Creating motivation for
Sustainable development SUSTAINABLE DEVELOPMENT REPORT
2019
LIST OF ABBREVIATIONS ABBREVIATED
INTERPRETATION :
AGM:
Annual General Meeting
BFO:
Business Force One
BOD:
Board of Directors
BOM:
Board of Management
CIT:
Corporate income tax
DHG Pharma: DHG PP1: FS:
DHG Pharmaceutical Joint Stock Company/Parent Company DHG Packaging and Printing 1 One Member Limited Company Financial statements
GLP:
Good Laboratory Practice
GMP:
Good Manufacturing Practice
GRI:
Global Reporting Initiative
GSP:
Good Storage Practices
HOSE:
Ho Chi Minh Stock Exchange
HR:
Human Resources
IR:
Investor Relations
ISO: ISO/IEC 17025: KPH: KPI: PIC/s – GMP: QC: QCVN: QM: R&D:
International Organization for Standardization General requirements for the competence of testing and calibration laboratories undetected Key Performance Indicators Pharmaceutical Inspection Co-operation Scheme in the field of Good Manufacturing Practice Quality Control Vietnamese standards Quality Management Research and Development
RM:
Risk management
ROA:
Return on Assets
ROE:
Return on Equity
ROS:
Return on Sales
VND:
Vietnamese Dong
WHO:
World Health Organization
THEME OF SUSTAINABLE REPORT 2019
As a leading bird in the Vietnam pharmaceutical industry, DHG Pharma not only plays a pioneering role on the journey of creating sustainable values, but also contributes significantly to the overall development of the industry. This is aimed to motivate pharmaceutical enterprises to accompany development, bringing the Vietnam pharmaceutical industry steadily go further. That is the full meaning for the theme of the Sustainable Development Report 2019 of DHG Pharma - “Creating motivation for sustainable development”.
CONTENTS SUSTAINABLE DEVELOPMENT REPORT 2019 04
GRI
100
GRI
100
GRI
GRI
GRI
100
200
400
OVERVIEW OF DHG PHARMA GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102
300
08 10 12 14 16 18 20 24 26
DHG Pharma at a glance Vision - Mission - Core values Key milestones Distinguished awards in 2019 Sustainable development indicators in 2019 Events in 2019 Business lines and market regions Value chain of DHG Pharma Factors creating a sustainable developement
OVERVIEW OF THE SUSTAINABLE DEVELOPMENT GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102
30 34 44 52 58 65 68 72 76 80
Overview of the sustainable development report Context of sustainable development Ethics and integrity Code of conducts with stakeholders Stakeholder engagement Determination of material aspects Sustainability governance structure Corporate governance towards sustainable development Risk management activities Direction for risk management in 2020
CREATING SUSTAINABLE VALUE
GRI 201 GRI 201 GRI 201, 203, 205, 206 GRI 416, 417, 418 GRI 102, 202, 401, 403-409 GRI 204, 301 GRI 413
GRI
Message of the sustainable development report
84 90 94 100 110 136 138
Building a prosperous enterprise Increasing benefits for shareholders and investors Complying with regulations of state agencies Fulfilling customers’ needs Developing professional personnel Building sustainable relationships with partners and suppliers Spreading community responsibility
LINKING WITH ENVIRONMENTAL GOALS GRI 302 GRI 303 GRI 305, 306 GRI 307
146 149 152 162
Energy Water Emissions, effluents and waste Environmental compliance
GRI STANDARD 168
Reference table according to GRI standards
Creating motivation for sustainable development
3
GRI
102
MESSAGE OF THE SUSTAINABLE DEVELOPMENT REPORT
Despite the future with many challenges ahead, DHG Pharma considers it an opportunity and is ready to catch upcoming trends. It is these challenges that are a strong motivation, promoting DHG Pharma towards a sustainable development.
4 DHG Pharma - Sustainable development report 2019
Dear valued Shareholders, Partners, Customers and all Employees! The growth and development of the past 45 years has been a long-standing journey, DHG Pharma has always been consistent with its strategic goals, considering the environment and society to be an indispensable responsibility in the relationship with business activities of the Group. Growth and profits are economic goals, but offering belief and dedication for public health are the true and long lasting values we aim to. Ladies and Gentlemen!
In 2020, facing the difficulties and challenges of the economic situation, DHG Pharma continues to maintain its business orientation in association with the goal of sustainable development, trying to reach and meet the expectations of all Stakeholders. DHG Pharma is committed to: With the Government Strictly abide by the State’s regulation and contribute positively to the economy. With Customers Always provide high quality products and services to consumers.
Starting the new decade as the first year in the position of the General Director at DHG Pharma, I expect a strong breakthrough of a leading pharmaceutical brand in Vietnam with the determination of all members in the Group. We have always been consistent with the sustainable development model that DHG Pharma has been building, which focuses on three main elements:
With Shareholders
• Constantly increasing DHG Pharma’s enterprise values, maintaining its position as the largest Generic pharmaceutical company in Vietnam, and improving competitiveness in domestic and foreign markets, aiming to become a multinational company.
Actively join hands with the community to repel the Covid-19 pandemic, contribute to stabilizing people’s lives, improving the quality of healthy and beautiful life.
• Continuing to promote activities of improving the production line and factory system according to global standards, raising standards for existing products, in parallel with launching new products of high quality standards to diversify DHG Pharma’s brand portfolio. • Preserving and promoting the tradition and identity of DHG Pharma, at the same time, modernizing and professionalizing the management structure, enhancing the ability of governance and internal control to bring the highest efficiency in all activities.
Grow and develop sustainably based on transparency criteria in all activities. With Employees Commit to the regime, stable welfare for employees to create a close relationship with the Company. With the Community
With Partners Constantly expand cooperation, joint ventures, associates to develop and expand on the principle of accompanying development. With these commitments, we believe that DHG Pharma will continue to receive the enthusiastic support from our valued Shareholders, Partners and Customers.
Wishing you all health and success! Best regards,
MASASHI NAKAURA General Director
Creating motivation for sustainable development
5
OVERVIEW GRI
102
OF DHG PHARMA GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102
08 10 12 14 16 18 20 24 26
DHG Pharma at a glance Vision - Mission - Core values Key milestones Distinguished awards in 2019 Sustainable development indicators in 2019 Events in 2019 Business lines and market regions Value chain of DHG Pharma Factors creating a sustainable developement
The world is joining hands to create a better living environment for us all to live happily every day. Let’s start your healthy life with practical actions on our journey of creating on a Green Planet.
GRI
102
DHG PHARMA AT A GLANCE
The Company’s name in Vietnamese:
CÔNG TY CỔ PHẦN DƯỢC HẬU GIANG The Company’s name in English
: DHG Pharmaceutical Joint Stock Company
Abbreviation
: DHG Pharma
Stock sticker
: DHG (listed on Ho Chi Minh City Stock Exchange)
Headquarters
: 288 Bis Nguyen Van Cu, An Hoa Ward, Ninh Kieu District, Cantho City
Telephone
: (+84) 2923 891 433
Fax
: (+84) 2923 895 209
: dhgpharma@dhgpharma.com.vn
Website
: www.dhgpharma.com.vn
Certificate of business registration and tax code : 1800156801
8 DHG Pharma - Sustainable development report 2019
3,377,551,482,197 Owner’s equity (As at 31 Dec 2019) (VND)
1,307,460,710,000 Charter capital (As at 31 Dec 2019) (VND)
Overview of DHG Pharma
9
GRI
102
VISION - MISSION CORE VALUES
VISION
For a more beautiful & healthier life MISSION DHG PHARMA ALWAYS PROVIDES HIGH-QUALITY PRODUCTS AND SERVICES TO SATISFY THE ASPIRATION FOR A MORE BEAUTIFUL AND HEALTHIER LIFE.
10 DHG Pharma - Sustainable development report 2019
CORE VALUES
OUR HIGHEST COMMITMENTS
are quality, safety, & effectiveness.
OUR FOUNDATION FOR DEVELOPMENT
is knowledge & creativity.
OUR WAYS OF DOING BUSINESS
are with responsibility, cooperation, & promotion.
OUR PRIDE
is DHG Pharma’s cultures and identity.
OUR LONG-TERM GOAL
is mutual prosperity with partners.
OUR COMPETITIVE ADVANTAGE
is the superior differentiation.
OUR ACTIVITIES ALL CENTERED AROUND
the benefits of the community.
Overview of DHG Pharma
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GRI
102
KEY MILESTONES
DHG Pharma continues to maintain its leading position in the industry after a year of challenges and difficulties, creating new values to serve consumers.
1974 2007
2008 2011
1974
2008
Established and was formerly known as the 2/9 Pharmaceutical SOE Factory.
Implemented modern and effective management tools: 10.5S and Balance Score Card.
2004 Hau Giang Pharmaceutical Integrated Factory was equitized to become DHG Pharmaceutical Joint Stock Company.
2006 DHG Pharma’s stocks were listed on HOSE
2007 Reconfirmed the vision, mission and 7 core values. Increased the charter capital from VND 80 billion to VND 200 billion.
12 DHG Pharma - Sustainable development report 2019
2009 Successfully implemented the strategy 20/80 products, customers and personnel.
2010 Successfully implemented the strategy “tripod”: shareholders, customers and employees.
2011 Successfully implemented the “Factory Productivity Improvement Project” and the “Project to improve performance of subsidiaries”.
2012 2015
2016 2019
2012
2016
The topic “Today’s solution is tomorrow’s issue” brought high efficiency to the Company in cost control, risk management (RM) and policies.
The first year of the five-year strategy 2016-2020, the beginning of sustainable and effective development.
2013 Completed the construction of the new Non-Betalactam factory and DHG Printing and Packaging 1 Plant Project in Tan Phu Thanh Industrial Zone.
2017 Smooth transitions of the 2 senior positions in the Company: Chairman of the Board of Directors (BOD) and General Director.
2018
Celebrated 40th years of establishing DHG Pharmaceutical Joint Stock Company and 10 years of equitization.
Foreign Ownership Limit Lifting at DHG Pharma from 49% to 100% of charter capital. PIC/s - GMP and Japan – GMP standards were granted for production lines.
2015
2019
Laid the groundwork for restructuring and internally preparing for the new growth period.
Marked the 45th historical milestone for “For a More Beautiful and Healthier Life” and the first year to officially become a member of Multinational Pharmaceutical Companies (strategic shareholder Taisho owns 51.01% of the Company’s capital).
2014
Overview of DHG Pharma
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DISTINGUISHED AWARDS IN 2019
The prestigious awards are the evidence that shows DHG Pharma has steadily overcome all challenges, continuously creating outstanding values and strong breakthroughs in the future that, in turn, bring added values to all of its relevant parties.
50
06 CONSECUTIVE YEARS
TOP
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BEST LISTED COMPANIES
Voted by Forbes Vietnam.
0 4 C O N SECUT IV E YEA RS
02 CO NSE CUTI VE YE ARS
TOP
40
TOP
10
MOST VALUABLE BRANDS IN VIETNAM
PRESTIGIOUS PHARMACEUTICAL COMPANIES IN 2019
Voted by Forbes Vietnam
0 8 C ON S ECUT IV E YEA RS
3 criteria for Vietnam Report to vote for are financial capacity, media reputation, and survey of pharmacists and enterprises
24 CO NSE CUTI VE YE ARS
TOP
TOP
50
100
VIETNAM’S BEST PERFORMING COMPANIES
VIETNAMESE HIGHQUALITY GOODS
LARGEST PUBLIC COMPANIES IN 2019
Organized by Vietnam Investment Review Magazine
Voted by consumers
Voted by Forbes Vietnam
12 C ON S ECUT IV E YEA RS
04 CO NSE CUTI VE YEA R S
TOP
TOP
10 LARGECAP BEST ANNUAL REPORTS Jointly organized by HCMC and Hanoi Stock Exchanges, Investment Review Magazine and Dragon Capital
5
RANKED 1ST FOR THE BEST CORPORATE GOVERNANCE REPORTS Jointly organized by HCMC and Hanoi Stock Exchanges, Investment Review Magazine and Dragon Capital.
BEST SUSTAINABLE DEVELOPMENT REPORTS Jointly organized by HCMC and Hanoi Stock Exchanges, Investment Review Magazine and Dragon Capital
Overview of DHG Pharma
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102
SUSTAINABLE DEVELOPMENT INDICATORS IN 2019
DHG PHARMACEUTICAL JOINT STOCK COMPANY
SUSTAINABLE ECONOMIC GROWTH
ECONOMY DHG PHARMACEUTICAL JOINT STOCK COMPANY
INVESTMENT IN HUMAN RESOURCES DEVELOPMENT
SOCIETY
CONTRIBUTION TO THE COMMUNITY DEVELOPMENT
COMMITMENT TO THE QUALITY OF PRODUCTS AND SERVICES
ENVIRONMENT
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JOINING HANDS FOR ENVIRONMENTAL PROTECTION
3,897
631
523
NET SALES (VND BILLION)
PROFIT AFTER TAX (VND BILLION)
DIVIDEND 2019 (VND BILLION)
203
90
>90%
5.4
2,900
20,250
02
39
308
TOTAL TRAINING HOURS (THOUSAND HOURS)
CONTRIBUTION TO THE COMMUNITY (VND BILLION)
PRODUCTION LINES MEET HIGH STANDARDS (PIC/S – GMP AND JAPAN – GMP)
TRAINING PROGRAMS
JOBS (PEOPLE)
PRODUCTS MEET BIOEQUIVALENT
16,000 7.2% PEOPLE JOIN #GOGREENDHG CAMPAIGN
WASTEWATER REUSE RATE
RETENTION RATE
FREE MEDICAL EXAMINATION AND MEDICINE (PEOPLE)
PRODUCTS ARE CIRCULATED NATIONWIDE
1.9
WASTEWATER TREATMENT VND BILLION/YEAR
Overview of DHG Pharma
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EVENTS IN 2019 “FOR A MORE BEAUTIFUL AND HEALTHIER LIFE”
FEBRUARY JANUARY
DHG Pharma donates funds to accompany Can Tho Health sector in people’s healthcare activities on the occasion of Vietnamese Doctor’s Day. The Youth Union of DHG Pharma presents gifts to children at Thien An Orphanage (Can Tho).
APRIL MARCH Coordinate with the volunteer medical team of Can Tho Department of Health and the Red Cross to implement free medical examination and medicine to 500 poor households in Thoi Lai District, Can Tho. full of love with DHG Pharma’s women on 8 March.
JUNE MAY
The festival of love named “Family is number 1” at DHG Pharma on the occasion of Vietnamese Family Day. Organize Funny summer for discovery - Summer experience program for the children of DHG Pharma’s employees.
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JULY
Donate free medicine gifts to 300 policyfavored households, poor households and 100 disadvantaged pupils in Ca Mau and Kien Giang.
SEPTEMBER
Birthday program with the theme of “DHG Pharma 45th historical milestone for a more beautiful and healthier life”. This is an occasion for the members of DHG Pharma to look back the proud milestones and make efforts for a new development stage.
AUGUST
DHG Pharma commends and rewards students who are children of the Company’s employees for excellent academic achievements in 2018-2019.
OCTOBER
Be grateful to parents of the Company’s employees, retired employees with the “Timeline” theme.
DECEMBER
NOVEMBER
Organize the Customer conference program named 2019 VIP AWARD with the theme of VIP CONNECTION. The program is aimed at connecting DHG Pharma and customers more prosperously towards a new higher level.
Organize dialogues for employees. This is an annual activity to show comprehensive care to employees towards the Company’s sustainable development goals.
Overview of DHG Pharma
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GRI
102
BUSINESS LINES AND MARKET REGIONS
CORE BUSINESS LINES The core business lines of DHG Pharma is to manufacture and trade
PHARMACEUTICALS
HEALTH SUPPLEMENTS
COSMECEUTICALS
DHG PHARMACEUTICAL JOINT STOCK COMPANY
At the beginning of 2020, the Company had
237
visa numbers for pharmaceuticals with a diverse product list
20 DHG Pharma - Sustainable development report 2019
71
visa numbers for dietary supplements and cosmeceuticals.
DHG Pharma has always been in the leading position with innovative steps in researching and developing a variety of products to meet the needs of Vietnamese people’s health care and protection nationwide
In order to easily manage and invest in branding, DHG Pharma divides the product portfolio by treatment functions into the following categories:
2. ANALGESIC ANTIPYRETIC
1. ANTIBIOTIC
6. GASTROINTESTINAL - HEPATOBILIARY
7. NEUROLOGY OPHTHALMOLOGY
4. NUTRITION
3. RESPIRATORY
8. CARDIOVASCULAR - DIABETES
9. SKIN CARE
5. MUSCULOSKELETAL
10. IMPORTED PRODUCTS
11. OTHERS
IN 2019, SALES OF ANTIBIOTIC AND ANALGESIC - ANTIPYRETIC ACCOUNTED FOR
50%
>
OF THE TOTAL SALES.
Overview of DHG Pharma
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GRI
102
BUSINESS LINES AND MARKET REGIONS
MARKET REGIONS
DOMESTIC MARKET
98%
DOMESTIC MARKET ACCOUNTED FOR
OF THE SALES VOLUME.
Through 45 years operating in Vietnamese pharmaceutical market, DHG Pharma was considered an enterprise with the most widespread and largest distribution network, with:
35
BRANCHES NATIONWIDE FROM CITY TO COUNTRYSIDE (DISTRIBUTING TO 3 STAGES: CITY, DISTRICT AND COMMUNE)
32,000
>
CUSTOMERS ESPECIALLY, CUSTOMERS OF LOYAL CLUB ARE CONSTANTLY GROWING.
DHG Pharma’s products are distributed to customers through the following channels:
Pharmacy Channel: Including agents, private pharmacies, hospital pharmacies, distribution companies, retail stores, etc.
22 DHG Pharma - Sustainable development report 2019
Hospital Channel: Including hospitals, clinics and medical centers, etc with a seperate and specialized sales representative system.
Modern Channel and E-commerce Channel: DHG Pharma also distributes products through the modern channel such as supermarkets, pharmacy chains, the e-commerce channel.
EXPORT MARKET DHG Pharma has developed its sales network in 14 countries such as Singapore, Cambodia, Laos, Myanmar, Moldova, Mongolia, Nigeria, Yemen, Indonesia, Malaysia, Russia, and etc with approximately 117 registered visa numbers.
In the future, the roadmap to improve quality standards and strategies to develop export markets and international cooperation will bring many advantages for DHG Pharma’s products when exporting to foreign markets, which together re-affirm its leading brand and the largest exporter of Vietnam.
Overview of DHG Pharma
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GRI
102
VALUE CHAIN OF DHG PHARMA
R&D
ACTIVITIES
R&D
Production
Regulatory Affairs
Quality Supply Chain
SUPPORTING ACTIVITIES
CONSUMERS
NEARLY HALF A CENTURY AGO, DHG PHARMA HAS ALWAYS PURSUED THE GOAL TO PROVIDE HIGH QUALITY PRODUCTS AND SERVICES TO ACCOMPLISH THE MISSION OF COMPREHENSIVELY IMPROVING PEOPLE’S HEALTH CARE. THIS IS ALSO THE ADVANTAGE TO ENHANCE THE COMPANY’S REPUTATION IN THE CURRENT COMPETITIVE MARKET AND CREATE A FRIENDLY AND REPUTABLE BRAND NAME IN THE HEARTS OF PARTNERS AND CUSTOMERS.
24 DHG Pharma - Sustainable development report 2019
DISTRIBUTION CHANNEL Pharmacy channel Hospital channel Export Modern channel
MARKETING Marketing
Human Resources (HR), Finance, Accounting, Legal, IT, Environment & Labor safety, etc.
CUSTOMERS
Hospitals
Pharmacies
Pharmaceutical companies, etc.
Overview of DHG Pharma
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FACTORS CREATING A SUSTAINABLE DEVELOPMENT
Resource development Successive training Mutual prosperities Value sharing
3
FOCAL AREAS
PRODUCTS
s, lier pp rs, , su sto ers inve tom rs, nt e us lde s, c eho ernm v yee ar plo , sh , go Em tners ciety r so pa
Int ern a div tion cu ers al s sto t e me pro anda r s duc rds ati , sfa ts, cti on
PEOPLE
HABITAT Soil, water, emission, and waste
Creation and innovation Guaranteed materials Modern technology Standard upgrade
DHG PHARMACEUTICAL JOINT STOCK COMPANY
Awareness-raising Energy saving Waste sources reuse and recycle Sustainable production
PP Printing & packaging
26 DHG Pharma - Sustainable development report 2019
Improvement of the process system Continuous improvement Quality improvement
POLICY AND PROCESS
3 BREAKTHROUGHS INVESTMENT METHOD
TECHNOLOGY APPLICATION
Effective budget utilization Promotion of sustainable investment Utilization of potential
Investment of IT application Risk reduction Increased connection
Overview of DHG Pharma
27
OVERVIEW
OF THE SUSTAINABLE DEVELOPMENT
GRI
102
GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102 GRI 102
30 34 44 52 58 65 68 72 76 80
Overview of the sustainable development report Context of sustainable development Ethics and integrity Code of conducts with stakeholders Stakeholder engagement Determination of material aspects Sustainability governance structure Corporate governance towards sustainable development Risk management activities Direction for risk management in 2020
Climate change, an impact of human activities, has become increasingly serious ringing an alarm bell about the air quality. When each individual’s awareness improves, a new world will be open with new air flowing in.
GRI
102
OVERVIEW OF THE SUSTAINABLE DEVELOPMENT REPORT
SUSTAINABLE DEVELOPMENT REPORT IS PREPARED AS A
Bridge
BETWEEN THE COMPANY AND ITS STAKEHOLDERS to provide an overall picture representing the announcements, review and re-evaluation of DHG Pharma’s sustainable development activities in line with the Company’s sustainable strategic orientation in the year.
30 DHG Pharma - Sustainable development report 2019
The content of the report demonstrates DHG Pharma’s approach to sustainable development issues such as commitment to stakeholders, medium and long-term sustainable development strategies, product commitment, etc. All are prerequisites to the Company’s sustainable strategy with the desire to bring a life not only healthy but also sustainable.
Overview of the sustainable development
31
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OVERVIEW OF THE SUSTAINABLE DEVELOPMENT REPORT
METHOD OF DEFINING REPORTING CONTENTS Based on the monitoring and measurement management systems, as well as the reports made in 2019, DHG Pharma develops the sustainable development report based on the latest standard - GRI Sustainability Reporting Standards of Global Report Initiative (GRI). This is the latest and broadly recognized reporting standard for the Sustainable Development Report, which is aimed to increase transparency and accountability. The report is presented specifically for each area of:
ECONOMY DHG PHARMACEUTICAL JOINT STOCK COMPANY
ENVIRONMENT
SOCIETY Simultaneously, we further refer to the Guidebook for Environmental and Social Information Disclosure conducted by the State Securities Commission (SSC) in collaboration with IFC (International Finance Corporation). Additionally, the Company’s development strategy is also triangulated with the National Action Plan in the Agenda 2030 adopted by the United Nations General Assembly in Sept 2015 with 17 sustainable development goals.
Principles for defining report contents
1.
2.
3.
4.
Stakeholder engagement
The context of sustainable development
Materiality level
Sufficiency level
Principles for defining report quality
1.
2.
3.
4.
Accurate
Balanced
Notorious
Comparable Reliable
32 DHG Pharma - Sustainable development report 2019
5.
6. Timely
SCOPE OF THE REPORT
CONTACT INFORMATION
Reporting period:
DHG Pharma is making efforts to satisfy the expectations of stakeholders in terms of information transparency and sustainable growth in business, and demonstrating corporate responsibilities to the community. Therefore, we look forward to receiving your sincere comments. All suggestions, questions about sustainable development issues, please send to the address below:
The Sustainable Development Report (SDR) 2019 is prepared in accordance with the accounting year, starting from 01 Jan 2019 to 31 Dec 2019. The SDR is separate from the Annual Report and has the same reporting period with the 2019 Annual Report. Latest report: 31 Dec 2018 Reporting cycle: every year Scope of the report: This report was prepared within the scope of operation of DHG Pharma in Vietnam’s territory in the field of pharmaceutical production and trading. It is made up of DHG Plant under the parent company, DHG Pharmaceutical Plant Branch in Hau Giang, and branches in provinces and cities across the country. The report excludes Vinh Hao Algae Processing Affiliate (DHG Pharma owned 31.36%) and Fuji Medic subsidiary (DHG Pharma owned 51%). The financial figures in this Report are referenced from the 2019 audited consolidated financial statements.
Website: www.dhgpharma.com.vn (Contact section) Tel: 02923 891 433 (Ext: 242), Finance Department Ms. Le Thi Hong Nhung (hongnhung@dhgpharma.com.vn) Finance Director Ms. Duong Kim Loan (duongloan@dhgpharma.com.vn) BOD Secretary, The person in charge of Corporate Governance, Investor Relations Team Leader – Finance Department.
Overview of the sustainable development
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SUSTAINABLE DEVELOPMENT CONTEXT
SUSTAINABLE DEVELOPMENT CONTEXT IN VIETNAM
HĂ€ N I
QU N Ä?AO HOĂ€NG SA
TP. HCM
QU N Ä?AO TRĆŻĆ NG SA
Ä?AO PHĂš QU C
CĂ”N Ä?AO
The main goal for Vietnam will be sustaining economic growth in parallel with ensuring social progress, justice, environmental and ecological protection, effective management and utilization of natural resources and a proactive response to climate change. The Government of Vietnam has issued the documents regarding the sustainable development in Vietnam as follows:
2004
Oriented strategy for Sustainable Development in Vietnam (Vietnam’s Agenda 21);
2012
2017
Decision No. 622/QD-TTg on promulgating the National Action Plan to implement 2030 Agenda for Sustainable Development;
20 MAY 2019
04 JUNE 2019
Sustainable Development Strategy of Vietnam for period of 2011-2020;
Directive No. 13/CT-TTg on Sustainable Development;
Decision No. 681/QD-TTg on a roadmap to implement Viet Nam’s sustainable development goals by 2030. Source: From the article posted in the second instalment in Nov/2019 on the Financial Magazine.
