DALLANT'S CSR REPORT 2013

CORPORATE SOCIALRESPONSIBILITY REPORT

TABLE OF CONTENTS

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INTRODUCTION

STRATEGY AND ANALYSIS 3

REPORT CONTENT 4 ⁄ Report Profile ⁄ Scope and Coverage of the Report

ABOUT DALLANT 6

HISTORICAL BACKGROUND 8

RESULTS AND HIGHLIGHTED FIGURES FROM 2013 10

FUTURE CHALLENGES 12

OUR MODEL AND POLICY OF SUSTAINABILITY

OUR MODEL OF SUSTAINABILITY 14

IDENTIFICATION AND PARTICIPATION OF OUR INTEREST GROUPS 16

COMMITMENTS 18 ⁄ Mission, Principles and Values ⁄ Code of Ethics ⁄ Social Action

MATERIALITY 23 ⁄ People ⁄ Operations ⁄ R&D

USEFUL INFORMATION

GLOSSARY 37

VALIDATIONS 37

PERFORMANCE INDICATORS 38

CORPORATE SOCIAL RESPONSIBILITY REPORT 2013. DALLANT S.A. 3

STRATEGY AND ANALYSIS

I have the pleasure of presenting you with our 2013 Social Res-ponsibility Report, where we make our business model and our main areas of work public, in search of sustainable develop-ment of both our organisation and our environment.

We will present an account of our activity, in an open and transparent manner, establishing an open and ongoing dia-logue with the interest groups that we interact with and to whom we issue this document.

The year 2013 has been a great step forward on our path towards more sustainable growth, with very relevant invest-ment efforts that were carried out in multiple areas. The am-bitious renovation of the production facilities at our head-quarters in Sant Feliu de Llobregat (Barcelona) was especia-lly noteworthy, as well as the start of the new ERP manage-ment system project, which will enable us to fully integrate the group’s companies and optimise both our commercial and in-dustrial operations.

We would like to emphasise the human and social components that are involved in our business approach. People are our reason for existence and the key to our success throughout our over 60 years of trajectory. We are responsible for the people that make up Dallant’s ecosystem and we therefore endeavour to invest in them, not only with respect to training, but also by updating the processes and facilities with the aim of improved occupational safety and prevention of occupational risks.

Western markets are still embroiled in a persistent econo-mic recession, which leads to a generalised crisis of values. When faced with this situation, business organisations must

reflect and take action to defend the overall state of welfare. Consequently, we must be persistent in our firm determination to continue implementing the best business management prac-tices in all areas of our activity, with the ultimate goal of ensuring the good health of our company, our suppliers and our clients. THE ESTABLISHMENT OF STABLE AND RESPECTFUL RELA-TIONSHIPS WITH THE PEOPLE AND THE ENVIRONMENT IS, IN OUR OPINION, THE ONLY WAY TO FACE FUTURE CHALLEN-GES AND ENSURE SUSTAINABLE GROWTH IN THE MEDIUM AND LONG TERM.

Small and medium-sized enterprises like us are an essential part of the social and economic network, as they contribute to the backbone of our society, thanks to their contribution of stability and security. Therefore we find it incredibly mo-tivating to continue down this path in search of the best way to integrate Corporate Social Responsibility policies within the management systems.

We are fully aware of the impact that our activity has on all levels: social, economic and environmental. We want to be consistent and we have a feeling of responsibility, therefore, we have the obligation to continue to promote attitudes, actions and com-mitments, both those that are individual and collective, to ensure long-term success and help to build a more humane society, both for our generation and for those that will come after us.

Jaime Pérez Costa Executive President

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People are our reason for existence and the key to our success throughout our over 60 years of trajectory.


Scope and Coverage of the ReportThe coverage of the report is Dallant S.A. in its entire area of action, as well as what it confers to the company’s facilities. This memory has no limitations with respect to its scope.

The techniques of data measurement and the basis for performing the calcula-tions, including the hypotheses and underlying techniques, are those that form part of our standardised procedures.

Our sources of information are those that have been derived from our manage-ment system. Likewise, some specific instruments have been generated in order to further elaborate this report.

Dallant promises its interest groups external verification of the report on the matters that are specific to Dallant, according to the criteria established by the company’s management. The frequency of the report is annual.

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Report ProfileThis is the Corporate Social Responsibility Report of Dallant S.A. which was ela-borated according to the criteria set forth by Global Reporting Initiative (GRI).

This document, which corresponds to the year 2013, has been created in ac-cordance with version 3.1 of the G3 Guide for the elaboration of sustainability reports from the Global Reporting Initiative (GRI) organisation. The date of the most recent former report is September of 2013, which corresponds to the year 2012. The reporting cycle is annual.

