Boots CSR rEPORT

Building a sustainable group for a better worldAlliance Boots Corporate Social Responsibility Report 2013/14

We are a leading international pharmacy-led health and beautygroup. Our focus isonhelping people look andfeeltheir best.

In this years reportIn focus

Alliance Boots | Corporate Social Responsibility Report 2013/14

Our approach IFC

Our vision and ambitions 01

Executive Chairmans statement 02

Our Group at a glance 03

Our mission, purpose and values 04

Our business activities 05

Our approach 06

Corporate governance 06

Risk management 06

Establishing our priorities 07

Our flexible framework 08

Social responsibilities committee 10

Community 11

2013/14 community targets 14

Community healthcare 15

Education and research 15

Fundraising 16

Volunteering 18

Giving 19

Community contributions data 20

Environment 21

2013/14 environmental targets 23

Sustainable products 23

Managing carbon 24

Carbon management data 24

Saving energy 24

Sustainable transport 25

Waste and recycling 27

Water 27

Marketplace 28

2013/14 marketplace targets 31

Cause-related marketing 31

Healthy living 32

Our supply chain 32

Workplace 33

2013/14 workplace targets 35

Employee health 35

Diversity 36

Women at work 36

Training and development 37

Engaging our people 38

Health and safety 39

Performance 40

2014/15 CSR objectives and priorities 40

KPMG assurance report 42

Prosecutions and environmental incidents 44

GRI compliance and index 44

Reporting guidelines 44

12 Continuing the fight against cancer

22 Investing in more efficient technology

29 A sustainable approach toresponsible sourcing

34 Inspiring young talent

We recognise the importance of working in partnership and championing worthwhile causes, such as the fight against cancer. Wesupport many cancer charities across ourorganisation, including the long term partnerships we have with the European Organisation for Research and Treatment ofCancer (EORTC) Charitable Trust and Macmillan Cancer Support in the UK. Throughout the year, our people have again shown true passion and enthusiasm for our charitable partnerships through a wide variety of fundraising activities and volunteering initiatives.

We understand the value that can be created through collaboration between academia andindustry and are proud of the work we have achieved together with several highly regarded academic institutions, including TheUniversity of Nottingham and TheUniversity of Manchester in the UK andThe University of Rome Tor Vergata in Italy. Such collaborations help to better inform our business activities, as well as generate benefits within the health and beauty industry for customers and patients.

In recognition of our commitment to high streets across the UK, we remain an active member of several public and private organisations focussed on ensuring the future prosperity of town centres. In April, we were awarded platinum status by Business in the Community, as part of its 2014 Corporate Responsibility Index, for the third consecutive year. This accolade is a testament to the combined efforts of our people and the difference we make within the communities that we serve.

With an increasing presence across many communities around the world, we continue to recognise the importance of ensuring thatour business practices are socially, environmentally and economically sustainable across the Group. Working in close partnership with our many stakeholders and inspiring our teams within the field of CSR has enabled us to succeed in becoming a leader within the responsibility agenda.

Ornella Barra Chairman of the social responsibilities committee

At Alliance Boots, corporate social responsibility (CSR) forms an integral part of the Groups commercial philosophy, enabling us to serve ourcommunities with care and commitment. It is thanks to the engagement of our teams in supporting our CSR agenda that weare able to feel proud of the contribution we make and our role as a responsible global citizen.

Alliance Boots | Corporate Social Responsibility Report 2013/14 01

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Our vision and ambitions

Making a positive and lastingdifference to thewellbeing of the communities we serve.

Ornella BarraChairman of the social responsibilities committee, Alliance Boots

Our objective of building a sustainable world leading group, making healthcare more accessible to the communities we serve, remains unchanged.

Being global is increasingly important in manybusiness sectors, including our own, and can prove instrumental in advancing thefield of corporate social responsibility. Bycombining global solutions with local action, businesses can positively assist in addressing the many environmental, social andhealthcare challenges present across the world.

Our transformational partnership and expected merger with Walgreens, our joint agreement with AmerisourceBergen and ourrecent geographical expansion in LatinAmerica mean we are interacting withmore countries and cultures than everbefore. Our expanding global footprintprovides us with opportunities tofurtherourcontribution in building strong foundations for a sustainable future that allour stakeholders can benefit from.

We believe in making a difference and are proud of the contribution we make to the wellbeing of the communities we serve. Working within the healthcare industry places us in a privileged position to help improve the healthcare available to communities, through providing medicines, quality products and services as well as expert advice, to people every day.

We fully recognise the vital link between good corporate social responsibility and goodbusiness. I strongly believe that global businesses can be a powerful force for good in progressing CSR and that Alliance Boots hasdemonstrated the right credentials, experience and track record to be a responsible global citizen. Combined with the fantastic energy and commitment of our teams, as well as strong partnerships with our stakeholders, our continued contribution will help succeed in securing a better world for future generations.

As in previous years, this report includes an independent assurance report on our 2013/14 CSR data, issued by KPMG, which reinforces our established processes and procedures inrelation to data capture and accuracy.

Stefano Pessina Executive Chairman

Executive Chairmans statement

Leading corporate responsibility in a global marketplace.

Stefano PessinaExecutive Chairman, Alliance Boots

02 Alliance Boots | Corporate Social Responsibility Report 2013/14

Our approach

Over 120,000* employees

120,000+

Presence in more than27* countries

27+

Operating more than 4,600*health and beauty retail stores, of which more than 4,450* have apharmacy

4,600+

Dispensing over 300*million items each year

300m+Operating more than 370*pharmaceutical wholesaledistribution centres

370+ Delivering over 4.5* billionunitseach year tomore than180,000* pharmacies, doctors,health centres and hospitals

4.5bn+

Owned businessesAssociates and joint venturesBranded products and franchises**

Alliance Boots is a leading international pharmacy-led health and beauty group delivering a range of products and services to customers.

Working in close partnership with manufacturers and pharmacists, wearecommitted to improving health in the local communities we serve andhelping our customers and patients to look and feel their best.

Our focus is on growing our two core business activities of:

Pharmacy-led health and beauty retailing Pharmaceutical wholesaling and distributionwhile increasingly developing and internationalising our product brands.

Our Group at a glance

* Figures are approximations as at 31 March 2014, with the addition of Farmacias Ahumada data at the date of its acquisition on 11 August 2014, and include associates and joint ventures.

** Countries where Boots products are available for purchase or there are Boots franchises (other than those countries where there are owned businesses, associates or joint ventures).

We also have around 600* optical practices, of which around 180* operate on a franchise basis, and hearingcare services in around 430* locations.


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Our mission, purpose and valuesOur missionWe seek to develop our core businesses of pharmacy-led health and beauty retailing and pharmaceutical wholesaling across the world and become a significant player in many major international markets.

Our purpose We deliver products and services that help people look and feel their best.

Our valuesWe believe in making a difference and are proud of the contribution we make to the wellbeing of the communities we serve.

Our core values are:Partnership Trust ServiceIncludes respect, understanding andworking together. We create and build value through partnerships andalliances, inside and outside thebusiness. Together we can achieve more.

The essence of the way we do business. We are trusted because we deliver on our promises.

We hold ourselves to high standards of care and service, for our customers and our people.

Entrepreneurship SimplicityWe are innovators, seeking newchallenges and having awinning spirit.

We are proud of being lean and efficient, uncomplicated and easy todo business with.


Our approach

Our business activities

Alliance Boots, including our associates and joint ventures, has pharmacy-led health and beauty retail businesses in 11 countries, eachfocussed on helping people look and feel their best.

Together with our associates and joint ventures, we operate more than 4,600 health and beauty retail stores, of which more than 4,450 have a pharmacy, with a fast growing online presence. In Europe, we are the clear market leader in pharmacy with stores in the UK, Norway, the Republic of Ireland, The Netherlands and Lithuania. We also have pharmacies in Mexico, Chile and Thailand and our associates and joint ventures operate pharmacies in China, Italy and Croatia. In addition, around 80 Boots branded stores operate in the Middle East on a franchise basis.

Our stores are located in convenient locations and put pharmacists at theheart of healthcare. Our pharmacists are well placed to provide a significant role in the provision of healthcare services, working closely withother primary healthcare providers in the communities we serve.