34 DHG Pharma - Sustainable development report 2019
Sustainable development viewpoints have been integrated throughout Socio-economic development strategy for the period of 2011 - 2020 and Socio-economic development plan for the period of 2016 - 2020. Vietnam has got achievements in sustainable development such as gross domestic product (GDP) growth rate, sustainable poverty reduction, compulsory education, approach to health and health care services, etc.
However, the awareness on sustainable development of many agencies, units, corporates and people was still incomplete and inconsistent; the socio-economic policies focused on rapid growth of economy and social stability without adequate and proper attention to the sustainability of the exploitation and use of associated with environmental protection, etc.
• Business environment: ranking 68/190 of economies with score of 67.93/100 (assessed by the World Bank).
• From 1999 to 2018, Vietnam increased 50.2 to 271.5 million tons.
• National competitiveness: ranking 77/140 of countries and territories (reported by the World Economic Forum).
• Area of degraded soil nationwide: 1.3 million hectares, accounting for 4% of mainland area of territory.
• GDP growth in 2019 reached 7.02% compared to 2018.
• Sign of soil with degraded fertility: 2.4 million hectares; 6.7 million hectares of soil at risk of degradation.
• Rate of poor household reduced from 12% (in 2011) to less than 4% (in 2019). • 100% of provincial and district-level units and 99.9% of communal level units met level 1 of illiteracy elimination and 80.3% of communal level units were recognized to meet level 2 of illiteracy elimination. • Percentage of health insurance participation increased from 45% (in 2009) to 89.6% (in 2019) with about 85 million people. • Universal health coverage reaches 73/100 points, higher than average point of Southeast Asia (59 points) and global (64 points).
CO2 emissions of significantly from
In order to overcome restrictions and create favorable conditions for successful performance of Vietnam’s sustainable development goals by 2030, the Prime Minister directs the Ministry of Planning and Investment to lead and cooperate with ministries, sectors, localities and stakeholders to effectively organize and implement the duties assigned in National Action Plan for 2030 Agenda. On 31 Dec 2019, the Ministry of Planning and Investment issued the Decision No. 2158/QD-BKHDT issuing Guidance on integration of the sustainable development goals to Five-year Socio-economic development plans for period of 2021-2025, 2026-2030 of ministries, sectors and localities.
Overview of the sustainable development
35
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SUSTAINABLE DEVELOPMENT CONTEXT
SUSTAINABLE DEVELOPMENT CONTEXT AT
DHG PHARMA Speaking of the development of an enterprise, DHG Pharma pays special attention to the targets of business operations in order to increase sales and profit while setting a goal for successful implementation of the sustainable development strategy. DHG Pharma’s Management not only focuses on medium and long-term economic growth targets but combines with social and environmental targets to reach harmonious benefits of stakeholders as well. Sustainable development directions integrated throughout Business development strategy of DHG Pharma creates values for enterprise, community and surrounding ecosystem.
36 DHG Pharma - Sustainable development report 2019
DHG PHARMACEUTICAL JOINT STOCK COMPANY
ECONOMY
SOCIETY
ENVIRONMENT
Overview of the sustainable development
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SUSTAINABLE DEVELOPMENT CONTEXT
DHG PHARMACEUTICAL JOINT STOCK COMPANY
ECONOMY
THE UNITED NATION STANDARDS
ACHIEVEMENTS IN 2019 TOWARDS MATERIALS ASPECTS Economy
GRI
201
ECONOMIC PERFORMANCE Orientation and achievements • Maintaining the leading position in Vietnam Pharmaceutical Industry.
Maintained the leading position in Vietnam pharmaceutical industry for 23 consecutive years in terms of salesin terms of sales and profit.
• Improving brand value, maintaining Top 50 most valuable brands in Vietnam.
Top 40 Most valuable brands in Vietnam voted by Forbes Vietnam.
• Expanding export markets.
38 DHG Pharma - Sustainable development report 2019
The export sales in 2019 reached VND 79 billion, up 24.9% over the same period.
Economy
GRI
202
MARKET PRESENCE Orientation and achievements Ensuring the quality of life for employees and their families to be above the average level.
Economy
GRI
203
The minimum income of newly recruited employees at DHG Pharma is 1.3 - 1.5 times higher than the regional minimum wage in Can Tho, Ho Chi Minh, and Hanoi.
INDIRECT ECONOMIC IMPACT Orientation and achievements Maximizing enterprise values and increasing interests of stakeholders.
Contributed to the Government’s budget: VND 225.8 billion. Dividend of 2019: VND 523 billion. Total transaction value in the year with suppliers: VND 6,603 billion. Contributed to the “Fund for a more beautiful and healthier life”.
Economy
GRI
204
PROCUREMENT PRACTICES Orientation and achievements Searching for more sources of raw materials, packaging with competitive quality and prices.
Economy
GRI
205
ANTI - CORRUPTION Orientation and achievements Ensuring DHG Pharma’s operations are public and transparent.
Economy
GRI
206
Raw materials are imported from Europe, America, China, India, etc. Each raw material of DHG Pharma has 2 -3 suppliers.
The Company did not record any violations related to corruption.
ANTI - COMPETITIVE BEHAVIOR Orientation and achievements Ensuring competition and fairness.
All transactions, external relations, business activities, and other activities were closely monitored to ensure that DHG Pharma’s development goals are on track.
Overview of the sustainable development
39
GRI
102
SUSTAINABLE DEVELOPMENT CONTEXT
THE UNITED NATION STANDARDS
SOCIETY ACHIEVEMENTS IN 2019 TOWARDS MATERIALS ASPECTS Society
GRI
401
Society
GRI
403
EMPLOYMENT Orientation and achievements Maintaining and improving the quality of activities and programs caring about employees’ health and lives.
Created jobs for 2,900 people. Average income: VND 19.9 million/person/month. 100% of benefits for maternity, women raising children under 12 months of age, etc was guaranteed.
OCCUPATIONAL HEALTH AND SAFETY Orientation and achievements Ensuring labor safety in production.
40 DHG Pharma - Sustainable development report 2019
100% of employees were offered periodic health check-ups. The Company complied with labor safety regulations Occupational safety trainings were in accordance with plans. The Company checked and evaluated training effectiveness and awareness of employees.
Society
TRAINING AND EDUCATION
GRI
Orientation and achievements
404
Society
GRI
404 Society
GRI
406 Society
GRI
407 Society
GRI
408 Society
Training human resources with expertise, skills, and being able to adapt to changes in science and technology.
414
Society
GRI
416
Total training programs: 90.
Orientation and achievements • Gender equality, recruitment/ promotion based on each individual’s competence. Developing capacity assessment area for each job position. • Improving the quality of Union activities.
Female employees accounted for 40%. During the year, the trade union organized numerous workshops/ consultation events for employees.
CHILD LABOR, FORCED OR COMPULSORY LABOR Orientation and achievements No use of child labor.
409 GRI
Cost of training: VND 3.8 billion.
DIVERSITY AND EQUAL OPPORTUNITY, NON – DISCRIMINATION, FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
GRI
Society
Total training hours: 203,058.
DHG Pharma did not use child labor and did not mistreat, coerce or force its employees.
LOCAL COMMUNITIES Orientation and achievements • Training cultural identity and educating community awareness. • Providing knowledge about disease prevention, safe and effective use of products through the media. • Continuing the free medical examinations and medicine program • Maintaining the Youth Union’s activities such as visiting the elderly, orphans and disabled children, etc.
Contributed to the community: VND 5.4 billion. 43 free medical examinations and medicine for over 20,250 participants. Visited and sent Tet gifts for the elderly, orphans, disabled children in Can Tho City. DHG Pharma organized monthly trips to visit and give presents to elderly people. The Company weekly cooked food for children at the orphanage/disabilities Center of Can Tho City.
CUSTOMER HEALTH AND SAFETY Orientation and achievements • Promoting the application of information technology in management.
02 production lines met high standards (PIC/s - GMP, and Japan - GMP).
• Promoting product development and research.
In 2019, the Science and Technology Council at DHG Pharma received 174 ideas and improvements.
100% of infrastructure was evaluated and checked annually.
• Promoting innovation, effective savings, and waste zero. Society
GRI
417
MARKETING AND LABELING NO VIOLATION RECORDED No violation recorded
Society
GRI
418
CUSTOMER PRIVACY No violation recorded Overview of the sustainable development
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GRI
102
SUSTAINABLE DEVELOPMENT CONTEXT
ENVIRONMENT THE UNITED NATION STANDARDS
42 DHG Pharma - Sustainable development report 2019
ACHIEVEMENTS IN 2019 TOWARDS MATERIALS ASPECTS Environment
GRI
301 Environment
GRI
302 Environment
GRI
303
MATERIALS, ENERGY, WATER Orientation and achievements • The Company’s activities are always associated with protecting the environment, saving raw materials, using clean technology machines and equipment. • Using energy efficiently at the production plants.
Quantity of raw materials used in the year: 3,161 tons of raw materials and excipients.
Electricity bills: VND 45 billion. Total electricity consumption: 26,257,028 Kwh/year. Water bills: VND 2 billion. Total water consumption: 221,374 m3/year.
Environment
GRI
305
EMISSIONS Orientation and achievements • Environmental monitoring: 4 times/year.
Monitoring results were within permitted limits.
• Reduce of CO2 emission.
Environment
GRI
306
EFFLUENTS AND WASTE Orientation and achievements Periodically assessing the discharge to promptly handle and minimize environmental pollution.
Environment
GRI
307
Wastewater treatment fee: VND 1.9 billion/year. Wastewater reuse rate: 7.2%. The Company collected samples for periodic monitoring of wastewater and exhaust fume treatment systems 4 times/ year.
ENVIRONMENTAL COMPLIANCE Orientation and achievements Closely linking the two goals - economic growth and environmental friendliness.
The Company did not record any violations on environmental laws.
Overview of the sustainable development
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GRI
102
ETHICS AND INTEGRITY
CORE VALUES - CODE OF CONDUCT WITH THE MOTTO:
Essence
LET DHG PHARMA BE THE COMPANY PRIDE DHG Pharma considers this as the target with determining significance for the longevity and development of DHG Pharma. In order to do that, DHG Pharma needs to strengthen and promote DHG PHARMA’S CULTURAL IDENTITY, ensuring that all DHG Pharma’s employees strictly abide by the Company’s regulations, perform the role “Each member is a representative of DHG Pharma”, always create the best impression when contacting partners, customers as well as evoke in their interest and goodwill cooperation with DHG Pharma.
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OUR HIGHEST COMMITMENTS
ARE QUALITY, SAFETY, AND EFFECTIVENESS
With 5 major concerns of DHG Pharma as below: • Quality of products and services as the top priority. • Maximum business efficiency. • A safe and healthy working environment. • Employee’s professionalism. • Job stability and long-term dedication for every employee.
THE FOUNDATION FOR OUR DEVELOPMENT
IS KNOWLEDGE AND CREATIVITY
The human factor is a valuable resource; hence, DHG PHARMA always cares about the following matters: • Employees are properly trained and willing to take on new challenges and always thrive to achieve challenging goals. • Ideas must be created and shared everywhere at all level of the Company. • Creativity, self-improvement, innovation, and self-perfection are encouraged in every employee. • All employees always understand the constant change and must see change as an opportunity or at least as a possible challenge - if they can all work hard, wisely and coordinate/collaborate well.
OUR WAYS OF DOING BUSINESS
ARE WITH RESPONSIBILITY, COOPERATION, AND PROMOTION
• Seeking and keeping the most suitable people from all professional disciplines. We want our employees to be satisfied with the assigned work; therefore, DHG Pharma constantly strives to create a good working environment. • Making all employees understand that no matter what position they hold, they are all an indispensable part of the Company. • Defining and describing clearly the roles and responsibilities of each individual. • Issuing orders and directions to execute all Company’s policies, working regulation, codes of ethics and other recommendations in a clear, realistic, plausible way with close supervision and reminders; training inherited personnel. • Promoting, compensating, and rewarding based on a fair assessment of qualifications and work results of each employee, team’s achievement and market value.
Overview of the sustainable development
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GRI
102
ETHICS AND INTEGRITY
OUR PRIDE
IS DHG PHARMA’S CULTURE AND IDENTITY
• As for DHG Pharma, ethic is considered the potential intrinsic value, the instructions in daily actions, important factors determining the company’s reputation, the foundation for the success and sustainability of the company, portraying all characteristics of DHG Pharma’s staff. • More importantly, DHG Pharma’s image primarily depends on the action of each individual in DHG Pharma - as regarding the business activities of the Company, the biggest threat is not the financial crisis, but the crisis of the Company image. • DHG Pharma considers the construction, preservation and development of ethical standards, the value and ideal of how to organize and control tasks, and how to manage and make decisions, communication and public relations as the elements that make up the corporate culture; with the following purposes: • Enhancing the values: “Quality - Efficiency - Innovation – Loyalty - Discipline - Professionalism” in all activities of each individual and collective. • All the staffs are proud of the corporate culture on the basis of a system of ethical standards and spirit based on the specific characteristics of the company, aimed at the best value that everyone recognizes and society agrees, creating unique distinctions and durable strength of the Company on the market. • Making a good impression, a personal touch to convince society and all people; thereby cultivating reputation to strengthen the Company growth. • Building a committed and loving community from members who are good at their jobs yet thriving to improve personalities. • Taking the DHG Pharma’s identity as the inner strength, as one of the management solutions coordinate between tradition and modernity, between history and development; as a priceless asset passed from generation to generation. • Caring and implementing social responsibility with staffs; balancing among health, work and family so that employees can be responsible for to both their families and their work to contribute to long-term development.
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OUR LONG-TERM GOAL
IS MUTUAL PROSPERITY WITH PARTNERS
• On the principle of cooperation and mutual benefit, DHG Pharma maintains and develops relationships with partners on the basis of equality, healthiness, law-abiding and mutual development. • Considering customers as the ones who bring benefits to the company. Therefore, long-term and utmost objectives are to satisfy every customers’ demands, strengthening DHG Pharma product differentiation in customers’ minds. • Complying with all of the laws and regulations in order to ensure and reinforce the faith of consumers, customers, investors, stakeholders and the whole society. • Innovating and improving customer care policies featuring DHG Pharma’s culture: friendly, attentive and devoted. • Implementing the internal control system closely to prevent the violation of laws and ethics in business. • Maintaining relationships with suppliers in all fairness and transparency; bringing reasonable dividends for shareholders through profitable growth based on ethical and law-abiding operations.
OUR COMPETITIVE ADVANTAGE
IS THE SUPERIOR DIFFERENTIATION
• All the Company’s activities always aim to lead in the high technology processes (production, marketing, and management). • Creating products and services with distinguished, unsurpassed attributes, bringing new value added to the consumers; contributing to the shaping of the market orientation. • Developing and providing high-quality products, attention to health and safety of customers and consumers. • Applying the latest technology and the most advanced possible onto all the entire product cycle, including research and development, production, storage and distribution. • Expanding the resource recruitment, training and development of young generations properly, attracting and developing talents.
Overview of the sustainable development
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GRI
102
ETHICS AND INTEGRITY
OUR ACTIVITIES ALL CENTER AROUND
THE BENEFITS OF THE COMMUNITY
• DHG Pharma is a member of the community, working with the community to develop. DHG Pharma’s community activities are more effective when attached to the commitment of the high-quality products and services to its building the foundation for society. • Promulgating and adhering to the positive measures related to environment, health and safety, and promoting responsibility to increase the effectiveness of these measures. • Organizing activities to enhance the development of future generations for further contribution to the prosperity of society. • Gaining goodwill and confidence through contributions to the local community as responsible members of society; increasing Company’s awareness in the community. • One of DHG Pharma’s features is the rich history, so everyone keeps bearing in their minds the gratifying actions and manners toward those who have contributed to the establishment and development of the Company. Also, all employees support positively to charity campaigns when occurring disasters, floods, etc. • Taking care and educating the employees’ children, giving them with pride about the Company. Nurturing future generations.
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MORAL VALUES OF THE COMPANY DHG Pharma determines to become a reputable and professional company, guided by the right and appropriate policies and led by the appropriate fundamental ethical principles. • Compliance with the constitution and the laws of Vietnam as well as in all jurisdictions in which the Company operates and is responsible for non-compliance acts. • Compliance with rules and regulations issued by the Company that have to be in compliance with the laws. • Information confidentiality, managing, utilizing and protecting assets of the Company.
HONORED MORAL VALUES OF EMPLOYEES
• Optimizing and increasing value added to all stakeholders but do not trade profit with moral values. • Performing social responsibility is a mandatory requirement for all members of the Company. • Fair competition on the principle of honesty, equality, non-invasive with benefits of the State, community, and consumers. • Respecting the intellectual property of competitors, customers, partners, suppliers and etc. • Customers and consumers are the most important and privileged stakeholders because they are indispensable to the success of the Company. • Employees are valuable assets - a vital resource, who requires training, caring, respecting and treating fairly.
Responsibilities;
Professionalism;
Creativity;
Loyalty;
Dedication;
Placing group interests on top of personal interest;
PLACING GROUP INTERESTS ON TOP OF PERSONAL INTERESTS
RESPONSIBILITIES CREATIVITY SOLIDARITY - AFFECTIONATE - SHARING
HONORED MORAL VALUES OF EMPLOYEES
Solidarity - affectionate sharing;
PROFESSIONALISM
DEDICATION
LOYALTY
RESPECT, AND BE GRATEFUL TO THOSE WHO HAVE CONTRIBUTED TO THE DEVELOPMENT OF THE COMPANY
Respect, and be grateful to those who have contributed to the development of the Company.
Overview of the sustainable development
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GRI
102
ETHICS AND INTEGRITY
CULTURE OF COMPLIANCE AND RESPONSIBILITY
CULTURE OF COMPLIANCE
STAY COMMITTED TO THE
3 FOLLOWS REGULATIONS PROCESSES STANDARDS
AVOID BEING A
3 NOT EXPERT DO NOT KNOW HOW TO EXECUTE CANNOT EXECUTE DO NOT CARE
IN ALL CASES, KEEP ABIDING BY
3 PRINCIPLES TRUTH, HONESTY, USEFULNESS
50 DHG Pharma - Sustainable development report 2019
CULTURE OF RESPONSIBILITY
GIVE THE BEST
OF YOURSELF WHEN AT WORK
WHEN ISSUES ARISE,
TAKE PERSONAL ACCOUNTABILITY
IF THE PLAN DOES NOT WORK, REPLACE IT WITH A NOVEL ONE
BUT REMAIN THE SAME TARGETS
GET TOGETHER STICK TOGETHER WORK TOGETHER
WE COMMENCE WE PROGRESS WE SUCCEED
Overview of the sustainable development
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GRI
102
CODE OF CONDUCTS WITH STAKEHOLDERS
CUSTOMERS
EMPLO YEES
TH
EC
OM
MU NI
TY
RS DE RS OL TO EH E S AR NV SH D I AN
IA MED THE PRESS AND
THE AN GOVE DG OV RNME N AG ERN EN M T, CIE ENT S
ERS
SU
I PPL
DHG Pharma understands the importance of maintaining effective interaction and dialogue with the stakeholders based on trust, transparency and consistency in all activities of DHG Pharma, and also promotes ethical standards, the corporate culture that DHG Pharma has maintained and promoted in over 45 years.
52 DHG Pharma - Sustainable development report 2019
WITH CUSTOMERS WITH CUSTOMERS - CONSUMERS A.
ALL ACTIVITIES OF ALL MEMBERS OF THE COMPANY MUST AIM TO BUILD CONFIDENCE AND LONG-TERM EMOTIONAL ATTACHMENT BETWEEN THE COMPANY AND CUSTOMERS, FOR THE PRESENCE AND SUSTAINABLE DEVELOPMENT OF THE COMPANY. “Our highest commitments are quality, safety, and effectiveness” is one of the Company’s core values and commitment to customers, consumers about the products and services and also the mission that all employees of the Company shall work toward to. The Company is also committed to providing customers with products and services promptly through an extensive distribution system The Company always refrains from deceiving customers, consumers about the quality and
B.
safety of products as well as the truthfulness of the advertisements, promotions. The Company implements the policy of reasonable prices, healthy competition, compliance with legal regulations in the domestic and foreign market. Ensuring the principle of mutual benefit, the price justifies the value of products and services. The Company ensures fair competition in the market for customers. Do not provide, share business information of customers with their competitors.
BBE RESPONSIBLE WITH PRODUCTS PROVIDED TO CUSTOMERS AND CONSUMERS. Detecting and promptly notifying competent authorities and educate customers to identify counterfeit. Product information, usage, benefits and side effects must be clearly specified on the prescription label.
Dedication of products with high scientific technology content, linking the application of scientific research values into practice, the application of biotechnology in the preparation and development of products of natural origin.
Performing bioequivalence tests to prove DHG Pharma’s products are equivalent to the original brand-name drugs.
In addition to compliance with standards in the production, storage and distribution of products, the Company always strictly abides by the regulations of the Ministry of Health, Drug Administration of Vietnam, Department of Food Hygiene and Safety and local health departments. Handling inquiries and complaints about the product through the customer consultation hotline (mostly is consumers) and through the sales staff of the Company (mostly is pharmacies, hospitals, and doctors). Handling of low-quality product: According to the test results, if the unqualified batch of drugs were shipped but not yet distributed, DHG Pharma will follow control procedures for unqualified products. If the batch has been delivered, then the product recall procedures will be carried out. Overview of the sustainable development
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GRI
102
CODE OF CONDUCTS WITH STAKEHOLDERS
WITH CUSTOMERS AGENTS, DISTRIBUTORS, HOSPITALS, MEDICAL CENTERS, ETC. DHG Pharma constantly promotes and maintains relationships with agents and distributors by maintaining the commitment on discount, marketing and sales support to help agents and distributors expand their types of customers, especially preserving customer confidence. Furthermore, DHG Pharma is committed to delivering products on time, with good quality and after-sales services. Furthermore, we regularly hold customer conferences to commend and praise agents and distributors with excellent business achievements,
54 DHG Pharma - Sustainable development report 2019
in order to encourage the spirit for the upcoming business activities and long-term association along with the expansion of DHG Pharma. Quarterly, we conduct nationwide customer surveys to measure the level of customer satisfaction with the Company’s services, products, customer feedback is the most specific and comprehensive measure that help the Company continue to improve and further enhance the quality of service to meet the future needs of customers.
WITH SHAREHOLDERS AND INVESTORS DHG Pharma is committed to building relationships with shareholders and investors based on honesty, fairness and best interest for all. As a listed company, DHG Pharma’s personnel will not provide, disclose, or use internal information to advise or sell securities for themselves or for others, not to create fake demand and supply. To disclose information transparently, accurately, truthfully, fully, clearly and in a timely manner is not only the Company’s responsibility to the shareholders - investors, but also the Company’s responsibility for our own sustainable development. Be fair in the exchange and transparent in the disclosure of information to ensure equal investment opportunities for all investors.
Maintain effective communication channels for shareholders and investors, such as the Company website, annual report, Investor Relations (IR) News, direct meetings, email, phone, publications and other activities of the Investors Relations team. Never disclose confidential information of investors, shareholders with anyone for any reason, except when required by laws or authorized by the owner of the information.
WITH EMPLOYEES For DHG Pharma, employees are valuable assets. Following the criterion “our ways of doing business are with responsibility, cooperation, and promotion”, DHG Pharma attaches special importance to the development of human factor. Besides the compensation and benefits scheme with an
attractive salary, the Company always creates a working environment for unity, competition, emulation and education so that workers can bring out their creativity and dynamism, contributing to the Company’s business results. DHG Pharma is where employees with potential can develop their career and receive appropriate compensation for their contribution, and DHG Pharma is also the place with work-life balance. The Company is committed to ensuring full benefits and the legitimate rights of workers under the provisions of the labor law and other regulations of the State. The Company does not use child labor, illegal labor. Working and resting properly. The Company shows the most profound respect for the individual rights of workers, their religious preferences unless they are superstitious. Overview of the sustainable development
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GRI
102
CODE OF CONDUCTS WITH STAKEHOLDERS
WITH SUPPLIERS DHG Pharma obeys laws in terms of transactions with suppliers and follows the principles as below: • The Company ensures fair and transparent competition between suppliers, contemplating on the objective benefits that the suppliers bring to the Company on the basis of mutual prosperity. • The Company will not rely too much on economies of scale to mistreat suppliers, have arrogance or other attitude problems, making suppliers wait too long. • The Company also never use personal positions to ask for “commission” or gifts from suppliers for personal gain. • The Company never go back on the confidentiality by disclosing classified information of suppliers to their competitors.
WITH THE GOVERNMENT, AND GOVERNMENT AGENCIES • Do not perform illegal acts to censor information, which is beneficial to the Company or any individual. • Do not commit acts of bribery to gain privileges and special benefits from the Government, State agencies. • Fulfill tax obligations and contribute to the local budgets as required. It is allowed to utilize tax incentives policies of the State but absolutely cannot commit tax evasion.
WITH THE MEDIA AND PRESS Nowadays, establishing relationships with the media is essential in helping to enhance the image, improve DHG Pharma’s brand, and reach out closer to consumers. This relationship must be built on the principles of equality, and accurate, complete, clear, legal information.
56 DHG Pharma - Sustainable development report 2019
The Company has assigned a person in charge of information exchange and disclosure, other individuals cannot contact with representatives of the media to response to questions related to the Company.
WITH THE COMMUNITY As a pharmaceutical manufacturer, DHG Pharma always “take the community benefits to center upon at the start of all activities”. DHG Pharma volunteer activities show the responsibility to the community of a pharmaceutical brand that leads the Vietnam pharmaceutical industry. Community activities are more effective when being associated with the dedication of high-quality products, that aims to build a foundation for the society which always leads a healthy and beautiful life.
Care and Share IS ONE OF THREE LONG-LASTING NORMS OF DHG PHARMA
Because we are fully aware of the importance of care and share in disease prevention and treatment in communities. During the past years, besides consistently ameliorating products quality to fulfill the communities’ need to stay healthy, DHG Pharma has frequently got involved in such social activities as contributing to Golden Hearts Fund, inaugurating the funding campaign for underprivileged patients, establishing Blood Donating Club with more than 500 members, supporting rescue missions, offering aids to people affected by natural disasters and so on.
