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GLOBAL CONFLICT OF INTEREST POLICY

Owner: Anna Diaz, Chief Compliance Officer

Reviewers: Eva Argilés, General Counsel

Jose Delfín Perez, Senior Vice President Human Resources

Approver: CSR Committee

Date: May 3rd 2018

Version: 1.0

Language: English

Scope: Global

Global Conflict of Interest Policy Last updated: May 3rd 2018


Table of contents

GLOBAL CONFLICT OF INTEREST POLICY .............................................................................. 1

1. Aims and objectives................................................................................................................ 3

2. Scope and responsibility ......................................................................................................... 3

3. Compliance with local and sector legislation ............................................................................. 3

4. Definitions ............................................................................................................................. 4

5. Identification, communication and management of conflicts of interest...................................... 5

6. Conflict of interest scenarios ................................................................................................... 8

7. Roles and responsibilities ...................................................................................................... 10

8. Concluding provisions ........................................................................................................... 12

9. Failure to comply.................................................................................................................. 12

10. Related documents ............................................................................................................... 13

11. Version control ..................................................................................................................... 13

12. Annexes .............................................................................................................................. 13



1. Aims and objectives

In the course of their professional duties, Group Professionals may from time to time find themselves

in situations in which there is a potential conflict between their personal interests and the interests of

the Group. Such a situation may affect their ability to show loyalty towards Applus+ and act in the

Group’s best interests.

As such, it is important for Applus+ Professionals to be able to identify those situations in which their

personal interests influence (or may influence) the decisions that they take in their Applus+ roles. This

will help them to avoid such conflicts of interest or, where necessary, to manage them appropriately in

accordance with this policy.

This policy draws together the relevant principles and rules in order to help Applus+ Professionals to

identify, prevent and/or manage conflicts of interest.

2. Scope and responsibility

This policy applies to all Applus+ Group companies, as well as to all of their respective Professionals,

whether or not these individuals are based in Spain. As an exception to the above, the Regulations of

the Board of Directors applies to the members of APPLUS SERVICES, S.A. Board of Directors, in this

respect.

The principles set out in the present document shall be enforced by the Group’s entire management

team, at both corporate and divisional level. Any exception to the rules and principles outlined herein is

subject to the explicit approval of the Chief Compliance Officer (CCO).

In the event of any discrepancy with or query regarding this policy, support and guidance shall be

provided by the CCO. This notwithstanding, the CSR Committee is ultimately responsible for the

interpretation of this document.

3. Compliance with local and sector legislation

All applicable regulations and legislation shall be observed in any area covered by the present policy, in

accordance with the particular geography and sector of the activity in question.

In the event of a discrepancy between the aforementioned regulations and the content of this document,

the former shall prevail.



4. Definitions

Applus+ or Group: Applus Services, S.A. and all of its subsidiaries and affiliated

companies, including joint ventures with other business

partners within which Applus+ plays a leading role.

CCO: The Group’s Chief Compliance Officer.

CSR Committee: The Applus+ Corporate Social Responsibility Committee,

which is appointed by the Board of Directors of Applus

Services, S.A.

EVP: The Executive Vice-President of the Division in question.

In a corporate management (not divisional) context, a

reference in this policy to the Division EVP should be taken to

refer to the relevant corporate vice-president (corporate VP).

Public Officials or

Equivalent:

All persons occupying, or having occupied during the last 12

months, any of the following positions:

officials and/or employees of a public administration

at any level, irrespective of decision-making power or

seniority

officials and/or employees of a public or publically

controlled undertaking, including – but not limited to

– state-owned companies

officials and/or employees of a public international

organisation (such as the World Bank, the United

Nations or their specialised bodies)

representatives or persons carrying out official

functions on behalf of a public administration, public

or publically controlled undertaking or public

international organisation

leaders of political parties and candidates standing for

public or political office

Related Persons: These are defined as follows:

the Professional’s spouse or domestic partner



the Professional’s parents, children, siblings and

dependants

equivalent members of the Professional’s spouse’s

family

any other people with whom the Professional cohabits

or maintains personal relationships that are

substantively equivalent to those described above

Professionals: All persons rendering their services to Applus+, regardless of

the nature of the contractual relationship. This includes

Applus+ employees, freelance contractors, directors,

managers and officers, as well as individuals employed by

companies contracted to work with Applus+ on an ongoing

basis (implants). Internships professionals are excluded.