Our principal retail brand in the Health & Beauty Division is Boots, whichwe trade under in the UK, Norway, the Republic of Ireland, TheNetherlands and Thailand. The Boots omni-channel offering is differentiated from that of competitors due to the product brands weown and only at Boots exclusive products, together with our longestablished reputation for trust and customer care.

Boots Opticians is one of the leaders in the UK optical market with around600 practices, of which around 180 operate on a franchise basis. Around 30% of practices are located in Boots stores with the balance being standalone optical practices. In addition, we have a leading position in the UK hearingcare market through our associate, Boots Hearingcare, which operates in around 430 locations across the UK, almost all of whichare within Boots stores or standalone Boots Opticians practices.

We recognise the special status of Boots as the UKs most trusted pharmacy brand and continue to enhance our position as a leading provider of healthcare, beauty advice and services in local communities. We do this by delivering expert customer care, through investment inexisting stores, by selectively expanding our store portfolio and, increasingly, through developing our omni-channel offering.

Our pharmaceutical wholesale businesses, together with our associates and joint ventures, supply medicines, other healthcare products and related services to more than 180,000 pharmacies, doctors, health centres and hospitals from more than 370 distribution centres in 20 countries.

Our businesses provide high core service levels to pharmacists in terms offrequency of delivery, product availability, delivery accuracy, timeliness and reliability at competitive prices. We also offer our customers innovative added-value services which help pharmacists develop their own businesses. This includes membership of Alphega Pharmacy, our pan-European network for independent pharmacies. Alphega Pharmacy has a membership of more than 4,800 pharmacies in seven countries. This will increase significantly following the March 2014 vote by the vivesco pharmacy network in Germany, which has around 950 members, to rebrand as Alphega.

In addition to the wholesale of medicines and other healthcare products,we provide services to pharmaceutical manufacturers who are increasingly seeking to gain greater control over their product distribution while at the same time outsourcing non-core activities. These services include pre-wholesale and contract logistics, direct deliveries to pharmacies, and specialised medicine delivery including related home healthcare.

Combined with local engagement, scale is very important in pharmaceutical wholesaling. In addition to being the largest pharmaceutical wholesaler/distributor in Europe, Alliance Boots typically ranks as one of the top three in the individual countries in which we operate.

We continually seek to grow our wholesale and related distribution activities organically and through acquisitions, including investments inassociates and joint ventures. These acquisitions are either in current orcomplementary business areas in countries in which we already operate or in new geographical markets which are typically large, fast growing and where we see the potential for market consolidation.

Our product brands

Pharmaceutical wholesaling and distribution

Pharmacy-led health and beauty retailing

* Figures are approximations as at 31 March 2014, with the addition of Farmacias Ahumada data at the date of its acquisition on 11 August 2014, and include associates and joint ventures.

In our Health & Beauty Division, we have highly regarded and long established product brands such as No7, Soltan and Botanics, together with newer brands such as Boots Pharmaceuticals and Boots Laboratories. Product innovation and development, packaging and product marketing capabilities are key skills which enable us to develop new and existing brands.

We are continuing to internationalise our key product brands, increasingly selling them through select retail partners, our own and third party internet shopping sites, and independent pharmacies. In the US, where Boots product brands have been sold through Target for many years, we are, in addition, introducing No7 and other key Boots product brands into the drugstore channel through Walgreens on a phased basis. In Asia, we extended our partnership with Dairy Farm to sell Boots product brands in their health and beauty stores in Hong Kong and Singapore.

In Europe, our Boots Laboratories range is sold by independent pharmacies in five countries.

In addition, we have long term partnerships with a select number of third party brand owners to sell their products in Boots stores on an exclusive basis, sharing in the future brand equity. Most recently, we have established a specialist investment fund to invest in small and medium sized consumer brand businesses within the health, wellness, beauty andpersonal care sector. We continue to manufacture a significant proportion of our most popular own brand and exclusive products.

In our Pharmaceutical Wholesale Division and associates, Almus, our range of generic medicines, is sold in five countries and Alvita, our range of patient care products, is sold in six countries.


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Corporate governance

Helping people look and feel their best is at the heart of what we do on a day to day basis. Everyday around the world, millions of people rely on the medicines we distribute and dispense to feel their best. They rely on our local pharmacists for information, support and advice. They rely on the beauty products we have developed to look their best. We are proud of our contribution to the wellbeing of the communities we serve andas a business focussed on healthcare, webelieve that our corporate social responsibilities are integral to our activities. Furthermore, we believe that our initiatives actively help us to further our mission, fulfil our purpose and live our values.

Our businesses engage in activities which arerelevant to their local communities and markets, but which all fall within a central, Group-wide, CSR framework and process. Across the Group we support local initiatives, share best practice and innovation, and measure the positive impact of our businesses.

The process is the same across our businesses where they each set their own specific targets. For example, our businesses in Germany and Turkey have different targets on waste which reflect the realities of the recycling and waste infrastructure in their respective markets.

CSR is naturally embedded in the working practices of our people. It is part of our daily routines. Many of our CSR initiatives also deliver additional value for the Group through reducing costs or generating new commercial opportunities.

We engage with our stakeholders on a local, regional and national basis to formulate our CSR strategy. They advise us on our approach to risk and help us in our analysis of material issues. Our robust data management process ensures we know how we are performing against our key targets. Our transparent reporting ensures that we communicate this clearly and simply.

Our approach is to identify, monitor and assess all significant risks andtake steps, where necessary, tomitigate them. Our executive Directors and the Director of Internal Audit & Risk Management continue to play a leading role in monitoring the overall risk profile and regularly report to the Board through the audit and risk committee.

The process of risk identification is facilitated by the use of risk registers for Alliance Boots and for each business. In addition, the Board, through the executive Directors, is responsible for determining clear policies asto what Alliance Boots considers to be acceptable levels of risk. These policies seek to enable employees to use their expertise toidentify risks that could undermine performance and to devise ways of bringing them to within acceptable levels.

Where we identify risks that are not acceptable, we develop action plans to mitigate them with clear allocation of responsibilities and timescales for completion and ensure that progress towards implementing these plans is monitored and reported upon.

Full information on our risk management process and the most significant risks we face are included in the Alliance Boots Annual Report 2013/14.

Our approach

Risk management

Alliance Boots considers that good corporate governance is an essential element of achieving its overall objectives and acting as a responsible organisation.To support good governance of our behaviours and approach to CSR, we haveGroup policy statements in place. These cover the environment, health and safety, charity, product testing, customer safety and diversity and are available to view on our website. These shape our businesses approach to their activities and ensure they are all working within the same parameters. In addition, the Group has a specific Anti-Corruption and Bribery Policy. Bothdocuments are published on the Companys website in the corporate governance section.

A Code of Conduct and Business Ethics, approved by the social responsibilities committee and the Board, sets out the ethics, principles and standards which are required tobe consistently upheld by each Division, business and corporate function within the Group.


Our approach

Media

Non-governmentalorganisations

Academics

Customers(pharmacists-consumers-patients)

Suppliers

Localcommunities

Employees

Shareholders

Government

Governmentbodies andagencies

Stakeholders: Engagement channels:

Media Performance updates, media releases, interviews with senior executives

Non-governmental organisations

Donations and sponsorship, joint fundraising events, partnerships, in kind support and volunteering schemes, face-to-face meetings, formal feedback sessions

Shareholders Regular dialogue as a private company

Government bodies and agencies

Consultation responses at national and European level, association membership, industry panels, public affairs outreach, site visits

Employees Performance management process, employee engagement surveys and forums, union-management forums and work councils, consultations, training, one on one meetings, Groupand business communications

Local communities Local business forums, regular and ad hoc meetings with local not for profit groups, public consultations, employee volunteering

Suppliers Supplier forums, one on one meetings, policy statements, guidelines, site visits, supplier conferences and supplier audits

Customers (pharmacists, consumers, patients)

Customer panels, focus groups, customer satisfaction surveys, direct feedback, conferences for pharmacists, pharmacist associations

Academics Face-to-face meetings, research and sustainability projects, guest-speaker slots, internships, logistical support

Establishing our priorities

Stakeholder dialogue is also crucial in ensuring that our businesses are continuing to meet and exceed best practice. Boots UK uses a network of critical friends to advise and inform on a range of issues, for example, waste management.

