Jia Hsin GRI Report

8/11/2019 Jia Hsin GRI Report

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Jia Hsin Co., Ltd.

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October 2012


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Table of contentPreface 5

President and General Manager Statement Sustainability in Every Step 6

Footwear Impacts, Risks and Opportunities 7-8

About company and its report 9

Vision and mission 10

About us 11

Business _ Operation 12

Governance 13-15

Transparency and commitment 16

Awards 17

Stakeholders 19

Prioritize stakeholders 20

Case : Puma expectation 21

Stakeholders concerns 22

Business Performance 23

Management Approach 24

Business results 25

Market presence 26

Labor performance : Empower employees 27

Our workforce: Respect, Share and Care 28

Employment aspect 29

Management approach 30


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Total Workforce 31-32

Overview 33

New Employees _ Turnover rate _ Planning for the future 34-35

Occupational Health and Safety 36


Procedure of accident investigation 38-39

Injury, Occupational Diseases, Lost Days and Absenteeism 39-41

Training and Education 42

Management Approach 43

Risks control and training programs 44

Diversity and Equal Opportunity 45

Ratio of Salary of Women to Men 46

Environment Performance 47

Environment Highlight 48

Energy aspect 49


Direct and Indirect Energy consumption 51-52

Water aspect 53


Water withdrawal 55

Emission, Effluents and Waste 56

4R Policy 57

Direct and Indirect Green House Gas Emissions 58

Significant Air Emissions 59-61

Water discharge 62


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Waste and waste disposal 63-64

Initiatives to mitigate impact : What we are changing 65

Social Performance 66

Social performance - Society 66

Monetary Fines and Non-Monetary Sanctions 67

Social performance Human Rights 68

Code of conduct in our business 69

Code of Conduct in procurement and outsourcing 70

Customers Health and Safety 71

Customers Safety through Products Safety

Self Declaration

GRI Performance Indicators

GRI Content Index

72

73

74-76

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Preface

Sandal is around our lifeSandal is a faithful companion with human

from primitive age to modern times.

Sandal is believed to be the first crafted foot

covering stuff. It was the basic footwear of

ancient civilizations such as Egypt, Greece

and Rome. In the 20th century, the sandal

was reintroduced in North America and

Europe for fashion footwear(*). To the

present days, sandal is kept abreast with

marvelously engineered shoes in worlds

notable fashion shows and in daily wear.

Vietnam Footwear existed for long, however

it was developed to be the Industry from

Vietnams Doi Moiperiod, the Vietnam

opening and reformation period. After 20

years, Vietnam becomes the second largest

footwear exporter in the world.

Coming and building up our sandal business

in Vietnam during the Vietnams Doi Moi, we

contribute to the development of Vietnam

Footwear Industry in general and sandal

production in particular. Having more than

20 years doing business in Vietnam and

witnessing the vigorous change of the

country, we thoroughly aware our

responsibility in contributing to the

socioeconomic development and

sustainability of the country. We

acknowledge the expectation of customers,

community, employees and others

stakeholders about our compliance in

business code of ethics and sustainable

development. We keep working diligently and

tireless to meet this expectation.

(*) Source : Footwearhistory.com


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Sustainability in Every StepAs sandal companion with human step, we

care of sustainability in every step of ourbusiness operation. Sustainability is

integrated into our business strategy. Being

long-term, stable and responsible business

becomes guidance for Jia Hsin operation.

I am pleased with the effort from myself and

my employees in implementing our

sustainability commitments and achieving

certain positive results though year 2011 is

the ever toughest year in our business life.

Indeed, we faced many challenges

throughout the year 2011. External

challenges such as order volume reduction

due to global economic downtime and

European economic fluctuation, price storms

in Vietnam due to inflation problem, strike

waves causing instability in labor force plus

many other problems have impacted to our

business. Internal challenges, such as building

up a new workshop, setting up overalloperation and lean production lines for new

workshops; establishing and implementing

ISO-14001 and OHSAS 18001 Management

Systems; restructuring our organization; and

handling strike from workers have caused a

most difficult year.

We did not give up challenges but faced and

overcame them. We did not get rid of

sustainability commitments in hard time but

implementing them and using them as amotivation.

Achieving customer SAFE Award, Most

Dedicating Social & Environment Affair Team

Award, certified ISO14001 and OHSAS18001

management system, and other sustainabilityawards proves that sustainability is in every

step of our business life.

I keep considering sustainability an

important part of our operation and a cyclical

journey of whole Jia Hsin team. With strong

commitment on leading, supporting, and

together with my team, I team will make our

stakeholders expectations happen.

Wedid not get rid ofsustainability commitments in

hard time but implementing them

and using them as a motivation

CHRIS LEE

GENERAL MANAGER


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7

Footwear:

Impacts, Risks and OpportunitiesToday, the Asian countries take an impressive proportion in footwear manufacturing. While

serving the world with wonderful products, footwear manufacturing creates considerable

impacts to the world. Is there any opportunity for being responsible?

Impacts

Footwear manufacturing

consumes a large amount of

materials and energy then

releases wastes andemission that originally

bring impacts to

sustainability and people

working in manufacturing

environment. There may be

certain non-compliances to

relevant regulations and

standards, too

Jia Hsin acknowledges on

effects of its production to

stakeholders and

sustainability as a whole.

Key impacts from Jia Hsin

business and productions

can be derived from

following activities:

Resources consumption

Waste release and air

emission

Unsatisfied working

conditions for employees

and surrounding

environment for

community

Possible non-compliances

to local legislation and

international standards.

Negative economic

performance.

To identify impacts, we do

the periodical Health and

Safety Risk Assessment,

Significant Environmental

Impact Assessment, andInternal Audits.

During the assessments, we

do scoring to give priority

with significant impacts and

set up relevant corrective

action plans.

We implement Management

Systems to ensure that the

impacts are identified,reviewed and removed

periodically.

We acknowledge

manufacturing impacts

to sustainability and we

create opportunities tomitigate adverse

impacts as much as

possible

-------------------------

Ai Nguyen

Operation Manager


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Risks

While controlling our impacts

to sustainability, we stay

aware on the reverse impacts

from it. Our SWOT analysis

indicates different risks, and

significant challenges and risks

from sustainability trends are

identifies as following:

Need large investment to

comply with the legal

requirements and

international standards.

Need to gain commitment

from investment company

for financial support

Climate change impacts to

sales markets and

operation location, causing

effects to our business

performance

Employees awareness,collaboration and

capability in implementing

sustainability programs.

Opportunities

Not only coming with impacts,

challenges and risks,

sustainability trends bring

great and potentialopportunities. We find out

their hidden benefits,

including:

Being more competitive in

our supply chains because

preference is offered to a

supplier who can

contribute to the overall

performance of the supplychains.

Stable and strong

workforce, thanks to the

compliance in health and

safety, leading to qualified

products, high

productivity and stable

operation.

Support from governmentbodies

Increase company

prestige and image.

Contribute to worlds

action in bringing a better

life of our next generation.

We understand nature of risks

and importance of capturingthe opportunities. We

implement necessary

programs to prevent or

mitigate risks. We seek

commitment from mother

company for investment on

sustainability programs to

contribute into world effort in

reducing impacts from climate

change. We provide trainingto employees and community

to improve their awareness

and collaboration. Most

important, we ensure our

sustainable compliance for

competitiveness and growth.

We focus in building up

management systems for eachaspect. The management

systems allow us to Defines

problems, Plan the corrective

actions, Check the

implementation and Improve

for better.

As for the methodology, we

conduct prevention and

reduce of impacts. Treatment

before releasing is applied forthe remained impacts.

Mr. Joel Warton, Puma SR Head Of

Production and Branch Operations

Far East

Mr. Chris Lee, our General Manager


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About company and its reportIt is a pleasure that we issue our second Global

Reporting Initiative (GRI) Sustainability Report,

Year 2011, reflecting our commitment in

Business Transparency, Social Responsibility

and Sustainable Development.

Our first GRI Sustainability Report was

compiled under GRI coaching and completed by

June 2011.

The compilation of this report is also a chance

to review our activities and seek opportunities

to improve our performance . In this spirit, we

keep producing GRI Sustainability Report

annually.

