DHG Pharma - 2019 SUSTAINABLE DEVELOPMENT REPORT

DHG PHARMA - 2019 SUSTAINABLE DEVELOPM

ENT REPORT - TICKER SYMBOL: DHG

2019SUSTAINABLE DEVELOPMENT REPORT

Creating motivation forSustainable development

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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 Pharmaceutical Joint Stock Company/Parent Company

DHG PP1: DHG Packaging and Printing 1 One Member Limited Company

FS: 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: International Organization for Standardization

ISO/IEC 17025: General requirements for the competence of testing and calibration laboratories

KPH: undetected

KPI: Key Performance Indicators

PIC/s – GMP: Pharmaceutical Inspection Co-operation Scheme in the field of Good Manufacturing Practice

QC: Quality Control

QCVN: Vietnamese standards

QM: Quality Management

R&D: 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

LIST OF ABBREVIATIONS CONTENTSCONTENTS

GRI STANDARD

168 Reference table according to GRI standards

04 Message of the sustainable development report

LINKING WITH ENVIRONMENTAL GOALS

Energy Water Emissions, effluents and wasteEnvironmental compliance

GRI 302 GRI 303

GRI 305, 306GRI 307

146149152162

GRI

300

CREATING SUSTAINABLE VALUE

Building a prosperous enterprise Increasing benefits for shareholders and investors Complying with regulations of state agenciesFulfilling customers’ needsDeveloping professional personnelBuilding sustainable relationships with partners and suppliersSpreading community responsibility

GRI 201 GRI 201

GRI 201, 203, 205, 206 GRI 416, 417, 418

GRI 102, 202, 401, 403-409 GRI 204, 301

GRI 413

849094

100110136138

GRI

400GRI

200GRI

100

OVERVIEW OF THE SUSTAINABLE DEVELOPMENT

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

GRI 102 GRI 102 GRI 102GRI 102GRI 102GRI 102GRI 102GRI 102 GRI 102 GRI 102

3034445258656872 76 80

GRI

100

DHG Pharma at a glance Vision - Mission - Core values Key milestones Distinguished awards in 2019 Sustainable development indicators in 2019 Events in 2019Business lines and market regions Value chain of DHG Pharma Factors creating a sustainable developement

GRI 102 GRI 102 GRI 102GRI 102GRI 102GRI 102GRI 102 GRI 102 GRI 102

08101214161820 24 26

OVERVIEW OF DHG PHARMAGRI

100

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”.

3Creating motivation for sustainable development

SUSTAINABLE DEVELOPMENT REPORT 2019

Dear valued Shareholders, Partners, Customers and all Employees!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.

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!

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:

• 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.

• 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.

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,

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.

With Shareholders

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

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.

With Partners

Constantly expand cooperation, joint ventures, associates to develop and expand on the principle of accompanying development.

MESSAGE OF THE SUSTAINABLE DEVELOPMENT REPORT

GRI

102

MASASHI NAKAURA General Director

54 DHG Pharma - Sustainable development report 2019 Creating motivation for sustainable development

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.

OF DHG PHARMA OVERVIEW

GRI

102DHG Pharma at a glance Vision - Mission - Core values Key milestones Distinguished awards in 2019 Sustainable development indicators in 2019 Events in 2019Business lines and market regions Value chain of DHG Pharma Factors creating a sustainable developement

GRI 102 GRI 102 GRI 102GRI 102GRI 102GRI 102GRI 102 GRI 102 GRI 102

08101214161820 24 26

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

Email : [email protected]

Website : www.dhgpharma.com.vn

Certificate of business registration and tax code : 1800156801

The Company’s name in Vietnamese:

3,377,551,482,197

1,307,460,710,000

Owner’s equity (As at 31 Dec 2019) (VND)

Charter capital (As at 31 Dec 2019) (VND)

DHG PHARMA AT A GLANCE

GRI

102

98 DHG Pharma - Sustainable development report 2019 Overview of DHG Pharma

For a more beautiful & healthier life

VISION

MISSION

DHG PHARMA ALWAYS PROVIDESHIGH-QUALITY PRODUCTS AND SERVICES TO SATISFY THE ASPIRATION

FOR A MORE BEAUTIFUL AND HEALTHIER LIFE.

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 LONG-TERM GOAL is mutual prosperity with partners.

OUR ACTIVITIES ALL CENTERED AROUND the benefits of the community.

OUR PRIDE is DHG Pharma’s cultures and identity.

OUR COMPETITIVE ADVANTAGE is the superior differentiation.

CORE VALUES

VISION - MISSION CORE VALUES

GRI

102


DHG Pharma continues to maintain its leading position in the industry after a year of challenges and difficulties, creating new values to serve consumers.

KEY MILESTONES

GRI

102

1974 Established and was formerly known as the 2/9 Pharmaceutical SOE Factory.

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.

2008Implemented modern and effective management tools: 10.5S and Balance Score Card.

2009Successfully implemented the strategy - 20/80 products, customers and personnel.

2010Successfully implemented the strategy “tripod”: shareholders, customers and employees.

2011Successfully implemented the “Factory Productivity Improvement Project” and the “Project to improve performance of subsidiaries”.

2012The topic “Today’s solution is tomorrow’s issue” brought high efficiency to the Company in cost control, risk management (RM) and policies.

2013Completed the construction of the new Non-Betalactam factory and DHG Printing and Packaging 1 Plant Project in Tan Phu Thanh Industrial Zone.

2014Celebrated 40th years of establishing DHG Pharmaceutical Joint Stock Company and 10 years of equitization.

2015Laid the groundwork for restructuring and internally preparing for the new growth period.

2016The first year of the five-year strategy 2016-2020, the beginning of sustainable and effective development.

2017Smooth transitions of the 2 senior positions in the Company: Chairman of the Board of Directors (BOD) and General Director.

2018Foreign 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.

2019Marked 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).

1974 -

20072008

- 2011

2012 -

20152016

- 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.

04 CONSECUTIVE YEARS

MOST VALUABLE BRANDS IN VIETNAM

Voted by Forbes Vietnam


PRESTIGIOUS PHARMACEUTICAL COMPANIES IN 2019 3 criteria for Vietnam Report to vote for are financial capacity, media reputation, and survey of pharmacists and enterprises

LARGEST PUBLIC COMPANIES IN 2019 Voted by Forbes Vietnam


VIETNAM’S BEST PERFORMING COMPANIES Organized by Vietnam Investment

Review Magazine


VIETNAMESE HIGH-QUALITY GOODSVoted by consumers

RANKED 1ST FOR THE BEST CORPORATE GOVERNANCE

REPORTSJointly organized by HCMC

and Hanoi Stock Exchanges, Investment Review Magazine

and Dragon Capital.


LARGECAP BEST ANNUAL 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


BEST LISTED COMPANIES 50TOP

Voted by Forbes Vietnam.

DISTINGUISHED AWARDS IN 2019

GRI

102

TOP

40

TOP

50

TOP

10

TOP

10TOP

5

TOP

100


SUSTAINABLE DEVELOPMENT INDICATORS IN 2019

GRI

102

DHG PHARMACEUTICALJOINT STOCK COMPANY

SUSTAINABLE ECONOMIC GROWTH 3,897 631 523NET SALES (VND BILLION)

PROFIT AFTER TAX (VND BILLION)

DIVIDEND 2019 (VND BILLION)

COMMITMENT TO THE QUALITY OF PRODUCTS AND SERVICES

02 39PRODUCTION LINES MEET HIGH STANDARDS (PIC/S – GMP AND JAPAN – GMP)

PRODUCTS MEET BIOEQUIVALENT

PRODUCTS ARE CIRCULATED NATIONWIDE

308

16,000 1.9PEOPLE JOIN #GOGREENDHG CAMPAIGN

WASTEWATER REUSE RATE

7.2%WASTEWATER TREATMENT VND BILLION/YEAR

203 >90%TOTAL TRAINING HOURS (THOUSAND HOURS)

TRAINING PROGRAMS

90 RETENTION RATE

5.4 20,250CONTRIBUTION TO THE COMMUNITY (VND BILLION)

JOBS (PEOPLE)

2,900 FREE MEDICAL EXAMINATION AND MEDICINE (PEOPLE)

INVESTMENT IN HUMAN RESOURCES DEVELOPMENT

JOINING HANDS FOR ENVIRONMENTAL PROTECTION


ECONOMY

ENVIRONMENT

SOCIETY CONTRIBUTION TO THE COMMUNITY DEVELOPMENT


The Youth Union of DHG Pharma presents gifts to children at Thien An Orphanage (Can Tho).

JANUARY

Donate free medicine gifts to 300 policy-favored households, poor households and 100 disadvantaged pupils in Ca Mau and Kien Giang.

JULY

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.

SEPTEMBER

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.

NOVEMBER

full of love with DHG Pharma’s women on 8 March.

MARCH

Organize Funny summer for discovery - Summer experience program for the children of DHG Pharma’s employees.

MAY

DHG Pharma donates funds to accompany Can Tho Health sector in people’s healthcare activities on the occasion of Vietnamese Doctor’s Day.

FEBRUARY

DHG Pharma commends and rewards students who are children of the Company’s employees for excellent academic achievements in 2018-2019.

AUGUST

Be grateful to parents of the Company’s employees, retired employees with the “Timeline” theme.

OCTOBER

Organize dialogues for employees. This is an annual activity to show comprehensive care to employees towards the Company’s sustainable development goals.

DECEMBER

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.

APRIL

The festival of love named “Family is number 1” at DHG Pharma on the occasion of Vietnamese Family Day.