Across the Group, we also carry out industry benchmarking, obtain informal stakeholder feedback and conduct stakeholder impact assessments for specific Group ad hoc projects, such as our plans for the Nottingham Enterprise Zone on the Alliance Boots site in Beeston, Nottingham, UK. The local community has been involved in the plans and we have worked closely with authorities at a regional level to develop the concept, while working closely with national Government todeliver the project.

These examples of our stakeholder engagement, whether led by the Group, ourexecutives, or our individual businesses enable us to better understand the material issues we face and ensure that our CSR activities are targeted, appropriate and impactful.

Consortium, at a national level, to implement recommendations arising from the Government commissioned independent High Street Review. This accompanies our local stakeholder dialogue where our individual stores are encouraged to support the principles of local Business Improvement Districts and participate in town centre forums. Additionally, since the year end, Simon Roberts, Managing Director, Health&Beauty UK and Republic of Ireland, was appointed co-chairman of the Future High Streets Forum, which works with Government onchallenges facing high streets and helps todevelop practical policies to enable town centres to adapt and change.

Furthermore, Ornella Barra, Chief Executive, Wholesale and Brands, in her capacity as Chairman ofthe social responsibilities committee at Alliance Boots and as a member of the Business in the Community International Leadership Team, continues to lead our CSR efforts. Her position also enables her to share our Groups CSR experiences, whilst learning of other CSR developments and initiatives across other international businesses.

Our businesses are also shaping their activities to meet their specific needs and undertaking regional and local engagement where necessary. In response to a strong local culture of environmental awareness, Alliance Healthcare Norge continues to use recognised external accreditation schemes to reinforce its values in this area to its suppliers.

Engaging with our stakeholders ensures that we continue to operate responsibly, address their concerns, and learn from their insight and experience. This meaningful, in-depth dialogue provides us with abroad and diverse understanding of our stakeholders evolving priorities and interests, ultimately helping us to deliver products and services which positively impact thewellbeing of communities.Through this dialogue we identify and prioritise our stakeholder audiences, deepen our understanding of their expectations andinterests, and undertake a variety of engagement channels, some of which we have outlined below. We especially focus on those stakeholders who are directly impacted by our diverse operations.

An example of how we interact with our stakeholders at various levels can be seen inBoots UKs support for the High Street. Boots UK continues to work closely with many public and private sector organisations, including other members of the British Retail


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Our flexible frameworkThe Groups CSR framework of priorities covers four key areas: community; environment; marketplace; and workplace. We call this framework the Alliance Boots scorecard and it is used across our businesses. Each of our businesses CSR plans are created based on localstakeholder engagement, an analysis of key issues, and meeting the Groups overall priorities. Thesearepresented to the social responsibilities committee for approval and progress against theseplans and the scorecard ismonitored centrally.

The Alliance Boots scorecard

Every year, after consultation with our stakeholders, we review the Groups priorities and, where appropriate, set new revised priorities within which targets canbeset for the year ahead. Our priorities focus on community healthcare (community); reducing our carbon footprint (environment); sustainable products (marketplace); and healthy workplaces (workplace).

All of our businesses have their own scorecard based on these four key areas and, consistent with the Groups priorities, settheir own programmes and targets as appropriate. There is a range of different strands of activity across each of the four key areas andit is within this framework that plans are made by each business. These priorities are further divided into areas of focus and are apportioned around our wheel structure which is submitted to the Alliance Boots social responsibilities committee for review.

We work across pharmacy-led health and beauty retailing, pharmaceutical wholesaling

and distribution, and contract manufacturing. Our businesses are of varying size and work in different economic and social circumstances. As such, we have ensured that our CSR framework is robust enough to provide leadership and direction, yet flexible enough to take into account differences in approach for each business working within the context of their local communities and markets. It is necessary to have a support structure which helps each business to develop and take ownership of a CSR agenda that is appropriate to local circumstances, whileremaining within the overall Alliance Boots framework.

EnvironmentCo

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Carbonmanagement

sustainability

Communityhealthcare

Healthyworkplaces

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Product

CommunityhealthcareEducation

and researchFundraising

GivingVolunteering

Sustainable productsManaging carbonSaving energySustainable transportWaste and recyclingWater

Employee healthDiversity

Women at workTraining anddevelopment

Engaging our peopleHealth and

safety

Cause-related marketingCorporate governanceHealthy livingOur supply chain

EnvironmentAt Alliance Boots, we are determined to be a leader and an example to others in addressing the threat of climate change. We pursue many practical activities which contribute to the overall reduction of our carbon footprint.

WorkplaceAs a Group whose purpose is to deliver products and services that help people look and feel their best, it is second nature to make the health and wellbeing of our own employees a priority. We continue to support our people through training and development, so that they can both grow professionally, and meet the evolving challenges of our industry.

Community We strive to support the communities that we work in. We provide our people with opportunities to devote their time, energy and talent to support the causes that matter through volunteering and fundraising.

MarketplaceOur mission to make people look and feeltheir best comes alive through a range ofpartnerships and health campaigns. Inaddition, we can build on our position of trust to make a positive impact on ourindustry and our patients and customers lives.


Our approach

included for the current but not prior yeardata, being the first full year since acquisition. To provide meaningful year on year comparisons for our environmental performance data, we have referenced organic growth where relevant, removing the impact of prior year acquisitions recorded for the first time in 2013/14.

Re-statements: In 2013, the UK Governments Department for Environment, Food and Rural Affairs (DEFRA) completed a significant review of the content and format of the conversion factors used to convert different forms ofenergy use into a common measure (e.g.tonnes of CO2 emission). The Group has adopted the new methodology to continue to apply best practice. To providecomparable data, the prior year information has been restated applying the new methodology.

Data collected locally is first reviewed by our CSR champions and finance teams at a local level. The data is then signed off by the business Finance Director. This is then reviewed by the Divisional finance teams before being submitted to Group finance, and our central CSR team, for final review. Finally, the data is independently assured by KPMG, before publication in our annual CSR report.

In addition to the independent assurance report on our 2013/14 CSR data issued by KPMG, we continue to use the Global Reporting Initiative (GRI) sustainability reporting framework as a checklist for our reporting and we have also included a fully referenced GRI index in the report.

Our corporate social responsibility management As part of our CSR programme, we have achampion in each business with responsibility for defining and delivering local CSR priorities and targets in line with the Groups overall objectives. These objectives provide a framework for our businesses to establish their own priorities and targets thatreflect the local business environment. Progress against these targets is monitored quarterly by the Group and a senior business leader is accountable for each target. Eachchampion works with an action group (which includes senior representatives of relevant business functions) for his or her individual business and the champions holdteleconferences to share initiatives and internally report on their activity. They meet together once a year to share their skills, experiences and ideas with their peers andmembers of the social responsibilities committee. Formal and informal collaboration between champions helps us toshare best practice and ensures that our businesses can benefit from progress made across the Group. For example, Boots UK hasworked in close partnership with Alliance Healthcare UK on an energy saving campaign for all its sites, including warehouses and support offices.

All champions across Alliance Boots are supported by the Groups CSR Director and coordinator, who provide guidance and additional expertise on working within the Groups CSR framework. In addition, each champion is supported by colleagues from their respective business and a number of Group functions including human resources, communications and finance. In March 2014,

we launched an innovative learning and development programme to support our corporate social responsibility champions with training on CSR theory and its practical implementation, developed in conjunction with Birkbeck University, London. This new CSR e-learning programme is composed ofeight e-learning modules and uses case studies, debates, discussion and real outcomes. It aims to ensure that each champion across the Group has a consistent knowledge and understanding of the CSR agenda, combined with the confidence to manage and collaborate with internal and external stakeholders.

The corporate governance section of this report offers more on how we structure our work in this area.

Data management processWe have a Group-wide approach to recording, measuring and reporting on our CSR performance. We have a set of reporting criteria and a set of CSR measures and performance indicators that are applicable across the Group. The CSR data captured is used to inform and assist in the development of each business individual CSR programme.

