2016 ANNUAL REPORT CIE AUTOMOTIVE / 2016

Transcription

1 ANNUAL REPORT CIE AUTOMOTIVE /

2 Summary. Key metrics. Financial and non-financial metrics. Group profile. Chairman s statement. CEO s statement. About this report. Methodology. Stakeholder engagement. Materiality assessment. Contact details. Business model. Identity and commitments. Platforms. Strategy. Market backdrop. -00 Business Plan. Corporate governance. Corporate governance model. Corporate governance bodies. Corporate Social Responsibility management. Business ethics. Regulatory framework. Risk management. in review. Earnings performance. Shareholder value creation. Customer orientation. Human resources. Workplace health and safety. Sustainable supply chain management. Environmental management. Community Appendix I SDGs Appendix II GRI-G Annual Financial Statements Annual Corporate Governance Report / /

3 Key metrics. Financial and non-financial metrics. Group profile

4 . FINANCIAL AND NON-FINANCIAL. Financial and non-financial metrics.. Financial metrics Having outpaced overall market growth, CIE Automotive posted a net profit of. million, an alltime record FINANCIAL DATA ( million) (*) Pro forma data calculated by eliminating sales of diesel for fuel mixing (**) EBITDA: earnings before interest, tax, depreciation and amortisation; EBIT: earnings before interest and tax; Net profit: profit attributable to owners of the parent. (***) Net debt: bank and other borrowings less cash and cash equivalents. FINANCIAL STRUCTURE 0 0 Revenue,09.,.,9.0 Adjusted revenue *,0.,.,9.0 EBITDA ** EBIT **.. 9. Net profit Capital expenditure.9.. Net debt (***) Net debt/ebitda* Net debt / equity / / (*) EBITDA: Earnings before interest, tax, depreciation and amortisation. Net debt: bank and other borrowings less cash and cash equivalents.

5 . FINANCIAL AND NON-FINANCIAL SHARE PRICE PERFORMANCE 0 0 Number of shares at year-end 9,000,000 9,000,000 9,000,000 Share price at year-end ( )... High for the year.9..9 Low for the year Market capitalisation at year-end ( million) Trading volume ( 000 shares) Dividends paid ( million) Dividend per share paid ( ),.,99.,.,90 0,9 9, Pay out * (%) Earnings per share ( ) / / % % % P/E multiple **.9.. (*) Pay out: percentage of profit paid out to shareholders (**) P/E multiple: ratio between share price and EPS

6 . FINANCIAL AND NON-FINANCIAL.. NON-FINANCIAL HUMAN RESOURCES 0 0 No. of employees,,,0 Job creation (net),0-0,0 Diversity By geography Men Women Automotive business Europe Americas Asia, Africa & Oceania Smart Innovation Lost-time injuries* 0 Injury frequency rate*.9.. Injury severity rate* (*) In 0 and 0, data for both the Automotive (full scope) and Smart Innovation (Spain only) platforms. For, data for the Automotive business only; for information about Smart Innovation, see its standalone Integrated Annual Report. % %,,,0, % %,,00,0,9 % %,9,,0, ENVIRONMENTAL 0 0 Greenhouse gas emissions (tonnes/ 000) Energy/revenue (Kwh/ 000)...0 Electricity/revenue (Kwh/ 000). 9.. Water/revenue (cubic meter/year/k ) Recycled aluminium (tonnes),0,09, Recycled oil (tonnes),0,,0 / /

7 . FINANCIAL AND NON-FINANCIAL ECONOMIC VALUE GENERATED AND DISTRIBUTED ( million) ECONOMIC VALUE GENERATED Revenue,. ECONOMIC VALUE DISTRIBUTED To shareholders (dividends)* ,09., To employees (employee benefits expense) To suppliers (consumption of raw and auxiliary materials) To society (corporation tax). 00..,.,0., Retained earnings Depreciation and impairment charges (*) Dividend paid during the year... / /

8 . GROUP PROFILE REVENUE BY BUSINESS, (*). Group profile CIE Automotive is a manufacturing group specialised in high value-added processes. It has two core platforms or business units: Automotive and Smart Innovation... EBITDA BY BUSINESS,.. AUTOMOTIVE The Automotive business, CIE Automotive s core business since 99, encompasses the design, production and distribution of components and sub-assemblies for the global automotive market. SMART INNOVATION Dominion, the Group s Smart Innovation subsidiary, helps its customers make their business processes more efficient either by fully outsourcing them (Services) or by deploying specialised solutions underpinned by technology and platforms (Solutions). COMPANY DATA Registered name Address CIE Automotive S.A. Telephone number Website Share capital,0,000 Number of shares 9,000,000 Alameda Mazarredo, 9 - º 009 Bilbao, (Bizkaia). Spain Par value 0. per share Core business Markets Automotive Smart Innovation Automotive Smart Innovation Manufacture of automotive components and smart innovation (Dominion) The CIE Automotive Group is present in countries and its shares are listed on the Madrid, Bilbao and Bombay stock exchanges / /

9 . GROUP PROFILE Global footprint MAGNITUDES BÁSICAS CARTA DEL PRESIDENTE CARTA DEL CONSEJERO DELEGADO NAFTA CANADA Dominion USA CIE Automotive Dominion MEXICO CIE Automotive Dominion SOUTH AMERICA ARGENTINA Dominion BRAZIL CIE Automotive Dominion CHILE Dominion COLOMBIA Dominion ECUADOR Dominion GUATEMALA Bionor HONDURAS Dominion PERU Dominion HAITI Dominion WEST EUROPE DENMARK Dominion FRANCE CIE Automotive Dominion GERMANY CIE Automotive Dominion ITALY CIE Automotive Dominion PORTUGAL CIE Automotive Dominion SPAIN CIE Automotive Dominion Bionor UK CIE Automotive Dominion CENTRAL EAST EUROPE CZECH REPUBLIC CIE Automotive LITHUANIA CIE Automotive POLAND Dominion AFRICA EGYPT Dominion MOROCCO CIE Automotive ROMANIA CIE Automotive RUSSIA CIE Automotive SLOVAKIA CIE Automotive Dominion SOUTH AFRICA Dominion ASIA & OCEANIA AUSTRALIA Dominion BAHREIN Dominion CHINA CIE Automotive INDIA CIE Automotive Dominion INDONESIA Dominion KUWAIT Dominion SAUDI ARABIA Dominion OMÁN Dominion PHILIPPINES Dominion QATAR Dominion TUR Dominion UNITED ARAB EMIRATES Dominion VIETNAM Dominion ACERCA DE ESTE INFORME MODELO DE NEGOCIO ESTRATEGIA GOBIERNO CORPORATIVO / 9 / / 9 / EJERCICIO

10 . GROUP PROFILE SHAREHOLDER STRUCTURE AT YEAR-END SIGNIFICANT SHAREHOLDINGS AT YEAR-END. NUMBER OF SHARES: 9,000,000 PAR VALUE: 0. per share SHARE CAPITAL:,0,000 SHAREHOLDERS DIRECT INDIRECT TOTAL % NOMINAL RISTEEL CORPORATION, B.V. (I),900,0 -,900,0.0%,,00. Core shareholders. Own shares (0%) % INTEREST Free Float ACEK DESARROLLO Y GESTIÓN INDUSTRIAL, S.L MAHINDRA OVERSEAS INVESTMENT COMPANY (MAURITIUS), LTD (II) MAHINDRA & MAHINDRA, LTD INVERSIONES, ESTRATEGIA Y CONOCIMIENTO GLOBAL CYP, S.L. (III) ANTONIO MARÍA PRADERA JÁUREGUI 0,0,,900,0,9, %,,00.,00,0 -,00,0.%,00,.0 -,00,0,00,0.%,00,.0,0,000 -,0, %,,00.00,0,009,0,000,900, %,,00. Core shareholders.% ELIDOZA PROMOCIÓN DE EMPRESAS, S.L,, -,, 9.0%,09,.0 Own shares 0% Free float.% ALANTRA ASSET MANAGEMENT, SGIIC, S.A. -,9,,9,.%,9,.0 ADDVALIA CAPITAL, S.A,0.,0 -,0,0.000%,,.00 / 0 / (I) RISTEEL CORPORATION, B.V. is controlled by ACEK DESARROLLO Y GESTIÓN INDUSTRIAL, S.L. (formerly CORPORACIÓN GESTAMP, S.L.) (II) MAHINDRA OVERSEAS INVESTMENT COMPANY (MAURITIUS), LTD is controlled by MAHINDRA & MAHINDRA, LTD. (III) INVERSIONES, ESTRATEGIA Y CONOCIMIENTO GLOBAL CYP, S.L. is controlled by ANTONIO MARÍA PRADERA JÁUREGUI The information above is based on notifications made by the Company s shareholders to the securities market regulator, the CNMV, and to the Company (data updated as of //).

11 . Chairman s statement Ladies and gentlemen, I am pleased to introduce CIE Automotive s Integrated Annual Report for, an intense year in which we embarked on a new stage in our Group s history with the presentation of our -00 Business Plan, listed Dominion on the stock exchange and renewed our M&A activity. will be remembered for the Dominion IPO. Having explained our Smart Innovation project to the market, Dominion s shares were listed on April with the financial backing of more than 0 institutional investors. Thanks to their endorsement, Dominion managed to raise IPO proceeds of million for financing its growth and reinforcing its capital structure, having sold one-third of its shares to the public. One month later, we presented our -00 Business Plan, pledging to double our net profit over five years by means of organic growth to 0 million by 00, enabling shareholder remuneration in excess of 00 million throughout the projection horizon. We based these targets - ambitious yet feasible - on projected average organic growth throughout the period of %, shored up by a targeted return on net assets (RONA) of between 0% and %, and EBIT margin of % and capital expenditure equivalent to % of revenue. We handily beat our guidance in. Although faced with markedly different performances by country, we once again grew faster than the market, posting a record net profit of. million.

12 Having taken a breather in 0 to work on integrating new companies, in we decided to renew our M&A drive. In the third quarter, the Automotive business integrated the Amaya Telleria Group, increasing our aluminium injection moulding and machining productive capacity in key markets, and in the fourth quarter, we acquired India s Bill Forge Private Limited, reinforcing our strategic commitment to Asia. At Dominion, we similarly displayed our ambition to spearhead sector consolidation, acquiring the following companies: ICC, Commonwealth Dynamics, the productive units of Abantia and the business assets of Scorpio and Protisa. We are in a position to bring delivery of our profitdoubling target forward to 09. Delivery of our guidance quarter after quarter, the strength of our organic growth and our resolute M&A strategy were applauded by the market, which bid our share price 9.% higher over the course of the year. Moreover, we believe we are in a position to bring delivery of our target of doubling 0 profits forward by one year to 09. To achieve this new ambition, we will leverage our business model articulated around technological, geographic and product/customer diversification, our decentralised management structure and the stringent hurdles we apply to all our investments, which have served us so well until now. The challenge for the years to come entails implementing advanced manufacturing across our factories, which means conjugating smart data analysis with new production methods to increase productivity. None of this will be possible, however, without the know-how of our excellent teams. I would like to stress that all of the achievements outlined in this Integrated Annual Report are the sum of the hard work of each and every one of the,000 professionals - including the recent addition of Newcor to the Group - comprising CIE Automotive. We would not be who we are without their passion and vision for the future, without their putting into practice the values that make us excellent at managing, at manufacturing and at engaging with our customer, supplier and shareholders. In exchange, CIE Automotive s commitment to its human capital translated into the contribution of over 0 million to work-life balance measures, among other initiatives, in. As the twenty-first century company that we are, we want to continue to grow and create value, while stoutly defending human rights. It is our desire to share our achievements with the communities that have taken us in and to strike an appropriate balance between our industrial activity and environmental protection. Our Code of Conduct and business ethics, our R&D and environmental management efforts and our participation in the Basque Industry.0 initiative and Forética Climate Change Cluster are moving us in that direction. I hope that this Integrated Report which I am proud to present to you will help you understand, albeit not in all the detail that would be necessary, our economic, social and environmental performance in, as well as our vision of the world and our hopes for the future. Many thanks, ANTÓN PRADERA CHAIRMAN / /

13 . CEO s statement Dear friends, In this letter I would like to weigh up a year in which we outdid ourselves, in which the lethargy of the global economy, coupled with intense competition around the world, did not prevent us from growing faster than the market, setting ourselves ambitious targets or posting outstanding results. We ended with record earnings results and full delivery of all our guidance: net profit was % higher at. million, thanks to revenue of. billion, up 9% from 0. Other key profit metrics similarly registered double-digit growth: EBITDA came in at 0. million, up % from 0, and EBIT amounted to 9. million, growth of %. Behind these figures lie geographic, technology and product/customer diversification, attained by means of new greenfield builds and a dynamic M&A policy. Last year we renewed our M&A strategy with seven deals (two in the Automotive business and five at Dominion), reinforcing our global value proposition. Today, our improved outlook and projections put us in a position to bring estimated delivery of the targets enshrined in the -00 Business Plan presented to the market in May forward by one year: we currently expect to post a profit of 0 million by 09. This means that we will grow by roughly 0% a year on average and will do so with a solid balance sheet, without letting leverage exceed two times EBITDA, as we have already proven capable in. On this point I would like to stress that, thanks to our financial discipline, in we managed to keep our cash conversion ratio at over 0% of EBITDA, while pushing our RONA ratio to %, on track for delivery of our strategic target of 0%-%.

14 CEO S Allow me to now review the highlights of our two business endeavours, Automotive and Dominion, last year. In the Automotive business, which accounts for % of our sales mix, revenue rose by % to. billion. This considerable growth was underpinned by organic growth of %, driven by a strong performance at all our factories in all our markets and boosted by M&A-driven growth of %, thanks to the integration of two important companies that are set to fortify our position in key markets: Spain s Amaya Telleria Group and India s Bill Forge Private Limited. The growth contributed by these two sources was undermined, however, by the adverse impact of exchange-rate movements and the impact of lower commodity prices on our end sales prices. Despite intense competition in the Automotive sector, we managed to grow faster than the market in all our business markets, albeit reaping different margins in the various geographies. In both Europe and NAFTA, CIE Automotive s factories continue to post excellent margins, despite the high number of complex projects under development. In Brazil we fell just short of our target of registering a double-digit EBITDA margin. However, we are glimpsing signs of a turnaround in the market that should add to momentum from 0. In Asia, we continue to lift our margins thanks to gradual operating improvement at our facilities in India and the ramp-up of our project in China. Lastly, we managed to defend a double-digit EBITDA margin at Mahindra Europe, despite the problems generated by the transfer of the production formerly carried out at Jeco to the other facilities. In the Automotive business, we outstripped the market, delivering topline growth of %. Our Smart Innovation platform, Dominion, meanwhile, grabbed the headlines with its IPO in April. As a result of this transaction, it raised proceeds of million, the first step in a financial reorganisation strategy designed to enable it to fund its growth and undertake largerscale projects. Thank-you to the investors who backed our project. In, Dominion s revenue rose by %, net of adverse exchange rate effects, underpinned by a more balanced contribution by Solutions (.%) relative to Services (.%). Margins also continued to expand, albeit partially diluted by the restructuring work undertaken at Abantia, one of the five companies acquired by Dominion in, along with Protisa, Commonwealth Dynamics, Scorpio and ICC. Turning to 0, look for continued growth and further progress on all our targets, delivering as we have done consistently until now. We started a fresh year of growth with the acquisition of Newcor in February 0, a purchase that reinforces our position in the US and is undoubtedly a good omen for the months to come. Thank you all for your support, JESÚS Mª HERRERA CEO / /

15 About this report. Methodology. Stakeholder engagement. Materiality assessment. Contact details / /

16 .. Methodology This Integrated Report is a summary of how CIE Automotive and its subsidiaries performed over the course of. It combines financial aspects with others related with the Group s social responsibility, all of which material to the organisation and/or its stakeholders. It is, therefore, the result of an effort and work performed by the entire firm. Input and oversight was provided by all the heads of the various departments and areas comprising CIE Automotive. Stakeholder engagement Stakeholder engagement is articulated around the 0-0 Corporate Social Responsibility (CSR) Strategic Plan (go to section CSR Strategic Plan). This Plan identifies the Group s stakeholders and the various channels for communicating with each. These channels are addressed in the following chapters. The report follows the guidelines issued by the international institutions considered authorities on corporate reporting matters: the Integrated International Reporting Council (IIRC) and the Global Reporting Initiative (GRI). SHAREHOLDERS FINANCIERS PROFESSIONALS REPORT SCOPE AND BOUNDARY The economic and financial information provided encompasses the activities of the CIE Automotive Group in its operating markets. In the information provided on its social and environmental dimensions, the boundary is specified in each instance; in general, it is broken down by business unit. As a result, the matters of relevance to the Automotive platform are described in detail, while those related to the Smart Innovation platform are presented in a more summarised fashion here and in greater detail in Dominion s Integrated Report. For more information about the Group s activities throughout the year, a number of other statutory reports are available for download on the corporate website, at the Annual Financial Statements, Annual Corporate Governance Report and the Annual Report on Director Remuneration. SECTOR GOVERNMENT SOCIETY SUPPLIERS CUSTOMERS BUSINESS PARTNERS / /

17 . STAKEHOLDER ENGAGEMENT CIE AUTOMOTIVE AND ITS STAKEHOLDERS SHAREHOLDERS Shareholder remuneration in the form of a dividend equivalent to one-third of net profit. Generation of credibility in the stock market, which translates into sustained share price gains. Provision of accurate and regular information to the investment community. PROFESSIONALS Provision of decent work in all its business markets and the training needed to do their jobs. Protection of employee well-being in a safe and healthy workplace. Facilitation of collective bargaining. Promotion of respect for human rights in at-risk markets. CUSTOMERS Strategic commitment to innovation to meet customers needs. Product quality and safety promise. Continuous fine-tuning of the supply chain. Efficient resource management in order to control prices. BUSINESS PARTNERS SUPPLIERS SOCIETY Automotive: Strategic alliance with Mahindra & Mahindra Ltd., which contributes profitability and synergies. Smart Innovation: Long-term technology partners for the construction of mutually-beneficial complex solutions. Equal opportunities contracting promise. Promotion of transparency and optimal pricing. Application of fair payment terms. Cooperation and dialogue with a view to delivering customer satisfaction. Business-driven development in the Group s operating markets. Financial support for community work targeted at the least privileged. Other contributions: Automotive: Helping to make safer and more environmentally-friendly cars. Smart Innovation: Creating advanced solutions in the civilian protection, healthcare and natural disaster prevention areas. GOVERNMENT SECTOR FINANCIERS Working with the authorities in the Group s business communities to improve various services. Implementation of government requirements, acting lawfully, transparently and guided by a cooperative spirit. Active participation, holding prominent positions, in several business associations in Spain and abroad in both the Automotive and Smart Innovation sectors. Negotiation of the best possible conditions on the basis of the Group s investment requirements and prevailing market conditions. / /

18 . STAKEHOLDER ENGAGEMENT STAKEHOLDER ENGAGEMENT CHANNELS Transparency governs how CIE Automotive engages with its stakeholders. In, the Group stepped up its communication efforts, redesigning its corporate website ( which went live on April. On the new website, accessible from any mobile or fixed device, the Group s stakeholders can find relevant information about the Company, the Automotive business (redirecting those interested in the Smart Innovation business to the Dominion website) and its sustainability dimension. It also contains information of relevance to potential employees and suppliers in the Human Resources and Suppliers tabs, as well as offering a Press Centre. The new corporate website has a special microsite for Investors and Shareholders which meets the technical and legal specifications stipulated in CNMV Circular /0. The website also provides interested parties with contact details for the head offices, multiple factories, sales offices and customer service offices. As a result of the Group s constant dialogue with market agents and investors, new information has been added to the Group s annual disclosures to specifically address CSR matters. After it launched the new corporate website, the Company sent a survey to the various departments looking for feedback and recommendations for how to improve it, all of which were subsequently implemented. A new survey will be conducted over the course of 0 with the idea of keeping the website permanently updated, coordinated and in touch with the needs of CIE Automotive and all its stakeholders. / /

19 .. Materiality assessment Contact data It is CIE Automotive s aim to address all the issues that are material to the Company and its stakeholders. To identify these issues, management reflected on which matters of interest should be included in the report, considering the aspects contemplated in the Global Reporting Initiative s G Content Index and those of greatest relevance to the Company (go to the GRI appendix and section.. Customer satisfaction). This is the starting point for validating and rounding out the result of this exercise in the near future by getting feedback from the Company s stakeholders by means of a materiality assessment. Annual report Coordinator Cross-Group CSR Committee (csr@cieautomotive.com) Investor Relations and Communication Office Lorea Aristizabal (laristizabal@cieautomotive.com) HR Officer Javier Álvarez (jalvarez@cieautomotive.com) Head of CSR & Compliance Susana Molinuevo (smolinuevo@cieautomotive.com) / 9 /

20 Business model. Identity and commitments.. Mission, vision and values.. CIE Automotive, a responsible company.. Creating added value. Platforms.. Automotive business.. Smart Innovation / 0 /

21 . Identity and commitments.. Mission, vision and values MISSION: WHO ARE WE? CIE Automotive is a supplier of components and sub-assemblies for the global automotive market, basing its actions on the use of complementary technologies and various associated processes. Through Dominion, CIE Automotive offers multi-services and solutions that seek to maximise the efficiency of production processes through innovation. In both projects we are growing sustainably and profitably to position ourselves as the benchmark partner by satisfying our customers with comprehensive, innovative and competitive solutions with high added value. We strive for excellence on the basis of the following commitments: Constant improvement of processes and efficient management thereof. Encouragement of participation, involvement and teamwork in a pleasant, safe setting. Transparency and integrity in everything we do. Care for and improvement of the environment. VISION: WHAT DO WE WANT TO BE? We aspire to be the benchmark industrial group specialising in high added-value process management. We seek to become the paradigm of a socially responsible company through our commitment to: People and their fundamental rights. The environment, by fostering initiatives to promote greater environmental responsibility. Creating value. Cooperation with stake holders. Excellence in management. We set out to be: A benchmark in the value chain in terms of quality, technology and services. A benchmark in green innovation and green design. ESTRATEGIA / /

22 . IDENTITY AND COMMITMENTS VALUES: WHAT IS IMPORTANT TO US? PEOPLE Respecting their fundamental rights. Providing them with fair working conditions. Encouraging: Their initiative, creativity and originality. Engagement and teamwork. Their ability to deliver targets and add value. A positive attitude towards change and continuous improvement. THE ENVIRONMENT Taking a preventative approach. Working to minimise any adverse impact. TRANSPARENT MANAGEMENT Promoting responsibility, integrity and commitment to a job well done. Disclosing in a clear manner all information of relevance to our activities so that it is known and understood. STAKEHOLDERS Promoting honest relations. Respecting their rights. LAWFULNESS Upholding Spanish and international law. ESTRATEGIA / / HONESTY, FAIRNESS AND INTEGRITY UNDERPIN ALL THESE VALUES

23 . IDENTITY AND COMMITMENTS.. CIE Automotive, a responsible company CIE Automotive has publicly and voluntarily committed to pursuing its business activities under the ethical, social and environmental principles enshrined in the United Nations Global Compact, if which it became a signatory in October 0. The Group has formulated an internal Corporate Social Responsibility (CSR) Policy which sets down the basic tenets and performance oversight systems and the stakeholder communication, involvement and engagement channels in the CSR arena. GUIDING PRINCIPLES To nurture the personal and professional development of the people comprising CIE Automotive. In, CIE Automotive joined the Transparency, Integrity and Good Governance Cluster of Forética, a platform of businesses and professionals from Spain and Latin America whose mission is to encourage the integration of environmental, social and governance (ESG) criteria into corporate strategy and management. THE FOUR DIMENSIONS OF SOCIAL RESPONSIBILITY AT CIE AUTOMOTIVE The CIE Automotive Group s CSR Policy is crystallised in its 0-0 Sustainability Plan which applies to the entire organisation and is articulated around four dimensions: governance, social, economic and environmental (go to section... Sustainability Plan). To ensure CSR criteria are properly embedded into all of its everyday activities, the Company has set up a Cross-Group Committee, which reports to the Corporate Social Responsibility Committee, in turn accountable to the Board of Directors (go to section. CSR Management). SOCIAL RESPONSIBILITY DIMENSION To establish and maintain open, two-way communication with stakeholders. To foster and ensure compliance with human rights all along the value chain. To implement a general purchasing process guided by CSR criteria. Social Dimension - Society - Workforce - Community Governance - Board - Management - Shareholders ESTRATEGIA To promote care for the health and safety of everyone working at CIE Automotive. To apply best corporate governance practices. To make a difference to the environment by means of better resource management. Economic Dimension - Consumers - Customers - Users - Authorities / / Environmental Dimension - Legal Compliance - Community - Environmental Performance

24 . IDENTITY AND COMMITMENTS MAINSTREAMING CSR CRITERIA IN THE NEW BUSINESS PLAN The Business Plan presented by CIE Automotive in incorporates CSR criteria into its key business drivers for the first time with the aim of delivering sustainable and profitable growth (go to chapter. -00 Business Plan). PREFERRED SUPPLIER GENERATING VALUE SOCIALLY RESPONSIBLE Providing our customers with end-to-end solutions which resolve their problems. We anticipate their needs and surpass their expectations using a multi-technology approach and eco-design criteria. Increasing business volume over the medium and long term. Generating growing returns. Committed to stakeholders. Respect for people and the environment. SUSTAINABLE AND PROFITABLE GROWTH ESTRATEGIA / /

25 . IDENTITY AND COMMITMENTS.. Creating added value CIE Automotive creates added value by means of system of processes ultimately aimed at delivering customer satisfaction. CIE AUTOMOTIVE S PROCESS MAP STAKEHOLDERS Customer Strategic Planning Objectives and Budget Development Compliance Management and Financial Control INNOVATION AND DEVELOPMENT 0 Quality Management Environmental Management Health and Safety ORDER INTAKE INDUSTRIALISATION OF NEW PRODUCTS ORDER FULFILMENT CUSTOMER SATISFACTION ESTRATEGIA / / 9 9 Supplier Management External Communication MANAGEMENT OF STAKEHOLDER ENGAGEMENT (CSR) Captur and transfer of Know-How Skills Development Getting staff more engaged Internal Communication

