Sustainable development areas

While conducting an assessment of the impact of individual subsidiaries on the Group (based on their production and sales volume, as well as the number of shares held in them), the Management Board decided to describe the non-financial aspects of their operations according to the criterion of significance.

Non-financial efficiency indicators

The report on non-financial data of the Śnieżka Group was prepared based on the of three key companies: Fabryka Farb i Lakierów Śnieżka SA, Śnieżka-Ukraina Sp. z o.o., Śnieżka-BelPol Wspólna Sp. z o.o.

Subsidiaries - Belarusian and Ukrainian - were described according to analogically selected indicators as in the case of FFiL Śnieżka SA, taking into account the realities of their markets and the availability of data required by the local law.

PEOPLE

Employee issues

Operating in dynamically changing realities of the labour market, maintaining the rapid pace of organizational changes and going through the process of business transformation, the Śnieżka Group puts great emphasis on the efficiency of processes related to human resource management. Thanks to it, the current and constantly developed human and intellectual capital remains one of the most important elements of building competitive advantages. Strategic directions defined in the Personnel Policy of the Śnieżka Group are focused on increasing the Group's ability to acquire, maintain and effectively implement employees to the organization, identify talents, develop and purposely address employee development needs, and quickly diagnose and remove organizational barriers that affect motivation, and thus the employees’ efficiency.

We have improved the recruitment and selection process by introducing standard work (i.e. a set of process tools resulting from the process instructions, tool standards used depending on the type of process, competency profiles, etc.), thanks to which we were able to reduce recruitment risks and maximize the accuracy of selections. We have included non-standard forms of acquiring, building and maintaining relationships with potential candidates. We have measured various stages of the process and implemented tools for efficient monitoring. We have introduced a satisfaction survey on the recruitment and selection process, both for candidates who were offered a job and for those who were not taken on. Owing to this feedback, we were able to optimize our activities in order to build a positive Candidate Experience.

We have redefined the employment, onboarding and adaptation process. We have implemented facilitations that allowed managers to plan new positions earlier, making recruitments more cyclical and repetitive. We have established the framework for creating implementation and adaptation plans, thanks to which both the manager and the new employee are aware of what elements affect the assessment and decision to continue cooperation. We have established a “buddy” function, i.e. a colleague, who helps a new employee to enter the organization efficiently, and for the buddy, it is the opportunity to develop new competences. We have also introduced a number of standardizations in this process, bearing in mind the nature of particular areas. Continuous optimization of this process is possible due to the feedback we collect from all of its participants.

In 2018, we also painstakingly dealt with defining the responsibilities of individual departments and positions. The outcome of this was to prepare standardized job descriptions, which served as a basis for conducting another process, affecting changes in the payroll policy and introducing a new bonus system, inter alia. We have gone through evaluation of job positions, we have updated wage category for individual positions and payment schemes, and developed a new remuneration system.

Also, a lot of effort was put into the continuation of work related to building the employer’s brand. Based on the concept of creating a strong Śnieżka’s image as an employer, developed in 2017 within the Company, we have translated the Employer Branding strategy into concrete actions. By engaging our employees - brand ambassadors - we have prepared a campaign, the effects of which were not only presented in social media, but also during direct meetings with students and graduates, including job fairs. The main element of the campaign was the Company’s presentation through the profiles of five employees whose work, attitude and commitment are valuable to the Company. The representatives of the Company selected on this basis were appointed brand ambassadors. Each of them represents one of the areas of the Company's operations (Finished Product Warehouse, Production Department, Research and Development Department, IT Department and Communication Marketing).

The conceptual work on the EB campaign was preceded by an external study of Śnieżka's perception as an employer in May 2018, which was carried out by the research house. The survey was conducted locally, within a radius of several dozen kilometres from the Company’s registered seat. The group of respondents was divided into specialists and manual workers. Not only did the research findings allow to get to know Śnieka's brand perception as an employer, but also became a substantive basis for building the message of the Employer Branding campaign. Together with the campaign a new website was launched: www.kariera.sniezka.pl and new brand channels on Facebook, LinkedIn and Twitter.

At the same time, the activities on the EB campaign were for us an impulse for developing a broad concept of cooperation with schools and universities, defining potential forms of such cooperation and outlining the initial work schedule. Our goal for 2019 is to implement the activities within this area.

In HR activities we also bore in mind all the time about development of our employees. We have conducted several development projects dedicated to selected areas of the organization, as well as we have provided our team with permanent access to a wide range of development activities based on the blended learning concept. Being convinced that the development of competences is the most effective by gaining experience in practice, we continued work on the implementation of project management methodologies in the organization and we engaged employees to participate in projects. We have also conducted a series of workshops in this field. Based on the developed assumptions and principles of work with the projects, in 2018 we implemented several pilot projects according to the adopted methodology. We have established functions related to the management of the project portfolio and the projects themselves. Further development in this area is our goal for the next year.

Core information an employment

In the reporting period up to 31 December 2018 the headcount in the Śnieżk Group increased to 1,112 (as at 31 December 2017 the Group employed 1,000 persons). The headcount in FFIL ŚNIEŻKA SA increased from 731 persons as at 31 December 2017 to 773 persons as at 31 December 2018.

The increase in the number of employees in the Group resulted mainly from the acquisition of Radomska Fabryka Farb i Lakierów SA and the increase in employment in FFiL Śnieżka SA.

In 2018, the Śnieżka Group hired on a yearly average, in full-time equivalents, 1,114 persons, i.e. by 9.4% more than in the corresponding period of 2017, when the headcount amounted to 1,018 persons.

Women-mezczyzni

The dominating part of the Group's employees (60.7%) was aged 30-50. 65% of employed women and 59.2% of employed men belonged to this age group.

The share of women employed in the Group as well as men under 30 was similar to that of employees over 50 years of age. For women, these shares were respectively 21.3% (under 30 years) and 13.7% (over 50 years), and for men 19.2% (under 30 years) and 21.6% (over 50 years).

Men, as the employees of the Śnieżka Group, outnumbered women - as at 31 December 2018, 821 men were employed, who accounted for 73.8% of the total number of employees (which results, inter alia, from the productive nature of the Group's operations, which involves a high percentage of workers' positions in relation to the total number of positions). The share of men in the employment structure of the Group decreased during the year by 1.9%.

