Sustainability Report -...

Sustainability Reporto f t h e G o R e n j e G R o u p f o R t h e Y e a R 2 0 1 3

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t r a j n o s t n o p o r o č i l o

Published by

Conceptual design and texts

Creative design and layout

Photography

Gorenje, d.d.

Consensus, d.o.o.

Marinšek & Marinšek

Gorenje archive

july 2014

Sustainability Reporto f t h e G o R e n j e G R o u p f o R t h e Y e a R 2 0 1 3

4

S u s t a i n a b i l i t y R e p o r t

1 Introduction 7

1.1 presentation of the Gorenje Group and the company Gorenje, d.d. 7

1.1.1 About the Gorenje Group 7

1.1.2 Vision, mission and values 8

1.1.3 Organisational structure of the Gorenje Group 9

1.1.4 General information about the company Gorenje 11

1.1.5 System and bodies of corporate governance at the company Gorenje, d.d. 12

1.2 Report by the president and Ceo 14

1.3 Gorenje and sustainable development 15

1.4 policy on environmental protection and on safety and health at work 16

1.5 Report's compliance with GRI guidelines 18

1.6 Key operating highlights 19

Contents

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t h e G o R e n j e G R o u pf o R t h e Y e a R 2 0 1 3

2 Central topics 23

2.1 Creating value for the shareholders: business excellence 23

2.1.1 Restructuring of manufacturing operations and the sales network 23

2.1.2 Focusing on the core activity 25

2.1.3 Revenue growth outside Europe and higher sales in the premium segment 26

2.1.4 Strategic partnership with Panasonic 26

2.1.5 Chain of added value (supply chain) 27

2.1.6 Key goals for 2014 28

2.2 environmental responsibility and effective management of natural resources 29

2.2.1 Gorenje eco cycle 30

2.2.2 Environmental communication 32

2.2.3 Identified environmental aspects 34

2.2.4 Effective resource management 37

2.2.5 Electric power consumption 40

2.2.6 Carbon footprint 42

2.3 Social diligence: generating value for users, employees and the local environment 43

2.3.1 Responsibility towards the user 43

2.3.2 Responsibility towards the employees 45

2.3.3 Responsibility to the local environment 54

3 Summary of key achievements in 2013 and plans for the year 2014 56

acronyms and abbreviations 58

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List of tables table 1 Environmental management system and occupational health and safety management system

at the Gorenje Group (situation 2013) 16

table 2 Report's compliance with general indicators GRI G3.1 18

table 3 Business highlights in 2013 22

table 4 Key goals for 2014 28

table 5 Detailed overview of identified and assessed environmental aspects of the operation of Gorenje Group companies 36

table 6 Reducing the quantity of waste and the consumption of energy resources at Gorenje, d.d., location Velenje 37

table 7 Quantities of disposed waste at Gorenje, d.d., location Velenje 38

table 8 Quantities of disposed waste at Gorenje I.P.C., d.o.o. 38

table 9 Water consumption at Gorenje, d.d., location Velenje 39

table 10 Water consumption at Gorenje I.P.C., d.o.o. 39

table 11 Water consumption in the manufacturing company Mora Moravia s.r.o. in the Czech Republic 40

table 12 Water consumption in the manufacturing company Gorenje, d.o.o., in Valjevo in Serbia 40

table 13 Electric power consumption at Gorenje, d.d., location Velenje 40

table 14 Electric power consumption at Gorenje I.P.C., d.o.o. 40

table 15 Electric power consumption in the manufacturing company Mora Moravia s.r.o. in the Czech Republic 41

table 16 Electric power consumption in the manufacturing company Gorenje, d.o.o., in Valjevo in Serbia 41

table 17 Data on CO2 emissions for location Velenje 42

table 18 Number of employees at the Gorenje Group 46

List of diagrams Diagram 1 Business fields of the Gorenje Group 7

Diagram 2 Pillars of sustainable development at Gorenje Group 15

Diagram 3 Gorenje eco cycle - from planning to recycling 30

Diagram 4 Key stakeholders of the company Gorenje, d.d., and the Gorenje Group 32

Diagram 5 Criteria for identification of environmental aspects at the Gorenje Group 34

Diagram 6 Identified environment aspects of operation of Gorenje Group companies 35

Diagram 7 Work performance analysis process at the Gorenje Group 47

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Major and small domestic appliances and heating,

ventilation and air-conditioning products are sold

under the brands Gorenje, Asko, Atag, Pelgrim,

Upo, Mora, Etna and Körting.

In addition to the core activity (business seg-

ment home products and services for the home),

we have been active for a number of years in the

field of ecology, offering comprehensive waste

management services and developing the activi-

ties of toolmaking, machine building, engineering,

renewable energy sources, efficient use of energy,

etc. In accordance with the updated strategic

plan, all segments that are not a part of the core

activity are treated as PORTFOLIO INVEST-

MENTS. We have been successfully expanding

our sales network and with a 95% share of export

in the sales revenue, we are Slovenia's most

internationally oriented company.

In 2013, the Group had 10,410 employees and

generated sales revenue of EUR 1.24 billion.

1 Introduction

1.1 Presentation of the Gorenje Group and the company Gorenje, d.d. 1.1.1 about the Gorenje Group

Business fields

CoRe aCtIVItY poRtfoLIo InVeStMentS

products and services for the home

Large domestic appliances

Small domestic appliances

Heating, ventilation and air-conditioning products

Ecology

Toolmaking

Engineering

Hotels and hospitality services

Trade

for more than sixty years,

the goal of operations of

the companies united in the

Gorenje Group has been the

manufacture of technically

perfect, superiorly designed

and energy-efficient products

for the home, made to improve

the quality of life of people in

ninety countries around

the world.

Diagram 1: Business fields of the Gorenje Group

8


1.1.2 Vision, mission and values

We want to become the world's best

in design-based innovations of home products.

We create innovative, technically excellent and design-inspired products

and services that offer simplicity of use.

VaLueS

MISSIon

VISIon

Responsibility | Innovation

open-mindedness

team spirit Respect efficiency Goal

orientation Commitment

9


Companies active in Slovenia ownership share in % Business fields:

• companies engaged in the core activity (busi-

ness segment home: products and services

for the home - PPD) and

• companies engaged in other activities (busi-

ness segment portfolio investments: ecology,

toolmaking, engineering, hotel and hospitality

services, trade - PPPN).

The data in the sustainability report mostly relate to

the companies engaged in the core activity; where

the data is given for the companies from the portfo-

lio segment, it is specifically stated in

the report.

1. Gorenje I.P.C., d.o.o., Velenje 100.00 PPD

2. Gorenje GTI, d.o.o., Velenje 100.00 PPPN

3. Gorenje Gostinstvo, d.o.o., Velenje 100.00 PPPN

4. Energygor, d.o.o., Velenje 100.00 PPPN

5. Kemis, d.o.o., Vrhnika 99.984 PPPN

6. Gorenje Orodjarna, d.o.o., Velenje 100.00 PPPN

7. ZEOS, d.o.o., Ljubljana 51.00 PPPN

8. Gorenje Surovina, d.o.o., Maribor 99.984 PPPN

9. Indop, d.o.o., Šoštanj 100.00 PPPN

10. ERICo, d.o.o., Velenje 51.00 PPPN

11. Gorenje design studio, d.o.o., Velenje 52.00 PPD

12. PUBLICUS, d.o.o., Ljubljana 50.992 PPPN

13. EKOGOR, d.o.o., Jesenice 74.998 PPPN

14. Gorenje GAIO, d.o.o, Šoštanj 100.00 PPPN

15. Gorenje GSI, d.o.o., Ljubljana 100.00 PPD

16. Gorenje Keramika, d.o.o., Velenje 100.00 PPD

17. Gorenje Surovina Fotoreciklaža, d.o.o., Maribor 50.992 PPPN

18. Gorenje Studio, d.o.o., Ljubljana 100.00 PPD

1.1.3 organisational structure of the Gorenje Group

the table lists the Gorenje

Group companies classified by

activities into:

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Companies active abroad ownership share in % Business fields ownership share in % Business fields

1. Gorenje Beteiligungs GmbH, Austria 100,00 PPD 2. Gorenje Austria Handels GmbH, Austria 100,00 PPD 3. Gorenje Vertriebs GmbH, Germany 100,00 PPD 4. Gorenje Körting Italia S.r.l., Italy 100,00 PPD 5. Gorenje France S.A.S., France* 100,00 PPD 6. Gorenje Belux S.a.r.l., Belgium 100,00 PPD 7. Gorenje Espana, S.L., Spain 100,00 PPD 8. Gorenje UK Ltd., Great Britain 100,00 PPD 9. Gorenje Group Nordic A/S, Denmark 100,00 PPD 10. Gorenje AB, Sweden 100,00 PPD 11. Gorenje OY, Finnland 100,00 PPD 12. Gorenje AS, Norway 100,00 PPD 13. Gorenje spol. s r.o., Czech Republic 100,00 PPD 14. Gorenje real spol. s r.o., Czech Republic 100,00 PPD 15. Gorenje Slovakia s.r.o., Slovakia 100,00 PPD 16. Gorenje Magyarország Kft., Hungary 100,00 PPD 17. Gorenje Polska Sp. z o.o., Poland 100,00 PPD 18. Gorenje Bulgaria EOOD, Bulgaria 100,00 PPD 19. Gorenje Zagreb, d.o.o., Croatia 100,00 PPD 20. Gorenje Skopje, d.o.o., Macedonia 100,00 PPD 21. Gorenje Commerce, d.o.o., Bosnia and Herzegovina 100,00 PPD 22. Gorenje, d.o.o., Serbia 100,00 PPD 23. Gorenje Podgorica , d.o.o., Montenegro 99,975 PPD 24. Gorenje Romania S.r.l., Romania 100,00 PPD 25. Gorenje aparati za domaćinstvo, d.o.o., Serbia 100,00 PPD 26. Mora Moravia s r.o., Czech Republic 100,00 PPD 27. Gorenje - kuchyně spol. s r.o., Czech Republic 100,00 PPD 28. KEMIS-Termoclean, d.o.o., Croatia 99,984 PPPN 29. Kemis - BH, d.o.o., Bosnia and Herzegovina 99,984 PPPN 30. Gorenje Studio, d.o.o., Serbia 100,00 PPD 31. Gorenje Gulf FZE, United Arab Emirates 100,00 PPD 32. Gorenje Tiki, d.o.o., Serbia 100,00 PPD 33. Gorenje Istanbul Ltd., Turkey 100,00 PPD

