To our clients, friends, and referrals:

The Companies Law, in its Articles 20, 23, 231, and 279, as well as Resolutions 92.1.4.3.0013 and 92.1.4.3.0014 issued by the Superintendency of Companies, Securities and Insurance and their amendments, establish the minimum requirements that must be included in the reports of Administrators and Statutory Auditors.

Minimum Requirements in Administrators’ Reports

The annual reports from the administrators to the General Shareholders’ and/or Partners’ Meetings must meet the following minimum requirements:

• Compliance with the objectives set for the fiscal year covered by the report;
• Compliance with the resolutions of the General Meeting and the Board of Directors;
• Information on extraordinary events during the year, in the administrative, labor, and legal fields;
• The company’s financial situation at the end of the year and annual results, compared to those of the previous year;
• Proposal regarding the distribution of profits obtained during the fiscal year (if any); and,
• Recommendations to the General Meeting regarding policies and strategies for the next fiscal year.

If a company has not operated during the fiscal year in question, the report must explain the reasons for the suspension of activities. Administrators of companies whose assets are less than four thousand U.S. dollars (USD 4,000) are not required to comply with this obligation. If the reports fail to meet the established requirements, the Superintendency of Companies, Securities and Insurance may request the necessary clarifications and additional information.

Minimum Requirements in Statutory Auditors’ Reports

The annual reports from the statutory auditors to the General Shareholders’ and/or Partners’ Meetings must meet the following minimum requirements:

1. Opinion on the compliance by the administrators with legal, statutory, and regulatory provisions, as well as the resolutions of the General Meeting and            Board of Directors, if applicable;
2. Commentary on the company’s internal control procedures;
3. Opinion regarding the figures presented in the financial statements and their correspondence with the accounting books, and whether they have been            prepared in accordance with generally accepted accounting principles;
4. Report on the provisions of Article 279 of the Companies Law, which outlines the special powers and duties of statutory auditors as follows:

• Ensure the establishment and maintenance of the guarantees required from administrators and managers, when applicable;
• Require administrators to submit a monthly trial balance;
• Review, at any time and at least once every three months, the company’s books and documents, including cash and receivables;
• Review the balance sheet and the profit and loss account, and submit a duly supported report to the General Shareholders’ and/or Partners’ Meeting;
• Call General Shareholders’ and/or Partners’ Meetings in the cases stipulated by the Companies Law;
• Request that administrators include specific points on the agenda prior to the call for the General Meeting;
• Attend general meetings with the right to speak;
• Monitor the company’s operations at any time;
• Request reports from the administrators;
• Propose, with justification, the removal of administrators;
• Present to the general meeting any complaints received regarding the administration, along with a related report. Failure to comply with this obligation will       result in personal and joint liability with the administrators.
• If there is more than one statutory auditor and their opinions differ, each must submit a separate report.

The Superintendent of Companies may at any time require statutory auditors to provide explanations or clarifications regarding compliance with the provisions of the Law and this Regulation, as well as submission of supporting documentation for their reports. Failure to comply will result in appropriate sanctions as established by law, without prejudice to any applicable civil or criminal actions.

Who May Serve as Statutory Auditors?

• Certified public accountants;
• Economists;
• Business administrators;
• Auditors

In the absence of these professionals, statutory auditors may be individuals with proven experience in activities related to the duties of company auditors.