Lenovo (Danmark) Aps

Ledelsesberetning

MANAGEMENT'S REVIEW Business review The company shows a profit for 2023/2024 of 26,230 TDKK and a total balance as at March 31, 2024 of 546,241 TDKK and equity of 257,310 TDKK. FY23/24 ended below management expectation in last year's Annual Report, but in line with the market development. This was main caused by a lift in Consumer business and a decline in commercial business. Company faced severe market headwinds and its revenue declined year on year, but we still successfully maintained our PC market leadership and industry leading profitability. The company's performance for 2023/24 is below management's expectation as outlined in the last year's Annual Report Expectations for the future Lenovo (Danmark) ApS will drive sales growth in the software and services business and expanding e-commerce based on its well- established infrastructure will also helo to drive new growth opportunities. Strategy remains the same and we continue with One Lenovo approach in Channel. Looking ahead at the next year, management remain cautiously optimistic. As the economy stabilizes and improves, and the commodity type of component price bottoms out, meanwhile, we continue to execute our technology-driven, service- led intelligent transformation, and are well positioned to capture the huge opportunity of the AI era. On the same level as this year, the management expect a positive result before tax for the accounting year 24/25. Capital expenditures, emloyee numbers, and financing are expected to remain steady. Unusual risks Lenovo (Danmark) ApS is assessed not to be subject to any special risks, including operating and financial risks, apart from the usual risks in the line of business. Knowledge resources Lenovo (Danmark) ApS is assessed not to have any special knowledge resources, apart from the normal knowledge resources in the line of business. Statutory Report on Social Responsibility, cf. Section 99a of the Danish Financial Statements Act Description of the business model The business model is described in section "Business activities and mission" on page 9. Lenovo Danmark is, as part of the Lenovo Group, subject to the CSR policies that are implemented across the Group. In accordance with the policies, Lenovo Danmark works actively with a range of sustainability areas and, in particular, with the environment and human rights, that are mandatory for Lenovo Danmark to disclose on following Section 99 a of the Danish Financial Statements Act. Risk assessment Lenovo’s Board and Management recognizes that risk management is the responsibility of everyone within Lenovo, and that risk is best managed when business functions take responsibility and are accountable for risk management. Lenovo’s enterprise-wide risk management program is designed to enable effective and efficient identification of, and management’s visibility into, critical enterprise risks. It also facilitates the incorporation of risk considerations into decision making. Rather than a separate and standalone process, risk assessment is incorporated as part of Lenovo’s planning processes across all major functions of the Company. During planning, all business functions are required to identify and assess material risks that may impact the achievement of business objectives." Environment & Climate Operational Risks The Group’s complex supply chain may also result in exposure to hidden and uncontrollable risks typically driven by Environmental, Social and Governance (ESG) factors, such as natural resource depletion, human rights abuses, or labor practices. For example, the legal and regulatory standards of certain countries in which its indirect suppliers operate may be less robust and therefore not sufficient to meet the regulatory standards of other countries which it sells to. Non-compliance by any supplier, whether direct or indirect, may harm the Group’s reputation and supply chain operations, or cause the loss of license to operate. Content of Policy Lenovo’s programs in this area are based on a foundation of our commitment to strong environmental stewardship and continued compliance. This includes compliance with regulatory requirements and voluntary standards established by associations and the standards organizations to which Lenovo subscribes. Lenovo’s Environmental Affairs Policy is the cornerstone for compliance across global operations, employees, and contractors performing work on behalf of Lenovo. This policy forms the foundation for Lenovo’s ISO 14001:2015 certified Environmental Management System (EMS), which includes processes for evaluating legal and voluntary requirements and ensuring compliance across Lenovo’s global design, development, and manufacturing operations. At Lenovo, we recognize that climate change is a serious threat and as such, we address it at the highest levels of our organization. At least annually the Board of Directors is briefed on climate strategy and progress towards our climate change mitigation goals. Lenovo’s Chief Legal and Corporate Responsibility Officer provides executive leadership for Lenovo’s Environmental, Social and Governance (ESG) position, including climate change programs. In addition, the ESG Executive Oversight Committee (EOC) provides strategic