While all Performance Standards are applicable to this investment, IFCs 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. If IFCs investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards

PS 1 – Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and working conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 – Community Health, Safety and Security
PS 5 – Land Acquisition and Involuntary Resettlement
PS 7 – Indigenous Peoples
If IFC’s investment proceeds, IFC will periodically review the the project’s ongoing compliance with the Performance Standards
The Project involves expansion within the existing plant premises and there will be no loss of habitat.. There is no forest land (reserve/protected) in the 15 km radius from the proposed Project.

The new mine at Guma will be developed on agricultural and barren land. The agriculture land (mainly one crop) will be used for mining. There are no known tangible cultural heritage sites on the existing plant premises, at the existing mine, or at the Guma mine site. Therefore, there are no risks or impacts are anticipated with regard to either PS 6 or PS 8.

This is a Category A project according to IFC’s environmental and social (E&S) review because the Project has the potential to result in significant adverse environmental and social impacts that will be diverse and irreversible.

Key risks and issues related to this Project include: adequate social and environmental assessment of the impacts during construction and operations; implementation of effective E&S, health and safety management systems; engagement with local communities; implementation of fair, safe and healthy working conditions during construction and operations; utilization of equipment and operational practices that maximize conservation of energy, water and process materials including recycling and reuse initiatives; management of air emissions, wastewater treatment and discharge, and solid and other waste management; the impacts of operations on the local ambient environment; the Project''s impacts on nearby communities and purchase of land for the mines from the nearby communities (including people from STs); and broad community support for the Project.

IFC's appraisal considered the environmental and social management planning process and documentation for the project and gaps, if any, between these and IFCs requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through the implementation of these measures, the project is expected to be designed and operated in accordance with Performance Standards objectives. The information about how these potential impacts will be addressed by the Company consistent with national law and the IFC PSs is summarized in the paragraphs that follow. Further information is provided in the attached documentation.

- Environmental & Social Assessment:



The EIA studies together with public consultations have been completed for expansion of the cement plant, power plant, and Jhipan Mines as part of the regulatory permitting process. The impacts have been identified and management plans have been developed.



Apart from UltraTech’s operational Hirmi cement plant and mines, there is no other industrial activity in the study area, nor are any new projects anticipated in the foreseeable future. The EIA studies prepared for the Project cover the existing operations of RWC and the Hirmi cement plant, as well as the proposed Project. In doing so cumulative impacts have been assessed in the study area and appropriate mitigation measures identified where necessary.



The EIA study for the new mines at Guma is still in the draft stage. A public hearing is yet to be conducted, but is being scheduled for February 2013.



The Company has commissioned ERM-India to conduct a detailed SIA study and this is currently underway. The study will cover all project affected households (AHs), and completion of the report is expected by end-January 2013. The SIA will identify key project impacts on AHs, in particular the most vulnerable, and will propose measures for the mitigation as per the requirements of PS1 and PS5.



The EIA and SIA study for the proposed new conveyer belt for the Guma mines will be completed once its alignment is finalized. The completed EIA and SIA for the conveyor belt will be publicly disclosed as part of environmental permitting process which is expected during the second half of 2013.



- Management Systems:



For RCW, the Company has articulated its Safety, Occupational Health & Environment (SHE), Human Resources (HR), and CSR Policy, which commits to protecting and benefitting employee, environment and the society at large. The policy is displayed at all prominent locations across the facility and is also disseminated via the intranet.



UltraTech’s RCW has implemented an Integrated Management Systems (IMS) certified compliant with ISO 14001:2004, OHSAS 18001:2007 and SA 8000:2008 international standards. All activities in the cement plant, mines, power plant, and the Company housing colony are covered under the scope of the IMS. UltraTech demonstrated the necessary skills and resources for, and evidence of, robust implementation of the management system during the appraisal visits.



- Organization:



Responsibilities and authorities for managing the EHS issues and risks through the IMS have been clearly defined and communicated within the Company. Dedicated senior level officers oversee EHS performance, supported by various other operational teams and functional heads. The EHS organization is commensurate with the EHS risks and complexities associated with UltraTech’s operations.



A dedicated CSR team takes care of community engagement activities, in addition to implementing the Company’s CSR program.



