Page 6 - Parmalat 2017 Consolidated Statement
P. 6

Note on methodology

               Parmalat S.p.A., in its capacity as a public interest entity (pursuant to Article 16, Section 1, of Legislative Decree No.
               39 of January 27, 2010), Parent Company of a Group with maximum dimensions in terms of employees, financial
               position and net revenue that exceed the thresholds of Article 2, Section 1, is subject to the implementation of
               Legislative  Decree  No.  254  of  December  30,  2016  (hereinafter  “Decree  254”)  “implementation  of  Directive
               2014/95/EU of the European Parliament and Council of October 22, 2014, amending Directive 2013/34/EU insofar
               it concerns the disclosure of non-financial information and information about diversity at certain large companies
               and groups.”

               This Consolidated Non-financial Statement (hereinafter also “NFS”) of the Parmalat Group at December 31, 2017
               was  prepared in accordance with the provisions of Decree 254 and constitutes a separate document from the
               Report on Operations but is an integral part of the documents accompanying the “2017 Annual Report.” The NFS
               was prepared in accordance with the GRI-referenced option provided under the GRI Standards (2016) of the Global
               Reporting  Initiative  and  using  the  Reporting  Principles  defined  by  the  “GRI  Standards:101  Foundation.”  More
               specifically, this document is referenced to the “Topic Specific Standards” listed in the “Table of Correlation with
               Legislative Decree 254 and the GRI Referenced claims.”

               The NFS includes the data for the Parent Company and the subsidiaries consolidated line by line, “to the extent
               deemed necessary to provide an understanding of the Group’s operations, its performance and results and the
               impact it produced.” The consolidation boundary for the Group’s activities subject of this report was defined using
               a methodology for the selection of “significant” subsidiaries based on the use of certain quantitative parameters
               set  forth  in  Legislative  Decree  No.  254/16  and  on  the  results  of  specific  assessments  carried  out  within  the
               framework of Enterprise Risk Management, whose catalog of risks was used to extract, specifically, those that are
               most closely related to the specific issues described in Legislative Decree No. 254/16. The information contained in
               the NFS refers to the companies included in the scope of consolidation used for the 2017 consolidated financial
               statements, except for:

                   -  the financial companies, i.e., Dalmata S.p.A., Parmalat Belgium SA and Curcastle Corporation NV;

                   -  the  companies  not  deemed  significant  for  reporting  on  the  topics  listed  in  the  Decree,  i.e.,  Sata  Srl,
                      Lactalis Export Americas, A.D. Brands S.A., Parmalat Bolivia Srl, Parmalat del Ecuador SA, Lacteosmilk SA,
                      Lacteos Algil Guatemala S.A. de C.V., Parmalat Paraguay SA, Parmalat Perù s.a.c., Parmalat Botswana (Pty)
                      Ltd,  Parmalat  Produtos  Alimentares  sarl,  Parmalat  Swaziland  (Pty)  Ltd,  Parmalat  NZ  Limited,  Parmalat
                      International Pte Ltd and Parmalat Hong Kong Limited); and

                   -  the companies acquired in 2017, i.e., Silac Commerciale Srl, Karoun Dairies LLC, Karoun Dairies Properties
                      LLC, Central Valley Cheese Inc, La Vaquita Holding S.p.A., Inmobiliaria Industrial Codigua II S.p.A., Lacteos
                      del  Sur  S.A.,  Transportes  Codigua  S.p.A.,  Agroindustrial  Codigua  S.p.A.,  Agrocomercial  Codigua  S.p.A.,
                      Transportes  Kumey  S.p.A.  and  Lacteos  Kumey  S.p.A.  for  which,  consistent  with  the  prevailing
                      interpretation, as represented in the Consob Explanatory Report of January 19, 2018, and in view of the
                      limited time span elapsed since  acquisition, it was decided to begin the consolidation of non-financial
                      information starting on January 1, 2018.

               Any additional limitation of the abovementioned boundary are shown in the “Table of Correlation with Legislative
               Decree 254 and the GRI Referenced claims.”

               The NFS provides a report on issues concerning personnel management and human rights, occupational health and
               safety, the environment, engagement with local communities, management of the supply chain and fight against
               corruption, viewed as significant and material in accordance with a specific and established process that takes into
               account Parmalat’s specific activities, illustrated below in this document (see the chapter entitled “Sustainability
               and Parmalat”).

               6                       Consolidated Non-financial Statement at December 31, 2017 Pursuant to Legislative Decree No. 254/2016
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