November 20, 2018

To our stakeholders:

PI industries Ltd. (PI) is a leading manufacturer of Agrochemicals in the Indian Agri business space for over seven decades. Over the years, the company has been on a steady growth trajectory owing to its sustainable business approach. The biggest challenge faced by businesses today is maintaining the balance between progress and the planet’s health. It is incumbent on every company to address challenges such as climate change, depleting natural resources, especially water, as well as rising energy demand and environmental pollution. While it is imprudent to abandon development and growth targets, the solution lies in reducing and retarding the impacts of problems in question within the framework of rational and systematic approaches. Over the years, PI has consciously adopted technologies and solutions to manufacture products and provide services that are in harmony with the environment. This is the first COP from the stable of PI Industries and I am happy to share it with all of you.
In the fast evolving global landscape, sustainability has also progressed. It is no longer enough for a company to focus on its direct footprint. Achieving economic, social and environmental performance in today’s dynamic business scenario requires a long-term corporate social responsibility and sustainability strategy. As part of our social responsibility and commitment to society, we established PI Foundation in the year 2012, to spearhead various initiatives on the social front. The key focus groups are neighbouring communities across our manufacturing locations and the farming community across the country, who continue to provide us an opportunity to serve them. Keeping in line with UN Sustainable Development Goals (SDG), we have undertaken a host of measures in the field of healthcare, hygiene and sanitation, education, women empowerment, skill development, sustainable agriculture practices and addressing water scarcity in our areas of influence. As an enterprising & law abiding unit, PI will continue to dedicate sustained and concerted efforts to propel its social agenda while at the same time creating economic value to its stakeholders.

Now, on behalf of PI Industries Limited I am pleased to reaffirm our continued support to the Ten Principles of the United Nations UN Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.
In this maiden Communication on Progress, we describe our actions to continually improve the integration of the UN Global Compact and its principles into our business strategy, culture and daily operations. We also commit to sharing this information with our stakeholders using our primary channels of communication.

Yours Sincerely,
For PI Industries Limited,
Mayank Singhal
Managing Director

At PI Industries limited adherence to human rights principles is enshrined in “Code of Conduct” policy. This policy lay’s the framework for non discriminatory practices based on gender, ethnicity, religion, age etc. We provide equal opportunities for growth to all our employees. Their remuneration is commensurate to the nature of service rendered without any discrimination. The “Code of Conduct” clearly states that we need to take utmost care while selecting our suppliers and business partners in order to ensure that our partners understand and respect our commitment to Human Rights principles.

Our Sustainability policy clearly states that we will be conducting our business within the ambit of Responsible Care Principles and will also call upon our partners to adopt the same. Our Sustainability Model has key objectives to address Sustainable Development Goals, which includes: Poverty Alleviation, Clean Water & Sanitation, Quality Education, and Good Health and Wellbeing.

At PI we have ensured that all our employees are treated equally without any kind of discrimination. The HR committee is entrusted at each of our sites to ensure that none of our employees are subjected to any sort of discriminatory practice. We have zero-tolerance approach towards any kind of discrimination. Our employees have been empowered to approach the HR committee, if they cite any kind of discriminatory practice. They can directly approach them or can anonymously put in their grievance. An in house application titled “Human Resource Service Management” has been developed wherein the employee can login their concerns. The concerns need to be addressed within specific time duration else it will be suitably escalated. We have encouraged our employees to provide their suggestions in order to make our systems robust. They are free to send in their suggestions either through email or deposit in drop boxes. In order to ensure that all our employees are well aware of their rights and duties we have made it mandatory for all to undertake the training on “Code of Conduct”.

We have a strong whistle blower policy which empowers our stakeholders to report any kind of abuse with respect to human rights or any other discriminatory practice. A committee headed by our Executive Director is in place to check the veracity of these complaints and to suggest suitable remedial measures accordingly. Adherence to Human Rights principles is not an option for our stakeholders but mandatory conditions as we have made it a part of our business requirement. All our suppliers need to accept and endorse the “Code of Conduct for Suppliers” with a commitment for upholding the human rights principles.

During the reporting period we haven’t received any complaints regarding human rights violations either internally or externally. Any complaint, if received, needs to be immediately brought to the attention of top management in the Monthly Coordination Meeting. A discussion is ensued on the reported violation along with briefing on course of action and remedial measures undertaken. All deviations with respect to “Code of Conduct” are reported to the Board every quarter and yearly data is published in the annual report.

