Introduction

Chariklo, SAB de CV, its Divisions and subsidiaries (hereinafter “Chariklo” or “the Company”) confirms and formalizes its commitment to the values and principles of business ethics and to the fight against Corruption and illegality through this Policy. Therefore, it is your commitment and that of all Chariklo Employees to promote and foster an ethical business culture in the daily exercise of your activities and in decision-making in order to act free from the influence of your own interests or intention. to obtain personal benefits for himself or any Third Party. Chariklo has developed an Integrity and Compliance Program, which includes, among others, its Code of Ethics, as well as this Policy. Violation of the Code of Ethics, internal policies, or applicable legislation may give rise to civil and criminal sanctions, which range from fines to custodial sentences and are applicable both at the personal level and at the Company level.

Aim

The purpose of this Policy is to establish the principles and guidelines that all Employees must follow to identify, prevent and manage in a transparent and ethical manner any Conflict of Interest that may arise during the activities they perform as part of their duties. Conflicts of Interest are a form of Corruption and therefore it is essential to prevent and mitigate them. The effective control of Conflicts of Interest is a good practice to maintain integrity, transparency and sustainability in business, in addition to forging greater trust between us and the Third Parties with whom we interact.

Scope

This Policy is applicable and mandatory for you and for each and every one of our Employees and Third Parties, in each of the countries in which we operate, so it is important to know, understand and put into practice the principles and values here contents.

Definitions

Friend(s): Any person, outside the family, with whom the Employee maintains a personal relationship of trust or a bond of affinity. The term includes close friendships and personal business contacts. Chariklo Code of Ethics: Institutional document that establishes the principles of conduct and values of Chariklo, it is of general application to all Employees and Third Parties or any other person linked to the Chariklo Companies. Competitor: Any company that participates in the same or similar business sector as Chariklo and its Divisions. Conflict(s) of Interest: It is a form of Corruption that consists of an action that may be unduly influenced by a Personal, Family or Third-Party Interest. A Conflict of Interest exists when an Employee or a Third Party guides their decisions or acts for their own benefit, which is frequently of an economic or personal nature, contrasting with the responsibility of acting for the benefit of the Company when they are representing it. Real Conflict of Interest: It is the Conflict of Interest that has materialized in a real situation. Potential Conflict of Interest: Refers to Conflict of Interest where competing interests may exist under certain circumstances; However, the Conflict of Interest has not yet materialized because the Employee has not made a commitment or assumed a certain position. Apparent Conflict of Interest: It is the situation in which an Employee can appear to have a Conflict of Interest, even though it does not exist. Corruption: In the public sphere it is the abuse of power for personal benefit or that of the Company, it occurs when interacting with public servants or government entities and is known as public corruption. In the area of Individuals, it is when actions or omissions are carried out aimed at obtaining some undue benefit for the Company, staff or for a Third Party and is known as Private Corruption. Thing of Value : Any type of economic or in-kind benefit, mentioning but not limited to the following: cash or cash equivalents (securities, grocery vouchers, gift cards, electronic wallets, etc.), loans , Gifts, prizes, meals and drinks, trips, Entertainment Expenses, Hospitality, airline tickets, discounts on the price of goods or services, invitations to participate in trips, clothing, jewelry, offers or promises of employment for yourself or for Third Parties, any type of concession in a contract, product or service as well as the possibility or agreements to acquire shares of the company or its related parties. Declaration of Conflict of Interest: Questionnaire that each Employee must complete when hired and renew it every two years. Employee(s): Any person or persons who are employed under an individual or collective bargaining agreement by Chariklo or any of its Divisions. External employment: This is considered to be paid work performed by a Chariklo Employee in another company. Relative(s): It should be understood up to the third degree of consanguinity. That is, the following will be considered Close Relatives: sons, daughters, spouses, father, mother, grandparents, uncles, nephews, grandchildren, and cousins. Entertainment Expenses: Sports, musical or cultural events, such as tournaments, fairs, theater performances or concerts, among others. Hospitality : Care expenses that are intended to strengthen a business relationship (payment for flights, transportation, hotels, business meals , courses, conferences or seminars, among others), whether to Third Parties or public servants. Direct Interest: When the benefits are received directly by an Employee. Indirect Interest: When the benefits are received directly by a Family Member, Friend or Third Party of the Employee. Management: It is the area of Chariklo responsible for establishing an Integrity and Compliance Program that includes adequate and effective control, surveillance and audit policies and systems, and that constantly and periodically examines compliance with integrity standards throughout the organization. info@chariklo.net Subsidiary Management: It is the area of the Subsidiary responsible for executing, monitoring compliance and disseminating the Integrity and Compliance Program, in accordance with the criteria, indications and evaluations of Chariklo Management. Private(s): This is any person other than a Public Servant. Integrity and Compliance Program: Program developed and supervised by Management that includes, but is not limited to: (i) the development of policies and other guidelines of the Company to comply with current legislation; (ii) the identification, prevention and mitigation of operational risks and legal in order to guarantee a long-term reputational value of the Company and generate greater certainty to its value chain; (iii) the establishment of adequate and effective control, surveillance and audit systems, which constantly and periodically examine compliance with integrity standards throughout the organization; and (iv) managing the operation of the Complaints Portal and coordinating training on compliance issues. Gift: Anything of Value or benefit given to a person as a sign of attention, esteem or friendship (Christmas gifts, promotional items, among others). Public Servant (national/foreign): It is the person who holds a public position or is an employee of a government entity or any other decentralized unit thereof, whether elected or appointed, representing any level of government, federal, national, state. or municipal; in an enunciative and non-limiting manner, to its legislative bodies, ministries or secretariats, judicial bodies, investigation agencies and organizations. Likewise, any member belonging to any political party or candidate for any popularly elected position. Officials of public international organizations (World Bank, the United Nations, the International Monetary Fund) are also considered Public Servants. Bribery: It is a form of Corruption that consists of offering, promising or granting, as well as demanding or accepting any benefit, whether in cash or in kind, directly or indirectly to another person, with the purose of making said person do or stop doing something. do something to secure an improper advantage or obtain, direct or retain business for a particular company. Division: Any entity that is under the control of Chariklo. Hierarchical Superior: The Employee whose responsibilities are to direct and supervise the work of another Employee in a direct line. Third party(s): Distributors, representatives, advisors, business partners, agents, intermediaries, clients, contractors, managers, lobbyists, consultants or suppliers who are part of Chariklo’s value chain or who represent the Company during an interaction with another Third, a government or public servants. Civil society organizations and educational, charitable, cultural or sports institutions are included.

