The Supervisory Board Supports Management's Decision to Reorganize Lek Cosmetics Unit as a Subsidiary

11. 10. 2001

Ljubljana, 11 October 2001 – Lek’s Board of Management, with the approval of the Supervisory Board, adopted all the necessary measures to complete the reorganisation of the Cosmetics business segment, Lek Kozmetika d.o.o. (Lek Kozmetika). This decision by the Management Board finalises the unit’s spin off, the groundwork for which began last year. Lek Kozmetika remains an integral part of Lek d.d. through the end of this year, after which it becomes part of the Lek Group.

The newly founded company will, till further notice, conduct its business from the current address: Ljubljana, Verovškova 57. It will begin independent operation on 1 January 2002.  Lek d.d., as the only owner, will assist its new subsidiary to ensure its stable inauguration as a separate entity. An integral part of the reorganisation process is a three-year business plan outlining the basic strategic objectives for the new subsidiary as prepared by the new program’s director Cvetana Rijavec.

Lek Kozmetika as an independent company will be more flexible in operating its own business and in a better position to eventually develop possible new strategic partnerships. At the same time, it will increase its responsibility for business performance.

The decision to form an independent company is proof of Management’s firm commitment to follow its strategic orientation to further strengthen pharmaceuticals as Lek’s core business. Other programs will be supported in so far as they contribute to this strategic vision. Above all, management is firmly dedicated to increasing shareholder value.

As Metod Dragonja, the president of the Management Board of Lek, emphasised: “I believe we have successfully matched and harmonised the interests of our employees and shareholders. We have created excellent conditions for the launch and successful start of our new daughter company, which will continue to market such well-known brand names as Amaiâ, Green Lineâ, Viterginâ, and Biodentâ among others.

Lek believes that the cosmetics production spin off will repeat the success of Hotel Lek spin off, completed in July 2000, and that Lek Kozmetika will achieve its strategic goals.”