The fundamental rights of shareholders set forth by the Corporations Law Nº 19.550 and the Decree 677/01 "Capital Markets Transparency and Best Practices" are the following:

Right to the participation in the profits

This fundamental right to obtain a benefit for the contribution made. The shareholders meeting determines if the whole benefits or part of them be distributed among the shareholders as profits.

Right to be informed about the ongoing of the business

Shareholders have the right to be periodically informed about the ongoing of the business.

Annually, the board of directors prepares the corporate financial statements and an annual report for the shareholders in which is stated the board’s opinion regarding the present situation of the corporate business and future business plans and also contains background information regarding this issues.

The supervisory board also prepares an annual report for the shareholders regarding the present financial and economic situation of the corporate business and in which gives an opinion on the annual report of the board and the financial statements.

The shareholder will be able to obtain information related to the ongoing of the business through the supervision body: 1) through a request presented by shareholders who represent not less than the 2% of the capital, requiring information on the issues subject to their competence; 3) through the investigation of denouncements presented by shareholders representing not less than the 2% of the capital.

They will also have access to such information when participating of the shareholders’ meeting requiring it to the members of the board of directors and of supervisory board who are present at the meeting.

Voting right

This political right corresponds to the shareholder to the extent conferred by the shares he owns and it must be exercised in accordance with the formal dispositions set forth by the legislation and by-laws. We understand that it is an essential right through which the shareholder participates of the adoption of resolutions of the shareholders’ meeting, which are mandatory either for the corporation and for all shareholders.

Ownership Registration and Transfer of Shares:

How are shares registered and transferred?

Registration

Physical registered non-endorsable shares are recorded in a special book kept by the issuer called "Shares’ Record Book". In this book the following information is entered: a) shares’ classes, rights and duties they confer; b) integration status, name of the subscriber, numbers of the securities, succesive transfers with a detail of dates and purchasers’ individualization; c) rights in rem that encumber those shares; d) any other information which derives from the juridical situation of the shares and its modifications.

Book-entry shares are registered in accounts of the owners in a special book denominated "Record of Book-entry Shares", kept by the issuer, by a commercial bank or an investment bank or by an authorized central depositary. The character of shareholder is presumed from the records in that registry. The corporation, the bank of the central depositary must give the shareholder a voucher as proof of the opening of his account and of all movements in it. Also, the shareholder can require written evidence of the balance of account by paying the cost of it.

Shares’ Transfer

Transfer of physical registered non-endorsable shares. The transfer to a third party of this class of shares is performed delivering the securities. Said transfer must be informed to the issuer in order to enable it to enter the corresponding registrations in the record of shares.

Transfer of book-entry shares. The transfer of these shares operates through the instruction given by the holder of the account to the issuer or to the entity which keeps the record, in order to make a debit for a shares’ transfer to a third party and to credit them in the third party’s account. The entity must inform this to the holder of the account in his elected domicile within ten days after said debit is registered.

How shares are registered in your jurisdiction? Focus on the transparency and reliability of the registration’s mechanisms.

The way of registering the ownership is described in point a). We understand that the mechanisms that are used are transparent and reliable for the formalities that must be fulfilled –special books- for the entities in charge of the registration –entities subject to the control of the Comisión Nacional de Valores and the Banco Central de la República Argentina- and for the responsibility derived from the mistakes or irregularities in shareholders’ accounts.

Are there any restrictions on the ability of shareholders to transfer shares? If so, what are they?

Law Nº 19.550 sets forth as a principle that the transfer of shares is free, despite the by-laws can restrict it as long as that does not provoke the implicit prohibition of the transfer.

Participation and Voting in General Shareholder Meetings:

Are all shareholders furnished with information concerning the date, location and agenda of the meeting, as well as information regarding the issues to be decided at the meeting? If so, how far in advance of the meeting is the information provided to shareholders? Also, how much information is provided?

Law Nº 19.550 determines that shareholders be called to the meeting by means of a formal act denominated "call" where the date, place and agenda are also indicated.

Regarding background information for the issues of the agenda of the ordinary shareholder meeting, the law provides that hard copy of the annual reports of the board of directors and the supervisory body, balance sheet, income statement and a statement of the evolution of the net worth to be considered in the ordinary meeting and copy of the notes, supplementary information and appendixes have to be available to shareholders at the head office 15 days before the meeting.

According to the Decree 677/01, in listed companies, the notice of a meeting shall be published twenty days in advance and not before forty five days from the date of the meeting. The established terms shall be computed as from the last publication.

Twenty days before the date established for the meeting, the board of directors shall place at the shareholders disposal in the main office or through electronic means, all the relevant information as regards the meeting to be held, the documents to be considered therein and the board´s proposal.

Up to five days before the date established for the ordinary meeting where the documents of the fiscal year shall be considered, the shareholders representing at least 2 % of the corporate capital may deliver at the main office, comments or proposals related to the company´s business corresponding to the fiscal year. The Board of Directors shall inform the shareholders that said comments or proposals are in the main office or that they may be consulted through any electronic means.

Do all shareholders have the right to ask questions of the board and to propose the inclusion of items in the agenda to a shareholder meeting? If so, under what circumstances?

In principle, the body which calls to the meeting is in charge of the determination of the agenda – board of directors- and the supervisory board only does it in case the first one omits to do so.

Shareholders do not have the right to request the board of directors the inclusion of other specific matters, but they will be able to determine the contents of the agenda only when representing at least 5% of the capital, they request a call to a meeting either to the board of directors or to the supervisory board.

The aim of this limitation is to protect the interest of those shareholders who do not attend the meeting, which could be affected by the inclusion of new matters during the meeting.

However, in case the shareholders’ meeting is unanimous, which means that the total capital is represented at the meeting, the inclusion of new matters in the agenda can be decided if such a decision is made unanimously.

Are shareholders able to vote in person and in absentia? Please describe how it works. If allowed by local regulations, what are the requirements and formalities for proxy voting at a shareholder meeting? Are telephone and electronic voting permitted?

Yes. The shareholder who cannot be present at the meeting can be represented by a proxyholder. The way present shareholders and proxyholders vote is identical; there are no specific dispositions with respect to the latest, except for the case of a dissenting vote on the part of the custodian (see point 10.g).

Law Nº 19.550 authorizes the vote by proxy. This mandate can be established by a private instrument and the signature of the principal has to be certified either judicially, by a notary or a bank. The by-laws can determine other formalities for the granting of the proxy.

Directors, members of the supervisory board, managers and the corporation’s employees cannot represent a shareholder at the meeting.

Once his character is accredited, the proxyholder is subject to the same formalities applied to shareholders for the issuance of the vote.

Fundamental Corporate Changes:

Fundamental corporate changes may include: amendments to statutes or governing documents of the company; the authorization of additional shares; and extraordinary transactions that in effect result in the sale of the company. Please describe any other corporate activities that would be considered fundamental corporate changes in your jurisdiction.

The legislation sets forth as special cases considered as "fundamental corporate changes" the following:

transformation, extension, or renewal of the corporation;

anticipated dissolution of the corporation;

domicile change to a foreign country;

fundamental change in the object;

total or partial reintegration of the capital;

merge or spin-off of the corporation;

other amendments to the by-laws.

Are shareholders sufficiently informed of fundamental corporate changes? If so, how? Before the change or after?

The decision of adopting any of the fundamental changes enumerated in point a) corresponds to an extraordinary shareholder meeting, which must fulfill major requirements about quorum and majorities, given the relevance of these resolutions for the corporation and their effects with respect to shareholders.

Shareholders are informed before any of these changes occur by means of the call to the extraordinary meeting.

Can shareholders participate in decisions with respect to fundamental corporate changes?

As mentioned in the previous point, shareholders adopt the decisions related to fundamental changes of the corporation at the extraordinary meeting.

How do shareholders get involved in decisions involving fundamental corporate changes?

Given that the adoption of decisions involving fundamental corporate changes will affect substantially the activity of the corporation as well as shareholders’ rights, the law determines that for the adoption of such decisions all shareholders will be equal, corresponding one vote per share. Consequently, multiple voting is not applied in this case and shares with an economic preference will also have the right to vote.

Are special shareholder meetings held? If so, are special majorities required for shareholder approval of these fundamental corporate changes? If so, please indicate the types of special majorities that are required to approve the various fundamental corporate changes.

The decision related to fundamental corporate changes is adopted by an extraordinary shareholders’ meeting.

This meeting will be held, in the first call, with the presence of shareholders representing the 60% of shares with the right to vote, although the by-laws can require a superior percentage. For the second call, the meeting can be held with the attendance of shareholders representing the 30% of shares with the right to vote, unless the by-laws require a major or minor quorum.

Resolutions shall be adopted by absolute majority of the present votes, unless the by-laws requires a superior majority.

Acquisition of Corporate Control:

Are there any rules and procedures for shareholder involvement in the acquisition of corporate control or any extraordinary transactions, such as mergers and sales of substantial portions of corporate assets? If so, please describe.

