NURTURING LIFE Corporate Sustainability Report Zuari Industries Limited

NURTURING LIFE 2010-2011 Corporate Sustainability Report Zuari Industries Limited Contents About this report 01 Zuari at a glance 02 Awards 05 ...
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NURTURING LIFE 2010-2011 Corporate Sustainability Report Zuari Industries Limited

Contents About this report

01

Zuari at a glance

02

Awards

05

MD’s statement

06

Defining sustainability priorities

07

Moulding partnerships

08

Trust through transparency

09

Creating shareholder value

11

Caring for the planet

15

Developing responsible products

21

Investing in people

27

Fostering a safety culture

31

Enriching communities

37

Disclosure on management approach

43

Assurance statement

44

GRI applicability level

46

Abbreviations`

47

GRI content index

48

Nurturing Life nurture: nutritus – Latin origin, meaning ‘to nourish’. nurture: care, encouragement and support given to somebody/something while they are growing – Oxford dictionary definition

Nurturing life is the main focus of Zuari Industries Limited through our products and initiatives. Fertilizers have been used since time immemorial to improve crop yield and quality and we have taken this forward to make products that help farmers grow better crops, earn better wages and live better lives. Food security is essential for progress and growth and contributes greatly towards a nation’s development. Our products are tailor made for our nation and they are key towards ensuring a future where nutritious food is available for all. We nurture not only crops but lives – our major stakeholders such as the farmers and their families, our own employees, our dealers and suppliers and well as the communities in which we work are all given their due importance and we ensure their growth by contributing towards it. For the farmers and their families we organize several initiatives aimed at building their capacities for optimizing the use of fertilizers. Initiatives like soil health mapping, appointment of ‘krishi salahgars’, demonstration farms and farming workshops have helped several farmers to adopt correct and modern agricultural practices and produce a better yield. Employees are our most important asset and we ensure their well-being by providing a safe and ure workplac secure workplace, appropriate remuneration and a host of other welfare ctivities. For dealers and sub-dealers, we organize ze training tra activities. programs to regularly update them with technical knowledge e about u use of agriculture inputs and n m better cconnect o new products launched to help them with the ultimate consumer. As a responsible corporate,, we take takke e care of our communities and ensure their growth with ours. We contribute co conttrib bute towards growing our shareholder’s wealth through rich dividends and a steady share r index. price Nurturing life is what we do and will continue to do, through our products pr produ and d our actions.

1

About this report

We are happy to present Zuari Industries Limited’s first corporate sustainability report for the financial year 2010-11 with an objective of transparently disclosing our non-financial performance. The report gives an account of the various risks and challenges that we have faced and continue to face while integrating sustainability into our business processes. We have showcased our systems and strategies to address stakeholder concerns and expectations. The report also covers sustainability areas where our performance was unsatisfactory along with an action plan highlighting the corrective actions taken or planned. The data and information is pertaining to our fertiliser manufacturing facility at Goa. Since this is our first report, we have excluded our joint ventures and subsidiaries from the report scope but have plans to include them in the near future. We believe that third-party verification of the data and information presented will provide an objective evaluation of our reporting process and also enhance its credibility. Therefore, we engaged KPMG to provide external assurance on this report. Through this report, we have addressed the requirements of t (MPCBM3FQPSUJOH*OJUJBUJWFT(3*HVJEFMJOFT t *OUFSOBUJPOBM'FSUJMJTFS"TTPDJBUJPOTQSJODJQMFTPO4BGFUZ )FBMUI BOE&OWJSPONFOU t 6OJUFE/BUJPOT(MPCBM$PNQBDUQSJODJQMFT External feedback on our report will help us to better our systems and processes. We solicit your feedback on this report. Please send your comments, opinions and suggestions on the report to: Binayak Datta $'07JDF1SFTJEFOU'JOBODF ;VBSJ*OEVTUSJFT-UE Email: [email protected]

Zuari at a glance

Zuari Industries Ltd, established in 1967, is a public limited company and a part of the KK Birla Group of companies. We are dedicated to the cause of enhancing the prosperity of the Indian farmers through development of a wide range of products that would benefit them. We work as "total agri-solution providers" including high quality seeds, high quality plant protection chemicals, micro-nutrients, organic and water soluble fertilisers and animal health services. We also advise farmers on Integrated Nutrient Management (INM) and Integrated Pest Management (IPM) practices.We manufacture urea and complex fertilisers of various grades at our manufacturing facility in Goa. Agricultural inputs such as insecticides, fungicides, weedicides, micronutrients, compost and seeds are either traded or have been outsourced to independent parties. The Goa manufacturing facility comprises four plants: Ammonia, Urea, NPK A and NPK B. These plants produce Urea, Di-ammonium Phosphate (DAP) and NPK (Nitrogen, Phosphorous, Potassium) based fertilizers through the latest pipe-reactor technology and slurry granulation process. The total annual plant capacity for Urea is 0.399 million

tons, for DAP is 0.35 million tons and for NPK is 0.35 million tons. During last couple of years, we have taken number of steps to expand our marketing territory, in line with our vision to have pan-India presence. Today, our product portfolio includes almost full range of agri inputs required by the farming community, such as fertilisers, pesticides, micronutrients, speciality fertilisers, compost etc. We cater to our primary markets of Maharashtra and Karnataka mainly from the Goa plant, while distant and new markets such as Andhra Pradesh, Tamilnadu, Kerala and Gujarat are taken care through imports. Our fertilizers are marketed under the name “JaiKisaan” – a brand that enjoys a preferred brand status and is a household name amongst farmers in the areas where we operate. Further, through JaiKisaan, we also contribute to the advancement of the agricultural community in the form of educational programs and developmental projects. The following table illustrates our market position1 in India.

JaiKisaan Bhawan, Zuarinagar, Goa

2

3

Zuari at a glance

Board of Directors

Audit Committee Investors Grievance Committee Other Committees

Chairman

Managing Director

Senior Management President Agribusiness

CFO & Vice President Chief General Finance Manager Operations

Vice President Special Projects

Chief General Manager and Company Secretary

General Manager Human Resources

Administration and support Functions

Over the years, we have diversified into a variety of sectors like furniture, oil tanking, seeds, and investments; delivering quality products at competitive prices to the end consumer repeatedly. The Zuari Group is made up of both subsidiary and joint venture companies as follows: Subsidiary companies: 1. Indian Furniture Products Ltd. 2. Zuari Seeds Ltd. 3. Simon India Ltd. 4. Adventz Infraworld India Ltd. (AIIL) 5. Gulbarga Cement Limited (GCL) 6. Zuari Fertilisers and Chemicals Limited (ZFCL) 7. Zuari Holdings Limited (ZHL) 8. Globex Limited (GL) 9. Zuari Management Services Limited (ZMSL) 10. Zuari Investment Ltd. 11. Zuari Insurance Brokers Limited (ZIBL) 12. Zuari Commodity Trading Limited (ZCTL) 13. Zuari Financial Services Limited (ZFSL) Joint venture Companies: 1. Zuari Indian Oiltanking Ltd. 2. Zuari Maroc Phosphates Ltd. 3. Zuari Rotem Speciality Fertlisers Ltd.

“adventz” – A new corporate identity The Group has developed a new corporate identity, “adventz”, with a view to harness and harmonise the vast reservoir of human talent, technological know-how and other resources in a collaborative, inclusive and sustainable manner so as to drive India’s development and progress. The new logo adopted as part of the corporate identity symbolizes Group’s deep commitment to the two fundamental drivers of the Indian economy: Agriculture and Industry

Zuari at a glance

Fertilisers

Herbicides

JaiKisaan Urea (46%N)

JaiKisaan Samrat

JaiKisaan Samarth

JaiKisaan Sampurna

JaiKisaan Sampanna

JaiKisaan Muriate of Potash

JaiKisaan Sampatti

JaiKisaan Sulphate of Potash

Bensaan 50

Hexaan

Copper 25

Jk Cyclo

Copsaan 50

Mancomet

Mancosaan M-45

Specialty Fertilisers

Specialty Fertilisers

Insecticides

Poorna 19

Boost 52

Atom 61

Calnit 19

Boon 45

Sulpho 50

Granubor Natur

Zinc Sulphate

Gandhak Aphasaan 75

JK Cartap

Carbosaan

JK Imida- CNI

Carbyl 50

JK Indoxa

Chlorosaan

Lamda - 2.5

Clocyp - 505

Lamda 5

Cypersaan

Monosaan 36

Cypsaan

Phorasaan

Dilosaan

Profenosaan

Dozer

Quinasaan

Supreme

Zuari’ product range

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5

Awards

Zuari was awarded the ‘Manikant Hiralal Memorial CSR Excellence Rolling Trophy’ for the best performance in Corporate Social Responsibility for 2010 by GTS and IFB, Goa.

Zuari was bestowed with the ‘Gold Medal for Best Workplace Practices’ for 2010 by GTS and IFB, Goa.

Zuari was awarded the ‘Gold Medal for Excellence in Education’ for 2010 by GTS and IFB, Goa.

Zuari received ‘Gomant Sarvochcha Suraksha Puraskar’ (First Prize) from Green Triangle Society, Goa in association with the Inspectorate of Factories & Boilers for the most outstanding safety performance in occupational safety, health and environment.

Zuari bagged the Fertiliser Association of India’s award for ‘Excellence in fertiliser extension services’, for the year 2009-10.