Table 18.

Total number of employees broken down by gender (with the Management Board)

The majority of the Group's employees held employment contracts for an indefinite period - 64.2% as at 31 December 2018 (including 60.5% of employed women and 65.5% of employed men). Employees with employment contracts for a definite period were mainly employed in companies with production facilities.

Women-mezczyzni2

Table 19.

The Śnieżka Group’s employees broken down by employment contract

Table 20.

Breakdown of the Śnieżka Group’s employees by positions (as at 31.12.2018)

Table 21.

Total number of the Śnieżka Group’s employees broken down by positions

Table 22.

Composition of management bodies and human resources of the Śnieżka Group

Indicators associated with development and assessment

In the reporting period, at the Company, 430 persons (56% of the employees) participated in training. In the group, there were 206 women (93.6% of female employees) and 224 men (40.5% of male employees).

The number of training hours completed at the Company in 2018 was 9,191, which in comparison with 2017 accounts for the increase of 260 hours. This trend directly indicates and confirms the direction of the human resources management strategies implementation. The company consistently focuses on developing knowledge and competence of its employees, by spurring and enabling them to participate in training, but also providing opportunities and facilitating access to the best sources of theoretical and practical expert and managerial knowledge.

Table 23.

Data about the value and cost of training at FFIL ŚNIEŻKA SA

Table 24.

Training performed in subsidiaries of the Śnieżka Group (as at 31 December 2018)

In 2018, we closed the next edition of the Development Talks process, which is a form of both assessment of the employee's work and efficiency, as well as opportunity to talk, analyse and plan further development in the organization. By promoting a culture of continuous feedback and providing employees with feedback on a regular basis throughout the year, Development Talks are a form of verification, summary and closure of the annual stage in the continuous process of employee development.

Participation in the Development Talks process in 2018:

  • The number of employees assessed: 747 (25% women, 75% men);
  • The number of persons who had the right to be assessed: 727 (25% women, 75% men) - those who did not have such a right were persons employed for a period shorter than 3 months.
  • The number of persons assessed: 629 (87% of all the employees who had the right to be assessed);
  • The number of persons not assessed: 98 (13% of all the employees who had the right to be assessed).

Both the assessment and the activities included in the development plan are based on organizational values.

The process is standardized - the Book of Organizational Values, textbooks for the supervisor and employee, and forms corresponding to a type of position - are documents that help in a uniform way to prepare and conduct the process.

Table 25.

The number of assessed employees broken down by gender

Table 26.

The number of assessed employees broken down by categories of positions

Other employee indicators

In the Śnieżka Group, we approach each case of terminating an employment contract individually, carefully analysing each case and suggesting solutions oriented to the employee’s interest. In the Group, employment is observed to be stable, which is shown by a low number of employees leaving their work at the employer’s initiative.

Table 27.

Share of terminations at the employer’s initiative in the total number of terminations at the Śnieżka Group

In the case of Rafil, dismissals at the employer’s initiative were carried out as part of the collective redundancy procedure. The reason for the decision to reduce employment was first of all the need to restructure Rafil due to the current, excessive level of employment, inadequate to the production status and needs of the employer. The liquidation of production-related positions has translated into the simultaneous need to reduce employment in other organizational units of the company. The reduction was necessary to restore the proper functioning of the company and regain profitability.

In the Group, no additional pension plan for employees has been established. The Company pays pension and disability benefit contributions to the Social Insurance Institution (ZUS) on the compensation of all its employees. In 2018, the amount of the payer’s contributions was PLN 7,449,47 thousand. In foreign Companies, contributions were paid as required by the local law.

At the Company, rules of equal treatment of employees are in force with regard to the access to any benefits, including non-salary benefits. At the Company, all the employees have the opportunity to take advantage of additional benefits for which the employer participates in their costs. These benefits are granted regardless of the contract type or working time.

Non-salary benefits:

  • benefits within the Company Social Benefit Fund,
  • additional life insurance,
  • co-financed meals.

Employees of the Śnieżka Group are free to take advantage of the parental rights they are entitled to concerning, among others, maternity, parental and paternity leaves.

In 2018, 13 female employees at the Company took advantage of maternity and parental leaves after a childbirth, while 27 employees who are fathers took advantage of paternity leaves they were entitled to.

Table 28.

Use of maternity /paternity leaves in the Śnieżka Group companies

Fundamental principles of ethical behaviour are defined by the Book of Organizational Values adopted by the Parent Company in 2016. This document distinguishes seven major rules of conduct, with each of them being assigned specific attitudes that are expected from employees of the Company. The introduction of the Book was accompanied by intensive communication and education about the principles found in it.

At the Company, mechanisms have been also prepared to counteract workplace bullying and harassment. The appointment of a special body known as the Anti-Harassment Commission and introduction of the rules and regulations to prevent workplace bullying and harassment provides the employees with the full protection of their interests in this area. The Commission, composed of seven members appointed for a three-year term of office, is a body whose aim is to eliminate at the Parent Company such behaviours as:

  • workplace bullying – actions or behaviours pertaining to an employee or directed against an employee, involving persistent and continuing persecution or intimidation of the employee, resulting in lowering his/her evaluation of professional adequacy, causing or intending to cause the employee to be humiliated or ridiculed, isolating him/her or eliminating him/her from a team of colleagues;
  • harassment – undesirable behaviour whose aim or consequence is to undermine an employee’s dignity and create an intimidating, hostile, humiliating or insulting atmosphere around him/her, including any undesirable behaviour of sexual nature or relating to the employee’s gender whose aim or consequence is to undermine the employee’s dignity, and in particular to create an intimidating, hostile, humiliating or insulting atmosphere around him/her; the behaviour may involve physical, verbal or non-verbal elements;

If a possible abuse occurs, the commission’s task is to initiate an explanatory proceeding. In 2018 the commission did not review any case related to violation of the principles of respect for human rights.

