As of December 31, 2017, Viña Concha y Toro’s Directors Committee was composed of the following directors: Jorge Desormeaux Jiménez (Chairman), Rafael Guilisasti Gana and Rafael Marín Jordán. All committee members were elected at the extraordinary board meeting held on April 27, 2017. In accordance with the provisions of Article No. 50 bis of Law No. 18,046, as amended by Law No. 20,382, of October 20, 2009, and Circular No. 560 of the former SVS, now the CMF, of December 22, 2009, Mr. Jorge Desormeaux Jiménez signed the sworn statement as independent director. At the same meeting, on April 27, 2017, in order to comply with the aforementioned legal provisions, Mr. Jorge Desormeaux Jiménez, independent director, agreed to appoint the directors Mr. Rafael Guilisasti Gana and Mr. Rafael Marín Jordán as the second and third members of the Directors Committee respectively.
The Directors Committee met 14 times in 2017 to discuss all matters required by Article No. 50 bis of the Corporations Law. In particular, it reviewed the transactions governed by Article No. 146 and subsequent of Law No. 18,046, ensuring that they contributed to the company’s interests, and were in line with market conditions with regard to price, terms and conditions at the moment in which they were approved. The details of transactions approved by the Committee can be found in Note No. 9 of the company’s Consolidated Financial Statements.
Directors Committee Annual Management Report
The main activities carried out by the Directors Committee during 2017 include the following:
Review of the external auditors’ annual and quarterly reports, the balance sheet and other financial statements presented by the company’s management.
Evaluation and proposal of external auditors and ratings agencies to the Board of Directors, which were recommended at the respective Annual General Meeting.
The Committee reviewed and approved the information regarding transactions referred to by Section XVI of Law No. 18,046. The details of these transactions is contained in the notes of the Consolidated Financial Statements included in this report, especially those related to the purchase and sale of grapes and wine.
Review of remuneration systems and compensation plans for the company’s senior executives.
Review and approval of the company’s 20-F Report.
Study of the internal audit reports and compliance with the annual audit plan prepared by the company’s Chief Audit Executive.
Remuneration of the Directors Committee
Remuneration for each member of the Directors Committee equivalent to one third of remuneration for Directors was approved at the Annual General Meeting. An annual operating budget for this Committee of Ch$60 million was approved at the Annual General Meeting. During 2017, the Committee hired external consultancy services related to the assessment of transactions with related parties, evaluation of the purchase of grapes and wines from third parties, and internal control, with an annual expenditure of UF 350.
In compliance with the US Sarbanes-Oxley Act (2002), in its meeting held on April 27, 2017, the Board of Directors appointed from among its members those that would form part of the Audit Committee required by said legislation, electing the same directors that make up the Directors Committee required by Chilean law. In accordance with the aforementioned legislation, the director Mr. Rafael Guilisasti Gana sits on the Audit Committee with right to speak but not to vote. In view of the foregoing, he abstained from voting in each of the resolutions submitted to the Committee.
The company’s management is aware that its operation is a dynamic and high-impact process. As such, every year Viña Concha y Toro’s corporate governance is reviewed, and improvements are introduced which aim to ensure proper compliance management, in accordance with legal requirements and ensuring the pursuit of excellence and transparency throughout the operation. The company aims for all of its employees to work collaboratively and understand the importance of good corporate practices, thus establishing a culture of compliance.
Within the framework of its agricultural, production and commercial activities, Viña Concha y Toro is subject to compliance with a broad range of legal and administrative regulations in Chile, in particular those related to the production, elaboration and marketing of alcoholic beverages. With regard to its exports, it must comply with foreign and international health regulations. To adjust its processes to these regulations, the company has the support of its customers, and adheres to international controls and certifications.
Code of Ethics and Conduct
On May 31, 2012, the Board of Directors approved a new text for the Code of Ethics and Conduct of Viña Concha y Toro S.A. and its subsidiaries. This Code summarizes the ethical and conduct principles and values that must govern the actions of directors, executives and employees of Viña Concha y Toro and its subsidiaries, without exception. For the company, it is essential that directors, executives and employees comply with the existing rules and regulations of the jurisdiction in which they operate in all stages of production, distribution and sale of products.
Additionally, Viña Concha y Toro requires its directors, executives and employees to be aware of and fully commit to the company’s ethical values in the pursuit of excellence and transparency.
The Code of Ethics and Conduct is available on the company’s website. In order for the Code of Ethics to be internalized by members of the company, during 2017, talks and training were provided to approximately 600 directors, executives and employees of Viña Concha y Toro and its subsidiaries primarily via e-learning modality.
On May 31, 2012, the Board of Directors approved the creation of an Ethics Committee whose main mission is to promote and regulate excellence in the personal and professional conduct of Viña Concha y Toro’s employees, consistent with the company’s principles and values. In fulfilling this mission, the special responsibilities of the Ethics Committee include the following:
Being aware of and resolving queries regarding the scope and applicability of the Code of Ethics and Conduct.
Being aware of anonymous complaints received by the company through the channel designed for this purpose.
Reporting such complaints to the Directors Committee.
Analyzing those complaints that fall within the scope of the Crime Prevention
Model or are associated with the crimes outlined in Law No. 20,393.
Coordinating the investigations derived from such complaints; supporting the Crime Prevention Officer in the various control activities they carry out; and requesting reports from the Crime Prevention Officer when circumstances require.
Through its website, Viña Concha y Toro has implemented a simple and efficient anonymous reporting system. Complaints can also be received via email, according to the Anonymous Complaints Procedure introduced in 2015. In this way, employees, customers, suppliers, shareholders and third parties can make confidential complaints on issues relating to accounting, fraud, safeguarding of assets, audit or any other matters related to the company’s internal control.
The Ethics Committee is responsible for the resolution of anonymous complaints, and must keep a record of them.
Crime Prevention Model
In order to prevent illegal activities such as money laundering, terrorism financing or bribery, on May 31, 2012, the company’s Board of Directors approved the Crime Prevention Model, consisting of a preventive and monitoring process through various control actions over processes or activities that are exposed to the commission of offenses under this law (money laundering, bribery of a domestic or foreign public official, and terrorism financing).
Manual for handing Information of Interest to the Market
Through self-regulation, the Manual seeks to establish rules for the handling of information that, without being material information, might be useful for proper financial analysis of Viña Concha y Toro and its subsidiaries, or the securities issued by them. This is understood to be all information of legal, economic or financial nature referring to relevant aspects of the progress of
the corporate businesses or that might have a significant impact on them. The Board of Directors also agreed that the Manual should contain criteria for guiding the conduct of those it is addressed to when handling information and using it in relation to possible securities transactions, establishing their freedom to trade securities, except for blocked periods during which such trading is forbidden. This Manual is available on the company’s website.