All aspects that are relevant to the sustainability of our organisation are reflec-ted in this report, as well as the indicators that are established in the aforemen-tioned guide and others that have been created based on the characteristics of our organisation and the expectations of the groups of interest.

Mr. Alejandro Pérez, Managing Director, certifies the veracity of the data presen-ted in this document.

This report has been completed according to the criteria of a level C report.

More information about GRI: www.globalreporting.org. For more information about our report you can visit us at: http://www.dallant.com/en/company/corporate-social-responsibility/ or contact: Joan Manel Torres, [email protected]

7CORPORATE SOCIAL RESPONSIBILITY REPORT 2013. DALLANT S.A.

EXPERIENCE AND SENSITIVITY

MOLEVALocated in the province of Lleida, one of the best European horticultu-ral areas, we are responsible for the processing of fruit juices, fruit by-pro-ducts, flavours and specialities.

CÍTRICOS DE MURCIAWe produce the highest-quality juices and by-products of citrus fruits in the heart of the Murcian orchard.

DALLANT MAGHREBIn order to be able to respond to our clients in the most efficient way possi-ble and develop business in countries that are south of the Mediterranean and the Atlantic coast of Africa, we have production facilities and a com-mercial office in Casablanca.

DALLANT MIDDLE EASTAt the Dallant Middle East office, located in Cairo, Egypt we provide our current and potential clients with excellent commercial and technical service.

DALLANT EURASIALocated in Istanbul, Turkey, is Dallant’s latest effort in its strategy of interna-tional expansion in emerging markets. Dallant Eurasia tends to the needs of manufacturers and consumers in Turkey, as well as those in the neigh-bouring countries of the Caucasus and Caspian, offering tailor-made solu-tions that are at the same time creati-ve and high-tech.

DALLANT CARIBBEANThe subsidiary of Dallant Caribbean serves as a platform to respond to our clients from the South American continent.

HEADQUARTERS: SANT FELIU DE LLOBREGAT, BARCELONA Dallant owns the following subsidiary companies that are based on an adaptive and multi-premise model of organisation to therefore provide specialised products as well as a service that is close to the territory where we operate.

ABOUTDALLANT

DEVELOPMENT AND CUSTOMISED

PRODUCTS

NATURAL AND HEALTHY INGREDIENTS

INNOVATION AND CREATIVITY

Dallant is an organisation that researches, develops, pro-duces and markets flavourings and ingredients for the food industry.

We distinguish ourselves by offering a personalised rela-tionship and business-to-business solutions in the form of specific products that are tailored to each client, all from the point of view of thinking globally and acting locally.

Innovation and creativity are combined with our extensive scientific know-how and the latest technology, in order to achieve success in every project.

Our highly-specialised technical teams of research and application are fully involved in each development towards creating new and delicious flavours that allow the consumer to enjoy a great sensory experience.

SCIENTIFIC AND TECHNOLOGICAL

BACKGROUND


1997 Development of dairy bases for alcoholic drinks

1997 ISO 9001 Certification

2009 Enhancing of the emulsions’ portfolio

2008 Implementation in the Middle East

2010 Start-up of the new investment plan in Sant Feliu

2012 FSSC:22000 Certification

2012 Implementation in Turkey - Eurasia

2013 Obtainment of the Halal certificate for some products

1999 Industrialisation of cream fillings for industrial bakeries

1999 Obtainment of the Kosher certificate for some products

2000 Implementation in Maghreb

2007 Start of the new industrial investment plan of Moleva

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1950 Establishment of ‘Especialidades Dallant’ in Barcelona

1963 Inauguration of the Headquarters in Sant Feliu de Llobregat

1966 Start of commercial activities at the international level

1974 Development of micro-encapsulated flavours

1987 Creation of Cítricos de Murcia S.A.

1990 Creation of compounds for soft drinks

1991 Integration of Moleva S.A., juices and concentrates

1996 Incorporation of Ingredients S.A. as a savoury foods business unit

HISTORICAL BACKGROUND 1950 - 2014


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ECONOMY

ENVIROMENT

PEOPLE

HIGHLIGHTED FIGURES FROM 2013

SALESSATISFACTION AND COMMITMENT

WATER CONSUMPTION SOLVENCY


In line with the objectives that were established in 2013, the following actions have been carried out:

• The formation of our own joint occupational risks prevention service that is responsible for prevention in all of the companies that make up Dallant.