This report is compiled in align with GRI

Reporting Framework, under new GRI

Guidelines version G3.1 and with reference to

GRI Technical Protocol plus GRI Indicator

Protocol. For GHG indicator, we refer to2011

Guidelines to Defra / DECC's GHG Conversion

Factors for Company Reporting.We upgrade our

report to Level B. Currently, the company does

not apply external assurance on the report,except the financial data which is audited by

Vietland, an independent auditing company.

The compilation team also thoroughly referred

to GRI Report Boundary Protocol to identify the

boundary and scope of report.

Unless otherwise stated, this report covers all

types of disclosure of our Vietnam facilities,

including Cau Tram Factory and Long Hau

Branch. The materiality is defined to ensurethat we address to the issues which are

prioritized by our stakeholders.

Compared with Sustainability Report Year

2010, this version will disclose more on our

newly built production workshop; business

expansion. This may lead to a gap when data is

compared; our approach to new customers

sustainability standards; and number of

reported indicators. There is no limitation

The information data disclosed in this report is

collected from our daily operation. It reflects

the actual situation. The company has CSR data

monitor system which allows company present

accurate data instead of estimation or

assumption.

This report will be issued in English and

Vietnamese to our prioritized stakeholders by

soft and hard copy for convenience.

SUSTAINABILITY CONTACT IN JIA HSIN

We invite you to give us your comment and

feedback on our Sustainability Report Year

2011. We highly respect and appreciate it.

We would like to express our sincere thanks to

everybody participating, contributing, and

supporting to the compilation of this report.

Without their help, this report will not come

true.

Please feel free to contact:

JIA HSIN CO., LTD.

D1-D5 Cau Tram IP, Can Duoc, Long An, Vietnam

CHRIS LEE - General Manager

[email protected]

AI L.H. NGUYEN - Operation Manager

[email protected]

* Photographs by Jia Hsin staffs
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]


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About us

Jia Hsin Co., Ltd. is a sandal manufacturing company

wholly owned by Jia Cherng Corp. incorporated inRepublic of Mauritius.

To be licensed in 2008, Jia Hsin established its business

in new premises after legal liquidation of old business

under the name Sunkuan JVC. The newly founded

company started its operation from June 2009.

Company location:

D1D5 Cau Tram Industrial Park.

Cau Tram Village, Long Trach Commune,

Can Duoc District, Long An Province, Vietnam

Head quarter location:

No. 162, Pu-Tze Rd, Pt-Tze Village, Chi Tung Hsiang,

Yun Lin Hsien, Taiwan, R.O.C

In 2010, the company started-up a new business

relationship with another top sports brand. The venture

became the most significant change in the year and

prolonged its influences to the year 2011. This business

expansion brought about changes in operations, facilities

and management system. The company has invested for a

new manufacturing building, add it up with 3 production

lines and hired additional 400 employees for this new

customer.

The new customer also put the company in an extremelyhigh pressure when it requires our integration to its

operation and management system. In effort to shorten

the gap between customer system and ours, we find the

worth of changes and a gate for the future.

New and Pretty

Our company name simply

means New and Pretty.It

stems from our dream of a

new and beautiful building

while we was working in

our 18-year-old dark and

old factory in Hochiminh

City. It used to be a great

dream and, like a big family,

together we tirelessly

worked to make it come

true.

Company is the second

home after own home, in

the eyes of most of our

employees.Solidarity and

Loyalty are our Values.

Sincere and Support are

our Culture. Employees

can find here strongly

organized business

operation and strictly

disciplinary management.

They can also find

motivation and respects

We work diligently not only

to keep our building new

and beautiful but also to

maintain our beautifulimage and prestige in the

look of our prioritized

stakeholders.


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Business

Jia Hsin operates its manufacturing in Vietnam but does not

supply its products to local markets. Instead, the company acts as

supplier for various world top brands. All products are registered

for export. Without foreign subsidiary and distribution channel,

the company products are launched through the customers

distribution network.

Jia Hsinscustomers possess the world-wide distribution network

which brings Jia Hsin products around the world. Although the

company does not have its own brand-name, it is proud to serve

the community with beautiful, qualified and safe products. The

top destination of Jia Hsin products is the European markets, and

then followed by the Asia and the USA. African countries are the

smallest markets.

OperationJia Hsin hires 1,808 employees in average of year 2011 for its factory in Can Duoc and Branch in

Long Hau. Since Long Hau Branch make samples only, total mass production capacity is allocated in

Can Duoc main factory. With 8 lines and relevant supplementary equipment, Jia Hsin can offer 6

million pairs a year. It expects that the capacity will be fully occupied and sales volume will be

mostly equal to capacity volume.

In align with stakeholders expectation, the company sets 2015 target of 10 million pairs sales

volume. Route map 2010-2015 and strategic plans were worked out from year 2010 to guide us to

the goal. In order to achieve the target, the company needs a comprehensive change from its old

and stunted mindset and system over the past 20 years.

Manufacturing is the core component in our operation. Our manufacturing objectives include of

converting from traditional to lean production lines, gaining double-pph which mean increase

productivity per person per hour twice, enhancing continuous improvement campaign and

changing management mindset.


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Governance

Step into

Reformation

n year 2011, the company decides to step into

Reformation to save its heavy management

boat from sinking and upgrade itself to the

management level of new customer.

The current governance system composes of a

Chairman as representative of investment company -

but not to be the executive officer and employed

General Manager and Vice General Manager. Daily

operation is handled by these two top managers.

Characteristics of management are central

controlling and several-layer management system.

The top management covers all areas in details

instead of prolonging their arms through senior

management. Proportion of indirect workers ondirect workers is very high. The company feels as if a

fully laden boat.

Under pressure of negative impacts from business

performance and the rush to approach new

customersmanagement system, the company

decides to step into a reformation to save itself from

overall crisis

Key Facts

5layers of from top to

bottom

4/1

Proportion of

indirect/direct workers

3 / 7Additional channels / Total

channels for communication

between top management

and employees

Re-structure organizations chart

Narrow down the management layers

Adjust the proportion of indirect/direct workers

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LEGAL AND OPERATIONAL STRUCTURE

Jia Hsin Co., Ltd is registered as a limited

company under Vietnam law, with 100%

investment from Jia Cherng Corp. which is

registered under law of the Republic ofMauritius. The chairman of Board of Directors

of Jia Cherng is Mr. Lin Yin-Piao who owns

13.33% of total shares. Jia Cherng nominates

Mr. Reagan Lin, a member of Jia Cherng Board

of Directors, to be the Chairman of Jia Hsin.

Exhibition 2.8 reflects the Net Sales and CapitalBreakdown of the company in year 2011.

Exhibition 2.8: Net Sales and Capital Breakdown year 2011

There is no Board of Directors in Jia Hsin.

Highest governance body is the Chairman,

acting as representative from investment

company, and Board of Management that

includes one General Manager and one Vice

General Manager. The Chairman is not an

executive officer.

There are 2 committees in company: Trade

Union and Labor Safety Committee. Trade

Union is an independent unit setup by

employees and representing employees in

negotiating with employers. Labor Safety

Committee is setup by the Company under the

local regulation about health and safety

management inside the company.

All the communication between employer and

employees, employees' representative or

committees is handled and decided by Jia Hsin

Board of Management (GM and Vice GM).

Board of Management normally discuss with

employees and committees by following

methods :

1. Weekly meeting for leaders/managers, then

they will re-form workers and staffs on issues

discussed in meeting.

2. Policies, notices, decisions posted on notice

board.

3. Suggestion box.

4. Face to face meeting between Board of

Management and all employees.

The Board of Management shares with all

employees about the company strategies,

policies, business targets/goals, expectation

from customers and board of management, as

well as the requirements on employees'

cooperation and contribution. The Board of

Management does not aim to hide the company

aspects and concerns. The company enhances

the understanding between the partners and

considers it an important factor for thebusiness success and development

Item Year 2011

Net sales (in US$) 18,468,019.40

Sales volume (in pairs) 5,189,406

Item Year 2011

Debt (in US$) 17,477,896.35

Equity (in US$) 744,350.45


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ORGANIZATION STRUCTURE

The organization is structured based on our

operation flow and function, starting from

product development to products delivery.

