Dechra Pharmaceuticals PLC

Dechra Pharmaceuticals PLC

Annual Report and Accounts for the year ended 30 June 2012

Social, Ethical and Environmental Responsibilities

A responsible approach to our stakeholders and the wider community is considered by the Board to be fundamental to the business. The conduct of the business towards social, environmental, ethical and health and safety issues is recognised to have an impact on our reputation and therefore the implementation and improvement of policies and systems is ongoing.

The Board takes ultimate responsibility for Corporate Social Responsibility ("CSR") and continues to be committed to developing and implementing appropriate policies that create and maintain long term value for all stakeholders. Sound business ethics help to minimise risk, ensure legal compliance and enhance Company efficiency.

The Sustainability Committee (the "Committee") was set up in October 2009. It has terms of reference which were approved by the Board in July 2010, copies of which can be obtained from the Company Secretary or via the Company's website at The Committee is chaired by Ed Torr, the nominated Director responsible for environmental policy, and its members are representatives from each of the business units. The Company Secretary is secretary to the Committee. The Committee is responsible for establishing and maintaining the Group social, ethical and environmental policy. The following report details how we have applied the main principles of this policy, a full copy of which can be obtained from the Company Secretary or via the Company website.

Social Responsibilities

The Board recognises that the Group has a responsibility to its stakeholders and therefore encourages the business units to contribute to the social and economic welfare of the local communities in which they operate. It recognises that by taking voluntary action in this area it is helping to protect and develop its own business.

As reported in the 2011 Annual Report the Committee has reviewed the way in which donations (either in the form of money or stock) are made by the business units to charities and as a result has established a Group Donations Policy, which became effective 1 July 2011. From this date, the Group will donate annually an aggregate of £10,000 to be split between an animal welfare charity, an environmental charity and an employee nominated charity. All employees within the Group are entitled to nominate a charity or a non-commercial organisation. All 2011 nominations were considered by the Board and the chosen charities were as follows:

Nominated Animal Charity (£2,500)

  • The French employees of DVP nominated the LFPC (French League for Protection of Horses): This charity is managed in co-operation with the French Association of Equine Veterinarians. It creates a network of sentinel veterinarians caring for horses in difficult situations.

Far left:
Liz Rawlings, Marketing Communications Manager at DVP UK, presenting a cheque for £2,000 to Mr Len Curtis, MBE, Founder of Donna's Dream House.

Melinda Poole and Bryan Toliver, employees of DVP US taking part in the Dog and Jog event organised by the company in June 2012.

Environmental Charity (£3,000)

  • The employees of Dechra Pharmaceuticals PLC nominated Staffordshire Wildlife Trust: As in previous years Dechra has maintained its investment in the Corporate Membership Scheme for the Staffordshire Wildlife Trust (the "Trust"). The continued support provided by the Company has assisted the Trust to continue with their education, conservation and community projects throughout Staffordshire including the installation of a new play trail at the Wolseley Centre, maintaining and improving the habitat at Highgate Common and the Churnet Valley Living Landscape Project.
  • The UK employees of DVP nominated the People Trust for Endangered Species ("PTES"): Since 1977, PTES has been helping to secure a future for many endangered species throughout the world. This trust focuses on specific problems and works to preserve endangered species in their natural habitats. The donation was utilised to help fund trials of hedgehog footprint tunnels that PTES is developing to monitor these animals thereby allowing this trust to evaluate their efforts in improving their habitat.

Employee Charity (£4,000)

  • An employee at NVS nominated Savana: This Staffordshire based charity supports anyone who has experienced or is affected by any form of sexual violence including rape, sexual, domestic or honour related violence and childhood sexual abuse whether recently or in the past. The donation was spent in full on providing counselling sessions and equated to 50 individual face to face counselling sessions for victims of sexual abuse.
  • The UK employees of DVP nominated Donna's Dream House: This charity in Blackpool provides free holiday experiences for children and teenagers with life-threatening illnesses and their families, as well as recently bereaved siblings and their families. The home was closed in December 2011 due to an arson attack so we are pleased that the donation is being utilised to assist with the rebuild.