26 . SINGULAR HALLMARKS THAT DEFINE THE BUSINESS Platforms CIE Automotive focuses its business activities on two separate platforms or business units: Automotive and Smart Innovation. AUTOMOTIVE The design and production of parts for vehicles. Multiple locations Customer diversification SMART INNOVATION The provision of technology solutions and services designed to make productive activities more efficient. Multi-technology approach Disciplined investing and stringent return criteria ESTRATEGIA Decentralised management that generates value / /

27 . PLATFORMS.. Automotive CIE Automotive provides end-to-end services, components and subassemblies for all parts of a vehicle anywhere in the world. Five traits define its business model and place it at the forefront of its sector: multiple locations, customer diversification, a multi-technology approach, disciplined investing and stringent return criteria and decentralised management. ESTRATEGIA / /

28 . PLATFORMS MULTIPLE LOCATIONS In a globalised sector, CIE Automotive fragments and locates its production close to the car assembly plants. At year-end, the industrial conglomerate had over 9 manufacturing facilities in different locations and seven R&D centres in countries across Europe, the Americas, Asia and Africa, which between them employ some 0,9 professionals. Following the acquisition of Newcor in February 0, the Group has three new productive facilities in three different locations in the US. CIE Automotive has been expanding its global footprint year after year by means of acquisitions, greenfield projects and alliances with other companies, most notable among which its strategic alliance with India s Mahindra Mahindra Ltd., which gave rise to the Mahindra CIE Automotive Group with factories in India and Europe. Having consolidated the integration of the alliance with Mahindra in 0, in the Company renewed its worldwide geographic and technological diversification strategy, undertaking two major transactions. Integration of the Amaya Telleria Group, a transaction which has increased its manufacturing capacity using aluminium injection moulding and machining technology in key markets such as Mexico, Brazil, Central Europe and Eastern Europe. Acquisition of Bill Forge Private Limited in India, reinforcing the Group s strategic commitment to Asia and marking a major milestone on the path of creating an important player in the forging segment at the global level. AUTOMOTIVE MANUFACTURING FACILITIES BY MAJOR MARKET Automotive component plants by major market TOTAL ALUMINIUM () FORGING CASTING MACHINING () STAMPING () PLASTICS COMPOSITES ROOF SYSTEMS Europe () - - NAFTA () - - Brazil - - Asia - Total ESTRATEGIA () Includes one factory in Morocco. () Includes two multi-technology plants (CIE Amaya and Denat). () Includes five multi-technology plants (CIE Amaya, Autocom, Denat, Shanghai and Autoforjas). () Includes three multi-technology plants (CIE Celaya, Shanghai and Diadema). () Includes three machining plants in NAFTA that were integrated into CIE Automotive in February 0. / /

29 . PLATFORMS The integration of successive companies coupled with greenfield builds (factories built from scratch) enables the Group to satisfy its customers in four major vehicle OEM markets: Europe, NAFTA, Mercosur and Asia. / 9 / EUROPE This is CIE Automotive s main market. The Group has manufacturing facilities (two of which are multi-technology) in countries: Spain, France, Germany, Italy, Portugal and the UK in Western Europe and the Czech Republic, Lithuania, Romania, Slovakia and Russia in Central and Eastern Europe. It also includes one factory in Morocco. CIE Automotive s factories are characterised by their specialisation, process automation, strategic commitment to innovation and continuous improvement philosophy. Against this backdrop, in, CIE Legazpi continued to make progress on the automation of its forging lines and LT Forge successfully completed the transfer of several projects. For the first time, the Group won orders for petrol direct injection parts. Last year, the European forging factories integrated in the wake of the alliance with Mahindra - Mahindra Forgings Europe (MFE) - continued to execute their action plan for bringing their margins in line with those of the rest of the Group s factories. In, the German plants had to take on the production of the parts made at Jeco until this facility s closure in 0. The redistribution of production prompted a degree of congestion in the manufacture of tools, preparation of certifications, procurement of materials, etc. This situation had stabilised by the middle of the year and by year-end product quality and delivery times were back up at the usual standards. Elsewhere, the integration of the multinational based in the Basque region, Amaya Telleria, boosts CIE Automotive s capabilities in the manufacture of high value-added parts for the Central and Eastern European markets where a number of OEMs are concentrated, as well as in other key markets in the Americas. In Mexico, CIE Automotive expanded existing facilities and built four new facilities from scratch. NAFTA CIE Automotive has manufacturing facilities in Mexico (one of which multi-technology) and the US which service the light vehicle market in NAFTA (US, Mexico and Canada) and, to a lesser extent, the Brazilian, European and Asian markets. This region is the Group s most profitable as well as one of its highest-potential markets, which is why the Company plans on continuing to invest to increase its installed capacity. In Mexico, CIE Automotive expanded its facilities, executing four greenfield builds in the machining, forging, stamping and aluminium areas; these facilities are expected to generate aggregate revenue of approximately 0 million in the coming years. The acquisition of Bill Forge is expected to add value in 0. In the US, the acquisition of the remaining % of Century Plastics reinforced the Group s position in the world s second-largest vehicle making market. After the growth of recent years, was marked by stability. It is worth highlighting the announcement by CIE Automotive in February 0, subsequent to year-end, of the acquisition of American company Newcor, which has three machining factories in the US. The acquisition of Newcor was announced in February 0. ESTRATEGIA

30 . PLATFORMS ASIA CIE Automotive has manufacturing facilities in Asia (one of which multi-technology). It entered this market via its strategic alliance with the Indian group Mahindra & Mahindra, which culminated in the creation of the Mahindra CIE group. In India, one of the region s main growth engines, the Group manufactures forged, smelted, machined, stamped and magnetic parts, as well as making composites. These factories are lifting their margins and establishing contacts with the main global customers. This process will be bolstered by the purchase by Mahindra CIE of 00% of the shares of Bill Forge Private Limited, which has factories devoted to precision forging and machining in Bangalore, Coimbatore and Haridwar. In China, the world s largest car producer, CIE Automotive increased its production by.% in. In this market it mainly makes products for the European OEMs with a manufacturing presence in this market. CIE has three factories in China, one of which is a multitechnology facility. In the years to come, the Group expects to continue to expand in other countries in Southeast Asia and win business from the Japanese and Korean OEMs, the market leaders in this region. The Group plans to continue to expand its presence in Southeast Asia. BRAZIL CIE Automotive s factories in Brazil (three of which multitechnology) are specialised in the manufacture of plastic, stamped, forged, iron-cast, aluminium-injected and machined parts and are particularly competitive in plastic technology, colour body paintwork and chrome plating. Despite turbulence on the political and economic fronts, in, the factories continued to raise their efficiency and margins, leveraging their specialisation in high value-added products. Notwithstanding the difficulties of recent years, Brazil is still the world s ninth-largest vehicle producer and its ratio of vehicles per inhabitant remains well below that of developed economies, which is why CIE Automotive remains strategically committed to this market. Capacity utilisation remained high at most of CIE Automotive s Brazilian facilities, shaped in part by the closure of multiple local suppliers which have not been able to survive the crisis. Brazil is the world s ninth largest car producer. The penetration of vehicles per capita implies market upside. ESTRATEGIA / 0 /

31 . PLATFORMS CUSTOMER DIVERSIFICATION CIE Automotive has 0 strategic customers worldwide: major multinational car makers (OEMs) and Tier suppliers. It is Company policy not to be overly dependent on any single customer: none of its customers represents more than 0% of revenue. The strategy gives it bargaining power when it comes to negotiating prices and has facilitated growth in times of crisis. Customer solvency and the maintenance of demand for the product range is also crucial to taking profitable investment decisions. CIE Automotive s M&A-led growth strategy shores up customer diversification by bringing the customer bases of the companies it buys into the fold. AUTOMOTIVE REVENUE BY CUSTOMER TRW CONTINENTAL SCHAEFFLER NSK GKN DAF JTEKT OTHERS MAN THYSSEN KRUPP NTN HONDA JLR AUDI % % % % RENAULT 9% % % % % % % CHRYSLER GM NISSAN MAHINDRA DAIMLER OTHERS BMW MERCEDES TATA OPEL AUTOLIV SEAT DELPHI HYUNDAY JOHNSON CONTROLS AP-KAYABA MAHLE LEAR MARUTI KIA VISTEO ESTRATEGIA CATERPILLAR NEXTEER FAURECIA FIAT BOSCH VW PSA FORD MAGNA / /

32 . PLATFORMS MULTI-TECHNOLOGY APPROACH REVENUE BY TECHNOLOGY Automotive technologies CIE Automotive s product portfolio comprises more than,000 component and subassembly SKUs developed using seven basic different processes or technologies: forging, aluminium, casting, machining, stamping, plastics and roof systems. Thanks to the broad range of technologies used, it is one of the few Tier suppliers capable of offering alternative techniques for a given part or manufacturing a subassembly using multiple technologies in the main markets. This means that customers can select the optimal solution without having to contact different suppliers and developer teams. Forging Stamping & Tube Forming Machining Plastic Aluminium HPDC Roof Systems Iron Casting AGGREGATED SALES 9 million 0 million 0 million million million million million In order to continually broaden its product portfolio and technology capabilities in its various markets, CIE Automotive continually integrates new factories. Under the umbrella of this strategy, the Group acquired Bill Forge Private Limited (forging) in India and the Amaya Telleria Group (aluminium machining and injection moulding) in Spain in. NOTE: Additional turnover in other techonologies: million. Intercompany sales of 9 million % % Forging Stamping & Tube Forming Machining ESTRATEGIA % % Plastic + Roof Systems + Otros Aluminium Iron casting % 0% / /

33 . PLATFORMS STRATEGIC FOCUS ON CORE PRODUCTS CIE Automotive s strategy is to manufacture core products that present above-average profitability and respond to market demands: engine downsizing, compact hybrid vehicles, internal electrification systems and a focus on passenger comfort and safety. PRODUCT PORTFOLIO Forged products Crankshafts* Tulips and CV joint housings* Axle shafts Axles Aluminium products Gearshift housing* Clutch casing* Crankcases Steering box* Cast products Cage Turbochargers Crankshafts Differential case Drum brakes Machined products Tube stamping and shaping Hubs & rings* Electrical steering components* Differential cage Body in white (BIW) Steering column tube* Brake covers, chambers and membranes* Flanges* Seat structures Plastic products Logotipos Ashtrays* Armrests* Decorative items Roof systems Sliding windows* Panoramic roofs* Shade systems Multi-technology products Oil pan using three technologies: sheet metal stamping, aluminium injection moulding and plastic injection moulding* Forged common rails for diesel engines Tubular fuel rails for petrol engines* (*) Core products presenting growth and profitability above the market average on which CIE Automotive is strategically focused. Forged and case crankshafts ESTRATEGIA / /

34 . PLATFORMS DISCIPLINED INVESTING AND STRINGENT RETURN CRITERIA CIE Automotive invests year after year to increase its productive capacity and improve its facilities performance. In, capital expenditure amounted to million. Of this total, 9% ( 09 million) was earmarked to enhancing the productivity, quality and flexibility of existing facilities, while the remaining % ( million) was invested in greenfield projects and capacity expansion work. These investments were framed by the three pillars of CIE Automotive s disciplined investing policy: facility quality and flexibility, high ROI thresholds and a targeted EBITDA-to-cash conversion ratio of 0%. PILLARS OF CAPITAL EXPENDITURE DISCIPLINE Flexible standard machinery Machinery that can be used to manufacture for multiple customers and platforms, thereby maximising capacity utilisation. Investment criteria: recurring capex equal to the minimum ROI: %, designed to enable facility maintenance plus organic growth of -%. Strict investment discipline Disciplined analysis of investment opportunities, imposing stringent return hurdles. Zero operating working capital requirement. M&A criteria: EV/EBITDA <= in years EBITDA-cash conversion ratio By streamlining productive capacity and controlling investment, the Company s EBITDA-to-cash conversion ratio is higher than the market average. Target conversion ratio: 0%. ESTRATEGIA / /

35 . PLATFORMS DECENTRALISED MANAGEMENT THAT CREATES VALUE CIE Automotive has built a decentralised organisational model, made up of seven divisions, corresponding to the forging, stamping and tube forming, machining, plastics, aluminium, casting and roof system technologies, which are supported in their strategic decision making by a cross-cutting network structure of corporate functions devoted to corporate engineering, sales, procurements, quality, HR management, finance and treasury. OBJECTIVE: VALUE CREATION Thanks to this structure, decisions are taken nimbly and flexibly, in response to each division s needs, facilitating delivery of the targets laid down in the Business Plan. Cash GENERATION Full team COMMITMENT INCREASED PRODUCTIVITY OF INDIRECT WORKERS Simple and direct DECISION-MAKING Universal, exible and multi-tasking ENTREPRENEURS OBJECTIVE VALUE CREATION DECENTRALISED Management structure Support SERVICE NETWORK ESTRATEGIA STREAMLINED Structure Variable and long-term INCENTIVES / / GLOBAL presence and orders

36 . PLATFORMS.. Smart Innovation Dominion is CIE Automotive s multi-sector Smart Innovation business which combines know-how, technology and innovation to help its customers make their productive processes more efficient, either by fully outsourcing them or by implementing solutions underpinned by specialised technology and platforms. In its Services business line, Dominion takes on part of its customers value chain, focusing on the design of powerful technology platforms designed to make higher-quality and more efficient use of worksite resources. To do this, these platforms gather and handle large amounts of data in control centres in order to optimise management of a multi-tasking and flexible team of force field engineers, while guaranteeing high job quality and safety standards. In the Solutions segment, customer and sector knowledge are key. Dominion applies technology provided by its partners as well as technology designed in-house. Layering in Dominion s financial acumen and its track record managing complex projects enables it to offer end-to-end EPC solutions. These are known as 0º solutions. Dominion s business is specialised in three fields of expertise: Telecommunications and Technology (T&T), Industry and Renewable Energy. / / MORE EFFICIENT PROCESSES We apply technology, knowledge and innovation to efficiently Operate & Maintain our clients processes Services We manage the process Strong technological platforms to improve service delivery and efficient management of human and material resources Targeted contribution margin(): c.0% Higher recurrence Low CapEx needed Healthcare Technology Knowledge... and to Design & Build efficient processes. Innovation Solutions The customer manages the process Sectors under pressure for high efficiency Utilities Transport & Logistics () Defined as EBITDA before structural and central administrative cost. Renewable Energy T&T Innovation in technological, operative and financial aspects Industry Targeted contribution margin(): c.% Backlog oriented Low working capital requirements Public Administration ESTRATEGIA

37 . PLATFORMS WHAT SETS DOMINION APART Dominion s approach to value creation, underpinned by its Smart Innovation model, is articulated around four key dimensions which are very similar to its parent CIE Automotive s key success drivers. Dominion s Ds are: Digitalisation, Diversification, Decentralisation and Disciplined Finances. SINGULAR TRAITS D s DIGITALIZATION Technological Focus Technological Vitality Technological Platforms Transversality DIVERSIFICATION Solutions and Services Multisectorial >0 Countries >.000 Clients One Stop Shop DECENTRALIZATION Entrepeneur-minded management. Excellence and flexibility Lean central structure Operational Leverage FINANCIAL DISCIPLINE Minimum profit requirements Focus on FCF generation Strict M&A and investment discipline ESTRATEGIA / /

38 . PLATFORMS MARKET PRESENCE Dominion has six divisions which are tasked with channelling its multi-sector, multi-technology proposition to the market. Assumes responsibility for the efficient management of the productive processes of its customers in the telecommunications and technology sectors, combining its sector know-how with select process digitalisation. Focuses specifically on the outsourcing of its customers sales processes, mainly in the telecommunications arena. Concentrates on know-how in the manufacturing arena, proposing solutions and services that render productive processes in the various sub-sectors more efficient. Is home to Dominion s ability to design and develop inhouse technology platforms and solutions configured to address areas for improvement detected in its customers processes either directly or via projects with other Dominion divisions. Designs and executes integration projects which combine the firm s know-how and innovation capabilities with those of its partners, global leaders in their respective areas of expertise. Embodies Dominion s technological, operational and financial innovation capabilities applied to large-scale EPC projects. ESTRATEGIA Smart Innovation Dominion s separate annual report provides more detailed information about the Smart Innovation endeavour. / /

39 Strategy. Market backdrop. -00 Business Plan.. Business Plan levers.. Lines of initiative... Business Plan by platform... New financial management model CSR Strategic Plan / 9 /

40 . Market backdrop In May, CIE Automotive presented its -00 Business Plan to the market. The new plan is marked by an ambitious target, namely that of doubling net profit over five years by means of organic growth over 0 million by 00, enabling shareholder remuneration in excess of 00 million throughout the projection horizon. The good results reported in suggest that these targets may be delivered one year ahead of schedule, in 09. Vehicle sales rose by % worldwide in to 9 million units. As a result, turnover in the automotive sector hit a new record, albeit still lacking the dynamism observed prior to the crisis. China topped the country ranks by sales, recording growth of % thanks to stimulus programmes, followed by the US, which remained in second place, despite restrained demand for the most of the year, / 0 / and Japan, where sales narrowed by %. Western Europe, as did Central Europe, continued to recover: the market grew by %. Meanwhile, some emerging markets such as Brazil and Russia continued to show signs of fragility, contracting by 0% and %, respectively. In a year in which the overall figures point to sector strength, the trend in sales revealed certain weaknesses. Growth in China continues to slow; nevertheless, its growth remains the envy of the developed world. In Europe, Brexit unexpectedly cast uncertainty over the outlook for the market, while in the US, buying slowed during the tempestuous election campaign which culminated in the surprise victory of Donald Trump. Against this backdrop, the outlook for the car industry is for continued strong growth in the coming years, albeit slowing with respect to prior years. Growth in China is set to continue to slow. Western Europe will not be able to avoid the consequences of the UK s departure from the European Union, although there is scope for the European Central Bank to mitigate them. The Automotive business hit a new global sales record.

41 . MARKET BACKDROP The arrival of Donald Trump in the White House with his plans to cut taxes and invest in infrastructure may well reactivate consumer spending and drive demand for vehicles; any new infrastructure would not, however, have an impact until late 0. VEHICLE SALES WORLDWIDE* (million units) 0 Europe. 9. Greater China.9.00 Japan/Korea.. Middle East/Africa.. North America 0.. South America..9 Southeast Asia..9 TOTAL.0 9. (*) Vehicles from 0 to tonnes / /

42 . MARKET BACKDROP TRENDS IN THE VEHICLE INDUSTRY The vehicle industry is being shaped by a series of trends that are destined to have a significant impact on the automotive parts industry: DOWNTREND IN VEHICLE PRICES PRODUCTION OF MORE ENVIRONMENTALLY-FRIENDLY VEHICLES PROGRESS ON VEHICLE AUTONOMY Surplus installed capacity in Europe, coupled with growing vehicle imports from Japan and Korea, and due from China from 0, is driving increasingly fierce competition among OEMs. This is resulting in ever lower retail prices, more extras in every range, special offers and better warranties. With OEMs looking to preserve their margins, they are increasingly exerting price pressure on their suppliers, which are being forced to lift their efficiency and competitiveness levels consistently. Only the suppliers that prove excellent will survive in such a competitive market. Emissions legislation has been tightened successively and steadily in recent years, affecting carbon (CO), nitrogen oxide (NOx) and particles emissions alike. The recent emissions scandals affecting multiple OEMs have prompted the revision of the Euro standard and resulted in more ambitious targets for the years to come, including the mandatory introduction of particle filters into GDI engines and SCR systems for diesel systems. In parallel, the purchase of electric vehicles and hybrid plug-ins is being increasingly stimulated. These new electric and hybrid engine developments have implied major innovation efforts in terms of batteries, electric engines, electronics and vehicle light-weighting. The industry is moving inexorably towards autonomous or semi-autonomous vehicles. The conviction that this technology will reduce accident rates to virtually zero, coupled with more environmentally-friendly driving and the scope for associating a high number of business models with this technology, is making autonomous driving a top priority for all car and truck OEMs. / /

43 . MARKET BACKDROP PERFORMANCE BY MARKET IN EUROPE Vehicle production in Europe increased by % to. million units, thanks to stronger demand in Western Europe and despite the contraction in Eastern Europe, dragged down by the situation in Russia. Sales volumes rose strongly in Western Europe, extending the recovery from the losses sustained during the crisis, to reach. million units (+%). The pace was uneven across the various regions, with southern European consumers more active, driven by a more pronounced need to upgrade their vehicles. Sales began to take off in Germany and France thanks to support for scrapping programmes and, to a lesser degree, sales through other channels (rental and concessions). Looking forward, it remains to be seen how Brexit will ultimately impact the automotive industry. In Eastern Europe, on the other hand, sales rose a meagre % to.9 million registrations in, driven by the Central European markets. Sales in Russia contracted again, by %, albeit proving relatively stable in the latter months of the year. In Spain, production rose % to.9 million units, while sales volumes jumped % to. million units. By 00, which is also when the current Business Plan runs to, production in Europe is expected to have reached. million units, up.% from levels. / /

44 . MARKET BACKDROP PERFORMANCE IN CIE AUTOMOTIVE S MARKETS NORTEAMÉRICA Sales volumes reached. million units in, up % year-on-year. Mexico produced. million vehicles. Experts see significant upside in homemarket demand in Mexico as the middle class ranks increase. It is not clear what the US administration will do next in terms of putting the protectionist policy announced by the new president during his electoral campaign into practice or the scope of this intervention. It seems fair to say that if there is to be a drastic change, it is not going to materialise in the short term. For the time being, forecasts are calling for production of. million vehicles in 00, marking growth of.% with respect to. INDIA India is currently the world s fifth-largest light vehicle producer. Sales volumes in this market increased by % in to. million vehicles, while production jumped 0% to. million units. Looking forward, this market is expected to register much faster growth than other Southeast Asian markets as it is emerging as an export hub. By 0, the automotive industry is expected to contribute % of India s GDP, with the OEMs increasing their installed capacity in the long term. Production in India is forecast at. million vehicles in 00, which would translate into growth of.% compared to. / /

45 . MARKET BACKDROP BRAZIL Two million vehicles were sold in Brazil in, 0% fewer than in 0, while production contracted by % to. million units. Faced by the slump in domestic demand, triggered by high unemployment and inflation, a credit crunch and a complicated political situation, the automotive industry is focusing on the export business. However, the situation is expected to begin to turnaround in 0: forecasts call for growth of % versus (production of. million units). This growth should continue in the following years, driving production towards. million vehicles in 00 (up % from ). MACRO TRENDS CHINA Having produced. million units (+%) and sold million units in, China is home to the world s largest car industry. The stimulus measures passed by the Chinese government had a positive impact last year and growth is expected to continue, driven by low penetration ( vehicles per 00 inhabitants). Production is expected to reach 0. million units by 00, growth of % from levels. Dominion s performance is also shaped by certain macro-trends which throw up opportunities for the Group s Smart Innovation business: The most significant is unquestionably the impact of the digital revolution on all sectors. Just as the digitalisation phenomenon is obliging companies and organisations to rethink their processes in order to become more efficient, it is also a vital part of the solution. DOMINION IN ITS CONTEXT Dominion s business is highly dependent on economic momentum in the various sectors and geographies in which it operates and on developments in the mega-trends underpinning its value proposition. According to the International Monetary Fund (IMF), the global economy grew by a modest.% in, compared to.% in 0, a stable average that masks more pronounced differences between the various blocks of countries. For a more accurate snapshot, it is important to observe the growth pattern in the more than 0 markets in which it has a stable presence. Other key trends around which Dominion articulates its value proposition include: Business process outsourcing (BPO) One-stop shop solutions Dealing with compliance Sustainability For more information, go to Dominion s Integrated Annual Report. / /

46 . -00 Business Plan Last year, CIE Automotive unveiled its new -00 Business Plan to the market, undertaking to double net profit to over 0 million within five years time by means of organic growth. As was the case with its last plan (0-0), the Company s performance suggests that it will be in a position to deliver this target one year ahead of schedule.... Business Plan levers The new Business Plan was published after the Group had delivered, ahead of schedule, in 0, some of the key targets laid down in its prior 0-0 Business Plan, such as that of doubling 0 profits. The Company has therefore laid unbeatable foundations for achieving these new challenges, having successfully implemented the lines of initiative targeted in 0: penetration of the Asian market (via the alliance with India s Mahindra & Mahindra), growth via greenfields (built in Mexico, Brazil, China, India and Russia) and maintenance of a solid financial position thanks to disciplined investing and new sources of financing. Penetration of the Asian market Growth via greenfields Maintenance of a solid financial position / /

47 . -00 BUSINESS PLAN -00 BUSINESS PLAN: STARTING POSITION The starting point for the -00 Business Plan is the financial performance recorded in 0, which is summarised below: Revenue of. billion EBITDA of.m (%) and EBIT of. m (9%).% Operative Cash Flow RONA % 0m of debtnd/ EBITDA:.x m of equitynd/ Equity: 0.x ~,0 employees./share.99bn capital The new -00 Business Plan is based on the same key differentiating factors that have enabled CIE Automotive to deliver its targets for the past 0 years: industrial vocation coupled with financial-mindedness, compelling customer, geographic and product diversification, continued focus on process efficiency, decentralisation and simplification of the chain of command, a strict opportunity cost and expected returns-based M&A policy and investments. New factors are also coming into play such as reputation, the long-term human capital strategy and progress in today s digital world towards smart factories (factories.0). / /

48 . -00 BUSINESS PLAN.. Lines of initiative CIE Automotive has pledged to pursue the following lines of initiative and deliver the targets associated with each by means of: A) ORGANIC GROWTH: CIE Automotive plans to increase its market and customer penetration and develop value-added components with the aim of driving compound annual revenue growth of %. To achieve this, it will undertake 9 greenfield projects (building new facilities or expanding existing ones), adding capacity in all key geographies. The goals enshrined in the -00 Business Plan include a return on net assets (RONA) of between 0% and %, expansion of the EBIT margin to % by means of productive upgrades and capital expenditure of approximately % of revenue per year. This scenario will translate into healthy cash flow generation, enabling the Group to commit to a leverage ratio (net debt/ebitda) of around 0.x by the end of the projection period. B) M&A-LED GROWTH: As a result of the low leverage CIE Automotive would present if it meets its organic growth targets, over the five year horizon the Group would be in a position to acquire new companies that would add around billion to revenue ( 00 million in the Automotive business and 00 million in Smart Innovation) without driving its net debt-to-ebitda ratio above x by the end of the period. ORGANIC GROWTH TARGETS EBIT TARGET () % RONA TARGET () 0-% OBJECTIVE: SHAREHOLDER REMUNERATION OF 00M SALES TARGET ^~ % MAINTENANCE AND GROWTH CAPITAL EXPENDITURE ~% of revenue NET DEBT TARGET () <0,X () EBIT: earnings before interest and tax. () RONA stands for return on net assets: EBIT/ net assets (fixed assets + net working capital - goodwill not derived from cash flows). () Net debt: bank and other borrowings less cash and cash equivalents. Against this backdrop, following a year of consolidation in 0, the Group renewed its investment strategy, acquiring the Amaya Telleria Group and India s Bill Forge Private Limited in and Newcor in early 0, accounting for close to 00 million of the additional 00 million of revenue contemplated in the Automotive business. In parallel, it acquired Commonwealth Dynamics, the energy assets of Grupo Eléctrico Scorpio, Abantia, Protisa and ICC of the US in the Smart Innovation segment, locking in around 00 million of the 00 million of additional revenue contemplated at Dominion (go to sections. Platforms and... Financial performance). / /

49 . -00 BUSINESS PLAN... Business Plan by platform The Business Plan sets out a different strategy for each business platform: Automotive and Smart Innovation. AUTOMOTIVE In the Automotive segment, CIE Automotive plans to forge ahead with its current market strategies, which are designed to cut emissions, reduce vehicle weight and achieve industrial maturity by means of smart factories capable of making efficient use of available resources and constantly adding to the Group s know-how as a whole. Shaped by these general objectives, the goal is to take advantage of specific opportunities in each technology: FORGING / 9 / CIE Automotive is already one of the world s top five producers of forged parts, underpinned by a clear-cut customer orientation and know-how in certain core products. Armed with these strengths, CIE will seek to continue to grow in the European market, while increasing its presence in the rest of the world via development of its core products. It is against this backdrop that CIE Automotive acquired Bill Forge Private Ltd. in. This new company brings six manufacturing facilities in India and one in Mexico. MACHINING The Group s machining facilities are lean and efficient and have proven nimble. Thanks to these capabilities, coupled with financial wherewithal, it is ready to take on global projects and produce high value-added products. It is against this backdrop that CIE Automotive acquired the Amaya Telleria Group, which brings five factories, each of which equipped with machining lines, in. It is also worth highlighting the announcement by CIE Automotive in February 0, subsequent to yearend, of the acquisition of Newcor, an American company with three machining plants in the US. ALUMINIUM The need for lighter cars is benefitting this division, which is generating compelling margins; it boasts efficient factories with investment wherewithal. This will enable this division to diversify its customer portfolio, tackle new parts and products and increase its margins in the years to come. Indeed, CIE Automotive has already begun to tap its growth opportunities in this technology with the acquisition in of the Amaya Telleria Group with its five factories, three of which work with aluminium. METAL CIE Automotive s metal division encompasses different technologies: transfer and progressive dies, assembly and paintwork. It has strategic engineering hubs in Spain, Brazil and Mexico. The growth opportunities to be targeted by this division include increasing its penetration of the Tier suppliers and capturing the growth sparked by the start-up of new OEM factories in India, Mexico, Eastern Europe and China. PLASTICS CIE Automotive s plastic injection facilities are highly regarded in both the Tier supplier and OEM segments on account of their expertise and efficiency. In this division, production is expected to grow in Mexico, Spain and Eastern Europe, leveraging the growing use of plastic in cars. The Group does not rule out new acquisitions in this technology. Notably, in it acquired the shares it did not already own in Century Plastics. The outlook for the various markets and technologies give rise to different strategies and objectives for the Group s various geographies.

