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Sustainability Report

2019Grupo Colombina

This document is an executive sustainability report. For more information about our sustainable management, visit: sostenibilidad.colombina.com

Pierangelo MarchettiVice-President ofStrategic Planning [email protected]

Florencia PeñaVice-Presidentof Corporate [email protected]

Colombina S.A.Carrera 1 # 24-56Edificio BelmonteTelephone Number +57 (2) 886 1999Fax +57 (2) 885 1811Cali, Colombia

Contact

Pierangelo MarchettiVice-President ofStrategic Planning

Isabella HenaoCommunications Director

Maria Juliana GiraldoStrategic Planning Analyst

Design and DevelopmentGood;) - Communication for Sustainable Development

Editorial Direction

Sustainability Report

2019Grupo Colombina

Index

Messagefrom the CEO04

Environmental Performance2003Social Development3204

Sustainability Strategy1602

Organization Profile0601

Promoting Competitiveness

40 05Our

Employees48 06

Transparency and Nutrition

64 07Economic Efficiency

and Continued Growth70 08

Message from the CEOAt Colombina we are convinced that integral and transparent management is essential for building trust with our stakeholders. Therefore, it is a pleasure for me to present our sustainability report.

2019 was a year of important achievements and advances in strategic projects that contribute to the sustainable growth of the business. Our financial performance had a positive dynamic, with a 7% growth in sales and an EBITDA margin over sales of 12.1%, up 500 basis points from the previous year, growing in absolute terms by 9%. This is the result of more efficient management, both in our operations and in our commercial offer.

In environmental matters, our cookies and crackers plant, Colombina del Cauca, achieved a very important recognition: the certification of the Zero Waste System in GOLD Category, highlighting the strategies implemented to reduce and recycle industrial surpluses. It is important to highlight that this is the first time that a food plant in Colombia has received such certification. This news fills us with pride and ratifies our ongoing commitment to implement standards aimed at strengthening environmental management systems.

Being sustainable also means evolving in line with consumption needs. This is why we launched the new image of our La Constancia sauces, which incorporates the benefits of a portfolio free from artificial colors and flavors.

Furthermore, our efforts to eliminate gender gaps have been recognized by the International Labor Organization (ILO), noting that we are the first private sector organization in Latin America to implement the model of pay equity proposed by the ILO. We also became the first food company to achieve the Gold Seal of Equal Employment Opportunity.

This year, we carried out our new ordinary bond issue in the amount of COP 300,000 million, which was welcomed by investors (1.8x the amount offered), and reaffirms the trust we have managed to generate in the financial market.

Finally, I am very pleased to inform you that for the fourth time in a row, Colombina is part of the top 10 food companies with best sustainability practices in the world, according to the RobecoSAM and Standard & Poor’s Sustainability Yearbook. We are proud of this recognition because it reflects our continuous efforts to manage the business in an ethical and responsible manner with all stakeholders, and inspires us to continue strengthening our corporate practices hand in hand with all employees of the organization.

César A. Caicedo J.Chief Executive OfficerGrupo Colombina

01. Organization Profile

Cookies and Crackers Plant Colombina del Cauca, Santander de Quilichao

6 Sustainability Report 2019

We manufacture and market foods of different categories, with sales of around USD 600 million per year. All this thanks to a team of over 7,300 employees who are committed to creating the best flavors and experiences for our stakeholders every day.

In line with our internationalization strategy, in 2016 we acquired the assets of Fiesta S.A., one of the leading and most loved confectionery companies of the Spanish market. We also purchased all the shares of CAPSA (Compañía de Alimentos del Pacífico S.A.), thus consolidating our participation in the Central American market, reaching more than 70 countries and 750 thousand customers worldwide.

We are a Colombian capital food company, which has more than 90 year of experience providing products under a comprenhensive and transparent management model to customers and consumers around the world.

7 Organization Profile

Business definition

We are a global food company that endeavors to delight consumers with its winning combination of innovation and great-tasting products.We are supported by a strong umbrella brand and well known and highly regarded product brands that are effectively marketed so that they’re accessible to all. We are committed to a sustainability strategy that engages all stakeholders.


Our companyin figures

12.1%EBITDA margin

38% International Sales

7,315 direct employees

14countries withtheir own production

1.9 (COP) trillion

Sales of

90countries consume our products

+ than


SUPPLIERS

1,268Raw material and packaging suppliers

2,050 service suppliers

136suppliers evaluated by theSystem B tool

IngredientsSugar ................................25%Fats/Oils .............................. 12%Corn Derivatives .............. 13% Grains/Cereals .................. 11%Dairy Products .................. 9%Essences/Extracts ........... 5%Cocoa Derivatives ............. 4%Fruit pulp ............,,.............. 2%Others ................................ 19%

PackagingFlexible materials ........ 51%Paperboard .................18%Foldable/Cases............. 7%Rigid Packaging .......... 3%Others ..........................21%

MANUFACTURING

5Production plants in Colombia

lollipopsbite size chocolates

hard candies

gummies

#1#1

chocolate cream

ice cream

premium wafer

sauces

1Production Plant in Spain

41%Candies

6%Chocolates and Snacks

23%Cookies and Crackers8%Preserves

7%Ice Cream

16%Accounted for

1Production Plant in Guatemala

3,848 Operators

CONSUMERS CUSTOMERS

LOGISTICS

COMPETITIVE POSITIONIN COLOMBIA

2019 PURCHASE ANALYSIS

PORTFOLIO

20food categories

• Candies• Gum• Chocolates• Snacks• Crackers• Biscuits• Pastries• Ice cream• Ketchup• Mayonnaise

• Mayonnaise-based sauce

• Milk-based desserts• Baby food• Jams• Beverages• Hot sauces• Olive oil• Pasta• Canned

Fish• Coffee

16 63

100% of plantscertified in food safety

Leading position in the confectionery market in the Andean Region, Central America and the Caribbean

43distribution centers

countries where Bon Bon Bum is a market leader

Colombina´s own stores in Colombia

36primary transport companies

788members of logistics staff

404secondary transport vehicles

9shipping lines

4,900containers moved per year

More than

1,864in sales force

750,000 customers served around the world

Over

Sales mix by business

CIRCULARITYAND RECYCLINGArticulation with the National Association of Industrialists (ANDI, for the Spanish original) for the implementation of the Vision 30/30 project.

2030 GOALrecycle 30% of the containers and packaging placed on the market

#2

Value Chain

Sales mix by region

62%Colombia

11%Central America

9%Andean Region

8%Other International Markets

6%USA

4%ENAM Region (Europe, North Africa and Middle East)

Organizational Structure

Alternate

Hernando Caicedo Rezic

Mauricio Caicedo Aristizábal

Jorge A. Ogliastri Mendieta

Jacobo Tovar Caicedo

Hilda M. Caicedo Capurro

María Elvira Domínguez Lloreda

Juan Ramón Guzmán Sánchez

Juan Guillermo Salazar Vallecilla

Ernesto de Lima Bohmer

Principal

Hernando Caicedo Toro

Juan Manuel Caicedo Capurro

Belisario Caicedo Capurro

Jacobo Tovar Delgado

Juliana Gómez Caicedo

Marco A. Caicedo Jaramillo

Carlos A. Ospina Caicedo

Patricia Caicedo Jaramillo

Sebastián Álvarez Caicedo

BOARD OF DIRECTORS

The Board of Directors is comprised of 9 principal and independent members and 9 alternates.


Top (left to right): Eugenio Lozano Domestic Sales VP, Pierangelo Marchetti Strategic Planning VP, Miguel Mejía North America Region and Other Markets VP, Luis Eugenio Cucalón Human Resources VP, Hernán Darío Mejía Legal and Corporate Affairs VP, Eduardo Parra Supply Chain VP.

Bottom (left to right): Marco Tulio Casasfranco Central America and Andean Region Manager, Florencia Peña Corporate Marketing VP, César A. Caicedo J. Chief Executive Officer, Alfredo Fernández de Soto Chief Financial Officer, Luis Fernando Calle Statutory Auditor, Agustín Fernández, ENAM Region Manager (Absent).

CORPORATE TEAM


Destacados

The International Labor Organization (ILO) recognizes Colombina’s work on Convention 100

“Colombina once again demonstrates its vocation for social dialogue and the promotion of equal treatment and employment opportunities, whose

management is a model not only for the country, but for our world for its founding values that are at the

base of its sustainability.”Ms. Carmen Benitez Gambirazio on behalf

of ACTRAV-ILO

This recognition was based on the fact that Colombina is the first private sector organization in Latin America to implement the pay equity model proposed by the ILO.

Colombina: The first food company to achieve the Gold Seal of Equal Employment Opportunity The Seal of Equal Employment Opportunity is a management system certification program in gender equality, granted by the Ministry of Labor and the Presidential Counselor’s Office for Women’s Equality, with the technical support of the United Nations Development Program (UNDP). This certification highlights the company’s commitment to gender equality and the establishment of corporate policies to break the gender gap.

Colombina, one of the best sustainably managed food companies in the world

The Company is listed by RobecoSAM, the company responsible for the Dow Jones Sustainability Index, as one of the best sustainably managed food companies in the world, which enabled its inclusion in the 2020 Sustainability Yearbook, in eighth place.