• The development of a management system ac-cording to the international standard OHSAS 18001, with the objective of obtaining such cer-tification.

The full implementation of these two points will be fundamental in achieving our objective with respect to Safety in the Workplace

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At Dallant we understand that sustainable development is the key to ensuring the growth of our organisation and that of the environment in which our activi-ty takes place.

SUSTAINED AND SUSTAINABLE GROWTH

The economic results alone are incomplete objec-tives. We work with perseverance and prudence, with the objective of consciously planting and pa-tiently collecting fruit.

NEW ERP:SAP® MANAGEMENT SYSTEM

The implementation of new SAP® company mana-gement software is anticipated for the year 2014. This will allow for the centralisation of information, as well as the integration of all of the functional areas of our company.

SAP® has become an internationally recognised standard that the majority of large corporations use, however companies like ours have been taking more of an interest in this ERP solution.

The SAP® system, which is based on the concept of combining all of the company’s business acti-vities and technical processes in one simple, in-tegrated, robust and reliable computing solution,

will grant us the ability to make better decisions, closely control costs and provide the client with ex-cellent service.

However, we know that this change will involve a major challenge for the entire organisation and we must dedicate our efforts and rigour to this change in order to be able to carry out the successful im-plementation.

NEW MEASURES IN THE PREVENTION OF OCCU-PATIONAL RISKS

Dallant, as of many years ago, has marked health and safety in the workplace as one of its main ob-jectives.

Going far beyond the mere fulfilment of the esta-blished legal requirements, we have taken on the challenge of reducing work-related accidents to the greatest extent possible, as well as improving the working conditions in order to minimise any type of risk.

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2Dallant’s commitment to sustai-nability began long before the birth of the concept of social responsibility.

This is another case where the practice constructs the theory.

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HIGH MEDIUM LOW

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Stable relationships with interest groups Corporate ethics Creating shared value People - work teams Transparency and credibility Innovation in products, services and organisation Health and safety Corporate sustainability Engagement Energy efficiency

Reduction of waste and water consumption Integrated management systems Development of talent

Dialogue and collaboration with interest groups Profitability

MEDIUMDonation and collaboration with non-profit organisations

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RELEVANT ASPECTS FOR OUR INTEREST GROUPS

OUR MODEL OF SUSTAINABILITYWe are an industrial company that works with natural raw materials, therefore, with finite resources that must be managed efficiently. Taking care of the environment and maintaining an adequate and comprehensive management system are the basic pillars to ensure the future. Likewise, our desire is to act and grow in a sustainable way that equally guarantees the social, economic and environmental aspects of our business. This goal can only be achieved if we act responsibly, in such a way that we are capable of satisf-ying the expectations of our interest groups.

In order to do so, the involvement of the entire organisation is fundamental in transferring these goals to our environment.

CORPORATE SOCIAL RESPONSIBILITY REPORT 2013. DALLANT S.A.


SHAREHOLDERSWe have several instruments for dialogue with our shareholders:• Quarterly information about the economic evolution

of the business• Formal and informal meetings with the Executive President• The sustainability report as a privileged instrument of

dialogue with our shareholders with respect to the triple bottom line: economic, environmental and social

CLIENTSOur instruments of constant communication with our clients include:• Personalised surveys about projects and innovation• Client satisfaction surveys • Personalised visits• Corporate communication magazine: ‘dallantinforma’• Our website• Formal and informal meetings at trade shows and events

PEOPLECommunication with employees is carried out under the framework of everyday life, as well as with the help of the following systematised instruments:• Satisfaction surveys for employees • Study of Psychosocial Risks• Collective negotiation• Online magazine of internal communication• Formal and informal interviews• Focus-group• Specific surveys about CSR GRI.

SOCIETYCooperation with public, private or third sector organisations forms part of the Dallant paradigm with respect to its structure with the territory. The related channels, spaces or instruments are the following:• Active participation in Organisations of the Food and

Flavours Sector• Active participation in round-tables with experts from

Business Associations and Public Entities• Dallant informa, corporate communication magazine • Institutional visits• Active participation in Forums and Conferences• Cooperative dynamics with the Public Administration where

we operate

Environment Partners

· ENERGÍA VM· TEGA· TRATESA

PublicCommitments

· SEDEX· GLOBAL COMPACT

Audits

· SGS· SAI GLOBAL· BUREAU VERITAS

OUR PARTNERSHIPS

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IDENTIFICATION AND PARTICIPATION OF OURINTEREST GROUPS

Our ecosystemCONSUMERS | CLIENTS | SHAREHOLDERS EMPLOYEES | COMPETITORS | SUPPLIERS RESEARCH CENTRES | UNIVERSITIES | EDUCATIONAL CENTRES PUBLIC ADMINISTRATION | AUDITORS | UNIONS SECTOR TRADE AND PROFESSIONAL ASSOCIATIONS NON-PROFIT ORGANISATIONS


VALUES

We are mentally and organisationally flexible in order to respond and adapt

ourselves to the new needs of a changing world.

