Independent Auditors’ Report to the Board of Directors and Stockholders of Grupo Carso, S. A. B. de C. V. (Amounts in thousands of Mexican pesos)
Opinion
We have audited the accompanying consolidated financial statements of Grupo Carso, S. A. B. de C. V. and its subsidiaries (the “Entity” or “Grupo Carso”), which comprise the consolidated statements of financial position as of December 31, 2023, 2022 and 2021, and the related consolidated statements of income and other comprehensive income, the consolidated statements of changes in stockholders’ equity and the consolidated statements of cash flowsfor the years then ended, together with the notes to the consolidated financial statements, including a summary of material accounting policies.
In our opinion, the accompanying consolidated financial statements fairly present, in all material respects, the consolidated financial position of Grupo Carso, S. A. B. de C. V. and subsidiaries as of December 31, 2023, 2022 and 2021, together with its consolidated financial performance and consolidated cash flows for the years then ended, in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board.
Basis for opinion
We conducted our audits in accordance with International Standards on Auditing (ISA). Our responsibilities under those standards are further described in the Independent Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Entity in accordance with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants’ (IESBA Ethics Code) and with the ethical requirements that are relevant to our audit of the consolidated financial statements in accordance with the Code of Ethics issued by the Mexican Institute of Public Accountants (IMCP Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Ethics Code and IMCP Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matter
Key audit matters are those that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined that the key audit matter described as follows is the key audit matter that should be communicated in our report.
Impairment of long-lived assets including goodwill and intangible assets (see Notes 3, 15 and 19)
The Entity has identified the cash-generating units on which an impairment analysis study is carried out each year as established by International Accounting Standard 36 “Impairment of assets”, in which discounted future cash flows are calculated to determine if the asset value has deteriorated. We focused on the determination of the impairment due to the materiality of the balances of long-lived assets of the commercial segment and the intangible assets and goodwill of Elementia as of December 31, 2023, since there is a risk that the determination of the assumptions used by the management to calculate future cash flows, are not reasonable based on current and foreseeable future conditions.
The most significant assumptions refer to the discount rate applied and the assumptions that support future cash flows, in particular the growth rate of revenues and projected cost and expense ratios. Our audit procedures to hedge the risk in relation to the impairment of long-lived assets included, among others:
i. We reviewed the impairment models carried out by the administration, for those cash generating units whose carrying values are subject to significant judgment.
ii. We have discussed key management assumptions regarding cash flow forecasts, discount rates, and long-term growth rates based on our knowledge of the business, industry, and audited historical information.
iii. We involved our specialists to challenge the assumptions used by management to validate the reasonableness of the information with the behavior of the business and industry market, including the current business situation in conjunction with the audit team.
Responsibilities of Management and Those
Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for the internal control deemed necessary by management to enable the preparation of consolidated financial statements that are free of material misstatement due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Entity or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Entity’s consolidated financial reporting process.
Independent Auditors’ Responsibilities for
the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements, taken as a whole, are free of material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISA will always detect material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit performed in accordance with ISA, we exercise professional judgment and maintain professional skepticism throughout the audit.
We also:
– Identify and assess the risks of the material misstatement of the consolidated financial statements due to fraud or error, design and perform audit procedures to respond to those risks, and obtain sufficient, appropriate audit evidence to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
– Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control.
– Evaluate the appropriateness of accounting policies used and the fairness of accounting estimates and related disclosures made by management.
– Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention to our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Entity to cease to continue as a going concern.
– Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures and whether the consolidated financial statements represent relevant transactions and events in a manner that achieves a fair presentation.
– Obtain sufficient, appropriate audit evidence regarding the financial information of the entities or business activities within the Entity to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
Other matter
The accompanying financial statements have been translated into English for the convenience of readers
Additional information other than the consolidated financial statements and the independent auditors’ report
The Entity’s Administration is responsible for the other additional information. The other information includes, i) the information that will be included in the Annual Report that the Entity is required to prepare pursuant to Article 33 Section I, subsection b) of Title Four, Chapter One of the General Provisions Applicable to Issuers and Other Stock Market Participants in Mexico and the Instructions accompanying these provisions (the Provisions). The Annual Report is expected to be available for our reading after the date of this audit report; and ii) the other additional information, which is not required by IFRS, but has been included so as to assess the performance of each operating segment as regards the Entity’s Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA); this information is presented in Note 32.
Our opinion on the consolidated financial statements does not cover the other information and we will not express any form of assurance in this regard.
In relation to our audit of the consolidated financial statements, our responsibility will be to read the Annual Report, when it is available, and when we do so, consider whether the other information contained therein is materially inconsistent with the consolidated financial statements or the knowledge we obtained during the audit, or which appears to contain material misstatement. When we read the Annual Report, we will issue a legend in this regard, as required by Article 33 Section I, subsection b) number 1.2. of the Provisions. Similarly, as regards our audit of the consolidated financial statements, our responsibility is to read and recalculate the other information, which is not required by IFRS and, when doing so, consider whether the other information contained therein is materially inconsistent with the consolidated financial statements or with the knowledge we obtained during the audit, or which appears to contain a material misstatement. If, based on the work we have
performed, we conclude that the other information contains material misstatement, we would report this fact. However, we have nothing to report concerning this this matter.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
Among the matters communicated with those charged with governance, we determined those matters that were of most significance in the current period audit of the consolidated financial statements and are therefore the key audit matters. We described these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Galaz, Yamazaki, Ruiz Urquiza, S. C. Afiliada a una Firma Miembro de Deloitte Touche Tohmatsu Limited
![](https://www.carso.com.mx/wp-content/InformesAnuales/GC2023/wp-content/uploads/2024/07/Captura-de-pantalla_5-7-2024_113723_.jpeg)
C. P. C. Erik Padilla Curiel
Mexico City, Mexico
March 25, 2024