Mission Statement We shall maintain Market Leadership through Cost Effective Growth & Create and Retain Delighted Profitable JaiKisaan Farmer

MD’s statement

It gives me great pleasure in introducing our first corporate sustainability report delineating our non-financial performance across the economic, environmental and social bottom-lines. Agriculture is poised to be the keystone for economic growth and social development in India. More than 30 percent of Asia’s irrigated land is in India. We have the highest proportion of arable land as compared to USA and China. However, this land is underutilised. Israel produces US $5.8 million in agriculture output per square kilometre of arable land, while India produces just US $88,000. This means there is plenty of potential waiting to be harnessed. With corporate involvement and the implementation of technology and modern methods of farming, farmers will be able to reap rewards. The Indian fertiliser industry has played a pivotal support role to the Indian agricultural industry. The growth in the use of chemical fertilisers amongst farmers has been the secret of the nation’s green revolution of the late sixties. The main fertilisers used include phosphate based fertilisers, nitrogenous fertilisers, and complex fertilisers. Today India is the third largest fertilizer producer in the world. During last five years, we have added a number of new products to our existing portfolio including pesticides, speciality fertilisers, micronutrients, compost, etc. Adhering to a single window concept, our network of 2,100 dealers and over 5,000 retailers ensures regular and timely availability of essential agricultural inputs to farmers in the marketing territory. “JaiKisaan” continues to be a preferred brand in all our primary marketing territories. To have more exclusivity, we plan to introduce the concept of JaiKisaan stores in the primary markets, to fulfill major requirements of rural markets. Our new soil testing laboratory and telephone “help line” service at Tirupati will enhance the agri-related services provided to customers in Andhra Pradesh and Tamil Nadu. Our market development program is supported by a well designed customer relationship management, “JaiKisaan Sangam.” We have registered over 47,000 farmers as members of this program and they are serviced regularly through “JaiKisaan Krishi Salahkars” stationed at strategic locations. We plan bring in more farmers under the program and strengthen our customer base. Farmers and their families, employees, local communities, and shareholders have been identified as our primary stakeholders. We have initiated several interventions

address issues and concerns raised by these stakeholders. For the farmers and their families, we have launched several programs aimed at building the capacities of farmers and their families with an intention to increase their earning capacity. Apart from regular HR practices, we have conducted an employee perception survey through a third party. For the neighbouring communities: health, sanitation and drinking water related issues have been identified for creation and deployment of programs. We are also focussing on encouraging plantation inside and outside the plant premises. We have demonstrated high levels of competency and commitment towards water consumption for urea manufacturing. Over past 25 years (1985-86 to 2009-10), we have indigenously reduced process water consumption by over 45 % from 14.4 to 7.8 cu.m/MT of urea production. Further in the same period, we have reduced the specific energy consumption for urea production by over 18 % from 8.41 to 6.85 Gcal/MT. With respect to use of our products viz. fertilizers and pesticides, we have identified few areas of concern in line with global best practices. These include soil health mapping, customization of fertilizers, sustainable crop production including water conservation, weed and pest management, and crop health monitoring. Further, we have also planned research around use of combination (organic + chemical) fertilizers, products that help in slow release of nitrogen, improving fertilizer customization, etc. There is strategic focus on health and safety management: for on-site as well as off-site areas. We have deployed excellent on-site safety measures and also conducted several rescue operations involving other industries. This is well supported by a monthly safety bulletin that is used to internally communicate our safety performance. The impact of our activities on society and the environment is multifaceted and involves a wide range of direct and indirect stakeholders. When assessing our impact we look at our environmental footprint, the health, safety, security and labour aspects, and our impact on society as a business enabler. Constructive feedback will help us to better our systems and processes. I cordially invite your feedback on this report.

Suresh Krishnan Managing Director

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Defining sustainability priorities

The fertilizer industry on account of the inherent nature of its operations faces several sustainability risks and challenges. While most of these are applicable to us, our operations have their own sustainability risks and challenges. In order to identify issues that are most material to our operations, this year instituted a formal process involving our internal stakeholders to start with. These issues have a significant impact on our operations and cover environmental, social, financial and regulatory concerns. Though we focussed only on internal stakeholders in this year, we intend to expand the scope of the materiality assessment process to cover our external stakeholders as well. Following is a graphical depiction of our materiality analysis process:

Voluntary Guidelines

Stakeholder Concerns

Government directives

Engaging with our stakeholders is a critical part of our journey towards a sustainable future. We need the valuable opinions, concerns, insights and constructive feedback from all our stakeholders in order to design our products and initiatives. Engaging stakeholders through a process of dialogue, mutual commitment and trust has helped us in many different ways to meet shared challenges and reach common goals. We have identified farmers and their families, employees, dealers and sub-dealers, communities and shareholders as our priority stakeholders. Our deep engagement with the farming community, innovative market development initiatives, grass-root level farmer education programs and training workshops have triggered new opportunities of growth for farmers, equipping them to meet the challenges ahead. We have taken great efforts to engage with the farmers in many ways: through training sessions, by setting up a helpline to address their queries through renowned agriculture experts, by creating JaiKisaan Sangam – one stop shop for our products, which can

Global Scenario Identification Identificationof ofuniverse univers of material issues

Industry Dynamics

Research Studies

Prioritization of material issues Materiality Filters

Internal Stakeholder Interaction

Review and finalization by top managment

Finalizes Material Issues

This year we identified the following six material issues: t t t t t t

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Farmer training program

Moulding partnerships

Field day organised by Zuari Industries Limited

be accessed by the farmers at all times. Informal surveys are conducted to determine the inputs of various farmers, which guide us in understanding our market better, and enable us to create innovative and effective products. We work closely with farmers across states, educating them in the use of fertilisers and ensuring that agriculture as a whole prospers in the markets covered by us. Till now we have successfully conducted several seminars on yield enhancement of paddy, coconut, cashew nut, mango, pomegranate, sugarcane, etc. Employees are our greatest asset and we have paid special attention to their needs over the years. We have deployed several welfare initiatives for our employees like providing a township, conducting job related trainings to enhance their skills, conducting health camps for them and their families, conducting safety and first aid trainings amongst others. This year we conducted an employee satisfaction survey to gauge their contentment levels, the results of which are awaited. We promote a healthy work-life balance and have created a number of facilities to inculcate it. Upholding the right to collective bargaining, we recognise and respect the trade union created by our non management employees. We have over 2600 dealers and 7890 sub-dealers that market various brands of fertilizers and other agri-inputs. We conduct regular dealer meets, and supplier meets where we exchange ideas and address needs of our dealers and suppliers. In the reporting year, we organised dealer meets for Vijayawada, Pune, Bellary, Hubli, Kolhapur, Aurangabad and Bangalore area dealers. Our work with the local communities situated around our manufacturing location is a testimony to our commitment

towards improving their quality of life. Health, sanitation and drinking water have been identified as key issues related to neighbouring communities for creation and deployment of programs. Further, we engage with local non-governmental organizations on a regular basis to better understand the needs of the people and accordingly plan our interventions. Our investor base is widely diversified and we believe in providing timely communication on our company’s financial performance, corporate governance and future business strategy. Presently, our shareholders are widely distributed across the country and our means of communication include publication of quarterly financial performance in leading national newspapers, annual general meetings, webcasts and conference calls. Additionally, our sustainability report will communicate ZIL’s non-financial performance to our investors and shareholders. Local Government and regulatory agencies are a key group of stakeholders with whom we engage through official correspondence, meetings and phone calls. We also conduct mock drills and emergency response sessions with related Government departments and liaise with regulatory agencies regarding impending regulations, policy formulation and various other relevant matters. We have a stringent screening methodology for selecting our vendors and most of them have partnered with us since the past 30 years. Although we do not have any specific clauses of adherence to human rights in our contracts, we ensure that our vendors are in compliance with all the applicable laws.

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Trust through transparency

ZIL’s governance framework is built on integrity, accountability and transparency. It creates long-term value by helping us to respond to the needs of our stakeholders and by mitigating risks that could affect our operations. Our governance practices and management systems define the roles and responsibilities of our Board of Directors and Management. These practices and systems are designed to embed sustainability at all levels in our organization. We are in full compliance to the requirements of Clause 49 of the Listing Agreement. ZIL’s Board of Directors comprises 10 members that include the Chairman, Executive Vice Chairman, Managing Director and seven non-executive Directors as listed below. Name of the Director S.K.Poddar H.S. Bawa2

Position Promoter / Chairman Executive Vice Chairman

Suresh Krishnan3

Managing Director

Shyam Bhartia

Non-Executive Director

Arun Duggal

Non-Executive Director (I)

D.B. Engineer

Non-Executive Director (I)

J.N. Godbole

Non-Executive Director (I)

Jyotsna Poddar

Non-Executive Director

S.P. Tyagi

Non-Executive Director (I)

Marco Wadia

Non-Executive Director (I) (I) Independent

The Board functions in committees as listed below:

conjunction

with

the

t "VEJU $PNNJUUFF The Audit Committee comprises of four independent non-executive Directors. The role of the Audit Committee includes review of our financial reporting processes and financial statements, accounting and financial policies and practices, the internal control and internal audit systems, risk management policies and practices and internal audit reports. The Committee also makes recommendations to the Board regarding re-appointment of statutory auditors and fixation of audit fees. t *OWFTUPST (SJFWBODF $PNNJUUFF The Investors Grievance Committee comprises of two independent Directors and an Executive Director. This Committee oversees share transfer work and recommends measures to improve the level of investor services. Besides, the Committee also looks into Investor Grievances such as non receipt of dividend, Annual Reports and other complaints related to share transfers. t 0UIFS $PNNJUUFFT The Board has constituted committees for Banking & Finance, Management Compensation for Employee Stock Options and Unaudited Financial Results. The Board may from time to time constitute one or more committees delegating powers and duties for specific purposes. The committee meetings are held on a need basis and at such intervals as may be expedient.

A vview ew of of th the p plant nt 2 Appointed as Executive Vice Chairman w.e.f. 1st September, 2010 201 3 Appointed as Managing Director w.e.f. 1st February, 2011

Trust through transparency

Aerial view of the plant and the Arabian sea beyond

During the year under review, six Board meetings were held to discuss a wide range of issues. The Board also oversees the risk management of our company. The committees of the Board help in carrying out this responsibility by focusing on specific aspects of risk. Code of Conduct and Ethics We have adopted a “Code of Conduct and Ethics” for our Directors and Senior Executives. The purpose of the Code is to promote ethical business conduct for ensuring efficiency and transparency in meeting our obligations to stakeholders. The Code of Conduct is a comprehensive document that forms the basic paradigm of business operations across all levels of our organisation. The Code of Conduct covers, amongst other topics, aspects of regulatory compliance, respect for individuals, fair dealings, bribery and corruption, honest and ethical conduct, corporate social responsibility, insider trading, safety, health and environment. We maintain a strong commitment to anti-corruption practices in all of our operations. To ensure compliance, our employees and contractors are prohibited from making improper payments to, or engaging in unacceptable transactions with Government officials to influence their official duties as required under the ‘Code of Conduct’. There were no instances of non-compliance on any matters related to the capital markets during the last three years.