We are committed to people and also to the present and future

of the environment in which we operate, starting with respect,

professionalism and loyalty.

Professionalism and excellency are the keys to success and the satisfaction

of our clients.

Creativity and ingenuity are part of our essence.

We build solid relationships with our teams and partners through

transparency and honesty.

We learn and grow through effort, talent and the ability to improve.

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COMMITMENTS

Our mission, principles and values are the backbone of our corporate identity and organisational culture.

MISSIONThe creation of unique and innovative flavours that people can enjoy as part of a healthy diet, by building stable and lasting relationships with our partners.

PRINCIPLESETHICS: We behave ethically in all of the different sectors and territories, building solid relationships with our partners.

QUALITY: We seek quality in our technologies and products. We are stimulated by continuous improvement. SECURITY: We make sure to guarantee the safety of our products and processes.

COOPERATION: Our teams cooperate with our interest groups in order to co-construct successful projects.

SUSTAINABILITY: We are concentrated on growing in a sustainable way and taking care of our environment for the future.


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COMMITMENTSOur Code represents the commitment and ethical responsibility to both the business management and the business activity assumed by Dallant, whether they are carried out by administrators or employees.

Below are the main groups of our code of conduct.

1. With respect to the law, human rights and ethical values: Dallant assumes the responsibility to act at all times in accordance with current legislation and internationally accepted ethical practices, and with total respect towards Human Rights and civil liberties.

2. Respect for people: Dallant rejects any demonstration of physical, psychological or moral harassment, or abuse of authority, as well as any other conduct that may generate an intimidating or offensive en-vironment with respect to the people’s rights. Likewise, the employees will maintain due respect for all of their colleagues both within and outside the company, by not tolerating libel or slander.

3. Professional development and equal opportunities: Dallant promotes professional and personal de-velopment since it supports the creation of talent; it does so by ensuring equal opportunities for all its workers and not discriminating against any employee.

4. Corruption and subornation: Dallant is against influencing the will of people outside the company in order to gain some benefit through the use of unethical practices. Dallant will not allow other indivi-duals or entities to use such practices with their employees.

5. Irregular payments and money laundering: Dallant’s management team and employees will not commit to or participate in any activity that involves money laundering or participation in illegal acti-vities.

6. Competition and antitrust: Management will be aware of the anti-monopoly rules and powers of ju-risdiction, thus refraining from any conduct that may violate the applicable laws.

7. Accounting and internal control: Accounting will be diligent, transparent and rigorous.

8. Treatment of information and knowledge: Dallant’s management team and employees must comply with the duties of discretion and secrecy, and they therefore must keep information confidential and preserved. Additionally, and in accordance with the applicable Data Protection legislation, workers must respect protected data and not disclose data that could violate such legislation.

9 Communication: Dallant’s management team and employees will ensure that all advertising and pro-motion is justified and truthful.

10. Quality: Dallant’s employees will ensure the safety and efficacy of the products that are manufactured by the company, as well as the production parameters and the production quality.

SOCIAL ACTIONDallant has stable partnerships with different non-profit orga-nisations. Our efforts are mainly directed towards children and young people in vulnerable situa-tions. However, we also cultivate stable partnerships with the terri-tory in which we operate.

/ STAKEHOLDERS:


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MATERIALITY

3.1 PEOPLEExcellent results come from fascinating journeys. This paradigm of action backs our people policies through which we hope that cooperation has an active influence in our personal and organisational growth. We believe that the attitude of the people, their optimism and resilience are fundamental pillars that drive successful shared projects.

If in the first decade of the twenty-first century technology has guided a large part of social progress, therefore in the second decade of this century, the passion of people must form the backbone of the present generation’s yearning to achieve successful future milestones.

WE COOPERATE. WE GROW.

3.2 OPERATIONSWe are fully committed to the optimisation and rationalisation of our operations. Therefore, the study and application of new technologies is constant in our production processes and analytical methods; it is a fundamental part of our continual improvement approach and the pursuit of excellence.

Safety, quality and eco-efficiency are three concepts that we continuously work with in order to improve the performance of our products, and therefore, our clients’ applications. We also work to simplify our processes, making them more efficient and more competitive.

