as an entity that adds great value and is responsible for approving the company’s strate-

gy. The Board of Directors oversees the management’s performance and prepares a
report to the shareholders on such performance, a copy of which is included in the com-
pany’s annual report. The Chairman of the Board must be someone other than the
Chief Executive Officer. Senior managers are selected by the CEO. The market is kept
informed about important matters in a timely fashion though the publication of
“Hechos de Importancia” (material events disclosure). Finally, from an organizational
point of view, the Corporate Governance Committee is responsible for design and over-
sight of governance programs in Ferreyros.
To ensure information quality and transparency, an internal audit department is in
place and reports to the Board. Financial statements are audited by an audit firm select-
ed by and accountable to the Board, pursuant to powers granted by the Annual General
Meeting. To this effect, a contract policy was adopted providing the possibility of annu-
al contract renewals and the extension of renewal terms up to 5 years requiring a more
thorough assessment of the level of service satisfaction and, in any case, requiring an
audit partner and/or staff rotation. As good corporate governance recommends, the
company refrains from hiring the external audit firm to perform services other than the
audit of financial statements. Legal and tax consultancy services are provided by other
unrelated firms.
The company has adopted an “Internal Code of Conduct to ensure compliance with
obligations resulting from the registration of securities with the Public Registry of the
Securities Market”. These rules reflect the company’s policy of openness and best dis-
closure practices. The Code lays down internal procedures that allow the company’s
stock market representative to disclose material facts to the market within the required
time. This same Code establishes the company’s stock trading policy, spelling out obli-
gations and procedures for directors, officers, employees and advisors who deal with
privileged information. The company’s Code clearly prohibits the misuse or unautho-
rized disclosure of inside information and penalizes insider trading on that basis.
The company notifies the market of material events one day after they have
occurred, issues quarterly financial statements and yearly audited financial statements.
Ferreyros began publishing its quarterly releases with company financial results many
years before any laws required such disclosure and before corporate governance volun-
tary principles were adopted in Peru. Since 2004, Ferreyros includes a statement on the
degree of compliance with corporate governance principles in every annual report.
Ferreyros posts its annual report on web pages accessible to the public. The compa-
ny’s ownership structure is also disclosed, listing those shareholders that hold more than
5% on its website, as well as on the website of Peru’s Comisión Nacional Supervisora de
Empresas y Valores (CONASEV—the Peruvian securities market regulator). Any
change in these holdings is reported immediately. The number of shareholders having

40 Companies Circle