The member of the Directors’ Committee are Francisco Perez M., Augusto Iglesias P. and Alejandro Ferreiro. The latter two are members of the board of directors who are independent from the controller as they were elected with the votes of shareholders other than the controller. The chairman of the Committee is Alejandro Ferreiro Y.
At the different meetings held during 2008, the Directors’ Committee was informed of the matters indicated in article 50 bis of the Corporations Law, in accordance with the timetable pre-set by the Committee, carrying out the following activities:
a) Examine the information related to the operations referred to in articles 44 and 89 of the Corporations Law and report to the board on these matters. With regard to this point, the Company’s internal regulations and the operations carried out were revised. The Committee also requested continuous information from the management on the application of the Manual of Related Transactions, approved during 2003, to which transactions of this nature should follow, carried out by the Company and its subsidiaries, showing that its regulations are being complied with. It also was informed of the updating and complementation of the list of persons related to the Company and its subsidiaries.
b) Examine the remuneration systems and compensation schemes for the principal managers and executives. The Committee discussed this subject at the corresponding meetings, according to the pre-set timetable and approved the bonus system based on performance for the executives of the Company and its subsidiaries to be applied this year, which is oriented to compliance with profit-related objectives, the generation of cash flow (EBITDA) and improvement of profitability (operating margin) very similar to that applied the previous year.
c) Examine the Reports of the inspectors of accounts and external auditors, the balance sheet and other financial statements presented to the shareholders, and give its opinion prior to their presentation to the shareholders. The Committee, in this matter, was informed by the external auditors of the auditing plan of the year for the Company. It also received and revised the auditor’s report at December 31, 2007, the balance sheet and other financial statements at that date that were presented to it by the management and the external auditors for its comments, as also the internal auditing plan prepared by the Company’s Internal Audit Department, received the limited report on the revision of the financial statements as of June 30, 2008 and the report to the internal control management.
d) Propose the external auditors and the private credit-rating firms to the board to be suggested to the respective shareholders meeting. The Committee was informed of the proposals of the auditors invited to present proposals and was informed about the credit-rating firms and the costs of each one, in order to inform and recommend a proposal in this respect to the board. It proposed as the external auditors the firm Ernst & Young and as the credit-rating firms Humphreys Ltda. and Feller-Rate Clasificadora de Riesgo.
