ABOUT THIS REPORT This third sustainable development report covers our objectives, strategies and activities related to sustainable development. Building a sustainable society is a responsibility of all of us and the initiatives of our employees bring us closer to achieving this task. We invite you to read this report which reflects our concerns and achievements on environmental and social responsibility issues and join our efforts to build foundations for the future of our society.

CONTENTS Foreword

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ECONOMIC PERFORMANCE

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VISION AND STRATEGY

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Holcim (Romania) - Facts and Figures

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Holcim Group Holcim (Romania) Strategy and Objectives

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ENVIRONMENTAL PERFORMANCE

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MANAGEMENT SYSTEMS AND TOOLS

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General Objectives of the Integrated Management System Quality Management – Objectives Environmental Management – Objectives Health and Safety Management – Objectives ISO 9001, ISO 14001, OHSAS 18001 Quality of products Reporting Tools Organizational chart

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Strategy and Objectives Activities and Initiatives Environmental Investments Optimized and Efficient Utilization of Resources Emission Monitoring and Reporting Management and Rehabilitation of Quarries Water Transport Waste Selective Collection

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SOCIAL RESPONSIBILITY

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Business Conduct Stakeholders Relations Employment Practices Occupational Health and Work Safety Community Involvement

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Holcim (Romania) Headquarters: 57 Prim`verii Bv. Bucharest Phone: +40(0)21 231 77 08 Fax: +40(0)21 231 77 14 Our report can be downloaded from www.holcim.ro Please e-mail your suggestions to the address: [email protected]

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FOREWORD For some companies, the first priority is technology. Or profit. Or leadership. For Holcim (Romania), future is top priority. Our innovative spirit, technological achievements and passion for performance are proofs of our commitment to protecting and securing the future. Our strategy implies the simultaneous observance of the three pillars that make up this concept: solid economic growth, environmental performance and social responsibility. Putting our strategy in line with the principle of sustainable development enables us to anticipate future challenges and to prepare ourselves accordingly. In 2007 we are going to celebrate our 10th anniversary of local operations in Romania. It’s a good opportunity to look back and see our progress in sustainability and it’s also the best time to set new and ambitious goals for the years to come. This report provides a general overview of our commitment to sustainable development and of our future challenges. We thank our Holcim employees for living up to our commitment to sustainable development, as well as our customers, partners and other stakeholders for their valuable support and for sharing our passion for sustainability.

Markus Wirth,

Country Manager

BOARD OF DIRECTORS

Markus Wirth Country Manager / Nicoleta S`l`jan Human Resources Director / Rozica Ovejanu Finance & Accounting Director / François Laporte Marketing & Sales Director / Emil Raicov Campulung Cement Plant Manager / C`lin Moldovan Turda Cement Plant Manager Roman Menz Alesd Cement Plant Manager

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“If you want to see further, you must keep trying to climb higher and higher” Constantin Bråncu[i

VISION AND STRATEGY

Vision and strategy

HOLCIM GROUP

HOLCIM (ROMANIA)

Holcim Group is one of the world’s leading suppliers of cement and aggregates (crushed stone, sand and gravel) as well as further activities such as ready-mix concrete and asphalt including services.

Holcim (Romania) is part of Holcim Ltd. Group. Holcim (Romania) has a leading position in producing and delivering cement, ready-mixed concrete and aggregates of guaranteed quality. Presently, the company owns 3 cement plants in Alesd, Campulung and Turda, with a total annual cement production capacity of 2.7 million tons, a network of 15 ready-mixed concrete plants and 4 aggregate pits. The environmentally friendly concept, brought in Romania as a premiere by Holcim, guarantees that RMC plants are based on the latest technology that eliminates noise, dust and allows fresh concrete recycling.

The Group currently employs more than 90,000 people in over 70 countries worldwide. With market oriented structures, new products, skilled employees and efficient environmental management systems, Holcim ensures a strong position now - and for the years ahead. Holcim is a member of the World Business Council for Sustainable Development (WBCSD). The WBCSD is a coalition of 190 international companies united by a shared commitment to sustainable development via the three guidelines of economic growth, ecological balance and social progress. As a founding member of the Cement Sustainability Initiative (CSI), Holcim is also able to consider issues from our own industry perspective. Holcim is also a supporter of the UN Global Compact. With this commitment, Holcim strives to implement the ten principles of the Compact in the areas of human rights, labor standards, environmental practices, corruption and bribery and to use it as a basis for advancing responsible corporate citizenship. At the same time, the Compact provides Holcim with the opportunity to further push its own ongoing programs and processes in the areas of human rights, labor standards, and environment protection.

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Since 1997, Holcim has invested over 390 million EUR in its plants, including approximately 57 million in 2006 alone. Holcim (Romania) is the first company in its field which received in the beginning of 2004 a triple certification for quality management (SR EN ISO 9001), for environmental management (SREN ISO14001) and for occupational health and safety (OHSAS 18001). In order to answer its clients’ needs, Holcim (Romania) has developed new solutions, products, and services in the field of transport, product application and laboratory analysis service. Since 2005, the solution designed to process and materialize industrial waste by Holcim (Romania) - Cement Campulung and Cement Alesd was extended in order to process over 100 waste types. Holcim (Romania) currently employs more than 1300 people.