34. Gorenje TOV, Ukraine 100,00 PPD 35. ST Bana Nekretnine, d.o.o., Serbia 100,00 PPPN 36. Kemis Valjevo, d.o.o, Serbia 99,984 PPPN 37. Kemis – SRS, d.o.o., Bosnia and Herzegovina 99,984 PPPN 38. ATAG Europe BV, Netherlands 100,00 PPD 39. ATAG Nederland BV, Netherlands 100,00 PPD 40. ATAG België NV, Belgium 100,00 PPD 41. ATAG Financiele Diensten BV, Netherlands 100,00 PPD 42. ATAG Special Product BV, Netherlandsa 100,00 PPD 43. Intell Properties BV, Netherlands 100,00 PPD 44. Gorenje Nederland BV, Netherlands 100,00 PPD 45. Gorenje Kazakhstan, TOO, Kazakhstan 100,00 PPD 46. Gorenje kuhinje, d.o.o., Ukraine 70,00 PPD 47. »Euro Lumi & Surovina« SH.P.K., Kosovo 50,992 PPPN 48. OOO Gorenje BT, Russia 100,00 PPD 49. Gorenje GTI, d.o.o., Beograd, Serbia 100,00 PPPN 50. Asko Appliances AB, Sweden 100,00 PPD 51. Asko Hvitevarer AS, Norway 100,00 PPD 52. Asko Appliances Inc, United States of America 100,00 PPD 53. Asko Appliances Pty, Australia 100,00 PPD 54. Asko Appliances OOO, Russia 100,00 PPD 55. »Gorenje Albania« SHPK, Albania 100,00 PPD 56. Gorenje Home d.o.o., Zaječar, Serbia 100,00 PPD 57. ORSES d.o.o., Beograd, Serbia 100,00 PPPN 58. Gorenje Ekologija, d.o.o., Stara Pazova, Serbia 99,984 PPPN 59. Gorenje Corporate GmbH, Austria 100,00 PPD 60. Cleaning system S, d.o.o., Serbia 75,989 PPPN 61. ZEOS eko-sistem d.o.o., Bosnia and Herzegovina 49,45 PPPN 62. Solarna energija Solago, d.o.o., Serbia 100,00 PPPN 63. Gorenje Sola - Home, d.o.o., Serbia 100,00 PPPN 64. Gorenje do Brasil Ltda., Brazil 100,00 PPD 65. Gorenje Asia Ltd., China 100,00 PPD 66. Gorenje MDM d.o.o. Kragujevac, Serbia 100,00 PPPN

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34. Gorenje TOV, Ukraine 100,00 PPD 35. ST Bana Nekretnine, d.o.o., Serbia 100,00 PPPN 36. Kemis Valjevo, d.o.o, Serbia 99,984 PPPN 37. Kemis – SRS, d.o.o., Bosnia and Herzegovina 99,984 PPPN 38. ATAG Europe BV, Netherlands 100,00 PPD 39. ATAG Nederland BV, Netherlands 100,00 PPD 40. ATAG België NV, Belgium 100,00 PPD 41. ATAG Financiele Diensten BV, Netherlands 100,00 PPD 42. ATAG Special Product BV, Netherlandsa 100,00 PPD 43. Intell Properties BV, Netherlands 100,00 PPD 44. Gorenje Nederland BV, Netherlands 100,00 PPD 45. Gorenje Kazakhstan, TOO, Kazakhstan 100,00 PPD 46. Gorenje kuhinje, d.o.o., Ukraine 70,00 PPD 47. »Euro Lumi & Surovina« SH.P.K., Kosovo 50,992 PPPN 48. OOO Gorenje BT, Russia 100,00 PPD 49. Gorenje GTI, d.o.o., Beograd, Serbia 100,00 PPPN 50. Asko Appliances AB, Sweden 100,00 PPD 51. Asko Hvitevarer AS, Norway 100,00 PPD 52. Asko Appliances Inc, United States of America 100,00 PPD 53. Asko Appliances Pty, Australia 100,00 PPD 54. Asko Appliances OOO, Russia 100,00 PPD 55. »Gorenje Albania« SHPK, Albania 100,00 PPD 56. Gorenje Home d.o.o., Zaječar, Serbia 100,00 PPD 57. ORSES d.o.o., Beograd, Serbia 100,00 PPPN 58. Gorenje Ekologija, d.o.o., Stara Pazova, Serbia 99,984 PPPN 59. Gorenje Corporate GmbH, Austria 100,00 PPD 60. Cleaning system S, d.o.o., Serbia 75,989 PPPN 61. ZEOS eko-sistem d.o.o., Bosnia and Herzegovina 49,45 PPPN 62. Solarna energija Solago, d.o.o., Serbia 100,00 PPPN 63. Gorenje Sola - Home, d.o.o., Serbia 100,00 PPPN 64. Gorenje do Brasil Ltda., Brazil 100,00 PPD 65. Gorenje Asia Ltd., China 100,00 PPD 66. Gorenje MDM d.o.o. Kragujevac, Serbia 100,00 PPPN

Gorenje gospodinjski aparati, d.d.

Gorenje, d.d.

Public limited company

Partizanska cesta 12, 3320 Velenje, Slovenia

+386 (0)3 899 10 00

www.gorenjegroup.com

[email protected]

Franjo Bobinac

Uroš Slavinec

5163676

72615320

97/01 044, file no. 1/00461/00

EUR 92,240,139.36 (Court register, Celje, No. Srg 2013/54315, 23rd December 2013)

are of the same class and entitle their holders to proportional management, i.e. one vote per share.

GRVG

Ljubljanska borza, d.d., borzna kotacija and Warsaw Stock Exchange

GRVG

1.1.4 General information about the company Gorenje

Company name

abbreviated name

organisational form

Registered address

telephone

Website

e-mail

president of the Management Board

Chairman of the Supervisory Board

Registry number

Vat number

Court register file no.

Share capital of the Company

Issued shares GRVG

Stock exchange listing

Stock exchange

Stock exchange listing

12


According to the two-tier system of governance,

the company affairs are managed by a Manage-

ment Board which is in turn supervised by the

Supervisory Board. Both bodies of governance

shall apply the principles of mutual confidence

and division and delimitation of responsibility.

The Management Board manages company

affairs independently, at its own responsibility

and to the benefit of the company, and reports

regularly to the Supervisory Board. In 2013, the

Management Board of Gorenje, d.d. consisted of

five members, with terms of office lasting until 19

July 2018:

• Mr. franjo Bobinac, president

• Mr. Marko Mrzel, Member

• Mr. Branko apat, Member

• Dr. peter Groznik, Member

• Mr. Drago Bahun, Member

Mr. uroš Marolt was a member of the Man-

agement Board until the expiration of his term

of office on 18 July 2013. On 28 April 2014, Dr.

peter Kukovica assumed his term as the 6th

member of the Management Board. He is in

charge of supply chain management, logistics,

quality, organisation and IT.

The Supervisory Board selects, appoints, and

dismisses the Management Board members.

The composition of the ten-member Supervisory

Board is defined in the Articles of Association of

the company Gorenje, d.d., and the organisation

of the Supervisory Board's work is defined in the

Rules of Procedure for the Supervisory Board.

Members of the Supervisory Board:

• Mr. uroš Slavinec, Chairman

• Dr. Maja Makovec Brenčič, Deputy Chairman

• Mr. Krešimir Martinjak, Deputy Chairman

• Mr. Keith Charles Miles, Member and

Chairman of the Audit Commission

• prof. Dr. Marcel van assen, Member

• Mr. Bernard C. pasquier, Member

• Mr. Bachtiar Djalil, Member of the Supervi-

sory Board and the Audit Commission

• Mr. Drago Krenker, Member of the Supervi-

sory Board and the Audit Commission

• Mr. jurij Slemenik, Member

• Mr. peter Kobal, Member

The Shareholders Assembly is the company's

highest body of governance. At the assembly,

company shareholders directly assert their rights

and decide on changes to the Articles of Associ-

ation. The Management Board must convene the

Shareholders Assembly at least once per year.

1.1.5 System and bodies of corporate governance at the company Gorenje, d.d.

Corporate governance at the

parent company Gorenje, d.d. is

based on the currently effective

legislation, the company's internal

regulations, and the Corporate

Governance Code for publicly

traded companies.

franjo Bobinac Branko apat

13


franjo Bobinac Branko apat Drago Bahun dr. peter Groznik Marko Mrzel dr. peter Kukovica

14


In the spirit of sustainable development, which is

present in every single segment of our operations,

we chose the core values of interconnectedness

of all employees of the Gorenje Group. Our two

primary ones are responsibility and innovation.

Although special attention has been paid to sus-

tainable development for many years, it is with this

report that we are beginning to take more serious

steps in terms of sustainability reporting. We are

aware that our key stakeholders (financial publics,

investors, business partners, users of our prod-

ucts, local communities, and decision-makers) are

also interested in our achievements in the field of

sustainable development.

Therefore in addition to the annual report, this

year we decided to also prepare a sustainability

report. The fundamental, but also closely interre-

lated, pillars of sustainable development are busi-

ness excellence, environmental responsibility and

social integration. In designing this sustainability

report, we followed these three segments.

Although the industry of household appliances con-

tinues to face lower demand as a result of the global

economic crisis, we at Gorenje can proudly an-

nounce the following achievements of the year 2013:

• our core activity revenue remained at roughly

the same level as in 2012 (EUR 1.07 billion) and

we succeeded in increasing our market share

from 4.00% to 4.26%. This increase was pro-

pelled in part by our new products such as the

new generation of refrigerator freezers, which

were warmly welcomed by the consumers;

• the kick-off of our strategic partnership with

the Panasonic Corporation, i.e. a corporation

with a strong commitment to investing in green

innovation;

• the completed process of the relocation of

manufacturing operations and consequent

restructuring;

• the acquisition of fresh capital and new inves-

tors and the cross-listing of Gorenje stock on

the Warsaw Stock Exchange.

We expect that our business operations will be

positively affected by the results of other carefully

planned activities we had implemented in the previ-

ous years with a view of improving our performance.

Primarily by implementing changes in technological

processes, the organisation of operations and the

responsible management of hazardous chemicals

and packaging, we achieved significant improve-

ments concerning the environmental aspects of our

operations over the period from 1997 to 2013. A

substantial amount of effort and resources are de-

voted to occupational safety and health promotion.

In some areas, we have thus achieved results that

leave no room for any significant improvement.

