1. General
(1) The Company's Profile
Yangtze River Pharmaceutical Group Co., Ltd., located in Gaogang District, Taizhou of Jiangsu Province, is the parent company of Yangtze River Pharmaceutical Group. Founded in 1971 and through over 41 years of perseverance, the group has become a national giant pharmaceutical company combining research, industry and trade and integrating cooperation of industry, university and institute. At over two million square meters with total assets hitting 11 billion, the Company has over 9000 employees, with 20 subsidiaries in Taizhou, Beijing, Shanghai, Nanjing, Guangzhou, Chengdu, etc. The Company produces both traditional Chinese medicine and Western medicine, covering 10 fields, 20 dosage forms and 200 products; its sales network can reach all provinces, municipalities and autonomous regions in China.
In 2012, Yangtze River Pharmaceutical Group won eight consecutive First Prizes for National Pharmaceutical Industry QC Team Results, National Excellent Enterprise for Excellent Performance, No.1 in Chemical Pharmaceutical Industry Comprehensive Top 100 Strength, Enterprise Technological Innovation Prize for Enterprises in Jiangsu, and also Advanced Community-Level Party Organization in Jiangsu, Taizhou Mayor's Prize among dozens of awards; Yangtze River Pharmaceutical Group also entered Top 3 in Top 100 Pharmaceutical Enterprises in China, Fortune China 500 and Top 100 Taxpayers in Jiangsu, with its position further going up in the industry.
(2) Corporate Social Responsibility Management
Corporate Social Responsibility means a company bears the responsibility to other stakeholders in connection to the interest of the Company in addition to creating profit and being responsible to its shareholders, maintaining the balance between corporate growth and socio-economic sustainability. These stakeholders include clients of the Company, partners, employees, society and the environment. The Company shall observe business ethics, protect employee's rights, use resources efficiently and take an active part in social development.
As the leading company in China's pharmaceutical industry, Yangtze River Pharmaceutical Group is adhering to the scientific outlook on development, seeing the establishment of an energy-efficient and environment-friendly modern enterprise as its target, pursuing a balance between the Company and human beings, the Company and nature and the Company and the society, living up to its responsibility for China, the society, its shareholders, staff, consumers, suppliers, communities and other stakeholders, and using its growth to pay back its employees, customers and the society.
(3) Positioning of the Company's Responsibilities on Its Stakeholders
Shareholders: maximize the value for its shareholders and benefit the shareholders with sustainable development
Customers: provide service of good quality and seek growth along with customers.
Partners: build creditworthy transaction platforms for its business partners and seek win-win results.
Employees: create favorable conditions for employee's growth and all-round development.
Local Development: be responsible for building and maintaining an ordered and harmonious community.
Environmental Protection: be responsible for contributing to an environment-friendly society
2. Achievement on Fulfilling Corporate Social Responsibility
(1) Protecting shareholder's legal rights to promote sound development of the Company
Yangtze River Pharmaceutical Group has always been valuing establishing and improving the management structure of the Company, and has been optimizing its relationship with its stakeholders. The Company is realizing its responsibility to its shareholder's with good performance.
Yangtze River Pharmaceutical Group holds board of director's meeting every year, where all the big decisions have to be submitted to the board and be effective only after the review and approval. We protect shareholder's interest in accordance with the principle of "all shareholders are equal" as stipulated in the Company Law. The board of shareholders performs its duties according to the Company Law and Articles of Association of the Board of Directors. Yangtze River Pharmaceutical Group was founded in March 2001, and its reform of ownership was approved under the guidance of Taizhou government, through the audit and evaluation report by the audit office designated by Taizhou Bureau of Finance and legal documents by law firms. According to the approved ownership and structural reform documents, the industrial and commercial operation license was issued in Taizhou Bureau of Industry and Commerce with the legal procedures by the industrial and commercial administration and following the requirement of the Company Law. The shareholders of the Company are made of five members, among which all the shareholding employees form board of employee shareholders and become a shareholder in the name of trade union. The board of directors consists of seven persons, the board of supervisor consists of three persons, and the current two boards are both in their third term.
According to the requirements of the Company Law, the Company has formulated its Articles of Association, and filed in the industrial and commercial administration. In 2006, the new Company Law came into force, and the Company made new adjustment and interpretation to the Articles of Association. According to the requirements of drug laws and regulations, pharmaceutical companies shall timely go through relevant formalities to the industrial and commercial administration at the time when the drug production license is changed in the provincial food and drug administration.
