March 12th, 2018

To our stakeholders:

I am pleased to confirm that Folmex reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Arturo Ciklik
CEO

1. Our "Ethics Code" establishes the adherence to the UN's Global Compact Human Rights standard.
2. Our Code also describes full compliance with both federal and state laws regarding child labor, which in our case is 18 years old.
3. Our Code also specifies non-discrimation in terms of employment and assessment.

1. Every year, we conduct a training session on our "Ethics Code" that all employees need to participate.
2. We have a "Suggestion Box" whereby any company employee can communicate any violation to the "Ethics Code" or any other work incident.

1. During this year, there were no reported violation incidents in terms of Labour Global Compact principles
2. We are certified as a "Socially Responsible" business by the following parties: Unilever (Unilever Responsible Sourcing Audit), Disney (Disney Labour Practices), Sedex (Sedex Members Ethical Trade Audit), and ECOVADIS (Silver status; top percentile within our industry peers).

We have a comprehensive "Ethics Code" that clearly specifies the following topics related to Labour Practices:
1. Labour Policy that is based in both the International Labour Organization and UN Global Compact guidelines.
2. Our Labour Policy is integrated by the following chapters: information privacy, freedom of association and collective bargaining, forced labour, child labour, discrimination, working hours and compensation, safe and healthy workplace, worplace safety.
3. Our "Ethics Code" was sent to our business partners to have their adherence.
4. Our Safety objective (accidents per year) is zero.

1. Our plant workers have been part of the same union since our foundation in 1967.
2. Every year, we conduct a training session on our "Ethics Code" that all employees need to participate.
3. We have a "Suggestion Box" whereby any company employee can communicate any violation to the "Ethics Code" or any other work incident.
4. We have an internal "Ethics Committee" that reviews our "Ethics Code" and takes the necessary actions.
5. We have an internal "Labour, Safety, Environment and Legal" matrix by which we measure our compliance on each subject.
6. All of our employees undergo an annual physical check-up; also, we manage annual vaccination campaigns.

1. Our key executives (Manager, Directors) are 38% women, 62% men.
2. During this year, there were no reported violation incidents in terms of Labour Global Compact principles.
3. We are certified as a "Socially Responsible" business by the following parties: Unilever (Unilever Responsible Sourcing Audit), Disney (Disney Labour Practices), Sedex (Sedex Members Ethical Trade Audit), and ECOVADIS (Silver status; top percentile within our industry peers).
4. Our Safety Incidents Index is 10 times lower compared to the national average for manufacturing operations.
5. We received a recognition from the federal agency that offers mortgages to formal employees (INFONAVIT) that we have complied with this social benefit in more than 10 years.

1. All of our input and outputs are measured and controled.
2. By being a certified "Clean Industry" business, we monitor and control key aspects of our operations.

1. We have a dedicated resource for Environmental and Health&Safety topics.
2. All of our waste materials from our manufacturing operations are recycled; those that cannot be recycled (materials with aluminum) are incinerated in cement plants.
3. Since we are a certified "Clean Industry" business by Mexican Governmental authorities, we do have an environmental matrix we periodically monitor and control.
4. Our most important raw materials are Polyethylene resins; 70% of the resins used are bought in bulk, thus avoiding packaging and freight costs.
5. We have implemented several sustainability projects with our customers by which they, in turn, use significantly less material (-20%) Vs their previous package.
6. All of our pallets and cores are made from 100% recycled wood and paper, respectively.
7. All of our used solvent is sent for recycing, resulting in a 70% success ratio.

1. We we audited by both the Federal and State Governments in regards to the "Clean Industry" public programme. For the 11th year in a row, we obtained this certificate.
2. We signed a contract to obtain +90% of our energy from renewable resources (wind, in this case).
3. All of our key metrics (water, air emissions, noise levels) are in compliance with federal and state laws.
4. We reduced the use of sticky back by 30% by switching to an innovative technology.
5. We replaced 20% of our light sources from conventional to LED.

1. Our "Ethics Code", in the "Anti-Corruption" chaper, states specifically that Folmex does not engage in any form of curruption.
2. Our Anti-Corruption chapter also deals with drug-trafficking, bribery and non-political affiliation.

1. Every year, we conduct a review and training of our "Ethics Code".
2. Every supplier is assessed prior to comence any commercial relationship to guarantee no biases.

1. We have not experienced any fines, nor have been involved in any legal disputes, related to corruption.
2. Our financial information is audited by a certified public accountant with clean reports.
3.