In all the plants of the Parent Company, anti-harassment rules and regulations are in force. The fundamental rule for reporting breaches falling outside the area of the work of the Anti-Harassment Commission is to contact one’s direct supervisor. If in doubt, team members may also report their concerns through, among others, employee representatives or stationary contact boxes located on the Company's premises.

All the employees of FFIL ŚNIEŻKA SA are represented by elected Employee Representatives. It is a team of three people appointed for a 4-year term of office. The scope of their activity covers representation of employees’ interests and opinions before the Management Board and all the aspects of work, including also those connected with Occupational Safety and Health. In the reporting period, at the Company, no trade unions operated.

Employees of the Company (including to some extent the Employee Representatives) participate also in the work of commissions appointed in the Company:

Occupational Safety and Health Commission
its aim is to perform inspections of working conditions, periodical assessments of the condition of occupational safety and health, to present opinions on measures introduced by the employer to prevent accidents at work and occupational diseases, to submit requests to improve working conditions and to cooperate with the employer on carrying out its duties in the field of occupational safety and health.

Company Examination Commission
conducts examinations for 100% of employees on non-managerial positions

Fire and Technical Commission
its members are the Company’s engineering and technical service employees, who inspect, in the framework of inspection activities, the area, facilities and systems used by the Company, and, with relevant reports, define protection and prevention measures that must be taken in order to remove detected threats to life and health as well as those concerning fire security and evacuation of employees.

Company Anti-Harassment Commission
the scope of its tasks has been discussed in the chapter on human rights.

Social Commission
it manages every year the cash from the Company Social Benefit Fund and determines the rules for spending it to adjust it to the employees’ needs; the commission is authorized to issue opinions and advice about assessment of personal and financial situation of persons having the right to receive the benefits from the Fund and applies for granting these benefits

Waste Collection Locations Inspection Commission
acting within the Integrated Quality and Environment Management System, the commission inspects, once a year, the locations where waste is collected. The result of a performed inspection is a Report on Waste Locations Inspection, which includes recommendations decided to be implemented during the inspection.

Waste Storage and Units and Systems Inspection Commission
acting within the Integrated Quality and Environment Management System, the commission inspects, once a year, the Waste Storage as well as the Units and Systems. The result of a performed inspection is a Report on Waste Storage Inspection and a Report on the Inspection of Units and Systems, which include recommendations decided to be implemented during the inspection.

An additional element supporting the activities of the above-mentioned Commission is the Environmental Report prepared by Fabryka Farb i Lakierów Śnieżka SA once a year, after its completion, providing a comprehensive image of the Company's operations in all aspects of exploiting the environment.

High standards of work safety are reflected by a low number of accidents. In 2017, in the Company six accidents occurred, including one on the road. All of them were recognized to be accidents at work and all of them were individual and light accidents.

These accidents caused in total, in 2018, 235 days of inability to work, while as the compensation for the accidents ZUS did not pay any amounts. Comparing the accident frequency ratios “Ww” and accident severity ratios “Wc” in 2017 with 2018, it should be noted that the accident frequency ratio increased insignificantly from Ww=6.71 in 2017 to Ww=7.76 in 2018; at the same time, there was a decrease in the accident severity ratio for the accidents that occurred in 2018, namely from Wc=61.00 in 2017 to Wc=39.20 in 2018. Severe accidents, fatal accidents or occupational diseases were not recorded.

Neither were there any accidents on the way from home to work and from work back home. In all accidents, an accident investigation was carried out, appropriate documentation was drawn up for these accidents and the circumstances and causes of these events were established. In each of the accidents occurred, the President of FFiL Śnieżka SA issued a written recommendation to eliminate permanently the accident causes and prevent similar ones in the future.

In the subsidiaries in Ukraine and Belarus in the reporting period no accidents at work and occupational diseases were recorded.

Rafil reported one individual accident at work, which was classified as light and resulted in a total of 89 days of inability to work. Severe accidents, fatal accidents or occupational diseases were not recorded in the said company.

The Company constantly conducts activities in the field of occupational risk assessment. In 2018, they were carried out, among others, in relation to positions in the newly opened Marketing Communications Department. The assessment concerned four job positions created in this department - the total number of employees on these positions is 17.

In 2018, six post-accident risk analyses were carried out, referring strictly to the root causes of accidents, determined during the post-accident investigation. Records of corrective and preventive actions were included in the current occupational risk assessment in individual departments or cells.

Training is an essential element of health and safety at work activities. In 2018, periodic training for a total number of 13 supervisors managing employees was conducted. At the same time, during the year, periodic training in the area of occupational health and safety and fire issues was organized and conducted for five training groups. 231 employees, holding manual and administrative positions, participated in the training

The training was conducted on the basis of periodic training programs developed at the Company and covered the following issues:

  • legal regulations concerning occupational health and safety, including provisions related to the work performed;
  • threat factors occurring in the work processes as well as principles and methods of elimination or limiting the impact of these factors on employees, taking into account changes in technology, work organization and work positions, application of collective and individual protection measures, introduction of new equipment, machinery and tools;
  • progress related to risk assessment factors occurring in the work processes and to the scope of protection methods preventing threats to health and life of employees;
  • issues related to the arrangement of office workstations, taking into account the principles of ergonomics, including those equipped with screen monitors and other office equipment;
  • circumstances and causes of accidents at specific work places and their prevention;
  • rules of conduct in the event of an accident at work, fire, explosion or release of a chemical agent into the natural environment. Rules for conduct in emergency situations such as fire, explosion or serious industrial accident.

As part of the health protection of employees, the Polish companies of the Group, in accordance with the dates set by the doctors of the Occupational Medicine Clinic, carry out systematic supervision of employees’ health by means of initial, periodic and control preventive medical check-ups. These examinations are carried out during working hours at the expense of the employer, i.e. at the same time the employee retains the right to remuneration.

Also in foreign companies, periodic medical examinations are carried out, based on local national law. Having valid medical examinations is necessary for an employee to be allowed to perform tasks on the assigned position.

All employees of the Group have access to appropriate and safe equipment and machinery, and are supplied with personal protective equipment either on an individual basis or permanent availability of these means.

