Our replies below

----- Original Message -----
From: Kishore Kavadia
To: mailto:info%40karmayog.org
Sent: Monday, December 17, 2007 2:41 PM
Subject: Re: ANNOUNCING Karmayog CSR Ratings of India's Top500companies

We have studied the findings of the subject very carefully and while we appreciate the purpose and the efforts put in by your Organization to promote the activity there are basic flaws which need to be looked into and corrected picture brought out in future. Our basic observation is specifically with reference to our area of business i.e. cement manufacture.

On one hand you mention that some of your criteria are based on International Guidelines and on the other hand you draw your own conclusion to rate 'cement industry' as 2/5 (may be without going through merits of the Industry's performanceas on today). For your kind information:

1. Dow Jones Sustainability Index has some cement industry company getting top position in their sustainability rating,

2. CSE ( Center for Science &Environment, Delhi) gives 4 petals out of 5 for its environmental performance to Ambuja Cements (ACL),

3. Asian Institute of Management (AIM), Manila gives International Awards under CSR to Ambuja Cement Foundation(ACF) for 3 consecutive years (never heard of in AIM History) for its CSR Performance.

4. ACF works with 1.2 million people in India with its own successful methodology of 'energising, involving and enabling communities to realise their potential' and has large workforce with ACL who are actively involved in real time CSR activities with spending of Rs. 40+ Crores ( and what is important is that many Govt. and other organizations contribute to funds of ACF) to channelise their purposeful projects thro' ACF.

5. ACL went in for sophisticated technology of implementing glass bag house for attaining particulate emission norms in cement plant to < 50 mg/ NM3 when National norms were 450 mg/NM3,

6. We suggest that you have a relook at your Rating and if you wish to meet Ms.Pearl Tiwari, AVP, Comunity Development or the undersigned, we would be too happy to share our activities and performance.

Regards
Kishore Kavadia
Advisor,Sustainability
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Dear Mr. Kavadia,

Thank you for your email. We appreciate your clarifications.

1) While Dow Jones Sustainability Index may rate some cement companies very high on their Sustainability Index, they also say ontheir website that "Corporate Sustainability Performance is an investable concept." This is not a view thatis shared by us at all, and is hence not a criteria on which we have based the Karmayog CSR ratings.

2) Similarly, CSE also says that "by definition, there is nothing called a sustainable cement industry." The Karmayog CSR ratings are not based on better performance of some companies in an industry that is harmful and hence this is not also a criteria that would be applicable in our ratings.

You will appreciate that each of these would be based on their own particular criteria and hence cannot be applicable for CSR for the entire company.

3) Regarding AIM's award to ACF:

Thank you for pointing out the awards received by Ambuja Cement Foundation. Since the Foundation functions as an NGO, and also receives funding from other sources such as Govt. and other Trusts, it appears that the Foundation is and functions as an entirely independent entity even though it is largely supported by the Company.

Please note that we are reviewing CSR activities of corporates and not of trusts. It is not clear from your website and annual report about the actual connection between the Company and the Foundation. As an example, whether in the recent change in management of the Company, was there a similar change in management of the Foundation. Please do clarify.

4) Thanks for informing that ACF is spending Rs. 40+ crores. This information is not on your website. Please clarify if this is an annual spend or cumulative till date.

5) We refer to the website of your company: http://www.gujaratambuja.com/ where under Environment Policy at http://www.gujaratambuja.com/comp_about_final.html, it says:

"Our environment policy is built around two simple truths. One, no cement plant can flourish at the cost of the environment. As one of the countrys largest producers of cement, with a large presence around the country, we have an obligation to protect the environment we function in.

Also, as we discovered, being environmentally conscious, almost never interfered with running a profitable business. In fact its quite the contrary.

Our efforts to achieve world standards in environment protection, for instance, have had the happy outcome of substantially improving efficiency and profitability. The fact is, a cleaner environment isnt just better for the people, it reduces wear and tear on plants and machinery as well. Thus directly contributing to the bottom line. Besides dust in cement plants is nothing but cement itself, which we capture and bag.

Our approach has made us the one of the worlds most environment friendly cement companies. And the most profitable."

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So while it is very good for the environment and profitable for ACL that "ACL went in for sophisticated technology of implementing glass bag house for attaining particulate emission norms in cement plant to < 50 mg/ NM3 when National norms were 450 mg/NM3", this is only one of the recommendations in the IFC guidelines.

As we have mentioned in the summary of the Karmayog CSR Ratings of India's top 500 companies, our rating criteria are centred on environmental impact and restoration of damage done.

In our view, one of the accurate ways to quantify this is through the International Finance Corporation's guidelines for Cement and Lime Manufacturing ( http://www.karmayog.org/redirect/strred.asp?docId=9932) which is a technical reference document with industry specific examples of Good International Industry Practice.

Further, the Global Report Initiative (GRI) of the UN, frames formats for Sustainability Reporting by companies, again industry specific. We were unable to locate either of these on your company website. If either of these are mentioned on your website, please do let us know.

The note on environment that was on your website (reproduced above) was insufficient for us to know about your company's work in this area.

We refer to www.gujaratambuja.com/comp_about_final.html where your annual reports are put up upto 2005 - 2006. Referring to the FY 05-06 Annual Report (last year's) that lists from Pg. 39 onwards, the initiatives being done by ACL in Environment and Corporate Social Responsibility. The areas of work are defined and well-thought out and several are related to ACL's processes. The latest Annual Report (FY 06-07) has, however, not been posted there till date. Hence, it would be appreciated if you could send us details of ACL's latest CSR activities so that this may be included in this survey and ranking.

6) We would appreciate receiving the following documents from you so that we can re-look at our rating for ACL.:

1) Annual Report FY 06-07 with a section on CSR

2) Latest Cosporate Sustainabilty Report

3) Any other information, reports, etc. on ACL's CSR activities.

I look forward to hearing from you.

Sincerely,

Tanya Mahajan
http://www.karmayog.org/
22940109