JUNE

EVENTS IN 2019 “FOR A MORE BEAUTIFUL AND HEALTHIER LIFE”

GRI

102


CORE BUSINESS LINESThe core business lines of DHG Pharma is to manufacture and trade

PHARMACEUTICALS HEALTH SUPPLEMENTS

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:

>50%IN 2019, SALES OF ANTIBIOTIC

AND ANALGESIC - ANTIPYRETIC ACCOUNTED FOR

OF THE TOTAL SALES.

At the beginning of 2020, the Company had

visa numbers for pharmaceuticals with a diverse product list

visa numbers for dietary supplements and cosmeceuticals.

237 71


BUSINESS LINES AND MARKET REGIONS

GRI

102

1.ANTIBIOTIC

6.GASTROINTESTINAL

- HEPATOBILIARY

7.NEUROLOGY -

OPHTHALMOLOGY

8.CARDIOVASCULAR

- DIABETES9.

SKIN CARE 10.

IMPORTED PRODUCTS

11.OTHERS

2.ANALGESIC - ANTIPYRETIC

3.RESPIRATORY

4.NUTRITION

5.MUSCULOSKELETAL


MARKET REGIONS

DOMESTIC MARKET

Through 45 years operating in Vietnamese pharmaceutical market, DHG Pharma was considered an enterprise with the most widespread and largest distribution network, with:

CUSTOMERS ESPECIALLY, CUSTOMERS OF LOYAL CLUB ARE CONSTANTLY GROWING.

>32,000 BRANCHES NATIONWIDE FROM CITY TO COUNTRYSIDE (DISTRIBUTING TO 3 STAGES: CITY, DISTRICT AND COMMUNE)

35EXPORT 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.

Pharmacy Channel: Including agents, private pharmacies,

hospital pharmacies, distribution companies,

retail stores, etc.

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.

DHG Pharma’s products are distributed to customers through the following channels:

98%OF THE SALES VOLUME.

DOMESTIC MARKET ACCOUNTED FOR

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.

BUSINESS LINES AND MARKET REGIONS

GRI

102


CONSUMERS

R&D

R&D

Regulatory Affairs

MARKETING

Marketing

Human Resources (HR), Finance, Accounting, Legal, IT, Environment & Labor safety, etc.

ACTIVITIES

Production

Quality

Supply Chain

DISTRIBUTION CHANNEL

Pharmacy channel

Hospital channel

Export

Modern channel

SUPPORTING ACTIVITIES

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.

CUSTOMERS

PharmaciesHospitals Pharmaceutical companies, etc.

VALUE CHAIN OF DHG PHARMA

GRI

102


DHG PHARMACEUTICALJOINT STOCK COMPANY PP

P r i n t i n g & p a c k a g i n g

FACTORS CREATING A SUSTAINABLE DEVELOPMENT

GRI

102

3 FOCAL AREAS 3

BREAKTHROUGHS

Employees, custom

ers, suppliers,

partners, shareholders, investors,

society, governmentIn

tern

atio

nal s

tand

ards

,

dive

rse

prod

ucts

,

cust

omer

satis

fact

ion

Soil, water, emission, and waste

Resource development Successive trainingMutual prosperities

Value sharing

Improvement of the process system Continuous improvement

Quality improvement

Creation and innovation Guaranteed materials

Modern technology Standard upgrade

Effective budget utilization Promotion of sustainable investment

Utilization of potential

Awareness-raising Energy saving

Waste sources reuse and recycle Sustainable production

Investment of IT application Risk reduction

Increased connection

PEOPLE POLICY AND PROCESS

PRODUCTS INVESTMENT METHOD HABITAT TECHNOLOGY

APPLICATION

27Overview of DHG Pharma 26 DHG Pharma - Sustainable development report 2019

OF THE SUSTAINABLE DEVELOPMENT

OVERVIEW

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

102Overview 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

GRI 102 GRI 102 GRI 102GRI 102GRI 102GRI 102GRI 102GRI 102 GRI 102 GRI 102

3034445258656872 76 80

OVERVIEW OF THE SUSTAINABLE DEVELOPMENT REPORT

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.

BETWEEN THE COMPANY AND ITS STAKEHOLDERS

SUSTAINABLE DEVELOPMENT REPORT IS PREPARED AS A

Bridge 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.

GRI

102

3130 DHG Pharma - Sustainable development report 2019 Overview of the sustainable development

METHOD OF DEFINING REPORTING CONTENTS

OVERVIEW OF THE SUSTAINABLE DEVELOPMENT REPORT

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:

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.


ECONOMY

SOCIETY

ENVIRONMENT

4.1.Stakeholder engagement

1.Accurate

Principles for defining report

contents

Principles for defining report

quality

2.The context of sustainable development

2.Balanced

3.Materiality level

3.Notorious

Sufficiency level

4.Comparable

5.Reliable

6.Timely

SCOPE OF THE REPORT CONTACT INFORMATION

Reporting period:

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.

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:

Website: www.dhgpharma.com.vn (Contact section)

Tel: 02923 891 433 (Ext: 242), Finance Department

Ms. Le Thi Hong Nhung ([email protected]) Finance Director

Ms. Duong Kim Loan ([email protected]) BOD Secretary, The person in charge of Corporate Governance, Investor Relations Team Leader – Finance Department.

GRI

102


SUSTAINABLE DEVELOPMENT CONTEXT

HÀ N�I

ĐAO PHÚ QU�C

QU�N ĐAO HOÀNG SA

QU�N ĐAO TRƯƠNG SA

CÔN ĐAO

TP. HCM

The Government of Vietnam has issued the documents regarding the sustainable development in Vietnam as follows:

Oriented strategy for Sustainable Development in Vietnam (Vietnam’s Agenda 21);

2004

Sustainable Development Strategy of Vietnam for period of 2011-2020;2012

Decision No. 622/QD-TTg on promulgating the National Action Plan to implement 2030 Agenda for Sustainable Development;

2017

Directive No. 13/CT-TTg on Sustainable Development;20 MAY

2019

Decision No. 681/QD-TTg on a roadmap to implement Viet Nam’s sustainable development goals by 2030.

04 JUNE 2019

The main goal for Vietnam will be sustaining economic growth in parallel with ensuring social progress, justice, environmentaland ecological protection, effective management and utilization ofnatural resources and a proactive response to climate change.

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.

• Business environment: ranking 68/190 of economies with score of 67.93/100 (assessed by the World Bank).

• National competitiveness: ranking 77/140 of countries and territories (reported by the World Economic Forum).

• GDP growth in 2019 reached 7.02% compared to 2018.

• 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).

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.

• From 1999 to 2018, CO2 emissions of Vietnam increased significantly from 50.2 to 271.5 million tons.

• Area of degraded soil nationwide: 1.3 million hectares, accounting for 4% of mainland area of territory.

• Sign of soil with degraded fertility: 2.4 million hectares; 6.7 million hectares of soil at risk of degradation.

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.

SUSTAINABLE DEVELOPMENT CONTEXT IN VIETNAM

GRI

102

Source: From the article posted in the second instalment in Nov/2019 on the Financial Magazine.



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.

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 SUSTAINABLE DEVELOPMENT CONTEXT AT


ECONOMY ENVIRONMENTSOCIETY

GRI

102


ACHIEVEMENTS IN 2019 TOWARDS MATERIALS ASPECTS



THE UNITED NATION STANDARDS

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.

All transactions, external relations, business activities, and other activities were closely monitored to ensure that DHG Pharma’s development goals are on track.

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 4,426 billion.

Contributed to the “Fund for a more beautiful and healthier life”.

Orientation and achievements

• Maintaining the leading position in Vietnam Pharmaceutical Industry.

• Improving brand value, maintaining Top 50 most valuable brands in Vietnam.

• Expanding export markets.

Economy

GRI 201

ECONOMIC PERFORMANCE

Maintained the leading position in Vietnam pharmaceutical industry for 23 consecutive years in terms of salesin terms of sales and profit.

Top 40 Most valuable brands in Vietnam voted by Forbes Vietnam.

The export sales in 2019 reached VND 79 billion, up 24.9% over the same period.

Economy

GRI 204

Economy

GRI 205

Economy

GRI 206

Economy

GRI 203

Economy

GRI 202

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.


Searching for more sources of raw materials, packaging with competitive quality and prices.

PROCUREMENT PRACTICES


Ensuring DHG Pharma’s operations are public and transparent.

ANTI - CORRUPTION


Ensuring competition and fairness.

ANTI - COMPETITIVE BEHAVIOR


Maximizing enterprise values and increasing interests of stakeholders.

INDIRECT ECONOMIC IMPACT


Ensuring the quality of life for employees and their families to be above the average level.

MARKET PRESENCE

ECONOMY

GRI

102



KẾT QUẢ ĐẠT ĐƯỢC NĂM 2019 ĐỐI VỚI CÁC LĨNH VỰC TRỌNG YẾU

Society

GRI 401

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.


Maintaining and improving the quality of activities and programs caring about employees’ health and lives.

EMPLOYMENT

Society

GRI 403

100% of employees were offered periodic health check-ups. The Company complied with labor safety regulationsOccupational safety trainings were in accordance with plans. The Company checked and evaluated training effectiveness and awareness of employees.


Ensuring labor safety in production.

OCCUPATIONAL HEALTH AND SAFETY

Society

GRI 404

Society

GRI 404

Society

GRI 406

Society

GRI 407

TRAINING AND EDUCATION

Total training hours: 203,058.

Cost of training: VND 3.8 billion.

Total training programs: 90.


Training human resources with expertise, skills, and being able to adapt to changes in science and technology.

Society

GRI 414

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.


• 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.

