Logista Holdings

Annual / Quarterly Financial Statement • Nov 5, 2019

DECLARATION OF RESPONSIBILITY ON THE CONTENT OF THE

ANNUAL FINANCIAL REPORT

Members of Board of Directors of Distribución Integral Logista Holdings, S.A. declare that, to the best of their knowledge, the annual financial statements for 2019 (1 October 2018 - 30 September 2019), individual and consolidated, formulated by the Board of Directors at its meeting of October 29, 2019 and prepared in accordance with accounting principles that are applicable, provide a true and fair view of the equity, financial position and results of Compañia de Distribución Integral Logista Holdings, SA, as well as of the subsidiaries included in the consolidation taken as a whole, and that Directors' report, individual and consolidated (which include the non-financial information statement), include a fair analysis of the performance and results and the position of Compañía de Distribución Integral Logista Holdings, SA and of the subsidiaries included in the consolidation taken as a whole, as well as a description of the main risks and uncertainties they face ..

D. Gregorio Marañón y Bertrán de Lis	D. Luis Egido Gálvez
Chairman	Chief Executive
Mr. Alain Minc	Dª, Cristina Garmendia Mendizabal
Director	Director
D. Jaime Carvajal Hoyos	Mr. John Matthew Downing
Director	Director
Mr. Richard Guy Hathaway	Mr. Amal Pramanik
Director	Director
Mr. John Michael Jones	D. Rafael de Juan Lopez
Director	Director and Secretary of the Board

Leganes, 29 October 2019

Compañía de Distribución Integral Logista Holdings, S.A. and Subsidiaries

Independent Auditors' Report, Consolidated Financial Statements and Consolidated Directors' Report for the year ended 30 September 2019

Translation of a report originally issued in Spanish based on our work performed in accordance with the audit regulations in force in Spain and of consolidated financial statements orlginally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group in Spain (see Notes 2 and 31). In the event of a discrepancy, the Spanish-language version prevails.

Independent Auditors' Report on Consolidated Financial Statements

To the Shareholders of Compafila de Distribución Integral Logista Holdings, S.A. and Subsidiaries,

Report on the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Compania de Distribucion Integral Logista Holdings, S.A. (the Parent) and its subsidiaries (the Group), which comprise the consolidated balance sheet as at 30 September 2019, and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated statement of cash flows and notes to the consolidated financial statements for the year then ended ("2019").

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated equity and consolidated financial position of the Group as at 3D September 2019, and its consolidated results and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRSs) and the other provisions of the regulatory financial reporting framework applicable to the Group in Spain,

Basis for Opinion

We conducted our audit in accordance with the audit regulations in force in Spain. Our responsibilities under those regulations are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report.

We are independent of the Group in accordance with the ethical requirements, including those pertaining to independence, that are relevant to our audit of the consolidated financial statements in Spain, pursuant to the audit regulations in force. In this regard, we have not provided any services other than those relating to the audit of financial statements and there have not been any situations or circumstances that, in accordance with the aforementioned audit regulations, might have affected the requisite independence in such a way as to compromise our independence.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Deloltte, S.L. Registered office: Plaza Poblo Ruiz Picasso, 1, Torre Picasso, 28020 Madrid, Spain Tel .; +34 915 145 000 Fax: +34 915 145 180, www.deloitte.es Madrid Mercantle Register, volume 13,650, section B, sheet 188, page M-54414, entry no. 96 Registered in ROAC under no. S0692 - Employer Identification Number; 8-79104169.

PricewaterhouseCoopers Auditores, S.L., Torre PWC, Paseo de la Castellana 259 B, ZB046 Madrid, Spain Tel. 1 + 34 915 684 400 / + 14 902 021 111, Fax: + 34 915 685 400, www.pwc.es Madrid Mercantile Register, page 87.250-1, sheet 75, volume 9.267, book 8.054, section 3 Registered In ROAC under no. S0242 - Employer Tdentification Number; 8-79031290

1

Compañía de Distribución Integral Logista Holdings, S.A. and subsidiaries

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolldated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matters

How the Matters Were Addressed in the Audit

Recognition of tobacco sales revenue

Tobacco sales, which represent 95% of the Group's total sales, relate to the goods delivered, net of discounts, VAT, excise duties on tobacco products and other sales-related taxes.

Although the recognition of this revenue, under the Group's habitual terms and conditions, is not complex, it does involve the consideration of specific circumstances associated with the various conditions agreed with manufacturers and with the taxes and levies applicable in each jurisdiction.

There is an inherent risk associated with the timing of the recognition of this revenue, which depends on the distribution channels involved, the contractual terms and conditions under which the goods are sold, and the impacts that regulatory changes might have on sales (VAT, excise duties, vendor's commissions, etc.).

Accordingly, this matter was a key area in our audit.

Our audit procedures included checking the effectiveness of the controls over the sales-accounts receivable process and substantive procedures such :58

• · Checking the design, implementation and operating effectiveness of the relevant controls (including Information system controls) supporting the completeness of the sales, as well as the automatic sales invoice accounting and recognition procedure, for which purpose we involved our technology and systems specialists.
• · Analysing whether the revenue is properly recognised, taking into account the contractual terms and obligations vis-à-vis manufacturers and customers.
• · Evaluating the reasonableness of the sales volumes and margins for 2019 with respect to the trends in previous years, and checking these data against the information furnished by Internal Group and external sources.
• · Performing tests of details on a sample of recognised sales.
• · Performing combined manual and technology and systems expert-assisted tests in order to obtain and verify the entries recorded in the tobacco sales revenue and trade receivables accounts.

No material exceptions or misstatements were observed as a result of our procedures.

Notes 4.15, 23.a and 24 to the accompanying consolidated financial statements contain the disclosures and information relating to the Group's tobacco sales revenue.

Compañía de Distribución Integral Logista Holdings, S.A. and subsidiaries

How the Matters Were Addressed in the Audit Key Audit Matters

Legal proceedings

As detailed in Note 22 to the accompanying consolidated financial statements, the Group is involved in the following legal proceedings:

• · Proceeding relating to the Spanish National Markets and Competition Commission Decision of 10 April 2019 In relation to the enforcement proceedings concerning an alleged exchange by certain tobacco manufacturers of Information on the sale of cigarettes from 2008 to 2017.
• · Proceeding relating to the tax ("social contribution") levied in France on tobacco suppliers' sales for 2017 and 2018 in which on 15 October 2019 the Paris Commercial Court handed down Its first-instance decision on the claim brought by one of the tobacco manufacturers.

Note 22 to the accompanying consolidated financial statements discloses the amounts and significant information relating to these legal proceedings. Based on the Information available, and supported by its legal advisers, the Parent's directors have assessed the risk associated with each proceeding and they do not consider it likely that the final decisions handed down thereon will give rise to a negative impact on the Group's equity position as at 30 September 2019.

The final outcomes of these legal proceedings and, therefore, the ultimate impacts on the Group's equity position are uncertain. As a result, the Parent's directors made significant judgements and estimates when conducting their assessment. Consequently, we consider this area to be a key audit matter.

In response to this key audit matter, our audit Included, among others, the following procedures:

• · Oataining an understanding of the processes conducted by the Group to assess and classify the risk associated with the legal proceedings and the potential attendant impact on the consolidated financial statements,
• · Review of the relevant supporting documentation (legal and regulatory documents and agreements) on which the Group's legal position and the conclusions of the Parent's directors concerning the legal proceedings are based,
• · Obtainment of letters from the external legal advisers detailing the criteria and grounds for their conclusions concerning the legal proceedings that management used as support In order to draw conclusions on the assessment of the risk associated with each proceeding. Meetings were also held with those in charge of the Group's legal area and its legal advisers in order to obtain a greater understanding of their risk assessment.
• · Involvement of our legal experts, where deemed necessary, to evaluate the reasonableness of certain legal matters taken Into consideration in the assessment by the Parent's directors with support from the external legal advisers.

We consider that Note 22 to the accompanying consolidated financial statements contains the disclosures and information relating to this area of Interest

Compañía de Distribución Integral Logista Holdings, S.A. and subsidiaries

Key Audit Matters

How the Matters Were Addressed in the Audit

Impairment of goodwill and of other intangible assets

The consolidated balance sheet as at 30 September 2019 includes goodwill amounting to EUR 921 million resulting from corporate acquisitions, and other intangible assets with finite useful Ilves amounting to EUR 420 million, mainly associated with the distribution agreements with the main tobacco manufacturers In France.

The Group annually tests these assets for impairment. This impairment test was significant to our audit because management's assessment of possible impairment is a complex process that includes a significant level of estimates, fudgements and assumptions.

The main assumptions considered are: the discount rate, the short- and long-term growth rates, the changes in working capital and the estimated future margins, the future evolution of which will depend on market performance and the economic and regulatory conditions that arise in the various geographical segments -mainly France and Italy- with which the aforementioned assets are associated.

As described in Notes 7 and 8 to the consolidated financial statements, management concluded that, based on the sensitivity analyses performed by it separately for each of the assumptions considered, no Impairment losses would be disclosed.

Our audit procedures included, among others, the review of the relevant processes and controls implemented by the Company in order to assess the impairment of goodwill and other Intangible stappe

We reviewed the cash flow projections and the process used to prepare them, which included comparing the projections with the latest plans approved by the Board from which they are derived, and we obtained and re-performed the underlying calculations.

Also, we used valuation experts to assist us in evaluating the methodologies and assumptions used by the Group, in particular those permitting the calculation of the discount rates In the various areas, as well as the reasonableness of the growth rates, where appropriate.

For the aforementioned assumptions we reviewed the sensitivity analyses conducted by management. We consider the assumptions to be reasonable and conclude that management's approach is consistent and is supported by the available evidence.

Lastly, we focused our work on reviewing the disclosures made by the Group in relation to these assets, especially those relating to the sensitivity analyses of the key assumptions.

Notes 7 to the accompanying consolldated financial statements contain the disclosures relating to the Impairment tests performed on these assets and, In particular, the detail of the main assumptions used and the sensitivity analysis of changes in the key assumptions in the tests.

Compañía de Distribución Integral Logista Holdings, S.A. and subsidiaries

Other Information: Consolidated Directors' Report

Other information comprises only the consolidated directors " report, the formulation of which is the responsibility of the Parent company's directors and does not form an Integral part of the consolidated annual accounts.

Our audit opinion on the consolidated annual accounts does not cover the consolidated directors report. Our responsibility regarding the information contained in the consolidated direct leasts in is defined in the legislation governing the audit practice, which establishes two disUnct levels in this regard :

• a) A specific level applicable to the consolidated statement of non-financial information and certain information included in the Annual Corporate Governance Report, as defined in article 35.2 b) of Audit Act 22/2015, that consists of verlfying solely that the aforementioned information has been provided in the directors' report or, if appropriate, that the consolidated directors' report includes the pertinent reference in the manner provided by the legislation and if not, we are required to report that fact.
• b) A general level applicable to the rest of the information included in the consolidated directions' report that consists of evaluating and reporting on the consistency belween that information and the consolldated annual accounts as a result of our knowledge of the Group oblained during the audit of the aforementioned financial statements and does not Include information different to that obtained as evidence during our audit, as well as evaluating and reporting on whether the content and presentation of that part of the consolidated management report is in accordance with applicable regulations. If, based on the work we have performed, we conclude that material misstatements exist, we are required to report that fact.

On the basis of the work performed, as described above, we have ascertained that the information mentioned in paragraph a) above has been provided in the consolidated directors' report and that the rest of the information contained in the consolidated directors' report is consistent with that the reac of other monsolidated annual accounts for the 2019 financial year, and its content and presentation are in accordance with the applicable regulations.

Responsibilities of the Directors and of the Audit and Control Committee for the Consolidated Financial Statements

The Parent's directors are responsible for preparing the accompanying consolidated financial me Farent s on cately present fairly the Group's consolidated equity, consolidated financial position and consollidated results in accordance with EU-IFRSs and the other provisions of the position and consument applicable to the Group in Spain, and for such internal regulator y mation reported is necessary to enable the preparation of consolidated financial control as the uncession from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Parent's directors are responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters assessing the Group a dointy to ing the going concern basis of accounting unless the directors either Intend to Ilquidate the Group or to cease operations, or have no realistic alternative but to do so.

The Parent's audit and control committee is responsible for overseeing the process involved in the preparation and presentation of the consolidated financial statements.

Compañía de Distribución Integral Logista Holdings, S.A. and subsidiaries

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the audit regulations in force in Spain will always detect a material misstatement when it exists. Misstatements can arlse from fraud or error and are considered material If, IndivIdually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the audit regulations in force in Spain, we exercise. professional judgement and maintain professional scepticism throughout the audit. We also:

• · Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of Internal control.
• · Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
• · Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Parent's directors.
• · Conclude on the appropriateness of the Parent's directors of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainly exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modlfy our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• · Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• · Obtain sufficient appropriate audit evidence regarding the financial information of the entitles or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

Compañía de Distribución Integral Logista Holdings, S.A. and Subsidiaries

Consolidated financial statements for the year ended 30 September 2019 and consolidated Management Report

Translation of a report originally issued in Spanish based on our work performed in accordance with the audit regulations in force in Spain and of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 2 and 14). In the event of a discrepancy, the Spanish-language version prevails.

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS AT 30 SEPTEMBER 2019 AND 2018

(Thousands of Euros)

ASSETS	Notes	30-09-2019	30-09-2018	EQUITY AND LIABILITIES	Notes	30-09-2019	30-09-2018
NON-CURRENT ASSETS:		1,643,821	1,672,921			520,346	511,608
Property, plant and equipment	Note 6	213,492		203,531 Share capital	Note 13	26,550	26,550
Investment property		15,343		17,999 Share premium	Note 14	867,808	867,808
Goodwill	Note 7	920,800		920,800 Reserves of the Parent	Note 14	35,431	25,594
Other intangible assets	Note 8	457,050		505,210 Reorganisation reserves	Note 14	(753,349)	(753,349)
Investments in associates		2,715		2,118 Reserves at consolidated companies	Note 15	216,482	221,370
Other non-current financial assets	Note 9	15,390		4,634 Translation differences		(48)	35
Deferred tax assets	Note 19	19,031		18,629 Reserve for first-time application of IFRSs	Note 14	19,950	19,950
				Consolidated profit for the period		164,626	156,706
				Interim dividend	Note 14	(48,938)	(46,314)
				Treasury shares	Note 14	(9,893)	(8,348)
				Equity attributable to shareholders of the Parent		518,619	510,002
				Minority interests	Note 16	1,727	1,606
CURRENT ASSETS:		5,439,728	5,192,256
Inventories	Note 10	1,282,754		1,188,543 NON-CURRENT LIABILITIES:		308,876	322,750
Trade and other receivables	Note 11	1,913,694		1,846,246 Other financial non-current liabilities		3,305	4,146
Tax receivables	Note 19	19,680		83,533 Long-term provisions	Note 18	40,688	38,931
Other current financial assets	Note 9	2,050,521		1,910,934 Deferred tax liabilities	Note 19	264,883	279,673
Cash and cash equivalents	Note12	160,650	153,515
Other current assets		12,429		9,485 CURRENT LIABILITIES:		6,254,345	6,030,832
				Other current financial liabilities	Note 20	37,551	32,850
				Trade and other payables	Note 21	1,274,059	1,021,403
				Tax payables	Note 19	4,853,395	4,897,920
				Short-term provisions	Note 18	11,694	11,583
NON-CURRENT ASSETS HELD FOR SALE		18		13 Other current liabilities		77,646	67,076
TOTAL ASSETS		7,083,567	6,865,190	TOTAL EQUITY AND LIABILITIES		7,083,567	6,865,190

The accompanying Notes 1 to 31 and Appendix I and II are an integral part of the consolidated balance sheet at 30 September 2019.

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENTS FOR THE YEARS ENDED 30 SEPTEMBER 2019 AND 2018

(Thousands of Euros)

	Notes	2019	2018
Revenue	Note 23.a	10,148,323	9,476,484
Procurements		(8,999,337)	(8,358,300)
GROSS PROFIT		1,148,986	1,118,184
Cost of logistics networks:		(798,511)	(780,590)
Staff costs	Note 23.b	(186,335)	(174,671)
Transport costs		(249,247)	(241,044)
Provincial sales office expenses		(78,259)	(77,339)
Depreciation and amortisation charge	Notes 4.2, 6 and 8	(87,368)	(86,193)
Other operating expenses	Note 23.c	(197,302)	(201,343)
Commercial expenses:		(70,358)	(67,214)
Staff costs	Note 23.b	(46,076)	(44,136)
Other operating expenses	Note 23.c	(24,282)	(23,078)
Research expenses		(2,693)	(2,071)
Head office expenses:		(79,105)	(78,344)
Staff costs	Note 23.b	(58,141)	(58,299)
Depreciation and amortisation charge	Notes 4.2, 6 and 8	(1,541)	(1,878)
Other operating expenses	Note 23.c	(19,423)	(18,167)
Share of results of companies		1,249	1,014
Net gain on disposal and impairment of non-current assets	Notes 4.2, 6 and 8	4,772	(504)
Other expenses		(14)	-
PROFIT FROM OPERATIONS		204,326	190,475
Finance income	Note 23.e	15,012	14,275
Finance costs	Note 23.f	(2,239)	(1,587)
PROFIT BEFORE TAX		217,099	203,163
Income tax	Note 19	(52,337)	(46,707)
PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS		164,762	156,456
PROFIT FOR THE PERIOD		164,762	156,456
Attributable to:
Shareholders of the Parent-		164,626	156,706
Minority interests	Note 16	136	(250)
BASIC EARNINGS PER SHARE	Note 5	1.24	1.18

The accompanying Notes 1 to 31 and Appendix I and II are an integral part of the consolidated income statements for 2019.

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED 30 SEPTEMBER 2019 AND 2018

(Thousands of Euros)

	Notes	2019	2018
PROFIT FOR THE YEAR		164,762	156,456
Items that may be reclassified to income statement
Net actuarial gain (loss) recognised directly in equity	Note 18	(3,248)	234
Items that will not be reclassified to income statement
Foreign exchange rate changes		(83)	(55)
TOTAL NET GAIN (LOSS) REGISTERED DIRECTLY IN EQUITY		(3,331)	179
TOTAL NET GAIN (LOSS) CONSOLIDATED REGISTERED DURING THE YEAR		161,431	156,635
Attributable to:
Shareholders of the Parent		161,295	156,885
Minority interests		136	(250)
TOTAL ATRIBUTABLE		161,431	156,635

The accompanying Notes 1 to 31 and Appendix I and II are an integral part of the consolidated statement of comprehensive income for 2019.

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED 30 SEPTEMBER 2019 AND 2018

(Thousands of Euros)

							Reserve for				Equity
			Reserves		Reserves at		First-Time				Attributable
	Share Capital	Share Premium	of the Parent	Reorganisation Reserves	Consolidated Companies	Translation Differences	Application of IFRSs	Profit for the Year	Interim Dividend	Treasury Shares	to Shareholders of the Parent	Minority Interests	Total Equity
BALANCE AT 30 SEPTEMBER 2017	26,550	867,808	16,706	(753,349)	216,374	90	19,950	153,862	(39,708)	(7,716)	500,567	1,866	502,433
Net profit for 2018 attributable to the Parent	-	-	-	-	-	(55)	-	156,706	-	-	156,651	-	156,651
Loss attributable to minority interests	-	-	-	-	-	-	-	-	-	-	-	(250)	(250)
Actuarial losses	-	-	-	-	234	-	-	-	-	-	234	-	234
Income and expenses recognised in the period	-	-	-	-	234	(55)	-	156,706	-	-	156,885	(250)	156,635
Transactions with Shareholders:
Distribution of profit-
To reserves	-	-	10,142	-	4,762	-	-	(14,904)	-	-	-	-	-
To dividends	-	-	-	-	-	-	-	(138,958)	39,708	-	(99,250)	-	(99,250)
Dividends	-	-	-	-	-	-	-	-	(46,314)	-	(46,314)	-	(46,314)
On treasury shares operations (Note 14.b and 14.f)	-	-	(4,092)	-	-	-	-	-	-	(632)	(4,724)	-	(4,724)
Incentive Plan (Note 4.12)	-	-	2,838	-	-	-	-	-	-	-	2,838	-	2,838
Others	-	-	-	-	-	-	-	-	-	-	-	(10)	(10)
BALANCE AT 30 SEPTEMBER 2018	26,550	867,808	25,594	(753,349)	221,370	35	19,950	156,706	(46,314)	(8,348)	510,002	1,606	511,608
Adjustment IFRS 9 first adoption	-	-	-	-	(56)	-	-	-	-	-	(56)	-	(56)
BALANCE AT 1 OCTOBER 2018	26,550	867,808	25,594	(753,349)	221,314	35	19,950	156,706	(46,314)	(8,348)	509,946	1,606	511,552
Net profit for 20169attributable to the Parent	-	-	-	-	-	(83)	-	164,626	-	-	164,543	-	164,543
Loss attributable to minority interests	-	-	-	-	-	-	-	-	-	-	-	136	136
Actuarial losses	-	-	-	-	(3,248)	-	-	-	-	-	(3,248)	-	(3,248)
Income and expenses recognised in the period	-	-	-	-	(3,248)	(83)	-	164,626	-	-	161,295	136	161,431
Transactions with Shareholders:
Distribution of profit-
To reserves	-	-	10,164	-	(1,614)	-	-	(8,550)	-	-	-	-	-
To dividends (Note 14.e)	-	-	-	-	-	-	-	(148,156)	46,314	-	(101,842)	-	(101,842)
Dividends (Note 14.e)	-	-	-	-	-	-	-	-	(48,938)	-	(48,938)	-	(48,938)
On treasury shares operations (Note 14.b and 14.f)	-	-	(3,325)	-	-	-	-	-	-	(1,545)	(4,870)	-	(4,870)
Incentive Plan (Note 4.12)	-	-	2,998	-	-	-	-	-	-	-	2,998	-	2,998
Others	-	-	-	-	30	-	-	-	-	-	30	(15)	15
BALANCE AT 30 SEPTEMBER 2019	26,550	867,808	35,431	(753,349)	216,482	(48)	19,950	164,626	(48,938)	(9,893)	518,619	1,727	520,346

The accompanying Notes 1 to 31 and Appendix I and II are an integral part of the consolidated statement of changes in equity for 2019.

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED 30 SEPTEMBER 2019 AND 2018

(Thousands of Euros)

	Notes	2019	2018
OPERATING ACTIVITIES:		346,819	347,539
Consolidated profit before tax from continuing operations		217,099	203,163
Adjustments for-		94,079	92,117
Result of companies accounted for using the equity method		(1,249)	(1,014)
Depreciation and amortisation charge	Notes 6 and 8	89,152	88,184
Change in provisions		1,423	-
Provisions recognised/ (reversed)		19,249	14,368
Proceeds from disposal of non-current assets	Notes 6 and 8	(4,772)	504
Other adjustments		3,049	2,763
Financial profit		(12,773)	(12,688)
Net change in assets / liabilities-		35,641	52,259
(Increase)/Decrease in inventories		(97,258)	(68,720)
(Increase)/Decrease in trade and other receivables		(80,615)	(103,942)
Increase/(Decrease) in trade payables		249,758	(2,309)
Increase/(Decrease) in other current liabilities		(41,758)	312,779
Increase (Decrease) in other non-current liabilities		(2,845)	(1,702)
Income tax paid		(5,837)	(96,535)
Finance income and costs		14,196	12,688
INVESTING ACTIVITIES:		(190,281)	(145,952)
Payment for investment-		(195,560)	(146,794)
Property, plant and equipment	Note 6	(42,999)	(44,023)
Intangible assets	Note 8	(11,073)	(12,107)
Group companies and associates		(141,192)	(90,010)
Other current financial assets		(296)	(654)
Proceeds from financial divestments-		5,279	842
Property, plant and equipment	Note 6	500	788
Intangible assets		-	54
Non current assets held for sale		4,779	-
FINANCING ACTIVITIES:		(149,403)	(149,880)
Payment of dividends and remuneration of other equity instruments-		(150,781)	(145,564)
Dividends	Note 14.e	(150,781)	(145,564)
Proceeds and payments of equity instruments-		(3,554)	(3,366)
Acquisition of treasury shares		(3,554)	(3,366)
Proceeds and payments for financial liability instruments-		4,932	(950)
Repayment and amortization of-
Current borrowings		4,932	(950)
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS		7,135	51,707
Cash and cash equivalents at beginning of year-		153,515	101,808
Net change in cash and cash equivalents during the year		7,135	51,707
Total cash and cash equivalents at end of year		160,650	153,515

The accompanying Notes 1 to 31 and Appendix I and II are an integral part of the consolidated cash flow statement for 2019.

Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company in Spain (see Notes 2 and 14). In the event of a discrepancy, the Spanish-language version prevails.

Compañía de Distribución Integral Logista Holdings, S.A. and Subsidiaries

Notes to the annual consolidated financial statements for the year ended 30 September 2019

1. General information on the Group

Compañía de Distribución Integral Logista Holdings, S.A., hereinafter "the Parent company", was incorporated as a sociedad anónima (Spanish public limited company) on 13 May 2014, with its sole shareholder being Altadis, S.A.U., a company belonging to the Imperial Brands PLC Group. On 4 June 2014, the Company effected a capital increase with all shares subscribed by Altadis, S.A.U. through nonmonetary contribution of shares representing 100% of the share capital of Compañía de Distribución Integral Logista, S.A.U., until that time the parent company of the Logista Group, from then onwards, the Company became the Parent of the aforementioned Group.

The Company has registered office at Polígono Industrial Polvoranca, calle Trigo, no. 39, Leganés (Madrid), being the Parent of the Group, the operating company of which is Compañía de Distribución Integral Logista, S.A.U.

The offering of shares in the Parent Company came to an end on 14 July 2014, and its shares are currently listed for trading on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges.

The reporting period of most of the Group companies starts on 1 October of each year and ends on 30 September of the following year. The twelve-month period ended 30 September 2018 will hereinafter be referred to as "2018", the period ended 30 September 2019 as "2019", and so on.

The Group, a distributor and logistics operator, provides various distribution channels with a wide range of value added products and services, including tobacco and related tobacco products, convenience goods, electronic documents and products (such as mobile phone and travel card top-ups), drugs, books, publications and lottery tickets. The Group provides these services through a complete infrastructure network which spans the whole value chain, from picking to POS delivery.

Compañía de Distribución Integral Logista Holdings, S.A. is the head of a group of domestic and foreign subsidiaries that engage in various business activities and which compose, together with Logista Holdings S.A., the Logista Group (hereinafter "the Group").

A detail of the investees included in the scope of consolidation comprising the Logista Group at 30 September 2019 and 2018 is provided in Appendices I and II, which includes, inter alia, the percentage and cost of the ownership interest held by the Parent and the line of business, company name and registered office of each investee.

In turn, Altadis, S.A.U., the majority shareholder of the Parent, belongs to the Imperial Brands PLC Group. which is governed by the corporate legislation in force in the United Kingdom, and whose registered office is at 121 Winterstoke Road, Bristol, BS3 2LL (United Kingdom). The consolidated financial statements of the Imperial Brands PLC Group for 2018 were formally prepared by its Directors at the Board of Directors meeting held on 6 November 2018.

2. Basis of presentation of the financial statements and basis of consolidation

2.1 Authorisation for issue of the consolidated financial statements

These consolidated financial statements were formally prepared by the directors in accordance with the regulatory financial reporting framework applicable to the Group, which consists of:

• a. The Spanish Commercial Code and all other Spanish corporate law.
• b. International Financial Reporting Standards (IFRS), as adopted by the European Union, in conformity with Regulation (EC) no, 1606/2002 of the European Parliament and Law 62/2003, of 30 December, on Tax, Administrative, Labour and Social Security Measures.
• c. All other applicable Spanish accounting legislation.

The accompanying consolidated financial statements, which were obtained from the accounting records of the Company and of its subsidiaries, are presented in accordance with the regulatory financial reporting framework applicable to the Group and, in particular, with the accounting principles and rules contained therein and, accordingly, present fairly the Group's equity, financial position, results of operations and cash flows for 2019. These consolidated financial statements were formally prepared by the Board of Directors at its meeting on 29 October 2019. The directors of Compañía de Distribución Integral Logista Holdings, S.A. will submit these consolidated financial statements for approval by the Shareholders, and it is considered that they will be approved without any changes.

The consolidated financial statements for 2018 were formally approved by the General Shareholders' Meeting on 26 March 2019.

The principal accounting policies and measurement bases applied in preparing the Group's consolidated financial statements for 2019 are summarised in Note 4.

2.2 Standards and interpretations effective in the current period

In the year ended 30 September 2019 the following standards, amendments to standards and interpretations came into force:

Amendments to Standards	Content	Obligatory Application in Annual Reporting Periods Beginning On or After
IFRS 9, Financial Instruments. Hedge classification, measurement and accounting (last phase issued in July 2014)	Financial Instruments: Replaces the IAS 39 requirements relating to the classification, measurement and derecognition of financial assets and liabilities and hedge accounting.	1 January 2018
IFRS 15 – Revenue from Contracts with Customers (published in May 2014)	New income recognition standard (replaced IAS 11, IAS 18, IFRIC 13, IFRIC 15, IFRIC 18 and SIC-31).	1 January 2018
Amendments to IFRS 2, Classification and Measurement of Share-based Payment Transactions	Limited amendments clarifying specific issues such as the effects of vesting conditions on cash-settled share based payments, the classification of share-based payment transactions with net settlement features and accounting for a modification to the terms and conditions of a share based payment that changes the classification of the transaction from cash settled to equity-settled.	1 January 2018
Annual Improvements to IFRS Standards 2014-2016 Cycle	Minor changes to a series of standards.	1 January 2018

		Obligatory Application in Annual Reporting Periods Beginning On or
Amendments to Standards	Content	After
Amendment to IAS 40 Real Estate Investment Reclassification	The modification clarifies that a reclassification of an investment from or to real estate investment is only permitted when there is evidence of a change in its use	1 January 2018
Amendment to IFRS 4 Insurance contracts	Allows entities under the scope of IFRS 4, the option to apply IFRS 9 with certain exceptions or its temporary exemption.	1 January 2018
IFRIC 22 Transactions and advances in foreign currency	Establishes the date of transaction for the purpose of determining the exchange rate applicable in transactions with advances in foreign currency	1 January 2018

On 1 January 2018 the new IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers entered into force, which introduce changes in the accounting policies applied until that moment:

IFRS 9 – Financial Instruments

IFRS 9 establishes the requirements for the recognition, measurement, impairment, disposal of, and accounting for, general hedges.

In accordance with the transitional provisions of the standard, the Group has chosen the option allowing not to restate the 2018 figures presented for comparative purposes. The main impact of IFRS 9 on the Group was the recognition in the balance of the correction for impairment of other financial assets amounting to EUR 1,423 thousand (see Note 9).

In relation to the credit risk represented by trade receivables, the application of the new standard does not require a significant increase in the impairment losses recognised, since they are mainly current receivables with very low default rates and very short collection periods.

IFRS 15 – Revenue from Contracts with Customers

The objective of this standard is to determine the accounting treatment of revenue from the sale of goods and the provision of services to a customer.

In accordance with the transitional provisions of the standard, the Group has chosen the option that allows it not to restate the 2018 figures presented for comparative purposes. Group management analysed the impacts of this standard for each of the businesses and countries, identifying the related items and nature of the transfers of goods and services in each of the cases. The main conclusions are as follows:

• No lines of business were identified that would require the current revenue recognition criteria to be significantly amended.
• The presentation of the assets and liabilities in the consolidated income statements does not entail any significant changes to current presentation practices.
• No significant contracts with distinct performance obligations in force were identified at the date of application of the new standard that may present differences in treatment with respect to the criteria that the Group has been applying.

In consideration of these matters, the Group has concluded that its entry into force did not have a material effect on the consolidated financial statements.

In relation to the other standards indicated with effect from 1 October 2018, its application has not had a significant impact for the Group.

2.3 Standards and interpretations issued but not yet in force

At the date of preparation of these consolidated financial statements, the following standards and interpretations had been published by the IASB but had not become effective, either because their effective date is subsequent to the date of the consolidated financial statements or because they had yet to be endorsed by the European Union:

New Standards, Amendments to Standards and Interpretations	Content	Obligatory Application in Annual Reporting Periods Beginning On or After
IFRS 16 Leases (published in January 2016)	New standard on leases that replaces IAS 17. Lessees will include all leases on the balance sheet as if they were financial purchases.	1 January 2019
Amendments to IFRS 9, Prepayment Features with Negative Compensation (issued in October 2017)	These amendments will permit measurement at amortised cost of certain financial assets which may be put back to the issuer before maturity for an amount lower than the unpaid amounts of principal and interest on the principal amount outstanding.	1 January 2019
IFRIC 23, Uncertainty Over Income Tax Treatments (issued in June 2017)	This interpretation clarifies how to apply the recognition and measurement requirements in IAS 12 when there is uncertainty over whether the relevant taxation authority will accept a tax treatment used by an entity.	1 January 2019
Amendments to IAS 28, Long-term Interests in Associates and Joint Ventures (issued in October 2017)	Clarify that IFRS 9 should be applied to long term interests in an associate or joint venture to which the equity method is not applied.	1 January 2019
Improvements to IFRSs, 2015-2017 cycle (issued in December 2017)	Amendments to a series of standards.	1 January 2019
Amendments to IAS 19, Plan Amendments, Curtailments and Settlements (issued in February 2018)	Clarify how to calculate the current service cost and net interest for the remainder of the reporting period when there is an amendment, curtailment or settlement of a defined benefit plan.	1 January 2019
Amendments to IFRS 3, Definition of a Business (a)	The amendment narrowed and clarified the definition of a business	1 January 2020
Amendments to IAS 1 and IAS 8, Definition of "Material" (a)	IAS 1 and IAS 8 amendments to its definition of material to make it easier for companies to make materiality judgements.	1 January 2020
Amendments to IAS 9, IAS 7 and IAS 39 "Interest Rate Benchmark Reform"	The topic of these Amendments are Interest Rate Benchmark Reform	1 January 2020
IFRS 17, Insurance Contracts (issued in May 2017) (a)	IFRS 17 supersedes IFRS 4 and establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts issued to ensure that entities provide relevant and reliable information that gives a basis for users of the information to assess the effect that insurance contracts have on the financial statements.	1 January 2021

(a) Standards not yet adopted by the European Union.

The assessment made by the Parent's directors of the main effects that the application of the aforementioned standards might have on the accompanying consolidated financial statements is as follows:

IFRS 16, Leases

Almost all leases shall be recognised in the balance sheet, since the distinction between operating and finance leases is eliminated. Under the new standard, an asset (the right to use the leased item) and a financial liability for the lease payments are recognised. The only exceptions are short-term leases and leases for which the underlying asset is of low value.

The Group acts as a lessee in a very large number of lease agreements on various assets, mainly: warehouses, office buildings and transport elements. Under current standards, a significant part of these contracts is classified as an operating lease, with the corresponding payments being recorded on a linear basis over the term of the contract, generally.

The Group is currently in the process of estimating the impact of this new standard on these contracts. This analysis includes the estimation of the lease term, based on the non-cancelable period and the periods covered by the renewal options whose exercise is discretionary for the Group and it is considered reasonably true. Additionally, assumptions are used to calculate the discount rate, which will depend mainly on the incremental debt rate of the Group according to to the interest at the European Central Bank interest rate, plus a spread from 0.75% up to 2%. On the other hand, the Group will choose not to separately record the components that are non-lease components from those that they are, for those asset classes in which the relative importance of the non-lease components is not significant with respect to the total value of the lease.

IFRS 16 allows its application through two different transition methods, with a retroactive approach for each comparative period presented or a retroactive approach with the cumulative effect of the initial application of the standard on the date of its first application, not re-expressing the comparative figures. The Group will adopt this second transition method, so it will recognize the cumulative effect of the initial application of the new criteria in the first year of adoption of IFRS 16. Additionally, the new standard allows for certain practical solutions at the time of first application, relating to the valuation of the asset, discount rate, leases that end within twelve months after the first application, initial direct costs, and duration of the lease. The Group is evaluating which of these practical solutions will be adopted in each case.

Due to the different alternatives available, and considering the complexity of the estimates and the high number of contracts, the Group has not yet completed the implementation process. However, considering the volume of contracts affected, as well as the magnitude of the payments committed for rentals, the Group estimates that the amendments introduced by IFRS 16 will have a significant impact on the Group's financial statements from the date of adoption, including the recognition in the balance of the assets for right of use and the corresponding obligations in relation to most of the contracts that under current regulations are classified as operating leases. From the analysis performed, considering the current assumptions that result from application and based on the information available at the date of formulation of these interim financial statements, the Group estimates that the lease liability and the right of use to recognize as of 1 October 2019, date of first application of the standard, will be in an approximate EUR 170 million.

In addition, the depreciation of the right of use of the assets and the recognition of interest on the lease obligation will replace a significant part of the amount recognized in the income statement as operating lease expense under the current standard. The classification of lease payments in the statement of cash flows will be affected by the entry into force of this new regulation. The Group's financial statements will include more extensive disclosures with relevant information in relation to lease agreements

The Group is at a very advanced stage of the project to implement the new accounting policies; however, the impacts at 1 October 2019 could be slightly different due to the estimates required, the high number of leases concerned and the fact that the Group is in the process of implementing new information systems. The new accounting policies will not be definitive until the Group presents the first financial statements subsequent to the effective date of IFRS 16.

2.4 Information relating to 2018

As required by IAS 1, the information relating to 2018 contained in these notes to the consolidated financial statements is presented with the information relating to 2019 for comparison purposes and, accordingly, it does not constitute the Group's consolidated financial statements for 2018.

2.5 Presentation currency

These consolidated financial statements are presented in euros since this is the currency of the primary economic environment in which the Group operates. Transactions in currencies other than the euro are recognised in accordance with the policies described in Note 4.14.

2.6 Responsibility for the information and use of estimates

The information in these consolidated financial statements is the responsibility of the Parent's directors.

In preparing the consolidated financial statements for 2019, estimates were made by the Group's directors in order to measure certain of the assets, liabilities, income, expenses and obligations reported herein. These estimates relate basically to the following:

• The measurement and impairment of goodwill and of certain intangible assets.
• The assumptions used in the actuarial calculations of the pension liabilities and other obligations to employees.
• The useful life of the property, plant and equipment and intangible assets.
• The valuation of long-term incentive plans.
• The calculation of the required provisions, including litigations and fiscal risks.
• The measurement and calculation of deferred tax assets and liabilities.

Although these estimates were made on the basis of the best information available at 2019 year end, events that may take place in the future might make it necessary to change these estimates (upwards or downwards) in coming years. This would be done prospectively, recognising the effects of the changes in accounting estimates in the relevant future financial statements.

2.7 Basis of consolidation

2.7.1 Subsidiaries

Subsidiaries are defined as companies included in the scope of consolidation which the Parent manages directly or indirectly because it holds a majority of the voting rights in their representation and decisionmaking bodies or over which it has the capacity to exercise control.

The financial statements of the subsidiaries are fully consolidated. Accordingly, all material balances and transactions between consolidated companies are eliminated on consolidation.

Where necessary, adjustments are made to the financial statements of the subsidiaries to adapt the accounting policies used to those applied by the Group.

The share of minority interests of the equity and profit of the Group is presented under "Minority Interests" in the consolidated balance sheet and under "Profit/Loss for the Year Attributable to Minority Interests" in the consolidated income statement, respectively.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the date of acquisition or until the date of disposal, as appropriate.

2.7.2 Joint ventures and joint operations

"Joint ventures" are deemed to be ventures that are managed jointly by the Parent and third parties unrelated to the Group, where neither party can exercise greater control than the other. The financial statements of the joint ventures are proportionately consolidated.

In addition, a joint operation (unincorporated joint venture or "UTE") is a joint arrangement whereby the parties have rights to the corresponding assets, and liabilities, relating to the arrangement. Accordingly, the assigned assets and liabilities are presented by the Group in its consolidated balance sheet, in proportion to its ownership interest, and of the jointly incurred liabilities, classified according to their specific nature. Similarly, the Group's share of the income and expenses of joint ventures is recognised in the consolidated income statement on the basis of the nature of the related items. In addition, the proportional part corresponding to the Group of the related items of the joint venture is included in the statement of changes in equity and the statement of cash flows.

Where necessary, adjustments are made to the financial statements of these companies to adapt the accounting policies used to those applied by the Group.

2.7.3 Associates

Associates are companies over which the Parent is in a position to exercise significant influence. In general, significant influence is presumed to exist when the Group's percentage of (direct or indirect) ownership exceeds 20% of the voting rights, provided that it does not exceed 50%.

In the consolidated financial statements, investments in associates are accounted for using the equity method,(equity accounting) i,e, at the Group's share of net assets of the investee, after taking into account the dividends received therefrom and other equity eliminations.

In the case of transactions with an associate, the related profits and losses are eliminated to the extent of the Group's interest in the associate's capital.

Where necessary, adjustments are made to the financial statements of these companies to adapt the accounting policies used to those applied by the Group.

If as a result of losses incurred by an associate its equity were negative, the investment should be presented in the Group's consolidated balance sheet with a zero value, unless the Group is obliged to give it financial support, in which case the related provision would be recorded.

Since the activities of the associates are similar to the Group's habitual management and operations, the results of companies accounted for using the equity method are aggregated to profit or loss from operations.

2.7.4 Translation of foreign currency

The various items in the balance sheets and income statements of the foreign companies included in consolidation were translated to euros as follows:

• Assets and liabilities were translated to euros at the official year-end exchange rates.
• Share capital and reserves were translated to euros at the historical exchange rate.
• Income statement items were translated to euros at the average exchange rate for the year.

The exchange differences arising from the use of these criteria were included in equity under "Reserves at Consolidated Companies - Translation Differences". These translation differences will be recognised as income or expenses in the period in which the investment that gave rise to them is realised or disposed of in full or in part.

In 2019 all of the Logista Group companies presented their financial statements in euros, except for Compañía de Distribución Integral Logista Polska, Sp. z.o.o. and Logesta Polska Sp., z.o.o. (both located in Poland).

2.7.5 Changes in the scope of consolidation and in the ownership interests

The most significant changes in the scope of consolidation in 2019 are as follows:

On 14 March 2019 the subsidiary José Costa & Rodrigues, Lda. was merged by absorption into MIDSID – Sociedade Portuguesa de Distribuiçao, S.A., which gave rise to the dissolution of the former and transfer of the equity of José Costa & Rodrigues, Lda. to MIDSID – Sociedade Portuguesa de Distribuiçao, S.A., the absorbing company.

On 27 March 2019 the Extraordinary General Meeting of Logista Publicaciones approved the merger by absorption of the subsidiary Compañía de Integral Distribución de Publicaciones, S.L.U. (absorbing company) and Distribérica, S.A.U. (absorbed company), without liquidation and transmitting in block the equity from the absorbed to the absorbing company, which will be subrogated in all the rights and obligations. As a result, Distribérica, S.A.U. was declared dissolved and extinguished, without liquidation.

There were no changes in the scope of consolidation in 2018.

2.8 Materiality

In preparing these consolidated financial statements the Group omitted any information or disclosures which, not requiring disclosure due to their qualitative importance, were considered not to be material in accordance with the concept of materiality defined in the IFRS Conceptual Framework.

3. Distribution of profit of the Parent

The distribution of the profit for 2019, amounting to EUR 165,539 thousand, that the Parent's directors will propose for approval by the shareholders at the Annual General Meeting is as follows:

	Thousands of Euros
To voluntary reserves Dividends Interim dividend (Note 14-e)	9,074 107,527 48,938
	165,539

Pursuant to the legislation in force, the Parent assessed the liquidity statement on the date of approval of the interim dividend. Based on this assessment, on 23 July 2019 the Parent had EUR 102 million available for drawdown against the credit line granted by Compañía de Distribución Integral Logista, S.A.U. to the Parent (the drawable limit of which is EUR 115 million) of which the Parent has drawn down EUR 13 million.

4. Accounting principles and policies and measurement bases

The principal measurement bases and accounting principles and policies applied in preparing the consolidated financial statements for 2019 in accordance with the IFRSs in force at the date of the related financial statements are described below.

4.1 Property, plant and equipment

Property, plant and equipment are stated at acquisition cost less any accumulated depreciation.

The upkeep and maintenance costs of the various items of property, plant and equipment are recognised in the income statement as incurred. The amounts invested in improvements leading to increased capacity or efficiency or to a lengthening of the useful lives of the assets are capitalised.

In-house work on non-current assets is measured at accumulated cost (external costs plus in-house costs, determined on the basis of direct and general manufacturing costs).

The consolidated companies depreciate their property, plant and equipment using the straight-line method, applying annual depreciation rates determined on the basis of the years of estimated useful life of the related assets. The depreciation rates applied are as follows:

	Annual
	Depreciation
	Rates (%)
Buildings Plant and machinery Other fixtures, tools and furniture Other items of property, plant and Equipment	2 - 4 10 - 12 8 - 16 12 - 16

Land is considered to have an indefinite useful life and, therefore, is not depreciated.

4.2 Investment property

Investment property relates to investments in land and buildings held to earn rentals, Investment property is stated at the lower of cost, less any accumulated depreciation, and market value. Depreciation is recognised using the same methods as those used for items of the same category classified under "Property, Plant and Equipment".

In 2019, the investment property registered in the consolidated balance's amortisation amounted to EUR 317 thousand (2018: EUR 421 thousand). In addition, in 2019, EUR 243 thousand of amortisation of related elements are registered under "Research expenses" in the consolidated statements (2018: EUR 113 thousand).

Additionally, in 2019 a warehouse in Sintra (Portugal) was sold with a net book value of EUR EUR 2,384 thousand, which generated a positive impact of EUR 2,472 thousand.

The Group determines periodically the market value of its investment property by reference to the prices of comparable transactions, in-house studies, external appraisals, etc.

4.3 Goodwill

In the company acquisitions, the excess of the cost of the business combination over the interest acquired in the acquisition-date net fair value of the identifiable assets, liabilities and contingent liabilities is recognised as goodwill.

Goodwill is only recognised when it has been acquired for consideration.

Goodwill arising from the acquisition of an associate is recognised as an increase in the value of the investment.

Goodwill is not amortised. Accordingly, at the date of each consolidated balance sheet the related valuation adjustments are made to ensure that the carrying amount is not higher than fair value less costs to sell. If there is any impairment, the goodwill is written down and the impairment loss is recognised. An impairment loss recognised for goodwill must not be reversed in a subsequent period.

To perform the aforementioned impairment test, the goodwill is allocated in full to one or more cashgenerating units.

The recoverable amount of each cash-generating unit is the higher of value in use and the net selling price of the assets associated with the cash-generating unit. Value in use is calculated on the basis of the estimated future cash flows, discounted using a pre-tax discount rate that reflects market assessments of the time value of money and the risks specific to the business.

The Group has defined as cash-generating units, based on the actual management of the Group's operations, each of the relevant business operations carried out in the main geographical areas (see Note 24).

The Group uses the budgets and business plans, which generally cover a three-year period, of the various cash-generating units to which the assets are assigned. The key assumptions on which the budgets and business plans are built are based on each type of business and the experience with and knowledge of the performance of each of the markets in which the Group operates (see Note 7).

The estimated cash flows are extrapolated to the period not covered by the business plan using a zero growth rate and an expense structure that is similar to that of the last year of the business plan.

The discount rate applied is usually a pre-tax measurement based on the risk-free rate for 10-year bonds issued by the governments in the relevant markets, adjusted by a risk premium to reflect the increase in the risk of the investment based on the country in question and the systematic risk of the Group. The discount rates applied by the Group in the various markets to calculate the present value of the estimated cash flows ranged from 5.7% to 8.0% in 2019 (see Note 7).

4.4 Intangible assets

Intangible assets with finite useful lives are amortised using the straight-line method, applying annual amortisation rates determined on the basis of the years of the estimated useful lives of the related assets.

Intangible assets comprises:

Concessions, rights and licences

"Concessions, Rights and Licences" includes mainly the amounts paid to acquire certain concessions and licences. The assets included in this account are amortised on a straight-line basis over the term thereof.

Also, as a result of allocating the purchase price of Altadis Distribution France, S.A.S. to the identifiable assets and liabilities of that company in 2013, the Group recognised in its consolidated balance sheet the agreements entered into by that subsidiary with the main tobacco producers for the distribution of their products in France. The aforementioned distribution agreements are depreciated on a straightline basis over 15 years.

No legal, regulatory or other matters have arisen since the execution of the business combination that might significantly impact the renewal terms and conditions of the aforementioned agreements.

Computer software

Computer software is recognised at acquisition cost, including the implementation costs billed by third parties, and is amortised on a straight-line basis over a period of three to five years. Computer software maintenance costs are expensed currently.

Research and development expenditure

Research and Development expenditure is only capitalised when it is specifically itemised by project, the related costs can be clearly identified and there are sound reasons to foresee the technical success and economic and commercial profitability of the related project. Assets thus generated are depreciated on a straight-line basis over their years of useful life (over a maximum period of five years).

4.5 Impairment losses on property, plant and equipment and intangible assets

The Group assesses each year the possible existence of permanent losses in value requiring it to reduce the carrying amounts of its property, plant and equipment and intangible assets, if their recoverable amounts are below their carrying amounts.

The recoverable amount is determined using the same methods as those employed in testing for goodwill impairment (see Note 4.3).

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount, and the related write-down is recognised through profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the new recoverable amount, which may not exceed the carrying amount that would have been determined had no impairment loss been recognised.

4.6 Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the Group, which usually has the option to purchase the assets at the end of the lease under the terms and conditions agreed on execution thereof. All other leases are classified as operating leases.

4.6.1 Operating leases

In operating leases, the ownership of the leased asset and substantially all the risks and rewards relating to the leased asset remain with the lessor.

When the Group acts as the lessor, it recognises the operating lease income on a straight-line basis. The amount to be recognised on a straight-line basis is deemed to be the total minimum rental income forecast over the term of the contract, in accordance with the agreed terms and conditions. These assets are depreciated using a policy consistent with the lessor's normal depreciation policy for similar items for own use.

When the Group acts as the lessee, lease costs are recognised in the consolidated income statement on a straight-line basis, in accordance with the policies described above.

4.7 Non-current assets held for sale

Non-current assets are classified as held for sale if it is considered that their carrying amount will be recovered through a sale transaction. Assets are classified under this heading only when the sale is highly probable and the asset is available for immediate sale in its present condition and the sale is expected to be completed within one year from the date of classification.

Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.

The depreciation of non-current assets held for sale is discontinued when they are classified as such. At the date of each consolidated balance sheet the related valuation adjustments are made to ensure that the carrying amount is not higher than fair value less costs to sell.

4.8 Financial instruments

4.8.1 Financial assets

Financial assets are recognised in the consolidated balance sheet on the date of acquisition at fair value and are classified as:

Trade and other receivables

Trade and other receivables are measured at amortised cost less any recognised impairment losses, which are estimated based on the solvency of the debtor and the age of the receivables.

Other current and non-current financial assets

"Other Current and Non-Current Financial Assets" include the following investments:

• 1. Current and non-current loans granted.
• 1. Guarantees.
• 1. Deposits and other financial assets.
• 1. Financial assets classified as "held for sale".

The loans granted are measured at their amortised cost, which is understood to be the initial value thereof increased by accrued interest and repayment premiums based on the effective interest rate and decreased by the principal and interest repayments, while also considering possible reductions due to impairment or uncollectibility.

The changes in the amortised cost of the assets included under "Other Current and Non-Current Financial Assets" arising from accrued interest or premiums or from the recognition of impairment are recognised in the income statement.

Guarantees are measured at the amount paid which does not differ substantially from the fair value thereof.

Available-for-sale financial assets are measured at fair value and the gains and losses arising from changes in fair value are recognised in equity until the asset is disposed of or it is determined that it has become (permanently) impaired, at which time the cumulative gains or losses previously recognised in equity are recognised in the net consolidated profit or loss for the year.

Cash and cash equivalents

Cash consists of cash and demand deposits at banks, Cash equivalents are short-term investments with a maturity of three months that are not subject to a significant risk of changes in value.

The Group derecognises a financial asset when it matures and collection is made or when the rights to the future cash flows have been transferred and substantially all the risks and rewards of ownership of the financial asset have been transferred.

4.8.2 Financial liabilities

Bank borrowings

Bank loans are recognised at the amount received, net of arrangement costs and commissions. These loan arrangement costs and finance charges are recognised in the income statement using the accrual method and on a time proportion basis and are added to the carrying amount of the liability, to the extent that they are not settled, in the period in which they arise.

Trade payables

Trade payables are initially recognised at fair value and are subsequently measured at amortised cost.

The Group derecognises financial liabilities when the obligations giving rise to them cease to exist.

4.9 Inventories

The Group companies measure the tobacco inventories at the lower of the price of the most recent invoice, which does not differ significantly from applying the FIFO formula (first-in, first-out), including in the case of tobacco products, in accordance with the legislation applicable in each country, the excise duties chargeable as soon as they are accrued, and net realisable value.

The other inventories are measured at the lower of cost of purchase and net realisable value. Trade discounts, rebates and other similar items are deducted in determining the costs of purchase.

The Group recognises period provisions for the decline in value of inventories in order to adjust the value of those whose cost exceeds net realisable value. These valuation adjustments are recognised as an expense in the consolidated income statement.

4.10 Current/Non-current classification

In the consolidated balance sheet assets and liabilities due to be realised or settled or maturing within twelve months are classified as current items and those due to be realised or settled or maturing within more than twelve months as non-current items.

4.11 Termination benefits

Under current labour legislation and certain employment contracts, the Group companies are required to pay termination benefits to employees terminated under certain conditions.

The accompanying consolidated balance sheet at 30 September 2019 and 30 September 2018 includes the provisions that the Parent's Directors consider necessary to cover the restructuring plans in progress at year-end (see Note 18).

4.12 Pension and other obligations to employees

Certain Group companies are obliged to supplement the social security retirement, disability or death benefits to employees who have fulfilled certain conditions. In general, the obligations relating to the current and former employees of these groups are defined contribution obligations and are externalised. The annual contributions made by the Group to meet these obligations are recognised under "Staff Costs" in the consolidated income statements and amounted to EUR 2,079 thousand and EUR 2,586 thousand in 2019 and 2018 respectively (see Note 23.b).

Under the collective agreements currently in force, Compañía de Distribución Integral Logista, S.A.U. is obliged to make a lump-sum payment of a specific amount to each employee on completion of 24 years of service. Also, this Company is obliged to make fixed monthly payments to a certain group of current employees and employees who retired prior to 1 January 2009 as compensation for the "free tobacco" benefit.

Logista France, S.A.S. has retirement obligations to its employees for which it has made provisions calculated on the basis of actuarial studies using the projected unit credit method and PERM/F 2000P mortality tables, an inflation rate of 1.5% and an annual discount rate of 0.9% as the main assumptions (see Note 18).

On 4 June 2014 the Parent's Board of Directors approved the structure of the "2014 Long-Term Incentive Plan" and "2014 Long-Term Special Incentives Plan", with remuneration accrued from 1 October 2014 and maturing on 30 September 2019, which are articulated in three 3-year blocks with settlements made at the end of each block.

Under these plans, certain employees of companies of the Group of which the Company is Parent have the right to receive a certain number of Company shares, on completion of the third year from the commencement of the each of the three blocks into which the plans are divided, and taking into account the degree of achievement of certain internal criteria, of a financial and operating nature, as well as the total return for the shareholders and comparative profitability with other companies. For each of the aforementioned tranches, the estimated amount accrued annually is recorded in "Equity" in the consolidated balance sheet and its annual allocation is included in "Personnel Expenses" in the consolidated income statement.

On 29 January 2015 the Board of Directors approved the list of beneficiaries of the first block (2014- 2017) and corporated management estimated cost of the plans. There were 47 beneficiaries included in the General Plan and 10 in the Special Plan. The related amounted to EUR 2,856 thousand.

On 26 January 2016, the Board of Directors approved the second tranche of the 2014 Long-Term Incentive Plan (the 2017 General Plan and Special Plan) for the 2015-2018 vesting period. The beneficiaries of the second tranche numbered 50 for the General Plan and 10 for the Special Plan. The total estimated cost of the second tranche is EUR 2,491 thousand.

On 24 January 2017, the Board of Directors approved the third tranche of the 2014 Long-Term Incentive Plan (the General Plan and the Special Plan) for the 2016-2019 vesting period. The beneficiaries of the third tranche numbered 56 for the General Plan and 9 for the Special Plan. The total estimated cost of the third tranche is EUR 2,623 thousand.

On 20 December 2016 the Company's Board of Directors approved new long-term incentive plans for the 2017-2022 period, which will be divided into three three-year tranches, the first of which begins on 1 October 2017.

On 23 January 2018, the Company's Board of Directors approved the first tranche's (2017-2020) beneficiaries, being 58 the beneficiaries included in the General Plan and 9 the ones considered in the Special Plan. The total estimated cost for the first tranche amounts to EUR 2,933 thousand.

In order to cater for the equity-settled long-term 2014 incentive plan, and the 2017 incentive plan, by virtue of the authorisation granted by the Board of Directors, the Group acquired 747,461 treasury shares for EUR 15,110 thousand (see Note 14-f).

On 23 January 2018, the Board of Directors approved the settlement of the First Vesting Period (2014- 2017) of the General Plan and of the 2014 Special Plan. The settlement gave rise to the delivery of a total of 137,022 shares amounting to EUR 2,702 thousand to the beneficiaries of the two plans. The shares were delivered net of the related tax withholding. The Parent also delivered 1,454 shares amounting to EUR 28 thousand to a beneficiary of the plan. In 2017 24,189 treasury shares amounting to EUR 477 thousand were delivered to two beneficiaries.

The annual charge for the cost of the three tranches included under "Staff Costs" in the consolidated statement of profit or loss for the period ended 30 September 2019 amounted to EUR 2,998 thousand related to the third tranche of the 2014 Incentive Plan and to the first and second tranche of the 2017 Incentive Plan (2018: EUR 2,838 thousand relating to the second and third tranche of the 2014 Incentive Plan and first tranche of the 2017 Incentive Plan).

On 28 November 2017, the Parent's Board of Directors extended to 1 October 2018 the Parent's Extended Share Repurchase Programme (up to 560,476 shares, i.e. 0.42% of the share capital), to include them in the second and third tranches of the 2014 long-term incentive plan.

On 25 September 2018, the Company's Board of Directors extended the Company's Extended Share Repurchase Programme (for up to 641,372 shares, i.e. 0.48% of the share capital) until 1 October 2019, in order to assign the repurchased shares to the third tranche of the "2014 Long-Term Incentive Plan" and to the first tranch of the "2017 Long-Term Incentive Plan".

On 29 January 2019, the Board of Directors approved the settlement of the Second Vesting Period (2015-2018) of the General Plan and of the 2014 Special Plan. The settlement gave rise to the delivery of a total of 158,699 shares amounting to EUR 2,010 thousand to the beneficiaries of the two plans. The shares were delivered net of the related tax withholding.

Lastly, on 24 September 2019, the Parent's Board of Directors extended to 1 October 2020 the Parent's Extended Share Repurchase Programme (up to 681,013 shares, i.e. 0.51% of the share capital), in order to assign the repurchased shares to the third tranche of the "2014 Long-Term Incentive Plan" and to the first and second tranch of the "2017 Long-Term Incentive Plan".

4.13 Provisions and contingent liabilities

The Group recognises provisions for the estimated amounts required to cover the liability arising from litigation in progress, indemnity payments or obligations and collateral and other guarantees provided which are highly likely to involve a payment obligation (legal or constructive), provided that the amount can be estimated reliably.

Provisions are quantified on the basis of the best information available on the situation and evolution of the events giving rise to them and are fully or partially reversed when such obligations cease to exist or are reduced, respectively.

Also, the adjustments arising from discounting these provisions are recognised as a finance cost on an accrual basis.

Contingent liabilities represent potential obligations to third parties and existing obligations that are not recognised, given that it is not likely that an outflow of cash will be required to satisfy that obligation or, where applicable, the amount cannot be reasonably estimated. Contingent liabilities are not recognised in the consolidated statement of financial position unless they have been acquired in return for payment as part of a business combination.

4.14 Foreign currency transactions

The consolidated financial statements of Logista Group are presented in euros.

Transactions in currencies other than the euro are recognised at their equivalent euro value by applying the exchange rates prevailing at the transaction date. Any gains or losses resulting from the exchange differences arising on the settlement of balances deriving from transactions in currencies other than the euro are recognised in the consolidated income statement as they arise.

Balances receivable and payable in currencies other than the euro at year-end are measured in euros at the exchange rates prevailing on that date. Any gains or losses arising on such measurement are recognised in the consolidated income statement for the year.

4.15 Revenue and expense recognition

Revenue and expenses are recognised on an accrual basis, i.e. when the actual flow of the related goods and services occurs, regardless of when the resulting monetary or financial flow arises. Specifically, revenue represents the amounts receivable for the goods and services provided in the normal course of business, net of discounts, VAT, excise duty on tobacco products and other sales taxes.

As a result of the regulations of the main countries in which the Group operates, the Group makes payments to the relevant tax authorities in respect of excise duties on the tobacco products it sells, which are also charged to customers. The Group does not recognise as income or expenses the amounts relating to the aforementioned excise duties, which amounted to approximately EUR 30,777,519 thousand in 2019 and EUR 30,192,515 thousand in 2018.

In the particular case publishing sector, the customers are entitled to return the products they fail to sell and in turn, the Group may exercise this right with respect to its suppliers. At each reporting date, a provision is recognised based on the historical experience of the sales returns for the purpose of adjusting the margins obtained in relation to products that it is forecast will ultimately be returned (see Note 18).

In purchase and sale transactions on which the Group receives commission, regardless of the legal form of such transactions, only commission income is recognised, distribution and sales commissions are recognised in revenue. The Group recognises income and expenses on transactions involving products held on a commission basis (mainly stamps, certain tobacco and publishing business products) at the date of the sale.

Interest income from financial assets is recognised using the effective interest method and dividend income is recognised when the shareholder's right to receive payment is established. In any case, interest and dividends from financial assets accrued after the date of acquisition are recognised as income in the income statement.

4.16 Income tax

The current income tax expense is calculated on the basis of the accounting profit before tax, increased or reduced, as appropriate, by the permanent differences from taxable profit, net of tax relief and tax credits, the rates used to calculate the income tax expense are those in force at the consolidated balance sheet date.

Deferred tax assets and liabilities are recognised using the balance sheet method, recognising the differences between the carrying amount of the assets and liabilities in the financial statements and their corresponding tax bases.

Deferred tax assets and liabilities are calculated at the tax rates expected at the date on which the asset is realised or the liability is settled. Deferred tax assets and liabilities are recognised in full with a charge to the consolidated income statement, except when they relate to line items taken directly to equity accounts, in which case the deferred tax assets and liabilities are also recognised with a charge or credit to the related equity accounts.

Deferred tax assets and tax loss carryforwards are recognised when it is considered probable that the Group will be able to utilise them in the future, regardless of when they are recovered. Deferred tax assets and liabilities are not adjusted and are classified as non-current assets or liabilities in the consolidated balance sheet.

The Group recognises the deferred tax arising from the deductibility of the amortisation, for tax purposes, of certain items of goodwill generated on the acquisition of companies (see Note 19).

The deferred tax asset recognised is reassessed at the end of each reporting period and the appropriate adjustments are made to the extent that there are doubts as to their future recoverability. Also, unrecognised deferred tax asset is reassessed at the end of each reporting period and are recognised to the extent that it has become probable that they will be recovered through future taxable profits.

"Income Tax" represents the sum of the current tax expense and the result of recognising deferred tax assets and liabilities (see Note 19).

The Parent files consolidated income tax returns in Spain and is the ultimate parent of consolidated tax group no. 548/17.

4.17 Consolidated statements of cash flows

The following terms are used in the consolidated statements of cash flows, prepared in accordance with the indirect method, with the meanings specified:

• 1. Cash flows: inflow and outflows of cash and cash equivalents, which are short-term, highly liquid investments that are subject to an insignificant risk of changes in value.
• 1. Operating activities: the principal revenue-producing activities of the consolidated Group companies and other activities that are not investing or financing activities.
• 1. Investing activities: the acquisition and disposal of long-term assets and other investments not included in cash and cash equivalents.
• 1. Financing activities: activities that result in changes in equity and borrowings.