There are three main divisions: Development,Production and Operation. Long Hau branch is

an assigned department for handling

development of one of our customer.

Functionally, Long Hau branch is belonging to

Development division.

Development division handles on research and

development of new products for each season.

After the new design is confirmed, the order

will be downloaded and Operation division willarrange the supportive and preparatory

activities for production. After all preparation is

done, Production division can start their

process.

Exhibition 4.1. General organization chart


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Transparency & commitment

The company somehow accepts

outsource from employees or employeesfamily business as a way of supporting

employees. It is un-written law that

supervisor of purchase or higher

management level check for reasonable

price and quality. Top Management

approval is mandatory. Highest

governance body is not an exception from

this practice and Chairman will act as

final approver.

Earnings of highest governance body are

directly proportional to company overall

performance while senior management is

able to get fixed wage plus a performance

bonus.

Company overall performance and Top

Management performance is

interdependent. The investment company

appraises Top Management performance

by reviewing company business resultsand its achievement in social and

environmental aspects. This leverage

enhances their dedication to the company

operation.

In such principle, Top Management and

Senior Management qualification plays

the decisive role in the company

development. Their leadership properties

compose of expertise in the industry,

leadership characteristics and leadership

communication.

Top Management play decisive role in the

success of business. The shareholders

select the top management based on their

trust, experience and management ability.

For senior management, the company

adds in the criterion of expertise to

ensure that they will properly guide the

subordinates

Commitment to external initiatives is

among the ways to adhere ourselves to

internationally agreed standards and

principles.

We engaged in GRI sustainability

report from 2010, EU REACH and from

2010 and zero-hazardous chemicals

from 2011.

CHRIS LEE GENERAL MANAGER

CONFLICT OF INTERESTS

HIGHEST GOVERNANCE

The Top Management operates

business with management

systems founded on local and

international legislations,

stakeholders concerns and

expectations as well as company

vision and mission. Deviationfrom this triangle framework

may lead company to

mismanagement and

noncompliance.

SWOT analysis, assessment,

reporting mechanism and

interactive brainstorming are key

tools to support Top

Management to oversee company

conditions and made proper

treatment or improvement.

OVERSEE ORGANIZATIONS

CONDITIONS

HIGHEST GOVERNANCE SELECTION


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Prioritize stakeholders

Our worker Mr. Phan Van Thanh Xuyen

Firstly, the potential stakeholders were

identified during setting company

business goals and main aspects forreporting. Next, the company analyzed

the "Influence" and "Control" proportion

between itself and its stakeholders.

Prioritized stakeholders are the groups

that possess at least 50% of influence and

control.

The company applies various engagement

methods with consideration on location ofstakeholders; nature of stakeholders

business or nature of the group they

belong; and suitable communication way

to representative of the stakeholders or

stakeholders themselves. Popular ways we

apply are Survey & Interview.

The company also engaged to more

than one sources to ensure the

accuracy of information or better

understanding stakeholders

concerns through different sides of

the issues.

We have done the tests of reporting

principles including Materiality,

Stakeholder Inclusiveness, Sustainability

Context and Completeness to ensure that

our report focuses to material issues. The

indicators are selected based on their

coverage of significant and prioritized

issues, Including of control and influence

entities, reporting on significant events or

impacts, providing sufficient information

relating to stakeholders concerns orcompany impacts .

List of prioritized stakeholders:

1. Shareholders

2. Suppliers/subcontractors

3. Employees

4. Local community

5. Customers

6. Local governmental bodies

DEFINE PROCESS

ENGAGEMENT METHODS

PRIORITIZE STAKEHOLDERS

Company survey on concerns from local community

Ms. Pham Thi Kieu Lives in Phuoc Vinh Village.

DEFINE REPORT REPORT CONTENT


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Puma expectation: We are interested in Management System for

Social Performance Labor Practice and

Decent WorkTo understand concern and expectation from our traditional and biggest customer, PUMA,

we have meet and interview Mr. Carlos Bartolome, our assigned Production Manager, and his

assistant, Mr. Titan Chien. They expressed special concern on Social Performance Labor Practice

and Decent Work category.

Jia Hsin CR Officer, Mr. Carlos and Mr. Titan Chien in the stakeholder engagement meeting

Stakeholders Concerns

Case:Pumaconcerns

1. What do you expect from the Jia Hsins Sustainability

Report 2011 ?

The Aspects of Report must be based on the GRI

requirements so I think that all of them are what we want

or expect to know.

2.

Which aspects are you interested in ?

We are more interested in Buil up Management System ,

specially for the Social Performance Labor Practise and

Decent Work

3.

Why are you interrested in these Aspects ?

I think your factory is doing very well now, especially for

the Economic performance and other activities related to

operation system. The reason why we are more interested

in the Aspects of Environment Performances and Social

Performance-Labor Practices and Decent Work is we want

to know how good you maintain and improve them.

4. Do you have any suggestion beside these Aspects ?

We just have some suggestions related to factory

operation :

- The first is Production control and set the up a stable

quality system to make sure that the factory will get the

tagerts and no delays on shipment. For this, the factory

should give more effective training for the production

team and workers.

- The second point is to maitain the working environment,

health and safety. To reduce the VOC at coumpound room

and dus tat buffing area as well as train workers on PPE,

especially for the new workers.

-

The third one is to develop and do the research onequipment based on existing machines so that the factory

does not have to put more investment on it.

- The last is I hope you can get more customers so that you

can create more revenue for workers during low season or

having less orders from Puma

The second point is to maintain the

working environment, health and safety.

To reduce the VOC at compound room and

dust at buffing area as well as train

workers on PPE, especially for the new

workers

MR. CARLOS BARTOLOME

PUMA PRODUCTION MANAGER


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Employees

750 employees join the survey on employees

expectation.

75% expect the company expand business to

bring more jobs to local community.

86.7% say that company has a good hiring

policy for using local people in operation

31,6% hope that company will collaborate

with local governmental departments in

conducting training to employees.

47.4% want company to comply with local

environmental legislation

33.3% wish the company will have more

policies in supporting living conditions

38,9% recommend company to have more

improvement in hiring local people

78.6% request company to comply with all

local laws and regulation.

Suppliers10/12 suppliers give feedback on their concerns.

Economic aspects: 66% want to read our

economic performance.

Environmental aspects : 55% concern on

Energy consumption

Social aspects : 44.4% are interested in

Employment and same percentage for Health

and Safety, and Investment and ProcurementPractice

55.6% also care of Product Responsibility.

This reflects their willingness in collaboration.Feedback from our Sole Supplier Chang Yang


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Business


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Management Approach

Right people for

More Growth

eformation supposes to bring in a better

management structure and locate people to

proper position for more operation efficiency.

With the preference policy for local community

people, Jia Hsin brings all job and promotion

opportunity to Vietnamese, even in Senior

Management positions. The company is aware of the

advantages of local workforce such as smartness,

diligence, and skillfulness. We continue pursuing this

policy and Top Management play the important role

in promoting this policy.

Rightpeople will lead to more growth, Top

Management affirms. Bringing one more excellentlocal senior manager has changed the production

landscape. Together with reformation, it makes out

the rise of productivity and efficiency. We can see the

dramatic growth of business, though it is still

negative in 2011. Improve the economic

performance is not only the job of sales or finance

departments, but also the effort from all others. Such

principle is brought up widely and absorbed by all

employees.