The data presented within this report reflects the continuing operations of the Group. TheGroups CSR data is produced in accordance with the Alliance Boots CSR Reporting Guidelines (which can be found atallianceboots.com/corporate-governance/committees).

Acquisitions: In 2013/14 performance data for the Groups prior year acquisition (Alliance Healthcare Russia) has been

Data published annually in Alliance Boots CSR report in line with GRI guidelines

Business Finance Directors review and sign off data

Data independently reviewed

Data is reviewed by Divisional finance teams

Data consolidated and reviewed by Group finance and central CSR teams

Data is collected by business finance teams assisted by CSR champions


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Social responsibilities committee

The social responsibilities committee, comprised of five members of the Board of Directors, meets four times a year. They keep under review and advise the Board on the Groups policies and practices in the area of corporate social responsibility, including issues related to the environment, health and safety, diversity and equal opportunities, race relations, employment of people with disabilities, charitable giving and ethical matters, and the Groups values and standards.

05 Marco Pagni04 Thomas Sabatino01 Ornella Barra 02 Nick Land 03 Chris Britton

01 Ornella BarraChairman of the social responsibilities committee Chief Executive, Wholesale and BrandsOrnella Barra is Chief Executive, Wholesale and Brands. She had previously been Chief Executive of the Pharmaceutical Wholesale Division (from January 2009 to September 2013), and before that, Wholesale & Commercial Affairs Director. In her role, sheoversees the Pharmaceutical Wholesale Division and the overall development of International Health & Beauty and Brands. Ornella is Chairman of the social responsibilities committee. Prior to the merger of Alliance UniChem and Boots Group she was executive Director of Alliance UniChem with wholesale and commercial affairs responsibilities, having been appointed to its Board in 1997 when Alliance Sant merged with UniChem. InApril 2013, Ornella was appointed as anindependent member of the Board of Assicurazioni Generali. She started her career as a pharmacist in Italy and is an honorary professor at the University of Nottinghams School of Pharmacy.

02 Nick LandNon-executive DirectorNick Land was appointed as a non-executive Director in March 2008, is Chairman of the audit and risk committee and is a member of the social responsibilities committee. Nick is a non-executive Director of Vodafone Group, BBA Aviation, Ashmore Group and the Financial Reporting Council. He is also Chairman of the Guidelines Monitoring Group, the Board of Trustees of the Vodafone Group Foundation and of Farnham Castle, amember of the Advisory Board of Alsbridge and an advisor to the board of Dentons UKMEA. Previously he was a partner and Chairman of Ernst & Young in the UK and a member of its Global Executive Board. Heisamember of the Institute of Chartered Accountants in England and Wales.

03 Chris BrittonNon-executive DirectorChris Britton was appointed as a non-executive Director in June 2008 and is a member of the social responsibilities committee. Since September 2013, Chrishasmanaged B&B Capital Partners, aspecialist investment fund, established byAlliance Boots. In addition, he is a non-executive Director of DS Smith and a Director of a number of privately owned foodcompanies. Previously, Chris was non-executive Chairman of Ellas Kitchen andbefore that was Chief Executive Officer of the Findus Group. Earlier in his career he was Executive Board member and President Baby Food Division of Royal Numico and healso worked for Diageo in various general management and marketing positions.

04 Thomas SabatinoWalgreensThomas Sabatino was appointed to the Board of Alliance Boots in August 2012. Thomas is Executive Vice President, General Counsel and Corporate Secretary of Walgreens. Previously Thomas held general counsel roles with United Airlines, Schering-Plough Corporation, Baxter International, andAmerican Medical International. Thomasis also Chairman of the Association of Corporate Counsel, the advisory Board of Corporate Pro Bono and a member of the Board of the International Institute for Conflict Prevention and Resolution. Thomas is a member of the Bar in Massachusetts, Illinois and California.

05 Marco PagniGroup Legal Counsel & ChiefAdministrativeOfficerMarco Pagni is Group Legal Counsel & Chief Administrative Officer, having been appointed a Director of Alliance Boots in July 2007. Previously he was General Counsel and Company Secretary of Alliance Boots, having joined Alliance UniChem in the same position in 2003. Prior to this, Marco held senior management positions in McDonalds and Texas Instruments, having started his career as a law lecturer at Oxford University before being admitted to the Bar in England and Wales.


Our approach

Community

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h Alliance Boots | Corporate Social Responsibility Report 2013/14 11

We strive to support the communities that we work in. We provide our people with opportunities to devote their time, energy and talent to support the causes that matter through volunteering and fundraising.

In our day to day business we help people to look and feel their best around the world. Our work in the community naturally complements this and is focussed on health and wellbeing.

Thanks to the enthusiasm of our people we help others to lead healthier lifestyles and support those living with disease or in extreme need. We encourage our people to support the fight against cancer, supporting the European Organisation for Research and Treatment of Cancer (EORTC) Charitable Trust to find new ways to fight the disease. We also encourage our people to support charities local to their communities.

In June 2013, our partnership with the EORTC Charitable Trust won the Best International Community Investment Award at the Ethical Corporations Responsible Business Awards inLondon. This recognition is a further testament to the importance of our work, together with the EORTC Charitable Trust, inthe fight against cancer.

The Group-wide partnership also complements our other collaborations with local cancer charities, including Macmillan Cancer Support in the UK, reflecting our holistic approach to supporting the cause, finding new ways to fight the disease and supporting those living with it.

Employees at Alliance Boots have continued to show enthusiastic support for the cause throughout the year, 0.9 million being raised for the EORTC Charitable Trust in 2013/14. A wide range of fundraising events have enabled our people to raise 1.9 million since the launch of the partnership and we remain committed to our fundraising target of over 5 million to support the EORTC Charitable Trust by 2016.

As Europes largest clinical cancer research organisation, the EORTC collects colorectal cancer tissue samples to develop new cancer research treatments aimed at identifying andtargeting specific types of tumours. TheBiobank builds on the identification of the gene mutations involved in colorectal tumours using advanced sequencing technology. This enables doctors to develop personalised medical treatments based on the genetic make-up of a patients cancer.

The project is now well underway and the Biobank is taking shape at the Institute of Pathology in Dresden, Germany, with several other European institutions assisting in the collection of tumour biological samples. Since its official opening in September 2013, more than 390 patients from Belgium, Germany, Cyprus, Spain, Italy, Portugal and Switzerland have enrolled in the project as part of the drive to collect samples, with the number of patients enrolled set to grow to 600 per year.

Alliance Boots continues to pledge its support to the European Organisation for Research and Treatment of Cancer (EORTC) Charitable Trust. Our fundraising partnership enables the ongoing development and running of a pioneering pan-European Biobank for colorectal cancer, the worlds third most common cancer, which is responsible for around 220,000 deaths a year in Europe.

Continuing the fight against cancer

Community


In focus

Our partnership with Alliance Boots plays a leading role in making cancer treatment progress. Today, I can proudly say that the project is developing fast, and to date we have more than 390 patients enrolled in the Biobank. The funds that Alliance Boots is raising are key to the development of innovative cancer treatments that will contribute to saving lives in the future.

Count Diego du Monceau de Bergendal Chairman of the EORTC Charitable Trust

ParkLife2013 team covers distance from UK to ItalyIn June 2013, over 210 colleagues collectively covered 2,905km around Londons Hyde Park, by foot or by bike. This far exceeded their original target of 1,600km (the approximate distance between the Boots UK offices in Nottingham and the Alliance Healthcare Italia offices in Lavagna, Italy). The event raised over 60,000 for the EORTC Charitable Trust.

London to Paris Ride for Life In September 2013, the London to Paris Ride for Life bike ride took place with a teamof 17 colleagues cycling a combined 4,000km in less than 48 hours. Starting from the Boots UK flagship store on Oxford Street, the team cycled to the Arc de Triomphe in Paris, raising over 17,000 in the process, withthe active engagement of colleagues and suppliers.

Alliance Healthcare football and netball championshipsOur sporting champions came to the fore when Alliance Healthcare UK held its first ever football and netball championships in September 2013. Over 300 people gathered from across the UK for the event, held in Nottingham, for a day of activities and competitions. The championships raised more than 40,000 for the EORTC Charitable Trust.

