Información Corporativa

Audit Committee

Members

C.P. Rafael Kalach Mizrahi
President

Lic. José Kuri Harfush

Ing. Antonio Cosío Ariño

Functions

The mandate of the Audit Committee includes establishing and reviewing procedures and controls to ensure that the financial information we distribute is useful, appropriate and reliable and accurately reflects our financial position.

The authority of the Audit Committee under the new Mexican Securities Market Law (SML) comprises:

a) Giving the Board of Directors an opinion on the matters on which it is competent pursuant to the SML, mainly regarding the following:

1) Any guidelines regarding internal control of internal audits carried out, of the Company and any other subsidiaries controlled thereby.

2) Whether the accounting policies of the Company adhere to the financial reporting standards or issued by the Commission through provisions of a general nature.

3) The Company's financial statements.

4) Retaining the firm that is to provide external auditing services and, as the case may be, any other additional or supplementary services thereto.

5) Any transactions carried out simultaneously or successively and which, due to their characteristics, might be considered as one single transaction and which are purported to be carried out by the Company or any subsidiaries controlled thereby within one fiscal period, whenever they are unusual or non-recurring or, whenever their amount represents, based on the figures at the close of the immediately preceding quarter, (i) the acquisition or alienation of assets equal to or in excess of 5% of the Company's consolidated assets, and (ii) the provision of guaranties or the assumption of liabilities equal to or in excess of 5% of the Company's consolidated assets.

b) Evaluating the performance of the firm providing the external auditing services, as well as analyzing their opinions, reports or data. For such purposes, the Committee may request the presence of such auditor whenever deemed appropriate, without prejudice of the fact that the auditor must meet with the Committee at least once a year.

c) Discussing the Company's financial statements with the persons responsible for preparing and reviewing them and making the pertinent recommendations to the Board of Directors as to their approval or not.

d) Reporting to the Board of Directors on the status of the internal auditing and control system of the Company or of any other subsidiaries controlled thereby, including any irregularities detected.

e) Prepare the CEO's opinion on the Annual Report and submit it to the Board of Director's consideration, for further submission to the Stockholders' Meeting, based on the opinion of the External Auditor, among other elements. Such opinion must mention, at least that:

1. The accounting and information policies and criteria followed by the Company are adequate and sufficient, taking into account the specific circumstances thereof.

2. Such policies and criteria have been consistently applied to the information supplied by the CEO.

3. As a consequence of items 1 and 2 hereinabove, the information submitted by the CEO fairly reflects the financial position and results of the Company.

f) Assisting the Board of Directors in drafting the report containing the major accounting and information policies and criteria followed in the preparation of the financial information and report on the activities in which such Board may have participated, pursuant to the provisions of the SML.

g) See to it that all transactions for an amount equal to o in excess of 5% of the Company's consolidated assets are approved by the Board of Directors and that any transactions representing 20% or more of the Company's consolidated assets are approved by the General Ordinary Stockholders' Meeting, and that all of them take place in accordance with the provisions of the SML.

h) Request independent experts' opinions whenever deemed advisable, for the proper performance of its duties or whenever required by the SML or by other general provisions thereof.

i) Request the competent corporate officers and other employees of the Company or other subsidiaries controlled thereby, reports in connection with the preparation of the financial information and any other deemed necessary for the performance of its duties.

j) Investigate any possible violations that may come to its attention of any transactions, operational guidelines and policies, internal control and internal audit and accounting record systems, whether of the Company itself or any other subsidiaries controlled thereby through a review of the documentation, records and other supporting evidence, to the degree and extent necessary for effective monitoring.

k)Receive any remarks made by stockholders, directors, executive officers, employees and, in general, any third party, regarding any of the matters referred to in the preceding paragraph, as well as to carry out any acts deemed appropriate in connection with any such remarks.

l) Request periodical meetings with executive officers as well as the delivery of any kind of information in connection with internal control and internal auditing of the Company or any subsidiaries controlled thereby.

m) Report to the Board of Directors any major irregularities detected regarding their performance and, as the case may be, any corrective action adopted or propose any that should be applied.

n) Call Stockholders' Meetings and request the insertion in the Agenda for the meetings any items for discussion deemed pertinent.

o) Monitor the compliance by the CEO of any resolutions adopted by the Stockholders' Meetings and the Board of Directors' Meetings of the Company, pursuant to any instructions given by such Stockholders' Meeting or Board of Directors' Meeting, as the case may be.

p) See to the implementation of internal mechanisms and controls enabling the verification that all acts and transactions by the Company and any subsidiaries controlled thereby adhere to the applicable standards, as well as methodologies to facilitate reviewing the foregoing.