General guidelines

You and all Employees must comply with the following guidelines with the objective that your actions and decisions are always based on doing what is best for the interests of Chariklo and not for the benefit of your personal interests or Third Parties.

  • Prevention of Conflict of Interest 5.1.1.Relations with Third Parties
    • Obtain the Declaration of No Conflict of Interest for Third Parties “Annex A” of Chariklo’s Purchasing Policy, in a timely manner.
    • The receipt of Gifts from Third Parties must be carried out in accordance with the provisions of Chariklo’s Gifts, Entertainment and Hospitality Policy.
    • Employees whose duties include defining, negotiating or making decisions to manage business relationships must do so under the principles of honesty, transparency, respect, equity and sustainability.
    • Employees who have Relatives related to Third Parties, and whose functions within the Company could enter into a Conflict of Interest due to said relationship, must notify the Director of their area and Management for evaluation. In the case of management-level Employees, they must notify and obtain approval from Management and in exceptional cases, they must have the approval of the General Management of the Company.
    • In the hiring of Third Parties, where a Family Member or Friend of an Employee holds a management position or has a financial Interest, this Employee cannot participate or influence in any way in the negotiation, selection and hiring process and must inform of said relationship. to the Director of your area and Management for evaluation. In the case of management-level Employees, they must notify and obtain approval from Management and in exceptional cases, they must have the approval of the General Management of the Company.
    • The hiring of Third Parties, where former Employees who have been directors of the Company work or are owners, must be authorized by Management.

Employee recruitment

  • The Employee must not participate or influence the hiring process of Family Members or Friends.
  • In the case of hiring Family Members or Friends of Employees at management levels or key areas, Management or the General Directorate in special cases must be notified to obtain express hiring authorization.
  • There cannot be direct subordination of the work of Family Members. When Employees become related, they must notify their immediate supervisor who must evaluate whether the functions of the Employees do not involve the interposition of interests in the performance of the Employees’ activities. If the immediate supervisor considers it necessary, he or she may submit this situation to Management evaluation.
  • No hiring or promotion of Family Members or Friends should be influenced by any Employee so that the new prospect to be hired or promoted has a benefit that is not in accordance with the functions, roles, competencies and capabilities defined by the Company.
  • The hiring of former public servants for management positions must be approved by Management. For lower-level levels the evaluation is carried out by the Deputy Director of Personnel.

