Corporate Social Responsibility /Code of Conduct

EBRO FOODS GROUP CODE OF CONDUCT

INDICE

I. GENERAL ASPECTS

1. Introduction

This Code of Conduct (“the Code”) is an update of the Code of Ethics of 2003 and Code of Conduct of 2008 of the Ebro Foods Group (“the Group”) and provides guidance on how to act in the Group’s internal and external relationships, strengthening the values that distinguish us and establishing a basic reference to be followed by the Group.

The Code aims to:

Be a formal, institutional reference for personal and professional conduct.
Guarantee the responsible, ethical behaviour of all the Group’s professionals in their work.
Reduce the element of subjectivity in personal interpretations of moral and ethical principles.
Create a standardization tool to guarantee progressive implementation throughout the Group of the ten principles of the United Nations Global Compact.
Grow responsibly and committed to all our stakeholders.

2. Scope of application

2.1. The Code is binding on each and all of the Group’s employees and executives, regardless of their hierarchical level and geographical location, and on all members of the governing bodies of the Group’s companies.

2.2. The Code will also be applicable to customers, suppliers, shareholders and other stakeholders with which the Group interacts in its operations insofar as the values, principles and rules set out herein may be applicable to them and the Group has the power to enforce them.

2.3. The scope of application of the Code may also be extended to any other persons related with the Group whenever, by virtue of the nature of that relationship, their actions may in any way affect the reputation of Ebro Foods.

2.4. The contents of the Code will prevail over any contradictory internal regulations, unless the latter establish stricter behavioural requirements.

2.5. The employees of Group companies bound by codes of conduct under the national laws governing those companies shall also accept and comply with those other codes. Adequate coordination will be established to ensure that, as far as possible, those other codes of conduct contain the same principles, vision and values as the Ebro Foods Group Code of Conduct.

2.6. Any violation or breach of the Code that is classified as a labour offence shall be penalised according to the labour laws, without prejudice to any other liability that the infringer may incur.

3. Monitoring and control of application of the Code of Conduct

3.1. The Group shall progressively take such measures as may be necessary to enforce all the values, principles and rules set out in this Code, circulating it among all relevant persons and solving any queries or uncertainties regarding its application as per Section VI.

3.2. The Audit and Compliance Committee, by delegation of the Ebro Foods Board of Directors, is responsible for monitoring and controlling application of the Code. Any doubts that may arise regarding its interpretation and application shall be consulted as per Section VI.

3.3. The Audit and Compliance Committee shall report regularly to the Group’s Board of Directors on any queries raised in respect of the interpretation and application of the Code of Conduct, how they have been solved, the level of compliance with the Code and any incidents related therewith or infringements thereof.

4. Development and amendment of the Code

4.1. The Code of Conduct, by nature, cannot cover all potential situations, but merely establishes fundamental criteria to guide the conduct of the Group’s professionals and, if necessary, settle any doubts that may arise in the performance of their professional duties. Each Group company may establish and develop specific rules of action in their area of business, respecting at all times the vision and values of the Group and the rules of conduct established in this Code, and shall report on those rules to the Audit and Compliance Committee through its Secretary.

4.2. Any justified non-observance of the Code of Conduct must be approved by the Audit and Compliance Committee, even when required by the national laws in place in any of the countries in which the Group operates.

II. MISSION, VISION AND VALUES OF THE EBRO FOODS GROUP

The mission of the Ebro Foods Group is to research, create, produce and put on the market foods with a high value added, which satisfy people’s nutritional requirements while enhancing their health and well-being.

The vision of the Ebro Foods Group is to achieve sustainable growth while ensuring ethical behaviour and personal and professional integrity in its business, creating value for shareholders, minimizing the impact of its operations on the environment, promoting the personal and professional development of its employees, improving the quality of life of society and satisfying the needs of its customers and consumers.

The values upheld by the Ebro Foods Group are:

Leadership
Transparency
Honesty
Accountability
Integrity
Culture of effort
Ambition to generate value
Environmental responsibility
Service vocation
Focus on people
Innovation
Long-term sustainability

III. GENERAL PRINCIPLES OF THE EBRO FOODS GROUP

The Group policy goes beyond mere observation of and compliance with all the laws and regulations applicable to each business and requires:

Not making any decisions without considering their ethical value.
Rejecting unethical alternatives, just as others are rejected on the grounds of being economically unviable.
Taking into account the side effects of each and every action.
When making decisions, considering the stakeholders involved and respecting their rights.
Harmonising ethical requirements with other achievements.
Seeking at all times the utmost credibility.
Abstaining from abuse of Ebro Foods’ market position. There is no harm in mentioning the advantages deriving from our position, achieved through the legitimate success of our businesses, but they should not be imposed on other persons or organisations.
Involving executives and employees in actions to improve the present and future yield of the company.
Continuous training of executives and employees as the basis for achieving leadership and timely adaptation to changing circumstances.

