1. INTRODUCTION

This Code of Conduct lays out the fundamental values, principles and standards of conduct that should govern the performance and behaviour of the members of Verdalia Bioenergy Group (hereafter, “Verdalia” or “Organization”), including Members of the Organization, which include all those who work for or on behalf of the Organization.

We recognise the critical role that our corporate culture and ethics play in the sustainable development of our mission and projects by providing a solid foundation for the behaviour expected of all Members of the Organization in the performance of their duties.

Indeed, today ́s business demands are not focused solely on complying with the laws in force in the various legal systems. Our stakeholders expect that organizations achieve high ethical standards, to establish proper commercial relationships.

As a result, Verdalia expresses its firm commitment to a corporate culture based on strong ethical standards, by virtue of which each and every one of us has the duty and obligation to comply with the rules set out in this Code of Conduct.

In this way, we will contribute to the collective success of the Organization by promoting our brand and maintaining a good reputation. Our brand is an intangible asset that is essential to attract and retain talent, stakeholders’ trust, and credibility with financial institutions, government agencies, Business Partners, as well as with the market and society in general.

In this way, all professionals must actively participate in our commitment to respecting and preserving the Verdalia brand on a daily basis and in every action. We must be aware of the difficulty and effort that it takes to build a good reputation, and of the ease with which this reputation can be negatively affected by actions or decisions that do not comply with the highest ethical and behavioural standards.

For this reason, through this Code of Conduct and its associated policies, procedures, and instructions, Verdalia reinforces its commitment to not only comply with all applicable law, but also to promote ethical behaviour, which will enhance our ways of working, our modus operandi, our decision-making, and our ways of relating to the Organization ́s stakeholders.

2. AIM AND OBJECTIVES

The aim and main objectives of this Code of Conduct are the following:

• set out the values, principles and ethical and professional standards that should guide the behaviour and conduct of the members of the Organization;
• prevent the commission of criminal offences, corrupt practices, and acts contrary to applicable law and to this Code of Conduct within the Organization; and
• promote among our Business Partners, Intermediaries and other stakeholders’ behaviour, guidelines that are consistent and aligned with the values, principles and conduct standards embodied in this Code of Conduct.

This Code is a guide and cannot set out every scenario that may arise. It is important to use common sense and good judgment when making difficult decisions. Additionally, it is important to understand where in the Organization to get further assistance, guidance or escalate concerns. See section 9 for further details.

3. SCOPE OF APPLICATION

The Code of Conduct shall be binding and directly applicable to all the entities and companies belonging to Verdalia, regardless of their geographic location.

Accordingly, Members of the Organization shall act in compliance with the values, principles and standards established in this Code of Conduct, regardless of their type of contract, their geographical location, whether they are temporary or permanent staff, their functions and tasks performed, and their hierarchical position or role within the Organization. It also applies to Intermediaries when they carry out their activities for or on behalf of the Organization (but for the avoidance of doubt when such Intermediary has established its own policies and procedures regarding the subject matter of this Code of Conduct, and such policies and procedures are acceptable to Verdalia, its policies and procedures shall govern the different matters covered in this Code of Conduct).

Lastly, the Code of Conduct sets out Verdalia’s expectations of its Business Partners when they carry out their activities for or on behalf of the Organization.

4. OUR VALUES

4.1.- Honesty and Integrity

Correct and honest conduct, in line with our ethical commitments, protects and reinforces Verdalia’s reputation and credibility in the eyes of all our stakeholders and society as a whole.

To this end, all Members of the Organization and Intermediaries working for or on its behalf, must carry out their activities with honesty, responsibility, and integrity.

Under no circumstances will we tolerate conduct that involves dishonest actions or implies a conflict with Verdalia’s values and principles.

4.2.- Commitment to quality and professionalism

Providing quality services entails not only technical rigor in the professional’s activity, but also a constant commitment to responsibility, dedication, loyalty, and the pursuit of excellence.