50 . -00 BUSINESS PLAN ORGANIC GROWTH STRATEGIES AND TARGETS BY GEOGRAPHY CAGR MERCADO VS CIE () MEJORA DEL MARGEN EBIT () RATIO RONA () GREENFIELDS () Europe % vs % +pp % Aluminium () Plastics (0) Aluminium (0) Mahindra-Europe,% vs % +pp % Hatebur (0) Forging (0) Brazil 0% vs % +9pp % Plastics () Metal () Machining (0) Aluminium (0) NAFTA 0% vs % % % Forging () Aluminium (0) Plastics (00) Machining (0) Metal (00) Asia 0% vs % +pp 0% Metal (0) Forging (0) Aluminium (00) Machining (09) Roof Systems (00) () CAGR: compound annual growth rate. () EBIT: earnings before interest and tax. () RONA stands for return on net assets: EBIT/ net assets (fixed assets + net working capital - goodwill not derived from cash flows). () Greenfields: new factory builds or expansion of existing facilities. / 0 /

51 . -00 BUSINESS PLAN SMART INNOVATION At CIE Automotive s Smart Innovation endeavour, Dominion, the overriding strategic goal is to continue to gain scale and profitability by leveraging its know-how, capabilities and market position. Medium term, the aim is to lift revenue to billion, with an EBITA margin of % and a RONA of 0%, while keeping leverage low, at under x EBITDA, and maintaining an unwavering focus on converting EBITDA into cash (> 0%). REVENEUES,000m NFD / EBITDA <x () NFD / EBITDA -.x () NFD / EBITDA 0.x () REVENEUES + % orgánico + Inorgánico > 00m REVENEUES m EBITA.% EBITA,% () EBITA % Drivers of growth Cross selling Transversality and other organic growth M&A / Inorganic Growth CASH CONVERSION >0% EBITDA CASH CONVERSION >0% EBITDA CASH CONVERSION >0% EBITDA RONA 0.% RONA 0% RONA > 0% Drivers of profitability Operational efficiency Operational leverage Higher value mix (Services/ Solutions) 0 MEDIUM TERM GUIDANCE () Including still to be paid earn outs of recent acquisitions, the NFD/EBITDA ratio would be.x(0); -.x (). () Target NFD/EBITDA ratio includes potential earns outs. () Organic EBITA would have been =,%. Note: objectives achievement would imply full achievement in the company s strategy. / /

52 . -00 BUSINESS PLAN To achieve its revenue target, the Smart Innovation subsidiary plans to boost cross-selling and cross-fertilisation and to undertake new acquisitions. To deliver its profitability and cash conversion goals, it plans to fine-tune its business mix, drive efficiency gains and unlock economies of scale. For more information about Dominion s strategy, go to Dominion s Annual Report.... New financial management model To execute the Business Plan, CIE Automotive has formulated a new financial management model articulated around three cornerstones: Mainstreaming of a the new financial management culture. Establishment of global financial partners. Development of new financial management areas with two key mandates: Attaining a compelling credit rating and assessing multiple forms of financing. Monitoring and managing existing risks using hedging strategies. / /

53 . -00 BUSINESS PLAN CSR Strategic Plan The -00 Business Plan includes the initiatives contemplated in CIE Automotive s Corporate Social Responsibility Plan, embracing the action plans envisaged in the 0-0 CSR Strategic Plan. This plan sets the following targets: Supporting CIE Automotive s Business Plan and mitigating reputational risks. Enhancing the Group s CSR positioning. Increasing non-financial information controls and security. Responding appropriately to customer needs in the CSR arena. Capturing new talent to facilitate growth. Mitigating supply chain risks. Responding to corporate governance regulatory requirements and recommendations. Based on CIE Automotive s current level of readiness and prioritisation in terms of their impact on the organisation, the following initiatives were undertaken in : Formulation of CIE Automotive s Ethics Framework to guarantee knowledge, oversight and application of the Group s rules of conduct in all its business markets. To this end, the new Code of Conduct, approved in December 0, was distributed throughout the entire organisation, and the Whistle-Blowing Channel was fine-tuned to enhance its effectiveness and fit-for-purpose (go to section. Business ethics). Systematisation of the process of identifying stakeholder expectations and aligning these with the idiosyncrasies of each of the geographies in which CIE Automotive has a significant presence and with the business strategy. Website publication of certain corporate policies within the purview of the Board of Directors to ensure compliance with Spain s Corporate Enterprises Act and reinforce CIE Automotive s body of internal rules and regulations (go to section. Regulatory framework). Approval of a Tax Strategy and associated reporting model and publication of the Tax Strategy, enabling the Board of Directors to oversee the correct functioning of the tax compliance function, thereby mitigating tax risk. Integration of ESG risks into supply chain management to reinforce CIE Automotive s purchasing processes with a dual objective: effective management of ESG risks posed by suppliers and management of the associated reputational risk (go to section. Sustainable supply chain management). Definition of a Talent Development Plan to guarantee coverage of key positions and retain the most talented professionals. Establishment of an Eco-Efficiency Plan, including a monitoring regime with specific reduction targets at the factory level and a reporting system for the related information so that performance in this connection can be duly monitored (go to section. Environmental management). Definition of a Community Action Management Model so that CIE Automotive can effectively manage the donations and other community contributions made across its business markets. To compile all this information, the Group conducted a global survey using SAP (go to section. Environmental management). Other lines of initiative are in the process of implementation; they are related to integrating ESG criteria into the growth, employee training, risk identification and management efficiency processes, among others. The 0-0 CSR Strategic Plan sets main targets. / /

54 Corporate governance. Corporate governance model. Corporate governance bodies.. Annual General Meeting... Board of Directors.. Executive Committee.. Remuneration policy. Corporate Social Responsibility management. Business ethics. Regulatory framework. Risk management / /

55 . Corporate governance model CIE Automotive has oriented its corporate governance model towards protection of the corporate interest. It upholds the leading international standards and is articulated around Spain s Good Governance Code For Listed Companies. In, the Group brought its risk management system to a new level. Last year, it also joined Forética s Transparency, Integrity and Good Governance Cluster. CIE Automotive s corporate governance model is articulated around its body of in-house rules and regulations which comprise its Bylaws, the rules governing its governance bodies the Board, Committees and Annual General Meeting, the corporate policies regulating stakeholder relations and a series of internal rules, with the various codes of conduct standing out: Internal Code of Professional Conduct Internal Securities Markets Code of Conduct Criminal Risk Prevention Manual The principles dictating how the system works are defined in the Corporate Governance Policy. The Board of Directors is responsible for defining and periodically revising CIE Automotive s organisational structure at the highest level; it delegates the duty of ensuring that the areas of the Company below this structure have the human and capital resources they need in the executive team. In the pursuit of transparency, both the rules and regulations formulated by the Group and its annual reports on corporate governance and director remuneration are available for consultation on the new corporate website, launched in, which is compliant with the technical and legal formalities and specifications stipulated by Spain s securities market regulator, the CNMV, in Circular /0 (of June 0). / / PRINCIPLES Maximising CIE Automotive s value on a sustained basis, protecting its shareholders interests and rights. Promoting informed shareholder participation and ensuring equal treatment, protecting and facilitating the exercise of their rights. Committing to transparency. CIE Automotive implements measures designed to reinforce the transparency and reliability of the financial information it discloses to the market. Encouraging director attendance at and participation in board meetings so that they tap their experience and knowledge to comply with the duties and obligations stipulated in the Board Regulations, ensuring that the Board s performance is regularly assessed. Overseeing the due conduct, professionalism and independent judgement of the members of the Board of Directors and management team and compliance with internal and external regulations in the market abuse arena, particularly the Internal Securities Markets Code of Conduct. Guiding CIE Automotive s strategy. Safeguarding the external auditor s independence so that the latter can issue its audit report objectively and impartially. Complying with the most stringent corporate governance practices in Spain and internationally.

56 . MODEL TRANSPARENCY CLUSTER CIE Automotive s good work on the corporate governance front is evident in its membership of the Transparency, Integrity and Good Governance Cluster created by Forética, a Spanish business platform. Forética is the leading association of CSR firms and professionals in Spain and Latin America and its mission is to encourage the integration of environmental, social and governance (ESG) criteria into corporate strategy and management. The Cluster s specific mandate is to transpose the main trends and debates regarding transparency, governance and corporate integrity into the Spanish context, contribute to the generation of know-how, collaborate with government and opinion leaders and develop a leadership position with the aim of becoming the authority in Spain on transparency, governance and integrity. Over the course of last year, the Transparency Cluster analysed the implications for business of the European Directive on the disclosure of non-financial and diversity information, which was supposed to have been transposed into Spanish law before the end of. / /

57 . Corporate governing bodies.. Annual General Meeting The shareholders meeting is CIE Automotive s highest decisionmaking body. In, the Annual General Meeting took place on April and was attended by shareholders, in person or duly represented, which hold.% of the Company s share capital. Its duties and powers are regulated in the Bylaws and AGM Regulations. The resolutions ratified at the AGM included: Authorisation of the annual financial statements of the company and its consolidated group and discharge of management s performance in 0. (before withholdings), which was paid out on July 0, topping up the interim dividend of 0. per share that had been paid out that January. Board authorisation for the derivative acquisition of own shares, either directly or through group companies, and for the reduction of share capital in order to cancel own shares, delegating the powers needed to execute the resolution in the Board. Re-election of all the members of the Board of Directors for a four-term term. Designation of PricewaterhouseCoopers as the company s statutory auditor... Board of Directors CIE Automotive s Board of Directors is its highest governance body and is made up of members. The Company s directors were all reelected for a four-year term at the Annual General Meeting of April, at the request of the Appointments and Remuneration Committee. The directors duties and powers are regulated in the Bylaws and Board Regulations. In, the Board of Directors met on six occasions and all the meetings were presided by its chairman. Payment of a final dividend from 0 profits of 0. per share / / For more information on the resolutions ratified at the AGM

58 . GOVERNING BODIES BOARD OF DIRECTORS (at December ) POSITION CLASS OF DIRECTOR EXECUTIVE COMMITTEE APPOINTMENTS AND REMUNERATION COMMITTEE AUDIT AND COMPLIANCE COMMITTEE CSR COMMITTEE Don Antonio María Pradera Jáuregui ELIDOZA PROMOCION DE EMPRESAS, S.L., represented by Ms. Goizalde Egaña Garitagoitia Don Jesús María Herrera Barandiarán Don Ángel Ochoa Crespo Don Carlos Solchaga Catalán Lead Independent Director Don Francisco José Riberas Mera Don Juan María Riberas Mera Don Fermín del Rio Sanz de Acedo Chairman Executive Chairman Vice Chairwoman Chief Executive Officer Proprietary Member Chairwoman Executive Member Member Independent Chairman Member Member Proprietary Member Chairman Member Proprietary Member Member Member Proprietary Member Executive Member / /

59 . GOVERNING BODIES BOARD OF DIRECTORS (at December ) MAHINDRA & MAHINDRA, Ltd., represented by Shriprakash Shukla MAHINDRA & MAHINDRA, Ltd., represented by Vankipuram Parthasarathy ACEK DESARROLLO Y GESTIÓN INDUSTRIAL, S.L., represented by Francisco López Peña ADDVALIA CAPITAL, S.A., e represented by María Teresa Salegui Arbizu POSITION Member Member CLASS OF DIRECTOR Proprietary Proprietary EXECUTIVE COMMITTEE APPOINTMENTS AND REMUNERATION COMMITTEE AUDIT AND COMPLIANCE COMMITTEE Member Proprietary Member Member Proprietary Member Member CSR COMMITTEE QMC DIRECTORSHIPS, S.L., represented by Jacobo Llanza Figueroa Vocal Member Proprietary Secretary (Non-Board Member): Roberto José Alonso Ruiz Deputy Secretary, non-member: José Ramón Berecibar Mutiozabal / 9 / IN, THE BOARD OF DIRECTORS, ITS MEMBERS AND ITS COMMITTEES WERE ASSESSED. NO SIGNIFICANT RESULTS WERE FOUND.

60 . GOVERNING BODIES COMMITTEES The Board of Directors has four committees: Executive Committee. A permanent committee in which the Board has delegated all of its powers other than those that that cannot be delegated pursuant to its Bylaws and other than those specifically reserved to the Board. The Executive Committee met three times in. Audit and Compliance Committee. Its purview is to oversee the financial reporting process and ensure the independence and effectiveness of the internal audit function. Its duties include revising the internal control and risk management systems, selecting, appointing and replacing the auditor and taking receipt of information from the auditor, whose independence it must safeguard. This committee held four meetings in. EXECUTIVE COMMITTEE AUDIT AND COMPLIANCE COMMITTEE POSITION CLASS OF DIRECTOR POSITION CLASS OF DIRECTOR Antonio María Pradera Jáuregui Chairman Executive Carlos Solchaga Catalán Chairman Independent Jesús María Herrera Barandiarán Member Executive ADDVALIA CAPITAL, S.A. Member Proprietary Fermín del Rio Sanz de Acedo Member Executive Ángel Ochoa Crespo Member Independent ELIDOZA PROMOCION DE EMPRESAS, S.L. Francisco José Riberas Mera Member Member Proprietary Proprietary / 0 /

61 . GOVERNING BODIES Appointments and Remuneration Committee. Among other duties, this committee is tasked with formulating and reviewing the criteria for selecting director candidates, proposing and monitoring the director remuneration system, in particular the amounts of their annual pay, and overseeing new director selection procedures. It met three times in. Corporate Social Responsibility Committee. Created in 0, this Committee is made up of three members and its job is to promote the company s corporate governance and CSR strategy, among other duties. It met once in. APPOINTMENTS AND REMUNERATION COMMITTEE SOCIAL RESPONSIBILITY COMMITTEE POSITION CLASS OF DIRECTOR Ángel Ochoa Crespo Chairman Independent Francisco José Riberas Mera Carlos Solchaga Catalán Member Member Proprietary Independent ELIDOZA PROMOCION DE EMPRESAS, S.L. ACEK DESARROLLO Y GESTIÓN INDUSTRIAL, S.L ADDVALIA CAPITAL, S.A. POSITION Chairwoman Member Member CLASS OF DIRECTOR Proprietary Proprietary Proprietary / /

62 . GOVERNING BODIES DIRECTOR PROFILES The members of the Board of Directors of CIE Automotive are prestigious professionals who have demonstrated their competence and credibility over the course of their careers. Of the Company s directors, three are executive, two are independent and eight are proprietary. That means that 0% of the non-executive members are independent. Moreover, these independent directors sit on the Appointments and Remuneration Committee and the Audit and Compliance Committee. As for their nationalities, are Spanish and two are Indian. Female directors account for.% of the total (two members). The roles of the Chairman and CEO are clearly defined in the Company s Board Regulations and fall to different people, even though both sit on the Board of Directors. / / Antonio María Pradera Jáuregui CHAIRMAN (EXECUTIVE) A road engineering graduate from Madrid s Polytechnic University, Mr. Pradera began his career in 99 as a director at Banco Bilbao, where he worked until 9. In 9, he was named executive director of Nerisa, where he stayed until 99, when he moved to SEAT as director of strategy. He played an important role in the creation of INSSEC in 99, where he served as chief executive until 00. Since 00, he has been serving as the executive chairman of CIE Automotive, working in the strategy and financial design departments, and of Global Dominion Access, S.A. Since May 0, he has been a director at Tubacex and since June 0, a director at Corporación Financiera Alba. Goizalde Egaña Garitagoitia VICE CHAIRWOMAN (PROPRIETARY) A graduate of economic and business science from Deusto University in San Sebastián, where she also completed post-graduate studies in Business Competitiveness and Regional Development and an executive financial management programme. She began her career in the finance department of Compañía Ibérica de Encuadernaciones S.A. (CIBENSA) in 99 and later joined the team of auditors at Attest Consulting (990-99). She served on the board of INSSEC and is currently a director of Global Dominion Access, S.A.

63 . GOVERNING BODIES Jesús María Herrera Barandiaran CHIEF EXECUTIVE OFFICER (EXECUTIVE) A graduate of business administration from the Basque University, Mr. Herrera also holds a Master of International Expansion (from Euroforum). He joined CIE Automotive as CFO in 99, also heading up the HR function for CIE Orbelan. In 99, he was named deputy manager and in 99 he was promoted to general manager. In 000, he took over management of CIE Brazil and in 00, of CIE Plasfil. That same year he was named global director of CIE Plástico, a position he held until 00, when he took up the general manager spot at CIE America. He has been the CEO of Autometal S.A. since 00 and in 0 he was named COO for the entire group; although just a year later he would be named general manager of CIE Automotive. Lastly, in 0, the Board of Directors appointed Mr. Herrera as CEO of CIE Automotive. He is also a director of Global Dominion Access, S.A. Ángel Ochoa Crespo DIRECTOR (INDEPENDENT) A graduate of business administration from the Basque University, Mr. Ochoa also holds a Master of International Business Administration (MIBA) from the United States International University of San Diego. He boasts over years experience in the financial sector, having held a number of positions, including that of manager of the Multinationals Department at Barclays Bank, deputy director of Corporate Banking at Lloyds Bank, deputy general manager at Banque Privée Edmond de Rothschild Europe in Spain and director for the Basque and Cantabria regions at Banco Sabadell Atlántico. He has also sat on the boards of several open-ended collective investment schemes (SICAVs). He is currently investment advisor and partner at the firm Angel Ochoa Crespo EAFI. He is also director and secretary of ISLOPAN, S.A. / / Carlos Solchaga Catalán DIRECTOR (INDEPENDENT) A graduate of economic and business science from Madrid s Complutense University, Mr. Solchaga has also completed post-graduate studies at the Alfred P. Sloan School at the Massachusetts Institute of Technology (MIT). In 90, he was elected member of the Spanish Parliament as deputy for the PSOE and was subsequently re-elected in 9, 9, 99 and 99, ultimately presiding the Socialist Party s Parliamentary Group in Other noteworthy appointments: member of the Basque regional government prior to approval of the Euskadi Autonomous Statute (99-0); president of the IMF s Interim Committee (99-99), Minister of Industry and Energy (9-9); and Minister of the Economy and Finance (9-99) in Spain. He is currently an international consultant and a president of the firm Solchaga & Recio Asociados. Other current appointments include: chairman of the Euroamerica Foundation; vice-chairman of the Royal Trust of the Reina Sofía art museum; president of the Arquitectura y Sociedad Foundation, chairman of the Advisory Board of the Roca Junyent law firm, member of the Scientific Board of the Elcano Royal Institute and member of the boards of Duro Felguera and Pharma Mar, S.A.

64 . GOVERNING BODIES Francisco José Riberas Mera DIRECTOR (PROPRIETARY) A law and business studies graduate from Universidad Pontificia de Comillas (ICADE) of Madrid. He began his career at Grupo Gonvarri in 99 in the controller area, a group where he later assumed the roles of director of corporate development and CEO. He was one of the backers behind the creation of Gestamp in 99, serving as this company s chief executive from the outset. In 99, he joined the board of Aceralia Corporación Siderúrgica, a position he held until this company was integrated within the Arcelor Group. Today he is co-chairman of Corporación Gestamp and sits on the boards of Gonvarri Industrial and other Gestamp group companies. He is also a member of the management board of the IEF (acronym in Spanish for the Family Business Institute) and sits on the Spanish council of the NGO, Endeavor. He is also a director of Global Dominion Access, S.A. Juan María Riberas Mera DIRECTOR (PROPRIETARY) A law and business studies graduate from Universidad Pontificia de Comillas (ICADE) of Madrid. He began his career at Grupo Gonvarri in 99 in the business development area, a group where he later assumed the role of CEO. In 00, he was one of the backers behind the creation of Gestamp Renewables, taking on the position of executive chairman in 00. Since 00 he has been serving as chairman of Gonvarri Steel Industries and co-chairman of Corporación Gestamp, the family-owned holding company. He is also a trustee of the Juan XXIII Foundation. Fermín del Rio Sanz de Acedo DIRECTOR (PROPRIETARY) Fermín del Rio Sanz de Acedo is a business administration graduate (San Sebastián). He began his career as tax advisor in 9 and is the founder of Norgestión (a consultancy specialised in mergers & acquisitions, tax law and finance). He provided services to this firm until 00. Mr. Fermín del Rio has also headed up ADEGI (the Guipuzcoa business association) and been a member of CONFEBASK, the Basque committee of business owner associations. Fermín del Rio has served as chairman of Autometal S.A. and is currently an executive director of CIE Automotive. He also sits on the boards of Fegemu S.A. and LM Machinery S.L. and Global Dominion Access, S.A. / / Shriprakash Shukla DIRECTOR (PROPRIETARY) A technology graduate from the Indian Institute of Technology at Banaras Hindu University, Mr. Shukla also holds an MBA from the Indian Institute of Management of Ahmedabad. He has built his career at multiple companies, including Dunlop India, Swisscom Essar (currently Vodafone Essar) and Reliance Infratel, where he served as executive chairman before joining the Mahindra group. He currently runs the latter group s Aerospace & Defence subsidiary, chairs Mahindra Sanyo Special Steels and sits on the Executive Committee of Mahindra & Mahindra. Previous posts at this group included director of strategy and of brand management.

65 . GOVERNING BODIES Vankipuram Parthasarathy DIRECTOR (PROPRIETARY) A commerce graduate from Gujarat University, Mr. Parthasarathy also holds an AMP from Harvard Business School. He began his career at Xerox, where he reached the position of associate director. In 000, he joined the Mahindra group, where he held various executive positions. He is currently the CFO and CTO of Mahindra & Mahindra as well as sitting on the group s Executive Committee and on the boards of subsidiaries. Francisco López Peña DIRECTOR (PROPRIETARY) A road, canal and port engineering graduate from Barcelona Polytechnic University, Mr. López also holds an MBA from IESE in Barcelona. He performed general management functions in mining sector companies between 9 and 990 and in the textile-retailing sector between 990 and 99. He joined Gestamp in 99 as director of corporate development. In 00, he took up the position of vicechairman and CFO of the Gestamp group. He has been a member of Gestamp s board of directors since 00. María Teresa Salegui Arbizu DIRECTOR (PROPRIETARY) A graduate of economic and business science from Deusto University. Ms. Salegui began her career at the transport firm La Guipuzcoana (9-00), where she worked as general manager, a position she also held at DHL Express Iberia (00-00). She is currently the chairwoman of Addvalia Capital and Perth Espacio y Orden, as well as sitting on the boards of several companies, including One Facility Management, Baztango and Sinergia Advisors. Jacobo Llanza Figueroa DIRECTOR (PROPRIETARY) A graduate of economic and business science from the University of Paris. Jacobo built his career in investment banking, starting out in 99 in a number of positions at Banque Indosuez and Bancapital, before going on to create and run AB Asesores Moneda in 99, an AB Asesores group company. Following the sale of this firm to Morgan Stanley in 999, he joined Dresdner Kleinwort Wasserstein, where he worked as managing director of equities & derivatives for Latam, Eastern Europe, Africa and the Middle East. In 00, he joined Alantra (formerly N+), where he is currently a Managing Partner, as well as CEO of Alantra Asset Management. He also sits on the board of Tubos Reunidos. / /

66 . GOVERNING BODIES.. Management Board The Management Board directly oversees management of the Business Units and coordination with the Corporate Areas with authority across the entire CIE Group and the Group s Network Services. The defined Corporate Areas are the Internal Audit, Compliance and CSR, Control, Finance, M&A, IR and R&D Areas. The purpose of the Network Services is to support the Business Units and ensure the application of standard policies across the entire Group. These Services are coordinated directly by the CEO and are IR, IT Services, Sales, Quality, Purchasing and Process Engineering. The Management Board meets quarterly and is made up of the heads of the various Business Units and Corporate Areas. The heads of the Network Services participate in the Management Board meetings twice yearly... Remuneration policy Director remuneration seeks to reward the levels of commitment and responsibility assumed by the members of the Board of Directors with respect to the Company and is determined on the basis of the duties and dedication intrinsic to the positions each director holds. / / Director remuneration consists of a fixed annual sum paid in cash to all members of the board. In addition, certain members may also receive a bonus, in cash, tied to objective indicators related with individual director target delivery as well as the Company s performance. They also receive meeting attendance fees, which include insurance cover. Article of the Board Regulations empowers the Appointments and Remuneration Committee to make proposals regarding director remuneration. In the course of, the members of the Board of Directors as a whole received. million, in cash, to remunerate them for their services, up % from 0. For further information on director remuneration, go to page of the Annual Report on Director Remuneration. Only.9% of the votes cast at the 00 Annual General Meeting were cast against the 0 Annual Report on Director Remuneration.