Procedure applicable to binding public offering and significant stake

Procedure applicable to the acquisition of corporate control

Every individual or juridical person who intends to obtain, directly or through other individuals or juridical persons, a certain quantity of shares or options for shares which would allow them to have the control of a public corporation or to have a part of a corporation’s capital equal or superior to the 20%, still if said percentage is not enough to have the control of the corporation or if such control is already in hands of the offeror, shall respect the following procedure established by the CNV Rules:

Procedure applicable to the voluntary withdrawal of public offering of shares

In the event the voluntary withdrawal affected the shares of the issuing corporation, the Decree 677/01, in its Section 31 it is stated the voluntary withdrawal from the public offering systems, that operates when a company, whose shares are placed on the public offering and listing systems, proceeds to voluntarily withdraw from any of them, it shall follow the procedure established by the CNV and, it shall further, promote in a binding way the public offering of its shares, subscription rights, obligations convertible into shares or stock options under the terms of the following section.

The acquisition of the own shares shall be made with the net profits or with free reserves, when they are completely paid-in, and for their repurchase or disposition. The company shall evidence before the CNV it satisfies the necessary liquidity requirements and that the payment for the shares does not affect the company´s solvency. If this extremes are not evidenced, and in the cases of corporate control, the obligation herein established shall be in charge of the controlling party, which shall evidence identical extremes.

The Public Offering established in the previous paragraph shall be subject to the following conditions:

It shall be extended to all obligations convertible into shares and other securities granting the right to their subscription or acquisition.

It shall not be necessary to extend the offering to those who had voted in favor of the withdrawal at the meeting, who shall inmobilize securities until the lapsing of the acceptance term determined by the regulations of this executive order.

In the prospectus of the public offering, said circumstance shall be clearly expressed and the securities inmobilized shall be identified as well as their holders identity.

The offered price shall be a fair price, weighting for such determination, among other acceptable criteria, those individualized as follows: book value of the shares, considering a special balance sheet for the listing withdrawal, enterprise value according to criteria of discounted cash flow and/or indicators applicable to companies or comparable ventures; and liquidation value of the company. These criteria shall be taken into account jointly or separadetely and justifying its respective relevance at the moment of the offering and duly grounded in the offering prospectus. The CNV may object to the offered price when it perceives that it is not a fair price. The lack of objection to the price does not hinder the right of the shareholders to object the offered price before a judicial arbitration court.

Procedure applicable to mergers and spin-offs

The Law Nº 19.550 provides the following procedure applicable to mergers and spin-offs:

Mergers

Merging corporations shall celebrate an agreement called "previous compromise of merger" with the following contents: the reasons and objectives of the merger, merger balance sheets corresponding to each corporation prepared according to identical assets appraisal criteria, shares exchange ratio, and the blueprint of the by-laws corresponding to the new corporation or the amendments to the by-laws of the absorbent corporation.

The above mentioned agreement shall be approved by resolution of the extraordinary shareholder meetings of the merging corporations. Hard copy of the agreement and of the report of the supervisory body shall be available to shareholders 15 days prior to the shareholder meeting.

Once approved, notice with the following content shall be published during 3 days at the official government gazette and at a newspaper: the denomination and other registrar information corresponding to the merging corporations, the capital corresponding to the new corporation or the increase of capital of the absorbent corporation, the merging corporations’ assets and liabilities’ appraisal, the denomination of the new corporation and the dates of the agreement and the resolutions passed by the shareholders meetings. During the 15 days following to the last publication, creditors may oppose to the merger. The final agreement shall be executed 20 days after the fulfillment of the term conferred to creditors to oppose to the merger, in order to allow them to obtain a court order for the seizure of goods if they are not paid or guaranteed by the merging corporations.

After the completion of the above mentioned terms, the final merger agreement with the following contents shall be executed and registered with the Commercial Public Registrar: the resolutions passed by the shareholders meetings approving the merger, list of shareholders exercising their appraisal rights and the total amount of their shares’ value, list of the sums paid by the corporations to the opposing creditors and their incidence in the merger balance sheets and a consolidated balance sheet.

In public corporations, shareholders shall not be able to exercise their appraisal rights if they receive in exchange shares which are listed in a stock exchange. They may exercise the appraisal right in the case that voluntary withdrawal of public offering of those shares is approved by the shareholders meeting of the absorbent corporation or the public offering of the new corporation shares is not authorized by the CNV and the stock exchange.

Spin-off

The shareholder meeting of the splitting corporation shall approve the spin-off, the amendment of the by-laws, the by-laws of the new corporation and a spin-off balance sheet. Shareholders against this resolution may exercise their appraisal rights under the same conditions above described for the mergers cases.

The resolution passed by the shareholders meeting shall determine the share exchange ratio between the shares of the splitting corporation and the shares of the new corporation, in order to assign them to each shareholder in proportion to their holdings.

Notice with the following contents shall be published for 3 days in the public government gazette and in a newspaper: denomination and registrar information corresponding to the splitting corporation, assets and liabilities’ appraisal corresponding to the splitting corporation and the new corporation and the denomination and address of the new corporation.

Creditors have identical opposing rights to the spin-off as in mergers. Shareholders may exercise their appraisal rights in the same conditions as in mergers.

After the fulfillment of the terms to exercise opposing and appraisal rights by creditors and shareholders, the by-laws of the new corporation and amendment of the by-laws of the splitting corporation shall be disclosed to the CNV and registered with the Commerce Public Registrar.

Public corporations shall disclose all the above mentioned documents to the CNV and to the stock exchanges, which shall be published in the Official Bulletin, in the SROs’ bulletins and in newspapers.

Are those rules and procedures, as well as any available recourse, disclosed to investors? How?

Investors know the applicable proceedings and the rights that they have, which are all set forth in Law Nº 19.550, in the CNV Rules and in the stock exchanges’ regulations.

Are there any rules and procedures to provide assurance that these transactions occur at transparent prices and under fair conditions that protect the rights of all shareholders according to their class?

The purpose of the proceeding described in a) established by the CNV Rules and the Law Nº 19.550 is to ensure transparency in the prices and the protection of shareholders’ rights, specially their appraisal rights.

Are anti-takeover devices permitted, and are these devices ever used to shield management from accountability?

Mechanisms to prevent takeovers are not contemplated in the local legislation. However, the purpose of the procedures provided in the General Resolution 330 is to assure shareholders sufficient and timely background information and the advise of the board of directors regarding the convenience of tender offers in order to prevent unwanted or prejudicial take overs. With the sanction of the Decree 677/01 it has been opted for the establishment of a binding public offering procedure, with a previous character , in a partial or total way, according to its denomination, with regard to privilege the transparency in the company control market, that assures a competitive environment for this control market and, meanwhile, is trying to minimize the expenses that this type of regulation could create to the offeror or the acquirer of the control.

Are there any arrangements that might enable certain shareholders to obtain a level of control not proportionate to their equity ownership? Must these arrangements be disclosed?

Local legislation authorizes the celebration of non-company agreements that allow the obtaining of a level of non-proportional control with respect to shareholders’ equity ownership. The purpose of these agreements is to make those shareholders who are parties of them to vote in a certain way, previously accorded between the parties, in order to reach the executive control of the corporation or to prevent the dispersion of the votes to oppose to certain corporate resolutions.

The existence of said agreements must be informed to the rest of the shareholders and eventual investors, by revealing their existence in the prospectus of the issuance. If celebrated afterwards, they have to be disclosed to the CNV, to the stock exchange and to investors through the publications detailed in answer 17..

Voting Rights:

Is more than one outstanding class of voting capital stock permitted?

Yes. The by-laws can contemplate the existence of many classes of shares involving different rights. Within each type, shares involve identical rights.

According to the voting and pecuniary rights they confer, shares can be classified as follows:

1.- Ordinary Shares. They involve the right to get profits and a liquidation quota, both proportional to the part of the capital they represent. With respect to voting rights, in principle, it is one vote per ordinary share, although the by-laws can create other types involving up to 5 votes per share. This privilege in the vote is incompatible with economic preferences. Once the corporation is authorized to the public offering, it cannot longer issue privileged voting shares.

2.- Shares involving economic preferences. They enable their holder to obtain a certain part of the profits with preference to the ordinary shares and they can be obtained in a cumulative way, temporally cumulative, permanently cumulative or with an additional participation. These shares may involve the right to the preferred collection of liquidated and realized profits or of a fixed dividend –cumulative or not- more variable than ordinary shares or with a preference in the corporation’s liquidation.

With respect to the voting right, the law sets forth that they may not have the right to vote but they may allow the participation in the meetings having a voice.

3.- Participation Shares. They represent an interest in the corporate capital but does not afford its holder any voting rights. A filing for admission to the public offering system only with respect to Participation Shares is authorized. The participation shares to be issued shall comply at least with the following requirements: upon winding-up the Participation Shares shall be preferred for reimbursement of its par value over any Ordinary Shares and shall afford its holder an economic interest equal to its participation in the entity's corporate capital.

If preferred stock are permitted, do holders of this stock vote as a separate class and under what circumstances and on what matters?

