Corporate Practices Committee Report

February 20, 2015

To the Board of Directors of Grupo Herdez, S.A.B. de C.V.

I am pleased to present herewith the Annual Report of the activities of the Board of Directors’ Corporate Practices Committee corresponding to 2014 fiscal year, as provided in Article 43, Section I of the Securities Market Law.

In developing our work, we have observed the regulations contained in the Securities Market Law, the General Rules Applicable to Securities Issuers and Other Participants of the Securities Market, the Corporate Best Practices Code’s recommendations, the Committee Rules and the Annual Program with the issues to be considered.

During the reported period, the Committee punctually held the called meetings, an agenda was prepared based on the issues to be discussed and the respective minutes were prepared for each meeting. The meetings were attended by the designated directors and invitees.

A report was submitted to the Board of Directors with the issues discussed in every meeting of the Committee.

The relevant issues discussed, which in turn were recommended for approval to the Board of Directors, were the following:

1. We have learned the policies for designation and for integral compensation of the Chief Executive Officer and other relevant executives.

2. We have learned about the mechanism to measure and disclose the observations on the performance of the relevant executives. During the year, the performance of these relevant executives was considered to be adequate, having been determined on the basis of the established policies.
3. We have analyzed the integral remuneration package of the Chief Executive Officer and other relevant executives.

We have analyzed the external auditor Report on operations with related parties, as part of the agreed procedures referred to in the applicable standard. In this report, it was concluded that the transactions correspond to the normal business purposes, that they have been carried out at market value, and that they have been duly recorded as appropriate.

4. Such transactions have included sales fees and services, maquila, selling of materials, real estate and transportation equipment leasing, product imports services, personnel services, interests, freights and other services amounting to a total of Ps. 2,461 million.

5. There were no exemptions granted by the Board of Directors to allow a director, a relevant executive or an individual with decision-making power to take advantage for his/her own benefit, or in favor of any third party from business opportunities corresponding to the Society or to the legal entities under its control, or over which they have significant influence.

6. Management of derivative financial instruments, which is mainly focused on certain raw materials coverage, is being carried out in accordance with the policies that have been established and approved by the Board of Directors.

Sincerely,

ROBERTO DANEL DÍAZ

Chairman of the Corporate Practices Committee