IV. EMPLOYEES OF THE EBRO FOODS GROUP

1. Commitment to Human Rights

1.1. Relationships among all employees shall be based at all times on respect for other people’s dignity and non-discrimination.

1.2. The Group prohibits abuse of authority and any kind of physical or psychological harassment, as well as any other conduct that may generate an intimidating, offensive or hostile working environment.

1.3. The Group will not employ anyone under age and rejects any form of direct or indirect child labour.

1.4. Forced, compulsory labour is not permitted in any Group company.

1.5. The Group will promote the principle of equal treatment and equal opportunities for all employees, regardless of their race, colour, nationality, ethnic origin, religion, sex, political or sexual inclination, civil status, age, disability or family responsibilities, as a principle behind all human resources policies and applicable in the recruitment of employees, training, career opportunities, pay levels and all other aspects of employment relationships.

1.6. The Group will not prevent or restrict exercise by its employees of their right to freedom of association, trade union membership and activities and collective bargaining.

1.7. The Group will respect and promote human rights. Ebro Foods acknowledges that human rights are fundamental, universal rights and should be construed and recognised in accordance with international laws and practice, particularly the United Nations Universal Declaration of Human Rights and the principles proclaimed by the International Labour Organization (ILO).

2. Professional loyalty

The employees of the Ebro Group shall act at all times in the best interests of the company, loyally and making adequate use of the means and resources put at their disposal, avoiding any actions that could be detrimental to the company. In particular and in accordance with that general rule, they shall:

(i) Protect and take care of the Group`s assets that they have at their disposal or to which they have access, making no further use thereof than that required to perform their duties.
(ii) Ensure that expenditure is made only insofar as it may be strictly necessary to perform their duties.
(iii) Take every precaution to protect computer and data processing systems, taking extra care to implement the security measures available and avoiding any inadequate use of electronic mail, internet access or other similar possibilities put at their disposal.
(iv) Respect the industrial property and rights to use corresponding to the Group in respect of any tool or any work developed or created within the Group, whether through their own professional work or that of third parties. They shall not, therefore, use those tools or work outside the professional scope of their work and shall return all material containing them on request.
(v) Comply with the applicable data protection laws and regulations, treating all personal information as confidential.
(vi) Use the image, name or brands of the Group exclusively for adeequate performance of their professional duties within the Group.
(vii) Abstain from availing themselves for their own benefit of any business opportunities of interest to the Group.

3. Professional development and training

The Group will promote the personal and professional development of its employees, encouraging them to improve their own skills and abilities. All selection, recruitment, training and internal promotion policies and actions will be based on clear criteria of capacity, skills and professional merit.

4. Work-life balance

The Group will encourage its companies to implement work-life policies to help employees to achieve the best possible balance between their work and personal commitments.

5. Pay policy

The Group will offer its employees fair, adequate remuneration for the labour market in which it operates.

6. Commitment to health and safety

6.1. The Group will guarantee a healthy, safe working environment for its employees, requiring its companies to take all reasonable measures to maximize the prevention of occupational hazards.

6.2. Group employees shall pay special attention to rules on health and safety at work with a view to preventing and minimizing occupational hazards. All employees will be responsible for maintenance of their workplace, observing the applicable health and safety rules and practices.

7. Right to privacy and data protection

7.1. The Group shall respect its employees’ right to privacy, in all forms, and undertakes not to disclose any personal data of its employees without their consent, except when required by legal obligation or by court or administrative order.

7.2. Any Group employees who have access to the personal data of other Group employees in their work are obliged to keep that information confidential, respecting at all times the data protection laws and regulations in place.

7.3. The Group shall also take such measures as may be necessary to preserve the confidential nature of any personal data it may have and to guarantee confidentiality in their transfer, whenever this is necessary for business purposes, in accordance with the prevailing data protection laws.

8. Conflicts of interest

8.1. A conflict of interest shall be deemed to exist when the private interests of the employees working in any of the Group’s companies, or any related parties, interfere with their duties and responsibilities within the company.