67 . Corporate Social Responsibility management The Board of Directors established and approved the Company s Corporate Social Responsibility Policy in 0. This Policy sets down the basic principles and general framework for integrating CSR criteria into the business model and strategy with the aim of creating value for all stakeholders and society at large (go to CIE and Corporate Social Responsibility). CIE Automotive s commitment to responsible management has been reinforced by a host of internal policies related with its corporate social responsibility effort, all of which have been approved at the Board level. In addition, CIE Automotive has voluntarily signed the United Nations Global Compact, thereby undertaking to defend basic human and labour rights, promote environmental / / conservation and fight corruption and fraud. In order to report on its progress on the CSR front, in, the Company prepared a detailed table (annexed) itemising its compliance with the GRI G indicators and Sustainable Development Goals (SDGs). Oversight of CIE Automotive s CSR & Sustainability Policy is vested in its Corporate Social Responsibility Committee, which has in turn delegated the duty of monitoring application of these principles in the Cross-Group CSR & Sustainability Committee. The latter committee is made up of nine professionals from a range of areas. MEMBERS OF THE CROSS-GROUP CSR & SUSTAINABILITY COMMITTEE MEMBER Javier Álvarez Lorea Aristizabal Yago Barandiaran Gonzalo Ceberio Iker Hernández Angel Zalduegui Susana Molinuevo Irache Pardo Mikel Orbegozo Effective application of the CSR & Sustainability Policy and the potential risks associated with it are framed by CIE Automotive s Risk Management and Control Policy, which uses the ISO 000 methodology (the risk management methodology generally accepted in the marketplace). (Go to section. Sustainable supply chain management). The Company has established Group-wide CSR controls to measure its performance in various ESG areas - Procurements (Supply Chain), HR (Labour Regulations and Human Rights), Environmental Management (Quality) and Community Work - by means of surveys conducted using the SAP Process Control tool. The results of these surveys are provided from section. onwards. PRIZES AND AWARDS AREA Human Resources Business Development Dominion Quality & Environmental Management Internal Control and Risk Management Internal Audit CSR & Compliance Procurements Sales CIE Automotive was awarded a prize by the San Prudencio Foundation in the Social Responsibility Initiative category for its commitment to Basque society by creating jobs and wealth. In addition, its good work on the CSR front earned CIE s Moroccan factory a prize from Renault in this category as part of its Supplier Awards for.

68 . Business ethics CIE Automotive s everyday activities are governed by internal rules (go to section.) that are in turn inspired by the organisation s values and designed to ensure ethical conduct. Most notable among these rules is the Code of Conduct. To ensure it and prevailing legislation are upheld, CIE Automotive has a stakeholder whistle-blowing channel. CODE OF CONDUCT On December 0, CIE Automotive s Board of Directors approved a new Code of Conduct, which is binding upon all members of the Group and serves to guide the actions of the directors, executives and employees of all of its companies. Failure to comply with it is penalised. CIE AUTOMOTIVE S RULES OF CONDUCT Lawfulness Transparency, integrity and confidentiality with respect to information Compliance with tax obligations and the proper use of public funds Correct engagement with the various stakeholders Protection of workplace health and safety Repudiation of any form of corrupt or fraudulent behaviour Loyalty and transparency in the event of conflicts of interest Respect for intellectual and industrial property rights Protection of industrial rights / /

69 . BUSINESS ETHICS The Group conducted the following activities in to publicise the Code of Conduct: Joint distribution by the HR and Compliance Departments to ensure it reached all employees Publication in CIE Automotive s in-house newsletter. Publication on the corporate website in all the languages of the countries in which CIE Automotive has manufacturing facilities. By means of its Community Work survey, management ascertained its reach and penetration at the individual level at each manufacturing facility. The Corporate Social Responsibility Committee, which reports to the Board of Directors, is responsible for supervising due compliance with the Code of Conduct and formulating emanating policies. This Committee in turn delegates the task of overseeing compliance with the law in all of the Group s operating markets and with the body of ethics rules created by CIE Automotive in the Compliance Department. WHISTLE-BLOWING CHANNEL The company has a whistle-blowing channel which any person within the organisation can use to make enquiries with respect to the Code of Conduct or report any perceived breaches thereof. The information reported via this channel is handled confidentially and the rules governing how it is operated are available for consultation on the Group s corporate website. The mechanisms in place for availing of this channel are: Dedicated inbox: whistleblowerchannel@cieautomotive.com Postal correspondence addressed to the Compliance Department: Alameda Mazarredo 9, º. C.P. 009 Bilbao (Vizcaya), España. Information and communication channel In, CIE Automotive received four complaints through this channel. In all instances, the opportune actions have been taken to analyse and monitor the cases. / 9 /

70 . Regulatory framework Pursuant to article 9 ter. of Spain s Corporate Enterprises Act, the Board of Directors is responsible for approving and overseeing certain policies. This responsibility cannot be delegated. It is further obliged to establish a reporting and supervision model to ensure enforcement of these policies. In order to comply with this legislative requirement and reinforce CIE Automotive s body of rules and regulations, the following policies were approved in 0: SUSTAINABILITY-DRIVEN POLICIES Embracing the guidelines issued by Spain s securities market regulator, the CNMV, in December 0, CIE Automotive formulated a dedicated CSR Policy which has given rise to a series of policies designed to set the foundations for relations with its various stakeholders. SUSTAINABILITY-DRIVEN POLICIES CSR Policy Principles and Rights at Work and the This policy establishes the basic principles Tripartite declaration of principles and general framework governing the concerning multinational enterprises and management of CSR practices and serves social policy. as the basis for integrating these issues into CIE Automotive s management model Community Work Policy and business strategy, thereby creating This policy regulates CIE Automotive s sustainable value for all stakeholders and actions in the community work arena, the Company itself. underpinned by the premise that the Group is duty-bound to contribute Purchasing Policy solutions to the difficulties existing in its This policy is designed to guide all operating communities. procurement professionals with the ultimate aim of building a solid base of Suppliers Social Responsibility suppliers and partners, while enabling all Declaration Group companies to purchase goods and This establishes binding criteria for CIE services on the best possible terms. Automotive s suppliers in relation to universally-recognised social and labour Anti-Corruption and Anti-Fraud Policy rights and ethical business conduct. This policy is centred on combating corruption in all its forms by establishing Health, Safety, Environmental and the principles for guiding the conduct of Quality (HSEQ) Policy the persons comprising the group. This policy summarises the principles established in the Group s management Human Rights Policy model. This policy formally sets down the Company s human rights pledge, underpinned by the International Labour Organisation s Declaration of Fundamental / 0 /

71 . REGULATORY FRAMEWORK POLICIES Corporate Tax Policy: the overriding objective of this policy is to ensure compliance with applicable tax regulations in all the territories in which it operates. This fundamental objective - that of ensuring tax compliance - also fits with the broader objectives of upholding the Company s interests and generating value for shareholders on a sustained basis by avoiding tax risks and inefficiencies in the business decision-making process. Shareholder and Market Information and Communication Policy: this policy sets down the specific strategic objective of paying unwavering attention to the transparency of the information provided to and dealings with shareholders and the market in general, as governed generically in company law and the Company s Corporate Governance Policy. Risk Management and Control Policy: the aim of which is to establish the general framework for action in managing and controlling the risks which CIE Automotive needs to manage efficiently and effectively, as well as stipulating the related procedures and assigning roles and responsibilities. Internal Control over Financial Reporting (ICFR) Policy. This policy focuses on: o Defining the ICFR policy framework. o Defining ICFR roles and responsibilities. o Laying the foundations so that the ICFR system can be readily adapted for changes that could occur within the organisation, in the regulatory environment and/or in the area of best practices. o Determining the methodology to be followed to execute the ICFR system. CIE Automotive s General Secretary is tasked with managing a Control and Oversight Body which is in turn in charge of ensuring compliance with the provisions laid down regarding securities market dealings; this supervisory body reports to the Audit and Compliance Committee. The Group did not register any incident in this arena in. Corporate Governance Policy: focused on delivery, improvement and continuous revision of CIE s governance rules. It also enshrines the strategic belief that corporate governance principles and practices are key to earning investor confidence, increasing economic efficiency and delivering growth. INTERNAL CODE OF CONDUCT IN THE FIELD OF STOCK MARKETS In its capacity as a listed company, CIE Automotive also has an Internal Securities Market Code of Conduct which establishes how to deal with inside information, price-sensitive information and conflicts of interest. / /

72 . Risk management The CIE Automotive Group is exposed to a series of risks (strategic, operational, financial/reporting, compliance and corporate social responsibility) that are intrinsic to its business and the markets and countries in which it pursues it. To mitigate them it has an enterprise risk management (ERM) system, underpinned by ISO 000 methodology, which is fine-tuned year after year to adapt it to the Company s needs. In, the Company continued to work on its Enterprise Risk Management project in order to enhance risk indicators and controls, process automation and fraud detection. None of the key risks identified materialised during the reporting period. BOARD RESPONSIBILITIES AND INVOLVEMENT The Board of Directors is ultimately responsible to the Company s shareholders for the existence and effectiveness of the ERM model and its supervision via the activities performed by the Audit and Compliance Committee. Moreover, the Board of Directors is ultimately responsible for the Risk Management and Control Policy. RISK MAP With the aim of continuing to improve the current risk management system, as it has been doing in recent years, in, the Group continued to review and fine-tune its risk map, improving detection and mitigation of existing risks and introducing new risk factors identified in the course of formulating the -00 Business Plan and expanding the number of people surveyed within the organisation to this end. The Compliance Department is tasked with coordinating the various professionals comprising the senior management team, corporate management and the executive teams in Europe, India, Brazil, Mexico and at Dominion in order to revise and improve the questionnaire used to assess potential risks based on their preliminary assessment of the potential and potential impact. The risks so identified are classified into a number of categories - strategic, operational, financial/ reporting, compliance and CSR - and tally in total. The probability of occurrence, which is rated on a scale, depends on a risk s occurrence in the past or expected materialisation in the future, while the impact, similarly rated on a scale, is calculated based on three dimensions: financial (statement of profit or loss), reputational and organisational impact. It is important to stress that these risks are assessed on a residual basis, i.e., taking into account the internal controls already in place at the organisation in order to eliminate or at least mitigate them. Factoring in the time horizon addressed by the -00 Business Plan, the outcome of the risk assessment exercise undertaken in indicates that the risk map is aligned with the Company s strategy and that the internal control system is effective in the operating arena. The assessment gave rise to three major categories of risks, itemised below, along with an explanation of the action plans and corrective measures applied. Note, however, that none of the key risk factors identified materialised in.. RISKS WITH A MEDIUM PROBABILITY OF OCCURRENCE AND SIGNIFICANT POTENTIAL IMPACT: As in prior years, the key strategic risks relate to the need for a succession plan for key management personnel and the availability of skilled professionals for tackling the Group s international expansion and growth. This is a crucial consideration and is directly related to the Company s strategy; it has been heightened by the full consolidation of businesses in new markets such as India and Germany, as well as the significant growth sustained in NAFTA thanks to the launch of strategic products and new greenfield factories. / /

73 . RISK MANAGEMENT The organisation believes it is necessary to increase the number of professionals raised in the CIE culture who can support the Company s ongoing growth. This gives rise to the strategic risk associated with the current training and internal promotion strategy. Although CIE has been working in recent years on identifying its stock of high-potential professionals with a view to ensuring generational renewal and ongoing business development and on a plan for hiring professionals with a range of backgrounds, the combination of these risk factors gives rise to the strategic risk associated with managing the integration of newly-acquired companies. A great effort is needed to ingrain the business model into the newly-acquired companies and/or markets, while the current pace of organisational growth indicates the need for a new approach within the current management model. Against the backdrop of the current Business Plan and aware of the organisation s sharp growth and the above-mentioned attendant risks, it is more important than ever to ensure compliance with CIE Automotive s Code of Conduct by all employees. This Code s guiding principles state that no member of the organisation is authorised to breach its rules or provisions, even in response to an order received from a more senior-ranking professional. On this point it is worth highlighting the significant effort made to distribute and foster familiarity with the new Code approved in December 0 over the course of last year. The Code was published not only on the corporate website but was delivered to every member of the organisation, as outlined in section. of this report (Business ethics). Elsewhere, and in line with the prior year s risk map, management of tax risk remains a priority. In light of publication of the OECD s -point Action Plan on Base Erosion and Profit Shifting (BEPS) and the target enshrined in the -00 Business Plan regarding increased tax reporting transparency at the Group, the Board of Directors approved the Company s corporate tax policy in 0 and its tax strategy in, the overriding objective of which is to ensure compliance with applicable tax regulations in all the territories in which it operates. This fundamental objective - that of ensuring tax compliance - also fits with the broader objectives of upholding the Company s interests and generating value for shareholders on a sustained basis by avoiding tax risks and inefficiencies in the business decision-making process. Under the umbrella of its CSR framework, the Company promotes responsible tax practices taking into consideration the interests and sustainable economic development of the communities it operates in, overseeing due application of best tax practices. As outlined in section E. of its Annual Corporate Governance Report, responsibility for management of this risk falls to the Audit and Compliance Committee, among others, with the specific assistance of the Compliance Department in supervising effective implementation. Lastly, a new development this year is the advent of IT system risks as a key operational risk. A security failure in the IT systems would have immediate repercussions for the entire firm and affect its ability to function business as usual. The advance towards the fourth industrial revolution, marked by smart factories, interconnected systems along the productive process, additive manufacturing, collaborative robots and smart products (factory.0) appears unstoppable. This change is being shaped by customers who are increasingly demanding personalised products with immediate response times. In this sense, the Automotive unit is complemented by Smart Innovation, which positions it ideally for pioneering in these arenas and translating the changes afoot into a competitive advantage. / /

74 . RISK MANAGEMENT. RISKS WITH A MEDIUM PROBABILITY OF OCCURRENCE AND LOW POTENTIAL IMPACT: Today, CIE Automotive is operating in global context in which changes in a given country s legislation can lead to financial loss via the activities it performs in that territory. Some good examples are the protectionist and tax policies that affect imports in certain countries, fluctuations in local currency exchange rates relative to the main international currencies and the advent of bans on using diesel-run cars in large city centres. The existence of local partners in Asia, coupled with the experience gained in other geographies and management proximity, minimise the probability of occurrence of this risk factor. Elsewhere, market trends, such as the growing adoption of electric vehicles, pose another source of potential risk. Against this backdrop, the Group s ability to adapt to market trends and/or customer demands is key. In this respect, the Company is analysing the technology it needs to apply in response to each key trend, including the associated need to make vehicles lighter, and is taking the measures needed in each geography in which it operates. CIE Automotive s long-term relationships with its customers and its credibility in their eyes enable it mitigate the risk of not being able to pass on the additional costs implied by these changes, which affect both parties. As it arranges multi-year supply agreements, substantial increases in costs that would have a material impact on the Company s results are discussed and negotiated with its customers, who are in turn tied to the Company by the tooling investments made upfront for each project. The CIE Automotive Group s presence in international markets obliges it to articulate an exchange rate risk management policy with the overriding objective of reducing the adverse impact on its activities in general and on its statement of profit or loss in particular of the variation in exchange rates so that it is possible to hedge against adverse movements and, if appropriate, leverage favourable trends. To this end it uses a series of instruments including the forward sale-purchase of currencies; denomination of borrowings in local currencies if the debt markets are sufficiently deep, or in a strong currency such as the dollar, insofar as dollar correlation to the local currency is significantly higher than that of the euro; hedges of net investments in foreign operations (by denominating borrowings in the currency of the country in which the company has operations insofar as these operations assets are similarly denominated in that foreign currency, giving rise to currency translation risk). The Group monitors the effects of exchange rate movements monthly (as a whole and for each of the currencies to which its operations expose it) on its statement of profit or loss, on the companies operations and on each of the key headings of its consolidated balance sheet, including the net impact on equity. This exposure is reported to the Executive Committee and the Board of Directors. Lastly, in light of the existing management model, the growth in the Group s various businesses and markets could give rise to the risk of a concentration of responsibility and decision-making power in a reduced number of professionals who could ultimately prove impediments to the correct management of those businesses and/or geographies. However, by leveraging Group synergies, action is being taken to mitigate this risk factor, which as a result ranked as less significant in compared to the prior year assessment. / /

75 . RISK MANAGEMENT. RISKS WITH A LOW PROBABILITY OF OCCURRENCE AND LOW POTENTIAL IMPACT: In recent years, risks related to the Group s corporate social responsibility effort have become increasingly important to it, particularly compliance with the United Nations Global Compact, of which CIE Automotive became a signatory in October 0, obliging it to uphold human and labour rights, promote environmental conservation and fight corruption and fraud. Approval of the Corporate Social Responsibility Policy in December 0 and the mainstreaming of CSR targets within the current Business Plan evidence how the Company is taking stock of these risks. The related initiatives are reflected in the 0-0 CSR Strategic Plan. INTERNAL CONTROL SYSTEMS CIE Automotive s internal control system is based on three lines of defence: SOCIAL RESPONSIBILITY COMMITTEE BOARD OF DIRECTORS AUDIT AND COMPLIANCE COMMITTEE COMPLIANCE DEPARTMENT ª LINE OF DEFENCE ª LINE OF DEFENCE ª LINE OF DEFENCE OPERATING MANAGEMENT RISK MANAGEMENT INTERNAL CONTROL (IFRS, ETC.) COMPLIANCE ((REGULATIONS AND POLICIES) AND CSR INTERNAL AUDIT FUNCTION / /

76 . RISK MANAGEMENT º LINE OF DEFENCE Operating management: Senior management and the executive teams are responsible for assessing, controlling and mitigating risks and implementing effective controls. º LINE OF DEFENCE Internal control, risk management and compliance functions: mandated to the Compliance Department, these risk owners facilitate and supervise implementation of internal control and risk management practices by the operating management teams. Below is a list of the Company s key processes, including those related to period-end closings, for which risk matrices and controls have been defined: CSR-related initiatives are also coordinated at this level. Supervision and compilation of the required information is performed using the Process Control module of the Group s SAP GRC tool. º LINE OF DEFENCE Internal audit: this function provides the governing bodies with assurance regarding the effectiveness of the internal control and risk management systems and the manner in which the first and second lines of defence are functioning. The internal audit function reports to the Compliance Department. Audit coordination and compilation is performed using the Audit Management module of the Group s SAP GRC tool. centralise the entire internal control system within the new SAP GRC tool, which began to operate in January 0. This tool comes with several modules which enable end-to-end management of the control and compliance processes under the various regulatory frameworks (Process Control), risk management based on benchmarking models (Risk Management), coordination of an annual Audit Plan encompassing all divisions and regions (Audit Management) and the early detection of fraud (Fraud Management). Thanks to this new project, CIE Automotive will be in a position to supervise approximately 0 controls per automotive plant, expanding its scope of application to all of the Group s productive facilities, which number over 0.. Period-end closings, consolidation and reporting. Property, plant and equipment. Financial assets and liabilities. Inventories. Revenue Trade receivables. Cash. Provisions. Costs of goods sold Trade payables 9. Human Resources 0. Tax At year-end, of CIE s European facilities had the IT tool needed to comply with the risk mitigation controls (the GRC Suite). This software permits analysis of the level of performance of the controls conducted at the plant level and tracks incidents and any resulting action plans. It is worth highlighting the work performed in, with assistance from consultants at EY, on a global coordination and information compilation project in order to switch the current software and / /

77 . RISK MANAGEMENT CRIMINAL RISK PREVENTION MODEL In, the Group concluded the project carried out with the assistance of Deloitte for the implementation of a criminal risk prevention model. This project comprises three phases: Phase : Preliminary identification of the criminal risk factors. Nineteen criminal risks intrinsic to CIE Automotive s everyday activities were identified and analysed. Phase : Identification of the existing controls over the various processes, detecting weaknesses for criminal risk prevention purposes. It was determined that the internal control system put in place by CIE Automotive (with around 0 existing controls), working correctly, is sufficient to reasonably mitigate some of the criminal risks identified. Phase : Proposed actions for delivering a sufficient level of control and drafting of the crime prevention protocol. To assess the importance and vulnerability of each of the criminal risks to which CIE Automotive is exposed, the following variables were considered: a) Importance: each criminal risk was evaluated as function of its impact and probability. b) Vulnerability: for each criminal risk, as a function of the existence of controls or otherwise, the sufficiency of the controls and the existence of historical events related with each risk were assessed. As a result of the project, an action plan has been put together to improve the criminal risk control environment and two Criminal Risk Prevention Manuals have been drafted, one for publication on the corporate website and one for internal distribution. This plan will be supervised availing of the SAP GRC Suite. Moreover, the Group has set up a Support Unit with independent intervention and control powers within the organisation, whose mandate is to oversee compliance with the corporate Criminal Risk Prevention Model. IMPROVING INDICATORS As established in its Business Plan, CIE Automotive is working to specify risk identifiers. These indicators not only address financial reporting (ICFR) risks but also compliance risks related to criminal, tax and other legislation, strategic risks and CSR risks. Supervision and control of these indicators is performed using the Risk Management module of the Group s SAP GRC tool. / /

78 in review. Earnings performance.. Milestones.. Earnings performance.. Financial position. Shareholder value creation.. Share price performance.. Shareholder remuneration.. Shareholder and investor engagement.. Ownership structure. Customer orientation.. Innovation and technology.. Quality control.. Customer satisfaction.. External acknowledgement. Human resources.. Automotive business... Human rights policy... Professional profile... General lines of initiative... Career development. Workplace health and safety.. Sustainable supply chain management.. Performance in.. Purchasing policy.. Supplier quality and service reliability.. Supply chain, social and environmental considerations. Environmental management.. Achievements of.. Consumption of water and material resources.. Energy efficiency and emissions.. Waste management, reuse and recycling.. Eco-design applied to the automotive sector. Community.. Value generated and distributed.. Community engagement.. Community work

79 . EARNINGS PERFORMANCE. Earnings performance CIE Automotive posted earnings growth of.% in, with net profit reaching. million. Its results topped the guidance enshrined in the -00 Business Plan. The year will be remembered for the Dominion IPO and reinvigorated M&Aled growth after a year of consolidation in 0. MILESTONES IN JANUARY APRIL MAY JUNE JULY AUGUST SEPTEMBER Payment of the interim dividend CIE Automotive paid out an interim dividend from 0 profits of 0. per share, implying an outlay of 0. million ( January). Dominion IPO to fund growth Dominion débuted on the stock market on April by means of a public offering of primary shares to qualified investors at. per share. -00 Business Plan Presentation of CIE Automotive s -00 Business Plan, undertaking to double net profit to over 0 million within five years time by means of organic growth. Dominion acquires the productive units of Abantia Dominion bid to acquire the productive units (installation, maintenance, industrial and renewable energy development) of the Abantia Group. CIE Automotive acquires the remaining shares of Century Plastics CIE Automotive acquired % of Century Plastics for 0. million, giving it outright ownership of this subsidiary. Dominion acquires Commonwealth Dynamics in the US Dominion acquired US firm Commonwealth Dynamics, devoted to the provision of engineering solutions and execution of industrial projects, for. million. Dominion acquired the business assets of Protisa from Abengoa in order to reinforce its coverings business. Distribution of the final dividend The Company paid out a final dividend of 0. per share ( July). Amaya Telleria Group integrated into CIE Automotive The Amaya Telleria Group was integrated into CIE Automotive following the purchase of all its shares and assumption of its debt, implying an investment of million. Dominion purchases assets from the Scorpio group Dominion bought the assets comprising Grupo Eléctrico Scorpio s energy project engineering, operations and maintenance business.. OCTOBER NOVEMBER Mahindra CIE se hace con la india Bill Forge Mahindra CIE acquires India s Bill Forge Mahindra CIE purchased all of the equity of Bill Forge, a leading player in the forging segment with manufacturing facilities in India and Mexico for million. ICC acquired by Dominion Dominion bought ICC, a leading specialist in the design, engineering, inspection and repair of industrial structures, servicing all areas of the United States. DECEMBER Approval of the interim dividend from profits The Company s Board of Directors resolved to pay an interim dividend against profits of 0.0 per share in January 0. / 9 /