In the case of shares involving an economic preference that do not confer any voting right, Law Nº 19.550 allows them to confer such vote in the following cases:

If the shareholder is in delinquency regarding the obtaining of the benefits that constitute his preference;

If the corporation is in the public offering and its authorization is suspended or cancelled for any reason, while this situation subsist;

In special cases which imply "fundamental changes in the company", enumerated in point 7 a).

These shareholders vote as a separate class when the general meeting has to adopt resolutions affecting the rights conferred by this class of shares, and the consent or ratification of this type will be given in an special meeting.

If more than one class of voting common stock is permitted, do the voting rights differ among classes and, if so, under what circumstances and on what matters?

The by-laws can contemplate the existence of many classes of shares involving different types of votes and within the same type, equal rights will be conferred.

The by-laws will also determine the matters over which each type of share will solve, e.g.: election of the board of directors’ chairman.

The extension of the voting right that each class of shares confer will be reduced to one vote per share when "fundamental changes in the company" are to be considered, in accordance with the enumeration made in point 7 a).

Within any given class, do all shareholders have the same voting rights?

Yes.

Are all investors able to obtain information about the voting rights corresponding to all classes of shares before they purchase them? If so, how?

Yes. According to the CNV Rules, the prospectus must include a description of the rights conferred by the shares to be offered to the public. They also can obtain that information from the by-laws contents.

Are changes in the voting rights corresponding to a class of shares subject to the approval of shareholders? If so, are these changes subject to the approval of all shareholders or only to those holding shares of that particular class?

When the general meeting has to adopt resolutions affecting the rights conferred by a certain class of shares, the consent or ratification of this type must be required and it will be given in an special meeting.

This special meeting can only be called and can only validly deliberate in order to decide about measures taken or to be taken by the corporation which in any way disregard of lessen the rights recognized in accordance with the class of shares involved. This meeting can only give or deny its consent to such resolutions or to ratify them if that is the case.

Describe the manner in which votes can be cast by custodians or nominees. Is approval by the beneficial owner of the shares required?

The custodian of a third party shares will be able to participate of the meeting and to exercise the voting right corresponding to those shares as any other proxyholder or representative.

The principal can commend his proxyholder with respect to the way he must vote regarding each of the issues of the agenda but he can also leave his proxyholder to vote in accordance with his own criteria.

In case the same custodian has to vote in an opposite way according to the instructions received by two or more of his principals and in relation to one or more issues of the agenda, he must request from the central depositary a special certificate of the holdings to attend the meetings which allows the exercise of the dissenting vote. The issue of said certificate will produce those holdings’ blockade.

At the time of voting and when other attendant to the meeting requires so, the custodian shall clearly and precisely individualize which shares he votes in a sense or the other one which will be recorded in the corresponding minute of the meeting.

The principal shall keep adequate records of the instructions received for each meeting.

Shareholder Meetings:

Describe the processes and procedures for public companies’ shareholder meetings. Please indicate the applicable rules, regulations and local practices.

The rules regarding formalities and proceedings of shareholders’ meetings can be found in the Corporations Law Nº 19.550, this CNV Rules and their by-laws.

The meeting must be held in accordance with certain formalities that must be respected in the aim of giving the meeting regularity and authenticity.

These formalities affect the call of the meeting, its constitution, deliberations and voting.

Through the call, shareholders are summoned to the meeting. The formalities and contents of this act are described in b).

Once they are called, the meeting is constituted to the effect of adopting decisions which will be mandatory not only for the present but also for absent shareholders. In order to ensure the authenticity and regularity of these decisions, certain formalities must be fulfilled, such as the individualization and accreditation of those participating in the meeting –communication of attendance to the meeting- the necessary amount of present persons to hold the meeting –quorum- corresponding votes per participant, etc.

Once the meeting is constituted, the meeting will develop according to the rules that ensure the order of the deliberations and the adoption of decisions. In principle, the meeting will be presided by the Chairman of the corporation who will put under consideration of the attendants each of the items that conform the agenda so as to be discussed. He will give word to those who require it and, once deliberations are over, he will put the issues under voting.

The minutes will be recorded in a special book where the deliberations and decisions adopted are transcribed. Those minutes will be signed by the chairman of the meeting and by the shareholders appointed to that end.

What are the formal requirements for calling and conducting shareholder meetings? Are there different kinds of shareholder meetings?

The shareholders’ participation in the meeting is voluntary and nor the corporation neither other shareholders can demand the presence of a shareholder in the meeting.

No fees are charged to shareholders in order to enable them to exercise their voting rights.

Are companies permitted to require personal attendance or to charge fees to vote at a shareholder meeting?

The formalities required for the call and development of the meeting are the following:

Call

Body which realizes it. Ordinary and extraordinary meetings are called by the board of directors or by a member of the supervisory body in the cases determined by the law or when any of them considers it necessary or upon shareholders representing not less than 5% of the capital requirement, when the by-laws do not fix a minor representation. In this last case, the board of directors of the member of the supervisory body will call to the meeting to be held within the following 40 days after the request was received. If the board of directors or the member of the supervisory body omits to call to the meeting, it can be done either by the regulatory agency or judicially.

Formality and Term. Meetings are called by publications for 5 days, at least 10 days and no longer than 30 days before its celebration in the legal publications gazette and in one of the newspapers of greatest circulation in the country.

Contents. The character of the meeting must be mentioned, date, time and place, agenda and any special measure established by the by-laws for the attendance of shareholders.

Second call. Simultaneous call. The meeting in second call has to be held within the following 30 days and publications will be made for 3 days, at least 8 days before it takes place. Simultaneous call can be authorized, except for corporations in the public offering which can only make a simultaneous call for ordinary meetings.

The meeting can be held without previous publication of the call when shareholders representing the totality of the capital meet and decisions are adopted unanimously by the shares involving voting rights.

Communication of attendance. Shareholders must notify their attendance to the corporation so as to be registered in the attendance book, at least 3 days before the meeting.

Attendance Book. Shareholders and representatives who attend the meeting must sign the attendance book where their domicile, identification and number of votes are credited.

Quorum. In the first call of an ordinary meeting and in order to be able to deliberate, the presence of shareholders representing the majority of the capital is required. For an extraordinary meeting, the 60% of the shares must be present, if the by-laws do not require a major representation. In second call, the ordinary meeting will be constituted whatever the number of present shares is; for extraordinary meetings, at least the 30% of the shares must be represented, unless the by-laws require a major or minor representation. This representation must be maintained during the whole meeting. Otherwise, the meeting will be suspended.

Chairmanship. The meeting will be presided by the Chairman of the board of directors or who replaces him and, if any, by the person appointed in the meeting. When called by a judge or a regulator, the meeting will be presided by the person they appoint to that end.

Deliberations and Voting. The chairman conducts the meeting and once the deliberations on each of the items of the agenda are over the meeting must express their approval, modification or rejection. Law Nº 19.550 does not set forth a specific proceeding so any way will be valid as long as the outcome of the election is unmistakable.

Majorities. For decisions to be adopted either in the ordinary or extraordinary meetings the absolute majority of the present votes is required except when the by-laws require a superior majority. In the case of an unanimous meeting, decisions must be made unanimously too.

Minutes. Everything said and voted in the meeting must be registered in a special book, including expressions, form of election and result, complete expression of the decisions, date and place of the meeting, signed by the chairman and two shareholders appointed to that end.

Different types of meetings. As a corporate body, the meeting is unique but for practical reasons it is classified as follows:

Are shareholders able to request that the company or another body, such as a court, call a shareholder meeting in case the board of directors does not do it?

In order to protect them from any act which may affect or lessen their rights, Law Nº 19.550 acknowledge to shareholders representing at least 5% of the capital, when the by-laws do not establish a minor percentage, the right to request either to the board of directors or to the supervisory board the call to a meeting, indicating the matters to be addressed. This meeting must be held no later than 40 days from the request and if the they omit to call the meeting, the regulator or the courts will do it.

Under what circumstances, if any, is it possible for shareholders to take binding action without a meeting? Are other shareholders informed of such actions?

A shareholder can initiate judicial actions individually in the following cases,

This action can only be initiated by those shareholders who did not vote for the resolution being challenged and also by absent shareholders. Those who were present and voted for the resolution will only be able to challenge it if they prove that their vote is void for a vice in the will.

This action must be initiated against the corporation within 3 months from the adoption of the resolution. If the resolution is declared null, those shareholders who had voted for its approval will have joint and several liability, as well as directors and members of the supervisory board.

The shareholder can request the courts the suspension of the resolution’s execution when there are serious reasons to do so and third parties are not affected. In this case, the shareholder shall give enough guarantee for the damage this measure could cause to the corporation.

The board of directors and the supervisory body have to inform shareholders the initiation of this actions at the shareholders meetings and through their reports. Depending on the importance of the particular case, if it is able to materially affect any placement of the issuer's shares; or the trading in terms of price or volume of such shares, the board of directors or the supervisory body must disclose it to the CNV and the stock exchange and shall be published in the SRO’s bulletin and in a newspaper in order to inform it to investors.