Internal control systems We have adequate internal control systems which focus on protection of resources, sound financial management, roles and authorities and compliance with statutes and regulations. There is a structured internal audit program along with a reporting, discussion and a follow up system. The Audit committee reviews the internal audit reports and its suggestions. We have also deployed a structured internal control program involving a risk profiling and management structure for assessment, mitigation and review of risks. Public policy and advocacy Being in a tightly regulated industry, we track proposed legislation and engage with the Government to emphasize our position on policies that impact our operations. Lobbying and advocacy activities are necessary to ensure the company’s long-term success and protect stakeholder value. ZIL’s senior management members are part of bodies like Goa Chamber of Commerce, Goa Management Association, Green Triangle Society, Fertiliser Association of India, National Institute of Personnel Management, etc. We work hard to formulate public policy and engage in constructive dialogue for the benefit of the agriculture industry.

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Creating shareholder value Creating wealth for our shareholders in a responsible manner is the prime agenda of our business. ZIL’s business decisions have been always guided by our values and robust governance principles. As we expand our operations, we look toward forming partnerships that create long term value.

12

An evening view of the plant

13

Creating shareholder value

It is forecasted that, by 2025, India will require4 45 million tonnes of nutrients (N+P2O5+K2O) to produce 300 million tonnes of food grains for an estimated population of 1.4 billion. The dependence on fertilisers and other nutrient sources will increase if the rising food demand of the ever-growing population is to be met. National food security will remain a priority for the agricultural and fertiliser policies in India. Considering the low per hectare fertiliser use and crop yields, India has a good potential to increase crop productivity by increasing the use of inputs. Fertilizer use will remain a key aspect in the future development of agriculture. We are amongst the leading fertiliser producers in India and are in a good position to capitalize on the opportunity that the future presents. Our long term plan is to achieve sustainable growth while ensuring that we nurture lives at all levels. Being in a tightly regulated business, our growth plans are often affected by the overall framework of Government policies. The main objective of the fertiliser legislation is to ensure timely and adequate availability of good quality fertiliser throughout the country at affordable prices and in a balanced form. The Government regulates the supply of fertilisers through seasonal allocation to different states. To ensure adequate distribution, the Government fixes the maximum retail price. In spite of increase in cost of fertilizers, the Government has completely kept the farmers insulated from this increase in cost and have increased the subsidy allocations to meet the consumption needs of the farmer at subsidized level of prices. The subsidy on fertilizers has been increased sharply over the last few years. There have been major policy initiatives in the fertilizer sector during the year. The nutrient-based subsidy

scheme for Phosphatics and Potassic fertilisers was introduced with effect from 01 April 2010. Under the nutrient based subsidy scheme (NBS), Government now pays a fixed subsidy per kg of nutrients N, P, K and S contained in P & K fertilizers and have laid down a rate per ton of fertilizers. This has been fixed keeping in view the international prices, local demand and soil requirements. We design our business plan keeping in mind the volatility of the market scenario and factor in all the external risks like weather and monsoon conditions as well as policy changes regarding fertilizer production, use and agricultural output enhancement exert significant. During the year, our revenues touched close to INR 55 billion, representing an increase of 29% over last year while our profit increased by 6.32%. Total Urea production during the year was 397,854 MT. Economic Value Generated Revenues

55,228.28

Economic Value Distributed Operating Cost

47,991.20

Employee wages and benefits

794.67

Payments to providers of capital

132.48

Payments to Government Economic Value Retained

4464.20 1,845.73 All values in INR million

While we prefer to procure raw materials from within the country, by virtue of their nature, most of our raw materials are imported. For instance, in the production of phosphatic fertilizer most raw materials have to be

4 Fertiliser use by crop in India : Study by Food and Agriculture Organization of the United Nations

Creating shareholder value

14

A twilight background

At the time of installation, our plant was the largest industrial undertaking in Goa, acting as a catalyst for economic growth in the neighbouring areas. We continue to be one of the biggest industrial setups in Goa and have

spawned a huge network of employment opportunities over the years. Being an employer of choice is one of our main focus areas and we strive to provide our employees with the benefits and compensation they deserve. This year we allocated INR 794 million towards employee wages and benefits. Our defined benefit plan obligation for gratuity was INR 231.8 million as on 31st March 2011. Contribution to employee wages and benefits

INR Million

imported. India has no source of elemental sulfur, phosphoric acid and rock phosphate. Approximately 5% of our raw materials are procured from India, the rest are purchased from international markets. During the last five years, we have added a number of new products to our existing portfolio including pesticides, speciality fertilisers, micronutrients, compost, etc. Adhering to a single window concept, our network of over 2,600 dealers and over 7,890 retailers ensure regular and timely availability of essential agricultural inputs to farmers in their respective marketing territories. “JaiKisaan” continues to be a preferred brand in our primary marketing territories and we have developed exclusive stores for JaiKisaan. In Andhra Pradesh, Tamil Nadu and Kerala, our brand has gained strength owing to a wide range of products and services provided to farmers.

800 700 600 500 400 300 200 100 0

758.65

794.67

554.54

F.Y 2008-09 F.Y 2009-10

F.Y 2010-11

15

Caring for the planet We are cognizant of the threat caused by industrial activity on the environment and our focus has always been to ensure that the life around our operations is not affected by our activities. Through our numerous initiatives we have created energy efficient, eco-friendly and resource conserving processes along with protecting and nurturing habitats.

16

The Hollant beach viewed from the plant

17

Caring for the planet

Conserving the environment is crucial to all our business operations. We have developed and implemented a wide spectrum of environment management initiatives, including treatment and recycling of effluent, emission control, energy conservation and training of employees. We are one of the cleanest and most environment-friendly fertilizer plants in the country. The Washington based World Watch Institute has in it is ‘State of the World’ report made a special reference to our efforts towards environment protection. Close to 90% of our product dispatch is through rail and only 10% is through road, thus significantly reducing our overall emission footprint due to logistics. Further, we are conducting a feasibility study to optimise transportation of phosphoric acid by replacing the current road tankers with a direct pipeline for sourcing the acid. We have planned to establish a ‘logistics hub’ where we stock our products so that our farmers have the convenience of availing all our commodities at a centralised location and need not travel long distances to purchase them. This would help us in increasing the efficiency of our logistics network while reducing our greenhouse gas emissions. This year we have spent close to INR 1.75 million towards the upkeep of environment. All values in MT

supplies meet only 5-10%5 of the total requirement of P2O5 which significantly increases the burden of imports on us. Our final product is dispatched to our consumers in fixed size bags as stipulated by the regulation on standard weights and measures. We procure these bags from a third party vendor and directly use them in our bagging section. We take all required precautions during the movement of our materials, and impart regular trainings to our workers on the safe handling of the same. We ensure safe disposal of our hazardous waste through recyclers authorised by the State Pollution Control Board. The hazardous waste generated in our plant largely comprises used oil, spent catalyst, ferrous waste and empty drums. ZIL launched ‘Project Uday’, a drive to convert bio-degradable waste from canteens, offices and households in our town-ship to vermi-compost. Vermi-compost contains adequate quantities several micro-nutrients that make it a preferred choice for organic farming. The current yield of the project is close to 200 kgs of compost fertilizer per week.

FY 2008-09

FY 2009-10

FY 2010-11

Filler

32,670.37

42,179.84

39,780.28

Naphtha(Process)

121,554.36

116,533.16

118,637.6

Ammonia (Imported)

89,237.36

129,999.63

101,272.52

Phosphoric Acid (As P2O5)

185,407.12

265,337.36

212,037.7

Muriate of Potash

147,207.90

128,508.44

197,021.57

Mono Ammonium Phosphate

15,763.07

0.00

0.00

Purchase Urea

10,381.52

121.41

0.00

Sulp Sulphuric Acid

14,383.32

5 36,555.15

17,246.41

44,400,333.00

33,006,052.00

32,94 3 32,942,675.00

a / Fertiliser Bags Bag Packaging material: Urea Materia Materials and Waste

a management Water

he major difficulty that we face is the uncertainty uncertai y The surrounding r the availability of raw materials. At Zuari, w we use e naphtha n manufacturin as feedstock in our fertiliser manufacturing process. es We have plans to change over to natural gas a as feedstock in next financial nancia year. This shift will also contribute towards improving mprovin ou our plant’s energy eff efficiency as conversion of natural atural gas into to nitrogenous fertilizer til is considerably lesss energy energ intensive process oc as compared to other feed-stocks. d-stocks. Apart from naphtha, htha, we also use us filler, iller, potash, ash, ammonia, ammo phosphoric acid and sulphuric acid. In case asse o off phosphates, phosp w the pa paucity off domestic raw material has been a constraint in the attainment of self-sufficiency in the country. Indigenous rock phosphate

ma issue related ed Water conservation has emerged as a major ned with w e to the fertilizer industry. This combined the deman has ever-increasing industrial and domestic demand created an overall water scarcity. The onus is on us to to oactively look at solutions that minimize our water intake in proactively ng our operations a during and enhance crop productivity w with mal water usage. s This involves understanding supp minimal supply m n at the local level, assessing potential and demand trends effects on quality and quantity, and implementing steps to appropriately address challenges. Over the years, we have drastically reduced our fresh water intake by clin the process water. We have created watershed recycling re within our premises to facilitate efficient water structures