There are no pending or new litigations against the company with respect to human rights. The company has never paid any fines in the past for human rights violation.

Please refer: Page 82 of PI Industries Annual Report 2017-18 (https://www.piindustries.com/Media/Documents/PI%20IND_Annual%20Report%202018_for%20web.pdf)

PI Industries Limited is one of the progressive and highly employee oriented organisation with a transparent & open employee-employer relationship. We recognize the freedom of assembly, including the right to form any representing forum and the right to become member of any labour union for collective bargaining.

We respect and strictly adhere to the provisions of ILO convention prohibiting forced and compulsory labour. Our commitment to this principle finds mention in our “Code of Conduct”. We are strongly committed to the provisions of ILO convention concerning Minimum Age for Admission to Employment & the statutory provisions of the country we operate with respect to child labour. This is mandated by our “Code of Conduct” Policy. We require all our vendors and business partners to adhere to these conditions.

PI Industries is an equal opportunity provider and does not discriminate against any person because of their gender, caste, religion, age (within statutory limits), marital status, nationality, ancestry, ethnicity, geographical origin, sexual orientation, disability or any other trait protected by law, with respect to any terms of employment such as hiring, promotion, transfer, compensation & benefits, career development opportunities, etc. As a company policy we provide opportunities to people with disabilities in accordance to government regulations. All employment related decisions are strictly based on the merit of the person and not influenced by their personal characteristics/trait. As an organisation, we value diversity and encourage fairness and justice. We create opportunities for every employee in our company to work, learn, and live free from discrimination and victimisation. We will always combat discrimination throughout the organisation and will use our position of influence, wherever possible, to help overcome discriminatory barriers. We expect our business partners to strictly adhere to these principles.

We have formed various committees wherein our workforce can collectively bargain for improving the existing conditions. Safety committee is formed wherein there’s an equal representation of workers and management staff. Any pertinent issue with respect to environment management, industrial hygiene, personal & process safety & welfare is brought to the managements notice for deliberation and further action. Another such committee is the Canteen committee that is responsible for the subsidised food services provided by the company. Workers put in their demands with respect to the kind of food and services that they require which is deliberated upon by the committee before any decision is taken. We also welcome suggestions from our employees and listen to their grievances. For this we have provided them with a platform named “Human Resource Service Management” wherein they can raise their concerns and expect a time bound redressal. We had labour union in the past but over the years the need for the union to exist for collective bargaining has diminished as we provide remuneration to our employees which are much higher than the industry average in our class and our region and which is also much higher than the minimum wages prescribed by govt. Another reason for the non existence of union is due to the no. of varied platforms that we have provided to our employees to raise their concerns and grievances.

At PI safety and health of our employees is of prime importance. We have been constantly striving to provide a safer work place to our employees, whom we consider as our greatest assets. These include providing engineering controls at various stages of operations, the right PPE’s, relevant trainings etc. The business that we are in requires a very high degree of process safety measure and to ensure that, we have created a new process safety cell within Environment, Health and Safety (EHS) Assurance department where highly skilled professionals are engaged in identification and mitigation of process hazards. As a proactive organization we have started the process of recording and investigating “Process Safety Near Miss” along with general “Near Miss” which we were capturing already. We have found that analysing and taking corrective action against process safety near miss makes our systems more robust and fool proof. We map all our leading and lagging indicators and accordingly take actions to improve our work environment.
The Company has set a standard of 'zero tolerance' for harassment. We views all incidents of 'sexual harassment', very seriously and encourage employees to report any incidents of sexual harassment to the Internal Complaints Committee (ICC) known as Prevention of Sexual Harassment (POSH) Committee. The committee meets every quarter and reviews all the cases of sexual harassments and take actions. All employees mandatorily need to undergo training on POSH.
As a company policy we have decided to only hire people who are 18 years or older in order to ensure that no child is employed in our operations. This process also extends to our contracted labour suppliers. To ensure that this policy is not violated we have strict vetting of documents submitted in support of age proof by our employees as well as the contract labour employed in our organization. Till the vetting is completed we do not allow any person to enter our premise.

Employees are free to leave the company at any time and we don’t offer any benefit as leverage to force labour.