80 . EARNINGS PERFORMANCE.. Earnings performance CIE Automotive reported earnings growth once again in, evidencing further the success of its business and geographic diversification positioning and M&A strategy, as well as its ability to outgrow the market organically. The Group recorded record net profit of. million, growth of.% from 0, driven by ongoing margin expansion across all its operating regions. EBITDA meanwhile rose by % year-on-year to 0. million, while EBIT amounted to 9. million, up %. The bottom-line growth of % barely reflects the contribution by newly-acquired companies as the net profit contributed by these businesses was offset by the borrowing costs incurred on the acquisition financing taken on. This considerable earnings growth meant that net profit accounted for.% of revenue, a record margin. Both the Automotive and the Smart Innovation businesses contributed to this healthy earnings momentum. The Automotive business is the biggest earnings contributor, accounting for.% of revenue and.% of EBITDA. The Smart Innovation platform shored up this earnings performance, contributing.% of Group revenue and.% of EBITDA. These results top the guidance provided in the -00 Business Plan and put the Company in a good position to double its 0 net profit within a four-year timeframe. EARNINGS PERFORMANCE 0 VAR.% Revenue,9.0,. 9.% EBITDA (*) 0...% EBITDA margin.%.9% EBIT (*) 9...% EBIT margin 9.% 9.% Profit for the year % Net profit (*). 9..% (*) EBITDA: earnings before interest, tax, depreciation and amortisation; EBIT: earnings before interest and tax; Net profit: profit attributable to owners of the parent. / 0 /

81 . EARNINGS PERFORMANCE A) AUTOMOTIVE was another good year in the Automotive business: revenue in this segment rose by.% to. billion, while EBITDA climbed.% to 0. million and EBIT registered growth of.% to. million. Profit growth outstripped topline growth due to the negative impact of exchange rate trends (-%) and the decline in raw material prices, which drove a % drop in sales prices. Throughout the year, the Automotive unit continued to consolidate its geographic and technological diversification strategy, executing several greenfield builds and acquiring strategic companies such as Amaya Telleria (Q) and Bill Forge (Q), which between them accounted for topline growth of.9%. It is also worth highlighting the fact that CIE Automotive registered purely organic growth from quarter to quarter and overall organic growth in of.%. AUTOMOTIVE EARNINGS PERFORMANCE ( million) 0 VAR.% Revenue,.,0. EBITDA (*) 0..9.% EBITDA margin.9%.% EBIT (*)...% EBIT margin 0.9% 0.% (*) EBITDA: earnings before interest, tax, depreciation and amortisation; EBIT: earnings before interest and tax. / /

82 . EARNINGS PERFORMANCE EARNINGS BY GEOGRAPHIC REGION GEOGRAPHIC CONTRIBUTION TO REVENUE AND EBITDA IN % 0% % 9% % % % % % % EUROPE EUROPE MAHINDRA NAFTA BRAZIL ASIA (INDIA/CHINA) EUROPE EUROPE MAHINDRA NAFTA BRAZIL ASIA (INDIA/CHINA) REVENUE MIX, % EBITDA MIX, % / /

83 . EARNINGS PERFORMANCE EUROPE In Europe, the Group s most important market, CIE Automotive s non-mahindra facilities continued to post excellent margins, recording EBITDA and EBIT margins of.% and.%, respectively. These margins are significantly above the market average and reflect operational excellence and the ability to cater to the recovery in business volumes. Both the aluminium and machining divisions recorded new all-time sales records and further entrenched improvements in their profitability. The improvement in the aluminium division was driven by excellent margins, despite low volumes at the Russian plant; this division is poised for market recovery. In the machining area the improvement primarily reflects the start of mass production of some of the many projects taken on in recent years which have required significant upfront investments; these projects will shore up growth at multiple Group plants. In addition, the integration of the Amaya Telleria Group in August brought significant new scale to this business and positions CIE Automotive as one of the leading players in this technology. Meanwhile, the European Mahindra plants are on their way to attaining the Group standards, having posted margin expansion in : an EBITDA margin of.% in compared to 0.% in 0; and an EBIT margin of.0% in, up from.%. Edmundo Fernández was named CEO of MFE on September. Mr. Fernández s mission is to spearhead consolidation of this company s recovery in the wake of the difficulties experienced last year, to which end he will focus on customer satisfaction and mediumto long-term profitability. NAFTA The market known as NAFTA (Mexico and the US) is the Group s most profitable: the EBITDA margin came in at.0% while the EBIT margin was.%, both of which up from 0. The Group s success in this region is attributable to demand momentum and the performance of its new greenfield factories. In Mexico, the Group consolidated the manufacture of certain forged products and is planning to begin to manufacture other new products. In machining, CIE Matic registered sharp sales growth thanks to both new projects and the integration of the Amaya Telleria Group into Celaya, a transaction expected to generate significant synergies. In stamping, the Group secured a new subassembly welding contract (on a just-intime basis) in Puebla, which will start up in 0, and one of the paintwork lines in Celaya was reconfigured. Lastly, the plastics division industrialised a project for exterior parts, while the aluminium injection moulding division continued to invest in equipment in order to execute the new projects won. In the US, after the significant growth registered in the last three years, was a year of stability and reflection on the new growth strategy for Century for the years to come. It was a very satisfactory year in the thermal shaping area, where new composite spray moulding technology was introduced which reduces the weight of the rear cargo load floor, improving the Company s market positioning and opening the door to new projects. / /

84 . EARNINGS PERFORMANCE ASIA In Asia, margins began to reap the benefits of integration of the Indian plants into CIE Automotive and of new projects in China. The EBITDA and EBIT margins widened to.% and.%, respectively. At Nanjing (China), despite the sharp downward pressure on prices exerted by local players, the work performed on the sales front and the ramp-up of existing projects in foreshadow considerable sales growth in 0. The Indian automotive market found its way back to growth in after three years of stagnation, driven by the improvement in the main macroeconomic indicators (accelerating GDP growth coupled with lower inflation and interest rates). In addition, the heavy rains during the monsoon season boosted car and tractor sales in rural areas, benefitting Mahindra & Mahindra Ltd. in particular. On the downside, the Indian government s decision in November to withdraw large-denomination notes from circulation to fight corruption and the black market ate into the savings of many citizens and prompted a contraction in consumption in the automotive market, most particularly in demand for motorcycles which slumped by over 0%. Although the expectation is that the market will normalise within a question of months, / / this development had a negative impact on Mahindra CIE s sales in the fourth quarter of and the first quarter of 0. On the M&A front, the acquisition of Bill Forge Private Ltd., which is headquartered in Bangalore, closed in October. This company manufactures forged (hot, warm and cold forging) and machined parts for cars and motorcycles. This acquisition reinforces CIE Automotive s customer, product and technology diversification strategy, while extending the Company s reach to the south of India where it did not yet have a manufacturing presence. Lastly, Ander Arenaza was appointed the new CEO of Mahindra CIE in September. Since his appointment, the new CEO has implemented a new organisational structure designed to reinforce Mahindra CIE s integration within CIE Automotive, while accelerating growth and driving margin expansion.

85 . EARNINGS PERFORMANCE BRAZIL In Brazil, the Group s margins expanded yearon-year despite the adverse market situation: this division s EBITDA margin was.% and its EBIT margin,.%. In addition, despite a market contraction of close to %, the EBITDA margin would have been in the double digits were it not for the impact of the most recent restructuring work. Processes stabilised at the plastic injection moulding plant, Pernambuco, started up in 0, paving the way for continued growth and the introduction of new parts. In forging, despite the market contraction, the Company s sales continued grow thanks to entry into the transmission segment and the addition of new technology, namely cross wedge rolling. It is also worth highlighting the entry into the aluminium market in Brazil thanks to both the Amaya Telleria acquisition and the procurement of global projects in the engine and transmission segments. The Company is investing significantly in this technology and in machining in order to drive continued growth and consolidate its position as a key partner in the coming years. In plastics, the Group launched a new paintwork line in Diadema and increased the speed of its chroming line. REINVIGORATED M&A ACTIVITY The Group stepped up its acquisition strategy in, having concentrated on integrating the organisation derived from the alliance with Mahindra in 0. In the Automotive business, three transactions contributed to the Group s earnings growth: Acquisition of the Amaya Telleria Group. In May, CIE Automotive and Amaya Telleria agreed the acquisition of all of the latter s shares by the former, which was effective in August. The transaction entailed an investment of million, including the cost of the shares purchased and the debt assumed. Founded in 9, Amaya Tellería is a family-owned industrial group headquartered in Ermua (Vizcaya) and with a manufacturing presence via various subsidiaries in Spain (the Basque region and Galicia), Slovakia, Mexico and Brazil. It makes parts using machining and aluminium injection moulding technology. Its most important products are chassis, transmission and engine parts. This company also brings OEM customers. Acquisition of Bill Forge Private Limited (BFPL) by Mahindra CIE. CIE Automotive s Indian subsidiary purchased all of the shares of this group based in Bangalore, India, with manufacturing facilities in Bangalore, Coimbatore and Haridwar, as well as a plant under construction in Celaya, Mexico. BFPL is a key supplier locally and globally to several OEMs and Tier suppliers. It manufactures components and subassemblies for the automotive sector (for two- and four-wheeled vehicles) using hot and cold forging and machining technology. This transaction expands Mahindra CIE s operations in the burgeoning Asian market and reinforces the Group s position as a global force in the forging segment. In addition, Bill Forge s product and customer bases further diversify Mahindra CIE s portfolios in India. Acquisition of Newcor in the US. In February 0, CIE Automotive closed the acquisition of Newcor, a firm based in Michigan (US) that is specialised in the design and production of high-precision machined parts and subassemblies, powertrains and transmissions. This transaction reinforces CIE Automotive s position in the NAFTA region, particularly the US, while helping to consolidate its relationship with strategic customers. / /

86 . EARNINGS PERFORMANCE B) SMART INNOVATION Dominion, CIE Automotive s Smart Innovation subsidiary, posted earnings growth of % in to. million. EBITDA amounted to. million (+.%). Both the Solutions and Services areas contributed to this earnings growth. Of total revenue, 0. million was accounted for by solutions sales and. million by services rendered. For more information, go to Dominion s Annual Report. DOMINION S EARNINGS PERFORMANCE ( million) 0 VAR.% Revenue..0.% EBITDA...% EBITDA margin.%.9% EBIT. 9..% EBIT margin.%.% / /

87 . EARNINGS PERFORMANCE.. Financial situation CIE Automotive had total assets of. billion at year-end, up. million from year-end 0. Fixed assets stood at. billion, while net working capital was a negative.9 million. Equity increased by % year-on-year to. billion, while net debt rose by % to. million. The continued improvement in the returns obtained on the Group s assets drove the RONA to %, well on its way to the target of over 0%. Maintenance capital expenditure accounted for 90% of depreciation charges, bringing the Group closer to its target of reducing these charges from % of revenue to %. Operating cash flow, measured as EBITDA less tax and interest paid and maintenance capital expenditure, exceeded 0% of EBITDA, locking in funding for future growth. BALANCE SHEET AT YEAR-END ( million) 0 0 Fixed assets,0.,9.,9. Net working capital (.9) (.) (.) TOTAL NET ASSETS,.,0.,. Equity,..0. Net debt (*) Other (net). 9.. TOTAL EQUITY AND LIABILITIES,.,0.,. (*) Net debt: bank and other borrowings less cash and cash equivalents.,. TOTAL NET ASSETS,0.,. / / 0 0

88 . EARNINGS PERFORMANCE DEBT STRUCTURE At year-end, the Group had drawn down bank facilities in the amount of million (year-end 0: million). The total limit on these facilities was 0 million ( 9 million at year-end 0), implying million of undrawn floatingrate credit facilities ( million at year-end 0). In the course of, CIE Automotive repaid million of credit facilities and obtained million of new credit. The repayments largely reflect a debt refinancing effort designed to extend and enhance the Group s debt maturity profile. It is worth highlighting the execution, on July, of a second amendment to the syndicated loan agreement entered into in 0, increasing the principal to 00 million and extending the maturity date until 0. This syndicated loan was arranged with six financial institutions in an original amount of 0 million; it was amended for the first time in 0. Also on July, the Group arranged an million 0-year financing facility with several banks. Through its US subsidiary, CIE Automotive USA Investments, the Group arranged two $ million floating-rate loans (benchmarked to LIBOR) on May. The balance outstanding under these loans stood at. million at year-end. In the Smart Innovation platform, Dominion completed its financial reorganisation with the arrangement of a 0 million syndicated loan and a million loan from the European Investment Bank. The other balances included within borrowings correspond to bank loans and credit facilities distributed among the Group s various companies. They carry market rates of interest and do not entail any specific additional guarantees. Factoring facilities amounted to million at year-end. At year-end, % of the Group s debt was denominated in euros and the remaining % was denominated in US dollars. / /

89 . EARNINGS PERFORMANCE DEBT STRUCTURE Syndicated loan AMOUNT MATURITY CHARACTERISTICS 00 million -year bullet payment Denominated in euros Rate grid tied to ND / EBITDA Partial fixed-rate swap EIB 0 million years with a -year grace period Long-term financing Denominated in euros Partial fixed-rate swap million 0 years Denominated in euros Arranged with two financial institutions Bancomext million years with a -year grace period Denominated in US dollars Partial fixed-rate swap Other 0 million Sundry Borrowings comprising bilateral loans (mainly local), credit facilities, working capital lines, etc. Cash and cash equivalents. billion 0 million million Gross debt Ned debt (ND). Shareholder value creation An investment in CIE Automotive is a profitable one. In, the dividend payout was % (. million) and CIE Automotive s shares gained 9.% on the stock market. In a year marked by the Dominion IPO, the market applauded delivery of the Group s guidance quarter after quarter, the robust growth forecasts announced through to 00 and the efforts made to communicate these milestones to the investment community. The Company s shares were included in the IBEX Medium Cap index in June... Share price performance CIE Automotive s shares rallied by 9.% to end the year at., implying a market capitalisation of.9 billion. This excellent performance means the Company s shares significantly outperformed the Ibex- blue chip index and the Ibex Medium Cap index, in which CIE Automotive has been traded since 9 June. The Ibex Medium Cap index includes the Spanish market s 0 most representative mid-cap stocks. / 9 /

90 . SHAREHOLDER VALUE CREATION CIE AUTOMOTIVE S SHARE PRICE PERFORMANCE IN (Source: Bolsa de Madrid) By volume, some 9,0 thousand shares were traded in, 99.9 million by value, up.% from 0 (trading volume of. million). (Source: Bolsa de Madrid) The shares hit a high for the year on October (.9) following presentation of the prior quarter s results, and a low on February (.9), when fears over growth in China and uncertainty regarding the impact of the oil price correction exerted downward pressure on stock markets around the world. (Source: Bolsa de Madrid) 0.00% 0.00% -0.00% 0/0/ 0// CIE Automotive IBEX IBEX Medium From that juncture on, the Company s shareholders began to discern the strength of its quarterly earnings, the astuteness of its geographic and business diversification and its ability to integrate newly acquired companies, as was evident in the market s reaction to the Amaya Telleria and Bill Forge deals, as well as the acquisitions closed by Dominion. CIE Automotive s credibility was particularly evident in the market s response to the -00 Business Plan, applauding both the targets and the transparency effort. SHARE PRICE INFORMATION 0 Number of shares at year-end 9,000,000 9,000,000 Share price at year-end ( ).. High for the year..9 Low for the year 0..9 Market capitalisation at year-end ( million),99.,. Trading volume ( 000 shares) 0,9 9,0 Dividends paid ( million).. Dividend per share paid ( ) Pay out * (%) % % Earnings per share ( ).00. P/E multiple **.. / 90 / (*) Pay out: percentage of profit paid out to shareholders. (**) P/E multiple: ratio between share price and EPS.

91 . SHAREHOLDER VALUE CREATION DOMINION IPO TO FUND GROWTH MAHINDRA-CIE S SHARE PRICE PERFORMANCE The shares of Mahindra-CIE are traded on India s main stock exchanges: the National Stock Exchange (NSE) (index: CNX Nifty 0) and the Bombay Stock Exchange (BSE) (index: S&P BSE Sensex). In,,9, shares were traded (volume by value: INR9. billion); the share price hit a high of INR. during the year. The share price corrected by.% in, compared to gains of % in the CNX Nifty 0 and of.9% in the S&P BSE Sensex. The share price was hurt by the market uncertainty triggered by a series of global events, such as the referendum in favour of Brexit and the election of Donald Trump as president of the United States, compounded by the unprecedented demonetisation measures announced by the Indian government. However, the main brokerages reiterated their buy recommendations on the stock and target prices throughout the year. Dominion completed its IPO on April, offering its shares to institutional investors at a price of. apiece. The company sold,, shares, representing a.% interest (post-ipo) in the offering, including the shares sold when the underwriters partially exercised their greenshoe option over shares representing % of the offering. The rationale for the IPO, as set down in the company s business plan, was to raise money to fund its ongoing growth and reinforce its capital structure. The transaction was a resounding success: a total of institutional investors bought shares in the offering. Dominion raised million. / 9 /

92 . SHAREHOLDER VALUE CREATION... Shareholder remuneration CIE Automotive paid out. million of dividends from 0 profits, up % year-on-year. The Company s policy is to pay out one-third of net profits. The distribution was made in two payments: an interim dividend charged against estimated 0 profits of 0. per share (before withholdings) on January and a final dividend of 0. per share paid out on July, following shareholder approval at the April Annual General Meeting. That sum implied a payout of % with respect to 0 earnings. In December, the Board of Directors approved the payment of an interim dividend from profit of 0.0 per share. This dividend was paid out on January. RECORD SHAREHOLDER RETURN The Group reported earnings per share of. in, year-on-year growth of %. The growth strategy pursued in recent years, the Group s business and geographic diversification and delivery of its guidance year after year have driven the share price % higher since 0. / 9 /

93 . SHAREHOLDER VALUE CREATION.. Shareholder and investor engagement As required in Spain s Corporate Enterprises Act, CIE Automotive frames its communication with the investment community with the principle of transparency. It maintains an open communication channel via its corporate website, www. cieautomotive.com. In the Investors and Shareholders tab it publishes information of relevance about the Group: presentations, financial indicators, legally-stipulated documents, corporate governance rules, share price performance and, more generally, all developments of interest, including details about how to contact the Company: inbox: ir@cieautomotive.com Telephone number: Fax number: The Investor Relations Department briefs the financial community on the Company s performance regularly and organises special events to this same end. In, it organised such events, between conferences and roadshows, increasing the number of briefing sessions conducted with investors by to 9 meetings in total. It visited investors in different cities, stopping in Geneva, Zurich, Edinburgh, Oporto, Paris, Chennai, Singapore and Hong Kong for the first time. / 9 / In 0, the Company is planning to step up its presence in important financial centres such as Frankfurt, London, Paris and Chicago. Smooth and systematic communication with investors has translated into greater familiarity with the shareholder base. Notable among the events attended by CIE Automotive were the Haitong Annual Iberian Conference in London in January, Banco Santander s Iberian Conference in February, Exane BNP s Spain Investors Day in April, the MidCap Forum organised by BME in May, the European Automotive Conference held by Société Générale in Paris in June, BBVA s Iberian Day and BPI s Iberian Conference in September and Ahorro Corporación s Mid Cap Forum in Bilbao in October. Thanks to the Investor Relations Department s briefing effort, coverage of the stock by research analysts increased to firms. In December, the consensus target price was., compared to. at year-end 0. INVESTOR EVENTS ORGANISED BY THE IR DEPARTMENT 0 Manned events Roadshows 0 Investor briefing sessions Investor facility visits Total 9

94 . SHAREHOLDER VALUE CREATION FIRST ANALYST DAY TREND IN SHAREHOLDER STRUCTURE It is worth highlighting CIE Automotive s first ever Analyst Day at which the CEO, Jesús María Herrera, unveiled the -00 Business Plan. The event, which took place on and May in Santiago de Compostela, was attended by analysts who, in addition to learning about the new plan first hand, were afforded the chance to visit CIE Galfor, meet with the management team and glimpse the Group s everyday activities... Ownership structure CIE Automotive s share capital stood at. million at year-end (9 million shares with a unit par value of 0.). These shares are traded on the Madrid and Bilbao stock exchanges through the continuous market (SIBE for its initials in Spanish). SHAREHOLDER STRUCTURE AT YEAR-END.. SHAREHOLDER 0 0 ACEK / Corporación Gestamp, S.L. Mahindra & Mahindra, Ltd. Antonio María Pradera Jáuregui Elidoza Promoción de Empresas, S.L. Alantra Asset Management, SGIIC, S.A. () José Ignacio Comenge Sánchez-Real.9%.9% 0.9%.%.%.%.0%.0% 0% 9.% 9.% 9.%.0%.0%.%.0% Addvalia Capital, S.A..0%.0%.0% All core shareholders.9%.9%.% Own shares Free float.%.%.% () Formerly, Nmas Asset Management, SGIIC, S.A. Core shareholders Own shares Free Float % INTEREST Core shareholders.% Own shares 0% Free float.% / 9 /

95 . SHAREHOLDER VALUE CREATION SIGNIFICANT SHAREHOLDERS AT YEAR-END NUMBER OF SHARES: 9,000,000 PAR VALUE 0. SHARE SHARE CAPITAL,0, SHAREHOLDERS DIRECT INDIRECT TOTAL % NOMINAL ACEK DESARROLLO Y GESTIÓN INDUSTRIAL, S.L 0,0,,900,0,9, %,,00. MAHINDRA & MAHINDRA, LTD 0,00,0,00,0.%,00,.0 ANTONIO MARÍA PRADERA JÁUREGUI,0,009,0,000,900, %,,00. ELIDOZA PROMOCIÓN DE EMPRESAS, S.L ALANTRA ASSET MANAGEMENT, SGIIC, S.A.,, 0,, 9.0%,09,.0 0,9,,9,.%,9,.0 ADDVALIA CAPITAL, S.A,0,0 0,0,0.000%,,.00 The information above is based on notifications made by the Company s shareholders to the securities market regulator, the CNMV, and to the Company (data updated as of //). / 9 /

96 . Customer orientation CIE Automotive sells high value-added automotive components to virtually all the OEMs and Tier suppliers in the market, and provides innovative services and solutions to over one thousand customers through its Smart Innovation business. To maintain the quality of its products and services, the Group invests significantly in R&D. In this expenditure was equivalent to.% of revenue. In, CIE Automotive began to work on the gradual rollout of advanced manufacturing at its plants... Innovation and technology The Company focuses its strategy on satisfying its customers no matter when or where. Thanks to its technology model, it is capable of offering a range of alternatives for a given component or subassembly in the main manufacturing markets. The winds of change prevailing in the vehicle market have prompted the Group to invest roughly % of sales in product and process innovation in recent years. Its innovation strategy is centred on making vehicles that are lighter, safer and more environmentally friendly. In parallel, it works to streamline its productive processes in a bid to compress delivery times, and cut costs. This multi-technology model is underpinned by seven R&D centres which carry out the research projects that will define the entire Group s fortunes in the years to come. / 9 / PRODUCT AND PROCESS ENGINE FUEL MANAGEMENT Gasoline Engines Diesel Engines ENGINE OIL MANAGEMENT HPDC Aluminium Sheet metal Plastic Turbochargers Resonators Emission control Manual DCT Automatic AMT EV, CVT Fuel Filling Fuel Tank ENGINE DOWNSIZING TRANSMISSION FULL FILLING SYSTEM THERMAL & ACCOUSTIC MANAGEMENT Heat shields Engine covers Underbody Shields LIGHTWEIGHT Suspension Comp. CASTING Structural Comp. CASTING + STAMPING INTELLIGENT MACHINES Robotics MM Communication Process Combination Production lines Flexibility In line control and Process Parameters self - correction Sensors and Actuators. Control Systems D Measurement technologies EFFICIENT MACHINES Lean Manufacturing Energy based Production Plan PRODUCTION PROCESSES Automation Productivity improvement Additive manufacturing Composite Technologies ADVANCED MATERIALS New foundry stainless materials Ceramic thermal and non-corrosive isolation IMPROVEMENT OF CONVENTIONAL MATERIALS PROPERTIES Structural Composites Acoustic Isolation Composites

97 . CUSTOMER ORIENTATION CIE AUTOMOTIVE S RESEARCH PROJECTS At present, CIE Automotive is working on 0 projects in its home market and 0 at the international level. This work is funded by the Spanish Ministry of Science and Innovation, the European Union and its Seventh Framework Programme. The Group also collaborates with a number of technology centres such as the Fraunhofer Institute, Idiada, Tecnalia, UPV, etc. R&D PROJECTS UNIQUE STRATEGIC PROJECT INTEGRAUTO: To increase the value-added in automotive components by adding functionality enabled by interconnection with innovative processes. INNPACTO PROGRAMME. WHENEVER Project: Development of a mini-corner with an in-wheel motor for urban electric vehicles. FP - the European Union s Seventh Framework Programme. ODIN - Optimized electric Drivetrain by Integration. LEARN FORM - Self-Learning Sheet Metal Forming System. EUNICE - Eco-design and Validation of In-Wheel Concept for Electric Vehicles. T-REX - Lifecycle extension through product redesign and repair, renovation, reuse, recycle strategies for usage & reusage-oriented business models. 009, 00, 0, 0 & 0 ACTION PLANS at different plants. / 9 /

98 . CUSTOMER ORIENTATION ADVANCED MANUFACTURING AT CIE AUTOMOTIVE CIE Automotive is working to gradually introduce advanced manufacturing at its facilities. Convinced that industry in the next decade will have little or nothing in common with industry today and that it is possible to eke out productivity gains even in countries with high salaries, CIE Automotive is working on product design innovation and revisiting production planning, product engineering and manufacturing and the supply chain. On its path towards.0 manufacturing lie a series of enabling technologies: embedded sensors, automation, robotisation, virtual and augmented reality, networked and autonomous robotics, smart data (big data and analytics), product and process simulation and additive manufacturing. The aim is to achieve: Automated plant monitoring flows. Less complex analysis of the overall data generated in the productive process. Articulation of an information architecture that allows development of cross-plant automation initiatives (across various technologies systems). Control over the process lines, particularly those requiring manual intervention. Reliable analysis of overall productive events across the various production lines. CIE AUTOMOTIVE, STANDARD BEARER FOR INDUSTRY.0 CIE Automotive s status as a standard bearer in industrial innovation is evident in its participation in the BI.0 Group which it chairs as well well as heading up its executive bodies as President of the Basque automotive cluster, ACICAE. The BI.0 pilot test is a public-private partnership between the leading corporate players, science and technology agents and public institutions with the aim of jointly designing, developing and implementing initiatives in the advanced manufacturing arena that can help transform the Basque region s industrial fabric. Basque Industry.0 is the name given to the advanced manufacturing strategy being pursued by the regional authorities in order to transform the Basque industrial landscape by leveraging new technology such as digitalisation. The idea is to commit strategically to advanced manufacturing as a key enabler in CLUSTERS AGENTES CIENTÍFICO-TECNOLÓGICOS ROTATING PRESIDENCY terms of maintaining the regional industrial base s competitiveness and positioning in higher valueadded market niches. The goal of the pilot taskforce is to define and roll out an organised programme of initiatives aimed at responding to the technological, business, organisational and talent development priorities established by the region s driving industrial sectors in the short and medium term to gain competitiveness and take advantage of opportunities emerging at the global level. The Company is participating in initiatives such as StartUP! BIND.0, a programme which offers select start-ups the chance to develop their projects in collaboration with companies of the calibre of CIE Automotive. Elsewhere, the Group participated in multiple R&Drelated educational activities between and 0 November as part of the fifteenth edition of Science, Technology and Innovation Week. EXECUTIVE BODIES (STEERING COMMITTEE AND EXECUTIVE COMMITTEE) GOVERNMENTS AND PUBLIC AGENCIES AGENTES SINGULARES / 9 /