- Monitoring & Reporting
:



The Company has implemented “Monitoring, Measurement, Analysis and Improvement Processes” to ensure and demonstrate its compliance with various applicable requirements. One of the methods chosen by the Company is Statistical Techniques, which uses methods like sampling plans, control charts, and monitoring of process capability. Based on the analysis of monitored data, necessary actions are planned to improve the process performance. In addition, the systems are audited by external agencies like DNV.



As a part of this system there is close control and monitoring of various project-related Key Performance Indicators (KPIs). Special focus is on monitoring of energy by applying an Energy Management System at all major locations.



The information related to EHS performance is visually communicated throughout the Company premises and production areas for the benefit of all employees and visitors.



The Company also publishes a sustainability report for cement manufacturing business that covers all units and is available on the Company’s website at: http://www.ultratechcement.com/sustainability.php.



- Emergency Preparedness and Response



The IMS includes an Emergency Preparedness and Response Plan which defines a system and procedures for dealing with emergency situations for minimizing hazards to human health and environment. This plan covers all significant, non-routine situations (such as any fire, explosion or spillage), which may endanger the personnel, property or surrounding environment. This document has defined responsibilities for function heads, heads of department, and sectional in-charge in case of an emergency. The Company conducts regular mock drills as part of this plan. The telephone numbers of persons related to administration (police, fire, hospital etc.) are displayed at prominent locations across the Company operations.



- Community Engagement:



In accordance with PS1 requirements for Informed Consultations and Participation (ICP), UltraTech, has already conducted public hearings for the brownfield expansion of its cement plant and operational Jhipan mines.



For its proposed Guma mines, UltraTech, through its SIA consultant, will conduct structured stakeholder engagement activities, including a door to door survey, focused group discussions, and public consultations with the affected communities.



For this purpose, the Company, with the help of ERM-India, has prepared a detailed SEP (disclosed herewith), which outlines various community engagement activities that the Company will undertake in near future.



The detailed SIA study will feed into finalizing the LRP in accordance with PS5 requirements. The Company will disclose the findings of the SIA as soon as they are available and will seek feedback on the proposed LRP from the AHs. The Company will then, in consultation with affected communities, finalize and implement the livelihood and community development measures to mitigate the identified risks
and impacts.



To date, no organized public consultations have been held with the PAP at the Guma Mines. However, the process of information disclosure and consultation has commenced. Furthermore, the Company’s CSR team has been active in Guma village and has executed infrastructure development programs in consultation with the village-level locally elected body (Gram Panchayat).

- Human Resource Policy, Management

The Company has a documented HR policy driven by a common HR manual for the entire cement business of ABG. In addition to the HR policy, a separate HR manual has been developed for RCW, which documents the Company’s approach to managing employees, and employee-employer relationships.



The contractual workers are governed by the ‘approved standing procedures’ of the Company. This procedure provides complete guidance on management of labor and welfare issues of the contractual workers.



The Company’s HR policies and procedures are consistent with the applicable requirements of local labor law as well as IFC PS2.



- Child Labor / Forced Labor



The Company has defined as part of its ethical governance policies and procedures, that they will not employ child labor directly or indirectly (through contractors and in supply chain). Records of proof of age are maintained by the Personnel and Administration department for its own employees as well as for Contractors’ employees. Furthermore, as part of the SA8000 certification, annual audits of the supply chain are undertaken by a third party covering child labor aspects, among others.



It is the policy of the Company not to take any deposits in cash or kind (viz. original certificates, or any identity papers) from any employee, or to coerce or force any worker to work against his / her wish or support the use of forced labor.



- Freedom of Association / Grievance Mechanism:



UltraTech recognizes the workers right to form a union and engage in collective bargaining and does not, in any way, prevent workers from joining trade unions. A trade union has been active at RCW since 2000 and elections are held every two years for the post of office bearers. Regular meetings are held between the union and the management.



The Company has in place a formal grievance handling procedure which includes open channels of communication between its employees, their supervisors and the management. Additionally, employees can formally raise their grievances either through the HR department or directly to immediate supervisors.



In addition, there are other informal channels to raise workplace concerns such as a mass communication forum (held every month) by the senior management, meetings organized by the HR department, forums on employee communications, etc.