Colibrí Dorado Award for the Biscuit Factory

The Corporación Autónoma Regional del Cauca (CRC) and ANDI Regional Cauca awarded the Colibrí Dorado distinction to the Colombina del Cauca Cookies and Crackers Plant in the Business category, for its Zero Waste Management System implementation project, where the panel was able to observe the results of this initiative in the environmental, social and economic dimensions, based on the recycling of solid waste, contributing to the generation of jobs and the reduced use of sanitary landfills.


Colombina among the 20 best companies according to Merco Talento

Colombina is one of the most attractive companies to work for in Colombia as measured by Merco Talento 2019, climbing two positions on the national level from the previous year and remaining in fourth place in the food category.

Fabio Echeverri Correa Award

Mr. César Caicedo, CEO of Colombina, was awarded the Fabio Echeverri Correa the Asocajas Award in its first edition, for helping with the strengthening and growth of the country’s economy, the closing of gaps and social development, thus contributing to making Colombia more competitive, equitable and inclusive.

Ordinary bond issue

In 2019, an improved financial structure was achieved through the issuance of ordinary bonds in the amount of COP 300,000 million, successfully placed in the market, since offers were received for COP 442,371 million and at highly competitive rates. The funds received were used in their entirety to replace borrowings, achieving an adequate balance of the debt between the short and long term and significant savings on financial expenses.The Bond Issue and Placement Program was rated AA+(col) by Fitch Ratings.

2WAY award at Goodwill Colombina ranked 20th out of 200 companies measured by 2 Way Good Will Consulting in its most recent reputation study, which examined the following pillars: track record, strength, value proposition, human talent, ethics, transparency, sustainability, innovation and leadership.

In Guatemala, Colombina is one of the most attractive companies to work for

According to the study conducted by the Central American job portal www.tecoloco.com, Colombina ranked 46th among 500 companies evaluated on topics such as: remuneration, benefits, growth opportunities, work environment, social responsibility and company image, among others.


02. Sustainability Strategy

La Paila water storage lake


Sustainability Committee

César A. Caicedo J.Chief Executive Officer

Carlos Andrés OspinaJuan Guillermo SalazarBoard Members

Pierangelo MarchettiStrategic Planning VP

Eduardo ParraSupply Chain VP Leader of Ecological Balance and Promoting Competitiveness

Ana María Juana RojasColombina Foundation DirectorSocial Development Leader

Florencia PeñaCorporate Marketing VPLeader of Transparency and Nutrition

Isabella HenaoCommunications Director

Luis Eugenio CucalónHuman Resources VPEmployee Leader

Maria Juliana GiraldoStrategic Planning Analyst

Sustainability has always been part of our business model, as we understand that the only way to grow and endure over time is by creating transparent, trusting and mutually developing relationships with our stakeholders.

That is why it is part of one of our strategic pillars and it is present in our definition of business.

17 Sustainability Strategy

This definition materializes the priorities of our Strategic Map, in which sustainability is the focal point:

CORO

RATE

STR

ATEG

YCo

rpor

ate

Stra

tegy

We have 17 KPI tied to employee performance evaluation and variable compensation used to monitor these strategic pillars:

Financial perspective Market

Our Sustainability Strategy is Based on 6 Priorities

• Employees• Local community

• Environmental institutions

Environmental Performance

• Efficient Use of Water

• Energy Efficiency

• Climate Change Management

• Waste Management and Reduction

• Packaging Strategy

• Education

• Culture

• Sports

• Communities around production plants

• Employees and their families

Social Development

Stak

ehol

ders

Rele

vant

Issu

esSu

stai

nabi

lity

Stra

tegy

Organizational Culture Colombina Umbrella Brand Strength

ROIC Sales GrowthWorking capital/

salesSuccess in innovation

Contribution Margin

Brand Recall (RAC)

ColombiaPerfect

Order RateEBITDA MarginMarket Share

Colombia (Nielsen Basket)

1 2 3 4 5

Strategic Map

Our Business Definition Frames our Strategy

“Global food company that endeavors to delight consumers with its winning combination of innovation and great-tasting products. We are supported by a strong umbrella brand and well known and highly regarded product brands that are effectively marketed so that they’re accessible to all.It is committed to a sustainability strategy that engages all stakeholders”.

6 7 8 9


Processes Strategic Capital Sustainability

• Relations with suppliers and contractors

• Big Brother

• Quality and Safety in Production

Processes

• Suppliers• Contractors

Promoting Competitiveness

• Well-being at work and working conditions

• Health and safety

• Organizational Development

• Employees

Our Employees Transparency and Nutrition

• Improving the nutritional profile

• Offer innovative products

• Relations with customers and consumers

• Consumers• Customers

Economic Efficiency and Continued Growth

• Financial Sustainability

• Corporate Governance

• Risk Management

• Shareholders

Innovation and Marketing Low Cost

Efficient Distribution

Model

Cost of service/

sales

Cost of transport/

SalesWork

productivityOrganizational

ClimateRobeco SAM assessment

ratingColombina 100% Sales

Total payroll/sales

Global Plant Efficiency

(EGP)

10 11 12 13 14

Sustainability

15 16 17

19 Sustainability Strategy

03. Environmental Performance


To contribute to the conservation of the planet, we are identifying and analyzing our most significant environmental impacts under the relevant issues defined and working on them in order to minimize them.

The relevant issues of this priority are:

1.Efficient Use

of Water

2.Energy

Efficiency

4.Waste

Management and

Reduction

3.Climate Change

Management

5.Packaging Strategy

21 Environmental Performance

1. Efficient Useof Water2 0 2 3

G o a l

Reduce water consumption by 19%

compared to the base year 2015.

Water consumption (m3/tp)

201520162017201820192019 Goal

4.34.24.14.04.43.8

% Var vs. Base Year 2.3%2019 Goal Comp %: 84%

In 2019, we had a growth of 2% compared to the base year, mainly due to two specific cases at the La Paila and CAPSA plants. This year we implemented the project to modernize the water treatment systems, which in turn meant that the water recirculation system had to be further adjusted and could not be used during the year. The entire water recovery system of the confectionery processes of the two plants are planned to be refurbished and modernized by 2020.

Covers 100% of the production

Thanks to the work carried out on the model for recycling industrial

surpluses, the Colcauca cookies and crackers plant achieved its certification

of the Zero Waste Management System in the GOLD category, awarded by ICONTEC and the

Corporación Basura Cero Colombia.


917,717 m3

total waterconsumption in 2019

56.8%

22.7%

20.6%

RiverWellAqueduct

Total water consumption by sources

We have plans in place for efficient water use atthe production plants, based on an approachof reduction and optimization of the resourcethrough strategies such as: awareness andtraining campaigns, optimization of cleaning,inspection and deviation control plans, reductionof the use of chemicals and development ofcontinuous improvement programs aimed atoptimizing water as a vital resource.

Since 2017, we have carried out water risk analyzes at our main production plants, based on the assessment of water-related risks, starting with the contextualization of water availability at the global level and ending with the proposal of prevention and mitigation actions that will allow the more efficient use of water as a vital resource for the sustainability of the business.

We actively participated in the foundations ASORIBU (Asociación de Usuarios Río Bugalagrande [User Association]), AURPA (Asociación de usuarios Río La Paila [User Association]) and ASURTUMO (Asociación de usuarios de los Ríos Tuluá y Morales [User Association]), dedicated to watershed protection and conservation for the equitable use of water in the region.

We have Wastewater Treatment Plants (WWTP) at our 7 production plants, in which COP 20.6 million have been invested over the last three years.


2 0 2 3 G o a l

Reduce energy consumption by 3% compared to

the base year 2015

In 2019, we reduced the Business Group’s consumption of crude oil by 89% and coal by 25% in the share of energy by primary sources with respect to the previous year.

95.1%

1.1%3.8%

Gas KwhCoal KwhCrude oil Kwh

Direct Energy Consumption by Primary Sources

At the La Paila plant, we had a technical emergency with the operation of one of the boilers, which led to the activation of the contingency plans and the impact on boiler efficiency with respect to its normal operation. However, during the year the applicable legislation verified by the environmental authority was complied with, and an opportunity for improvement was identified, which generated an investment project for the year 2020 for the replacement of the boiler with a state-of-the-art system.

EnergyEfficiency

Energy consumption kWh/tp

% Var vs. Base Year 5.6%2019 Goal Comp %: 100%

201520162017201820192019 Goal

1,1511,1991,1831,1971,2161,209


2.


At the cookies and crackers plant, we implemented the BIG DATA project, a connection system that is carried out through a scalable industrial communications network for the capture and analysis of energy and natural gas consumption, which provides us with strategic recommendations that contribute to the company’s energy savings and environmental sustainability.

At the CAPSA plant, we managed to adapt the boiler to run on LPG (Liquid Petroleum Gas) fuel and reduced the consumption of hydrocarbons by the Bunker (crude oil), achieving a cleaner emission of combustion gases.

3.