Vision and strategy

Vision Our vision is to provide foundations for society’s future. Mission Our mission is to be the world’s most respected and attractive company in our industry- creating value for all our stakeholders.

STRATEGY AND OBJECTIVES Holcim is committed to the principles of sustainable development expressed by the three pillars: • Economic growth • Environmental performance • Social responsibility Economic growth and healthy financial returns are the decisive factors that enable companies to contribute to building societies that will provide a more sustainable future. Our objectives are to: • Continually set the highest standards of customer satisfaction in our industry; • Secure the strongest competitive position in our markets; • Establish partnership with suppliers to deliver value-for-cost procurement for the Group and our customers; • Be recognized as an employer of first choice; • Empower our employees and integrate them fully into our global network; • Extend our client portfolio; • Prove our commitment to sustainable development; • Be acknowledged as a valued and trusted partner in our community.

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“Our vision has not changed over the time. Since the company’s early beginnings, our commitment has been to build foundations for society’s future.” Markus Wirth, Country Manager

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“A learned man is the one who never stops learning” Lucian Blaga

MANAGEMENT SYSTEMS AND TOOLS

Management systems and tools

GENERAL OBJECTIVES OF THE INTEGRATED MANAGEMENT SYSTEM • Continuously improve the competencies of our personnel by providing the necessary resources and training; • Increase the personnel’s awareness and responsibility concerning quality assurance, environment protection and occupational health and safety; • Develop team-working abilities and innovative spirit by increasing the employees’ involvement in projects.

QUALITY MANAGEMENT – OBJECTIVES • Increase the customer satisfaction by delivering constant quality products in compliance with current standards, codes of practices and specifications; • Continuously increase the number of “good” and “very good” ratings in the surveys done for assessing customer satisfaction; • Develop the range of products and associated services according to market needs.

ENVIRONMENTAL MANAGEMENT – OBJECTIVES Continuously improve the Plant Environmental Performance, by taking the following measures: • Reduce dust emissions; • Improve the quality of waste waters; • Rehabilitate former industrial sites; • Reduce usage of non-renewable natural resources by increasing the material and thermal wastes recovery.

The new certificates, issued for all of our operations, are valid for a three year period and will be yearly reconfirmed through audits made by this internationally recognized institution.

HEALTH AND SAFETY MANAGEMENT – OBJECTIVES

QUALITY OF PRODUCTS

• Zero deaths or injuries causing permanent disablement;

The certification of our products by AEROQ, an institution notified for 89/106/EEC directive – construction products, confirms:

• Prevent work accidents by training the employees and increasing the risk awareness; • Continuously monitor the health condition of the employees.

ISO 9001, ISO 14001, OHSAS 18001 Holcim (Romania) has consolidated and developed through its own management system the quality integrity with emphasis on both environment and labor safety. The renewal of the certificates issued by TÜV-CERT in 2006 was the materialization of a constant approach towards the quality of the environment protection and respectively health and labor safety according to the referred standards demands (ISO 9001:2000, ISO 14001:2004, OHSAS 18001:1999).

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Upon the re-certification audit, the conclusion of the external auditors was the following: “It came out that the top management wants the integrated management system to function and develop and that it is strongly involved in the system’s development. This involvement is proved by the investments made in technologies through which it is aimed the improvement of the quality of the products made, reducing the pollution and accidents risks, as well as investing in the employees’ development (trainings, experience exchanges).”

• the constant quality of Holcim (Romania) products; • quality control for the entire production; • that all the characteristics of our products are according to the specifications and standards applicable, respectively with the specific norms and technical agreements. Cements • The audits and the tests made under the coordination of AEROQ have determined the conformity level of our cements according to the provisions of SR EN 197-1:2002 “Cement – Part 1: Composition, specifications and conformity criteria of the usual cements”; • The quality of the delivered cements it is certified by the Conformity Declarations, issued for each cement batch; • As a result of achieving the requirements of the above mentioned standard, as well as of the EU regulations regarding the conformity of the products, in February 2007 were issued the Conformity Certificates with the CE mark.

Management systems and tools

Concrete • The concrete certification was realized as a result of the efforts made for ensuring the comply with requirements of the concrete norms NE 012/1999, NE 014/2002; • The next step is implementing the requirements of the new norm NE 012/2007.

fication of this road chain used for improving the earth characteristics from the base layers and the foundation; • Meeting the requirements of the referral standard for the limestone filler was as well confirmed in 2006.

REPORTING TOOLS Reporting - Integrating Corporate Business Processes Holcim (Romania) continues to integrate monitoring and reporting on environmental and OH&S issues into the business review processes. We have implemented operational indicators that record both the environmental and the financial impact of our activities. For instance, we monitor the volume of traditional fossil fuel replaced by alternative fuel, the resulting reduction of CO2 emissions, and the savings generated. In the field of cement production, the reports include information on CO2 emissions as well as other important environmental indicators. In all our business operations, the standard reports contain information on the number of injuries as well as severity and frequency rates. These standard reporting processes ensure that all indicators have a target value, so actions can be planned and taken when reality varies from these values. Measuring and Reporting Environmental Performance A key element of Holcim’s approach to environment protection is the observance of the corporate environmental management system. Known as the Plant Environmental Profile (PEP), it enables monitoring of the performance at three operational levels - individual plant performance assessment, Group global assessment and corporate consolidation of plant performance worldwide. The suite of self-assessment tools that form PEP is based on ISO 14001 and enables the company to evaluate performance and apply a healthy environmental policy.

