Corporate Sustainability report

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EDITORIAL TEAM:Jorge Eduardo Ramírez, Luisa Fernanda Acevedo, Carlos Fernando Romero, Felipe Andrés Gómez, Karen Heshusius, Juan Manuel Ramírez y Diana Aguilar S.

SOURCE:Alpinistas.

EDITING AND PROOFREADING:Precise.

DESIGN:43.

CREATIVE MANAGEMENT:Adriana Cajiao y Natalia Hernández.

LAYOUT AND DESIGN:Adriana Cajiao, Natalia Hernández, Olivia Williams, Jose Durán y Sebastián Castro.

GRAPHICS AND ILLUSTRATIONS:Olivia Williams.

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VIDEOS:Precise.TRANSLATION:Precision Translators Ltda.

The typefaces used in this report are Archer, LangoPx and Mathilde.Printed on 115g recycled Propal matte offset paper.

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INDEXChapter 01.

Chapter 02.

Chapter 03.

Chapter 04.

Chapter 05.

Chapter 06.

Chapter 07.

Chapter 08.

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6

8

11

29

31

31

37

49

69

81

89

99

103

104

105

FROM OUR PRESIDENTABOUT THIS REPORTOUR PERFORMANCEABOUT OUR ORGANIZATIONJOURNEY FOR SUSTAINABILITYTHE 7 SUSTAINABILITY CHALLENGESD1. DIALOGUED2. ECONOMIC VALUED3. ALPINISTASD4. ENVIRONMENTD5. NUTRITIOND6. SUSTAINABLE BUSINESSESD7. SOCIAL VALUECHALLENGES 2012+ / 2013+EXTERNAL VERIFICATIONTABLE OF GRI INDICATORS

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Chapter 01FROM OUR PRESIDENT

ALPINA IS AN ORGANIZATION THAT HAS EVOLVED BY UNDERSTANDING IT IS PART OF A SYSTEM.We have taken a path full of challenges and opportunities, thanks to our industry and to the entrepreneurial and innovative character of our Alpinistas.We were pioneers when we decided that even though philanthropy in itself is a valuable act, it is not enough. We decided to take a step further and make Alpina a socially responsible company, by being a good neighbor that proactively creates projects for and with the communities of our area of influence.

FROM THE MOMENT WE STARTED TO IDENTIFY AND UNDERSTAND THE CHALLENGES THAT DETRACT FROM OUR COMMITMENT OF MAKING ALPINA SUSTAINABLE, WE KNEW THAT WE WOULD NOT BE MAKING THIS JOURNEY ALONE.

Once more, challenged by our surroundings and with the desire to lead the large-scale changes that we want to see in society, we came up with a new social business model to create opportunities for supply, nutrition and job creation for the population at the base of the social pyramid.

In 2012, we experienced a new way of evolving. We aimed to increase the value generated by our business and by our partners in the value chain through better and more efficient use of our potential as a system.

We gave ourselves an exciting challenge. If we really want our business and that of our partners to be sustainable then, it is time to strengthen sustainability at the center of our operations as a business through innovation, strategic planning and in the way we operate, at the heart of our processes and projects.

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The path is laid out. We developed a strategy to 2020 with our stakeholders. It outlines Alpina’s 7 Sustainability Challenges and the corresponding relevant issues and indicators. This measurable and standardized strategy for our operations allows us to compare ourselves to global standards. This roadmap defines how we will progress in our degree of sustainable maturity as an organization.

From the moment we started to identify and understand the challenges that detract from our commitment of making Alpina sustainable, we knew that we would not be making this journey alone. We make the journey with the Alpinistas who carry out our business every day and also with our suppliers, distributors, clients, consumers, communities and other stakeholders that surround us and contribute to our daily tasks.

We know that now we have to face a key factor to succeed in this journey. We must strengthen the culture of everyone who builds Alpina, so that sustainability becomes a responsibility, an opportunity that can and must be managed in the daily life of our business.

DIALOGUE

NUTRITION

SUSTAINABLE BUSINESSES

SOCIAL VALUE

ECONOMIC VALUE

ALPINISTAS

ENVIRONMENT

CHALLENGE 01.

CHALLENGE 02.

CHALLENGE 03.

CHALLENGE 04.

CHALLENGE 05.

CHALLENGE 06.

CHALLENGE 07.

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Chapter 02ABOUT THIS REPORT

This is Alpina´s fifth sustainability report, in which we share with our stakeholders our way of developing our business strategy to make it even more sustainable. The guidelines for drafting sustainability reports from the Global Reporting Iniciative (GRI-G3) and the food industry supplement are the methodological framework for creating our 2012 Sustainability Report.

THE ANALYSIS OF THE DIALOGUES’ OUT COME LED US TO REVIEW AND FURTHER DEVELOP ALPINA’S 7 SUSTAINABILITY CHALLENGES.

Inclusiveness With the aim of further increasing our stakeholders’ participation in the creation of our business’s future,in 2012 we carried out an open and interactive dialogue process with the participation of 667 people fromfive of our stakeholder groups (clients, community, consumers, distributors, agricultural suppliers andindustrial suppliers) in Colombia, Ecuador and Venezuela.

Materiality Materiality refers to the process through which critical topics are identified and defined to ensure the business’ sustainability.

The so-cal led “Material i ty Dialogues” are simply a way to proactively open a process of listening and interaction with our stakeholders to collectively build a stronger and more inclusive sustainable business strategy.

The topics of greatest impact and interest for our partners are identified through these conversations and combined

with those that are strategic and relevant for our business. Then, the “material” topics or criticalissues that must be addressed in the short, medium and long term to make our business sustainableare selected.

The analysis of the dialogues’ outcome led us to review Alpina’s 7 Sustainability Challenges and the relevant related issues.A comparative table of the evolution of these challenges is presented on the following page.

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Build trust worthy, long-lasting and transparent relationships with our surroundings

Generate economic growth for our shareholders and our surroundings

Build the best place to work

Create life from life

Provide healthy food for the world

Guarantee the sustainability of each link in our value chain

Grow and develop together with society

Build a good place to work.

Ensure efficient use and preservation of the natural resources needed for our operations.

Offer nutritional, healthy and delicious quality foods to the largest number of consumers possible.

Strengthen the businesses of our strategic value chain partners.

Generate social value in the communities of our area of influence.

Encourage trust worthy and mutually beneficial relationships with our stakeholders

Generate additional economic growth for our shareholders and investors and in our value chain.

2012 Sustainability Report Challenge 01. Ethics and Transparency

Challenge 02. Economic Value

Challenge 03. Alpinistas

Challenge 04. Environment

Challenge 05. Nourish your Life

Challenge 06. Value Chain

Challenge 07. Social Value

Challenge 04. Environment

Challenge 05. Nutrition

Challenge 06. Sustainable Business

Challenge 07. Social Value

Challenge 03. Alpinistas

Challenge 01.Dialogue

Challenge 02. Economic Value

2011 Sustainability Report

We will take the time in each chapter to explain the evolution of some the sustainability challenges. However, we think it is important to highlight the issue of ethics and transparency in this section.

Our stakeholders made us see that ethics and transparency should not be expressed like the otherchallenges, as they feel that Alpina should address them as a higher-level, multidisciplinary issue.Furthermore, as comprehensive values, they must not be limited to quantitative indicators. Thestakeholders recognized Alpina as an ethical and transparent company and they urge us to continuepromoting and strengthening the mechanisms to ensure this.

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Chapter 03OUR PERFORMANCEHighlights

The contents of this report compile information from Alpina Colombia, Alpina Venezuela, Alpina Ecuador, Alpina Foods (United States) and Alpina Peru, for the period from January 1 to December 31, 2012.

This report has an A+ self declared application level, according to GRI guidelines.

Scope of the Report and PeriodDELOITTE HAS VALIDATED OUR REPORT AND CONFIRMED THAT IT HAS AN A+ APPLICATIONLEVEL.

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Highlights

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{AUGMENTED REALITY AVAILABLE}

Chapter 04ABOUT OUR

ORGANIZATIONCountries of Operation y Markets Supplied

INDUSTRIAL OPERATIONS

CORPORATE

COLOMBIA

VENEZUELA

ECUADOR

UNITED STATES

PERÚ

COLOMBIAVENEZUELAECUADOR

UNITED STATESPERÚ (JOINT VENTURE)

ADMINISTRATION

COMMERCIAL PRESENCE

COMMERCIAL PRESENCE

ADMINISTRATION

ADMINISTRATION

COUNTRIES OF OPERATION AND MARKETS SUPPLIED

PRODUCTIONCENTERS

BarranquillaBogotá

BucaramangaCali I and I ICartagena

Cúcuta Ibagué

Medell ínPereiraPopayán

SopóVillavicencio

REGIONAL DISTRIBUTION CENTERS

CalotoChinchináEntrerríosFacatativáPopayán

Sopó

PRODUCTIONCENTERS

ChigorodóEntrerríosGuachucalSimijaca

Valledupar

COLLECTION CENTERS

Bogotá-Complejo

logístico San Cayetano

Bogotá-Oficinas centrales

ADMINISTRATION

PRODUCTION CENTERS

Villa de Cura

STORAGE WAREHOUSE

Valencia

ADMINISTRATION

Caracas-Central Offices


Caracas

GuayaquilMachachi

QuitoSan Gabriel

Sopó -Corporate Building

PRODUCTION CENTERS

MachachiSan Gabriel

ADMINISTRATION

Quito-Central Offices

Miami Batavia

Lima Bolivia

ArubaBarbadosBermudaCanadáCurazaoGuyanaHaití

JamaicaPuerto RicoSt MartinSurinamTrinidady Tobago


We talk about sustainability with:Juan Fernando MayaAlpina Ecuador General ManagerEnrique SuárezAlpina Venezuela Director of OperationsFelipe CardonaBusiness Development Manager

LISTEN TO INTERVIEWS FROM THE REPORT’S ONLINE VERSION

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Higher Purpose

Collective Commitments

At Alpina we are committed with FEEDING THE WORLD HEALTHILY. We firmly believe that LIFE CREATES LIFE. We are an intelligent organization that consistently achieves COLLECTIVE PROSPERITY.

1. We always work to inspire confidence in our food. And we are dedicated to this work, with the aim to provide food for all families.

2. We are committed to the community. Therefore, we are interested in generating wellbeing and development and we protect our environment.

3. We have great respect for our clients and employees, as well as the communities we work for. We value their diversity.

4. We believe in observing, interpreting, anticipating and responding to our consumers and clients and earning their loyalty and preference.

5. We believe in loving and being loved. Our brand represents us.

6. We believe in being innovative leaders. We provide ingenious and creative solutions. We are passionate about continuously learning and developing.

7. We take our food products everywhere people want to eat healthy.

8. We build a healthy and prosperous future for our clients, consumers, suppliers, employers and shareholders.

Corporate Principles

THE COLLECTIVE COMMITMENTS ARE REFLECTED IN A CONDUCT THAT IS KEY FOR MANAGING OUR 7 SUSTAINABILITY CHALLENGES. FOR THAT REASON:

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C LI E

N T /

C U S T O M E R I N N O V A T I O N

O P E R A T I O N A L E X C E L L E N C E S U S T A I N A B I L I TY

HIGHER PURPOSE

MEGA2017

COM

PETE

BET

TER

OPER

ATE

BETT

ER

Corporate Strategy

2017 Mega1

1. Affordable Daily Product Line (Milk and Refreshing Drinks)

1 As part of the normal process of revising our projections and setting goals to expand our horizons, we adjusted our MEGA 2017 model.

Our Goal for 2017 is to achieve sales of around COP 3.5 trillion (USD 2 billion) with a 27% share in income from operations outside Colombia. Main Brands and Products

At Alpina, we have a wide range of brands and products for different types of consumers in different categories:

In the white milk range, we have a wide variety of products: whole, lactose-free, low-fat, skim, enriched and extra-calcium milk, in addition to Alpin flavored milk available in chocolate,

strawberry, vanilla and the new cookies and cream flavor. This year, we launched the new Alpilac (not

100% milk) in the milk-based drink segment.On the other hand, in the refreshing drinks

product line, we offer the Soka and Fruper soft drinks, Alpina Frutto fruit juice and the new citrus

Alpifrut.

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2. Baby food and Indulgence Product Line

3. Nutritional Product Line

In this product line, we have products such as Alpinito (petit and dairy drink), Arequipe Alpina (original, coconut), Alpinette (original and fruit chunks), Flan Alpina and original Boggy and Boggy Premio jelly.

In this product line, we offer a variety of traditional products well known among our consumers: Bon Yurt, Yogurt Alpina (original, lactose-free, light and spoonable), Avena Alpina, Kumis Alpina and YogoYogo (bag, cup, premium and cereal),as well the new Alpina-Juan Valdez Café Latte.

In the baby food category, we have baby food, baby food with fructose, the new vegetable baby foods, baby food with yogurt (Comby),Néctar fruit juice, yogurt, yogurt with cereal, Alpina

Baby and Alpinito Bebés ready-to-eat baby food.

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At Alpina, we have a large variety of cheeses in our portfolio: fresh white cheeses: Campesino and Requesón; sliced cheeses such as Mozzarella and Double Cream; yellow cheeses such as Sabana and Gouda; grated cheeses such as Parmesan and the Swiss, Italian and Mexican blends; spreadable cheeses such as Cream Cheese; Alpina aged cheeses such as Blue Cheese, Tilsit (natural, smoked and herbs), Gruyere, Emmental, Provolone, Manchego, Fondue, Brie, Camembert and Pecorino.To complement this product family, we also offer cream and sour cream, as well as sticks of butter and spreadable butter.

4. Functional Product Lines

5. Cheese and Creams Product Line

Regeneris (chunks of fruit, fiber + cereal, zero, and with cereal), Finesse (yogurt, avena oat smoothie with cereal, cheese, milk and spreadable cheese) and Yox are the leading products in this category.

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Production and Plants

Percentage of Production Covered by Certifications from External EntitiesCertifications

10%0%

20%30%40%50%60%70%80%90%100%

ISO 9001 ISO 14001 HACCP BASC2009

20 1 0

20 1 1

2 0 1 2

86%

90%

86%

8 7%

25%

23%

20%

2 1%

74%

8 1%

76%

78%

100%

100%

100%

100%

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Production

2 0 1 1 2 0 1 2

Sopó184,891 212,274

Facativá45,431 51,842

Chinchiná35,420TONS

35,468TONS

Caloto31,236TONS

35,803TONS

Popayán29,621 30,894TONS

Entrerríos25,317TONS

29,906TONS

396,187TONS

351,916TONS

TONS

TONS

TONS TONS

TONS

Total Production of Plants in Colombia

Total Production of Plants in Venezuela and Ecuador

VILLA

DE C

URA

20 1 1 20 12MA

CHAC

HISAN

GAB

RIEL

TOTA

L10,324 9,772

7,482 12 ,460

8,75 1 9 ,063

26 ,557 3 1 ,295TONSTONS

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Losses in Production Losses in Production in Plants in Colombia

Losses in Production in Plants in Venezuela and Ecuador

ACTUAL PER FORMANCE

S opóF a c a t i v á

P op ay ánEn t r e r r í o s

T O T A L

Pérd idas en proceso p lanta s en Co lombia1 o 2

%

87 .9 1%88 .82%

55 .58%

90 .49%

87 . 10%

32,98232 ,743 29 ,083

C a l o t o 67 . 79%7 ,503 5 ,086

Ch i n ch i n á 69 .43%4 ,056 2 ,8 16

3 ,003 1 ,669

27 ,257 24 ,666

25 ,3 1 1 22 ,045

28 ,995GOAL

LO S S E S

V i l l a d e C u r aMa ch a ch i

S a n G a b r i e l 0 .55%1 .43%

5 .09%

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Corporate Model

contro l por admin i s t rac ión y ges t ión

Alpina Productos Alimenticios S.A.

(Colombia)Alpina Productos Alimenticios C.A.

(Venezuela)Alpina Perú SACAlpina Foods Inc.

(USA)Fundación Alpina Alpina Productos

Alimenticios AlpiEcuador S.A.

S OC I EDAD A L P I N A CORPORAT I VO S . A . ( P a n amá )

Alp ina Co lombia S .A . and i t s subs id iar ie s are lega l ent i t ie s under the admin-i s t ra t ive and manager ia l contro l of A lp ina Corporat ivo S .A . , headquartered

in Panama .

Alpina Cauca Zona Franca S.A.S. (Colombia)

Control by Administration and Management

Control by Capital

Contro l por cap i ta l

COLOMB I A ECUADOR BARBADO S

A l p i n a C a u c a Zon a Fra n c a

S . A . S .

A l p i n a Prod u c t o s A l imen t i c i o s

A l p i Ec u a do r S . A .

Va d i l b ex Inve s tmen t

L im i t ed

A L P I N A COLOMB I A S . A .

9 4% 99 .9% 60.8%

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Alpina Colombia Governing Bodies

2012 Corporate Model Structure

Strengthen Corporate Governance by formalizing the role of the key governance bodies and the Corporate Center, and by establishing the decision-making model, roles, responsibilities and powers that regulate interactions between different parts of the business.

Design a model to monitor and oversee the management of the Business Units (countries), the Services and Productivity Center, and the Corporate Center for effective and timely analysis of information for making strategic decisions.

In 2012, we worked on the Corporate Governance Strengthening and Business Management Monitoring Project, and set the following goals.

GENERAL S H AR EHOLDER S MEET I NG

Board ofDirectors

Legal Representative

The Board of Di rec tors i s composed of f ive (5 ) pr imary members and the i r respect ive persona l a l ternates . By law, the Aud i t Commit tee i s made up of the members of the Board of Di rec tors . Both have at lea s t three independent members . De lo i t te & Touche has served a s the Tax In spector s ince 2009.

A L P I N A COLOMB I A S . A .

TaxInspector

Audit Committee

Es truc tura Modelo Corporat ivo

Corporate Center

BusinessUnits

CentralizedProcesses

Guidelines and policies, monitoring and managerial control, skil ls development

Competitiveness, completeness, and local strategy

Operational excellence,

productivity and process efficiency

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InnovationDistribution of Investment in Research and Development

1 0 0 %9 0 %

8 0 %

7 0 %6 0 %

5 0 %

4 0 %

3 0 %2 0 %1 0 %0 %

8%

16%

26%

29%

21%

10%

23%

5%

40%

22%

1%15%

27%

35%

22% 24%

39%

7%

27%

3%

20 1220 1 120 102009

OPERATIONALIMPROVEMENTS

INFRASTRUCTUREDEVELOPMENT

MARKET RESEARCH(PRODUCTS AND CHANNELS )

NEW PRODUCTDEVELOPMENTNEW MARKETDEVELOPMENT

49 59new product s new product s

56new product s

5 1new product

INVESTMENT I y D

GROSS SALES1 , 4%=

INVESTMENT I y D

GROSS SALES1 , 4%= INVESTMENT I y D

GROSS SALES1 ,0%= INVESTMENT I y D

GROSS SALES1 , 2%=

USD 7,95 MM USD 8,03 MM USD 7,66 MM USD 9,59 MM

20 1220 1 120 102009

We formulated two business challenges, to which a total of 645 Alpinistas from all countries contributed 131 ideas. Experts in each topic are in charge of an in-depth study of the ideas with the greatest potential and the responsible areas implement the winning ideas if they are feasible.

Innovaxión is creating a new culture of joint creation and collaboration that will strengthen our capacity toprovide innovative solutions for our business challenges faster and at a lower cost.

WE BELIEVE THAT INNOVATION IS COLLABORATIVE AND THAT WE ALL HELP TO BUILD IT. FOR THAT REASON, IN 2012, WE STARTED INNOVAXIóN, AN OPEN INNOVATION PLATFORM (INITIALLY FOR EMPLOYEES) THAT USES COLLECTIVE INTELLIGENCE AND CREATIVITY TO FIND SOLUTIONS FOR BUSINESS CHALLENGES.

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Source of the Report

CASES %Employee

Anonymous

Costumer

Community

Client

Supplier

No applicable

89

171112338

TOTAL143

62.2%

11.9%

7.7%

8.4%

2.1%

5.6%

2.1%

100.0%

In 2012, we focused awareness-raising activities on ethics in everyday situations and ethical dilemmas that Alpinistas may face when carrying out their work. The goal was to make Alpinistas question whether they are acting in line with Alpina’s ethical principles and guidelines. To this effect, we held training sessions with approximately 200 Alpinistas.

We have also extended this work to certain stakeholders, such as distributors and industrial suppliers. The idea is to make them aware of the importance of ethics and transparency in Alpina so that they understand how, in their interactions with the company, they can contribute to sustainability through healthy relationships. Around 60 industrial suppliers from Colombia, Ecuador and Venezuela and around 18 distributors in Ecuador and Venezuela have participated in these training sessions.

The Ethics Hotline is a confidential and anonymous reporting mechanism whereby, initially, our employees can report and/or seek advice about unethical actions or situations that may affect the interests of the organization.

Ethics Hotline

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Ethical Cases Reported by Category

Fuente d le reporteTipoPorcenta je de ca sos

Other inapprop ia te

ac t iv i t ie s

Confl i c t s of interes t

Human resources

Appropr ia t ion of resources and a s set s

Other

CASE

30

9

94

153

PERCENTAGE

56.6%

17.0%17.0%7.5%1 .9%100.0%

Corporate Projects Go to Market Project

To keep ahead of this challenge, in the last months of 2012, we launched the transformational Go To Market Project to improve the practices that Alpina uses to reach the markets of Colombia, Venezuela, Ecuador, the United States and Peru. Its main objective is to create a competitive advantage in the market through tools, processes and methodologies that generate value for consumers, buyers and clients.

In September 2012, we began the project with the Boston Consulting Group (BCG). BCG provided an initialassessment of our capacities in terms of best practices and conducted three pilot studies related to Comprehensive Portfolio Management, our Pricing Model and Distributor Management.

ALPINA IS NOW COMPETING WITH THE LARGEST AND MOST DYNAMIC COMPANIES IN THE WORLD. THERE ARE NEW COMPETITORS, NEW RETAILERS AND NEW FORMATS. CONSUMERS ARE SEEKING NEW OPTIONS.

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Lean Six Sigma Model Operational excellence optimizes the value chain, from relationships with our suppliers to the satisfactory delivery of products to our clients, delivering the best products on time and at the lowest cost and helping the organization to achieve its MEGA. This is based on a business culture of continuous improvement, management principles that create value and practical tools.

Parallel to this, the Go To Market Corporate Management Team was formed to develop skills, capacity and abilities to strengthen commercial and marketing practices in all of Alpina’s regions.

The efforts to improve our Go to Market practices contribute to our strategy, as they enable us to be more innovative, they strengthen our operational excellence, and they ensure our sustainability, but, above all, they bring us closer to our consumers and clients.

C L I E N T

WORLD -CLA S SP ER FORMANCE

CONTINUOUS KA IZEN IMPROVEMENT, GOOD MANUFACTUR ING PRACTICES ,AND LEAN S IX S IGMA

EMPOWERMENT

LEADER S H I P

SUCCE

SSFUL

PROD

UCTS

PLAN

NING A

ND LO

GISTIC

ALEX

ECUT

ION

PROM

PTNE

SS

ZERO

DEFEC

TS,

STAB

LE PR

OCESS

ES

Challenge

Applying principles

Kaizen Attitude

Integration

The basis of Lean Six Sigma is that each process and level of the organization contributes to the objectives. This is achieved by a step-by-step methodology of defining, measuring, analyzing, improving and controlling, and the monitoring of the processes by the paths of excellence, which help us to understand where we are andwhere we are going.

For the model to succeed, it is necessary to have a corporate policy supported by the organization’s senior management in order to lead change and maintain a long-term perspective by developing talent and promoting a culture of continuous improvement.

Pillars of the Lean Six Sigma Model

To develop this capacity, the sales and marketing departments of the Business Units will be provided with tools, methodologies and training on pricing strategies, promotions, interactions with consumers and buyers, and channel management, among others, which will lead to the sustainable and profitable growth of the business. The efforts to improve our Go to Market practices contribute to our strategy, as they enable us to be more innovative, they strengthen our operational excellence, and they ensure our sustainability, but, above all, they bring us closer to our consumers and clients. Through a process of change and transformation, this team will bring Alpina closer to the market and closer to our consumers.

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This program allows us to predict product demand in a given period of time.

This program supports logistics and transportation management.

This program allows us to model and design the network of Alpina’s value chain, supporting decisions to develop the business’s capacity and comprehensive planning.

This program helps to plan production, purchasing and the distribution of the end product to the four regions where we now operate. It also takes into account restrictions on equipment, human resources, suppliers and routes for the entire value chain.

Strategic Technology plan

In 2012, we trained employees from different areas of the company to become green belts2 and black belts3 :

Parallel to this first round of training, 13 company improvement projects were implemented in Logistics, Administrative Efficiency and Manufacturing for Colombia and Ecuador.

Through a series of world-class technological support efforts, the project proposes a comprehensivesolution for the entire value chain with “end-to-end” process optimization, producing a quick, optimizedand efficient model.

We implemented four applications:

2 Green belt: Employee who has completed two weeks of training on the Lean Six Sigma path and who is responsible for applying the tools with the assistance of a Black Belt.3 Black belt: Worker who has completed five weeks of training on Six Sigma statistical tools and Lean tools and who has experience in leading teams for multi-functional improvement processes. Black belts, together with process owners, are in charge of implementing the methodology to make projects successful.

• Black belts: 15• Green belts: 48

DEMANTRA DEMAND MANAGEMENT:

ADVANCED SUPPLY CHAIN PLANNING:

STRATEGIC NETWORK OPTIMIZATION:

ORACLE TRANSPORTATION MANAGEMENT:

• Black belts: 15• Green belts: 48

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Integrated Protection System for Assets and People (SIPAP for its Spanish acronym)Rigorously analyzing the risks in the processes of our value chain and being committed to ensuring they are controlled led us to implement a comprehensive protection management model.

We carry out several activities using this system:

PROTECTION OF FACILITIES: We carry out the control and verification of the company’s specific processes, interacting with the business’s associates and minimizing the risks that could affect our value chain.We designed a loss reduction plan for regional distribution centers (focusing on the control of buckets and containers, liters of raw materials and internal consumption).

SUPPLY CHAIN SECURITY FLEET:We outlined the control and traceability of our transportation fleet, optimizing the operation’s time and resources.

CORPORATE SECURITY RISK ANALYSIS CONTROL CENTER:We established six regional control centers in Colombia, Venezuela and Ecuador to send information in real time about events that affect our value chain in order to carry out the corresponding analyses and make decisions quickly.