5. Identification, communication and management of conflicts

of interest

5.a. Identifying a conflict of interest

According to the Code of Ethics, “A conflict of interest arises when the personal interest of an

Applus+ Professional is or can be, directly or indirectly, in contradiction with the interest of the

Group. The risk to be avoided is that the personal interest that a Professional may have in a given

scenario affects its decision making on behalf of Applus+, which should always pursue the best

interest of the Group. Therefore, within the framework of the professional relationship with

Applus+, Professionals with decision-making capacity or influence over decision-making should

put the interests of the Group before their personal interests.”

At Applus+ we treat direct and indirect conflicts of interest equally. The latter arise when the

conflict of interest directly involves a Related Person and, therefore, only indirectly involves the

Professional in question. For example, a given Professional could find himself faced with an

indirect conflict of interest where a Related Person has a significant shareholding in a supplier or

client company.

In order to comply with the terms of the present policy, it is first necessary to be able to recognise

a conflict of interest, whether real, potential or perceived. The following is a non-exhaustive list

of examples of typical situations that would constitute conflicts of interest:



Personal relationships in the workplace: When an Applus+ Professional has decision-making

capacity over the appointment or working conditions of a Related Person in respect of that

Professional (see section 6b of this policy)

Personal or financial links to suppliers: When an Applus+ Professional with decision-making

capacity (or influence over decision-making) in the contracting of a supplier:

(a) is a Related Person in respect of either the contracted supplier or one of the supplier’s

Professionals working with the Group

(b) has (either directly or via a Related Person) financial interests in the supplier company

(except in the case of shareholdings of less than 5%)

Competing activities: When an Applus+ Professional (or Related Person) is actively linked (for

example, as an employee, officer, consultant, etc.), either directly or indirectly, to a

competitor of the Applus+ division for which the Professional works – or, in the case of a

corporate Professional, a competitor of any Group division

Personal or financial links to Applus+ clients: When an Applus+ Professional who is involved

in any way and at any stage (from the initial quote through to the final invoice) with the

provision of services to a client:

(a) is a Related Person in respect of either that client or one of the client’s Professionals

working with the Group

(b) has (either directly or via a Related Person) financial interests in the client company to

which Applus+ is providing services (except in the case of shareholdings of less than 5%)

(c) provides services to the client company outside the framework of the Professional’s

contractual relationship with Applus+

Gaining of personal opportunities: When an Applus+ Professional (or Related Person) takes

advantage of their Applus+ position to garner opportunities of either a commercial or a

personal nature for the benefit of said Professional or a third party

Gifts and other benefits: When an Applus+ Professional accepts a gift, payment, discount,

invitation or other benefit from a commercial associate of Applus+. In such cases, as in

others, the terms of the Applus+ Global Anti-Corruption Policy and Procedure apply



5.b. Duty to avoid or highlight a conflict of interest

* Sections 5b and 5c, below, do not apply to those conflicts of interest that are

specifically regulated for under section 6 of this policy.

Professionals have a duty of loyalty towards Applus+. Therefore, as a general rule, they must

avoid finding themselves in situations in which they are faced with a conflict of interest (for

example, any Professional may hand over to another Professional the capacity to take decisions

related to a client or supplier to which he is related). This involves taking the requisite

precautionary measures and appropriate decisions to prevent a conflict of interest from arising.

However, it is not always possible to avoid a conflict of interest. There may even be situations in

which the conflict of interest is inevitable to promote the interests of the Group. In those cases

in which it is not possible or practical to avoid a conflict of interest, the Professional has a duty

to inform his line manager.

Transparency and prompt communication of the existence of a potential conflict of interest are

vital in order to preserve the integrity and reputation of both Applus+ and its Professionals.