In 2018, the OHS and Fire Protection team of FFiL Śnieżka SA carried out a number of inspections in the Company's departments and cells and drew conclusions regarding the necessary improvement of observed irregularities. Thematic inspections were also carried out and the required opinions were drawn up in this respect. In 2018, the OSH team evaluated and prepared 10 reports for the assessment of employee exposure control (Rich), and reviewed 139 Technology Instructions on work safety related to the manufacturing process of the products made.

The aim of these activities was to improve work safety at production positions and general fire safety in the Company.

ENVIRONMENT

Natural environment

As an entity operating in the chemical industry, we are aware that for our operations to be environmentally friendly, it is necessary to take the utmost care for being responsible at each stage of the product’s lifecycle – from its design, through production, to launching on the market. The largest portion of our production is concentrated in the structures of FFIL ŚNIEŻKA SA, and it is ascribed the leading role in making efforts to achieve the highest environmental standards with the simultaneous implementation of the relevant new solutions in the subsidiaries.

The environmental objectives in the Company are addressed in accordance with the applicable legal requirements as well as the procedures and instructions. Environmental protection management covers processes related to the Parent Company's operations in the area of purchases, production, storage, sales and analyses them in relation to the impact on the natural environment. Monitoring and measurement data are analysed for the following purposes, among others:

  • to support and assess operational oversight in areas connected with significant environmental aspects;
  • to assess effects of environmental activity;
  • to assess compliance with legal and other requirements;
  • to track progress in the observing obligations of the environmental policy;
  • to assess the operation of the environmental management system.

Working on the adopted assumptions and bearing in mind the continuous technological supervision over the properties of raw materials and finished products with a view to ensuring their compliance with the requirements which must be satisfied to receive the “Ecolabel” for its products, the Company endeavours to reduce its impact on the natural environment. The environmental requirements are achieved by way of continuous formal and legal oversight and implementation of the obligations specified in environmental decisions.

The Company’s strategic objectives regarding environmental protection included:

  • protecting natural resources by adhering to and implementing environmental requirements;
  • fostering proper attitudes and awareness among the employees through appropriate management of hazardous and non-hazardous waste, packaging;
  • reduction of VOC emissions into the air;
  • protection of water and soil.

The schedule of Company’s environmental objectives means indicating specific time frames to perform particular environmental tasks, defined each year in the investment plan, with regard to the three basic principles:

  • continued compliance with environmental protection laws;
  • preventing pollution;
  • continuous improvement.

To ensure that the strategic objective is achieved, environmental objectives are defined for each year with specific environmental tasks, whose performance is recorded by the Investment Department.

Due to the records kept, it is possible to assess the environmental impact for specific aspects of the activity – both these defined as significant as well as other ones, for which the duty to monitor them follows from legal and other requirements.

Key environmental aspects

The following environmental aspects of the Company’s activity are classified as significant:





The quantity of volatile compounds emitted into the air depends on the production volume, which in 2018 was lower y/y at the Company. In the Ukrainian subsidiary, there was an insignificant increase in the value of this indicator. Whereas in the Belarusian subsidiary the indicator increased as a result of higher fuel consumption for heating production facilities and warehouses.

The Group’s plants emit, directly and indirectly, greenhouse gases to the environment. The major sources of direct emissions (CO2, N2O) are as follows:

  • production of heat for heating buildings and producing central tap water for them. The production involves fuel combustion in heating furnaces and causes emissions of CO2 and small amounts of CH4 and N2O;
  • personal transport (cars).

The Group’s plants, by using electricity from the grid, also contribute to indirect emissions of greenhouse gases generated during the electricity production.
FFiL Śnieżka SA:

  • Quantity of CO2 emissions in 2018 – 896.774 tons (i.e. a decrease compared to 2017, when the emission amounted to 925.334 tons);
  • Quantity of nitrate oxide emissions in 2018 – 0.754 tons (i.e. a decrease compared to 2017, when the emission amounted to 0.783 tones).

As shown by the above graph, the amount of pollutant emission load is directly proportional to gas consumption.

Table 29.

Introduction of gases or dust into air from combustion of fuels in internal combustion engines in FFIL ŚNIEŻKA SA

Wastes generated by the Group companies are segregated according to the waste type and code in compliance with the Polish laws in force.

The Company does not process waste on its own; all the waste is sent to be disposed of, processed, used, etc. by other business entities providing waste management services.





In the Company, the volume ratio for hazardous waste compared to production volume in 2018 increased in relation to 2017 as a result of generating a larger amount of hazardous waste, particularly defective goods and products resulting from their non-compliance.

In Śnieżka Ukraina, the level of the ratio in 2018 was 0.0000097, which was lower by 25% as compared to the previous year; this was connected with, which indicates the pro-ecological activity of this company.

In the Belarusian company, the level of the ratio was 0.0021, and increased by 4.9% compared to 2017. It should be emphasised that in this company, 4.83 tones were segregated from all of the hazardous waste generated and recycled, which is an example of taking pro-ecological activities.

The production processes of finished products in the Group’s plants do not cause any direct generation of hazardous waste Waste generated indirectly arises as a result of work accompanying production (e.g. cleaning equipment, production line of technological apparatus, defective and incompatible goods and products).



The Company generated less non-hazardous waste than in 2017, which was the result of a planned production work. In Śnieżka Ukraina, the volume ratio in 2017-2018 remained at a similar level, with an increase by 11%. In 2018 in the Belarusian company the ratio increased by 309% compared to 2017, as utilization of raw materials identified as substandard was performed.



The Group companies take actions to increase the amount of raw materials directed for recycling through the binding rule of waste segregation and selecting packaging from it according to the type of material. An example of positive pro-ecological effects in the above area is still the generation of large amounts of packaging waste that can be processed in the Company. Their production, although less than in 2017, is a result of the implementing innovative investment solutions in the scope of expanding the storage facilities of raw materials with bulk raw materials, which streamlined cistern transport, and excluded the transport of individual units of raw materials.





The graph presents introduction of types of packaging to the domestic market as packaging of our own commodities and products introduced into trading as compared to the production volume.

