Sustainability Report 2014 Lek d.d.

Company Profile Sustainability Report 2014 – Lek d.d. 8 Objectives for 2014 Realization in 2014 (for entire Lek, a Sandoz company) * Definition of LTIR and TRCR indexes and formula for their calculation are given under Item 3.3.2 Monitoring of work-related injuries. Ecotoxicity assessment of APIs Realized. Evaluation for all APIs (including new) for which ecotoxicity data is available in the literature. Non-halogenated VOC emissions to the air Realized. (nh-HOS); Target: ≤142 tonnes Emissions reached 99 tonnes. Halogenated VOC emissions to the air Realized. (h-HOS); Target: 1 tonne Emissions reached 1.06 tonnes. Energy savings Projects realized. With implemented projects aimed at energy efficiency improvement we saved 34.2 TJ of energy, however, due to the increase in production the total energy consumption was 2% higher than in 2013. Reducing hazardous waste volumes Not realized. Hazardous waste increased by 3.9%. Reducing non-hazardous waste volumes Not realized. Non-hazardous waste increased by 8.2%. LTIR* (own employees); Target: ≤0.14 Not realized. The index reached 0.16. LTIR* (own employees + employees hired Not realized. through employment agencies); Target: ≤0.16 The index reached 0.22. TRCR* (own employees + employees hired Realized. through employment agencies); Target: ≤0.46 TRCR index reached 0.42. HSE targets for 2014 Alexander Lich, global Head HSE at Sandoz in 2014 Major impact of Lek within Sandoz Alexander Lich, global Head HSE at Sandoz in 2014, explains the importance of the health, safety and environment area and Lek’s role within Sandoz. How would you tangibly illustrate the importance of corporate responsibility at Novartis? Its importance is of course essential. It is the Sandoz objective to fulfil the mission to be "the main provider of high-quality affordable medicines, helping secure long- -term access to healthcare for people around the world" by simultaneously striving to make efficient use of natural resources and minimizing our environmental impact. In accordance with our mission we consider the full life cycle of our products. Sustainable operation begins already at the research and development stage by avoiding the use of environmentally hazardous starting materials and solvents. Potential emissions to water and air are reduced by introducing highly sophisticated abatement technologies into production. Last but not least we demonstrate our responsibility to the environment, neighbours and soci- ety also by adopting effective concepts to reduce waste, recycling and re-use of outgoing materials or generating energy by controlled thermal oxidation. How do you assess the importance of Lek’s integrated reporting on its operations in the light of Sandoz policy and disclosure of sustainability development indicators? It is extremely important for the development, manufacture and supply of our products. Patients and customers trust Lek and its people. Because of its size, Lek’s capacity has a major impact on Sandoz’ total environmental balance. We pride ourselves on openly disclosing the results of Lek’s efforts in 2014. Lek’s management team once again achieved a reduction of volatile organic compounds by 21% driven by technological improvements, e.g. at the Menge‰ site. Moreover, the overall waste recycling rate has improved significantly. Lek responsibly delivers on Novartis’ commitment to health, safety and environment. Our goal is to be a leader in Health, Safety and Environment (HSE). We consider HSE implications in our healthcare activities, from research, through production and distribution, until our customers and patients use and dispose of the final product.