This quality requirement demands that all Members of the Organization and Intermediaries receive adequate training in their respective areas of responsibility, so that our stakeholders can always obtain a valid and effective response in accordance with their needs.

Furthermore, all Members of the Organization and Intermediaries must diligently fulfil the tasks assigned or entrusted to them, trying to provide maximum value and always acting with a collaborative spirit.

4.3.- Respect and dignity towards people

Fairness, respect, and dignity towards people must permeate all relationships, both internal and external to the Organization, to preserve Verdalia’s image and reputation.

4.4.- Sustainability and Social growth

Verdalia develops its activities with a long-term vision, seeking a balance between the achievement of its corporate objectives, on the one hand, and sustainable development and social growth, on the other.

In particular, the Organization pays attention to respecting and safeguarding the environment and nature, promoting the responsible consumption of natural resources, aiming to protect the natural heritage for future generations.

Likewise, Verdalia seeks to constantly increase employment opportunities while respecting people and applicable labour legislation.

5. OUR PRINCIPLES

5.1.- Legal and ethical behaviour

Verdalia is committed to carrying out its activities in accordance with the laws in force in all countries and in all areas in which it operates.

Consequently, all Members of the Organization and Intermediaries must reject any illegal practice and shall commit to comply with applicable laws and regulations, as well as carrying out their professional tasks according to the ethical standards established in this Code.

5.2.- Accountability

Verdalia promotes the responsibility of each and every one of its Members of the Organization and Intermediaries in the development of their professional tasks, which is manifested through a duty of accountability and control of the actions performed.

5.3.- Non-discrimination and equal opportunity

Verdalia encourages the creation of a work environment where all people are treated fairly, in accordance with the principle of non-discrimination and equal opportunities.

Therefore, the Organization will not tolerate any discrimination based on birth, race, sex, sexual orientation, age, disability, religion, belief or opinion, marriage, or civil partnership status, or any other personal or social condition or circumstance.

5.4.- Confidentiality and duty of secrecy

All Members of the Organization and Intermediaries shall treat corporate documentation and information to which they have access, whether verbal or written, whether from clients, other Third Parties or relating to internal know-how, with absolute confidentiality and exclusively for Verdalia’s business purposes, and when applicable in compliance with any relevant agreements signed with Third Parties. Verdalia also expects its Business Partners to respect the Organization’s confidentiality and this duty also applies to all matters of which Business Partners are aware in connection with their work for Verdalia.

6. CORPORATE GOVERNANCE

Verdalia is committed to promoting and putting into practice the principles of good corporate governance, ensuring that corporate management is responsible, efficient, and transparent to achieve investors’ confidence and maximize value creation.

Such practices aim to ensure the basis for an effective corporate governance framework, where the competencies of the corporate bodies, the mechanisms for delegating competencies and the duties of information are clearly articulated and designed.

Likewise, they aim to control and mitigate business risks, to maximize shareholders’ value, and to promote cooperation between the Organization and its stakeholders, in line with our Values.

7. RELATIONSHIPS WITH STAKEHOLDERS

7.1.- Staff relations

Equal opportunity and harassment zero tolerance

Verdalia’s human resources processes, from selection and hiring, to promotion and professional development, must always comply with the principles of impartiality and equal opportunity. Any form of direct or indirect discrimination based on birth, race, sex, sexual orientation, age, disability, religion, belief or opinion, marriage, or civil partnership status, or any other personal or social condition or circumstance is strictly prohibited.

Likewise, Verdalia promotes dignity, equality, and respect for each individual, requiring all Members of the Organization to behave in accordance with these values and principles.

In addition, Verdalia rejects any behaviour or attitude that could violate the dignity of individuals or that, directly or indirectly, could constitute harassment, in any of its multiple forms.

Workplace health and safety

Verdalia is committed to protecting the safety, security, health and well-being of all Members of the Organization, Business Partners, and other persons visiting or working at its facilities.

To this end, all legal requirements relating to health and safety at work must be carefully observed, and appropriate preventive actions and plans to improve working conditions and reduce workplace risks should be designed and implemented.

