While all Performance Standards (PS) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards: - PS1: Social and Environmental Assessment and Management Systems - PS2: Labor and Working Conditions - PS3: Pollution Prevention and Abatement - PS4: Community Health, Safety and Security The land where the company will develop the new production facilities has been already acquired on a willing buyer / willing-seller basis. Therefore, there are not expected impacts related to PS 5 “Land Acquisition and Involuntary Resettlement”. Sites where the production facilities are/will be located are in urban zones and authorized industrial areas, therefore issues related with PS6: “Biodiversity Conservation and Sustainable Natural Resource Management,” PS7: “Indigenous Peoples,” or PS8 “Cultural Heritage,” are not expected to be encountered.

This is a category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria as is described in the following sections. Key environmental and social issues have been identified as: Alpha’s management of social, environmental, and health and safety matters during production and assembly of the houses, including the management of contractors; Efficient use of energy, water and resources; Air emission controls; Waste reduction and disposal; Labor and working conditions for employees and contractors; and Occupational health and safety conditions including construction safety during the assembly process on the housing developments.

Alpha have presented information on current and planned practices and policies aimed to comply with Mexican environmental and social requirements as well as IFC’s Environmental and Social Performance Standards and applicable requirements of WBG Environmental, Health and Safety (EHS) guidelines. The following paragraphs describe how the potential impacts are or will be addressed by Alpha. Additional actions are summarized in the attached Environmental and Social Action Plan (ESAP). Social and Environmental Assessment and Management System -Social and Environmental Assessment: The social and environmental assessments of the impacts of the production facilities in Tijuana, Jalisco and Monterrey have been analyzed by means of a full Environmental Impact Assessment (EIA) as required by Mexican law. The assessments have been submitted to the local authorities to obtain the respective licenses which have been granted. Alpha will provide to IFC the EIAs and the authorization licenses for the new production facilities to be built. Mitigation measures are defined in the EIA for both the construction and operation stage of the production facilities. Alpha has implemented the recommended mitigation measures during the construction of the existing production facilities in Tijuana and Zumpango; and will ensure proper compliance with the monitoring requirements described in the EIAs and licenses such as assessment of noise levels, compliance with air standards and proper disposal of waste. The production facilities in Tijuana and Zumpango are located in the proximity of waste landfills. Those landfills are authorized by local governments and Alpha acknowledged their presence when the sites were selected. The EIAs have considered the presence and management of the landfills and have determined no significant direct impact on the operation of the production facilities, other than eventual smells and presence of waste displaced by wind from uncovered waste. The company will ensure that during the implementation of the ESMS, potential health risks to the employees such as rodents and odors are considered in order to incorporate mitigation measures. Water used to produce the concrete is sourced by the municipality using water trucks and then stored in tanks at the production facility, limiting the risk of pollution from leachates. -Environmental and Social Management program: Alpha is planning to implement quality management systems under ISO 9001 in the production facility in Tijuana. The company currently does not have a formal integrated Environmental and Social Management system (ESMS), however being part of Geo, some corporate policies and procedures are in place. Elements such as the human resources management, management of contractors’ labor and safety performance, land acquisition procedures, and OHS at the construction sites are well documented under the Geo structure. Alpha will manage and address specific environmental and social elements of its factories, in particular air emissions, waste management and OHS aspects of the operations through an Integrated Management System (ESMS). This ESMS will also consider house assembly operations. The ESMS will include but not limited to: (i) definition of responsibilities for E&S issues; (ii) identification of environmental impacts and occupational risks (e.g. air emissions, solid waste management, occupational exposure to noise at work, and use of PPE, etc); (iii) implementation of management programs, procedures, and training programs; and (iv) monitoring and reporting. The ESMS will cover all Alpha production facilities and assembly operations. -Training: Alpha has a training program for the employees; topics covered are human resources policies, fire fighting procedures and health preventive programs. Alpha will ensure that topics such as safety at work, environmental protection and emergency procedures are covered. Labor and working conditions -Human Resource Policy