Carbon Footprint (Scopes 1 and 2) KgCO2/tp

201520162017201820192019 Goal

327322267265276267

Climate Change Management

2 0 2 3 G o a l

Reduce the carbon footprint by 22% (Scopes 1 and 2)

Kg CO2 / tp compared to the base year 2015


% Var vs. Base Year -16%2019 Goal Comp %: 96%

In 2019, we included our Spain plant in the carbon footprint indicator for a coverage of 100% of production.


Total Emissions (tons of CO2)

46,550Scope 1

14,877Scope 2

8,211Scope 3

604 Kg Co2

During 2019, we launched the “Carpooling” sustainable mobility program at our headquarters, through which we aim to contribute to the environment, our employees and the city. The main objectives of the program are environmental and social, promoting a sustainable and collaborative culture, reducing employee mobility costs, optimizing time and contributing to climate change by reducing CO2 emissions.

Through the program, we managed to prevent the emission of


We reduced coal consumption by up to 25% compared to the previous year, using natural gas as the main fuel to run boilers at our La Paila plant.

We achieved the Organizational Neutral Carbon Seal issued by the Corporación Autónoma Regional del Valle del Cauca (CVC) and endorsed by ICONTEC at the La Paila plant, which aims to improve air quality through the measurement, certification and formulation of greenhouse gas emissions management plans.

Since 2017, we have disclosed our management in the Carbon Disclosure Project (CDP) report, an International organization in charge of measuring and disclosing the climate change strategy of participating companies.


We made 1,137 trips in electric trucks avoiding the generation of 17.48 tons of CO2.

We achieved a better consolidation of La Paila’s high-capacity fleet, reducing 172 trips, which allowed us to avoid emitting 82.74 tons of CO2 into the environment.

We traveled more than 60,000 km in our electric vehicles

Additionally, by 2020 we will incorporate 6 specialized gas combustion trucks on several defined routes.

WE ARE USING ECO-FRIENDLY VEHICLES

La República Newspaper recognizes Colombina as one of the companies that has demonstrated that it is possible to achieve efficiency in the transport operation without affecting the environment, by acquiring vehicles with clean technologies and low fuel consumption.

LOGISTICS AND TRANSPORT INITIATIVES (SCOPE 3) In 2019, we continued our efforts to optimize our transport processes and contribute to environmental sustainability through the following initiatives:


Waste Management and Reduction

2 0 2 3 G o a l

Achieve 75% of waste utilization


Waste by type and disposal method

Use of waste

201520162017201820192019 Goal

61%61%66%71%72%72%

Product cuttings KgCardboard and paper KgGeneral plastic KgMetal KgOther recoverable waste KgUnusable waste KgHazardous waste Kg

48.8%

10.7%

5.7%2.1%

4.8%

0.4%

27.5%

4.

+11 percentage points vs. Base Year 2019 Goal Comp %: 100%


By implementing the Zero Waste Management System at the cookies and crackers plant, we have managed to:

Become the first food production plant in the country to be Zero Waste certified in the GOLD category by ICONTEC with a rating of 94.3/100 points.

Manufactured products generating less waste.

Contributed to the reduction of plastic waste.

Recycled 95.5% of the industrial surpluses generated at the plant.

Sent less than 4.5% of the waste to landfills.

What’s coming up in 2020:

Extend certification to the other Grupo Colombina plants.

Extend negotiations with

suppliers.

Extend the industrial surplus

management model to the remaining

plants.

In the second half of 2019, we implemented the integral model of industrial surpluses at the cookies and crackers, candy and preserves plants, identifying the use of each of the surpluses to ensure their final disposal.

The ice cream plant was recognized for its environmental management and performance in the 19th version of the District Environmental Excellence Program (PREAD) of the Bogotá Department of the Environment, ranking in the second level. This award recognized efforts made in waste management programs, environmental management systems, and sustainable production and consumption. As well as the optimization of the production systems to reduce negative environmental impacts.

More than 4,400 tons of edible and non-edible waste were recycled.


PackagingStrategy

We are committed to operating sustainably under the principle of the Circular Economy, which is based on designing products with no waste or pollution, aiming to keep materials in use and regenerating natural systems.

Our packaging strategy is focused on the following three components:

Baseline reduction:We aim to reduce calibers and/or weight, replace materials, reuse cardboard boxes and eliminate unnecessary material from our containers and packaging.

1.

We developed an internal process for the return of cardboard boxes, under the Recovering Program, which has enabled us to:

4 million

500,000

cardboard boxes since 2012.

cardboard boxes in 2019.

Recover more than

Reuse more than

2,290in 2019.

Reduce felling by

5.Recyclability:We are focused on updating the safety data sheets of packaging materials, applying Eco-effectiveness and Eco-design methodologies and eliminating materials with no recyclying market.

2.

Circularity and recycling:We are focused on participating in collective collection programs, generating alliances with distribution channels, monitoring the secondary raw materials market and standardizing material alternatives according to market demand.

3.

In the year 2019, we joined the collective plan: 30/30 Vision which will allow us to develop a national strategy for the collection and transformation of our containers and packaging. By 2020, the transformation goal is 10%, reaching 30% by 2030.

We have established a secondary raw materials monitoring plan to ensure the best value for the transformation of our post-consumer packaging materials and to provide feedback to our packaging engineering, purchasing and commercial areas regarding possible changes on the market that can impact their competitiveness.


04. Social Development


Contributing to the progress of society is an objective that we are developing through the Colombina Foundation, focusing on the following relevant issues:

1.Education

2.Culture

3.Sports

33 Social Development

“When I was in school, it was very difficult to imagine that I would be

able to pursue the career of my dreams because of many limitations,

including economic limitations, but with my faith in God and the support of my family, my dream came true. The Jaime H. Caicedo

scholarship has been very important for me, because it contributes to

improving my quality of life and that of my family. I feel like I am much

more capable and have more tools to accomplish my goals or dreams”.

Johan Andrés Valencia LassoSon of Marianela Lasso Campo Supporting

Operator of cookies and crackers plant ProcessesHe is a beneficiary of the Jaime H. Caicedo

Scholarship and is currently studying International Marketing and Advertising at Icesi University.

732 beneficiariestook part in our programs in 2019, distributed as follows:

Distribution of participants by lines of action

EducationCultureSportsOther programs

31.2%

38.3%

23.3%

7.2%


3%Charitable donations

15%Business initiatives (cultural and sports sponsorships)

82%Investment in the communityIn 2019, we invested more

than COP 4.6 million in social development, which is represented as follows:

Investment in Social Development


363 beneficiaries

Family School

Advances in 2019:We delivered the first “Wellness Guide” (domestic violence, routes of care and prevention of drug addiction).

EducationAt Colombina, we are certain that when we provide educational opportunities, we are giving children and young people tools to improve their social and economic options, enabling them to be productive and participative citizens.

In 2019, we will continue to develop the following programs:

36 beneficiaries

55 beneficiaries

Jaime H. Caicedo Scholarships

Reading Club

Advances in 2019:

• Seven new scholarships were awarded.

• We continued to carry out the Jaime H. Caicedo Volunteer Program, in which 21 young scholarship holders were engaged in supporting the activities and events carried out in the programs, as part of their social commitment in La Paila / Zarzal and Santander de Quilichao.

Advances in 2019:

In order to monitor their progress in the program, participants are evaluated at the beginning and end of each process, of which, 100% have shown positive evolution, in terms of improving their reading level and reading comprehension.

136 beneficiaries

Children’s Homes

Advances in 2019:

• Articulation with Propacífico’s Valle Por y Para Todos initiative in order to collect relevant information on early childhood in Cauca and Valle del Cauca.

• Adaptation of the spaces of the Children’s Home in La Paila, aligned with the regulations in force regarding spaces and specifics for early childhood care.

1.

Note: The number of beneficiaries described in each program is cumulative


CultureWe believe in the power of culture and art to achieve social transformation in communities.

That is why we are carrying out different programs in which children and young people explore their talents and acquire new skills, which allow them to find different life options and occupy their free time, thus keeping them away from the social problems that arise.

The following are the advances made in our cultural programs:

2.

Advances in 2019:

• Presentations by TIMCCA alumni at the Petronio Álvarez Festival, achieving first place in the category of Cauca Violins (Al son de Ararat), second place in the category of Cauca Violins (Romance Norte Caucano), third place in the category of Cauca Violins (Cantoras de Manato).

• Participation in the Colombianidad Music Festival (Riosucio, Caldas).

• Presentation at the Weaving Culture Seminar organized by the UAO.

• Presentation at the Mestizaje Festival, Santander de Quilichao.

165 beneficiaries

TIMCCA Colombian and Cauca Music Program

56 beneficiaries

Dance Group

Advances in 2019:

56 children from La Paila - Zarzal are part of this program that highlights dance as an important tool for expression and social interaction.

58 beneficiaries

Sonidos de Paz - San Antonio District (Santander de Quilichao)

Advances in 2019:

• In 2019, 20 new children joined the Sounds of Peace Band.

• The same year, this musical group continued its alliance with the San Antonio Educational Institution to implement the program during school hours and to strengthen the participation of its students.


MESTIZAJE FESTIVAL: THE THIRD MEETING OF CULTURAL DIVERSITY - 2019, SANTANDER DE QUILICHAO

As part of the sustainability initiatives supported by the Colombina Foundation, the Mestizaje Festival, organized by the Armonía Caucana Committee (made up of parents from all the Colombina Foundation programs in Santander de Quilichao), was held for the third year in a row.

