While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards: PS1: Social and Environmental Assessment and Management Systems PS2: Labor and Working Conditions PS3: Pollution Prevention and Abatement PS4: Community Health, Safety and Security PS5: Land Acquisition and Involuntary Resettlement An Environmental Impact Assessment (EIA) confirms that there are no protected species or natural protected areas at or near the project site. Indigenous Peoples were not identified in the project area. Cultural Heritage was not identified in the project area.

This is a Category B project according to IFC’s Environmental and Social Review procedures because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The project is located in a designated industrial zone to the north of Kolkata along a major highway. The nearest community is approximately two km away. The coal tar pitch expansion project is within the existing site, and the carbon black project site is adjacent to the coal tar pitch site. The 15-acre carbon black project land was purchased directly from small farmers based on the market price. There is no physical relocation. The EIAs for both coal tar pitch and carbon black projects indicate the operations meet IFC requirements. Mitigation measures for the potential environmental and social impacts have been identified and are incorporated into an attached Environmental and Social Action Plan (ESAP).

The key environmental and social issues for this project include the following: - Air emission control - Hazardous material management - Operation safety - Community safety - Land acquisition Himadri has presented plans to address these impacts to ensure that the proposed project will, upon implementation of the specific agreed measures, comply with the environmental and social requirements - the host country laws and regulations and the IFC Environment and Social Performance Standards and the World Bank Group (WBG) environmental, health and safety (EHS) guidelines. The information about how these potential impacts will be addressed by Himadri is summarized in the paragraphs that follow. Further information is provided in the attached ESAP, which is agreed upon by IFC and Himadri and will address the compliance gaps with IFC’s requirements. 1. Social and Environmental Assessment and Management Systems Environmental and social assessment: Himadri conducted an EIA for the coal tar pitch expansion project, while it contracted external experts to conduct an EIA for the carbon black project. Both EIAs confirm that operations will meet local regulatory requirements, IFC’s Performance Standards, and applicable World Bank Group (WBG) EHS guidelines upon successful implementation of the proposed mitigation methods. Besides the two EIAs, Himadri is also hiring external experts to conduct an environmental and social impact assessment (ESIA) to assess the comprehensive environmental and social impacts for its operations at the Kolkata site. In accordance with ESAP, Himadri will include the post-land acquisition evaluation for the carbon black project site in the ESIA. Environmental, health, and safety (EHS) management and organization: The technical division leads the EHS management for Himadri operations, which reports to the plant general manager directly. Himadri has passed the initial EHS auditing for the ISO 14001, and expects the final ISO 14001 certification be issued soon. The EHS management at Himadri is effective and the top managers have clear knowledge of the EHS performances. Training, monitoring, and reporting: Himadri has an established program to provide necessary training for all its employees in the field of environmental and social performances related to its operations. Himadri conducts routine environmental, health and safety monitoring for its operations. Himadri keeps its environmental and social performance records through its internal reporting structure. As indicated in the ESAP, Himadri will disclose some key environmental performance indicators at its front gate. 2. Labor and Working Conditions Human resources policy and management: Himadri has a Human Resources policy which specifies the terms of employment and working conditions. These include procedures for hiring and recruiting, probation, training, performance review, promotion, insurance, salary and compensation, resignation, lay-off and firing, leave and vacation, and retiring. Human Resources also work on the corporate grievance mechanism. The manager has open door policy to welcome employees to express their concerns freely. The government inspectors check its labor performance every year. There has been no strike during Himadri’s operational history. Working conditions: The Himadri employees work 48 hours per week. Employees only work overtime during emergencies, when the pay rate is doubled. The basic salaries for labors are approximately 10% higher than other similar plants in Kolkata region. Worker’s organization: There is no labor union at Himadri. The management allows collective bargaining. Non-discrimination and equal opportunity: The hiring and promotion are exclusively merit-based. As required in the ESAP, Himadri will provide a female friendly work environment in the new carbon black project, including flexible schedules, female locker/shower room, etc. to promote hiring female employees. Himadri will also prefer to hire the farmers who sold the lands to Himadri. Retrenchment: Retrenchment is not expected for this project. The company will hire approximately 150 new employees for new carbon black plant and the coal tar pitch expansion. Workers are also hired for construction through contractors. Occupational health and safety (OHS): The Technical Department leads the OHS function at Himadri. Operational safety is highly emphasized by the management team. There are effective OHS procedures and adequate personal protection equipment for each position, which are implemented strictly during operations. There is routine OHS training including annual refreshers for employees. There have been no fatal or serious accidents during the operational history of Himadri. The monitored parameters for the workplace conditions meet both local regulatory requirements and good international industry practice. The drinking water at Himadri is from onsite deep wells and is treated through reverse osmosis. The potable water quality meets WHO requirement. In accordance with ESAP, Himadri will enforce the OHS rules for its carbon black construction works and ensure the OHS management for the construction contractors meet the requirements of the good international industry practices. 