Nevertheless, we continue to set for ourselves

new goals, as we wish to minimise the impacts of

our operations on the environment.

For the year 2014, we are planning to intro-

duce the EMAS system to our manufacturing

plant in Valjevo, Serbia. In the next two years,

investments in technological processes and the

introduction of the cogeneration of heat and

power will result in a significant reduction to elec-

trical power consumption.

We at the Gorenje Group are aware that sus-

tainable development is crucial for business suc-

cess. Therefore, the central focus of the updated

strategy for growth 2014 - 2018 is precisely on

the growth of sustainable value for users, share-

holders and employees.

We intend to continue the practice of sustaina-

bility reporting as introduced with this report, thus

increasing the transparency of our operations.

We will attempt to promptly embark on the path

towards comprehensive and integrated reporting

on our operations, which will be distinguished by

closer intertwining of key financial and non-finan-

cial information.

You are kindly invited to continue reading!

franjo Bobinac

President of the Management Board

1.2 Report by the President and CEO

We at the Gorenje Group

follow our vision of becoming

the world's best in design-

based innovations in the field

of products for the home. We

create innovative, technically

excellent and design-inspired

products and services that

offer simplicity of use to our

customers.

In their manufacture, careful

attention is paid to the efficient

use of resources during all

stages of the production

process.

While updating the Gorenje

Group strategic plan for

the period 2014 - 2018 last

autumn, we also discussed the

methods of our work, mutual

cooperation, our behaviour

in relations with customers,

business partners and owners,

and our attitude towards

our broader society and the

environment.

15


Through the vision, mission and values thus set,

we also comprehend our approach to achiev-

ing sustainable development. Its fundamental

pillars are business excellence, environmental

responsibility and social diligence. They are

closely intertwined, so it is impossible to report

on achievements in one field (e.g. business)

without considering and comprehending the

achievements in other fields (e.g. environmental

and social).

The present sustainability report has also been

prepared in such a manner. We are aware of

the importance given to achieving sustainable

development by our key shareholders (financial

publics, investors, business partners, local com-

munities, decision-makers and users). There-

fore in addition to the annual report, we have

decided to also prepare a sustainability report.

In the following chapters, we report on the

economic (business), environmental and social

impacts of our operations. The report focuses

on the data of the companies engaged in

the core activity - the home segment. Where

substantively relevant, the data or the results of

the companies from the Portfolio Investments

segment are also provided.

We intend to continue the practice of annual

sustainability reporting as introduced with this

report, thus increasing the transparency of our

operations, mainly in the sense of closer integra-

tion of data on financial and non-financial results

of our operations in the direction of comprehen-

sive reporting.

Additional information:

Corporate Identity and

Communication Gorenje Group

E: [email protected].

1.3 Gorenje and sustainable development

In the Gorenje Group, we

have set clear goals for the

implementation of the business

strategy:

• we have identified

responsibility and innovation as

our core values,

• in achieving our mission, we

have focused on our users,

• and we have a vision of

becoming the world's best in

design-based innovations in the

field of products for the home.

environmental responsibility

Business results

(revenue, generating value,

market shares, etc.)

Innovative

employees

(education

and training,

innovative

environment)

Innovative

products

(design, environmental

friendliness, safety,

quality)

Innovative production

processes

(reduced consumption of

water and energy,

reduced amounts

of waste)

Satisfaction of users,

owners and employees

Business excellence

Social diligence

Diagram 2: Pillars of sustainable

development at Gorenje Group

16


Striving for safety and for the effective manage-

ment of natural resources is the central focus at

all levels of our sustainable operations:

• in achieving a responsible attitude towards

people and the environment in which we

operate,

• in ensuring the health and safety of employ-

ees at work, both in production plants and

offices, and

• in achieving production efficiency.

For a number of years, companies in the Gorenje

Group have had the certificate ISO 14001 for the

environmental management system, and the ma-

jority of companies hold the certificate OHSAS

18001 for the occupational health and safety

management system.

Two companies of the Gorenje Group have

been included in the EMAS scheme (ECO -

Management and Audit Scheme, an EU system

for environmental management of organisations),

which is aimed at promoting more appropriate

environmental management and informing the

public concerning the impacts of their activities

on the environment and is an upgrade of the

ISO 14001 system: the company Gorenje, d.d.,

(since 2004) and Gorenje I.P.C., d.o.o. (since

2007). In 2014, inclusion in the EMAS scheme

is planned for the company Gorenje, d.o.o.,

Valjevo.

1.4 Policy on environmental protection and on safety and health at work

the policy on environmental

protection and on safety

and health at work is based

on the vision and mission of

the Gorenje Group, and is

compliant with the sustainable

policies of our operations.

table 1: Environmental management system and

occupational health and safety management system

at the Gorenje Group (situation 2013)

ISo eMaS ohSaS plans for

14001 18001 2014

Gorenje, d. d., location Velenje yes yes yes

Gorenje, d. d., location Šoštanj yes yes yes

Gorenje, d. d., locationa Rogatec yes yes yes

Gorenje I. P. C., d. o. o., location Velenje yes yes yes

Gorenje I.P.C., d. o .o., location Šoštanj yes yes yes

Gorenje Orodjarna, d. o. o. yes no yes

Gorenje GAIO, d. o. o. yes no yes

Gorenje, d. o. o., Valjevo yes no yes EMAS

Gorenje Surovina, d. o. o. yes no no

Kemis, d. o. o. yes no no

Mora Moravia s. r. o., Czech Republic yes no no

Asko Appliances AB, Sweden yes no no

Gorenje Gostinstvo, d. o. o. no no no ISO 14001

17


okoljska izjava eMaSdružb Gorenje, d. d., in Gorenje I. p. C., d. o. o.,

za le to 2013

Display: Environmental Statement title page

eMaS environmental Statement for the companies Gorenje, d. d., and Gorenje I.p.C., d. o. o.,

for the year 2013

18


We provide a clear and transparent overview of

our operations, results and plans, as well as their

comparability at the national and international

level. We will therefore strive for an even more

comprehensive compliance with individual GRI

indicators.

The table below contains an overview of the

sustainability report structure and GRI indicators

by sections. It lists compliance of this report with

the standard sustainability reporting guidelines

GRI G3.1 (GRI: Sustainability Reporting Guideli-

nes, Version 3.1).

Chapter (Item) in the report page partly or fully considered general

indicators GRI G3.1 (Standard disclosure)1

1 Introduction 7

1.1 Presentation of the Gorenje Group and the company Gorenje, d.d. 7 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 4.1

1.2. Report by the President and CEO 14 1.1

1.3. Gorenje and sustainable development 15 3.1, 3.3, 3.4, 3.5, 3.6

1.4 Policy on environmental protection and on safety and health at work 16

1.5 Report's compliance with GRI guidelines 18 3.12

1.6 Key operating highlights 19

2 Central topics 23

2.1 Creating value for the shareholders: business excellence 23 2.7, 2.9

2.2 Environmental responsibility and effective management of natural resources 29 4.14, 4.16, EN3, EN8, EN16, EN22

2.3 Social diligence: generating value for users, employees and the local environment

43 2.10, EN26, LA1 (partially), LA8, LA11

3 Summary of key achievements in 2013 and plans for the year 2014 56 EC1

Acronyms and abbreviations 57

1 Global Reporting Initiative: Sustainability Reporting Guidelines. Version 3.1 (https://www.globalreporting.org/reporting/G3andG3-1/g3-1-guidelines/Pages/default.aspx).

1.5 Report's compliance with GRI guidelines

the Gorenje Group

follows the guidelines for

reporting about sustainable

development. therefore, the

contents and the structure

of our sustainability report

are compliant with the

GRI guidelines (Global

Reporting Initiative, www.

globalreporting.org).

table 2: Report's compliance with general indicators GRI G3.1

19


Additionally, the updated strategy for the period

2014–2018 addresses the unrelentingly difficult

conditions in the markets.

Some activities aimed at achieving our stra-

tegic goals, which improve our profitability and

strengthen our financial stability, have already

been carried out (e.g. restructuring of manufac-

turing operations); other activities and projects

are still in progress in accordance with the busi-

ness model.

Our key strategic goals for the period

2014–2018:

1.6 Key operating highlights

Strategy for growth

In the last two years, a number

of extensive changes took

place at the Gorenje Group. We

restructured our manufacturing

operations, divested our

furniture business which

was a burden to the Group’s

performance, reorganised

and optimised the sales

organisation, and forged a

strategic partnership with

the panasonic Corporation.

Since these activities have

a considerable effect on our

operations and performance,

we decided to update our

strategic plan.

net DeBt/eBItDa no more

than 3.0 as of 2015 and beyond

to become a

LeaDInG Man-ufaCtuReR

of home products ori-ented towards design-

based

InCReaSInG the ShaRe

of pReMIuM BRanDS to over 25%

InCReaSInG the SaLeS ReVenue

GeneRateD outSIDe euRope

to euR 180 mio

GRaDuaL IMpRoVeMent

of eBIt MaRGIn

foCuS on CoRe aCtIVItY – the home Segment –

revenue share exceeding 90% of total revenue of the Group

by 2018

GRaDuaL DIVeStMent

of portfolio companies

20


INDUSTRIAL KNOW-HOW

RANGE AND FLEXIBILITY

GLOBALISATION

DESIGN CULTURE

STRATEGIC ALLIANCESA

GLOBALLY DRIVEN

BRAND/PRODUCT

PORTFOLIO

FOCUS ON THE HOME SEGMENT

RESEARCH AND DEVELOPMENT

NICHES

DIFFERENTIATION THROUGH

DESIGN-BASED INNOVATIONS

CReatInG SuStaInaBLe VaLue

foR CuStoMeRS, ShaRehoLDeRS anD

eMpLoYeeS

opeRatIonaL eXCeLLenCe

KeY C

oMpet

enCeS

StRate

GIC D

IReC

tIonS StRateGIC DIReCtIonS

CoMpetItIVe aDVantaGeS

Gorenje Group business model geared towards our strategic goals

21


Gorenje 2013 calendar

Other Management Board members

appointed for the 2013-2018 period

Launch of refrigerator manufacturing at the new

plant in Valjevo, Serbia

Successful launch of washing machine and dryer

production relocated from Sweden to Velenje;

first offering of commercial paper

Ion Generation refrigerator freezers launched

Plus X Award for the innovative IQcook

cooking hob

Strategic partnership with the Panasonic Corpo-

ration; appointment of a new Supervisory Board

member; Management Board starts

january

february

april

May

june

july

22


Shareholders' green light for three

capital increases

Regular dishwasher production

launched in Velenje

Panasonic confirms confidence in cooperation

by investing in Gorenje equity;

updated strategic plan

New investors commit in the second

equity offering

Cross-listing on the Warsaw stock exchange

august

September

october

november

December

in euR million 2012 2013 index

Sales revenue 1,263.1 1,240.5 98.2

EBITDA 90.6 78.2 86.3

EBIT 44.9 36.3 80.9

Profit or loss before tax 14.8 -18.6 /

Profit or loss exclusive of discontinued operations 9.2 -14.4 /

Profit or loss from discontinued operations -8.9 -10.6 119.0

table 3: Business highlights in 2013

23


Achieving good business results allows us to

invest in the development of a stimulating work-

ing environment which significantly contributes

to greater responsibility and innovativeness

of employees. Improved business processes

and products resulting from responsible and

innovative efforts cultivate an enhanced sense

of environmental responsibility at the Gorenje

Group and, consequently, a greater responsibility

among users of our products.