In addition to the annual Group donation, each business unit has discretion to allocate funds to local community groups, employee nominated charities and/or animal welfare charities. Below is a selection of what has taken place during the 2011/2012 financial year.

Animal Welfare

  • As in previous years, many of our businesses have donated obsolete and/or short dated stock, damaged products and consumables to various charities, ensuring that such stock is not provided to charities where the donation-in-kind could be sold to third parties. DVP UK continued to provide assistance to a charity called Help the Street Cats of Morocco which it has been involved with since 2006 providing supplies of Atipam, Canaural, Cleanaural, Fucithalmic and Sedator. In addition, DVP UK has provided assistance to GSPCA, an animal charity based in Grenada, which offers free veterinary care to domestic animals on the island with an ongoing neutering programme, by providing supplies of Clavudale, Fiprodog and Fiprocat. NVS donated bird feeders and bird food to local schools and conservation organisations.


  • DVP EU has continued to donate DKK0.02 for every kilowatt per hour used for the period 2011 to 2015 to Energreen ApS for the construction of new green energy production facilities within Denmark.


  • Each year DVP EU nominates a Danish charity. This year they donated DKK2,500 to the Danish Cancer Foundation. Furthermore, as reported in the previous Annual Report, DVP EU has continued its sponsorship of three children through SOS Children's Villages.
  • Dechra Laboratory Services has maintained its links with local schools by offering a number of work experience placements to eight children from local schools and three veterinary students.

Business Ethics

The Board expects all of the Group's business activities to be conducted in accordance with the highest standards of ethical conduct and in full compliance with all applicable national and international legislation; in doing so we aim to maintain a reputation for acting responsibly and with integrity.

The Board has formalised its expectations in respect of business conduct into a policy known as The Code of Business Conduct (the "Code"). The Code aims to set a standard of conduct which applies throughout the Group and ensures, amongst other things, that:

  • all third parties are treated fairly, openly and honestly;
  • our employees do not accept or offer bribes, facilitation payments or other inducements; and
  • employees must avoid direct and indirect conflicts of interest (and where this is not possible, the employee must follow the procedure set out in the Code in order to ensure that the employee is removed from the position of conflict as soon as possible).

A whistle-blowing policy is also in place whereby employees report, in confidence, any suspected wrongdoings within the business where they feel unable to discuss directly with local management. Details of the whistle-bowing policy are detailed on the Company website at

The Dechra Values were launched in June 2011 across the business. A summary of which can be found in the Chief Executive's Report. Further information can be obtained via the Company's website at The Board fully endorses these values and believes that they encapsulate Dechra's business ethics and set standards that all employees wish to achieve and ultimately exceed.

Environmental Policy

The Group recognises the importance of good environmental controls. It is the Group's policy to comply with environmental legislation currently in place, adopt responsible environmental practices and give consideration to minimising the impact of its operations on the environment. In terms of fuel, waste and travel we can report the following changes:


Dechra has recently reviewed the Company Car Scheme and amalgamated the two lower car bands where employees previously had a choice of over 20 car variants. This scheme change will result in over 55% of the Company car fleet converting to a vehicle with emissions of less than 119 CO2/km over the next two years. A further 19% of the fleet are vehicles of less than 160 CO2/km. The light commercial fleet of over 130 delivery vans has now integrated an alternative range of vehicles including small VW Caddy vans returning over 46 mpg, as opposed to the previously standard vehicle that delivered only 32 mpg. The HGV fleet has been limited to 53 mph and has subsequently delivered an improvement in fuel efficiency from 9.60 mpg to 9.92 mpg.