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Awards and Recognitions

Financial Stability

Innovation and Product LinePORTAFOLIO (BUSINESS ELITE SURVEY):Alpina was placed first as the company with the highest quality products and was among the top ten in the following categories: most admired Colombian companies, best consumer service, best marketing strategy, best managed company, greatest social contribution and most powerful brand.RADDAR AND VIEWS: A study by RADDAR and Views Colombia ranks Alpina as the most loved brand among Colombian mothers.LA BARRA 2012: Alpina was recognized as the best dairy product brand. Alpina’s La Recetta was also recognized as the most complete distributor of the year.YANHAAS (ADVANCED MARKET RESEARCH): A study carried out for the Colombian National Federation of Shopkeepers (Federación Nacional de Comerciantes en Colombia, FENALCO for its Spanish acronym) ranked Alpina as the company with the second highest satisfaction rating for service among clients (shopkeepers).EFFIE AWARDS: Soka and its agency, Lowe SSP3, received the Bronze Effie in the Non-Alcoholic Beverages category, Fruper and Lowe SSP3 received the Gold Effie in the Promotions category and Bon Yurt Neón Alpina and its agency Leo Burnett received the Gold Effie in the Food category.P&M MAGAZINE: Bon Yurt Neón received the 2012 P&M award for the Best Digital Strategy in Colombia.

WORKFORCE INVESTMENT BOARD– WIB: : The Workforce Investment Board (WIB) of the Genesee,Livingston, Orleans and Wyoming(GLOW) counties (New York), awarded Alpina as the Company of the Year in Genesee County.

EL COLOMBIANO: EL Colombiano, the largest regional daily newspaper in Antioquia (Colombia), recognized Alpina with the El Colombiano Ejemplar Award in the Economy category.

28

Citizenship and Integrity CORPORATE REPUTATION BUSINESS MONITOR (MERCO FOR ITS SPANISH ACRONYM): Alpina was fourth in the ranking of the most responsible companies in Colombia.2012 PORTAFOLIO AWARDS: Alpina was the winner in the Environmental Protection category.BOGOTA CHAMBER OF COMMERCE: Alpina ranked fourth among companies most committed to the creation of shared value.

CORPORATE REPUTATION BUSINESS MONITOR (MERCO FORITS SPANISH ACRONYM): Alpina is the company with the fourth best reputation in Colombia.REPUTATION INSTITUTE: Alpina is the company with the best reputation in Colombia.CIFRAS & CONCEPTOS: Alpina is the thirteenth (13th) most admired company in Colombia.

Reputation

29

It is interesting to look back, especially after all we have achieved. That’s why I like to re-read the pages of the agenda I kept in 2012, while I went from one place to another, having unforgettable experiences together with people committed to sustainably generating ideas and products supported by the confidence and quality that accompany Alpina every time it is mentioned.

As someone who knows Alpina’s work, in these pages, I will record some of my experiences - our experiences, which we have shared as a team. For that reason, they include the words of everyone who has helped to write this story, or rather, this chapter of history we are still writing.

Alpina has not just left its footprints in Colombia, but also in Ecuador and Venezuela and, more recently, in the United States and Peru. We are traveling through all these places, strengthening what has been successful and learning from our mistakes, so that the success we are a part of transcends geographical borders and time to become a legacy.

When reading these lines, I understand how our daily efforts have helped to improve the lives of so many people, who sometimes remain anonymous, but who will benefit from what we do forever.I do not tire of reviewing everything we learned in this part of the journey.

Regards,

A Companion on the Journey to Sustainability

Introduction

A JOURNEY FOR SUSTAINABILITY

30

Alpina’s growth has been built on challenges overcame, experiences lived and lessons learned. Because if there is something that sets us apart today, it is the way we respond to the challenges that the business poses for us. The most difficult moments and, above all, the way we face them, defines and tests us. Now it makes sense to say this, especially when I review the determined way we acted when, thanks to a consumer’s report, we realized that there was a problem with the promotional item that came with our Boggy Premio product. Rarely have we had to deal with this type of situation, but I must say that this event served to confirm that, when these situations do arise, we

confront them quickly, responsibly and efficiently, putting our procedures and our response capacity to the test and mitigating the associated risks. I could see howall levels of the organization, from Alpina’s management to our vendors and distributors, worked togetherto ensure that no unfortunate event occurred.

Nobody is exempt from facing difficult situations. And that is exactly why it is so important that, when theydo arise, we all know that what comes first is our consumers’ wellbeing and their trust in our products and decisions. This is and will continue to be our commitment.

DialogueChallenge 01

Sustainability, an issue for everyone.

WATCH ANIMATION HERE


31

A1. EFFECTIVE MANAGEMENT AND PROTECTION OF OUR REPUTATION

WE AIM TO ESTABLISH STRONG BONDS WITHOUR STAKEHOLDERS BY CREATING SUITABLEPLATFORMS FOR DIALOGUE AND ENGAGEMENT.WE ENCOURAGE TRANSPARENCY, CONSTANT INTERACTION AND MUTUAL COLLABORATION AND WE INCLUDE THEIR EXPECTATIONS IN OUR STRATEGY AND IN THE COMPANY’S DAILYWORK.

Enabling transparent and two-way communication with our stakeholders, working together and finding opportunities for innovation, in order to achieve recognition and be viewed positively.Our Stakeholders

MEDIA

NGOs

GOVERNMENTS

SHAR EHOLDERSCUSTOMERS

CL IENTS

ALPIN I STAS

INVESTORS

COMMUNIT IESSUPPL IERS

D I STR IBUTORS

Challenge 1

Chapter 05THE 7 SUSTAINABILITY

CHALLENGES

32

a. Dialogue Platforms

b. Management of Commitments Arising from Dialogue Platforms

THE RESULTS SOON FOLLOWED: MR. HERMES ANSWERED THE 241 QUESTIONS ASKED BY THE ALPINISTAS.

We developed the Healthy Information Program to strengthen dialogue between Alpinistas and the Company. How can we do it creatively? We created Mr. Hermes, the “healthy information messenger” who is the person in charge of linking Alpinistas’ questions and concerns from the Cundinamarca offices and plants with answers from the company. The results soon followed: Mr. Hermes answered the 241 questionsasked by the Alpinistas.

Our CEO held eight in-person meetings with Alpinistas from across the organization, four open calls and twocorporate forums to have detailed talks on the history, values, culture, strategy and future of Alpina and toacknowledge the contribution of each Alpinista to these actions.

Similarly, the country’s general managers held six Alpina meetings attended by around 600 employeesto discuss the progress of the local operations.

WE LAUNCHED OUR CORPORATE WEBSITE(www.alpina.com), WHICH CONTAINS GENERALAND UP-TO-DATE INFORMATION ABOUT ALPINA, WITH AN AVERAGE OF 15,000 HITS PERMONTH.

We strengthened our network of internal communication facilitators to improve the flow of information at all our offices and plants in the Americas. This network is made up of 62 Alpinistas.

Thanks to this and other efforts, we produced 54 digital newsletters, 6 corporate magazines, 20 video newscasts, 28 local newsletters and 54 updates to

corporate bulletin boards, with the aim of keeping all Alpinistas informed of our progress.

We also created the Dialogue Circle with the State, which is made up of Alpinistas whose responsibilities include permanent dialogue and relationship with government officials in the places where we operate. This community is a great resource as it gives its members the tools to improve the way in which these dialogues are carried out.

Finally, we received 101 requests from media outlets to answer questions. Similarly, Alpina proactively issued59 press releases with relevant information about its operations.

We will continue to open the doors of our two plants in Ecuador to hold dialogue sessions with community leaders, local government officials and the media, from which specific commitments have arisen.

We held 62 institutional meetings with local and national government officials in the five countries where we work. At these meetings, 58 commitments were made on which the organization and the governments can collaborate.

33

c. Global Reputation Index

WE ACHIEVED A GLOBAL REPUTATION INDEX (GRI) OF 862 OUT OF 1,000.

At Alpina, we understand that our reputation is an asset that brings us closer to our stakeholders, allows us to create and maintain trust worthy relationships based on mutual benefit, and helps us become increasingly sustainable. We have decided to strengthen and develop our reputation through the systematic and rigorous management of how we act, interact, and discuss. For this reason, in 2012, we made the decision to carry out Alpina’s first Corporate Reputation Study with our stakeholders, in partnership with the Colombian Centro Nacional de Consultoría and the Spanish Análisis e Investigación, using the methodologies of MERCO, one of the most prominent business reputation monitors in the world. The result of the Reputation Study was a Global Reputation Index (GRI) of 862 out of 1,000 points, demonstrating our organization’s healthy reputation. In addition, the research gives us tools to align our business actions and our dialogue mechanisms with what our surroundings expect from us as a company.

NOTES

34

35

How would Alpina’s founders feel seeing that, 67 years after laying the first stone of this company in Colombia, we laid the first stone of our first production plant in the United States? It has been a challenge to achieve something like this, a journey in an immense country. We have carefully studied and analyzed this market to understand it and to make the most of all the opportunities that it offers us. We know that Alpina’s products and our way of doing things can win the hearts of many U.S. consumers. We humbly understood that we could not repeat the exact same recipe wherever we go. Our success in winning over new regions is partly due to our curious and respectful approach where we do not assume that we know the markets already and to carefully studying the individual needs of each community and its consumers. Expansion is undoubtedly an inspiring and very demanding journey. We are willing to learn and to work as a team with the tenacity that defines us here and everywhere we go.

Daniel Rodríguez, Alpina Foods Shared Services Manager, mentions the importance of “understanding the country’s culture very well” and of “developing a network of local contacts that have the necessary knowledge” to work harmoniously in an unknown territory. In the United States, we have the experience of our Revive Greek yogurt, a product that emerged from a good understanding of our environment and its dynamics: the consumers, the suppliers and even of the government authorities. We have a deep respect for the U.S. culture of immigrants, workers and pioneers, which we are now a part of by providing healthy food to the people who buy our products in this country. We are proud that we can create jobs at our Batavia plant and at milk farms throughout the state of New York. It has been an exciting journey. It excites me to think about how we are building it step by step.

Economic ValueChallenge 02

36

Challenge 02

Taking advantage of opportunities to generate value.

WATCH COMPUTER GRAPHICS HERE


We have had the honor of being visited by people such as Kathleen C. Hochul, congresswoman from the state of New York, who accepted our invitation to attend the inauguration of our plant. As Daniel says: “Combining all the knowledge we have about providing healthy food with local U.S. talent made it possible for us to enter one of the biggest markets in the world.”

This is Alpina and now it is also “Made in USA.”

Capturing the Peruvian market was another challenge that we decided to take on this year. We studied our neighbors for a long time and offered them certain products that we exported from Colombia. This was how we gradually identified opportunities for growth with our consumers. At the right moment, we decided to take a fundamental step in this adventure, creating an alliance with a Peruvian company that allowed us to start producing our products on Incan soil. Thanks to that alliance, we launched Regeneris and Avena Alpina oat smoothie in Peru, two products that are new items for the Peruvian market. With the satisfaction of a job well done and with the reflection on the big challenge we still have ahead, Felipe Cardona, Finance and BusinessDevelopment Manager states: “It has been a triumph to see the acceptance of Alpina’s arrival by stakeholders in Peru.”

And I continue to reflect. The hours of work, our employees’ dedication, our values and our practices are undoubtedly the foundations that have led us to victory in our conquest of the world, which is justbeginning.

37

The results presented in this report correspond to the consolidation of our Business Units and not to thecompany names, except when explicitly stated. The complete audited financial information is attached to this

report and refers to the company names, the structures of which are shown in Chapter 4. Our Organization -Corporate Model.

Evolution of the Business Units’ Gross Corporate Sales in Tons.

20 1 0

312,855TONS

2009

321,407TONS

364,155TONS

413,503TONS

YEAR-ON-YEAR GROWTH 2 . 7% 1 3 . 3% 1 3 . 6%

20 1 220 1 1

a. Consolidated Performance

Challenge 02WE SEEK TO BE A SOURCE OF GROWTH

AND DEVELOPMENT IN THE REGIONS WHERE WE WORK, WHILE GENERATING GREATER VALUE AND STRENGTHENING

OUR WIN-WIN BUSINESS RELATIONSHIPS WITH OUR PARTNERS THROUGHOUT OUR

VALUE CHAIN.

38

Evolution of the Business Units’ gross corporate sales in local currency

Evolution of the Business Units’ gross corporate sales in dollars

Note: The historical assessment of Colombia includes ingredients, that of the United States includes Central America and the Caribbean, and that of Peru includes Bolivia.

C O LOMB I A COP $ M I L L I ON S

VENEZUELA B s F $ THOU S AND S

2 0 1 1 2 0 1 2

ECUADOR U SD THOU S AND S

1 ,377,632 1,546,910

205,108 238,282

UN ITED STATE S U SD THOU S AND S

P E RÚ U SD THOU S AND S

62,29552,890

7,4476,287

530 1,596


TOTAL

2 0 0 92 0 1 02 0 1 12 0 1 2

YEAR -ON - Y E AR GROWTH

6 62 , 1 5 2

1 1 . 4%

1 5 . 2%

1 0 . 0%

COP / U SD A c . 2 00 9B s F / U SD A c . 2 00 9

2 , 1 5 62 . 1 5

COP / U SD A c . 2 0 1 0B s F / U SD A c . 2 0 1 0

1 , 8 9 94 . 30


1 , 8 5 44 . 30


1 , 9 1 44 . 30

Gro s s s a l e s i n t h o u s a nd s o f

U SD

8 5 0 , 4 6 6

935 , 1 1 6

7 3 7 , 9 60

39

Evolution of the Business Units’ gross corporate sales in COP

The Business Units’ EBITDA Percentage Evolution

YEAR-ON-YEAR GROWTHTOTAL

200920 1 020 1 12 0 1 2

1 ,4 27 ,3 7 01 ,4 0 1 , 1 4 91 ,57 6 ,7 631 ,7 8 9 ,4 67

- 1 . 8%12 .5%13.5%

COP/USD Ac. 2009Bs/USD Ac. 2009




2.1562.15

1 ,8994.30

1,8544.30

1,9144.30


Gro s s s a l e s i n m i l l i o n s o f COP

TOTAL

200920 1 020 1 12 0 1 2

1 0.4%9 .8%10.5%9 .3%


%EB ITDA / G ro s s s a l e s

40

Evolution of investments in COP

Evolution of Gross Sales in Colombia (Tons)

200920 1 020 1 12 0 1 2

I N V E STMENT CAPEX / S A L E S

9 1 , 0 8062 , 9 4 94 1 , 3 0 87 9 , 33 9

6 . 4%4 . 5%2 . 6%4 . 4%

mi l l i o n s o f COP

b. Performance in Colombia

Note: The historical assessment of Colombia includes ingredients.

T OTAL

2 0 0 92 0 1 02 0 1 12 0 1 2

YEAR -ON - Y E ARGROWTH

2 7 8 , 6 2 12 9 1 , 9 23330 , 4 4 13 7 4 , 4 60

4 . 8%1 3 . 2%1 3 . 3%

TON S

41

Evolution of Gross Sales in Colombia (Value)

Note: The historical assessment of Colombia includes ingredients.

2 00 920 1 020 1 12 0 1 2

TOTAL YEAR-ON-YEARGROWTH

1 , 1 8 5 , 7 4 81 , 2 3 1 , 4 6 61 , 3 7 7 , 6 321 , 5 4 6 , 9 1 0

3 . 9%1 1 . 9%1 2 . 3%

mi l l i o n s o f COP

It is important to highlight the growth of the Refreshing Drinks (23%), Cheese and Creams (16%) and Milk (15%) product lines.

IN 2012, WE CONTINUED OUR DOUBLE-DIGIT GROWTH WITH RESULTS OF 13.3% IN VOLUME AND 12.3% IN VALUE (WITH A GROWTH OF 13.2% AND 11.9%, RESPECTIVELY, IN 2011). WE CLOSED THE YEAR WITH AN EBITDA MARGIN OF 11.4%

c. Performance in Venezuela200920 1 020 1 12 0 1 2

TOTAL YEAR-ON-YEARGROWTH

1 7 , 5 1 41 1 , 2 0 41 2 , 8 7 51 2 , 3 1 4

- 3 6 . 0%1 4 . 9%- 4 . 4%

TON S

Evolution of Gross Sales in Venezuela (Tons)

42

2009

2010

2011

2012

TOTALYEAR-ON-YEAR

GROWTH

14,293

15,770

17,706

23,091

10.3%

12.3%

30.4%

TON S

Evolution of Gross Sales in Venezuela (Value)

Evolution of Gross Sales in Ecuador (Tons)

THE 2012 RESULTS WERE DUE TO A COMPLEX BUSINESS CONTEXT. In terms of inflation, in 2012, theNational Consumer Price Index recorded a variation of 20.1%, lower than the previous year’s figure (27.6%),largely due to the implementation of the Law of Fair Costs and Prices4. Similarly, in terms of growth, themanufacturing sector (food) slowed down, with a GDP of 2.1% compared to 3.8% in 2011.

There were also poorer results for the Cheeses, Soft Drinks, Desserts and Milk product lines due to productsbeing held up at the border, low demand, absenteeism at our Villa de Cura plant, insufficient supply, andproblems with packaging.

d. Performance in Ecuador

According to the text the regulations and the administration and control mechanisms necessary to maintain price stability and provide access to goods and services for the entire population under equal conditions within a social and economic framework that favors people’s interests over capital.

2009

141 ,871

2010

156,193

10.1%

2011

205,108

31.3%

2012

238,282

16.2%TO

TAL

YEAR

-ON-YE

ARGR

OWTH

thou

sands

of

BsE

In 2012, our sales volume decreased 4.4% and our sales value increased 16.2%.We closed the year with an EBITDA margin of 1 .6%

43

Evolution of Gross Sales in Ecuador (Value)

Evolution of Gross Sales in United States (Tons)

In Ecuador, we must highlight the implementation of industrial productivity, logistics and supply initiatives to benefit from the processes carried out within the Alpina Ecuador value chain and which allowed efficiencies of USD 949,000 to be achieved.

IN 2012, WE ACHIEVED GROWTH OF 30.4% IN VOLUME AND 17.8% IN VALUE. THE EBITDA GREW BY 29%, CLOSING WITH AN EBITDA MARGIN OF 8.7%, COMPARED TO 6.7% IN 2011.

e. Performance in the United States

TOTAL

YEAR-ON-YEAR GROWTH

2 0 1 02009 20 1 220 1 1

41 ,074 47,427 52,890 62,295

15.5% 11 .5% 17.8%t ho u s a nd s o f U SD

Note: The historical assessment of the United States includes Central America and the Caribbean.

2 0 1 0

2,100TONS

2009

2,252TONS

2,875TONS

3,023TONS

YEAR-ON-YEAR GROWTH 7 . 2% 2 7 . 7% 5 . 1%

20 1 220 1 1

44

Evolution of Gross Sales in the United States (Value)

Evolution of Gross Sales in Perú (Tons)

TOTAL

Note: The historical assessment of the United States includes Central America and the Caribbean.

2 00 920 1 020 1 12 0 1 2

YEAR -ON - Y E AR GROWTH

4 , 2 1 34 , 9 5 56 , 2 8 77 , 4 4 7

1 7 . 6%26 . 9%1 8 . 5%

t ho u s a nd s o f U SD

In terms of our products, the oatmeal smoothie was the most prominent, representing 37% of total sales in terms of value, followed by Yogurt with 35% and the Central America and Caribbean range with 12%.In September 2012, the Alpina foods team opened the doors of the new Alpina plant located in Batavia, New York. THIS IS THE TENTH PLANT IN ALPINA’S TOTAL OPERATIONS AND IT WILL PROVIDE DIRECT EMPLOYMENT FOR AROUND 50 PEOPLE. INITIALLY, IT WILL HAVE THE CAPACITY TO PRODUCE AROUND 4,000 TONS OF YOGURT A MONTH.

It has a privileged location, as it is near important milk sources, it has high-quality human resources available, there are nearby educational institutions that are experts in the dairy field, and it is a few hours away from important consumption centers such as the cities of New York and Chicago.

In 2012, we achieved growth of 5.1% in volume and of 18.5% in value.

IN SEPTEMBER 2012, THE ALPINA FOODS TEAMOPENED THE DOORS OF THE NEW ALPINA PLANT LOCATED IN BATAVIA, NEW YORK.

f. Performance in Peru

Note: The historical assessment of Peru includes Bolivia.

2 0 1 0

327TONS

2009

257TONS

258TONS

616TONS

YEAR-ON-YEARGROWTH - 2 1 . 3% 0 . 0% 1 3 9 . 2%

20 1 220 1 1

45

Evolution of Gross Sales in Perú (Value)

As part of our strategic objective to continue growing internationally, in May, with Avena Alpina, and in June, after an in-depth analysis of the Peruvian consumer and market, we moved into Peru with our functional Regeneris project, with production on Incan soil thanks to a joint venture with Andina Alimentos, a local dairy product producer.

TOTALYEAR-ON-YEAR

GROWTH

2 0 1 02009 20 1 220 1 1

814 664 530 1,596-18.5% -20.1% 201. 1%

Note: The historical assessment of Peru includes Bolivia.

U SD M i l e s

In 2012, we achieved growth of 139,2% in volume and 201,1% in value.

IT IS IMPORTANT TO HIGHLIGHT THAT WE HAVE BECOME THE FIRST INTERNATIONAL DAIRYPLAYER TO BREAK INTO THE FUNCTIONALCATEGORY IN PERU WITH THE LAUNCH OF REGENERIS.

46

NOTES

47

AlpinistasI think about the passage of time. And it makes me happy, because I always see a promising future built with effort. We have been formalizing the Collective Pact for more than 30 years, reaching agreements in which all the Alpinistas of Alpina Colombia have participated transparently. Over these decades, we havecapitalized on lessons learned, because if there is something that distinguishes Alpinistas, it is our care, responsibility and commitment to our task. I am part of this and it fills me with satisfaction.

In May, we sat down with an open mind, ready to move forward with the 2012-2015 Collective Pact. We talked, we examined, we evaluated and we negotiated. And we achieved it. Best of all, we can tell our families that they will continue to receive extraordinary benefits and that we are still keeping our promise to generate prosperity for the workers and sustainability for the company.

Also, we finished collective negotiations with two of our trade union organizations and agreements were reached on the Collective Agreements. I proudly see that dialogue and respect were a priority in this process, something that sets us apart and that has enabled us to go far.

Beatriz Cortázar, Alpina’s General and Legal Secretary, was right when she said that “aligning the workers’ expectations with the company’s possibilities is an art. The key is to always be clear that the most important thing is to reach an agreement.” We have been and will continue working on this process, because the pact is part of our lives and the lives of our families. It is also part of Alpina’s past and future. This is our investment in the future.”

The results make Alpina Colombia a pioneering company in these types of processes and an example in terms of the benefits it provides for its workers, always in balance with the company’s sustainability. What more could we ask for?

Challenge 03

Alpina University



48

ALPINISTA

49

2011 DIRECT

TEMPORARYOTHER SERV ICESTOTAL

2012 DIRECT

TEMPORARYOTHER SERV ICESTOTAL

Note: Four project personnel who replaced employees on a project were not included. Due to internal policies, they are not included in the company's headcount. TO

TAL

Colom

bia

Vene

zuela

Ecua

dor

3,9386498425,429

4 ,2333908 12

5 ,435

168001 68

1730 0 1 73

6620 0 662

678 0 0 678

16 1 0 1 7

Unite

d Stat

es

54 0 0 54

Perú

0 000

3 003 6,3

436,2

76

Characterization of Alpinistas

Challenge 03

This challenge had a slight variation. We had proposed being the best place to

work, based on the name of a standard measurement methodology used in the

industry. We are still not the “best” place to work, according to this methodology.

Using our principle of transparency and our awareness of the need to improve, we

changed the word “best” to “good”, so that it challenges us to continue implementing

better and more powerful initiatives.

WE ARE COMMITTED TO BUILDING A MOTIVATING, CHALLENGING AND

PROSPEROUS WORK ENVIRONMENT.

50

Note: Includes only direct and temporary employees

Under 25From 25 to 35From 36 to 45From 46 to 55Over 55

2011

Under 25From 25 to 35From 36 to 45From 46 to 55Over 55

2012

Colom

bia

Vene

zuela

Ecua

dor

Unite

d Stat

es

Perú

5 1 92 ,065 1 , 40254952

5372 ,0 101 ,38562764

259239102

199248104

12736015 12 13

1 1 73591 72264

36611

32610141

00000

02100

Age Groups

51

Co l omb i a

V ene z u e l a

E c u a do r

United States

P e r ú


NUMBER OF WOMENPERCENTAGE OF WOMENNUMBER OF MENPERCENTAGE OF MEN

2 0 1 11 , 048

22 .85%3,53977 . 1 5%

2 0 1 21 , 065

23 .04%3,558

76 .96%

3118 .45%

1378 1 . 55%

3017 .34%

14382 .66%

16 124 .32%

50175 .68%

15723 . 16%

52 176 .84%

2138 .89%

336 1 . 1 1%

847 .06%

952 .94%

00 .00%

3100 .00%

00 .00%

00 .00%





Percentage of Male and Female Alpinistas

52

BETWEEN 0 and 5BETWEEN 6 and 10BETWEEN 1 1 and 15BETWEEN 16 and 20OVER 2 1

C o l omb i a

V ene z u e l a

E c u a do r

United States

P e r ú


2 0 1 1 2 0 1 22,715 / 59.19%246 / 5.36% 619 / 13.49% 834 / 18.18%173 / 3.77%

2,658 / 57.50%320 / 6.92%497 / 10.75%

649 / 14.04%499 / 10.79%

114 / 67.86%43 / 25.60%

5 / 2.98% 6 / 3.57%

112 / 64.74%47 / 27.17%7 / 4.05%

7 / 4.05%

504 / 76.13%115 / 17.37%

40 / 6.04%3 / 0.45%

490 / 72.27%126 / 18.58%58 / 8.55%

4 / 0.59%

16 / 94.12%1 / 5.88%

54 / 100.00%0 / 0.00%

0 / 0.00% 3 / 100.00%

BETWEEN 0 and 5BETWEEN 6 and 10BETWEEN 1 1 and 15BETWEEN 16 and 20

BETWEEN 0 and 5BETWEEN 6 and 10BETWEEN 1 1 and 15BETWEEN 16 and 20

BETWEEN 0 and 5BETWEEN 6 and 10

BETWEEN 0 and 5

Length of Time as an Alpinista

53

Internal and External Turnover

Note: Includes direct personnel in Colombia, Venezuela, Ecuador, the United States and Peru with indefinite contracts.

