Latin American Capital Markets

The company's historyof equitable treatmentof shareholdersevidences consistentconformance withinternational marketexpectations.Copyright © by the Inter-American Development Bank. All rights reserved.For more information visit our website: www.iadb.org/pubCORPORATE GOVERNANCE AND CAPITAL MARKET DEVELOPMENT 461C. Transparencyand disclosureThe company's financial statements areprepared in accordance with an internationallyrecognized system of accountingand audited by a recognizedindependent auditing firm.The company has in place an appropriatesystem of internal controls and internalauditing that regularly interfaces withthe external auditors and is responsibleto the board of directors.The company complies with all disclosurerequirements under applicable law, regulations,and listing rules. Investors andfinancial analysts are treated equallyregarding information disclosure(fair disclosure).The company publishes meaningfulquarterly reports, containing segmentreporting as well as results per share.Its practices go beyond local listingrequirements.The company prepares and presents allfinancial statements and reporting inaccordance with IAS or U.S. GAARaudited by a recognized internationalaccounting firm in accordance withinternational standards of auditing.The company's financial and nonfinancialdisclosure practicesare in accordance with highestinternational standards.All disclosure and communicationswith shareholders are madeavailable on the Internet in atimely fashion.D. Treatmentof minorityshareholdersMinority shareholders are provided withadequate notice and agenda of allshareholders meetings and permittedto participate and vote at shareholdersmeetings.The company treats all shareholders ofthe same class equally with respectto voting rights, subscription rights,and transfer rights.All securities holders are treated equallyregarding information disclosure (fairdisclosure).Shareholders are provided with accurateand timely information regarding thenumber of shares of all classes heldby controllers and affiliates (ownershipconcentration).Effective representation of minorityshareholders is provided by cumulativevoting or similar mechanisms.The company has clearly articulated andenforceable policies with respect totreatment of minority shareholders inchanges of control.The company has a well-understood policyand practice of full and timely disclosureto shareholders of all materialtransactions with affiliates of the controllingshareholders, directors, or management(conflicts of interest), andcomplete, timely, and accurate disclosureis made of all material shareholderagreements among controllers.The company's annual report disclosesthe principal risks to minority shareholdersassociated with the identity ofthe company's controlling shareholders,the degree of ownership concentration,cross-holdings among companyaffiliates, and any imbalances betweencontroller voting power and overallequity position in the company.The company has in place effectiveshareholder voting mechanisms(which may include super-majorityrequirements or "majority ofminority" provisions) to protectminority shareholders against unfairlyprejudiced actions of controllerswhen ownership is especiallyconcentrated or controllingshareholders may have strongconflicts of interest.