Lek's Tenth Annual General Meeting

18. 6. 1998

Lek’s tenth Annual General Meeting took place in Cankarjev Dom on the afternoon of 18th June 1998. There were around 140 shareholders and their proxies present at the meeting, representing more than three-quarters of the share capital.

Lek shareholders made decisions concerning amendments to Lek’s Articles of Association and distribution of profits, adopted a report on Lek’s business performance in 1997, and elected new members of the Supervisory Board.

Important on the agenda of yesterday’s meeting was considering changes to the Articles of Association. The amendments proposed were presented by Igor Kušar, Member of the Board of Management, and referred to three groups of amendments to the Articles. The first and most important group consisted of the articles that cover the dematerialisation of A and B Class shares. Under the proposal the shares of both classes would be dematerialised, thus losing their current hard copy form, and their records would be entered at the K.D.D. (Clearing Deposit Company) and which would make the shares more liquid. The shareholders adopted the joint proposal of the company and Triglav, National Financial Company and the Slovene Restitution Fund, thereby approving the dematerialisation of both shares. This proposal was approved by shareholders of both classes of shares.

The second group of proposed amendments to the Articles concerned a reduction in the number of members of the Supervisory Board from the present 14 to 10. The present Supervisory Board, in conjunction with the Board of Management, considered that this would improve the work of this body. This group of amendments was approved by the shareholders.

The third group of amendments concerned provisions relating to obligatory reporting of shareholders regarding ownership title of the shares. The aforementioned group of proposed amendments was not adopted.

The shareholders endorsed the report on the business performance of Lek d.d. in 1997, which was submitted by Dr. Andro Ocvirk, President of the Board of Management. In his report, he stressed that last year was a successful one for Lek. Net profit in 1997 amounted to SIT 3.7 billion and was 21% higher than in 1996. Net profit per share last year amounted to SIT 1,914, whereas it stood at SIT 1,491 for the previous year. All the other key financial indicators for last year were also higher than for 1996.

Furthermore, Dr. Andro Ocvirk emphasized in his report that last year Lek obtained registration of the drug acyclovir in the U.S.A. even before patent expiry, and concluded key investments for the pharmaceutical chemicals acyclovir, clavulanic acid and vancomycin, and the finished amoksiklav products ( and cephalosporin ) injections. Lek invested around 12% of its sales income in R&D, and for investment it allocated 13%. A key advantage for Lek, according to Dr. Andro Ocvirk, is the company’s diversification as it already sells its products and know-how practically all over the world.

In the continuation of their meeting the shareholders adopted the proposed distribution of profits, so the net profit for the business year 1997 to the sum of SIT 3.7 billion will be allocated for undistributed profit, and the undistributed share of the profit from previous years amounting to SIT 1.3 billion will be allocated for dividends and profit participation. This year’s dividend will amount to SIT 660 for A, B and C Class shares and an additional SIT 180 for the preference B-class shares.

Lek’s auditors KPMG Slovenija were re-appointed and this was confirmed yesterday by the shareholders.

As the mandate of most members of the Lek Supervisory Board expires on 26th July this year, shareholders elected new members. These are Marjan Kandus, Stane Pejovnik and Zvone Taljat, who will represent the capital side in the Supervisory Board. A shareholder proposal to withdraw the mandate of two members of the Supervisory Board, Peter Filipič and Vinko Apšner, was not adopted.