FFIL ŚNIEŻKA SA participates in development and maintenance of a system for the collection, transport, recovery and disposal of waste generated from packaging introduced into the environment and participates in conducting relevant educational campaigns. The process is performed in accordance with the statutory requirements. The Company manages packaging in a rational way. The effectiveness of the implemented waste selective segregation system is shown by the increase in the quantity of segregated waste. The continuous duty to segregate waste makes it possible to achieve effects in ecological terms as well as measureable financial effects.

  • Employee training on amendments to environmental protection laws and in the area of the Company’s use of the environment, the present environmental aspects, environmental policy, threats and environmental disasters, prevention of bad habits and raising awareness of the economic and environmental impact of generating waste and pollution, as well as the benefits of minimizing that generation increases the Company’s prestige and creates competitive advantages. Employee training was conducted on raising awareness on the Company’s use of the environment, the present environmental aspects, environmental policy, threats and environmental disasters, prevention of bad habits and raising awareness of the economic and environmental impact of generating waste, as well as the benefits of minimizing that generation. In 2018, 237 underwent training, representing a 19% growth over 2017.
  • There is a continuous technological supervision of properties of raw materials used for production and supervision of properties of finished products with respect to fulfillment of the requirements of the Ecolabel system. For each finished product, the following procedures are conducted: Compliance Assessment, Employee Exposure Monitoring and Environmental Impact Monitoring, in compliance with provisions of the REACH Regulation in the form of Inspection Records.

In 2018 any organizational and production operations were performed in compliance with the assumptions of the Investment Plan, while the achievement of objectives and tasks was characterized by caring for the natural environment. That care, observable in all the aspects of the Company’s activity, produced measurable effects in the field of environmental protection. This is confirmed by, among others, such figures as the numerical quantity of emissions into the air, amount of generated waste or wastewater carried into the ground.

Furthermore, monitoring environmental issues occurring in the Company allows to define and introduce the appropriate methods of conduct in the production processes of the Company’s plants.

The Group’s companies hold the necessary environmental decisions, pay their environmental fees, fulfilling their reporting obligations, in compliance with the laws of the countries where they are located.

In connection with performing production activity, the Parent Company uses the environment and pays charges for using it. These costs may be divided into two basic groups:

  • costs of direct use of the environment, which include: fees for emissions of compounds into the air, for the production of paints and varnishes, burning gas in boilers, burning fuels in internal combustion engines, carrying off rainwater from the area of a plant and the adjacent parking areas;
  • costs of indirect use of the environment, which include: fees for carrying out the recovery and recycling duties connected with the introduction of packaging with products on the Polish market, including the payment for organizing the collection system for packaging of hazardous products and the educational campaign and fee for waste disposal and neutralization.

In 2018, FFIL ŚNIEŻKA SA did not pay any financial penalties of increased fees for using the environment. Neither did the Company commit any incompliance in this area, which confirms its great care for the natural environment and administrative responsibility. In the reporting period, the Group did not suffer, either, any sanctions, financial or non-financial, for breaching environmental protection laws or regulations.

The Śnieżka Group incurs costs for environmental usage. The level of financial burden in 2018 was comparable to 2017. The entire financial burden is a fee for releasing gases and dust into the air.

The Water Law exempted the Company from paying a fee for discharging rainwater to the ground.





In the reporting period, the Group’s activity towards the environment was not complained about because of adverse impact on the natural resources, which shows that Śnieżka’s production operations are perceived as positive by the society.

From the data about the environmental activity of FFiL Śnieżka SA included in this document, the following conclusions may be drawn:

Company:

  • holds necessary decisions on environmental usage;
  • pays environmental usage fees and complies with the reporting duties;
  • the results of control measurements of the emission of air pollutants and effluents demonstrate compliance with the environmental norms and the requirements;
  • waste management complies with the permits held and limits given therein and brings the planned economic effects.




Electricity consumption per production unit in the Company’s plants y/y was not subject to any significant changes. Differences occurring in particular plants resulted from the following, among others:

  • Brzeźnica: : in connection with commissioning of the skywalk between A and B buildings and high temperatures during the summer season the demand for the use of air conditioning increased due to the increased number of office spaces - the increase in energy costs per production unit. The volume of energy consumption and total costs decreased in relation to 2017 due to the decrease in production volume. Partially, the lighting at the Warehouse of Finished Goods was also modernized with LED lighting, which resulted in an annual energy saving of 41.304 MWh.
  • Lubzina: The contracted capacity was increased, which resulted in an increase in fixed costs for energy, due to the launch of a new transformer station and an increase in production capacity by installing two additional 200 kW and 130 kW dissolvers. The average price of energy decreased due to the low purchase price. Energy consumption per production unit increased due to the requirements of production technology.
  • Pustków: energy consumption and share in production costs remained at a similar level as in 2017, while the average price of energy and energy costs per production unit decreased due to the lower purchase price of energy in relation to 2017.

In subsidiaries in Ukraine and Belarus the energy consumption per production unit in 2017-2018 remained at a similar level.

The compliance of the Company’s activity with environmental requirements is shown by: efficient consumption of raw materials and energy; compliance with the regulatory norms for emissions of pollutants into the air, water and soil; rational management of waste and packaging; and the application of solutions that improve the operational safety of technological installations. New investment projects are based on state-of-the-art technologies. Also, technological solutions have been constantly sought to make it possible to improve further the environmental parameters in various aspects of the activity.

An example of such an action in 2018 is the installation of a filtration unit for cleaning air from dry dust released during technological processes involving non-combustible materials with a relative air humidity not exceeding 80%.

By using a modern filter construction featuring very high efficiency of air purification at the level of 99.98% for particles above 0.5 μm allowed to reconcile the aspects of simultaneous meeting a high level of requirements:

  • for the work environment of new and existing workplaces,
  • elimination of negative impact on the natural environment with simultaneous increase of production capacity.

The records kept on an on-going basis in the log of the filtration unit allow to monitor the device's performance and assessment of the emission levels to the natural environment.

The device used with a very high efficiency of air purification allows it to be recirculated into the interior of the facility without deterioration of working conditions. Air filtration products - contaminants considered as waste are collected in containers and fully utilized, processed, used, etc. by other waste management units. The Group conducts on-going monitoring of their environmental impact, by maintaining registers of information and data on the scope and intensity of their use of the environment. The Group monitors consumption of energy and water, emissions of pollutants, generation of waste and packaging.