3. Pollution Prevention and Abatement Raw materials and resource consumption: The major raw materials consumed at Himadri are coal tar (90,000 t/y), water (800 t/y), and furnace fuel (2,500 t/y). The water is from the deep wells onsite. At the present stage, Himadri purchases 6.06 million kWh electricity per year. Once the 12 MW power plant is put into operation, the entire electricity to be generated from the power plant will be exported to the grid. Environmental compliances: Coal tar distillation and carbon black manufacturing generate little wastewater. The effluents from the onsite wastewater treatment unit meet both local regulatory requirements and IFC guideline limits. The effluent is recycled in the processes. The sanitary wastewater is disposed onsite at the septic tanks. There are no process air emissions at Himadri. The monitored parameters for air emissions of heaters and ambient conditions meet both local regulatory requirements and IFC guideline limits. The EIAs for both coal tar expansion and the carbon black project predict that the emissions and effluents will meet both local regulatory requirements and IFC guideline limits upon successful implementation of the mitigation methods. Waste and byproducts: The sanitary wastes generated onsite are picked up by municipal contractors for disposal. Various oils are generated as byproducts during coal tar pitch manufacturing processes. All the oils are sold as raw materials to other industries. After the carbon black plant is put intro production, these oils will be used as raw materials for carbon black manufacturing. Operation hazard: The manufacturing of coal tar pitch and carbon black, as well as storage/handling of coal tar, coal tar pitch, and byproducts, poses certain level of dangers to the employees. Himadri conducted hazard operability (HAZOP) studies during the detailed designs for the carbon black project. Himadri is also working on the HAZOP for the coal tar pitch manufacturing processes. In accordance with ESAP, Himadri will also conduct periodic operational safety audits and updates of the HAZOP when the processes are modified. Fire prevention and emergency response (ER): There is adequate fire fighting equipment onsite with proper maintenance. There is 24-hr onsite clinic for both routine first aid and emergency care. The external fire trucks and ambulance could reach site in ten minutes. Himadri has an emergency response (ER) plan and conducts routine drills for fire fighting and emergency response. Greenhouse gases (GHG) and energy efficiency: At present stage, Himadri generates approximately 7,400 tonnes carbon dioxide (CO2) per year. Once the carbon black project with the 12 MW captive power plant is put into operation, Himadri will generate approximately 125,000 tonne CO2 per year. Himadri has several on-going programs to improve energy efficiency and has an annual target to reduce energy consumption per unit product. The projected energy efficiency for carbon black manufacturing meets IFC EHS guideline’s industrial benchmark. 4. Community Health, Safety, and Security Community health, safety and security: The nearest community is approximately 2 km from Himadri. Coal tar pitch and carbon black manufacturing at Himadri have limited impacts to the community. All the raw materials are transported to the site by road from a railway station 7 km from the site. The coal tar pitch products are transported to the customers by Himadri special road tanker fleet. Emergency preparedness and response: Himadri has ER plans available and conducts routine drills for fire fighting and emergency response. The Himadri tanker fleet has potential impacts to the communities along the transportation routes. In accordance with the ESAP, Himadri will set up defensive driving programs for its tanker drivers and routinely inspect the road tanker safety conduction. Security personnel: Himadri hires external agency for plant site security. The security guards conduct security monitoring and routine ID check at the gates. The security personnel do not have any weapons. For serious security issues, Himadri reports directly to the local police station 5. Land Acquisition and Involuntary Resettlement Land Acquisition, Resettlement, and Compensation: The land at the project site is allocated to the farmers by the government in small pieces. Most of the land is within the size of half to one acre. Himadri purchased small pieces of lands adjacent to its site in 2006 for the carbon black project. There are no houses on these pieces of land. All the land is purchased directly from the farmers based on market prices. There is no involuntary economic displacement. All the transactions are based on willing buyer / willing seller mechanism. The farmers sold the land near the highway at a higher price to Himadri. They can use the money to buy larger pieces of land away from highway. There have been no disputes during or after these land purchases. As required in the ESAP, Himadri will include a post-land acquisition evaluation in the proposed ESIA. Himadri will also hire the farmers who sold the land as priority for the carbon black project.

Himadri has an established community engagement program. Its management team meets with the local community leader regularly to understand the concerns and requirements from the local community. Himadri also published the relevant managers’ phone numbers at its front gate for local residents to contact the managers directly for their grievances. As required in the ESAP, Himadri will hold another formal public consultation during the ESIA process. Himadri set up a foundation to help the local disadvantaged communities. The major tasks of the foundation include social reforms, economic self-reliance, local infrastructure, family health, and education.

Himadri will disclose this document together with ESAP in local language at ‘Singhal Phathan Samabay Krishi Unnayan Samiti’, located at Address Gram: Singhal Phathan P.O-Dewan Bheri, P.S-Singur, Dist-Hooghly, West-Bengal, India, Kolkata, India. Please contact the following for inquiries or concerns about the environmental and social impacts of this project. Contact Person for Himadri Name: Dr Soumen Chakroborty Address: Himadri Chemicals & Industries Ltd, Mahistikry unit, Mahistikry, Haripal,Hooghly, West-Bengal, India Phone: 09836884784