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STAKEHOLDER ENGAGEMENT
GENERAL MANAGEMENT METHOD DHG Pharma reaches out to stakeholders through multiple interactive channels and various forms. We always find out the aspirations and interests of our stakeholders so that the Company’s activities will become more and more effective, especially the issues of: EFFECTIVE ECONOMIC GROWTH
CORPORATE GOVERNANCE
DEVELOPMENT OF HUMAN RESOURCES
ENVIRONMENTAL PROTECTION
DHG PHARMACEUTICAL JOINT STOCK COMPANY
STAKEHOLDER ENGAGEMENT At DHG Pharma, to engage with stakeholders, we implement the following steps: STEP
STEP
STEP
STEP
01
02
03
04
IDENTIFY STAKEHOLDERS
PRIORITY ASSESSMENT OF STAKEHOLDERS
STAKEHOLDER ENGAGEMENT
CONSIDER BENEFITS AND EXPECTATIONS
58 DHG Pharma - Sustainable development report 2019
STEP
IDENTIFY STAKEHOLDERS
01
The Company’s stakeholders include various organizations and individuals who have ‘relations’ (or “benefits”) to the Company’s operations. They may be those who are positively or negatively affected by the Company’s activities in some way or are likely to affect the Company’s operations. DHG Pharma’s stakeholders comprise of Customers; Shareholders and Investors; Employees; Suppliers and Partners; the Government; Media, Press and the Community.
STEP
PRIORITY ASSESSMENT OF STAKEHOLDERS
02
We classify, prioritize stakeholders based on their impact and influence on the Company’s business activities. From that basis, we develop a cohesive plan for most of the stakeholders based on classification results, then establish mechanisms, procedures to access the feedback and concerns of different targeted groups. The important stakeholders of DHG Pharma are identified as follows:
CUSTOMERS
SHAREHOLDERS AND INVESTORS
IMPACT ON DHG PHARMA
High Customers
EMPLOYEES
SUPPLIERS AND PARTNERS
THE GOVERNMENT AND GOVERNMENT AGENCIES
Shareholders and Investors
MEDIA AND PRESS
COMMUNITY
Employees
The Government and government agencies Media and Press
Community
Suppliers and partners
High Low
DEPEND ON DHG PHARMA
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STAKEHOLDER ENGAGEMENT
STEP
03
STAKEHOLDER ENGAGEMENT Information and feedback from related parties are one of the important factors affecting the thinking, way of action of DHG Pharma in the management and operation of all activities of the Company. We are always looking forward to listening to stakeholders’ expectations through direct or indirect means of dialogue in an effort to bring the highest value and benefits to the stakeholders.
STAKEHOLDER ENGAGEMENT IS CURRENTLY APPLIED AT DHG PHARMA: Contact channel • Face to face meetings, information exchange via mobile/email; CUSTOMER
• Seminars, conferences, health care talk shows; • Customer care and hotline;
• Product and service quality; • Safety and impact level associated with users’ health; • Side effects; • Reasonable price policy;
• DHG Pharma’s website, social media: facebook, forum...;
• Customer satisfaction;
• Market research.
• Maintain and improvement of customers’ loyalty.
• Quarterly face to face meetings or per request; SHAREHOLDERS & INVESTORS
Main topics
• Via email; • Annual general meeting, extraordinary general meeting, general meeting by solicitation of shareholders; • DHG Pharma’s website.
60 DHG Pharma - Sustainable development report 2019
• Monthly/ quarterly/ yearly business results; • Development orientation and strategies; • The Company’s operation and applicable regulation and policies.
Contact channel • DHG Pharma’s website, mobile, email...;
EMPLOYEES
• Face to face meetings, information exchange with the Company’s union;
Main topics • Work efficiency is commensurate with salary, bonus and welfare; • Available regimes and policies;
• Internal training programs;
• Occupational health and labor safety;
• Internal programs: Labor conference, the Company’s traditional days, year-end party, family day, International Women day, sport, music performances. etc.;
• Tight relationships with colleagues;
• Employee’s surveys on the working environment; • General Director’s mailbox;
• Comfortable, respected working environment & training job development skills; • Enhancement of employees’ loyalty; • Monthly/ quarterly/ yearly business results.
• Monthly, 6-month/ yearly review conferences.
• Face to face meetings, information exchange via mobile/email; SUPPLIER AND PARTNERS
THE GOVERNMENT
• Information in paper such as bidding price, raw materials cost; • Organization of conferences & programs connecting & improving relationships with suppliers.
• Reasonable pricing policy; • Product quality; • Stable raw material sources; • Surveying suppliers meeting production environment and employee safety.
• Factory visits and checks;
• Law and government management topics;
• Report and require for instructions;
• Market and industry trends;
• Participation in conferences, seminars in terms of Medical sector, tax, etc organized by the government and Ministerial level authorities;
• Difficulties the enterprise is facing in the progress of implementing policies and regulations.
• Participation in relevant organizations and associations. • Information disclosure, press conference; • Interview and press release; THE MEDIA AND PRESS
• DHG Pharma’s website;
• Transparent information disclose on yearly operation and production results; • Information disclose if important events take place.
• Social media: facebook, youtube, etc.; • DHG Pharma’s news.
COMMUNITY
• Face to face meeting;
• Citizen’s health care;
• Medical seminars and examinations;
• Support for disadvantaged people;
• Coordination with local authorities;
• Jobs.
• Press.
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STAKEHOLDER ENGAGEMENT
STEP
04
CONSIDER BENEFITS AND EXPECTATIONS
The primary and important goal of DHG Pharma is to create lasting value for stakeholders. To achieve this goal, DHG Pharma understands the importance of maintaining effective interaction and dialogue with the stakeholders based on trust, transparency and consistency in all activities of DHG Pharma, and also promotes ethical standards, the corporate culture that DHG Pharma has maintained and promoted in over 45 years.
CUSTOMER Concern • Product quality, efficiency, safety level; • Diversified product portfolio; • Reasonable prices; • Brand reputation; • Good customer service; • IT application in sales support.
DHG Pharma’s action • Commitment to product quality is the top criteria; • Continuous improvement of technology and modern production lines; • Strict control by the closed process of product safety; • Promote of product research and development; • Expansion of distribution channel nationwide; • Response to questions from customers and organization of conferences, seminars, etc.; • Improvement of brand reputation through prestigious awards; • IT application in distribution process, managing the number of products sold and the inventory in all distributors, agents and pharmacies nationwide. 62 DHG Pharma - Sustainable development report 2019
SHAREHOLDERS AND INVESTORS Concern • Business performances; • Effective use of invested capital; • Governance capability; • Information transparency; • Stock market cap and enterprise value; • Dividend.
DHG Pharma’s action • Effective use of invested capital; • Completing management model, tightening risk control, improving the efficiency of production and business activities; • Transparent information disclosure; • Ensuring high and fair dividends for shareholders and investors.
EMPLOYEES Concern • A comfortable working environment without discrimination; • Training policies and development opportunities; • Bonus and welfare policies; • Taking care of material and spiritual life for employees; • Assessing employees’ competence in a fair, objective and scientific manner.
DHG Pharma’s action • Performing “Our ways of doing business are with responsibility, cooperation, and promotion”; • Organizing internal and external trainings to improve professional level of employees; • Creating the best conditions for capacity development and promotion opportunities; • Applying training app for leaders, sales force and all employees via Magic Mirror App (Application); • Properly executing compensation and welfare policies for every position, role and responsibility; • Evaluating employees’ competence via Key Performance Indicators (KPI) and competence framework.
SUPPLIERS AND PARTNERS Concern • Cooperation for mutual development; • Raw materials quality and price; • Specific requirements for projects invested by the Company and environmental, social issues, especially in the location where the factories are located; • Criteria for suppliers about their environmental and social responsibilities.
DHG Pharma’s action • Mutual development principles; • Utilizing raw materials efficiently, operating modern production systems and processes to ensure the best product quality; • Ensure large and stable demands for raw material suppliers; • Prioritizing suppliers meeting the requirements of management, progress, compliance with law, commitment to environmental and social responsibilities.
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STAKEHOLDER ENGAGEMENT
THE GOVERNMENT Concern • Law compliance; • Tax obligations to the government budget; • Responsible business and production activities for consumers’ health, environment and society; • Creating jobs and increasing income for local people.
DHG Pharma’s action • Strict compliance with applicable law; • Fulfilling tax obligations to the government annually; • Providing high-quality products and committing to the ethics and business principles; • Resolving employment issues and supporting the local economic improvement; • Corporate governance towards sustainable development, minimizing impacts on the environment and society.
MEDIA AND PRESS Concern • Disclosing information in accordance with regulations, promptly and transparently; • Exchanging information with the news agency clearly, accurately about the activities of the Company and the industry.
DHG Pharma’s action • Taking the initiative in information disclosure through conferences, press releases, articles, news, etc.; • Increasing the amount of information sent to the press through press releases and sending in-depth analysis articles to the press.
COMMUNITY Concern • Creating jobs and increasing income for local people; • Offering consultancy activities to improve public health; • Carrying out methods to minimize environmental impacts.
DHG Pharma’s action • Supporting the local economy, contributing to improve the lives of local people; • Contributing to the local community in various forms; • Organizing numerous health care activities, consultation conferences; • Strictly following environmental regulations, especially in the location where factories are located; • Making sustainable development become an operating target.
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GRI
DETERMINATION OF MATERIAL ASPECTS
102
MANAGEMENT METHOD As for material aspects, DHG Pharma identifies the management method based on the context of the domestic and international pharmaceutical industry, feedback and concerns of related parties. DHG Pharma identifies material aspects in the relationship between the economy, society, environment and the Company’s business, thereby shaping the strategy, ensuring sustainable development in the long term.
PROCEDURES TO IDENTIFY MATERIALS ASPECTS
Identifying key issues that have major impacts on the activities of the Company and stakeholders
• Surveying & collecting information timely, researching information from market reports, reporting the performance of domestic & international pharmaceutical industry. • Analysis on assessment reports, customer surveys of the Company. • Basing on the guidelines developing Sustainable Development Reports. • Basing on feedback, contributing ideas of stakeholders, especially in the meetings with shareholders & investors.
• Selecting material aspects that are mostly concerned by stakeholders to include in the report. Analyzing and identifying material aspects that are concerned matters of stakeholders
• Evaluation of the Board of Executive and relevant parties to ensure the accuracy & honesty of the raised issues. • Identifying material aspects through balancing the appropriate interests of the stakeholders and the Company’s development strategies.
• Developing a matrix of important issues “Stakeholder Concerns” and “Impacts on DHG Pharma”. Analysis of material aspects in relationships with stakeholders
• Reviewing material aspects after releasing reports and gathering comments and feedback from stakeholders. Review and evaluation on approval
Overview of the sustainable development
65
GRI
102
DETERMINATION OF MATERIAL ASPECTS
MATERIAL ASPECTS • Economic Performance • Market Presence • Indirect Economic Impact • Anti-Corruption • Anti-Unfair Competition
• Raw Materials Management • Energy • Water Resources • Emissions, Effluents and Waste • Environmental Compliance.
ECONOMIC SECTOR ENVIRONMENTAL SECTOR
DHG PHARMACEUTICAL JOINT STOCK COMPANY
SOCIAL SECTOR • • • • • •
Employment Occupational Health And Safety Education And Training Diversity And Equal Opportunity Non-discrimination Freedom Of Association & Collective Bargaining • Child Labor
66 DHG Pharma - Sustainable development report 2019
• • • • •
Forced or Compulsory Labor Local Community Customer Health And Safety Marketing and Labeling Customer Privacy
MATRIX OF MATERIAL ASPECTS High + IMPACT ON DHG PHARMA
Customer Health And Safety Economic Performance Raw Materials Management Local Community Emissions, Effluents and Waste
Occupational Health And Safety
Education And Training Indirect Economic Impact
Water Resources Environmental Compliance
Marketing and Labeling Employment Energy
Customer Privacy Anti-Unfair Competition
Child Labor Forced or compulsory labor
Diversity And Equal Opportunity
Freedom Of Association & Collective Bargaining Anti-Corruption
High + STAKEHOLDER CONCERNS
Low
EVALUATION REVIEW Upon completion of the report, DHG Pharma shall review all reporting contents, especially focusing on feedback from stakeholders. In addition, the Company proposes to internal stakeholders to check whether the report provides a comprehensive and balanced picture of the impacts of sustainable development that the Company has made. Thereby these parties shall recommend a process for drawing out the content that reflects the purpose of Reporting Principles on defined critical areas, as well as the effectiveness, achievements and limitations of 2019, creating the premise for improving the goals and strategies for sustainable development in the coming years.
Overview of the sustainable development
67
GRI
102
GOVERNANCE STRUCTURE FOR SUSTAINABLE DEVELOPMENT
ANNUAL GENERAL MEETING
ORGANIZATIONAL CHART
APPARATUS HAS BEEN APPLIED SINCE 01 JAN 2020
BOARD OF DIRECTORS Strategic Committee
Nomination Committee
GENERAL DIRECTOR
CHIEF OPERATING OFFICER
DEPUTY GENERAL DIRECTOR IN CHARGE OF PRODUCTION - SUPPLY CHAIN - TECHNOLOGY TRANSFER
Supply Chain Director
Production Director
DEPUTY GENERAL DIRECTOR IN CHARGE OF PRODUCTION - SUPPLY CHAIN
Technical Director
Quality Director
HR Director
Planning
Factory 1
Research & Development
Quality Management
Purchasing
Factory 2
Regulatory Affairs
Quality Control (NVC + TPT)
Printing & Packaging Factory
Factory 3
Legal
Raw Material Packaging Warehouse
Electromechanical
Construction
Finished Product Warehouse
Human Resources
Administration
Environment & Labor safety Information Technology
68 DHG Pharma - Sustainable development report 2019
Audit Committee
Internal Audit Manager
Internal Audit
Internal Control - Risk Management
DEPUTY GENERAL DIRECTOR IN CHARGE OF FINANCE
DEPUTY GENERAL DIRECTOR IN CHARGE OF MARKET
Finance Director
Marketing Director
Finance
Pharmacy Channel
Accounting
Sales System
Marketing Dept. Hospital Channel
Distribution Director
Distribution Center
Central Warehouse (MeKong Delta Region)
Central Warehouse (HCM & East Region)
Accountants at sales branches
Central Warehouse (Northern Region)
Direct report Functional report
Overview of the sustainable development
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GRI
102
GOVERNANCE STRUCTURE FOR SUSTAINABLE DEVELOPMENT
• General guidance and issuance of strategies and orientations on issues related to the Company’s sustainable development. BOARD OF DIRECTORS
• Approving objectives and action plans for the implementation of sustainable development strategies. • Ensuring the operation of DHG Pharma in accordance with the provisions of law, the Charter, and internal regulations of DHG Pharma. • Identifying priorities for sustainable operations of the Company; orientation and control of management.
• Preparing and submitting the objectives and action plans to the BOD for DHG Pharma’s sustainable development. GENERAL DIRECTOR AND BOARD OF MANAGEMENT
• Orientating and sharing strategies, goals, and plans for sustainable development throughout the Company. • Making sure sustainable development plans meet targeted objectives. • Following up and supervising the implementations of relevant entities.
FUNCTIONAL SECTORS AND DEPARTMENTS
• Implementing and actualizing sustainable development plans directed by the General Director and the BOM. • Proposing sustainable development orientation at the functional level. • Ensuring unanimousness and consistency in activities.
EMPLOYEES
70 DHG Pharma - Sustainable development report 2019
• Performing specific daily tasks related to the Company’s sustainable development goals. • Fully complying with international frameworks and practices on sustainable development.
Overview of the sustainable development
71
GRI
102
CORPORATE GOVERNANCE TOWARDS SUSTAINABLE DEVELOPMENT
IDENTIFICATION OF ENVIRONMENTAL AND ECOSYSTEM IMPACT TRENDS Many scientific warnings specify the cause and effect relation between human and ecological environment, socio-economic development and preservation of natural resources. It is the origin of basic ideologies on sustainable development, the harmonious development on economy, society and environment to satisfy the demands of material and spiritual life of current generation without damaging or interfering with the supply of natural resources for future socio-economic development.
In order to give the proper and appropriate strategic orientations, DHG Pharma identifies the trends impacting on the environment and ecosystem as follows:
General trends
Health-related trends
Societal trends
• Growing and aging population: longer lifespans and modern lifestyles are resulting in growing chronic diseases.
• Unmet medical needs: grassrootslevel healthcare facilities are inadequate, leading to an overload for higher-level.
• Increased transparency: stakeholders are requiring more transparency leading to new regulatory requirements.
• Wealth disparity: despite a decreasing global poverty rate, disparities in wealth still exist.
• Empowered patient: consumers are demanding better services and quality.
• Climate change, environmental pollution: impact people’s health.
• Growing pressure on pharmaceutical companies: consumers always expect affordable high quality products. Impacts from changes in regulations, circulars, etc.
• Stakeholders’ expectations for dialogue: companies are increasingly expected to maintain cooperative relationships with local communities and stakeholders.
• Digitization, artificial intelligence: new technologies and scientific innovations are opening new possibilities in the pharmaceutical industry.
72 DHG Pharma - Sustainable development report 2019
• Presence of non-traditional players: competition is ever stronger with emerging rivals.
• Environmental and social issues: ensuring sustainable practices throughout the supply chain.
KEY TRENDS IMPACTING THE ENVIRONMENT AND ECOSYSTEM General trends
Growing and aging population
Health-related trends
Societal trends
Growing pressure on pharmaceutical companies
Wealth disparity
Increased transparency
Stakeholders’ expectations for dialogue
Environmental and social issues
Unmet medical needs
Empowered patient
Climate change
Digitization, artificial intelligence
Presence of non-traditional players
CHALLENGES AND OPPORTUNITIES
IMPACTING THE ENVIRONMENT AND ECOSYSTEM
Overview of the sustainable development
73
GRI
102
CORPORATE GOVERNANCE TOWARDS SUSTAINABLE DEVELOPMENT
ORIENTATION SUSTAINABLE DEVELOPMENT
Based on the identification of the environmental and ecosystem impact trends, DHG Pharma aims at sustainable development by targeting business opportunities that bring positive impacts for the society and environment. DHG Pharma desires to achieve sustainable growth, provide life-changing products and create value in the community throughout Vietnam.
74 DHG Pharma - Sustainable development report 2019
The general orientations for sustainable development are specified as follows: Strengthening DHG Pharma’s brand trust and product through the highest standards of quality and safety, ethics and integrity. Promoting and maintaining a healthy living environment by minimizing environmental impacts, climate change and protecting water resources. Cooperating closely with suppliers to apply the highest standards of environment and society, responsibilities throughout the supply chain, including human rights protection. Gradually improving the management system of social and environmental issues according to the Company’s available standards, as prescribed by the international practices. Consistently applying and periodically monitoring the compliance at all factories, branches and warehouses. Protecting the health and benefits of employees, creating favourable conditions for the employees to promote their capabilities. Putting stakeholder’s benefits first in all activities.
Overview of the sustainable development
75
GRI
102
RISK MANAGEMENT ACTIVITIES
The year 2019 marks the constructing and improving stage of the RM System in the long-term planned process of gradually upgrading from newly established to “mature” and finally to the strategic level. DHG Pharma has collaborated with its consultant to complete the key risk profile at the company-level. At the same time, information dissemination and training has been provided to key and middle management officials. This paves the way for DHG Pharma to complete the related policies, monitoring mechanism, and regular and irregular assessment of risks, which all provide a strong foundation for recommendations of appropriate risk management tools and measures to prevent potential risks in business, and timely resolve problems, difficulties and violations in the Company’s activities. The BOM has identified a list of key risks of the Company, which are closely monitored and quarterly reported to the BOM and BOD.
STRATEGIC RISKS
RISK MANAGEMENT
FINANCIAL RISKS
76 DHG Pharma - Sustainable development report 2019
OPERATIONAL RISKS
STRATEGIC RISKS LEGAL ENVIRONMENT Not promptly prepare and adapt to changes in laws. Factors of risks Measures
Changes in laws that directly affect pharmaceutical production activities. Reviewing, developing and improving the system of internal regulations and procedures of the Company in accordance with laws and the Company’s activities. In order to enhance compliance, the Legal Department performs the following basic functions: • 100% of contracts and agreements signed are reviewed by legal specialists. • Updating legal changes related to the Company’s activities as well as disseminating to each department and specialized functions. • Advising the BOM and its subordinate units on the procedures for implementing investment projects, joint venture cooperation contracts, sales policies and other matters related to the laws.
DOMESTIC MARKET COMPETITION Not promptly prepare and timely address the competitive pressure from competitors. Factors of risks
• The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) took effect from 2019; accordingly, the import tax rate for pharmaceutical products will decrease; thus, domestic pharmaceutical companies will have to compete directly with imported products; • Price competition from other domestic pharmaceutical companies; and competitive pressure from foreign companies with competitive cutting edge in reputation and diverse drug portfolio; • More and more competitors develop in areas that used to be DHG Pharma’s competitive advantage.
Measures
Periodically keeping track of and monitoring the implementation of strategic objectives in order to achieve the goals: • Being the biggest Generic pharmaceutical enterprise in Vietnam. • Being a pharmaceutical enterprise with the deepest, broadest, most professional and diversified distribution channel. Performing bioequivalence and equivalent treatment of products. Upgrading the factory standards to PIC/s-GMP, Japan-GMP, EU-GMP,… Enhancing the development of the new technology transfer product list. Applying information technology to all activities of the Company. Overview of the sustainable development
77
GRI
102
RISK MANAGEMENT ACTIVITIES
OPERATIONAL RISKS RAW MATERIALS FOR PRODUCTION Risks in not timely supplying sufficient raw materials for production at reasonable costs. Factors of risks
• The cost of raw materials accounts for the majority of the Company’s cost structure. Imported materials account for more than 80%. • Prices of raw material increase and the input sources from China become scarce due to the country’s tightened environmental standards for pharmaceutical material factories and closure of factories that cause environmental pollution. • Depending on few material suppliers.
Measures
• DHG Pharma participates in distributing raw materials, which provides favorable conditions in purchasing raw materials in bulk as well as in negotiating long-term and stable contracts with suppliers. • Searching for new suppliers. • Setting a safe inventory limit and a safe ordering and delivering time with important raw materials. • The Purchasing Department frequently updates other departments with the situation of materials so that they can ensure a balance in their plan in using materials. • R&D Department must register at least two supplying sources for key API when conducting research.
PRODUCT QUALITY Products delivered to end-users do not guarantee its quality. Factors of risks
Measures
• Complaints from customers about product quality. • Products recalled due to poor quality.
• Equipping cameras to monitor production activities. • Including quality as an important criterion in KPI for the production group. • Applying the quality control process from input to output: DHG Pharma’s products must go through a strictly controlled journey with many “firewalls” in the quality assurance stage before launching. • Complying with regulations on labor safety and fire prevention and fighting. • Investing in more machines, equipment, technological innovations, and upgrading factories up to international standards. • Preventing incidents, overseeing the working environment, improving production conditions, organizing periodical training on safety, fire and explosion prevention and fighting.
RISKS IN RETAINING HIGH-QUALITY STAFF Factors of risks Measures
High-quality employees quit while replacements have not been timely planned and prepared.
• Developing training and successive plans. • Implementing the dictionary of competencies. • Searching for new talent through affiliating programs with reputable universities.
78 DHG Pharma - Sustainable development report 2019
FINANCIAL RISKS FLUCTUATIONS IN CURRENCY CONVERTING AND INTEREST RATE Fluctuated rates of currency exchange and interests negatively affect production activities. Factors of risks
• Importing raw materials from abroad. • Exporting goods to foreign countries. • Loans from banks.
Measures
• The Company continuously trades in raw materials in bulk to take the negotiating advantages in terms of prices and selecting many reputable suppliers. • Regarding exchange rates, the Company’s solutions include regular updates and forecasts of exchange rate fluctuations through relationships with banks. The Company also performs L/C contracts so that banks can make payment to hedge the risks of foreign currency shortage. • At the beginning of the year, the BOM will review the ranks for banks and submit to the BOD for approving the list of banks permitted to be traded in the year.
TAX COMPLIANCE Factors of risks
Measures
Difficulties in understanding and applying tax regulations in different areas, leading to tax violations detected and fined by tax authorities.
• Complying with tax regulations. • Hiring tax consultants for large projects and operations with suspected tax incidence. • Communicating regularly with tax authorities on issues incurring during its operation. • Inviting local tax authorities for periodically reviewing the tax declaration every year.
Overview of the sustainable development
79
GRI
102
DIRECTION FOR RISK MANAGEMENT (RM) IN 2020
In 2020, the Company will continue to upgrade the RM System to the “mature” level before proceeding to the strategic stage in the following years. RM activities in 2020 will focus on developing RM policies and regulations so that they can be put into operation in the system. At the same time, the RM Council will be established to serve the needs of timely updating, evaluating and reporting issues related to important risks of the Company.
The operating structure of the RM System follows the following model
Responsibilities of the operational structure Structure
Roles • Approving RM structure and policies; • Monitoring and reviewing the effectiveness of the RM structure;
BOD
• Providing guidelines and approving risk acceptance threshold; BOD
• Periodically reviewing reports and evaluating RM performance; • Assessing risks and suggests measures for risk minimization; • Audit Committee: assisting the BOD in executing RM tasks.
AUDIT COMMITTEE
RM Council
• Making periodical RM reports.
INTERNAL AUDIT
RM COUNCIL
• Reviewing the evaluation results of risk owners; • Identifying, assessing and rating risks in the area of responsibility;
Risk owners
• Proposing action plans; • Explaining to the RM Council and Audit Committee about the major risks.
RM DEPARTMENT
• Implementing activities; RM Department
RISK OWNER
Management layer
IC Department
Guarantee layer Risk Report channel Two-way information exchange or integrated RM
80 DHG Pharma - Sustainable development report 2019
coordinating
RM
• Organizing awareness-raising activities about risks; • Developing documents and guidelines about RM methods and procedures.