5. Earnings per share

Basic earnings per share are calculated by dividing the net profit attributable to the Group (after tax and minority interests) by the weighted average number of ordinary shares outstanding during the year, excluding the average number of treasury shares.

Earnings per share are calculated as follows:

	2019	2018
Net profit for the year (thousands of euros) Weighted average number of shares	164,626	156,706
issued (thousands of shares) (*)	132,269	132,336
Earnings per share (euros)	1.24	1.18

(*) On 30 September 2019, the Parent Company holds 486,013 own shares.

At 30 September 2019 and 2018, taking into consideration treasury shares, which are related to the long term incentive plans, the calculation of the diluted earnings per share would give a result of EUR 1.24 per share (EUR 1.18 at 30 September 2018).

6. Property, plant and equipment

6.1 Property, plant and equipment

The changes in "Property, Plant and Equipment" in the consolidated balance sheets in 2019 and 2018 were as follows:

2019

	Thousands of Euros
		Additions or
	Balance at	Charge for	Disposals or	Transfers	Balance at
	30/09/18	the Year	Reductions	(Note 8)	30/09/19
Cost:
Land and buildings	223,348	105	(261)	827	224,019
Plant and machinery	196,478	10,603	(7,815)	23,155	222,421
Other fixtures, tools and furniture	150,280	5,893	(6,876)	9,709	159,006
Other items of property, plant and equipment	36,366	209	(3,646)	1,507	34,436
Property, plant and equipment in the course of
construction	32,900	24,115	-	(37,405)	19,610
	639,372	40,925	(18,598)	(2,207)	659,492
Accumulated depreciation:
Buildings	(115,197)	(4,423)	180	(40)	(119,480)
Plant and machinery	(152,646)	(13,208)	2,842	157	(162,855)
Other fixtures, tools and furniture	(122,633)	(6,473)	6,661	(4,368)	(126,813)
Other items of property, plant and equipment	(26,628)	(1,639)	2,675	(2,363)	(27,955)
	(417,104)	(25,743)	12,358	(6,614)	(437,103)
Impairment losses	(18,737)	(960)	3,932	6,868	(8,897)
	203,531	14,222	(2,308)	(1,953)	213,492

2018

	Thousands of Euros
		Additions or
	Balance at	Charge for	Disposals or	Transfers	Balance at
	30/09/17	the Year	Reductions	(Note 8)	30/09/18
Cost:
Land and buildings	222,705	147	(1,119)	1,615	223,348
Plant and machinery	191,326	9,298	(6,710)	2,564	196,478
Other fixtures, tools and furniture	149,307	6,089	(8,154)	3,038	150,280
Other items of property, plant and equipment	37,267	279	(1,486)	306	36,366
Property, plant and equipment in the course of
construction	13,389	28,217	(14)	(8,692)	32,900
	613,994	44,030	(17,483)	(1,169)	639,372
Accumulated depreciation:
Buildings	(111,080)	(4,811)	777	(83)	(115,197)
Plant and machinery	(148,284)	(10,610)	6,241	7	(152,646)
Other fixtures, tools and furniture	(122,336)	(8,086)	7,764	25	(122,633)
Other items of property, plant and equipment	(25,599)	(1,289)	1,115	(855)	(26,628)
	(407,299)	(24,796)	15,897	(906)	(417,104)
Impairment losses	(19,075)	-	338	-	(18,737)
	187,620	19,234	(1,248)	(2,075)	203,531

Additions

In 2019 the Group recognised additions in relation to the construction of a new logistics platform in Coslada (Madrid), recognised under "Property, Plant and Equipment in the Course of Construction" in the accompanying consolidated balance sheet and to the development of computer systems infrastructure and to the acquisition of new semitraillers and vending machines

The other most notable additions in 2019 and 2018 are mainly related to projects currently underway in relation to safety systems at the warehouses and the development of information systems.

Disposals

In 2019 and 2018 the Group derecognised items no longer in use by the Group, many of which were fully depreciated.

Transfers

In 2019 and 2018 items of plant, machinery and other fixtures were mainly transferred within this line item from "Property, Plant and Equipment in the Course of Construction". Additionally, point of sale terminals have been transferred from "Inventories", as they have been leased by third parties.

Lastly, transfers have been made to "Other Intangible Assets" during the fiscal year when information system-related projects have been completed and come into service.

6.2 Other disclosures

Fully depreciated items of property, plant and equipment in use at 30 September 2019 amounted to EUR 317,762 thousand (EUR 303,369 thousand at 30 September 2018).

The Group has taken out insurance policies to cover the possible risks to which its property, plant and equipment are subject and the claims that might be filed against it for carrying on its business activities. These policies are considered to adequately cover the related risks.

At 30 September 2019 and 2018, the items of property, plant and equipment located abroad, mainly in Portugal, France, Italy and Poland, amounted to EUR 77,575 thousand and EUR 74,793 thousand, respectively.

7. Goodwill

Breakdown and significant changes

The breakdown, by identified cash-generating unit, of "Goodwill" at 30 September 2019 and 2018 is as follows:

	Thousands of Euros
		30-09-2019 30-09-2018
Italy, tobacco and related products	662,922	662,922
France, tobacco and related products	237,106	237,106
Iberia, transport	18,269	18,269
Iberia, other business: Pharma	486	486
Iberia, tobacco and related products	2,017	2,017
	920,800	920,800

Italy, tobacco and related products

The goodwill associated with Logista Italia, S.p.A. arose when Etinera, S.p.A., a leading tobacco distributor in Italy, was acquired in 2004 from BAT Italia, S.p.A., an Italian subsidiary of British American Tobacco, Lda. Subsequently, Etinera, S.p.A.'s company name was changed to Logista Italia, S.p.A. The information relating to the aforementioned acquisition is included in the Group's consolidated financial statements for 2004.

France, tobacco and related products

The goodwill associated with Logista France, S.A.S. arose on the acquisition by Compañía de Distribución Integral Logista, S.A.U. of all the shares representing the share capital of Altadis Distribution France, S.A.S. (actually Logista France, S.A.S) from Seita, S.A.S., which belongs to Grupo Imperial Brands Limited PLC. The information on this acquisition is included in the Group's consolidated financial statements for 2014 and 2013.

Iberia, transport

The goodwill associated with Dronas 2002, S.L.U, arose when this company merged in 2002 with the Burgal Group, an integrated and express parcel and pharmaceutical logistics service provider, and in 2003 with the Alameda Group, a distributor of pharmaceutical supplies and food products. The information relating to the aforementioned mergers is included in the Group's consolidated financial statements for 2002 and 2003.

Iberia, tobacco and related products

The goodwill associated with José Costa & Rodrigues, Lda. arose from the acquisition, on 13 February 2017, by MIDSID –Sociedade Portuguesa de Distribuiçao, S.A. of all the shares representing the share capital of the acquired company. In 2017 the Group provisionally recognised EUR 6,575 thousand as goodwill, the full amount of which was allocated to the vending channel of José Costa & Rodrigues, Lda. in 2018 under "Other Intangible Assets" in the accompanying consolidated balance sheet as at 30 September 2018.

Goodwill impairment analysis

The most relevant assumptions used in testing for impairment were as follows:

Discount and residual growth rates

	2019		2018
	Discount	Growth	Discount	Growth
	Rate	Rate	Rate	Rate
Italy, tobacco and related products France, tobacco and related products Iberia, transport Iberia, other business: Pharma Iberia, tobacco and related products	8.00% 5.70% 6.40% 6.40% 8.00%	0.00% 0.00% 0.00% 0.00% 0.00%	7.80% 6.50% 6.20% 6.20% 7.80%	0.00% 0.00% 0.00% 0.00% 0.00%

The parameters considered in defining the foregoing discount rates were as follows:

• Risk-free bonds: 10-year bonds in the benchmark market of the CGU.
• Market risk premium: year-on-year average risk Premium in each country in which the Group is presented.
• Unleveraged Beta: industry average, on a case-by-case basis.
• Debt/equity ratio: industry average.

Future changes in sales, procurements and working capital

The principal assumption considered in the business plans of the main cash-generating units to calculate the value in use of each unit consisted of the performance of sales and procurements, the percentage change in which over the three years of the business plan was estimated as follows:

	Average Performance 2020-2022
	Sales	Procurements
Italy, tobacco and related products France, tobacco and related products	8.1% (1.3%)	8.5% (1.4%)

In Italy, sales will perform positively as a result of the projected trend in tobacco prices and sales in order complementary business. With respect to procurements, the expected increase somewhat exceeds that of sales, as a result of the decrease in the provision of services to manufacturers.

As a result of the aforementioned trends, impairment of working capital for 2020-2022 was estimated to be 7% in the case of France and remains stable in the case of Italy.

In France the trend indicated arises as a result of the envisaged fall in sales volume due to future increases in RRPs, in line with the plans of the current French Government. However, an improvement in margins is expected as a result of the contracts entered into with the main suppliers.

Based on the methods used and the estimates, projections and valuations available to the Parent's directors, no impairment losses were recognised in relation to these assets in 2019 and 2018.

With regard to the sensitivity analysis of the impairment tests on goodwill, the Group performed an analysis of sensitivity of the impairment test result to changes due to increases of 100 basis points in the discount rate and negative changes of 100 basis points in the residual growth rate, along with more restrictive commercial hypothesis. This sensitivity analysis performed separately for each of the aforementioned assumptions did not disclose any impairment losses.

8. Other intangible assets

The changes in "Other Intangible Assets" in 2019 and 2018 were as follows:

2019

	Thousands of Euros
		Additions or
	Balance at	Charge for	Disposals or	Transfer	Balance at
	30/09/2018	the Year	Reductions	(Note 6)	30/09/2019
Cost:
I+D expenses	2,223	-	-	-	2,223
Computer software	187,434	359	(3,351)	16,692	201,134
Concessions, rights and licences	784,164	-	(53)	-	784,111
Advances and intangible assets in progress	11,678	10,714	-	(12,628)	9,764
	985,499	11,073	(3,404)	4,064	997,232
Accumulated amortisation-
I+D expenses	(2,192)	-	-	-	(2,192)
Computer software	(163,225)	(10,985)	3,345		(2,199) (173,064)
Concessions, rights and licences	(312,249)	(52,107)	53	-	(364,303)
	(477,666)	(63,092)	3,398		(2,199) (539,559)
Impairment losses	(2,623)	-	-	2,000	(623)
	505,210	(52,019)	(6)	3,865	457,050

2018

	Thousands of Euros
		Additions or
	Balance at	Charge for	Disposals or	Transfer	Balance at
	30/09/2017	the Year	Reductions	(Note 6)	30/09/2018
Cost:
I+D expenses	2,223	-	-	-	2,223
Computer software	187,681	392	(6,598)	5,959	187,434
Concessions, rights and licences	777,868	-	-	6,296	784,164
Advances and intangible assets in progress	3,666	11,717	-	(3,705)	11,678
	971,438	12,109	(6,598)	8,550	985,499
Accumulated amortisation-
I+D expenses	(2,192)	-	-	-	(2,192)
Computer software	(158,654)	(10,841)	6,525		(255) (163,225)
Concessions, rights and licences	(260,123)	(52,126)	-	-	(312,249)
	(420,969)	(62,967)	6,525		(255) (477,666)
Impairment losses	(2,623)	-	-	-	(2,623)
	547,846	(50,858)	(73)	8,295	505,210

Additions

The additions to "Other intangible assets" in 2019 and 2018 relate mainly to functional development projects for the Logista Group's existing applications to improve or increase the services provided to its customers and the implementation of new management systems (SAP) in certain business segments.

Transfers

The transfers to "Computer Software" in 2019 and 2018 relate to the reclassification of various items that have been put into operation from the account "Advances and intangible assets in progress" attending to their nature.

In 2018, following the completion of the identification of the intangible assets of the acquiree José Costa & Rodrigues, Lda., the Group provisionally recognised the full amount of the goodwill to the vending channel of José Costa & Rodrigues, Lda. under "Other Intangible Assets - Concessions, Rights and Licences" in the consolidated balance sheet.

Impairment

In 2019 and 2018 the Group did not recognise any impairment losses on items classified as "Other Intangible Assets".

Other information

On 30 September 2019 and 2018, the intangible assets in use that were completely depreciated amounted to EUR 140,106 thousand and EUR 135,435 thousand, respectively.

9. Financial assets

The detail of "Other Non-Current Financial Assets" and "Current Financial Assets" in the accompanying consolidated balance sheets at 30 September 2019 and 2018 is as follows:

2019

	Thousands of Euros
		Loans
		Granted to	Short-Term	Available
	Loans	Related	Deposits	for-Sale
Financial Assets:	Granted to	Companies	and	Financial
Nature/Category	Third Parties	(Note 26)	Guarantees	Assets	Total
Non-current:
Equity instruments	-	-	-	708	708
Financial debts (Note 18)	10,037	-	-	-	10,037
Other financial assets	162	-	4,483	-	4,645
	10,199	-	4,483	708	15,390
Current:
Financial debts	29,565	2,022,227	-	-	2,051,792
Impairment of financial debts	-	(1,423)	-	-	(1,423)
Other financial assets	-	-	152	-	152
	29,565	2,020,804	152	-	2,050,521
	39,764	2,020,804	4,635		708 2,065,911

2018

	Thousands of Euros
		Loans
		Granted to	Short-Term	Available
	Loans	Related	Deposits	for-Sale
Financial Assets:	Granted to	Companies	and	Financial
Nature/Category	Third Parties	(Note 26)	Guarantees	Assets	Total
Non-current:
Equity instruments	-	-	-	692	692
Financial debts	194	-	-	-	194
Other financial assets	-	-	3,748	-	3,748
	194	-	3,748	692	4,634
Current:
Financial debts	29,733	1,881,035	-	-	1,910,768
Other financial assets	-	-	166	-	166
	29,733	1,881,035	166	-	1,910,934
	29,927	1,881,035	3,914		692 1,915,568

Loans granted to third parties

The venturers of "UTE Compañia de Distribución Integral Logista, S.A.U. y IGT Spain Lottery, S.L.U. Unión Temporal de Empresas" granted a loan to this joint venture, which at 30 September 2019 totalled EUR 118,016 thousand, each assuming an equal portion. Compañía de Distribución Integral Logista, S.A.U. included an amount of EUR 29,504 thousand in this connection at 30 September 2019 (at 30 September 2018: EUR 29,704 thousand), and this amount is recognised under "Other Current Financial Assets" and "Other Current Financial Liabilities" in the accompanying consolidated balance sheet as at that date, for the balances receivable from and payable to the aforementioned joint venture that correspond to the other venturer (see Note 20).

This loan agreement has been subject to successive renewals and modifications, the last of which is in force until 31 December 2019, with a maximum limit of EUR 124 million, 50% of which from each venturer. The loan is interest free.

The main aggregates of the joint venture at 30 September 2019 were as follows:

	Thousands of Euros
	Assets	Liabilities	Equity	Loss for the Year
"UTE Compañia de Distribución Integral Logista, S.A.U. y IGT Spain Lottery, S.L.U. Unión Temporal de Empresas"	2,247	124,082	(121,835)	(1,568)

Credits granted to related parties

As of 12 June 2014, Imperial Brands Enterprise Finance Limited, Compañía de Distribución Integral Logista Holdings, S.A.U., Compañía de Distribución Integral Logista, S.A.U. and Logista France, S.A.S., entered into a mutual agreement for a five-year credit line (automatically renewable for one year, unless either of the parties sends a notice opposing such renewal at least one year prior to maturity), with a maximum draw down limit of EUR 2,000 million. As of 1 December 2015 the maximum draw down limit was increased to EUR 2,600 million. The purpose of this agreement is to govern the terms and conditions under which Logista will lend, on a daily basis, its cash surpluses to Imperial Brands Enterprise Finance Limited for the purpose of optimising its cash flow, and the loans from Imperial Brands Enterprise Finance Limited to Compañía de Distribución Integral Logista, S.A.U. in order for the latter to be able to meet its cash needs arising from its operations. In accordance with this agreement, Compañía de Distribución Integral Logista, S.A.U. will lend, on a daily basis, its cash surpluses to Imperial Brands Enterprise Finance Limited or will receive the cash necessary to meet its payment obligations.

On 21 March 2018, Imperial Brands Enterprise Finance Limited transferred the rights and obligations under the aforementioned credit line agreement to Imperial Brands Finance PLC., and the maturity was extended to 12 June 2024 (automatically renewable for additional one-year periods, unless notified otherwise by any of the parties at least one year before maturity) with a maximum drawdown limit of two thousand six hundred million euros. As of 30 September 2019 the outstanding balance amounts to EUR 2,022 million (30 September 2018: EUR 1,881 million).

The interest accrued on this credit line at 30 September 2019 amounted to EUR 14,489 thousand (30 September 2018: EUR 13,664 thousand) (see Note 26).

The daily balance of this internal current account has an equivalent cost to the interest at the European Central Bank interest rate, plus a spread of 0.75% for the credit provisions, and earn at the same reference rate, plus a spread of 0.75% for the surplus loans. Interest is calculated on a daily basis, based on 360 days, and is capitalised every quarter.

Under this agreement the Parent has undertaken to refrain from obtaining financing from third parties and from encumbering in any way its assets unless the aforementioned transaction is approved by a qualified majority of the Board of Directors.

10. Inventories

The detail of the Group's inventories at 30 September 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Tobacco	1,100,854	1,073,778
Published materials	12,083	12,039
Other merchandise	181,119	110,982
Write-downs	(11,302)	(8,256)
	1,282,754	1,188,543

The balance of tobacco inventories includes the excise duty chargeable to the tobacco items for the tobacco stock in the Group's warehouses at 30 September 2019, for a total amount of EUR 429,263 thousand (2018: EUR 458,777 thousand).

The write-down in year 2019 and 2018 relates mainly to tobacco inventories that were defective or that cannot be sold at year end, The changes in the write-downs relating to "Inventories" in the accompanying consolidated balance sheet were as follows:

	Thousands of Euros
Accumulated write-down at 30 September 2017	7,321
Period write-downs	5,208
Reversals	(2,409)
Amounts derecognised	(1,864)
Accumulated write-down at 30 September 2018	8,256
Period write-downs	5,727
Reversals	(3,846)
Amounts derecognised	1,165
Accumulated write-down at 30 September 2019	11,302

At 30 September 2019 and 2018, the Group had arranged insurance policies to cover the value of its inventories.

11. Trade and other receivables

The detail of "Trade and Other Receivables" in the accompanying consolidated balance sheets at 30 September 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Trade receivables for sales and services	1,742,897	1,706,046
Related companies (Note 26)	21,601	23,741
Sundry accounts receivable	201,792	169,242
Employee receivables	650	442
Less- Allowances for doubtful debts	(53,246)	(53,225)
	1,913,694	1,846,246

The changes in the "Allowances for Doubtful Debts" in 2019 and 2018 are as follows:

	Thousands of Euros
Allowance for doubtful debts at 30 September 2017	(52,191)
Period write-downs	5,131
Reversals	(3,234)
Reclasifications	(523)
Amounts derecognised	(340)
Allowance for doubtful debts at 30 September 2018	53,225
Period write-downs	2,590
Reversals	(2,064)
Reclasifications	(462)
Amounts derecognised	(43)
Allowance for doubtful debts at 30 September 2019	53,246

The additions to and reversals from the allowance for doubtful debts in 2019 and 2018 are recognised under "Cost of Logistics Networks - Other Operating Expenses" in the accompanying consolidated income statement.

At 30 September 2019 and 2018, the total amounts of balances provided are older than 90 days.

Trade receivables for sales and services

"Trade Receivables for Sales and Services" includes mainly the balances receivable from the sales of tobacco products, postage and other stamps relating basically to the final delivery of each year, which may be settled during the first days of the following year, including the excise duties and VAT associated with tobacco product sales which do not form part of revenue (see Note 4.15).

The credit period taken on sales of goods and services by territory ranges from 10 to 30 days. No interest is charged on the receivables for the first 30 days after the expiry date of the invoice. Thereafter, interest is generally charged at between 6.5% and 9% on the outstanding balance.

None of the clients supposes more than 5% of the trade receivable balances, so there is no clients' concentration risk.

The detail of the past-due receivables for which no allowance had been recognised at 30 September 2019 and 2018 is as follows:

		Thousands of Euros
Tranche	2019	2018
0-30 days	65,807	44,322
30-90 days	11,621	12,119
90-180 days	6,103	4,565
180-360 days	2,102	1,363
More than 360 days	5,915	670

The Group recognizes an allowance for doubtful debts based on seniority of the debt, unless there are additional guarantees of payment.

Sundry accounts receivable

"Sundry Accounts Receivable" caption includes mainly the balances receivable from manufacturers for the tax established in France described in Note 22. For the purposes of better understanding, in this connection EUR 63,428 thousand from 2018 were reclassified in these financial statements from "Trade Receivables for Sales and Services" caption to "Sundry Accounts Receivable" caption in order to make them comparable with those of the current year.

12. Cash and cash equivalents

"Cash and Cash Equivalents" in the consolidated balance sheets at 30 September 2019 and 2018 includes mainly the Group's cash deposited in current accounts at banks.

The average interest rate obtained by the Group on its cash and cash equivalent balances has been 0.00% in 2019.

13. Equity

At the end of 2019 and 2018 the Parent's share capital amounted to EUR 26,550 thousand and was represented by 132,750,000 fully subscribed and paid shares of EUR 0.2 par value each, all of the same class.

As indicated in Note 1, the Parent was incorporated on 13 May 2014, with a share capital of EUR 60 thousand, divided into 300,000 shares of EUR 0.20 par value each, all of which are of the same class and fully subscribed and paid in cash by its sole shareholder, Altadis, S.A.U.

On 4 June 2014, the sole shareholder approved the share capital increase through a non-monetary contribution of EUR 26,490 thousand, through the issue of 132,450,000 new shares of EUR 0.20 par value each, together with a total share premium of EUR 942,148 thousand. The shares issued were of the same class as the outstanding shares and were fully subscribed and paid by Altadis, S.A.U. through the contribution to the Company of 44,250,000 registered shares representing all of the share capital of Compañía de Distribución Integral Logista, S.A.U (Logista Group Partner Company until that moment). For these purposes, it should be noted that the aforementioned non-monetary contribution was subject to the required assessment by an independent expert appointed by the Mercantile Registry, pursuant to the Spanish Capital Companies Law consolidated text and the Mercantile Registry Regulations.

The offering of shares in the Parent Company came to an end on 14 July 2014, and its shares are currently listed for trading in the Continuous Market on Madrid, Barcelona, Valencia and Bilbao Exchanges.

On 31 July 2018, Altadis, S.A.U. sold 13,265,000 shares, representing 9,99% of the Parent's share capital.

The only shareholder with an ownership interest of 10% or more in the Parent's share capital at 30 September 2019 and 2018 is Altadis, S.A.U. with an ownership interest of 50,01%.

At 30 September 2019, all shares of the Parent have the same voting and dividend rights.

Capital Management

The main objectives of the Group's capital management are to ensure financial stability in the short and long term and the adequate funding of investments, keeping debt levels, all aimed at that the Group maintains its financial strength and soundness of their ratios so that it supports their business and maximizes the value for its shareholders.

At 30 September 2019, the Group had a net cash position amounting to EUR 2,173,620 thousand (30 September 2018: EUR 2,031,599 thousand), the detail being as follows:

	Thousands of Euros
	2019	2018
Other current financial liabilities (Note 20)	(37,551)	(32,850)
Gross debt	(37,551)	(32,850)
Other Current financial assets (Note 9)	2,050,521	1,910,934
Cash and cash equivalents	160,650	153,515
Financial assets and cash	2,211,171	2,064,449
Total net financial position	2,173,620	2,031,599

14. Reserves

a) Share premium

The Spanish Capital Companies Law expressly permits the use of the share premium account balance to increase the capital of the entities at which it is recognised and does not establish any specific restrictions as to its use.

b) Reserves of the Parent

Legal reserve

Under the Spanish Capital Companies Law, 10% of net profit for each year must be transferred to the legal reserve until the balance of this reserve reaches at least 20% of the share capital, The legal reserve can be used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased share capital amount, Otherwise, until the legal reserve exceeds 20% of share capital, it can only be used to offset losses, provided that sufficient other reserves are not available for this purpose.

On 30 September 2019 the Parent's legal reserve has reached the legally required minimum.

Other reserves

The capital increase expenses incurred by the Parent in 2014 in the transaction described in the "Share Capital" section, which were charged to reserves, amounted to EUR 176 thousand, net of the related tax effect. This line item also includes the annual charges for 2019 and 2018 relating to the Share Plan tranches, amounting to EUR 2,998 thousand and EUR 2,838 thousand, respectively (see Note 4.12).Additionally, in 2019 this line item includes an amount used on EUR 3,325 thousand to settle the Second Vesting Period (2015-2018) of the 2014 General Share Plan and the 2014 Special Share Plan.

In 2018 this line item included an amount used on EUR 4,064 thousand to settle the First Vesting Period (2014-2017) of the 2014 General Share Plan and the 2014 Special Share Plan and the settlement of a beneficiary for EUR 28 thousand.

c) Reorganisation reserve

This line item includes the net effect which arose in the Parent's reserves as a result of the corporate reorganisation that took place during the year 2014, as described in Note 1, in conformity with the regulatory financial reporting framework applicable to the Group.

d) Reserve for first-time application of IFRSs

As a result of the transition to International Financial Reporting Standards (IFRSs), the Group revalued a plot of land assigned to its operations by EUR 28,500 thousand, based on the appraisal of an independent valuer, considering the fair value of this plot of land to be the deemed cost thereof in the transition to IFRSs, The impact of this revaluation on reserves amounted to EUR 19,950 thousand.

e) Dividends

On 26 March 2019, the shareholders at the Parent's Annual General Meeting approved the distribution of the profit for 2018, which included an interim dividend out of the profit for that year, which had previously been approved by the Board of Directors and paid, amounting to EUR 46,314 thousand, together with a final dividend of EUR 101,842 thousand, paid on 29 March 2019.

On 23 July 2019, the Parent's Board of Directors approved the distribution of an interim dividend of EUR 0.37 per share out of the profit for 2019, totaling EUR 48,938 thousand, which was paid on 29 August 2019 (see Note 3).

f) Treasury shares

To cater of the long-term share-based incentive scheme and pursuant to the authorisation granted by the Board of Directors, the Group acquired 747,461 treasury shares for EUR 15,110 thousand.

In 2019, as a result of the settlement of the Second Vesting Period (2015-2018) of the General Share Plan and the 2014 Special Share Plan, 158,699 shares were delivered to the beneficiaries of the two plans for a total amount of EUR 2,010 thousand, and the balance recognised at 30 September 2019 was EUR 9,893 thousand.

In 2018, as a result of the settlement of the First Vesting Period (2014-2017) of the General Share Plan and the 2014 Special Share Plan, 137,022 shares were delivered to the beneficiaries of the two plans for a total amount of EUR 2,702 thousand; in addition, 1,454 shares were delivered to a beneficiary of the plan for a total amount of EUR 28 thousand.

In 2017, 24,189 treasury shares amounting to EUR 477 thousand were delivered to two beneficiaries.

15. Reserves at consolidated companies

The detail of "Reserves of Group Companies and Associates" in the consolidated balance sheets at 30 September 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Reserves in fully consolidated companies Reserves in companies consolidated by the equity method	217,501 (1,019)	222,751 (1,382)
	216,482	221,370

The reserves at consolidated companies include the retained earnings not appropriated at the beginning of the period relating to the consolidated companies and taking into account the consolidation adjustments.

16. Minority interests

The detail, by company, of "Minority interests" and "Profit/loss attributed to minority interests" in the consolidated balance sheets is as follows:

	Thousands of Euros
	2019		2018
		Income Atributable		Income Atributable
	Minority	To Minority	Minority	To Minority
Entity	Interests	Shareholders	Interests	Shareholders
Distribuidora Valenciana de Ediciones, S.A.	242	44	198	(148)
Terzia, S,p,A.	1,030	96	934	(191)
Distribución de Publicaciones Siglo XXI Guadalajara, S.L.	41	(2)	58	14
Distribuidora de Publicaciones del Sur, S.L.	255	(2)	257	75
Other entities	159	-	159	-
	1,727	136	1,606	(250)

17. Financial Risk Exposure

The management of the financial risks to which the Logista Group is exposed in the course of its business constitutes one of the basic pillars of its activities aimed at preserving the value of the Group's assets at all the business units and in all the countries in which it operates (mainly Spain, Italy, France, Portugal and Poland) and, as a result, the value of its shareholder's investments. The risk management system is structured and defined to achieve the strategic and operating objectives.

The Group's activities are exposed to various financial risks: market risk (including exchange risk), credit risk, liquidity risk and cash flow interest rate risk.

The Group's financial risk management is centralised in the Corporate Finance Division. This Division has the required mechanisms in place to control, based on the Group's financial position and structure and on the economic variables of the environment, the exposure to interest and exchange rate fluctuations and to the credit and liquidity risks, establishing the related credit limits and setting the policy for the doubtful debts allowance.

Credit risk

The Company's main financial assets are cash, loans to Group companies and trade and other receivables. In general, the Group holds its cash and cash equivalents at banks with high credit ratings. Also, the Group is exposed to the credit risk or counter-party risk of the group Imperial Brands Group, PLC, as a result of the cash transfer agreements entered into therewith.

The Group controls the risks of doubtful debts and default by setting credit limits and establishing demanding conditions with respect to collection periods; this commercial risk is distributed among a large number of customers with short collection periods and historically very low rates of non-payment and, therefore, the credit risk vis-à-vis non-Group third parties is not significant, due to the parties solvency.

The Group considers that at 30 September 2019 the level of credit risk is not significant, given the solvency of the counterparts.

Interest rate risk

In relation to its cash and cash equivalents and bank borrowings, the Group is exposed to interest rate fluctuations which might affect its profit and cash flows.

In accordance with the disclosure requirements of IFRS 7, the Group performed a sensitivity analysis in relation to the possible interest rate fluctuations which might occur in the markets in which it operates, Based on these requirements, the Group considers that each interest rate drop of 10 basis points would give rise to a decrease in the Group's finance income of EUR 1.9 million (2018: EUR 1.8 million)

Foreign currency risk

The level of exposure of equity and the income statement to the effects of future changes in the foreign currency exchange rates in force is not significant because the volume of the Group's transactions in currencies other than the euro is not material (see Note 25).

The Group does not have significant investments in foreign entities which operate in currencies other than the euro and it does not carry out significant transactions in countries whose currency is not the euro.

Liquidity risk

The Group has to meet payments arising from its activities, including significant amounts relating to excise duties and VAT.

Also, at 30 September 2019, the Group had a working capital deficiency amounting to EUR 814,617 thousand (30 September 2018: EUR 838,563 thousand). However, as a result of the difference between the average collection and payment, the Group generates sufficient liquidity to meet these payments.

In any event, the Group, for the purpose of ensuring liquidity and enabling it to meet all the payment obligations arising from its business activities, has the cash and cash equivalents disclosed in its consolidated balance sheet, together with the cash-pooling facilities with companies in the Group to which it belongs (see Note 9).

18. Provisions

The detail of the balance of short- and long-term provisions in the accompanying consolidated balance sheets at 30 September 2019 and 2018 and of the main changes therein in the periods is as follows:

2019

	Thousands of Euros
	Balance at			Provisions		Balance at
	30/09/2018	Additions	Reversions	Used	Transfers	30/09/2019
Excise duty and other assessments Obligations to employees	10,859 19,493	3,299 4,729	(3,224) (1,340)	(341) (1,178)	- (177)	10,593 21,527
Provision for contingencies and charges Other	5,908 2,671	1,972 77	(973) (7)	(830) -	(209) (41)	5,868 2,700
Non-current provisions	38,931	10,077	(5,544)	(2,349)	(427)	40,688
Provision for restructuring costs	4,821	8,196	(2,168)	(3,751)	-	7,098
Customer Refunds	2,162	3	(314)	-	-	1,851
Other	4,600	740	(1,308)	(1,424)	137	2,745
Current provisions	11,583	8,939	(3,790)	(5,175)	137	11,694

2018

	Thousands of Euros
	Balance at			Provisions		Balance at
	30/09/2017	Additions	Reversions	Used	Transfers	30/09/2018
Excise duty and other assessments	8,176	4,583	(1,900)	-	-	10,859
Obligations to employees	20,369	1,739	(1,399)	(877)	(339)	19,493
Provision for contingencies and charges	5,579	1,344	(190)	(825)	-	5,908
Other	2,562	-	(236)	-	345	2,671
Non-current provisions	36,686	7,666	(3,725)	(1,702)	6	38,931
Provision for restructuring costs	6,249	1,933	(162)	(4,654)	1,455	4,821
Customer Refunds	2,005	493	(175)	-	(161)	2,162
Other	5,474	745	(829)	(917)	127	4,600
Current provisions	13,728	3,171	(1,166)	(5,571)	1,421	11,583

Provision for excise duty on tobacco products and for other assessments

Compañía de Distribución Integral Logista, S.A.U. has recognised provisions for assessments as a result of audits by the Spanish customs authorities of the returns for excise tax on tobacco products for 2009 to 2010. The Company signed the assessments on a contested basis and filed appeals against them, however, it has recognised provisions for the possible deficiency and interest in this connection in order to cater for the possibility of unfavourable decisions being handed down on the appeals amounting to EUR 2,380 thousand.

In previous years, tax assessments were issued to Compañía de Distribución Integral Logista, S.A.U. in relation foreign trade activity settlements for years 2012-2016 amounting to EUR 13,642 thousand, which have been appealed. Of this amount, EUR 3,605 thousand have been guaranteed and the remaining amount has been paid to avoid the possible accrual of late payment interest Per the assessment made and corroborated by its external advisers, the existing arguments to defend the Company's actions in this regard are sound and should prevail in the courts, for which reason an outflow of financial resources is not considered probable and, consequently, the Group has not recognised a provision for the first tax assessment and has recognised the payment of the other years as an asset in the accompanying consolidated balance sheet as at 30 September 2019 (See Note 9). It is important to take into account that, by virtue of the agreements entered into by the Company, any impact arising from a possible increase in the tariff on the goods sold by the Company may be passed on to the supplier of the goods.

At the date of authorisation for issue of these consolidated financial statements for 2019, the aforementioned claims are at the Central Economic-Administrative Tribunal, which has yet to hand down a ruling. Said claim is expected to conclude in more than a year, reason for which a reclassification to "non-current assets" has been made.

As of September 30 2019, Logista Italia, S.p.A. has recognized a provision amounting to EUR 4,523 thousand as a result of the Italian tax authorities' open inspection.

Additionally, there are recognized provisions to cover existing risks related to other assessments.

Provisions for employee benefit obligations

This account includes mainly the present value of the obligations assumed by Compañía de Distribución Integral Logista, S.A.U. in terms of long-service bonuses and the "free tobacco" benefit and the provisions recognised by the Group companies to meet retirement obligations.

This provision was calculated on the basis of actuarial studies performed by independent experts using as their main assumptions PERM/F 2000P mortality tables, an inflation rate of 1.5% and an annual discount rate of 0.9% as the main assumptions. In 2019, the Group charged EUR 3,248 thousand to reserves (2018: a credit of EUR 234 thousand) corresponding to changes in the actuarial assumptions used to calculate the present value of the total obligation assumed by the Group.

In 2017, a provision of EUR 6,860 thousand was recognised as a result of a decision handed down by the Employment Tribunal of the National Appellate Court, which ordered that Compañía de Distribución Integral Logista, S.A.U. recognise the right of those employees formerly employed by Altadis, S.A.U. who had retired after 2005 to receive, once they had retired, the equivalent monetary value of the gift tobacco they would receive at present as active personnel. The Company appealed against this decision at the Supreme Court.

On 25 September 2019, the Supreme Court has dismissed the appeal, ordering Compañía de Distribución Integral Logista, S.A.U. to pay such right, without any additional risk to recognise.

Provision for restructuring costs

This account includes mainly the estimate of the payments to be made in relation to the restructuring plans that are being implemented at the Group. In 2019 and 2018, provisions were recognised amounting to EUR 8,196 thousand and EUR 1,933 thousand, respectively, and indemnity payments were made amounting to EUR 3,751 thousand and EUR 4,654 thousand, respectively, with a charge to the provisions that were recognised for that purpose.

These provisions were reclassified to current liabilities on the basis of the directors' estimates as to the dates on which these proceedings will come to an end.

Provisions for customer refunds

The customers of publishing sector are entitled to the refund of those products which are finally not sold, and the Group may in turn exercise this entitlement to a refund vis-à-vis its suppliers. At each year-end, the Group recognises a provision based on past experience of the refunds on sales with a view to correcting the margins obtained in the course of the book and publications sales activity.

Provisions for contingencies and charges

"Provision for Contingencies and Charges" includes mainly several lawsuits in process in which the Group is involved with third parties, as well as other third-party liability.

19. Tax matters

Consolidated Tax Group

In 2019, several of the Group companies filed consolidated tax returns with the Parent (see Note 4.16). The companies that file consolidated tax returns together with the Parent, for income tax purposes, are: Compañía de Distribución Integral Logista, S.A.U., Publicaciones y Libros, S.A.U., Distribuidora de las Rías, S.A.U., Logista-Dis, S.A.U., La Mancha 2000, S.A.U., Dronas, 2002, S.L.U., Logista Pharma Gran Canaria, S.A.U., Distribuidora de Publicaciones Siglo XXI Guadalajara, S.L., Logista Pharma, S.A.U., Cyberpoint, S.L.U., Distribuidora del Noroeste, S.L., Compañía de Distribución Integral de Publicaciones Logista, S.L.U., Distribuidora del Este, S.A.U., S.A. Distribuidora de Ediciones, Logesta Gestión de Transporte, S.A.U., and Be to Be Pharma, S.L.U.

In addition, Logista France, S.A.S., Société Allumetière Française, S.A.S., Supergroup, S.A.S. file consolidated income tax returns in France as part of the group headed by Logista France, S.A.S.

Logista Italia, S.p.A., Terzia, S.p.A. and Logesta Italia, S.r.l. file consolidated income tax returns in Italy as part of the group headed by Logista Italia, S.p.A.

Additionally, Compañía de Distribución Integral Logista, S.A. - Sucursal em Portugal, Midsid – Sociedade portuguesa de Distribuiçao, S.A. and Logista Transportes, Transitarios e Pharma, Lda, are taxed under a tax consolidation regime for Corporate Income Tax purposes in Portugal, being the head of said group Compañía de Distribución Integral Logista, S.A.-Sucursal in Portugal.

The Group's other subsidiaries file individual tax returns in accordance with the tax legislation in force in each country.

Years open for review by the tax authorities

Compañía de Distribución Integral Logista, S.A.U. has open for review by the tax authorities the years 2017 and 2018 for excise taxes and year 2018 for custom tax, being currently under review by the tax authorities year 2016 for excise taxes and year 2017 for custom tax.

The Parent Company and Compañía de Distribución Integral Logista, S.A.U. have currently under review by the tax authorities years 2013, 2014, 2015 and 2016 for income taxes, years 2014, 2015 and 2016 for withholding taxes and, additionally, for Compañía de Distribución Integral Logista, S.A.U. years 2013, 2014, 2015, 2016 and 2017 for value added taxes.

Logista Italia, S.p.A. has currently under review by the tax authorities years 2014 and 2015 for income taxes.

Logista France, S.A.S. has currently under review by the tax authorities years 2016, 2017 and 2018 for income taxes, value added taxes and other local taxes.

In general, the other consolidated companies have the last four years open for review by the tax authorities for the main taxes applicable to them, pursuant to the specific legislation of each country, and the last ten years for excise taxes in Italy.

The Company's Directors consider that the tax returns for the aforementioned taxes have been filed correctly and, therefore, even in the event of discrepancies in the interpretation of current tax legislation in relation to the tax treatment afforded to certain transactions, such liabilities that might arise would not have a material effect on the accompanying financial statements.

Tax receivables and payables

The detail of the tax receivables at 30 September 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Deferred tax assets: Provision for restructuring costs Goodwill Impairment losses and other Provision for third-party liability	557 1,815 4,003 10,467	1,167 1,842 1,750 10,734
Other deferred tax assets	2,189 19,031	3,136 18,629
Tax receivables (current): VAT refundable Income tax refundable Other	5,088 14,359 233	4,548 78,240 745
	19,680	83,533

The deferred tax assets relate mainly to provisions recognised for restructuring plans, termination benefits and obligations to employees that will become tax deductible in the coming years. Also, Law 16/2012, of 27 December, established for 2013 and 2014 a ceiling on the deductibility of the depreciation and amortization charge. Specifically, it was possible to deduct up to 70% of the depreciation and amortization charge, and the portion of the charge that was not deductible started to be deducted in 2017.

The detail of the tax payables at 30 September 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Deferred tax liabilities: Assets contributed by Logista Revaluation of land owned by the Parent (Note 14-d) Goodwill Business Combination Other	535 7,125 102,125 148,646 6,452	562 7,125 95,378 166,627 9,981
	264,883	279,673
Tax payables (current):
Excise duty on tobacco products VAT payable Customs duty settlements Income tax, net of prepayments Personal income tax withholdings Social security taxes payable Tax retention to tobacconists (France) Other	3,798,298 755,593 3,333 2,997 6,847 17,253 34,660 234,414	3,722,463 1,035,282 4,545 8,071 6,145 17,111 29,324 74,979
	4,853,395	4,897,920

Short-term balances include mainly the "Excise Duty on Tobacco Products" accrued by Compañía de Distribución Integral Logista, S.A.U., Logistra France, S.A.S. and by Logista Italia, S.p.A. and pending payment to the tax authorities.

The deferred tax liabilities arising from business combinations relate mainly to the tax effect of the recognition of the agreements with the tobacco manufacturers of the subsidiary Logista France, S.A.S., within the context of the acquisition of this subsidiary in 2013 (see Notes 4.4 and 8).

At September 30, 2019 the "Other items" in current tax payables caption includes an account payable with the French tax authorities for an amount of EUR 71 million (2018: 73 million), related to the social contribution accrued in year 2019 and up to September 30, 2019 (See Note 22).

Until 2011, each year Compañía de Distribución Integral Logista, S.A.U decreased its taxable profit by one twentieth of the implicit goodwill included in the acquisition price of its subsidiary in Italy. These reductions are considered to be temporary differences. On 30 March 2012, Royal Decree-Law 12/2012 came into force, introducing various tax and administrative measures aimed at reducing the public deficit. These measures include limiting the tax deductibility of such goodwill to 1% per year. Since 2017, the maximum tax credit is 5% per year.

Reconciliation of the accounting profit to the taxable profit

The reconciliation of the accounting profit before tax to the aggregate taxable profit and of the accounting profit before tax to the income tax expense resulting from the application of the standard tax rate in force in Spain for the years ended 30 September 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Accounting profit before tax	217,099	203,163
Permanent differences	(18,235)	(39,209)
Tax loss carryforwards compensation	(245)	-
Tax charge at 25%	49,655	40,989
Effect of different tax rates and changes thereto	6,197	13,476
Corporation tax adjustments	(4,460)	(9,100)
CVAE France	2,841	2,472
Reductions	(1,896)	(1,130)
Total income tax expense recognised in consolidated profit or loss	52,337	46,707

In 2018, the permanent differences include adjustments amounting to EUR 32 million relating to differences between the tax base and carrying amounts of assets spun off and received by the Logista Group, which, in previous years, paid the tax on the gain associated with these values. In 2018, conditions supporting the consideration of a portion of these gains as a negative permanent difference were disclosed, giving rise to a reduction of the taxable profit.

The Group is affected by the different income tax rates to which the Group companies' activities are subject:

• Spain: the current income tax rate is 25%.
• France: the current standard tax is 34.43%.
• Italy: the income tax rate is 24% and there is a supplementary business tax which can represent an additional 4.6%.
• Portugal: the income tax rate is 22.5%, and there is a supplementary business tax which can represent up to 4.5%, additionally, there is an obligation to make pre-payments even if an entity is reporting a loss.
• Poland: the income tax rate is 19%.

The breakdown of the income tax expense is as follows:

	Thousands of Euros
	2019	2018
Current tax: Continuing operations	65,717	66,103
Deferred tax: Continuing operations Tax adjustment and others	(13,886) 502	(19,103) (293)
Total tax expense	52,337	46,707

Changes in deferred tax assets and liabilities

The changes in deferred tax assets and liabilities in 2019 and 2018 are as follows:

2019

	Thousands of Euros
	Balance at	Change in		Balance at
	30/09/2018	Profit or Loss	Others	30/09/2019
Deferred tax assets:
Provision for restructuring costs	1,167	(543)	(67)	557
Goodwill	1,842	(27)	-	1,815
Impairment losses and other	1,750	2,261	(8)	4,003
Provision for third-party liability	10,734	162	(429)	10,467
Other deferred tax assets	3,136	(949)	2	2,189
	18,629	904	(502)	19,031
Deferred tax liabilities:
Assets contributed by Logista	(562)	27	-	(535)
Revaluation of land	(7,125)	-	-	(7,125)
Goodwill	(95,378)	(6,747)	-	(102,125)
Business combination	(166,627)	17,981	-	(148,646)
Other	(9,981)	(3,529)	-	(6,452)
	(279,673)	14,790	-	(264,883)

2018

	Thousands of Euros
	Balance at	Change in		Balance at
	30/09/2017	Profit or Loss	Others	30/09/2018
Deferred tax assets:
Provision for restructuring costs	1,182	(81)	66	1,167
Goodwill	1,875	(33)	-	1,842
Impairment losses and other	881	867	2	1,750
Provision for third-party liability	11,853	(1,130)	11	10,734
Other deferred tax assets	4,153	(1,021)	4	3,136
	19,944	(1,398)	83	18,629
Deferred tax liabilities:
Assets contributed by Logista	(589)	27	-	(562)
Revaluation of land	(7,125)	-	-	(7,125)
Goodwill	(88,763)	(6,737)	122	(95,378)
Business combination	(184,607)	17,980	-	(166,627)
Other	(17,884)	7,811	92	(9,981)
	(298,968)	19,081	214	(279,673)

The deferred tax liability caption includes mainly the deferrals associate.d with the business combinations and goodwill recorded by the Group. During fiscal year 2019 there have been variations to the corporate income tax for the year together with the effect of changes in the tax rate in various legislations.

Tax credit and tax loss carryforwards

At 30 September 2019, the Group had tax credits not yet used by the tax group amounting to EUR 1,870 thousand (30 September 2018: EUR 4,426 thousand), which had been earned as part of the previous tax group. These tax credits are recognised under "Other Current Financial Assets" (see Note 26).

The not capitalised tax loss carryforwards at the end of 2019 were basically as follows:

• Spain: the tax loss carryforwards amount to EUR 6,161 thousand and were incurred mainly by S.A.U. Distribuidora de Ediciones and Distribuidora Valenciana de Ediciones, S.A. There is no time limit for their offset.
• Portugal: the tax losses not yet offset amount to EUR 10 thousand and were incurred by Logesta Lusa Lda., being its limit for their offset the period 2026-2028.

20. Other current financial liabilities

This line item includes mainly the balance at Compañía de Distribución Integral Logista, S.A.U relating to the credit facility granted by it to "UTE Cía de distribución Integral Logista, S.A.U. y IGR Spain Lottery, S.L.U.", which amounted to EUR 29,504 thousand at 30 September 2019 (30 September 2018: EUR 29,704 thousand). This amount represents the balance payable by the Group to "Compañía de Distribución Integral Logista, S.A.U and GTECH Global Lottery S.L.U., Unión Temporal de Empresas" as a result of the account payable to the other venturer of the UTE assumed by the Group (see Note 9).

21. Trade and other payables

The detail of "Trade and Other Payables" in the accompanying consolidated balance sheet at 30 September 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Accounts payable for purchases and services Notes payable Payable to related companies (Note 26) Advances received on orders	1,020,391 26,025 227,229 414	813,354 24,404 183,511 134
	1,274,059	1,021,403

Trade and Other Payables" includes mainly the amounts outstanding for trade purchases and related costs. The average payment period for trade purchases in 2019 and 2018 was approximately 35 days.

22. Guarantee commitments to third parties and other information

At 30 September 2019, the Group has been provided with bank guarantees totalling EUR 157,284 thousand (30 September 2018: EUR 150,492 thousand) which, in general, secure the fulfilment of certain obligations assumed by the consolidated companies in the performance of their business activities.

Also, the Group has provided guarantees for its ordinary trading operations; in this regard, the Parent's directors consider that any liabilities not foreseen at 30 September 2019 that might arise from the aforementioned guarantees would not in any event be material.

At 30 September 2019, the Group had taken out insurance policies to cover possible contingencies for transport and storage in factories and representative offices, fire and third-party liability for all its work centres. The insured sum adequately covers the aforementioned assets and risks.

Other Information

On 20 June 2017, the Spanish National Markets and Competition Commission (CNMC) resolved to commence enforcement proceedings against several companies, including Compañía de Distribución Integral Logista, S.A.U., for possible anti-competitive behaviour in the Spanish cigarette manufacturing, distribution and retail sale market.

On 12 April 2019, the Board of the CNMC issued its Decision of 10 April 2019 in relation to the enforcement proceedings concerning an alleged exchange by certain tobacco manufacturers of information relating to the sale of cigarettes from 2008 to 2017. Logista provided the aforementioned information in compliance with the principles of neutrality and non-discrimination.

The CNMC considers expressly in the aforementioned decision that the aim of the conduct in question was not to restrict competition and, therefore, it could not be classified as constituting a cartel. However, the CNMC imposed a penalty of EUR 20.9 million on Logista because it considered that such conduct was restrictive due to its, albeit potential, effects on the cigarette manufacturing and sale market. The CNMC did not substantiate or evidence that Logista's sales information had given rise to the alleged restriction of competition between the manufacturers attributed to it.

Logista evidenced that the aforementioned information, which is free, was made available to all manufacturers that distributed their products through Logista, with the lawful purpose of such manufacturers being able to verify Logista's strict compliance with the principle of neutrality when performing its activities as a wholesale distributor in the tobacco market.

Therefore, the Parent's directors, supported by its legal advisers, believe that the Decision, which is not final, is unlawful; at the date of authorisation for issue of these financial statements an appeal for judicial review had been lodged at the Spanish National Appellate Court against the Decision, which is not expected to impact the Group's equity position.

Also, in 2017 France established a tax of 5.6% levied on tobacco suppliers' sales. This tax was initially paid by Logista France, S.A.S. to the French authorities and subsequently rebilled to the tobacco manufacturers, certain of which refused to make the related payment; the amount receivable in connection with the tax for 2017 and 2018 totals EUR 118 million, while the unbilled accrued amount of the tax for the first 9 months of 2019 amounts to EUR 71 million (see Note 19). Logista France, S.A.S. decided to withhold the equivalent amount of the invoices received from those manufacturers. In this context, the Group received claims for EUR 39 million and EUR 3 million, respectively, from two tobacco manufacturers.

On 15 October 2019, the Paris Commercial Court issued the decision on the claim lodged by one of the tobacco manufacturers, in which it ruled that Logista France, S.A.S. had to pay the invoices received from the manufacturer for EUR 39 million, corresponding to the tax for 2017 and 2018. Logista and its legal advisers consider that the decision is an erroneous interpretation of the principles and agreements between Logista and the manufacturer and, furthermore, consider that the aforementioned Court did not take into consideration the arguments put forward by Logista in relation to the agreement and the nature of the tax, and Group is therefore evaluating the legal actions to lodge. On the basis of the information available, the negotiations and communications that have taken place with the manufacturers and also the assessment of its legal advisers, the Parent's directors consider that this matter will not have any impact on the Group's equity position.

23. Income and expenses

a) Income

The detail of "Revenue" in the consolidated income statements for 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Iberia	3,157,395	2,812,642
Italy	2,961,607	2,688,081
France	4,069,467	4,021,604
Corporative	9,149	8,495
Adjustment due to inter-segment sales	(49,295)	(54,338)
	10,148,323	9,476,484

b) Staff costs

The detail of the Group's "Staff Costs" in 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Wages and salaries	(200,049)	(196,855)
Termination benefits	(10,303)	(3,301)
Employer social security costs	(64,638)	(62,847)
Other employee benefit costs (Note 4.12)	(2,079)	(2,586)
Other social costs	(14,858)	(12,894)
		(291,927) () (278,483) ()

(*) "Research Expenditure" includes EUR 1,375 thousand and EUR 1,377 thousand of staff costs in 2019 and 2018, respectively.

The average number of employees at the Group, by professional category, in 2019 and 2018, as well as the number of employes as of 30 September 2019 and 30 September 2018 was as follows:

2019

	Number of Persons
	Average Headcount			Headcount at 30/09/19
			Permanent Employees Temporary Employees		Permanent Employees		Temporary Employees
Category	Men	Women	Men	Women	Men	Women	Men	Women
Management	20	2	-	-	20	2	-	-
Line personnel and clerical staff	1,583	1,270	188	171	1,595	1,260	182	188
Messengers	1,566	550	363	205	1,560	548	426	199
	3,169	1,822	551	376	3,175	1,810	608	387
	4,991		927		4,985		995

2018

	Number of Persons
	Average Headcount					Headcount at 30/09/18
			Permanent Employees Temporary Employees		Permanent Employees		Temporary Employees
Category	Men	Women	Men	Women	Men	Women	Men	Women
Management Line personnel and clerical staff	19 1,557	2 1,222	- 193	- 166	19 1,547	2 1,256	- 206	- 166
Messengers	1,556 3,132	558 1,782	358 551	172 338	1,564 3,130	558 1,816	354 560	147 313
	4,914		889		4,946		873

The average number of disabled employees with a handicap higher than 33% at the Group in 2019 and 2018 was as follows:

Category	2019	2018
Management Line personnel and clerical staff Messengers	- 15 48	1 14 44
	63	59

Remuneration of senior executives

The senior executive functions are discharged by members of the Management Committee, which consists of 11 members.

The remuneration accrued in 2019 by the members of the Management Committee of the Group amounted to EUR 4,583 thousand (2018: EUR 5,463 thousand). The aforementioned amounts include the amounts vested in the members of the Management Committee in 2019 and 2018 under the incentive plan described in Note 4.12.

The period contributions to the savings schemes for members of the Management Committee for 2019 and 2018 amounted to EUR 250 thousand and EUR 262 thousand, respectively.

c) Other operating expenses

The detail of "Other Operating Expenses" in the consolidated income statements is as follows:

Cost of logistics networks

	Thousands of Euros
	2019 2018
Leases Security and cleaning	(32,346) (16,318)	(32,420) (15,973)
Utilities	(17,854)	(16,843)
Other operating expenses	(130,784)	(136,107)
	(197,302)	(201,343)

Commercial expenses

Security and cleaning Utilities Other operating expenses	(20,321)	(19,018)
	(1,481)	(1,391)
	(30)	(16)
Leases	(2,450)	(2,653)
	2019 2018
	Thousands of Euros

Head Office costs

		Thousands of Euros
	2019	2018
Leases Security and cleaning Utilities Other operating expenses	(4,378) (581) (367) (14,097)	(4,172) (649) (381) (12,965)
	(19,423)	(18,167)

"Other Operating Expenses" mainly includes expenses related to Independent professional services and to various services registered in the consolidated statements for 2019 and 2018.

d) Future rental payment commitments

The Group has the following future rental payment commitments, classified by year of maturity, without considering future contingent rent revisions:

	Thousands of Euros
	2019	2018
Within one year Between one and five years More than five years	(32,838) (80,720) (25,758) (139,316)	(31,441) (69,802) (24,367) (125,610)

e) Finance income

The detail of "Finance Income" in the accompanying consolidated income statements is as follows:

	Thousands of Euros
	2019	2018
Interest income (Note 26) Other finance income with related parties (Note 26) Other finance income	14,489 - 523	13,664 435 176
	15,012	14,275

f) Finance expenses

The detail of "Financial expenses" in the accompanying consolidated income statements is as follows:

		Thousands of Euros
	2019	2018
Accrual for late payment interests and financial update of provisions Other financial costs	(414) (1,825)	(456) (1,131)
	(2,239)	(1,587)

g) Other disclosures

In 2019 and 2018 the fees for financial audit and other services provided by the joint auditors of the Group's consolidated financial statements, Deloitte, S.L. and PricewaterhouseCoopers Auditores, S.L., or by firms related to these joint auditors as result of a relationship of control, common ownership or common management, and the fees billed by the auditors of the separate financial statements of the consolidated companies, and by firms related to these auditors as a result of a relationship of control, common ownership or common management, were as follows:

	Thousands of Euros
			Services Rendered by
		Services Rendered by the Main Auditor	Other Auditors
	2019		2018
	Deloitte	PWC	Deloitte	PWC	2019	2018
Audit services	843	491	828	497	11	11
Reporting package to Imperial Brands, Plc.	-	304	-	128	-	-
Other attest services	35	53	32	30	86	87
Total audit and related services	878	848	860	655	97	98
Transfer princing counselling services	173	-	115	-	-	-
Other services	4	19	11	37	-	-
Total other services	177	19	126	37	-	-
Total professional services	1,055	867	986	692	97	98

From the date of year-end to the date of preparation of these consolidated annual accounts, fees charged for non-audit services provided by co-auditor PricewaterhouseCoopers Auditores, S.L. amounted to EUR 12.4 thousand (2018: EUR 173.3 thousand) and by the co-auditor Deloitte, S.L. amounted EUR 10.3 thousand (2018: EUR 52.5 thousand).

24. Segment reporting

Basis of segmentation

Segment reporting is structured by geographical segment. The Group's business activities are located mainly in Iberia (Spain and Portugal), France and Italy. In the "Corporate and Others" line Poland is included.

Basis and methodology for segment reporting

The segment reporting below is based on monthly reports prepared by Logista Group management. The figure of highest instance of operational decision making to define the operating segments is the CEO of the Parent Company.

The segment's ordinary revenue relates to the ordinary income directly allocable to the segment plus the relevant proportion of the Group general revenue that can be allocated thereto using reasonable allocation bases. Each segment's ordinary revenue does not include interest or dividend income or gains arising from sale of investments.

The expenses of each segment are determined as the directly allocable expenses arising from its operating activities plus the relevant proportion of the expenses which may be allocated to the segment using reasonable allocation bases. The expenses allocated do not include interest or losses arising from the disposal of investments; similarly, they do not include the income tax expense or the head office's general administrative expenses that are not related to the segments' operating activities and, therefore, that cannot be allocated using reasonable allocation bases.

The assets and liabilities of the segments are those that are directly related to their operations plus those that can be directly attributed to them on the basis of the aforementioned allocation system, and include the proportional part of joint ventures. Segment liabilities do not include income tax liabilities.

Primary segment reporting

	Thousands of Euros
	Iberia		Italy		France		Corporate and Other		Total Group
	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
Revenue:
External sales-	3,157,395	2,812,642	2,961,607	2,688,081	4,069,467	4,021,604	9,149	8,495	10,197,618	9,530,822
Tobacco and related products	2,753,909	2,402,212	2,961,607	2,688,081	3,891,663	3,840,142	9,149	8,495	9,616,328	8,938,930
Transport	385,656	366,175	-	-	-	-	-	-	385,656	366,175
Other businesses	152,213	141,831	-	-	187,217	189,270	-	-	339,430	331,101
Other adjustments	(134,383)	(97,576)	-	-	(9,413)	(7,808)	-	-	(143,796)	(105,384)
Inter-segment sales									(49,295)	(54,338)
Total revenue	3,157,395	2,812,642	2,961,607	2,688,081	4,069,467	4,021,604	9,149		8,495 10,158,323	9,476,484
Procurements:
External procurements Inter-segment procurements	(2,575,818)	(2,251,246)	(2,675,488)	(2,397,651)	(3,791,745)	(3,757,415)	-	-	(9,943,051) 43,714	(8,406,312) 48,012
Total procurements				(2,575,818) (2,251,246) (2,675,488) (2,397,651) (3,791,745) (3,757,415)			-	-	(8,999,337) (8,358,300)
Gross profit: External gross profit-	581,577	561,396	286,119	290,430	277,722	264,189	9,149	8,495	1,154,567	1,124,510
Tobacco and related products	278,357	272,101	286,119	290,430	233,176	218,586	9,149	8,495	806,801	789,612
Transport	269,974	252,999	-	-	-	-	-	-	269,974	252,999
Other businesses	86,404	84,221	-	-	51,736	51,579	-	-	138,140	135,800
Other and adjustments	(53,158)	(47,925)	-	-	(7,190)	(5,976)	-	-	(60,348)	(53,901)
Inter-segment gross profit									(5,581)	(6,326)
Total gross profit	581,577	561,396	286,119	290,430	277,722	264,189	9,149	8,495	1,148,986	1,118,184
Profit (Loss): Segment result	122,973	111,572	79,155	79,064	14,604	12,547	(13,655)	(13,722)	203,077	189,461
Share of results of associates	-	-	-	-	-	-	-	-	1,249	1,014
Profit (Loss) from operations	122,973	111,572	79,155	79,064	14,604	12,547	(13,655)	(13,722)	204,326	190,475

Inter-segment sales are made at prevailing market prices. Also, the transfer prices are adequately supported and, therefore, the Group's directors consider that there are no material risks in this connection that might give rise to significant liabilities in the future.

The detail of the other disclosures related to the Group's business segments is as follows:

	Thousands of Euros
	Iberia		Italy		France		Corporate and Others		Total Group
	2019	2018	2019	2018	2019	2018	2019	2018	2019	2018
Other disclosures: Additions to non-current assets Depreciation and amortisation charge	31,574 (23,792)	33,775 (23,184)	6,449 (6,290)	10,194 (6,401)	13,653 (59,006)	10,445 (58,405)	322 (64)	47 (57)	51,998 (89,152)	54,461 (88,047)
Balance sheet: Assets- Property, plant and equipment, investment properties and non-currents assets held for sale Other non-current assets Inventories Trade receivables Other current assets	158,192 76,693 473,652 560,516	150,790 63,820 443,567 552,523	22,702 674,411 368,082 355,732	24,218 671,523 329,901 332,456	47,757 662,164 441,020 996,568	46,403 714,976 415,075 960,124	202 1,718 - 878	133 1,071 - 1,143	228,853 1,414,986 1,282,754 1,913,694 2,243,280	221,544 1,451,390 1,188,543 1,846,246 2,157,467
Total consolidated assets									7,083,567	6,865,190
Liabilities- Non-current liabilities Current liabilities Equity	113,103 1,522,017	110,330 1,634,250	40,704 1,739,164	40,850 1,572,989	155,069 2,991,961	171,570 2,822,706	- 1,203	- 887	308,876 6,254,345 520,346	322,750 6,030,832 511,608
Total consolidated liabilities									7,083,567	6,865,190

25. Foreign currency transactions

The Logista Group's foreign currency transactions in 2019 and 2018, measured in euros at the average exchange rate for the year, were as follows:

	Thousands of Euros
	2019	2018
Sales Purchases Services received	16,090 12,099 2,494	14,244 10,305 4,678

26. Balances and transactions with related parties

The balances at 30 September 2019 and 2018 with related companies were as follows:

2019

	Thousands of Euros
		Receivables		Payables
	Credit	Accounts	Accounts
	Facilities	Receivable	Payable
	(Note 9)	(Note 11)	(Note 21)	Loans
Altadis, S.A.U.	-	1,453	47,906	-
Altadis Canarias, S.A.	-	1,981	22,507	-
Imperial Brands Finance PLC	2,020,792	-	-	-
Imperial Tobacco International Limited	-	777	22,788	-
Seita, S.A.S.	-	12,652	49,647	-
Imperial Tobacco Italia, Srl	-	1,630	53,007	-
Tabacalera, S.L. Central Overheads	-	1,149	3,498	-
My Blu Spain, S.L.	-	737	27,828	-
Logista Libros, S.L.	12	683	48	8,047
Others	-	539	-	-
	2,020,804	21,601	227,229	8,047

2018

	Thousands of Euros
	Receivables		Payables
	Credit	Accounts	Accounts
	Facilities	Receivable	Payable
	(Note 9)	(Note 11)	(Note 21)	Loans
Altadis, S.A.U.	-	1,899	48,292	-
Altadis Canarias, S.A.	-	1,937	22,915	-
Imperial Brands Finance PLC	1,881,025	-	-	-
Imperial Tobacco International Limited	-	334	17,551	-
Seita, S.A.S.	-	14.399	51,976	-
Imperial Tobacco Italia, Srl	-	344	36,743	-
Tabacalera, S.L. Central Overheads	-	553	3,344	-
My Blu, S.L.	-	12	44	-
Logista Libros, S.L.	10	711	246	3,147
Others	-	3,552	2,400	-
	1,881,035	23,741	183,511	3,147

The accounts payable and accounts receivable stem from balances payable and receivable, respectively, related to commercial transactions, mainly purchases of tobacco and related products, between Logista Group companies and Imperial Brands PLC Group companies.

