In the reporting period, at the Company, 456 persons (57,5% of the employees) participated in training. In the group, there were 199 women (83.3% of female employees) and 257 men (46.4% of male employees).

The number of training hours completed at the Company in 2019 was 12,628, which in comparison with 2018 accounts for the increase of 3 437 hours. (+37,4% y/y). 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.

In 2019, we closed the next edition of the Development Talks process, which is a form of both assessment of the employee's performance and efficiency, as well as opportunity to talk, analyse and plan further development within the organization. The Company promotes the culture of continuous feedback and provides employees with feedback on a regular basis throughout the year. In this respect Development Talks are a form of verification, summary and closure of the annual stage in the continuous process of employee development.

Employees’ participation in the Development Talks process in 2019:

• The number of employees: 764 (29% women, 71% men);
• The number of persons who had the right to be assessed: 737 (28% women, 72% men) - those who did not have such a right were persons employed for a period shorter than 3 months.
• The number of persons assessed: 685 (93% of all the employees who had the right to be assessed);
• The number of persons not assessed: 52 (7% of all the employees who had the right to be assessed);

Reasons for not assessing: absence for a period longer than 3 months.

Both the assessment and the activities included in the development plan are based on the Company’s organizational values. The entire process is standardized, and the documents that help in a uniform way to prepare for it and carry it out are as follows: The Book of Organizational Values, textbooks for the supervisor and employee, and forms corresponding to a type of position.

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 stable, which is demonstrated by a low number of employees leaving their work at the employer’s initiative.

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 2019, the amount of the payer’s contributions was PLN 8,802 thousand. In foreign Companies, belonging to the Group, 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. /li>

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 2019, 14 female employees at the Company took advantage of maternity and parental leaves after a childbirth, while 29 employees (fathers) took advantage of paternity leaves they were entitled to.

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 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 2019 the commission did not review any case related to violation of the principles of respect for human rights.

Anti-mobbing bylaws apply in all plants of the parent company, FFiL Śnieżka SA. 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:

Accidents

High standards of work safety are reflected by a low number of accidents. In 2019, eight accidents occurred in the Company, including one which did not occur at work. All of them were recognized to be accidents at work and all of them were individual and light ones.

In 2019, these accidents contributed in total to 184 days of inability to work. In order to determine permanent or long-term percentage of health detriment, documentation was submitted to ZUS regarding two accidents at work. Comparing the accident frequency ratios “Ww” and accident severity ratios “Wc” in 2018 with 2019, it should be noted that the accident frequency ratio increased insignificantly from Ww=7.76 in 2018 to Ww=8.83 in 2019. At the same time, there was a decrease in the accident severity ratio for the accidents that occurred from Wc=39.20 in 2018 to Wc=26.28 in 2019. Severe accidents, fatal accidents or occupational diseases were not recorded.

In the reporting period, one accident was reported on the way home from work. 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.

Two accidents at work were reported Poli-Farbe in Hungary. Both were classified as individual, light, which resulted in a total of 77 days of inability to work. Severe accidents, fatal accidents or occupational diseases were not recorded in the Company.

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

Rafil reported two individual accidents at work, which were classified as light and resulted in a total of 224 days of inability to work. Severe accidents, fatal accidents or occupational diseases were not recorded in the said company.

In 2019, 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.

OHS training

Training is an essential element of health and safety at work activities. In 2019, periodic training for a total number of 2 supervisors managing employees was organized and 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. 372 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 the Group’s foreign companies conduct periodic medical examinations 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 2019, the OHS and Fire Protection team of FFiL Śnieżka SA carried out a number of inspections in the Company's departments and units 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 2019, the OSH team evaluated and prepared 3 reports for the assessment of employee exposure control (Rich), and reviewed 8 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.

The volume of emissions of volatile substances into the air (including volatile organic compounds, VOC) depends on the production volume. In 2019, production at FFiL Śnieżka SA facilites was lower compared to the previous year. In the Ukrainian company there was a slight decrease in the value of the emission indicator. Whereas in the Belarusian subsidiary the indicator increased as a result of higher fuel consumption for heating production facilities and warehouses. In the Radom facility belonging to the Rafil subsidiary, a decrease in the indicator was recorded as a result of decline in the production of those products, whose production generates bigger environmental pollution (more volatile substances). 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. This rule was also applied to the Hungarian company, i.e. Poli-Farbe Vegyipari Kft - with the proviso that this company joined the Group a few months ago, in 2019, and as at the date of publication of the Group’s Report, which is composed of Poli-Farbe, the process of implementing internal reporting standards and their consistency with the standards of the Śnież Capital Group is pending.

