Sustainability Report 2010 Lek d.d.

Active Environmental Policy 48 Environmental Policy and Target Achievement 4.1 Policy Our concern for the environment, targeted minimization of the environmental impact of our activities, and adherence to the environmental policy are our key guidelines forming the basis of our social responsibility. Our environmental impacts are being constantly reduced through regular assessment of system performance, open communication with internal and external publics, and through every employee’s participation in our environmental management efforts. The progress is monitored annually for individual sites and for the company as a whole. Data for reporting requirements are collected and confirmed in the Novartis DMS system. At the end of the previous 5-year period, we set ourselves the following HSE objectives for the next 5-year period: • Improving water use efficiency by 10% compared with the year 2010, • Improving energy efficiency by 10% over 2010, • Reducing VOC emissions into the air (h-VOC and nh- VOC) by 20% over the 2010 figures, • Reducing waste volumes by 10% over 2010, and • Reducing the LTIR to 0.1 by 2015. 4.2 HSE target achievement in 2010 For the period up to 2010, Lek set itself the following HSE targets: • Improving water use efficiency by 10% compared with the year 2005, • Improving energy efficiency, • Reducing VOC emissions into the air to 240 t, • Reducing waste volumes, • Reducing the LTIR to 1 in 2010. The objectives set were fully or partly met. This was largely due to positive changes in the employee culture and aware- ness that every individual can contribute to better working conditions and reduced environmental impact. As the objec- tives are set for each individual site separately and for Lek as a whole, site management teams actively participate in all the environmental projects and support their implementation. Major achievements of 2010 include the acquisition of Inte- grated Pollution Prevention and Control (IPPC) permits for the Menge‰ and Lendava sites, which was the result of team effort and support from all respective departments. Improving water use efficiency Water use efficiency per unit of product is improving on a year-by-year basis, which is confirmed by the trend present- ed in Graph 6. In absolute terms, water use increased by 3.7% over the year 2009. Nevertheless, the savings made, and the changes in the manufacture structure and volume resulted in a decline from 1,115 to 604 m 3 /t of product. The tentative objective of a 10% improvement in water use efficiency set for the year 2010 was not only achieved but even exceeded. Improving energy efficiency 63 We achieved the objective set due to the upward trend of energy efficiency resulting from systematic implementation of measures aimed at reducing the use of natural resources. Compared to 2009, the use of energy per unit produced fell from 363 GJ/t to 197 GJ/t. The main factors were the in- crease in production profitability and the measures aimed at improving energy efficiency at the Lendava site. Reducing VOC emissions into the air Despite a downward trend of VOC emissions into the air recorded in the period between 2005 and 2010, the 2010 objective of 240 t of emissions was not met. In 2010, VOC emissions amounted to 257.9 t, a 14% decline over the year 2009. Reducing waste volumes Due to business process optimization and improvements, a slightly downward trend of waste management efficiency, measured as the amount of waste per tonne of product, has been observed over the past 5 years. Given the increasing production volumes of high added-value products (e.g. bio- logical medicines), in which higher volumes of waste result from lower production outputs, the annual efficiency indica- tor fails to provide a truthful picture, however. Our waste management goals were not fully met, the reason being the increasing production outputs (at the Lendava site, production output rose by 82% in the period 2005 – 2010) and larger quantities of out-of-date and expired products (in- cluding past inventories). Reducing the number of accidents resulting in sickness absence (measured as the Lost Time Incident Rate LTIR/ 200,000 worked hours). We perform systematic monitoring and implementation of objectives set to reduce the number of accidents resulting in sickness absence. This is achieved by means of preventa- tive solutions regardless of the risk level in the company as a whole, while additional measures were implemented for higher-risk units. Maintaining the positive trends established continues to be the company’s long-term goal. 4.3 Objectives for 2011 Objectives for the year 2011: • Reducing VOC emissions into the air: <210t • Improving water use efficiency (m 3 /USD of sales) by 2% • Reducing energy use by 1.6% • Reducing waste volumes by 5% (t/t of production output) • Maintaining the LTIR at 0.18 The Lek Sustainability Report 2011 will be published in mid- 2012. 63 EMAS Core Indicator