The "Credit Facilities" with Imperial Brands Finance PLC relate to cash among Logista Group and the Imperial Brands PLC Group (see Note 9).

The transactions with related companies in 2019 and 2018 were as follows:

2019

	Thousands of Euros
		Finance		Other
	Operating	Results		Operating
	Income	(Note 23-e)	Purchases	Expenses
Altadis, S.A.U. Altadis Canarias, S.A Tabacalera S.L. Central Overheads Imperial Tobacco Italy, s.r.l. Imperial Tobacco Polska, S.A. Imperial Tobacco Manufacturing Polska, S.A. Imperial Brands Finance PLC Imperial Tobacco Portugal SPPLC Macotab, S.A.S. SEITA, S.A. Fontem International Gmbh My Blu Spain, S.L.	8,817 10,996 8,414 3,606 3,055 377 - 1,986 1,030 - 25,232 713	- - - - - - 14,489 - - - - -	346,966 49,210 191 121,446 - - - 39,480 - - 274,342 1,374	- - - - - - - - - 394 - -
Others	2,784 4,758	- -	55,575 21	- -
	71,768	14,489	888,605	394

2018

	Thousands of Euros
		Finance		Other
	Operating	Results		Operating
	Income	(Note 23-e)	Purchases	Expenses
Altadis, S.A.U.	9,622	-	351,645	-
Altadis Canarias, S.A	8,935	-	49,171	-
Tabacalera S.L. Central Overheads	8,438	-	222	-
Imperial Tobacco Italy, s.r.l.	1,658	-	86,069	-
Imperial Tobacco Polska, S.A.	2,705	-	-	-
Imperial Tobacco Manufacturing Polska, S.A.	364	-	-	-
Imperial Brands Enterprise Finance Limited	-	5,528	-	-
Imperial Brands Finance PLC	-	8,136	-	-
Imperial Tobacco Portugal SPPLC	1,885	-	39,210	-
Macotab, S.A.S.	1,544	-	-	-
SEITA, S.A.	-	-	26	386
Fontem International Gmbh	23,725	-	287,202	148
My Blu Spain, S.L.	1,401	-	6,493	-
Others	10	-	200	-
	5,651	435	291	81
	65,938	14,099	820,529	615

Operating income and other operating expenses relate to services provided by Group companies for the handling, logistics and storage of goods. In addition, statistical and market information services are occasionally provided.

The purchases are included as a result of acquiring tobacco and related products, as well as convenience products related to tobacco. Specifically, the transactions with Altadis, S.A.U., Imperial Tobacco Italy, Srl, Imperial Tobacco International, Ltd, Altadis Canarias, S.A. and Seita, S.A.S. relate to purchases of tobacco and related products from these companies to then be subsequently sold in the markets where the Group operates.

27. Remuneration of directors

Remuneration of the Parent's directors

In 2019 the remuneration accrued by the members of the Board of Directors as a result of their membership thereof or of any of its executive committees in all connections, including the remuneration accrued by the members of the Board who in turn are executives, amounted to EUR 4,477 thousand (2018: EUR 5,092 thousand).

The contributions to savings schemes for the executive directors for 2019 and 2018 amounted to EUR 359 thousand and EUR 237 thousand, respectively.

The life insurance premium corresponding to the Board of Directors amounted to EUR 15 thousand in 2019 and 2018.

The Group has long-term incentive plans for executive directors which characteristics are detailed in Note 4.12.

Also, in 2019 and 2018 the Parent did not perform with the members of the Board of Directors any transactions not relating to its ordinary business operations or any transactions not carried out under customary conditions.

In 2019 the directors' third-party liability insurance amounted to EUR 45 thousand in 2019 and 2018.

The Board's composition is nine male directors and one female.

Information regarding situations of conflict of interest involving the directors

Pursuant to Article 229 of the Spanish Capital Companies Law consolidated text, the directors have not reported any situation of direct or indirect conflict of interest that either they or persons related to them might have with the interests of the Group.

28. Disclosures on the payment periods to suppliers, Additional Provision Three "Disclosure obligation" provided for in Law 15/2010, of 5 July

Set forth below are the disclosures -the detail of payments made to suppliers- required by Additional Provision Three of Law 15/2010, of 5 July (amended by Final Provision Two of Law 31/2014, of 3 December), prepared in accordance with the Spanish Accounting and Audit Institute (ICAC) Resolution of 29 January 2016 on the disclosures to be included in notes to financial statements in relation to the average period of payment to suppliers in commercial transactions.

	Days
	2019	2018
Average period of payment suppliers Ratio of transactions settled Ratio of transactions not yet settled	35 36 32	35 35 43

	Thousand Euros
	2019 2018
Total payments made Total payments outstanding	9,972,322 962,332	9,644,083 837,893

In accordance with the ICAC Resolution, the average period of payment to suppliers was calculated by taking into account the commercial transactions relating to the supply of goods or services for which payment has accrued since the date of entry into force of Law 31/2014, of 3 December.

29. Environmental matters

In-force environmental legislation does not significantly affect the activities carried on by the Group and, therefore, it does not have any environmental liability, expenses, income, grants, assets, provisions or contingencies that might be material with respect to the Group's equity, financial position and results. Therefore, no specific disclosures relating to environmental issues are included in these notes to the consolidated financial statements.

30. Events after the reporting period

As described in Note 22 to the Group's consolidated financial statements, On 15 October 2019, the Paris Commercial Court issued the decision on the claim lodged by one of the tobacco manufacturers, in which it ruled that Logista France, S.A.S. had to pay the invoices received from the manufacturer for EUR 39 million, corresponding to the tax for 2017 and 2018. On the basis of the information available, the negotiations and communications that have taken place with the manufacturers and also the assessment of its legal advisers, the Parent's directors consider that this matter will not have any impact on the Group's equity position.

No additional significant events have occurred subsequent since the end of the year ended 30 September 2019.

31. Explanation added for translation to English

These consolidated financial statements are presented on the basis the regulatory financial reporting framework applicable to the Group (see Note 2.1.). Certain accounting practices applied by the Group that conform with that regulatory framework may not conform with other generally accepted accounting principles.

Appendix I

Subsidiaries and jointly controlled entities of the Logista Group

The following companies were fully consolidated because they are companies in which the Logista Group holds a majority of the voting power or were accounted for using the equity method:

2019

			% of Ownership By			Thousands of Euros
					Net	Data on the Companies
				the Parent Company	Book
Company	Audit Firm	Location	Direct	Indirect	Value	Assets	Liabilities	Equity	Profit/Loss
Compañía de Distribución Integral Logista, S.A.U. (a)	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	100	-	974,689	4,479,194	3,958,337	520,857	330,974
Compañía de Distribución Integral de Publicaciones Logista, S.L.U. (a)	Deloitte	Avenida de Europa, 2 Edificio Alcor Plaza, Ala Este, Planta 4ª, Modulo 3, Alcorcón	-	100	-	53,917	49,307	4,610	1,174
Publicaciones y Libros, S.A.U. (a)	Deloitte	Avenida de Europa, 2 Edificio Alcor Plaza, Ala Este, Planta 4ª, Modulo 3, Alcorcón	-	100	4,974	3,243	3,035	208	(1,098)
Distribuidora del Noroeste, S.L. (a)	Deloitte	Gandarón, 34 Interior- Vigo	-	100	553	2,899	1,536	1,363	33
Distribución de Publicaciones Siglo XXI Guadalajara, S.L. (a)	No audit	C/ Francisco Medina y Mendoza 2. Cabanillas del Campo (Guadalajara)	-	80	64	1,030	821	209	(9)
Distribuidora de Publicaciones del Sur, S.L. (a)	Deloitte	Polígono Ind. ZAL, Ctra. De las Esclusas/n, Parcela 2, Módulo 4 (Sevilla)	-	50	69	5,300	4,816	484	(4)
Promotora Vascongada de Distribuciones, S.A. (a)	No audit	C/Guipúzcoa 5. Polígono Industrial Lezama Leguizamón, Echevarri (Vizcaya)	-	100	239	1,662	1,530	132	17
Distribuidora de las Rías, S.A.U. (a)	No audit	Polígono PO.CO.MA.CO, Parcela D-28. La Coruña	-	100	359	1,157	1,020	137	15
Distribuidora Valenciana de Ediciones, S.A. (a)	Deloitte	Polígono Industrial Vara de Quart. c/ Pedrapiquera, 5. Valencia	-	50	445	4,048	3,563	495	89
Cyberpoint, S.L.U. (e)	No audit	Avenida de Europa, 2 Edificio Alcor Plaza, Ala Este, Planta 4ª, Modulo 3, Alcorcón	-	100	64	11	6	5	(20)
Distribuidora del Este, S.A.U. (a)	Deloitte	Calle Félix Rodríguez de la Fuente, 11 Parque empresarial de Elche, Elche	-	100	557	3,173	2,436	737	208
S.A.U. Distribuidora de Ediciones (a)	Deloitte	C/ B, Sector B Polígono Zona Franca. Barcelona	-	100	6,661	6,860	4,645	2,215	(89)
La Mancha 2000, S.A.U. (a)	BDO	Avda. de la Veguilla, 12-A. Cabanillas del Campo	-	100	1,352	2,463	697	1,766	119
Midsid - Sociedade Portuguesa de Distribuiçao, S.A. (a)	Deloitte	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)	-	100	6,164	75,078	64,849	10,229	3,101
Logista-Dis, S.A.U. (b)	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	1,202	57,194	54,996	2,198	2,716
Logesta Gestión de Transporte, S.A.U. (d)	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	4,510	34,618	33,268	1,350	4,729
Logesta Italia, s.r.l.(d)		Colegio Sindacale Via Valadier. 37 Roma (Italia)	-	100	100	11,314	9,277	2,037	1,917
Logesta Lusa Lda (d)	No audit	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)	-	100	42	59	-	59	(3)
Logesta Polska Sp. z.o.o. (a)	No audit	Al.Jerozolimskie, 96, Warszawa (Polonia)	-	100	261	2,725	2,165	560	301
Logesta Deutschland Gmbh (a)	No audit	Unsöldstrabe,2 , 20538, München (Alemania)	-	100	100	394	7	387	(5)
Logesta France, s.a.r.l.(d)	No audit	27 avenue des Murs du Parc, 94300 Vincennes – Francia	-	100	50	3,122	786	2,336	226
Dronas 2002, S.L.U. (c)	Deloitte	Pol. Industrial Nordeste, c/ Energía 25-29. Sant Andreu de la Barca	-	100	21,292	117,362	89,854	27,508	19,771
Logista Pharma Gran Canaria, S.A.U. (c)	Deloitte	Urbanización El Cebadal. C/ Entrerríos, 3. Las Palmas de Gran Canaria	-	100	1,657	4,972	857	4,115	1,118
Logista Pharma, S.A.U. (f)	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	14,685	46,644	31,959	14,685	5,423
Be to be pharma, S.L.U. (f)	No audit	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	3	486	316	170	87
Logista Italia, S.p.A. (a)	Pwc	Vía Valadier, 37. Roma (Italia)	-	100	605,629	1,835,180	1,736,299	98,881	64,090
Terzia, S.p.A. (b)	Pwc	Vía Valadier, 37. Roma (Italia)	-	68	762	43,742	42,829	912	299
Logista Transportes, Transitarios e Pharma, Lda. (d)	Deloitte	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)	-	100	3,210	13,601	10,391	3,210	1,282
Compañía de Distribución Integral Logista Polska, Sp z.o.o. (a)	Deloitte	Al. Jerozolimskie 96. Warszawa. Polonia	-	100	1,904	3,106	1,207	1,899	370
Logista France, S.A.S. (a)	Deloitte/Pwc	27 avenue des Murs du Parc, 94300 Vincennes – Francia	-	100	920,161	3,198,432	3,015,219	183,213	65,117
Société Allumetière Française, S.A.S. (b)	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes – Francia	-	100	22,128	63,284	28,098	35,186	(591)
Supergroup, S.A.S. (b)	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes – Francia	-	100	-	53,341	52,919	422	(407)

(a) All these companies engage in the distribution and dissemination of publications and in the distribution of tobacco and other consumer products in Spain, Italy, France and Portugal,

(b) These companies engage in the purchase and sale of consumer products,

(c) The Dronas Group engages in integrated shipping, express shipping and pharmaceutical logistics,

(d) These companies' object is the performance of transport activities,

(e) This company is specialised in software development for the management of points of sale for publications,

(f) Companies specialising in the distribution of products from pharmacies and related points of sale.

2018

						Thousands of Euros
					% of Ownership By				Net		Data on the Companies
			the Parent Company		Book
Company	Audit Firm	Location	Direct	Indirect	Value	Assets	Liabilities	Equity	Profit/Loss
Compañía de Distribución Integral Logista, S.A.U. (a)	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	100	-	973,904	4,303,282	3,970,492	332,790	186,196
Compañía de Distribución Integral de Publicaciones Logista, S.L.U. (a)	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	-	48,082	44,574	3,508	880
Distribérica, S.A.U. (a)	No audit	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	-	3,916	3,197	719	55
Publicaciones y Libros, S.A.U. (a)	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	1,666	3,200	3,254	(54)	(756)
Distribuidora del Noroeste, S.L. (a)	Deloitte	Gandarón, 34 Interior- Vigo	-	100	553	2,458	1,052	1,406	76
Distribución de Publicaciones Siglo XXI Guadalajara, S.L. (a)	No audit	C/ Francisco Medina y Mendoza 2. Cabanillas del Campo (Guadalajara)	-	80	64	732	440	292	75
Distribuidora de Publicaciones del Sur, S.L. (a)	Deloitte	Polígono Ind. ZAL, Ctra. De las Esclusas/n, Parcela 2, Módulo 4 (Sevilla)	-	50	69	3,184	2,694	490	151
Promotora Vascongada de Distribuciones, S.A. (a)	No audit	C/Guipúzcoa 5. Polígono Industrial Lezama Leguizamón, Echevarri (Vizcaya)	-	100	235	1,252	1,095	157	42
Distribuidora de las Rías, S.A. (a)	No audit	Polígono PO.CO.MA.CO, Parcela D-28. La Coruña	-	100	344	1,180	1,016	164	43
Distribuidora Valenciana de Ediciones, S.A. (a)	Deloitte	Polígono Industrial Vara de Quart. c/ Pedrapiquera, 5. Valencia	-	50	445	3,182	2,776	406	(297)
Cyberpoint, S.L.U. (e)	No audit	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	64	32	6	26	(16)
Distribuidora del Este, S.A.U. (a)	Deloitte	Calle Saturno, 11. Alicante	-	100	557	1,764	997	767	239
S.A.U. Distribuidora de Ediciones (a)	Deloitte	C/ B, Sector B Polígono Zona Franca. Barcelona	-	100	6,661	8,259	5,426	2,833	529
La Mancha 2000, S.A.U. (a)	BDO	Avda. de la Veguilla, 12-A. Cabanillas del Campo	-	100	1,352	2,412	666	1,746	109
Midsid - Sociedade Portuguesa de Distribuiçao, S.A. (a)	Deloitte	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)	-	100	6,164	64,290	56,254	8,036	14
Logista-Dis, S.A.U. (b)	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	1,202	25,678	22,129	3,549	273
Logesta Gestión de Transporte, S.A.U. (d)	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	4,510	31,550	27,423	4,127	2,909
Logesta Italia, s.r.l.(d)		Colegio Sindacale Via Valadier. 37 (Roma)	-	100	100	13,190	10,648	2,542	2,422
Logesta Lusa Lda (d)	No audit	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)	-	100	42	62	1	61	14
Logesta Polska Sp. z.o.o. (a)	No audit	Al.Jerozolimskie, 96, Warszawa (Polonia)	-	100	261	2,450	1,988	462	273
Logesta Deutschland Gmbh (a)	No audit	Unsöldstrabe,2 , 20538, München (Alemania)	-	100	100	402	10	392	1
Logesta France, s.a.r.l.(d)	No audit	27 Avenue des Murs du Parc 94300 Vincennes (Francia)	-	100	50	2,912	803	2,109	321
Dronas 2002, S.L.U. (c)	Deloitte	Pol. Industrial Nordeste, c/ Energía 25-29. Sant Andreu de la Barca	-	100	21,292	115,508	70,791	44,717	18,808
Logista Pharma Gran Canaria, S.A.U. (c)	Deloitte	Urbanización El Cebadal. C/ Entrerríos, 3. Las Palmas de Gran Canaria	-	100	1,657	4,944	865	4,079	1,083
Logista Pharma, S.A.U. (f)	Deloitte	Polígono Industrial Nordeste. C/ Industria, 53-65. San Andreu de la Barca	-	100	14,806	42,261	27,455	14,806	5,544
Be to be pharma, S.L.U. (f)	No audit	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés	-	100	3	711	537	174	91
Logista Italia, S.p.A. (a)	Pwc	Vía Valadier, 37. Roma (Italia)	-	100	605,629	1,660,738	1,568,552	92,186	57,422
Terzia, S.p.A. (b)	Pwc	Vía Valadier, 37. Roma (Italia)	-	68	762	49,150	48,537	613	(599)
Logista Transportes, Transitarios e Pharma, Lda. (d)	Deloitte	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)	-	100	1,939	12,577	10,649	1,928	1,021
Compañía de Distribución Integral Logista Polska, Sp z.o.o. (a)	Deloitte	Al. Jerozolimskie 96. Warszawa. Polonia	-	100	1,542	2,463	891	1,572	188
Logista France, S.A.S. (a)	Deloitte/Pwc	27 avenue des Murs du Parc, 94300 Vincennes – Francia	-	100	920,161	3,180,915	2,884,819	296,096	61,346
Société Allumetière Française, S.A.S. (b)	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes – Francia	-	100	22,128	86,371	30,592	55,779	2,564
Supergroup, S.A.S. (b)	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes – Francia	-	100	-	57,778	56,949	829	457
José Costa & Rodrigues L.D.A	PwC	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)	-	100	12,256	9,136	2,010	7,126	1,179

(a) All these companies engage in the distribution and dissemination of publications and in the distribution of tobacco and other consumer products in Spain, Italy, France and Portugal,

(b) These companies engage in the purchase and sale of consumer products,

(c) The Dronas Group engages in integrated shipping, express shipping and pharmaceutical logistics,

(d) These companies' object is the performance of transport activities,

(e) This company is specialised in software development for the management of points of sale for publications,

(f) Companies specialising in the distribution of products from pharmacies and related points of sale.

Appendix II

Logista Group Associates

The companies detailed below were accounted for using the equity method:

2019

						% of Ownership by the		Net		Thousands of Euros
	Audit			Parent Company				Book		Data on the Companies
Company	Firm	Location	Activity	Directos	Indirectos	Value	Assets	Liabilities	Equity	Proft/Loss
Logista Libros, S,L,U (*)	Deloitte	Avda Castilla La Mancha, 2, Nave 3-4 Polígono Ind La Quinta (Sector P-41) Cabanillas del Campo, Guadalajara	Distribution and dissemination of publications	-	50	-	42,972	35,571	7,401	2,498

(*) Held indirectly through Compañía de Distribución Integral Logista, S.A.U.

2018

				% of Ownership by the						Net		Thousands of Euros
	Audit			Parent Company				Book		Data on the Companies
Company	Firm	Location	Activity	Directos	Indirectos	Value	Assets	Liabilities	Equity	Proft/Loss
Logista Libros, S,L,U (*)	Deloitte	Avda Castilla La Mancha, 2, Nave 3-4 Polígono Ind La Quinta (Sector P-41) Cabanillas del Campo, Guadalajara	Distribution and dissemination of publications	-	50	-	39,905	33,698	6,207	2,027

(*) Held indirectly through Compañía de Distribución Integral Logista, S.A.U.

Compañía de Distribución Integral Logista Holdings, S.A. and Subsidiaries

Consolidated Directors Report for financial year ended on September 30th 2019

1. EVOLUTION OF THE LOGISTA GROUP DURING THE FISCAL YEAR 2019

• The growth recorded by Revenues and Economic Sales¹ that grew 7.1% and 2.8% respectively
• The positive evolution of Adjusted Operating Profit¹ , progressing by 6.5% and Profit from Operations increasing by 7.3%, as a consequence of the good performance recorded by the activity
• The increases in Profit Before Taxes and Net Income, 6.9% and 5.1% respectively, despite recording a higher corporate income tax rate than in the preceding fiscal year

Financial overview

	1 Oct. 2018 –	1 Oct. 2017 –	%
Data in Million Euros	30 Sept. 2019	30 Sept. 2018	Change
Revenues	10,148.3	9,476.5	+7.1%
Economic Sales1	1,149.0	1,118.2	+2.8%
Adjusted Operating Profit1	261.9	245.9	+6.5%
Margin over Economic Sales1	22.8%	22.0%	+80 b.p.
Profit from operations	204.3	190.5	+7.3%
Net Income	164.6	156.7	+5.1%

The Group closed a very positive fiscal year in which, once more, its capacity to obtain growing results, even under complicated macroeconomic and regulatory circumstances, has been demonstrated.

In fact, the main uncertainties existing during the last fiscal year (the US-China commercial tensions, as well as the way UK is going to leave the European Union) not only have not cleared up, but also have continued being very much present. On the other hand, Italy entering into technical recession and its following stagnation, the French social protests or the situation of the Spanish Government have not contributed to achieve a significant recovery of private consumption in the countries where the Group operates.

Additionally, as it was expected, the Group has successfully met the challenge of providing distribution services of tobacco products after the entry into force, on 20 May 2019, of the new traceability regulation required by the European Union for that sector.

In this context, the Group has recorded a positive activity evolution practically in all business lines. Per activities, distribution of convenience products in all geographies and channels, Pharma, as well as Transport recorded the most positive performance whereas the activities linked to Tobacco distribution in Spain and Italy recorded the weakest performance.

¹ See appendix "Alternative Performance Measures"

Group Revenues grew by 7.1% over the preceding year. Economic Sales¹ grew by 2.8%, reaching €1,149.0 million, thanks to the improvements recorded by the activity in Iberia and France, which more than offset the reduction experienced in Italy.

The evolution of tobacco volumes (cigarettes plus RYO (Roll your own) and others) distributed in this fiscal year vs. fiscal year 2018 (-1.5%) was much less negative than the -3.0% yearly variation in fiscal year 2018 vs. fiscal year 2017. France recorded reductions of distributed volumes of cigarettes and RYO while Spain and Portugal distributed volumes increased. In the case of Italy, the reduction was very slight and the distributed volumes stood practically stable.

The movements in prices, taxes and commissions on tobacco products occurred during this and past fiscal years year had a positive impact in the results, derived from the Group's inventory valuation. This impact was not very significant in either period.

Total operating costs¹ grew by 1,7%, below the increase of Economic Sales¹ despite the cost base in France during a large part of the year was over-dimensioned with respect to the distributed volumes (reason why a restructuring process in the country was implemented during this fiscal year) and the important growth experienced by the Transport activity cause a certain dilution effect in the margins at Group level.

Adjusted EBIT¹reached €261.9 million (+6.5% above previous year) which, together with a much higher restructuring costs¹ during the period (€11.4 million compared to €3.6 million) partially offset by the capital gain from the sale of a building in Portugal (€2.5 million) and by the positive result of impairment reversals in one of the business of the Group (€2.5 million), contributed to a 7.3% Profit from Operations increase vs. last year, reaching €204.3 million.

The Adjusted EBIT margin over Economic Sales¹ advanced to 22.8% compared to the 22.0% obtained in fiscal year 2018.

Financial Results in this fiscal year stood practically flat at €12.8 million compared to €12.7 million registered in fiscal year 2018.

The Tax rate in the period increased to 24.1% from 23.0% recorded during last year.

Because of all the above mentioned, the Net Income went up by 5.1% to €164.6 million.

¹ See appendix "Alternative Performance Measures"

Data in Million Euros	1 Oct. 2018 – 30 Sept. 2019	1 Oct. 2017 – 30 Sept. 2018	% Change
Iberia	3,157.4	2,812.6	12.3%
Tobacco & Related	2,753.9	2,402.2	14.6%
Transport Services	385.7	366.2	5.3%
Other Businesses	152.2	141.8	7.3%
Adjustments	(134.4)	(97.6)	(37.7)%
France	4,069.5	4,021.6	1.2%
Tobacco & Related	3,891.7	3,840.1	1.3%
Other Businesses	187.2	189.3	(1.1)%
Adjustments	(9.4)	(7.8)	(20.6)%
Italy	2,961.6	2,688.1	10.2%
Tobacco & Related	2,961.6	2,688.1	10.2%
Corporate & Others	(40.1)	(45.8)	12.4%
Total Revenues	10,148.3	9,476.5	7.1%

Revenues Evolution (By Segment and Activity)

Economic Sales¹ Evolution (By Segment and Activity)

Data in Million Euros	1 Oct. 2018 – 30 Sept. 2019	1 Oct. 2017 – 30 Sept. 2018	% Change
Iberia	581.6	561.4	3.6%
Tobacco & Related	278.4	272.1	2.3%
Transport Services	270.0	253.0	6.7%
Other Businesses	86.4	84.2	2.6%
Adjustments	(53.2)	(47.9)	(10.9)%
France	277.7	264.2	5.1%
Tobacco & Related	233.2	218.6	6.7%
Other Businesses	51.7	51.6	0.3%
Adjustments	(7.2)	(6.0)	(20.3)%
Italy	286.1	290.4	(1.5)%
Tobacco & Related	286.1	290.4	(1.5)%
Corporate & Others	3.6	2.2	64.5%
Total Economic Sales1	1,149.0	1,118.2	2.8%

¹ See appendix "Alternative Performance Measures"

Adjusted EBIT¹ Evolution (By Segment)

Data in Million Euros	1 Oct. 2018 – 30 Sept. 2019	1 Oct. 2017 – 30 Sept. 2018	% Change
Iberia	120.2	114.2	5.3%
France	74.3	65.8	13.0%
Italy	81.0	79.5	1.9%
Corporate & Others	(13.6)	(13.6)	(0.2)%
Total Adjusted EBIT1	261.9	245.9	6.5%

Adjusted Operating Profit¹ (or indistinctly Adjusted EBIT¹ ) is the principal indicator used by Management to assess the recurring results of operations of the business. This indicator is basically calculated by deducting from the Profit from Operations all those expenses that are not directly linked to the Revenue obtained by the Group during each period, which facilitates the analysis of the evolution of operating expenses¹ and typical margins of the Group. The following table shows the reconciliation between Profit from Operations and Adjusted Operating Profit¹ for fiscal years 2019 and 2018:

Data in Million Euros	1 Oct. 2018 – 30 Sept. 2019	1 Oct. 2017 – 30 Sept. 2018
Adjusted Operating Profit1	26.,9	245.9
(-) Restructuring Costs1	(11.4)	(3.6)
(-) Amortization of Assets Logista France	(52.2)	(52.3)
(+/-) Net Loss of Disposal and Impairment of Non-Current Assets	4.8	(0.5)
(+/-) Share of Results of Companies and Others	1.2	1.0
Profit from Operations	204.3	190.5

1.1 Business review

2. Iberia: Spain and Portugal

The Iberia segment's Revenues increased to €3,157.4 million compared to €2,812.6 million in fiscal year 2018, recording a 12.3% growth. The Economic Sales¹ of the segment reached €581.6 million, a 3.6% ahead of the €561.4 million recorded in the preceding fiscal year.

Revenues in Tobacco and related products increased by 14.6%, because of the growth of the activity both in Spain and in Portugal.

The volumes of cigarettes and RYO and others distributed in the Iberia segment showed a very positive performance in the year, increasing a 1.9% compared to fiscal year 2018 and growing in Spain as well as in Portugal, in the case of the later because of the increase in market share of the Group in that country.

In Spain, cigarette volumes distributed went up by 0.5% vs. the preceding fiscal year, turning around the negative trend in that year compared to the fiscal year 2017 (-1.6%). Distributed volumes of RYO (that includes the heated tobacco consumables) and cigars also maintained a more favourable trend than the previous fiscal year, increasing by 9.7% and reducing by 2.7%, respectively compared to 1.8% and -2.4% in the yearly comparison of the preceding year.

Generally, tobacco manufacturers maintained the retail selling price of their products stable during the fiscal year. This behaviour contrasts with the 5 cents increase in the pack of cigarettes during the first months of last year that translated into a positive impact on the results at the end of that fiscal year.

¹ See appendix "Alternative Performance Measures"

The activity of distribution of convenience products in tobacconists as well as in other channels as, for example, petrol stations continued its positive trend, so the Economic Sales¹ grew significantly compared to fiscal year 2018.

The Group continues focusing its growth strategy in this activity, through distribution agreements with manufacturers and networks of points of sale, which allows keeping on expanding its capillarity at the same that growing its penetration in the points of sale in which is already present.

In this sense, it is worth noting that in the last quarter of the fiscal year the Group reached an agreement with Cepsa by which the Group will be responsible of the distribution of the different products commercialised in the stores located in their petrol stations in Spain. This agreement, signed for three years, is currently reaching 900 point of sales, that could increase in the future and it joining the services that the Group was already providing to Cepsa in the Portuguese market.

Thus, Economic Sales¹ in Tobacco and related products grew by 2.3% comparing to fiscal year 2018 thanks to the good performance of the activity in the current that more than offset the positive impact of tobacco selling price increases in the preceding year.

Revenues in Transport recorded again, as a whole, a very solid performance, growing by 5.3%. However, the Economic Sales¹ performance has differed among the activities, being stable in Long distance while in Courier and Industrial parcel increased significantly. Economic Sales¹ in Transport went up by 6.7% to €270 million.

The Parcel and Courier subsidiaries have maintained the leadership position in their respective market segments, derived from a continuous bet on differentiation, which has allowed them to continue achieving solid growth indicators in the fiscal year, especially significant in courier.

Revenues in Other Businesses (which includes Pharma and publications activities) increased by 7.3% reaching €152.2 million and Economic Sales¹ went up by 2.6% to €86.4 million.

The Revenues of the Pharma business grew double digit in the year, joining growth of pre-existing activity and incorporation of new agreements during the period.

However, the distribution of publications in Spain has suffered reductions in Revenues and Economic Sales1 because of the difficult situation the sector continues living.

Total operating expenses¹ in the Iberia segment increased by 3.2% in the period, below the increase reported in Economic Sales¹ .

Adjusted Operating Profit¹ reached €120.2 million, an increase of 5.3% with respect to last year.

In the fiscal year the restructuring costs¹ amounted €2.2 million (slightly above preceding year, that reached €2.0 million in the preceding year), that together with, among other factors, the capital gain from the sale of a building in Portugal (€2.5 million) and the positive result of the impairment test of one of the business of the segment (€2.5 million) allowed The Profit from Operations increased by 11.3% to reach €124.2 million versus €111.6 million recorded at the end of fiscal year 2018.

3. France

Revenues from the France segment grew by 1.2% to €4,069.5 million while Economic Sales¹ increased by 5.1%, to reach €277.7 million.

¹ See appendix "Alternative Performance Measures"

Tobacco and related products Revenues grew by 1.3% to €3,891.7 million due to the increase in tobacco prices and despite the decline experienced by distributed tobacco volumes vs. last year, both in cigarettes (-6.5%) and in RYO, that includes as well heat-not-burn consumables (-5.5%).

This evolution, despite being negative, could be considered as positive, considering the significant rise in the retail selling price of these products during fiscal year 2018 and current fiscal year, as a consequence of the schedule by the French Government to raise excise taxes until 2020.

As of 1 March 2019 the increase of 50 cents of the tobacco excise taxes foreseen in the mentioned excise tax increase plan which target is to raise the price of a cigarette pack to 10 euros in year 2020 took place. Additionally, as happened last fiscal year, a new increase in the commission the tobacconists receive on the sale of tobacco products entered into force on 1 January.

The reaction in the retail selling price of the pack of 20 cigarettes has been a rise that reached, depending on the manufacturers and for most of the brands, between 50 and 90 cents (increasing the price of the most sold brand to €8.80). Due to these movements, at positive net global impact in the valuation of Group's inventories was recorded in the results.

In the same period last year, tobacco manufacturers passed-through only partially the tax increases in November and March (€1.35 in total) and did not pass-through the increase of the tobacconists' commission to the consumers. The global impact on the Group's valuation of inventories of these movements of prices, taxes and commissions was negative at the end of the fiscal year 2018.

The performance of the Economic Sales¹ of convenience products and electronic transactions was positive in both cases.

Thus, Economic Sales¹ of Tobacco and related products increased significantly, +6.7%, to €233.2 million, despite the Revenues grew by 1.3% over the same period in the previous year.

The Other Businesses activity (wholesale distribution of convenience products in non-tobacconist channels) experienced a slight decrease of 1.1% in Revenues, in a still difficult consumption environment, characterised by a strong price competition. However, the strategic selection of clients by profitability as well as by category of products with a higher margin help improving Economic Sales¹ , that grew slightly (0.3%) compared to the previous fiscal year.

The total operating costs¹ of the France segment increased by 2.5% so Adjusted Operating Profit¹ improved to €74.3 million, a 13.0% higher than in the preceding year.

During current fiscal year, a plan for restructuring the operations of distribution of both tobacco and convenience products to tobacconists implying the closure of two of the warehouses operating in the country has been implemented, as well as the reorganisation of activities among the rest of the centres.

This way, the restructuring expenses¹ in the period (€7.4 million) were much higher than the €1.0 million registered in 2018 and drove Profit from Operations to €14.6 million, vs. the €12.5 million recorded in the same period of the previous fiscal year. The main adjustment in this segment is the Amortization of Assets generated from the acquisition of Logista France that was €52.2 million in both fiscal years.

4. Italy

The Revenues in the Italy segment increased by 10.2% to €2,961.6 million driven by a significant increase in the sale of convenience products, as well as by the higher prices of tobacco products.

The volumes of cigarettes distributed reduced in the fiscal year, 3.5%, slightly above the yearly comparison in fiscal year 2018 (-2.5%) while the RYO category, (that includes as well heat-not-burn consumable)

¹ See appendix "Alternative Performance Measures"

continued growing in a significant manner and increased by 32.1% vs. 19.7% recorded in the preceding fiscal year.

In current fiscal year, retail selling prices of tobacco in general increased during the second quarter, as a consequence of the excise tax increases in the traditional tobacco categories entering into force on 1 January 2019. The price increase was generalized and ranging from 10 to 20 cents per pack of 20 cigarettes. Likewise, during current fiscal year, a reduction of excise taxes on the new categories of products (heat-not-burn tobacco and e-cigarettes) took place, which provoked that the retail selling price of some of these products was reduced. The global net impact in the valuation of the Group's inventories of these movements has been positive at the end of current fiscal year, although much lower than in the same period of the previous fiscal year.

During the fiscal year 2018, some tobacco manufacturers raised too the price of some of their products between 10 and 20 cents, although this increase was not accompanied by an increase of taxation beyond the slight automatic update of excise taxes derived from the weighted average price of the previous year.

The trend in the distribution of convenience products during the year has been very positive and translated into a growth rate higher than 20% compared to the last year.

However, the revenues from services rendered to manufacturers linked to NGP (Next Generation Products) have reduced vs. last year.

Because of all trends mentioned before, Economic Sales¹ in the Italy segment went down by 1.5% in current fiscal year.

Total operating costs¹ of the segment reduced by 2.8% with respect to last fiscal year, improving the drop registered in Economic Sales¹ , allowing a 1.9% growth on Adjusted Operating Profit¹ to €81.0 million.

The restructuring costs¹ linked to the gradual efficiency improvement in operations were slightly higher (€1.8 million vs. €0.4 million in 2018), so Operating Profit stood practically flat around €79.2 million.

5. Corporate and Others

This segment includes corporate expenses and the Polish operations.

Adjusted Operating Profit¹ was -€13.6 million, at the same level than in the preceding year.

1.2. Financial Result evolution

The Group has a reciprocal credit facility agreement, with its majority shareholder (Imperial Brands Plc.) by which daily lends its cash excess, or receives the necessary cash to meet their payment obligations. The remuneration of the balances is set at the base rate of the European Central Bank, plus a 0.75% margin. The base rate of the European Central Bank stood at 0.0% during both fiscal years.

The average cash position during the fiscal year was €1,904 million compared to €1,796 million in the preceding fiscal year.

Financial results in the fiscal year stood at a similar level to the preceding fiscal year (+0.7%) in €12.8 million vs. €12.7 million in fiscal year 2018.

¹ See appendix "Alternative Performance Measures"

1.3. Net Income evolution

The capital gain from the sale of a building in Portugal (€2.5 million) and the positive result of the impairment test in one of the businesses, mitigated the impact of the higher restructuring costs¹ recorded in the period (€11.4 million vs. €3.6 million) and drove Earnings Before Taxes to €217.1 million, a 6.9% above the recorded in the previous year.

The corporate tax rate registered in the period reached 24.1% compared to 23.0% the preceding year.

Net Profit climbed by 5.1% in to €164.6 million.

Earnings per Share were €1.24 vs. €1.18 in fiscal year 2018, with no variations in the number of shares of the share capital.

At 30th of September 2019, the Company owned 486,013 own shares.

1.4. Cash Flow

The seasonality of the Group's business results in a negative cash flow during the first and second quarters of the fiscal year that is recovered during the second half, usually reaching its peak around year-end.

The increase of the results obtained in the period, the financial flows, the lower payments of corporate income tax, a level of investments more in line with the customary investments by the Group than the ones made in the preceding year, more than offset the variation of working capital in the year and translated into a higher free cash flow than in the previous year. This higher free cash flow translated into a higher cash generation even after the growth recorded in the remuneration to shareholders.

1.5. Research and Development activities

The Group invested in I+D+i €6.0 million in the fiscal year 2019. Most of these investments were made to computing developments and improvement of communication with points of sale, to implementation of new technologies and databases as well as to the expansion of capacity, services and new developments for the control of routes and incidents management in the Transport area.

1.6. Treasury SHARES

At September 30th 2019, the Group held in its balance sheet 486,013 own-shares, representing the 0.37% of the share capital. Own-shares were acquired in execution of the Share Buyback Program.

The Board of Directors, in its meeting of 24 September 2019, agreed to extend again the Share Buyback Program of the Company – that was initially agreed by the Board of Directors of January 29, 2015, and extended and renewed for the last time on September 25, 2018-, pursuant to the authorization granted by the General Shareholders' Meeting of March 21st, 2018, to allocate them to the Beneficiaries of the 2014 and 2017 General and Special Plans in Performance Shares, who may consolidate their right to the delivery of shares, without any cost, in accordance with the Regulations of both Plans.

1.7. Average Payment Period To Suppliers

The average payment period for commercial purchases during fiscal year 2019 has been 35 days.

1.8. Dividend policy

The Board of Directors intends to propose to the General Shareholders Meeting the distribution of a final dividend corresponding to fiscal year 2019 of €107.5 million (€0.81 per share) that will be paid at the end of the second quarter of fiscal year 2020.

Additionally, the Board of Directors approved in the Meeting of 23rd of July 2019, the distribution of an interim dividend corresponding to fiscal year 2019 of €0.37 per share (€48.9 million) that was paid on the 29th of August, 2019.

Therefore, the total dividend corresponding to fiscal year 2019 will amount around €156.4 million (€1.18 per share), a 5.4% increase over the total dividend distributed in fiscal year 2018.

1.9. Outlook

Current trading environment and the performance of our businesses suggest that in fiscal year 2020, Adjusted EBIT¹ could record a mid-single digit growth with respect to fiscal year 2019.

After the restructuring of the network taking place in France in fiscal year 2019 to adapt it to the new level of activity, the Group do not have the intention to implement new measures of that relevance, so it can be expected that restructuring costs¹ will be below those recorded in fiscal year 2019.

On the other hand, financial results will be similar to those obtained in the past fiscal year if, as look likely, there are not variation in the reference rate of the European Central Bank, if that is the case, it would have an impact on results.

Finally, a slight rise in the effective Corporate Income Tax of the Group is expected, as the deductions applicable for the Group were completed in the last fiscal years.

As a consequence of all the above, it can be expected that Net Profit records mid-single digit growth over fiscal year 2019.

2. SHARE PRICE EVOLUTION

Logista share price amounted €17.9 at the end of the fiscal year 2019 (September 30, 2019), so, Logista's market capitalization reached 2,373.6 million € at closing of the fiscal year 2019.

During the fiscal year, 41,954,961 shares were negotiated, reaching a rotation of the 31.6% of the total share capital. The daily average volume negotiated was 164,529 shares.

	1 Oct. 2018 – 30 Sept. 2019	1 Oct. 2017– 30 Sept. 2018
Market capitalization at the end of the period (€mill)	2,373.6	2,936.4
Revaluation (%)	-19.2%	+8.7%
Closing price (€)	17.9	22.1
Maximum price (€)	22.8	23.7
Minimum price (€)	17.7	17.2
Total negotiated volume (shares)	41,954.961	65,615.281
Average daily volume (shares)	164.529	258,328
Rotation (% of share capital)	31.6%	49.4%

¹ See appendix "Alternative Performance Measures"

3. STATEMENT OF NON-FINANCIAL INFORMATION

About this report

The information given below is in response to Law 11/2018 of 28th December, amending the Code of Commerce, the re-cast text of the Capital Companies Act approved by Royal Legislative Decree 1/2010 of 2 nd July, and Law 22/2015 of 20th July, governing Accounts Auditing, with regard to non-financial information and diversity.

Also considered in the drawing-up of this report were the European Commission's directives on the presentation of non-financial reports (2017/C 215/01) resulting from Directive 2014/95/UE. Account was also taken of the stipulations in the 'Guide to the preparation of reports on sustainability' of the Global Reporting Initiative (GRI Standards).

In this context, by means of the statement of non-financial information, Logista aims to report on environmental, social and personnel matters, the respect of human rights, the fight against bribery and corruption, and on the society, all of these being important for the Company in the pursuit of its own business activities.

In order to design the content of this report and select the important aspects, Logista carried out an analysis of materiality which enabled it to identify the most important aspects about which to report to its stakeholders, and to fulfil the requirements of current regulations relating to non-financial information.

Conversely, for all those matters which are not of material importance for Logista, this report deals with its management approach, but does not give detailed information about KPIs or other quantitative indicators, because they are not regarded as being representative of the Group's activity, as is the case with the consumption of water, which in view of the nature of the Group's activities is only used for sanitary purposes; pollution from noise or light is not an important consideration either, nor is the protection of biodiversity, since the Group's activity has no direct impact on protected areas.

All the indicators included in this report comply with the principles of comparability, materiality, relevance and reliability. In addition, the information included in it is accurate, comparable and verifiable.

This statement of non-financial information has been subjected to an independent external review procedure. The independent assurance report, which includes the objectives and scope of the procedure, as well as the review procedures used, and their conclusions, is attached as an appendix.

Additionally, Logista has elaborated the Annual Report on Corporate Social Responsibility that must be jointly considered with Logista's Non-Financial Information Statement because it expands information on environmental, social and employees-related, respect for human rights, fight against corruption and bribes relevant to the Group in developing its activity.

This Annual Report on Corporate Social Responsibility has been approved by the Company's Board of Directors in its meeting on October 29th, 2019, following a report from the Audit and Control Committee, as stated in the Logista Group's CSR Corporate Policy.

3.1. Business model

3.1.1. Description of the business model

Logista is the largest distributor of products and services to proximity businesses in southern Europe, which serves about 300,000 points of sale in Spain, France, Italy and Portugal, providing access to the market for tobacco and convenience products, electronic recharging, pharmaceutical products, books, publications and lotteries, among others, in an efficient and transparent manner, and with total control over these operations.

Logista combines specialised services of distribution and integrated logistics with exclusive added-value services and powerful business intelligence tools, all in a flexible manner so as to satisfy its customers' needs while complying with the requirements and regulations of each sector.

Logista's proposal in terms of quality is based on its ability to combine the provision of state-of-the-art services of wholesale distribution and logistics with other, added-value and advanced services to customers throughout the value chain. This fosters synergies and economies of scale which benefit its customers, allowing them to concentrate on the main operations of their activities, assuring them of transparency on their route to market, and respecting their product strategies.

Logista concentrates in a single provider all the services which constitute the supply chain, in a transparent manner, with full traceability, and with the most advanced and specialised services in every sector and channel of points of sale in which it operates.

In order to provide these services, Logista has a complete network of infrastructures integrated with its transport network and its information systems, covering the complete value chain from the collection of products to the delivery at the points of sale.

Logista's logistic activities in its 37 central and regional warehouses consist of warehousing, stock management, order management and preparation, grouping, packing and despatch, while ensuring capillarity and proximity to the point of sale by means of its 610 service points.

Through its extensive distribution network, Logista manages the distribution of a wide range of consumer goods to more than 300,000 points of sale (tobacconist's, convenience and chemist's shops, kiosks, bookshops, etc.) in Spain, France, Italy and Portugal, which are visited by about 45 million consumers every day. Logista also distributes among wholesalers of tobacco products in Poland.

The Logista Group performs omnichannel marketing of products and services by means of its web platforms, more than 47,000 point-of-sale terminals installed, 610 service points, and cash & carry establishments, call centres and salesforces, with the collaboration of approximately 15,000 collaborators spread over the five countries where the Group is present, 5,980 of whom are direct employees.

The whole Group shares the values of respect, professionalism, initiative and commitment. These values are expressly included in the Code of Conduct, and together with other guides to behaviour which also appear in that Code, they sustain the unique business model which is characteristic of the Logista Group.

3.1.2.Organisation and structure

Logista's corporate governance is assured by the following bodies:

• The General Shareholders' Meeting
• The Board of Directors
• The Audit and Control Committee
• The Appointments and Remuneration Committee
• The Senior Management

The Group's organisational structure is based on General Directorates for each country, each of which is headed by one person, to whom the Directors of the country's business lines report.

The report on management accounting is produced in accordance with this initial segmentation by geography, and there is a secondary report covering the Revenues and Economic Sales of each business line.

Logista has three business lines: Tobacco and Related Products, Transport and Other.

(a) Tobacco and Related Products

In this line of business, Logista provides services in Spain and Portugal (Iberia), France and Italy.

Logista includes the distribution of tobacco and related products in this line of activity because they are distributed principally through the tobacconists channel in Spain, France and Italy, and in the same channels as those that distribute tobacco in the case of Portugal.

(b) Transport

Logista's transport business consists of the management of long-distance and full-load transport in Europe, controlled-temperature capillary transport in Spain and Portugal, and an express courier service for parcels and documents in Spain and Portugal.

In this business line, Logista provides transport services to its own businesses, as well as to third parties.

(c) Other

Under this heading, Logista includes distribution and logistics services for pharmaceutical products and publications in Iberia, and wholesale distribution services for convenience products to points of sale other than tobacconist's shops, in France.

The Logista Group is composed of the Compañía de Distribución Integral Logista Holdings, S.A., whose head office is in Leganés, Madrid, and its direct and indirect subsidiaries. Details are as follows:

Compañía de Distribución Integral Logista S.A.U.

• Grupo Dronas (100%)
  • Logista Pharma Canarias (100%)
  • Logista Pharma (100%)
    • Be to Be Pharma (100%)
• Logista-Dis (100%)
• Logista Libros (50%)
• La Mancha (100%)
• Logesta (100%)
  • Logesta Italia (100%)
  • Logesta Francia (50%)
  • Logesta Deutschland (100%)
  • Logesta Lusa (51%)
  • Logesta Polska (51%)
• Logista Publicaciones (100%)
• Distribuidora del Este (100%)
• Disvesa (50%)
• Cyberpoint (100%)
• Distrisur (50%)
• Distribuidora de Aragón (5%)
• Provadisa (100%)
• Las Rías (100%)
• Distribuidora de Ediciones Sade (100%)
• Distribuidora del Noroeste (51%)
• Pulisa (100%)
• Distribución de Publicaciones Siglo XXI Guadalajara (80%)
• Distribuidora del Noroeste (49%)
• Logista France Holding (100%)
  • Logista Promotion et Transport (100%)
  • Logesta Francia (50%)
• Logista France (100%)
• SAF (100%)
  • Supergroup (100%)
• Logista Italia (100%)
• Terzia (68%)
• Midsid (100%)
• Logista Transportes e Transitos (100%)
• Logesta Lusa (49%)
• Logesta Polska (49%)
• Logista Polska (100%)
• UTE Logista GTech (50%)

3.1.3. Markets of operation

The Logista Group distributes tobacco products, convenience products, electronic re-charges, pharmaceutical products, books, publications and lotteries, among other things, to about 300,000 points of sale in Spain, France, Italy and Portugal. Logista also distributes tobacco products to wholesalers in Poland.

Country-wise, Logista distributes to about 165,000 points of sale in Spain and Portugal, Logista France to about 50,000 neighbourhood points of sale throughout the country, while Logista Italy distributes to some 60,000 tobacconist's shops and convenience shops in Italy.

3.1.4. Objectives and strategies

Logista has developed a business model which is unique in the market, and which is transforming the model of distribution to specialised channels of retail points of sale by providing manufacturers and retailers with an omnichannel nearness that is simple, efficient and modern, for a very wide range of products and services, adapted to the point of sale and to the end-user.

Logista respects the manufacturers' product strategies for each channel, and distributes their products, in a specialised and transparent manner, to the retail channels; while offering to the point of sale a very wide range of products and specialised services, adapted to its business and to the end-user, and providing it with tools which to improve the management and profitability of its business.

The main objectives of Logista's strategy are:

• 1. To strengthen the consolidated businesses.
• 1. To bring sustainable and future growth, by expanding this business base.
• 1. To offer excellence in the services and increase profitability through constant improvement in operational efficiency.
• 1. To maintain a solid generation of cash.

With regard to the first objective, Logista is continuing to consolidate its position of leadership in distribution in the tobacco sector and in transport.

So in distribution for the tobacco sector, Logista is continuing to renew and extend distribution contracts with the main manufacturers, both for traditional tobacco products and for new-generation products, by offering new added-value services.

With regard to transport, the Group's strategy of quality, differentiation and specialisation in its transport division enables it to maintain higher growth and profitability than those of the sector as a whole.

Moreover, Logista strives to keep abreast of regulatory changes in the sectors in which it operates, in order to position itself at the forefront, thereby reinforcing its competitive advantages − for example, in traceability in the tobacco and pharmaceutical sectors.

Concerning the second objective, the expansion of the business base, Logista tries to construct the best offer of products and services for the retail points of sale to which it distributes convenience products. To do that, it offers them omnichannel communication through e-commerce platforms, call centres, cash & carry establishments and salesforces, while continuing to enlarge its range of products to try to improve the management and profitability of its businesses.

Logista Pharma continues to add new customers, expanding its services to laboratories and pharmacies, and increasing the number of products distributed and the number of pharmacies to which it distributes.

With regard to its third objective, Logista has developed a vertical and integrated model of infrastructures for distribution, transport and information systems which enables it to improve efficiency in operations and transparency in supplying, while maintaining proximity to the point of sale.

In this way, Logista concentrates its logistic activities in automated central warehouses in order to increase volumes and benefit from synergies while getting closer to the points of sale, thanks to an extensive local network of hundreds of service points. This gives it the efficiency and operational flexibility that enable it to offer a specialised distribution service with complete coverage.

These first three objectives of the strategy form the basis which enables the Logista Group to obtain, repeatedly, a solid cash generation which helps it to achieve its final objective, which is the creation of sustainable value.

3.1.5.The main factors and trends which could affect Logista's future development

The progression of Logista's various activities in the geographical areas in which the Group operates could be affected by political, social and/or macroeconomic conditions in the world, and in particular by the conditions existing in Spain, France, Italy, Portugal and Poland.

• The regulatory environment

The regulatory environment in both the tobacco sector and the pharmaceutical sector involves performing an increasing number of exhaustive checks on the distribution of those products, so companies have to be capable of fulfilling the requirements if they wish to continue operating in the future. Logista not only fulfils the requirements, but also anticipates them by offering new services to each of the sectors in which it distributes.

• Next-Generation Products

New products are appearing in connection with tobacco, complementing the limited offer that was available only a few years ago. The Group offers the manufacturers of these products the best and fastest route to the consumer in all of southern Europe, thanks to the high degree of capillarity in its national businesses.

• Environmental requirements

Customers are demanding more and more in terms of the environmental requirements affecting the provision of services. In this context, Logista has produced a Master Plan for Quality and the Environment, and also a Policy on Quality, the Environment and Energy Efficiency. Together, the two Plans establish the guidelines and good practices which optimise the use of resources and prevent pollution from processes. The Group checks its "carbon footprint" in accordance with ISO 14064, taking the methodology of the GHG Protocol as its reference.

Logista's efforts in this regard have been recognized by several international bodies. Logista is therefore one of the companies which the CDP has included on its prestigious "A List", as one of the worldwide leaders in the fight against climate change, and it is the only European distributor to have obtained this recognition in the past three years. Moreover, the CDP also recognized Logista as the "CDP Supplier Leader 2018".

In addition, Logista forms part of the FTSE4Good index, which is composed of companies which have demonstrated their solid practices in environmental and social matters, and in corporate governance.

3.2. Environmental matters

The Logista Group is committed to minimizing the impact of its activity on the environment.

Its Master Plan for Quality and the Environment, and its Policy on Quality, the Environment and Energy Efficiency establish the guidelines and good practices which optimise the use of resources and prevent pollution from processes, in accordance with strict regulatory compliance and with the voluntary objectives to which the Group subscribes.

In this context, Logista undertakes various actions designed to control and manage the current and foreseeable effects of its activity on the environment, and to tackle the significant environmental aspects.

Logista has thus defined the main environmental and quality indicators needed for its sustainable development, which it checks and evaluates regularly, carrying out energy audits in each country and for each business.

In addition, Logista promotes, among its employees, customers, suppliers and society at large, respect for the environment. The Policy on Quality, the Environment and Energy Efficiency may be consulted both on the Intranet and on the Group's corporate website, so that all the employees and the other stakeholders are familiar with it.

The Group has also checked its "carbon footprint" in accordance with ISO 14064, taking the methodology of the GHG Protocol as its reference, and, in addition, in accordance with ISO 14001, the system of certified Environmental Management for Logista's businesses in Spain..

Risks related to environmental matters

Logista includes environmental risks and opportunities in its multidisciplinary procedure for managing risks in the whole Group. The process of assessing risks takes account of environmental risks and opportunities, including, among others, those caused by changes in regulations, the physical environment and other developments connected with the climate.

The Logista Group's system of risk management stipulates that the identification and assessment of risks, including those related to the environment, have to be carried out at least once per year. However, in practice the frequency is greater (every week or more frequently) due to the continual monitoring and reviewing of the risk management process.

This process of risk management applies to all of the Logista Group's businesses in all of the countries in which it operates (Spain, France, Italy, Portugal and Poland), and to all the Group's Corporate Directorates.

The results of this process of risk identification and assessment are reported to the Audit and Control Committee.

Logista's process of risk management is as follows:

1-Identification

The risks which could jeopardise the achievement of the Group's aims are identified, either by means of interviews or by means of questionnaires.

2- Analysis

A risk must be described in terms of its causes and contributing factors, and the consequences for the Group if the risk materialises must be specified.

3- Assessment

An assessment is made of the impact of the inherent risk and of the residual risk, and of probability of their occurring. The degree of tolerance is then defined, and finally, the degree of correlation.

4- Management

Based on the degree of correlation determined in the previous stage, the Group's possible responses to the risk are analysed and the response chosen is placed in one of the following four types: eliminate, mitigate, transfer, accept.

In addition, action plans will be made.

5- Control and monitoring of processes, and 6- Information and communication

The risk management process is continually monitored and reviewed. The relevant information about the risks, from and to all the levels involved in the management of the Group's risks, is managed by means of tools such as the Register of Risks and the Map of Risks.

All the Logista Group's businesses and all the Corporate Directorates report this information to the Internal Auditing Department, which, so that it can regularly update the Group's Map of Risks, monitor the action plans that have been approved, and inform the Audit and Control Committee, which will subsequently inform the Board of Directors, about any new risk, about any changes in the existing risks, about progress in the action plans, etc.

Procedure for prioritising the risks and opportunities that are related to the climate:

The risks and opportunities resulting from climate change are prioritised on the basis of scores produced by the application of the corporate methodology. All such risks, and not only those that could have a significant impact, are taken into account in the Company's strategy and objectives.

The methodology generally considers a period of between 5 and 7 years, because a longer period would involve more uncertainty; but a longer period can be considered for certain types of risk.

The procedure for prioritising environmental risks and opportunities follows the same stages as the procedure for risk management in the whole Group.

	The main risks that are related to the environment, their importance for the Logista Group and the need
for their inclusion, are shown below:

Risk	Importance, Inclusion	Explanation
Current regulations	Important; always included	The carbon taxes on fossil fuels are important for Logista, because although the Logista Group sub-contracts the vehicles for its transport activity and incorporates them into that activity, any carbon tax that is applied to fossil fuels will affect Logista's operational costs due to its impact on the charges of the transport provider sub-contracted by Logista.
		For this reason, this kind of risk has been classified as important, with a high probability of materialising, and a moderate to low impact.
New regulations	Important; always included.	The Paris Agreement has been ratified by all the countries in which Logista operates, and it is very probable that when it comes into force, those countries will define and implement their own "climate plans", which could include strategies for decarbonising the road-transport sector.
		The Logista Group could be indirectly affected by this risk because its transport operations are sub-contracted, and represent more than 90% of all Logista's emissions.
		This kind of risk has been classified as important, with a high probability of materialising, and a moderate to low impact
Technology	Important, sometimes included	The new technology designed to reduce emissions of carbon from transport is important for Logista, because 90% of its emissions are generated by the activity of its transport division.
		On 17th May, 2018, the European Commission presented draft legislation to establish the first standards of CO2 emissions for heavy vehicles in the EU, and to promote the use of vehicles with zero or low emissions.

		This kind of risk has been classified as "important, sometimes included", the likelihood of its materialising as "probable", and the magnitude of the impact as "moderate to low".
Legal	Not important, but included.	The legal risks have been classified as "not important", due to the nature of Logista's business activity.
		Moreover, the Group considers that there is little probability of this risk materialising, and that the impact would be low.
Market	Not important, but included.	Logista distributes various kinds of products, so a change in consumers' behaviour could affect the Group business concerned.
		This risk has been classified as not important for Logista.
Reputation	Not important, but included.	This risk has been classified as not important for Logista, because the Group's business model helps to minimise the main climate-related impact.
Serious material	Not important, but included.	Serious material risks are those caused by events, including the greater severity of extreme meteorological events, such as cyclones, hurricanes and floods. Cyclones and hurricanes do not affect the countries in which Logista operates. However, floods are possible, although the probability of floods is very low.
		The occurrence of floods or snowstorms could cause an interruption to distribution in the Group's warehouses.
		However, the number and frequency of these events are very low, and they have affected only one of Logista's 647 installations on one single occasion.
		So the risk has been classified as unimportant, the risk of its materialising as improbable, and the magnitude of impact as low.
Chronic material	Not important, but included.	Patterns of temperature and precipitation could change, and this would affect animal species such as Lasioderma serricorne, commonly known as the tobacco beetle. Logista stores and distributes the final tobacco product, so the probability and the impact of any plague are much lower than in the manufacturer's premises.
		This risk has therefore been classified as unimportant.
Upstream	Not important, but included.	"Upstream" risks are those that are directly related to serious material risks connected with the climate (extremes in precipitations and droughts, or a greater incidence of storms).
		Patterns of temperature and precipitation could also change, interrupting the supply chain. There is a low probability of these risks materialising, because suppliers and manufacturers are constantly seeking the most favourable sites. Furthermore, Logista's high storage capacity for the products of its principal clients enables it to continue supplying products to its final customers for several weeks even if there are interruptions in the supply chain.
		So this risk has been classified as not important for Logista, the risk of its materialising as improbable, and the magnitude of impact as low.
Downstream	Important; always included	"Downstream" risks are those that are directly related to "current regulations" and to "emerging regulations".
		 Emerging regulations: carbon tax: Any carbon tax applied to fossil fuels will affect Logista's operating expenses because it will affect the charges of the transport provider sub-contracted by the Logista Group's transport division.  Emerging regulations for road transport: Logista is indirectly affected by this risk, being part of the supply chain, because it sub-contracts the vehicles managed by its transport division.

Among the resources which the Logista Group devotes to the prevention of environmental risks are the following:

	FY 2018-19
Resources devoted to the prevention of environmental risks (nº of people, with different dedication %)	67
Resources devoted to the prevention of environmental risks (€)	1,464,469

In view of the nature of the Group's activity, Logista has made no provisions or guaranties of an environmental nature which could be significant in relation to the Company's equity, financial situation or results. However, as a precaution, Logista is insured, through a civil responsibility policy, against claims for personal injury or damage to property caused by accidental, sudden and unforeseen pollution or contamination.

3.2.1. Pollution and climate change

The Group measures its "carbon footprint" and promotes its reduction, as one of the Group's initiatives designed to minimise the impact of its activity on the environment.

The Logista Group calculates the "carbon footprint" of all its businesses and activities in the various countries in which it operates, including most of the Group's externalised activities, as 100% of the emissions resulting from the transport operations and franchises, and also from the indirect activities such as the purchase of goods and services, based on the standard and the emission factors used to report Greenhouse Gases under the Greenhouse Gas Protocol and the UNEEN standard 16258.

An independent accredited body verifies the calculation under the UNE-EN ISO standard 14064, to confirm the figures, the reliability and traceability of this process.

The Group's transport division also informs its clients, without charge, of the "carbon footprint" of their deliveries and journeys.

Thanks to Logista's continuous efforts to optimise energy efficiency in its processes and installations, the Group has significantly improved the efficiency ratio, although the increase in activity has involved an increase in emissions in absolute terms.

Emissions of greenhouse gases (t CO2 eq)	FY 2018-19
Scope 1	34,827
Scope 2	276
Scope 3	194,677

Pollution from noise and light

With regard to noise, each of the Logista Group's premises measures the noise existing by day and by night, with the frequency indicated by the environmental permit. When the measurements reveal values that are close to the legal limit, there are clear action plans to correct the level of noise.

With regard to pollution from light, it is not significant, so the Group has made no specific arrangements in this connection.

Measures to reduce carbon emissions

The Group reduces these emissions by continually optimising routes and by renewing agreements with transport fleets, including their criteria for efficiency.

The Group is also encouraging its transport division to gradually increase the number of its vehicles which run on less polluting fuels.

More than 90% of the Group's premises, including all the directly-managed centres in Spain, France, Italy and Portugal, use electricity of renewable origin.

The reduction of emissions of greenhouse gases is also fostered by the measures taken to improve energy efficiency and increase the use of renewable forms of energy, which are described below, in Chapter 3.2.3.3 (Consumption of Energy).

Targets in the reduction of emissions

Overall Target for the Reduction of Emissions

Logista has developed its own Sustainability Index to identify opportunities to reduce emissions, based on the initiative called Science-Based Target (SBT).

After analysing all the existing methods, Logista considered that the GEVA method (Greenhouse gas emissions per unit of added value) was the method best suited to its activity.

Logista has reviewed this method and adapted it to its transport activity, because it is the most pertinent in terms of emissions within the Group. The proposed unit must therefore take account of the distance covered.

This indicator shows the Overall Performance of Logista's emissions because it includes Scope 1 emissions (which include the emissions from transport activities with operational control), Scope 2 and Scope 3 emissions (which include all the emissions from transport activities without operational control: upstream and downstream emissions) as well as emissions from the franchises' transport.

Logista has considered the recommendations of the CDP concerning "year-on-year" reduction, and aims at an annual reduction of emissions of 2.1%. Logista has also included the vast majority of Scope 3 emissions in its targets, in accordance with the aforementioned GEVA recommendation, because 83% of Logista's emissions come from Scope 3 categories. The result is an Overall Target which represents and includes 95% of all Logista's emissions (considering Scopes 1+2+3).

1 + 2 ( − ) + 3 () 2 €&

Target for 2030= 30 % reduction (baseline year: 2013)

Target for 2050= 54% reduction (baseline year: 2013)

Target for Consumption of Renewable Energy

Logista, being committed to renewable energy, aims to consume green energy in all its direct branches in Spain, France, Italy and Portugal (Poland is not considered because its consumption of electricity represents 1%).

