Founded in 1922 Core objective: import and sale of machinery equipments In 1942 started distribution of Caterpillar By 2005 company

had 1,200 employees and 7000 share holders 5 Peruvian Pension Investment Funds holds 40% shares

Contd

6 investors with 5% plus shares, rest 43% in free float Ferreyros is listed in Lima Stock Exchange Index Market capitalization grew 62% form 118 M to US$ 191M Turnover of US$ 300 Million

List of share holders having more than 5% of shares

Strategy Overview

The controlling shareholders devised 3 step formula for companys development

1. 2. 3.

Turn over company management to new professional managers Register its shares at the Lima Stock Exchange Institute corporate governance improvements

In 1994 company issued bonds worth US$ 5 M There have been 4 bond issues since then (1994, 1996, 1999 and 2002)

Contd

11 issuance of commercial papers since registration in 2001 worth US$ 49 M In 2004, 5 issuance of bonds worth US$ 50 M In March 2006 AGM shareholders approved registration of mix of bonds and commercial papers worth US$ 90 M

Corporate Governance

BOD: 8 to 12 4 ID selected by pension fund managers 3 Board Committees Each committee of 5 directors , Whom 1 or 2 ID or semi annually session

BOD

BOD meeting every month, 80% attendance for last few years Performance based remuneration BOD entitled to 6% of freely available profits Disclosure of remuneration & compensation in annual report Chairman and CEO should be separate entity CEO selects senior managers

Audit Committee

Info Disclosure

Issue newsletter one day after an event Issue quarterly financial statements and yearly audited reports Issues annual report at web along with major shareholder names Yearly briefing to Peruvian Pension Funds managers

Dividend Policy

Dividend Policy devised in 1997

Cash dividend equal to 5% of capital or ceiling equal to 50% of freely available profit Remainder paid as stock dividend

Award
Best Treatment of Shareholders from Procapitales & Universidad Peruana de Ciencias Aplicadas in May 2006.

Results

Uphold shareholders rights Ensure equal treatment for all shareholders Provide free access to information Guarantee information transparency, quality and timely disclosure Establish an efficient and professionally-skilled Board of Directors

Revenues & Growth

2006 were US$ 221 million, up 43.6% from 2005