TITAN Annual Report 2008

Det Norske Veritas (hereafter ‘DNV’) has been commissioned by the management of TITAN Cement Company S.A (hereafter ‘TITAN’) to provide assurance services in connection with the English version of Titan’s Corporate Social Responsibility (CSR) and Sustainability Report 2008 (hereafter ‘the Report’).

The management of TITAN is responsible for all assertions and information provided in the Report, as well as the processes for collecting, analysing and reporting that information. DNV’s responsibility regarding this assurance engagement is to the management of TITAN only, in accordance with the scope of work commissioned. DNV disclaims any liability or responsibility to a third party for decisions, whether investment or otherwise, based on this Assurance Statement summary or the full version provided at http://www.titan-cement.com

Scope

The scope of DNV’s assurance engagement included the verification of:

• CSR and Sustainability policies, objectives, initiatives, practices and achievements in 2008, described in the Report. These were verified at Group, Division and Department levels and within the following countries: Bulgaria; Greece; FYROM and Serbia;
• The extent to which Group, Division and Department policies, practices and procedures are known, understood and being adopted at the following sites: Usje (FYROM); Kamari (Greece); and Zlatna Panega (Bulgaria); 
• Process for defining the boundaries, focus and content of the Report; 
• Processes and tools for collecting, analysing, aggregating and reporting quantitative and qualitative data in the Report;The extent to which the principles of Materiality, Inclusivity and Responsiveness are adopted, in line with the requirements of AA1000AS (2008); 
• The extent to which the principles set out in the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines (2006) are adopted, as well as the application level declared by TITAN; 
• Adherence to WBCSD Cement Sustainability Initiative (CSI) reporting requirements; and 
• Compliance with UN Global Compact Communication of Progress requirements.
  The reliability of selected quantitative information was verified, namely: recycling; raw materials; dust; NOx; SOx and water consumption. DNV’s assurance engagement did not include verification of the reliability of CO2 emission-related information or Health and Safety information, verified by another third party.

Statement of Independence

DNV states its independence and impartiality with regards to this assurance engagement. In 2008, DNV did not work with Titan or any of its stakeholders on any engagements which could compromise the independence or impartiality of our findings, conclusions or recommendations. Moreover, DNV was not involved in the preparation of any text or data provided in the Report, in addition to this Assurance Statement.

Approach

This assurance engagement was carried out between February and June 2009, by a multi-disciplinary team of suitably qualified and experienced professionals, in accordance with the DNV Protocol for Verification of Sustainability Reports, which is based on the Global Reporting Initiative (GRI) Guidelines for Sustainability Reporting (2006) and AA1000AS (2008).

As part of this assurance engagement, the following tasks were carried out by DNV: 

• Facilitated a 2-day workshop in FYROM, aimed at verifying Titan’s perceptions of materiality in the South East Europe (SEE) region, focusing on Bulgaria, FYROM and Serbia. This workshop was attended by management representatives from Titan Group, the SEE region and each of the above mentioned countries;
• Interviewed over 25 management representatives at Group level, in the following functional areas: CSR and Sustainability; Corporate Governance; External Relations; Investor Relations; Finance; Human Resources; Environmental Management; Health and Safety Management; Social Services; Legal Affairs; Audit and Compliance; and Procurement. Interviewed the manager of the Cement Division in Greece and the manager of the Kamari Plant (Greece);
• Undertook a one-day visit to the Usje plant (FYROM) and a two-day visit to the Zlatna Panega plant (Bulgaria); 
• Analysed corporate data management systems (for HR and Social, Health and Safety, and Environmental data), assessing the materiality, reliability and completeness of selected data reported by Titan; 
• Challenged assertions and claims made in the Report and reviewed supporting information; 
• Reviewed a selection of internal communications and external media reports relating to TITAN’s CSR and Sustainability management and performance.

This engagement was carried out in line with the AA1000AS(2008) requirements for Type 2, moderate level of assurance.

Conclusions

Through this engagement, DNV was able to verify the progress made by Titan in relation to H&S management, which involved the implementation of a more harmonised and structured approach across the Group and initiatives to develop safety awareness and culture.

Regarding environmental management, DNV commends the efforts made by Titan with a view to improving the monitoring and reporting of environmental performance. At the SEE sites visited, DNV found commitment to adopting appropriate environmental management practices, often aiming to exceed legal requirements in those countries. However, due to changes in the composition/equity of the Group in 2008, challenges arose in terms of ensuring that the new Titan sites performed to the level and standards of the Group, which was reflected in the overall Group performance on some environmental aspects.

Regarding Human Resources, Titan faced important challenges in several countries, where reductions in employee numbers were made. DNV was able to verify Titan’s commitment to adopting responsible employment practices and preventing or minimising the impact of restructuring initiatives by the company.
DNV commends Titan for the efforts to include stakeholders in the development of its CSR and Sustainability management approach and the definition of the content of its Report. The multi-stakeholder forum held in Greece, the internal workshops held by Titan in FYROM, and the extension of the scope of assurance to include stakeholders in SEE, demonstrate Titan’s commitment to effective, constructive and transparent stakeholder engagement.

Specifically on the content of the Report, DNV believes that it generally meets the content and quality requirements of CSI, Global Compact, GRI (2006) and AA1000AS (2008). DNV also endorses the GRI application level of A+ declared by Titan. Detailed information on DNV’s scope of work, approach, conclusions and recommendations regarding the Report’s adherence to the reporting and assurance requirements established in those standards and guidelines is provided in the full version of the Assurance Statement, available at www.titan-cement.com  

Recommendations

Based on the findings of this assurance engagement, the following recommendations are made to encourage continual improvement, not affecting the conclusions above:

• Continue to expand materiality assessment and stakeholder engagement initiatives to further countries/regions;
• Develop awareness and a structured approach to stakeholder engagement at local level; 
• Develop KPIs and targets which are enduring, to ensure comparability and facilitate the assessment of performance as the composition/equity of Titan, production levels and the characteristics of its products change over time; 
• Develop a structured approach to assessing socio-economic impacts; 
• Investigate the level of interest in the CSR and Sustainability Report by various stakeholder groups in the countries where Titan operates. This should also consider the role of the Report as part of a suite of channels and strategies for communication on CSR and Sustainability.

Det Norske Veritas, London, 18 June 2009