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 2019 – 857.140 tons (i.e. a decrease compared to 2018, when the emission amounted to 896.774 tons);
• Quantity of NOx emissions in 2019 – 0.722 tons (i.e. a decrease compared to 2018, when the emission amounted to 0.754 tons);

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

The rules for the operation of the vehicle fleet used for transporting employees in FFiL Śnieżka SA are regulated by the Fleet Policy implemented in 2019. In FFIL ŚNIEŻKA SA, the vehicle fleet used for transporting employees is replaced systematically. The process is divided into timeframes from 3 to 5 years of using a given vehicle or its replacement after reaching the mileage higher than 150 thousand kilometres. Such an assumed frequency, and therefore ongoing replacements of vehicles for new ones, makes it possible to maintain the highest quality standards with regard to exhaust emissions by the vehicles in the fleet. In the reporting period, three out of four groups of vehicles (divided on the basis of the type of internal combustion engine) satisfied the high Euro 6, and in one group, Euro 4, standards. Further vehicle replacements will be directed towards a gradual introduction of vehicles satisfying the Euro 7 standard to the fleet. Also, in the group of slow-speed vehicles, most of them satisfies the high requirements of stage III A.

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

FFIL ŚNIEŻKA SA does not process waste on its own; all the waste is sent to be disposed of, processed, used, etc. by other business entities rendering waste management services. The Company, being responsible for the waste generated, has adopted a strategy of transferring it directly to development plants, without intermediaries, thus eliminating the possibility of uncontrolled and illegal emissions into the environment.

In FFiL Śnieżka SA, the hazardous waste amount indicator against the production volume in 2019 remained at the same level as in 2018.

At Poli-Farbe, the specificity of waste depends on many factors, and hazardous waste is generated both directly and indirectly. Despite large diversity of production in the company's facility in Hungary, the amount of hazardous waste against the production volume remained at the same level as year before. At the same time, the Poli-Farbe site recorded a large decline (50%) in generating waste, production losses (direct waste) - which is a satisfactory level in achieving the environmental goal.

In Śnieżka-Ukraine, the value of this indicator in 2019 was 0.0000106.g The amount of generated waste in relation to the previous year remained at the same level, which shows positive effects of the pro-ecological activity of the Ukrainian company.

In Śnieżka-BelPol, the indicator was 0.003 and also remained at the same level as in 2018. The Belarusian company also emphasizes pro-ecological activities. In 2019, 1.42 tones (8.2%) were segregated from all of the hazardous waste generated and recycled.

As regards generation of hazardous waste the Rafil’s indicator amounted to 0.0072 units, compared to 0.035 from last year. Although this is a significant decrease, it should be assumed that 2019 was a regular year of operation for the plant, and will constitute reference values for subsequent years. In 2018, the amount of generated waste was higher as a result of reprocessing expired raw materials and products.

The production processes of finished products in the Group’s plants do not translate into 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).

In the reporting period, more non-hazardous waste was generated at FFiL Śnieżka SA than in 2018. This was the result of: an increase in the number of laboratory tests carried out by R&D centre, and the replacement of brand stores' equipment, which generated an increase in production. In Śnieżka-Ukraina, the value of this indicator increased by 14.38%, and in the Belarusian company - by 33%. The increase followed by additional amount of raw material (gypsum) waste generated during transport and unloading operations.

Poli-Farbe made efforts to reduce the production of non-hazardous waste, which in 2019 decreased by 16.94% compared to 2018. It should be noted that the above increases result from greater care for the environment and proper sorting and selection from residential waste.

As regards generation of non-hazardous waste the Rafil’s indicator amounted to 0.0795 units, compared to 0.102 from last year. This decrease, similarly as for hazardous waste, is the result of one-off internal operations. It should be assumed that 2019 was a regular year of operation for the plant, and will constitute reference values for subsequent years.

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. It is possible thanks to the investments made in previous years as regards extension of raw material storage facilities with bulk raw material tanks, which enabled tanker transport and excluded transport of individual raw material units.

In 2019, the amount of recyclable packaging waste generated by the Group companies was at the same level as in 2018.

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.

As part of the above activities, the Company:

• Conducts training for employees on amendments to environmental protection law 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 their generation (e.g. increasing the Company’s prestige and creating competitive advantages). In 2019, 312 employees underwent training, representing a 31% growth over 2017.
• Carries out a continuous technological supervision of properties of raw materials used for production and supervision of properties of finished products with respect to fulfilment of the Ecolabel system’s requirements.
• Conducts compliance assessment, employee exposure monitoring and environmental impact monitoring for each product, in compliance with provisions of the REACH Regulation in the form of Inspection Records.