Confirmation layer Implementation layer
and
• Monitoring and evaluating the operation of the RM system.
RISK MANAGEMENT SYSTEM IS OPERATED ON BASIS OF 3 ASPECTS PROCEDURE
SYSTEM PEOPLE
PEOPLE
People are the most important factor ensuring the effective operation of the RM system. In 2020, RM activities will focus on improving the roles, responsibilities, knowledge and skills for people involved in the RM system: Reviewing and assigning major risks and the Company’s entire risk profiles to risk owners. Identifying and assigning a team of coordinators and specialists for each major risk; Conducting training courses on the method of control self-assessment for process owners and control owners; Attending risk professional development symposiums organized by international associations; Continuously improving the integration of RM into important processes.
PROCEDURE
Publishing documents that serve as the basis for operating the system: RM formalities; Criteria - parameters for risk assessment; Developing evaluation process and guidelines on methods for evaluation; Control self-assessment; Integrating RM into important processes.
SYSTEM
Currently, DHG Pharma is evaluating the feasibility and efficiency of the Automatic RM System and considering applying this system in certain major work items.
Overview of the sustainable development
81
GRI
100 GRI
200 GRI
400
REINVENTING SUSTAINABLE VALUES GRI 201 GRI 201 GRI 201, 203, 205, 206 GRI 416, 417, 418 GRI 102, 202, 401, 403-409 GRI 204, 301 GRI 413
84 90 94 100 110
Building a prosperous enterprise Increasing benefits for shareholders and investors Complying with regulations of state agencies Fulfilling customers’ needs Developing professional personnel
136 138
Building sustainable relationships with partners and suppliers Spreading community responsibility
The existence of marine creatures contributes to the balance of the ecosystems in nature, which in turn, balances the living environment for human beings. As such, protecting marine life equates protecting our own life, the life of a balanced and sustainable development ecosystem.
GRI
201
BUILDING A PROSPEROUS ENTERPRISE REFERENCE GRI
201-1
Direct economic value generated and distributed GRI
201-2
Financial implications and other risks and opportunities due to climate change
84 DHG Pharma - Sustainable development report 2019
EFFICIENT OPERATION With the unanimity, determination and continuous efforts of the whole system in focusing on implementing measures to improve operational efficiency and release all resources, despite the difficulties in the business environment in 2019, DHG Pharma fulfilled 98.8% of the net sales plan and successfully achieved 101.0% of the before-tax profit plan assigned by the Annual General Meeting (AGM), creating a solid premise to complete the plans in 2020. Specifically, net sales and before-tax profit were VND 3,897 billion and VND 713 billion respectively. DHG Pharma continued to maintain its leading position in Vietnam’s pharmaceutical industry for 23 consecutive years.
622
122
3,897
-1,586 -598
Net sales of finished goods
Net sales of merchandise and others
Financial income
COGS of finished goods
COGS of merchandise and others
713
-1,021
-99
-2
Selling and G&A expenses
Financial expenses
Other expenses
Before-tax profit
FINANCIAL HIGHLIGHTS 2015 - 2019 Indicators
Figures in
2015
2016
2017
2018
2019
Income statement Net sales
VND Billion
3,608
3,783
4,063
3,882
3,897
Gross profit
VND Billion
1,413
1,713
1,783
1,717
1,712
Before-tax profit
VND Billion
701
757
719
732
713
After-tax profit
VND Billion
593
689
642
651
631
Total assets
VND Billion
3,363
3,945
4,087
4,206
4,147
Current assets
VND Billion
2,221
2,746
2,939
3,148
3,134
Non-current assets
VND Billion
1,142
1,199
1,148
1,058
1,013
Liabilities
VND Billion
842
1,076
1,328
1,062
769
Owner’s equity
VND Billion
2,521
2,870
2,759
3,144
3,378
Charter capital
VND Billion
872
872
1,307
1,307
1,307
Balance sheet
Reinventing sustainable values
85
GRI
201
BUILDING A PROSPEROUS ENTERPRISE
NET SALES OF DHG IN-HOUSE GOODS
NET SALES (VND Billion)
5,000
3,608
3,783
4,063
(VND Billion)
3,882
3,897
4,000
4,000
2,672
3,027
3,054
3,171
3,275
2015
2016
2017
2018
2019
3,000
3,000 2,000 2,000 1,000
1,000
2015
2016
2017
2018
2019
PROFIT
(VND Billion) BEFORE-TAX PROFIT
800
701
593
757
689
719
AFTER-TAX PROFIT 642
732
651
713
631
600
400
200
2015
86 DHG Pharma - Sustainable development report 2019
2016
2017
2018
2019
TOTAL RESOURCES AND OWNER’S EQUITY (VND Billion)
TOTAL RESOURCES
5,000
3,363
2,521
3,945
2,870
4,087
OWNER’S EQUITY 2,759
4,206
3,144
4,147
3,378
4,000
3,000
2,000
1,000
2015
2016
2017
2018
2019
In the context the economy still has many challenges, DHG Pharma has always retained its position with positive profitability indicators. DHG Pharma can achieve it thanks to the effective management of production and operation costs.
Target
2015
2016
2017
2018
2019
2019*
Gross profit margin
39.2%
45.3%
43.9%
44.2%
43.9%
44.2%
Before-tax profit margin
19.4%
20.0%
17.7%
18.9%
18.3%
19.4%
ROS
16.4%
18.2%
15.8%
16.8%
16.2%
17.2%
ROA
17.3%
18.8%
16.0%
15.7%
15.1%
16.0%
ROE
24.6%
25.5%
22.8%
22.1%
19.4%
20.6%
(*) Adjust the accounting of Bonus and Welfare Fund to be similar to previous years (In 2019, the Company changed the recognition method of Bonus and Welfare Fund to expenses instead of after-tax profit)
Reinventing sustainable values
87
GRI
201
BUILDING A PROSPEROUS ENTERPRISE
OPPORTUNITIES CHALLENGES OF CLIMATE CHANGE
2019 is the hottest year in the history of oceans in the world. Due to man-made emissions, oceans have been warmed up at an unprecedented speed, leading to catastrophic impacts on the Earth’s climate, including the rise of sea levels and the destruction of marine ecosystems. We also witnessed numerous extreme weather events in varied areas around the world, such as Idai storm in Mozambique, Hagibis storm in Japan, the heatwave in Europe, forest fires in California, and eastern Australia, floods in Venice – Italy and many other natural disasters and so on.
88 DHG Pharma - Sustainable development report 2019
The threat of climate change has become severe to the extent that Indonesia – one of the fastest-growing economies nowadays, has decided to move its capital to an unsinkable place, which is more appropriate for residents to settle down. Therefore, every country is getting concerns about climate change, including Vietnam. In fact, the Vietnamese government has continually been raising awareness and urging its citizens to join hands to stop this environmental problem. Globally, Vietnam ranked sixth among countries most affected by climate change. The increasingly complex and unpredictable weather events can cause high mortality rates and serious damage to infrastructure, including schools
and health centers, adversely affecting the livelihoods of disadvantaged populations in urban and rural areas. Children are especially affected by these natural disasters, which restrict their access to food, clean water, education, and healthcare due to loss of income and assets. All of these put pressure on the community, driving to the rise of children’s exposure to violence, exploitation, and abuse. Simultaneously, climate change will damage a whole generation’s health status due to the risk of rising infectious diseases and malnutrition as a consequence of poor harvest. Facing such opportunities and challenges, DHG Pharma is well aware of its role in protecting public health and acting for the coming generations.
In 2019, to make further progress in demonstrating community and environment responsibility, the Company officially launched the Green Campaign #GoGreenDHG for the entire Company’s staff and customers. The campaign was designed to help people clearly visualize the direct impact of environmental pollution such as the circulation of plastic waste, the impact of dust and exhausted natural resources, etc. on human health. Right after launching, the Green Campaign has attracted the participation from many departments. Many simple but practical changes and ideas have been implemented such as replacing plastic bottled water with personal reusable water bottles, replacing plastic bottled water in meeting rooms with glasses and large water containers, using grass straw, reusing plastic bags as garbage bags, bringing more trees to working
places and so on. Besides, DHG Pharma has continually improved product quality while promoting research on new products and transferred technology so that the community can get access to internationally qualified products at reasonable prices. At the same time, DHG Pharma has always been the leading enterprise in organizing community activities to improve people’s quality of life.
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89
GRI
416
INCREASING BENEFITS FOR SHAREHOLDERS AND INVESTORS
REFERENCE GRI
SHARE INFORMATION & SHAREHOLDER STRUCTURE
201
Economic performance
SHARE INFORMATION Share sticker
DHG
Share name
SHARE OF DHG PHARMACEUTICAL JSC
Share exchange
HO CHI MINH CITY STOCK EXCHANGE
Charter capital (VND)
1,307,460,710,000 Number of outstanding shares
130,746,071 shares
TOTAL TRADING VOLUME AND PRICE OF DHG SHARES FROM 28 DEC 2018 TO 31 DEC 2019 TOTAL TRADING VOLUME (SHARES)
SHARE PRICE (VND)
2,500,000
140,000 120,000
2,000,000
100,000 1,500,000
80,000 60,000
1,000,000
40,000 500,000
20.12.2019
09.12.2019
26.11.2019
13.11.2019
31.10.2019
18.10.2019
07.10.2019
24.09.2019
11.09.2019
28.08.2019
15.08.2019
02.08.2019
22.07.2019
09.07.2019
26.06.2019
13.06.2019
31.05.2019
20.05.2019
07.05.2019
19.04.2019
05.04.2019
25.03.2019
12.03.2019
27.02.2019
14.02.2019
25.01.2019
14.01.2019
28.12.2018
20,000
Source: website https://vietstock.vn/
90 DHG Pharma - Sustainable development report 2019
SHAREHOLDER STRUCTURE
5.68%
According to the list of shareholders on 03 July 2019, DHG Pharma’s shareholder structure is as follows: Number of shares
%
Shareholder name
43.31
No.
%
SCIC
56,626,237
43.31%
2
Taisho
66,697,052
51.01%
3
Others
7,422,782
5.68%
01%
51.
1
DIVIDEND PAYMENT POLICY According to the mid and long-term development strategies, DHG Pharma has carried out a cash dividend policy of at least 30% of par value/year to allocate a certain amount of profit for re-investment in enterprise development as well as to increase cumulative values for shareholders.
The Company has been paying dividends in 2019 as follows: • Advance dividend payment Phase 1 at 30%/par value: information disclosure: 07 Apr 2020, record date: 12 May 2020, payment date: 05 June 2020. • The remaining is expected to be paid after the dividends are officially submitted at the AGM 2019.
Dividends of DHG Pharma over the years: No.
Target
Figures in
2015
2016
2017
2018
2019
1
Dividend per share
VND
3,500
3,500
3,000
3,500
4,000 (*)
2
Total dividend value
VND Billion
304.3
305.1
392.2
457.6
523.0
3
% dividend/PAT
51.3
44.3
61.1
70.3
82.8
4
EPS
5,748
4,485
4,378
4,445
4,668
% VND/share
(*) Dividend of 2019 is projected to be submitted to the AGM 2019.
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91
GRI
416
INCREASING BENEFITS FOR SHAREHOLDERS AND INVESTORS
INVESTOR RELATIONS DHG Pharma’s Investor Relations Team (IR) plays an essential role in the information disclosure activities, ensuring that information is disclosed to the public timely, accurately, and in compliance with applicable law. Simultaneously, the IR Team becomes a bridge to strengthen the close relationship between shareholders and DHG Pharma. The information is strictly disclosed by DHG Pharma in accordance with the following Principle: • Information disclosure must be performed in an accurate, sufficient, clear and timely manner as prescribed on DHG Pharma’s website (in Vietnamese and English), State Securities Commission and Ho Chi Minh City Stock Exchange.
• All shareholders and investors have the right to access any information disclosed on DHG Pharma’s website under the following link: http://www.dhgpharma.com.vn/en/investor-relations.
Important information was informed to shareholders on time and disclosed on the Company’s website in English and Vietnamese includes: Annual report and Sustainable development report, which provide the overall picture of the business situation, major changes, development strategies in the short/medium/long term.
Notice, meeting materials, minutes/resolutions of the Annual General Meeting of Shareholders.
Corporate governance reports every 6 months/year provides full information about the AGM, the BOD members, meetings, and transactions with related parties.
Quarterly financial statements, reviewed semi-annual financial statements, pre-audited and post-audited financial statements help shareholders capture the latest business results of the Company.
Other extraordinary information disclosures such as appointment/ dismissal of BOM members, functional directors, stock transaction notices, etc.
92 DHG Pharma - Sustainable development report 2019
During the year, DHG Pharma performed approximately 70 times of information disclosure within the prescribed time-limit. In addition to timely information disclosure in accordance with applicable law, the IR Team achieved other outstanding performance as follows: The Company continued to gain a “hat-trick” in the voting competition:
5
THE FIRST PLACE
TOP
OF THE CORPORATE GOVERNANCE AWARD FOR LARGE-CAPITALIZATION COMPANIES
BEST SUSTAINABLE DEVELOPMENT REPORTS
10
TOP
LARGE CAP WITH BEST ANNUAL REPORTS
Continuously maintain high rankings in various voting categories for many years.
DHG Pharma organized investor and analyst meetings to update quarterly business performances and to listen to analysts’ viewpoints on the Company’s operation.
Projected IR schedule in 2020 No.
Time
Event
1
Jan 2020
Disclosure of pre-audited Financial statements (FS) FY 2019
2
Mar 2020
Disclosure of audited FS FY 2019
3
Apr 2020
Disclosure of FS of Quarter 1/2020
4
Apr 2020
Annual Report disclosure
5
Jun 2020
Sustainable Development Report disclosure
6
Jun 2020
Annual General Meeting of Shareholders 2019
7
Jul 2020
Disclosure of FS of Quarter 2/2020
8
Aug 2020
Disclosure of reviewed semi-annual FS
9
Oct 2020
Disclosure of FS of Quarter 3/2020
Contact information of the IR Team: Ms. Le Thi Hong Nhung - Finance Director hongnhung@dhgpharma.com.vn (8429) 23 891 433 - Ext: 242 288 Bis Nguyen Van Cu, An Hoa Ward, Ninh Kieu District, Can Tho City
(*) Quarterly, the Company often organizes analyst meetings to update the Company’s operation in Mar, May, Aug and Nov. However, due to the increasingly complicated pandemic situation, the Company will select more appropriate forms of organization such as online conference, etc.
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GRI
200
COMPLYING WITH REGULATIONS OF STATE AGENCIES
CONTRIBUTION TO THE STATE’S BUDGET
REFERENCE GRI
To encourage investment from enterprises, the State issued preferential investment policies for industrial parks and economic zones. At DHG Pharma, DHG Pharmaceutical Plant and Printing and Packaging Plant at Tan Phu Thanh Industrial Zone, Hau Giang Province are also enjoying the above incentive. The factory is entitled to 10% corporate income tax (CIT) rate for 15 years from the commencement date of operation. Specifically, DHG Pharma’s plant is entitled to corporate income tax for the first 4 years, 50% reduction for the following 9 years (corporate income tax at the rate of 5%), and corporate income tax at the rate of 10% for the 2 remaining years.
201-4
DHG PHARMACEUTICAL JOINT STOCK COMPANY
Financial assistance received from the government GRI
203
Indirect economic impacts GRI
Details are as follows:
205
Printing and Packaging Plant
DHG Pharmaceutical Plant
CIT exemption
2014 - 2017
2015 - 2018
CIT at 5%
2018 - 2026
2019 - 2027
CIT at 10%
2027 - 2028
2028 - 2029
Target
Anti-corruption GRI
206
Anti-competitive behavior
CONTRIBUTION TO THE STATE’S BUDGET (VND BILLION)
400
356.6
241.6
306.6
292.1
DHG PHARMACEUTICAL JOINT STOCK COMPANY
VALUE ADDED TAX (VAT) IMPORT, EXPORT TAX CIT PERSONAL INCOME TAX (PIT) OTHER
225.8 3% 17%
300
48%
200 29% 100 3%
2015
2016
2017
2018
2019
In 2019, in addition to receiving tax incentives from the State, DHG Pharma strictly complied with tax payments in accordance with the provisions of law and the State. The total contribution to the State budget in 2019 was VND 225.8 billion. In particular, the contribution to the State budget in Can Tho City and Hau Giang province is VND 124.5 billion and VND 20.5 billion, respectively. 94 DHG Pharma - Sustainable development report 2019
ANTI-CORRUPTION Anti-corruption is one of the most important tasks of DHG Pharma to ensure all activities are public, transparent, and increase operational efficiency. In 2019, DHG Pharma implemented synchronous preventive measures such as making activities more public and transparent, double-checking documents so as to ensure its compliance with the laws and to find out those which become no longer appropriate, prioritizing consistency and transparency on working with stakeholders. All of the staff strictly follow labor regulations, enhance the corporate code of conduct and the employees’ culture in communication, develop and manage the budget. They also conduct purchases of assets in accordance with Regulation on asset procurement and repair and
Regulation on investment management of the Company. Staff are recruited, trained, and appointed on a public and transparent basis. The Company strictly follows regulations on making declarations of assets and income of the obligors according to the Anti-Corruption Law. Staff who make work-related decisions must aim at the Company’s common interests, not for personal or other individuals/organizations’ interests prescribed in the Regulation on transaction control with Related parties and related members issued on 25 Oct 2018.
“DHG Pharma Cultural Identity” also specifies the transactions with related persons as follows: When carrying out transactions with related persons, the Company must sign contracts in written form on the basis of equality and voluntariness. The contract content must be clear, specific and disclosed to shareholders upon request.
The Company applies necessary measures to prevent related persons from interfering in the Company’s operations and harming the Company’s interests through controlling the purchase and sale channels of the Company’s goods or price manipulation.
The Company applies necessary measures to prevent shareholders and related persons from conducting transactions that cause loss of the Company’s capital, assets or other resources. The Company must not provide loans or guarantees to shareholders and related persons.
The legal rights of the parties who have interests related to the Company are ensured.
The Company must respect the legal rights and interests of all parties related to the Company, including banks, creditors, staff, consumers, suppliers, communities, and others with interests related to the Company.
The Company positively cooperates with people who have interests related to the Company through: • Providing all necessary information to the bank and creditors to help them assess the operation and financial situation of the Company and make decisions. • Encouraging them to give their opinions on the business, financial situation and important decisions related to their interests through direct contact with the Board of Directors, the Board of Management (BOM) of DHG Pharma.
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GRI
200
COMPLYING WITH REGULATIONS OF STATE AGENCIES
Simultaneously, the Company effectively facilitates communication between the employer and employees, handles complaints and denunciations; thoroughly tackles denunciations with regards to corruption. The Company also enhances activities of inspecting and checking the implementation of the Anti-Corruption Law. Thanks to the inspection and checking, cases with corruption potentials in some departments have been navigated and handled timely. Moreover, to receive and process contributing opinions, information, feedback, and complaints of individuals, departments, and collectives to enhance operation efficiency, contributing to risk management process and protecting legal rights of individuals, departments and the Company under the Company’s guidance and laws in a timely manner, in 2019, DHG Pharma implemented a centralized information reception channel. The centralized information reception channel is responsible for guiding individuals, departments, and organizations to contribute ideas, feedback, and complaints to the Company in accordance with laws. General principles of the centralized information receiving channel:
Encourage and respect employees’ opinions and points of view on the Company’s activities.
Ensure the independence and objectivity as assigned by the General Director in timely supporting information processing, submitting to the right authority in the correct order.
Ensure confidentiality on personal information for individuals who file opinions, feedback, and complaints.
Ensure privacy and safety in sending, transferring, processing, and storing data of comments, feedback, and complaints.
Comments, feedback, and complaints in the form of anonymous letters with slandering purposes, giving false information shall not be handled.
All employees’ complaints, feedback, and suggestions on the Company’s activities must be sent to the centralized information receiving channel to gather, classify, and handle.
Strictly prohibit acts of covering/hiding information of employees’ comments, complaints, and feedback on the Company’s activities; acts of intimidation, bribery, or other actions that hinder the rights to comment, feedback, and complaints prescribed in-laws and Company’s regulations.
96 DHG Pharma - Sustainable development report 2019
Information is received in 1 of 3 following methods:
1
Send feedback through DHG Family App, “Feedback”, Section, select “General Director’s Mailbox” Topic.
2
Send email to hopthutgd@dhgpharma.com.vn
3
Direct mail in 2 ways: • Send to the “General Director’s Mailbox” located at the Security Station of the Company. • Send to DHG Pharma’s headquarter - No. 288 Bis Nguyen Van Cu, An Hoa Ward, Ninh Kieu District, Can Tho City via postal service. The envelope has to address the recipient that is Manager of Internal Control Department/ personnel assigned by General Director.
In 2019, there was no record of violations related to corruption at DHG Pharma.
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GRI
200
COMPLYING WITH REGULATIONS OF STATE AGENCIES
ANTI-COMPETITIVE BEHAVIOR The management of product brands as well as the brand DHG Pharma is always paid special attention and careful supervision in all of the activities regarding the exchange, external affairs, trading, and so on in order that they would maintain the same path for the development of DHG Pharma. DHG PHARMA HAS GOT
308
PRODUCTS WITH NATIONWIDE VISA NUMBERS (237 PHARMACEUTICALS, 71 DIETARY SUPPLEMENTS, COSMECEUTICALS).
THE COMPANY ALSO POSSESSES
297
NATIONAL TRADE-MARK CERTIFICATES (296 TRADE-MARK CERTIFICATES, 01 PATENT).
03
INTERNATIONAL TRADE-MARK CERTIFICATES (MALAYSIA)
Humanity
APART FROM THE BUSINESS AND COMPETITION, THERE IS ALSO AMONG PEOPLE, EVEN TOWARDS THE COMPETITORS THIS IS THE VIEWPOINT OF ALL DHG PHARMA MEMBERS.
Employ a learning, justified approach, and fair competition when accessing and working with competitors.
Do not get involved in activities harming competitors.
Do not cooperate with other competitors to ruin another competitor.
Do not produce and deliver the counterfeits and the imitations of the competitors’ products. Do not sully the competitors with anyone and do not give unfair evaluations of their products.
Do not take advantage of the relationships with customers to incite them to have unfair attitudes and behaviors towards the competitors.
Collect, share, and make full use of the information about the competitors available on the mass media, their policy statement and website, public speeches, and other publications. Concurrently, give credit to the source of information when using it. Do not collect information about the competitors in illegal or immoral ways.
98 DHG Pharma - Sustainable development report 2019
INDIRECT ECONOMIC IMPACTS DHG Pharma has been constantly growing, developing, and creating jobs for nearly 3,000 staff nationwide at the end of 2019. The Company has always ensured safe working conditions, created welfare facilities, provided good benefits, regularly trained, and developed human resources to contribute to quality improvement, income increase for local workers.
Besides creating jobs and investing in human resources, DHG Pharma has always been willing to contribute to the community and society in various forms such as “Fund for a more beautiful and healthier life�, maintaining blood donation activities, implementing free medical examination and medicine delivering programs for the poor in remote areas across the country, taking care of the elderly, the children at the orphanage center, propagandizing knowledge about health protection for citizens, and organizing special programs for customers and family members.
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99
GRI
400
FULFILLING CUSTOMERS’ NEEDS
REFERENCE GRI
416
Customer health and safety GRI
417
Marketing and Labeling GRI
418
Customer Privacy
100 DHG Pharma - Sustainable development report 2019
QUALITY ASSURANCE DHG Pharma always puts itself in the position of customers and consumers to objectively evaluate products in all aspects. DHG Pharma, as such, is remembered as a prestigious and humane brand in bringing customers high-quality products and services.
With the sacred mission of improving human health, for nearly half a century, DHG Pharma has not only focused on investing in personnel, technology, raw material resources, production conditions, continuous improvement of the quality management system but also applied the most modern equipment and scientific research into products to bring the best values to consumers. In Oct 2018, DHG Pharma was granted the certificate of PIC/s - GMP standard by the National Pharmaceutical Regulatory Agency (NPRA) for effervescent tablets and effervescent powder. In Feb 2019, the tablet production line of Non-Betalactam factory was certified to meet Japan - GMP standard by Pharmaceutical and Medical Devices Agency of Japan (PMDA). PIC/s - GMP and Japan - GMP are two high standards in pharmaceutical manufacturing that contribute to export to developed countries, enhance the value and image of DHG Pharma brand on the market and gain consumers’ trust in the Company’s products.
Besides, DHG Pharma products must go through a strictly controlled journey with many “firewalls” in the quality assurance stage before launching products to the market. With modern facilities, highly qualified staff who always follow the strict quality regulations and processes, comply with GMP principles in medicine production, DHG Pharma affirms the resource of input materials for each product reaching high quality. At DHG Pharma, every year, the Company conducts research, evaluation, and use of domestic and oversea raw materials in accordance with the following criteria: raw materials must be clearly identified with their origins and published quality standards; Raw materials manufacturing factories satisfy Good Manufacturing Practice (GMP) standard; The warehouses must meet Good Storage Practice (GSP) standard; Testing laboratory meets Good Laboratory Practice (GLP) standard. Materials that are delivered to the Company’s warehouses are sampled for checking and testing in accordance with the regulated quality standards to ensure that raw materials reach the quality before stock receiving. Even with these reliable sources of
input materials, the functional departments of the Company still strictly control the next steps in the material path. At every stage of the production process, quality assurance continues to be strictly controlled by staff and modern machines. The key parameters throughout the manufacturing process are strictly controlled in accordance with specified standards. The semi-finished products of all stages are controlled to ensure the output reaching the standard before moving to the next stage. After the steps on the actual production line, the finished product will continue to be sampled and tested in accordance with regulations. This step requires that 100% of the batches satisfy the quality standard. Through this “gate”, the product must also be checked by the quality management department. If the quality management department approves, the products are allowed to be stored before being distributed. Pursuant to DHG Pharma’s regulations in the production process, if errors - even the smallest ones are detected, it must be immediately reported to the direct leader to promptly handle, review and check all stages of the production process such as raw materials, equipment, processes and so on. After receiving the review results, only products meeting all the regulated standards will be launched from the factory to the market. In case the products do not reach 100% of prescribed quality standards, even if the batch size is up to one million or ten million tablets, the Company is willing to accept damage and destroy the product to ensure absolute safety for users. For DHG Pharma, strict control of product quality as well as creating high-quality products that meet the consumers’ tastes are not only top priority but also fulfill the responsibilities of the Company with customers.
