low-carbon products.
• SSP1-2.6 – stable environment with moderate climate policies: strong and consistent
decarbonisation policies, stable carbon price signals, accelerated efficiency and transition to
RES, moderate transformation of demand.
• SSP5-8.5 – high-emission scenario with the highest exposure to physical risks: a carbon-
intensive energy mix for an extended period, less stringent policies; the highest expected
frequency and intensity of extreme weather events and associated operational and logistical
disruptions.
The range of scenarios allows for the consideration of both transitional risks (policy, market,
technology) and physical impacts (extreme events, water stress) that are relevant to the energy-
intensive chemical industry. The scenario framework is aligned with the Company's strategic
planning, investment cycles, and the lifespan of key infrastructure. The business model resilience
analysis was therefore conducted for a time horizon extending to 2030, in line with the Company's
sustainability strategy.
For each scenario, the following assumptions affecting the Company's operations were taken into
account:
• policies and regulations: the pace and stringency of climate policies, carbon price signals,
and environmental standards;
• macroeconomic trends: economic growth, global trade, and investment flows;
• energy consumption and energy mix: transition to low-carbon energy sources, energy
availability, and supply stability;
• technological developments: energy efficiency, decarbonisation of processes, and adaptation
technologies;
• social forces: stakeholder expectations, local communities, and customers (e.g., low-carbon
TiO₂).
These assumptions are important because they directly affect operating costs, the Company's
competitiveness, and its exposure to physical and transition risks. For the Company, as an energy-
intensive chemical company, the following are particularly important: carbon prices and ETS
regulations, the availability of low-carbon energy, and the reliability of supply, while physical risks
(heat stress, floods) affect business continuity, infrastructure operations, and supply chains.
The results of the analysis are based on available climate scenarios, input data, and expert
assumptions, which involve a certain degree of uncertainty typical of long-term climate projections.
The Company therefore views the results as a tool to support strategic decision-making and risk
management, rather than as an exact prediction of future conditions.
99
The analysis confirms that the level of exposure of our own sites to physical risks is low to moderate,
while the main sources of vulnerability stem from the broader value chain—particularly suppliers and
customers in regions with greater exposure to extreme weather events and water constraints.
The results of the analysis show that Company’s overall vulnerability to climate risks is moderate to
high, ranging between 0.50 and 0.63 depending on the scenario. This confirms that climate risks
represent a significant factor for the long-term stability of the Company’s business model.
The highest overall resilience was achieved in the SSP1-2.6 scenario (0.50), which allows for gradual
adaptation, a predictable regulatory environment, and manageable growth in physical climate
impacts. This scenario represents the most balanced framework for the Company’s long-term
strategic planning.
In the SSP1-1.9 scenario, lower overall resilience (0.40) was observed, primarily due to significantly
increased transition risks associated with stringent climate policies, high market demands for
decarbonisation, and increased reputational and market pressures.
The lowest long-term resilience was observed in the SSP5-8.5 scenario (0.38), where regulatory
pressures are lower in the short term, but physical climate risks increase significantly, particularly in
the value chain, especially among suppliers and customers operating in regions with greater exposure
to extreme weather events and water stress.
Although the Company is not yet actively following the comprehensive pathway of the 1.5 °C
scenario, it has already identified and begun implementing certain key measures that represent the
first step toward decarbonisation. These include measures to improve energy efficiency and introduce
renewable energy sources, which will enable further alignment with more ambitious climate policy
goals in the future.
The Company's long-term resilience will depend primarily on:
• comprehensive management of physical risks throughout the value chain,
• timely adaptation of the business model to the transition to a low-carbon economy,
• strategic cooperation with suppliers and customers,
• gradual improvements in energy efficiency, and investments in low-carbon technologies.
Scenario SSP1–2.6 was identified as the most appropriate strategic framework, as it provides the
most balanced ratio between transitional and physical risks and the highest overall resilience of the
Company.
100
Table 35: Physical and transition risks – gross and residual Risks
RISK
PERIOD
MITIGATION
GROSS RISK
in EUR
RESIDUAL
RISK in EUR
RISK
CLASSIFICATION
Reduced production capacity due to limited water
supply for process purposes during periods of
drought.
SHORT-
TERM
Optimisation of the operation of the 54.40 thickener in conjunction with HC.
7,098,000
2,770,000
PHYSICAL
Increasing internal water recycling.
Use of drinking water.
Political and legal decisions regarding CO2 equivalent
emissions.
LONG-
TERM
Regular cooperation with various authorities and consultants, and monitoring of the
political situation.
4,800,000
1,200,000
TRANSITIONAL
Reducing consumption and, consequently, emissions through energy efficiency and
renewable energy measures.
Heavy rainfall due to climate change (floods,
landslides), which could lead to barrier collapse.
LONG-
TERM
Based on the findings and recommendations of experts from the University of
Ljubljana, Faculty of Civil Engineering and Geodesy, we are carrying out maintenance
work on the high embankment barriers (Bukovžlak and Za Travnik) to ensure their
stability.
267,000,000
11,675,000
PHYSICAL
Filling and thereby reducing waterlogging at Za Travnik.
A customer in the Polymers business unit has sent
environmental criteria according to which suppliers are
expected to achieve carbon neutrality by 2030.
MEDIUM-
TERM
Carbon footprint calculation for the year 2025.
1,260,000
950,000
TRANSITIONAL
101
5.2.2.3 [IRO-1] Description of the processes to identify and assess
material climate-related impacts, risks, and opportunities
In 2025, the Company conducted its regular annual DMA review. We reviewed the assessments of
impacts, risks, and opportunities from 2024. We conducted the double materiality assessment (DMA)
review to ensure that it remains up-to-date and compliant with the provisions of the Company's
Policy on the Management of Impacts, Risks, and Opportunities. The annual review enables the
Company to regularly verify the relevance of identified climate-related impacts, risks, and
opportunities in light of current conditions, strategic directions, and stakeholder expectations.
In the process of identifying and assessing impacts, risks, and opportunities, the Company identified
the following impacts on climate change:
• CO2 emissions from non-renewable sources and processes (Scopes 1 and 2),
• CO2 emissions in the upstream and downstream value chain (Scope 3),
• use of river water and impact on the water system’s adaptive capacity,
• use of energy from fossil fuels.
The Company operates in a sector with a high climate impact, as its production processes require
intensive energy use; as an industrial facility in the chemical industry, it is aware of its responsibility
to reduce greenhouse gas (GHG) emissions and is committed to contributing to the mitigation of
climate change. Despite the implementation of sustainability measures, the Company currently
generates significant GHG emissions resulting from the use of fossil fuels, process emissions, and
indirect emissions from electricity consumption, as well as emissions in the upstream and
downstream value chains. We also identified climate-related physical and transition risks, which are
described in Section 5.2.2.2.
For the aforementioned negative impacts, we have established criteria in accordance with ESRS
requirements and assessed their significance based on their scale, scope, and irreversibility (see
Chapter [IRO-1] for a more detailed description). A detailed assessment of the impacts is provided
in the DMA preparation process.
In identifying and assessing climate-related impacts, the Company took into account the plans
outlined in its business strategy, which anticipates growth in production.
In identifying climate-related impacts, the Company conducted a systematic review of its operations,
production processes, and development plans—including plans for production growth—to identify
actual and potential future sources of greenhouse gas emissions and other climate-related impacts.
The review covered the Company's own operations (particularly fossil fuel use, process emissions,
and electricity consumption) as well as the upstream and downstream value chains, taking into
account any indirect impacts related to resource use, energy consumption, and logistics.
Based on this review, actual and potential impacts on climate change were identified and
subsequently incorporated into the materiality assessment process as part of the double materiality
analysis.
102
5.2.2.3.1 Use of climate-related scenario analysis in assessing risks and
opportunities at the Company
As part of the development of its sustainability strategy, the Company established a systematic
process for identifying and assessing physical risks related to climate change, both within its own
operations and throughout the value chain.
High-emission scenarios, as defined by the Intergovernmental Panel on Climate Change (IPCC), were
used. Based on this, the following procedure was carried out:
• identification of hazards, such as: drought and precipitation extremes affecting access to
water and the stability of dams,
• assessment of the exposure of assets and activities (TiO₂ production plant and waste
management facilities),
• calculation of the gross physical risk to the Company, expressed in EUR and as a percentage
of total assets,
• and alignment with time horizons (short-, medium-, and long-term), consistent with the
useful life of assets and strategic planning.
A review was also conducted for the upstream and downstream segments of the value chain, focusing
primarily on:
• physical and regulatory risks in the value chain (conflict/risk areas, water and energy supply,
etc.) and
• the effects of extreme weather events on key external service providers (e.g., logistics).
The scenarios used were selected to capture various possible developments in climate conditions and
their associated uncertainties. In doing so, the Company relied on available data relevant to the
location of its operations, taking into account that long-term estimates are subject to certain
limitations and uncertainties.
In identifying and assessing climate-related transition risks and opportunities, the Company
employed a structured process that covers its own operations and, where relevant, the upstream
and downstream parts of the value chain.
In the first step, the Company identified transition events that could result from changes in climate
policies, legislation, market demands, and technological developments, taking into account climate
scenarios consistent with limiting global warming to 1.5 °C, with limiting or without exceeding this
threshold. Particular attention was paid to political and legal changes at the EU level and to the
requirements of key customers related to the decarbonisation of supply chains.
The Company then assessed the extent to which its assets and business operations are exposed to
and sensitive to the identified transition risks and opportunities. The assessment was conducted by
considering the probability of individual events occurring, the magnitude of their impact, and their
expected duration, with risks and opportunities addressed in the short-, medium-, and long-term.
Based on this process, gross transition risks and opportunities were identified that could affect
operating costs, the Company's competitive position, and its long-term ability to maintain business
relationships. The findings were incorporated into the register of impacts, risks, and opportunities
and taken into account in the Company’s subsequent strategic and investment planning.
Using the classification of climate-related risks set out in Commission Delegated Regulation (EU)
2021/2139, relevant physical risks were identified and the exposure of its assets and operations to
these hazards in the short-, medium-, and long-term were assessed, with the risks being included in
103
the register of impacts, risks, and opportunities in accordance with the Policy on the Management of
Impacts, Risks and Opportunities.
In the process of assessing physical risks, the Company defined short-term (up to 1 year), medium-
term (2–4 years), and long-term (5 years or more) time horizons. These time periods were
determined by taking into account the expected useful lives of key assets, strategic planning periods,
and capital allocation plans.
Physical risks are assessed based on their potential impact over a specific time period and in relation
to the life cycle of assets to ensure alignment between risk management, investment planning, and
long-term business sustainability. Current assessments do not indicate a need for the early removal
or replacement of fixed assets due to climate or other external factors.
The Company appropriately assessed the physical risks in its risk register that could potentially affect
its assets or business operations. In doing so, it took into account the likelihood, severity, and
duration of the risks to the Company’s operations.
Climate scenarios help the Company assess how extreme weather events and long-term climate
change will affect its operations. In its assessment, the Company took into account the Policy on the
Management of Impacts, Risks, and Opportunities at the Company, and, based on these, assessed
the extent of exposure through financial consequences, while using frequency/probability to define
the time period.
As part of its risk register, the Company assessed the extent to which its assets and business
operations are exposed to physical risks associated with climate change, as well as their vulnerability
to such risks. In doing so, it considered the likelihood of occurrence, the magnitude of potential
impacts, and the duration of individual hazards, taking into account the actual location of its
operations.
The analysis of climate scenarios was used to help understand how risks might change in the future,
particularly in the period up to 2030, and was incorporated into the overall risk assessment,
regardless of differences in the time frames of the individual analyses.
Hazards and physical risks were identified based on the SPP5-8.5 high-emission climate scenarios,
which are grounded in the scientific findings of the Intergovernmental Panel on Climate Change
(IPCC) and are consistent with the guidelines for assessing physical risks as set forth in the ESRS E1
standard. The scenario used incorporates regional climate projections for the Company's business
area and takes into account the impacts of long-term temperature increases and changes in weather
patterns on physical risks.
The analysis focused on the Company's own operations, while risks in the value chain were not
included in the scenario analysis. Nevertheless, in 2025, the Company conducted a review of key
suppliers based on publicly available information and interviews with suppliers, and did not identify
any risks that could significantly impact its operations.
Scenario analysis was used to identify and assess key physical and transition risks and opportunities
that could affect the Company's business operations up to 2030. To capture the range of possible
future climate and transition conditions, in accordance with ESRS requirements, three climate
scenarios were used, as described in section 5.2.2.2.
Based on this analysis, we identified risks and opportunities that are considered material in the
short-, medium-, and long-term contexts. Specifically, the results of the scenarios were used to:
• identify transition risks, such as regulatory requirements,
104
• assess physical risks, such as the impacts of drought, and more frequent extreme weather
events.
In doing so, we ensured that the identified climate-related factors were appropriately incorporated
into the Company's business impact assessment and strategic planning. The findings of the analysis
were also reflected in the development of sustainability measures and in the assessment of
investment needs up to 2030. The process for identifying transition risks and opportunities is the
same as for identifying physical risks.
In identifying events related to the transition to a low-carbon economy, the Company took into
account short-, medium-, and long-term time horizons and assessed whether its assets and business
activities could be exposed to these events. Political and legal transition risks associated with the
development of environmental policies and legislation at the national and European levels were
identified as particularly material.
The Company operates in an environment of increasingly stringent environmental requirements,
particularly within the framework of the EU Emissions Trading System (EU ETS), which may have a
significant impact on the Company’s operating costs and investment decisions. Based on an analysis
of climate scenarios and expected regulatory developments, the following key transition risks were
identified:
• High costs of emission allowances. Rising prices of emission allowances in the EU ETS could
significantly increase the Company’s operating costs, particularly if there is no possibility of
a rapid transition to low-carbon technologies.
• Restrictions and stricter environmental standards. Tighter emissions legislation could lead to
new requirements regarding emission-reduction technologies.
• Reduced competitiveness and risk of production relocation. Higher emissions and energy
costs could affect the Company’s competitive position relative to firms in environments with
less stringent regulatory requirements.
• Negative impact on investments in sustainable projects. If companies were forced to allocate
more resources to cover emissions costs, fewer funds might remain for investments in low-
carbon technologies.
As part of its risk register, the Company assessed the exposure and sensitivity of its assets and
business activities to transition risks associated with the transition to a low-carbon economy.
Particular attention was paid to political and legal decisions related to the reduction of greenhouse
gas emissions, as well as to key customers’ requirements regarding environmental criteria.
The Company assessed that its activities are exposed to transition risks arising from stricter
regulations regarding CO₂ equivalent emissions and from market demands for the decarbonisation
of supply chains.
On this basis, the Company assessed the sensitivity of its assets and operations to transitional
events, taking into account the likelihood of occurrence, the magnitude of the impact, and the
expected duration; the results are incorporated into the risk register and subsequent strategic
planning.
In defining transition-related events and assessing its exposure, the Company identified risks based
on climate scenarios and hazards under the SPP1–1.9 scenario. Based on this scenario, the Company
identified transition risks and assessed their magnitude and impact.
As part of the development of its sustainability strategy, the Company identified certain assets and
activities that are not fully compatible with the transition to a climate-neutral economy by 2050, as
envisaged by EU climate policy. Currently, the biggest obstacles are:
105
• use of natural gas as a key energy source for high-temperature processes, which will be
difficult to replace with carbon-free sources in the long term without major technological or
infrastructural changes;
• process CO₂ emissions from titanium dioxide production, which result from chemical
reactions and cannot be easily prevented or captured using existing technologies.
These resources and related activities are currently inconsistent with long-term climate neutrality
goals and would require significant investments in alternative technologies or carbon capture, which
the Company has not yet specifically planned.
Although the Company has identified and is already implementing certain measures to improve
energy efficiency and reduce emissions, these measures are not sufficient to achieve full alignment
with the 1.5 °C scenario or carbon neutrality by 2050. A comprehensive review of all assets and
activities from the perspective of compatibility with decarbonisation goals is planned as part of the
preparation of the transition plan up to 2027.
In addition to natural gas use and process emissions, access to electricity from renewable sources
also poses a challenge. Although the Company strives to reduce the share of indirect emissions
(Scope 2), its dependence on the Republic of Slovenia’s electricity grid is a key constraint. Currently,
there is not enough green electricity available on the grid to enable a transition to 100% carbon-free
sources. Therefore, long-term alignment with carbon neutrality depends on the development of
national infrastructure and investments in renewable sources at the system level.
For this reason, among others, the Company has not yet defined all the measures needed to achieve
climate neutrality, but it is actively monitoring legislative developments, opportunities for long-term
procurement of renewable energy from Slovenian sources, and the potential for its own renewable
energy generation capacity.
The climate scenarios used were incorporated into the preparation of the business strategy for the
2024–2028 period in 2023, which also includes a link to the financial statements. In the financial
statements for 2025, the impacts of climate scenarios were indirectly taken into account through:
• planned investments in emissions reduction (CAPEX), which are included in the fixed assets
line item,
• estimates of energy costs, which, based on available information, did not require significant
changes,
• emission allowances acquired free of charge (the Company will remain a net recipient until
2030), meaning that no operating expenses are anticipated from this source.
In 2025, no asset impairments or changes in estimated useful lives were recognised as a direct result
of identified climate risks. Based on the analyses performed, no significant impacts of climate change
are currently expected (see section 25 Impact of climate change on the financial statements in the
financial section of the report).
5.2.2.4 [E1-1] Transition Plan for climate change mitigation
The Company recognises climate change as a critical issue and, in the spirit of climate change
mitigation, has begun reducing its greenhouse gas emissions. The Company aims to improve energy
efficiency, reduce its carbon footprint, and increase the share of renewable energy sources.
Accordingly, it developed a plan as part of its sustainability strategy, which defines strategic goals
and clear actions up to 2030, complete with specific deadlines and a CAPEX financial assessment.
Sustainability is also one of the main strategic pillars of the five-year business strategy for 2024–
2028.
106
Currently, no transition plan has been established in accordance with the requirements of the ESRS
E1 standard. Nevertheless, the Company has adopted certain measures in the areas of emissions
reduction and sustainable investments, which are already being implemented. In addition, a
comprehensive sustainability strategy was adopted in 2024, which includes strategic decarbonisation
goals, defined measures, timelines, and projected investments; however, this strategy does not yet
constitute a formalised "transition plan" as defined in ESRS E1.
The Company plans to establish an appropriate transition plan, in line with the requirements of ESRS
E1, by the end of 2027 at the latest, thereby ensuring compliance with regulatory requirements and
long-term decarbonisation goals.
The targets are not compatible with the requirements for limiting global warming to 1.5 °C in
accordance with the Paris Agreement. The Company's overarching commitment is to strive for a
carbon-neutral society by 2050, with specific measures to be defined after 2030. A more detailed
explanation can be found in section [SBM-1].
The Company set a key target of reducing its total carbon footprint by 10% by 2030 compared to
2021. To achieve this target, key decarbonisation measures have been identified across all three
emission scopes and are outlined in section [E1-3] Actions and resources in relation to climate change
policies. Key drivers for decarbonisation will be primarily in the areas of renewable energy sources
and energy efficiency measures. In 2025, the Company also calculated the carbon footprint of Scope
3 and identified decarbonisation opportunities in this area, including within the value chain. It has
already identified certain measures and will address the remaining ones with suppliers in the coming
years.
Figure 8: Reduction in CO
2
emissions from Scopes 1, 2, and 3 by 2030, calculated using the location-based method: 73,000
tonnes of TiO
2
The Company will allocate a total of approximately EUR 25 million to its transition plan by 2030. Of
this amount, investments totalling EUR 2,545,599 had already been made by the end of 2025.
107
5.2.2.4.1 Qualitative assessment of TGP emissions from key assets
The largest share of direct emissions associated with natural gas use comes from two calcination
kilns and dryers. Together, these facilities generate 26,181 tonnes of CO₂e annually, representing
approximately 9.5% of the Company’s total emissions (276,741 tonnes of CO₂e) in 2025.
Natural gas consumption within this asset group is concentrated primarily in two calcination furnaces
(approximately 70% of gas consumption). The furnaces have already been fully depreciated, but
they undergo regular technological upgrades and have an estimated remaining useful life of more
than 20 years. There is currently no technologically viable low-carbon alternative for the calcination
process that would enable equivalent production quality. This implies a certain degree of emissions
lock-in in the medium term.
Nevertheless, their relative share of the Company's total emissions is limited; therefore, these
facilities do not represent a key limiting factor in achieving long-term company-wide emission
reduction targets.
For drying machines, there are technological options for electrification or switching to steam systems;
however, current conditions in the energy market (the ratio between the price of electricity and
natural gas) make such investments economically unfeasible.
The Company views emissions associated with these assets as a manageable transitional risk,
primarily related to the regulatory environment (e.g., the EU ETS) and developments in energy
prices. Risk management includes continuous improvements in energy efficiency, technological
upgrades, and monitoring the development of alternative solutions.
The Company discloses its objectives and plans related to aligning its economic activities and
investments with the criteria set forth in Commission Delegated Regulation 2021/2139, including
investments in fixed assets and working capital, in the section Report on environmentally sustainable
economic activities and investments. Some of the completed and planned investments are also
described in the section Completed and planned investments.
Pursuant to Commission Delegated Regulation (EU) 2020/1818, Article 12(1)(d) to (g), the Company
is excluded from the EU benchmarks.
The Company's business strategy is designed for the period 2024–2028 and includes the Company's
key development priorities. We began developing a sustainability strategy as early as 2023, taking
into account measures for climate change adaptation and mitigation. This strategy was closely linked
to financial planning from the very beginning, as key sustainability measures were incorporated into
the Company’s financial projections and investment plans.
When we formally adopted the Sustainability Strategy in 2024, it was approved by the Management
Board and the Supervisory Board. Nevertheless, the financial component of the strategy did not
undergo any significant changes, as the sustainability transition had already been incorporated into
the Company’s financial plans.
Sustainability represents one of the key pillars of the overall business strategy, ensuring a strong
link between the two documents. Consequently, the sustainability strategy does not function as a
separate set of activities, but rather comprehensively supports the Company's overall business
objectives, including long-term competitiveness, reduction of environmental impact, and cost
optimisation through sustainable solutions.
108
5.2.2.4.2 Company’s progress in implementing the transition plan
Although the Company does not yet have a formally established transition plan in accordance with
ESRS requirements, it is already implementing measures that form the foundation for the transition
to a low-carbon economy. Key activities carried out include:
• adoption of a sustainability strategy that includes emission reduction targets, measures, and
indicative investments;
• identification of Scope 1, 2, and 3 emissions and recalculation to ensure comparability with
the reporting year;
• initial energy and technological improvements that reduce the carbon footprint.
A comprehensive transition plan will be established by the end of 2027, with the measures
implemented in 2024 and 2025 counting as progress toward its phased implementation. Once
prepared, the formal transition plan will be submitted for approval to the Company's Management
Board, Supervisory Board, and Audit Committee.
5.2.2.4.3 Organisational measures for energy conservation and efficiency
In 2025, we continued our efforts to raise awareness about energy efficiency, including:
• employee motivation;
• providing information on energy usage characteristics to all employees;
• implementing and monitoring soft measures such as:
o proper lighting that takes natural light into account;
o turning off lights in rooms when they are not in use;
o turning off equipment and concentrating operations into shorter time periods;
o implementing proper temperature control and monitoring values;
o proper use of devices and work equipment;
o a rapid fault reporting system (air/water leaks, equipment servicing, etc.).
This is carried out by members of the energy team, who ensure that these measures are implemented
in their respective workplaces.
In April 2024, we installed an energy management system (EMS) at the Kemija Mozirje business
unit. This will enable additional savings at this location. The estimated annual savings (according to
EP data) are approximately 3% of electricity, heat, and drinking water consumption. This system
was upgraded in 2025 and will be completed by the end of March 2026. At the Company’s location
in Celje, a project to renew the central monitoring system is underway, which also includes the
implementation of energy management. The project is currently in progress.
By implementing organisational measures, total potential savings amount to approximately 1,249
MWh/year (data from EP 2021). CO
2
emissions are reduced by 144 tonnes due to electricity (emission
factor used for electricity: 0.278 t CO
2
/MWh) and by 149 tonnes due to natural gas (emission factor
used for natural gas: 0.205 t CO
2
/MWh), for a total of approximately 290 tonnes of CO
2
per year.
Quantitative data cannot be verified because they are not measured, but rather based on expert
estimates.
109
Table 36: Investment measures for the gradual implementation of the transition plan.
Strategic
objective
Type of measures and
key activities
Year
Type of
energy
source
Projected
energy
savings
(MWh)
GHG
emissions
(t CO
2
eq.)
Actual
2025
(MWh)
Actual
GHG
emissions
(t CO
2
eq.)
Note
Energy
efficiency
and
reducing the
carbon
footprint of
Scopes 1
and 2
Replacement of old
electric motors with
energy-efficient IE3
class motors.
2030
EE
2280
633
203
56
In 2025, 37
EMs were
replaced,
resulting in
savings of 203
MWh
Renovation of outdated
lighting – replacement
with LED lights.
2030
EE
864
240
108
30
In 2025, 360
light fixtures
were
replaced,
resulting in
savings of 108
MWh
Replacement of
condensate water
pumps
(Schnackenberg
models M273, M274,
M275). Optimisation of
technological
installations.
2025
EE
753
209
752
209
All pumps
were replaced
at the end of
2024. The
calculated
annual
savings
amount to 752
MWh
Modification of the
compressor station to
8.5 bar.
2024
EE
3,000
833
1,403
390
Completed on
26 Nov 2024;
savings
achieved in
2025 amount
to 1,403 MWh
Deploying
renewable
energy
sources and
reducing the
carbon
footprint of
Scope 2
Installation of solar
power plants
2024
EE
7,150
1,985
6,966
1,936
Solar power
plants were
built by 23 Jul
2024; in 2025,
they
generated
6,966 MWh of
electricity
The total capacity of the solar power plants installed to date is 7.093 MWp. Most of the energy
generated is used for our own needs. This energy significantly reduces our CO
2
emissions. The
projected annual production based on installed capacity is 7,507,500 MWh. However, the RES
measures projected an annual production of 7,150 MWh.
5.2.2.5 [E1-2] Policies related to climate change mitigation and
adaptation
Based on its double materiality assessment, the Company identified climate change as a material
sustainability issue and adopted the following policies:
• Policy on climate change mitigation
• Policy on the transition to a climate-neutral economy
• Policy on climate change adaptation
The policies establish a framework for managing significant impacts, risks, and opportunities related
to:
• greenhouse gas emissions (Scopes 1, 2, and 3),
• energy intensity of production,
• transition risks (regulation, energy prices, etc.),
• physical risks (droughts, floods, extreme weather events),
• opportunities for technological modernisation and low-carbon products.
These policies apply to all of the Company's activities and are integrated into the 2024–2028 business
strategy and the sustainability strategy up to 2030. The Management Board is responsible for their
110
implementation, securing resources, and monitoring the achievement of objectives. Mitigation and
adaptation policies are directly linked to the register of climate-related impacts, risks, and
opportunities and serve as the basis for their management and monitoring.
The company addresses climate change mitigation systematically through:
1. Targets
• Reduction of the total carbon footprint by 10% by 2030 compared to 2021;
• Reduction of specific electricity consumption by 12% and natural gas consumption by 19%;
• Preventing the emission of 10,400 t CO₂ eq. through energy efficiency measures;
• Gradually reducing emissions across all scopes (1, 2, and 3).
2. Key measures
• Optimisation of technological processes;
• Replacement of energy-inefficient equipment;
• Upgrade of the ISO 50001 system;
• Purchase of low-carbon electricity and certificates of origin;
• LCA analyses of key products;
• Collaboration with suppliers to reduce Scope 3 emissions.
3. Monitoring progress using KPIs
• carbon footprint (t CO₂ eq., annually),
• specific energy consumption (kWh/t of product, monthly),
• share of renewable sources (% annually).
The company addresses physical climate risks through a specific climate change adaptation policy.
1. Targets
• Reduction of dependence on the Hudinja watercourse through the use of an alternative
source by 2028.
• Reduction of process water consumption by 20% by 2028.
• Regular physical risk assessments and scenario analyses.
2. Measures
• Construction of a system for the reuse of wastewater from the Tremerje Wastewater
Treatment Plant.
• Monitoring of barrier stability (Bukovžlak, Za Travnik).
• Early warning system and business continuity plan.
• Cooperation with other professional institutions.
3. Progress is monitored as part of the annual management review.
Energy efficiency is a central pillar of mitigation policy:
• Systematic energy management in accordance with ISO 50001.
• Process optimisation,
• Energy-efficient electric motors, compressors, and lighting.
• Monthly monitoring of specific energy consumption.
The energy team serves as a technical body responsible for identifying and implementing measures.
The ISO 50001 standard is closely linked to all of the aforementioned policies, as it focuses on
systematic energy management, which has a direct impact on reducing greenhouse gas (GHG)
emissions, adapting to climate change, energy efficiency, and the use of renewable energy sources.
The Company is increasing the share of energy from renewable and low-carbon sources:
• increase in own energy production from renewable energy sources,
• a target of 19% renewable energy in total electricity consumption,
• purchase of carbon-free electricity,
111
• investments in decarbonisation totalling EUR 25 million by 2030.
The Finance Department ensures that investments are incorporated into the Company's financial
plans.
The climate policies are:
• approved by management,
• integrated into investment decision-making,
• subject to regular management reviews,
• included in annual sustainability reporting.
The policies were adopted in 2025 and are reviewed regularly (annually or at least every five years,
depending on the policy) and updated in response to changes in legislation or strategic priorities.
A policy on the integration of energy from renewable sources has not been established as a
standalone document, as the objectives, measures, and monitoring related to renewable energy are
fully incorporated into the Policy on climate change mitigation and the Policy on the transition to a
climate-neutral economy. Where relevant, the policies also apply to the Company's supply chain.
Climate policies are approved by the Management Board, while the Supervisory Board monitors their
implementation as part of its supervisory responsibilities and reviews progress toward achieving
decarbonisation targets and managing climate risks.
5.2.2.6 [E1-3] Actions and resources related to climate change policies
The measures stem from the Company's sustainability strategy and were determined based on an
analysis of emission sources and an assessment of the feasibility of technical, process, and
organisational improvements; they reflect the expected direction of the Company's future climate
policy. They include emission scope targets (1, 2), timelines, expected emission reductions, and the
corresponding necessary investments.
Table 37: Overview of measures and key activities to reduce CO
2
equivalent emissions
Strategic
objective
Type of measures and key
activities
Year/
Status
Type of energy source
Energy
savings
(MWh)
Reduction
in GHG
emissions
(t CO
2
eq.)
Investment
in EUR
Reducing the
carbon
footprint of
Scopes 1 and 2
Replacement of old electric
motors with energy-efficient
IE3 class motors
2030
In progress
EE
2,280
633
620,000
Preventing
10,400 tonnes
of CO
2
eq.
through energy
efficiency
measures
Replacement of two old
transformers at Substation
7–10 Neutralisation
Completed
in 2024
EE
53
15
102,132
Renovation of outdated
lighting – replacement with
LED fixtures
2030
In progress
EE
864
240
440,000
Replacement of
compressors with energy-
efficient models
2030
In progress
EE
2,650
736
1,985,000
Optimisation of the existing
steam pipeline – 2023
Completed
in 2023
ZP
9,486
1,942
162,742
Replacement of the heat
exchanger on acid IT2 –
2023
Completed
in 2023
no energy savings,
operational safety
/
/
137,539
Replacement of the old acid
fan with a frequency-
controlled fan
2030
EE
2,000
555
1,300,000
112
Replacement of condensate
water pumps
Schnackenberg (M273,
M274; M275) Optimisation
of technological installations
2025
Completed
EE
753
209
308,682
Replacement of main
pumps at the cooling tower
(water treatment)
(Optimisation of
technological installations)
2025
In progress
EE
297
82
180,000
Shutdown of equipment and
consolidation of operations
into shorter periods with the
same power
2030
EE
5,000
1,388
500,000
Optimisation of pre-drying
(replacement of natural gas
with steam)
Completed
in 2023
EG
5,500
1,126
507,563
Calciner – preheating of
secondary air (3–5% of total
gas consumption by 2028)
2028
EG
8,000
1,638
500,000
Energy efficiency –
extending the time between
acid maintenance
shutdowns from one year to
a year and a half
2030
EG
4,800
982
0
Modification of the 8.5 bar
compressor station
Completed
in 2024
EE
3,000
833
93,167
Increasing
renewable
energy
production to
19% of total
energy
consumption
and reducing
the carbon
footprint of
Scope 2
Installation of a solar power
plant on the Polymers and
Rolling plant building
Completed
in 2022
EE
1,650
458
957,448
Installation of solar power
plants in: KC, Kemija
Mozirje, Grafika, Cafeteria,
Hall A
Completed
in 2023
EE
2,100
583
1,822,061
Installation of solar power
plants: part of Marketing,
Transportation,
Multipurpose, Energy, and
Maintenance (Hall B)
Completed
in 2024
EE
2,100
583
1,220,134
Marketing building roof
Completed
in 2024
EE
1,300
361
786,643
Installation of an electricity
battery storage unit
2030
In progress
no energy savings,
financial savings
/
/
3,900,000
Procurement of carbon-free
and low-carbon electricity
(market-based method)
2030
In progress
77,000
84,300
115,000
Installation of a steam
turbine for electricity
generation
2026
In progress
EE
17,000
4,719
9,500,000
Reducing the
Scope 3 carbon
footprint in the
value chain
Support for suppliers in
transitioning to lower carbon
footprint technologies
2030
45,000
0
Freight transport by sea with
a lower carbon footprint
2030
4,800
0
Freight transport by road
using vehicles powered by
renewable energy sources
2030
2,200
0
Total
25,138,111
As part of its assessment of physical climate risks, the Company identified an increased likelihood of
extreme rainfall due to climate change, which could lead to intense surface runoff, embankment
erosion, and an increased risk of destabilisation or failure of the barriers at the Za Travnik waste
disposal facility.
At present, adaptation measures are primarily focused on engineering and technological solutions
due to the nature of the production process and the industrial location.
113
In 2025, the Company did not adopt any new key measures in the area of climate change. The
implementation of measures defined within the framework of the sustainability strategy and
identified measures up to 2030 continued, focusing on improving energy efficiency, increasing the
share of renewable energy sources, and gradually reducing the emission intensity of production.
The measures and their status are shown in Table 36 and primarily relate to in-house production and
the lower end of the value chain. The measures are included in the 2024–2028 investment cycle,
and no significant deviations were identified in 2025 that would require the adoption of additional
corrective measures.
Table 38: Planned measures and key activities to reduce CO
2
-equivalent emissions by 2025
Strategic
objective
Type of measures
and key activities
Year
Type of
energy
source
Estimated
energy
savings
(MWh)
GHG
emissions
(t CO
2
eq.)
Actual
2025
(MWh)
Actual
GHG
emissions
(t CO
2
eq.)
Note/
Status
Energy
efficiency
and
reducing
the carbon
footprint
of Scopes
1 and 2
Replacement of
old electric motors
with energy-
efficient IE3-class
motors
2030
EE
2,280
633
203
56
In 2025, 37 EMs
were replaced,
resulting in
annual savings
of 203 MWh
Renovation of
outdated lighting –
replacement with
LED fixtures
2030
EE
864
240
108
30
In 2025, 360
light fixtures
were replaced,
resulting in
annual savings
of 108 MWh
Replacement of
Schnackenberg
condensate water
pumps (M273,
M274, M275)
Optimisation of
process equipment
2025
EE
753
209
752
209
All pumps were
replaced at the
end of 2024.
The calculated
annual savings
amount to 752
MWh.
Replacement of
main pumps on the
cooling tower
(water treatment)
(Optimisation of
process
equipment)
2025
EE
297
82
/
/
In progress.
We will implement measures to reduce emissions using our own staff and our own financial resources.
Investments in fixed assets are recognised in the balance sheet as at 31 December 2025 under the
item “Tangible fixed assets”. The impact on OPEX through accrued depreciation is recognised in the
income statement for 2025 as at the date the assets are ready for use. All other impacts on future
periods are reflected in the projected financial statements for the 2024–2028 period, in accordance
with the Company’s five-year strategy for 2024–2028.
Assets acquired by 2024 and in 2025 have been put into use and are not under construction as at
31 December 2025.
Investments in fixed assets intended for the implementation of measures to reduce greenhouse gas
emissions are recognised in the balance sheet as at 31 December 2025 under the item “Tangible
fixed assets (i)”.
This impact on the 2025 operating result is reflected in the depreciation charged on assets that
became available for use in that year.
Reference to the requirements of Delegated Regulation (EU) 2021/2178 (ii, iii):
• The amounts of these investments were also included in the CAPEX taxonomy disclosure as
partially taxonomy-compliant measures, primarily in the areas of energy efficiency and the
transition to renewable energy sources.
114
• The estimated share of taxonomically compliant CAPEX in 2025, for example, amounted to
1.34% of all investments in fixed assets.
• The measures and investments are aligned with the internal investment plan, which is an
integral part of the 2024–2028 five-year strategy, and with the previously conducted
decarbonisation needs analysis.
Assets acquired up to and including 2025 were put to use by 31 December 2025 and are therefore
no longer reported as construction in progress. The impact of remaining (planned) investments on
OPEX will be reflected in future years in accordance with the depreciation schedule and the
anticipated start of operations for individual facilities.
Investments in fixed and current assets related to measures to reduce GHG emissions are included
in the balance sheet as at 31 December 2025 and also in the five-year strategic investment plan,
which monitors the implementation of the adopted sustainability strategy.
Part of these investments was also assessed in accordance with the requirements of Delegated
Regulation (EU) 2021/2178 regarding taxonomy compliance reporting. As part of its CAPEX, the
Company defined the following investment performance indicators that are taxonomy-compliant:
• electric vehicle transportation 1.34%.
The data is based on the classification of activities under Regulation 2020/852 and analyses of the
compliance of individual investments with the relevant technical criteria and minimum protective
measures.
The taxonomic CAPEX for 2025 is included in the disclosures of this report in section 5.2
Environmental information.
As part of the implementation of adopted and planned decarbonisation measures, the Company
developed a strategic plan for investments in fixed assets, which includes investments with defined
timelines and scopes for the 2024–2028 period. The investments are in the following areas:
• energy efficiency,
• energy production from renewable sources,
• replacement of equipment with lower emissions.
Some of these investments were assessed as compliant with the taxonomy, while others were
assessed as potentially compliant with the requirements of Delegated Regulation (EU) 2021/2139.
The total value of investments in fixed assets related to decarbonisation for the 2024–2028 period
amounts to EUR 25,138,111, of which EUR 2,202,076 is already included in the 2024 annual budget
and EUR 343,523 in the 2025 annual budget. A portion of these funds is specified in the CAPEX
taxonomy report in Table 26.j. The planned investments directly support the implementation of
decarbonisation measures and contribute to achieving the GHG emission reduction targets set out in
the Company’s sustainability strategy up to 2030.
5.2.2.7 [E1-4] Climate change mitigation and adaptation objectives
To achieve the overarching commitment, we set targets in the strategy for the short term (2025),
the medium term (a 3-year period from 1 January 2026 to 31 December 2028) and the long-term
period (from 1 January 2029 to 31 December 2030).
The Company involved key stakeholders in the double materiality assessment and in the processes
for identifying IROs, which contributed to an understanding of expectations regarding
decarbonisation and the transition to a low-carbon economy. Stakeholders were not directly involved
115
in setting specific numerical climate targets (e.g., selecting target emission reduction percentages).
Target values were set based on internal expert judgment, taking into account the results of the
IROs, available technological options, energy and infrastructure constraints, and the regulatory
framework. Stakeholder involvement thus took place indirectly (through the IROs and the strategy),
rather than as a direct input into the setting of target values.
The Company's overarching commitment is to strive to become a carbon-neutral company by 2050.
The Company's objectives, which apply to all of its operations and encompass all operational sites
under the Company's operational control, are formulated based on available information, expertise,
and experience, and take into account current trends and best practices in the field of sustainability.
We recognise that methodologies and scientific findings in this field are constantly evolving, so we
will regularly review and update our objectives in line with new insights and available data.
The climate change mitigation objectives for 2030 are presented in Table 39.
Table 39: Overview of strategic climate change mitigation objectives by 2030.
Climate change mitigation – strategic objective 1
Reduce the total carbon footprint by 10% using the location-based
method
Climate change mitigation – strategic objective 2
Increase the share of renewable electricity generation to 19% of total
electricity consumption
Climate change mitigation – strategic objective 3
Prevent 10,400 tonnes of CO2 eq. through energy efficiency measures
Climate change mitigation – strategic objective 4
Reduce specific electricity consumption by 12%
Climate change mitigation – strategic objective 5
Reduce specific natural gas consumption by 19%
Climate change mitigation – strategic objective 6
Reduce transport-related emissions by 36%
In achieving our goals, we took into account the increase in production growth across our entire
product portfolio. For our key product, titanium dioxide (TiO2), this represented a 14% increase in
total TiO2 sales.
Table 40: Overview of emission reductions using the location-based method by 2030.
Scope (location-based
method)
Emissions in t CO
2
eq. in 2021
Change percentage
Emissions in t CO
2
eq. in 2030
Scope 1
78,763
+7 %
84,497
Scope 2
28,015
- 25 %
20,976
Scope 3
197,096
- 15 %
167,499
Total
303,874
- 10 %
272,972
Table 41: Overview of emissions reductions using the market-based method by 2030.
Scope (market-based method)
Emissions in t CO
2
eq. in 2021
Change percentage
Emissions in t CO
2
eq. in 2030
Scope 1
78,763
+ 7 %
84,497
Scope 2
57,059
- 100 %
0
Scope 3
197,096
- 15 %
167,499
Total
332,918
-24 %
251,996
The projection of emissions up to 2030, taking into account planned production growth and without
the implementation of energy efficiency measures, would amount to approximately 89,497 t CO₂ eq.
By implementing energy efficiency measures, the Company would reduce emissions by
approximately 5,000 t CO₂ eq. compared to the no-action scenario, thereby limiting the growth of
absolute emissions to 84,497 t CO₂ eq. The target for Scope 1 is thus defined as a reduction in
emissions relative to the no-action projection, while simultaneously managing the growth in
emissions due to production expansion.
116
The carbon footprint for Scope 2 will be 25% lower than in 2021 according to the location-based
method and 100% lower according to the market-based method:
• reduced by 15% due to the deployment of renewable energy sources,
• reduced by 10% due to efficient use of electricity,
• reduced by 75% due to the purchase of carbon-free and low-carbon electricity, according to
the market-based method.
The carbon footprint of Scope 3 will be 15% lower than in 2021:
• due to a 13% reduction in emissions from Category 1 – procurement of materials and
services,
• due to a 2% reduction in emissions from Categories 4 and 9 – transportation and logistics.
To adapt to climate change, we set two strategic objectives:
• a significant reduction in water abstraction from the Hudinja stream through the use of
wastewater from the Tremerje WWTP after 2028,
• a 20% reduction in process water consumption by 2028, thereby adapting to droughts.
Through the project to fill the Za Travnik waste disposal facility by 2030, we will adapt to heavy
rainfall that could cause landslides and flooding in the gypsum disposal area.
5.2.2.7.1 The link between climate objectives and the management of identified
risks
The Company's climate objectives represent a key mechanism for managing physical and transition
risks.
1. Transition risk – political and legal decisions related to CO₂ emissions (EU ETS, regulations)
The targets for reducing Scope 1 and 2 emissions and increasing the share of renewable energy
sources directly reduce the Company's exposure to the risk of higher emission allowance prices and
stricter regulations. Reducing specific electricity and natural gas consumption lowers cost sensitivity
to changes in legislation and carbon prices and limits the growth of residual risk.
2. Transition risk – customer demands regarding carbon neutrality (the Novartis example)
The Scope 3 emission reduction targets and supply chain activities (reducing emissions from
procurement and transportation) serve as a mechanism for maintaining competitiveness and market
access. In this way, the Company reduces the risk of losing customers due to failure to meet
environmental criteria.
3. Physical risk – limited water supply during periods of drought
The objectives of reducing process water consumption and increasing internal recycling directly
reduce exposure to the risk of reduced production capacity due to drought. These objectives serve
as an adaptation mechanism for short-term physical risks.
4. Physical risk – heavy rainfall, landslides, and dam stability
The climate change adaptation objectives (reducing water abstraction, filling in the Za Travnik area,
and investing in the stability of barriers) represent a long-term measure to reduce the residual
physical risk associated with extreme weather events.
117
Table 42: Total GHG emissions broken down by Scope 1 and Scope 2 and material Scope 3.
10
It was not the subject of any negative assurance.
GHG emissions
Base year
2021
10
2024
2025
2028
2030
Annual target in % / base year
Calculatio
n in 2024
Correction
for 2025
Calculatio
n in 2024
Correctio
n for 2025
Calculatio
n in 2024
Correction for 2025
Scope 1 GHG emissions
Scope 1
Gross Scope 1 GHG emissions (t CO
2
eq.)
78,763
74,180
76,209
80,996
83,219
84,497
84,497
+0,8
+0.8
Scope 1
Share of Scope 1 GHG emissions from regulated
emissions trading schemes (%)
/
/
/
/
/
/
/
/
0
Scope 2 GHG emissions
Scope 2
Gross location-based Scope 2 GHG emissions (t CO
2
eq.)
28,015
24,297
25,561
23,656
22,527
20,976
20,976
/
-2.8
Scope 2
Gross market-based Scope 2 GHG emissions (t CO
2
eq.)*
57,059
45,023
26,037
/
26,000
/
0
/
-11.1
Materiality of Scope 3 GHG emissions
Scope 3
Total gross indirect GHG emissions (t CO
2
eq.)
197,096
181,664
174,972
193,153
173,646
194,731
167,499
-0.1
-1.7
Scope 3.1
Purchased goods and services
155,125
141,857
131,417
152,022
136,670
153,264
131,950
-0.1
-1.7
Scope 3.2
Purchase/installation of fixed assets
2,609
2,735
3,989
2,557
2,298
2,578
2,209
-0.1
-1.7
Scope 3.3
Activities related to energy sources
9,522
9,103
8,084
9,332
8,389
9,408
8,066
-0.1
-1.7
Scope 3.4
Transport and distribution of purchased
products/materials
19,589
15,291
20,057
19,197
17,258
19,354
16,592
-0.1
-1.7
Scope 3.5
Waste management
169
79
231
165
149
167
143
-0.1
-1.7
Scope 3.6
Business travel
30
91
88
30
26
30
25
-0.1
-1.7
Scope 3.7
Transportation of employees to and from work
1,263
720
957
1,237
1,112
1,247
1,069
-0.1
-1.7
Scope 3.9
Transportation for product shipment
1,589
2,272
1,981
1,557
1,400
1,570
1,346
-0.1
-1.7
Scope 3.10
Further processing of products/services
7,174
9,485
8,141
7,030
6,320
7,088
6,076
-0.1
-1.7
Scope 3.12
End-of-life product management
27
31
27
26
24
26
23
-0.4
-1.7
Emissions intensity for Scope 1 emissions in t CO₂e/t of product
1.2
1.2
1.2
1.1
1.2
1.2
1.2
0
0
Emissions intensity for Scope 2 emissions (location-based) in t CO₂e/t of
product
0.4
0.4
0.4
0.3
0.3
0.3
0.3
-2.8
-2.8
Emissions intensity for Scope 2 emissions (market-based) in t CO₂e/t of
product
0.9
0.7
0.4
/
0.4
/
0
/
-100
Emission intensity for Scope 3 emissions in t CO₂e/t of product
3.1
2.9
2.8
2.7
2.4
2.7
2.3
-1.4
-2.8
Total emission intensity in t CO₂e/t of product
4.8
4.6
4.4
4.2
3.9
4.1
3.7
-1.7
-2.5
118
The Company established gross greenhouse gas (GHG) emission reduction targets, without including
GHG removals, carbon credits, or avoided emissions as means to achieve these targets.
The 2030 emissions reduction target is defined as an absolute target at the level of the Company's
total emissions (Scopes 1, 2, and 3 combined). For Scope 1, the target does not represent an
absolute reduction in emissions, but rather a cap on emissions growth despite the planned increase
in production. The 7% increase in Scope 1 emissions by 2030 is a result of the expansion of
production capacity, with the Company using energy efficiency measures to limit emissions growth
compared to a scenario without such measures.
The reduction in Scope 2 and 3 emissions represents an absolute reduction relative to the baseline
year of 2021. The targets apply to emissions from Scopes 1, 2, and 3. The types of GHGs covered
include CO₂, N₂O, and CH₄, which is consistent with the GHG reporting boundaries defined in
accordance with disclosure [E1-6].
The Company uses intensity indicators as a tool to track progress, particularly in light of expected
production growth. In 2021, the emissions intensity was 4.8 t CO₂e/t of product. In 2025, it will be
4.4 t CO₂e/t of product, representing a change of –8.3% compared to the baseline.
5.2.2.7.2 Changes to objectives, indicators and methodology during the period
During the 2025 reporting period, the Company did not change the climate objectives adopted as
part of its sustainability strategy, did not change the scope of the objectives, reporting boundaries,
or the categories of greenhouse gas emissions covered, and did not change the indicators (KPIs)
used to monitor progress toward achieving the targets, did not recalculate the 2021 baseline year,
and did not introduce any significant changes to data processes or internal controls related to target
monitoring. The methodological update and recalculation of baseline values, carried out in 2024 due
to the replacement of the tool and database for calculating GHG emissions, remain in effect and are
applied consistently in 2025, without further changes.
5.2.2.7.3 Progress toward achieving the objectives
The Company monitors progress toward its climate objectives annually based on calculations of GHG
emissions and energy indicators. This monitoring is based on the same methodology as that used for
the baseline year of 2021.
Objective: 10% reduction in total emissions by 2030 (location-based method)
In 2025, total emissions amount to 276,742 t CO₂ eq., representing an 8.9% change compared to
2021. The current trend is consistent with the planned trajectory up to 2030.
Objective: 19% RES
The share of RES in 2025 stands at 5.1%, representing an increase of 2.2 percentage points
compared to the baseline. The rate of RES deployment is in line with the plan.
Objective: 12% reduction in specific electricity consumption
Specific electricity consumption increased by 2.8% by 2025 compared to 2021. The trend is
inconsistent. The increase is due to maintenance work carried out in the autumn of 2025, which
worsened specific consumption; no additional measures are necessary.
Objective: Prevent 10,400 tonnes of CO₂ eq. through energy efficiency measures.
Thanks to URE, we have prevented 1,183 tonnes of CO₂ eq. by 2025. Achieving this objective is
currently realistic.
119
Objective: 19% reduction in specific natural gas consumption
Specific natural gas consumption increased by 0.2% in 2025. The main reason for the increase in
specific consumption was the overhaul carried out in the autumn of 2025, which worsened specific
consumption.
Objective: 36% reduction in transportation emissions
Emissions from transportation had decreased by 86% by 2025 compared to the baseline.
The Company estimates that the 2030 objectives are achievable with additional measures, taking
into account the planned growth in production.
The Company ensures that its objectives are consistent with the reporting thresholds by:
• including all of its controlled emissions in the carbon footprint calculation,
• setting reduction targets for each emissions scope based on measures,
• for Scopes 1 and 2, using energy consumption and applying appropriate emission factors,
and for Scope 3 emissions, involving its suppliers to achieve the targets,
• introducing appropriate digital tools to monitor energy consumption,
• ensuring compliance with regulatory requirements.
As mentioned, the Company uses 2021 as the baseline year for its climate objectives and emissions
reporting. Emissions data and progress prior to 2021 are not disclosed because they were not
collected in sufficient scope and quality to enable comparable and ESRS-compliant reporting. All
comparisons and progress tracking are based on the baseline year 2021.
2021 was the first year for which the Company has the necessary data. It was an average year in
terms of production, and at the same time, an extended autumn overhaul was carried out that year;
therefore, we cannot say that it was a year in which the carbon footprint was above average. The
year 2022 is not suitable as a baseline year, as it was a record year in terms of sales and one of the
highest production capacities. The carbon footprint would be exceptionally high in that year, and it
would be relatively easy to demonstrate a reduction in the carbon footprint in subsequent years. The
year 2023 is also not suitable, as it was one of the worst years in terms of titanium dioxide production.
From May onward, we operated at only half capacity due to market conditions, and a major overhaul
was also carried out in the autumn. The carbon footprint would be extremely low and would not
reflect the actual situation. The year chosen is also appropriate from the perspective of environmental
impacts. Emissions into the environment are the most realistic given the production capacities for
that year (specific emissions).
The Company adopted a policy on revising the base year, which defines the conditions and materiality
threshold for any recalculation of emissions for the base year 2021.
A recalculation is performed in the following cases:
• significant structural changes (acquisitions, divestitures, mergers),
• methodological changes (e.g., updates to emission factors or methodology),
• discovery of significant errors in the data.
o The following are considered significant changes:
o a change in Scope 1 and 2 emissions exceeding 10%,
o a change in Scope 3 emissions exceeding 20%.
If a base year adjustment is triggered, the Company recalculates the base year and adjusts historical
data and target values accordingly. During the 2025 reporting period, there were no events that
would require a base year adjustment.
120
The Company's objectives are not scientifically based and are not compatible with limiting global
warming to 1.5 °C in accordance with the Paris Agreement. In setting its targets, the Company took
into account production growth up to 2030 and the volume of production:
• 73,000 tonnes of titanium dioxide pigment, an increase of 14%, including 20 tonnes of
ultrafine titanium dioxide,
• 215,000 tonnes of sulphuric acid production, an increase of 23%,
• 210,000 tonnes of white gypsum (CEGIPS), an increase of 25%,
• 2,500 tonnes of powder coatings, an increase of 85%,
• 11,000 tonnes of masterbatches, an increase of 110%,
• 2,350 tonnes of copper products, an increase of 55%,
• an 85% increase in production at BU Polimeri.
In the future, the Company will examine the possibility of scientifically validating its objectives, taking
into account technological constraints and its business model.
All of the decarbonisation levers listed below were identified and quantified as part of the Company's
sustainability strategy, where they are linked to the targets for reducing GHG emissions by 2030.
Their implementation is scheduled in accordance with the Company's investment plan and represents
key pillars for achieving the planned reduction in Scope 1 and 2 gross emissions.
• Efficient use of natural gas, 5,688 t CO
2
eq.
• Efficient use of electricity, 4,691 t CO
2
eq.
• Installation of a steam turbine for electricity generation, 4,719 t CO
2
eq.
• Purchase of carbon-free and low-carbon electricity (market-based method), 84,300 t CO
2
eq.
• Electricity generation from solar power plants, 1,985 t CO
2
eq.
• Assistance to suppliers in transitioning to technologies with a lower carbon footprint, 45,000
t CO
2
eq.
• Freight transport with a lower carbon footprint, 7,000 t CO
2
eq.
The quantitative contributions of individual decarbonisation levers were estimated based on emission
factors that were also used in the calculation of the Company's carbon footprint, ensuring
methodological consistency. To assess the impact of each measure, we used data on the expected
savings in energy, fuel, or other emission sources and multiplied them by the corresponding emission
factor (in t CO₂ eq.).
The calculations are based on the base year 2021 and reflect the difference between the "no action"
scenario and the projected implementation of the measure. For Scope 2 emissions, we used a
market-based approach in accordance with the standards of the GHG Protocol and the ESRS.
In identifying decarbonisation levers, the Company used the results of an analysis of several climate
scenarios, including the SPP1–1.9 scenario, which is compatible with limiting global warming to
1.5 °C, the SSP1-2.6 scenario, and the SSP5–8.5 scenario, which represents an unfavourable
trajectory with very high greenhouse gas emissions and pronounced and more frequent physical
impacts of climate change.