Group-wide fundraising engagementIn addition to these significant one-off fundraising events, our people across the Group have imaginatively raised funds and awareness for the charity in a variety of other ways.

An International Cookbook was published in order to raise money and awareness for the EORTC Charitable Trust. This comprises a collection of traditional recipes suggested by Alliance Boots colleagues from across 17 countries.

During the year, about 50 of our AllogaFrance colleagues took part in a charity run from Marseille to Cassis, while teams from Alliance Healthcare Netherlands participated in two running events the Vestingloop and the Meppel Cityrun andAlliance Healthcare Czech Republic organised acharity football match.

Alliance Healthcare Italia, our associate business in Italy, also offered colleagues the opportunity to donate a proportion of their salary to the EORTC Charitable Trust, which resulted in 300 colleagues raising 11,000.

Funds were also raised through Group-wideproduct sales, promotional campaignsand supplier donations. AllianceHealthcareNetherlands, Alliance Healthcare Espaa, our associate business Alliance Healthcare Italia, as well as BCM our contract manufacturing business in the UK and Boots Norge all held sales during the year to help raise money.

Raffles run by Alliance Healthcare France andat the Alliance Healthcare Deutschland Pharmacists Ball 2013 also helped to raise funds, with the latter collecting 65,000 inone night.

Alliance Healthcare France also ran a three month fundraising campaign directed at Alphega Pharmacy managers and teams in France, which raised more than 3,000.

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Objective: To establish meaningful multi-year partnerships with charitable organisations and other stakeholders that share our values of making a difference and our commitment to improving health and wellbeing in thelocal communities that we serve. Our priorities for 2013/14 were:

To raise over 5 million by 2016 to establish a Biobank for colorectal cancer in partnership with the EORTC Charitable Trust.

In 2013/14, Alliance Boots businesses raised 0.9 million for the EORTC Charitable Trust, bringing the cumulative total to 1.9 million. Fundraising and volunteering initiatives included sporting events such as ParkLife2013, which involved over 210colleagues covering 2,905km of LondonsHyde Park by foot or by bike to raise over 60,000 with the support of partners, and the London to Paris Ride for Life, which raised over 17,000. Associate businesses also participated in the programme, an example being Alliance Healthcare Italia where around 300 colleagues donated a proportion of their salary, raising 11,000.

For each principal business to establish partnerships with charitable organisations with supporting activities to improve the health and wellbeing of people within its local community.

During the year, 12 of our businesses had charitable partnerships and related supporting activities in place. Examples include Boots Irelands partnership with the Irish Cancer Society, which raised over 190,000 during the year, activities including the National Night Walk for Night Nurses. Boots Thailand has a three year partnership with the BaanGerda Foundation, providing shelter and food for HIV-infected children. Boots UK supported BBC Children in Need for the tenth year, raising around 1 million for the charity, with the help of colleagues in Boots Opticians and BCM, the cumulative total raised being almost 6.5 million. Additionally, Boots Opticians, through its partnership with Action for Blind People, raised over 255,000.

To make use of our significant consumer reach through our owned and franchise pharmacies as well as the Alphega Pharmacy network with local programmes to deliver health-related information and advice to customers and patients.

A further 500 Boots UK pharmacists trained as Boots Macmillan Information Pharmacists during the year, bringing the total to over 1,850. In addition, Boots UK launched itsGetActive, Feel Good campaign to encourage customers to talk to pharmacy teams about the importance of physical activity. Boots Opticians installed retinal cameras in all locations, and now includes a digital retinal check as standard in the Boots eye check. Alliance Healthcare Espaa worked with Alphega pharmacies to relaunch its Pregnancy and Baby Guide, which addresses health and emotional concerns of pregnant women and mothers with children up to age two, and in France, a diabetes awareness campaign was launched across allAlphega pharmacies.

Objective: To support our employees to volunteer their time to make a difference in the communities that weserve. Our priority for 2013/14 was:

To increase the number of our businesses with employee volunteering programmes in place.

Across our businesses employees are encouraged to participate in employee volunteering opportunities in their local communities. Boots UK, Boots Opticians and Alliance Healthcare Czech Republic all have employee volunteering programmes in place. Boots UK was a joint winner of the Business inthe Community Employee Volunteering Company of the Year Award at the East Midlands Local Impact Awards, in recognition of 200 Boots UK employees renovating Nottingham Forest Recreation Ground in May2013. Alliance Healthcare Czech Republic employees also participated in Give & Gain Day 2013, volunteering to upkeep gardens, fields and orchards at an ecological centre, renovating the gardens of a care home specialising in patients with autism and clearing up gardens at a nature park.

2013/14 community targets

Community


Community healthcareAs an organisation focussed on pharmacy-led health and beauty, promoting and supporting a range of initiatives that improve the health and wellbeing of the communities we serve is a natural extension of our business activities.

We have a strong heritage in providing accessible and affordable healthcare services and products to patients and customers. Forover 160 years, Boots UK has championed the right of everybody to access affordable quality medicines, thereby improving general health and wellbeing. This ethos continues across Alliance Boots today.

Supporting those living with cancer

Now in its fifth year, Boots UKs partnership with Macmillan Cancer Support continues to provide invaluable and accessible support to those affected by cancer in the UK.

During the year, a further 500 Boots UK pharmacists trained as Boots Macmillan Information Pharmacists, bringing the total to over 1,850 across the UK. Boots Macmillan Information Pharmacists work in store, offering help and advice to those living with cancer. The initiative received positive external recognition in the UK and was shortlisted for Corporate Social Responsibility Initiative of the Year category at the Retail Week Awards 2014.

Boots UK also ran a Get Active, Feel Good campaign across its store network to encourage customers to talk to pharmacy teams about the importance of physical activity to post-cancer recovery.

In September 2013, Boots Macmillan Beauty Advisors were introduced in select Boots stores across the UK. Together with Macmillan Cancer Support, No7 beauty advisors have been specially trained to offer practical advice and support to help those affected by cancer manage and disguise thevisible side effects of their treatment.

Improving the health of local communities

We can leverage the thousands of pharmacies that we operate, and the thousands that we support through our networks, to have a really positive impact on health and wellbeing in our local communities.

Alliance Healthcare Netherlands has introduced a LungCheck service, in partnership with local pharmacists, to provide bespoke support for asthma and chronic obstructive pulmonary disease patients across the country. The targeted checks involve patients receiving a personalised consultation at their local participating pharmacy to help improve their inhalation technique, screen for malnutrition, and provide advice on therapy adherence. TheLungCheck also includes guidance on theassociated health risks of smoking and tips to stop smoking.

Boots Thailand continued its support for the BaanGerda Foundation, a childrens charity that provides shelter and food for HIV/AIDS affected children in the Lopburi province in Thailand. Customer, supplier and employee donations have contributed vital funds and supplies to BaanGerdas on-site team, which provides high quality treatment and medicine for the children.

Education and researchAlliance Boots is committed to helping improve healthcare in the communities we serve. Education is one of the many channels which can help make a difference to peoples understanding of health issues.

Raising the awareness of major health issues

Heart disease is one of the principal causes of death in Norway, but despite this many Norwegians do not know their cholesterol level. In response, allBoots Norge pharmacies now offer a walk-in cholesterol measurement service. Advice given on healthy lifestyles includes encouragement tobe more physically active, to eat hearthealthy foods, to stop smoking and to better understand what cholesterol levels really mean.

To help address the growing issue of diabetes in the UK, Alphega Pharmacy, our network for independent pharmacists, introduced a Diabetes Risk Awareness Service for members to enable patients and customers to understand if they are potentially at risk, allowing them to take preventative action where necessary. The service is carried out by trained members of the pharmacy team inprivate consultation areas and includes discussions on lifestyle, diet and exercise, a measure of blood glucose level and advice onways to reduce the risks of developing Type 2 diabetes.

Alphega Pharmacy France also launched a diabetes awareness campaign during the year,which comprised posters and leaflets, in addition to in-depth training for pharmacists to enable them to directly support their customers.

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Similarly, Boots UK now offers a service which aims to identify a patients risk of developing Type 2 diabetes and in high risk cases a referral to a GP for a full diagnostic test will be made. Pharmacists have also been trained to offer advice to patients on lifestyle changes and how they can help to reduce their level ofrisk of developing Type 2 diabetes.