3.3 RESEARCH, DEVELOPMENT AND INNOVATIONCompetitive pressure, globalisation and technological advancement are realities that have changed the context in which our activity takes place. Nowadays, we understand that the only worthwhile and sustainable way to face challenges over time is through innovation.

We focus our efforts on research, technological development of new applications and processes, as well as organisational innovation, which allows us to provide differential value to our clients’ products.

Innovation is present in our entire value chain and in all stages of development, from the concept to the final product. For this reason, we see innovation as a dynamic system, which is permeable, open to the market, as well as the scientific community, and therefore we are always searching for the best solutions.

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CASE I: DAILY PULSE

In April of 2013 we started down an exciting path to measure happiness in the workplace. This new ins-trument joins two other instruments that are used for the measurement of welfare in the organisation: IS-TAS21, assessment of the psychosocial risk; Satisfaction and engagement survey. Daily Pulse is an instru-ment that allows us to measure the level of happiness at work in real time, and it also allows us to sha-re that information with the entire organisation. This project implemented together with Celpax has allowed us to have daily indicators at our disposal that are related to the level of happiness in our company. CASE II: CORPORATE ASSEMBLY

This past April 26 was the First Corporate Assembly where the current assessment was presented, along with the goals and objectives of the 2013/2015 Strategic Plan. The corporate assembly involved the participation of the or-ganisation’s entire personnel. The generation of this new space of corporate involvement is part of the personnel participation policies, which were initiated in 2003 through work groups for continuous improvement. The corpo-rate assembly is intended to be a space for sharing strategies and challenges with the organisation as a whole.

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3.1 PEOPLE

We cooperate. We grow.Dallant desires, cultivates and seeks people who are enthusiastic, optimistic and resilient in order to grow together.The formula for our sustainable growth is:

EXCEPTIONAL COMPETENCE + CONTINUOUS LEARNING + RESILIENCE = TALENT


INDICATOR DESCRIPTION VALUE

Workers FTE 153Gender Male 70.5

Female 29.4

Age 20-29 years 8.3

30-48 years 54.4

49-61 years 31.4

>62 years 5.7

Type of contract * Indefinite 97.0Type of working day Full-time 96.5

Rate of new hires % 4.60

Turnover rate % 4.5

Absenteeism rate % 2.7

Accident rate % 0.2

Regular performance % 100.0

Rate of participants in the training plan % 97.4Rate of participants with >10 hoursannual training 29.1

Academic level University studies 41.0

> Secondary school 69.7

Workers covered by a collective agreement % 100.0

Our organisation manages cultural, physical, sexual or sensory diversity with a conciliative approach.Currently at Dallant there are employees from various countries, such as: Cuba, Egypt, Senegal, France and Sweden.*Includes workers who are partially retired: 3.45 %

JOINT PREVENTION SERVICE

Continuing with our momentum towards health and safety policies, the Group’s Joint Prevention Service was created in the second quarter. This action falls within the corporate policies to integrate risk prevention at all organisational levels. This has led to the creation of our own prevention team by internalising the external services.

LIFE INSURANCE

A universal life insurance policy has been created for all employees.

II STUDY OF PSYCHOSOCIAL RISKS

46.8% of the organisation participated in the second study of psychosocial risks. In this second edition new instruments that are associated with the measurement of muscle-skeletal ailments, stress and health were incorporated.

3.1 PEOPLE

89.9%SATISFIED AND COMMITTED EMPLOYEES


CASE I: OPTIMISATION OF THE SERVICE OF COMPRESSED AIR GENERATION

The energy is essential in order to carry out our activity, but we are also aware of the environmental impact that it can cause. Therefore, we have committed ourselves to the implementation of various measures and investments to optimise our energy consumption.

Taking advantage of the renovations carried out this year in the essential oils concentration plant, we have restruc-tured its services with the purpose of cutting down on consumption and boosting energy efficiency.

In the case of compressed air supply, the equipment has been furnished with soft starters, the load system has been reprogrammed, decreasing the unload time by 60% and the service pressure has been decreased by 0.5 bar. Thus, with all of the actions that were carried out, we have achieved 33% energy savings.

The intentions for the next year are to continue to reduce the pressure of this service, with the aim of further redu-cing the energy consumption.

CASE II: NEW DISTILLATION AND FLAVOURS PLANT

Since we are aware of the need to use the most advanced technology to create value-added products that meet the expectations of our clients, in 2013 the distillation and flavours plant was remodelled. Technical intervention was carried out from the perspective that:

· The manufactured products are of the highest quality

· They respond to the norms and tips for occupational risk prevention

· Environmentally speaking, they are the most energy efficient possible

To do so, a control room was created that allows for the monitoring and automation of the basic parameters of the process and for supervision of various productions in real time; this ensures the quality of our products at all times.