As soon as a conflict of interest (whether real, potential or perceived) has been identified, the

Professional should inform his line manager so that they can work together to assess the situation.

The Professional shall subsequently email his line manager with full details of the conflict of

interest that has arisen and any measures that have been agreed to deal with it. If there is any

doubt regarding the existence of a conflict of interest or how said conflict of interest might be

managed, the Professional should consult his line manager who may, in turn, turn to the CCO for

guidance.

Professionals joining Applus+ are obliged to raise, during the recruitment process, any and all

conflicts of interest that, to the best of their knowledge, may exist.

5.c. Role of the line manager

In most cases, conflicts of interest can be dealt with simply and in a manner that is acceptable

to both parties. This does, however, require a proactive approach and open dialogue between

Professionals and their line managers.

As soon as a Professional has communicated the existence of a conflict of interest, the line

manager shall:

a) treat the information provided by the Professional impartially and in the strictest

confidence



b) carry out a fair assessment of the situation surrounding the reported conflict of interest,

including any potential risk to the commercial interests and/or reputation of Applus+

c) seek guidance from the CCO if this is deemed necessary or helpful

d) decide on a course of action that minimises any risk to Applus+ at the same time as

protecting, as far as possible, the personal interests of the Professional concerned

e) communicate this decision and its rationale to the Professional and carry out appropriate

follow-up to ensure the Professional both understands the decision and abides by it

Twice-yearly, in January and July, all line managers who have received reports of conflicts of

interest shall inform the CCO of the individual communications received, together with a summary

of the assessments carried out and decisions taken. This information should be anonymised – in

other words, provided without identifying the Professional in question – unless this information

is expressly required by the CCO. (See “Annex 1” for the format that this twice-yearly

communication should take.)

6. Conflict of interest scenarios

While, as outlined in section 5a of this policy, the situations giving rise to conflicts of interest are many

and varied, the following three scenarios arise quite frequently.

6.a. Incompatibilities

Most of the services provided by Applus+ (inspection, testing, certification, type approval, etc.)

require both Applus+ and its Professionals to act with complete independence and impartiality.

This duty is often explicitly imposed by the sector legislation in force. However, notwithstanding

our legal obligations, it is clear that the reputation and good name of Applus+ within our markets

depend on our ability to carry out our work impartially.

To ensure such impartiality, in addition to the present policy, Applus+ has a series of detailed

internal procedures that apply across the Group, in accordance with the particular services being

provided, and to which all Professionals must adhere.

Beyond guaranteeing the independence and impartiality of Group Professionals, this set of internal

procedures aims to ensure that Group companies providing services that need, by their very nature,

to be independent and impartial remain independent of other Group companies whose interests

and objectives could influence the required independence and impartiality.

6.b. Related Persons as Professionals



The purpose of this rule is to help avoid conflicts of interest in working relationships. Such conflicts

of interest could involve the preferential treatment of Related Persons in the recruitment or

promotion process or the bestowing of other undue advantages in their favour. Its intention is to

provide a policy framework that is governed at all times by the principles of legality, responsibility,

integrity and professionalism.

The following standards should be applied consistently:

a) Any and all preferential treatment or undue advantage in terms of recruitment and/or

promotion is to be strictly avoided

b) Objectivity: The Applus+ Group’s selection, recruitment, appraisal and promotion

processes are based solely and exclusively on how well a candidate fits the required

profile

c) Two Professionals who are also Related Persons in respect of one another may not occupy

positions in which there exists a hierarchical relationship between them. Likewise, it is

not acceptable for one of them to be in a position to influence the remuneration of, or

work-related decisions affecting, the other. If such a situation arises, the Professionals in

question must inform the EVP and their division’s HR Manager/Director without delay. If

the conflict of interest involves a division EVP or corporate VP, the Senior Vice-President

(SVP) of Human Resources and the Chief Executive Officer (CEO) should be informed

d) The recruitment of any Related Person is subject to the prior approval of the Division EVP

in the division the Related Person is due to join. With this in mind, the related Professional

who is already working for Applus+ should inform his own Division EVP of the potential

recruitment of a Related Person, with a view to this information being passed on to the