Other powers of the Audit Committee are the following:

a) Assist the Board of Directors in supervising the performance of the External Audit agreements, as well as the evaluation of the results or reports proposed by them, ensuring their independence and objectivity, and that any fees received for the services provided to the Company are not equivalent to a percentage exceeding 20% of the auditing firm's total revenues. (Currently, the percentage may not exceed 10% of the firm's total revenues, pursuant to the general provisions issued by the National Banking and Securities Commission).

b) Recommend the basis for the preparation and distribution of the Company's financial information, as well as the general guidelines of our internal control system. Internal control system means the operational and financial controls implemented in order for the Company to function pursuant to the general guidelines issued by its Board of Directors.

c) Discuss with the Board of Directors our internal control system in connection with risk management and compliance with applicable laws. Among the most relevant points for review, there are: (I) relevant information to the market; (II) acquisition accounting; (III) early revenue recognition; (IV) restructuring charges; (V) reserve management; and (VI) accounting for derivative instruments and arbitration activities.

d) Ensure the existence of the necessary control mechanisms to warrant unaudited financial information consistency as submitted to the Board of Directors of the Company.

e) Review, together with our external auditors, the financial statements submitted with the Company's Annual Report, as well as the quality of the accounting principles applied thereto and review that the interim financial information is prepared following the same policies, criteria and practices used for the annual information.

f) Review the rules of the Audit Committee and, as the case may be, recommend to the Board of Directors any proposal for amendments thereto, in the understanding that it will be for best attaining designated objectives.

g) Report to the Board of Directors on the activities carried out by the Committee.

h) Prepare an annual self-evaluation, reviewing the activities carried out by the Audit Committee in connection with its objectives.

i) Supervise, review and discuss the auditing procedures of the Company's internal audit area.

j) Carry out any other functions corresponding to its responsibilities and that the Committee deems pertinent for the due performance of its objectives, and perform any other activities expressly conferred by the Board of Directors.

k)Approve other services to be provided by the Company's external auditors and ensure that the provision of these services does not affect their independence.

l) Settle any controversies between the CEO and the executive officers of the Company with the External Auditors.

m) Obtain from the External auditors a report including the analysis of:

(i) All of the critical accounting policies used by the Company.

(ii) All of the accounting policies and practices as permitted under the financial reporting standards other than those used by the Company and which had been discussed with the CEO and the executive officers of the Company, including any implications of using such policies and practices.

(iii) Any other written communications on significant issues among the external auditors and the CEO and executive officers of the Company, including the Annual Letter to the CEO and executive officers where the External Auditors summarize their recommendations on the internal controls and the non-adjusted differences in inventory as identified during the audit.

n) Implement procedures for receiving, retaining and addressing complaints regarding any accounting, audit and internal control matters, including procedures for anonymous and confidential submission by the Company's employees of such complaints.

o) The Audit Committee, in its absolute discretion, shall be empowered to select and retain lawyers, experts and other consultants to provide services to the Committee and will have authority to approve their compensation. The Company shall be bound to provide the necessary resources to make the required disbursements for their proper performance.

p) At their discretion, the Committee members shall set aside time during their meetings to discuss and decide without the presence of the Company's CEO and executive officers.

q) The Committee members shall set up a schedule for meeting with the party responsible for the internal audit and the auditor's representatives separately, without the presence of the Company's CEO or executive officers.

r) Review and analyze with the executive officers and the external auditors, the annual report of the Company, and the quarterly financial results to be submitted to the SEC, in particular the portions discussing the Company's financial information and critical accounting policies.

s) Oversee the execution of resolutions adopted at stockholders' meetings or by the Board of Directors.

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