28/02/2019
To our stakeholders:

I am pleased to confirm that CYPET Technologies Ltd reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and day to day operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Constantinos Sideris
Managing Director.

CYPET Technologies Ltd stands by and promotes the Universal Declaration of Human Rights. The Company’s Code of Conduct prescribes the behavior that shall be adopted by all employees in order to ensure that human rights are protected and each individual stakeholder is shown equal and absolute respect. The company’s Code of Conduct requests that all employees treat others fairly and respectfully. During recruitment or employment, no discrimination of any kind in addition to any abusive, offensive or harassing behavior is allowed by any of the company’s employees.

Our business partners and suppliers are assessed prior to initial business engagement on Human Rights related issues. The assessment of Human Rights related risks and impact in industry sector is reviewed once a year, an assessment which forms part to the ISO Accreditation.

CYPET Technologies Ltd has set a specific goal for the upcoming year in relation to the Human Rights. The goal is to ensure further compliance from our suppliers with the use of a signed form. We hope that this form will enable us to raise awareness as well as to motivate our suppliers to further engage in the promotion of the Universal Declaration of Human Rights.

CYPET Technologies has appointed the Human Resource Manager with the responsibility for the protection of Human Rights within the company. The Human Resource policies and procedures handbook further references the Company’s Code of Conduct section which specifically refers to the employee’s behavior in relation to discrimination, abusive, offensive or harassing behavior. The Human Resource Manager has set specific mechanisms for both awareness and grievances. Information is shared during the induction of an employee and throughout its career progression in CYPET Technologies, as well as during specific meetings that are organized in order to ensure employees are always alarmed of potential Human Rights Violations.

CYPET Technologies employees are further encouraged throughout their career at CYPET Technologies to whistle blow incidents of human rights’ violations. CYPET Technologies Ltd responds to a human rights violation with an engagement of the affected parties and the review of the incident. According to the findings, the management will proceed to enforce further consequences

Currently there is no progress to be reported since the last reporting period as this is the first time CYPET Technologies Ltd launches a Communication on Progress. CYPET Technologies deals with incidents in Human Rights violations by recording the incident and further taking adequate action. Employees are continuously alerted with regards to potential human rights violations and continuously reminded of the potential available whistle blower channels. Actions taken in response to a human right violation may vary from a disciplinary action to an employee’s dismissal depending on the cause, the magnitude and the intention.

Previous incidents are reviewed periodically by senior management in order to take appropriate actions and further eliminate the risks of recurring incidents. In addition, the senior management frequently reviews its human rights policies against previous incidents to understand areas of improvement or to further improve the narrative. In doing so, the company reviews other business standards or relevant articles so as to focus on continuous improvement in this area. Currently, there are no external audits planned on Human Rights performance.

CYPET Technologies endorses the ILO Declaration of Fundamental Principles and Rights at Work, which include the freedom of association, the elimination of all forms of forced or obligatory labour, the effective abolition of child labour and the elimination of discrimination in employment and occupation.
CYPET Technologies has a written Human Resource Policy that refers to all the rights and responsibilities of their employees, together with their compensation and benefits. CYPET Technologies Ltd has further assessed its labour-related risks in the industry sector and countries of operation. Although the labour related risks in regards to the industry are not high, they could be considered as high in the countries where CYPET Technologies has additional operations and the countries from where it sources its main components for its products. The company will continue to investigate and go further downwards its primary and secondary operations in its Supply Chain in order to assess further the labour related risks.

CYPET Technologies has formulated a coherent code of conduct which is signed by all members of staff. Channels for whistleblowing are provided to the employees together with sufficient training in order to be able to identify and report a labour violation. Labour violations are treated as a disciplinary offence which could result to an employee dismissal.

In the upcoming year, CYPET Technologies will launch its recommendation to business partners and suppliers to adhere to the Global Compact Principles. This is deemed to be a project which is expected to last for approximately two years’ time towards its completion.

CYPET Technologies is an SME with currently less than 100 employees worldwide. Due to the size of the entity the human rights policies and procedures are set by the management and managed by appointed personnel. Any participation in international framework agreements will be in the company’s scope once the company grows sufficiently in size.
CYPET Technologies has implemented labour policies and procedures in order to address labour risks and respond to labour violations. These include the following:
1. A coherent Code of Conduct is signed by all employees and applies to all employees and states clearly that discrimination is strictly prohibited.
2. All employees are trained for Health and Safety purposes during their induction. The company has a Health and Safety induction on their first day of employment and frequently runs sessions of First Aid at work. Further, the company has a set Health and Safety committee which consults with employees in relation to Health and Safety matters and ensures that all related matters are properly raised, discussed and resolved. The company is further ISO accredited in respect to the Health and Safety.
3. The company frequently reviews its approved wage payment scales against actual agreed wages in order to ensure that employees are equally remunerated for comparable work completed.
4. The Human Resource consults with employees on a frequent basis so as to identify potential areas of labor violations. The company’s written policy on consultation is an open door policy which encourages openness and transparency with the employees of the company, particularly in reporting labour violations as well as addressing the concerns of the employees.
5. As part of the company’s health and safety and the employees’ well-being, the company reviews periodically the yearly distribution annual leave of employees in order to suggest time off where long periods without time-off are identified.

CYPET Technologies monitors and evaluates performance in the following ways:
1. Reviews prepared demographics of its employees in order to assess the balance of workforce in these matters.
2. Reviews past incidents of labour violations in order to identify recurring incidents or as to identify areas where further monitoring and action is required.
3. Reviews its salary scales against demographics in order to ensure that there are no deviations which could be as a result of diversity.
4. Consults with employees throughout their career progression, including during one to one, appraisals and exit interviews so to provide them with the opportunity of the one to one chat and enable them to discuss potential issues of labour violations.