and Management: Alpha follows Geo’s Human Resources (HR) policies and its Ethics Code, currently in its third edition dated June 2010. The ethics code covers labor relationship, training and development, grievance mechanisms, non-discrimination practices, and occupational health and safety elements. Copies are handed to all new employees and the ethics code is updated periodically. The company complies with Mexican and IFC requirements with regard to fair and adequate working conditions in the operation of the Alpha production facilities. -Terms of Employment and Non-Employee Workers: Alpha currently have 583 employees and is expected to create at least 550 additional new jobs in the coming two years; retrenchment is not expected from this project. Terms of employment are defined in the internal employment rules and regulations (reglamento interno de trabajo) and in the individual work contracts where wages, benefits, hours of work and overtime compensation, among others are defined. In addition to direct employees, Alpha contracts the assembly of the houses to third parties. Contractors are required to comply with Mexican law regarding labor conditions such as payment of salaries, workers compensation and social security payments; and to follow safety procedures as described in the project’s safety plan (reglamento de obra, seguridad e higiene). Alpha will ensure that assembly contracts require contractors to manage environmental and occupational health and safety issues in a professional manner compliant with Mexican law and PS requirements. -Workers Organizations: Alpha employees do not belong to workers organizations or unions, and there has not been such request among the employees. The management team of Alpha confirmed that they would not prevent employees to organize or participate in workers organizations. -Protection of the workforce: Neither Alpha nor its contractors uses child or forced labor, not is there any suggestion of such practices in Alpha's supply chain. The minimum age of employment in Alpha is 18. -Grievance Mechanism: Alpha has a comprehensive and functional grievance mechanism where communication channels are defined and include: mail, phone and verbal communication. Grievances are assessed, classified and resolved. The company maintains a database with the information regarding grievances (both internal and external). The grievance mechanism is communicated to all employees and is an integral part of the ethics code. -Occupational Health and Safety (OHS): Alpha’s operations initiated recently, therefore there is not an established safety record of the operations. Initial incident data indicates a strong need for training on material handling and use of protective equipment. The company is in the process of implementing safety procedures, including training programs, medical examinations and the project’s safety plan (reglamento de obra, seguridad e higiene) for the assembly of the houses. Employees are trained and certified to operate cranes and forklifts. During the site visits to the production facilities, IFC identified certain areas where OHS improvement is required, including compliance with the correct use of Personal Protective Equipment (PPE), and ergonomic postures. Alpha will undertake occupational health and safety (OHS) risk assessment at all production facilities including assembly of the houses, and should follow up with corrective action as shown necessary. The OHS risk assessment will be developed by a professional consultant, acceptable to IFC. The corrective actions are likely to require the implementation of programs and monitoring plans regarding (i) use of PPE, (ii) materials handling, (iii) ergonomics, and (iv) management of contractors. Alpha´s procedures will be improved as part of the implementation of an integrated management systems as described under PS1 above and will cover contractors. Pollution Prevention and Abatement -Pollution Prevention and Energy Efficiency: Environmental impacts of the Alpha activities during the operational phase are limited to (i) electricity use for the operation of the production facility including cranes, vibrating tables, pouring equipment, and welding processes (for some production facilities); (ii) air emissions from standby generators and curing chambers (for some production facilities), and particulate matter from the concrete batch production facilities and storage of the aggregates; and (iii) solid waste generation. The production facilities have been designed to take advantage of natural lighting and provide good natural and forced ventilation. The production facilities are/will be modern facilities with automated processes and designed following energy and resource efficiency principles. For example, the curing chambers are operated with natural gas and are insulated, have advance controls for air flow and temperature, and have a recirculation of warm air (uniform temperature of 55C). The concrete batch plant has dust filters as and pressure controls during loading to control dust emissions to the ambient air. Water is used to produce the concrete and there are no residuals other than some wastewater from cleaning the equipment, which is filtered and reused on site for the production of the concrete. Alpha will develop procedures and monitoring plans for the significant environmental impacts as part of the implementation of the management systems as