LOCAL COMMUNITIES

Society

GRI 409

Society

GRI 408

DHG Pharma did not use child labor and did not mistreat, coerce or force its employees.


No use of child labor.

CHILD LABOR, FORCED OR COMPULSORY LABOR

Female employees accounted for 40%.

During the year, the trade union organized numerous workshops/ consultation events for employees.


• Gender equality, recruitment/ promotion based on each individual’s competence. Developing capacity assessment area for each job position.

• Improving the quality of Union activities.

DIVERSITY AND EQUAL OPPORTUNITY, NON – DISCRIMINATION, FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING

Society

GRI 416

CUSTOMER HEALTH AND SAFETY


• Promoting the application of information technology in management.

• Promoting product development and research.

• Promoting innovation, effective savings, and waste zero.

02 production lines met high standards (PIC/s - GMP, and Japan - GMP).

100% of infrastructure was evaluated and checked annually.

In 2019, the Science and Technology Council at DHG Pharma received 174 ideas and improvements.



SOCIETY

GRI

102

Society

GRI 417 No violation recorded

MARKETING AND LABELING NO VIOLATION RECORDED

Society

GRI 418 No violation recorded

CUSTOMER PRIVACY



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.

The Company did not record any violations on environmental laws.

Monitoring results were within permitted limits.

ENVIRONMENT


• 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.

MATERIALS, ENERGY, WATER


Closely linking the two goals - economic growth and environmental friendliness.

ENVIRONMENTAL COMPLIANCE


• Environmental monitoring: 4 times/year.

• Reduce of CO2 emission.

EMISSIONS


Periodically assessing the discharge to promptly handle and minimize environmental pollution.

EFFLUENTS AND WASTE

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.

Environment

GRI 301

Environment

GRI 302

Environment

GRI 303

Environment

GRI 307

Environment

GRI 305

Environment

GRI 306



GRI

102


ETHICS AND INTEGRITY

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.

BE THE COMPANY PRIDEEssence

LET DHG PHARMA

CORE VALUES - CODE OF CONDUCT

WITH THE MOTTO:

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.

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102



OUR PRIDE IS DHG PHARMA’S CULTURE AND IDENTITY

OUR LONG-TERM GOAL IS MUTUAL PROSPERITY WITH PARTNERS

OUR COMPETITIVE ADVANTAGE IS THE SUPERIOR DIFFERENTIATION

• 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.

• 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.

• 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.

GRI

102



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.

• 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.

• 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.

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.

MORAL VALUES OF THE COMPANY

HONORED MORAL VALUES OF EMPLOYEES

Professionalism;

Creativity;

Loyalty;

Dedication;

Placing group interests on top of personal interest;

Solidarity - affectionate - sharing;

Respect, and be grateful to those who have contributed to the development of the Company.

Responsibilities;

RESPONSIBILITIES

CREATIVITY

PROFESSIONALISM

LOYALTY

DEDICATION

RESPECT, AND BE GRATEFUL TO THOSEWHO HAVE CONTRIBUTED TO THE DEVELOPMENT

OF THE COMPANY

SOLIDARITY - AFFECTIONATE - SHARING

PLACING GROUP INTERESTS ON TOP OF PERSONAL INTERESTS

HONOREDMORAL VALUESOF EMPLOYEES

GRI

102



CULTURE OF COMPLIANCE AND RESPONSIBILITY

IF THE PLAN DOES NOT WORK, REPLACE IT WITH A NOVEL ONE

BUT REMAIN THE SAME TARGETS

CULTURE OF RESPONSIBILITY

WE COMMENCEGET TOGETHER

WE PROGRESSSTICK TOGETHER

WE SUCCEEDWORK TOGETHER

3 PRINCIPLESTRUTH, HONESTY, USEFULNESS

IN ALL CASES, KEEP ABIDING BY

CULTURE OF COMPLIANCE

WHEN ISSUES ARISE,

TAKE PERSONAL ACCOUNTABILITY

GIVE THE BEST OF YOURSELF WHEN AT WORK

REGULATIONS PROCESSES STANDARDS

3 FOLLOWSSTAY COMMITTED TO THE

DO NOT KNOW HOW TO EXECUTE CANNOT EXECUTE DO NOT CARE

3 NOT EXPERTAVOID BEING A

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CODE OF CONDUCTS WITH STAKEHOLDERS

CUSTOMERS

SHAREHOLDERS

AND INVESTORS

SUPPLIERS THE GOVERNMENT,

AND GOVERNMENT

AGENCIES

EMPL

OYE

ES

THE M

EDIA

AND PRESS

THE C

OMM

UNITY

WITH CUSTOMERS WITH CUSTOMERS - CONSUMERS

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.

BBE RESPONSIBLE WITH PRODUCTS PROVIDED TO CUSTOMERS AND CONSUMERS.

A.

B.

“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

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.

Performing bioequivalence tests to prove DHG Pharma’s products are equivalent to the original brand-name drugs.

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.

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.

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.

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.

GRI

102


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,


WITH SHAREHOLDERS AND INVESTORS

WITH EMPLOYEES

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.

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

DHG Pharma is committed to building relationships with shareholders and investors based on honesty, fairness and best interest for all.

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.

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.

GRI

102

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 SUPPLIERS

• 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.

DHG Pharma obeys laws in terms of transactions with suppliers and follows the principles as below:

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.

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.

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.

IS ONE OF THREE LONG-LASTING NORMS OF DHG PHARMA

Care and Share

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STAKEHOLDER ENGAGEMENT

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:

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.

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:

GENERAL MANAGEMENT METHOD IDENTIFY STAKEHOLDERS

PRIORITY ASSESSMENT OF STAKEHOLDERS


EFFECTIVE ECONOMIC GROWTH

CORPORATE GOVERNANCE

DEVELOPMENT OF HUMAN RESOURCES

ENVIRONMENTAL PROTECTION

IDENTIFY STAKEHOLDERS

PRIORITY ASSESSMENT OF STAKEHOLDERS


CONSIDER BENEFITS AND EXPECTATIONS

STEP

01STEP

02STEP

03STEP

04

STEP

01

STEP

02

CUSTOMERS SHAREHOLDERS AND INVESTORS

EMPLOYEES SUPPLIERS AND PARTNERS

THE GOVERNMENT

AND GOVERNMENT

AGENCIES

MEDIA AND PRESS

COMMUNITY

Low

High

DEPEND ON DHG PHARMA

Shareholders and Investors

Suppliers and partners

Employees

Community

Customers

The Government and government agencies

Media and Press

IMPA

CT

ON

DH

G P

HAR

MA

High

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102

STAKEHOLDER ENGAGEMENT At DHG Pharma, to engage with stakeholders,

we implement the following steps:



STAKEHOLDER ENGAGEMENT STEP

03Contact channel Main topics

SUPPLIER AND PARTNERS

• Face to face meetings, information exchange via mobile/email;

• 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;

• Report and require for instructions;

• Participation in conferences, seminars in terms of Medical sector, tax, etc organized by the government and Ministerial level authorities;

• Participation in relevant organizations and associations.

THE GOVERNMENT

• Law and government management topics;

• Market and industry trends;

• Difficulties the enterprise is facing in the progress of implementing policies and regulations.

• Information disclosure, press conference;

• Interview and press release;

• DHG Pharma’s website;

• Social media: facebook, youtube, etc.;

• DHG Pharma’s news.

THE MEDIA AND PRESS

• Transparent information disclose on yearly operation and production results;

• Information disclose if important events take place.

• Face to face meeting;

• Medical seminars and examinations;

• Coordination with local authorities;

• Press.COMMUNITY

• Citizen’s health care;

• Support for disadvantaged people;

• Jobs.

CUSTOMER

Contact channel

• Face to face meetings, information exchange via mobile/email;

• Seminars, conferences, health care talk shows;

• Customer care and hotline;

• DHG Pharma’s website, social media: facebook, forum...;

• Market research.

• Product and service quality;

• Safety and impact level associated with users’ health;

• Side effects;

• Reasonable price policy;

• Customer satisfaction;

• Maintain and improvement of customers’ loyalty.

Main topics

SHAREHOLDERS & INVESTORS

• Quarterly face to face meetings or per request;

• Via email;

• Annual general meeting, extraordinary general meeting, general meeting by solicitation of shareholders;

• DHG Pharma’s website.

• Monthly/ quarterly/ yearly business results;

• Development orientation and strategies;

• The Company’s operation and applicable regulation and policies.

• DHG Pharma’s website, mobile, email...;

• Face to face meetings, information exchange with the Company’s union;

• Internal training programs;

• Internal programs: Labor conference, the Company’s traditional days, year-end party, family day, International Women day, sport, music performances. etc.;

• Employee’s surveys on the working environment;

• General Director’s mailbox;

• Monthly, 6-month/ yearly review conferences.

EMPLOYEES

• Work efficiency is commensurate with salary, bonus and welfare;

• Available regimes and policies;

• Occupational health and labor safety;

• Tight relationships with colleagues;

• Comfortable, respected working environment & training job development skills;

• Enhancement of employees’ loyalty;

• Monthly/ quarterly/ yearly business results.

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:

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102



CONSIDER BENEFITS AND EXPECTATIONSSTEP

04

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.

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.

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.

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.

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.

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MANAGEMENT METHOD

PROCEDURES TO IDENTIFY MATERIALS ASPECTS

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.

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.

Analyzing and identifying material aspects that are

concerned matters of stakeholders

• Selecting material aspects that are mostly concerned by stakeholders to include in the report.

• 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.

Analysis of material aspects in relationships

with stakeholders

• Developing a matrix of important issues “Stakeholder Concerns” and “Impacts on DHG Pharma”.