5 Government of India, Ministry of Chemicals & Fertilizers, Department of Fertilizers – Annual Report 2009-10

Caring for the planet

Item

UOM

FY 2008-09

FY 2009-10

18

FY 2010-11

Hazardous Waste Spent oil

MT

22.47

11.44

191.86

Used black oil

drums

22.00

25.00

6.00

Used lube oil

drums

0.00

10.58

8.00

Furnace oil sludge

MT

0.00

0.00

68.44

Spent catalyst

MT

56.92

0.00

19.73

MS drums

nos

238.00

52.00

27.00

HDPE Carbuoys

Nos

1,053.00

1,067.00

254.00

MT

54.87

52.17

34.08

Non-Hazardous Waste

reuse. We have reduced the water consumption from original design of 20,000 m3/day for 1,140 MTPD urea to around 10,000 m3/day for 1,350 MTPD urea. This translates to over 57 percent reduction in specific water consumption. Our major source of water is from municipal supplies followed by surface water and ground water. During the year, we consumed 3,300,657 m3 of fresh water. We recycle close to 176,000 KL of water per year back into our process. We have created watershed structures within our premises to facilitate efficient water reuse. We have reduced the water consumption from original design of 20,000 m3/day for 1,140 MTPD urea to around 10,000 m3/day for 1,350 MTPD urea. This translates to over 57 percent reduction in specific water consumption. Our major source of water is from municipal supplies followed by surface water and ground water. During the year, we consumed 3,300,657 m3 of fresh water. We recycle close to 176,000 KL of water per year back into our process. Water consumed by source FY 2010-11

501,319 15%

Surface water (Dam water)

2,124,151 64%

Energy and emissions management The production of fertilizers is one of the most energy-intensive processes in the India. Due to its large share, the production of nitrogenous fertilizers has the greatest impact on energy use. The major determining factors for energy efficiency in this industry are capacity utilization, feed-stock, plant age and technology. Water consumed per unit of production

Ground water consumtion

675,187 21%

One of our greatest triumphs has been in achieving zero discharge. We were the first fertilizer plant in India to have achieved this. Under this system, wastewater generated due to a process in the plant is being recycled within that individual process and re-introduced for use. A hydrolyser stripper is used in the ammonia plant, allowing all condensate from the plant to be stripped with water being sent to the treatment plant and gases being utilized in the NPK plant. The ammoniacal nitrogen streams are neutralized before reuse. Additionally the streams also undergo a process of de-oiling and filtration.

Municipal supply Values in cubic metres

m3 per ton of production

Non-hazardous waste6

3.5 3.0

3.347

2.5

3.118 2.738

2.0 1.5 1.0 0.5 0.0

F.Y 2008-09 F.Y 2009-10 F.Y 2010-11

6 Non-hazardous waste includes wooden scrap, metal scrap, aluminium scrap, mixed scrap, rubber, plastic and cable scrap

19

Caring for the planet

In spite of being in operation for more than three decades, our plant has been kept agile and productive through a continuous program of preventive maintenance, close monitoring and replacement of equipment and instrumentation with contemporary technology. These activities have helped us to optimize production without compromising on the efficiency. This year a technical team headed by our VP Operations headed to Spain for discussions regarding a proposed revamp of our NPK plant that will have a direct bearing on reduction of our overall stack emissions. We are considered as one of India’a best run, completely automated fertilizer units. By maintaining high standards of efficiency and controls at every stage, we have always strived to produce high nutrient fertilizers with complete capacity utilization. This year we have taken a major stride in shifting our operations to run on natural gas feed stock instead from the existing naphtha. All necessary equipment for the conversion has been put in place and we have signed an agreement with Hazira LNG Pvt. Ltd. in September 2010 to supply natural gas.

the optimization of processes and machinery, such as air compressors, absorbers, pumps, and electric motors. This year we have implemented initiatives that have resulted in energy savings of 66,629 GJ as compared to 12,990 GJ last year. These initiatives include installation of CO2 absorption solution split stream, process air chillers and CO2 booster suction chiller as part of the Vapour Absorption Machine (VAM). In addition to the initiatives taken at the plant level, we have continuously sought to reduce our energy footprint on account of our administrative services as well. Setting up of energy efficient servers, altering construction to aid usage of optimal daylight and creating awareness about conservation through posters have been some of the initiatives under this endeavour. Our total specific energy consumption for the year stood at 6.28 (GJ per ton of production - urea and NPK grades) with majority of it being contributed through direct energy consumption (Furnace oil and Naphtha).

Direct Energy Consumed per unit of production

Total Air Emissions in MT for FY 2010-11

4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0

3.30

2.95 3.00

3.09 3.09

Furnace Oil

439.52 11%

2,846.88 71%

80.14 2%

SO2 NOX

Naphtha Fuel

Air Emissions in MT for FY 2010-11 3.0

0.20 Gj per ton produced

NH3

F.Y 2008-09 F.Y 2009-10 F.Y 2010-11

Indirect Energy Consumed per Unit of Production 0.16 0.15

SPM

649.48 16%

3.54

0.12 0.10

0.10 0.05 0.00 F.Y 2008-09 F.Y 2009-10

F.Y 2010-11

Kgs of emissions per ton of production

Gj per ton produced

Our primary response to reducing GHG emissions from fuel use is using energy more efficiently – principally implementing innovative technology solutions around

We have made a significant investment to effectively monitor air emissions with the aid of advanced technologies and are planning to use on-line, continuous ambient air quality analysers in near future. Major emissions include dust, nitrogen oxides (NOx) and sulphur compounds (SOx). For the benefit of our stakeholders, we have prominently displayed quality of

2.69

2.5 2.0 1.5 1.0 0.5 0.0

0.61

0.42 0.08 SPM

NH3

SO2

NOX

Caring for the planet

air through electronic display boards across our plant periphery. We also consumed 1.58 tons of ODS in this year. Biodiversity management Over the years we have developed a barren 550 hectare plateau into one of India’s largest man-made forests. ZIL’s environment protection program has today created a living landscape comprising 85,000 trees of over 113 varieties along with over 90,000 shrubs, which together attract over 80 species of birds. Operating close to the shore, we strive to ensure our operations do not affect the marine life. We are in compliance with the coastal regulation zone rules and have not taken up any expansion projects since the time these rules came in to force.

vegetative mapping, the study also covered classification of trees, conducting a tree census, identification of exotic species, medicinal plants, flora and fauna. Addressing climate change

Indirect GHG Emissions per unit of production

0.30 0.25 0.20

0.26 0.25 0.22 0.21

0.23 0.24

0.15

Naphtha Fuel

0.10 0.05 0.00

Furnace Oil F.Y 2008-09 F.Y 2009-10 F.Y 2010-11

tons of CO2e per ton produced

Direct GHG Emissions per unit of production tons of CO2e per ton produced

ZIL is the first company in India to undertake a vegetative mapping exercise within its industrial campus. Eco-scientists and botanists use this technique to profile existing vegetation within an area by cataloguing trees and other vegetation. This vegetative mapping project was carried out in conjecture with the Botany department of Goa University. In addition to

Energy intensity in India’s fertilizer plants has decreased gradually over the years owing to advances in technology, catalysts, better stream sizes of urea plants and increased capacity utilization. At ZIL, our strategy to reduce GHG emissions is focused on increasing energy efficiency in the short term and implementing emission-reducing technologies in the long term. Technological innovation will play a central role in our ability to increase supply, improve efficiency, and reduce emissions. This year, direct specific GHG emissions from our operations were 0.49 million tons of CO2e. Indirect specific GHG emissions from purchased electricity were 7,432 tons of CO2e. The total GHG emissions increased by 1.4% over last year to 0.5 million tons of CO2e. We envisage a decrease in our total emissions in the future on account of fuel switching from existing fossil fuels to cleaner fuels like natural gas. 0.011

0.012 0.010 0.008

0.008 0.007

0.006 0.004 0.002 0.000

F.Y 2008-09 F.Y 2009-10 F.Y 2010-11

Immobilization and containment of Arsenic and Chromium bearing hazardous wastes The ammonia and urea plants of ZIL were commissioned in 1973. In the initial years of operation the Giamarco-Vetrocoke (GV) process was employed for absorption of CO2 from process gases in ammonia plant. The process involved use of GV solution that contained Potassium Carbonate and Arsenic in Trioxide and Pentoxide forms. Due to high toxicity level of Arsenic, the GV process was replaced by a modified Benfield process in 1975. About 300 MT of spent GV solution discarded from the system was stored in a leak proof MS tank in a dyked area. Apart from this, 26 MT of discarded spent catalyst containing Chromium was also stored separately. In the absence of any guidance for proper treatment and disposal technology from Government authorities, these wastes were being stored within our premises in a safe and secured manner. A high powered Supreme Court Monitoring Committee (SCMC) on Hazardous Wastes inspected our premises in June 2004 and directed us to treat and dispose these wastes. Since the state of Goa did not have a hazardous waste treatment and disposal facility site, we were asked to contain the treated waste in an environmentally safe manner within our premises. We contracted National Environmental Engineering Research Institute (NEERI) to develop a suitable method for solidification and stabilization (s/s) of waste and disposal within the premises. Laboratory and field studies were carried out by NEERI based on the state-of-the-art s/s technology for immobilization of Arsenic present in wastes. Hydrogen Peroxide was used to convert trivalent Arsenic into pentavalent which is much more stable form and less soluble. It was then fixed with Lime and Ferrric Sulphate to form a stable complex - Ferric Calcium Arsenate, which then was solidified with Portland cement. From the field studies, addition of spent catalyst (Oxides of Fe, Cr and Cu) in crushed form was found to further reduce leachability of Arsenic. These treated wastes were then contained in an underground RCC tank, lined with HDPE liner sandwiched between two geo textile layers from all sides i.e. bottom, sides and top, to provide long term and safe final storage. Finally, the containment site was well secured by fencing all around. Eight lysimeters have been provided for checking and analyzing for any leachate. Five bore well water samples are also being analyzed for various parameters and reports are sent to SCMC, NEERI, and CPCB. The total cost of the project was approximately INR 8 million.

20

21

Developing responsible products We understand the needs of Indian farmers for effective, affordable and easily available fertilisers. We develop specifically formulated products and closely work with farmers, educating them in scientific techniques for optimal results. Our commitment to the integrity and safety of our products is based on robust agricultural research and enriching partnerships with academia.