Likewise, all Members of the Organization and Business Partners must comply with all applicable regulations, policies and procedures relating to workplace health and safety, to prevent and minimize risks in the workplace. They should make themselves aware of their health and safety responsibilities under this Code of Conduct and Verdalia’s policies. They should identify and mitigate hazards associated with their work and immediately stop any work that is unsafe, reporting any identified health and safety issues to a manager. They should ensure they are properly trained for the job, competent, medically fit and sufficiently rested.

Professional development and training

The Members of the Organization are one of Verdalia’s most important assets.

For this reason, we pay close attention to the improvement of human resources, and in our selection, recruitment, and professional development processes we have regard to the principles of loyalty, competence, dedication, and the pursuit of excellence, in accordance with our values of “Commitment to Quality and Professionalism” and “Honesty and Integrity”.

Use of corporate assets

All Members of the Organization, as well as its Business Partners, must diligently look after and conserve Verdalia’s assets, and use them exclusively for work purposes and in the manner intended. Verdalia’s assets include movable and immovable property, and tangible and non-tangible property, including facilities, equipment, real property, funds, intellectual and industrial property and proprietary information. Assets should not be destroyed, sold, loaned, or otherwise provided externally without approval.
Work equipment shall be used in accordance with the Organization’s policies and applicable workplace health and safety legislation.

Verdalia’s computer systems and programs must be used within the limits necessary for the execution of the activities and work of the Organization and in accordance with any applicable information security policies of the Organization.

Their access will be protected by a system of authorizations, and it is strictly forbidden to provide any other individual with personal access credentials to the computer systems.

Assets of Third Parties should also be respected. This means that physical assets should not be misused or damaged and non-physical assets such as trade secrets should not be infringed upon.

7.2.- Relations with Business Partners and clients

Verdalia maintains business relationships with counterparties of recognized reputation and experience. Verdalia’s reputation depends in part on its relationship with its Business Partners and clients and the activities of its Business Partners clients. Integrity, transparency, and mutual trust must prevail at all times, in compliance with applicable laws and the values and principles contained in this Code of Conduct.

7.3.- Relations with suppliers

Our goal is to ensure we acquire goods and services of the highest quality, always guaranteeing an adequate quality-price ratio and maintaining a level of total transparency and enhancing our reputation in our relations with suppliers.

Therefore, all those in charge of relations with suppliers must select them and manage the relationship with them according to criteria of objectivity, impartiality and avoiding situations of conflicts of interest.
Purchasing and procurement activities must be carried out in strict compliance with Verdalia’s rules and procedures. All decisions taken in this area must be justifiable and verifiable by Third Parties or by Verdalia’s own control functions. Members of the Organization and Intermediaries also have an obligation to protect commercially sensitive information relating to its supply chain.

All suppliers working with Verdalia must undertake to respect the labour rights of the employees they hire as well as involve and transmit these principles to their partners, collaborators, or sub-contractors. In particular, Verdalia opposes modern slavery in all its forms. We expect our suppliers and contractors to comply with all applicable laws and regulations regarding employment practices, to not use child, forced or involuntary labour in any form, to pay fair wages in line with applicable law and provide adequate rest periods and leave, and to provide a workplace free of direct or indirect discrimination, harassment or bullying, treating those who work for them with dignity and respect, promoting a safe environment.

7.4.- Relations with the Public Administration or Public Officials

The relations of all Members of the Organization and Intermediaries with Public Administrations and Public Officials shall be based on principles of legality, cooperation, and transparency, rejecting any type of conduct or practice aimed at improperly influencing official decision-making, obtaining or retaining undue advantages or otherwise ensuring any inappropriate benefit in the development of Verdalia’s activities.

For this reason, only Members of the Organization specifically designated and/or authorized to do so (and Intermediaries, only when authorised to do so by Verdalia, who may designate a Member of the Organization to be present at this meeting), shall deal with Public Administrations, Public Officials, or organizations that carry out activities of public utility or interest. They shall do so only in accordance with Verdalia’s Compliance Programme.

