Procurement Policy

Owner/approver: Head of Procurement 

Valid from: 2021-04-29

Purpose

Lerøy Seafood Group, Lerøy, and its daughter companies must always act in accordance with good business ethics and ensure high ethical standards regarding procurement. The purpose of this policy Is to outline the overarching procurement principles and standards used to set direction within the Group.

Procurement shall, as far as possible, be based on competition and any deviation from this requirement must be justified. This policy shall adhere to the Group's overall Code of Conduct.

This policy shall ensure that procurement processes are managed in a uniform way and this policy applies to all Lerøy`s companies globally.

Scope

The procurement policy applies to all Lerøy Seafood Group personnel and subsidiaries (hereinafter named Companies) Including but not limited to companies or contractors representing the Group which are Involved In procurement activities. Adhering to this policy is mandatory.

Definitions                                                                                                

Best Total Offer: The tender that provides the overall best value for the Group based on predetermined evaluation criteria

Group Procurement Policy: this document as amended from time to time

Head of Procurement: Group's designated Head of Procurement

Procurement: The process of selecting a supplier to provide; service and / or goods based on market competition

Tender: a received offer as part of a tendering process

Tenderers: Meaning the participants in a tendering process

Tender process: Meaning a procurement process

Main Principles and frameworks

Procurement shall as a main principle be based on competition and minimum 3 suppliers shall be Included In procurement processes when possible. Procurement shall be based on the Global Procurement Procedure.

All procurement processes shall be based on fair competition and shall be in accordance with Lerøy Seafood Group's overall vision relating to openness, honesty, responsibility and creativity. Independence and impartiality shall always be practised, meaning that persons with close relations / ties to one of the tenderers cannot take part in the procurement process, final evaluation, or selection for awarding a contract.

Strategic procurement processes shall be based on multidisciplinary tendering teams and the Best Total Offer will be basis for contract award, the evaluation result being a combination of the commercial and technical evaluation results.

Procurement processes shall be based on the Group's Procurement Process that Is available from the Group's quality management system.

The selection of qualified tenderers and evaluation shall be based on objective and non-discriminatory criteria. The following evaluation criteria may be used, but not limited to:

• Sustainability
• Quality
• Competence and experience
• Technical specifications
• Functional requirements
• Commercial elements

The above criteria are not listed in order of priority.

When awarding a contract, a written contract shall always be concluded between the Company and the chosen supplier. As a general principle the contract shall be based on Lerøy Seafood Group's Standard Terms for procurement when possible.

Only personnel Identified in approved authorisation matrixes can sign contracts.

Sustainability

Sustainability Is one of the main pillars of Lerøy Seafood Group and during procurement processes sustainability shall always be Included as part of the evaluation process. Therefore, Lerøy Seafood Group seek suppliers whom can generate the greatest value creation with the least environmental Impact.

Contract administration and Continuous Improvement

Contract administration Is an Integral part of the Global Procurement Process In Lerøy Seafood Group and shall focus on continuous Improvement to add value for both the Companies and the suppliers. To achieve continuous Improvement  efficient and open communication must be established with Identified suppliers and Key Performance Indicators may be Implemented to established common goals.

Monitoring of compliance

The Companies’ management team shall monitor and assure that the Company's respective procurement personnel adhere to the Group's Procurement Policy. If deviations are Identified this shall be reported to the Company`s General Manager and Head of Procurement in LSG.

The Group's quality department may, in cooperation with Group procurement, perform ad-hoc auditing of the Companies compliance with the Global Procurement Policy. If non-conformances are Identified, mitigating actions shall be Implemented and the non-conformances shall be handled as soon as possible.

Demand to our suppliers

All Lerøy Seafood Group's suppliers shall accept to participate In the Group's supplier monitoring system and answer the requested questions honestly and within the requested timeframe. This Is part of the Group's overall responsibility to assure Its supervisory responsibility "påseplikten" related to Its value chain. If such requests are not followed, the local procurement team shall take necessary actions to close any outstanding non-conformances.

The extent of monitoring performed Is based on the assessment of risk related to the category the supplier Is part of.

Roles and Responsibilities

• Employees that participate In procurement processes are responsible for following Policy.
• Local management shall assure that the Policy Is Implemented locally and that It Is being adhered to. If requested, Head of Procurement shall participate In the Implementation.
• The Group's procurement organisation shall provide necessary Instructions and training to ensure that the Companies are familiar with the Global Procurement Policy, the Global Procurement process and the Global Procurement Procedure.

Ownership and implementation

• Head of Procurement is owner of the Procurement policy In the Group and is responsible for updating the document.
• The policy has been approved by the Corporate Management Group, presented to the Audit Committee and approved by  the Board of Directors
• The CEO in Lerøy Seafood Group has the overall responsibility for the policy.
• The Group Procurement Policy shall be available through the Group's quality management system.
• Group Procurement training modules will be available In English through the Group's e-learning platform.