In listed companies, the liability action foreseen in section 276 of Act 19.550 and its amending regulations, when it corresponds to be exercised by shareholders individually, may be exercised to claim in the company ´s benefit the compensation for total or partial damages suffered by the company or to claim the compensation for partial damages indirectly suffered by the shareholder proportionally to his holding, in which case the compensation shall become part of its equity.

When the claim id for the total of the damages alleged to be suffered by the company, the defendant may opt to settle the claim and acquiesce to the payment of the claiming shareholders of the compensation amount for the indirect damages to be determined as being suffered by them, in proportion to their shareholdings.

Dispute Resolution:

What legal recourse is available to shareholders if their rights are violated?

Shareholders can initiate judicial actions and can also request the intervention of the regulatory agency in order to regularize the functioning of the corporate tiers and their rights are not violated.

Are there non-adversarial mechanisms to solve disputes between shareholders and the company or between themselves, e.g., commercial arbitration panels, stock exchange mediation, etc., or is civil litigation the only alternative?

Law Nº 19.550 does not contemplate the possibility of mandatory non-adversarial proceedings in order to solve disputes between shareholders or between them and the corporation. But the by-laws can set forth that disputes will be solved by arbitration panels which will ensure more celerity than a judicial litigation.

Also non-company agreements can be celebrated but only as long as they do not affect the faculties corresponding to the meeting for the adoption of resolutions in the person of the mediator or arbitration panel.

As the Decree 677/01 of Transparency was enacted, in its section 38 it is stated that SROs shall create a permanent arbitration court to which all entities whose shares, negotiable securities, forward contracts, future contracts and options are listed or negotiated in their scope shall be subject in a binding way in their relations with the shareholders and investors. All actions derived from Act 19.550 and amending regulations shall be comprised in the arbitration jurisdiction, even claims for objecting resolutions of corporate bodies and liability actions against it members or other shareholders, as well as nullity actions of clauses of the by-laws or regulations. In all cases, regulations shall set aside the right of shareholders and investors in conflict with the entity or the agent, to opt for resorting to the competent legal courts.

Insider Trading:

Is insider trading prohibited? If so, are the prohibitions contained in the securities laws or under other types of statutes?

Insider trading is explicitly forbidden by the CNV Rules and in the new Decree 677/01 of the Executive Branch of the federal government "of transparency and best practices of capital markets" being considered a harmful act able to damage investors’ confidence.

What are the key provisions of the insider trading prohibitions?

The CNV Rules establish that the following persons will not be able to,

to use any privileged information in order to obtain for themselves or for others advantages arising either from the purchase or sale of securities or from any other transaction related to the public offering.

In the cases of violation of the prohibition established in the first paragraph, the positive price difference obtained by the persons comprised in the previous paragraph from any purchase and sale or from any sale and purchase within a period of 6 months, regarding any negotiable security of the issuers to whom they are registered, shall correspond to the issuer and shall be recoverable by him, without prejudice of the penalties that may correspond to the defaulting party.

If the issuer does not bring the corresponding action or if he does not do so within 60 days after being noticed to do so, or he does not duly initiate the action after the notice, said action may be instituted by any shareholder.

The statute of limitation for recuperation of short swing profits shall be 3 years as from the proscribed transaction.

Directly or indirectly engage, in any of the following activities:

preparing, facilitating, participating or entering into any transaction whatsoever in the market, in relation to the securities concerning such information;

giving such information to others, except in the normal performance of their work, profession, office or duties;

recommending others to purchase or dispose of securities, or to cause others to purchase or surrender such securities, based on such information.

Who is subject to insider trading prohibitions?

Any directors, CEOs, managers, members of the supervisory board, controlling body members, controlling shareholders and professionals involved in an entity authorized to make public offering of negotiable securities or a person making a bid to purchase or swap securities with regard to an entity authorized to make public offering.

Agents and intermediaries in the public offering, including financial trustees and managers and depositories of investment funds.

Any person who, by reason of its office, activity, position or relation has access to such agency's information; due to its importance, may affect the underwriting or negotiations of the negotiable securities in an authorized public offering or forward contracts and options, shall be strictly confidential and shall refrain from negotiating until said information is publicly disclosed.

Any directors, officers or employees of a risk rating institution;

any directors, officers or employees of a private control bodies, including any self-regulated organizations or depositary agencies;

any officers or employees of a public control agency, including the Commission;

any person who by reason of a temporary or accidental relationship with the issuer, or any social or family relationship to a shareholder participating in the controlling group, or with any of the above parties, may have access to such information.

How are these insider trading prohibitions enforced? Can actions be bought by civil, administrative and criminal authorities?

Violations to the prohibitions imposed by the CNV Rules are subject to investigation and disciplinary proceedings of the CNV, according to the provisions of Law Nº 17.811 of Public Offering of Securities. Fines can be applied if the violation is proved. Appeal for reversal of a resolution on disciplinary sanctions may be lodged with the market a judicial appeal may be taken to the Federal Court of Appeals for Commercial Matters.

This proceedings do not affect the possibility of initiating judicial actions on the part of the corporation or shareholders in order to obtain due reparation.

Conflict of Interest:

Is self-dealing by the board and executives prohibited or subject to certain legal safeguards? Please explain.

There are some rules in Law Nº 19.550 tending to avoid or to solve conflicts that might have place between the corporation and the members of the board of directors.

A basic principle tending to protect the shareholder determines the existence of legal measures and remedies tending to prevent directors’ misconduct.

A member of the Board can celebrate contracts with the corporate, subject to certain formalities:

When the contract is celebrated without the previous authorization of the board or of the supervisory board, it must be ratified by the meeting and in case it is not, the contract will be null and directors and members of the supervisory board will have joint liability.

In the new Decree 677/01 it is established that companies that are allowed to make public offering, the acts or agreements that the company enters into with a related party and involving a relevant amount, shall fulfill the following procedure.

Related party shall be the following persons relates to the issuing company:

-the directors, members of the control body or members of the supervisory council of the issuing company; individuals or artificial persons having control or a significant stake; another company controlled by the same controlling company; ascendants, descendants, spouses, brothers, sisters of any of the said persons. These criteria will be taken into consideration jointly or separately and with a justification of its importance at the moment that the offer has been elaborated and rightly founded in the prospectus. It should count with the professional opinion of the fiscal committee and the audit committee.

The CNV is allowed to objet the price that was offered by considering that it was not equitable. The price ´s lack of objection does not destroy shareholder´s right to go to Court

Are members of the board and executives required to disclose any material interests in transactions or matters affecting the company? If so, please discuss how and when this information is made available to shareholders.

For opposite interest is meant the corporation’s interest which is incompatible with the individual, direct or indirect, interest of the member of the board.

Law Nº 19.550 establishes that given this case the director shall inform it to the board and to the supervisory board and shall not participate of the deliberations regarding that specific matter. In case he violates this prescription, he shall be liable for the damage he may cause.

Moreover, it is also forbidden to the member of the board to participate either for his own account or for third parties’ account, in activities competing with those of the corporation, except he counts on an express authorization from the meeting.

Also, shareholders have the obligation to abstain to vote resolutions passed by the shareholders meeting regarding the approval of a transaction in which he directly or indirectly has an interest opposed to the corporation’s. The shareholder shall be liable for the damage he may cause to the corporation if he, in violation of this rule, votes the approval of the transaction, and such approval could be adopted because of his vote.

The Decree 677/01, in its section 8 states that directors, administrators and auditors of issuers shall place the corporate interests of the issuer where they work and the common interest of the shareholders above any other interest; refrain from obtaining a personal benefit from the issuer other than the compensation paid for those functions; organize and implement preventive systems and mechanisms to protect corporate interests, reducing the risk of corporate interests, either permanent or temporary, in the personal relationship with the issuer or with persons related to the issuer.. This duty specifically refers to activities competing with the issuer, the use or imposition of a lien on corporate assets, the determination of compensations or proposals related thereto, the use of non public information, the use of business opportunities for their own benefit or for the benefit of third parties and, in general, any situation that may generate a conflict of interests affecting the interests.

For example:

Is the remuneration of directors and executives disclosed to investors?

Directors’ remuneration shall be fixed by the shareholders meeting or by the surveillance council and shall not exceed the 25% of the profits. When profits are not distributed the maximum amount will be 5% and this percentage will increase in proportion to the increment of the profits distribution.

With respect to executives, since they are subject to labor law, the meeting is informed about their remuneration by means of the information received regarding the administration of the corporation.

According to the Decree 677/01, the companies authorized to make a public offering of their shares may remunerate their directors with executive or technical-administrative functions, as well as the managers, with stock options of the same company. In these cases, the meeting shall establish the price of the options and of the shares to which they are entitled, and the value to be computed for the remuneration.

Is the relationship between any of the directors and a controlling shareholder disclosed to investors?

According to the CNV General Resolutions 330 and 340, the relationship existing between the board or its members with the controlling shareholder must be informed to the meeting.