- Occupational Health and Safety



At the time of the appraisal visit in mid-July 2012, there were over 3,000 workers involved in construction and commissioning activities. This number peaked at around 4,500 in October 2012.



The Company has instituted very high standards of safety on its construction site, with oversight from DuPont. The occupational health and safety (OHS) policies and procedures are an integral part of the IMS. As per the requirements of OHSAS 18001, the facility has developed and maintained a hazard identification and risk assessment matrix.



The Contractor Safety Management (CSM
) is an integral part of the contract document. CSM includes details on selection, preparation, award, orientation and training, managing work, and periodic evaluation of contractors on safety related aspects. A Field Safety Audit is conducted on a weekly basis by functional heads based on observations by DuPont.



RCW has its own Occupational Health Centre (OHC) on-site staffed with full time senior doctors and support staff and equipped for treatment of minor injuries and illnesses, employee check-ups as well as tracking of any occupational diseases. All employees, as well as contract workers, undergo a medical test to determine fitness for work as well as feasibility for jobs assigned.



RCW has put in place robust procedures and mechanisms to ensure appropriate provision and usage of personal protective equipment (PPE), which typically includes gloves, helmets, safety glasses, harness, and ear plugs as needed. A training course has been designed for the entire workforce on OHS risks around the plant and prevention of unsafe behavior through the use of PPE and other mitigation measures. PPE compliance at the site was found to be satisfactory.



- Workers Engaged by Third Parties



The Company’s Industrial Relations and HR department manages the CMS and compliances linked to it. While the Company has developed an elaborate mechanism to monitor contractors’ compliance with local labor laws, some gaps were identified during the appraisal with regard to wages and overtime payment to some of the contactors’ workers. Hence the Company will conduct an internal labor practices review to assess compliance with the requirements of PS2 and local laws and accordingly implement a corrective action plan. For this purpose, the Company has required all contractors to submit compliance certificate for each month and the same is verified by Company’s personnel department periodically to ensure effective legal compliance.



Labor camps provided by the contractors for the construction and commissioning workers are of acceptable standards, and the Company is implementing measures to further improve fire safety and hygiene at the labor camps. Accordingly, RCW has installed additional fire extinguishers and deployed security guards trained in fire fighting posted near the gate to take care of any fire emergency. The cleaning is done on daily basis and fogging on weekly basis to maintain the area clean and free from insects and mosquitoes.

- Pollution Prevention and Resource Conservation:



The Company has a dedicated department designated as a “World Class Manufacturing System” that works on process optimization and resource efficiency. As a result, the Company has implemented several resource efficiency projects in its existing operation and has achieved significant results.



For instance, there has been a decrease by almost 7% in water consumed/ton of cementous product from 2007 to 2010, while almost 21% of total water demand is met from recycled water. Similarly, the waste consumption in the cement production has gone up by almost 12% in last 3 years (2007-10). There has been reduction in use of raw materials by increasing slag absorption. The slag consumption has been increased by up to 5%, and fly ash by 4%.



Ultratech RCW was rated best in world in 2008-09 as per the benchmarking survey conducted by a UK based independent cement consulting company Whitehopleman for electrical energy consumption per ton, CO2 emissions per ton of cement, and Best in World for lowest clinker content in cement. RCW plans to implement similar manufacturing process standards for the Project.



- Water Supply and Effluent:



The proposed project would result in an increase in water consumption from 2000 m3/day to nearly 4000 m3/day. The source of water for the proposed project is primarily water stored in the mine quarry pits. Currently more than 1 million m3 of water stock is available in the present quarry pits, which is enough to meet the annual post-expansion water demand. The quarry pit size will be increased post-expansion of cement plant and mines, which will create additional water storage capacity. Only the rainwater and runoff is stored in quarry pits and there is no groundwater abstraction.



However, as an emergency backup arrangement, RCW has procured necessary approvals for withdrawal of groundwater from Central Groundwater Authority (CGWA). The project site is located in “safe zone” as classified by CGWA based on availability of groundwater. As such, the impact of groundwater withdrawal by RCW (if any) is expected to be very minimal on nearby communities and other users of groundwater resources. Rainwater harvesting is also practiced at many locations on the Company premises.