I NT ERNAL TURNOVER ( 20 12 ) = Promo t i o n s + Tran s fe r s

Ave rage he ad c o un t 20 12

2654 ,80 9

H i re s + R e t i re e sAve rage he ad c o un t 20 12

5894 ,80 9

I NTERNAL TURNOVER ( 20 12 ) =

EXTERNAL TURNOVER ( 20 12 ) =

EXTERNAL TURNOVER ( 20 12 ) =

INTER

NAL

EXTE

RNAL

2 0 1 0 20 1 1 2 0 1 2

4 . 5% 4 . 2% 5 . 5%

1 9 . 0% 23 . 1% 1 2 . 2%

54

COLOMBIA

VENEZUELA

ECUADOR

United States

PERÚ

AGREEMENT TOTAL PERCENTAGE

Not applicableCollective Pact

Collective AgreementTOTAL

3413,671221

4,233

8.1%86.7%5.2%

100.0%

Collective AgreementNot applicable

TOTAL

9776173

56.1%43.9%

100.0%

Not applicable TOTAL

678678

100.0%100.0%

Not applicableTOTAL

5454

100.0%100.0%

Not applicableTOTAL

33

100.0%100.0%

Note: Includes direct employees and project employees directly hired by the company. For Alpinistas not covered by the collective agreements, additional benefits are provided by the company.

Collective Agreements

55

GROWTHVision toward the future

CONTRIBUTIONValue generation

COLLECTIVE PROSPERITYClarity - Transparency - Projection

SATISFACTIONRetention

Intellectual CapitalOrganizaltional Development

Human ResourcesOrganizational Development

ClimateOrganizational Development

CultureOrganizational Development

CompensationOrganization

A1. CONSTANT IMPROVEMENT OF THE WORK CLIMATE

IDENTIFY THE OPPORTUNITIES AND NEEDS IN ORDER TO CREATE A FAVORABLE ENVIRONMENT TO DEVELOP OUR ALPINISTAS AND, IN THIS WAY, IMPLEMENT DIRECT ACTIONS IN RESPONSE.

Dimensions of Organizational Development

a. Human ResourcesWe have a six-dimensional integrated system (work environment, culture, organization, compensation, talent and intellectual capital) that allows us to establish the strategies, tactics and action plans necessary to generate collective prosperity, to increase Alpinistas’ satisfaction and their contribution to the company, and to establish strong foundations for Alpina’s growth through its people.

56

CULTURALMODELBUSINESS STRATEGY PEOPLE STRATEGY

Defines:

Defines the priorities for investing in people:

Defines the tactic:

DIMENSIONS OF ORGANIZATIONAL DEVELOPMENT

MEGA 2017

STRATEGY CORPORATE MODEL STRUCTURE

+

In 2012, we started the process of synchronizing the people strategy with the business strategy to promote the development of the Alpinistas’ behavioral guidelines: Corporate Culture.

WHAT DO WE WANT TO ACHIEVE THROUGH THIS SYSTEM?

CULTURAL DEVELOPMENT

WORK ENVIRONMENT

CULTURE:

To build a good place to work that is attractive, stimulating and prosperous, generating wellbeing for Alpinistas and sustainability for the business.

To consolidate a culture model that integrates the attributes, the strategy and the corporate model, and that is tangible in processes and people, respecting the characteristics of each region where Alpina operates.

To do so, we analyzed our organizational models: Strategic axes, corporate model, model of skills and cultural attributes and the level of comprehension and coordination of each one. What came out of that? We built a critical action path that allows us to develop specific behaviors in Alpinistas that enhance their performanceand growth, as well as ensuring that this behavior benefits the organization’s results.

Cultural Model

57

Great Place to Work Survey – Work environment and Culture

COLOMB I A

V ENEZUELA

ECUADOR

CORPORATE ( 1 )

C L IMATE CULTUREL ab o r

env i ronmen t i n d i c a t o r

Cu l t u ra l a t r i b u t e s i n d i c a t o r

5 6 . 2

4 5 . 0

5 7 . 6

9 1 . 0

7 9 . 6

63 . 3

6 6 . 7

8 6 . 0

No t e ( 1 ) : Pre s i d en cy, V i c e - Pre s i d en cy o f C o rpo ra t e A f f a i r s , V i c e - Pre s i d en cy o f F i n an c e a nd N ew B u s i n e s s D eve lopmen t , V i c e - Pre s i d en cy o f In nova t i o n a nd Ma r k e t i n g , a nd V i c e -

Pre s i d en cy o f S e r v i c e s a nd Prod u c t i v i t y.

S u pp l y Ch a i n Dep a r tmen t

Manu f a c t u r i n g Dep a r tmen t

C L IMATE

L ab o r env i ronmen t

i n d i c a t o r

Mar k e t i n g Dep a r tmen t

N a t i o n a l S a l e s D ep a r tmen t

Ag r i c u l t u r a l S u pp l y Dep a r tmen t

4 4 .755 .76 1 .0

8 5 .4

9 5 .7

COLOMB I A

Ope r a t i o n s

C L IMATE

39 .5

VENEZUELA

I n d u s t r i a l a nd L og i s t i c a l P r od u c t i v i t y D ep a r tmen t

C L IMATE

46 .6

ECUADOR

7 9 .5E c u a do r S a l e s D ep a r tmen t

No t e : The re s u l t s fo r Pe ru a nd t h e U. S . h ave no t b e en re c o rd ed s ep a ra t e ly a s t h ey a re n ew reg i o n s .


i n d i c a t o r


i n d i c a t o r

ALPINA

58

Participation in the GPTW Survey

93.5%

COLOMB I A

V ENEZUELA

ECUADOR

CORPORATE ( 1 )

89 .0%

67 .7%

95 .8%

2 0 1 2

No t e ( 1 ) : Pre s i d en cy, V i c e - Pre s i d en cy o f C o rpo ra t e A f f a i r s , V i c e - Pre s i d en cy o f F i n an c e a nd N ew B u s i n e s s D eve lopmen t ,

V i c e - Pre s i d en cy o f In nova t i o n a nd Ma r k e t i n g , a nd V i c e - Pre s i d en cy o f S e r v i c e s a nd Prod u c t i v i t y.

In September 2012, the fifth survey on the work environment and culture was carried out with the Great Place To Work Institute® to learn about Alpinistas’ perceptions of Alpina as a place to work. An analysis of the information collected revealed that the work climate continues to be a challenge for all Alpinistas.

The results showed progress in areas such as the Corporate Vice-Presidency; in Alpina Ecuador in Commercial Management; and in Alpina Colombia in the Agricultural Supplies Department, the National Sales Department, the Regional Distribution Centers of Cali and Ibagué, the Division of Automobile Maintenance and in the Caloto, Chinchiná, Entrerríos, Facatativá and Popayán plants.

They also showed that Venezuela should be a region of focus, as should Ecuador, particularly in Industrial Management. In Colombia, Logistics Management and the manufacturing area, specifically the Sopó plant, need the greatest amount of work. This is according to the different aspects that both Alpinistas and Alpina must work on and have been working on as a team (including accessibility, coordination, participation, absence of favoritism and workplace comfort) to ensure that this indicator improves alongside the organization’s results.

Building a good place to work continues to be one of our main challenges.

59

DEPA

RTM

ENTS

SUSTAINABILITY

OPERATIONAL EXCELLENCE

HUMAN RESOURCES

INNOVATION

CLIENT /CUSTOMER

Ensure positive impact among multiple stakeholders. Act as good corporate citizens.

Operate at an exceptional level in all of our processes. Seek and develop world-class operating standards.

Have people who are better trained to meet adaptive and technical challenges of the present and the future.

Enhance Alpina's Code of Constant Innovation. Challenge, question, improve, evolve.

Develop a reputation based on our capacity to surprise and lead clients and customers.

PHASE 2: Definition, design and

implementation2013.

UNIVERSIDAD ALPINA

PHASE 1 : Definition, design and

implementation 2012

Alpina University Training Structure

ORGANIZATION:

HUMAN RESOURCES:

COMPENSATION:

INTELLECTUAL CAPITAL:

To consolidate Alpina as a live, dynamic and adaptable system that grows sustainably, in line with the organization’s strategy.

To refine a model to attract, retain and develop talent that generates growth for Alpinistas and the organization, making us leaders in human resource management.

To develop fair and competitive benefits and compensation practices that promote a high-performance culture at Alpina.

To increase the value of intellectual and human capital; to increase the contribution and satisfaction of our Alpinistas through knowledge management and by developing behaviors among Alpinistas and capacities in the organization.

In 2012, we launched and implemented Phase 1 of the Alpina University.

The objective of the Alpina University is to teach and manage knowledge throughout the organization,creating knowledge by Alpina for Alpina, under the following training structure:

60

Human Resources Department

Sustainability Department

Sustainable Leadership

Specific Programs

TOTAL

C O L O M B I A

People Hours

V E N E Z U E L A

People Hours

E C U A D O R

People Hours

U N I T E D S T A T E S

People Hours

30

2,919 19,7182,183

769

41,3562,4367,75071,2605,901

4

118 472163

1

652228201,372286

4

0 0300

2

1,20022810

1,438306

0

46 7880

0

00078846

Number of people trained

Number of training hours

Number of training sessions

74,8586,539

409

Alpina University Training

Senior Management Programs

IN 2012, WE PARTICIPATED

IN THE SENA’S CALL FOR TENDERS

FOR SPECIALIZED CONTINUING

EDUCATION PROGRAMS.

We presented the following 10 training

initiatives:

Strategic evolution of Alpina's current business models based on sustainability.

Structure and alignment of upper management to develop a world-class organization.

Cultural transformation toward Alpina's competitive-ness and productivity.

Development of strategic skills to implement organiza-tional productivity models among human resources to

transform them into a competitive advantage.

Management of Alpina's productive strategic development through its people.

232

lead

ers

trai

ned

BENE F I C I A R I E SC URR I C U LUM

61

SENA Company Programs

Talent development to increase individual levels of contribution and organizational productivity at Alpina.

Human capital as a competitive advantage.

Phase 1: SEPA (Alpina Excellence and Productivity System) implementation - Lean Six Sigma.

Sustainability training on Alpina's global competitiveness.

Change management to implement strategic evolution and organizational transformation models.

Comprehensive employee management to develop competitive advantages by generating human capital at

Alpina.

BENE F I C I A R I E SC URR I C U LUM

1,072

Alp

inis

tas

impa

cted

We have also established an agreement with the SENA (National Training Service) for onlineEnglish courses on the Rosetta Stone platform, with the participation of 348 Alpinistas.

In 2012, we developed initiatives as part of the Strategic Occupational Health Plan that achieved changesin behavior that translate into safer conduct and the reduction of accidents and illnesses. The followinginitiatives and their objectives stand out:

Prevent and reduce the severity and consequences of accidents that may arise, mainly in the productionplants.

b. Occupational Health and WellnessAt Alpina, we want to Generate a Mutual Care culture, were all Alpinistas are responsible for our care and the care of their colleagues, with actions designed to protect life, security and wellbeing.

In Your Hands Accident Prevention and Control Strategy – Your Hands are Part of Me:

62

Report and efficiently ensure that people’s unsafe actions and conditions are corrected to control the risksthat cause accidents and injuries.

Avoid the occurrence of serious and severe accidents caused by the power from machines and equipmentused in the production process.

Reduce the frequency and severity of injuries related to transit accidents by enforcing the responsibility torespect safety regulations.

Reduce cardiovascular risk, excess weight and obesity to improve health, quality of life and life expectancy.

Reduce the occurrence of muscular problems and diseases with an exercise conditioning plan adapted toAlpinistas’ health and the characteristics of their work.

Promote healthy lifestyles and prevent the occurrence of muscular diseases through exercise.

Strengthen the leadership capacity of employees with work restrictions.

Lifesaving Program – Reporting Unsafe Incidents, Actions and Conditions:

Dangerous Power Program:

Program to Prevent Motorbike Accidents:

Cardiovascular Risk Program:

Prevention Schools Program:

Active Breaks Program:

Work Inclusion Program - Key People:

AT ALPINA, WE IMPLEMENT OUR COMPREHENSIVE CORPORATE WELLNESS PLAN IN LINE WITH THE INTERESTS AND NEEDS OF OUR ALPINISTAS IN ORDER

TO IMPROVE THEIR QUALITY OF LIFE, STRENGTHENING THE WORKER, COMPANY AND FAMILY BOND.

63

1 4 . 0 01 2 . 0 01 0 . 008 . 006 . 004 . 002 . 000 . 00

2009 20 10 20 1 1 20 1 2

0.00

10.20

8.30 9.6

5

2.10

8.80 9.2

6

1.70

13.00

7.56

1.05

9.89

C O LOMB I AV ENEZUELAECUADOR

20091 0 . 2 08 . 300 . 00

20 1 09 . 6 58 . 8 02 . 1 0

2 0 1 19 . 2 61 3 . 001 . 7 0

2 0 1 27 . 5 69 . 8 91 . 0 5

Rate of disabling accidents

Cases of Disabling Accidents

COLOMB I AV ENEZUELAECUADOR

2009337220

20 1 035 71 59

2 0 1 13 62221 0

2 0 1 23081 77

4 003503002502001 5 01 00500

2233

7

0

357

15 9

362

22 10

308

17 7

AL

PIN

A

64

Days Missed Due to Accidents

Absenteeism (Days Missed for Medical Reasons)


3 , 5 003 , 0002 , 5 002 , 0001 , 5 001 , 0 005000

2009 20 10 20 1 1 20 1 220092 , 40 9340

0

20 1 02 , 2 6 9

322 7

2 0 1 13 , 332

386 1

2 0 1 22 , 5 7 6

7 270

2,409

2,269

3,332

2,576

340

0 32 27 38 61 72 70

Note: Based on the February 2012 update for SURA Occupational Risk Management, the consolidated data for the 2011 Sustainabil ity Report have been changed.


200920 , 4 5 23 , 7 5 11 , 2 0 2

20 1 023 , 0 4 52 , 30 56 4 8

20 1 13 1 , 2 402 , 30 91 , 0 6 4

20 1 223 , 3 7 83 , 1 0 4324

COLOMB I A V ENEZUELA ECUADOR

3 5 , 00030 , 000

20 , 0001 5 , 0 001 0 , 0005 , 000

0

25 , 000

200920 1 0

20 1 12 0 1 2

20,45

223

,045

31,24

023

,378

3,751

2,305

2,309

3,104

1,202

648 1,064

324

65

Success Story

BUSINESS CASES

In 2012, we introduced this program with one main objective: To develop the skills of leaders and the necessary capacity to establish business models and to propose initiatives based on sustainability and shared value.

Above all, the program achieved an important change in the degree of awareness of the forty selected leadersregarding the importance of seeing the bigger picture when making business decisions. These high-influenceleaders strive to replicate the culture of doing sustainable business throughout the organization by consideringthe generation of greater value in the medium and long term, making intelligent use of natural resources, andgenerating social prosperity at the same time as producing greater financial profits.

As a result of the program, we created eight business cases that will be investigated to analyze the feasibility and impact of their respective implementation.

The methodological process to decide on the business cases meant that our leaders had to open their minds and learn new concepts, make field visits in new conditions, develop whitepapers, analyze the variables of the company and its surroundings, work alongside different stakeholders, and develop new leadership perspectives to drive change.

We defined this process as a way to build strong business cases aligned with Alpina’s need to create sharedvalue and include sustainability in the company’s daily operations.

THE EIGHT BUSINESS CASES ARE:

• FORMATION OF ASSOCIATIONS BY SMALL-SCALE PRODUCERS OF GUACHUCAL (COLOMBIA).• COLLABORATIVE COMMERCIALIZATION CHANNELS.• WASTE WITH VALUE.• STUDY OF ALPINA VENEZUELA MILK SUPPLY SOURCES.• MILK SUPPLY AT ALPINA COLOMBIA.• PARTNERSHIP FOR MILK SUPPLY IN THE CARCHI PROVINCE.• FRESH CHEESE ALLIANCE IN CAQUETA (COLOMBIA).• ENVIRONMENTALLY FRIENDLY STRAWBERRY AND BLACKBERRY FARMING CLUSTER.

66

A2. DEVELOPMENT OF KEY TALENT

TO HAVE A CORPORATE TALENT SYSTEM SO THAT ALPINISTAS WITH POTENTIAL CAN BE IDENTIFIED AND TRAINED AS SUCCESORS FOR CRITICAL POSITIONS AND SUPPORTED BY HUMAN CAPITAL FOR GROWTH.

NOTES

Starting in 2013, we will implement a strategy for the organization’s critical positions to be filled by key talent. Alpinistas who have the highest level of knowledge, skills and performance will occupy these positions.

67

We often forget that we are part of something bigger than ourselves. That, like other living creatures, we are part of a system. When some years ago, we started to talk about caring for the environment and the appropriate management of natural resources, we were just becoming aware of what this meant. As time went by, we started to understand what it really means and how to turn it from theory into practice.

At Alpina, we do not speak in abstract terms when it comes to taking care of the environment. We are very clear about the three priorities that every Alpinista must take into account. The first is that we should use water responsibly. We can make the most impact by reducing our operations’ consumption and encouraging the responsible use of water among our milk suppliers. The second is to work to reduce greenhouse gases, which increase the world’s temperature and affect many of its species and ecosystems. That is why we are seekingmore environmentally friendly and clean energy options. Finally, we work to reduce the waste produced at our plants and by our packaging, which must use less material and be more environmentally friendly.

Our commitment is to help to conserve the environment throughout the value chain. This dream, which seemed

difficult to achieve a few years ago, we now see as more and more possible, through the simple principle of doing more with less. Everything depends on our capacity for innovation and creativity. An example of this was the experience we had with the Phoenix Group and the proposal we made to reuse the boxes in which the plastic cups for many of our products come packed. We formed a team to take care of the material, finding the workforce in a vulnerable, disadvantaged population that we trained and assisted throughout the process of creating their company. It’s incredible! Now there are two recycling companies, one in Bogotá and another in Medellín, with 15 families benefiting from this initiative. This experience has meant good savings and important environmental benefits for us. In fact, this is a great example of how to make the best possible use of natural resources, obtaining productivity beyond financial profit.

EnvironmentChallenge 04

The Water Cycle

WATCH VIDEO HERE


68

69

Challenge 04

WE UNDERSTAND THAT GROWTH MUST BE ACCOMPANIED BY THE EFFICIENT

AND SUSTAINABLE USE OF RESOURCES IN OUR OPERATIONS AND IN THOSE OF OUR

PARTNERS IN THE VALUE CHAIN.

9 ,0008,0007 ,0006 ,0005 ,0004 ,0003,0002 ,0001 ,0 00

-

4 50,000400,000350,000300,000250,000200,0001 5 0,000100,00050,000

-

1 , 2 4 93 13

1 ,4 7 1

7 ,9 6 9

1 ,626

TOTAL2008

TOTAL20 1 0

TOTAL2009

TOTAL20 1 1

TOTAL20 1 2

ENV I RONMENTAL I N V E STMENT S ( I N COP )P RODUCT I ON ( t )

(COP

MM)

PROD

UCTI

ON (t

)

Investment in Environment Projects

A1. EFFICIENT WATER MANAGEMENTWork to reduce the consumption of water resources in our operations and in our value chain, as well as ensure the quality of the water that is returned to tributaries.

WE ARE CONTINUING TO MEASURE ALPINA COLOMBIA’S WATER FOOTPRINT WITH THE SUPPORTOF QUANTIS INC, AN INTERNATIONAL CONSULTING GROUP, TO QUANTIFY THE ENVIRONMENTALIMPACT RELATED TO WATER USE THROUGHOUT THE VALUE CHAIN. We are using a Water Cycle Analysis approach, including surveys and estimations of water management among agro industrial and industrial suppliers, our own operations and our own and outsourced logistics distribution chain. The detailed report of the survey will be submitted in September 2013.

70

THIS EFFICIENT WATER MANAGEMENT WAS FOCUSED ON THE FOLLOWING PLANTS:• SAN GABRIEL PLANT (ECUADOR): We collected information and established actions for efficient water use, which range from the standardization of washing times to installing water recovery tanks for rinsing.

• SOPó PLANT (COLOMBIA): We proposed new standard cleaning times with modern hygiene and disinfecting products, as well as the implementation of guidelines to use water resources efficiently.

• CHINCHINá PLANT (COLOMBIA): We contracted modernization services for the wastewater treatment plant that is currently in design process.

• VILLA DE CURA PLANT (VENEZUELA): We are in the process of starting the upgrade of the wastewater treatment system.

4 50,000400,000350,000300,000250,000200,0001 5 0,000100,00050,000

0

9 .008.007 .006 .005 .004 .003.002 .001 .0 00.00

TOTAL20 1 2

TOTAL20 1 1

TOTAL20 1 0

TOTAL2009

TOTAL2008

7 . 2 4

5 .7 45 .9 8

5 .5 4 5 .4 2

PRODUCT I ON ( t )

PROD

UCTI

ON (t

)

TOTA

L WA

TER

ECO-

INDEX

(m /

t)

TOTAL WATER ECO - I NDEX (m / t )3

No t e : Th i s i n c l u d e s A l p i n a p l a n t s i n C o lomb i a , Venez u e l a a nd Ec u a do r, t h e S im i j a c a a nd G u a ch u c a l c o l l e c t i o n c en t e r s , reg i o n a l d i s t r i b u t i o n c en t e r s ,

p r ima ry log i s t i c s , a nd t h e S opó Co rpo ra t e B u i l d i n g .

3

Eco-index of Water Used in Our Operations

We also made some recommendations for improvements in infrastructure and equipment required for optimization, including tanks, flow meters, in line meters, pumps and dispensers, and the evaluation of new physical and chemical technologies for washing processes.

71

Water Collected in Our Operations

Wastewater

4 50,000400,000350,000300,000250,000200,0001 5 0,000100,00050,000

0

3,000,000

2 ,5 00,000

2 ,000,000

1 ,5 00,000

1 ,0 00,000

500,000

0TOTAL20 1 2

TOTAL20 1 1

TOTAL20 1 0

TOTAL2009

TOTAL2008

2 ,384 ,80 6

1 , 863,584 2 ,026 , 1 27 2 ,0 9 5 ,68 82 ,300,7 4 5

PRODUCT I ON ( t )A l p i n a wa t e r c on s ump t i o n ( i n d u s t r i a l a nd ag en c i e s )


p r ima ry log i s t i c s , a nd t h e S opó Co rpo ra t e B u i l d i n g .

Wate

r con

sumpt

ion (m

)

PROD

UCTI

ONt)

(m )3

3

PRODUCT I ON ( t )R emoved COD lo a d (% )

No t e : Th i s i n c l u d e s A l p i n a p l a n t s i n C o lomb i a , Venez u e l a a nd Ec u a do r, t h e S im i j a c a a nd G u a ch u c a l c o l l e c t i o n c en t e r s a nd t h e S opó Co rpo ra t e B u i l d i n g .

4 5 0,000400,000350,000300,000250,000200,0001 5 0,000100,00050,000

0

9 9 .0%98.0%9 7 .0%96 .0%95 .0%94 .0%93.0%92 .0%9 1 .0%90.0%

Remo

ved

COD

load

(%)

PROD

UCTI

ON (t

)

TOTAL20 1 2

TOTAL20 1 1

TOTAL20 1 0

TOTAL2009

TOTAL2008

9 5 .0%

96 ,6% 96 ,4%9 7 .7%

9 7 .9%

72

A2. EFFICIENT MANAGEMENT OF ENERGY AND CLIMATE CHANGE.

Find alternatives to optimize energy consumption and mitigate greenhouse gas emissions in the organization, with the goal of establishing good practices that can be replicated in other links of the value chain.

a. EnergyIN JULY 2012, WE STARTED TO USE BIOGAS GENERATED FROM THE WASTEWATER TREATMENT PLANT AT THE SOPÓ PLANT (CUNDINAMARCA, COLOMBIA), REPLACING MONTHLY CONSUMPTION OF APPROXIMATELY 6,000 GALLONS OF DIESEL FUEL. This is how we are partially using this renewably sourced fuel, which meant a reduction of about 2% in the Carbon Footprint of Alpina Colombia’s operations.

We considered and assessed efficient lighting alternatives and we came to the conclusion that induction lighting is best suited to our needs in terms of the cost: benefit ratio. Therefore, we will initially use this type of lighting at the Sopó (Cundinamarca, Colombia) national distribution center (“Cendis”).

No t e : Th i s i n c l u d e s A l p i n a p l a n t s i n C o lomb i a , Venez u e l a a nd Ec u a do r, t h e S im i j a c a a nd G u a ch u c a l c o l l e c t i o n c en t e r s , reg i o n a l d i s t r i b u t i o n c en t e r s , p r ima ry log i s t i c s ,

m i l k ma r k e t i n g , a nd t h e S opó Co rpo ra t e B u i l d i n g .

4 5%40%35%30%25%20%15%10%5%0%

NATURAL GA S(G J )

E L ECTR I C I T Y(G J )

H E AVY CRUDEO I L n o . 6 ( G J )

D I E S E L ( G J ) P ROPANE GA S(G J )

GA SOL I N E(G J )

0% 0%

7%5%

4 1%36%

20%23%

38%

29%

0% 0%

20 1 1 20 1 2

PERC

ENTA

GE O

F USE

IN O

PERA

TION

S

Types of Industrially Consumed Energy

73


p r ima ry log i s t i c s , m i l k ma r k e t i n g , a nd t h e S opó Co rpo ra t e B u i l d i n g .

E CO - I NDEX O F TOTAL CON S UMED ENERGY ( E L ECTR I C I T Y AND F U E L ) P RODUCT I ON ( t )

4 50,000400,000350,000300,000250,000200,0001 5 0,000100,00050,000

TOTAL2008

TOTAL20 1 0

TOTAL2009

TOTAL20 1 1

TOTAL20 1 2

3.5 0

3.00

2 .5 0

2 .00

1 .5 0

1 .0 0

0.5 0

0.00

2 .3 4

3.0 5 3. 1 0 2 .86 2 .9 7

ECO-

INDEX

OF T

OTAL

CON

SUME

D EN

ERGY

(GJ/t

)

PROD

UCTI

ON(t)

Eco-index of Energy Consumption in our Operations


p r ima ry log i s t i c s , m i l k ma r k e t i n g , a nd t h e S opó Co rpo ra t e B u i l d i n g .