In order to optimise the consumption of energy in our installations the most energy efficient machinery on the market has been installed and we ensured maximum insulation of the pipes and closures, etc. Likewise, a vacuum system of the latest generation has been installed, which allows us to automatically control the range, thus optimi-sing the energy necessary for the obtainment of each product.

Additionally, the security cooling system that was installed minimises the possible emissions of CO2 into the atmos-phere and increases not only the safety of the plant, but also the safety of the employees. Finally, a closed system has been enabled for production, which directs the gasses to an extraction system, therefore providing maximum security and environmental respect.

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3.2 OPERATIONS

The consolidation of our actions demonstrates our commitment to operational excellence, our commitment to the environment, as well as the health and welfare of the employees and the territory in which we operate.Our network of operations is restricted to all of our management processes at our headquarters. The in-tegration of services and the rationalisation of operations are two constants in this field of work. When we speak about operations we refer to the entire supply chain and production, as well as ancillary ser-vices of our products.

Our development policies of customised products are aligned with strategies of industrial design. The-refore we can be more flexible towards the needs of our clients and respond faster and more efficiently.


CODE INDICATORS TYPE 2011 2012 2013 11/13%

EN3Direct energy consumption broken down by primary sources (GJ)

GRI

Electric 6846 7323 7455 8.90*

Thermal 8128 7730 7432 - 8.56

EN5

Energy savings due to conservation and improvements in efficiency (GJ)

GRI 68.75 110 2944 4182.16

EN8

Total water collection by sources (M3)

GRI

Agricultural well 22075 19368 17796 -19.38Supply company

2781 2719 2565 -7.77

EN21

Total discharges of waste water, according to its nature and destination (M3)

GRI 13320 11957 10855 -18.51

EN22

Total weight of waste generated, according to the type and method of treatment (Tn)

GRI 425.73 398.52 374.5 -12.97

DAL-O1Rate of revalued products (%)

DALLANT 61.13 36.67 8.86 -85.81** DATA IN ABSOLUTE VALUE. IN RELATIVE VALUE TO THE INCREASE IN THE COMPANY’S ACTIVITY, THE EVOLUTION IS POSITIVE.

ENVIRONMENTAL PERFORMANCE INDICATORS 2013


2Within the organisation, it is necessary for the culture of innovation to be an inherent part of the entire company, in such a way that innovation goes beyond the departments that are traditionally promoters of change and it is assumed by all of the functional areas. All of these functional areas should be grouped together in multidiscipli-nary teams that are structured and interact according to the innovation strategy.

The operational dimension then intervenes, where creativity is the key to overcoming challenges. In this case, lateral thinking must be associated with the action of creation, which must anticipate the needs of the market and not be limited to reacting, seeing as mere reaction provides responses of a lessor scope.

In this way, at Dallant, we connect the results of our research to the development of non-alcoholic and alcoho-lic beverages, sweet and savoury foods and snacks, and dietary products, through new concepts of products. These concepts consist of the design, development and creation of new flavours and ingredients that are valida-ted by panels. We therefore work in a dimension of applied science, whose benefits are transferred directly to the people through a simple sip or bite in each act of consumption.

Our R&D strategy and consequently, all of our efforts in product and technology innovation, revolve around the following areas of development:

NATURALNESSNature not only inspires us, but it is also the main source of our creations, therefore we admire and respect it. We fully study its composition, in order to be able to offer the best of it to our consumers through imaginative proposals that mainly come from fruit and vegetable raw materials.

What is natural transcends tendency, becoming a sine qua non requirement in the majority of the projects. It is not a passing demand, but rather an example of the maturity and consciousness that consumers take and express in their desires.

HEALTHWe are concerned about ensuring food safety throughout the entire value chain, while promoting good eating habits and offering nutritionally balanced food to the people. For us it is an obligation to contribute to a good quality of life and prevent health problems.

As a result, our research and technical teams, together with external collaborators, are extensively working with the con-cepts of nutrition and functionality, by studying the active components of food and the best way to incorporate them into a wide variety of foods and beverages, thus providing a response to the consumers’ growing concern on health issues.

SENSORYThe consumer wants to live experiences and establish emo-tional connections each time they eat or drink. Promoting these unique sensations through smell and taste is the key to the success of our projects.

