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Investor Presentaiton

REGARDING CHALLENGES CONCERNING OUR SUPPLIERS We have worked on: 1. Maintaining constant and open dialogue with our suppliers, through different channels: a. The Supplier Advisory Board. Created in 2006, it consists of 14 countries in Mexico and Central America, and it is an opportunity to exchange ideas and foster best practices that increase the competitiveness of our companies. b. The Supplier Survey. This is an annual evaluation mechanism with representation from large, small and medium-sized companies. It evaluates the Walmart way of operating regarding its relations with suppliers, and allows for identification of key points when increasing efficiencies. The representation of SMEs this year was 27%. c. Supplier and Ethical hotlines. Run by independent merchandising areas, suppliers can communicate problems they are facing, make specific suggestions, or file complaints regarding non-compliance with the company's ethical standards. d. Dialogue with suppliers of perishable products. Sessions are held with 450 small, medium and large-sized suppliers to identify areas of opportunity and new ways of working. 2. Strengthening the structure of Merchandising. Centralized Negotiations for GM, groceries, consumables, and Apparel in Self-service, regional buyers, and buyers for perishable categories at the national level. This allows them to develop a more strategic vision, develop products and improve the capacity to respond to customer needs. The Merchant Academy strengthens their training and development. 3. Ensuring quality standards and compliance regarding the products we sell. This is done through a quality and compliance verification process that ensures food safety, the origin of raw materials, and compliance with applicable legislation. We verify that 100% of our private label suppliers have currently audits, in addition to the suppliers of raw materials for processing in our stores and production centers are audited regarding the following: Good Manufacturing Practices Quality Systems Process Control Training Pest Control Facilities Hazard Analysis and Control over Critical Points Said verification processes are based on the following criteria: Perishables. Statistically representative product-quality inspections were performed on deliveries of perishables in Distribution Centers, as per product features concerning weight, temperature, and overall specifications. The inspection sample is taken statistically and action plans are established with suppliers. In addition, in Mexico we purchase 100% top quality, TIF-certified meat. Food Products. In Mexico, 79% of private label suppliers and in Central America, 7% of suppliers who outsource finished product in the Agroindustrial Development plants are certified through the global Food Safety Initiative, which is fostered by the business sector to achieve ongoing improvement of food security management systems, increased consumer confidence, and a guarantee of the availability of safe food products. Walmart requests that its private label suppliers obtain certification from any of the systems recognized by this initiative (SQF, BRC, FSSC 22000, Global GAP, IFS, among others), once they have passed a Good Manufacturing Practices audit and prove the implementation of HACCP (Hazard Analysis and Critical Control Points). The number of certified suppliers varies each year in terms of the needs of the business and the company's commercial requirements. 2013 Financial and Social Responsibility Report 43 13
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