On this occasion, representatives of Afro, indigenous and peasant cultures from Santander de Quilichao and surrounding municipalities attended.

The third version of the festival made it possible to show and strengthen respect for the cultural wealth and diversity of the region, as a fundamental element of the identity and coexistence of its different ethnic groups, and at the same time to offer a space for meeting and family fun for the proper use of free time in the context of public space.

During the activity, emphasis was made on the importance of carrying out this type of action as a measure of adaptation and mitigation in the face of climate change, in addition to highlighting the fragility of this micro-watershed in the face of the municipality’s social and production dynamics.

With the support of the participants of the Santander de Quilichao programs, their families and the Corporation for the Sustainability of the Río Palo Sub-basin (Corporación para la Sostenibilidad de la Subcuenca del Río Palo - CORPOPALO), more than 300 trees were planted on the Quilichao River bank.

SportsBy promoting sports skills, we encourage healthy lifestyle habits in children.

3.

Advances in 2019:

In 2019, the initial and final sports conditions of each of the participants were assessed in order to come up with new action plans for the year 2020. These assessments showed that 12% of the participants had improved their motor skills and soccer techniques.

170 participants from the Paila Zarzal community.

Jaime H. Caicedo Club


In 2019, 22,000 players from 20 departments of the country and one from Guatemala participated. Additionally, over 400,000 Bon Bon Bum wrappers were collected, which are taken into the company’s recycling process.

BON BON BUM CUPThe Bon Bon Bum Cup was born in 2009 with the aim of promoting sports and recreation for the country’s children and young people, and to keep them away from violent environments. In this cup, it is not just a soccer tournament at play; it is the dreams of hundreds of young people who, through their talent, are striving to make their way in the world of sports.

In its first year, 39 teams from different departments in Colombia participated in the tournament. Today, 10 years later, there are more than 1,100 teams.

“My advice to the players of the cup is to take this

tournament as an opportunity, play it in the best way, show their full potential and prove that they are at the level to

play with a junior team in the country”.

Harold Andrés Aguirre Player of the Deportivo Cali

Team

Through the Colombina Foundation, product donations are made to different institutions in order to provide assistance for the most vulnerable populations.

COP 1.6 million

In 2019, these donations were valued at more than


05. Promoting Competitiveness

Tuluá, Valle del Cauca Preserves Plant


At Colombina we strive to permanently contribute to the growth of our suppliers, and we know that one of the best ways to do so is by developing strategies with them to increase their levels of competitiveness. We are also aware that when we have a competitive supply chain, we are delivering the best products to our consumers.

To develop this sustainable priority, we focused on three relevant issues:

1.Relations

with suppliers

and contractors

2.Big Brother

3.Quality and

Safety in Production Processes

41 Promoting Competitiveness

“For Alimentos Prisa, it has been a great honor to be selected as part of the Big Brother program directed by Colombina. We greatly value the

initiative led by the company, which aims to support us in achieving excellence in all our operational

and administrative processes, providing us with know-how and expertise in the different areas we need to strengthen. This is the first time we have seen a major, globally recognized private company

like Colombina share its knowledge with its suppliers in order to support the supply chain.”

Jose Andrés Sáenz Sales Manager of Alimentos Prisa

In 2019, we worked with the new structure of the Big

Brother program that allowed us to expand coverage not

only nationally, but to impact international suppliers, as in the

case of Guatemala.


2 0 2 3 G o a l

Have 68 certified suppliers

Relations with suppliers and contractors

Building solid, long-lasting relationships with our suppliers that go far beyond the transactional aspect, has been one of our purposes, because we are certain that as we do so, we will not only guarantee the quality of the products and services they provide, but we will also contribute significantly to their growth.

SUPPLIER CERTIFICATION PROGRAM

Through this program, we aim to align our suppliers with integrated management systems, ensuring that their continuous improvement results in the quality of the products and services they provide.

The process begins with an assessment of their compliance with indicators and, according to the results, an action plan is made with the objective of certification.

We certify suppliers who have shown excellent performance and meet the highest quality standards. This process is supported by SGS Colombia, which ratifies the transparency in the assessment of our partners.

1.


In 2019, 7 companies started the program: 2 in logistics services, 2 in raw materials and 3 in packaging.

For the first time, a supplier of flexible packaging (wrapping and packaging) is part of the group of companies to be certified. Similarly, two suppliers that were beneficiaries of the Big Brother program were included, in order to provide their organizational strengthening process with continuity.

SOCIAL AND ENVIRONMENTAL IMPACT ASSESSMENT

Assessing the environmental and social impact of our value chain is an opportunity to identify strengths and aspects that require our support in order to help suppliers in their sustainable growth.

In the last 3 years, 475 suppliers have been assessed. However, in 2018, we changed our methodology and started this process with System B, a measurement tool based on the highest management indicators worldwide in the areas of Community, Environment, Governance, Employees and Customers.

In 2019, 68 suppliers were evaluated with this tool, in which we identified that 15% of the participating companies have environmental impact mitigation plans in place. With respect to the social variable, 6% have positive management in terms of practices and policies regarding community service and donations, job creation, inclusion of vulnerable populations, gender equality and practices with suppliers, among others.


Through this program, we support our supplier companies by transferring good practices in order to improve their production, administrative and commercial processes and in the construction of their foreign trade area.

2 0 2 3 G o a l

Have 90 Big Brother suppliers

Big Brother

It is important to emphasize that the entire process of transferring good practices takes place through corporate volunteering by executives from our organization.

36Big Brother suppliers

9have replicated the model with their suppliers (Little Brother)

6have started their exports and 1 is in the process of doing so

+ than 600hours of corporate volunteering

One of the main factors in the regions’ economic and competitive growth is the generation of a business network, which Colombina has proposed through the Big Brother program.

2.


2 0 2 3 G o a l

100% of the production plants must have at least one certification in Management

Systems

Quality and Safety in Production Processes

Ensuring safe and high quality food is an ongoing task for our teams.That is why we have comprehensive systems, which have enabled us to achieve the food safety certifications of 100% of our products and their compliance with the international and government standards of each country.

3.

CERTIFICATIONS OF OUR PRODUCTION PLANTS

BPM HACCP ISO 22000 FSSC 22000 BRC FOODBRC FOODRATING A FSMA ISO 9001

Safety Quality

ISO 14001

ISO 14000ZERO

WASTE OEA-BASC CTPAT OEA

Environment Supply chain safety

100% of our production plants have Food Safety certifications.

BSCI

Corporate Responsability


Our agricultural raw materials have the following certifications:

La Paila

Colcauca

Preserves

Bogotá Ice Cream

Medellín Ice Cream

CAPSA

FIESTA

New Certification

2019

New Certification

2019

New Certification

2019

New Certification

2019

New Certification

2019

New Certification

2019

New Certification

2019

New Certification

2019

New Certification

2019

ISO 14001

ISO 14001

ISO 14001

Palm Oil Sugar CoffeeSoy Cocoa Grains (Wheat, Barley, Rice, Corn)



06. Our Employees

Cookies and Crakers Plant Employee, Santander de Quilichao

1. Well-being at work and

working conditions

3.Organizational Development

2.Health and

safety

49 Our Employees

Improving the quality oflife of our employees andtheir families is essentialto building a World-Class Colombina. To doso, we are focused on threerelevant issues:

WE WON THE GOLD IN GENDER EQUALITY

“I was proud to be part of the first team of women to be trained in the fall protection course, a job that has usually been done by men. Now we are showing that women can also be trained in these topics and do it just like men do and

even better.”

Darly Obany UrbinaSupporting Operator of Processes

Thanks to the commitment and effort of all our employees, we have

managed to build a company with more inclusive

processes and environments.

This resulted in the Gold Level certification of the

Equipares Gender Equality Management System,

making us the first food company to achieve this certification with a score of 99.7% compliance with

the requirements.

Women in Colombina

42%

HoldingManagement Positions

42%

Have management positions in income generation

44%

Are in (junior) management positions

38%

Are in senior management positions two levels below the CEO


7,315 employees are on our team.

11.4%

In 2019, we had a new hiring rate of

Employee participation by contract type

84%Direct

16%Indirect

Turnover rate 17.8%2016

15.7%2017

11.5%2018

11.3%2019

*Outsourced employees not included

51 Our Employees

In this sense, we have focused on developing work practices based on strategies that strengthen labor rights and generate an excellent organizational climate.

2 0 2 3 G o a l

550 additional employees with their

own homes in the 2020-2023 period

Well-being at work and working conditions

Proper management of human talent not only contributes to the competitiveness and profitability of the organization, but also improves the quality of life of each employee.

OUR GOAL IS HOUSING FOR ALL

We have set the goal of supporting employees in buying their own home. That is why we created the Housing for All program a few years ago, which consists of providing those interested with financial advice, guiding them in the application process to access home loans and/or subsidies from family compensation funds, and granting them interest-free loans.

1,127have bought their own home

employees

Thanks to this program, 1,127 employees have bought their own home, of which 171 did so in 2019. Similarly, through the Colombina Foundation, COP 61 million have been granted in housing aid.

1.