In 2013, we continued the following activities

in accordance with the updated strategy: the

restructuring of manufacturing operations, the

focusing on products and services for the home

and the optimisation of costs. We increased

revenue in markets outside Europe and forged

a strategic partnership with Panasonic. These

activities helped us create the conditions for an

optimized profitability of operations in the coming

years.

2.1.1 Restructuring of manufac-turing operations and the sales network

In 2013, we continued the process of restruc-

turing our manufacturing operations, a process

we had started in 2012 due to cost optimisa-

tion. Due to an increased volume in production,

we built a new factory in Valjevo which started

operation in February 2013. Thus the produc-

tion of all free-standing refrigerator freezers

is now carried out in Valjevo, while built-in

refrigerators and freezers are still manufactured

in Velenje. Production of free-standing cook-

ers was relocated from Finland to our factory

Mora Moravia in Marianske Udoli in the Czech

Republic. The production of high-end wash-

ing machines and tumble dryers, as well as the

production of dishwashers was relocated from

Sweden to Velenje. The factories in Finland and

Sweden were closed down.

The completed shifts of manufacturing opera-

tions were the most challenging activities of this

kind in Gorenje Group’s history; production loca-

tion was changed for as much as 20% of all ap-

pliances produced by the Group. The full effects,

manifested as a savings of EUR 20 million in

production costs annually, will be reaped in 2014.

In the last few years, we did not restructure

only our production, but also our sales network.

The goal of these efforts was to optimise our

business models and to adapt to changes in

market circumstances. Important activities of

this kind were carried out in the markets of

France, Turkey, USA, Croatia, Slovenia, Czech

Republic, and Slovakia; their full effects are ex-

pected in 2014 when we will continue with our

restructuring activities.

2 Central topics

2.1 Creating value for the shareholders: Business excellence

Responsibility to the

shareholders and attainment

of business excellence are

the pillars of sustainable

development at Gorenje.

24


Serbia Valjevo, Stara pazova, Zaječar

Czech Republic Marianske udoli

SloveniaVelenje, Šoštanj, Rogatec

55%

15%

30%

production in the Gorenje Group

25


All segments that are not a part of the core

activity are thus treated as portfolio invest-

ments. In accordance with the strategy, we

divested in the year 2013 two companies

manufacturing kitchens and other furniture,

which had both had negative results for a

number of years.

Since the year 2011, we have been increasing

the share of our core activity in total Group revenue

and we are looking to further boost this share in the

future. In 2010, core activity accounted for 78% of

the Group’s total revenue; in 2013, it increased to

86.2%. In the last year of the implementation of the

updated strategy, revenue generated in the core

activity is planned to be over 90% of total revenue.

2.1.2 focusing on the core activity

In accordance with the

updated strategic plan, we are

refocusing on our core activity,

i.e. products and services for

the home.

an increase in the share of appliances in the Group's revenue

2006

80.9%

2018

90%

2014

86.1%

26


We will continue to strengthen the Group’s position

in Europe; however, we wish to boost our presence

in markets outside Europe as well. Our target for

revenue in non-European markets in the last year of

strategy implementation is EUR 180 million, which

is nearly twice as much as in 2013. Key non-Euro-

pean markets include Australia and the USA where

we are present with the premium brand Asko.

We entered the first such long-term strategic part-

nership with the Panasonic Corporation of Japan;

the partnership comprises business cooperation

and a capital alliance.

The business part of the cooperation is already

in progress, and it rests on two pillars. The first pillar

involves joint activities in development and produc-

tion; the second pillar involves sales in Europe,

including the possibility of joint distribution. Since

last summer, we have been producing refrigerator

freezers for Panasonic. Moreover, the production

of built-in ovens for our partner has been launched

recently as well. Development activities for the new

generation of washing machines are in progress

and they include development teams from both

partners. The production of jointly developed wash-

ing machines will be launched in 2015.

As a sign of confidence in the partnership and

of commitment to long-term business cooperation,

the Panasonic Corporation invested EUR 10 million

into Gorenje’s share capital, thus acquiring a 10.5

percent minority ownership share. The partnership

will continue to develop; in the period until 2018,

it will result in extra revenue of EUR 80 million per

year for the Gorenje Group, as well as in gradual

improvement of EBITDA in the amount of up to

EUR 20 million per year.

2.1.3 Revenue growth outside europe andhigher sales in the premium segment

2.1.4 Strategic partnership with panasonic

the Group generates the

majority of its revenue

in europe, particularly in

Germany, Russia, Benelux,

Scandinavia, and South-eastern

europe.

one important aspect of the

business model for achieving

our strategic goals is strategic

partnerships in various fields of

operation.

27


Moreover, we sought to establish a stable and

competitive supplier base in the environments to

which our manufacturing operations were trans-

ferred in the last two years.

Key priorities in the raw and processed material

cost management also include effective risk man-

agement for volatile raw material prices. In the case

of base metals, we use futures to hedge the risk of

price fluctuations. This allows us to fix the prices

through our suppliers according to the listings on

the LME futures exchange, while the agreements

are based on an immediate translation of the LME

listings to euros, which also hedges the currency

risk. The risk of changes in sheet metal prices is

hedged with price index model agreements. In

the market for plastics, there are no available tools

for long-term hedging as prices are defined on a

monthly basis due to numerous unpredictable fac-

tors in the petrochemicals supply chain. Therefore,

we seek to obtain competitive terms by including

larger numbers of suppliers and by tenders.

In 2013, we were successful in managing the

purchase prices of processed and raw materials. In

comparison to prices of input materials in 2012, net

price impact was lower/better by 0.95 percentage

point.

2.1.5 Chain of added value (supply chain)

the optimisation of the costs of

processed and raw materials relies

on an efficient management of

the supply base and raw material

risks, the rationalisation of

inventory, and a close cooperation

with the production line when

searching for suitable materials.

28


Improvement in profitability will be attained primarily

by the following activities:

- increased sales volume and geographical and

product dispersion, where we plan the following:

• the largest growth in sales volume in the

markets of Eastern Europe, Central Europe

and in the overseas markets;

• an increased proportion of the sales volume

of products with higher added value (prod-

ucts of the Atag and Asko brand, and design

lines) to 16 percent of quantity sales (in 2013,

this proportion amounted to 15 percent);

- the development of new products, primarily:

• a new generation of built-in ovens;

• an upgrade of 600 mm wide free-standing

refrigerator freezers;

• the development of a new generation of wash-

ing machines in cooperation with Panasonic;

• Asko premium washing machines and tum-

ble dryers;

- reducing the costs:

• of processed and raw materials, and

• optimising the labour costs due to the reloca-

tion of manufacturing operations.

The goal of deleveraging is to reduce the gross

financial debt by at least EUR 30 million, which we

will attain by:

- the further disposal of non-operating assets and

the potential disposal of some portfolio business

activities;

- better management of inventories;

- better management of the complexity of our

operations.

2.1.6Key goals for 2014

the key goals for the year 2014 are

improvement in profitability and

deleveraging. Below we present

briefly the key measures for each

of the goals.

in euR million 2013 plan 2014 Change (%)

Sales revenue 1,240.5 1,286.5 +3.7%

EBITDA 78.2 93.7 +19.8%

Margin, % 6.3% 7.2% +0.9 o.t.

Profit or loss -25.0 12.1 +148.4%

table 4: Key goals for 2014

29


In environmental protection, they are asserted

through open-mindedness, team spirit, respect, ef-

ficiency, goal-orientation, and engagement.

In the Gorenje Group, environmental activities are

in the domain of the Environmental Protection and

Occupational Safety and Health department that has

a consulting, supervisory, developmental and opera-

tive role. The company's management assesses

the effectiveness of the environmental management

system once a year, during the management review.

The Gorenje Group demonstrates its environmen-

tal responsibility primarily by reducing its environ-

mental impact. We have a certified environmental

management system pursuant to the ISO 14001

standard in all locations where home appliances

are manufactured. The companies Gorenje, d.d.

(locations Velenje, Šoštanj and Rogatec) and Gorenje

I.P.C., d.o.o. (locations Velenje and Šoštanj) in Slov-

enia are included in the EMAS system which repre-

sents an even higher level of corporate responsibility

to the environment. In 2014, we are planning to intro-

duce the EMAS system to our manufacturing plant

in Valjevo, Serbia. For more information on quality,

environmental protection and occupational safety

and health policy, see chapter 1.4 of this report.

2.2 Environmental responsibility and effective management of natural resources

environmental protection is

a constituent part of Gorenje

Group's corporate governance

policy and organisational

culture. therefore, our two key

values, i.e. responsibility and

innovation, have to be strongly

embedded in the very core of

our policy of environmental

protection. they consistently

guide our new strategic policies

in the pursuit of both our

corporate vision and mission

and in our day-to-day actions.

30


The following is a brief presentation of the impor-

tance of each of the key stages of the Gorenje

eco cycle.

1. Selection of input materials

Starting from the very beginnings, each

Gorenje product is developed to comply with all

legal and environmental requirements. Therefore,

the product planning stage is very important as

up to 80% of all of the environmental impact of

a product is determined at that point. The com-

position of our products differs in terms of the

materials used, depending on the type of home

appliance. However, all are made of superior and

environmentally sound and degradable materials.