Based on these scenarios, key trends and events that could affect the Company's business
environment were identified:
• Environmental: higher prices for emission allowances, pressure to reduce CO₂ emissions in
production;
• Social: increased expectations from employees and local communities regarding sustainable
practices;
• Technological: the need to switch energy sources, the introduction of carbon capture
technologies;
121
• Market-related: growing demand for low-carbon products and loss of competitiveness in
carbon-intensive sectors;
• Political: EU regulations and pressure from financial institutions.
These trends formed the basis for identifying the Company’s key decarbonisation levers, including:
• a gradual transition to renewable energy sources,
• reducing energy consumption and increasing the efficiency of existing systems,
• improving the environmental profile of existing products based on LCA (life cycle assessment)
results.
Table 43: Links between events, trends, and decarbonisation levers
Events
Trends
Decarbonisation levers
Environmental
Tighter emissions regulations (ETS), higher
CO₂ prices
Energy efficiency, reduction of fossil fuel use
Social
Increased expectations regarding
sustainability from employees, local
communities, and customers
Employee awareness, improving the transparency
of ESG communication, incorporating sustainability
criteria into decision-making
Technological
Demand for low-carbon technologies, lack of
technologies to reduce process emissions
Monitoring new technologies, pilot tests, long-
term investments
Marketing
Demand for sustainable products, higher
costs for carbon-intensive products
Optimisation of production phases with high
emission intensity, based on the results of LCA
analyses
Political/regulative
EU regulations, ESG expectations of financial
institutions
Transition to renewable energy sources,
improving the ESG profile to access financing
5.2.2.8 [E1-5] Energy consumption and mix
Table 44: Energy consumption by energy source in 2021, 2024 and 2025
Energy source
Unit
2021
11
2024
2025
(1) Consumption of fuel from coal and coal-derived products
MWh
0
0
0
(2) Consumption of fuel from crude oil and oil products
MWh
1,531.1
1,447.8
1,379.0
(3) Consumption of fuel from natural gas
MWh
127,222.3
114,170.0
123,687.7
(4) Consumption of energy from other fossil fuel sources
MWh
0
0
0
(5) Consumption of purchased or procured electricity, heat,
steam and cooling from fossil fuel sources
MWh
75,319.3
45,945.8
45,632.1
(6) Total fossil fuel energy consumption (sum of lines 1 to 5)
MWh
204,072.7
161,563.6
170,698.8
Share of fossil fuels in total energy consumption
%
49.6
41.0
43.7
(7) Consumption from nuclear sources
MWh
13,875.1
33,788.6
33,557.9
Share of consumption from nuclear sources in total energy
consumption
%
3.4
8.6
8.6
(8) Consumption of fuel from renewable sources, including
biomass (including industrial and municipal waste of biological
origin, biogas, hydrogen from renewable sources, etc.)
MWh
450.3
539.9
600.3
(9) Consumption of purchased or self-generated electricity, heat,
steam, and cooling from renewable sources
MWh
11,715.7
12,786.3
12,699.1
(10) Consumption of self-generated energy from non-fuel
renewable sources
MWh
181,619.2
185,358.4
173,257.5
(11) Total energy consumption from renewable sources
(sum of lines 8 to 10)
MWh
193,785.2
198,684.6
186,556.9
Share of renewable sources in total energy consumption
%
47.0
50.4
47.7
Total energy consumption (sum of lines 6, 7, and 11)
MWh
411,733.0
394,036.8
390,813.6
11
It was not the subject of any negative assurance.
122
Energy consumption by energy source for 2021, 2024, and 2025 is calculated based on data from
invoices for purchased energy and on data from meters entered into the information system. Table
44 lists the shares of electricity generated by category, based on data regarding the composition of
primary sources for electricity generation provided by the electricity supplier. Since the composition
of primary sources for electricity generation for 2025 will not be published until June 2026, we used
data on the composition of primary sources for 2024 to determine the distribution of electricity
consumption in 2025. Upon receipt of the data for 2025, we will adjust the values accordingly and
publish them in the Company's annual report for 2026. The Company does not use coal or coal-
derived products as fuel. We also have no energy consumption from other fossil sources that would
fall under 'Energy consumption from other fossil sources'. Consumption of ELKO, gasoline, diesel
fuel, and propane gas is included under 'Fuel consumption from crude oil and petroleum products'.
The energy data was not independently audited or verified by an external body. In the future, we
will explore the possibility of independent verification to improve the reliability of our reporting.
During the reporting period, the Company did not generate energy from non-renewable sources; all
of its own energy production comes exclusively from renewable sources.
Table 45: Electricity generation from own sources
Electricity generation from own sources
2021
12
2024
2025
MWh
0
4,423.6
6,966.1
The Company does not generate its own energy from non-renewable sources.
Energy intensity (see Table 46) is expressed in MWh/EUR and calculated as the ratio of total energy
consumption (numerator) to net revenue (denominator).
The data on the Company's net revenue is as follows:
• 2021: EUR 192,462,100,
• 2024: EUR 200,285,413,
• 2025: EUR 198,801,281.
Total energy consumption:
• 2021: 411,733.0 MWh,
• 2024: 394,036.8 MWh,
• 2025: 390,813.6 MWh.
Table 46: Energy intensity of Cinkarna Celje d.d. for 2021, 2024 and 2025
Indicator
2021
13
2024
2025
Energy intensity of the Company in MWh/EUR
0.002139
0.001967
0.001965
Formula: EIC = Total energy consumption from operations (MWh) / Net revenue (EUR) [E1-5 41]
High-impact climate sectors are industries that contribute significantly to GHG emissions and
environmental impact, while also playing a key role in the transition to a low-carbon economy. In
accordance with the EU NACE classification of economic activities, the Company is classified under C
20 – Manufacture of chemicals and chemical products, specifically under 20.12 – Manufacture of dyes
and pigments. Based on Delegated Regulation (EU) 2022/1288, which supplements the EU Low
Carbon Benchmark Regulation (EU BMR), the chemical and pigment manufacturing sector is classified
as a high-carbon industry. The entire operations of the Company thus fall within a sector with a high
climate impact, which requires systematic measures to reduce GHG emissions and transition to
sustainable production processes.
12
It was not the subject of any negative assurance.
13
It was not the subject of any negative assurance.
123
Revenue for 2025 corresponds to the income statement item 'Revenue from contracts with
customers', which amounts to EUR 198,801,281 (in 2024, it amounted to EUR 200,285,413).
5.2.2.9 [E1-6] Gross Scopes 1, 2, 3 and total GHG emissions
For 2021, we calculated the Company's carbon footprint in accordance with the GHG Protocol for
Scopes 1, 2, and 3. The Company's carbon footprint report serves as a basis for making important
business decisions going forward.
The Company's carbon footprint was calculated by external contractors based on the guidelines,
recommendations, and principles defined in the standard for calculating the carbon footprint at the
organisational level, EN ISO 14064-1:2019, and the TGP Protocol. The reference year for the data
collected and used in the carbon footprint calculation is 2021.
In 2025, the Company allocated EUR 343,523 to carbon neutrality initiatives, representing 1.8% of
the Company's total investments in 2025.
Table 47: CO
2
-equivalent emissions—Scopes 1, 2, and 3, calculated using the location-based and market-based methods, 2021
14
Scope
CO
2
-equivalent emissions in 2021 using the
location-based method
CO
2
-equivalent emissions in 2021 using the
market-based method
Scope 1
78,763
78,763
Scope 2
28,015
57,059
Scope 3
197,096
197,096
Total
303,874
332,918
Table 48: CO
2
-equivalent emissions—Scopes 1, 2, and 3, calculated using the location-based and market-based methods, 2024
Scope
CO
2
-equivalent emissions in 2024 using the
location-based method
CO
2
-equivalent emissions in 2024 using the market-
based method
Scope 1
74,180
74,180
Scope 2
24,297
45,023
Scope 3
181,664
181,664
Total
280,141
300,867
Table 49: CO
2
-equivalent emissions—Scopes 1, 2, and 3, calculated using the location-based and market-based methods, 2025
Scope
CO
2
-equivalent emissions in 2025 using the
location-based method
CO
2
-equivalent emissions in 2025 using the
market-based method
Scope 1
76,209
76,209
Scope 2
25,561
26,037
Scope 3
174,972
174,972
Total
276,741
277,218
14
It was not the subject of any negative assurance.
124
Table 50: Scope 3 categories for the base year 2021
15
Scope 3 categories
Emissions [t CO₂e]
%
Cat 1 - Purchase of materials and services
155,125
78.58
Cat 2 - Purchase/installation of fixed assets
2,609
1.32
Cat 3 - Activities related to energy sources
9,522
4.99
Cat 4 - Transportation and distribution of purchased
products/materials
19,589
9.92
Cat 5 - Waste management
169
0.09
Cat 6 - Business travel
30
0.02
Cat 7 - Transportation of employees to and from work
1,263
0.64
Cat 8 - Leasing of assets in the supply chain
not relevant
not relevant
Cat 9 - Transportation during product shipment
1,589
0.80
Cat 10 - Further processing of products/services
7,174
3.63
Cat 11 - Use of products/services during their life cycle
not relevant
not relevant
Cat 12 - End-of-life management of products
27
0.01
Cat 13 - Leasing of assets in the sales and distribution chain
not relevant
not relevant
Cat 14 - Franchises
not relevant
not relevant
Cat 15 - Investments
not relevant
not relevant
Total
197,096
100
Table 51: Scope 3 categories for 2024
Scope 3 categories
Emissions [t CO₂e]
%
Cat 1 - Purchase of materials and services
141,857
78
Cat 2 - Purchase/installation of fixed assets
2,735
1.51
Cat 3 - Activities related to energy sources
9,103
5
Cat 4 - Transportation and distribution of purchased
products/materials
15,291
8
Cat 5 - Waste management
79
0.04
Cat 6 - Business travel
91
0.05
Cat 7 - Transportation of employees to and from work
720
0.39
Cat 8 - Leasing of assets in the supply chain
not relevant
not relevant
Cat 9 - Transportation during product shipment
2,272
1
Cat 10 - Further processing of products/services
9,485
5
Cat 11 - Use of products/services during their life cycle
not relevant
not relevant
Cat 12 - End-of-life management of products
31
0.02
Cat 13 - Leasing of assets in the sales and distribution chain
not relevant
not relevant
Cat 14 - Franchises
not relevant
not relevant
Cat 15 - Investments
not relevant
not relevant
Total
181,664
100
15
It was not the subject of any negative assurance.
125
Table 52: Scope 3 categories for 2025
Scope 3 categories
Emissions [t CO₂e]
%
Cat 1 - Purchase of materials and services
131,417
75.1
Cat 2 - Purchase/installation of fixed assets
3,989
2.3
Cat 3 - Activities related to energy sources
8,084
4.6
Cat 4 - Transportation and distribution of purchased
products/materials
20,057
11.5
Cat 5 - Waste management
231
0.1
Cat 6 - Business travel
88
0.1
Cat 7 - Transportation of employees to and from work
957
0.5
Cat 8 - Leasing of assets in the supply chain
not relevant
not relevant
Cat 9 - Transportation during product shipment
1,981
1.1
Cat 10 - Further processing of products/services
8,141
4.7
Cat 11 - Use of products/services during their life cycle
not relevant
not relevant
Cat 12 - End-of-life management of products
27
0.01
Cat 13 - Leasing of assets in the sales and distribution chain
not relevant
not relevant
Cat 14 - Franchises
not relevant
not relevant
Cat 15 - Investments
not relevant
not relevant
Total
174,972
100
Table 53: Sources of emission factors
Scope
2021
16
2025
Scope 1
Sphera MLC Database,
DEFRA Database
Sphera MLC Database - 2025.2 - Sphera
Calculation;
DEFRA - 2025
Scope 2
Sphera MLC Database (lokacijska metoda); AIB
Residual Mixes (tržna metoda)
Sphera MLC Database - 2025.2 - Sphera
Calculation;
AIB residual mix 2024
Scope 3 Cat 1 - Purchase of materials
and services
Sphera MLC Database;
SupplyChainGHGEmissionFactors_v1.3 by
NAICS-6
Sphera MLC Database - 2025.2;
SupplyChainGHGEmissionFactors_v1.4 by
NAICS-6;
Supplier specific emission factor for ilmenit
Scope 3 Cat 2 - Purchase/installation of
fixed assets
SupplyChainGHGEmissionFactors_v1.3 by
NAICS-6
SupplyChainGHGEmissionFactors_v1.4 by
NAICS-6
Scope 3 Cat 3 - Activities related to
energy
Sphera MLC Database, DEFRA - GHG reporting:
conversion factors 2021
Sphera MLC Database - 2025.2 - Sphera
Calculation;
DEFRA - GHG reporting: conversion factors
2025
Scope 3 Cat 4 - Transportation and
distribution of purchased
products/materials
Sphera MLC Database;
SupplyChainGHGEmissionFactors_v1.3 by
NAICS-6
Sphera MLC Database - 2025.2Sphera;
SupplyChainGHGEmissionFactors_v1.4 by
NAICS-6
Scope 3 Cat 5 - Waste management
Sphera MLC Database
Sphera MLC Database - 2025.2
Scope 3 Cat 6 - Business travel
DEFRA - GHG reporting: conversion factors 2021
https://www.hotelfootprints.org/
DEFRA - GHG reporting: conversion factors
2025
Scope 3 Cat 7 - Transportation of
employees to and from work
DEFRA - GHG reporting: conversion factors 2021
DEFRA - GHG reporting: conversion factors
2025
Scope 3 Cat 9 - Transportation during
product shipment
Sphera MLC Database
Sphera MLC Database - 2025.2
Scope 3 Cat 10 - Further processing of
products/services
Sphera MLC Database; Knauf EPD
Sphera MLC Database - 2025.2 - Sphera
Calculation; Knauf EPD
Scope 3 Cat 12 - End-of-life product
management
Sphera MLC Database
Sphera MLC Database - 2025.2 - Sphera
Calculation
Scope 1 GHG emissions include all direct GHG emissions from energy consumption in the Company's
own operations, calculated in accordance with the GHG Protocol. Energy consumption includes all
direct energy sources (natural gas and fuel oil) at our own sites (production facilities, warehouses,
and offices) and for our own vehicles. GHG emissions are calculated as energy consumption multiplied
by the corresponding emission factors.
16
It was not the subject of any negative assurance.
126
GHG emissions under Scope 2 include indirect GHG emissions from the generation of electricity that
is purchased and consumed, calculated in accordance with the GHG Protocol. The location-based
method and the market-based method are calculated by multiplying the amount of purchased energy
by country-specific emission factors. The market-based method accounts for renewable electricity
purchased through power purchase agreements (PPAs) or renewable energy certificates (RECs) or
guarantees of origin (GoOs).
The Company reduced its emissions by purchasing carbon-free energy certificates from a nuclear
power plant. Based on the certificate of revocation of certificates of origin for electricity issued by
the Energy Agency of the Republic of Slovenia, it was confirmed in 2025 that 31,260 MWh of
electricity was generated in nuclear power plants. This represents 31.7% of total electricity
consumption.
Scope 3 GHG emissions include indirect GHG emissions from upstream and downstream supply
chains.
Scope 3 emissions are calculated in accordance with:
• GHG Protocol Corporate Value Chain (Scope 3) Standard,
• Scope 1 & 2 GHG Inventory Guidance.
Most Scope 3 emissions are calculated based on secondary data and model databases (Sphera MLC
Database, DEFRA, and other specialised databases), as primary data from suppliers is not
systematically available. Primary data from suppliers was used only for ilmenite, which accounts for
approximately 0.93% of Scope 3 emissions.
The Company does not report Scope 3 emissions in the following categories:
• Category 8 – Leasing of assets in the supply chain: We do not lease premises or other assets,
so this category is excluded.
• Category 11 – Use of products/services during their life cycle: this category is not relevant
to the Company, as its products do not cause direct emissions during the use phase, but
contribute to indirect emissions during the use phase. In accordance with the GHG Protocol,
reporting on indirect emissions during the use phase is optional. Therefore, this category is
excluded.
• Category 13 – Leased assets in the sales and distribution chain: The Company does not
manage leased assets outside its organisational boundaries. All relevant assets are either
owned by the Company or under its operational control. Therefore, Scope 3 of Category 13
is not relevant to the Company’s operations and is excluded from the Scope 3 emissions
inventory.
• Category 14 – Franchises: The Company does not operate franchises; therefore, this
category is excluded from the emissions inventory.
• Category 15 – Investments: The Company has no investments that would be outside its
organisational boundaries or operational control. Therefore, this category is excluded from
the emissions inventory. Investments in machinery and equipment are included in Scope 2.
Scope 3 data involves a higher degree of measurement uncertainty, as it is based on indirect
data.
The Company reports Scope 3 emissions in the following categories:
• Category 1 – Purchase of materials and services: Includes emissions from the extraction and
processing of raw materials and indirect materials, as well as from third-party manufacturing
and other goods and services.
127
• Category 2 – Purchase/installation of fixed assets: Includes emissions from investments in
construction, installation, maintenance, and repairs, calculated based on the corresponding
consumption of resources.
• Category 3 – Energy-related activities: Includes emissions resulting from the extraction,
processing, and transport of purchased fuels and energy not included in Scopes 1 and 2.
• Category 4 – Transportation and distribution of purchased products/materials: Includes
emissions related to the transportation of raw materials purchased and products sold by the
Company that are not owned by the Company
• Category 5 – Waste management: emissions from external waste management of waste
generated by the Company. Emissions are calculated based on the weight of waste generated
and the type of waste.
• Category 6 – Business travel: emissions from employee business travel financed by the
Company through reimbursement of various transportation costs (travel expenses) and
reimbursement of accommodation and meal costs. Emissions are calculated based on travel
agency reports for air travel and financial data for other activities. Travel data from 2022
was used to represent a typical business year for the Company, as 2021 was impacted by
the COVID-19 pandemic.
• Category 7 – Transportation of employees to and from work: Emissions from employees’
commuting between home and the workplace.
• Category 9 – Transportation during product shipment: Emissions from distribution carried
out by third parties and not financed by the Company.
• Category 10 – Further processing of products/services: Emissions resulting from the further
processing of our sold products. When calculating the carbon footprint, due to a lack of
accurate data from customers, we rely on experience and reasonable assumptions.
• Category 12 – End-of-life product management: Emissions from the processing of sold
products at the end of their life cycle, including the Company’s packaging materials.
The emissions data has not been independently audited or verified by an external body. In the future,
we will explore the possibility of independent verification in accordance with the ESRS standards and
the GHG Protocol to improve the transparency and reliability of our reporting.
Table 54: Gross Scope 1 GHG emissions
Scope
Emissions in t CO
2
eq. for 2021
17
,
location-based
method
Emissions in t CO
2
eq. for 2024,
location-based
method
Emissions in t CO
2
eq. for 2025,
location-based
method
Scope 1
78,763
74,180
76,209
Scope 1 GHG emissions from regulated emissions trading systems
25,376
23,273
24,397
The Company participates in the European Union Emissions Trading System (EU-ETS). In 2025,
32.01% of Scope 1 emissions were covered by the regulated emissions trading system. The Company
does not participate in any other national or international emissions trading schemes.
The Company does not use carbon credits or voluntary carbon offsets to meet its emission reduction
targets. Allowances surrendered or used under the EU-ETS represent a regulatory obligation and do
not count as carbon offsets for the purposes of meeting these targets.
Emission allowances received, used, and sold are shown in Table 53.
17
It was not the subject of any negative assurance.
128
Table 55: Presentation of allowances received, used, and sold for carbon offsetting purposes
EU-ETS Emissions Trading
2021
18
2024
2025
No. of
allowances
Value
(EUR)
No. of
allowances
Value
(EUR)*
No. of
allowances
Value (EUR)
Received allowances
40,397
1,321,790
36,788
2,394,899
36,788
3,082,467
Sold allowances
13,000
436,560
0
0
0
0
Used allowances
25,376
830,303
26,882
01,750,018
24,397
2,044,225
*values calculated based on the last known market price of the allowance in the year in question
All received allowances relate to Scope 1 emissions. These allowances account for 32% of Scope 1
emissions.
In the reporting year 2025, biogenic CO
2
emissions from the combustion or biodegradation of
biomass, which are not included in Scope 1 GHG emissions, amounted to 7.03 t CO
2
. Biogenic
emissions for 2024 amounted to 24 t of CO
2
. These emissions are disclosed separately for
informational purposes and are not included in total GHG emissions, in accordance with ESRS E1-6.
The breakdown of primary energy sources provided by the electricity supplier for 2024 shows that
the carbon dioxide emission factor is 381,555 g CO
2
/kWh, while for the Company this factor is
352,320 g CO
2
/kWh. The value for 2025 will be known by the end of June 2026.
Electricity generated in nuclear power plants is treated the same as energy generated from renewable
sources; therefore, it is considered low-carbon.
Primary emissions data obtained from suppliers and other partners in the value chain is not included
in the baseline calculation for Scope 3.
The Company does not have data on biogenic CO
2
emissions from the combustion or biodegradation
of biomass generated within the value chain and not included in Scope 3 GHG emissions.
The Company assessed that emissions associated with outsourced IT services are not material, given
their financial scope and in comparison to emissions from the procurement of raw materials and
energy sources. Most of the IT infrastructure is hosted on the Company’s own servers, whose
electricity consumption is already included in Scope 2 emissions.
5.2.2.9.1 Due to the negligible impact on total GHG emissions, emissions from cloud services
were not quantified separately.GHG intensity
Table 56: Total GHG emissions relative to net revenue
Indicator
2021
19
2024
2025
GHG intensity in tCO
2
/EUR (location-based method)
0.00158
0.00139
0.00139
GHG intensity in tCO
2
/EUR (market-based method)
0.00173
0.00150
0.00139
The Company does not exclude any portion of net revenue from the calculation of GHG emission
intensity. All operating revenue is included in the calculation; therefore, the value of indicator E1-
6.35 is: EUR 198,801,281. Net revenue for 2025, used to calculate GHG intensity, is aligned with
the income statement item 'Revenue from contracts with customers', which amounts to EUR
18
It was not the subject of any negative assurance.
19
It was not the subject of any negative assurance.
129
198,801,281, and EUR 200,285,413 for 2024 (see Note 20 in the financial section of the report).
Net revenue for the 2021 financial year amounted to EUR 192,462,100.
5.2.2.10 [E1-7] GHG removal and GHG reduction projects financed
with carbon credits
In 2025, the Company had no projects to reduce GHG emissions financed by carbon credits.
5.2.2.11 [E1-8] Internal carbon pricing
The Company does not use an internal carbon pricing scheme when making decisions or promoting
the implementation of climate-related objectives and policies.
5.2.2.12 [E1-9] Anticipated financial effects from material physical
and transition risks and potential climate-related
opportunities
The Company conducted an assessment of long-term climate impacts, including rising temperatures,
drought, and water scarcity. Based on the assessment, it was determined that the following assets
could be materially affected: Celje site, titanium dioxide production plant (risks identified in Table
55). The risks relate to:
• limited supply of process water during dry periods (short-term),
• failure of the barrier due to extreme rainfall (long-term).
Based on an assessment of transition risks associated with climate policies, technological changes,
and shifts in demand resulting from the transition to a low-carbon economy, the Company identified
the following activities that are exposed to material transition risks:
• Titanium dioxide production: subject to regulatory changes (e.g., stricter emissions
requirements, higher CO₂ costs).
Net revenue from activities involving material transition risks amounts to: EUR 168,872,162,
representing 85% of the Company's net revenue. If events related to these risks occur, they will
have a negative impact on the income statement and, consequently, on the Company's cash flow
and statement of financial position.The calculations of gross and residual risks in the table below are
based on estimated production costs and losses. The calculation takes into account fixed costs per
tonne of TiO
2
.
Gross risk refers to the amount of risk before risk management measures are applied, while residual
risk refers to the amount remaining after risk management measures have been implemented. If the
probability is greater than once a year, the risk is doubled.
130
Table 57: Acute physical risks
RISK
PERIOD
GROSS RISK
RESIDUAL RISK
RISK
CLASSIFICATION
IN EUR
IN EUR
Heavy rainfall caused by climate change
(floods, landslides) that could lead to the
collapse of barriers
LONG-TERM
267,000,000
11,675,000
PHYSICAL
Table 58: Chronic physical risks
RISK
PERIOD
GROSS RISK
RESIDUAL RISK
RISK
CLASSIFICATION
IN EUR
IN EUR
Limited supplies of process water during dry
periods
SHORT-TERM
7,098,000
2,770,000
PHYSICAL
The monetary amount of assets subject to significant acute physical risk prior to the implementation
of adaptation measures is EUR 267 million, representing 102% of the Company's balance sheet total
as at 31 December 2025. The monetary amount of assets subject to a significant chronic physical
risk prior to adjustment measures amounts to EUR 7.1 million, representing 2.7% of the Company’s
total assets as at 31 December 2025.
The Company identified the assets and business activities exposed to material transition risks and
linked these amounts to the relevant items in the Company’s statement of financial position. The
connection includes the gross value of the assets, the residual risk value, and the relevant accounting
categories where these assets are reported.
The total book value of assets exposed to chronic physical risks amounts to EUR 61,475,578 (at the
end of 2024, the value of these assets was EUR 59,541,095). The proportion of assets exposed to
chronic risks amounts to 23.5% (21.9% in 2024).
Table 59: Connection between transition risk assets and the Company's financial statements
Item
Description
Amount exposed
to transition
risks
Corresponding line item in the financial
statements
Note
Assets
Assets of the core
product
61,475,578 EUR
Statement of financial position → Intangible
and tangible fixed assets (Production
equipment and machinery with other
equipment)
Assets directly involved in
production that is exposed to
transition risk.
Income
Net income of the
core product
168,872,162 EUR
Income statement → Income from contracts
with customers
Income from products exposed
to transition risks (regulatory,
market, or technological).
Ratio to
balance
sheet total
Assets of the core
product / total
assets
24%
Statement of financial position → Assets of
the core product/total assets
Shows the proportion of assets
that is potentially exposed to
transition risks.
The amounts of assets and revenues subject to transition risks are fully consistent with the amounts
reported in the audited financial statements. The Company uses a reconciliation table to track the
impact of transition risks on its financial position and operating performance.
The remaining value of both risks represents 5.5% of the Company’s total assets; as at 31 December
2024, it amounted to 5.3%. The residual value of acute physical risk represents 4.5% of the
Companys total assets as at 31 December 2025 (and 4.3% as at 31 December 2024). The residual
value of the chronic physical risk represents 1.1% of the Company’s total assets as at 31 December
2025 (and 1% as at 31 December 2024).
Adaptation measures (alternative water sources, monitoring, and stabilisation of the barrier) reduce
potential financial losses by more than 95%, with the remaining exposure after implementation of
the measures estimated at 5.5% of total assets.
131
The Company's material assets, which are exposed to physical risk prior to the implementation of
adaptation measures, are located in the EU within the NUTS 3 region SI034–Savinjska. This primarily
concerns the key production complex and its associated infrastructure, which are exposed to chronic
physical risks associated with long-term water shortages and rising average temperatures.
The proportion of assets covered by the measures amounts to 62% (TiO
2
assets).
A cash amount of EUR 168,872,162 or 84.9% of net sales revenue from the core product TiO
2
relative
to the Company's total income is income from business activities involving significant physical risks
in the short-, medium-, and long-term. For more details, see Chapter IV, Segment reporting, in the
financial section of the report.
Limited supply of process water during dry periods
We conducted a financial assessment of the sustainability-related risks and opportunities that our
Company faces. In doing so, we took into account the interconnections between impacts and
dependencies, recognising that drought could lead to water supply restrictions, as flow rates during
such periods could fall below the ecologically acceptable flow rate, which represents the lower limit
for the pumping permit in the water permit. A suspension of pumping would mean an immediate halt
to the production of titanium dioxide, which is the Company's flagship product. Based on past drought
periods and climate projections, there is a likelihood that a drought could result in a 30-day
production outage. The Company holds a permit that also allows it to use drinking water in its
production process. Due to technical limitations, the capacity is 120 m³ of water per hour, which is
insufficient for maximum production but means that the Company would produce a relatively smaller
number of tonnes each day. This would result in an increase in fixed costs for 30 days, which could
amount to EUR 2,770,000 annually, negatively impacting our financial situation.
The risk was assessed based on data on the flow of the Hudinja river and climate projections (ARSO,
IPCC), with the financial impact estimated using the average daily loss of production and fixed costs
at reduced capacity. In terms of time horizon, this is a short-term risk.
Heavy rainfall caused by climate change (floods, landslides) that could lead to the
collapse of barriers
The estimated fixed costs would amount to EUR 61,445,532 plus the cost of barrier restoration.
The remediation is calculated based on the spill that occurred in Hungary in 2010 at the Ajka plant,
when 1.1 million m
3
of red sludge spilled from a similar dam. The remediation cost was EUR 141
million at the time; adjusted for today’s value, that would be approximately EUR 196 million. Given
that the pH was high there and the environmental damage was enormous, such remediation would
not be necessary; however, in our case, 2 to 3 times more material could be spilled.
The assessment is based on internal engineering modelling, the volumes of water and sediment
involved, and a comparable historical event (Ajka, 2010). The scenario involves a low probability but
a very high impact, making it a long-term physical risk with high materiality.
The Company estimates that the assets of its core product, TiO
2
, which amounted to EUR 61,475,578
as at 31 December 2025 (compared to EUR 59,541,459 as at 31 December 2024), are exposed to a
material physical risk previously identified. To mitigate this risk, the Company has planned an
investment in the use of process water from the Tremerje Wastewater Treatment Plant and the
replacement of the water source from the Hudinja river in the amount of EUR 12,100,000 as part of
its five-year business strategy, which will not alter the expected useful life of existing fixed assets.
The investment will be completed by 2028 and financed from the Company’s own funds.
132
Table 60: Transition risk
RISK
PERIOD
GROSS RISK
IN EUR
RESIDUAL RISK
IN EUR
RISK
CLASSIFICATION
Political and legal decisions regarding
emissions of CO
2
eq.
LONG-TERM
4,800,000
1,200,000
TRANSITION
EUR 4.8 million is the monetary amount at which there is a material transition risk in the short-,
medium-, and long-term, before taking into account climate change mitigation measures.
The Company's operating expenses will increase by EUR 4.8 million, which will have a negative
impact on the income statement in the long term after 2030 in the amount of EUR 4.8 million;
however, this exceeds the five-year period covered by the established business strategy.
As at 31 December 2025, the proportion of assets subject to significant transition risk that are
addressed through climate change mitigation measures amounts to 62% (the proportion of the
flagship product’s assets in total assets).
The Company conducted a comprehensive analysis of the business model’s resilience to climate risks
across three reference scenarios (SSP1-1.9, SSP1-2.6, and SSP5-8.5), in accordance with the TCFD
framework and ESRS E1 requirements, and this is discussed in greater detail in section [SBM-3]
Material impacts, risks and opportunities, and their relationship to the strategy and business model.
The effects on future financial performance are primarily reflected in:
• a potential increase in the cost of emission allowances,
• increased investment needs for technological adaptation,
• an impact on the cost structure of the supply chain,
• the risk of fluctuations in demand.
As mentioned in section 5.2.2.2, the time horizon of the analysis is aligned with the sustainability
strategy up to 2030.
Based on the stress test analysis, the Company did not identify any assets for which a material risk
of stranded costs is expected in the period up to 2030, as the technological transition is expected to
be gradual and is aligned with the assets’ investment cycle.
The Company uses energy-intensive assets with a long useful life (calcination furnace, dryers) with
a current value of EUR 0.8 million; their estimated book value by 2030 and 2050 will be zero, as the
assets will be fully depreciated.
Based on a climate risk resilience analysis conducted using the SSP1-1.9, SSP1-2.6, and SSP5-8.5,
the Company assessed that assets related to its core product, TiO₂, are exposed to significant
transition risk, primarily due to the energy intensity of production, exposure to emissions trading
costs, and regulatory requirements for the transition to a low-carbon economy.
The book value of these assets as at 31 December 2025 is EUR 61,475,578.
The Company defines the medium-term as the period from 1 to 5 years, in line with its sustainability
strategy, and the long-term as the period from 5 years onwards, in line with climate scenarios. This
timeframe is aligned with the expected useful life of key production assets, which extends beyond
2030.
Based on a scenario analysis, the Company estimates that, upon implementation of the planned
investments in energy efficiency and renewable energy sources totalling EUR 25,023,111 by 2030,
133
it does not expect a need for early retirement or impairment of assets with an unamortised book
value.
The investments are included in the 2024–2028 business strategy and the extended investment
period up to 2030, and are financed from the Company's own resources. The Company also discloses
the value of real estate (buildings) related to energy efficiency in the amount of EUR 38,469,429.
The energy efficiency of these assets is based on internal assessments and energy consumption
monitoring. No formal classification by energy efficiency class was performed.
The financial statements do not recognise any liabilities arising from the expected financial effects of
material transition risks in the short-, medium-, or long-term.
A cash amount of EUR 168,872,162 EUR or 84.9% of net sales revenue from the core product TiO
2
relative to the Company's total income, represents revenue from business activities subject to
significant volatility risk in the short-, medium-, and long-term. See section IV 'Reporting by segment'
in the financial section of the report.
The carrying amount of the TiO
2
product as at 31 December 2025 is EUR 61,475,578, which
represents a portion of the assets reported in the Company's statement of financial position under
the item 'Tangible fixed assets'. Sales revenue of EUR 168,872,162 or 84.9% of net sales revenue
from the core product TiO
2
relative to the Company's total income represents revenue from business
activities involving significant physical and significant transitory risks in the short-, medium-, and
long-term periods. See section IV 'Reporting by segment' in the financial part of the report and the
income statement item 'Income from contracts with customers' (income from the core product is
included in the Company's total income in the amount of EUR 198,801,281).
The assumptions used to assess the projected financial effects of significant physical and transition
risks (including emission allowance prices, energy prices, planned investments, expected production
growth, and the useful life of assets) are consistent with the assumptions used in the preparation of
the Company’s financial statements for 2025 and in the preparation of strategic projections for the
2024–2028 period.
Climate risks were taken into account in the assessment of future cash flows and the evaluation of
potential asset impairments. As at 31 December 2025, the Company did not recognise any asset
impairments, changes in useful lives, or additional provisions related to climate risks, as it assesses
that the planned measures and investments enable the management of identified risks within the
framework of expected business results.
With regard to the Emissions Trading Scheme (EU ETS), the Company recognises any liabilities
arising from emission allowances in accordance with applicable accounting standards and the
disclosures in the financial section of the annual report (see Note 4 'Other non-current assets' and
Note 25 'Impact of climate change on the financial statements' in the financial section of the report).
Expected long-term impacts of emission allowance prices extending beyond the period of the current
business strategy are not included in the financial statements but represent scenario-based estimates
of future exposure. Any changes in carbon prices or regulations will be appropriately reflected in the
period when the conditions for recognising a liability are met. More detailed information regarding
the status of allowances is shown in Table 53: Presentation of allowances received, used, and sold
for carbon offsetting purposes.
As part of its efforts to implement climate change mitigation measures, the Company identified
opportunities to reduce costs, primarily through improvements in energy efficiency and the
optimisation of energy use.
The nature of the expected savings stems from:
134
• a reduction in electricity consumption,
• a reduction in natural gas consumption,
• an increase in the share of renewable energy sources,
• a reduction in exposure to price volatility of energy sources and emission allowances.
Savings are expected to materialise gradually in the period up to 2030, in line with the Company's
investment plan.
The evaluation methodology is based on:
• an analysis of the expected reduction in energy consumption (in MWh),
• the use of average energy prices during the reference period,
• scenario assumptions regarding energy price trends and regulatory changes,
• a comparison of the "no-action" scenario and the scenario with measures implemented.
The estimated savings depend on future energy prices, regulatory conditions, and production
volumes; therefore, they represent estimates that involve a certain degree of uncertainty. Due to
business sensitivity, the Company does not disclose the detailed financial effects of individual
measures, but estimates in aggregate that the measures contribute significantly to increased energy
efficiency and long-term cost stability.
The Company assessed the potential changes in net revenue from low-carbon products and
adaptation solutions based on:
• analysis of the existing product portfolio,
• projected production growth up to 2030,
• market trends in the titanium dioxide industry,
• EU regulatory requirements regarding the carbon footprint of products,
• results of the LCA analysis.
The assessment covers the period up to 2030 and is based on the assumption that the structure of
the sales portfolio will not change significantly, but rather that the focus will be on improving the
carbon footprint of existing products.
The Company does not currently anticipate any significant changes to its product portfolio or a
substantial increase in revenue from new low-carbon products, as it remains focused on optimising
the carbon intensity of its existing products.
The market for low-carbon materials is accessible to the Company through its existing customers
and sales channels; however, it does not currently represent a separate or additional source of
income, but rather a competitive advantage within the existing business model. Potential changes in
regulations or demand for certified low-carbon products could affect the future income structure.
The financial impacts of physical and transition risks were assessed based on a scenario analysis that
includes:
• an estimate of the probability of the event occurring,
• an estimate of the duration of the interruption or reduction in production,
• a calculation of the loss of revenue based on fixed costs per tonne of TiO₂ produced,
• an estimate of remediation costs or additional operating costs.
For acute risks, the approach used was based on gross risk (before measures) and residual risk (after
measures were implemented).
Key assumptions include:
135
• an unchanged production structure,
• current regulatory conditions,
• average market prices for emission allowances,
• technical feasibility of the planned measures.
Limitations of the methodology:
• uncertainty in climate scenarios,
• uncertainty in energy and allowance price trends,
• use of historical reference events,
• failure to account for secondary macroeconomic effects.
The financial risk assessments were prepared internally by the Company’s specialist departments.
The financial impact metrics were not subject to a separate external review.
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5.2.3 [E2] Pollution
5.2.3.1 [E2 IRO-1] Description of the process to identify and assess
material pollution-related impacts, risks and opportunities
The Company has established procedures for identifying and assessing actual and potential impacts,
risks, and opportunities related to pollution. Based on the structured approach established in 2024,
we continued with the regular implementation of the IRO procedure in 2025. As part of the annual
update of the DMA, we reviewed and updated the assessments of significant impacts, risks, and
opportunities prepared in the previous year. In doing so, we took into account updated data on
emissions to air, water, and soil, as well as the state of the environment derived from available
monitoring data for 2025, and we verified compliance with legislation and identified any new
requirements. Assessments of pressures and impacts for our own operations were appropriately
updated, and at the same time, we gradually expanded our due diligence to parts of the value chain
within the scope of available data.
In 2025, consultations with employees and key stakeholders were not conducted, as the results of
the extensive consultation activities and surveys conducted in 2024 were sufficient for further use in
the IRO process. Therefore, this data was used as a reference basis for verifying any changes in the
assessment of impacts, risks, and opportunities, without re-collecting stakeholder opinions. In our
assessment, we thus utilised updated monitoring results for 2025, available data on the state of the
environment, assessments of compliance with legislation, expert internal evaluations, and
information from the supply chain due diligence.
The Company is aware of the impacts arising from its current production activities and, in particular,
from the historical industrial contamination of the Celje site and surrounding areas, including waste
treatment facilities and a landfill for non-hazardous waste. Past soil and groundwater investigations
remain an important source of data for assessing environmental risks, as they indicate that many of
these contaminations stem from periods when environmental legislation was not yet sufficiently strict
and awareness of industry’s impact on the environment was significantly lower than it is today.
Table 61 presents the material impacts, risks, and opportunities for area E2 that were identified in
2025, based on the updated IRO process, as material to the Company’s operations (at the Celje and
Mozirje sites), particularly those arising from the production of titanium dioxide (TiO₂). The general
dual materiality assessment process is described in more detail in ESRS 2 [SBM-3].
137
Table 61: Material impacts, risks and opportunities (IRO) for area E2
Material impacts, risks
and/opportunities
Definition
Location/value chain
Time period
Own operations
Lower part of the
value chain
Upper part of the
value chain
Short-term
Medium
-term
Long-term
Air pollution
Emissions to air SO
2
, H
2
S, other
gases
Actual negative impact
x
x
Emissions to air – particulate matter
(dust)
Actual negative impact
x
x
Other CO
2
emissions (process
sources)*
Actual negative impact
x
x
Water pollution
Emissions to rivers − sulphates
Actual negative impact
x
x
Discharges to groundwater in areas
with historical contamination
Actual negative impact
x
x
Due to groundwater monitoring
findings indicating that the
Bukovžlak non-hazardous waste
landfill (ONOB) is causing changes
in groundwater conditions, the
Company is facing a requirement to
remediate the ONOB. Implementing
remediation measures will represent
a significant financial burden for the
Company and could substantially
impact the planning of future
resources and operational priorities.
Risk (physical)
x
x
Substances of concern and very high concern
Substances of concern
Actual negative impact
x
x
Substances of very high concern
Actual negative impact
x
*This impact is discussed in section E1
The Company's production activities result in emissions of substances into the air and water. This
causes air and surface water pollution. These emissions result from processes in the chemical
industry, primarily from the production of titanium dioxide. The Company has installed
appropriate treatment facilities compliant with BAT techniques at all emission points.
However, the release of treated gases from the treatment facilities into the air (primarily sulphur
oxides, hydrogen sulphide, and particulate matter in the form of dust) still affects outdoor air quality
or contributes to existing pollution. Discharges of treated wastewater are released into surface
waters, primarily involving sulphate loading, which affects the chemical status of watercourses. Due
to historical industrial activities, which were primarily carried out in the past at the Celje site and the
Bukovžlak landfill, certain environmental impacts have occurred that are still reflected today in soil
and groundwater contamination. These are the result of past practices where industrial waste was
used as construction material; this now contributes to the leaching of these pollutants, which affects
the quality of groundwater in these areas and can indirectly affect the quality of surface water.
During the reporting period, the Company did not have any intentional or regular emissions of
pollutants into the soil or groundwater. Based on the mode of operation, the valid environmental
permit, and the risk assessment conducted, there are no established discharge points into the soil or
groundwater, and operational monitoring is carried out. Potentially relevant substances are defined
as relevant hazardous substances (RHS) in accordance with the Industrial Emissions Act. Eighteen
138
relevant hazardous substances are identified in the area of the facility, 17 of which are included in
the comprehensive risk assessment and monitoring; their presence is expressed in mg/kg (soil) and
μg/L (groundwater), but they are not released into the soil as emissions.
Technical measures are in place to prevent any uncontrolled releases, including impermeable
flooring, containment systems, double-walled tanks, and separate drainage systems, thereby
preventing contact between the hazardous substances in question and the ground.
In accordance with the requirements of industrial emissions legislation, a baseline survey of soil and
groundwater was conducted, which serves as a reference point for long-term monitoring. The
concentrations of substances found in the soil and groundwater are predominantly related to the
historical use of the site and do not represent quantified emissions during the reporting period.
The Company is conducting, or will conduct, operational monitoring to detect any potential future
changes. In the event of an emergency, the quantities of spilled substances would be recorded and
reported as actual emissions to the soil.
Air, water, and soil pollution can have a negative impact on human health and quality of life, as well
as on the Company’s public reputation due to its role in causing pollution.
Similarly, the Company cannot completely avoid the use of hazardous chemicals in its manufacturing
operations, including substances of concern and substances of very high concern. These substances,
or hazardous chemicals, may pose risks to people and the environment due to their use. The
Company ensures that the use and production of hazardous chemicals comply with the REACH
Regulations (Regulation (EC) No. 1907/2006 concerning the Registration, Evaluation, Authorisation
and Restriction of Chemicals) and CLP (Regulation (EC) No. 1272/2008 on the Classification, Labelling
and Packaging of Substances and Mixtures), which is based on the Globally Harmonised System
(GHS).
The Company did not recognise microplastics as an important issue.
We monitor, identify, and assess the impacts and risks associated with pollution. In doing so, we use
available data from our own monitoring of emissions of substances into water and air, monitoring of
surface waters in the vicinity of our sites, monitoring of groundwater and soil conditions, noise,
waste, the use of hazardous substances, incident tracking, and complaints from affected
communities. We assess identified impacts and risks, take measures as needed, and regularly report
on environmental indicators. We also monitor other available monitoring results and findings
regarding pollution in the vicinity of our operations, including data on past pollution incidents and
their consequences (historical data). We also pay attention to anticipated changes in production
processes by determining how these changes could impact the environment (applications for
amendments to environmental permits with an assessment of actual and anticipated impacts,
assessment of BAT techniques). In 2024, we also began conducting an impact assessment of the
value chain. While the Company identified several value chains, we focused on the key value chain
related to TiO
2
production (upper section).
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5.2.3.2 [E2-1] Policies related to pollution
Table 62: Key policies for managing material impacts related to the prevention and control of pollution in the areas of air, water and soil pollution and the substitution and reduction of the use of
substances of concern and very high concern
Title of policy, code,
regulation
Description of key content
Description of key
content
Disclosure of third-party standards
or initiatives that the Company
considers when implementing the
policy
Description of consideration of the
interests of key stakeholders in
the formulation of the policy
Availability
Policy on Pollution
Prevention,
Sustainable Use of
Water Resources,
Biodiversity and the
Circular Economy
This policy sets forth the Company's commitment to
preventing environmental pollution. The goal is to
reduce negative environmental impacts, improve
resource use, and ensure compliance with legislation
and best available techniques (BAT). The policy applies
to the Company's own operations.
Head of the Sustainability
Team, Management
Board, employees
ISO 14001 (environmental
management system),
In developing its Policy on Pollution
Prevention, Sustainable Use of
Water Resources, Biodiversity and
the Circular Economy, the Company
took into account the interests of key
stakeholders, including employees,
business partners, the local
community, and regulatory
authorities, and applies this policy to
its own operations.
Document management
system
Policy on Quality,
Environmental
Management,
Occupational Health
and Safety, and
Energy Management
It sets out the achievement of key strategic objectives in
the areas of pollution reduction, compliance with legal
requirements, and the identification and management of
hazards and risks. The policy applies to the Company’s
own operations.
Head of the Sustainability
Team, Management
Board, employees
ISO 9001 (quality management
system),
ISO 14001 (environmental
management system),
ISO 45001 (occupational health and
safety management system)
ISO 50001 (energy management
system)
In developing its Policy on Quality,
Environmental Management,
Occupational Health and Safety, and
Energy Management, the Company
took into account the interests of key
stakeholders, including employees,
business partners, the local
community, and regulatory
authorities, and applies this policy to
its own operations.
www.cinkarna.si
Policy on the
Prevention of Major
Accidents and
Mitigation of Their
Consequences
Ensuring a high level of disaster preparedness and the
safety and health of employees, residents, and the
environment, with the aim of:
• ensuring operations comply with the requirements of
regulations governing environmental protection,
chemical management, occupational safety and
health, and protection against natural and other
disasters;
• minimising the risk to people at the facility and in the
surrounding area from extraordinary events and
major accidents that could occur at the facility due to
the handling, use, production, or storage of
hazardous substances;
• planning, construction, maintenance, and operation
in accordance with the best available techniques for
Management Board,
employees
ISO 14001 (environmental
management system),
ISO 45001 (occupational health and
safety management system)
The company took into account the
interests of employees, affected
communities, and businesses that
could be impacted in the event of an
accident, as well as applicable laws,
and applies these principles to its
own operations.
www.cinkarna.si
140
preventing major accidents and mitigating their
consequences;
• encouraging all employees to prevent major
accidents and mitigate their consequences for
people and the environment;
• ensuring adequate preparedness for major accidents
based on the adopted protection and rescue plan for
major accidents at the facility;
• cooperating with the local community and informing it
in a timely and appropriate manner about the status
of accident prevention;
• informing residents in the vicinity of the facility about
potential major accidents at the facility.
Organisational policy:
Safety Management
and Emergency
Response System
It defines the authorities, responsibilities, and
documentation within the Company’s Safety
Management and Emergency Response System
(incidents). In the event of an incident, actions are taken
to resolve the incident and mitigate its consequences
for people and property, with the participation of
employees in specific roles, maintenance personnel,
firefighters, civil protection units, first responders, and
others. After the incident, an analysis of the causes is
conducted, and measures are taken to prevent such
incidents from recurring.
Management Board,
employees
ISO 14001 (environmental
management system),
ISO 45001 (occupational health and
safety management system)
The policy takes into account
employees, affected stakeholders,
and applicable laws, and applies to
the Company's own operations.
www.cinkarna.si
Code of Sustainable
Business Conduct for
Business Partners of
Cinkarna Celje d.d.
Presentation of strategic goals in the areas of the
environment, society, and corporate governance. We
expect our business partners to act in accordance with all
applicable regulations and to establish systems, controls,
and rules to promote compliance with applicable
regulations and this Code, including training, monitoring,
and auditing mechanisms. Business partners are
responsible for verifying that their operations comply with
the Code and for meeting the requirements set forth in
the Code, both within their own organisation and
throughout their supply chain.
Director of Procurement
and Logistics,
Management Board,
employees in sales and
procurement
Code of Ethics of the Purchasing
Association of Slovenia
The code reflects a balanced
approach that enables effective
collaboration with all stakeholders
and promotes long-term, sustainable,
and ethical procurement practices,
and applies to the value chain.
Document management
system
Business partners
141
An integral part of the Company's management is an integrated management system that
encompasses the fundamental elements of management and operations for all of the Company's
activities, in accordance with the requirements of the ISO 9001 Quality Management System, ISO
14001 Environmental Management System, and ISO 45001 Occupational Health and Safety
Management System; at the Kemija Mozirje site, we are registered in the EMAS environmental
management and assessment system. Within this system, we established and documented our Policy
on Quality, Environmental Management, Occupational Health and Safety, and Energy Management,
as well as our Policy on Pollution Prevention, Sustainable Use of Water Resources, Biodiversity, and
the Circular Economy.
The effectiveness of the established systems, including the requirements of the EMAS Regulation and
the Environmental Statement, is verified annually by the certification body SIQ (Slovenian Institute
for Quality and Metrology). Based on the environmental audit and all documented evidence, the
Slovenian Environment Agency issued on 10 February 2025 the Decision on the Extension of
Registration in the EMAS system with Registration Number SI-00003 and the corresponding
Certificate of Registration in the EMAS system, valid until 30 November 2027. These policies are
consistent with the sustainability strategy. They address responsible environmental management
and, consequently, the management of significant impacts of air pollution (SO
2
, H
2
S, particulate
matter), the reduction of CO
2
emissions (from process sources), discharges into water (sulphates)
and groundwater, and the use of substances of concern and very high concern, as well as risk
management within our own operations (the aforementioned IROs in the table: Material impacts,
risks and opportunities (IROs) for area E2). Through our Policy on the Prevention of Major Accidents
and Mitigation of Their Consequences, as well as our organisational regulations for safety
management and emergency response, we address potential impacts on air, water, groundwater,
and soil pollution, including the safe use of hazardous substances. Through the Code of Sustainable
Business Conduct for Business Partners, we address the material impacts listed in the table: Material
impacts, risks and opportunities (IRO) for area E2 for the upper and lower parts of the value chain.
In the area of the environment, we operate in accordance with legal requirements and environmental
permits. This includes compliance with the requirements of EU directives on industrial emissions
(meeting the requirements of BAT (Best Available Techniques) conclusions), the European Pollutant
Release and Transfer Register, and the Regulation on Sustainability-Related Disclosures. We actively
collaborate with relevant authorities in planning and implementing environmental measures and
proactively manage our environmental impacts. We engage in dialogue with local communities,
involve them in decision-making regarding environmental measures, and transparently report on the
results achieved. We also monitor, educate, and seek opportunities for the gradual phase-out and
replacement of substances of concern and substances of very high concern. We have established
procedures for identifying risks and implementing risk management measures, and we ensure a rapid
and effective response in emergency situations to prevent or reduce pollution. We regularly monitor
and report on progress toward achieving our environmental objectives.
We expect our business partners to sign the Code of Sustainable Business Conduct,
thereby committing them to achieving our strategic goals, including those related to
pollution. We conduct due diligence to identify the impacts, risks, and opportunities of our own
operations and the value chain. The Company's Sustainability Strategy up to 2030 was also adopted.
For more details, see section [SBM-1].
5.2.3.3 [E2-2] Actions and resources related to pollution
The Company adopts numerous measures aimed at meeting strict environmental requirements,
adhering to policy commitments and strategic goals with the aim of reducing pollution caused by its
own operations, and monitors impacts throughout the value chain. The material impacts identified
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are those caused by the Company’s operations on the environment, which in turn affect the affected
communities.
5.2.3.3.1 Air pollution
We carefully monitor air emissions at both locations (Celje and Mozirje). We measure pollutants such
as sulphur oxides (SO
x
), hydrogen sulphide (H₂S), nitrogen oxides (NO
x
), carbon monoxide (CO),
total dust, and total organic carbon (TOC). Based on the results of emission monitoring,
environmental monitoring, and the Company's potential environmental impacts, we identified three
types of emissions as significant: SO
x
emissions, H
2
S emissions, and total dust emissions.
The three key emitters listed above are located in Celje and are primarily associated with titanium
dioxide production. Smaller amounts of dust emissions also occur at the Mozirje site. Therefore, all
measures at this site are aimed at reducing these emissions and are presented in the tables.
Measures that were completed by 2024 are not listed again in the report.
Table 63: Overview of measures and key activities to reduce H
2
S emissions at the Celje site
Types of measures and key activities 
Year
Status
Automatic addition of NaOH to the leaching solution at the sulphur melting plant
2025* 
In progress
Automatic lime dosing during sulphur melting
2025*
In progress
Replacement of the sampling system from the separation towers
2025*
In progress
Control of the separation reaction to limit H
2
S formation
2030
In progress
Installation of a third column for H
2
S absorption during sulphur melting 
2026
To be implemented as needed if
other measures do not yield
sufficient results
*Due to difficulties in finding suitable solutions, the investments were not completed in 2025 and will continue into 2026.
 
Table 64: Overview of measures and key activities to reduce air emissions − SO
x
 
Types of measures and key activities 
Year
Status
Installation of an additional sulphuric acid reactor 
2030 
To be implemented as needed if
other measures do not yield
sufficient results
Routine replacement of V2O5 catalyst and activated carbon   
2030
In progress
Dosing of NaOH directly into feeders 12.24 A, B, C 
2025
Completed
Table 65: Overview of measures and key activities to reduce air emissions − Dust
Types of measures and key activities 
Year
Status
Improving the performance of the wastewater treatment plant’s pre-drying process through
an engineering approach
2030 
In progress
5.2.3.3.2 Water pollution
Wastewater is generated at both Company locations. Before discharge, it is treated at the Company's
own treatment plants or sent for treatment. Through monitoring at discharge points, we track
pollutants and their impact on surface waters into which certain treated wastewater is discharged.
Monitoring is conducted regularly and systematically at all wastewater discharge points as well as in
the surface waters into which wastewater is discharged. The key impact on surface waters is the
emission of sulphates as a result of titanium dioxide production using the sulphate process. The
concentration of sulphates in the Company's wastewater consequently affects the chemical
composition of the watercourse, which in turn impacts aquatic ecosystems. The Company therefore
monitors sulphate emissions in wastewater and surface waters, and strives to reduce them through
effective water management measures within the production process itself, as well as by filling the
waste disposal facility, thereby reducing sulphate emissions. It also implements measures to prevent
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groundwater contamination in areas with historical contamination, specifically by reconstructing the
Bukovžlak Non-Hazardous Waste Landfill and by conducting regular, comprehensive monitoring of
the condition of groundwater and surface water. The goal of these measures is to ensure
compliance with environmental legislation, protect the quality of surface and
groundwater, and reduce impacts on watercourses and the local environment.