Target for 2020= 99% (already achieved)

Measures adopted to adapt to the consequences of climate change

The current system of risk management provides for the analysis and definition of action plans to deal with the consequences that the change of climate may have for the Company, in the short and medium terms.

Recognitions

In January, 2018, the CDP included the Logista Group on its prestigious "A List" for the third consecutive year. The Group stands out as the only European distributor on the list, thus identifying Logista as a leading company, worldwide, in the management of climate change.

Logista has also been recognized as "CDP Supplier Leader 2018" for its performance in the CDP´s "Supply Chain Programme", in which it has participated since 2010 in order to respond to the requirements of some of its principal clients.

Every year, Logista sends to the CDP information about the Group's management of climate change, at corporate level and at the level of the various businesses. This information may be consulted on the CDP's website.

3.2.2.The circular economy and the prevention and management of waste

The Group has significantly reduced waste and emissions from its activity through the use and recovery of re-usable cardboard boxes, by means of a system already implemented in Logista's centres in Spain, France, Italy and Portugal, and in its transport network specialising in an express courier service for parcels and documents.

Due to the nature of its activity, the main types of waste currently generated by the Company are: paper and cardboard, wood (pallets), municipal waste, plastics and oils (there are other types).

In quantitative terms, and classified according to how hazardous they are and their destination, the different types of waste generated by the Group in 2018-2019 were:

	FY2018-19
Hazardous waste (t)	14.61
	Destination:
	- Recycling: 13.05 Rubbish dump/Landfill: 1.55 - - Re-use for energy: 0.01
Non-hazardous waste (t)	14,787.14
	Destination:
	- Recycling: 12,953.27 - Rubbish dump/Landfill : 1,488.39 - Re-use for energy: 345.48

3.2.3.The sustainable use of resources

The Logista Group is aware of the importance of the efficient use of resources. That is why it compiles and analyses information about the consumption of water, about waste and about the materials that are the most important for the Group.

3.2.3.1. Water

Sources of consumption

The discharging of waste water is not considered important in the Logista Group because, due to the Group's type of activity, this water is poured into the municipal water systems..

In FY 2018-2019, water represented 0.01% of the Group's impact on the environment, because it is only used for sanitary purposes.

The consumption of water in 2018-19 was of 93,873 m³ from the supply network, and was in accordance with the local limits.

3.2.3.2. Consumption of raw materials, and the measures adopted to improve efficiency in their use

The principal raw materials consumed by the Group, and the quantities consumed in 2018-2019, are shown below:

	Quantity consumed in 2018-19 (t)
Air pad film	112.36
Cardboard boxes and lids	8,047.24
Pallets	3,018.58
Paper	339.85
Plastic bags: single use	19.23
Re-usable bags	5.75
Wrapping film	468.04
Biodegradable bags	0.04

Efficiency measures

Among the efficiency measures to improve the use of raw materials is the recovery of re-usable cardboard boxes by the use of a system which involves specific actions for continuous improvement.

In addition, the Group's Policy on the Environment, Quality and Energy Efficiency includes among its commitments the implementation of policies and good practices for the reasonable use of resources, the formula which defines its processes being optimisation.

3.2.3.3. Direct and indirect consumption of energy, measures taken to improve energy efficiency, and the use of renewable forms of energy

The main sources of energy consumption in the Company are electricity, natural gas, diesel and fuel oil. The quantities consumed are shown in the following table:

	Consumption of energy 2018- 2019 (Kwh)
Electricity	51,381,501
Natural Gas	11,618,113

	536,880
Others	Diesel: 426,816
	Fuel Oil: 110,064

Measures to improve energy efficiency

Logista is implementing several action plans in order to achieve savings in the consumption of fuel and energy. Examples are: optimisation of routes, adjustment of the volume to the existing infrastructure, the setting of local objectives and initiatives for reduction in our principal warehouses, the introduction of criteria for energy efficiency in both new and existing installations, etc.

Energy audits are carried out regularly on the Group's principal processes and warehouses. The results are used to identify and prioritise actions to reduce consumption.

Other actions undertaken by Logista to reduce the consumption of energy include:

• The obtention of LEED/BREAM certifications for new installations. Examples are: the new warehouse for wholesaling activity in Cabanillas (Spain) and the new warehouse for the newgeneration products of a client in Bolonia (Italy). Both were designed and constructed in accordance with the strictest standards of energy efficiency.
• The continuous implementation of corporate and local projects (monitoring of consumption, replacement of lighting, improvement of insulation, renewal of equipment, etc.).
  • Measures to increase the use of renewable energy

Being committed to renewable energy, Logista aims to consume green energy in all its direct branches in Spain, France, Italy and Portugal.

In FY 2017-2018, Logista consumed 54,230 MWh, of which 53,792 MWh represented low-carbon electricity at its Scope 2 market value. In FY 2018-2019, Logista's consumption of energy decreased to 51,381 MWh, corresponding to the purchase of 51,028 MWh of renewable energy. Consumption of this amount of renewable energy represents an estimated saving of 14,392 metric tons of CO2e compared with the consumption of conventional energy, taking account of the different emission factors in each country.

3.2.4.Protection of biodiversity

The Logista Group's activities have no direct impact on protected areas, so biodiversity is not one of the Company's material considerations.

In FY 2019, there was no significant impact on biodiversity.

3.3. Social and personnel matters

Logista regards its professional people and its collaborators as a crucial and fundamental factor in the achievement of its objectives, and in the generation of value in the short, medium and long terms. Respect, initiative, commitment and professionalism are the values which govern the conduct of the Group's 5,980 employees of 50 nationalities, and of the professional people who regularly collaborate with Logista.

In FY 2018-2019, Logista continued with the deployment of the Human Resources Master Plan for 2018- 2020, which structures the human resources strategy based on the objectives of the Group and of each of its businesses, and which increases efficiency and has an impact on those businesses and on their employees.

The Human Resources Master Plan has four constituent parts:

• The "HR Roadmap": which fixes the priorities in human resources, based on the objectives of the Group and of each of its businesses.
• The "Balanced Scorecard/BSC": which measures the degree of achievement of the objectives set in the "HR Roadmap", takes decisions and makes action plans based on key metrics in the management of the human resources.
• Centres of Excellence: which offer specialised services for recruitment, development, compensation, communication with employees, employment relations, and health and safety at work.
• Shared Services Centres: which are intended to promote standardisation and efficiency in processes and systems and to manage "big data" in order to identify potential actions for improvement, both descriptive and predictive.

The Logista Group is also committed to the maintenance and creation of employment, promoting longterm employment relationships in a working environment with high levels of motivation and satisfaction.

This is reflected in the increase in its total number of staff from 5,819 employees in FY 2017-2018 to 5,980 employees in FY 2018-2019, and in the Group's permanent employment, which increased from 4,946 to 4,985 employees.

In order to continue strengthening the feeling of belonging and the motivation of its collaborators, its employees and their families, the latter have been given the opportunity to take part in various solidarity actions in several countries where the Group is present.

The Logista Group manages talent with a view to achieving objectives and generating value in the short, medium and long terms. During FY 2018-2019, the Centre for Excellence in Recruitment, with the aim of promoting efficiency in the attraction of talent and its retention in the Group, continued to introduce competitive tools that had been tested in the market, and continued to improve its processes and efficiency by analysing metrics and engaging experts, in order to attract the best candidates and assimilate them into the Group. Clear examples are the implementation of team-management policies, participation in the principal forums of the business schools, universities and career fairs of each country, the improvement and promotion of tools for selection procedures, the recruitment of young people with "junior" profiles through the "Youners", project so that they can develop their professional careers in the Group, and the plans for welcoming and assimilating new employees.

Another of the Logista Group's aims in relation to its employees is to implement remuneration and social benefits that are competitive in the marketplace, both for individuals and overall. To do that, the Group has a comprehensive policy on remuneration, and a series of local social-benefit policies aimed at engaging and retaining the best professional workers. In addition, the Group produces studies of the marketplace and of internal equity and external competitiveness (benchmarks) which facilitate the taking of decisions and the management of the teams in the various departments.

The main risks that the Logista Group has detected in connection with social and staff matters are the failure to retain key personnel and the failure to match person to post (especially in critical posts), because the loss of key staff, or shortcomings in their training, could increase the risk of not having the responsibilities of a particular post adequately discharged.

The main mechanisms for the management and mitigation of risk are:

• Procedures to identify the key employees who should be retained, and the application of policies which encourage them to stay.
• The implementation of procedures to identify critical posts, the efficient management of the people who occupy them, and the provision of robust succession plans for those positions.
• The implementation of a flexible human resources structure so as to adapt smoothly to the needs of the business.
• Globalised management of human resources to unify the criteria applied in the various subsidiaries.

3.3.1.Employment

The breakdown tables showing the main details of Logista's staff are the following:

• Total number and distribution of employees by gender, age, country and professional category at closing of fiscal year

2,197	36.74%
3,783	63.26%
5,980	100.00%

Employees by Age	Total	%
Under 30	674	11.27%
Between 30-50	3,958	66.19%
Over 50	1,348	22.54%
Total	5,980	100.00%

Employees by Country	Total	%
Spain	3,588	60.00%
France	1,346	22.51%
Portugal	526	8.80%
Italy	436	7.29%
Poland	84	1.40%
Total	5,980	100.00%

Employees by Professional Category	Total	%
Management	22	0.37%
Linne personnel and clerical staff	3,225	53.93%
Messengers	2,733	45.70%
Total	5,980	100.00%

• Total number and distribution of types of employment contract related to total employees at closing fiscal year

Distribution of types of employment contract	Total	%
Permanent	4,985	83.36%
Temporary	995	16.64%
TOTAL	5,980	100.00%
Full time	5,836	97.59%
Part time	144	2.41%
TOTAL	5,980	100.00%

• Annual average contracts by gender, type of contract, age and professional category (total contracts in the reported period)

Number of contracts by Gender	Distribution by gender
	Male	Female
Permanent	3,494	2,010

Temporary	1,809	1,707
TOTAL	5,303	3,717
Full time	5,138	3,635
Part time	165	82
TOTAL	5,303	3,717

Number of contracts by age		Distribution by age
	<30	>=30, <50	>=50
Permanent	384	3,751	1,369
Temporary	1,070	2,131	315
TOTAL	1,454	5,882	1,684
Full time	1,407	5,770	1,596
Part time	47	112	88
TOTAL	1,454	5,882	1,684

Number of contracts by professional category	Management	Line personnel and clerical staff	Messengers
Permanent	23	3,212	2,269
Temporary	0	799	2,717
TOTAL	23	4,011	4,986
Full time	23	3,931	4,819
Part time	0	80	167
TOTAL	23	4,011	4,986

• Number of dismissals by gender, age and professional category

Dismissals by Gender	Total
Female	82
Male	139
Total	221
Dismissals by Age	Total
Under 30	25
Between 30-50	134
Over 50	62
Total	221

Dismissals by Professional Category	Total
Management	0
Linne personnel and clerical staff	128
Messengers	93
Total	221

• Average remuneration broken down by gender, age, and professional category

Average Remuneration by Gender	Total €
Male	37,308.00
Female	29,610.70
Average Remuneration by Age	Total €
Under 30	21,364.84
Between 30-50	32,091.16
Over 50	48,215.84
Average Remuneration by Professional Category	Total €
Management	532,056.68
Linne personnel and clerical staff	38,113.88
Messengers	26,234.79

In order to guarantee homogeneity in the calculation of the average remunerations and their typologies, the total gross remuneration includes the different fixed and variable remunerations, annualizing and adjusting them to FTE.

• The salary gap, the remuneration of same posts or average in society

Salary Gap (€)	Salary Female/Male (%)
Company	79.37%

Although the salary gap in the Group is 79.37%, an analysis of this gap by professional category shows that it reduces progressively as the professional category changes from Directors towards Warehouse Employees, where it is 91.19%, and may be due to length of service, etc. For the same post, the remuneration is similar.

• The average remuneration of Board Members and Managers, including variable remuneration, allowances, compensation, payment to long-term savings forecasting systems and any other gender-disaggregated perception

Average remuneration of Board Members by gender (€)
Male	179,653
Female	111,467

The average remuneration of Board Members includes remuneration commensurate with their duties and responsibilities as Board Members. The four proprietary Board Members do not receive any remuneration for their duties and responsibilities as Board Members, so they are not included in the calculation of the average.

The average remuneration of Board Members by gender is increased mainly by the inclusion of the remuneration of the Chairman of the Board, which is higher because of his duties and responsibilities as such.

The remuneration of the Board Members is shown in greater detail in the Annual Report on the Remuneration of Board Members, 2018-2019.

Average remuneration of Managers by gender (€)
Male	562,839
Female	224,230

• Introduction of policies of disconnection from work (digital disconnection)

On 6th December, 2018, Organic Law 3/2018 of 5th December, governing digital disconnection, came into force and is awaiting development of the regulation. Logista is adapting its procedures to conform to the new regulations.

Article 20 bis of the Workers' Statute stipulates, in relation to workers' right to privacy in connection with the digital environment, and their right to disconnect:

"Workers have the right to privacy in the use of the digital devices placed at their disposal by the employer, to digital disconnection, and to privacy in the face of the use of devices for video surveillance and geolocalisation, under the terms laid down in the current legislation governing the protection of personal data and the guarantee of digital rights."

- Disabled employees

Logista is continually seeking to collaborate very proactively with various foundations and associations which help and employ groups with disabilities and at risk of exclusion, with the aim of helping to insert them into the world of work. In FY 2018-2019 there were 123 employees with different capacities.

3.3.2.Organisation of work

3.3.2.1. Organisation of working time and measures aimed at facilitating the enjoyment of conciliation and encouraging the co-responsible exercise of these by both parents

Logista offers various formulas for the organisation of working time, allowing its employees to ask for the reduced working day and offering flexibility in the starting and/or ending times in order to facilitate travelling and compatibility with its employees' personal lives. This promotes long-term employment relationships and a stable and motivating working environment.

Notable among the measures adopted are: a flexible timetable, a reduction in working hours together with an unbroken working day for those in a situation of legal guardianship, a shorter working day, and periods of leave, for those who have to care for a minor or a relative.

3.3.2.2. Number of hours of absenteeism

The Group monitors the absenteeism which it suffers. The number of hours of absenteeism in the fiscal year 2018-2019 is 491,883.60 hours.

3.3.3.Health and safety

Logista regards the safety, health and well-being of its employees as fundamental for the Group, and is careful to ensure that the working environment is safe and healthy. The Centre for Excellence in Safety, Health and Well-Being focuses on the following basic objectives:

• To achieve a gradual reduction in the accident rates in the Group's businesses.
• To continue improving the safety conditions at work and making the work centres more and more healthy.
• To promote a culture of excellence in terms of the safety, health and well-being of our employees in the Group.

The Group has consolidated its OHSAS 18001:2007 certification, the international standard which defines an orderly management in the prevention of occupational risks.

In this context, the OHSAS 18001:2007 certifications of Logista Pharma, Nacex, Integra2, Logesta and Logista Libros in Spain are reviewed every year. In Italy, Logista Italia and the work centres of Bolonia and Crespellano also have this certification (OHSAS 18001:2007). In Portugal the certification of all the businesses in Alcochete (Lisbon) has been reviewed and in Poland the certification obtained by Logista Polska was reviewed two years ago.

Logista also pro-actively manages the safety, health and well-being of its employees. For that purpose, it has organised "workshops" with centres of reference in occupational health, which enable us to make progress in implementing improvements in the prevention of risks in our work centres.

In addition, various projects are carried out every year with the common aim of reducing the risks involved in the handling of loads. Notable among these projects are various pilot tests with lower-back exoskeletons, the installation of tilting tables, preventive physiotherapy plans and in situ training of the back.

Logista also informs its employees about possible risks to their health at their workstations, and gives specific training in all the businesses.

The main indicators of health and safety are as follows:
----------------------------------------------------------	--

	Total	Men	Women
Accidents	121	88	33
Frequency Index*	11.83	13.65	8.74
Severity Index**	0.26	0.33	0.15
Confirmed occupational illnesses	0.00	0.00	0.00

* Frequency Index = (Number of work accidents with leave / Number of hours worked) * 1,000,000 ** Severity Index = (Number of days lost due to work accident with leave / Number of hours worked) *1,000

3.3.4.Social relations

3.3.4.1. The organisation of social dialogue, including procedures to inform and consult the employees and to negotiate with them

Logista encourages an enduring, fluent and transparent dialogue with all its stakeholders. The Group therefore maintains channels for communication and two-directional dialogue with all of them, in order to take account of their needs and expectations, whether in financial, environmental or social matters.

In order to ensure that this dialogue is enduring and fluent, the Logista Group has set up specific channels of communication that are adapted to the characteristics of each stakeholder, although it also makes available channels of communication that are common to all of them, such as the Company's corporate website (www.grupologista.com) and the corporate reports which it publishes every year.

3.3.4.2. The percentage of employees covered by collective agreements, by country

100% of Logista's employees, regardless of the country in which they work, are covered by a collective agreement or an enhanced agreement.

3.3.4.3. The effect of the collective agreements, particularly in relation to health and safety at work

All of the Group's own collective agreements, and the sectoral agreements to which the Group's companies are attached, envisage measures for health and safety at work. In addition, the Group adheres to the policy of Imperial Brands on Health, Safety and Well-Being. We are currently developing our own policy on Health, Safety and Well-Being at work, in accordance with the international standard ISO 45001.

3.3.5.Training

Logista promotes the management of talent and the professional development of its employees, and training is one of the most important aspects of these.

Logista bases the individual development plans for its employees on the 3Es model: experience (70%), exposure (20%) and education (10%).

Logista is also committed to the geographical and functional mobility of its employees to advance their professional development. During the current year, several employees have been selected for temporary assignment to projects in other Group businesses and countries, and new international assignments have been initiated with the aim of increasing the international experience and transversal view of Logista's various businesses and areas, and of contributing to the standardisation of the Group's policies, processes and procedures.

In addition, the Centre for Excellence in Development has also developed other projects during the year, such as increasing the density of talent in critical positions in the Group, strengthening the succession plans for those positions, starting up individualised action plans which combine different initiatives in terms of assignment of projects, development and remuneration; and the "Youners" project which was mentioned above.

3.3.5.1. Policies implemented in the field of training

The Logista Group has no specific policy in relation to training. However, during FY 2018-2019 it designed and implemented some training activities which, being based on business objectives, were related to leadership, the sales function, project management and technical knowledge, increasing individual and collective talent.

Training is one of the lines of action used to meet the strategic challenges, in terms of personnel, that are mentioned in Horizon 2020, namely, to attract, retain and develop talent.

3.3.5.2.				Total number of hours of training by professional category
----------	--	--	--	------------------------------------------------------------	--

Hours of training by category	Hours
Management	304
Linne personnel and clerical staff	42,542
Messengers	18,986

3.3.6.Universal accessibility for disabled people. Equality

The Group's Policy on Social Responsibility expressly sets out Logista's commitment to diversity, equal opportunities and non-discrimination in all their forms.

• Diversity: people of 50 nationalities work at Logista.
• Equality: the Group has developed several initiatives aimed at equality as explained later in this section.
• Non-discrimination: Logista is continually seeking to collaborate very proactively with various foundations and associations which help and employ groups with disabilities and at risk of exclusion, with the aim of helping to insert them into the world of work.

The Group's Code of Conduct gathers together these principles and lays down the general guides to behaviour for all its employees, which are available on the Group's intranet to ensure that they are disseminated as much as possible, and that employees are familiar with them.

The Group continues to support sports activities, especially those intended for young people and those designed to involve disabled sportspeople.

In Spain, since 2011, Logista has also had a Joint Committee on Equality which lays down principles of equality and the rules which ensure that the human resources are managed in accordance with the following principles:

• No discrimination on grounds of gender or sexual orientation, or for any other reason prohibited by law.
• Respect for people above all other considerations.
• Professional behaviour in relations between employees and with the Management.
• The promotion of an appropriate working atmosphere which furthers professional development based on professional merits and training.

These are the principles which inspire Logista's Plan for Equality in Spain.

In this field, the following actions have been carried out in several of the Group's businesses:

• Actions to raise awareness of equality matters, including the distribution of leaflets.
• The creation of a protocol to prevent harassment.
• The creation of an Equality Committee.
• The implementation of a supplement of 100% of the real salary for all workers on maternity or paternity leave.

3.4. Human Rights

Ever since it began to perform its activity, Logista has promoted a behaviour based on integrity and on ethical, business, social, respect of the environment, economic and transparent values. The Group's Policy on Corporate Governance sets out the values of the Company which, as it is a multicultural company, are based on respect, commitment, sustainable long-term development, professionalism, integrity and transparency, and on creating, furthering and supporting a philosophy based on integrity.

Logista also promotes and complies with the provisions of the fundamental agreements of the International Labour Organisation relating to respect for freedom of association and the right to collective bargaining.

The Group's Policy on Social Responsibility, approved in 2016, is aligned with the principles of the United Nations Global Compact in terms of human rights, work, the environment and a policy of anti-corruption. This explicit commitment of the Company is incorporated into its activity and extends to all its employees, customers and suppliers, with whom it works to respect and ensure observance of human rights, and is expressed in the following manner:

• In a Code of Conduct: which stipulates that the Group's workers must promote and protect human rights in a manner which will not contribute, directly or indirectly, to any violation of those rights.

The Group's employees strive to eradicate any violations of human rights which might exist in the employment marketplace, particularly when they are related, in any way, to our commercial activity or supply chain. The Code stipulates that:

• We must all help to make our workplace just, respectful and free of any kind of harassment, discrimination or other form of degrading behaviour. We must ensure that none of our colleagues suffers undesirable actions or behaviour because of their age, race, origin, gender, sexual orientation, disability, political opinion, religion, marital status or physical or mental state.
• We have the responsibility of abiding by the Company's commitment to offering a working environment of equal opportunities in which the jobs are awarded to the most suitable candidates.
• We must promote and protect human rights and ensure that we do not contribute, either directly or indirectly, to any violation of those rights. We must work to eradicate any violations of human rights which could exist in the employment marketplace, particularly when they are in any way related to our commercial activity or supply chain.
• We must work with our suppliers, licensees, agents and associates to encourage and support the application of principles in relation to the minimum working age and forced labour.
• We must not make or allow any distinction with regard to any employee on the basis of the political, religious or jurisdictional situation of the country or territory to which they belong, and when necessary we must ensure that valid work permits are in effect for those who are working outside their countries of origin.
• We must not allow any discrimination to arise out of an employee's right to participate freely in the culture of their community.
• All the Group's suppliers have to know and accept the Principles of Conduct, and this is mandatory in order to contract with any of the Group's companies. The Group has the right to terminate its contractual or commercial relationship with any supplier who does not observe the Principles of Conduct, or who, after inadvertently failing to observe them, does not take the necessary corrective measures.

These General Principles of Conduct include minimum standards and the basic standards of conduct which must govern the activities of the Group's suppliers, both in their relations with the Group and with regard to their own workers or other third parties in the performance of their activities.

In order to ensure that they are public knowledge, the General Principles of Conduct are published in the Group's corporate website. They have also been translated into the official languages of the countries where the Group is present.

• In the Group's Purchasing Policy, which lays down that all the suppliers must be accredited and must have conspicuous economic, financial and technical competence. In addition, contracting will be governed by, among other factors, the principle of ethical and professional conduct, so the employees have to behave in an ethical and professional manner.

In case of any occurrence, conduct or omission which represents a violation of human rights, the Group's employees have at their disposal mechanisms with which to expose it. In the case of Logista, the mechanism is that of the Complaints Channel. There is also a Procedure for Managing the Complaints Channel, to which all the employees have access through the Group's intranet.

Logista has due diligence measures in place, even though, due to the geographical environment in which our activity is carried on, its type and its solid regulatory framework, one cannot notice in the Group any big risk of forced labour or child labour that would render necessary the application of specific due diligence procedures.

As a consequence of this, Logista received no complaint in FY 2018-2019 about anything related to respect for freedom of association, the right to collective bargaining, discrimination in a person's employment or occupation, enforced or compulsory work or child labour, or about any other matter connected with the violation of human rights, in any of the countries in which it carried on its activity in that period.

3.5. Bribery and corruption

The Logista Group currently has corporate policies and a system of internal control that are designed to prevent the commission, by any of its administrators, directors, employees or people subject to the Group's authority, of crimes including bribery, corruption and money laundering.

The Board of Directors shows its commitment and social responsibility by its adoption of the measures necessary for the restraint of any possible offence and the control of any risk of crime, notable among which are those mentioned below.

o There is a Code of Conduct, compliance with which is mandatory, and which is published on the Group's intranet. This, among other regulations, includes guidelines for conduct with civil servants or government officials, and prohibits the offering, giving or receiving of payments, gifts or favourable treatment which could affect the normal conduct of commercial, administrative or professional relations, or could obtain an improper advantage for Logista.

o There is a Manual for the Prevention of Risks from Crime, approved in 2015, which gives details of the principles of the management and prevention of criminal offences within the Group, and of the structure and functioning of the Unit for Control and Monitoring.

The Group's employees are informed of the importance both of complying with the Manual for the Prevention of Risks from Crime and of adopting the principles of the Code of Conduct so as to perform their professional work in an ethical and diligent manner, and this applies to all levels in the Organisation.

• o In the absence of such compliance, a disciplinary system with penalties for any breach of the Company's model will expose as very serious faults any activities involving bribery of public or private entities or breaches of the approved policy on the management of receipts and payments.
• o Logista's employees have at their disposal a Complaints Channel through which to report any occurrence, conduct, information or criminal behaviour which is contrary to the Code of Conduct, the General Principles of Conduct, or the Model for the Prevention of Risks from Crime. No complaint was received during FY 2019 in relation to offences of bribery, corruption or money laundering.

This framework of control in the Group is subject to supervision, at least annually, by the Department of Internal Auditing, the Board of Directors, and the Audit and Control Committee. Regular reviews are carried out on the processes and activities which could potentially be affected by a risk of crime, and when necessary the model is updated to take account of changes in regulations.

The contributions to foundations and non-profit-making entities in 2018-2019 amounted to 188,979.53€. They were allocated mainly for humanitarian, welfare and integration actions intended to improve the quality of life of the most vulnerable groups. Most of these contributions are derived from donations of convenience products and transport services to parishes, social lunchrooms, etc.

3.6. Society

3.6.1.The Company's commitments to sustainable development

The Logista Group is actively engaged with numerous initiatives of a social nature, mainly in its local area, and Logista encourages participation in all collaborators related to the Group (employees, franchises, branches, etc.), as well as collaborating in projects which the latter propose for the exercise of their social responsibility.

The Group's corporate social responsibility policy fixes the framework for action which supports the management of social responsibility in a manner consistent with the Group's corporate strategy, in order to foster stability and transparency in relations with stakeholders which go beyond mere financial interests. To that end, the Logista Group undertakes to consider the needs and expectations of its stakeholders by means of various communication mechanisms, enabling it to maintain an active dialogue and to respond appropriately at all times.

The Logista Group is committed to promoting the culture of corporate social responsibility, and to social development through voluntary activities.

3.6.1.1. The impact of the Company's activity on employment and local development. The impact of society's activity on local populations and in the territory

Logista collaborates with non-governmental, non-profit-making organisations in various localities, with the aim of assimilating workers originating from social environments where they suffer sexual, financial or social discrimination, but who possess special skills.

Logista is also in contact with the main universities and professional training centres in the localities where it is present, and collaborates in the students' training, preparation, first contacts with the world of work, and subsequent development.

The Group has collaboration agreements with prestigious universities and business schools involved with R+D+i.

3.6.1.2. Relations and forms of dialogue with key figures in local communities

Logista encourages an enduring, fluent and transparent dialogue with all its stakeholders. The Group therefore maintains channels for communication and two-directional dialogue with all of them in order to take account of their needs and expectations, whether in financial, environmental or social matters.

In order to ensure that this dialogue is enduring and fluent, the Logista Group has set up specific channels of communication that are adapted to the characteristics of each stakeholder, although it also makes available channels of communication that are common to all of them, such as the Company's corporate website (www.grupologista.com) and the corporate reports which it publishes every year.

3.6.1.3. Partnership and sponsorship actions

Logista participates with different associations related to the Group's activities in order to collaborate in initiatives related to its activity or in order to promote transparency and corporate responsibility. Thus, for example, Logista is a founding member of the Grupo Español para el Crecimiento Verde (Spanish Group for Green Growth) and participates annually in CDP initiatives. At the sector level, Logista also participates in different associations, such as, for example, AESEG, AEFI, AECOC and CCA.

In addition, the Group, through its societies, sponsors different initiatives in support of culture or sport.

Regarding the promotion of culture, Nacex sponsors the Príncipe Pío Theatre in Madrid and has created an area in the Micropolix child leisure centre at Madrid devoted to couriers so kids may know the importance of this occupation in the current world; and Integra2, meanwhile, maintains the www.rutaintegra2.es portal on popular food festivities in Spain, bringing closer the gourmet and food industries, fostering popular, and food culture across the regions.

Regarding the sports sponsorship, Nacex sponsored the football Media Base Sports and the basketball GLT Sport campuses. It also sponsored the Nacex paddle tennis Challenge, where former Real Madrid and Barça football players competed to raise funds for charity, this time devoted to the Forever Dream foundation. Nacex also sponsored a number of golf charity tournament, like the "Tournament for Brave people", for the Leo Messi Foundation and the San Juan de Dios hospital in Barcelona.

Nacex also sponsored the Kern Pharma XIII International Meeting fostering the elite athletics among disabled athletes.

3.6.2.Sub-contracting and suppliers

3.6.2.1. The inclusion in the purchasing policy of social questions, equality of gender, and environmental matters. In relations with suppliers and sub-contractors, consideration of their social and environmental responsibilities

The Logista Group promotes the incorporation of the company values throughout its value chain, resulting in responsible management of the supply chain.

The procedure for selecting and contracting suppliers is both objective and rigorous. The Group's Purchasing Policy incorporates fundamental principles of ethics, employment, sustainability, quality and customer service, and is applied in all the Group's companies and businesses.

By applying this Policy, the Group seeks to ensure maximum transparency in the contracting process, to obviate the risk of fraud in the purchasing processes, and to facilitate solid, long-term commercial relationships involving mutual respect.

The purchasing process

Purchases are made by drawing up Requests for Quotations which are sent to as many potential suppliers as possible.

The selection of a supplier is always made on the basis of quality in technical, financial, environmental and contractual aspects, and on the basis of a supplier's abilities and references in the field of the goods or service to be contracted, and the supplier's economic/financial standing.

Optimisation of resources

With the aim of optimising and rationalising resources, the Corporate Purchasing Management arranges for the centralised purchasing of the goods and services that are important for the Group.

Consequently, almost all the important purchases of goods and services, including general purchases, supplies, maintenance services, information and communications technology, as well as CAPEX, are centralised.

In order to unify the criteria for the selection of the Group's important suppliers, the Corporate Purchasing Management has produced a series of selection criteria which constitute a Decision Matrix, which has been applied in more than 70% of the contracting processes in which it is requested.

By applying this Decision Matrix, the Group has optimised the management of risks in the contracting of suppliers, and the analysis of the degree of exposure.

For the contracting of some goods and services, because of their nature or low cost, centralised management is not appropriate. For these, the established purchasing procedure is followed, with the Requests for Quotations previously explained, in order to comply with the general principles of purchasing defined in the Purchasing Policy, and thus to guarantee transparency, efficiency and equity during those purchases.

3.6.2.2. Systems of supervision, and their auditing and results

In 2018-2019, the Logista Group performed 1,161 audits on suppliers, and found no significant deficiencies in any of them.

These assessments enable the abilities of our suppliers to be measured, and allow an evaluation of the degree of compliance with the standards of quality, safety, and professionalism, among others, that are required by the Company.

The reviews form part of the control systems in operation in each of the Group's Businesses. Notable among the regular reviews are the evaluation of certified quality control systems, the review of the degree of compliance with regulatory strategies, and the evaluation and control of external delegations and commercial representatives by means of surprise control visits.

3.6.3.Consumers

Our customers are at the centre of our business model.

In order to satisfy their needs completely and efficiently, Logista has developed a business model that is unique in southern Europe, and in which all the services of a distribution value chain are offered by one single provider in a transparent, efficient and sustainable manner, with full traceability and including the most advance and specialised services in every sector and channel of points of sale in which the Group operates.

Excellence and quality of service

The Logista Group devotes its best efforts to continuous improvement in order to achieve excellence and optimise the quality of its service.

The Group includes sustainability in its objective of maximum quality of service, always seeking efficiency in its operations, in appropriate social and environmental conditions.

In this way, Logista offers to its manufacturers, laboratories and other operators a specialised distribution service that is adapted to their products, together with other added-value services and powerful Business Intelligence tools so that the consumers are better informed; while at the point of sale it offers them a wide range of products adapted to their end-users, and efficient distribution, increasing their income and profitability.

Stable, long-term relationships

Logista works to establish relationships of trust with its customers, maintaining stable, durable links with them, and ensuring that the channels of points of sale to which it distributes are beneficial for both parties, ensuring independence of management and operational neutrality.

The Corporate Legal Advice Department centralises the review of the most important contracts in the whole Group to ensure that they comply strictly with the Law.

3.6.3.1. Measures for consumers' health and safety

Logista applies its commitment to quality, sustainability and continuous improvement to all its activities and operations, and has many certificates which confirm that:

Principal certificates
ISO 9001	The Group's system of quality management at more than 300 sites
GDP (Good distribution practices)	Distribution of medicines in accordance with European and Spanish regulations
GMP (Good manufacturing practices)	Correct handling and re-packaging of medicines, awarded by the Spanish health authorities
OEA (Operador económico autorizado) (Authorised Economic Operator)	The Agencia Estatal de Administración Tributaria (AEAT) (State Tax Administration Agency) in its most demanding form of Customs Simplification, Security and Safety, attests to an appropriate Customs control, financial solvency, and adequate levels of security and administrative management to ensure satisfactory fiscal compliance.
TAPA	Certifies that Logesta complies with the FSR Safety and Security Regulations for Goods and with the TSR Truck Safety and Security standard, designed to guarantee safety and the safe and secure transit and storage of the assets of any member of the TAPA, worldwide.
UNE-EN ISO 14064	Calculation of the Group's carbon footprint.
ISO 14001	System of Environmental Management
OHSAS 18001	Orderly management of the prevention of occupational risks.
IFS Logistics	Quality accreditation of Integra2 in the food sector.

3.6.3.2. Claims system, complaints received and their settlement

Logista has various systems for dealing with complaints and claims from consumers. These systems are set up by each business, and are adapted to its characteristics and to those of its consumers.

In 2018-2019, the Logista Group received 11,334 complaints and claims from its consumers, representing barely 0.03% of all the despatches and consignments handled by the Group in that year.

99.99% of the total complaints and claims are related to operational incidents in the transport division (loss of merchandise, etc.).

3.6.4.Tax information

3.6.4.1. Profits obtained, country by country

Country	Profits (losses) before corporation tax (thousands of €)
Spain	87,359
France	24,040
Italy	90,890
Portugal	13,969
Poland	841
Total	217,099

3.6.4.2. Taxes paid on profits

Country	Corporation Tax paid (cash-based) (thousands of €)
Spain	-54,058
France	24,678
Italy	31,862
Portugal	2,926
Poland	429
Total	5,837

3.6.4.3. Public subsidies received

The Logista Group received no public subsidy during FY 2018-19.

3.7. Table of compliance with Law 11/ 2018, of 28 December 2018

Content	Chapter of the Non Financial Statement	GRI Standard associated
BUSINESS MODEL
Entrepreneurial environment and business model	3.1.1. Description of the business model and 3.1.2.Organisation and structure	102-2
Markets in which the company operates	3.1.3. Markets of operation	102-6
Targets and strategies	3.1.4. Objectives and strategies	102-14
Factors and trends affecting evolution	3.1.5. The main factors and trends which could affect Logista´s future development	102-15
POLITICS	It will be incorporated along those chapters related to the different topics	103- Management approach of each material issue
RISKS	It will be incorporated along those chapters related to the different topics	102-15
ENVIRONMENTAL ISSUES
GLOBAL
Impact of the firm´s activities on the environment, and health and security	3.2. Environmental matters	103 - Management approach of each material issue related to environment issues
Precautionary principle, quantity of provisions and guarantees regarding environmental risks	3.2. Environmental matters / Risks related to environmental matters	102-11
Resources devoted to preventing environmental risks	3.2. Environmental matters / Risks related to environmental matters	103- Management approach of each material issue related to environment issues
POLLUTION
Measures associated with carbon emissions	3.2.1. Pollution and climate change / Measures to reduce carbon emissions	103 - Emissions
Measures associated with light pollution ,noise and others	3.2.1. Pollution and climate change /	103- Biodiversity

	Pollution from noise and light
CIRCULAR ECONOMY AND WASTE PREVENTION AND MANAGEMENT
Initiatives promoting circular economy	3.2.2. The circular economy and the prevention and management of waste	103- Effluents and waste
Measures associated with waste management	3.2.2. The circular economy and the prevention and management of waste	306-2
Actions combating food spoilage	Non material, taking into account the activity sector of the Company	103- Effluents and waste
SUSTAINABLE USE OF RESOURCES
Water: consumption and supply	3.2.3.1. Water	303-1
Raw materials: consumption and measures	3.2.3.2. Consumption of raw materials, and the measures adopted to improve efficiency in their use.	301-1
Energy: consumption, measures and use of renewables	3.2.3.3. Direct and indirect consumption of energy, measures taken to improve energy efficiency, and the use of renewable forms of energy.	302-1
CLIMATE CHANGE
Greenhouse gas emissions	3.2.1. Pollution and climate change	305-1/ 305-2/ 305-3
Measures for climate change adaptation	3.2.1. Pollution and climate change / Measures adopted to adapt to the consequences of climate change	103- Emissions
Targets in reducing emissions	3.2.1. Pollution and climate change / Targets in the reduction of emissions	103- Emissions
BIODIVERSITY
Prevention measures	3.2.4. Protection of biodiversity	103- Biodiversity
Impacts on protected areas	3.2.4 Protection of biodiversity	304-2

SOCIAL MATTERS AND PERSONAL-RELATED ISSUES
EMPLOYMENT
Total number and distribution of employees by gender, age, country and professional category	3.3.1 Employment / Total number and distribution of employees by gender, age, country and professional category	102-8/405-1
Total number and distribution of the different modalities of labour contracts	3.3.1 Employment / Total number and distribution of types of employment contract	102-8
Annual average of indefinite, temporal and partial contracts divided by gender, age and professional category	3.3.1 Employment / Annual average of contracts by gender, type of contract, age and professional category	102-8/405-1
Number of dismissals by gender, age and professional category	3.3.1 Employment / Number of dismissals by gender, age and professional category	401-1
Average remuneration and evolution disaggregated by gender, age and professional category, or equal value	3.3.1 Employment / Average remuneration broken down by gender, age, and professional category	405-2
Pay gap, remuneration of equal job positions or societal averages	3.3.1 Employment / The salary gap (different remuneration for the same posts)	405-2
Average remuneration counsellors and directives	3.3.1 Employment / Average remuneration for board members and directors, including variable remuneration, subsistence allowances, compensations, payments to pension and long-term savings schemes and any other receipt, broken down by gender	102-35
Politics of occupational disconnection	3.3.1 Employment / Implementation of policies of disconnection from work (digital disconnection)	103- Employment
Disabled employees	3.3.1 Employment / Disabled employees	405-1
WORKTIME MANAGEMENT
Task management	3.3.2.1. Organisation of working time and	103- Employment

	measures of familiar reconciliation
Number of absence hours	3.3.2.2. Number of hours of absenteeism	403-2
Measures of familiar reconciliation	3.3.2.1. Organisation of working time and measures of familiar reconciliation	103- Employment
HEALTH AND SAFETY
Health and security conditions at work	3.3.3. Health and safety	103- Occupational health and safety
Work accidents, highlighting their frequency and severity	3.3.3. Health and safety	403-2
Professional illnesses, separated by gender	3.3.3. Health and safety	403-2
SOCIAL RELATIONS
Organization of social dialogue	3.3.4.1 The organisation of social dialogue, including procedures to inform and consult the employees and to negotiate with them	103- Labor management relations
Percentage of employees covered by collective covenants by country	3.3.4.2 The percentage of employees covered by collective agreements, by country	102-41
Balance of collective covenants in work health and security	3.3.4.3. The effect of the collective agreements, particularly in relation to health and safety at work	403-1
TRAINING
Implementation of politics related to training	3.3.5.1. Policies implemented in the field of training	103- Training and education
Total number of training hours by professional category	3.3.5.2. Total number of hours of training by professional category	404-1
UNIVERSAL ACCESSIBILITY OF DISABLED PEOPLE	3.3.6. Universal accessibility for disabled people. Equality.	103- Diversity and equal opportunity/103- Non discrimination
EQUALITY
Adopted measures to promote equality, plans for equality and politics of no discrimination and diversity management	3.3.6. Universal accessibility for disabled people. Equality.	103- Diversity and equal opportunity/103- Non discrimination
HUMAN RIGHTS

Due diligence procedures in human rights matters and if required, in their mitigation, management and repair	3.4. Human Rights	102-16/102-17/103- Human Rights assessment/103- Freedom of association and collective bargaining /103- Child labor/103-Forced or compulsory labor
Complaints for the violation of human rights	3.4. Human Rights	406-1
Promotion and compliance of covenants ILO associated with the freedom of association and collective negotiation	3.4. Human Rights	407-1
Elimination of employment discrimination, forced and child labour	3.4. Human Rights	408-1/409-1
CORRUPTION AND BRIBERY
Adopted measures to prevent corruption and bribery	3.5. Bribery and corruption	103- Anti-corruption
Measures to fight money laundering	3.5. Bribery and corruption	103- Anti-corruption
Contributions to non-profit foundations and entities	3.5. Bribery and corruption	413-1
SOCIETY
BUSINESS COMMITMENTS WITH SUSTINABLE DEVELOPMENT
Impact of activities on society: employment, local development, local populations and territory	3.6.1.1. The impact of the Company's activity on employment and local development, local populations and territory	103- Local communities/103- Indirect economic impacts
Dialogue with local communities	3.6.1.2.Relations and forms of dialogue with key figures in local communities	413-1
Collaborative actions and sponsorship	3.6.1.3 Association and sponshorship actions	102-12/102-13
SUBCONTRACTING AND SUPPLIERS
Inclusion of social aspects, gender equality and environmental matters in procurement policies	3.6.2.1 The focus of management and the inclusion in the purchasing policy of social questions, equality of gender, and environmental matters. In relations with suppliers and sub contractors, consideration of their social and environmental responsibilities	102-9

Consideration of environmental and social aspects in the relationships with suppliers and subcontractors	3.6.2.1 The focus of management and the inclusion in the purchasing policy of social questions, equality of gender, and environmental matters. In relations with suppliers and sub contractors, consideration of their social and environmental responsibilities	103- Procurement practices
Supervision systems and audits, and their respective results	3.6.2.2. Systems of supervision, and their auditing and results	308-2/414-2
CONSUMERS
Measures for health and security of consumers;	3.6.3.1. Measures taken to protect the health and safety of consumers	103-Customer health and safety
Complaint system, received complaints and respective resolutions	3.6.3.2 Claims system, complaints received and their settlement	103-Customer health and safety
TAX INFORMATION
Profits by country before taxes	3.6.4.1 Profits obtained, country by country	103- Economic performance
Taxes over paid profits	3.6.4.2. Taxes paid on profits	103- Economic performance
Public subsidies received	3.6.4.3. Public subsidies received (cash basis)	201-4

4. RISK EXPOSURE

The Corporate Risk Management System of the Company and its subsidiaries is set forth in the Risks Management General Policy of September, 29th 2015, and has the purpose of providing the Business Managers/Corporate Directorates with a holistic and integrated view of the risks, improving the Management capacity to manage risks in an efficient way and minimizing the impact in case the risks materialize.

In this Policy, different risk categories or factors are defined, in which, as part of the financial risks category, tax risks derived from the Group's operating activity are included.

On the other hand, the Group's General Policy on Internal Control of April 25th, 2017, sets up a framework for the control and management of the external and internal risks of any nature that can affect in each moment to the Group.

The main risks and uncertainties facing the Group are related to possible regulatory changes in the industries in which it operates, the normal operational risks arising in the ordinary course of businesses, which are insured externally as far as possible. In this aspect, the Group complies with all the requirements to operate in the various markets and industries in which it carries on its business activities, and it has established, through its organisational structure, the appropriate procedures and controls to enable it to identify, prevent and mitigate the risks of change in the regulatory framework and, similarly, to comply with the obligations imposed by the various legislations applicable to it.

On the other hand, the Group could be also affected by the risks derived by an unfavourable economic worldwide environment and its possible impact in the consumptions in the markets and sectors where the Group is present.

Among the main risks, it is important to highlight:

• The Group's Businesses are subject to compliance of numerous general and industry laws and regulations, with European, national, regional and local reach, in every country where it operates (regulatory compliance risks), exposing the Group to potential failures to comply and the corresponding sanctions or claims and, on the other hand, to increasing costs for supervision of compliance and control.
• Liberalization in the main markets where the Group operates as tobacco derived products authorized distributor where currently exists a State monopoly for retail sale of these products could affect results, if the measures already planned by the Group were not implemented.
• Main operational risks may occur are related to theft of tobacco in facilities and during transport associated to increases in insurance premiums, as well as to technological risks associated to the lack of (or faulty) availability of the Information System.
• Cibersecurity risk, due to the Group is exposed to threats and vulnerabilities in the use of technologies and information systems in the development of its different activities.

From a financial perspective, the Group's main financial assets are cash and cash equivalents, trade and other receivables and financial investments of the Group. These items represent the Group's maximum exposure to credit risk. So, the main financial risks for the Group could be summarized in:

• Safeguarding of assets: the Group's Financial Directorate has as one of its main objectives to safeguard the Group's assets value in all business units and countries where it through the risk analysis and prevention and optimizing the management of the main claims. The financial department analyses the accidental risks, which could affect the Logista Group, in its assets and in its activity, and according to these risks, establishes the external insurance coverage contracts, which considers necessary. Related to the high Goodwills, impairment tests are carried out according to International Accounting Standards in the Group.
• Credit risk: In general, the Group deposits its cash and cash equivalents in entities holding a high credit rating. The Group presents as well an exposure to credit or counterparty risk with Imperial Brands by virtue of the subscribed treasury agreements. The Group estimates at September 30th , 2019, the level of exposure at the credit risk for its financial assets is not significant.
• The Group controls the insolvency and delinquency risks establishing credit limits and through the establishment of demanding conditions in respect to collection periods; that commercial risk is spread among a high number of clients with short collection periods, being the main Group's clients, tobacconists. So, the credit risk exposure to third parties is not very significant, and the Group has, always if considered, Insurance Policies to mitigate the impact of possible defaults, although this default rate in all geographies in which the Group operates is very low.
• With regard to liquidity risk, the Group maintains enough cash and cash equivalents to face the payments derived from its usual activities. Also, if required, the Group has available credit lines.
• Respect the exposure to interest rate risk, considering the low level of the Group's financial debt, the Management of the Parent Company considers the impact from a potential increase in interest rates, which could have in the consolidated annual accounts, is not significant.
• In addition, the level of exposure to the net equity and the P&L account in terms of future changes in the current exchange rates is not relevant; due to the volume of transactions of the Group in non-Euro currencies is not significant.
• Changes in the payment cycle of the Group can obligate to seek out external financing sources to compliance its obligations: As any wholesale business, the payment cycles of the acquired products to manufacturers and the billing cycles of the points of sale do not match. Along with this, the payment by the Logista Group to Tax Authorities is made in a different cycle to the cycles corresponding to manufacturers and points of sale.

Likewise, the fiscal strategy defined in the Logista Group's Tax Policy has among its main objectives:

• To minimize the tax risks related to the operations, as well as to the strategic decisions of each company, ensuring that the tax payable is appropriate and in proportion to the operations of the Businesses, the material and human resources, and the business risks of the Group.
• To define the fiscal risks and determine the Objectives and Activities of internal Control, and to set up systems for reporting fiscal compliance and for keeping documentary records, integrated with the Group's General Framework of Internal Control.

Therefore, from a fiscal point of view, the risks facing the Group are:

• According to the current regulations, taxes cannot be considered definitely settled until the tax authorities have inspected them or the statute of limitations of four years has expired. Currently, the Group is subject to inspection certain exercises on certain taxes.
• On the other hand, the possibility of modifications in the tax regulation can affect directly in the results and cash management of the Group (Excise duties, Corporate Income Tax, Personal Income Tax, etc).

Regarding the materialization of the risks to which the Company has been exposed:

• Normal operational risks, in the normal business evolution. Particularly, robberies of tobacco in facilities and during the transport, without incidence in the Group's results due to the insurance of the goods.
• Responsibility for settlement tax litigations, resolved against the Group, without relevant incidence in the Group's results due to they were provisioned; as well as other no tax litigations.
• Specifically, on April 10 2019, the National Commission of Markets and Competition imposed on Compañía de Distribución Integral Logista, S.A.U. ("Logista"), (100% subsidiary of the Company), a penalty of €20.9 million, for "exchange of sensitive information regarding the sale of cigarettes from 2008 to 2017". Logista does not consider appropriate sanction, and has filed against this resolution an administrative contentious appeal to the National Court, and request for suspension of the payment of the sanction, which, as of the date of this report, is pending of resolution.

In both cases, the control systems allowed the mitigation of the risk's impact or of its occurrence profitability. In general, the Group's internal system and the risks management system allowed that various risks place in a low profile, and indeed some of them ended without negative impact for the Group.

Associated risks and expected impacts on the business's strategy and activities due to the decision of UK to leave the European Union

The Group belongs to the Imperial Brands Group that has its registered office in the United Kingdom. In this sense, the Group has valuated the risks , as well as the possible impact that it might occur as consequence of the exit by the United Kingdom from the European Union. As the Company has not significant investments, directly or indirectly, in foreign companies that operate in currency other than the euro, and does not carry out significant operations in countries with currency other than the euro, the possible effects from a cooling British economy, and/or from a possible currency volatility, might not have a highly impact in the development of the Logista Group's activities.

On the other hand, the contribution of the share capital by the shareholder Imperial Brands, as well as the credit line that maintains with the majority shareholders is in euro currency. In that sense, the Company does not have any type of financing by its shareholder in euros or in sterling. Therefore, it is not impacted from interest rate variations.

Uncertainty is maintained, pending of impact valuation, related to European directives on taxation, as well as the applications EU freedom, that will ultimately depend on the exit model of the United Kingdom from the EU.

5. USE OF DERIVATIVE FINANCIAL INSTRUMENTS

No Group company uses derivative financial instruments.

6. SIGNIFICANT EVENTS FOR THE GROUP AFTER THE REPORTING PERIOD

As described in Note 22 to the Group's consolidated financial statements, On 15 October 2019, the Paris Commercial Court issued the decision on the claim lodged by one of the tobacco manufacturers, in which it ruled that Logista France, S.A.S. had to pay the invoices received from the manufacturer for EUR 39 million, corresponding to the tax for 2017 and 2018. On the basis of the information available, the negotiations and communications that have taken place with the manufacturers and also the assessment of its legal advisers, the Parent's directors consider that this matter will not have any impact on the Group's equity position.

No additional significant events have occurred subsequent since the end of the year ended 30 September 2019.

APPENDIX: ALTERNATIVE PERFORMANCE MEASURES

Economic Sales: equals Gross Profit and is used without distinction by the Management to refer to the figure resulting of subtracting Procurements to the Revenue figure.

Management believes that gross profit is a meaningful measure of the fee revenue we generate from performing our distribution services and provides a useful comparative measure to investors to assess our financial performance on an on-going basis.

	Million €
1 Oct. 2018 – 30 Sept. 2019		1 Oct. 2017 – 30 Sept. 2018
Revenue	10,148.3	9,476.5
Procurements	(8,999.3)	(8,358.3)
Gross Profit	1,149.0	1,118.2

Adjusted Operating Profit (Adjusted EBIT): This item is calculated, fundamentally, discounting from the Operating Profit those costs that are not directly related to the revenue obtained by the Group in each period, facilitating the performance of Group's the operating costs and margins.

The Adjusted Operating Profit (Adjusted EBIT) is the main indicator used by the Group's Management to analyse and measure the progress of the business.

	Million €
	1 Oct. 2018 – 30 Sept. 2019	1 Oct. 2017 – 30 Sept. 2018
Adjusted Operating Profit	261.9	245.9
(-) Restructuring Costs	(11.4)	(3.6)
(-) Amortization of Assets Logista France	(52.2)	(52.3)
(+/-) Net Loss of Disposal and Impairment of Non Current Assets	4.8	(0.5)
(+/-) Share of Results of Companies and Others	1.2	1.0
Profit from Operations	204.3	190.5

Adjusted Operating Profit margin over Economic Sales: calculated as Adjusted Operating Profit divided by Economic Sales (or indistinctly, Gross Profit).

This ratio is the main indicator used by the Group's Managements to analysis and measure the performance of the profitability obtained by the Group's typical activity in a period.

	Million €
	1 Oct. 2018 – 30 Sept. 2019	1 Oct. 2017 – 30 Sept. 2018	%
Economic Sales	1,149.0	1,118.2	2.8%
Adjusted Operating Profit	261.9	245.9	6.5%
Margin over Economic Sales	22.8%	22.0%	+80 b.p.

Operating costs: this term is composed by the costs of logistics networks, commercial expenses, research expenses and head offices expenses that are directly related to the revenue obtained by the Group in each period. It is the main figure used by the Group's Management to analyse and measure the performance of the costs structure. It does not include restructuring costs and amortization of assets derived from the Logista France acquisition, due to are not directly related to the revenues obtained by the Group in each period.

Million €	1 Oct. 2018 – 30 Sept. 2019	1 Oct. 2017 – 30 Sept. 2018
Cost of logistics network	798.5	780.6
Commercial expenses	70.4	67.2
Research expenses	2.7	2.1
Head office expenses	79.1	78.3
(-) Restructuring costs	(11.4)	(3.6)
(-) Amortization of Assets Logista France	(52.2)	(52.3)
Operating Costs or Expenses in management accounts	887.1	872.3

Reconciliation with Interim Consolidated Financial Statements:

Non-recurring expenses: refers those expenses that, although they might occur in more than one period, do not have a continuity in time (as opposed to operating expenses) and affect only the accounts in a specific moment.

This magnitude helps the Group's Management to analyse and measure the performance of the Group's activity in each period.

Recurring operating expenses: this term refers to those expenses occurred continuously and allow sustain the Group's activity. They are estimated from the total operating costs less the non-recurring costs defined in the previous point.

This magnitude helps the Group's Management to analyse and measure the performance of efficiency in the activities carried out by the Group.

• Restructuring costs: are the costs incurred by the Group to increase the operating, administrative or commercial efficiency in our company, including the costs related to the reorganization, dismissals and closes or transfers of warehouses or other facilities.
• Non-recurring results: refers to the results of the year that do not have a continuity during the year and affect the accounts in a specific moment. It is included in the Operating Profit.

Compañía de Distribución Integral Logista Holdings, S.A .- and subsidiaries

Independent verification report Year ended 30 September 2019

This version of our report is a free translation of the original, which was propared in Spanish. All possible care has his version of our report is a free translation of the orginal. However, in all nowever, in all natures of been taken to ensure that the fransistion is an accimal ransmission of our report takes precodence over this.
Interpretation of information, vlews or opinions, the original l translation.

Independent verification report

To the shareholders of Compañía de Distribución Integral Logista Holdings, S.A.

Pursuant to Article 49 of the Code of Commerce, we have verlied, under a limited assurance scope, Pursuant to Article 49 of the Code of Calimiteres, we fire year ended 30 September 2019 of
the accompanying State of non-financial Information ("NFS") for the year ended as t the accompanying State of normandan Molings, S.A. and subsidiaries (hereinafter "Logista")
Compañía de Distribución Integral Logista Holdings, S.A. and subsidiantes ("Logista which forms part of Logista's consolidated Management Report.

The content of the NFS includes additional information to that required by the current mercentlies The content of the NFS includes additional information which has not been overod by our verification legislation related to not-manch roomstricted solely to verifying the information identified in the work. In this respect, but work has been restracted solery to very is 1073/ 2018, of 28 December 2018 in the accompanying NFS.

Responsibility of the Board of Directors

The preparation of the NFS included in Logista's consolidated Management Report and Internal Logista The preparation of the NFS included in Logista of Compania do Distribución Integral Logista
thereaf are the responsibility of the Board of Directors of current mercantilia thereaf are the responsibility of the Board of the provisions of current mercantili Holdings, S.A. The NFS has been drawn op in accorderds of the Global Reporting inities in the table include legislation and with the Sustainability Reporting Octalls provided for each matter in the table included in Standards ) selected, described in in in equirements as per Law 11/2018 and GRI indicators".

This responsibility also includes the design, implementation and maintenance of the intension of the intensional or This responsibility also includes the design, implement in misstatement due to fraud or error.

The Board of Directors of Compañía de Distribución Integral Logista Holdings, S.A. are also The Board of Directors of Compania de Dismibusion maintaining the management systems from which the information required to prepare the NFS is obtained.

Our independence and quality control

We have complied with the independence requirements and other ebical requirements of this Code of We have complied with the intepentience by the International Ethics Stendards Board for Accountants ("IESBA") which is based on the fundamental principles of integrity. Objectivity, Accountants ( IESBA ) which is bused on onlidentiality and professional behaviour.

PricewaterhouseCoopers Auditores, S.L., Torre PoC, Po la Castellanu 259 B, 28046 Madrid, Itspaña Tel.: 1:34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400, www.pwc.es

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

lensolla en al FLO A.C. con el hilmero SO242 - CIF: B-70 0.01290

Our firm applies the International Standard on Quality Control 1 (ISQC 1) and therefore has in place a Our firm applies the International Standard on Qualify Collinoin in the such to conditions related to global quality control system, which includes documented policies and problem.
compliance with ethical requirements, professional standards and applicable legal and regulator provisions.

The engagement team has been formed by professionals specialising in Nort-Financial Information The engagement team has been formed by professionals spoculable in the manage.
reviews and, specifically, in information on economic, social and environmental performance.

Our responsibility

Our responsibility is to express our conclusions in an independent limited verification report based on Our responsibility is to express our conclusions in an inception it in the data relating to
the work carried out in relations of inscal year ended 30 September 2018. The data the work carried out in relation solely to fiscal year ended so september it has been carried out in
previous years were not subject to current mercantle legislation. Our wor previous years were not subject to current mercent international Standard on Assurance accordance with the requirements laid down in the Engagements Other than Audits of Reviews of
Engagements (ISAE) 3000 Revised, "Assurance Engagements Other than Auditing and Engagements (ISAE) 3000 Revised, "Assurance Engagements Online international Auditing and
Historical Financial Information" (ISAE 3000 Revised Issued by the International (IF Historical Financial information" (ISAC 3000 Revised) issued by the Internationals (IFAC) and with
Assurance Standards Board (IAASB) of the International Federation of Access Assurance Standards Board (AASB) of the international Peocial or ris issued by the Spanish
the Guidelines for verification engagements on Non-Financial Slatements issued by t the Guidelines for verification engagements on Normania. Consores de España").
Institute of Auditors ("Instituto de Censores Jurados de Cuentas de España").

In a limited assurance engagement, the procedures performed vary in terms of their nature and timing In a limited assurance engagement, the procedures performed out in a reasonable assurance engagemont.
of execution, and are less extensive than those carried out in a reasona of execution, and are less axtensived is substantially lower.

Our work has consisted of posing questions to Management and several Logista units that were Our work has consisted of posing questions to Management compling and validating the
involved in the NFS, in the NFS, in the review of the procesure of compiling and review involved in the preparation of the NFS, in the review of the processes for centains
information presented in the NFS and in the application of certain analytical procedures a sampling tests, as described below:

• . Meetings with Logista personnel to ascertain the business model, policies and managiment Meetings with Logista personnel to ascentain the business mood, policial be information required for the external review.
• . Analysis of the scope, relevance and integrity of the contents included in the NFS for year.
  The 1988 Beatler the 2019, beeed on the materially analysis carried by Logista, Analysis of the scope, relevance and integrity of the contents including the relation of the relation the relation the matering the l
  ended 30 September 2019, based on the ma ended 30 September current mercantile legislation.
• .
  Analysis of the procedures used to compile and validate the information presented in NFS for
  e and and of Of Controlets 2019 year ended 30 September 2019.
• Review of information concerning risks, policies and management applied in Review of information concerning fisks, policies and management appear of the relation to relation to relation to relation to relation to relation in the NFS for year
• .
  Verlitted for the been been 2010 ond its adequate compilation using data supplied by the MFS for year Verlication, through sample testing, of the information to the sential by the Logista's sources of information,
• Obtainment of a management representation letter from the Directors and Management,

Conclusions

Based on the procedures performed and the evidence we have obtained, no matters have come to
l the procedures performed and best beliefs NES, for the vear enried. 30 Septembe Based on the procedures performed and the evidence we have anded 30 September 2019 has not
light that might lead us to believe that Logist in recordsore with the trovisions light that might lead us to believe that Logistas NPS, in according of current mercantile
been prepared, in all its significan aspects, in according Initiative ("GFL been prepared, in all its significant aspecial to a Global Reporting lintellyer ("GR)
legislation and the Sustainability Reports) Standards of the Global for each matter in t legislation and the Sustainsbilly Reporting Standards of the Bloosted for each matter in the table
Standards") selected, described in accordance with aw 11/2018, of 28 in the Standards") selected, described in accordance with the details provided to the accompanying NFS.

Use and distribution

This report has been drawn up in response to the requirement laid down in current Spanish mercantile This report has been drawn up in response to the roler purposes or jurisdictions.
legislation and therefore might not be suitable for other purposes or jurisdictions.

PricewaterhouseCoopers Auditores, S.L.

(Originally signed in Spanish)

Pablo Bascones

4 November 2019

ANNEX I TEMPLATE

ANNUAL CORPORATE GOVERNANCE REPORT OF LISTED COMPANIES

NOTICE: This document is a translation of a duly approved Spanish-language document, and Is
many be had of any formation purposes, In the event of any discrepancy between the NOTICE: This document is a translation of a duly approved spansmilled by this
provided only for information purposes. In the event of any discrepancy between the text of thi provided only for information purposes. In the event of any discrepants polices of the original Spanish-language
translation and the original Spanish-language document, the document shall prevail.

FISCAL YEAR-END DATE: 30/09/2019

C.I.F .: A87008579

COMPANY NAME: COMPANY NAME:
Compañía De Distribución Integral Logista Holdings, S.A.