Improving healthcare through the media

We continue our partnership with the BBCs international development charity, BBC Media Action, which we have supported since 2012when Alliance Boots became its first healthcare partner.

BBC Media Action uses the power of the media and communication to tackle poverty, improve health and give people a clearer understanding of their rights. Health is a key area for the charity, which uses TV, radio and mobile phones to help save lives in more than 35 developing and transitional countries around the world.

FundraisingAt Alliance Boots, we firmly believe in the importance and value of helping good causes. Our people across all our businesses are encouraged to support and raise money for local, national and international charities supporting communities around the world.

Improving the lives of children around the world

Boots UK has supported BBC Children in Need for 10 years and, with the help of colleagues in Boots Opticians and BCM in the UK, the cumulative total raised is almost 6.5 million.

Across Boots UK, colleagues took part in numerous fundraising activities throughout the year. Events included everything from a bingo bonanza in the Nottingham support office to zumbathons on high streets across the UK and numerous fancy dress activities. No7 colleagues in stores also supported BBC Children in Needs BearFaced campaign, encouraging women to swap their make-up for a paw print in November 2013. During 2013/14, Boots UK raised around 1.0 million to support the work of BBC Children in Need.

We have also fundraised to help those living without the support of a family. Since 2004, Alliance Healthcare Czech Republic has worked with the Fund for Children in Need, anational charity which helps children who are neglected, abused or fostered through their network of Kangaroo homes. AllianceHealthcare Czech Republic works with the pharmacies it serves to raise funds through collection boxes positioned in stores. To date the partnership has raised more than CZK8.5 million in total (almost 250,000).

Farmexpert, our wholesale business in Romania, runs a series of initiatives in aid of children. These include Read with me, a project created for children in poor areas aged between three and 11 years old, in order to offer them school supplies and childrens books. Each year a Childrens Day is held on1 June and Farmexpert offers financial support for the purchase of toys and sweets which are then distributed to placement centres, both for orphans and children from troubled households. In addition, Farmexpert makes a direct contribution of more than 11,000 to purchase rucksacks.

Farmexperts other ways of helping local children during the year included the provision of dentistry services to over 420abandoned children, employees donating gifts and toys for children in orphanages and offering the chance for children with different disabilities to create paintings that were later auctioned with theproceeds going towards medical care. Farmexpert also distributed food packages tomore than 600 elderly people and children in Romania at Easter andChristmas, as part ofits ongoing commitment to the wider community.

BCM in the UK has partnered for a number ofyears with Rainbows Childrens Hospice in Loughborough. As the East Midlands only hospice for children and young people, Rainbows provides life-limited children and their families with much needed care and support, both throughout the illness and beyond, for bereaved parents and siblings. During the year, BCM raised over 2,500 through initiatives such as a book sale, a fragrance sale and an annual Rainbows lottery draw. Colleagues also volunteered and raninthe annual Rainbows Santa Fun Run inDecember 2013. Additionally, over 40Christmas presents purchased by BCM UK were wrapped by colleagues and donated to Rainbows.

Community


Partnering to support those living with cancer

Boots UK raised 2.7 million for Macmillan Cancer Support in 2013/14. In total, through significant activity with colleagues, customers and third parties, Boots UK has collectively raised 9.0 million since its partnership with Macmillan Cancer Support began in 2009.

The partnership with Macmillan Cancer Support continues to engage our people and customers across Boots UK stores, employees at the support office in Nottingham and stakeholders more widely to support the charity which helps people who are living with cancer.

Notable events during the year included colleagues from Boots UK and the wider Group climbing Mount Kilimanjaro in Tanzania. Scaling 5,895 metres of Africas highest mountain, the team of 60 employees raised more than 380,000. In addition, August and September 2013 saw a series of nine sponsored Miles for Macmillan walks involving hundreds of colleagues, along with their friends and family, in locations across the UK.

In Norway, Boots Norges partnership with ScreenCancer has seen Boots pharmacies across the country continuing to deliver a mole screening service, testing for malignant melanoma, as well as less dangerous varieties of skin cancer and other less serious illnesses. The testing portfolio in Boots pharmacies in Norway also now covers checks for colon cancer.

Since 2012, Boots Ireland has supported theIrish Cancer Society. In addition to pharmacists being trained by the charity to provide expert guidance to customers in stores nationwide, the partnership extended to a number of key campaigns and activities during the year. The National Night Walk for Night Nurses saw around 900 colleagues and a number of customers participate in a series of walks across the country, raising in excess of 45,000 for the cause. Other fundraising events included a Shave or Dye charity challenge and Boots Irelands second annual Blue Hair Day, which saw colleagues across stores dye their hair blue or shave it off entirely to raise more than 27,000 for theIrish Cancer Society. In addition, BootsIreland ran Breast Cancer Awareness month in October 2013 and Lung Cancer Awareness month in January 2014.

In 2013/14, 190,000 was raised for the Irish Cancer Society, bringing the total raised so far to 338,000. In recognition of Boots Irelands fundraising commitment to the Irish Cancer Society, the business received the Best Corporate Charity Partnership award at the Fundraising Ireland Awards 2014.

Our associate business, Alliance Healthcare Portugal, held a breast cancer awareness month in association with the breast cancer charity, Associao Lao. Teams wore pink throughout October 2013 to raise awareness of breast cancer prevention and treatment.

Support for blind and partially-sighted people

The partnership between Boots Opticians and Action for Blind People, a national charity in the UK which supports blind and partially-sighted people of all ages, continued in 2013/14 with the business raising over 255,000 through a wide variety of fundraising events.

In June 2013, members of Boots Opticians Operating Committee raised more than 4,000 by cycling from the home of Dollond& Aitchison (which merged with BootsOpticians in 2009) in Birmingham, to the Boots UK support office in Nottingham, visiting as many optician practices as possible along the way. Similarly, another team completed a 17 mile sponsored walk around Rutland Water in November 2013, raising almost 1,500 for Action for Blind People.

In addition to its charitable support, the business has taken further steps to boost eye health more generally. Boots Opticians has retinal cameras installed in all locations and now includes a digital retinal check as standard in the Boots eye check. These scans enable Boots optometrists to create permanent records of a patients eye health and to track any changes.

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VolunteeringWe encourage our people to contribute in a way that benefits the wider community and encourage volunteering opportunities with our charity partners. Volunteering provides our people with a sense of pride and helps to develop their leadership and organisational skills. In addition to this, we can harness this energy towards common goals.

Volunteering across the Group

Across the Group, volunteering is an important part of how we help our local communities, with employees encouraged to give their time and effort to work on charitable projects. Boots UK, Boots Opticians and AllianceHealthcare Czech Republic all have dedicated employee volunteering programmes in place.

Alliance Healthcare Czech Republic participated in Give & Gain Day 2013 inMay2013, with three groups of colleagues helping with upkeep and renovation projects for gardens at a care home specialising in patients with autism, an ecological centre anda nature park.

In July 2013, a team of 26 colleagues fromGroup Finance and FM Solutions, our facilities contractor, dedicated their time to agardening project for a local primary school in Weybridge, UK.

Recognition for outstanding volunteering

In 2013, Boots UK was a joint winner of the Business in the Community Employee Volunteering Company of the Year Award atthe East Midlands Local Impact Awards. The award specifically recognised the efforts of 200 Boots UK colleagues who participated in renovating the Nottingham Forest Recreation Ground in May 2013. The award also recognised Boots UKs active role in helping develop healthier communities in Nottinghamshire through its charitable giving,charity partnerships, colleague fundraising and volunteering programmes.

In addition, Boots UK volunteers were credited by British responsible business charity, Business in the Community, for helping to create feel good moments for families affected by bereavement and/or domestic abuse. Throughout the year, colleagues organised parties, pamper sessions and coffee mornings for those on the waiting list for support with the Spiral charity, which provides care and support for children and families in Nottingham.

Community


GivingAlliance Boots is committed to supporting worthwhile causes that benefit the communities we serve. During the year, theGroup made cash donations totalling 1.8 million.