direction and facilitates the coordination of ESG efforts across Lenovo, including the company’s climate change strategy. The ESG EOC is comprised of senior management from across the business and functional areas and is chartered to promote a culture that encourages strong ESG performance, including compliance and leadership activities." Results (1 April 2023 -31 March 2024) Through Lenovo’s ISO 14001:2015 EMS program, we conduct a Significant Environmental Aspect (SEA) evaluation at least annually. This process evaluates the significant or material environmental aspects while identifying risks and opportunities that may impact the business or operations. To manage the SEAs, we establish relevant environmental objectives and targets with Key Performance Indicators addressing site operations, products, and global supply chain functions. The objectives and targets are monitored and measured for progress semi-annually as part of Lenovo’s ISO 14001:2015 Environmental Management System. In January 2023, Lenovo announced its commitment to achieving net-zero greenhouse gas emissions by 2050 after validation of emissions reduction targets by SBTi. Lenovo’s performance against the FY2023/24 environmental objectives and targets are reported annually in our ESG Report, Section 8.0 EMS performance, objectives, and targets. While Lenovo seeks to establish consistent reporting of objectives and targets, we reassess and adjust them periodically as part of our EMS continuous improvement process with the aim to drive dynamic growth year over year in compliance with evolving customers, standards, and other external requirements. We are encouraged by our successes and progress and recognize that there is more to be done. As we look ahead, we aim to drive environmental improvements through the FY 2024/25 EMS targets. Our long term target to reduce absolute Scope 1 and 2 GHG emissions by 50% by FY 2029/30 from a base year 2018/19 is on track. One example from our 23/24 ESG Report: In FY 2023/24, the Company purchased renewable commodities that supported 100 percent renewable energy projects consisting of wind and/or solar power in various parts of the world including Brazil, China, India, Japan, Europe, Mexico, and US. During FY2023/24, the Company expanded its renewable energy procurement for the first time to Japan. Expectations for the work going forward Our long-term emissions reduction targets have been validated against SBTi’s Corporate Net-Zero Standard, and Lenovo is committed to achieving net-zero greenhouse gas emissions by 2050. Social- and employment conditions Operational Risks The Group’s complex supply chain may also result in exposure to hidden and uncontrollable risks typically driven by Environmental, Social and Governance (ESG) factors, such as natural resource depletion, human rights abuses, or labor practices. For example, the legal and regulatory standards of certain countries in which its indirect suppliers operate may be less robust and therefore not sufficient to meet the regulatory standards of other countries which it sells to. Non-compliance by any supplier, whether direct or indirect, may harm the Group’s reputation and supply chain operations, or cause the loss of license to operate. Content of Policy As a truly sustainable company, Lenovo is committed to the highest standards of integrity and responsibility. To ensure that we adhere to international and local best practices, we have a clearly defined corporate governance structure. Regularly reviewed, it includes our: From our Sustainability Policy: The Social part of the policy includes the following subparts: Provide a safe, healthy, and enriching working environment for our employees Be a fair and responsible member of the communities in which we operate Work with our supply chain to ensure that Lenovo's values and expectations are upheld Extend the benefits of Lenovo experience, products, and successes to the communities in which we operate and contribute to their development As employees and as a company, be ethical and responsible citizens From our Equal Employment Opportunity and Affirmative Action Policy Statement: Lenovo is an equal opportunity employer. As such, it is the policy of Lenovo to comply with all applicable federal, state and local laws governing nondiscrimination in employment and to ensure equal opportunity in all terms, conditions, and benefits of employment or potential employment. Lenovo prohibits discrimination and harassment against any employee or applicant for employment because of race, color, religion, sex, pregnancy, sexual orientation, gender identity or expression, marital status, national origin, age, disability, veteran status, genetic information or any other legally protected characteristic. Actions Lenovo was included in the 2023 Bloomberg Gender-Equality Index, a framework that applies an internationally standardized approach to measure performance in female leadership, gender pay parity and inclusive culture, and distinguishes companies supporting gender equality through policy development, representation, and transparency. Results (1 April 2023 -31 March 2024) As a member of the United Nations Global Compact, Lenovo committed to the UN Women’s Empowerment Principles in 2022. Lenovo was recognized as