At our company we objectively evaluate our current employees and all future prospective employees. Detailed job descriptions along with roles and responsibilities are prepared for all the positions. Prospective employees are made to undergo a selection process that is solely based on merit. There’s no discrimination based on religion, sex, ethnicity, race etc. The selected employees are provided with Key Result Areas (KRA) for which the Key Performance Indicators (KPI) is mapped at the beginning of the year. The employee is expected to deliver on these KPIs. Half yearly reviews are conducted at regular intervals to map the progress of the employee Vis a Vis the KPI. Based on the performance the employee is rewarded. The remuneration paid to the employee is befitting the role and responsibility given to him/her and has no linkage to any other parameter. Discriminatory practices are not all tolerated at the workplace.

To ensure that all our employees are in sync with the set company standards, we impart regular training through internal and external agencies. It’s mandatory for all our employees to undergo specific training which include “Code of Conduct” and “Prevention of Sexual Harassment at Workplace”, basic safety & fire fighting as part of induction procedure.

We require all our business partners to strictly adhere to the labour principles endorsed in the “Code of Conduct for Suppliers”. To check their compliance we audit their facilities and records on a routine basis. We have a whistle blower policy wherein any discretion on the accepted terms and conditions could be reported. The reported discretion is investigated through a committee headed by Executive Director.

Our diverse workforce is a testimony to the non-discrimination policy adopted by the company. 0.5% of our workforce consists of people with physical disabilities.
All our units are OHSAS 18001:2015 certified which clearly depicts the commitment of the company to provide a safe and healthy work environment. As a testament to the labour practices deployed at our units we have been awarded with “SHRESTHA SURAKSHA PURASKAR” by National Safety Council (NSC).
During the reporting period of COP we did not receive any incidents of violation of labour principles either internally or externally. The company has never been fined for any violation of labour principles either in the past or during the reporting period.
As a Responsible Care company we ask our suppliers to strictly adhere to the labour principles and routinely subject them to audit. Our partners are required to comply with audit recommendations to continue business with PI.

For further information Please refer: Page 81 of PI Industries Annual Report 2017-18 for further information
(https://www.piindustries.com/Media/Documents/PI%20IND_Annual%20Report%202018_for%20web.pdf)

At PI we have given prime importance to the surrounding Environment in which we operate and have made all possible attempts to mitigate any impact on it due to our operations or actions. All our business decisions are guided by our EHS (Environment Health and Safety) and Sustainability policy which is endorsed by our top management. To understand the impact of our operations we have developed the Aspect Impact register based on which we have undertaken various mitigative measures to protect the environment. Protection of Environment through sustainable practices is a part of our employee “Code of Conduct”. Each and every employee needs to adhere to this code. Business objectives for the long term are taken as the base to decide the priorities and goals. The business objectives are translated as yearly objectives and action plan is developed to improve the EHS performance which includes development of management programs, technological up gradations, Research and development to implement policy of 3 R's ( Reduce, recycle and Re-use) to achieve continual improvement plans as directed by EHS policy. Business objectives are translated to functional objectives and KRA of the individuals. Business objectives are identified in the area of energy reduction, water consumption, waste reduction, increase in renewable energy usage etc. In the coming financial year the company has taken some aggressive targets in the aforementioned areas.

The company closely works with regulatory authorities in developing environment policies and guidelines for furthering the cause of environment. As part of Responsible Care Program the company is actively involved in the dissemination of knowledge to other industry peers.

The business objectives present long term as well as short term goals. The long term objective is to build the new technologies and undertake research on new synthesis routes which are less pollution intensive. While the short to medium term focus is on waste reduction by recovery, recycling and reuse by optimization of processes. To ensure that these objectives are realized a cross functional team is formed through the initiative “STRIVE”. The team meets on a monthly basis and discusses the progress made against each objective. The Environment Management System is developed and certified as per provisions of ISO 14001, 2015 and it addresses all concerns pertaining to releases to air, water & land during normal operations and in time of emergencies. We have established dedicated environment laboratories at all our sites.