The Company's Articles of Association stipulates provisions on the scope of business, registered capital, capital of its shareholders, shareholder's rights and obligations, rights and obligations of  the board of shareholders, rights and obligations of the board of directors and general manager, rights and obligations of supervisor's board, finance, accounting, auditing, labor management, renumeration, benefit, social insurance, etc.
According to the Company Law and the Articles of Association, the Company's shareholders have the right to benefit from the assets income, take part in major decisions and choose their managers. The board of shareholders is the highest authority of a company: it decides the operation principles and investment plans, review the Company's annual budget plans, settlement plans, profit distribution and loss make-up plans, decides the augementation or reduction of the registered capital of the Company, decides the merger and split, change of company form, dissolution and settlement and modify the Articles of Association.
(2) Protecting the employee's rights and promoting harmonious corporate development
The Company is always caring about its employees' growth, sticking to principles of human-oriented and efficiency, prioritizing the human resource development and optimization of facilities for the Company and pressing forward the strategy of enhancing the Company through human resources.
a) The Company observes the Labor Law, the Labor Contract Law and other laws, improves working mechanism and schedule, signs labor contract with all employees, provides social insurances and public housing fund, pays renumeration monthly, strengthens awareness on labor protection and safety, provides safe and healthy environment for both living and work and safeguards employees' interest. The Company reported zero labor dispute case in 2009.
b) The Company builds a sound human resource management system, including recruitment, personnel training, renumeration management, performance assessment, etc., and provides safeguard to the recruitment, training, incentives and check and balance. The Company follows the principle of combining cultivating personnel by the Company and recruiting from outside the company, applies the steps to the selection, use, training and maintenance, cultivates the personnel in key areas, introduces personnel in market expansion and advanced management, steps up building a virtuous competition mechanism of personnel, a just appointment and incentives mechanism, improves the efficiency on using human resources and safeguards the best allocation of different personnel in the Company.
In 2012, the Company enhanced training on its staff through joint education with Nanjing University of Traditional Chinese Medicine and China Pharmaceutical University, where 109 principals and managers attend the on-job enhancement lessons. The Company held various training courses so that its staff can better understand the Company’s culture, be familiar with the business procedures and information management system, conducted training on back-up cadres to cultivate skilled teams and key managers that were familiar with marketing, management innovation, sales innovation in an effort to meet the growing business of the Company. Yangtze River Pharmaceutical Group is devoted to generating teams that are loyal to itself and gives every employee opportunity to grow up with the Company.
c) To improve its employee's quality and business skills, cultivate good working ethics and ethos, the Company has improved its training and management mechanism: at the beginning of each year, the Company formulates systematic annual training plans; in the selection of training courses, the Company values an all-directional, multi-layer and inter-disciplinary principle, taking the Company's growth and employee's needs as the orientation, and applies different types of training on employees of different levels; inside the Company, the Company establishes its trainer's teams to provide multi-layer and multi-facet training opportunities.
d) The Company gives full play to its trade union and worker's congress, listens to opinions from all parties on issues concerning employee's vital interest. The Company treats every employee in a sincere and equitable way, and cares its employee's life, work and health. The Company's community-level Party organizations and trade unions host colorful art and sports events. In 2012, the Company held the 9th Opera Competition, the 13th Chorus Competition, the 17th Military Formation, the 2nd Art Festival, etc., which enriches the life of its employees and enhances their spirit. The Company holds summary meeting at every middle of the year and end of the year, reviews work of the past period, plans annual missions and progress and reward the excellent performance. The Company holds employee's interdepartmental banquet at the end of each year to gather and share joy.
(3) Protecting suppliers, customers and consumers' interest and rights and promoting the coordinated development of the Company
The Company advocates a development of common growth with its partners, sees its customers as partners, and builds a cooperation that features mutual respect and credit and brings win-win results. The Company respects and safeguards the legal rights of its partners, executes the pricing policies specified by the state, follows the contract and never delays or refuses payment to its suppliers. The Company values its strategic partnership with its core suppliers, uses procurement contract and quality agreement to define both parties' responsibilities and rights, and effectively safeguards both parties' rights. The Company gives suppliers support through technical approaches and capacity building, thus ensuring the simultaneous development of its suppliers and itself. Its employees can also strictly observe the regulations and can handle the cooperation in a just, clean and equal way.
In the 2012 procurement management, the Company stressed the smooth flow of information among the supply chains, and conducted work on the ethic codes, service awareness, procurement values, system coordination, construction of information platform, etc., changed the previous mode of cooperation with suppliers based on buy-sell relationship and built a mutually beneficial and coordinated procurement model featuring strategic cooperation.