EVP and HR Manager/Director of the affected division. If the potential conflict of interest

involves a division EVP or corporate VP, the appointment is subject to the explicit approval

of the CEO

Each division’s HR manager/director shall keep up-to-date records of all potential conflicts of

interest reported under this section of the present policy. Twice-yearly (in January and July), HR

managers/directors shall forward this information to the SVP of Human Resources as well as to the

CCO. (See “Annex 2” for the format that this twice-yearly communication should take.) To be

omitted from this document are any reported conflicts of interest between Group Professionals and

candidates where the latter did not ultimately take up positions at Applus+.

All division EVPs and corporate VPs have a duty to inform their respective divisions’ HR managers,

the CCO and the SVP of Human Resources, within a timeframe of two months dating from this

policy’s publication, of any existing cases of Applus+ Professionals who are Related Persons in

respect of one another.



6.c. Contracting of Public Officials or equivalent

The recruitment of Public Officials or equivalent as Professionals can constitute a conflict of interest

for Applus+, in particular if said Public Officials or equivalent hold or have previously held a position

in which they have actively participated in, or been able to influence, decisions that may have had

an impact on Applus+ business activity.

In any event, the recruitment of a Public Official or equivalent must necessarily fulfil the same

criteria applied to any other recruitment procedure – in other words, how well the candidate fits

the required profile.

The contracting of a Public Official or equivalent is subject to the explicit prior approval of the CEO,

and subsequent notification of the CCO, when said Public Official or equivalent:

i. Will be interacting with a public administration on behalf of Applus+

ii. Will be involved in the management of Applus+ projects for a public administration

iii. Was recommended for the role by another Public Official

iv. Will be taking on the role of project lead, head of department or a higher-level position

As such, any Applus+ Professional taking part in a selection process, if aware that the candidate

belongs to one of the above categories, has a duty to raise this with the Division EVP so that the

latter can (a) request the CEO’s approval and (b) notify the CCO – and all of this before a

commitment to recruiting the candidate in question has been entered into. The candidate should

not be questioned directly on this subject as the decision of whether or not to appoint should be

based on the candidate’s CV as well as on other information that has arisen during the selection

process.

Each division’s HR manager/director shall keep up-to-date records of all Public Officials or

equivalent recruited by Applus+ following the approval of the CEO. Twice-yearly (in January and

July), HR managers/directors shall forward this information to their Division EVP as well as to the

CCO. (See “Annex 3” for the format that this twice-yearly communication should take.)

All country managers have a duty to inform their respective divisions’ HR managers/directors,

within a timeframe of two months dating from this policy’s publication, of any existing cases of

Public Officials or equivalent working for Applus+ who fulfil one of the criteria i to iv, above.

7. Roles and responsibilities



Responsibilities assigned under the Global Conflict of Interest Policy cannot be delegated. The following

table sets out the primary roles and responsibilities as regards the implementation of this policy within

the Applus+ Group.

Group Professional Inform line manager of any potential conflict of interest in which he may be

implicated

Follow up this conversation with email detailing the conflict of interest and

any measures agreed to deal with it

If a hierarchical relationship exists between himself and a Related Person,

immediately inform the Division EVP and the Division’s HR Manager/Director

Inform the appropriate division EVP about the potential recruitment of a

Related Person

If taking part in a selection process and aware that the candidate belongs

to one of the categories (i to iv) listed in section 6c on Public Officials or

equivalent, share this information with the Division EVP

Professional’s line

manager

Assess any reported conflicts of interest and decide on the most appropriate

way to handle them

Seek guidance from the CCO if this is deemed necessary or helpful

Carry out appropriate follow-up to ensure that the Professional understands

the decisions taken and abides by them

Twice-yearly (in January and July), provide the CCO with details of any

reported conflicts of interest, including a summary of the decisions taken

(Annex 1)

Country manager Inform the appropriate division’s HR Manager/Director, within a timeframe

of two months dating from this policy’s publication, of any existing cases of

Public Officials or equivalent working for Applus+ who fulfil one of the

criteria listed in section 6c (i to iv)