Table 66: Overview of measures and key activities to reduce emissions into water (sulphates)  
Types of measures and key activities 
Year
Status
Effective water management – increasing the reuse of process water
2026* 
In progress
Filling the Za Travnik Waste Disposal Facility
2030
In progress
*Activities were not completed in 2025 and will continue into 2026
5.2.3.3.3 Substances of concern and very high concern
The Company uses hazardous substances in its manufacturing operations and is aware of the impacts
and risks their use poses to people and the environment. It systematically monitors the use of
substances of concern (SoC) and substances of very high concern (SVHC). To this end, it seeks
possible substitutes with lower hazard levels where technically and economically feasible, and also
strives to reduce their quantities. It also places great emphasis on educating employees about the
safe use of chemicals.
Table 67: Overview of measures and key activities to reduce substances of very high concern
Types of measures and key activities 
Year
Status
Replacing hydrazine with a less hazardous alternative
2027 
In progress
Introduce an alternative to TMP in TiO
2
production 
2027
In progress
 
Managing the impacts of the value chain
In 2024, the Company conducted an analysis of the upper part of the value chain and implemented
a due diligence process for key suppliers. We are continuing with these procedures and, to that end,
we are using/reviewing/collecting data for due diligence based on:
• annual reports from suppliers/customers,
• information obtained through direct communication with stakeholders,
• surveys,
• information from websites.
To effectively manage the impacts of the value chain, the Company will continue to implement
activities in the coming periods that encompass both the upstream and downstream segments of the
value chain and include measures to mitigate negative impacts.
The planned steps are:
• analysing and reviewing partners in the value chain with regard to their sustainability
commitments, goals, and measures,
• monitoring partners’ activities and their progress toward achieving sustainability goals,
• promoting sustainable projects that reduce negative impacts.
5.2.3.4 [E2-3] Targets related to pollution
The Company set short-term, medium-term, and long-term targets in the areas of pollution reduction
and the management of substances of concern and very high concern, with the aim of ensuring
144
sustainable development and reducing negative environmental impacts. These are voluntary
commitments. It focuses on key impacts that significantly contribute to pollution prevention and
control, substantially reduce pollution levels, and improve environmental quality. To this end,
indicators and metrics have been established to measure pollution reduction, such as specific
emission reductions, ensuring that progress can be quantitatively assessed in accordance with the
criteria for significant contributions. In doing so, the search for innovative technologies and practices
leading to significant reductions in pollution is encouraged, the regulatory framework is taken into
account, and stakeholders, including local communities, are gradually involved to ensure that various
perspectives are considered and that measures are effective and equitable. Employees are also
involved through awareness-raising and training on pollution prevention and control.
The Company's targets related to pollution are not based solely on regulatory requirements and
internal assessments, but are grounded in scientifically sound principles.
When setting targets, the Company uses:
• reference values and limit criteria based on scientific studies of the environmental and health
impacts of substances;
• best available techniques (BAT/BREF), whose limit values are derived from extensive
international industrial and scientific analyses;
• monitoring data analysed using statistical methods that enable scientifically reliable
assessment of pollution trends and the effects of measures;
• internal impact assessments based on methodologies that follow applicable scientific
standards for risk assessment and environmental impact assessment.
The targets are designed so that:
• they are based on verifiable scientific metrics,
• follow the best available environmental standards,
• contribute to reducing pollution to an extent that can be scientifically demonstrated and
measured,
• take into account credible scientific predictions regarding the effects of pollutants and
expectations within the EU regulatory framework.
On this basis, environmental targets are designed to be grounded in verifiable scientific metrics,
aligned with the best available environmental standards, and contribute to reducing pollution to an
extent that can be scientifically demonstrated and measured.
No scientifically determined ecological thresholds are available for the Celje area that would define
the ecosystem’s carrying capacity or the maximum permissible air and soil pollution levels. Instead
of ecological thresholds, the regulatory framework in Slovenia and the EU uses air quality limit values
(e.g., PM10/PM2.5), soil concentration limits, and emission limits from industrial sources. Local air
quality monitoring for Celje is based on tracking exceedances of legally established PM10 limit values,
with results significantly influenced by heating systems, traffic, and the unfavourable meteorological
conditions in the basin. In the area of soil contamination (heavy metals in specific degraded parts of
the urban area), there are monitoring data and remediation programmes, but no scientifically
determined ecological thresholds that would define environmental carrying capacity.
Due to the absence of scientifically established ecological thresholds, the Company did not base its
targets on these thresholds, but rather on legally prescribed emission limit values and the conditions
set forth in the environmental permit, BAT reference values, and internal efforts to gradually reduce
emissions relative to the baseline. In this context, statutory limit values represent regulatory limits
on permissible environmental impact where ecological thresholds have not yet been developed or
are not available. The Company monitors regulatory and scientific developments and will adapt its
145
target-setting procedures accordingly should ecological thresholds be established at the EU or
Slovenian level.
Monitoring and reporting systems are implemented to track progress. Appropriate funding is also
allocated. By focusing on these areas, the pollution-related objective can effectively address
shortcomings in the criteria for significant contributions to pollution prevention and control, leading
to significant improvements in environmental quality.
The strategic objectives include:
• reducing air, water, soil, and groundwater pollution by focusing on the main identified
pollutants;
• managing and reducing the use of substances of very high concern (SVHCs) in accordance
with the REACH Regulation.
To enable the Company to achieve its strategic objectives, specific and measurable targets were
established, which are presented in Tables 68 - 70.
Table 68: Overview of targets for reducing air pollution
Target
Quantity and planned year
Result
Reduction of specific hydrogen sulphide
(H₂S) emissions by 2030
By 15% by 2030 (a reduction of 0.005 kg/t
TiO
2
; in absolute terms, we remain within
legal limits and at the 2021 level)
A reduction of 73.7% (0.028 kg/t TiO
2
less;
we remain within legal limits in absolute
terms) by 2025
Reduction of specific sulphur oxide (SO
x
)
emissions by 2030
By 15% by 2030 (a reduction of 0.22 kg/t
TiO
2
; in absolute terms, we remain within
legal limits and at the 2021 level)
A reduction of 73.1% (1.06 kg/t TiO2 less;
we remain within legal limits in absolute
terms) by 2025
Reduction of specific particulate matter
emissions by 15% by 2030
By 15% by 2030 (a reduction of 0.035 kg/t
TiO
2
; in absolute terms, we remain within
legal limits and at the 2021 level)
A reduction of 45.2% (0.11 kg/t TiO2 less;
we remain within legal limits in absolute
terms) by 2025
Table 69: Overview of targets for reducing water pollution
Target
Quantity and planned year
Result
Reduction of specific sulphate emissions into
water by 15% by 2030
By 25 kg/t of TiO₂ by 2030; in absolute
terms, we remain within legal limits and at
the 2021 level)
An increase of 2.4% (an additional 3.8 kg/t of
TiO2; in absolute terms, we remain within
legal limits) in 2025
Table 70: Overview of targets for controlling and reducing the use of substances of very high concern (SVHCs) in accordance with
the REACH Regulation
Target
Result
Gradual replacement of SVHCs with alternative substances by 2030, where
technically feasible
In 2025, the supply and use of one SVHC (borax decahydrate)
were discontinued, and the procurement of chemicals
containing bisphenol A was reduced
Regular updating of the internal SVHC list in accordance with the REACH
Regulation
The list is updated regularly
When setting pollution targets, the Company also took into account ecological thresholds—
scientifically determined limits above which significant negative impacts on ecosystems or human
health may occur. These thresholds are based on European and national environmental standards as
well as scientific studies. The ecological thresholds relevant to the Company are those for emissions
to water, emissions of substances to air, and emissions to soil.
To prevent soil and groundwater contamination, the Company implements all measures specified in
the environmental permit. This includes both preventive measures and monitoring of groundwater
and soil. Groundwater monitoring is conducted twice a year, while soil monitoring is conducted at
five-year intervals (a baseline survey was conducted in 2024; the next monitoring is scheduled for
2029).
The Company is also carrying out the rehabilitation of the Bukovžlak Non-Hazardous Waste Landfill,
and it is expected that the technical and remediation measures implemented will reduce the landfill’s
impact on groundwater in the long term.
146
In addition to the above, measures to prevent pollution are regularly implemented at all waste
disposal facilities and production sites, including monitoring of conditions and environmental
parameters, which ensure the prevention of soil and groundwater contamination and the timely
detection of any deviations.
The Company has no additional specific objectives or measures in this area, as its existing activities
are carried out in accordance with legal requirements and the environmental permit, and are
sufficient to effectively manage environmental risks.
5.2.3.4.1 Sustainable value chain
The Company is aware of the importance of cooperation with suppliers and business partners, and
therefore strives to:
• establish and maintain cooperation with partners who adhere to the Company’s Code of
Sustainable Business Conduct,
• encourage business partners in the value chain to reduce the use of hazardous substances
and pollution.
The set targets are monitored on a quarterly basis, and their effectiveness is reviewed once a year
as part of the annual management review, which also includes a due diligence review. Measures to
achieve the targets are reported in section [E2-2]. We adopt and implement appropriate measures
to ensure that our taxonomy-eligible activities do not cause significant harm to the objectives set
out in Regulation (EU) 2020/852 establishing a framework to promote sustainable investment
(Taxonomy Regulation) and that we meet the Do No Significant Harm (DNSH) criteria.
5.2.3.5 [E2-4] Pollution of air, water and groundwater
The Company's production processes result in emissions of substances into the air, water, and
groundwater. Below, we report on pollution resulting from our own operations. We disclose data on
changes in emissions over a two-year period in accordance with the requirements and methodological
adjustments set forth in the CSRD Directive and ESRS standards.
5.2.3.5.1 Air pollution
Reducing air emissions is crucial for improving air quality and mitigating negative impacts
on human health and the environment. To this end, we set targets and measures aimed at
reducing emissions from individual sources over which we have control. We monitor air emissions
through measurements conducted in accordance with a monitoring programme implemented by
authorised external organisations. Measurements are conducted in accordance with applicable
standards and are either periodic (once a year, once every 3 years, or once every 5 years) or involve
continuous air pollution monitoring. The key parameters are SO
x
, H
2
S, and total dust.
Table 71: Air emissions at the Celje and Mozirje sites in 2024 and 2025, in kg and kg/t of TiO
2
from titanium dioxide production
Type of emissions
2024
2025
Sulphur dioxide (SO
2
) (kg) 
88,338
75,862
Sulphur dioxide (SO
2
) (kg/t TiO
2
)
0.51
0.39
Hydrogen sulphide (H
2
S) (kg) 
2,331
653
Hydrogen sulphide (H
2
S) (kg/t TiO
2
)
0.04
0.01
Dust (kg) 
9,550
7,687
Dust (kg/t TiO
2
)
0.16
0.13
147
Emissions of sulphur dioxide, hydrogen sulphide, and dust from titanium dioxide production were
below the limit values (the limit value for SO₂ is 500 kg/t TiO₂, for H₂S is 0.05 kg/t TiO₂, and for
dust is 0.45 kg/t TiO₂; in accordance with the OVD or the TiO₂ Regulation and BAT).
Data collection and calculation process
The data on air emissions presented in the table above is based on measurements taken by
authorised monitoring contractors in accordance with the requirements of the environmental permit.
The measurements comply with applicable standards and measurement methods, which always
include an assessment of measurement uncertainty, provided in the monitoring operators’ reports
along with a description of the measurement method used. The measured concentrations of
pollutants (e.g., SO₂, H₂S, dust) are then converted into annual quantities based on available data
on plant operation (number of operating hours, operating capacity, and other technical parameters).
In titanium dioxide production, measurements are typically taken once a year at most monitoring
points, under peak operating conditions; therefore, the measured concentrations are considered to
represent maximum reference values. In the annual calculation, these values are extrapolated to
full-year operation, which can lead to partially overestimated annual emission values when actual
operating conditions throughout the year deviate from the measured conditions. Particulate matter
is monitored at two locations using continuous (permanent) measurements, which allows for a more
representative calculation of annual values.
The Company notes that certain quantitative metrics are therefore subject to a higher degree of
measurement uncertainty, particularly where measurements are less frequent. The frequency of
individual measurements (e.g., once every three years, once every five years, or once a year) is
specified in the environmental permit, which is publicly available on the website of the Ministry of
the Environment, Spatial Planning and Energy. For these parameters, concentrations are determined
based on a limited number of measurements; due to the low measurement frequency and the
variability of actual operating conditions, certain emission metrics may exhibit higher measurement
uncertainty or deviations resulting from methodological assumptions.
In addition to absolute emission values, the Company also calculates specific emissions based on the
quantity of product manufactured. Production is measured directly; therefore, the measurement
uncertainty of specific emissions is primarily due to the uncertainty of input emission measurements
and calculations based on operational data.
Despite the aforementioned limitations, the Company ensures that all emissions data is calculated
based on the best available data, in accordance with the requirements of the environmental permit
and the methodologies prescribed by external monitoring contractors. The Company regularly
reviews the data and, as measurement methods and monitoring equipment are upgraded, gradually
improves the accuracy and reliability of the reported values.
5.2.3.5.2 Water pollution
At the Celje site, wastewater and cooling water are generated as part of production processes.
Wastewater is treated at the Company's own treatment plants and, after treatment, is suitable for
discharge into watercourses. Where possible, procedures are implemented to recover and reuse
water in processes. Municipal wastewater is treated at the Celje Central Wastewater Treatment Plant
(Tremerje). Most cooling systems are closed-loop, so there are no discharges. Stormwater is
discharged into watercourses separately, either indirectly (after being treated in oil separators and
sand traps) or directly.
148
In accordance with our environmental permit, we monitor a total of fifteen wastewater discharge
points, ten of which are at the Celje site and five at the Mozirje site. At the Celje site, we discharge
wastewater into three water bodies: Dobje, Vzhodna Ložnica, and Hudinja; at the Mozirje site, we
discharge into the Ljubija and Savinja rivers.
The volume of water discharged into surface waters depends partly on the volume of water consumed
(for production and efficient use) and partly on the volume of stormwater, as a result of the
catchment area of waste disposal facilities, from which excess water is discharged into watercourses.
The discharge of municipal wastewater depends on several factors, namely the rational use of water
for sanitary purposes and, to some extent, for technological purposes, as well as losses in the internal
water supply system.
The Table 72 shows the total amount of sulphate released by the Company and the specific amount
of sulphate released from TiO
2
production in 2024 and 2025.
Table 72: Emissions to water at the Celje and Mozirje sites in 2024 and 2025, in kg and kg/t of TiO
2
, from titanium dioxide
production at the Celje site
Type of emission 
2024
2025
Amount of sulphate emitted (in kg/year)
9,099,998
9,124,485
Specific amount of sulphates (SO
4
2-
in
kg/t TiO
2
) 
149
159.5
Amount of zinc emitted (in kg/year)*
114
72
Amount of copper emitted (in kg/year)*
33
31
SO
4
2-
in kg/t TiO
2
is the concentration of sulphates per unit of TiO
2
product.
*Reporting is in accordance with the requirement set out in Annex II to Regulation (EC) No 166/2006 (E-RIPO Regulation)
The amount of sulphate emitted from titanium dioxide production was below the limit value (the limit
value is 550 kg/t TiO₂ according to the OVD or the TiO₂ Regulation and BAT).
Based on monitoring conducted in 2025, no exceedances of sulphate levels or other substance
concentrations were detected in the wastewater.
Data collection and calculation process
The data presented in the table above is calculated manually based on available data obtained
through measurement and is subject to the measurement uncertainty specified in the measurement.
Measurements determine pollutant concentrations, which are converted into annual quantities based
on the volume of discharged wastewater measured (measurement uncertainty) for the reporting
year. Specific measurements are performed 12 times a year under operating conditions, and it is
assumed that such concentrations remain consistent throughout the year; therefore, certain metrics
are partially based on estimates. Specific emissions are also calculated based on the volume of
product produced, which is measured.
Each year, the Company reports on emissions of substances that exceed the reporting thresholds
(threshold quantities) set by the European Pollutant Release and Transfer Register (E-PRTR)
Regulation. In 2025, none of the quantities exceed the reporting threshold under the aforementioned
regulation at either production site.
149
5.2.3.5.3 Groundwater (soil) pollution
Groundwater contamination is a significant environmental challenge that we address with great care.
When assessing the risk of soil and groundwater contamination, we take into account various factors,
such as the properties of hazardous substances, the quantity of substances stored or used, and the
facility’s location. In accordance with the Environmental Protection Act, we are operators of activities
and facilities that may cause large-scale environmental pollution. In 2023, we prepared and
submitted to the Ministry of the Environment, Climate and Energy an assessment of pollution risks,
a partial baseline report with a draft proposal for a soil condition operational monitoring programme,
and a draft proposal for a groundwater operational monitoring programme, in accordance with the
requirements of the IED Regulation (Regulation on the types of activities and facilities causing
industrial emissions (Official Journal of the Republic of Slovenia, No 68/22)). The partial baseline
report specifies sampling points for soil and groundwater. In 2024, we conducted sampling and
analyses at these points and supplemented the aforementioned documentation with the results of
these baseline measurements. The monitoring programme was approved by the Ministry of the
Environment, Climate and Energy (MOPE) in 2025. In accordance with the amendment to the OVD,
we will begin operational monitoring of soil in 2029 and groundwater in 2027. Monitoring will be
conducted every 3 years for groundwater and every 5 years for soil, taking into account the baseline
conditions in the first year of measurement (2024). Assessing the potential for soil and groundwater
contamination is an important step in risk assessment and pollution prevention. Our goal is to ensure
that the condition of soil and groundwater does not deteriorate and that we remain within legal limits.
Should monitoring results indicate a deterioration in condition, we will take additional measures and
report on them.
At the Celje site, at the Za Travnik and Bukovžlak waste treatment facilities, and at the
Bukovžlak Non-Hazardous Waste Landfill, we are conducting groundwater monitoring in
accordance with the environmental permit. It has been determined that the Bukovžlak Non-
Hazardous Waste Landfill has an impact on groundwater. In addition to regular groundwater
monitoring, work is also underway as part of the Bukovžlak Non-Hazardous Waste Landfill
Reconstruction Project, which will reduce this impact. The work is expected to be completed in 2029.
We monitor the impact on organisms in watercourses through regular surface water monitoring at
the Celje site. Monitoring is conducted on three watercourses where the impact of our own operations
is assessed, namely the Hudinja, Vzhodna Ložnica, and Dobje watercourses. We monitor hydrological
conditions, a comprehensive set of chemical parameters in the water, a specific set of chemical
parameters in the sediment, and living organisms.
We monitor the safety of high-embankment barriers through regular technical inspections and
maintenance work, and we conduct seismic monitoring at the Bukovžlak site.
5.2.3.5.4 Microplastics
During the reporting period, the Company did not use microplastics as intentionally added raw
materials in its production processes, nor did it incorporate them into its products. Based on available
data, the Company does not identify any significant generation of microplastics that would leave its
facilities as an emission, a product, or a component of a product. The Company does not currently
assess the potential unintentional generation of microplastics due to the wear and tear of materials
or equipment as a significant environmental impact.
150
5.2.3.5.5 Compliance and standards
In the area of pollution, we operate in accordance with legal requirements (E-RIPO, IED, etc.) and
environmental permits. We also comply with BREF requirements and BAT conclusions. We conduct
regular operational monitoring (continuous and periodic measurements) and report on the results.
Over the past five years or more, the Company has not received any fines for non-compliance with
environmental laws and regulations. However, in 2025, two corrective orders were issued to address
non-compliance (one related to the IED and one related to a major accident hazard). In accordance
with the IED (Industrial Emissions Directive, 2010/75/EU), which regulates the prevention and
reduction of environmental pollution from industrial activities, the Company is classified under the
following activities: 4.2b, 4.2e, 4.4, and for these, it also ensures compliance with BAT.
5.2.3.6 [E2-5] Substances of concern and substances of very high
concern
The Company ensures that the use and manufacture of hazardous chemicals comply with the REACH
Regulation (Regulation (EC) No 1907/2006 concerning the Registration, Evaluation, Authorisation,
and Restriction of Chemicals) and the CLP Regulation (Regulation (EC) No 1272/2008 on
classification, labelling, and packaging of substances and mixtures), which is based on the Globally
Harmonised System (GHS).
Substances of concern (SoC) and substances of very high concern (SVHC) are also used in production
processes and in the maintenance of such processes. SoCs meet the criteria set out in Article 57 and
are identified in accordance with Article 59(1) of Regulation (EC) No 1907/2006 of the European
Parliament and of the Council (35).
SVHCs meet the criteria set out in Article 57 of Regulation (EC) No 1907/2006 (REACH) and are
identified in accordance with Article 59(1) of that Regulation. These are carcinogenic, mutagenic, or
toxic to reproduction—CMR for short—as well as substances that are persistent, bioaccumulative,
and toxic (PBT), or substances that are very persistent and very bioaccumulative (vPvB).
SoCs and SVHCs are used for maintenance purposes, in the preparation of water for steam
production, and as raw materials that remain part of the manufactured products or are released into
the environment as emissions. Hazardous substances used for maintenance include cleaning agents,
antifreeze fluids, lubricants, solvents, thinners, hardeners, lubricants, and oils for metal treatment
or protection.
The proportion of SoCs remaining as part of the product is 722 t, or 74% of all SoCs used. 20% are
used for maintenance or as fuel. The proportion of SVHCs remaining as part of the product is 0.62 t,
or 31%. No product on its own falls into the SVHC category. The proportion of SVHCs released from
the facility as emissions to water is 10%.
Table 74 shows a correction and the difference regarding the use of SoCs and SVHCs for 2024. The
error arose during the manual calculation of the quantities that are part of the product and part of
the emissions, as the system for data collection and calculation had not yet been set up.
The hazard classes and hazard statements required by the Appendix to the Delegated Regulation of
the European Commission supplementing Directive 2013/34/EU are shown in Table 73.
151
Table 73: List of required H statements that must be taken into account when compiling information relevant to disclosure
Hazard class
Related hazard statements
Health hazards – carcinogenicity, mutagenicity, reproductive toxicity
(CRM), Categories 1A and 1B, Category 2
H350, H360FD, H360F, H360D, H360Fd, H361d,
H351, H341, H361, H361f, H361d, H361fd
Specific target organ toxicity – single or repeated exposure,
Categories 1 and 2
H371, H372, H373
Respiratory sensitisation, Category 1
Skin sensitisation, Category 1
H317, H334
Hazardous to the aquatic environment – chronic hazard, Categories
1 to 4
H400, H410, H411, H412
The properties and quantities of SoCs and SVHCs used in manufacturing and support processes are
compiled from an internal data collection system recorded in the Oracle software. The values are
accurate and have not been verified by external experts.
Table 74: Quantities of substances of concern and substances of very high concern for 2024 and 2025
SoC (t)
SVHC (t)
2024
2025
2024
2025
Correction
for 2024
Correction
for 2024
Total quantity of substances
purchased or used during production
983
835
981
3.0
1.65
1.97
Total quantity of substances leaving
the site as emissions, as products, or
as part of products
975
800
789
2.7
1.64
1.965
Quantity of substances leaving the
site as emissions
82
75
67
0.3
0.21
0.18
Quantity of substances leaving the
site as part of products
893
725
721
2.4
1.42
1.785
The breakdown of chemical consumption/use by business unit is such that the majority is attributed
to two key business units, with the remainder distributed among three smaller units. The business
units Kemija Celje and TiO₂ account for the largest share, each representing approximately 40–45%.
The remaining share, i.e., approximately 10–15%, is distributed among the business units
Maintenance and Energy, Kemija Mozirje, and Polimeri.
Table 75: Overview of substances of very high concern used in 2024 and 2025
Hazard class
Substance
Quantity of SVHCs that leave the
facilities as emissions,
products, or part of products.
(t)
2024
2025
Carcinogenicity
(Article 57a of the REACH Regulation)
Hydrazine
0.34
0.18
Toxic to reproduction (Article 57c of the REACH Regulation)
Borax decahydrate
1.20
1.20
4,4'-isopropylidenediphenol
(Bisphenol A)
1.44
0.042
2-Butanone oxime
0.003
0.00
N-methyl-2-pyrrolidone
0,02
0.023
Lead tetroxide
/
0.54
For the reporting period, the Company does not disclose a breakdown of quantities by hazard class
for the following reasons, which relate to data availability and, above all, reliability:
• We track data at the level of chemical quantities purchased and consumed (materials, raw
materials, and products);
152
• Some of the chemicals we use are mixtures classified under multiple H-statements and,
consequently, multiple hazard classes, which could result in double counting (the same
quantity would appear in multiple classes);
• We do not keep records at the level of individual substances in a chemical and their
proportions, so we cannot accurately calculate quantities by hazard class.
Due to the aforementioned methodological and systemic limitations, the Company is unable to
provide a reliable and unambiguous breakdown of quantities by individual hazard classes for the
reporting period. Disclosure would entail a risk of inaccuracy and double counting to such an extent
that we do not report such data in accordance with ESRS BP-2. The Company will gradually explore
options for improving the traceability of hazardous substances, particularly in connection with the
upgrading of information systems and the evolution of supply chain requirements, while
implementing improvements only to the extent justified by actual environmental risks, data
availability, and the practicality of additional system requirements.
In 2024, with the aim of reducing negative impacts, the Company began phasing out certain SVHCs
wherever possible. These measures include discontinuing products containing SVHCs or replacing
such substances with alternatives that are less harmful to the environment. As part of these
activities, the Company discontinued the procurement of chemicals containing borax decahydrate
and some chemicals containing bisphenol A. In 2025, the last remaining stock of chemicals containing
borax decahydrate was used up.
5.2.3.7 [E2-6] Anticipated financial effects from material pollution-
related risks and opportunities
Table 76: Anticipated financial effects from material pollution-related risks and opportunities
Short-term
2024
Medium-term
2028
Long-term
2030
Percentage of net revenues from products and services that
are or contain substances of concern
43 %
47 %
47%
Percentage of net revenues from products and services that
are or contain substances of very high concern
0.6 %
0.5 %
0.4%
Table 77: Calculation of the percentage of net revenue for products containing SoCs
Period
2024
2025
2028*
Correction for
2024
Company's net revenue (EUR)
200,285,413
200,285,413
198,801,240
262,678,089
Revenue from products containing substances of
concern (SoC) (EUR)
87,387,455
116,258,956
104,459,757
123,458,701
Proportion (%)
43.6
57.6
52.5
47.0
*estimated values
Table 78: Calculation of the percentage of net revenue for products containing SVHCs
Period
2024
2025
2028*
Company's net revenue (EUR)
200,285,413
198,801,240
262,678,089
Revenue from products containing substances of
very high concern (SVHC) (EUR)
1,275,169
754,087
1,313,390
Proportion (%)
0.6
0.4
0.5
*estimated values
Table 77 shows a correction to the revenue from products containing SoCs for 2024. The error
occurred because the system’s data capture was incorrect, which in turn led to an incorrect
calculation.
153
The calculation of the percentage of net revenue for the medium-term period is in line with the
strategy for the 2024–2028 period. For the long-term period, specifically the year 2030, we currently
have only an estimate that the share will be 47% for SoCs and 0.4% for SVHCs.
We identified potential financial risks associated with regulatory changes. Stricter regulations on the
use of substances of concern and substances of very high concern could lead to increased compliance
costs. However, we have not specifically set aside funds for this, as they do not have a material
impact on covering potential remediation and adjustment costs over the next three years.
Our financial forecasts are based on current market trends, the regulatory environment, and
technological advancements. We are aware that there is a degree of uncertainty in these
assumptions, particularly regarding future regulatory changes and technological innovations. The
Company is committed to regularly reviewing and adjusting our financial estimates to reflect the
latest information and ensure the resilience of its business model.
Our share of net revenue generated from products and services containing substances of concern
and substances of very high concern was 52.5% and 0.4%, respectively, in the reporting period.
During the period in question, the Company did not make any investments in current or fixed assets
related to major incidents or deposits.
The Company also has no provisions set aside for environmental protection costs and remedial
measures, for the remediation of contaminated sites, the remediation of landfills, or the removal of
environmental contamination at existing production or storage sites.
The calculations were based on the definitions of SoCs and SVHCs for the chemicals used and
manufactured. We identified SoCs and SVHCs based on the suppliers’ safety data sheets, which
comply with EU and Slovenian legislation. However, there is uncertainty regarding future legislative
changes, such as updates to the candidate list for SVHCs, restrictions on use, and new technological
insights regarding the substances used. During the reporting period, the metric was not additionally
verified by an external body. Where monetary units are used, we report in EUR, which is the
presentation currency of the financial statements.
154
5.2.4 [E3] Water resources
5.2.4.1 [IRO-1] Description of the process to identify and assess
material impacts, risks, and opportunities related to water
resources
Water is a vital resource, and we are committed to its responsible management throughout
the entire cycle—from extraction at the source to the discharge of treated wastewater
back into the natural environment. For our production processes at the Celje site, we utilise
process water sourced through the abstraction of surface water from the local watercourse and
groundwater. Potable water is used for sanitary purposes and for production processes at our Mozirje
facility. Following a comprehensive identification and assessment of impacts, risks, and opportunities
conducted in 2024, the abstraction of surface water was identified as a material sub-topic.
In 2025, as part of our regular annual DMA review, we verified and updated the assessment of
material impacts, risks, and opportunities prepared in the previous year. The review focused on
validating the continued relevance of the 2024 findings against current data and available analyses.
The results confirm that the abstraction site is not situated in an area of high-water stress, does not
directly impact the public water supply, and is not located within Natura 2000 protected areas. The
2025 impact assessment also incorporated water monitoring results, environmental status data,
legislative compliance audits, and other available metrics. A detailed review of the value chain was
not undertaken; however, key suppliers located in areas of medium or low water stress continue to
implement measures to manage these risks.
Subject-matter experts were involved in the DMA review process, as stipulated by our internal policy.
No new consultations with other key stakeholders, including affected groups (which encompasses
the local community), were conducted (see section S3). We continued our value chain due diligence;
however, the scope of this review was not significantly expanded in 2025. A comprehensive
expansion of the review is planned for future years, in line with our three-year cycle for conducting
full-scale DMA assessments.
The identification and assessment process for impacts, risks, and opportunities is described in further
detail in section ESRS 2 [SBM-3].
As noted above, the Company requires significant volumes of water for its production processes.
Water abstraction from the adjacent watercourse can adversely affect the environment; specifically,
during prolonged drought, it may further lower water levels, potentially impacting the ecosystem in
the long term. These drought periods are becoming increasingly frequent due to climate change,
which presents a significant risk to the Company: abstraction must cease if river flow drops below
the statutory ecological minimum defined in our water permit. Such an interruption would necessitate
the immediate suspension of titanium dioxide production, the Company’s core product. In the short
term, this water source can be supplemented with potable water.
Following use in our technological processes, wastewater is treated at our on-site facilities before
being discharged into the watercourse, containing residual pollutants (specifically, sulphate
discharges). This impacts the water quality of the receiving watercourse, which is a recognised impact
under Pollution (E2). The outcomes of our IRO identification are presented in Table 79.
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Table 79: Significant impacts, risks, and opportunities (IRO) for the E3 area
Material impacts, risks and/or
opportunities
Category
Location/Value chain
Time horizon
Own operations
Downstream value
chain
Upstream value
chain
Short-term
Medium
-term
Long-term
Water abstraction from the river
(reduction of water levels)
Actual negative impact
x
x
x
Discharges into rivers - sulphate
Actual negative impact
x
x
Reduced production capacity due to
limited water supply for technological
purposes during drought
Risk (physical)
x
x
5.2.4.2 [E3-1] Water resource policies
Table 80: Key policies for managing significant impacts related to water resources
Policy title
Summary of key content
Accountability
Alignment with
external standards &
initiatives
Stakeholder
engagement & scope
Accessibility
Quality,
environmental
, health and
safety, and
energy
management
policy
Sets out key strategic objectives
for resource use and responsible
water management. Focuses on
reducing natural water
consumption, implementing
wastewater reuse, mitigating
water pollution, and identifying
environmental risks to prevent
harm to the environment and
human health. Committed to
strict compliance with legal
requirements
Management
Board,
employees
ISO 9001 (Quality
Management System),
ISO 14001
(Environmental
Management System),
ISO 45001
(Occupational safety
and Health
Management System)
ISO 50001 (Energy
Management System)
In developing the
Quality, Environmental,
Health & Safety, and
Energy Management
Policy, the Company
considered the interests
of key stakeholders,
including employees,
business partners, the
local community, and
regulatory bodies. The
policy applies to own
operations.
www.cinkarna.si
Pollution
prevention,
sustainable
water use,
biodiversity,
and circular
economy
policy
Defines the Company’s
commitment to pollution
prevention. Aims to mitigate
negative environmental impacts,
improve resource efficiency, and
ensure compliance with
legislation and Best Available
Techniques (BAT). Applies to
own operations.
Head of
sustainability
team,
Management
Board,
employees
ISO 14001
(Environmental
Management System),
In preparing the Pollution
Prevention, Sustainable
Water Use, Biodiversity,
and Circular Economy
Policy, the Company
considered the interests
of key stakeholders,
including employees,
business partners, the
local community, and
regulatory bodies. The
policy applies to own
operations.
Document
management
system
The pollution prevention, sustainable water use, biodiversity, and circular economy policy addresses
the IROs outlined in the 'Material Impacts, Risks, and Opportunities (IRO) for Area E3' table. It sets
specific objectives for preventing water pollution (sulphate discharges), managing water resources
(reducing river water abstraction), and mitigating risks associated with limited water supply during
drought periods. s cilji preprečevanja onesnaževanja vode (izpusti − sulfati), upravljanje z vodnimi
viri (zmanjšanje porabe vode iz reke) in obvladovanje tveganj (omejene dobave vode zaradi sušnih
obdobij).
156
5.2.4.3 [E3-2] Actions and resources related to water resources
In 2024, the Company finalised a revised strategy incorporating specific measures and resources
dedicated to addressing critical water resource management issues. Our strategic focus is on
minimising reliance on natural water sources, enhancing wastewater treatment
processes, and advancing water circularity. The Company actively participates in a collective
initiative for sustainable water management and the mitigation of environmental impacts on water
bodies. The initiative is underpinned by robust partnerships with key stakeholders, including local
communities, municipal utility providers, and government institutions. A notable example is the
project involving the reuse of industrial water from the Tremerje Central Wastewater Treatment Plant
(WWTP), conducted in partnership with the Tremerje WWTP and the Municipality of Celje. Currently,
treated water from this facility is discharged into the Savinja River. By repurposing this water, the
Company expects to effectively eliminate fresh water extraction from the Hudinja river, reserving
such extraction solely for maintenance periods when the WWTP discharge to the Savinja is
suspended. This measure not only mitigates water scarcity risks but also improves the ecological
status of the stream. Similar positive outcomes are expected from the implementation of internal
recycling and water reuse systems.
Table 81: Water resource conservation measures and key activities  
Type of measure and key activity 
Year 
Expected savings (water
consumption/ t TiO2) 
Status
Introduction of internal water recycling, reducing
specific consumption of freshwater per tonne of product and
thereby reducing the consumption of freshwater in TiO2 production,
or lowering total extraction from
the Hudinja river.
Recycling of BNVT for the preparation of limestone powder
Preparation of lime slurry
2026*
2026*
2026*
  
40 m
3
/h
5 m
3
/t TiO2
350,400 m
3
/year
In progress
In progress
In progress
Returning overflow water from Bukovžlak
2028
40 m
3
/h
5 m
3
/t TiO2
350,400 m
3
/year
In progress
Utilisation of industrial water from the Tremerje WWTP, replacing
natural sources from the Hudinja river
Post-2028
Substantial replacement of
the natural resource
Project preparation
*Activities not completed in 2025 are continuing into 2026
5.2.4.4 [E3-3] Targets related to water resources
The Company has established short, medium, and long-term targets to address identified negative
impacts and risks regarding water management. These voluntary commitments are of strategic
importance for ensuring long-term water security, maintaining uninterrupted production, adapting
to climate change, and promoting circularity. Targets related to water discharges are detailed in
section [E2-3] Targets related to pollution.
Strategic objectives include:
1. Reducing freshwater abstraction (withdrawal) from the Hudinja river.
2. Improving the efficiency of process water consumption.
To achieve these strategic goals, the following specific and measurable targets have been set:
• Substantial reduction in water extraction from the Hudinja river through the utilisation of
treated wastewater from the Tremerje WWTP after 2028;
• 20% reduction in process water consumption by 2028, against a 2021 baseline.
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5.2.4.4.1 Sustainable value chain
The Company actively manages its impacts throughout the value chain, with particular attention to
water use and the protection of water resources. It works closely with suppliers, service providers
and other business partners. In its upstream and downstream value chain engagements, the
Company endeavours to ensure that its partners:
• Conduct their activities in accordance with the Company's Code of sustainable business
practices;
• Implement processes that support responsible water use, contribute to the reduction of
overall water consumption and improve the quality of effluents.
To ensure sustainable management and compliance with the company's goals, mechanisms have
been established that include:
• Quarterly monitoring of key indicators related to water withdrawal, emissions to water, and
risk management;
• Annual review of progress against targets as part of the annual management review;
• Due diligence - a comprehensive review of impacts, risks, and opportunities within the value
chain, assessing both actual and potential impacts alongside the adequacy of mitigation
measures.
On the basis of monitoring and due diligence findings, the Company implements supplementary
actions and explores further improvement opportunities in collaboration with its suppliers. These
efforts aim to reduce the burden on water resources and secure long-term sustainability.
5.2.4.5 [E3-4] Water consumption
For process purposes in its production activities, the Company abstracts surface water from the
nearby Hudinja watercourse and groundwater from three springs at the Za Travnik waste disposal
facility. Water abstractions for the Company’s own operations take place in an area of low water
stress.
Abstraction volumes are monitored via inlet flow meters, which are regularly certified by an external
public water infrastructure operator to ensure third-party verification of measurements. Water
pumped from the Hudinja river is monitored using internal flow meters subject to regular calibration
by authorised contractors. Discharge meters, where continuous measurement is mandated, are
verified and certified by an external accredited body.
Potable water is used for sanitary purposes and, in part, for process requirements; this consumption
is also monitored as described above.
The total volume of water withdrawn equals the sum of abstractions from watercourses, groundwater
and water supplied from the public mains. The total volume of water discharged comprises process
wastewater discharged at the Company’s individual outfalls (larger volumes measured, smaller
volumes estimated), municipal wastewater and, to a limited extent, stormwater that cannot be
separated and flows through the effluent system. Water consumption is calculated as the difference
between the total volume of water withdrawn and the volume of water discharged (the Company
does not store water and therefore does not account for it as inventory).
The Company does engage in water recycling and reuse; however, these volumes are not currently
monitored with a degree of reliability suitable for external reporting. Phased measures are being
implemented to establish sufficiently reliable data in the future (expected within the next five years).
The Company does not store water.
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Table 82: Water consumption and wastewater discharge – own operations, 2024 and 2025*
Unit
2024
2025
Total water withdrawal
m³
2,741,087
2,815,420
Water stored
m³
0
0
Total water discharged
m³
2,589,330
2,450,252
Water consumption
m³
181,857
405,168
Water intensity
m
3
/ EUR million of revenue
908
2038
* Aggregate figures for the Celje and Mozirje sites
Data collection and calculation methodology
The data presented in the tables above was manually compiled based on a combination of direct
measurements and assessments, both of which are subject to inherent measurement uncertainty.
Water abstraction volumes are determined through inlet metering or utility billing. Effluent discharge
volumes are partially determined via metering at primary outfalls, while volumes for minor discharge
points are estimated. As internal water recirculation is not currently metered or assessed to a
satisfactory standard, these volumes have been excluded from the reporting scope. Water
consumption is calculated as the difference between total abstraction and total discharge. We
acknowledge that these figures are subject to additional uncertainty due to the incomplete tracking
of internal recirculation and the inclusion of unquantified stormwater runoff. This runoff, which
collects on facility surfaces and enters the effluent system, contributes to total discharge volumes
but is not separately metered or independently valued.
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5.2.5 [E5] Resource use and circular economy
5.2.5.1 [IRO-1] Description of the process to identify and assess
material impacts, risks and opportunities related to resource
use and circular economy
The identification and assessment of impacts, risks, and opportunities (IROs) are conducted as part
of our due diligence process. This involves reviewing value chain impacts through interviews and an
analysis of publicly available data and reports. In 2024, due diligence focused on our primary TiO₂
value chain (both upstream and downstream); no material issues under the E5 standard were
identified at that time. In 2025, an annual double materiality assessment was performed. A detailed
description of all identified IROs is provided in section ESRS 2 [SBM-3]. From 2025 onwards, the
Company will progressively expand the scope of its due diligence processes. This will enable the
collection of comprehensive data required for the accurate assessment of actual and potential
negative impacts, as well as risks and opportunities.
Resource efficiency and the circular economy have been identified as material topics within the
Company’s own operations. This necessitates a comprehensive approach and the implementation of
measures across various levels, encompassing impact assessments, the identification of risks and
opportunities, regulatory compliance, the introduction of technological upgrades, and awareness-
raising initiatives. The Company identified waste management in its own operations as a material
impact. A review of impacts within the value chain did not identify any material IROs.
In accordance with our waste management plans, the Company adheres to the waste hierarchy
where technically feasible. We prioritise waste prevention, source separation, reuse, and the
recycling of industrial waste and packaging. Furthermore, we collaborate with partners to
maximise the circularity or energy recovery of these materials.
The generation of non-hazardous red gypsum, arising from the production of titanium dioxide, has
been identified as the Company’s most significant impact. The quantity of this waste represents more
than 95% of all waste generated in the Company. The aforementioned non-hazardous waste is
landfilled or dry-filled at our own waste disposal facility Za Travnik. Landfilling creates a direct impact
on the environment – primarily due to sulphates in the overflow waters discharged from the facility
(detailed in E2‑IRO1 and E2‑4). A potential environmental and public health impact could arise from
an accident involving the failure of the containment embankments behind which red gypsum is
currently backfilled or was disposed of in the past. Furthermore, these waste disposal facilities
indirectly affect the quality of life within the local community due to their proximity to residential
areas—a social impact (detailed further in section S3-SBM3).
The principal risk identified relates to the finite disposal capacity for red gypsum. The successful
completion of backfilling operations at the Za Travnik and Bukovžlak facilities is critical to mitigating
the risk of non-delivery of the Company’s strategic objectives.
In 2025, the Company identified a significant new opportunity following the development of a process
to extract and recover TiO₂ from 23% spent sulphuric acid—previously treated as a waste stream
within the production process. This initiative not only reduces the volume of red gypsum sent for
disposal but also generates added value, as the recovered TiO₂ is no longer classified as waste, but
as a marketable product of equivalent quality and value to that of our standard production.
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Table 83: Significant impacts, risks, and opportunities (IRO) for the E5
Material impacts, risks
and/or opportunities
Category
Location/Value chain
Time horizon
Own
operations
Downstream
value chain
Upstream
value chain
Short-term
Medium
-term
Long-term
Waste: red gypsum backfilling
Actual negative
impact
X
x
Operational risks due to
constrained red gypsum
disposal capacity
Risk
X
x
Waste: TiO₂ recovery from
23% spent acid
Positive impact
X
x
Waste reduction and product
recovery with lower full
production costs
Opportunity
X
x
5.2.5.2 [E5-1] Policies related to circular economy
Table 84: Key policies for managing significant impacts related to the circular economy
Policy title
Summary of key content
Accountability
Alignment with
external standards &
initiatives
Stakeholder engagement
& scope
Accessibility
Quality,
Environmental,
Health & Safety,
and Energy
Policy
Outlines the achievement of
key strategic objectives
regarding waste management.
The policy aims to mitigate
environmental impacts through
enhanced waste management
and the monitoring of product
Life Cycle Assessments
(LCAs).
Management
Board,
employees
ISO 9001 (Quality
Management
System),
ISO 14001
(Environmental
Management
System),
ISO 45001
(Occupational
Safety and Health
Management
System)
ISO 50001
(Energy
Management
System)
In formulating the
Quality, Environmental,
Health & Safety, and
Energy Policy, the
Company considered
the interests of key
stakeholders—including
employees, business
partners, the local
community, and
regulatory bodies. This
policy applies to own
operations.
www.cinkarna.si
Pollution
Prevention,
Sustainable
Water Use,
Biodiversity, and
Circular Economy
Policy
Defines the Company’s
commitment to pollution
prevention. Objectives include
reducing environmental
footprints, enhancing resource
efficiency, and ensuring
compliance with legislation and
Best Available Techniques
(BAT).
Sustainability
Team Leader;
Management
Board,
employees
ISO 14001
(Environmental
Management
System),
In preparing the Pollution
Prevention, Sustainable
Water Use, Biodiversity,
and Circular Economy
Policy, the Company
accounted for the
interests of key
stakeholders, such as
employees, business
partners, the local
community, and
regulatory bodies. This
policy applies to own
operations.
Document
management
system
Code of
sustainable
business
practices for
business
partners.
The Code incorporates the
core principles of sustainable
raw material sourcing,
mandating that business
partners ensure the economical
use of natural resources,
prioritise renewable energy and
materials wherever feasible,
and prevent the use of
materials from unknown or illicit
origins. Furthermore, it
Procurement &
Logistics
Director;
Management
Board; Sales
and
Procurement
staff
Code of Ethics of the
Purchasing
Association of
Slovenia
The Code reflects a
balanced approach that
enables effective
engagement with all
stakeholders and
promotes long-term,
sustainable, and ethical
procurement practices
across the value chain.
Document
management
system
Business partners
161
stipulates the exclusion of
conflict minerals and bolsters
responsible conduct throughout
the supply chain. These
expectations establish a
minimum framework for
sustainable sourcing and
complement the Company’s
internal environmental policies.
The Company utilises its policy framework to govern waste management, resource efficiency,
pollution prevention, and compliance with both legislation and Best Available Techniques (BAT). It is
progressively reducing its dependency on primary raw materials by increasing the integration of
secondary materials—for example, through the use of recycled copper and the active pursuit of
additional secondary raw material sources. These approaches enhance the proportion of circular
materials used and reduce primary resource consumption.
Elements of sustainable sourcing are also embedded in the Code of sustainable business practices
for business partners, which is binding for the entire supply chain. The Code sets out requirements
for the economical and sustainable use of natural resources, gives preference to the use of renewable
materials and energy where possible, and requires the exclusion of materials of unknown origin,
conflict minerals, and materials from illegal sources.
In 2024, the Company’s sustainability strategy established targets and actions for waste reduction
and circular economy initiatives, alongside measures to mitigate associated risks. In 2025, the
Company formalised the Pollution Prevention, Sustainable Water Use, Biodiversity, and Circular
Economy Policy to strengthen the management of resource use and circularity. The aforementioned
policy, in conjunction with the Quality, Environmental, Health & Safety, and Energy Management
Policy, addresses the IROs identified in Table 81: Material impacts, risks and opportunities (IRO) for
E5, through objectives focused on reducing waste generation, decreasing the consumption of primary
raw materials, increasing the use of secondary raw materials or recycled materials, managing waste
to enable circular material flows, and fostering awareness and technological innovation in the field
of resource use and the circular economy.
In accordance with its waste management plans, the Company focuses on the application of Best
Available Techniques (BAT) to ensure efficient resource use, maximise the use of recycled materials,
and recover waste. It strictly adheres to the waste hierarchy, which prioritises prevention,
preparation for reuse, recycling, other recovery operations, and the minimisation of disposal as a
last resort.
Whilst the Company’s internal policies primarily focus on own operations and do not encompass all
circular economy risks within the value chain, the Company mandates that its business partners
adhere to the sustainability principles outlined in the Code of sustainable business practices. These
expectations include the economical and sustainable use of natural resources, the efficient reduction
of raw material consumption, the minimisation of waste, and the active promotion of recycling and
material reuse.
5.2.5.3 [E5-2] Actions and resources related to resource use and
circular economy
The Company’s initiatives concerning resource efficiency and the circular economy are aimed at
meeting stringent environmental requirements and achieving sustainable development goals. The
Company strives to reduce waste disposal and strengthen circularity within its operations, focusing
on the impacts its activities have on the environment and affected communities. Key to this approach
162
is increasing the generation of by-products—thereby reducing waste—and identifying new
opportunities for the reuse of production waste. Two essential by-products, red gypsum (RCGIPS)
and white gypsum (CEGIPS), are particularly significant in TiO₂ production. White gypsum is utilised
in the construction industry, while red gypsum is used for the dry backfilling of the waste disposal
facility. Furthermore, the Company has defined specific actions and key activities to reduce the
volume of red gypsum sent for backfilling.
Table 85: Actions and key activities to reduce red gypsum backfilling at Cinkarna Celje until 2030
Strategic goal
Type of actions and key
activities 
Year 
Emissions
(air/water/land) 
Anticipated
reduction (t) 
Status
Reduction of red gypsum
generation
Increasing CEGIPS
production (additional
centrifugation for gypsum
isolation)
2028 
land
Reduction by approx.
25,000
In progress
Reduction of red gypsum
generation
Recovery of 23% spent acid
– TiO₂ isolation and
recycling
2030
land
Reduction by approx.
2,000
In progress
The Company is also implementing measures to mitigate identified risks associated with the finite
disposal capacity for gypsum (dry backfilling). Additional activities are focused on improving the
waste management system, including increasing reuse, expanding recycling capabilities, recovering
waste into usable materials, and increasing the use of secondary raw materials. These actions aim
to reduce the consumption of primary resources and ensure maximum material circularity (e.g., the
use of waste copper and other waste streams). All measures are monitored within the framework of
the integrated management system.
5.2.5.4 [E5-3] Targets related to resource use and circular economy
The Company’s targets regarding resource use and the circular economy are designed to enhance
the circular design of production processes and material flows. In this context, the Company focuses
on waste prevention at the process design stage, increasing material reuse and recovery, and
transforming by-products and waste into value-added secondary raw materials.
The Company voluntarily sets targets for resource use and the circular economy to improve process
efficiency, reduce waste generation, and minimise environmental impact. To this end, maintaining a
comprehensive understanding of material and waste flows for each specific business activity is
essential.
Resource use and circular economy objectives include:
• Reducing waste generation;
• Decreasing the consumption of primary raw materials while increasing the use of secondary
raw materials and recycled materials;
• Implementing waste management practices to enable circular material flows;
• Fostering awareness and technological innovation in the fields of resource efficiency and the
circular economy.
The Company’s primary strategic target is a 14% reduction in red gypsum generation by 2030,
measured against a 2021 baseline. This objective is intrinsically linked to the circular design of
production processes, driven by the re-engineering of material flows and the development of
technological solutions to repurpose red gypsum and other waste streams into value-added
secondary raw materials. By addressing these factors at the design stage, the Company reduces its
reliance on waste disposal—the least preferred tier of the waste hierarchy. The Company already
integrates selected secondary raw materials (e.g., recycled copper compounds) into its operations
and actively evaluates new secondary material sources wherever technologically feasible.
163
Within the scope of E5, the Company has identified one taxonomy-eligible activity: the production
and sale of white gypsum (CEGIPS). This is disclosed in the Taxonomy Report under "Collection and
transport of non-hazardous waste" (CE 2.3). The activity meets the Substantial Contribution (SC)
criteria for the transition to a circular economy by facilitating the reuse of secondary materials,
reducing disposal volumes, and displacing primary raw materials in the construction sector.
Furthermore, the activity meets all "Do No Significant Harm" (DNSH) criteria; it presents no adverse
impact on water, air, or soil, and operates in full compliance with the Industrial Emissions Directive
(IED), SEVESO requirements, and internal environmental control systems. Current projects focused
on the valorisation and processing of red gypsum contribute significantly to circular economy goals.
Although these initiatives are not yet disclosed as taxonomy-aligned for 2025, they strictly adhere
to circular principles regarding material reuse, disposal reduction, and the development of secondary
raw material streams.
5.2.5.5 [E5-4] Resource inflows
The Company incorporates recycled materials into its production processes wherever feasible. The
volume of recycled input materials utilised is contingent upon production output, material availability,
and the comparative pricing of alternative raw materials.
Specific initiatives are underway to increase the proportion of recycled content within the
agro-product portfolio, where copper is the primary raw material. For this purpose, the
Company utilises 100% recycled copper. Furthermore, spent etchant is also employed as an input.
The Company holds the requisite waste recovery permits for these substances and continuously
evaluates new sources of waste-based raw materials.
Table 86: Used recycled input materials in 2024 and 2025 in kilograms at the Celje site
Material consumption (kg)
2024
2025
For recovery under R_05 (non-hazardous)
950,316
675,286
For recovery under R_05 (hazardous)
165,379
195,160
Total
1,115,695
870,446
Recycled material content in %
53.4
52.54
R5 – Recycling/reclamation of other inorganic materials
5.2.5.6 [E5-5] Resource outflows
The Company adheres to the five-tier waste hierarchy, prioritising efficient material management
and waste minimisation. Materials are recirculated into the production process or reused wherever
possible; any remaining waste is transferred to authorised collectors and processors for recovery or
disposal.
In alignment with circular economy targets (reducing waste generation and increasing reuse), the
Company implements measures and pursues improvement goals to decrease total waste volumes.
Operations follow a source-separation system. The Company holds recovery permits for specific
waste streams, enabling their reintroduction into production processes and the displacement
of primary natural resources with recovered materials.
The most significant proportion of disposed waste consists of gypsum, which is a specific byproduct
of titanium dioxide production. Two types are generated: red gypsum (RCEGIPS) and white gypsum
(CEGIPS), both chemically identified as calcium sulphate dihydrate (CaSO₄ ·2H₂O). Red gypsum has
a specific disposal status, as it is used for dry backfilling. The volume of red gypsum sent for disposal
is being reduced by increasing the recovery capacity of the white gypsum by-product. In 2025, 2.66
164
tonnes of white gypsum were isolated per tonne of titanium dioxide produced (specific white gypsum
yield). The preparation of technical documentation and the obtaining of the necessary building permit
for the construction of an additional centrifuge are currently underway; this investment will further
facilitate increased white gypsum recovery. Furthermore, yield optimisation procedures have been
implemented within TiO₂ production, and a red gypsum valorisation project is currently ongoing,
aimed at identifying alternative commercial applications.
Other key waste streams include packaging (plastic, paper, cardboard, and wood). Regarding
packaging, the Company is part of a packaging waste management scheme operated by an
authorised waste management company. This scheme involves the collection of all generated
packaging at the source and ensures that it is handled in compliance with current legislation and
required recycling targets. A significant portion of waste also arises from major overhauls (discarded
equipment, construction debris) and routine production activities.
Despite the implementation of numerous measures, waste generation cannot be entirely eliminated.
The hazardous and non-hazardous waste generated is separated at the source and primarily prepared
for recovery (under operations R3–R13) or disposal (under operations D1–D13). All hazardous waste
is transferred to authorised waste collectors. Similarly, any remaining source-separated non-
hazardous waste that is not recovered or disposed of by the Company itself is transferred to
authorised collectors.
Table 87: Total amount of production waste generated at the Celje and Mozirje sites in 2024 and 2025, in kilograms
2024
2025
Total waste generated (kg)
178,952,652
196,820,774
Total non-recycled waste (hazardous+ non-hazardous) (kg)
177,114,565
195,132,275
Percentage of non-recycled waste (hazardous + non-hazardous) (%)
98.97
99.14
Table 88: Waste (hazardous and non-hazardous) by type of treatment or recovery method for the Celje and Mozirje sites in 2024
and 2025
2024
2025
Hazardous waste (total) (kg)
76,010
116,516
Diverted from disposal
Preparation for reuse (kg)
0
4,413
Recycling (kg)
0
1,365
Other recovery operations (kg)
18,886
250
Directed to disposal
Incineration (kg)
0
43,267
Landfilling (kg)
8,960
0
Other disposal operations (kg)
48,164
67,221
Non-hazardous waste (total)(kg)
178,876,642
196,704,258
Diverted from disposal
Preparation for reuse (kg)
0
9,420
Recycling (kg)
955,720
939,920
Other recovery operations (kg)
863,481
733,131
Directed to disposal
Incineration (kg)
0
1,880
Landfilling* (kg)
177,018,420
194,927,420
Other disposal operations (kg)
39,021
92,487
* Landfill volumes include red gypsum used for dry backfilling at the Za Travnik facility (Waste code 06 11 01).