WE TAKE CARE OF OUR EMPLOYEES AND THEIR FAMILIES

COLOMBINA VITAL PROGRAM

Through this program, we promote healthy lifestyles to improve our employees’ wellbeing and health.

Through the application of occupational exams and wellness surveys, cases requiring personalized attention are identified and medical support and advice on healthy eating is provided, motivating these individuals to attain achievable and measurable results.

In 2019, we created the Wellbeing Guidelines, an educational material to promote habits and behaviors that favor the development of wellbeing in the lives of employees and their families.During the process of delivery and socialization of the guidelines, emphasis was placed on the creation of the family structure and strengthening the role of parents and community members in general.

230So far,

have been assisted by a nutritionist.

individuals

53 Our Employees

MI BIENESTAR FINANCIERO MY FINANCIAL WELLBEING PROGRAMListening to and getting to know the needs of our employees in depth allows us to strengthen the strategies aimed at improving their quality of life. As a result of the different socio-demographic surveys administered, the “Mi Bienestar Financiero” program was born, which provides education in personal financial management and priority support for employees with a high level of debt.

1,536

141

693

have completed the basic financial module

individuals received personalized support through financial institutions. Aiming to reach around 300.

have completed the basic financial module

individuals

individuals

individuals

Training in family financial management

Identification of the actual state of debt.

Review of the current and future flow of family income and expenses.

Advice for the payment of debts with financial institutions or business loans.


PENSION ADVICE -PAYS (PENSION, SUPPORT AND INSURANCE) PROGRAM

HUMAN RIGHTS

Through pension advice, we give employees and their families peace of mind so that they can make objective decisions regarding that stage of job consolidation that we all need to reach.

Since its creation, Pays has focused on reviewing and/or correcting work histories, conducting and reviewing pension simulations, providing support in applying for old age, disability, survival and minimum guarantee pensions, as well as providing pension advice to employees’ families.

We adhere to the United Nations Guiding Principles on Business and Human Rights, and in 2019, we continued our diligence process in order to comply with International Human Rights Standards and prevent and/or mitigate all risks of actual or potential impacts identified in our activities.

1.

1,277benefited from this program in 2019.

employees

Diagnosis of Compliance with International Human Rights Management Standards, considering 80 compliance indicators derived mainly from international standards in the field of Human Rights and business.

The main actions carried out this year were:

The company achieved a total score of 60% on the implementation of indicators, which places it in one of the positions of greatest compliance at the national level, and even in comparison with the largest companies at the global level measured annually by the Corporate Human Rights Benchmark.

55 Our Employees

2.

3.

Human Rights Impact Study:

Creation of a virtual course on Human Rights:

This study evaluated both actual and/or potential impacts found within the company’s own activities, as well as among the members of its business partners and value chain.

These impact risks were prioritized according to their severity to people’s rights, their scope, scale and possibility of remediation, as well as their likelihood of occurrence.

No real risk of high severity was identified either within the company’s own activities or within those of its value chain. In fact, the severity of most of the risks identified is low.

In order to educate and raise our employees’ awareness of the importance of Human Rights and their impact, the Human Rights course was included in the Colombina Corporate University, which is available to everyone and allows them to access with no restrictions. So far, 890 individuals have taken the course.

“It is concluded that Colombina’s management is solid in terms of Human Rights, and is advancing

a comprehensive process of implementation of Human Rights Due Diligence in accordance with the main international standards

that currently prevail on the matter at the global level”

Law & ConsultingFirm that conducted the impact study.

4.Human Rights in the Supply Chain:

Since 2018, we have been diagnosing the status of supplier companies in terms of human rights through the System B tool. In 2019, 12% of those who answered the survey had a score of less than 50 points on the Human Rights policy variable, showing the absence of practices related to this issue.

For this reason, in 2019, we held a training workshop with the participation of 33 companies supplying raw materials and providing transport services. This workshop served as important input for them to create their Human Rights policy with the support and advice of our supply team.


5.Freedom of Association:

In 2019, Grupo Colombina and Sintracolombina were invited by the ILO (International Labor Organization) to represent Colombia at the Tripartite South-South and Triangular Cooperation Meeting on Equal Pay, to share the experience of piloting implementation of the Equal Remuneration Convention, 1951 (No. 100) with private sector companies, governments and unions from other countries.

2,435are unionized and represent 39.6% of the company’s employees

employees

6.Reporting Mechanisms:

Our ethics line is the mechanism we have created to report possible risks of human rights violations and cases of non-compliance with our Code of Responsible Conduct. The cases reported through this channel are assessed by a committee in charge of following up and taking the respective actions.

In 2019, there were 7 cases, all of which were resolved.

57 Our Employees

7.Gender Equality:

At Colombina, we recognize gender equality as a key element for the development of our business, and the best way to continue building a diverse and inclusive culture that nourishes us with the potential of both men and women, and recognize in difference and diversity the qualities that now allow us to be more empathetic and competitive.

2. We signed the agreement

on “Equal Pay with a Gender Perspective to

Reduce the Wage Gap in the Private Sector” with

the ILO and measured ourselves using their

methodology in terms of compliance with

Convention 100.

4.We participated in the measurement of PAR

Ranking, a virtual tool that measures organizations’

performance in terms of gender equality and rewards organizations

that are already promoting equitable practices. In this

sense, we came in Third Place on the regional level.

3. We committed to the

Business Pact for Equality of the Cali Mayor’s Office.

Through this Pact, we proved to be a company

that promotes affirmative actions and good practices towards women, ensuring

inclusive and equitable spaces within

our organization.

1.The second external audit was conducted,

through which we were awarded the Gold

Level certification of the Equipares Gender Equality Management System, making us the first food company to

achieve this certification with a score of 99.7%

compliance with the requirements.

In 2019:


2 0 2 3 G o a l

Occupational accident rate 6.5%

Health and Safety

We are promoting best practices in health and safety in a preventive manner, generating a culture of self-care and empowering our leaders to have greater control over risks.

2.7%

37.42.2

0.49%

8.5%

2019

20192019

2019

2019

3.2%

21.51.7

0.46%

8.4%

2018

20182018

2018

20184.8%

24.21.1

0.24%

7.9%

2017

20172017

2017

2017

2.9%

21.11.5

0.33%

6.4%

2016

20162016

2016

2016

Occupational Health

IndicatorsWork- related accident rate

Occupational Illness Frequency Rate

per 1 Million Hours Worked (OIFR)*

Occupational illness rate*

Lost Time InjuryFrequency Rate

per 1 Million HoursWorked (LTIFR)

Total absenteeism

rate

2.

* Does not include subsidiaries

* Does not include subsidiaries

59 Our Employees

OCCUPATIONAL SAFETY AND HEALTH MANAGEMENT SYSTEM

In 2019, we implemented the program of safety and hygiene, as well as the preventive and occupational medicine program covering our suppliers and contractors. We highlight the following actions:

Internal audits were conducted at each of our plants, logistics headquarters and main office with personnel certified for this work.

We scored 87% on the evaluation of minimum standards according to Resolution 0312.

Minimum Standards Res. 0312 / 2019

CRITICAL Less than 60%

MODERATE Between 61% and 85%

ACCEPTABLE Greater than or equal to 86%

PREVENTIVE AND OCCUPATIONAL MEDICINE

In 2019, we carried out the following actions through the area of Preventive and Occupational Medicine:

Application of the Psychosocial Risk Survey to 3,931 direct employees of the organization in Colombia.

Health sessions with emphasis on:

Support was provided to employees going through extended disability processes.

Breastfeeding rooms have been installed at all locations as an initiative that allows us to recognize the rights of women and early childhood, favoring all breastfeeding mothers working for the company regardless of the type of contract, contributing to maintaining the health of mothers and newborns and strengthening the organizational climate.

Sexual and reproductive health serving more than:

300 employees

Educational campaign for the prevention of addictions to drugs and alcohol for employees and their families.

In line with the Road Safety Plan, leaders and teams of the commercial area were trained in the implementation of the technical-mechanical inspection of the vehicles that employees use to do their jobs, and drug and alcohol testing was carried out on target groups.


Thus, through organizational development, we are implementing new educational proposals that are within the reach of all our employees and cover the necessary topics to continue raising the competitiveness curve and improving the interpersonal skills of our teams:

2 0 2 3 G o a l

Average number of training hours greater than

or equal to 37 hours per year per employee

Organizational Development

The constant technological changes mean that the speed at which businesses and the world in general change is increasing. This is creating new challenges and opportunities for us.

$2,540 $646 347of Colombian pesos invested in training

Female Male ManagementPositions

Operational positions

ManagementPositions

Operational positions

of Colombian pesos granted in educational aid

benefited from educational aid

millions millions employeesIn 2019

Average hours of training per employee

Direct employee category

Temporary employee category

Average number of training hours per year for direct and temporary employees

26.6

24.0 42.728.928.2 47.920.9ManagementPositions

28.0

3.

61 Our Employees

Our Office of the Legal and Corporate Affairs Vice President was recognized as one of the most influential legal teams of the country’s companies in the publication “GC Powerlist - Colombia Teams 2019”, ranked by The Legal 500.

Since its creation, we have impacted 5,800 direct employees, who have taken an average of 5 modules of virtual and face-to-face content on different topics.