99 . CUSTOMER ORIENTATION DOMINION: DIVERSIFICATION & INNOVATION Dominion has over,000 customers in the more than 0 countries in which it has permanent establishments. It is a highly fragmented customer base: Dominion s top five customers account for less than % of its revenue, providing natural protection against non-payment risk. Customer relationships are established on a decentralised basis, by division and geography, and also depending on the customer type. Dominion s Services and Solutions value proposition is predicated on R&D. To this end, a number of teams focus on the design or upgrade of software platforms and products for its internal and external customers. The research effort is concentrated in Spain, Mexico and Germany. In Spain, Dominion has a dedicated R&D unit which is part of the Basque Science and Technology Network. For more information, go to Dominion s Annual Report... Quality control Zero defects, zero accidents and zero contamination is the slogan representing CIE Automotive s operational excellence programme, AVANZA, since 0, which is aimed at continuously improving the products and services offered its customers. The programme is articulated around four cornerstones: safety, training, systematic reviews and ongoing learning. In, the Group continued to strive towards excellence at all its productive facilities, securing a range of certifications for different aspects, including its quality management (ISO TS 99), environmental management (ISO 000) and occupational health and safety systems (OSHAS 000). / 99 / CERTIFICATIONS CERTIFICATIONS COUNTRIES ISO TS 99 ISO 000 OHSAS 000 EUROPE Factories Certified factories % NORTH AMERICA Factories Certified factories % ASIA Factories Certified factories % S. AMÉRICA Factories Certified factories % ÁFRICA Factories Certified factories % TOTAL Factories Certified factories % * Does not include three factories integrated in

100 . CUSTOMER ORIENTATION QUALITY MANAGEMENT AT DOMINION Customer relations are underpinned by a partnership spirit. To lay the groundwork for this mutual trust and facilitate its business relations, Dominion possesses all the authorisations, permits and certifications needed to guarantee the safety of the solutions and services it offers, along with other environmental certifications and standards related with Corporate Social Responsibility. For more information, go to Dominion s Annual Report... Customer satisfaction CIE Automotive has put in place a control system which measures, tracks and analyses customer feedback with the aim of proposing improvements at the various plants as warranted. The Company assesses, on the one hand, the performance of each manufacturing centre by tracking claims, deliveries, external PPMs (defective parts per million) and line stoppages. In parallel, it quantifies customer perceptions by means of audits, evaluations and facts and figures. The readings are compiled into an annual quality management report and corrective action plans are drawn up as necessary. Some factories were evaluated using this procedure in, with % improving their performance, while corrective action was implemented at the remaining %... External acknowledgement CIE Automotive received a series of prizes in, having been named best supplier by several leading OEMs. These prizes endorse and raise the visibility of the work performed by everyone comprising CIE Automotive, motivating the Company to forge ahead with its continuous improvement and customer satisfaction efforts. PRIZES Ford, Top Suppliers Awards for Autometal Camaçari and CIE Autocom Brazil. PSA «PSA Best Plant» awarded to ACS Ibérica. General Motors gave its Supplier Quality Excellence Award to the following plants: Mar SK, Egaña and Udalbide in Europe and CIE Pemsa Celaya in Mexico. M&M Excellence Award for Mahindra CIE Forging Pune and Mahindra CIE Gears Rajkot, both in India. Cummins awarded Preferred Supplier status to Mahindra CIE Foundry, Urse. VW Zero Defects Strategy was awarded to CIE Pemsa Celaya. Nissan group gave its Regional supplier quality award to CIE Pemsa Celaya. Sisamex named CIE Legazpi Excellent Supplier. / 00 /

101 . Human Resources CIE Automotive s worldwide workforce comprised over,000 professionals at year-end. The Company prioritises management of its human capital, to which end it has formulated a Global Resources Plan, which is framed by the -00 Business Plan and underpinned by the 0-0 CSR Strategic Plan, and includes a succession plan for key personnel and a plan for attracting the talent and skills needed to execute the Company s international expansion and growth strategy. Increase in headcount...,0 Existing facilities... Facilities acquired in...,0 Increase attributable to Bill Forge...,9 India..., Mexico... Increase attributable to Amaya Telleria... Europe... Brazil... Mexico... 0 GEOGRAPHIC BREAKDOWN OF THE WORKFORCE (//) 0 0 Europe,,,9 America,,00, CIE Automotive s headcount stood at,0 at yearend,,0 more professionals than the year before. The growth is attributable almost entirely to the companies newly acquired in the automotive business in : over 90% of the increase in headcount stems from the acquisitions of the Amaya Telleria Group and Bill Forge. Asia, Africa & Oceanía,0,0,0 Automotive,9, 0,9 Smart Innovation,,9, Total,,,0 / 0 /

102 . HUMAN RESOURCES Eighty per cent of the workforce is employed by the Automotive business, with the remaining 0% working for the Smart Innovation business. This chapter outlines the key developments in with respect to the human resources devoted to the Automotive business. For more information about events at Dominion, go to its separate Annual Report... Automotive... HUMAN RIGHTS POLICY CIE Automotive s Human Rights Policy, which is aligned with the Group s Corporate Social Responsibility Policy and takes into consideration the lines of initiative contemplated in the 0-0 CSR Strategic Plan, sets out the principles governing employee relations, work conditions and the Company s commitments: Providing decent work: the Company provides its employees with fair pay, in line with their skills and knowledge. It also commits to upholding labour legislation in all its operating markets and, to the extent possible, establishing flexible working hour measures. Keeping its people safe and healthy: CIE Automotive provides its employees with a safe and healthy work environment, complying scrupulously with applicable legal requirements to this end. Facilitating collective bargaining and freedom of association: the Company respects its employees freedom of association and right to collective bargaining. The Group will, to the extent feasible, facilitate its employees efforts to meet and freely debate matters of significance to their jobs and employment. These principles echo those enshrined in the United Nations Global Compact, which the Company signed voluntarily in 0, thereby reaffirming its commitment to providing decent work and equal opportunities, taking a zerotolerance stance on discrimination, child and compulsory labour and protecting the freedom of association and collective bargaining rights.... PROFESSIONAL PROFILE At year-end, 0,9 people were working in the Automotive segment. Of these, were executives (.%);, were university graduates, technicians and clerical staff (.%); and, were skilled workers (0.%). By gender,.% of the workforce was male (female:.%). And by age bracket,, (.%) of all the professionals comprising the workforce at yearend were aged between 0 and 0,, (.%) were under 0 and,0 (.%) were over 0. Some,9 people joined CIE Automotive in. The continent concentrating the most new hires was America (, new employees), followed by Asia and Africa (,9) and Europe (). In parallel,,9 people left the Company voluntarily, % of whom men and %, women. Most of these departures were recorded in Asia and Africa (,9), followed by the Americas (,9) and Europe (9). / 0 /

103 . HUMAN RESOURCES... GENERAL LINES OF INITIATIVE A) PROFESSIONAL STABILITY Approximately 0% of CIE Automotive s workforce was employed under an indefinite contract at year-end. B) DECENT PAY The Company s employees earn a fixed salary, in keeping the nature of the work they do as well as their performance; performance at the Company and Group levels is also taken into consideration. The Company s employees earn a fixed salary, in keeping the nature of the work they do as well as their performance; performance at the Company and Group levels is also taken into consideration. C) RIGHT TO COLLECTIVE BARGAINING Of all the people working in the Automotive business, % (, employees) are directly covered by a collective bargaining agreement either at the plant, sector or regional level. There are worker representatives in the Automotive business. The Company engages openly with its workers representatives not only in its European plants but also in less unionised countries such as China and India. Company or sector or regional agreements or pacts were signed in workplaces in various countries in : Germany, Brazil, Spain, India, Italy, Mexico and Romania. The collective agreements signed in directly cover, employees. If obliged to restructure its workforce, CIE Automotive complies scrupulously with the law; in many instances it offers better terms than those imposed under local legislation. These agreements and pacts stipulate the notice periods that must be provided in the event of organisational changes. WORKFORCE BREAKDOWN BY CONTRACT TYPE Fixed/indefinite contracts,00 Temporary contracts, Total 0,9 / 0 /

104 . HUMAN RESOURCES AGREEMENT COVERAGE BY COUNTRY AND PLATFORM UNDER COLLECTIVE AGREEMENT TOTAL EMPLOYEES SPAIN,,0 9% BRAZIL,,00 9% INDIA,9,9 % MEXICO,,0 % CHINA 0% ROW,, % AUTOMOTIVE, 0,9 % % COVERAGE WORKER REPRESENTATIVES BY COUNTRY SPAIN BRAZIL INDIA MEXICO CHINA ROW AUTOMOTIVE / 0 /

105 . HUMAN RESOURCES D) GENDER EQUALITY The Company offers its employees a work environment free of bias on the grounds of gender, race, religion, age, sexual orientation, nationality, civil status or socio-economic background. The fact that automotive factories have traditionally been male denominated and the difficulty in hiring women in some markets (particularly India, a market in which the Company has increased its presence in recent years in the wake of the acquisition of Bill Forge and the alliance with Mahindra) means that % of its professionals are men. The Group is working to increase female representation at every level. This is evident in the fact that the percentage of female new hires is four points above average female workforce representation (% of new hires are women compared to female workforce representation of %); in parallel, the percentage of women leaving the Company is one point below this average (% vs. %). WORKFORCE BREAKDOWN IN THE AUTOMOTIVE SEGMENT BY JOB CATEGORY AND GENDER (AT YEAR-END) Executives Men Women University graduates, technicians and clerical staff Men Women Skilled workers Men Women TOTAL AUTOMOTIVE Total Men Total Women HEADCOUNT SNAPSHOT BY GENDER AND AGE,, 90,,,0 0,9,9,0 AGE MEN WOMEN TOTAL Under 0,0, Aged between 0 & 0 9,9,9, Over 0, 9,0 TOTAL AUTOMOTIVE,9,0 0,9 / 0 /

106 . HUMAN RESOURCES NEW HIRES BY GENDER BY CONTINENT AUTOMOTIVE MEN WOMEN TOTAL MEN % WOMEN % Europe 0 % % America,, % % Asia, Africa & Oceania,,9 9% % TOTAL,,0,9 % % % % Women incorporated at year-end. Men incorporated at year-end. E) TEAMS OF DIFFERING ABILITIES The percentage of the Automotive segment s workforce with some form of disability was.% in ( people), broadly flat year-on-year. F) ZERO-TOLERANCE STANCE ON COMPULSORY AND CHILD LABOUR The Company takes a zero-tolerance stance on child and forced labour. Against this backdrop, it has pledged to uphold labour legislation in its operating markets and to take corrective action to ensure it is enforced. G) WORKFORCE DIVERSITY CIE Automotive follows the labour rules in each of its operating markets and attempts to adapt to each region s customs and habits, albeit unflinchingly upholding internationally recognised human rights. The Group s commitment to diversity and equal opportunities is evident in the fact that 90% of the factory managers () are local hires. / 0 /

107 . HUMAN RESOURCES H) WORK-LIFE BALANCE CIE Automotive offers a range of initiatives designed to facilitate work-life balance. It also provides its employees with significant sums to help finance their or their families needs. Consistent with the overall business model, the HR Department believes that the autonomy of the various geographic regions is a crucial Company asset; this autonomy extends to the regions freedom to choose the best way of facilitating this balance for their employees. It believes that the best way of being sensitive to each region s idiosyncrasies is to provide them with sufficient room for manoeuvre so that they can manage their work-life balance formulae optimally. As a result, the work-life balance measures in place at CIE Automotive are numerous and diverse. In, the Group contributed over 0 million to measures that make everyday life for its employees and their families that bit easier:,000 was earmarked to educational measures such as scholarships, financial assistance plans and textbooks. Over million was invested in health insurance for employees and their families. Over million went to the firm s in-house medical service, which extends to outsourced sickbays. 0,000 was provided to employees in the form of advances. Over. million was devoted to company lunchrooms and canteens and buses and other means of transportation to shuttle employees to and from their homes. As for more qualitative measures that are not so readily convertible into a monetary value but unquestionably constitute a contribution by the Group to its employees, the following initiatives stand out: factories have paternity and maternity leaves that are longer than the legally stipulated times. factories offer teleworking arrangements. 9 factories have flexible working start and finish times where production schedules so permit. Three factories offer crèche facilities. NO. OF EMPLOYEES AVAILING OF MATERNITY/PATERNITY LEAVE / 0 / AGE MEN WOMEN TOTAL No. of employees availing of maternity/paternity leave

108 . HUMAN RESOURCES... Career development ATTRACTING TALENT PROFESSIONAL TRAINING CIE Automotive has an HR management model under which it establishes employee skill profiles, evaluates executive, middle management and skilled workers job performance, identifies areas for improvement and designs career development and training programs, the latter by means of a dedicated Professional Development Programme. In,,0 employees (%) were evaluated in respect of eight skill-sets: results orientation, customer relations, proactive attitude, innovation, teamwork, decision-making, flexibility and leadership. Employees undergo an annual assessment with their immediate superiors with the aim of analysing theirs and the Company s performance during the prior months and listening to their expectations for the near and longer term. Whenever skill gaps are detected, the employee in question is included in a specific training programme. In, the Group maintained the collaboration agreements put in place in prior years and already outlined in previous annual reports. One of the highlights specific to last year, one which evidences the Group s interest in harnessing and bolstering local talent and trying to develop the careers of its most promising professionals no matter their origin, CIE Automotive reached an agreement with the International Association for the Exchange of Students for Technical Experience (IAESTE) with the aim of attracting recent graduates from institutions in the countries it operates in. More specifically, the selected candidates are being offered traineeships at several legacy Group facilities for a year after which they are offered a job in their home markets with a triple objective: Providing technical training to graduates at the facilities with the longest track records, facilities at which the Company s values have been embedded for years. Facilitating engagement down the line with the countries that have been integrated into the Group more recently. Generating the intra-group relations that are essential to a healthy business performance. The first foreign students in technical degrees are expected at the Company s metal, forging and aluminium machining plants in Spain in 0. In, some 0, training hours were provided to, employees (approximately 0% of the workforce), which is equivalent to 0.9 training hours per employee. The Company offers two kinds of training programmes: Training at the factory level: training specifically related to operations and aimed at helping participants work more efficiently or do their jobs more easily. Training at the Group level: advanced management and interpersonal skills training provided to professionals with certain profiles. Some of these courses are provided by outside experts. There are also countless internal training initiatives that encompass the entire workforce. / 0 /

109 . HUMAN RESOURCES EMPLOYEE COMMUNICATION Employee relations are based on transparency and respect for others. The main channels used by the Company to communicate with its professionals are the scorecards, internal magazine, corporate website and intranet, where employees can get corporate information. The Company also conducts a Workplace Climate survey every two years. The 0 survey revealed that job and employee satisfaction were the toprated attributes. Among the initiatives carried out to improve the workplace climate, the contributions made to various employee sports competitions, events organised to mark certain special dates (Father s Day, Mother s Day, Christmas, etc.) and the prize awarded to the best student of the year, among other contests targeted at employees and their relatives, stand out (go to section. Community). / 09 /

110 . Workplace health & safety Keeping its employees safe and healthy is one of CIE Automotive s core values. Structurally, it uses an outside safety service that covers the four legally stipulated areas of accident prevention expertise and has a safety officer at each of its productive facilities. This effort is shored up by a corporate safety department which regularly audits the factories, maintains the corporate intranet and serves as contact point for issues related with occupational health and safety. At the factory level, the safety staff inspect the adequacy of the Company s facilities, conduct emergency evacuation drills, prove training, assist with incident investigations and carry out awareness drives. The workplace safety management system is based on the OHSAS 00 standard, which is audited regularly by Bureau Veritas. The effort made on the health and safety front is evident in the fact that automotive parts plants were OHSAS 00/00-certified at year-end. The Group has formulated an ambitious health and safety programme covering the next three years under which it the number of OHSAS 00/00-certified facilities will increase significantly (go to section.. Quality control). More generally, the Group will impose even more stringent safety standards in all the geographies in which it has manufacturing facilities. automotive parts plants are OHSAS 00/00- certified CIE Automotive s statistics demonstrate its unwavering concern for and commitment to the health and safety of its employees. Its workplace accident numbers are low in proportion to the total number of employees. As part of its safety effort, all employees are offered an annual medical checkup to detect any potential problem and take action in good time if required. CIE Automotive s workplace healthy and safety policy is articulated around prevention and education. In, the Company invested over. million in certifying and upgrading its facilities, adapting its work equipment and training its professionals. Thanks to this effort, the lost-time injury severity rate has fallen significantly, to, days in, fewer than in 0, despite considerable growth in the number of factories and employees in the wake of new acquisitions in the Automotive business. Achieving zero accidents at its workplaces is a priority target for CIE Automotive. With this aim in mind, it evaluates potential workplace risks, establishes preventative measures and monitors the effectiveness of initiatives implemented by means of internal audits. In parallel, it provides its professionals with safety training tailored for their workplaces and jobs. The safety standards upheld by the Company in all of its workplaces are more stringent than those legally required by the health and safety authorities. Moreover, they are audited annually by the corporate head of safety, with the exception of the plants in the Americas, where the plants audit each other. These audits can give rise to corrective action plans, which are supervised by the Group safety head. / 0 /

111 . WORKPLACE HEALTH & SAFETY In, there were 0 lost-time injuries, regrettably including one fatal accident at a plant in India. The growth in the number of accidents with respect to 0 reflects the increase in the number of productive facilities. All of the accidents were investigated using D methodology with a view to establishing corrective measures. / /

112 . WORKPLACE HEALTH & SAFETY WORKPLACE HEALTH AND SAFETY INDICATORS* 0 0 Lost-time injuries 9 Factory fatalities 0 Injury frequency rate.9.. Injury severity rate (*) In 0 and 0, data for both the Automotive (full scope) and Smart Innovation (Spain only) platforms. For, data for the Automotive business only; partial data for plants acquired in. CAPITAL EXPENDITURE In, the Group invested over. million in health and safety. This money was earmarked mainly to employee training, work equipment upgrades, facility certification and making its facilities healthier and safer. HEALTH AND SAFETY INDICATORS The key performance indicators tracked by CIE Automotive are its injury frequency and severity rates. The frequency rate was. in, compared to. in 0. This indicator tracks the number of losttime injuries (more than one work day lost) for every million man-hours worked during a defined period of time (year). The severity rate was 0. in, improving on the rate observed in 0 (0.). The Company expects its injury severity rate to continue to improve as the new facilities deriving from recent acquisitions are certified. SAFETY PLANS A total of automotive parts plants were OHSAS 00/00-certified at year-end, three more than at year-end 0. Each plant has its own health and safety plan which is put together on the basis of a framework system that is subjected to continual audit as part of the Group s workplace safety management systems. This structure enables the Company to adapt safety measures for each plant and evaluate the measures taken by it on this front as a whole. Individual action plans are formulated every year to deliver the targeted level of improvement defined on the basis of the prior year s performance. / /

113 . WORKPLACE HEALTH & SAFETY CONTROL OF CONTRACTORS AND SUBCONTRACTORS A large number of contractors work for CIE Automotive. None of the outsourced workers employed by these subcontractors was seriously injured at any workplace in. The Group has a corporate policy, which applies at all its automotive plants, which requires subcontractors to adhere to minimum quality and productivity standards and to comply with their health and safety obligations. The following checks are performed before they are contracted: Identification of the tasks to be executed by the subcontractors. Identification and assessment of the associated risks. Identification of the safety and protective measures and resources for their correct execution, specifying which will be contributed by CIE and which by the subcontractor. Establishment of complementary safety measures to control residual risks. This procedure is subject to internal and external audit. At present, six facilities have a software programme for controlling contractors and subcontractors; this figure is set to rise considerably over the course of 0. Note that the health and safety information concerning Dominion is provided in its own Integrated Report. WORKPLACE HEALTH AND SAFETY STAFF All of the Group s facilities have a health and safety officer. Group-wide, the number of professionals devoted to health and safety total 0. SPECIFIC HEALTH AND SAFETY TRAINING CIE Automotive s employees receive safety training tailored to the risks posed by their jobs. The Group makes sure that any employee starting a new job receives appropriate training. Group-wide, over,000 hours were devoted to health and safety training in. The courses provided in notably included programmes dealing with working at a height, in confined spaces, with forklifts and cranes, emergencies, ergonomics and electric risks, as well as job-specific training developed as a result of risk evaluation processes. BEST PRACTICES The number of factories using the dedicated software for managing contractors and subcontractors increased by two last year. This programme implies: Reducing the costs of coordinating business activities. Reducing response times SAFETY FORUMS CIE Automotive is a member of the Alava roundtable forums for workplace safety, SEA, and the Guipuzcoa workplace safety forum. It is also a member of the AEC s occupational health and safety committee. AEC is Spain s Quality Association. / /

114 . +.bn in purchases Sustainable supply chain management + m in investments % local suppliers +,000 suppliers Sustainable supply chain management is embedded into CIE Automotive s Board-approved 0-0 CSR Strategic Plan and aligned with its - 00 Business Plan. CIE Automotive purchased over. billion worth of goods and services from over,000 suppliers worldwide in. The Company continues to fine-tune its procurement model and to perform controls aimed at ensuring the quality and reliability of its supplies. Investment in amounted to million. The various buyer teams were actively involved to ensure correct adjudication based on objective criteria designed to maximise process efficiency... Performance in Once again last year, CIE Automotive s supply chain expanded, due mainly to the acquisitions of the Amaya Telleria Group and Bill Forge. These acquisitions have been integrated successfully from the point of view of resources and supplier streamlining and synergies. The CIE Automotive Group s purchasing procedures and policies have been implemented at the newly acquired factories. The expectation is that CIE Automotive s knowhow in the purchasing and logistics fields will benefit these newly-integrated companies over the course of 0. Organic growth at the existing factories also implied a major effort on the supply chain front in due to the need to manage new projects, certify new suppliers and adjudicate investments and purchases to existing suppliers all over the world. LOCAL SUPPLIERS Some % of the Group s purchases were procured from local suppliers in, compared to % in 0 and 0% in 0. The gradual increase in this percentage clearly evidences the Group s commitment to contributing to the industrial landscape and social progress in its operating markets. The identification of suppliers located close to the Group s factories is a crucial component of its purchasing strategy because it helps create wealth in these regions, while reducing logistics costs and import duties and naturally hedging exchange rate risk. / /

115 . SUSTAINABLE SUPPLY CHAIN MANAGEMENT.. Purchasing Policy The Group s revised and updated Purchasing Policy, establishing supplier selection guidelines, turned one in December. Indeed, the solidity of this Purchasing Policy is one of CIE Automotive s hallmarks. One hundred per cent of the Group s suppliers have endorsed this Purchasing Policy and the new Code of Conduct, which expressly stipulate the fundamental principles governing the purchasing function, such as the provision of equal opportunities and the prevention of fraud and corruption. By accepting them, the Group s buyers commit to complying with and enforcing CIE Automotive rules. EQUAL OPPORTUNITIES To ensure equal opportunities for all the companies looking to offer their services to CIE Automotive, the Company has a dedicated inbox, purchasing@cieautomotive.com, which is featured in the Suppliers tab on the Group s new corporate website. The Company received more than 00 s per month through this contact inbox in. Some of the companies that offer products and services of interest were contacted and the process of soliciting bids at the local or corporate levels has begun. Those suppliers whose offers do not match the Company s immediate needs have been added to a global database of potential CIE Automotive suppliers. The website has become a tool for transparently and rapidly accessing the general purchasing terms and conditions by country, the product purchase families and the purchasing procedures, as well as the Company s documentation regarding its suppliers social responsibility duties. CIE AUTOMOTIVE S PURCHASING POLICY Objective, transparent, fair and unbiased dealings and relations with all suppliers and partners. Alignment of the Purchasing Department s strategy and efforts around the delivery of established targets. Pledge of support, throughout the entire supply chain, for the United Nations Global Compact, specifically including the protection of human rights and the fight against fraud and corruption. Working, in-house and externally, to create awareness of the importance of improving companies environmental records and complying with health and safety regulations and labour rights. Implementation of procedures and controls designed to guarantee objective and fair adjudications. Execution of supplier selection on the basis of objective criteria which measure quality, service and CSR criteria. Identification and crystallisation of Group synergies. Development of long-term partnership and innovation agreements with suppliers. Search for mutual understanding and benefits in supplier relations. Contribution to suppliers process development. Motivation and active involvement of CIE Automotive s employees in the purchasing function and maximisation of their skills in order to achieve excellent performance standards. / /

116 . SUSTAINABLE SUPPLY CHAIN MANAGEMENT ANTI-FRAUD AND ANTI-CORRUPTION MEASURES CIE Automotive has a whistle-blowing channel which can be used by any member of its staff or any third party to report irregular conduct or activities. (Go to section. Business ethics). No notifications concerning potential fraud or corruption on the part of buyer staff were received through this channel in. DIALOGUE WITH SUPPLIERS CIE Automotive communicates with its suppliers by means of meetings, trade fair attendance and direct phone or correspondence. Although it does not have a specific supplier communication channel beyond the direct contact provided via the corporate website, the Company is accessible to its suppliers, convinced that smooth-flowing communication makes for higherquality suppliers and better service standards. / /