1 , 200,000

1 ,0 00,000

800,000

600,000

400,000

200,000

0TOTAL2008

TOTAL20 1 0

TOTAL2009

TOTAL20 1 1

TOTAL20 1 2

4 50,000400,000350,000300,000250,000200,0001 5 0,000100,00050,000

ALPIN

A EL

ECTR

ICAL

ENER

GY C

ONSU

MPTI

ONOP

ERAT

ION (G

J)

PROD

UCTI

ON (t

)

A L P I N A E L ECTR I C A L ENERGY CON S UMPT I ONOPERAT I ON S ( i n d u s t r i a l , ag en c i e s ) ( G J ) P RODUCT I ON ( t )

A L P I N A F U E L CON S UMPT I ONOPERAT I ON S ( i n d u s t r i a l , ag en c i e s ) ( G J )

214,79

4

685,5

18

199,65

9

791,78

9

218,21

7

831,90

7

244,4

99

1,005

,936

255,7

80

836,7

04Energy Consumption in our Operations

74

b. Climate ChangeWe identified the risks related to corporate legal environmental requirements, establishing the inventory of controls to mitigate them.

Once we identified them, we started a project to adapt the chimneys for the boilers at the Entrerríos (Antioquia, Colombia) and Chinchiná (Caldas, Colombia) plants to meet Colombian regulations regarding the environmental aspect of gas emissions from fixed sources, which we hope to complete in February 2013.

We are modernizing the industrial refrigeration systems of the Guachucal milk collection center to eliminate the use of coolants that can deplete the ozone layer.

In September 2012, we changed the fuel in the boilers at the Entrerríos plant from propane gas to natural gas. This conversion to natural gas was the second biggest in Colombia’s industrial sector.

We are developing a project to optimize the occupancy of Alpina Colombia’s primary fleet and reduce the number of journeys from the national distribution center in Sopó to the different regional distribution centers located in the main cities of the country, in order to reduce greenhouse gases by reducing the use of diesel fuel.

Total Emissions of Alpina Colombia

E L ECTR I C I T Y F U E LCOOLANT S WA STEWATER TOTAL0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000TON S CO eq2

2008200920 1 020 1 12 0 1 2

6 ,5985 ,0894 ,0 9 13,84 61 , 8 8 5

6 ,0008,8277 ,4 508, 2 849 ,67 6

23, 1392 1 ,9 5820,93222 , 2 8218 ,084

39 ,4 9 73 7 ,8 8 54 1 ,6 1 1

4 4 ,6 134 5 ,73 4

7 5 , 2 3 473 , 7 5 97 4 , 0 8 47 9 , 0 2 57 5 , 3 7 9

COOL

ANTS

ELEC

TRICI

TY

WAST

EWAT

ER

FUEL

TOTAL

Th i s i n c l u d e s A l p i n a p l a n t s i n C o l omb i a , V ene z u e l a a nd E c u a do r , t h e S im i j a c a a nd G u a ch u c a l c o l l e c t i o n c en t e r s a nd p r ima ry a nd s e c ond a ry l o g i s t i c s .

I t i s impo r t a n t t o n o t e t h a t t h e r e wa s a n e r r o r i n p r e v i o u s s u s t a i n a b i l i t y r epo r t s r e g a r d i n g g r e enhou s e g a s em i s s i o n s . T o t a l e q u i v a l e n t CO ² em i s s i o n s i n t o n s c h anged f r om 7 8 , 8 5 9 t o 7 5 , 2 3 4 f o r 2008 , f r om 7 5 , 336 t o 7 3 , 7 5 9 f o r 200 9 , a nd f r om 7 7 , 4 8 6 t o 7 4 , 0 8 2 f o r 20 1 0 . Th i s i n a c c u r a c y h a s b e en c o r r e c t e d i n t h i s r epo r t .

The e s t ima t ed r ed u c t i o n i n t h e c a r b on f o o t p r i n t a s s o c i a t e d w i t h Ph a s e 1 o f t h e B i o g a s P r o j e c t a t o u r S opó p l a n t i s b a s e d on t h e a v e r a ge r ep l a c emen t o f d i e s e l f u e l e n e r gy c on s ump t i o n f o l l ow i ng t h e s t a r t - u p o f b i o g a s b o i l e r ope r a t i o n s . Me t e r s a r e b e i n g i n s t a l l e d on t h e b i o g a s g ene r a t i o n a nd

c on s ump t i o n l i n e s ; we hope t h a t t h e s e w i l l p r od u c e r e a l d a t a f o r 20 1 3 a nd s u b s eq u en t y e a r s .

Graph Note:

75

In 2012, we changed the packaging materials for our fermented product lines. We will replace the YogurtOriginal and Regeneris plastic cup made from polypropylene or polystyrene with a cardboard cover, witha new cup made solely from polystyrene with offset printing and without a cardboard cover.

This change helps to create a new use for our packaging in the recycling chain, as it consolidates materialsand eliminates the use of cardboard and glue. THIS INICIATIVE GENERATED SAVINGS OF COP 1.66BILLION AND A REDUCTION OF 155 TONS IN THE USE OF CARDBOARD.

In collaboration with Carvajal Empaques, we developed a promotion for our leading product, BonYurt,using a paper label made from pulp called Earth Pact. This type of paper is produced from 100% sugar canefiber, is completely free from bleaching chemicals and has a very special color given by the sugar cane pulp.

A3. EFFICIENT MANAGEMENT OF MATERIALS AND WASTEIdentify materials that can be reused at the end of products life cycles, aiming to produce less waste in industrial processes and, if possible, use this waste in by-products.

PROD

UCTI

ON (t

)

P R ODUCT I ON ( t )

ECO - I NDEX O F TOTAL GENERATED WA STE ( k g / t )

E CO - I NDEX O F TOTAL R ECYCLABLE WA STE( k g / t )

5 0.004 5 .0040.0035 .0030.0025 .0020.001 5 .0 0

5 .000,00

10.00

4 50,000400,000350,000300,000250,000200,0001 5 0,000100,00050,000

0TOTAL20 1 2TOTAL20 1 1TOTAL20 1 0TOTAL2009TOTAL2008

19.93

16.49 22

.26

19.62 21.

34

19.00

36.22

34.94

28.23

26.89

ECO-

INDEX

OF T

OTAL

GEN

ERAT

ED W

ASTE

(kg

/ t)

N o t e : Th i s i n c l u d e s A l p i n a p l a n t s i n C o lomb i a , Venez u e l a a nd Ec u a do r, t h e S im i j a c a a nd G u a ch u c a l c o l l e c t i o n c en t e r s , a nd t h e S opó Co rpo ra t e B u i l d i n g . Fo r 20 12 , i n fo rma t i o n ab o u t re c yc l ab l e wa s t e p ro c e s s ed a t t h e reg i o n a l d i s t r i b u t i o n c en t e r s h a s b e en i n c l u d ed .

Eco-Index of Waste

76

Waste Management

PRODUCT I ON ( t )

TOTAL GENERATED WA STE ( k g )

TOTAL R ECYCLABLEWA STE ( k g )

4 5 0,000400,000350,000300,000250,000200,0001 5 0,000100,00050,000

0

1 4 ,000,000

12 ,000,000

10,000,000

8,000,000

6 ,000,000

4 ,000,000

2 ,000,000

0TOTAL20 1 2TOTAL20 1 1TOTAL20 1 0TOTAL2009TOTAL2008

6,565

,212

5,432

,192

7,226

,807

6,370

,097

7,235

,404

6,443

,284

13,70

4,546

13,218

,447

11,981,

531

11,415,

523

PROD

UCTI

ON (t

)

WAST

E (kg

)

N o t e : Th i s i n c l u d e s A l p i n a p l a n t s i n C o lomb i a , Venez u e l a a nd Ec u a do r, t h e S im i j a c a a nd G u a ch u c a l c o l l e c t i o n c en t e r s , reg i o n a l d i s t r i b u t i o n c en t e r s i n C o lomb i a a nd t h e S opó Co rpo ra t e B u i l d i n g .

At the San Gabriel plant, we implemented a waste management program with the community of Salinas.Locals receive around 3,000 kg of sludge daily from the plant. Through a process of coagulation, dehydration,drying and composting, the final product is later distributed evenly among the community members to beused as fertilizer on their crops. THIS STRENGTHENS OUR COMMITMENT TO FOSTERING STRONG,COOPERATIVE RELATIONSHIPS IN THE COMMUNITIES SURROUNDING OUR OPERATIONS.

NOTES

Success Story

77

Provide healthy food! Whenever I think of Alpina’s Higher Purpose, I remember that what we do is a very important part of people’s lives. We serve our consumers from when they are children to when they are adults and they have their own children, contributing to their wellbeing, enjoyment and health though our products. This year, we launched 51 products in all the regions where we operate, including new products as well as other, familiar ones that we brought to the market with a fresh purpose. A large part of our challenge to constantly innovate in everything we do, not just in our products, but also in our processes, business models and distribution, because everyone at Alpina works for consumer satisfaction. That is why we research our consumers: to understand what they need, to be able to anticipate their needs and to focus efforts on development and offering a range of products and solutions that meets those expectations. It is our raison d’être. Research is intelligent and precise work, but above all, it involves producing solutions to surprise our consumers. We achieved something that makes us strong and committed: Our consumers and clients trust that we deliver products that keep our promise to maintain quality above all else and to provide healthy food for the world. I think that providing healthy food for the majority of the population is not a distant dream but a reality. Children, young people, adults and seniors have put their trust in Alpina and this means we have to be more demanding and improve every day. Innovation and nutrition are always a critical part of this dream.

NutritionChallenge 5

Alpilac, a product for the majority



78

Colombia:

79

Ecuador:

Venezuela

80

Perú:

United States:

81

Challenge 5 WE DELIVER ALPINA PRODUCTS TO MORE

CONSUMERS AT MORE TIMES, IN MORE PLACES AND WITH GREATER FREQUENCY TO HELP MAKE HEALTHY NUTRITION AN

EVERYDAY HABIT IN OUR COUNTRIES.

IN THE COUNTRIES WHERE WE OPERATE, ALPINA IS WELL KNOWN AMONG CONSUMERS AS BEING ONE OF THE BEST FOOD BRANDS. We have remained a favorite by providing trustworthy, excellent-quality products and we have managed to make our products nutritional and healthy as well as delicious and fun.

In recent years, the company created new products that help to improve the health and nutrition of our consumers. For that reason, we have developed a range of functional products that, when combined with healthy lifestyle habits, are designed to improve people’s physical condition.

Similarly, as we are aware of the importance of reinforcing our products’ nutritional value, WE HAVE ENRICHED AND FORTIFIED PART OF OUR PORTFOLIO, ADDING ESSENTIAL NUTRIENTS SUCH AS VITAMINS AND MINERALS THAT ARE PARTICULARLY IMPORTANT FOR POPULATION GROUPS SUCH AS CHILDREN IN THE DEVELOPMENTAL STAGE.

A1. ENSURING THE GREATEST FUNCTIONAL AND NUTRITIONAL VALUE OF THE PRODUCT RANGE AS POSSIBLE

FIBER

COLOMBIA

VENEUELA

ECUADOR

UNITED STATES

VITAMINS AND MINERALS

10.8%

9.5%

27.4%

53.1%

24.9%

26.6%

19.7%

8.4%

Products with preservatives or higher fiber, vitamin or mineral

content vs. total sales

82

Alpina recognizes that nutrition needs to be adjusted according to the different stages of life and specific needs of human beings. For that reason, it has extended its product development so that it can provide nutritionalvalue for different age groups (product lines for babies, women, children, preadolescents, adolescents, youngadults and adults), with recipes designed for each group.

With the fundamental objective of producing more relevant and accessible value propositions for thepopulation at the bottom of the pyramid, in 2012, we strove to get closer to consumers from this segment andget to know them better.

We developed three projects throughout the year, which aimed to:

a. Development of Products According to Consumers Stage of Life.

b. Studies to Learn about Our Consumers

A2. DEVELOPMENT OF PRODUCTS FOR SPECIFIC CONSUMPTION TIMES AND SEGMENTS

Generate an in-depth understanding of the habits, needs and tastes of consumers at the base of the socioeconomic pyramid, in terms of their daily diet. We carried out 22 shadowing activities, observations and interviews in the real environment of mothers and housewives with children under 10 years of age, as well as of young people and adults between 18 and 35 years of age, from socioeconomic levels 2 and 3 of Bogotá, Barranquilla and Ibagué. We also sought the opinion of 11 shopkeepers from these same cities and from the same socioeconomic level (SEL).

Through another project, we sought to understand consumption and buying habits, as well as perceptions about the world of milk and its products, through home immersions with a sample of our product and group discussions with housewives from SELs 2 and 3 in Bogotá.

Finally, we validated some of our new innovations through product trials in order to bring the market high-quality options that satisfy consumers’ needs, but that are also within their reach. To achieve this, we conducted 341 interviews with men and women over the age of 18 from SELs 2 and 3 in Bogotá and Medellín.

83

Aware that a large part of our operations are in developing countries, where there are widespread conditions ofinequality and there is limited access to affordable products that satisfy the basic nutritional needs of themost disadvantaged population, Alpina has posed the objective of improving access to healthy nutrition for thepopulation at the bottom of the pyramid.

Traditionally, the industry has neglected this part of the population or product ranges did not meet the nutritional requirements of their situation. In recent years, we have become aware not just of their importance for the business, but also of the responsibility we have as a company to help to improve these communities’ living conditions. Nutrition is a critical factor for ensuring that these vulnerable populations have a better future and greater access to all opportunities.

c. Development of Products for the Base of the Socioeconomic Pyramid

In recent years, we have become aware not just of their importance for the business, but also of the responsibility we have as a company to help improve these communities’ living conditions and nutrition.

We have developed the following products in Colombia and Ecuador to meet our commitment of providing healthy food for the largest number of consumers possible:

COLOMBIA:• In the Cheeses and Creams product line, we launched AlpiCrema on the market, a high-nutritional-value fresh cheese.

• Alpilac , a milk-based drink, was launched in April, in 900 ml and 450 ml bags, achieving sales of 400 tons in that period.

• Alpifrut, a refreshing drink made from orange juice concentrate with zinc, vitamin B12, vitamin C and folic acid, was launched in August, achieving average monthly sales of more than 600 tons.

ECUADOR:• We launched UHT milk in 1 liter bags on the Ecuadorian market, which has allowed us to increase our consumer base with a very competitively priced product. The product currently has a sales volume of 400 tons a month.

5 Not 100% milk.

5

84

d. Development of Products According The Consumption TimeThe dizzying global trend towards urbanization has brought with it changes in travel within cities, less free timeand greater physical inactivity. All this has influenced changes in consumers’ eating habits, as they seek healthy and nutritional options that they can consume while they are on the move or between activities. Aware of that, ALPINA HAS DEVELOPED HEALTHY SNACKS AND SALES CHANNELS THAT ALLOW PEOPLE TO EAT HEALTHIER PRODUCTS WHILE THEY ARE “ON THE MOVE”.

A3. ENSURING QUALITY FROM SUPPLY TO COMMERCIALIZATION

Guarantee quality throughout the product´s life cycle and therefore strengthen our consumers’ trust.

2009 20 1 0 20 1 1 2 0 1 2

1 00 . 090 . 080 . 070 . 060 . 050 . 040 . 030 . 020 . 01 0 . 00 . 0

9 7 . 8%% 9 7 . 8% 9 7 . 7% 98 . 0%

Meeting Quality Specifications

85

a. Strategic Alliances

b. Regulations

IN FEBRUARY 2012, AT THE ANNUAL CONFERENCE OF THE GLOBAL FOOD SAFETY INITIATIVE (GFSI), WE PROPOSED TO THE COLOMBIAN PARTICIPANTS THE CREATION OF A TASK FORCE TO UNIVERSALLY APPLY THE SAFETY MANAGEMENT SYSTEMS RECOGNIZED BY GFSI.In May, with the support of the Colombian Association of Food Science and Technology (ACTA for its Spanishacronym), we formed this team with different interested sectors, such as the food industry, large retailers, suppliers of technical services, academia, and scientific and professional associations. The objectives are to help understand the GFSI guidance document, to provide a national platform for exchanging knowledge and experience on the issue and to present and promote the safety management systems recognized by GFSI.

As part of the project to implement the ISO 22000 standard at the Entrerríos plant, we started the cross-cuttingelements regarding management and the first elements specifically related to operational controls (Analysis ofDangers to Safety, Prerequisite Programs, etc.). The project is 47% complete and our goal is to finish it by August 2013. IN 2012, THROUGH THE INDUSTRY TASK FORCE, WE PARTICIPATED IN THE NATIONAL STANDARD OF THE COLOMBIAN MINISTRY OF HEALTH AND SOCIAL PROTECTION’S STRATEGY TO REDUCE SALT/SODIUM IN FOOD PRODUCTS. WE REVIEWED THE PRODUCTS WITH THE HIGHEST SODIUM CONTENT TO DETERMINE THE OPTIMAL AMOUNT TO BE USED.

2009 20 1 0 20 1 1 2 0 1 2

0 . 0 50

0 . 0 40

0 . 030

0 . 0 20

0 . 0 1 0

0 . 000

CLA IM S /TON S P RODUCED

0 . 03 8

0 . 0 4 7

0 . 03 50 . 030

Quality-Claims

86

Alpinette and YogoYogo Label We worked on our Alpinette and YogoYogo products to more clearly specify the natural fruit sweetener used on our label, meeting the requirement of Colombia’s National Institute of Food and Drug Monitoring (INVIMA in its Spanish acronym), during the audit of the label at the Entrerríos and Sopó plants.

We corrected the Alpinette packaging and made the request to INVIMA for new labels, which was approved. With YogoYogo, we adjusted the product’s health registration and the packaging.

Food products comprise elements that are not harmful in themselves, such as fats, sugars and salts. However, the more rushed and sedentary nature of modern life, as well as changes in eating habits, mean that obesity and excess weight are becoming global public health problems. Although our range is one of the healthy options consumers now have, at Alpina, we want to contribute to the global aim of improving our consumers’ health through their diet. For that reason, we have started to work with the support of local authorities on plans to reduce the sugar, fat and sodium content of some of our products. Our Challenge? To reduce these components without altering the flavor, quality and pleasure offered by these products. Initial assessments were carried out in 2012. In 2013, analyses and tests will be started with some selectproducts.

A4. REDUCTION OF SUGAR, FAT, SODIUM AND CARBODHYDRATES IN KEY PRODUCTS

COLOMB I A

V ENEZUELA

ECUADOR

UN ITED STATE S

F AT SUGAR ADDED

3 1 . 7%

25 . 6%

5 . 1%

1 1 . 4%

7 . 5%

1 4 . 3%

1 . 9%

7 . 2%

NOTES

Products Lower in Fat and Added Sugar vs. Total Sales

87

When I see how much we have grown over the years, I know that we have not done it alone. In this journey, we have found allies in all the people we have worked with. The search for partners to help build this dream never ends. We have been daring when trying out new channels and incorporating small distributors into our business, such as the Home Channel in Alpina Colombia that seeks to expand our distribution system while generating opportunities for vulnerable populations.With the micro-distribution of our products, working women have found an option to generate additional income and give their families greater quality of life. We have carried out training sessions with them so that they are familiar with our products and develop sales and distribution skills. As they themselves are from lower-income backgrounds, they know the neighborhoods and the residents where they distribute. Precisely because of this experience and their relationships, they can achieve more effective distribution than we would without their help. These women respect the Alpina brand and believe in it, which allows them to carry out their work with pride and passion. We started the pilot program with 25 housewives and, in a blink of an eye, there were 40. They won and Alpina won. As Óscar González, National Manager of the Independent Sales

Channel says: “There is an enormous opportunity to explore new sales routes to reach the market and we must make the most of it.”

We continue to keep our promise to reach our consumers at the bottom of the pyramid, strengthening our small distributors. Although this initiative is still a pilot program, the challenge is to make it a channel that operates across all of our regions, wherever there are people who want to consume affordable Alpina products. We eagerly seek to be a prosperous business that grows and creates added value. We know that this energy creates greater prosperity and allows our allies to grow alongside us. Healthy business encourages us to share the dynamics of development throughout our value chain.

I think each one of us is part of a chain, like the threads of a fabric that have been woven together over time.

Sustainable BusinessesChallenge 6

Our industrial suppliers

WATCH VIDEO HERE


88

I AM PART OF SUSTAINABILITY

89

OUR GOAL IS TO DEVELOP OUR STRATEGIC PARTNERS, VIA TECHNICAL ASSISTANCE, BETTER PRACTICES AND NEGOCIATION, CONDITIONS, AND ANYTHING ELSE THAT MAKES THEIR BUSINESSES STRONGER.

Challenge 6

A1. STRENGTHENING THE BUSINESSES OF OUR AGRICULTURAL SUPPLIERSTrain and strengthen our suppliers in all of their processes, using a model that facilitates their growth alongside Alpina.

VAR I AT I ON 2 0 1 1 v s . 2 0 1 2 1 1 . 5 7% 26 . 4 9% 1 3 . 9 2% 1 1 . 9 8%

0 . 0050 . 00

1 00 . 001 5 0 . 00200 . 002 50 . 00300 . 00350 . 00400 . 004 50 . 005 50 . 00

COLOMB I A V ENEZUELA ECUADOR TOTAL

302.9

9311

.74 341.6

7 381.2

0

3.59

2.88

3.41

4.31 36.64 43.05

47.60 54.22

343.2

235

7.67

392.6

7 439.7

3

2 0 0 920 1 020 1 12 0 1 2

MI L L I ON S O F L I T ER S

Milk Supply

90

Milk Suppliers

Certification Program for Brucellosis-free-Herds

Hygienic Quality of Milk


TOTAL

1 ,0 524

13 11 , 1 8 7

1 ,0 4 73

1 5 01 , 200

1 ,3 7 74

1 6 01 ,5 4 1

1 ,4 5 64

20 11 ,6 6 1

2009 20 1 0 20 1 1 2 0 1 2

Nota de la gráfica:• In Colombia, we started a new collection operation in Buga.• The increase of milk suppliers in Ecuador is due to the recovery in the demand for cheese at the San Gabriel plant.

DA I R Y F A RMS

2009 20 1 0 20 1 1 2 0 1 2

202 2 7 7 404 4 1 8

1 0 0 . 009 5 . 00

90 . 00

8 5 . 00

80 . 00

7 5 . 002009 20 1 0 20 1 1 2 0 1 2

97.13 99

.29

95.71

93.82

% of milk with counts less than 100,000 CFU/ml

• In Venezuela we manage a database of suppliers according to the plant’s needs and we started processing operations in Maturín, capital of the Monagas state.

Graph Note:• The reduction in the rate of milk with CFU (Colony

Forming Units) counts lower than 100,000 was mainly due to the effects of the floods in Colombia on our

suppliers, especially in the departments of Cundinamarca and Boyacá.

91

Technical Visits to Dairy Farms.

Graph Note:•The decrease in the total number of visits made was mainly due to changes in staff structure and the need to provide support for the new collection operations in Chigorodó, Valledupar and Buga (Colombia). This led the technical assistance team to provide administrative support and to start the team reinforcement process by hiring new professionals.

NUMBER O F V I S I T S

V AR I AT I ON

2009 20 1 0 20 1 1 2 0 1 2

6 ,8 93 6 ,9 00

0. 1 0% -23.4 5%

5 , 2 82 4 ,726

- 1 0.53%

We also work with 25 indigenous and farmers associations, which are made up of 2,500 small-scale producers that contribute 33.50% of the total sales volume in the south of the country.

As part of the Forest Grazing System Project, we choose four farms of one of our providers in the Entrerríos municipality (Antioquia, Colombia) to plant 2,000 yarumo timber-yielding trees and 2,000 Japanese acacia non-timber-yielding trees on 91 hectares.

In Venezuela, we contacted livestock farmers about working in a mutually beneficial relationship, comprehensively developing their production units and, at the same time, improving the quality of our supplies through education about animal health and technical visits.

For more than three years we have maintained stable commercial relationships in Colombia with 54,10% of our milk suppliers and each one received an average of three technical assistance and support visits in 2012.

In Ecuador, together with the Development Bank of Latin American (CAF for its Spanish acronym), theProvincial Government of Carchi and Fundación Alpina, we started a project that aims to pass on goodpractices in the management of pastures, milk quality control and improvement, milking techniques, andappropriate management of supplies.

In 2012, we trained 600 families and 20 community leaders, 35 organizations received technical assistancein animal health management and, so far, we have achieved that 40% of our suppliers are above an 8-hourreductase period and productivity (liter/hectare) has been increased by 20%.

6 Reductase is produced by foreign microorganisms in milk and its presence may indicate lower quality.

6

92

A2. STRENGTHENING THE BUSINESSES OF OUR INDUSTRIAL SUPPLIERS

Create mechanisms that facilitate and strengthen the financial, environmental and social performance of our industrial suppliers, sharing lessons learned and increasing knowledge about their businesses.

Providers of Industrial Raw Materials

C O L O M B I AQUANT . %

C o l o m b i a n

F o r e i g n

T OT A L

1 3 5

4 0

1 7 5

7 7 %

2 3 %

1 0 0 %

V E N E Z U E L AQUANT . %

7 1

6

7 7

9 2 %

8 %

1 0 0 %

E C U A D O RQUANT . %

7 5

1 1

8 6

8 7 %

1 3 %

1 0 0 %

Supplier Management and Development ProgramIN 2012, WE CREATED THE SUPPLIER MANAGEMENT AND DEVELOPMENT PROGRAM, WHICH WILLHELP US TO IMPROVE OUR COMMERCIAL RELATIONSHIPS WITH OUR SUPPLIERS OF GOODS ANDSERVICES AND TO CREATE PRACTICES THAT WILL CONTRIBUTE TO THE SUSTAINABILITY OF THEIR BUSINESSES AND OF OURS.

Our growth and the growth of our suppliers benefit from the open exchange of ideas to incorporate the bestpractices available. This program recognizes the interdependence beyond commercial relationships thatexists between the parties.

93

Development of Local SuppliersIN 2012, WE WENT A STEP FURTHER WITH OUR COMMITMENT TO ESTABLISH ALLIANCES WITH OUR INDUSTRIAL SUPPLIERS TO STRENGTHEN AND CONSOLIDATE OUR COMMERCIAL RELATIONSHIPS, FOCUSING ON FINANCIAL AND ENVIRONMENTAL ASPECTS.

I N VENEZUELA:• We started producing 40 mm and 38 mm tops with some suppliers, with the aim of having other supplyalternatives and reducing the use of raw materials.

• We started a certification program with the foil supplier, achieving savings of 8% per unit. This is a localsupply alternative that allows us to ensure that we always have access to this material.

I N ECUADOR:• We reduced the weight of the bottles for Alpina products.

• We began using a new supplier for yogurt bottles, decreasing transport costs and optimizing the use ofmaterials.