During the reporting period, the Company did not have key products or materials designed according
to circular product design principles. Given the nature of its core business—producing primary
chemical products—circularity is addressed at the level of production processes and material flow
management rather than product design. The Company approaches the circular economy through
material flow optimisation, waste reduction, increased recovery rates, and the development of
processes that reintegrate materials into the production cycle.
165
The process of collecting and calculating waste generation data may be a source of uncertainty,
primarily regarding disposal methods rather than total quantities. This uncertainty relates to the
information on treatment or disposal provided by authorised waste contractors following the
collection of the waste, as this data may be estimated based on the specific waste type. Data
regarding collected waste quantities and their allocation to various recovery operations is obtained
from these authorised contractors; therefore, the Company has limited influence over the accuracy
of such data. The volume of waste disposed of at the waste disposal facility is calculated based on
quantity and composition data, as well as measurements and estimates of the red gypsum
composition (specifically the moisture content remaining prior to dry backfilling).
In addition to red gypsum waste (calcium-based waste from titanium dioxide production), the
Company generates waste resulting from chemical activities (e.g., waste paints and varnishes,
discarded equipment, spent waxes, and emulsions) and packaging waste (paper, wood, metal,
plastic, and other packaging materials). Furthermore, waste arises from various construction and
maintenance activities (including construction debris, scrap metal, and insulation materials).
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5.3 [S] Social information
5.3.1 [S1] Own workforce
5.3.1.1 [SBM-3] Material impacts, risks and opportunities
At the end of 2025, the Company employed 726 people, who constitute its workforce and represent
a key pillar of its operations. The Company’s activities are based on the conviction that open dialogue,
employee engagement, and active listening to their needs contribute significantly to employee
satisfaction and corporate success. Focus is placed on ensuring a high-quality, safe, and inclusive
working environment. The workforce is structured across various organisational units in accordance
with the requirements of production and administrative processes. The majority of own employees
are employed under full-time contracts, which contributes to a sustainable personnel structure and
enables long-term human resource planning. Less than 6% of the workforce is engaged via
employment agencies; however, the Company ensures identical working conditions for all personnel,
regardless of their form of employment. The Company strives to create long-term employment
opportunities that provide employees with stability and career development.
Based on the double materiality analysis (DMA), several material aspects related to the own
workforce were identified:
• Two negative impacts;
• One positive impact;
• One material risk.
Actual and potential impacts on the workforce derive directly from the characteristics of the
Company's business model, which is based on highly regulated, complex chemical production. The
identified actual impacts include:
• Ensuring occupational safety and health – an actual negative impact due to potential risks
inherent in an industrial environment;
• Ensuring employee job satisfaction – a material actual negative impact arising from the
demanding nature of the work and organisational challenges;
• Ensuring job security – an actual positive impact, as the Company provides long-term
stability for its employees.
In addition to these actual impacts, a significant risk affecting the workforce was identified
concerning:
• Underdeveloped succession policy and competency gaps; this represents a threat to the
retention of critical knowledge and the capacity for intergenerational knowledge transfer.
Both the actual impacts and the identified risk are treated as material elements of the business model
and are considered in the formulation of the HR strategy, the improvement of the working
environment, and long-term resource planning. As these impacts affect both employees and
contracted workers, they are included within the scope of this disclosure. The following sections
outline the Company’s approach to understanding employee interests, their engagement, and the
measures, policies, and targets used to address these key impacts.
167
Table 89: Table of significant impacts, risks and opportunities (IRO) for Cinkarna Celje, d. d.
Material impacts, risks and/or opportunities
Category
Location/ value chain
Time horizon
Own operations
Downstream
value chain
Upstream
value chain
Short-term
Medium
-term
Long-term
Occupational safety and health
Actual negative impact
x
x
Ensuring employee job satisfaction
Actual negative impact
x
x
Ensuring employee job security
Actual positive impact
x
x
Underdeveloped succession policy and
competency gaps
Risk
x
x
The Company acknowledges the fundamental role of its employees in delivering business objectives
and sustainable growth; consequently, significant focus is placed on managing material impacts,
risks, and opportunities concerning its own workforce. The scope of this disclosure extends to all
individuals within the workforce who could be materially affected by the Company's operations,
including permanent and part-time employees, self-employed contractors, and personnel engaged
via employment agencies.
As a company in the chemical industry, Cinkarna Celje faces the challenge of ensuring a safe working
environment where handling hazardous substances and managing demanding technological
processes are inevitable parts of production. To mitigate potential negative impacts, the Company
implements strict safety protocols, regular training, and preventive measures to ensure the health
and safety of employees and reduce the risk of accidents and occupational diseases. The Company
is aware that motivated and satisfied employees are crucial to its success and competitiveness.
Consequently, significant focus is placed on ensuring job satisfaction by creating a stimulating work
environment based on safety, respect, professional development, and fair remuneration.
To improve job satisfaction, numerous measures are implemented, including investment in
occupational safety and health, the promotion of open and transparent relationships between
employees and management, the maintenance of a fair job classification system, and the provision
of career development opportunities. An important aspect of this commitment is the ongoing effort
to prevent all forms of violence, discrimination, and harassment in the workplace.
Furthermore, the Company recognises the positive impacts generated by providing job security for
its own workforce through long-term business stability, systematic personnel management, and
investment in competency development. Particular emphasis is placed on social security and
associated benefits, ensuring stable employment with minimal risk of layoffs and competitive wages
that provide economic security. Effort is also dedicated to maintaining a healthy work-life balance,
which further contributes to satisfaction and long-term stability.
One significant risk identified arises from an underdeveloped succession policy and a lack of
appropriate employee competencies, which could negatively impact business continuity, productivity,
and the Company’s adaptability to market and technological changes. To manage this risk, target
measures are implemented, such as systematic succession planning and employee education and
training to strengthen key competencies, ensure knowledge transfer, and prepare personnel for
future responsibilities.
During the reporting period, based on the double materiality analysis and established risk
management and internal control procedures, the Company did not identify any actual material
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negative impacts on people or the environment, nor did it identify significant impacts on employees
arising from the transition.
The Company is significantly dependent on a skilled and stable workforce, as this enables the
uninterrupted execution of regulated and technically demanding production processes. This
dependency affects efficiency, quality, delivery reliability, and the Company's capacity for long-term
development.
Identified risks, such as staff shortages and the loss of key knowledge, impact the business model
and are addressed through the following strategic measures:
• Development of systematic knowledge transfer and internal succession;
• Strengthening of internal training and competency development;
• Digitalisation of HR processes;
• Long-term succession planning for critical roles.
The relationship between risks and opportunities regarding the workforce is inextricably linked to the
Company’s business strategy. Measures used to manage HR risks simultaneously open new
development opportunities and contribute to the successful realisation of strategic goals. Therefore,
risks and opportunities are integrated into a unified approach involving monitoring, response, and
long-term integration into the business model.
In addition to disclosures on topics identified as material within the double materiality assessment
under ESRS, the Company also reports on the following specific points: S1-8, S1-9, S1-10, S1-12,
S1-15 and S1-16. While these were not defined as material, they are included in the report in the
interests of transparency and responsible reporting.
5.3.1.2 [S1-1] Policies related to own workforce
As one of Slovenia's leading industrial enterprises, the Company recognises the fundamental role of
its employees in achieving both sustainable and business objectives. We are committed to providing
a safe, fair, and inclusive working environment that respects fundamental human rights, labour
rights, and the principles of decent work.
The Company’s workforce strategy and its approach to managing material impacts, risks, and
opportunities (IROs) are underpinned by policies covering human rights, human resources,
occupational safety and health, ethical conduct, employee engagement, and the protection of labour
rights. These documents form the foundation of workforce management and provide operational
support for the implementation of the Company’s strategic HR objectives.
The following section presents the key documents governing occupational safety and health, ethical
conduct, workforce organisation, diversity, the prevention of violence, competency development, and
respect for human rights. Each policy is linked to one or more identified material IROs within the
workforce domain:
• Occupational Safety and Health Policy defines the organisational and technical measures
required to prevent injuries and occupational diseases, as well as the safe execution of work
processes. The policy directly addresses the material actual negative impact related to
ensuring health and safety at work;
• Code of Ethical Conduct and Work establishes the foundations for responsible conduct,
professionalism, and respectful cooperation. It thereby strengthens a culture of integrity and
reduces actual negative impacts related to challenges in the field of social dialogue;
• Diversity Policy promotes inclusion and equal opportunities, thereby addressing the material
actual negative impact on employee satisfaction and providing an opportunity to develop an
inclusive organisational culture;
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• Rules on Internal Organisation and Job Classification establish a clear workplace structure,
enabling efficient personnel planning and allocation while managing risks associated with
labour shortages, inadequate organisation, and succession planning;
• Rules on the Prevention of All Forms of Workplace Violence protect employees from
psychosocial risks such as mobbing, harassment, and violence, thereby reducing material
actual negative impacts on employee satisfaction and safety;
• Rules on Determining and Paying Performance-Related Bonuses establish criteria for fair and
target-oriented remuneration, reducing negative impacts on satisfaction and providing an
opportunity for increased motivation and a sense of belonging;
• OP 174 – Provision of Personal Protective Equipment (PPE) defines procedures and
responsibilities for PPE use, reducing injury risks and ensuring regulatory compliance. This
policy directly addresses the material actual negative impact related to ensuring health and
safety at work;
• OP 137 – Training governs the system for internal training and competency development,
enabling the management of risks associated with succession and knowledge gaps while
promoting long-term employee development;
• Human Rights Policy defines the principles, obligations, and commitments of the Company
regarding respect for human dignity, equal opportunities, decent work, environmental
protection, and responsible conduct throughout the supply chain.
Table 90: Key policies for ensuring a safe and orderly working environment
Policy,
commitment or
code title
Summary of key content (Objectives,
IROs)
Accountability
Alignment with
external
standards &
initiatives
Stakeholder
engagement &
consideration of
interests
Accessibility
Occupational
Health and
Safety Policy
(S1-1, DR23)
Ensures a safe and healthy working
environment for employees and
visitors:
• Commitment to compliance with
relevant legislation and
occupational health and safety
regulations;
• Focus on the prevention of
workplace injuries:
• Establishing health and safety
procedures;
• Defining roles and
responsibilities.
Head of Health,
Safety and
Environment
(HSE)
Occupational
Health and
Safety Act
(ZVZD-1);
Directive
89/391/EEC; ISO
45001
Addresses the
interests of
employees,
temporary agency
workers,
students,
trainees, and the
Labour
Inspectorate;
formulated in
cooperation with
employee
representatives.
Cinkarna Celje,
d. d., Intranet
Code of Ethical
Conduct and
Work,
Defines fundamental principles and
rules of conduct for employees and
management. Ensures high standards
of business and ethical integrity and
promotes a culture of responsibility,
honesty, and respect.
Management
Board
OECD Guiding
Principles for
Multinational
Enterprises, UN
Global Compact,
ISO 26000,
Integrity and
Prevention of
Corruption Act
(ZIntPK)
Addresses
employees,
workers
employed through
an employment
agency, business
partners, and the
general public.
https://www.cink
arna.si/o-
podjetju
Diversity Policy
The policy aimed at ensuring
diversity in the Management
Board and Supervisory Board of
The Company. sets out the
main principles for achieving
greater diversity in these bodies,
which contributes to greater
efficiency, diversity of opinions
and a better understanding of
current developments and long-
term risks and opportunities for
the Company's operations.
Management
Board
Employment
Relationships Act
(ZDR-1), UN
Agenda 2030
(SDG 5, 8, 10),
Addresses
employees; takes
into account the
recommendations
of the Slovenian
Sovereign
Holding.
https://www.cink
arna.si/o-
podjetju
Rules on
Internal
Organisation
and Job
Classification
These rules define the organisational
structure and job classification,
specifying internal organisational
units, their tasks, roles with job
descriptions, and conditions for filling
said positions, and include:
Head of Human
Resources and
General Affairs
Employment
Relationships Act
(ZDR-1),
Addresses
employees,
workers
employed through
an employment
agency,
Cinkarna Celje,
d. d., Intranet
170
• Internal organisation with the
definition of organisational units.
• Job classification with the definition
of individual roles, including job
descriptions, required level and type
of education, working conditions, and
other special requirements.
• Conditions for filling positions by
determining the criteria that
candidates for individual roles
must meet, such as level of
education, work experience,
specific knowledge, or
qualifications.
document
prepared in
consultation with
employee
representatives
Rules on the
Prevention of all
Forms of
Violence in the
Workplace,
(S1-1,
DR24a,b,d)
These rules ensure a safe and
supportive working environment and
protect the dignity of all employees.
They include:
• Clear provisions on what constitutes
violence, bullying, sexual and other
harassment, and psychosocial risks in
the workplace;
• Measures for identifying, preventing,
eliminating, and managing violence,
harassment, bullying, and other forms
of psychosocial risk;
• Reporting and handling procedures
through which employees can report
incidents of violence or bullying, and
the method of their handling, including
ensuring the anonymity and protection
of reporting persons;
• Measures against the alleged
perpetrator of the misconduct.
Head of the
Legal
Department
Employment
Relationships Act
(ZDR-1),
International
Labour
Organization
(ILO) –
Convention No.
190,
Recommendatio
n No. 206 (ILO),
Directive
2000/78/EC (EU)
Addresses
employees;
workers
employed through
an employment
agency, students,
pupils, prepared
in consultation
with employee
representatives.
Cinkarna Celje,
d. d., Intranet
Rules on
Determining
and Paying
Performance-
Related
Bonuses
These rules define the conditions,
criteria, and procedures for the
payment of performance-related pay
based on the Company's business
results and include:
• Determining the conditions under
which employees are eligible for
performance bonuses, such as
achieving specific financial targets;
• Clearly defined criteria used for
payment;
• Determining the methodology for
calculating the payment amount
and the method of payment to
employees.
Management
Board
ZDR-1,
Company-Level
Collective
Agreement
Addresses
employees;
workers
employed through
an employment
agency, prepared
in consultation
with employee
representatives.
Cinkarna Celje,
d. d., Intranet
OP 198
Management of
Occupational
Health and
Safety at
Shared
Workplaces
The objective is the coordinated
implementation of safety measures
and the prevention of accidents. This
procedure defines measures to
ensure safety at work when multiple
employees and external contractors
operate simultaneously at the same
worksite. It requires a written
agreement between all participants,
designates persons responsible for
safety, defines shared measures, and
requires that workers are briefed on
safety procedures.
Head of Health,
Safety, and
Environment
(HSE)
Department
Health and
Safety at Work
Act (ZVZD-1),
ISO 45001
Addresses the
interests of
employees,
workers
employed through
an employment
agency, and the
labour
inspectorate;
designed in
cooperation with
employee
representatives.
Cinkarna Celje,
d. d., Intranet
Operating
Regulation OP
137: Training
This regulation defines the planning of
training needs, requirements for
training prior to starting a role, and
training for independent work for new
hires, employees reassigned to other
positions, long-term absent
employees, and agency workers. It
outlines the planning and verification
of employee competence, training for
students (compulsory internships,
theses, student work), training for
interns and apprentices, the
organisation and monitoring of part-
Head of Human
Resources and
General Affairs
Health and
Safety at Work
Act (ZVZD-1),
Compliance with
the OECD
Guiding
Principles for
Enterprises,
Addresses
employees,
business
partners, and the
general public;
designed with the
involvement of
management and
HR.
Cinkarna Celje,
d. d., Intranet
171
time studies, and defines the
procedures and system for conducting
annual appraisal interviews.
Human Rights
Policy (S1-1,
DR20)
This policy defines the Company's
fundamental principles and
commitments to respecting human
dignity and protecting human rights
across all activities. It applies to all
potentially affected stakeholders,
including employees, business
partners, and local communities. It
emphasises zero tolerance for
discrimination, harassment, forced
labour, and exploitation, while
supporting equal opportunities, fair
and respectful treatment, and safe
and healthy working conditions. The
policy also outlines expectations for
business partners, grievance
mechanisms for reporting and
addressing violations, and a
commitment to monitoring and
continuously improving the
implementation of these principles.
Management
Board
Commitment in
the Sustainability
Statement for
2024
Addresses all
employees in the
Company, all
suppliers, and
partners,
including local
communities with
which the
Company
cooperates in the
global supply
chain; designed
with the
involvement of
management and
HR.
https://www.cink
arna.si/za-
vlagatelje/objava
/politika-
clovekovih-
pravic-2025-12-
30
We are committed to respecting all internationally recognised human rights, including compliance
with Slovenian labour legislation, the EU Charter of Fundamental Rights (Article 21: Non-
discrimination), EU Directive 2000/78/EC (on equal treatment in employment and occupation), EU
Directive 2000/43/EC (on equal treatment irrespective of racial or ethnic origin), and ILO Convention
No. 111 (on discrimination in respect of employment and occupation). This commitment further
extends to ILO Conventions No. 138 and No. 182, the UN Convention on the Rights of the Child, the
EU Charter of Fundamental Rights (Article 32), EU Directive 94/33/EC on the protection of young
people at work, the European Convention on Human Rights (Article 4), and the ILO Declaration on
Fundamental Principles and Rights at Work. The Company has adopted Rules on the Prevention of
All Forms of Workplace Violence, which enable the identification, prevention, elimination, and
management of violence, harassment, bullying, and other psychosocial risks. These rules explicitly
cover discrimination based on sex, race, religion, sexual orientation, gender identity, or other
personal characteristics. Currently, the Company has not adopted specific commitments or positive
measures for groups at particular risk of vulnerability within its own workforce, as it operates in full
accordance with the applicable Employment Relationships Act.
All of our own workforce is employed in the Republic of Slovenia and is subject to Slovenian labour
legislation, which provides strict frameworks prohibiting child and forced labour. Based on the
conducted Impact, Risk, and Opportunity (IRO) assessment, the Company assesses the risk of child
or forced labour within its own workforce as low or immaterial; therefore, this area is not defined as
a material risk.
5.3.1.3 [S1–2] Processes for engaging with own workers and workers'
representatives about impacts
We dedicate particular attention to collaboration with employee representatives, as two
representative trade unions and a Works Council operate within the Company. The Company has
formal agreements in place to provide the necessary conditions and resources for the functioning of
both the unions and the Works Council. Furthermore, employees are represented within the
management bodies by a member of the Management Board acting as Labour Director, and within
the supervisory bodies by two representatives on the Supervisory Board, through whom employees
can exercise their views and influence.
All employees can express their concerns regarding the workforce and sustainability through the
Works Council, where Employee Initiatives and Questions is a standing agenda item. In the event of
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organisational changes or updates to internal policies, the Company regularly informs and consults
with the Works Council and ensures the participation of its representatives at meetings. During these
sessions, the Works Council obtains answers to employees’ open questions through invited Company
representatives or written responses. These are published on the intranet, accessible to all employees
with computer access, and/or via minutes of regular or extraordinary meetings posted on
noticeboards. Employees have an additional channel for expressing concerns through trade union
representatives or the presidents of the representative trade unions, with whom the Management
Board meets regularly as required.
The Company recognises the importance of including vulnerable groups of employees, such as older
workers, women, foreign nationals, and persons with disabilities, as the impacts of our operations
may affect them more significantly. We systematically involve employees and their representatives
in addressing workforce-related impacts, taking their views and concerns into account through the
Works Council, union representatives, and the possibility of submitting anonymous suggestions via
our communication channels. When necessary, we conduct additional informal discussions with
employees from vulnerable groups to ensure their voices are heard and considered when shaping
measures that affect their working environment.
The Company has established a formal and structured system for employee engagement through
the Works Council, representative trade unions, and employee representatives in management and
supervisory bodies. As the process for engaging with employees is established and regularly
implemented, disclosures relating to instances where no such process exists are not relevant to the
Company.
5.3.1.4 [S1–3] Processes to remediate negative impacts and channels
for own workers to raise concerns
Workers and their representatives are enabled to participate in addressing issues concerning the own
workforce. They are involved in workplace risk assessments and the preparation of the formal Risk
Assessment document. Several committees operate within the Works Council through which
employees from various areas convey questions and concerns regarding working conditions. Workers
can report work-related hazards and suggestions for improving working conditions via the Works
Council, or by reporting potential hazards and near-miss events. The effectiveness of the measures
taken is evaluated by monitoring the implementation of agreed improvements, analysing recurring
events, and through regular reporting and employee feedback. Based on the data collected,
additional corrective measures are adopted as necessary. The Company has established formal and
accessible channels for raising concerns and reporting irregularities.
Employee engagement in the Company takes place through the following channels:
• Annual job satisfaction survey, where employees provide information on key topics such as
satisfaction with various aspects of work, including working conditions, promotion
opportunities, remuneration, relationships with colleagues, job security, and the reputation
of the work. Results are presented and analysed at senior management level, with individual
departments and managers responsible for preparing action plans to address identified
challenges.
• Annual employee engagement survey, based on the Gallup Engagement Scale, which
provides internationally comparable data on factors influencing employee engagement.
Results are presented and analysed at senior management level, with departments and
managers responsible for preparing action plans.
• CCUM useful suggestion scheme, where employees can submit suggestions to improve work
processes, the working environment, working conditions, and relationships. Each submission
is reviewed by the system administrator, the President of the Works Council, who ensures
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that the suggestion is appropriately evaluated by the responsible persons and that the
employee receives feedback.
• Anonymous mailboxes titled What’s Bothering You? (Kje pa vas čevelj žuli?) or the online
channel razkritja@cinkarna.si, whose administrator is a member of the Management Board
- the Labour Director who carefully examines each reported case and proposes further
consideration.
Monitoring the effectiveness of employee engagement
To evaluate the effectiveness of our efforts, we monitor several key indicators:
• Survey methodology: We monitor trends in participation, engagement levels, and employee
satisfaction, which allows us to adjust our engagement strategy.
• Employee turnover and talent retention: This serves as an additional indicator of the
effectiveness of employee engagement.
Engagement of non-employees
Contracted workers, secondary school and higher education students on mandatory work placements
are not classified as employees of the Company; however, uniform criteria and rules for their
engagement apply to them just as they do to our employees, in accordance with legislation and
internal regulations. At the start of their placement, they are inducted into the working environment,
briefed on fundamental safety rules, rights, and expectations, and assigned a dedicated mentor or
supervisor. In line with the principles of fair treatment, these individuals have the opportunity to
raise concerns, ask questions, or report perceived irregularities through the same structures as
permanent staff—including direct communication with supervisors, HR support, and anonymous
communication forms. Familiarisation with available channels is a core part of the induction process,
and their use is voluntary and protected. All individuals using these channels—including contracted
workers, secondary school and higher education students—are protected by internal anti-retaliation
policies as set out in the Code of Ethical Conduct, which applies to everyone acting on behalf of the
Company or within the scope of its operations. This ensures that non-employees also have the
opportunity to safely voice their concerns and contribute to a fair and secure working environment.
5.3.1.5 [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
5.3.1.5.1 Ensuring occupational safety and health
The actions presented in this disclosure address the material impacts, risks, and opportunities related
to our own workforce, as defined in disclosure ESRS 2 SBM-3.
Regarding impacts in the field of occupational safety and health (OSH), our policy is rooted in the
conviction that all accidents are preventable; therefore, our "ZERO accidents" goal reflects our total
commitment to this area.
Three primary objectives in occupational safety and health:
1. Zero workplace injuries – the overarching goal: This is a long-term objective to which all
other goals are subordinate. We pursue it through the systematic implementation of various
preventive activities and improvements.
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2. Improvements in OSH and fire safety: We eliminate potential causes of workplace injuries
by identifying and analysing process risks that could negatively affect occupational safety
and health.
3. Organising and implementing workplace health promotion: We regularly carry out health
promotion activities according to a structured programme that is adapted annually.
As part of ensuring occupational safety and health (OSH), we have implemented the following
activities and measures for all our employees:
• First aid provision for injured and suddenly ill persons at the workplace: A workshop for
employees;
• Health education in the field of cardiovascular disease prevention – risk factors: Quarterly
monitoring of blood lipids and sugar levels, blood pressure measurements, etc.;
• Body composition measurements: Including the determination of BMI as a risk factor for
cardiovascular diseases;
• Occupational medicine collaboration: In cooperation with the contracted occupational
medicine provider, we conduct revisions of risk assessments and workplace inspections
regarding ergonomic suitability, as well as biological monitoring of employees. Furthermore,
the occupational medicine provider conducts preventive medical examinations for employees
and issues certificates of fitness for work. Preventive medical examinations are carried out
at intervals specified in the risk assessment for each specific workplace (24–60 months);
• Sports activities:
o Cycling to work (the GAMSI cycling section);
o Participation in the European Mobility Week campaign – Celje Commutes Sustainably;
o Organised sports activities (badminton, table tennis, boxing, bowling, etc.);
o 20% discount on the use of facilities at local health spas;
o Team building;
o Employee sports games and picnic;
• Preventive activities for early cancer detection: Awareness-raising about colorectal cancer in
cooperation with the National Institute of Public Health (NIJZ);
• Healthy breakfast: Promotion of the Traditional Slovenian Breakfast;
• First aid at the workplace: First aid procedures;
• Prevention of musculoskeletal disorders: Back Care workshop;
• Promoting a healthy lifestyle: Movement and Sleep workshop;
• Open Day: Body composition measurements;
• Promoting mental health: Workplace Stress Management workshop;
• Protection against infectious diseases: Seasonal flu vaccinations.
Based on the Impact, Risk and Opportunity (IRO) assessment conducted, the Company did not
identify any actual negative impacts on employees during the reporting period that were assessed
as material. Furthermore, no business practices causing material negative impacts on employees
were identified, nor were any negative impacts arising from the transition to a green economy.
We utilise an established system for recording and reporting incident statistics and for rectifying
identified deficiencies. In the event of a workplace accident or sudden illness, first aid and rescue
services are organised and guaranteed across all workplaces during both regular and shift-working
hours. In the event of an injury, the employee must immediately seek first aid from qualified
personnel and inform their supervisor, who must then report the accident to the Occupational Safety
and Health Service.
In addition to workplace accidents, we monitor near-misses and potential hazards, which are
regularly recorded to eliminate root causes and prevent accidents. In 2025, we identified 168
potential hazards that were promptly rectified—an 18.8% decrease compared to the previous year.
Production workers participate in the Safety Minute activity at various intervals; the purpose of this
175
is for employees in individual plants to discuss the upcoming shift and any identified potential hazards
before work begins. Furthermore, in the event of a workplace injury, discussions are held regarding
the causes of the accident and other relevant topics concerning safe and healthy work.
We maintain a system for the continuous assessment of workplace risks based on occurrence and
intensity. Based on these results, the Risk Assessment for all workplaces and the OSH Risk Register
are prepared or revised, detailing employee exposure to physical, chemical, mechanical, social and
biological risks. Where risks are identified, we determine and adopt appropriate measures to reduce
exposure to hazardous working conditions, assigning responsible persons and deadlines for the
mitigation or elimination of specific risks.
Good health is a prerequisite for a successful life and work—both for the individual and the
organisation. Consequently, we regularly implement a health promotion programme aimed at
maintaining and strengthening the physical and mental health and well-being of our employees, as
well as the early detection of various medical conditions. This represents active employer support for
improving general employee health. The health promotion programme, which is financially evaluated
and approved annually by the Management Board, is prepared based on an assessment of employee
needs. This includes an analysis of the health status of employees based on periodic medical
examinations, as well as an analysis of sick leave data categorised by disease group and economic
activity.
5.3.1.5.2 Workforce competence and availability
Workforce competence and availability represent a key strategic area and, simultaneously, a
significant risk that can impact business stability and performance. The Company recognises that
retaining skilled personnel and attracting new talent in an environment of limited labour market
availability is an increasing challenge. Consequently, we systematically invest in the development of
employee competencies, knowledge transfer and the adaptation of recruitment strategies to ensure
the Company’s long-term stability and competitiveness. To manage the risks associated with
workforce competence and availability, the Company implements the following measures:
1. Staffing system: The established staffing system includes:
• Prescribed training programmes for every position;
• Assignment of mentors to new employees to ensure effective induction;
2. Targeted employee training: Based on revised competencies, we organise:
• Internal and external training across various fields, aligned with the requirements for
professional knowledge and content development;
• Maintenance of the active status of existing certified engineers;
3. Succession planning and development:
• We have conducted a review of key positions, identifying potential successors and
establishing timelines for replacements;
• For management personnel, we have established a Leadership Academy focused on
developing leadership competencies, complemented by individual coaching for
employees where necessary.
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5.3.1.5.3 Social dialogue
The Company is committed to high-quality social dialogue, which improves working conditions for all
employees and ensures long-term corporate stability. We recognise that a lack of effective dialogue
can have serious negative impacts on both the Company and its workforce. Collaboration with
employees and their representatives fosters greater inclusion and satisfaction while mitigating
workforce-related risks. Measures to address material impacts include:
1. Regular cooperation with the trade union:
• Formal agreement on remuneration policy, ensuring fair pay for all employees;
• Cooperation agreement between the Company and the trade unions;
• Alignment of working conditions and employment rights through regular collective bargaining
and negotiations;
• Active participation in the development of occupational safety and health (OSH) policies;
2. Strengthening the role of the Works Council:
• Formal cooperation agreement between the Company and the Works Council;
• Regular meetings with management to address key issues;
• Providing employees with the opportunity to actively influence working conditions through
their representatives;
• Strategic integration of employee initiatives into decision-making processes;
3. Employee representatives in supervisory bodies:
• Active participation of employee representatives on the Company Supervisory Board;
• Ensuring transparency in key business decisions;
4. Role of the Labour Director:
• Direct representation of employee interests within the Company's management,
• Acting as a liaison between the workforce and the Company’s strategic decision-making
bodies;
5. Internal communication system:
• Enhanced communication through internal announcements, staff meetings, and direct
dialogue;
• Implementation of mechanisms for submitting employee initiatives and enquiries;
• Monitoring employee satisfaction and responding effectively to their needs.
5.3.1.5.4 Monitoring the effectiveness of adopted measures
The Company monitors the implementation and effectiveness of measures adopted in the fields of
occupational safety and health (OSH) and social dialogue through the following activities:
1. Occupational safety and health:
• Annual reporting: Formal reviews at the annual management meeting;
• Regular monitoring of safety and health indicators via performance targets at Management
Board meetings and the quarterly adoption of measures;
• Real-time tracking of the Number of injury-free days on digital screens and the intranet;
• Detailed root cause analysis of workplace accidents;
• Regular informal meetings with the authorised occupational health physician.
2. Social dialogue:
• Regular employee satisfaction analyses and internal surveys;
• Review of the effectiveness of social dialogue, including the number of employee initiatives
and agreements reached;
• Monitoring of turnover and absenteeism rates to measure the long-term impact of measures.
The Company remains committed to the further development and enhancement of social dialogue,
as we believe that open communication and collaboration are essential for corporate stability and
sustainable success.
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5.3.1.6 [S1–5] Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks and
opportunities
The Risk Management Committee has established the targets and measures for managing material
risks and opportunities related to the workforce. As part of its Sustainability Strategy to 2030—
approved by the Supervisory Board, which includes two employee representatives—the Company
has set the following targets:
• To increase the proportion of engaged employees to 40% and reduce the proportion of
actively disengaged employees to 16% (based on the Gallup Engagement Scale);
• Zero workplace injuries by 2030;
• To increase activities promoting local employment opportunities by 10%.
To achieve these sustainability targets related to its own workforce, the Company has undertaken
the following activities:
To achieve the strategic target regarding employee engagement:
• Overhauling the mentoring system;
• Enhancing the organisational culture, focusing on financial and non-financial indicators,
leadership, training and knowledge transfer;
• Strengthening the accountability framework;
• Improving the transparency of the remuneration system, specifically regarding variable pay
components and promotion criteria;
• Modernising and implementing the competency and knowledge development system,
including performance assessments, training, talent management and succession planning.
To achieve the strategic target regarding employee safety:
• Implementing LOTO (Lockout-Tagout) safety procedures within TiO2 production;
• Introducing the Safety Pillar as part of the lean manufacturing project (CC Excellence
System) in TiO2 production;
• Launching additional activities to further enhance occupational safety and health (OSH) by
2030.
To achieve the strategic target regarding the promotion of local employment opportunities:
• Collaborating with local primary and secondary schools and universities, including the
organisation of site excursions;
• Providing mandatory work placements for students at all levels of education;
• Participating in career fairs and information days, and hosting Company Open Days.
Table 91: Overview of the achievement of objectives from the company’s sustainability strategy related to the workforce
Target name and target year 2030
Result:
Baseline year 2021
Result:
Year 2024
Result:
Year 2025
To increase the proportion of engaged
employees to 40% and reduce the
proportion of actively disengaged
employees to 16% (based on the Gallup
Engagement Scale) by 2030.
Proportion of engaged
employees: 36.5%; actively
disengaged employees:
21.9% (based on the Gallup
Engagement Scale).
Proportion of engaged
employees: 37.4%; actively
disengaged employees:
17.7% (based on the Gallup
Engagement Scale).
Proportion of engaged
employees: 36.5%; actively
disengaged employees:
23.8% (based on the Gallup
Engagement Scale).
Zero injuries by 2030.
Number of workplace injuries
= 10
Number of workplace injuries
= 17
Number of workplace injuries
= 16
To increase activities promoting local
employment opportunities by 10% by
2030.
Number of activities = 76
Number of activities = 82
Number of activities = 94
178
5.3.1.7 [S1–6] Characteristics of the Company's employees
As of 31 December 2025, the Company employed 726 people, of whom 80.0% were men and 20.0%
were women. The total number of employees is broken down by gender (see Table 92) and is
consistent with the corresponding figure in the financial statements; specifically, the number of
employees on the last reporting date of 2025 was 726, while the average number of employees for
2025 was 724, as disclosed in Note 22, Operating Expenses, in the financial section of the report.
Taking into account the Management Board's business policy, the diverse business results of
individual business units, and planned recruitment, the total number of employees increased by
1.1%, or 8 employees. In 2025, 47 employees left the Company, of whom 26 retired.
The most representative number of employees, as disclosed in the notes to Table 1, Summary of
Operations and Alternative Performance Measures (Average number of employees in 2025), is 724.
The difference between the status as of 31 December 2025 and the average number of employees
results from recruitment dynamics during the year.
Table 92: Employees by gender as of 31 December 2025
Employees by gender
2024
2025
Number
%
Number
%
Men
573
79.8
581
80.0
Women
145
20.2
145
20.0
Other
0
0
0
0
Not reported
0
0
0
0
Total
718
100
726
100
As of 31 December 2025, the majority of employees (91.7%) were employed on permanent contracts
and worked full-time (98.9%). A small percentage of employees (1.1%) worked part-time.
Regardless of whether they are on permanent or fixed-term contracts, or working full-time or part-
time, all employees receive the same benefits. The employee turnover rate in 2025 was 6.5%. This
figure is calculated based on the actual headcount of employees, regardless of full-time equivalents
(FTE). The calculation includes all employee departures during the reporting year, irrespective of the
reason (retirements, resignations, mutual agreements, deaths, etc.). In 2025, 47 people left the
Company.
The turnover rate was determined as the ratio of the number of departures to the average number
of employees during the year, with the average calculated as the arithmetic mean of the monthly
headcount. The data is based on internal personnel records and is reconciled with the Company's
financial statements.
Table 93: Number of employees based on headcount, by employment status as of 31 December 2025
Men
Women
Other
N/A
Total
Number of employees
581
145
0
0
726
Number of permanent employees
524
142
0
0
666
Number of fixed-term employees
57
3
0
0
60
Number of employees with non-guaranteed hours
0
0
0
0
0
Number of full-time employees
578
140
0
0
718
Number of part-time employees
3
5
0
0
8
179
5.3.1.8 [S1–7] Characteristics of non-employee workers in the
Company’s own workforce
The Company has contracts with two employment agencies. Regarding the remuneration of agency
workers employed through these agencies, the Company is bound by its Company-Level Collective
Agreement, which ensures that these workers are in an equivalent position to regular employees in
terms of pay and all associated bonuses. In 2025, the Company utilised an average of 40.6 agency
workers, representing 5.6% of the average headcount. This figure is 31.7% higher than in 2024,
resulting from increased labour needs, particularly within the production units. There is no seasonal
impact on the number of agency workers; instead, the number of personnel is adjusted according to
the Company’s specific needs. The Company does not have a predetermined quantitative threshold
for disclosing fluctuations in the number of non-employee workers. The decision to disclose is based
on professional judgment.
As of 31 December 2025, there were no self-employed workers or individuals performing work based
on self-employed status within the Company. All workers included in the disclosure of the own
workforce are employed under employment contracts.
Student work (via the student referral system) was performed by an average of 13.5 participants
per month, representing a 6.3% decrease compared to 2024. The majority of student work is
provided during the summer months (July and August) to cover temporary or occasional holiday
leave and additional tasks. Excluding July and August, the Company utilised an average of 9.7
workers via the student referral system.
5.3.1.9 [S1–8] Collective bargaining coverage and social dialogue
20
Employees are bound by the Company-Level Collective Agreement of Cinkarna Celje d.d., which was
concluded with two representative trade unions. Collective bargaining and negotiations with social
partners serve as the key mechanisms for regulating employment relations within the Company,
ensuring a stable working environment and uniform conditions for all employees.
In 2025, 100% of our employees were covered by the Company-Level Collective Agreement. Of
these, 94.1% were entitled to all rights and benefits stipulated in the agreement, including provisions
on wages, working hours, allowances, and occupational safety and health (OSH). The remaining
5.9% of employees, who perform management and executive functions, were partially covered by
the Company-Level Collective Agreement, specifically in areas not separately regulated by their
individual employment contracts. This means that for these employees, certain aspects of their
working conditions are governed directly by their contracts, while other general elements of the
employment relationship continue to follow the collective agreement.
The Company actively promotes social dialogue through two representative trade unions: the Free
Trade Union (Svobodni sindikat) of Cinkarna Celje and the Independent Trade Union (Neodvisni
sindikat) of Cinkarna Celje. Furthermore, employees are represented by two members on the
Supervisory Board and by a Management Board member acting as Labour Director, ensuring direct
representation in the Company’s strategic decision-making.
Regular meetings between management and employee representatives facilitate the discussion of
key topics such as remuneration, working conditions, and safety at work. In 2025, this dialogue
contributed to improvements in allowances for special working conditions, the conclusion of an
20
The sub-topic was not identified as material within the double materiality assessment (DMA).
180
agreement on remuneration policy, the payment of the annual leave allowance, and the
determination of criteria for the 2025 business performance bonus.
The Company recognises and supports the right to freedom of association and collective bargaining,
and encourages open social dialogue as a key tool for improving working conditions and the
sustainable development of the Company.
Applicability of the Company-Level Collective Agreement to non-employees
Contracted workers, as well as secondary school and higher education students on mandatory work
placements, are not classified as employees of the Company; however, the Company-Level Collective
Agreement applies to them in full, to the same extent as for our employees.
5.3.1.10 [S1–9] Diversity metrics
21
The Company recognises the importance of diversity and inclusion as key drivers of long-term
success and the creation of a supportive working environment. We are committed to ensuring equal
opportunities for all employees, regardless of gender, age, ethnicity, religion, disability, or other
personal circumstances. As of 31 December 2025, the senior management level (B-1)—comprising
directors and heads of departments who report directly to the Management Board—consisted of 9
men (64.3%) and 5 women (35.7%).
In 2025, the largest age group was employees aged 30–50, representing 46.8% of the workforce.
This reflects a significant shift in the Company's efforts to rejuvenate the collective, taking
demographic trends into account. This group was followed by employees over the age of 50, who
accounted for a 37.5% share. The smallest group consists of employees under the age of 30. We are
mindful of the increasing average age of our workforce; consequently, we are implementing several
measures to encourage the recruitment of younger staff and to enable young people to develop
professional competencies within a supportive working environment. We provide mandatory work
placements for secondary school and higher education students and offer corporate scholarships for
studies in fields such as chemical technology, mechanical technology, toolmaking, chemical
engineering, mechanical engineering, and electrical engineering. For new hires, we conduct
mentorship programmes for knowledge transfer, while simultaneously engaging with the wider
community to foster an interest in chemistry among young people.
Table 94: Number of employees by age group as of 31 December 2025
Percentage of employees by
age (%)
2025
Men
Women
Other
Not reported
Total
Under 30
13.9
1.8
0.0
0.0
15.7
30–50 years
39.1
7.7
0.0
0.0
46.8
Over 50
27.0
10.5
0.0
0.0
37.5
Total
80.0
20.0
0.0
0.0
100.0
5.3.1.11 [S1–10] Adequate wages
22
In 2025, the gross minimum wage in the Republic of Slovenia was EUR 1,277.72. The average wage
within the Company is 19.6% higher than the average gross wage in the Republic of Slovenia for
2025 (EUR 2,536.03). When determining wages and all allowances agreed upon in the Company-
Level Collective Agreement, equal treatment and identical standards apply to all employees. The
starting salary is determined according to the job classification system for each specific position.
Over the years, both the lowest gross salary and the average gross salary in the Company have
21
The sub-topic was not identified as material within the double materiality assessment (DMA).
22
The sub-topic was not identified as material within the double materiality assessment (DMA).
181
consistently increased; this is a result of adhering to current national legislation, our responsibility
to our employees, and negotiations with social partners to ensure a decent standard of living in the
face of rising cost of living.
Table 95: Gross minimum wage in the Republic of Slovenia and average salary at Cinkarna Celje, d. d., in 2024 and 2025 in EUR
2024
2025
Gross minimum wage (EUR)
1,253.90
1,277.72
Gross average wage (EUR)
2,949.32
3,034.23
All employees in the Company receive an adequate wage, which is in line with the reference values
of Directive (EU) 2022/2041 of the European Parliament and of the Council, as it must not be lower
than the statutory minimum wage in each European Union Member State where the legal entity
operates. The lowest basic salary for employees in the Company is EUR 1,345.98, which is 5.34%
(or EUR 68.26 gross) higher than the minimum wage in the Republic of Slovenia for 2025.
5.3.1.12 [S1–11] Social protection
In 2025, 100% of the company's employees were included in the social protection system in
accordance with the applicable legislation of the Republic of Slovenia and relevant collective
agreements. All employees work in the Republic of Slovenia and are included in compulsory forms of
social insurance, which provide protection against loss of income due to significant life events.
Employees are guaranteed social protection in the following areas:
• Healthcare and pension insurance: All employees are included in mandatory healthcare
and pension insurance, ensuring their right to medical services and pension benefits.
• Sick leave compensation: In the event of illness or injury, employees are entitled to sick
pay in accordance with legislation and the Company’s internal policies.
• Parental leave and family benefits: Employees are entitled to maternity, paternity and
parental leave, as well as other benefits related to childcare in accordance with legislation.
• Unemployment protection: In the event of job loss, employees are entitled to
unemployment benefits and other support mechanisms in accordance with legislation.
• Disability or incapacity benefits: In the case of permanent incapacity for work, the
Company supports employees in obtaining their social rights and facilitates gradual
reintegration into work or provides adapted work tasks.
5.3.1.13 [S1–12] Persons with disabilities
23
The Company also employs individuals with a recognised disability. At the end of 2025, they
accounted for 5.5% of the total workforce. These employees have various degrees of disability; their
workstations and duties are adapted to their capabilities and specific needs. Due to an active policy
of cooperation with the Occupational, Transport and Sports Medicine and the Disability Commission
of the Pension and Disability Insurance Institute (ZPIZ), the proportion of employees with disabilities
relative to the total headcount has decreased for the fifth consecutive year (with the exception of
2022). This represents a sustained positive trend. Given the age structure of the workforce and more
restrictive legislation regarding disability retirement, no significant changes to this structure are
expected for the time being. The primary reasons for the higher number of workers with disabilities
relate to spinal deformities, poor posture, restrictions on lifting heavy loads and psychosomatic
factors.
22
The sub-topic was not identified as material within the double materiality assessment (DMA).
182
Table 96: Percentage of employees with disability status as of 31 December 2024 and 31 December 2025
Employees with disabilities
2024
2025
Number
41
40
Percentage (%)
5.7
5.5
5.3.1.14 [S1–13] Training and skills development metrics
The Company recognises the importance and value of a skilled workforce and provides regular
training and competency development. Mandatory training accounts for the largest share of these
activities, focusing primarily on occupational safety and health (OSH), the handling of hazardous
chemicals, fire safety, environmental protection, and standards management.
Table 97: Employee training in 2024 and 2025
2024
2025
Men
Women
Total
Men
Women
Total
Total attendance in specific functional training
2,869
955
3,824
3,053
878
3,931
Total training hours for specific content
12,166
3,944
16,110
11,563
2,989
14,551
Average training hours per employee
21.1
27.2
22.2
20.0
20.3
20.1
Average training expenditure per employee (EUR)
676.0
659.5
675.7
606.6
496.7
584.0
Employees are provided with access to training and development programmes, focusing on
enhancing the knowledge required for technological progress and safety. Through our digital
transformation, we have introduced e-learning for the entire workforce, ensuring continuous
professional development and the strengthening of employee competencies. In 2025, we recorded
20.1 training hours per employee, with a particular emphasis on safety, competency development
and professional content. The decrease in training hours compared to the previous year was partly
attributed to a prioritisation of targeted professional training. This shift was also reflected in the
training content, which focused on refining individual specialisations and mandatory regular training.
In 2025, specific functional training sessions, delivered both in-house and externally, recorded a total
of 3,931 attendances. Total training hours amounted to 14,551.4, representing a 9.7% decrease
compared to the previous year.
In 2025, the Company did not conduct formalised and systematic performance and career
development reviews; consequently, data regarding the proportion of employees involved and their
breakdown by gender is not available. We are working towards developing a unified system for
monitoring and supporting personnel development, which will facilitate a more structured approach
to this area in future reporting periods.
5.3.1.15 [S1–14] Health and safety metrics
A safe and healthy working environment is a key priority for the Company. We regularly conduct
workplace risk assessments and involve employees in training for the safe handling of equipment
and materials. We also provide a wide range of activities designed to support the mental health and
well-being of our employees. The Company has set a target of zero workplace injuries; consequently,
we have implemented measures to improve working conditions, focusing on safety at work and
ensuring access to continuous training for all employees. Progress towards this target is regularly
monitored, and short-term performance goals are set annually to help achieve the overarching
objective. We operate in accordance with ISO 45001 certification for Occupational Safety and Health
(OSH). Progress is measured through metrics included in reports for the regular annual management
review.
183
The Occupational Safety and Health management system covers 100% of individuals performing
work for the Company, whether under an employment contract or any other legal basis (external
contractors), as well as individuals undergoing training and those performing student work.
Work-related injuries are monitored using a frequency index, representing the number of cases of
absence from work due to sick leave per 100 employees. Compared to 2024, the frequency index
decreased from 2.3 to 2.2 injuries per 100 employees. In 2025, there were no occupational diseases,
work-related fatalities, or injuries related to business travel or commuting (where transport is
organised by the employer).
The Lost Time Injury Frequency Rate (LTIFR) is calculated as the ratio of the number of lost-time
injuries to the total number of hours worked by all employees, with the result multiplied by a factor
of 1,000,000.
The number of days lost due to workplace injuries is calculated as the total number of calendar days
of absence due to a work-related injury or illness. This includes all days from the first to the last day
of absence, including weekends and holidays, regardless of whether the employee would have
otherwise been scheduled to work on those days.
These metrics have not been verified by external institutions.
Table 98: Health and safety indicators in 2024 and 2025
Event
2024
2025
No. of work-related injuries
17
16
No. of days lost due to work-related injuries
1572
1229
Work-related injury rate (LTIFR) (S1-6 AR89)
14.8
13.8
Frequency index
2.3
2.2
Work-related illness
0
0
Number of days lost due to work-related illness
0
0
Work-related fatalities
0
0
Occupational diseases
0
0
Number of injuries during commuting (where organised by employer)
0
0
Number of days lost during commuting (where organised by employer)
0
0
Number of injuries during business travel
0
1
Number of days lost due to business travel
0
29
*Number of recorded work-related injuries – external contractors
6
7
*Work-related fatalities – external contractors
0
0
In 2025, the Company recorded 16 work-related injuries, one of which was related to business travel.
There were no reported occupational diseases, work-related fatalities, or injuries during commuting
where transport was organised by the employer. This confirms that the existing preventive and
organisational measures in these areas remain effective. The frequency index decreased from 2.3 in
2024 to 2.2 injuries per 100 employees in 2025, a favourable 4.3% decrease compared to the
previous year. The number of days lost also fell from 1,572 in 2024 to 1,229 in 2025, indicating a
reduction in the severity of employee injuries. In 2025, the Company revised its methodology for
calculating the number of days lost, as further explained in section 5.1.1.2.4. The number of recorded
work-related injuries among external contractors increased slightly from 6 to 7 in 2025, highlighting
the need for additional oversight regarding the implementation of safety requirements. The primary
causes of these accidents were slips, trips and falls; the crushing of limbs; injuries caused by contact
with corrosive substances; cuts; and injuries sustained during manual handling. This underscores
the need for continued emphasis on ergonomic measures, workplace orderliness, the use of personal
protective equipment (PPE) and regular employee training.
184
5.3.1.16 [S1–15] Work-life balance metrics
24
The Company recognises the importance of work-life balance and provides employees with flexible
working arrangements, such as remote work and flexible working hours. In accordance with the
Employment Relationships Act and the Company-Level Collective Agreement, all employees are
entitled to family-related leave, which facilitates the reconciliation of professional and family
obligations. Family-related leave includes absence for the care of sick children or relatives, maternity
leave, paternity leave, parental leave, and leave for birth or adoption. This definition excludes leave
for employees' medical examinations, pregnancy-related illness outside of parental leave, or absence
due to funerals and the death of relatives. Furthermore, family-related leave does not include
absences registered as unspecified unpaid leave.
In 2025, the Company did not maintain separate records for specific types of family-related leave
(e.g., maternity, parental, or carers' leave), as all such absences were recorded under a single
absence code, regardless of their specific purpose. Consequently, it is not possible to calculate the
percentage of employees who actually took family-related leave, nor can a breakdown by gender be
provided.
We recognise the importance of this data for assessing the work-life balance of our employees and
plan to implement more precise absence classifications in the coming years.
5.3.1.17 [S1–16] Remuneration metrics (pay gap and total
remuneration)
25
In accordance with ESRS S1-16, the Company discloses two separate indicators related to employee
remuneration: the ratio between the annual total remuneration of the highest-paid individual and
the median annual total remuneration of employees, and the gender pay gap.
The total remuneration ratio is calculated by dividing the total annual salary of the highest-paid
employee by the median annual salary of the Company’s employees, excluding the highest-paid
employee from the calculation. The median remuneration and the calculation of the gender pay gap
include all remuneration paid by the Company to employees on an annual basis that is subject to
taxation. In 2025, the ratio between the annual total remuneration of the highest-paid individual and
the median annual total remuneration of employees, excluding the highest-paid individual, amounted
to 8.7.
The gender pay gap, which reflects the difference in average remuneration between women and
men, amounted to –6.7% in 2025, indicating that women earned higher salaries on average than
men. The indicator is calculated based on a comparison of the average gross hourly earnings of
female and male employees, with the average gross hourly earnings calculated as a weighted
average. A negative value of the indicator means that the average gross hourly earnings of women
exceed those of men.
Both indicators present different aspects of the remuneration structure and complement each other
in understanding the Company’s remuneration system. The remuneration ratio reflects the internal
distribution of remuneration within the Company, while the gender pay gap highlights differences in
average remuneration between women and men.
The sub-topic was not identified as material within the double materiality assessment (DMA).
25
The sub-topic was not identified as material within the double materiality assessment (DMA).
185
5.3.1.18 [S1–17] Incidents, complaints and severe human rights
impacts
The Company remains committed to respecting human rights, promoting diversity, and ensuring a
working environment free from discrimination. As in 2024, the Company had no reported or
processed incidents of discrimination, complaints, or identified severe human rights impacts in 2025,
as shown in the table below.
To support such an environment, clear grievance mechanisms are in place, including anonymous
channels that allow employees to raise concerns without fear of retaliation. Reports are handled in
accordance with internal procedures, Slovenian legislation, and international standards.
In line with sustainability reporting principles, the Company monitors and reports on any complaints
and incidents related to human rights in a transparent and responsible manner. The following
disclosure has been prepared in accordance with Application Requirement AR 13 of ESRS S1-17,
which requires the disclosure of actual or potential severe negative human rights impacts, including
their scale and the Company’s response. Table 97 thus forms part of the disclosures relating to risk
management and the identification and management of severe human rights impacts within its own
workforce, through which the Company ensures transparency and fulfils its due diligence obligations
in this area.
Table 99: Incidents, complaints, and severe human rights impacts in 2024 and 2025
Indicator
Unit
Value
2024
2025
Incidents of discrimination, including harassment
Number
0
0
Complaints filed through employee grievance channels
Number
0
0
Fines, penalties and compensation due to incidents and complaints
EUR
0
0
Confirmed severe incidents of human rights violations related to own
workforce
Number
0
0
Fines, penalties and compensation related to confirmed severe
incidents of human rights violations
EUR
0
0
Confirmed serious incidents of human rights violations related to the
value chain (upstream and downstream)
Number
0
0
Confirmed severe incidents of human rights violations related to
consumers and/or end-users
Number
0
0
186
5.3.2 [S3] Affected communities
As of the balance sheet date, the company does not exceed an average of 750 employees and, in
accordance with the provisions of Appendix C to ESRS 1, opts for a phased introduction of reporting
for disclosures related to ESRS S3 – Affected Communities. Despite this option, a materiality
assessment of the topic was conducted again in 2025, and we provide disclosures for all material
matters.
5.3.2.1 [S3-SBM3] Material impacts, risks and opportunities and their
interaction with strategy and business model
We define affected communities as the local population in the areas where the Company directly
operates and conducts its activities (the municipalities of Celje, Štore, Šentjur, and Mozirje). The
materiality assessment was conducted in accordance with ESRS 2 IRO-1, considering both actual and
potential impacts. These impacts, risks, and opportunities are inherently linked to the Company’s
business model and strategy (ESRS 2 SBM-3), as they influence business performance, our ability to
execute strategic projects, and the securing of a social licence to operate for future development.
Based on publicly available data and due diligence, we have not identified any material impacts,
risks, or opportunities within the value chain at this stage; however, we will continue to closely
monitor, analyse, and integrate this area as needs and opportunities arise.
Securing community acceptance and support is critical to our operational and development strategy,
particularly regarding the necessary adjustments to spatial planning documents. A key strategic risk
concerns the availability of space for the disposal of red gypsum—a byproduct of titanium dioxide
production. The ongoing project to backfill our waste disposal facilities directly impacts communities
in the immediate vicinity (Za Travnik and Bukovžlak); consequently, maintaining the support of these
stakeholders is essential to mitigating the risk of failing to deliver our long-term strategy.
Legacy environmental burdens at the Bukovžlak site result in the leaching of contaminants, posing a
potential risk to local food production. The Company is actively implementing remediation measures;
however, these represent a significant ongoing cost, with the potential for escalation based on new
findings from site investigations and the remediation process itself. Remediating these legacy issues
is an integral component of our commitment to responsible environmental stewardship and is
embedded within our long-term strategy, significantly influencing our social licence to operate.