The sensory creation is a mixture of inspiration, talent and in-genuity with scientific rigour, experience and a broad knowle-dge of raw materials and flavour substances. These factors, together with the sensitivity to the diversity of tastes, cultu-res and culinary traditions of each market, allow each consu-mer to enjoy eating and drinking to the maximum.

EFFICIENCYThe rational use of raw materials and energy, together with the continual permanent optimisation of processes, technolo-gies and methods of analysis, allows us to develop products with expectations for long-term growth.

We also improve the performance of our creations in our clients’ applications, with whom we work to simplify their processes, thus making them safer, more efficient and more competitive.

We are committed to the society in which we live and we work to take care of our environment.

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3.3 RESEARCH, DEVELOPMENT AND INNOVATION

Innovation does not emerge spontaneously with a stroke of genius, but rather it arises from the conscious, methodical and constant search for opportunities.The systematics involved in innovation are a prerequisite, these include broad-mindedness, the acceptance of the need to change and the willingness to do so, both on the individual and collective level.

“The definition of insanity is doing the same thing over and over again and expecting different results.”

Albert Eisntein


CASE II: KOSHER AND HALAL CERTIFICATION

Within the framework of the company’s strategic plan, the emerging markets have an important role with respect to achieving the objective of international expansion, since they are areas that are expected to have significant growth.

Tending to their needs entails a great challenge with respect to the design and development of the portfolio of customised pro-ducts, given the cultural uniqueness and religious characteristics of such markets. Sensitivity to each tradition, culture and reli-gion, together with knowledge about the preferences and customs of each country is the key to the success of product innovation.

This demand implies much more than mere respect and adapting to the organoleptic profiles themselves, but also fulfilling the specific requirements with respect to the composition or manufacturing process, which requires us to formulate and produce our flavours by means of new techniques and new raw materials.

These necessities are normally reflected in the recommendations and even the norms, which are generally harmonised between the different countries. Dallant began down this path of continual adaptation in 1999, when we obtained the Kosher Certification, granted by KLBD, for our main production centres. This certification is synonymous with high quality food products and it facilita-tes exportation, even to markets of cultural and religious connotations that are different to the native ones.

In 2013 a new milestone was achieved: the attainment of the Halal Certificate granted by the IHJI. This serves as a guarantee of the innovative product portfolio that is perfectly adapted to the needs of the Muslim markets.

These certifications definitely emphasise Dallant’s orientation towards the client and they serve as preparation to take on the challenges of the future markets, by persisting in the development, flexibility and innovation of both the product and technology.

100% of our products are subject to evaluation processes to measure their impact on the health and safety of the clients throughout all of the phases of their life cycle, from concept development of the product, to its elimination, reuse or recycling.

INDICATORS 2013

R&D investment

2.04 Million €

4.27% on sales

Certification

1.51 Million €

74% vs. Total R&D

Dedication to

20.75% of personnel in R&D

Rate of the innovation of new products

42.7% sales of new products* vs. total sales

Rate of added value

35.4% Margin of contribution of new products* vs. margin of contribution of total products

* NEW PRODUCT: AGE < 5 YEARS

CASE I: TECHNOLOGICAL INNOVATION IN ASEPTIC PACKAGING

At Dallant, we seek to offer the maximum organoleptic potential of the food ingredients through the use of advanced, efficient and sustainable technology.

While providing an excellent product is essential for the satisfaction of our clients, the way the products are served is becoming increasingly important. In this sense, packaging has a great impact on supply chain optimisation, as well as guaranteeing the properties of the product.

Under these premises, in 2013 Dallant designed and installed a new line of aseptic packaging for liquid products by using the system known as Bag In Box (BIB), which consist of a hermetically sealed bag with a dispensing cap that is all housed inside of a cardboard box.

This system allows for maximum conservation of the organoleptic characteristics of the product (juices, compounds…) preventing the entry of air and exposure to sunlight, which may even lengthen the shelf life of the ingredient.

At the same time, the small size, the shape and the materials that are used allow for the optimisation of the space and weight, with a significant reduction in the costs of storage and transport, especially when compared to classic packaging (e.g. metal cans/drums). Additionally, there are significant energy savings since we are able to supply at room temperature or in cold temperatures (depending on the characteristics of the product and the target market).

Likewise, the design of the equipment cuts back on losses and offers greater flexibility and versatility to the client, since they are smaller quantities in small packages, which allow for reduction in stock and smaller-sized production batches. With respect to the personnel, manipulation is made easier, thus avoiding loads that could involve ergonomic and health risks.

Finally, the Bag In Box system is highly ecological, easy to recycle and it has a reduced carbon footprint.