Are officers, directors and owners of a certain amount or percentage of shares required to disclose their holdings and trading activities?

According to the CNV Rules, directors, managers, members of the supervisory board and of the surveillance council, controlling shareholders, directors and members of the supervisory board of a controlling, controlled and linked corporations involved in the public offering shall inform the following:

List of directors and members of the supervisory board and of the surveillance council of the issuer, controlling, controlled and linked corporations, indicating the term of their mandate.

Number and name of the entity, agent, depositary and subaccounts where the mentioned securities are.

These persons shall inform the CNV the changes produced in their holdings or options of purchase, explicitly mentioning date, value and other details of the transactions. Those who have finished their mandates shall present identical information during the following 6 months.

The required information shall be updated annually, even if there were no changes in the holdings or options, before March 1 of each year.

Can a stakeholder (employees, creditors and suppliers) participate in corporate governance, e.g., employee representation on boards, employee stock ownership plans, creditor involvement via insolvency proceedings?

Within the legal frame of Law Nº 23.696 of the Administrative Reform and Law Nº 23.697 of Economic Emergency, during the last decade state enterprises were privatized in Argentina. Among the many mechanisms used to transfer these enterprises to the private sector, the ¨trust¨ was used for the transfer of part of their capital to the employees, users and producers of raw material industrialized in these privatized enterprises, under the name of the Participating Property Program.

The percentage of shares destined to this program constitutes a special type to which certain rights correspond like, among others, the right to participate in the corporation’s government by means of the appointment of a certain number of members of the board of directors as well as of the supervisory board. This is one of the measures adopted among others in order to protect the interest of this group of shareholders which is a minority.

This modality of participation finds its grounds in the constitutional guarantee which sets forth the workers right to participate in the corporations’ profits, with control of the production and collaboration in the conduction.

Where stakeholder interests are protected by law (e.g., labor law, contract law, insolvency law), do stakeholders have the opportunity to obtain effective redress for violation of their rights?

Legal actions corresponding to shareholders of the Participated Property Programs, holders of a class of shares, are those set forth in Law Nº 19.550 for every shareholder (see point 11. E)). There are no special or exclusive legal actions for them.

Indicate which of the following items is subject to disclosure, as well as to whom the disclosure is made. Please describe how and when this information is made available to shareholders.

The financial and operating results of the company;

Company objectives;

Major share ownership and voting rights;

Members of the board and key executives, and their remuneration;

Material foreseeable risk factors;

Material issues regarding employees and other stakeholders; and

Governance structures and policies.

The Law Nº 19.550 and the regulations issued by the CNV indicate which information regarding public corporations shall be disclosed and made available to the shareholders and to investors.

The Law Nº 19.550 provides that both the board of directors and the supervisory body shall periodically inform the shareholders about the ongoing of corporate business, as described in item 4. (preparation of financial statements, annual reports of the board and the supervisory body, etc.). Shareholders are aware of the rules governing the corporate structure and functioning and their rights and obligations which are contained in the corporate by-laws.

The CNV regulations provide a wide disclosure regime applicable to public corporations, which includes both periodic and sensitive information considered as relevant for shareholders and investors.

According to the Decree 677/01, the people participating or intervening in public offering have a duty to inform self-regulated entities and the public: they shall simultaneously send communications to those SRO entities where the authorized intermediaries or said negotiable securities are registered. SROs shall immediately publish the communications in information gazettes or any other means ensuring their wide disclosure.

Periodical Reporting System

Public corporations shall file the following documents with the CNV:

- On an annual basis: the board of directors’ annual report, the financial statements, a report based on the information contained in the consolidated financial statements -if required-,the supervisory board’s annual report and the auditor’s report on the financial statements.

- On quarterly basis: financial statements for interim periods, a report based on the information contained in the consolidated financial statements -if required-, and the auditor’s report on the financial statements for interim periods.

Identical information shall be filed with the SROs, in accordance with their regulations, and published in the SRO’s bulletin.

Disclosure of material information

Any of the members of the board of directors or member of the supervisory body of a public corporation shall report to the CNV any material event or condition that may materially affect any placement of the issuer’s shares or the trading in term of price or volume of such shares. The CNV regulations indicated a non-exhaustive list of material events, such as change of corporate purpose, resignation or removal of a director or member of the supervisory body, Change in the issuers’ equity ownership structure involving the formation of controlling groups, any shareholders’ syndication agreement, the decision on any extraordinary investment or any financial or trading transaction material enough to have an impact on the condition of the issuer, etc..

This information shall also be disclosed to the SROs and immediately published in the SRO’s bulletin.

Information contained in the prospectus

Public corporations applying for an authorization to be admitted to the public offering or a public offering authorization for a given shares’ subscription, shall publish a prospectus which is the basic document for the public offering of securities. Once approved, the prospectus shall be printed in a sufficient number of copies so as to cover any demand by possibly interested persons and published in the SRO’s bulletin whereon the shares shall be listed. Meetings may be held to inform about the issuer and the securities with respect to which the application has been filed.

The prospectus shall contain the information set forth by the CNV’s rules, such as the terms of the issue and its purpose, summary comparative and consolidated accounting and financial information for the three last fiscal years, background information on the issuer –general description, corporation’s history, its structure and organization, market where it carries on its business, plants, factories and business units, summary information on each business area, description of the corporation’s prospects for the next 2 years, dispersion of shares among the public, shareholders holding over 5% of the stocks or voting rights, shareholders’ agreements in respect of the government and the management of the corporation, information on members of the board of directors, managers, employees, advisors and members of the supervisory body –identity, holdings in the corporation, other boards in which the director is a member, global compensation-, average number of employees and distribution among the different corporate areas, percentage of capital stock owned by the employees, dividend policy, description of shares to be issued –voting rights, preemptive rights, etc.-.

According to the new Decree 677/01, the issuers of securities, jointly with the members of the administration and control bodies, the latter for matters for which they are competent, and in its case, the offerors of securities as regards information related to them, and the persons signing the prospectus for the issue of securities in public offering, shall be liable for all information included in the prospectus registered by the before the CNV. The intermediary entities and agents in the market taking part as arranger or underwriters of a public offering for the sale or purchase of securities shall diligently revise the information contained in the offering prospectus.

Specific reporting systems

The CNV’s rules also provide specific reporting systems for specific cases, such as the voluntary withdrawal of public offering of shares, tender offers, etc..

Financial Statements and Audits:

Are financial statements prepared, audited and presented in accordance with high quality, internationally acceptable standards of accounting and auditing? Are comparable high quality, internationally acceptable standards applicable to non-financial disclosures?

Financial statements must be prepared, audited and presented according to the International Accounting Standards (IAC) and Technical Resolutions issued by the Argentine Federation of Councils of Accountants.

Non-financial information shall be disclosed according to the regulations issued by the CNV. Also, in a near future, the Commission by a General Resolution will adopt the IOSCO international disclosure standards for cross-border offerings and initial listings by foreign issuers.

As it was established in the Decree 677/01, in section 64, only as information, without prejudice of the obligations applicable to each company, the CNV in each particular case may authorize the controlling company to exclusively diseminate consolidated financial statements when they describe in a clear and truthful way and as accurately as possible the situation and information of the company with the authorized public offering.

Is the audit conducted by an independent auditor in order to provide an external and objective assurance on the way in which financial statements have been prepared and presented?

Yes.

How are external auditors appointed and removed?

The auditor is appointed and removed by the shareholders’ ordinary meeting, which also fixes his remuneration.

Are there any regulations that establish auditing standards and ensure auditors’ independence and responsible professional conduct?

The Technical Resolution Nº 7 issued by the Argentine Federation of Councils of Accountants and the General Resolution Nº 340 issued by the CNV establish auditing standards that ensure auditors’ independence and the professional liability.

How is "auditors’ independence" defined?

The "auditor’s independence" is define in the referred Technical Resolution Nº 7 and General Resolution Nº 340. The auditor shall not be considered independent in the following situations:

In the decree 677/01 it is stated that the shareholder´s general meeting, when approving the financial statements, shall appoint independent chartered accountants to be in charge of the external audit corresponding to the new fiscal year pursuant to the criteria established by the regulations of the CNV.

Describe the channels through which relevant information is disseminated to users, e.g., filing of reports via electronic filing and data retrieval systems, disclosure of material information via internet?

According to the rules and regulations issued by the Securities and Exchange Commission and the SROs, relevant information shall be disclosed to investors by its publication in different media, such as newspapers, SRO’s bulletins and the Official Bulletin -an official government publication-.

Other mechanism to disseminate relevant information is to make available to investors hard copies of the documentation at the corporation’s office or at the SROs’ offices.

At present, the use of Internet to disseminate corporate information is not widespread.

Comment on aspects in your current disclosure regime that you would like to see reformed, indicating whether there is any support for such reforms internally and the main barriers that you see for implementing change.