Our dam structures, which retain liquid and solid waste, are earth-filled and consequently subject to
potential movement and, in extreme cases, breach. Recent periods of heavy rainfall have accelerated
these geological processes, increasing the risk of landslides. The integrity of these dams is
inextricably linked to our production processes and waste management. Our strategy prioritises the
systematic reduction of environmental risks, with specific allocations for investments in dam stability.
Climate-related impacts directly necessitate the ongoing adaptation of our technical and
infrastructural measures to mitigate the risk of business disruption and prevent harm to the local
community in the event of an infrastructure failure.
Technological processes within our operations carry the inherent risk of industrial accidents. Such
events could damage material resources, threaten business continuity, and negatively impact
affected communities. Our business model integrates robust preventive measures, including full
compliance with SEVESO and IED directives, alongside proactive stakeholder engagement, which
underpins our strategic decision-making regarding capital investment and risk management.
187
A core pillar of our long-term strategy is the partnership with the educational sector to
cultivate industry-relevant skills and foster a culture of sustainability. Our business model
includes targeted investments in human capital and the promotion of a positive corporate image.
These partnerships are instrumental in securing a pipeline of qualified personnel and strengthening
our reputation among youth and the wider public. For 17 years, we have hosted an annual
competition for primary and secondary schools, focusing on industry-related topics and sustainable
practices. We further facilitate this engagement through school excursions, mentorship programmes,
and structured work placements.
Through established channels, we provide affected communities with transparency regarding our
operations and foster open, mutual dialogue.
Social responsibility is woven into the fabric of our strategy. Our commitment to community support
via donations and sponsorships is pivotal to maintaining long-term social acceptance. These
initiatives are not merely contributions to local quality of life; they are strategically vital for
strengthening stakeholder relations and pre-empting resistance to future development projects. By
supporting local sports, cultural, and other community activities, we promote an active, healthy, and
sustainable lifestyle within the local environment and build strong business connections with our
stakeholders. Our focus remains on:
• Improving the physical and mental well-being of residents, particularly children, through
enhanced sporting opportunities;
• Preserving and developing cultural heritage to strengthen local identity and community
cohesion;
• Ensuring local accessibility and safety, with a focus on vulnerable groups, as well as
developing knowledge and skills that promote sustainable development and long-term
community progress.
5.3.2.2 [IRO - 1] Description of processes to identify and assess
material impacts, risks and opportunities related to S3
Based on our assessment of material impacts, risks, and opportunities (DMA), we have identified
several material aspects related to affected communities, which are presented in Table 100.
Table 100: Impacts, risks, and opportunities (IRO) in the S3 area
Material impacts, risks and/or opportunities
Category
Location/Value chain
Time horizon
Own operations
Downstream
value chain
Upstream value
chain
Short-term
Medium
-term
Long-term
Company's social impact on the quality of life in the
local community
Negative impact
x
x
Inability to remove red gypsum due to lack of local
community consent for spatial planning acts,
potentially causing serious business disruptions
Risk
x
x
Increased costs due to remediation of legacy
environmental burdens (preventing potential
negative impact on food due to contaminant
spread)
Risk
x
x
Heavy rainfall, such as intense downpours,
flooding, and landslides, may cause serious
business disruptions. Such weather conditions
Risk
x
x
188
increase the risk of damage and threaten the
stability of the Bukovžlak and Za Travnik dams.
Event – industrial accidents (potential negative
impact on the environment and human health due
to released emissions and social impact in case of
subsequent operational limitations)
Risk
x
x
Impact on the local community (air and water
emissions, dust, waste)
Negative impact
x
x
Participation in the educational system
(competitions, internships, field trips,
thesis/dissertation support, scholarships)
Positive impact
x
x
Established dialogue channels with affected
communities (advisory panel, grievance resolution,
Open Day)
Positive impact
x
x
Support for local sports, cultural, and other
community activities
Positive impact
x
x
5.3.2.3 [S3-1] Policies related to affected communities
Table 101: Overview of policies for managing significant impacts, risks, and opportunities related to affected communities
Policy, commitment or code title
Summary of key content
(Objectives, IROs)
Accountability
Alignment with
external
standards &
initiatives
Stakeholder
engagement &
consideration of
interests
Accessibility
Policy on establishing means for
reporting concerns, grievances,
and needs of affected
communities
The policy defines:
• principles in addressing
community concerns,
complaints, and needs
• reporting channels
• handling procedure
• possibility of appealing the
handling
• procedures for monitoring
and reporting
Management
Board
ESRS S3-2,
ESRS 2-GOV 3,
Principle 31 of
the UN Guiding
Principles on
Business and
Human Rights,
OECD
Guidelines for
Responsible
Business
Conduct
The policy takes
into account the
interests of
affected
communities
IRO 1,2,3,4,6 in
the table above
Cinkarna
Celje
Intranet
Act on the establishment and
operation of the advisory panel
for the City Municipality of Celje,
Municipality of Štore, and
Municipality of Šentjur; and Act
on the establishment and
operation of the advisory panel
for the Municipality of Mozirje
The policy defines:
• purpose and objectives
• responsibilities
• composition of the advisory
panel
• mode of operation of the
advisory panel
Management
Board
ESRS S3-2
ESRS 2-GOV 3,
Principle 31 of
the UN Guiding
Principles on
Business and
Human Rights,
OECD
Guidelines for
Responsible
Business
Conduct and
GRI 413
guidelines.
The policy takes
into account the
interests of
affected
communities
IRO 1, 2, 3, 6 in
the table above
Cinkarna
Celje
Intranet
Sponsorship and donation policy
The policy defines:
• Company's objectives in the
field of sponsorships and
donations
• measuring the performance
of the sponsorship and
donation management
process
• planning of funds intended
for sponsorships and
donations
• procedure for distributing
sponsorship and donation
funds
• selection criteria
• demonstrating the fulfilment
of obligations
Management
Board
ESRS S3 (S3-4
and S3-5),
ISO 26000,
GRI 413,
OECD
guidelines
The policy takes
into account the
interests of
affected
communities
IRO 1,5,7 in the
table above
Cinkarna
Celje
Intranet
In 2025, the Company adopted a Human Rights Policy, formalising its commitment to respecting
internationally recognised human rights across all business segments, including impacts on affected
communities. The Human Rights Policy is presented in detail in section S1 – Own workforce.
189
To implement these commitments, we ensure community engagement and effective remedial actions
in case of negative impacts, as confirmed by the results of responses to public queries and
grievances.
The Company has adopted the Policy on establishing means for reporting concerns, grievances, and
needs of affected communities, aimed at defining clear and accessible channels. The goal is to ensure
transparency, accountability, and effective resolution of issues raised by local residents and other
stakeholders.
To establish permanent dialogue, the Company formed an advisory panel in 2025, which
serves as a platform for information and collaboration regarding processes that impact
local communities. The mode of operation is detailed in the Rules on the formation and operation
of the advisory panel and the integration of information into co-decision-making.
The advisory panel is expected to meet twice a year to review our development and investment plans
and address the needs and initiatives of representatives of affected communities. For specific cases,
plans will also be presented to the municipal council. In 2025, the operation of the advisory panel at
the Celje site began in the autumn with an introductory meeting. The main purpose is to enable
regular dialogue with key stakeholders from the City of Celje and the municipalities of Štore, Šentjur,
and Mozirje, with the goal of fostering coexistence between industry and local communities, mutual
understanding, and creating added value through viable solutions for improving the quality of life. At
the first regular session, members were informed about the Company's activities, plans, and
sustainable development strategy. Cinkarna Celje, d. d., transparently presented all sustainability
measures, environmental impact reduction, investments in the local environment, and support for
youth, sports, and socially responsible projects. Special emphasis was placed on past activities
related to cooperation and communication with local communities.
Regarding the disposal of non-hazardous waste from titanium dioxide production (red gypsum,
serving as a filler material), we are implementing a long-term drainage plan for the Za Travnik
reservoir. To inform about the progress of works and measured emissions, a Commission for the
supervision of works in the Za Travnik landfill area has been established, consisting of community
members and company representatives, which has been active for 17 years.
Understanding that residents desire more detailed information, we organised Open Days at the Celje
and Mozirje sites in 2025.
By sponsoring agreed activities, the Company demonstrates its social responsibility and supports
projects contributing to sustainable development and improved quality of life. Simultaneously, this
allows for the expansion of business connections, strengthening stakeholder relations, and
positioning the Company as a reliable and socially responsible partner. Through its support, the
Company significantly impacts the involvement of youth in sports activities, the gathering of residents
in various associations, and the implementation of cultural activities and projects for improving safety
and infrastructure. This activity is described in the Sponsorship and Donation Policy.
In case of identified negative impacts on communities, the Company implements remedial actions,
including rehabilitation and strategy adjustments. These measures are developed in cooperation with
the affected communities.
Our policies are aligned with international UN and ILO guidelines, which we consider in preventing
impacts, engaging with communities, and implementing remedial actions.
190
5.3.2.4 [S3-2] Processes for engaging with affected communities about
impacts
The Company actively engages affected communities in impact management through several
channels: a mechanism for reporting concerns, grievances, and needs; annual meetings of the
Commission for the supervision of works at the Za Travnik landfill; and periodic consultations with
local community representatives (mayors and local community heads). Since 2025, the advisory
panel has played an enhanced role in integrating community perspectives into our decision-making
processes and shaping the Company’s sustainability policies.
5.3.2.5 [S3-3] Processes to remediate negative impacts and channels
for affected communities to raise concerns
The Company is committed to a timely response and the implementation of remedial actions should
it identify involvement in material negative impacts on affected communities. The process for
ensuring remedial action includes:
1. Notification and recording of the impact:
• Negative impacts may be detected by the Company through monitoring, internal audits, or
grievances received from affected communities;
• Our grievance mechanism facilitates reporting and recording within the Public Inquiries and
Grievances Register.
2. Investigation and impact assessment:
• The Safety, Health, and Environment Department, in collaboration with relevant operational
departments, verifies the validity of the grievance or detected impact;
• In cases of significant impact, external experts are engaged for the assessment (e.g., Faculty
of Civil and Geodetic Engineering, University of Ljubljana for dam stability).
3. Determination and implementation of remedial action:
• The action taken depends on the nature of the impact and may include, for example,
additional rehabilitation work on degraded areas, optimisation of treatment plants, additional
protective measures (e.g., strengthening dam safety), or corrective actions to prevent
recurrence.
4. Monitoring the effectiveness of the action:
• Following the implementation of an action, the Company verifies its effectiveness and adjusts
further activities accordingly.
The Company ensures that all remedial actions are carried out transparently, in dialogue with the
affected communities, and in accordance with our internal policies and international human rights
guidelines.
To ensure formal means for reporting concerns, grievances, and needs, we have established
dedicated online channels, including a telephone number, the email address info@cinkarna.si, and a
specific environmental impact reporting address, varstvo.okolje@cinkarna.si.
The Company ensures the availability and accessibility of communication channels with affected
communities by maintaining a variety of platforms:
• Online inquiry and grievance portal,
• Advisory panel,
• Focus groups, surveys, and individual interviews,
• Commission for the supervision of works in the Za Travnik landfill area,
• Cooperation with experts and independent institutions to assess the effectiveness of
implemented measures (e.g., dam safety impact),
• Periodic review of trends and analyses based on acquired data.
191
Regardless of the reporting channel, grievances concerning negative impacts are forwarded to the
Safety, Health, and Environment Department. The responsible officer records the grievance in the
Public Inquiries and Grievances Register (available on the intranet) and verifies whether the reported
impact is linked to our operations.
• If the grievance relates to an announced extraordinary event in our production, the
complainant receives an explanation of the causes and implemented measures, and the
record is updated accordingly.
• If no such data exists, further verification is initiated with the person responsible for the
process potentially linked to the impact.
The Management Board is informed of the grievance and becomes involved in the resolution process
as necessary. Once verification and action are complete, the information is provided to the Safety,
Health, and Environment Department, which notifies the complainant and closes the entry in the
register. In 2025, we recorded 24 grievances; all were addressed through verification and subsequent
action.
In 2024, the Company conducted a survey to assess the awareness of affected communities
regarding our grievance procedures and their level of trust in these mechanisms. The results showed
that 74% of respondents partially or fully agree that they know how to contact the Company. Nearly
70% of respondents trust the Company to regularly address and resolve their comments and
suggestions. 74% of respondents understand the information released to the public via the media
and social networks, and the same percentage agrees that our publicly available contact details are
sufficient for communication. Furthermore, 68% of respondents partially or fully agree that the
Company operates in an exemplary manner in the local environment and organises public events for
the community.
Policies on protection against retaliation are in place for individuals who use these channels to express
concerns or needs. Detailed information is available in [G1-1] Business Conduct Policies and
Corporate Culture.
5.3.2.6 [S3-4] Taking action on material impacts on affected
communities, and approaches to managing material risks and
pursuing material opportunities related to affected
communities, and effectiveness of those actions
Based on the results of focus groups and individual interviews, we have identified that affected
communities expect measures to improve quality of life that go beyond environmental impact
reduction. Residents have expressed a need for contributions to local employment and investments
in sports, promoting healthy and active leisure for all ages. There is also a strong desire for support
in infrastructure development, such as the construction of bike paths and the paving of local roads,
which will facilitate green mobility while reducing dust and traffic noise. Furthermore, communities
expect our continued support in ensuring higher safety standards, thereby strengthening local
resilience in the event of industrial accidents. In 2025, the Company allocated EUR 723,151 for co-
financing such initiatives. We are committed to continuing this support for selected projects over the
medium and long term.
We also continue to engage with the educational system; in 2024/25, we participated in
the process for the 17th time by hosting a competition for primary and secondary schools.
Our contribution also includes facilitating student work placements and industrial visits.
192
We have identified the improved cooperation with affected communities through the planned
introduction and implementation of advisory panel sessions as an important positive contribution.
We assess the effectiveness of our measures and initiatives as adequate, which is confirmed by:
• Findings from meetings of the Commission for the supervision of works in the Za Travnik
landfill area,
• Resolution of grievances recorded in the Public Inquiries and Grievances Register,
• Letters of appreciation from schools with which we cooperate.
At the Bukovžlak and Za Travnik locations, we are implementing rehabilitation and safety measures
aimed at rehabilitating degraded surfaces and ensuring dam stability.
These measures include several types of actions:
• Regular maintenance of high earth-fill dams to ensure their structural integrity;
• Backfilling of the Za Travnik reservoir, which eliminates the risk of a flood wave in the event
of a dam breach and enables the future restoration of the devastated area for beneficial use;
• Preparation of a conceptual backfilling plan for the Bukovžlak reservoirs, which would
similarly eliminate the risk of a flood wave in the event of a dam breach and facilitate the
future restoration of the devastated area for beneficial use;
• Rehabilitation measures for the Bukovžlak Non-Hazardous Waste Disposal Site.
At Za Travnik, filling the reservoir ensures the stability and safety of the dam structure, with an
implementation period of 5 to 24 years, depending on the agreed backfilling method. Following a
landslide caused by heavy rainfall in August 2023, we conducted emergency temporary stabilisation
and have since prepared project documentation for comprehensive rehabilitation. As a necessary
preliminary phase in 2025, we relocated the electric cable for the gypsum filtration facility and issued
a tender for the permanent landslide rehabilitation, which is scheduled for 2026.
We have also presented the local community with a conceptual proposal for a similar rehabilitation
solution for Bukovžlak, involving backfilling over a projected period of 24 years.
In 2025, we carried out preparatory works for the construction of a cut-off wall at the Bukovžlak
non-hazardous waste landfill, with completion scheduled for 2026. This will be followed by the
installation of a sealing cover and the construction of a diversion embankment. In the event of
damage to the Bukovžlak high earth-fill dam, this embankment would divert mudflows away from
the settlement, thereby preventing major material damage and human injury. The rehabilitation
process is set to be completed by 2029.
The Company’s chemical processes carry inherent risks of industrial accidents with potential impacts
on local communities. To mitigate these risks, we implement preventive equipment maintenance,
periodic fire risk assessments, and job classification based on risk evaluations. In the field of
environmental protection, we have adopted European standards and ensured strict adherence to the
IED and SEVESO directives. We conduct regular internal audits to proactively identify and address
potential deficiencies. Fire safety is maintained through a permanent fire brigade, practical drills, and
comprehensive training for both employees and external contractors. Furthermore, we have
appointed a permanent occupational safety coordinator and introduced enhanced instructions for fire
prevention and accident mitigation.
The effectiveness of these measures is reviewed annually through monitoring, technical observation,
and expert reviews of reports conducted by the Faculty of Civil and Geodetic Engineering at the
University of Ljubljana.
193
We regularly perform all prescribed monitoring of water and air emissions; further details are
available in section ESRS E2.
The Company maintains continuous oversight of all potential violations and incidents. We uphold our
responsibility by taking immediate action in the event of regulatory breaches and ensuring the
remediation of any impacts on the environment and local communities. Should any violations be
identified, we act in strict accordance with our commitments to respect the rights of affected
communities.
The Company provides the necessary resources to manage material impacts across three key areas:
• Financial (see table below): All measures are financed through current operations, with no
reliance on external funding. For legacy burdens, we have developed specific rehabilitation
projects based on field survey findings, financially evaluated them, and established the
appropriate environmental provisions;
• Personnel: Responsibility for managing material environmental impacts lies primarily with
the Safety, Health, and Environment Department. Social aspects are overseen by the
Management Board, with the support of the Human Resources Department and the Public
Relations Officer. Furthermore, we engage external experts to provide specialised
communication and technical support;
• Technical: These resources include continuous monitoring systems and established
communication platforms.
194
5.3.2.7 [S3-5] Targets related to managing material negative impacts, advancing positive impacts, and
managing material risks and opportunities
Table 102: Overview of objectives, measures, key activities, and resources
Strategic goal
Measure
Metrics
Period
Number of
activities –
target for
the period
Baseline
year
Number of
activities -
baseline year
Number of
activities
2025
Number
of
activities
- target
Target value
for the period
in EUR/year
Value
baseline
year
(EUR)
Value 2025
(EUR)
Prevent
industrial
accidents with an
impact on
affected
communities
Implementation
of activities to
reduce the risk of
industrial
accidents
Number of activities
From
2025
to
2030
one practical
exercise/year
4 tactical
exercises/per
year
2024
1 practical
exercise
(NNP)/ 4
tactical
exercises (PGE
CC) + 1 tactical
exercise in
Mozirje
1 practical
exercise (Civil
protection -
earthquake
2025)/ 3
tactical
exercises
(volunteer fire
service of CC)
+ 1 tactical
exercise in
Mozirje
4,000
0.00
0.00
(Costs of the
regional practical
exercise covered
by the civil
protection of the
Republic of
Slovenia
Maintain dam
stability at the
highest safety
standard
Reducing the risk
of collapse of
high
embankment
barriers by
implementing
necessary
maintenance
works,
prescribed
supervision, and
gradual
backfilling
Number of completed sets
(regular maintenance,
backfilling, remediation of
legacy burdens)
From
2025
to
2030
3/year
2024
3 activities
(regular
maintenance
works, dry
backfilling,
as well as
works on the
remediation
of legacy
burdens
were carried
out -
installation
of drainage
ribs on VNP
ZTR and
emergency
remediation
of the
landslide
toe)
3 activities
(regular
maintenance
works, dry
backfilling, as
well as works
on the
remediation of
legacy burdens
were carried
out -
remediation of
the electrical
cable on the
landslide
route),
preparation of
documentation
for the
comprehensive
remediation of
the landslide
and the
reinforcement
embankment
on VNP ZTR.
670,000 −
maintenance
works
490,000 −
backfilling
3,672,713
(environmental
provision for the
remediation of
legacy burdens
at Za Travnik
and Bukovžlak)
EUR
291,713.48
Maintenance
works
EUR
473,769.63 -
dry backfilling
EUR
228,561.63
for ZTR and
BUK
combined
EUR 448,531.72
Maintenance
works
EUR 520,709.64
- dry backfilling
EUR 89,827.12 for
ZTR and BUK
combined
Minimise the
potential impact
of legacy
burdens on food
Redirection of
groundwater
flows towards the
pumping station
Cut-off wall construction
From
2025
to
2026
1
2024
1 activity - a
tender for
the selection
of a
1 activity -
preparatory
works for the
cut-off wall
1,760,599
(environmental
provision for the
cut-off wall at
0.00
291,510.04
195
contractor
took place
were carried
out
the non-
hazardous
waste landfill)
Increase the
involvement of
local residents in
decision-making
processes and
improve
transparency
Advisory panel
meetings
Number of
meetings
From
2025
to
2030
Twice a year
for the 4
municipalities
where the
Company
operates
2024
0
2
2,000
0.00
607.50
Raising
awareness
among
young
people
about
sustainable
practices
and the
importance
of industry
Participation
in the
educational
programme
Number
of participations
From
2025
to
2030
More than
100
participations
annually
2024
82
94
40,000
41,808.00
63,178.00
Strengthen the
Company's
contribution to a
better quality of
life in the local
community
Sponsorships
and donations
Amount of invested
funds
From
2025
to
2030
Selected
projects for
the current
year
2024
Selected projects
for the current
year
Selected
projects for
the current
year
600,000 to
1,000,000
(depending
on the
Company's
business
performance)
726,849.10
723,151.73
196
The Company considered the expectations of affected communities in the target-setting process
based on information gathered through focus groups and individual interviews with various decision-
makers, including details on the nature and extent of our direct engagement with affected
communities. We also incorporated views received through the established public inquiry and
grievance mechanism and via the Commission for the supervision of works in the Za Travnik reservoir
backfilling area. With the formation of the advisory panel in 2025 and other forms of engagement—
such as participation in municipal council sessions, Open Days, and collaboration with the Teharje
Local Community Commission—we provide local residents with insight into our operations and
projects while fostering two-way communication. Consequently, they are kept informed of our plans,
and we are updated on their initiatives and expectations.
In 2025, in accordance with the Rules on the formation and operation of the advisory panel, and
following the appointment of its members, we held one meeting in Celje and a separate session in
Mozirje. At these meetings, we briefed members on the Company’s activities, presented the formats
and results of our cooperation with local communities, and exchanged views, initiatives, and
proposals.
Affected communities are thus involved in an ongoing dialogue and the submission of initiatives
regarding the Company’s material impacts, activities, and projects. However, during the reporting
period, they were not yet formally integrated into a structured process for identifying improvements
based on the performance assessment of implemented measures. The Company is currently
exploring further opportunities to upgrade participatory mechanisms, aiming to strengthen the
inclusion of affected communities in this phase of the impact, risk, and opportunity management
process as well.
197
5.4 [G1] Business conduct
Disclosure requirements regarding the role of administrative, management, and supervisory bodies
in relation to business conduct, along with the expertise of the Management Board and Supervisory
Board members, are detailed in section ESRS 2 – General disclosures GOV-1.
5.4.1 [IRO-1] Description of the processes to identify and assess
material impacts, risks and opportunities
Table 103: IRO in the area of G1
Material impacts, risks and/or
opportunities
Category
Location/Value chain
Time horizon
Own operations
Downstream
value chain
Upstream value
chain
Short-term
Medium
-term
Long-term
Whistleblower protection and
established mechanisms in accordance
with the Reporting Persons Protection
Act (ZZPri)
Actual positive
impact
x
x
Supplier relationship management,
including payment practices
Actual positive
impact
x
x
Number of reported and investigated
cases of anti-corruption and ethical
practices
Actual positive
impact
x
x
Business conduct is central to our business model, which is founded upon responsible management,
regulatory compliance, and ethical operations. Since a significant portion of our operations relies on
our own workforce and workers across the value chain, our commitment to transparent, fair, and
legal practices is fundamental.
The Company identifies material positive impacts in this area in accordance with the ESRS 2 IRO-1
standard and is dedicated to the continuous improvement of its management mechanisms. In recent
years, the Company has comprehensively updated its internal regulatory framework and established
systemic mechanisms to ensure consistent business conduct and alignment with best practices in
corporate governance.
Adherence to relevant legislation and international guidelines for ethical business conduct remains a
top priority—not only to mitigate the direct legal and financial consequences of non-compliance but
also to foster a stable, competent, and trustworthy workforce in the long term.
Promoting a responsible corporate culture that protects employees and other stakeholders from
potential human rights violations, prevents corruption, and ensures whistleblower protection is an
integral part of our business strategy. Although the Company does not perceive systemic risks in this
area, we take a proactive approach to managing and controlling these issues, thereby strengthening
our social responsibility and maintaining a trustworthy business environment.
In this framework, the Company has implemented secure internal channels for reporting violations
in accordance with the Reporting Persons Protection Act (ZZPri). This enables employees and other
stakeholders to submit reports safely, with guaranteed anonymity, whistleblower protection, and
impartial case handling.
As an influential market participant, the Company is committed to responsible and transparent
payment practices, which represent an essential component of our business conduct standards. We
strive for fair and timely financial transactions with our suppliers and business partners, ensuring
198
that our policies remain guided by the principles of integrity, transparency, and regulatory
compliance.
The identification of material governance risks draws upon expert insights from our Legal
Department, its in-depth knowledge of the organisation, and ongoing analysis of internal documents,
policies, and guidelines. In line with best practices, we focus on comprehensive and regular
assessments of business conduct risks, considering both internal and external factors.
During the reporting period, the Company appointed an Integrity and Compliance Officer. While a
formal integrity training programme is still in development, the Officer’s initial focus is to establish
the necessary foundations and a structured training framework for future implementation.
Through these measures, the Company ensures a high level of operational compliance, proactively
manages governance-related risks, and strengthens its long-term reputation and market stability.
In the context of addressing corruption and bribery risks, the Company identifies functions and roles
associated with procurement procedures, supplier selection and management, and other comparable
decision-making processes as the most exposed. We address these areas through robust control
mechanisms (such as the four-eyes principle) and established policies, including the Code of Ethical
Conduct and Work and the Ethical Code for Procurement Officers.
5.4.2 [G1-1] Business conduct policies and corporate culture
The Company has adopted a series of policies that promote a culture of business integrity and
strengthen stakeholder trust. These policies are underpinned by the Code of Ethical Conduct, which
defines compliance with legislation and high ethical standards.
The Company is committed to responsible management, including effective mechanisms for the
protection of reporting persons and the handling of reports in accordance with internal procedures
and the Reporting Persons Protection Act (ZZPri). We accept reports through all channels and handle
them impartially.
Through dialogue with employees, the Supervisory Board, business partners, and the community,
we effectively manage risks and support sustainable growth. Our policies and code provide a clear
framework for transparent, ethical, and compliant operations.
The Company has established several policies and internal acts that regulate business conduct and
support a corporate culture of integrity, transparency, and compliance, as described in the table
below.
These policies also address material impacts, risks, and opportunities related to business conduct,
as identified in the materiality assessment. Key documents include:
• Code of ethical conduct and work (adopted in 2021): Defines fundamental principles of
integrity and legal operations for all employees. The Code supports positive impacts within
own operations, especially regarding the prevention of unethical practices and ensuring
professional behaviour. It serves as a guide for daily decision-making, with long-term effects
on corporate culture;
• Rules on the establishment of an internal reporting channel under the ZZPri (adopted in
2023): Establishes mechanisms for the protection of reporting persons and enables the safe
reporting of irregularities. This rule directly addresses positive impacts within own operations
regarding protection, with short- and long-term effects on transparency and trust;
• Code of ethics for procurement officers (adopted in 2023, updated in 2024): Defines expected
conduct in managing supplier relations, including principles of honesty, responsible
199
purchasing, and compliance with payment deadlines. It addresses impacts in the downstream
value chain, particularly in the field of managing supplier relations and adhering to payment
practices, with identified impacts primarily in the medium-term period;
• Code of sustainable business practices for business partners of Cinkarna Celje, d. d., (2024,
version 2): Expresses expectations and requirements towards business partners and their
value chains (from the perspective of material indirect business relations of Cinkarna Celje,
d. d.).
The aforementioned policies are integral to a broader framework of risk management and ethical
conduct, contributing to the gradual integration of sustainability into the business culture and
decision-making processes.
The Code of ethical conduct and work of Cinkarna Celje, d. d., defines procedures for preventing,
detecting, and addressing cases of corruption and bribery. All employees and management are
committed to high ethical standards and legislative compliance, demonstrating full transparency and
professional integrity in their conduct. An essential part of preventing corruption is avoiding and
reporting potential conflicts of interest, as these can affect the impartiality of decision-making.
Special attention is also paid to the protection of trade secrets and confidential information, the
unauthorised disclosure of which is strictly prohibited.
The Company emphasises the importance of fair business and competitiveness in a legal and ethical
manner, without manipulation or exploitation of stakeholders. If employees detect violations of the
Code, they can report them anonymously via email, in writing, or through designated mailboxes. All
received reports are reviewed by the Business Ethics Committee, which conducts investigations and
ensures that findings are handled in accordance with internal rules. Alleged violators are granted the
right to defend themselves, while confirmed violations are sanctioned in accordance with applicable
legislation and internal acts. The Company strictly prohibits any retaliation against whistleblowers,
thereby ensuring their protection. Additionally, it adheres to internal rules and legislation for the
prevention of money laundering and other illegal practices.
The Company does not directly refer to UNCAC in its policies addressing anti-corruption and bribery,
but it does follow its principles.
The Company has a standardised and transparent process for internal reporting of violations, in
accordance with the Reporting Persons Protection Act (ZZPri). Procedures are conducted by a
confidential counsellor, who is separate from the Company's management structure, ensuring
impartiality and protection of the reporting person's identity. Reports are possible through several
secure channels, either anonymously or by disclosing identity. The confidential counsellor also has a
deputy, ensuring quick responsiveness and reducing potential complications due to conflicts of
interest.
The confidential counsellor handles all reports in accordance with internal procedures and notifies
the reporting person of findings and implemented measures once the process is concluded. In case
of identified violations, the confidential counsellor proposes appropriate measures for eliminating
irregularities to the management, while the reporting person's personal data remains confidential. If
a report involves a suspicion of a criminal offence prosecuted ex officio, the confidential counsellor
notifies the competent authorities and files a criminal complaint if necessary, forwarding personal
data only upon a substantiated request from the prosecutor's office. The reporting person is informed
of the outcome and implemented measures; in the case of a longer process, they receive a status
update after three months.
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Table 104: Key policies, standards and other documents governing business conduc
Policy,
commitment or
code title
Summary of key
content (Objectives,
IROs)
Accountability
Alignment with
external standards
& initiatives
Stakeholder
engagement &
consideration of
interests
Accessibility
Code of ethics for
procurement
officers
Demonstration of
integrity, ethical
conduct, and
trustworthiness, free
from conflicts of
interest.
Director of
Procurement
and Logistics
Code of Ethics of the
Purchasing
Association of
Slovenia
Reflects a balanced
approach fostering
effective collaboration
with all stakeholders and
promoting long-term,
sustainable, and ethical
procurement practices.
Cinkarna Celje,
d. d., Intranet
Code of
sustainable
business practices
for business
partners
Ensuring compliance
with all applicable
regulations and
meeting the
requirements defined
in the Code
Management
Board, Director
of Procurement
and Logistics,
sales and
procurement
staff
Health and safety at
work
Respect for human
rights
Ethical conduct,
Environment
Compliance of
materials
and goods
Ensuring responsible and
transparent practices
throughout the value
chain.
Cinkarna Celje,
d. d.,Intranet
Procurement
policy
Commitment to
meeting the highest
procurement
standards and
commitments to
ensure ethical,
sustainable, cost-
effective, and
regulated
procurement of raw
materials and services
Management
Board, Director
of Procurement
and Logistics,
employees
Code of Ethics of the
Purchasing
Association of
Slovenia
Stakeholder collaboration
in implementing and
achieving optimal value,
balance, accountability,
and compliance within the
procurement process.
Cinkarna Celje,
d. d., Intranet
*Code of ethical
conduct and work
(G1-1, 10a)
Rules on the
establishment of
an internal
reporting channel
under the ZZPri
(G1-1, 10c)
Ensuring the
protection of
whistleblowers and
the establishment of
reporting channels
Head of Legal
Department
Reporting Persons
Protection Act
(ZZPri), which sets
out
obligations
regarding
the establishment of
secure channels for
reporting
irregularities,
protection of the
identity
of reporting persons
and protection
against
retaliation.
When drafting the Rules
on the
Establishment of an
Internal
Reporting Channel under
the
Reporting Persons
Protection
Act (ZZPri), the Company
took
into account the interests
of
key stakeholders,
especially
employees, and
regulatory
authorities.
Cinkarna Celje,
d. d., Intranet
Quality assurance,
environmental,
safety and health,
and sustainable
development
policy
Ensuring quality,
achieving key
strategic objectives of
the
Company, compliance
with the principles of
sustainable
development,
achieving satisfaction
of employees, owners
and business partners
Head of Safety,
Health and
Environment
Department
SO 9001
(Quality
management
system)
ISO 14001
(Environmental
management
system)
ISO 45001
(Occupational
health
and safety
management
system)
When creating the Quality
Assurance,
Environmental
Management, Health and
Safety and Sustainable
Development Policy, the
Company took into
account the
interests of key
stakeholders,
including employees,
business
partners, local
communities and
regulatory authorities.
Cinkarna Celje
d. d., Intranet
*See section: S1 – 1 Policies related to own workforce.
5.4.3 [G1-2] Management of relationships with suppliers
The Company is committed to complying with laws, regulations, and rules, as well as implementing
fair corporate governance practices and maintaining integrity across all business processes.
Procurement processes are conducted in accordance with adopted internal documents—such as
instructions, codes of conduct, and supplier management guidelines—with the primary objectives of
ensuring a high level of integrity, a level playing field, fair payment practices, and the adherence to
sustainability principles by all participants in the procurement process. Internal documents define
201
clear roles for managing supply risks and collaborating with suppliers to find the best supply
solutions, ensure high quality, and develop mutual partnerships. Although the Company does not
have a specific policy for preventing late payments to SMEs, it nevertheless adheres to high standards
and respects payment practices, as evidenced by the receipt of the Platinum Credit Excellence Award.
The Company has established formalised policies and procedures for managing supplier relationships,
including those with small and medium-sized enterprises (SMEs). These policies are based on the
principles of lawful, fair, and responsible business conduct, promoting long-term, stable, and
transparent business relationships within the supply chain.
Supplier relationship management includes clearly defined responsibilities, internal control
mechanisms, and regular monitoring of the compliance of business practices with the Company’s
internal rules and applicable legislation. The monitoring of key indicators—such as average payment
terms for SMEs, the proportion of overdue liabilities, and compliance with internal targets for 100%
settlement of liabilities upon maturity—enables the timely identification of any discrepancies. When
these occur, appropriate corrective measures are implemented, including adjustments to invoice
approval procedures, additional oversight of specific supplier groups, or enhanced communication
aimed at the swift resolution of outstanding matters.
While a specific policy for preventing late payments to SMEs is not in place, monitoring mechanisms
and a high degree of compliance with payment practices have proven to ensure the timely fulfilment
of obligations. The reliability and professional conduct of our operations are further confirmed by the
attainment of the Platinum Credit Excellence Award.
The Company expects its suppliers and business partners to respect our values and commitments,
ethical standards, the Code of ethics, and the Code of sustainable business practices for business
partners.
By correctly managing the upstream value chain and respecting workers within it, the Company can
achieve greater efficiency, quality, and market competitiveness, while contributing to more
sustainable operations. The objectives of the quality management policy regarding the environment,
health and safety, sustainable development, and the commitments set out in the Code of sustainable
business practices for business partners are key elements contributing to sustainability within our
Company’s value chain. By adopting this Code, we set clear guidelines and expectations for our
business partners throughout the entire value chain. They commit to upholding the same standards
of quality, sustainability, and social responsibility that we advocate ourselves.
Our products and raw materials are part of global supply chains. The supply chain includes suppliers
of raw materials (primary and secondary), packaging, equipment, spare parts, technical materials,
services, and energy.
Suppliers and their activities vary by business unit. Suppliers are divided into six key groups:
• Suppliers of titanium-bearing ores,
• Suppliers of other raw materials,
• Suppliers of packaging materials,
• Suppliers of equipment, spare parts, and technical materials,
• Service providers,
• Energy suppliers.
In 2025, more than 77% of the annual turnover was generated with suppliers and partners who had
either established and implemented their own sustainability codes or were signatories to the
Company’s Code of sustainable business practices for business partners. Together with our suppliers
and partners, we formed and implemented sustainability and social responsibility commitments. We
202
maintained established communication and awareness channels with the upstream value chain
through regular business visits, the provision of required data, supplier assessments, due diligence,
and the review of accessible publications and reports, among others.
The Company identified no material actual or potential negative environmental or social impacts
within the supply chain through its communication channels and due diligence of the upstream value
chain. Although potential risks of child labour were noted regarding suppliers from third countries,
such as those in Africa, the Company verified that no such issues existed through its due diligence
processes.
5.4.4 [G1-3] Prevention and detection of corruption or bribery
Employees are expected to ensure that the Company’s interests take precedence over personal or
third-party interests in all professional activities and business decisions. Our competitiveness is
predicated on enhanced productivity, rejecting unethical or unlawful practices in favour of the highest
standards of integrity. These principles are formalised in the Code of Ethical Conduct and Work and
underpinned by a robust whistleblowing mechanism for reporting misconduct.
The Company maintains a standardised framework for the prevention, detection, and investigation
of allegations or instances of corruption and bribery. Employees may report suspected misconduct
on either a disclosed or anonymous basis via dedicated on-site drop boxes or the secure email
address razkritja@cinkarna.si. The Ethics Committee is tasked with reviewing submitted reports,
initiating appropriate action, or referring cases to the relevant departments for resolution. This
Committee comprises a member of the Management Board alongside two senior executives—typically
the Head of Human Resources and the Head of Legal Affairs. The Ethics Committee reports directly
to the Management Board, which subsequently updates the Supervisory Board as part of its regular
reporting cycle. These procedures are detailed in full within the Code of Ethical Conduct and Work.
Currently, the Company does not deliver specific training programmes focused on the prevention
and detection of corruption or bribery.
5.4.5 [G1-4] Confirmed incidents of corruption or bribery
In 2025, a Compliance and Integrity Officer was appointed in the company.
During the reporting period, the Company recorded one report related to a breach of the Code of
Ethical Conduct and Work. The Ethics Committee investigated the matter and concluded that the
allegation was unsubstantiated.
The Company implements preventive measures to counter corruption and unethical behaviour,
comprising the enforcement of the Code of Ethical Conduct and Work, the operation of a
whistleblowing system, and the review of reports by the Ethics Committee.
In the reporting period, the Company recorded no other reports of corruption or bribery, nor were
there any convictions or fines for breaches of anti-corruption and anti-bribery legislation, or other
related enforcement measures.
The Company tracks an indicator for the number of reported and confirmed cases of corruption or
bribery during the reporting period. This indicator encompasses all reports submitted through
established internal whistleblowing channels, as well as cases identified via internal controls or audit
procedures. Only cases confirmed through the formal review process are included in the final count.
203
This indicator covers events within the Company’s own operations as part of its comprehensive
reporting. The Ethics Committee reports its activities and findings to the Management Board and the
Supervisory Board. Based on these reports, the Management Board monitors the effectiveness of
preventive measures and introduces further improvements to the compliance management system
as necessary.
The specified indicators have not been subject to external validation.
5.4.6 [G1-6] Payment practices
The Company’s payment practices are integral to its responsible business conduct and the
management of supplier relationships.
The Company adheres to internal Operating Procedures (OPs), standards, and guidelines regarding
payment practices and terms. Our standard payment terms are categorised by the type of material
or service into direct and indirect suppliers. Standard terms for direct suppliers range from 45 to 90
days, while terms for indirect suppliers range from 30 to 60 days. Notably, 98.6% of payments
(calculated as the proportion of on-time payments to total liabilities, excluding advances) were
executed in accordance with these or other contractually agreed terms.
On average, payments to suppliers are settled upon their due date, with an average payment period
exceeding 45 days, applicable to more than 62% of total annual expenditure (or total invoices
received). The remaining payments may be subject to extended terms due to specific contractual
agreements with certain suppliers.
In calculating the G1-6 metric, the Company includes all received invoices, both due and not yet due.
The numerator consists of all non-overdue invoices, while the denominator comprises all invoices,
with advances and disputed items excluded from the methodology. This approach ensures
consistency and transparency in the calculation, enabling full comparability of the G1-6 metric with
ESRS standards.
The Company does not differentiate its payment practices based on supplier size, thereby ensuring
fair treatment of SMEs (small and medium-sized enterprises) and other economic entities outside
the European Union. This policy supports the financial stability and business continuity of all partners,
including SMEs and non-EU entities. Furthermore, payment practices do not vary by geographic
region or country (Slovenia, EU, non-EU). The Company conducts 52% of its purchasing with
Slovenian suppliers, 74% with EU suppliers, and 26% with suppliers from outside the EU. Compared
to 2024, payment practices have remained substantially unchanged.
To ensure the efficient management of accounts payable, the Company has established structured
guidelines and internal control processes. These processes define every stage of invoice handling,
including receipt, review, approval, and payment in accordance with the agreed payment terms.
Suppliers are encouraged to submit invoices electronically to streamline the process and mitigate
potential payment delays. In the event of discrepancies, suppliers are notified immediately to ensure
swift resolution. Payments are processed via direct debit. During the reporting period, the Company
was not involved in any legal proceedings related to late payments.
204
6 Accounting report
6.1 Financial statements
6.1.1 Statement of financial position of the Company
in EUR
Notes
31/12/2025
31/12/2024
ASSETS
Non-current (long-term) assets
Intangible assets
1
2,142,639
2,408,779
Tangible fixed assets
2
116,232,009
111,699,615
Financial assets at fair value through other comprehensive
income
3
1,709,631
1,287,325
Other non-current assets
4
115,376
105,470
Deferred tax assets
5
1,192,860
1,462,488
Total non-current (long-term) assets
121,392,516
116,963,678
Current assets
Inventories
6
54,460,671
58,969,428
Financial receivables
7
38,456,959
47,214,859
Trade receivables
8
26,096,057
30,243,586
Income tax receivable
1,283,140
0
Cash and cash equivalents
9
19,122,785
17,731,407
Other current assets
10
424,474
230,760
Total current assets
139,844,086
154,390,040
Total assets
261,236,601
271,353,718
205
in EUR
Notes
31/12/2025
31/12/2024
CAPITAL AND LIABILITIES
Owners' capital
11
Called-up capital
20,229,770
20,229,770
Capital reserves
44,284,976
44,284,976
Profit reserves
125,036,192
125,078,814
Fair value reserve
-1,354,842
-1,650,342
Retained earnings
28,558,990
23,093,258
Total capital
216,755,086
211,036,476
Non-current liabilities
Provisions for employee benefits
12
3,819,086
3,748,722
Other provisions
13
12,746,394
14,302,270
Non-current deferred income
14
861,858
873,579
Total non-current liabilities
17,427,338
18,924,572
Current liabilities
Financial liabilities
15
60,832
29,915
Trade payables
16
24,885,606
36,124,537
Income tax payable
0
4,019,469
Liabilities under contracts with customers
17
0
0
Other current liabilities
18
2,107,739
1,218,750
Total current liabilities
27,054,177
41,392,670
Total liabilities
44,481,515
60,317,242
Total capital and liabilities
261,236,601
271,353,718
The notes to the financial statements are an integral part of the financial statements and should be
read in conjunction with them.
206
6.1.2 Income statement for the period from 1 January to 31 December
in EUR
Notes
2025
2024
Revenue from contracts with customers
20
198,801,281
200,285,413
Change in value of inventories of products and work in progress
5,012,815
-2,142,794
Capitalised own products and own services
2
4,167,299
3,372,409
Cost of goods and materials sold
22
-225,635
-100,483
Cost of materials
22
-115,913,675
-110,211,321
Cost of services
22
-18,765,200
-17,233,265
Labour costs
22
-35,623,561
-33,774,717
Depreciation
22
-13,871,225
-12,900,809
Other operating income
21
2,039,797
2,620,709
Other operating expenses
22
-3,327,431
-3,250,896
Impairments and write-offs of trade receivables
-67,759
0
Operating profit or loss
22,226,705
26,664,244
Financial income
23
1,355,916
1,986,327
Financial expenses
23
-266,140
-123,439
Financial result
1,089,776
1,862,888
Pre-tax profit/loss
23,316,482
28,527,133
Current income tax
-3,670,216
-5,403,661
Deferred income tax
-176,720
-36,222
Income tax
24
3,846,936
5,439,882
Net profit for the year
19,469,546
23,087,250
Basic and diluted net earnings per share
2.41
2.86
The notes to the financial statements are an integral part of the financial statements and should be
read in conjunction with them.
207
6.1.3 Statement of other comprehensive income for the period from 1
January to 31 December
in EUR
2025
2024
Net profit
19,469,546
23,087,250
Other comprehensive income for the year
Other comprehensive income for the year that will not be recognised in the
income statement in the future
Change in fair value through other comprehensive income
422,306
-271,207
Impact of deferred taxes
-92,908
59,665
Total net other comprehensive income for the year that will not be
recognised in the income statement in the future
329,398
-211,542
Other comprehensive income for the year that will be recognised in the income
statement in the future
Revaluation of post-employment benefits
-33,899
-196,314
Total net other comprehensive income for the year that will be recognised in
the income statement in the future
-33,899
-196,314
Total other comprehensive income for the year (after tax)
295,499
-477,856
Total comprehensive income for the year
19,765,045
22,679,394
The notes to the financial statements are an integral part of the financial statements and should be
read in conjunction with them.
208
6.1.4 Statement of changes in equity and determination of
distributable profit
In EUR
2025
Called-up
capital
Capital.
reserves
Profit reserves
Fair value
reserves
Retained earnings
Total
capital
Statutory
reserves
Reserves
for own
shares
Own
shares
Other
profit
reserves
Profit or
loss
carried
forward
Net profit
for the
period
Opening balance of the period
20,229,770
44,284,976
16,931,435
5,646,149
-5,646,149
108,147,379
-1,650,342
6,007
23,087,251
211,036,476
Changes in equity -
transactions with owners
0
-42,622
14,003,813
13,961,191
Share buyback
-42,622
-42,622
Cancellation of treasury shares
Payment of dividends
14,003,813
14,003,813
Total comprehensive
income for the period
295,499
0
19,469,546
19,765,045
Entry of net profit or loss for the period
19,469,546
19,469,546
Other components of comprehensive
income for the period
295,499
295,499
B3. Changes in equity
42,622
-42,622
23,087,251
-23,087,251
0
Allocation of the residual
part of net profit for the
period to other components
of capital
0
Allocation of part of
reported net income to
other components of capital
as decided by management
and supervisory bodies
23,087,251
-23,087,251
Creation of reserves for treasury
shares
42,622
-42,622
0
Closing balance of the period
20,229,770
44,284,976
16,931,435
5,688,771
-5,688,771
108,104,757
-1,354,843
9,089,445
19,469,546
216,755,086
DISTRIBUTABLE PROFIT
9,089,445
19,469,546
28,558,990
In EUR
2024
Called-up
capital
Capital.
reserves
Profit reserves
Fair value
reserves
Retained earnings
Total
capital
Statutory
reserves
Reserves
for own
shares
Own
shares
Other
profit
reserves
Profit or
loss
carried
forward
Net profit
for the
period
Opening balance of the period
20,229,770
44,284,976
16,931,435
4,814,764
-4,814,764
102,652,061
-1,242,486
32,047,999
6,326,704
221,230,458
Changes in equity -
transactions with owners
-831,386
32,041,992
31,210,607
Share buyback
-831,386
-831,386
Cancellation of treasury shares
Payment of dividends
32,041,992
32,041,942
Total comprehensive
income for the period
-407,856
0
23,087,250
22,679,395
Entry of net profit or loss for the period
23,087,250
23,087,250
Other components of comprehensive
income of the reporting period
-407,856
0
-407,856
B3. Changes in equity
831,386
5,495,319
0
-6,326,704
0
Allocation of the residual
part of net profit for the
period to other components
of capital
Allocation of part of reported net
income to other components of capital
as decided by management
and supervisory bodies - 831.386a
6,326,704
0
-6,326,704
0
Creation of reserves for treasury
shares
831,386
-831,386
0
Closing balance of the period
20,229,770
44,284,976
16,931,435
5,646,149
-5,646,149
108,147,379
-1,650,342
6,007
23,087,251
211,036,476
DISTRIBUTABLE PROFIT
6,007
23,087,251
23,093,258
The notes to the financial statements are an integral part of the financial statements and should be
read in conjunction with them.
209
6.1.5 Cash flow statement
in EUR
2025
2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit or loss before tax
23,316,482
28,527,133
Adjustments for:
14,369,043
16,055,704
Amortisation and depreciation +
13,871,225
12,900,809
Profit/loss on sale of fixed assets
15,876
15,038
Impairment/write-down (reversal of impairment) of
assets
1,240,091
701,149
Net decrease/increase in allowance for receivables
67,759
0
Net financial income/expenditure
-1,089,776
1,862,888
Long-term provisioning
263,868
575,8190
Cash flow from operating activities before change in
net current assets (working capital)
-12,878,271
11,566,125
Change in trade receivables
4,079,770
1,301,422
Change in other non-current and current assets
-193,714
-21,732
Change in inventories
4,244,010
-5,127,948
Change in trade payables
-15,182,867
16,806,887
Change in provisions
-1,749,382
-25,729
Change in deferred income
-11,721
106,165
Change in other current liabilities
888,989
23,076
Change in liabilities under contracts with customers
0
-11,351
Income tax paid
-4,953,356
-1,484,665
Net cash flow from operating activities
24,807,254
56,148,961
CASH FLOWS FROM INVESTING ACTIVITIES
Investment income
10,129,692
1,746,816
Income from interest earned
1,311,450
1,725,767
Income from interest earned on dividends
44,466
6,011
Income from disposal of tangible fixed assets
15,876
15,038
Income from disposal of current financial assets
8,757,900
0
Expenditure on investments
-19,525,397
-22,900,906
Expenditure on acquisition of intangible assets
-251,914
-1,772,185
Expenditure on acquisition of tangible fixed assets
-19,273,483
-12,529,978
Expenditure for acquisition of financial receivables
0
-8,598,742
Net cash flow from investing activities
-9,395,705
-21,154,090
Cash flows from financing activities
Income from financing activities
30,917
0
Proceeds from increase in financial liabilities
30,917
0
Expenditure on financing activities
-14,051,088
-32,951,269
Expenditure on repayment of financial liabilities
0
-73,777
Expenditure on interest paid
-4,653
-4,114
Payments for the purchase of treasury shares
-42,622
-831,386
Expenditure on repayment of dividends and other profit
shares
-14,003,813
-32,041,992
Net cash flow from financing activities
-14,020,171
-32,951,269
Closing balance of cash and cash equivalents
19,122,785
17,731,407
Net increase/decrease in cash and cash equivalents
1,391,378
2,043,602
Opening balance of cash and cash equivalents (01/01)
17,731,407
15,687,805
The notes to the financial statements are an integral part of the financial statements and should be
read in conjunction with them.
Due to rounding, differences of +/- EUR 1 may occur.
210
6.1.6 Notes to the financial statements
I. Introductory notes to the financial statements
Cinkarna, kemična industrija Celje, d. d. is organised as a joint stock company, with its registered
office at Celje, Kidričeva 26, and is entered in the Court Register of the Court of Celje under number
I-402-00. The Company's main activity is manufacture of chemicals (SKD 20.120), specifically the
production of titanium dioxide.
The financial part of the Annual Report is prepared for Cinkarna Celje, d. d., and comprises the
financial statements with notes of Cinkarna Celje, d. d. By the decision of the 25th General Meeting
of Shareholders of Cinkarna Celje, d. d., the Company switched from Slovenian Accounting Standards
to International Financial Reporting Standards on 15 June 2021. As a result, all the Company's
financial statements are prepared in accordance with International Financial Reporting Standards
(IFRS) as adopted by the European Union.
The financial statements of Cinkarna Celje, d. d., are presented in euros, without decimals. They
form an integral part of the Annual Report 2025, which is published on the Ljubljana Stock Exchange's
electronic information system SEOnet and on the website of Cinkarna Celje, d. d.
(https://www.cinkarna.si/si/info-center/objave).
II. Introductory notes on reporting standards
Following the transfer of its shares to the Prime Market on 4 February 2021, Cinkarna Celje, d. d.,
prepared its financial statements as at 31 December 2025 in accordance with International Financial
Reporting Standards (IFRS) as adopted by the European Union.
A. DECLARATION OF COMPLIANCE WITH IFRS
The Company’s financial statements as at 31 December 2025 have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by the European Union. For prior
years, including the year ended 31 December 2021, the Company prepared its financial statements
in accordance with Slovenian Accounting Standards. The Company first prepared a full set of financial
statements in accordance with IFRS, together with the accompanying notes issued by the
International Accounting Standards Board (IASB) and interpretations issued by the IFRS
Interpretations Committee (IFRIC), as adopted by the European Union, and in compliance with the
provisions of the Companies Act (ZGD), for the financial year ended 31 December 2021, with the
date of transition to IFRS being 1 January 2020.
The Management Board approved the financial statements for the financial year 2025 at its regular
meeting on 19 March 2026.
The Company prepares its financial statements on the going concern basis. The accounting policies
applied are consistent with those used in previous years.
Initial application of new amendments to existing standards issued by the IASB and
adopted by the EU, effective in the current reporting period
The accounting policies applied by the Company in the preparation of its financial statements are
consistent with those used in the preparation of the financial statements for the previous financial
year. The exception is revised standards and interpretations adopted by the company on 1 January
2025, which are described below:
A) Changes in accounting policies and disclosures
Standards and amendments effective and adopted by the EU
The accounting policies applied by Cinkarna Celje, d. d., are consistent with those of the previous
financial year, except for the following amendments to IFRS adopted by the Company as of 1 January
2025, which are not material to Cinkarna Celje, d. d.
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• IAS 21 – The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
(Amendments)
The amendments are effective for annual periods beginning on or after 1 January 2025. The newly
adopted IFRS did not have a material impact on the accounting policies of Cinkarna Celje, d. d.
B) Issued standards not yet effective and not early adopted
B.1) Standards and amendments not yet effective but endorsed by the European Union
• IFRS 9 and IFRS 7: Classification and Measurement of Financial Instruments
(amendments)
In May 2024, the International Accounting Standards Board (IASB) issued amendments relating to
the classification and measurement of financial instruments, amending IFRS 9 Financial Instruments
and IFRS 7 Financial Instruments: Disclosures.
The amendments are effective for annual reporting periods beginning on or after 1 January 2026.
Early application is permitted for amendments related to the classification of financial assets and the
related disclosures, with the option to apply other amendments at a later date. The amendments
clarify that a financial liability is derecognised on the “settlement date” when the obligation is
discharged, cancelled, expires or otherwise meets the criteria for derecognition. They introduce an
accounting policy option for derecognition of liabilities settled through electronic payment systems
before the settlement date, subject to specific conditions. They also provide guidance for assessing
the contractual cash flow characteristics of financial assets with environmental, social and
governance (ESG) features or other similar contingent characteristics. In addition, they clarify the
treatment of assets that cannot, by contract, be settled using any other assets and of contractually
linked instruments, and require additional disclosures under IFRS 7 for financial assets and liabilities
with references to contingent events (including ESG-related features) and for equity instruments
classified at fair value through other comprehensive income.
The management of Cinkarna Celje, d. d., has assessed that these amendments will not have a
material impact on the financial statements at this stage.
• IFRS 9 and IFRS 7: Contracts Referencing Nature-dependent Electricity
(Amendments)
In December 2024, the International Accounting Standards Board (IASB) issued targeted
amendments to better reflect contracts referencing nature-dependent electricity. The amendments
are effective for annual reporting periods beginning on or after 1 January 2026, with earlier
application permitted. The amendments clarify the application of the “own use” requirements, permit
hedge accounting where contracts within the scope of the amendments are used as hedging
instruments, and introduce new disclosure requirements enabling investors to understand the impact
of such contracts on an entity’s financial performance and cash flows. The clarifications regarding
“own use” are to be applied retrospectively, while the guidance permitting hedge accounting is to be
applied prospectively to new hedging relationships designated on or after the date of initial
application.