Dechra has chosen to maintain its 36 month lease term policy across both the Commercial and Company car fleets to ensure that the business has access to the continued developments in engine technology. Ongoing trials with a single deck trailer to replace double deck trailers are showing promising results. In addition, tractor units are being trialled with the view of replacing two of the existing units during 2012/2013; some of these have returned in excess of 10.5 mpg. The average miles per gallon as at the end of June 2012 and June 2011 were as follows:

HGV Fleet9.929.60

The HGV fleet complies with the Euro 5 standard, a European regulation which sets emission limits for each category of pollutant emissions, such as carbon monoxide, nitrogen oxides and combined emissions of hydrocarbons and nitrogen oxides.


In respect of travel, use of the video conference facilities is recommended as priority over travel. Video conference facilities are installed at NVS, DVP UK, DVP US, Dales and Uldum, Denmark. On the acquisition of Eurovet, video conference facilities were also installed at Bladel, the Netherlands. Whilst the Company appreciates that face to face meetings are beneficial the use of video conference facilities substantially reduces the amount of travel by car and aeroplanes.


In respect of waste, the Group is a registered member of a compliance scheme in respect of the Waste Packaging Obligations Regulations. In addition, NVS operates a recycling programme which ensures that all trunking depots (see NVS) return their general waste to the main depot at Stoke-on-Trent. The general waste is then sorted for collection by third party waste management companies. Dales also actively monitors its recycling rates. Dales continues to comply with, and exceed, effluent discharge standards into local water supplies, which is subject to random monitoring by Yorkshire Water Authority. Standard operating procedures are in place to ensure that all contaminated waste is disposed of under strict controls. Furthermore, all exhaust air is fully filtered from the manufacturing unit before discharge into the environment. DVP EU is legally obliged to submit an annual report to the Danish Ministry of Environment in respect of its environmental impact.

Aluminium cans
DVP EU*18.418.513.19.1

* data collated on a calendar year basis

† plastic and metal

DVP EU also monitors:

  • Annual energy consumption: In 2011, energy consumption totalled 1,474 MWh (compared to 1,748 MWh in 2010). The decrease is primarily due to an increase in outside temperature.
  • Water: In 2011, water usage totalled 2,533 m2 (compared to 2,372 m2 in 2010). Although there has been a slight increase in usage compared to the previous year, over a five year period the usage has remained relatively stable.

Dales has implemented and embedded a lean manufacturing strategy into its operations, thereby assisting the business in achieving a decrease in the time between placement of the customer order and end product shipment. The implementation of these lean manufacturing principles into the business has provided concrete results to date; specifically the time taken for a product to travel through the manufacturing cycle (from raw materials to stores as a finished product) has reduced during the financial year from an average of 16 to 15 days. Currently 22 employees are working towards a Certificate in Lean Manufacturing (Business Improvement Techniques), which will bring the total trained at the business to 200. Dales continues to work towards achievement of its ISO 140001 status.

The Group continues to review its environmental controls and encourage its own staff, suppliers and customers to achieve similar standards.

Health and Safety Policy

The Group attaches great importance to the health and safety of its employees and the public. The management is responsible and committed to the maintenance, monitoring and promotion of a policy of health and safety at work to ensure the care and well-being of its employees and on-site visitors. All of its UK sites are registered with the British Safety Council.

Each unit within the Group has an active Health and Safety Committee comprising representatives from both management and employees. The workforce nominates employee representatives. These committees meet on a regular basis to carry out a review of risk assessments and standard operating procedures as well as investigating any concerns raised by individual employees. Each site has the requisite number of employees trained in health and safety legislation.

For a number of years the Group has reported Lost Time Accident Frequency Rates ("LTAFR") as a non-financial key performance indicator (see KPI's). The LTAFR is a calculation of all injuries that would be statutorily reportable under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations ("RIDDOR"), normalised per 100,000 hours worked. This measure provides information to help monitor and control accidents and injuries to the workforce and is widely used as a key performance indicator throughout industry. Although the UK reporting requirement for over-three day injuries to workers changed to over-seven day injuries with effect from 6 April 2012, the Company is still obliged to keep a record of any accident if the worker has been incapacitated for more than three consecutive days. Therefore for this reason and for consistency the Company will continue to report LTAFR on the same basis as in previous years, that is over-three day incidents. Over the course of the last 12 months the number of accidents has decreased from 15 to 10, none of which resulted in a work-related fatality or disability. It is hoped to reduce this further during the 2012/2013 financial year.

