Message from the Group Chief Executive

  Stephen Saad
Group Chief Executive

Economic volatility during the period under review continued to burden businesses and consumers, the focus on increasing access to affordable healthcare remained a high priority on national agendas worldwide and recent incidents of natural disasters increased the inherent environmental risks to global supply chains. In response, Aspen has remained focused on pursuing its defined strategic objectives and ongoing optimisation of our business model. This has enabled the Group to deliver another set of strong results despite the challenging operating conditions prevalent across all territories. Organic growth has been achieved through continued strong promotion of Aspen’s established brands, by leveraging the Group’s global brands and intellectual property across multiple territories and focusing on unlocking value from the product pipeline in accordance with commercial plans.

New subsidiaries were established in the key emerging markets of Argentina, Malaysia, Nigeria and Taiwan. In addition, the Group continued to invest in acquisitive growth opportunities aimed at the expansion of its global product portfolio and at developing a critical mass in territories identified as having future growth potential. Negotiations progressed well in respect of significant transactions with Merck Sharp & Dohme (“MSD”), Glaxo Group Limited (“GSK”) and Nestlé and these transactions are expected to be concluded in the year ahead leading to extension of the Group’s product portfolio and its geographic coverage.

Aspen’s global family has grown to nearly 8 200 employees following recent acquisitions of the MSD API business. Experienced pharmaceutical skills are in high demand and the Group remains committed to the effective management of its human capital. In the acquisition of new businesses, employee engagement activities have taken place with individual employees, labour unions and works councils as required. Carefully developed integration plans are in progress to ensure that the acquired employees, operations and products are efficiently amalgamated into the Group’s business model and ethos. To this end, the Group human resources policies and procedures, already embedded in the South African business, are currently being implemented across the International businesses. This is expected to improve the consistency of human capital management in the Group. Employee training has been identified as an area which requires additional focus, particularly in the International businesses and for the development of black employees in South Africa.

In Australia, the planned closure of the Noble Park and Baulkham Hills sites is expected to be completed by December 2014. This project is being given due focus by the management team at Aspen Australia to provide necessary support to affected employees and to ensure that relevant stakeholder requirements are addressed.

It is with deep regret that Aspen reports one fatality at Aspen Venezuela where an employee was killed in a motor vehicle accident while travelling for business meetings.

Good progress has been made towards enhancing safety and environmental management across the Group’s manufacturing sites. The Port Elizabeth, East London and Johannesburg manufacturing sites received the ISO 14001 and OHSAS 18001 certifications for the first time during July 2013. This is a commendable achievement by the South African Operations team and validates Aspen’s commitment to the preservation of the environment, efficient utilisation of scarce resources and ongoing enhancement of safe working conditions. The focus on improving Safety, Health and Environ­mental (“SHE”) compliance management practices will now be extended to the Group’s manufacturing sites in Australia, East Africa, and Latin America. Aspen also obtained external assurance of the 2013 Carbon Disclosure Project (“CDP”) submission and further participated, for the first time, in the CDP’s Water Disclosure project for the South African and German sites this year.

Aspen continued its support of 36 Corporate Social Investment (“CSI”) projects in South Africa directed at the development of primary healthcare clinics in rural areas, HIV/AIDS management programmes, healthcare education and training initiatives and other community upliftment programmes. In commemoration of the Nelson Mandela International Day (“Mandela Day”), Aspen’s employees volunteered 67 minutes and more of their time to various community upliftment projects across six continents. Donations, refurbishment projects and life skills workshops benefited approximately 9 400 underprivileged members of communities across fifteen countries. The formation of the South African Public Healthcare Enhancement Fund in August 2012 was a significant milestone towards the consolidation of CSI funds and collaboration of public-private initiatives in South Africa. Aspen played a leading role in pioneering this initiative with the South African Department of Health and other South African healthcare companies. This initiative aims at addressing critical community healthcare projects in South Africa including the acceleration of access to primary healthcare and educational facilities in South Africa as well as reinforcing the national campaign against HIV/AIDS, TB and other non-communicable diseases.

We strive for continuous improvement across all business activities and the sustainability reporting process is no exception. Aspen’s Sustainability Report was assured externally by Environmental Resources Management (“ERM”). In addition, limited assurance was obtained on selected key performance indicators through a combined assurance approach. Selected safety and environment, commercial, employee and financial indicators were subjected to limited assurance engagements performed by ERM, the Group’s Internal Audit (“Internal Audit”) department and PricewaterhouseCoopers Inc. (“PwC”) respectively. The 2013 Sustainability Report has been assured by ERM in accordance with Global Reporting Initiative (“GRI”) 3,0 as B-Level compliant. Recommended areas for improvement have been identified and plans are in place to enhance reporting systems to improve the accuracy and relevance of disclosed non-financial sustainability information. Consideration will be given to aligning Aspen’s sustainability reporting process to the GRI G4 requirements, as appropriate, during 2014 and 2015.

Aspen provides access to affordable, high quality medicines to a global base of customers that have trust in the Aspen brand. Aspen has been ranked as the ninth largest generic pharmaceutical company in the world by EvaluatePharma and, earlier this year, the Boston Consulting Group ranked Aspen as one of only five South African companies on the “100 Global Challengers” list. Through an embedded day-to-day culture of sound governance, effective risk management, accountability, innovation and synergistic teamwork, the Group has been successful in delivering value to stakeholders and will continue to pursue this intent in a responsible manner.

Stephen Saad
Group Chief Executive

21 October 2013

Aspen’s ongoing participation in the annual Mandela Day initiative prompted greater involvement from employees, their families and our business partners who volunteered 67 minutes and more of their time by providing food parcels and other daily necessities, educational aids, financial donations, refurbishment of community buildings and life skills training.
More than 4 500 employees from 19 Aspen business units
participated in Mandela Day through 36 projects hosted in 15 countries
on six continents, touching the lives of some
9 400 beneficiaries

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