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101
GRI
400
FULFILLING CUSTOMERS’ NEEDS
PRODUCT LABELING To provide the most sufficient product information to consumers, DHG Pharma always concentrates on clear and specific labeling designs for all products such as ingredients, indications, usage, targeted users, storing conditions, etc. Since then, customers can understand and use the products easily and properly which results in the best performances. Simultaneously, we also encourage patients to ask doctors before use and alert patients several risks they may encounter such as unwanted side-effects, cases for consideration and contraindication, solutions for the wrong dosage, etc. Furthermore, every year we always try to improve our labels by changing the designs to be detailed and easy to understand as well as updating English contents in parallel with Vietnamese contents.
BIOEQUIVALENT To ensure safe and effective use of medicine, the Company has implemented bioequivalence testing at the Central Institute for Drug Testing in Hanoi and Ho Chi Minh City. With effective treatments similar to brand-name drugs, DHG Pharma hopes to provide several approaches to good drugs with the best affordable prices. As at 31 Dec 2019, the total number of products achieved bioequivalence was 39, the total number of products to be announced bioequivalence was 35. Annually, the Company sends samples to test its environmental indicators.
102 DHG Pharma - Sustainable development report 2019
BRAND DEVELOPMENT Product research and development and branding awareness are of the prerequisites to contribute to the success of DHG Pharma in a long history of 45 years of development. With the above attitude, DHG Pharma is always a pioneer in research, application, and investment in modern technologies and technology transformation to develop high-quality products to satisfy the consumers. The Company also assigns our engineers, pharmacists, researchers, and experts to participate abroad training and exchange expertise courses. The outstanding examples are the PIC/s - GMP certified effervescent tablet and effervescent powder production line and the Japan - GMP certified tablet production line, along with quality system meeting the international standards have contributed to consolidate the customers’ belief, enhance our reputation and affirm the Company’s products position in the world
Currently, DHG Pharma has 308 products with circulation registration numbers all around the country. In 2019, the Company manufactured and launched 10 new products. Through the marketing and communications activities along with passionate stories of the researchers, the product information is provided honestly and accurately, the product quality is assured with proper transmission channel, the customers can approach DHG Pharma’s products easily, scientifically and deeply with DHG Pharma’s “humanity”. Moreover, DHG Pharma always strictly complies with regulations on communications and marketing, including the advertisement, promotion, and sponsor activities.
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103
GRI
400
FULFILLING CUSTOMERS’ NEEDS
PRODUCT CHAIN FORMING DHG PHARMA BRAND
HAPACOL To get a successful product such as Hapacol, there is a research story of a team of pharmacists in collaboration with leading doctors in the country. Experts have together accompanied in many activities in researching and developing suitable product lines for the community. Being concerned about the fevers of early life such as “meals” of children, a year later, DHG Pharma launched Hapacol 80 mg package for children under 1 year of age. Then, the Hapacol catalog is developed with various contents suitable for weight, convenient dosage forms, and combined with other pharmaceuticals for diverse uses. Especially, Hapacol 650 mg in the form of an oral dose is suitable for the increasing weight of Vietnamese people.
104 DHG Pharma - Sustainable development report 2019
DHG Pharma’s creativity is also shown in the successful development of the first effervescent package in Vietnam. Hapacol 250 was named in Top 2 of the leading antipyretic packages in the market. While all antipyretic drugs at that time were bitter, Hapacol 250 with orange flavor, sweet taste, easy to drink was beloved by millions of children. DHG Pharma’s research team are the authors of this unique flavor for Hapacol. The product is constantly updated with the highest standards of current high scientific and technical content. If Hapacol was produced in Vietnam’s first GMP - ASEAN certified line in 2003, then in 2006, such production line was upgraded to GMP - WHO standard. By October 2018, the effervescent powder production line was certified PIC/s - GMP standard and the tablet production line certified Japan - GMP standard. With a high therapeutic effect proven to be bioequivalent to the original proprietary medicine, many Hapacol products have been used in medical examination and treatment in the hospital system. Hapacol also appears in more than 23,000 drugstores in 63 cities and provinces and exported across Southeast Asia.
NATTOENZYM According to statistics of the Health sector, the ratio of the youth with stroke has increased by nearly 50% over the past 10 years. Occasionally, we heard about an under 30-year-old person suffered a stroke. In particular, there are many strokes for patients only at the age of 17-18. Most people are 40 years old or more. This heartbreaking reality urges DHG Pharma’s pharmacists to seek solutions to prevent stroke right from the 2010s when the number of strokes are increasing. DHG Pharma successfully produced the product for strokes in 2012, one year after finding a solution to dissolve blood clots with high safety with an active ingredient named Nattokinase, an enzyme extracted from fermented soybeans of Japan. Cooperation with JBSL Company (Japan Bio Science Laboratory Co., Ltd), one of the world’s largest suppliers of Nattokinase to exclusively import raw materials is a right decision of DHG Pharma to bring an effective solution of strokes prevention for Vietnamese people. The distance between a healthy life and sudden death or disability is not that far. There has existed a good solution as DHG Pharma has
joined hands in the fight against stroke. However, how to equip the public with a stroke prevention mindset is the biggest concern of DHG Pharma. Strokes come from young adults’ indifference with their health status. The key reason for younger age stroke lies in the unhealthy lifestyle, as reflected through people’s alcohol and tobacco abuse as well as sedentary and overworking habits, etc. Therefore, to keep the community updated with necessary knowledge which motivates them to change their lifestyles and protect themselves and their families from stroke, DHG Pharma has been carrying out multiple advisory activities and programs. Mr. Nguyen Duy Nhan (27 years old), a participant of the online course “Effective stroke prevention from Japan” organized by DHG Pharma, shared: “Thanks to very simple lessons from the course, I have gained enough knowledge about stroke to protect myself and my family. Through this course, I also realized that I was so indifferent to my health status”.
Keeping the motto “Small Actions - Big Changes”, in mind, DHG Pharma’s people have been persistently spreading useful knowledge to help young adults protect their health, contributing to reducing stroke rate and creating a better life for the community. Reinventing sustainable values
105
GRI
400
FULFILLING CUSTOMERS’ NEEDS
APITIM
Cardiovascular diseases reflect a problem of the heart and blood vessels that weakens the heart’s working ability. Cardiovascular diseases come in many different forms such as hypertension, heart valve stenosis or heart valve incompetence, cerebrovascular accident, aneurysm, thrombosis, etc. Cardiovascular disease is considered a “silent killer” causing
NATUREN Z
The story of Vietnamese people infected with dioxin lasts till today. Numerous families permanently bear the pain caused by toxic chemicals. In addition, Vietnamese people nowadays have to face various kinds of toxics threatening their health and lives. When the liver is heavily poisoned, this “detox machine” has been exhausted but cannot protect humans from external threats. Luckily, DHG Pharma team has developed a research topic on Naturenz preparations
106 DHG Pharma - Sustainable development report 2019
many dangerous complications and serious consequences to people all over the world, Vietnam included. According to the World Health Organization, 17.5 million people worldwide die from cardiovascular diseases every year, four times higher than the total deaths caused by HIV/AIDS, malaria, and tuberculosis. In particular, patients who died of hypertension and complications of hypertension are over 7 million. Statistics by the Ministry of Health show that 25% of the Vietnamese population suffers from cardiovascular disease and hypertension; especially, hypertension has started to attack young adults in recent years. 47% of Vietnamese adults from 25 years old and above are suffering from hypertension, but most of them are indifferent and neglectful about their hearts’ health status. To treat millions of people with hypertension problems, DHG Pharma’s research team has created Apitim. This product is used to treat high blood pressure, angina due to chronic ischemic and coronary artery disease. For many consecutive years, Apitim has maintained its position in the Top list of products that contribute to DHG Pharma’s sales.
extracted from familiar Vietnamese ingredients such as garlic, papaya, bitter melon, gac fruit, canistel, and radish. Appreciating this humanistic solution, DHG Pharma immediately conducted further research to create Naturenz liver detoxification capsules. This cooperation provides an opportunity for a great Vietnamese study to be applied in reality. With the research results in hands, the research team have worked devotedly in the laboratory to come up with the best liver detox solution. Then, Naturenz has become a Vietnamese liver detoxification drug made from Vietnamese materials produced by and for the Vietnamese. Over a long journey, DHG Pharma has continuously developed products to help patients reduce the financial burden and lead to a healthier life, contributing to solving the rapidly increasing liver disease. With the pioneering spirit, DHG Pharma is proud to have done extraordinary things, creating a healthier future for generations.
BOCALEX - BIOSKIN In the first months of 2020, the Covid-19 pandemic broke out and spread worldwide, including Vietnam. Consequently, the demand for antiseptic masks and handwashing products increased significantly as people needed to protect themselves and their families. These products were sold out in a short period, then became scarce on the market. In this situation, Bioskin was born to meet the needs. It is considered a quality product that aims to reach customers as soon as possible when the pandemic gets complicated. DHG Pharma’s Bioskin dry hand gel was officially available at drugstores nationwide in early Mar 2020. In parallel with Bioskin, the traditional Bocalex product line of DHG Pharma also contributes to supporting people’s health by providing vitamin C to help nourish the body, boost immunity, and prevent infections. A series of practical activities are carried out not only within the Company but also with all customers and departments of Can Tho City. DHG Pharma distributed products to workers for free. The Company granted Bocalex Multi products to hospitals and Departments of Health across the country to help people increase their immunity. Bringing quality products to the community has become a sacred responsibility and mission of DHG Pharma. With the efforts of each employee, especially the sales sector, immunityboosting products, and dry handwashing gels have reached consumers across the country.
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107
GRI
400
FULFILLING CUSTOMERS’ NEEDS
APPRECIATING CUSTOMER FEEDBACK Besides, if there are complaints about products, the quality management department will send information to the relevant departments and conduct a cause investigation, verify the entire production process, check samples, and identify the cause. In case of having a quality dispute claim, the quality management department will send the sample to a third party for a confirmation of the analysis result. After receiving the above results, the Company will determine the cause and proceed to resolve the Each customer feedback is an invaluable gift, helping the Company timely grasp customers’ urgent needs as well as increasingly ameliorating and improving the quality of products and services. DHG Pharma has developed several channels for customers to easily share opinions, such as direct meetings, phone, email with the sales team, or give feedback at annual seminars and conferences.
complaint. In particular, employees, who receive complaints will respond to customers less than 7 working days. With regard to complicated cases taking more time to investigate, the quality management department will inform customers via telephone and contact them as soon as the investigation result is revealed. Employees make monthly, quarterly, and yearly summary sheets, regularly review customer complaints dossiers, and timely report to managerial level for remedies and avoidance of repetition.
As an experienced and passionate enterprise, who is in cooperation with global strategic partners, DHG Pharma will constantly develop, constantly innovate and improve to provide the best quality products, ensuring health and safety for consumers and meeting the reliability and expectations of domestic and foreign customers.
MEASUREMENT INDICATORS No.
Criteria
1
The number of factories meeting GMP
2
Number of violations of food safety and hygiene
3
Number of product recalls as the quality is not ensured
4
The total number of violations related to information and trademarks of products and services
5
Selling prohibited or disputed products
6
The total number of communication and marketing violations, including advertising, promotion and sponsorship
7
The total number of grounded complaints related to violations of customer privacy
8
The total number of leaks, steal or loss of customer data
9
Value of fines and non-monetary sanctions for non-compliance with laws and regulations in the social and economic area
108 DHG Pharma - Sustainable development report 2019
Recognition level 100% of production lines meet WHO - GMP standard. In which, 2 production lines meet Japan – GMP, and PIC/s –GMP standards.
No case was recorded.
FLOWCHART OF CUSTOMER COMPLAINTS
SALES DEPARTMENT, CUSTOMER SERVICE DEPARTMENT
Receiving complaints
BFO SYSTEM
Updating complaints on BFO system
SALES DEPARTMENT, CUSTOMER SERVICE DEPARTMENT
Receiving complaints
QUALITY MANAGEMENT (QM) DEPARTMENT
Checking samples, documents and test records Opinion of the third party (Testing laboratory) (if any)
QUALITY CONTROL (QC) DEPARTMENT, QM DEPARTMENT, FACTORY Reviewing the results
Unqualified products
Qualified products
QM DEPARTMENT
Responding to the complaints
Responding to the complaints
QM DEPARTMENT
Handling unqualified products
RELEVANT UNITS
Reporting Saving profiles
Saving profiles
QM DEPARTMENT
When having any questions regarding product quality, promotion information or advice on uses, customers can easily access and quickly get answers via:
CUSTOMER SERVICE HOTLINE (+84) 292 3899 000
dhgpharma@dhgpharma.com.vn
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GRI
400
DEVELOPING PROFESSIONAL PERSONNEL
REFERENCE GRI
102-8
Information on employees and other workers GRI
202
Market presence GRI
401
Employment GRI
403
Occupational health and safety GRI
404
Education and training GRI
405
Diversity and equal opportunity GRI
406
Non-discrimination GRI
407
Freedom of association and collective bargaining GRI
408
Child labor GRI
409
Forced or compulsory labor
110 DHG Pharma - Sustainable development report 2019
STATISTICS ON PERSONNEL At DHG Pharma, we highly appreciate the values created by employees and their contributions to the overall success of the Company. DHG Pharma determines that employees are the main resources and decisive factor for the sustainable development of the Company. Therefore, building and developing professional and highly qualified, motivated, and enthusiastic staff at work is always a top priority in the Company’s long-term development strategy.
DHG PHARMACEUTICAL JOINT STOCK COMPANY
NUMBER OF EMPLOYEES FROM 2015 TO 2019 (EMPLOYEES)
With 35 branches and nearly 3,000 employees across the country, DHG Pharma is fully aware that the Company has made significant contributions and greatly influenced the overall situation of society. Therefore, the Company’s Executive Board has always paid great attention to creating jobs for employees, raising the average annual income to ensure the living standards of workers. During the past 5 years, the number of employees has always been stable, and their expertise and skills have been increasingly improved.
4,000
2,876
2,944
3,205
3,054
2,872
2015
2016
2017
2018
2019
DHG PHARMACEUTICAL JOINT STOCK COMPANY
35 BRANCHES
3,000
2,000
1,000
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GRI
400
DEVELOPING PROFESSIONAL PERSONNEL
NUMBER OF EMPLOYEES BY GENDER, AGE GROUP, FUNCTIONAL GROUPS, LABOR CONTRACTS AND EDUCATIONAL LEVEL No. 1
Classification
Male
Statistics by age group
3
1,156
2,872
602
328
930
30 - 50 years old
1,057
806
1,863
Over 50 years old
57
22
79
1,716
1,156
2,872
Back-office sector
401
436
837
Production sector
325
396
721
Sales sector
990
324
1,314
Statistics by type of labor contracts
1,716
1,156
2,872
Indefinite term
1,296
966
2,262
397
178
575
23
12
35
1,716
1,156
2,872
34
33
67
University
562
391
953
College, Vocational school
755
535
1,290
41
81
122
324
116
440
Statistics by functional groups
Definite term of 1 to 3 years Seasonal and short-term contracts 4
Total
1,716
Under 30 years old
2
Female
Statistics by educational level Post-graduate
Druggist High school
STATISTICS BY GENDER Male
Female
STATISTICS BY AGE GROUP Under 30 years old
30 - 50 years old
Over 50 years old
2.8%
32.4% 40.3% 59.7%
64.9%
112 DHG Pharma - Sustainable development report 2019
MANAGERIAL EMPLOYEES No. 1
Classification
Male
Statistics by age group
3
Total
63
18
81
-
-
-
30 - 50 years old
54
12
66
Over 50 years old
9
6
15
Statistics by functional groups
63
18
81
Back-office sector
18
13
31
Production sector
6
-
6
Sales sector
39
5
44
Others
63
18
81
Nationality: Vietnamese
59
18
77
4
-
4
Under 30 years old
2
Female
Nationality: Japanese
PERSONNEL FLUCTUATIONS No.
Classification
Male
Female
Total
1
NEW RECRUITMENTS
1.1
Statistics by age group
118
41
159
Under 30 years old
89
26
115
30 - 50 years old
28
15
43
Over 50 years old
1
-
1
118
41
159
Back-office sector
10
14
24
Production sector
3
1
4
105
26
131
2.1 Statistics by age group
233
108
341
Under 30 years old
116
36
152
30 - 50 years old
105
63
168
Over 50 years old
12
9
21
233
108
341
Back-office sector
19
14
33
Production sector
22
46
68
192
48
240
1.2 Statistics by functional groups
Sales sector 2
JOB-QUITTING
2.2 Statistics by functional groups
Sales sector 3
OTHERS Number of female employees taking maternity leave and taking care of newborn babies Number of male employees whose wives were on maternity leave Returning to work after maternity leave
93 54 100%
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SALARY AND BENEFIT POLICY FOR EMPLOYEES In order to retain excellent, dedicated and devoted employees of the Company, DHG Pharma always pays close attention to the policies of salary, bonus, and remuneration to promote employees’ enthusiasm, passion, creativity, commitment, and wholehearted contribution to the sustainable development of DHG Pharma so that life of each employee and each family is more sufficient and happier.
workers at DHG Pharma was VND 5,804,000/ person/month, 1.3 - 1.5 times higher than the regional minimum salary in Can Tho, Ho Chi Minh, and Hanoi. Besides, employees also enjoy the right to buy/own shares, welfare regimes on the occasion of holidays, New Year, payment of phone allowances, per diem, uniforms, meals, social insurance, health insurance, unemployment insurance, periodic health checks for themselves and their family members, etc. DHG Pharma commits to securing a good payment rate that is competitive to the market rate, which contributes to guarantee a stable job and long-term benefits for the staff. Simultaneously, DHG Pharma also evaluates KPIs for all employees in order to engage employees toward the Company’s general goals, accurately record work effectiveness, encourage highperforming individuals, increase the productivity of workers as well as keep track and make timely decisions to improve the performance of subordinate level. Besides, the starting salary paid to newly recruited workers, regardless of their genders, is always higher than the regional minimum salary as indicated in the Government’s regulations. DHG Pharma also has a regime of salary payment for employees during the work suspension due to objective reasons such as natural disasters, fires, dangerous epidemics, relocation of operation places at the request of competent agencies or for economic reasons, etc.
In 2019, the average income of workers was recorded at VND 19.9 million/month, about 5 times higher than the minimum salary in compared cities. The minimum income of newly recruited
AVERAGE INCOME OF EMPLOYEES FROM 2015 TO 2019
25
15.7
21.8
17.8
18.9
19.9
2015
2016
2017
2018
2019
20
19.9 (VND MILLION/MONTH)
114 DHG Pharma - Sustainable development report 2019
15
10
5
SHARING
LOYALTIES
CARING
PRODUCTIVITY
OTHER BENEFIT POLICIES FOR EMPLOYEES Identifying human resources as the most valuable resource to create values for the enterprise and the society, the Company has focused on training and developing its employees as a priority strategy for the past half-century. Therefore, caring for employees, families, and family members is not only a responsibility but also a sharing and harmonious combination between the interests of the enterprise and employees so as to bring happiness to employees, help them work more productively, and promote their loyalties to the Company. WELFARE FOR EMPLOYEES • A swimming pool and soccer field to create a playground that also serves that goal of training physical health for employees. • Dormitories or residential accommodation for employees who are still renting houses and have no stable accommodation. • Kindergartens to take care of children so that parents can concentrate on their work, especially shift workers. • A shared kitchen to provide breakfasts, lunches, and shift-break meals to all employees. The meals are always nutritious and ensure food hygiene and safety. • Arranged transportations for employees to commute to work daily at DHG Pharmaceutical Plant (Tan Phu Thanh IZ, Hau Giang province). • With a desire to create a cool and clean space for employees to gather and relax after work, the Company has improved the service quality of its canteen and built a learning corner for employees. Reinventing sustainable values
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CARING ACTIVITIES FOR EMPLOYEES AND THEIR FAMILIES • DHG Pharma fulfilled all social insurance, health insurance, and unemployment insurance for employees. Moreover, the Company also purchased accident, sickness and hospitalization insurance for staff, and premium medical insurance scheme for senior management and excellent employees. • The Company supported staff with loans when repairing, building houses, purchasing household items, or confronting difficulties. In addition, “Fund for a more beautiful and healthier life” supports staff and their families when hospitalized with surgery and suffering from long-term treatment. • The Company also supports part of renting costs and childcare costs as a way to improve employees’ concentration at work. • The Company also paid close attention to sales employees working away from home and supports them typical southern Vietnam foods that remind them of their homeland. Employees at the Company are also regularly gained energy from internal products. • Organized the internal Tet celebration for more than 2,500 staff under the theme “45 Spring in a row”. Activities to celebrate Tet holidays were carefully planned and prepared for months with the participation of many departments under great support from the Company’s leaders. All efforts made to ensure staff and their families would be able to experience a full, fun, and true Tet after a hard-working year. All the smiles, handshakes, images taken, moments of enjoying delicious food, and walking around the Tet market at the Company, etc. are what DHG Pharma has proudly preserved for the past 45 years. • Organized for employees and retired staff to visit Dat Mui - Ca Mau “The origin of DHG PHARMA”. • Organized the contest “The Proud Melody 2019” with the desire to bring a useful playground to celebrate the Company’s 45th anniversary for staff who love music. The program attracted nearly 100 participants of DHG Pharma in all regions of the country. • Organized the event to show gratefulness to employees’ parents, retired employees, and senior employees with over 20-year experience who were on leave under the Company’s policy under the theme “Time series.”
116 DHG Pharma - Sustainable development report 2019
• Organized the Southern mini-football tournament “DHG PHARMA CUP 2019” with the participation of 7 teams in the Company and regional tournaments. Along with that, organized gaming activities to bring joyful and exciting atmosphere for employees in the Company.
CARING FOR EMPLOYEES’ KIDS • Organized “DHG Pharma Kid Talents” contest for staff’s children at Spring Fair. The joyful atmosphere and the kids’ cuteness attracted the attention, support, and encouragement of staff participating in the fair. • Organized programs to send gifts to staff’s children on the occasion of International Children’s Day 1 June, organize the “Fun Summer Exploration” program in Can Tho to let children experience peanut harvesting in the field. • 100 children whose parents are working at the company and sales sector participated in the “Summer Experience” program at Funny Land and Da Lat City. • 500 children whose parents are working at the Company attended the “Happy Full Moon Festival” on Mid-Autumn Festival. • Rewarded 42 children with outstanding academic achievements in 2018 - 2019. Gave each child a giftset of VND 3 million in cash, a 45-year version backpack of DHG Pharma to encourage the spirit of learning and congratulate on the achievements they have made.
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all's under oneRoof
DHG PHARMA
To celebrate DHG Pharma’s 45th birthday, the Company organized a writing contest with the topic “Proud of DHG Pharma history”. The contest was not only seen as a useful playground for employees but also an occasion for the Company to know more about employees’ thoughts and feelings on DHG Pharma. After two months of launching, nearly 150 articles with pure emotions, beautiful memories, and impressive stories were submitted. The production sector is filled with memories of sleepless nights working on 3rd shift to make medicines for a healthier life; the sales sector is filled with love and belief of customers while the back-office sector is always associated with sales and production sectors in all activities.
Regardless of the change, the members of DHG Pharma will always follow the path that the Company has chosen, our Cultural identity and Core values are always steady luggage. Life is a big journey, and lifetimes are connected by trips. Our first trip begins when we are aware of our desire to struggle, reach out to touch, and discover the outside world. Many trips take us to new lands, enable us to meet new people, and experience new emotions. Meanwhile, many trips take us to come back to familiar places and old people, etc. We of the latter may not have each other, but the memories of journeys together are forever, then, whenever recalling, we feel we lived life to the fullest and we do not regret when working at DHG Pharma.
For me, living and working every day at DHG Pharma is a pride. I also often joke with my colleagues: If someone asks me, what makes me feel the proudest at DHG Pharma, I can’t end my answers, even I can write a memoir if time allows. The words of “DHG Pharma” are very friendly and close. I always pray for DHG Pharma to be everlasting and developing.
Quoted from the story of Mr. Vo Duy Phuong Dak Lak Branch
Quoted from the story of Ms. Nguyen Nhu Tam Quality Control Department
118 DHG Pharma - Sustainable development report 2019
Before leaving the “dear home”, the person we always respect and love the most has sent some messages to the employees and major shareholders with the desire of building a more prosperous DHG Pharma and upholding the good traditions for 45 years.
To have valuable DHG Pharma as today, the leaders and employees have worked hard to establish: Vision, mission, core values and cultural identity. Those are the oaths that the generations at DHG Pharma have committed. I wish these things, even if we must change to adapt the culture, targets of the professional governance system of the Parent Company, we also try to maintain the core values and soul, since they used to be the firm basis during development of DHG Pharma, and became the beautiful symbol in our hearts. Quoted from the letter of Mdm. Pham Thi Viet Nga former General Director to the major shareholders of the Company
When this letter is sent to you, I officially left DHG Pharma. I will no longer have an opportunity to welcome everyone to visit, celebrate New Year, give birthday wishes every year in the room that I have always opened to welcome you on those special days for decades! However, my heart is always following the business results, development, growth of every member, and collective. I always believe that: You will continue to strive, keep your enthusiasm, live worthy as members of Labor collective, a leading brand, you won’t give in the typical cultural identity that is always respected and beloved by the customers and community! Can this be considered a promise to me? Quoted from the letter of Mdm. Pham Thi Viet Nga former General Director sent to the Sales Sector
I formally put my green uniform shirt in the wardrobe. I will consider it as a memento in my life. Say goodbye to the hearts that have been together along with happiness, sadness, difficulties, and glories. I will remember the memories, stories, and people of DHG Pharma for generations! I always have confidence and pride of DHG Pharma brand. I hope that DHG Pharma and the green shirts are always at the top of Vietnam’s pharmaceutical industry. Be along with Taisho to reach out to the global! I always love and trust the people of DHG Pharma. Quoted from the letter of Mdm. Pham Thi Viet Nga former General Director to all employees
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ENSURING A SAFETY WORKING ENVIRONMENT To ensure long-term health and create a safe working environment that reassures employees when working, DHG Pharma has always complied strictly with legal regulations in relation to work-related health and safety. Such regulations are also sufficiently and frequently imparted to all employees when participating in the production process in factories. The Environment and Labor Safety Department was established with the function of advising and assisting the Executive Board in organizing, inspecting and supervising the implementation of environmental protection, occupational safety and health, fire and explosion prevention within the Company and its subordinate units.