2. production

Our products are made of environmentally

friendly and recyclable materials with environmen-

tally friendly technological procedures. Investing

in the modernisation of technological processes

and equipment has resulted in positive environ-

mental trends. In the period of 17 years (from

1997 to 2013), this has been shown in the reduc-

tion of the following environmental impacts at the

level of Gorenje, d.d., location Velenje:

• amount of hazardous waste by 91% per

product,

2.2.1Gorenje eco cycle

environmental aspects of

our operations are identified,

monitored and continuously

improved throughout the entire life

cycle of our products.

eco cycle can be roughly divided

into four main stages:

- input material stage,

- production stage,

- product use stage,

- recycling stage.

Diagram 3: Gorenje eco cycle - from planning to recycling

2. pRoDuCtIon

pRoCeSSS

1. SeLeCtIon

of MateRIaLS

3. uSe of

pRoDuCtS

4. ReCYCLInG

• amount of disposed waste by 76% per product,

• water consumption by 86% per product, and

• use of natural gas by 32% per product.

Detailed information for the year 2013 for the

companies entered in the EMAS register is pro-

vided later in the document.

31


3. use of products

Gorenje home appliances are designed to

meet the various needs of users with various

lifestyles. From a broader environmental aspect,

these appliances have the following advantages:

• they include components that are harmless

to the environment and one’s health, and are

almost completely recyclable;

• their operation requires less power, water,

and detergent;

• they rank among the most economical

domestic appliances in the market as they

meet and exceed the criteria for the highest

energy classes, as specified by the relevant

European standards;

• noise level during operation is at the lowest

possible level;

• entire technological development and im-

provements are adapted to the requirements

of environmental protection and respect for

the general social interests.

The following is general information that ap-

plies to the Gorenje Group. Detailed information

for the companies entered in the EMAS register

is provided later in the document.

4. Recycling

As early as in the stage of product planning,

we consider the very last stage of its life cycle

when it is no longer in use. Therefore, the very

first steps in Gorenje product development also

include a consideration of the requirements of

product handling after the end of its useful life

when it is discarded as waste. Our products are

planned and produced to allow simple disas-

sembly and recycling in the last stage of their life

cycle. We seek to incorporate in the products as

few versions of the same material as possible,

thus reducing the need for waste separation in

the recycling process. The products are made of

materials and components that are at least 80%

recyclable.

Recycling of materials allows us to reduce the

amounts of waste and the need for production

of base materials (such as metals), which re-

quires a lot of energy, and results in emissions of

harmful substances. Recycling procedures can

reduce the use of natural resources as waste

plastics and metal can be reused in a variety of

production processes.

These characteristics of the eco cycle of

Gorenje products apply to all companies in the

Gorenje Group. The environmental aspects and

impacts identified and presented below, how-

ever, only pertain to the two companies entered

into the EMAS register.

.

32


Environmental protection is a constituent

part of Gorenje Group's corporate governance

policy and organisational culture. Therefore, all

strategic guidelines and policies in communica-

tions and cooperation with the stakeholders

also pertain to environmental issues and issues

related to occupational health and safety. The

following are the key policies for communica-

tion and cooperation with particular groups of

stakeholders, with emphasis on environmental

communication.

ShareholdersGenerating value for the shareholders is a

fundamental goal of the operation and manage-

ment of any public limited company. Successful

performance and strategic growth generate the

long-term value of the shareholders' investment.

We strive to consolidate shareholder confidence

by regularly reporting on events at the company

and anything related to it, including the relevant

environmental issues.

another aspect of the responsible

and sustainable practices of

the Gorenje Group is also the

transparent communication with

its stakeholders.

Shema 4: Ključni deležniki družbe Gorenje, d.d.

in Skupine Gorenje

The Corporate Governance Policy of Gorenje,

d.d., which pertains to both the said company

and its subsidiaries which, along with their par-

ent company, comprise the Gorenje Group, also

specifies the groups of stakeholders and the

strategy of communication and cooperation with

them.

2.2.2 environmental communication

gorenjegroup

gorenjegroup

gore

njeg

roup

general public

political public

pres

sure

gro

ups

competition decision-m

akers governm

ent

shareholders

publ

ic e

xper

ts

med

ia local community

business partners

nves

tors

employees retailers

con

sum

ers

CustomersCustomers (both direct, i.e. distributors and

wholesalers, and end users) are the key to com-

pany operations; without increasing the sales

of our products, the pursuit of the other goals

of our operations is threatened. Education and

awareness are two major values in our relation-

ship with the customers. A variety of promotional

materials with information about our products is

prepared for the purpose of communication with

our customers. An important aspect of these

materials is the information on our efforts in envi-

ronmental protection throughout the life cycle of

our products: from planning, through production

and use, to handling after their useful life.

33


employeesOne important purpose of communication

with our employees is to inform them about the

mission, vision, values, and strategy of the com-

pany, as well as about the environmental protec-

tion and occupational health and safety policies,

to include the employees into such policies, and

to implement these policies.

Environmental communication is an impor-

tant component of internal communication at

the Gorenje Group.

Key communication channels, activities, and

internal environmental communication projects

at Gorenje include the following:

• a system for the submission of and reward-

ing for beneficial proposals called Iskrice

(Sparks),

• “the 20 keys system”,

• communication through in-house newsletters

(the weekly newsletter Info.G and the Pika na

G newsletter) which inform employees about

events and policies in environmental protec-

tion and occupational health and safety,

• communication through coordinators for

environmental protection and occupational

safety and health,

• online internal communication via the In-

tranet, particularly the Environmental Protec-

tion Portal and the Occupational Health and

Safety Portal.

Regular and periodical training and education

are also an important part of communication

and cooperation between the employees in

the field of environmental protection and oc-

cupational health and safety; in 2013, it was in

progress consistently with the annual plans.

SuppliersWe seek to establish long-term partner-

ships with our suppliers, based on the principle

of a continuous revision of their competitive

advantages. In a dynamic procurement environ-

ment, this allows us to secure safe and reliable

sources, reasonable prices for the products

supplied and services rendered, and a level of

influence on the supplier's quality. Key criteria

for the selection of our suppliers already include

some criteria regarding their environmental per-

formance; this aspect will be developed further

in the future.

financial analystsThe opinions of financial analysts affect other

stakeholders, either directly or through the

media. Occasionally, key information communi-

cated to the financial analysts may also include

important information on the environmental

aspects of our operations.

Local communitiesCorporate social responsibility is a key

pillar of Gorenje's responsible conduct and it

coincides to a great extent with the efforts to

protect the environment, both in production

processes and in our broad operations at the

local, regional, national, and international level.

Our attitude towards the importance of envi-

ronmental protection also affects the strategic

choice of projects and organisations supported

with donations and sponsorships.

the mediaThe media is a key link between Gorenje

and the general public. Therefore, we manage

proactively our relations with both Slovenian and

international media outlets in order to provide

timely and quality information, to respond to the

public’s desire for open communication, and to

establish and maintain successful relations with

the media and, through the media, with other

groups of stakeholders. We choose and shape

with care the topics to be relayed to the media,

thus co-creating the media stories of which the

environmental aspects of our operations are an

important component.

34


The analysis of environmental aspects includes

all stages of the production process, products,

and activities, both in normal operation and

in operation under extraordinary conditions or

states of emergency.

The following criteria are applied to identify a

particular aspect:

• environmental policy and legal requirements;

• opinion of interested parties;

• risk assessment;

• the Group’s own assessments, and

• assessments pertaining to extraordinary

conditions and states of emergency.

In assessing the environmental impacts which

include every change to the environment, either

favourable or detrimental, resulting in part or en-

tirely from the activities, products, and services

being produced or taking place at the Gorenje

Group, the following has been considered:

• direct impact, i.e. direct results of the compa-

nies' own activities over which the companies

have direct control; and

• indirect impact, i.e. the effects caused directly

by other parties, the occurrence, scope, and

the nature of pollution which, however, may

be affected by our activities (e.g. use of our

products, logistics, power production, etc.).

2.2.3 Identified environmental aspects

elements of activities, products,

and services which interact with

the environment are referred to,

in the majority of the Gorenje

Group companies (particularly

in those holding the ISo 14001

certificate and/or entered in the

eMaS scheme), as environmental

aspects.

Diagram 5: Criteria for identification of environmental

aspects at the Gorenje Group

anaLYSIS of

enVIRonMentaL

aSpeCtS -

CRIteRIa

enVIRonMentaL

poLICY

LeGaL

ReQuIReMentS

StaKehoLDeRS'

opInIonS

RISK

aSSeSSMent

the GRoup’S

oWn

aSSeSSMent

aSSeSSMent

(extraordinary

conditions)

35


Diagram 6: Identified environment aspects

of operation of Gorenje Group companies

Framework and operative environmental targets

and programmes have been defined for major

environmental aspects and the identified envi-

ronmental aspects are being adapted in compli-

ance with the legislation (raw materials, emis-

sions into air, water, and ground, noise, waste,

etc.) and environmental policy. The Gorenje

Group is also monitoring the use of energy

resources that represent a vital part of environ-

mental protection for the holders of the Integrat-

ed Pollution Prevention and Control Permit.

In 2013, environmental aspects were fully as-

sessed at the Gorenje Group. Following the

changes to the legislation and organisational

changes in the company, they were reassessed;

however, no changes were required to the Envi-

ronmental aspects registry.

IDentIfIeD

enVIRonMentaL

aSpeCtS

of ouR

opeRatIonS

eneRGY

ReSouRCeS pRoDuCtS

otheR

eMISSIonSWaSte

RaW

MateRIaLS

36


Input enVIRonMentaL aSpeCtS output enVIRonMentaL aSpeCtS otheR

1. RaW MateRIaLS 2. eneRGY ReSouRCeS

3. otheR 4. eMISSIonS 5. WaSte 6. pRoDuCtS 7. otheR (General)

• sheet metal

• non-metal and metal compo-

nents

• chemicals

• heat and sound insulation

• rubber and plastic semi-products

• packaging

• electric power

• thermal energy

• natural gas

• compressed air

• water

• office supplies

• additional material

• emissions into air

• emissions into soil

• noise emissions

• emissions into water

• technical wastewater

• cooling wastewater

• utility wastewater

• sewage system

• light pollution

• odours

• hazardous waste

• waste packaging

• municipal/communal

waste

• other non-hazardous

waste

• product/service

• parts from our own

production

Special characteristics of the

area, e.g.:

• natural heritage, biotic diver-

sity, Natura 2000;

• cultural heritage.

table 5: Detailed overview of identified and assessed enviro-

nmental aspects of the operation of Gorenje Group companies

This general table lists a comprehensive set of

environmental aspects. The sets of environmen-

tal aspects monitored at individual companies

are specific according to their activity and their

interactions with the environment.