COLOMBINA CORPORATE UNIVERSITY

PERFORMANCE ALIGNMENT PROGRAM

The Corporate University is our most recent commitment to organizational development through which we aim to raise the level of internal knowledge, and acquire new skills that will allow us to move forward in favor of trends that impact the business.

In 2019, we extended the benefit of training of some courses of the platform to 18 companies that are part of the Big Brother program, thus reaching 100 users.

The performance indicator system is 68%. These indicators are aligned with corporate KPI.


Based on this experience, thanks toColombina World Class, employeeshave strengthened their capacityof analysis, critical thinking andinterpretation of information.

COLOMBINA WORLD CLASS PROGRAM

This program has been an important investment in cultural transformation, through which we are striving for operational excellence by means of a training and development plan involving all the employees of the production plants.

Since it began in 2014, Colombina World Class (CCM, for the Spanish original) has increased commitment and empowerment at all levels of the organizational structure by providing greater knowledge of factory processes and promoting collaborative work.

The following are the results for 2019:

cop $8,246 in benefits from reduction in Cuts, downtime and Dismissals, and postponement via Capex

million

cop$3,151

in savings from the implementation of the Productivity and Improvement Teams Programs

million

2,984trainedindividuals

39,616of traininghours

63 Our Employees


07. Transparency and Nutrition

Our main objective is to offer our consumers better products and better ingredients every day through the following relevant issues:

65 Transparency and Nutrition

1. Improving

the nutritional profile

3.Relations

with customers

and consumers

2.Offering

innovative products

In recent years, we have focused on developing a strategy for the nutritional evolution of our portfolio with better-tasting products in appropriate portions in line with changing consumer trends in lifestyle, diet and the growing global regulatory requirements and the dynamic competitive environment.

This will also allow them to compare the products with their nutritional needs and with other products on the market, thus demonstrating their constant progress in reformulation for the reduction of critical nutrients. To this end, we have voluntarily committed to front labeling based on the GDA system in all references at the national and international levels. The labeling used complies with the suggestion provided by ANDI Colombia and as agreed in the self-regulation agreement signed with this association by Colombina in 2014.

Improving the nutritional profile

We aim to make our products increasingly transparent so that consumers can more easily understand their nutritional content.

695references with positive social impact, representing 32% of total sales.

2,080 references with GDA front labeling, representing 95% of the total references in the portfolio.

References with positive social impact include reduction of critical nutrients, addition of positive nutrients, replacement of artificial ingredients or additives with natural ones and other improvements that benefit consumer or allow for cleaner/healthier labeling.

This year we finished implementing the new regulation and labeling in Peru and the United States (FDA).

In 2019, we renewed the image of our La Constancia brand with a more fresh, close and natural one, which aims to

strengthen the benefits of a portfolio free of artificial colors

and flavors.

1.


Market research is the tool we use to ensure this permanent connection when defining new products through which we will reach the market.

In 2019, we developed a new methodology that enabled us to advance our goal of offering products with better ingredients, emphasizing the following principles:

Similarly, we launched an artisanal platform, with products containing ingredients such as guava, coconut and lemon which are familiar to the consumer and use real shapes and natural flavors.

Offering innovative products

At Colombina, innovation is not only a creation process, but also a discipline in the contact with the needs and desires of our consumers and customers.

Reductionof critical nutrients

Removalof artificial additives

Additionof positive nutrients

Another improvement in ingredients

2.2 0 2 3 G o a l

Ensure that the sales of products

launched in the last two years generate at least 8.5% of the

company’s sales


In turn, we have continued to have a clear and transparent communication on the packaging of our Colombina 100% brand, based on a modular system in which the benefits of the line are shown at the following levels:

The Colombina 100% packaging provides information on the nutritional content in relation to a recommended daily consumption of 2,000 calories.

1 or more additional nutritional benefits

Cross-cutting benefits(No artificial colors, flavors or preservatives)

In 2019, we had 536 innovations, 447 renewals and reached 63 countries with our products.USD 1.5

Research and Development investment of

million

8.4% New product sales represented

of the Company’s total

Once again, our cross branding strategy brought us excellent results. On this occasion, we brought together the best of our iconic brands Bridge and Coffee Delight, creating the Coffee Delight Bridge Wafers, making this product the highest average monthly sale of this category in our portfolio.

This year we launched 4 new concepts and reached a total of 85 references.


Relations with customers and consumersWe have established communication strategies and mechanisms that enable us to relate and have a clearer view in order to manage the expectations of our partners, customers and consumers by extending our reach in digital media and other channels.

Our digital platforms showed a positive behavior, demonstrating the interest of consumers, with an increase in followers of:

1.5%Facebook

12%Instagram

17%Youtube

Additionally, through the social media of all the brands, more than 33 million people were impacted and there were more than 535 million impressions generated, which shows a high level of interaction in which at least each person saw the advertisement 16 times.

3.

We opened digital channels on Facebook to cover exclusive communication for Ecuador, Peru and Central America, which led to a greater regional presence and communication with consumers in these countries.

+39.2% vs. the global Benchmark of pages with + than 1 million followers.

In 2019, the Engagement Rate attained in social media achieved a higher performance of

We got closer to our customers through the e-commerce channel growing by 103% vs. 2018

from the Andean region, the Caribbean and Central America, accessed our digital platforms.

9.3 million+people

than

62%LinkedIn

2 0 2 3 G o a l

Get 20% of our direct clients to

use the company’s online services



08. Economic Efficiency and Continued GrowthPreserves Plant Market, Tuluá Valle del Cauca

71 Economic Efficiency and Continued Growth

1. Financial

Sustainability

3.Risk

Management

2.Corporate

Governance

Financial sustainability is the basis for developing strategic actions that contribute to all our management priorities and meet the long-term objectives of the business, which we implement through the following three relevant matters:

which is equivalent to 1.8 times the amount offered by the company in two sub-series at 5 and 10 years.

2 0 2 3 G o a l

Sales of COP 3 trillion

Financial Sustainability

Net Sales in COP millions

EBITDA in COP millions

Var % vs. Year 2018 7.2%

Var % vs. Year 2018 8.8%

2016

2017

2018

2019

2016

2017

2018

2019

1,749,181

1,727,189

1,810,289

1,941,319

218,875

204,492

215,475

234,379

This year we managed to place COP 300,000 million in ordinary bonds in the public securities market.

The issue achieved a demand of

million

The issue achieved a demand of COP 442,371 million. Through this issue, rated AA+ by Fitch Ratings Colombia SCV, we ratified the market’s support for the food industry and our objective to contribute to the country’s growth.

COP 442,371

1.


Corporate Governance

CORPORATE GOVERNANCE STRUCTURE

Aware of our responsibility as a company toward society and the country, we are committed to applying and adopting practices based on business ethics and social responsibility in compliance with our Code of Good Corporate Governance.

2.

Shareholders’ Meeting

Board of Directors

Chief Executive

Officer

Statutory Auditor

Average attendance of the Board of Directors97%

2016

89%

2017

81%

2018

86%

2019

Our advances in corporate governance include:

• Reform of the Code of Good Governance

• Risk Management Policy approved by the Board of Directors

• Adjustments to Código País Survey

• Self-assessment of Board of Directors’ performance


Risk Management

We establish policies and procedures for the identification, measurement, prevention, management and monitoring of risks in accordance with corporate objectives, in order to strengthen our risk prevention culture at all levels and achieve the adequate interaction of the areas involved.

We carry out the risk management process by:

- Identifying risks derived from the corporate strategy that affect the normal course of operations.

- Assessing the risks and measuring the degree of exposure thereto.

- Making decisions regarding risk management in terms of risk avoidance, control, mitigation, sharing and acceptance.

- Monitoring risks, in accordance with our corporate risk policy and defined maximum exposure limits.

- Reporting on risk management to the Board of Directors and Senior Management on a periodic basis.

3.


We have the following structure for risk management:

3 independent Board Members

Strategic Planning Vicepresident (Leader)

Chief Financial Officer

Legal and Corporate Affairs Vicepresident

Human Resources Vicepresident

Board of Directors

Chief Executive Officer

Risk Committee

Administration - Senior Management

Risk management covers the following dimensions:

1. RAW MATERIAL AND EXCHANGE RATE HEDGING POLICY

2. BUSINESS CONTINUITY MANAGEMENT (BCM):

We have a hedging methodology for the main raw materials such as: sugar, corn, wheat, soybean oil, palm oil; and the exchange rate, which allows us to mitigate the impact of exchange rate variations and of these commodities.

Emergency Response Plan: Focused on saving people, company assets and the environment.

Crisis Management Plan: Focused on managing the issues and implications, communication, reputation and humanitarian assistance.

Business Continuity Plan (BCP): Responsible for the rapid stabilization, restoration and recovery of critical business processes.

Disaster Recovery Plan: Technology services (DRP).


3. ERM (ENTERPRISE RISK MANAGEMENT)- CORPORATE RISK MAP

We carry out the risk assessment with the different areas of the Company, in order to identify potential risks, which are classified among external and internal factors of the organization. We prioritize risks according to their impact and possibility of occurrence detailed in the following Corporate Risk Map:

In 2019, we developed the risk management policy approved by the Board of Directors in order to have a broad and solid vision of the risks that the company may face, the strategy to mitigate them and to monitor the effectiveness of the control established.