Water used in the Company’s plants comes from the network, therefore the Company does not use sources of water that could adversely affect the region’s water resources. The Company does not recycle water for re-use.

The Group does not have any plants located in protected areas or in areas valuable in terms of biodiversity. Thus, the plants and the products do not pose any threats to such areas. The Group does not distribute or use in the production process any substances depleting the ozone layer.

QUALITY

The value chain

The awareness of responsibility for quality, impact on the environment, knowledge of and compliance with the applicable provisions of the legal requirements, procedures, instructions and appropriate documents, all contribute to the Śnieżka Group’s “culture of quality”. This style of management is a response to the continuously growing market needs and customer expectations.

The processes relevant for the value chain generated by the Group have been identified at the Company level. They have a direct impact on implementation of strategic goals and are subject to an on-going monitoring. Their identification, and then indication of units responsible for the performance of specific tasks make it possible to precisely determine which divisions play the most significant role in the Group’s value chain. The most important role is played by striving for the highest quality of processes, derived from striving for the highest quality of manufactured products.

The diagram presents also the areas (assigned to the specific divisions) which play a key role in the establishment of the Group’s value chain and the links between these areas.

Scope of the processes:

  • core processes: Marketing and definition of the customer expectations, Design work, Procurement, Production, Sales;
  • management processes associated with improvement;
  • supporting processes which include resources understood as human resources, infrastructure, and work environment.

The first step of the product quality assurance process is to understand the customer expectations and the market requirements identified through research (MARKETING). The technological (DESIGN WORK) and manufacturing (PRODUCTION) processes that follow are carried out using state-of-the-art formulas and technical solutions and based on the following assumptions:

  • use of quality components (PROCUREMENT);
  • strict control of processes at each stage;
  • detailed tests of the final product;
  • monitoring of the scope of use of the environmental resources and high occupational safety and health standards.

A product designed as presented above is launched on the market where it is further monitored to establish the customer satisfaction (internal and external research). The market assessment is the basis for improvement of the products already sold and an inspiration for searching for new solutions.

Suppliers (sources of supply)


As part of its operations, the Śnieżka Group takes advantages of a variety of raw materials and technical materials, such as titanium white, solvents, pigments, fillers, and resins. The Group uses many sources of supply, cooperating with both Polish and foreign entities. The Group purchases strategic raw materials from suppliers with significant production capacities - while maintaining the optimal level of diversification.

The Group has signed purchase agreements with all key suppliers. At the same time, it is constantly looking for new domestic and foreign suppliers in order to optimize sources of supply, reduce costs and shorten delivery times. In each case, the Group conducts detailed analysis of offers to ensure the best possible conditions for the purchase of raw materials, technical materials or equipment.

In the opinion of the Company’s Management Board, current supply agreements do not contribute to dependence on any suppliers in any manner that could adversely affect the operations of the entire Group.

In 2018, efforts were made to include clauses on the protection of human rights and diversity in agreements with suppliers. This area was identified as important from the point of view of the applicable policies at the Śnieżka Group and a decision was made to gradually implement key clauses for suppliers.

In view of the above, in 2018 the document “Terms and conditions of cooperation with suppliers based on the policies of the Śnieżka Group" was implemented. The main assumption of the document, implemented as an integral part of agreement with regular suppliers, is to increase control over the supply chain, preserve transparency and build long-lasting relationships with suppliers. It also allows multidimensional assessment of new cooperating entities and implementation of complaints procedures.

Within the confines of the above mentioned document, in 2018 key suppliers of the Śnieżka Group were communicated the Group's policies regarding:

  • Quality, Environmental and Health and Safety Policy of the Śnieżka Group;
  • Personnel Policy of the Śnieżka Group;
  • Diversity Policy of the Śnieżka Group;
  • Respect for Human Rights Policy of the Śnieżka Group;
  • Anti-Corruption Policy of the Śnieżka Group;
  • Social Involvement Policy of the Śnieżka Group;

Regular suppliers of the Group, by signing a document showing the abovementioned policies, declared undertaking ethical business activities. The cooperation terms and conditions are binding for all Suppliers irrespective of the type of activity, the area of business or cultural differences.

In addition, a purchase policy is being developed in the Purchasing Department based on the Company’s values. The completion of works and implementation is scheduled in 2019.

It should be noted that the transparency of market activities, also in terms of purchases, is for the Śnieżka Group a determinant of good cooperation with various entities, in accordance with the organizational values defined in the Company. Particular importance is given here to the values of "Cooperation, respect and trust", which is the basis of all business relationships.

Our products


Our product is a measure of our activity. It is the product that expresses creativity and pursuit of the highest quality as well as coherence with customers’ expectations. We devote our time and resources exactly to develop new product solutions and improving the existing ones, while creating our brands and expanding their portfolio.

The manufacturing of products is based on the recipe developed in the Research and Development Department and designed in the course of a complex process. A finished product is a mixture of many raw materials, each of which fulfills its important functions. At a product designing stage, raw materials are selected in such a way that the final product should fulfil the assumed functional parameters, complied with legal requirements and ultimately brought satisfaction to the customer. At the testing stage, the designed mixture of raw materials undergoes laboratory and application testing, after which, if it satisfies all the requirements, it is transferred to the large scale, or proper production. If it is necessary to make changes to the raw materials in a product, the product is subject to a process similar to that performed at the stage of its designing. The replaced raw material is assessed with respect to formal and legal compliance, and then it is verified whether the material is compatible with the existing recipe and its properties are tested. At the final stage, products are assessed in terms of their quality by numerous tests in compliance with the standards.

As far as the product’s compliance with legal requirements is concerned, attention is paid mainly to the end user’s comfort and safety. Products are manufactured in compliance with provisions of the Polish and European Union laws. This concerns both construction law and the external regulations: REACH and CRP. Each product also has a material safety data sheet, technical card and may also have additional certificates (required or voluntary).

The above regulations define provisions of the procedures: Procedure for Implementing New/Modified Products, Procedure for Managing Production Process, Procedure of Product Monitoring, Procedure for Handling Non-compliance.