37


In some areas, we have thus achieved results

that leave little room for any significant improve-

ment. As is evident from the table, we have

reduced the quantity of hazardous waste by 91

percent and water consumption by 86 percent.

However, we will continue to set ourselves goals

to further reduce our environmental impact.

In the following two years, we are planning

to reduce electrical power consumption as a

result of the implementation of the planned

investments in technological processes and the

introduction of CHP units (Cogeneration of Heat

and Power), which will result in increased natural

gas consumption. In the cases of other en-

ergy resources, we will attempt to maintain the

already-attained level of consumption.

2.2.4 effective resource management

the Gorenje Group achieved

significant improvements in the

environmental aspects of its

operations during the period

from 1997 to 2013, primarily

by implementing changes in

technological processes, the

organisation of operations and

ensuring responsible management

of hazardous chemicals and

packaging.

aspect unit 1997 2013 Ratio target

1997 / 2013 2014

reducing the quantity of

hazardous waste kg/piece 0.55 0.05 - 91 % /

waste for disposal kg/piece 1.14 0.27 - 76 % /

effective use of energy resources

water consumption m3/piece 0.56 0.079 - 86 % 0.078

electric power consumption kWh/piece 21.41 24.03 + 11 % 24.00

compressed air consumption m3/piece 21.37 13.67 - 36 % 13.50

natural gas consumption (excl. cogeneration) Sm3/piece 1.93 1.32 - 32 % /

natural gas consumption Sm3/pieces 1.40

table 6: Reducing the quantity of waste and the consump-

tion of energy resources at Gorenje, d.d., location Velenje

38


At the Gorenje Group, pursuant to our environ-

mental protection policy, long-term and annual

goals are specified for each manufacturing plant,

which also pertain to managing the environmen-

tal aspects of our operations. The key environ-

mental aspects for individual companies, which

are presented in detail below, are as follows:

• reduction of waste generation,

• reduction of water consumption, and

• effective use of energy resources.

Group companies have currently hold all the re-

quired environmental permits. They are regularly

controlled by the national inspection agencies

and their operations are compliant with environ-

mental legislation.

2012 2013 target 2014

Quantity of disposed waste (t) 35.5 1.85 /

2012 2013 target 2014

Quantity of disposed waste (t) 537.5 58.9 /

2.2.4.1

Reduction of waste generation

The quantity of waste disposed in 2013 at Gorenje, d.d., was significantly reduced in comparison with

2012, due to reduced production at the Rogatec plant and to changes in waste management legisla-

tion. Namely, the relevant ministry is preparing an amendment to legislation governing the management

of waste, particularly municipal waste.

Not all of the companies have set identical goals, so the emphasis is on key achievements. Waste

management goals for 2014 have not been set in those companies where waste generation has

already been optimised in the previous years.

Similarly, the quantity of waste disposed in 2013 at Gorenje I.P.C., d.o.o., was significantly reduced

in comparison with 2012, due to changes in waste management legislation.

table 7: Quantities of disposed waste at

Gorenje, d.d., location Velenje

table 8: Quantities of disposed waste at

Gorenje I.P.C., d.o.o.

39


Water consumption is being reduced through the implementation of technological lines and

water-saving rinsing, the maintaining of water consumption records, systematic water consumption

monitoring, and employee awareness promotion. Water consumption is monitored with counters

located at the entry to the company and at particular manufacturing lines.

The following contains information on water consumption, calculated per product unit in each of

the manufacturing plants; these, however, may differ from each other due to different technological

procedures.

unit 2012 2013 target 2014

Water consumption m3/piece 0.085 0.079 0.078

unit 2012 2013 target 2014

Water consumption l/€ NR* 1.463 1.423 1.420

2.2.4.2

Water consumption

table 9: Water consumption at


table 10: Water

consumption at Gorenje I.P.C., d.o.o.

At Gorenje, d.d., we have reduced water consumption from 186,092 m3 in 2012 to 158,355 m3 in 2013.

At Gorenje I.P.C., we have reduced water consumption from 1.942 l/€ NR in 2010 to 1.423 l/€ NR

in 2013.

* measurement unit relevant to environmental aspect per EUR 1.00 of net revenue

40


unit 2012 2013 target 2014

Water consumption per product m3/piece 0.107 0.103 0.095

unit 2012 2013 target 2014

Water consumption per product m3/piece 0.036 0.046 0.045

enota 2012 2013 Cilj 2014

Electric power consumption kWh/piece 24.98 24.03 24.00

enota 2012 2013 Cilj 2014

Electric power consumption kWh/€ NR* 1.463 0.138 0.133

table 11: Water consumption in the manufacturing

company Mora Moravia s.r.o. in the Czech Republic

table 12: Water consumption in the manufacturing

company Gorenje, d.o.o., in Valjevo in Serbia

table 13: Electric power consumption at


table 14: Electric power consumption at

Gorenje I.P.C., d.o.o.

At the company Mora Moravia, we have reduced water consumption per product from 0.247 m3/

piece in 2009 to 0.103 m3/piece in 2013.

At the company in Valjevo in Serbia, water consumption per product has increased from 0.036 m3/

piece in 2012 to 0.046 m3/piece in 2013. The increase in water consumption relative to 2012 is a

result of increased capacities in the production of refrigerator freezers (since early 2013, we have had

two plants in Valjevo), accompanied by the introduction of new technologies.

2.2.5electric power consumption

*measurement unit relevant to environmental aspect per EUR 1.00 of net revenue

41


unit 2012 2013 target 2014


unit 2012 2013 target 2014


table 15: Electric power consumption in the manufacturing

company Mora Moravia s.r.o. in the Czech Republic

table 16: Electric power consumption in the manufacturing

company Gorenje, d.o.o., in Valjevo in Serbia

The increased electric power consumption in the production plant in Valjevo in 2013 is a result of the

construction of another production plant and the introduction of new technologies.

Improvements in production processes and careful management of natural resources contribute

to the lower environmental impact of our companies' activities and, at the same time, allow us to

optimise costs and generate value for shareholders.

therefore, we will continue carrying out the following activities in the future:

• monitoring and measuring environmental aspects, including appropriate measures in case of any

deviations;

• planning and implementing new technologies and products in accordance with environmental

protection principles;

• using such materials and components that will comply with the strictest domestic and foreign

environmental standards;

• planning new products in compliance with the requirements of environmental design which inclu-

des the entire useful life of a product: from development through production, to use and waste

management after the expiration of its useful life;

• reducing the volume of generated waste and rationalising the use of energy resources,

• educating, training and raising awareness of employees and partners about their responsibility to

the working and broader environments;

• cooperating with interested internal and general publics in order to contribute to the success of

joint efforts in environmental protection and occupational health & safety;

• informing the public about our achievements in environmental protection.

42


2.2.6 Carbon footprint

Climate change has been recognised as one of the greatest threats facing humanity. It is caused by

CO2 emissions into the atmosphere, which are not decreasing despite numerous international agree-

ments. Most CO2 emissions result from the production of electricity, industry, agriculture, traffic and

logging.

Although the activities of Gorenje Group companies do not cause significant amounts of CO2

emissions, as part of our orientation towards sustainability and our environmentally responsible prac-

tices, we monitor them carefully and still try to reduce their levels.

CO2 emissions into the atmosphere are monitored at the parent company Gorenje, d.d., in loca-

tions in Velenje, Valjevo and Stara Pazova. The following is a summary of data on emissions at the

location in Velenje.

Co2 eMISSIonS

2010 2011 2012 2013 target 2014

CO2 emission (kg/product) 12.58 12.50 12.33 12.26 12.14

table 17: Data on CO2 emissions for location Velenjee

43


The third pillar of sustainable development of the Gorenje Group is the generation of value for users,

and the responsibility towards employees and the local environment in which we operate. Our princi-

pal concern is to create a stimulating working environment which encourages employees to responsi-

bility and innovation, which are fundamental values in our work.

2.3 Social diligence: generating value for users, employees and the local environment

In this pursuit, we are focusing on the areas that

ensure the competitiveness of our products and

services, as follows:

• technological innovations that simplify users'

lives;

• carefully thought-out and advanced designs;

• the energy efficiency of the products;

• new materials that improve the functionality of

the products while reducing the burden to the

environment.

The key trends in the home appliances industry

that dictate the development activities in the

Gorenje Group include the efficient use of electri-

cal power and water.

In 2013, we completed the development of

a new generation of free-standing refrigerator

freezers with a width of 60 cm and height of 1.85

metre, which were well-received by the custom-

ers. The majority of development activities in

cooking appliances were related to the develop-

ment of the new generation of premium built-in

ovens. Two versions, differing by height (45 and

60 cm), three levels of control interfaces, steam,

microwave, and convection cooking technology,

and large oven capacity are the basic character-

istics of the new innovative platform.

We also developed in 2013 a new platform

for large capacity washing machines and tumble

dryers for the household and professional market

(WMD80). One special feature of these applianc-

es is their compact design: despite the smaller

outside dimensions, their capacity is the same as

that of their competition. Another highly challeng-

ing project in 2013 was the development of the

second generation of heat pump technology for

the A+++ energy class tumble dryers.

Our development efforts were also focused

on improvements in the field of energy efficiency

and on the development of a new generation of

professional dishwashers.

In heating systems, the key development

challenge was energy efficiency. In 2013, we also

completed the development of the new genera-

tion of medium capacity domestic hot water heat

pumps. The low-temperature version of the heat

pump allows capturing air outside the building as

the heat pump can operate at temperatures as

low as -7°C.

2.3.1 Responsibility towards the users

the key goal in the development

of every new appliance is a

happy user. therefore, we seek

to understand the habits and

the needs of our customers in

a number of markets, and to

anticipate the trends affecting

their purchase decisions.

44


In 2013, the Gorenje Group received numerous awards for their products, proving that our employees are doing a good

job and that our products are greatly appreciated by the customers.

9th Jan 2013 Gorenje iChef+ oven won the German Design award.

31st Jan 2013 Gorenje won the Best Buy award in Croatia.

8th Mar 2013 For the seventh consecutive year the Gorenje brand is the recipient of the trusted Brand award.

12th Mar 2013 Gorenje wins five prestigious red dot awards for 2013.

17th Apr 2013 Gorenje Orodjarna wins three forma tool awards.

06th Jun 2013 Gorenje wins two plus X awards 2013 for the induction hob IQcook.

18th Jun 2013 Gorenje wins the highest innovation awards in the region.

17th Sep 2013 Gorenje wins golden and silver CCIS award for innovations.