Key Facts

+1 / -2

Increase 1 local and reduce 2

expatriate Senior Management

99.38%Increase in retained earnings

compared with year 2010

31.42%

Increase in sales volume

Preference hiring policy for local community

Dramatic economic growth compared to year 2010

Positive economic performance in last quarter of the year 2011

R


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Exhibition EC1-1: Economic performance year 2011

Items Total 2011

1. Direct economic value

generated 18,682,293.44

Revenue 18,682,293.44

2. Economic Value distributed 18,693,479.81a) Operating costs 12,633,536.15

-Materials 10,578,611.67

-Leasing fee 120,896.44

-Training 12,957.42

-PPE 3,533.29

-Outsourced services 1,917,537.33

b) Small investment

c) Machinery and equipment 1,110,543.45

-Tooling 378,065.19

-Depreciation 732,478.26

d) Employees Wage and benefits 3,367,321.20

- Direct Labors Wages 2,494,217.88- Indirect Labors Wages 873,103.32

e) Interests 480,000.00

f) Payment to government 4,634.57

- Exercise tax 158.46

- VAT and tariff 4,476.11

g) Community investment 1,399.37

h) Other expenses 1,096,045.07

3. Economic Value Retained (11,186.37)

Exhibition EC1-2 : Monthly Economic performance 2011

Exhibition EC1-3: Economic performance 2011 vs 2010

BUSINESSRESULTS

The year 2010 planned a positive

retained earning in year 2011, but the

company sees the loss of

US$11,186.37. We however satisfiedwith this business results as it reflects

our great effort in debating with the

heavy loss of year 2010.

Revenue increases 75,82% and passes

the target of US$ 14 million said in

year 2010 report. Profit is not able to

meet the target of US$ 0.12 million, but

99.38% higher than year 2010.

Especially, the last quarter of year

2011 witnesses the positive business

result, promising a brighter situation

in early of 2012.

Component contributed to good

performance composes of higher

selling price and higher productivity

Targets for year 2012

5,700,000 Pairs

Sales Volumes

15 percentage

Increase of average unit price

200,000US Dollars

Net Profit


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CAREER DEVELOPMENT

First priority is offered to current staffs for

promotion to senior management. The company

also identifies potential staffs through

performance appraisal and implements the career

development plan for such employees. This actionaims to prepare a backup talent team for company

future development.

RESOURCES OF LOCAL TALENTS

The company signed contract with well-known

head-hunterssuch as Vietnamworks.com and

Kiemviec.com for seeking local prominent

applicants. Expats are normally recruited for

technical positions.

MULTI-FUNCTION SUPERVISORS

Supervisors are rotated among divisions and learn

to become multi-function management. The

purpose of this policy is to train supervisors

toward senior management who will supervise

several departments.

DIRECTION OF YEAR 2012

Enhancing career development, rotating

supervisors, and training potential staffs on

complex function is the road that the company will

go in coming year

Our Local Senior Management

Exhibition EC7-1: Proportion of Local vs. Expat

Senior Management, year 2011

Exhibition EC7-2 : Senior Management by

nationality in 2010 & 2011

Nationality 2010 2011

Vietnamese 7 8

Taiwanese 6 6

Philipino 2 2

Chinese 10 7

MARKETPRESENCE


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26

Empower

Employees


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Employment

LA 1 - The size of a workforce provides insight

into the scale of impacts created by labor issues.

Breaking down the workforce by employmenttype, employment contract and region (region

refers to country or geographicalarea)

demonstrates how the organization structures its

human resources to implement its overall

strategy.

.. Breaking down this data by gender enables an

understanding of gender representation across an

organization, and of the optimal use of available

labor and talent.

GRI G3.1 Guidelines


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MANAGEMENT APPROACH

Employment:

Localization and Seniority

While respecting diversity, the company focuses on localization. Majority of employees is from local

community. We break down the workforce by employment type, employment contract and region

in order to structure our human resource in align with operation strategy.

orkforce is ourtreasure. Managing

workforce is

managing talents. Respect,

Share and Care are the

cornerstones of our labor

policy. The company vision

reflects our workforce

management principle.

Human Resource Management

is assigned to handle theworkforce issues. The

company establishes

workforce management policy

and relevant procedures to

guide the Human Resource

Department in workforce

management.

eing aware of theimportance of

workforce

management, the company

decided to setup Human

Resource Management System

(HRMS) since 2010. The

company joined the HRMS

Project and prolonged its

implementation in year 2011.

Together with HR

Reformation, the HRMS makes

the company structure more

reasonable, supports the

operation and improves the

working environment.

Obviously, they will

contribute to the workforce

stability

W B

Managing workforce is to

anage our Talents. It is Jia Hsin

labor concept.

espect, Share and Care It is Jia

Hsin labor policy

NGUYEN THI KIM ANH

Head Of HR Department

64%Female

workers

8%Supervisors

58%1-year labor

contract


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y gender, workforce does not much

fluctuate. The proportion of female

worker maintains from 66% - 69%. The

balance 31% - 34% is male workers. ExhibitionLA1-1 indicates this proportion. Footwear

manufacturing requests manual skills and

female workers are more advantageous than

male workers.

This proportion does not change too much over

these years. Other footwear factories have

similar proportion, it reflects common situation

in the industry. We will not blend this nature by

setting objectives to the indicator but let the

actual requirements lead the gender ratio

Exhibition LA1-1. Total workforce by gender in

year 2011

TOTAL WORKFORCE

Exhibition LA1-2. Workforce broken down by

supervisor and workersy function, the supervisor takesaverage 8% from total workforce in the

year 2011. By gender, we have 53.5%

of female supervisors and 46.5% of male

supervisors. There is not much fluctuation

over the months of the year. Align with the

ratio of female and male employees, the

supervisor ratio indicates more weight on the

female group. Obviously it does not imply the

gender discrimination during recruitment. The

nature of job decides the workforce genderand supervisor gender is a consequence.

B

B


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y type of contract, the Company signs Fixed-Term Written Labor Contract. Under legal

guidance, with 2-year operation, the company can only sign Fix-Term contract with

employees. There are 1-year contract and 3-year contract category. In year 2011, average

58% of employees sign 1-year contract and the remain 42% sign 3-year contract. There is not much

change between genders and contract types since last year. It reflects our workforce stability.

Exhibition LA1-3. Workforce breakdown by gender for 1-year contract and 3-year contract category

y region, we define local or migration employees based on 2 geographical areas: Long An

and Other Provinces. The below exhibition indicates the ratio of local employee and

migration employee, broken down by gender. In general, the local community contributes

63% to our total workforce. Migration workers mainly come from surrounding areas such as

Mekong Delta provinces and Hochiminh City. The company does not have a considerable migration

workforce from the Central or Northern areas of Vietnam. The number of migration workforce has

direct impact to our workforce stabilization, especially in holidays season, and labor disputes,

especially in culture.

For both local and migration employees, the gender ratio has a slight change. By region, type of

contract and function, the gender ratio is basically homogeneous.

Exhibition LA1-4. Workforce by region broken down by gender

B

B

OTAL WORKFORCE


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32

OVERVIEW

The company awares that

hight turnover rate

indicates levels of

uncertainty anddissatisfaction among

employees, or may signal a

fundamental change in the

structure of the

organizations core

operations (GRI G3.1). It

setups the KPI of Turnover

Rate to measure its

performance in this issue.

This indicator is monitor

monthly. For long-term

strategy, the company build

up Human Resource

Management System

(HRMS) with relevant

policies and procedures to

bring more benefits to

employees and develop our

workforce to higher level.

HR Department is the keyassigned section in

handling this indicator. HR

needs to identify current

status against objectives

and targets. Based on gap

identification, HR need to

propose a plan to reducethe resign and improve

retention.

Compare to year 2010

turnover rate, we are only

0.11% lower. However, the

company can meet the

target of maximum 5%

average turnover rate that

we set in year 2010.

For rate of new employee

hires, we start to report this

year. We acknowledge the

report about new employee

hires broken down by age,

gender, region will reflect

our ability in attracting

qualified and diversified

employees. We will start to

monitor this rate and settarget for the coming years.

Our office staffs

Our cutting worker Tran Van Toan

856New employees join in

year 2011

901Employees leave

employment

4%Average yearly turnover

rate


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TURNOVER RATE

Employees leave our company for various reasons.

Main reasons are going back hometown for

working or quit during Tet Holidays. Some quitduring our low season to find another job with

overtime for better earnings.

As reported in year 2010, we have a great change in

our policy that retains all employees in low season

instead of no extension of our labor contract. The

turnover rate goes down dramatically since year

2010.

Total Employees leaving employment in year 2011

are 901 persons. It almost balances with the newemployees hired. Compared to 986 personsleft in

year 2010, the number is slightly less. It results in

0.11% lower than year 2010 rate.