The current disclosure regime is complete and sufficient. Among the changes that would be desirable to introduce, can be pointed out the inclusion of the obligation to disclose any disciplinary sanctions applied by the Council of Accountants and other regulators to auditors on the grounds of breaches to their ethical and professional duties; and the obligation to disclose supplementary information with the detail of the remuneration distribution among the members of the board of directors and the existence of special committees within the board.

Who nominates, elects and removes the members of the board?

The election of the members of the board correspond to:

The shareholders meeting. The election of the members of the board is an attribution of the annual shareholders meeting. They are elected by the majority of votes, either in first or second call.

The surveillance council. The surveillance council is an optional corporate tier composed of shareholders elected by the shareholders meeting. As one of its attributions, this council elects the members of the board, corresponding to the shareholders meeting the removal of any of those elected members. The by-laws will determine the majorities for this election. The mechanisms of cumulative vote and election by classes of shares are not applicable.

The supervisory board. The law provides that the members of the board are elected by the supervisory board to fill the vacancy –produced under extraordinary circumstances- of any of the positions of the board and only if the by-laws do not provide a different mechanism for the election of the new member. The directors elected by the supervisory board shall hold office until the following annual shareholders’ meeting.

The removal of the members of the board can only be decided by the shareholders’ ordinary meeting, adopted by majority, either in first or second call. This majority cannot be reduced or increased. The members of the board can be removed ad nutum (without a motive or cause).

Do shareholders have cumulative voting rights? If so, please describe.

Shareholders do have cumulative voting rights. Several mechanisms provided by Law Nº 19.550 have the purpose of protecting minority shareholders, such as the election of the members of the board of directors by different categories or classes of shares and through cumulative voting.

The cumulative voting mechanism consists in multiplying the number of votes corresponding to each shareholder by the number of positions to be filled, distributing those votes among the different candidates in the most convenient way, which is the one that will give the shareholder more representation, which shall not exceed the third part or less of the positions to be filled.

Proceedings. Considering that the board is composed of more than three members –given that the election through cumulative vote corresponds only to a third part of the positions to be filled- , cumulative voting proceedings are the following:

The shareholder or shareholders who want to exercise the right of cumulative vote shall give notice to the corporation at least 3 working days prior to the shareholders meeting, indicating the shares that will use to vote through this system. The notice of at least one shareholder enables all shareholders to exercise their cumulative voting rights and this has to be informed by the chairman to shareholders attending the meeting.

Before casting votes, the chairman shall inform the number of votes corresponding to each present shareholder.

Two thirds of the positions of the board are filled by the candidates elected by majority through the "list" system. Shares used to vote for the candidates elected by the list system cannot participate of the election through cumulative voting.

Regarding the third part of positions to be filled by the cumulative voting system, each shareholder will have a number of votes equal to multiplying the number of positions by de number of votes attached to the shares held by them.

Each shareholder can accumulate or distribute the votes among the different candidates. Votes are computed by candidate.

If two or more candidates elected by the list system are tied, shareholders who choose this system have to cast their votes again; but if the tied candidates are those elected through cumulative voting, shareholders that obtained the election of their candidates will not participate in that voting.

Minority shareholders will have more chances to be represented in the board of directors if it has a larger number of members.

The cumulative vote mechanism cannot be prohibited or regulated in such a way that it obstructs its own exercise. The by-laws can regulate its exercise in order to ensure that all shareholders are treated equally.

If the members of the board are elected by classes of shares and in the case that they are elected by the surveillance council, the cumulative voting system is not applicable.

How are vacancies on the board filled?

The law provides that the shareholders’ meeting have to elect substitutes to fill vacancies on the board of directors, as a mechanism to preserve the integrity and regular functioning of the board. The nomination of substitutes is optional for public corporations given that the supervisory body may nominate the new member that will hold office until the following shareholders’ annual meeting.

Are the election and identity of the members of the board disclosed to the securities regulator and the stock exchange, and is this information publicly available? If so, how?

The identity of the members of the board of directors is disclosed to the Securities and Exchange Commission by written notice containing detailed personal information and indicating whether they are directors of other corporations.

This information shall be registered with the Commercial Public Registrar, where shall be available to the public.

Disclosure is also made with the SROs. Besides, identity and professional backgrounds of the members are part of the information contained in the prospectus.

What are the requirements for serving as a member of the board?

Law Nº 19.550 does not provide specific requirements to be a member of the board of directors, except for a guarantee, which type and amount is determined in the by-laws provisions.

The law provides a general standard regarding the ability to be member of the board and a number of "prohibitions and incompatibilities", detailed in II). According to the provisions of the Commercial and Civil Codes, the members of the board have to be individuals of age -if under age, they have to be authorized to practice commerce- and must not be included in any of the prohibitions and incompatibilities provided by Law Nº 19.550. It is not a requirement to be a shareholder or an argentine citizen. However, the by-laws can determine specific requirements to be fulfilled by the director.

Can foreigners or non-residents be board members?

Foreigners and non-residents can be members of the board of directors as nationality is not a requirement.

However, the majority of the members have to be resident Argentineans and all of them have to settle a domicile where notices and communications referred to the board’s activities will be sent.

What are the prohibitions on being a board member?

The following cannot be members of the board of directors:

Those who cannot practice commerce;

The bankrupts, up to 5 years after their rehabilitation;

Those sentenced to abstain from public office; for robbery, fraud, corruption, drawing of checks with insufficient provision of funds and felonies against the public faith and for felonies related to the incorporation, management and liquidation of corporations. In all these cases, up to 10 years after the completion of the conviction;

public officers whose duties have relation with the corporation’s business, up to 2 years after retiring from the public service.

The by-laws may provide other prohibitions and incompatibilities to be director.

What is the maximum term of office for members of the board? Are classes of board members permitted? If so, describe the circumstances and rights of each class.

The maximum term of office of the members of the board is three years. If they are elected by the surveillance council, the term of office can be extended up to five years. In both cases, the member of the board have to hold office until the new member is elected by the shareholders’ meeting , even if the legal term is expired.

If there are different classes or categories of shares, the by-laws can provide that each class has the right to elect one or more members of the board of directors and regulate the proceedings applicable to the election.

Are there any legal provisions requiring independent members of the board? If so, how is "independent" defined?

The Law Nº 19.550 does not require that any of the members of the board has to be independent. General Resolutions Nº 330 and 340 issued by the Securities and Exchange Commission define when a director shall be considered independent.

In order to inform investors the type of relationship existing between the controlling shareholders and the members of the board, which is an essential element for the transparency and safety of markets and the corporation business, the above mentioned General Resolutions provide the following:

General Resolution Nº 330. The companies deciding to retire from the public offering system, no less than 15 working days prior to the meeting considering this issue, the members of the board have to inform the independent or non-independent condition of the directors. It is considered that the member of the board is not independent in the following cases:

If the director is also a director of, or depends on, the controlling shareholder or of any company controlled by or related to the controlling shareholder,

when the circumstances mentioned in 1) exist with relation to a corporation with which the issuer, its holding corporation or companies controlled by or related to, have shareholders in common,

when the director has professional relations with, or is a member of any professional association having professional relations with, or receiving remuneration or fees from the issuer or its holding corporation or companies controlled by or related to the latter,

when some of the circumstances mentioned in 3) exist with respect to a corporation with which the issuer, or its holding company, or companies controlled by, or related to the issuer have shareholders in common.

General Resolution Nº 340. When the shareholdes’ meeting elects the members of the board, shareholders nominating the candidates must inform if they are independent or not, according to the definitions of General Resolution Nº 330. This information must be included in the prospectus.

Are members of the board compensated? If so, how and subject to what approvals?

The remuneration of the members of the board can be provided in the by-laws. If not, it will be determined either by the shareholders’ meeting or the surveillance council.

The remuneration’s maximum amount –including salaries and other fees for the rendering of professional or technical services by directors-, cannot exceed the 25% of the incomes.

This amount will be limited to 5% when dividends are not distributed to shareholders and will increase in proportion to the distribution, up to the limit of 25% when the total amount of the incomes is distributed.

In case there are no incomes or if they are significantly reduced, the shareholders’ meeting can decide to exceed the limit of 25% in order to remunerate directors who have rendered special and professional or technical services to the corporation.

Describe the typical structure and functioning of the board, e.g., calling of the meetings, quorum, majorities, other formal requirements.

Typical structure of the board of directors. The composition and functioning of the board have to be provided in the by-laws. However, Law Nº 19.550 provides the following rules regarding its structure and functioning:

Composition. In public corporations, the board of directors shall be composed of three members minimum. The chairman will be one of the members and can be elected by the shareholders’ meeting, by a class of shares or by the other members of the board.

Meetings

Periodicity. The meetings will take place at least once every 3 months, unless the by-laws provide a major frequency. If needed, special meetings can be called by any of the members at any time.

Notice. Agenda. Meetings are called by the chairman by written notice distributed to all the members of the board and the members of the supervisory body -who have the right to participate in these meetings without the right to vote- setting out the time and place of the meeting and the agenda, 5 working days prior to the date of the meeting.

Quorum. Majorities. Voting. In order to hold the meeting a quorum of the majority of the members have to be present and resolutions are adopted by majority of directors attending the meeting.