The product offering is one of the elements of building a competitive advantage of the Group and the Company. Market observation, on-going analysis of sales results and the situation in the paints and varnishes sector are one of the most important processes carried out in individual Group companies. Based on them, activities to expand or change the product offering are conducted. For the season of 2018 a lot of changes were prepared, which concerned the products of the Magnat brand. Magnat Ceramic products appeared on the market in a modified graphic design, which allows more efficient presentation of product features important for the consumer. Following the consumer research, a decision was also made to rebrand the paint reducing formaldehyde - “Magnat Sypialnia Pokój Dziecka” (Magnat Bedroom Child's Room), which was included in the line of ceramic paints under the new name - Magnat Ceramic Care. The modifications also affected the colour range of this product.

“Magnat Grunt” (Magnat Primer), introduced into the Magnat brand in 2018, supplements the offering of products for wall applications. The formula of this product stabilizes the painted substrate, increasing the efficiency and durability of both interior ceramic and latex paints.

During the period in question, Ultra Mat paint, previously comprising the Magnat brand, was launched onto the market featuring a new graphic layout and a modified recipe. The new packaging graphic layout, consistent with the other products of the brand, makes it easy for the customer to identify the most important product features displayed on the front of the packaging. In addition, the product's properties make Magnat Ultra Matt a paint dedicated to both professionals and individuals, who take advantage of the paint for their own needs. The leading company is working intensively on extending the portfolio. At the end of 2018, a new product appeared in the Magnat brand offering - a latex emulsion paint for walls - Creative White. The product’s features such as no streaks, high efficiency and anti-reflective coating, make it efficient when painting large surfaces. Also, the paint can meet the professional expectations. Last year, the Foveo Tech brand’s portfolio was also impacted by changes. A new product was released and a new colour palette was introduced, which perfectly corresponds to the current trends, among which the popularity of colourful and creative building facades need to be mentioned. The new offering introduced last year allows to obtain 318 colours in seven colour zones.

Colour durability, efficient coating protection against biological hazards, easy application and high vapour permeability - these are just some of the features of the new silicate-silicone facade paint Foveo Tech FSS 20. Those who chose Foveo Tech solutions last year were also able to take advantage of the changed colours of mosaic plasters. The novelty comprising the Foveo Tech offering were microfine aggregates and a new additive refining plasters in the form of mica flakes. These solutions allow to provide facades with subtle reflections, visible under appropriate lighting conditions.

In parallel with development of new products, the leading company also conducted work on the existing offering, introducing necessary modifications to the recipes and colour range of individual brands.

Individual subsidiaries also work on development of the product portfolio. Significant changes affected the offering of Śnieżka-Ukraina. A new line of wall paints was launched under the name Platinium, which is the flagship collection under the Śnieżka brand. The Śnieżka Platinium portfolio is comprised of 6 products: latex wall paints Śnieżka Platinium Modern and Śnieżka Platinium Classic, specialist paint dedicated to kitchens and bathrooms: Śnieżka Platinium Kitchen-Bath, the paint for children’s rooms: Śnieżka Platinium Kids, acrylic ceiling paint: Śnieżka Platinium Ceiling and blackboard paint: Śnieżka Platinium Magic. The wew products were launched in the second half of 2018.

Our objective is to provide consumers with products and services which fully satisfy their needs. Therefore, by way of developing product solutions, it is of key importance to us to answer the following questions:

  • Are the offered products consistent with customers’ expectations?
  • Are customers satisfied with the offered products?

To assess customer satisfaction and loyalty, the Parent Company monitors:

  • sales volume;
  • market shares;
  • opinions of final consumers.

To measure satisfaction of final consumers, the Parent company uses the Net Promoter Score (NPS). The advantage of the score is its simplicity and lack of complicated procedure for surveying customers. It involves asking consumers the question: “How probable it is that you will recommend the Śnieżka brand to your friends, acquaintances or family?” The surveyed assess their readiness to recommend the brand using a 10-degree scale. The results are grouped in three categories: brand critics, indifferent ones and brand promoters. Customers asked about their readiness to recommend the brand, they will consider all their experiences associated with the brand, or product quality, service evaluation, product costs and other customer experience. For comparative purposes, we monitor the NPS score also for our major competitors. Based on methodological assumptions behind the NPS score, the Company conducts a quantitative survey of final consumers twice a year (spring wave and autumn wave). The number of the surveyed persons corresponds to a representative sample of adult Poles. The level of the NPS score is verified for the most important brands and product categories. The NPS level in the 2018 autumn survey for the MAGNAT brand was 59 points and it achieved the highest score compared to other paint brands.

We operate in accordance with a defined marketing strategy that allows us to implement key business objectives of the Group and Company. Our priority is to focus on consumers in order to provide them with maximum satisfaction of products they purchase, and at the same time to provide the company with the expected results.

In the reporting period, we conducted a number of communication activities supporting sales targets. The TV campaign for the Magnat brand and the "Cash within reach" lottery, as well as digital campaigns are just some forms of support for our products. At the end of the year, we ran a billboard campaign for Magnat Ceramic Care. In large cities, where inhabitants are particularly exposed to air pollution, billboards with air-purifying paint from formaldehyde - Magnat Ceramic Care, appeared.

In spring and summer, we also conducted activities for Vidaron brand products. Their main element was the “Win peace of mind for years” lottery, broadcasted on the radio and communicated at points of sale and on the Internet.

To a lesser extent, we supported other products of the Company's portfolio, including the the Foveo Tech brand thermal insulation system, in the case of which the advertising efforts were mainly addressed to professionals.

In the reporting period, the Company also carried out various marketing activities on selected foreign markets. Including subsidiaries: Śnieżka-Ukraina and Śnieżka-BelPol implemented own advertising activities. A bilboard campaign for a new product line took place in Ukraine: Śnieżka Platinium and various types of activities on the Internet that support other Śnieka, Vidaron and Foveo Tech products. The subsidiary - Śnieżka-Ukraina, continued implementation of the partner program, and as part of the activities carried out, other stores were incorporated into the Śnieka chain of stores and showrooms.