The Company follows open, just and fair principles for competition, maintains good competition and cooperation relationship with peers, and opposes business bribery and unfair competition; the Company is against selling fake products and is working with law enforcement departments to strike fake or shoddy products in order to be responsible for users; the Company sticks to the principles of honesty and credit, advocates creditworthy values, nurtures creditworthy brands and takes the lead in the development of creditworthy system in the pharmaceutical industry.
(4) Performing public responsibility and promoting sustainable corporate development
The Company seeks a balanced development of corporate growth and environment. While gaining reasonable profit and economic return, the Company proactively introduces advanced equipment and pharmaceutical technologies. Through recognizing risks of hazard to the society that may occur during the operation and observing laws and regulations, the Company takes effective measures to live up to legal standards and thus protects social and public interest.
a) Protecting the environment and guarantee sustainable development
The Company is implementing the Environmental Protection Law, Atmospheric Prevention Pollution Law, Safety Production Law, Fire Protection Law and other laws, setting up double environmental protection targets on pollution-reduction and discharge treatment and designing and building ISO14001:2004 environment management system and BS OHSAS18001:2007 occupational safety management system using PDCA cycle and applying the principles of regulating environment management, meeting legal requirements, controlling emission and discharge and applying continued reduction of energy consumption. The Company attains the environmental protection targets through identification of hazards to safety and environment, risk evaluation, enforcing environmental elements and evaluation control programs, environmental operation control programs, environmental monitoring and controlling programs, identification of source of risk and risk evaluation control procedures, management plan for occupational hazard, operational control programs and monitoring and measuring control programs.
The leadership of the Company deeply concerns about the issue of environmental protection, strictly meets international environmental standards and requirements and increases investment to build a beautiful and green ecological industrial park. The Company has set up a leadership working team for environmental protection and conducting evaluation of law and regulation meeting standards every year. The Company has invested over 100 million yuan to introduce environmental protection equipment and technology, clean production evaluation system and ISO14001 environmental management system, to control environment from the source and apply prevention approaches throughout the whole procedure. Due to the marked achievement in environmental protection, the Company has won several titles of Advanced Company for Environmental Protection and has passed the check and acceptance of Jiangsu Environment Friendly Enterprise.
Waste water treatment: waste water generated during the production is discharged after passing the treatment station and can fully meet the Pollutant Standards for Mixed Preparation Pharmaceutical Industrial Waste Water.
Waste solid treatment: hazardous waste is treated by professional companies; recyclable solid waste is recycled by competent companies; household garbage is treated by Urban Management Council of Gaogang District.
Waste gas treatment: the Company entrusts Taizhou Environmental Protection Bureau to monitor the waste gas discharge and to ensure they meet standards.
b) Promoting energy efficiency and reducing consumption
The Company has established energy-conservation leadership team, built an energy-efficiency management network, applied assessment plan for energy efficiency and promoted new technologies, equipment and craftsmanship on energy conservation. The Company completes the statistics and management on water, electricity, gas, oil, equipment, tools and other consumable items, improves management and reduces production cost. The Company conducts labor competition, skills competition with energy conservation and cost reduction as the themes and conducts mobilized QC activities to save tens of million yuan every year. The re-used water program in energy conservation technical reform helps realize the 100% reuse of waste water from production.
c) Increasing safety awareness and focusing on safe production
In safety production the Company has implemented daily management in accordance with national laws and regulations on the issue, formed on-site management system for safe production, executed safety as priority and implementing prevention as the principles, and enforced target control on prevention of and measures on safety-related accidents. The senior officers of the Company have signed accountability agreement on safety management targets. The safety operation regulations have been applied to special posts to ensure the safe running of production, and all operators must not be on-duty without carrying licenses. There are professional firefighting personnel and equipment, all of which have passed check and acceptance by fire department. All the firefighting personnel have passed training by the superior division hand have a good command of operational skills. To strengthen management on hazardous chemicals, the Company has formulated Regulation on Hazardous Chemicals, Regulation on Highly Toxic Chemicals Not for Production and other regulations, which are executed by different departments, and all the toxic wastes were subject to treatment by competent companies.
d) Guaranteeing product safety and consumer's health
The Company continues to invest in research and innovation, executes the latest GMP, enforces procedure management from the beginning and conduct production activities according to laws; the Company introduces internationally advanced production and testing equipment to safeguard quality and, as a result, the application rate for import equipment in the Company reaches 90%, with management standards generally reaching international standards. The Company strengthens vocational training and education on employees to build a capable and skillful team; the Company enhances quality awareness on all of its employees, conducts quality month twice a year, checks quality risks and boost the continuous improvement in quality management system. At present the Company has over 20 products that have reached pharmacopeia standards in US and EU, with its quality management taking the lead in China.