In 2019 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 companies comprising the Śnieżka Group 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, FFiL Śniezka SA uses the environment and pays appropriate fees. 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 2019, 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 2019 was comparable to 2018. 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 herein, the following conclusions may be drawn:

The 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 [kWh] per production unit [l,kg] in the Company’s facilities y/y was not subject to any significant changes and in relation to 2018 was the following:

• in Brzeźnica from 0.2887 to 0.2949 kWh/l,kg (increase by 2.15 %),
• in Lubzina from 0.1117 to 0.1025 kWh/l,kg (decrease by 8.24 %),
• in Pustków from 0.0401 to 0.0419 kWh/l,kg (increase by 4.49 %).

The differences in the value of this rate, occurring in individual locations, result mainly from the types of goods produced there.

In 2019, the facility in Lubzina - where colour paints are made - decreased the cost of electricity per production unit. It is the result of continuous automation of the production process and the gradual introduction of drives in paint mixers using frequency converters, as well as the modernization of the cooling system taking advantage of drycooler.

In the Pustków facility - where mainly white paints are made - the lighting in the finished products warehouse was modernized in the third quarter of 2019. This will contribute to electricity savings of 178,355 kWh per year (15.336 toe/year). In connection with the lighting modernization, consisting in replacement of discharge and fluorescent lighting with LED lighting, the Company is applying (similarly to 2018) for energy efficiency certificates, so-called white certificates at the Energy Regulatory Office.

Electricity costs incurred by FFiL Śnieżka SA including transmission services - in total for the facilities in Brzeźnica, Lubzina and Pustków - increased in 2019 from 311.4 PLN/MWh to 313.83 PLN/MWh (+ 0.77% y/y ). This minimal change was possible due to a favourable annex signed in 2018 to the electricity sales agreement.

Poli-Farbe Vegyipari Kft. is comprised of two branches in Bócsa and Pacsa, located in Hungary. Bosca site manufactures paints. Energy consumption per production unit between 2016 and 2019 remains constant at the same level. Pasca site is involved in the production of polystyrene. Thanks to the production optimization in 2019, energy consumption decreased by 5.1% per production unit compared to 2018.

Electricity consumption per production unit [kWh / l,kg] increased both in Ukraine and Belarus.

In 2019, energy consumption per production unit increased slightly due to a marginal decrease in production volume. The increase in energy consumption per production unit compared to 2018 amounted to approximately 1.9%. However, the total energy costs per production unit fell by 4.3% compared to the previous year.

In 2018, the Śnieżka Group identified significant, from the point of view of applicable policies in the Group, clauses regarding the protection of human rights and diversity, which were included in agreements with suppliers. In the same year, a decision was made to gradually implement key provisions of the Group's policies in the abovementioned areas in agreements with 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 the 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. It is scheduled to be introduced in 2020.

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.

The portfolio is one of the elements of building the competitive advantage of FFiL Śnieżka SA and the entire Śnieżka Group. 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. Consequently, they contribute to activities extending or restructuring the product offer and work on modifying products already available on the market - in order to adapt the portfolio to the consumer and the market’s requirements.

In the reported period, FFiL Śnieżka SA decided to introduce changes to its offer. As regards the changes in the Magnat brand portfolio, the following products were launched onto the market:

• A new collection of interior paints under the Magnat Creative brand. It is a stain-resistant hybrid latex interior paint, which combines two properties: resistance to liquid contaminants (hydrophobicity) and resistance to grease ( oleofobicity). Available in 56 colours in a deep matt finish.
• Intended for kitchen and bathroom applications. Magnat Creative Kitchen & Bathroom paint available in 18 ready-to-use colours.
• New paints comprising the portfolio of the Magnat Ceramic brand. Magnat Ceramic Kitchen & Bathroom ceramic paint for areas featuring high humidity was released onto the market offered in 18 ready-to-use colours.
• An anti-reflective latex paint for ceilings Magnat Non-Reflex, which thanks to the special formulation allows to make adjustments without streaks. By forming deeply matt, absorbing light reflections, the coating optically levels the painted surface.

As regards the changes in Śnieżka brand portfolio, the following products were launched onto the market:

• Scrub resistant white interior paint Śnieżka Eko Plus,.
• A new collection of interior paint available in ready-to-use colours called Śnieżka Plamoodporna (stain-resistant). This product lives up to those consumers’ needs who are looking for a high quality product featuring very good performance at a reasonable price. Stain resistant is the name of a product and at the same time its main distinguishing feature and benefit, highly appreciated by consumers. Consumers can enjoy 48 unique and fashionable colours available in matt finish.

In the period in question, the Śnieżka product offer was subject to modification by withdrawing certain products from the market.

In the reporting period, work was also carried out on development of a product offer dedicated to the main export markets where the Group companies operate. Analyses and reviews of product portfolios and competitive products were conducted. These activities are to contribute to an offer that will be tailored to the local markets’ requirements and will address the local consumers’ needs. The developed solutions will be implemented by individual companies of the Śnieżka Group from the 2020 season.