Where possible, we go beyond the traditional charity partnership and our involvement is more than simply a financial transaction. Weuse our position of trust within local communities to raise awareness around issues, inspire our customers to become involved, and we encourage our people to become involved too. In addition to Group-wide initiatives, all of our businesses have local charitable partnerships in place to support the communities in which they operate.

The Group has no affiliation to any political party or group in any country and makes no political donations.

Supporting others in times of crisis

Alliance Boots continues to support International Health Partners, a charity which aids relief efforts around the world through the distribution of medical products some of which are donated and others purchased through our cash donations.

In September 2013, Boots Thailand donated asupply of Boots insect repellent to the ThaiFood and Drug Administration to support communities impacted by flooding, particularly across the north-eastern regions of the country.

In November 2013, in the wake of TyphoonHaiyan, a deadly tropical cyclone which devastated South-East Asia and killed morethan 6,000 in the Philippines alone, Alliance Boots donated medical supplies through International Health Partners to help survivors on the ground, many of whom were left homeless.

Donating to the local community

The Boots Charitable Trust plays animportant role in supporting local communities close to its historic homein Nottingham.

Since its establishment in 1970, the BootsCharitable Trust has donated more than 10 million to local charities and organisations which benefit the people of Nottinghamshire. Boots UK continues to support the Boots Charitable Trust, donating 250,000 to it in 2013/14. The trust distributes small grants tohealth, lifelong learning, community development and social care charities in the county. Examples of recent grantees can be found on the Boots UK CSR website.

Alliance Healthcare Italia, our associate business, has a long term relationship with Banco Farmaceutico, a not-for-profit organisation based in Milan, Italy, which provides medical supplies to disadvantaged people inthe country. The business supports BancoFarmaceuticos medicines collectionbystoring donated items in Alliance Healthcare Italia warehouses around Italy for them topick up and distribute via a network of charitable partners. Working with Banco Farmaceutico, Alliance HealthcareItalia also identifies surplus stock that can benefit charities. For example, in February 2014 thebusiness donated over 1,500 units of arespiratory drug. Only drugs that have previously been requested are supplied, inorder to ensure that efforts are focussed onmeeting real and specific needs.

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Community contributions dataDuring 2013/14, our community contributions increased by 0.3 million to a total of 5.4million. These contributions comprised cash donations (charitable and other donations) and non-cash donations, which included employee time, in kind donations and also management costs.

The 0.3 million increase in community contributions was mainly due to higher employee time reflecting our employees commitment to fundraising and volunteering, the level of cash contributions being maintained.

How we contributefor the year ended 31 March 2014*

Cash 33%

Non-cash 67%

How we contributefor the year ended 31 March 2014

Continuing operations2014*

million2013

million

Cash donations Charitable 1.6 1.5 Other 0.2 0.3 1.8 1.8Non-cash donations Employee time 2.1 1.6 In kind donations 0.9 1.1 Management costs 0.6 0.6

5.4 5.1

What we supportfor the year ended 31 March 2014*

Health 56%

Education 19%

Social welfare 17%

Other 8%

What we supportfor the year ended 31 March 2014


million2013

million

Health 3.0 2.8Education 1.0 0.9Social welfare 0.9 0.9Other 0.5 0.5 5.4 5.1

Our key focus areas for community contributions are health, education and social welfare. During the year contributions increased or were maintained across all areas with the highest increase being in the health category. Charities within this category include the EORTC Charitable Trust and Macmillan Cancer Support.

As a leading international pharmacy-led health and beauty group we are in a position to make a significant impact on major issues, such as supporting the fight against cancer, through our international partnership with the EORTC Charitable Trust. We also aim toimprove the wellbeing of the local communities in which we operate, and our organisation is well placed to support local organisations and charities. Contributions to local and national organisations accounted for 85% of our donations in 2013/14.

Where we contributefor the year ended 31 March 2014*

Local 28%

National 57%

International 15%

Where we contributefor the year ended 31 March 2014


million2013

million

Local 1.5 1.4National 3.1 3.0International 0.8 0.7 5.4 5.1

Community contributions By Divisionfor the year ended 31 March 2014


million2013

million

Health & Beauty 4.0 3.6Pharmaceutical Wholesale 0.8 0.7Contract Manufacturing & Corporate 0.6 0.8 5.4 5.1

* Within KPMGs limited assurance scope.

Community


EnvironmentAt Alliance Boots, we are determined to be a leader and an example to others in addressing the threat of climate change. We pursue many practical activities which contribute to the overall reduction of our carbon footprint.

Our businesses are fully aware of their responsibilities to the environment. In addition to mandatory compliance programmes, many of our businesses have undertaken a number of voluntary initiatives, which demonstrate the importance that is given to environmental issues and how these are moving up the business agenda.

We want to help people look and feel their best, but we want to do this within the framework of helping the planets wellbeing too.


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During the year, Boots commenced a chiller replacement programme, which involves installing over 2,500 new food and drinksrefrigeration cabinets and related refrigeration equipment in around 780stores across the UK and the Republic ofIreland at a cost of just under 30 million.

The replacement chillers are 40% more energy efficient, helped by better performing refrigerant gasses, variable capacity compressors, LED lighting and low energy fans. The chillers will help reduce food waste through better temperature controls and are easier and less expensive to maintain.

We believe investment in such efficient technology marks an important step forward by Boots UK in reducing energy consumption in its stores across the country, while at the same time improving the reliability of our food offering for customers.

Investing in more efficient technology

We continue to look for ways to reduce our impact on the environment and take steps that will contribute to a more sustainable future.

In focus


Environment

2013/14 environmental targetsObjective: To reduce the Groups like for like CO2 emissions. Our priorities for 2013/14 were:

To achieve a like for like percentage decrease in usage of energy (our largest category of CO2 emissions), through increased awareness and sharing of best practice methods across the Group.

In 2013/14, on a like for like basis, we achieved 6.1% decrease in energy usage across the Group. During the year, Boots commenced achiller replacement programme, which involves installing over 2,500 new food and drinks refrigeration cabinets and related refrigeration equipment in around 780 stores across the UK and the Republic of Ireland atacost of just under 30 million. The replacement chillers are 40% more energy efficient, will help reduce food waste through better temperature controls and are easier and less expensive to maintain. Boots buildings in Great Britain, with the exception of power generated on the Nottingham campus and landlord supplies, are now powered by green (low carbon) electricity. Inaddition, Boots UK continues to be compliant with the Carbon Reduction Commitment Energy Efficiency Scheme andfrom April 2013 was re-accredited with the Carbon Trust Standard.

To minimise the level of non-essential business travel through increased usage of the Group-wide videoconferencing system.

Many of our businesses are making greater use of the Group-wide videoconferencing systems, including the Group Board and related committees. This is saving valuable management time and travel costs, as well as reducing carbon emissions. To help reduce the impact of essential travel, the Groups new company car policy now includes more fuel-efficient cars and a prohibition on cars that achieve less than 40 miles per gallon on average.

Objective: To reduce the Groups like for like total waste levels and increase the proportion of waste that is recycled. Our priority for 2013/14 was:

For each principal business within the Group to achieve a waste recycled level of 50% or higher, where local facilities exist to enable recycling.

During the year 14 of our principal businesses achieved over 50% waste recycled levels. Across the Group, businesses have undertaken numerous initiatives to both limit the amount of waste produced and increase the proportion which is recycled. During the year, Farmexpert in Romania and Hedef Alliance in Turkey both launched awareness campaigns to encourage employees to separate their waste for recycling across office locations. BCMs UK site continued toachieve zero waste to landfill.

Sustainable productsImproving the environmental performance of the retail products wesell is a natural way of making a positive contribution to sustainable development. It is also a stimulus forinnovation, developing new product ideas that enhance customer confidence and convenience. Our aim therefore is to take a holistic approach to product sustainability, embracing the whole product lifecycle, from concept and design through to customer use and final disposal of packaging and waste product.

Preserving the planets biodiversity is a key aim of sustainable development and involves all sectors of society. Our commercial operations have the potential to impact onbiodiversity in a variety of ways. For Alliance Boots, the two main areas of impact arise from the sourcing of raw materials and from the facilities we operate.

Our environmental management processes seek to minimise the negative impacts of these activities. We take into account protected species and habitats, as required by national and international legislation, and we encourage opportunities to promote and protect biodiversity.

