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In 2015, we updated the business continuity management system (SUNP) according to ISO 22301:2013 (the new international standard for business continuity management) that superseded BS 25999, the

business continuity standard on which SUNP was based.

We assess process criticality and the risks that threaten their operability. In 2015, we re-analysed the impact on operations, adopted a new business continuity management strategy and updated relevant plans.

We take effective measures to protect people, property and other key resources, and to prevent emergencies and disasters. For emergency cases, we have prepared plans of action and disaster

relief measures, as well as measures to reduce direct damage. The effectiveness of the SUNP is improved by continuously upgrading the system, providing training and practice. We pay special attention to increasing resistance to major incidents or disasters, so that we ensure a high level of redundancy of our critical infrastructure through new investment projects.

SUNP is an integral part of Krka's comprehensive risk management.

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We are

committed to the high ethical and professional standards stipulated in the Krka Code of Ethics. Exchanging experience in an international setting fosters a synergistic network of various cultures and values. Employees work in various cultures, where we work as partners to achieve common goals. We work with young people and help them gain experience even before they enter the job market.

The company's competitiveness and performance are also maintained through the continuous improvement of internal processes.

SUSTAINABLE DEVELOPMENT

Responsibility to employees

A dynamic international environment offers many challenges and opportunities for growth and development. Employees work in various cultures, where we work as partners to achieve common company goals. Our values – speed and flexibility, partnership and trust, creativity and efficiency – are important parts of Krka's culture, and this enables us to set high goals and reach

them with ambition, knowledge and ability. Special attention is paid to attracting, recognising and developing young talent. In this way, we make sure that the company remains successful in the future.

Employees make the greatest contribution to the company's success. Together, we encourage a culture of mutual trust, respect, co-operation and teamwork, lifelong learning, and responsible and efficient work. We strive to ensure that all our activities reflect responsibility to employees and Krka values.

The international environment, interesting work challenges, the best possible working conditions, the quality of life and work, social security, and safety at work, form the foundations for a

stimulating working environment in which the goals and needs of the individual are linked with the company’s objectives. Equal opportunity, respect for legal norms and rules, and an ethical approach to other people and

the wider social community are the foundations of our work. We respect human rights as they are defined in internationally recognised principles and guidelines, including the Universal Declaration of Human Rights. We abide by all legal norms and rules related to human rights issues in all the countries where we operate. All employees get familiar with the Krka Code of Ethics, which obliges us to respect ethical and professional standards of work, knowledge and behaviour. Because we value quality, new employees are selected carefully and must maintain high professional and ethical standards in addition to having the necessary knowledge and skills. Employees work in an international environment, where they have the opportunity to develop

professionally and personally through the challenges arising from their tasks. They can also attend many different courses on leadership, personal and professional development or foreign languages. The basis of success is striving for excellence at work and continuous professional development, personal development and the development of interpersonal relations. As we plan for the long term, we think about future employees even before they enter the job

market. We offer scholarships to students who demonstrate talent and ability during their studies. The students on our scholarships are connected with Krka during their studies. We systematically work with them to connect them with the company in the best possible way and help them gain experience. These students get to know Krka and the company's working processes at organised meetings and during their internship and can prove their skills and abilities. We assist students and junior researchers working on various assignments. As lecturers at tertiary education institutions, we help design course materials at 1st and 2nd cycle study programmes. In 2015,

Krka had 50 students on scholarships, 7 of whom graduated. We also work with secondary schools and faculties and provide compulsory work placement for students; 251 secondary school and university students attended work placement in our company in 2015.

It is our aim to be successful in a competitive international environment. This may be achieved only if the organisational climate provides for employee satisfaction and effective work. By regularly measuring the organisational climate, we make sure that the employees have the opportunity to express their opinions. Analyses of findings serve for improvements which contribute to efficient and creative environment and committed employees. We encourage the awareness that every employee contributes to a sound working environment, good organisational climate and business results.

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The company's competitiveness and performance are also maintained through the continuous improvement of internal processes. This is becoming increasingly important, given our intensive growth and expansion to new markets. The Krka Group is becoming increasingly complex, which is why we give special attention to organisational efficiency. Our continuous search for new solutions in the processes and structure, reorganisation and restructuring of the units in Slovenia and abroad enable us to be flexible and quick to respond to the demands of the competitive environment, while exchanging experience in an international environment allows for a synergistic network of various cultural patterns and values.

Key 2015 employee data

Number of employees 10,564 from that 46.5% in Slovenia

Average age 39.2 years

Share of female employees 63.8%

Share of female employees in management positions 44.7%

Share of employees with at least university degree 54.8%

Share of permanently employed 88.2% (87.6% female; 89.5% male)

Change in number of employees in 2015 +65

Undesired fluctuation 7.8%

Number of employees as at 31 December 2015

2015 2014 2013 2012 2011 Index

2015/14

Krka Company in Slovenia 4,292 4,256 4,190 4,085 3,899 101

Krka Company representative offices outside Slovenia 506 482 438 410 480 105

Krka Company 4,798 4,738 4,628 4,495 4,379 101

Subsidiaries outside Slovenia 5,151 5,130 4,764 4,287 3,865 100

Terme Krka Group 578 585 605 627 653 99

Farma GRS* 37 46 51 52 51 80

Krka Group 10,564 10,499 10,048 9,461 8,948 101

* Including the micro-companies founded by Farma GRS

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