a top-scoring company (90%) and “Best Workplace for Disability Inclusion” in the 2023 Disability Equality Index. The index recognizes companies for demonstrating leading disability inclusion practices and committing to an inclusive culture. These factors are validated through visible support from company leadership, accessible workplace and employment practices, community engagement initiatives, and supplier diversity programs. Expectations for the work going forward The Company adheres to world-class standards for workplace safety through its Occupational Health and Safety (OHS) Management System. The Company’s global manufacturing locations are ISO 9001:2015 (Quality), ISO 14001:2015 (Environmental), and ISO 45001:2018 (OHS) certified by an accredited third-party auditor. As required by these internationally accepted standards, the management of objectives and targets at each certified facility continually foster a safe and healthy work environment for employees. Through a process of planning, education, controls, performance evaluation, and continuous improvement, health and safety programs are assimilated throughout the Company’s global manufacturing footprint. Human Rights Operational Risks The Group’s complex supply chain may also result in exposure to hidden and uncontrollable risks typically driven by Environmental, Social and Governance (ESG) factors, such as natural resource depletion, human rights abuses, or labor practices. For example, the legal and regulatory standards of certain countries in which its indirect suppliers operate may be less robust and therefore not sufficient to meet the regulatory standards of other countries which it sells to. Non-compliance by any supplier, whether direct or indirect, may harm the Group’s reputation and supply chain operations, or cause the loss of license to operate. Content of Policy Lenovo supports universal human rights including those identified in the United Nations Declaration on Human Rights and commits to extending these rights to our employees and others directly or indirectly employed in our supply chain. This policy applies to Lenovo’s worldwide operations and in those of our supply chain. Every Lenovo organization must support this policy. Lenovo will abide by the following commitments: • Conduct business in accordance with the United Nations Declaration of Human Rights and the principles of the United Nations Global Compact and extend those requirements to all suppliers doing business with Lenovo. • Perform due diligence across the value chain to identify risks and avoid complicity in human rights violations. • Provide access to grievance mechanisms, investigate allegations and escalate known cases of human rights abuse to senior leadership. • Integrate training and accountability for respecting human rights across the business and the supply chain. • Engage internal and external stakeholders to address common challenges and advance human rights practices through continuous improvement. • Operate legally and ethically in each country where we do business. All corporate strategies, practices, and guidelines as well as supplier requirements must support this commitment to human rights. Concerns about possible human rights violations must be reported to Lenovo management who shall take prompt corrective action. Actions With operations and supply chains that extend around the world, we are uniquely positioned to support the global collective impact of business by aligning our practices to a sustainable and inclusive future. Since 2009, Lenovo has continued its role as a signatory supporter to the United Nations Global Compact (UNGC), a globally recognized platform that provides a blueprint for businesses that want to achieve a more sustainable future for all. As a business participant in the UNGC, we embrace the inspiration to demonstrate continuous improvements by aligning our operations and practices with the ten principles of the UNGC. The principles promote a value system that supports the fundamental responsibilities in the areas of human rights, labor, environment, and anti-corruption in the markets where we operate. Results (1 April 2023 -31 March 2024) In 2022, Lenovo worked with Workplace Pride to advance LGBTQ+ inclusion through two initiatives. The first was signing the Declaration of Amsterdam in May 2022, confirming its commitment to fostering an inclusive workplace for its LGBTQ+ employees. Then, Lenovo worked with Workplace Pride to benchmark their efforts, and was subsequently recognized as the most improved company on their LGBTQ+ inclusion index. For the sixth consecutive year, Lenovo was included in the Human Rights Campaign (HRC) Foundation’s 2023 Corporate Equality Index, while receiving a score of 100 and the distinction of “Best Place to Work for LGBTQ+ Equality”. The index is the premier benchmarking survey on corporate policies and practices for LGBTQ workplace equality in the United States. Expectations for the work going forward The Company is determined to ensure that the working conditions at its locations are safe; workers are treated with respect and dignity; operations are environmentally sound; and business operations are conducted responsibly and ethically. This will also be the focus in the future through