Corporate practices and audit committee Grupo Carso, S.A.B. de C.V.
I, the undersigned, in my capacity as Chairman of the Corporate Practices and Audit Committee of Grupo Carso, S.A.B. de C.V. (the “Committee”), hereby submit the following annual activity report for the fiscal year 2015.
The Chief Executive Officer of Grupo Carso, S.A.B. de C.V. (the “Company”) and the relevant executives of the entities the Company controls, complied satisfactorily with their objectives and responsibilities.
The following succeeding transactions with related parties were authorized by and submitted for consideration of the Committee, including the following significant transactions, each of which represents more than 1% of the Company’s consolidated assets:
Teléfonos de Mexico, S.A. de C.V., for the sale of telephone copper wire and optic fiber, “Call Center” services, telephone installation and sale of items for telephony; installation services of outside plant fiber optic and network design, including sale of telephone copper wire and optic fiber; catering services; and commissions for the sale of scrap, rescues and fleet replacement vehicles; Concesionaria Autopista Guadalajara-Tepic, S.A. de C.V., construction of road bypasses, revamp of roads and optic fiber linkage; Delphi Packard Electric Systems, for the sale of harnesses and cables, and automotive engineering services; Claro, S.A., for the areas of sale of cable and optical fiber, manufacturing and installation of radio bases, installation of fiber optic and network design, including sale of copper and fiber optic telephone cable; CRS Morelos, S.A. de C.V., for the areas of civil construction and installation of wiring for data and communication networks; and Radiomovil Dipsa, S.A. de C.V., for purchase of cellular equipment, rate plans, and memory cards for phones and other concepts.
All transactions with related parties were conducted at market values and reviewed by Galaz, Yamazaki, Ruiz Urquiza, S.C., which elaborated a summary thereof recorded in a note included in the audited financial statements of Grupo Carso, S.A.B. de C.V. and subsidiaries as of December 31, 2015.
The Chief Executive Officer of Grupo Carso, S.A.B. de C.V. receives no remuneration for the performance of his activities as such. The Company has no employees and therefore, concerning the total compensation received by the directors of the companies controlled by it, we ensure that the policies that were approved in this respect by the Board of Directors have been complied with.
The Board of Directors of the Company did not grant any waiver to any relevant director, officer or person in command to take advantage of business opportunities for themselves or for third parties, corresponding to the Company or entities it controls or in which it has significant influence. Nor did the Committee grant any waiver for the transactions indicated under subsection c) of section III of Article 28 of the Securities Market Act.
The system of internal control and internal audit of Grupo Carso, S.A.B. de C.V. and the entities it controls is satisfactory and meets the guidelines approved by the Board of Directors, according to the information provided to the Committee by the Management of the Company and the independent auditor’s report.
We had no knowledge of any noncompliance with any guidelines or policies concerning the operation or accounting rules of the Company or in connection with the entities it controls, and consequently, no preventive or corrective action was implemented.
The performance of the accounting firms Galaz, Yamazaki, Ruiz Urquiza, S.C. and Camacho, Camacho y Asociados, S.C., entities that conducted the audit of the financial statements of Grupo Carso, S.A.B. de C.V. and subsidiaries as of December 31, 2015 and of its subsidiaries, and the performance of the independent auditor in charge of the audit were satisfactory and the objectives set at the time of contracting the said entities were achieved. Also, according to the information provided by the said firms to the Management of the Company, their fees for the independent audit represented a percentage of less than 10% of their total revenue.
As a result of the review of the financial statements of Grupo Carso, S.A.B. de C.V. and subsidiaries as of December 31, 2015, there were no adjustments to the audited figures and no exceptions that needed to be revealed.
In accordance with information we received from the Company’s Board of Directors and during the meetings in which we participated, which were attended by independent and internal auditors and carried out without the presence of officers of the Company, as far as we know there were no relevant comments from shareholders, directors, relevant officers and employees and, in general, from any third party, regarding accounting, internal controls or other issues related to internal or external audits, or complaints made by those persons on irregularities in the administration of the Company.
During the reporting period, we verified that resolutions adopted by the Shareholders’ Meeting and the Board of Directors of the Company were complied with. In addition, according to the information provided by Company’s Board of Directors, we verified the existence of controls designed to determine compliance with the provisions applicable in terms of financial markets and that the legal department reviewed such compliance at least once a year. There were no comments concerning any adverse change in the Company’s legal status.
During the reporting period, we verified that resolutions adopted by the Shareholders’ Meeting and the Board of Directors of the Company were complied with.
During the fiscal year 2015, the Company and some of the entities it controls made significant investments. In this regard, we make sure that any financing is undertaken in a manner consistent with the strategic medium- and long-term plan of the Company. There were no comments in connection with any adverse change in the Company’s strategic position. In addition, we ensured that the strategic position of the Company is in alignment with the plan. We also reviewed and evaluated the budget for the fiscal year 2015 together with the financial projections that were considered for its construction, including major investments and financing transactions of the Company, which we consider feasible and consistent with the Company’s investment and financing policies and strategic vision.
In preparing this report, the Corporate Practices and Audit Committee relied on information that was provided by the Chief Executive Officer of the Company, the relevant officers of the entities it controls and the independent auditor.
Mr. José Kuri Harfush
Chairman