22

Internal view of the Orchid nursery

23

Developing responsible products

Our products are manufactured keeping in mind the needs of the Indian farmer. Given that we are an agriculture based organization, we ensure that all our products are tested for safety much before their use. ZIL’s fertilisers are designed to improve the quality of the soil, yield and productivity of area of use. We also produce specialty fertilisers, fungicides, herbicides, micronutrients, insecticides and organic manure, which have been proven to be safe and effective in their functioning. Our painstaking efforts have enabled us to create products that complement and assist crop growth, giving high yields at affordable rates. Our acclaimed fertilisers are the result of ardent path breaking work in agricultural science. Our commitment to the integrity and safety of our products is evident across our operations. We were one of the first fertilizer companies in India to establish a high-tech Agricultural Development Laboratory, dedicated to the service of Indian agriculture in 1974 at Bangalore. This laboratory experiments with using micronutrients for agriculture, which plays an important role in improving farm productivity. Our laboratories were one of the firsts to be equipped with Atomic Absorption Spectro Photometers in 1979. These instruments are used to determine the amount of micronutrients in the soil. The success of this laboratory led to another similar laboratory being established in Pune followed by one in Tirupati. The laboratory at Tirupati is equipped with the latest equipments including ICP-OES (Inductively Coupled Plasma – Op`timal Emission Spectrometer). This allows testing of 72 elements, including all 13 micronutrients and heavy metals with high accuracy and within a short span of time. These laboratories are well equipped to carry out water and leaf petiole analysis. Till date, the laboratories have tested 1.17 million soil samples for NPK and about 0.16 million samples for micronutrients besides 6,259 water and 5,562 plant petiole/leaf samples. We have also launched a unique service for famers – Online Soil Test Analysis and Recommendation Reports - on our portal, to facilitate soil testing, which plays a significant role in farming. Soil testing is conducted for N, P, K as well as micronutrients. The laboratories are also equipped to undertake the testing of water, leaf, organic manure and fertiliser samples. After the soil reports are made available further guidance is provided in terms of dosage of fertilisers, micronutrients, soil conditioners etc Majority of Indian farmers are poorly organized and have a very low level of literacy. In consequence, both

Crop seminar

awareness and skill levels are in a low to medium range, and their level of motivation is very low. Evidently, persuading them to adopt new technologies and practices is a great challenge. We make judicious use of various tools such as awareness campaigns, training and demonstration programs, understanding of Government regulations, analyzing the resource pools, customizing products/services, etc. The objective is to bring the awareness, skill and motivation levels of Indian farmers to a very high level. We invite various faculties from Agricultural Research Stations, Agri Universities, and the Department of Agriculture to name a few, conduct seminars for the benefit of the farmers. These seminars act as excellent platforms for farmers to interact in person with agricultural experts getting firsthand experience. This model ensures that farmers are provided with the latest information regarding scientific techniques for crop cultivation. The seminars also enable farmers to clarify any queries they may have regarding any technique. Additionally, demonstrating how to use a fertiliser appropriately is vital for their efficient functioning. Since the early seventies, we have been conducting a demonstration programs for farmers in order to promote the use of scientific methods and fertilisers for farming. We also teach farmers to use soil test reports to judge the right type of fertiliser and the right quantity to be used at the right time. Soil testing ensures farmers know when to use fertilisers and reap the most of it. On observing the result during harvesting, farmers are encouraged to use appropriate fertilisers. Spot demonstrations are also conducted on use of fertilisers, insecticides, fungicides, herbicides, micronutrients, etc. The objective is to educate non-users regarding the benefit of using these products by inducing trials and enhancing their income from agriculture.

Developing responsible products

Crop seminars / Farmer training programs These are extension programs for farmers and the objective is to educate them on technical know-how. In case of Crop seminars, the focus is on single crop and the program is organized in areas where specific crop acreage is large. These programs are organized by inviting experts and subject matter specialists as faculties. In 2010-11, we organized 145 Crop seminars / Farmer training programs. JaiKisaan Sangam In order to forge ties with farmers and understand their needs, Zuari’s customer relationship management (CRM) program ‘JaiKisaan Sangam’ was conceived in April 2005. This program focuses on providing value-added services to the farmer. The objective of JaiKisaan Sangam is to make farming more profitable for the individual farmer by increasing his net income. This is achieved by customized services tailored to his needs, helping and guiding him to adopt scientific agricultural practices. Some services that we provide under this program include soil testing, animal health camp, family health camp and crop husbandry. In order to avail these services a farmer has to merely register under the JaiKisaan Sangam scheme.

field demonstrations are offered to farmers on a regular basis Soil testing services Soil testing is the basic service offered to all JaiKisaan Sangam registered members. JKS collects soil sample from a farmer’s field and sends it to our laboratory at Bangalore or Pune. Soil testing is conducted for N, P, K as well as micronutrients. The laboratories are also equipped to undertake the testing of water, leaf, organic manure and fertiliser samples. The soil test reports are made available to the farmers in a month’s time. Based on these reports, JKS provides further guidance on dosage of fertilisers, micronutrients, soil conditioners etc. For the members of JaiKisaan Sangam, all analytical services are free of cost.

Our soil testing laboratory

JaiKisaan Sangam Varta JaiKisaan Sangam Varta is a quarterly magazine on agriculture, delivered by hand to JaiKisaan Sangam members. Published in colloquial language for easy understanding, the newsletter contains articles on important topics relevant to the needs of farmers. The newsletter has an FAQ section, which provides a forum for farmers to get advice from the experts. JaiKisaan Sangam farmer meeting

JaiKisaan Krishi Salahakars (JKS)

A skilled team of about 200 field workers, known as JaiKisaan Krishi Salahakars (JKS) is working in our marketing area. Each JKS covers around 10 to 15 villages and provides a complete agricultural solution to around 250 to 300 farmers. About 50,000 farmers have registered in the system and have benefitted from their services. Various services like soil testing, farmer training programs, animal health care, family healthcare and

Poorna Surakhsa Yojana We have taken an initiative to protect our farmers in its marketing area by providing them with a personal accident cover. The coverage includes accidental death, permanent total disability, partial permanent disability and death or disability caused by snake bite or electrocution. We intend to provide cover for all 50,000 registered farmers with a personal accident cover of INR 100,000 each up to an age limit of 70 years. Till date, we have settled three claims amounting to a total of INR 240,000.

24

25

Developing responsible products

Zuari Agri park - Model farm at Solapur

Hybrid paddy demonstration

Zuari Agri Park, in Solapur is our model farm where we organise practical demonstrations for showcasing the modern technologies in crop cultivation. This year, we organized field demonstrations on new crops such as marigold, drumstick and sugarcane. A large number of farmers from the neighbouring areas of solapur district visited the Zuari Agri Park and acquainted themselves with the modern practices in farming. We also showcased a high tech auto controlled micro irrigation system for 25 acres of the farm. ZAP uses software- farm ERP for managing all activities of the farm.

In July 2009, we held a demonstration on use of hybrid paddy seeds at Sangolda, Goa. Method demonstration was conducted to emphasize transplanting of single seedling per hill to get more tillers for ensuring higher yields, while reducing the seed cost. This was achieved by increasing awareness about the super yield potential of hybrid paddy through demonstrations. We had planned about six such hybrid paddy demonstrations throughout Goa. Goan soils are deficient in micro nutrients like boron and zinc and farmers were urged to use these micronutrients along with NPK grades of fertilizers for ensuring higher yields. We explained the salient features of hybrid paddy, KRH-3, which is suitable for Goan soils and climactic conditions. The average yield that could be achieved by the farmers is 28 to 30 quintals per acre with proper management.

Dealer meetings We organize dealer meetings once in two years for each region. The objective is to strengthen the tie-up with Zuari dealers through direct interaction of dealers with management and resolving their issues. Dealer meetings are held at a tourist destination in order to give the dealers some time away from routine work. During this year dealer meetings were organized for Hubli, Pune, Aurangabad and Vijayawada regions.

Dealer meeting

Sub-dealer training programs Sub-dealer meetings are organized mainly for sub-dealers attached to our dealers in their respective marketing areas. Sub-dealers play a key role in reaching company products to ultimate consumers. Through such meetings we regularly update them with technical knowledge about use of agri inputs and new products launched. This helps in carrying right message to the ultimate consumer. In 2010-11, we organized 33 Sub-dealer training programs

Mechanised paddy transplanter With the escalating cost of labour and its growing scarcity, the mechanized paddy transplanter is an ideal solution to the local paddy growers, as it has the capacity to transplant one acre of paddy in just 2 hours, thereby reducing the labour cost by 50%. A demonstration of this effect was organized by us and The Directorate of Agriculture at Chandor, Salcette. During this program, our officials explained about the judicious use of balanced fertilizers for optimizing paddy yields. To give momentum to use of paddy transplanter, we offered to continue our association with the farmers of the village for raising the community nursery in the ensuing rabbi season. We also explained the use of specialty fertilizers and micronutrients that can help in boosting paddy yield in Goa. The Directorate of Agriculture, Goa is providing a 50 percent subsidy on purchase of the paddy transplanter, thus making it a viable option to small farmers in Goa. Over 80 farmers from Chandor village and surrounding areas who witnessed the demonstration showed keen interest to procure this transplanter.

Co-operatives training programs In the markets like Maharashtra and pockets of other states, where Co-operatives are strong, we organize training programs exclusively for them. The purpose is to update them with technical information about the products and their appropriate application. In 2010-11, we organized 15 such training programs.