Number

of

workers

Percent-

age

Total new employees 856 100%

Total Male hired 337 39.37%

Total Female hired 519 60.63%

Under-30-age employees hired 638 74.53%

30-50-age employees hired 218 25.47%

New local employees hired 599 69.98%

New migration employees hired 257 30.02%

NEW EMPLOYEES

In year 2011, the company hired 856people. Through the exhibition LA2-1, we

can immediately see the diversity of the

new workforce. By gender, it is again align

with other indicator related to workforce

since the female takes more than 60% of

total new employees. Same circumstance

with region criteria. By age, majority is

employees under 30 years old. It implies

that our workforce is quite young

Exhibition LA2-1. New Employees hire by gender,

age and regions

Our Cutting worker Mai Van Ngoan


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If we review by gender, we will not

find the considerable difference in

leaving number. However, there is a

big gap between under-30-age groupand above-30-age group. It implies

that young people prefer to change

job for more opportunities while

above 30-age workers want to stay

with their job to secure stable earning

for family. Similarly, migration

workers have fewer advantages than

local people, their living expenses are

higher, then they will not take risks.

PLANNING FOR THE FUTURE

Workforce stabilization is among the important actions

supporting the implementation and success of 2015

strategy. To achieve the 2015 business target of 10-

million-pair sales and prepare the equivalent production

capacity, manpower must be stable and skillful enough to

gain double pph (productivity per person per hour).

From year 2012 onward, the Board of Management will

focus on building the capacity for Human Resource

Department and setup the Human Resources

Management System.

FLA - Fair wage project is another activity to improve the

wage policy which is a way to keep workers. The

company will also support the communication and

industrial relationships to enhance the mutual

understanding and cooperation between managementand workers.

Target average turnover rate of year 2012 : less than 4%

Number

of

workers

Percentage

Total leave employees 901 100%

Total Male leaves 427 47.39%

Total Female leaves 474 52.61%

Under-30-age employees leaves 696 77.25%

30-50-age employees leaves 205 22.75%

New local employees leaves 580 64.37%

New migration employees leaves 321 35.63%

Exhibition LA2-2. Total number of employees leave

Our workers in company outing trip


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Occupational Health

and Safety

LA 7 - Health and safety performance is a key

measure of an organizations duty of care. Low injury

and absentee rates are generally linked to positive

trends in staff morale and productivity. This Indicator

will show whether health and safety management

practices are resulting in fewer occupational health

and safety incidents. An evaluation of trends and

patterns may also indicate potential workplace

inequity.

GRI G3.1 Guidelines


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MANAGEMENT APPROACH

Footwear production requires

various machineries and

equipment, thus the working

environment exists risks of

incident which may bring

hurt, injury and occupational

disease to employees.

The company setup Health

and Safety Management

System to control, reduce and

remove the adverse impacts

from the risks.

Health and Safety

Management System is

operated by the company

Health & Safety Committee of

which members are

workshops heads, supervisors

and representative workers of

production teams.

The main indicators reflecting

the performance of

Occupational Health and

Safety aspect are Injury,

Occupational Health, Lost

Days and Absenteeism. Target

of year 2011 was set as

following:

- Injury Rate: 20%

- Occupational Disease Rate:

10%

- Lost Days Rate: 0.005%

- Absenteeism Rate: 2%

There is a notice that the year

2010 Report misinterprets the

result of computation and

consequently setup inaccurate

targets. They will be adjusted in

this report.

Health and safety training to all workers

The company setup

Health and Safety

Management System to

control, reduce andremove the adverse

impacts from the risks

NGUYEN QUAN THUY QUYNH

C.R. OFFICER

Head of Labor Safety Team

0.26Major Injuries Rate

2.89Minor Injuries Rate

0Occupational Disease

Rate

7.46Lost Days Rate

825Absenteeism Rate


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WORKFORCE AND SUB-CONTRACTOR BREAKDOWN

The company is liable for the safety of its

workforce and independent subcontractors

working on its site. As results, any policy,

procedure, training and report on Health and

Safety must cover both groups.

There are two independent subcontractors

permanently working in the site of Jia Hsin.

They are meal provider service and planting

service. Exhibition LA7-1 provides the regional

breakdown of our own workforce and

subcontractors workforce.

Exhibition LA7-1. Regional breakdown of workforce and independent contractors

Workforce Canteen PlantingTotal

manpower

Long An 1,142 12 0 1,154

Other provinces 666 4 4 674

Total 1,808 16 4 1,828

REPORTING PRINCIPLES

The company sets certain principles in reporting on this indicator. These principles are basement

for data collecion and computation.

1. The company reports both major and minor

injuries (at first-aid levels). This aims to

completely review the current status for

proper action plan for future.

2. In Lost Days Rate, the unit Day means

schedule work day and it is counted by the

day after incident. This aims to secure a

relevant connection to factor work hours

used to compute the lost days rate.

3. Injuries rate captures fatalities. However,

there is no fatality this year, the Injury

Rate purely covers major and minor

injuries.

4. The factor 200,000 used in computation

formula is derived from 50 working weeks

at 40 hours per 100 employees. By using

this factor, the resulting rate is related to

the number of employees, not the number

of hours (GRI G3.1).


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38

PROCEDURE OF ACCIDENT INVESTIGATION

The company has issued the Procedure of

Accident Investigation to guide theinvestigating, recording and reporting

accidents. We established the investigation

team who would work with injured workers,

supervisor and involved workers to understand

the injury level and accident root causes.

Investigation Record Sheet will be issued to all

relevant parties. Based on investigation record

sheet, the HR Dept. will arrange insurance andbenefits, the HSE team will do corrective

actions to prevent the accident repition, and CR

team will record in the CSR software, then

report to Long An Department of Labor,

Invalidity and Social Affairs (DOLISA) quarterly.

RATE OF INJURY, OCCUPATIONAL DISEASES, LOST DAYS

AND ABSENTEEISM

Injury is understood as minor and major hurt

to workers during working time, including

traffic accident right before and after working

time, in a proper moving route between home

and factory.

Occupational Diseaseis defined as disease

from working environment and/or activities

and/or results of work-related injury

Lost day is counted when a worker is not

able to perform usual work because of injury

and/or occupational disease.

Absenteeismis workers absence from work

because of any kind of incapacity. Permitted

leave such as holidays, annual leave and

maternity are excluded.

In order to calculate the rate of above factors, we use GRI formula as below

Cases/days of injury/disease/lost/absence

IR/ODR/LDR/ODR = x 200,000

Total working hours/day


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39

Below Exhibition LA7-2

displays the gerneral IR,

ODR, LDR and ODR in year

2011.

In this year, we also reportthe minor injury rateto

have better understanding

on our performance. For

every 100employees, there

is 0.26employee exposing

to the risk of incidents.

Compare to last year, we

dont have more major

accidents.

For occupational diseaserate, we have zero case,

compare to 4 cases in year

2010. During the

occupational disease check,

there are 11 suspicious

cases. The company doctor

has reviewed the cases and

found side effect from other

diseases causing the

symptom of occupational

disease. Involved workers

were counseled on

treatment of other disease.

Re-check has confirmedthat there is no

occupational disease.

In lost days and

absenteeism, we are not

able to meet the target.

Compared with year 2010,

lost day rate increases

more than 4.5 times and

absenteeism is 1.2 times

higher. This implies that

our accidents seems more

serious because workers

take longer unavailable

work-time. We will focus

more in safety as it will

have serious effects to both

employees and operation.

s

Exhibition LA7-2. Rate of injuries, occupational disease, lost day and absenteeism

UnitNumber

of cases

Total

working

(hours)

Rate

Major injuries Case 6 4,639,526.41 0.26

Monor injuries Case 67 4,639,526.41 2.89

Occupational

DiseasesCase 0 4,639,526.41 0

Lost day Day 173 4,639,526.41 7.46

Absenteeism Day 19,151.5 4,639,526.41 825.58

Accidents with pressing

machine


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Exhibition LA7-3. Rate of injuries, occupational disease, lost day and

absenteeism by regions and gender

By understanding the nature of the indicator, we can easily perform management system. In year

2012, we need to perform better in these aspects. We will try to have at least 5%-10% reduce for

each criterion. We believe that the OHSAS 18001 will support us to achieve this target.

