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Report of the
Corporate
and Auditing
Practices Committee
REPORT OF THE CORPORATE AND AUDITING PRACTICES COMMITTEE
José Kuri Harfush
Chairman
Antonio Cosío Ariño
Claudio X. González Laporte
Rafael Moisés Kalach Mizrahi
To the Board of Directors:
As the chairman of the Corporate and Auditing Practices Committee of Grupo Carso, S.A.B. de C.V. (the “Committee”), I submit the following annual report of activities for the 2011 fiscal year.
Corporate Practices,
Evaluation and Compensation
The CEO of Grupo Carso, S.A.B. de C.V. (the “Company”) and the executives of the corporate entities controlled by the Company, satisfactorily complied with the stated goals and with their responsibilities.
The transactions with affiliates submitted to the consideration of the Committee were approved. Among them are the following significant transactions, each of which represents more than 1% of the consolidated assets of the Company, executed successively:
Teléfonos de México, S.A.B. de C.V., for installation services of the external plant, optical fiber and network design, including the sale of copper and fiber optic telephone cable; call center services, telephone installation services and sale of telephone articles; food service and commission for the sale of junk, salvaging and substitution of automobiles for fleets; Minera Real de Angeles, S.A. de C.V., for services of
transformers, control panels, substations, engine control center, instrumentation for cyclone control, generators, water pumping equipment, installations, start-up processes, transportation and cable; and construction projects; Embratel Participacaoes, S.A., for the sale of cable and fiber optics in Brazil; Delphi Packard Electric Systems for the sale of harnesses, cable and automotive engineering services, and Radiomóvil Dipsa, S.A. de C.V., for the purchase of equipment and telephone cards, among others.
All transactions with related parties were reviewed by Galaz, Yamazaki, Ruiz Urquiza, S.C., and a summary of them is contained in a note of the certified financial statements of Grupo Carso, S.A.B. de C.V. and subsidiaries at December 31, 2011.
The CEO of Grupo Carso, S.A.B. de C.V. receives no remuneration for his activity. The Company does not have employees, and as to remuneration of the relevant executives of the companies controlled by the Company, we verified that they complied with the policies approved by the Board of Directors.
The Board of Directors of the Company granted no exemption to any members of the Board, relevant executives or anyone in an executive position to take
advantage of business opportunities, either for himself or for third parties, that correspond to the Company or to the corporate entities it controls or in which it has a significant influence. The Committee, on its part, granted no exemptions for the operations referred to in paragraph c), Section III, Article 28 of the Securities Market Law.
Auditing Functions
The internal control and internal auditing system of Grupo Carso, S.A.B. de C.V. and of the corporate entities controlled by it are satisfactory and comply with the guidelines approved by the Board of Directors, as observed in the information provided to the Committee by management of the Company and in the external audit certification.
The modifications of accounting policies of the Company were approved to elaborate its financial information based on International Financial Reporting Standards (IFRS) as of the 2012 fiscal year.
We have no knowledge of any relevant default on the guidelines and operation and accounting registry policies of the Company or of the corporate entities controlled by it and, consequently, no preventive or corrective measures were implemented.