Review and evaluation on approval

• Reviewing material aspects after releasing reports and gathering comments and feedback from stakeholders.

THE GOVERNMENT

COMMUNITY

MEDIA AND PRESS

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.

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.

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.

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OF MATERIAL ASPECTS

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DETERMINATION OF MATERIAL ASPECTS

+ STAKEHOLDER CONCERNS

+ IM

PAC

T O

N D

HG

PH

AR

MA

Low

High

High Customer Health And Safety

Local Community

Child Labor

Diversity And Equal Opportunity

Freedom Of Association & Collective Bargaining

Education And Training

Occupational Health And Safety

Economic PerformanceRaw Materials Management

Emissions, Effluents and Waste

Energy Employment

Anti-Corruption

Anti-Unfair Competition

Indirect Economic Impact

Environmental Compliance

Water Resources

Forced or compulsory labor


ECONOMIC SECTOR

• Economic Performance

• Market Presence

• Indirect Economic Impact

• Anti-Corruption

• Anti-Unfair Competition • Raw Materials Management

• Energy

• Water Resources

• Emissions, Effluents and Waste

• Environmental Compliance.

ENVIRONMENTAL SECTOR

MATERIAL ASPECTS

MATRIX OF MATERIAL ASPECTS

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.

GRI

102

• Employment• Occupational Health And Safety• Education And Training• Diversity And Equal Opportunity• Non-discrimination • Freedom Of Association & Collective

Bargaining• Child Labor

• Forced or Compulsory Labor • Local Community• Customer Health And Safety• Marketing and Labeling • Customer Privacy

SOCIAL SECTOR

Marketing and LabelingCustomer Privacy


GOVERNANCE STRUCTURE FOR SUSTAINABLE DEVELOPMENT

ORGANIZATIONAL CHART APPARATUS HAS BEEN APPLIED SINCE 01 JAN 2020

ANNUALGENERALMEETING

Human ResourcesQuality Management Distribution CenterFinanceFactory 1

Factory 3

Research &Development

Marketing Dept. - Hospital ChannelPlanning

Supply ChainDirector Production Director Technical Director Marketing DirectorQuality Director HR Director Distribution DirectorFinance Director

Printing & PackagingFactory

Regulatory AffairsPurchasing

Raw Material -Packaging Warehouse

Finished ProductWarehouse

Quality Control (NVC + TPT) Accounting

Accountantsat sales branches

Factory 2

Electromechanical

Administration

Legal

Construction

Central Warehouse (MeKong Delta Region)

Central Warehouse (HCM & East Region)

Central Warehouse (Northern Region)

Direct report

Functional report

Environment &Labor safety

InformationTechnology

DEPUTY GENERAL DIRECTOR IN CHARGE OFPRODUCTION - SUPPLY CHAIN - TECHNOLOGY TRANSFER

DEPUTY GENERAL DIRECTORIN CHARGE OF PRODUCTION - SUPPLY CHAIN

DEPUTY GENERAL DIRECTORIN CHARGE OF MARKET

Pharmacy Channel

Sales System

DEPUTY GENERAL DIRECTORIN CHARGE OF FINANCE

Internal Audit Manager

Internal Audit

CHIEF OPERATING OFFICER

BOARD OF DIRECTORS

GENERAL DIRECTOR

Nomination CommitteeStrategic Committee Audit Committee

Internal Control - Risk Management

GRI

102


GOVERNANCE STRUCTURE FOR SUSTAINABLE DEVELOPMENT

BOARD OF DIRECTORS

• General guidance and issuance of strategies and orientations on issues related to the Company’s sustainable development.

• 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.

GENERAL DIRECTOR AND BOARD OF MANAGEMENT

• Preparing and submitting the objectives and action plans to the BOD for DHG Pharma’s sustainable development.

• 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

• Performing specific daily tasks related to the Company’s sustainable development goals.

• Fully complying with international frameworks and practices on sustainable development.

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.

GRI

102

CHALLENGES AND

OPPORTUNITIES

IMPACTING THE ENVIRONMENT

AND ECOSYSTEM

Growing and aging

population

Climate change

Digitization, artificial

intelligence

Presence of non-traditional

players

Empowered patient

Unmet medical needs

Growing pressure on

pharmaceutical companies

Stakeholders’ expectations for dialogue

Environmental and social

issues

Increased transparency

Wealth disparity

KEY TRENDS IMPACTING THE ENVIRONMENT AND ECOSYSTEM

• Growing and aging population: longer lifespans and modern lifestyles are resulting in growing chronic diseases.

• Wealth disparity: despite a decreasing global poverty rate, disparities in wealth still exist.

• Climate change, environmental pollution: impact people’s health.

• Digitization, artificial intelligence: new technologies and scientific innovations are opening new possibilities in the pharmaceutical industry.

General trends

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

• Unmet medical needs: grassroots-level healthcare facilities are inadequate, leading to an overload for higher-level.

• Empowered patient: consumers are demanding better services and quality.

• Growing pressure on pharmaceutical companies: consumers always expect affordable high quality products. Impacts from changes in regulations, circulars, etc.

• Presence of non-traditional players: competition is ever stronger with emerging rivals.

Health-related trends

• Increased transparency: stakeholders are requiring more transparency leading to new regulatory requirements.

• Stakeholders’ expectations for dialogue: companies are increasingly expected to maintain cooperative relationships with local communities and stakeholders.

• Environmental and social issues: ensuring sustainable practices throughout the supply chain.

Societal trends


CORPORATE GOVERNANCE TOWARDS SUSTAINABLE DEVELOPMENT

ORIENTATION The general orientations for sustainable development are specified as follows:

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.

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.

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.

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.

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

LEGAL ENVIRONMENTNot promptly prepare and adapt to changes in laws.

Changes in laws that directly affect pharmaceutical production activities.Factors of risks

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.

Measures

DOMESTIC MARKET COMPETITIONNot promptly prepare and timely address the competitive pressure from competitors.

• 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.

Factors of risks

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.

Measures

STRATEGIC RISKS

OPERATIONAL RISKS

FINANCIAL RISKS

RISK MANAGEMENT

GRI

102


RISK MANAGEMENT ACTIVITIES

OPERATIONAL RISKS

RAW MATERIALS FOR PRODUCTIONRisks in not timely supplying sufficient raw materials for production at reasonable costs.

• 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.

Factors of risks

• 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.

Measures

PRODUCT QUALITY Products delivered to end-users do not guarantee its quality.

• Complaints from customers about product quality.• Products recalled due to poor quality.

Factors of risks

• 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.

Measures

RISKS IN RETAINING HIGH-QUALITY STAFF

High-quality employees quit while replacements have not been timely planned and prepared.Factors of risks

• Developing training and successive plans.• Implementing the dictionary of competencies. • Searching for new talent through affiliating programs with reputable universities.

Measures

FINANCIAL RISKS

FLUCTUATIONS IN CURRENCY CONVERTING AND INTEREST RATEFluctuated rates of currency exchange and interests negatively affect production activities.

• Importing raw materials from abroad.

• Exporting goods to foreign countries.

• Loans from banks.

Factors of risks

• 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.

Measures

TAX COMPLIANCE

Difficulties in understanding and applying tax regulations in different areas, leading to tax violations detected and fined by tax authorities.

Factors of risks

• 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.

Measures

GRI

102


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

BOD

• Approving RM structure and policies;

• Monitoring and reviewing the effectiveness of the RM structure;

• Providing guidelines and approving risk acceptance threshold;

• Periodically reviewing reports and evaluating RM performance;

• Assessing risks and suggests measures for risk minimization;

• Audit Committee: assisting the BOD in executing RM tasks.

RM Council• Reviewing the evaluation results of risk

owners;

• Making periodical RM reports.

Risk owners

• Identifying, assessing and rating risks in the area of responsibility;

• Proposing action plans;

• Explaining to the RM Council and Audit Committee about the major risks.

RM Department

• Implementing and coordinating RM activities;

• Organizing awareness-raising activities about risks;

• Developing documents and guidelines about RM methods and procedures.

IC Department • Monitoring and evaluating the operation of

the RM system.

BOD

AUDIT COMMITTEE

RM COUNCIL

RM DEPARTMENT

RISK OWNER

INTERNAL AUDIT

Confirmation layer

Implementation layer

Management layer

Guarantee layer

Risk Report channel

Two-way information exchange or integrated RM

DIRECTION FOR RISK MANAGEMENT (RM) IN 2020

PEOPLE

SYSTEM

PROCEDURE

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.

RISK MANAGEMENT SYSTEM IS OPERATED ON BASIS OF 3 ASPECTS

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.

GRI

102


SUSTAINABLE VALUESREINVENTING

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

400

GRI

200

GRI

100

Building a prosperous enterprise Increasing benefits for shareholders and investors Complying with regulations of state agenciesFulfilling customers’ needsDeveloping professional personnel Building sustainable relationships with partners and suppliersSpreading community responsibility

GRI 201 GRI 201 GRI 201, 203, 205, 206 GRI 416, 417, 418 GRI 102, 202, 401, 403-409 GRI 204, 301GRI 413

849094

100110

136138

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

Balance sheet

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

Net sales offinished goods

COGS ofmerchandise

and others

Net sales ofmerchandise

and others

Selling andG&A expenses

Financialincome

Financialexpenses

COGS offinished goods

Other expenses

Before-taxprofit

3,897

622 122

-1,586

-598

-1,021 -99 -2

713

BUILDING A PROSPEROUS ENTERPRISE

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.