Probability

Impact

Insignificant

Unusual

Remote

Possible

Probable

Expected

Low Moderate Significant Catastrophic

10

321

1

2

3

4

5

4 5

7 1,2

3,8,9

4,5

6

Cause controlImmediate action

Monitoring Contingency plans

Risk Responsible party

1. Instability in the regulatory framework for labeling and nutritional profiles Legal and Corporate Affairs VP

2. Financial risk due to volatility in commodity prices and exchange rates Chief Financial Officer

3. Non-compliance with the regulatory framework and/or stock market regulations Corporate Marketing VP/ Legal and Corporate Affairs VP

4. Failure in food safety control Supply Chain VP

5. Supply chain disruption Supply Chain VP

6. Highly competitive environment Corporate Marketing VP/ Supply Chain VP

7. Effects of Climate Change Supply Chain VP

8. Changes in consumer trends Corporate Marketing VP

9. Impact on sales growth caused by changes in channel dynamics and structure of distribution channels Sales VP

10. Difficulty in acquiring key talent Human Resources VP


77 Financial statements

To see the full financial report, visit our websitewww.colombina.com

09. Financial statements


CURRENT ASSETSCash and cash equivalentsTrade receivables and other receivablesInventoriesTax assetsOther financial assetsTotal current assets NON-CURRENT ASSETS Property, plant and equipmentInvestment propertiesGoodwillOther intangible assetsDeferred tax assetsOther financial assetsTotal non-current assets TOTAL ASSETS

COP

COP COP

COP60,731203,862278,576

75,5801,223

619,972

816,42550,209

9,95388,075

4,253101,522

1,070,437

1,690,409

21,904206,460261,679

58,209260

548,512

739,17247,496

9,95375,470

3,00893,650

968,749

1,517,261

ASSETS 2019 2018

The accompanying notes are an integral part of these Financial Statements

(Figures stated in millions of Colombian pesos)At December 31, 2019 and 2018STATEMENT OF FINANCIAL POSITIONCOLOMBINA S.A. AND SUBSIDIARIES

Alfredo Fernández de Soto S.Chief Executive Officer

Luis Fernando Calle M.Statutory Auditor

Professional License 11002-T(See my report dated February 18, 2020)

Carlos A. Jurado B.Accountant

Professional License 3713-T

CURRENT LIABILITYFinancial obligationsTrade payables and other payablesLiabilities for employee benefits and othersTax liabilitiesOther financial liabilitiesOther non-financial liabilitiesTotal current liabilities NON-CURRENT LIABILITY Financial obligationsAccounts payable to related partiesLiabilities for employee benefits and othersDeferred tax liabilitiesOther non-financial liabilitiesTotal non-current liabilities TOTAL LIABILITIES

EQUITYCapitalProfit for the periodRetained EarningsOther equity interestsEquity attributable to owners of the parent companyNon-controlling interestsTotal equity

TOTAL LIABILITIES AND EQUITY

COP COP

COP COP

70,740408,598

20,98524,134

9,44515,681

549,583

776,84125,61510,34830,66364,248

907,715

1,457,298

19,01360,27611,511

138,791229,591

3,520233,111

1,690,409

297,314313,557

18,90534,58633,263

0697,625

533,26424,88410,86432,176

0601,188

1,298,813

19,01340,60925,448

129,874214,944

3,504218,448

1,517,261

LIABILITIES AND EQUITY 2019 2018


At December 31, 2019 and 2018STATEMENT OF FINANCIAL POSITIONCOLOMBINA S.A. AND SUBSIDIARIES

(Figures stated in millions of Colombian pesos)






79 Financial statements

Revenue from ordinary activitiesCost of SalesGross profit

Sales expensesAdministrative expensesOther revenue and operating expenses - netOperating profit

Financial expensesFinancial revenue(Loss) from non-operating exchange rate differencesProfit before taxes

(Expense) from deferred current income tax(Expense) from deferred current income taxTotal (expense) income taxNET INCOME FOR THE YEAR

Result attributable to owners of the parent companyResult attributable to non-controlling interestsNET INCOME FOR THE YEAR

1,941,3191,260,095681,224

(478,677) (71,231) 25,109

156,425

(75,870) 808

(154) 81,209

(14,987) (5,907)

(20,894)60,315

60,27639

60,315

1,810,2891,165,338644,951

(454,970) (69,963) 22,679

142,697

(72,305) 632

(3,360) 67,664

(25,154) (1,808)

(26,962)40,702

40,60993

40,702

2019 2018

(Figures stated in millions of Colombian pesos)For the years ended, December 31, 2019 and 2018INCOME STATEMENTCOLOMBINA S.A. AND SUBSIDIARIES

COP

COP

COP

COP








81 Independent Auditors' Report

INDEPENDENT AUDITORS’ REPORT

To the shareholders ofCOLOMBINA S.A.:

REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

OpinionWe have audited COLOMBINA S.A. and its subsidiaries’ attached consolidated financial statements, which encompass the statement of financial position at December 31, 2019, the income statement and statement of other comprehensive income, the statement of changes in net equity and cash flow statement for the year ending on this date, and a summary of significant accounting policies, as well as other explanatory notes.

In our opinion, the attached consolidated financial statements, taken from the accounting books, reasonably present Colombina S.A. and its subsidiaries consolidated financial position in all its significant aspects at, December 31, 2019, as well as the result of its operations and cash flow for the year ending on this date, in accordance with Colombia’s Generally Accepted Accounting and Financial Reporting Principles.

Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these consolidated Financial Statements in accordance with Colombia’s Generally Accepted Accounting and Financial Reporting Principles, and for the internal Control that management considers relevant for the preparation and fair presentation of said consolidated financial statements, free from material misstatements either by fraud or error. It is also responsible for selecting and applying appropriate accounting policies, and for making accounting estimates that are reasonable under the circumstances.

Basis of OpinionWe conducted our audit in accordance with International Auditing Standards accepted in Colombia. Our responsibilities under those standards are described below in the section on the Auditor’s Responsibilities for the audit of consolidated financial statements in our report. We are independent from the Company in accordance with the ethical requirements applicable to our audit of the consolidated financial statements in Colombia. We believe that the audit evidence obtained provides a reasonable basis for our opinion.


Key Audit MattersKey audit matters are the issues that, in our professional opinion, were material to the audit of the financial statements for the current period. These matters were covered in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and accordingly do not represent a separate opinion on these matters:

Key audit matter How the matter was addressed in our audit

As of January 1, 2019, IFRS 16 - Leases was adopted. This standard, which replaces previous standards and interpretations for the recognition of leases, under certain criteria requires a lessee to recognize an asset for the right to use a leased asset and a liability representing its obligation to make lease payments.

The Company has contracts that meet the criteria to be recognized under this standard; the applicability of this new standard includes judgments on whether the company controls the asset in use, the period in which it controls the asset, the measurement of the right to use the asset and the related liability in accordance with the terms of the contract, the discount rate and the separation of the components of the contract in the recognition of these operations.

The consideration of this matter as key in the audit is based on both the significance of the transaction, the application of the standard for the first time and the estimation component of the standard.

My audit procedures to cover the risk of material misstatement in relation to the new standard for lease recognition included:

• Understanding and reviewing the design and implementation of relevant controls that mitigate the risks associated with determining and measuring lease assets and liabilities.

• Evaluation and testing of the effectiveness of the relevant associated controls.

• Analysis, for a representative sample of contracts, of supporting documentation (including the underlying contract) to assess the entity’s criteria for whether the contract is (or contains) a lease.

• Analysis, for a representative sample of contracts, of supporting documentation (lease payments, lease period, discount rate) and recalculation of the right to use the asset and the lease liability

• I assessed the suitability of the related disclosures in the financial statements in accordance with the requirements of IFRS 16.

No differences, outside a reasonable range, have been identified in the tests described above.


Key audit matter How the matter was addressed in our audit

The Company holds equity financial instruments measured at fair value, classified hierarchically as level 3, since they do not have quoted prices on an active market; it also records intan-gibles-brands with an indefinite useful life, which consider assumptions in projections and discount rate for impairment assessment purposes.

Because measurement includes subjectivity in the assumptions and valuation techniques used by management in its estimates, we have considered these measurements as a key issue in our audit of the current period.

Our audit procedures to cover the risk of material misstatement in relation to the valuations included:- Assessment of the relevant controls in

relation to the valuations made by the Company

- Assessment of the Valuation Methodology- Assessment of Valuation and Projection

Assumptions and Discount Rate- Assessment of Business Assumptions- Review of Investment in Assets (CAPEX)- Assessment of Model Reasonableness- Evaluation of the Mathematical Accuracy of

Significant Valuation Calculations

No differences, outside a reasonable range, have been identified in the tests described above.

The Company placed ordinary bonds in the amount of COP 300,000 million in the public securities market, in series of one million Colombian pesos (COP 1,000,000), with maturities between eighteen (18) months and twenty-five (25) years as of the Issuance Date.

This program was rated AA+(col) (Double A plus) by Fitch Ratings Colombia5.A. Securities Rating Agency.

