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Gavin MorrisPedro YágüezRebeca Coriat

London, 2nd May 2012

Governance for Owners’ shareholder proposals for the Viscofan 2012 AGM on 23 May

GO European Focus Fund

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Contents

Governance for Owners and Viscofan

1st Resolution: progressive dividend policy

4th Resolution: shareholder directors’ remuneration

2nd Resolution: board tenure

3rd Resolution: non-executive remuneration

5th Resolution: executive remuneration

Annex

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Governance for Owners

Governance for Owners (“GO”) is an investment manager with c.€1bn under management and the GO European Focus Fund is its flagship product

The GO European Focus Fund aims to add significant long-term value for clients by acting as a catalyst for corporate change with an agenda based on:

– Strategic issues– Financial issues– Governance issues

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Governance for Owners and Viscofan

GO owns 5.045% of the share capital of Viscofan – one of the top three shareholders in the company

What we like about Viscofan:•Leading position in an attractive industry with pricing power, generating cash.•Considerable operational improvements and on-going operational excellence.•Diversified risk profile in terms of products and geographies.•Performed well, but still more potential.

But there is still potential for Viscofan to be more highly rated:• Make balance sheet more efficient.• Increase shareholder remuneration.• Improve overall governance and disclosure.• Improve board independence.• Implement best practice in executive incentivisation.

Viscofan has already responded to a number of GO’s proposals• Disclosed detailed board remuneration for first time 4/2012.• Proposed NED with China experience 4/2012.• Will be appointing advisers on board remuneration to report at 2013 AGM.

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GO’s proposed resolutions for Viscofan 2012 AGM on 23 May

1st. Introduction of a progressive dividend policy (payout ratio: 55% in 2013; 65% in 2014).

2nd. Maximum board tenure of 12 years for independent directors (consistent with Recommendation 29 of Unified Code of Corporate Governance).

3rd. Non-executive directors’ remuneration to be fixed and not performance-based (consistent with Recommendation 36 Unified Code of Corporate Governance).

4th. Shareholder directors (dominicales) not be remunerated.

5th. Better shareholder alignment in the remuneration scheme for Executive Directors (consistent with Recommendation 35 of Unified Code of Corporate Governance).

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1st Resolution: Introduction of a progressive dividend policy

While Viscofan has increased its dividend in absolute terms in recent years, the pay-out policy has remained unchanged:

… which, coupled with strong cash generation, has resulted in decreasing net debt and sub-optimal leverage

in EUR 2007 2008 2009 2010 2011

Interim dividend 0.19 0.21 0.26 0.30 0.36

Share premium refund 0.25 0.29 0.36 0.29

Complemetary dividend 0.20 0.63

AGM attendance 0.005 0.005 0.005 0.006 0.006

Total DPS (EUR) 0.45 0.50 0.62 0.80 1.00

Pay-out ratio, % 45% 45% 45% 46% 46%

2007 2008 2009 2010 2011

Net debt (m EUR) -95 -122 -91 -60 -61

Net debt/EBITDA 1.0x 1.2x 0.7x 0.4x 0.4x

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1st Resolution: Introduction of a progressive dividend policy (2)

Such is Viscofan’s cash generation that we estimate it will be cash positive in 2014, despite elevated capex in the meanwhile:

…which will further depress leverage AND result in a declining return on equity

2007 2008 2009 2010 2011 2012 E 2013E 2014 E

Capex -34 -45 -46 -47 -65 -75 -68 -63

Capex as % of sales -6% -8% -8% -7% -11% -10% -9% -8%

Net debt (m EUR) -95 -122 -91 -60 -61 -57 -33 3

2007 2008 2009 2010 2011 2012 E 2013E 2014 E

Net debt/EBITDA 1.0x 1.2x 0.7x 0.4x 0.4x 0.3x 0.2x -0.0x

ROE 16.4% 17.2% 19.8% 21.6% 23.7% 21.5% 20.2% 19.4%

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1st Resolution: Introduction of a progressive dividend policy (3)

