In Lala, we work under a strict Code of Conduct which orients us towards the correct bahaviour in everyday situations. This is impulse by our values in order to provide an ethical bahaviour culture within all the groups we have a relationship with, and with the objective of optimally reaching our goals.

This Code of Conduct, addresses four main topics.

» Relationship with customers
» Relationship with suppliers.
» Relationship with the competition
» Relationship with the authorities

We work to ensure that our staff’s tasks are carried out within the legal framework and abiding to people’s dignity. We comply with the Federal Labor Law and with the Official Mexican Regulations, which dictated the working, safety and health conditions, complaint rights and other fundamental rights of working life.

TRAINING IN ETHICS RIGHTS AND FIGHTING CORRUPTION

Professional
Categories
Number of
trained people
Hours dedicated
to training
Average training hours
per collaborator
Directors/Managers 92 1,253.5 13.6
Heads/supervisors 759 9,912.5 13
Administrative staff 1,048 12,788.5 12.2
Operation Union 3,727 68,187.5 18.2
Sales Union 4,133 75,715 18.2
External 48 1,790.5 37.3
Total 9,807 169,647.5 17.3

FORMAL COMPLAINT MECHANISMS

Everyone related to Grupo Lala may report situations regarding our Code of Conduct, which is of public knowledge and can be found in the Company’s website. The support line is available 24 hours, 7 days a week. Complaints may be done anonymously and are taken care of by an external consultant. We have strict control of every report and they are all seen to by an Ethics Committee, they are all dealt with and an answer is provided in every case.

ORGANIZATIONS AND CHAMBERS

[G4-16]

We participate in more than 20 national and multilateral Trade Union organizations, between associations and chambers. We consider these strategic for Grupo Lala in order to provide the best possible conditions for the sector and business development hence contributing to the fulfillment of the company’s mission, always observing its values and code of conduct regarding defined strategies.

Upper Business Leaders

Interlocution with the highest rank of public and private sectors.

Mexico

» Mexican Business Council *
» National Farming Council (CNA) *
» National Confederation of Industrial Chamber (CONCAMIN)

Nicaragua

» Nicaragua Industrial Chamber (Cadin)*
» Nicaragua Commerce and Services Chamber (CCSN)*

Organizations related to the business

Accurate attention to public policies and regulations for our sector, which have a part in the business.

Mexico

» National Private Transport Association (ANTP) *
» National Transformation Industry Chamber (CANACINTRA) *
» National Milk Industrials Chamber (CANILEC) *
» Mexican Industrial Council of Consumer Products, A.C

Nicaragua

» Nicaraguan Dairy Sector Chamber (Canislac)*
» Nicaragua Producers and Exporters Association (APEN)*

Costa Rica

» National Milk Producers Chamber (PROLECHE)

Internacional

» Panamerican Dairy Federation (FEPALE)*

*Lala has a significant position in the Board of Directors.

ADMINISTRATION COUNCIL

[G4-34, G4-35, G4-36, G4-37, G4-38, G4-39, G4-40, G4-52]

President

Eduardo Tricio Haro

Propietary Board Members

Marcelo Fulgencio Gómez Ganem

José Manuel Tricio Cerro

Juan Carlos Larrinaga Sosa

Independent Board Members

Arquímedes Adriano Celis Ordaz

Rafael Robles Miaja

Juan Pablo del Valle Perochena

Pablo Roberto González Guajardo

Blanca Avelina Treviño de Vega

Mauricio Gárate Meza1

Secretary

Auditing and Corporate Practices Commmitee

Rafael Robles Miaja

President

Juan Pablo del Valle Perochena

Pablo Roberto González Guajardo

Blanca Avelina Treviño de Vega

1 Appointed in the Administrative Council Session
on April 24, 2017.

We are an Anonymous Stock Corporation, hence our Administrative Council is to be formed by a maximum of 21 members, of which 25% must be independents elected based of their experience, abilities, and their Reputation in the General Ordinary Shareholders Assembly.

According to the Stock Market Exchange Act and our social regulations, the functions of our Administrative Council are, among others, to invigilate the management and to establish general strategies to the direction of Grupo Lala’s business and that of the legal entities under its control. We hold Administrative Council Sessions in which the quorum exceeds 80%.

The activities established by the Auditing and Corporate Practices Committee, from their foundation are as follows:

Supervise external auditors, to communicate to the Board any irregularities in internal control, regulate the realization of operations between parties as well as the General Director’s activities and financial function and the elaboration of a yearly report.

Our Auditing and Corporate Practices Committee is integrated solely by independent members of the Administration Council.

Some other main functions and faculties of the Committee are: to formulate recommendations to the Council regarding performance of the main collaborators, operations with related parties, independent rulings, call shareholders assemblies and support the preparation of reports to Ordinary General Shareholders Assembly.

Moreover, from February of the present year, the Company has a Compensation Committee which carries out activities regarding Compensation and Assessment established by the Lala Auditing and Corporate Practices Committee and those determined by the Administration Council.

The Compensation Committee is formed by two independent council members and a board member.

Pablo Roberto González Guajardo – President

Juan Pablo del Valle Perochena – Member

Eduardo Tricio Haro – Member

Members of this Committee were appointed by the Administration Council and then ratified by the General Shareholders Assembly. Their main functions are: (i) Suggest assessment and compensation criteria of the General Director and high-end members, as well as the separation payment of the General Director; (ii) Analyze the proposal put forward by the General Director regarding the structure and compensation criteria for the Society personnel and (iii) Analyze and present to the Administration Council, for their approval the Formal Succession of the General Director System and high- end members.

The Lala General Shareholders Assembly is in charge of determining the payment to council members and other members of the different Committees, based on their attendances to the sessions which take place.

The growth of our Company, owes itself to the strategic and sustainable vision of our Directive team and to the commitment of our executives, as well as to the collaborators’. This joint work has allowed us to take seize investment opportunities in different markets and segments.

We reward our collaborators through productivity bonuses which are calculated and set according to their performance. Moreover, we have an Action Plan for high-end collaborators, which is aligned with the generation of value in the Company and interests of our shareholders, through the fulfillment of strategic rulings and business objectives so as to foster a high-performance culture. This way, we achieve our high-end staff commitment and development.

Our regulations include certain shareholders and minority shareholders’ protection, according to the Stock Market Law and General Commercial Societies.

Information about Action

Lala actions, series B belong to the stock market listings ever since October, 2013 under the ticker symbol “LALA B”.

Future declarations

This document contains certain previsions, projections and future declarations regarding Grupo Lala’s and subsidiaries financial situation, operation results and operative information, as well as plans and objectives related to these respects.

The present inform does not represent a value offer from LALA. It has been issued solely with information purposes.

SHAREHOLDERS AND INVESTORS CONTACT INFORMATION

[G4-5, G4-6, G4-7, G4-31]