REFERENCE

Direct economic value generated and distributed

Financial implications and other risks and opportunities due to climate change

GRI

GRI

201-1

201-2

GRI

201

8584 DHG Pharma - Sustainable development report 2019 Reinventing sustainable values


NET SALES OF DHG IN-HOUSE GOODS

(VND Billion)NET SALES (VND Billion)

1,0001,000

2,000

2,000

3,000

3,000

4,000

4,0005,000

PROFIT (VND Billion)

200

400

600

800

BEFORE-TAX PROFIT AFTER-TAX PROFIT

TOTAL RESOURCES AND OWNER’S EQUITY (VND Billion)

1,000

2,000

3,000

5,000

4,000

2015

3,363 2,521

2016

3,945 2,870

2017

4,087 2,759

2018

4,206 3,144

2019

4,147 3,378

TOTAL RESOURCES OWNER’S EQUITY

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)

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.

2015

3,608

2016

3,783

2017

4,063

2018

3,882

2019

3,897

2015

2,672

2016

3,027

2017

3,054

2018

3,171

2019

3,275

2015

701 593

2016

757 689

2017

719 642

2018

732 651

2019

713 631

GRI

201



CHALLENGES OF CLIMATE CHANGE2019 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.

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.

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.

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.

GRI

201

OPPORTUNITIES


Share name

Charter capital (VND)

SHARE OF DHGPHARMACEUTICAL JSC

1,307,460,710,000 Number of outstanding shares

130,746,071 shares

Share sticker

DHG

Share exchangeHO CHI MINH CITY STOCK EXCHANGE

INCREASING BENEFITS FOR SHAREHOLDERS AND INVESTORS

SHARE INFORMATION & SHAREHOLDER STRUCTURE

DIVIDEND PAYMENT POLICY

REFERENCE

Economic performance

GRI 201

SHARE INFORMATION

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

2,000,000120,000

1,500,000

100,000

1,000,000

80,000

500,000

28.1

2.20

18

14.0

1.20

19

25.0

1.20

19

14.0

2.20

19

27.0

2.20

19

12.0

3.20

19

25.0

3.20

19

05.0

4.20

19

19.0

4.20

19

07.0

5.20

19

20.0

5.20

19

31.0

5.20

19

13.0

6.20

19

26.0

6.20

19

09.0

7.20

19

22.0

7.20

19

02.0

8.20

19

15.0

8.20

19

28.0

8.20

19

11.0

9.20

19

24.0

9.20

19

07.1

0.20

19

18.1

0.20

19

31.1

0.20

19

13.1

1.20

19

26.1

1.20

19

09.1

2.20

19

20.1

2.20

19

60,000

40,000

20,000

Source: website https://vietstock.vn/

SHAREHOLDER STRUCTURE

According to the list of shareholders on 03 July 2019, DHG Pharma’s shareholder structure is as follows:

No. Shareholder name Number of shares %

1 SCIC 56,626,237 43.31%

2 Taisho 66,697,052 51.01%

3 Others 7,422,782 5.68%

5.68%

43.31%

51.01%

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 VND/share 5,748 4,485 4,378 4,445 4,668

(*) Dividend of 2019 is projected to be submitted to the AGM 2019.

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.

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:

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.

(*) 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.

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.

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.

Notice, meeting materials, minutes/resolutions of the Annual General Meeting of Shareholders.

The information is strictly disclosed by DHG Pharma in accordance with the following Principle:

Contact information of the IR Team:

Ms. Le Thi Hong Nhung - Finance Director

THE FIRST PLACE BEST SUSTAINABLE DEVELOPMENT REPORTS

TOP 5OF THE CORPORATE GOVERNANCE AWARD FOR LARGE-CAPITALIZATION COMPANIES

TOP10LARGE CAP WITH BEST ANNUAL REPORTS

• 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.

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

[email protected]

(8429) 23 891 433 - Ext: 242

288 Bis Nguyen Van Cu, An Hoa Ward, Ninh Kieu District, Can Tho City

GRI

416


COMPLYING WITH REGULATIONS OF STATE AGENCIES

REFERENCE

Financial assistance received from the government

Indirect economic impacts

Anti-corruption

Anti-competitive behavior

GRI

GRI

GRI

GRI

201-4

203

205

206

CONTRIBUTION TO THE STATE’S BUDGET ANTI-CORRUPTION

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.

Anti-corruption is one of the most important tasks of DHG Pharma to ensure all activities are public, transparent, and increase operational efficiency.

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.

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.

Target 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



356.6 241.6 306.6 292.1 225.8

48%

3%

3%

29%

17%

VALUE ADDED TAX (VAT) IMPORT, EXPORT TAX CIT PERSONAL INCOME TAX (PIT) OTHER

“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 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 legal rights of the parties who have interests related to the Company are ensured.

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.

CONTRIBUTION TO THE STATE’S BUDGET (VND BILLION)

100

200

300

400

2015 2016 2017 2018 2019

GRI

200

Details are as follows:



General principles of the centralized information receiving channel:

Encourage and respect employees’ opinions and points of view on the Company’s activities.

Ensure confidentiality on personal information for individuals who file opinions, feedback, and complaints.

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 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.

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.

Information is received in 1 of 3 following methods:

In 2019, there was no record of violations related to corruption at DHG Pharma.

Send feedback through DHG Family App, “Feedback”, Section, select “General Director’s Mailbox” Topic.

1

Send email to [email protected]

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.

GRI

200



ANTI-COMPETITIVE BEHAVIOR

INDIRECT ECONOMIC IMPACTS

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.

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.

Employ a learning, justified approach, and fair competition when accessing and working with competitors.

Do not cooperate with other competitors to ruin another competitor.

Do not get involved in activities harming competitors.

AMONG PEOPLE, EVEN TOWARDS THE COMPETITORS THIS IS THE VIEWPOINT OF ALL DHG PHARMA MEMBERS.

APART FROM THE BUSINESS AND

COMPETITION, THERE IS ALSO Humanity

308 297 03PRODUCTS WITH NATIONWIDE VISA NUMBERS(237 PHARMACEUTICALS, 71 DIETARY SUPPLEMENTS, COSMECEUTICALS).

NATIONAL TRADE-MARK CERTIFICATES (296 TRADE-MARK CERTIFICATES, 01 PATENT).

INTERNATIONAL TRADE-MARK CERTIFICATES (MALAYSIA)

DHG PHARMA HAS GOT THE COMPANY ALSO POSSESSES

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.

GRI

200


FULFILLING CUSTOMERS’ NEEDS

REFERENCEQUALITY ASSURANCE

Customer health and safety

GRI 416 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.

GRI

400

Marketing and Labeling

GRI 417

Customer Privacy

GRI 418


PRODUCT LABELING

BIOEQUIVALENT

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.

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.

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.

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.

GRI

400FULFILLING CUSTOMERS’ NEEDS


PRODUCT CHAIN FORMING DHG PHARMA BRAND

HAPACOLNATTOENZYM

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.

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

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.

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”.

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.

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.

GRI



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.

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

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, immunity-boosting products, and dry handwashing gels have reached consumers across the country.

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

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.

APITIM BOCALEX - BIOSKIN

NATUREN Z

GRI



APPRECIATING CUSTOMER FEEDBACK

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.

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.

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

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.

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

Receiving complaints SALES DEPARTMENT,CUSTOMER SERVICE

DEPARTMENT

QUALITY CONTROL (QC) DEPARTMENT, QM DEPARTMENT, FACTORY

QM DEPARTMENT

RELEVANT UNITS

Updating complaints on BFO system

SALES DEPARTMENT,CUSTOMER SERVICE

DEPARTMENT

BFO SYSTEM

Receiving complaints QUALITY MANAGEMENT (QM) DEPARTMENT

Checking samples, documents and test records

Reviewing the results

Qualified products

Responding to the complaints

Responding to the complaints

Handling unqualified products

Unqualified products

Opinion of the third party

(Testing laboratory) (if any)

Saving profilesReporting - Saving profiles

QM DEPARTMENT

QM DEPARTMENT

FLOWCHART OF CUSTOMER COMPLAINTS

[email protected](+84) 292 3899 000

MEASUREMENT INDICATORS

No. Criteria Recognition level

1 The number of factories meeting GMP100% of production lines meet WHO - GMP standard. In which, 2 production lines meet Japan – GMP, and PIC/s –GMP standards.

2 Number of violations of food safety and hygiene

No case was recorded.

3 Number of product recalls as the quality is not ensured

4The total number of violations related to information and trademarks of products and services

5 Selling prohibited or disputed products

6The total number of communication and marketing violations, including advertising, promotion and sponsorship

7The total number of grounded complaints related to violations of customer privacy

8 The total number of leaks, steal or loss of customer data

9Value of fines and non-monetary sanctions for non-compliance with laws and regulations in the social and economic area

GRI



REFERENCE

Information on employees and other workers

GRI 102-8

Market presence

GRI 202

Employment

GRI 401

Occupational health and safety

GRI 403

Education and training

GRI 404

Diversity and equal opportunity

GRI 405

Non-discrimination

GRI 406

Freedom of association and collective bargaining

GRI 407

Child labor

GRI 408

Forced or compulsory labor

GRI 409

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.

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.