Aggregates The year of 2006 meant also maintaining the product certification for the ballast obtained at Brasov and Piscani.

The Emission Monitoring and Reporting (EMR) standard system ensures a consistent approach to atmospheric emissions. In order to keep accurate records of our CO2 emissions, we monitor and report our CO2 emissions according to the World Business Council for Sustainable Development CO2 Protocol for cement plants. This is an instrument used by cement manufacturers worldwide and implemented throughout the Holcim Group.

Maintaining the quality of our concretes and aggregates became a fact by: • constantly improving the integrated management system; • constantly monitoring the quality of the products delivered through checking made on both raw materials and final products; • the active involvement of the trained staff from the working points; • a constant insurance of the control of the test activities according to the requirements of the current technical regulations and client demands. Other products: • Proving the compliance with the requirements of the product standards for DOROPORT was the base for maintaining the certi-

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Management systems and tools

OH&S Reporting At the beginning of each month, for the previous month, the data presented below is reported to HGRS (Holcim Group Support) for own and third party personnel, as well as for visitors: • • • • •

number of injuries; number of worked hours; number of work days lost; LTIFR (Lost Time Injury Frequency Rate); LTISR (Lost Time Injury Severity Rate).

Moreover, at the end of the year, the annual OH&S results (statistical data) are reported to HGRS.

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ORGANIZATIONAL CHART To ensure that our policies and guidelines are implemented throughout Holcim (Romania), responsibilities for SD have been assigned at central and local levels. At central level, Holcim’s Country Manager together with the Board of Directors define the general company strategy while at local level the plant managers assume operational responsibility for the prioritization and integration of SD into daily decision making.

“The efficiency of our management systems is proved not only by the quality of Holcim products or by the triple certification, but also by the fact that we have succeeded in building such a strong and professional team.” François Laporte, Marketing & Sales Director

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“Theories are patterns without value. What counts is action.” Constantin Bråncu[i

ECONOMIC PERFORMANCE

Economic performance

Economic performance of the sector For evaluating the overall economic importance and relevance of our sector, it is important to understand that the cement industry is the basis of the construction sector. From a macroeconomic perspective, our product has a value progressively multiplied by the workforce involvement and material value of resulting goods.

HOLCIM (ROMANIA) - FACTS AND FIGURES 2006 has been the best year in terms of financial and operational performance, a year when our company registered a turnover of 775 million RON (approximately EUR 220 mil), which means a 28% increase, as compared to 2005. The overall investment made by Holcim (Romania) by the end of 2006 amounts to more than EUR 390 million. An additional amount of 86 million EUR will be invested in 2007 in a number of projects related to modernizing production technology, environment protection, business development, occupational health & safety conditions, social projects and human resources.

INVESTMENT OF HOLCIM (ROMANIA) IN MODERNIZATION AND ENVIRONMENT

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Economic performance

PRINCIPAL KEY FIGURES HOLCIM GROUP (INTERNATIONAL LEVEL) 2006

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“Soon we will be celebrating 10 years in Romania. Any anniversary is of course a time of analysis. The figure that best describes us is the investment: more than 390 million EUR.” Rozica Ovejanu, Finance & Accounting Director

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“We can never be grateful enough to the earth who gave us everything” Constantin Bråncu[i

ENVIRONMENTAL PERFORMANCE

Environmental performance

STRATEGY AND OBJECTIVES Holcim (Romania) is committed to promote, sustain and apply a healthy environmental policy. As proof, an ISO 14001 re-certification for environmental management, for all our locations and businesses throughout the country was granted by the TÜV Rheinland international certification body. We continuously search for new environmental solutions and invest considerably in the development of environmentally friendly products and processes. Objectives • Reduction of atmospheric emissions by promoting and implementing best available techniques; • Rational usage of non-renewable natural resources and co-processing of waste (material and thermal recovery); • Supply of environmentally friendly products; • Rehabilitation of former industrial sites.

ACTIVITIES AND INITIATIVES Cement Plants Modernization Through best available technologies (permanent emissions control, process automation, modern dust filters and low NOx burners) atmospheric emissions are reduced significantly. Following the transposition of environmental european regulations, the implementation of best available technologies lead to the obtaining of the first environmental integrated authorisation for Alesd and Campulung cement plants in 2006.

Transparency in communication An active involvement of all stakeholders in our current activities is a proof that we care. Organizing every year the open doors days on various environment related themes, participating at various events, seminars, workshops and experience exchanges dedicated to environmental protection, are just a few of the activities undertaken in order to ensure an open communication and collaboration for solving the local issues.