described under PS1 above and aligned with the requirements on the environmental licenses granted by the local Mexican Authorities. Construction of the Alpha production facilities is in compliance with Environmental Impact Assessments (EIA) recommendations and applicable IFC requirements with regard to control of dust and noise arising from construction activities, erosion and sediment control, as well as the safe storage, handling, application and disposal of hazardous materials used in the construction activities. Contractors hired during construction are required to follow the project’s safety plan and to comply with local regulations regarding management of wastes. -Hazardous materials: The use of hazardous materials at Alpha is limited to concrete additives, lubricants and oils for the demolding of the concrete panels and for the hydraulic and mechanical maintenance of equipment. Materials are stored on designated areas, with signaling and basic life and fire safety protection. Alpha will ensure that areas for the storage of chemicals in the new production facilities have containment basins and that information regarding the products such as MSDS is available to employees. -Solid Waste Management: Waste generated in the process in minimal, the precision of the equipment guarantees minimal residuals such as steel, ducts, or concrete. Solid and hazardous wastes are separated by risk and handled by authorized contractors. Non-hazardous solid wastes, including steel scrap, wood and damaged concrete panels are recycled where possible and the balance disposed at municipal landfills. Used oils and lubricants, and contaminated materials (used PPEs and rags) are disposed through authorized vendors. Concrete probes from tests are used for fences on the housing developments. -Greenhouse Gas Emissions: Greenhouse emissions of the operations are associated with electricity consumption and the use of fuel for the curing chambers. Emissions up to date are minimal as there is only one production facility operational (Tijuana) and it has been working only for three months. The Greenhouse emissions of the current operations have been estimated as 400 tons of CO2 during 2010. The estimated emission when the project is fully developed is near 7000 tons of CO2 per year. Community health, safety and security Transportation of the modules to the housing development’s site will be performed in accordance with safety rules in order to prevent the occurrence of incidents during the transportation. Alpha did a preliminary structural study using an structural analysis and design software (STAAD.Pro) for the houses built with the Alpha technology, which confirms compliance with seismic conditions and the Mexican construction code RCDF 2004, code for Mexico City and the Construction Code for Baja California state-1992. The company is planning to perform a complete assessment by mid 2011, such study will be submitted to IFC. Alpha uses only approved materials during the production of houses. Alpha does not use lead paints or asbestos in the production of the modules The production facilities are equipped with extinguishers and alarms, the evacuation routes are identified. Alpha will develop specific emergency response plans for each production facility and will ensure that employees and as needed local communities are aware of the procedures in case of an emergency.

Alpha’s community engagement activities are executed through the corporate initiatives of Geo. Geo initiatives are focused on building self-sustained communities in its housing developments. The program named “Creando Comunidades Sostenibles” covers environmental, social and economic activities. Environmental elements include guaranteeing safe and efficient services such as energy-saving lighting, wastewater treatment, and in some pilot programs installing solar heaters. On the social area the company has developed vocational training programs to residents; have ensured availability of schools and basic services (health, daycares, retail services, etc) and is strengthening communal decision making. Geo has a well functioning external grievance mechanism; it deals with external queries, concerns, and grievances for its developments, as well as any grievance of the local community; up to date there are not specific grievances regarding Alpha homes. The company will maintain and record grievance regarding Alpha houses.

This ESRS and the accompanying Environmental and Social Action Plan will be publicly disclosed. Documents will be available for review and comment at: Jalisco: Carretera Tlajomulco Cajititlán KM 1.3 S/N C.P. 45670 CP 45670 Tlajomulco de Zúñiga Monterrey: Carretera a Salinas Victoria N.L. KM 7.5 S/N A un costado de la Ciudad Satélite Norte Tijuana: KM 29+ 960 Carretera Tijuana-Tecate Delegacion La Presa Tijuana, B.C C.P. 22000 The Company will make adequate public disclosure of this transaction in the Mexican business and trade press. Previous to initiate the construction of any new production facility, Alpha will disclose locally the intention to build a new production facility and will communicate to IFC the disclosure site For comments, please contact Alpha General Manager: Luis Ramón Pradillo Movellán lpradillo@casasgeo.com Technical Manager: Oscar Espinosa Ortega oespinosao@casasgeo.com The Company will make adequate public disclosure of this transaction in the Mexican business and trade press.