35BRANCHES

DEVELOPING PROFESSIONAL PERSONNEL

2,876 2,944 3,205 3,054 2,872

NUMBER OF EMPLOYEES FROM 2015 TO 2019 (EMPLOYEES)

1,000

2,000

3,000

4,000

2015 2016 2017 2018 2019

GRI

400


NUMBER OF EMPLOYEES BY GENDER, AGE GROUP, FUNCTIONAL GROUPS, LABOR CONTRACTS AND EDUCATIONAL LEVEL

MANAGERIAL EMPLOYEES

PERSONNEL FLUCTUATIONS

No. Classification Male Female Total

1 Statistics by age group 1,716 1,156 2,872

Under 30 years old 602 328 930

30 - 50 years old 1,057 806 1,863

Over 50 years old 57 22 79

2 Statistics by functional groups 1,716 1,156 2,872

Back-office sector 401 436 837

Production sector 325 396 721

Sales sector 990 324 1,314

3 Statistics by type of labor contracts 1,716 1,156 2,872

Indefinite term 1,296 966 2,262

Definite term of 1 to 3 years 397 178 575

Seasonal and short-term contracts 23 12 35

4 Statistics by educational level 1,716 1,156 2,872

Post-graduate 34 33 67

University 562 391 953

College, Vocational school 755 535 1,290

Druggist 41 81 122

High school 324 116 440


1 Statistics by age group 63 18 81

Under 30 years old - - -

30 - 50 years old 54 12 66


2 Statistics by functional groups 63 18 81


Production sector 6 - 6

Sales sector 39 5 44

3 Others 63 18 81

Nationality: Vietnamese 59 18 77

Nationality: Japanese 4 - 4


1 NEW RECRUITMENTS

1.1 Statistics by age group 118 41 159


30 - 50 years old 28 15 43

Over 50 years old 1 - 1

1.2 Statistics by functional groups 118 41 159




2 JOB-QUITTING

2.1 Statistics by age group 233 108 341


30 - 50 years old 105 63 168


2.2 Statistics by functional groups 233 108 341




3 OTHERS

Number of female employees taking maternity leave and taking care of newborn babies

93

Number of male employees whose wives were on maternity leave 54

Returning to work after maternity leave 100%

STATISTICS BY GENDER STATISTICS BY AGE GROUP Male Female Under 30 years old 30 - 50 years old Over 50 years old

59.7%

40.3%32.4%

2.8%

64.9%


GRI

400


SALARY AND BENEFIT POLICY FOR EMPLOYEES

OTHER BENEFIT POLICIES FOR EMPLOYEES

WELFARE 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.

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.

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

• 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.

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 high-performing 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.

AVERAGE INCOME OF EMPLOYEES FROM 2015 TO 2019

(VND MILLION/MONTH) 5

10

15

20

25 15.7 21.8 17.8 18.9 19.9

19.9

CARING

PRODUCTIVITY

SHARING

LOYALTIES


2015 2016 2017 2018 2019

GRI

400


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.

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.”

• 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.


GRI

400


all's under oneRoof 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.

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.

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.

Quoted from the story of Mr. Vo Duy Phuong Dak Lak Branch

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.

Quoted from the story of Ms. Nguyen Nhu Tam Quality Control Department

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.

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

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

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


GRI

400


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.

OCCUPATIONAL HEALTH AND

SAFETY


FIRE AND EXPLOSION PREVENTION

MAIN RESPONSIBILITIES OF THE ENVIRONMENT AND LABOR SAFETY DEPARTMENT

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.


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.


• 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.

GRI

400


Statistical results in 2019

No. Indicators in the reporting period Figures in 2019

1 Occupational accidents

Total number of occupational accidents Case None

Total number of people suffering from occupational accidents 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

2 Occupational diseases

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

3Number 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

Specialized health examination for female (**) Person 831/831

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.

At DHG Pharma, we understand that prevention can bring enormous benefits.

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.

MEASURES TO PREVENT OCCUPATIONAL ACCIDENTS AND DISEASES IN 2019

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:

Respecting, at all levels, the rights for occupational health and safety.

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.

The implementation plan carried out by the Company includes risk assessment steps at work together with typical measures as stated below:

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 1: Figuring out hazards.

Step 4: Keeping a record of the person responsible for implementing risk controls measures and timeline.

Step 3: Assessing risks - identifying and determining measures to control risks on safety and health.

5 STEPS FOR RISK MANAGEMENT AT WORK


GRI

400


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.

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.

Regularly reminding and urging the inspection on compliance with the Company’s regulations on occupational health and safety.

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.

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.

Building a soundproofing room for noisy areas; Installing pedestals to reduce noise and vibration of machinery.

Dust, toxic chemicals, and toxic gas must be processed through a fume hood system, vacuum systems, etc.

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.


GRI

400


WORK SAFETY MEASUREMENT & TESTING OF THE WORKING ENVIRONMENT

FIRE PREVENTION AND FIGHTING MEASURES

Distribution of works must be appropriate to health, gender, and age of employees. 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.

Making reasonable working time and break time.

Quarterly, the grounding resistance of the lightning protection system and the electrical system shall be measured.

Making signage for explosion-prone areas: chemical storage area, drying areas, etc.

Stocking goods in a neat and clear manner, paying attention to exits.

Not storing flammables/explosives with other goods.

Building evacuation diagrams, and emergency exit in case of incidents.

Determining working time and regulations on personnel exchange.

Arranging, locating equipment, and production lines so as to minimize contact with harmful chemicals for employees.

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.

Training on the use of fire extinguishers of all kinds and appropriate locations for fire extinguishers.

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.

Smoking is prohibited in the Company, in public, and in smoke-free zones.

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.

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.

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.

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.

Areas with high temperatures will be implemented heat treatment methods, shielding the heat source, using fumes hoods.

Organizing hearing examination and respiratory function for workers, who exposed to loud noise and chemicals.

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.

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.


GRI

400


PERSONNEL RECRUITMENT EDUCATION AND TRAINING

Every year, pursuant to the work needs, the operation plan, short-term 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. 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).

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%

203,058 HOURS

TOTAL TRAINING HOURSFOR EMPLOYEES

75,612 HOURS

TOTAL TRAINING HOURSFOR SALES STAFF

14,340 HOURS

TOTAL TRAINING HOURSFOR NEW EMPLOYEES


GRI

400


PERIODIC BASIC KNOWLEDGE TRAINING

ADVANCED 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.

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.

45,489

1,833

TURNS OF PARTICIPATION IN MORE THAN 25 PROGRAMS

TURNS OF PARTICIPATION IN SALES, MANAGEMENT

TRAINING PROGRAMS

Professional knowledge training programs

No. Content Timeline

1 Training courses on Financial Management July - Sept 2019

2Building management accounting reporting system under Unilever’s control modelPractice 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

9Training, experiences sharing and skills exchanging related to research and development of product testing standards

Feb - Apr 2019

10Training, experiences sharing and skills exchanging related to quality management and testing at Omiya Factory - Taisho - Japan

Aug - Sept 2019

11Evaluation of analytical processes on drugs’ impurities by high-performance liquid chromatography method (HPLC)

Nov 2019

12Training on Circular No.15/2019/TT-BYT on bidding for the supply of drugs for public health facilities

Nov 2019


GRI

400

Sales and management training programs

No. Content Quantity (person) Timeline

1Improving 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

5Professional 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


DIVERSITY, EQUAL OPPORTUNITY AND NON-DISCRIMINATION

POLICIES FOR WOMEN

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.

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.

• 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.

• 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.

• 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.

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.

• 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.


1 Statistics by region 1,716 1,156 2,872

The North 287 103 390

The Central 188 36 224

The South 1,241 1,017 2,258

2 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

Others 9 2 11


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.

GRI

400



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.

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.

The Board of Management also clearly explains the process, purpose, meaning of evaluation, classification, and rewarding 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.

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.

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.

GRI

400


BUILDING SUSTAINABLE RELATIONSHIPS WITH PARTNERS AND SUPPLIERS

PROCUREMENT PRACTICES

CRITERIA FOR EVALUATING SUPPLIERS

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.

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.

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.

The supplier will not be added or rejected from the approved supplier list if violating one of the following errors:

REFERENCE

Procurement practices

GRI 204

Materials

GRI 301

Importing and purchasing materials inside and outside Vietnam

% foreign purchase % domestic purchase

2019

13.9%

86.1%

2018

84.2%

15.8%

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.

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.

PERIODIC AUDIT ON-SITE AUDIT INCIDENT AUDIT

The quality of raw materials/materials does not meet the Company’s requirements (affecting product quality).

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.

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.)

Empty capsules: France, Indonesia, etc.

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.

The supplier does not cooperate and resolve complaints properly.

GRI

301

GRI

204


SPREADING COMMUNITY RESPONSIBILITY

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

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.

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.

THE YEAR 2019 MARKED THE 45-YEAR

HISTORY OF

For a more beautiful and healthier life

REFERENCE

Local community

GRI 413

GRI

413


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.

HUMANISTIC VALUE TO THE COMMUNITY


Spreading2,000 650,00043

EMPLOYEES PARADED THROUGH CAN THO CITY’S

MAJOR ROADS, THEN TOGETHER DONATED TO

THE POOR PATIENTS

PEOPLE WITH FINANCIAL DIFFICULTIES HAD FREE ACCESS

TO MEDICAL CARE AND MEDICINE

FREE MEDICAL EXAMINATION AND TREATMENT PROGRAMS

FOR 20,250 PEOPLE IN VIETNAM AND CAMBODIA

GRI

413



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.

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.

12 VND BILLION

UP TO NOW, THE TOTAL SPONSORSHIP HAS REACHED NEARLY

Joining hands

GRI

413


300300ENVIRONMENTAL GOALSLINKING WITH

GRI

300

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.

Energy Water Emissions, effluents and wasteEnvironmental compliance

GRI 302 GRI 303 GRI 305, 306GRI 307

146149152162

ENERGY

REFERENCE

Energy

GRI 302

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 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.