Environmentally friendly products New composite cements with high quality mineral components help reduce CO2 emissions, as well as energy consumption, thus saving natural energy resources. Environmental services Holcim (Romania) offers environmental services to waste generators by co-processing waste into alternative fuels and raw materials for the cement manufacturing process. Environmentally Friendly Concrete Plants Holcim is the first cement, concrete and aggregates producer to implement in Romania the concept of ”Environmentally Friendly Concrete Plant”. The expertise developed by Holcim in over 700 concrete plants worldwide ensures that the new concept implemented in Romania meets the latest environmental standards regarding: • reduction of dust emissions; • reduction of noise emissions; • recycling of fresh concrete residues and waste water used for truck-mixers washing.

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ENVIRONMENTAL INVESTMENTS Between 1998 and 2006, Holcim (Romania) invested aproximately 24 million EUR in environmental protection. The main environmental investments made in this period are materialized in: • dust filters for the main production installations: clinker kilns, clinker coolers, raw mills and cement mills; • dust filters for auxiliary installations: silos, slag dryers, crushers and transport systems; • improvement of the water management system: decanters, separators; • continuous emissions monitoring equipment on kiln stacks; • mounting of low NOx emission burners; • quarry rehabilitation programs; • opening a new quarry in Campulung as replacement of the old quarry that was not complying with the emissions standards; • closing and rehabilitation process of the old industrial waste dump site of Alesd cement plant.

Environmental performance

• indirect reduction of gas emissions which would result from other methods of waste processing (incineration in dedicated incinerators, land filling); • reduction (medium and long-term) of the cement production costs (if all the collection, transport, pretreat-ment and co-incineration costs are covered by the waste generators).

Due to an investment of aproximately 5 million EUR for the development of this activity at the Ciment Campulung and Ciment Alesd plants, Holcim (Romania) is able to co-process a wide range of waste: OPTIMIZED AND EFFICIENT UTILIZATION OF RESOURCES Efficient utilization of natural resources is an important objective of our company. We increase the environmental efficiency of the production process mainly by: • waste co-processing in cement plants; • reducing the clinker factor; • improving energy efficiency; • utilization of materials previously considered quarry waste. Thus, we succeded to extend the Alesd quarry’s life and to protect the natural geological resources.

• Petroleum waste (from waste oil and their emulsions, up to sludges, tars and impregnated soils); • Rubber (including whole used tires); • Plastic, paper, leather, textile and wood (including sawdust), as such or impregnated / contaminated with various substances, resulted from industrial sources or from the sorting of household waste. The studies on co-processing performed around the world and the permanent control and monitoring of this activity within the Holcim cement plants prove that the environmental services of waste co-processing provided by Holcim (Romania) have no negative impact on public health and safety, the environment or on the quality of our products.

Waste co-processing in cement plants Reducing the clinker factor Waste co-processing into alternative fuels and raw materials in cement plants is a method frequently used worldwide to process and dispose of waste in a completely safe manner. Two main types of waste can be co-processed in cement plants: • waste with energetic content – energetically valorized as alternative fuel; • waste with a mineralogical content similar to the traditional raw material or to the intermediate product (clinker) – materially valorized as alternative raw materials.

The base of the cement manufacturing process is the production of clinker through the decomposition of raw materials (including limestone decarbonization) down to calcium, silica, iron and aluminum oxides and their mineralization as clinker. Clinker production is a complex process, characterized by high energy consumption.

The waste co-processing in cement plants under controlled conditions (from the points of view of quality, environmental protection and OH&S) has multiple benefits:

This process inherently emits CO2 (greenhouse gas), resulted from both limestone decarbonization and the burning of various fuels in clinker kilns in order to obtain the necessary thermal energy.

• preservation of natural resources – by the partial substitution of traditional fossil fuels (coal, heavy fuel oil, gas) and traditional raw materials (limestone, clay, marl) with alternative ones;

The clinker is then ground together with gypsum and transformed into Portland cement.

CaCO3 600 - 900°C CaO + CO2

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Environmental performance

In order to obtain composite cements, with improved characteristics for some applications, the clinker is partially substituted with various mineral components: • natural materials (such as tuff, limestone etc); • residual materials (waste or by-products of other industries: grounded blast furnace slag, fly ash from coal fired power plants, etc). The “clinker factor” represents the percentage of clinker used in cement manufacturing. Reducing the clinker factor is one of the most efficient methods applied by the cement plants for preserving natural resources (raw materials and fuels used for clinker production) and reducing CO2 emissions. Improving Energy Efficiency Cement production requires a great amount of both thermal and electric energy. Energy efficiency, defined as the total thermal energy consumed per ton of clinker produced and as the total electric energy consumed per ton of cement produced, is almost entirely determined by the technology applied in the production process. Besides reducing production costs, the improvement of energy efficiency positively contributes to preserving the natural resources (fuels) and to lowering greenhouse gas (CO2) emissions generated by fuel combustion in the cement kilns, as well as by electric energy production in thermo power plants. Another way of developing the energy efficiency is represented by the option of using alternative fuels. Besides the fact that through these methods various wastes (tires, PETs, plastics, used oils and so on), are being destroyed in an ecological manner, significant decreases in the conventional fuels consumption are also obtained. Updating the technology within the 3 cement plants also contributed to the decrease of electric energy consumption. Some of these works included: • replacing air compressors with some more efficient ones; • replacing the old cement pneumatic conveyors; • using variable speed drives; • resizement of loads of the ball mills; • optimizing the control of the machine tools traffic through PCS (Process Control System). The improvement of the energy efficiency at the Alesd and Campulung plants and the reduction of the clinker factor are also the base for the project of green-house gases reduction, jointly implemented by Holcim (Romania) and the Netherlands Government, with the approval and support to the Romanian Government, according to the Kyoto protocol. The verification in 2005 of the results of this project, which were monitored throughout 2004, showed that the estimated reductions were exceeded with 33%. The reductions were also monitored in 2005 and 2006, and an examination by an accredited verifier will follow in the first half of 2007.

