I. Economic Impact

Both ISL and IIL have a significant impact on the economy. Our positive impact on the economy is the result of continuous growth, vast distributor and dealership network, ability to extend credit to our customers, innovation, and strong financial performance. We fuel economic growth through performance, job creation, and contribution to stakeholders in the form of dividends, duties & taxes, salaries & benefits, and CSR activities.

Furthermore, we have been able to continuously fulfil our customer demands by continuing to diversify our production lines. We drive competitive pricing by maximizing our economies of scale in order to ensure that our customers always receive a fair price for our high-quality product.

VIS Ratings

VIS Credit Rating Company Limited (VIS), approved by Securities and Exchange Commission of Pakistan and State Bank of Pakistan, is operating as a 'Full Service' rating agency providing independent rating services in Pakistan. In 2019, each of our organizations were awarded high ratings from VIS, further increasing our financial credibility in the market.

Economic Impact Goals

• Continue to grow our existing product lines and expand our product range.
• Continue to invest in value addition of existing product range.
• Continue to expand in the Steel sector by promoting the economic growth and infrastructure in the domestic market by offering steel products at affordable prices.
• Look to expand and diversify product range by backward integration.

II. ENVIRONMENTAL IMPACT

At the core of our business is the production process, our operations therefore naturally have an impact on the environment. As Pakistan faces energy, pollution, and water scarcity issues, we believe that the most direct and visible impact of our efforts will come from our environmental efficiencies. As responsible corporate citizens we have provided a transparent examination of our environmental impact for both organizations separately.

Although our primary raw materials, steel, zinc, and polymers do not have a direct impact on our immediate environment, our Group strongly believes in minimizing environmental damage that might result from any of our production processes. Most of the technology and equipment in our operations is environmentally efficient and compliant with international and national environmental standards.

Environmental considerations are taken into account by us at the time of project costing and purchasing. Furthermore, all future investments are preceded by an environmental impact assessment.

We believe these initiatives will not only help IIL and ISL improve its long-term sustainability, but will also position the company as a model corporate citizen that contributes to the nation and the environment at large.

Supply Chain

To sum up, we have a brief outline of production processes that will assist in the understanding of the types of energy and raw materials required and the waste that is generated and managed during the production process.

Both ISL and IIL have a similar supply chain process as illustrated below.

Raw Material and Energy Requirement

The main inputs required for the production process include raw materials such as steel (hot rolled coils) and varying strengths of hydrochloric acid to pickle and remove the rust from the steel coils.

Furthermore, to analyse our environmental impact, our Group documents the use of natural resources and energy required. The image below illustrates the total amount of each input utilized through the last fiscal year. The primary inputs for polymer pipe production are polyethylene & polypropylene. Both of which are 100% recycled in house.

Production Planning

Our production planning and inventory control team are integrated with the sales, production, logistics and engineering teams for effective resource planning. Our objective is to optimize production, fulfil demand, and plan logistics and storage while minimizing wastage.

At IIL, our sales, supply chain, purchasing and production teams work closely to forecast raw material requirements. Monthly sales and operations meetings with departmental heads and staff are held to review current and future production needs.

At ISL, the marketing department creates a comprehensive marketing and sales plan. This report includes the financial and product demand forecasts which are then sent to the senior management for review and approval.

International Industries Limited (IIL)

Waste Management

As part of our belief in the concept of the circular economy, we intend to minimize our waste and maximize the recycling of our steel. Any by-products generated as a result of the manufacturing process are collected and disposed of in a responsible manner or sold.

The table below illustrates the types of wastes produced in the last fiscal year for both organizations.

Furthermore, this table identifies when the waste is produced and how it is disposed off.

Note: The polymer pipe production process is more environmentally efficient and generate minimal wastage. Any polymer not utilized in the production stage is grinded and put back into the production process.

Finished Goods and Delivery

Our finished products also reflect the values of the circular economy. Both IIL and ISL create durable products that have an extended life in comparison to some of our competitors. This causes a reduction in the waste process through our product's lifetime.

An efficient supply chain network is required to help minimize our environmental impacts. Moreover, the delivery of items is an integral step to ensuring customer satisfaction. The final part of the supply chain ensures constant management of finished goods storage and delivery throughout Pakistan.

In 2016, IIL created a warehouse in Sheikhupura for the storage and delivery to the northern areas of Pakistan. This decreased the lead time required to deliver our products and allowed us to optimize our deliveries to the North.

In 2017, IIL continued to expand its Sheikhupura warehousing facility. Our Polymer Division was formally inaugurated this year in Sheikhupura and is capable of supplying all types of polymer pipes and fitting.

ISL provides clear and effective methods of the safe transportation within all their product specifications and is shared with all their customers. Furthermore, as our customer base in Punjab increases, we are also looking to increase our warehousing facilities in the near future.

Environmental Compliance

IIL and ISL conduct internal and external checks to ensure that their environmental, health and safety and production processes are in line with international and national standards.

Group corporate offices have also taken an initiative to reduce their environmental impact. Daily work processes utilize the Oracle E-Business Suite System, which increases efficiency and reduces unnecessary paper waste.

IIL & ISL have taken approval from shareholders to circulate Annual Reports in digital form, thereby reducing paper utilization and waste. Furthermore, the IIL Board of Directors have been provided with digital tablets in a move to become completely paperless.

Both IIL and ISL believe that greenery creates a healthy workspace and clean breathing spaces that is visually pleasant. Both organizations maintain a dedicated green belt outside their factories and have also ensured that greenery is planted at regular intervals all over the factory premises. All office locations are also characterized by plantations and greenery.

During the year, we have ensured to maintain the plantation and greenery within and outside of IIL Factory 1, 2 and 3 and Offices. We have also hired two gardeners for taking care of the plantation including trimming, watering, fumigation, and replacement of old and / or weary plants at IIL Factory 1, 2.

In addition, as much as 250 plants of various species have been planted inside the Factory 3, in SKP and 150 plants inside the Factory 2, in Karachi.

Environmental Impact Goals

Maximize our environmentally safe and compliant company operations including the conservation of natural resources and improving waste management.

• Achieve OHSE Excellence by continuing to increase interdepartmental communication of learning's and best practices. Our goal is to create a permanent cultural shift throughout all the tiers of our organization.
• To increase safety measures on our factory floors by developing & installing new safety signs and boards in multiple languages to further assist in the reduction of injuries.
• To reduce the level of noise pollution at our factories through various precautionary measures.
• To increase our environmental and technological efficiencies to further reduce our quality standards.
• Introduction and continual improvement in the reporting process of the near miss culture.
• Improvement and efficiency of reporting of minor incidents and accidents.