All hiring of Employees that we carry out in the Company must comply with the terms and conditions established in the Due Diligence Protocol for the hiring of Chariklo Employees, as well as the applicable human resources policies and procedures.

Interests in other Entities

Employees who have or acquire an External Employment (whether paid or unpaid) must ensure that it does not interfere with the interests of the Company and that due to the nature of the activities it could:

  • Interfere with the correct performance of the functions you have in the Company.
  • Affect your judgment in the performance of your responsibilities in the Company.
  • Affect the reputation of the Company.
  • Be related to a Competitor of the Company or impact the Company’s ability to compete fairly and lawfully in the market.

Participations and economic or financial interests, direct or indirect, in any type of company other than the Company must be expressed in the Declaration of Conflict of Interest.

Evaluation of Conflicts of Interest

The Management, the Management involved or, where appropriate, the General Management of the Company, are the areas responsible for evaluating and managing the declared Conflicts of Interest and will seek to adopt the necessary measures that allow the adequate assignment of roles, responsibilities and lines of reporting in the performance of the Employee’s functions, as well as identifying those situations in which an Employee may improperly influence decisions, votes, negotiations or contracting. In cases where a measure that could avoid the Conflict of Interest is not identified, the Employee must be requested, and must accept, to refrain from the activity that generates the Conflict of Interest. All situations reported by the Employee must be evaluated impartially and independently, taking into account the risks to the Company. The measures adopted to mitigate Conflicts of Interest must be communicated and explained to the Employee in a clear manner and with sufficient reasons to allow the Employee to confirm his acceptance and compliance with said measures. Management is responsible for carrying out a due diligence process for Employees and Third Parties, in order to ensure that Potential Conflicts of Interest are identified and appropriate measures are taken to manage, supervise and mitigate them.

How to recognize a Conflict of Interest?

To facilitate understanding of the situations that may affect the objectivity of the activities and decision-making of Employees, some situations that may give rise to or represent a Conflict of Interest are presented below as an example:

Conflict of Interest

  • Participate in the hiring process of a Family Member or Friend.
  • Have the work of a Family Member or Friend under supervision.
  • An Employee who works in the purchasing area requests or acquires goods or services on behalf of the Company of a Third Party in which the same Employee, Family Member or Friend has participation (direct or indirect).
  • Use confidential or privileged information of the Company for your own benefit or that of a Family Member or Friend, or disclose it to a Third Party in which you have an interest.
  • Exercise executive functions and control functions at the same time.
  • Receive Gifts from a Third Party.

Potential Conflict of Interest

  • Have a personal relationship with a Company Employee.
  • The Family Member of an Employee who works in the strategic planning area of a competitor.
  • A managerial Employee who participates as a member of the board of another company, without relation to the Company. This could create a Conflict of Interest if both companies did business together in the future.
  • An Employee who he or his family has a personal business that could provide services to the Company.
  • An Employee who has a Family Member or Friend who works in a business that is a supplier to the Company, and/or who participates in negotiations with the Company.
  • An Employee who has decision-making powers that could improperly benefit Third Parties.
  • Have an Outside Employment that could interfere with our work for the Comp

Apparent Conflict of Interest

  • The Company hires a new Employee who shares a last name with a Company Manager, but they are not Relatives.
  • The wife of a Director of the Company works in a company that provides services to the Company, but in a different area.

Declaration of Conflict of Interest

The Declaration of Conflict of Interest allows you to identify those activities or relationships that could interfere with the exercise of your functions as an Employee or with your decision-making, therefore, as part of their responsibilities, all Employees must present their Declaration of Conflict of Interest. Interest as follows:

  • The newly hired Employee must fill out the form during the hiring process. The Human Resources area must ensure that all new Employees understand this policy and properly complete the Conflict of Interest Declaration, which is part of their employment file.
  • Every two years, the Employee must reaffirm, or, where appropriate, update his Declaration of Conflict of Interest, to do so he must receive a notice and request via email from Management.
  • The Employee must review, respond and sign the Declaration of Conflict of Interest form and return it to the Compliance Officer, who in turn must classify and treat the information with the corresponding confidentiality.
  • In the case of Employees who are promoted to a managerial, deputy director or director level position, they must submit their Declaration of Conflict of Interest before the formalization of their appointment.
  • Even though the Conflict of Interest Declaration is renewed annually, if an Employee identifies any situation or has any concern about whether a Conflict of Interest, Potential or Actual, may arise, they must inform their immediate supervisor at the time it arises and complement your Declaration of Conflict of Interest at that time.