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EMISSION MONITORING AND REPORTING One of our constant concerns is to answer in time and completely to all legal requests in the area of monitoring and reporting the impact on environment of all of our activities that are taking place either in cement factories, concretes stations, producing aggregates stations or offices. Having in mind that the impact of our activities on the environment it is mainly due to the cement production process, a special importance it is given to monitoring the emissions generated by this process. EMR standard Holcim has developed and implemented a corporate standard for clinker kiln stack emissions monitoring and reporting (the EMR standard). This standard was implemented in all Holcim (Romania) cement plants and consists in: • continuous monitoring of dust, CO, NOx, SO2, VOC, HCl, HF emissions by installing continuous emission monitoring equipment at clinker kiln stacks; • once-per-year monitoring of heavy metal, dioxins and furans emissions. By periodically calibrating the monitoring equipments, according to the requirements of the EMR standard, we are making sure that our emissions reports are accurate and correct. Reporting the measurements and the monitoring of the emissions and environment:

Environmental performance

• proves that our operations are according to the legal requirements of our field of activity; • allows benchmarking with other companies emissions; • underlines the continuous progress of our environmental performances.

As a result of the approval of those plans by the authorities, a monitoring of all generating sources will start from January 1st 2007.

MANAGEMENT AND REHABILITATION OF QUARRIES Most of the raw materials used in cement production are produced in the 12 active quarries around Alesd, Campulung and Turda plants. The mining of limestone, marl and clay not only has a major impact on the local landscape and environment, but may also cause noise and traffic problems for local communities. Holcim carries on an active dialogue with the affected communities in order to minimize the negative aspects and also to consider the wishes and opinions of the local population.

Monitoring the greenhouse gas emissions

Holcim (Romania) implemented a plan for the rehabilitation of all operating quarries as a constitutive element of the overall plan for the complete exploitation phase of the quarries. Thus, the reintegration of the exploitation areas into the surrounding landscape is ensured, taking into account the opinions of all involved stakeholders and ensuring the functioning of the ecosystems and the biodiversity.

The sources of the CO2 emissions from the cement plants owned by Holcim (Romania), can be classified, according to the volume of the emissions generated, as follows: • decarbonization of raw materials (55%); • burning the fossil fuels in the clinker kilns (30%); • transport + burning auxiliary fuels (10%); • electric power consumption (external generating of electric power) (5%). In order to have a correct image of the generated CO2 emissions, we are monitoring them and reporting about them according to the CO2 Protocol for the cement plants. Developed within the World Business Council for Sustainable Development (WBCSD), this is the tool used worldwide by the cement producers and applied in the entire Holcim group. Thus are being monitored as performance indicators: • absolute emissions (the total quantity of CO2 resulted from the cement production); • specific emissions (the CO2 quantity resulted from producing one tone of cement). 2007 will bring as a supplement the monitoring imposed by the European norms in the area of greenhouse gas trading, norms available also in the Romanian legislation from 2006. Thus, this year, Holcim (Romania) developed, based on the existing guides at a European level, transposed also in the national legislation, monitoring plans of such emissions for the instalations in Ciment Alesd and Ciment Campulung. This monitoring is addressing to the emissions generated by the clinker kilns (generated during decarbonization of the raw materials and burning various traditional and alternative fuels).

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Environmental performance

The quarries rehabilitation project (that is to be continuously improved) involves: • developing each quarry mining plans on life time; • rehabilitation solutions commonly decided with specialists from Babes-Bolyai University in Cluj, the Faculty of Environmental Science; • scheduling the rehabilitation activities overlapping with the evolution stages of the quarry.

WATER Holcim is aware of the important role of water in nature and is concentrating its efforts to reduce water consumption. To achieve this aim, the following efforts are undertaken: • modernization of water treatment and purifying facilities for domestic and industrial use; • modernization of water recycling units; • rehabilitation of old drinking and industrial water supply systems, for decreasing the losses from the system; • reduction of water used in the production process; • maintaining used water quality parameters in accordance with legal standards and regulations. The operation of 15 environmentally friendly concrete plants all over the country and an ecological truck washing station at Campulung stand for our efforts.

TRANSPORT Our truck fleet in Bucharest is equipped with the ‘‘HolTrack’’ system. Through the use of the GPS based system we are able to optimize the routes and to improve logistical coordination. The emissions of Holcim (Romania) trucks are monitored regularly, thus assuring that all our trucks run below the legally allowed emission values. For the purpose of increasing the safety of the drivers that are transporting Holcim (Romania) products, starting with 2004 preventive driving courses were initiated. These classes, run by external collaborators, were extended in 2005 to the drivers of our subcontractors, our intention being to offer this facility to the clients that are transporting our products with their own means of transportation. For the first time in Romania, in order to increase the safety, the vehicles were equipped in 2005 with their own manipulation systems of palettized cement bags. The manipulation systems are either cranes installed on the transportation vehicle, or forklifts attached to the semi-trailer. Both options are created to offer support to the clients, eliminating the unwanted effects produced on the health of the personnel that manipulates the bags in the clients’ warehouses.