Divisional HR

manager/director

Keep up-to-date records of all conflicts of interest reported under section

6b on Related Persons. Twice-yearly (in January and July), forward this

information to the SVP of Human Resources and the CCO (Annex 2)

Keep up-to-date records of all Public Officials or equivalent recruited by

Applus+. Twice-yearly (in January and July), forward this information to the

Division EVP and the CCO (Annex 3)

Division EVP Inform the SVP of Human Resources and the CEO of any personal conflict

of interest involving the existence of a hierarchical relationship between

oneself and a Related Person

Provide prior approval for the recruitment of Related Persons in respect of

Division Professionals

Inform the Division’s HR Manager, the CCO and the SVP of Human

Resources, within a timeframe of two months dating from this policy’s

publication, of any existing cases of Division Professionals who are Related

Persons in respect of one another



If aware that a candidate seeking to become a Group Professional belongs

to one of the categories (i to iv) listed in section 6c on Public Officials or

equivalent request the CEO’s approval and notify the CCO before committing

to recruit the candidate

CCO Approve any exceptions to the rules and principles set out in this policy

Provide help and guidance in response to any queries received

Adequately preserve all files containing information supplied via the reports

discussed in this policy and its annexes

Ensure the appropriate dissemination of this policy and the monitoring of

compliance with it

CEO Approve the appointment of a Professional where there exists a hierarchical

relationship between this individual and a division EVP

Provide prior approval for the appointment of a candidate who is a Public

Official or equivalent belonging to one of the categories (i to iv) listed in

section 6c of this policy

8. Concluding provisions

8.a. Dissemination

The CCO will take the necessary measures to ensure that all parties affected by the content

herein have access to and knowledge of this policy.

8.b. Interpretation

It is the CCO’s responsibility to resolve any queries and discrepancies that may arise regarding

how the content of the present document is interpreted and applied. This notwithstanding, the

CSR Committee is ultimately responsible for the interpretation of this document.

9. Failure to comply

All employees of the Applus+ Group have a duty to comply with this policy. Any breach thereof shall

engender appropriate disciplinary action.

The Internal Audit Department will monitor compliance with this policy through a series of periodic

checks. The individual with decision-making powers shall keep appropriate records to demonstrate due

adherence to the rules established by this policy throughout the process.



10. Related documents

Without prejudice to any internal rules that may relate to the possible effects of the Global Conflict of

Interest Policy, the following internal documents are closely related to the present document:

Code of Ethics

Anti-Corruption Policy and Procedure

Internal Incompatibility regulations

Group Supplier policy

Group Customer Policy

11. Version control

No modifications to this policy are permitted without the express approval of the CSR Committee.

Version 1 2018 Document creation

12. Annexes

Annex 1 Template for twice-yearly line managers’ report on reported conflicts of interest

Annex 2 Template for twice-yearly report on Professionals who are also Related Persons in

respect of other Professionals

Annex 3 Template for twice-yearly report on Public Officials or equivalent contracted as

Professionals



Annex 1. Template for twice-yearly line managers’ report on reported conflicts of interest

Date: __ [January / July] 20____

Reporting period: [1st January to 30th June] [1st July to 31st December]

Line manager: _____________________

Date conflict of

interest first reported

and form the

communication took

(verbal, email, etc.)

Brief description of

conflict of interest

Was another

manager and/or

the CCO consulted?

Measures taken

(description and

date)



Annex 2. Template for twice-yearly report on Professionals who are also Related Persons

in respect of other Professionals



HR Manager/Director: _____________________

Division: _________________

Staff members

concerned

(names, divisions,

Group companies

and positions)

Date issue first

raised with HR

Individual who

communicated issue

to HR

Measures taken

(description and

date)



Annex 3. Template for twice-yearly report on Public Officials or equivalent contracted as

professionals



HR Manager/Director: _____________________

Division: _________________

Contracted

professional

(name, division,

Group company

and position)

Cite applicable

premise (i to iv of

section 6c of Global

Conflict of Interest

Policy) and provide

details

Appointment date Date appointment

approved by CEO

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