The end customer is in the centre of attention of the Śnieżka Group - their needs, preferences and expectations. We are convinced that getting to know them well is the key to success. It is important to us to comprehend the strategy of our business partners and define a common path to reach the end customer.

Therefore, the Group's activities are focused on building positive consumer experience, in particular through:

• properly designed products,
• appropriate communication and marketing tools,
• ensuring availability of the product,
• well-organized points of sales, based on the principles of merchandising.

To assess customer satisfaction and loyalty, the Company monitors:

• sales volume and value,
• image of individual brands,
• opinions of end consumers.

Customers’ opinions, both end and business, are taken into account when designing products, marketing and sales tools and process improvement.

Conducting proper communication with the consumer is one of the most important issues for each brand, and this process can be implemented using a number of tools and by various channels. The quality of marketing communication is particularly essential nowadays since it is currently the consumer who decides how and where his dialogue with the brand takes place. It is therefore crucial to provide them with a consistent shopping experience regardless of which channel or channels they interact with the products. Such an approach, fully in line with this trend, is represented by companies comprising the Śnieżka Group in their marketing activities.

FFIL ŚNIEŻKA SA

In the reporting period, the Company arranged an array of activities supporting Magnat products (premium segment) on the Polish market. In 2019, the brand ambassador became an actress, Danuta Stenka, who is liked and appreciated for her professional achievements. The new campaign of Magnat ceramic paints, performed under the slogan "This magic is Magnat", was aimed at strengthening the Company's position in the segment of ready-to-use paints and building an image of the brand creating a unique atmosphere and magic of painted interior. These activities initiated in May 2019, and the main communication channels were television and the Internet. In addition, Magnat Ceramic and Magnat Care products were placed in a popular TV program dedicated to interior renovations.

In the period in question, FFiL Śnieżka SA also supported marketing of other Magnat products. Advertising activities under the slogan "Color changes everything" - carried out in cinemas and radio, including sponsorship activities on television and communication on the Internet - supported the new paint in ready-to-use colours, Magnat Creative. In the autumn, the Company also conducted a radio campaign for ceramic paint reducing formaldehyde - Magnat Care.

Due to the fact that consumers make decisions about buying paints and varnishes primarily at points of sale, the Company makes sure that their brands are properly displayed. Modified display standards were prepared for the 2019 season, based on new shelves with LED backlight, and work related to the exchange of display arrangement was carried out in the 2019 season and will continue in 2020.

Vidaron was also supported commercially. Advertising activities, based on sponsorship and product placement in gardening TV television shows, began in April 2019. In the very same month, a radio campaign based on the new slogan "Care is a male thing" inaugurated. Thorough activities were supported by various activities conducted on the Internet. Following modification of the packaging graphics of Vidaron products, new displays and other POS materials were also arranged, which appeared in stores at the beginning of the season.

The company also supported advertising of other portfolio products, including the new paint in ready-to-use colours Śnieżka Plamoodporna (Stain-resistance), as well as the offer of the Foveo-Tech thermal insulation system brand, which was mainly targeted at contractors. In the reporting period, the Company also carried out various marketing activities on selected foreign markets.

Other companies of the Group

In 2019 Śnieżka-Ukraina and Śnieżka-BelPol subsidiaries implemented own scheduled advertising activities.

In the reported period, on the Hungarian market, Poli-Farbe carried out various marketing activities supporting the sales of its products. Between April and September, advertising campaigns of the Poli-Frabe Platinum Matt Latex emulsion in ready-to-use colours were arranged, which included communication on TV and Internet activities. Advertising activities were also carried out for products for wood protection and decoration sold under the brand - Poli-Frabe Boróka, water-borne enamel Poli-Farbe Cellkolor aqua and another internal paint in ready-to-use colours - Poli-Farbe Platinum. The sponsorship of popular TV programs was used in the communication conducted for the said products. The Hungarian company was also active in social media and blogosphere.

A radio campaign took place in Ukraine to support the sales of the Vidaron brand, product placement of Śnieżka in themed television programs and various types of promotions on the Internet. In addition, Śnieżka-Ukraina continued the partnership program, and as part of its activities, further stores were embraced by the Śnieżka brand store network.

Activities supporting the Vidaron brand were carried out on the Belarusian market in June and July 2019. Billboards and led screens in the Minsk underground and the radio were used for communication.

Less intense advertising activities and with the use of various tools were also carried out on other export markets.

In its marketing activities, the Śnieżka Group strives to ensure that the marketing messages conveyed are in line with the highest market and ethical standards. No case of violation of the Advertising Code of Ethics occurred in 2019 in marketing activities conducted by FFIL ŚNIEŻKA SA.

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 Śnieżka Group.