Since the transaction is significant and took place in 2019, it has been considered a key issue in our audit of the current year.

Our audit procedures to cover the risk of material misstatement in relation to the new bond issue included:

- Checking the required authorizations

- Checking the proper recording of the transaction in the Company Follow-up of compliance with the payments and/or commitments acquired in the issue

No differences or non-compliances have been identified in the tests described above.

Management and government officials’ responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these consolidated Financial Statements in accordance with Colombia’s Generally Accepted Accounting and Financial Reporting Principles, and for the internal Control that management considers relevant for the preparation and fair presentation of said financial statements, free from material misstatements either by fraud or error.


In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as appropriate, matters related thereto, unless management intends to liquidate the Company or cease operations, or there is no other realistic alternative.

Government officials are responsible for overseeing the process of reporting the Company’s financial information.

External Auditor’s ResponsibilityOur goal is to obtain reasonable assurance that the consolidated financial statementsas a whole are free from material misstatement, whether due to fraud or error, and issue an audit report containing our opinion.

Reasonable assurance is a high degree of certainty, but does not ensure that an audit performed in accordance with International Auditing Standards accepted in Colombia will always detect a material misstatement when it exists. Misstatements may be due to fraud or error and are considered material if, individually or as a whole, they could reasonably be expected to influence the economic decisions of users made on the basis of these financial statements.

As part of an audit in accordance with International Auditing Standards accepted in Colombia, we apply our professional judgment and maintain an attitude of professional skepticism throughout the audit. Also:

• We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures to address those risks, and obtain sufficient appropriate audit evidence to provide a basis for our opinion. The risk of not detecting a material misstatement due to fraud is higher than in the case of a material misstatement due to error, since fraud may involve collusion, falsification, deliberate omissions, intentional misrepresentation, or circumvention of internal control.

• We obtained knowledge of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, and not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

• We assess the appropriateness of accounting policies applied and the reasonableness of accounting estimates and related disclosures made by management.

• We conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, we conclude on whether or not there are material uncertainties related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that there is material uncertainty, we are required to draw attention in our audit report to the relevant information disclosed in the financial statements or, if such disclosures are not appropriate, to express a modified opinion. Our conclusions are based on the audit evidence obtained to date from our audit report. However, future events or conditions may cause the Company to cease to be a going concern.


• We assess the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent relevant transactions and events in a manner that achieves a fair presentation.

We communicate with those responsible for governance regarding, among other matters, the scope and timing of the audit and the significant audit findings, as well as any significant deficiencies in internal control identified during the audit.

We also provide those responsible for governance with a statement about compliance with relevant ethical requirements regarding independence, and we have disclosed all relationships and other matters that can reasonably be expected to affect our independence and, where appropriate, the related safeguards.

Among the issues that have been the subject of communication with those responsible for the entity’s governance, we determine those that have been most significant in the audit of the financial statements for the current period and which are, consequently, the key audit matters. We describe these key matters in our audit report unless statutory or regulatory requirements prohibit public disclosure of the matter, or in extremely rare circumstances, we determine that a matter should not be reported in our report because it can reasonably be expected that the adverse consequences of doing so would outweigh the public interest benefits of the report.

Other MattersThe financial statements for the year ended December 31, 2016, which are included for comparative purposes only, were audited by Deloitte & Touche, which issued an unqualified opinion on February 22, 2019.

DELOITTE & TOUCHE LTDA

MARIO FERNANDO BURBANO R.PARTNER

March 2, 2020

Memorandum of independent review

01

Memorandum of independent review Independent Review of the 2019 Sustainability Report – Colombina S.A

Responsibilities of the Management of Colombina S.A and Deloitte The preparation of the 2019 Sustainability Report of Colombina S.A, between January 1st and December 31st 2019, and its content are the responsibility of the organization which is also responsible for defining, adapting and maintaining management systems and internal control which information is obtained. Our responsibility is to issue an independent report based on the procedures applied and previously agreed upon for our review. This Report has been prepared exclusively in the interest of the organization in accordance with the terms of our proposed services. We do not assume any liability to third parties other than the Management of the Company. We have performed our work in accordance with the independence regulations required by the ethics code of the International Federation of Accountants (IFAC). The scope of a limited review is substantially less than an audit. Therefore, we do not provide an audit about the Sustainability Report. Scope of our work We have carried out the review of the content adaptation of Colombina S.A 2019 Sustainability Report to the Guide for the preparation of Sustainability Reports of the Global Reporting Initiative (GRI Standards). Standards and review processes We have carried out our work in accordance with ISAE 3000 - 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 Accounts (IFAC). Our review work consisted in the formulation of questions to the Administration, as well as to the different areas and operations of Colombina S.A that have participated in the elaboration of the 2019 Sustainability Report, in the application of analytical procedures and tests of revision by sampling described below: Interviews with Colombina S.A employees to know about the principles, management approaches and data consolidation

systems applied to prepare the Report. Analysis of how the content, structure and indicators were defined, based on the materiality exercise according to the GRI

Standards Analysis of the processes to collect and validate the data presented in the report. Checking, by sample, testing and review of quantitative and qualitative evidence corresponding to the GRI, contents and

Colombina S.A internal KPIs included in the 2019 Sustainability Report, and proper compilation from the data supplied by Colombina S.A the sources of information.

Confirmation that the 2019 Sustainability Report of Colombina S.A has been prepared in accordance with the GRI Standards: Core option’.

General contents:

It was confirmed that the report has been prepared in accordance with the GRI Standards: Core option’ regarding the general basic contents.

Specific contents: We reviewed the management approach, the GRI contents, and internal KPIs of its material issues:

Material Issues1 GRI contents or own KPIs Efficient Water Use 303-1, Own. Water consumption (m3/ton produced) Climate Change Management 305-1, 305-2, 305-3, 305-4, Own. Implementation statistics electric car initiative, Own.

Implementation statistics high cubic vehicle program. Energy Efficiency 302-1, 302-3, 302-4

1 The Scope of the external independent Review is Limited to data of Colombia.


02

Waste Management and Reduction 306-2, Own. Use of waste, Own. Total weight of waste (kg/ton produced) Early Childhood Development Own. Number of children benefited by children's homes. Creating opportunities for young people in the communities where we operate

Own. Number of persons benefited by programs that create opportunities for young people in the communities where we operate

Relation with suppliers and contractors Own. Percentage of current suppliers who have been assessed using social criteria, Own. Percentage of current suppliers who have been assessed using environmental criteria, Own. Number of certified and recertified suppliers, Own. Accident frequency rate indicator for contractors.

Big Brother Program Own. Big Brother volunteer hours, Own. Monetary value Big Brother volunteer hours, Own. # of companies benefited with the Big Brother program, Own. # of Big Brother replicas.

Quality and safety in production processes *FP5. Percentage of production volume elaborated in plants certified by an independent third party, following international food safety standards.

Well-being at work and working conditions Own. Result of organizational climate survey, Own. Number of employees that purchased a home or received supplement for repairs, Own. Key position turnover, 401-1, 403-2.

Organizational Development 404-1, 404-3, Own. Value of educational assistance, Own. Investment in training, Own. Total number of employees trained.

Improving nutritional profile Own. Number of references and % of sales with GDA label, Own. Number of references and % of sales of products with positive social impact, Own. Number of references Colombina 100%.

Offering Innovative Products Own. Description of new product launches, Own. % of revenue from new products launched over the last 2 years.

Risk Management Own. Description of initiatives developed for adequate risk management. Financial Sustainability Own. Net sales, Own. EBITDA.

Conclusions Based on the work carried out described in this report, the procedures carried out and the evidence obtained, nothing has come to our knowledge, that leads us to think that the contents and KPIs within the scope of the review and included in the 2019 Sustainability Report of Colombina S.A for the period between January 1st and December 31st 2019, have not met all the requirements for the preparation of reports, in accordance with the GRI Standards: Core option’. For those contents of the GRI Standards where Colombina S.A did not report quantitatively (figures), only the qualitative information that included procedures, policies, evidence of activities carried out, among others, were reviewed.

Alternative lines of actions Deloitte has provided Colombina S.A with a report with the most significant alternatives of action for the future preparation of Reports, which do not modify the conclusions expressed in this report, also a few observations that will strengthen the consolidation, management, measurement and communication processes of the organization's sustainability performance. Declaration of Independence We confirm our independence from Colombina S.A. All of our employees carry out annual updates to the Ethics Policy where we promptly declare that we have no conflicts of interest with Colombina S.A, its subsidiaries and its stakeholders.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities. DTTL (also referred to as “Deloitte Global”) and each of its member firms are legally separate and independent entities. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more. Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services. Our network of member firms in more than 150 countries and territories serves four out of five Fortune Global 500® companies. Learn how Deloitte’s approximately 310,000 people make an impact that matters at www.deloitte.com. This communication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms or their related entities (collectively, the “Deloitte network”) is, by means of this communication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte network shall be responsible for any loss whatsoever sustained by any person who relies on this communication.

© 2020 Deloitte Touche Tohmatsu Limited

Deloitte asesores y consultores Jorge Enrique Múnera D. Partner Santiago de Cali, march 2020

87 Independent Third-Party Memorandum

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