By breaking down the rate into

regions and gender, we see a

significant difference between

them in all four types of rate.

In Injury and occupationaldisease rate, we focus to

gender comparison as

characteristics of each gender

will effect to the rate. Female

workers naturally seem more

careful than Male workers,

therefore the rate for female is

lower. Lost days ratehas the

same nature because it is the

consequence of IR and ODR.Region criterion does not

much effect to the resulted rate

InAbsenteeism,it is not

surprised to see the adverse

trend in both Gender and

Region criteria. Female

workers are often off working

for common reasons such as

child care, normal disease,

family issues. Male workersmore focus on external job

while female has to handle

housewife job.

In region criteria, it is

understandable that migration

workers absent more days

than local as they need more

time for transportation back

home town and spend more

holidays with family.


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Training and

Education

LA 8 - As part of a preventative strategy for managingthe health and safety of its workforce, this Indicator is

relevant for any organization.

... The Indicator helps demonstrate the extent to which

such issues have been addressed in organizational

programs and the degree to which best practices are

applied. Preventing serious diseases contributes to the

health, satisfaction, and stability of the workforce, and

helps maintain the organizations social license to

operate in a community or region

GRI G3.1 Guidelines


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Tuberculosis Searching Program

Tuberculosis is listed in top 5 prioritized serious diseases of Long An Province. In

collaboration with Center of Preventive Health Services of Long An, Jia Hsin

implemented the Tuberculosis Searching Program in July-2011.

The doctors from Center of Preventive Health Services of Long An have done the

tuberculosis check for 294 workers and done straight radiography for 136 workers.

Two suspicious cases were found.

In August-2011, the company doctor conducted the counsel and support the workers

in treatment. The workers have taken the radiography and sputum test again. The

result is negative.

CASE

Preventing serious diseases contributes to the

health, satisfaction, and stability of the

workforce, and helps maintain the

organizations social license to operate in a

community or region (GRI G3.1)

Based on company occupational health and

safety policy, the company assigned Health

and Safety Committee to arrange necessary

training, education and improvement

activities to help prevent the serious

diseases. The training and education were

done with support and collaboration from

local medical agencies because we did not

have sufficient expertise.

This practice has been done in year 2010 and

we are happy to see that we have better

performance in year 2011. We will keep

doing more and better to increase our social

contribution to the local community.

Serious diseases are Occupational or non-

occupational related impairment of health

with serious consequences for employees,

their families, and the communities

(GRI G3.1)

The Center of Preventive Health Services of

Can Duoc District, where we operate, has

defined the top 5 prioritized serious

diseases in year 2011 as following:

1. Petechial fever

2. Avian Influenza Virus A subtype H5N1

3. Neisseria Meningitidis

4. Tuberculosis

5. Hand Foot Mouth Disease

MANAGEMENT APPROACH TOP 5 PRIORITIZED SERIOUS DISEASES


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RISKS CONTROL

The serious disease suffering not only effects to mind and body,

but also causes financial burden to involved families. It is quite

critical to conduct Risk Control to prevent the serious diseases in

our workforce and their families. We define Risksas of theunfortune, damages, lost and danger that directly impact to

health and finance of our workforce and their families. Risk

Controlare the pratices that we do or contribute to practices of

local medical agencies in order to limit the exposure and

transmission of diseases by our workforce and their families.

ASSISTANCE PROGRAMS

Assistance programs are done via propaganda, training,

education, counsel and medical check.

Exhibition LA8-1. Assistance program to workers and families

Education/

Training

Counsel Prevention/

Risk control

Treatment

Program

Recipients

Yes No Yes No Yes No Yes No

Employees 1.808 171 127 736

Employees

familiesX X X X

Community

membersX X X X

Company provides information on serious diseases through its broadcast program. Posters are

affixed at main notice board, workshop notice boards and in clinic room to advise symptom and

preventive actions. Address of closest preventive health services, hospitals and hotlines are posted

around the premises.

Company conducts annual health check and occupational diseases check for workforce in August-

2011. Based on results, we organize the counsel program to workers who are diagnosed with

occupational disease, infected with serious diseases and classified in group of the 4, 5, 6 healthlevel.

Exhibition LA8-1 reports the number of our workers benefiting from our programs. Compare to

year 2010, 100%of our employees are trained, 161 workers were counseled and 736 workers

were treated. There was no treatment in year 2010. We are happy to see improvement. In year

2012, we will try to expand official program to community

It is quite critical to

conduct Risk Control

and Training &

Education to prevent theserious diseases in our

workforce and their

families

Dr. BUI TIET NGHIA

Our company doctor


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Diversity and Equal

Opportunity

LA14 - Many countries have introduced legislation

to enforce the principle of equal pay for work of

equal value. This issue is supported by ILO

Convention 100 on EqualRemuneration for Menand Women Workers for Work of Equal Value.

Equality of remuneration is a factor in retaining

qualified employees in the workforce. Where

imbalances exist, an organization runs a risk to its

reputation and legal challenges on the basis of

discrimination.

GRI G3.1 Guidelines


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Diversity and equal opportunity is an important factor to secure the stability of workforce. Equal opportunity

can be gained by respecting non-discrimination policy. The company has been adhering to the non-

discrimination principle over the years and it is a component of our code of conduct.

While chasing equality concept, we enrich the workforce diversity. We employ workforce from differentnationalities, genders, cultures and sociality. Salary scale is not established based on difference of gender or

nationality. Instead, it reflects the expertise, seniority, education and job responsibility. The Human Resource

Department takes the account of implementing this policy.

WORKFORCE BY CATEGORY AND FUNCTION

Workforce is divided into 6 categories as displayed in exhibition LA14-1. By function, we have 4

divisions as shown in exhibition LA14-2. The breakdown by category and function indicate the

structure of company and diversity of its workforce.

Exhibition LA14-1. Workforce by category and function

BASIC SALARY AND REMUNERATION OF WOMAN TO MEN

There is no difference between female and male workers in salary scale. Below exhibition reflects

the salary gap based on expertise and job responsibility. We did not report this indicator last year

for comparison. We will try to maintain our good performance in this aspect.

Exhibition LA14-2. Basic salary and remuneration by category and function

Position Basic salary Allowances(*) Total

General Managerand Vice GM

22,050,000 0 22,050,000

Manager andAssistant Manager

7,664,167 9,814,000 17,478,167

Expert 11,550,000 0 11,550,000

Junior Manager 5,454,167 4,514,000 9,968,167

Head ofDepartment

4,121,667 2,889,000 7,010,667

Supervisors 3,072,917 1,864,000 4,936,917

Staffs and workers 2,444,881 714,000 3,158,881

Workforce by category Number

General Manager and Vice GM 2

Manager and Assistant Manager 4

Expert 11

Junior Manager 7

Head of Department 21

Supervisor 98

Staff and worker 1664

Total 1808

Workforce by function Number

Development 45

Technical 16

Office 150

Production 1597

Total 1808

ATIO OF SALARY OF WOMEN TO MEN

Our stitching workers

FunctionBasic salary

( vnd)

Total

allowanceTotal

Development 2,564,167 1,011,500 3,575,667

Technical 2,677,500 1,700,000 4,377,500

Office 2,525,863 1,878,500 4,404,363

Production 3,401,250 714,000 4,115,250

(*) Allowance including: Performance, Attendance,

Childcare, Living, Transportation and Environment


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Environment


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Environmental Highlights

Environmental aspects are the

most focused issues in our

sustainability action plan. In

year 2011, we emphasize to

build up management systems

to acquire the stable and long-

term compliance. Following

are our major achievements in

year 2011:

Establish sustainabilityorganization, including

representatives from

Environment Team, Health

and Labor Safety

Committee, and Corporate

Responsibility Dept to

handle company

sustainability.

Assign Sustainability

Manager to manage

company sustainability

Apply and be certified in

Environmental Management

System ISO 14001

Build and apply CSR

Software for data collection

and performance

measurement

Install air emission

treatment system

Install waste watertreatment system.

Successfully organize

Environmental Month to

promote environment

protection in company and

local community.