• We produced Yox bottles and wrappers locally, which we had previously imported.

Analysis of approximately 1,450 suppliers of goods and services in Colombia, through a chart that evaluates

financial and operational aspects, allowing us to determine the impact they have on the organization.

Design of a model to classify suppliers according to four strategic central issues: Operational Stability, Management

Systems, Corporate Responsibility and Environmental Responsibility.

Identification of the suppliers’ level of compliance, using a chart with more than 100 questions. According to their

score, we will award bronze, silver, gold or diamond status and establish improvement plans and projects with the

suppliers.

Creation of a reassessment model of standardized management that can be applied to our suppliers of goods and

services at a corporate level.

Validation of compliance with the 10 principles of the Global Compact, using a chart created by the Global

Compact Local Network in Colombia, for 50 suppliers in Colombia.

Design and development of a training program on three topics: management systems, risk systems and

environmental responsibility, with the aim to ensure the business’s continuity and to share topics that will help

our suppliers to constantly improve. Seventeen small and medium suppliers in Colombia participated.

The activities we carried out were:

94

IN ADDITION, WE CONSOLIDATED THE NEW SALES STRUCTURE, OPENING THE NEW INDEPENDENT SUPERMARKET CHANNEL IN RESPONSE TO THE MARKET’S NEEDS IN TERMS OF SERVICE AND SALES EFFECTIVENESS.THIS IS HOW WE WILL BECOME OUR CLIENTS’ NUMBER ONE STRATEGICPARTNER, ENSURING THEIR GROWTH AND SUSTAINABLE DEVELOPMENT.

• Segmentation of the Product Line: Organization of shelves in the retail outlet in line with the buyer’sdecision tree.

• Implementation of Category Management Processes: Cooperation with channel clients to develop theproduct lines and focus on providing the greatest value for the buyer.

• Implementation Manual: Development of support material for the sales force on topics regarding point ofsale management.

Large Retailers

Aspire to be ideal partners for our clients, facilitating their development and growth, without sacrificing the best possible service for our consumers.

a. Clients

In Colombia, this channel represents 25.4% of our sales. We went from serving 717 clients in 2011 to 814 in 2012, thanks to the opening of new points of sale. We have continued with our strategy of training sales promoters on topics such as segmentation, visibility in retail outlets, and the promotion and management of product lines, together with a recognition program that awarded around 50 sales promoters throughout the country.As pillars of development in the channel, we work on three aspects:

A3. STRENGTHENING THE BUSINESSES OF OUR CLIENTS AND DISTRIBUTORS

95

Shopkeepers

In Ecuador, the retailers represents 50% of sales, with a growth of 11% in 2011. We have 409 locations throughout the country, with 100% coverage through 38 sales promoters. We are the number one dairy product supplier, with our Alpina and Kiosko brands present in the main retailers. All the channel’s members visited the plants to learn about our products’ main production and preparation processes and we started training our commercial team through the Sales School module.In Venezuela, this channel represents 43% of our sales. We organized tastings so that consumers could try our product, learn about the brand and ultimately buy Té Alpina and Frutto. We negotiated additional refrigerated displays to promote and strengthen the presence of the company’s premium range: Regeneris, Bon Yurt and Alpina Yogurt.

In Colombia, we decided to redesign our loyalty system with shopkeepers, going from a Pareto planfor clients that awarded prizes for increases in sales, to a structured and self-sustainable program designedfor 5,000 shopkeepers with high growth potential. Through the benefits of a compensation fund, the Alpina by Your Side plan is providing comprehensive solutions in education, recreation, tourism and housing,in line with the shopkeepers’ main needs of improving their lifestyle and quality of life.

We have also continued the Territories Plan in the areas where we have industrial production. This aims to create links with communities of shopkeepers, providing training on consumer service and merchandising. In 2012, we carried out a module that we

called “Recycling in Stores” to train and invite clients to be part of the recycling process, separating items at each point of sale into our bins and establishing relationships with the waste collection companies of each area. This year, we had an impact on 450 clients. In Venezuela, we placed 89 refrigerators labeled with the Regeneris brand in Gran Caracas, Valencia and Maracay, as part of the strengthening strategy in bakeries and small stores, ensuring space for the company’s range and improving the level of service for consumers. In Ecuador, we had an impact on 4,200 points of sale with Trade Marketing shared tools. We also carried out 740 product drives and tastings in Quito, Guayaquil and Cuenca.

96

NOTES

b. DistributorsGrow alongside our distributors, learning from their experiences and passing on best practices to contribute to their development.

WE TRAINED 700 MEMBERS OF THE DISTRIBUTORS’ SALES FORCES ON MERCHANDISINGSTANDARDS IN RETAIL OUTLETS AND WE STANDARDIZED THEIR REMUNERATION SYSTEM TOPROVIDE AN INCENTIVE FOR PRODUCTIVITY.

In Venezuela, we developed and strengthened new distributors in the eastern part of the country, establishinga presence throughout the region. Similarly, we consolidated distribution operations in the Acarigua andBarquisimeto areas, increasing Alpina’s presence there, which is in line with our objective of being leaders in the yogurt market.

In Ecuador, we increased our base of distributors by 59%, reaching 27, meeting our commitment to providework opportunities and progress for small and medium businesses. Of these distributors, we have two clearlydifferentiated types: 2 medium distributors and 25 micro-distributors. We are working together on developinga model that allows them to grow in a profitable and structured way, so that they can achieve the growth thecompany has planned in the medium term.

In Colombia, we documented and shared the good practices of our strategic partners. Among these, it is important to highlight the inclusion of recycling initiatives, the use of rain water to wash vehicles, the use of transparent roofs in storehouses to minimize energy consumption, and the donations by distributors to children’s homes and senior homes.

To identify areas of opportunity, we carry out monthly assessments of our 41 distributors’ financial statements.Furthermore, we trained 700 members of the distributors’ sales forces on merchandising standards in retail outlets and we standardized their remuneration system to provide an incentive for productivity.

97

Social Value

Thinking about people, about their dreams, their needs and about what we can do to improve their quality of life has always been a part of Alpina’s work. This vocation comes from daily life with the communities in the areas where we operate. Often, our company is the only economic activity in the region and therefore, an important driving force for the communities that live there.

Initially, our interest was expressed in actions such as donations of products or money and time dedicated to social causes. Then we evolved, as we felt that we had a great opportunity to help improve the living conditions of many people and families in vulnerable living conditions.

Today we understand that if we want to have a greater impact, we have to see social value as a pillar that we work on everyday in our business. We generate day-to-day social value when we sell healthy quality products to our consumers, when we talk to our stakeholders and transparently keep them informed, when we strengthen the businesses of our suppliers, when we train our employees and develop their talent and when we create dignified working conditions. But, furthermore, by

virtue of our business, we have proposed two areas of social value action: To be a driving force for the promotion of food and nutritional safety by promoting and improving healthy eating habits in the population, and supporting access to opportunities through sustainable and inclusive business models and projects.

We have reached the best place, understanding sustainability as one of our strategic axes that permeates the entire organization and its processes. Every time Alpinistas make a decision, they will consider how what they do and what they decide will have a positive impact on their life and the lives of those around them, respecting the balance with our planet.

Challenge 7

Social Value, a priority for Alpina

WATCH ANIMATION HERE


98

AT ALPINA WE ALWAYS THINK ABOUT YOU

WITH THE HEART

99

Challenge 7

WE GROW SUSTAINABLY AND CREATE COLLECTIVE

PROSPERITY IN THE COMMUNITIES WITH WHICH

WE INTERACT.

a. Structuring the Social Business UnitSOCIAL BUSINESSES ARE INNOVATIVE BUSINESS MODELS DESIGNED TO SOLVE A SOCIAL PROBLEM WITHOUT SEEKING FINANCIAL REWARD OR TO MAXIMIZE PROFITS FOR THE COMPANY THAT SPONSORS THEM. THEY ARE MAINLY DESIGNED FOR POOR AND VULNERABLE POPULATIONS AND CREATE OPPORTUNITIES FOR INCOME GENERATION.“ConSentido” is the first social business that Alpina has undertaken, aiming to meet its higher purposeof providing healthy food and generating collective prosperity. The objective of the social business is todevelop affordable food products that have a high nutritional value and help to reduce the problemof critical and chronic malnutrition in Colombia, especially for the population living in poverty andextreme poverty.

Studies show that investment in nutrition, education and health at an early age has a more significant

socioeconomic impact than other types of investment.

ConSentido is a Business Unit with its own independent model. All the profits generated from this unit arereinvested into it in order to fulfill its social objective. The value proposition is complementary and coherentwith Alpina: “To make possible access to quality food products with high nutritional value, which are relevant and suitable for the target population for which they are designed, through effective and efficient commercialization channels, adapted to the needs of the environment.”

It is a unit that generates social value in two ways: On the one hand, it provides access to a nutritional product, with a nutritional profile that makes up for deficiencies identified in the target population.

On the other hand, it generates income through a productive connection with a vulnerable population (directly, through distribution with micro-allies, and

100

indirectly through the promotion of good practices of inclusion with suppliers of goods and services).

To ensure the offer was relevant and appropriate, we carried out an ethnographic study in the cities of Bogotá and Medellin with the aim of understanding the consumption habits, beliefs and preferences in the target population’s diet, to identify how this population

prioritizes its food shopping decisions and what it understands to be a good diet.

The first product of this Business Unit will be launched in 2013.

This is a food and nutrition education project led by Alpina Colombia with the support of Fundación Alpina.

THE OBJECTIVE? WE WANT TO HELP IMPROVE OUR EMPLOYEES’ EATING PRACTICES AND LIFESTYLES THROUGH THE DEVELOPMENT OF PARTICIPATORY ACTIONS AND STRATEGIES AT WORK.This initiative is carried out comprehensively, as dietary practices (consumption, purchase, selection andpreparation), as well as lifestyles, are an essential part of the family. Although initially we will work with Alpinistas, there will be a point when their families will get involved, and the promotion of knowledge,skills and aptitudes in the family environment will constantly be encouraged.

The strategy combines in-person elements (workshops), visual communication (posters, flyers andcommunication through Alpina’s internal media) and educational material to take home and share witheveryone. This project reflects our commitment to generate wellbeing for our employees and their families.

b. Eat Better, Live Better - Colombia

Currently, 804 Alpinistas at the Sopó plant (Cundinamarca, Colombia) are directly participating in these activities.

101

Through a partnership with the departmental government of Cesar in Colombia, communities, and public and private entities, we supported the development of the dairy and fruit and vegetable sectors in some of the department’s municipalities.

The factors that led to us proposing this initiative were the underuse of the department’s food and agricultureproduction capacity, the limited possibilities of income generation for the poorest rural families, the inefficiencyin the supply of quality food and the food vulnerability of the region, which depends 75% on food provided by other parts of the country.The results included two strategic plans to promote good practices in the dairy and fruit and vegetable sectors; 10 municipal work plans to implement these good practices; the provision of equipment; the design and delivery of the Nutritional Monitoring System for the department of Cesar; and the definition of commercialization channels for fruit.

With this project, our objective is to instill good eating habits in the children and adults (teachers, administrativeteam, parents and representatives) involved in the schools of the communities near our Villa de Cura plant, through a talk with a professional nutritionist so that they can internalize knowledge about good habits and a healthy diet.

d. Nutrition Schools - Venezuela

c. Good Practices in Food Production and Commercialization for Food and Nutritional Security in the Cesar Department – Fundación Alpina.

WE ARE IMPLEMENTING THIS INITIATIVE AT THE FOLLOWING EDUCATIONAL INSTITUTIONS:• CHAGUARAMAS SMALL STATE EDUCATIONAL UNIT:CHILDREN REACHED: 70• EL SALMáN SMALL STATE EDUCATIONAL UNIT:CHILDREN REACHED: 40• CREACIóN LOS CANALES NATIONAL PRIMARY SCHOOL:CHILDREN REACHED: 15• CREACIóN LOS CHORROS NATIONAL EDUCATIONAL UNIT: 85

102

e. Volunteering

f. Promotion of Healthy

In Colombia, we organized four activities focused on Environment, Nutrition and Education, through which 308 Alpinistas participated in volunteering sessions in Bogotá, Barranquilla and Cartagena.

We have invested 1,800 man-hours in these sessions, directly benefiting 43,728people through the foundations with which we have worked with.

In Ecuador we participated in a celebration of Children’s Day by spending time with children with cancer at Solca Hospital. We organized a puppet show and gave away various products, letting the children forget their problems for a moment and enjoy some fun.

“Up to Date with Your Wellbeing” Digital Newsletters - VenezuelaWe send out “Up to Date with Your Wellbeing” digital newsletters every month to Alpina’s database ofdoctors and consumers. In each edition, we address a health and wellbeing topic and analyze what weneed to do to achieve a healthy lifestyle.

Nutrition - PeruIn 2012, we generated very specific visibility about nutrition in printed media (magazines and publications)and visual media (television). The audience of these programs has been the end consumer, which includesmothers and people interested in health issues.

Teaching Material

Online Media – Web 2.0 Launch of Social Networks - VenezuelaIn March 2012, we opened the Facebook and Twitter accounts of Alpina Venezuela, where we sharedinformation about how to achieve a healthy lifestyle with good eating habits, physical activity andbalanced recreation.

Social Network Contests - VenezuelaIn September 2012, we organized the “Nutritional Lunchbox” contest, through which consumers sharedtheir best ideas for preparing a nutritional lunch box. Participants won goody bags of Alpina products.

Fan Page - Ecuador:In October 2012, we launched our fan page on Facebook, with the goal of positioning Alpina in aninteractive, clear and different way on online media, and as a brand that is an expert in nutrition thatprovides relevant dietary knowledge for each phase of life.

Eating Habits

103

Sponsorship of Events

WOMEN’S RACE - COLOMBIAIn 2012, we extended this event to Medellin and Cali, where we also got involved in raising awareness amongwomen and their families about the importance of a healthy diet and lifestyle to prevent cancer. Throughdifferent institutional and brand (Finesse, Avena and Baby) activities, we interacted with the womenparticipating.In Bogotá, 16,000 women and 1,500 mothers with babies attended.

MEDICAL CONGRESSES - COLOMBIA:We took part in six medical congresses to develop relationships with the profession. This will involve aseries of medical visits so that professionals can promote healthy eating habits for their patients.

ALPINA HEALTH CENTERS - VENEZUELA:We sponsored events for healthy lifestyles, inviting a nutritionist to give free advice.

MEDICAL VISITS - ECUADORWe have developed a medical visits program with the main professionals of Guayaquil and Quito, withthe objective of communicating the nutritional and functional benefits of brands such as Regeneris, AvenaAlpina, Compotas, Yox and Alpinin.

Chapter 6Challenges 2012+

2013+

WE PROPOSED SOME CHALLENGES TO MEET IN 2012 AND 2013

TO LEARN MORE ABOUT THESE CHALLENGES, VISIT WWW.ALPINA.COM

104

Chapter 7 External Verification

• The preparation of the 2012 Sustainability Report and its content is the responsibility of Alpina’s Vice-Chairmanship of Corporate Affairs, which is also responsible for defining, adapting and maintaining the internal control and management systems from which the information is obtained.

• Our responsibility is to produce an independent report based on the procedures used in ourreview.

• This report has been prepared exclusively in the interests of Alpina and in line with the termsof our services proposal. We do not accept any responsibility to third parties other than AlpinaManagement.

• We have carried out our work in line with the independence requirements of the Code of Ethics of the International Federation of Accountants (IFAC).

• The scope of an independent review is substantially smaller than that of an audit. Therefore, we do not provide an audit opinion on Alpina’s 2012 Sustainability Report.

DELOITTE & TOUCHE LTDA.Jorge Enrique Múnera D.SocioBogotá, Febrero 2013

www.deloitte.com.co

Independent Review Report Independent review of Alpina’s 2012 Sustainability Report.

Scope of Our Work We have reviewed the adaptation of the content of the 2012 Sustainability Report according to the Global Reporting Initiative (GRI) Guide Version 3.0 (G3) for preparing sustainability reports, as well as the indicators of the Food Sector Supplement proposed in this guide. The data from previous fiscal years included for comparison have therefore not been verified in our review.

Verification Processes and Standards We have carried out our work in line with ISAE 3000, the International Standard on Assurance Engagements Other than Audits or Reviews of Historical Financial Information issued by the International Auditing and Assurance Standard Board (IAASB) of the International Federation of Accountants (IFAC).Our review work has consisted of posing questions to the Administration, as well as to Alpina’s different units that have been involved in writing up the Sustainability Report and in the application of certain analytical procedures and review tests samples that are described below:• Meetings with Alpina personnel to identify the management approaches, systems and principles used.• Analysis of the processes to collect and validate the information presented in the 2012 Sustainability Report.• Analysis of the adaptation of content and indicators of the Sustainability Report to those recommended in the G3 Guide of the GRI and the Food Sector supplement.• Review of the actions carried out regarding the identification and consideration of stakeholders throughout the fiscal year and the participation processes of stakeholders through the

RESPONSIBILITIES OF DELOITTE AND ALPINA MANAGEMENT

105

analysis of internal information and available reports of third parties.• Verification, through review tests based on the selection of a sample of quantitative and qualitative information corresponding to the GRI indicators included in the 2012 Sustainability Report and its appropriate compilation from the information supplied by Alpina’s sources of information.

Conclusions Based on our review, there has been no evidence that has led us believe that the 2012 Sustainability Report contains significant errors or has not been prepared according to the Global Reporting Initiative’s Guide for Preparing Sustainability Reports Version 3.0 (G3) and the Food Sector Supplement.According to our review of indicators and content, we consider the report to meet the A+ rating according to GRI standards.

Recommendations We have also presented our recommendations to Alpina’s Vice-Chairmanship of Corporate Affairs about areas for improvement to consolidate the processes, programs and systems related to sustainability management. The most relevant recommendations are:

• Alpina must assess the relevance of migrating to the new GRI G4 methodology, which will be available in May 2013, for preparing sustainability reports. This will allow Alpina to stay on the cutting edge in its communication of its responsible and sustainable management.

• In order to continue improving the management of environmental information, we suggest making a visit in August to review the key environmental GRI indicators, as this will ensure greater reliability of the information at the time of reporting.

• Alpina should strengthen the Supplier Management and Development Program, especially the verification of suppliers’ compliance with the ten principles of the Global Compact and the supplier classification model with its four strategic axes: Operational Stability, Management Systems, Corporate Responsibility and Environmental Responsibility.

Chapter 8GRI Table of Indicators

TO SEE THE TABLE OF INDICATORS, VISIT WWW.ALPINA.COM

106

NOTES

107

NOTES

www.alpina.com.co

www.alpina.com.co

www.alpina.com.co

Alpina Productos Alimenticios S.A.Consolidated Financial Statements for the years ending December 31, 2012 and 2011 and Tax Inspector's Report

1

Report of the Tax Inspector

To the shareholders of ALPINA PRODUCTOS ALIMENTICIOS S.A. and its Subsidiaries:I have audited the consolidated balance sheets of ALPINA PRODUCTOS ALIMENTICIOS S.A. and its Subsidiaries as of December 31, 2012 and 2011 and the corresponding consolidated statements of income, changes in stockholders’ equity, changes in the financial position, and the cash flows for the years ended on those dates, as well as a summary of the significant accounting policies and other explanatory notes.Management is responsible for the preparation and accurate presentation of these financial statements in accordance with accounting principles generally accepted in Colombia. This responsibility includes: designing, implementing and maintaining an adequate internal control system for the preparation and presentation of financial statements free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.My responsibility is to express an opinion on these consolidated financial statements based on my audits. I obtained the information required to comply with my duties and carry out my work in accordance with generally accepted auditing standards in Colombia. Such standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit of financial statements involves examining, on a selective basis, the evidence supporting the amounts and disclosures in the financial statements. The audit procedures selected depend on the auditor’s professional judgment, including the assessment of the risk of material misstatements in the financial statements. In making that risk assessment, the auditor considers internal control of the Company that is relevant to preparation and reasonable presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial

statement presentation. I believe that my audits provide me a reasonable basis to express my opinion. In my opinion, the consolidated financial statements referred to above, taken from the accounting books, fairly present, in all material respects, the financial situation of ALPINA PRODUCTOS ALIMENTICIOS S.A. and its Subsidiaries as of December 31, 2012 and 2011, the results of its operations, the changes in its stockholders’ equity, the changes in its financial position, and its cash flows for the years then ended, in conformity with generally accepted accounting principles in Colombia, uniformly applied. Further, based on the scope of my audits I report that the Company has kept its accounting books in accordance with legal rules in force and accounting technique; the operations recorded in the accounting books and management actions conform to the bylaws and to the decisions by the Stockholders’ Meeting and the Board of Directors; the correspondence, account vouchers and books of minutes and stockholders’ ledgers are duly kept and preserved; the management report is in due agreement with the basic financial statements and the Company is not in default in the payment of contributions to the Integral Security System. My evaluation of internal control, conducted with the purpose of establishing the scope of my audit tests, did not indicate that the Company has failed to follow adequate internal control and preservation and custody measures for its assets and those of third parties in its possession.

ANDREA XIMENA BERNAL DÍAZStatutory Auditor

Professional Card No. 136092-TDesignated by Deloitte & Touche Ltda.

February 12, 2013.

2

Consolidated Balance Sheet as at December 31, 2012 and 2011(In millions of Colombian pesos)

ACTIVO 2012 2011Current AssetsAvailable (Note 4)Investments (Note 5)

CARLOS MEJÍA B.Legal Representative

ANDREA XIMENA BERNAL DÍAZTax InspectorT.P. 136092-T(See my enclosed report)(Appointed by Deloitte & Touche Ltda.)

ADRIANA OSORIO ROMEROAccountantT.P. 54630-T

The attached notes are an integral part of these financial statements.

$ 43,40317,320

$ 55,9114,976

Accounts Receivable:Clients (Note 6)Associated companies (Note 7)Miscellaneous debtors (Note 8)Tax advances

Accounts Receivable TotalInventory (Note 9)Expenses paid in advanceDeferred tax

Total Current AssetsInvestments (Note 5)Inventory (Note 9)Differed charges (Note 10)Intangibles (Note 12)Plant, property and equipment (Note 11)Other assetsAppreciations

Total AssetsSuspense Accounts

79,92047

85,46449,447

214,878

127,2982,4663,022

408,387

8771,926

56,40626,862

367,671526

360,961

$ 1,223,616

$ 1,154,797

88,1771,035

36,43248,699

174,343

105,8041,7053,179

345,918

8772,194

63,18728,077

370,273-

341,414

$ 1,151,940

$ 1,025,453

The undersigned Legal Representative and Public Accountant certify that we have verified the statements made in the account-ing books included in these financial statements and that these have been taken directly from the accounting books.

3

2012LIABILITIES AND SHAREHOLDERS' EQUITY 2011Current Liabilities:Financial obligations (Note 13) $ 60,141 $ 42,929

Suppliers:Colombian Foreign

Total SuppliersAccounts payableAssociated companies (Note 7)Taxes, levies and charges (Note 15)Labor obligations (Note 16)Estimated liabilities and provisions (Note 17)Retirement pensions (Note 16)Other liabilities

Current Liabilities TotalFinancial obligations (Note 13)Bonds and commercial papers (Note 14)Retirement pensions (Note 16)

Total LiabilitiesMinority interest

Shareholders' Equity:Share capital (Note 18)Capital surplusReservesNet worth revaluationNet profits for the yearProfit from previous yearsAppreciation surplusConversion effects

Shareholders' Equity TotalLiabilities and Shareholders' Equity TotalNegative Suspense Accounts (Note 25)

41,7721,156

42,928

87,9107,245

36,37520,46750,634

1,98614,150

321,836

92,269260,000

840

674,945

13,088

15,65632,01716,86882,10133,529

254360,961(5,803)

535,583

$ 1,223,616$ 1,154,797

24,0735,046

29,119

65,4207,172

33,07817,481

68,683698

5,919

270,499

85,216260,000

842

616,557

13,189

15,65637,12912,197

84,56430,086

-341,414

1,148

522,194

$ 1,151,940$ 1,025,453




The attached notes are an integral part of these consolidated financial statements.


4






Consolidated Income Statements for the Years Ending December 31, 2012 and 2011(In millions of Colombian pesos)

2012 2011Net Operating Income (Note 19)Cost of Sales

Gross profit

Operating ExpensesSales (Note 20)Overhead (Note 21)

Operating Expense TotalOperating profit

Non-Operating Income (Note 22)Non-Operating Expenses (Note 23)

Earnings before tax and minority interest

Minority InterestIncome Tax ExpenseNet Profits for the Year

$ 1,619,538

991,486

628,052

343,345181,126

524,471

103,581

30,365

(79,348)

54,598

(178)

20,891

$ 33,529

$ 1,440,198

875,732

564,466

307,225161,544

468,769

95,697

34,533

(77,712)

52,518

(3,187)

19,245

$ 30,086

5

Consolidated Net Worth Change Statements for the Years Ending December 31, 2012 and 2011(In millions of Colombian pesos)

ShareCapital

CapitalSurplus

Tax Provi-sions

Future expan-sions

Asset replace-mentLegal

Balances as at December 31, 2010

Appropriations and/or reclassificationsDeclared dividendsIncrease for appreciationInvestment exchange differenceWealth tax paymentConversion effectsChanges for the yearResults for the year


Appropriations and/or reclassificationsDeclared dividendsIncrease for appreciationConversion effectsWealth tax paymentResults for the year


$ 15,656

--------

15,656

------

$ 15,656

$ 37,129

--------

37,129

---

(5,112)--

$ 32,017

$ 8,855

-(1,027)

------

7,828

------

$ 7,828

$ 23

3,776(23)

------

3,776

4,391-----

$ 8,167

$ 11,255

-(10,721)

------

534

(1,673)--

1,953--

$ 814

$ 59

--------

59

------

$ 59

Statutory

Reserves (Note 19)


The undersigned Legal Representative and Public Accountant certify that we have verified the statements made in the ac-counting books included in these financial statements and that these have been taken directly from the accounting books.