No effluent is discharged outside the Company premises and treated effluent is used for horticulture, gas conditioning tower, cyclone cooling, gardening and dust suppression.



- Air Emissions and Ambient Air Quality:



Stack emissions from the existing kiln as well as captive power plant are well within the emission limits as per the permit conditions and the World Bank Group (WBG) EHS Guidelines; while emissions from the proposed expansion Project will also comply the WBG EHS Guidelines. Company has an elaborate monitoring program for stack emissions as well as ambient air quality; which covers parameters such as SPM, RSPM, SO2, NOx, and CO. On-line monitoring system with continuous analyzers h
as been installed at RWC for this purpose.



Measures to minimize fugitive dust emissions are being implemented as proposed in the EMP and include measures such as covered conveyer belts with atomized dust suppression system for transfer of limestone; paving of all the roads; water sprinkling during transport activities and development of green belt.



Ambient noise impacts are high during construction for short durations. Appropriate PPE is, however, provided to all the workers on site and its use strictly enforced.



- Solid and Hazardous Materials and Waste



The Project involves minimal generation of hazardous and non-hazardous wastes. The solid waste generated from mining is mainly overburden, screen rejects, and dust from air pollution control equipment, i.e., a bag filter.



All the dust collected from the bag filter is recycled into the system. Other waste is disposed of as per the environmental permit condition. All of the fly ash generated from the captive power plants is used for blending in the cement. This approach will similarly apply to the Project.



The oil containing cargo residue water, waste oil, and sludge are generated during maintenance and regular servicing of equipment and vehicles, which is collected and sold to an authorized recycler.



The Project involves transportation, storage, and use of High Speed Diesel (HSD), lube oil and some chemicals such as hydrochloric acid and sulfuric acid used in thermal power plant. These hazardous materials are securely stored. The necessary permits are in place under the Hazardous Waste (Handling, Management and Trans-boundary Movement) Rules, 2008 amended to date.



For explosives used in mines, the Company has the necessary permission for road transport and storage of explosives. Drilling and blasting is done as per the license specification of Director of Mines Safety.



- Energy Supply and GHG Footprint:



Grid power is not adequately and reliably available in India, hence projects of such nature need to rely on their own captive power generation. Coal is the only available and viable fuel choice and there is no other substitute like diesel, oil/HFO (5 times more expensive) or natural gas (not available locally in the Project area). The Project will therefore involve establishment of a 30 MW coal-fired captive power plant (CPP). The Company has its own coal washery to wash the coal for the kiln and only the rejects will be used for the CPP.



Following review and analysis of available combustion technologies for the CPP, RCW has selected boilers with Circulating Fluidized Bed Combustion (CFBC) with air cooled condensers and a manufacturer’s guarantee for 86% efficiency. As per the EU’s Integrated Pollution Prevention and Control Best Available Technology Reference (IPPC-BREF) documents, this is considered as one of the Best Available Technologies for power plants. The power produced will be strictly for captive use and will not be sold to the grid.



As a memb
er of Cement Sustainability Initiative (CSI), UltraTech submits direct and indirect CO2emissions as per the World Business Council for Sustainable Development’s CSI format (Cement CO2 and Energy Protocol). Accordingly, RCW’s net direct CO2emission was 503.3 kg CO2 per ton of cementous material in year 2010. UltraTech RWC’s existing operation is the most energy efficient within the group and contributes to the least CO2 emission per ton of cement produced.



The Company has registered 4 projects under Clean Development Mechanism (CDM) in its current operations at RCW: cooler modification; alternative fuels; green clinker with direct conversion of slag into clinker and waste heat recovery. With this, for the operational plant at Rawan, UltraTech is annually offsetting over 451,000 ton of CO2e emissions, as against the total GHG footprint of approximately 1,500,000 ton CO2e per annum (as audited by KPMG). After the expansion, the estimated GHG footprint would be 4,411,000 ton CO2e per annum.



As part of CSI, UltraTech has committed to reduce its CO2 emissions by 3% across its cement business in 3 years (considering 2009-10 as baseline). As such, proposed Project will implement the energy efficiency best practices and shall investigate the opportunities for further improvements.