Mechanised Paddy Transplanter

Developing responsible products

Save cashew program In Konkan and Goa, cashew is an important crop and is prone to the menace of pests. The regional Fruit Research Station, Vegurla has developed the technology for control of the pests; but had to be popularized amongst the farmers. We launched a novel ‘Save Cashew Program’ to educate cashew growers on methods of pest control. Demonstrations on ‘control of stem and root borer pest in cashew’ were organized by giving treatment to five different plants during this program, in various villages.

his harvest by 50 percent. Similarly, villagers in Aurangabad district of Maharashtra have increased their yield of onion by 30 quintals per acre, villagers in Nashik have increased their yield of cabbage by 50 percent by correcting nutrient deficiencies and villagers in Aurangabad have increased their yield of wheat by 20 percent. JaiKisaan Krishi Samrat Award Our motto has been to acknowledge and support forward thinking farmers. We applaud these farmers for adopting proven scientific methods of farming that leads to increase in crop yield. In order to streamline the identification process of the farmers, in 1985 we constituted the ‘Krishi Samrat Award’ to honour farmers who have pioneered agriculture best practices and lead by example. Picking such farmer leaders and taking their help to propagate ideas that work has been the core of our rural thurst. Since institution, a total of 11 outstanding farmers have been honoured with the ‘Krishi Samrat’ award. The award comprises of citation, a shield and a cash price of INR 50,000.

Spot demonstration

Educating farmers to minimize cost on weed control The important crops in Goa are paddy, coconut, cashew, banana and sugarcane. Engaging manual labour for weeding is a costly affair and hence local farmers tend to neglect weeding, thus resulting in crop loss. We embarked on a task of educating farmers on effective use of weedicides. Spray pump method demonstrations were conducted across villages. In 2008-09, special campaigns were held all over the state to contact sugarcane, coconut and banana growers at their doorsteps and method demonstrations were shown on the use of weedicides.

Krishi Samrat Award

Integrated soil, water and nutrient management Another method adopted by us to help farmers enhance farm income is the demonstration on integrated soil, water and nutrient management. This design amalgamates the use of new technology on soil, water and nutrient management. Based on a scrutiny of the problems in the field, a set of crop management practices are formulated in consultation with the specialists and the technology is showcased in the field through these demonstrations. Several such demonstrations were organized in marketing areas and success stories were recorded. The story of Chatrappa, a paddy grower from Sindhanur area of Raichur district is a shining example of success in this model of demonstration. By correcting soil deficiencies, he increased

Krishi Samrat Award

26

27

Investing in people We believe in nurturing people and fostering talent that translate ZIL’s vision of nurturing life into actions in an innovative and creative manner. We invest in our workforce to maximize the wealth of experience in order to address the increasing complexity of our challenges.

28

Investing in human capital

29

Investing in people

Our success is built on technical expertise, business acumen, strong partnerships and proven ability to deliver results. Our workforce is the cornerstone of this success. As a respected provider of career opportunity and growth, ZIL attracts people of exceptional talent. Recruiting, developing and retaining these talented individuals have been vital to expanding our business. We take pride in being a responsible employer, committed to providing safe, hospitable and high-quality work environments and treating every employee with dignity and respect. We have taken a variety of concerted steps to ensure the well being of our employees, including providing skill building trainings, safety trainings and health checkups. As of 31st March 2011, the strength of our permanent workforce was 727 with the split as shown in table above.

Workforce turnover

Workforce breakdown

We are an equal opportunity employer and make no distinction between the gender or religious preferences of our employees. All our female employees are eligible for maternity leave and this year one employee had availed of the maternity leave and has rejoined work. We believe that

constructive feedback and transparent appraisal process is necessary for the growth of our employees. This year we have introduced the balanced scorecard methodology for the performance appraisal evaluation to streamline our existing system. Dedicated to conducting our business ethically and responsibly, we maintain a company-wide imperative to uphold human rights. While we do not have a separate structured training program on human rights, our code of conduct lists clauses for ethical conduct and respect of fellow employees and individuals. Our security personnel are briefed on standard protocol to be followed in case of any incidents to ensure there are no cases on human rights abuse in our premises. While we do not have a policy on local hiring, we do prefer to hire from the area in which we operate, in order to make a tangible difference to the local community. Most of our employees are from Goa, and being one of the biggest industries in the state, we have helped to boost the local economy by providing employment opportunities.

Employee category

50 years

Male

Female

Senior Management

0

0

38

38

0

Middle Management

0

39

23

60

2

Junior Management

71

92

71

223

11

Non-management workers

47

199

147

380

13

Total

118

330

279

701

26

Employee category

50 years

Male

Female

Senior Management

0

0

3

3

0

Middle Management

0

4

4

8

0

Junior Management

0

12

2

14

0

Non-management workers

0

6

15

21

0

Total

0

22

24

46

0

Senior Manager’ Meeting

Investing in people

Senior Manager’ Meeting

At Zuari, we respect and uphold the right to collective bargaining. 100 percent of our non management staff are under the union resulting in more than 54 percent of the total workforce being unionized. This year we had organized a training program at Administrative staff college of India at Hyderabad for our union employees. A portion of our workforce is contractor-based and we work closely with them to ensure that they are well equipped and trained to carry out our operations in a safe and efficient manner. This year we imparted close to 2,037 man-hours of training for our contract employees. Although a large portion of our workforce belongs to contract labour, we continually strive to ensure that we instil a sense of discipline in the aspect of not allowing any child labour on our premises and do not encourage any instances of forced labour.

Creating a clear succession plan in the organization is one of our major challenges and we endeavour to upgrade the skill set of our employees, with regular training programs, conducted by external and in-house trainers. In the year 2010-11, we conducted 10,832 man hours of training for our non-management staff, and 10,448 man hours of training for our management staff. Our training programs are varied in nature and address numerous aspects of our work. They include basic refresher trainings, skill development trainings, team building exercises and safety trainings. Some of our employees are sent to premier institutions across the country to gain from relevant courses. This year around 15 of our management employees were sent to IIM Lucknow for a customized training program to groom them for taking up increased responsibilities and put us on a path to evolve from a fertiliser producing company to a complete agri-solution provider. To get a feel of the future plans and challenges, we organize regular open-house sessions for the employees with the Managing Director that receives high participation from all levels. Additionally, we also provide trainings to our retiring employees, giving them ideas about the challenges and opportunities that arise after retirement. Various options in respect of finance management and investments are also explained to these employees. Zuari Spandan A Training on “Zuari Spandan”, an employee engagement survey was conducted by Gallup India. It was attended by 31 participants and was meant to understand the score obtained from the survey and provide guidance to managers to improve the engagement level of their teams. The participants committed themselves towards building a highly engaged workplace.

Training imparted to contract workforce

Total Man-hours

2500 2000 1500 1000 500 0

F.Y 2008-09 F.Y 2009-10 F.Y 2010-11

Zuari Spandan participants

30

31

Fostering a safety culture Guided by our values, we seek continuous improvement in our safety performance in all aspects of our operations. We value life and provide everyone with a healthy and safe work environment.

32

Some of the personal protective equipment commonly used

33

Fostering a safety culture

An integral part of our sustainability commitment is our continuing company-wide effort to improve workplace and community safety. The safety and well-being of our employees, contractors, and other third parties involved in our operations is paramount. This year we were awarded “Most outstanding performance in Occupational Safety, Health and Environment” from Goa Triangle Society & Inspectorate of Factories & Boilers, Goa highlighting our efforts in the health and safety domain. We received praise for our health and safety management systems, worker participation in health and safety, on-site emergency plan and mock drills, community awareness program, internal and external safety auditing process and health and safety training. Promoting a safe work culture Our safety department regularly organizes campaigns, competitions, contests and other activities, which help in developing and maintaining the interest of workers in establishing and maintaining safe conditions of work and procedures. While health and safety programs are implemented at the site level, the chain of responsibility and monitoring extends from our top management team and Board of Directors. We have safety committees at five tiers starting from contractors’ safety committee, ammonia handling and transportation safety committee, sectional safety committees, central safety council at factory level and finally the ‘Safe Operation Committee’ at the Board level. The various committees are involved in regular inspections of the premises for any violation of safety rules and we have imposed strict penalties for defaulters in this domain.

conducted once in two years by a committee constituted of personnel from production, mechanical and electrical maintenance. An external safety audit is carried out once in two years through an engaged third party. The last external audit happened in November 2009, while the last internal audit was conducted in November 2010. Till date, we have implemented more than 80 percent of the recommendations made during the 2009 external safety audit and 76 percent of recommendations made during the 2010 internal audit. A system of continuous follow-up and review exists for implementation of these recommendations. An online monthly safety bulletin is sent to all employees to keep them abreast of the latest happenings as well as serving as a tool to increase safety awareness. We successfully conduct mock drills on chemical and industrial disasters within and outside our premises in conjunction with other partners like NDMA, Goa Police and Goa Fire & Emergency Services. In June 2010, we conducted a mock drill of On-site emergency management plan at the raw material handling plant. For the first time a mobile emergency control centre was activated and the emergency action was well coordinated from this centre.

We believe in continuous improvement of our systems and to this effect, we are subject to regular internal and external health and safety audits. Internal safety audit is

“I have conducted nearly 153 mock drills; including 33 at chemical industries, but this drill was the best among the 33 in chemical industries” Brigadier Dr.B.K.Khanna National Disaster Management Authority Incentivizing safety

Participants at a safety training program

To promote safety and accident prevention, we have set up safety incentive schemes for all our employees. They are rewarded upon completion of every million man-hours without a reportable accident, on completion

Fostering a safety culture

34

of annual turnaround without reportable accident and on completion of half year / year without reportable accident. Through these incentives we have tried to enhance the sense of responsibility towards occupational safety and the importance of an accident free work place. One of the focus areas for our annual performance appraisal system is employees’ safety consciousness and adherence to safety rules and regulations. For supervisory staff and the executives, a minimum of 30 percent weight-age is given to health and safety related aspects. Incident reporting Over the years our focus has been to strengthen our incident reporting system and we have used our experience to develop and online system of recording accidents and near misses. We have a structured reporting system and all employees and contract labor are made aware of the procedure to be followed in case of any accidents. Any employee or contract worker who gets injured needs to report to the supervisor in charge and in turn needs to fill out a ‘Preliminary Accident Report Form (PARF)’ and reach the occupational health centre for treatment in case the injury is not severe. This year we had no fatalities and while there was a solitary reportable accident to one of our contract workers. Further, there were no injuries to any of our female employees or contract workers. In the coming years we will focus on improving near-miss reporting to better identify the root and system causes of incidents that typically result in lost-time injuries.