6

TotalNet worth revaluation

Net profits for the year

Profit from previous years

Appreciation surplus

Conversion effects

Total

$ 20,192

3,776(11,771)

------

12,197

2,718--

1,953--

$ 16,868

$ 87,027

----

(2,463)---

84,564

----

(2,463)-

$ 82,101

$ 17,805

(3,776)(14,029)

-----

30,086

30,086

(2,718)(27,257)

-(111)

-33,529

$ 33,529

$ -

--------

-

-254

----

$ 254

$ 303,014

--

38,400-----

341,414

--

19,547---

$ 360,961

$ (2,990)

-----

4,138--

1,148

---

(6,951)--

$ (5,803)

$ 477,833

-(25,800)

38,400-

(2,463)4,138

-30,086

522,194

-(27,003)

19,547(10,221)(2,463)33,529

$ 535,583

Voluntary




7

Consolidated Change in Financial Position Statements for the Years Ending December 31, 2012 and 2011

(In millions of Colombian pesos)

2012 2011Working capital obtained from:

Working capital used for:

Increase in working capital

Total working capital obtained from operations

Total working capital obtained

Total application of funds

Operations:Net profits for the year

Plus or minus items that did not affect the working capitalMinority interestDepreciationAmortization of deferred chargesAmortization of intangiblesLoss (profits) from the sale of plant, property and equipment

Additions of plant, property and equipmentDeclared dividendsIncrease in deferred chargesIncrease in intangiblesIncrease in other non-current assetsDecrease in retirement pensionsWealth tax paymentNet effect of consolidationDecrease in long-term financial obligations

Increase in long-term financial obligationsRetirement of plant, property and equipmentDecrease in long-term accounts receivableDecrease in intangiblesNet effect of consolidation

$ 33,529

$ 11,132

$ 30,086

$ 32,643

(101)35,65019,404

2,242164

90,8887,0535,879

---

103,820

(39,091)(27,003)(12,623)

(1,027)(258)

(2)(2,463)

(10,221)-

(92,688)

92,573-

5,657920628

4,138

103,916

(5,475)(25,800)(15,492)

-(1,269)

(1)(2,463)

-(21,381)

(71,881)

3,27338,81520,021

2,697(1,948)

8

2012 2011Analysis of changes in working capital

$ (12,508)12,34440,53521,494

604(17,212)

(13,809)(22,490)

(73)(3,297)(2,986)18,049(1,288)(8,231)

$ 13,1444,885

34,68313,957(822)

(2,648)9,9141,229

(3,692)(9,778)(1,419)

(26,381)(45)

(384)




The undersigned Legal Representative and Public Accountant certify that we have verified the statements made in these finan-cial statements.

Current assets:AvailableInvestmentsAccounts receivableInventoryDeferred assetsFinancial obligationsSuppliersAccounts payableAssociated companiesTaxes, levies and chargesLabor obligationsEstimated liabilities and provisionsRetirement pensionsOther liabilities

Increase in working capital $ 11,132 $ 32,643


9

Consolidated Cash Flow Statements for the Years Ending December 31, 2012 and 2011(In millions of Colombian pesos)

Net profits for the year

Adjustments to reconcile the net profits with the net cash provided by (used for) operations

Minority interestAllowance for doubtful accountsInventory provisionDepreciationAmortization of deferred chargesAmortization of intangiblesTax on deferred incomeNet profits on the sale and/or retirement of plant, property and equipment

Net changes in operating assets and liabilitiesAccounts receivableInventoryIntangiblesDeferred chargesOther assetsSuppliersAccounts payable and taxes, levies and feesLabor obligations and retirement pensionsEstimated liabilities and provisionsOther liabilitiesNet effect of consolidation

Net cash provided by operating activities

CASH FLOWS FOR INVESTMENT ACTIVITIESResulting from the sale of plant, property and equipmentAdditions of plant, property and equipment

Net cash (provided by) used for investment activities

2012 2011CASH FLOWS FOR OPERATING ACTIVITIES

$ 33,529

(101)3,1431,512

35,65019,404

2,242157164

95,700

(43,678)(22,738)

(1,027)(13,384)

(526)13,80925,860

4,272(18,049)

8,231(10,221)

38,249

5,879(39,091)

(33,212)

$ 30,086

3,273173

(307)38,81520,021

2,6971,030

(1,948)

93,840

(33,314)(14,919)

628(15,701)

-(6,222)

8,5491,463

26,381 -

4,138

64,843

5,657(5,475)

182

10

CASH FLOWS FOR FINANCING ACTIVITIESIncrease (decrease) in financial obligationsDividend paymentWealth tax payment

Net cash used for financing activities

NET (DECREASE) INCREASE IN CASH AND CASH EQUIV-ALENTSCASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEARCASH AND CASH EQUIVALENTS AT THE END OF THE YEAR

2012 2011

24,265(27,003)

(2,463)

(5,201)

(164)

60,887

$ 60,723

(18,733)(25,800)

(2,463)

(46,996)

18,029

42,858

$ 60,887


The undersigned Legal Representative and Public Accountant certify that we have verified the statements made in the ac-counting books included in these financial statements and that these have been taken directly from the accounting books.




11

Operations - Alpina Productos Alimenticios S.A. was incorporated on October 30, 1969 by Public Deed No. 6363 issued by the First Notary of Bogotá as Lácteos Colombianos S.A. The company's name was later changed to Alpina Productos Alimenticios S.A. by Pub-lic Deed No. 8717 issued by the Fourth Notary of Bo-gotá on December 28, 1978. By Deed No. 6115 issued by the Seventh Notary of Bogotá DC, September 22, 1984, Sociedad Alpina Productos Alimenticios S.A. merged with Distribuidora Lacol Ltda. The Company's term expires on October 29, 2019. By Public Deed No. 001 issued by Notary 61 of the Capital District on January 2, 2008, Sociedad Alpina Productos Alimenticios S.A. acquired Alpical S.A., Copacking S.A., Copacol S.A., Passiflora Colombiana S.A. and Los Alpes S.A.The company's activity primarily involves the manu-facture, purchase, sale, import and export of all types of food products and all types of agricultural and live-stock activities.

Reporting entity - These consolidated financial state-ments include the financial statements of Alpina Productos Alimenticios S.A. and its subordinate com-panies: Alpina Productos Alimenticios Alpieducador S.A., Alpina Antioquia Zona Franca S.A. (in liquida-tion), Alpina Cauca Zona Franca S.A.S. and Vadilbex Investment Limited, as described below:

Vadilbex Investment Limited - This company was in-corporated on December 18, 2008 under the corporate laws of the constitutional monarchy of Barbados.It began operation in October 2009.This company receives income from its holdings in So-ciedad Alpina Productos Alimenticios C.A., of which it owns 100% of the company's capital. The company acquired goodwill of USD 3,709,807 to be paid off in 20 years.

Alpina Productos Alimenticios Alpiecuador S.A. - This company was incorporated by a public notary deed on September 18, 1995, approved by the Superintendence of Companies under Resolution No. 95.1.1.1.3499 dated October 26, 1995 and recorded in the Commercial Reg-ister on November 6, 1995. The company is involved in the manufacture, sale, commercialization, export and import of food products as well as supplies and raw ma-terials used in the food industry.Primarily, the company manufactures and commercial-izes dairy products, a significant portion of which are imported by Alpina Productos Alimenticios S.A. Its activities and results are therefore dependent in large part on existing relationships and agreements with the aforementioned company.Alpina Cauca Zona Franca S.A.S. - This company was incorporated by Public Deed No. 2176 issued on No-vember 21, 2008 by Notary 61 in Bogotá. Its corporate life extends until February 4, 2108. Its primary activ-ity involves the manufacture, transformation, develop-ment, exploitation, purchase, sale, distribution, import and export of all types of food products, products for

Notes of the Financial Statements for the Years Ending December 31, 2012 and 2011(In millions of Colombian pesos and United States dollars, except when indicated otherwise)

1. Operations

12

domestic use, agroindustrial materials, products for livestock raising, and raw materials needed for produc-ing these products, which it then exclusively promotes once designated as an industrial user of goods and ser-vices in one or more permanent free trade zones estab-lished by Decree 780 of 2008 and any other regulations that may complement and/or modify it.

Pursuant to Minute No. 3 of the General Shareholders' Meeting from September 29, 2010, recorded on Novem-ber 23, 2010 under number 00027617 of Book IX, the company changed its name from Alpina Cauca Zona Franca S.A. to Alpina Cauca Zona Franca S.A.S., reform-ing its bylaws, transforming the corporate structure from a public limited liability corporation to a simpli-fied joint stock corporation, and defining the life of the corporate entity as indefinite.On June 14, 2012, the company was classified as an In-dustrial User of Goods and Services of the Cauca Per-manent Free Trade Zone.

Bases for filing financial reports The Company and its subordinates must prepare and submit general uncon-solidated financial statements to its highest supervisory

bodies and its General Shareholders' Meeting. These serve as the basis for profit sharing and other appropria-tions. In addition, the Colombian Code of Commerce requires the preparation of general consolidated finan-cial statements. These are also submitted to the Gen-eral Shareholders' Meeting for approval, but they do not serve as a basis for sharing profits.The consolidated financial statements include the ac-counts of companies of which the Company possesses directly or indirectly more than 50% of the share capital or for which it holds administrative control.The consolidated financial statements dated December 31, 2012 and 2011 include financial statements for Alpina Productos Alimenticios S.A. and its subordinates: Vadil-bex Investment Ltd., Alpina Productos Alimenticios Alpiecuador S.A., and Alpina Cauca Zona Franca S.A.S. The direct share percentages as at December 31 were as follows:

Share % 2012 Share % 2011

Total Assets

Total Assets

Total Liabilities

Total Liabilities

Total Net Worth

Total Net Worth

Profit(loss)

Profit(loss)

Entity

Entity

Vadilbex Investment Ltd.Alpina Productos Alimenticios Alpiecuador S.AAlpina Cauca Zona Franca S.A.S.

Alpina Productos Alimenticios S.A.Vadilbex Investment Ltd.Alpina Productos Alimenticios - Alpiecuador S.A.Alpina Cauca Zona Franca S.A.S.

Alpina Productos Alimenticios S.A.Vadilbex Investment Ltd.Alpina Productos Alimenticios - Alpiecuador S.A.Alpina Cauca Zona Franca S.A.S.Alpina Antioquia Zona Franca – In liquidation

60.8399.99

94

$ 1,165,492 56,39557,396

9,191

$ 1,096,64558,77366,676

1,31374

$ 629,738 23,01838,345

8,978

$ 574,78930,34039,479

1,190-

$ 502,171 32,93718,517

123

$ 491,88118,93225,288

12364

$ 33,583 44053490

$ 29,9759,5011,909

210

60.8399.99

94

The value of the assets, liabilities, net worth, and fiscal year earnings for Alpina Productos Alimenticios S.A. and its subordinates before special items are subtracted is as follows:

As at December 31, 2012

As at December 31, 2011

13

The financial statements were prepared according to the accounting principles generally accepted in Colom-bia and stipulated by law, primarily Decrees 2649 and 2650 of 1993 and the regulations of the Commercial Su-perintendence, requiring that companies' management make certain estimates and use certain assumptions for assessing certain individual line items on financial statements and making relevant disclosures. Although they may differ from the final amounts, the manage-ment believes that the estimates and assumptions used were appropriate for the circumstances. Certain accounting principles used by the Company that com-ply with the accounting principles generally accepted in Colombia may not comply with the accounting prin-ciples generally accepted in other countries.

The main accounting policies used by the Company to prepare its financial statements are described below:

a. Bases of consolidation - The consolidated finan-cial statements include the accounts of Alpina Pro-ductos Alimenticios S.A. consolidated with those of the subordinates mentioned in Note 1. As such, the financial statements cover all assets, liabilities, equity and income of the affiliates after the deduc-tion of investments, operations, and any offsetting balances. Any significant balances or operations between related companies were discounted during the consolidation.

b. Currency unit - The currency unit used by the Company is the Colombian peso.

c. Accounting period - The Company's bylaws es-tablish that books be closed and general financial reports be prepared and released on December 31 of every year.

d. Relative importance or materiality - Economic events are recognized and reported according to their relative importance. When the financial re-ports are prepared, materiality shall be determined in relation to all current assets and liabilities, the to-tal assets and liabilities, the working capital, or the results for the year, as appropriate. As a general rule, material events are equal to 5% of the total value of assets, liabilities, and shareholder equity and 5% of the value of the operating income.

e. Recognition of revenue - Revenue is recognized and recorded based on orders delivered and in-voiced from the moment the essential risks and ben-efits associated with the ownership and possession of the property are transferred to the client.

f. Cash and cash equivalents - For the purposes of the presentation of the cash flow statement, the company classifies high liquidity investments in the cash equivalents line item.

g. Investments - Fixed marketable investments are recorded at cost and are valued by the accrual method; variable and permanent marketable invest-ments are valued at cost adjusted for inflation until December 31, 2006 and adjusted according to their intrinsic value.

h. Provision for bad debts - The provision for bad debts is reviewed and updated at the end of every period based on a management analysis of the sta-tus of the balances and the collectability of individ-ual accounts; sums considered unrecoverable are occasionally charged to this provision.

i. Inventories - Recorded at the lesser of the cost of acquisition or production, and the market value. In-ventories are valued by the weighted average cost method.An inventory protection provision is recorded based on the technical analysis of obsolescence and slow-moving inventory.

j. Deferred charges - The Company recognizes as differed charges those expenses incurred for the items described below and whose amortization oc-curs according to the straight line method for peri-ods that vary for each item as follows:

2. Summary of accounting policies

14

k. Plant, property and equipment - Plant, property and equipment is carried at cost and primarily in-cludes financing expenses and differences in liabili-ties incurred for the plant, property and equipment's acquisition until they are in a condition to be used.The sale and retirement of such assets are discount-ed from the respective adjusted net cost and the dif-ferences between the sale price and the net adjusted cost are applied to the results.Depreciation is calculated on the cost adjusted for inflation until December 31, 2006 based on the like-ly useful life of the assets at the annual rates of:

l. Goodwill - Goodwill is generated by acquisitions made at a higher value than the book value, specifi-cally the investment made in the Ecuadorean Pro-loceki company (2007). This asset is amortized over a period of 20 years according to the straight line

method. The contingent liabilities associated with the acquisition of investments is carried as the high-er goodwill value.

m. Appreciations (depreciations) - Appreciations and depreciations correspond to the differences be-tween a) the replacement value as determined by technical appraisal and the net book value of the plant, property and equipment, and b) the cost of the investments and their intrinsic value. Permanent equity investments in stocks or share capital of entities not controlled by the Company are carried at cost. At the end of the fiscal year, they are adjusted to their market value determined ac-cording to the intrinsic value of each investment. Positive adjustments are recorded as asset apprecia-tions with a credit or debit made to the appreciation surplus. Negative adjustments are recorded as de-preciations, regardless of the net balance.Appreciations of plant, property and equipment cor-respond to the difference between the replacement value and the net book value carried by homoge-neous groups of assets, which are recorded in sepa-rate asset accounts and as an appreciation surplus not subject to distribution.

n. Labor obligations - Liabilities corresponding to the Company's obligations related to statutory and non-statutory employee benefits.

o. Income tax provision - The company determines the income tax provision based on its taxable in-come or presumed income, if higher, estimated ac-cording to specific rates in the tax code. The tem-porary differences between the books and the taxes while certain line items are being processed are also recorded as differed income tax, provided that there is a reasonable expectation that these differences will be resolved.

p. Wealth tax and its surcharge - In accordance with the law regulating the accounting principles generally accepted in Colombia and the alternative recording practices established therein, the Com-pany has opted to annually charge the equivalent amounts due for the respective wealth tax and sur-charge period to the net worth revaluation account.

q. Retirement pensions - This represents the value of all future payments the Company must make to

Payback period

Depreciation method

Term of contractTerm of contract

10 years1 to 7 years

1 year3 years3 years

Term of contract

Straight lineProduction unitsStraight lineStraight lineStraight lineStraight lineStraight lineStraight line

5%

10%20%20%10%10%10%

Prepaid expenses:Interests, rents, utilities and othersInsurance and bondsDeferred charges:Studies, investigations and projectsComputer softwareMolds and diesBucketsBaskets and palletsImprovements on other property

BuildingsMachinery and equipmentFurniture and appliancesVehiclesComputer equipmentMedical and scientific equipmentSewage, plant and networksSecurity system

15

those employees that satisfied or will satisfy certain legal requirements regarding age, time of service and other obligations. The value is determined by ac-tuarial studies that the Company obtains each year. For employees covered by the new social security system (Law 100 of 1993), the Company covers their pensions obligations by paying into pension funds under the terms and conditions set forth in said law.

r. Suspense accounts - This includes contingent responsibilities and rights and differences between book and tax values.

s. Transition to International Financial Information Reporting Standards - Pursuant to Law 1314 of 2009 and regulatory decrees 2706 and 2784 of December 2012, Alpina Productos Alimenticios S.A. is required to begin transitioning from the accounting princi-ples generally accepted in Colombia to the Interna-tional Financial Reporting Standards (IFRS). For this purpose, the Public Accounting Technical Council issued strategic guidelines that classified three groups of companies. As the Company belongs to Group One (1), the man-datory transition period will begin on January 1, 2014 and the first comparative financial statements to be drafted according to the IFRS shall be issued on December 31, 2015.

t. Balance conversion - The financial statements for

Vadilbex Investment Limited, Alpina Productos Ali-menticios Alpiecuador S.A. were converted into Co-lombian pesos according to the procedure described in bulletin 100 of 1995 issued by the Colombian Fi-nancial Superintendence.The following procedure was used:

1. The balances in bolívars were converted into dol-lars at the exchange rate of 4.30 bolívars per dollar.

2. Balance account balances were converted into Co-lombian pesos at the year-end exchange rate, which was $1,768.23 per dollar for 2012 and $1,942.70 per dol-lar for 2011. The balances from the income statement were converted using the average exchange rate certified by the Financial Superintendence, which for 2012 was $1,798.23 per dollar and for 2011 was $1,848.17 per dollar.

On December 31, the Company and its subordinates declared the following assets and liabilities in foreign currency, which were recorded in their peso equivalents on that date:

3. Balances in foreign currency

Equivalent in millions of pesos

Equivalent in millions of pesos US$US$

20112012

AssetsLiabilities

Net (liability) asset position

US 43,995,52851,226,414

US (7,230,886)

US 21,387,90431,043,393

US (9,655,489)

$ 77,794 90,580

$ (12,786)

$ 41,55060,308

$ (18,758)

16

4. Available

5. Investments

6. Clients

2012

2012

2012

2011

2011

2011

Petty cashGeneral cash (includes 2012 US $42,085 and 2011 US $23,678)Foreign banks (includes 2012 US $3,999,202 and 2011 US $5,702,373)Colombian banks

Total

a) Investments:Investment trust rightsTax refund instruments

Subtotal

b) Permanent investments:Stocks in unaffiliated companiesLa Recetta Soluciones Gastronómicas Integradas S.A.Other shares in social clubsSociedad Portuaria de Buenaventura (Buenaventura Port Authority)

Colombian currency Foreign currency (2012 - US $986,430 and 2011 - US $1,160,240)

Minus provision for bad debts

Total

$ 1667,0537,342

28,843

$ 43,403

$ 17,122 198

$ 17,320

$ 696167

14

$ 877

$ 81,198 1,744

82,942(3,022)

$ 79,920

2624,301

14,166 37,182

$ 55,911

$ 4,966 10

$ 4,976

$ 696167

14

$ 877

$ 88,522 2,254

90,776(2,599)

$ 88,177

17

The change in the provision for bad debts was as follows:

The balances and transactions with associated companies as at December 31 comprised:

2012 2011Balance at the beginning of the yearWrite-offsRecoveriesProvisions

Balance at the end of the year

$ 2,599(2,720)

(3) 3,146

$ 3,022

$ 3,041(615)(64)

237

$ 2,599

7. Economic associates

8. Miscellaneous accounts receivable

2012

2012

2011

2011

Accounts receivable:La Recetta Soluciones Gastronómicas Integradas S.ASucursal Colombia Sociedad AlpinaCorporativo S.A.

Accounts payable:Sucursal Colombia Sociedad Alpina Corporativo S.A.La Recetta Soluciones Gastronómicas Integradas S.A

Loans to individuals US $35,824,058 (2011 - US $11,135,533)1Other2AdvancesAccounts receivable for workersDepositsClaims

Total

$ -47

$ 47

$ 7,245 -

$ 7,245

$ 63,34512,6266,5562,413

524 -

$ 85,464

$ 96570

$ 1,035

$ 7,142 30

$ 7,172

$ 21,6338,8823,5092,262

126 9

$ 36,432

1 For 2012 and 2011, this corresponds to loans made to Alpina Foods for working capital of $63,345 and $21,633, respectively.

2 For 2012, this corresponds primarily to the sale of the Casa Matriz line of bottles to Spain for $3,798.

The above transactions were carried out according to the conditions, terms, risks and interest rates in effect on the market.

Transactions with directors and managers - In 2012 and 2011, the transactions were for $624 and $787, respectively. The conditions reflect terms between three and four years without financial cost.

18

The amortization of differed charges applied to the results of the years ending December 31, 2012 and 2011 was $19,404 and $20,021, respectively.

9. Inventory

10. Deferred charges

2012

2012

2011

2011

Raw materials and packagingFinished productsProducts in processSupplies and replacement parts Inventory in transitMerchandise not produced by the Company or its subordinatesProvision for obsolescence

Subtotal

Minus: Long-term portion

Total

The change in the provision is as follows:

Balance at the beginning of the yearProvisionsUses during the period

Balance at the end of the year

Computer programsStudies, investigations and projectsOtherLicensesImprovements on other propertyMolds and dies

Total

$ 55,69934,09828,044

8,9812,105

893 (595)

129,224

(1,926)

$ 127,298

841,512

(1,001)

$ 595

$ 39,5516,8576,3953,085

417 101

$ 56,406

$ 47,45527,98621,4816,4853,716

959 (84)

107,998

(2,194)

$ 105,804

391-

(307)

$ 84

$ 47,4185,4754,7333,5042,039

18

$ 63,187

19

11. Plant, property and equipment

Appre-ciation

Appre-ciation

Cumm.Dep.

Cumm.Dep.

Net Value

Net Value

Appraisal value

Appraisal value

Cost

Cost

2012

2011

Machinery and equipmentConstructions and buildings2Transportation equipment and freightComputer and communication equipment

LandOffice equipmentMachinery and equipment in transit

Subtotal

Construction works in progress1Assembled machinery and equipment1

Subtotal

Total

Machinery and equipmentConstructions and buildingsTransportation equipment and freightComputer and communication equipment

LandOffice equipmentMachinery and equipment in transit

Subtotal

Construction works in progress1Assembled machinery and equipment1

Subtotal

Total

$ 395,311186,85163,26815,060

13,54315,078

1,585

690,696

$ 5,60730,467

36,074

$ 726,770

$ 383,800188,16963,06315,162

12,41315,153

2,720

680,480

$ 58119,779

20,360

$ 700,840

$ 369,096180,099

48,5627,591

31,6407,151

-

644,139

$- -

-

$ 644,139

$ 378,830201,33148,4088,080

34,8848,060

2,720

682,313

$- -

-

$ 682,313

$ 175,184124,012

4,5063,946

13,5436,574

1,585

329,350

$ - -

-

$ 329,350

$ 174,242 139,459

13,799 1,887

12,4135,393

2,720

349,913

$58119,779

20,360

$ 370,273

$ 218,06062,83958,76211,114

-

8,504 -

359,279

$ - -

-

$ 359,279

$ 209,55848,71049,26413,275

-

9,760 -

330,567

$- -

-

$ 330,567

$ 218,85367,63441,084

7,076

20,8663,354

-

358,867

$- -

-

$ 358,867

$ 204,58861,872

34,6096,193

22,4712,667

-

332,400

$- -

-

$ 332,400

20

There are no restrictions or taxes on plant, property and equipment.The depreciation of fixed assets charged against the results during the years ending December 31, 2012 and 2011 was $35,650 and $38,815, respectively.

1 As at December 31, 2012 and 2011, construction works in progress and assembled machinery included projects to establish and improve produc-tion lines.

2 In 2012, the assets of the Casa Matriz warehouse in Cali, lots in Melgar and plant in Pasto were sold. These sales generated profits of $798.

The amortization of intangibles was charged against the results of the years ending December 31, 2012 and 2011 was $2,242 and $2,697, respectively.

The due date of the long-term obligations in upcoming years is as follows:

2014 $1042015 1,3462016 onward 90,819

$ 92,269

12. Intangibles

13. Financial obligations

2012

2012Effective annual average interest rate

2011

2011

Goodwill1RightsAcquired trademarks

Subtotal

Accumulated amortization

Total

Promissory notes US $48,108,199; (2011 - US $31,043,393)2 Rental contracts and leasing1Overdrafts (in the books)

Current portion

Long-term portion

$ 31,685 5,091

231

37,007

(10,145)

$ 26,862

$ 149,903 2,435 72

152,410

(60,141)

$ 92,269

FTD + 2.4FTD + 4.0

$ 32,5983,857

231

36,686

(8,609)

$ 28,077

$ 127,001 1,076 68

128,145

(42,929)

$ 85,216

1 Goodwill corresponds to the difference between the transaction price and the book value of the net assets acquired in the purchase of Proloceki S.A. (Ecuador) for $26,117.

1 The types of property covered by "leasing" include vehicles and com-puters with an average term of three years.

2 This category includes obligations with Colombian financial insti-tutions subject to market interest rates and whose payback periods vary depending on the type of obligation. The interest paid in 2012 was $34,446 (2011: $34,625). As at December 31, 2012, there were no delinquent obligations.

21

Operations - Public issuer of securities The Colom-bian Financial Superintendence, by means of Resolu-tion Number 2125 of December 24, 2008, authorized the Company to record straight bonds and its public offer with the National Registry of Securities and Issues. The authorized amount of the issue was $360,000 with a nominal value of $1,000 for each bond and a term be-

tween eight (8) and fifteen (15) years from the date the bond is issued.On February 10, 2009, the first round of bonds was placed on the Colombian stock exchange at $260,000 through a Dutch auction. These bonds were primarily used to replace bank loans for $238,566.

The characteristics of the bond issue were as follows:Series A10: $121,920 million, 10-year term, CPI + 6.7%Series B12: $51,580 million, 12-year term, 11.49%Series A15: $86,500 million, 15-year term, CPI + 7.4%

In 2012 and 2011, quarterly interests of $26,655 and $37,092, respectively, were paid.