MAIN RESPONSIBILITIES OF THE ENVIRONMENT AND LABOR SAFETY DEPARTMENT
OCCUPATIONAL HEALTH AND SAFETY
120 DHG Pharma - Sustainable development report 2019
ENVIRONMENTAL PROTECTION
FIRE AND EXPLOSION PREVENTION
OCCUPATIONAL HEALTH AND SAFETY
• Providing professional guidance in occupational health and safety in all units. • Coordinating in developing rules, regulations, and procedures on measures to ensure occupational health and safety, and fire and explosion prevention. • Monitoring, inspecting, and facilitating the registration for testing machines, equipment, supplies, and substances subject to strict requirements on occupational health and safety. • Coordinating in developing annual plans on occupational health and safety, as well as facilitating and supervising the implementation of the plans. • Identifying, assessing risks, developing measures for prevention, and emergency response in labor. • Organizing sessions for informing and publicizing regulations on occupational safety and health, etc. • Checking occupational health and safety at least once a month or irregularly according to job requirements. • Monitoring and measuring indicators of the Company’s working environment. • Inspecting food safety within the Company. • Proposing and coordinating with units to implement measures to overcome the shortcomings in occupational health and safety, and to improve working conditions. • Preparing statistics, preliminary and final reports on occupational health and safety.
ENVIRONMENTAL PROTECTION
• Developing, retaining, and updating documents and procedures for environmental protection according to the Environmental Impact Assessment Report approved by state management agencies. • Checking, monitoring, maintaining compliance in environmental protection activities at the Company. • Developing guidelines for environmental management and risk assessment, to develop measures to prevent and respond to environmental incidents. • Inspecting and reporting to the state management agencies on environmental protection and environmental assessment annually according to regulations. • Supervising the collection, management, and treatment of hazardous wastes, domestic wastes, industrial wastes, and other wastes according to regulations.
FIRE AND EXPLOSION PREVENTION
• Developing, retaining, and updating documents and procedures for fire and explosion prevention in accordance with current laws. • Inspecting and supervising the maintenance and compliance in fire prevention and fighting activities at the Company and its subordinates. • Developing plans for fire prevention, fire fighting, and rescue, organizing training sessions, on-site fire prevention rehearsal and fire prevention rehearsal in collaboration with many departments in the most effective way. • Reviewing the regulations on fire safety. Reinventing sustainable values
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Statistical results in 2019 No. 1
Indicators in the reporting period
Figures in
2019
Case
None
Person
None
Number of days that employees are dismissed due to occupational accidents
Day
None
Total number of deaths due to occupational accidents
Case
None
Total number of people suffering from occupational diseases in 2019
Person
None
Total number of occupational diseases cumulative at the time of reporting
Person
None
Occupational accidents Total number of occupational accidents Total number of people suffering from occupational accidents
2
3
Occupational diseases
Number of employees given periodic health examination and occupational health examination Occupational health examination
Person
527/527
Health check for employees working under hard and harmful environment
Person
708/708
Periodic health examination (*)
Person
2,892/2,907
Person
831/831
Specialized health examination for female 4
(**)
Results of classification of workers’ health Type I
%
8.5
Type II
%
67.7
Type III
%
19.7
Type IV
%
3.6
Type V
%
0.5
(***)
(*)
Subjects: Employees are signed labor contracts with the definite term and indefinite term as well as seasonal contracts with working time over 12 months.
(**)
Voluntarily registered by employees.
(***) The result of health check is type V due to missing teeth or myopia.
MEASURES TO PREVENT OCCUPATIONAL ACCIDENTS AND DISEASES IN 2019
At DHG Pharma, we understand that prevention can bring enormous benefits.
Respecting, at all levels, the rights for occupational health and safety. Therefore, DHG Pharma strives to build a preventive culture of occupational health and safety at work based on the participation of stakeholders including employers and employees as followings:
Ensuring active participation of all stakeholders in ensuring a safe and healthy working environment through a set of standards of rights. Top-prioritizing on precautionary principles.
During the meetings and early reports on occupational health and safety, the Company developed the annual labor protection plan, conducted statistical work, and analyzed the results of the previous year. The Company concurrently considered the causes and proposed effective solutions to be implemented in the following year. Thanks to these measures, no occupational accidents and diseases occurred during the year. Moreover, the Company did not record any violation of environmental laws. 122 DHG Pharma - Sustainable development report 2019
The implementation plan carried out by the Company includes risk assessment steps at work together with typical measures as stated below:
5 STEPS FOR RISK MANAGEMENT AT WORK
Step 3: Assessing risks - identifying and determining measures to control risks on safety and health.
Step 1: Figuring out hazards.
Step 2: Determining who can be affected and how it can be affected.
Step 5: Recording findings, monitoring, reviewing risk assessments, and updating when necessary. Step 4: Keeping a record of the person responsible for implementing risk controls measures and timeline.
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GRI
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DEVELOPING PROFESSIONAL PERSONNEL
TECHNICAL MEASURES In design and construction, the Company eliminates potential causes leading to occupational accidents and occupational diseases in the production process such as: Providing shielding and warning in dangerous areas. Providing ventilation and air conditioners for high-temperature areas. Dust, toxic chemicals, and toxic gas must be processed through a fume hood system, vacuum systems, etc. Building a soundproofing room for noisy areas; Installing pedestals to reduce noise and vibration of machinery. Providing sufficient lighting, preferably using natural light. Creating good working space for a comfortable working posture and good performances. Strictly implementing periodic checks on machinery and equipment in accordance with the Company’s plans.
MEDICAL MEASURES Employees, especially workers must have full health records by the time of recruitment.
Perform periodic health checks for early and timely detection and treatment of occupational diseases. Properly implementing the regime of toxic fostering for employees having direct contact with chemicals, raw materials, and uncovered products, etc. Arranging separate medical rooms at the factories, working 24/24 to best care for the health of employees. Depending on the toxicity of the working environment, the Company shall hire functional units to conduct quarterly and annual inspections.
124 DHG Pharma - Sustainable development report 2019
PROVIDING PERSONAL PROTECTIVE EQUIPMENT Personal protective equipment is a necessary measure to help workers minimize the damage caused by their working conditions and environment such as heat, noise, dust, toxic gas, dangerous hazards, etc. DHG Pharma always ensures to provide sufficient personal protective equipment, to keep records and organize monthly crosschecks among units, and specifically report to relevant levels in order to raise safety awareness throughout the Company.
Depending on job location and requirements, employees are provided with appropriate personal protective equipment. Personal protective equipment meets all requirements for quality, purpose, aesthetics, and convenience. Employees, who are equipped with personal protective equipment must use it properly while on duty.
PROPAGANDA AND TRAINING MEASURES Inviting functional units to train, exchange, and share topics on occupational safety – health.
Organizing internal training courses on safety for staff, especially factory workers. Providing training on basic first aid for the Company’s first-aid team. Organizing rehearsals in response to chemical leaks, asphyxiation incidents, etc. Printing and hanging panels, banners, and propaganda about safety - labor health. Regularly reminding and urging the inspection on compliance with the Company’s regulations on occupational health and safety.
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GRI
400
DEVELOPING PROFESSIONAL PERSONNEL
WORK SAFETY Distribution of works must be appropriate to health, gender, and age of employees. Arranging, locating equipment, and production lines so as to minimize contact with harmful chemicals for employees. Making reasonable working time and break time. Determining working time and regulations on personnel exchange.
FIRE PREVENTION AND FIGHTING MEASURES On a weekly basis, the fire prevention and fighting team corporates with the security team to test and operate fire pumps. The team checks on fire extinguishers monthly, ensuring that fire extinguishers are recharged frequently and are ready in case of emergency. The fire alarm system is maintained periodically in accordance with regulations and is carried out by specialized departments. Equipping fire pumps for fire brigade, renovating fire hydrants, and fire extinguishers for warehouses. Quarterly, the grounding resistance of the lightning protection system and the electrical system shall be measured. Training on the use of fire extinguishers of all kinds and appropriate locations for fire extinguishers. Making signage for explosion-prone areas: chemical storage area, drying areas, etc. Building evacuation diagrams, and emergency exit in case of incidents. Smoking is prohibited in the Company, in public, and in smoke-free zones. Stocking goods in a neat and clear manner, paying attention to exits. Not storing flammables/explosives with other goods. Concerned departments must regularly inspect electrical safety, equipment safety. Self-repair of electricity and uncontrollable uses of electricity is prohibited. Electrical appliances are turned off when not in use.
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MEASUREMENT & TESTING OF THE WORKING ENVIRONMENT Measuring method: is in accordance with the technical standards of the Institute of Occupational and Environmental Hygiene 2015 - Ministry of Health. The method is designed to measure climate data, lightning intensity, noise, vibration, ionizing radiation, dust concentration, toxic gas concentration, electric field, magnetic field and microorganism at employees’ sites. Measuring devices: • Microclimate measuring machine: Air Velocity, TSI 9545 - USA. • Light measuring machine: Lux meter, Minolta - 106 589, Japan. • Noise measuring machine: Sound Level Meter, Rion NL - 21, Japan. • Breathing dust measuring machine: HD - 1100, the Environment Devices Corporation, USA. • Toxic gas measuring device: Measurement of toxic gas rapid detection (Precision Gas Detector Tubes) Kitagawa, Japan.
MITIGATION MEASURES To improve working conditions, labor safety, health, and occupational disease prevention for employees, the Company has implemented the following measures: Regularly maintaining the lighting system, installing more light bulbs at an appropriate location to ensure sufficient light for employees to work. Areas with high temperatures will be implemented heat treatment methods, shielding the heat source, using fumes hoods. Regularly maintaining machinery, using new generation making less noise, shielding noise sources, using sound insulation materials, etc. to reduce noise. Workers use earplugs or noise-cancelling earplugs when working in areas where noise exceeds permitted standards to prevent occupational diseases. The storage area which store, and use chemicals are particularly of concerned to the Company as to comply with the statutory provisions on chemicals, construction plans for preventive measures in case of incidents. Organizing hearing examination and respiratory function for workers, who exposed to loud noise and chemicals. All persons entering the production area must comply with the regulations on occupational health and safety, fully equipped with personal protective equipment and the scope of responsibility. Employees must be instructed to work and train on safety before engaging in production. Usage of machinery and equipment without permission and performances of work outside the scope of work assigned is prohibited.
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GRI
400
DEVELOPING PROFESSIONAL PERSONNEL
PERSONNEL RECRUITMENT
Every year, pursuant to the work needs, the operation plan, shortterm and long-term objectives, the Company prepares a plan to recruit personnel. The Company’s recruitment requirements are disclosed on the Company’s Website to attracts and welcomes all candidates who have the desire and ability to work in a “professional - dynamic - modern - friendly” environment.
The recruitment process is based on three principles: Openness - Fairness - Equality. Pursuant to the needs and nature of the work, the Company will consider signing labor contracts with employees in one of the following forms: a. Seasonal labor contract or contract for certain jobs with a term of shorter than 12 months; b. Labor contracts with a definite term from 12 months to 36 months; c. Indefinite - term labor contract. Working time: The working time is 08 hours per day, no more than 48 hours per week for the Back-office Sector. In accordance with the work of the units and the characteristics of the units/locality, employees of the Sales Sector will have reasonable days off so that the volume and quality of work are ensured as yet employees can take a rest. Employees are entitled to the regime of holiday leave, annual leave, and personal leave which is paid in compliance with the provisions of the Labor Law.
Regarding the insurance regime, the Company ensures compliance with the current regulations of the State with the following rates: No.
Interpretation
Paid by the company
Paid by employees
Total
1
Social Insurance
17.5%
8.0%
25.5%
2
Health Insurance
3.0%
1.5%
4.5%
3
Unemployment
1.0%
1.0%
2.0%
Total
21.5%
10.5%
32%
128 DHG Pharma - Sustainable development report 2019
EDUCATION AND TRAINING
TOTAL TRAINING HOURS FOR EMPLOYEES
203,058
HOURS
TOTAL TRAINING HOURS FOR SALES STAFF
75,612
HOURS
TOTAL TRAINING HOURS FOR NEW EMPLOYEES
14,340
HOURS
At DHG Pharma, education and training are developed in accordance with the competencies and professional skills of each employee. The Company always tries to build an organization that regularly shares knowledge and experience in effective teamwork. The training programs are constantly innovated, but it still retains DHG Pharma’s Cultural Identity in order to build employees’ loyalty with the spirit of enthusiasm, commitment, acceptance, and adaptation to suit with changes. In 2019, DHG Pharma continues to effectively promote its education and training programs for its employees. The total number of training hours for leaders, key personnel, and employees are 203,058 hours (averagely 70.72 hours/person/ year). Training provided to sales teams accounted for 75,612 hours (averagely 57.54 hours/person/ year). Training provided to new employees accounted for 14,340 hours (averagely 80.9 hours/person). Reinventing sustainable values
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45,489 TURNS OF PARTICIPATION IN MORE THAN 25 PROGRAMS
1,833
TURNS OF PARTICIPATION IN SALES, MANAGEMENT TRAINING PROGRAMS
PERIODIC BASIC KNOWLEDGE TRAINING During the year, the Company has implemented a periodically scheduled training plan through more than 25 programs with 45,489 turns of participation. Periodic training plan includes training programs on general knowledge about the Company, DHG Pharma Cultural Identity, internal labor regulations, unit/ individual KPI, basic knowledge about GPs, labor safety, knowledge related to DHG Pharma’s products and professional skills, etc.
ADVANCED TRAINING To take advantage of existing human resources and improve the Company’s professionalism and efficiency, DHG Pharma organizes a lot of programs to help its employees understand clearly about their roles and their careers, encourage them to voluntarily perform their tasks and rights with a positive attitude as well as improving their adaptability. In 2019, DHG Pharma organized management and sales training programs with participation of 1,833 employees and 53 professional training programs with participation of 842 employees.
Sales and management training programs No.
Content
Quantity (person)
Timeline
1
Improving management capability by continuous improvement methods
44
Apr 2019
2
Improving management capability for Branch Managers
35
Apr 2019
3
Management skills for Team Leader
84
Nov 2019
4
Professional negotiation skills
24
Mar 2019
5
Professional sales knowledge and sales skills - Pharmacy sales staff
531
May - Aug 2019
6
Sales Skills and Behavior Models
71
Sept - Oct 2019
7
Hospital channel training for sales staff
60
July 2019
8
"Professional production management" training course
15
Nov 2019
130 DHG Pharma - Sustainable development report 2019
Professional knowledge training programs No.
Content
Timeline
1
Training courses on Financial Management
July - Sept 2019
2
Building management accounting reporting system under Unilever’s control model Practice building management accounting and automation reports
Sept 2019
3
Building management and information reporting system
Sept 2019
4
Converting VAS financial statements to IFRS
Dec 2019
5
“International Commercial Arbitration” course
Nov 2019
6
Training on customs procedures and rules of country-of-origin in CPTPP agreement
Apr 2019
7
Laboratory management under ISO/IEC 17025:2017 standards
Apr 2019
8
R&D trends of the pharmaceutical industry worldwide
Sept 2019
9
Training, experiences sharing and skills exchanging related to research and development of product testing standards
Feb - Apr 2019
10
Training, experiences sharing and skills exchanging related to quality management and testing at Omiya Factory - Taisho - Japan
Aug - Sept 2019
11
Evaluation of analytical processes on drugs’ impurities by high-performance liquid chromatography method (HPLC)
Nov 2019
12
Training on Circular No.15/2019/TT-BYT on bidding for the supply of drugs for public health facilities
Nov 2019
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DIVERSITY, EQUAL OPPORTUNITY AND NON-DISCRIMINATION Ensuring a fair working environment for employees is the motivation that enables DHG Pharma, a 45-year-old Company, to continue to grow and maintain its leading position in the Vietnamese pharmaceutical market. • Employees are fairly treated regardless of their gender, ethnicity, skin color, region, social classes, marital status, creed, religion, health status, and participation in union activities at work. In 2019, DHG Pharma did not record any complaints or incidents related to discrimination. • Equality is applied in recruitment, task assignment, working, and rest time; employees are fairly paid in accordance with their performance. • The Company respects, listens and responds to employees’ questions and concerns. All employees have equal rights to make suggestions and contributions to the building and development of the Company.
• All employees have the same opportunities in training, development, and promotion. • Recognizing the difficulties that women have confronted with during their work, in 2018, DHG Pharma paid close attention to and constantly implemented propaganda to raise awareness about gender, family, and implementation of Population Ordinance, Gender Equality Law, Law on Prevention of Domestic Violence, reproductive health care for female employees, prevention of HIV/AIDS and social evils. No. 1
2
Classification Statistics by region
Male
Female
Total
1,716
1,156
2,872
The North
287
103
390
The Central
188
36
224
The South
1,241
1,017
2,258
Statistics by ethnicity
1,716
1,156
2,872
Kinh people
1,674
1,132
2,806
Hoa people
20
15
35
Khmer people
13
7
20
9
2
11
Others
POLICIES FOR WOMEN At DHG Pharma, all women’s rights are guaranteed in an equal, democratic, and fair manner. • All women and men have the same opportunities to be recruited, trained, and promoted if they satisfy the standards and requirements of the Company. • Salary, bonus, and welfare policies between females and males are not different. DHG Pharma has paid salary and bonus pursuant to the performance of actual work and efficiency. • The Company shall not dismiss female workers or unilaterally terminate the labor contract of those members due to marriage, pregnancy, maternity leave, or breast-feeding a child under 12 months of age; except in case where the term of the labor contract expires or the Company ceases its activities. 132 DHG Pharma - Sustainable development report 2019
• Female workers have the right to unilaterally terminate the labor contract without compensation if they are certified by the hospital or medical examination center at the district or higher level that if they continue to work, it shall have an adverse effect on the fetus or serious health effect. In this case, the period for which a female employee must notify the employer in advance depends on the length of time assigned by the hospital or medical examination center. • Female workers who are pregnant from 7 months or above or breast-feeding a child under 12 months of age are not permitted to work overtime, at night, or on business trips. Female workers who are pregnant from 07 months or above and take in charge of heavy work and in a toxic environment are allowed to transfer to positions with less heavy work or to be reduced one working hour per day while still being paid full salary.
• It is also the Company’s priority to ensure the pregnancies’ health as well as guarantee to have enough labor force in case the pregnancies are unable to work in the 3rd shifts. These working deficient cases will be reported to managers so that they can be assigned with suitable jobs and get monthly pregnancy examination; women with children less than 36 months old do not work in the 3rd shift. Female employees who are nursing children under 12 months old are entitled to 01 hour off per day during the working period while still being paid full salary. Male workers covered by the social insurance scheme whose wives give birth to children are entitled to paternity leave in accordance with the law. • In addition to the annual health checks, women are also counseled on women-related diseases for effective prevention.
With the role of connecting and ensuring fairness among all employees, the Trade Union of the Company always cares about women and organizes numerous exciting and meaningful activities to thank women for their effort, intelligence, and creativity, contributing to the fulfillment of the assigned targets and plans.
In addition to positive contributions to the development of the Company, women are always good wives and mothers, and actively participate in the Company’s activities. Several typical activities organized for women in 2019 were as follows:
INTERNATIONAL WOMEN’S DAY 8 MAR The Company organized a meaningful day for women at the Company by welcoming, giving flowers, and singing love songs right in front of the entrance gate in the early morning. The action is simple, but it created a more beautiful and meaningful atmosphere on 8 Mar. Besides, there was also a co-performance named “Loving Dance” of male staff, a “Warm Love” cooking contest, and a photo contest under the theme “Memorable Memories.” Through the photos, women had the opportunity to save their best moments on 8 Mar.
VIETNAMESE FAMILY DAY 28 JUNE With the theme “45 years of DHG Pharma _ Connecting Love”, the Company organized a festival to create an atmosphere of cohesion and sharing of each family’s members, strengthening the connection of love for each family of DHG Pharma’s staff. The festival was held with many exciting and meaningful activities such as the co-performance of all DHG Pharma families, games, awards ceremony for staff’s children with excellent achievements, and seminar with the topic “Making friends with children in 4.0 era.”
VIETNAMESE WOMEN’S DAY 20 OCT Skincare and Nutrition team cooperated with Labor Union to organize a seminar for the Company’s employees. With many exciting activities, the program has brought experiences in building family happiness and joy for female staff.
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400
DEVELOPING PROFESSIONAL PERSONNEL
COLLECTIVE BARGAINING AND NO USE OF CHILD LABOR, FORCED OR COMPULSORY LABOR
In June 2019, the National Assembly officially approved a resolution on the ratification of Convention No.98 of the International Labor Organization (ILO). Convention 98 is one of the eight ILO core conventions on the fundamental principles and rights at work, which covers: freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced and compulsory labor; the effective abolition of child labor; the elimination of discrimination in respect of employment and occupation. The ratification of Convention 98 will further strengthen collective bargaining to find solutions that will benefit all parties in the workplace in Vietnam. This can lead to better working conditions, higher labor
productivity, and a fair share of prosperity, contributing to sustainable development. At DHG Pharma, the Company has built up and promoted a fair, dynamic, creative,proactive and energetic working environment. Not only can senior leaders express opinions but rather staff’s voices from all levels are paid attention, listened to so that favorable conditions can be created to maximize their capacity. Accordingly, HR training and development is not viewed as the responsibility of the HR Department, but rather of all members. All employees are involved in the development and planning of personnel and creating the most efficient working environment.
The collective labor agreement, democratic regulations and workplace dialogue regulations have been signed at the annual employee conference to ensure the legitimate rights and interests of employees as well as employers. This agreement is negotiated on the principles of voluntariness, equality, and publicity by the representative of the labor collective and the employer.
134 DHG Pharma - Sustainable development report 2019
In addition to the collective labor agreement, DHG Pharma also attaches special importance to the establishment of a harmonious relationship between managers and employees through the following contents: Organizing a periodic communication channel with employees to listen to their expectations and demands, in order to carry out positive reforms every day aiming towards sustainable development.
Organizing training courses for Trade Union leaders from leader positions or above to grasp information, implement dialogues, develop their negotiation skills for signing collective labor agreement. This system is also specially designed to help these leaders to timely update the difficulties and obstacles of employees at all teams, sectors, and clusters and promptly report them to the superiors.
In order to ensure the employees’ rights, the Labor Union is present in each department that represents to protect the employees’ rights. All comments, complaints, and aspirations of employees are encouraged to be shared through various forms: Email, mailbox, daily exchanges with heads of department or Trade Union, employee conference, etc. In 2019, the Company has implemented a centralized information reception channel so that all feedback and opinions can be received quickly and confidentially.
The Board of Management also clearly explains the process, purpose, meaning of evaluation, classification, and rewarding staff. All employees are treated equally and received protection from the Company against all discrimination in employment or occupation.
DHG Pharma commits that all employees are entitled to labor contracts and participate in social insurance contributions, health insurance, and unemployment insurance for workers in accordance with the provisions of Vietnamese law. In addition, the Company also purchases high-level medical insurance for leading positions, key employees, and outstanding staff.
Employees are promoted, paid, and rewarded pursuant to a fair evaluation of their ability and performance which is corresponding to the market value. DHG Pharma ensures a balance among health, work, and family life so that each employee can fulfill their long-term responsibility and dedication to the Company.
DHG Pharma refrained from child labor as well as abuse, forced, and compulsory labor.
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GRI
204 GRI
301
BUILDING SUSTAINABLE RELATIONSHIPS WITH PARTNERS AND SUPPLIERS
REFERENCE GRI
204
Procurement practices GRI
301
Materials
PROCUREMENT PRACTICES Importing and purchasing materials inside and outside Vietnam % foreign purchase % domestic purchase
The Vietnamese pharmaceutical industry is heavily dependent on raw materials and packages imported from abroad, in which the import proportion is about 90%. Therefore, many companies are vulnerable to fluctuations in exchange rates, supplies, prices due to environmental impacts. On a large scale, DHG Pharma can easily find and negotiate with domestic and foreign suppliers. In 2019, the number of materials used by DHG Pharma was as follows: 3,161 tons of raw materials and adjuvant; 740 million empty capsules of various kinds; 1,436 tons of aluminum, aluminum blister foil, PVC; 10 million boxes & tubes; 4,603 kg of shrink film, other packaging and 281 million paper of all kinds.
15.8%
84.2%
2018
Product quality has always been considered the Company’s top priority for customers and consumers. Consequently, raw materials are always carefully reviewed by the Company and chosen from reputable suppliers in the world and in Vietnam. Raw materials and adjuvants: DHG Pharma prioritizes to import from large and prestigious manufacturers in the US, Europe (France, Germany, Italy, Spain, Sweden, Slovenia, etc.), Asia (Japan, China, India, Southeast Asian countries, etc.)
13.9%
Empty capsules: France, Indonesia, etc.
86.1%
2019
136 DHG Pharma - Sustainable development report 2019
PVC + Aluminum + Plastic paper: Austria, Thailand, China, Vietnam All kinds of labels, label bins, paper manuals, and bags: Most of them are manufactured by DHG Pharma.
CRITERIA FOR EVALUATING SUPPLIERS The selection and evaluation of suppliers increasingly play an important role in business activities of an enterprise. As such, constantly updating information to make informed decisions in selecting and managing appropriate suppliers is a critical prerequisite for the Company to produce high-quality products on schedule, with reasonable prices and ensure its competitiveness on the market. This will also improve inventory management capacity and minimize business risks.