CYPET Technologies is in progress of assessing its environmental footprint and impact. The company has assessed the savings of environmental footprint from the use of its products compared to other similar products. The company plans within the next upcoming year to formulate and finalize its policy on in-house corporate environmental sustainability. A further step will be to consult with its business partners and suppliers to adhere to the Global Compact Environmental principles. The long term plans include addressing the issue of environmental footprint further down its supply chain.
CYPET Technologies plans to be certified for the ISO 14000 certification in the forthcoming years. Two members of the senior management are expected to attend training and accordingly complete the necessary procedures according to the certification.

CYPET Technologies specifically addresses the issue of the environmental management during the induction of an employee. The initiatives taken by the company which are expected to be followed by its employees include recycling (plastic, paper, batteries and electronic equipment) and reduction of resource consumption particularly with respect to energy and paper. CYPET Technologies further promotes the method of cycling or walking as a transportation means to work as its premises are equipped with showers that are accessible by all employees.

CYPET Technologies has an in house R&D Department which focuses on improving its processes and products. Two of the main criteria for the R&D team include the development and diffusion of environmentally friendlier technologies with one being the energy efficiency and the other the reduction of materials used for its products.
The responsibilities for the environmental protection within the company has been allocated to various members of staff according to their overall and day to day responsibilities. The company continues to explore opportunities to reduce the environmental footprint in its business operations and its plan for the forthcoming years is the direct monitoring and controlling of the company’s environmental performance, particularly in the areas of use of paper, electricity and water

CYPET Technologies has assessed its environmental impact from its current operations as low. Further, the company maintains a Health and Safety accident record log book which records all incidents including incidents that might be harmful for the environment (i.e. from chemical substances). The incidents are reviewed from the Health and Safety Committee and the processes are audited on an annual basis by the ISO Committee.
CYPET Technologies is an SME in terms of size. The management considers that due to its size, currently the external audits of environmental performance are not yet required as internal staff are responsible for monitoring and evaluating environmental performance.

CYPET Technologies has assessed the risk of corruption and bribery in both its industry and the countries of operation, based on credible available data. For the company’s industry, CYPET Technologies has used the analysis of the Organization for Economic Co-operation and Development (OECD) on bribery in international business. CYPET Technologies operates in the manufacturing sector where as per the findings of the OECD research, the percentage for corruption is less than 10%. Whilst the company operates internationally its Head Office is based in a low risk environment as Cyprus is ranked as the 38th least corrupted nation according to the Trading Economics index. The risk has been assessed as high in the countries where the company markets and sources its main products as well as in the based country of its subsidiaries (Trading Economics, 2019).
CYPET Technologies Ltd supports the UN Convention against Corruption. The company’s Code of Conduct which is signed by all members of staff strictly prohibits all forms of corruption, including extortion and bribery, illustrating its zero tolerance for such incidents. There are sessions for the continuous awareness for corruption which they also address the method of identifying corruption and whistleblowing.
The company further adheres to all transparency measures taken by the regulations of the governed countries where it operates and reports its financing activities according to the International Financial Reporting Standards so as to further enhance accountability and transparency.
CYPET Technologies has set specific goals in the area of anti-corruption for the upcoming year which include the policy of recommendation to business partners and suppliers in order to adhere to the Global Compact anti-corruption principles. Further to this, CYPET Technologies Ltd intends to follow the OECD Good Practice Guidance on Internal Controls, Ethics and Compliance measures so as to prevent and detect foreign bribery (OECD, 2010). Finally, a further target for the upcoming years, will be the development of a protocol in order to guide staff in situations where they are confronted with extortion or bribery.

CYPET Technologies has allocated the responsibilities in respect to anti-corruption within the company. The members of staff are made frequently aware of the available channels in respect to whistle blowing so as to be able to initially assess a potential bribery and corruption risk and respond to that risk accordingly. The company has appointed personnel in respect to these matters, which have further been externally trained by recommendable and credible organizations. Currently there is no industry initiative in Cyprus in respect to anti-corruption in the manufacturing / engineering sector. The company though maintains a strong Code of Conduct and provides official training to its employees in respect to anti-corruption, money laundering and bribery. A suggestion box has been considered and will be designed and implemented within the forthcoming periods.

Compliance is actively promoted as personnel is assigned with the responsibility of observing the ethics and program at all levels of the organization. The conformity guidance is given as a top down approach as the tone is set from the top leadership and transits to all phases of employment including recruitment, evaluation, training and remuneration. Management actions for nonconformity are specifically stated in the Human Resource Policy of the company.

CYPET Technologies monitors performance on anti-corruption based on a top down approach. At higher level is monitored with the review of the anti-bribery and corruption index for the industry and the country the company operates. Any relevant developments in international and industry standards are reviewed in order to assess further the risk. At a lower level it synthesizes its information by performing interviews with the most knowledgeable people in the company in respect to anti-corruption and bribery which includes the senior management and the legal and compliance officers. By analyzing this information, the company is able to determine using internal and external factors its exposure to corruption, in addition to taking account factors such as the size of the company, nature and volume of transactions and interactions with other companies.
The Company’s Board of Directors reviews the anti-corruption program in order to assess its effectiveness and for the purpose of further taking corrective action where appropriate. Under the direction of the Board of Directors and senior management, and by taking into account that the company’s size, the corporate compliance has been assigned to a particular member of the management team with the objective to enhance its presence and purpose in the company.