With this investment, Dallant definitely persists with its commitment to the efficiency and sustainability of processes and pro-ducts, at the same time that it improves client satisfaction.

RATE OF INNOVATION OF NEW PRODUCTS

INVESTMENT IN R&D


GLOSSARY

GLOBAL COMPACT: The United Nations Global Compact is an international initiative that promotes the implemen-tation of 10 universally accepted principles in the areas of Human Rights, Labour Standards, Environment and the Fight against Corruption in companies’ business activities and strategies.

GLOBAL REPORTING INITIATIVE (GRI) is an organisation whose purpose is to encourage the elaboration of sustai-nability reports in all types of organisations. GRI produces a complete framework for the elaboration of Sustainability Reports, which is the one that is most widely used around the world.

INTEREST GROUPS: All of those entities or individuals who can significantly affect the activities, products and/or servi-ces of the organisation; and whose actions can affect (within reason) the organisation’s ability to successfully develop their strategies and reach their objectives.

FSSC 22000: Food Safety System Certification. A standard to ensure food safety in the manufacturing of food products.

ISO 9001: It is the basis of the quality management system, since it is an international standard that focuses on all of the management elements that a company must have in order to have an effective system that allows it to manage and improve the quality of its products of services.

KPI: Key Performance Indicators measure the level of the performance of a process, focusing on the “how” and indica-ting the efficiency of the process, so that the fixed goal can be achieved.

MATERIALITY: Those aspects and indicators that reflect the impacts that are socially, environmentally and economically significant to the organisation or to those who could exert a substantial influence on the evaluations and decisions of in-terest groups.

SEDEX: Sedex is a non-profit organisation whose objective is to enable improvements in responsible business practices and supply chain ethics around the world.

3USEFU

L INFO

RMATIO

N

VALIDATIONS

REGIONS COUNTRY LOCALITATIONQUALITY ISO 900

FOOD SAFETY STANDARDS: ISO 22000 HALAL KOSHER

SEDEXREGISTRATION

EAME

Spain Barcelona ✓ ✓ ✓ ✓ ✓

Spain Lleida ✓ ✓ OG* ✓ ✓

Spain Murcia ✓ ✓ OG* ✓ ✓

Morocco Casablanca ✓ OG*

* OG: IN PROCESS UNTIL 31/12/2013

CORPORATE SOCIAL RESPONSIBILITY REPORT 2013. DALLANT S.A.

Consult our Corporate Social Responsibility Report 2013 on your mobile phone by using this QR Code:

The logo FSC® (Forest Stewardship Council) identifies products which contain wood from well-managed forests certified in accordance with rules for the Forest Stewardship Council.

INDICATOR DESCRIPTION OF THE INDICATOR TYPE PAGE

EC-1 Direct economic value, generated and distributed GRI p.11

DAL-E1 Rate of financial solvency DAL p.11

DAL-E2 Rate of indebtedness DAL p.11

DAL-I1 Rate of the innovation of new products DAL p.35

DAL-I2 R&D investment DAL p.35

DAL-I3 R&D certification DAL p.35

DAL-I4 Dedication to R&D DAL p.35

DAL-I5 Rate of added value DAL p.35

EN3 Direct energy consumption broken down by primary sources GRI p.31

EN5 Energy savings due to conservation and improvements in efficiency GRI p.31

EN8 Total water collection by sources GRI p.31

EN21 Total discharges of waste water, according to its nature and destination GRI p.31

EN22 Total weight of waste generated, according to the type and method of treatment

GRI p.31

DAL-O1 Rate of revalued products DAL p.31

PR1

Phases of the life cycle of products and services in which various aspects in order to be improved, such as the impacts of these phases on the health and safety of the clients, as well as the percentage of product categories and the services that are subject to such evaluation procedures

GRI p.35

LA1Breakdown of the group of workers by type of employment, by contract, region and sex

GRI p.27

LA2Total number of employees, rate of new hires and average employee turnover, broken down into groups of age, sex and region

GRI p.27

LA4 Percentage of employees covered by a collective agreement GRI p.27

LA7Rates of absenteeism, occupational diseases, lost days and number of work- related fatalities by region

GRI p.27

LA11Programs of skill management and continuous training that promote the employability of workers

GRI p.27

LA12Percentage of employees that receive regular performance and professional development evaluations

GRI p.27

DAL-P1 Rate of employee satisfaction DAL p.11

DAL-P2 Rate of participants in the training and development plan DAL p.27

DAL-P3 Rate of employees with an academic level superior to secondary school DAL p.27

Documents

DALLANT'S CSR REPORT 2013