BUILDING TRUST
THE KEY TO SUCCESS
Governance
toward sustainabilityg
PVCFC pursues
more sustainable and prosperous development according to ESG orientations
As an inevitable need of the sustainable development trend for all companies, PVCFC is increasingly paying more special attention to management practices based on 3 factors: Environment, Society and Governance (ESG). The Company is aware that ESG practices bring more opportunities from financial benefits such as expansion of opportunities to attract investment capital or improvement of long-term economic values such as maintaining sustainable business operations, maintaining positive corporate reputation and enhancing corporate brand. On the basis of the risk management system that was built early on, PVCFC always reviews and re-evaluates material risks annually.
Given great benefits brought by ESG, PVCFC always willing to perfect and further enhance corporate governance in general and risk management in particular, as a desire to become one of the pioneers in implementing ESG practices of the Group in particular and in Vietnam in general, increasingly enhancing its position in the region toward more sustainable and prosperous development. The Company is committed to practicing corporate governance according to good governance practices in Vietnam and in the region. Apart from implementing corporate governance content announced in other parts of the report, PVCFC also focuses on the following contents.
BUSINESS ETHICS AND INTEGRITY
The Code of Conduct was issued by the Company in August 2022 according to Decision No. 2048/QD-PVCFC dated August 22, 2022 and published in Vietnamese and English language on the Company's website. The Code provides specific guidance on how to behave as an employee (including members of BOD and Executive Board) of PVCFC when interacting with any related entities. The implementation of the Code of Conduct in daily operations play a very important role in shaping the business ethics that PVCFC strives for, directly impacting PVCFC's business goals. This Code of Conduct also helps PVCFC move towards higher management standards, promoting employee orientation to pursues appropriate and professional behavior at workplace, shaping sustainable competitive advantage of PVCFC.
The regulation of Whistleblowing were issued according to Decision No. 204/QD-BOD dated October 02, 2023 and published in Vietnamese and English language on the Company's website. This regulation stipulates the basic principles of PVCFC's whistleblowing policy to quickly detect and adjust behaviors of violations, promoting and enhancing sense of self-reliance and proactiveness of employees, urging them to be confident in sending their feedback to management and leadership levels, enhancing management and executive efficiency, improving production and business performance, protecting and improving brand prestige and reputation of PVCFC.
The regulations also clearly stipulate general principles related to establishment and management of the whistleblowing policy; channels for receiving whistleblowing reports, including signs of corruption; guidance and principles for handling, evaluating, investigating, concluding and disclosing information of wrongdoings and acts of violation; responsibilities and obligations of management levels in implementing, communicating and training on the whistleblowing policy at PVCFC. Then, PVCFC has established the Whistleblowing Council according to Decision No. 2766/QD-PVCFC dated October 27, 2023. PVCFC has established a specialized contact information channel managed by the Legal and Compliance Division for parties in interest to voice concerns and/or complaints about potential violations that can affect their interests. The results, after being preliminarily processed, are sent to the Whistleblowing Council for a final decision. BOD is required to ensure the independence of this Council.
The whistleblower policy guarantees confidentiality of anonymous reporting, providing principles and measures to protect whistleblowers who reveal information about deemed illegal, immoral activities from retaliation. In the fiscal year 2023, PVCFC recorded no case or ongoing investigations related to corruption and bribery or tax fraud or evasion.
PVCFC issued the Code of Business Conduct clearly stipulated in Article 17. Anti-corruption and bribery: "PVFCFC's success is based on the product and service quality, not based on illegal actions or unethical conduct. PVCFC does not tolerate acts of corruption or bribery.” The whistleblowing policy is one of the useful and effective channels for the Company to receive initial reports/warnings about corruption.
CORPORATE GOVERNANCE
As a leading fertilizer trading and production company, PVCFC always focuses on promoting corporate governance, especially risk control and management systems according to good corporate practices. PVCFC’s internal risk management and control system has been built in early stages and continuously standardized according to good corporate practices based on ISO, COSO IC framework, COSO ERM, etc.
CORPORATE GOVERNANCE AT PVCFC
The three lines of defense
The Company applies a "The three lines of defense” model to support BOD and Executive Board to not only control risks but create higher values by identifying factors that can affect the implementation of the Company's mission, vision, and strategic goals and provide solutions on minimizing potential risks, taking advantage of opportunities. BOD has issued a model of internal control system according to the value chain (Figure 1) and risk management system from Company-level to unit-level. PVCFC has classified risks into four main groups: strategic risks, operational risks, compliance risks and financial risks. The Company has issued Risk Appetite Statement and Risk Acceptance Criterion, building risk metrics to classify and identify material risks on the Risk Heat Map (Figure 2). Regarding information technology risks, the Company has identified and put in in the list of Company-level risks that need to be controlled as well as developed a separate criterion in the Company's risk measurement related to information technology.
Chú thích:
- - Group 1: Main activities (product)
- - Group 2: Main activities (service)
- - Group 3: Supporting activities
Figure 2: PVCFC’s corporate risk heat map
BOD independent members
With 2/7 BOD members being Independent Directors, PVCFC always complies with the regulations on the number of BOD independent members. Chairman of the Audit and Risk Management Committee and the Human Capital and Compensation Committee are Independent Directors, ensuring objectivity and transparency in dealing with conflicts of interest.
Managing conflicts of interests
The Company's BOD has issued regulations on management of conflicts of interest and transactions with related persons according to Decision No. 2988/QD-PVCFC dated December 6, 2022. The regulations clearly stipulate principles and instructions related to identification, prevention and mechanisms for receiving, processing information, and reporting conflicts of interest that may arise at PVCFC. These regulations also stipulate instructions on improving management and supervision efficiency, increasing transparency in transactions with related persons at PVCFC; clearly specifying approval authority of the General Meeting of Shareholders and BOD; order, approval procedures, cases of invalid contracts and transactions related to contracts and transactions between PVCFC and related persons. The policy on approving transactions with related persons specified in this regulation is published in Vietnamese and English language on the Company's website. The policy clearly states that members of BOD or any person/organization with related interests are not allowed to vote at the meeting through related party transactions in which that member is involved. Specifically, at Point c, Article 9 "Members of BOD with related interests to the parties in contracts and transactions shall not have the right to vote”. In addition, any party with a conflict of interest must declare it. These regulations also specify requirements for transactions in compliance with market principles. PVCFC develops a contact information channel for stakeholders to voice concerns and/or complaints about possible violations of their interests. The Company has not recorded any incident of non-compliance with regulations of the law, rules and regulations related to significant or material related party transactions since the beginning of fiscal year 2023 till now.
Facing multiple difficulties and challenges due to complicated changes of fertilizer market, based on the strength of solidarity, high determination of all employees and under the wise direction of the Leadership Board, PVCFC have completed and exceeded the planned tasks and targets, closing 2023 with many impressive achievements.
13,172
VND billion
Achieving 98%of the plan
1,255
VND billion
Achieving 122.2% of the plan
1,110
VND billion
Achieving 121.4% of the plan
In line with efforts in carrying out production and business activities effectively, PVCFC always prioritizes ensuring the benefits of all stakeholders and constantly striving to bring more and more sustainable and prosperous values for stakeholders. In 2023, PVCFC recorded economic value allocations as follows:
Total payment to State budget:
426.81 billion VND, up 63% compared to 2022
Dividend pay
The company has paid dividends in 2022 at a rate of 30% (equivalent to 3,000 VND/share).