Electricity consumption for production and daily living

Contents Figures in 2016 2017 2018 2019

Productivity Millions of units/year 4,414 3,948 4,548 4,218

Electricity consumption Kwh/year 23,147,168 25,156,034 26,275,665 26,257,028

Intensity Kwh/ Millions of units 5,244 6,372 5,777 6,224

Total electricity bills VND billion/year 36.80 40.66 41.67 45.38

21,500,000

22,000,0001,000

22,500,000

23,500,000

24,500,000

25,500,000

26,500,000

23,000,0002,000

24,000,000

3,000

25,000,000

4,000

26,000,000

5,000

27,000,000 7,000

6,000

23,147,168

2016

25,156,034

2017

26,275,665

2018

26,257,028

2019

TOTAL ELECTRICITY CONSUMPTION (FIGURES IN: THOUSAND KWH/MONTH)

TOTAL ELECTRICITY BILLS (FIGURES IN: VND BILLION)

500

1.00

1,500

3.00

2,500

1,000

2.00

2,000

4.00

3,000

5.00

2,174 1,751 2,154 2,378 2,160 2,379 2,349 2,324 2,223 2,280 1,948 2,1542,124

3.77

3.45 3.40

3.43

3.74 3.703.52 3.62

3.083.422.77

3.77

3.77

2.28

3.93 3.874.21

3.87 3.63 3.86

3.68

4.47 4.41

3.42

1,600 2,205 2,412 2,226 2,202 2,174 2,584 2,166 2,325 2,320 1,919

Jan

Jan

Feb

Feb

Mar

Mar

Apr

Apr

May

May

Jun

Jun

Jul

Jul

Aug

Aug

Sep

Sep

Oct

Oct

Nov

Nov

Dec

Dec

4,414

5,244

3,948

6,372

4,548

5,777

4,218

6,224

ELECTRICITY CONSUMPTION (Kwh/year) PRODUCTIVITY (Millions of units/year) INTENSITY (Kwh/ Millions of units)

2018 2019

2018 2019

147146 DHG Pharma - Sustainable development report 2019 Linking with environmental goals

GRI

302

Gas and coal consumption for production activities


Gas consumption Kg 22,960 19,556 18,398 22,914

Total gas bills VND Million/year 296 314 330 358

Coal consumption Ton 149.13 187.88 42.38 56.11

Total coal bills VND Million/year 594 857 212 297

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.

• 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.)

SAVING-ENERGY SOLUTIONS

WATER

REFERENCE

Water

GRI 303

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.

5,000 4050 100

100 200

150300

200400

250500

300600

350

700

800

10,000 80

15,000 120

20,000 160

25,000 200400 900

2016 2016

22,960 149

2017 2017

19,556 188

2018 2018

18,398 42

2019 2019

22,914 56

GAS CONSUMPTION (kg) TOTAL GAS BILLS (VND Million/year)

COAL CONSUMPTION (Ton) TOTAL COAL BILLS (VND Million/year)

296594

314

857330

212

358

297

GRI

302GRI

302

ENERGY


Meeting water demands in both quality and quantity is a prerequisite in DHG Pharma’s sustainable development strategy.


Productivity Millions of units/year 4,414 3,948 4,548 4,218

Water consumption m3/year 211,046 240,568 215,746 221,734

Intensity m3/Millions of units 48 61 47 53

Total water bills VND billion/year 1.7 2.1 1.8 2.0

% of water recycle/total wastewater 6.0% 6.2% 6.7% 7.2%

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.

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.

RECYCLED AND REUSED WATER

WATER-SAVING SOLUTIONS AT DHG PHARMA

% OF WASTEWATER RECYCLED/TOTAL WASTEWATER

2.0%

4.0%

6.0%

8.0%

2016

6.0%

2017

6.2%

2018

6.7%

2019

7.2%

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.

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.

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.

GRI

303

WATER


REFERENCE

Emissions

GRI 305

Effluents and waste

GRI 306

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).

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.

REGULAR EMISSIONS MONITORING

IMPLEMENTATION PERIOD FOR ENVIRONMENTAL MONITORING IN 2019

Headquarters of DHG Pharma in Can Tho: Periodic monitoring 4 times/yearMar/2019; June/2019; Sept/2019 and Nov/2019

No. Monitoring area Coordinate Limitation in line with:

1 KK1: Production zoneUTM: X = 0583940, Y = 1110654

• Decision 3733/2002/QĐ-BYT (maximum each);

• QCVN 24/2016/BYT (noise contact in 8 hours);

• QCVN 26/2016/BYT (medium workload)2 KK2: Testing zone

UTM: X = 0583872, Y = 1110610

3 KK3: Office area and security gateUTM: X = 0583983, Y = 1110589

• 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)4 KK4: Areas below the main wind directionUTM: X = 0583925, Y = 1110501

DHG Pharmaceutical Plant Branch in Hau Giang: Periodic monitoring twice a year01 Apr 2019 and 08 Aug 2019

No. Monitoring area Coordinate Limitation in line with:

1 KK1: The factory gateUTM:X=1100849, Y=0579700 • QCVN 26:2010/BTNMT

• QCVN 05:2013/BTNMT2 KK2: Location 50m below the wind direction

UTM:X=1100779,Y=0579668

Limits on air quality

No. Parameter Unit

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)

1 Noise dBA 85 70

2 Dust µg/m3 8,000 300

3 SO2 µg/m3 10,000 350

4 NO2 µg/m3 10,000 200

5 CO µg/m3 40,000 30,000

6 Temperature 0C 18 - 32

7 Vibration dB 75

GRI

305

EMISSIONS, EFFLUENTS AND WASTE


EMISSIONS

Headquarters of DHG Pharma in Cantho

No. Target Measurement method Unit2019

KK1 KK2 KK3 KK4

1 Noise TCVN 7878-2:2010 dBA 69.1 65.6 63.9 65.7

2 Dust TCVN 5067:1995 µg/m3 155.8 183 150.3 198.2

3 SO2 TCVN 5971-1995 µg/m3 13.8 20 17.2 22.6

4 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 0C 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 Unit2019

KK1 KK2

1 Noise TCVN 7878-2:2010 dBA 69 68

2 Dust TCVN 5067 - 1995 µg/m3 93.0 88.0

3 SO2 TCVN 5971 - 1995 µg/m3 39.2 44.1

4 NO2 TCVN 6137 - 1996 µg/m3 40.4 23.4

5 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.

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:

They are processed through a fume hood system, which does not cause any environmental impact.

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.

Emissions from means of transport:

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.

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.

PARAMETERS AND MONITORING RESULTS OF AIR QUALITY

MITIGATION MEASURES FOR EMISSIONS, EFFLUENTS, AND WASTE

GRI

305



WASTEWATER

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.

Monitoring results of water quality after treatment at the wastewater treatment system

No. Parameter Unit Measurement methodQCVN

40:2011/BTNMT

Wastewater treatment system 1

Wastewater treatment system 2

1 pH TCVN 6492:2011 5.5 - 9 7.19 7.1

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 Phenolsmg/l

Internal method (EHC-TP1-039) 0.5 x 103 0.003

KPH (LOD=1)

µg/l TCVN 7874:2008

10 Cyanide mg/lISO 6703-1:1984 (TCVN 6181:1996)

0.1 0.035 0.046

11Ammonium(calculatedaccording to N)

mg/lSMEWW 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 1KPH

(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 2KPH

(LOD=0.3)KPH

(LOD=0.3)

16 Sunfua (S2-) mg/l EPA 376.2 0.5KPH

(LOD=0.19)0.8

17 ColiformVK/100

mlTCVN 6187-2-1996 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 0,1KPH

(MDL=0.001)KPH

(MDL=0.001)

20 Mercury (Hg) mg/l SMEWW 3112B:2012 0.01KPH

(MDL=0.0003)KPH

(MDL=0.0003)

21 Lead (Pb) mg/l SMEWW 3113B:2012 0.5KPH

(LOD=0.001)KPH

(LOD=0.001)

22 Cadmium (Cd) mg/l SMEWW 3113B:2012 0.1KPH

(LOD=0.001)KPH

(LOD=0.001)

HEADQUARTERS OF DHG PHARMA IN CANTHO

WASTEWATER TREATMENT SYSTEM FLOWCHART

Wastewater input Trash prevention bar Collection hole

Air tanks

P-01

P-02

Ozone

Sludge tank

AIR BLOWER

CHEMICAL

Pumping chemical

P-04

P-03

SLUDGECIRCULATION W

AST

EWAT

ER

Biofilter tank

Multistage Filters

Aeration tank

Clarifier tank

Disinfection tank

RECEIVING SOURCE

GRI

305



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.

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.

DHG PHARMACEUTICAL PLANT BRANCH IN HAU GIANG

Monitoring results of wastewater quality:

No. Parameter Unit Measurement method QCVN 40:2011/ BTNMT 2019

1 Temperature 0C SMEWW 2550B:2012 40 28.7

2 pH - TCVN 6492:2011 5.5 to 9 6.86

3 Color Pt - Co SMEWW 2120B:2012 150 KPH

4 TSS mg/l TCVN 6625:2000 110 6

5 BOD5 at 20oC 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 0.11KPH

(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 Cr3+ 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

Source 1:Wastewater Containing

B-Lactam

SCR

SLUDGE

SLUDGE RECIRCULATION

CLORIN

SCR

PUMPPUMP

PUMP

PUMP

Source 2:Non B-Lactam

Wastewater

Source 3:DHG PP1 wastewater

Collectionhole - T101A

Collectionhole - T101B

EXCESS SLUDGE

03

03

FeCl3

BLOWERS

SludgeDewatering

- M502

Sludgedrying bed

Oxidation System - SM201 Reactor - T501

Air tank - T103A

Intermediate clarifier - T401

Air tank - T902

Disinfection tank - T102

G.UAF - T301,T103B tanks

Filtration pillar - T801

G.ABox - T302

Deodorizing pillar - T802RECEIVING SOURCE

QCVN 40:2011 (B)

Tank

WASTEWATER TREATMENT SYSTEM FLOWCHART

GRI

305



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

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.