Although some environmental

targets are not met in year

2011, we are not disappointed

because we trust that the

future performance will be

better after we implement the

management system.

We has set our 2015 targets

and drawn a route map from

2010 to reach our objectives.

Year 2011 performance is the

enhancement for our movingto the goal.

CASE : CORPORATE SOCIALRESPONSIBILITY SOFTWARE

Corporate Social Responsibility

(CSR) Software is the application

written by our IT staffs aiming to

facilitate our CSR management

system. The application covers

aspects in Social, Occupational

Health and Safety, and Environment

The application has 3 modules:

- Key Indicators Monitor (KIM)

possess functions on indicators

data collection, indicators

analysis and indicators

comparison.

- Key Performance Monitor

(KPM) focuses to legal and

other requirement

management, CSR planning and

CSR report.

- Sustainable Compliance and

Development (SCD) helps us

evaluate our performance and

development based on rating

tools.

We started software in 2010 and

currently KIM is well operated and

KPM is in trial operation.

We will develop the SCD in year

2013


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Photo is sourced from

EN 3 -Energy consumption has a direct effect on

operational costs and exposure to fluctuations in

energy supply and prices. The environmental

footprint of the organization is shaped in part by

its choice of energy sources. Changes in the

balance of these sources can indicate the

organizations efforts to minimize its

environmental impacts.

EN4 -The particular effect indirect energy usage

has on climate change depends on the type of

primary energy used to generate intermediate

energy.

GRI G3.1 Guidelines

Energy


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MANAGEMENT APPROACH

Energy is defined among the most concerned

components in Jia Hsin Environment Strategy.

The company has set a long-term target of 25%

reduction of consumption for the period 2010-

2015. The target was cascaded down to all

employees. Sustainability Organization takes the

duty to implement necessary programs to

support the company in meeting the target.

To guide the organization in this aspect, the

company issued the Procedure of Energy

Management. We conduct internal audit to

ensure that the policy is properly implemented.

Company consumes both Direct Energy and

Indirect Energy. The most concern of Direct

Energy is Fuel and most focus of Indirect Energy

is Electricity. Sustainability Team has been doing

various types of training, on Environment

aspects in general and Energy Saving in

particular, to all employees, from Top

Management down to direct workers.

For long-term, we plan to implement cleaner

production and energy management system. Wealso started in year 2010 the strategy of

changing Fuel by another environment friendly

energy resource. With both short-term and long-

term plan, we trust that Jia Hsin will be

successful in this aspect.

Conserv project is a capacity building implemented by

Puma in cooperation with ASSIST and co-financed by DEG.

Conserv stands for Conservation of Environment Resources

in Vietnam. The project aims to support Puma Suppliers in

implementing necessary activities in order to save Vietnam

environment resources in general and meet environmental

objectives and targets set for Puma Supply Chain inparticular.

Jia Hsin decided to participate into this project to build up

capacity for company staffs in order to implement

necessary activities to meet the following company

objectives and targets :

1. Company vision and mission : To become a

responsible supplier

2. Company CR strategy : Sustainable compliance &

development

3. Company 3-year strategy (2012-2015) : Reduce 25%

in energy consumption, water consumption, electricity

consumption and wastes generation.

The project started up from Sep-2011 and plans to finish by

the end of year 2012

Starting from year 2010, we seek alternative F.O oil, the

most concerned Direct Energy in the company. F.O oil is

used to heat boilers which providing steam for

machineries. We plan to replace F.O Oil by rice husk. The

new energy resource is natural and rich in Vietnam. Rice

husk ash can become a secondary resource for farming. It

can be used as fertilizer.

Jia Hsin started to work on it with Natural Resources and

Environment Consulting Center (NREC) of Hochiminh city

College for National Resources and Environment. Ms.

Nguyen Thi Truyen, Deputy Director of NREC, has done the

project analysis. We unfortunately can not proceed further

this project as it needs a large financial investment. We

keep looking for sponsorship.

CASE : CONSERV PROJECT

CASE : ALTERNATIVE FOR F.O OILS

Energy is our

most concern and

we implement

various programs

for energy

efficiency

------ Duong Quoc Hung ----

Head of Maintenance, in

charge of Energy


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50

Direct Energy Consumption

Company Direct Energy is defined as of fossil fuel distilled from crude oil, including gasoline, liquefied

petroleum gas (LPG), lubricant, F.O and D.O oil. Those are classified as non-renewable energy sources.

No renewable energy source exists in the operation process.

The company monitors the direct energy

consumption periodically. At each energy

consumption process, we assign staff to record

the figures daily, weekly or monthly. Assigned

staff will input the records into K.I.M of CSR

Application for analysis and corrective action

(if needed). The company monitor following

Direct Energy Indexes in CSR Application:

EN003 gasoline for cars and bus

EN004 DO oil for cars and generator

EN005 LPG for canteen

EN013 FO oil for boiler

EN023 Lubricants for machineries

We focus to analysis on LPG and DO oil. Based

on exhibition EN3-1, they are the most

consumption sectors. In down time from April

to August, oil volume goes down as less

production, but LPG keep its leverage as

canteen still need to provide meals to

employees. Reverse situation happens in peak

production time from September to March.

Basically, the consumption volume is stable.

However, the consumption per pair index

widely fluctuates as it depends on production

volume. Referring exhibition EN3-2, we can find

that down time has very high index while peak

is much better. Volume is mostly stable while

divisor, i.e production quantity, sharplychanges between the two periods, making the

index vary.

We have done well in this indicator. The index

of average consumption per pair of year 2011 is

0.05 GJ against 0.277 GJ of year 2010

Exhibition EN3-1: Monthly energy consumption by type (GJ)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

LPG 50.40 16,800.0 28,000.0 25,200.0 23,100.0 23,100.0 22,400.0 22,400.0 22,400.0 19,600.0 22,400.0 22,400.0

DO oil 2,138.18 821.14 1,625.63 624.57 648.88 748.08 758.52 686.66 1,410.83 1,891.41 838.04 1,591.81

FO oil 13,553.5 7,252.31 7,199.47 4,544.25 4,544.25 5,350.07 5,812.42 9,815.06 9,894.32 8,956.41 10,581.2 10,158.5

Gasoline 1,414.12 1,022.34 1,399.66 1,142.44 1,272.52 1,257.56 1,110.07 1,261.89 1,171.13 1,150.49 1,183.51 1,178.92

Total 17,156.2 25,895.7 38,224.7 31,511.2 29,565.6 30,455.7 30,081.0 34,163.6 34,876.2 31,598.3 35,002.8 35,329.2

Exhibition EN3-2: Monthly Energy consumption per pairs

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Energy

consumption/pair (kg)

0.0025 0.0021 0.0047 0.0051 0.0073 0.0087 0.0040 0.0038 0.0035 0.0028 0.0027


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51

Indirect Energy Consumption

Electricity is the key and only Indirect Energy in our facility. Each operation process and point needs

power. Majority consumption is from machineries and lighting. There is also electricity loss due to

leakage and machinerys inefficiency.

Exhibition EN4-1: Monthly consumption 2011

With same nature of direct energy resources,

electricity consumption varies between peakand low production period. With in low

production months, electricity is mostly used

by office, lighting system, and ventilation

system. Although this amount is low, it

significant effect to the index of consumption

per pair as there is almost no production

output. The effect is reflected in below

exhibition EN4-2 Monthly electricity

consumption per pair. It is important to

consider the consumption per pair to

evaluate the efficiency.

In comparison to year 2010, we consume

17,6% more since we increase 44,66% ofproduction volume. It is a reasonable

increase. For index of consumption per pair,

we are not possible to compare as this is the

first year we report on this indicator.

Exhibition EN4-2: Monthly Electricity consumption / pair

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Electricityconsumption

1,015.56

647.28 792.00 489.60 477.00 436.68 392.40 745.92 734.76 853.56 879.48 940.68

Production volume 714,107

534,025 718,819 206,225 192,116 151,636 133,349 431,831 489,493 506,884 663,218 708,915

Electricityconsumption/pair

0.0014 0.0012 0.0011 0.0024 0.0025 0.0029 0.0029 0.0017 0.0015 0.0017 0.0013 0.0013

We are almost half way of

strategic plan and need to be

more active in year 2012 to

achieve our target of 25%

reduction in Energy

Consumption. At least, we

need to save 5% in year 2012.