the continuous training of new and existing employees. Anti-corruption and Bribery Operational Risks The Group’s complex supply chain may also result in exposure to hidden and uncontrollable risks typically driven by Environmental, Social and Governance (ESG) factors, such as natural resource depletion, human rights abuses, or labor practices. For example, the legal and regulatory standards of certain countries in which its indirect suppliers operate may be less robust and therefore not sufficient to meet the regulatory standards of other countries which it sells to. Non-compliance by any supplier, whether direct or indirect, may harm the Group’s reputation and supply chain operations, or cause the loss of license to operate. The risk that representatives of the Group, including its employees or agents, intentionally or inadvertently bribe a government official or other third parties in violation of applicable anti-bribery and corruption laws and regulations. Content of Policy Lenovo has zero tolerance for bribery and corruption. Lenovo complies with the anti-bribery and corruption laws of the countries in which we conduct business. Lenovo’s Global Anti-Bribery and Corruption Policy and along with our Global Gift, Entertainment, Corporate Hospitality and Travel Policy reinforce provisions in the Code and provide additional guidance regarding compliance with global antibribery and corruption laws and regulations. The policies stress that Lenovo will not directly or indirectly solicit, offer, promise, authorize, provide, or accept anything of value to any person, including government officials, to influence action, inaction or to secure an improper advantage as defined by applicable laws. Actions Ethics and Compliance Office promotes the highest ethical standards of business conduct and legal compliance. It also oversees the organization’s ethics and compliance program and works in partnership with the business units across the globe to ensure they operate within legal and ethical obligations. The Ethics and Compliance Office plays a critical role in providing employees with the guidance, resources, and information they need to make informed and appropriate decisions. It’s also responsible for the Lenovo Code of Conduct, which set our clear expectations and guidelines for every employee. The Code covers many areas of ethical, responsible business practices, such as: - Anti-bribery and Anti-corruption, including a policy that reinforces provisions in the Code and provides additional specific guidanceregarding bribery and corruption.- Anti-Competitive Practices and Fair Competition, including why employees cannot enter into an agreement or discussion to set prices,limit the availability of goods or services on the market, or boycott a customer or supplier.- Intellectual Property, including the company policy for employees to avoid any infringement of copyright or other intellectualproperty rights of other companies and individuals.- To ensure that our ethical business standards, policies, and practices are being met, our internal audit team conducts about 40-45 advisory projects each year." Results (1 April 2023 -31 March 2024) To help employees understand these requirements, training on anti-bribery and corruption is provided. In FY2022/23, 97% of Lenovo’s computer-based employees completed the assigned anti-bribery and corruption mandatory eLearning course. In addition, 21 facilitator- led sessions focused on anti-bribery and corruption basics and case studies were provided to over 11,000 China based employees of the Company. Lenovo also provides Code training to new employees, which includes antibribery and corruption topics. The Board of Directors and Senior Leadership Team are provided a facilitator-led training session on anti-bribery and corruption. Bribery and corruption risks are also evaluated as part of Lenovo’s Enterprise Risk Management Program risk assessment to ensure Lenovo’s internal controls effectively address and mitigate bribery and corruption risk to the enterprise. Additionally, in FY 2023/24, the Company released an educational video in commemoration of International Anti-Corruption Day, urging all employees to participate in the global fight against corruption. The video garnered viewership from approximately 30,000 employees. Expectations for the work going forward Continuous monitoring of changes in the legal and regulatory environment to ensure compliance with applicable laws and regulations. Lenovo will continuously monitor changes in the legal and regulatory environment to ensure compliance with applicable laws and regulations.

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Business activities and mission Lenovo Group Limited is one of the world’s leading computer technology companies. The Group has broadened its device business from PC to include mobile and enterprise businesses. Lenovo has been listed on The Stock Exchange of Hong Kong since 1994. Lenovo (Danmark) ApS is a wholly owned subsidiary of Lenovo International Coöperatief U.A. in Amsterdam. The company’s activities consist of sales to Danish companies. The product portfolio consists of desktop and notebook computers and related equipment. The vast majority of the sales takes place through CP retailers.