e) Maintain public health and prevent occupational hazard
The Company strictly executes the national and local laws and regulations on occupational health, implements Occupational Diseases Prevention Law, builds occupational health management regulation system and entrusts the municipal diseases preventions center to regularly monitor the factors leading to occupational hazards. The Company orders new employees to participate in pre-duty check on health, and refrains from the use of employee whose health condition is in conflict with occupational health standards; the Company also reminds of the employees on stressing occupational safety. The Company clearly warns information of occupational hazards in the labor contract and requires the employees to pay attention to preventive measure in work. The Company holds health check every year on its employees engaged in hazardous jobs, and transfers positions of those who are in conflict with occupational health standards. To effectively reduce occupational hazards on employees, the Company gives employees labor protection kits, and all of the products are well-known brands; the Company ensures that all dust-proof and toxic-proof masks are produced by 3M company.
(5) Paying the society back and living up to its social responsibility
The Company is an ardent force for the cause of public interest, encouraging all staff to do their best to benefit the society in return. Over the past years, it has taken the lead in helping people's liberation army, disaster relief, education aid, poverty reduction and supporting national medical technological progress. The Company makes targeted public-interest plans, distinguishes key areas and key programs and conducts charitable activities regularly throughout a year. The Company sets up a special charity organization, which is responsible for arranging charitable activities. Since 2001, the Company has been sponsoring the China Medical Science and Technology Award, which produces nearly a thousand medical research results, becoming the most authoritative award in China's medical industry, Since 1995, the Company has been holding nation-scale army support event and has donated over 50 million yuan. After the major earthquake in Wenchuan on May 12, 2008, the Company was among the first to give the stricken area 23 million yuan worth of cash and medicine. The Party, politics and trade union leaders of the Company visit labor models and needy employees every Spring Festival and mobilize Party members and cadres to bring warmth to the neighboring communities. Since 2006, the Company has given aid to over 2000 household in extreme poverty, and the Party members of the Company have donated over 1 million yuan. Through all forms of public interest activities, the Company has strengthened its employees' awareness on social responsibility and dedication. Xu Jingren, Chairman of Yangtze River Pharmaceutical Group, has won titles such as Advanced Individual in Disaster Relief, Good Leader in Caring National Defense.
The Company stresses the realization of social values and has been taking the maintenance of corporate-government and corporate-society relationship as priority. It has been working with governmental departments and regulatory agencies in supervision and monitoring, maintaining smooth communication and fulfilling missions for the government's visit and inspection to the Company. The Company is always operating by law, paying tax by law and can always be ready for the inspection and supervision from tax bureaus. Since 2009, the Company has paid over five billions yuan in tax, having become a big tax payer in Taizhou and Jiangsu. It has been proactively creating opportunities, creating 1420 jobs, and was therefore awarded National Advanced Private Company for Employment and Labor Guarantee.
3. Deficiencies and Improvement Measures
In 2012, the Company has been actively engaged in fulfilling social responsibilities. Though we have made certain achievement in environmental protection, causes of public interest, protection on employees, protection on shareholder's rights, etc. in return for our efforts, we are soberly aware that we still lag behind standards of our competitors in China and abroad. Our gaps are shown principally between the Company's growth and shareholders and employees' expectation, between the weakness in internal control and risk management and between the internal monitoring and system of environmental protection and energy management.
In response to the gap between target and corporate social responsibility achievement, the Company will keep learning from other competitors' practice and improving the social responsibility regulatory system in the coming year. The Company will press forward the corporate management reform, improve the quality of production and operation, improve the scientific corporate management, deepen efficiency-oriented and lean management, optimize the product structure, improve energy efficiency and emission reduction; the company will, by giving full play to its technological and market advantages, improve operational and profit capacity fulfill corporate social responsibility and attain the goal of sustainable development.
4. Envision
Looking into the future, Yangtze River Pharmaceutical Group will continue to combine social responsibility with the Company's development strategies, combine social responsibility practice with the Company's production and operation, combine social responsibility planning with the Company's development goals, implement scientific outlook on development, strengthen communication and cooperation with stakeholders and apply social responsibility to actual management and operation. We will continue to carry forward the Yangtze River Pharmaceutical Group's spirit of perseverance, solidarity and relentless pursuit of perfection, step up the transformational upgrade of the Company, safeguard shareholders and employees' legal rights, seek the maximization of social, economic and environmental interests, strive to realize the 12th Five-Year Plan and work hard to become the world-class pharmaceutical company.