We expect the technical

support from Conserv. By

effectively implement

Conserv, we believe that the

company can earn a lot of

benefits in general and reduce

energy consumption in

particular.

Another long-term strategy

that we need to pursue is the

alternative of FO oil. More

researches should be done to

seek for approval of

Investment Company and

financial sponsorship for the

project.

YEAR 2012 ACTION PLAN


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52

WaterEN8 -The total volume withdrawn

provides an indication of the

organizations relative size and

importance as a user of water, andprovides a baseline figure for other

calculations relating to efficiency and use

. Total water use can also indicate the

level of risk posed by disruptions to

water supplies or increases in the cost of

water. Clean freshwater is becoming

increasingly scarce, and can impact

production processes that rely on large

volumes of water.

GRI G3.1 Guidelines


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ANAGEMENT APPROACH

Industrial Park is the key water

source for the facilities operating

inside the park. Disregard disadvantages

coming from monopoly, we can enjoy a rather

good water source.

Water is among the expensive resources. It

becomes a headache problem for any

enterprises with some-thousand workforce.

Jia Hsin put a control system to ensure that

our water is not waste away. The

consumption in year 2011 rises, but analysis

report states that this increase is reasonable.

However, the company supposes that therewill be rooms for improvement. Policies have

been issued to guide the internal usage and

management of water. Domestic water and

production water is measured and analyzed

to ensure a reasonable consumption.

ATA COLLECTION

Meter is used to measure consumption. There is a main meter installed at the connect

point between industrial park pump and company main pump. Meters are also

installed at the beginning points of water pump that lead to each workshop and

department.

Company assigns Administration staff and Mechanic staff to record the figures of water

consumption into Record Book and CSR software. The data later on will be checked byCR officer and reviewed by Operation Manager. There is no measurement for collect

rainwater so far.

M

D

Company installs the rubber

orifice reducer inside the

taps to control the water

flow at reasonable rate but

still meet the demand from

employees

+151%Average use

+113%Average use/head

+151%Total use


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ATER WITHDRAWAL

Total volume of water withdraw from

Industrial Park Source is identified in

below exhibition EN8-1 Monthly water

consumption in 2010 & 2011

As clearly shown in the chart, the water

withdraw volume goes up month by month,

from 1,656m3in January to 4,398 m3in

December, summed up to 33,680m3for the

whole year 2011. It is 151% higher than

withdraw volume of year 2010.

Monthly records noted some key reasons for

the rise in year 2011 and higher consumption

compared to year 2010 as below:

1. Printing workshops use water to clean silk

screens with water-based chemical. They

rarely used water for production in year

2010 because the paint is solvent-based.

2. Company uses water from industrial park

source for plants watering. In year 2010,

we temporarily used the water from a

small pool at the back of company facilities

and this volume was not recorded.

3. Industrial park water is stable and no more

usage from standby deep well. In year2010, we sometimes used it

4. We hire more workers and produce more

pairs in year 2011 leading to more

consumption.

Exhibition EN8-1. Monthly water consumption

ATER INDEX

The company creates and evaluates

the Key Performance Indicator

(KPI) of Water consumption/head.

Exhibition EN8-2. Water consumption per head

Computation for this KPI is to divide total

volume by total workforce. Purpose of

evaluating and managing this KPI is to ensure a

reasonable consumption. If we just compare the

volume between the months and years, we

hardly possible understand if the fluctuation is

reasonable or not.

Compare to year 2010, the Index is much

higher. As explained above, the index of the twoyears is influenced by data collection method.

Some of volume is not recorded in year 2010

such as withdraw from deep well or nature

pool. We recognize the impacts and plan to

remove such influence from year 2012 onwards.

W

W


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55

Emission,

Effluents, andWaste

EN16 -Greenhouse gas emissions are the main cause

of climate change and are governed by the United

Nations Frame-work Convention on Climate Change

(UNFCC) and the subsequent Kyoto Protocol

EN20This Indicator measures the scale of theorganizations air emissions and can demonstrate the

relative size and importance of these missions

compared to other organizations.

EN21Discharging effluents or process water to a

facility for treatment not only reduces pollution levels,

but can also lower the organizations financial costs

and the risk of regulatory action for non-compliance

with environmental regulation.

EN22Data on waste generation figures over severalyears can indicate the level of progress the

organization has made toward waste reduction efforts.

It can also indicate potential improvements in process

efficiency and productivity.

GRI G3.1 Guidelines


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Emissions, Effluents and Wastes:

Replace, Reduce and Resolve before Release

The company acknowledges its large consumption of energy and other resources. We are also aware

of emissions, effluents and wastes we release to the environment as well as our responsibility in

handling our releases. We follow the 4R policy: Replace, Reduce and Resolve before Release

The company does the

Environmental Major Aspects

Assessment to identify

environmental impacts from

its operation. The corrective

and improvement actions are

set based on the priority of

Replace, Reduce and Resolve.

We set first priority for

Replace actions because it

will remove the risks and

impacts. If it fails or is not

possible, we reduce the

consumption to reduce the

emissions and wastes. Finally,

for remaining, we resolve

them with proper treatment

methods to avoid as muchpollution as possible.

The company issues following

procedures involved in

Emission and Waste aspects:

1. Waste Water Management

2. Hazardous Waste

Management

3. Medical Waste

Management

4. Domestic Waste

Management

Sustainability Organization

takes the task of managing all

the emissions and wastes

occurred from company

operation. Our target for year

2012 is 5% reduction in

emission, effluents and waste.

This will be a part of our2010-2015 target with 25%

reduction in overall.

M

anagementApproach

We follow the 4R policy -

Replace, Reduce and Resolve

before Release with Emissions,

Effluents and Wastes

TRAN THAI

JUNIOR MANAGER

Handling EVA workshop and major

emissions

4,046tonsGHG

emission

-1.64%total air

emission

171m3

production

waste water

+35.5%

Total waste


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Direct and Indirect Green-House Gas Emissions

GRI G3.1 Guideline states that Green-House

Gas (GHG) emissions are the main cause of

climate change and are governed by the

United Nations framework Convention on

Climate Change (UNFCC) and the subsequent

Kyoto Protocol. Vietnam also has its own

program to control the volume and reward

the reduction of GHG emissions. In align with

these international and local regulations, the

company started to monitor the GHG fromyear 2011 onward.

Both Direct and Indirect GHG emissions exist

in company manufacturing process. Direct

Energy sources in the company such as Oil,

LPG, and gasoline emit popular GHG such as

CO2, CH4, N2O when they are burned. Indirect

Energy, including electricity and steam, do

not create GHG emission by themselves, but

they are born from Direct Energy sources that

emit GHG.

The company computes the volume of GHG

based on the volume of Direct and Indirect

Energy consumption reported in Energy

Aspect. The conversion is made in accordance

with2011 Guidelines to Defra / DECC's GHG

Conversion Factors for Company Reporting

Exhibition EN16-1 and EN16-2 below show the monthly Direct and Indirect GHG emissions volume

in year 2011. Total GHG volume for all emission sources is 4,046 tons. We currently are not possible

to find out a standard or common rate for comparison and evaluate our performance in this

indicator. We are also not possible to compare with previous record as this is the first time we

monitor and report on this indicator. We target to reduce 5% of the GHG emissions in year 2012

Exhibition EN16-1. Monthly Emission of Direct GHG Exhibition EN16-2. Monthly Emission of Indirect GHG

METHODOLOGY

Conversion

methodology is

extracted from2011

Guidelines to

Defra/DECC's GHG

Conversion Factors for

Company Reporting

NG. T. HONG NHUNG

C.R OFFICERHandling computation of

GHG

GHG EMISSIONS


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SignificantAir Emissions

The company Major Environmental Aspects Assessment has identified the adverse effects of air

pollution on habitats and human health. Certain air pollution not only limits its impacts on the

employees, but also spreads to the surrounding living environment and community people

IDENTIFY SIGNIFICANT AIR EMISSIONS

Based on the Major En

Documents

Jia Hsin GRI Report