REGISTERED OFFICE: REGISTERED OFFICE:
Calle Trigo 39 -Poligono Industrial Polvoranca- 28914 Leganés (Madrid)

A CAPITAL STRUCTURE

A.1

Date of last change	Share capital (Euros)	Number of shares	Number of voting rights
		132,750,000	132,750,000
04/06/2014	26,550,000.00

Please state whether there are different classes of shares with different associated rights: :

$$
\bar{\mathbf{v}}_{\mathbf{es}} \bar{\square} \bar{\square} \tag{80}
$$

A.2 Please provide details of the company's significant direct and Indirect shareholders at year end, excluding any directors:

Name of shareholder	% of shores carrying voting rights		% of vating rights through financial instruments		% of total voting rights
	Direct	Indirect	Greet	Indirect
	0	50.01	0	0	50.01
Imperial Brands PLC	0	4.98	0	0	4 98
Allianz Global Investors GmbH	0	3,94	0	0.02	3,96
BlackRock, Inc			0	0	3.01
Santander Asset Management, S.A.	0	3.01

Breakdown of the indirect holding

Name of indirect shareholder	Name of direct shareholder	% of shares carrying voting rights	% of voting rights through financial instruments	% of total Sullion rights
	Altadis S.A.U.	50.01	0	50:01
Imperial Brands PLC	Allianz Global Investors Fund	3.16		3.16
Allianz Global Investors GmbH	Other Investor's Companies	1.82	0	1.87
BlackRock, Inc	Other Investor's Companies	3,94	0,02	3 ae
	Santander Small Caps Europa, Fl	0.90	0	0.90
Santander Asset Management, S.A.	Santander Acciones Españolas, Fl	2.11	0	2.11

Transaction Date	Transaction Description
31/07/2018	Fell below the 3% share capital threshold
1/07/2019	Exceeds the 3% share capital threshold
Name (person or company) of the shareholder

State the most significant shareholder structure changes during the year:

A.3 In the following tables, list the members of the Board of Directors (hereinafter

) in the following to transisting the company; in 'the 'tre' ) with voting rights in the company:

Name of director	% of shares carrying voting rights		% of voting rights through financial instruments		% of foloj voting rights	% voting rights that can he	transmitted through financial instruments
	Direct	Indirect	Direct	Indirect		Cirect	Indirect
Luis Egido Galvez	0.08	0	0.15	0	0.23	0	0
Rafael de Juan Lopez	0.02	0	0.05	0	0.077	0	0
Marañon V Gregorio	0	0.02	0	0	0.02	0	0
Bertran de Lis			of all be this Bound of Directors			0.32

Total percentage of voting rights held by the Board of Directors

Breakdown of the indirect holding:

Name of director	Name of direct chareholder	% of shares carrying voting rights	% of voline rights through Anancial instruments	% of total voting rights	% voting rights that can be transmilted through financial instruments
Maranon Gregorio D. Bartean de Lis	Cigarral de Inversiones, S.I.	0.02	0	0.02	0

A.4 If applicable, state any family, commercial, contractial, they are known to the company,
exist among significant shareholders to the ordinaty course, of business, except thos exist among significant shareholders to the extent that they are business, except those
unless they are insignificant or arise in the ordinary course of business, except thos that are reported in Section A.6:

Not applicable

A.5 If applicable, state any commercial, contraction of y and/or group, unless they are
between significant shareholders and the company and/or group, unless they are
contraction between 'significant or arise in the ordinary course of business:

	Related parties names or corporate names
Imporial Brands PLC
Compañía de Distribución Integral Logista Holdings, S.A.

Kind of relationship: Contractual

Brief description:

"ITG-LOGISTA HOLDINGS RELATIONSHIP FRAMEWORK AGREEMENT", dated June 12th, 2014.

"HG-LOGISTA HOLDING PLC (formerly named Imperial Tobacco Group-TTS) undertakes to maintain Imperial Brands PLC (formerly named impend resident making of the administrative and and respect the freedom of management and ceatify principle in its commercial and services
managerial bodies of the Company, and the neutrality of the business information managerial bodies of the Company, and the mode on the business information
relations with third parties, also establishing the confidentiality of the systems. relations with third por of their respective IT systems.

of the Company into the the engulates related transactions between both companies,
The Framework Agreement also connany The Framewom To and administration of the Company.

Kind of relationship: Contractual

Brief description:

Brief description:
"INTRA GROUP LOAN FACILITY AGREEMENT", dated June 12th, 2014, amended on December 2st, 2015, and extended on March 21st 2018.

2015, and extended on moral credit facility, in force until June 12, 2024 (with a yearly tacit
Agreement on a reciprocal creat limit of two thousand six hundred million euros Agreement on a reciprocal credit facility, in Tothousand six hundred million euros.
renewal), with a maximum disposal limit of two thousand six hundred million of A. U

fenewall, with a maximalia cie Distribución Integral Logista S.A.U. (100%

According to this agreement, C.jl L.il - lond Imperial Brands Finance PLC (IBF) (form According to this agreement, Compania de List notes Fl.C (JBF) (formerly named
subsidiary of the Company) will daily lend Imperial Brands Fl.nance PLC (JBF) (formerly n subsidiary of the Company) will daily lend imperial Brands Philotos of the European Central Bank,
Imperial Tobacco Finance PLC), its cash excess, at the base rate of the Eur plus a margin of 0.75%.

plus a margin of on one
if Logista has to get into debt to meet the needs of its working capital, IL can reciprocally borrow the amount from IBF.

A.6 Describe the relationships, unless insignificant for the two parties, that exist between Describe the relationships, unless Insignificant for the Board and directors, or their
significant shareholders or shareholders represented on the Board and directors, or the representatives in the case of proprietary directors.

Explain, as the case may be, how the significant shareholders are represented. Explain, as the case may be, appointed to represent significant shareholders, those
Specifically, state those directors appointed to repreholders and/or companies in its Specifically, stato those directors appointed to represent to repanies in its whose appointment was proposed by signineships or ties. In particular, mention the group, specifying the nature of such relationsments of the case may be, of
existence, Identity and post of directors, or their representatives, as their existence, Identify and post of directors, or the Board of Directors or their the listed company, who are, in Edit, 'necholdings in the listed company or
representatives of companies that hold significant shareholdings representatives of these significant shareholders.

Name or company name of related director or representative	Name or company name of related significant shareholder	Company name of the group company of the significant shareholder	Description of relationship/post
			Group's Company Secretary
Mr. John Matthew Downing	Imperial Brands PLC		Director of Finance Strategic
Mr. Richard Guy Hathaway	Imperial Brands PLC		Intiatives
			Director of Treasury
Mr. John Michael John Simol.	Imperial Brands PLC		Strategy Director of Imperial
Mr. Amal Pramanik	Imperial Brands PLC		Brands Group

Remarks The significant shareholder Imperial Brands PLC, pursuant to the Framework The significant shareholder impendi or the Company's Board by four proprietary Directors,

None of the Company Directors is a Director at Imperial Brands PLC.

A.7 State whether the company has been notified of any shareholders' agreements that may State whether the company has been nothed of the Ley de Sociedades de Capital
affect it, in accordance with Articles - 500 and 531 of these agreements and list the party affect it, in accordance with Articles 530 and 552 of thise agreements and list the party shareholders:

No 18 Yes II

State whether the company is aware of any concerted actions among its shareholders. If so, provide a brief description:

No. 20 Yes D

A.8 State whether any individual or company exercises or may exercise control over the State whether any individual or Company Exercises of Mercados de Valores ("Spanish
company In accordance with Article 5 of the Ley de Mercados de Valores ("Spanish
company In company in 'accordan" or "LMV"). If so, please identify them:

No [] Yes 18

Name of Individual or company
	IMPERIAL BRANDS PLC
Remurks
INDIRECT PARTICIPATION OF 50.008%, THROUGH ALTADIS, S.A.U.

A.9 Complete the following table with details of the company's treasury shares:

At the close of the year:

Number of direct shares	Number of indirect shares (")	Total percentage of share capital
486,013	0	0.37

A.10 Provide a detailed description of the conditions and terms of the authority given by the Provide a detailed description of the Conditions one of issue, repurchase, or dispose of treasury shares.

The General Meeting of Shareholders of March 21, 2018 authorised the Board of Directors The General Meeting own shares in the following terms:

to acquire comport of Directors so that pursuant to the provisions established in Article
"To authorize the Board of Directors office of it Capital"), it may acquire, at all "To authorize the Board of Directors so that pursularites de Capital"), it may acquire, at all
146 of the Act on Capital Companies ("Lev de Sociedades de Capital"), it may a 146 of the Act on Capital Companies (' Ley de Sociedades BBCleanes BBCISTA HOLDINGS, S.A., provided that:

• ill the face value of the shares acquired, in addition to those already held by the Company the face value of the shares acquired, in addition to the share capital of COMPAÑÍA DE
  and/or its subsidiarles, does not exceed 10% of the share capital of COMPAÑÍA DE DISTRIBUCION INTEGRAL LOGISTA HOLDINGS, S.A., and
• il) the acquisition, including any shares that the Company or person acting in its own name
  ill the acquisition, including any share assured or previously held, does not resu the acquisition, including any shares that the county beld, does not result in
  but on behalf of the Company may have the charge capital amount plus any result in but on behalf of the Company may nave sequital amount plus any restricted
  the Company's net equity failing below the share capital amount plus any restricted the Comforeseen by the regulations or the By-laws.

First reserves to authorize the subsidiaries so that, notwithstanding the relevant
Furthermore, to authorize of Sharebylders, pursuant to said Article 146, they Furthermore, to authorize the Subsidiants So Shareholders, pursuant to said Article 146, they authorlsation of their General Meeting of Sharthologics, portRibbCiON INTEGRAL LOGISTA
may at all times acquire shares in COMPAÑA DE DISTRIBUCION INTEGRAL LOGI may at all times acquire shares in COMFANA of the acquired shares, in addition to those
HOLDINGS, S.A., provided that the face value of the acquired shares in addition to the HOLDINGS, S.A., provided that the lace value of elected and exceed 10% of the share capital
already held by the Company and/or its subsidiaries, does not exceed 10% of the sh already held by the Company and Integral LOGISTA HOLDINGS, S.A.

of COMPANIA De Blo his carried out through a purchase, swap, donation, allocation or non-Said acquisitions may be carried out through a parculsition for consideration. In any
recourse debt and, in general, under any other form or consideration. In any recourse debt and, in general, under any exhibiting shares that are fully paid up.
case, the shares to be purchased will be circulating shares that are fully paid up.

The Board of Directors of COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A.
The or more The Board of Directors of COMPANIA Of Distribution of Shares in one or more
or of its subsidiaries may agree to purchase the Company's shares in or of its subsidiaries may lagree to purchase enc. 20% of their listed price, and for a
transactions, for a maximum price that does not exceed 20% of their listed price, transactions, for a maximum price than the face value of 0.20 Euros per share.
minimum price that is not less than the face value of 0.20 Euros per share.

millinom price that a five year term, calculated as of the date of this General Meeting.

Mercing.
To expressly allow, for the purposes of Article 146.1.a), last paragraph, of the Act on Capital To expressly allow, for the purposes of Article 2001 acquired by COMPANIA DE
Companies ("Ley de Sociedades de Capital"), that any share acquired by this Companies ("Ley de Sociedades de Capital ), trac sins subsidiaries, further to this DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, ... .. authorization, be used or attached, in Whole on 11 parties of COMPANIA DE
delivery to directors of the Company, and managers and other employees of in delivery to directors of the Company, and managers and its Subsidiaries Companies, or in
DISTRIBUCIÓN INTEGRAL LOGISTA HOIOS of Legg-Term Incontive Plans consisting DISTRIBUCIÓN INTEGRAL LOGISTA Friculives, 2007 Ann Tocentive Plans consisting of the
accordance with and in implementation of Cong-Term Incentive Plans consisting of the accordance with any shares or of options on Company shares."

A.11 Estimated floating capital:

BACB6

A.12 State whether there are any restrictions (article of associations, legislative or of any State whether there are any restrictions (and/or any restrictions on voting rights.
other nature) placed on the transfer of shares and/or any restriction that may inhibit a t other nature) placed on the transter of any type of restriction that may inhibit a takeover In particular, state the existence of any type of futs shares on the market, and those attempt of the company through acquisition or that may be applicable, under sector
regimes for the prior authorisation or notification or normany's financial instruments. regimes for the prior authorisation on notmention pany's financial instruments.
regulations, to acquisitions or transfers of the company's financial instruments.

Yes 11	No 13

A.13 State if the shareholders have resolved at a meeting to adopt measures to neutralise a
f the shareholders have resolved at a meeting to adopt measures to neutralise a State if the shant to the provisions of Act 6/2007.

$$\mathbf{a}, \Box$$

A.14 State if the company has issued shares that are not traded on a regulated EU market.

Ve

No 18 Yes 0

No IZI

GENERAL SHAREHOLDERS' MEETING в

B.1 State whether there are any differences between the quorum established by the LSC foo State whether there are any differences between the quorany and if so, describe them
General Shareholders' Meetings and those set by the company and if so, describe them in detail:

No 18 Yes 1

B.2 State whether there are any differences in the company's manner of adopting corporate State whether there are any differences in the Compuny and the scribed by the LSC and,
resolutions and the manner for adopting corporate resolutions described by the LSC and, if so, explain:

No 区 Ves []

B.3 State the rules for amending the company's Articles of Association. In particular, state State the rules for amending the company is not its of Association and any provisions
the majorities required for amendment of the Articles of Association and any a the majorities required for amendment of the Articles of Hessimonts to the Articles of
In place to protect shareholders' rights in the event of amendments to the Articles of Association.

Association:
Standards applicable to the amendments of the company's Articles of Association are those Standards applicable to the amendments of the Act on Capital Companies (Royal Legislative Decree of July 2nd 2010),

Decree of July 2 ' , 2020's
B. 4 Give details of attendance at General Shareholders' Meetings held during the year of this report and the previous year:

	Attendance data
Date of General Meeting	% physically present	% present by proxy 18.45	% distance voting
			Fietronic Other voting 0.00		Total 88.81
				0.00
21/03/2017	70.36		0.00	0.00	18.81
Of which, free float:	0.36	18.45			84.65
	60.12	24.53	0.00	0.00
21/03/2018	0.12	24.53	0.00	0.00	24.65
Of which, Ires float:			0.00	0.00	84.08
26/03/2019	50.21	33.87			34.07
Of which, free floar	0.20	33.87	0.00	0.00

B.5 State whother any point on the agenda of the General Shareholders' Meetings during the State whether any point on be the shareholders for any reason.

No No Yes []

B.6 State if the Articles of Association contain any restrictions requiring a minimum number State if the Articles of Association control it control or on distance voting:

No 18 Yes U

B.7 State whether it has been established that certain decisions other than those established State whether it has been established that contribution to another company of
by law exist that entail an acquisitions than must be subject to the by law exist that entail an acquisition, onsposal or contractions that must be subject to the
essential assets or other similar corporate transactions that must be subject to essenual of the General Shareholders' Meeting.

No 23 Yes 1

B.8 State the address and manner of access to the page on the company website where one State the address and manner of access to the bage on the tormation regarding General
may find information on corporate governance and other information regarding the may find information on corporate governance and other in shareholders through the company website.

The address of the company's website is www.grupologista.com.

The most relovant information on the Company's corporate governance and other The most relevant information on the Company 3 corners on "Shareholders and
Information on the General Meetings is available in the section "Shareholders and information on the General Mecimes is available of the mance Reports", and
Investors"/ "Corporate Governance"/ "Annual Corporate Governance Reports", or "Previous lnvestors"/ "Corporate Governance / "Annual Corporate USeal year), or "Previous
through the same section, "General Meetings" (for current fiscal year), or "Previous General Meetings"

COMPANY ADMINISTRATIVE STRUCTURE

C.1 Board of Directors

C.1.1 Maximum and minimum number of directors established in the Articles of Association
t and many of the che annoval meeting: Maximum an amber set by the general meeting:

Maximum number of directors	11.7
Minimum number of directors
Number of directors set by the general meeting

C.1.2 Please complete the following table on directors:

Name of Director	Natural Person representative	Director Category	Position on the Board	Date firs appointed to Board	Last re- election date	Method of selection to Board
Mr. Gregorio Marañón y Bertrán		Independent	Chairman	13/05/2014	21/03/2018	Genera Shareholders' meeting
de lis Mr. Luis Egido		Executive	CEO	13/05/2014	21/03/2018	General Shareholders! mecting
Galvez Mr. Rafael de Juan		Executive	Secretary Director	13/05/2014	21/03/2018	General Shareholders' meeting
Lopel Ms. Cristina Garmendia		Independent	Director	D4/05/7014	21/03/2018	General Shareholders' meeting
Mendizabal Mr. Alain Minc		Director Indenendent		24/04/2018	24/04/2018	By co-option
Mr. Jaime Carvajal		Independent	Director	25/09/2018	25/09/2018	By co-option
Hoyos Mr. John Matthew		Proprietary	Director	13/05/2014	21/03/2018	General Shareholders' meeting
Downing Mr. Richard Guy		Proprietary	Director	24/03/2015	26/03/2019	By co-option
Hathaway Mr. John Michael	4	Proprietary	Director	29/01/2019	29/01/2019	By co-option
Jones Mr. Amal Pramanik		Proprietary	Director	24/04/2018	24/04/2018	By co-option

Total number of directors

10

State if any directors, whether through resignation, dismissal or any other reason, have left
. the Board during the period subject to this report:

Name of director	Director type at time of leaving	Date of last appointment	Date director left	Specialised committees of which he/she was a member	Indicate whether the director left before the end of the term
Richard Charles Hill	Proprietary	25/04/2017	31/12/2018	None	Yes

C.1.3 Complete the following tables regarding the members of the Board and their categories:

EXECUTIVE DIRECTORS

NAME OR COMPANY NAME OF DIRECTOR:

Mr. LUIS EGIDO GALVEZ

POST IN ORGANISATIONAL CHART OF THE COMPANY:

CHIEF EXECUTIVE OFFICER

PROFILE:

PROFILE:

Mr. Luis Egido Gálvez is the CEO of Compañía de Distribución Integral Logista Holdings S.A. From
Mr. Luis Egico Galvez (e. Break volently (en Interal Logista S.A. Mr. Luis Egido Gálvez is the CEO of Compania de Ustribucion S.A. He was COO of the Logistics
2005, He is CEO of Compañía de Distribucion integral Legista, P.A. He was coles, 2005, He is CEO of Compania de Distribucion integral Lagant Librion to taking on these roles, he
business unit of the Imperial Tiolates of Business Logistics at Aladis S.A.U. business unit of the Imperial Tobacco Group FLS (cosbitis at Altadis S.A.U. (2001-2008); General
held various roles, including Director of Business Logistics at Altadis S.A.U held various roles, including Director of Nusiness Logist Manager of Logista (1998-2005); Logistics Linesto Manager of Tabacalera (1988-1990); and Chairman of Servents Flat and Telefónica, where he
seven years at Telettra Española, S.A., a joint venture between Flat and Telefoning seven years at Telettra Española, S.A., a joint Ventife Metrial Requirements Planning (1980-1991)
served as Materials Director (1982-1984), Director for (1979-1980), and as a served as Materials Director (1981-1984), birtector for Material as an Engineer in production
1981), Head of the Engineering Department (1979-1980), and as an Engineering 1981), Head of the Engineering Department (1979-1980), and es an in Industrial Engineering
organization (1978-1979), Mr. Egido received his Bachelor of Science in Industrial organization (1978-1979). Mr. Egido receved ins Bachelor of Balens in Colence in Completed the Senior
from the College of Industrial Engineering of Madrid In 1977. He also co from The College of Thidustry of Industry School In 1996.

NAME OR COMPANY NAME OF DIRECTOR:

Mr. RAFAEL DE JUAN LOPEZ

POST IN ORGANISATIONAL CHART OF THE COMPANY:

SECRETARY DIRECTOR

PROFILE:

PROFILE:

Mr, Rafael de Juan López is a Director and Secretary to the Board of Compañía de Distribución Mr. Rafael de Juan López is a Director and Secretary of the val.Secretary of Grupo Logista. Prior
Integral Logista Holdings S.A. He also currently serves as General Spanish E Integral Logista Holdings S.A. He also currently serves as Grient of the Spanish Economy and
to joining the Logista Group, he worked as a government lawyer at the Spanish law to joining the Logista Group, he worked as a govennices an attorney at the Spanish law Tim
Taxes Ministry (1993-1999). Mr. de Juan has also served as: an altains General Mana Taxes Ministry (1993-1999), Mr. de Juan nas also selver as. Minists General Manager of Spanish
Martinez Lage Asociados (1990-1993); Directives S.A. (FRT) (1983-1990); and as Martinez Lage Asociados (1990-1993); Director and LegaTV(1983-1990); and as a govenment
chemical company Unión Española de Explosivos S.A. (ERT) (1983-1990); and as a govennm chemical company Unión Española de Explosivos S.A. (ENT) (2002 2007)
lawyer for various ministries In Spain (1974-1983). Mr. de Juan received his Bachelor of Laws in
1967 from Complutense University of Madrid.

Total number of executive directors
	20%
Percentage of Board

PROPRIETARY DIRECTORS

NAME OF DIRECTOR: Mr. JOHN MATTHEW DOWNING

NAME OR COMPANY NAME OF THE SIGNIFICANT SHAREHOLDER REPRESENTED OR THAT HAS PROPOSED THEIR APPOINTMENT: IMPERIAL BRANDS PLC

PROFILE:

PROFILE:
Mr. John Matthew Download Bornerly Imperial Tobaccol Integral Logista Holdings
Constitution of Color Collector (formerly Imperial Tobacco) legal department in 2005 Mr. John Matthew Downing is a Director of Compania de Blasch leepartment in 2005 and
S.A. He joined the Imperial Brands (formerial Tobaccal Bepartment in 2005 and S.A. He joined the Imperial Brands (formerly imperial Bronds P.C. Mr. Downing played a
currently serves as Group Company Secretary of Imperial Brands and has considerable currently serves as Group Company Secretary of Imperial on of AIradis and has considerable
leading role in all aspects of Imperial Tobacco's arquisition of Ausine leading role in all aspects of imperial Trobacco's acquisition of yearsess development and
experience in managing key corporate projects related to financing, business develo experience in managing key corporate projects reated to worked in worked in the corporate
other commercial matters. Prior to joinling imperial Brands or other commercial matters. Prior to joining Imperial Brandone department of Linklaters in both London and SE Asia (nombridge in 1993, after which he
a Bachelor of Arts (Honors) in History from the University of Cambridge in 1995. a Bachelor of Arts (Hollors) in History from the Distinction in 1995.
completed a conversion course in Law, passing with Distinction in 1995.

NAME OF DIRECTOR:

Mr. RICHARD GUY HATHAWAY

NAME OR COMPANY NAME OF THE SIGNIFICANT SHAREHOLDER REPRESENTED OR THAT HAS PROPOSED THEIR APPOINTMENT: IMPERIAL BRANDS PLC

PROFILE:

PROFILE:

Mr. Richard Guy Hathaway serves as Director of Finance Strategic lintibatives and has been
Mr. Richard Guy Hathaway serves as Biret function at imperial Bronds Group.
responsible for leading the Risk Management for KPMG from 2000 to 2012, where responsible for leading the Risk Management function at influence of the held different
Prior to Joining Imperial Tobacco, he worked for KPMG from 2000 to 2012, where he tor Prior to Joining Imperial Tobacco, he worked for Travel, Leisure and Tourism Sector for positions as Partner of the Company, being the Head of Travel, 2012), He also worked for ADS
KPMG UK first (2008-2010), and after for KPMG Europe (2010-2012), Mr. Hathaway re KPMG UK first (2008-2010), and after for KPMG Europe (2030 and Precived a Bachelor of
Anker, where he was Project Manager for IPO (1999-2000). Mr. Hathaway received of Anker, where he was Project Manager to IPO (1995-2006). M. Health of
Mathematics (Honors) (1988) from Oxford University in 1988, and is Fellow of the Institute of
Mathemati Chartered Accountants in England & Wales.

NAME OF DIRECTOR: Mr. JOHN MICHAEL JONES

NAME OR COMPANY NAME OF THE SIGNIFICANT SHAREHOLDER REPRESENTED OR THAT HAS PROPOSED THEIR APPOINTMENT: IMPERIAL BRANDS PLC

PROFILE:

PROFILE:

Mr., John Michael Jones John 2001, Ha has, gained, extensive financial experience over that time Mr. John Michael Jones joined imperial Brands in 1996 in the Pressure over that time
Director of Treasury since 2001. He has gained extensive financial exportience of Director of Treasury since 2001. He has gained extention and Risk Management activities of
and played a major role in the development of the financing acquisitions of R and played a major role in the development of the maneing and new man and of Reemtsma (2002),
the Imperial Brands Group, particularly with the transforming acquisitions of Re Altadis (2008) and the US brands (2015). He is currently responsible for treasury, insurance and
ed the US brands of the first of project for the group.

Altadis (2008) and the enagement of pensions for the group.
the financial risk management of pensions for with a the financial risk management of pensions for the group.
Prior to Imperial Brands, after with Prior to Imperial Brands, alter Internating with a fitegree Ann Area Assistant Group
University, John started his career in audit with KPMG (1992-1996), then as Assista University, John 'Sikson International PLC (1996-1998).

NAME OF DIRECTOR: Mr. AMAL PRAMANIK

NAME OR COMPANY NAME OF THE SIGNIFICANT SHAREHOLDER REPRESENTED OR THAT HAS PROPOSED THEIR APPOINTMENT: IMPERIAL BRANDS PLC

PROFILE:

PROFILE:
Mr. Amal Pramanik is a Bachelor of Civil Engineering (Hons) (Indian institute of Technology),
Mr. Amal Pramanik is Bachelor of Civil Engheirnig (hold) (norol Management, Ahmedabad,
Kharagpur, India) and MBA (Marketing & Systems) (lindian Institute of Company Kharagpur, India) and MBA (Marketing & Systems) (indian institute of Company Directors)
India); he has a Diploma in Non-Executive Directorship (Australian institute, The Pres India); he has a Diploma in Non-Executive Directorship (Adscrallence, The Preston Associates), He
and is a Certified Executive Coach, (Advanced Coaching Excellence, The held and is a Certified Executive Coach, (Advanced Claching Exceller.com, Previously, he held several
currently serves at Imperial Broup as Group Streter, Managing Director in UK currently serves at Imperial Group as Group Strategy on ector in UK and The positions within the Imperial Group (Growth Director, inchiegring on on and Inc.
Netherlands, and Marketing Director in Australia). Prior to joining the Group Imperial and I Netherlands, and Marketing Director in Australia). Prior to John P. H. B.
worked in different positions for other companies: Gillette India, Pepsi Cola India and ITC India

(BAT).

INDEPENDENT DIRECTORS

NAME OF DIRECTOR: MAME GREGORIO MARAÑÓN Y BERTRÁN DE LIS

PROFILE:

Mr. Gregorio Marañón y Bertrán de Lis, Marqués de Marañón, is the Chairman of Compañía de
Mr. Gregorio Maran Heldings S.A. He also serves as Chairman of Universal M Mr. Gregorio Marañón y Bertrán de Lis, Marques de Marchi, is Cheman of Universal Music,
Distribución Integral Logista Holdings S.A. Hercher as Chairmanio Nacional. H Distribución Integral Logista Holdings S.A. He also Serves as consinivational. He is Chalman
Chairman of Alr City Madrid Sur, and member of the Board of Patrimonio N Chairman of Alr City Maurid Sur, and member of the Board of Creating St, Honorary President of
of the Board and the Executive Chairman, of the Teatro Real opera hill he of the Board and the Executive Committee of the Teatro de La Abadla, Frunding Trustee of the
the Real Fundación de Toledo; Chairman of the Teatro del Flierito; Trustee the Real Fundación de Toledo; Chairman of the Museo Ortega Marañón Foundation; Trustee of the Museo ael ; Internacional de Toledo para la Paz; Permanent Member of the Redres . He was awarded the
San Fernando and of the Académie Européenne des Sciences et des Arts, He was awarded San Fernando and of the Academie Europeenne des Sciences et ues respons and the Gold Medal of
Grand Cross of Alfonso in Che Gold Medal for Merit in Fine Arts, and the Cincai Grand Cross of Alfonso X el Sabio, the Gold Medal for Went in the May 1.
Castilla-La Mancha Region. He was appointed Commandeur de la Légion d'Honneur Française and
Castilla Castilla-La Mancha Region. He was opploidella Republica Italiana.
Commendatore della Ordine de la Stella della Republica Italiana.

Commendature della Orine de le 1964 from Complutense University of Madrid, and
Mr. Marañón received his Bachelor of Brogram In 1979 at the IESE Business School. Mr. Marañón received his Bachelor of Laws in 1964 hom Somp
completed an Advanced Management Program In 1979 at the IESE Business School.

NAME OF DIRECTOR:

Ms. CRISTINA GARMENDIA MENDIZÁBAL

PROFILE:

PROFILE:
Ms, Cristina Garmendia Mendia Piological Sciences, specialishing in Genetics, specialisling in Genetics, Ms, Cristina Garmendia Mendizabal obtained a Hrum Blokers Salas laboratory, Severo Octor
and became a Doctor of Molecular Biology at the Dr MBA from the IESE Business and became a Doctor of Molecular Biology at the DF Mal gurts an MBA from the IESE Business
Centre for Molecular Biology. She completed her studies with an MBA from the IESE B School of the University of Navarra.

School of the University of the Spanish Government during the whole of its She was Minister of Science and Innovation in the Spanish Development of the companies
IXth Legislature. Since leaving the Government, she resumed her responsibilities at the she herself founded, Yslos and Genetrix.

she hersen Tounded, TSEC and a member of various advisory boards, member of She is chalrperson at the Fundacion COTEC and if nember of view, Including Mediaset, CaixaBank
university councils and sits on the Boards of several companies, Including Medi and Logista.

and Logista.
She is an advisor at the European Union, as member of the High Level Group (HLG) that has She is an advisor at the European Union, as thember of the mayork Program of the EU (2021-2026).

2026).
Her work and entrepreneurial vision have been recognized on several occasions with awards for research and innovation in business.

NAME OF DIRECTOR:

Mr. ALAIN MINC

PROFILE:

PROPILE:

Mr. Alain Minc is a graduate of the Ecole des Mines de Paris and of ENA, After serving as Inspectour Mr. Alain Minc is a graduate of the Ecole des Milles the Philips of Chief Financial Officer. In 1986,
des Finances, he joined Compagnited in prosties industriall Riunite Inte des Finances, he joined Compagnie de Salin-Gounl (Compagnie Industriall Riunite international)
Mr. Mine became Vice-Chairman of CR international (Compagnes) which were the no Mr. Minc became Vice-Chalman of Chiliternational (companies) which were the non-Italian
and General Manager of Cerus (Compagnies Européennes companies and the and General Manager of Cerus (Compagnes curopeanes of numerous companies and the
affillates of Benedetti Group. He has been Board newspaper (19/12/94 to affillates of Benedetti Group. He has been Board member of mannel of them newspaper (19/12/94 to

11/02/2008).
Today he is Chairman of AM Consell and Sanet. He is Commandeur de La Légion d'Henneur Today he is Chairman of AM Consell and Sand Cross of the Order of Civil Merit (Spain). Alain
(France); Commander of the British Empire; Grand Cross of the Order of Sp (France); Commander of the British Emple; Grand Cross (conomics, history, social and politics,
Minc wrote more than 30 books on different subjects (economics, history, social among others).

NAME OF DIRECTOR:

Mr. JAIME CARVAJAL HOYOS

PROFILE:

PROFILE:
Mr. Carvajal Hoyos holds a Bachelor of Arts in Physics from Princeton University (New Jersey), USA). Mr. Mr. Carvajal Hoyos holds a Bachelor of Ars in Hyulsitions department of Lehman Brothers'in New York
started his professional career in the Mergers and Arculsity firm. Mr. Car started his professional career in the Mergers and Actures for , Mr. Carvajal returned to
and, after some years in Spain where in Founded his own financial advisor the was Ch and, after some years in Spain while he rounded in Washington D.C. where he was Chief of the
the United States, this time to The Wold Bank in Washington General Manager of the United States, this time to The Wold Bank in Vestington of Seneral Manager of Sabadell Banca
President among other posts. Upon this relands Officer, of Arcano, Partners President among other posts. Upon his return to spaint of Arcano Parcano Partners, the advisory and Privada in Barcelona and is currently Chief Executive Oncellers investment management firm of which he is a cu-lottion to his position at Arcuso Partners and at Grupo
EVO Banco, S.A. until May 2019. Currently, in addition to Microber of EVO Banco, S.A. until May 2019. Currently, in adoubly to ink and member of the Board of a number of a number of a
Logista, Mr. Carvajal is member of the Board of of elsich h Logista, Mr. Carvejal is member of the Board of Xirona (of which he was Vicepresident for seven years) or
Foundations such as the Fundación Princesa de Girona (of which he w the Fundación Joan Bosca as well we member of the International Advisory Board of the Teatro Real of Madrid.

Number of independent directors	40%
Percentage of the Board

State whether any independent director receives from the company or any company in the State whether any independent director receives molities a director, or has or has has has has has has has has has has group any amount or benefit other than company in the group during the past year,
business relationship with the company or any company in the gast year, business relationship with the company or ally company in the director or senior executive
whether In his or her own name as a significant shareholder, director or senior exe whether in his bas or has had such a relationship.

NO

NO
C.1.4 Complete the following table with information relating to the number of female directors
C.1.4 Complete the following to wall as the category of each: Complete the following table the category of each:

	Number of female directors				% of directors for each category
			Year !- 2	Year t-3	Year I	Year t-1	Year t-2.	Year t-3
	Year t	Year 1-1	C	0	0.00%	0.00%	0 00%	0.00%
Executive	0	0	0	0	0.00%	0.0036	0 00%	0.00%
Proprietary	0	C			10.00%	10.00%	10.00000	10,71%
Independent				0	0.00%	0.00%	0.00%	0.00%
Other external	0	0			10.00%	10.00%	10.00%	10.00%
Total

C.1.5 State whether the company has diversity policies in relation to the Board of Directors State whether the company has diversity poncles, disability and training and of the company on such questions as age, genuderprises, in accordance with the professional experience. Small and meditirsized enterprises, me least the policy they
definition set out in the Accounts Audit Act, will have to report at least the policy th definition set out in relation to gender diversity.

No U Yes 区

Partial policies

Should this be the case, describe these diversity policies, their objectives, the Should this be the case, describe these been applied and thely results over the year.
measures and way in which they have been applied and thely results over the year.
The ma measures and way in which they have been applied and of Directors and the Also state the specific measures adopted by the board of balanced and diverse presence of directors.

presence of directors.
In the event that the company does not apply a diversity policy, explain the reasons why.

Description of policies, objectives, measures and how they have been implemented, including results
achieved

The Board of Directors of the Company, of 19 December 2017, approved the Policy on Selection The Board of Directors of the Company, of 13 December 2007, pep- diversity, experience ond knowledge."

knowledge."
The Policy also establishes that "the Boord of Directors will ensure that the procedures for The Policy also establishes that "the Boord of gendence and knowledge, hove no lotent
selecting its members promote diversity of gendence and knowledge, focuse the selection selecting its members promote diversity of gender, expension and in and in and in the selection of female Bourd Members."

The Appointments and Remuneration Committee proposes, without any blas of gender diversity, The Appointments and Remuneration Committee proposes, writerience in the Group's activities,
the most convenient candidate, with the best knowledge and experiences, with memb the most convenient candidate, with the best Kiowledge and expenders, with members who also meet the status of female Board Member.

C.1.6 Describe the means, if any, agreed upon by the appointments committee to ensure that Describe the means, if any, agreed though by the expendent of female
selection procedures do not contain hidden biases and includes women who meet the selection procedures do not contain includes women who meet the meet the directors and that the company deliberatery success and which makes it possible to achieve a balance between men and women:

See Section C.1.5 above

In the event that there are few or no female directors in spite of any measures adopted, in the evenain the reasons that justify such a situation:

	Explanation of means
See Section C.1.5 above

C.1.7 Describe the conclusions of the appointments committee regarding verification of
eather of the conclusions in the collections of an directors In particular, as it relat Describe the conclusions of the appoliticators; in particular, as it relates to the goal of
compliance with the selection policy for directors; represents at least 30 compliance with the selection policy for of othectors represents at least 30% of the total
ensuring that the number of female directors represents at least 3070. membership of the Board of Directors by the year 2020.

Sec Section C.1.5 above

C.1.8 If applicable, please explain the reasons for the appointment of any proprietary directors
and the may be in the bear the base then a 3% goulty interest: if applicable, please explain the vith less than a 3% equity interest:

Name of shareholder	Reason
No. 113

State whether the Board has failed to meet any formal requests for membership from State whether the Board has falled to meet is on higher than that of others at whose shareholders whose equity interest is equal to of .ifghis is the case, please explain why the aforementloned requests were not met:

No W

C.1.9 State the powers delegated by the Board of Directors, as the case may be, to directors or Board committees:

Vas 11

	Brief description
Name of director LUIS EGIDO GALVEZ	He has been delegated all the faculties of the Board of Directors that can be delegated according to the Law and the Bylaws, excluding the faculties that, according to Article 38 of the Bylaws of the Company, require the approval of the resolution by, at least, the 70% of the members of the Board of Directors,

C.1.10 Identify any members of the Board who are also directors or officers in other companies

C.1.10 Identify of a lot alletical company is a member: In the group of which the listed company is a member:

Name (person or company) of the director	Company name of the entity of the Group	Position	2 Dochessie Baye excentive functional
	Compañía de Distribución Integral	Chairman	VE5
Mr. Luis Egido Galvez	Logista, S.A.U. Logista Italia, S.p.A.	Chairman	YES
Mr. Luis Egido Galvez Don Luis Egido Galvez	Logista France SAS	Representative of the President (Compañía de Distribución Integral Logista SAU)	YES
Mr. Rafael De Juan Lopez	Compañía de Distribución Integral Lugista, S.A.U.	Secretary Director	465
Mr. Rafael De Juan Lopez	Compañía de Distribución Integral Logista Publicaciones, S.L.U.	Chairman	1400
Mr. Rafael De Juan López	Dronas 2002 S.L.U.	Drector	NO
	Logista Pharma, S.A.	Directur	NO
Mr. Rafael De Juan Lopez Mr. Rafael De Juan Lopez	Logista Italia, Spa	Director	NO

C.1.11 List any legal-person directors of your company who are members of the Board of List any legal-person directors of Your company official securities markets other than group

Directors of other companies listed on official securities markets other than gro Directors of 'other communicated that status to the Company:

Name (person or company) of the director	Name of Ilsted company	Position
Ms. Cristina Garmendia Mendizábal	Mediaset España Comunicación, S.A.	Director
Ms. Cristina Garmendia Mendizábal	CalxaBank, S.A.	Director

C.1.12 State whether the company has established rules on the number of boards on which its . State whether the company has established rules on the identifying, where appropriate,

directors may hold seats, providing details if applicable, identifying, where appropr where this is regulated:

No D Yes ZI

Explanation of the rules and identification of the document where this is regulated

Persons involved in prohibition or legal incompatibility processes may not be appainted as Persons involved in prohibition or legal incompany of the Company may become part at
Directors of the Logista Group. Moreover, the Directors of the Company of nine Loards of Directors of the Logista Group. Moreover, the Driver, of a maximum of nine boards of
the same time, and with the limitation provided by of the Board of Directors the same time, and with the limitation provided by T&W, of the Board of Directors
directors of listed companies other than the Logista Group (Article 23 of the Board of Direc Regulations).

C.1.13 State total remuneration received by the Board of Directors:

Board remuneration in financial year (thousand euros)	4,477
Amount of vested pension interests for current members (thousand curos)	3,119
Amount of vested pension interests for former members (thousand euros)	0
Remarks

C.1.14 Identify senior management staff who are not executive directors and thelr total
e remuneration accrued during the year:

Name	Position
Mr. Pascal Ageron	General Manager - Tobacco, Telecoms & Strator France
Mr. Jan Babst	Corporate Director of Information Services
Mr. Antonio García Villanueva	Corporate Resources Director
Mr. Miguel Gomez Prado	CEO - Logista Pharma
Mr. Juan José Guajardo-Fajardo Villada	Corporate Human Resources Director
Mr. Antonio Mansilla Laguia	Corporate Operations Director
Ms, Gloria Martin Gimeno	Investors Relations And Strategic Analysis Corporate Director
Mr. Francisco Pastrana Pérez	General Manager - Tobacco and Convenience Iberia
Mr. Pablo Rebollo Pericot	General Manager Nacex and Integra2
Mr. Manuel Suarez Noriega	Corporate Finance Director
Ms. Laura Tempiado Martin	Corporate Internal Audit Director

Total senior management remuneration (thousand euros)

C.1.15 State whether the Board rules were amended during the year:

No W Yes []

C.1.16 Specify the procedures for selection, appointment, re-election and removal of directors:

C.1.1.16 Specify the procedures for the poplied in each procedure. Specify the procedures for selection, and criteria applied in each procedure.
the competent bodies, steps to follow and criteria applied in each procedure.

Directors' Appointments

Directors Appointments
The appointment, ratlication, re-election and removal of Directors to make appointments by The appointment, ratification, re-election and Tembrar of Directors to make appointments by co-option.

co-option.
If during the term for which a Director was elected that Director ceases to be a Director of the If during the term for which a Director was elected that Birector, may appoint a Director by co-option.

option.
The co-option will be governed by the provisions of law, with the Director appointed by the Board The co-option will be govelired to be a shareholder of the Company.

not necessarily aling required of co-option in accordinee with the provisions of law

The appointment of Directors of Checker Concral Meeting, which must ratify the appointme The appointment of Directors by the System or the must ratify the appointment or
will be effective until the first following General Meeting of the next following will be effective until the first following other a with highed in the holding of the next following
designate the person that thereafter is to fill of the General Meeting, a designate the person that thereatter's to hill the position, or antibility, and before it is held.
General Meeting, if the vacancy occurs after the call of the General Meetin

theneral web angeling of re-election of Directors corresponds to the Appointments and Proposal of appointment or re-election of Directors Ebrivaportal itself, in other cases,

Itsell, in uther cases:

A proposal of appointment, re-election or removal of any non-independent Director in addition A proposal of appointment, re-election of remaints and Remuneration Committee.
must be preceded by a report of the Appointments and Remuneration Committee.

must be preceded by a spec must attach a justifyling report of the Board of Directors, which will be The proposal in any event must attach a justifying Tepers candidate, which will be
evaluates the competence, experience of the proposed candidate, which will be evaluates the competence, experience and microsof the Board of Directors itself.
attached to the minutes of the General Meeting or of the Board of Directors itself.

attached to the minutes and a time a loral answer to findividuals who are a ppointed as The provisions of this section also are application of the individual representative
representatives of a Director that is a legal person. The individual representative representatives of a Director that is a legal person person of Remuneration Committee.
must be submitted to a report of the Appointments and Remuneration Committee.

must be submitted to a rope the following competencies (among others) for the Appointments.
The Board Regulations state the 18-2 of and d) of the Repulations): The Board Regulations State the Tollowing Co., c) and d) of the Regulations):

• · Evaluating the skills, knowledge and experience required on the Board. For these Evaluating the skills, knowledge and experience readidates that are to fill each
  purposes, it will define the functions and skills required of candidates that are to purposes, it will define the functions and skills required by for them to be able to
  vacancy and will evaluate the time and dedication necessary for them to be able to effectively perform their duties.
• enecavely perform of Directors of independent Directors to be appointed by Making proposals to the Board of Directors of the General Shareholders Meeting, and
  co-option or for submission to decision by the General by the Meeting, co-option or for submission to "acon to" aconfigure by the Meeting.
• · Inform about the appointment, ratification, reappointment and removal of the Managing Inform about the appointment, runitiation, removal of the Managing independent Directors, as well as the appositunent understand the permanent delegation of its relevant faculties to them.

Eligibility, Incompatibilities.

Elligiblity, incolline and the Appointments and Remuneration Committee, within the scope of The Board of Directors and the Appointments and the candidates are selected from among
their competencies, shall endeavour to ensure that the candidates and that have the nec their competencies, shall endeavour to ensure that the the called that have the necessary availability for the proper performance of their duties as Directors, and shall be particularly rigorous in choosing the persons to cover the posts of Independent Directors.

In the case a Director is a legal entity, the requirements indicated will also be applicable to the individual representing the organisation, and, in addition, the Director duties set out in these Regulations will also be enforceable on a personal level.

Persons involved in prohibition or legal incompatibility processes may not be appointed as Directors of the Company.

Moreover, the Directors of the Company may become part at the same time, and with the Moredver, unvided by Law, of a maximum of nine boards of directors of listed companies other than the Company (Article 23 of the Board of Directors' Regulations)

Re-election of Directors

The proposals for re-election of Directors that the Board of Directors decides to present to the The proposits for 1c blereholders shall be subject to a formal procedure, which must necessarily General weeting of Short be Appointments and Remuneration Committee in which the quality influork and dedication to the post of the proposed Directors during the preceding term of office is evaluated.

The Board of Directors shall endeavour to ensure that the External Directors who are re-elected The buard or birectors assigned to the same Committee (Article 24 of the Board of Directors' Regulations).

Term of office

Directors shall occupy their post during the period established in the By-Laws, which shall in no case exceed four years, and may be re-elected.

Directors appointed by the Board of Directors by co-opting to fill a vacancy pursuant to these Regulations shall occupy their posts until the date of the next General Meeting of Shareholders, licegulations shall occapy their problem of Shareholders (Article 25 of the Board of Directors' Regulations).

Board Assessment

The Board of Directors will dedicate at least one meeting a year to assessing its operation and the quality of work performed by Committees.

Debates and Voting

In accordance with the provisions in article 27 of the Board Regulations, Directors concerned with in accordance with the proposals will not intervene in debates and voting on those matters.

C.1.17 Explain how the annual evaluation of the Board has given rise to significant changes in its Internal organisation and to procedures applicable to its activities:

On October 30th, 2018, the Company's Board of Directors approved an Improvement Action Plan for its functioning and that of its Audit and Control and Appointments and Remuneration for 13 functioning face the performance of the Chairman, the CEO and the Secretary of the Board. As a consequence of such Plan:

1. The information sent to Board has been revised, reducing the weight of recurrent Information and concentrating the reflection and analysis elements.

2. 1. The CEO, together with the Appointments and Remuneration Committee, has improved Talent and Key Management Succession Plans.
3. 1. The information for Directors is sent in advance.
4. 1. The intervention and debate on the matters discussed at the Audit and Control Committee has been strengthened.

Describe the evaluation process and the areas evaluated by the Board of Directors with the help, if any, of external advisors, regarding the function and composition of the board and its committees and any other area or aspect that has been evaluated.

The Board of Directors of September 24th, 2019 has evaluated, in relation to fiscal year 2018-2019, the following:

1. The Board of Directors of the Company, In the followings aspects:

2. · General questions

3. Meetings of the Board .
4. · Functions and Responsibilities
5. · Composition
6. 1. The Audit and Control Committee, in the following aspects:
   2. · Composition
   3. General questions .
   4. . Meetings
   5. · Functions and Responsibilities
7. 1. The Appointments and Remuneration Committee, in the following aspects:
   2. · Composition
   3. General questions .
   4. Meetings .
   5. · Functions and Responsibilities

4 .- The Chairman of the Board (Performance)

5 .- The CEO (Performance)

6 .- The Secretary of the Board (Performance)

This self-assessment was carried out, on the proposal of the Appointments and Remuneration Committee, at its session of June 25, 2019, and has had the external advice of KPMG Asesores, S.L.

C.1.18 Describe, in those years in which the external advisor has participated, in with the relationships that the external advisor or any group company maintains with the company or any company in its group.

FY 2015-2016: KPMG Asesores, S.L.

• Legal services of elaboration of expert reports as independent experts for Compañía de Distribución Integral Logista S.A.U., provided by KPMG Asesores, S.L.

FY 2018-2019: KPMG Asesores, S.L.

• · Internal Audit Services for Logista France, SAS, provided by KPMG, S.A.
• Legal services of elaboration of expert reports as independent experts for Compañía de Distribución Integral Logista S.A.U., provided by KPMG Asesores, S.L.
• Due Diligence Advisory Services for Compañía de Distribución Integral Logista S.A.U., provided by KPMG AG.
• Services of external evaluation of the Internal Audit quality for Compañía de Distribución Integral Logista Holdings, S.A., provided KPMG Asesores, S.L.

C.1.19 State the situations in which directors are required to resign.

In accordance with article 26.2 of the Board Regulations, Directors must place their post at the Peard of Directors In accordance with article firectors and formally resign as a Director, if the Board of Directors considers it appropriate based on the following counts;

• a) When they are removed from the executive posts to which their appointment as Directors was associated;
• b) When they are involved in any of the scenarios of incompatibility or prohibition envisaged by the Law;
• c) When Directors have performed acts that are contrary to the diligence with which they are which birectors nave perform their duties and obligations as Directors;
• d) When their presence on the Board could jeopardise the interests of the Company or cause serious damage to its credibility and reputation. In particular, Directors should inform the serious damage to its credibility and it acainst them and the progress of any subsequent trial;
• e) The moment a Director is indicted or tried for any of the offences stated in Company legislation, the Board of Directors should open an investigation and, in light of the particular circumstances, decide whether or not he or she should be called on to resign. The Board circumstances, decide whether of all such determinations in the Annual Corporate Governance Report.
• f) When, having been appointed on the proposal of a significant shareholder, the later notifiles ond When, having been appor, of the decision of the shareholder not to reappoint him at the end the Company, at any time, or the ificant shareholder transfers, all its shareholding in the Company.

C.1.20 Are qualified majorities other than those established by law required for any specific decision?

No. 0 Yes 18

If so, please describe any differences.

According to the provisions of Article 38 of the Company By-Laws, the Board shall approve According to the provisions of Article 38 or the sating, cither in person or
resolutions by absolute majority of the Directors attending the meeting, cither ma resolutions by absolute majority of the birectors of any resolutions related to any of the pire
via proxy. Notwithstanding the above, a nortitly, vete, of at least, 70% of th via proxy. Notwithstanding the above, the adoption of at least 70% of the Directors, as
matters set out below will require the of that nercentare does not result in a whole matters set out below will require the positive coercentage does not result in a whole
rounded up in case that the application of that percentage and will not be delegated: rounded up in case that the application of the Board of Directors and will not be delegated:
number of Directors, that form part of the Board of Directors and will not be del

• number of reduction in the share capital of the Company in accordance with article any increase or reduction in the share capital of the of my bonds or securities pursuant
  7 of these By-laws, or the issuance by the Company of any bonds or securities pursuan to Title III of these By-laws.
• to The life in bit need an nual plan in relation to the capital expenditure, Investments and the approval of an annual plan in Telation to the company in the following year (the "Annual Capex Plan");
• Amnual Capex Frida " line"

c) the acquisition of all or part of any business of any third party wher like interests of any third the acquisition of all or part of any business or other like interests of any third.
purchase (whether direct or indirect) of Shares, assets or other fixe Company or any purchase (whether direct or indirect) or shares, issues or and of the Company or any member of its Group;
- the member of his croses
d) the disposal of all or part of any business to any third party whether by way of the the disposal of all or part of any bustiess to assets or other like interests (including
disposal (whether direct or Indirect) of shares, assets or other of its Group; disposal (whether direct or inoirect) of shares, as as as as a member of its Group;
by way of merger or business combination) by the Company or any member of its Group;
- e) any decision of the Company to enter into any partnership or joint venture or any other any decision of or distribute profits or assets;
- f) any decision of the Company to incur or agree to incur, whether directly, or inditectly, or inditectly, or inditectly, any any decision of the Company to incur or egree tending commitment in respect of any
any capital expenditure, investment or other funne, to, the extent that such capital any capital expendlure, investment of outer size to the extent that such capital
matter in excess of €1,000,000 in adja commitment (including the amount of such matter in excess of €1,000,000 m aggreamstant (including the amount of such expenditure, investment or other funding commitment) is set out in the Annual capital expenditure, investment or other funding commons. Commondance with section (b) above;
Capex Plan for that period that has been approved in accordance with section (b)
- g) any decision of the Company to amend the terms of its borrowing or indebtedness in
the or any decision of the Company to amend the terms of to create or incur borrowing or
the nature of borrowing or grant guarantees, or to create or incur borrowing or
e indebtedness in the nature of new borrowing
- h) the creation of any mortgage, pledge, lien, charge, assignment of any of such securities,
the than a the creation of any mortgage, pleoge, lien, charge, boother company, other than a
hypothecation or other security interest in relation to the ordinary course of hypothecation or other security interest in relation teatler. The ordinary course of
security interest created by operation of law as a result of the ordinary course of business of the Company; and
- i) any decision to delegate any powers of the Board of Directors to a Managing Director,
Committee of the Board to any Committee of the Board. any decision to delegate any the Board to any Committee of the Board.

For the purposes of counting the majority of members of the Board of Directors for the For the purposes of counting the majority of thembers of the Board that may be under
adoption of the abovementioned resolutions, the members of the Board that may be under a conflict of interest and that shall abstain from voting, shall be discounted from the total a connect of members of the Board on which shall be calculated said majority.

C.1.21 Explain whether there are any specific requirements, other than those relating to directors, to be appointed as chairman of the Board of Directors.

No W Ves fl

C.1.22 State whether the Articles of Association or the Board Rules establish any limit as to the age of directors:

No 18 Yes 0

C.1.23 State whether the Articles of Association or the Board Rules establish any term Ilmits for independent directors other than those required by law:

No N Yes II

C.1.24 State whether the Articles of Association or Board Rules establish specific proxy rules for votes at Board meetings, how they are to be delegated and, In particular, the maximum number of delegations that a director may have, as well as if any limit regarding the category of director to whom votes may be delegated and whether a director is the category of unrector of the same category. If so, please briefly describe the rules.

The Directors must attend Board meetings and, when they cannot do so in person, they The Director for their representation and vote to be granted in favour of another Board member, including appropriate instructions.

The delegation may be made by letter, fax, telegram, e-mail, or by any other valld means acknowledged in writing.

Non-executive Directors may do so only to another non-executive Director.

C.1.25 State the number of meetings held by the Board of Directors during the year, and if applicable, the number of times the Board met without the chalrman present. Meetings applicable, the number specific proxy instructions are to be counted as attended.

Number of Board meetings
Number of Board meetings without the chalrman

State the number of meetings held by the coordinating director with the other directors, where there was neither attendance nor representation of any executive director:

Number of meetings

Please specify the number of meetings held by each committee of the Board during the year:

Number of meetings held by the Audit Committee
Number of Meetings held by the Appointments and Remuneration
Committee

C.1.26 State the number of meetings held by the Board of Directors during the year in which all of its directors were present. For the purposes of this section, proxies given with specific instructions should be considered as attendance

Number of meetings when all directors attended
% of attendance over total votes during the year	96.7
Number of moetings in situ or representations made with specific instructions of all directors
% of votes issued at in situ meetings or with representations made with specific instructions out of all votes cast during the year	97.7

C.1.27 State if the individual and consolidated financial statements submitted to the Board for preparation were previously certified:

No 区 Yes |]

C.1.28 Explain any measures established by the Board of Directors to prevent the indivited to and consolidated financial statements prepared by the Board from being submitted to the General Shareholders' Meeting with a qualified audit opinion.

In accordance with the provisions of Article 17.2 of the Board of Directors' Regulations and in accordance with the problem Committee rules, the Audit and Control Committee, shall of Article S.L of the Audit and Celes in relation to the control of financial information, shall in what Fereis to its responsibilities can present the Company's accounts to the General supervise that the board or qualifications in the auditor's report. In the exceptional case Meeting without imitabolis or he Chairman of the Audit and Control Committee and the that qualifications exist, boaccount to shareholders of their scope and content.

Prior analysis of economic and financial information, including the analysis of the main Prior analysis or economic in the consolidation perimeter, and evaluation of the potential impacts arising from changes in the Accounting Standards.

Supervision of the annual planning of the audit of accounts, as well as the Internal Control System of Financial Information.

Quarterly attendance of external auditors, in joint action, which allows managing in Quarterly attendance of externer dobined a significant financial impact on the Group's assets, results or reputation.

Historically, the Company's audit reports have been filed without qualification.

C.1.29 Is the secretary of the Board also a director?

No 1 Yes [x]

C.1.30 State, if any, the concrete measures established by the entity to ensure the independence of its external auditors, financial analysts, investment banks, and rating moependence or now legal provisions have been implemented in practice.

Relations of the Board with external auditors will take place via the Audit and Control Committee

The Board of Directors shall refrain from hiring those audit firms whose projected fees including all Items exceed five per cent of its total revenues during the previous financial year.

The Board of Directors shall make public the total fees paid to the audit firm for services other than accounts auditing.

In addition, the Audit and Control Committee has among its competencies, the following:

• Establish appropriate relationships with external auditors or audit firms to gather Information on those matters which may threaten his/her independence for examination by the Committee, and any other matters relative to the development of Account auditing, and when appropriate, authorise services other than those prohibited under the conditions provided in the relevant regulations regarding the independence of auditors, as well as any other communications schedules in Account auditing legislation and Auditing technical regulations. In any event, it must receive from the external auditors or audit firms a written declaration on an annual basis of their independence against the Logista Group or entities directly or Indirectly related thereto, as well as detailed information on an individual basis about additional services of any kind provided to and the corresponding fees received from such entities by such auditors or persons or entities related thereto, pursuant to the Laws on auditing accounts. The Committee shall ensure that the Company and the external auditor adhere to current regulations on the provision of non-audit services, limits on the concentration of the auditor's business and other requirements concerning auditor independence.

in this regard, the Committee shall ensure that the remuneration of the external auditor does not campromise its quality or independence.

• On an annual basis, prior to the audit report, issue a report containing an opinion on the independence of the auditors and on whether the independence of auditors and audit firms has been compromised. This report, which shall be published in the Logista Group website well in advance of the Annual General Meeting, in any event must cover a detailed evaluation of the provision of each and every additional service referred to in the preceding section, taken individually and as a whole, other than the legal audit, as regards independence of the auditors and regulations governing account audit activities.

In accordance with the Company's Policy of Information and Communications with Shareholders, Securities Markets and Public Opinion, meetings with analysts, investors and communication media should be planned in advance, so that, in no case, any information which could place them in a privileged or advantageous situation is delivered to them.

C.1.31 State whether the company changed its external auditor during the year. If so, please Identify the incoming and outgoing auditor:

$$
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C.1.32 State whether the audit firm provides any non-audit services to the company and/or Its Group and, if so, the fees paid and the corresponding percentage of total fees invoiced to the company and/or Group:

Yes 8	Nall
	Company	Group Companies	18101
Amount Invoiced for non-audit services (thousand euros)	80	594	674
Amount Invoiced for non-audit services/Amount for audit work (in %)	79%	21%	33%

C.1.33 State whether the auditors' report on the financial statements for the preceding year State whether the auditors' report on the minutial statemist of the reasons given by the loven by the contains a qualified opinion or reservations. If so, presse cipality in the extent of the chairman of qualified opinion or reservations.

Yes !!

No 18

C.1.34 State the number of consecutive years the current audit firm has been auditing the the number of State the number of consecutive years the current unthermore, state the number of
financial statements of the company and/or group. Furthermore, state that financial statements of the company and/Or-Eroup. Turchamer.
years audited by the current audit firm as a percentage of the total number of years that
the financial statements have been audited:

Individual	Consolidated
ਦਿ	0
Individual	Cansolidated
100.00%	100.00%

C.1.35 State whether there is a procedure whereby directors have the information necessary

the subject of the counting of the noveraine hodles with sufficient time and provid s State whether there is a procedure whereby areetors nation of the and provide details
to prepare the meetings of the governing bodies with sufficient time and provide deta if applicable:

No D Yes 区 Summoning of ordinary sessions will be performed by letter, fax, telegram or e-mail, or by any
s and Summoning of ordinary sessions will be performed by lece, increations of the signature
other means which provides evides and this notification will be authorised with Secreta other means which provides enidence, and this nothes signatures of the Secretary of the Secretary of the Secretary of the Secretary of the minimum of the Chairman, or the person substituting the Charman, or the visit.
Deputy-Secretary following the Chairman's orders. The call will be effectuated with a minimum

notice of two days. notice of two days.
Except for Justified cause, the call will include an agenda for the meeting and will be of Except for Justified cause, the call will include an agenda for the meeting one increasing of
by a summary of all the necessary information relevant to deliberation and fadop by a summal

resolutions regarding the matters a be the meeting and will attach a summary of Absent Just cause, the call will include the agenda for the meeting the resolutions regarding the the necessary information relevant to deliberation and adopinon and arrive at a decision,
matters to be considered, clearly indicating on which points birectors must arrive m matters to be considered, clearly indicating on wrater possible the material they need.
so they can study the matter beforehand or gather the material the present

so they can study the matter for urgency, the Chairman may wish to present decisions of

In the event that, for reasons of urgency, the Chairman may wish inclusion In the event that, for reasons of urgency, the Chainnan magenda, their inclusion will require
resolutions for Board approval that were not on the majority of Directors presen resolutions for Board approval that were not on the rity of Directors present.
the express prior consent, duly minuted, of the majority of Directors of the obligation

the express prior consent, univers Regulations sets as one of the obligations of the Director,

Furthermore, Article 33 of the Board Regulations sets as well as meetings of t Furthermore, Article 33 of the Board Regulations sets as one of the Bings
to gather Information and prepare suitably for Board meetings as well as meetings of the
substition delegated bodies or Committees he is a member of.

delegated bodies or Confinities and the Board Regulations, Directors have the duty to demand

Finally, and according to Article Careenssy such annropriate and necessary infor Finally, and according to Article 28 of the Board Regulations, but necessary information allowing
and the right to receive from the Company such appropriate and the companies and the right to receive from the Company such appropriate and the companies of the
them to fulfil their obligations. This right to information is extensible to all the comp them to fullif then bether these are national or foreign.

With the aim of not disturbing the ordinary management of the Company, the Secretary with the aim of not disturbing the orginal will be chairman, Managing Director or the Secretary
information duties will be channelled through the Chairman, Managing the infor information duties will be channelled through the Chamidt, wanning the information directly,
of the Board of Directors, who will assist the Director's request providing on th of the Board of Directors, who will assist the Director's request proving on the measures
facilitating contacts with the relevant department in situ so that examination tasks may be performed in situ.

C.1.36 State whether the company has established rules whereby directors must provide the S State whether the company has established resign, in circumstances that may damage the
Information regarding and, if applicable, resign, in circumstances that may damage th information regarding and reputation. If so, provide details:
company's standing and reputation. If so, provide details:

	Ves 区	No D
			- - -
See Section C.1.19
	- look, be-			Comments of the comments of the first of the first of

C.1.37 State whether any member of the Board of Directors has notified the company that he t State whether any member of the Board on birectors have boen filed against him or
or she has been tried or notified that legal proceedings have boen filed against him or or she has been thea osscribed In Article 213 of the LSC:

No 20 Yes []

C.1.38 Detail any material agreements entered into by the company that come into force, are
nting the country to the todals the overt of a change in control of the company fo Detail any material agreements entered into by the company to
modified or are terminated in the event of a change in control of the company following
a public takeover bid, and their effects.

a public takeover this any agreement that may come into force in the event of a
The Company has not reactived from a public takeover bid. The Company has not reached with the a public takeover bid.

C.1.39 Identify individually for director, and generally in other cases, and provide detail of any I Identify individually for director, and generally in drier toss, executives or employees
agreements made between the company and its directors, executives or di agreements made between the company and ris the event of resignation or dismissal
containing indemnity or golden para following a takeover bid or any other type containing indemnity or golden parachute clauses in the Crokes.
or termination of employment without cause following a takeover bid or any other type of transaction

Number of beneficiaries: 10

Type of beneficiaries:

Certain senior managers

Description of the resolution:

• ription of the resolution.
  « Compensation in the state of twrongful adismissal (10) agreements). The Compensation in the case of " wholenges will be of 3 months' salary, or of 1 a or compensation to pay, depending on the Lase, will be orgal compensation is higher.
  2 years of Fix and Variable Remuneration, unless the legal compensation \s higher.
• 2 years of lix and contractual non-compete clause (9 agreements): 6 or 12 months of Fix and Variable Remuneration.
• months of TX and Tox and Control (4 agreements): minimum of 24 months of Fix and Variable Remuneration.

of Fix and value variable now were executed before the admission to listing of the Company's shares.

State if these contracts have been communicated to and/or approved by management State if these contracts have been communities in specify the procedures, events and
bodies of the company or of the Group. If they have; specify the procedures, this; bodies of the company of of the GRAP.
nature of the bodies responsible for their approval or for communicating this:

	Board of Directors	General Shareholders' Meeting
Body authorising the severance clauses	YES	NO
	પ્રદિર	NO
Are these clauses notified to the General Shareholders' Meeting?

C.2 Committees of the Board of Directors

C.2.1 Provide details of all committees of the Board of Directors, their membership, and Provide details of all committees of the boon a member and other external directors
the proportion of executive, proprietary, independent and other external directors that comprise them:

	"UDIT AND CONTROL COMMITTEE

	Position	Category
Name	Chairman	Independent
Mr. Alain Minc	Member	Independent
Ms. Cristina Garmendia Mendizabal	Member	Independent
Mr. Gregorio Marañon y Bertrán de Lis	Member	Proprietary
Mr. Richard Guy Hathaway

% of proprietary directors	25%
% of independent directors	75%
% of external directors	00%

Explain the duties exercised by this committee, describe the rules and procedures it Explain the duties exercised by this committee, dead these functions, briefly describe
follows for its organisation and function. For each one of these function of the follows for its organisation and function. For each one be sexercise in practice each of the
its most important actions during the in the Articles of Association or other its most important actions during the year and now it has extires of Association or other corporate resolutions.