The Project area is sparsely populated with a few villages in a 10 km radius of the Project. The nearest village is about one km away from the site boundary. However, since the plant and existing Jhipan Mines area is spread over 1,100 ha, the actual residential areas in the villages are well separated from the operational areas of the plant and mines and, hence, there are minimal impacts from the manufacturing and mining operations on the nearby community.



Most of the transport (fly ash, gypsum as well as finished cement) is taking place by railway up to RCW’s own siding. Thus, the truck traffic through the nearby villages is minimal. In any case, the Company has built a road bypassing the nearest village as part of its CSR program, for the convenience of neighboring villages.



The labor camp for the construction site is located inside the Company’s existing premises and hence there is limited interaction between the local communities and migrant workers.



- Security Personnel



The Company employs unarmed security guards at its Rawan facility. Security guards are hired, as per the Company policy, with adequate background checks. Training is imparted to new, reassigned or temporary employees. There are also periodic instruction, training and awareness programs for existing personnel.



RCW imparts periodic instruction, training and awareness programs for existing personnel. In house fire and security drills are regularly carried out.

Of the total mine area of 157 ha, approximately 26 ha belongs to 45-48 title holders from STs. All of these ST households belong to the Gond tribe. While these tribal households have adopted the cultural practices and rituals of the majority community with whom they reside, they also have distinct identity, language and cultural practices. In light of the distinct identity and socio-cultural practices, the affected ST households have been considered Indigenous People in accordance with IFC Performance Standard 7.



However, the ownership of land is neither traditional nor customary, and all affected tribal households had individual land titles. No tribal families are being physically displaced on account of land acquisition. Furthermore, there is neither relocation of tribal households from lands and natural resources subject to traditional ownership or under customary use, nor any significant impacts on critical cultural heritage.



Therefore, the impacts on ST households are addressed through PS 5, per PS 7, footnote 7. The nature of impact on the IPs is broadly similar to the other affected groups and measures have been provided in the entitlement framework for their loss of livelihood, as in case of affected households that do not belong to STs. For the project, a separate Indigenous People’s Development Plan (IPDP) will not be prepared. The IPs will, however, be considered as one of several potentially vulnerable groups addressed in the SIA, CDP, Stakeholder Engagement Plan, Livelihood Restoration Plan, and Entitlements Framework. Free, prior, and informed consent (FPIC) is not required.



In addition to the Entitlement Framework, the Company will develop a CDP with interventions targeted specifically at tribal families. The CDP will include measures for drinking water, health and sanitation programs, capacity building programs, programs focused on women and ST households, and strategies for their participation. This will be prepared in the consultation with the tribal families.

Public consultations have been completed for expansion of the cement plant, power plant, and Jhipan Mines as part of the regulatory permitting process, and the Company is actively engaged with the communities nearby the Project as part of its CSR programs which are very well established.

For Guma mines, the Company started interactions with the project-affected families soon after the land was identified for purchase in 2007. The Company, through its Land Team, conducted several informal consultations and negotiations with individual land owners. These consultations focused on the Project, need for land purchase, land price and land purchase schedule.

Subsequently, the Company’s SIA consultants conducted additional stakeholder engagement activities in Guma as per the SEP during July 2012 to April 2013, including focus-group discussions with the affected communities to identify the impacts and community development needs and a public meeting in April 2013. Altogether 15 consultations of various types were conducted from July 2012 to April 2013 in the village and at the community center. Of the total 15 consultations, 3 focus-group discussions with women were undertaken. All consultations had a good representation from various socio-economic groups, which included Scheduled Tribe (ST) households and other vulnerable households. The consultations were conducted in the local language and conducted in the presence of UTCL representatives. In addition, discussions and interviews involving local government functionaries were also undertaken.

The SIA has determined that the Company informed the affected villages about the proposed Project and its plans with respect to community development activities. Further, the SIA has identified the key primary and secondary stakeholders and potential impacts on the affected community. The SIA includes an updated SEP and Grievance Redress Framework. The Village Level Committees with representatives from the affected community are envisaged to play an active role in grievance redressal.