Supervision and Verification of Compliance with the Policy

Management and Internal Audit are responsible for supervising, monitoring and, where appropriate, auditing due compliance with the provisions indicated in this Policy and must periodically evaluate its effectiveness. Management is also responsible for periodically evaluating its Integrity and Compliance Program, which includes, among others, a series of measures that aim to prevent acts of Corruption. Likewise, it is responsible for provide guidance to Employees regarding this Policy, through the email info@chariklo.net jointly with immediate superiors. If it is necessary to carry out audits, these will be carried out periodically and randomly in the different areas of the Company. All Company Employees must be committed to supporting and collaborating with the work teams in charge of carrying out said audits without hindering or obstructing the audit processes and without providing false or incorrect information. Remember that it is everyone’s obligation to comply and enforce this document and report any act that goes against it through info@chariklo.net

Training and Dissemination

For us it is very important to understand and put into practice what is described in this Policy and in order to promote a culture of transparency, ethics and values, Chariklo offers its Employees and Third Parties, online or in-person courses, which will be announced through the official means of communication of the Company in order to train them so that they can understand the concepts, scope, situations, as well as expose concerns that may occur in the day-to-day work of our work. It is the responsibility of all of us who work at Chariklo or its Divisions to attend the assigned sessions, comply with the times and with the requested evaluations.

Cooperation and Coordination

Management is responsible for generating and standardizing, to the extent possible, this Policy with respect to the Divisions. However, the Divisions are responsible for complying with the applicable legal obligations before the Authorities of each country. Therefore, the Divisions must have an internal regulatory compliance procedure considering the specific obligations of each country on issues of Conflict of Interest, as well as anti-corruption and anti-bribery. Likewise, the Divisions must ensure that they have effective mechanisms that allow them to cooperate and, when appropriate, establish internal coordination among themselves in the development and implementation of policies and activities to prevent acts of Conflict of Interest in particular and of Corruption in general.

Sanctions

The sanctions for non-compliance with this Policy, both for Employees and Third Parties, may be of an administrative, labor or even criminal nature, depending on the seriousness of the act and will be sanctioned in accordance with the internal work regulations and/or the applicable legislation. Within Chariklo, Management will be the last instance in determining the sanction in case of non-compliance with this Policy, without prejudice to the fact that said non-compliance may be additionally sanctioned by applicable legislation and the competent authorities.

Complaints

To report any breach of this Policy or our Code of Ethics, write to info@chariklo.net . You, as well as each of the Chariklo Employees and Third Parties, have the right and obligation to report directly to our superior or Management, any conduct that violates this Policy or any applicable law, regulation, policy or internal procedure. and in general, any unethical behavior. Likewise, it is our duty to cooperate with any internal or external investigation and maintain its confidentiality. Employees who make a false or malicious report may be subject to disciplinary sanctions. Remember that failure to report a serious ethical breach may have disciplinary consequences for you, as you could be covering up an unethical act or crime. Anonymous complaints may be submitted if the complainant so wishes, however, it is recommended to leave a contact person to follow up on the investigation. It is important that you know that Chariklo has adopted all reasonable and justified measures to protect the confidentiality of a report and the complainant and also guarantees at all times that no type of retaliation will be taken against you for reporting. Likewise, it is important to make it clear that no provision in this Policy will be understood as an obstacle for people to directly file complaints with the competent authorities. In such cases, it is recommended to notify our Management so that, if necessary, they can assist with the corresponding authorities. All complaints will be monitored by Chariklo Management. Management is the body in charge of supervising and operating the corresponding complaints for proper investigation.

Questions and Comments

If you have any questions related to this Policy or any comments or suggestions, write to us at info@chariklo.net

Annex A – Declaration of Conflict of Interest