Tackling fire

Safety Engineers, Mumbai, conducted a specialized training on “Job Safety Analysis (JSA) and Hazard Identification and Risk Assessment (HIRA), which dealt mainly with conducting risk assessment, quantification and risk reduction in job activities. A two day program on SHE management was organized in December this year in association with Inspectorate of Factories and Boilers, Govt. of Goa, Panjim. Till date 155 officers Lost Day Rate

Safety training To ensure that the entire new contract staff is imparted safety training before they are put on job, all contractor supervisors and contract workers have to undergo a mandatory safety induction training before they are issued a gate pass. It is the responsibility of the security manager to ensure that the request for gate pass is routed through the fire and safety department to ensure that all the contract workforce are imparted safety training. As a part of continuous safety education for the employees, our fire and safety department has started a one day in-house program. The program covers topics like accident prevention, fire prevention and control, safe handling of chemicals amongst others. In August this year, Synergic

25.00

Employess

20.00

Contractors

15.00 10.00 5.00 0

F.Y 2008-09 F.Y 2009-10 F.Y 2010-11

*Lost day rate has been calculated as per the definition listed in the GRI G3.1 reporting guidelines

Incident Statistics

Units

FY 2008-09

FY 2009-10

FY 2010-11

Near misses

Nos

12

8

14

Reportable injuries

Nos

2

5

1

Fatalities

Nos

0

0

0

First aid cases

Nos

32

26

52

35

Fostering a safety culture

and managers from technical division have benefitted from this program which was 9th of its nature. It is prudent to have personnel trained in basic life savings techniques that could play a crucial role in providing care to trauma patients during the pre hospitalization stage. A two day first-aid training program in association with the Indian Red Cross Society Goa was conducted in August this year and a total of 31 new entrants were imparted life savings skills like providing artificial respiration, cardiopulmonary resuscitation (CPR) and bleeding control. We have a system of contractor evaluation on a scale of 5, with special emphasis on importance of safety rules, regulations and procedures. A contractor safety manual enlisting safety procedures has been developed by us to make the system fool proof. Safety in the community In addition to the safety of our work force and families, we value the safety of the communities in which we operate. Recognizing the importance of process safety management systems, we strive to improve those systems continuously. This year we developed a safety leaflet in the local language for the communities nearby which lists the dos and don’ts in case of an emergency ammonia leak from the premises. There are pictorial representations of the actions to be taken for people who cannot read. We have also developed an in-house safety film on “safe handling, transportation of ammonia” for the community. To inculcate safety education from an early age, we regularly organize safety poster contests and awareness quizzes as part of the annual safety week program. Similar programs are

Moulding young minds

also organised for nearby schools children on yearly basis to inculcate safe habits among the children. A program on "Community awareness" was organised for school teachers from and around Zuarinagar. The program mainly dealt with "Do's and Dont's, safety & health measures and action to be taken during Ammonia leakage. Every six months the "Do's and Dont's and action to be taken by the public" in case of gas leakages is published in leading newspapers. Our executives from fire and safety department offer services as faculties to the Inspectorate of Factories & Boilers, training employees from other industries, drivers, teachers from nearby schools, factory medical officers and supervisors. These programs typically are focused on handling of chemical emergencies, fire safety, off-site safety etc. Zuari has also developed a “Emergency Response Vehicle” with base station and equipped with PPEs, tools and tackles and different sizes of plugs to handle any transport accident leading to spillages and leakages. ZIL responds to any emergency calls with respect to spills, fire involving chemicals during transportation and our technical expertise is utilised by the State Administration. District Magistrate-South Goa has complimented and appreciated our efforts in this regard. Work Permit System

National safety week

We have a robust Safety Work Permit System and all the permits are generated in e-form by using software. A notification for the job is raised by the Issuing Authority and once the Accepting Authority agrees to carry out

Fostering a safety culture

36

Breakdown analysis To find the root cause for any breakdown in the plant or any deviations from the normal operations, ZIL follows a system of analyzing the cause of the failure. On receipt of this preliminary report and depending on the nature of the breakdown, the appropriate Breakdown analysis committee deliberates on the breakdown and submits their report. The breakdown analysis report goes into the details of the incident and brings out the reasons for the breakdown and proposes remedial measures to avoid such instances in future. Health We aim to conduct programs which would not only help in creating awareness, but also help in detecting any abnormalities at an early stage. Last year we had conducted awareness and screening program for urological disorders in association with RG Stone hospital Goa. Over 60 of our employees underwent ultrasonographic examination and consultation with the urologist. In November the executive committee of the Zuari Management Club, in association with ‘Swami Vivekananda Yoga Kendra’ organized a yoga training course for the benefit of the members and their families which ran for 15 days in two batches. Let us compete to be the best

the job, the permit for the job is issued. The permit cannot be completed unless the required PPE’s are specified. The permits are closed on the system by both the Issuing Authority as well as by the Accepting Authority. All the permits can be viewed by Safety Dept. to ensure that the permits are properly filled and the job is executed safely. The Personnel from Fire & Safety Dept. are empowered to stop any job which is not done under work permit system and where the permit conditions are not adhered to. Plant modification procedure A plant modification procedure has been developed with following broad objectives: to avoid cause for potential source of safety hazard; to review the process changes, if any, with respect to safety of personnel, plant and environment; to inform / communicate and alert the all concerned in plant neighbourhood and the statutory authorities; and to record all authorised changes and to update the documentation. The purpose of this procedure is to eliminate this cause of accidents and to maximize the reliable operation of plants by controlling the plant modifications. This procedure covers the modifications initiated by all Technical support groups, whether inside or outside of the works, and by the operating teams

Forging ahead

37

Enriching communities Delivering on what society expects from us is of paramount importance to us. Through our structured community development programs we aim to better our communities by bridging the gap between their needs and resources.

38

Rural sports activities sponsored by Zuari Industries Limited

39

Enriching communities

The Indian farmer has always been the core of our success and for this very reason we strive to strengthen our relationship with the farming community. We undertake several initiatives for the betterment of the lives of the agricultural community. From providing public utility services, sponsoring rural sports, undertaking watershed development and bore well recharge projects to providing scholarships to farmers' children to facilitate professional degree courses it has always been our endeavour to enhance the livelihoods of our stakeholders. During 2010-11 we have spent INR 1.68 million on developing infrastructure for the public benefit including renovation for children’s parks, developing signboards, maintaining medians etc. In addition to work towards supporting the farmer community, ZIL is also working for the slum locality through providing education and vocational training through the Prerna centre where the spouses and other family members of ZIL employees contribute their time. This year we have initiated discussions for addressing further health and sanitation and drinking water issues. JaiKisaan Sangam This program brings about the confluence of Zuari, its farmers and dealers. JaiKisaan Sangam is basically aimed at enhancing the profitability of individual farmers by providing customized services that are tailored specifically to the needs of the farmers further assisting him to adopt the scientific agricultural practices. The services provided under this program are listed below: Animal health

Animal Health Camp

Kolhapur, Pune, Bellary and the Hyderabad region. This year the number of camps increased to 114. Apart from the initiatives listed above we also provide agri-input marketing and crop husbandry services. In order to avail these services a farmer merely has to register under the JaiKisaan Sangam scheme. We also deliver a quarterly magazine on agriculture to JKS members. This magazine is written in colloquial language for easy understanding and comprises of important and relevant articles that suit the needs of farmers. In addition, it also has a section that provides a forum for farmers to get vital advice from experts.

We organize veterinary health camps in villages in collaboration with doctors from the local veterinary department wherein on an average 100-150 animals are treated in a camp. This year the company organized close to 233 animal health camps in the marketing territory. Family health camps We organize family and children health check-up camps in villages covered under the JaiKisaan Sangam program. During such camps, selected medicines are given free to the needy. Children health camps are organized for school children in association with local primary health centres or by taking help of private doctors. In some case these programs are also combined with vaccination programs of the Government. Last year, the company organized 71 health camps in different parts of marketing territory which included the

Children Health Camp

Enriching communities

Hello JaiKisaan

Public utilities

We started the Hello JaiKisaan initiative with ease of communication in mind, wherein farmers can call on our toll free number and raise any issues related to agriculture. This toll free service is manned by our experts who also advice on the new techniques of agriculture. Hence the query of a farmer is resolved through a simple phone call. Farmers across the state can avail of this service by calling our toll free number. This year 4884 farmers from Karnataka and 13473 farmers from Maharashtra availed the benefits of this helpline service.

For the upliftment of the farmers and their family and to enhance their quality of life, we have taken several welfare programs. The activities undertaken as a part of this initiative include construction of bus shelters for commuters in rural areas, provision of drinking water tanks, sanitary facilities, playgrounds for schools, development and maintenance of gardens and tree plantations across highways. Till date we have constructed over 20 bus shelters, 4 drinking water tanks, 15 tree base structures, and 2 playgrounds in the marketing territory under this program. Rural development activities As a responsible corporate we have undertaken the role of enhancing the quality of life of communities in the rural areas. Aligned to this objective we have implemented several developmental activities that aid in improving the lives of people in the rural areas and further foster their growth. Watershed development project We implemented a water shed development project in a drought prone village, Kohinkarwadi in Maharashtra. This project had a twin objective of ensuring water conservation by constructing different water harvesting structures and enrichment of soil quality through measures of contour bunding and regeneration of biomass cover. In collaboration with an NGO, Vanrai we undertook the construction of various permanent structures such as farm ponds, masonry check dams, contour bunds, loose boulder structures etc. This project has boosted the socio economic transformation by solving the problem of drinking water and increased the farmer’s income.

Hello JaiKisaan advertisement

Relief to flood affected farmers The incessant rain in the first week of October 2009 was responsible for the enormous damage rendered to life and property in six districts of northern Karnataka. We provided aid in the form of food packets to the three worst affected villages of Bagalkot district. We also extended our support to the victims of Canacona taluks of Goa, which was affected by floods in September 2009. Over twenty two tons of high yielding paddy seeds were provided to about 850 families during Rabi 2009-10 seasons.