The Company has prepared and locally disclosed a livelihood restoration framework, social impact assessment report, environment and social action plan and a community development plan that addresses the key concerns and expectations of the affected communities. Subsequent to the local disclosure of social and environmental information, the Company has engaged, consulted with, and raised the awareness of the affected communities about the Project’s impacts and benefits. The Company’s representatives continue to undertake additional consultations with the affected communities; document the consultation; and implement measures to address concerns and expectations expressed in the engagement process.
The Company is committed to continue engaging with the affected communities to provide information on mine development, its operations, as well as safety and health related issues. Another round of public hearing will be organized in coming months, which will be chaired by district administration authorities. .

The SIA Consultant has updated the SEP (earlier disclosed on February 1, 2013) that describes the Company’s approach to engaging with the affected communities and project stakeholders and to implementing a grievance mechanism. The SEP includes; (i) identification of all stakeholder groups; (ii) a schedule/time frame for disclosure of Project information (pre, during and post Project implementation); (iii) staff and management resources; (iv) documentation of all consultations; (v) budgeting for developing relevant materials for consultations; and (vi) a description of the integration of stakeholder engagement activities into the Company’s management system. The Company is also enabling capacity building of affected communities by facilitating development of Village Level Committees (VLCs) for effective dialogue with the Company and supervision of implementation of various social plans

The key expectation of the Project affected households is for enhancement of employment opportunities, income generation, skills training and support to community infrastructure related to water, education, health and agriculture. The Company, in consultation with the representatives of affected communities, has prepared plans to address these expectations and has taken steps to address the key ones on a priority basis. The Company has already developed a Community Development Plan (CDP) and has started implementing activities in consultation with the community.

The complete set of Category A documentation is available locally at the following locations:
Gram Panchayat office of Guma village, Palari tehsils, Bolada Bazaar district, Raipur, Chhattisgarh.
Enterprise Development Center, Rawan Cement Works

All inquiries and comments may be directed to:

Mr. Krishna Padhi,
Vice President, P&A-HR
UltraTech Cement, Rawan Cement Works,
Post: Grasim Vihar,
Distt: Raipur (Chhattisgarh),
493 196, India
Tel: +91 7726 288217-20
Fax: +91 7726 288208
Email: mailto:krishna.padhi@adityabirla.com

V. Swaminathan, President - Finance
UltraTech Cement Limited, Corporate Finance Division
B Wing, Ahura Centre, 2nd Floor
Mahakali Caves Road, Andheri (East)
Mumbai 400093, India
Telephone +91 22 66917800
Fax: +91.22.66928109
E-mail mailto:swaminathan.v@adityabirla.com

Based on the review of Project documentation, assessment of the Informed Consultation and Participation (ICP) process, and observations of formal and informal meetings, as defined under community engagements organized by the Company with the affected communities, IFC has determined that Broad Community Support exists for the Project. In general, the Affected Community considers the Project as a development opportunity for economic progress in the area surrounding the Project. *ICP - Information Consultation and Participation **BCS - Broad Community Support

Task Description	Anticipation Completion Date
Implement the local disclosure and stakeholder engagement activities in accordance with the Stakeholder Engagement Plan (SEP), including public consultation meeting(s) Deliverables: Evidence of implementation of various actions under the SEP such as minutes of the meetings, video recordings, photos etc.	As detailed in SEP
Conduct an internal labor practices review to assess compliance with the requirements of PS2 and local laws and accordingly implement a corrective action plan. Deliverables: Report on labor compliance by contractors; and corrective action plan as needed	January 2013
Finalize the detailed Social Impact Assessment (SIA) study and Livelihood Restoration Plan covering all project affected households (AHs) and vulnerable groups and locally disclose the report in accordance with the SEP Deliverables: Final SIA report together with the evidence of local disclosure of detailed SIA report	February 2012
Complete implementation of Livelihood Restoration Plan	October 2013
Complete the detailed EIA and SIA study for the Guma conveyor belt including public consultation with affected household and local disclosure of the reports Deliverables: EIA and SIA reports together with the evidence of public consultations and local disclosure	December 2013
Perform an ex-post Resettlement Completion Audit to confirm compliance with IFC PS 5 and 7. If necessary, agree with IFC on a time based action plan to address areas of non-compliance. Deliverables: Resettlement Completion Audit report/action plan if required.	December 2015