7.5.- Relations with Supervisory and Regulatory authorities

Verdalia’s relations with supervisory and regulatory authorities are based on an approach of maximum cooperation, fully respecting their institutional role and avoiding any behaviour that could hinder, limit, or mislead their activities. To that effect, Verdalia shall promptly apply any requirements and applicable control recommendations from such bodies.

7.6.- Relations with political parties and trade unions

Verdalia does not make contributions of any kind, directly or indirectly, to unions or political parties, federations, coalitions, or groups of voters.

Likewise, direct or indirect donations in favour of political representatives and candidates, companies, organizations, associations, foundations or groups of influence linked to political parties are prohibited, as well as donations in favour of unions, companies, organizations, associations, foundations or groups of influence linked to them.

7.7.- Relations with the press and other media

Actions performed through Verdalia’s communication channels or media (such as press, corporate website, social networks, etc.) must be inspired by the values of “Honesty and Integrity” and the principle of “Accountability”.

To this end, only authorized Members of the Organization can deal with the press and the media, and they shall respect and act in a manner consistent with the mentioned values and principles.

7.8.- Relations with local communities

Due to the nature of Verdalia’s business, all our projects have a strong local character.

Verdalia is aware of the importance for the local communities of the activities it carries out, given our ability to offer opportunities for growth in the industrial sector in which we operate.

Verdalia therefore seeks to create social value in all the projects we develop, by respecting and contributing to the development of the social and economic fabric of the local communities in which we operate, while always respecting and caring for the environment, health and safety of these communities.

7.9.- Relations with industry and professional associations

Membership of industry and professional associations is very important for the development of Verdalia’s projects and operations and for strengthening our reputation. However, to avoid any unethical or illegal practices, such memberships will only be permitted on condition that compliance with antitrust, free competition and other rules on specific issues is guaranteed in all respects.

8. STANDARDS OF CONDUCT

Accounting information integrity

Verdalia keeps orderly accounts in accordance with the principles of correctness, completeness, clarity, and transparency, and always complies with applicable fiscal and tax regulations.

Financial data must conform to applicable accounting rules and principles and must never be altered. Members of the Organization must report financial and non- financial information with honesty and accuracy to ensure business integrity. They must never falsify records or misrepresent facts. Such conduct may amount to fraud and result in civil or criminal liability.

All data created in the Organization must accurately reflect the transactions and events which have occurred. Verdalia has internal procedures directed at ensuring that each transaction is not only correctly recorded, but also authorized, verifiable, legitimate, coherent, and consistent.

Members of the Organization must, in line with those procedures, ensure that all financial transactions are evidenced by appropriate source documents, verified for their validity and accuracy, properly authorised, and accurately and completely recorded in the relevant accounts and records as required by law and this Code of Conduct. All contracts to which the Organization is a party must be made in writing, approved, signed, and recorded in accordance with applicable internal procedures. Records must be maintained for at least 5 years.

Everyone at Verdalia must cooperate with the Organization’s internal and external auditors and make all relevant information available to such auditors.

Data Protection

Verdalia respects confidentiality and maintains a strong commitment to protect the personal data collected for or in connection with its business activity, whether such data is held by its members, Business Partners, customers or Third Parties.

Therefore, Verdalia requires strict compliance with personal data protection legislation, in accordance with the provisions of Regulation (EU) 2016/679 (GDPR) and its equivalent in other jurisdictions applicable to Verdalia’s holding of personal data.

Intellectual and Industrial Property Protection

The protection of trademarks, patents, licenses and intellectual property belonging to Verdalia or Third Parties is very important to Verdalia’s business and any conduct aimed at their alteration and falsification, as well as their unauthorised reproduction, dissemination, sale or misuse is prohibited.

Free competition

Verdalia operates in the markets in a fair and transparent way, and in compliance with the principle of free competition.

In particular, the Organization is committed to complying with applicable antitrust regulations, requiring all Members of the Organization and Intermediaries to refrain from conduct that could prevent, restrict or distort competition in the market. Likewise, cartel activities and activities that give the appearance of participating in a cartel are strictly prohibited.