8.2. Related parties shall include: the employee’s spouse or person with an equivalent relationship, ascendants, descendants or siblings of the employee or his/her spouse or person with an equivalent relationship, companies that are or may be directly or indirectly controlled by the employee or any of his/her related parties and companies or entities in which the employee or any of his/her related parties hold an executive or management position or from which he/she or they receive remuneration or emoluments of whatsoever nature.

8.3. In these cases, any employees who are affected by a conflict of interest in the performance of their duties shall abstain from making decisions and, in the event of any doubt regarding a possible conflict of interest, the affected person shall inform his/her superior, who shall in turn notify the Audit and Compliance Committee through its Secretary.

8.4. Under no circumstances may any operations or activities that represent or may represent a conflict of interest be performed within the Group without written authorisation from the Audit and Compliance Committee. The employee in question shall abstain from taking any action until the Committee has answered his/her consultation.

9. Gifts

Group employees may not give or accept gifts during the performance of their professional duties. By exception, the delivery and acceptance of gifts shall be permitted if they are: (a) normal commercial gestures and (b) not prohibited by law or generally accepted commercial practice.

10. Confidential information

Group employees shall keep all the trade secrets and information they may handle during their professional work strictly confidential. For this purpose, “confidential information” is any information capable of being disclosed orally, in writing or by any other tangible or intangible means or carrier, to which an employee may have access during his/her professional activity, including, among others, information related with business plans, products or services, financial forecasts, patents, trademarks and whatsoever other intellectual or industrial property rights, designs, budgets, particulars of customers, suppliers, shareholders, candidates in selection procedures and such other persons as may establish any kind of relationship with the Group, as well as any other information indicated or marked by the company as confidential.

This confidentiality duty shall be maintained even after termination of the employee’s contract with any of the Group companies.

11. Price-sensitive information

11.1. Price-sensitive information is any specific information on the Group that is not public and which, were it to be or have been made public, could affect the price of the Group’s shares.

11.2. Employees who have access to any price-sensitive information of the Group shall not disclose that information to any third parties outside the transaction causing the existence of that price-sensitive information.

V. RELATIONS WITH THE ENVIRONMENT OF THE EBRO FOODS GROUP

1. Relations with shareholders

1.1. The Group undertakes to achieve for its shareholders not only the largest possible profit but also a sustained profit.

1.2. The Group is obliged to provide its shareholders promptly, fairly and transparently with all information directly or indirectly affecting the development of the company. It will, accordingly, previously inform them through the official bodies and immediately afterwards through the different external agents, media and analysts.

1.3. The Group shall respect and protect minority shareholders’ rights, prohibiting any unfair or abusive use of insider or price-sensitive information.

1.4. Ebro Foods undertakes to manage the company according to the generally accepted principles of corporate governance. The Group has largely complied with the Recommendations set out in the Unified Code of Good Governance adopted in Spain, having implemented them almost entirely. Compliance with those Recommendations can be checked every year in the Annual Corporate Governance Reports published by the company and made generally available on the company’s corporate web site.

2. Relations with suppliers

2.1. The Group shall develop a detailed procedure for the assessment and selection of its suppliers based on social, ethical and environmental criteria, with a view to selecting those which, apart from offering the best terms, share the Ebro Foods principles and commitments described in this Code.

2.2. The Group’s relations with suppliers of goods and services shall be conducted ethically and lawfully. Influences seeking privileges or favourable treatment must be avoided. No Ebro Foods employee may receive gifts from suppliers or manufacturers of products consumed within the company, in the form of money, services or items, promotional or otherwise, with a high value or reasonably exceeding the habitual compliments, pursuant to Section IV.8 above. Likewise, no gifts shall be given that could make our suppliers uncomfortable or be misinterpreted by third parties.

2.3. Prices and other information indicated by suppliers are confidential and shall not be used outside Ebro Foods unless authorised in writing.

2.4. The Group’s suppliers shall comply with the laws and regulations in place and respect internationally proclaimed human rights, making sure they do not violate or abuse any human rights within their business operations. Accordingly, all suppliers shall treat their employees with dignity and respect. No physical punishment, harassment or abuse of power shall be tolerated.

2.5. Suppliers shall see that their subcontractors work according to the rules promoted herein and the corresponding legal provisions.

2.6. All suppliers shall promote and respect the following principles:

Abolish all forms of child labour.
Eliminate all forms of forced and compulsory labour.
Avoid discrimination in any job.
Respect the maximum working hours and minimum wages established in the national laws in place in the country in which they operate.
Ensure that their employees do their work according to occupational safety and hygiene standards.