The Audit and Control Committee has the following competencies:

• The Addit and Control Control of Shareholders on the matters raised by the inform the Genting to the matters under its competence.
• Sharcholors and of Directors the proposals for selection, appointment, re-elections
  b) Refer to the Board of Directors the proposals for stiles conditions of the engagement thereof
• thereor
  Supervising Internal Audit services and activities and, in particular, the Annual Audit Plan.
• Plan.
  Supervising the effectiveness of the Internal Control Systems of the Company, as well Supervising the Risks Management Systems, including tax Risks.
• as of the nine and supervise a procedure that allows employees from the Company Group to confidentially report irregularities.
• f) Establish appropriate relation that may put their independence at risk.
• On an annual basis, prior to the audit report, issue a report on the independence of R) the auditors.
• h) Fnsure that the Company hothes arratement of any disagreements arising with the outgoing auditor and the reasons for the same.
• Investigate the issues giving rise to the resignation of the external auditor, should this come about.
• J) Ensure that the external auditor has a yearly meeting with the Board plonary to Ensure that the external additor his o yevelopments in the Company's Risk and accounting positions.
• k) as the regulated financial information.
• I) accepted accounting principles, and report on proposals and on and off halance accepted accounting principless, aggested by Management, and on and off balance sheet risks.
• m) Supervise the preparation, integrity and fair presentation of the regulated financial information.
• n) Report to the Board of Directors transactions in special-purpose entitles, or in entities Report to the busine ees treated as tax havens, and any conflicts of interest
• o) Examining and previously reporting on the conduct on Securities Market and with the the compliance with the internal Cooc Er company's governance rules, as well as putting forward proposals for its improvement.
• p) Supervise compliance with the Corporate Social Responsibility policy of the Company.
• g) Drafting an Annual Report for the Board of Directors describing the activities of the Audit and Control Committee.
• r) Any other reporting and proposal functions it is tasked with by the Board of Directors.
• s) the Board, or the Rules of the Committee.

The Audit and Control Committee shall meet as periodically as determined, whenever The Audit and Control Committee Shall meet shall meet s nembers, and in any event at least four times per year,

Main activities of the Audit and Control Committee during financial year 2018-2019;

• · Information and Supervision of the Periodic Financial Information that the Company Information and Supervision of the Commission ("CNMV") and to the markets.
• · Information and submission to the Board of Directors of the Individual and Information and "submission" co" " = " = " = = " = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = Consolidated Financial Statements at 31 March 2019.
• · Supervision of the Degree of Compliance with the Model for the Prevention of Risks from Crime.
• from Crine.
  Quarterly and annual monitoring of the Internal Audit Plan 2017-2018, and approval
  e and annual monitoring in the of the Group's cybersecurity. Quarterly and annuallysis of the Group's cybersecurity.
• of 2019-2020 Flant Frida. Board of Directors of the Policy "General Principles of the Group's Report-Proposal to the Board of Directors of the amendment of the Group's
  Conduct of the Suppliers of Logista Group", of the Loeista Group Internal Audit Conduct of the Suppliers of Logista Group , or the Logista Group Internal Audit.
  Purchasing Policy, as well as of the updating of the Logista Group Internal Audit. Policy.
• · Update of the Risk Map of the Group. Analysis of the Group's cycluding the St
• · Update of the Mar Hall Control activities of the Group, including the System of
  · Monitoring of the Internal Renorting (ICFR), Monitoring over Financial Reporting (ICFR).
• Internal Control over the Internal Audit Unit and of the Business and Individual Annual Evaluation of the Internal Audit Unit and of the Corporate Director of
  Objectives for the Short-Term Variable Remuneration of the Corporate Director of Internal Audit.
  • Internal Addit:
    Supervision of Accounts Audit fees 2018-2019, and planning of the accounts audit for the financial year.
• the financial year.
  Authorization for the provision by auditors of the Company or of companies of the Authorization of services other than accounts auditing.
• Group, of Services of the Committee, due to the expiration of the term.
  Appointment of the President of office of the previous President.
• of of the or the previous in expert to verify the Statement of Consolidated
  · Proposal to engage an independent vear 2018-2019, Proposal to engoge and for fiscal year 2018-2019.
• Non-Financial informent for the provision of services of Internal Audit, and for the Proposal of Englestion of the Internal Audit.
• external quality of the Annual Report on the Corporate Social Responsibility.
• · Supervision of the Bibliography of Directors of the Annual Report on Corporate Governance for the fiscal year 2017-2018.
• · Report on the Auditor independence.
• · Report on the Auditor Intelligence in the Committee during fiscal vear 2017-2018.
  Report on the functions and activities of the Committee during fiscal verse
• · Self-assessment of its functions and composition during the fiscal year.

ldentify the directors who are member of the audit committee and have been appointed
the success of the becaused and experience in accounting or audit matters, or Identify the directors who are member of the addit connting or audit matters, or
taking into account their knowledge and experience in accounting or audit matters, taking into account their knowledge and experience in mittee was appointed.
both, and state the date that the Chairperson of this committee was appointed.

Name of directors with experience	MR. RICHARD GUY HATHAWAY MR. ALAIN MINC.
Date of appointment of the chairperson	26/03/2019

APPOINTMENTS AND REMUNERATION COMMITTEE

	Position	Category
Name	Chairman	Independent
Mr. Gregorio Marañón y Bertrán de Lis	Member	Independent
Mr. Alain Minc	Member	Independent
Mr. Jaime Carvajal Hoyos		Proprietary
Mr. John Matthew Downing	Member

	25%
% of proprietary directors	75%.
% of independent directors	056
% of external directors

Explain the duties exercised by this committee, describe the rules and procedures it Explain the duties exercised by this committee, beach these functions, briefly describe
follows for its organisation and function. For each one of these function of the follows for its organisation and function. For each one of the exercise in practice each of the
its most important actions during the year and how it has exercise in or other its most important actions during the year and now it his extires of Association or other corporate
functions attributed thereto by Jaw, in the Articles of Association or oth resolutions.

The Appointments and Remuneration Committee has the following competences:

• e Appointments and Renters, knowledge and experience on the Board of Directors.
• Directors.
  b) Establishing a goal for under-represented sex on the Board of Directors, and developing guidance on how to achieve that goal.
• developing guidaneerit, ratification, reappointment and removal of independent
  c) Propose the appointment, ratification, reappointment and removal of Propose the appointment, ratification, reappointment and removal of
  Directors, and report the appointment, ratification, reappointment and removal of the CEO, and the Directors, and report the appointment, raincludion, organization, or the CEO, and the
  the other Directors, as well as the appointment and removal of the CEO, and the the other Difectors, as we the Board relevant faculties.
• permanent delegation of the appointment and removals of the Chairman,

d) Inform about the proposals for the Secretary of the Board of Directors. Inform about the proposals for the appointary of the Board of Directors.
Vice-Chairman, Secretary and Deputy-Secretary of the Board of Directors.
- Vice-Chairman, Jecretory of the manner deemed suitable, succession of the Chairman and the first executive.
- Chairman and the more the movals of Senior Managers, previously proposed by
f) Reporting appointments and removels of Directors the first executive to the Board of Directors.
- g) Proposing the following to the Board of Directors for its approval:
- i) Compensation policies for Directors and Senior Management.
- II) The Annual Report on Remuneration of Directors
- il) Individual compensation for Executive Directors and any other conditions pertaining to their contracts.
- iv) The basic conditions in the contracts of Senior Managers.
- h) Ensuring compliance with the Company's remuneration policles.
- h) Ensuring compliated in .................................................................................................................................................... selecting female Directors is prevented.
- j) Verlfying compliance with the Directors' selection policy.

k) Any other competence or duty conferred by the Law, the By-Laws or Board Regulations.

Regulations.
The Appointments and Remuneration Committee will meet every time it is called by its Chairman The Appointments and Remuneration Committee will meets by Directors or its Chairman
Chairman or two of its members' request, and when the Board of Directors of its Chairman Chairman or two of its members To que adoption of agreements.
request the issuance of a report or the adoption of agreements.

request the issuance of treplaneration Committee adopts decisions or make The Appointments and Remuneration - Collins of its members.
recommendations by voting majority of the total number of its members.

Main activities during financial year 2018-2019:

• · Submission to the Board of the Annual Report on Directors' Remuneration 2017-2018.
• . Submission to the bear of achievement of the Group's Business Objectives 2017-2018
  . Evaluation of the degree of achievement of the Group's Business Objectives 2018-2019.
  (Bonus) and Proposal of Setting of the Group's Business Objectives Directors
• (Bonus) and Proposal of Secting Short-Termineration of the Executive Directors (2017-
• 2018). · Setting of the Fixed Remuneration of Executive Directors for 2019, 19:00
• · Reports on the cessation and appointment of Senior Managers.
• · Reports on the cessador any the General Shareholders' Meeting of the appointment Report on the ratification by the General Sharenonik and Mr. John Michael Jones,
  by co-option of proprietary Directors Mr. Amal Pramanik and Mr. Jaime Carvaja. by co-option of proprietary Directors Mr. Alain Minc and Mr. Jame Carvajal.
  and of independent Directors Mr. Alain Minc and Mr. Jamesellidation
• and of independent of settlement of the Second Consolidation Period of the Proposal TO The BollGeneral Pian and Special Plan).
• Company 2014 Plan (ochen of Shares to be granted, in the General and Proposal of Beneficiaries and Number of Shares to be grantes, would Consolidation
  Special Piems for Performance Shares 2017 of the Company/Second Consolidation
  Special Piems Period (2018-2021).
• Period (2018-2021).
  Report-Proposal on appointment of the Chairman of the Audit and Control Committee.
  Report-Proposal on appointment of the Chairman (Canudic Succession Pl
• · Report-Proposal on appointifient Management Plan/Group's Succession Plan for Top-
• Level Directors, Level Directors.
  Self-assessment of its composition and functions, and proposal to the Board of
  the Self-assessment of Economynant of external consultant. Self-assessment of 1ts compositions of external consultant.
  Improvement actions. Engagement of external consultant.
• improvement actions. Eligently of the Board performance, as well as that of
  Proposal to the Board of self-assessment of the Road Marcovement Plan. Proposal to the Board of Sch-assessmann and Improvement Plan.
  Its President, CEO and Secretary Director, and Improvement Plan.
• its President, CEO and Sectivities of the Appointments and Remuneration
  · Report on the functions and activities of the Appointments and Remuneration Committee 2017-2018.
• C.2.2 Complete the following table with information regarding the number of female
  C.2.2.2 Complete the states of Board committees at the close of the past four years: te the following table with information Tegarding
  who were members of Board committees at the close of the past four years:
  who were members of Board committees at t

DITCOMIS NEW YO	Number of female directors
	Year 2018	Number క్తిగా	Year 2017 Number %		Year 2016 Number %		Year 2015 Number %
	1	25.00%	1	25.00%	1	25.01%	1	25.00%
Audit committee			0	0.00%	D	0.00%	0	0.00%
and Appointments remuneration committee	0	0.00%

C.2.3 State, where applicable, the existence of any regulations governing Board committees, State, where applicable, the existence of any agendments made to them during the where these regulations may be found, and any Smenemanene in each committee have been voluntarily prepared.

been voluntality proportion in the By-Laws of the Company (Articles 41 to 43 bis) and Besides the Capital Companies Act, the by-Laws of the Sompany in
the Board of Directors' Regulations (Articles 15 to 18) contain the rules governing the Board Committees,

Board Control Committee is also governed by Its Rulcs, of December 19, 2017, 1999, 1999, 1999, 1999, 1999, 1999, 199 The Audit and Control Committee is also goveneed Guide of the Audit Committees
approved following the recommendations of the Technical Guide of the Audit Committees approved following the recol public interest ("The Technical Gulde").
of public interest entitles of public Interest ("The Technical Gulde").

of public interest Corporations modified articles II, 17 and 46 of the Board.
On December 19, 2017, the Board of the Recommendations of the Technical On December 19, 2017, the Board or Directors moolined artistment and the Technical
Regulations, and to adapt them, in particular, to the Recommendations of the Technical Guide.

RELATED-PARTY AND INTRAGROUP TRANSACTIONS

D.1 Describe, if applicable, the procedure for approval of related-party and intragroup transactions.

Article 39 of the Board of Directors' Regulations state that the Board formally reserves the Article 39 of the Board of Directors' Regulations state that the Board of other of Committee, of
knowledge and authorization, previous report of the Audit and Control knowledge and authorization, previous report of the Company with Significant
Related-Party Transactions (Transactions of the Company with Directors of the Researce of Related-Party Transactions of the Collipling of the Company within the competence of the
shareholders), except for such matters that are legally within the comp shareholders), except for such matters that are reality fransactions, the Board of
General Meeting, To authorise, if appropriate, the Related-Party Transactions, the Shareral Meeting, To authorise, if appropriate, the Related-Fary Trumpany, evaluating the
General Meeting, first and foremost shall serve the interests of the Company, e Directors first and foremost shall serve the interests of the Sunport.
transaction from the standpoint of equitable treatment of shareholders and market conditions,

conditions.
No authorisation of the Board of Directors shall be required in connections: (i) that they No authorisation of the Board of Directors shall be required three conditions: (i) that they
Party Transactions that simultaneously satisfy the following three conditions and Party Transactions that simultaneously satisty the following three standardised and apply on
are conducted under contracts whose terms and conditions are standardiaed at pric re conducted under contracts whose terms and conditions an eaton the mates of rates or rates
an across-the-board basis to many customers; (il) that they are condicted in que an across-the-board basis to many custing as supplier of the goods or services in question;
established generally by the party acting as supplier of the pools or services in established generally by the party acting as supplier of the pool of the Company's annual
(ii) that the amount thereof does not exceed one per cent of the Company's annual revenues.

revenues.
In the case of ordinary that are not subject to the Board's authorisation, a In the case of ordinary transactions that are not subject to the Book of the Bear and be
general authorisation of the line of operations and its execution conditions shall be sufficient,

sufficient.
The 'Directors' affected by the related party transaction, oither personally, or to the The Directors affected by the related party transaction, current in the decision
shareholders whom they represent in the Board, in addition to not intervene in the meet shareholders whom they represent in the Board, in addition the meeting room, while
or exercise or delegate their right to vote, they will be absent from the meathing or exercise or delegate their right to vote) and its and the party transaction.
the Board deliberates and votes on the related-party transaction.

the Board deliberates and votes in the related party transaction mentloned, in the The Company shall report on the mentioned related financial information, and in the
Annual Report on Corporate Governance, in the regulated financial information, and in the Annual Report on Corporate Golder, to the extent by Law.
notes to the Financial Statements, to the extent by Law.

notes to the Financial Statesiens), in the blieftors shall report to the Board

Likewise, Article 34 of the Board Regulations direct or indirect conflict, either personally o Likewise, Article 34 of the Board Regulations states that bither personally or through
of Directors any situations Involving a direct conflict, either personally or through of Directors any situations involving a direct of the Company of the Companies in its Group.
persons linked to him, with the interests of the Company or the Company a

persons linked to him, with the microsis and 12 June 2014, signed between the Company and Also, the Framework Agreement dated 12 June 2014, Signed Betwishes that all RelatedImperial Brands (formerly named Imperial Tobacco Group) establishes that interest Imperial Brands (formerly named imperial Tobactor that may pose a conflict of interest
Party Transactions and, in general, any transaction that may pose a conflittins that, Party Transactions and, In eeneral, any transaction that market conditions that,
affecting the Group and the IB Group should be arranged under market conditions that affecting the Group and the IB Group should be arranged ander stipulated by two
according to the circumstances, would have been preasonably stipulated by two according to the circumstances, would have been headship equal treatment of
independent operators and in accordance with the principle of equal treatment independent operators and in accordance with the principle of agently
shareholders and the principle of neutrality established in that same Framework Agreement.

D.2 Describe any transactions which are significant, either because of the amount Describe any transactions which are Significant, enthur involved of Subject of Subject shareholders:

Name of significant shareholder	Name of company within the group	Nature of the relationship	Type of transnetion	Amount Pressmoril euros)
Altadis S.A.U.	Distribucion de Compañía Integral Logista, S.A.U.	Commercial	Purchase of finished or not finished goods	346,966
Altadis S.A.U.	Distribucion de Compania Integral Logista, S.A.U.	Commercial	Services performance	5,850
Imperial Brands Finance Plc	Distribucion de Compañía Integral Logista, S.A.U.	Contractual	Collected interests	14,489

D.3 Describe any transactions that are significant, either because of their amount of Describe any transactions that are sigmically, elther assured in thin its group and
subject matter, entered into between the company or entities within its group and
subject directors or managers of the company:

No transaction has been carried out.

D.4 Report any material transactions carried out by the company with other entities Report any material transactions carried out by these are not eliminated in the belonging to the same group, provided chat mess and do not form part of the
preparation of the consolidated financial statements and conditions. preparation of the consolidated financial statements of their purpose and conditions.
company's ordinary business activities in terms of their purpose and condition

company's ordinery pulmise in the proup transaction conducted with entities established
in any event, note and ish are considered tax havens; In any event, note any intragroup considered tax havens:

N/A

D.S State the amount of any transactions conducted with other related parties that State the amoreported in the previous sections,

N/A

D.6 Describe the mechanisms In place to detect, determine and resolve potentlal
e of the may and streess the company and/or its group and its directors, senior Describe the mechanisms in place to detect, determine
conflicts of interest between the company and/or its group and its directors, senior
conflicts of interest betw comnagement or significant shareholders.

Article 34 of the Board Regulations rules the conflict of interest that may affect Article 34 of the Board Regulations rules the conficit of them to (i) report to the Board
Directors and their related parties, requirest or lindirect conflict, either persona Directors and their related parties, requiring outh conflict, either personally or
of Directors any situation involving the the Crunnany's interests and (ii) refrain from of Directors any situation Involving a birect of Interests and (ii) refrain from
through persons linked to them, with the Company's interests and (ii) the through persons linked to them, with the Company a me transaction to which the conflict of interests refers.

Related persons are the persons described in article 231 of the Spanish Companies
Companies are the Courty W Act ("Ley de Sociedades de Capital").

Act ("Ley de Sociedablesort any stakes held directly or indirectly and personally or by The Director should report any stakes held directly of thin over, similar or
related persons in the share capital of a company with the same, similar or

complementary activity that constitutes the corporate purpose, as well as positions
and the constitution as well as nerforming either personally or for another complementary activity that constitutes the corporate por personally or for another
or functions they discharge, as well as performing either personally or for social or functions they discharge, as well as performing Enrich personal prospective
party similar or complementary activities, to the ones which constitutes the social purpose of the Company.

purpose of the Company.

Directors should abstain in engaging in professional or commercial transactions with Directors should abstain in proidssions of continues is reported previously and the Company unless the situation of connect of micreses is of
the Board, subject to a report from the Audit and Control Committee, approves the transaction.

transaction.
Furthermore, Section 7 of the Company Internal Regulations for Conduct in the Furthermore, Section 7 of the Company Internal Regalations regarding conflicts of interest.
Securities Markets establishes the conduct regulations regarding che general Securities Markets establishes the conduct regulations regultures the general
In particular, the Company Internal Regulations for Conduct establishes the persons subject to l In particular, the Company internal Regulations for continue that persons subject to it
principles of independence, also state the procedure that persons subject to principles of independence, also state the procedure that persons subject to
must observe. These Regulations also state the procedure that persons subject to must observe. These Regulations also state Inte procedure of interest. These
them must follow to previously report any situation of conflict of interest, in them must follow to previously report any shuarion of commony board of Directors, in
transactions must be previously authorised by the Company Board of the transactions must be previously authorised by the Company Confire Management of the
case of conflict of Interests affecting Directors and Senior Management of the
CEO of Con case of conflict of interests of interests of all other cases.
Company, and by the Company CEO, in all other cases.

Company, and by the Connect provides that when a related party transaction

Also, the Framework Agreement provides that shareholder he represents at the must Also, the Framework Agreement provides that when expresents at the Board, he must
personally affects a Director or the shareholder he represents at the Board, his vote. personally affects a Director or the Shareholder ne represent of telegating his vote.
abstain from intervening in the decision, as well as from voting or deliberates and vote abstain from intervening in the decision, as well as ir only addeliberates and votes on
He will also leave the Board meeting room, while the Board ited by or He will also leave the Board meeting room, while the bry Directors appointed by or
such related transaction. Nevertheless, the Proprietary Birectors and voting regardi such related transaction. Nevertheless, the Propited one voling regarding
representing Imperial Brands must be present in each debate and voling regarding representing Imperial Brands must be present in Each other they will not
the Framework Agreement or the Treasury Agreements (even though they will not
the Framework Agreement the Framewore regarding these matters).

D.7 Is there more than one company in the group listed in Spain?

No No Yes []

RISK MANAGEMENT AND CONTROL SYSTEMS E

E.1 Explain the scope of the company's Risk Management and Control System, including tax compliance risk.

The Corporate Risk Management System of the Company and its subsidiaries (hereafter, The Corporate Risk Management System of in the Risks Management General Policy of September, 29th 2015.

The Risk Management General Policy, applicable both to each of the businesses and The Risk Management General Tolley, sets up the guidelines to integrate all the Group, with the countries, and Corporate areas of the Group, Jore and operations of the Group, with the information originating from the unferent raterial official official way and rollistic view,
purpose of providing to the Business Managers/Corporate officient way and roinimi purpose of providing to the Business Mundgers, so an efficient way and minimizing the impact in case the Risks materialize.

The Pollcy defines different Risk categories, in which, as part of the financial Risks category, tax Risks related to the current Group activity are included.

Therefore, Fiscal strategy described at Fiscal Policy of the Group, states, as part of its key nbjectives the following:

To minimize the fiscal Risks associated with the Company's operations and in propertion to the decisions, thus ensuring that the tax payable is appropriate and in proportion to the decisions, thus ensuring that the the the tax rial and human resources, and the business Risks of the Group,

To define the fiscal Risks and determine the Objectives and Activities of Internal Control, To define the fiscal Risks and determiance and for keeping documentary records,
and to set up systems for reporting fiscal compliance and for Control and to set up systemoroup's General Framework of Internal Control.

international the Group's Internal Control General Policy of April 25th, 2017, On the other hand, the Group S mtcholling and management of internal and establishes a general action Tranewony of contre Logista Group, in accordance with the external Risks of any hature, which inchievement of its objectives (Corporational Ricks, penal Risk Map in place at all times in the autocry Risks, business Risks, operational Risks, penal Risks and reputational Risks, among others),

E.2 Identify the bodies within the company responsible for creating and executing the Risk Management and Control System, including tax compliance risk.

The Board of Directors

Among its non-delegable faculties, the Board of Directors has to approve the general Among its non-delegable faculties, the bound them, the control and Risk Management policies and strategies of the choup and annons the internal reporting and control systems, in particular those for financial information.

Risk and Control Management Policy will identify, at least, (i) different Risk categories, financial Risk and Control Management Policy Will ruefoly, legal, social, environmental, political and
and not financial (operational, technological, legal, social, to, including those and not financial (qperational, technition), techniques its, including those financial or
reputational, among others), for which the Group Is exposed Inche determination of t reputational, among others), for while it be of bapts of the determination of the Risk economical, contingent frablities and belief of bandelined measures to mitigate impact of the level that the Group considers acceptable, (in) p. and (bv) information and Internal Control. Control Risks Identified, in case they would maternalse, and Misks, Including contingent liabilities or off-balance Risks.

The Audit and Control Committee

Among others, the Audit and Control Committee shall have the following competencics in Among others, the Audit and Control Control Control of Risks, according to its Regulation, dated on December 19th, 2017:

i.Supervising the effectiveness of the Company's Risk systems, reviewing the appointment Supervising the effectiveness of the compand also, when appropriate, submitting
and replacement of the managers, and the corresponding period for and replacement of the managers, "and "City" and the corresponding period for their following-up.

ii.Supervising the Risk control and management unit, which will have, among other dutles, Supervising the Risk control and management systems are functioning correctly,
that of ensuring that the Risk control and management systems is, exposed are correctly that of ensuring that the Risk control the Company is exposed are correctly and in particular, that the major kiskat of actively participating in the preparation of Risk identified, managed and quantined, that or easing the management; and that the Risk.
strategies and in key decisions about their management; and that the framework of strategies and in key decisions about their management of the framework of the policy established by the Board of Directors.

The Internal Control Committee

This Committee depends on the Audit and Control Committee of the Board of Directors, hierarchical and functionally.

The Committee has the following basic functions, among others: To promote and The Committee has the following basic functions, only & Box
coordinate the work for annually updating the Group's Risk Map and propose approval to the competent bodies.

the competition with the Penal Risks Prevention Model, the Internal Control Committee also acts In relation with the Penal Risks Prevention Model, the lin-relation with the direct penal
as Unit of Control and Follow-Up of Penal Risks, in relation with as Unit of Control agai persons, established by Spanish laws.

responsibility of the leg" .
The Logista Group Internal Control Committee Is comprised of the Corporate Financial The Logista Group Internal Control Colinintees to the Human Resources Director as Director, who acts as Chairman, the Internal Contralia, the Corporate Resources Director, as
Director, a representative of the Legal Department, the Corporates of the Group, Director, a representative of the Legal Department, the Cellphesses of the Group, acting the Internal Control Director as Secretary.

The Corporate Internal Audit Directorate

The Corporate Internal Audit Directorate has the responsibility of:

· Preparing the Group's Procedures and criteria for the Risks Management, and controlling
Procedures and criter the Ricks Management · Preparing the Group's Card of Directors for the Risks Management.

those oppression in development and regular updating the Group's Risks Map and regularly · Coordinating the development and reguler upon will report to the Board, on the reporting to the Audit and Control Continetice Risks the extent of implementation
appearance of new Risks, the evolution of the identifies of furctioning of the Group's appearance of new Risks, the evolution of the lochened fusiness of the Group's System of Risks Management.

of nisks worldgehed that may have materialized, indicating the circumstances that have that have
• Inform about the Risks that may have workers have worked · Inform about the nisks the stablished control systems have worked.

Process Owner:

Process Owners
Employees responsible for the design, process development and detection of Risks and Employees responsible for the design, process ist responsible for the implementation of
opportunities that may affect them. They are also responsible for the Process and opportunities that may aftect them. They are also releatify the Risks of the Process and policies and Internal Control standards. They should lack. If your to avoid or reduce those Risks, as well as monitoring them and supporting and reporting to the Internal Control Coordinators.

Internal Control Coordinators:

Internal Control Coordinating the implementation, development and coordination of

They are responsible for promoting the implementation will be occupied by financial officer They are responsible for promoting the Intiplementation will be occupied by financial officers of
the Internal Control System. Generally, this function will be occupied by fi the Internal Control System. Genegement that makes up the Group.

Control Owner:

Control Owner.

Employees responsible for carrying out the Control Activities defined in the Internal Control Employees responsible for carrying out the Collisor According, of their results. When
System and for Informing the Process (Owner, through reportive measures to Improve the System and for informing the Process Owner, chrough reported measures to Improve the appropriate, they must suggest improvements and they must at all times follow the directives in relation to the Risks Management.

E.3 State the primary risks, including tax compliance risks, and those deriving from 18/2017). State the primary risks, including tax 'con 'con in Royal Decree Law 18/2017).
corruption (with the scope of these risks as set out in Royal Decree the achievement of corruption (with the scope of these risks as set but in Refect the achievement of
to the extent that these are significant, which may affect the achievement of business objectives.

In the Group Risk Map, the following Risks were Identified, among others, which are In the Group Risk Map, the following Risks Were Risks Management Policy of Logista
classified according to its category as stated at the Risks Management Policy of Logista Group:

Environment Risks:

· Group's business could be adversely affected by the deterioration of the economic · Group's business could be auversely Briceted in which it operates (mainly Spain, Portugal, France and Italy).

Span; , Corcego, i , Contraband affecting in distributed tobacco volumes.
• Tobacco illicit trade and contraband affecting in distributed tobacco volumes.
•

· I obacco micit trace artax increase (eg: VAT and excise duties) or Tobacco price increase
· Any future significant tax increase trainers, as it would generate a drop of co · Any future significant tax increase (e), VAT and over at a drop of consumption could have a negative effect on the business, as it would general situation and the operating result.

Business Risks

· Elberalization in the main markets where the Group operates as tobacco products · Eiberalization in the main markets while exists a State monopoly for retail sale of these
authorized distributor where currently exists a State monopoly for the Group were authorized distributor where currently exists a store mored by the Group were not Implemented.

Informented.
The growth strategy of the Group relies, among others, on other business activities · The growth strategy of the Group relies, and the achieve a sustainable increase
different from tobacco. As long as the Group won't be able to achieve a sustainable increase of that business, the Group results would be affected.

Operational Risks:

· Theft of tobacco in facilities and during transport associated to increases in insurance premiums.

premiums.
Technological Risks associated to the lack of (or faulty) availability of the Information Systems.

· Cybersecurity Risk, as the Group is exposed to threats and vulnerabilities due to the

regular use of technologies and information systems in the development of their different artivities.

Regulatory Compliance Risks;

· The Logista Group Businesses are subject to compliance of numerous general and · The Logista Group Businesses are subjati, national, regional and local reach, in every
industry laws and regulations, with European, national, failures to comply and the industry laws and regulations, with Eutop-Color to potential failures to comply and the country where it operates, exposing the Group to pocci hand, to increasing costs for supervision of compliance and control.

· Penal Risk (commission of crimes within the company and/or in the benefit of the Group)
· Penal Risk (commission of circle shart chirtently part, either as plaintiff or · Penal Risk (commission of Crimes within the Group is currently part, either as plaintiff or defendant

Financial Risks/ Tax Risks:

· Changes in the group's payment cycles could obligo it to seek external sources of finances of finances · Changes in the group's payment cycather wholesale business, the payment cycles for to fulfil its obligations: As with ally other the collection cycles of the points of sale do not
products acquired from manufacturers and the collection cycles of the tax aut products acquired from manufacturers and the spayment to the tax authorites is made
coincide. For this reason alone, the Logista Group's payment of sale, coincide. For this reason alone, the Ebgista enanufacturers and the points of sale.
In a cycle which is different from that of the manufacturers and the points of sale.

• · Risk of impairment of fair value of assets, in relation with goodwill high carrying value.
• · Commercial credit Risk derived from the usual business operations with customers.

E.4 State whether the entity has a risk tolerance level, including tolerance for tax compliance risk.

Group Risk Management methodology, is developed according to the following scheme, as Group Risk Management methodogy, is developed to spectives and context, identification of
described at its Procedure: establishment of objectives and probability). described at its Procedure: establishment of Gojest and probability), Risk treatment
potential Risks, Risk analysis, Risk assessment (impact and probability), of the Risk potential Risks, Risk analysis, Risk assessinche (mind continuous monitoring of the Risk
(assume, mitlgate, transfer, eliminate), control and continuous monitoring of the Ris (assume, mitigate, to and information and communication.

On top of that, considers different Risk tolerances when rathig gross Risks, both with with On top of that, considers different Risk toler and sincer Risk impact, which allocate each Risk
quantitative and qualitative criteria, and assessing the Risk impact, in the general scheme of Risk appetite.

Criteria used by the Group to determine impact are the following: regulatory compliance, Criteria used by the Group to determine impact in processes and reputational Impact.

These criteria, together with ratings over likellhood rating and evaluation of Risks tolerance These criteria, together with ratings over mkenton of Risk Management (Risk Register
for each Risks identified, are added to the tools used for Risk Mater of key Risks by the for each Risks identified, are added to the tools used for nte follow-up of key Risks by the corresponding bodies.

The Risk Management Policy defines the position of the Company regarding the Risk typology, including tax-related Risks.

The Group has a low tolerance towards the Risk in what concerns to policies, laws and regulations compliance, including tax regulation.

In general, due to the particularity of the business and the markets where the Group is

present, it has a moderate Risk profile, therefore Risk Management has to be done considering the following:

a) Achieve those strategic objectives defined by the Group, keeping a level of uncertainty under control.

b) Maximize the level of guarantee to shareholders.

c) Protect Group financial results and reputation.

d) Take care of stakeholders interests (shareholders, customers and manufacturers).

Highlight that in the strategic Group framework, providing high added value logistical Highlight that in the strategic Group Transwork, prothework, the Group presents higher level of
services with a high level of technological innovation, the Group presents hig services with a high rever technological Risks that could occur.

E.5 State which risks, including tax compliance risks, have materialised during the year.

Risks materialized throughout the year are regular operational Risks, in the ordinary course Risks materialized throughout the year are regular legal the sand during transport, not
of business, particularly theft of tobacco in the company for was progerly insured, an of business, particulariy thert of todacts in the confine was properly insured, and also,
affecting the Group's financial results as the merchandise was propension the Group, affecting the Group's financial results as the on processes, ruled against the Group, not
liabilities for the resolution of fiscal littigation processes, ruled as liabilities for the resolution of theation processes, were one one one of
affecting significantly the Group's financial results, as these were properly provisioned, well as other litigations of non-fiscal character.

well as other hogatis and control systems have allowed their miligation, either the In both cases the established control systems have allower has a moremal Control and
impact of Risk, neither its probability of occurrence. In general Risks in impact of Risk, neither its prodability or occur the allocation of several Risks in
Risk Management Systems of Logista Group have allowed without negative Impact for Risk Management Systems of Logista Group have anowed ized without negative Impact for the Group.

the Group.
On April 10th, 2019, the National Commission for Markets and Competition Imposed on On April 10", 2019, the National Commission for will be subsidiary of the Compañía de Distribución Integral Logista, S.R.o. ( Logistive information regarding the Company), a penalty of E 20.9 million, for " exchange of consider the sanction appropriate,
sale of cigarettes from 2008 to 2017". Legista does not entibus appeal before th sale of cigarettes from 2008 to 2017 . Logista toes the contentious appeal before the
and has filed against said resolution, an administration, which as of the and has filed against said resolution, an administrative "entition, which as of the date of this Report, is pending resolution.

date of this Report) to per, Risks derived from the macroeconomic, social and political Additionally, in the current year, Risks denved from the tax increase in France which
situation have materialized, especially those us immact on sales volumes has been situation have materialized, especially those benveo; its impact on sales volumes has been
routes the price of the package to 10 euros by 2020; its . the .jppart, on the .par routes the price of the package to II euros by as as well as the impact on the part of the partially absorbed by restructuring plans, as well os uses a revaluation of inventories.
manufacturers of said increases in the sale price, which causes a revaluation

E.6 Explain the response and monitoring plans for all major risks, including tax Explain the response and monitoring puns as well as the procedures followed by the compliance risks, or the company, as wen of directors responds to any new challenges that arise,

The methodology to elaborate the Group Corporate Risk Map, based on the individual Risk
The methodology to elaborate the gualuators to assess the Risks before and after The methodology to elaborate the evaluators to assess the Risks before and after
evaluation of the businesses, forces the evaluators to assess the Risks ending up evaluation of the businesses, forces the evalue established for each case, ending up
considering the mitigating controls and action plans established for each of each considering the mitigating controls and accion plans on Low). The Risk Management
with the residual Risk classification (Severe, High, Misk, It will be decided which action with the residual Risk classification (Severe, high nitual Risk, it will be decided which action
Procedure of Logista Group states that, for each resume), and also an action Procedure of Logista Group states that, for each residentially, and also an action plan will he defined.

See below the main existing controls for the Risks identified in the E.3 section:

Environment Risks

· The markets most affected by the poor economic evolution, and the Businesses most · The markets most affected by the poor ceditoring the procedures for the recovery of
exposed to its customer credit Risks, are reinforcing the credit limits, exposed to its customer credit Risks, are recine and tightly monitoring the credit limits, fostering the obtaining of bank guarantees.

· Regarding tobacco illicit trade and contraband, the Group iss developing projects · Regarding tobacco lincie trade and elish more demanding track and trace protocols,
together with the manufacturers to establish more demanding track and trace protocols,
t together with the European Directive of April, 31ª 2014.

Business Risks

· The effect of liberalizing the main markets in which the Group operates as tobacco-· The effect of iberalizing the main where currently there is State monopoly for retail related products authorized distribution whitigated by the business diversification strategy
sale would, if there is a negative effect, mitigated the large capillary point of sale would, if there is a negative enrece, ming.
followed by the Group, and the capacity to sell tobacco through the large capillary point of sales network.

Operational Risks

· Theft of tobacco in the company facilities and during transport.

The following measures reduce both the impact and the likellhood to a tolerable Risk level:

• Follow up of maximum security standards.
• Insurance Policies, >

Technological Risks

Existence of Contingency Plans periodically tested to assess their effectivences.

There are permanent monitoring activities of the service level agreements according There are permanent mond administrates the Group infrastructures.

Cybersecurity Risk

Preventive work of digital surveillance.

Bl-annual external intrusion test and internal for new web applications.

Regulatory Compliance Risks

· The Corporate Legal Department centralizes the supervision of the most relevant · The Corporate Legal Department 'Centralized that they strip to that the third
contracts within the Group, to ensure that they strictly by with the principles of the Code of contracts within the Group, to cusure that the ) scomply with the principles of the Code of Conduct.

· In relation to Compliance and Crime Prevention within the Group's companies, the following controls currently exist:

The Group has a Code of Conduct and periodically asks employees to undertake mandatory training on its contents.

The Group has an Internal Channel for denounces and irregularities, with policies and procedures available to every employee in the Group intranet.

There are Policies for investment, expenditures, indebtedness and other transactions, that require a strict approval and communication workflow.

Also, adapted to the specific characteristics of the penal codes in Spain and Italy, in V Also, adapted To The Specific Chahe's Chahere are specific Manuals for crime provention in these addition to the Group Code of Conduct, of compliance with the controls and general countries according To which, In Case 'n the Group Code of Conduct, disciplinary actions could be taken against the offenders.

V There are specific procedures for preventing money laundering in the Group, being the There are specific procedures for provention of the valid interlocutor with the SEPBLAC.

Financial/Tax Risks

· Regarding the goodwill high carrying value, the Group undertakes Impairment tests according to the IFRS.

· Credit Risks mltigated by periodical credit controls, hiring insurance policies in order to · Credit Risks micigated of unpaid credits in the commercial transactions.

Regarding the procedures followed by the Company to ensure that the Board of Directors
Committee supervision of the Audit and Control Committee supervises Regarding the procedures followed by cries, the Audit and Control Control Committee supervises
responds to the new challenges that arise, the Ricks, as well as its response s responds to the new challenges that ansel as as well as its response strategies and twice a year the evolution of the unered the may and species and Issues the Group Risk
associated mitigation plans, including fiscal ones, and semplote undate is not present associated mitigation plans, including tiscal the said complete update is not presented,
Map Update. In those two quarters in which the most significant changes in the Map Update. In those two qualcers in writter about the most significant changes in the the Audit and Control Committee is internets, as well as managing Risks in advance. Sald
main Risks, which allows identifying new threats, as well of supervision of the main Risks, which allows identifying new threads, as the work of supervision of the Control and Risk Management Systems.

Likewise, the Board of Directors is specifically and periodically informed about the Group's Likewise, the Board of Directors is specifically and perforic associated mitigation plans, by the Corporate Internal Audit Department.

IF INTERNAL RISK MANAGEMENT AND CONTROL SYSTEMS RELATED TO THE PROCESS OF PUBLISHING FINANICAL INFORMATION (ICFR)

Describe the mechanisms comprising the System of Internal Control over Financial Reporting (ICFR) of your company.

F.1 Control environment

Report on at least the following, describing their principal features:

F.1.1. The bodies and/or departments that are responsible for (l) the existence The bodies and/or departn adequate and effective ICFR; (ii) their implementation; and (ill) their supervision.

The Logista Group System for the Internal Control of Financial Reporting (hereinater "ICFR') The Logista Group System of the liternal Control System and consists of the whole of the forms part of the Logista Group internal Control Control Committee, Senior
processes carried out by the Board of Directors, the Audit reasonable security in relation to processes carried out by the board of on or or on the markets Management and the togists croop prior which is released to the markets.

Article 5 of the Rules of the Board of Directors of 26" January, 2016, modified at December Article 5 of the Rules of the Board on Drectors on of conceral stars and goneral strategies, and In 19th 2017, entitled The general role of super roup policies and general strategies, and in the definition and approval of the Edgator organism of Risks, including fiscal Risks, and the particular, the Policy on Control and Manageous and control, and in particular, of financial
supervision of the internal systems of reporting and the Road, of Directors, over supervision of the internal systems of reporting billity of the Board of Directors, over the reporting. It also defines the ultimate resportablished the Company has to publish regularly, financial information which, as a quoted company, and present them to the General Shareholders' Meeting.

In accordance with the provisions of Article 43 of the By-Laws, the Company has an Audit In accordance with the provisions of Article 45 or lintel. 45 or article 17.2 of the and Control Committee, Whose Tham responsibilities, se Regulation dated on December 19th 2017, are the following:

a) In relation to the control of financial reporting:

• · Reporting at the General Shareholders' Meeting on the questions raised by Reporting at the General Sharenoutis area of responsibility, and in particular, shareholders about subjects with and explaining how it contributed to the Committer about the result of the abun, and Copiential
  completeness of the financial information and to the role which the Committee performed during this process,
• · Supervising the process of drawing up the required financial information and ifs Supervising the process on drawing as a making recommendations or proposals to the completeness and submission, and making its integrity, checking compliance with Board of Directors almed at Salegarding the consolidation perimeter, and the regulations, the accurate demarcation of and, in particular, knowlng, correct application of accounting process of, the system for the internal Control of Financial Reporting (ICFR).
• · Supervising compliance with legal requirements and the correct application of generally accepted accounting principles, and reporting on the proposals for modification of accounting principles and criteria suggested by Management, and of the Risks on and off the balance sheet.
• · Ensuring that the Board of Directors arranges to submit the accounts to the General Shareholders' Meeting without limitations or qualifications in the audit report and that, in the unlikely event of there being qualifications, that both the Chairperson of the Audit and Control Committee and the auditors clearly explain to the shareholders the nature and extent of those limitations or qualifications.
• · Reporting to the Board of Directors on the Company's Annual Accounts and on the financial information, which the Company has to publish regularly, and which has to be sent to the bodies that regulate or supervise the markets.

b) In relation to the supervision of internal control and of internal auditing:

• · Supervising the effectiveness of the Company's internal control systems, and in particular, those for financial reporting and the Company's Risks systems, reviewing the appointment and replacement of its managers, and discussing with the accounts auditors or auditing companies the weaknesses of the internal control system, detected during the audit, all of this without compromising its system, detected on that end, and where appropriate, recommendations or proposals may be submitted to the Board of Directors in keeping with the corresponding period for follow-up activities.
• · Supervising the services and activities of the Internal Audit unit and, in particular, assuring the independence of the unit handling the Internal Audit function, which will report functionally to the Committee's Chairperson and will ensure the will report rans of the reporting and internal control systems; proposing the etlection, appointment, re-election and cessation of the head of the Internal Audit service; proposing the service's budget; approving its priorities and work programmes, ensuring that it focuses primarily on the main Risks to which the programmes, exposed; receiving regular reports on its activities; and verifying that the senior managers are acting on the findings and recommendations of its reports.

The head of the unit handling the Internal Audit function will present an annual work programme to the Committee, Inform it of any incidents arising during its work programm and submit a report on its activities at the end of each year.

In accordance with the Internal Control General Policy of Logista Group, it is assigned to the In accordance with the logista Group, which President is the Finance Corporate Director, the mission to drive forward and monitor the Internal Control System (in which Director, the mission to vial Reporting is embedded), and provide and approve the basic intelnar Control of the supervision of and dependency on the Audit and Control Committee of the Board of Directors,

Among other functions, the internal Control Committee establishes the responsibility to valldate the proposals of the Internal Control Process Owners or Co-ordinators, or of the validate the propos or Business Managers, to define, update and develop new processes Corporate or ectors on other activities, including all those which are related to the ICFR.

The Finance Corporate Directorate is the body responsible for defining the Systems of The Finance Corporate Directorate is the Books it establishes and defines the policies, the policies, in order to Internal Control of Financial Reporting the generation of the sale information, in order to guidelines and procedures related to the genenncial information generated and monitors
guarantee the quality and authenticity of the financial information generated and monit its compliance.

In addition, the Corporate Internal Audit Directorate has, among others, the followings In addition, the Corporate Titlernal Adilities, defined in the Internal Audit Policy, which has been updated this year:

• · Evaluating whether the procedures, activities and objectives of Internal Control Evaluating whether the Group's Internal Control System are appropriate, effective and which consbitute the Group s incently the Audit and Control Committee efficient, and whether they assore offective supervision of the Risk and Control and the Board of Directors on directly or through the Intenal Control Management System, and promoting, Smithoung, Smithe Group, recommendations for their strengthening.
• · To supervise the Internal Control System of Financial Reporting (ICFR).
  • F.1.2. State whether the following are present, especially if they relate to the creation of financial information:
  • · Departments and/or mechanisms In charge of: (I) design and review of Departments and/or fiii) clear definition of lines of responsibility and corporate structure, (i/) to distribution of tasks and functions; and (iii) assurance that adequate procedures exist for proper communication throughout the entity.

According to Article 6.2 of its Rules, the general purpose of the Board of Directors of the According to Article 6.2 bi its Rules, the Sene Company business and financial objectives, Company is to determine and supervise the cories by which to achieve them, propelling.
agreeing on the strategy, the plans and the policy acthiswent of the established agreeing on the strategy, the plans and the achievement of the established.
and supervising the management of the Company and organisation, under and supervlising the management on the Computy and organisation, under effective supervision of the Board.

Notwithstanding the foregoing, the policy of the Board of Directors is to delegate the Notwithstanding the foregoing, the policy of the Executive Bodies and the Management Team,
ordinary management of the Group to the Executive Bodies and the Roard's Rules cann ordinary management of the Group to the Law, the By-Laws or the Board's Rules, cannot be delegated.

For this reason, the Appointments and Remunerations Committee has the responsibility, For this reason, the Appointments and nein the appointment or severance of senior among other the Chief Executive proposes to the Board.

The roles of the Senior Management Include, among others, to acknowledge, inform and, The roles of the Senior Management , modifications to the organisational structure of the if it is the case, propose and approve, modificiencies and areas for improvement in
Group, for the purpose of identifying needs, inofficiencies and areas big Group, for the purpose of loentifying decation of the lines of responsibility and authority, and the appropriate distribution of tasks and roles.

The Corporate Directorate of Human Resources has procedures for updating the The Corporate "Directorate" of Thomas of each of the Logista Group subsidiaries.
organisational structures at corporate level and of the they the lines of authority organisational structures at corporate charts, which show the lines of authority up to a certain organisational level.

The Logista Group has a range of internal regulations governing the allocation and division. Also The Logista Group has a range of the of functions in the different areas of the Group. Also,
of responsibilities and the segregation of functions of anch inh positions are of responsibilities and the segregation where main responsibilities of each job positions are described.

Specifically, the Corporate Financial Directorate has organisation charts showing the Specifically, the 'corporate' The Subsidiaries and of the subsidiaries and business units; in composition of the Financial Departmontaining information about the tasks carried out by
also has regulations and procedures containing information the responsibilities also has regulations and procedures and information about the responsibilities, of the financial the different members of the key personnel involved in the preparation of the financial statements.

Dissemination is through the corporate Intranet which is used for internal communications Dissemination's through the corporations and procedures, as well as information and through which the cogista croup in the organisational structure, are about the imbst important charges-ontranet Directory one may find complete disseminated. Furthermble, in the costs of the Logista Group, including the post occupied and the reporting lines,

Code of conduct, the body approving this, degree of dissemination and code of conduct, the principles and values, (state if there is specific instruction, including pricording and creation of financial information), a mention of transaction breaches and proposing corrective actions and sanctions.

Code of conduct

The Logista Group adopted the Code of Conduct issued by its Controlling Shareholder, The Logista Group adopted the Code approved by Its Board of Directors. There is, in Imperial brands PLC, which has beenplies specifically to the Logista Group companies in addition, a Code of Conduct which apple of Directors of Logista Italia, S.P., within
Italy (the "Còdice Etico"), approved by the Board of Directors of Logicalizes of somellia ltaly (the "Codice Euco ), approved by a1/01, which governs the regulation of compliance in the framework of Legislative DECree 250 as a submit all the processes of the Logistan, which are in the matter of chininal noks, and while preparation of financial information, which are in Group ttallan company and control bodies legally required in Italy.

The Logista Group Code of Conduct may be consulted on its intrainer, For those employees in The Logista Group Code or Conduct mace of electronic device, a summary leaflet is a who do not nave a computer or Barer of Baretteristics and ethical principles of the Code of Conduct are presented.

All the employees of the Logista Group have to commit themselves to its compliance and All the employees or the cogists of cecognition' document, confirming that they have read.
as a prove of that, they must sign a frecognition' document, of this document as a prove of that, they must sign a recits provisions. Logista has versions of this document.
the Code of Conduct and will observe its provisions. Hot it, can the correctly the Code of Conduct and will observe to propose and Polish, so that it can be correctly in English, Spanish, Spanish, In all the countries in which it operates.

The Code of Conduct lays down the principles of responsible behaviour which all the The Code of Conduct lays down the printipics or the way in which important employees have to observe, and oneis a practs with. As function in the sussiness
ethical and legal matters should be dealt with. As funcest and responsibility. Each of the ethical and legal matters snould be oeal. white respect and responsibility. Each of the Integrity, respons is elaborated on in the body of the Code.

In particular, within the principle of responsible commercial practice, there is a section on In particular, within the principle of responsible connecess and notifications, of which the main obligations are explained below:

• · To report and record all our financial information accurately and objectively.
• · To ensure that accurate and complete financial and commercial records are kept.
• · To ensure that all the financial reports, notifications, forecasts and analyses for which to ensure that are transmitted honestly and accurately.
• · To observe all of the laws, external requirements and procedures of the Company when transferring financial and commercial information.
• · To co-operate openly with the Logista Group Compliance Department and with our external auditors.
• · To strive to identify any potentially erroneous representation of the accounts, data or To strive to identify any potential fraud or deception, and to inform the local,
  records, or any occurrence of potential fraud of Accounting. Encerasting records, or any occurrence of potentionings, the Director of Accounting, Forecasting regional or departmental neads of mantes, the manager of any worry or doubt about the accuracy of the financial reports.

Any new incorporation must carry out a training course, which is mandatory, on the Code Any new incorporation must carry but a trainly collections defined in the Code
of Conduct, consisting of the practical explanation of different ask on of Conduct, consisting of the practical explan, it is mandatory to carry out specific training
of Conduct, as well as a final exam. Likewise, it is no and the Legislative De of Conduct, as well as a final exam. Dativiso in Spain and the Legislative Decree in Italy, in courses for the prevention of Chininal Risks in Spain and Criminal Risks, as well as of the behaviors expected by them.

The Code of Conduct itself and its complaints procedure lay down a procedure for notifying, The Code of Conduct itself and its complaints process of the Code of Conduct as well as the recording and investigating possible "breachers, including dismissal, and the rights of appeal.

General Principles of Conduct of suppliers of the suppliers of Logista Group.

The Board of Directors of the Logista Group, in its session of April 300", 2019 approved the The Board of Directors of the Logista Group, in the Souppliers of the Grupo Logista, available issuance of the General Principles of Conduct of the exposed ass commitments, of binding on the corporate website, in which they weessary assumption by the Suppliers that contract with the Group.

Within the scope of the ICFR, we emphasize the Principle of Accounting and Financial Within the scope of the ICPK, we emphasil their obligations regarding accounting and Records: "The Logista Group Suppliers Tain, Lonest and objective manner, In accordance with the legislation and regulations accountant".

Responsible bodies

The body ultimately responsible for these activities is the Audit and Control Committee The body ultimately responsible for these activities responsibilities the supervision of
itself, who in its Regulation states as part of the loternal Codes of Conduct of the itself, who in its Regulation stares as part of the respense Codes of Conduct of the Company.

In particular, the Audit and Control Committee shall (Article 5 (v) b (0)):

• · Supervise compliance with the Internal Codes of Conduct of the Company, Supervise compliance with the internal Code of Conduct, the Regulations and particularly with the internal Securities Market os putting forward proposals for its Improvement.
  • · Whistleblower channel, that allows notifications to the audit committee of Whistleblower channel, that allowsome in addition to potential irregularities of a financial and unlawful activities undertaken in the breaches of the code of conduct and we, if this is of a confidential nature.
    organisation, reporting, as the case may be, if this is of a confidential nature.

The Regulations of the Board of Directors assign the Audit and Control Committee the The Regulations of the Board of Directors assegue that allows the Logista Group's
responsibility of establishing and supervising a procedure the report irregularities of responsibility of establishing and supervising a prouver in toport firegularities of
employees, confidentially and, if appropriate, and can be detected within the employees, confidentially and, if appropriate, and rym that can be detected within the Company.

The Logista Group has a Policy and Procedure on Complaints of Malpractice The Logista Group Thas a Policy Falld Proceder of Directors on April26", 2016.
("Whistleblowing"), which was approved by the Board of Directors on April26", 2016.

This Policy formalizes the existence of a channel for denouncing behaviour, deeds, actions,
This Policy of the existence of a collical values, laws and internal regulations This Policy formalizes the existence of a chalines, laws and internal regulations
omissions or failure to observe the principles, ethical values, laws and intense omissions or failure to observe the principles, echest principles which govern the applicable to the Logista Group, and establishes the subscuent actions that have to be taken by
notification of the complaint, as well as the subscuent. The procedure develop notification of the complaint, as well as the subscussion of complaint. The procedure develops
the Logista Group as a result of such a notification and everytion of the Polic the Logista Group as a result of such a nothered thation and execution of the Policy. The Policy. The Policy. The Policy. The the aspects or premises which require the implementation and execution
Procedure develops the aspects or extremes requires of complaints (elther verbally, or in Procedure develops the aspects or extremes required of complaints (either verbally, or in
of the Policy, as well as the means of comminication of complaints nost). of the Policy, as well as the denunclas@logista.es or by ordinary post).

One of the bodies competent to receive complaints and to investigate cases of malpractice One of the bodies competent to receive complains and cit, deeds, acts, omissions or nonis the Audit and Control Committee, when if, in the participation or direct or indi is the Audit and Control Committee, whier in the the participation on direct on indirect
compliance which constitute(s) the Malpractice, the Secretary or of a Compan compliance which constitute(s) The Walp Acticulty of of a Company Director,
involvement of any Member of the Board, including its Secretary, or of a Compension by the involvement of any Member of the board, including has election of the president by the
er of the General Manager of a Business, is deduced, immediate report will be or of the General Manager of a Business; is as cebated introl Unit, to the President of the Secretary of the Whistleblowing committee on internal est member of the Board of that Committee.

Also, the Procedure states that the Directorate of Corporate Internal Auditing will prepare Also, the Procedure states that the Unrectorate of a financial or accounting the a report on cases that are relevant, or significant from the more of the mailten, which will,
nature, or serious, which will be forwarded to the Logista Groun's Pollcy on Com nature, or serious, which will be for warded to the Aban enta Group's Pollcy on Complaints,
in addition, supervise the general observance of the Logista Group's Pollcy on Com and of the provisions of this Procedure.

With regard to the confidentiality of complaints, the Policy states as one of its key principles the guarantee of Confidentiality and, as far as the applicable local legislation allows, the anonymity of the complaint.

The identity of the 'whistleblower' will not be disclosed to anyone other than the Bodies Competent to receive and investigate a complaint of Malpractice, in any of the stages of the Investigation Procedure, nor will the said identity be revealed to third parties or to the people being investigated. At the time of receiving a complaint, it is encoded, so that the nominative relationship of the complainant-denounced disappears. Likewise, the minutes of the Complaints Channel Committee, as well as, where appropriate, the documentation provided, are anonymized, once the conservation periods estabilished in the General Data Protection Regulation ("GDPR") have elapsed.

As an exception, and under the applicable regulations, the Identity of the 'whistleblower' can be revealed to the Administrative or Legal Authority which is handling the investigation procedure initiated by or resulting from the complaint of Malpractice.

· Training and periodic refresher programmes for staff involved in the preparation and revision of financial information, as well as assessment of the ICFR (internal control system for Financial Information), that covers at least accounting rules, audits, internal control and Risk Management.

Within the system for annual performance management assessment, personal development is encouraged, and any need for training in the said subjects is detected and then reflected in the Annual Training Plan.

The Human Resources Department, in collaboration with each of the business units, is responsible for defining the Logista Group Annual Training Plan, in which the training needs of the staff, Including those involved in the generation and Issue of financial information, and the Internal Control and Management of Risks, are identified.

In this way, training courses are given annually to those of the staff who are involved in the preparation and reviewing of financial information. Specifically, external training has been given on the following subjects: Adobe experience manager, process analysis, CESCOM certification, CIA certification, fiscal and accounting closure, Internal Control of Financial Reporting, definition and implementation of Risk appetite, speech and Influence Internal auditors, segregation of dutles, external evaluation of audit quality internal, fundamentals of project management, Risk Management In the area of HR, implementation of the Risk process, negotiation, time management, methodology for the analysis of privacy Risk and data protection, monograph on consolidation of financial statements, Microsoft Office (formulation, macros, pivot tables, database management), power Bl, money laundering prevention and Internal audit evaluation technician.

In order to ensure that the regulatory modifications and updating which are required to guarantee the rellability of financial information are understood and applied, the departments involved in the preparation and supervision of financial information keep themselves permanently informed of any such modlfication, through the subscription to bulletins and newsletters from external sources, as well as by the attendance to conferences and seminars of specific topics and technical updates, such as an evaluation of the control design and its effectiveness, and national Risk Management meeting.

F.2 Assessment of financial information risks

Report on at least the following:

• F.2.1. The main characteristics of the risk identification process, including error and fraud risk, as regards:
• · Whether the process exists and is documented.

The Logista Group has a specific selection of policies for the process of identifying Risks in the Group, specifically:

The "General Policy on Internal Control" has the purpose of establishing a model or general or The "General Policy on Internal Control and Management of external or If amework of whatever kind, which could affect the Group.

The "Internal Control Procedure" defines and regulates the Control activities that the The "Internal Control "Procedure " attenuate these internal and external Risks.

Also, the "Risk Management Policy" and the "Risk Management" Procedure" describe Riske Also, the "Risk Management Policy and continuous process, incorporated into strategy and Management as an interactive and continues together define the basic principles and planning process. The Policy and the Probober are reflected in the Logista Group Risks Мар.

In the methodology used for Risks Management implemented in the Group, during the In the methodology used for Risks Managel Risks, those Risks of a financial nature are phase of identification and proHozat fraud and Risk of error in valuation and financial
considered; among these, the Risks of fraud and Risk of Pearcial Risks considered; among these, the Risks of the Risks of the financial Risks.
reporting are considered to be relevant when categorizing the financial Risks.

The Risks Management process is reflected in a Risks Rogister, which is prepared from The Risks Management process is Tenteces is Tentection in the stop variable for the assessments of the impact and probablity in a who take into consideration variables both quantitative and qualitative.

Its output is the Logista Group Risks Map: there is a consolidated Risks Map of the Logista its output is the Logista Group hisks wap. chere's company and Business unit or
Group and also there are maps of specific Risks for each opleosted, processes, Group and also there are maps of . Business and Corporate Directorates' processes.

There is also an inventory of specific Risks of financial information, classified by categories, There is also an and fraud categories, both external and internal.

· If the process covers all of the objectives of financial information, (existence and occurrence; completeness; valuation; delivery; preakdown (existence and occurrence, commondomise whether it is updated and with what frequency.

Additionally, on annual basis, Internal Control Department makes an assessment, by each Business and Company, of the significant accounts, both at quantitative and which results are each Business, and Company, or "the different processes, and which results are
qualitative level, which are later on linked to the different in relevant process qualitative level, which are later on linked to the Matrix, which determine relevant process.
gathered in what is denominated as ICFR Scope Matrix, which determine relevant p for ICFR purposes.

Taking the Scope Matrix as a reference, the Group develops the identification and Taking the Scope Matrix as a Telefence, the in the processes that are relevant for the description of each of the transactional miskited at the ICFR Risks and control matrix.
purposes of the ICFR. This analysis is documented at the ICFR Risks and control matrix

The Corporate Financial Directorate developed in 2016 an instruction for "ICFR The Corporate Financial Directorate "developed are exposed in order to guarantee an
documentation", in which premises to be followed are reglected that the review of documentation", in which premises to be resplicitly, it is reflected that the review of
adequate documentation maintenance. More explicities the process, Nevertheless, adequate documentation maintenance. More constantly updated process. Neverthcless,
these documentation must be a continuous and control Control Control Control will do a these documentation must be a continuous and control Control Control Control Control will do a
at least annually, at the beginning of the fiscal year, neoper maintenance and at least annually, at the beginning of the nsch to guarantee a proper maintenance and general review of the documentation in order to the current documentation, this communication. In case neboth to Internal Control Department.

· The existence of a process for identifying the scope of consolidation, taking The existence of a process for foctors, the possible existence of complex into "account, "among" on companies, or special purpose entities.

The Logista Group consolidation perimeter is determined monthly by the Financial The Logista Group consolidation pennette Corporate Directorate, based on the Facines and Reporting Group and its Subsidiany
Accounting Manual, Consolidation and Reportuner, to, he followed, to define the Accounting Manual, Consolidation and Reports on be followed to define the Companies. This Procedure establishes the Spicerrectly updated, so that nothing is consolidation the consolidated financial Information.

In the Group consolidated financial statements at the close of the financial year, in In the Group consolidated financial statements the in each case, all those companies accordance with the methods of inclusion appanies associated with It were
belonging to the Logista Group, joint businesses and consolidation belonging to the Logista Group, Joint Dusiness. Sals. For that purpose, the Consolidation Included in accordance with the content of the companies belonging to the Logista Group,
Department has a detailed checklist of all the concelldation criteria to be applied. Department has a detailed checklist of an the consolidation criteria to be applied.
and carries out a specific, regular analysis of the consolidation criteria to be applied.

If the process takes into account the effects of other types of Risk (operational, technological, financial, legal, affect, the financial (operational, etc.) to the extent that they affect the financial statements.

In its System of Risk Management, the Logista Group considers the following catcgories of In its System of Risk Management, the reading to their nature or their consequences:
Risk, which may be distinguished according to their nature or their consequences:

• · Environment Risks: including those events regarding economic matters, such as the Environment Risks: including those events regarding elc.risis in the countries where
  consequences in the consumer habits from the economic crisis in the countries main consequences in the consumer habits from unted nature of the tobacco market, main
  the Group operates. As well, duc to the regulated fifterion to the tobacco regulations the Group operates. As well, but to the regarding any modification to the tobacco regulations fall into this category.
• · Business Risks: enclosing in this category any Risk regarding the behaviour of the Business Risks: encidsing in this Category any Group, such the relationship with the different agents problems, or the entrance of new competitors.
• · Operational Risks: those related to the regular Group operations, such as process Operational Risks: those related 10 the regendliance with quality or environment
  inefficiency, technology problems, non-compliance of the artivities, inefficiency, technology production orrors in the execution of the activities.
• · Regulatory Compliance Risks: resulting from non-compliance with existing regulations Regulatory Compliance Risks resulting mail policies and procedures, as well as those affecting the legal regulations that subject the Group, the penal Risks and the regarding the Tegal Tegulations thegal regulations and the Internal policies regarding the Internal Control of Financial Reporting,
• · Financial/Fiscal Risks: considering those Risks regarding the Group exposure to price, oil and other market variables fluctuations, such as the exchange rate, interest are, oil as and other market variables not tubes resulting from contractual liabilities, as well as price, Ecc. From the Group activities lie into this category.
• · Decision-making Risks: incorporating in this strand those events that could derive in Decision-making Risks. Incorporatif the decision-making data, such as the elaboration of accounting and financial statements.
• · Reputational Risks: including those events that could negatively affect the Group Reputational Risks: Including Close the stating from a behaviour under the stakeholders expectative.

The Logista Group has also introduced a Model for the Prevention of Offences, and also The Logista Group has also norousehe Manual for the Provention of Offences, and also
covering the legal Risks considered in the Manual for the Promoly with Legislative Decr covering the legal Risks consibered in the Missidiaries to comply with Legislative Decree 01/231.

In the process of Identifying Risks, according to these categories, the possible effects in the process of the materialization of said Risks are taken into account.

· The governing body within the company that supervises the process.