In line with the above, Verdalia is committed to acting in a fair and professional manner with competitors, rejecting any kind of deceptive or disrespectful advertisement.

Anti-corruption and Anti-Bribery

Verdalia takes a zero-tolerance approach to all forms of bribery and corruption. It is unacceptable for any Members of the Organization or Intermediaries to be involved in any way in corrupt practices. No one connected to Verdalia may offer or accept a bribe, Facilitating Payment or any other incentive which is intended to influence someone to perform a duty improperly, or to influence a Public Official in their official capacity, either directly or through a Third Party. No one connected with Verdalia may offer, provide, or accept any gifts, entertainment or other favours which are intended, or could reasonably be viewed, as a bribe.

More generally, Verdalia is committed to actively combatting any corrupt practices and to maintaining a level of total transparency in its relations with Public Officials, public authorities, Public Administrations, suppliers, customers and other Third Parties with whom it has or may have relations of any nature, either directly or indirectly. Our Anti-Corruption Policy sets out our expectations of the Members of the Organization and its Intermediaries, in relation to bribery and corruption.

Managing Conflicts of Interest

A Conflict of Interest exists when a Member of the Organization has personal, professional, financial, or other similar interests that could compromise or bias his or her professional judgement, loyalty, and objectivity as a Member of the Organization.

A situation of Conflict of Interest therefore arises when the interest that should guide the actions of an individual is replaced, altered, or influenced by a personal interest, with the result that the person’s actions, the performance of his/her duties, the exercise of his/her responsibilities and the decisions he/she takes may deviate from the criteria of objectivity and impartiality.

Therefore, the interest that should govern the performance of the Members of the Organization, that is, Verdalia’s interest, should never be opposed or compromised by a personal interest.

In line with the above, Members of the Organization must perform their functions and duties with absolute responsibility, transparency, loyalty, and the pursuit of excellence, as previously mentioned in our values and principles.

Prevention of money laundering and financing of terrorism

Verdalia acts with the utmost rigor to avoid any money laundering or terrorist financing operations, transactions, or activities, with a firm commitment to comply with all applicable national and international regulations in this area.

Therefore, all Members of the Organization must pay particular attention to possible cases where there are indications of a lack of integrity on the part of natural and legal persons with whom they have commercial or business relations and escalate these in line with Verdalia’s policies and procedures.

Corporate courtesy

Certain actions carried out improperly could give rise to corruption or bribery practices, based on the risk that, by means of these, an attempt may be made to influence the other party, modifying its will with the intention of obtaining from it an improper performance or benefit.

One of Verdalia’s unavoidable objectives is to actively fight any corrupt practice in which it might incur, which implies not only a violation, infraction, or breach of the law, but also a lack of alignment with the Organization’s ethical standards.

In line with the above, only business courtesy of modest value is permitted, and in any case such that it does not likely create, in the other party or in an outside and impartial third party, the impression that they are aimed at acquiring or granting undue advantages, or that they are likely to create in any case the impression of illegality or immorality.

Sponsorships and contributions must have a specifically established objective related to the Organization’s activity, the strengthening of its institutional relations, as well as its image and reputation.

Trade Controls & Sanctions

Verdalia recognises that trade controls and sanctions are important measures used by national authorities and supranational organizations, such as the UN and the EU, to target countries, organizations, groups, entities and individuals who infringe internationally accepted behaviours and norms.

Verdalia is committed to ensuring that our business is conducted in compliance with all trade and economic sanctions regimes applicable to us and to relevant stakeholders, as set out in our Compliance Programme, and therefore that we do not engage in prohibited conduct with people, entities or countries which are subject to sanctions.

Countering the facilitation of tax evasion

In line with our expectation of the highest standards of honesty and accountability, Verdalia takes a zero-tolerance approach to tax evasion and the facilitation of tax evasion. Verdalia complies with all applicable tax and fiscal rules, and also requires Members of the Organization and Intermediaries to not facilitate the criminal evasion of tax by others, such as suppliers, clients or other stakeholders.

