Sustainability Report 2012 Lek d.d.

17 Company Profile 14 Disclosure GRI 3.1, 3.3, 3.7, 3.8 and GRI 3.10–3.11 15 Disclosures GRI 2.6 and 3.6 16 Disclosure GRI 2.9 17 Disclosures GRI 3.9–3.11 18 Disclosures GRI 4.1 and 4.4–4.7 1.5.1 Governance and management 18 The Board of Management of Lek d.d. worked with the following members: Vojmir Urlep, President of the Board of Management Zvonko Bogdanovski, Member of the Board of Management, Commercial Operations Ksenija Butenko âerne, Member of the Board of Manage- ment, Legal Affairs Daniel Karrer, Member of the Board of Management, Finance (until 30 September 2012) Ale‰ Rokavec, Member of the Board of Management, Technical Operations (since 1 August 2012) Samo Ro‰, Human Resources Bojan Dolenc, Member of the Board of Management, Workers’ Director Supervisory Board: Peter Goldschmidt, Chairman Jeffrey George, Deputy Chairman Peter Rupprecht, Member (until 1 October 2012) Cesare Frontini, Member Knut Mager, Member (since 2 October 2012) Peter Svete, Member, Workers’ Representative (since 1 October 2012) Aleksander Koren, Member, Workers’ Representative Uro‰ Urleb, Member, Workers’ Representative (until 1 October 2012) Lek d.d. is a company with a two-tier board system. The mana- gement function is performed by the company’s Board of Mana- gement which is controlled by the company’s Supervisory Board. The Board of Management runs the company to the benefit of the company, independently and on its own responsibility. Furthermore, the Board of Management represents and acts on behalf of the company. The members of the Board of Ma- nagement are obligated to provide to the President of the Bo- ard of Management complete, comprehensive, accurate and ongoing information about any major event and development of individual transactions in the areas of their responsibility. Provision of information to the Supervisory Board and the Ge- neral Assembly is the responsibility of the President of the Bo- ard of Management who reports to the Supervisory Board Chairman on an ongoing basis in all the cases important to the company's operations. The Board of Management reports to the Supervisory Board on the following: • Profitability of the company, particularly its return on equity, • Draft business policy, and other basic business issues, • Transactions that can significantly impact the com- pany’s profitability and financial solvency, • Development of transactions under way, in particular the company’s turnover and financial standing, • Issues regarding the business operations of the parent company and its associated companies, and • Other matters in compliance with the law and accor- ding to the requirements of the Supervisory Board. 1.5 Governance, commitments, inclusion 1.4.1 2012 reporting characteristics 14 • All the indicators and disclosures in the present report refer to the calendar year 2012. • Employee data, key data on financial operations, and eco- nomic impacts of business operations were acquired in the financial reportingprocess for thepurposeof the company’s annual report compilation in accordance with International Accounting Standards and the Slovenian legislation. • The objective of Lek’s HSE reporting is compliant with Novartis’ and Sandoz’ objectives to provide a fair and well-balanced picture in the field of health, safety and environmental impacts (HSE). The system of monito- ring HSE achievements and the reporting methodology are described on page 44. • Sustainable development reports are compiled annually and also include the Environmental Statement (EMAS) amended and upgraded at every major change. Re- ports contain key data for all Lek sites in Slovenia. • We expect the report will be used by the company’s associates and management team, local communities within which the company operates, professional or- ganizations assessing the compliance with the RC Initiative and EMAS Scheme, and the members of the pharmaceutical associations. • The report covers the major economical, environmen- tal and social impacts of the organization. • Reporting refers to the company Lek d.d. and to all of its manufacturing locations in Slovenia. 15 • The company Lek d.d. holds a 100% ownership stake in the following subsidiaries (as of 31 December 2012): Sandoz, d.d., Hotel Lek, d.o.o., Novartis Animal Health, d.o.o. and Lek Ljubljana Holding GmbH, Austria. In the USA (through Lek Ljubljana Holding GmbH), Lek d.d. indirectly owns the company Lek Pharmaceuticals, Inc., whereas in the âistilna naprava Lendava d.o.o. (Lenda- va Wastewater Treatment Plant) it holds a 74.5% owner- ship stake. • In 2012, there were no changes in the size, structure and ownership of Lek d.d. There were no merger activi- ties or joint ventures. The company Lek Skopje d.o.o., Macedonia, had already been divested in 2012. 16 • To improve the reporting accuracy, the following adjust- ments in the data collection process were made for 2012 17 , also impacting the comparability of previous ye- ars’ data: • - On the basis of additional information, we improved the method of collecting data on the realization of the production plan for various finished dosage forms and mass flows of starting materials at the Ljubljana site. Following some minor corrections to the pro- duction plan realization / use of starting materials in 2008, the calculations of resource use efficiency changed as well. • - When reporting on wastes, we followed Novartis’ request that reporting since 2011 inclusive should only cover wastes leaving the site. Consequently, the waste thermally treated at the site was no longer re- ported in 2011. We reported however on the ashes and slags resulting from such thermal treatment. In 2012, mycelium waste generated by the fermentati- on process at the Lendava site was redirected from the site incinerator to a contracting biogas plant for processing. As a result, the total volume of mycelium waste is now reported as waste treated outside the site.