The Board of Directors of the Company, has a non-delegable faculty, according to Article S The Board of Uirectors of the Company, opproval of the policy for control and management
of its Regulation, the determination and approval of the internal reporting and contr of its Regulation, the determination and opprevision of the internal reporting and control and of Risks, including tax Risks, as well as adjol information. The policy for control and systems, in particular those for "hill in the different specifieral types of financial and nonmanagement of Risks Should fuentify at least of to (including operational, technological, including under the financial Risk which the Company is Exposed no reputational Risks), including under the financial, legal, social, environmental, political and other off-balance-sheet, (ii), the measures (ii), the measures in financial or economic Risks, Contingent hability of the measures in the measures in determination of the Risk level the C.ulipit the events should they occur; and (lig) the loternal
place to mitigate the impact of identified Risk events should they objects i place to mitigate the impact of lucitimes in control and manage the above Risks, including contingent liabilities and off-balance sheet Risks.

On the other hand, Article 5 of Audit and Control Committee Regulation assigns to this On the other hand, Article 3 or Audit and Opervision of the management and control of Risks:

· Supervising the effectiveness of the Company's Risk Systems, reviewing the Supervising the effectiveness of the managers, and also, when appropriate, appointment and replacement of the Board of Directors, and the corresponding period for their following-up.

· Supervising the Control and Risks Management Unit, which will have, among other Supervising the Control and Tusks Woman and management systems are functioning duties, that of ensuring that the major Risks to which the Company is exposed are correctly, and in particular, that the major that of actively participating in the correctly Tdentified, Thanaged and in key decisions about their management; and that preparation of Risk strategies and management systems are mitigating Risks
of ensuring that the Risk control and management systems Road of Directors of ensuring that the Risk control of the policy established by the Board of Directors.
effectively within the framework of the policy established by the Board of Directo

The mentioned Control and Risk Management Unit is represented by the Logista Group The mentioned Control and Risk Management on the preceding section E.2.

Likewise, and regarding this issue, the Internal Audit Corporate Directorate has the functions set up in the preceding section E.2.

F.3 Control activities

Report on whether the company has at least the following, describing their main characteristics:

F.3.1. Review and authorisation procedures for financial information published Review and authorisation a description of the ICFR, Indicating those by the stock markets and mentation describing the flow of activity and responsible, as well as doelating to the risk of fraud) of the various types types types controls (including those materially affect the financial statements, of transactions which closing procedures and the specific review of judgements, estimates, valuations and relevant forecasts.

Procedures for review and authorization of financial information:

The regulated financial information to be sent to the markets complies with the provisions The regulated financial information to ober, and Circular 3/2018 of Line 26", of the CNMV
of Royal Decree 1362/2007 of 19ª October, and Circular Market Commission). of Royal Decree 1362/2007 01 13 ° GEoner; National Securities Market Commission).
(Comisión Nacional del Mercado de Valores: National Securities Market Commission).

The Logista Group has an "Accounting Policy Manual", issued by the Corporate Finance The Logista Group has an "Accounting Foller when whomatic checks that are used to verify Directorate, which defines a series of minibular of error, and ensure compliance with current financial information, prevent fraud, the Nisk of Also of Information is also a formal legislation and the generally accepted account in the financial information is propared by each procedure for accounts closure in wise in writing or business, which is verlied by economic/tinancial manager of each subsion of approved, before publication, by the the Consolidation and Reporting Department, I is also checked by the external auditers.
Logista Group Finance Corporate Directorate. It is also checked by the Board of Logista Group Hhance Corporate Directorition Committee, which reports to the Board of Finally, it is analysed by the Addit and Continues it and agrees to its publication Directors, the latter other action in section f.1.1.

In addition, every quarter, the Financial Directors and Controllers of the Logista Group in addition, every quarter, the Philiple in which they declare that the Logista
Businesses and/or Companies issue a certificate in with as repards reconcliation Businesses and/or Companies issue a ceranoven complied with as regards reconciliation Group General Policy on internal control nas been a representation letter in which they certify:

• That they were themselves responsible for preparing the financial statements That they were themselves Tesplann, and for any other breakdown produced.
• That the financial statements were obtained from the Company's accounting records, which reflect all its transactions and its assets and liabilities.
• That the Company's accounting records correspond to what was produced by the That the Company's accounting recording the local accounting standards plus the adjustments necessary to align them with the IFRS.
• That the concepts included in each account correspond to those in the Group's Accounting Plan and Manual.
• That the estimates and important decisions were made on the basis of the latest That the estimates and important essent are sufficiently well documented and justified.
• That responsibility is accepted for the reliability of the information containcel In the That responsibility is accepted for of the Company or subgroup (where applicable) at the close of the financial year.

Twice a year, Senior Management and Financial Managers sign a certification in which they Twice a year, Senior Managamong others, within their scope of responsibility:

• It has been evaluated the effectiveness of the internal Control System their aroa of It has been evaluated the encestive it has been operating effectively throughout the period defined above.
• All controls defined in each ICFR Controls Matrix within their area of responsibility are All controls delimed in each tc. It continented within each matrix submitted.
• Any known significant control weaknesses and/or breakdowns in control have been Any known significant seeple manager and to the relevant Authorized Bodies.
• All transactions and events, as well as any material, ond, non financial, reporting All transactions and events, as well as anfith financial and non-financial reporting been recorded approphately, in nic vot the state of affairs within their area of responsibility.

Descriptive documentation of activity flows and controls:

Furthermore, and with regard to the documentation describing the flows of activities and Furthermore, and with regard to the unsaction which can materially affect the financial
controls of the different types of transaction which can desumentation which describes controls of the different Types of transmally of the required documentation which describes for the statements, the Logista Group has prepored of controlling financial reporting for the the control activities which cover an the pulip of the Risk and control matrix, narratives and Logista Group, by means of its corresponsible with the recommendations made by the flowcharts ("ICHK Documentation"), in occinancial Information in Listed entitles, issued in 2010.

The aforementioned ICFR documentation is configured based on control objectives for each The aforementioned iCFR documentations vove reliability and transparency in the process.
Risk, whose achlevement must allow to achieve reliability linked to the defined Contr Risk, whose achlevement must allow to achieve relieve relinesically linked to the defined Control activities resulted to be efficient in all its terms in each of the material processes for the activities resulted to be enclein in all for televil, the frequency, and the frequency, and the person matters, the Control activity, the Risk to be mitigated, the frequency and the person
matters, the Control activity, the Risk to be mitigated, as well as the definition of matters, the Control activity, the Risk To be hautomation, as well as the definition, valuation, responsible for its implementabon, to rever at ensuring the proper registration, valuation,
critical controls and Fraud controls aimed at ensuring the proper registration, critical controls and Praisactions in non-financial information.
presentation and breakdown of transactions in non-financial information.

The IFCR Documentation has been developed both for the material corporate processes and The IFCR Documentation has been developent, Treasury, Human Resources and (general accounting, consolidation, fiscal managems for those relevant Business / Country
purchases of non-Inventory assets, mainly), as well as for stock and logistics servi purchases of non-Inventory assets, maility), as were and logistics services.
operational processes for the IFCR, such as purchases, sales, stock and logistics services.

Said IFCR Documentation is periodically updated, both by the Internal Control Department, as Said IFCR Documentation is pendultaily updated their self-assessment, as
as well as by those responsible for said documentation Control Documentation Financial as well as by Inose responsible for sale documention Control Documentation Financial
established in the Instruction on the "Internal Information and validity of the IFCR established in the Instruction on the "internancing the validity and validity of the IFCR Documentation.

Specific review of relevant Judgments, estimates, assessments and projections:

With regard to the specific review of the relevant opinions, estimates, valuations and With regard to the specific review of their Accounting Manual, has an specific annox projections, the Logista Group, as part of the manner of dealing with each of the about financial Provisions which besting to be and make, and which is designed to
provisions which the companies in the Logista Group may make, and which is designed to provisions which the risk of error in processes related to specific transactions.

Additionally, the Corporate Financial Director presents to the Audit and Committee, a detail with Additionally, the Corporate Financial Director regulated financial information, as well as the in order to facilitate said bouy the review in the period under supervision, as well as the the main estimates or methodology used for these estimates.

F.3.2. Internal IT control policies and procedures (access security, change controls, their operation, operational continuity, and segregation of controls, their operation, operation, operations processes within the duties, among others) w the creation and publication of financial information.

The Logista Group uses information systems to keep an adequate recerd and control of The Logista Group uses inforctioning is crucial for the Logista Group.
its operations, so their correct functioning is crucial for the Logista Group.

The Management of Information Systems within the Management of Corporations The Management of Information Systems information and telecommunications Resources is responsible for the roging the Information Systems Department systems. Among its functions is that or photoal and organizational means to consure the with a set of policies, procedures and continuity of the corporate information, Including the financial information.

The regulations ,available to all the employees through the Logista Group intranet and The regulations ,available to an the e Information Systems, is mainly formulated by the relating to the internal Control of them have been updated during the current year, and consist of:

• · The General Policy on Internal Control
• · The strategic framework of the Information Systems
• · The General Security Policy for the Information
• · The Security Procedure for the Information
• · The Technical Instruction for Roles Redesign.

The General Pollcy on Internal Control establishes the guidelines and directives relating The General Policy on The Risks associated with the management and use of Information to the marragement of on of the Group's Information Systems must be systems and, opecifically and ensure functioning and ensure control of the various types of transactions.

The General Security Policy for the Information formulates a reference framework and a The General seem and general principles that must be followed by all the Organization, to set of guidelines and general information and systems and other nontechnological assets that it manages, as well as to determine the bodies responsible for it.

General Security Information Procedure, which develops, the mentioned Policy, as part as their provisions, estates, among other, the following premises:

• · MANAGEMENT AND CONTROL OF ACCESS TO THE LOGISTA GROUP INFORMATION SYSTEMS, whose general alm of the procedures and measures provided for in this Provision 6 is to anticipate and, as far as possible, prevent unauthorized access to the Logista Group Information, and to:
  • i. Establish a procedure for granting Users rights of logical access to the Logista Establish a procedure and for modifying and revoking them when the User changes job or ceases to provide services to the Logista Group, respectively.
  • ii. Define the identification requirements of an authorized User to access the Information Systems.
  • iii. Establish specific control measures for access to Group Network Scrvices and source codes.
  • iv. Establish specific control measures for access to Information Process Equipment.
• · ACQUISITION, DEVELOPMENT AND MAINTENANCE OF INFORMATION SYSTEMS, which ACQuilsmon, DCVELO ensure that security is built into the lifecycle of Information establishes a process to that Information Security is taken into account from the Systems, and Channel of the process in which an Information System is acquired (or developed) until it is implemented, maintained and eliminated. Explicitly, in this section, it is undi it is implemented, or changes to Business Applications within Logista Group, and the management on changes in standard market software packages.
• · SECURITY IN OPERATIONS, in order to maintain and maintain and marrage the processing of SECURITY IN OPEKATIONS, in 'Erocs'in the Logista Group on a continuous and secure
  Information and Information Systems in the Logista Group, provided by the Corporate Information and information Systems institutions provided by the Corporate basis, and to guarantee that the technologing provided normally, the operational Directorate for information Systems are those relating to backups and recovery procedures necessary for this purpose (socialization and configuration of Systems, etc.)
  of Systems, monitoring, task planning, installation in this Procedure there is a spec of Systems, monitoring, task planning, in this Procedure there is a specific
  are documented by this Department. Additionally, in this Procedure Infrastructure are documented by this Department. Abdidonally Management (Network Infrastructure
  section concerning Communications Security Firewall Policy and Wireless section concerning Communications security, Firewall Policy, and Wireless Networks).
• · CONTINUITY AND REDUNDANCY IN INFORMATION SECURITY, which describes the CONTINUITY AND REDONDANCE Invity of the Systems during any major event on requirements to ensure the continuity of Information Security in said
  disaster that may occur, Including the continuity of Informs of redundancy, and disaster that may occur, including the vintered interns of redundancy, and Systems; the availability of the rechnology in root businesses of the Logista Group, including the Information Security managed by them.

Regarding Segregation of Duties, the Logista Group has designed and implemented and Regarding Segregation of Dutics, the Logic or organisation that are indispensable for the users
matrix for the segregation of functions, which are indispensable for the matrix for the segregation of Tunens, and information that are indispensable for the according to the minimum Tesources and internetions in the users' areas. In the users' areas. In the users' areas, in correct performatice of the tasks associated with the segreegation of functions, a set of
addition, and to complement the matrix for the segmentation of privileges has been addition, and to complement the matha ror the segmentation of privileges has been
measures and/or activities complementary to the segment users with greater privileges, measures and/or activities complementary to one group of users with greater privileges,
established, such as the inclusion in the model of a group of users of the conerations established, such as the inclusion in the mouvhile keeping track of the operations carried
with the alm, after an express request and while keeping track orga with the alm, arter an expressions of the corresponding users' area.

Finally, the Technical Instruction for Roles Redesign defines the specific guidelines thair Finally, the Technical Instruction for Kores the roles, their classification, their should be taken into account when belging hould have, existing a classification and nomenclature specifically for those "SOD Roles", which are those containing critical nomentiature spanie spegation of Duties Model.

F.3.3. Internal control policies and procedures intended to guide the management of subcontracted activities and those of third parties, as management of Subcontractorient, calculation or evaluation entrusted well as those aspects of ussessment, at a materially affect financial statements.

For the current financial year, none of the processes resulting in the collection of financial statements For the current financial year, none of the procedual or consolidated financial statements
information with a material impact on the individual the Louista. Group has not re information with a material impact on the Logista Group has not required
of the Logista Group have been externalised, so bliched by entitles outside the Logista of the Logista Group have been externalised, so entitles outside the Logista
reports about the effectiveness of the controls established by entiles which the reports about the effectiveness of the controls established third parties which the Logista Group uses in Its Purchasing Policy.

However, as the result of the valuations is not significant, the Logista Group, does However, as the result of the valuations its for the valuation of certain commitments
repeatedly use reports of independent experts for the presentles repeatedly use reports of the valuations of certain properties.
to employees' benefits, and for the valuations of certain properties.

The Finances Corporate Directorate monitors the work of those experts in order to cheek. The Finances Corporate Directorate in and independence, the validity of the data and competence, training, accreated interness of the hypotheses used, if applicable.

F.4 Information and communication

State whether the company has at least the following, describing their main characteristics:

F.4.1. A specifically assigned function for defining and updating accounting doubts or A specifically assigned fulliation or department) and resolving doubts of conflicts arising from their interpretation, maintaining a free flow of confilicis arising frole responsible for operations in the organisation, as well as an up-to-date accounting policy manual distributed to the business units through which the company operates.

The functions of the Management of Consollidation and Reporting, belonging to the The functions of the Management of efine and communicate the accounting policies and Finance Corporate Directorate, are to being the enquiries about the accounting standards and their interpretation.

The Management of Consolidation and Reporting keeps abreast of changes in the The Management of Consolibation communications with the external advisors and accounting standards by means of collection of collection of the acrounting manual through the training which they the never in the accounting manual have to be updated.

The issue of all types of accounting standards is centralised in the Finance Corporate The issue of all types of accounting standation and Reporting department, Directorate through their Management of Ecappropriate, applying, the modifications published in the regulations.

The Logista Group has a Manual of Accounting Policies, issued on October 9th accounting The Logista Group has a Manual of Account establishing and describing the accounting last update on 2017, with the purpose on Coancial Information of all the logista Group
policles and the Accounts Plan to which the financial and formulation, of the policies and the Accounts Plan to whication and the formation and formulation of the companies, the management information annual Accounts must mandatorily be submitted.

In this way, it is intended to ensure that the content of the financial information and of In this way, it is intended to ensure that that that the Logist and on time the individual and Chisolidated, and that they are prepared on time.

The Manual contains and explains the key Good practices of Internal Financial Control of The Manual contains and explains the Rey Good on and accounting of the most significant
the Group; the rules of registration and valuations the rules for preparation the Group; the rules of registration and valoation s Accounting; the rules for preparations carded put elements of the assets and liabliculas below the spelled to the operations carried out the Financial information, and now they should rules, and in particular, contain different by the Group; the consolidation and reporting the financial statements and other areas of special annexes for each of the treatment of long-term incentive plans and recording of provisions, for example.

F.4.2. Measures for capturing and preparing financial Information with Measures "Tor" capplication and use by all of the units of the entity or the group, and which contain the main financial statements and notes, as well as detailed information regarding ICFR.

The Logista Group main ERP tool is the "SAP', which is used to record, at individual level, The Logista Group main Lions from which financial Information Is-shallerica Group the accounting than account All the companies which constitute the Logista Group subsidianes of the Ligista' Group. Fal of accounts, which is homogenous and common to the whole Logista Group, contained in the Accounting Manual.

The consolidated financial statements are prepared centrally from the financial statements which are reported in the established format by each of the Logista Group statements which are reportedgista Group has HFM consolldation software, which the subsidiaries. To do that, the Logiota and companies use for reporting, and which enable with the Logista Group subsidiances and analysed at individual and consolidated levels. In the to be aggregated, nomogene are checks to ensure the correctness of the consolidated financial statements.

In addition, the Consolidation and Reporting Department, as part of the Accounting Manual, has developed a series annoxes- such as the procedures for consolidation, for Manual, Thas of veloped on and for reporting, which are applicable to all the companies inter-company transactions and one which establish the mechanisms for collecting and which consulture the Logistation in homogenous formats, the general rules, rules for the preparing milancial moother of manual entries, opinions and estimates (including insertion of entries, for the upprections) and a system for communicating financial information to the senior projecment and ensuring the homogeneity of the process of drawing up financial information,

F.5 Supervision of system performance

Describe at least the following:

F.5.1. The activities of the audit committee in overseeing ICFR as well as The 'activities' or clicing a audit function that has among its mandates wheeler of the committee and the task of supervising the internal control system, including ICFR. Additionally, describe the scope of ICFR system, mendoms person responsible prepares the assossment reports on its results, whether the company has an action plan describing possible corrective whether the compact on financial reporting is considered.

Through the Internal Audit Corporate Directorate, Body entrusted with the Supervision of the Through the Internal Audic Corporate Director the Audit and Control Committee has carried out the following supervlsion activities during the fiscal year:

· Approval of the audit activities related to ICFR to be executed according to Ann of the Samorator Approval of the adolt action includes the review of the key controls of the Corporate Audit Han Tor 2023, while acounting processes, as well as the operational processes of Consolidation and General Record business in Spain, France and Italy; SCIF Purchases-accounts payable Biran processes that are subject to audit will also be included controls of those other operations Prese annual activities have been considered sufficient based on the premises established for the supervision of the ICFR within the 2019-2021 Strategic Audit Plan.

• Quarterly monitoring of the results of the ICFR reviews performed by the internal Audit Quarterly monitoring of the results of the impact of the weaknesses detected.
  Corporate Directorate, Including the evaluation of the action plan implementation . Corporate Directorate, including the evaluation of the action plan implementation
  in the financial information, as well as the progress on the action plan implementation resulted during the audit reports.
• Review of the information about the ICFR which is included in the Annual Report on . Corporate Governance.
• · Review of the report of the External Auditor's opinion on this subject.

The Logista Group has an Internal Auditing Corporate Department with functional dependence on The Logista Group has an Internal Auditing Corporate Department of the Market item
the Chairman of the Audit and Control Committee, composed by 8 employees, and a budget item for outsourcing Audit services in France.

lor be and Audit Policy, approved by the Board of Directors through its Audit and Control In its Internal Audit Policy, approved by the Buditor of Breaponsibility of the activity
Committee on 2015, and updated in 2019, the purpose, authority are "defined. Within Committee on 2015, and updated in 2019, the posts of an are defined. Within the
of Internal Auditing, and its position within the organisation are establi of Internal Auditing, and its position within "the "Organizations others), are established:
responsibilities of the said function, the following competencies (among others),

• To evaluate whether the processes, activities and aims of hiternal Control which To evaluate whether the processes, decircol are adequate, effective and the Board of constitute the Logista Group System efficient, and guarantee the Group, the Australist of the system of management and Directors of the Logista Graup the checive sope somendations, either directly or through the control of Risks, If Risks, If Internal Control, for its strengthening;
• Supervision of the System of Internal control of Financial Reporting (ICFR).

With regard to planning, communication with the Audit and Control Control Committee, and With regard to planning, communication with "the "Adail" likies are defined in the internal Audit Policy:

• it in an open dialogue with the Management and the Audit and Control Committee, the In an open dialogue with the Management and management on an appropriate method of
  drawing-up of an Annual Plan for Internal Auditing of expressed by the Businesses or drawing-up of an Annual Plan for intel hall nother expressed by the Businesses of
  Risk management, and, if appropriate, on the Annual Plan must be mainly orientated Risk management, and, if appropriates, on the Armual Plan must be mainly orlentated
  Corporate Directorates. The work involved in the Amisage work for special, ad hoc Corporate Directorates, The Work Involved in end see work for special, ad hoc
  towards the Group's important Risks. The Plan and new undation of the Plan, will be sent towards the Group's important Risks. The Tan, and any updating of the Plan, will be sent to the Audit and Control Committee for its approval;
• The performance of the work described in the approved Audit and Control Committee, The performance of the work described in the open the Audit and Control Committee, or the Board of Directors;
• of the books of regular (at least quarterly) summary reports to the Auditing in fulfilment of the preparation and despatch of regular (at carrythy of Internal Auditing in fulfilment of
  and Control Committee, on the results of the actives not included in the Plan, and and Control Committee, on the results of ther actions not included in the Plan, and on
  the Annual Plan for Internal Auditing, or of other actions not includes on the Senior the Annual Plan for internal Auditiis, or of the Corporate Directorates or the Senior Management of the recommendations made;
• Managements and for the Businesses and/or Corporate Directorates in the definition of the collaboration with the Businesses and/or corporations, and supervision of their correct
  plans of action to comply with their recommendations, and supervision of their correct starting-up and implementation;

(a) According to its internal Audit Plan, approved by the Audit and Control Committee, activities, activities According to its internal Addit have been carried out. More specifically, af then 2010-2021 related to ICFR supervision nave bection criteria of the CNMV Guide of June 2010 are adopted, has been prepared in which the lotel in evaluation by carrying out an evaluation that covers which allows belining the scope of year or throughout several fiscal years, in which case for each
the entire of the ICFR in each fiscal year or throughout several listed fo the entire of the ICFA in Each fiscal yethe financial statements or locations may as whether it has of them, rotation policies of areas of the spending on various factors such as whether it has already been reviewed, process changes, etc. ...

Subject to review in the current fiscal year have been most of the tobacco purchase processes in Subject to review in the current fiscal yefinancial statements, sales process for the integration of countries with significant inpact on the corporate general accounting and consolidation processes.
The Integra2 business, as well as the corporate general accounting accurs i the Integraz business, as well as the conptitions about the SCIF of tobacco sales in Italy
Likewise, in the first quarter of the year, the conclusions about the SCIF of the Elkewise, in the first quarter of the year, the familian in the previous year, in the previous year,
in the corporate process for the purchase of non-inventory SCUS, costrol and the corporate process for the pur operational nature that have covered SCIFF controls, in the were issued. As for the addits of an open of open the process were carried out, as well as the regional warehouses of Anagni, Crotone and Bari in Italy.

As part of ICFR evaluation process, which conclusions are included in audit reports for each rols As part of ICFR evaluation process, willfied the operative of the critical controls business and process adolted, it is verties evaluate if there are significant linternal described at the existing iCPN observial information; if so, the financial impact is measured, and control deficiencies related to miander to solve them resulting in action plans. Deficiencies are corrective measures are set op in criticallty, a responsible is appointed and they are monitored until its final solution.

During the current fiscal year, no internal control deficiencies have been detected with significant During the current listal year, no internel control control although it has been weaknesses on The Audit and Control Committee those adjustments or reclassifications, not significant, raised as a result of the audit reviews.

F.5.2. If there Is a procedure by which the account auditor (in accordance with If the contents of the Normas Técnicas de Auditoria (NTA) - "Auditing Standards"), Internal auditor and other experts may communicate with Standards , .
5enior management and the audit committee or senior managers of the sentor management significant weakness in internal control identified company regulew of the annual accounts or any others they have been ouring the review offer whether an action plan is available for correcting or mitigating any weaknesses found.

The Audit and Control Committee meets at least quarterly with the aim of obtaining The Audit and Control Cossary information in order to fulfil the responsibilities entrusted to it by the Board of Directors. There is an annual activities calendar in entrusted to it by the booming of functions that the Audit and Control Committee is assigned, and execute the periodical activities, notwithstanding that Committee is assigned, in the program come to light or the planned ones could be subject to changes. This calendar has been prepared on the basis of the provisions be subject to changes. This calendar of Good Governance recommendations of the Listed of the Capital Cumpanies Law, the Technical Guide on Audit Commissions of public Companies of the Citiw V and the Regulations of the Board of Directors. In this discusses, the interest entitles and the negate internal Anternal Audit breator, the External Auditors, and fiscal experts or other experts when this is considered necessaryIn this regard:

• · The external auditors are present at, and report on, all the sessions of the Committee The external auditors are present asyther and accounts formulations are analysed. In in which regulated informedial mormediations report to the Committee on important Auditing those sessions, the external additions identified as those which and Accounting Thateers, and on System to improve. They also present the planning would enable the internal Colli or of othodology, legislative innovations, and any other information considered to be useful.
• · Corporate Internal Audit Director has full access to the Audit Committee, attending Corporate Internal Addit Directorning others, quarterly information, agreed actions plans its sessions as a guest issues, among other other other agreed actions plans
  detected significant Internal Control weaknesses, including weaknesses in Internal detected significant internal Correcting the detected weaknesses in Internal arising out of the authis with a view and evolution of these action plans until their proper implementation.

Additionally, the Chairman of the Audit and Control Committee issues to the Board Additionally, the Chairman of the Adentified on these committees, which of Directors a summary report of the mall Control identified during the review
summarize the significant weaknesses in Internal Controllied as any, other financial summarize the significant weaklesses and accounts, as well as any other financial
processes, the analysis of the annual accounts, as any other subjects that processes, the analysis of the amilial deaction plans, or any other subjects that have been entrusted to the Audit and Control Committee.

Lastly, both the Corporate Finance Department and the Corporate Director of Internal Audit, hold private Finance Beth the Chairman of the Audit and Control Internal Audit, noid private meetings the sessions, the work, its conclusions, the Committee, to discuss the scope of the Control Committee, as well as any other information deemed appropriate.

F.6 Other relevant information

No other relevant information regarding the ICFR implemented in the Group has been No other relevant information regarding the ferre for it miples corresponding to this epigraph F.

F.7 External auditor's report

Report from:

F.5.3. If the ICFR information submitted to the markets has been subject to If the ICFR information suditor, in which case the entity shall include its review by the exchment. If not, reasons why should be given.

The Logista Group has submitted for review by the external auditors the information about The Logista crous sent to the markets for fiscal year 2019.

The scope of the auditors' review procedures was in accordance with Greatas in which the The scope of the auditors review procedures were de Cuentas de España, in which the
19th July, 2013, of the Instituto de Censores Jurados de the Sustem of Internal Control o 19th July, 2013, of the Institute of Lenson's relating to the System of Internal Control of
'Guide to Action and Model Auditor's Report relating as an annex, was published. 'Guide to Action and Model Addror's Report relating to world as an annex, was published.
Financial Reporting (ICFR) in quoted entities', which is attached as an annex, was pu

G EXTENT OF COMPLIANCE WITH CORPORATE GOVERNANCE RECOMMENDATIONS

Specify the company's level of compliance with recommendations from the Unified Code of Good Governance.

In the event that a recommendation is not followed or only partially followed, a detailed explanation should be included explaining the reasons in such a manner that shareholders, investors and the market in general have enough information to judge the company's actions. General explanations are not acceptable.

1. That the Articles of Association of listed companies do not limit the maximum number of votes that may be cast by one shareholder or contain other restrictions that hinder the takeover of control of the company through the acquisition of shares on the market.

Complies Explanation

• 1. That when the parent company and a subsidiary are listed on the stock market, both should publicly and specifically define:
  2. a) The respective areas of activity and possible business relationships between them, as well as those of the listed subsidiary with other group companies.
  3. b) The mechanisms in place to resolve any conflicts of interest that may arise.

Complies [ Complies Partially ] Explanation ] Not Applicable [&

• 1. That, during the course of the ordinary General Shareholders' Meeting, complementary to the distribution of a written Annual Corporate Governance Report, the chairman of the Board of Directors makes a detailed oral report to the shareholders regarding the most material aspects of corporate governance of the company, and in particular:
  2. a) Changes that have occurred since the last General Shareholders' Meeting.
  3. b) Specific reasons why the company did not follow one or more of the recommendations of the Code of Corporate Governance and, if so, the alternative rules that were followed Instead.

Complies [ Complies partially [] Explanation []

1. That the company has defined and promoted a policy of communication and contact with shareholders, institutional investors and proxy advisors that complies in all aspects with rules preventing market abuse and gives equal treatment to similarly situated shareholders.

And that the company has made such a policy public through Its web page, including information related to the manner in which said policy has been implemented and the identity of contact persons or those responsible for implementing it.

Complies E Complies partially [] Explanation []

1. That the Board of Directors should not propose to the General Shareholders' Meeting any proposal for delegation of powers allowing the issuance of shares or convertible securities without pre-emptive rights in an amount exceeding 20% of equity at the time of delegation.

And that whenover the Board of Directors approves any issuance of shares or convertible securities without pre-emptive rights the company immediately publishes reports on Its web page regarding said exclusions as referenced in applicable company law.

Complies @ Complies partially [ Explanation []

• 1. That listed companies which draft reports listed below, whether under a legal obligation or voluntarily, publish them on their web page with sufficient time before the General Shareholders' Meeting, even when their publication is not mandatory:
  2. a) Report regarding the auditor's independence.
  3. b) Reports regarding the workings of the audit committee and the appointments and remuneration committee.
  4. c) Report by the audit committee regarding related-party transactions
  5. d) Report on the corporate social responsibility pollcy.

Complies [ Complies partially ] Explanation []

1. That the company reports In real time, through its web page, the proceedings of the General Shareholders' Meetings.

Complies | Explanation 2

The Board of Directors has not considered it necessary so far, due to the current floating capital (37.36%).

1. That the audit committee ensures that the Board of Directors presents financial statements in the audit report for the General Shareholders' Meetings which do not have qualifications or reservations and that, in the exceptional circumstances in which qualifications may appear, that the chairman of the audit committee and the auditors clearly explain to the shareholders the content and scope of said qualifications or reservations.

Complies [ Complies partially [ Explanation ]

1. That the company permanently maintains on its web page the requirements and procedures for certification of share ownership, the right of attendance at the General Shareholders' Meetings, and the exercise of the right to vote or to issue a proxy.

And that such requirements and procedures promote attendance and the exercise of shareholder rights in a non-discriminatory fashion.

Complies L Complies partlally [] Explanation []

• 1. That when a verified shareholder has exercised his right to make additions to the agenda or to make new proposals to it with sufficient time in advance of the General Shareholders' Meeting, the company:
  2. a) Immediately distributes the additions and new proposals.
  3. b) Publishes the attendance card credential or proxy form or form for distance voting with the changes such that the new agenda items and alternative proposals may be voted upon under the same terms and conditions as those proposals made by the Board of Directors.
• c) Submits all of these items on the agenda or alternative proposals to a vote and applies the same voting rules to them as are applied to those drafted by the Board of Directors including, particularly, assumptions or default positions regarding votes for or against.
• d) That after the General Shareholders' Meeting, a breakdown of the results of said additions or alternative proposals is communicated.

Complies DI Complies Partially [] Explanation [] Not Applicable ]

1. That, In the event the company intends to pay for attendance at the General Shareholders' Meeting, it establish in advance a general policy of long-term effect regarding such payments.

Complies [ Complles Partially LJ Explanation ] Not Applicable [

1. That the Board of Directors completes its duties with a unity of purpose and Independence, treating all similarly situated shareholders equally and that it is guided by the best interests of the company, which is understood to mean the pursuit of a profitable and sustainable business in the long term, and the promotion of continuity and maximisation of the economic value of the business.

And that in pursuit of the company's interest, in addition to complying with applicable law and rules and in engaging in conduct based on good faith, ethics and a respect for commonly accepted best practices, it seeks to reconcile its own company interests, when appropriate, with the interests of its employees, suppliers, clients and other stakeholders, as well as the impact of its corporate activities on the communities in which It operates and the environment.

Complies @ Complies partially L Explanation L

1. That the Board of Directors is of an adequate size to perform its duties effectlvely and collegially, and that its optimum size is between five and fifteen members.

Complies & Explanation

• 1. That the Board of Directors approves a selection policy for directors that:
  2. a) Is concrete and verifiable.
  3. b) Ensures that proposals for appointment or re-election are based upon a prior analysis of the needs of the Board of Directors.
  4. c) Favours diversity in knowledge, experience and gender.

That the resulting prior analysis of the needs of the Board of Directors is contained in the supporting report from the appointments committee published upon a call from the General Shareholders' Meeting submitted for ratification, appointment or reelection of each director.

And that the selection policy for directors promotes the objective that by the year 2020 the number of female directors accounts for at least 30% of the total number of members of the Board of Directors.

The appointments committee will annually verify compliance with the selection policy of directors and explain its findings in the Annual Corporate Governance Report.

Complies @ Complies partially [] Explanation []

1. That proprietary and independent directors constitute a substantial majority of the That prophetty and that the number of executive directors is kept at a minimum, taking into account the complexity of the corporate group and the percentage of equity participation of executive directors.

Complies [ Complies partially [ Explanation [

1. That the percentage of proprietary directors divided by the number of non-executive directors Is no greater than the proportion of the equity interest in the company represented by said proprietary directors and the remaining share capital.

This criterion may be relaxed:

• a) In companies with a high market capitalisation in which interests that are legally considered significant are minimal.
• b) In companies where a diversity of shareholders is represented on the Board of Directors without ties among them.

Complies & Explanation

1. That the number of independent directors represents at least half of the total number of directors.

Nonetheless, when the company does not have a high level of market capitalisation or in the event that it is a high cap company with one shareholder or a group acting in a coordinated fashion who together control more than 30% of the company's equity, the number of independent directors represents at least one third of the total number of directors.

Complies 区 Explanation D

• 1. That companies publish and update the following information regarding directors on the company website:
  2. a) Professional profile and biography.
  3. b) Any other Boards to which the director belongs, regardless of whether the companies are listed, as well as any other remunerated activities engaged in, regardless of type.
  4. c) Category of directorship, Indicating, in the case of Individuals who represent significant shareholders, the shareholder that they represent or to which they are connected.
  5. d) The date of their first appointment as a director of the company's Board of Directors, and any subsequent re-election.
  6. e) The shares and options they own.

Complies [ Complies partially [ Explanation []

1. That the Annual Corporate Governance Report, after verification by the appointments That the Annual Corpora for the appointment of proprietary directors at the proposal of the shareholders whose equity interest is less than 3%. It should also proposal of the shareable, why formal requests from shareholders for membership on the Board meeting were not honoured, when their equity interest is equal to or on the board meeting whose proposal for proposal for proprietary directors was honoured.

Complies i] Complies Partially [] Explanation [] Not Applicable [

1. That proprietary directors representing significant shareholders must resign from the That prophetaly uncecor they represent disposes of its entire equity interest. They should also resign, in a proportional fashion, in the event that said shareholder should also resign, in enterest to a level that requires a decrease in the number of proprietary directors representing this shareholder.

Complies [ [ Complies Partially ]] Explanation ( ] Not Applicable [

1. That the Board of Directors may not propose the dismissal of any independent That the board of the director's term provided for in the Articles of director Belone the London of Directors finds Just cause and a prior report has been prepared by the appointments committee. Specifically, just cause is considered to prepared by the applines on new duties or commits to new obligations that would exist if the director une ability to dedicate the time necessary for attention to the interiere with ms or his post as a director, fails to complete the tasks inherent to his duties attendant to may of the circumstances which would cause the loss of independent status in accordance with applicable law.

The dismissal of independent directors may also be proposed as a result of a public The disimissar of more or similar transaction entailing a change in the shareholder share of the company, provided that such changes in the structure of the Board structure of the proportionate representation criteria provided for in Recommendation 16.

Complies Explanation []

1. That companies establish rules requiring that directors inform the Board of Directors I nat companies establis resign from their posts, when circumstances arise which may and, where appropriate, respection. Specifically, directors must be required to report any criminal acts with which they are charged, as well as the consequent legal proceedings.

And that should a director be indicted or tried for any of the offences set out in And that Should' a the easil of Directors must investigate the case as soon as company law legislation, the particular situation, decide whether the director should possible and, based on the pard of Directors must provide a reasoned written account of all these events in its Annual Corporate Governance Report.

Complies [ Complies partially II Explanation []

1. That all directors clearly express their opposition when they consider any proposal I hat an directors cleard of Directors to be against the company's interests. This submitted to the boorndent directors and directors who are unaffected by a particularly applies to interest if the decision could be detrimental to any shareholders not represented on the Board of Directors.

Furthermore, when the Board of Directors makes significant or cheveld decisions Furthermore, when the noars serious reservations, the director should draw the appropriate conclusions and, in the event the director decides to resigned the appropriate conclusions in the letter referred to in the next recommendation.

This recommendation also applies in the case of the secretary of the Board of Directors, despite not being a director.

Complies [ Complies Partially [ Explanation [] Not Applicable [

1. That whenever, due to resignation or any other reason, a director leaves before the That whenever, due to resignitie director should explain the reasons for this decision completion of his of his of hel term, the Board of Directors. Irespective of in a letter adoressed to an the need reported as a relevant fact, it must be included in the Annual Corporate Governance Report.

Complies [ Complies Partially [] Explanation [] Not Applicable [ ]

1. That the appointments committee ensures that non-executive directors have sufficient time in order to properly perform their dutles.

And that the Board rules establish the maximum number of company Boards on which directors may sit.

Complies [ Complies partially [] Explanation []

1. That the Board of Directors meet frequently enough so that it may effectively perform its dutles, at least eight times per year, following a schedule of dates and agenda its dutles, at least eight times per year and allowing each director individually to propose items do not originally appear on the agenda.

Complies [ Complies partially ] Explanation ]

1. That director absences only occur when absolutely necessary and are quantified in the Annual Corporate Governance Report. And when absences occur, that the director appoints a proxy with instructions.

Complies [ Complies partially [] Explanation []

1. That when directors or the secretary express concern regarding a proposal or, in the That when directors of the direction in which the company is headed and said.
   case of directors, regarding the direction in which the recluded be included case of directors, regarding the Board of Directors, such concerns should be included in the minutes, upon a request from the protesting party.

Complies [ [ Complies Partially [] Explanation [ Not Applicable []

1. That the company establishes adequate means for directors to obtain appropriate That the company establishes abelp duties including, should circumstances warrant, external advice at the company's expense.

Complies [ Complies partially ] Explanation []

1. That, without regard to the knowledge necessary for directors to complete their That, without regard to the courses available to them when circumstances require

Complies [ Explanation [ Not Applicable []

1. That the agenda for meetings clearly states those matters about which the Board of Directors are to make a decision or adopt a resolution so that the directors may study or gather all relevant information ahead of time.

When, under exceptional circumstances, the chairman wishes to bring urgent matters for decision or resolution before the Board of Directors which do not appear on the agenda, prior express agreement of a majority of the directors shall be necessary, and said consent shall by duly recorded in the minutes.

Complies [ Complies partially [ Explanation LI

1. That directors shall be periodically informed of changes in equity ownership and of the opinions of significant shareholders, investors and rating agencies of the company and its group.

Complies [ Complies partially [ Explanation ]

1. That the chairman, as the person responsible for the efficient workings of the Board rnet the creating in addition to carrying out his duties required by law and the Articles of of Directors, should prepare and submit to the Board of Directors a schedule of dates Association, to be considered; organise and coordinate the periodic evaluation of the Board as well as, if applicable, the chief executive of the company, should be responsible for leading the Board and the effectiveness of its work; ensuring that sufficient time is devoted to considering strategic issues, and approve and supervise refresher courses for each director when circumstances so dictate.

Complies [ Complies partially ] Explanation []

1. That when there Is a coordinating director, the Articles of Association or the Board rules should confer upon him the following competencies In addition to those rules should Come of the Board of Directors in the absence of the chairman and deputy chairmen, should there be any; reflect the concerns of non-executive directors; lialse with Investors and shareholders in order to understand their points of view and respond to their concerns, in particular as those concerns relate to of view and respond to the company; and coordinate a succession plan for the chairman.

Complies [] Complies Partially ] Explanation U Not Applicable [图

1. That the secretary of the Board of Directors should pay special attention to ensure That the activities and decisions of the Board of Directors take into account the that the activities regarding good governance contained in this Code of Good Governance and which are applicable to the company.

Complies 区 Explanation

• 1. That the Board of Directors meet in plenary session once a year and adopt, where appropriate, an action plan to correct any deficiencies detected in the following:
  2. a) The quality and efficiency of the Board of Directors' work.
  3. b) The workings and composition of its committees.
  4. c) Diversity of membership and competence of the Board of Directors.
  5. d) Performance of the chairman of the Board of Directors and the chief executive officer of the company.

e) Performance and input of each director, paying special attention to those in charge of the various Board committees.

In order to perform its evaluation of the various committees, the Board of Directors will take a report from the committees themselves as a starting point and for the evaluation of the Board, a report from the appointments committee.

Every three years, the Board of Directors will rely upon the assistance of an external advisor for its evaluation, whose Independence shall be verified by the appointments committee.

Business relationships between the external adviser or any member of the adviser's group and the company or any company within its group shall be specified in the Annual Corporate Governance Report.

The process and the areas evaluated shall be described in the Annual Corporate Governance Report.

Complies Complies partially | Explanation |

1. That if there is an executive committee, the proportion of each different director category must be similar to that of the Board Itself, and its secretary must be the secretary of the Board.

Complies [] Complies Partially [] Explanation [] Not Applicable [

1. That the Board of Directors must always be aware of the matters discussed and decisions taken by the executive committee and that all members of the Board of Directors receive a copy of the minutes of meetings of the executive committee.

Complies [] Complies Partially ] Explanation U Not Applicable [ 2

1. That the members of the audit committee, in particular its chairman, are appointed in consideration of their knowledge and experience in accountancy, audit and risk management issues, and that the majority of its members be Independent directors.

Complies [8] Complies partially | Explanation ]

1. That under the supervision of the audit committee, there must be a unit In charge of the internal audit function, which ensures that information and internal control systems operate correctly, and which reports to the non-executive chairman of the Board or of the audit committee.

Complies Do Complies partially | Explanation |

1. That the person in charge of the group performing the internal audit function should present an annual work plan to the audit committee, reporting directly on any issues that may arise during the implementation of this plan, and present an activity report at the end of each year.

Complies [ Complies Partially [] Explanation [ Not Applicable ]

• 1. That in addition to the provisions of applicable law, the audit committee should be responsible for the following:
  2. 1. With regard to information systems and internal control:
• a) Supervise the preparation and integrity of financial information relative to the company and, if applicable, the group, monitoring compliance with governing rules and the appropriate application of consolidation and accounting criteria.
• b) Ensure the independence and effectiveness of the group charged with the internal audit function; propose the selection, appointment, re-election and dismissal of the head of internal audit; draft a budget for this department; approve its goals and work plans, making sure that its activity is focused primarily on material risks to the company; receive periodic information on its activities; and verify that senior management takes into account the conclusions and recommendations of its reports.
• c) Establish and supervise a mechanism that allows employees to report confidentially and, if appropriate, anonymously, any irregularities with important consequences, especially those of a financial or accounting nature, that they observe in the company.
• 1. With regard to the external auditor:
  2. a) In the event that the external auditor resigns, examine the circumstances which caused said resignation.
  3. b) Ensure that the remuneration paid to the external auditor for its work does not compromise the quality of the work or the auditor's independence,
  4. c) Insist that the company file a relevant fact with the CNMV when there is a change of auditor, along with a statement on any differences that arose with the outgoing auditor and, if applicable, the contents thereof.
  5. d) Ensure that the external auditor holds an annual meeting with the Board of Directors in plenary session in order to make a report regarding the tasks accomplished and regarding the development of its accounting and risks faced by the company.
  6. e) Ensure that the company and the external auditor comply with applicable rules regarding the rendering of services other than auditing, proportional limits on the auditor's billing, and all other rules regarding the auditor's Independence.

Complies [ Complies partially ] Explanation ]

1. That the audit committee may require the presence of any employee or manager of the company, even without the presence of any other member of management.

Complies [ Complies partially ] Explanation []

1. That the audit committee be kept abreast of any corporate and structural changes planned by the company in order to perform an analysis and draft a report beforehand to the Board of Directors regarding economic conditions and accounting Implications and, in particular, any exchange ratio involved.

Complies [& Complies Partially ] Explanation U Not Applicable []

• 1. That the risk management and control policy identify, as a minimum:
  2. a) The various types of financial and non-financial risks (among those operational,

technological, legal, social, environmental, political and reputational which the technological, legal, solor, financial or economic risks, contingent liabilities and other off balance sheet risks.

• b) Fixing of the level of risk the company considers acceptable.
• c} Means identified in order to minimise identified risks in the event they transpire.
• d) Internal control and information systems to be used in order to control and manage identified risks, Including contingent liabilities and other off balance sheet risks.

Complies [ Complies partially U Explanation []

• 1. That under the direct supervision of the audit committee or, if applicable, of a That under the 'uffee of the Board of Directors, an internal control and management function should exist delegated to an internal unit or department of the company which is expressly charged with the following responsibilitles:
  2. a) Ensure the proper functioning of risk management and control systems and, in particular, that they adequately identify, manage and quantify all material risks that may affect the company.
  3. b) Actively participate in the creation of the risk strategy and in important decisions regarding risk management.
  4. C) Ensure that the risk management and control systems adequately mitigate risks as defined by policy Issued by the Board of Directors.

Complies [ Complies partially ] Explanation D

1. That members of the appointment and remuneration committee - or of the I hat members on the eand the remuneration committee if they are separate - are appointments connant the knowledge, ability and experience necessary to perform the duties they are called upon to carry out and that the majority of said members are independent directors.

Complies [ Complies partially ] Explanation [

1. That high market capitalisation companies have formed separate appointments and remuneration committees.

Complies IT Explanation D Not Applicable [8]

1. That the appointments committee consult with the chairman of the Board of Directors I hat the appointinents of the company, especially in relation to matters concerning executive directors.

And that any director may ask the appointments committee to consider potential And that any oneecon interes appropriate to fill a vacancy on the Board of Directors.

Complies [ Complies partially [ Explanation []

• 1. That the remuneration committee exercises its functions independently and that, in addition to the functions assigned to it by law, it should be responsible for the following:
  2. a) Propose basic conditions of employment for senior management.
  3. b) Verify compliance with company remuneration policy.
  4. c) Periodically review the remuneration policy applied to directors and senior managers, including remuneration involving the delivery of shares, and guarantee that individual remuneration be proportional to that received by other directors and senior managers.
  5. d) Oversee that potential conflicts of Interest do not undermine the independence of external advice rendered to the Board.
  6. e) Verify information regarding remuneration paid to directors and senior managers contained in the various corporate documents, including the Annual Report on Director Remuneration:

Complies [ Complies partially [ Explanation []

1. That the remuneration committee consults with the chairman and the chief executive of the company, especially in matters relating to executive directors and senior management.

Complies [ Complies partially ] Explanation 1]

• 1. That the rules regarding composition and workings of supervision and control committees appear in the rules governing the Board of Directors and that they are consistent with those that apply to mandatory committees in accordance with the recommendations above, Including:
  2. a) That they are comprised exclusively of non-executive directors, with a majority of them independent.
  3. b) That their chairmen be Independent directors.
  4. c) That the Board of Directors select members of these committees taking into account their knowledge, skills and experience and the duties of each committee; discuss their proposals and reports; and detall their activities and accomplishments during the first plenary session of the Board of Directors held after the committee's last meeting.
  5. d) That the committees be allowed to avail themselves of outside advice when they consider it necessary to perform their duties.
  6. e) That their meetings be recorded and the minutes be made available to all directors.

Complies [ [ Complies Partially [ Explanation [ Not Applicable ]

1. That verification of compliance with corporate governance rules, Internal codes of conduct and social corporate responsibility policy be assigned to one or split among more than one committee of the Board of Directors, which may be the audit committee, the appointments committee, the corporate social responsibility committee in the event that one exists, or a special committee created by the Board of Directors pursuant to its powers of self-organisation, which at least the following responsibilities shall be specifically assigned thereto:

2. a) Verification of compliance with internal codes of conduct and the company's corporate governance rules.

3. b) Supervision of the communication strategy and relations with shareholders and Supervisible of the small- and medium-sized shareholders.
4. c) The periodic evaluation of the suitability of the company's corporate governance The periodic evaluation of the sultmany promotes company interests and take system, with the goal that the couplements of other stakeholders.
   Into account, where appropriate, the legitimate interests of other stakeholders.
5. d) Review of the company's corporate social responsibility policy, ensuring that it is orientated towards value creation.
6. e) Follow-up of social responsibility strategy and practice, and evaluation of degree of compliance.
7. f) Supervision and evaluation of the way relations with various stakeholders are handled.
8. g) Evaluation of everything related to non-financial risks to the company, including Evaluation of everything related cal, social, environmental, political and reputational.
9. h) Coordination of the process of reporting on diversity and reporting non-financial Coordination of the process of repplicable rules and international benchmarks.

Complies 区 Complies partially [] Explanation [

• 1. That the corporate social responsibility policy include principles or commitments, That the corporate social responsible specific stakeholders and identifies, as a minimum:
  2. a) The objectives of the corporate social responsibility policy and the development of tools to support it.
  3. b) Corporate strategy related to sustainability, the natural environment and social Issues.
  4. c) Concrete practices in matters related to: shareholders, employees, clients, Concrete practices in matters Tel environment, diversity, fiscal responsibility,
     suppliers, social issues, the natural environment, diversity, sonduct suppliers, social issues, the prevention of unlawful conduct.
  5. d] Means or systems for monitoring the results of the application of specific Means or systems for monitoring the preceding paragraph, associated risks, and their management.
  6. e) Means of supervising non-financlal risk, ethics, and business conduct.
  7. f) Communication channels, participation and dialogue with stakeholders.
  8. g) Responsible communication practices that Impede the manipulation of data and protect integrity and honour.

Complies [ Complies partially ] Explanation II

1. That the company reports, In a separate document or within the management report, That the company reports, in a separate social responsibility, following internationally recognised methodologies.

Complies [ Complies partially il Explanation []

1. That director remuneration be sufficient in order to attract and retain directors who meet the desired profile and to adequately compensate them for the meet the desired profess and responsibility demanded of their posts, while not being denication, qualifically remise the independent Judgment of non-executive directors.

Complies 区| Explanation []

1. That only executive directors receive remuneration linked to corporate results or personal performance, as well as remuneration in the form of shares, options or rights personal performance, as whose value is indexed to share value, or long-term savings to shares or insion plans, retirement accounts or any other retirement plan.

Shares may be given to non-executive directors under the condition that they maintain ownership of the shares until they leave their posts as directors. The maintain ownership of to shares that the director may be obliged sell in order to meet the costs related to their acquisition.

Complies & Complies partially | Explanation []

1. That as regards variable remuneration, the policies incorporate limits and administrative safeguards in order to ensure that said remuneration is in line with the work performance of the beneficiaries and are not based solely upon general work performance "or the sector in the sector in which the company operates, or other similar circumstances.

And, In particular, that varlable remuneration components:

• a) Are linked to pre-determined and measurable performance criteria and that such Are iniked to pro account the risk undertaken to achieve a given result.
• b) Promote sustainability of the company and include non-financial criteria that are geared towards creating long term value, such as compliance with rules and Internal operating procedures and risk management and control policies.
• c) Are based upon balancing short-, medium- and long-term objectives, permitting Are based upon balances achievement over a period of time long enough to Judge the reward of continuo value such that the benchmarks used for evaluation are creation of one-off, seldom occurring or extraordinary events.

Complies [ [ Complies Partially [] Explanation ] Not Applicable []

1. That a material portion of variable remuneration components be deferred for a minimum period of time sufficient to verify that previously established performance criteria have been met.

Complies [ [ Complies Partially [ Explanation [] Not Applicable [

1. That remuneration related to company results takes into account any reservations I hat remuneration related to cal auditor's report which would diminish said results.

Complies [ ] Complies Partially [ Explanation Li Not Applicable []

1. That a material portion of variable remuneration for executive directors depends upon the delivery of shares or instruments indexed to share value.

Complies [2] Complies Partially [] Explanation [] Not Applicable []

1. That once shares or options or rights to shares arising from remuneration of a That once shares or options of rights to sibited from transferring ownership of a
   have been delivered, directors are prohibited from transferring and the have been delivered, orectors are times their annual fixed remuneration, and the number of shares equivalent to two until a term of at least three years has elapsed since they received said shares.

The forgoing shall not apply to shares which the director may need to sell in order to
r ment the costs related to their acquisition.

Complies [ [ Complies Partially [] Explanation [] Not Applicable []

1. That contractual arrangements include a clause which permits the company to seek
   that sayment That contractual arrangements include components in the event that payment
   reimbursement of variable remuneration components made hased upon reimbursement of variable remance criteria or when delivery was made based upon data later deemed to be inaccurate.

Complies [ [ Complies Partially ] Explanation [ Not Applicable []

1. That payments made for contract termination shall not exceed an amount equivalent That payments made for contract temeration and that it shall not be paid until the to two years of total annual remoneration understablished all previously established criteria
   company has verified that the director has fulfilled all previously established for payment.

Complies | | Complies Partially | Explanation | Not Applicable | |

FURTHER INFORMATION OF INTEREST

• 1. If there is any aspect regarding corporate governance in the company of this report, but if there is any aspect regarding corporate "good in other sections of this report, but companies in the group that have not accomplete and comprehensible picture of
     which are necessary in order to obtain a more complete and comprehensible them briefly which are necessary in order to obtain a more or group, describe them briefly below.
• 1. This section may also be used to provide any other information, explanation on This section may also be 'used 'to' province executive report, so long as it is relevant and not redundant

Specifically, state whether the company is subject to any corporate governance Specifically, state whether the coinpany legislation other than that differs from the data requested in this report.

1. The company may also state whether it voluntarily comples with other ethical or best The company may also state whenci, sector-based, or other. In such a case, name the practice codes, whether international, secty began following it, it should be specifically code in question and the date the company began forest of 20 July, 2010

Note to Section C.1.32

Note to Section enable work exceeds 70 per cent in the Company since, as a Holding entity, it The amount of non-audit work exceeds 70 per central stuch as the limited review of the supports the verification services by the Culisonal Cro the period ended 31. March 2019 of
Interim Condensed Consolidated Finance Unidings S.A. and Subsidiaries, prepared acc Interim Condensed Consolidated Finalitat S.A. and Subsidiaries, prepared according to
Compañía de Distribución Integral Logista Holdings, S.A. and Subsidiaria ( Compañía de Distribución Integral Logista núiding of the Internal Control System of the Financial
Information Financial Information", the auditing of the Internal Informatio IAS34 "Interim Financial Information", the auditing of the Internal Statement of the Company.

Note to Section C.1.39

Note S.L. Shareh, 2017, the General Shareholders' Meeting appoint Deloites S.L. and On 21" March, 2017, the General Sharendiers' his in the Individual and Consolidated
PricewaterhouseCoopers Auditores, S.L. as joint auditors of the Individual and PricewaterhouseCoopers Auditores, S.L. as julit additors of England September 30", 2017, 2018 and 2019.

2015.
In consequence, Deloitte, S.L. has been auditing for six consecutive financial vears, and In consequence, Deloitte, S.L. nas been android consisted by and that Deloitte, S.L. has PricewaterhouseCoopers Auditores, S.L, for three. Nowever, proup is considered, existing
been the auditor of the Group's accounts for 20 years, if the previous Group is cons prior to the Company's 2014 IPO.

prior to the company s the number of years that the Company has been audited is 100%, The percentage that represents the nomber of years in the Scounts have been audited is 100%,
Deloitte, S.L., over the number of years in a c. L. in the Groun's accounts, the Deloitte, S.L., over the number of years in which the Group's accounts, the percentages
and by PricewaterhouseCoopers Auditores, S. Lis 50%. For the Group's accounts, S.L and by PricewaterhouseCoopers Auditores, Studitores, S. S. S. S. S.

This Annual Corporate Governance Report was approved by the Board of Directors of the company at the meeting held on 29th October 2019.

State whether any directors voted against or abstained from voting on this report.

Yesti

No |2

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A.

Auditors' report on the "Information relating to the System of Auditors Teport on the Incial Reporting (ICFR)" of Compañía de Internal Control ovel Logista Holdings, S.A. for the fiscal year
Distribución Integral Logista Holdings, S.A. for the fiscal year ended on September 30th, 2019

This version of our report is a free translation of the original, which was prepared in Spanish. All
e the supplies been taken to ensure that the translation is an accurate r This version of our report is a free translation is an accurate representation of the
possible care has been taken to ensure that the translation, views or opinions, the ori possible care has been taken to ensure that the translation, views or opinions, the original
original. However, in all matters of interpretation, views or opinions, vever, in all matters of interpretation of information over this translation.

Auditors' report on the "Information relating to the System of Internal Control Auditors' report on the "Information reading to the pistribución Integral Logista
over Financial Reporting (ICFR)" of Compañía de Distribución Integral Logista inancial Reporting (ICFR) of Companier on September 30th, 2019

To the Directors of Compañía de Distribución Integral Logista Holdings, S.A.:

In accordance with the request of the Board of Directors of Compañía de Distribución Integral
Corporador Categoria Arc("http://aod.our.engagement letter dated April 16", 201 In accordance with the request of the Board of Directors of Companie 4e Dister, 2019, we have
Logista Holdings, S.A. ("the Entity") and our engagement letter dated April 2007 Logista Holdings, S.A. ("the Entily") and our engagement letter bated applie de
Logista Holdings, S.A. ("the accompanying "Information reating to the ICPR" of Compañia de
2 ession of certain procedures to the accompanying "under on September 30", 2019, 2019, 2019, 2019, 2019, 2019, 2019, 10:47
Distribución Integral Logista Holdings, S.A. for th epistion Integral Logista Holdings, S.A. for the fiscal year ended on September of September 2017
which summarises the internal control procedures of the Ently in relation t reporting.

reper any
The Board of Directors is responsible for adopting the appropriate measures in order to reasonably
The Board of Directors is responsible for adopting the appropheals internal control.
guarantee the impresentation, maintenance and supervision of an adequisition the guarantee the improvenents to that system and for preparing and establishing the
system and for making improvenents to the ICFR system and establishing the goren and for making improvements to that system and for preparing and establing of the may be
content of the accompanying information relating to the ICFR system included in content of the accompanying monomance Report (ACGR).

It should be noted in this regard, irrespective of the design and operational It should be noted in this regard, irrespective of the besign on open and the management of the management of the mannection effectiveness of the internal control system adopted by the eliter assurance in the connection
reporting, that the system can only permit reasonable, but not absolute, as any reporting, that the system can only permit reasonable, but hot ubsoluce, a control system.
with the objectives pursued, due to the limitations inherent to any internal contro

In the course of our joint audit work on the financial statements and pursuant to Technical In the course of our joint audit work on the financial statements and portsount of the Entity was to
Auditing Standards, the sole purpose of our assessment of the internal co Auditing Standards, the sole purpose of our assessment of the marked to the arolied to the arolied to the enable us to establish the scope, nature and timing of the addit procedurel for the
entity's financial statements, Therefore, our assessment of internal contribution in Entity's financial statements. Therefore, our assessments was not sufficiently extensive to
purposes of the aforementioned audit of financial statements was not sufficiently purposes of the aforementloned audit of financial statements was not sumarally of the charger over the
enable us to express a specific opinion on the effectiveness of the in regulated annual financial reporting.

For the purpose of issuing this report, we applied exclusively the specific procedures described.
The specific be the the Culdelines on the Auditors' Report on the Informatio For the purpose of issuing this report, we applied exclusivery the Internation relating to the
below and Indicated in the Guldelines on the Auditors' Report on the Span below and Internal Control over Financial Reporting of Listed Companies, published by the Spanish
System of Internal Control over Financial Reporting of Listed Companies, pub System of Internal Control over Financial Reporting of Listed Companies, publication of Securities the berformed,
National Securities Market Commission on its website, which Bytional Securities Market Commission on its website, which establisher mork resulting from such the minimum scope thereof and the content of this report. Since the ware of an that of an
procedures has, in any case, a reduced scope that is significantly less extensive th nrondures has, in any case, a reduced scope that is significancy ress excellation on the effectiveness
audit or a review of the Internal control system, we do not express an autit or a review of the loter in system, we do not expless an opinion in the Entity's anual financial bure of or on its design or operating effectives , in telador to the Line Line accompanying reporting for the fiscal year ended on September 30", 2019-best hure a those
information on the ICFR system. Therefore, had we applied procedures additional to the inte reportion on the ICFR system. Therefore, had we applied in alled on a review of the internal
established in the aforentioned Guidelines or performed an audit or aspects might established in the aforementioned Guidelines or performed an addit of are matters
control over the regulated annual financial reporting, other matters or aspects might have b control over the regulation of the been reported to you.

Deloitte, S.L. Domicilio social: Plaza Pablo Ruiz Picasso, 1, Torre Picasso, 28020 Madrid, España
La Partido Social: 13.6.015.14E-14E-14E-14E-180, www.delouttre.co.

Tel. : +34 915 145 000 Fax: +34 915 145 180, www.delelitte.co.
Tel. : +34 915 145 000 Fax: +34 915 145 180, www.deleitte. Tel: +34 915 145 000 Fax: +34 915 145 180, www.delaite.com, m-54414, inscripción 964
Registro Mercantii de Madrid, tomo 13.650, sección 84, folio 188, hoja M-54414, Inscripci Registro Mercantil de Madrid, tomo 13.650. Seciento - C.I.F.:B-79104469.

Inschita chi el R. G. G. G. G. Torre PwC, Po do la Castellana 259 B, 28046 Madrid, España
Pricewaterhouse Auditores, S.L., Torre PwC, Po de la Castellana 259 B, 2800, www.pwr PricewaterhouseCoopers Auditores, S.L., Torre PWC, P- 685 400, www.pwc.os
Tel.: +34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400, www.pwc.os Ficew34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400, WWW.J02.05
Tel. +34 915 684 400 / +34 912 68 - 1250-1, follo 75, tonno 9.267, libro 8.054, seccion 34
Registro Me Registro Mercantil de Madrid, hoja 87.250-1, fullo 75, fonto 75, fonto 3526.
Inscrita en el R.O.A.C. con el número 50242 - CIF: B-79031290

Also, since this special engagement does not constitute an audit of financial statements and is not Also, since this special engagement does not consults on audit of mindmin in the terms provided for in that Law.

The procedures applied were as follows:

• I. Reading and understanding of the information prepared by the Entliv in relation to the ICFR
  I wheel Reading and understanding of the information prepart - and assessment of whether
  system - disclosure information included in the Directors' report - and assessment of when system – disclosure information included in the piredd a neporting the minimum content
  this information addresses all the information of the ICER system, of the ACGR form, this information addresses all the information fequiled constants of the ACGR form, as
  described in section F, relating to the description of the ICFR system, of the ACGR fo described in section F, relating to the description of the ICTR System, or creating of the recular 2/2018 of June 12th 2018.
• 1. Inquiries of personnel in charge of preparing the information detailed in point I above for the Inquiries of personnel in charge of preparing the monnation process; (ii) obtainment of the purpose of achieving: (i) familians who the perminology used is adapted to the information required in order to assess whether the centified in the matten on whether the definitions provided in the reference framework, (tir) obtaminent of the Entity.
     aforementioned control procedures have been implemented and are in use at the Entity.
• 1. Review of the explanatory documents supporting the information detailed in point 1 above, Review of the explanatory documents supportung been believe of the ICFR
     including documents directly made available to those reports prepared b including documents directly mate available to thisse reports prepared by the systems. In this respect, the arorementioned documentation method rexternal experts providing
     Internal Audit Department, senior executives or other internal or external exper support functions to the Audit Committee.
• 1. Comparison of the information detailed in point 1 above with the knowledge on the Entity's Comparison of the information detailed in point I above with the financial statement audit work.
     ICFR obtained through the procedures applied during the financial statement a
• 1. Reading of the minutes taken at meetings of the Board of Directors, Audit and Control Reading of the minutes taken at meetings of the Entity to evaluate the consistency between the ICFR
     Committee and other committees of the Entitled in noint 1 above. Committee and other committees on the information detailed in point 1 above.
• 1. Obtainment of the representation letter in connection with the work performation drigned by Obtainment of the representation letter in connection with the work performation of above.
     those responsible for preparing and formulating the information detailed in point.