9. SUPERVISION

Compliance Function

The Compliance Function appointed in the entities and companies integrated within Verdalia shall be responsible for supervising, monitoring and effectively controlling compliance with this Code of Conduct.

Communication of concerns and violations

Members of the Organization and Intermediaries must report any alleged or actual violation, infraction or non-compliance with applicable law, this Code of Conduct and other internal policies, procedures, rules and instructions that have been implemented at Verdalia.

Members of the Organization may also raise any doubts or concerns regarding the application or content of this Code or other internal policies, procedures, rules and instructions of the Organization.

Members of the Organization can escalate concerns about non-compliance or questions about Verdalia’s compliance requirements to their immediate supervisor or manager, or to any other manager, and/or to the Compliance Officer.

However, Verdalia also makes available to the Members of the Organization, Intermediaries and other Third Parties, a Whistleblowing Channel that is accessible via Verdalia’s website.

Where an infraction or non-compliance is related exclusively to one of the entities of Verdalia, it can be reported through its specific Whistleblowing Channel which is set out in the Whistleblowing Policy.
The Organization strictly prohibits any form of retaliation, discrimination, or other unfair treatment against those who report violations in good faith and against those who cooperate in an internal investigation procedure.

Retaliation, as well as the filing of complaints in bad faith, may lead to disciplinary action.

Disciplinary System

The violation, infraction or breach of the rules contained in this Code of Conduct, as well as in the rest of the Organization’s internal policies, procedures and regulations, shall entitle Verdalia to take appropriate disciplinary measures or (where relevant) initiate criminal actions against Members of the Organization, in accordance with the internal disciplinary regime and with the labour provisions that may be applicable in the different jurisdictions in which Verdalia operates.

Likewise, in relation to Intermediaries and other Third Parties with whom Verdalia maintains commercial relations, behaviour contrary to the values, principles and rules of conduct expressed in this Code of Conduct, and to the regulations in force, may be considered, in the most serious cases, as a breach of the Third Party’s duties of loyalty and contractual good faith. Therefore, Verdalia may engage appropriate civil, criminal or commercial measures in relation to such violations.

10. COMMUNICATION AND DISSEMINATION

Verdalia’s adherence to ethical principles, its reputation and image must be continuously protected. For this reason, it is essential to communicate, raise awareness of and observe the values, principles and standards of conduct contained in this Code of Conduct.

In this regard, Verdalia will inform all existing and future Members of the Organization and Intermediaries of the existence of this Code of Conduct, its contents, the mandatory nature of its observance and the consequences that may arise from its violation, infraction, or non-compliance.

This will ensure that all Members of the Organization, from the very moment of their incorporation, are aware of the values, principles and standards of conduct that must govern their actions and behaviour, remembering that they must be the first to set an example of consistency between the provisions of this Code of Conduct and their daily conduct.

To this end, this Code of Conduct will be communicated and disseminated to all Members of the Organization through digital distribution.

As leaders in the Organization, managers and supervisors are also expected to communicate the Code of Conduct to their teams. They must seek to prevent breaches of the Code of Conduct through strong leadership and by ensuring that Verdalia’s policies and related procedures are properly implemented and adhered to. Managers and supervisors will be held accountable where appropriate not only for their conduct, but also for the conduct of their employees.

11. TRAINING

The standards set forth herein will be incorporated into the content of our internal training plan to promote a corporate culture of respect for applicable laws, the Code of Conduct and other internal rules and policies of the Organization. This is expected to ultimately have a positive impact on our corporate health, the proper development of our business processes and, importantly, the maintenance of our corporate image and reputation with our stakeholders.

12. APPROVAL AND ENTRY INTO FORCE

This Code of Conduct was approved by the Board of Directors of Verdalia Bioenergy Limited on September [6], 2023 and shall enter into force from the day following its communication or dissemination to the Members of the Organization.