The management of Cinkarna Celje, d. d., will assess in the future whether these amendments will
have a material impact.
• Annual Improvements to IFRS – Volume 11
The IASB’s annual improvements process addresses necessary but non-urgent clarifications and
amendments to IFRS. In July 2024, the IASB issued Annual Improvements to IFRS Accounting
Standards – Volume 11. An entity is required to apply these amendments for annual reporting periods
beginning on or after 1 January 2026. Annual Improvements to IFRS Accounting Standards – Volume
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11 include amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7. The purpose of these
amendments is to clarify wording, correct minor unintended consequences, address oversights or
resolve conflicts between requirements in the standards.
The management of Cinkarna Celje, d. d., has assessed that these amendments will not have a
material impact.
B.2) Standards/amendments not yet effective and not yet endorsed by the European Union
• IFRS 18 – Presentation and Disclosure in Financial Statements
In April 2024, the International Accounting Standards Board (IASB) issued IFRS 18 Presentation and
Disclosure in Financial Statements, which replaces IAS 1 – Presentation of Financial Statements. The
standard is effective for annual periods beginning on or after 1 January 2027; earlier application is
permitted.
The management of Cinkarna Celje, d. d., has assessed that this standard will not have a material
impact.
• IFRS 19 – Subsidiaries without Public Accountability: Disclosures (including
amendments)
In May 2024, the IASB issued IFRS 19 Subsidiaries without Public Accountability: Disclosures, and
in August 2025 amendments to this standard. IFRS 19 (including amendments) is effective for annual
periods beginning on or after 1 January 2027; earlier application is permitted.
The management of Cinkarna Celje, d. d., has assessed that this standard will not have a material
impact.
• IAS 21 – The Effects of Changes in Foreign Exchange Rates: Translation to a
Hyperinflationary Presentation Currency (amendments)
November 2025, the IASB issued amendments clarifying translation into a hyperinflationary
presentation currency, supplementing IAS 21 The Effects of Changes in Foreign Exchange Rates. The
amendments are effective for annual periods beginning on or after 1 January 2027; earlier application
is permitted.
The management has assessed that there will be no material impact on the financial statements of
Cinkarna Celje, d. d.
• Amendments to IFRS 10 – Consolidated Financial Statements and IAS 28 –
Investments in Associates and Joint Ventures: Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
In December 2015, the International Accounting Standards Board (IASB) indefinitely deferred the
effective date of these amendments until the completion of its research project on the equity method.
• IFRS 18 – Presentation and Disclosure in Financial Statements
IFRS 18 introduces new requirements for presentation in the statement of profit or loss. It requires
entities to classify all income and expenses in the statement of profit or loss into one of five
categories: operating, investing, financing, income tax and discontinued operations. These categories
are complemented by requirements to present subtotals and totals for “operating profit”, “profit
before financing and income tax” and “profit”. The standard also requires disclosure of management-
defined performance measures and introduces new requirements for aggregation and disaggregation
of financial information based on the defined “roles” of the primary financial statements and the
notes. In addition, other accounting standards are amended as a consequence. IFRS 18 is effective
for reporting periods beginning on or after 1 January 2027, with earlier application permitted.
Retrospective application is required in both annual and interim financial statements. The European
Union has not yet endorsed the standard.
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Cinkarna Celje, d. d., is currently analysing the impact of IFRS 18 and expects that the adoption of
the new standard will not have a material impact on the financial statements in the period of initial
application, except for certain immaterial reclassifications between operating and other profit
categories.
• IFRS 19 – Subsidiaries without Public Accountability: Disclosures (including
amendments)
IFRS 19 permits subsidiaries without public accountability to apply reduced disclosure requirements
if their parent (ultimate or intermediate) prepares publicly available consolidated financial statements
in accordance with IFRS. These subsidiaries must still apply the recognition, measurement and
presentation requirements of other IFRS Accounting Standards. Unless otherwise specified, eligible
entities that elect to apply IFRS 19 are not required to apply the disclosure requirements of other
IFRS Accounting Standards. The 2025 amendments further reduce disclosures for new standards
that were fully included when IFRS 19 was first issued. The European Union has not yet endorsed
the standard.
The management has assessed that there will be no material impact on the financial statements of
Cinkarna Celje, d. d., as the Company has no subsidiaries.
• IAS 21 – The Effects of Changes in Foreign Exchange Rates: Translation to a
Hyperinflationary Presentation Currency (amendments)
The amendments are effective for annual reporting periods beginning on or after 1 January 2027,
with earlier application permitted. The amendments require translation from a non-hyperinflationary
functional currency into a hyperinflationary presentation currency using the closing rate. If an entity
has a functional currency of a non-hyperinflationary economy but uses a hyperinflationary
presentation currency, all amounts of financial position and performance (assets, liabilities, equity,
income and expenses), as well as comparatives, must be translated using the closing rate at the
date of the most recent statement of financial position. An entity with both functional and
presentation currency in a hyperinflationary economy must restate comparatives of foreign
operations that have a non-hyperinflationary functional currency using a general price index.
The amendments also introduce certain additional disclosure requirements. The European Union has
not yet endorsed the standard.
The management of Cinkarna Celje, d. d., will analyse the requirements of this newly issued standard
in future reporting periods and assess its impact.
• Amendments to IFRS 10 – Consolidated Financial Statements and IAS 28 –
Investments in Associates and Joint Ventures: Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture
The amendments address a recognised inconsistency between the requirements of IFRS 10 and those
of IAS 28 in dealing with the sale or contribution of assets between an investor and its associate or
joint venture. The main consequence of the amendments is that a full gain or loss is recognised when
the transaction involves a business (whether it is housed in a subsidiary or not). A partial gain or
loss is recognised when the transaction involves assets that do not constitute a business, even if
those assets are held in a subsidiary. In December 2015, the IASB deferred the effective date of
these amendments indefinitely until the completion of its research project on the equity method. The
European Union has not yet endorsed the standard.
The management has assessed that there will be no material impact on the financial statements of
Cinkarna Celje, d. d., as the Company has no subsidiaries.
C. GOING CONCERN ASSUMPTION
In preparing the financial statements for the financial year 2025 of Cinkarna Celje, d. d., the
Management Board applied the going concern assumption based on its knowledge, information and
activities that enable the Company to continue its operations in the future in a manner that will allow
it to generate cash flows to meet its obligations and provide an adequate return to investors.
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D. BASIS OF MEASUREMENT
The financial statements have been prepared on a historical cost basis, except for derivatives,
financial instruments at fair value through profit or loss, and financial instruments at fair value
through other comprehensive income, which are measured at fair value.
E. FUNCTIONAL AND PRESENTATION CURRENCY
The financial statements and notes are presented in euros, without cents. Financial information
presented in the annual report in euros is rounded. Due to rounding, differences of +/- EUR 1 may
occur.
F. USE OF ESTIMATES AND ASSESSMENTS
In preparing the financial statements, the management is required to make estimates, judgements
and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates include determining the useful lives and residual values of property, plant and equipment
and intangible assets, the recoverable amount of property, plant and equipment, the fair value of
financial assets at fair value through other comprehensive income, allowances for inventories and
receivables, estimates of contract liabilities, the assessment of the recoverability of deferred tax
assets, assumptions relevant for actuarial calculations related to employee benefits, and assumptions
used in calculating provisions for environmental purposes and litigation claims by legal and natural
persons.
Significant assessments include those related to government grants, specifically the assessment of
reasonable assurance regarding compliance with future conditions for receiving and retaining such
grants. In 2023, grants were specifically related to subsidies for mitigating the energy crisis under
the ZPGOPEK Act, where the key judgement related to meeting future conditions. In 2025, no such
grants were received.
The key estimates and accounting judgements adopted by the management of Cinkarna Celje, d. d.,
in preparing the annual financial statements for 2025 in relation to the expected effects of climate
change and the energy transition are described below.
With regard to the effects of climate-related impacts, the Company considers climate change to be
an implicit factor in the methodologies and models used to perform estimates in the valuation and/or
measurement of certain accounting items. In addition, the Company has considered the impact of
climate change in the significant judgements made by management. In this context, the main items
included in the financial statements as at 31 December 2025 that are affected by the use of
management estimates and judgements relate to the assessment of impairment of non-financial
assets and to assets and liabilities associated with the energy transition.
References to the estimates and judgements applied by the management in relation to climate
change (taking into account their significance within financial reporting) are as follows:
‒ emphasis on assessing expected cash flows from specific assets (Note III. H Impairment of
non-financial assets);
‒ focus on the effects of the Paris Agreement and their impact on estimating the useful lives
of the relevant assets (Note Determination of useful lives of assets, Note III. C.).
The useful lives of property, plant and equipment are regularly reviewed in light of the transition to
fully electric vehicles and sustainable green investments (solar power plants, battery storage
systems, etc.). No adjustment to the useful lives of the Company’s assets in use was required.
Significant judgements include those related to environmental provisions and judgements regarding
the impact of climate change, namely:
− the impact of climate change on the useful life and usability of intangible assets,
− the impact of climate change on the useful life and usability of property, plant and
equipment,
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− the impact of climate change in relation to the recognition and measurement of provisions
and potential future liabilities,
− the impact of climate change in relation to indicators of impairment and the cash flows used
in assessing impairment of non-current assets
Estimates and the underlying assumptions are reviewed on a regular basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised if they affect only that
period, or in the period of revision and future periods if the revision affects both current and future
periods. Information on significant estimation uncertainties and critical judgements made by the
Management Board of Cinkarna Celje, d. d., in the process of applying accounting policies and which
have the most significant effect on the amounts recognised in the financial statements are described
in the chapter Impact of Climate Change on the Financial Statements.
Key accounting estimates
• In Note 2 – Impairment testing of non-financial assets
At least once a year, the Company assesses whether there are any indicators of impairment of the
cash-generating unit, whereby the recoverable amount of non-financial assets is determined based
on the present value of future cash flows. This is based both on an estimate of the expected cash
flows from the cash-generating unit and on the determination of an appropriate discount rate.
• In Note 20 – Revenue from contracts with customers
Revenue from contracts with customers is recognised based on the provisions of individual sales
contracts with customers, specifically upon the transfer of control of goods and services to the
customer, in an amount that reflects the consideration to which Cinkarna Celje, d. d., expects to be
entitled in exchange for those goods or services. Revenue from contracts with customers is reduced
by volume rebates (approved quantity discounts), where the Company carefully verifies whether the
contractually agreed quantities have been taken. If the agreed quantities are met, the Company
grants the customer a discount on the quantities taken. The percentage of the discount is agreed in
the contract with each individual customer. In assessing the granting of discounts, the payment
criterion is also considered. If overdue receivables from a customer entitled to a volume rebate are
not settled, the discount is not granted and is only estimated.
• Impairment testing of trade receivables in Note 8 – Trade receivables
When preparing the financial statements (quarterly and annual), the Company forms an allowance
for the impairment of receivables for which it is assumed that they will not be settled in full or at all.
The basis for calculating the allowance is a uniform methodology applicable to the Company, which
is based on the probability or assessment of a customer default. The methodology includes the
following quantitative and qualitative criteria: analysis of the customer’s historical payment
discipline, analysis of the customer’s financial statements – credit report, qualitative assessments of
the customer prepared by sales staff, and the insurance of receivables through the approval of a
credit limit with an insurance company. Based on the above-mentioned criteria, the value of the
allowance for receivables is calculated for each individual customer.
• In Note 3 – Fair value measurement of financial assets at fair value through other
comprehensive income
Fair value is applied to financial assets measured at fair value through other comprehensive income
and to financial assets measured at fair value through profit or loss. All other items in the financial
statements are presented at cost or amortised cost. The fair value of assets is reviewed annually,
based on available market data or comparable industry data in which the Company holds
investments.
• In Note 13 – Assessment of other provisions formed
A provision is recognised when the Company has a legal or constructive obligation as a result of a
past event that can be reliably estimated, and if it is more likely than not that an outflow of resources
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embodying economic benefits will be required to settle the obligation. Contingent liabilities are not
recognised in the financial statements because their actual existence will be confirmed only by the
occurrence or non-occurrence of events in the unpredictable future, which are beyond the Company's
control. The Management Board regularly assesses whether an outflow of resources embodying
economic benefits is probable for the settlement of a contingent liability. If it becomes probable, the
contingent liability is reclassified such that a provision is recognised in the financial statements at
the moment the level of probability changes. Based on the legal or other basis for recognition, the
Management Board critically assesses whether a present obligation arising from past events, which
could result in future outflows for the Company, is supported by external legal experts and also by
activities necessary for remediation based on current knowledge, measurements performed, the
estimated cost, the estimated timeline for the execution of these activities, and the discount rate; in
making this assessment, written opinions of external specialists in the relevant field are utilised. The
assessment relates primarily to environmental provisions.
• In Note 12 – Provisions for post-employment and other long-term employee
benefits
Under the commitments for defined post-employment and other benefits, the present values of
severance pay upon retirement and long-service awards (jubilee benefits) are recorded. They are
recognised based on an actuarial calculation prepared by a certified actuary and approved by the
Management Board. The actuarial calculation is based on assumptions and estimates valid at the
time the calculation is prepared and may differ from the actual assumptions in the future due to
subsequent changes. This primarily relates to the determination of the discount rate, employee
turnover estimates, mortality estimates, and wage growth estimates. Due to the complexity of the
actuarial calculation and the long-term nature of the items, defined benefit obligations are sensitive
to changes in these estimates.
• In Note 17 – Current liabilities from contracts with customers
When preparing the annual financial statements, Cinkarna Celje d.d. accrues contractual discounts
in cases where customers acquire the right to a discount on sales achieved in the current year only
in the following year, i.e., when the contractually agreed conditions for obtaining the discount are
met. The basis for estimating the amount of these discounts are the facts known at the time of
preparing the annual financial statements, past business experience with individual customers, and
other relevant facts.
• Assessment of the recoverability of deferred tax assets in Note 5 – Deferred tax
assets and liabilities
The Company recognises deferred tax assets arising from: provisions for long-service awards and
severance pay upon retirement, impairment of financial investments, impairment of receivables,
unused tax credits, and tax losses. As at the reporting date, the Company reviews the carrying
amounts of deferred tax assets and liabilities. Deferred tax assets are recognised to the extent that
it is probable that future taxable profit will be available over a five-year period against which the
deferred tax asset can be utilised. The deferred tax asset is reduced by the amount for which it is no
longer probable that the related tax benefit will be realised.
• Critical assessment of macroeconomic conditions (inflation and deterioration of
economic conditions)
Due to the deterioration of the macroeconomic environment caused by inflation, conditions in the
procurement and sales markets, and the situation surrounding the war in Ukraine, the Company
reviews its key accounting policies and estimates in areas where these conditions could have a
negative impact. This specifically relates to the impairment of assets – receivables due to the
deterioration of payment discipline, environmental and other provisions, fair value measurements,
leases, labour costs, and the recoverability of deferred tax assets.
• Critical assessment regarding US tariffs
The Company reviewed its exposure to US customs tariffs and performed a critical assessment of the
potential impact on its operations. Based on available information and an analysis of supply chains,
pricing, and sales margins, the management has concluded that the tariffs did not have a material
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impact on the financial statements during the period. No facts indicate a need for the formation of
provisions or impairments. The Company will continue to monitor potential risks associated with
future changes to tariffs.
III. Significant accounting policies
For the reporting period presented in the enclosed financial statements, the Company applies
accounting policies in accordance with IFRS. The Company did not change the accounting policies
published in the Annual Report for the financial year 2024. The accounting policies and calculation
methods applied are consistent with those used in the most recent annual financial statements.
In selecting accounting policies, deciding on their application, and preparing the financial statements,
management considered the following three requirements: financial statements are understandable
if they can be easily understood by users; information is relevant if it assists users in making
economic decisions; and information is material if its omission or misstatement could influence the
users' economic decisions. The financial statements include comparative information.
A. FOREIGN CURRENCY TRANSLATION
For transactions originally denominated in a foreign currency, either the commercial bank exchange
rate or the European Central Bank mid-rate (reference rate) is used for translation during the year.
Assets and liabilities denominated in foreign currencies are translated at the European Central Bank’s
reference exchange rate at the reporting date. Foreign exchange gains or losses are the differences
between the amortised cost in the functional currency at the beginning of the period, adjusted for
the amortised cost of payments during the period, and the amortised cost in the foreign currency
translated at the exchange rate at the end of the period. Non-monetary assets and liabilities
denominated in foreign currency and measured at fair value are translated into the functional
currency at the exchange rate on the date when the fair value was determined. Non-monetary items
denominated in foreign currency and measured at historical cost are translated into the functional
currency at the exchange rate on the date of the transaction. Exchange differences are recognised
in the statement of profit or loss.
B. INTANGIBLE ASSETS
Development costs incurred by the Company are recognised as an intangible asset. An intangible
asset is derecognised and removed from the balance sheet and statement of financial position on
disposal or when no further economic benefits are expected from its use and subsequent disposal.
Other intangible assets have finite useful lives and are carried at cost less accumulated amortisation
and accumulated impairment losses. Cost also includes borrowing costs until the intangible asset is
created.
Subsequent expenditure relating to intangible fixed assets is capitalised to the extent that it increases
the future economic benefits of the asset to which it relates.
The Company applies the straight-line method. Amortisation rates are determined by reference to
the expected useful lives. Amortisation is charged on a straight-line basis until the amortised cost
base is fully recovered and begins to be amortised when the intangible asset with the finite useful
life is available for use. The estimated useful lives for the current and comparative periods are:
− computer software: 2 to 10 years,
− technical and project documentation: 8 to 40 years,
− easements: 20 years and more.
The amortisation and depreciation rates in 2025 remain unchanged from the previous year.
C. TANGIBLE FIXED ASSETS
The Company's tangible fixed assets comprise land, buildings, manufacturing equipment, other
property, plant and equipment, small inventories, property, plant and equipment under construction
or in the course of construction, and advances for the acquisition of property, plant and equipment.
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The Company uses the cost model. Cost includes costs directly attributable to the acquisition of an
individual tangible fixed asset (import and non-refundable purchase duties and costs directly
attributable to its qualification for its intended use, in particular import and installation costs). Under
the cost model, tangible fixed assets are carried at cost less accumulated depreciation and
accumulated impairment losses. The cost includes borrowing costs related to the acquisition of the
tangible fixed asset until it is ready for use.
The cost of a tangible fixed asset constructed or manufactured in the Company consists of the costs
directly attributable to its construction or manufacture (costs of materials, labour, services of external
contractors and services of the Company's business units) and those general construction or
manufacturing costs that are directly attributable to its qualification for its intended use.
The cost of a tangible fixed asset is allocated to its components if their value is significant, they have
different useful lives that are significant in relation to the total cost of the tangible fixed asset, and
they are accounted for as individual assets.
Subsequent expenditure relating to a tangible fixed asset increases its cost if it is its replacement
and it is probable that its future economic benefits will be greater than those originally estimated.
Subsequent expenditure on a fully depreciated tangible fixed asset is recognised as a new asset with
a new useful life.
We capitalise own products and own services when they enhance the future benefits of an asset or
increase its useful life. These are goods and services that are created or rendered and then recorded
at cost as tangible fixed assets or intangible assets. At the same time, these effects of capitalising
own goods and services are recorded in other operating income.
The Company applies the straight-line method. Amortisation rates are determined according to the
expected useful lives. Amortisation is charged on a straight-line basis until the asset is fully recovered
from the asset, which forms the basis for depreciation, and commences on the first day of the month
after it is available for use. Land and fixed assets of artistic and cultural interest are not depreciated.
The estimated useful lives for the current and comparative period are:
− buildings: 5 to 71 years,
− production equipment: 2 to 30 years,
− other equipment: 2 to 5 years.
The amortisation and depreciation rates in 2025 remain unchanged from the previous year.
In estimating the useful lives of assets, the Company takes into account expected physical wear and
tear, technical obsolescence, economic obsolescence and expected legal and other restrictions on
use. The Company also reviews the useful lives of major assets in the event that circumstances
change and require a change in the useful life and therefore a revaluation of depreciation expense.
Leases
The Company assesses whether a contract is a lease or contains a lease at the time the contract is
entered into. A contract is a lease or contains a lease if it transfers the right to control the use of an
identified asset for a fixed period in exchange for consideration. The Company determines the term
of a lease as the period during which the lease cannot be terminated, together with (a) the periods
for which the option to extend the lease is exercisable if it is reasonably certain that the option will
be exercised and (b) the periods for which the option to terminate the lease is exercisable if it is
reasonably certain that the option will not be exercised.
The Company as lessee
The Company as lessee has no leases.
The Company as lessor
Lease agreements in relation to which there is no significant transfer of the risks and rewards
associated with ownership are classified as operating leases. Rental income is recognised on a
straight-line basis over the entire lease term and is recognised as income in the statement of profit
or loss. Initial direct costs are incremental costs that are directly attributable to negotiating and
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arranging a lease; they increase the carrying amount of the leased asset and are recognised over
the entire lease term on the same basis as rental income. Contingent rents are recognised as income
in the period in which they are earned.
D. OTHER NON-CURRENT ASSETS
Under other non-current assets, the Company presents or recognises emission allowances received
free of charge from the state. The Company records the receipt and use of emission allowances as
follows:
− Emission rights allocated by the state (the Ministry of the Environment and Spatial Planning
and the Slovenian Environment Agency) from 2013 onwards are presented in the statement
of financial position at a value of one euro per emission allowance;
− Income from the sale of allocated emission rights is presented under other operating income
in the statement of profit or loss;
− Purchases of emission rights on the market are recognised as non-current assets at cost if
they relate to actual emissions that will occur in future periods;
− Current operating liabilities are recognised as expenses when the estimated level of actual
emissions exceeds the number of emission rights held by the Company that have been either
allocated or purchased to cover actual emissions;
− If the market value of purchased emission allowances at year-end is lower than their carrying
amount, the allowances are impaired;
− At the balance sheet date, the Company first uses all allowances received from the state and,
for any shortfall, uses allowances purchased on the market at the average price.
E. FINANCIAL INSTRUMENTS
Financial instruments include non-derivative financial assets and non-derivative financial liabilities
and derivative financial instruments. Financial instruments are carried at fair value and amortised
cost. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date.
On initial recognition, the Company classifies financial assets as subsequently measured at amortised
cost, fair value through comprehensive income and fair value through profit or loss. The classification
of financial assets at initial recognition depends on the contractual cash flow characteristics of the
financial asset and the Company's business model for managing them. Except for trade receivables
that do not have a significant financial component or for which the Company has applied a practical
expedient, the Company measures the financial asset on initial recognition at fair value, which, in
the case of a financial asset not at fair value through profit or loss, is the fair value plus transaction
costs.
Trade receivables that do not have a significant financial component or for which the Company has
applied a practical expedient are measured at transaction price determined in accordance with IFRS
15 (see accounting policies in the section Revenue from contracts with customers).
Non-derivative financial assets
Financial assets are classified into one of the following groups on initial recognition:
− financial assets measured at amortised cost,
− financial assets at fair value through other comprehensive income,
− financial assets at fair value through profit or loss; or
− cash.
Non-derivative financial assets include cash and cash equivalents, receivables, loans and
investments. The Company recognises receivables and loans and deposits at the date they are
incurred. It recognises other assets when the transaction is entered into or when it becomes a party
to the contractual provisions of the instrument. The Company derecognises a financial asset when
the contractual rights to the cash flows from the financial asset expire or when the rights to the
contractual cash flows from the financial asset are transferred in a transaction that transfers all the
risks and rewards of ownership of the financial asset.
Impairment of financial assets is described in more detail in note H below.
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Financial assets at fair value through other comprehensive income
Financial assets measured at fair value through other comprehensive income that have the
characteristics of debt instruments are those financial assets that the Company holds in order to
collect contractual cash flows representing solely payments of principal and interest on the
outstanding principal. For debt instruments recognised at fair value through other comprehensive
income, interest income, foreign exchange differences, and impairment losses or reversals are
recognised in the statement of profit or loss and measured in the same way as for financial assets
measured at amortised cost. All other changes in fair value are recognised in other comprehensive
income. Upon derecognition, the cumulative change in fair value recognised in other comprehensive
income is reclassified to the statement of profit or loss. Financial assets measured at fair value
through other comprehensive income that have the characteristics of equity instruments are those
financial assets that meet the definition of equity in accordance with IAS 32 – Financial Instruments
and for which the Company makes an irrevocable election to classify them as equity instruments at
fair value through other comprehensive income, and which are not held for trading purposes. The
classification is determined on an instrument-by-instrument basis. Gains and losses arising from
these financial assets are never reclassified to the statement of profit or loss.
Dividends from equity instruments are recognised as finance income in the statement of profit or
loss when the right to payment is established.
Financial assets at amortised cost
Financial assets measured at amortised cost include those financial assets that the Company holds
in order to collect contractual cash flows representing solely payments of principal and interest on
the outstanding principal. The Company classifies loans, trade receivables and other receivables as
financial assets at amortised cost. Depending on their maturity, they are classified as current
(maturing within 12 months after the reporting date) or non-current financial assets (maturing more
than 12 months after the reporting date). Loans and receivables are initially recognised at fair value,
increased by directly attributable transaction costs. After initial recognition, loans and receivables
are measured at amortised cost using the effective interest method, less expected credit losses.
Gains and losses are recognised in profit or loss upon derecognition, modification or impairment.
Insurance of trade receivables is not treated as a separate financial instrument but as an integral
part of receivables. Insurance policies are concluded periodically (annually) and relate to specific
receivables and/or business partners. The concluded insurance policy is flexible, allowing business
partners to be added to or excluded from coverage during the term of the policy. The insurance
policies relate exclusively to the insurance of trade receivables.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial
assets designated at fair value through profit or loss, or financial assets that are required to be
measured at fair value. Financial assets are classified as held for trading if they are acquired for the
purpose of selling or repurchasing in the near term. Derivative financial instruments, including
separated embedded derivatives, are classified as financial assets held for trading, except where
they are designated as effective hedging instruments. Financial assets that generate cash flows that
are not solely payments of principal and interest are classified and measured at fair value through
profit or loss, irrespective of the business model. Financial assets at fair value through profit or loss
are presented in the statement of financial position at fair value, with net changes in fair value
recognised in the statement of profit or loss.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, balances on current and foreign currency
accounts, bank deposits with a maturity of three months or less, and similar investments intended
to ensure liquidity. Cash is initially recognised at the amount arising from the relevant supporting
documentation on the basis of which control over the associated rights is established.
Non-derivative financial liabilities
The Company’s non-derivative financial liabilities comprise trade, financial, and other payables. The
Company initially recognises these liabilities on the transaction date when it becomes a party to the
contractual provisions of the instrument. The Company derecognises a financial liability when the
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contractual obligations are discharged, cancelled, or expire. Non-derivative liabilities are initially
recognised at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, these liabilities are measured at amortised cost. Based on their maturity, they are
classified as current liabilities (maturity up to 12 months after the date of the statement of financial
position) or non-current liabilities (maturity exceeding 12 months after the date of the statement of
financial position).
Derivative financial instruments
Derivative financial instruments are initially recognised at fair value. Transaction costs are recognised
in profit or loss as incurred. Subsequent to initial recognition, derivative financial instruments are
measured at fair value, and any changes therein are recognised in profit or loss. Fair value is defined
as the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. If the transaction price differs
from the fair value at the measurement date, the difference for market-based assets is recognised
in profit or loss, or it is deferred and subsequently released to profit or loss in accordance with the
relevant policy. Financial investments or financial liabilities measured at fair value through profit or
loss are remeasured to fair value at least once a year upon the preparation of the annual financial
statements. Gains or losses arising from changes in fair value are recognised in the statement of
profit or loss.
The Company purchases strategic raw materials in US dollars and also carries out sales to dollar-
denominated markets, the value of which is significantly lower than that of the purchases. Due to
the purchasing and selling being conducted in different currencies, mismatches arise between
purchase and selling prices, alongside a constantly fluctuating Euro/Dollar exchange rate; the
Company manages this through forward contracts to maintain the appropriate Euro/Dollar ratio and
to mitigate currency risks.
F. ASSETS (DISPOSAL GROUPS)
Assets or disposal groups comprising assets and liabilities whose carrying amount is expected to be
recovered principally through a sale, and for which the sale is highly probable, are classified as assets
and liabilities held for sale. Impairment losses on initial classification as held for sale, as well as
subsequent losses or gains on remeasurement, are recognised in profit or loss. Gains are not
recognised in excess of any cumulative impairment losses previously recognised. When intangible
assets and property, plant and equipment are classified as held for sale, depreciation and
amortisation cease. Upon disposal, the Company derecognises the asset (or disposal group), and the
effect of disposal, reduced by costs directly attributable to the sale, is recognised in other operating
income or expenses.
G. INVENTORIES
The Company's inventories are measured at the lower of cost and net realisable value. Cost includes
the purchase price, import duties, and direct acquisition costs. The purchase price is reduced by any
discounts received. Direct acquisition costs comprise transport costs, loading, reloading and
unloading costs, cargo monitoring costs, and other costs directly attributable to the acquired
merchandise, materials, or services. Purchase price discounts include both those stated on the
invoice and those obtained subsequently that relate to a specific purchase.
The Company maintains inventories of raw materials and consumables, auxiliary materials,
packaging, and trading goods at purchase prices including all incidental acquisition costs. When
reporting inventories and material consumption, the Company uses standard prices with variances.
Consumption of basic raw materials is recorded using the FIFO method, while the consumption of
other material and goods inventories is recorded using the weighted average cost method. Non-
moving inventories of raw materials and consumables are revalued due to impairment by writing
down their value according to the following criteria:
− third year: 25%,
− fourth year: 50%,
− fifth year: 100%.
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Inventories of work in progress, semi-finished products, and finished products are valued at
production cost, which includes direct material costs, wages, and production services, depreciation,
and a portion of general manufacturing overheads of production cost centres, encompassing costs of
material, maintenance, insurance, and a portion of other service costs. When reporting inventories
of work in progress and finished products, the Company uses standard prices (production value) with
variances. The transfer of costs from inventories is performed using the weighted average cost
method.
Non-moving inventories of work in progress and finished products are revalued due to impairment
by writing down their value according to the following criteria:
− third year: 25%,
− fourth year: 50%,
− fifth year: 100%.
H. IMPAIRMENT OF ASSETS
Financial assets
In accordance with IFRS 9, the Company applies the expected credit loss (ECL) model, which
recognises not only incurred losses but also losses expected to arise in the future. The Company
assesses evidence of impairment of financial instruments. If, at the reporting date, the credit risk of
a financial instrument has not increased significantly since initial recognition, the impairment
assessment is based on 12-month expected credit losses associated with the probability of default
of the financial instrument within the next 12 months.
For financial assets such as trade receivables that do not contain a significant financing component,
a simplified approach is applied, under which the loss allowance is calculated at an amount equal to
lifetime expected credit losses. The Company forms groups of receivables based on whether they are
secured or unsecured, their maturity, similar risk characteristics, and historical recovery rates in
previous years, which are adjusted for management’s assessment of whether actual losses due to
current economic conditions may be higher or lower than those suggested by historical trends.
If credit risk has increased significantly since initial recognition but the assets do not yet show
objective evidence of impairment, the impairment assessment is based on the probability of default
over the lifetime of the financial asset. Expected credit losses represent the difference between the
contractual cash flows due and all cash flows the Company expects to receive. For financial assets
showing objective signs of impairment at the reporting date, a full loss allowance for expected credit
losses is formed based on a resolution of the Management Board. The Company recognises a write-
off of a financial asset when it has no reasonable expectation of recovering the contractual cash
flows. Objective evidence of impairment of financial assets may include: default or breach of contract
by the debtor; indications that the debtor will enter bankruptcy or is in proceedings under the
Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act (ZFPPIPP).
Receivables that are assumed will not be settled, or will not be settled in full, are considered doubtful;
if legal proceedings are initiated in respect of such receivables, they are considered disputed. The
Company records a loss allowance for these receivables against operating expenses. The formation
of the loss allowance for trade and other operating receivables is based on an individual assessment
of their riskiness, considering historical payment dynamics, past payment delays, the credit rating of
the business partner, and the status of the business partner in insolvency proceedings.
Investments in equity securities or shares of other companies, for which an irrevocable election was
made at initial recognition that they are not held for trading, are recorded as financial assets
measured at fair value through other comprehensive income. The fair value of listed securities is
measured at the market price at the reporting date. Gains or losses arising from changes in fair value
are recognised in other comprehensive income and presented directly in equity as a fair value reserve
for financial instruments in the net amount. Amounts presented in other comprehensive income may
not be subsequently reclassified to profit or loss. Accumulated gains or losses are transferred within
equity.
Non-financial assets
At each reporting date, the Company reviews the carrying amount of its significant non-financial
assets to determine whether there is any indication of impairment. If such indication exists, the
asset's recoverable amount is estimated. The recoverable amount of an asset or a cash-generating
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unit (CGU) is the higher of its value in use and its fair value less costs to sell. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to
the asset. When allocating an impairment loss to the individual assets of a CGU, the carrying amount
of an individual asset is not reduced below the highest of its fair value less costs of disposal (if
measurable), its value in use (if determinable), or zero. An impairment loss of an asset or a cash-
generating unit is recognised if its carrying amount exceeds its recoverable amount. Impairment
losses are recognised in profit or loss. At the end of each reporting period, the Company assesses
impairment losses recognised in prior periods to determine whether there is any indication that the
loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in
the estimates used to determine the asset’s recoverable amount. An impairment loss is reversed
only to the extent that the asset's increased carrying amount does not exceed the carrying amount
that would have been determined (net of depreciation or amortisation) had no impairment loss been
recognised for the asset in prior years.
I. DETERMINATION OF FAIR VALUE
In accordance with the Company’s accounting policies, the determination of fair value is required for
both non-financial and financial assets and liabilities, either for the measurement of individual assets
or for additional fair value disclosures. Fair value is the amount for which an asset could be sold or
a liability exchanged between knowledgeable, willing parties in an arm’s length transaction.
The methods for determining the fair value of individual groups of assets for measurement or
reporting purposes are described below.
Financial assets at fair value through profit or loss and financial assets at fair value
through other comprehensive income
The fair value of financial assets at fair value through profit or loss and financial assets at fair value
through other comprehensive income is determined based on comparable market data of companies
in the electrical industry.
Loans and receivables
The fair value of loans and receivables is calculated as the present value of future cash flows,
discounted at the market rate of interest at the end of the reporting period. The estimate takes into
account the credit risk associated with these financial assets.
Non-derivative financial liabilities
For reporting purposes, fair value is calculated based on the present value of future principal and
interest payments, discounted at the market rate of interest at the end of the reporting period.
J. EQUITY
The Company's total equity comprises: called-up capital, capital reserves, revenue reserves, fair
value reserves, retained earnings or accumulated losses from previous years, and the temporarily
undistributed net profit or accumulated loss for the financial year.
Called-up capital represents the share capital nominally defined in the Company's Articles of
Association and consists of ordinary shares.
Treasury shares: Upon the repurchase of treasury shares, which are presented as part of share
capital, the amount of the consideration paid, including directly attributable costs, net of any tax
effects, is recognised as a change in equity. Repurchased shares are presented as treasury shares
and deducted from equity. Upon the sale or subsequent reissue of treasury shares, the amount
received is recognised as an increase in equity, and any resulting surplus or deficit from the
transaction is transferred to capital reserves or retained earnings.
Capital reserves represent capital reserves formed during the privatisation process and general
equity revaluation adjustments which, in accordance with the then-applicable Slovenian Accounting
Standards (SAS), included the revaluation of share capital prior to 2002. Due to the transition to the
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revised SAS (2006), the Company's general equity revaluation adjustment was transferred to capital
reserves on 1 January 2006.
Revenue reserves are a specifically allocated portion of net profit from previous years, primarily
for the settlement of potential future losses. They comprise: legal reserves, reserves for treasury
shares, treasury shares (as a deduction), statutory reserves, and other revenue reserves.
Retained earnings from previous years represent the remaining portion of net profit that has not
been distributed to owners as dividends or other shares, nor has it been specifically allocated to
reserves.
Fair value reserves relate to changes in the fair value of equity investments in other companies
measured at fair value through equity. Fair value reserves also include remeasurements of post-
employment benefits (actuarial gains/losses) arising from changes in the present value of the
severance pay obligation upon retirement.
Dividends: Until dividends are approved by the General Meeting of Shareholders, proposed
dividends are treated as retained earnings; therefore, dividends are recognised in the financial
statements in the period in which the resolution of the General Meeting to pay dividends was adopted.
K. CURRENT EMPLOYEE BENEFITS
Short-term employee benefit obligations are measured on an undiscounted basis and are recognised
as an expense as the related service is provided.
L. NON-CURRENT EMPLOYEE BENEFITS
Provisions for post-employment and other long-term employee benefit
In accordance with statutory requirements, the collective agreement, and internal regulations, the
Company is obliged to pay jubilee benefits (long-service awards) and severance pay upon retirement,
for which provisions are recognised. No other pension obligations exist. The provisions are measured
at the present value of estimated future payments for severance pay and jubilee benefits, discounted
at the reporting date. The calculation includes severance pay costs upon retirement and the costs of
all expected jubilee benefits until retirement. Service costs and interest costs are recognised in the
statement of profit or loss, while remeasurements of post-employment benefits, specifically
unrealised actuarial gains or losses, are recognised in other comprehensive income.
M. OTHER PROVISIONS
Provisions are recognised when the Company has a present legal or constructive obligation as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the expenditure required to
settle the present obligation at the reporting date. The Company recognises provisions when the
relevant conditions are met, charging them against the appropriate costs or expenses.
Environmental provisions are formed based on the best estimate of costs and other necessary
activities, derived from assessments by external independent environmental experts, relating to the
operation of landfills and facilities owned by the Company to cover long-term obligations. The
Management Board assesses whether a legal, contractual, or constructive obligation exists to form
or release a provision. Provisions are discounted at a risk-free rate, based on the estimated timeline
for the execution of works, which is determined with the assistance of external experts’ assessments
considering land structure, required activities, and statutory provisions. In 2023, a re-assessment of
provisions was conducted, during which the execution of necessary works, the timeline, and the
value of the works were re-evaluated; this evaluation accounted for inflation and, based on the
timeline, the provisions were appropriately discounted using a discount factor based on government
bond yields. This was performed based on an assessment by external experts and an annual
management review. Costs were adjusted in line with the price increases of materials and services
required for the necessary remediation. In 2025, similar to 2024, a further re-assessment of all
provisions was conducted with the help of external experts, who assessed new necessary works
(landslide remediation, grout curtain). The value of the works accounted for the rising costs of
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planned activities (inflation), and based on the planned remediation timeline, the provisions were
appropriately discounted using a discount factor based on government bond yields.
N. GOVERNMENT GRANTS
Income from government grants is recognised in the financial statements of Cinkarna Celje, d. d.,
when they are received and when there is reasonable assurance that the Company will comply with
the conditions attached to them. Government grants related to the epidemic in Slovenia are
presented by the Company under current operating income. Other government and other grants
received to cover costs are recognised systematically as income over the periods in which the related
expenses, which the grants are intended to compensate, are incurred. Government grants related to
assets are recognised in the statement of profit or loss systematically under other operating income
over the useful life of the individual asset.
Income from government grants (energy crisis mitigation) is initially recognised when there is
reasonable assurance that Cinkarna Celje, d. d., will receive the income and will comply with the
conditions associated with its receipt and retention. Income from government grants is systematically
recognised in the statement of profit or loss under other operating income.
Government grants received for the acquisition of property, plant and equipment or for covering
specific costs are temporarily recorded as deferred income and are transferred to operating income
in line with the depreciation of the acquired property, plant and equipment or as the costs for which
they are intended to cover are incurred.
O. OTHER CURRENT ASSETS AND OTHER LIABILITIES
Under other current assets, the Company records short-term deferred costs or expenses. In
accordance with the established methodology for the accrual of annual obligations, deferred costs
for holiday allowance, paid insurance premiums, and other short-term costs are recorded during the
year. As at the reporting date, the Company presents prepaid costs for the purchase of raw materials
and costs relating to the future financial period. The Company also records VAT on advances received
under other current assets.
Under other current liabilities, the Company records short-term accrued expenses and short-term
deferred income. In accordance with the established methodology for the accrual of annual
obligations, planned operating liabilities are accrued during the year. Short-term deferred income
comprises income from the sale of products and services accrued during the year. Furthermore, the
Company records the accrued liability for unused annual leave and VAT on advances paid under other
current liabilities.
P. REVENUE
Contract revenue
Revenue in accordance with IFRS 15 is recognised when an increase in economic benefits during the
accounting period is related to an increase in the value of an asset or a decrease in a liability, and
the increase can be measured reliably. Revenue is recognised when it is reasonably expected to
result in inflows, provided these have not already been realised upon inception.
Revenue from contracts with customers results from the sale of chemical, metallurgical, and other
manufactured products and materials, where the satisfaction of a performance obligation occurs at
the point in time when the goods are dispatched or collected by the customer. For revenue from
contracts with customers where the result of the sale is a service, the satisfaction of the performance
obligation occurs at the point in time when the service is performed. Sales revenue consists of
revenue arising from contracts with customers for the sale of goods or services. Sales revenue
reflects the transfer (delivery) of contractually agreed goods or services to customers in the amount
of the expected consideration to which the Company expects to be entitled in exchange for those
goods or services. Amounts collected on behalf of third parties, such as value-added tax and other
duties charged upon sale, do not constitute part of sales revenue. Similarly, amounts collected on
behalf of a principal do not constitute part of sales revenue (sales revenue consists only of the portion
of consideration attributable to the agent for the provided agency service). A good or service is
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transferred when the customer obtains (or is obtaining) control over it. A customer obtains control
of a good or service when they acquire the right to direct the use of, and obtain substantially all of
the remaining benefits from, the good or service. Such control also includes the ability to prevent
others from directing the use of, and obtaining the benefits from, the good or service. Benefits from
goods or services are potential cash flows (receipts or savings on expenditure) that can be obtained
directly or indirectly in various ways. The Company transfers control of a good or service and thereby
satisfies a performance obligation, either at a point in time or over time. Upon entering into a contract
with a customer, the Company must identify all performance obligations contained in the contract.
An obligation to transfer a good or service to a customer is identified as a distinct (separate)
performance obligation if:
− it can be identified separately from other contractual obligations to transfer goods or services
in the context of the contract, in accordance with IFRS criteria;
− the customer can benefit from the contractually agreed good or service either on its own or
together with other resources that are readily available to the customer. For example, the
fact that the Company regularly sells a good or service separately would indicate that the
customer can benefit from the good or service on its own or in conjunction with other readily
available resources.
Sales revenue is recognised in an amount that reflects the transaction price allocated to a distinct
performance obligation. The transaction price is the amount of consideration to which the Company
expects to be entitled in exchange for the transfer of goods or services to a customer, excluding
amounts collected on behalf of third parties.
Control of goods and services depends on the provisions of the sales contract; the transfer occurs at
the point in time when the customer collects the goods or when the service is performed. The
standard payment term ranges from 30 to 90 days.
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the
customer but not yet invoiced to the customer. Under contract assets, the Company records unbilled
revenue for goods and services supplied to customers.
Contract liabilities
A contract liability is the obligation to transfer goods or services to the customer in exchange for
consideration received from the customer. The Company records contract liabilities from contracts
with customers relating to approved volume discounts. Contract liabilities are recognised as revenue
when the Company satisfies its performance obligation under the contract.
Other sales revenue and other operating income
Revenue and other operating income are recognised when the service has been performed and the
customer has obtained control over the goods or service in accordance with IFRS 15.
Other operating income arises upon the disposal of intangible assets and property, plant and
equipment as the excess of their sales value over their carrying amount, and upon the occurrence
of other unusual items. They are recorded in the actual amounts incurred.
Financial income
Finance income comprises interest income on investments, dividend income, gains on the disposal
of available-for-sale financial assets, foreign exchange gains, and gains on hedging instruments,
which are recognised in the statement of profit or loss. Interest income is recognised as it accrues
using the effective interest method. Dividend income is recognised in the statement of profit or loss
when the Company’s right to receive payment is established.
Q. EXPENSES
Expenses are recognised if a decrease in economic benefits during the reporting period is related to
a decrease in an asset or an increase in a liability, and the decrease can be measured reliably.
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Operating expenses are recognised when materials are consumed or services are provided, and
are recorded in the period to which they relate. In the standard valuation of inventories of finished
products and work in progress at production cost, operating expenses comprise production costs no
longer held in these inventories, as well as purchasing costs, selling costs, and general activity costs
(overheads) accrued during the reporting period. The transfer of costs from inventories of finished
products and work in progress to the cost of goods sold, and the transfer of the purchase value of
merchandise and materials sold, are carried out using the standard (estimated) cost method, taking
into account the proportional part of any variances.
Operating expenses are equal to the costs accrued during the reporting period, increased by costs
held in opening inventories of finished products and work in progress, and decreased by costs held
in closing inventories of finished products and work in progress, valued at production costs.
Operating expenses are increased by the cost of merchandise and materials sold. Costs of services
primarily relate to costs incurred in connection with the maintenance of assets, transport services,
sales intermediary services, advertising and sponsorship costs, research costs, and costs of
professional/intellectual services. Operating expenses – impairments arise in connection with
property, plant and equipment, intangible assets, and current assets due to their impairment. Other
expenses consist of unusual items, which are recorded in the actual amounts incurred.
Finance costs comprise interest expenses on borrowings, foreign exchange losses, and losses due
to the impairment of financial assets, all of which are recognised in the statement of profit or loss.
Borrowing costs are recognised in the statement of profit or loss using the effective interest method.
R. TAXATION (corporate income tax)
Corporate income tax for the financial year comprises current and deferred tax. Income tax is
recognised in the statement of profit or loss, except to the extent that it relates to items recognised
directly in equity. Taxable profit differs from the net profit reported in the statement of profit or loss
as it excludes items of income or expense that are taxable or deductible in other years, as well as
items that are never taxable or deductible.
Current tax is the tax expected to be paid on the taxable profit for the financial year using tax rates
enacted or substantively enacted at the reporting date.
Deferred tax is recognised using the balance sheet liability method, accounting for temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax is recorded at the amount expected to be
paid upon reversal of the temporary differences, based on laws enacted or substantively enacted at
the reporting date.
A deferred tax liability is fully recognised using the balance sheet liability method for temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the
separate financial statements of the Company. Deferred tax is determined using tax rates (and laws)
that are expected to apply when the deferred tax liability is settled. Deferred tax is not recognised
for taxable temporary differences arising from the initial recognition of financial investments. The
amount of deferred tax is based on the expected manner of recovery or settlement of the carrying
amount of assets and liabilities using tax rates effective at the reporting date. Deferred tax assets
and deferred tax liabilities are offset if there is a legally enforceable right to offset current tax assets
and current tax liabilities.
A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be
available against which the deferred tax asset can be utilised. Deferred tax assets are reduced by
the amount for which it is no longer probable that the related tax benefit will be realised.
S. SEGMENT REPORTING
The Company discloses information by segment. A business segment is a distinguishable component
of the Company engaged in providing specific products or services (product segment) or in providing
products or services within a particular geographical economic environment (geographical segment);
these segments are subject to risks and rewards that are different from those of other segments.
Segment information is presented by the Company's geographical and product segments. The
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Company's segment reporting is based on geographical segments, which are also supported by the
Company's management approach and internal reporting system.
The Company's geographical segments are: Slovenia, the European Union, and third countries, which
also include the markets of the former Yugoslavia.
The Company's product segments are business units that produce key products: Titanium Dioxide,
Zinc Processing, Coatings, Masterbatches and Printing Inks, Agriculture Programme, Polymers, and
others.
Profit or loss by product segment is presented as the difference between operating income and
expenses, taking into account income and costs that can be directly attributed to an individual
segment, while excluding those items of income and expense that cannot be reasonably allocated to
product segments. Smaller product segments are aggregated into a single category – a business unit
– because they are immaterial, and detailed disclosures could also cause significant commercial harm
to the Company.
T. EARNINGS PER SHARE
Cinkarna Celje, d. d., presents basic earnings per share, calculated by dividing the profit or loss
attributable to ordinary shareholders by the number of ordinary shares during the financial year.
Diluted earnings per share is equal to basic earnings per share because all shares of Cinkarna Celje,
d. d., belong to the same class of ordinary registered no-par value shares.
S. FINANCIAL RISK MANAGEMENT IN THE USE OF FINANCIAL INSTRUMENTS
Cinkarna Celje, d. d., uses various instruments to manage financial risks when using financial
instruments to manage credit, liquidity, market, currency and operational risks, which are
presented in more detail in Note VI Financial instruments and financial risks.
IV. REPORTING BY SEGMENT
Cinkarna Celje, d. d., reports revenue from contracts with customers by geographically defined
segments and sales programmes. Revenue from contracts with customers is reported by
geographical location of customers and sales programmes. The Company monitors the following
segments in the preparation and presentation of the income statement and revenue from contracts
with customers:
− Titanium dioxide, comprising sales of titanium dioxide pigment together with other sales of
the TiO
2
business unit including sales of CEGIPS and sulphuric acid;
− Zinc processing, comprising all sales of metallurgical products;
− Paints, varnishes, masters and printing inks;
− Agro programme, comprising all sales of copper fungicides and Humovit;
− Polymers, covering all polymer sales of the business unit;
− Other, comprising sales of service activities and other unallocated items.
Sales by business segment
in EUR
2025
2024
Titanium dioxide
168,872,162
168,728,022
− of which TiO
2
pigment
165,284,697
165,044,453
Varnishes, masters
14,663,429
16,140,315
Agro programme
10,117,320
11,150,638
Polymers
4,590,585
3,379,268
Other
557,786
887,171
TOTAL
198,801,281
200,285,413
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Sales by business segment
in EUR
2025
2024
Slovenia
13,822,459
13,684,845
European Union
163,927,291
162,234,825
Third countries
16,427,125
19,080,092
Third countries – dollar market
4,624,406
5,285,650
TOTAL
198,801,281
200,285,413
Profit or loss by product segment
The Company also monitors segment results by sales programmes, which are reviewed on a regular
basis and serve as a basis for decisions regarding the future operations of each individual programme.
The Company monitors operating profit or loss for each segment. Conversely, finance income and
expenses, income tax, deferred tax assets, and net profit or loss are monitored at the level of the
Company as a whole; likewise, the statement of financial position is also monitored exclusively at
the Company level.
in EUR
Titanium dioxide
Varnishes and masters
Agro programme
Polymers
Other
Total
31/12/2024
31/12/2025
31/12/2024
31/12/2025
31/12/2024
31/12/2025
31/12/2024
31/12/2025
31/12/2024
31/12/2025
31/12/2024
31/12/2025
Contract
revenue
168,728,022
168,872,161
16,140,315
14,663,429
11,150,638
10,117,320
3,379,268
4,590,585
887,170
557,786
200,285,413
198,801,281
Other operating
income
1,100,495
1,108,053
794,331
86,102
55,775
40,450
325,978
423,983
3,716,539
4,548,508
5,993,118
6,207,096
Change in value
of inventories
-1,800,756
4,360,961
-482,832
330,516
522,144
321,338
0
0
-381,350
0
-2,142,794
5,012,815
Operating
expenses
-143,635,715
-154,273,458
-15,050,725
-14,312,196
-11,525,534
-10,105,349
-2,768,843
-3,766,137
-4,490,676
-5,337,348
-177,471,493
-187,794,487
– of which
depreciation
-9,243,069
-10,004,289
-416,190
-376,900
-266,481
-283,711
-192,803
-223,856
-2,782,266
-2,982,469
-12,900,809
-13,871,225
Operating
result
24,392,046
20,067,717
1,401,089
767,851
203,023
373,759
936,403
1,248,431
-268,317
-231,054
26,664,244
22,226,705
Interest income
1,726,438
1,311,450
Other financial
income
140,564
44,466
Interest expense
4,114
4,653
Other financial
expenses
0
261,486
Financial result
0
0
0
0
0
0
0
0
0
0
1,862,888
1,089,776
Deferred taxes
-36,221
-176,720
Income tax
-5,403,661
-3,670,216
Net profit
0
0
0
0
0
0
0
0
0
0
23,087,250
19,469,546
230
V. NOTES
1 Intangible assets
in EUR
Group of intangible assets for
2025
Cost
Accumulated amortisation
Carrying amount
31/12/2025
31/12/2024
31/12/2025
31/12/2024
31/12/2025
31/12/2024
Property rights
6,385,442
5,690,758
5,096,410
4,630,391
1,289,032
1,060,367
Assets under acquisition
853,607
1,348,412
0
0
853,607
1,348,412
TOTAL
7,239,049
7,039,170
5,096,410
4,630,391
2,142,639
2,408,779
in EUR
Group of intangible assets for
2024
Cost
Accumulated amortisation
Carrying amount
31/12/2024
31/12/2023
31/12/2024
31/12/2023
31/12/2024
31/12/2023
Property rights
5,690,758
6,161,514
4,630,391
5,093,263
1,060,367
1,068,251
Assets under acquisition
1,348,412
516,856
0
0
1,348,412
516,856
TOTAL
7,039,170
6,678,369
4,630,391
5,093,263
2,408,779
1,585,108
The useful lives of intangible assets are finite. The Company has reviewed their carrying amounts and
determined that they do not exceed their recoverable amounts. In 2025, the Company invested in
long-term property rights arising from investments in software and project documentation. Decreases
in intangible assets relate to the amortisation charged and the write-off of other intangible assets.
As at 31 December 2025, 38.7% of all intangible assets in use were fully amortised (compared to
41.7% as at 31 December 2024). This proportion is calculated based on the cost of the intangible
assets.
As at 31 December 2025 and 31 December 2024, no intangible assets were pledged as security for
liabilities. Furthermore, the Company has no commitments under existing contracts for the acquisition
of long-term intangible assets.
Changes in intangible assets
in EUR
2025
Property rights
Assets under
acquisition
TOTAL
COST
Balance as at 31 Dec 2024
5,690,758
1,348,412
7,039,170
Additions
251,914
251,914
Transfers from assets under development / acquisition
746,719
-746,719
0
Disposals
52,035
0
52,035
Balance as at 31 Dec 2025
6,385,442
853,607
7,239,049
ACCUMULATED AMORTISATION
Balance as at 31 Dec 2024
4,630,391
0
4,630,391
Amortisation for the year
518,054
0
518,054
Disposals
52,035
0
52,035
Balance as at 31 Dec 2025
5,096,410
0
5,096,410
CARRYING AMOUNT
Balance as at 31 Dec 2024
1,060,367
1,348,412
2,408,779
Balance as at 31 Dec 2025
1,289,032
853,607
2,142,639
231
in EUR
2024
Property rights
Assets under
acquisition
TOTAL
COST
Balance as at 31 Dec 2023
6,161,514
516,856
6,678,370
Additions
0
1,172,185
1,172,185
Transfers from assets under development / acquisition
340,629
-340,629
0
Disposals
811,385
0
811,385
Balance as at 31 Dec 2024
5,690,758
1,348,412
7,039,170
ACCUMULATED AMORTISATION
Balance as at 31 Dec 2023
5,093,263
0
5,093,263
Amortisation for the year
348,512
0
348,512
Disposals
811,385
0
811,385
Balance as at 31 Dec 2024
4,630,391
0
4,630,391
CARRYING AMOUNT
Balance as at 31 Dec 2023
1,068,251
516,856
1,585,106
Balance as at 31 Dec 2024
1,060,367
1,348,412
2,408,779
A portion of long-term property rights relates to easements with a finite useful life, which are
presented under land.