The procedures applied to the information relating to the ICFR system did not disclose any The procedures applied to che a chect the information.

This report has been prepared exclusively in the context of the requirements of article 540 ul
es and the control by CSWA Circular E/2013, amended by CNMV Circular 7/2015 This report has been prepared exclusively in the concext by CNMV Circular 7/2015 of
Corporate Enterprises Act and by CNVV Circular 5/2013, amended by Corporate Enterprises Act and by CNMV Circular 2/2013, annenaeu by Chile, published by the
December 22ª, 2015, and amended by CMM Circular 2/2018, published by the December 22™, 2015, and amended by CNNV C.itchar 2/2016 of Still Clevel Clering Collection of the ICFR
Spanish National Securities Market Commission for the purposes of the I Spanish National St.connate Governance Reports.

Deloitte, S.L.

PricewaterhouseCoopers Auditores, S.L.

[Original In Spanish signed by Victoria López Téllez (nº ROAC 21,238)]

[Original in Spanish signed by Raúl Llorente Adrián (nº ROAC 20,613)]

4 November 2019

Independent Auditors' Report, Financial Statements and Directors' Report for the year ended 30 September 2019

Deloitte.

Translation of a report originally issued in Spanish based on our work performed in accordance with the audit regulations in force in Spain and of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company in Spain (see Notes 2 and 14), In the event of a discrepancy, the Spanish-language version prevails.

Independent Auditors' Report on Financial Statements

To the Shareholders of Compañía de Distribución Integral Logista Holdings, S.A.,

Report on the Financial Statements

Opinion

We have audited the financial statements of Compañía de Distribución Integral Logista Holdings, S.A. (the Company), which comprise the balance sheet as at 30 September 2019, and the income statement, statement of changes in equilty, statement of cash flows and notes to the financial statements for the year then ended ("2019").

In our opinion, the accompanying financial statements present fairly, in all material respects, the equity and financial position of the Company as at 30 September 2019, and its results and Its cash flows for the year then ended in accordance with the regulatory financial reporting framework applicable to the Company (identified in Note 2.1 to the financial statements) and, in particular, with the accounting principles and rules contained therein.

Basis for Opinion

We conducted our audit in accordance with the audit regulations in force in Spain. Our responsibilities under those regulations are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report.

We are independent of the Company in accordance with the ethical requirements, including these pertaining to independence, that are relevant to our audit of the financial statements in Spain pursuant to the audit regulations in force. In this regard, we have not provided any services other than those relating to the audit of financial statements and there have not been any situations or circumstances that, in accordance with the aforementioned audit regulations, might have affected the requisite independence in such a way as to compromise our independence.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a hasis for our opinion.

. Deloltte, S.L. Registered office: Plaza Pablo Ruiz Picasso, 1, Torro Picason, 28020 Madrid, Spain Tel .: +34 915 145 000 Fax: 134 915 145 180, www.delaitte.es Madrid Mercantile Register, volume 13.650, section 8, sheet 188, page M-54414, entry III. 96 Registered in ROAC under no. 50692 - Employer Identification Number: R-79104469,

Pricewater house Coopers Auditores, S.L., Torre PWC, Pased de la Castellano 259 8, 28046 Madrid, Spain Tel. +34 915 684 400 / +34 902 021 111, Fax! +34 915 685 400, www.pwc.es Maddid Meccantile Register, page 87.250-1, sheet 75, volume 9.267, book 8.054, section 3 Registered in ROAC under no. S0242 - Employer Identification Number B-79031290

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matters

How the Matters Were Addressed in the Audit

Valuation of non-current investments in Group companies

At 30 September 2019, the Company was the sole shareholder of Compañía de Distribución Integral Logista, S.A.U., as Indicated in Note 5.1 to the financial statements.

This investment represents the principal Item in the Company's financial statements, accounting for approximately 94% of the total assets

As Indicated in Note 4.1 to the financial statements, the Company assesses the existence of possible Impairment losses by comparing carrying amount with recoverable amount, which is the higher of fair value less costs of disposal and the present value of the future cash flows from the investment. The measurement of the aforementioned investment requires the use of significant judgements and estimates by management, both in determining the valuation method and in considering the key assumptions established for each method chosen.

The materiality of the investment owned, which amounted to EUR 975 million at the reporting date, led us to determine the situation described as a key matter in our audit.

As described in Note 4.1 to the financial statements, management concluded that the aforementioned Investment is not Impaired,

Our audit procedures included, among others, a review of the process Implemented by the Company to assess the potential impairment of the investment in Compañía de Distribución Integral Logista, S.A.U.

We reviewed the cash flow projections of the principal businesses Integrated in the investment and its subsidiaries, and the process used to prepare them, which included comparing the projections with the latest plans approved by the Board from which they are derived. Additionally, we have made a contrast with the trading value at closing.

Also, we evaluated the methodologies used by the Company, concluding that management's approach is consistent and is supported by the available evidence.

As a result of our procedures, we consider that management's conclusions regarding the absence of indications of impairment are adequate and are supported by the available evidence.

Lastly, we ascertained that the disclosures included in Note 5.1 to the accompanying financial statements In connection with this matter are in conformity with the applicable accounting regulations,

Other Information; Directors' Report

Other information comprises only the directors' report, the formulation of which is the responsibility of the Parent company's directors and does not form an integral part of the annual accounts.

Our audit opinion on the annual accounts does not cover the directors' report. Our responsibility regarding the information contained in the directors' report is defined in the fegislation governing the audit practice, which establishes two distinct levels in this regard:

• a) A specific level applicable to certain information included in the Annual Corporate Governance Report, as defined in article 35,2 b) of Audit Act 22/2015, that consists of verifying solely that the aforementioned information has been provided in the directors' report and if not, we are required to report that fact.
• b) A general level applicable to the rest of the information included in the directors' report that consists of evaluating and reporting on the consistency between that information and the annual accounts as a result of our knowledge of the Entity obtained during the audit of the aforementioned financial statements and does not include information different to that obtained as evidence during our audit, as well as evaluating and reporting on whether the content and presentation of that part of the management report is in accordance with applicable regulations. If, based on the work we have performed, we conclude that material misstatements exist, we are required to report that fact.

On the basis of the work performed, as described above, we have ascertained that the information mentioned in paragraph a) above has been provided in the directors' report and that the rest of the information contained in the directors' report is consistent with that contained in the annual accounts for the 2019 financial year, and its content and presentation are in accordance with the applicable regulations.

Responsibilities of the Directors and of the Audit and Control Committee for the Financial Statements

The directors are responsible for preparing the accompanying financial statements so that they present fairly the Company's equity, financial position and results in accordance with the regulatory Financial reporting framewark applicable to the Company in Spain, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors elther intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The audit and control committee is responsible for overseeing the process involved in the preparation and presentation of the financial statements.

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that Includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the audit regulations in force in Spain will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, Individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the audit regulations in force In Spain, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstalement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of Internal control.
• · Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's Internal control.
• · Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
• · Conclude on the appropriateness of the directors of the going cancern basis of accounting and, based on the audit evidence obtained, whether a material uncertainly exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, If such disclosures are Inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• · Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the entity's audit and control committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the audit and control committee with a statement that we have complied with relovant ethical requirements, including those regarding independence, and we have communicated with it to report on all matters that may reasonably be thought to jeopardise our independence, and where applicable, on the related safeguards.

From the matters communicated with the audit and control committee, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters.

We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter.

Report on Other Legal and Regulatory Requirements

Additional Report to the Company's Audit and Control Committee

The opinion expressed in this report is consistent with the content of our additional report to the Company's audit and control committee dated on 4 November 2019.

Engagement Period

The Annual General Meeting held on 21 March 2017 appointed us as joint auditors for a period of three years from the year ended 30 September 2017.

Previously, Deloltte, S.L. had been designated pursuant to a resolution of the General Meeting for the period of three years from the year ended 30 September 2014, the first year following the Company's incorporation.

Services Provided

The services other than financial audit services provided to the audited entity were those described in Note 8.3 to the accompanying financial statements for 2019.

In relation to non audit services provided to subsidiaries, see the audit report dated on 4 November 2019 over consolidated financial statements of Compañía de Distribución Integral Logista Holdings, S.A. and subsidiaries.

Deloitte, S.L. (S0692)

PricewaterhouseCoopers Auditores, S.L. (S0242)

[Original in Spanish signed by Victoria López Téllez (nº ROAC 21,238)]

[Original in Spanish signed by Raúl Llorente Adrián (nº ROAC 20,613)]

4 November 2019

Financial Statements for the year ended 30 September 2019 and Director's Report

Translation of a report originally issued in Spanish based on our work performed in accordance with the audit regulations in force in Spain and of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Company (see Notes 2 and 14). In the event of a discrepancy, the Spanish-language version prevails.

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A.

BALANCE SHEET AT 30 SEPTEMBER 2019 AND 2018

(Thousands of Euros)

ASSETS	Notes	30-09-2019	30-09-2018	EQUITY AND LIABILITIES	Notes	30-09-2019	30-09-2018
NON-CURRENT ASSETS:		974,689		973,904 EQUITY:	Note 6	1,036,499	1,023,612
Non-current investments in Group companies and associates-	Note 5.1	974,689		973,904 SHAREHOLDERS' EQUITY:		1,036,499	1,023,612
Equity instruments		974,689		973,904 Share capital		26,550	26,550
				Share premium		867,808	867,808
				Reserves		29,381	20,330
				Legal reserves		5,310	5,310
				Other reserves		24,071	15,020
				Other contributions of the shareholders		6,052	5,266
				Interim dividend		(48,938)	(46,314)
				Treasury shares		(9,893)	(8,349)
				Profit for the period		165,539	158,321
				NON - CURRENT LIABILITIES:		-	4,460
				Deferred tax liabilities	Note 7.5	-	4,460
				CURRENT LIABILITIES:		(4,974)	24,297
CURRENT ASSETS:		66,784		78,465 Debts with Group Companies and Associates	Note 9	-	19,642
Current tax receivables	Note 7	12,622		78,403 Trade and other payables-		4,655	4,655
Current investments in Group companies and associates	Note 9	54,138	-	Payable to suppliers		814	734
Cash and cash equivalents-		24		62 Staff		-	58
Cash		24		62 Other debts with public authorities	Note 7.1	4,160	3,863
TOTAL ASSETS		1,041,473	1,052,369	TOTAL EQUITY AND LIABILITIES		1,041,473	1,052,369

The accompanying Notes 1 to 14 and Appendix I are an integral part of the balance sheet at 30 September 2019.

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A.

INCOME STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2019 AND 2018

(Thousands of Euros)

	Notes	2019	2018
Revenue:	Notes 5.1 & 8.1	162,398	150,893
Income from investments in equity instruments		162,398	150,893
Staff costs:		(1,010)	(881)
Wages, salaries and similar expenses	Note 8.2	(1,010)	(881)
Other Operating expenses		(694)	(734)
PROFIT FROM OPERATIONS		160,694	149,278
Finance costs:		(116)	(614)
On debts to Group companies and associates	Note 9	(116)	(614)
Finance income:		50	-
On investments to Group companies and associates		46	-
On investments to Other		4	-
FINANCIAL LOSS		(66)	(614)
PROFIT BEFORE TAX		160,628	148,664
Income tax	Notes 7.3 & 7.4	4,911	9,657
PROFIT FOR THE YEAR		165,539	158,321

The accompanying Notes 1 to 14 and Appendix I are an integral part of the 2019 income statement.

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A.

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2019 AND 2018 A) STATEMENT OF RECOGNISED INCOME AND EXPENSE

(Thousands of Euros)

	2019	2018
PROFIT PER INCOME STATEMENT	165,539	158,321
TOTAL INCOME AND EXPENSE RECOGNISED DIRECTLY IN EQUITY		-
TOTAL TRANSFERS TO PROFIT OR LOSS	- -	-
TOTAL INGRESOS Y GASTOS RECONOCIDOS	165,539	158,321

The accompanying Notes 1 to 14 and Appendix I are an integral part of the 2019 statement of recognised income and expense.

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A.

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 SEPTEMBER 2019 AND 2018 B) STATEMENT OF CHANGES IN TOTAL EQUITY

				Other			Profit /
	Share	Share		Contributions of	Interim	Treasury	(Loss) for
	Capital	Premium	Reserves	the Shareholders	Dividend	Shares	the Period	Total
BALANCE AT 30-09-2017	26,550	867,808	11,293	5,415	(39,708)	(7,716)	149,102	1,012,744
Total recognised income and expense	-	-	-	-	-	-	158,321	158,321
Transactions with shareholders:
Equity-instrument-based transactions (Notes 6.5 and 6.7)	-	-	(1,107)	(149)	-	2,733	-	1,477
Operations with treasury shares	-	-	-	-	-	(3,366)	-	(3,366)
Distribution of profit 2017	-	-	10,144	-	39,708	-	(149,102)	(99,250)
Dividends	-	-	-	-	(46,314)	-	-	(46,314)
BALANCE AT 30-09-2018	26,550	867,808	20,330	5,266	(46,314)	(8,349)	158,321	1,023,612
Total recognised income and expense	-	-	-	-	-	-	165,539	165,539
Transactions with shareholders:
Equity-instrument-based transactions (Notes 6.5 and 6.7)	-	-	(1,113)	786	-	2,010	-	1,683
Operations with treasury shares	-	-	-	-	-	(3,554)	-	(3,554)
Distribution of profit 2018	-	-	10,164	-	46,314	-	(158,321)	(101,843)
Dividends	-	-	-	-	(48,938)	-	-	(48,938)
BALANCE AT 30-09-2019	26,550	867,808	29,381	6,052	(48,938)	(9,893)	165,539	1,036,499

(Thousands of Euros)

The accompanying Notes 1 to 14 and Appendix I are an integral part of the 2019 statement of changes in total equity.

COMPAÑÍA DE DISTRIBUCIÓN INTEGRAL LOGISTA HOLDINGS, S.A.

STATEMENT OF CASH FLOW FOR THE YEAR ENDED 30 SEPTEMBER 2019 AND 2018

(Thousands of Euros)

	Notes	2.019	2.018
CASH FLOWS FROM OPERATING ACTIVITIES:		214,776	96,176
Profit for the year before tax		160,628	148,664
Adjustments for-		66	614
Finance costs	Note 9	116	614
Finance income		(50)	-
Changes in working capital-		320	2,506
Trade and other payables		320	2,506
Other cash flows from operating activities-		53,762	(55,608)
Interest paid		(116)	(614)
Interest received		50	-
Collection/Payments for income tax		53,828	(54,994)
CASH FLOWS FROM FINANCING ACTIVITIES:		(214,814)	(96,125)
Proceeds and payments realting to equity instruments-	Note 6	(1,544)	(633)
Acquisition of treasury shares		(1,544)	(633)
Proceeds and payments relating to financial liability instruments-	Note 9	(62,489)	50,072
Proceeds from issue of borrowings from Group companies and associates		169,612	198,617
Repayment of debts to group companies		(232,101)	(148,545)
Dividends payment and remuneration of other equity instruments-		(150,781)	(145,564)
Dividends payment		(150,781)	(145,564)
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS		(38)	51
Cash and cash equivalents at beginning of year		62	11
Cash and cash equivalents at end of year		24	62

The accompanying Notes 1 to 14 and Appendix I are an integral part of the 2019 statement of cash flow.

Notes to the annual Financial Statements for the year ended 30 de September de 2019

1. Company activity

Compañía de Distribución Integral Logista Holdings, S.A., was incorporated as a sociedad anónima (Spanish public limited company) on 13 May 2014, with its sole shareholder being Altadis S.A.U., a company belonging to the Imperial Brands PLC Group. On 26 May 2014, the Company was registered in the Mercantile Registry as a sole-shareholder company.

The Company's registered office is at Polígono Industrial Polvoranca, calle Trigo, número 39, Leganés (Madrid).

On 4 June 2014, the Company effected a capital increase with all shares subscribed by Altadis S.A.U. through non-monetary contribution of shares representing 100% of the share capital of Compañía de Distribución Integral Logista, S.A.U., until that time the parent company of the Logista Group, from then onwards, the Company became the Parent of the aforementioned Group.

The offering of shares in the Company came to an end on 14 July 2014, and its shares are currently listed for trading on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges (see Note 6).

The reporting period of most of the Group companies starts on 1 October of each year and ends on 30 September of the following year. The twelve-month period ended 30 September 2018 will hereinafter be referred to as "2018"; the period ended 30 September 2019 as "2019", and so on.

The activity performed by the Company since its incorporation has been that of a holding company. The company is the Parent of a distributor and logistics operator Group, which provides various distribution channels with a wide range of value added products and services, including tobacco and tobacco byproducts, convenience goods, electronic documents and products (such as mobile phone and travel card top-ups), drugs, books, publications and lottery tickets. In order to provide these services, the Group has a complete infrastructure network, which spans the whole value chain, from picking to POS delivery.

The Company, as parent of a group of subsidiaries, prepares consolidated financial statements separately in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRSs). The consolidated financial statements of Logista Group for 2019 were formally prepared by its directors at the Board of Directors meeting held on 29 October 2019.

In comparison with these separate financial statements, the consolidated financial statements for the year ended 30 September 2019 reflect an increase in assets and revenue of EUR 6,042,094 thousand and EUR 9,985,925 thousand, respectively, and a decrease in profit or loss of EUR 913 thousand. This effect also includes the impact of the application of EU-IFRSs on the consolidated financial statements.

In turn, Altadis, S.A.U., the Company's parent, belongs to the Imperial Brands PLC Group, which is governed by the corporate legislation in force in the United Kingdom, and whose registered office is at 121 Winterstoke Road, Bristol, BS3 2LL (United Kingdom). The consolidated financial statements of the Imperial Brands PLC Group for 2018 were formally prepared by its Directors at the Board of Directors meeting held on 6 November 2018.

2. Basis of presentation of the financial statements

2.1 Regulatory financial reporting framework applicable to the Company

These financial statements were formally prepared by the Directors in accordance with the regulatory financial reporting framework applicable to the Company, which consists of:

• a. The Spanish Commercial Code and all other Spanish corporate law.
• b. Law on Corporations consolidated text.
• c. The Spanish National Chart of Accounts approved by Royal Decree 1514/2007 and the amendments thereto introduced by Royal Decrees 1159/2016 and 602/2016.
• d. The mandatory rules approved by the Spanish Accounting and Audit Institute in order to implement the Spanish National Chart of Accounts and the relevant secondary legislation.
• e. All other applicable Spanish accounting legislation.

2.2 Fair presentation

The financial statements for 2019, which were obtained from the Company's accounting records, are presented in accordance with the regulatory financial reporting framework applicable to the Company and, in particular, with the accounting principles and rules contained therein and, accordingly, present fairly the Company's equity, financial position, results of operations and cash flows for the corresponding period. These financial statements, which were formally prepared by the Company's Directors, will be submitted for approval by the General Meeting, and it is considered that they will be approved without any changes.

The financial statements for 2018 were approved at the Annual General Meeting held on 26 March 2019.

2.3 Accounting principles applied

The directors formally prepared these financial statements taking into account all the obligatory accounting principles and standards with a significant effect hereon.

2.4 Key issues in relation to the measurement and estimation of uncertainty

In preparing the accompanying financial statements estimates were made by the Company's Directors in order to measure certain of the assets, liabilities, income, expenses and obligations reported herein. These estimates relate basically to the following:

• The calculation of allowances for financial assets (see Note 4.1).
• The assessment of the long-term obligations to employees of the companies in the Group headed by the Company (see Note 4.4).
• The assessment of the income tax expense (see Note 4.3).

Although these estimates were based on the best information available at the close of 2019, it is possible that future events may require these to be raised or lowered in the coming years. This would be done prospectively, recognising the effects of the changes in accounting estimates in the relevant future financial statements.

2.5 Comparative information

The information relating to 2018 included in these notes to the financial statements is presented solely for comparison purposes with that relating to 2019.

2.6 Grouping of items

Certain items in the balance sheet, income statement, statement of changes in equity and statement of cash flows are grouped together to facilitate their understanding; however, whenever the amounts involved are material, the information is broken down in the related notes to the financial statements.

2.7 Materiality

In preparing these financial statements the Company omitted any information or disclosures which, not requiring disclosure due to their qualitative importance, were considered not to be material in accordance with the concept of Materiality defined in the conceptual framework applicable to the Company.

3. Distribution of profit

The proposed distribution of the profit for 2019, amounting to EUR 165,539 thousand, that the Company's Directors will submit for approval by the shareholders at the Annual General Meeting is as follows:

	Thousands of Euros
To legal reserve Dividends Interim dividend (Note 6.4)	9,074 107,527 48,938
	165,539

Pursuant to the legislation in force, the Company assessed the liquidity statement on the date of approval of the interim dividend. Based on this assessment, on 23 July 2019 the Company had EUR 102 million available for drawdown against the credit line granted by Compañía de Distribución Integral Logista, S.A.U. to the Company (the drawable limit of which is EUR 115 million and against which the Company has drawn down EUR 13 million).

4. Accounting policies and measurement bases

The principal accounting policies and measurement bases used by the Company in preparing its financial statements for 2019, in accordance with the Spanish National Chart of Accounts, were as follows:

4.1 Financial instruments

4.1.i Financial assets

Equity investments in Group companies

Group companies are deemed to be those related to the Company as a result of a relationship of control.

These investments are measured at cost or contribution value net, where appropriate, of any accumulated impairment losses. The method used to determine the value of the shares received through the non-monetary contribution made by Altadis, S.A.U. was to maintain the carrying amount of the contributed shares in the separate financial statements of the contributing company at the date of contribution.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the corresponding write-down is recognised through the income statement.

Value in use is calculated on the basis of an estimate of the future cash flows generated by each cashgenerating unit, discounted at a rate which reflects the current value of money and the specific risks associated with the assets. Fair value is considered to be the value at which the asset in question could be disposed of under normal conditions, and it is determined on the basis of market data, comparable transactions, etc.

Impairment losses and, where appropriate, their reversal, are recognised as an expense or as income, respectively, in the income statement.

The Company assesses the existence of possible impairment losses by comparing carrying amount with recoverable amount, which is the higher of fair value less costs of disposal and the present value of the future cash flows from the investment. Additionally, the Company has made a contrast with the trading value at closing.

At 30 September 2019 and 2018, the Company's Directors had not tested for impairment the ownership interest in Compañía de Distribución Integral Logista, S.A.U. (see Note 5.1).

Loans and receivables

The loans granted are measured at their amortised cost, which is understood to be the initial value plus accrued interest and repayment premiums based on the effective interest rate, minus the principal and interest repayments, while also considering possible reductions due to impairment or uncollectibility.

Cash and cash equivalents

Cash includes both cash and demand deposits.

The Company derecognises a financial asset when it matures and collection is made or when the rights to the future cash flows have been transferred and substantially all the risks and rewards of ownership of the financial asset have been transferred.

4.1.ii Financial liabilities

Trade payables, loans received and other accounts payable are initially recognised at fair value, which generally coincides with their nominal value, reduced by transaction costs, and are subsequently measured at amortised cost.

The Company derecognises financial liabilities when the obligations giving rise to them cease to exist.

4.1.iii Equity instruments

Equity instruments issued by the Company are recognised in equity at the proceeds received, less issue and arrangement costs.

The acquisition by the Company of treasury shares is disclosed separately at cost as a reduction of equity in the balance sheet. No gain or loss is recognised in income statement on transactions involving own equity instruments.

4.2 Revenue and expense recognition

Revenue and expenses are recognised on an accrual basis, i.e. when the actual flow of the related goods and services occurs, regardless of when the resulting monetary or financial flow arises. Revenue is measured at the fair value of the consideration received, net of discounts and taxes.

Interest income from financial assets is recognised using the effective interest method and dividend income is recognised when the shareholder's right to receive payment has been established. Interest and dividends from financial assets accrued after the date of acquisition are recognised as income.

4.3 Income tax

Tax expense (or tax income) comprises current tax expense (or current tax income) and deferred tax expense (or deferred tax income).

The current income tax expense is the amount payable by the Company as a result of income tax settlements for a given year. Tax credits and other tax benefits, excluding tax withholdings and prepayments, and tax loss carryforwards from prior years effectively offset in the current year reduce the current income tax expense.

The deferred tax expense or income relates to the recognition and derecognition of deferred tax assets and liabilities. These include temporary differences measured at the amount expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities and their tax bases, and tax loss and tax credit carryforwards. These amounts are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled.

In general, deferred tax liabilities are recognised for all taxable temporary differences. However, deferred tax assets are recognised to the extent that it is considered probable that the Company will have taxable profits in the future against which the deferred tax assets can be utilised.

Deferred tax assets and liabilities arising from transactions charged or credited directly to equity are also recognised in equity.

The deferred tax assets recognised are reassessed at the end of each reporting period and the appropriate adjustments are made to the extent that there are doubts as to their future recoverability. Also, unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that they will be recovered through future taxable profits.

From 2017 onwards, the Company is the parent of the tax group, with tax Group number 548/17 assigned.

4.4 Pension and other employee benefit obligations

On 4 June 2014, the Company's Board of Directors approved the 2014 long-term incentive plan structure (general plan and special plan), vesting from 1 October 2014 to 30 September 2019, which is made up of three blocks of three years each, with plan settlements taking place on completion of each block.

The terms of these plans recognise the right of certain workers of companies in the Group headed by the Company to receive a given number of Company shares at the end of the third year from commencement of each of the three blocks into which the plan is divided, taking into account the degree of achievement of certain internal financial and operating benchmarks, total shareholder return and profitability compared with other companies.

On 29 January 2015, the Board of Directors approved the list of beneficiaries (47 included in the general plan and 10 in the special plan) and made an estimate of the cost of the first block (2014-2017). The total estimated cost of the first tranche of the plan was EUR 2,856 thousand.

On 26 January 2016, the Board of Directors approved the second tranche of the 2014 Long-Term Incentive Plan (the General Plan and the Special Plan) for the 2015-2018 vesting period. The beneficiaries of the second tranche numbered 50 for the General Plan and 10 for the Special Plan. The total estimated cost of the second tranche is EUR 2,491 thousand.

On 24 January 2017, the Board of Directors approved the third tranche of the 2014 Long-Term Incentive Plan (the General Plan and the Special Plan) for the 2016-2019 vesting period. The beneficiaries of the second tranche numbered 56 for the General Plan and 9 for the Special Plan. The total estimated cost of the second tranche is EUR 2,623 thousand.

On 20 December 2016 the Company's Board of Directors approved new long-term incentive plans for the 2017-2022 period, which will be divided into three three-year tranches, the first of which begins on 1 October 2017.

On 23 January 2018, the Company's Board of Directors approved the first tranche's (2017-2020) beneficiaries, being 58 the beneficiaries included in the General Plan and 9 the ones considered in the Special Plan. The total estimated cost for the first tranche amounts to EUR 2,933 thousand.

In order to cater for the equity-settled 2014 long-term incentive plan and the 2017 incentive plan, and by virtue of the authorization granted by the Board of Directors, the Group acquired 747,461 treasury shares for EUR 15,110 thousand (EUR 3,554 thousand in 2019, EUR 3,366 thousand in 2018 and EUR 3,161 thousand in 2017 and EUR 4,359 thousand in 2016 and EUR 670 thousand in 2015) (see Note 6.6).

On 23 January 2018, the Board of Directors approved the settlement of the First Vesting Period (2014- 2017) of the General Plan and Special Plan of the 2014. The settlement gave rise to the delivery for no consideration of a total of 137,022 shares amounting to EUR 2,702 thousand to the beneficiaries of the two plans. The shares were delivered net of the related tax withholding. The Company also delivered 1,454 shares amounting to EUR 28 thousand to a beneficiary of the plan. In 2017 24,189 treasury shares amounting to EUR 477 thousand were delivered to two beneficiaries.

On 28 November 2017, the Board of Directors extended to 1 October 2018 the Company's Extended Share Repurchase Programme (up to 560,476 shares, 0.42% of the share capital), to include them in the second and third tranches of the 2014 long-term incentive.

On 25 September 2018 the Board of Directors extended to 1 October 2019 the Company's Extended Share Repurchase Programme (up to 641,372 shares, 0.48% of the share capital), to include them in the second and third tranches of the 2014 long-term incentive plan and the first tranche of the 2017 long-term incentive plan.

On 29 January 2019, the Board of Directors approved the settlement of the second Vesting Period (2015-2018) of the General Plan and Special Plan of the 2014. The settlement gave rise to the delivery for no consideration of a total of 158,699 shares amounting to EUR 2,010 thousand to the beneficiaries of the two plans. The shares were delivered net of the related tax withholding.

Lastly, on 24 September 2019 the Board of Directors extended to 1 October 2020 the Company's Extended Share Repurchase Programme (up to 681,013 shares, 0.51% of the share capital), to include them in the third tranches of the 2014 long-term incentive plan and the first and second tranches of the 2017 long-term incentive plan.

4.5 Related party transactions

The Company performs all its transactions with related parties on an arm's length basis. Also, the transfer prices are adequately supported and, therefore, the Company's Directors consider that there are no material risks in this connection that might give rise to significant liabilities in the future.

4.6 Environmental assets and liabilities

Environmental assets are deemed to be assets used on a lasting basis in the Company's operations whose main purpose is to minimize environmental impact and protect and improve the environment, including the reduction or elimination of future pollution.

Because of their nature, the Company's business activity does not have a significant environmental impact.

4.7 Current and Non-current classification

Current assets are assets associated with the normal operating cycle, which in general is considered to be one year; other assets which are expected to mature, be disposed of or be realized within twelve months from the end of the reporting period, held-for-trading financial assets, and cash and cash equivalents. Assets that do not meet these requirements are classified as non-current assets.

Similarly, current liabilities are liabilities associated with the normal operating cycle, held-for-trading financial liabilities and, in general, all obligations that will mature or be extinguished at short term. All other liabilities are classified as non-current liabilities.

4.8 Revenue

For accounting purposes, the Company classifies the dividends received as a result of its ownership interest in Compañía de Distribución Integral Logista, S.A.U. in revenue, since this ownership interest and the activities connected therewith constitute the Company's revenue-producing activity.

5. Financial assets

5.1 Non-current investments in Group companies

The detail of "Non-Current Investments in Group companies and associates" at 30 September 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Equity instruments	974,689	973,904
	974,689	973,904

In 2019 the Company recognised as an increase in its investment in Compañía de Distribución Integral Logista, S.A.U. the amount vested as a result of the 2014 and 2017 long-term incentive plans amounting to EUR 2,997 thousand and recognised as a decrease in the aforementioned investment the settlement of the Second Vesting Period (2015-2018) of the 2014 Incentive Plan amounting to EUR 2,210 thousand (2018: the increase in the investment amounted to EUR 2,838 thousand) (see Note 4.4).

The most significant information in relation to the Group Company at 30 September 2019 is as follows:

			Thousands of Euro
			Data on the Companies
		Direct %	Profit for the Year				Carrying
		of	Share	Operating		Reserves	Total	Amount
Company	Address	Ownership	Capital	Profit	Profit	and Others	Equity	Cost
Compañía de Distribución Integral Logista, S.A.U.	C/ Trigo, 39 Polígono Industrial Polvoranca. Leganés	100	26,550	61,880	335,922	128,085	490,557	974,689

On 23 July 2019, the Board of Directors of Compañía de Distribución Integral Logista, S.A.U. approved the distribution of dividend out of profit for 2019 amounting to EUR 65,048 thousand. In addition, the Annual General Meeting of Compañía de Distribución Integral Logista, S.A.U., held on 25 March 2019, approved the definitive distribution of the profit for 2018 and resolved to distribute a dividend in addition to the interim dividends paid in 2018 amounting to EUR 97,350 thousand.

5.2 Financial risk exposure

The management of the financial risks to which the Company is exposed in the course of its business activities constitutes one of the basic pillars of its activities aimed at preserving the value of its assets and its shareholder's investment.

The Company's activities are exposed to various financial risks: market risk (including exchange rate risk), credit risk, liquidity risk and cash flow interest rate risk.

The Company's financial risk management is centralised in Logista Group's Finance Division. This Division has established the mechanisms required to control based on the structure and financial position of the Company and on the economic variables of the business- exposure to interest rate and exchange rate fluctuations and credit and liquidity risk.

a. Credit risk:

The Company's main financial assets are cash and loans to Group companies. In general, the Group holds its cash and cash equivalents at banks with high credit ratings.

b. Liquidity risk:

The Company, for the purpose of ensuring liquidity and enabling it to meet all the payment obligations arising from its business activities, has the cash and cash equivalents disclosed in its balance sheet, together with the credit and financing facilities obtained through the cash assignment agreement entered into with Imperial Brands PLC Group. (see Note 9).

c. Market risk (including interest rate, foreign currency and other price risks):

In relation to its cash and cash equivalents the Company is exposed to interest rate fluctuations that could have an effect on its results and cash flows, although due to the Company's financial structure, management considers that this impact would not be material in any event.

The level of exposure of the equity and income statement to the effects of future changes in prevailing exchange rates is not significant.

The Company does not have any direct or indirect significant investments in foreign entities that operate in currencies other than the euro and does not perform significant transactions in countries with currencies other than the euro.

6. Equity

6.1 Share capital

At 30 September 2019 and 2018, the Company's share capital amounted to EUR 26,550 thousand and was represented by 132,750,000 fully subscribed and paid shares of EUR 0.2 per value each, all of which are of the same class.

As indicated in Note 1, the Parent was incorporated on 13 May 2014 with a share capital of EUR 60 thousand, divided into 300,000 shares of EUR 0.2 par value each, all of the same class, which were fully subscribed and paid in cash by the Parent's sole shareholder, Altadis, S.A.U.

On 4 June 2014, Altadis, S.A.U. approved a capital increase of EUR 26,490 thousand at the Parent, which was subscribed by means of a non-monetary contribution through the issue of 132,450,000 new shares of EUR 0.2 par value each, with a total share premium of EUR 942,148 thousand. The shares issued were of the same class as the outstanding shares, and they were fully subscribed and paid by Altadis, S.A.U. by means of the contribution to the Parent of the 44,250,000 registered shares representing the entire share capital of Compañía de Distribución Integral Logista, S.A.U. (which was, until that time, the Parent of the Logista Group). In this connection, it should be noted that the aforementioned non-monetary contribution was subject to the requisite appraisal by an independent expert appointed by the Mercantile Registry, in accordance with the Consolidated Spanish Limited Liability Companies Law and the Mercantile Registry Regulations.

The offering of shares in the Company came to an end on 14 July 2014, and its shares are currently listed for trading on the Madrid, Barcelona, Bilbao and Valencia Stock Exchanges.

The only shareholder with an ownership interest of 10% or more in the Company's share capital at 30 September 2019 and 2018 was Altadis, S.A.U., with an ownership interest of 50.01%.

At 30 September 2019, all shares of the Company have the same voting and dividend rights.

6.2 Share premium

The Spanish Capital Companies Law expressly permits the use of the share premium account balance to increase the capital of the entities at which it is recognised and does not establish any specific restrictions as to its use.

6.3 Legal reserve

Under the Spanish Capital Companies Law, 10% of net profit for each year must be transferred to the legal reserve until the balance of this reserve reaches at least 20% of the share capital. The legal reserve can be used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased share capital amount. Otherwise, until the legal reserve exceeds 20% of share capital, it can only be used to offset losses, provided that sufficient other reserves are not available for this purpose.

At 30 September 2019, the legal reserve has reached the legally stipulated minimum.

6.4 Interim dividends

On 23 July 2019, the Company's Board of Directors approved the distribution of an interim dividend out of 2019 profit amounting to EUR 48,938 thousand, which has already been paid (EUR 46,314 thousand in 2018) (See Note 3).

6.5 Other reserves

These reserves are unrestricted. The changes in 2019 relate to the distribution of profit for 2018 not distributed to the shareholders of EUR 10,164 thousand and the negative effect of the settlement of the Second Vesting Period (2015-2018) of the 2014 Incentive Plan amounting to EUR 1,113 thousand (see Note 4.4).

6.6 Treasury shares

The Company has 486,013 treasury shares amounting to EUR 9,893 thousand in order to cover the long-term incentive plan described in Note 4.4., representing 0.4% of share capital.

6.7 Other shareholder contribution

In 2019 the Company recognised to this line item a credit amounting to EUR 2,210 thousand (2018: EUR 2,838 thousand) and a charge of EUR 2,997 thousand relating to the long-term incentive plans (2018: EUR 2,987 thousand) (see Notes 4.4 and 5.1).

7. Tax matters

As indicated in Note 4.3, since 18 September 2017 the Company has been head of a consolidated tax group and responsible for its obligations; therefore, the amount receivable of EUR 12,622 thousand in 2018 (2018: EUR 78,403 thousand) arising from the consolidated tax group's tax return for 2018 is presented under "Other Accounts Receivable from Public Authorities" in the balance sheet as at 30 September 2019.

7.1 Current tax receivables and payables

The detail of the current tax receivables at 30 September 2019 and 2018 is as follows:

	Thousands of Euros
	2019	2018
Non-resident income tax withholdings Income Tax	4,087 73	3,795 68
	4,160	3,863

7.2 Reconciliation of the accounting profit to the taxable profit

The reconciliation of the accounting profit to the taxable profit for income tax purposes is as follows:

	Thousands of Euros
	2019	2018
Accounting profit before taxes	160,628	148,664
Permanent differences:
Dividends (Note 8.1)	(162,398)	(150,893)
Non-deductible Expenses	90	2
Adjusted taxable profit (fiscal result)	(1,680)	(2,227)

In 2019 and 2018 the Company applied the treatment provided for in Article 21.1 of the new Spanish Income Tax Law in relation to the dividends received from its subsidiary and, therefore, considered them to be exempt from inclusion in the income tax calculation.

7.3 Reconciliation of accounting profit to the income tax expense

Thousands of Euros 2019 2018 Accounting profit for the year before tax 160,628 148,664 Permanent differences (162,398) (150,893) Non-deductible Expenses 90 2 Adjusted taxable loss (1,680) (2,227) Tax charge (25% of taxable loss) (420) (557) Deductions (31) - Corporate tax adjustment (Note 7.5) (4,460) (9,100) Income tax profit (4,911) (9,657)

The reconciliation of the accounting profit to the income tax expense is as follows:

7.4 Breakdown of income tax profit

The reconciliation of the accounting profit to the income tax expense is as follows:

	Thousand of Euros
	2019	2018
Current tax Deferred tax (Note 7.5)	(451) (4,460)	(557) (9,100)
Income tax profit	(4,911)	(9,657)

7.5 Changes in deferred tax liabilities

The changes in deferred tax liabilities in 2019 and 2018 were as follows:

Fiscal year 2019

	Thousand of Euros
	2018	Reductions	2019
Deferred tax liabilities	(4,460)	4,460	-
	(4,460)	4,460	-

Fiscal year 2018

	Thousand of Euros
	2017	Reductions	2018
Deferred tax liabilities	(13,560)	9,100	(4,460)
	(13,560)	9,100	(4,460)

In the income tax settlement for 2015 the Company applied Article 30 of the Consolidated Spanish Income Tax Law and excluded from the tax base a portion of the dividends received in that year. It also recognised an item of deferred tax based on the ownership interest in Altadis, S.A.U. that was sold in the public offering in 2014 (see Note 1).

7.6 Tax credit carryforwards

At 30 September 2019, the Company has tax credit carryforwards amounting to EUR 1,870 thousand (2018: EUR 4,426 thousand).

7.7 Years open for review and tax audits

Under current legislation, taxes cannot be deemed to have been definitively settled until the tax returns filed have been reviewed by the tax authorities or until the four-year statute-of-limitations period has expired. The Company has the last four years open for review for all applicable taxes. The Company has open for review the last four years for all the other taxes applicable. Additionally, The Company has currently under review by the tax authorities years 2013, 2014, 2015 and 2016 for income taxes and years 2014, 2015 and 2016 for withholding taxes.

The Company's Directors consider that the tax returns for the aforementioned taxes have been filed correctly and, therefore, even in the event of discrepancies in the interpretation of current tax legislation in relation to the tax treatment afforded to certain transactions, such liabilities as might arise would not have a material effect on the accompanying financial statements.

8. Income and expenses

8.1 Revenue

In 2019 and 2018 the Company received the dividends described in Note 5.1 from Compañía de Distribución Integral Logista, S.A.U, amounting to EUR 162,398 thousand and EUR 150,893 thousand, respectively.

8.2 Staff costs

The balance of "Staff Costs" in the income statement for 2019 and 2018, amounting to EUR 1,010 and EUR 881 thousand, respectively, includes the expenses incurred directly by the Company in respect of remuneration of the Board of Directors. At 30 September 2019 and 2018, the Company did not have any employees.

Remuneration of Senior Executives

The functions of Senior Executives are discharged by the members of the Logista Group's Management Committee. The remuneration accrued in 2019 by the members of the Logista Group's Management Committee (excluding the executive directors), which is recognised in the financial statements of Compañía de Distribución Integral Logista, S.A.U., amounted to EUR 4,583 thousand (30 September 2018: EUR 5,463 thousands).

The period contributions to the savings schemes for members of the aforementioned Management Committee for 2019 and 2018 amounted to EUR 250 thousand and EUR 262 thousand, respectively.

8.3 Audit fees

In 2019 and 2018 the fees for financial audit services provided by the auditor of the Company's financial statements, or by companies related to the auditor as a result of a relationship of control, common ownership or common management, were as follows:

	Thousand of Euros
	2019		2018
	PwC	Deloitte	PwC	Deloitte
Total audit and related services
Audit services	11	11	11	11
Other attest services	53	27	30	27
Total audit and related professional services	64	38	41	38
Other services	-	-	-	-
Total professional services	64	38	41	38

From the date of year-end to the date of preparation of these consolidated annual accounts, fees charged for non-audit services provided by co-auditor PricewaterhouseCoopers Auditores, S.L. amounted to EUR 12.4 thousand and by the co-auditor Deloitte, S.L. amounted EUR 10.3 thousand.

The co-auditors did not bill any fees for non-audit services from the date of year-end to the date of preparation of 2018 consolidated annual accounts.

9. Balances and transactions with related parties

In 2019 and 2018 the Company received the dividends described in Note 5.1 from Compañía de Distribución Integral Logista, S.A.U.

As of 12 June 2014, Imperial Brands Enterprise Finance Limited, Compañía de Distribución Integral Logista Holdings, S.A., Compañía de Distribución Integral Logista, S.A.U. and Logista France, S.A.S., entered into a new mutual agreement for a five-year credit line (automatically renewable for one year, unless either of the parties sends a notice opposing such renewal at least one year prior to maturity), with a maximum draw down limit of EUR 2,000 million. As of 1 December 2015 the maximum draw down limit was increased to EUR 2,600 million. The purpose of this agreement is to govern the terms and conditions under which group companies will lend, on a daily basis, its cash surpluses to Imperial Brands Enterprise Finance Limited for the purpose of optimizing its cash flow, and the loans from Imperial Brands Enterprise Finance Limited to Compañía de Distribución Integral Logista, S.A.U. in order for the latter to be able to meet its cash needs arising from its operations.

On 21 March 2018, Imperial Brands Enterprise Finance Limited transferred the rights and obligations under the aforementioned credit line agreement to Imperial Brands Finance PLC., and the maturity was extended to 12 June 2024 (automatically renewable for additional one-year periods, unless notified otherwise by any of the parties at least one year before maturity).

The daily balance of this internal current account earns interest at the European Central Bank interest rate, plus a spread of 0.75%. Interest is calculated daily on a 360-day basis and is added to the nominal value of the debt quarterly. In 2019 and 2018 there is no outstanding amount for the Company.

Under the aforementioned agreement, the Company has committed not to incur in any financial indebtness with third parties not to pledge any of its assets but under qualified approval by the Board of Directors.

On 18 June 2014, Compañía de Distribución Integral Logista, S.A.U. and the Company entered into a credit line and cash pooling agreement, the amount and maturity of which were amended in addenda to the agreement. The drawable limit is EUR 115 million, and the maturity date is 30 September 2019. At the date of preparation of these financial statements, the parties had agreed to extend this agreement for an additional year. At 30 September 2019, the Company has a balance payable to Compañía de Distribución Integral Logista, S.A.U. of EUR 41,733 thousand (2018: EUR 711 thousand of surplus).

The average daily balance held under the aforementioned agreement has a cost equal to the European Central Bank rate plus a spread of 2.2% (with a 2.2% minimum) for credit drawdowns and earns interest at the same benchmark rate plus a spread of 0.75% for surplus cash loans. In 2019, the interest expense incurred as a result of the aforementioned agreement amounted to EUR 116 thousand (2018: EUR 614 thousand) and EUR 46 thousand of interest income.

Also, the Company is head of, and responsible for the obligations of, the consolidated income tax group. Consequently, the Company recognised an account payable to Compañía de Distribución Integral Logista, S.A.U. of EUR 12,405 thousand under "Debts with Group Companies and Associates" (2018: EUR 18,931 thousand) (see Note 7).

Remuneration of the Board of Directors

In 2019 and 2018 the remuneration accrued by the members of the Board of Directors in their capacity as directors or members of the Board's standing committees, recognized under "Staff Costs" in the income statements, together with the remuneration accrued by directors who are also executives through Compañía de Distribución Integral Logista, S.A.U amounted to EUR 4,477 thousand and EUR 5,092 thousand, respectively.

The contributions to savings schemes for 2019 and 2018 corresponding to executive directors amounted to EUR 359 thousand and EUR 237 thousand, respectively.

The life insurance premium for the Group Executive Directors for 2019 and 2018 amounted to EUR 15 thousand each year.

The Company a long-term incentive plans that concern the members of the Logista Group's Management Committee, the cost and characteristics of which are detailed in Note 4.4.

In 2019 the directors' third-party liability insurance amounted to EUR 45 thousand each year.

In 2019 and 2018 the Company did not perform with the directors any transactions outside the ordinary course of business or other than on an arm's length basis.

The Board's composition is nine male Directors and one female Director.

Information on conflicts of interests on the part of Directors

As per art.229 of the Law on Corporations, no Director has informed any situation of direct nor indirect conflict of interests with the Company.

Composition of the Logista Group

As indicated in Note 1, the Company is the parent of the Logista Group. The Group is organised as detailed in Appendix I.

10. Guarantee commitments to third parties and other contingent liabilities

The Company does not have guarantee commitments to third parties nor other contingent liabilities identified at 30 September 2019 and 2018.

11. Disclosures on the payment periods to suppliers. Additional Provision Three "Disclosure obligation" provided for in Law 15/2010, of 5 July

Set forth below are the disclosures -the detail of payments made to suppliers- required by Additional Provision Three of Law 15/2010, of 5 July (amended by Final Provision Two of Law 31/2014, of 3 December), prepared in accordance with the Spanish Accounting and Audit Institute (ICAC) Resolution of 29 January 2016 on the disclosures to be included in notes to financial statements in relation to the average period of payment to suppliers in commercial transactions.

As permitted by the Single Additional Provision of the aforementioned Resolution, since this is the first reporting period in which it is applicable, no comparative information is presented.

	Days
	2019	2018
Average period of payment to suppliers Ratio of transactions settled Ratio of transactions not yet settled	20 21 11	21 21 19

	Thousands of Euros
	2019	2018
Total payments made Total payments outstanding	643 48	680 29

In accordance with the ICAC Resolution, the average period of payment to suppliers was calculated by taking into account the commercial transactions relating to the supply of goods or services for which payment has accrued since the date of entry into force of Law 31/2014, of 3 December.

The figures shown in the foregoing table relate to suppliers of goods and services and, therefore, they include the figures relating to "Payable to Suppliers" and "Sundry Accounts Payable" under current liabilities in the balance sheet.

The maximum payment period applicable to the Company in 2019 under Law 11/2013, of 26 July, on combating late payment in commercial transactions, was 30 days unless the parties have entered into an agreement for a maximum period of 60 days.

12. Information on the environment

In matters concerning the environment, the Company complies strictly with all the requirements of applicable legislation and also looks for the best ways of reducing its environmental impact (waste reduction awareness campaigns and improvement of waste management; policies aimed at reducing atmospheric emissions and the use of water, electricity and paper; reduction of the use of containers and packaging by improving manufacturing processes, etc.). During the year ended at 30 September 2019 and 2018 the Company has not incurred in any expenses or performed any investment to protect and improve the environment.

13. Events after the reporting period

No significant events have occurred subsequent since the end of the year ended 30 September 2019.

14. Explanation added for translation to English

These financial statements are presented on the basis of the regulatory financial reporting framework applicable to the Company (see Note 2.1). Certain accounting practices applied by the Company that conform with that regulatory framework may not conform with other generally accepted accounting principles and rules.

Appendix I

Companies compromised within Logista Group

2019

Company	Auditor	Registered address
Compañía de Distribución Integral Logista, S.A.U. Compañía de Distribución Integral de Publicaciones Logista, S.L.U.	Deloitte Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés Avenida de Europa, 2 Edificio Alcor Plaza, Ala Este, Planta 4ª módulo 3, Alcorcón
Publicaciones y Libros, S.A.U.	Deloitte	Avenida de Europa, 2 Edificio Alcor Plaza, Ala Este, Planta 4ª módulo 3, Alcorcón
Distribuidora del Noroeste, S.L.	Deloitte	Gandarón, 34 Interior- Vigo
Distribución de Publicaciones Siglo XXI Guadalajara, S.L.	No Audit	C/ Francisco Medina y Mendoza 2. Cabanillas del Campo (Guadalajara)
Distribuidora de Publicaciones del Sur, S.L.	Deloitte	Polígono Industrial Zal, Carretera de la Esclusa s/n, Parcela 2, Módulo 4 (Sevilla)
Promotora Vascongada de Distribuciones, S.A.U.	No Audit	C/Guipúzcoa 5. Polígono Industrial Lezama Leguizamón, Echevarri (Vizcaya)
Distribuidora de las Rías, S.A.U.	No Audit	Polígono PO.CO.MA.CO, Parcela D-28. La Coruña
Distribuidora Valenciana de Ediciones, S.A.	Deloitte	Polígono Industrial Vara de Quart. c/ Pedrapiquera, 5. Valencia
Cyberpoint, S.L.U.	No Audit	Avenida de Europa, 2 Edificio Alcor Plaza, Ala Este, Planta 4ª módulo 3, Alcorcón
Distribuidora del Este, S.A.U.		C/ Félix Rodríguez de la Fuente, 11 Parque empresarial de
	Deloitte	Elche, Elche
S.A.U. Distribuidora de Ediciones	Deloitte	C/ B, Sector B Polígono Zona Franca. Barcelona
Logista Libros, S.L.	Deloitte	Avda. de la Veguilla, 12-A Cabanillas del Campo, Guadalajara
La Mancha 2000 S.A.U.	BDO	Avenida de la Veguilla, 12 Nave A Parcela S120, Cabanillas del Campo, Guadalajara
Midsid - Sociedade Portuguesa de Distribuiçao, S.A.	Deloitte	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)
Logista-Dis, S.A.U.	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Logesta Gestión de Transporte, S.A.U.	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Logesta Italia, s.r.l.	Collegio Sindacale	Via Valadier, 37. Roma (Italia)
Logesta Lusa Lda.	No Audit	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)
Logesta Polska Sp. z.o.o.	No audit	Al.Jerozolimskie, 96, Warszawa (Polonia)
Logesta Deutschland Gmbh	No Audit	Unsöldstrabe,2 , 20538, München (Alemania
Logesta France, S.A.R.L.	No audit	27 avenue des Murs du Parc, 94300 Vincennes
Dronas 2002, S.L.U.	Deloitte	Pol. Industrial Nordeste, c/ Energía 25-29. Sant Andreu de la Barca
Logista Pharma Gran Canaria, S.A.U.	Deloitte	Urbanización El Cebadal. C/ Entrerríos, 3. Las Palmas de Gran Canaria
Logista Pharma, S.A.U.	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Be to Be Pharma, S.L.U	No audit	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Logista Italia, S.p.A.	PwC	Vía Valadier, 37. Roma (Italia)
Terzia, S.p.A.	PwC	Vía Valadier, 37. Roma (Italia)
Logista Transportes, Transitários e Pharma, Lda.	Deloitte	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)
Compañía de Distribución Integral Logista Polska, Sp.z.o.o.	Deloitte	Al. Jerozolimskie, 96. Warszawa. Polonia
Logista France, S.A.S.	Deloitte y PwC	27 avenue des Murs du Parc, 94300 Vincennes
Supergroup S.A.S.	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes
Société Allumetière Française, S.A.S.	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes
Logista France Holding, S.A.S	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes
Logista Promotion et transport, S.A.S	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes

2018

Company	Auditor	Registered address
Compañía de Distribución Integral Logista, S.A.U.	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Compañía de Distribución Integral de Publicaciones Logista, S.L.U.	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Distribérica, S.A.U.	No Audit	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Publicaciones y Libros, S.A.	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Distribuidora del Noroeste, S.L.	Deloitte	Gandarón, 34 Interior- Vigo
Distribución de Publicaciones Siglo XXI Guadalajara, S.L.	No Audit	C/ Francisco Medina y Mendoza 2. Cabanillas del Campo (Guadalajara)
Distribuidora de Publicaciones del Sur, S.L.	Deloitte	Polígono Industrial Zal, Carretera de la Esclusa s/n, Parcela 2, Módulo 4 (Sevilla)
Promotora Vascongada de Distribuciones, S.A.	No Audit	C/Guipúzcoa 5. Polígono Industrial Lezama Leguizamón, Echevarri (Vizcaya)
Distribuidora de las Rías, S.A.	No Audit	Polígono PO.CO.MA.CO, Parcela D-28. La Coruña
Distribuidora Valenciana de Ediciones, S.A.	Deloitte	Polígono Industrial Vara de Quart. c/ Pedrapiquera, 5. Valencia
Cyberpoint, S.L.U.	No Audit	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Distribuidora del Este, S.A.U.	Deloitte	Calle Saturno, 11. Alicante
S.A.U. Distribuidora de Ediciones	Deloitte	C/ B, Sector B Polígono Zona Franca. Barcelona
Logista Libros, S.L.	Deloitte	Avda. de la Veguilla, 12-A Cabanillas del Campo, Guadalajara
La Mancha 2000, S.A.U.	BDO	Avenida de la Veguilla, 12 Nave A Parcela S120, Cabanillas del Campo, Guadalajara
Midsid - Sociedade Portuguesa de Distribuiçao, S.A.	Deloitte	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)
José Costa & Rodrigues L.D.A	PwC	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)
Logista-Dis, S.A.U.	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Logesta Gestión de Transporte, S.A.U.	Deloitte	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Logesta Italia, s.r.l.	Collegio Sindacale	Via Valadier, 37. Roma (Italia)
Logesta Lusa Lda.	No Audit	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)
Logesta Polska Sp. z.o.o.	No audit	Al.Jerozolimskie, 96, Warszawa (Polonia)
Logesta Deutschland Gmbh	No Audit	Unsöldstrabe,2 , 20538, München (Alemania
Logesta France, S.A.R.L.	No audit	27 avenue des Murs du Parc, 94300 Vincennes
Dronas 2002, S.L.U.	Deloitte	Pol. Industrial Nordeste, c/ Energía 25-29. Sant Andreu de la Barca
Logista Pharma Gran Canaria, S.A.U.	Deloitte	Urbanización El Cebadal. C/ Entrerríos, 3. Las Palmas de Gran Canaria
Logista Pharma, S.A.U.	Deloitte	Polígono Industrial Nordeste. C/ Industria, 53-65. San Andreu de la Barca
Be to Be Pharma, S.L.U	No Audit	C/ Trigo, 39. Polígono Industrial Polvoranca. Leganés
Logista Italia, S.p.A.	PwC	Vía Valadier, 37. Roma (Italia)
Terzia, S.p.A.	PwC	Vía Valadier, 37. Roma (Italia)
Logista Transportes, Transitários e Pharma, Lda.	Deloitte	Expansao del area ind. Do Pasill, Lote 1-A, Palhava. Alcochete (Portugal)
Compañía de Distribución Integral Logista Polska, Sp.z.o.o.	Deloitte	Al. Jerozolimskie, 96. Warszawa. Polonia
Logista France, S.A.S.	Deloitte y PwC	27 avenue des Murs du Parc, 94300 Vincennes
Supergroup S.A.S.	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes
Société Allumetière Française, S.A.S.	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes
Logista France Holding, S.A.S	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes
Logista Promotion et transport, S.A.S	Deloitte	27 avenue des Murs du Parc, 94300 Vincennes

Directors Report for financial year ended 30th September 2019

1. EVOLUTION AND POSITION OF THE COMPANY IN 2019

Due to its Holding Company condition, the Company has not operations and carries out its activity through its operating company, Compañía de Distribución Integral Logista, S.A.U. and rest of the Group's companies.

Logista is the leading distributor of products and services to proximity retailers in Southern Europe, serving around 300,000 points of sale within capillary retail networks in Spain, France, Italy and Portugal, providing the best and fastest access to the market of tobacco and convenience products, electronic topups, pharmaceuticals, books, publications and lotteries. Logista, also, distributes tobacco products to wholesalers in Poland.

The Logista's share price was 17.9 euros at closing of fiscal year 2019 (September 30, 2019). So, the Logista's market capitalization amounted 2,373.6 million euros at closing of fiscal year 2019.

During the fiscal year 2019, revenues were 162,398 thousand euros. The Company's revenues come from the distribution of dividends paid by Group's companies.

The Company paid a FY2018 final dividend amounted 101.8 million euros on March 29, 2019 and paid a 2019 interim dividend for 48.9 million euros on August 29, 2019. Also, the Company acquired 159,300 own shares during the fiscal year 2019, in the following dates:

Date	Price	Number of shares
13/12/2018	21.64	5,310
14/12/2018	21.49	5,310
17/12/2018	21.94	5,310
18/12/2018	22.15	5,310
19/12/2018	22.45	5,310
20/12/2018	22.03	3,186
21/12/2018	21.94	6,372
21/12/2018	21.86	1,062
24/12/2018	22.12	5,310
27/12/2018	21.61	5,310
28/12/2018	21.75	5,310
31/12/2018	22.11	5,310
02/01/2019	21.74	5,310

03/01/2019	21.77	5,310
04/01/2019	22.18	5,310
07/01/2019	22.24	5,310
08/01/2019	22.62	5,310
09/01/2019	22.79	5,310
10/01/2019	22.57	5,310
11/01/2019	22.63	4,248
14/01/2019	22.51	6,372
15/01/2019	22.52	5,310
16/01/2019	22.40	5,310
17/01/2019	22.48	5,310
18/01/2019	22.53	5,310
21/01/2019	22.61	5,310
22/01/2019	22.70	5,310
23/01/2019	22.67	5,310
24/01/2019	22.86	5,310
25/01/2019	22.77	5,310
28/01/2019	22.76	5,310

1.1 Research and Development activities

The Company did not make any investments in research and development activities in the fiscal year 2019.

1.2 Treasury shares

At 30 September 2019, the Company holds 486,013 own shares.

1.3 Outlook for the Company

As the Company is a holding company, the Company's outlook is linked to the performance of the companies that form the Logista Group.

2. RISK EXPOSURE

The Corporate Risk Management System of the Company is set forth in the Risks Management General Policy of September 29th 2015, with the purpose of providing to the Business Managers/Corporate Directorates, a holistic view, improving the Management capacity to manage risks in an efficient way and minimizing the impact in case the risks materialize.

In this Policy, different risk categories or factors are defined, in which, as part of the financial risks category, tax risks related to the current Company's activity are included.

Likewise, Fiscal strategy described at Fiscal Policy of Logista Group, of which the Company is the head, states, as part of its key objectives the following:

• To minimize the fiscal risks associated with the operations and strategic decisions of each company, ensuring that the tax payable is appropriate and in proportion to the operations of the Businesses, the material and human resources, and the business risks of the Group.
• To define the fiscal risks and determine the Objectives and Activities of internal Control, and to set up systems for reporting fiscal compliance and for keeping documentary records, integrated with the Group's General Framework of Internal Control.

On the other hand, the Group's Internal Control General Policy of April 25th, 2017, establishes a general action framework for controlling and management of internal and external risks of any nature, which may affect the Company, in accordance with the risk map in place at all times in the achievement of its objectives (Corporate Governance risks, market risks, financial risks, regulatory risks, business risks, operational risks, penal risks and reputational risks, among others).

The Company, considering its nature as entity of public interest due to its shares are trading in the Stock Market, and being the holding company of the Logista Group, presents as main risk the risk derived from a possible incompliance of the regulatory framework to which it is subject. However, the Company presents a low tolerance respect this risk and has established policies, procedures and controls that allow to identify, prevent and mitigate this risk, as well as to comply with the obligations imposed by the various legislations applicable to it.

On the other hand, from a financial perspective, the main financial risks that the Company faces can be summarized in:

The Company's main financial assets are cash and cash equivalents and credits to Group's companies that represent the Company's maximum exposure to credit risk. In general, the Company deposits its cash and cash equivalents in entities holding a high credit rating. Likewise, the Company presents an exposure to credit or counterparty risk with Imperial Brands by virtue of the subscribed treasury agreements.

The Company estimates that at 30 September 2019 the level of exposure to credit risk of its financial assets is not significant.

To ensure the liquidity and be able to pay all its payments commitments derived from its usual activities, the Company maintains enough cash and cash equivalents, as well as, credit lines through the subscribed treasury agreements, ultimately, with Imperial Tobacco Enterprise Finance Limited, entity belonging to the Imperial Brands PLC Group.

Respect the exposure to interest rate risk, considering the no-financial debt of the Company, the Management considers the impact from a potential increase in interest rates which could have in the attached annual accounts is not significant.

Also, the level of exposure to the net equity and the P&L account in terms of future changes in the current exchange rates is not relevant.

From a fiscal point of view, the main risk that the Company faces is derived from the possibility of modifications in the tax regulations, than might impact directly in the results and cash management of the Company.

Associated risks and expected impacts on the business's strategy and activities due to the decision of UK to leave the European Union

The Company belongs to the Imperial Brands Group that has its registered office in the United Kingdom. In this sense, the Company has valuated the risk, as well as the possible impact that it might occur as the consequence of the exit of the United Kingdom from the European Union. As the Company has not significant investments, directly or indirectly, in foreign companies that operate in currency other than the euro, and does not carry out significant operations in countries with currency other than the euro, the possible effects from a cooling British economy, and/or from a possible currency volatility, might not have a highly impact in the development of the Logista Group's activities.

On the other hand, the contribution of the share capital by the shareholder Imperial Brands, as well as the credit line that maintains with the majority shareholders is in euro currency. In that sense, the Company does not have any type of financing by its shareholder in euros or in sterling. Therefore, it is not impacted from interest rate variations.

Uncertainty on the European directives on taxation remains, pending of the impact assessment, as well as the application of EU freedoms that will ultimately depend on the exit model of the United Kingdom of the EU.

3. USE OF FINANCIAL INSTRUMENTS

The Company does not perform transactions with financial instruments that might affect the correct measurement of the assets or liabilities recognised in the balance sheet.

4. SIGNIFICANT EVENTS FOR THE COMPANY AFTER THE REPORTING PERIOD

No events significantly affecting the accompanying financial statements took place after the end of the fiscal year 2019.

5. ANNUAL REPORT ON CORPORATE GOVERNANCE

It is included as a separated section of the Directors Report.

Certificate on the issuance of the financial statements

Financial Statements and Directors Report for the year ended 30 September 2019 (1 October 2018 to 30 September 2019), have been formally prepared by the Board of Directors, Compañía de Distribución Integral Logista Holdings, S,A, at its meeting on 29 October 2019 in order to be audited and approved by the Shareholders.

Corporate Governance Annual Report for the year ended 30 September 2019, which is part of Directors Report, is included below as a Directors Report separate section.

Financial Statements and Directors Report are set forth on 26 sheets, on the obverse only, all of which are signed by the Chairman and Secretary of the Board of Directors, who in witness whereof, have signed below:

D. Gregorio Marañón y Bertrán de Lis Chairman

D. Luis Egido Gálvez Chief Executive

Mr. Alain Minc Director

Dª. Cristina Garmendia Mendizábal Director

D. Jaime Carvajal Hoyos Director

Mr. John Matthew Downing Director

Mr. Richard Guy Hathaway Director

Mr. Amal Pramanik Director

Mr. Richard Charles Hill Director

D. Rafael de Juan López Director and Secretary of the Board

Leganés, 29 October 2019