As part of water conservation project we have installed roof gutters that carry the rainfall from the rooftops to the underground storage tanks. This water is used as make up water for cooling towers or for horticulture purpose. All our units have state of the art wastewater treatment facility. We have lately introduced the concept of having a separate Sewage Treatment Plant (STP) for treating domestic waste instead of treating it along with industrial effluent. Owing to this separate treatment facility we are able to reuse the treated water for horticulture purpose which otherwise was wasted in the earlier setup. As part of tertiary treatment we have installed Reverse Osmosis (RO) and Ultrafiltration for increased recovery of waste water. Our long term goal is to be a Zero Liquid Discharge (ZLD) unit. We have installed continuous online monitoring systems to analyse the quantity and quality of the discharge from our units.
To tackle fugitive emissions condensers with chilled brine are provided to condense out fugitive emissions and reduce their concentration before they are directed to scrubbers. We have also provided adequate scrubbing systems to scrub out fugitive emissions and prevent their entry into the atmosphere. Our entire operation is carried out in closed reactors. Further we carry out pneumatic transfer of liquid material into reactor to arrest fugitive emissions. For solids we have powder transferring system in place. We have installed online VOC (Volatile Organic Compounds) monitoring system across our plant periphery to check for fugitive emissions. Solvents form a major part of our raw material. We have designed solvent distillation units that aid in maximum recovery of solvent. Besides these measures we carry out monitoring of our work zone to identify the level of concentration of fugitive emissions.
In order to control atmospheric emissions we have provided stacks of adequate heights for effective dispersion of pollutants. We have installed continuous online monitoring system in our rotary kiln incinerator to track the emission concentration. We carry out regular monitoring of stacks and ambient air through external agencies to track the level of compliance with respect to license standards. We have mapped our carbon footprint considering direct and indirect emissions and have charted out steps to reduce them. To reduce the carbon emissions the company has undertaken the following initiatives:
• Increasing the size of tankers used for bulk transportation from 10 MTs tanker to 16/21 MTs tankers for various items like Solvent CIX, Cyclohexanone, Toluene, N-Butyl Acetate CS Lye etc.
• Changing the packaging style of items like Bromine, KOH, Acetonitrile from bag / bottles / Drum to tankers / ISO tanks.
• Buying Chemicals like Thionyl Chloride (TC), Formaldehyde 37%, Glyoxylic Acid 50%, in tankers instead of drums.

We have identified and budgeted, each waste generated from each step of production process. Any deviation from the budgeted quantity is immediately brought to the notice and corrective actions are undertaken to prevent any wastage. The wastes are segregated and stored in dedicated storage space. Wastes which need to be incinerated are sent for incineration, while that which can be recycled like Used Oil, Spent Catalyst etc. are sent for recovery to authorized recyclers. E-waste is sent to authorized recyclers for recovery of precious metals.

In order to improve the energy efficiency of our manufacturing facilities various measures were undertaken during the reported year. Some of the measures are enlisted below:

• ISO 50001:2011 Energy Management System (EnMS) Certification for Jambusar site.
• Variable frequency drives were configured with pressure transmitter to regulate and maintain constant pressure in secondary pump of chilled water & cooling water for energy conservation.
• Steam trap system and condensate recovery system to maximize the condensate recovery and heat recovery from waste steam.
• Automatic load controllers were installed in chiller & brine unit to optimize the power consumption.
• Hot air generation from low pressure Root blower in place of High pressure compressor for energy conservation
Installed shell and tube heat exchanger condenser in place of PHE in chilled water system to improve the heat transfer and reduce the power consumption of the compress.
• 250 KW roof top solar power plant was installed at R&D facility in Udaipur.
• Replaced 125W HPMV (High Pressure Mercury Vapour) Lights in plant area with
45 W LED Lights to reduce energy consumption.
• Replaced conventional tube lights with LED in administrative office for energy consumption reduction.

On the technological front many new environment friendly technologies are introduced an example of which is, “High Pressure Air Oxidation” system for one of our products which is an eco-friendly technology and we are the first company in India to do so for oxidation processes using solvents. Another example is high pressure carboxylation. Continuous technological improvements are under progress at R&D stage including introduction of coil reactors, flow chemistry, continuous processes etc. New processes are developed at R&D stages for existing molecules to reduce the wastes like IPS amine process, recovery of solvent from waste streams to recycle the solvents in processes etc. As part of product stewardship we have put in plans to replace the products which are highly hazardous (Red Triangle Pesticides, LD50< 50 mg/Kg) with safer products.
As part of our sustainability initiative we have registered under “Together for Sustainability” with ECOVADIS, an agency that rates supplier companies based on their reported sustainability parameters within the ambit of supply chain.
To check the performance of our outsourcing partners we collect the data from them on various environmental attributes on a quarterly basis. Based on these collected data we analyse their performance Vis a Vis their license conditions and any deviation is called upon for scrutiny. All our partners are bound by the provisions of “Code of Conduct for Suppliers” and have to strictly adhere to them.

