REPORT OF THE COMPANY PRACTICES AND AUDITING COMMITTEE
C.P. Rafael Moisés Kalach Mizrahi (Presidente)
Engr. Antonio Cosío Ariño
Lic. David Ibarra Muñoz
ANNUAL REPORT
To the Board of Directors
In my capacity as chairman of the Company Practices and Auditing Committee of Grupo Carso, S.A.B. de C.V. (the “Committee”), I hereby submit the following annual report of activities during the fiscal year of 2023.
Company Practices and Evaluation and Compensation Functions
El The director general of Grupo Carso, S.A.B. de C.V. (the “Corporation”) and the directorates of the juridical entities it controls have satisfactorily complied with their responsibilities and met the objectives assigned to them.
The operations with related parties that were submitted to the consideration of the Committee were approved. Among those significant operations, successively executed and each of them representing more than one percent of the Corporation’s con-
«Empresa de Servicios y Soporte Integral GC, S.A.P.I. de C.V., for the concept of fiber optics downspouts (from post to well); installation of chambers (Ciudad Segura); installation of fiber optics (external); engineering works (design of the telephony and internet connectivity network for Telmex companies); Installation of fiber optics; high-zero wiring; network cables; aerial cable; telephone wiring; fiber optic cable and electronic cable; construction for the passing of the fiber optics cable; Última Milla, S.A.P.I. de C.V. National Network for the concept of downspouts, high zero, maintenance and ducting; sale of
telephone wire; work on disassembled cable for recovery of the copper; commission for mediation; Aptiv Services US LLC and other companies for the sale of harnesses, cable, and automotive engineering services, and Autovía Mitla Tehuantepec, S.A. de C.V. for the construction of civil works.
All the operations with related parties were carried out at market values, and they were reviewed by the accounting firm of Galaz, Yamazaki, Ruiz Urquiza, S.C. (the “Firm”), the legal entity that carried out the audit of the financial statements of Grupo Carso, S.A.B. de C.V. y Subsidiarias up to December 31 of 2023 as well as of most of its subsidiaries, and a summary of those financial statements can be found in a Note of the said financial statements.
The director general of the Corporation does
not receive any remuneration for the performance of his activities as such. The Corporation does not have employees, and, in regard to the integral remunerations of the relevant directors of the companies controlled by the Corporation, we have ascertained that they have complied with the policies that were approved by the Board of Directors in that respect.
The Board of Directors of the Corporation has not granted any dispensation so that any Director or person of authority could take personal advantage of business opportunities corresponding to the Corporation or to the legal entities it controls or in which it has a significant influence. Nor has the Committee granted any dispensation for the transactions referred to in subparagraph
c) of fraction III of Article 28 of the Stock Market Law
Auditing Functions
We submitted to the consideration of the Board of Directors of the Corporation the ratification of Galaz, Yamazaki, Ruiz Urquiza, S.C. to carry out the external audit of the financial statements of Grupo Carso, S.A.B. de C.V. y Subsidiarias and of most of its subsidiaries (the “Audit”) up to December 31 of 2023, as well as the ratification of its remuneration for the said service, having taken into account that the resources proposed by the Firm for the execution of the program were reasonable, considering the scope of the said audit, the nature and complexity of the Corporation’s operations and its structure, and having also reviewed the terms for the execution of the Audit.
We evaluated the compliance by the Firm and by the Independent External Auditor of the personal, professional and independence requirements referred to in Article 6 of the provisions of a general nature applicable to
the entities and issuers supervised by the National Banking and Securities Commission who contract external auditing services for basic financial statements (the “External Auditors Circular”), and decided that both the Firm and the
Independent External Auditor satisfactorily met the said requirements.
We did not consider it necessary to implement any measure to guarantee the independence of the Firm or of the Independent External Auditor, as well as of the persons who participated in the Audit.