2 Property, plant and equipment
in EUR
Property, plant and equipment
(PPE) group for 2025
Cost
Accumulated depreciation
Carrying amount
31/12/2025
31/12/2024
31/12/2025
31/12/2024
31/12/2025
31/12/2024
Land
10,895,071
10,895,071
1,415,779
1,343,438
9,479,292
9,551,633
Buildings
134,404,145
131,641,160
95,934,717
92,794,543
38,469,429
38,846,617
Plant and equipment
257,738,049
245,772,392
201,118,775
192,899,722
56,619,274
52,872,669
Assets under acquisition
10,378,714
8,731,586
0
0
10,378,714
8,731,586
Advances
1,285,300
1,697,110
0
0
1,285,300
1,697,110
TOTAL
414,701,280
398,737,319
298,469,271
287,037,703
116,232,009
111,699,615
in EUR
Property, plant and equipment
(PPE) group for 2024
Cost
Accumulated depreciation
Carrying amount
31/12/2024
31/12/2023
31/12/2024
31/12/2023
31/12/2024
31/12/2023
Land
10,895,071
10,803,263
1,343,438
1,271,096
9,551,633
9,532,167
Buildings
131,641,160
130,042,752
92,794,543
90,433,245
38,846,617
39,609,507
Plant and equipment
245,772,392
239,932,766
192,899,722
188,822,401
52,872,669
51,110,365
Assets under acquisition
8,731,586
9,603,529
0
0
8,731,586
9,603,529
Advances
1,697,110
0
0
0
1,697,110
0
TOTAL
398,737,319
390,382,311
287,037,703
280,526,742
111,699,615
109,855,569
The Company has no assets under finance leases; furthermore, as at 31 December 2025 and 31
December 2024, the Company had no assets pledged as security for any guarantees.
232
Changes in property, plant and equipment
in EUR
2025
Land
Buildings
Production
and other
equipment
Total
Assets under
acquisition
Advances
TOTAL
COST
Balance as at 31 Dec 2024
10,895,072
131,641,160
245,772,392
388,308,623
8,731,586
1,697,110
398,737,319
Additions
0
0
0
0
19,273,483
1,583,102
20,856,585
Transfer from assets under
acquisition
0
2,762,986
14,089,152
16,852,138
-17,626,355
-1,994,912
-2,769,129
Disposals
0
0
2,123,495
2,123,495
0
0
2,123,495
Balance as at 31 Dec 2025
10,895,072
134,404,145
257,738,049
403,037,266
10,378,714
1,285,300
414,701,280
ACCUMULATED
AMORTISATION
Balance as at 31 Dec 2024
1,343,439
92,794,543
192,899,722
287,037,704
0
0
287,037,704
Depreciation
72,342
3,140,174
9,793,487
13,006,003
0
0
13,006,003
Disposals
0
0
1,573,676
1,573,676
0
0
1,573,676
Impairments+/-
0
0
759
759
0
0
759
Balance as at 31 Dec 2025
1,415,781
95,934,716
201,118,775
298,469,272
0
0
298,469,272
CARRYING AMOUNT
Balance as at 31 Dec
2024
9,551,633
38,846,617
52,872,670
101,270,920
8,731,586
1,697,110
111,699,615
Balance as at 31 Dec
2025
9,479,291
38,469,428
56,619,274
104,567,993
10,378,714
1,285,300
116,232,009
As at 31 December 2025, the Company reviewed the carrying amounts of property, plant and
equipment and determined that their carrying amount does not exceed their recoverable amount. In
accordance with IAS 36, the Company performed an impairment test of non-current assets in 2023
and, for this purpose, obtained a valuation of the assets from a certified business appraiser. As at 31
December 2025 and 31 December 2024, no valuations were performed as the Company identified no
indicators of impairment.
In 2025, the Company reported an increase in property, plant and equipment, resulting from the
difference between the value of invested assets and the depreciation charged. In 2025, the Company
invested EUR 19,273,483 in production modernization and replacement equipment (compared to EUR
14,302,164 in 2024), primarily in the titanium dioxide division. The most significant investments
included: the installation of a filter press for gel dewatering (EUR 3,884,836), steam system
optimization and an increase in H2SO4 production capacity (EUR 3,280,760), replacement of
electrostatic precipitator 27.04 B (EUR 1,079,107) and electrostatic precipitator 27.04 A (EUR
812,516), replacement of pigment dewatering press 39.33 (EUR 385,784), modernization of the
warehouse and the lime and calcite suspension preparation unit (EUR 370,367), construction of a new
pipe bridge in the ‘black end’ (EUR 250,742), sulphuric acid overhaul, and similar investments along
with replacement equipment for the ongoing operation of the production process. A total of EUR
6,715,328 was allocated in 2025 to sustainability and energy transformation, including investments in
e-vehicles (passenger electric cars and electric forklifts), which represent sustainable investments
related to climate change and the Company's sustainable operations. As part of these investments,
we are replacing old lighting with more energy-efficient alternatives to achieve power savings, we have
prepared the groundwork for the first phase of installing battery storage systems, and we replaced 28
electric motors with more energy-efficient models.
As at 31 December 2025, the Company reports EUR 10,378,714 in assets under construction, relating
primarily to the maintenance and modernisation of titanium dioxide production. The key projects
include: the installation of a filter press for gel dewatering (EUR 3,776,506), the replacement of
electrostatic precipitator 27.04 B (EUR 1,436,678), the replacement of electrostatic precipitator 27.04
A (EUR 1,170,085), the replacement of a liquid sulphur filter (EUR 315,011), the construction of a new
pipe bridge in the ‘black end’ (EUR 280,792), and others.
233
in EUR
2024
Land
Buildings
Production
and other
equipment
Total
Assets under
acquisition
Advances
TOTAL
COST
Balance as at 31 Dec
2023
10,803,263
130,042,752
239,932,767
380,778,782
9,603,529
0
390,382,311
Additions
0
13,038,169
2,289,606
15,327,775
Transfer from assets
under acquisition
91,808
1,637,730
12,180,574
13,910,112
-13,910,112
-592,496
-592,497
Disposals
0
39,322
6,340,948
6,380,271
0
0
6,380,271
Balance as at 31 Dec
2024
10,895,072
131,641,160
245,772,392
388,308,623
8,731,586
1,697,110
398,737,319
IMPAIRMENT
Balance as at 31 Dec
2023
1,271,097
90,433,245
188,822,401
280,526,743
0
0
280,526,743
Depreciation
72,342
2,400,620
9,206,458
11,679,420
0
0
11,679,420
Disposals
0
39,322
5,068,915
5,108,238
0
0
5,108,238
Impairments+/-
0
0
60,222
60,222
0
0
60,222
Balance as at 31 Dec
2024
1,343,439
92,794,543
192,899,722
287,037,704
0
0
287,037,704
CARRYING AMOUNT
Balance as at 31 Dec
2023
9,532,167
39,609,507
51,110,365
100,252,039
9,603,529
0
109,855,569
Balance as at 31 Dec
2024
9,551,633
38,846,617
52,872,670
101,270,920
8,731,586
1,697,110
111,699,615
Property, plant and equipment also includes an increase in the cost of assets amounting to EUR
3,645,715 (compared to EUR 2,913,556 in 2024) arising from capitalised own work and services,
where the Company capitalises its own maintenance services and materials used for maintenance.
Within this scope, the realisation of capitalised own work required materials, labour, the purchase of
other assets, and directly related overheads; these are recorded in detail against individual existing
fixed assets that were either repaired or refurbished during the year and during overhauls in 2025 (an
extensive overhaul of the sulphuric acid plant was carried out in 2025). Key investments in 2025
performed by the in-house maintenance team included: the installation of a steam turbine for
electricity generation (EUR 910,866), the replacement of electrostatic precipitators (EUR 432,634),
the installation of a filter press for gel dewatering (EUR 237,747), the replacement of a worn-out plate
heat exchanger PH 4, POS. 02.12 B (EUR 236,434), as well as the refurbishment of a calcination
furnace and other equipment within the sulphuric acid plant overhaul and other investments. Other
works were performed to ensure the seamless operation of production and the remediation of
individual existing assets, as well as overhauls of the sulphuric acid and TiO2 plants; these
interventions increased either the efficiency or the useful life of these assets, which are essential for
the ongoing production process of the core product.
Land also includes recorded easements amounting to EUR 44,995 (compared to EUR 117,337 in 2024).
Easements with finite useful lives of 20 years or more relate to the laying and maintenance of pipelines,
cables, and water mains, as well as for the requirements of works transitioning from wet to dry gypsum
filling. There was no increase in the cost of land in 2025; the decrease in land values relates to the
amortisation of easements charged for the 2025 financial year in the amount of EUR 72,342.
No borrowing costs were capitalised as part of property, plant and equipment in 2025. As at 31
December 2025, 47.5% of all property, plant and equipment in use was fully depreciated (compared
to 49.3% as at 31 December 2024). This proportion is calculated based on the cost of property, plant
and equipment, excluding land. As at 31 December 2025, the Company had EUR 2,916,705 (31
December 2024: EUR 3,342,594) in outstanding liabilities for the purchase of property, plant and
equipment. As at 31 December 2025, the Company had entered into commitments for the purchase
of fixed assets amounting to EUR 6,209,274, which have not yet been recognised in the 2025 financial
statements.
3 Financial assets at fair value through other comprehensive income (FVOCI)
The Company records its investments in the shares of Elektro Celje and Elektro Maribor as financial
assets at fair value through other comprehensive income, with the objective of generating cash flows
234
from received dividends and the sale of securities. Both equity securities are listed on the SI ENTER
multilateral trading facility (MTF) (https://sienter.si), which is operated by the Ljubljana Stock
Exchange. Based on the listing of both equity securities as at 31 December 2025, it can be established
that both securities have a known market price; however, this price is not considered indicative for
the assessment of the fair value of these investments, as the shares record very low trading volumes.
The Company verified the fair value of the assets and measured the financial assets through other
comprehensive income at fair value based on the yields of the shares of the electricity companies in
which the Company holds its primary investments, while also taking into account the P/B (price-to-
book) ratios of the electricity industry sector. Financial assets increased by EUR 422,307 due to fair
value revaluation (through the reversal of a value adjustment), which was credited to fair value
reserves (as at 31 December 2024, financial assets decreased (were impaired) by EUR 271,207 due
to fair value revaluation charged against fair value reserves). In 2025, the Company received dividends
from these investments in the amount of EUR 44,466 (compared to EUR 6,001 in dividends received
in 2024).
in EUR
Non-current financial investment
group for 2025
Cost
Allowance for impairment
Fair value
31/12/2025
31/12/2024
31/12/2025
31/12/2024
31/12/2025
31/12/2024
Other investments
2,077,692
2,077,692
368,061
790,367
1,709,631
1,287,325
TOTAL
2,077,692
2,077,692
368,061
790,367
1,709,631
1,287,325
Members of the Management Board and the Supervisory Board have not received any long-term
loans. Cinkarna Celje, d. d., has no subsidiaries or associates and does not conduct business with
other related parties.
Movements in non-current financial investments
Fair value equals cost less revaluation.
in EUR
2025
Other financial investments
COST
Balance as at 31 Dec. 2024
2,077,692
Changes during the year
0
Balance as at 31 Dec. 2025
2,077,692
REVALUATION
Balance as at 31 Dec. 2024
790,368
Reduction during the year
-422,306
Balance as at 31 Dec. 2025
368,061
FAIR VALUE
Balance as at 31 Dec. 2024
1,287,325
Balance as at 31 Dec. 2025
1,709,631
in EUR
2024
Other financial investments
COST
Balance as at 31 Dec. 2023
2,077,692
Changes during the year
0
Balance as at 31 Dec. 2024
2,077,692
REVALUATION
Balance as at 31 Dec. 2023
519,161
Reduction during the year
271,207
Balance as at 31 Dec. 2024
790,368
FAIR VALUE
Balance as at 31 Dec. 2023
1,558,532
Balance as at 31 Dec. 2024
1,287,325
235
4 Other non-current assets
in EUR
Other non-current assets group for
2025
Cost
Revaluation
Carrying amount
31/12/2025
31/12/2024
31/12/2025
31/12/2024
31/12/2025
Emission allowances
115,376
105,470
0
0
115,376
TOTAL
115,376
105,470
0
0
115,376
in EUR
Other non-current assets group for
2024
Cost
Revaluation
Carrying amount
31/12/2024
31/12/2023
31/12/2024
31/12/2023
31/12/2024
Emission allowances
105,470
84,444
0
0
105,470
TOTAL
105,470
84,444
0
0
105,470
Other assets comprise emission allowances, security deposits, and other non-current assets. Emission
allowances obtained from the state free of charge are classified under other intangible assets and are
valued at EUR 1. In 2025, the Company acquired 36,788 allowances (compared to 40,397 allowances
in 2024); all allowances were obtained from the state free of charge in accordance with the
Environment Protection Act (ZVO-1). At the beginning of 2025, the Company surrendered 26,882
allowances to the Slovenian Environment Agency (ARSO), of which 23,273 were for CO2 emissions in
2024, and returned 3,609 allowances due to adjustments in the quantity of allowances allocated for
2024. The Company did not sell any surplus allowances in 2025.
The Company holds a remaining balance of 115,376 allowances. As at 31 December 2025, the market
(fair) value per allowance was EUR 83.79 (31 December 2024: EUR 65.10)
(source: https://belektron.eu/en/news), representing a total value of EUR 9,667,355 (31 December
2024: EUR 6,866,097). In April 2026, the Company will surrender a portion of these allowances
(24,397) for 2025 CO2 emissions to the Ministry of the Environment, Climate and Energy. The
remaining allowances represent a surplus (Cinkarna Celje, d. d., is a net recipient of emission
allowances).
5 Deferred tax assets and liabilities
in EUR
Description
Assets 31 Dec. 2025
Assets 31 Dec. 2024
Liabilities 2025
Liabilities 2024
Opening balance
1,536,620
1,572,841
74,132
133,797
Increase during the year
29,025
68,796
92,908
0
Decrease during the year
205,745
105,017
0
59,665
Closing balance
1,359,900
1,536,620
167,040
74,132
Offsetting
-167,040
-74,132
-167,040
-74,132
Net closing balance
1,192,860
1,462,488
0
0
The decrease in deferred tax assets in 2025 relates to the utilisation of provisions for: jubilee benefits
and severance pay, as well as environmental and other provisions in the amount of EUR 205,309 (in
2024, the decrease amounted to EUR 102,501) and EUR 436 relating to the settlement/write-off of
formed allowances for receivables (in 2024, the decrease was EUR 2,516). The increase in deferred
tax assets relates to half of the provisions formed for environmental purposes in the amount of EUR
29,025 (compared to EUR 63,293 in 2024). No deferred tax assets were formed for jubilee benefits
and severance pay upon retirement in 2025, as their formation in 2025, similar to 2024, is fully tax-
deductible. The statutory corporate income tax rate as at 31 December 2025 is 22%. As at 31
December 2025, the Company increased its deferred tax liabilities arising from the revaluation of
financial investments or their presentation at fair value by EUR 92,908; consequently, as at 31
December 2025, deferred tax liabilities of EUR 167,040 are reported (as at 31 December 2024,
deferred tax liabilities amounted to EUR 74,132). The Company reviewed the recoverability of deferred
taxes based on projected taxable profits for the period in line with the Company's five-year strategy
for 2024–2028.
Changes in the balance of deferred tax assets had a negative impact on the statement of profit or
loss in the amount of EUR 176,720 (in 2024, a negative impact of EUR 36,222). The balance of deferred
tax assets as at 31 December is as follows:
236
in EUR
31/12/2025
31/12/2024
Environmental provisions
1,189,849
1,328,433
Provisions for post-employment and other long-term employee benefits
160,490
198,190
Deferred tax assets
9,560
9,996
Total
1,359,899
1,536,619
Deferred tax liabilities from financial assets measured at fair value through other
comprehensive income
-167,040
-74,132
Total deferred tax assets
1,192,860
1,462,488
6 Inventories
in EUR
Inventory group
31/12/2025
31/12/2024
Raw materials and consumables
30,520,042
40,009,286
Work in progress
3,273,409
3,407,765
Finished products
20,501,406
15,354,235
Merchandise
38,850
66,785
Advances paid
126,963
131,357
TOTAL
54,460,671
58,969,428
The net realisable value of inventories is not lower than their carrying amount. In the 2025 financial
year, an additional write-down of raw materials and merchandise inventories was made in the amount
of EUR 264,757 (compared to EUR 14,771 in 2024) due to revaluation to net realisable value,
obsolescence, and the unsuitability for use of raw materials and spare parts. There were no material
inventory discrepancies identified in 2025 or the previous year.
No value adjustments due to obsolescence or the unusability of work in progress and finished products
were recorded in 2025 (2024: EUR 8); the adjustment for non-moving inventories in 2025 amounted
to EUR 25,408 (2024: EUR 22,182). The value of finished products and work in progress increased by
26% compared to 2024, resulting from lower sales and an increase in the production volume of
titanium dioxide pigment in the final quarter of 2025. Inventories are not pledged as collateral. The
net realisable value of inventories as at 31 December 2025 is determined by their selling price less
costs to sell and exceeds their carrying amount.
7 Current financial assets
in EUR
Current financial assets group
for 2025
Investment value
Allowance for impairment
Net investments
31/12/2025
31/12/2024
31/12/2025
31/12/2024
31/12/2025
31/12/2024
Current financial assets – treasury
bills
38,444,342
47,150,115
0
0
38,444,342
47,150,115
Fair value of derivative financial
instruments
12,617
64,744
0
0
12,617
64,744
TOTAL
38,456,959
47,214,859
0
0
38,456,959
47,214,859
As part of its surplus liquidity management, the Company invests funds in European and other
government short-term securities – treasury bills – with a maturity of up to one year. All instruments
are highly liquid and are traded on active markets. The selection of individual issuers is based on the
expected yield (interest rate), the country’s credit rating, and current conditions in the European
government securities market. In managing the portfolio, the Company follows the principles of low
credit risk and short-term maturity.
As at the balance sheet date, their carrying amount was EUR 38,444,342 (as at 31 December 2024:
EUR 47,150,115). Treasury bills are classified as financial assets held to maturity for the purpose of
liquidity management and are categorised as current financial assets, where the cash flows represent
solely payments of principal and interest (SPPI).
The treasury bills carry low credit risk, are issued by countries with high credit ratings, and are
classified under Level 1 of the fair value hierarchy as there are publicly available quotes. Due to their
short-term maturity, their carrying amount reasonably approximates their fair value. The Company
237
assesses that the treasury bills do not represent significant interest rate or credit risks and that there
is no objective evidence of impairment. The bills mature within a period of up to 12 months and are
part of the Company's liquidity management strategy.
8 Current trade receivables
in EUR
Current trade receivables group
31/12/2025
31/12/2024
Trade receivables
22,966,858
27,100,674
Other receivables
3,129,199
3,142,911
Total
26,096,057
30,243,586
Current trade receivables
in EUR
Receivables group 2025
Gross value
Allowance for impairment
Net receivables
31/12/2025
31/12/2024
31/12/2025
31/12/2024
31/12/2025
31/12/2024
Domestic customers
2,265,057
2,157,838
273,321
273,233
1,991,737
1,884,604
Foreign customers
21,350,041
25,408,800
429,247
363,719
20,920,794
25,045,081
Indirect exporters
54,327
170,989
0
0
54,327
170,989
TOTAL
23,669,425
27,737,626
702,568
636,952
22,966,858
27,100,674
As of 1 June 2021, the Company's trade receivables are insured with an external institution and are
not pledged as security for liabilities. Uninsured receivables as at 31 December 2025 amounted to EUR
1,056,902 (this relates to a temporary and very short-term excess of the agreed insurance limit with
certain customers) and EUR 836,098 as at 31 December 2024.
Detailed disclosures relating to credit risk are provided in Note VIII Financial instruments and financial
risks.
in EUR
Receivables group 2024
Gross value
Allowance for impairment
Net receivables
31/12/2024
31/12/2023
31/12/2024
31/12/2023
31/12/2024
31/12/2023
Domestic customers
2,157,838
2,841,398
273,233
266,985
1,884,604
2,574,413
Foreign customers
25,408,800
25,012,549
363,719
394,858
25,045,081
24,617,691
Indirect exporters
170,989
242,410
0
0
170,989
242,410
Receivables for the account
of third parties
0
2,681
0
0
0
2,681
TOTAL
27,737,626
28,099,037
636,952
661,843
27,100,674
27,437,194
Other operating receivables
in EUR
Other receivables group
31/12/2025
31/12/2024
VAT receivables
2,750,530
2,697,649
Receivables from state institutions
113,280
2,990
Receivables from employees
5,215
6,297
Other receivables
260,174
435,975
TOTAL
3,129,199
3,142,911
The Company has no receivables from members of the Management Board or the Supervisory Board.
9 Cash and cash equivalents
in EUR
Asset group
31/12/2025
31/12/2024
Cash on hand
30
30
Cash at bank
11,785,855
9,218,478
Short-term deposits
7,000,000
8,040,374
Foreign currency cash at bank
336,900
472,524
TOTAL
19,122,785
17,731,407
Cash is deposited with domestic banks and earns a fixed annual interest rate.
238
10 Other current assets
in EUR
description
31/12 2025
31/12 2024
Prepaid expenses
220,527
179,975
VAT on advances received
2,200
2,100
Other
201,747
48,686
Total
424,474
230,760
11 Equity
in EUR
Equity items
31/12/2025
31/12/2024
Called-up capital
20,229,770
20,229,770
Capital reserves
44,284,976
44,284,976
Legaly reserves
16,931,435
16,931,435
Reserves for treasury shares
5,688,771
5,646,149
Treasury shares
-5,688,771
-5,646,149
Other revenue reserves
108,104,757
108,147,379
Fair value reserves
-1,354,842
-1,650,342
Retained earnings
28,558,990
23,093,258
TOTAL EQUITY
216,755,086
211,036,476
The Company's share capital consists of 8,079,770 freely transferable no-par value shares of the
same class. All no-par value shares carry the same nominal value and are fully paid up. As at the
balance sheet date of 31 December 2025, the value of called-up capital amounted to EUR 20,229,770.
Capital reserves may be used under the conditions and for the purposes prescribed by law and
amounted to EUR 44,284,976 as at 31 December 2025. They were formed by special decree during
the ownership transformation process of Cinkarna Celje, d. d., and remained unchanged in 2025
compared to 2024.
Legal reserves amounted to EUR 16,931,435 as at 31 December 2025 and remained unchanged
during 2025.
Treasury shares
Based on the resolution of the 28th Annual General Meeting of Shareholders of Cinkarna Celje, d. d.,
held on 19 June 2024, the Management Board was granted authorisation to acquire treasury shares.
The total proportion of all treasury shares may not exceed 10% of the Company's share capital. The
authorisation to acquire treasury shares is valid for 12 months starting from 18 June 2024 inclusive.
Cinkarna Celje, d. d., may acquire treasury shares through transactions concluded on organised and
unorganised securities markets, provided that the purchase price of the shares is not lower than EUR
14 per share and not higher than EUR 29 per share.
As at 31 December 2025, the Company holds 299,874 treasury shares (3.7% of all shares). Based on
the resolution of the 28th Annual General Meeting of Shareholders of Cinkarna Celje, d. d., held on 19
June 2024, the Company acquired 1,490 treasury shares in 2025 with a value of EUR 42,622.
Number of treasury shares
Average price per share (in EUR)
Value of treasury shares
(in EUR)
Balance as at 31 Dec. 2024
298,384
5,646,149
Purchases in 2025
1,490
28.61
42,622
Balance as at 31 Dec. 2025
299,874
5,688,771
Treasury share purchases represent purchases recorded in 2025; in 2024, the Company acquired
33,734 treasury shares valued at EUR 831,386. Detailed treasury share purchases in 2025 by day are
presented in the table below.
239
Date
Number of treasury shares
Average price per share (in
EUR)
Value of treasury shares
(in EUR)
4 March 2025
20
28.90
578
7 April 2025
410
27.97
11,468
8 April 2025
480
28.90
13,872
9 April 2025
580
28,80
16,704
Total purchases in 2025
1.490
28.61
42,622
Reserves for treasury shares as at 31 December 2025 amount to 5,688,771 and have increased
by EUR 42,622 since the final day of the previous year due to the purchase of treasury shares.
Other revenue reserves decreased by EUR 42,622 in 2025 due to the purchase of treasury shares
and amounted to EUR 108,104,757 as at 31 December 2025.
Fair value reserve
The fair value reserve includes the costs of remeasurements of post-employment
benefits (actuarial gains/losses) arising from changes in the present value of the severance pay
obligation upon retirement and changes in the fair value of financial assets.
in EUR
2025
31/12/2024
Increase
31/12/2025
Change in reserves from fair value measurement of financial
investments
338,239
422,307
760,546
Deferred tax adjustment on surplus
-74,131
-92,908
-167,039
Unrealised actuarial gains/losses
-1,914,449
-33,899
-1,948,349
Total
-1,650,342
295,500
-1,354,842
The fair value reserve comprises the cumulative change in the fair value of financial assets and post-
employment benefits. Compared to 2024, the fair value reserve increased by EUR 33,899 due to the
remeasurement of post-employment benefits, decreased by EUR 422,307 due to changes in the fair
value of financial assets, and increased by deferred tax liabilities of EUR 92,908; at the end of 2025,
it amounted to -EUR 1,354,842.
in EUR
2024
31/12/2023
Increase
Decrease
31/12/2024
Change in reserves from fair value measurement of
financial investments
609,446
0
271,207
338,239
Deferred tax adjustment on surplus
-133,797
0
-59,665
-74,131
Unrealised actuarial gains/losses
-1,718,135
-196,314
0
-1,914,449
Total
-1,242,486
-196,314
211,541
-1,650,342
Retained Earnings
Retained earnings from previous years, which amounted to EUR 23,093,258 at the end of 2024,
increased in 2025 by the net profit for the current year of EUR 19,469,546 and decreased by EUR
14,003,813, which is equal to the amount of dividends paid at the end of June 2025, in accordance
with the resolution of the 29th Annual General Meeting of Shareholders of Cinkarna Celje, d. d., dated
21 May 2025. Following all adjustments, retained earnings as at 31 December 2025 amount to EUR
28,558,990.
The Company has restrictions on the distribution of profit for the 2023 financial year because it
received subsidies in that year under the Act on Aid to the Economy to Mitigate the Consequences of
the Energy Crisis (ZPGOPEK). In accordance with ZPGOPEK requirements, the entire net profit for the
2023 financial year of EUR 12,653,407 was transferred to other revenue reserves. These reserves are
permanent in nature, as the law prohibits the distribution of this profit to shareholders at any time in
the future.
Dividend per share
In 2025, a gross dividend of EUR 1.80 per share was paid. The gross dividend in 2024 is the sum of
two dividends paid during that year, namely EUR 0.9 gross per share (based on the 28th Annual
General Meeting) and EUR 3.2 gross per share (based on the Extraordinary General Meeting).
240
Basic and diluted earnings per share
in EUR
Items
31/12 2025
31/12 2024
(a) Net profit for the financial year
19,469,546
23,087,250
(b) Number of shares
8,079,770
8,079,770
(c) Basic earnings per share (a/b)
2.41
2.86
(d) Diluted earnings per share (a/b)
2.41
2.86
Determination of distributable profit
in EUR
31/12 2025
31/12 2024
Compulsory appropriation of profit
Net profit
19,469,546
23,087,250
Profit after compulsory appropriation
19,469,546
23,087,250
Remaining profit
19,469,546
23,087,250
Retained earnings (brought forward)
9,089,444
6,007
Distributable profit
28,558,990
23,093,258
12 Provisions for employee benefits
The Company reports provisions for long-service awards and severance pay upon retirement, formed
in accordance with the provisions of the amended IAS 19. The actuarial calculation was performed
using the book reserve method by an external certified actuary. The following assumptions were
applied: wage growth within the Company of 2.5% (2024: 3.0%), a discount rate of 3.89% per annum
(2024: 3.52%), retirement conditions, Slovenian population mortality tables for 2007, and employee
turnover within the Company in 2025 (the assumptions used in 2025 are consistent with those in
2024).
in EUR
Post-employment employee benefits 2025
31/12/2025
31/12/2024
Provisions for severance pay
2,990,259
2,947,434
Provisions for long-service awards
828,827
801,288
Total
3,819,086
3,748,722
in EUR
Post-employment benefits 2025
31/12/2024
Additions
Utilisation
31/12/2025
Provisions for severance pay
2,947,434
258,690
215,865
2,990,259
Provisions for long-service awards
801,288
154,400
126,861
828,827
TOTAL
3,748,722
413,090
342,727
3,819,086
in EUR
Post-employment employee benefits
2025
2024
Balance as at 1 Jan.
3,748,722
3,843,523
Current service costs
214,857
220,060
Interest costs
121,820
119,324
Utilisation of provisions for payments
-254,235
-549,817
Employee departure (reversal)
-88,492
-152,670
Actuarial loss/gain
76,413
268,303
Balance as at 31 Dec.
3,819,086
3,748,722
in EUR
Post-employment benefits 2024
31/12/2023
Additions
Utilisation
31/12/2024
Provisions for severance pay
3,101,653
429,872
584,091
2,947,434
Provisions for long-service awards
741,870
177,815
118,397
801,288
TOTAL
3,843,523
607,687
702,487
3,748,722
241
Sensitivity analysis
in EUR
in EUR
13 Other provisions
Other provisions as at 31 December 2025 represent environmental provisions.
Movements in provisions
in EUR
Provisions 2025
31/12/2024
Additions
Utilisation
Reversala
31/12/2025
Environmental provisions
14,302,270
263,868
1,819,744
0
12,746,394
Total
14,302,270
263,868
1,819,744
0
12,746,394
in EUR
Provisions 2024
31/12/2023
Additions
Utilisation
Reversala
31/12/2024
Environmental provisions
14,233,199
575,819
506,748
0
14,302,270
Total
14,233,199
575,819
506,748
0
14,302,270
Environmental provisions
Regarding environmental provisions, the primary focus was on verifying whether a legal or constructive
obligation exists due to past events, alongside an assessment of potentially changed circumstances in
the current year that could impact the accounting estimate. As at 31 December 2025, non-current
provisions were re-evaluated with the assistance of external experts, taking into account general
inflation, additional works, and specific circumstances and events in 2025 that necessitated their
addition or release. All necessary remediation activities were reviewed, supported by various spot
measurements of the terrain and the definition of appropriate activities, which were valued with the
help of external specialists in the field of geology. Taking into account inflation (based on consumer
price growth and IMAD estimates for the 2026–2030 period), as well as the best estimate of the
timeline for the execution of activities which served as the basis for discounting, the provisions were
discounted to their present value using an average discount factor of 2.04%. This factor is based on
the yield on 10-year Slovenian government bonds with maturities between 2026 and 2030. According
to expert estimates, remediation works for landslide reinforcement and other activities will be carried
out in 2026, while the remediation of the ONOB (Bukovžlak Non-hazardous Waste Landfill) is
scheduled for the years 2026 to 2029.
The following sections detail the reasons for the reversal and additional formation of provisions, as
well as the reasons for maintaining provisions where it is more likely than not that future outflows of
resources will occur.
I. Provision for Ecological Investments in Titanium Dioxide Production (change in neutralisate
disposal method) was originally formed in June 1994 during the ownership transformation
process. The revalued amount as at 31 December 2006 was EUR 8.7 million, representing
47% of the invested assets. Annually, the value of the provision is reduced by the same
percentage as the depreciation charged on the invested assets. The balance of the
provisioned funds at the end of 2025 amounted to EUR 1,670,668, while at the end of
2024, the value was EUR 1,966,691.
Sensitivity analysis 31 Dec. 2025
Discount rate
Wage growth
Change in
percentage points
percentage points
Change (+/-)
+0.5
–0.5
+0.5
–0.5
Impact on the balance of obligations
-130,026
140,386
141,405
-132,134
Sensitivity analysis 31 Dec. 2024
Discount rate
Wage growth
Change in
percentage points
percentage points
Change (+/-)
+0.5
–0.5
+0.5
–0.5
Impact on the balance of obligations
-135,703
146,577
146,759
-137,137
242
II. For the remediation of the high earth-fill dam at the Za Travnik waste disposal facility
(NZOO ZT), provisions were originally recognised in 2011. The amount at that time was
determined based on a cost estimate for the remediation of the dam at the Bukovžlak non-
hazardous waste landfill (ONOB). Following the recognition of the provision, we carried out
several urgent measures over the past years (drainage of hinterland waters on the eastern
flank – Phase I, construction of a reinforcement embankment on the second berm of the
dam), and in subsequent years, we primarily expanded and renovated the piezometer
network for technical observation and drilled several research boreholes. Based on the
results from the observation boreholes, we established a better condition of the dam body
than was estimated when the provision was formed; therefore, in 2018, based on the
designer's estimate, we reduced the scope of the provisions to EUR 450,000. In the
following years, we implemented the necessary measures. Thus, at the end of 2021, the
value of unspent funds amounted to EUR 373,300. Research conducted in 2022 and regular
technical observation indicated two necessary additional measures: the arrangement of
drainage on the eastern side of the dam and reinforcement with drainage on the western
side of the dams. Based on a rough cost estimate of the required works, we therefore
increased the provision by EUR 579,782. Consequently, the balance of the provision as at
31 December 2022 was EUR 888,133. In 2023, during heavy rainfall at the beginning of
August, a landslide occurred directly below the dam body. At the end of 2023, we formed
an additional provision based on the funds required for landslide remediation and taking
into account discount factors relative to the anticipated deadline for the execution of all
planned remediation works at NZOO ZT. The total amount of provisioned funds as at 31
December 2023 thus amounted to EUR 1,637,234. In 2024, due to complications in
administrative procedures for relocating an electric cable running across the landslide area,
we did not carry out the planned landslide remediation intervention, but merely a measure
involving the installation of additional drainage ribs on the eastern part of the dam body.
In the absence of the planned remediation works, the landslide area expanded in 2024.
Due to the elimination of additional consequences of the landslide (Report "Proposal for
supplementing drainage and replacing existing drainage on the western flank of the Za
Travnik dam from profile Pr4 to PO1" by the Faculty of Civil Engineering and Geodesy),
the inflation adjustment, and the discount factor, the estimated cost of works amounted
to EUR 513,254. Taking into account the remediation procedures already implemented in
2024 (EUR 213,040), we increased the provision by EUR 300,215. Considering the above,
the balance of the provision as at 31 December 2024 was EUR 1,937,448.
In 2025, we carried out remediation works in the amount of EUR 75,759, and due to
inflation adjustment and discounting to present value, we increased the provision by EUR
13,227, bringing the balance of the provision as at 31 December 2025 to EUR 1,874,917.
To provide a better understanding of the reasons for the periodic re-assessment of non-
current provisions, we provide the following additional explanations. The fact is that the
dams at Za Travnik and Bukovžlak are constructed as earth-fill dams, composed of various
materials that partially represent legacy burdens. They hold back and contain millions of
tonnes of material; therefore, physical removal is not possible. The dams are exposed to
natural phenomena (precipitation, drying, underground water flows, etc.) and constantly
tend toward entropy. As a prudent and legally bound steward, we perform regular technical
observation and all mandatory monitoring on them. We respond to findings with measures
that experts deem necessary to prevent the materialisation of the risk of harmful emissions
or damage. Cinkarna has established a permanent project group which, in addition to its
employees, includes experts from the Chair of Geotechnics (KGT) at the Faculty of Civil
Engineering and Geodesy of the University of Ljubljana and the engineering firm Hidrosvet
d.o.o. The project group meets regularly to review the progress of agreed work and any
newly emerging circumstances. The expert findings serve as the basis for assessing the
adequacy of the provisions formed.
III. For the remediation of the Bukovžlak non-hazardous waste landfill (ONOB), a non-current
provision of EUR 5 million was originally recognised in 2011 based on a rough estimate.
243
During the project design phase in 2017, a need for an additional recognition of EUR 1
million became apparent. At that time, the required specialised execution technique and
the materials to be used were already known. At the end of 2019, the balance following
partial utilisation amounted to EUR 4.5 million. Research on the impact of pollution caused
by legacy burdens (conducted by CDM Smith and the Chair of Geotechnics – KGT)
demonstrated the need to construct a grout curtain on the north-eastern side of the ONOB
dam body and to reconstruct the C1 drainage under the high earth-fill dam at Bukovžlak.
For this purpose, an additional provision of EUR 2,682,592 was recognised in 2021. In
2023, the Company requested the designer to revise the estimate as at 31 December
2022, which covered necessary additions and price increases for the facility under
construction, designer supervision, geodetic monitoring, necessary measurements, and
quality control of the materials used. Simultaneously, the designer estimated the deadlines
for the completion of all works, and an adjustment for projected inflation was accounted
for accordingly. A similar process was followed for 2024 and repeated in 2025. For
remediation purposes, funds amounting to EUR 1,433,893 were utilised in 2025 (compared
to only EUR 7,079 in 2024); during this period, preparatory works for the construction of
the grout curtain were carried out and construction of the guide wall commenced.
Furthermore, the entire eastern branch of the C1 drainage and its connection to the shafts
(J20 and J4) were completed. The provision was increased by EUR 250,641 (2024: EUR
55,813), primarily due to the requirements for inflation adjustments and discount factors
relative to the timeline of the remediation procedures. Including the C1 drainage and grout
curtain projects, the amount of funds still required for the ONOB remediation at the end
of 2025 was EUR 7,403,014 (end of 2024: EUR 8,586,266). The execution of the C1
drainage and the grout curtain will mainly be carried out in 2026, while the project for the
reconstruction of the closed ONOB landfill is scheduled for the period between 2026 and
2029.
IV. The results of regular technical observation of the Bukovžlak high earth-fill dam indicated
a trend of deteriorating safety on the eastern flank of the dam. As in the case described in
point II, the earth-fill dam responds to the impacts of natural phenomena. To prevent the
safety situation from deteriorating critically, the designer planned two parallel
interventions in 2017: remediation of the eastern flank and the preparation of an
embankment within the impoundment to initiate the lowering of water levels. The
estimated costs amounted to EUR 3,032,000. A non-current provision was recognised for
this amount as at 31 December 2017. In 2021, monitoring of the dam body identified a
weak point on the western part. The proposed solution involved the drainage of seepage
water from this part of the dam and the construction of a reinforcement embankment, for
which an additional provision of EUR 800,000 was recognised. Based on further work and
expert assessment of the situation, a different method for lowering the impoundment level
was devised in 2022, namely by lowering the spillway structure, which is a more cost-
effective and simpler solution than constructing an embankment. The designer took this
into account during the revision of the estimate as at 31 December 2023.
In the estimate as at 31 December 2023, the designer also incorporated the findings of
experts from the Faculty of Civil Engineering and Geodesy (FGG) Ljubljana ("Expert opinion
on the condition of the western flank of the Bukovžlak dam with a remediation proposal",
UL FGG KGT, Report E-13-23, June 2023), which stated that specific measures for the
drainage of seepage water from the western flank of the Bukovžlak dam were not
necessary in the originally conceived form. Instead, the westernmost shaft (JC1) on the
planned C1 drainage was designed as a sand trap, which will facilitate the cleaning of the
drainage system. Accordingly, the funds provisioned for this intervention (EUR 800,000)
were released (reversed). The revision as at 31 December 2023 also included necessary
supplements for designer supervision, geodetic monitoring, measurements, and quality
control of the materials used. Simultaneously, the designer estimated the deadlines for
the completion of all works, and an adjustment for projected inflation was accounted for
accordingly. At the end of 2024, the designer's estimate of the required works remained
unchanged, as it did at the end of 2025. Only a recalculation taking into account inflation
and the discount factor was performed which, together with utilisations of EUR 14,068,
244
results in a provision balance of EUR 1,797,796 as at 31 December 2025 (as at 31
December 2024, the balance was EUR 1,811,865).
The Management Board has received sufficient information regarding the changed circumstances and
the uncertainties associated with the assumptions applied. While certain uncertainties remain that
could lead to future adjustments of the recognised amounts – as these are in all cases based on
estimates – experts in the relevant field were engaged in the assessment process. Based on these
expert analyses and opinions, the provisions formed are considered adequate; however, they may be
subject to change in the future due to soil composition, the potential failure or degradation of materials,
or the emergence of different obligations. At present, there is no identified need to adjust the level of
provisions recognised as at 31 December 2025, for which it is estimated that the probability of future
outflows exceeds 50%
in EUR
Environmental provisions 2025
Balance as at
31 Dec. 2024
Annual plan
for utilisation
2025
Additions
2025
Utilisation
2025
Balance as at
31 Dec. 2025
Provisions for Za Travnik landfill
1,937,448
922,000
13,227
75,759
1,874,917
Provisions for Bukovžlak (ONOB) landfill
8,586,266
1,410,000
250,641
1,433,893
7,403,014
Provision for Bukovžlak high earth-fill dam
1,811,864
133,000
0
14,068
1,797,796
Provision for TiO2 production environmental investment
1,966,691
0
0
296,024
1,670,667
TOTAL
14,302,270
2,465,000
263,868
1,819,744
12,746,394
Given that the provisions under points II–IV were revised and re-evaluated at the end of 2024 and as
at the end of 2025 by external experts—considering the execution timeline, rising prices of specific
services and materials, and newly emerging circumstances such as the landslide caused by heavy
August rainfall—the Management Board assesses that the level of provisions is appropriately
recognised.
The utilisation of provisions in 2025 consists of contractor costs for work performed amounting to EUR
1,523,400 and accrued depreciation of EUR 320, which are charged directly against the recognized
provisions (points II, III, and IV of the environmental provisions), as well as accrued depreciation of
invested assets in the amount of EUR 296,024 (point I of the environmental provisions). Similar to
2024, there were no reversals of provisions in 2025. The additional additions (formation) of EUR
263,868 (taking into account projected inflation and the discount factor) relate to the re-assessment
of the provision status based on documentation from the external contractor, Hidrosvet. External
contractors estimate that works will be completed within 3 to 4 years. While the timeline of work is
predetermined, the actual execution may change due to unforeseen events or factors.
in EUR
Environmental provisions 2024
Balance as at
31 Dec. 2023
Annual plan
for utilisation
2024
Additions
2024
Utilisation
2024
Balance as at
31 Dec. 2024
Provisions for Za Travnik landfill
1,637,234
1,400,000
513,254
213,040
1,937,448
Provisions for Bukovžlak (ONOB) landfill
8,537,531
2,000,000
55,813
7,079
8,586,266
Provision for Bukovžlak high earth-fill dam
1,814,771
75,000
6,320
9,226
1,811,864
Provision for TiO2 production environmental investment
2,243,663
430,000
431
277,403
1,966,691
Total
14,233,199
3,905,000
575,819
506,748
14,302,270
Utilisation of provisions in 2024 represents contractor costs for work performed amounting to EUR
229,344 and accrued depreciation of EUR 320, charged directly against recognized provisions (points
II, III, and IV), and accrued depreciation of invested assets in the amount of EUR 277,083 (point I).
No reversal of provisions occurred in 2024 (in 2023, a provision of EUR 800,000 was reversed, relating
to a portion of previously estimated tasks no longer required in the future). Additional additions of EUR
575,819 (including projected inflation and discount factors) relate to a re-assessment of provisions
using documentation from the external contractor, Hidrosvet, which estimated completion within 3 to
5 years.
14 Non-current deferred income
in EUR
Deferred income
31/12/2025
31/12/2024
Funds received from the EU fund
7,505
35,341
Emission allowances
91,066
78,675
Subsidies for photovoltaics and e-vehicles
763,287
759,562
TOTAL
861,858
873,579
245
in EUR
Deferred income 2025
31/12 2024
Additions
Utilisation
31/12 2025
Funds received from the EU fund
77,662
0
27,836
49,826
Emission allowances
78,675
36,788
24,397
91,066
Subsidies for photovoltaics and e-vehicles *
717,242
52,400
48,676
720,966
Total
873,579
89,188
100,909
861,858
*In 2025, the Company received subsidised funds for the acquisition of e-vehicles in the amount of
EUR 52,400. The decrease of EUR 48,676 relates to the portion of funds intended to cover current-
year depreciation of solar power plants and e-vehicles.
**In 2024, the Company received subsidies of EUR 164,893 related to solar power plant installations,
representing 20% of the invested funds. These funds will be utilised in line with the accrued
depreciation of each solar plant over its useful life.
in EUR
Deferred income 2024
31/12 2023
Additions
Utilisation
31/12 2024
Remitted contributions for the employment of disabled
persons
780
9,983
10,763
0
Non-current deferred income for equipment
1,345
0
1,345
0
Funds received from the EU fund
105,499
0
27,836
77,662
Emission allowances
65,120
40,397
26,842
78,675
Subsidies obtained for photovoltaics and e-vehicles **
594,670
164,893
42,322
717,242
Total
767,414
215,273
109,108
873,579
15 Current financial liabilities
in EUR
Liabilities group
31/12/2025
31/12/2024
Current financial liabilities – assignments and cessations
60,832
29,915
TOTAL
60,832
29,915
Movements in liabilities from financing activities in 2025
in EUR
Balance as at 31 Dec.
2024
Cash changes
Non-cash changes
Balance as at 31 Dec.
2025
Acquisitions/ disposals
Dividends
0
-14,003,813
14,003,813
0
Assignments, cessations, and
forward contracts
29,915
30,917
0
60,832
Interest
0
-4,653
4,653
0
Treasury shares
0
-42.622
42.622
0
Total
29,915
-14,020,171
14,051,088
60,832
Movements in liabilities from financing activities in 2024
in EUR
Balance as at 31 Dec.
2023
Cash changes
Non-cash changes
Balance as at 31 Dec.
2024
Acquisitions/ disposals
Dividends
0
-32.041.992
32.041.992
0
Assignments, cessations, and
forward contracts
103,692
-73,777
0
29,915
Interest
0
-4,114
4,114
0
Treasury shares
-831,386
831,386
0
Total
103,692
-32,951,269
32,877,492
29,915
16 Current trade and other payables
in EUR
Operating liabilities
31/12/2025
31/12/2024
Trade payables
21,206,587
30,982,718
Other payables
3,679,019
5,141,818
Total
24,885,606
36,124,537
246
in EUR
Liability group
31/12/2025
31/12/2024
Current trade payables – domestic
11,920,515
13,112,651
Current trade payables – foreign
9,284,127
17,830,038
Current liabilities for unbilled goods and services
1,945
40,029
Current liabilities from advances received
769,091
749,351
Current liabilities to employees
1,601,972
2,508,986
Current liabilities for employer contributions
915,457
1,288,315
Current liabilities to state and other institutions
354,684
559,614
Other current liabilities
37,816
35,554
TOTAL
24,885,606
36,124,537
17 Current contract liabilities
As at 31 December 2025, the Company has no contract liabilities from contracts with customers.
18 Other current liabilities
Under other current liabilities, the Company records accrued expenses and VAT on advances.
in EUR
Description
31/12/2025
31/12/2024
Accrued unused annual leave
955,639
851,641
Accrued costs for employee payments and other obligations
1,137,842
277,173
VAT on advances paid
2,200
2,100
EU funds received
8,199
86,180
Other
3,859
1,656
Total
2,107,739
1,218,750
19 Contingent liabilities and commitments
in EUR
Description
31/12/2025
31/12/2024
Guarantees issued
2,063,515
2,131,657
Forward contracts*
7,328,408
3,966,896
VISA and Mastercard payment cards
60,000
60,000
Materials in processing and finishing
59,726
59,726
TOTAL
9,511,649
6,218,279
* This represents the contractual value of the transaction; fair value measurement is recognised under
financial assets and/or financial liabilities (Note E. Financial Instruments).
Guarantees issued represent liabilities to OTP banka, d. d., and UniCredit Bank, d. d., in the amount
of EUR 2,063,515, specifically arising from customs and excise duties (EUR 1,030,000) and a
guarantee for the performance of contractual obligations to the Slovenian Environment Agency (ARSO)
in the amount of EUR 1,033,515.
20 Revenue from contracts with customers
Revenue from contracts with customers comprises the sales value of products, merchandise, and
materials sold, as well as services provided during the reporting period. A breakdown of net sales
revenue by business and geographical segments is presented below.
in EUR
2025
2024
Net revenue from contracts with customers for products and services
198,285,086
199,950,152
Net revenue from contracts with customers for merchandise and materials
516,195
335,261
TOTAL
198,801,281
200,285,413
247
21 Other operating income
in EUR
Income
2025
2024
Income from amortisation of assets acquired free of charge
461,349
512,229
Gains on the sale and write-off of assets
15,876
15,038
Income from reimbursement claim
1,047,617
817,575
Recovered written-off receivables
1,982
1,983
Damages received
28,039
764,430
Compensation for indirect greenhouse gas emission costs for the previous year
305,462
297,966
Revenue from EU funds
77,981
0
Income from previous years
70,965
174,611
Other income
30,526
36,877
TOTAL
2,039,797
2,620,709
22 Operating expenses
Operating expenses
in EUR
2025
2024
Cost of materials and merchandise sold
225,635
100,483
Cost of materials
115,913,675
110,211,321
Cost of services
18,765,200
17,233,265
Labour costs
35,623,561
33,774,717
Depreciation and amortisation
13,871,225
12,900,809
Other operating expenses
3,327,431
3,250,896
Impairment and write-offs of trade receivables
67,759
0
TOTAL
187,794,486
177,471,492
Other operating expenses include the costs of forming non-current environmental provisions in the
amount of EUR 259,169 (2024: EUR 575,387), as the Company's management assessed, based on
evidence and a re-evaluation, that grounds for their additional recognition arose in 2025 (see Note
13: Other provisions).
Research and development costs in 2025 amounted to only EUR 3,356, as work on these projects was
temporarily suspended during the year (2024: EUR 112,021).
Depreciation and amortisation
The Company depreciates/amortises fixed assets on a straight-line basis over the expected useful life
of each individual asset. Depreciation/amortisation is charged against the carrying amount of each
asset.
in EUR
Description
2025
2024
Depreciation and amortisation
- intangible assets |
518,054
348,512
- easements
72,342
72,342
- buildings
3,228,927
3,197,997
- production equipment
10,050,444
9,280,386
- other equipment
1,458
1,572
TOTAL
13,871,225
12,900,809
248
Labour costs
in EUR
Labour cost item
2025
2024
Salaries and wages
25,413,363
24,918,269
Social security contributions
4,361,957
4,222,816
Reimbursements and other employee benefits
5,361,487
4,184,254
Supplementary pension insurance
486,754
449,378
Total
35,623,561
33,774,717
Labour costs include accrued liabilities to employees under the corporate collective agreement and
individual employment contracts, payments for special working condition allowances, and
reimbursements of work-related costs in accordance with the collective agreement. Work-related
reimbursements do not include meal costs in the portion relating to food preparation in the in-house
kitchen. These costs amounted to EUR 1,206,286 in 2025 (2024: EUR 1,094,701). Costs are reported
according to their nature and purpose, specifically under costs of materials and services, labour costs,
write-downs (depreciation/amortisation), and other operating expenses. The Company accrued
liabilities for unused annual leave in accordance with IAS 19. The Company is entered in the register
of pension plans as an employer financing a pension plan designated as PNMZ K, which is managed
by the open-ended "Modri krovni pokojninski sklad" managed by Modra zavarovalnica. In 2025, the
Company allocated EUR 486,754 to supplementary pension insurance (2024: EUR 449,378).
As at 31 December 2025, the Company had 726 employees. The average number of employees was
724, while the average number based on the calculation of hours worked was 685.
In 2025, the Company also incurred costs for services not treated as labour costs, amounting to EUR
1,443,512, in connection with temporary employment agencies under service mediation contracts
(2024: EUR 1,105,456). Based on the number of hours worked under these contracts, this
represented 40.8 employees (2024: 33.8).
Other operating expenses
in EUR
Other operating expenses
2025
2024
Recognition of environmental provisions
259,169
5575,819
Environmental taxes and fees
320,405
316,868
Payments to students and pupils on work placements
224,319
268,918
Land use fee
904,091
1,001,551
Revaluation (write-down) of materials and merchandise inventories
264,747
14,771
Loss on disposal (retirement) of fixed assets and impairments
976,110
692,685
Other costs and expenses
378,590
380,285
TOTAL
3,327,431
3,250,896
The audit of the financial statements of Cinkarna Celje, d. d., for 2025 was performed by the company
Ernst & Young Revizija, d. o. o. The contractual value for the agreed auditing services amounted to
EUR 32,050, plus VAT and travel expenses. In 2026, for the 2025 financial year, the auditing firm
Ernst & Young also performed an audit of the electronic format of the financial statements (2025-
ESEF; EUR 2,450), an audit of the 2025 Remuneration Report (EUR 3,600), and an audit of the
sustainability reporting for the 2025 financial year (EUR 18,090).
Other expenses mainly comprise losses on the settlement of reported damage claims and damages
paid to natural persons.
249
23 Finance income and cost
in EUR
Item
2025
2024
Net foreign exchange gains
0
253,877
Interest and investment income
1,311,450
1,726,439
Dividend income
44,466
6,011
Total finance income
1,355,916
1,986,327
Net foreign exchange losses
-139,667
0
Interest expenses
-4,653
-4,114
Interest on provisions for severance pay and long-service awards
-121,820
-119,324
Total finance costs
-266,140
-123,439
Net finance result
1,089,776
1,862,888
Finance income comprises interest received from investments and receivables, income from non-
current financial investments (dividends), and net foreign exchange gains from operations and
financing. Finance costs comprise accrued liabilities for the financial year from non-current and current
financial and operating liabilities, as well as foreign exchange losses arising from operations and
financing (currency forward contracts).
24 Corporate income tax
The calculation of corporate income tax is prepared in accordance with the Corporate Income Tax Act
at a rate of 22% of the tax base. In 2025 (similar to 2024), the tax base was reduced by tax credits
for investments in equipment, investments in research and development, employment of disabled
persons, voluntary supplementary pension insurance, and donations.
in EUR
2025
2024
Current tax
5,129,626
6,275,969
Total income tax (theoretical)
5,129,626
6,275,969
Reduction of the tax base for previously taxed provisions
-19,517
-43,189
Tax effect of increase in expenses
-21,213
-18,190
Tax effect of non-deductible expenses
436,427
451,191
Tax effect of tax credits
-1,670,929
-1,198,883
Tax effect of income reducing the tax base and other
-7,458
-27,016
Total income tax in the statement of profit or loss
3,846,936
5,439,882
Effective tax rate
16.5%
19.1%
Current tax represents the amount of tax the Company would pay at the 22% tax rate, calculated
based on the profit before tax from the statement of profit or loss, excluding tax credits and non-
deductible expenses, in accordance with the provisions of the Corporate Income Tax Act. The effective
tax rate, calculated as the ratio between tax expenses and accounting profit, was 16.5% for 2025
(19.1% in 2024). Changes in deferred taxes for 2025 relate to the additional recognition/utilisation of
environmental provisions, long-service awards, severance pay, and trade receivables.
The Company reported a decrease in deferred tax assets arising from temporary differences. The
decrease in 2025 relates to the difference between:
in EUR
Description
2025
2024
Utilisation of provisions
-205,309
-102,501
Reversal of allowances for impairment of receivables
-436
-2,516
Recognition of provisions
29,025
63,293
Total
-176,720
-36,222
250
25 Impact of climate change on the financial statements
Cinkarna Celje, d. d., discloses the effects of climate change and sustainability impacts in its financial
statements for 2025, placing particular emphasis on the discussion of management's estimates and
significant judgements in accordance with IAS 1 (IAS 1 requires the disclosure of information about
assumptions and other major sources of estimation uncertainty at the end of the reporting period that
involve a significant risk of resulting in a material adjustment to the carrying amounts of assets and
liabilities).