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.

NOISE AND VIBRATION

Mitigation measures

• 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.

Sources

Arise mainly from the operation of machinery in the production area and wastewater treatment system area.

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 wasteCode of hazardous

waste2019

(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

4Wipes contaminated with hazardousconstituents

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

GRI

305



REFERENCE

Environmental compliance

GRI 307

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.

Using environmentally friendly paper bags instead of plastic bags.

Regular implementation of environmental monitoring programs periodically.

Classifying domestic waste before treatment.

Planting trees around the premise for landscape and fresh air.

GRI

307



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.

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.

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.

#GoGreenDHG

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.

COMMITMENT TO ENVIRONMENTAL PROTECTION OF DHG PHARMA

ENVIRONMENTAL COMPLIANCE CAMPAIGN

GreenProviding 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.

The campaign was specified through the following activities: 4

GRI

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COOPERATION WITH SUPPLIERS TO PROTECT THE ENVIRONMENT

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.

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.

Contracts with suppliers Contents

Contract for collection, transportation, treatment of domestic waste

Collecting, transporting, and treating of generated domestic waste.

Other contracts (if any) such as Contract for building sanitation; Contract for operation and maintenance of wastewater treatment plant, etc.

Contract for collection, transportation, treatment of hazardous waste

Collecting, transporting, and treating of generated hazardous waste.

Contract for periodic environmental monitoring (effluents, emissions)

Collecting samples, analyzing periodical monitoring samples every 3 months for effluents, emissions, etc.

Making periodic environmental monitoring report.

Contract for measurement of working environment

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.

*** TAKE IMMEDIATE ACTIONS WHEN IT IS STILL POSSIBLE - STARTING FROM THE SMALLEST BUT MOST PRACTICAL TASKS ***

GRI

307



102.42 Identifying and selecting stakeholders

Stakeholder engagement 58 - 65102.43 Approach to stakeholder engagement

102.44 Key topics and concerns raised

102.45 Entities included in the consolidated financial statements

Overview of the sustainable development report 30 - 33

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 ECONOMIC

GRI

201 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 - 9394 - 99

201.3 Defined benefit plan obligations and other retirement plansSalary and benefit policy for employees Other benefit policies for employees Personnel recruitment

114115 - 117

128

201.4 Financial assistance received from government Contribution to the state’s budget 94

GRI

202 MARKET PRESENCE

202.1 Ratios of standard entry level wage by gender compared to local minimum wage Salary and benefit policy for employees 114

GRI

203 INDIRECT ECONOMIC IMPACTS

203.1 Infrastructure investments and services supportedIndirect economic impacts 99

203.2 Significant indirect economic impacts

GRI

204 PROCUREMENT PRACTICES

204.1 Proportion of spending on local suppliers Procurement practices 136

GRI

205 ANTI-CORRUPTION

205.1 Operations assessed for risks related to corruption

Anti-corruption 95 - 97205.2 Communication and training about anti-corruption policies and procedures

205.3 Confirmed incidents of corruption and actions taken

GRI

206 ANTI-COMPETITIVE BEHAVIOR

206.1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices Anti-competitive behavior 98

GRI 300 ENVIRONMENTALGRI

301 MATERIALS

301.1 Materials used by weight or volume

Procurement practices 136301.2 Recycled input materials used

301.3 Reclaimed products and their packaging materials

GRI

101 FOUNDATION Overview of the sustainable development report 30 - 33

GRI

102 GENERAL DISCLOSURES 2016

ORGANIZATIONAL PROFILE

102.1 Name of the organization

Overview of DHG Pharma Organizational chart 8-2768 - 69

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 Building sustainable relationships with partners and suppliers 136 - 137

102.10 Significant changes to the organization and its supply chain

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

102.13 Membership of associations Stakeholder engagement 58 - 65

STRATEGY

102.14 Statement from senior decision-maker Message of the sustainable development report 4 - 5

102.15 Key impacts, risks, and opportunities Risk management activities Direction for risk management (RM) in 2020 76 - 81


102.16 Values, principles, standards, and norms of behaviorEthics and integrity 44 - 51

102.17 Mechanisms for advice and concerns about ethics

GOVERNANCE

102.18 Governance structure Organizational chart 68 - 69

102.19 Delegating authorityGovernance structure for sustainable development Corporate governance towards sustainable development 70 - 75

102.20 Executive-level responsibility for economic, environmental, and social topics

102.21 Consulting stakeholders on economic, environmental, and social topics Stakeholder engagement 58 - 65

102.22 Composition of the highest governance body and its committees

Overview of the sustainable development report Sustainable development context Governance structure for sustainable development Corporate governance towards sustainable development

30 - 3334 - 4370 - 7172 - 75

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 Risk management activities Direction for risk management (RM) in 2020 76 - 81

102.31 Review of economic, environmental, and social topicsOverview of the sustainable development report Sustainable development context Governance structure for sustainable development Corporate governance towards sustainable development

30 - 3334 - 4370 - 7172 - 75

102.32 Highest governance body’s role in sustainability reporting

102.33 Communicating critical concerns

102.34 Nature and total number of critical concerns


102.40 List of stakeholder groups Stakeholder engagement 58 - 65

102.41 Collective bargaining agreements Diversity, equal opportunity, and non-discrimination 134 - 135

GRI INFORMATION DISCLOSE CONTENTS OF THE REPORT PAGE GRI INFORMATION DISCLOSE CONTENTS OF THE REPORT PAGE

REFERENCE TABLE ACCORDING TO GRI STANDARDS

169168 DHG Pharma - Sustainable development report 2019 GRI Standard

GRI

302 ENERGY

302.1 Energy consumption within the organization

Energy 146 - 148

302.2 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 servicesGRI

303 WATER

303.1 Water withdrawal by source

Water 149 - 151303.2 Water sources significantly affected by withdrawal of water

303.3 Water recycled and reusedGRI

305 EMISSIONS

305.1 Direct (Scope 1) GHG emissions

Emissions, effluents and waste 152 - 161

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

306 EFFLUENTS AND WASTE

306.1 Water discharge by quality and destination

Emissions, effluents and waste 152 - 161

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 runoffGRI

307 ENVIRONMENTAL COMPLIANCE

307.1 Non-compliance with environmental laws and regulations Environmental compliance 162 - 163

GRI 400 SOCIALGRI

401 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

114115 - 117

128

401.3 Parental leave Statistics on personnel 111 - 113GRI

403 OCCUPATIONAL HEALTH AND SAFETY

403.1 Workers representation in formal joint management–worker health and safety committees

Collective bargaining and no use of child labor, forced or compulsory labor 134 - 135

403.2 Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities

Ensuring a safety working environment 120 - 127403.3 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

GRI

404 TRAINING AND EDUCATION

404.1 Average hours of training per year per employee

Education and training 129 - 131404.2 Programs for upgrading employee skills and transition assistance programs

404.3 Percentage of employees receiving regular performance and career development reviews

GRI

405 DIVERSITY AND EQUAL OPPORTUNITY

405.1 Diversity of governance bodies and employeesDiversity, equal opportunity, and non-discrimination 132 - 133

405.2 Ratio of basic salary and remuneration of women to menGRI

406 NON-DISCRIMINATION

406.1 Incidents of discrimination and corrective actions taken Diversity, equal opportunity, and non-discrimination 132 - 133GRI

407 FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING

407.1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk


GRI

408 CHILD LABOR

408.1 Operations and suppliers at significant risk for incidents of child labor Collective bargaining and no use of child labor, forced or compulsory labor 134 - 135

GRI

409 FORCED OR COMPULSORY LABOR

409.1 Operations and suppliers at significant risk for incidents of forced or compulsory labor


GRI

413 LOCAL COMMUNITIES

413.1 Operations with local community engagement, impact assessments, and development programs

Spreading community responsibility 138 - 143

413.2 Operations with significant actual and potential negative impacts on local communities

GRI

416 CUSTOMER HEALTH AND SAFETY

416.1 Assessment of the health and safety impacts of product and service categories Fulfilling customers' needs 100 - 109

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. 108

GRI

417 MARKETING AND LABELING

417.1 Requirements for product and service information and labeling Fulfilling customers' needs 100 - 109

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

GRI

418 CUSTOMER PRIVACY

418.1 Substantiated complaints concerning breaches of customer privacy and losses of customer data

The total number of grounded complaints related to violations of customer privacy; The total number of leaks, steal or loss of customer data.

108

GRI

419 SOCIOECONOMIC COMPLIANCE

419.1 Non-compliance with laws and regulations in the social and economic areaValue of fines and non-monetary sanctions for non-compliance with laws and regulations in the social and economic area.

108

GRI INFORMATION DISCLOSE CONTENTS OF THE REPORT PAGE GRI INFORMATION DISCLOSE CONTENTS OF THE REPORT PAGE

REFERENCE TABLE ACCORDING TO GRI STANDARDS

171170 DHG Pharma - Sustainable development report 2019 GRI Standard

DHG PHARMA - 2019 SUSTAINABLE DEVELOPM

ENT REPORT - TICKER SYMBOL: DHG

2019SUSTAINABLE DEVELOPMENT REPORT

Creating motivation forSustainable development

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DHG Pharma - 2019 SUSTAINABLE DEVELOPMENT REPORT

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Transcript of DHG Pharma - 2019 SUSTAINABLE DEVELOPMENT REPORT