Sustainability Report 2014 Lek d.d.

Company Profile Sustainability Report 2014 – Lek d.d. 22 1.5.2 Employee participation in company management 22 Lek d.d. adheres to the methods and conditions for worker participation in management as provided by the Slovenian Worker Participation in Management Act. The employees exercise their rights to participation in management individually and collectively through the Workers' Council, Workers' Assembly and their representatives in the company's management bodies. The Workers’ Council serves as a form of collective and indirect participation of employees in the management of the company. Two representatives of the employees are the Supervisory Board members, while the Workers' Director is also a member of the Board of Management. A change of the president of the Worker’s Council at the end of 2013 resulted also in a change of Supervisory Board mem- ber in 2014. Vesna Premoviç, the president of the Workers’ Council, became a new Supervisory Board member. Three new members of Euroforum (Novartis Workers’ Council) were elected and in June they attended the annual meeting of this body. The Workers’ Council elected Marjan Novak as the new Workers’ Director and member of the Board of Management. In the next five-year term he will account for and represent the interests of workers in the HR and social area. The Works Council has its own intranet site where monthly meeting records and other information useful for the employ- ees are regularly published (Workers’ Council activities, information with regard to labour law, tax policies, links to im- portant laws, institutions …). At the Workers’ Council meeting, questions and initiatives pro- vided by employees are answered and responded to immedia- tely by the President of the Board of Management, the Workers’ Director and HSE Director. Answers and/or any additional infor- mation are also provided after the meetings. In 2014, the Workers’ Council was regularly informed at meetings about organizational changes in individual units, topical issues which were subject to management decisions, establishment of Novartis Business Services, establishment of FCS (Finance Center Slovenia), amending certain internal acts, current events at Lek’s trade union, change in access controls and devices for registering working hours at the Ljubljana site. It also took note of Lek’s annual report for 2013 and other reports. With its activities and initiatives the Workers’ Council acti- vely contributed to the implementation of legal rights and competences in the field of co-management. It informed the employees on a regular basis and responded to current issues in the company by submitting proposals and initiatives for the improvement of working life quality, working conditions and health and safety at work to the management. Participation of employees in key projects to optimize business processes and improve environmental performance is descri- bed under item 2.1.5. 1.5.3 Shareholder overview and inclusion 23 At Lek, a Sandoz company, we include diverse groups of stakeholders in our operations in order to understand their Press conference on the occasion of the Children’s Week (from left): Breda Kra‰na, Secretary General SAFY, Vlasta Nussdorfer, Slovenian Ombudsman, Darja Groznik, President of SAFY, Katarina Klemenc, Head of Corporate Communication at Lek, a Sandoz company, and Liana Kalãina, President of the national committee for children's rights at SAFY. (Photo: Barbara Zajc) Red Noses in the Caravan Orchestra show, dedicated to children with developmental disabilities 22 GRI G4-DMA 23 GRI Disclosures G4-24, G4-25 needs and expectations and to improve access to health- care. We identify them on the basis of their impact on our company and vice versa. On the basis of corporate citizen- ship principles, we endeavour to maintain an open dialogue, seeking the most appropriate forms of cooperation. We focused our activities on five key groups of stakeholders: patients, employees, shareholders, healthcare partners (healthcare professionals, regulators, professional associ- ations, buyers, suppliers) and society (local communities, non-governmental organizations, scientific and educational institutions, and the media). The well-branched network of our stakeholder relations is associated with their various interests and a wide spectrum of Lek's operations. Our understanding of and dialogue with stakeholders are based on the following Novartis principles: commitment to patients, Lek employees and local communities; respect for the natural environment; and adherence to the ethical princip- les of corporate governance. The Novartis/Sandoz model of stakeholder relationship management enables us to play an active role in the life of society at large and to upgrade the knowledge of our activity and stakeholders’ expectations. We participate in social discussions where we present our views, being open to the opinions of others, and we are improving the company’s performance through strategic ad- justments to our corporate practice.