A global transition to net zero (Green Deal) is underway, where the processes of decarbonisation and
the electrification of the global economy are crucial to avoiding the severe consequences of a
temperature increase exceeding 1.5°C.
Asset review
As described in Note 2 – Property, plant and equipment, the cash flow projections based on the cash-
generating unit (CGU) used in the impairment tests of non-current assets are based on the best
available forward-looking information and reflect the Company's 2024–2028 investment plans to
maintain business capacity. These were prepared based on a range of economic conditions that could
exist in the near future regarding climate change and the energy transition. The projections took into
account the expected effects of electricity prices resulting from the commissioning of photovoltaics
and new renewable energy production facilities, the trend in gas, oil, and emission allowance prices,
and expected demand.
Transition risk – greenhouse gas emissions
The measures taken by Cinkarna Celje, d. d., to mitigate the impacts of transition risk include
(described in more detail in the sustainability section of the annual report):
− reduction of Scope 1 emissions (from CO
2
emission capture): The Company's innovation
capacity and technological expertise allow it to offer cleaner and more sustainable solutions to
reduce its industrial emissions. The Company focuses on technologies for climate solutions and
the energy transition;
− reduction of Scope 2 emissions, primarily through the use of electricity from renewable
sources: the installation of solar power plants will reduce Scope 2 emissions. There were no
investments in renewable energy technology in 2025 (compared to EUR 0.9 million in 2024);
however, the transition will be facilitated as the reduction in emissions will be managed using
renewable energy from the Company's own solar plants (current self-sufficiency represents
7% (2024: 6%) of total energy used; the target is 10% by 2030).
CO
2
emission allowances within the EU Emissions Trading System (EU ETS) are reflected in the balance
sheet at a carrying amount (at cost) of EUR 1 and are recognised under other non-current assets (Note
4 – Other non-current assets). Accrued liabilities for CO
2
emissions required to cover emissions to date
are also valued at EUR 1. Quotas are obtained from the state to cover own emissions and can be
retained to cover emissions in subsequent years. Allowances acquired exceed those surrendered, which
will be the case until the end of 2030. A decision was issued for the 2021–2025 period regarding the
allocation of free allowances, based on which we estimate the issuance of a new decision for the 2026–
2030 period (expected in the second half of 2026), whereby the Company should be allocated a total
free quantity of 156,043 emission allowances based on the projected annual production (see the table
below). The proportion of free allowances (quotas) is expected to decrease in the future, though not
significantly.
Status of emission allowances by year
2025
2026
2027
2028
2029
2030
Balance as at 1 Jan.
105,470
115,376
119,2023
130,701
140,628
149,054
Acquisition (current allocation)
36,788
38,137*
36,498*
34,927*
33,426*
31,989*
Surrender/Sale*
26,882
34,310
25,000*
25,000*
25,000*
25,000
Balance as at 31 Dec.
115,376
119,203
130,701
140,628
149,054
156,043
* Estimate
A new calculation will be performed for the new period from 2026 to 2030. Based on current
information and assuming unchanged production levels and heat/fuel consumption, we anticipate
251
receiving approximately 38,137 allowances for 2026 and onwards. According to currently available
data, this value will decrease by approximately 4% each year until 2030.
Assets and climate risks
The Company's primary assets impacting its CO
2
footprint are those used for its core production
activities (see Note 2: Property, plant and equipment). Assets are depreciated over their useful lives,
which limits the risk of impairment. To decarbonise existing production units, the following solutions
will be implemented in the coming years (2024–2028): the use of low-emission vehicles, battery
storage systems, and electric motors. As these assets are not yet electrified, transition investments
are required; these are defined in the Company's 2024–2028 strategy and amount to EUR 40 million.
An impairment test of the recoverable amount was conducted as at 31 December 2023, followed by
an assessment of impairment indicators as at 31 December 2025 (see Note 2: Property, plant and
equipment). This re-assessment did not result in any impairment of assets. The primary property,
plant and equipment exposed to climate change and energy transition risks include:
− internal combustion engine vehicles;
− electricity generation from the Company's own solar power plants;
− replacement of legacy lighting and existing electric motors.
In 2025, the Company acquired 7 electric vehicles valued at EUR 261,711 and 5 electric forklifts with
a total value of EUR 181,550 (in 2024, 5 electric vehicles were acquired for EUR 146,200 and 5 electric
forklifts for EUR 166,205). While battery storage systems have not yet been purchased, the
groundwork for the first phase of their installation has been prepared. In 2025, legacy lighting was
replaced with more energy-efficient alternatives to achieve electricity savings, resulting in a reduction
of 109 MWh/year. Furthermore, 28 electric motors were replaced with more efficient models, with an
estimated saving of 299.8 MWh/year.
As at 31 December 2025, the carrying amount of electric vehicles was EUR 389,344 and the carrying
amount of electric forklifts was EUR 307,922. Internal combustion engine vehicles, electric motors,
and other devices to be replaced—including all other assets—are mostly depreciated as at 31
December 2025 or will be fully depreciated and have zero carrying amount by the time of their
replacement due to the green transition. Consequently, future replacements will not impact the write-
down of carrying amounts or necessitate impairment, as assets with no remaining carrying amount
and which are at the end of their technical life will be replaced.
Therefore, production or other equipment will not be replaced solely due to climate change; rather, it
will be replaced with environmentally friendly alternatives once the asset being replaced has been fully
depreciated. As a result, there will be no short- or long-term impact on the financial statements arising
from the write-off of the carrying amounts of these assets.
Renewable energy assets – photovoltaics
As at 31 December 2025, the carrying amount of these fixed assets was EUR 4,510,049 (31 December
2024: EUR 3,944,129). The primary identified risk is the potentially negative future development of
solar resources, which are key variables for the performance of this business segment. The Company
believes that the opportunities arising from the decarbonisation of the global economy (growth in
renewable energy, investment in smart grids, electrification of transport, green hydrogen, etc.)
outweigh the risks.
Effects of climate change
In the preparation of the financial statements, particularly within the 2024–2028 five-year strategic
plan and the resulting derivation of future cash flows for impairment testing, the potential impact of
future legislative requirements was considered, especially the transition to electromobility (replacing
the current vehicle fleet with e-vehicles and the installation of charging stations powered by existing
solar power plants – the latter currently cover 7% of own energy needs, with a plan to reach 10%
self-sufficiency by 2030).
252
Exposure to climate risks
Given its geographical location, the Company is potentially exposed to physical risks associated with
climate change, such as floods (none occurred in 2024 and 2025), heatwaves, fires, and droughts. As
at 31 December 2025, the carrying amount of these assets (primarily the TiO2 programme) was EUR
61,475,578 (2024: EUR 59,541,095), which form part of the Company’s assets as disclosed in Note 2
– Property, plant and equipment. There is no requirement for asset impairment.
Due to the 2023 floods and anticipated climate change, the Company will incur higher property
insurance expenses in the future (which has already been reflected in the increase in insurance
premium costs in 2025); however, this amount will not have a material impact on the reported financial
statements.
Going concern assumption
Based on the long-term sustainability of the entity's operations, there is no uncertainty regarding the
Company's ability to continue as a going concern due to climate-related risks, as it has been
established that climate change will not materially impact cash flow forecasts for 2024–2028 (the
going concern assumption remains uncompromised).
Energy procurement contracts
Cinkarna Celje, d. d., has secured its energy supply, namely electricity and natural gas, for future
years in accordance with its energy portfolio management strategy. This involves managing a mix of
sources, such as natural gas supply contracts for future periods and hedges via forward products (up
to and including 2027), electricity purchase contracts for future periods and hedges via forward
products (up to and including 2027), a Power Purchase Agreement (PPA) (up to and including 2029),
and in-house electricity generation. The effects of energy procurement and in-house electricity
generation are accounted for in the financial statement projections within the Company's five-year
strategy.
Depreciation, amortisation, and other impairment losses
Climate-related matters are also relevant from the perspective of IAS 16 and IAS 38, as they may lead
to potential changes in the amount of depreciation and amortisation recognised in the current or future
periods. As some assets may become obsolete, inaccessible, or subject to legal restrictions due to
climate change, the estimated residual values and expected useful lives of assets could potentially be
affected. Due to the transition, there have been no changes to the estimated residual values and
expected useful lives of assets, nor to the depreciation or amortisation charged.
Business forecasts from the Company’s strategic plan for the 2024–2028 period, including the
calculated EBITDA margin and CAPEX, also incorporate the impact of energy prices, photovoltaics, and
planned energy efficiency through energy-saving equipment and energy conservation.
The potential impacts of transition risk were analysed in the context of the 2025 financial year-end
based on the aforementioned facts and assumptions. No material impact was identified regarding
useful lives, the carrying amount of assets, the customer portfolio, cash flows generated from existing
activities, or the necessity to form provisions for risks and future costs.
VI. CASH FLOW STATEMENT
The cash flow statement presents the changes in cash and cash equivalents for the financial year as
the difference between the balances as at 31 December 2025 and 31 December 2024. It is prepared
using the indirect method based on the statement of financial position as at 31 December of the
reporting year and the statement of financial position as at 31 December 2024, as well as additional
data required for the adjustment of income and expenses and for the appropriate breakdown of
significant items. Theoretically possible items are not shown; values are presented for the current and
prior periods.
VII. STATEMENT OF CHANGES IN EQUITY
253
The statement of changes in equity is presented in the form of a composite table showing changes in
all components of equity. Theoretically possible items are not shown. Changes in equity relate to the
resolution of the General Meeting on the allocation of the distributable profit from the previous year
for the payment of dividends to owners, which have been or will be paid, and to the purchase of
treasury shares. Pursuant to Point 14 of Article 64 of the Companies Act (ZGD-1), the determination
of distributable profit is appended to the statement of changes in equity.
VIII. FINANCIAL INSTRUMENTS AND FINANCIAL RISKS
Financial risks (liquidity and interest rate risk)
Liquidity risk
Cinkarna Celje, d. d., is a business partner known for its payment discipline in both domestic and
foreign markets; it is a company with no bank debt and stable cash flows. The Company's operations
are traditionally conservative with strong cash flow. Liquidity management comprises, among other
things, the planning and coverage of expected cash obligations, the ongoing monitoring of the solvency
of customers, and the regular collection of overdue receivables. The credit rating is AAA; in 2025, the
Company was once again the recipient of the Platinum Credit Excellence certificate (Dun & Bradstreet).
The tables below show financial and trade liabilities by maturity.
Maturity of trade payables as at 31 December 2025
in EUR
Carrying amount
Contractual cash flows
Total
Up to 6 months
Trade payables excluding advances
21,206,587
21,206,587
21,206,587
Other payables
37,816
37,816
37,816
Total
21,244,403
21,244,403
21,244,403
In the maturity analysis of other payables, the Company includes trade payables excluding advances
and other payables, which do not include tax liabilities, or liabilities to state institutions and employees.
Maturity of trade payables as at 31 December 2024
in EUR
Carrying amount
Contractual cash flows
Total
Up to 6 months
Trade payables excluding advances
30,982,718
30,982,718
30,982,718
Other payables
35,555
35,555
35,555
Total
31,018,273
31,018,273
31,018,273
Maturity of financial liabilities as at 31 December 2025
in EUR
Carrying amount
Contractual cash flows
Total
Up to 6 months
Assignments and cessations
60,832
60,832
60,832
Total
60,832
60,832
60,832
Maturity of financial liabilities as at 31 December 2024
in EUR
Carrying amount
Contractual cash flows
Total
Up to 6 months
Assignments and cessations
29,915
29,915
29,915
Total
29,915
29,915
29,915
254
Interest rate risk
Interest rate risk represents the possibility of losses arising from adverse market interest rate
movements. The Company has no long-term financial liabilities and therefore has no specific measures
in place in this regard. Should this situation change, appropriate measures for managing such risk
would be established.
Due to its favourable financial position, and with the aim of increasing finance income, the Company
enters into deposit agreements with banks at positive interest rates. As at the balance sheet date of
31 December 2025, deposits with a maturity of up to one year amounted to EUR 7,000,000.
Furthermore, to ensure the efficient use of surplus cash, the Company invests in short-term treasury
bills, which amounted to EUR 38,444,342 on the final day of 2025.
A 1% decrease in bank interest rates would result in a EUR 454,443 reduction in finance income on
an annual basis; conversely, a 1% increase would result in an annual increase in finance income of
EUR 454,443.
Credit risk
The primary credit risk for Cinkarna Celje, d. d., is the risk that customers fail to settle their obligations
when due.
This risk is limited, as the Company operates primarily with long-standing partners, which are often
well-known, traditional European industrial companies with high credit ratings. In recent years, it was
observed that payment discipline in Slovenia, the Balkans, and Eastern Europe was relatively poor;
however, no further issues are expected in this geographical area in the coming period, as the risk
potential has significantly decreased. With the restructuring/divestment of the Company's strategic
business segments—specifically the discontinuation of the graphic materials, rolled titanium-zinc
sheet, anti-corrosive coatings, and building materials programmes—exposure to credit risk has
significantly decreased. This is evidenced by the maturity profile of receivables and the fact that there
are virtually no additional allowances for impairment of trade receivables due to doubtful payments or
defaults.
For many years, Cinkarna Celje, d. d., has maintained internal credit control for individual customers,
assigning individual credit limits based on payment discipline, credit ratings, and past business
performance. The credit risk monitoring and management process was further enhanced in mid-2021
with the introduction of trade credit insurance through an external institution, where credit limits are
determined, monitored, and adjusted on a daily basis.
In addition to regular monitoring of individual customer credit limits, customer payment discipline is
monitored daily, along with announcements on AJPES regarding proceedings under the Financial
Operations, Insolvency Proceedings, and Compulsory Dissolution Act (ZFPPIPP). Furthermore, upon
maturity, customers are reminded of overdue receivables, first by telephone and then in writing;
default interest is charged from the due date until settlement. The process of regular monitoring and
control of the trade receivables portfolio is a permanent practice of the Company, resulting in a low
level of write-offs or impairments of receivables relative to sales. The carrying amount of financial
assets most exposed to credit risk was as follows at the reporting date:
in EUR
Notes
31/12/2025
31/12/2024
Financial assets at fair value through other comprehensive income
3
1,709,631
1,287,325
Financial assets
7
38,456,959
47,214,859
Trade receivables
8
22,966,858
27,100,674
Cash and cash equivalents
9
19,122,785
17,731,407
TOTAL
82,256,233
93,334,265
As at the reporting date of 31 December 2025, in addition to EUR 7,000,000 in fixed-term deposits,
the Company holds an additional EUR 12,122,785 in cash to support ongoing operations. To mitigate
credit risk and bank exposure, the Company maintains its funds across five banks that hold high credit
ratings and strong balance sheets.
255
The Company maintains a healthy trade receivables structure, as shown in the maturity analysis of
receivables table and the table showing movements in the allowance for impairment of current trade
receivables.
256
Movements in allowance for impairment of current trade receivables
in EUR
2025
Balance as at
31/12/2025
Allowance formed in 2025
Recoveries of written-off receivables
Balance as at
31/12/2025
Domestic customers
273,233
88
0
273,320
Foreign customers
363,720
67,510
1,982
429,247
TOTAL
636,952
67,597
1,982
702,568
in EUR
2024
Balance
as at
31/12/2023
Poprav
ek
2024
Allowance formed in
2024
Write-offs against allowances from
prior years
Recoveries of written-off
receivables
Balance
as at
31/12/2024
Domestic
customers
266,985
0
6,248
0
0
273,233
Foreign
customers
394,858
-38,470
18,766
9,452
1,983
363,720
TOTAL
661,844
-38,470
25,013
9,452
1,983
636,952
Receivables by maturity
in EUR
Receivables group by maturity
Gross value 31/12/2025
Allowance 31/12/2025
Gross value 31/12/2024
Allowance 31/12/2024
Not yet due
19,027,876
1,900
21,758,815
4,298
Past due up to 15 days |
3,232,088
323
4,776,348
919
Past due 16 to 60 days
440,092
5,077
402,918
440
Past due 61 to 180 days
202,322
96,071
30,602
30,202
Past due over 180 days
767,049
599,199
768,943
601,093
TOTAL
23,669,426
702,568
27,737,626
636,952
in EUR
Receivables group by maturity
Gross value 31/12/2024
Allowance 31/12/2024
Gross value 31/12/2023
Allowance 31/12/2023
Not yet due
21,758,815
4,298
24,024,487
16,944
Past due up to 15 days |
4,776,348
919
2,913,989
2,050
Past due 16 to 60 days
402,918
440
432,721
1,180
Past due 61 to 180 days
30,602
30,202
109,582
23,954
Past due over 180 days
768,943
601,093
618,259
617,716
TOTAL
27,737,626
636,952
28,099,038
661,843
All trade receivables have been insured with an external institution since 1 June 2021. As at 31
December 2025, 94% of receivables are insured with an external institution (Coface PKZ, d. d.)
(consistent with 94% at the end of 2024), 1% are secured by other forms of collateral (letters of
credit, advances) (compared to 3% at the end of 2024), and only 5% of all receivables are unsecured
(compared to 3% at the end of 2024). Unsecured receivables primarily relate to regular customers
who hold insured receivables but have exceeded their credit insurance limits; we assess the risk of
non-payment for these to be non-existent or immaterial. The Company monitors the concentration of
receivables using IT tools and limits entered into the system. The information system for monitoring
receivables enables real-time tracking of credit insurance, as the system is updated daily according to
changes in collateral types and credit limits. At year-end, six titanium dioxide customers from the
European Union represent a 22% share of total receivables (compared to 19% in 2024), all of which
are fully insured. Customers are diversified across various markets, ensuring there is no significant
exposure to any single customer.
Currency risk
Cinkarna Celje, d. d., operates on the global market for both procurement and sales and is therefore
exposed to the risk of adverse exchange rate movements, primarily the EUR/USD currency pair. As
the majority of sales are conducted in EUR, exposure is particularly acute regarding the purchase of
titanium-bearing raw materials denominated in USD, and occasionally regarding sulphur and copper
compounds. Exposure related to USD-denominated sales is significantly lower in volume.
257
Trends and forecasts regarding the EUR/USD currency pair are continuously monitored. Short-term
risk from adverse US dollar exchange rate fluctuations is primarily limited through the standardised
and consistent use of financial instruments (USD forward contracts). The Company achieves virtually
full coverage of relevant business transactions involving the EUR/USD pair.
Exposure to foreign exchange risk
in EUR
31/12/2025
31/12/2024
EUR*
USD
EUR*
USD
Financial assets at FVOCI
1,709,631
0
1,287,325
0
Current financial assets
38,456,959
0
47,214,859
0
Trade receivables
22,627,210
399,087
26,086,389
1,059,110
Cash and cash equivalents
19,122,785
0
17,731,407
0
Current financial liabilities
-60,832
0
-29,915
0
Current trade payables
-15,811,309
-6,337,657
-17,429,009
-14,177,564
Net balance sheet exposure
66,044,445
-5,938,571
74,861,056
-13,118,454
*EUR is the functional currency and does not represent exposure to foreign exchange risk. In addition
to the functional currency (EUR), the Company uses the USD (US Dollar), which was used in the
translation of balance sheet items as at 31 December. The rates used are the European Central Bank
reference rates; the number of units of national currency per 1 EUR as at 31 December 2025 was
1.175 and as at 31 December 2024 was 1.0389.
Sensitivity analysis
A 1% change in the value of the USD against the EUR as at 31 December 2025 and 31 December 2024
would have changed the profit before tax by the amounts shown in the table below. The analysis,
which is performed consistently for both years, assumes that all other variables, particularly interest
rates, remain unchanged. The calculation of the impact of USD exchange rate fluctuations takes into
account the balance of USD-denominated receivables and liabilities.
in EUR
31/12/2025
31/12/2024
Change in USD value
1%
-1%
1%
-1%
Impact on profit before tax
-50,041
50,041
125,002
-125,002
Each subsequent 1% change in the USD exchange rate against the EUR would result in a further
change in the profit before tax by the values stated above.
Capital management
The primary objective of capital management at Cinkarna Celje, d. d., is to ensure a high credit rating
and appropriate financing ratios, thereby ensuring the adequate development of its business and
maximising value for its shareholders.
Cinkarna Celje, d. d., aims to follow changes in the economic environment by managing and adjusting
its capital structure. Dividends are paid in accordance with the dividend policy. The Company has no
specific targets regarding employee ownership and no share option programmes. In 2024 and 2025,
there were no changes to the capital management approach. The Company uses the gearing
ratio (financial leverage) to monitor capital, which shows the ratio of net debt to equity. Net debt
includes financial and trade liabilities, less cash and cash equivalents and current financial assets
(treasury bills).
in EUR
31/12/2025
31/12/2024
Financial liabilities
60,832
29,915
Trade and other current liabilities
26,993,345
37,343,286
Cash and cash equivalents & financial assets
-57,579,744
-64,881,522
Net debt
-30,525,567
-27,508,321
Equity
216,755,086
211,036,476
Gearing ratio
-16%
-15%
258
IX. FAIR VALUE
The following table presents the carrying amounts and fair values of financial assets and financial
liabilities. The table does not include fair value disclosures for financial assets and liabilities not
measured at fair value where the carrying amount is a reasonable approximation of fair value.
in EUR
31/12/2025
31/12/2024
Carrying amount
Fair value
Carrying amount
Fair value
Financial assets at FVOCI
1,709,631
1,709,631
1,287,325
1,287,325
Current financial assets
38,456,959
38,456,959
47,214,859
47,214,859
Trade receivables
22,966,858
22,966,858
27,100,674
27,100,674
Cash and cash equivalents
19,122,785
19,122,785
17,731,407
17,731,407
Financial liabilities
-60,832
-60,832
-29,915
-29,915
Trade payables
-21,206,587
-21,206,587
-30,982,718
-30,982,718
Total
60,988,814
60,988,814
62,321,632
62,321,632
Financial assets and liabilities are classified into three levels based on the fair value hierarchy:
− Level 1: assets at market price (for the valuation method, see Note 3: Financial assets at fair
value through other comprehensive income);
− Level 2: assets not included in Level 1 whose value is determined directly or based on
comparable market data;
− Level 3: assets for which market data cannot be obtained.
in EUR
Fair Value Hierarchy
31/12/2025
31/12/2024
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets at FVOCI
0
1,709,631
0
1,709,631
0
1,287,325
0
1,287,325
Total assets measured at fair
value
0
1,709,631
0
1,709,631
0
1,287,325
0
1,287,325
Assets for which fair value is
disclosed
Current financial assets
38,456,959
0
0
38,456,959
47,150,115
0
64,744
47,214,859
Trade receivables
0
0
22,966,858
22,966,858
0
0
27,100,674
27,100,674
Cash and cash equivalents
0
0
19,122,785
19,122,785
0
0
17,731,407
17,731,407
Total assets for which fair
value is disclosed
38,456,959
0
42,089,643
80,546,602
47,150,115
0
44,896,825
92,046,940
Total
38,456,959
1,709,631
42,089,643
82,256,233
47,150,115
1,287,325
44,896,825
93,334,265
The Company holds equity investments in shares and interests of power utility companies (Elektro
Celje and Elektro Maribor), which are not listed on an active market and for which no quotes are
available. Due to the absence of observable market prices, these investments are classified under Level
2 of the fair value hierarchy. The fair value of these investments is determined using various available
economic data, depending on the availability of reliable inputs (net profit of the company, dividend
yield, ROE, and the sector P/B (price-to-book) ratio for the electric power industry).
in EUR
Fair value of liabilities
31/12/2025
31/12/2024
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial liabilities
0
0
60,832
60,832
0
0
29,915
29,915
Trade payables
0
0
21,206,587
21,206,587
0
0
30,982,718
30,982,718
Contract liabilities
0
0
0
0
0
0
0
0
Total liabilities for which fair
value is disclosed
0
0
21,267,419
21,267,419
0
0
31,012,633
31,012,633
The assumptions for determining the fair value of investments and other items are set out in the
introductory notes in Chapter III: Significant Accounting Policies.
259
X. RELATED PARTY TRANSACTIONS – DATA ON GROUPS OF PERSONS
Management Board equity participation
As at the end of 2025, one member of the Management Board held 2,360 shares of Cinkarna Celje,
d. d., representing 0.029 per cent of the Company’s total share capital and 0.029 per cent of the
voting rights. The President of the Management Board held 50 shares at the end of 2025, representing
0.001 per cent of the total share capital and voting rights. In 2025, the President of the Management
Board sold 2,350 shares. Members of the Supervisory Board held no shares as at the reporting date.
31/12 2025
Number of shares
Equity stake (%)
Aleš Skok
50
0.001
Nikolaja Podgoršek Selič
2,360
0.029
31/12 2024
Number of shares
Equity stake (%)
Aleš Skok
2,400
0.030
Nikolaja Podgoršek Selič
2,360
0.029
Gross remuneration of groups of persons
in EUR
2025
2024
Management Board members
755,824
731,700
Supervisory Board members
133,381
155,213
Total gross remuneration of groups of persons
889,205
886,913
Employees under contracts not subject to the tariff part of the collective agreement
3,745,089
2,919,788
Total gross remuneration of groups of persons and remuneration of employees
under contracts not subject to the tariff part of the collective agreement
4,634,294
3,806,701
Remuneration of the Management Board members in 2025
in EUR
Name and surname
Position (Chair,
Member))
Fixed gross
remuneration
(1)
Variable gross
remuneration –
based on
quantitative criteria
Fringe benefits
Other
remuneration
Total gross
Aleš Skok
President
300,191
73,660
5,086
4,536
383,473
Nikolaja Podgoršek Selič
Deputy President
266,013
58,692
5,208
4,536
334,449
Filip Koželnik* (until 5.11.2025)
Member
18,424
4,766
2,273
4,536
29,999
Nika Veronovski* (from
10.11.2025)
Member
3,150
0
217
4,536
7,903
Total
587,778
137,118
12,784
18,144
755,824
*The amounts represent solely the remuneration attributable to the performance of the function of a Management
Board member.
Remuneration of the Management Board members in 2024
in EUR
Name and surname
Position (Chair,
Member))
Fixed gross
remuneration
(1)
Variable gross
remuneration –
based on
quantitative criteria
Other
remuneration
Total gross
Aleš Skok
President
306,918
69,692
4,262
387,595
Nikolaja Podgoršek Selič
Deputy President
244,550
55,941
4,262
311,616
Filip Koželnik
Member
19,680
6,363
4,199
32,489
Total
571,148
131,996
12,723
731,700
260
Remuneration of the members of the Supervisory Board in 2025
in EUR
Name and surname
Function (President, Deputy, Member,
External Committee Member)
Remuneration
for performing
the function –
gross annual
(1)
Fees for
Supervisory
Board and
committee
meetings –
gross annual
(2)
Total gross
Travel
expenses
Total
remuneration
Tomaž Berločnik
SB member (20.6.2024) and Chair of the
SB (23.7.2024)
22,500
1,650
24,150
570
24,720
Melita Malgaj
SB member NS (20.6.2024), deputy Chair
of the SB, and Chair of the AC (23.7.2024)
22,125
2,970
25,095
610
25,705
Boštjan Furlan
SB member (20.6.2024), AC member
(23.7.2024)
18,750
2,695
21,445
570
22,015
Dubravka Derossi Uršič
SB member (24.12.2024)
14,073
1,650
15,723
471
16,194
Aleš Stevanovič
SB member and AC member (8.3.2023)
18,750
2,970
21,720
0
21,720
Matej Pompe
SB member (since 18.6.2025)
6,792
825
7,617
0
7,617
Gobbo Mario
Chair of the SB (from 26.05.2020 to
22.07.2024), SB member up to 23.12.2024
927
0
927
0
927
Koštomaj Jože
SB member (up to 17.06.2025)
8,208
275
8,483
0
8,483
Korošec Gregor
External member
0
6,000
6,000
0
6,000
Total
112,125
19,035
131,160
2,221
133,381
SB = Supervisory Board; AC = Audit Committee; HR = Human Resources Committee
Remuneration of the members of the Supervisory Board in 2024
in EUR
Name and surname
Function (President, Deputy, Member,
External Committee Member)
Remuneration
for performing
the function –
gross annual
(1)
Fees for
Supervisory
Board and
committee
meetings –
gross annual
(2)
Total gross
Travel
expenses
Total
remuneration
Tomaž Berločnik
SB member (20.6.2024) and Chair of the
SB (23.7.2024)
9,390
1,100
10,490
356
10,846
Melita Malgaj
SB member (20.6.2024), Deputy Chair of
the SB and AC Chair (23.7.2024)
9,255
1,540
10,795
436
11,231
Boštjan Furlan
SB member (20.6.2024), AC member
(23.7.2024)
8,049
1,540
9,589
531
10,120
Gobbo Mario
Chair of the SB (from 26.05.2020 to
22.07.2024), SB member until 23.12.2024
22,656
2,365
25,021
22,983
48,004
Gaberščik Luka
Deputy Chair of the SB (from 01.07.2020
to 04.07.2024)
10,350
1,540
11,890
277
12,167
Kastelic David
SB member + AC Chair (from 18.06.2020
to 18.06.2024)
11,401
1,925
13,326
481
13,807
Svoljšak Mitja
SB member + HR member (from
16.06.2021 to 28.02.2024)
4,634
495
5,129
0
5,129
Koštomaj Jože
SB member (from 18.06.2020) + AC
member (until 22.07.2024)
17,188
3,300
20,488
0
20,488
Stevanovič Aleš
SB member (from 8.3.2023)
16,341
3,080
19,421
0
19,421
Korošec Gregor
External member
0
4,000
4,000
0
4,000
Total
109,264
20,885
130,149
25,064
155,213
SB = Supervisory Board; AC = Audit Committee; HR = Human Resources Committee
Benefits of Supervisory Board members include benefits related to the use of a company car for private
purposes, as well as any other benefits. Reimbursements include reimbursement of commuting costs
and meal allowances during work.
6.1.7 Significant events after the reporting period
No significant events have occurred since the balance sheet date that would require adjustments to
the financial statements as at 31 December 2025.
However, it should be noted that current events in the Middle East will have direct and indirect impacts
on the costs of raw materials, energy, and transport. These developments will be reflected in higher
261
prices for input raw materials (which are directly or indirectly linked to supply chains in the Middle
East, oil refining, and energy costs), increased energy costs (primarily natural gas and, to a lesser
extent, electricity), and higher shipping and road transport costs (due to increased fuel prices, diverted
trade routes, insurance, and associated risks). Additionally, the possibility of higher inflation and its
impact on the prices of all products and services should be highlighted.
The future development of these events and their impact on business operations are contingent upon
the duration and progression of the current situation in the Middle East. The Company monitors these
developments on a daily basis and actively adapts its procurement activities and decisions accordingly.
6.1.8 Statement by members of the management and persons
responsible for drawing up the annual report
We, the above-mentioned and the undersigned members of the Management Board and the persons
responsible for the drawing up of the Annual Report pursuant to Article 134(2) of the ZTFI-1 act,
confirm that to the best of our knowledge:
I. The financial report is in accordance with the relevant financial reporting standards, i.e.
International Financial Reporting Standards. As such, it provides a true and fair view of the assets,
liabilities, profit or loss, and financial position of the Company;
II. the business report includes a fair review of the development and performance of the Company’s
business and its financial position, together with a description of the principal risks to which the
Company is exposed.
Accordingly, on 14 April 2026, the Management Board adopted and approved the Annual Report for
2025
Management Board
President of the
Management
Member of the Management
Member of the
Management
Board
Board – Deputy Chairman of
the
Board – Works Director
Management Board – Chief
Technical Officer
Aleš SKOK,
Nikolaja PODGORŠEK SELIČ
Dr Nika VERONOVSKI
MSc (Chemical Engineering),
MBA (USA)
BSc (Chemical Engineering),
Specialist
Persons responsible for drawing up the Annual Report
Head of Accounting
Head of the Sustainability Team
Karmen FUJS, MSc, BA (Economics)
Bernarda PODGORŠEK KOVAČ, MSc
BSc (Chemical Engineering)
This is a translation of the original report in Slovene language
1/5
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of CINKARNA Celje, d.d.
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
We have audited the financial statements of CINKARNA Celje, d.d. (the Company), which comprise the statement
of financial position as at 31 December 2025, the income statement, the statement of other comprehensive income,
the statement of changes in equity and the statement of cash flows for the year then ended, and the notes to the
financial statements, including material accounting policy information.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position
of the CINKARNA Celje, d.d. as at 31 December 2025 and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the EU.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISA) and Regulation (EU) No.
537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding
statutory audit of public-interest entities (“Regulation (EU) No. 537/2014 of the European Parliament and the
Council“). Our responsibilities under those rules are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are independent of the Company in accordance with the
International Ethics Standards Board of Accountants’ (IESBA) International Code of Ethics for Professional
Accountants (including International Independence Standards) (IESBA Code) together with the ethical
requirements that are relevant to our audit of the financial statements in Slovenia, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matter
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. This matter was addressed in the context of our audit of the financial
statements as a whole and in forming our opinion thereon, and we do not provide a opinion on this matter. For the
matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of the
(financial statements. The results of our audit procedures, including the procedures performed to address the
matters below, provide the basis for our audit opinion on the accompanying financial statements.
Environmental provisions
On 31 December 2025 the environmental provisions
amounted to EUR 12.746 thousand (as of 31 December
2024 EUR 14.302 thousand) as disclosed in Note 13- Other
Provisions.
The determination of the provisions is based on
management’s judgement and estimates of nature, timing
and amount of future costs to be incurred to cover long term
obligations of waste disposal and rehabilitation of waste
landfills and facilities and of legal basis for the provisions.
The judgement required to estimate such costs is further
compounded by the fact that there has been limited
rehabilitation activity or experience with such activities
against which the management could benchmark estimates
of future costs.
We obtained an understanding of the environmental
provisioning process and evaluated and tested design
of respective controls.
In relation to the recognized environmental provisions,
we evaluated the existence of legal and constructive
obligations requiring the restoration and rehabilitation
of each site and facilities.
We evaluated assessment of the required provisions
by management as of 31 December 2025, who
obtained the assessment of the required disposal and
rehabilitation activities and respective cost estimates
from the external experts in the current and in the
previous years.
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We focused on this area because changes in the
assumptions can materially affect the levels of
environmental provisions recorded in the financial
statements.
Environmental provisions are thus significant to our audit,
and we consider them a key audit matter.
In addition, we assessed the adequacy of assumptions
used, such as the expected price growth rates, the
discount rate and management's estimates of the
timing of activities in calculating the required provisions
for the environment as of 31 December 2025.
Further, to assess the appropriateness of the amount
of the provision recognized, we also evaluated the
project documentation and the studies of the technical
experts as the basis on which management made
these provisions.
For increases in the long-term provisions, we assessed
the cost estimates related to the expected future
rehabilitation activities required, which are based on
and evaluated with the help of external experts.
We considered the competence and objectivity of
management's external experts, who produced the
cost estimates.
For a sample of utilization of long-term provisions, we
tested supporting documentation for the utilization,
such as invoices received, contracts with contractors,
provisional situations, and contractors' recapitulations
of the works, and evaluated whether the utilization of
long-term provisions was justified.
We also assessed the appropriateness of the review
and approval of activities, the evaluation and the
recording of changes in the amount related to
environmental provisions by the management.
We inspected the Company’s litigation and compliance
reports in the environmental field and obtained
independent legal letters matters.
We assessed the adequacy of disclosures on
provisions included in Note 13 - Other Provisions of the
financial statements and their compliance with IFRS
EU.
Other information
Other information comprises the information included in the Annual Report other than the financial statements and
auditor’s report thereon. Management is responsible for the other information.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. In addition, we assess whether
the other information has been prepared, in all material respects, in accordance with applicable law or regulation
except for sustainability statement, in particular, whether the other information except for sustainability statement
complies with law or regulation in terms of formal requirements and procedure for preparing the other information
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in the context of materiality, i.e. whether any non-compliance with these requirements could influence judgments
made on the basis of the other information.
Based on the procedures performed, to the extent we are able to assess it, we report that:
• The other information describing the facts that are also presented in the financial statements is, in all
material respects, consistent with the financial statements; and
• The other information, except for the sustainability statement, on which we issued an assurance report
on 14 April 2026, is prepared in compliance with applicable law or regulation.
In addition, our responsibility is to report, based on the knowledge and understanding of the Company obtained in
the audit, on whether the other information contains any material misstatement. Based on the procedures we have
performed on the other information obtained, we have not identified any material misstatement.
Responsibilities of management and those in charge with governance for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with
International Financial Reporting Standards as adopted by the EU, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those in charge with governance are responsible for overseeing the Company’s financial reporting process and
to approve the annual report.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance
with ISA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with audit rules, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
• obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Company’s internal control;
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management;
• conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to continue as a going concern;
• evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
We communicate with those in charge with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
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We also provide those in charge with governance with a statement that we have complied with relevant ethical
requirements regarding independence and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those in charge with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
OTHER REQUIREMENTS ON CONTENT OF AUDITOR’S REPORT IN COMPLIANCE WITH REGULATION
(EU) No. 537/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
Appointment and Approval of Auditor
We were appointed as auditors of the Company at the general meeting of shareholders on 21 May 2025, the
president of the supervisory board has signed the audit agreement on 27 August 2025. The agreement was signed
for the period of 3 years. Total uninterrupted engagement period, including previous renewals (extension of the
period for which we were originally appointed) and reappointments for the statutory auditor, has lasted for 7 years.
Sanja Košir Nikašinović and Mateja Repušič are certified auditors, responsible for the audit in the name of Ernst &
Young d.o.o.
Consistence with Additional Report to Audit Committee
Our audit opinion on the financial statements expressed herein is consistent with the additional report to the audit
committee of the Company, which we issued on the same date as the issue date of this report.
Non-audit Services
No prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No. 537/2014 of the European
Parliament and of the Council were provided by us to the Company and we remain independent from the Company
in conducting the audit.
In addition to statutory audit services and services disclosed in the annual report and in the financial statements,
no other services which were provided by us to the Company.
AUDITOR'S REPORT ON THE COMPLIANCE OF FINANCIAL STATEMENTS IN ELECTRONIC FORMAT
WITH THE REQUIREMENTS OF DELEGATED REGULATION NO. 2019/815 ON A SINGLE ELECTRONIC
REPORTING FORMAT
We have conducted a reasonable assurance engagement about whether the audited financial statements of the
CINKARNA Celje, d.d. for the financial year ended 31 December 2024, are prepared in accordance with the
requirements of Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 as well as adjusted
Commission Delegated Regulation (EU) 2020/815 of 11 November 2020 supplementing Directive 2004/109 / EC
of the European Parliament and of the Council Annex 1 with regard to regulatory technical standards on the
specification of a single electronic reporting format applicable for 2024 (hereinafter referred to as the "Delegated
Regulation").
Responsibility of the management and those responsible for governance
Management is responsible for the preparation and accurate presentation of the audited financial statements in
electronic format in accordance with the requirements of the Delegated Regulation, and for such internal control
as the management determines is necessary to enable the preparation of the audited financial statements in
electronic format that are free from material misstatement, whether due to fraud or error.
Those in charge with governance are responsible for overseeing the preparation of audited financial statements in
electronic format in accordance with the requirements of the Delegated Regulation.
Auditor's Responsibility
Our responsibility is to perform a reasonable assurance engagement and to express a conclusion on whether the
audited financial statements have been prepared in accordance with the requirements of the Delegated Regulation.
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We conducted our reasonable assurance engagement in accordance with the revised International Standard on
Assurance Engagements 3000 (revised), Assurance Engagements other than Audits or Reviews of Historical
Financial Information (ISAE 3000), issued by the International Auditing and Assurance Standards Board. This
standard requires that we plan and perform the engagement to obtain reasonable assurance for reaching the
conclusion.
We have acted in accordance with the independence and ethical requirements of the Regulation EU no. 537/2014,
and the International Code of Ethics for Professional Accountants issued by the International Ethics Standards
Board for Accountants (including International Independence Standards) (IESBA Code), which establishes the
fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behavior. We apply International Standards on Quality Management (ISQM) 1, and accordingly, we
maintain a robust system of quality control, including policies and procedures documenting compliance with
relevant ethical and professional standards and requirements of applicable law and regulation.
Summary of Work Performed
Within the scope of work, we have performed primarily the following procedures:
• identified and assessed the risk of material non-compliance of the audited financial statements with the
requirements of the Delegated Regulation due to fraud or error;
• obtained an understanding of internal control relevant to the reasonable assurance engagement in order
to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control;
• assessed whether the audited financial statements meet the requirements of the Delegated Regulation
applicable at the reporting date;
• obtained reasonable assurance that the audited financial statements and which are included in the annual
report of the issuer are accurately presented in electronic XHTML format.
We believe that the evidence obtained is sufficient and appropriate to provide a basis for our conclusion.
Conclusion
Based on the procedures performed and the evidence obtained, in our opinion the audited financial statements of
the CINKARNA Celje, d.d. for the financial year ended 31 December 2025, which are included in the annual report,
have been prepared, in all material respects, in accordance with the requirements of the Delegated Regulation.
Ljubljana, 14 April 2026
Sanja Košir Nikašinović Mateja Repušič
Director, Certified auditor Certified auditor
Ernst & Young d.o.o.
Dunajska cesta 111, Ljubljana
1/4
THIS IS A TRANSLATION OF THE ORIGINAL REPORT IN SLOVENE LANGUAGE
Independent auditor’s limited assurance report on Sustainability Statement
To the Shareholders of CINKARNA Celje, d.d.
Limited assurance conclusion
We have conducted a limited assurance engagement on the Sustainability Statement of CINKARNA Celje, d.d.
(the “Company”) included in section Sustainability statement of the Management Report (the “Sustainability
Statement”), as at 31 December 2025 and for the period then ended.
Based on the procedures we have performed and the evidence we have obtained, nothing has come to our
attention that causes us to believe that the Sustainability Statement is not prepared, in all material respects, in
accordance with the Article 70.c and Article 7.č of the Slovenian Act on Companies (ZGD-1), which transposes to
the Slovenian legal system Article 19(a) / 29(a)
of Directive EU 2013/34/EU), including:
• compliance with the European Sustainability Reporting Standards (ESRS), including that the process
carried out by the Company to identify the information reported in the Sustainability Statement (the
“Process”) is in accordance with the description set out in the section 5.1.4.1 [IRO-1] Description of
the process to identify and assess material impacts, risks and opportunities, within the general
disclosures section [ESRS 2 IRO-1]; and
• compliance of the disclosures in the section 5.2.1 Report on environmentally sustainable economic
activities and investments – ESRS 2 within the environmental section of the Sustainability Statement
with Article 8 of EU Regulation 2020/852 (the “Taxonomy Regulation”);
• compliance with the requirements for the preparation of the Sustainability Statement in the form
specified by Article 58 of the ZGD-1 and Article 3 of the ESEF Regulation No. 2019/815 (“Delegated
Regulation”).
Basis for conclusion
We conducted our limited assurance engagement in accordance with International Standard on Assurance
Engagements (ISAE) 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical
Financial Information (ISAE 3000 (Revised)), issued by the International Auditing and Assurance Standards Board
(IAASB).
The procedures in a limited assurance engagement vary in nature and timing from, and are less in extent than for,
a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance
engagement been performed.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.
Our responsibilities under this standard are further described in the Auditor’s Responsibilities section of our report.
Our independence and quality management
We have acted in accordance with the independence requirements and ethical requirements of the International
Ethics Standards Board of Accountants’ (IESBA) International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code), which is based on fundamental principles of
integrity, objectivity, professional competence and due care, confidentiality and professional conduct.
Our firm operates in accordance with International Standards on Quality Management (ISOM) 1 and maintains a
comprehensive quality management system, including documented policies and procedures regarding compliance
with ethical requirements of professional standards and applicable legal and regulatory requirements.
Responsibilities of management and those in charge with governance for the Sustainability Statement
Management is responsible for designing and implementing a process to identify the information reported in the
2/4
Sustainability Statement in accordance with the ESRS and for disclosing this process in note [ESRS 2 IRO-1] of
the Sustainability Statement. This responsibility includes:
• understanding the context in which the Company activities and business relationships take place and
developing an understanding of its affected stakeholders;
• the identification of the actual and potential impacts (both negative and positive) related to sustainability
matters, as well as risks and opportunities that affect, or could reasonably be expected to affect, the
entity’s financial position, financial performance, cash flows, access to finance or cost of capital over the
short-, medium-, or long-term;
• the assessment of the materiality of the identified impacts, risks and opportunities related to sustainability
matters by selecting and applying appropriate thresholds; and
• making assumptions that are reasonable in the circumstances.
Management is further responsible for the preparation of the Sustainability Statement, in accordance with the the
Article 70.c and Article 7.č of the Slovenian Act on Companies, which transposes Article 19(a) / 29(a)
of Direktive
EU 2013/34/EU), including:
• compliance with the ESRS;
• preparing the disclosures in 5.2.1 Report on environmentally sustainable economic activities and
investments – ESRS 2 within the environmental section of the Sustainability Statement, in compliance
with Article 8 of EU Regulation 2020/852 (the “Taxonomy Regulation”); and
• designing, implementing and maintaining such internal controls that management determines are
necessary to enable the preparation of the Sustainability Statement that is free from material
misstatement, whether due to fraud or error; and
• the selection and application of appropriate sustainability reporting methods and making assumptions and
estimates about individual sustainability disclosures that are reasonable in the circumstances.
The management of the Company is also responsible for preparing the Sustainability Statement in accordance with
the technical requirements related to the single electronic format, as specified in Article 58 of the ZGD-1 and Article
3 of the Delegated Regulation. This responsibility includes the design, establishment, and maintenance of internal
controls that enable the preparation of the Sustainability Statement, which is not significantly non-compliant with
the requirements of Article 58 of the ZGD-1 and Article 3 of the Delegated Regulation.
Those charged with governance are responsible for overseeing the Company’s sustainability reporting process.
Inherent limitations in preparing the Sustainability Statement
The criteria, nature of the Sustainability Statement, and absence of long-standing established authoritative
guidance, standard applications and reporting practices allow for different, but acceptable, measurement
methodologies to be adopted which may result in variances between entities. The adopted measurement
methodologies may also impact the comparability of sustainability matters reported by different organizations and
from year to year within an organization as methodologies evolve.
In reporting forward-looking information in accordance with ESRS, management is required to prepare the forward-
looking information on the basis of disclosed assumptions about events that may occur in the future and possible
future actions by the Company. The actual outcome is likely to be different since anticipated events frequently do
not occur as expected.
In determining the disclosures in the Sustainability Statement, management of the Company interprets undefined
legal and other terms. Undefined legal and other terms may be interpreted differently, including the legal conformity
of their interpretation and, accordingly, are subject to uncertainties.
References to external sources or websites in the Sustainability Statement are not included in our Sustainability
Statement review processes. Therefore, we do not make any guarantees about them. Our conclusion on this matter
is not modified.
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Environmental reporting as applied by all companies includes information based on climate-related scenarios that
are subject to inherent uncertainty because of incomplete scientific and economic knowledge about the likelihood,
timing, or effect of possible future physical and transitional climate-related impacts. For the avoidance of doubt, the
scope of our engagement and our responsibilities did not include performing work necessary for any assurance on
the reliability, proper compilation, or accuracy of the prospective information.
Any supply chain emissions metrics listed in the Sustainability Statement may include information provided by
suppliers and third-party sources. Our procedures did not include obtaining assurance over the information
provided by suppliers or third parties.
The Sustainability Statement may include metrics that are derived from reported events relating to employees and
subcontractors. As such, our testing may not identify misstatements relating to completeness, for example in
instances where events may have occurred but have not been reported.
Auditor’s responsibilities
Our objectives are to plan and perform the assurance engagement to obtain limited assurance about whether the
Sustainability Statement is free from material misstatement, whether due to fraud or error, and to issue a limited
assurance report that includes our conclusion. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence decisions of users taken
on the basis of the Sustainability Statement as a whole.
As part of a limited assurance engagement in accordance with ISAE 3000 (Revised) we exercise professional
judgement and maintain professional skepticism throughout the engagement.
Our responsibilities in respect of the Sustainability Statement, in relation to the Process, include:
• Obtaining an understanding of the Process but not for the purpose of providing a conclusion on the
effectiveness of the Process, including the outcome of the Process;
• Considering whether the information identified addresses the applicable disclosure requirements of the
ESRS, and
• Designing and performing procedures to evaluate whether the Process is consistent with the Company’s
description of its Process, as disclosed in the the section 5.1.4.1 [IRO-1] Description of the
process to identify and assess material impacts, risks and opportunities, within the General disclosures
section, [ESRS 2 IRO-1].
Our other responsibilities in respect of the Sustainability Statement include:
• Obtaining an understanding of the Company’s control environment, processes and information systems
relevant to the preparation of the Sustainability Statement but not evaluating the design of particular
control activities, obtaining evidence about their implementation or testing their operating effectiveness;
• Identifying disclosures where material misstatements are likely to arise, whether due to fraud or error.
• Designing and performing procedures responsive to disclosures in the Sustainability Statement where
material misstatements are likely to arise. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• An assessment of whether the sustainability statement is prepared in all significant respects in the form
required by Article 58 of the ZGD-1 and Article 3 of the Delegated Regulation.
Summary of the work performed
A limited assurance engagement involves performing procedures to obtain evidence about the Sustainability
Statement.
The nature, timing and extent of procedures selected depend on professional judgement, including the identification
of disclosures where material misstatements are likely to arise, whether due to fraud or error, in the Sustainability
Statement.
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In conducting our limited assurance engagement, with respect to the Process, we:
• Obtained an understanding of the Process by:
o performing inquiries to understand the sources of the information used by management (e.g.,
stakeholder engagement, business plans and strategy documents); and
o reviewing the Company internal documentation of its Process; and
• Evaluated whether the evidence obtained from our procedures about the Process implemented by the
Company was consistent with the description of the Process set out the the note 5.1.4.1 [IRO-1]
Description of the process to identify and assess material impacts, risks and opportunities within the
General disclosures section [ESRS 2 IRO-1].
In conducting our limited assurance engagement, with respect to the Sustainability Statement, we:
• Obtained an understanding of the Company’s reporting processes relevant to the preparation of its
Sustainability Statement by obtaining an understanding of the Company's control environment, processes
and information systems relevant to the preparation of the sustainability statements, but not evaluating
the design of particular control activities, obtaining evidence about their implementation or testing their
operating effectiveness;
• Evaluated whether material information identified by the Process to identify the information reported in the
Sustainability Statement is included in the Sustainability Statement;
• Evaluated whether the structure and the presentation of the Sustainability Statement is in accordance with
the ESRS;
• Performed inquires of relevant personnel and analytical procedures on selected disclosures in the
Sustainability Statement;
• Performed substantive assurance procedures on selected information in the sustainability statement;
• Evaluated methods, assumptions and data for developing material estimates and forward-looking
information and how these methods were applied;
• Obtained an understanding of the process to identify EU taxonomy eligible and aligned economic
activities for turnover, CAPEX and OPEX and the corresponding disclosures in the sustainability
statement;
• Evaluated compliance processes, methods, and data for covered activities, assessed minimum
safeguards compliance through personnel inquiries, and conducted substantive and analytical procedures
on EU taxonomy aligned disclosures;
• Evaluated the presentation and use of EU taxonomy templates in accordance with relevant requirements;
• Reconciled and ensured consistency between the reported EU taxonomy economic activities and the
items reported in the primary financial statements including the disclosures provided in related notes;
• Evaluated whether the sustainability statement is prepared in the form specified by Article 58 of the ZGD-
1 and Article 3 of the Delegated Regulation.
Ljubljana, 14 April 2026
Sanja Košir Nikašinović Lidija Šinkovec
Director, Certified auditor Certified auditor
Ernst & Young d.o.o.
Dunajska cesta 111, Ljubljana
271
Appendix
AFAS Automatic fire alarm system
APM Alternative Performance Measures
ARSO Environmental agency of the RS
BAT Best Available Techniques
BI Business Intelligence
BNVT Clear neutralised effluent
BREF Best Available Techniques Reference Document
CC Cinkarna Celje
CWTP Central Wastewater Treatment Plant
CICG Cinkarna Celje (LJ Stock Exchange ticker symbol)
CLP EU Regulation on Classification, Labelling and
Packaging of chemicals
CMR Carcinogenic, Mutagenic or Reprotoxic substances
CO
2
Carbon dioxide
CRM Critical Raw Materials
CSRD Corporate Sustainability Reporting Directive
VAT Value added tax
DMA Double Materiality Assessment (ESG)
WP Workplace
EID Energy Intensity: Total energy consumption from
operations (MWh) / Net revenue (EUR)
UoM Unit of measurement
EMS Energy Management System
EN European standard
EP European Parliament
E-RIPO European Pollutant Release and Transfer Register
(E-PRTR)
ESEF European Single Electronic Format
ESG Environmental, Social and Governance
EC European Community
ESMA European Securities and Markets Authority
ESRS European Sustainability Reporting Standards
ETS Emissions Trading System
EU European Union
EU BMR Benchmark Regulation
FID Fiduciary account
NP Natural person
FURS Financial Administration of the RS
GDPR General Data Protection Regulation
GHG Greenhouse Gases
GHS Global Harmonised System (for the classification of
chemicals)
GRI Global Reporting Initiative
IED Industrial Emissions Directive
ILO International Labour Organisation
IP Intellectual Property
IPCC Intergovernmental Panel on Climate Change
IPPC Integrated Pollution Prevention and Control
IRO Impact, risk, opportunity
IMS Integrated Management System
ISO International Organization for Standardization
KC Kemija Celje
MWP Municipal Wastewater Plant
LC Local Community
LCA Lyfe Cycle Assessment
LED Light Emitting Diode
LOTO Lock Out, Tag Out (safety procedure during machine
maintenance)
LTIFR Lost Time Injury Frequency Rate
MAR Market Abuse Regulation
MB Masterbach
MNVP Ministry of Natural Resources and Spatial Planning
MOD Ministry of Defence
MOPE Ministry of the Environment, Climate and Energy
MOP Ministry of the Environment and Spatial Planning
IAS International Accounting Standards
IFRS International Financial Reporting Standards
MW Megawatt
NACE Statistical Classification of Economic Activities in the
European Community
NUTS 2 Nomenclature of Territorial Units for Statistics
OPEX Operating Expensesi
ONOB Bukovžlak Non-hazardous Waste Landfill
OR Organisational Regulation
MDSP Municipal Detailed Spatial Plan
PS Primary School
EP Environmental Permit
RES Renewable Energy Sources
BU Business Unit
PFAS Per- and polyfluoroalkyl substances
PFA – Perfluoroalkoxy
SPS Subsidiary Primary School
PTFE Polytetrafluoroethylene
REACH Registration, Evaluation, Authorisation and
Restriction of Chemicals
ROA Return on Assets
ROE Return on Equity
ROS Return on Sales
RS Republic of Slovenia
SE Solar Energy
SIST Slovenian Institute for Standardisation
SoC Substances of Concern
NE Northeast
SVHC Substances of Very High Concern
SVZO Health, Safety and Environment (HSE) Department
GHG Greenhouse Gases
TMP Trimethylolpropane
TOC Total Organic Carbon
TS Transformer station / Substation
UL FGG University of Ljubljana, Faculty of Civil and
Geodetic Engineering
USD US Dollar
UV Ultraviolet
VC Value chain
USA United States of America
ZGD Companies Act
UN United Nations
NG Natural gas
ZPIZ Pension and Disability Insurance Institute of Slovenia
ZTFI Financial Instruments Market Act
ZVOP-2 Personal Data Protection Act (version 2)
ZZPRI Protection of Whistleblowers Act