Sustainability Report 2013 Lek d.d.

19 Company Profile 21 GRI G4-DMA The Workers’ Council of Lek d.d. Supervisory Board Chairman on an ongoing basis in all the cases important to the company's operations, as follows: • Profitability of the company, particularly its return on equity, • Draft business policy and other basic business issues, • Transactions that can significantly impact the compa- ny’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 accord- ing to the requirements of the Supervisory Board. The primary function of the Supervisory Board is to oversee the policy pursued by management. The Board can perform reviews and verification of the company's books and docu- mentation, its treasury, securities and goods in stock, and other matters. The Supervisory Board can request the Board of Management to provide any information needed for the Board to perform its supervisory role. The main responsibilities of the Supervisory Board include the following: • Supervision of company management, • Verification and approval of annual reports, • Checking and proposing to the General Assembly the use of distributable net profit, jointly with the Board of Management, • Providing the General Assembly with a written re- port on the verification of the annual report and of the management of the company during the business year, • Reviewing reports by the Board of Management, • Reviewing and verifying the company’s books and documentation, • Appointment and recall of Board of Management members, • Granting the right to and setting criteria for buying stock options, • Signing contracts with Board of Management members, • Other competencies in accordance with the law. In accordance with its competencies and responsibilities, the Supervisory Board performs due supervision of the company’s management, monitoring it through the reports provided by the Board of Management on a regular basis at Supervisory Board meetings, and on the basis of other notifications the Board of Ma- nagement assesses as significant in accordance with statutory and internal regulations. In this way, the Board performs compre- hensive control of the company’s economic, environmental and social impacts. Information on these impacts is also provided to the Supervisory Board as part of its competency of approving the company's annual report, which also encompasses the business report containing, inter alia, all the major environmental protec- tion information. For their work, the members of the Supervisory Board of Lek d.d. receive no compensation or other rewards. Being also Lek/ Novartis employees, their duties as Supervisory Board members form part of their job-related obligations. Appointment of the members of the Supervisory Board of Lek d.d. is confirmed by the Executive Committee of Novartis, the highest governance body, with the aim of providing the best people, based on their skills and competencies, to cover all the company’s functions, and to ensure their operational autonomy. Similarly to other levels of the company’s functioning, supervi- sory bodies also operate in accordance with the Diversity & Inclusion initiative. In their function, Supervisory Board members act to the benefit of the company and with due diligence, bound by an obligation of confidentiality. All members of the Supervisory Board avoid any conflict of interest. Upon their appointment, they have to sign a statement pursuant to Article 255 of ZGD-1, an obligation set for all Novartis Group employees in the Novartis internal Conflict of Interest Policy. 1.5.2 Employee participation in company management 21 Lek d.d. adheres to the methods and conditions for worker par- ticipation in management as provided by the Slovenian Worker Participation in Management Act. The employees exercise their rights to participation in manage- ment individually and collectively through the Workers' Council, Workers' Assembly and their representatives in the company's management bodies. The workers' representatives also act as Supervisory Board members, while theWorkers' Director also performs the function of Board of Management member. The Workers’ Council consists of several committees: • For general issues, • Economic, • Status-related, and • Human resources and social issues. Workers’ Council members serve on various boards of the company: • Innovation, • Occupational safety, • Diversity and inclusion, and • Supervisory committee of the Lek Trade Union. In 2013 the employees proposed no initiatives to the Supervi- sory Board. However, they maintained direct contacts with the Workers’ Director who provided them with answers and assis- tance in finding suitable solutions with regard to job changes and working conditions, and gave them additional information. At the Workers’ Council meeting, questions and initiatives pro- vided by employees are answered and responded to immedi- ately by the President of the Board of Management, Workers’ Director and HSE Director. The issues raised most frequently included working hours, working conditions, business results and plans, holiday facilities, organizational changes and addi- tional pension insurance. Also presented was a report on Su- pervisory Board meetings, a report on the work of the Workers’ Council in the past year, the Lek d.d. Annual Report 2012, a report on the work of the innovation Committee, the HSE report and various initiatives. Answers and/or any additional informa- tion are also provided after the meetings. Monthly records of meetings and other information (links to important laws, institutions…) useful for the employees are regularly published on the Worker’s Council intranet site.