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WASTE SELECTIVE COLLECTION A system of selective collection of the generated wastes was introduced in 2004 in all Holcim (Romania) locations in order to optimize waste management and to improve the waste recycling and energy recovery possibilities. Specific training sessions, educational programs and motivational campaigns are run periodically for implementing a correct waste management.

“In 2007 we are going to celebrate our 10th anniversary in Romania. Over these 10 years, we have continuously enriched our environmental protection program.” Emil Raicov, Campulung Cement Plant Manager

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“At the end of the day, ask yourself not what others have done for you, but what you have done for others” Nicolae Iorga

SOCIAL RESPONSIBILITY

Social responsibility

BUSINESS CONDUCT The challenge of business today is to balance economic growth with environmental performance and social responsibility. Corporate Social Responsibility (CSR) is one of the major issues in this decade. For Holcim, acting in a socially responsible manner is more than a collection of discrete practices and occasional gestures or initiatives motivated by marketing or public relations. For Holcim, CSR is a comprehensive set of practices and programs integrated into our business operations and decision-making processes. Holcim (Romania) is aware of its social responsibilities and runs various programs in the benefit of the communities situated around its plants. Holcim (Romania) is committed to providing healthy and safe workplaces in all its facilities, ensuring that operations do not pose a risk upon our employees or upon the environment by providing appropriate training, information and production systems. We consider community involvement a high priority and we are engaged in multiple social projects and activities in the regions where we operate.

STAKEHOLDERS RELATIONS Holcim is committed to developing and maintaining strong relationships with all our stakeholders, as an important part of our business policy. Our mission statement outlines our aim to create value for all our stakeholders. • Our business goals include maintaining an active dialogue with authorities, associations, international organizations and NGOs, and being acknowledged as a valued and trusted partner; • Our environmental and social policies commit us to engage an active dialogue with our stakeholders and to report our progress on the issues that affect them; • Our communication policy outlines that engagement must be based on mutual trust and respect.

EMPLOYMENT PRACTICES Due to the expertise of its qualified and enthusiastic staff, Holcim (Romania) is acknowledged as a valued and trusted partner. We continuously stimulate our employees by providing the resources to fully realize their potential through professional development within an involving learning environment and by providing opportunities to learn new skills and to grow within the Group. The total amount invested in 2006 in training and development activities of the personnel had a value of EUR 590.000, 20% more than in 2005. Every employee benefited both from an individual plan of training and development, participating at programs that meet the real needs required by his/her position, as well as from a personal development.

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Social responsibility

There were continued, in an equal way, both the investments in programs regarding certification / qualification and development of the professional competences (technical specialized courses), environmental protection, health and labor safety, quality insurance, as well as in programs regarding developing personal and social competences. Thus, there were continued programs for developing skills on PC operation, foreign languages, interpersonal communication, time management, as well as more complex programs of leadership and management skills. As a novelty, in 2006, took place 49 team building events that contributed in harmonizing the team relationships, both within the same department, as well as between different departments and locations. Most of the training and development programs were organized with external trainers and consultants, but there were also continued the internal programs held by Holcim certificated trainers.

In 2006 was developed for the first time an internal study regarding the employees satisfaction. Each of the company’s employees was invited to express his/her opinion regarding a series of issues such as the leadership and interpersonal relationships, activity, development opportunities, compensations and benefits, labor conditions. The information obtained reflected an internal environment appreciated by the employees and the presence of constructive work relations. The aspects that can be improved will be addressed during 2007 and further on, and the results of such actions will be evaluated by periodically resuming such researches.

Regular meetings and discussions with the unions about the needs and problems of the members assure a good relation with the union, without conflicts and problems.

OCCUPATIONAL HEALTH AND WORK SAFETY Holcim (Romania) pays a special attention to its employees and its stakeholders safety and health. The fact that Holcim (Romania) has implemented an OH&S management system according to OHSAS 18001 requirements is a proof in this regard. The OH&S pyramid implemented in 2005 brings some additional elements because the continuous improvement is the key word in Holcim (Romania) regarding OH&S and not only.

However, an OH&S management system offers the tools required in management and training of everything related to OH&S but doesn’t offer the guarantee that you will not have accidents. For this purpose, Holcim started in 2006 a project called “Passion for Safety”, for OH&S performance improvement, where the change of mentality has a major place.

YEAR 2006 1. Investments

While the programs regarding the environment protection, occupational health and safety or ensuring the quality represent a social responsibility towards the outside of the company, the other programs, especially the one regarding the development of the individual competencies, are dedicated and personalized for our employees as an important form of social responsibility. For certain positions within the company, Holcim (Romania) is offering equal chances of employment for the young graduates that are proving passion for the profession they selected, that own a real development potential, and last but not least, believe in the company’s values.