We have discussed the inefficiency of balance sheet with the management on a number of occasions and their response has been that it is ‘conservative’. We believe there is ample scope for the company to introduce a progressive dividend policy and still remain conservative:

… this will contribute to reducing balance sheet inefficiency, while leaving the company with sufficient headroom to raise additional debt if needed:

2012 E 2013E 2014 E

Pay-out ratio, % 46.0% 46.0% 46.0%

Total DPS (EUR) 1.01 1.07 1.14

yoy, % 1.4% 5.2% 6.5%

Dividend yield 3.0% 3.1% 3.3%

ROE, % 21.5% 20.2% 19.4%

Net debt/EBITDA 0.3x 0.2x -0.0x

Dividend paid (m EUR) 47 50 53

FCFE / Dividend 1.1x 1.5x 1.7x

2012 E 2013E 2014 E

Pay-out ratio, % 46.0% 55.0% 65.0%

Total DPS (EUR) 1.01 1.27 1.60

yoy, % 1.4% 25.7% 25.9%

Dividend yield 3.0% 3.7% 4.7%

ROE, % 21.5% 20.4% 20.1%

Net debt/EBITDA 0.3x 0.2x 0.1x

Dividend paid (m EUR) 47 59 75

FCFE / Dividend 1.1x 1.2x 1.2x

Peers' median div.yield 3.1% 3.4% 3.8%

EBITDA 2012 (mEUR) 180

Re-leveraging to 1.5x 2.0x

Headroom (m EUR) 212 302

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2nd Resolution: Board tenure

CATEGORISATION OF EXTERNAL DIRECTORS (from the Spanish Unified Code)Independent: No former employment with the company; no personal, business or financial relationship between the directors and the company, its key executives or significant shareholders; maximum tenure length of 12 years Affiliated: Non-executive directors that do not fulfil the CNMV independence criteria, as they are related to a substantial shareholder or have served on the board for more than 12 years

Name Tenure GO’s Classification

José Domingo de Ampuero y Osma

n/a Executive

Néstor Basterra Larroudé

15 Affiliated

Ágatha Echevarría Canales

14 Affiliated

Alejandro Legarda Zaragüeta

6 Independent

Gregorio Marañón Bertrán de Lis

13 Affiliated

José Cruz Perez Lapazarán

14 Affiliated

Ignacio Marco Gardoqui Ibañez

3 Independent

Laura González Molero

2 Independent

Long tenures are problematic: the

supervisory role of the board may be weakened if

it is gets too close to management

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2nd Resolution: Board tenure (2)

Four so-called independent non-executive directors have served on the board for over 12 years.

The Code recommends (article 29): “independent directors should not stay on as such for a continuous period of more than 12 years”.

Governance for Owners believes that long tenures are problematic. The supervisory role of the board may be weakened if it gets too close to management.

GO’s resolution proposes: that independent non-executive directors do not hold such a position for more than 12 years. Governance for Owners defers to the Appointments and Remuneration Committee the responsibility for implementing this.

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3rd Resolution: NED Remuneration

• Non-executive directors currently receive performance-related remuneration (“board fees”).

• Non-executive directors who are members of the executive committee, receive additional performance-related remuneration.

• The Code (recommendation 36) states: “remuneration comprising (…) payments linked to the company’s performance should be confined to executive directors”.

GO’s resolution proposes: that the performance-related remuneration element be removed from the NEDs’ fees and that non-executive remuneration should comprise: fixed fees, fixed attendance fees, fixed Committee membership fees, and fixed Chairmanship fees.

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3rd Resolution: NED Remuneration (2) (see annex)

*A cap has been included as Spanish law requires it to be specified in the resolution. Governance for Owners defers to the Appointments and Remuneration Committee the implementation of these provisions.