After-sales services are an important element of generating value for our customers. In order to improve their efficiency,

we integrated the servicing for the Asko and Upo brand with the Gorenje Group in 2013 and established a uniform stock

of spare parts for the brands Gorenje, Asko, Mora, Upo, and Körting, with spare part supply and distribution for all service

technicians around the world. Thus, we optimised the stock and the supply chain for spare part operations. Moreover,

we standardised technical support and service technician training for the brands named above, and established uniform

technical support for Gorenje sales units and other partners providing servicing of the brands named above. Namely,

users placed significant importance on the accessibility and efficiency of servicing, as they desire high-quality and timely

repair services in case of malfunctioning appliances.

45


Employee innovation is crucial for the goal

of sustainability of the Gorenje Group and is

incorporated in all three pillars of the sustainable

development: business excellence, environmental

responsibility and social care. It is essential if we

wish to create high-quality, safe, and environment-

and user-friendly products, and at the same time

generate value for shareholders. Therefore, we

make significant investments into the education,

training, and professional and personal develo-

pment of our employees.

Hence, we have established the "Sparks"

("Iskrice") system intended to capture, discuss and

process, and award innovative proposals submit-

ted by our employees with regard to products,

work procedures, and working conditions. The

system is well established and it has experienced

the cooperation of many employees. A material

reward is most often not the key motivation; rather

recognition within the working environment by

co-workers, and the awareness that an individual’s

knowledge and experience have solved a particu-

lar problem and improved company performance,

are considered more important.

As the production process is carried out in

numerous Gorenje Group companies, special

attention is paid to caring for the employees'

safety and health. Occupational health and safety

is a constituent part of Gorenje Group's corporate

governance policy and organisational culture.

2.3.2Responsibility towards the employees

We are operating in a mature

industry where the only way to

a winning performance is know-

how, innovation, as well as loyal

and devoted employees. for

Gorenje, each employee matters.

therefore, caring for their fair

and equal treatment is our

fundamental principle.

46


Most employees (60.5%) are still employed at companies in Slovenia. The greatest number of

employees outside Slovenia are in Serbia and the Czech Republic where we operate both sales and

manufacturing companies.

In the year 2014, we plan to maintain the number of employees at the 2013 level.

2.3.2.1

number of employees

31.12.2012 31.12.2013

number percentage number percentage

Skupina Gorenje 10,744 100.0% 10,410 100.0%

Home 9,556 88.9% 9,166 88.0%

Ecology 636 5.9% 654 6.3%

Portfolio investments 552 5.1% 590 5.7%

employed in Slovenia 6,730 62.6% 6,301 60.5%

employed outside Slovenia 4,014 37.4% 4,109 39.5%

table 18: Number of employees at the Gorenje Group

In 2013, the Gorenje Group

companies had 10,410 employees.

In 2013, the number of employees

at the Group decreased compared

to 2012, especially due to the

restructuring of manufacturing

operations and the related shifts

of production, as well as due to

the divestment of two companies

in the furniture manufacturing

segment.

47


Diagram 7: Work performance analysis

process at the Gorenje Group

employee's competence analysis

assessment of goal achievement

Setting future goals

Supervisor's support in attainingthe set goals

• the analysis of employee competence;

• the evaluating goal accomplishment and set-

ting new goals, and

• the continuous monitoring and support by

the supervisor in the pursuit of the activities

stipulated for each employee.

Below we present in detail our policies in the

field of the management of competence and

monitoring of work performance, as well as the

results in 2013.

performance evaluation and annual review

Performance evaluation has been conducted

at the company for 8 years. In 2013, it was

refurbished and updated, and a fundamental

competence profile of a Gorenje Group em-

ployee and leader competence profile have

been made for all Gorenje Group employees.

This promotes the responsibility and commit-

ment of the employees to the attainment of the

designated goals, as well as to their personal

development, which constitutes one of the key

values of the Gorenje Group.

accordingly, we have extended and up-

graded the form for conducting the annual

review, during which the supervisor:

• assesses the attainment of the employee's

goals;

• coordinates and writes the employee's goals

for the next period;

• assesses the employee's competence in the

current workplace;

• specifies activities for the development of the

employee's competence,

• assesses the employee's overall work per-

formance, and

• establishes the employee's desires for further

personal and career development.

In the strategic project ‘Improvement of internal

communication and conducting of annual

reviews’, our goal is to see all employees at the

company Gorenje, d.d., attend an annual ap-

praisal with their direct superior in 2014. To this

end, we started to inform the supervisors in the

second half of 2013 about the revised perform-

ance evaluation process and to train them for

conducting the annual appraisals.

When conducting annual reviews, the supervi-

sors will soon have assistance offered by IT

support for annual maintenance.

.

2.3.2.2

Competencies and monitoring of the employees' work performance

the fundamentals of the

performance management

process at the Gorenje Group are

the following:

48


Leadership competenciesWe are aware of the importance of success-

ful supervisors; therefore, we designed in 2013

the competency model for supervisors (GOR-

VOD) where we use three managerial compe-

tencies to describe the supervisors' behaviour at

the Gorenje Group. Namely, a supervisor exhib-

its at work certain business behaviours neces-

sary for his or her success: concrete, noticeable

behaviours that allow the supervisor to attain

strategic, organisational and personal goals, and

reflect the company's values. They represent the

foundation for the successful performance of

supervisors' work today and in the future.

Managerial competencies are described, as-

sessed and developed in all employees acting

as superiors to other employees. The as-

sessment of the supervisor's competency is

prepared by the head of an organisational unit or

work group and includes the assessment of the

supervisor's performance in:

• planning and decision making;

• business relationship building and coopera-

tion, and

• performance management and developing

employees.

The assessment is used in the annual review

and as a basis for designing training and devel-

opment programmes for supervisors in accord-

ance with their development needs and the

organisation's policies.

pLannInG and DeCISIon MaKInG

BuSIneSS ReLatIonShIp BuILDInG and CoopeRatIon

• development of high quality business goals

• efficient allocation of resources• timely and responsible decision-making• respect for the principles of health and

safety at work

• building long-term business relations• developing a supportive environment for

cooperation and creativity • leadership in accordance with the values

and ethical standards of the company

peRfoRManCe ManaGe-Ment and eMpLoYee DeVeLopMent

LeaDeRShIp CoMpetenCIeS of the GoRenje GRoup

• clear and understandable setting of goals and priorities

• monitoring of work, providing feedback and rewarding

• identifying and developing employee potential

Gorenje Group values

ReSponSIBILItY

goal orientation

commitment

InnoVatIon

open-mindedness

team spirit

efficiency

respect

49


Website My Career pointModern communication tools and IT support

nowadays allow for fast data transmission.

Therefore, the HR department of the company

Gorenje, d.d. has decided to establish a website

called My Career Point at the Gorenje Portal.

On the My Career Point website, each employee

of Gorenje, d.d. can create a professional profile

to share with the company their knowledge, skills

and professional ambitions. Thus we have up-

dated HR information at all times, which enables

us to search more efficiently for the most suitable

candidate for a specific position. Employees with

a professional profile have a better chance to ob-

tain the position they are interested in. In today's

world of rapidly changing requirements for differ-

ent types of knowledge and skills, this allows us

to identify our employees’ talents more effectively

and manage them with more success.

The website My Career Point consists of three

applications:

• My profile – a web application used by

employees to share with the company

information about their knowledge, skills

and professional ambitions.

• Job vacancies – a web application that lists

currently vacant job positions and allows

employees to apply for these positions.

• Looking for new challenges - a web ap-

plication that allows employees to express

their desires for new challenges and op-

portunities.

Since August 2013, all internal vacancy notices

have been advertised through this website, and

over 200 employees have created their profes-

sional profile.

In 2014, we are planning to further promote

the application, as we wish to increase the

number of employees who will create profes-

sional profiles.

50


Every year there is a growing number of em-

ployees participating in education programmes,

with emphasis on leadership, quality, change,

technology, and foreign languages. Particular at-

tention is paid to younger, promising employees.

The Corporate University consists of training

programmes at three levels. Executive Business

Academy Gorenje is intended for the Group’s

top management; talented and key employees

are included in the Management Academy

Gorenje which has a tradition dating back over

20 years; and in 2013, the first generation grad-

uated from the new training programme called

International Business Academy Gorenje, in-

tended for employees at associated companies

and subsidiaries both abroad and in Slovenia

and focused on international business. All three

programmes involve cooperation with lecturers

and international experts on particular business

fields, with the business school IEDC Bled, and

with the Faculty of Economics in Ljubljana.

In 2013, particular attention was paid to ex-

pert and professional training which accounts for

as much as 85% of all training hours. We held

practical on-the-job training that prepared the

employees for working with and adapting to the

changes in requirements following the relocation

of manufacturing operations. We carried out a

number of training seminars for the development

and implementation of the “lean manufacturing

system.” Manufacturing operations relocations

also required hiring and training more experts

in development, technology, and other support

expert services. We also held internal training

on quality, occupational health and safety, IT

and computer science, and language training.

Moreover, we held a top management seminar,

the master assembler school, and mentor train-

ing programmes.

Our manufacturing company in the Czech

Republic holds mandatory training and educa-

tion programmes intended to improve specific

aspects of knowledge and training required

in some professions as a result of changes in

legislation.

In 2014, training programmes for leadership

skill development for all levels of the hierarchy

will be organised within the Corporate University,

and the 25th generation will complete their stud-

ies at the Management Academy.

2.3.2.3

education and training

power relies on knowledge.

therefore, we continuously strive

for educational and professional

training for our employees.

our education is based on

the principle of a "learning

organisation".

51


The Gorenje Group has had a longstanding tradition of granting scholarships. This allows us to

have a successful approach towards the development of human resources in expert areas that are

of key importance for the implementation of the development and business strategy of the Gorenje

Group.

In 2013, the parent company granted 23 scholarships, of which 15 were scholarships to new

recipients and 8 were scholarships to existing recipients who are continuing their studies at the 2nd

stage of the Bologna system (the Master’s degree). There are a total of 114 scholarship recipients at

the company, of which over 94% are educated in technical programmes.

At the parent company, we continued to pursue the policy of the selective hiring of employees with

specific knowledge and skills.

The emphasis remains on employees with technical skills as they have been in high demand in

the market for a number of years; their inflow is secured with scholarships, internships or practical

work for students, and a range of intriguing topics for graduation papers.

We also hired employees in other fields; candidates were primarily sought within the company

and among the scholarship recipients. Candidates with specific skills not available within the Group

were also sought beyond the Group.