The members have to participate of the meetings in person, as the position is on personal basis and not delegable. They cannot cast their vote by mail or electronically but the member who does not attend the meeting can cast his vote in writing through other present member.

Since the members of the board have the right to be informed of the issues pertaining to the corporation’s business and the right to express their opinion regarding the different issues of the agenda, the chairman has to moderate the debate and control the voting process to pass a resolution. Each member can cast his vote in an affirmative or negative sense, or abstain.

Minutes. Minutes of the discussion, voting and resolutions corresponding to the different items of the agenda of each meeting have to be registered in a special book. The contents of the minutes are very important because according to the vote of each director in the adoption of a resolution, they will be liable or not if it causes a damage to the shareholders, to the corporation or to a third party.

Functioning of the Board:

Describe the key functions of the board. In particular, please indicate whether the board is responsible for the following functions:

Reviewing and guiding corporate strategy, major plans of action, risk policy, annual budgets and business plans; setting performance objectives; monitoring implementation and corporate performance; and overseeing major capital expenditures, acquisitions and divestitures.

Selecting, compensating, monitoring and, when necessary, replacing key executives and overseeing succession planning.

Reviewing key executive and board remuneration, and ensuring a formal and transparent board nomination process.

Monitoring and managing potential conflicts of interest of management, board members and shareholders, including misuse of corporate assets and abuse in related party transactions.

Ensuring integrity of the corporation’s accounting and financial reporting systems, including the independent audit, and that appropriate systems of control are in place, in particular, systems for monitoring risk, financial control, and compliance with the law.

Monitoring the effectiveness of the governance practices under which it operates and making changes as needed.

Overseeing the process of disclosure and communications.

The key functions of the board of directors are: to manage the corporation’s business, to carry out the resolutions passed by the shareholders’ meeting and to fulfil other legal and statutory obligations.

The law provides a flexible and dynamic scheme, distributing the power of management and control among the board of directors and the shareholders’ meeting.

Regarding the attributions and duties detailed in the question, only those under i), iv) –even though the board does not intervene as an arbitrator-, vi) and vii) are part of the functions corresponding to the board. Duties under ii) and iii) correspond to the shareholders meeting and the duty under v) corresponds to the supervisory board.

What standards must the board follow when it makes decisions on corporate issues? What duties do board members owe to the company and its shareholders, e.g., loyalty, due care, foregoing corporate opportunities?

The board is responsible for conducting the corporation business according to the local legal framework. The by-laws contains specific and particular rules applicable to the structure and functioning of the board of directors, and it can be provided specific standards to be followed to make decisions regarding corporate issues.

The law provides two general standards and duties that must follow and accomplish the members of the board towards the corporation and the shareholders: 1) they have to be loyal and, 2) they have to conduct the corporate business with a good businessman diligence. The board’s activities must consist in the tidy and wise management of the corporation’s business, taking care of the corporate interests over the personal interest of the members.

Loyalty: loyalty means the constant and faithful adherence and compliance of the by-laws, the law and resolutions passed by the shareholders’ meeting. This duty has the purpose of protecting the corporate interests which are managed by the board and to avoid the confusion among the corporate interests and those corresponding to the members of the board or third parties.

"A good businessman diligence": the director needs count on professional skills, applicable to the markets, the commercial and industrial activity, finances, etc.. This "know-how" must guide its performance in order to optimize his business decisions and their results to benefit the corporation.

This loyalty standard is contained in Law Nº 19.550 that provides that the members of the board cannot perform, directly or indirectly, commercial activities competing with the corporation, except if they are expressly authorized by the shareholders’ meeting.

The intensity of this duty decreases if a conflict of interests between the member of the board and the corporation takes place. In this case, the law provides that the director has to inform this situation to the board and to the supervisory body and must abstain when a resolution regarding this issue is adopted by the board.

Are there any sanctions applicable to the members of the board for a breach in the performance of their duties? If so, please enumerate them, indicating the remedies for violations.

In case of a misconduct on the part of the board of directors, the members have joint and several liability towards the corporation, the shareholders and third parties.

Each member’s liability will be determined on a personal basis when directors, according to the by-laws or resolutions passed by the shareholders’ meeting, have in charge individual and specific duties.

The remedy to this breaches is the removal of the member of the board, decided by the shareholders’ meeting.

The amount of the compensation of the damage is determined by the courts, if proven that damage was inflicted to the shareholder, to a third party or to the corporation because of the misconduct of the members of the board.

Do shareholders have any legal recourse available to them to make members of the board accountable for any breach of their duties?

The corporation, shareholders and third parties have legal action for the breach of the duties of the members of the board.

The corporate legal action against the members of the board is filed as a consequence of a resolution passed by the shareholders’ meeting which may also determine their removal. If this legal action is not filed within 3 months after the date of the adoption of the resolution, any shareholder can sue the directors in representation of the corporation.

Shareholders and third parties always keep their personal legal action against the members of the board, independently from the filing of the corporate legal action and will not generate the removal of the directors who will remain in office until the shareholders’ meeting adopts a different decision.

Is the board permitted to obtain and rely upon disinterested professional advice - from accountants, investment advisers, appraisers - in order to determine whether a transaction is proper and fair to the company and shareholders?

In case that independent professional advice is necessary in order to determine whether a transaction is proper and fair to the company and to the shareholders, the board can require it and rely its decision upon it.

Besides, if there’s any doubt regarding the fairness or convenience of a transaction, the board can submit this issue to the shareholders’ meeting for its consideration and resolution.

Are decisions by the board entitled to a presumption of "business judgment," which shields the decisions from shareholder challenge? If so, under what circumstances and conditions?

Resolutions passed by the board of directors are not entitled to a presumption of "business diligence". Having a "good-businessman diligence" is a duty to be fulfilled by each of the members of the board.

The duties of the board do not ensure a good business result and it is possible that even though the members of the board conducted the corporate business with a "good businessman diligence", results are not successful.

The shareholders’ meeting considers and approves or disapproves the business decisions adopted by the board, and no presumption shields the board’s decisions from shareholders’ resolutions.

What duties does the board owe to shareholders where it makes a decision that may affect different shareholder groups differently?

As described in b), the board has to conduct the corporate business in compliance with the legal framework. This is the only generic criteria provided by the law, but the by-laws can set forth more specific standards applicable to the board’s activities and specific criteria applicable to the adoption of decisions that may affect different shareholder groups in a different manner.

Board Independence:

Are there any requirements that the board assign non-executive board members capable of exercising independent judgment to tasks where there is a potential conflict of interest? If so, under what circumstances?

Law Nº 19.550 provides rules applicable to solve any potential conflict of interests between the corporation and the members of the board, as a consequence of the celebration of contracts between the member and the corporation, of the concurrent commercial activity of the member and any other situation involving a conflict of interests with the corporation.

The criteria followed by the law is that the board of directors will make a decision regarding this conflictive situations. And, according to the importance or difficulty of the matter, the board can submit the issue to the shareholders’ meeting for its resolution.

However, the by-laws can provide specific proceedings to solve this kind of conflicts.

Can specific committees be created within the board? If so, describe their composition and responsibilities. Are there any requirements that some committees be composed solely, or at least primarily, of independent board members?

The by-laws may provide the existence of a special committee called "executive committee". This committee composed exclusively of directors, is in charge solely of current corporate business activities and the board of directors supervises its performance.

The duties and liability of the directors non-members of the executive committee are not diminished and they are responsible for all the decisions adopted by this committee.

The by-laws rules the structure and functioning of the executive committee –quorum, majorities, etc.- and its duties are determined by the shareholders. As all the corporate tiers, they have to keep a special minutes book.

The law does not require that the executive committee has to be composed exclusively or with a majority of independent directors, but this requirement can be provided by the by-laws.

Out of the executive committee which is the only one regulated by the Law Nº 19.550, other special committees may be created through statutory provisions.

Are there any limitations on the number of board positions that an individual can hold?

The law does not limit the number of board positions that an individual can hold. The limitation can be determined by the by-laws that rule the composition and functioning of the board, based on practical and functional conveniences.

Describe how and when board members can gain access to relevant information necessary to make decisions on corporate issues.

Members of the board of directors have access to all the information referred to the corporate business. Generally, unless the by-laws provide specific rules related to the proceedings applicable to grant access to corporate information, the relevant information necessary to make decisions on corporate issues is disclosed to the members at the board meetings, distributing hard copies of the documents and through the presentations of the CEOs or other persons attending the meeting to explain a specific topic. Hard copies of the documents are often distributed to the members before the meeting, together with its notice, or they are made available to directors at the corporation’s office.

Boards structures and procedures vary among COSRA members’ jurisdictions. Some countries have two-tier boards that separate the supervisory and management functions in different bodies. Such systems typically have a "supervisory board" composed of members that are not executives of the company or part of the company's management staff. Other countries have a unitary board structure that combines executive and non-executive board members.