117 . SUSTAINABLE SUPPLY CHAIN MANAGEMENT.. Supplier quality and service reliability CIE Automotive s purchasing process is efficient and straightforward. The requirements demanded of suppliers are aligned with their classification as a function of the product or service they supply. In keeping with the Quality Management System for the Automotive Sector (UNE-ISO/TS 99), the CIE Automotive Group s purchasing procedures require the periodic assessment of the firms supplying it with raw materials, components, logistics services and tools, along with subcontractors used. Ninety per cent of CIE Automotive s suppliers of the product families deemed subject to assessment are UNE-ISO/TS 99 or ISO900 certified; environmental certification under UNE-EN ISO 00 and OHSAS 00 certification is also positively rated. Training was provided in on the new Quality Management Standard for the Automotive Sector, IATF 99: during sessions to which certain suppliers were also invited. All of CIE Automotive s internal procedures, including its purchasing procedures, were updated for the new standard and suppliers are being informed of any new requirements incumbent upon them. / / Over 90% of raw material and parts suppliers and subcontractors are ISO TS 99 or ISO 900 certified. AUDITS Suppliers are evaluated by means of audits which assess and score them on the following parameters: planning, reception, training and skills, process, maintenance, inspection, packaging, storage, continuous improvement and environmental performance, customer satisfaction, documentation and corporate social responsibility. These audits are highly rated by the suppliers themselves as they generate benefits for their own organisations that they can pass on to the rest of their customers. In, the Group audited over 00 suppliers. Over 9% of the suppliers audited obtained an acceptable rating (meaning they complied with between % and 9% of their requirements; specific improvements are required within a six-month deadline); less than % was rated as unacceptable (meaning they can no longer supply the Company); the remaining % were put on probation (these suppliers have to improve their management models as they only comply with between % and % of their requirements). A total of 0 suppliers were audited in the course of. 00% of the audits performed factored in environmental certification and corporate social responsibility criteria, these being mandatory criteria in CIE Automotive s supplier assessment and new supplier screening processes since 0. SUPPLIER AUDITS GEOGRAPHIES NO. OF AUDITS, % Asia(India/China) 0 % NAFTA (Mexico/USA) 9 % Europe 0 % Brazil 0 %

118 . SUSTAINABLE SUPPLY CHAIN MANAGEMENT.. Supply chain, social and environmental considerations In, all of CIE Automotive s main suppliers were sent a mandatory social responsibility declaration and all new suppliers were asked to endorse and sign it along with their initial contracts or maiden orders. By signing this document, the Company s suppliers pledge to respect the World Labour Organisation s (WLO) conventions. On the environmental front, they have to uphold the principle of precaution, take initiatives to promote greater environmental responsibility and encourage the development and dissemination of environmentally-friendly technologies. In all, over 0 firms signed the social responsibility declaration. ENVIRONMENTAL SURVEY In parallel, and with the aim of extending its pledge to reducing its carbon footprint to the entire supply chain, CIE Automotive sent the top 0 suppliers (by invoicing volumes) at each factory all over the world a survey in order to find out which suppliers are already certified environmental-wise and make sure that those that are not understand their impact on the climate and can display diligence in managing, controlling and reducing their greenhouse gas emissions. More specifically, CIE Automotive asked its suppliers if they were in possession of environmental certifications and if they were reporting to the Carbon Disclosure Project (CPD). In the event they did not report to this or another similar platform, they were asked for information about how they measure their emissions, their emission reduction targets and the measures being taken to achieve them. Over 0% of the main suppliers surveyed reported that they were in possession of an environmental certification such as the ISO 00. However, some 99% said they did not report to either the CDP or any other equivalent platform. Rather, these companies take measures to control specific consumptions, such as: Fossil fuels. Electricity gas compressed air They also reported initiatives designed to cut emissions and streamline energy usage. However, it is worth noting that as of the date of writing, virtually 99% of the above suppliers were not doing anything to control their suppliers undertakings in this area. / /

119 . SUSTAINABLE SUPPLY CHAIN MANAGEMENT QUESTIONS ASKED THE MAIN SUPPLIERS CONFLICT MINERALS Letters were also sent to the main suppliers used by the Company s factories around the world asking them and raising awareness about the use of certain materials deemed conflict minerals under section 0 of the US Ley Dodd-Frank Act: cassiterite (for tin), wolframite (for tungsten), coltan (for tantalum), and gold ore. This law obliges listed US companies to disclose their use of the above minerals and indicate their origin, documenting them using the stipulated procedure. So far, in 9% of responses received to the more than 00 letters sent out, the suppliers vehemently deny the use of these products in their productive processes. A specific action plan has been formulated to tackle the issue with the suppliers that acknowledged partial use of one or more of these minerals. This plan will be rolled out in 0 and will provide CIE Automotive with certainty that the source of extraction is in no instance the Congo in the Great Lakes Region of Africa. CIE asks its suppliers to meet a host of requirements not only in the pursuit of operational excellence but also improvement of the CSR, environmental and conflict mineral fronts. / 9 /

120 . Environmental management The CIE Automotive Group is committed to fighting climate change, working, framed by the historic agreements reached at the Paris Climate Change Conference and the UN s Sustainable Development Goals (SDG #), to halt global warming and curb greenhouse gas emissions. In keeping with the environmental principles upheld in the United Nations Global Compact and the stance taken by the European Union in the above forums, the Group strives to strike the right balance between its industrial activity and environmental protection. services that are directly related with the environment. In both instances, the Company embeds energy efficiency measures, rational water usage criteria and appropriate waste management rules into its processes and facilities... Progress made in CIE Automotive earmarked. million to the removal of waste and upgrading of its facilities in order to reduce their environmental footprint. This sum is covered by the Environmental Strategy Plan which the Company is in the process of executing. As part of that plan, in, the Group introduced four new environmental management indicators (corresponding to those established in GRI EN, EN9, EN, EN) related to material, energy and water consumption and to emissions and discharges. Thanks to these indicators, the Company is now able to manage its impacts more precisely and take more adequate measures to reduce them. CHALLENGES FOR 0 The following initiatives are planned for 0: Establishing, gradually, an energy efficiency plan at the individual plant level that will enable the Company to deliver its climate change pledges. Initiating environmental offset activities to mitigate the contamination that cannot be avoided. Introducing a new indicator to the scorecard to reflect each factory s average environmental cost. In January 0, CIE Automotive joined Forética s Climate Change Cluster, a topflight business group made up of Spanish companies, whose mandate is to transpose into the Spanish landscape the main global climate change trends and debates from a business perspective, becoming an authority on corporate environmental matters. The Environmental Strategy Plan currently being executed by the Company determines the lines of initiative and objectives for contributing with its actions to the fight against climate change. The activities of both of its business units, Automotive and Smart Innovation, are consistent with the environmental commitments expressed in both its statement of Mission, Vision and Values and in its Health, Safety, Environmental and Quality (HSEQ) Policy. In the Automotive platform, it eco-designs products to be more environmentally friendly, while its Smart Innovation platform provides solutions and Given the successive changes in CIE Automotive s scope, with the integration of new companies year after year, it is hard to appreciate the positive underlying trend in its environmental indicators. For this purpose, it is better to observe those whose performance is measured relative to revenue in euro terms. The Company did not incur any environmental fine or penalty in. / 0 /

121 . ENVIRONMENTAL MANAGEMENT... Consumption of water and material resources As a manufacturer of automotive components, CIE Automotive uses water and raw materials intensively. Permanent revision of all processes is vital to ensuring responsible use of these resources. Adequate management of the water it needs to cool materials shaped at high temperatures is a priority. In order to minimise water discharges, the Company has proprietary water treatment systems that enable its recovery. WATER Water consumption EUROPE N. AMERICA ASIA S. AMERICA AFRICA TOTAL INDICATOR DEFINITION UNIT EN Water used m/year,9.0 0,9.,9. 0,0.00,.9,0.,., ,,.9,9,.0 Discharges EUROPE N. AMERICA ASIA S. AMERICA AFRICA TOTAL INDICATOR DEFINITION UNIT EN Water discharged m/year 99,.,.9 0,0.,., ,9.,., ,0.,9.0 Water consumption/revenue (efficiency) EUROPE N. AMERICA ASIA S. AMERICA AFRICA TOTAL INDICATOR DEFINITION UNIT EN Water used m/year/k s / /

122 . ENVIRONMENTAL MANAGEMENT MATERIALS EUROPE N. AMERICA ASIA S. AMERICA AFRICA INDICATOR DEFINITION UNIT G-EN Raw material used Kg,,0.0,,9.,0,0.00,09,0.,0,9.00,9,99.,,09.,,9.,.00 0,.00 G-EN Raw material re used Kg,,.9 9,0,9.0,,9.00,99,0.0,0,.0,9,.00,,.00,,0.9,9.00, Total G-EN,0,,0.9,0,,9.0 Total G-EN 9,9,.9,, Energy efficiency and emissions Another of CIE Automotive s top priorities is to enhance its energy efficiency as this makes it more competitive by reducing expenditure, while helping to diminish its environmental footprint in tandem. Dominion has intervened at the Group s industrial facilities with two aims: To enable monitoring of energy and resource consumption (electricity, gas, water and compressed air). To implement energy optimisation solutions such as the reduction of injected engine fuel consumption, rationalisation of the compressed air circuit and recovery of compressor heat. / /

123 . ENVIRONMENTAL MANAGEMENT ENERGY Energy consumption and savings EUROPE N. AMERICA ASIA S. AMERICA AFRICA INDICATOR DEFINITION UNIT G-EN Energy, direct consumption Kwh,0,.,9,0.0 0,,0. 9,9,.,00,.00,9,0. 0,9,.,, G-EN Energy, indirect consumption Total G-EN Kwh,0,0.,0,9.00 9,,.0,00,.00 0,99,0. 0,,.0,,.00,9.,.00,9,. 90,9,. Total G-EN,,.,, Energy consumption indicators relative to revenue EUROPE N. AMERICA ASIA S. AMERICA AFRICA TOTAL INDICATOR DEFINITION UNIT G-EN (direct) Energy, direct consumption Kwh/K -.9., G-EN (direct) Energy, indirect consumption Kwh/K G-EN (total) Energy, total consumption Kwh/K / /

124 . ENVIRONMENTAL MANAGEMENT As part of its e ort to help curb global warming, CIE Automotive strives continually to pare back its emissions. EMISSIONS RECORD EUROPE N. AMERICA ASIA S. AMERICA AFRICA TOTAL INDICADOR DEFINICIÓN UNIDAD G-EN Direct emissions CO,.,9.,.,.0 0,9.9 0,.,.,.9 - -,.0 9,09. G-EN Indirect emissions CO 0,.0 0,0.,.0,9.9,9.,.,9.9 9, ,0.9,. 0,. Contaminating emissions / revenue EUROPE N. AMERICA ASIA S. AMERICA AFRICA TOTAL INDICATOR DEFINITION UNIT G-EN (directs) Direct emissions CO / k G-EN (indirects) G-EN (total) Indirect emissions CO / k Total emissions CO / k The factors used to calculate emissions are the 0 factors recommended by the IPCC (Intergovernmental Panel on Climate Change, set up by the United Nations and International Energy Agency). / /

125 . ENVIRONMENTAL MANAGEMENT... Waste management, reuse and recycling To manage the waste generated in the course of manufacturing automotive parts, CIE Automotive deploys a recycling system that enables the internal recovery of thousands tonnes of remains deriving from its various productive processes. In aluminium, for example, shaped using injection moulding and machining processes, CIE Automotive generates sizeable amounts of remains such as sprue, risers, starting pieces, etc. from the injection moulding process and shavings from the machining process. In both instances, the Company reuses these remnants in the melting process. Similarly, the plastics division recycles sprue and other remains returned by its injection moulding process. The biggest amount of waste generated by CIE Automotive is steel from its stamping, forging and machining processes. Given that this steel cannot be recycled in full within the Group s factories, it is delivered to a number of different local suppliers for end-to-end reuse. BIONOR: WHERE RECYCLING AND THE CAR INDUSTRY MEET Within the Automotive business, one project stands out for its role in preserving the environment: Bionor. This company produces biofuels which use recycled oils. Some,0 metric tons of used oils were recycled in. The use of biofuels is an alternative to traditional propellants. Bionor s activities span the sourcing of raw materials (recycled oils, animal fats, oleins, etc.), the manufacturing of biofuels and their subsequent distribution. Bionor has biofuel manufacturing facilities in Spain. RECYCLING SNAPSHOT 0 0 Aluminium (tonnes),,09,0 Oil (tonnes),0,,0 / /

126 . ENVIRONMENTAL MANAGEMENT... Applied eco-design One of CIE Automotive s unique hallmarks is its ability to leverage eco-design processes to make more environmentally-friendly automotive parts. In recent years, and in harmony with broader market trends, the Company has thrown itself into the downsizing phenomenon, i.e., the effort to reduce the weight and size of engines so as to, in conjunction with super-charger technology, boost power while reducing fuel requirements and emissions. It also applies the eco-design philosophy to its manufacturing processes; in addition to complying with its environmental obligations, this translates into lower costs and competitiveness gains. DOMINION WORKS TO PROTECT THE ENVIRONMENT Many of Dominion s projects are related to protecting the environment. Within the Solutions division, it develops platforms to measure weather and water/air quality. In the Services segment, it helps customers use less energy in their productive processes and to harness the residual heat generated by them. Some of the projects executed by Dominion are closely intertwined with environmental protection, such as the meteorological networks in Honduras and Venezuela and the anti-tsunami alarm network implemented in Arica and the O Higgins regions of Chile, which combine environmental protection with civilian protection measures. In the energy efficiency field, it is worth singling out a range of initiatives carried out at some of the Automotive segment s manufacturing facilities. For more information, go to Dominion s Annual Report / /

127 . Community CIE Automotive plays a role in local development by creating jobs, purchasing from local suppliers and paying taxes in all its operating markets. In all its markets, it collaborates closely with the authorities and earmarks funds to helping those in need... VALUE GENERATED AND DISTRIBUTED ( million) ECONOMIC VALUE GENERATED Revenue 0 0 Revenue,9.0,.,09. ECONOMIC VALUE DISTRIBUTED To shareholders (dividends)* 0 0.,.. To employees (employee benefits expense) To suppliers (consumption of raw and auxiliary materials) To society (corporation tax). 00..,.,0., Retained earnings Depreciation and impairment charges... / / (*) Dividend paid during the year

128 . COMMUNITY.. Engagement with the community CIE Automotive engages in open dialogue with the public authorities and other local community organisations to minimise any adverse impacts its productive facilities may have and, to the extent possible, factor their feedback into its new projects. The Company is politically neutral and does not finance, either directly or indirectly, political parties or their representatives or candidates, either in Spain or abroad. Its dealings with local governments are based on collaboration and scrupulous respect for prevailing legislation. One of its goals is to advise the authorities on technical matters related to the automotive industry. Against this backdrop, in 0, the chairman of CIE Automotive, Antón Pradera, assumed the rotating chairmanship of the public-private committee that will roll out the Basque Industry.0 strategy. This initiative is aimed at defending the Basque economy s industrial specialisation by promoting higher value-added manufacturing activities. (Go to the chapter on Innovation and Technology for further details) ASSOCIATIONS TO WHICH CIE AUTOMOTIVE BELONGS Sernauto - The Spanish association of automotive equipment and components manufacturers. CLEPA - The European Association of Automotive Suppliers. EGVIA - The European Green Vehicles Initiative Association. ERTRAC - The European Road Transport Research Advisory Council. SIFE - The Spanish forgers association. TEDFUN - The Spanish aluminium smelters association. EDCA - The European Die Casting Association. MF - A Spanish automotive and mobility technology platform. Tecnalia - A private applied research centre. MEMBERSHIP OF BUSINESS ASSOCIATIONS CIE Automotive is a member of a number of business associations, whose remit is to defend the automotive industry s interests vis-a-vis government. Dominion, for its part, has been a patron of the APD (association for management progress) since 0 and is a member the association of network, internet and telecommunication systems suppliers. / /

129 . COMUNIDAD.. COMMUNITY WORK CIE Automotive s Community Work Policy establishes the scope of its community involvement and the related guidelines. The Company participates in a series of community programmes to which it earmarked over 00,000 in through a number of different non-government organisations. These programmes fall under the scope of the different categories stipulated in the Community Work Policy, namely, donations to different NGOs to help fund their activities, partnerships with centres and institutions designed to help young people join the job market and programmes aimed at eradicating poverty, particularly among children. The pledge to engage employees in the Group s community work effort has materialised in the involvement of, employees in community work initiatives worldwide. CIE AUTOMOTIVE S COMMUNITY WORK: GUIDING PRINCIPLES Collaboration Transparency Contribution of added value Long-term commitment Employee engagement in company efforts Focus on underprivileged places CIE AUTOMOTIVE S COMMUNITY PROGRAMMES Collaborative agreements with universities and vocational training centres CIE Automotive has agreements with universities and vocational training schools covering research projects, work practice and graduate recruitment. Programmes for the eradication of hunger and poverty in Brazil CIE Automotive participates in programmes for the eradication of hunger and poverty championed by the Brazilian Ministry of Social Development. Young Apprentice project The Young Apprentice project is championed by the town council of Diadema (Brazil) in order to provide schooling to homeless children. Collaboration with the Novia Salcedo Foundation Youth employment collaboration agreement with the Novia Salcedo Foundation. In addition to those indicated in the accompanying table, Dominion carries out a range of community work activities that are outlined in its Integrated Report. Schooling programmes in Chiapas (Mexico) CIE Automotive collaborates with schooling programmes in Chiapas (Mexico). Employee volunteering in Mexico CIE Automotive employees do volunteer work in the Saltillo Coahuila region (Mexico). For more detailed information, go to the Community Work tab on the corporate website. Lenbur Foundation sponsorship Sponsorship of the Lenbur Foundation, devoted to the study, recovery, recreation and publicising of the natural, industrial and cultural heritage of the Urola-Garaia region. Collaboration with the Vizcaya Food Bank A joint company-employee initiative under which CIE Automotive frees up volunteering employees for the equivalent of one working day, with the participating employees contributing the equivalent of a half day from their free time. / 9 /

130 . COMUNIDAD SPONSORSHIP AND PATRONAGE The CIE Automotive Group engages in sponsorship at the group and individual company levels. In the sports arena, the Group contributes funds for the organisation of mountain bike races in Mexico, sponsors activities designed to encourage children to do sport in Spain and has an agreement with the Real Sociedad Foundation for the contribution of sports materials in Guipúzcoa. As for relevant social problems, in addition to the community programs listed above, CIE Automotive makes signification contributions to organisations that do important social work in different places of the world, such as: In addition, the contributions the Group makes to the organisation of traditional festivities, mountainclimbing groups, local cultural initiatives and Christmas celebrations in the various places in which it does business are too many to enumerate. Lastly, CIE Automotive, through certain subsidiaries, is an associate member of the Guggenheim Museum in Bilbao.. Spain s Down Syndrome Association.. Education sponsorship work in India.. The provision of support for children with heart conditions in Mexico.. The adaptation of vehicles for disabled people in Italy.. Donations to cancer, leukaemia and diabetes associations in the US. / 0 /

131 APPENDIX I SDGs / /

132 SDGS SUSTAINABLE DEVELOPMENT GOALS (SDGs) Annual Report. NO POVERTY End poverty in all its forms everywhere. 0-0 CSR Plan. Human Resources: General lines of initiative. Community.. ZERO HUNGER End hunger, achieve food security and improved nutrition, and promote sustainable agriculture. 0-0 CSR Plan. Human Resources: General lines of initiative.. GOOD HEALTH AND WELL-BEING Ensure healthy lives and promote well-being for all at all ages. 0-0 CSR Plan. Human Resources: General lines of initiative. Workplace health and safety. Community.. QUALITY EDUCATION Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all. 0-0 CSR Plan. Career development. Community work. / /

133 SDGS SUSTAINABLE DEVELOPMENT GOALS (SDGs) Annual Report. GENDER EQUALITY Achieve gender equality and empower all women and girls. Human Resources: General lines of initiative. Community.. CLEAN WATER AND SANITATION Ensure availability and sustainable management of water and sanitation for all. Environmental management.. AFFORDABLE AND CLEAN ENERGY Ensure access to affordable, reliable, sustainable and modern energy for all. Environmental management.. DECENT WORK AND ECONOMIC GROWTH Promote sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all. 0-0 CSR Plan. Career development. Community work. / /

134 SDGS SUSTAINABLE DEVELOPMENT GOALS (SDGs) Annual Report 9. INDUSTRY, INNOVATION AND INFRASTRUCTURE Build resilient infrastructure, promote inclusive and sustainable industrialisation, and foster innovation. 0-0 CSR Plan. Community. 0. REDUCED INEQUALITIES Reduce inequality within and among countries. Human Resources: General lines of initiative. Community.. SUSTAINABLE CITIES AND COMMUNITIES Make cities and human settlements inclusive, safe, resilient and sustainable. Community.. RESPONSIBLE CONSUMPTION AND PRODUCTION Ensure sustainable consumption and production patterns. Environmental management. / /

135 SDGS SUSTAINABLE DEVELOPMENT GOALS (SDGs) Annual Report. CLIMATE ACTION Take urgent action to combat climate change and its impacts (taking note of agreements made by the UNFCCC forum). Environmental management.. LIFE BELOW WATER Conserve and sustainably use the oceans, seas and marine resources for sustainable development. Environmental management.. LIFE ON LAND Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification and halt and reverse land degradation, and halt biodiversity loss. Environmental management. / /

136 SDGS SUSTAINABLE DEVELOPMENT GOALS (SDGs) Annual Report. PEACE, JUSTICE AND STRONG INSTITUTIONS Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels. Human Resources: General lines of initiative. Community.. PARTNERSHIPS FOR THE GOALS Strengthen the means of implementation and revitalise the global partnership for sustainable development. 0-0 CSR Plan. Community. / /

137 APPENDIX II GRI-G Part I: Profile indicators Part II: Disclosures on management approach Part III: Performance indicators / /

138 GRI-G AND ANALYSIS PROFILE DESCRIPTION GO TO / EXPLANATION Part I: Profile indicators G- Statement from the most senior decision maker of the organisation about the relevance of sustainability to the organisation and its strategy. ORGANISATIONAL PROFILE The Annual Report. Section. Chairman s statement. G- Description of key impacts, risks, and opportunities. The Annual Report. Section.. Risk management. PROFILE DESCRIPTION GO TO / EXPLANATION G- Name of the organisation. The Annual Report. Section.. Group Profile. G- Primary brands, products, and services. The Annual Report. Section.. Platforms. G- Primary brands, products, and services. The Annual Report. Section.. Group Profile. G- Number of countries where the organisation operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report. The Annual Report. Section.. Group Profile. G- Nature of ownership and legal form. The Annual Report. Section.. Group Profile. G- Markets served, including geographic breakdown, sectors served, and types of customers and beneficiaries. G-9 Scale of the organisation. Total number of employees. Total number of operations. Net sales. Total capitalisation broken down in terms of debt and equity. Quantity of products or services provided. The Annual Report. Section.. Platforms. The Annual Report. Section.. Financial and non-financial metrics. / /

139 GRI-G ORGANISATIONAL PROFILE (CONT D) PROFILE DESCRIPTION GO TO / EXPLANATION Part I: Profile indicators G-0 Workforce breakdown. Total number of employees by employment contract and gender. Total number of permanent employees by employment type and gender. Total workforce by employees and supervised workers and by gender. Total workforce by region and gender. Report whether a substantial portion of the organisation s work is performed by workers who are legally recognized as self-employed, including employees and supervised employees of contractors. Report any significant variations in employment numbers. The Annual Report. Section.. Human resources. G- Percentage of total employees covered by collective bargaining agreements. The Annual Report. Section.. Human resources, subsection... General lines of initiative, C) Right to Collective Bargainning. G- Description of the organisation s supply chain. Sequence of activities or parties that provides products and services to the organisation. Total number of suppliers engaged by the organisation and estimated number of suppliers in the supply chain. Types of suppliers of products and services to the organisation. Estimated monetary value of payments made to suppliers. Sector-specific characteristics of the supply chain. G- Significant changes during the reporting period regarding the organisation s size, structure, ownership, or its supply chain. Facility openings, closings, and expansions. Changes in the share capital structure. Changes in the location of suppliers, the structure of the supply chain, or in relationships with suppliers, including selection and termination. G- Explanation of whether and how the precautionary approach or principle is addressed by the organisation. G- Externally developed economic, environmental, and social charters, principles or other initiatives to which the organisation subscribes or which it endorses. The Annual Report. Section.. Sustainable supply chain management. The Annual Report. Section.. Sustainable supply chain management. The Annual Report. Section... CIE Automotive, a responsible company. The Annual Report. Section... CIE Automotive, a responsible company. G- Memberships of associations. The Annual Report. Section... Community engagement. / 9 /

140 GRI-G IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES Part I: Profile indicators PROFILE DESCRIPTION GO TO / EXPLANATION G- List all entities included in the organisation s consolidated financial statements, specifying whether they are covered by the report. Consolidated Financial Statements - Appendix I G- Process for defining the report content. The Annual Report. Section. About this report, subsection.. Methology. G-9 List all the material aspects identified. The Annual Report. Section. About this report, subsection.. Methology. G-0 Materiality within the organisation of the material aspects identified and aspect boundary for each. The material aspects are limited to the internal scope of the organization except for the indicators related to the Annual Report. Section.. Sustainable supply chain management. G- For each material aspect, the aspect boundary outside the organisation. The Annual Report. Section. About this report, subsection.. Methology. G- The effect of any restatements of information provided in previous reports, and the reasons for such restatements (e.g. mergers and acquisitions, changes in base periods, nature of business, measurement methods). G- Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report. None of the information presented in prior-year reports was reformulated in. The Annual Report. Section. About this report, subsection.. Methology. / 0 /

141 GRI-G STAKEHOLDER ENGAGEMENT PROFILE DESCRIPTION GO TO / EXPLANATION G- List of stakeholder groups engaged by the organisation. The Annual Report. Section.. Stakeholder engagement. Part I: Profile indicators G- Basis for identification and selection of stakeholders with whom to engage. The Annual Report. Sections from.. Shareholder value creation to.. Community. G- The organization s approach to stakeholder engagement, including frequency of engagement by type and by stakeholder group, and an indication of whether any of the engagement was undertaken specifically as part of the report preparation process. The Annual Report. Section.. Stakeholder engagement. G- Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to them. The Annual Report. Sections from.. Shareholder value creation to.. Community. REPORT PARAMETERS PROFILE DESCRIPTION GO TO / EXPLANATION G- Reporting period (such as fiscal or calendar year) for information provided. The Annual Report. Section.. Methology. G-9 Date of most recent previous report. The 0 Annual Report was published in April. G-0 Reporting cycle. Annual. G- Contact point for questions regarding the report or its contents. The Annual Report. Section.. Contact details. G- Report the in accordance option the organization has chosen. Report the GRI Content Index for the chosen option. Report the reference to the External Assurance Report, if the report has been externally assured. G- Policy and current practice with regard to seeking external assurance for the report. The Annual Report. Section.. Methology. The Annual Report has not been externally assured. The Annual Report has not been externally assured. / /