Lending a helping hand to the local communities

40

41

Enriching communities

Seminar on new challenges in Cashew production

Bore well recharging program We implemented a bore well recharging program in Hiryur, a drought prone village in Karnataka, with the objective of enhancing the quality of life of the villagers. The difficulty faced by this village was that the bore wells and rainwater were the only sources of water for domestic consumption as well as agriculture. Further, the water in these wells dries up due to over exploitation of water and lack of replenishment. However these bore wells can be replenished artificially by constructing recharging / infiltration tanks around the well. These tanks help by injecting rainwater directly into the ground water resource. In association with The Mysore Resettlement and Development Authority, an NGO we have constructed three recharging tanks in the village in January 2005. This program has also demonstrated to the farmers the modern and innovative technique of rejuvenating bore wells. Horticulture Development Projects The Cashew project Cashew is one of Goa’s most important horticultural crops. The crop is grown over 55000 hectares. The local variety of cashew used to give an average yield of 1.5 kg per tree, while a high

yielding variety could have easily produced 12 to 15kg per tree. In order to boost crop yield, we undertook a familiarization program for high yielding cashew varieties amongst farmers. This helped spread awareness about the various types of grafts of cashew that were available for commercial cultivation. Zuari even procured 3000 high yield cashew grafts including the Vengurla-1 and Vengurla-4 from research stations in neighboring states, distributing them to progressive farmers at subsidized rates. This was because cashew yields in neighbouring states were three times higher. After these pioneering steps for the promotion of the use of cashew grafts, the Directorate of Agriculture established a special scheme for cashew area expansion. This lead to the use of cashew grafts becoming a common feature amongst farmers in Goa. Kalpatru Project We identified that the average yield of coconut in Goa was poor which was mainly due to the lack of scientific cultivation practices. With the aim of imparting education among famers we implemented the Kalpatru project to enhance the methods of coconut cultivation. We organized advisory campaigns for coconut farmers in Goa, wherein marketing officers from Zuari along with the officials from the Department of Agriculture visited predominant coconut growing villages in Goa.

Crop seminar

Enriching communities

and advise farmers on the appropriate dosage of fertilisers, use of green manure, biofertilisers, protection measures, irrigation techniques etc for enhancing coconut yields. Sugarcane development project We introduced early maturing, shy flowering and thermo sensitive varities of sugarcane crop by procuring them from research station and distributed it to progressive farmers in Sanguem taluka in Goa. We also adopted the Vantem village in Sattari taluka wherein all the famers in this village fell under the small and marginal category. Through our efforts we motivated farmers to cultivate the sugarcane crop and provided necessary inputs related to sugarcane cultivation. This project benefited the farmers by increasing the yield as compared to the past average yield. Orchid Project Due to the booming tourism industry in Goa, we identified that there is a huge demand for flowers which resulted in the import of flowers worth INR 40 million in order to fulfill this demand. We took a step forward by encouraging orchid cultivation among farmers wherein we had set up a demonstration unit at our complex that explains the use of modern technology to grow orchids.

Scholarships We extend financial aid in the form of scholarships to deserving students in the fields of Agriculture and Engineering. These scholarships are both merit and need based i.e. 85% on merit and 15% on the parental income status. A minimum eligible percentage criterion for scholarship in Engineering and Agriculture degree has been set for disbursal of these scholarships. Over the years we have helped students secure admission in prestigious colleges like the Goa University, BITS Pilani – Goa Campus. These scholarships were instituted over thirty years ago and carry cash award of INR 12,000 per subject, per annum for the duration of the degree course. Applications for awarding these scholarships are invited through advertisements in the Goan dailies and also through intimation to all Engineering Colleges in Goa and Directorate of Agriculture, Panaji, Goa. In addition, we award annual scholarships to four neighboring high school students who excel in the SSC examination. These high schools are located at Zuarinagar, Sancoale, Velsao and Cansaulim, in our neighbourhood. Prerna - an inspiration!! 3 years ago (on 15th August 2008) led by a dedicated group of members from the Zuari Ladies - "Prerna - an inspiration" was born. There are around 25 economically challenged girl children participants. There are around 15 Teachers. The children are imparted the following vocations of Life Skills: I.

Stitching

II.

Sewing & Needlework

III. Handicraft/Toys making IV. Art & Craft V. Prerna in action

Interiors

VI. Beauticians VII. Filling in Studies VIII. Performing Arts - Music & Dances IX. Elocutions X. Computer Studies There are plans to further enlarge its activities. The vision is to build a group of girl children - who would be proud to have been born a girl!! Who would be proud because they contribute to society.

Prerna in action

Who would be proud because they can achieve - on their own!!

42

43

Disclosure on management approach

Economic Indicators At Zuari, we have strived to maximize shareholder value, by providing superior products, increasing our customer base and enhancing the geographies in which we operate. We have robust business planning and risk management processes to ensure sound financial practices. Our Board level Audit Committee and Investor Grievance Committees ensure that our processes are carried out in a transparent and efficient manner. While we do publish an Annual Report each year, to disclose our financial performance, we have embarked on our journey to publish our first Sustainability Report this year, to throw light on our triple bottom line performance. While making efforts to augment our revenues, we also take utmost care to price our products and services such that they are affordable to the farmers, and create value for our customers. Further, being one of the biggest industries in Goa, we are a significant source of direct and indirect employment in the state, and we take efforts to increase local hiring to boost the quality of life of the community around which we operate. Environmental Indicators Being an agriculture based organization, our environmental performance is a critical parameter on which our company is assessed. Our Health, Safety and Environment committee ensures compliance to all laws of the land and takes proactive steps to maintain our positive ecological footprint. We have taken a conscious effort to have a positive impact on the environment, not only through our products, but also within our facilities. From being a zero discharge unit, to monitoring air quality stringently and planting thousands of trees, we have ensured that our operations are as environment friendly as possible. Labour Practices and Decent Work Indicators Over the years, we have been an employer of choice in Goa, and we have taken concrete steps to maintain employee safety and welfare. We take conscious efforts to provide our workforce with a platform to express themselves and demonstrate their competence, thereby enabling them to achieve their potential. Further, we provide our workforce with a number of in-house and external trainings to enable them to hone their technical and interpersonal skills. Our low attrition rate is an indicator of our employee satisfaction levels. This year we were awarded “Most outstanding performance in Occupational Safety, Health and Environment” from Goa Triangle Society & Inspectorate of Factories & Boilers, Goa highlighting our efforts in the health and safety domain. Health and safety programs are implemented at the site; however, the chain of responsibility and monitoring

extends from our Board of Directors. We have safety committees at various levels, and they are involved in regular inspections of the premises for any violation of safety rules. Further, to promote safety and accident prevention, we have set up safety incentive schemes for all our employees. Human Rights Indicators At ZIL, we respect the dignity of every individual and we uphold all the laws of the land related to human rights. We uphold the right to collective bargaining. We prohibit child and forced labour at all times and all our contractors and business partners are expected to honour all the laws of the land. Our code of conduct ensures that we conduct business with integrity, fairness, responsibility, transparency and honesty. Society Indicators Since inception, by virtue of our business, we have been working closely with the farming community. We created the JaiKisaan Sangam specifically to cater to the needs of the farmers, and provide them with specialized technical services. The Hello JaiKisaan program too provides online real time advisory services to the farmers, to address all their queries. Beyond these programs, we take special care to address the needs of the communities surrounding our operations, like providing scholarships to needy children, developing watersheds where required, providing public utilities like bus stops and providing relief to the poor. We intend to continue to develop programs for the benefit of the society in which we operate. Product Responsibility Indicators At ZIL, product responsibility is an area of high importance for us, and we focus our research and development efforts towards developing products that are safe for use on crops, maintain the soil quality and do not disturb the ecological value of the land on which they are used. Further, our responsibility extends beyond the walls of our manufacturing facility, and we work closely with the farmers to ensure correct application of our products to yield maximum benefits. We make judicious use of various tools such as awareness campaigns, training and demonstration programs, opening of farmers’ schools, understanding of Government regulations, analyzing the resource pools, customizing products/services, etc to provide quality services to the Indian farmer. We also teach farmers to use soil test reports to judge the correct type of fertiliser and the correct quantity to be used at the correct time. Spot demonstrations are also conducted on use of fertilisers, insecticides, fungicides, herbicides, micronutrients, etc. We strive to ensure that our products are applied appropriately to maximize crop yields.

Assurance statement

Independent assurance report to Zuari Industries Limited Corporate Sustainability Report 2010-11 KPMG was engaged by Zuari Industries Limited (‘ZIL’ or ‘the Company’) to provide assurance for its 2010-11 Corporate Sustainability Report (‘the Report’). Assurance scope and limitations The assurance is provided for the data and information under the limited assurance scope for the period 01 April 2010 to 31 March 2011. We have covered environmental and social performance indicators covered in the Report. Site visit was carried out to the ZIL’s fertilizer manufacturing plant at Goa. Scope Limitations t %BUBPSJOGPSNBUJPOPUIFSUIBOUIBUDPWFSFEJOTDPQFPGXPSL t 7FSJGJDBUJPOPGFDPOPNJDQFSGPSNBODFJOEJDBUPSTXIJDIXFSFTPVSDFEGSPN;*-T':CBMBODFTIFFU and profit and loss account statement. t %BUBBOEJOGPSNBUJPOPVUTJEFUIFSFQPSUJOHQFSJPE t "OZTUBUFNFOUJOEJDBUJOHJOUFOUJPO PQJOJPO CFMJFGBOEPSBTQJSBUJPOCZ;*- Assurance standard and Independence 8FDPOEVDUFEPVSXPSLJOBDDPSEBODFXJUI t A-JNJUFE "TTVSBODF BTTVSBODF SFRVJSFNFOUT PG *OUFSOBUJPOBM 'FEFSBUJPO PG "DDPVOUBOUT *'"$  *OUFSOBUJPOBM 4UBOEBSE GPS "TTVSBODF &OHBHFNFOUT