Any material health and safety issues or incidents which occur are discussed in detail at both the monthly business unit board meetings and the PLC board meetings. The discussions include details of the incident that took place and also details of any remedial action which has been taken in order to mitigate or prevent a recurrence of the incident. Twice a year a comprehensive health and safety report is presented at each of the business unit board meetings and subsequently reported to the PLC board meeting the following month for discussion and review by the Directors.

The Transport Risk Committee assesses risks relating to the Group fleet and establishes control procedures, including regular licence checks of all individuals who are able to drive company vehicles, investigations into all accidents and a disciplinary procedure for speeding offences. During the year an online driver risk assessment was introduced for all Company car and Commercial vehicle drivers. The results of the assessment enables the Company to identify any drivers at risk and to provide further training to those drivers. All new Company car and Commercial vehicle drivers must complete the online driver risk assessment as part of their induction. It is intended that all drivers will be reassessed every three years. The investment so far in respect of the online driver assessments has had a positive impact on the number of insurance claims with both the frequency and severity of accidents having been reduced. This committee has met three times during the year. All issues raised by this committee are reviewed by the Board as part of the bi-annual health and safety review.

Simon Evans is the nominated Director responsible for Health and Safety policy.


We recognise that the success of the Group is dependent on our ability to attract, develop, motivate and retain skilled employees. For a number of years the Group has reported labour turnover as a non-financial KPI using a standard formula as follows:

Total number of leavers over a periodx 100
Average total number employed over period

The Group has established a target of no more than 15% Moving Annual Turnover; during the 2011/2012 financial year we achieved 16.10% (2011: 19.03%). This figure includes fixed term contract workers, of which there were six leavers during the year. Excluding these six leavers, the MAT for permanent staff is 15.5%, which is slightly over our target of 15% but below the national CIPD figure of 16.10%.

Dales is registered with 'Investors in People' and has continued in its commitment to people development through a number of apprentices embarking on the Modern Apprenticeship Scheme. Such employees are assisted in achieving National Vocational Qualifications ("NVQ") as part of their apprenticeship, usually work-based but also involving literacy and numeracy modules. The business continues to support several employees in attaining NVQ Level 2 Performing Manufacturing Operations and Certificate in Process Technology as well as Level 3 in Business Administration. Additionally, two employees are undertaking Foundation Degrees in Chemical Science and another individual is about to complete a Chartered Institute of Purchasing & Supply Level 6 Advanced Diploma. Training in Lean Techniques continues to be rolled out across the workforce and up-skilling key personnel continues with Team Leader and Management Training scheduled over the next financial year.

At NVS, one employee has completed the Institute of Payroll Professionals Degree, two employees have completed NVQ Level 2 in Customer Services and two members of the Transport Department have completed the International Certificate of Professional Competence ("CPC") course.

It is the Company's policy to provide equal recruitment and other opportunities for all employees, regardless of age, sex, sexual orientation, religion, race or disability. The Group gives full consideration to applications from disabled people, where they adequately fulfil the requirements of the role. Where existing employees become disabled, it is the Group's policy whenever practicable to provide continuing employment under the Company's terms and conditions and to provide training and career development whenever appropriate.

The Group continues to encourage employees to share in the growth of the Company through eligibility to participate in the SAYE Scheme. The SAYE Scheme is currently offered to UK employees only; the take-up for the 2011 grant was 15.34% (2010: 17.38%). Overall 29.45% of UK employees participate within the SAYE Scheme. The graph below shows the percentage of employees who have taken up the SAYE Scheme over the last five years.

Percentage take-up (Eligible Employees)

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