Over 500.000 EUR have been invested in 2006 at company level for improving our employees’ health and safety. Our efforts have been focused mainly on providing the best work and protection equipments, refurbishing the safety devices on equipments, providing the preventive nutrition (tea, milk, mineral water) and the hygiene and sanitary supplies (soap, paper towels, hand cream), performing the medical investigations and vaccination campaign, awareness campaigns and trainings.

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Social responsibility

2. Training courses

3. 2006 initiatives

Are U Safe ?

Year 2006 has brought some major initiatives in increase the employees commitment regarding OH&S, this being the main scope of 2006 OH&S activities.

The internal health and safety course conducted by OH&S team, additional to the trainings required by the law, has become a common practice in Holcim (Romania).

3.1 ”Safety at home” campaign This campaign had the scope to increase the employees’ awareness of the risks at work and at home as well. Our company noticed that we have done a lot for our own employee’s work risk training but less regarding the existing risks even at their home, and for this reason the OH&S team started this action. The campaign has been divided in three phases, each of them having a certain scope: Phase I - drawing contest for employees’ children The purpose of this phase was to make the translation from the work site activity to what happens at home. Each child had to draw how their parents perform their job in a safe way. For this it was necessary a discussion with their parents to know how they perform their job in a safe way. The educational purpose of the campaign was to encourage parents to explain to their children what they do in order to come back home safe after work. Phase II – thematic contest This phase was focused mainly on the existing risks at home. The participants received information brochures regarding the risks we confront after we leave work: traffic, risks in the kitchen, risks in the garden, risks for the children and then a questionnaire which refers to these risks. Phase III -week-end project The scope of this campaign phase was to see how our employees put in practice the OH&S knowledge even when they work at home. Each participant had to show several photos, with images before and after the execution of the chosen project (i.d. sink change, some repairs carried out at home, dampness removal, etc.) and to describe step by step the project execution and the measures he took to work safe. 3.2 OH&S award In 2006 we decided to reward, on a monthly base, the workers with viable ideas and initiatives in OH&S. Every month, an award in amount of 450 RON has been given for the best OH&S ideas in every cement, concrete and aggregates plant. 3.3 E-learning in OH&S This year Holcim (Romania) released an on-line OH&S training program. This program covers some basis items:

In 2006, the course named this time “ Are U Safe? “ was conducted during September 20th – 21st in Alesd and Turda, on October 30th in Bucharest and on November 30th in Campulung.

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Subjects discussed this year were:

• • • •

Holcim OH&S cardinal rules OH&S responsibilities Working in confined spaces Working at height

• Stress management • 2006 OH&S legislation- news • 2005 OH&S report • Accidents in 2005 and 2006 (AE and TU) and reporting forms for accidents/events PO-18-02 • Working at height • Passion for Safety - Eastern European Regional Safety Initiative

3.4 OH&S Observation tour This year the OH&S observation tour was introduced at the management level. At least twice per month, each manager make an observation tour in the plant to see how employees work and to discuss about it. The discussion is very important in order to prove the management involvement in OH&S. If the ones under observation make something wrong,

Social responsibility

the manager explain them how to proceed in order to work completely safe, or if the employees perform their activity in a safe way, they will be congratulated by the manager. 4. “Passion for Safety” project At Corporate level, a very important project has been started. “Passion for Safety” project is an action plan designed to improve the OH&S performance. This action plan combines the local action plans with the regional ones, training with the regional work meetings, the best Holcim practices with the ones from outside the organization.

Among the multitude of the OH&S rules, we identified at corporate level 5 cardinal rules considered to be life-savers: 1. Do not override or interfere with any safety provision (nor let override or interfere anybody else). 2. Personal Protective Equipment (PPE) rules applicable to a given task must be adhered to at all times. 3. Isolation and lockout procedures must always be followed. 4. No person may work if under the influence of alcohol or drugs. 5. All injuries and incidents must be reported. These rules are applied without compromise starting with January 1st 2007. Any violation of these cardinal rules can lead to canceling the work relationship between Holcim and the one who doesn’t observe these rules. Implementation of these rules in Holcim (Romania) has been done by a work group assigned at national level with members from each cement plant, members from RMC and Aggregates Division, members within the Employees Union and members of OH&S team. Having a strong support from the top management, the first actions in 2006 were the following: • OH&S Holcim Pocket Guide containing the cardinal rules was presented and handed over to every employee; • Introduction in cardinal rules: film for cardinal rules presentation and Power Point presentation; • Workshop with the participants to assure the complete understanding of the cardinal rules; • Starting of a 10 month communication campaign which will support the OH&S Pocket Guide and will include meetings with all personnel. The third party companies which perform activities on Holcim territory were invited to participate in all these actions and to follow all Holcim work procedures and rules.

COMMUNITY INVOLVEMENT Based on Holcim OH&S management system, the project has 4 main work directions, with individual activities, objectives and tasks. The 4 main directions are the following: • • • •

Set the culture Drive Accountability Mobilise People Manage performance

At Eastern Europe level, it has been started a regional initiative called ZERO (accidents). This initiative lead by the cement segment aims to achieve a unitary approach at Eastern Europe level of “Passion for Safety” corporate action plan. All the actions within the “Passion for Safety” action plan have been achieved in Holcim (Romania) under the umbrella of ZERO Project. 4.1 Holcim cardinal rules One of the most important actions within ZERO project was to implement in Holcim (Romania) the Holcim cardinal rules.