We have a well established team comprising of environment professionals at the site and corporate that is entrusted with the task of maintaining & advancing environmental objectives. These professionals act as a guiding force for environment management. They conduct regular training sessions on various environmental aspects for the benefit of rest of the employees. Each of our employees is tasked with the responsibility of making appropriate contribution within their respective spheres of influence for improvement of environment. It forms a major part of their year round performance review.

Based on the measures adopted in the previous financial year, the company was able to demonstrate significant progress on numerous environmental attributes. Our water consumption per tonne of the product reduced from 8.67 Kl/Tonne to 8.13 Kl/tonne, while energy consumption reduced from 12.55 GJ/Tonne to 11.61 GJ/Tonne (Refer Page 21: PI Industries Annual Report, 2017-2018). Hazardous waste generation reduced from 0.136 MT/Tonne to 0.111 MT/Tonne while carbon emissions reduced from 1.604 MT/Tonne to 1.570 MT/Tonne for the reporting period (Refer Page 21: PI Industries Annual Report, 2017-2018). These figures bear testimony to the efforts put in by the company to improve upon the environmental footprint.

Our sustainability efforts on the supply chain front have earned us a “GOLD” category rating with a score of 62 points out of total 100 (Refer Page 21: PI Industries Annual Report, 2017-2018). We are among the top 12 supplier companies in the world from a group of 150 registered suppliers in the agrochemical sector.
Our facility was audited by a renowned global firm in accordance with the criteria established by “Together for Sustainability” (TfS). PI industries managed to secure 100% in the audit indicating that we are fully aligned to the standards set by TfS. Together for Sustainability (TfS) is a joint initiative of chemical companies, founded in 2011. TfS has developed and implemented a global supplier engagement program that assesses and aims to improve sustainability sourcing practices, including ecological and social aspects. The TfS approach consists of two core elements:
• TfS Assessments conducted by the French company EcoVadis, who provides with a scorecard on its shared, web-based collaborative platform[2], and
• TfS Audits, conducted by independent audit companies approved by TfS

Every month there’s a review on the progress of environment objectives at the plant level and at the top management level. Deliberations on future course of actions are discussed. All our sites are ISO 14001: 2015 certified. Our Environmental Management System (EMS) is audited by an external auditor once a year. Besides, this our units are audited by our customers to check the level of compliances with respect to statutory and other relevant standards. The findings of these audits are shared with the top management along with action plan. These audits help to check the robustness of our systems. The company has been awarded numerous awards for its effort on Environment Management like Golden Peacock Award, Frost and Sullivan Sustainability Award etc.
During the reporting period no environmental incidents occurred at our sites. Any environmental incident needs to be reported to our top management within 12 hours of occurrence along with a First Information Report (FIR). A detailed investigation with a cross functional team is carried out to identify the root cause of the incident along with corrective and preventive measures.

The company was neither subjected to any fine nor was any legal case filed due to damages to environment.

We have zero tolerance for corruption in any form.

At PI, we comply with applicable laws and policies, without exception. To instil a strong, responsible culture within our workplace, PI recognizes “Integrity” as one of the four main values that reflect who we are as a company and guides our daily actions and decisions. Our Code of Conduct clearly states our expectation from our employees with respect to bribery and corrupt practice. We have an anti-corruption and anti-bribery policy in place that applies to all individuals working for PI and all subsidiaries of PI at all levels and grades. Offering or receiving gifts in any form is against our company policy. We have strict policies against insider trading. At PI we carry out a due diligence to gauge the background of our business partner’s prior to any official engagement.

To ensure that all our employees understand each and every aspect of our commitment with respect to anti-corruption policies we provide mandatory training on “Code of Conduct” as part of induction. Besides this, training is conducted on a regular basis to emphasise the point that the company has zero tolerance for any deviation from expected standards on corruption. Under the Whistle Blower Policy we have provided a platform to report any digression from the established standards. The identity of the person reporting the deviation remains anonymous. Based on the plaint received, actions are initiated to check the veracity of claims. The report of these investigations is shared with top management. We have carried out extensive risk assessment to identify the threats to our business based on non compliance to fair business practices. We undertake regular internal and external audits through reputed firms to check for any anomaly in our business. Due diligence is carried out before we enter into any agreement with any supplier/vendor that can seriously affect our business interests.

The findings of the internal and external audit are deliberated by the top management. During the COP reporting period no case of anti corruption was reported either internally or externally. There are no cases pending against the company with respect to corruption charges.