CURRENT BOARD FEES** PROPOSED BOARD FEES

ITEM TYPE FY 2011 ITEM TYPE QUANTUM*

Performance-related Board fees

VARIABLE 1.5% Net Profit Before Tax/ 8 Fees for NEDs FIXED Maximum of 0.15% of Net Profit Before Tax Per Director

Board meetings attendance fees

FIXED EUR 1,000/meeting Board meetings attendance fees FIXED

Audit Cttee. fees FIXED EUR 16,000 Audit Cttee. fees FIXED

Executive Cttee. fees

VARIABLE 1.5% Profit Before Tax/3 Appointments and Remuneration Cttee. fees

FIXED

Chairmanship fees FIXED

Executive committee fees Falls under Exec Rem

**SEE ANNEX ON PAGE 17

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4th Resolution: Non-remuneration of shareholder directors (“dominicales”)

•Governance for Owners understands that two of the so-called independent directors are connected to the founding families of Viscofan. •Therefore, we believe that they do not qualify as independent directors. •These two board members are also Executive Committee members.

GO’ resolution proposes: that the Bylaws of Viscofan be amended such that shareholder directors are not

compensated.

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5th Resolution: Executive directors’ remunerationDISCLOSURE AND CURRENT STRUCTUREViscofan has, for the first time in 2011, disclosed board members’ remuneration, as requested by GO at the last two AGMs.

Executive director’s (Chairman’s) remuneration comprises*: •Board attendance fees •Other boards within the Group•Board fee (1/8 of 1.5% of Net PBT) •Executive Committee fee (1/3 of 1.5% of Net PBT)

(EUR)

There is no short-term or long-term variable compensation, with appropriate targets to align his remuneration to shareholders’ objectives.

*SEE ANNEX ON PAGE 17

11,000

292,449

102,058

299,487

(TOTAL) : 705,449

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5th Resolution: Executive directors’ remuneration (2)The Code recommends (article 35): “remuneration schemes with a variable component linked to the company’s net profit should attract and retain the right kind of person”.Governance for Owners believes that executive remuneration should be structured so as to attract and retain the most outstanding professionals and align their objectives with those of shareholders.

GO’s resolution proposes: that executive remuneration for (executive) board members be comprised of three elements:

Fixed salaryAnnual bonus

LTIP type scheme

The annual bonus and LTIP would have appropriate targets to ensure alignment with shareholders’ objectives.

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Viscofan: the case for change

• Viscofan is a significant international company and a potential constituent of the Ibex 35.

• The adoption of a progressive dividend policy should help improve the efficiency of its balance sheet and would be well received by shareholders.

• The company’s governance structures are currently not commensurate with its size and status.

• We believe that better governance structures would:– Strengthen the board– Better align executives’ and shareholders’ objectives– Increase the company’s appeal to international

institutional shareholders.

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ANNEX. Directors’ remuneration - 2011

Director Role Board membership

Attendance fees Executive Cttee. fees

Audit Cttee. Fees

Other Viscofan Boards

TOTAL (EUR)

José D. Ampuero Osma

Exec Chairman E*, A&R*

102,058 11,000 299,904 - 292,904 705,449

Nestor Basterra Larroudé

NED E

102,058 11,000 299,487 - 146,452 558,997

Agatha Echevarria Canales

NED E, A, A&R

102,058 11,000 299,487 16,000 - 428,545

José C Pérez Lapazarán

NED A*, A&R

102,058 10,000 - 16,000 - 128,058

Gregorio Marañón Bertrán de Lis

NED A

102,058 10,000 - 16,000 - 128,058

Alejandro Legarda Zaragüeta

NED A

102,058 10,000 - 16,000 - 128,058

Ignacio Marco-Gardoqui

NED 102,058 10,000 - - - 112,058

Laura González Molero

NED 102,058 9,000 - - - 111,058

TOTAL (EUR)

816,464 82,000 898,461 64,000 439,356 2,300,281

E – Executive Committee Member; A – Audit Committee Member; A&R – Appointment and Remunerations Committee Member; * - Chairman.BACK TO NED REMUNERATION - PAGE 12; BACK TO EXECUTIVE REMUNERATION - PAGE 14

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Viscofan: the case for change

We look forward to your support!

Please do not hesitate to contact us should you have any questions:

Gavin Morris: g.morris@g4owners.comPedro Yágüez: p.yaguez@g4owners.com

Rebeca Coriat: r.coriat@g4owners.com

+44 (0) 20 7614 4750

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