In order to carry out the assessment of suppliers of raw materials and packaging used in production, DHG Pharma issued a Supplier Assessment Procedure to provide guidance for relevant units to evaluate and select appropriate suppliers that fully meet the objectives the enterprise is aiming for. DHG Pharma will carry out the selection and evaluation of new suppliers in accordance with the issued procedure, including the request to provide information about supply capacity, evidence of quality system (GMP certificates and/or other certificates, sending samples for research, etc.) If the aforementioned research and evaluation results meet the requirements, the Company will establish a team to perform a desktop audit or on-site audit.
PERIODIC AUDIT
ON-SITE AUDIT
INCIDENT AUDIT
Suppliers are monitored to be audited periodically. A periodic audit can be a desktop audit or on-site audit based on the risk assessment.
Audit team may include personnel from QM, QC, Factory, etc. and auditors have knowledge about the audit field.
If there are some signals of quality changes or differences compared with the original commitment without any notification, the incident evaluation should be performed.
The supplier will not be added or rejected from the approved supplier list if violating one of the following errors:
The quality of raw materials/materials does not meet the Company’s requirements (affecting product quality).
The supplier does not cooperate and resolve complaints properly. The supplier receives a warning letter from an authority with the reason related to the raw materials/ materials which the Company is using or an export certificate is no longer suitable.
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GRI
413
SPREADING COMMUNITY RESPONSIBILITY REFERENCE GRI
413
Local community
THE YEAR 2019 MARKED THE 45-YEAR HISTORY OF
For a more beautiful and healthier life 138 DHG Pharma - Sustainable development report 2019
DHG Pharma is proud to continuously maintain its leading position, consistently going on the journey of taking care of communities’ health with its high-quality products and services, and practical activities that spread out to the society. This humanistic journey will continuously be retained and nurtured for many more years, especially in 2020, when businesses across the country join hands to prevent and repel the spread of the Covid-19 pandemic.
45 YEARS TO PURSUE A HUMANISTIC JOURNEY DHG Pharma is widely known as a “Brand” built from consumer’s trust through programs for the community, healthcare programs, safe and proper instructions for use of drugs, the manufacturing plants with modern equipment, diversified, abundant and high-quality products; business network throughout the country and increasingly reaching out to the world. DHG Pharma’s image appears everywhere and every time, the ambassadors of this message are DHG Pharma’s sales staff all over the country, who have brought DHG Pharma’s cultural identity and product information to everyone.
Every heart, every brain, and every person of DHG Pharma still perseveres in branding day-by-day, despite the difference of technology at every time, all have the same desire to bring people a true spiritual value, an image of a pharmaceutical company with full of humanity in social healthcare so that DHG Pharma brand always exists at the hearts of consumers. During the past 45 years, DHG Pharma has targeted a sacred mission of improving the health of people.
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413
SPREADING COMMUNITY RESPONSIBILITY
Spreading HUMANISTIC VALUE TO THE COMMUNITY
2,000 EMPLOYEES PARADED THROUGH CAN THO CITY’S MAJOR ROADS, THEN TOGETHER DONATED TO THE POOR PATIENTS
140 DHG Pharma - Sustainable development report 2019
43
FREE MEDICAL EXAMINATION AND TREATMENT PROGRAMS FOR 20,250 PEOPLE IN VIETNAM AND CAMBODIA
650,000 PEOPLE WITH FINANCIAL DIFFICULTIES HAD FREE ACCESS TO MEDICAL CARE AND MEDICINE
To continue scaling up and spreading that humanistic journey, DHG Pharma has increasingly been implementing numerous community programs, contributing to improving the image of the local health industry and bringing humanistic ideas and meanings to people all over the country. With the theme “DHG Pharma - 45 years for a more beautiful and healthier life”, nearly 2,000 employees paraded through Can Tho city’s major roads, then together donated to the poor patients. DHG Pharma Fund for Poor Patient was established in 2002. In the past seventeen years, this activity has been expanded and spread to the Company’s partners and customers. Thanks to this fund, in 2019, DHG Pharma accompanied a team of volunteer doctors and physicians of Can Tho Department of Health to conduct 43 free medical examination and treatment programs for 20,250 people in Vietnam and Cambodia, which promptly supported heart surgery cost as well as donated directly to patients with serious diseases.
DHG Pharma also donated VND 600 million to the Sponsoring Association for Poor Patients of Can Tho City and Hau Giang Province to support treatment costs and improve the health status of patients with financial difficulties. During the long journey, more than 650,000 people with financial difficulties had free access to medical care and medicine. This number will continue to increase in the future as DHG Pharma considers it the Company’s mission. Although the program has been implemented thousand times, our emotion stays the same since the love and sharing we bring never changes.
Mr. Doan Dinh Duy Khuong - Chief Operating Officer of DHG Pharma shared:
People’s healthcare is an extremely important strategy and DHG Pharma has followed it for 45 years. In the past, it was implemented in healthcare through examination activities along with costs for treatment. From 2019 onwards, the goals are raised and delved. For example, in terms of manufacture, DHG Pharma’s products have improved quality and more environmentally friendly so that the inclusion of products for people’s health care has humanity. Secondly, the social activities are more associated and essential for people’s life and there are more programs, and humanity is expanded in combination with partners and customers in regions that we take the initiative instead of meeting their needs. Doctor Nguyen Phuoc Ton - Deputy Director of Can Tho Department of Health shared that:
DHG Pharma’s contribution to people’s healthcare is very important. Every year, DHG Pharma sponsors medical examination and medicine distribution for people in remote areas of Can Tho and neighboring provinces of the Mekong Delta. DHG Pharma is also the main sponsor contributing equipment for grassroots-level healthcare facilities in the context of many difficulties and shortages. Every year, DHG Pharma’s participation in walking towards grassroots-level healthcare facilities significantly contributes to the procurement of medical equipment to serve people.
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413
SPREADING COMMUNITY RESPONSIBILITY
Joining hands
TO PREVENT COVID-19 PANDEMIC
Following that humanistic journey, when the Covid-19 pandemic broke out throughout provinces and cities across the country, DHG Pharma continuously launched timely measures to support the health sector and frontline doctors who are working wholeheartedly to provide treatment for patients.
142 DHG Pharma - Sustainable development report 2019
Specifically, DHG Pharma has accompanied the educational sector of Can Tho City and Ho Chi Minh City by directly providing thousands of bottles of Bioskin antibacterial handwashing gel to teachers of kindergartens, primary schools, junior, and senior high schools, etc. The Company also joined hands in preventing the pandemic by funding VND 3 billion for the Health Sector in Can Tho City, funding VND 2.6 billion to support frontline hospitals, providing medical equipment valued VND 100 million to the Ministry of Health; sponsoring the earliest anti-epidemic product series (Bioskin antibacterial dry hand wash gel, Bocalex effervescent tablets fortifying with vitamins) for doctors as well as the Company’s employees, etc. Notably, the supporting amount of VND 2.6 billion from the Board of Directors’ Remuneration Fund was rushed to the hospitals as soon as the pandemic reached its peak. Hopefully, these practical actions and the enthusiasm for community development of DHG Pharma can contribute to the caring for and protecting the community against Covid-19.
UP TO NOW, THE TOTAL SPONSORSHIP HAS REACHED NEARLY
12
VND BILLION
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143
LINKING WITH ENVIRONMENTAL GOALS GRI
300
GRI 302 GRI 303 GRI 305, 306 GRI 307
146 149 152 162
Energy Water Emissions, effluents and waste Environmental compliance
Today, the gradual loss of green forests means that the world is facing with unpredictable potential disasters as warnings that the Mother Earth angrily bursts out. If we listen to nature enough, listen to every of our breath, every beat of the green forests, then we come to realize that this life ultimately needs a green planet.
0 3 0
GRI
302
ENERGY
REFERENCE GRI
302 Energy
Electricity is an energy source that plays a crucial role in daily life and production. Energy efficiency is a positive solution that helps protect the environment, avoid wasting natural resources and at the same time save energy costs for the Company. Electricity consumption for production and daily living Contents
Figures in
Productivity
2016
Millions of units/year
4,548
4,218
23,147,168
25,156,034
26,275,665
26,257,028
Kwh/ Millions of units
5,244
6,372
5,777
6,224
VND billion/year
36.80
40.66
41.67
45.38
Kwh/year
25,156,034
26,275,665
26,257,028
27,000,000
7,000 6,372
26,500,000
6,224
6,000
5,777
26,000,000 25,500,000 25,000,000
5,244
24,500,000
4,414
5,000
4,548 4,218
3,948
24,000,000
4,000
3,000
23,500,000 23,000,000
2,000
22,500,000 22,000,000
1,000
21,500,000
2016
2017
2018
2019
ELECTRICITY CONSUMPTION (Kwh/year) PRODUCTIVITY (Millions of units/year) INTENSITY (Kwh/ Millions of units)
146 DHG Pharma - Sustainable development report 2019
2019
3,948
Total electricity bills
23,147,168
2018
4,414
Electricity consumption Intensity
2017
Electricity consumption at DHG Pharma is measured in accordance with the total monthly electricity bills at two locations: the headquarter of the parent company (288 Bis Nguyen Van Cu, Ninh Kieu, Cantho) and DHG Pharmaceutical Plant Branch in Hau Giang (Tan Phu Thanh Industrial Zone, Chau Thanh A, Hau Giang). The total electricity consumption was 26,257,028 Kwh/year, a slight decrease compared to the amount in 2018 for which the total cost of electricity consumption was VND 45.38 billion, up 8.9% over the same period due to an increase in electricity price since Mar 2019.
TOTAL ELECTRICITY CONSUMPTION
(FIGURES IN: THOUSAND KWH/MONTH) 2018
3,000
2019
1,600 2,205 2,412 2,226 2,202 2,174 2,584 2,166 2,325 2,320 1,919 2,124 2,174 1,751 2,154 2,378 2,160 2,379 2,349 2,324 2,223 2,280 1,948 2,154
2,500 2,000 1,500 1,000 500
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
TOTAL ELECTRICITY BILLS (FIGURES IN: VND BILLION) 2018
2019
5.00 4.00 3.00
3.93
3.77 3.45
2.77
3.40
3.87
4.47
4.21
3.77
3.77
3.87
3.68
3.74
4.41 3.86
3.63 3.70
3.52
3.42 3.62 3.08
3.43
2.00
3.42
2.28
1.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Linking with environmental goals
147
GRI
302
ENERGY
Gas and coal consumption for production activities Contents
Figures in
Gas consumption
Kg
Total gas bills
VND Million/year
Coal consumption
Ton
Total coal bills
25,000
2016
VND Million/year
22,960
19,556
314
20,000
18,398
22,914
330
358
400
250
15,000
2018
2019
22,960
19,556
18,398
22,914
296
314
330
358
149.13
187.88
42.38
56.11
594
857
212
297
149
200
188
42
56
900
857
350 300
296
2017
800
160 120
700 600
594
500
200 10,000
150 100
5,000
400
80 297 212
40
200
50
2016
2017
2018
2019
GAS CONSUMPTION (kg) TOTAL GAS BILLS (VND Million/year)
Gas consumption at DHG Pharma is mainly for production activities at the liquid medicines’ factory. Coal used at DHG Pharma is mainly used for Plectranthus Amboinicus oil extract in An Giang. There has also been a downward trend, since 2017, in coal consumption which mainly served the purpose of boiling medicinal plants. However, this activity has been terminated since the Company considered its cost-effectiveness balance.
300
100 2016
2017
2018
2019
COAL CONSUMPTION (Ton) TOTAL COAL BILLS (VND Million/year)
SAVING-ENERGY SOLUTIONS • Re-enforcing internal communication to enhance a sense of responsibility toward energy conservation of each employee. Switching off electricity and air conditioning when not in use and leaving the office. • Promoting the application of information technology 4.0, implementing the project of developing “DHG electronic office” to reduce the amount of paper discharged into the environment. • Regularly maintaining machinery, equipment and factories. • Regularly checking the layout and usage of electrical equipment, taking advantage of natural light and cool air, inspecting and maintaining electrical equipment and the Company’s electrical network, etc. • Promoting campaigns for innovations/ ideas for saving electricity for all employees within the Company. • Establishing or assigning a division for taking charge of managing and operating the air-conditioning system at factories in a coordinated and logical manner, to optimize the performance in energy saving. • Replacing low-efficiency lighting systems (fluorescent lamps, incandescent light bulbs, etc.) with energy-saving lighting devices (energy-efficient compact lighting, etc.)
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GRI
302
WATER
REFERENCE GRI
303 Water
Water is an indispensable and precious natural resource for all human activities. It is also an essential component in the production process and daily operation of the Company. This valuable and crucial natural resource is now facing the risk of pollution and depletion, especially with the impact of the global climate change.
Linking with environmental goals
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GRI
303
WATER
Meeting water demands in both quality and quantity is a prerequisite in DHG Pharma’s sustainable development strategy. Contents Productivity Water consumption Intensity Total water bills % of water recycle/total wastewater
Figures in
2016
2017
2018
2019
4,414
3,948
4,548
4,218
211,046
240,568
215,746
221,734
m3/Millions of units
48
61
47
53
VND billion/year
1.7
2.1
1.8
2.0
6.0%
6.2%
6.7%
7.2%
Millions of units/year m3/year
Water consumption in 2019 was calculated in accordance with monthly water bills of the Water Supply and Sewerage Company in Cantho City and Hau Giang Water Supply and Sewerage Projects Urban Joint Stock Company. Water bills were measured at 2 locations: the headquarter of the Parent Company (288 Bis Nguyen Van Cu, Ninh Kieu, Can Tho) and DHG Pharmaceutical Plant Branch in Hau Giang (Tan Phu Thanh Industrial Zone, Chau Thanh A, Hau Giang). Accordingly, water consumption in 2019 rose slightly compared to 2018. In particular, this increase in water was mainly used for renovating factories and equipment as preparation for GMP re-evaluation at DHG Pharmaceutical Manufacturing Plant in Cantho.
150 DHG Pharma - Sustainable development report 2019
RECYCLED AND REUSED WATER Along with the growth of urbanization, climate change has become more complicated, causing great impacts on water resources, depleting clean water resources. In such a context, measures to save water resources, to reuse/ recycle water are extremely necessary. In recognition of challenges for water resources, DHG Pharma has been oriented to save water resources through the recovery and reuse of wastewater after treatment to meet the prescribed standards. Wastewater after treatment for reuse is stored in the reservoir of the wastewater treatment system. The ratio of wastewater recycle tends to grow gradually over the years, reaching 7.12% of total wastewater. This was accomplished since DHG continued to control water consumption and wastewater at DHG Pharmaceutical Plant Branch in Hau Giang.
% OF WASTEWATER RECYCLED/TOTAL WASTEWATER 8.0%
6.0%
6.2%
6.7%
7.2%
2016
2017
2018
2019
6.0%
4.0%
2.0%
WATER-SAVING SOLUTIONS AT DHG PHARMA In order to use and save water efficiently, DHG Pharma standardized its water pipes, installed new water meters certified by the City Water Suppliers at all units using water. Monthly statistics are supervised, switching on/off in using water for the right purpose is reminded.
DHG Pharma propagated and enhanced a sense of responsibility for all employees toward water conservation, and efficient use of water.
Through the role of the Science and Technology Committee, praising and rewarding employees who proposed excellent initiatives, ideas, and solutions for saving water and efficient use of water.
In the coming years, the Company shall continue to arrange a production plan in a logical manner, a batch size expansion, and a continuous production plan. It is projected to reduce cleaning time, water consumption and sanitary waste-water as well as to increase labor productivity, which shall result in a reduction in water consumption/units of product. Simultaneously, DHG Pharma uses water efficiently by designing a complete water supply system and ensuring no leakage, easy control, and easy repair in case of incidents.
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GRI
305
EMISSIONS, EFFLUENTS AND WASTE
REFERENCE GRI
305
Emissions GRI
306
Effluents and waste
During the operation and production process, DHG Pharma always complies with regulations on antipollution in accordance with ISO 9001:2008 and GMP, GLP, GSP-WHO standards. Measures to prevent environmental pollution have been actively implemented by DHG Pharma through the guidance of local environmental agencies such as environmental impact assessments and commitments to comply with regulations. Annually, the Company conducts environmental monitoring 4 times. Environmental monitoring results are evaluated in accordance with current Vietnamese standards (QCVN).
REGULAR EMISSIONS MONITORING DHG Pharma regularly monitors environmental production over the years, at least twice a year. The monitoring results are within the allowable limits, which is DHG Pharma’s commitment to keeping the surrounding environment unaffected by production activities.
IMPLEMENTATION PERIOD FOR ENVIRONMENTAL MONITORING IN 2019 Headquarters of DHG Pharma in Can Tho: Periodic monitoring 4 times/year Mar/2019; June/2019; Sept/2019 and Nov/2019 No.
Monitoring area
Coordinate
KK1: Production zone
UTM: X = 0583940, Y = 1110654
2
KK2: Testing zone
UTM: X = 0583872, Y = 1110610
3
KK3: Office area and security gate
UTM: X = 0583983, Y = 1110589
1
4
KK4: Areas below the main wind direction
152 DHG Pharma - Sustainable development report 2019
UTM: X = 0583925, Y = 1110501
Limitation in line with: • Decision 3733/2002/QĐ-BYT (maximum each); • QCVN 24/2016/BYT (noise contact in 8 hours); • QCVN 26/2016/BYT (medium workload) • QCVN 26: 2010/BTNMT (from 6:00am to 9:00pm) • QCVN 27: 2010/BTNMT (from 6:00am to 9:00pm) • QCVN 05: 2013/BTNMT (one-hour average)
DHG Pharmaceutical Plant Branch in Hau Giang: Periodic monitoring twice a year 01 Apr 2019 and 08 Aug 2019 No. 1
2
Monitoring area
Coordinate UTM: X=1100849, Y=0579700
KK1: The factory gate
KK2: Location 50m below the wind direction
Limitation in line with:
• QCVN 26:2010/BTNMT
UTM: X=1100779, Y=0579668
• QCVN 05:2013/BTNMT
Limits on air quality
No.
Parameter
Decision 3733/2002/ QĐ-BYT (maximum each)
Unit
QCVN 24/2016/ BYT (noise contact in 8 hours)
QCVN 26/2016/ BYT (medium workload)
QCVN 27:2010/ BTNMT (from 6:00am to 9:00pm)
QCVN 05: 2013/ BTNMT (one-hour average)
1
Noise
dBA
2
Dust
µg/m3
8,000
300
3
SO2
µg/m3
10,000
350
4
NO2
3
µg/m
10,000
200
5
CO
µg/m3
40,000
30,000
6
Temperature
0
7
Vibration
dB
C
85
QCVN 26: 2010/ BTNMT (from 6:00am to 9:00pm) 70
18 - 32 75
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GRI
305
EMISSIONS, EFFLUENTS AND WASTE
PARAMETERS AND MONITORING RESULTS OF AIR QUALITY
Headquarters of DHG Pharma in Cantho
No.
Target
Measurement method
1
Noise
TCVN 7878-2:2010
2
Dust
TCVN 5067:1995
3
SO2
4
Unit
2019 KK1
dBA
KK2
KK3
KK4
69.1
65.6
63.9
65.7
µg/m3
155.8
183
150.3
198.2
TCVN 5971-1995
µg/m3
13.8
20
17.2
22.6
NO2
TCVN 6137-2009
µg/m3
8.5
9.5
9.8
24.9
5
CO
HD 5.4 HLb 28.1
µg/m3
6,100
5,200
5,600
6,300
6
Temperature
QCVN 46:2012/BTNMT
0
C
28.3
28.4
7
Vibration
RIOVIBRO Vm-63a
dB
26.7
26.7
All the parameters recorded from the monitoring results at key areas of Headquarters of DHG Pharma in Cantho were very good and are within the limits of the Decision 3733/2002/QĐ-BYT, QCVN 24/2016/BYT, QCVN 26/2016/BYT, QCVN 26:2010/ BTNMT, QCVN 27:2010/BTNMT, QCVN 05:2013/BTNMT. DHG Pharmaceutical Plant Branch in Hau Giang
No.
Target
Measurement method
Unit
1
Noise
TCVN 7878-2:2010
dBA
2
Dust
TCVN 5067 - 1995
3
SO2
4 5
2019 KK1
KK2 69
68
µg/m3
93.0
88.0
TCVN 5971 - 1995
µg/m3
39.2
44.1
NO2
TCVN 6137 - 1996
µg/m3
40.4
23.4
CO
HDCV.TN-CO
µg/m3
3,622
3,763
The Company also monitored air quality at key areas of DHG Pharmaceutical Plant Branch in Hau Giang. All parameters were very good and are within the limits of the Decision 3733/2002/QĐ-BYT, QCVN 24/2016/BYT, QCVN 24/2016/BYT, QCVN 26:2010/BTNMT, QCVN 05:2013/BTNMT.
154 DHG Pharma - Sustainable development report 2019
MITIGATION MEASURES FOR EMISSIONS, EFFLUENTS, AND WASTE EMISSIONS SOURCE: Emissions from production processes are mainly dust.
MITIGATION MEASURES: The Company’s emissions are mainly from production, QC Department, generators, wastewater treatment system, dust, and exhaust fumes from means of transport.
Emissions from QC Department:
Emissions from means of transport:
They are processed through a fume hood system, which does not cause any environmental impact.
Complying with technical requirements such as car maintenance, usage of right fuel, etc. Trucks, which transport raw materials, chemicals and sludge in/out the wastewater treatment zone must be fully covered by canvas and regularly checked the safety and environmental sanitation.
Emissions from generators: As a manufacturing company, DHG Pharma has preferential treatment on power supply. Typically, the Company only uses generators under extraordinary circumstances in case of electrical problems or power outages. As days of power outages are often announced in advance, the Company re-schedules its production plan in order to suspend production activities, avoiding using generators, that are costly and affect the environment. Besides, the Company also installed an exhaust stack system to avoid accumulation of exhaust fumes, to enhance diffusion of fumes and to avoid local pollution. As a result, the amount of fumes generated by generators is negligible. Emissions from air conditioners: In order to reduce this type of emissions, the Company regulates saving practices such as turning on/off hours of air conditioners for office sector. Also, the central refrigeration system for production and preservation of goods, in particular, is divided into many areas for easy control and usage in order to save electricity and minimize emissions.
Regarding circulation areas of means: Layout of green trees, sweeping of roads, spraying water during the dry season to reduce dust and heat. Dust and emissions from pharmaceutical production: • Raw material dust: Dust generating stages including pharmaceutical grinding and filtering, compression, film coating will be kept in a separate vacuum system of each type of equipment, so that they do not spread to the working environment. Dust is then transferred to the hazardous waste storage facility for a transfer to the treatment unit. • Wastewater treatment system: The plant was installed an activated carbon adsorption system in combination with spraying NaOH solution and planting trees to limit odor emission to surrounding area in accordance with the approved Environmental Impact Assessment. Linking with environmental goals
155
GRI
305
EMISSIONS, EFFLUENTS AND WASTE
WASTEWATER HEADQUARTERS OF DHG PHARMA IN CANTHO In 2019, production wastewater was recorded about 8,939 m3/month, mainly generated from stages such as pharmaceutical production, machine, equipment, and factory cleaning. Wastewater from daily activities of employees was about 1,061 m3/month. Wastewater disposal: the joint drainage system of Nguyen Van Cu Street. Total spending on wastewater treatment in 2019: Approximately VND 1.38 billion Treatment method: chemical physics + microbiology. Wastewater treatment systems: 02 wastewater treatment systems: • Wastewater treatment system 1 with capacity: 400 m3/day & night. • Wastewater treatment system 2 with capacity: 400 m3/day & night.
Periodic water quality monitoring is conducted 04 times/a year at Headquarters of DHG Pharma in Cantho. In 2019, the Natural Resource and Environmental Monitoring Center of Cantho Department of Natural Resources and Environment carried out 4 times of monitoring on 08 Mar 2019, 18 June 2019, 20 Sept 2019, 19 Nov 2019. All of the monitoring results are within acceptable limits of QCVN 40:2011/BTNMT (column B), ensuring that DHG Pharma’s production activities have little impact on the surrounding environment.
WASTEWATER TREATMENT SYSTEM FLOWCHART Ozone Wastewater input
Trash prevention bar
Collection hole Air tanks
P-02
AIR BLOWER Aeration tank
SLUDGE CIRCULATION
P-04 Biofilter tank
Clarifier tank
Sludge tank
Disinfection tank P-03
RECEIVING SOURCE Multistage Filters Pumping chemical
CHEMICAL 156 DHG Pharma - Sustainable development report 2019
WASTEWATER
P-01
Monitoring results of water quality after treatment at the wastewater treatment system
No.