2.7. The Group’s suppliers shall take such measures as may be necessary to minimize the environmental impact of their operations and promote the development and propagation of environmentally friendly technologies.

2.8. The Group’s suppliers shall make sure they do not participate in any kind of corruption, extortion or bribery that could infringe the generally accepted commercial rules or in any way affect the Ebro Group.

2.9. Suppliers shall allow inspections by Ebro Foods and authorised third parties to check full compliance of the preceding principles.

2.10. The Group shall value positively any suppliers who express their commitment to the principles promoted in this Code by accepting and complying with them.

2.11. The Group shall disclose the contents of this Code of Conduct to its suppliers, incorporating this Code in all contracts made with them.

3. Relations with consumers and customers

3.1. The Group undertakes to offer top quality services and products according to the quality requirements and standards established in law and its food safety and quality policy.

3.2. The Group shall strive to achieve maximum transparency in all information exchanged with consumers and customers in order to maintain a high degree of trust.

3.3. The Group shall guarantee the confidentiality of its customers’ particulars, undertaking not to disclose them to third parties except with the customer’s consent, by legal obligation or in response to court or administrative orders. Customers’ personal data shall be obtained, used and processed in such a way as to guarantee their privacy and compliance with the personal data protection laws in place from time to time.

3.4. Any professionals of the Ebro Group who, by virtue of their job, have access to customer data, shall keep those data confidential and comply with all applicable laws on personal data protection.

4. Relations with competitors

4.1. The Group undertakes to compete fairly on the markets in which it operates, encouraging free competition, complying with the laws in place and avoiding any abusive conduct or restrictive practices.

4.2. The Group prohibits any actions entailing unfair competition and undertakes to ensure compliance with the fair trading laws applicable in the countries in which it operates.

5. Protection of the environment

5.1. The Group declares its firm commitment to respect and conservation of the environment, implementing an environmental protection policy which is updated as and when new circumstances appear.

5.2. The Group shall implement the necessary tools in its companies to minimize the impact of their operations on the environment, with a view to reducing pollution, making a rational use of resources, minimizing water, paper and energy consumption, reducing waste generation and emissions, favouring recycling and seeking eco-efficiency.

5.3. The Group shall see that its companies comply with the environmental laws applicable to their operations and any additional commitments assumed voluntarily.

5.4. The Group shall also foster the implementation of good environmental practices among its suppliers and customers.

6. Relations with society

6.1. The Group is a global company operating in several different geographical areas and, as such, contributes towards the creation of local employment and development in the communities in which it operates.

6.2. The Group has an active commitment to social action and works, through the Ebro Foundation, with Non-Governmental Organisations, Foundations and Institutions in the development of numerous programmes, including training and integration of the disabled, helping socially underprivileged groups and promoting agricultural projects in the Third World.

7. Relations with authorities, regulatory bodies and governments

Relations with authorities, regulatory bodies and governments shall be conducted according to the principle of cooperation and transparency. Group employees shall not make any contributions on behalf of the company to political parties, authorities, regulatory bodies, governments or institutions in general.

8. True, adequate information

8.1. Any forgery, manipulation or deliberate use of false information is fraud. The Group assumes a principle of conduct based on informative transparency, consisting of an undertaking to report reliable information to the markets, whether financial, accounting or of whatsoever other nature. Accordingly, the company’s internal and external financial reporting shall give a true and fair view of its real economic, financial and equity situation according to generally accepted accounting principles. Group employees shall ensure that the information is true, complete and comprehensible. Under no circumstances shall they knowingly provide incorrect, inaccurate or vague information.

8.2. Relations with investors and financial analysts shall be channelled through the Ebro Foods Investor Relations Department.

8.3. Relations with the media shall be channelled through the Ebro Foods Communications Department. None of the Group’s employees shall provide information on the company to the media without the prior knowledge and authorisation of this Department.

9. Anti-corruption, bribery, illegal commissions and influence peddling

9.1. The Group undertakes to eradicate any form of corruption within the company, including extortion, crime and money laundering.

9.2. No employee or collaborator of Ebro Foods shall attempt to unduly influence the government or civil servants or endeavour to obtain any favour from any political party.

9.3. All forms of corruption, bribery or payment of commissions are prohibited, through actions or omissions or the creation or maintenance of privileged or irregular situations with a view to obtaining any benefit for the Group or for the employees involved.