On the Belarusian market, Śnieżka-BelPol ran support activities for the Śnieżka and Vidaron brands. In order to support the sales of products of the latter brand, a consumer lottery was also organized, which was communicated on the radio, billboards, as well as via POSM materials.

A clear, original, unambiguous and attractive brand image for the buyers is extremely important to succeed on the market, therefore throughout the year the brands are supported by various actions and activities on the Internet, social media and with the help of influencer marketing. A great emphasis is put on data analysis and KPI performance. The efficiency of marketing activities is checked in two ways. We conduct regular research on brand indicators, image research and competition analysis.

We strive to ensure that marketing messages conveyed by us are in line with the highest market and ethical standards. No case of violation of the Advertising Code of Ethics occurred in 2018 in our marketing activities.

Safety of our customers' personal data is extremely critical to us. We do pay attention so that the data remains always safe and confidential. In the reporting period, no complaints regarding violation of customer privacy or loss of customer data were addressed to the Group companies. Thanks to the applicable procedures at our company, our customers can be certain that their data is completely safe.

Research and development activities

The Research and Development Centre (R&D), owned by FFiL Śnieżka SA, is a facility combining the Group's research departments. The Research and Development Centre is comprised of research Laboratory accredited by PCA (no. AB 855). The R&D’s tasks involve supervision over production processes in the Group's plants.

The Research and Development Centre liaises closely with subsidiaries, within the scope of:

  • control of raw materials,
  • preparing and optimizing product recipes,
  • creating innovative product solutions and carrying out tests on them,
  • quality control of existing products.

The R&D also monitors the raw materials market and emerging new solutions in the area of paints and varnishes design and production, and then uses them in the process of creating new, innovative products and in optimizing the procedures of products already comprising the Group's portfolio. Constant changes in European legislation and the need to comply with them forced the Group to implement necessary changes in certain products.

In 2018, the Research and Development Centre’s team worked on launching new products onto the market and improving the existing ones. The outcome of their work is as follows:

  • a new colour range of paints and plasters for exterior application offered under the Foveo Tech brand. In order to meet the customers’ expectations and the latest colour trends, the R&D specialists - in cooperation with designers of the Academy of Fine Arts in Krakow - designed a new colour collection containing 318 colours;
  • mosaic plaster featuring fine granulation and silicate-silicone facade paint FSS-20 of the Foveo Tech brand;
  • Sniezka Extra Facade white / base A-BU available in the NCS Cascade colouring system for the company Śnieżka-BelPol Wspólna Sp. z o.o .;
  • a series of Śnieżka Platinium Śnieżka Modern paints available in the NCS colouring system, Śnieżka Platinium KIDS, Platinium Classic and Śnieżka Platinium Kitchen and Bathroom available in NCS CASCADE collection, as well as Śnieżka Platinium Ceiling, Śnieżka Platinium Magic for Śnieżka-Ukraina.

In addition, in 2018, the Research and Development Centre’s team was actively involved in the mutual exchange of knowledge and learning about products comprising the portfolio of Radomska Fabryka Farb i Lakierów SA. The company mainly produces specialized products dedicated to metal protection, including products for industrial customers. The exchange of know-how provides new opportunities for the Group to develop synergistic solutions. At the same time, the need to unify processes and procedures has become a challenge.

The course of works for the R&D specialists in 2018 determined the implementations scheduled for 2019.

All the goods produced by the Group are subject to assessment in terms of their impact on the users’ health and classified by the Product Documentation Team.

Apart from meeting the requirements for compulsory certification, the Group also takes effort to acquire additional voluntary certificates.

The Ecolabel sign is a European award granted to environmentally friendly products meeting high quality and health standards.

The grounds for the award is Regulation (EC) no. 66/2010 of the European Parliament and of the Council of 25 November 2009 on the EU Ecolabel

Product sign, which includes VOC emission class in accordance with the French Decree no. 2011-321 of 23 March 2011 relating to the labelling of construction products with their volatile pollutant emissions.

Certificate issued by the British BBA certification body for a complex thermal insulation system. BBA certification is recognized in the construction industry as a symbol of quality and safety, which ensures the product’s suitability for the intended application.

PN Certificate issued by the Polish Standardization Committee (PKN). The label is a quality and safety guarantee and confirms that the product was certified by the PKN.

European Technical Assessment for a complex thermal insulation system – or documented assessment of functional properties of a construction product with regard to its principal characteristics, in accordance with the relevant European assessment document

A document confirming the highest functional parameters of products making up the FOVEO TECH S insulation system is European Technical Assessment ETA 15/0022.

The document is in force in the territories of all the European Union states and confirms that the products making up the system are characterized by the highest functional parameters, including impact resistance, fire resistance, vapour permeability and resistance to varying thermal and humidity cycles.

The European Technical Assessment is the most important document confirming quality and durability in the area of construction materials in Europe.

National Technical Assessment – is a documented positive assessment of functional properties, or these basic features of a construction product which, in accordance with the intended use, have an impact on the satisfaction of the essential requirements by construction facilities in which the product will be used.

Compliance Certificate for products that are subject to mandatory certification in the territory of the Republic of Moldova

Compliance Certificate for products that are subject to mandatory certification in the territory of Belarus confirms quality of products in compliance with prevailing normative acts of law.

GOST R Declaration of Conformity is an official document that confirms the compliance of product safety and its safety with the requirements set out in the provisions of Russian law.

Safety of toys
Products marked with the symbol "safety of toys" meet the requirements of PN-EN 71-2 standards regarding flammability and PN-EN 71-3 and migration of certain elements.

Benefit confirms that the product can be used successfully for painting toys.

Confirmation of care with regard to transparency of information placed on packaging is the absence of any important breaches in that field and on-going monitoring of the relevant signage in view of the changing provisions of law in that area. In the reporting period, one case of incompliance with regulations or voluntary codes was found concerning the impact of products on safety and health. Two cases of incompliance concerning information and correct labelling of products were recorded. In both cases, the adjustment of measures was applied immediately after identification of inaccuracies and did not involve any financial penalties. The packaging of our products includes information on: their composition, safe use of the product and the method of disposal. The packaging does not include information on the origin of the product components.

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