Social responsibility has always been a cornerstone in the activities of the our company for a sustainable development. As a good citizen, Holcim (Romania) runs various programs in the benefit of the communities around its facilities. Holcim (Romania) is also engaged in various projects related to medical care, education, local sport competitions, playgrounds and recreational facilities. More details at www.holcim.ro www.societatedurabila.ro In April 2006, Holcim launched www.societatedurabila.ro, the first internet portal in Romania that provides the general public with information, ideas and valuable projects related to sustainable development. The website is a virtual interactive space designed for those who want to actively involve in maintaining a healthy environment, in preserving the ecological balance and in developing social responsibility actions. The project is run in partnership with National Environmental Guard and Ministry of Labour, Social Solidarity and Family.

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Social responsibility

Help for flood victims Holcim (Romania) continued to support the victims of the floods. In 2006 the company donated 40 tones of cement, 20 tones of Tenco binding material for masonry and rendering works, 50 mobile concrete mixers and 50 wheel barrels. These materials will help families in Rast, Dolj county, to rebuild their homes destroyed by the floods.

The educational program took place between April 10-16 and June 12-18 in Alesd, Campulung si Turda. The training courses dedicated to personal development provided 120 high school students in 11th grade with motivation and self-confidence and taught them strategies for succeeding in private and professional life. Apprenticeship School for Cement Industry Technicians The first generation of students from the Apprenticeship School for Cement Industry Technicians graduated this year the two-year program. Presently, the 14 graduates are enrolled in the one-year internship work program, as employees, in one of the three cement plants of Holcim (Romania) in Alesd, Campulung, or Turda. In September 2006, the second generation of students started the courses of the Apprenticeship School for Cement Industry Technicians. The 15 young people benefit from a two-year theoretical and practical apprenticeship program, and one-year practical training. At the end of the program, which is fully funded by Holcim (Romania), the students receive a diploma recognized by the Ministry of Education and Research and have the possibility to work within Holcim (Romania). Open Days Events in Cement Plants

“Create your environment” Following its success in 2004 and 2005, the project launched by Holcim (Romania) and Concept Foundation, in partnership with the Ministry of Education, was extended in 2006. The project is implemented in 20 cities across the country and aims to develop a protective civic behavior towards the environment within pupils in Romanian elementary and secondary schools (3rd to 7th grade). “Create your environment” was complemented in 2005 by the launch of a website www.ecoman.ro - where children can learn about environmental protection and play an educational online game. “Build your future” Holcim (Romania) and Corporate Dynamics International organized in 2006 the 2nd edition of “Build your future”.

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The Open Day events in the cement plants of Holcim (Romania) are part of the open dialogue and transparent communication of the company with all stakeholders. The second edition of the event, which took place in 2006, focused on issues related to the environment. In Turda, “Together for a future without pollution” brought together Holcim (Romania) employees, authorities and massmedia representatives. The participants arranged an area of Tineretului Park with flowers, shrubs and benches, in the vicinity of the playground space inaugurated in 2005 by Holcim (Romania) and Turda local authorities. In Campulung, more than 2000 participants (central and local authorities, clients, media representatives) attended the Open Day event with the theme “Quarries rehabilitation: a sustainable initiative”. During the visit to the Dealul Hulei- Mateias limestone quarry, the guests were provided with information about the continuous rehabilitation of the quarries Holcim (Romania) runs and operates. The program for the day also included a concert, activities for children, various surprises.

Social responsibility

“We care” contest “We care” contest has already become a tradition among the social responsibility projects organized by Holcim (Romania). The competition was initiated in 2002 with the objective of demonstrating the capacity of youngsters to identify environmental problems and suggest solutions.

The competition was launched by the Swiss-based Holcim Foundation for Sustainable Construction in collaboration with five of the world’s leading technical universities in 2004. The Holcim Awards aim to promote innovative, future-oriented and tangible sustainable construction projects and reinforce stakeholder awareness of the importance architecture, engineering, and construction have in achieving a more sustainable future.

The second Holcim Awards competition to promote sustainable construction worldwide will open for entries via Hocim Foundation website (www.holcimfoundation.org) on June 1, 2007. The first phase of the competition will select regional winners in 2008 that will automatically qualify for the global competition to be held in 2009.

HOLCIM AWARDS In 2006 USD 1 million in prize money was awarded to the best sustainable construction projects entered in the first global Holcim Awards competition. Joint winners of the Holcim Awards Gold were an urban integration project in Caracas, Venezuela, and the design for a new main railway station in Stuttgart, Germany. The winners were selected from 15 finalists from all continents, following on from a series of five regional competitions with more than 3,000 submissions from 118 countries. The Holcim Awards Silver went to a regional masterplan and renewal strategy for the Mulini Valley near Amalfi and Scala, Italy, Holcim Awards Bronze to a low-cost housing and urban renewal project in Montreal, Canada. The 22 entries from Romania proved that Romanian architects and construction engineers are capable and well-trained professionals.

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“Our 10th anniversary in Romania is approaching. In these 10 years we have concentrated not only on our own development, but also on the progress of the society we are part of.” Nicoleta S`l`jan, Human Resources Director

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