9.4. All employees and other persons having a contractual relationship with the Group undertake not to request, accept or offer any payment -in cash or in kind- or, in general, any unfair benefit or advantage of whatsoever nature favouring the employee or person in question or a third party over others. Employees shall also abstain from making payments with a view to securing easier or faster processing, consisting of the delivery of money or goods in kind, in whatsoever amount, in exchange for securing or expediting the course of an application or action at or in respect of any court, public administration or official body anywhere in the world.

VI. INTERNAL CIRCULATION, ACCEPTANCE AND QUERIES REGARDING THE CODE

1. Circulation and acceptance among the Group employees

The different companies of the Ebro Foods Group shall circulate the contents of this Code among their employees by:

Sending it to the company e-mails of the employees, whenever they have them.
Posting the Code on the notice board at each and all of their workplaces.

Moreover, the Human Resources Department of each company shall hand out a copy to each employee, obtaining in return the signed letter of acknowledgement and acceptance of the Code set out in Annex I hereto.

A copy of the Code shall also be delivered to any new employees who may join the company in the future, who will be required to sign the letter of acknowledgement and acceptance.

2. Answering of queries

The Ebro Foods Audit and Compliance Committee will be competent to settle any queries regarding the interpretation of this Code.

Any employee may submit consultations, suggestions or queries regarding specific cases that may affect him/her, addressing the Audit and Compliance Committee in any language via the specific e-mail codigodeconducta@ebrofoods.es.

The Audit and Compliance Committee, or such person as it may delegate, shall expressly answer or clarify all queries raised.

VII. WHISTLE-BLOWING PROCEDURE: REPORTING CHANNEL

All persons bound by this Code pursuant to Section I.2 are obliged to comply and ensure compliance herewith.

Nobody, regardless of his/her position in the Group, is authorised to require a person bound by the Code to breach the contents hereof. No relevant person may justify any malpractice or conduct infringing the Code alleging an order from a superior or ignorance of the contents of the Code.

In this regard, any person bound by the Code may report, under a guarantee of absolute confidentiality, any default or infringement of any of the principles set out in this Code, for which a reporting channel is established as follows:

Reports may be sent to the e-mail canaldedenuncias@ebrofoods.es
Access to that e-mail account, technologically protected to prevent any unauthorised access, shall be limited exclusively to the Chairman of the Audit and Compliance Committee who, as independent director, has no relationship with the management structure of the Ebro Foods Group.
According to the contents of the report, the Chairman of the Audit and Compliance Committee may obtain the appropriate information and make the necessary consultations to clarify the issue, guaranteeing at all times the absolute confidentiality of the reporter and not informing the reported person or persons until the investigation has concluded.
The Chairman of the Audit and Compliance Committee shall keep in touch with the reporter, informing him/her of the enquiries made and the final outcome and consequences.
The Chairman of the Audit and Compliance Committee shall in all cases establish the order of priority, process, investigate and resolve reports, according to their importance and nature, paying special attention to those concerning a possible financial or accounting fraud and possible fraudulent activities.

VIII. EFFECTIVE DATE AND EXTERNAL DISTRIBUTION

This Code of Conduct was approved by the Board of Directors of Ebro Foods, S.A. on 28 March 2012 and annuls and replaces the previous Code of Conduct, approved on 30 April 2008.

This Code shall be applicable to all the companies in the Ebro Foods Group as from 29 May 2012, the date of the Annual General Meeting of Shareholders of Ebro Foods, S.A.

The Board of Directors of Ebro Foods, S.A. shall regularly assess the awareness and effectiveness of this Code of Conduct and shall take such action as may be necessary, if any, in this regard.

The National Securities Market Commission (CNMV) was informed of this Code in a Regulatory Announcement of the same date and it has been published on the company’s web site www.ebrofoods.es.

ANNEX I

DECLARATION OF ACKNOWLEDGEMENT AND ACCEPTANCE OF THE EBRO FOODS GROUP CODE OF CONDUCT

Name:

ID no.:

Position:

Department:

Business address:

Ebro Group company in which you are employed:

I, the undersigned, hereby declare that I have been issued with and received a copy of the Ebro Foods Code of Conduct and that I acknowledge and accept it, undertaking to comply with the terms thereof in my professional duties.

In………….. on …. …………. 2012.

Any employee of the Ebro Foods Group may inform the Audit and Compliance Committee of the Board of Directors, being guaranteed absolute confidentiality, of any potentially important irregularities that may be observed within the company.