142 GRI-G Part I: Profile indicators PROFILE DESCRIPTION GO TO / EXPLANATION G- The governance structure of the organisation, including committees of the highest governance body. Identify any committees responsible for decisionmaking on economic, environmental and social impacts. G- Report whether the organisation has appointed an executive-level position(s) with responsibility for economic, environmental and social topics, and whether post holders report directly to the highest governance body. The Annual Report. Section. Corporate governance. Further details are available in the Corporate Governance sub-section of the Investors & Shareholders website, accessible from the corporate website. The Annual Report. Section.. CSR management. G- Processes for consultation between stakeholders and the highest governance body on economic, environmental and social topics. If consultation is delegated, describe to whom and any feedback processes to the highest governance body. G- Composition of the highest governance body. Board committees. Nature (independence, executive or non-executive). Tenure. Number of each individual s other significant positions. Gender. Membership of under-represented social groups. Competences relating to economic, environmental and social impacts. Stakeholder representation. G-9 Indicate whether the chair of the highest governance body is also an executive officer (and, if so, their function within the organisation s management and the reasons for this arrangement). The Annual Report. Sections.. Stakeholder engagement,.. Contact details, and. CSR management. The Annual Report. Section.. Corporate governance bodies. Further details are available in the Corporate Governance sub-section of the Investors & Shareholders website, accessible from the corporate website The Chairman holds an executive position. The Annual Report Section.. Corporate governance bodies. His duties are outlined in article 9 of the Board Regulations. / /

143 GRI-G (CONT D) PROFILE DESCRIPTION GO TO / EXPLANATION Part I: Profile indicators G-0 Process for determining the qualifications and experience of the members of the highest governance body for guiding the organisation s strategy on economic, environmental, and social topics. Report: Whether and how diversity is considered. Whether and how independence is considered. Whether and how expertise and experience relating to economic, environmental and social topics are considered. Whether and how stakeholders (including shareholders) are involved. G- Processes for the highest governance body to ensure conflicts of interest are avoided. Report whether conflicts of interest are disclosed to stakeholders, including: Cross-board membership. Cross-shareholdings with suppliers and other stakeholders. Existence of controlling shareholder. Related party disclosures. The Appointments and Remuneration Committee is the body tasked selecting the members of the highest governance body. This Committee s duties are outlined in article of its Regulations. The Board of Directors also has the power to appoint directors, as indicated in articles. h) and i) of the Board Regulations. The Board s composition and classes of directors are also defined in articles and, while the procedure is described in article. Lastly, Section C Corporate Governance Structure (specifically section C..9) of the Annual Corporate Governance Report provides additional information about the director selection process. The Code of Conduct applies to all members of the highest governance body. Appendix I thereof requires the disclosure of possible relationships with other directors, suppliers and other stakeholders. Related disclosures are also provided in section C.. in the section addressing the company s Corporate Governance Structure of the company s Annual Corporate Governance Report. Lastly, refer to section. of the Integrated Report, Business Ethics, which also details the procedures in place. / /

144 GRI-G (CONT D) PROFILE DESCRIPTION GO TO / EXPLANATION Part I: Profile indicators G- The highest governance body s and senior executives roles in the development, approval and updating of the organisation s purpose, value or mission statements, strategies, policies, and goals related to economic, environmental and social impacts. G- Measures taken to develop and enhance the highest governance body s collective knowledge of economic, environmental and social topics. The Annual Report. Section... CIE Automotive, a responsible company. The Board s duties are stipulated in article of the Board Regulations. Corporate Social Responsibility Committee. The Annual Report. Section.. CSR management. G- Processes for evaluation of the highest governance body s performance with respect to governance of economic, environmental and social topics. Report whether such evaluation is independent or not, and its frequency. Report whether such evaluation is a self-assessment. Actions taken in response to evaluation of the highest governance body s performance with respect to governance of economic, environmental and social topics, including, as a minimum, changes in membership and organisational practice. G- The highest governance body s role in the identification and management of economic, environmental and social impacts, risks, and opportunities. The highest governance body s role in the implementation of due diligence processes. Report whether stakeholder consultation is used to support the highest governance body s identification and management of economic, environmental and social impacts, risks, and opportunities. The Annual Report. Section.. Corporate governance bodies. The Board s duties are stipulated in article of the Board Regulations. Refer also to section of the Integrated Report, Corporate Governance. G- The highest governance body s role in reviewing the effectiveness of the organisation s risk management processes for economic, environmental and social topics. The Board s duties are stipulated in article of the Board Regulations. Refer also to section.. of the Integrated Report, Risk management. / /

145 GRI-G (CONT D) PROFILE DESCRIPTION GO TO / EXPLANATION Part I: Profile indicators G- The frequency of the highest governance body s review of economic, environmental and social impacts, risks, and opportunities. G- Report the highest committee or position that formally reviews and approves the organization s sustainability report and ensures that all material Aspects are covered. G-9 The process for communicating critical concerns to the highest governance body. G-0 The nature and total number of critical concerns that were communicated to the highest governance body and the mechanism(s) used to address and resolve them. The Annual Report. Section.. Risk management. Corporate Social Responsibility Committee. The Executive Committee, the Audit and Compliance Committee and the Corporate Social Responsibility Committee are responsible for informing the highest governance body. In addion, the company has a whistleblowing channel. The Annual Report. Section.. Business ethics. The Annual Report. Section.. Business ethics. G - The remuneration policies for the highest governance body and senior executives for the below types of remuneration: Fixed pay and variable pay: performance-based pay, equity-based pay, bonuses, shares. Sign-on bonuses or recruitment incentive payments. Termination payments. Clawbacks. Retirement benefits, including the difference between benefit schemes and contribution rates for the highest governance body, senior executives, and all other employees. How performance criteria in the remuneration policy relate to the highest governance body s and senior executives economic, environmental and social objectives. The Annual Report. Section... Remuneration policy. Related disclosures are also provided in section C.C. in the section addressing the Structure of the company administration in the company s Annual Corporate Governance Report. G- The process for determining remuneration. Report whether remuneration consultants are involved in determining remuneration and whether they are independent of management. Report any other relationships which the remuneration consultants have with the organisation. The Annual Report. Section... Remuneration policy. / /

146 GRI-G (CONT D) PROFILE DESCRIPTION GO TO / EXPLANATION Part I: Profile indicators G- How stakeholders views are sought and taken into account regarding remuneration, including the results of votes on remuneration policies and proposals, if applicable. G- Report the ratio of the annual total compensation for the organisation s highestpaid individual in each country of significant operations to the median annual total compensation for all employees (excluding the highest-paid individual) in the same country. G- Report the ratio of percentage increase in annual total compensation for the organisation s highest-paid individual in each country of significant operations to the median percentage increase in annual total compensation for all employees (excluding the highest-paid individual) in the same country. The Annual Report. Section... Remuneration policy. This information cannot be provided for reasons of confidentiality. This information cannot be provided for reasons of confidentiality. ETHICS AND INTEGRITY PROFILE DESCRIPTION GO TO / EXPLANATION G- Description of the organisation s values, principles, standards and norms of behaviour such as codes of conduct and codes of ethics. G- The internal and external mechanisms for seeking advice on ethical and lawful behaviour, and matters related to organisational integrity, such as helplines or advice lines. G- The internal and external mechanisms for reporting concerns about unethical or unlawful behaviour, and matters related to organisational integrity, such as escalation through line management, whistleblowing mechanisms or hotlines. The Annual Report. Section.. Business ethics. The powers vested in the Corporate Social Responsibility Committee (article 9 of the CSR Committee Regulations) include the possibility of contracting external advisory services in respect of particularly relevant matters if it deems that the advice cannot be adequately provided or provided with sufficient independence by the experts within the Company itself or its Group companies. The Annual Report. Section.. Business ethics. / /

147 GRI-G G-DMA DESCRIPTION GO TO / EXPLANATION DMA-EC Economic dimension. Economic performance. Indirect economic impacts. Market presence. Procurement practices. The Annual Report. Sections. Businees model,. Strategy,.. Earning performance,.. Sustainable supply chain management, and.. Community. Part II: Disclosures on management approach (disclosures on management approach DMA) DMA-EN DMA-SO Environmental dimension. Materials. Water. Emissions. Products and Services. Transport. Supplier Environmental Assessment. Social dimension.. Labour practices and decent work. Employment. Occupational Health and Safety. Diversity and Equal Opportunity. Supplier Assessment for Labor Practices. Energy. Biodiversity. Effluents and Waste. Compliance. Overall. Environmental Grievance Mechanisms. Labor/Management Relations. Training and Education. Equal Remuneration for Women and Men. Labor Practices Grievance Mechanisms. The Annual Report. Section.. Environmental management. The Annual Report. Sections.. Human resources,.. Workplace health and safety, and.. Sustainable supply chain management.. Human rights. Investment. Freedom of Association and Collective Bargaining. Child Labor Security Practices. Assessment. Human Rights Grievance Mechanisms. Non-discrimination. Indigenous Rights. Supplier Human Rights Assessment. Forced or Compulsory Labor. DMA-SO. Society. Local Communities. Public Policy. Compliance. Supplier Assessment for Impacts on Society.. Product responsibility. Customer Health and Safety. Marketing. Communications. Compliance. Anti-corruption. Anti-competitive Behavior. Grievance Mechanisms for Impacts on Society. Product and Service Labeling. Customer Privacy. The Annual Report. Section.. Community. The Annual Report. Section.. Customer orientation. / /

148 GRI-G ECONOMIC PERFORMANCE PROFILE DESCRIPTION GO TO / EXPLANATION Part III: Performance indicators Economic dimension G-EC G-EC G-EC Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments. Financial implications and other risks and opportunities for the organisation s activities due to climate change. Financial implications and other risks and opportunities for the organisation s activities due to climate change. The Annual Report. Sections.. Financial and non-financial metrics, and.. Community. The organisation does not currently have the information in the level of detail needed to fill out this indicator. The organisation does not currently have the information in the level of detail needed to fill out this indicator. G-EC Significant financial assistance received from government. The organisation does not currently have the information in the level of detail needed to fill out this indicator. MARKET PRESENCE PROFILE DESCRIPTION GO TO / EXPLANATION G-EC G-EC Ratios of standard entry level wage by gender compared to local minimum wage at significant locations of operation. Proportion of senior management hired from the local community at significant locations of operation. This information cannot be provided for reasons of confidentiality. The Annual Report. Section.. Human resources, subsection... General lines of initiative, g) Workforce diversity. / /

149 GRI-G INDIRECT ECONOMIC IMPACTS Part III: Performance indicators Economic dimension PROFILE DESCRIPTION GO TO / EXPLANATION G-EC Development and impact of infrastructure investments and services supported. The organisation does not currently have the information in the level of detail needed to fill out this indicator. G-EC Significant indirect economic impacts, including the extent of impacts. The organisation does not currently have the information in the level of detail needed to fill out this indicator. PROCUREMENT PRACTICES PROFILE DESCRIPTION GO TO / EXPLANATION G-EC9 Proportion of spending on local suppliers at significant locations of operation. The Annual Report. Section.. Sustainable supply chain management, subsection... Performance in. / 9 /

150 GRI-G MATERIALS PROFILE DESCRIPTION GO TO / EXPLANATION G-EN Materials used by weight or volume. The Annual Report. Section.. Environmental management. Part III: Performance indicators Environmental dimension G-EN Percentage of materials used that are recycled input materials. The Annual Report. Section.. Environmental management. ENERGY PROFILE DESCRIPTION GO TO / EXPLANATION G-EN Energy consumption within the organisation by source (renewable versus nonrenewable) and type of fuel used. The Annual Report. Section.. Environmental management. G-EN Energy consumption outside of the organisation. The Annual Report. Section.. Environmental management. G-EN Building energy intensity. The Annual Report. Section.. Environmental management. G-EN Reduction of energy consumption. The Annual Report. Section.. Environmental management. G-EN Reductions in energy requirements of products and services. The organisation does not currently have the information in the level of detail needed to fill out this indicator. WATER PROFILE DESCRIPTION GO TO / EXPLANATION G-EN Total water withdrawal by source. The Annual Report. Section.. Environmental management. G-EN9 Water sources significantly affected by withdrawal of water. The organisation does not currently have the information in the level of detail needed to fill out this indicator. G-EN0 Percentage and total volume of water recycled and reused. The Annual Report. Section.. Environmental management. / 0 /

151 GRI-G BIODIVERSITY PROFILE DESCRIPTION GO TO / EXPLANATION Part III: Performance indicators Environmental dimension G-EN G-EN Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas. Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas. All of CIE Automotive s work centres are located in urban or industrial areas and they comply with applicable planning laws so that their impact on biodiversity is considered low. All of CIE Automotive s work centres are located in urban or industrial areas and they comply with applicable planning laws so that their impact on biodiversity is considered low. G-EN Habitats protected or restored. All of CIE Automotive s work centres are located in urban or industrial areas and they comply with applicable planning laws so that their impact on biodiversity is considered low. G-EN Total number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk. All of CIE Automotive s work centres are located in urban or industrial areas and they comply with applicable planning laws so that their impact on biodiversity is considered low. EMISSIONS PROFILE DESCRIPTION GO TO / EXPLANATION G-EN Direct greenhouse gas (GHG) emissions (Scope ). The Annual Report. Section.. Environmental management. G-EN Indirect greenhouse gas (GHG) emissions (Scope ). The Annual Report. Section.. Environmental management. G-EN Other greenhouse gas (GHG) emissions (Scope ). The Annual Report. Section.. Environmental management. / /

152 GRI-G EMISSIONS PROFILE DESCRIPTION GO TO / EXPLANATION Part III: Performance indicators Environmental dimension G-EN Greenhouse gas (GHG) emissions intensity. The Annual Report. Section.. Environmental management. G-EN9 Reduction of greenhouse gas (GHG) emissions. The Annual Report. Section.. Environmental management. G-EN0 Emissions of ozone-depleting substances (ODS). The Annual Report. Section.. Environmental management. G-EN NOx, SOx and other significant air emissions. The Annual Report. Section.. Environmental management. EFFLUENTS AND WASTE PROFILE DESCRIPTION GO TO / EXPLANATION G-EN Total water discharge by quality and destination. The Annual Report. Section.. Environmental management. G-EN Total weight of waste by type and disposal method. The Annual Report. Section.. Environmental management. G-EN Total number and volume of significant spills. The Annual Report. Section.. Environmental management. G-EN G-EN Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally. Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organisation s discharges of water and runoff. The Annual Report. Section.. Environmental management. The Annual Report. Section.. Environmental management. / /

153 GRI-G LAND DEGRADATION, CONTAMINATION AND REMEDIATION PROFILE DESCRIPTION GO TO / EXPLANATION Part III: Performance indicators Environmental dimension G-CR Land and other assets remediated and in need of remediation for the existing or intended land use according to applicable legal designations. PRODUCTS AND SERVICES The organisation does not currently have the information in the level of detail needed to fill out this indicator. PROFILE DESCRIPTION GO TO / EXPLANATION G-EN Extent of impact mitigation of environmental impacts of products and services. The organisation does not currently have the information in the level of detail needed to fill out this indicator. G-EN Percentage of products sold and their packaging materials that are reclaimed. The organisation does not currently have the information in the level of detail needed to fill out this indicator. COMPLIANCE PROFILE DESCRIPTION GO TO / EXPLANATION G-EN9 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations. The Annual Report. Section.. Environmental management. TRANSPORT PROFILE DESCRIPTION GO TO / EXPLANATION G-EN0 Significant environmental impacts of transporting products and other goods and materials used for the organisation s operations, and transporting members of the workforce. The Annual Report. Section.. Environmental management. / /

154 GRI-G OVERALL PROFILE DESCRIPTION GO TO / EXPLANATION Part III: Performance indicators Environmental Dimension G-EN Total environmental protection expenditures and investments by type. The Annual Report. Section.. Environmental management. SUPPLIER ENVIRONMENTAL ASSESSMENT PROFILE DESCRIPTION GO TO / EXPLANATION G-EN Percentage of new suppliers that were screened using environmental criteria. The Annual Report. Section... Supplier quality and service reliability. GN-EN Significant actual and potential negative environmental impacts in the supply chain and actions taken. The Annual Report. Section... Supply chain, social and environmental considerations. ENVIRONMENTAL GRIEVANCE MECHANISMS PROFILE DESCRIPTION GO TO / EXPLANATION G-EN Number of grievances about environmental impacts filed, addressed, and resolved through formal grievance mechanisms. The Annual Report. Section.. Environmental management. / /

155 GRI-G EMPLOYMENT PROFILE DESCRIPTION GO TO / EXPLANATION G-LA Total number and rates of new employee hires and employee turnover by age group, gender and region. The Annual Report. Section.. Human resources. Part III: Performance indicators Social dimension / Labour practices and decent work G-LA LABOUR/MANAGEMENT RELATIONS PROFILE DESCRIPTION GO TO / EXPLANATION G-LA Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation. Minimum notice period(s) regarding operational changes, including whether these are specified in collective agreements. The Annual Report. Section.. Human resources. G-LA Return to work and retention rates after parental leave, by gender. The Annual Report. Section.. Human resources. OCCUPATIONAL HEALTH AND SAFETY The Annual Report. Section.. Human resources. PROFILE DESCRIPTION GO TO / EXPLANATION G-LA G-LA Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programmes. Type of injury and rates of injury, occupational diseases, lost days, and absenteeism, and total number of work-related fatalities, by region and by gender. The Annual Report. Section.. Human resources. The Annual Report. Section.. Workplace health and safety. G-LA Workers with high incidence or high risk of diseases related to their occupation. The Annual Report. Section.. Workplace health and safety. G-LA Health and safety topics covered in formal agreements with trade unions. Formal agreements with unions include health and safety issues. For a greater detail of the total of plants with agreements, go to the Annual Report. Section.. Human resources. / /

156 GRI-G TRAINING AND EDUCATION PROFILE DESCRIPTION GO TO / EXPLANATION Part III: Performance indicators G-LA9 G-LA0 G-LA Average hours of training per year per employee by gender, and by employee category. Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. Percentage of employees receiving regular performance and career development reviews, by gender and by employee category. The Annual Report. Sections.. Human resources, and.. Workplace health and safety. The Annual Report. Section.. Human resources. The Annual Report. Section.. Human resources. Social dimension / Labour practices and decent work DIVERSITY AND EQUAL OPPORTUNITY PROFILE DESCRIPTION GO TO / EXPLANATION G-LA Composition of governance bodies and breakdown of employees per employee category according to gender, age group, minority group membership, and other indicators of diversity. The Annual Report. Section.. Human resources. EQUAL REMUNERATION FOR WOMEN AND MEN PROFILE DESCRIPTION GO TO / EXPLANATION G-LA Ratio of basic salary and remuneration of women to men by employee category, by significant locations of operation. The Group has conducted analysis involving of the Group s factories without detecting significant differences in remuneration on account of gender. / /

157 GRI-G Part III: Performance indicators Social dimension / Labour practices and decent work SUPPLIER ASSESSMENT FOR LABOUR PRACTICES PROFILE DESCRIPTION GO TO / EXPLANATION G-LA Percentage of new suppliers that were screened using labour practices criteria. The Annual Report. Section... Supply chain, social and environmental considerations. G-LA Significant actual and potential negative impacts for labour practices in the supply chain and actions taken. LABOUR PRACTICES GRIEVANCE MECHANISMS The Annual Report. Section... Supply chain, social and environmental considerations. PROFILE DESCRIPTION GO TO / EXPLANATION G-LA Number of grievances about labour practices filed, addressed, and resolved through formal grievance mechanisms. The Annual Report. Section.. Business ethics. / /

158 GRI-G INVESTMENT Part III: Performance indicators Social dimension/ Human rights PROFILE DESCRIPTION GO TO / EXPLANATION G-HR NON-DISCRIMINATION Total number and percentage of significant investment agreements and contracts that include human rights clauses or that underwent human rights screening. The organisation does not currently have the information in the level of detail needed to fill out this indicator. PROFILE DESCRIPTION GO TO / EXPLANATION G-HR Total number of incidents of discrimination and corrective actions taken. The Annual Report. Section.. Business ethics. FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING PROFILE DESCRIPTION GO TO / EXPLANATION G-HR Operations and suppliers identified in which the right to exercise freedom of association and collective bargaining may be violated or at significant risk, and measures taken to support these rights. The Annual Report. Section... Supply chain, social and environmental considerations. / /

159 GRI-G CHILD LABOUR Part III: Performance indicators Social dimension/ Human rights PROFILE DESCRIPTION GO TO / EXPLANATION G-HR Operations and suppliers identified as having significant risk for incidents of child labour, and measures taken to contribute to the effective abolition of child labour. FORCED OF COMPULSORY LABOUR The Annual Report. Section... Supply chain, social and environmental considerations. PROFILE DESCRIPTION GO TO / EXPLANATION G-HR Operations and suppliers identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of all forms of forced or compulsory labour. The Annual Report. Section... Supply chain, social and environmental considerations. ASSESSMENT PROFILE DESCRIPTION GO TO / EXPLANATION G-HR9 Total number and percentage of operations that have been subject to human rights reviews or impact assessments. The Group has conducted analysis involving of the Group s factories without detecting any operations of this type. / 9 /

160 GRI-G Part III: Performance indicators Social dimension/ Human rights SUPPLIER HUMAN RIGHTS ASSESSMENT PROFILE DESCRIPTION GO TO / EXPLANATION G-HR0 Percentage of new suppliers that were screened using human rights criteria. The Annual Report. Section... Supply chain, social and environmental considerations. G-HR Significant actual and potential negative human rights impacts in the supply chain and actions taken. HUMAN RIGHTS GRIEVANCE MECHANISMS The Annual Report. Section... Supply chain, social and environmental considerations. PROFILE DESCRIPTION GO TO / EXPLANATION G-HR Number of grievances about human rights impacts filed, addressed, and resolved through formal grievance mechanisms. The Annual Report. Section.. Business ethics. / 0 /

161 GRI-G LOCAL COMMUNITIES PROFILE DESCRIPTION GO TO / EXPLANATION G-SO Percentage of operations with implemented local community engagement, impact assessments and development programmes. The organisation does not currently have the information in the level of detail needed to fill out this indicator. Part III: G-SO Operations with significant potential or actual negative impacts on local communities. There were no operations with significant actual or potential impacts on local communities in. Performance indicators Social dimension/ Society ANTI-CORRUPTION PROFILE DESCRIPTION GO TO / EXPLANATION G-SO Percentage and total number of business units analysed for risks related to corruption. Anti-fraud and corruption measures are accordingly part of the enterprise risk management process and are underpinned by the existence of a duly updated Code of Conduct. There is an Anti-Corruption and Anti-Fraud Policy that applies to all employees and business units. G-SO Communication and training on anti-corruption policies and procedures. The Group s Anti-Corruption and Anti- Fraud Policy and Code of Conduct have been distributed to the entire organisation. G-SO Confirmed incidents of corruption and actions taken. The Integrated Report, section. Business Ethics, refers to the complaints received via the HYPERLINK cieautomotive.com/canal-dedenuncias Whistle-Blowing Channel. Similarly, section. Sustainable supply chain management, in subsection.. Purchasing Policy, states that the organisation did not receive notice of any potential incidents of fraud or corruption on the part of its buyer teams in. / /

162 GRI-G PUBLIC POLICY Part III: Performance indicators Social dimension/ Society PROFILE DESCRIPTION GO TO / EXPLANATION G-SO Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country. ANTI-COMPETITIVE BEHAVIOUR The Annual Report. Section... Community engagement. PROFILE DESCRIPTION GO TO / EXPLANATION G-SO Total number of legal actions for anti-competitive behaviour, anti-trust, and monopoly practices and their outcomes. No actions of this kind were undertaken in. COMPLIANCE PROFILE DESCRIPTION GO TO / EXPLANATION G-SO Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations. The organisation did not receive significant fines for non-compliance with laws or regulations in. / /

163 GRI-G Part III: Performance indicators Social dimension/ Society SUPPLIER ASSESSMENT FOR IMPACTS ON SOCIETY PROFILE DESCRIPTION GO TO / EXPLANATION G-SO9 Percentage of new suppliers that were screened using criteria for impacts on society. The Annual Report. Section... Supply chain, social and environmental considerations. G-SO0 Significant actual and potential negative impacts on society in the supply chain and actions taken. GRIEVANCE MECHANISMS FOR IMPACTS ON SOCIETY The Annual Report. Section... Supply chain, social and environmental considerations. PROFILE DESCRIPTION GO TO / EXPLANATION G-SO Number of grievances about impacts on society filed, addressed, and resolved through formal grievance mechanisms. The Annual Report. Section.. Business ethics. / /

164 GRI-G CUSTOMER HEALTH AND SAFETY Part III: Performance indicators Product responsibility PROFILE DESCRIPTION GO TO / EXPLANATION G-PR Total number of incidents of non-compliance with regulations and voluntary codes concerning the health and safety impacts of products and services during their life cycle, by type of outcomes PRODUCTS AND SERVICE LABELLING There were no incidents of this type in. PROFILE DESCRIPTION GO TO / EXPLANATION G-PR Results of surveys measuring customer satisfaction. The Annual Report. Section... Customer satisfaction. MARKETING COMMUNICATIONS PROFILE DESCRIPTION GO TO / EXPLANATION G-PR Sale of banned or disputed products. CIE Automotive, S.A. did not sell banned or disputed products in. G-PR Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion and sponsorship by type of outcomes. There were no incidents of noncompliance with regulations and voluntary codes concerning marketing communications. / /

165 GRI-G Part III: Performance indicators Product responsibility CUSTOMER PRIVACY PROFILE DESCRIPTION GO TO / EXPLANATION PR COMPLIANCE Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data. The organisation did not receive any substantiated complaints concerning breaches of customer privacy in. PROFILE DESCRIPTION GO TO / EXPLANATION G-PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services. The organisation did not receive significant fines for non-compliance with laws and regulations concerning the provision and use of products and services in. / /

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