We obtained from the Firm the declaration on the compliance with the quality control standard for the performance of the services corresponding to the Audit, as referred to in fraction II of Article 20 of the External Auditors Circular.
We monitored the auditing activities realized
by the Firm in a punctual manner and kept the Corporation’s Board of Directors informed in that respect. We also monitored the activities of the Independent External Auditor, who informed us of his activities and the development of the Audit.
There were no adjustments to the audited numbers resulting from the review of the opinion and of the financial statements of Grupo Carso, S.A.B. de C.V. y Subsidiarias up to December 31 of 2023, nor provisos to reveal in regard to the said Statements.
As a result of the review of the letter of observations of the Independent External Auditor, as established in fraction I of Article 15 of the External Auditors Circular (the “Letter of Observations”) in regard to the substantive procedures, the evaluation of the internal control and the relevant matters that the Independent External Auditor provided to the Corporation, we found various observations regarding the Corporation and some of its subsidiaries. In that respect, the Corporation’s
Administration informed us that a Plan of Action is being prepared with the preventive and corrective measures necessary and the period of time for its completion in response to the said observations, in conformance with the indications in the applicable legal provisions.
We found no indication of any breach of its operating and accounting guidelines and policies by the Corporation or by any of the legal entities it controls, and therefore no preventive or corrective measures were implemented in that respect.
The performance of the Firm and of the Independent External Auditor was as expected and the objectives established when they were contracted were accomplished. The quality of the opinion of the financial statements of Grupo Carso, S.A.B. de C.V. y Subsidiarias up to December 31 of 2023 was also satisfactory. The internal control and internal auditing system of Grupo Carso, S.A.B. de C.V. and
of the legal entities it controls is satisfactory and complies with the guidelines approved by the Board of Directors, as is gathered from the information provided to the Committee by the Corporation’s Administration and by the persons responsible for the internal audit of both Grupo Carso, S.A.B. de C.V. as well as of Grupo Sanborns, S.A.B. de C.V. in regard to the activities they carried out in compliance with the internal auditing plan for which they were responsible, their follow-up on the principal findings they detected during the fiscal year of 2023 or that they had previously reported, and of the opinion of the external audit.
According to the information we received from the Administration and the meetings we held with the external and internal auditors, without the presence of Corporation officers, and as far as we know, there were no relevant observations made by shareholders, directors, relevant managers, employees or any third party in general in regard to the accounting, internal controls or subjects related to the internal or external audit, nor any denunciations by the said parties regarding irregular acts by the Corporation’s administration or by the legal entities it controls.
During the period of the report, we ensured that due compliance with the accords adopted in the shareholder and Board of Directors meetings was carried out. Likewise, and in accordance with the information we were provided by the Corporation’s Administration, we verified that the latter has controls that allow it to establish that it
is complying with the provisions applicable to it in regard to the stock market, and that its legal department reviews this compliance at least once a year, finding no observations in this respect and no adverse change in the legal situation.
In respect to the financial information that the Corporation prepares and submits to the Bolsa Mexicana de Valores, S.A.B. de C.V. and to the National Banking and Securities Commission, we verified that the said information is elaborated under the same policies, criteria and accounting practices under which the annual information will be elaborated.
Finances and Planning Functions
The Corporation and the juridical persons it controls resumed investments in the 2023 fiscal year, and we ascertained that the said investments
were made in a manner that was congruent with the Corporation’s medium- and long-term strategic plans. Additionally, we periodically verify that the company’s strategic position is in accordance with the said plan. We also review and evaluate the budget for 2024, along with the financial forecasts that were taken into account for its elaboration, which included the Corporation’s principal investments and financing transactions, which we decided were viable and in congruence with the investment and financing policies and strategic vision of the Corporation.
For the elaboration of this report, the Company Practices and Auditing Committee relied on the information provided to it by the Director General of the Corporation, the relevant managers of the juridical entities it controls and by the external auditor.
Mexico City, March 25 of 2024
President
