Sustainability Report 2013 Lek d.d.

Company Profile Sustainability Report 2013 – Lek d.d. 18 16 GRI Disclosures G4-22, G4-23, G4-28, G4-29, G4-30 17 GRI Disclosure G4-17 18 GRI Disclosure G4-13 19 GRI Disclosures G4-22, G4-23 20 GRI Disclosure G4-34 Lek’s reporting has been based on the RCI for several years now, the present report being an upgrade of the previous reporting model. The report meets the requirements of Annex IV to Regulation No. 1221/2009 (EMAS) and prescribed indicators disclosing them also at the site level. Lek’s reporting in compliance with the GRI Guidelines uses the basic version of reporting G4 guidelines. Reporting in accordance with RCI requirements Reporting in accordance with EMAS Eco-Management Scheme requirements Reporting in accordance with GRI Guidelines 1.4.1 2013 reporting characteristics 16 • All the indicators and disclosures in the present report refer to the calendar year 2013. • Employee data, key data on financial operations, and economic impacts of business operations were acquired in the financial reporting process for the purpose of the company’s annual report compilation in accordance with International Accounting Standards and the Slovenian le- gislation. • The objective of Lek’s HSE reporting is compliant with No- vartis’ and Sandoz’ objectives to provide a fair and well- -balanced picture in the field of health, safety and environ- mental impacts (HSE). The system of monitoring HSE achievements and the reporting methodology are de- scribed on pages 6 and 7. • Sustainable development reports are compiled annually and also include the Environmental Statement (EMAS) amended and upgraded at every major change. Reports contain key data for all sites of Lek, a Sandoz company, in Slovenia. • We expect the report will be used by the company’s as- sociates and management team, local communities within which the company operates, professional organizations assessing the compliance with the RC Initiative and EMAS Scheme, and members of the pharmaceutical associations. • The report covers the major economic, environmental and social impacts of the organization. • Reporting refers to the company Lek d.d. and to all of its manufacturing sites in Slovenia. 17 • The company Lek d.d. holds a 100% ownership stake in the following subsidiaries (as of 31 December 2013): San- doz, d.d., Hotel Lek, d.o.o., Novartis Animal Health, d.o.o. and Lek Ljubljana Holding GmbH, Austria. In the USA, Lek d.d. (through Lek Ljubljana Holding GmbH) Lek d.d. indirectly owns the company Lek Pharmaceuticals, Inc., whereas in the Lendava Wastewater Treatment Plant it holds a 74.5% ownership stake. • In 2013, there were no changes in the size, structure and ownership of Lek d.d. There were no merger activities or joint ventures. 18 • To improve reporting accuracy, the following adjustments in the data collection 19 were made for 2013, also impacting the comparability of previous years’ 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 at the Ljubljana site. Following corrections to the pro- duction plan realization / use of starting materials, the calculations of resource use efficiency changed as well. - When reporting on wastes, we followed Novartis’ request that reporting from and 2011 including should only cover wastes leaving the site. Consequently, the waste thermally treated at the site was no longer repor- ted in 2011. We reported however on the ashes and slags resulting from such thermal treatment. In 2012, mycelium waste generated by the fermentation process at the Lendava site was redirected from the site incine- rator 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. 1.5.1 Governance and management 20 At the year end, the Lek d.d. Board of Management was composed of the following: 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 Management, Legal Affairs Patrick Bernard Donnelly IV, Member of the Board of Management, Finance (since 7 January 2013) Ale‰ Rokavec, Member of the Board of Management, Technical Operations Samo Ro‰, Human Resources Bojan Dolenc, Member of the Board of Management, Workers’ Director Lek d.d. Supervisory Board: Peter Goldschmidt, Chairman (until 7 July 2013) Francesco Balestrieri, Chairman (since 9 July 2013) Jeffrey Pilgram George, Deputy Chairman Cesare Frontini, Member (until 22 April 2013) Martin Jeffrey Rope, Member (since 23 April 2013) Knut Mager, Member Peter Svete, Member, Workers’ Representative Aleksander Koren, Member, Workers’ Representative (until 17 December 2013) Vesna Premoviã, Member, Workers’ Representative (since 18 December 2013) Lek d.d. is a company with a two-tier board system. The ma- nagement function is performed by the company’s Board of Management which is controlled by the company’s Super- visory Board. The Board of Management runs the company to the benefit of the company, independently and on its own respon- sibility. The members of the Board of Management are obligated to provide to the President of the Board of Ma- nagement complete, comprehensive, accurate and on- going information about any major event and deve- lopment of individual transactions in the areas of their responsibility. Provision of information to the Supervisory Board and the General Assembly is the responsibility of the President of the Board of Management who reports to the 1.5 Governance, commitments, inclusion