In November 2013, we temporarily hired a large number of employees (on fixed-term

employment contracts) for the period of increased production. In 2014, we are planning to hire

technically skilled employees to work in our development department.

2.3.2.4

Scholarships

2.3.2.5

hiring

52


By implementing new safety concepts, we have

successfully mitigated workplace-related risks.

Our activities are aimed at accident prevention

and motivating a healthy lifestyle. Ergonomic

structure of workplaces has improved the

working environment in the production facilities.

The Group provides regular theoretical and

practical training to reduce the possibility of injury

among employees and to improve workplace

awareness, periodical and preventive medical

examinations, working equipment checks and

tests, and measurements of microclimate work

conditions and any potential harmful impacts.

We also regularly conduct training for preventive

measures in fire safety, fire extinguishing, rescue,

and evacuation.

Employees are informed about the importance of

occupational health and safety through various

projects. In 2013, the HR department carried

out, in cooperation with the Occupational health

and safety department (which participated in

some projects), the following health promotion

projects:

• work ergonomics: the ergonomic organisation

of workplaces by programmes in the

manufacture operations;

• sick leave team: reduced sick leave, home

calls, discussion with the employees after

returning from sick leave;

• the project ‘Health(y) for Success’ (Zdrav(je)

za uspeh): the work environment is one of the

most important living environments.

Occupational health problems include injuries,

occupational diseases, work-related diseases,

ergonomic problems and the negative effects

of stress. Concerned about safe and healthy

work, we have designed and implemented

the project ‘Health(y) for Success’, within

which we organised various activities (a

motivational brochure for employees, health

promotion lectures and workshops for

employees, lectures on the management of

stress in the workplace, etc.) to encourage

employees and to raise their awareness of

the significance of healthy living for their own

success and the success of the company.

• first aid facility: prevention and treatment.

2.3.2.6

Care for occupational health and safety

By implementing new safety

concepts, we have successfully

mitigated workplace-related

risks. our activities are aimed

at accident prevention and

motivating a healthy lifestyle.

ergonomic structure of

workplaces has improved the

working environment in the

production facilities.

53


Social dialogue is a continuous process of cooperation, negotiated agreements, and establishment

of trust between the trade union, the employees, and the employer. Major steps were taken in the

past in the field of social dialogue; in 2013, the negotiations were intensified.

We appointed a social dialogue team which holds regular meetings to exchange and compare

the positions and opinions, arguments, and expectations of both sides – the employer’s and that of

the employees. Social dialogue in 2013 included the signing of a social agreement and the launch

of negotiations concerning the revision of the collective labour agreement dating back more than 20

years; these negotiations will continue in 2014.

2.3.2.7

Social dialogue

the parent company’s business system

meets the requirements of the ISo

14001 standard, the eMaS Regulation,

and the ohSaS 18001 standard. We

have adopted the Rules of procedure

for environment Management and

occupational health and Safety which is

binding for all employees. the duties and

responsibilities of responsible persons

and employees in occupational safety

and health are laid down in the Rules

and Regulations on obligations and

Responsibilities for provision of Safe and

healthy Work.

although the health and Safety at Work

act stipulates employer responsibility for

this field, good results are only possible

through close cooperation between the

employer, the employees, and employee

representatives.

Organised recreational activities are a very important way of encouraging employees to maintain

a healthy lifestyle. The Gorenje Group organises such activities at the Gorenje Sports Recreation

Society, which is also open to the family members of employees. With this, we spread the awareness

of the significance of a healthy living style also among the family members of our employees. In 2013

the Gorenje Sports Recreation Society carried out the following health promotion projects:

• the preparation for springtime physical activities (article and presentation);

• the presentation of warm-up exercises (article and presentation);

• Gorenjada;

• organised training;

• ski courses;

• mountain hikes.

In 2014, we will measure the organisational climate at the production programmes of Gorenje, d.d.,

and in the Serbian production companies; based on the results, we will set activities to improve the

organisational climate.

54


We build good relations with the local environ-

ment in which we operate and coexist, and we

invest in it to the best of our ability, thus co-creat-

ing a pleasant living environment, as the majority

of our employees reside in the local environment.

We have supported various institutions and as-

sociations for a number of years.

We are a co-founder of the Velenje Gallery,

which is the first example of a private-public

partnership in culture in Slovenia, and one of

the most important cultural institutions in the

Savinjsko-Šaleška Valley. We are a supporter of

the international Biennial of Design, which has

had a 50-year tradition in Slovenia, and we are

the proud sponsor of the Gorenje Velenje team

handball club and the Slovenian Nordic national

team. We also support the Gorenje mixed choir

whose members include our employees, and

the Gorenje society of retired employees whose

activities spread the Gorenje culture and tradition

in the local environment.

The Gorenje Group companies pertaining to

our portfolio investments and engaged in envi-

ronmental activities are aware of the importance

of building good relationships with local commu-

nities, so they invest in the local environment to

the best of their ability.

2.3.3 Responsibility to the local environment

for sixty years, we have been

closely integrated with the

environment in which we operate.

the establishment, maintenance

and strengthening of good

relations with the local

communities in which we are

active and which we affect

with our activities, have always

been of great importance to us.

therefore, the practice of excellent

relations with local communities

is transferred to all local

communities in which the Gorenje

Group companies operate.

55


The company Gorenje Surovina supports numer-

ous humanitarian projects and makes invest-

ments in sports, culture and education. They

support the following organisations: Maribor

Lisjaki Hockey & Skating Club, Fužinar Ravne

Alpine Skiing Club, Velenje Women's Handball

Club, Olimpija Handball Club, Vuzenica Skiing

Club, AMD Nina, Spodnja Savinjska Volleyball

Club, ADK Bowling Club, S.K.I.F, Dražen Petrovič

Basketball Club, SIP Cycling Club, and Hill Street

Sports Society. Clubs and individual sportsmen

supported by Gorenje Surovina achieve excellent

results, which also contributes to the visibility and

reputation of the company as a sponsor.

On 22 April 2013, to celebrate Earth Day,

employees of the company Kemis joined the

cleaning event and cleaned the company's sur-

roundings and the banks of the Tojnica creek,

thereby contributing to a better appearance of

the local environment. In order to present their

everyday work to their family members and

residents of the local community, they organised

an open door day to show the visitors around

the premises and show them their work process.

The event was organised on 26 October.

In October 2013, the company Zeos finished

a two-year international LIFE+ project “Odločuj!”

(i.e. “Decide!”), the aim of which was to increase

the awareness of environmental issues related to

production and use of electrical and electronic

equipment (WEEE), management of WEEE, its

treatment and recovery (including reuse and

recycling), with a special focus on raising aware-

ness of households and schoolchildren in the

entire territory of Slovenia. In November 2013,

they supported workshops under the joint title

“Playful Architecture.” The workshops were

intended for students of the Art Department at

the Velenje Gymnasium, and were held at the

Velenje Gallery. Students learned about the city's

architecture and built models of Velenje out of

waste electrical and electronic equipment. At

the final event, the company Zeos presented

E-transformer, a multimedia vehicle that has solar

panels installed on the roof and presents waste

sorting and recycling in an original and interest-

ing way. They also support expert lectures and

conferences in the field of management of waste

products.

In 2013, the company ZEOS eko-sistem from

Bosnia and Herzegovina organised two WEEE

collection campaigns in Gračanica and Tuzla,

and installed containers for collection of WEEE

(small domestic appliances, batteries, lamps) in

all larger shopping centres free of charge.

56


eC

on

oM

IC

aS

pe

Ct

RESULT 2013 PLAN 2014

Sales revenue (in EUR million) 1,240.5 1,286.5

EBITDA (in EUR million) 78.2 93.7

EBIT (in EUR million) 36.3 46.4

en

VIR

on

Me

n-

ta

L a

Sp

eC

t

Waste• Hazardous waste (kg/piece)• Waste for disposal (kg/piece)

0.050.27

//

Water consumption (m3/piece) 0.079 0.078

Electric power consumption (kWh/piece) 24.03 24.00

3 Summary of key achievements in 2013 and plans for the year 2014

57


RESULT 2013 PLAN 2014S

oC

IaL

aS

pe

Ct

Co

nS

uM

eR

SProduct innovation • -completed development of the new generation of energy-saving

free-standing refrigerator freezers (width 60 cm, height 185 cm);• development of the new generation of high-end built-in ovens;• development of the new platform of washing machines and tumble

dryers with larger loading capacities for both the household and the professional market (WMD80);

• development of the second generation of heat pump technology for tumble dryers of A+++ energy class;

• development of the new generation of professional dishwashers;• development of the new generation of medium-capacity domestic

hot water heat pumps;

• development of the new generation of built-in ovens;• upgrade of 600 mm wide free-standing refrigerator freezers;• development of the new generation of washing machines in

cooperation with Panasonic;• development of Asko premium washing machines and tumble

dryer

After-sales activities • integration of servicing for the Asko and Upo brand with the Gorenje Group;

• establishment of uniform stock of spare parts for the brands Gorenje, Asko, Mora, Upo, and Körting, with spare part supply and distribution for all service technicians around the world

• provision of accessible and effective servicing around the world

eM

pLo

Ye

eS

Performance monitoring • renovation of performance assessment practice;• elaboration of the basic competency profile of employees and the

competency profile of supervisors;• supplementation and upgrading of the annual review form;

• conducting the annual review for all employees at Gorenje, d.d. with their supervisors

Education • professional training of employees (practical training at the workplace);

• implementation of training programmes for leadership skill development for all levels of the hierarchy within the Corporate University;

Safety and health at work • implementation of new safety concepts;• accident prevention and promotion of a healthy lifestyle;• ergonomic arrangement of workplaces;• theoretical and practical training;

• measuring the organisational climate in the production programmes of Gorenje, d.d., and in Serbian production companies;

• proposing activities for improving the organisational climate;

LoC

aL

en

VIR

on

Me

nt

Sponsorships and donations • offering support to various institutions and associations in local environments in which we are active;

• continuing good practices of supporting various institutions and associations in local environments.

58


acronyms and abbreviations

CO2 carbon dioxide

NR net revenue

EMAS EU system for environmental management

of organisations (ECO - Management and

Audit Scheme)

kg kilogram

kWh kilowatt-hour

LME London Metal Exchange

m metre

cm centimetre

mm milimetre

m3 cubic metre

WEEE waste electric and electronic equipment

USA United States of Americades

ign

Ma

RIn

Še

K &

Ma

RIn

Še

K,

20

14

59


60


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