Tax returns for the tax years 2011 and 2010 are subject to the acceptance and review of the tax authorities. The management of the Company and its legal advisors be-lieve the amounts recorded as liabilities for taxes due are sufficient to bear any liability that may occur for these years.The tax laws applicable to the Company stipulate that:

a. The base for determining the income tax shall not be less than 3% of the liquid assets on the last day of the previous tax year. The rate applicable to the Company is 33%. For 2012, the company recog-nized an estimated income expense of $17,455 (2011: $10,950), determined by the ordinary income system.

b. Since the 2007 tax year, taxpayers may readjust the cost of movable and immovable property considered to be fixed assets on an annual basis. The adjust-ment percentage for 2012 is 3.04% and shall only ap-ply for tax purposes.

c. Since 2004, income tax payers that carry out op-erations with economic affiliates or related foreign parties and/or with residents of countries consid-ered to be tax havens are, for income tax purposes, required to determine their ordinary and extraordi-nary income, their costs and deductions, and their assets and liabilities, using prices and profit margins set by the market for these operations. As at this date, the Company's management and advisors had

not yet updated the study for 2012, but they feel that based on the satisfactory results of the study in 2011, that they will not need major additional tax provi-sions.

d. Since the 2011 tax year, no income taxpayer may use the special deduction for real productive asset investment.

e. By virtue of the legal stability contract signed be-tween the Company and the Colombian Ministry of Industry, Trade and Tourism in 2006 for a term of six (6) years, some of the changes mentioned do not apply to the Company as these regulations were is-sued after the year in which the contract was signed.

Wealth tax - The Company paid $9,853 for this tax based on the liquid assets in its possession on Janu-ary 1, 2011 at a rate of 4.8% plus 1.2% for the surcharge. The return was file in May 2011 and paid in eight equal installments in the months of May and September of 2011, 2012, 2013 and 2014.For 2012, the Company paid and carried the amount of $2,463 for the installments due for the wealth tax and its surcharge in the asset revaluation account. The amount of $4,926 due for subsequent periods is recorded in sus-pense accounts.

The tax regulations that apply to Alpina Productos Alimenticios C.A. stipulated that (figures expressed in

14. Bonds and commercial papers

15. Taxes, levies and charges

20112012

$ 260,000

$ 260,000

$ 260,000

$ 260,000

Commercial papersBonds

Total

22

thousands of bolivares fuertes (Bs.Fs.):a) Taxable income is taxed at the rate of 34%.b) In January 2001, taxation on worldwide income, the capital gains tax, and regulations on internation-al fiscal transfers were incorporated into the Income Tax Reform Law published in October 1999. In De-cember 2001, the Reform Law was enacted. Among other things, it introduces certain modifications to the capital gains tax, the transfer price system, and inflation adjustments.

For 2012, the Company did not incur an income tax ex-pense due to a tax loss for the fiscal year. In 2011, the Company recorded an estimated income tax expense of Bs.Fs. 8,299.Venezuelan tax law requires an annual inflation adjust-ment calculation for non-monetary line items and net worth. This includes counting the net tax income as a taxable or deductible line as appropriate. As for plant, property, equipment and other similar assets, this regu-lar inflation adjustment is depreciated or amortized for the rest of the useful fiscal life of the respective assets. For inventory, this adjustment is made in the sale cost of products once they are bought or sold. The total regular adjustment for the year is determined as the algebraic sum of the amount of the different inflation adjustments for each non-monetary line item and the net worth.

Transfer prices - Taxpayers subject to income tax that carry out transactions with associated foreign entities must determine their income from exports and their costs for the goods and services acquired from associ-ated foreign entities according to legally established procedures. The management carried out the study on transfer prices required to document said transac-tions. This did not reflect significant differences for the amounts used to determine the net tax income from the year ending on December 31, 2011.The tax regulations that apply to Alpiecuador stipulate that (figures expressed in dollars):The 2012 income tax rate is calculated at 23% on profits subject to sharing and 15% on profits subject to capital-ization. Until 2009, cash dividends that were filed or distributed to Ecuadorean or foreign shareholders were not subject to any additional withholding. Since 2010, pursuant to the latest tax reforms, dividends distributed to individuals residing in Ecuador or companies domi-ciled in tax havens or jurisdictions with lower tax rates have been subject to income tax. For 2011, the expense provided for income tax rose to US $455,143 (2010: US $414,884).

Transfer prices - The company does not possess the

transfer price study for 2012 required by law as the deadline for filing it with the tax authorities is not until June 2013. This study constitutes a basis for determin-ing whether operations with related entities have been carried out at reasonable prices that are close to market values. On the date on which the financial statements were issued, this study was in progress and the Com-pany's management felt that any outcomes would lack relative importance. On December 31, 2011, the Com-pany completed a price transfer study that established that transactions with related entities were carried out at reasonable prices close to market values.

Tax reform - Below are summaries of some modifica-tions introduced to Colombian tax law for 2013 onwards by Law 1607 of December 26, 2012:

Income tax - The taxable income rate for corporate entities changed to 25% on January 1, 2013.

CREE income tax for social contributions - This tax was created on January 1, 2013. This tax is calcu-lated based on the gross income minus income not included in income taxes, costs, deductions, exemp-tions and occasional earnings at a rate of 8%. For 2013, 2014 and 2015, the rate will be 9%.

When the basis for paying the CREE tax is settled, in-come from the tax period cannot be offset by tax losses or excesses of presumed income from previous periods. Contribution exemption - Corporate entities filing in-come tax are exempt from making social contributions to the Servicio Nacional del Aprendizaje ("National Training Service," SENA) and the Instituto Colombiano de Bienestar Familiar ("Colombian Institute for Family Wellbeing," ICBF) for workers that earn up to ten (10) times the legal minimum monthly salary. This exemp-tion takes effect from the time the withholding system is put in place to collect the CREE income tax (no later than July 1, 2013).

Accounting standards - For tax purposes only, refer-ences in tax regulations to accounting standards shall remain in effect for the four (4) years following the ap-plication of the International Financial Reporting Stan-dards. Consequently, during the aforementioned period, the tax concepts based on line items and included in tax returns shall continue unchanged. Likewise, accounting requirements to recognize special tax situations shall no longer be applicable once the new accounting frame-work comes into effect.

23

Obligation for businesses to file consolidated financial statements - Duly registered economic and/or business groups must electronically submit consolidated finan-cial statements and their respective attachments to the National Tax and Customs Agency no later than June 30 of every year.

Retirement pensions - The value of the Company's pension obligations as at December 31, 2012 and 2011 have been determined at a technical annual interest rate of 4.8% pursuant to legal regulations. The balance is entirely amortized.

The value of the pension obligation at the end of each period is based on actuarial calculations. Said calcula-tions were made by an independent actuary pursuant to applicable regulations. As at December 31, 2012 and 2011, the amortization of the calculation was charged against the results at $109 and $110, respectively. In Ec-uador, it was charged at $43 and $48, respectively.

16. Labor obligations 17. Estimated liabilities and provisions2011

2011

2012

2012$ 6,938 6,0183,4573,328

726

$ 20,467

$ 15,872 15,1404,726

4,6444,4442,5401,358

952904

1439

$ 50,633$ 1,0301,796

2,826

(1,986)

$ 840

$ 6,9685,5034,328

-

682

$ 17,481

$ 24,52417,9796,633

4,1387,9152,1721,0341,5731,348

783584

$ 68,683$ 1,033507

1,540

(698)

$ 842

Consolidated severance packages Vacations Social benefits

Severance package interest

Total

OtherSupplies and replacement partsInterestContingencies for legal proceedingsAdvertisingTransport, freight, haulingUtilitiesFeesTechnical servicesTravel expensesCommissions

TotalActuarial calculation for ColombiaActuarial calculation for Ecuador

Current portion

Long-term portion

24

Share capital - As at December 31, 2011 and 2010, the capital could be broken down as follows:

Declared and paid dividends - At the ordinary General Shareholders' Meeting held on March 2012, a dividend for each subscribed and paid stock was approved.

Dividends were paid as follows:Legal reserve - Colombian law requires that the Com-pany reserve 10% of its profits after taxes until at least 50% of the underwritten capital has been reserved. The law prohibits this reserve from being distributed during the Company's life, although it may be used to absorb losses. The Company has exceed this profit appropria-tion percentage required by law.

Voluntary reserves - These include reserves for future expansions and for stock repurchases authorized by the General Shareholders' Meeting for specific purposes. These reserves are unrestricted and are at the disposal of the General Shareholders' Meeting.

Equity method surplus - This surplus corresponds to increases or decreases in the equity of subordinate companies that arise from equity line items other than those for earnings but that increase or decrease the value of the investment registered by the controlling entity.

Net worth revaluation - The revaluation of net worth cannot be distributed as profit but it can be capitalized. Minute No. 90 of the General Shareholders' Meeting from December 1, 2011 authorized the wealth tax as a way to lower the net worth. The decrease for 2011 was valued at $2,463 and corresponds to the amortization of one fourth of the wealth tax (see Note 16).

Appreciation surplus - The company recorded the fol-lowing appreciations:

18. Equity

19. Operating income

20. Sales operating expenses

2011

2011

2011

2012

2012

2012

$ 360,0212,686

$ 362,707

$ 1,755,27611,893

(14,010)(130,695)

(2,928)

$ 1,619,536

$ 100,754 90,80253,42518,49515,80415,35812,92010,98810,1894,3452,5772,0742,0732,017

758568198

$ 343,345

$ 89,92484,75145,31517,20714,61214,18010,5199,8467,9304,5391,0511,8872,4191,920

633373119

$ 307,225

$ 18,000

$ 6,7506,7516,7516,751

$ 27,003

$ 15,656

$ 332,4009,014

$ 341,414

$ 1,556,83515,103

(11,068)(118,598)

(2,074)

$ 1,440,198

For plant, property and equipmentFor investmentsTotal

ManufacturingWholesale and retail tradeMinus:

ReturnsDiscountsDiscount provision

Total

PersonnelAdvertisingTransport, freight, haulingOther servicesTemporaryMiscellaneousMaintenance and repairsDepreciationRentsTaxesProvisionsTravel expensesAmortizationsInsuranceLegal expensesFeesContributions and memberships

Total

Authorized: 180,000,000 common stocks at a nominal value of $100 each.

April 2012July 2012October 2012January 2013

Total

Underwritten and paid capital - 156,556,992 stocks in 2012 and 2011.

25

21. Overhead operating ex-penses

23. Non-operating expenses

24. Suspense accounts

22. Non-operating income

2011 2011

2011

2011

2012 2012

2012

2012

$ 49,74448,01116,09513,45512,2528,9806,3394,8343,9383,8852,8982,4202,0471,6051,5751,199900846102

181,125

$ 35,225 10,7959,7568,7186,9514,965

2,939

$ 79,349

$ 654

181,705

25,535

2,0761,148

395

211,513

10,6901,163

1,660

1,882

15,395

58,263

384,448485,178

927,889

$ 1,154,797

$ 9,839 4,198

7,0221,296

4426,779

390141258

$ 30,365

$ 30,13949,52717,34518,98710,273

7,7293,7683,6707,8583,2272,589

172,246

783474

1,1801,067

59570

$ 161,544

$ 35,76118,8845,3397,3735,6521,617

3,086

$ 77,712

$ 653

171,403

2,076

39425,535

1,147

200,555

11,3456,694

1,660

1,882

21,581

58,263

365,540378,861

802,664

$ 1,025,453

$ 20,9315,894

3,9281,946

656630289248

11

$ 34,533

FeesPersonnelAmortizationRentsMaintenance and repairsTaxesTravel expensesMiscellaneousAdvertisingHousekeeping and securityOther servicesProvisionsDepreciationTransport, freight, haulingTemporaryContributions and membershipsInsuranceLegal expensesFitting and installation

Total

InterestExchange differencesMiscellaneousOther financial expensesCommissionsExtraordinary expensesSales from sales and prop-erty retirement

Total

Debtor contingent rightsControl debtors:Totally depreciated plant, property and equipmentAssets acquired under fi-nancial lease

Unused letters of creditOther rights and assetsWrite-offs

Contingent creditors:Guarantees and commitmentsDisputes and/or claimsGoods and securities re-ceived in guaranteeGoods and securities re-ceived from third parties

Control: net worth adjust-ment for inflationDebtorsCreditors

Suspense account total

Exchange differencesFinancial returns and dis-countsProvision recoveryProfits from the sale of plant, property and equipmentRentsMiscellaneousIndemnificationsServicesFrom previous years

Total

26

As at December 31, the Companies had various civil, commercial, administrative and labor lawsuits pending against them related to the normal course of business. The management of the Companies and their legal advisors do not believe that the results of the suits will generate significant additional liabilities that should be recorded, or, if they do, that these liabilities should not significantly affect the Companies' financial position. As such, it has not been deemed necessary at this time to create any additional provisions to cover these risks.

As at December 31, the most important financial index-es were:

25. Contingencies

26. Indexes

20112012

1.27

47.57

5.91

1.81

2.07

6.40

6.68

1.27

45.01

6.14

1.86

2.01

6.64

6.11

Liquidity indexes: Liquidity ratio (Current assets/current liabilities)Inventory days(Inventory/sales cost) * (365)

Solvency and coverage(Net worth - appreciations - net worth revaluation) / share capital

Total assets / total liabilitiesProfitability:

Net marginNet profitability / salesOperating marginOperating profits / ROA (return on assets) salesROE (Return on Equity)Net profits / (equity - year profits)

27

GRI

TABLE OF

INDICATORS

GRI

1

No. INDICATOR SCOPE PAGE 2012 COMMENTS

1.1 Statement about the relevance of sustainabilityMain impacts, risks and opportuni-ties

1. STRATEGY AND ANALYSIS

1.2

2. ORGANIZATIONAL PROFILE

See Chapter 1. From our President

See Chapter 2. About This Report - Materiality

2.1 Name of the Organization

Main brands, products and services

Operating structure of the Or-ganization, including the main divi-sions, operating entities, affiliates and joint ventures

Location of the Organization's headquarters

Number of countries in which the Organization operates and where the Organization engages in sig-nificant activities

Type of ownership and corporate structure

Markets served (including geo-graphic breakdown, end use sec-tors, and types of clients/benefi-ciaries)

Description of the reporting or-ganization

Significant changes to the Organi-zation's size, structure and owner-ship during the period covered by the report

Awards and distinctions received during the period

2.2

Sociedad Alpina Corporativo S.A

See Chapter 4. Our Organization - Main Brands and Products

2.3 See Chapter 4. Our Organization - Corporate Model.

2.4 Address: Km. 3 vía Briceño-Sopó, Sede Administrativa, Sopó, Cundinamarca, Colombia.

2.5See Chapter 4. Our Organization -Countries of Operation and Markets Supplied.

2.6 Sociedad Alpina Corporativa S.A. is a limited liability corporation.

2.7 See Chapter 4. Our Organization - Countries of Operation and Markets Supplied.

2.8 See Chapter 5. Sustainability Chal-lenges - D2. Economic Value.

2.9 See Chapter 4. Our Organization - Corporate Model.

2.10 See Chapter 4. Our Organization - Recognitions.

3. PARAMETERS OF THE REPORT

3.1 Period covered by the information included in the report

Date of the previous report(if applicable)

Timeframe for preparing reports (annual, biennial)

Contact person for questions about the report or its contents

3.2

Organizational Profile

3.3

3.4

See Chapter 2. About This Report.

Alpina 2011 Annual Sustainability Report.

Annual

www.alpina.com

46

13

19

11

11

37

19

6

27

2

No. INDICATOR SCOPE 2012 COMMENTS

3.5 6

72

3

104

20

Definition of the contents of the report

Scope of the report (countries, divi-sions, affiliates)

Limits to the scope and coverage of the report

Basis for including information about joint ventures, affiliates, rented facilities, subcontracted ac-tivities and other entities that can significantly affect comparability between periods

Techniques to measure data and bases of calculation, including hypotheses and techniques for estimates applied when collecting indicators and other information for the report

Description of the effect that restat-ing information from previous reports could have, along with the reasons that motivated this restate-ment

Significant changes relating to pre-vious periods in terms of the scope, coverage and evaluation methods applied to the report

Scope of the Report

3.6


The report covers countries where we are present: Colombia, Venezuela, Ecuador, United States and Peru.

We did not identify limits to the scope or coverage of the report.

3.7

3.8

3.9

No information was reported on joint ventures, affiliates, rented facilities, subcontracted activities.

Each table or graph with GRI indica-tors or data included in the report has comments that explain the method-ology and assumptions used for the calculation.

See Chapter 5. Sustainability Chal-lenges - D4. Environment - A2. Effi-cient management of energy use and climate change.

There were no significant changes from previous periods in terms of the scope, coverage or evaluation meth-ods used for this report.

3.10

3.11

Report Table of ContentsTable that indicates the location of the basic contents of the report

See Table of Contents.3.12

VerificationCurrent policy and practices re-lated to requesting external report verification

See Chapter 7. External Verification.

4. GOVERNANCE, COMMITMENTS AND PARTICIPATION BY STAKEHOLDERS

3.13

GovernanceThe governance structure of theOrganization, including the high-est governing committees respon-sible for tasks such as defining the strategy or supervising the Organi-zation

See Chapter 4. Our Organization - Corporate Model - Alpina Colombia Governing Bodies.

4.1

PAGE

3


4.2 Indication whether the chairperson of the highest governing body also occupies an executive post (and if so, explanation of this function within the Organization and justifi-cations)

For organizations that have a uni-tary board structure, the number of members of the highest governing body that are independent or not executives

Mechanisms for shareholders and employees to communicate recom-mendations or advice to the high-est governing body

The person who chairs the Board of Directors and the Audit Committee does not hold an executive post at Alpina Productos Alimenticios S.A.

4.3 Alpina Productos Alimenticios S.A. has a Board of Directors and a Committee of five primary members and their respective alternates. Of these, three primary members and their alternates are independent in accordance with the terms of the legislation affecting issuers of securities. The two remaining members and their alternates belong to the parent or controlling company and are not independent.

Mechanisms for shareholders are established in the bylaws and in the regulations of the Shareholders' Meeting and the Board of Directors. They are based on reporting opportunities and situations to both the Legal Representative and the Tax Inspector. There are mechanisms for employees to escalate their requests to the Company's management. "Spokespeople" are non-unionized employee representatives who not only play a major role during collective bargaining, but also represent employees with Human Resources at their respective locations. Human Resources trains employees and provides information about specific topics. Unionized workers have their respective "Claims Committees" governed by law and collective bargaining agreements. There is also an "Abuse Committee" that complies with legal requirements and internal work regulations. As for specific mechanisms to present recommendations to the highest governing body, the company's Board of Director, there is no concrete method.

4.4

4


4.5 Relationship between the compensation of the members of the highest governing body, upper management and executives and the performance of the Organization

Procedures to avoid conflicts of interest in the highest governing body

Procedures for determining the necessary training and experience for members of the highest governing body to be able to guide the Organization's economic, environmental and social strategies

Statement of the internally developed mission and values, code of conduct, and principles related to economic, social and environmental performance, and the status of their implementation

Procedures of the highest governing body to supervise the Organization's identification and management of economic, environmental and social performance including associated risks and opportunities, in addition to adherence to or compliance with international standards, codes of conduct, and principles

Procedures to evaluate the performance of the highest governing body, especially in relation to economic, social and environmental performance

The Balance Scorecard is the tool that aligns Alpinista efforts with Alpina strategy and that monitors our Organization's strategic goals.

4.6The Board of Directors is subject to its regulations and, as part of the company's Corporate Governance measures, the Code of Good Governance, and the Ethics Handbook, there are specific regulations about this body.

On an annual basis and within the official notification period for the General Shareholders' Meeting, the list(s) of candidates for the company's Board of Directors and Audit Committee are presented with the candidates' respective resumes. The candidates are evaluated on their compliance with bylaw and legal requirements. Likewise, if during the annual period it is necessary to make changes to the compositions of these bodies, candidates nominated by the shareholders are presented with their resumes for evaluation.

4.7

See Chapter 4. Our Organization - Corporate Principles - Higher Purpose and MEGA 2017.

The General Shareholders' Meeting takes place on a yearly basis.

4.8

4.9

The satisfactory performance of the members of the Board of Directors is evaluated annually. Members are given relevant feedback.

4.10

12 and 13

5


4.11 Description of how the Organization has adopted a precautionary approach or principle

Externally developed social, environmental and economic principles or programs as well as any other initiative that the Organization has signed or approved

Main associations to which the Organization belongs (such as industry associations) and/or national and international entities that the Organization supports

Commitments with External InitiativesThe Corporate Risk Management System is a structure that man-ages and continually improves the Organization's processes through a logical and systematic method to monitor, identify, analyze, manage, and communicate risk.

See Chapter 5. Sustainability Chal-lenges - D7. Social Value.

Colombia: Asociación Nal. Industriales (ANDI) (National Association of Industry), Asociación Nal. Comercio Exterior (ANALDEX) (National Foreign Trade Association), Asociación Nal. Anunciantes (ANDA) (National Advertising Association), Asociación Col. Procesadores de Leche (ASOLECHE) (Colombian Milk Processors), Consejo Emp. Col. Desarrollo Sostenible (CECODES) (Sustainable Development Business Council), CEMPRE (Recycling Association), Centro Regional Pacto Global (Regional Global Compact Center), Consejo Privado de Competitividad (Private Competition Board), Cámara Colombo Venezolana (Colombo-Venezuelan Chamber of Commerce), Cámara Colombo Suiza (Colombo-Swiss Chamber of Commerce), Cámara Colombo Americana (Colombo-American Chamber of Commerce), Cámara Colombo Ecuatoriana (Colombo-Ecuadorean Chamber of Commerce), Cámara Colombo Peruana (Colombo-Peruvian Chamber of Commerce), Fundación para el Progreso de Antioquia (PROANTIOQUIA) (Antioquia Foundation for Progress), Fundación Prodesarrollo Occidente Sabana (PRODEOCSA) (Western Sabana Development Foundation), Fundación Prodesarrollo Norte Sabana (PRODENSA) (Northern Sabana Development Foundation), FUNDESINPA (Cauca Association of Industry and Trade), Corporación Empresarial Norte del Cauca (Norte del Cauca Business Corporation), Asociación de Gestión Humana (Regionales) (regional human resource asscoiations) and Instituto Colombiano Derecho Tributario (Colombian Institute of Tax Law).Venezuela: Cámara Venezolana de Industrias Lácteas (Venezuelan Chamber of Dairy Industry), Asociación Profesional de Crédito Empresarial (Professional Association of Business Credit), Cámara Venezolana de Industrias de Alimentos (CAVIDEA) (Venezuelan Food Industry Association), Cámara Colombo Venezolana (Colombo-Venezuelan Chamber of Commerce), Cámara Venezolano Americana de Comercio e Industria (Venezuelan-American Chamber of Commerce and Industry).Ecuador: Centro de la Industria Láctea (CIL) (Dairy Industry Center), Asociación Nal. Fabricantes Alimentos y Bebidas (ANFAB) (National Association of Food and Drink Manufacturers), FEDEXPOR, Cámara de Industrias y Producción (Chamber of Industry and Production); and Cámara Ecuatoriana Colombiana (CAMECOL) (Colombo-Ecuadorean Chamber of Commerce).United States: All Star Dairy Association and International Dairy Foods Association.

4.12

4.13

99

6


4.14 31

31

6

Relationship with included stakeholders

The Organization's basis for identifying and selecting stakeholders with which to engage

Approaches adopted to include stakeholders, including the frequency of participation by stakeholder types and categories

Main concerns and topics of interest that have arisen from stakeholder participation and the way the Organization has responded to them when drafting the report

See Chapter 5. Sustainability Challenges - D1. Dialogue

4.15 See Chapter 5. Sustainability Challenges - D1. Dialogue

To ensure fluid and meaningful dialogue with our stakeholders, we use the following process: 1. Establishment of communication and involvement metrics for each stakeholder. 2. Definition of a corporate communication and involvement policy for each stakeholder. 3. Implementation of various channels designed to encourage dialogue with our stakeholders. 4. Assessment and feedback on these dialogues.


5. MANAGEMENT APPROACH AND PERFORMANCE INDICATORS

Directly generated and distributed economic value, include income, operating costs, employee compensation, donations and other community investments, undistributed benefits, and payments to providers of capital and governments

Economic Performance Indicators Economic Performance

Total

4.16

4.17

EC1

Participation by Interest Group

This indicator was calculated as follows in 2012:- Direct economic value created (net sales + other financial income + profit from the sale of assets): Alpina S.A. in MM COP1,424,141 / Alpina C.A. in thousands of BsF233,154 / Alpina Ecuador S.A. in thousands of US $62,808 / Alpina Foods Inc. in thousands of US$5,771 / Alpina Perú SAC in thousands of US$1,087.- Direct economic value distributed (operating costs + employee expenses + social contributions + taxes + donations):Alpina S.A. in MM COP1,019,570 / Alpina C.A. in thousands of BsF156,584 / Alpina Ecuador S.A. in thousands of US $54,073 / Alpina Foods Inc. in thousands of US$10,814 / Alpina Perú SAC in thousands of US$931.

7


EC3 Coverage of the Organization's obligations for social benefit programs

Significant financial support received from governments

Alpina complies with the law in the countries in which it operates and enrolls Alpinistas in government-compliant pension plans:Colombia:-Prima media - Social Security Institute-Ahorro individual - Private pension fundVenezuela: Pensions y salud - Venezuelan Social Security InstituteEcuador: Ecuadorean Social Security InstituteUnited States: Our benefit package includes a 401(k) plan through which the Company contributes a portion for each employee to increase his or her savings.Peru: The law states that each employee is 100% responsible for contributions to his or her pension.

Total

TotalEC4

Market Presence

EC5 Percentage difference between the standard starting salary and the minimum local salary in places where major operations take place

Policy, practices and proportion of expense corresponding to local providers in places where major operations take place

Procedures to hire local personnel and percentage of upper management coming from the local area in places where major operations take place

Colombia: 18.29%Venezuela: 78.47% (an increase took place in November following collective bargaining)Ecuador: 0.33%Peru: There are no employees at the operational level.

Total

See Chapter 5. Sustainability Challenges - D6. Sustainable Business.

Colombia: 96% of the upper management are Colombian citizens.Venezuela: 83% of the upper management are Venezuelan citizens. Ecuador: 90% of the upper management are Ecuadorean citizens.

Total

Total

EC6

EC7

Benefit from investments in real fixed productive assets: COP 1,998 MM and an unused balance at the preferential Finagro rate of COP 9,200 MM.

Financial consequences, other opportunities and risks for Organization activities due to climate change

See Chapter 5. Sustainability Challenges - D4. Environment - A2. Efficient management of energy use and climate change.

PartialEC2 72

89

8


EC8 Development and impact of infrastructure investment and services provided primarily for public benefit through commercial, pro bono, or in kind commitments

Understanding and description of significant indirect economic impact and the scope of said impact

Indirect Economic ImpactA donation worth COP 1,561 MM was made to Fundación Alpina.COP 534.3 MM in donations were made in Colombia, approximately BsFs 750,000 in Venezuela, and USD 28,000 in Ecuador.See Chapter 5. Sustainability Challenges - D7. Social Value - Volunteering.