The purpose of this Section is to provide detail about the different legal provisions of the participating countries regarding this issue. Accordingly if, in your jurisdiction, has a two-tier board system is permitted or required, please answer the following questions. Also, please answer the questions contained in Section VI.

Does the corporate law of your jurisdiction require a supervisory board or person that is separate both from the board of directors? Is such a supervisory board permitted?

Law Nº 19.550 requires public corporations to have a supervisory board composed of an uneven number of members.

The key function of this tier is to control the safety, fairness and order of the corporate activities and business and, specially, to control all the corporate information regarding its financial, economic and legal aspects.

If so, please indicate the following:

Substantial differences between the supervisory board and the board of directors, the shareholders meetings and the auditor;

The main differences between the supervisory board, the board of directors, the shareholders meeting and the auditor are the following:

The shareholders’ meeting is the decision-making tier composed of all shareholders, which passes resolutions in compliance with the legal and statutory provisions, which are binding for the corporation and the shareholders. Its duties and composition differ from the supervisory board, which key function is to control the legacy of the corporate activity, including the shareholders’ meeting.

The board of directors is the management tier that conducts the corporation’s business and carries out the resolutions passed by the shareholders’ meeting and to fulfil other legal and statutory obligations. Its composition and duties differ from those corresponding to the supervisory board, which controls the legal compliance of the performance of the board of directors. The supervisory board is an independent tier and its responsibility lies in control and not management.

The external auditor has to pass judgment on the financial statements prepared by the board of directors. He prepares a report based on a previous auditing work and passes his judgement (favorable with no observations, favorable with observations or adverse) or he abstains from passing judgment related to the information contained in the financial statements. Compared to the auditor, the supervisory board has a wider and more complex array of duties that also includes the revision of financial statements.

Supervisory board’s duties and powers that overlap with those of the board of directors, the shareholders meetings and the auditor;

As described above, the board of directors, the supervisory board and the shareholders’ meeting are tiers with specific and different attributions and duties. Those corresponding to the supervisory board do not overlap with the duties and attributions of the other tiers.

The attributions and duties of the supervisory board are determined by the law and the by-laws (see answer to 28. a)) and it is an independent body.

Regarding the auditor, Law Nº 19.550 does not prescribe that the financial statements of public companies have to be audited. This legal emptiness was completed by the regulations issued by the financial regulators, such as the Securities and Exchange Commission.

Both, the supervisory board and the auditor, do not participate in the preparation of the financial information, which is a duty of the board of directors. This body and the auditor have to examine the financial statements and prepare a report to be submitted to the shareholders’ meeting, passing judgement on the information they contain, according to the applicable technical standards and, if needed, suggesting to amend them.

Is the relationship between any of the members of the supervisory board and the independent accountant certifying the corporation’s financial statements disclosed to investors? Are such relationships prohibited?

Relationships between the members of the supervisory board and the auditor are not prohibited. Even the same person can act in capacity of member of the board and auditor.

However, given that it is important that investors have information regarding professional and other kinds of relationships existing between the members of the supervisory body auditor, the General Resolution Nº 340 issued by the CNV provides that when the shareholders’ meeting elects the members of the supervisory board, the shareholders who nominate the candidates, have to inform whether the candidates:

Are, were or will be auditors of the issuer –individually or, directly or indirectly, as part of a firm, company or professional association that renders this services;

have professional relationships –individually or, directly or indirectly as part of firms, companies or professional associations that render accounting services- with the issuing corporation, the controlling, controlled or related corporation or with the firm, company or professional association to which he belongs;

if any of the above mentioned situations exist with other corporation with shareholders in common with the issuer, its controlling, controlled or related corporations.

This information must be included in the prospectus and its supplements. In addition, the supervisory board must include as part of its annual report their opinion regarding the quality of accounting and auditing policies applied by the issuer and the objectivity and independence condition of the auditor.

27. Structure of the Board:

Who nominates, elects and removes the members of the supervisory body?

Members of the supervisory board are nominated, elected and removed by the shareholders’ meeting. They can be removed without motive or cause if shareholders representing 5% of the capital minimum, do not oppose.

Preferred stocks have the right to one vote each for the election of the members of the supervisory board.

Do shareholders have cumulative voting rights? If so, please describe.

Shareholders have cumulative voting rights to elect the members of the supervisory board, according to the proceedings described in 21 a) i).

How are vacancies on the board filled?

The definitive or temporary vacancies in the supervisory body are filled by the substitute elected by the shareholders’ meeting. If it is not possible, the board of directors have to call a shareholders’ meeting immediately to elect the succesor that will hold office for the remaining period.

Are the election and identity of the members of the board disclosed to the securities regulator and the stock exchange, and is this information publicly available? If so, how?

The identity of the members of the supervisory board is disclosed to the CNV by written notice containing detailed personal information and indicating whether they are directors of other corporations.

This information shall be registered with the Commercial Public Registrar, where shall be available to the public.

Disclosure is also made with the SROs. Besides, identity and professional backgrounds of the members are part of the information contained in the prospectus.

What are the requirements for serving as a member of the board?

To be a member of the supervisory board it is required:

1) To be lawyer, accountant or a civil association exclusively composed of partners, lawyers or accountants, with a conjunct liability;

To live in Argentina.

Can foreigners or non-residents be board members?

As the requirements to be a member of the supervisory body are professionalism and to personal accomplishment of the duties, foreigners who are not authorized to practice the law or work as an accountant in Argentina, cannot be members of this board.

Non-residents cannot be elected members of the board since it is necessary to live in Argentina. In order to accomplish his duties, it is essential that the member of the supervisory board lives in the place where the corporate business takes place.

What are the prohibitions on being a board member?

The following cannot be members of the supervisory body:

1) Those who cannot be members of the board of directors (see answer to 21. b) ii)).

2) Directors, managers and employees of the corporation or of its controlled or controlling companies;

3) The spouses and consanguinity relatives of directors and general managers.

What is the maximum term of office for members of the board? Are classes of board members permitted? If so, describe the circumstances and rights of each class.

The members of the supervisory body serve for the term determined in the by-laws, which cannot be superior to three years. They must "hold over" until their successors are elected, even if the term is exceeded. They can be re-elected.

When there are different classes of shares, the by-laws can provide that a special class has the right to elect one or more members of the supervisory body and will regulate the election and voting proceedings.

Are there any legal provisions requiring independent members of the board? If so, how is "independent" defined?

Law Nº 19.550 does not refer to the independence of the members of the supervisory board. This matter is regulated by the General Resolution Nº 340 issued by the Securities and Exchange Commission and by the Technical Resolution Nº 15 issued by the Argentine Federation of Councils of Accountants, which provides the criteria to define the independence of the members of this board

Given that it is important that investors have information regarding professional and other kinds of relationships existing between the members of the supervisory body and the controlling shareholders or those corresponding to a category or class of shares, in order to ensure the transparency and safety of the markets and of the corporate business, the General Resolution Nº 340 issued by the Securities and Exchange Commission provides the following:

When the shareholders’ meeting elects the members of the supervisory board, the shareholders who nominate the candidates, have to inform on the independence condition of those candidates –both lawyers and accountants- according to the standards provided by the Technical Resolution Nº 15 issued by the Argentine Federation of Councils of Accountants. This regulation provides that the member of the supervisory board shall not be independent in the following cases:

If he is owner, partner, director, manager or employee of the corporation or of any other entity related to the issuer or held that position during the period corresponding to his participation in the supervisory board;

If he is the husband or relative of any of the owners, directors or managers of the issuer or of its related entities;

If he is shareholder, debtor, creditor or guarantor of the issuer or of its related entities, for significant amounts compared to the corporation’s assets or his own assets;

If he has a significant interest in the corporation or its related entities, or he had them during the period corresponding to his participation in the supervisory board;

If his remuneration is contingent or depends of the results of his duties;

If his remuneration depends on the incomes of the corporation;

This information must be included in the prospectus and its supplements. In addition, the supervisory board must include as part of its annual report their opinion regarding the quality of accounting and auditing policies applied by the issuer and the objectivity and independence condition of the auditor.

Are members of the board compensated? If so, how and subject to what approvals?

Members of the supervisory board are remunerated. The remuneration is determined by the shareholders’ meeting either in a fixed amount or a percentage of the corporation’s incomes.

Describe the typical structure and functioning of the board, e.g., calling of the meetings, quorum, majorities, other formal requirements.

Regarding the typical structure of the supervisory board, the law only provides that in public corporations it may consist of 3 members minimum. With respect to regular meetings, quorum, majorities and other formalities, the law does not provide special rules and they will have to be specified in the by-laws.

This board will have a chairman and also a special minutes book.

28. Functioning of the Board:

Describe the key functions of the board. In particular, please indicate whether the board is responsible for the following functions:

The attributions and duties of the members of the supervisory board are the following:

To supervise the corporation’s management, examining the books and documents when deemed convenient and, at least, once every three months.

To verify, at least once every three months, the cash on hand and in banks and securities and the fulfillment of the corporations’ obligations.

To attend the meetings of the board of directors, the executive committee and the shareholders’ meetings, wi