The impact of chemicals on human health and the environment has long been a matter of concern for manufacturers and retailers in relation to product formulation, development and manufacture. To regulate our chemicals usage across our retail products we have set realistic but challenging targets to monitor and manage our usage and related impact.

Building on the natural goodness of Botanics

Our Botanics range combines natural ingredients with scientific formulations to create effective skincare products. The range was first launched in 1995, in collaboration with scientists at the Royal Botanical Gardens, Kew. Expert advice ensures the vital plant extracts used in our Botanics range are sourced to conserve biodiversity.

Following a product sustainability process review in 2012, we have continued to make improvements to the Botanics range throughout 2013/14, from packaging and recyclability, to the sourcing of raw materials that meet our strict sustainability criteria. Theproduct sustainability process checks against 24 criteria across the product journey. This establishes a holistic footprint from start to finish for each product, focussing attention on where improvements can bemade.

In recognition of our efforts to continually improve the sustainability performance of the range, Botanics was named winner of the Natural Capital award at The Guardian Sustainable Business Awards 2014.


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Carbon management data

Total Group CO2 emissions By sourcefor the year ended 31 March 2014*

Energy 60%

Product delivery 34%

Business travel 6%

Total Group CO2 emissionsBy source for the year ended 31 March 2014

Year on year growth

Continuing operations

2014*000

tonnes

2013000

tonnes TotalOrganic

basis

Energy 251.6 263.0 -4.3% -6.1%Product delivery 141.7 137.9 +2.8% +0.2%Business travel 27.6 27.0 +2.2% +0.9% 420.9 427.9 -1.6% -3.6%

Total Group CO2 emissions By Division for the year ended 31 March 2014

Year on year growth


2014*000

tonnes

2013000

tonnes TotalOrganic

basis

Health & Beauty 238.1 250.7 -5.0% -5.0%Pharmaceutical Wholesale 160.6 153.7 +4.5% -1.1%Contract Manufacturing & Corporate 22.2 23.5 -5.5% -5.5% 420.9 427.9 -1.6% -3.6%

Saving energy We aim to reduce our energy consumption wherever possible across all our operations.

We have a two-pronged approach to reducing our energy use: through education and raising awareness, and through the introduction of new technology.

Energy use By Division (GWh)for the year ended 31 March 2014*

Health & Beauty 66%

PharmaceuticalWholesale 23%

Contract Manufacturing & Corporate 11%

CO2 emissions from energy By Divisionfor the year ended 31 March 2014

Year on year growth


2014*000

tonnes

2013000

tonnes TotalOrganic

basis

Health & Beauty 187.4 201.1 -6.8% -6.8%Pharmaceutical Wholesale 44.3 41.9 +5.7% -5.3%Contract Manufacturing & Corporate 19.9 20.0 -0.5% -0.5%

251.6 263.0 -4.3% -6.1%

CO2 emissions from energy decreased by 4.3%, 6.1% on an organic basis, mainly due to a milder winter in Europe and energy efficiency projects in many of our businesses.

Managing carbonCarbon management is one of the biggest environmental challenges the world faces today. Alliance Boots recognises how important this is and we seek to substantially reduce the carbon intensity of our businesses.

Energy use is by far the biggest contributor toour carbon emissions, and our health and beauty stores continue to be the main energy users in the Group. Boots UK is continuing toemploy technology that enables it to monitor energy use in its stores and respond quickly to unexpected increases. A key aim is to minimise energy usage when stores are closed.

Boots UK continues to be compliant with theCarbon Reduction Commitment Energy Efficiency Scheme, and from April 2013 was re-accredited with the Carbon Trust Standard. In addition, green (low carbon) electricity powers all Boots buildings in Great Britain, with the exception of power generated on the Nottingham site and landlord supplies.

Across the Group, carbon dioxide (CO2) emissions resulting from product delivery arecalculated by adding emissions for our owned fleet vehicles and those of third party contractors, where they are acting solely on our behalf, and using their transport for our operations only.

* Within KPMGs limited assurance scope. Organic basis excludes the impact of acquisitions made in the prior year. To account for material changes in conversion factors provided by DEFRA, the carbon footprint from standard tariff electricity for all countries and from air travel has been restated for prior year.Refer to the data management process section.


Environment

CO2 emissions from energy By typefor the year ended 31 March 2014*

Electricity 79%Gas 12%

Other 9%

Cutting energy across the Group

Across the Group our businesses arecontinuing to seek new ways to reduce the impact of their operations. Initiatives are trialled, lessons are learned and experiences are shared across all our businesses.

For example, following the success of Boots UKs pioneering EnergyCare project (which has now seen more than 19,000 colleagues complete e-learning modules to raise their awareness about energy saving), Alliance Healthcare UK has been working closely with Boots UK to establish an adapted version of the campaign for all its sites, including distribution centres and support offices.

Launched in March 2014, the Alliance Healthcare UK EnergyCare project isa three-part campaign focussed on small steps that colleagues can take to make big reductions in their energy consumption, both at work and at home. The energy project is supported by a new energy report dashboard which is provided to distribution centre managers each month to inform them ofprogress.

In recognition of the importance of energy conservation within Alliance Boots, a Group-wide energy event took place in September 2013. In addition to sharing best practice from successful energy initiatives from across different functions and businesses, the event included an awards ceremony to recognise star achievers.

Sustainable transportTransport is a key contributor to our carbon footprint. The movement of goods from distribution centres to retail stores, pharmacies and hospitals generates carbon dioxide. We are committed to reducing the amount of carbon dioxide produced by our distribution operations whilst maintaining our high service level commitment to provide frequent, on time deliveries for critical pharmaceutical products. In addition, we work with our manufacturers to reduce their carbon footprint, in both their supply of product to us as well as their own sourcing of products.

As well as making environmental sense, itmakes commercial sense for vehicles to travelmore kilometres per litre of fuel, so wecontinue to look at a range of different activities to improve this efficiency. These include driver training, the purchasing of more fuel efficient vehicles, and optimising delivery routes.

The nature of our Pharmaceutical Wholesale Division requires us to maintain and usearelatively large fleet of vehicles in ordertoenable the high level of service weprovideour pharmacy customers. OurHealth&Beauty Division operations require fewer vehicles. Owing to the nature of our business activities, rail usage is low.

CO2 emissions from product deliveryBy Division for the year ended 31 March 2014

Year on year growth


2014*000

tonnes

2013000

tonnes TotalOrganic

basis

Health & Beauty 39.0 38.4 +1.6% +1.6%Pharmaceutical Wholesale 101.5 97.4 +4.2% +0.5%Contract Manufacturing &Corporate 1.2 2.1 -42.9% -42.9%

141.7 137.9 +2.8% +0.2%

Group CO2 emissions from product delivery increased 2.8% to 141.7 thousand tonnes in 2013/14 mainly due to the impact of including businesses acquired in the prior year. On an organic basis, CO2 emissions from product delivery increased 0.2% due to the increasing international distribution of our products andthe expansion of our business into new services and contracts, partially offset by lower emissions in our Boots UK logistics operations. Contract Manufacturing emissions from product delivery decreased 42.9% due to lower volumes and the optimisation of vehicle transport.

* Within KPMGs limited assurance scope. Organic basis excludes the impact

of acquisitions made in the prior year.Refer to the data management process section.


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CO2 emissions from business travelBy type for the year ended 31 March 2014

Year on year growth


2014*000

tonnes

2013000

tonnes TotalOrganic

basis

Road 19.0 18.9 +0.5% +0.5%Air 7.9 7.4 +6.8% +1.9%Rail 0.7 0.7 0.0% +0.7%

27.6 27.0 +2.2% +0.9%

Business travel AirBy length of haulfor the year ended 31 March 2014


000 km2013

000 km

Short haul 3,953 3,088Medium haul 11,629 11,981Long haul 12,905 12,066

28,487 27,135

CO2 emissions from business travelBy Division for the year ended 31 March 2014

Year on year growth


2014*000

tonnes

2013000

tonnes TotalOrganic

basis

Health & Beauty 11.6 11.2 +3.6% +3.6%Pharmaceutical Wholesale 14.8 14.4 +2.8% +0.7%Contract Manufacturing &Co