Parameter
Unit
Measurement method TCVN 6492:2011
QCVN 40:2011/BTNMT
Wastewater treatment system 1
Wastewater treatment system 2
5.5 - 9
7.19
7.1
1
pH
2
BOD5200C
mg/l
TCVN 6001-1:2008
50
11
12
3
COD
mg/l
SMEWW 5220 COD-C:2012
150
27.1
21.8
4
SS
mg/l
TCVN 6625:2000
100
13.5
15
5
Total Nitrogen
mg/l
TCVN 6638-2000
40
5.8
7.6
6
Total Phosphoric
mg/l
SMEWW 4500-P B&E:2012
6
0.8
0.5
7
Chloride (Cl-)
mg/l
TCVN 6194:1996
1,000
65.7
47.9
8
Color
Pt-Co SMEWW 2120 C:2012
150
6.71
26.71
9
Phenols
0.5 x 103
0.003
KPH (LOD=1)
mg/l
Internal method (EHC-TP1-039)
μg/l
TCVN 7874:2008
10
Cyanide
mg/l
ISO 6703-1:1984 (TCVN 6181:1996)
0.1
0.035
0.046
11
Ammonium (calculated according to N)
mg/l
SMEWW 4500-NH3.B&F:2012
10
0.84
0.78
12
Chromium VI
mg/l
SMEWW 3500 Cr B:2012
0.1
KPH
KPH
13
Mn
mg/l
SMEWW 3111B:2012
1
KPH (MDL=0.05)
KPH (MDL=0.05)
14
Fe
mg/l
TCVN 6177:1996
5
0.7
1.08
15
Chromium (Cl2)
mg/l
SMEWW 4500 G:2012
2
KPH (LOD=0.3)
KPH (LOD=0.3)
16
Sunfua (S2-)
mg/l
EPA 376.2
0.5
KPH (LOD=0.19)
0.8
17
Coliform
VK/100 TCVN 6187-2-1996 ml
5,000
2,800
460
18
Mineral oil
mg/l
TCVN 5070:1995
10
1.25
0.8
19
Arsenic (As)
mg/l
SMEWW 3113B:2012
0,1
KPH (MDL=0.001)
KPH (MDL=0.001)
20 Mercury (Hg)
mg/l
SMEWW 3112B:2012
0.01
KPH (MDL=0.0003)
KPH (MDL=0.0003)
21
Lead (Pb)
mg/l
SMEWW 3113B:2012
0.5
KPH (LOD=0.001)
KPH (LOD=0.001)
22 Cadmium (Cd)
mg/l
SMEWW 3113B:2012
0.1
KPH (LOD=0.001)
KPH (LOD=0.001)
Linking with environmental goals
157
GRI
305
EMISSIONS, EFFLUENTS AND WASTE
DHG PHARMACEUTICAL PLANT BRANCH IN HAU GIANG The amount of wastewater of DHG Pharma Plant in Hau Giang was recorded about 2,534 m3/month, mainly generated in the phases of factory, machine and equipment cleaning, etc. Wastewater from daily activities of workers and securities was about 861 m3/month. Wastewater disposal: Catchpit No. T6-14, Street No. 6, Tan Phu Thanh Industrial Zone - Phase 1. Total spending on wastewater treatment in 2019: approximately VND 500 million. Treatment method: chemical physics + microbiology. Monitoring results of wastewater quality: No.
Parameter
Unit
Measurement method
Periodic water quality monitoring at DHG Pharma Plant in Hau Giang is conducted 04 times per year. In 2019, the Natural Resource and Environmental Monitoring Center – Department of Natural Resources and Environment in Hau Giang and Quality Assurance and Testing Center in Can Tho carried out 4 times of monitoring (01 Apr 2019, 20 June 2019, 08 Aug 2019, 10 Oct 2019). All of the monitoring results are within acceptable limits of QCVN 40: 2011/BTNMT (column B), ensuring that DHG Pharma’s production activities have little impact on the surrounding environment.
QCVN 40:2011/ BTNMT
2019
40
28.7
5.5 to 9
6.86
SMEWW 2120B:2012
150
KPH
mg/l
TCVN 6625:2000
110
6
1
Temperature
2
pH
3
Color
4
TSS
5
BOD5 at 20 C
mg/l
TCVN 6001-1:2008
55
15
6
COD
mg/l
SMEWW 5220C:2012
165
27
7
Total Nitrogen
mg/l
TCVN 6638:2000
44
35.87
8
Total Phosphoric
mg/l
TCVN 6202:2008
6.6
2.2
9
Total Coliform
MPN/100ml
TCVN 6187-2:1996
5,000
KPH
10
Mineral oil
mg/l
SMEWW 5520 B&F:2012
11
1
11
Fe
mg/l
TCVN 6177:1996
5.5
0.23
12
Excess Chlorine
mg/l
SMEWW 4500-Cl B:2012
2.2
KPH (LOD=0.3)
13
As
mg/l
EPA 200.7
0.11
KPH (LOD=0.005)
14
Zn
mg/l
EPA Method 200.7
3.3
KPH (LOD=0.06)
15
Pb
mg/l
EPA Method 200.7
0.55
KPH (LOD=0.002)
16
Cd
mg/l
Epa Method 200.7
0.11
KPH (LOD=0.0002)
17
Hg
mg/l
SMEWW 3112B:2012
0.011
KPH (LOD=0.01)
18
Cu
mg/l
US.EPA Method 200.7
2.2
KPH (LOD=0.03)
19
Cr
mg/l
US.EPA Method 200.7
1.1
KPH (LOD=0.01)
20
Cyanide
mg/l
TCVN 6638:2000
0.11
0.053
21
Phenols
mg/l
TCVN 7874:2008
0.55
0.004
SMEWW 2550B:2012
-
TCVN 6492:2011
Pt - Co o
3+
C
0
158 DHG Pharma - Sustainable development report 2019
WASTEWATER TREATMENT SYSTEM FLOWCHART
Source 2: Non B-Lactam Wastewater
Source 1: Wastewater Containing B-Lactam
Source 3: DHG PP1 wastewater
SCR
SCR Collection hole - T101A
Collection hole - T101B
PUMP
PUMP
SLUDGE
03 FeCl3
Oxidation System - SM201
Reactor - T501 PUMP
Sludge Dewatering - M502
Air tank - T103A
G.UAF - T301,T103B tanks SLUDGE RECIRCULATION
EXCESS SLUDGE
BLOWERS
Tank
Air tank - T902
G.ABox - T302 PUMP
Filtration pillar - T801
Sludge drying bed
Intermediate clarifier - T401 CLORIN
Deodorizing pillar - T802
03
Disinfection tank - T102
RECEIVING SOURCE QCVN 40:2011 (B)
Linking with environmental goals
159
GRI
305
EMISSIONS, EFFLUENTS AND WASTE
WASTE NON-HAZARDOUS SOLID WASTE The source of non-hazardous solid waste including domestic waste (at DHG Pharma: approximately 79.2 m3/month, at DHG Pharmaceutical Plant Branch: approximately 102 m3/month), and ordinary industrial solid waste includes all kinds of carton packaging, carton boxes; the amount of waste (at DHG Pharma: 3,600 kg/month, at DHG Pharmaceutical Plant Branch: 5,000 kg/month). In 2019, the amount of ordinary industrial solid waste at DHG Pharmaceutical Plant Branch witnessed a decline due to a drop in production. Each type of production material has different packaging with an average volume estimated at about 170 kg/day. Every year, DHG Pharma holds bidding to sell to the functional unit for recycling, in order to reduce treatment costs and ensure no harm to the surrounding environment.
Mitigation measures • Domestic solid waste including waste from the office sector, canteen, factory cleaning, bonsai cleaning, etc. These wastes are delivered to the concentrated area of domestic solid waste in line with regulations. • Every day, Can Tho Urban Joint Stock Company gathers about 2.64 m3/day at DHG Pharma, Hau Giang Water Supply and Sewerage - Project Urban Joint Stock Company collects 3.4 m3/day of domestic waste at DHG Pharmaceutical Plant Branch. Afterward, the cleaning staff clean, rinse, and spray 0.4% sterilized Javelle solution. • Ordinary industrial solid waste is brought to the concentrated area in line with regulations. Purchasing firm comes to collect under contracts, cleaning staff then comes to clean after the waste is collected.
HAZARDOUS WASTE The source of hazardous waste includes oily rags, fluorescent lamps, waste oil, waste electronic component, etc. The amount of hazardous waste (at DHG Pharma: 8.76 tons/month, at DHG Pharmaceutical Plant Branch: approximately 6.6 tons/month). The amount of hazardous waste at the DHG Pharmaceutical Plant Branch increased compared to 2018 due to the merging of DHG PP1 into DHG Pharmaceutical Plant Branch in Hau Giang.
160 DHG Pharma - Sustainable development report 2019
Mitigation measures • Strictly complying with regulations on environmental management guidelines at the Company and applicable laws. • Hazardous wastes are packaged, labeled, and brought to hazardous waste storehouse. The factory contracted with Green Earth Environmental Technologies Joint Stock Company to handle hazardous wastes in line with regulations.
Treatment cost In 2019, the total cost of hazardous waste treatment is about VND 808.2 million, of which VND 441.2 million is from DHG Pharma and VND 367 million is from DHG Pharmaceutical Plant Branch. Total cost of hazardous waste treatment Contents
Unit
2017
2018
2019
Headquarters of DHG Pharma
VND million
504.0
524.0
441.2
DHG Pharmaceutical Plant Branch
VND million
317.0
324.0
367.0
Total
VND million
821.0
848.0
808.2
No.
Name of waste
Code of hazardous waste
2019 (Kg/year)
1
Waste ink containing hazardous constituents
08 02 01
481
2
Waste ink cartridges contain hazardous constituents
08 02 04
1,773
3
Waste engine oils
17 02 04
36
4
Wipes contaminated with hazardous constituents
18 02 01
709
5
Chemical waste in Laboratories
19 05 02
7,643
6
Waste soft packages
18 01 01
25,286
7
Used active coal
02 11 02
36
8
Waste sludge from wastewater treatment
03 05 08
41,008
9
Waste fluorescent bulbs
16 01 06
1,978
10
Waste batteries and accumulators
16 01 02
30
11
Waste electrical equipment and components
16 01 13
56
12
Saturated or used ion-exchanging plastic
12 06 01
-
13
Solid waste substances containing hazardous constituents
03 05 09
105,203
Total
184,239
NOISE AND VIBRATION Sources
Mitigation measures
Arise mainly from the operation of machinery in the production area and wastewater treatment system area.
• Supplying noise-canceling earplugs for employees, who work under noisy environment. • Regularly inspecting and promptly repairing worn and damaged equipment and machinery in conjunction with a strict compliance with periodic maintenance regulations to minimize noise impact. • Conducting measurement of working environment to monitor and improve working conditions for employees. • Working on measures to reduce noise in the areas adjacent to residential areas.
Linking with environmental goals
161
GRI
307
ENVIRONMENTAL COMPLIANCE
REFERENCE GRI
307
Environmental compliance
162 DHG Pharma - Sustainable development report 2019
Economic growth combined with environmental protection is currently seen as the optimal choice in the sustainable development strategy of many companies, including DHG Pharma. Right from the first day of its business, DHG Pharma has consistently pursued the goal of building a close-knit connection between these two objectives to pave its way for achieving the goal of sustainable development and the construction of a leading and environmentally friendly enterprise.
The Environment and Labor Safety Department of DHG Pharma is assigned with the task of inspecting and supervising the implementation of environmental protection activities within the Company and its subordinate units. All employees of DHG Pharma are regularly trained and propagated on how to protect the environment from such simple daily tasks as sorting waste for recycling, saving energy, electricity, water, turning off power and water when not in use, limiting the use of plastic bags, planting and caring of trees, etc. The actions and tasks, though appearing to be simple, make important contributions to creating a positive lifestyle and help spread out the message “For a more beautiful and healthier life” of DHG Pharma.
Prior to operation, all DHG Pharma’s factories conducted environmental impact assessments and strongly committed to protecting the environment. In addition, the factories have always strictly complied with environmental laws, conducted environmental measurements and monitoring every quarter and reported to relevant competent authorities during the operation process. In 2019, the Company did not record any violations of environmental laws: • Number of fines: 0 time. • Amount of fines: VND 0.
ACTIONS TO MINIMIZE IMPACTS ON THE ENVIRONMENT Operation and regular inspection of wastewater treatment systems to ensure that wastewater meets QCVN 40:2011/BTNMT standard. Enhancing the implementation of industrial sanitation in the manufacturing sector and means of transport. Sanitary areas of finished products, internal roads, and regular sprinkling of water in dusty areas. Developing a plan for working safety and health. Providing adequate and appropriate personal protective equipment in production. Supervising employees’ activities for environmental protection. Good handling of solid waste by proper collection and treatment. Regular implementation of environmental monitoring programs periodically. Planting trees around the premise for landscape and fresh air.
Using environmentally friendly paper bags instead of plastic bags. Classifying domestic waste before treatment.
Linking with environmental goals
163
GRI
307
ENVIRONMENTAL COMPLIANCE
Green
ENVIRONMENTAL COMPLIANCE CAMPAIGN COMMITMENT TO ENVIRONMENTAL PROTECTION OF DHG PHARMA With its vision and desire “For a more beautiful and healthier life� for everyone, DHG Pharma is fully aware of the responsibility for protecting our environment. Many actions have been carried out for a long time such as replacing plastics bags by paper bags, sorting organic and inorganic wastes, planting more trees, etc. These actions have received wholehearted support from within the Company and the community. In 2019, with the desire to take a step forward in demonstrating its responsibilities to the community and the environment, a Green Campaign called #GoGreenDHG was launched by DHG Pharma throughout the Company and its customers. The campaign aimed to propagate to everyone about the direct impact of environmental pollution on human health including the circulation of plastic waste, the impact of dust, and the gradual depletion of natural resources, etc, thereby inspiring each of us to take specific actions that contribute to the protection of the Mother Nature.
164 DHG Pharma - Sustainable development report 2019
The campaign was specified through the following
4
activities:
Providing information to propagate about the negative impact of environmental pollution on human life; thereby helping the public to fully understand and inspire them for specific actions. Reducing the amount of single-use plastic waste by reviewing work processes and daily life of each individual and department, which provides a foundation for appropriate solutions. Regenerating habitat by planting more trees both at work and at home. Promoting an anti-wasteful and economical lifestyle with reasonable use of facilities to protect non-renewable resources.
#GoGreenDHG
From the 4 specific directions above, these activities are upgraded to campaigns and movements through which more ideas from individuals and groups have been collected so that most appropriate measures can be selected for each department and position. After more than 1 month of implementing the Green Campaign #GoGreenDHG, 10 departments and 50 ideas were proposed and implemented; nearly 100 employees participated in sharing the ideas on social media, through which the meaningful message reached 16,000 people and created approximately 4,000 interactions. In the go green journey, many changes and ideas have been implemented from the simplest but most practical actions such as replacing bottled water in meeting rooms with glass bottles and grass straws, encouraging employees to use personal water bottles instead of plastic bottled water, creating more greenery in the workspace, making pots from paper tubes and plastic cups for planting as well as shelves made of eco-friendly materials, etc.
The greatest success of the campaign is not only in the recorded figures, but also the pride of joining hands of the DHG Pharma’s family in contributing to the protection of the environment and public health. DHG Pharma has not only created practical actions but also promoted a hope that these small actions from 3,000 employees will be the inspiration to spread the message of protecting the green - clean - beautiful environment to everyone, to relatives, friends, customers, and partners. It is aimed at raising the public awareness in protecting the environment.
Linking with environmental goals
165
GRI
307
ENVIRONMENTAL COMPLIANCE
COOPERATION WITH SUPPLIERS TO PROTECT THE ENVIRONMENT In order to preserve and protect the environment systematically and professionally, DHG Pharma has been signing contracts with suppliers providing services such as collection, transportation, treatment of domestic waste, hazardous waste and environmental monitoring, etc. DHG Pharma has annually monitored and evaluated the cooperation with suppliers and will continue to expand this activity in the coming years. In addition to the contracts listed below, DHG Pharma also signs other contracts such as contract for building sanitation; contract for operation and maintenance of wastewater treatment plant, etc.
Contracts with suppliers
Contents
Contract for collection, transportation, treatment of domestic waste
Collecting, transporting, and treating of generated domestic waste.
Contract for collection, transportation, treatment of hazardous waste
Collecting, transporting, and treating of generated hazardous waste.
Contract for periodic environmental monitoring (effluents, emissions)
Contract for measurement of working environment
Collecting samples, analyzing periodical monitoring samples every 3 months for effluents, emissions, etc. Making periodic monitoring report.
environmental
Collecting samples of working environment indicators (microclimate, lighting, electromagnetic fields, etc.). Making a report on working environment measurement.
Contract for environmental monitoring
Collecting information, data, collecting samples for analyzing effluents, and emissions to prepare an Environmental Monitoring Report.
Contract for drainage and wastewater treatment services
Treating wastewater to meet grade B according to QCVN 40:2011/BTNMT before discharging it into the common wastewater collection system.
Other contracts (if any) such as Contract for building sanitation; Contract for operation and maintenance of wastewater treatment plant, etc.
166 DHG Pharma - Sustainable development report 2019
*** TAKE IMMEDIATE ACTIONS WHEN IT IS STILL POSSIBLE STARTING FROM THE SMALLEST BUT MOST PRACTICAL TASKS ***
Linking with environmental goals
167
REFERENCE TABLE ACCORDING TO GRI STANDARDS
GRI GRI
101 GRI
102
INFORMATION DISCLOSE FOUNDATION
CONTENTS OF THE REPORT
PAGE
Overview of the sustainable development report
30 - 33
Overview of DHG Pharma Organizational chart
8-27 68 - 69
GENERAL DISCLOSURES 2016 ORGANIZATIONAL PROFILE
102.1
Name of the organization
102.2
Activities, brands, products, and services
102.3
Location of headquarters
102.4
Location of operations
102.5
Ownership and legal form
102.6
Markets served
102.7
Scale of the organization
102.8
Information on employees and other workers
Developing professional personnel
110 - 113
102.9
Supply chain
102.10
Significant changes to the organization and its supply chain
Building sustainable relationships with partners and suppliers
136 - 137
102.11
Precautionary Principle or approach
Governance structure for sustainable development Corporate governance towards sustainable development
70 - 75
102.12
External initiatives
Code of conducts with stakeholders
52 - 57
Membership of associations
Stakeholder engagement
58 - 65
102.13
STRATEGY 102.14 102.15
Statement from senior decision-maker
Message of the sustainable development report
Key impacts, risks, and opportunities
Risk management activities Direction for risk management (RM) in 2020
4-5 76 - 81
Ethics and integrity
44 - 51
Organizational chart
68 - 69
Governance structure for sustainable development Corporate governance towards sustainable development
70 - 75
Stakeholder engagement
58 - 65
Overview of the sustainable development report Sustainable development context Governance structure for sustainable development Corporate governance towards sustainable development
30 - 33 34 - 43 70 - 71 72 - 75
Risk management activities Direction for risk management (RM) in 2020
76 - 81
Overview of the sustainable development report Sustainable development context Governance structure for sustainable development Corporate governance towards sustainable development
30 - 33 34 - 43 70 - 71 72 - 75
58 - 65
ETHICS AND INTEGRITY 102.16
Values, principles, standards, and norms of behavior
102.17
Mechanisms for advice and concerns about ethics GOVERNANCE
102.18
Governance structure
102.19
Delegating authority
102.20
Executive-level responsibility for economic, environmental, and social topics
102.21
Consulting stakeholders on economic, environmental, and social topics
102.22
Composition of the highest governance body and its committees
102.23
Chair of the highest governance body
102.24
Nominating and selecting the highest governance body
102.25
Conflicts of interest
102.26
Role of highest governance body in setting purpose, values, and strategy
102.27
Collective knowledge of highest governance body
102.28
Evaluating the highest governance body’s performance
102.29
Identifying and managing economic, environmental, and social impacts
102.30
Effectiveness of risk management processes
102.31
Review of economic, environmental, and social topics
102.32
Highest governance body’s role in sustainability reporting
102.33
Communicating critical concerns
102.34
Nature and total number of critical concerns STAKEHOLDER ENGAGEMENT
102.40
List of stakeholder groups
Stakeholder engagement
102.41
Collective bargaining agreements
Diversity, equal opportunity, and non-discrimination
168 DHG Pharma - Sustainable development report 2019
134 - 135
GRI
INFORMATION DISCLOSE
102.42
Identifying and selecting stakeholders
102.43
Approach to stakeholder engagement
102.44
Key topics and concerns raised
102.45
Entities included in the consolidated financial statements
102.46
Defining report content and topic Boundaries
102.47
List of material topics
102.48
Restatements of information
102.49
Changes in reporting
102.50
Reporting period
102.51
Date of most recent report
102.52
Reporting cycle
102.53
Contact point for questions regarding the report
102.54
Claims of reporting in accordance with the GRI Standards
102.55
GRI content index
GRI 200 GRI
201
CONTENTS OF THE REPORT
PAGE
Stakeholder engagement
58 - 65
Overview of the sustainable development report
30 - 33
ECONOMIC ECONOMIC PERFORMANCE
201.1
Direct economic value generated and distributed
Building a prosperous enterprise
84 - 89
201.2
Financial implications and other risks and opportunities due to climate change
Increasing benefits for shareholders and investors Complying with regulations of state agencies
90 - 93 94 - 99
201.3
Defined benefit plan obligations and other retirement plans
Salary and benefit policy for employees Other benefit policies for employees Personnel recruitment
114 115 - 117 128
201.4
Financial assistance received from government
Contribution to the state’s budget
94
Salary and benefit policy for employees
114
Indirect economic impacts
99
Procurement practices
136
GRI
202
202.1 GRI
203
MARKET PRESENCE Ratios of standard entry level wage by gender compared to local minimum wage INDIRECT ECONOMIC IMPACTS
203.1
Infrastructure investments and services supported
203.2
Significant indirect economic impacts
GRI
204
204.1 GRI
205
PROCUREMENT PRACTICES Proportion of spending on local suppliers ANTI-CORRUPTION
205.1
Operations assessed for risks related to corruption
205.2
Communication and training about anti-corruption policies and procedures
205.3
Confirmed incidents of corruption and actions taken
GRI
206
206.1 GRI 300 GRI
301
Anti-corruption
95 - 97
ANTI-COMPETITIVE BEHAVIOR Legal actions for anti-competitive behavior, anti-trust, and monopoly practices
Anti-competitive behavior
98
Procurement practices
136
ENVIRONMENTAL MATERIALS
301.1
Materials used by weight or volume
301.2
Recycled input materials used
301.3
Reclaimed products and their packaging materials
GRI Standard
169
REFERENCE TABLE ACCORDING TO GRI STANDARDS
GRI GRI
302
INFORMATION DISCLOSE
302.1
Energy consumption within the organization Energy consumption outside of the organization
302.3
Energy intensity
302.4
Reduction of energy consumption
302.5
Reductions in energy requirements of products and services
303
Water withdrawal by source
303.2
Water sources significantly affected by withdrawal of water
303.3
Water recycled and reused
GRI
Direct (Scope 1) GHG emissions
305.2
Energy indirect (Scope 2) GHG emissions
305.3
Other indirect (Scope 3) GHG emissions
305.4
GHG emissions intensity
305.5
Reduction of GHG emissions
305.6
Emissions of ozone-depleting substances (ODS)
305.7
Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions
GRI
Water discharge by quality and destination
306.2
Waste by type and disposal method
306.3
Significant spills
306.4
Transport of hazardous waste
306.5
Water bodies affected by water discharges and/or runoff
307
307.1 GRI 400 GRI
401
Water
149 - 151
Emissions, effluents and waste
152 - 161
Emissions, effluents and waste
152 - 161
Environmental compliance
162 - 163
EFFLUENTS AND WASTE
306.1
GRI
146 - 148
EMISSIONS
305.1
306
Energy
WATER
303.1
305
PAGE
ENERGY
302.2
GRI
CONTENTS OF THE REPORT
ENVIRONMENTAL COMPLIANCE Non-compliance with environmental laws and regulations SOCIAL EMPLOYMENT
401.1
New employee hires and employee turnover
Statistics on personnel
111 - 113
401.2
Benefits provided to full-time employees that are not provided to temporary or part-time employees
Salary and benefit policy for employees Other benefit policies for employees Personnel recruitment
114 115 - 117 128
401.3
Parental leave
Statistics on personnel
111 - 113
Collective bargaining and no use of child labor, forced or compulsory labor
134 - 135
Ensuring a safety working environment
120 - 127
GRI
403
OCCUPATIONAL HEALTH AND SAFETY
403.1
Workers representation in formal joint management–worker health and safety committees
403.2
Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities
403.3
Workers with high incidence or high risk of diseases related to their occupation
403.4
Health and safety topics covered in formal agreements with trade unions
170 DHG Pharma - Sustainable development report 2019
GRI GRI
404
INFORMATION DISCLOSE
Average hours of training per year per employee
404.2
Programs for upgrading employee skills and transition assistance programs
404.3
Percentage of employees receiving regular performance and career development reviews
GRI
405.1
Diversity of governance bodies and employees Ratio of basic salary and remuneration of women to men
GRI
406.1 GRI
407
407.1 GRI
408
408.1 GRI
409
409.1 GRI
413
Incidents of discrimination and corrective actions taken
Diversity, equal opportunity, and non-discrimination
132 - 133
Diversity, equal opportunity, and non-discrimination
132 - 133
Collective bargaining and no use of child labor, forced or compulsory labor
134 - 135
Collective bargaining and no use of child labor, forced or compulsory labor
134 - 135
Collective bargaining and no use of child labor, forced or compulsory labor
134 - 135
Spreading community responsibility
138 - 143
100 - 109
FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk CHILD LABOR Operations and suppliers at significant risk for incidents of child labor FORCED OR COMPULSORY LABOR Operations and suppliers at significant risk for incidents of forced or compulsory labor LOCAL COMMUNITIES Operations with local community engagement, impact assessments, and development programs
413.2
Operations with significant actual and potential negative impacts on local communities
GRI
129 - 131
NON-DISCRIMINATION
413.1
416
Education and training
DIVERSITY AND EQUAL OPPORTUNITY
405.2 406
CUSTOMER HEALTH AND SAFETY
416.1
Assessment of the health and safety impacts of product and service categories
Fulfilling customers' needs
416.2
Incidents of non-compliance concerning the health and safety impacts of products and services
Number of violations of food safety and hygiene; Number of product recalls as the quality is not ensured.
GRI
417
PAGE
TRAINING AND EDUCATION
404.1
405
CONTENTS OF THE REPORT
108
MARKETING AND LABELING
417.1
Requirements for product and service information and labeling
Fulfilling customers' needs
417.2
Incidents of non-compliance concerning product and service information and labeling
The total number of violations related to information and trademarks of products and services
108
417.3
Incidents of non-compliance concerning marketing communications
Selling prohibited or disputed products The total number of communication and marketing violations, including advertising, promotion and sponsorship
108
The total number of grounded complaints related to violations of customer privacy; The total number of leaks, steal or loss of customer data.
108
Value of fines and non-monetary sanctions for non-compliance with laws and regulations in the social and economic area.
108
GRI
418
418.1 GRI
419
419.1
100 - 109
CUSTOMER PRIVACY Substantiated complaints concerning breaches of customer privacy and losses of customer data SOCIOECONOMIC COMPLIANCE Non-compliance with laws and regulations in the social and economic area
GRI Standard
171
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