Total

The number of jobs created by dis-tributors is 4,179, broken down in each country as follows: Colombia: 3,079Venezuela: 964Ecuador: 136

EC9 Total

MaterialsMaterials used by weight and volume

Percentage of materials used that are recovered materials

EN1 See Chapter 5. Sustainability Challenges - D6. Sustainable Business - A1. Strengthening the Businesses of our Agricultural Suppliers.

Total

EN2 Colombia: In 2012, 100% of the material used to manufacture storage crates was recycled. In total, 804 tons of material were used.Venezuela: Damaged storage crates and pallets were sold for recycling purposes to reduce energy consumption and greenhouse gas emissions. Ecuador: Eight thousand (8,000) storage crates made from 100% recycled material were bought from a Colombian provider, as buckets in Ecuador are generally made from unrecycled material. This equaled 18.8 tons of material.

Partial

Total

Total

Energy

Direct energy consumption broken down by source

Indirect energy consumption broken down by source



EN3

EN4

Economic Performance Indicators

102

89

72

72

9


EN5 Energy savings due to conservation and efficiency improvements

Initiatives to provide products and services that are energy-efficient or based on renewable energies, and reductions in energy consumption as a result of these initiatives

Initiatives to reduce indirect energy consumption and the reductions achieved through these initiatives

Non-material


This indicator is not relevant to Al-pina's operations.

EN6

This indicator is not relevant to Al-pina's operations.

EN7

Water

Total water collection by source

Water sources that have been significantly affected by water collection

Percentage and total volume of water recycled and reused

See Chapter 5. Sustainability Chal-lenges - D4. Environment - A1. Effi-cient Water Management.

See Chapter 5. Sustainability Chal-lenges - D4. Environment - A1. Effi-cient Water Management.

Non-material

Partial

Total

Total

EN8

EN9

EN10 Not reported.

This indicator has not been calculated. There are plans to report it in subse-quent reports with the water footprint measurement.

Biodiversity

Description of lands/water adjacent to or located within protected natural areas or unprotected areas with a high degree of biodiversity.Location and size of lands owned, rented or managed with significant biodiversity outside of protected areas

EN11 Non-material

The plants or their areas of influence are not located in protected or unprotected natural spaces with a high degree of biodiversity. The impact of activities on the agricultural food chain has not yet been examined.

Description of the most significant impacts on the biodiversity in protected natural areas or unprotected areas with a high degree of biodiversity from activities, products and services in protected areas and unprotected areas with significant biodiversity value

Non-material


EN12

72

69

69

10


Protected or restored habitats

Strategies and actions implemented or planned to manage impacts on biodiversity

Number of species broken down by risk of extinction, inclusion on the IUCN, and inclusion on national lists whose habitats are in areas affected by operations and the degree of threat to the species


Non-material

EN13


EN14


Non-material

Non-material

Emissions, Run-Off and Waste

EN15

Total direct and indirect greenhouse gas emissions by weight

Other indirect greenhouse gas emissions by weight

Initiatives to reduce greenhouse gas emissions and reductions achieved


Scope 3 of the carbon footprint methodology was not measured. This will be done in future studies for Colombia, Venezuela, and Ecuador.

Not reported.

Total

The first phase of the project to partially replace diesel fuel with biogas in the boiler of the water treatment plant is currently underway. It enabled us to consume approximately 35,275 gallons of diesel fuel in 2012, a reduction in our carbon footprint of 3,179 tons of carbon equivalent. This was a 7.9% reduction in the Sopó plant's carbon footprint as a whole, which in 2011 was 40,087 tons of carbon equivalent per year. It also represents a 4.0% reduction in Alpina's carbon footprint in all of Colombia, which was estimated to be 79,025 tons of carbon equivalent per year. Furthermore, this reduction represents cost savings of fuel worth COP 269,736,284.The estimated reduction in the carbon footprint associated with Phase 1 of

EN16

EN17

EN18 Partial

72

11


Emissions of ozone-depleting substances, by weight

NOx, SOx and other significant airborne emissions by type and weight

Total waste water discharge by type and destination

Total weight of processed waste by type and treatment method

Total number and volume of the most significant accidental spills

Weight of waste transported, imported, exported or treated that is considered dangerous according to the Basel Convention and Appendixes I, II, III and VIII and the percentage of waste transported internationally

Identification, size, state of protection and biodiversity value of water resources and related habitats significantly affected by water spills or runoff produced by the reporting organization

EN19

the Biogas Project is based on the average replacement of diesel fuel energy consumption following the start-up of biogas boiler operations. Meters are being installed on the biogas generation and consumption lines; it is hoped that these will produce real data for 2013 and subsequent years.

Furthermore, we are changing the type of fuel for the Entrerríos and Popayán boilers, transitioning from LPG to natural gas, which will correspond to a theoretical 16% reduction in carbon equivalent emissions per unit of energy consumed by the boilers.



Partial

PartialEN20

See Chapter 5. Sustainability Challenges - D4. Environment - A1. Efficient Water Management.

TotalEN21

See Chapter 5. Sustainability Challenges - D4. Environment - A3. Efficient Management of Materials and Waste.

EN22 Partial

There were no significant spills.TotalEN23

At this time, Alpina does not consider this indicator to be relevant.

Non-material

EN24

EN25 No water resources have been significantly affected by spills.

Total

72

72

69

75

12


Initiatives to mitigate the environmental impact of products and services and the degree by which this impact has been reduced

Percentage of products sold and packaging materials recovered at the end of their useful life by

Products and ServicesColombia: We developed the Hydrogen Plan, which saved COP 13,943 MM through improvement projects, negotiations, and changes to the technical specifications of certain packages.We continued with the packaging reuse model that makes additional uses possible. We were able to use the same box up to five times, which had an economic and environmental impact.Venezuela: We carried out a project with a provider of 330 g, 750 g, and 1,600 g yogurt bottles to reduce the amount of plastic used in the manufacturing process, namely 9 g for each 1,600 g bottle, 7 g for each 750 g bottle, and 4 g for each 33 g bottle. These results reduced the impact of this material on the environment.Ecuador: We developed the Oxygen plan and, through negotiations, product optimization, and process improvement, saved USD 412,769.We reduced the weights of the 1,750 g, 1,000 g and 180 g Alpina bottles, a 5.4% reduction of the packages' weight or a 13,000 kg reduction of polyethylene.

TotalEN26

See Chapter 5. Sustainability Challenges - D4. Environment - A3. Efficient Management of Materials and Waste.

EN27

ComplianceCost of significant fines and number of non-monetary penalties for non-compliance with environmental regulations

There were no fines or penalties in 2012 for non-compliance with environmental regulations.

Total

Total

Transportation

EN28

Significant environmental impacts from the transportation of products and other goods and materials used for the Organization's activities, as well as staff transportation

EN29 Total The "Roll Out" fleet occupancy project was implemented, which improved the efficiency of vehicular loads by reducing the number of trips needed to transport products from the national distribution center in Sopó to Alpina's various regional distribution centers in Colombia, located in major cities and a few smaller cities. This

75

13


Breakdown by type of all environmental expenses and

EN30 Total

product saved 331,849 km of trips in 2012, which corresponded to 50,280 gallons of diesel fuel saved and 505.7 tons of CO2 equivalent not emitted.

GeneralSee Chapter 5. Sustainability Challenges - D4. Environment.

Social Performance Indicators: Labor Practices and Dignified Work Employment

Breakdown of all workers by type of job, contract, and region

Total number of employees and average rotation of employees broken down by age group, sex and region

Social benefits for full-time employees that are not offered to temporary or part-time employees, broken down by main activity

See Chapter 5. Sustainability Challenges - D3. Alpinistas - Characterization of the Alpinistas

TotalLA1

Internal rotation: 5.51% (includes all countries)External rotation: 12.2% (includes all countries)

For more information, see Chapter 5. Sustainability Challenges - D3. Alpinistas

TotalLA2

In Colombia, the benefits of the Collective Agreement are classified as educational assistance, funeral benefits, health benefits, transportation benefits and additional Agreement benefits.In Venezuela, the benefits of the Collective Agreement are classified as educational assistance, funeral benefits, health benefits, athletic benefits, family benefits, overtime, and vacations.In Ecuador, the benefits are classified as health, food, and loan assistance.In the United States, benefits are classified as pension assistance, disability assistance, vacations, and cellular phone use.In the Peru, benefits are classified as health assistance, disability assistance, family benefits, and cellular phone

TotalLA3

Company / Worker RelationsPercentage of employees covered by a collective agreement

Minimum period of advance notification about organizational changes, including whether these notifications are defined in the collective agreements.

LA4 Total See Chapter 5. Sustainability Challenges - D3. Alpinistas

Although the Collective Agreement and Alpina's applicable conventions do not define warnings or formal guidelines about event notification, the Organization has developed good practices for informing all employees

LA5 Total

69

49

53

54

14

about organizational changes in a timely manner. Channels include the intranet, mass media, audiovisual communications, posters and magazines, informational meetings held by team leaders, and open channels with management, as well as support structures to resolve concerns and receive comments.


Total percentage of workers represented on joint management-employee health and safety committees established to help oversee and guide occupational health and safety programs

Rates of absenteeism, occupational illness, lost days and number of workplace fatalities by region

Education, training, guidance, prevention and risk control programs about serious illnesses available for workers, their families, or community members

Health and safety issues covered in formal agreements with unions

Occupational Health and SafetyLA6 Colombia: Nineteen (19) Health and

Safety Committees made up of 136 people from different plants, locations and/or collectives, representing 3.4% of the Alpinistas with direct contracts.Venezuela: One (1) Health and Safety Committee made up of 6 people or 3.46%.Ecuador: Five (5) Health and Safety Committees made up of 60 people or 9%.

Total

See Chapter 5. Sustainability Challenges - D3. Alpinistas - A1. Permanent improvement of the work environment - Occupational health and wellbeing.

TotalLA7

See Chapter 5. Sustainability Challenges - D3. Alpinistas - A1. Permanent improvement of the work environment - Occupational health and wellbeing.

Total

The company observes, complies with, and implements all applicable health and safety regulations for all Alpinistas.

Total

Training and Education

LA8

LA9

Average training hours per year per employee broken down by employee type

Skill management and continuing education programs that enhance the employability of workers and help them at the end of their professional careers

For more information, see Chapter 5. Sustainability Challenges - A1. Permanent improvement of the work environment - Human Resources.

LA10 Total

For more information, see Chapter 5. Sustainability Challenges - A1. Permanent improvement of the work environment - Human Resources.

TotalLA11

61

61

60

60

15


Percentage of employees that receive regular performance and professional development evaluations.

Voices (360°) evaluations have been carried out for approximately 500

TotalLA12

Diversity and Opportunity

Composition of governing bodies and workforce broken down by sex, age group, ethnicity, and other diversity indicators

Ratio of base salary for men to base salary for women, broken down by professional category

Total Colombia- Management -> Men: 94 and Women: 46- Administration -> Men: 422 and Women: 435Venezuela- Management -> Men: 5 and Women: 1- Administration -> Men: 29 and Women: 21Ecuador- Management -> Men: 10 and Women: 0- Administration -> Men: 55 and Women: 32United States- Management -> Men: 9 and Women: 4- Administration -> Men: 8 and Women: 11Peru- Management -> Men: 1- Administration -> Men: 2

LA13

A study validated the difference in salaries between men and women in the same category and did not find significant differences.

Total

Social Performance Indicators: Human Rights

LA14

Management PracticesPercentage and total number of significant investment agreements that include clauses on human rights or that have been the object of human rights analysis

Percentage of main distributors or contractors that have been the object of human rights analysis and measures taken as a result

Total training hours for employees on policies and procedures related to those aspects of human rights relevant to their activities, including the percentage of employees trained

Total During the period covered by this Report, no human rights clauses were included in the agreements.

HR1

Validation of 50 providers' compliance with the 10 principles of the Global Compact was begun. This was presented as a case study at the Colombia Global Compact Congress held on September 3.

TotalHR2

HR3 In 2012, Alpina organized sessions related to labor relations that covered various topics relevant to employee rights through a corporate orientation program and employee group sessions for a total of 220 hours for more than 550 employees, with 100%

Total

16


Total number of discrimination events and measures taken

Non-DiscriminationIn 2012, there were no incidents of labor discrimination and, as such, corrective actions were not taken.

Total

participation from our new Alpinistas.

HR4

Freedom of Association

Company activities in which the right to freedom of association and the right to sign collective agreements entail significant risks, and measures taken to protect these rights

In 2012, collective bargaining agreements were renewed, covering more than 3,600 Alpina Colombia employees. Two collective agreements were signed with the Sintralpina and Sintraimagra unions, covering approximately 120 employees. All collective contracts essentially guarantee fairness in their economic, salary, regulatory contents.

Total

Child Labor

HR5

HR6 Activities that may entail the risk of child labor and measures taken to help eliminate it

Alpina's policy is to not hire children on its direct staff and to ensure that contractors do not do it, either.

Total

Forced Labor

HR7 Operations identified that entail a significant risk of incidents of forced or involuntarily labor and measures taken to eliminate it

Alpina's hiring policies and Internal Work Regulations guarantee that there are no incidents of forced labor.

Total

Safety Practices

Percentage of safety personnel that have been trained on the Organization's human rights policies and procedures as they relate their activities

One hundred percent (100%) of the Asset and People Protection Division were trained by the company operating this service on issues related to human rights.

TotalHR8

Indigenous Peoples' Rights

Total number of incidents related to violations of indigenous peoples' rights and measures taken

No incidents were reported during 2012. Alpina operates in an area of indigenous settlements in Cauca.

TotalHR9

17


Type, scope and effectiveness of programs and practices to evaluate and manage the impact of operations on communities, including the entry, operation, and exit of the company

See Chapter 5. Sustainability Challenges - D7. Social Value

Total

Social Performance Indicators CommunitySO1

Corruption

Percentage and total number of business units analyzed in terms of risks related to corruption

Percentage of employees trained on the Organization's anti-corruption policies and procedures

Measures taken in response to incidents of corruption

In 2012, an assessment was carried out with our auditor (PricewaterhouseCoopers) of the current situation of Alpina's Fraud Prevention and Response Program. The strength of the Organization's structures and the existing tools for Alpina to prevent and respond to fraud were evaluated. The assessment identified breaches in three aspects of the operating model, technology, processes and organization from a general perspective of strengthening Alpina's ethics culture. These aspects will be taken into consideration during risk evaluations.

TotalSO2

See Chapter 4. Our Organization - Ethics Hotline.

See Chapter 4. Our Organization - Ethics Hotline.

SO3

SO4

Total

Total

Public Policy

Position on public policy, involvement therein, and lobbying activities

- Construction of thematic agendas with government entities that allow for the management of issues related to Alpina and the government from their respective roles.- Active participation in the construction of public policies related to Alpina's business and its sustainability strategy.- Development of relationships pursuant to strict ethics and transparency parameters and in accordance with the regulations that govern these relationships in the countries where we operate.- Characterization and monitoring of Alpina's institutional and regulatory environment.- Documentation of interactions with

TotalSO5

99

22

22

18


Total value of financial and in kind contributions to political parties or related institutions, by country

Under no circumstance is the involvement of our Organization intended to intervene in, take positions on, or make public declarations about political matters or to contribute ideologically or financially to campaigns or candidates involved in them.

Total

government officials, management and follow-up of commitments, and timely response to said commitments.

SO6

Anti-Competitive BehaviorTotal number of lawsuits for reasons caused by monopolistic practices and practices that inhibit free competition, and their results.

Suits filed against the Company by Compagnie Gervais Danone and Unilever are in progress. These are expected to be favorably resolved in 2013.

TotalSO7

Regulatory Compliance

Monetary value of significant fines and penalties and total number of non-monetary fines arising from non-compliance with laws and regulations

There were no fines or penalties.TotalSO8

Social Performance Indicators: Product Responsibility Customer Health and Safety

Life cycle phases of products and services in which they are evaluated for improvements, their impact on customer health and safety, and the percentage of significant product and service categories subject to these evaluations

Total number of incidents arising from non-compliance with legal regulations or voluntary codes related to the impact of products and services on health and safety during their life cycle, broken down by the results of said incidents

We continued to implement ISO standard 22000 and carried out activities related to the evaluation of safety risks.

TotalPR1

See A Journey to Sustainability - D1. Dialogue.

TotalPR2 30

19


Types of information about products and services that are required by current procedures and regulations, and percentage of products and services subject to these information requirements

Total number of incidents of non-compliance with regulations and voluntary codes related to product and service information and labeling, broken down by the results of these incidents

Practices related to client satisfaction, including the results of client satisfaction studies

Product and Service LabelingColombia: Various technical regulations were modified and observations were sent to the authorities, including: Resolution 2310 Dairy products; Decree 616 Unprocessed and processed milk; Resolution 7992 Processed fruits; Resolution 11488 Infant foods; Resolution 126 Oils and Fats; Decree 574 Salt; and Draft Resolutions on Contaminants in food, Fortified food, Dried fruits, Dried vegetables, Processed vegetables, Lists of additives, and Flavoring agents. Alpina also completed the survey on sodium content in several food categories as part of the Ministry of Health and Social Protection's program to reduce the amount of sodium in food.Venezuela: There were no initiatives to draft or modify guidelines.Ecuador: Observations were sent for the bill on school cafeterias and advertisements about beverages made from fermented milk and whey.

TotalPR3

In Colombia, there was a case of an alleged label violation for Aplinito Petito Suisse filed in 2009 for failure to properly identify the vanilla flavoring agent. A payment of COP 9,445,000 was made.

TotalPR4

The consolidated TSF service level examining the satisfaction of customers/consumers when calling the customer service line was 89%. Wait times for service were decreased, which had a drastic impact on service satisfaction.

Total

Marketing CommunicationsPrograms to comply with laws or adhere to standards and voluntary codes related to marketing communications, including advertising, other promotional activities, and sponsorships

PR6 Total The Advertising Committee's goal is to ensure that Alpina's consumer communications (advertising, labels) comply with current legal, nutritional, and technical quality requirements. During the year, 25 Advertising Committee meetings were held.

PR5

20


Total number of incidents resulting from non-compliance with regulations related to marketing communications, including publicity, promotion and sponsorship, broken down by the results of said incidents

In 2012, Alpina had to pay COP 17,001,000 worth of fines for the following case:

- Violation of the Consumer Protection Guidelines by breaching commercial advertising and information regulations with the Christmas stuffed animal campaign carried out with Olímpica by not disclosing complete information about the promotional activity.

TotalPR7

Customer ProtectionTotal number of founded complaints related to privacy and the disclosure of personal customer data

No complaints were made. TotalPR8

Regulatory Compliance

Value of significant fines resulting from non-compliance related to the supply and use of the Organization's products and services

There were no fines.TotalPR9

6. FOOD SECTOR SUPPLEMENT Supply

Percentage of supplies bought from providers that adhere to the Organization's supply policy

Percentage of the volume of purchased supplies that is certified by international responsible production standards and others, broken down by standard if relevant

One hundred percent (100%) of our suppliers adhere to our established supply policies.

TotalFPSS1

We continued certifying our industrial suppliers and expect to finish this process in 2013.

FPSS2 Partial

Company / Worker Relations

Percentage of work time lost due to industrial disputes, strikes or closures by country

There were no work stoppages or plant closures

TotalFPSS3

Accessible and Healthy FoodType, application and effectiveness of programs and practices that facilitate access to economic and healthy foods and wellbeing in vulnerable communities.

See Chapter 5. Sustainability Challenges - D5. Nutrition.

TotalFPSS4 81

21

No. INDICATOR SCOPE 2012 COMMENTS

Percentage of volume produced at plants certified by an independent third party according to international food safety standards

Percentage of food products sold that have a lower content of saturated fats, trans/hydrogenized fats, sodium, and added sugar

Percentage of food products sold that have a lower content of preservatives or a higher content of fiber, vitamins, minerals or phytochemicals

Customer Health and SafetySee Chapter 4. Our Organization - Production and Plants - Certifications - Percentage of Production Covered by Certifications from External Entities (see HACCP).

TotalFPSS5

a. Low-fat products vs. total sales: - Colombia: 31.7%- Venezuela: 25.6%- Ecuador: 5.1%- United States: 11.4%a. Low-sugar products vs. total sales:- Colombia: 7.5%- Venezuela: 14.3%- Ecuador: 1.9%- United States: 7.2%

TotalFPSS6

a. Products with preservatives or greater fiber content vs. total sales:- Colombia: 10.8%- Venezuela: 9.5%- Ecuador: 27.4%- United States: 53.1%a. Products with preservatives or greater vitamin and mineral content vs. total sales:- Colombia: 24.9%- Venezuela: 26.6%- Ecuador: 19.7%- United States: 8.4%

FPSS7

Product and Service LabelingPolicies and practices to communicate ingredients, nutritional information, and additives and their function beyond the legal requirements.

At Alpina, we continue to be committed to providing responsible information to consumers about the nutritional characteristics and properties of our products.Nutritional label:- Colombia: An external laboratory verified the nutritional content of products for which nutritional charts are not necessary because no statements about nutrients or health are made. Packages were corrected for products in the cheese, dairy beverages, refreshing beverages, and baby categories for which there were significant differences.- Venezuela, Ecuador and Peru: All labels are based on external analyses.

Total

TotalFPSS8

PAGE

16

22


Percentage and total number of animals raised and/or processed by species and breed

Policies and products by species and breed related to physical alterations and anesthesia use

Percentage and total number of animals raised and/or processed by species and breed by housing type

Percentage of animals by species and breed subject to regular antibiotic, anti-inflammatory, hormone and/or growth treatments

Total number of incidents of non-compliance with laws and regulations, and compliance with voluntary standards related to the transport, management, and slaughter of live animals (land and water animals)

Animal HealthAnimals by age:- Females >3 years: 69,252- Females 2-3 years: 15,845- Females 1-2 years: 16,997- Calves >1 year: 18,962

TotalFPSS9

This topic is not relevant to Alpina's operations as anesthesia practices are set at each farm and applied according to the supervising veterinarian. Surgeries are minimal and generally only involve minor procedures such as supernumerary teat removals or dehorning when the animal is young.

FPSS10

Nearly 100% of the cows in Colombia, Venezuela and Ecuador are raised on ranches thanks to these countries' tropical climates.

Total

Total

Alpina offers farm training programs about proper treatment management with recommendations on usage, dose, route of administration, and respecting the required treatment holidays described on the label of each pharmacological product.

Partial

FPSS11

FPSS12

Total Alpina does not transport animals. Animal transport is carried out by each farmer with authorization from ICA (Instituto Colombiano Agropecuardio, "Colombian Agricultural Institute"), which certifies that the animals meet all health requirements.

FPSS13

A1. E�ective Management and Protection of our Reputation

A1. Constant Improvement of the Work Environment

A2. Development of Key Talent

A1. E�cient Water Management.

A2. E�cient Management of Energy Use and Climate Change.

A3. E�cient Management of Materials and Waste.

A1. Ensuring the Greatest Functional and Nutritional Value possible for the Product Portfolio

A2. Developing Products for Specific Consumption Times and Segments

A4. Reduction of Sugar,

Challenge 1Dialogue

Challenge 2Economic Value

Challenge 3Alpinistas

Challenge 4Environment

Challenge 5Nutrition

-Set our Global Reputation Index goals through 2016-Prioritize the stakeholders that will be strengthened through dialogue platforms

-Introduce a new methodological proposal for the economic, social and environmental evaluation of projects

-Set our Cultural Environment and Work Environment Index goals through 2016-Define which positions are critical for the Organization, along with the concept of Key Talent

-Complete the process of measuring Alpina's carbon footprint in Colombia-Measure Alpina's carbon footprint in Ecuador and Venezuela


-Begin an in-depth assessment of the packaging used in Alpina's portfolio

-Develop functional products-Formalize the assessment of the portfolio's nutritional profiles

-Develop products for the base of the socioeconomic pyramid-Define specific target population groups for portfolio development

-Define for which key products sugars, fats, sodium and carbohydrates should be reduced

CHAPTER ISSUE 2013+ CHALLENGES

Challenge 6Sustainable Business

Challenge 7Social Value

Fat, Sodium and Carbohydrates in Key Products.

A1. Strengthening the Businesses of ourAgricultural Suppliers

A2. Strengthening the Businesses of our Industrial Suppliers

A4. Strengthening the Businesses of our Distributors

-Develop and implement the training and evaluation model for agricultural suppliers

-Advance with the implementation of the training and evaluation model for industrial suppliers

-Design a model for standardizing distributors' business

-Launch the first ConSentido product in Bogotá and Medellín-Explore opportunities for expanding the product portfolio and its geographic reach-Continue developing definitions for the creation of social value by the company

1

A1. E�ective Management and Protection of our Reputation

A1. Constant Improvement of the Work Environment

A2. Development of Key Talent

A1. E�cient Water Management.

A2. E�cient Management of Energy Use and Climate Change.

A3. E�cient Management of Materials and Waste.

A1. Ensuring the Greatest Functional and Nutritional Value possible for the Product Portfolio

A2. Developing Products for Specific Consumption Times and Segments

A4. Reduction of Sugar,

Challenge 1Dialogue

Challenge 2Economic Value

Challenge 3Alpinistas

Challenge 4Environment

Challenge 5Nutrition

-Set our Global Reputation Index goals through 2016-Prioritize the stakeholders that will be strengthened through dialogue platforms

-Introduce a new methodological proposal for the economic, social and environmental evaluation of projects

-Set our Cultural Environment and Work Environment Index goals through 2016-Define which positions are critical for the Organization, along with the concept of Key Talent



-Begin an in-depth assessment of the packaging used in Alpina's portfolio

-Develop functional products-Formalize the assessment of the portfolio's nutritional profiles

-Develop products for the base of the socioeconomic pyramid-Define specific target population groups for portfolio development

-Define for which key products sugars, fats, sodium and carbohydrates should be reduced

CHAPTER ISSUE 2013+ CHALLENGES

Challenge 6Sustainable Business

Challenge 7Social Value

Fat, Sodium and Carbohydrates in Key Products.

A1. Strengthening the Businesses of ourAgricultural Suppliers

A2. Strengthening the Businesses of our Industrial Suppliers

A4. Strengthening the Businesses of our Distributors

-Develop and implement the training and evaluation model for agricultural suppliers

-Advance with the implementation of the training and evaluation model for industrial suppliers

-Design a model for standardizing distributors' business

-Launch the first ConSentido product in Bogotá and Medellín-Explore opportunities for expanding the product portfolio and its geographic reach-Continue developing definitions for the creation of social value by the company

2

Documents

Corporate Sustainability report